For Growth · most significantly, a full service five-year diving contract with Saudi aramco, the...

New PlatformFor Growth

OPPORTUNITIESSTRONg ExPOSURE TO lUcRaTIvE maRkETS aNd INdUSTRIES

tta is an investment company with a portfolio that spans several key regions such as thailand, Singapore, Vietnam, middle east and europe. the Group is primarily engaged in global commodity businesses such as shipping, offshore oil & gas, fertiliser and warehouse & logistics. this diversified portfolio of investments provides tta an ideal platform to build long term growth as well as a strong and stable financial foundation.

PERFORmaNcEdIvERSIFIEd PORTFOlIO OF bUSINESSES

within tta’s portfolio, the Company oversees two core investments including thoresen Shipping and mermaid maritime–both of which have the capacity to generate strong revenues and healthy cash flows for tta. this year, mermaid’s net profit contribution to tta grew nearly five-fold from Baht 67 million in fY 2012 to Baht 320 million in fY 2013. though thoresen Shipping operated in an environment of weak freight rates during the year–thelowest global average since 1999–it still report positive eBItDa for the year. Baconco, tta’s fertiliser and warehouse investment in Vietnam, also delivered a strong performance, reporting positive eBItDa of Baht 350 million and record normalised net profits of Baht 277 million.

caPITalISINgWEll-TImEd ExPaNSION OF OFFShORE aNd dRy bUlk FlEET

as an investment holding company, tta’s role is to support and nurture its business units so they in turn can invest in their own growth and development when appropriate. to facilitate such growth initiatives, tta completed a capital increase in fY 2013 and plans another in fY 2014 in order to support the renewal of mermaid’s drilling fleet and the purchase of additional vessels for thoresen Shipping. mermaid’s own capital increase in fY 2013 was supported by tta and the unit is now in the process of building two new tender drilling rigs. thoresen Shipping plans to purchase three to six dry bulk vessels in the near term, capitalising on currently low asset values.

RESPONSIbIlITycONSERvaTIvE aNd TRaNSPaRENT cUlTURE aNd dEcISION-makINg

responsive structures and high levels of personal responsibility within our teams, from the Board level to every employee and department, have been a driving force at tta. over the last two years, this high level of responsibility led tta to take a number of impairments, in line with a strict adherence to conservative financial reporting standards. these decisions mean that tta is now more transparent with its shareholders, debtors and partners, and that the Company’s balance sheet reflects a fully realistic view of the fair value of its assets. at the same time, the Company is committed to unlocking and increasing the value of its investments wherever possible, as reflected by the upcoming listing of Pm thoresen asia Holdings ltd., which could potentially double the value of this investment by unbundling it from the rest of tta’s portfolio.

CoNtENtS

04 09 12 15Important Changes and Developments

resultsat a Glance

Honorary Chairman Statement

Chairman’s message

17 22 26 32Ceo’s message audit Committee’s

reportBoard of Directors & executives officers

Business review and outlook

58 64 65 74Corporate Social responsibility Policy

financial Highlights management Discussion & analysis

Statement of the Board of Directors’ responsibilities for the financial Statements

THORESEN THAI AGENCIES PLC.

Annual Report 2013

02

75 160 168 168Consolidated and Company financial Statements

management Structure Income Structure audit fees

169 176 178 179risk factors Shareholdings by

Directors/executivesShareholding Structure

Dividend Policy

180 193 194 198Corporate Governance report

Inside Information Control

related Party transactions

Company Investments

203 207Glossary the Company


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03

2013tSS acquired three dry bulk vessels, one second-hand and two new build vessels. aoD took delivery of three

new build jack-up rigs.

tta established thoresen Shipping Denmark aPS as a commercial office based in Copenhagen, Denmark to serve its european client base.

tta raised Baht 3,964 million by way of a rights issue in combination with warrants to purchase ordinary shares of tta (tta-w3) to pursue its business growth.

mermaid raised SG$ 175.78 million by way of a rights issue to pursue its business growth.

the total owned fleet as of 30 September 2013 consisted of eighteen dry bulk vessels, eight offshore vessels, two tender drilling rigs, and three jack-up rigs (33.76% owned by mermaid). additionally, approximately thirteen full-time equivalent dry bulk vessels were chartered in to meet client demand during the year.

2012tta acquired one second-hand dry bulk vessel. the business restructuring of dry bulk shipping was

completed, as eight thai flagged vessels were transferred to thoresen Shipping Singapore Pte. ltd. (“tSS”).

tta’s convertible bonds matured on 24 September 2012.

2011Soleado acquired a 20% stake in Baria Serece as part of its strategy to create an integrated logistics

business in Vietnam.

tta acquired three dry bulk vessels, two in the second-hand market and one new build vessel.

Soleado acquired an additional 1.166% ownership in Petrolift Inc. (“Petrolift”) to have 40.0% ownership.

Soleado acquired 33.33% of Qing mei Pte. ltd. (“Qing mei”) to develop a new coal-mining project in Indonesia.

asia offshore Drilling limited (“aoD”), a 33.76% associate company of mermaid, raised USD 180 million from the international capital markets and signed contracts to build 3 jack-up rigs worth USD 538 million with Singapore Keppel felS limited (“Keppel felS”).

ImPORTaNT chaNgES aNd dEvElOPmENTS


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04

2010Soleado acquired a 38.83% stake in Petrolift, a petroleum tanker company in the Philippines.

mermaid acquired a 100% stake in Subtech ltd. in Seychelles to expand its subsea engineering services in the middle east.

tta issued unsubordinated and unsecured domestic debentures of Baht 4.0 billion to refinance existing loans and to increase working capital.

tta acquired four dry bulk vessels, three in the second-hand market and one new build vessel. mermaid acquired one second-hand and three new build subsea vessels.

2009tta established Soleado Holdings Pte. ltd. (“Soleado”) as an investment holding company for projects,

assets, or companies outside of thailand.

tta acquired an 89.55% stake in Unique mining Services Plc. (“UmS”), a coal logistics company in thailand, as part of its strategy to create an integrated coal business.

Soleado acquired a 100% stake in Baconco Co., ltd., a fertiliser company in Vietnam. Soleado acquired a 21.18% stake in merton Group (Cyprus) ltd., which has a coal mining joint venture in the Philippines.

mermaid raised SG$ 156 million by way of a rights issue to pursue its business growth.


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05

RESUlTS aT a glaNcE

revenues rose 13% year-on-year to Baht 18,463 million, as a result of more vessel days at thoresen Shipping and improved performance at offshore oil and gas services subsidiary, mermaid. However, eBItDa softened by 11% to Baht 1,797 million as a result of higher SG&a driven by mermaid’s contract start-up costs in the middle east and Baconco’s increased domestic marketing efforts. results were partially buoyed by a 94% increase in equity income, primarily due to mermaid’s associate company aoD beginning operations of two high-specification jack-up rigs, aoD I and aoD II, during the year. Before extraordinary items, tta reported net losses of Baht 97 million. Net losses of Baht 5,080 million were driven primarily by non-cash impairments and write-downs.

Income statement

baht millionsRestated

Fy12 Fy13 %yoy

Revenues 16,347 18,463 13%

freight charges 3,528 4,747 35%

offshore services 5,721 8,243 44%

Sales 6,782 5,141 (24%)

costs 12,476 14,548 17%

gross profits 3,871 3,915 1%

SG&a 1,856 2,118 14%

EbITda 2,015 1,797 (11%)

Depreciation & amortisation

1,556 1,595 2%

other income 229 174 (24%)

equity income 129 250 94%

EbIT 817 626 (23%)

finance costs (594) (510) 14%

Income taxes (166) (213) (29%)

Profits before EI 57 (97) (270%)

extraordinary items (4,577) (4,843)

minority interests (39) (212)

forex translation 64 71

Net profit (4,494) (5,080) (13%)

No. of shares (million) 708 866

Basic ePS (Baht) (6.35) (5.86)

Simplified consolidated earnings statement


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09

Simplified earnings statement for Thoresen Shipping

freight revenues improved 35% year-on-year to Baht 4,747 million, as chartering-in activity rose almost 3 times to serve a growing number of commercial relationships. Despite outperforming its benchmark revenue index by 7% and maintaining its position as an industry cost leader, a 14-year low in global industry-wide freight rates meant thoresen Shipping operated below its fully loaded breakeven point. following impairments against the fleet, the fully loaded breakeven point has decreased to approximately USD 8,900 per day, positioningthoresen Shipping for profitability in 2014.

Thoresen Shipping’s income statement*

baht millions Restated

Fy12 Fy13 %yoy Total revenues 3,528 4,747 35%total costs 2,608 4,115 58%gross profits 920 632 (31%) Gross margins (%) 26% 13% (13%)SG&a 252 295 17%EbITda 668 337 (50%) eBItDa margins (%) 19% 7% (12%)EbIT 217 (143) (166%)*as consolidated on tta’s P&l

Utilisation rates

*Utilisation rate per calendar days

Simplified income statement for mermaid

mermaid’s income statement*


Fy12 Fy13 %yoyTotal revenues 5,721 8,243 44%total costs 3,752 5,989 60%gross profits 1,969 2,254 14% Gross margins (%) 34% 27% (7%)SG&a 581 885 52%EbITda 1,389 1,369 (1%)eBItDa margins (%) 24% 17% (8%)EbIT 698 816 17%*as consolidated on tta’s P&l

mermaid’s net profit contribution to tta grew almost five-fold to Baht 320 million while its revenues improved by 44% to Baht 8,243 million, as it began to realise the proceeds of several high value contracts, most significantly, a full service five-year diving contract with Saudi aramco, the world’s largest oil and gas company. Costs to initiate service on some of mermaid’s large contracts over the past year led to a direct cost increase of 60%. at the same time, SG&a grew by 52% due largely to recruitment efforts in the middle east region. mermaid associate company aoD contributed Baht 122 million of equity income to tta, as it launched operations of aoD I and aoD II during the fiscal year.

13.1

16.114.9

4.5

3,528

4,747

0 0

1,000

2,000

3,000

4,000

5,000

6,000

5

10

15

20

25

30

35

40

FY12 FY13

(Million Baht)

Chartered-in FTE - LHS Owned vessel FTE - LHS

Freight revenue - RHS

FY11 FY12 FY13

Subsea Drilling


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UmS’ eBItDa margin improved slightly to 1% compared to negative 1% the year before, as high sales of 0-5 mm coal dropped significantly in 2013. this drop in volume, coupled with the fact that UmS continues to face inefficiencies at its recently reopened Samut Sakorn plant, meant that revenues fell 44% year-on-year, to Baht 1,931 million.

through volume reduction, UmS’ net losses would have narrowed year-on-year without the Baht 243 million provision for coal inventories.

Simplified income statement for UmS

UmS’ income statement*


Fy12 Fy13 %yoyTotal revenues 3,428 1,931 (44%)total costs 3,036 1,581 (48%)gross profits 391 350 (10%) Gross margins (%) 11% 18% 7%SG&a 431 337 (22%)EbITda (40) 14 134% eBItDa margins (%) (1%) 1% 2%EbIT (107) (51) 52%*as consolidated on tta’s P&l

baconco’s income statement*


Fy12 Fy13 %yoyTotal revenues 3,376 3,229 (4%)total costs 3,015 2,759 (8%)gross profits 361 470 30% Gross margins (%) 11% 15% 4%SG&a 104 130 25%EbITda 257 340 32% eBItDa margins (%) 8% 11% 3%EbIT 243 333 37%*as consolidated on tta’s P&l

Baconco continued to shine in fiscal 2013, reporting record net profits of Baht 253 million, up 24% year-on-year. the company sold a record 196,400 tonnes of fertiliser and by securing raw materials at more attractive prices, improved its gross profits by 30% compared to the previous year. Baconco’s warehouse division doubled its revenues after adding a new warehouse, Baconco 5, in february 2013.

Simplified income statement for baconco

Coal: 0-5 mm EBITCoal: Other sizes

(EBIT Baht millions)

(Volume Thousand Tonnes)

1,250

1,000750

500250

0

0

-50

-100

-150

FY12

822

574

-107

-51

211

580

FY13

200

150

100

50

0

350(EBIT Baht millions)

(Volume Thousand Tonnes)

30025020015010050

FY12

193 196

FY13

Sales Volume EBIT

243333


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I bELIEvE IN TTA.

“NEw PLATfORm fOR gROWTh”

Prayudh Mahagitsiri, Honorary Chairman

2013 was a year of contrasts for Thoresen Thai agencies Public company limited (“TTa”, “the group” or “the company”). There have been very strong and promising achievements in some of our businesses, as well as difficulties in others, due in part to an unfavourable economic environment or operating issues specific to certain businesses.

though tta took significant impairments and extraordinary write-downs during the year, the Company also won major new contracts, especially in the oil & gas services sector, which already started to generate revenues and profitability in the second half of 2013, and will contribute very significantly to net income in the current fiscal year. the Company also raised its financing capabilities through a capital increase, giving us the ability to invest in promising projects in the near to medium term. and we have just announced a second capital increase plan in order to make additional opportunistic investments, particularly in dry bulk shipping. our objective is to further reinforce the Company’s ability to fund important growth projects and in the process, to lock up long term profitability.

Beyond the actual operating performance, one of the key announcements we made that will shape the Company for years to come is our executive succession plan. mr. Chalermchai mahagitsiri is succeeding m.l. Chandchutha Chandratat as President & Ceo of tta, while mr. Krailuck asawachatroj has taken over from mrs. thitima rung-kwansiriroj as the Group Cfo.

on behalf of the entire Board, I would like to express my gratitude to both m.l. Chandchutha Chandratat and mrs. thitima rungkwansiriroj for all of their important contributions over the years.

chaIRmaN’S mESSagE

Having served as executive Vice Chairman and member of tta’s executive committee, mr. mahagitsiri has already been overseeing key functions at tta, and has been closely involved in the Company’s important strategic decisions. mr. asawachatroj, who joined tta in July 2013, has strong investment banking experience, which will be required as tta embarks on its next phase of growth and expansion.

I have full confidence that under their leadership, tta will continue to make important advances across its portfolio of businesses, and that its best days are still ahead. we have ensured that the management change is being implemented as smoothly as possible to avoid any unwanted interruptions to the business. the Company is unique for its size, in that it has a global operating footprint and multinational teams of talent. Historically, the Company has faced all challenges head on and taken necessary actions without losing sight of our longer term goals. It has been this focus that has given me good reason to feel confident about the future.

tta remains fully committed to the next phase of its development strategy, focused on nurturing and growing its core businesses and maximising shareholder value over the near and long term.

Yours sincerely,

mr. Prasert BunsumpunChairman


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during the last fiscal year, TTa faced various challenges, including a prolonged difficult economic environment in the dry bulk shipping business and some exceptional non-cash write-downs, impairments and provisions. as a consequence, for the year ended 30 September 2013, TTa reported net losses of baht 5,080 million and losses per share of baht 5.86.

cEO’S mESSagE

rates in the dry bulk industry, which have negatively affected the company’s vessel values. the dry bulk shipping industry has not recovered as per tta’s forecasts, as well as that of market expectations, and in particular, asset prices have fallen significantly. this reality, coupled with our outlook for restrained improvement over the medium term, forced us to consider an impairment against the dry bulk shipping fleet.

tta also announced a non-cash impairment of Baht 120 million against its investment in merton, through which it holds indirect stakes in two coal mining projects, in the Philippines and Indonesia respectively.

finally, tta’s Board of Directors decided to take an additional write down of approximately Baht 596 million against goodwill related to tta’s acquisition of UmS, which continues to face challenges in its business. while the Samut Sakorn plant was allowed to reopen during the third quarter, we are still unable to classify certain kinds of coal and are kept from using our own port at the facility. the issue we have faced has dragged on longer than could have reasonably been anticipated, forcing us to review the valuation of goodwill of this purchase on our balance sheet.

Despite the impairments announced at the end of last year, tta remains healthy and has ample cash.

the significant net losses this year, driven primarily by non-cash items, however mask many of the successes we have achieved over the past 12 months, including a strong turnaround for mermaid, a record year for Baconco, and sustained cash flow positive performance for thoresen Shipping, which continues to remain cost competitive despite the challenging environment. In many ways, the focus over the last two years has been on improving the fundamentals across our various businesses and on our balance sheet. In 2014, we will enter a new phase in which we begin to capitalise on all of this important groundwork.

Impairment decisions

Impairment decisions announced for the 2013 fiscal year were carefully deliberated by the management and Board, and took into consideration the counsel of third-party consultants. the decisions were finally taken with a view towards correcting past unfortunate mistakes and upholding conservative financial reporting and accounting practices, in line with our corporate governance policies.

a non-cash impairment of Baht 3,917 million was taken against the dry bulk shipping fleet owned by thoresen Shipping, tta’s wholly owned dry bulk shipping subsidiary. the decision came as a result of the prolonged downturn and resultant low freight


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Results

Despite the challenging environment, thoresen Shipping operated its fleet on a cash positive basis, outperforming the market both in terms of costs and revenues. thoresen Shipping’s time Charter equivalent (“tCe”) was USD 8,364 per day, outperforming the Baltic Supramax Index (which is most closely correlated to thoresen Shipping’s fleet) by 7% on a fleet adjusted basis. thoresen Shipping also continued to focus on cost efficiencies. at USD 4,087 per day, its owner’s expenses remained significantly lower than the industry average of USD 4,500-4,600 per day. as a result, thoresen Shipping still reported a positive eBItDa of Baht 337 million in fY 2013.

mermaid maritime continues to benefit from increased oil and gas exploration activity and the company’s net profits grew nearly five-fold from the previous year, to Baht 320 million. while the subsea utilisation rate increased marginally to 71%, what really spurred mermaid’s success was its ability to deliver an expanded suite of higher value services. this effort resulted in operating profits more than doubling to USD 24.3 million with an improved operating margin of 9.8% compared to 5.9% in the previous year. Drilling revenue was impacted mainly due to mtr-2 staying in special periodic service (“SPS”) longer than expected. mtr-1 meanwhile, successfully concluded its contract as an accommodation rig in July 2013. associate company aoD has now taken delivery of all three of its jack-up rigs but their equity income contribution was marginal as the rigs were delivered between april and october 2013. aoD is expected to contribute significantly in 2014 as all rigs will have performed a full year of service.

Group Infrastructure brought in mixed results in fY2013, with Baconco reporting record profits of Baht 253 million. UmS on the other hand, was finally allowed to resume operations at its Samut Sakorn plant late in the third quarter of the fiscal year, after nearly two years of government-mandated closure. However, inefficiencies related to government conditions imposed on operators in the region have prevented a meaningful turnaround, and UmS reported a marginally positive eBItDa of Baht 14 million for the fiscal year.

overall in fiscal year 2013, positive contributions reported on the back of a rebound at mermaid and a record year for Baconco helped to counterbalance weak results from thoresen Shipping and UmS.

major Successes

exploration and production in the oil and gas industry continues to heat up throughout asia and the middle east. aoD, an associate company of mermaid, concluded in march two additional contracts with Saudi aramco, the world’s largest oil and gas company, worth up to USD 462 million of revenues. aoD contributed Baht 124 million of equity income this year and with its third jack-up rig deployed early in the 2014 fiscal year, we expect this number to climb in 2014.

In a short period of time, Saudi aramco has become one of our Group’s most significant clients, starting with a five-year inspection, repair, and maintenance contract last year. Going forward, we expect the middle east to remain a lucrative region for a number of tta’s business units.

In September, Pt Seascape Surveys Indonesia (“Seascape”), a subsidiary of mermaid was awarded a two-year contract to provide offshore inspection, repair, and maintenance (“Irm”) services to a major Indonesia-based upstream oil and gas operator. the estimated contract value for the initial term is USD 55 million.

Baconco’s warehouse division continued to thrive, with rental revenues more than doubling in fiscal 2013, driven by additional space from the opening of the Baconco 5 warehouse in february. while earnings from the warehouse division are small relative to Baconco’s fertiliser segment, the strong performance we have seen provides strong impetus for further growth and investment.

finally, tta successfully raised Baht 3,964 million to fund its business expansion plans through a rights offering (“ro”) in the second quarter of fiscal 2013. much of those funds were deployed to support a capital increase plan initiated by subsidiary mermaid, which plans to renew its drilling fleet in order to realise the full potential of the current market upturn.


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New Round of Fundraising

In order to capitalise on further opportunities in the dry bulk sector as well as for other subsidiaries, tta announced plans for a follow-up ro to be carried out in the second quarter of fiscal 2014, aiming to raise up to Baht 4,000 million. the majority of the proceeds from the previous ro were used to maintain tta’s ownership in mermaid, and with formidable rationale to fund further growth opportunities, tta is seeking the support of its shareholders to co-invest.

In particular for dry bulk shipping, 2013 was a difficult year from the prospective of both the shipping and european bank industries. as a result, it was difficult to secure loans to fund vessel acquisition. while we still managed to purchase three vessels, our aspirations for further acquisitions remained unrealised. we have now secured loan facilities, which when combined with equity, would allow us to acquire between three and six vessels at reasonable prices. the ability to acquire vessels at bottom-of-the-cycle prices would give thoresen Shipping a distinct competitive advantage for years to come. In addition to dry bulk, we will also explore opportunistic investments in other subsidiaries and associate companies.

management Succession

the year ahead ushers in a change in tta’s senior management team, and through a well-thought out and planned transition, we have worked hard to ensure that there are no interruptions to the business.tta will continue to focus on growing and nurturing our investments across all three of tta’s business groups and look for opportunities to build greater value in the months and years to come.

Outlook

the outlook is largely positive for our core businesses, including thoresen Shipping, mermaid and Baconco. Increased demand for iron ore, a recovery in the US, and slowing deliveries of new assets all bode well for dry bulk shipping in the medium term. we believe that freight rates in 2014 will be higher than in 2013, but the rebound will be a gradual one.

tta remains committed to thoresen Shipping’s growth and its plans to acquire three to six vessels at reasonable prices over the next 12-18 months as part of a continuing fleet growth initiative. approximately 50% of thoresen Shipping’s vessels are positioned in higher-yielding atlantic routes, following the opening of the Company’s first european chartering office in Copenhagen, Denmark. thoresen Shipping plans to open its second office outside of asia in the US during the second quarter of the 2014 fiscal year, an initiative we feel will allow us to acquire additional higher-yielding routes. with the average daily depreciation on thoresen Shipping’s dry bulk vessels being reduced by 48% as a result of asset impairments, there is good reason to believe the company will return to profitability in fiscal 2014

likewise for UmS, we will continue to support UmS in its effort to turnaround the company and move forward to a more profitable business. However, there is still some uncertainty about whether UmS can get back to full operations in 2014.

our push to position more of mermaid’s subsea vessels in the middle east and the North atlantic will have a positive impact on our earnings in 2014 as exploration and production activities are expected to remain resilient throughout the year.

In Vietnam, we expect to continue seeing growth across our business, with Baconco leading the way with its fertiliser and logistics business lines.

all mentioned above are business essences that new management team have implemented over the year in order to build the growth of tta, just like this year’s theme – “New Platform for Growth”.

Sincerely yours,

mr. Chalermchai mahagitsiriPresident & Ceo


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aUdIT cOmmITTEE’S REPORT

thoresen thai agencies Public Company limited has three audit Committees consists of three independent directors viz., mr. Krish follett - the Chairman, mr. Santi Bangor and mr. Cherdpong Siriwit, both, - Committee members. all members possess adequate qualifications for their posts as specified by the audit Committee Charter and in accordance with the Securities and exchange Commission and the Stock exchange of thailand regulations and best practice guidelines.

the audit Committee has performed its duties and responsibilities independently, as assigned by the Board of Directors in compliance with the Charter which has been carefully reviewed, updated and approved by the Board of Directors, included the requirements of the Securities and exchange Commission and the Stock exchange of thailand, ensuring that the Company’s business operations were carried out without any conflict of interest, with adequacy of internal control systems, risk management and duties under the corporate governance in order to the management and employees executed their duties with honesty, responsibility and in accordance with the Company’s policies. In the year 2013, the audit Committee’s performance of its duties is summarised as follows:

Review of financial reporting process the audit Committee has reviewed and discussed with the external auditor and executives responsible for preparing the financial report in relation with significant information for the Company’s quarterly and annual financial statements for the year 2013 as well as consolidated financial statements of thoresen thai agencies Public Company limited and its subsidiaries, including change in significant

accounting policy, significant related party transaction, significant acquisition and disposal of the Company’s asset, accuracy and adequacy of information disclosure, significant unusual and estimated transaction, if any, for the benefit of investors or users of such statements before submitted to the Board of Directors for approval. In addition, the Committee held meetings with the external auditors without the presence of the Company’s management so as to freely discuss important issues which may arise, as well as to hear whether there was any suspicious information which indicated potential fraud, in accordance with the section 89/25 of the Securities and exchange act B.e. 2535 amended by the Securities and exchange act (No. 4) B.e. 2551 the audit Committee is of the opinion that the Company has a proper financial reporting process to disclose its financial information, in which the financial statements were free from material misstatement and prepared in accordance with thai financial reporting Standards.

In addition, the Internal auditors have also reviewed the connected transaction or transaction that may lead to conflicts of interests ensuring that the transaction occurred has complied with the Securities and exchange Commission and the Stock exchange of thailand regulations requirements, other regulatory bodies and are reasonable and for the highest benefit of the Company. the result of the review has been reported to the audit Committee and subsequently the Board of Directors. the audit Committee and Board of Directors are of the opinion that the aforesaid transactions are reasonable, fair, without conflict of interest, in all material respects, transparency and for the highest benefit of the Company.


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Review of internal control system the audit Committee has determined the independence of Internal audit Department including the chain of command in order to establish the credibility and independence of Internal audit Department as well as all internal audit activities and consulting activities were performed effectively, efficiently and carried out in a manner most beneficial to the Company and its shareholders by reviewing the scope of internal auditing, their responsibilities and functions, and approved the revised internal audit charter and annual audit plan, which based on the Company’s key risk areas and emphasised on the evaluation of the effectiveness of key control points for each process.

Director, Internal audit, miss runpavee Daengnoy was appointed in September 2012 after carefully consideration of all qualified candidates. the audit Committee has concluded that miss runpavee has high degree of expert knowledge and professional experience required for the purposed of conducting the Company’s Director, Internal audit. During the year she has provided the audit Committee with her view on the effectiveness and efficiency of internal audit activities by focusing on high-risk auditable entities and also on various consulting activities. the audit Committee will evaluate her performance with President and Chief executive officer during the annual performance assessment.

the audit Committee has reviewed the adequacy and suitability of the internal control system assessment that the Internal audit Department reported to the Committee, including the results of audit on the operational processes of key businesses of the Company and core subsidiaries. furthermore, the audit Committee visited operation sites of core subsidiaries to gain business process insight and also gave useful recommendations to improve effectiveness of internal control systems. In addition, the audit Committee evaluated management control systems, financial control systems and compliance control systems, based on guidelines from the office of the Securities and exchange Commission. Internal auditors have also followed up on the results of

the aforesaid review and audit which the results of the audit and the recommendations were discussed with the related staff and management prior to report to the audit Committee. the results have shown that the systems and processes are appropriate to the Company’s operations. the external auditor has also reported that was no significant deficiency impacting to the Company’s financial statements identified. the audit Committee, therefore, is of the opinion that the Company has proper and adequate internal control systems including organisational control and environment measure, risk management measure, management control activities, information and communication measure, and monitoring systems, as management determines is necessary and there are no significant deficiencies identified whether due to fraud or error.

Review of compliance with laws and regulations the audit Committee has reviewed the Company’s operating performance and designed processes to ensure that it had complied with the law on securities and exchange Be 2535, the exchange’s regulations and requirements and other laws relating to the Company’s businesses. the audit Committee is of the opinion that the Company has been in compliance with significant laws and regulations to which the operations of the Company are subjected.

Review of misconduct or fraudthe audit Committee acknowledged all concerns of misconduct or fraud and the final investigation report by Internal auditors according to whistleblower Policy by monthly. No fraudulent case was found in 2013.

appointment of the external auditor the audit Committee took into consideration the nomination and appointment of the external auditor and the annual audit fee for 2014. this process entailed assessment of the current external auditor for its independence, performance from the year 2013, knowledge, competency, and experience in core businesses, available team support and competitiveness of the audit fee. after careful consideration, the Committee concluded that KPmG


Annual Report 2013

23

Phoomchai audit ltd. external auditors acted independently, demonstrated a high degree of expert knowledge and professional experience required for the purposed of conducting the Company’s external audit, performed with satisfactory result and with a competitive audit fee.

the audit Committee has recommended KPmG Phoomchai audit ltd. as external auditor to the Board of Directors before seeking approval at the Shareholders’ meeting for the appointment of mrs. Siripen Sukcharoenyingyong, Certified Public accountant registration No. 3636; and/or mr. Charoen Phosamritlert, Certified Public accountant registration No. 4068; and/or mr. Veerachai ratanajratkul, Certified Public accountant registration No. 4323; and/or miss Pornthip rimdusit, Certified Public accountant registration No. 5565; all of KPmG Phoomchai audit ltd., as the external auditor of the Company for the year ended 30 September 2014 with the audit fee of Baht 4.65 million.

(from 1 october 2012 to 30 September 2013)

No. audit committee member Position No. of attendance/meeting

1. mr. Krish follett audit Committee Chairman 14/14

2. mr. Santi Bangor audit Committee member 13/14

3. mr. Peter Stokes(due to retire by rotation on 30 January 2013)

audit Committee member 3/3

4. mr. Cherdpong Siriwit(appointed on 14 february 2013)

audit Committee member 8/10

The audit committee meeting and self assessmentsNormally, the audit Committee has meeting before the Board of Directors’ meeting so that the minutes of the audit Committee meeting and discussions with Internal auditors and external audits without management’s presence in such discussions could be sent to the Board of Directors for consideration, acknowledgement, discussions and asking for the suggestions from the Board.

the members of audit Committee regularly have informal and formal discussions with internal auditors in connection with the results of the various areas of review undertaken by internal auditors. the formal audit Committee meeting usually takes around 4-6 hours, in average. In the year 2013, audit Committee held 14 regular meetings; the record of attendance of the members of audit Committee is summarised as follows:


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the Board of Directors meeting held on 14 february 2013 approved the appointment of mr. Cherdpong Siriwit to be a new audit Committee to replace mr. Peter Stokes who retired by rotation, with effect on 14 february 2014.

In addition, the Committee carried out its own performance assessment, against the audit Committee Charter approved by the Board of Directors, relevant laws and regulations and assignment from the Board of Directors. the self-assessment was due to be benchmarked against guidelines from the Securities and exchange Commission. the findings were that its performance was of a very good quality.

appointment of the existing audit committee members

In summary, the audit Committee has continuously performed its duties and responsibilities with knowledge, ability, carefulness and sufficient independence, provided comments and recommendations which were beneficial to all of the Company’s stakeholders and also has determined that the Board of Director, management has performed their job professionally and in pursuit of the Company’s strategic goals, with adequate internal control compatible with its business, together with reliable accounting practice and financial statements, and compliance with significant and relevant laws and regulations.

for and on behalf of the audit Committee of thoresen thai agencies Public Company limited

Krish follettChairman of the audit Committee


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Mr. Prasert Bunsumpun was appointed as director in January 2012 and Chairman of the Board in March 2012. Mr. Prasert Bunsumpun serves as Chairman of PTT Global Chemical Plc. He holds directorships at PTT Plc., Krung Thai Bank Plc., and Shin Corporation Plc. He also is Chairman of Mermaid Maritime Plc., and the Thailand Business Council for Sustainable Development (TBCSD). He was President and CEO of PTT Plc., Chairman of IRPC Plc., PTT Exploration and Production Plc., Chairman of PTT Chemical Plc., PTT Aromatic and Refinery Plc., together with Director of Thai Oil Plc., and Bang Chak Petroleum Plc.

Mr. Bunsumpun holds a M.B.A. from Utah State University, U.S.A., a B.Eng. in Civil Engineering from Chulalongkorn University. He received Honorary Doctoral in Engineering from Chulalongkorn University, Honorary Doctoral in Management from National Institute of Development Administration (NIDA), Honorary Doctoral in Management Science from Petchaburi Rajabhat University, Honorary Doctoral in Management from Ma-hasarakarm University, Honorary Doctoral in Social Innovation Management, Suan Sunandha Rajabhat University. Moreover, Mr. Bunsumpun received a Certificate in Advanced Management Program (AMP 155) from Harvard Business School, USA., Certificate in National Defense College (Class Number 4010), Certificate in Politics and Government in Democracy for Executives (Class 6) from King Prajadhipok’s Institute, and Certificate in Capital Market Academy Leadership Program (Class 3) from Capital Market Academy. He also completed the Director Accreditation Program (DAP 26/2004) in 2004 and the Role of Chairman Program (RCP 28/2012) in 2012 by the Thai Institute of Directors Association (IOD).

Mr. Chalermchai Mahagitsiri was appointed as director in January 2012 and Executive Vice Chairman in February 2013. He serves as Chief Executive Officer of PM Group Co., Ltd. which is a holding company of Mr. Prayudh Mahagitsiri family, Chief Executive Officer and Executive Vice Chairman of Mermaid Maritime Plc., and Vice Chairman of Unique Mining Services Plc. He also serves as Director of Quality Coffee Products Co., Ltd. which is partnering with Nestle SA Switzerland to produce Nescafe. He also serves as Director of Posco-Thainox Public Co., Ltd., Sak Chaisidhi Co., Ltd. and Thai Film Industries Plc., and Managing Director of Lakewood Country Club Co., Ltd.

Mr. Mahagitsiri holds a M.S. in Finance from Boston University and a B.S. in Finance from Suffolk University, both in USA. Mr. Mahagitsiri completed the Director Accreditation Program (DAP 30/2004) in 2004 and the Directors Certification Program (DCP 53/2005) in 2005 by the Thai Institute of Directors Association.

1. Mr. Prasert Bunsumpun (61)Chairman of the Board/Chairman of Executive CommitteePercentage of Shareholding: 0.002%Date of first appointment: 31 January 2012

2. Mr. Chalermchai Mahagitsiri (35)Executive Vice Chairman/Member of Executive Committee/Member of Risk Management CommitteePercentage of shareholding: 15.696%Date of first appointment: 31 January 2012(was appointed as President & Chief Executive Officer effective on 1 January 2014)

BOaRD Of DiRECtORS

M.L. Chandchutha Chandratat joined in 2005 as the Chief Executive Officer. His professional experience began with Bank of America, where he served in San Francisco (U.S.A.), Hong Kong, and Bangkok from 1989 to 1994. He joined Bangkok Bank Plc. from 1994 to 2000 and worked for J.P. Morgan, Hong Kong from 2000 to 2002 and Morgan Stanley Dean Witter Asia (Singapore) Pte. Ltd. from 2002 to 2005.

He received his M.B.A. from the University of California at Berkeley in 1989 and his B.S. (magna cum laude) in Economics from the University of Minnesota in 1987. In 2006, he completed the Directors Certification Program (DCP 70/2006) by the Thai Institute of Directors Association.

3. M.L. Chandchutha Chandratat (47) President & Chief Executive Officer/Member of Executive Committee Percentage of Shareholding: 0.113% Date of first appointment: 31 January 2005(resigned, effective on 31 December 2013)


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6. mr. Santi bangor (67) chairman of Nomination and Remuneration committee/chairman of corporate governance committee/member of audit committee/Independent directorPercentage of Shareholding: 0.00%date of first appointment: 31 January 2012

5. mr. krish Follett (64)chairman of audit committee/chairman of Risk management committee/Independent directorPercentage of Shareholding: 0.00%date of first appointment: 12 april 2012

mr. Santi Bangor has been elected as the tta director since January 2012. He has also served as an Independent Director and member of the audit Committee of People’s Garment Plc. since 2009. He is appointed as a member of State enterprise Performance agreement and Performance appraisal Sub-Committee on Communication and energy Sector, Performance appraisal Committee, ministry of finance in 2012. He was the President of Yonok University (Nation University) during 2006-2009, and Deputy Secretary General to the National economic and Social Development Board, office of the Prime minister (1997-2006). mr. Bangor was also appointed to serve as the Director of Government Pension Board, metropolitan electricity authority and State railway authority.

mr. Bangor holds a m.a. in agricultural economics from texas tech University, USa, a B.a. in Political Science (fiscal) from Chulalongkorn University, and a Development Certificate from Cambridge University, UK. and Dip.from National Defence College ( NDC 388). In 2001, mr. Bangor completed the Director Certification Program (DCP 12/2001). In 2013, he also completed the advanced audit Committee Program (aCP 10/2013), the role of the Compensation Committee Program (rCC 16/2013), monitoring fraud risk management (mfm 9/2013), monitoring the System of Internal Control and risk management (mIr 14/2013), monitoring the Internal audit function (mIa 14/2013), and monitoring the Quality of financial reporting (mfr 17/2013), all by the thai Institute of Directors association (IoD).

mr. Krish follett was appointed as director since april 2012. He serves as Independent Director and Chairman of the audit Committee of Property Perfect Plc., Independent Director and Chairman of the audit Committee of amana leasing Plc., Independent Director and member of the audit Committee of thanulux Plc., and Independent Director and Chairman of the risk management Committee of thai wacoal Plc. He also served as assistant Governor of operations Group, Senior officer of financial Institution oversight and examination Department of the Bank of thailand, and Vice President, Capital markets, enforcement Department of the Securities and exchange Commission (SeC), thailand. at present, he serves as Honorary Director of Nakorn Phanom University.

mr. follett holds a m.B.a. (finance) from thammasat University, a B.a. in economics from thammasat University, and a Certificate in advanced management Program from Harvard Business School, Boston, USa. mr. follett completed the Director Certification Program (DCP 149/2011) in 2011, and the Diploma of the Directors Certificate Program in 2012 by the thai Institute of Directors association (IoD).

4. mr. chia Wan huat Joseph (54) member of Executive committee/member of corporate governance committeePercentage of shareholding: 0.00%date of first appointment: 31 January 2012

mr. Chia was appointed as director since January 2012. He serves as Senior executive Vice President of Pm Group Co., ltd., director of mermaid maritime Plc., and director of Unique mining Services Plc. from 2005 to 2011, he was the Senior executive Vice President of Structured finance Group for advance finance Plc. He was responsible for financial advisory business focused on steel, mining, paper and energy companies in thailand, malaysia and Singapore. During 2003 to 2004, mr. Chia was the assistant managing Director of South east life Insurance and South east General Insurance Company in thailand. from 1999 to 2002, mr. Chia was the managing Partner of financial advisory company, Pacific Century Consultant limited focused on infrastructure companies.

mr. Chia holds a master’s Degree (emBa) from Sasin Graduate School of Business, Chulalongkorn University in a joint program with Kellogg Graduate School of management of Northwestern University of USa. In 2012, he completed the Directors Certification Program (DCP 165/2012) by the thai Institute of Directors association (IoD).


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mr. mohammad rashed ahmad m. al Nasseri was appointed as director since January 2013. He serves in a number of prominent roles within the United arab emirates (“Uae”) government, including General Director General of Private and official office of H.H Sheikh mohammed Bin Khalifa Bin Zayed al Nahyan, and member of the National Consulting Council. mr. al Nasseri also serves asa General manager of al ain equestrian, Shooting & Golf Club, Vice President of Youth Hostel Society, and a Board member of the emirates Insurance Company, the National Investor Company and alwifaq finance Company.

He holds a license of law from emirates University.

9. mr. mohammad Rashed ahmad m. al Nasseri (43)member of Nomination and Remuneration committee Percentage of Shareholding: 0.00%date of first appointment: 30 January 2013

7. ms. ausana mahagitsiri (33) member of Nomination and Remuneration committee/member of corporategovernance committee/Non-Executive directorPercentage of shareholding: 4.07%date of first appointment: 31 January 2012

ms. ausana mahagitsiri was appointed as director since January 2012. She serves as Chief operating officer of Pm Group Co., ltd. which is a holding company of mr. Prayudh mahagitsiri family, managing Director of mountain Creek Development Co., ltd., and a director of Unique mining Services Plc.

She holds a m.B.a. from Sasin Graduate Institute of Business administration of Chulalongkorn University in a joint program with Kellogg Graduate School of management of Northwestern University, USa, and a B.S. in Business administration from Boston University School of management in Boston, USa. In 2014, ms. mahagitsiri completed the Director accreditation Program (DaP 30/2004) by the thai Institute of Directors association (IoD).

8. mr. ghanim Saad m. alsaad al-kuwari (49)Independent directorPercentage of Shareholding: 0.00%date of first appointment: 31 January 2012

mr. Ghanim Saad m. alsaad al-Kuwari serves as Chairman of Qatar Project management Company since 2008, Chairman and managing Director of Barwa real estate since 2005, and managing Director and Ceo of Qatari Diar real estate Investment Co. since 2006. He currently chairs several boards in many businesses in Qatar and regionally including: Barwa Bank, al Imtiaz Investment Company, a’ayan real estate, al Jazeera academy, al ritaj Investment Company, rizon Parters, Jersey Group, first real estate Company, first finance Company, Urban Velvet in United Kingdom, and Ghanim Bin Saad al Saad & Sons Holdings Groups.

mr. alsaad holds a m.B.a. from Kent University, United Kingdom in 1995, and a B.a. in Social Sciences from Qatar University in 1990.


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10. mr. yves barbieux (75)directorPercentage of Shareholding: 0.00%date of first appointment: 12 July 2013

mr. Yves Barbieux was joined in July 2013 as director. He currently serves as executive Chairman of elsa Consultants S.a. He also serves as the Chairman of the executive Board of micro Consulting (Switzerland) and Voluntis S.a. He also serves as a member of the executive Board of Claranor (france) and lucibel (france). He held various management functions with Nestlé and served as Chairman and Chief executive officer of Nestlé in several countries including, Venezuela, Belgium, thailand, france and Italy.

mr. Barbieux holds a m.B.a. from Harvard Business School in 1973, a m.B.a. from Institut d’administration des entreprises de ParIS in 1967 and a Civil engineer from ecole Centrale de Paris in 1961.

11. mr. cherdpong Siriwit (67)member of audit committee/Independent directorPercentage of Shareholding: 0.00%date of first appointment: 30 January 2013

mr. Cherdpong Siriwit was appointed as director since January 2013. He is a veteran of thailand’s energy sector, previously holding roles as Director-General of the ministry of Industry’s Department of mineral resources as well as Permanent Secretary of the ministry of energy. In the private sector, he served as Chairman of a number of publicly listed companies, including Ptt Plc. and currently serves as Independent Director and Chairman of both the audit and Corporate Governance Committees of IrPC Plc.

mr. Siriwit holds a m.a. in economics from Georgetown University, USa, and a B.Sc. in economics (Hons) from thammasat University. mr. Siriwit completed the role of Chairman Program (rCP 10/2004), Director accreditation Program (DaP 8/2004), and the finance for Non-finance Director (fND 13/2004) in 2004, the Directors Certification Program (DCP 104/2008) in 2008, and the audit Committee Program (aCP 27/2009) in 2009 by the thai Institute of Directors association (IoD).

ExEcUTIvE OFFIcERS

1. mr. chalermchai mahagitsiri (35)executive Vice Chairman(was appointed as President & Chief executive officer effective on 1 January 2014)

2. m.l. chandchutha chandratat (47) President & Chief executive officer(resigned, effective on 31 December 2013)

3. mr. david lawrence ames (48)executive Vice President, transport(resigned, effective on 29 october 2013)

4. mr. krailuck asawachatroj (40)executive Vice President, Corporate finance and accounting(effective on 1 January 2014)

5. mr. Somporn chitphentom (52)executive Vice President, Corporate Strategy

6. mr. vichai chuensuksawadi (56) executive Vice President, Infrastructure(resigned, effective on 31 December 2013)

7. mr. Prithayuth Nivasabutr (55) executive Vice President, Corporate Business Services(resigned, effective on 31 December 2013)

8. ms. Urai Pluemsomran (59)executive Vice President, Corporate risk, and Compliance / executive Vice President, Corporate Human resources

9. mrs. Thitima Rungkwansiriroj (52) executive Vice President, Corporate finance and accounting(resigned, effective on 31 December 2013)


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bUSINESS REvIEW aNd OUTlOOk

2013 cORPORaTE STRUcTUREthoresen thai agencies Public Company limited (“tta” or the “Company”) invests in and operates various businesses in the transport, energy, and infrastructure sectors.

tta has four core business units - thoresen Shipping Singapore Pte. ltd. (“thoresen Shipping” or “tSS”) (transport Group), mermaid maritime Public Company limited (“mermaid”) (energy Group), Baconco Co., ltd. (“Baconco”) (Infrastructure Group), and Unique mining Services Public Company limited (“UmS”) (Infrastructure Group). a summary of the various businesses follows:

Top-

tier

group Transport group Energy group Infrastructure

Dry bulk shipping services Subsea engineering and offshore drilling services

Coal logistics and distribution in thailand

fertiliser production & sales and warehouses services in Vietnam

Seco

nd-t

ier oil and gas tanker services

in the Philippines

Ship brokerage services

Shipping agency services

Coal investments Deep-sea port in South Vietnam

third-party logistics services

Stevedoring and ship supplies

Transport grouptta and its subsidiaries have provided shipping related services since 1904 and dry bulk shipping services since 1985. the dry bulk business is operated through 100%-owned subsidiary, thoresen Shipping. In 2010, tta also invested in Petrolift, Inc., an oil and gas tanker services business in the Philippines (40% owned by tta). the transport Group also includes several ship brokerage and ship agency businesses across the region.

Energy groupthe energy Group has provided subsea services since 1995 and offshore drilling services since 2006 through mermaid (57.14% owned by tta). In 2009, tta made a relatively small indirect investment in merton Group (Cyprus) ltd. (“mGC”) (26.15% owned by tta), which owns 37.5% of a coal mining project in the Philippines, and in 2011 invested in Qing mei Pte. ltd. (“Qm”) (33.33% owned by tta), which owns 70% of a coal mining project in Indonesia.


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Infrastructure groupthe Infrastructure Group has a coal logistics company, UmS (88.68% owned by tta) and a fertiliser production and distribution and warehouse company, Baconco Co., ltd. (100% owned by tta), which is located next to a deep-sea port called Baria Joint Stock Company of Services for Import export of agro-forestry Commodities and fertilizers (“Baria Serece”), in which tta also owns 20%. the Group has also invested in relatively small warehouse and logistics companies in thailand and Vietnam.

wholly-owned subsidiaries Soleado Holdings Pte. ltd. and athene Holdings ltd. have been used to own tta’s overseas and local investments, respectively.

competitive strengths of the grouptta’s operating performance ultimately depends on its ability to prudently and efficiently manage its investments and businesses through different industry cycles, using a conservative financial approach. thoresen Shipping and mermaid are by far tta’s two largest businesses and operate in historically different cycles.

tta has made some diversified investments in recent years to soften the impact of down cycles in its two largest businesses, but they have not yet reached sufficient scale. the Company’s ability to grow these diversified investments to sufficient scale while sensibly managing the Company’s largest businesses hinges on the following competitive strengths:

Strong knowledge of key commodities flows and trades: with well-established global dry bulk, coal, offshore oil and gas, and fertiliser businesses, tta’s business network affords it a unique vantage point from which it can act upon key trends in the global commodities trade.

versatile and high quality owned fleet and services: the Group owns most of its assets, enabling it to provide a full range of customised services to its clients. from this, it can maintain better control of its operating costs and provide competitive market pricing, resulting in strong brand recognition and long-term client relationships. Commercial, technical, and financial risk management are done in-house for all core business units, and industry standards dictate that all marine assets are maintained in a suitable condition that is accepted by leading classification societies.

global business network: thoresen Shipping’s newest commercial office in Copenhagen facilitates greater access to North atlantic charters with a US office expected to further boost access to higher yielding dry bulk trading routes. mermaid has expanded beyond its traditional Southest asian markets into the middle east and enjoys relationships with many of the world’s largest oil and gas companies.

Strong financial position: although 2013 was a difficult year in bottom line terms, the Group managed positive normalised earnings before interest, taxes, depreciation, and amortisation (“eBItDa”) of Baht 1,797 million. as of 30 September 2013, tta’s consolidated cash and cash equivalents balance stood at Baht 7,458 million and its debt to equity ratio was 0.56:1.

Financial flexibility following successful fund raising: over the last year, tta successfully raised Baht 3,964 million to fund its business expansion plans through a rights offering. a majority of these proceeds were invested in mermaid, which successfully raised SGD 175.78 million through a right issue and private placement.


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traNSPortBUSINeSS reVIew aND oUtlooK

TRANSPORT GROUPThe Transport Group’s two key businesses are Thoresen Shipping and Petrolift. During the 2013 fiscal year, Thoresen Shipping operated an average fleet of 18 owned vessel equivalents and 13 chartered-in vessels, providing tramp services on a global basis. The vessels operate at the requirements of Thoresen Shipping’s clients under time charters and contracts of affreightment (“COA”) in addition to short-term time charters and voyage charters.

TTA holds a 40% interest in Petrolift, which owns and operates 10 petroleum tankers/barges, including two liquefied petroleum gas tankers with a total capacity of 41 million litres that are primarily used for domestic transport against long-term contracts with major oil and gas companies.

Other businesses in the Transport Group are shipping related services businesses, including ship agency services in Thailand, Vietnam, and the United Arab Emirates and ship brokerage services for dry cargoes in Thailand, Singapore, and India.

Thoresen ShippingIndustry Overview

Dry bulk operators carry “major” bulk cargoes, including coal, iron ore, and grains, and “minor” commodities, such as fertiliser, wood products, cement, and metal ores. Dry bulk shipping is segmented by capacity or deadweight tonnes (“dwt”), and classes include VLOC, Capesize, Panamax, Supramax, Handymax, and Handysize.

Size Category Deadweight Tonnes

VLOC 200,000+

Capesize 100,000 – 200,000

Panamax 60,000 – 100,000

Supramax 50,000 – 60,000

Handymax 40,000 – 50,000

Handysize 10,000 – 40,000

Generally speaking, global trade of commodities drives the performance of the dry bulk shipping industry. In particular, freight rates are affected by trade demand and available supply of vessels in different regions.

According to Fearnleys, despite a continued fragile global economy, the total dry bulk trade is now growing at a steady pace with coal and iron ore as the leading commodities. Iron ore imports have and will continue to grow considerably faster than steel production as a larger share of China’s iron ore consumption will be imported. This is mainly due to the poor quality of Chinese domestic iron ore and high production costs facing many Chinese iron ore producers.

Chart : Chinese Iron Ore Imports

Source: Fearnleys

Low freight rates for much of 2013 came as a result of high deliveries of new vessels. During the first 10 months of 2013, total deliveries reached more than 52 million dwt. Deliveries of new vessels into the market have for quite some time outpaced demand growth, but this situation is expected to slow down over the next two years. Scrapping has continued at a strong pace, and is expected to continue at a high level as long as freight rates remain low.

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In 2012, a record 96 million dwt started trading, while in 2013, deliveries slowed down to approximately 60 million dwt. Next year, deliveries are expected to come down further. the supply of dry cargo vessels increased by approximately 6% in 2013.

the relationship between the total order book and the existing fleet is a guide to future levels of supply. as of November 2013, the global dry bulk order book amounted to 114.6 million dwt, or 16% of the existing dry bulk fleet. Supply growth is expected to be slowest in the Supramax and Handymax sectors, the two classes of vessels operated by thoresen Shipping.

dry bulk carrier Orderbook

Size category deadweight Tonnes Number of vesselsTotal capacity

(million dwt)% of Existing

Fleet (dwt)

VloC 200,000+ 88 20.1 22.5

Capesize 100,000 – 200,000 131 22.1 10.9

Panamax 60,000 – 100,000 652 48.1 25.0

Supramax 50,000 – 60,000 131 7.3 7.0

Handymax 40,000 – 50,000 57 2.7 6.9

Handysize 10,000 – 40,000 418 14.3 16.5

Total 1,477 114.6 16

freight rates remained low in the first half of 2013. a spike in Capesize rates in the July-September quarter was followed by increases in the smaller segments. while Capesize and Panamax rates dropped down again in the october-December quarter, Supramax and Handysize rates continued to increase.

chart : One-year Time charter Rates

Source: fearnleys

vessel PricesNewbuilding Prices

Newbuilding prices remained relatively low due to depressed freight rates, high shipyard capacity, and limited new contracting since the end of 2008, but have begun to edge up in the second half of 2013. overall, 2013 was characterised by a mixture of significant uncertainty and opportunity for ship owners and investors.

chart : dry bulk carrier Newbuilding Prices

Source: fearnleys

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Supramax Panamax Capesize 150' Capesize 170'


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Similarly, second-hand values have also dropped to a low level since the end of 2008, tracking a sustained decline in freight rates. Second-hand values hit the bottom of the industry cycle in 2012 and began to recover in 2013, with five-year old Supramax vessels available for approximately USD 22 million.

Chart : Dry Bulk Carrier Second-hand Prices

Source: Fearnleys

Business Review

Thoresen Shipping operated on a cash positive basis throughout the year despite the lowest freight rates since 1999. Going forward, TTA remains committed to Thoresen Shipping’s growth and its plans to acquire up to six vessels at reasonable prices over the next

12-18 months as part of a continuing fleet growth initiative. As of 30 September 2013, Thoresen Shipping owned 18 Handymax and Supramax dry bulk vessels, all flagged in Singapore. The average age of the fleet was 10.1 years with an average dwt of 48,902. Approximately 50% of Thoresen Shipping’s vessels are positioned in higher-yielding Atlantic routes, while the remaining 50% trade in the Asia Pacific region.

The focus of Thoresen Shipping today is on proven designs that allow it to operate a consistent fleet with maximum efficiency. In particular, Supramax vessels have been and will continue to be the focus point of Thoresen Shipping’s fleet renewal plan.

While the index that tracks Supramax dry bulk shipping rates (“BSI”) fell 22% in 2013 to an average of USD 8,700 per day, Thoresen Shipping’s time charter equivalent fell by only 18% to an average of USD 8,400 per day, implying a 7% premium over the BSI after adjusting for revenue generating capacity of the fleet. This overperformance came as a result of a strategic approach targeting niche commodities and selected geographies as well as stronger customer relationships and an expanded client base at Thoresen Shipping’s commercial hub in Singapore. On a full year basis, Thoresen Shipping’s owner expenses averaged about USD 4,087 per day against an industry average of approximately USD 4,500 - 4,600 per day, placing Thoresen Shipping at a significant cost advantage.

Thoresen Fleet Structure

1) Number of Vessels

Number of Vessels

Size Category Owned Vessels Chartered-in VesselsNewbuild Vessels

on Order Total

Handymax 8 3 - 11

Supramax 10 10 - 20

TOTAL 18 13 - 31

2) Dwt-ed average age

Dwt-Weighted Average Age of Vessels

Size Category Owned Vessels Chartered-in VesselsNewbuild Vessels

on Order TotalHandymax 16.23 13.71 - 14.91Supramax 6.20 4.58 - 4.82TOTAL 10.12 5.56 - 6.48

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3) bulk carriers

bUlk caRRIERS

vessel NameOriginal

delivery date dwt age design classification

1 thor Dynamic 30/04/1991 43,497 22.44 Standard Bulk > 40,000 dwt BV

2 thor wave 30/07/1998 39,042 15.18 open Hatch / Box Shape < 40,000 dwt aBS

3 thor wind 18/11/1998 39,087 14.88 open Hatch / Box Shape Bulk (Box) aBS

4 thor energy 16/11/1994 42,529 18.88 open Hatch / Box Shape Bulk (Box) NKK

5 thor endeavour 11/04/1995 42,529 18.48 open Hatch / Box Shape Bulk (Box) NKK

6 thor enterprise 28/07/1995 42,529 18.19 open Hatch / Box Shape Bulk (Box) DNV

7 thor Harmony 21/03/2002 47,111 11.54 open Hatch / Box Shape Bulk (Box) DNV

8 thor Horizon 01/10/2002 47,111 11.01 open Hatch / Box Shape Bulk (Box) BV

9 thor achiever 22/07/2010 57,015 3.73 Standard Bulk > 40,000 dwt BV

10 thor Integrity 02/04/2001 52,375 12.50 Standard Bulk > 40,000 dwt BV

11 thor Independence 20/12/2010 52,407 11.94 Standard tess - 52 NKK

12 thor Infinity 21/12/2010 52,383 11.66 Standard tess - 52 NKK

13 thor Insuvi 02/07/2012 52,489 7.88 Standard tess - 52 NKK

14 thor friendship 13/01/2010 54,123 3.72 Semi-open /Box Shape oshima - 53 NKK

15 thor fortune 15/06/2011 54,123 2.30 Semi-open /Box Shape oshima - 53 NKK

16 thor fearless 06/06/2013 54,881 7.90 open Hatch / Box Shape oshima - 53 NKK

17 thor Brave 15/11/2012 53,506 0.87 open Hatch / Box Shape Vinashin DNV

18 thor Breeze 20/08/2013 53,506 0.11 open Hatch / Box Shape Vinashin DNV

Total Thoresen Fleet : 880,243 dWT

aBS : american Bureau of ShippingBV : Bureau VeritasDNV : Det Norske VeritasNKK : Nippon Kaiji Kyokai Source : tta

Fleet Services

thoresen Shipping’s tramp services derive revenues from:

Voyage, or spot charters, which are charters based on the current market rate;

time charters, whereby vessels are chartered to clients for a fixed period of time at rates that are generally fixed, but may contain a variable component, such as an inflation adjustment or a current market rate component; and

Coa’s, which are forward delivery contracts agreeing to the quantity of cargo to be carried for a client over a specified trade route within a fixed period of time.

Tramp - Time Charter

Tramp - Voyage Charter

72%

28%

throughout 2013, thoresen Shipping’s bulk carrier vessels were deployed in trades which service the needs of clients in a blend of Coa’s, time and spot charters both in the atlantic and Pacific oceans.

chart : Fleet Employment by vessel days

Source : tta


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39

clients

the focus for thoresen Shipping remained on core premium cargos with industrial majors. over the last year, thoresen Shipping has also increasingly taken advantage of spot-chartering opportunities for key clients with emergency requirements for ships in key markets where they clients have cargo but not assets.

chart : Fy 2013 cargoes

Source: tta

chart : Freight Revenues (by client Size)

Agricultural Products

Minerals/Concentrates

Iron Ore

Coal

Steel Products

Cement

General Cargoes/Others

Fertiliser

14.96%

45.25%

1.48%

9.53%

13.36%

6.77% 3.73%

4.93%

16%

30%

25%

29%

10 Largest Customers

< U$ 1,000,000

U$ 0.5-1,000,000

< U$ 500,000

Source: tta

thoresen Shipping has made strong progress towards developing relationships with industrial majors by establishing a strong rightShip ranking. this acts as an index to measure the key criteria for large industrial clients, such as BHP Billiton, rio tinto Shipping, and Cargill ocean transportation.

Employees

as of 30 September 2013, thoresen Shipping employed 76 people in Denmark, Singapore, and Bangkok. In addition, 656 seafarers were employed during the year. thoresen Shipping boasts highly skilled former mariners, managing both the technical and commercial operations within the office in Bangkok. In Singapore, thoresen Shipping’s commercial team is experienced and knowledgeable and has under its belt deep industry relationships.

competitive landscape

the dry bulk industry is highly competitive and fragmented, with ownership of general cargo and dry bulk vessels from 15,000 to 59,999 dwt divided amongst approximately 1,591 independent owners with 5,464 vessels.

chart : vessel Owners

Source: tta

Dry bulk also remains highly commoditised, with rates set by the availability of supply. according to industry analysts and executives, slowing new ship orders and strengthening demand from China may spur a market recovery in 2014, leading to the potential for new or returning market entrants.

headwind and Tailwind Factors

marsoft expects global dry bulk shipping tonne-mile demand to grow by 7% in 2014, with steel‐related trades contributing a large part of the growth. merrill lynch also sets its growth rate target to 7%, noting that this will be underpinned by an expected 12% increase in seaborne iron ore trade.

In terms of supply, rS Platou states that a drop in deliveries to 40-45 million dwt is expected in 2014, which will result in a net fleet expansion of just 4%.

1-4 vessels

5-9 vessels

10-14 vessels

15-19 vessels

> 20 vessels

33%

20% 10%

9%

28%


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40

Inter-island Petroleum and gas Tankeringtta invested USD 28.8 million for 40% of Petrolift, the market leader for double-hulled tankers in the Philippine domestic tanker industry. the domestic tanker business is an integral part of the Philippine petroleum transportation infrastructure, given the geographical landscape and limited petroleum pipeline feeding the country’s thousands of islands. Domestic demand for petroleum products remains steady, giving Petrolift stable and predictable cash flows through strong customer relationships and regular charters. the steady performance of this business unit helps to cushion the transport Group from some of the impacts of cyclicality in the dry bulk sector.

the fleet of 10 vessels trades primarily within Philippine coastal waters and has a total capacity of approximately 41 million litres for transporting fuel products, such as refined petroleum, ethanol, and lPG. Petrolift is an accredited contractor of tankering services for oil majors in the Philippines, and the majority of its existing fleet capacity is contracted under medium to long-term charters with these companies.

Ship agencytta owns three ship agency companies.

first, thoresen Shipping and logistics ltd. (“tSl”) is the largest ship agency in thailand, handling almost 1,200 calls in 2013. the Naxco Group, which is a french-based ship agency and logistics group, owns 51% of tSl, while tta owns 49%. Driven by the strong growth over the last couple of years, the company has expanded within the region with new office openings in myanmar, Indonesia, and Vietnam. the expansion is derived from new revenue streams that include freight forwarding, project cargoes, chartering, and brokerage.

Second, Gulf agency Company (thailand) ltd. (“GaC”) is a medium-sized ship agency company in thailand. the company’s vessel calls increased to nearly 460 in 2013. GaC is an associate company of tta, of which tta and Gulf agency Company limited, liechtenstein, own 51.0% and 49.0%, respectively.

third, thoresen (Indochina) S.a. (“thoresen Indochina” or “It”) is a joint venture company in which tta owns 50% and the remaining 50% is owned by private investors. thoresen Indochina handled more than 400 calls in 2013 and specialises in project cargo handling. By working closely with two sister companies (Baconco and thoresen-Vinama agencies Co., ltd. (“thoresen-Vinama agencies” or “tVa”), thoresen Indochina has been increasing its warehouse and logistics services in the Phu my district of South Vietnam.

these three companies provide traditional ship agency services: port clearance, berthing, loading and discharging, cargo booking, supplying fuel water, stores, vessel repairs, and crew changes. In addition, GaC specialises in a comprehensive range of supply chain and logistics solutions, which include air and sea freight, warehousing and distribution, door-to-door transportation, project logistics, international moving, and courier services.

Ship brokeragefearnleys (thailand) ltd. (“ftl”) is an associate company, of which tta and fearnleys a/S (“fearnleys”) of Norway own 49.00% and 49.00%, respectively. fearnleys is one of the largest ship broking companies in the world with activities in dry cargo, sale and purchase, tanker, gas, offshore, and consultancy. ftl also has a 99.99% owned subsidiary, fearnleys Shipbroking Private limited, which provides dry cargo broking services in India, and a 100% owned subsidiary, fearnleys Dry Cargo (Singapore) Pte. ltd., which provides dry cargo broking services in Singapore. ftl engages in a competitive ship broking business with different owners and cargo charterers in Southeast asia, as well as worldwide.

middle East Operationsthoresen Shipping fZe (“tSf”), a wholly owned subsidiary of tta, was established to act as thoresen Shipping’s regional office in the middle east and now acts as shipping agent for various carriers. tSf attends to vessels in the Uae and coordinates the operation of a similar number of vessels in other arabian Gulf ports. tSf has developed a special expertise in customs and cargo clearance and has executed over 1,000 cargo delivered to clients in the Uae, oman, and other nearby destinations.


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eNerGYBUSINeSS reVIew aND oUtlooK

ENERgy gROUPthe energy Group’s key business is offshore oil and gas services provided by 57.14% owned mermaid maritime Public Company limited (“mermaid”). Specifically, mermaid provides subsea engineering and offshore drilling services to major oil and gas companies or their contractors, primarily in the asia-Pacific and middle east regions. mermaid’s businesses tend to be cyclical in nature, with higher oil and gas prices generally driving greater exploration and production spending and in turn, demand for offshore oil and gas services.

a brief on mermaidmermaid commenced its operations in 1983 and was partially acquired by tta in 1995. mermaid was successfully listed on the Singapore Stock exchange (“SGX”), raising SGD 246 million from its initial public offering of shares. Subsequently, mermaid has completed two rights share offerings in 2009 and 2013, raising another SGD 332 million.

Type 2007USd

2008USd

2009USd

2010USd

2011USd

2012USd

2013USd

Trending

offshore Construction Vessels 65-70,000 65-70,000 50-55,000 50-55,000 55-95,000* 55-110,000* 55-100,000* →light Construction vessels 45-55,000 45-55,000 45-55,000 40-50,000 50-60,000 50-60,000 50-55,000 →Construction support vessel 35-45,000 35-45,000 40-45,000 40-50,000 40-55,000 45-55,000 40-50,000 →Comment:rates are based on a mix of public made information/contract awards, rates received in confidence and a general feeling of the market. the index is based on long term t/C contracts, i.e. 3 to 5 years, direct from vessel owner to 1st tier charterer. rates do not include roV’s or special top-side equipment.

*a new breed of larger oCVs (150 m loa+) entered the market in 2010 and as such we see a larger span between the low and high end of this vessel segment.

Subsea Engineering ServicesIndustry overview

Subsea work in the oil and gas industry has gradually become more important for the development and ongoing production of offshore fields. Some of the key value drivers for the subsea market going forward are dependent on the current robust oil and gas prices, which are driving spending on development of new facilities in mid to deep water, expansion of existing installations, and increased maintenance activity on ageing offshore oil and gas fields.

Types of Subsea vessels

the offshore subsea vessel market encompasses different vessels utilised in the installation, inspection, and maintenance of subsea assets. In broad terms, the subsea vessel market can be divided into dive support vessels (“DSV”), offshore construction vessels (“oCV”), construction support vessels, and remote operated vehicle support vessels (“roVSV”).

The Subsea market

2013 was a busy year, with strong tendering activity for new subsea contracts. the markets with the most momentum were the North Sea, Brazil, South east asia, and the Gulf of mexico. Vessel rates remained fairly stable compared to 2012.


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44

fearnleys offshore Supply points at four different development trends mainly affecting the demand for subsea vessels. first, the recent year’s large discoveries represent a pleasant “subsea market back-log”. Second, in addition to the already discovered reserves, it is likely that the extensive drilling boom will lead to more discoveries and increase the back-log further. third, new technologies enable producing fields to look for life extension and further development. fourth, a substantial part of all new subsea development is expected to be installed in deep water of 1,500 feet or more, which implies longer subsea campaigns and increased pressure on the current fleet. africa and Brazil are taking the largest share of the deepwater development, but the growth in deepwater development is on the rise in areas like the Gulf of mexico and Southeast.

Brent crude dropped just below USD 100 per barrel in april, but has remained between USD 100 and USD 120 through most of 2013; in other words, above the hurdle rates that oil and gas companies set for both their committed and uncommitted development projects. the uncertainty about the global economy has not slowed down the oil companies’ activities.

the chart below shows the historical development of Brent oil prices.

chart : historical Oil Price

brent blend ($/bbl) Price

Source: fearnleys Securities

business Review

Subsea engineering services are provided through mermaid offshore Services ltd. (“moS”), Zamil mermaid offshore Services Company llC (“Zamil mermaid”), Subtech limited, Subtech Qatar Diving & marine Services llC (“Subtech”), Seascape Surveys Pte. ltd., Seascape Surveys ltd., and Pt Seascape Surveys Indonesia (collectively, the “Subsea Division”). the Subsea Division’s core strengths comprise air and saturation diving from mermaid’s owned fleet and an array of chartered-in vessels and remote intervention by roV‘s. a wide range of subsea engineering services are provided, including inspection, repair and maintenance, light construction and installation support, commissioning projects, and cable lay interventions and installations.

on 16 September 2013, mermaid’s 31-year-old offshore support vessel, m.V. mermaid Performer, was sold. as of 30 September 2013, the subsea fleet consisted of 8 subsea support vessels (including chartered in vessels), 3 of which are specialised dive support vessels, and supported by 5 saturation diving systems, 12 air diving systems and 17 roV systems, including deepwater and ultra-deepwater systems. apart from its key assets, the Subsea Division sub-contracts a large number of specialist and marine personnel to work on its subsea engineering projects in addition to a permanent workforce.

In early financial year 2013, mermaid announced a landmark diving services contract which it is carrying out through its middle east joint venture, Zamil mermaid. revenues from this contract have already begun to buoy mermaid’s revenues and returns, and will continue to do so into the 2014 financial year and beyond. In august 2013, Subtech was awarded a subsea contract with Bibby offshore limited for services in the North Sea. In September 2013, Seascape, was awarded a two-year contract to provide offshore inspection, repair, and maintenance (“Irm”) services to a major Indonesia-based upstream oil and gas operator. the middle east, Southeast asia, and the North Sea are expected to pace regional growth for the Subsea Division over the next few years.

140

160

120

80

(USD/bbl)

100

60

40

20

0 01/04/05 01/04/06 01/04/07 01/04/08 01/04/09 01/04/10 01/04/11 01/04/12 01/04/13

160


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45

Fleet and diving Servicesall vessels are classified by DNV or aBS, which are two of the leading classification societies. all vessels are subject to regular inspection by class surveyors, in addition to regular dry-docking and other planned maintenance.

another core competency for the Subsea Division is running its diving operations to world class standards, especially those set by the International oil and Gas Producers association (“oGP”). a number of new bids, including the one that mermaid recently won from Saudi aramco, include oGP certification as a main precondition.

the following details the Subsea Division’s core services:

Exploration services Pre-installation surveys; rig positioning and installation assistance, subsea equipment maintenance

development services Installation of subsea pipelines, flow lines, control umbilicals, manifolds, risers, pipe lay and burial, installation and tie-in of riser and manifold assembly; commissioning, testing, and inspection; and cable and umbilical lay and connection

Production Services Inspection, maintenance, and repair of production structure, risers, pipelines, and subsea equipment

mermaid Subsea Fleet list

No. Name of vessels vessel Type calendar year

build year Purchase year1. mermaid Commander DP2 Dive Support Vessel 1987 20052. mermaid endurer DP2 Dive Support Vessel 2010 20103. mermaid asiana DP2 Dive Support Vessel 2010 20104. mermaid Siam DP2 Construction Barge 2002 20105. mermaid Sapphire DP2 roV Support Vessel 2009 20096. mermaid Challenger General Utility Vessel 2008 20087. Barakuda General Utility Vessel 1982 20108. endeavour (Charter) DP2 roV Support Vessel 2008 2012 (Charter)

clients

Clients include major and independent oil and gas producers and suppliers, pipeline transmission companies, and offshore engineering and construction firms.

Employees

the Subsea Division relies on the high quality of its specialised workforce. as of 30 September 2013, the Subsea Division had around 1,000 permanent and contract personnel spread across thailand, Qatar, Saudi arabia, and Indonesia.

competition

the marine contracting industry is highly competitive. while price is a factor, the ability to acquire specialised vessels, attract and retain skilled personnel, and demonstrate a proven safety record is also important. the Subsea Division’s competitors include a number

of local firms based in asia and the middle east as well as larger international companies based in europe and the US, most of which are major engineering, Procurement, Installation, and Commissioning (“ePIC”) contractors.


the subsea order book has seen consistent growth in the last 12 months. there are now almost 30 subsea vessels under construction with planned deliveries in 2015-2016. Construction vessels are still popular, but large pipelay vessels have also been booked for delivery in the next few years.

according to a recent survey of 23 oil and gas companies, Pareto predicts an 8% increase in global exploration and production (“e&P”) spending in 2014 and a 10% spending increase for offshore oil and gas activities.


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46

chart : Subsea capex Forecast

North America

North Sea

South America

Africa/Mediterranean

Asia Pacific/Middle East 16%

2013e 2018e

26%

15%

27%

16%

17%

31%

17%

19%

16%

Source: Quest

Forecasted Regional market Share

Source: Quest

as can be seen in the chart above, Quest expects to see growth in all offshore regions. according to Quest offshore, 17% of the world’s annual subsea investment will be poured into the Southeast asian market by 2018.

Offshore drilling ServicesIndustry Overview

Demand for drilling and related services is influenced by a number of factors, especially current and expected oil and gas prices, which drive exploration and production activities. the different types of drilling units employed depends on the water depths in which to drill, the stage of drilling (exploration/ development/production), and the technical complexity of the well. the drilling units described below operate in different water depths, and can vary significantly in their technical specifications and capabilities.

mermaid focuses on the shallow water tender and jack-up rig market.

Tender rigs Barge moored alongside a platform and contains crew quarters, mud tanks, mud pumps, and power generation systems

Semi tender rigs Semi-submersible tender rigJack-up rigs mobile self-elevating drilling

platform equipped with legs that can be lowered down to the ocean floor

Semisubmersible rigs

floating drilling platforms with columns and pontoons featuring a ballasting system

drillships Self-propelled, utilising dynamic positioning systems (DP) to maintain their position above the wellhead

Tender and Semi Tender Rig market

the majority of tender rigs operate in Southeast asia on contracts ranging between one to three years. the market for tender rigs is niche and generally experiences the same cycles as the market for other mobile offshore drilling units (“moDU”), jack-up rigs in particular.

South east asia is the biggest market for tender rigs, followed by west africa. the level of activity for tender rigs in South east asia has remained relatively high. total active supply comprise 33 units, of which 26 are currently on contract (17 operating in South east asia), while three are cold stacked and six are idle/warm stacked. In addition, a total of nine tender rigs are under construction.

the total active supply of semi-tenders is 10 units, of which one is cold stacked, and nine currently working and three under construction.

business Review

mermaid Drilling ltd. (“mDl”), a 95%-owned subsidiary of mermaid, owns two tender drilling rigs and provides drilling and accommodation barge related-services in Southeast asia. mtr-1 has been downgraded to an accommodation work barge and continues to seek a new assignment following the expiry of an accommodation barge contract in July 2013. mtr-2 underwent its special periodic survey between November 2012 and april 2013 and came back on-hire in the end of may 2013.

2012

2013

e

2014

e

2015

e

2016

e20

17e

2018

e

2004

2005

2006

2007

2008

2009

2010

2011

0

5,000

10,0000

15,0000

20,0000(USD) Total Worldwide Subsea Capex


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47

asia offshore Drilling ltd. (“aoD”), mermaid’s 33.76%‐

owned associate company, owns and operates a modern fleet of high specification jack-up rigs. the company commenced operations in 2013, with aoD I, aoD II, and aoD III being deployed for service on 1

may, 13 July, and 10 october, respectively. all three rigs have been contracted to Saudi aramco for terms that include a potential value of USD 197 million over a three year period plus a USD 39.5 million mobilisation fee for each rig.

drilling Rig Fleet list

No. Name of Rigs Rig Type calendar year

build year Purchase year1. mtr-1 accommodation Barge 1978 20052. mtr-2 tender assist Drilling rig 1981 20053. aoD-1* Premium Jack-Up rig 2013 20104. aoD-2* Premium Jack-Up rig 2013 20105. aoD-3* Premium Jack-Up rig 2013 2011

remarks: * through mermaid’s associate company, asia offshore Drilling ltd. (“aoD”) in which mermaid has a 33.76% equity interest.

Both jack-up and tender drilling rigs require classification from a recognised classification society, which classify them based on structural integrity and safety. mtr-1 is classified by the american Bureau of Shipping (“aBS”), and mtr-2 is classified by Bureau Veritas (“BV”). Classification authorities inspect the tender drilling rigs annually. tender drilling rigs are dry docked every five years and subject to a special periodic survey by these classification societies. aoD’s jack-up rigs are subject to classification by aBS.

Fleet Services

mDl’s contracts to provide offshore drilling services are individually negotiated and vary in their terms and provisions. mDl obtains most of its contracts through competitive bidding against other contractors. Drilling contracts generally provide for payment on a day rate basis, with higher rates while the drilling unit is operating. rates tend to be lower during periods of mobilisation or when drilling operations are interrupted or restricted by equipment breakdowns or other conditions often beyond mDl’s control.

a day rate drilling contract generally extends over a period of time covering either a stated term or the drilling of a single well or group of wells. Some of mDl’s contracts with clients may be cancellable at the option of the client upon payment of an early termination payment. Such payments may not, however, fully compensate mDl for the loss of the contract.

aoD’s three jack-up rigs are from the mod V – B Class design, which is understood to be the preferred jack-up rig design by major drilling companies and used by oil companies in all shallow water areas of the world. In today’s environment, jack-up rigs are typically contracted for durations of 300 days or longer, a trend that is expected to increase as demand soars while near term supply fades.

clients

mDl engages in offshore drilling for leading international oil companies, including those that are government-controlled and independent. all three of aoD’s jack-up rigs have been contracted to Saudi aramco, the world’s largest oil and gas company.

Employees

mDl requires highly skilled personnel to operate its drilling rigs. as a result, mDl conducts extensive personnel recruiting, training and safety programmes. as of 30 September 2013, mDl had 42 staff and personnel.

competition

mDl’s primary competitors include global or regional offshore drilling companies, including malaysian offshore services company Sapura Kencana.


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48


there are over 604 fixed platform sites in Southeast asia, many of which prefer tender rigs since the seabed around these platforms is often perforated by jack-up footprints. as a result of limited supply, particularly of newer rigs, day rates and contract duration are all pegged to increase. more new-build orders are expected to surface due to favourable economics – an area mDl will explore closely this year.

as the premium jack-up fleet is closing in on full utilisation and the majority of the most technically capable conventional jack-ups have returned to work, day rates are expected to continue to trend higher. Premium jack-up rigs are receiving premiums of USD 160,000 and above per day on average, a trend that is also expected to continue with operators favouring modern assets.

coal mining businessesGiven the critical importance of coal as a fuel source for developing asia, and tta’s existing involvement in coal transport, the Company invested in two early stage/start-up coal projects: one in the Philippines and another in Indonesia.

Philippines mine

tta holds a minority interest of 26.15% in merton Group (Cyprus) ltd. (“merton”), which was founded to pursue early stage/start-up coal projects. merton’s joint venture with SKI Group, SKI energy resources Inc. (“SerI”) controls over 17,500 hectares of coal concessions in Cebu, Philippines.

Given that SerI’s two shareholders are unable to properly finance its operations, SerI is producing very limited coal and is now undergoing a restructuring process.

Indonesian mine

tta established Qing mei Pte. ltd. (“Qing mei”) in 2011 through a strategic partnership with merton and Britmar (asia) Pte. ltd. to develop a green field coal-mining project in Indonesia.

exploration at Qing mei’s concessions continue to Joint ore reserves Committee (“JorC”) standards, with a full-scale drilling programme completed on one of the concession’s four blocks and preliminary drilling done on the concession’s other three blocks. Based on the reserve estimates, Qing mei is bidding for an independent power project in Central Kalimantan. If he bid is successful, Qing mei will develop the coal mine at the same time as the power plant.


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INfraStrUCtUreBUSINeSS reVIew aND oUtlooK

INFRASTRUCTURE GROUPThe Infrastructure Group comprises a number of businesses that are ultimately engaged in logistics services. The two key businesses are 88.68% owned Unique Mining Services Public Company Limited (“UMS”) and 100% owned Baconco Co., Ltd. (“Baconco”).

Moisture Content of Coal

Low Rank Coals (47%) Hard Coal (53%)

Lignite (17%) Sub-Bituminous (30%) Bituminous (52%) Anthracite (1%)

Metallurgical Coking Coal

Thermal SteamCoal

Largely PowerGeneration

HIGHCarbon/Energy Content of Coal

Types of Coal

Power, Cement & Industrial

Power, Cement & Industrial

Iron & Steel Production

Domestic & Industrial including

smokeless fuel

HIGH

% o

f Wor

ldR

eser

ves

Use

s

Remarks: * Percentage by weight ** 1% of sulphur would produce sulphur dioxide approximately 500 ppm.

Source : World Coal Institute

Type Calorific Value (kcal/Kg.) Moisture (%)* Ash (%)* Sulphur (%)

Anthracite 6,500-8,000 5-8 5-12 0.1-1.0

Bituminous 5,000-6,500 8-15 1-12 0.1-1.5**

Sub-bituminous 4,500-5,500 24-30 1-10 0.1-1.5**

Lignite 3,000-4,000 30-38 15-20 2.0-5.0

Coal InformationGeneral Knowledge

Coal Logistics BusinessIndustry Overview

Although coal demand in Thailand has been historically lower than other Asian countries, the country’s coal demand for both industry and electricity generation is projected to increase significantly over the next 10 years, as oil prices continue to exceed USD 100 per barrel and natural gas reserves decline. As shown in the following chart, coal reserves fall into a number of classifications, each suited for a specific type of end user.


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52

0

10

20

30

40

50

60(Million in Metric Ton)

2021201720142011200820052002

Electricity TotalIndustry

chart : actual and Projected coal demand in Thailand

Source : eGat

business Review

UmS provides end-to-end and just-in-time coal logistics sales and distribution services in thailand, primarily to small and medium-sized industrial clients. It owns two coal screening facilities located in Samut Sakorn and ayudhaya, and 12 barges.

the just-in-time supply model means that UmS manages a coal supply chain with stock pile management and storage, ensuring continuous coal supply security for its customers. Customers’ lead times for ordering are up to 48 hours in advance on average and most importantly, customers are not required to manage their own stock piles and storage.

UmS’ Samut Sakorn operations were shut down due to environmental concerns over another company’s coal facilities in an adjacent area to UmS’ plant in July 2011. to resume operations, UmS has improved the plant’s facilities and waste-water treatment system to meet the government’s preconditions for its reopening. following these moves and others, UmS was allowed to resume gradual operations at its Samut Sakorn plant in June 2013, albeit without full logistics efficiency. meanwhile, it is exploring pelletisation as a long‐term solution to manage its 0‐5 mm coal and is in the process of evaluating two potential equipment suppliers to realise this objective as quickly as possible.

at the same time, UmS will continue to focus on regaining access to its Samut Sakorn port and will explore an entry into international coal trading.

clients

UmS’ core clients typically use low calorific value (sub-bituminous with heating value 4,000–4,200 kcal/kg, gross as received) coal, which it secures from no less than 10 reputable suppliers in Indonesia. UmS sells coal to several domestic industries, including pulp and paper, textile, food processing, and cement.

UmS’ coal import and production strategies have been adapted to match the engineering specifications of the boilers used by each type of industrial client it serves. the Company’s strategic objective to be the leader in domestic coal distribution for medium and small sized manufacturers remains unchanged.

competition

thailand’s coal distribution industry has approximately 20 operators. of these, approximately 15 compete directly with UmS in the small and medium sized enterprise (“Sme”) segment. UmS remains one of the market leaders in this area, but has seen its overall market share drop to approximately 25% as a result of ongoing issues at its Samut Sakorn facility.


Domestic coal demand is expected to trend upwards over the medium term as a result of the manufacturing industry converting from fuel oil to coal.

UmS has also observed an upward trend in fuel alternatives, such as palm kernel shell, which UmS started to import from Indonesia to market to domestic customers who burn bio-mass for energy.

the biggest hurdle remains UmS’ ability to regain full operations in Samut Sakorn. as of now, UmS will only be able to screen medium Calorific Value (“mCV”) coal at this facility due to government restrictions. this limits operations to approximately 10,000 tonnes per month, significantly lower than volumes that can be achieved with low Calorific Value (“lCV) coal.


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Fertiliser and Warehousing businessIndustry Overview: Fertiliser business

It is estimated that Vietnam consumes approximately 10 million tonnes of fertiliser per annum, a level that industry experts believe will remain stable for the next two to three years, with modest increases of 2-3%.

chart : vietnam Fertiliser consumption

fertiliser is mainly composed of nitrogen, phosphate and potassium: nitrogen (N) – used to produce leafy growth and formation of stems and branches; phosphate (P) – essential for seed germination and root development, needed particularly by young plants to form their root systems and by fruit and seed crops; and potassium (K) – required to promote flower and fruit production and for maintaining growth while helping plants resist diseases. Vietnam can now produce and supply nitrogen adequately for the domestic market. Phosphate is sourced both domestically and through imports, while 100% of potassium needs to be imported.

Industry Overview: vietnam Warehousing business

the industrial market in Vietnam is divided into three key economic zones, the Northern Key economic region (“NKer”), the Central Key economic region (“CKer”), and the Southern Key economic region (“SKer”), where the greatest concentration of industrial parks are found. there are 10 industrial parks in the vicinity of Ba ria and Phu my Port alone.

Vietnam’s port systems are going through significant upgrading, particularly those that are state owned but infrastructure remains a barrier for yards and warehousing systems to accommodate both containers and bulk cargos.

warehouse development and availability, as well as professional logistics management, are expected to be key factors in supporting Vietnam’s port infrastructure and industrial sector. within the SKer, warehouses in strategic locations like airports and ports can command in excess of USD 5 per square metre per month, excluding Vat and other fees.

this is in comparison to warehouses with lower standards residing outside of strategic locations, which generate as little as USD 1.5 to USD 2.5 per square metre per month.

business Review

Baconco operates a 350,000 metric tonne per annum blending and NPK fertiliser granulation/compaction production facility. In addition to the sale and distribution of its own products, Baconco is also a supplier of pesticides and seeds. as of 30 September 2013, Baconco marketed over 80 distinct formulas and provided customised formulas for its top five customers. Baconco has continuously made a push to boost exports, which grew more than 15% year-on-year to 73,000 tonnes, establishing a strong reputation for its distinctive “Stork” brand in markets such as africa, taiwan, Korea, Cambodia, and laos. over the year, Baconco continued to generate strong profits and cash flows, which are being used to invest in fully integrated logistics services in South Vietnam.

Total Fertiliser

2002 2005 2006 2007 2008 2009 2010 2011 2012 2013

1,000,000

2,000,000

3,000,000

4,000,0005,000,000

6,000,0007,000,000

8,000,0009,000,000

(Tons)

0

Total NPK

-25%

+3%


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54

RaW maTERIalSNitrogen, Phosphorus, Potassium, Sulfur, calcium, magnesium, micronutrients, Organic matter

FINIShEd PROdUcT50 NPk formulas for Rice, coffee, Tea, Rubber, Sugar cane, Fruit Trees & vegetables

bUlk blENdINg

gRaNUlaTION cOmPacTION

USP

bio Stimulant

baconco Fertiliser Production Processes

through its investments in Baconco, thoresen Indochina, and Baria Serece, tta is uniquely positioned to offer a full range of logistics solutions including sea and land transport, warehousing, bagging, forwarding, and custom clearance. Baconco and thoresen-Vinama agencies, an associate of thoresen Indochina, now have in total 53,000 square metres of warehouse space with a capacity for almost 190,000 metric tonnes following the opening of the Baconco 5 facility on february 2013.

thoresen-Vinama agencies, has established itself as Baconco’s third party logistics provider, closing the loop on near complete integration of the entire value chain. as an example, cargo from a client’s factory can be picked by thoresen-Vinama agencies’s trucks and trailers, stored in Baconco’s warehouses, loaded onto a vessel at Baria Serece deep sea port (in which tta holds a 20% stake), and handled by ship agency services also supplied by thoresen-Vinama agencies.

clients

for its fertiliser business, Baconco distributes products via a network of approximately 120 wholesalers and 4,000 retailers. Its warehouse clients are made up of its own fertiliser wholesalers, bottlers, raw material importers, importers/ exporters of bulk and bagged cargoes, and steel pipe manufacturers.

competition

Competition is significant in the Vietnam market with over 500 producers, many of them state owned. the largest, Petro Vietnam, has completed building its urea production facility in Phu my industrial park. Previous plans by Petro Vietnam to build an NPK factory in South Vietnam have been discontinued.


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Vietnamese fertiliser prices are expected to remain flat in 2014, resulting in a continued push by Baconco to boost exports into other parts of asia and africa. In terms of logistics, the demand for professional services is expected to remain strong in line with Vietnam’s economic growth and strengthened global trade ties.

Port Operations businessSoleado acquired a 20% stake in Baria Serece from Yara asia Pte. ltd. in 2010. Baria Serece owns and operates Phu my port in South Vietnam.

Phu my port is situated on the thi Vai river, approximately 17 miles from the open sea, adjacent to Phu my industrial park. the port is Vietnam’s largest dry cargo deep-water port, and is able to receive up to seven million tonnes of agricultural products, coal, and fertiliser per year.

Baria Serece has completed its 453 metre quay upgrade project and has received a license to operate domestic and international general cargo vessels of up to 12 metres and 80,000 dwt. as such, the facility is favoured among Handymax, Supramax, and Panamax operators, as no lightering is needed prior to arrival.

Ship Supplies, logistics, Ship Stevedoring and TransportationChidlom marine Services & Supplies ltd. (“CmSS”), a wholly-owned subsidiary of tta, provides ship supplies and logistics services, including supply of ship stores, cargo dunnage materials, cargo lashing and securing equipment, cargo handling equipment, tally and checker services, forklift rental/services, warehouses and storage spaces for rental, material procurement, management, and distribution in thailand. CmSS also provides ship stevedoring and transportation services, including cargo loading and unloading, cargo handling, and transportation.

Third Party logistics ServicesGaC thoresen logistics ltd. (“Gtl”) was established to serve the thai domestic logistics market. tta owns 51% of Gtl, with the remaining 29.00% and 20% owned by Gul f agency Company limited, liechtenstein (for purposes of compliance with warehouse regulations) and mr. lars Safverstrom, executive Chairman of Gulf agency Company, (thailand) ltd. (“GaC”), respectively. the company owns a 10,000 square metre warehouse facility at amata Nakorn Industrial estate and leases a 6,000 square metre warehouse facility at Bang Pa in Industrial Zone.

Gtl is a third party logistics (“3Pl”) service provider that engages in warehousing, warehouse management, and domestic distribution for both local and multinational clients. the company operates in a niche environment and has secured mid to long-term contracts with a select number of clients.


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tta and its subsidiaries (“the Group”) are determined to uphold their status as corporate citizens in all aspects of their activities. we operate our business ethically and with good corporate governance in accordance with the interests of society and as an environment for sustainable development. we have defined standards for transparency and there are procedures for tracking, evaluating and improving what we do.

we seek to achieve our corporate and social responsibility objectives by focusing on four strategic areas:

cORPORaTE gOvERNaNcE

Committing to corporate values and codes of business conduct and adhering to transparency and accountability practices.

hUmaN RIghTS aNd EmPlOyEE WEll-bEINg

addressing the needs and aspirations of staff through equal opportunity and access, employee diversity, work-life balance, work safety and, labour standards.

SOcIal cONTRIbUTIONS

encouraging and assisting staff to involve themselves in team/individual projects in support of the wider community with focus on donations, volunteering and education.

ENvIRONmENT

further developing environmental protection management practices that minimise waste and maximise efficiencies (such as local and global environmental quality, cleaner production process, eCo efficiency and environmental technology.

2013 Responsibility activities1. cORPORaTE gOvERNaNcE

tta has set up a corporate governance policy, under which we have clearly stated policies on rights of shareholders and their equity treatment, and

cORPORaTE SOcIal RESPONSIbIlITy POlIcy

on disclosure and transparency. tta runs its businesses responsibly in accordance with its business ethics and code of conduct.

tta is dedicated to its core business values of integrity, excellence, team spirit, and commitment. these values form the basis of optimum corporate governance. for further information, please review the Corporate Governance report in this annual report.

2. hUmaN RIghTS & EmPlOyEE WEll bEINg

a: Fair Employment Practices

tta recognises the value of its employees and has identified and assessed their long-term retention as key to the short-term and long-term viability of the Group. to this end, the Group aims to attract and retain skilled employees and enhance the life/work balance of each individual. the Group offers its full-time staff a range of benefits, including a provident fund scheme, life insurance, private health care, maternity leave and a generous holiday allotment. also available to employees are personal development and training programmes designed to enhance an employee’s skill base. all such programmes shall relate directly to the specific role of the individual within the Group and are linked closely with his/her annual performance review.

the Group has also established a welfare Committee to provide advice and recommendations regarding the welfare of employees. the welfare Committee has the duties and responsibilities to discuss with management on proper welfare for staff, to provide advice and recommendations to management regarding welfare benefits for staff, to check and oversee welfare benefits provided to staff, and to make comments and propose guidelines on welfare arrangements to the welfare Committee.

b: Workplace health & Safety

the Group aims to provide each employee with a safe place to work. tta has established safety policy


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as well as set up an occupational Health and Safety working environment Committee to monitor the Company’s working environment. all employees are informed of their duties and responsibilities for reporting any identified issues and deficiencies in the work place to their supervisors or authorised persons, respecting and complying with the Group’s occupational health and safety working environmental policy.

tta’s occupational Health and Safety working environmental Committee is active in proposing new campaigns to raise employees’ awareness on health and safety issues. they offer advice and safety tips, as well as distributing emergency survival kits to all employees. there is a monthly meeting to discuss how this can all be improved.

3. SOcIal cONTRIbUTIONS

tta’s Community Involvement/Society Development has two main components: community involvement and charitable donations, as well as support for education. the Group is an active sponsor of several business groups and chambers of commerce, including the thai Shipowners association, on whose Board a senior Group executive always sits. the Group also has a policy encouraging staff to donate their time to local causes, and will accommodate reasonable requests for time away from the office to engage in community activities.

a: community involvement and donations

In 2013 the Born to Be ‘Good’ programme was launched in line with tta’s long held spirit of volunteering, with the aim of supporting people and communities in need. the programme offers tta staff members the opportunity to contribute to society during their birthday months, transforming what is usually a personal occasion into one that provides a deeper meaning through hands-on support to the community.

In carrying out such activities, tta looks to foster a mind-set of generosity and an interest in making contributions to surrounding communities and society. tta has built a team of social contributors that seek projects that can be turned into sustainable and long term CSr programmes. It also encourages creativity and a sense of community in the workplace, while establishing a friendly atmosphere.

Summary of born to be gOOd activities in 2013

6 activities were carried out111 employees joined537 hours of volunteering123,264 Baht of cash donation210,600 Baht of fund raising cash donation

as a result, over 580 students benefitted, 500 trees were planted, over 400 animals were helped, 11 soldiers received donations and over 100 monks were given medicine, food and other necessities.

The first outing of the year was with employees whose birthdays fell in January and february. Joined by almost 20 tta staff, they headed out to the Home 4 animals foundation in Pakkred to donate food and Baht 15,000 in cash to help the foundation’s 400 abandoned cats and dogs, many of which suffered physical trauma or abuse. the 20-strong volunteer team then moved on to Baan fueng fah foundation to support mentally-handicapped children. the volunteers observed the foundation’s operations and made a donation of tHB 15,000 in cash as well as donating clothes, toys and various necessities.

The second activity, held in march, focused on a cash donation of Baht 30,360 to the Priest Hospital, which was established to care for ailing Buddhist monks and novices. the donation funded the purchase of portable oxygen canisters, which are used to save lives in emergency situations. In addition to the donation, employees and the CSr team pitched in with a meal, additional items and a visit with the hospital’s 50 inpatients.

The third born To be “good” activity sought to raise funds to help 400 orphaned and needy children at an orphanage in Bot woradit temple in ang thong province. tta volunteers organised a yard sale at the company’s head office together with a charity auction fully backed by company executives. with Baht 125,000 raised, employees born in april and may represented the company in handing over the funds and additional donated items to the temple, and sponsored a lunch for the orphanage’s young residents.

The fourth activity, jointly organised by tta and UmS employees, involved the planting of 500 trees to replenish a mangrove forest at the Bangpu Nature


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education Center – the last remaining river-delta mangrove forest in thailand’s central region. after planting the trees, the tta-UmS volunteers paid a visit to 11 soldiers recuperating from injuries sustained in clashes in the deep south and the Preah Vihear temple dispute. In addition to providing lunch, the volunteers purchased organic vegetables to help finance a post-discharge career development program for the soldiers.

The fifth born To be “good” activity saw employees born in august and September team up with the Baan Din thai Volunteer organisation to bring joyful smiles to the faces of students at wat Sammakan School in Nakhon luang, ayutthaya. almost 40 representatives from tta and UmS took part in playground equipment repairs for the school. In addition to providing lunch for the students, tta also donated athletic equipment including footballs, volleyballs, takraw balls and badminton racquets valued at Baht 10,000 to the school.

The final born to be “good” activity in the 2013 fiscal year invited employees to donate things that they don’t use any more, particularly during a time of year where people usually think about cutting the clutter from their homes. for this activity, tta partnered with the mirror foundation which accepts donations of clothing, furniture, household goods and other items, and fixes them or uses funds from their sale to provide goods and services to needy students and communities nationwide.

approximately 20 tta staff also spent a half-day of their time to help screen and categorise donated books for further distribution to needy children. In addition, tta also donated Baht 20,000 to produce 20 mobile library units, which are made from old refrigerators, under the “Building the nation by reading more books” project. finally, tta staff hosted a luncheon for all volunteer staff at the mirror foundation in order show the Company’s appreciation and support to the foundation.

b: Education

as a member of the thai Shipowners association, Bangkok Shipowners and agents association, thoresen Shipping has forged links to various universities, including Burapha University and Kasetsart University. we encourage employees to be active in the community and operate a flexible working policy which permits staff to use a certain amount of working time each year to devote

to charitable activities, including offering time as a guest speaker for maritime courses at local universities and colleges.

thoresen Shipping provides award recognition to its workers as well as academic scholarships to the children of its seafaring staff. over the last year, thoresen Shipping offered eight students scholarships (Baht 25,000 each). Criteria for the fourth year marine commercial students included the maintenance of minimum grade point average (“GPa”) of 3.0 as well as a positive working attitude.

thoresen Shipping also hosted its 10th annual maritime awards, which honour those seafarers and staffers that have contributed greatly to the company over the previous year. this ceremony also offers academic scholarships to the children of seafarers who have maintained a strong GPa. an additional 13 scholarships were awarded at this event to promising students whose parents had worked at the company for a minimum of five years.

UmS offered a Computer training Day in may whereby a community relations team provided basic computer training for the students of Baan Khlong Samrong School in Suan Som subdistrict. UmS also donated Baht 20,000 worth of rice to the students.

4. ENvIRONmENT

the Group understands that its activities affect the environment and the communities in which we operate. we believe that we have a responsibility to identify and manage these impacts as effectively as possible. we are committed to continually improving our environmental performance and moving towards the best practices in corporate sustainability.

a: Environmental Policy

the Group aims to:

minimise the environmental impacts of our existing operations and ensure that the environmental impacts of new operations are fully assessed and minimised prior to their introduction;

reduce consumption of materials in all operations, and where practicable, to re-use rather than dispose of materials where possible, and promote recycling and use of recycled materials;

Seek to improve the energy efficiency of buildings and to manage energy wisely in all operations;

reduce, wherever practicable, the level of harmful emissions from our office premises;


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Introduce programmes that aim to minimise waste;

Dispose of waste and effluents in a responsible manner;

work with our suppliers to minimise the impact of their operations on the environment through a quality purchasing policy;

b: Environmental Risks arrangement

as a company working in the transportation sector, there are major environmental risks associated with the Group. Important issues for the Group include the constant demand for energy and Co2 emissions resulting from the Group’s operations. furthermore, substantial quantities of paper are used in reports to corporate and individual clients, the preparation of research materials, and in the recordkeeping process. energy used for heating, lighting and cooling of offices and for office equipment is another critical element of the process. the Group looks into the following areas to ensure that systems are in place to lower any environment impact. to promote environmental awareness in the organisation, the group use the ‘reduce, reuse and recycle’ concept.

1) lighting

our group encourages the use of low energy lighting and where practicable, the use of segmented areas which will allow lights to be switched off when not required. Since 2009, tta has turned off lights during lunch hours and after business hours.

2) air conditioning

air conditioning units are available in most of our of-fice locations. to make more efficient use of cooling systems, we ensure that the temperature is set for a comfortable working environment at not more than 25°C. Just as with the lighting, we turn off air conditioning systems at lunch time and in the evening.

3) Paper

we seek to reduce the amount of paper used and to increase the amount that is recycled. our group strives to reduce the amount of paper purchased and will encourage employees to re-use or recycle paper while all used papers are also collected and donated to the foundation for the blind in thailand. In addition, employees are encouraged to make use of electronic communications in the form of email and the scanning of documents into electronic records for storage. In 2009, the Group an internal online platform which allows employees to request/approve leave, search/update employees’ databases online.

4) Waste

across the Group, general office waste is collected and removed each day by cleaners and taken to a compactor for removal by a waste contractor, or is collected weekly by the local authorities.

5) Our fleet

thoresen Shipping is committed to being an active, forward thinking contributor to the worldwide reduction of Greenhouse Gas emissions (GHG).

thoresen Shipping’s contributions to this industry and world wide effort are;

fleetwide emissions awareness building, measurement and verification of each vessel’s emissions footprint.

Developing a sustainable emissions reduction strategy for the existing fleet, which includes: - Use of low Sulphur fuels - fuel additives trial to prove cleaner burn and lower consumption of fuel oil - alpha lubricator retrofit to reduce wasted lube oil adding to the exhaust emission - Increased hull and propeller cleaning - full blasting and high slip paint system trial - Sky Sail feasibility study

thoresen Shipping Comply to marPol annex VI for low Sulphur banker for the whole of its fleet while the vessel is trading in SeCa and the Global area. Similarly the fleet implement a full Ship energy efficiency management plan to reduce Co2 emissions as well as complying with Imo regulation on the Ballast water management procedure.

the thoresen Shipping fleet has managed to run their vessels economically, and at their optimum capacity. thoresen Shipping managed to maintain the running of just one generator on load services at sea passage and has looked to improve the fuel quality by adding chemicals into the diesel tanks. the fleet follows a strict machinery maintenance program in order to utilise the engines at their utmost efficiency.

two vessels have retrofit the mewis Duct which is expected to power down the main propulsion of the diesel engine, reduce fuel oil consumption and reduce Nox and Co2 emissions. Vessels built before 2000 have had retrofit fuel nozzles installed which meet with the marPol annex VI tier II regulations, further supporting Nox reduction. on top of this green effort there is a tin- free base anti fouling paint applied to the vessel’s hull during dry docking.


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FINaNcIal hIghlIghTS

year Ended 30 September2013 2012

Restated2011

(baht in millions, except share, per share data, and ratios)Income Statement data:Voyage revenues 4,746.61 3,528.46 5,430.10 Voyage expenses* 3,250.20 1,778.90 2,819.35 Vessel operating expenses - owner expenses* 864.30 829.50 1,501.81 offshore services revenues 8,243.40 5,721.17 5,542.74 offshore services expenses 5,989.00 3,751.88 3,911.52 Sales 5,140.74 6,781.51 6,249.37 Cost of sales* 4,318.65 6,021.35 5,278.76 revenues from service companies and other sources* 463.64 478.07 778.40 Depreciation and amortisation 1,595.21 1,556.35 2,084.15 General and administrative expenses* 1,862.44 1,522.55 1,694.00 Interest expenses 487.47 567.88 619.61 Interest income 38.38 67.11 139.89 equity income from associates and joint ventures 254.66 129.43 110.23 foreign exchange gains 71.20 63.94 91.78 Net income (losses) (5,080.22) (4,494.43) 173.20 Per Share data:Net income (losses) - basic (5.86) (6.35) 0.24 Cash dividends declared 0.00 0.00 1.00 Net book value 25.51 33.75 43.53 balance Sheet data (at end of year):Cash and short-term investments 7,961.59 4,392.34 4,786.07 Vessels, rigs, machinery, and equipment - net of depreciation 18,997.00 20,216.05 21,014.74 total assets 43,091.39 40,797.23 46,318.98 total liabilities 17,790.62 16,904.16 17,218.16 Issued and paid-up share capital 991,837,961 708,004,413 708,004,413 total shareholders’ equity 25,300.77 23,893.07 29,100.82 Other Financial data:Net cash flows provided by (used in) operating activities 1,142.99 1,968.96 144.99 Net cash flows provided by (used in) investing activities (2,671.70) (1,605.57) (3,955.33)Net cash flows provided by (used in) financing activities 5,405.63 (676.58) (884.89)Capital expenditures : Property, plant and equipment, and intangible assets 2,411.73 1,689.19 4,426.07 Financial Ratios:return on shareholders’ equity (%) (27.75%) (21.16%) 0.70%return on total assets (%) (12.11%) (10.32%) 0.36%Net profit margin (%) (27.52%) (27.49%) 0.99%total debt to total capitalisation 0.36 0.37 0.33 Net debt to total net capitalisation 0.20 0.29 0.25 Note *: exclude one-off items


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maNagEmENT dIScUSSION & aNalySIS

tta reports net losses of Baht 5,080 million and losses per share of Baht 5.86 for the twelve-month period from 1 october 2012 to 30 September 2013 (“fY13”). this compares with net losses and losses per share of Baht 4,494 million and Baht 6.35, respectively, for the twelve-month period from 1 october 2011 to 30 September 2012 (“fY12”).

Consolidated net losses of Baht 5,080 million were primarily due to a number of asset impairments. on an operating basis, thoresen Shipping reported higher losses, as it suffered through 25-year lows in freight rates. these higher losses were partially offset by significant improvements in mermaid maritime Plc. (“mermaid”).

Thoresen Shipping continued to generate positive eBItDa, as the Baltic Dry Index (“BDI”) averaged 986 points in fY13, the lowest since 1999. our tCe rate of USD 8,364 per day, down 18% yoy, remained below the eBIt breakeven level, resulting in 166% higher eBIt losses.

mermaid’s net profits grew almost five times as the subsea business experienced higher average day rates and utilisation. equity income from its 33.8%-owned associate, asia offshore Drilling limited (“aoD”) also started to be recognised.

UmS continues to face challenges, as it grapples with logistics inefficiencies at its recently-reopened Samut Sakorn plant as well as weak coal prices. through volume reduction, net losses would have narrowed 26% yoy without the Baht 243 million provision for coal inventories recorded in fY13.

baconco had a record year in fY13, with net profits up 24% yoy primarily on better gross margins. Volume of 196,400 tonnes was also a record high, while warehouse rental revenues more than doubled yoy following the launch of Baconco 5 in february.

Revenues

Normalised EbITda

consolidated revenues of Baht 18,463 million were up 13% yoy. Higher revenues at thoresen Shipping (+35% yoy) and mermaid (+44% yoy) more than offset lower sales revenues at UmS (-44% yoy) and Baconco (-4% yoy). thoresen Shipping chartered-in more vessels, resulting in substantially higher vessel days and freight revenues, while mermaid saw more contributions from the diving services contract with Saudi aramco and other full subsea service contracts.

6,782

5,141

332

8,243

4,747 2,000

0

4,000

6,000

8,000

10,000

12,000

14,000

16,000 18,000

20,000

FY12 FY13

(Baht millions)

Freight charges Offshore service income

Service and commission income Sales

3,528

5,721

316

6,782

5,141

1,369

340

14

3370

1,000

1,500

2,000

2,500

3,000

FY12 FY13

(Baht millions)

Thoresen ShippingMermaid Baconco

UMS

668

1,389

257

-40


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65

Consolidated direct costs were up 17% yoy to Baht 14,548 million. Higher costs at thoresen Shipping (from more vessel days) and mermaid (from additional costs to service the subsea contracts) were offset by lower costs of sales at UmS and Baconco. Consequently, consolidated gross profits were up 1% yoy to Baht 3,915 million.

Net operating cash flow

SG&a increased by 14% yoy to Baht 2,118 million, driven by mermaid’s contract start up costs in the middle east and Baconco’s increased domestic marketing efforts. as a result, eBItDa narrowed 11% yoy to Baht 1,797 million.

equity income jumped 94% yoy to Baht 250 million. mermaid’s 33.8% owned associate, asia offshore Drilling limited (“aoD”), contributed Baht 122 million of equity income, up from losses of Baht 10 million last year. all in, eBIt was Baht 640 million, down 22% yoy.

losses before extraordinary items, forex gains/losses and minority interests were Baht 97 million in fY13, compared to profits Baht 57 million in fY12.

Consolidated net losses were Baht 5,080 million due to various extraordinary items, key components of which include:

restatedbaht millions Fy12 Fy13Thoresen ShippingImpairment charge on fixed assets (531) (3,917)write-off arranging fees for a syndicated loan secured in 2007, which expired in fY12 (209) -Impairment charge on assets under construction at a supplier (169) -UmSallowance for net realisable value of coal inventories (107) (243)mermaidrealised lossess on cross-currency swap (153) -corporateImpairment charge on tta’s investment in UmS (2,327) (596)Provision for doubtful debt for the coal mine project in the Philippines (908)Impairment charge on tta’s investment in merton Group (Cyprus) ltd. - (120)

these impairments and provisions were taken in line with tta’s strict adherence to conservative financial reporting standards, which stipulate that the company review the value in use of its assets on an annual basis. they also followed an extensive assessment by management, the Board of Directors, and external advisors.

5,141

1,143

0

500

1,000

2,000

1,500

2,500

FY12 FY13

(Baht millions)

1,969


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66

Performance Overview by business groupRevenue contribution by business line restated

baht millions Fy12 Fy13 %yoytransport 3,594 4,812 34%Infrastructure 7,032 5,408 (23%)energy 5,721 8,243 44%Corporate* 0 (0)Total revenue 16,347 18,463 13%

Net profit contribution by business line restated

baht millions Fy12 Fy13 %yoytransport (682) (3,986) (484%)Infrastructure (23) (55) (138%)energy 42 298 605%Corporate* (3,831) (1,337) 65%Net profit (4,494) (5,080) (13%)* Corporate = tta, the holding company, and inter-company eliminations

key RatiosProfitability ratios Fy12 Fy13 change(%)Gross margin 23.7% 21.2% (2.5%)eBItDa margin 12.3% 9.7% (2.6%)eBIt margin 5.0% 3.4% (1.6%)Net margin (27.5%) (27.5%) 0.0%return on assets (10.3%) (12.1%) (1.8%)return on equity (24.1%) (28.3%) (4.3%)liquidity and debt ratios Fy12 Fy13 change(x)Current ratio 1.43 2.19 0.76Debt/equity 0.59 0.56 (0.03)Net debt/equity 0.40 0.24 (0.16)Interest coverage 1.38 1.23 (0.15)

Summary of Statement of cash Flowsbaht millions Fy12 Fy13Cash flows from operating activities 1,969 1,143Cash flows from investing activities (1,606) (2,672)Cash flows from financing activities (677) 5,406Net increase in cash and cash equivalents during the period (313) 3,877Currency translation differences 96 (13)Cash and cash equivalents at the beginning of the period 3,800 3,582Cash and cash equivalents at the end of the period 3,582 7,446


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Transport grouplowest bdI since 1999

a combination of lower trade growth and oversupply continued to adversely affect the dry bulk shipping industry. freight rates failed to rebound as per market expectations and hovered at historic lows. only in 4QfY13, the Baltic Dry Index (“BDI”) jumped 45% qoq (+53% yoy) to average 1,292 points. this was led primarily by the Capesize segment, whose average tC rates more than tripled qoq on soaring Chinese iron ore and met coal imports. Compared to the pace seen in the first half of calendar year, Chinese iron ore and met coal imports in July and august were up 11% and 10%, respectively.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

500

1,000

1,500

2,000

Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13

USD/day (BDI & TC rates)4Q

FY12 1Q

FY13 2Q

FY13 3Q

FY13 4Q

FY13

BDI (LHS) TC Avg BCI TC Avg BSI TC Avg BHSI

Despite the surge in the final quarter, the BDI averaged only 986 points in fY13. this was a 15% yoy decline and the lowest since 1999’s average of 963 points. the largest drops were seen in the Supramax and Panamax segments. the Baltic Supramax tC rates (“BSI”) averaged USD 8,715 per day in fY13, slipping 22% from fY12’s USD 11,167 per day. the Handysize segment fared slightly better, with the Baltic Handysize tC rates (“BHSI”) down 14% yoy to average USD 7,301 per day in fY13. the Capesize segment showed the smallest yoy decline but the highest volatility. the Baltic Capesize tC rates (“BCI”) started the year at around USD 8,400 per day, bottomed at around USD 4,200 per day in early march and peaked at over USD 42,000 per day in late September, with fY13 average at USD 11,148 per day, slipping 2% yoy.

at the end of fY13, fearnleys estimated a global dry bulk fleet of 9,873 vessels with a total capacity of 713 million dead-weight tonnes (“Dwt”), representing less than 6% growth from the end of fY12 and a marked slowdown from a 13% growth a year earlier.

baht 3,917 million non-cash impairment against the fleet

accounting standards require an entity to review whether indicators of asset impairment exist, i.e. whether an asset’s carrying amount is higher than its recoverable amount. as the prolonged industry downturn and resultant low freight rates have invariably reduced vessel values, thoresen Shipping recorded a non-cash Baht 3,917 million impairment against its fleet in fY13. after the impairment, the book value of thoresen Shipping’s fleet is now in line with its market value.

Thoresen Shipping

weighed down by the impairment charge, thoresen Shipping reported net losses of Baht 4,138 million in fY13, compared to net loss of Baht 839 million in fY12. excluding one-off items, thoresen Shipping’s normalised net losses should have been Baht 261 million in fY13, compared to normalised net profits of Baht 85 million in fY12. freight revenues came in at Baht 4,747 million, up 35% yoy mainly due to almost tripled chartering-in activity to accommodate growing commercial relationships. During fY13, thoresen Shipping operated an average of 29.2 vessels (16.1 owned vessels and 13.1 chartered-in vessels), up from an average of 19.4 vessels (14.9 owned vessels and 4.5 chartered-in vessels) in fY12.

4,747

217(143)

337-500

0

500

1,0001,500

2,000

2,500

3,000

3,500

4,0004,500

5,000

FY12 FY13

(Baht millions)

Freight revenues Normalised EBIT

668

3,528


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68

Cash oPeX includes:owner’s expensesDry-docking expensesadministrative expensesfinance costs

thoresen Shipping’s tCe was USD 8,364 per day in fY13, declining 18% yoy along with the Supramax market (“BSI”), which is thoresen Shipping’s benchmark. adjusting for the fleet’s revenue capacity (90% of the BSI), thoresen Shipping’s tCe outperformed the BSI by 7% during fY13. the chartered-in tCe improved from –USD 13 per day in the previous year to USD 152 per day in fY13.

0

2,000

4,000

6,000

8,000

10,000

12,000

FY12 FY13

(USD/Day)

DepreciationThoresen’s TCE

Cash OPEXAdjusted TC BSI

Cost control efforts have been sustained in fY13. owner’s expenses, the largest portion of cash operating expenses, were at USD 4,087 per day, up 2% yoy due to higher crew costs from competitive pressures but still lower than the industry average of USD 4,500-4,600 per day. Dry docking expenses declined 12% yoy to USD 744 per day due to a younger fleet and diligent on-board maintenance. the total per-day costs, including depreciation, stood at USD 9,823 in fY13, down 2% yoy but still higher than the tCe for the year.

as a result, thoresen Shipping reported eBIt losses of Baht 143 million, down from eBIt of Baht 217 million in fY12. But with per-day cash operating expenses of about USD 6,200, thoresen Shipping was still able to generate positive eBItDa of Baht 337 million in fY13 amidst a depressed freight rate environment.

It is worth noting that thoresen Shipping’s operating cost base, and hence net profit breakeven, is estimated to fall to approximately USD 8,900 per day after the impairment against its fleet due to the lower depreciation expense.

average daily Operating Results (USd/day) Restated

USd/day Fy12 Fy13 %yoy

USD/tHB rate (Daily average) 31.17 30.46 (2%)

time charter equivalent (tCe rate)* $10,206 $8,364 (18%)

tCe rate of owned fleet $10,219 $8,212 (20%)

tCe rate of Chartered-In ($13) $152 1,317%

Vessel operating expenses (owner’s expenses) $3,997 $4,087 2%

Dry-docking expenses $842 $744 (12%)

General and administrative expenses $1,450 $1,647 14%

finance costs, net $244 ($217) (189%)

Depreciation $3,443 $3,563 3%

operating earnings* $229 ($1,459) (736%)*the per day basis is calculated based on available service days.


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69

Fleet data Summary4Q Fy12 3QFy13 4QFy13 %yoy %qoq Fy12 Fy13 %yoy

average Dwt 44,340 46,025 46,087 4% 0% 44,340 46,087 4%Calendar days for owned fleet (1) 1,467 1,480 1,606 9% 8% 5,577 6,032 8%available service days for owned fleet (2) 1,467 1,451 1,551 6% 7% 5,501 5,874 7%operating days for owned fleet (3) 1,466 1,450 1,549 6% 7% 5,457 5,864 7%owned fleet utilisation (4) 99.9% 99.9% 99.9% 0% 0% 99.2% 99.8% 1%Voyage days for chartered-in fleet 695 1,070 1,318 90% 23% 1,638 4,793 193%average number of vessels (5) 23.5 27.7 31.2 33% 13% 19.4 29.2 51%

Note:(1) Calendar days are the total calendar days tta owned the vessels in our fleet for the relevant period, including off hire days associated with major repairs, dry dockings, or special or intermediate surveys.(2) available service days are calendar days (1) less planned off hire days associated with major repairs, dry dockings, or special or intermediate surveys.(3) operating days are the available days (2) less unplanned off-hire days, which occurred during the service voyage.(4) fleet utilisation is the percentage of time that our vessels generated revenues and is determined by dividing operating days by available service days for the relevant period.(5) average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the total operating days for owned fleet plus voyage days for chartered in fleet during the period divided by the number of calendar days in the relevant period.

26,4

01

46,0

87

40.5

16.8 19.2

10.1

0

5

10

15

20

25

30

35

40

45

50

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1Q FY09

3Q FY09

1Q FY10

3Q FY10

1Q FY11

3Q FY11

1Q FY12

3Q FY12

1Q FY13

3Q FY13

Owned fleet

Avg DWT - LHS Avg # of vessels (owned fleet) - RHS Avg age (years) - RHS

Three vessels joined the fleet in Fy13

at the end of fY13, thoresen Shipping’s owned fleet consists of 18 vessels (8 Handymax and 10 Supramax) with a Dwt-weighted average age of 10.1 years and average size of 46,087 Dwt. During fY13, thoresen Shipping took delivery of two new-builds from Vinashin: 1) a 53,506-Dwt m.V. thor Brave on 15 November 2012 and 2) a 53,506-Dwt m.V. thor Breeze on 20 august 2013. thoresen Shipping purchased a 54,881-Dwt second-hand Supramax (built in November 2005 by oshima) m.V. thor fearless on 6 June 2013 and sold a 26-year-old m.V. thor Jupiter for scrap in December 2012.

thoresen Shipping’s fleet renewal plan was somewhat delayed in fY13 due primarily to a tight credit environment for the shipping industry. Nevertheless, thoresen Shipping’s strategy - to rebuild and modernise its fleet at the bottom of the asset cycle to achieve significant long-term competitive advantages – remains unchanged. as part of this fleet growth initiative, thoresen Shipping plans to acquire up to six vessels at reasonable prices over the next 12-18 months. following the

success of its chartering office in Copenhagen, as reflected in thoresen Shipping’s tCe outperformance vs. the BSI, thoresen Shipping is now looking to open a commercial office in the US in fY14 to expand its global footprint and gain better access to cargo customers, owners, operators as well as broker community in the region.

Freight rates expected to recover in Fy14

the general outlook for freight rates in fY14 is a gradual recovery compared to a dismal fY13. Indeed, so far halfway into 1QfY14, the BDI has averaged over 1,700 points, up about 80% from fY13 average.

overall, marsoft expects the global dry-bulk shipping tonne-mile demand to grow by more than 7% in 2014, driven by robust steel-related, steam coal and grain trades. on the supply front, deliveries are projected to decline from about 63 million Dwt in 2013 to an average of 46 million Dwt per year in 2014 and 2015. even with a potential slowdown in scrapping, now expected to average about 18 million Dwt per year, the net fleet growth is forecast to slow to 5% in 2014, falling to 3% in 2015.


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there has been a recent surge in dry bulk ordering activity, which is a concern, especially as there are few signs that it would slow down in the immediate future. total dry bulk ordering already surpassed 40 million Dwt during the first nine months of 2013, with larger vessels i.e. Capesizes and Ultramaxes accounting for most of the new tonnage ordered. this is a significant increase from 25 million tonnes for full-year 2012. However, at less than 18% of the existing fleet, the orderbook has actually fallen to its lowest level since 2003.

Energy groupImproved performance

mermaid reported net profits of Baht 320 million, up almost five times from Baht 67 million in fY12. total revenues of Baht 8,243 million were an increase of 44% yoy, primarily due to higher contributions from the subsea business, as more full service contracts, such as the Saudi aramco diving services contract, led to higher average day rates. mermaid offshore Services (“moS”) achieved a 66% utilisation rate in fY13. meanwhile, mermaid Drilling only achieved a 58.3% utilisation rate in fY13 compared to 64.5% in fY12, as mtr-2 underwent its special periodic survey (“SPS”) from November 2012 until april 2013 and was back on-hire on 29 may 2013. mtr-1 has also been unemployed since its contract ended in July.

Given additional expenses at the start up phase of the new full subsea contracts, mermaid’s direct costs jumped 60% yoy to Baht 5,989 million. SG&a grew by 52% yoy to Baht 885 million due largely to increased personnel in the middle east region. as a result, eBItDa came in at Baht 1,369 million, relatively flat yoy. of note is a strong growth in equity income, which jumped from losses of Baht 10 million in fY12 to profits of Baht 124 million in fY13. this was mainly due to strong contribution from mermaid’s 33.8%-owned associate company asia offshore Drilling limited (“aoD”). Its high-specification jack-up rigs, aoD I and aoD II, commenced their three-year contracts with Saudi aramco on 1 may and 13 July, respectively. all in, eBIt grew 17% yoy to Baht 816 million.

Positive outlook for both subsea and drilling businesses

outlook for the offshore services sector remains positive. for the subsea business, mermaid is generally experiencing a greater demand for its offshore vessels and related services across different geographies. that said, some of mermaid’s contracts are still short-term and subject to changes on short notice. mermaid continues to focus on higher vessel yields and longer contract durations in growth areas, such as the middle east and europe. for example, fY14 will see mermaid endurer performing inspection, repair, and maintenance services, and light construction intervention in the North Sea. Given the increasing exploration and production activities, mermaid is cautiously optimistic that the outlook in the oil and gas industries will be positive over the next 12 months.

the outlook for drilling business is also positive. the demand-supply dynamics of the tender rig market appears to be favourable as indicated by day rates and utilisation. following the completion of its contract in Indonesia in July, mermaid is marketing mtr-1 for continued work as an accommodation barge support unit. mtr-2 commenced a 2-year drilling contract in Indonesia in late may.

for jack-up rigs, the overall demand has improved globally. the demand for premium jack-up rigs has remained strong in all relevant regions, particularly in asia and the middle east. following the deliveries of aoD’s three jack-up rigs aoD I, aoD II, and aoD III in fY13, all three jack-up rigs have commenced their three-year contracts with Saudi aramco. aoD III commenced its contract on 10 october 2013. Contributions from aoD are expected to rise in fY14, now that all three jack-up rigs are fully employed.

capital raising completed in October

mermaid successfully completed its capital raising through a rights issue and a private placement in early october. approximately SGD 176 million was raised through a rights issue and private placement of 628.8 million rights shares at an issue price of SGD 0.28 per share. the proceeds shall be used primarily for the acquisition of two new tender rigs and other investments. Having subscribed its rights shares in full, tta’s stake in mermaid remains unchanged at 57.14%.


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Infrastructure groupUmS’ net losses exacerbated by provision for coal inventories

fY13 was a challenging year for UmS as it grappled with logistics inefficiencies at its Samut Sakorn plant as well as weak coal prices. UmS reported net losses of Baht 335 million, compared to Baht 255 million in fY12. revenues of Baht 1,931 million were a 44% yoy decline, as UmS slowed 0-5 mm coal sales to limit losses. UmS sold approximately 791,000 tonnes of coal in fY13, down 43% from almost 1.4 million tonnes in fY12 when UmS went through aggressive 0-5 mm coal sales to reduce its stockpile and meet one of the pre-conditions for the Samut Sakorn plant re-opening set forth by the Provincial Government. Gross margins improved to 18.1%, as the proportion of low-margin 0-5 mm coal in UmS’ total sales volume dropped to 27% from 41% in fY12. SG&a declined by 22% yoy to Baht 337 million along with lower sales. eBItDa was Baht 14 million and eBIt losses were Baht 51 million, improving from eBItDa losses and eBIt losses of Baht 40 million and Baht 107 million a year ago, respectively. In accordance to standard accounting practices and to reflect lower coal prices, UmS recorded a total of Baht 243 million allowance for net realisable value of inventories in fY13, the majority of which was taken in 3QfY13. without the provision for coal inventories, net losses would have narrowed yoy.

UmS gradually resumed operations at the Samut Sakorn facility since 10 June 2013. the plant had been closed for almost two years due to environmental concerns in adjacent areas. Given that UmS is yet to be allowed to use its own port at this plant, full logistics efficiencies cannot be obtained. Discussions with the responsible authorities are ongoing. Going forward, UmS now expects to screen only medium calorific value (“mCV”) coal at this facility. Provincial authorities stipulate that stockpiles must be in covered areas only and UmS does not have sufficient storage for low calorific value (“lCV”) coal after its screening and 0-5 mm coal fines generation. UmS is working on additional avenues to increase the value of its 0-5 mm coal inventory.

a record year at baconco

Baconco reported a record year in fY13, with net profit of Baht 253 million, up 24% yoy. Baconco sold a record 196,400 tonnes in fY13, up 2% yoy. NPK fertilisers made up approximately 94% of the volume sold in fY13, compared to 91% in fY12. revenues of Baht 3,229 million were down 4% yoy on lower fertiliser prices. the higher proportion of NPK fertiliser volume, together with active and regular purchases of raw materials at lower prices, boosted gross margins to 14.6% from 10.7% in fY12. as a result, fY13 gross profits improved 30% yoy to Baht 470 million, despite relatively flat volume and revenue. SG&a increased 25% yoy to Baht 130 million due to Baconco’s increased domestic marketing efforts during the year. eBItDa and eBIt came in at Baht 340 million and Baht 333 million, up from Baht 257 million and Baht 243 million in fY12, respectively.

growing warehousing business

Driven by additional space from the opening of the Baconco 5 warehouse in february, warehouse rental revenues more than doubled in fY13, but still accounted for a fraction of Baconco’s top-line compared to fertilisers. Capacity utilisation continued to be strong, at close to 80% on average. tta Group companies in Vietnam currently operate total warehouse space of 53,000 sq. m., with capacity for almost 190,000 metric tonnes of cargoes.

Baconco continues to look for growth opportunities for both fertiliser and warehousing businesses. a new granular production unit, which is expected to boost its production capacity by about 100,000 tonnes, is expected to be added in fY14. additional warehouses are also on the cards.

In fY13, Baria Serece contributed Baht 24.5 million of equity income to tta, down 15% yoy due to slower imports of grain and agricultural products.


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corporate groupfY13 provided evidence that tta’s diversification strategy is working. the operating losses from thoresen Shipping were partially offset by mermaid’s improved profits. Baconco and non-controlling investments, such as Petrolift Inc. and Baria Serece, delivered good performances. Unfortunately, tta continues to face difficult environments in thoresen Shipping and UmS. we are working hard to improve all core business units and ensure solid profitability in fY14.

although we did not plan to take any additional significant impairment in fY13, the dry bulk shipping industry did not rebound as per market or our expectations, while UmS continues to face challenges that we felt needed to be reflected in our financial statements. these impairment charges are strictly non-cash items. as such, there will be no effect on our future cash flow generation position.

the dry bulk shipping market is gradually recovering. therefore, the proposed capital raise allows thoresen Shipping to acquire more vessels before the market rises further. the offshore oil and gas services sector, in which mermaid operates, remains strong, as global exploration and production (“e&P”) spending by oil and gas companies continues to rise. the most recent survey by Pareto Securities predicts an 8% increase global e&P spending in 2014.

the fertiliser market in Vietnam is growing slowly, but with low freight rates, Baconco has been able to export significant fertiliser volume to distant places like africa. UmS faces more competition from recently established coal traders and is looking for ways to maintain sales volumes and improve margins.

our overall policy is to closely monitor market developments and ensure that our core business units are efficiently managed. we will also seek investment opportunities that are expected to bring higher future returns in each business unit.


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STaTEmENT OF ThE bOaRd OF dIREcTORS’RESPONSIbIlITIES FOR ThE FINaNcIal STaTEmENTS

27 November 2013

to : the Shareholders of thoresen thai agencies Public Company limited

the Board of Directors realises the significance of its duties and responsibilities in supervising tta’s business to ensure good management with integrity and prudence in accordance with laws, detailed objectives, articles of association, and resolutions of the shareholders meetings. the Board of Directors protects the benefits of the company and its stakeholders by ensuring that tta’s financial report contains accurate and full accounting records that reflect its actual financial status and operational results.

the Board of Directors has established the audit Committee comprising independent directors fully qualified in accordance with the requirements of the Stock exchange of thailand to review and ensure accuracy and sufficiency of the financial report, to review the internal control systems including compliance with securities law, regulations of the Stock exchange of thailand or laws relating to the business of the company. In this regard, the audit Committee has already reported its performance to the Board of Directors. the Board of Directors is of the opinion that the financial statements for the year 2013 of tta and its subsidiaries, which have been reviewed by the audit Committee in conjunction with the management, and audited by tta’s auditor, accurately reflect the financial status and operational results in all material aspects in accordance with generally accepted accounting standards.

mr. Chalermchai mahagitsiri m.l. Chandchutha Chandratat executive Vice Chairman President & Chief executive officer


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Independent Auditor’s Report To the Shareholders of Thoresen Thai Agencies Public Company Limited I have audited the accompanying consolidated and separate financial statements of Thoresen Thai Agencies Public Company Limited and its subsidiaries, and of Thoresen Thai Agencies Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at 30 September 2013, the consolidated and separate statements of income and comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Consolidated and Separate Financial Statements Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these consolidated and separate financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Independent auditor’s Report


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2

Opinion In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at 30 September 2013 and the financial performance and cash flows for the year then ended of Thoresen Thai Agencies Public Company Limited and its subsidiaries, and of Thoresen Thai Agencies Public Company Limited, respectively, in accordance with Thai Financial Reporting Standards. Emphasis of Matter Without qualifying my opinion, I draw attention to note 3 to the financial statements which describe the effect of the Company’s adoption from 1 October 2012 of TAS 21. The corresponding figures presented for the consolidated financial statements are based on the audited consolidated financial statements as at and for the year ended 30 September 2012 after making the adjustments described in note 3. The audited consolidated and separate financial statements as at and for the year that ended 30 September 2012 were audited by another auditor who expressed an unmodified opinion on those statements on 29 November 2012. (Veerachai Ratanajaratkul) Certified Public Accountant Registration No. 4323 KPMG Phoomchai Audit Ltd. Bangkok 27 November 2013


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Statement of financial positionThoresen Thai agencies Public company limited and its Subsidiariesas at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)Thoresen Thai Agencies Public Company Limited and its SubsidiariesStatement of financial positionAs at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

1 October 1 OctoberAssets Note 2013 2012 2011 2013 2012 2011

(restated) (restated)

Current assetsCash and cash equivalents 6 7,458,387 3,589,424 3,802,140 650,977 123,271 765,715

Short-term investments 7 503,207 802,920 983,932 60,207 88,618 291,919

Trade accounts receivable 5, 8 3,966,227 2,665,169 2,727,556 - - -

Other accounts receivable 9 841,457 426,494 727,164 3,035 2,301 27,884

Receivables from related parties 5 5,222 62,062 291,060 515,189 592,175 434,193

Short-term loans to related parties 5 - - - 4,732,061 4,030,978 5,356,407

Current portion of long-term

receivables from a related party 5 - 31,251 30,930 - - -

Current portion of long-term

loans to related parties 5 2,573 3,323 3,323 2,573 3,323 174,423

Deferred contract costs 10 261,202 277,459 - - - -

Inventories 11 1,336,210 1,601,787 2,270,947 - - -

Vessel supplies and spare parts 419,736 610,583 370,949 - - -

Prepayments 182,394 139,484 142,985 5,933 6,040 5,755

Other current assets 378,352 306,671 337,681 516 764 10,513

Total current assets 15,354,967 10,516,627 11,688,667 5,970,491 4,847,470 7,066,809

Non-current assetsLong-term portion of receivables

from a related party 5 - - 31,251 - - -

Long-term loans to related parties 5 - - 554,780 2,232,763 1,911,820 4,746,158

Investments in subsidiaries 12 - - - 21,265,656 18,947,210 15,723,960

Investments in associates 13 3,732,203 2,599,551 3,758,851 42,368 42,368 53,581

Investments in joint ventures 14 1,306,463 1,256,472 63,893 19,781 19,984 8,771

Goodwill 15 968,661 1,478,996 3,801,094 - - -

Property, plant, and equipment 16 20,934,537 23,984,537 25,207,596 198,524 204,184 232,279

Intangible assets 17 316,428 497,506 607,170 69,577 90,739 125,566

Other non-current assets 18 478,130 463,536 605,680 698 247 1,676

Total non-current assets 27,736,422 30,280,598 34,630,315 23,829,367 21,216,552 20,891,991

Total assets 43,091,389 40,797,225 46,318,982 29,799,858 26,064,022 27,958,800

(in thousand Baht)

30 September

Consolidated

financial statements

30 September

Separate


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

3

the accompanying notes are an integral part of these financial statements.


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Statement of financial positionThoresen Thai agencies Public company limited and its Subsidiaries

as at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)Thoresen Thai Agencies Public Company Limited and its SubsidiariesStatement of financial positionAs at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

1 October 1 OctoberLiabilities and equity Note 2013 2012 2011 2013 2012 2011


Current liabilitiesBank overdrafts 19 12,140 7,230 2,292 - - -

Short-term loans 19 1,168,349 1,263,004 1,410,277 - - -

Trade accounts payable 1,382,044 1,269,526 837,555 13,332 13,341 30,474

Other accounts payable 71,835 64,493 139,330 28 1,121 1,239

Payables to related parties 5 14,314 11,632 7,173 208,783 97,053 19,271

Advances from customers 166,686 225,776 375,834 - - -

Short-term loans from related parties 5 - - 4,500 5,916,004 5,660,905 4,367,527

Current portion of bonds 19 - - 1,205,741 - - 1,205,741

Current portion of long-term loans 19 2,279,612 3,318,265 1,057,584 220,000 40,000 -

Current portion of finance lease liabilities 19 4,239 5,373 4,272 - - -

Current portion of employee benefit obligations 20 - - 60,808 - - -

Current portion of share subscription payable

to subsidiaries 34,408 33,792 - - - -

Accrued income taxes 158,174 62,826 153,493 - - -

Accrued expenses 1,432,126 880,555 888,756 73,855 59,733 55,505

Other current liabilities 281,298 224,479 313,886 40,359 13,362 8,563

Total current liabilities 7,005,225 7,366,951 6,461,501 6,472,361 5,885,515 5,688,320

Non-current liabilitiesLong-term loans 19 6,627,589 5,387,990 6,651,297 940,000 1,160,000 -

Bonds, net 19 3,996,772 3,995,530 3,994,284 3,996,772 3,995,530 3,994,284

Finance lease liabilities 19 9,604 11,193 3,360 - - -

Long-term portion of share

subscription payable 42,786 42,020 - - - -

Employee benefit obligations 20 108,640 100,473 107,718 11,121 20,371 16,367

Total non-current liabilities 10,785,391 9,537,206 10,756,659 4,947,893 5,175,901 4,010,651

Total liabilities 17,790,616 16,904,157 17,218,160 11,420,254 11,061,416 9,698,971

30 September 30 September


Consolidated

(in thousand Baht)

Separate



4



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Statement of financial positionThoresen Thai agencies Public company limited and its Subsidiariesas at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)


Thoresen Thai Agencies Public Company Limited and its SubsidiariesStatement of financial positionAs at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

1 October 1 OctoberLiabilities and equity Note 2013 2012 2011 2013 2012 2011


EquityShare capital

Authorised share capital 21 1,132,807 783,004 833,004 1,132,807 783,004 833,004

Issued and paid-up share capital 991,838 708,004 708,004 991,838 708,004 708,004

Premium on ordinary shares 5,232,142 1,540,410 1,540,410 5,232,142 1,540,410 1,540,410

Retained earnings

Appropriated - legal reserves 22 93,500 93,500 93,500 93,500 93,500 93,500

Unappropriated 11,108,377 16,188,595 21,037,030 12,079,974 12,674,629 15,928,611

Other components of equity 514,935 149,467 430,428 (17,850) (13,937) (10,696)

Equity attributable to owners

of the Company 17,940,792 18,679,976 23,809,372 18,379,604 15,002,606 18,259,829

Non-controlling interests 7,359,981 5,213,092 5,291,450 - - -

Total equity 25,300,773 23,893,068 29,100,822 18,379,604 15,002,606 18,259,829

Total liabilities and equity 43,091,389 40,797,225 46,318,982 29,799,858 26,064,022 27,958,800

(in thousand Baht)

30 September 30 September

financial statements financial statements

SeparateConsolidated


5


Annual Report 2013

79

Thoresen Thai Agencies Public Company Limited and its SubsidiariesStatement of income

For the years that ended on 30 September 2013 and 2012 (restated)

Note 2013 2012 2013 2012

(restated)

Revenues

Revenues from services

Freight charges 4,746,612 3,528,456 - -

Offshore service income 8,243,401 5,721,167 - -

Service and commission income 332,336 316,079 - -

Revenues from sales 5,140,740 6,781,505 - -

Total revenues 24 18,463,089 16,347,207 - -

Costs

Cost of providing services

Vessel operating expenses 4,742,727 3,188,767 - -

Offshore service expenses 6,668,705 4,432,089 - -

Service and commission expenses 144,128 109,042 - -

Cost of sales 4,385,064 6,067,732 - -

Total costs 15,940,624 13,797,630 - -

Gross profits 2,522,465 2,549,577 - -

Other operating income 25 312,624 315,369 476,538 1,421,585

Profits before expenses 2,835,089 2,864,946 476,538 1,421,585

Selling expenses 280,705 362,479 - -

Administrative expenses 2,055,319 1,890,679 318,511 380,671

Impairment charges and write-offs 4,894,819 4,277,362 412,276 3,576,605

Total expenses 7,230,843 6,530,520 730,787 3,957,276

Operating losses 24 (4,395,754) (3,665,574) (254,249) (2,535,691)

Share of profits in associates and joint ventures 13, 14 254,662 129,426 - -

Losses before finance costs

and income tax expenses (4,141,092) (3,536,148) (254,249) (2,535,691)

Finance costs (509,625) (753,858) (340,406) (364,290)

Losses before income tax expenses (4,650,717) (4,290,006) (594,655) (2,899,981)

Income tax expenses (217,970) (165,880) - -

Net losses for the year (4,868,687) (4,455,886) (594,655) (2,899,981)

Net losses attributable to:

Owners of the Company (5,080,218) (4,494,434) (594,655) (2,899,981)

Non-controlling interests 211,531 38,548 - -

(4,868,687) (4,455,886) (594,655) (2,899,981)

Losses per share

Basic losses per share (in Baht) 28 (5.86) (6.35) (0.69) (4.10)

(in thousand Baht)

Consolidated Separate



6

Statement of incomeThoresen Thai agencies Public company limited and its Subsidiaries




Annual Report 2013

80

Thoresen Thai Agencies Public Company Limited and its SubsidiariesStatement of comprehensive income


2013 2012 2013 2012

(restated)


Other comprehensive income (expenses)

Translation adjustments for investments

in subsidiaries 473,682 (274,517) - -

Net change in fair value of available-for-sale

investments (27,703) 14,570 (3,913) (3,241)

Share-based payment reserves 448 366 - -

Other comprehensive income (expenses)

for the year 446,427 (259,581) (3,913) (3,241)

Total comprehensive income (expenses)

for the year (4,422,260) (4,715,467) (598,568) (2,903,222)

Total comprehensive income (expenses)

attributable to:

Owners of the Company (4,714,750) (4,699,978) (598,568) (2,903,222)

Non-controlling interests 292,490 (15,489) - -

(4,422,260) (4,715,467) (598,568) (2,903,222)

(in thousand Baht)




7

Statement of comprehensive incomeThoresen Thai agencies Public company limited and its SubsidiariesFor the years that ended on 30 September 2013 and 2012 (restated)

the accompanying notes are an integral part of these financial statements. the accompanying notes are an integral part of these financial statements.


Annual Report 2013

81

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its S

ubsi

diar

ies

Stat

emen

t of c

hang

es in

equ

ityFo

r th

e ye

ars

that

end

ed o

n 30

Sep

tem

ber

2013

and

201

2 (r

esta

ted)

and

1 O

ctob

er 2

011

(res

tate

d)

Con

solid

ated

fina

ncia

l sta

tem

ents

Oth

er c

ompo

nent

s of

equ

ity

Cap

ital

Fair

val

uere

serv

es -

Cha

nge

in

Tran

slat

ion

chan

ge in

adju

stm

ent

pare

nt's

Sh

are-

Equi

ty

Issu

ed a

ndP

rem

ium

Ret

aine

d ea

rnin

gsad

just

men

tsav

aila

ble-

aris

ing

from

owne

rshi

pba

sed

Tota

l oth

erat

trib

utab

le to

Non

-

paid

-up

shar

eon

ord

inar

yLe

gal

for

inve

stm

ents

for-

sale

busi

ness

inte

rest

s in

paym

ent

com

pone

nts

owne

rs o

fco

ntro

lling

Tota

l

Not

e c

apita

lsh

ares

rese

rves

Una

ppro

pria

ted

in s

ubsi

diar

ies

inve

stm

ents

rest

ruct

urin

gsu

bsid

iari

esre

serv

esof

equ

ityth

e C

ompa

nyin

tere

sts

equi

ty

(in th

ousa

nd B

aht)

Bal

ance

as

at 1

Oct

ober

201

1 -

as r

epor

ted

708,

004

1,

540,

410

93

,500

21

,393

,689

(782

,154

)

(4,7

17)

(50,

030)

2,56

4,20

7

-

1,72

7,30

6

25,4

62,9

09

5,35

3,06

2

30,8

15,9

71

Impa

ct o

f cha

nges

in a

ccou

ntin

g po

licie

s 3

--

-(3

56,6

59)

(1,2

96,8

78)

--

--

(1,2

96,8

78)

(1

,653

,537

)

(61,

612)

(1,7

15,1

49)

Bal

ance

at 1

Oct

ober

201

1 -

rest

ated

708,

004

1,

540,

410

93

,500

21

,037

,030

(2,0

79,0

32)

(4,7

17)

(50,

030)

2,56

4,20

7

-

430,

428

23,8

09,3

72

5,29

1,45

0

29,1

00,8

22

T ran

sact

ions

with

ow

ners

, rec

orde

d di

rect

ly in

equ

ity

Dis

trib

utio

ns to

ow

ners

of t

he C

ompa

nyD

ivid

ends

to o

wne

rs o

f the

Com

pany

29-

--

(354

,001

)

-

--

--

-(3

54,0

01)

(3,4

74)

(3

57,4

75)

Cha

nge

in p

aren

t's o

wne

rshi

p in

tere

sts

in s

ubsi

diar

ies

--

--

--

-(7

5,41

7)

-

(75,

417)

(75,

417)

(5

9,39

5)

(1

34,8

12)

Tota

l dis

trib

utio

ns to

ow

ners

of t

he C

ompa

ny-

--

(354

,001

)

--

-(7

5,41

7)

-(7

5,41

7)

(4

29,4

18)

(62,

869)

(492

,287

)

Com

preh

ensi

ve in

com

e (e

xpen

ses)

for

the

year

Net

loss

es fo

r th

e ye

ar-

--

(4,4

94,4

34)

-

--

--

-(4

,494

,434

)

38,5

48

(4,4

55,8

86)

Oth

er c

ompr

ehen

sive

inco

me

(exp

ense

s)-

--

-(2

20,4

80)

14

,570

--

366

(2

05,5

44)

(205

,544

)

(5

4,03

7)

(2

59,5

81)

Tota

l com

preh

ensi

ve in

com

e (e

xpen

ses)

for

the

year

--

-(4

,494

,434

)

(220

,480

)

14,5

70

-

-36

6

(205

,544

)

(4,6

99,9

78)

(1

5,48

9)

(4

,715

,467

)

Bal

ance

as

at 3

0 Se

ptem

ber

2012

708,

004

1,

540,

410

93

,500

16

,188

,595

(2,2

99,5

12)

9,85

3

(50,

030)

2,48

8,79

0

36

6

149,

467

18,6

79,9

76

5,21

3,09

2

23,8

93,0

68

Bal

ance

at 3

0 Se

ptem

ber

2012

- a

s re

port

ed70

8,00

4

1,54

0,41

0

93,5

00

16,4

20,8

54

(8

99,3

16)

9,

853

(5

0,03

0)

2,

472,

985

366

1,

533,

858

20

,296

,626

5,

314,

084

25

,610

,710

Impa

ct o

f cha

nges

in a

ccou

ntin

g po

licie

s 3

--

-(2

32,2

59)

(1,4

00,1

96)

--

15,8

05

-

(1,3

84,3

91)

(1

,616

,650

)

(100

,992

)

(1

,717

,642

)

Bal

ance

at 3

0 Se

ptem

ber

2012

- r

esta

ted

708,

004

1,

540,

410

93

,500

16

,188

,595

(2,2

99,5

12)

9,85

3

(50,

030)

2,48

8,79

0

36

6

149,

467

18,6

79,9

76

5,21

3,09

2

23,8

93,0

68

Tran

sact

ions

with

ow

ners

, rec

orde

d di

rect

ly in

equ

ity

Con

trib

utio

ns b

y ow

ners

of t

he C

ompa

nyIs

sue

of o

rdin

ary

shar

es

2128

3,83

4

3,69

1,73

2

--

--

--

--

3,97

5,56

6

-

3,97

5,56

6

Div

iden

ds to

ow

ners

of a

sub

sidi

ary

29-

--

--

--

--

--

(9,2

16)

(9

,216

)

Con

trib

utio

n fr

om n

on-c

ontr

ollin

g sh

areh

olde

rs o

f a s

ubsi

diar

y -

--

--

--

--

--

1,86

3,61

5

1,86

3,61

5

Tota

l con

trib

utio

ns b

y ow

ners

of t

he C

ompa

ny28

3,83

4

3,69

1,73

2

--

--

--

--

3,97

5,56

6

1,85

4,39

9

5,82

9,96

5

Com

preh

ensi

ve in

com

e (e

xpen

ses)

for

the

year

Net

loss

es fo

r th

e ye

ar-

--

(5,0

80,2

18)

-

--

--

-(5

,080

,218

)

211,

531

(4,8

68,6

87)

Oth

er c

ompr

ehen

sive

inco

me

(exp

ense

s)-

--

-39

2,72

3

(2

7,70

3)

-

-44

8

365,

468

365,

468

80

,959

44

6,42

7

Tota

l com

preh

ensi

ve in

com

e (e

xpen

ses)

for

the

year

--

-(5

,080

,218

)

392,

723

(2

7,70

3)

-

-44

8

365,

468

(4,7

14,7

50)

29

2,49

0

(4

,422

,260

)

Bal

ance

as

at 3

0 Se

ptem

ber

2013

991,

838

5,

232,

142

93

,500

11

,108

,377

(1,9

06,7

89)

(17,

850)

(50,

030)

2,48

8,79

0

81

4

514,

935

17,9

40,7

92

7,35

9,98

1

25,3

00,7

73

The

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

8

Stat

emen

t of c

hang

es in

equ

ity

Thor

esen

Tha

i age

ncie

s P

ublic

com

pany

lim

ited

and

its

Subs

idia

ries

For

the

year

s th

at e

nded

on

30 S

epte

mbe

r 20

13 a

nd 2

012

(res

tate

d) a

nd 1

Oct

ober

201

1 (r

esta

ted)

the

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.


Annual Report 2013

82

Stat

emen

t of c

hang

es in

equ

ity

Thor

esen

Tha

i age

ncie

s P

ublic

com

pany

lim

ited

and

its

Subs

idia

ries

For

the

year

s th

at e

nded

on

30 S

epte

mbe

r 20

13 a

nd 2

012

(res

tate

d)

the

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its S

ubsi

diar

ies

Stat

emen

t of c

hang

es in

equ

ity

For

the

year

s th

at e

nded

on

30 S

epte

mbe

r 20

13 a

nd 2

012

Issu

ed a

ndP

rem

ium

Fair

val

ue c

hang

e in

Tota

l oth

er

paid

-up

shar

eon

ord

inar

yLe

gal

avai

labl

e-fo

r-sa

leco

mpo

nent

s of

Tota

l

Not

e c

apita

lsh

ares

rese

rves

Una

ppro

pria

ted

inve

stm

ents

equi

tyeq

uity

Bal

ance

at 1

Oct

ober

201

1 70

8,00

4

1,54

0,41

0

93,5

00

15,9

28,6

11

(1

0,69

6)

(1

0,69

6)

18

,259

,829

Tran

sact

ions

with

ow

ners

, rec

orde

d di

rect

ly in

equ

ity

Dis

trib

utio

ns to

ow

ners

of t

he C

ompa

nyD

ivid

ends

to o

wne

rs o

f the

Com

pany

29-

--

(354

,001

)

-

-(3

54,0

01)

T ota

l dis

trib

utio

ns to

ow

ners

of t

he C

ompa

ny-

--

(354

,001

)

-

-(3

54,0

01)

Com

preh

ensi

ve e

xpen

ses

for

the

year

Net

loss

es fo

r th

e ye

ar-

--

(2,8

99,9

81)

-

-(2

,899

,981

)

Oth

er c

ompr

ehen

sive

exp

ense

s-

--

-(3

,241

)

(3,2

41)

(3

,241

)

T ota

l com

preh

ensi

ve e

xpen

ses

for

the

year

--

-(2

,899

,981

)

(3

,241

)

(3

,241

)

(2,9

03,2

22)

Bal

ance

as

at 3

0 Se

ptem

ber

2012

708,

004

1,

540,

410

93

,500

12

,674

,629

(13,

937)

(13,

937)

15,0

02,6

06

Bal

ance

at 3

0 Se

ptem

ber

2012

708,

004

1,

540,

410

93

,500

12

,674

,629

(13,

937)

(13,

937)

15,0

02,6

06

T ran

sact

ions

with

ow

ners

, rec

orde

d di

rect

ly in

equ

ity

Con

trib

utio

ns b

y ow

ners

of t

he C

ompa

nyIs

sue

of o

rdin

ary

shar

es

2128

3,83

4

3,

691,

732

--

--

3,97

5,56

6

Tota

l con

trib

utio

ns b

y ow

ners

of t

he C

ompa

ny28

3,83

4

3,69

1,73

2

--

--

3,97

5,56

6

Com

preh

ensi

ve e

xpen

ses

for

the

year

Net

loss

es fo

r th

e ye

ar-

--

(594

,655

)

-

-(5

94,6

55)

Oth

er c

ompr

ehen

sive

exp

ense

s-

--

-(3

,913

)

(3,9

13)

(3

,913

)

T ota

l com

preh

ensi

ve e

xpen

ses

for

the

year

--

-(5

94,6

55)

(3,9

13)

(3,9

13)

(5

98,5

68)

Bal

ance

as

at 3

0 Se

ptem

ber

2013

991,

838

5,

232,

142

93

,500

12

,079

,974

(17,

850)

(17,

850)

18,3

79,6

04

Ret

aine

d ea

rnin

gs

(in th

ousa

nd B

aht)

Oth

er c

ompo

nent

s of

equ

ity

Sepa

rate

fina

ncia

l sta

tem

ents

The

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

9


Annual Report 2013

83

Thoresen Thai Agencies Public Company Limited and its SubsidiariesStatement of cash flows


Note 2013 2012 2013 2012

(restated)

Cash flows from operating activities


Adjustments for:

Depreciation 16 1,484,461 1,441,412 27,567 29,343

Amortisation on deferred dry-docking expenses 270,221 264,526 - -

Amortisation on intangible assets 110,747 114,937 21,545 26,736

Amortisation on prepayments 3,432 3,571 - -

Bad and doubtful debts expense 8 83,785 96,055 - -

Reversal of allowance for doubtful accounts

and provision for unrecoverable value added tax (19,771) (52,486) - -

Impairment on receivables from related parties and

loans to related parties 10,123 908,081 - 2,731,526

Allowance for impairment on inventories 243,294 107,639 - -

Net impairment on investments in subsidiaries 26 - - 412,073 836,872

Impairment on investments in an associate and a joint venture 26 120,245 - 203 -

Impairment on goodwill 26 516,031 2,318,666 - -

Impairment and write-off on property, plant, and equipment 3,925,266 904,414 - -

Impairment on intangible assets 79,839 8,207 - 8,207

Finance costs 509,625 753,858 340,406 364,290

Income tax expenses 217,970 165,880 - -

Losses from write-off on withholding taxes - 16,598 - -

Net (gains) losses on disposals of property, plant,

and equipment, and intangible assets 25 (45,969) 23,472 - (617)

Net gains on compensation for termination of

property, plant, and equipment contract 25 (14,882) - - -

Dividend income from short-term investments 25 (1,795) (5,845) (1,795) (5,845)

Dividend income from associates 25 - - (7,350) -

Dividend income from subsidiaries 25 - - (307,612) (1,118,973)

Gains on convertible bonds cancellation - (841) - (841)

Net (gains) losses on disposals of investments in

a subsidiary and an associate 25 - 5 (144) -

Net (gains) losses on disposals of short-term investments 7, 25 (32,284) 4,904 (8,224) 4,904

Share of profits of associates and joint ventures 13, 14 (254,662) (129,426) - -

Unrealised gains on exchange rates from

short-term investments and loans (46,704) (80,668) (65,234) (54,707)

Realised (gains) losses on exchange rates from loans and

convertible bonds - (15,440) (3,838) 9,891

Exchange difference from translation of overseas companies 97,714 (36,754) - -

Gains from settlement of cross currency and

interest rate swap agreements 25 (11,653) (6,998) (11,653) (598)

Expenses for share based payment 448 366 - -

2,376,794 2,348,247 (198,711) (69,793)



(in thousand Baht)


10

Statement of cash flowsThoresen Thai agencies Public company limited and its Subsidiaries




Annual Report 2013

84



Note 2013 2012 2013 2012

(restated)

Cash flows from operating activities

Changes in operating assets and liabilities

Trade accounts receivable (786,804) (5,645) - -

Other accounts receivable (15,749) 212,882 - -

Receivables from related parties (536,918) 15,164 76,780 (157,982)

Inventories 22,283 561,521 - -

Vessel supplies and spare parts 196,146 (247,235) - -

Prepayments (39,770) 2,093 107 (286)

Other current assets (63,047) (194,669) (484) 35,332

Other non-current assets (14,673) 135,518 (452) 1,430

Trade accounts payable - others 91,116 440,971 (9) (17,133)

Payables to related parties 2,578 4,571 (10,193) (111)

Other accounts payable 1,239 (53,349) - (89)

Advances from customers (47,073) (139,101) - -

Accrued income taxes (17,321) (34,131) - -

Accrued expenses 524,875 (13,206) 16,350 (9,292)

Other current liabilities 54,306 (91,004) 29,159 7,400

Employee benefit obligations 8,317 (67,134) (9,250) 4,004

Cash generated from (used in) operating activities 1,756,299 2,875,493 (96,703) (206,520)

Finance costs paid (504,752) (685,156) (221,628) (227,043)

Income taxes paid (108,559) (221,380) - -

Net cash from (used in) operating activities 1,142,988 1,968,957 (318,331) (433,563)

Cash flows from investing activities

Purchases of property, plant, and equipment

and intangible assets (1,651,519) (1,453,847) (23,179) (1,547)

Payments for dry-docking (760,214) (235,343) - -

Payments for short-term loans to related parties (9,209) (125,666) (1,314,892) (452,440)

Payments for investments in subsidiaries,

associates, and joint ventures (1,122,228) (87,639) (2,085,824) -

Dividends received from short-term investments 1,795 5,845 1,795 5,845

Dividends received from subsidiaries - - 7,612 -

Dividends received from associates 36,855 31,668 7,350 25,015

Dividends received from joint ventures 119,644 47,896 - -

Proceeds from disposals of property, plant, and

equipment and intangible assets 367,501 9,044 - 682

Proceeds from short-term investments 313,671 170,955 32,951 195,674

Proceeds from disposals of investments

in a subsidiary and an associate - 584 36,500 -

Proceeds from settlement of short-term loans

to related parties - - 248,790 77,311

Proceeds from settlement of business co-operation

to a related party 31,251 30,930 - -

Proceeds from settlement of long-term loans

to related parties 750 - 750 -

Net cash used in investing activities (2,671,703) (1,605,573) (3,088,147) (149,460)



(in thousand Baht)


11

Statement of cash flowsThoresen Thai agencies Public company limited and its SubsidiariesFor the years that ended on 30 September 2013 and 2012 (restated)



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Statement of cash flowsThoresen Thai agencies Public company limited and its Subsidiaries




Note 2013 2012 2013 2012

(restated)

Cash flows from financing activities

Proceeds from short-term loans from related parties - - - 269,384

Proceeds from long-term loans 1,037,951 2,941,975 - 1,200,000

Net proceeds of short-term loans (96,715) (147,668) - -

Repayments of short-term loans from related parties - (4,500) (11,662) -

Repayments of long-term loans and finance lease liabilities (978,010) (1,879,533) (40,000) -

Payments for convertible bond redemption - (1,130,281) - (1,130,281)

Payments for convertible bond cancellation - (106,088) - (106,088)

Dividends paid to shareholders (9,216) (357,481) (1) (354,007)

Proceeds from increase of share capital 3,975,566 - 3,975,566 -

Proceeds from increase of investment from non-controlling interests

of a subsidiary 1,464,401 - - -

Net proceeds from settlement of cross currency

and interest rate swap agreements 11,653 6,998 11,653 598

Net cash from (used in) financing activities 5,405,630 (676,578) 3,935,556 (120,394)

Net increase (decrease) in cash and cash equivalents 3,876,915 (313,194) 529,078 (703,417)

Cash and cash equivalents as at 1 October 3,582,194 3,799,848 123,271 765,715

Effect of exchange rate changes on balances

held in foreign currencies (12,862) 95,540 (1,372) 60,973

Cash and cash equivalents as at 30 September 7,446,247 3,582,194 650,977 123,271

Cash and cash equivalents as at 30 September comprise:

Cash and cash equivalents 7,458,387 3,589,424 650,977 123,271

Bank overdrafts (12,140) (7,230) - -

7,446,247 3,582,194 650,977 123,271

Non-cash transactions

Unpaid liabilities from dry-docking 21,525 445 - -

Unpaid liabilities from purchase of property, plant,

and equipment and intangible assets 12,085 11,684 - 1,121

Offsetting dividend income with short-term loans from subsidiaries - - - 1,093,958

Offsetting dividend income with long-term loans to a subsidiary - - 300,000 -

Dividend payables 4,073 4,073 4,073 4,073

Additional investment in a subsidiary by offsetting

with short-term loans to a subsidiary - - 681,051 4,060,122

Settlement of short-term loan from related parties by offseting

with short-term and long-term loan to related parties - - 271,487 836,725

Private placement receivables 399,214 - - -


(in thousand Baht)




12



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Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

13

Note Contents 1 General information 2 Basis of preparation of the financial statements3 Change in accounting policy 4 Significant accounting policies5 Related parties 6 Cash and cash equivalents7 Short-term investments 8 Trade accounts receivable9 Other accounts receivable10 Deferred contract costs 11 Inventories 12 Investments in subsidiaries13 Investments in associates14 Investments in joint ventures15 Goodwill 16 Property, plant, and equipment17 Intangible assets 18 Other non-current assets19 Interest-bearing liabilities20 Employee benefit obligations21 Share capital and warrants22 Legal reserves 23 Share-based payment 24 Segment information 25 Other operating income 26 Expenses by nature 27 Income tax expense 28 Losses per share 29 Dividends 30 Promotional privileges 31 Financial instruments 32 Commitments and contingent liabilities33 Events after the reporting period34 Thai Financial Reporting Standards (“TFRS”) not yet adopted

Notes of financial Statement Thoresen Thai agencies Public company limited and its Subsidiaries


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These notes form an integral part of the financial statements. The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 27 November 2013.

1 General information Thoresen Thai Agencies Public Company Limited (the “Company”) is incorporated in Thailand and has its registered office at 26/26-27 Orakarn Building, 8th Floor, Soi Chidlom, Ploenchit Road, Lumpinee, Pathumwan, Bangkok 10330. The Company was listed on the Stock Exchange of Thailand (the “SET”) on 25 September 1995. The principal business operations of the Company and its subsidiaries (the “Group”) involve the ownership of dry bulk vessels, certain shipping services, offshore oil and gas services, production and sales of fertilisers, coal trading, and warehouse and logistics services. The Group’s activities can be separated into four main categories, namely transport, infrastructure, energy, and the holding company. Details of the Company’s subsidiaries, associates, and joint ventures as at 30 September 2013 and 2012 are given in notes 12, 13, and 14.

2 Basis of preparation of the financial statements

(a) Statement of compliance The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”); guidelines promulgated by the Federation of Accounting Professions (“FAP”); and applicable rules and regulations of the Thai Securities and Exchange Commission. From 1 October 2012, the Group has adopted revised Thai Accounting Standard (“TAS”) No. 21 (revised 2009) - The Effects of Changes in Foreign Exchange Rates. The adoption of this revised standard has resulted in changes in the Group’s accounting policies. The effects of this change are disclosed in note 3. In addition to the above revised TAS, as at 30 September 2013, the FAP issued a number of other new and revised TFRS and announcements which are effective for financial statements beginning on or after 1 October 2013 and have not been adopted in the preparation of these financial statements. Those new and revised TFRS and announcements that are relevant to the Group’s operations are disclosed in note 34.

(b) Basis of measurement The financial statements have been prepared on the historical cost basis except as stated in the accounting policies.

(c) Functional and presentation currency

The financial statements are presented in Thai Baht, which is the Company’s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest thousand unless otherwise stated.


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(d) Use of estimates and judgements

The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income, and expenses. Actual results may differ from estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes: Note 12, 15, and 16 Key assumptions used in discounted cash flow projections Note 20 Measurement of defined benefit obligations Note 23 Measurement of share-based payments Note 31 Valuation of financial instruments Note 32 Commitments and contingent liabilities

3 Change in accounting policy

Accounting for the effects of changes in foreign exchange rates

From 1 October 2012, consequent to the adoption of revised TAS as set out in note 2, the Group has adopted TAS 21 (revised 2009) - The Effects of Changes in Foreign Exchange Rates. The principal change introduced by TAS 21 is the introduction of the concept of functional currency, which is defined as the currency of the primary economic environment in which the entities of the Group operate. TAS 21 requires each entity to determine its functional currency and translate foreign currency items into its functional currency, recognising the effects of that translation in accordance with the provisions of TAS 21. Foreign currencies are defined by TAS 21 as all currencies other than the entity’s functional currency. Management has determined that the functional currency of the Company is Thai Baht and that the adoption of TAS 21 from 1 October 2012 has had no impact on the separate financial statements. However, in the consolidated financial statements, the effects of the change are recognised retrospectively. The impact of the adoption of TAS 21 on the consolidated financial statements is as follows:


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Consolidated financial statements 30 September 30 September

2012 2012 Before After restatement Reclassification* Restatement restatement

(in thousand Baht) Assets Current assets Cash and cash equivalents 3,585,007 - 4,417 3,589,424Short-term investments 802,920 - - 802,920Trade accounts receivable 2,663,448 - 1,721 2,665,169Other accounts receivable 676,009 (236,728) (12,787) 426,494 Receivables from related parties 62,062 - - 62,062Current portion of long-term receivables from a related party - 31,251 - 31,251Current portion of long-term loans to related parties 34,574 (31,251) - 3,323Deferred contract costs - 277,459 - 277,459Inventories 1,601,787 - - 1,601,787Vessel supplies and spare parts 615,421 - (4,838) 610,583Prepayment 139,556 - (72) 139,484Other current assets 327,074 (44,088) 23,685 306,671Total current assets 10,507,858 (3,357) 12,126 10,516,627 Non-current assets Investment in associates 2,537,200 - 62,351 2,599,551Investment in joint ventures 1,256,472 - - 1,256,472Goodwill 1,498,794 - (19,798) 1,478,996Property, plant, and equipment 25,768,943 - (1,784,406) 23,984,537Intangible assets 498,283 - (777) 497,506Other non-current assets 492,877 (26,018) (3,323) 463,536Total non-current assets 32,052,569 (26,018) (1,745,953) 30,280,598 Total assets 42,560,427 (29,375) (1,733,827) 40,797,225


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(in thousand Baht) Liabilities and equity Current liabilities Bank overdrafts 7,230 - - 7,230 Short-term loans 1,263,004 - - 1,263,004 Trade accounts payable 1,270,299 - (773) 1,269,526 Other accounts payable 64,550 - (57) 64,493 Payables to related parties 11,632 - - 11,632 Advances from customers 225,776 - - 225,776 Current portion of long-term loans 3,322,585 (3,357) (963) 3,318,265 Current portion of finance lease liabilities 5,373 - - 5,373 Current portion of share subscription payable to subsidiaries 33,823 - (31) 33,792Accrued income taxes 63,198 - (372) 62,826 Accrued expenses 881,517 - (962) 880,555Other current liabilities 219,457 - 5,022 224,479Total current liabilities 7,368,444 (3,357) 1,864 7,366,951 Non-current liabilities Long-term loans 5,431,453 (26,018) (17,445) 5,387,990 Bonds, net 3,995,530 - - 3,995,530 Finance lease liabilities 11,410 - (217) 11,193 Long-term portion of share subscription payable to subsidiaries 42,207 - (187) 42,020 Employee benefit obligations 100,673 - (200) 100,473 Total non-current liabilities 9,581,273 (26,018) (18,049) 9,537,206 Total liabilities 16,949,717 (29,375) (16,185) 16,904,157 Equity Share capital Authorised share capital 783,004 - - 783,004 Issued and paid-up share capital 708,004 - - 708,004Premium on ordinary shares 1,540,410 - - 1,540,410 Retained earnings Appropriated - legal reserves 93,500 - - 93,500 Unappropriated 16,420,854 - (232,259) 16,188,595 Other components of equity 1,533,858 - (1,384,391) 149,467 Equity attributable to owners of the Company 20,296,626 - (1,616,650) 18,679,976 Non-controlling interests 5,314,084 - (100,992) 5,213,092 Total equity 25,610,710 - (1,717,642) 23,893,068 Total liabilities and equity 42,560,427 (29,375) (1,733,827) 40,797,225


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2012 2012 Before After restatement Restatement restatement

(in thousand Baht) Revenues Revenues from services Freight charges 3,527,164 1,292 3,528,456 Offshore service income 5,714,142 7,025 5,721,167 Service and commission income 316,079 - 316,079 Revenues from sales 6,781,505 - 6,781,505 Total revenues 16,338,890 8,317 16,347,207 Cost Cost of providing services Vessel operating expenses 3,286,241 (97,474) 3,188,767 Offshore service expenses 4,511,569 (79,480) 4,432,089 Service and commission expenses 109,042 - 109,042Cost of sales 6,067,732 - 6,067,732 Total costs 13,974,584 (176,954) 13,797,630 Gross profits 2,364,306 185,271 2,549,577 Other operating income 372,340 (56,971) 315,369 Profit before expenses 2,736,646 128,300 2,864,946 Selling expenses 362,479 - 362,479 Administrative expenses 1,898,448 (7,769) 1,890,679 Impairment charges and write-offs 4,277,362 - 4,277,362 Total expenses 6,538,289 (7,769) 6,530,520 Operating losses (3,801,643) 136,069 (3,665,574) Share of profits in associates and joint ventures 129,426 - 129,426 Losses before finance costs and income tax expenses (3,672,217) 136,069 (3,536,148) Finance costs (757,772) 3,914 (753,858) Losses before income tax expenses (4,429,989) 139,983 (4,290,006) Income tax expenses (166,964) 1,084 (165,880) Net losses for the year (4,596,953) 141,067 (4,455,886)


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2012 2012 Before After restatement Restatement restatement

(in thousand Baht) Net losses attributable to : Owner of the Company (4,618,833) 124,399 (4,494,434) Non-controlling interests 21,880 16,668 38,548 (4,596,953) 141,067 (4,455,886) Other comprehensive incomes (expenses): Translation adjustments for investments in subsidiaries (130,956) (143,561) (274,517) Net change in fair value of available-for-sale

investments 14,570 - 14,570 Share-based payment reserves 366 - 366 Other comprehensive income (expenses) for the year (116,020) (143,561) (259,581) Total comprehensive income (expenses) for the year (4,712,973) (2,494) (4,715,467) Total comprehensive incomes (expenses) attributable to: Owners of the Company (4,721,059) 21,081 (4,699,978) Non-controlling interests 8,086 (23,575) (15,489) (4,712,973) (2,494) (4,715,467) Losses per share Basic losses per share (in Baht) (6.52) 0.17 (6.35)


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20

Consolidated financial statements 1 October 1 October


(in thousand Baht) Assets Current assets Cash and cash equivalents 3,797,378 - 4,762 3,802,140 Short-term investments 983,932 - - 983,932 Trade accounts receivable 2,719,103 - 8,453 2,727,556 Other accounts receivable 717,132 5,775 4,257 727,164 Receivables from related parties 291,060 - - 291,060 Current portion of long-term receivables from a related party 30,930 - - 30,930 Current portion of long-term loans to related parties 3,323 - - 3,323 Inventories 2,270,947 - - 2,270,947 Vessel supplies and spare parts 375,145 - (4,196) 370,949Prepayment 142,633 - 352 142,985 Other current assets 304,184 (5,775) 39,272 337,681Total current assets 11,635,767 - 52,900 11,688,667 Non-current assets Long-term portion of receivables from a related party 31,251 - - 31,251 Long-term loans to related parties 554,780 - - 554,780 Investment in associates 3,675,470 - 83,381 3,758,851 Investment in joint ventures 63,893 - - 63,893 Goodwill 3,817,460 - (16,366) 3,801,094 Property, plant, and equipment 27,002,184 - (1,794,588) 25,207,596 Intangible assets 607,527 - (357) 607,170 Other non-current assets 644,060 (33,427) (4,953) 605,680Total non-current assets 36,396,625 (33,427) (1,732,883) 34,630,315 Total assets 48,032,392 (33,427) (1,679,983) 46,318,982


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Consolidated financial statements 1 October 1 October


(in thousand BahtLiabilities and equity Current liabilities Bank overdrafts 2,292 - - 2,292 Short-term loans 1,410,277 - - 1,410,277 Trade accounts payable 838,130 - (575) 837,555 Other accounts payable 139,149 - 181 139,330 Payables to related parties 7,173 - - 7,173 Advances from customers 375,787 - 47 375,834 Short-term loan from related parties 4,500 - - 4,500 Current portion of bonds 1,205,741 - - 1,205,741 Current portion of long-term loans 1,062,215 - (4,631) 1,057,584Current portion of finance lease

liabilities 4,272 - - 4,272 Current portion of employee benefit

obligations 61,031 - (223) 60,808 Accrued income taxes 151,282 - 2,211 153,493Accrued expenses 887,365 - 1,391 888,756Other current liabilities 268,758 - 45,128 313,886 Total current liabilities 6,417,972 - 43,529 6,461,501 Non-current liabilities Long-term loans 6,693,963 (33,427) (9,239) 6,651,297 Bonds, net 3,994,284 - - 3,994,284 Finance lease liabilities 3,880 - (520) 3,360 Employee benefit obligations 106,322 - 1,396 107,718 Total non-current liabilities 10,798,449 (33,427) (8,363) 10,756,659 Total liabilities 17,216,421 (33,427) 35,166 17,218,160

Equity Share capital Authorised share capital 833,004 - - 833,004 Issued and paid-up share capital 708,004 - - 708,004Premium on ordinary shares 1,540,410 - - 1,540,410Retained earnings Appropriated - legal reserves 93,500 - - 93,500 Unappropriated 21,393,689 - (356,659) 21,037,030Other components of equity 1,727,306 - (1,296,878) 430,428 Equity attributable to owners of the Company 25,462,909 - (1,653,537) 23,809,372Non-controlling interests 5,353,062 - (61,612) 5,291,450Total equity 30,815,971 - (1,715,149) 29,100,822 Total liabilities and equity 48,032,392 (33,427) (1,679,983) 46,318,982

* Certain accounts in the consolidated statement of financial position as at 30 September 2012 and 2011

which are included in the 2013 financial statements for comparative purposes, have been reclassified to conform to the presentation in the financial statements for the year that ended on 30 September 2013. Those reclassifications have been made, because, in the opinion of management, the new classification is more appropriate to the Group’s business.

)


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4 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, except as explained in note 3, which addresses changes in accounting policies.

(a) Basis of consolidation

The consolidated financial statements relate to the Company and its subsidiaries, associates, and jointly-controlled entities (together referred to as the “Group”) and the Group’s interests in associates and jointly-controlled entities. Business combinations The Group applies the acquisition method for all business combinations other than those with entities under common control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgment is applied in determining the acquisition date and determining whether control is transferred from one party to another. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses. A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Transaction costs that the Group incurs in connection with a business combination, such as legal fees, and other professional and consulting fees are expensed as incurred. Acquisitions from entities under common control Business combinations of entities or businesses under common control are accounted for using a method similar to the pooling of interest method and in accordance with the guideline issued in 2009 by the FAP.


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Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to non-controlling interests in a subsidiary are allocated to non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. Loss of control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the statement of income. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale investment depending on the level of influence retained. Associates and jointly-controlled entities (equity-accounted investees) Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Jointly-controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Investments in associates and jointly-controlled entities are accounted for in the consolidated financial statements using the equity method (equity-accounted investees) and are recognised initially at cost. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the statement of income and other comprehensive income of equity accounted investees after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s carrying amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly-controlled entities are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.


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(b) Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currency of the Group entities at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of income. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates on the dates of the transactions. Foreign operations The assets and liabilities of foreign operations are translated to Thai Baht at the foreign exchange rates on the reporting date. Goodwill and fair value adjustments arising on the acquisition of foreign operations are stated at exchange rates on the reporting date. The revenues and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to Thai Baht at rates approximating the foreign exchange rates on the dates of the transactions. Foreign exchange differences arising on translation are recognised in other comprehensive income and presented in the translation adjustments for investments in subsidiaries in equity until disposal of the investment.

(c) Cash and cash equivalents

Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits, and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of cash and cash equivalents for the purpose of the statement of cash flows.

(d) Trade and other accounts receivable

Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

(e) Inventories Inventories are measured at the lower of cost and net realisable value. Cost is calculated using the weighted average cost principle and comprises all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale.


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(f) Vessel supplies and spare parts Vessel supplies and spare parts mainly comprise bunker, vessel supplies, and spare parts. Bunker supplies are stated at cost, determined on the first-in, first-out basis. Vessel supplies and vessel spare parts are stated at cost, determined on the weighted-average basis. Rig supplies and rig spare parts are stated at historical cost, determined on the specific identification basis. The vessel and rig supplies and spare parts purchased to replace those used during the year are reported as vessel operating expenses and offshore service expenses in the statement of income.

(g) Investments Investments in subsidiaries, associates, and jointly-controlled entities Investments in subsidiaries, associates, and jointly-controlled entities in the separate financial statements of the Company are accounted for using the cost method. Investments in associates and jointly-controlled entities in the consolidated financial statements are accounted for using the equity method. Investments in other debt and equity securities Debt securities that the Group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are stated at amortised cost, less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity. Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, are classified as available-for-sale investments. Available-for-sale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses and foreign currency differences on available-for-sale monetary items, are recognised directly in equity. Impairment losses and foreign exchange differences are recognised in the statement of income. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the statement of income. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the statement of income.

Equity securities which are not marketable are stated at cost less any impairment losses. Fixed term deposits are stated at amortised cost applying the effective interest rate method. The fair value of marketable equity securities classified as available-for-sale is determined as the quoted bid price on the reporting date. Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in the statement of income. If the Group disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.


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(h) Property, plant, and equipment Recognition and measurement Owned assets Property, plant, and equipment are stated at cost less accumulated depreciation and impairment losses (if any). Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant, and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant, and equipment. Gains and losses on disposal of an item of property, plant, and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant, and equipment, and are recognised net within other income or administrative expenses in the statement of income. Leased assets Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant, and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the statement of income. Subsequent costs The cost of replacing a part of an item of property, plant, and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant, and equipment are recognised in the statement of income as incurred. Depreciation Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.


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Depreciation is charged to the statement of income and calculated on a straight-line basis over the estimated useful lives of each component of an item of property, plant, and equipment. The estimated useful lives are as follows: Buildings and factories 20 yearsBuilding improvements 3 - 20 yearsNew build support vessels 5 - 30 yearsOcean vessels (second-hand and new) 7 - 25 yearsSecond-hand support and supply vessels 5 - 22 yearsSecond-hand tender rigs 1 - 20 yearsDry-docking 2 - 5 yearsMachinery and equipment 1 - 15 yearsFurniture, fixtures, and office equipment 2 - 10 yearsMotor vehicles 3 - 10 yearsMotor launches 10 yearsBarges 15 - 29 years No depreciation is provided on freehold land or assets under construction. Depreciation methods, useful lives, and residual values are reviewed at each financial year-end and adjusted, if appropriate.

(i) Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is reported as a separate line in the consolidated statements of financial position. Goodwill on acquisitions of associates and joint ventures is included in investments in associates and joint ventures and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units or group of cash generating units that are expected to benefit from the business combination in which the goodwill arose.

(j) Intangible assets

Computer software Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Other intangible assets Trademarks and customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Trademarks and customer relationships have a finite useful life and are carried at cost less accumulated amortisation and impairment (if any). Amortisation Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value.


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Amortisation is recognised in the statement of income and calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows:

Computer software 3 - 10 years Trademarks and customer relationships 5 - 8.2 years

Amortisation methods, useful lives, and residual values are reviewed at each financial year-end and adjusted, if appropriate.

(k) Impairment

The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statement of income. When a decline in the fair value of an available-for-sale investment has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of income even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the statement of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income. Calculation of recoverable amount The recoverable amount of available-for-sale investment is calculated by reference to the fair value. The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment

An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. For financial assets carried at amortised cost and available-for-sale investment that are debt securities, the reversal is recognised in the statement of income. For available-for-sale investment that are equity securities, the reversal is recognised in other comprehensive income. An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.


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(l) Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised over the period of the borrowings on an effective interest basis.

(m) Trade and other accounts payable

Trade and other accounts payable are stated at cost.

(n) Employee benefits

Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in the periods during which services are rendered by employees. Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The defined benefit plan is calculated by an independent actuary using the projected unit credit method. The present value of the benefit obligations is determined by discounting the estimated future cash outflows using interest rates of referred government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related retirement liabilities. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited in the statement of income. Other employee benefits The drilling companies of the Group provide retention incentives to certain employees. The entitlement to these incentives is conditional on the staff remaining in service up to the completion of the minimum entitlement service periods. The expected costs of these incentives are accrued over the period of the entitlement service periods without discount to their present value, as there is no significant impact from a discounted value calculation approach. Termination benefits Termination benefits are recognised as an expense when the Group is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.


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A liability is recognised for the amount expected to be paid under a short-term cash bonus plan, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. Share-based payments The Group operates a number of equity-settled, share-based compensation plans, under which the entity that receives services from employees compensates in part through equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted: including any market performance conditions; excluding the impact of any service and non-market performance vesting conditions (for

example, profitability, sales growth targets, and remaining an employee of the entity over a specified time period); and

excluding the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in the statement of income, with a corresponding adjustment to equity. When the options are exercised, the Group issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The grant by the Group of options over its equity instruments to the employees of the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

(o) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the Group’s obligations under the contract. The provision is measured at the present value of the lower of the expected net cost of terminating the contract and the expected net cost of continuing with the contract.


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(p) Share capital

Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

(q) Revenue

Revenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates. Rendering of services Freight charges of each voyage are generally recognised as revenues at the completion of the voyage. Where a voyage is incomplete as of the statements of financial position date, freight charges are recognised as revenue in proportion to the lapsed time of the voyage. Freight charges shown in the statement of income represent the net freight charges after deduction of related commissions. Offshore service income is recognised as services are performed based upon (a) contracted day rates and the number of operating days during the period or (b) agreed service charges. Mobilisation activities related to drilling rig activity to mobilise a rig from one geographic area to another are linked to the underlying contracts. Certain contracts include mobilisation fees paid at the start of the contracts. Where the mobilisation fee covers a general or specific upgrade of a rig or equipment, the fee is recognised as revenue over the contract period. In cases where the fee covers specific operating expenses at the start up of the contract, the fee is recognised in the same period as the expenses. Sale of goods Revenue from sales of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs, or the probable return of goods.

Commissions Commissions for services rendered to vessels and service income are generally recognised as revenues when services are completed and billed. Rental income Rental income is recognised as revenue on an accrual basis at the amount as specified under each lease agreement. Dividend income Dividend income is recognised in the statement of income on the date the Group’s right to receive payments is established. Interest income Interest income is recognised in the statement of income as it accrues.


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(r) Finance costs Finance costs comprise interest expense and relevant costs on borrowings. Borrowing costs that are not directly attributable to the acquisition, construction, or production of a qualifying asset are recognised in the statement of income using the effective interest method.

(s) Lease payments

Payments made under operating leases are recognised in the statement of income on a straight line basis over the term of the lease. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

(t) Income tax

Income tax expense for the year comprises current tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. In determining the amount of current tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

(u) Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the the statement of income attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the the statement of income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise warrants.

(v) Dividend distribution

Dividend to the Company’s shareholders is recognised as a liability in the consolidated and separate financial statements in the period in which the interim dividends are approved by the Board of Directors and the annual dividends are approved by the Company’s shareholders.

5 Related parties

For the purposes of these financial statements, parties are considered to be related to the Group/Company if the Group/Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group/Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.


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Relationships with related parties, except for subsidiaries, associates, and joint ventures described in notes 12, 13, and 14, are as follows: Name of entities Country of Nature of relationships incorporation/ nationalityKey management personnel Multi-nationalities Persons having authority and

responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of the Group/Company.

SKI Energy Resources Inc. (“SERI”) Philippines An associate of Merton Group (Cyprus) Limited, the Company’s associate.

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

Transactions Pricing policies

IT service and office and office equipment Prices normally charged to a third party rental income Service income Prices normally charged to a third party Management fee income Actual cost plus marginInterest income/interest expenses Market linked rate/the borrowing costs of the lenderManagement and administrative fees Actual cost plus marginIT service and service expenses Prices normally charged by a third party Vessel operating expenses, offshore Prices normally charged by a third party service expenses, and cost of sales

Significant transactions for the years that ended on 30 September 2013 and 2012 with related parties were as follows:

Consolidated Separate financial statements financial statementsYears that ended on 30 September 2013 2012 2013 2012

(restated) in thousand Baht Subsidiaries IT service and office and office equipment rental income - - 23,118 36,067Service income - - 891 3,793 Management fee income - - (4,273) 12,784Interest income - - 24,392 173,990IT service and service expenses - - 9,958 19,357Interest expenses - - 136,051 81,465 Key management personnel Key management personnel compensation

Short-term benefits 211,531 218,230 96,221 88,255Post-employment benefits 2,975 5,066 1,077 4,943

Total key management personnel compensation 214,506 223,296 97,298 93,198

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Key management personnel compensation comprises salaries, other benefits, other remuneration, and meeting fees.


financial statements financial statementsYears that ended on 30 September 2013 2012 2013 2012

(restated) in thousand Baht Associates and joint ventures IT service and office and office equipment rental income 25,946 20,837 7,953 8,867Offshore service income 1,540,011 - - -Service income 383 12 383 277Interest income 4,378 319 241 319Vessel operating expenses 1,780 10,268 - -Offshore service expenses 23,847 24,317 - -Cost of sales 35,328 53,140 - -Management and administrative fees 19,023 17,758 - -

Balances as at 30 September 2013 and 2012 with related parties were as follows:


financial statements financial statementsNote 2013 2012 2013 2012

in thousand Baht Trade accounts receivable Associates and joint ventures 8 1,043,583 - - - Receivables from related parties Subsidiaries - - 513,113 589,989 Associates and joint ventures 5,222 62,062 2,076 2,186Other related parties 236,223 231,031 - - 241,445 293,093 515,189 592,175Less allowance for impairment (236,223) (231,031) - -Net 5,222 62,062 515,189 592,175

Consolidated As at 30 September 2013 and 2012, receivables from other related parties include advances for share subscription in SERI, totalling USD 5 million and interest receivable of USD 2.5 million which are fully impaired as management is of the view that the operations of SERI are not expected to be adequetly financed such that SERI can produce sufficient coal to achieve break-even performance.

Consolidated Separatefinancial statements financial statements

2013 2012 2013 2012in thousand Baht

Short-term loans to related parties Subsidiaries - - 4,732,061 4,030,978Other related parties 134,980 123,315 - - 134,980 123,315 4,732,061 4,030,978Less allowance for impairment (134,980) (123,315) - -Net - - 4,732,061 4,030,978

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The Company Short-term loans to subsidiaries can be called at any time and are unsecured. The loans mainly bear interest at 3.0% per annum (2012: 3.0% per annum). During the year, the Company granted an unsecured loan to a subsidiary in the amount of Baht 350 million for its working capital. This loan can be called at any time and bears interest at a fixed rate. Consolidated As at 30 September 2013, short-term and convertible loans made to SERI by Soleado Holdings Pte. Ltd., a wholly owned subsidiary of the Company (“Soleado”), in USD currency totalling USD 4.3 million, or Baht 135.0 million (2012: USD 4.0 million, or Baht 123.3 million) are unsecured and repayable at call. Consolidated Separate financial statements financial statements

2013 2012 2013 2012 in thousand Baht Long-term receivables from a related

party

Joint venture - 31,251 - -Less current portion - (31,251) - -Non-current portion - - - -

In 2011, Baconco Co., Ltd., a wholly owned subsidiary of the Company (“Baconco”), entered into a business co-operation agreement with Thoresen-Vinama Agencies Co., Ltd. (“Thoresen-Vinama”) to provide an advance of USD 2 million. This advance is repayable in 2 years. Baconco is entitled to income from the logistics business conducted by using the bonded warehouse that was built by Thoresen Vinama. As at 30 September 2013, this advance was fully refunded (2012: Baht 31.3 million).


2013 2012 2013 2012 in thousand Baht Long-term loans to related parties Subsidiaries - - 4,964,289 4,643,346Associates and joint ventures 2,573 3,323 2,573 3,323Other related parties 558,754 548,753 - - 561,327 552,076 4,966,862 4,646,669Less allowance for doubtful accounts (558,754) (548,753) (2,731,526) (2,731,526)Net 2,573 3,323 2,235,336 1,915,143

The Company As at 30 September 2013, the Company granted unsecured long-term loans in USD and Baht currency to subsidiaries totalling Baht 4,964.3 million (2012: Baht 4,643.3 million), which carry interest at fixed rates (2012: fixed rates) and are repayable every month. In addition, the Company granted unsecured long-term loans to an associate amounting to Baht 2.6 million (2012: Baht 3.3 million), which carry interest at Minimum Overdraft Rate (“MOR”) plus a certain margin (2012: MOR plus a certain margin).

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Consolidated

On 14 August 2009, Soleado entered into a loan facility agreement with Merton Investments NL BV (“Merton”) to provide a loan up to USD 15 million to Merton at a fixed interest rate. The maturity date of the loan is three years after the first drawdown date which was on 23 November 2009. Merton would on-lend such loan to SERI. Both loans were drawn down according to the progress of the coal mine construction done by SERI in the Philippines. The collateral for the Soleado loan includes pledge of shares held by Merton Group (Cyprus) Limited in Merton, pledge of shares held by Merton in SERI, pledge of Merton bank accounts, assignment of Merton's interest and benefit in SERI loan, and mortgage of real properties and chattels by SERI.

On 25 August 2011, it was agreed by Merton and Soleado that Merton will assign its loan to SERI to Soleado and all principal and interest outstanding as of 23 August 2011 totalling USD 20.3 million would be converted into new equity in SERI. The debt conversion to equity is subject to approval of the Philippines Securities Exchange Commission. However, the Philippines Securities Exchange Commission has ruled that the share restructuring proposed by SERI, Soleado, and SERI’s shareholders must be changed due to pending legal motions about foreign share ownership restrictions for Philippine companies engaged in mining; thus, the first submission was refused. Given that all partners are unable to properly finance the operations of SERI, it is producing insufficient coal to reach break-even cash flow and is in the midst of restructuring. To be prudent, full provision has been taken against the outstanding loans, interest receivables, and advances for share subscription in SERI. Movements of long-term loans to related parties during the year that ended on 30 September 2013 are as follows:

Consolidated Separate financial financial statements statements

in thousand BahtLong-term loans to related parties At 1 October 2012 3,323 1,915,143Additional - 300,000Repayments (750) (750)Unrealised gains on exchange rates - 20,943At 30 September 2013 2,573 2,235,336Less current portion of long-term loans (2,573) (2,573)Long-term loans - net of current portion - 2,232,763


financial statements financial statements2013 2012 2013 2012

in thousand Baht Payables to related parties Subsidiaries - - 208,783 97,053 Associates and joint ventures 14,314 11,632 - - 14,314 11,632 208,783 97,053

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2013 2012 2013 2012 in thousand Baht Short-term loans from relate parties Subsidiaries - - 5,916,004 5,660,905 - - 5,916,004 5,660,905

The Company The short-term loans from subsidiaries can be called at any time and are unsecured. The loans bear interest at 2.15% and 3.0% per annum (2012: 2.15% and 3.0% per annum).

6 Cash and cash equivalents

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht Cash on hand 102,200 147,764 30 60Deposits at banks 7,356,187 3,441,660 650,947 123,211Total 7,458,387 3,589,424 650,977 123,271

As at 30 September 2013, deposits at banks bear interest at the rates between 0% to 7% per annum (2012: 0% to 9% per annum).

7 Short-term investments

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht Equity securities 58,815 390,737 58,815 83,543Debt securities 1,297 1,297 Fixed term deposits 443,000 383,318 - Other investments 17,945 17,715 17,945 17,715 521,057 793,067 78,057 102,555Accumulated changes in fair value (17,850) 9,853 (17,850) (13,937)Total 503,207 802,920 60,207 88,618

During the year that ended on 30 September 2013, the Group and the Company sold short-term investments in equity securities of Baht 451.7 million and Baht 134.2 million, respectively and incurred gains on disposals of short-term investments in the consolidated and separate financial statements of Baht 32.3 million and Baht 8.2 million, respectively.

( )d

)

)

1,297 -

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8 Trade accounts receivable Consolidated Separate financial statements financial statements Note 2013 2012 2013 2012 (restated) (in thousand Baht Related parties Trade accounts receivable 5 1,043,583 - - - Other parties Trade accounts receivable 2,959,794 2,661,998 - -Accrued income 188,354 227,327 - - 3,148,148 2,889,325 - -Less allowance for doubtful accounts (225,504) (224,156) - -Net 2,922,644 2,665,169 - - Total 3,966,227 2,665,169 - -

Bad and doubtful debts expense 83,785 96,055 - -

Aging analyses for trade accounts receivable were as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht Related parties Within credit terms 860,031 - - -Overdue:

3 - 6 months 183,552 - - - 1,043,583 - - - Other parties Within credit terms 1,961,355 1,545,957 - -Overdue:

Less than 3 months 711,063 950,980 - -3 - 6 months 133,506 23,639 - -6 - 12 months 18,114 9,628 - -Over 12 months 135,756 131,794 - -

2,959,794 2,661,998 - -Less allowance for doubtful accounts (225,504) (224,156) - -Net 2,734,290 2,437,842 - - Total 3,777,873 2,437,842 - -

Full allowance for doubtful accounts has been set up for all trade accounts receivable which management considers as non-collectible.

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9 Other accounts receivable

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 Note (restated) (in t ousand Baht Advances for business expenses 272,736 342,437 - - Private placement receivables from non-controlling shareholders of a subsidiary 12 399,214 - - - Other accounts receivables 143,293 73,886 - - Advances to employees 32,223 26,192 205 9Accrued interest income 4,735 4,689 2,830 2,292 852,201 447,204 3,035 2,301Less allowance for doubtful accounts (10,744) (20,710) - - Net 841,457 426,494 3,035 2,301

10 Deferred contract costs

Consolidated

financial statements (in thousand BahtAt 1 October 2012 277,459Additions 63,158Amortisation on deferred contract costs (81,977)Translation adjustments 2,562At 30 September 2013 261,202

On 30 September 2012, USD 9.3 million (equivalent to Baht 286.7 million) was paid by Subtech Ltd., a subsidiary of Mermaid Maritime Public Company Limited (“MMPLC”), to General Technology & Systems Co., Ltd (“Gentas”). The payment consists of the following elements: (a) USD 0.3 million (equivalent to Baht 9.2 million) as consideration for the acquisition of Gentas’ 30% equity interest in Subtech Saudi Arabia, (recorded in other accounts receivable) and (b) USD 9.0 million (equivalent to Baht 277.5 million) (recorded in deferred contract costs) as (i) compensation for loss of expected profits to Gentas, if not for the sale of its 30% equity interest in Subtech Saudi Arabia, pertaining to a recently awarded five-year inspection, repair, and maintenance contract with Saudi Aramco (“IRM Contract”) worth more than USD 530 million of revenues and (ii) as an advance payment for Gentas assistance to secure the IRM Contract. The USD 9.0 million is related to securing the IRM Contract that will be executed by a jointly-controlled operation of MMPLC, Zamil Mermaid Offshore Services Co. (LLC) (“ZMOS”), and is recognised as deferred contract costs. The deferred contract costs will be amortised rateably over the period of execution of the contract, starting from the moment revenue is first recognised, which is approximately five years. The total IRM Contract revenue over five years is estimated to be approximately USD 530 million. The Group’s estimated revenue is between 60 to 70 percent of the IRM Contract revenue over this period. The IRM Contract was awarded to ZMOS on 25 October 2012. ZMOS is a newly established entity that the Group controls jointly with Zamil Offshore Services Co. (“Zamil”). ZMOS will bill Saudi Aramco at agreed rates in the IRM Contract, and the two partners will bill ZMOS for the cost incurred in executing the IRM contract.

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The joint arrangement between Zamil and the Group is recognised as a jointly-controlled operation in which the participating parties recognise and account for their own assets and liabilities, costs, and revenues related to their participation in the arrangement.

11 Inventories

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht Inventories 1,776,770 1,799,329 - -Tools and supplies 40,161 40,084 - -Total 1,816,931 1,839,413 - -Less allowance for lower net realisable value of inventories (480,721) (237,626) - - Net 1,336,210 1,601,787 - -

As at 30 September 2013, inventories with carrying amount of Baht 233.5 million and VND 218,000 million, or Baht 327 million, were pledged with banks as security for a loan and loan facility, respectively (2012: Baht 347.0 million and VND 202,167 million, or Baht 303 million, respectively). However, as at 30 September 2013, the subsidiary had repaid the loan but has not redeemed its inventories of Baht 233.5 million.

12 Investments in subsidiaries

Investments in subsidiaries as at 30 September 2013 and 2012 comprise investments in the following companies:

Nature of Country of % Ownership interest Name of subsidiaries business incorporation 2013 2012 Holdings - Soleado Holdings Pte. Ltd. (“Soleado”) Holding company Singapore 100.0 100.0 With subsidiaries as follows: - Atlantis Offshore Construction Pte. Ltd. ” Singapore 100.0 100.0 - Baconco Co., Ltd. Fertiliser production Vietnam 100.0 100.0 With associates as follows: - Merton Group (Cyprus) Limited Coal mining Philippines - Baria Serece Port operations Vietnam With joint ventures as follows: - Petrolift Inc. Maritime transportation

services Philippines

- Qing Mei Pte. Ltd. Coal mining Singapore - Athene Holdings Ltd. Holding company Thailand 99.9 99.9 - PM Thoresen Asia Holdings Ltd. (“PM Thoresen”)

” Thailand 99.9 -

Transport - Thoresen & Company (Bangkok) Limited Ship management Thailand - 99.9 - Thor Dynamic Shipping Co., Ltd. * International maritime Thailand 99.9 99.9 transportation - Thor Endeavour Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Energy Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Enterprise Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Harmony Shipping Co., Ltd. * ” Thailand 99.9 99.9

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Nature of Country of % Ownership interest Name of subsidiaries business incorporation 2013 2012 Transport (continued) - Thor Integrity Shipping Co., Ltd. * International maritime Thailand 99.9 99.9 transportation - Thor Jupiter Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Wind Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Wave Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thoresen Shipping Singapore Pte. Ltd. ” Singapore 100.0 100.0 With subsidiaries as follows: - Thor Friendship Shipping Pte. Ltd. ” Singapore 100.0 100.0 - Thor Fortune Shipping Pte. Ltd. ” Singapore 100.0 100.0 - Thor Horizon Shipping Pte. Ltd. ” Singapore 100.0 100.0 - Thoresen Shipping Denmark APS Commercial dry bulk

shipping activities Denmark 100.0 -

- Thoresen & Company (Bangkok) Limited Ship management Thailand 99.9 - - Thoresen Chartering (HK) Ltd.* International maritime Hong Kong 99.9 99.9 transportation - Thoresen Shipping Germany GmbH ” Germany 100.0 100.0 - Thor Orchid Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Mercury Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Mariner Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Merchant Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Navigator Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Captain Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Hermes Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Pilot Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Master Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Commander Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Transporter Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Nereus Shipping Co., Ltd. * ” Thailand 99.9 99.9- Herakles Shipping Co., Ltd.** ” Thailand 99.9 99.9- Heron Shipping Co., Ltd.** ” Thailand 99.9 99.9- Thor Nectar Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Jasmine Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Champion Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Star Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Skipper Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Sailor Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Sun Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Sky Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Spirit Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Sea Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Lotus Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Trader Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Traveller Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Venture Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Triumph Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Guardian Shipping Co., Ltd.* ” Thailand 99.9 99.9- Thor Confidence Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Nautica Shipping Co., Ltd. * ” Thailand 99.9 99.9- Thor Neptune Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Nexus Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Tribute Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Alliance Shipping Co., Ltd.* ” Thailand 99.9 99.9 - Thor Nautilus Shipping Co., Ltd. * ” Thailand 99.9 99.9 - Thor Transit Shipping Co., Ltd. * ” Thailand 99.9 99.9


Annual Report 2013

115


42

Nature of Country of % Ownership interest Name of subsidiaries business incorporation 2013 2012 Transport (continued) - PT Perusahaan Pelayaran Equinox Maritime

transportation Indonesia 49.0 49.0

services - Thoresen Chartering (PTE) Ltd.* Ship brokerage Singapore 100.0 100.0 - Thoresen Service Center Ltd.* Service provider Thailand 99.9 99.9 - Asia Coating Services Ltd.* Coating services Thailand 99.9 99.9 - Thoresen Shipping FZE Ship agency UAE 100.0 100.0 With an associate as follows: - Sharjah Ports Services LLC Port operations UAE Energy - Mermaid Maritime Public Company Limited Offshore services Thailand 57.1 57.1 (“MMPLC”) investments

With subsidiaries as follows: - Mermaid Offshore Services Ltd. Turn-key diving ROV Thailand 100.0 100.0

(“MOS”) and NDT services to offshore industries With subsidiaries as follows: - Nemo Subsea AS*** Vessel owner Norway - 100.0 - Nemo Subsea IS*** ” Norway - 97.0 - Seascape Surveys (Thailand) Ltd. Test and explore

environmental impact of petroleum

exploration and telecommunication

Thailand 100.0 100.0

- Seascape Surveys Pte. Ltd. ” Singapore 100.0 100.0 With a subsidiary as follows: - PT Seascape Surveys Indonesia ” Indonesia 95.0 95.0 - Subtech Ltd. Diving and subsea Seychelles 100.0 100.0 contractor With one associate and one subsidiary as follows: - Subtech Qatar Diving and Marine Services LLC****

Diving Services

Qatar

49.0

49.0

- Subtech Saudi Arabia Limited ” Saudi Arabia 70.0 70.0 - Mermaid Offshore Services Pty.

Ltd.*** Turn-key diving ROV and NDT services to offshore

industries

Australia - 100.0

- Mermaid Offshore Services Pte. Ltd. ” Singapore 100.0 100.0 - Mermaid Drilling Ltd. Production and

exploration drilling services and support to

offshore industries

Thailand 95.0 95.0

With subsidiaries as follows: - MTR-1 Ltd. Drilling services Thailand 100.0 100.0 - MTR-2 Ltd. ” Thailand 100.0 100.0 - Mermaid Drilling (Malaysia) Sdn. Bhd. ” Malaysia 100.0 100.0 - MTR-1 (Singapore) Pte. Ltd. ” Singapore 100.0 100.0 - MTR-2 (Singapore) Pte. Ltd. ” Singapore 100.0 100.0 - Mermaid Drilling (Singapore) Pte. Ltd. Production and


offshore industries

Singapore 100.0 100.0


Annual Report 2013

116


43

Nature of Country of % Ownership interest Name of subsidiaries business incorporation 2013 2012 Energy (continued) With a subsidiary as follows: - MTR-3 (Singapore) Pte. Ltd. Production and


offshore industries

Singapore 100.0 100.0

- Mermaid Training and Technical Services Ltd.***

Sub-sea engineering training and

examination services

Thailand - 100.0

With an associate as follows: - Asia Offshore Drilling Limited Drilling services Bermuda 33.8 33.8 With subsidiaries as follows: - Asia Offshore Rig 1 Limited ” ” - Asia Offshore Rig 2 Limited ” ” - Asia Offshore Rig 3 Limited ” ”

With a joint venture as follows: - Zamil Mermaid Offshore Services Co.

(LLC) Sub-sea services to offshore industries

Saudi Arabia 40.0 -

Infrastructure - Chidlom Marine Services & Supplies Ltd. Supply cargo Thailand 99.9 99.9

lashing materials - GAC Thoresen Logistics Ltd. Warehousing Thailand 51.0 51.0 - Unique Mining Services Public Sale of coal Thailand 88.7 88.7 Company Limited (“UMS”) (invested by Athene Holdings Ltd.) With subsidiaries as follows: - UMS Logistics Management Co., Ltd. Logistics management Thailand 99.9 99.9 - UMS Lighter Co., Ltd. Boat conveyance Thailand 99.9 99.9 - UMS Transport Co., Ltd.* Road transport Thailand 99.9 99.9 - UMS Port Services Co., Ltd. Port service Thailand 99.9 99.9 - Baconco Co., Ltd. (invested by Soleado) Fertiliser production Vietnam 100.0 100.0

* Ceased operation as of 30 September 2013. ** In the process of liquidation. *** Was deregistered. **** Existence of significant influence.

The movements of investments in subsidiaries during the years that ended on 30 September 2013 and 2012 are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 in thousand Baht At 1 October - - 18,947,210 15,723,960Additional investments - - 2,766,875 4,060,122Disposals - - (36,356) -Impairment charges, net - - (412,073) (836,872)At 30 September - - 21,265,656 18,947,210

)(


Annual Report 2013

117

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

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ited

and

its

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sidi

arie

s N

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and

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(in m

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td.

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Co.

, Ltd

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200

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o., L

td.

200

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. Ltd

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0 (4

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td.

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td.

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Co.

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or M

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Co.

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Co.

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g C

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td.

153

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Co.

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. 80

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9


Annual Report 2013

118

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its

Sub

sidi

arie

s N

otes

to

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epar

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up c

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2013

20

12

2013

2012

2013

20

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2013

20

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2013

20

12

(in

mill

ion

Bah

t)Th

or M

aste

r Sh

ippi

ng C

o., L

td.

188

188

188

188

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or C

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td.

115

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115

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Thor

Tra

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Shi

ppin

g C

o., L

td.

200

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200

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200

200

-40

Thor

Ner

eus

Ship

ping

Co.

, Ltd

. 21

321

321

3 21

3 (9

6)(9

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les

Ship

ping

Co.

, Ltd

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(1)

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on S

hipp

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Co.

, Ltd

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Nec

tar

Ship

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Co.

, Ltd

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425

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7575

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td.

3030

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Shi

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td.

30

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63

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75

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td.

186

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117

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106

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--


Annual Report 2013

119

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

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and

its

Sub

sidi

arie

s N

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to

fina

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46

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Nam

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2013

2012

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2013

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(in

mill

ion

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t)Th

or N

autil

us S

hipp

ing

Co.

, Ltd

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50

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(1)

50

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Tra

nsit

Ship

ping

Co.

, Ltd

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0 10

0 10

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(36)

(3

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(53)

(65)

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Cha

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(Pte

) Ltd

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ores

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d.

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td.

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Ltd.

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(914

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18

,947

30

81,

093


Annual Report 2013

120


47

Significant movements of investments in subsidiaries of the Company during the year that ended on 30 September 2013 were as follows: Current year additions and disposal On 20 March 2013, the Board of Directors of MMPLC approved a rights issue and private placement to raise gross proceeds of approximately SGD 176.1 million. The private placement would follow the rights issue for the remaining unsubscribed shares of the rights issue. On 19 September 2013, MMPLC announced the issue and listing of 569,692,359 rights shares at SGD 0.28 per share with gross proceeds to the company amounting to SGD 159,513,860. On 30 September 2013, MMPLC announced the details of the private placement of 58,105,821 shares at SGD 0.28 resulting in gross proceeds of SGD 16,269,630. The private placement was completed on 4 October 2013. After the rights issue and private placement, the Group owns 57.14% of the share capital of MMPLC which is equal to its equity interest prior to the rights issue and private placement. As at 30 September 2013, the Group recognised a receivable from non-controlling shareholders in MMPLC and a corresponding increase in non controlling interests in MMPLC amounting to SGD 16,269,630, or Baht 399.2 million. On 27 May 2013, the Company subscribed for 21,525,400 additional shares at a price of SGD 1.0 per share in Thoresen Shipping Singapore Pte. Ltd. (“TSS”) for total consideration of USD 17.0 million, or Baht 513.4 million. On 7 June 2013, the Company established a new subsidiary, PM Thoresen Asia Holdings Ltd. (“PM Thoresen”), with registered and paid-up share capital of Baht 1.0 million. On 4 December 2012, the Company entered into a Share Sale and Purchase Agreement with TSS to sell and transfer all shares of Thoresen & Company (Bangkok) Limited from the Company to TSS. Details of the disposal are as follows:

Separate financial statements (in thousand Baht)Sales consideration 36,500Net book value of investments in subsidiary (36,356)Total - gains on disposal of investment in a subsidiary 144

Impairment charge During the year that ended on 30 September 2013, an impairment loss of Baht 498.7 million was recognised for the Company’s investment in TSS, because several of TSS’s operating assets were impaired. The Company’s management assessed the impairment of the investment in TSS for the year 2013 based on the assumptions below:

The recoverable amount of TSS was based on the higher of the value-in-use and the fair-

value-less-cost-to-sell of TSS. The value-in-use was determined using the income approach based on cash flow projections

of the subsidiary for the currently available vessels, six new planned vessels, as well as the charter-in vessels.

The weighted average cost of capital (“WACC”) of 8% was used as a discount factor. The cost of the equity component of the WACC was calculated using the capital asset pricing model.

The impairment charges for investments were partly offset by a reversal of previously recognised impairment charges for subsidiaries, which ceased their operations but which earned income from investing activities.


Annual Report 2013

121


48

Subsidiaries - TSS During the year that ended on 30 September 2013, TSS established a new subsidiary, Thoresen Shipping Denmark APS, with registered and paid-up share capital of DKK 80,000. Subsidiaries - Soleado On 4 September 2013, Soleado subscribed for 136,472,376 rights shares at a price of SGD 0.28 per rights share in MMPLC for total consideration of SGD 38.2 million, or Baht 964.9 million. On 26 September 2013, Soleado subsequently sold 89,917,033 MMPLC’s shares to the Company, for a total consideration of SGD 27.0 million, or Baht 681.1 million, for the purpose of internal reorganization.

13 Investments in associates Investments in associates as at 30 September 2013 and 2012 comprise investments in the following companies:


Annual Report 2013

122

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its

Sub

sidi

arie

s N

otes

to

fina

ncia

l sta

tem

ents

49

C

onso

lidat

ed f

inan

cial

sta

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ents

Nam

e of

ass

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tes

Cos

t Eq

uity

Im

pair

men

tAt

equ

ity -

net

Div

iden

din

com

e

2013

2012

2013

2012

2013

2012

2013

2012

2013

2012

(in

mill

ion

Bah

tFe

arnl

eys

(Tha

iland

) Ltd

. 18

1859

61

-

-59

61-

15Th

ores

en S

hipp

ing

and

Logi

stic

s Lt

d.

2424

3533

--

3533

710

Shar

jah

Por

ts S

ervi

ces

LLC

(inv

este

d by

Th

ores

en S

hipp

ing

FZE)

21

2158

60

-

- 58

6010

- As

ia O

ffsho

re D

rilli

ng L

imite

d (in

vest

ed b

y M

MP

LC)

2,96

41,

904

3,14

91,

915

-

- 3,

149

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- M

erto

n G

roup

(Cyp

rus)

Ltd

. (in

vest

ed b

y So

lead

o)

235

216

168

161

(1

20)

- 48

161

- -

Bar

ia S

erec

e (in

vest

ed b

y So

lead

o)

334

334

383

370

-

-38

337

011

9

3,59

62,

517

3,85

22,

600

(1

20)

-3,

732

2,60

028

34

S

epar

ate

finan

cial

sta

tem

ents

Nam

e of

ass

ocia

tes

Cos

t Im

pair

men

tAt

cos

t -ne

tD

ivid

end

inco

me

20

1320

1220

13

20

1220

1320

1220

1320

12

(in m

illio

n B

aht

Fear

nley

s (T

haila

nd) L

td.

18

18

-

-18

18

-

15Th

ores

en S

hipp

ing

and

Logi

stic

s Lt

d.

2424

-

-24

247

10

42

42

-

-42

42

7

25

)

)


Annual Report 2013

123


50

The movements of investments in associates during the years that ended on 30 September 2013 and 2012 are as follows:


financial statements financial statementsNote 2013 2012 2013 2012

(restated) (in thousand Baht) At 1 October 2,599,551 3,758,851 42,368 53,581Additional investments 1,079,041 2,663 - -Disposal investments - (589) - -Changes of investments from associates to joint ventures 14 - (1,105,376) - (11,213)Dividends received (28,235) (33,917) - -Share of profits in associates 159,092 12,087 - -Impairment charges (120,245) - - -Translation adjustments 42,999 (34,168) - -At 30 September 3,732,203 2,599,551 42,368 42,368

Significant additional investments of the Group during the year that ended on 30 September 2013 are as follows:

Subsidiaries - Soleado On 7 May 2013, Soleado proportionately subscribed for 4,352 new ordinary shares of Merton Group (Cyprus) Limited at USD 145 each for a total investment of USD 631,040, or Baht 18.6 million. The Group’s ownership in Merton Group (Cyprus) Limited increased from 24.31% to 26.15% after the share capital increase, as some shareholders did not subscribe for or subscribed for shares less than their proportion. Subsidiaries - MMPLC

In March 2013, MMPLC subscribed for 6,756,225 additional shares at a price of USD 5.00 per share in Asia Offshore Drilling Limited (“AOD”), for a total consideration of USD 33.8 million, or Baht 1,060.4 million. After the subscription, MMPLC’s total ownership in AOD increased to 20,256,425 shares, representing 33.8% ownership of all outstanding shares. On 30 April 2013, the Board of Directors of AOD, an associate, approved to delist AOD’s shares from the Oslo Stock Exchange, which occurred on 31 May 2013. Impairment charge During the year that ended on 30 September 2013, impairment losses of Baht 120.2 million were recognised for investments in Merton Group (Cyprus) Ltd. to reflect their expected net recoverable amounts to the Group.


Annual Report 2013

124


51

The Group’s share of the result of its principal associates, and its share of the assets including goodwill and liabilities are as follows:

2013 Profits % Profit (loss) Assets Liabilities Revenues (losses) Interest sharing

Name Baht’000 Baht’000 Baht’000 Baht’000 held Baht’000 Thoresen Shipping and Logistics Ltd. 151,748 79,352 169,633 20,908 49.0 10,245Merton Group (Cyprus) Ltd. 404,173 18,199 8,289 (64,622) 26.2 (16,493)Baria Serece 1,098,287 234,068 548,561 122,529 20.0 24,506Asia Offshore Drilling Limited 22,747,899 13,986,817 1,076,329 399,284 33.8 134,831 153,089Add Others 6,003 159,092

2012 (restated)

Assets Liabilities RevenuesProfits

(losses) %

Interest Profit (loss)

sharingName Baht’000 Baht’000 Baht’000 Baht’000 held Baht’000

Thoresen Shipping and Logistics Ltd. 151,474 84,986 124,351 12,594 49.0 6,171 Merton Group (Cyprus) Ltd. 399,666 26,908 71,804 (80,218) 24.3 (19,501) Baria Serece 1,121,591 279,408 520,188 144,300 20.0 28,860 Asia Offshore Drilling Limited 5,332,274 178,733 - (28,632) 33.8 (9,663) 5,867Add Others 6,220 12,087

14 Investments in joint ventures

Investments in joint ventures as at 30 September 2013 and 2012 comprise investments in the following companies:


Annual Report 2013

125

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its

Sub

sidi

arie

s N

otes

to

fina

ncia

l sta

tem

ents

52

Con

solid

ated

fin

anci

al s

tate

men

tsN

ame

of jo

int v

entu

res

C

ost

Equi

tyIm

pair

men

tAt

equ

ity -

net

Div

iden

din

com

e

2013

2012

2013

2012

2013

20

1220

1320

1220

1320

12

(in

mill

ion

Bah

tTh

ores

en (I

ndoc

hina

) S.A

.

99

104

84-

-10

484

--

Gul

f Age

ncy

Com

pany

(Tha

iland

) Lt

d.

11

1111

13-

- 11

13-

- P

etro

lift I

nc.(i

nves

ted

by S

olea

do)

93

093

01,

075

1,07

6-

-1,

075

1,07

671

59Q

ing

Mei

Pte

. Ltd

. (in

vest

ed b

y So

lead

o)

12

891

116

83-

- 11

683

- -

Zam

il M

erm

aid

Offs

hore

Ser

vice

s C

o. (L

LC) (

inve

sted

by

MM

PLC

)

7-

- -

- -

- -

- -

1,08

51,

041

1,30

61,

256

- -

1,30

61,

256

7159

.

Sep

arat

e fin

anci

al s

tate

men

tsN

ame

of jo

int v

entu

res

Cos

t Im

pair

men

tAt

cos

t -ne

tD

ivid

end

inco

me

20

1320

1220

13

20

1220

1320

1220

1320

12

(in m

illio

n B

aht

Gul

f Age

ncy

Com

pany

(Tha

iland

) Ltd

. 11

11

-

-

11

11

--

Thor

esen

(Ind

ochi

na) S

.A.

99

-

-9

9-

-

20

20

-

-20

20

-

-

)

)


Annual Report 2013

126


53

The movements of investments in joint ventures during the years that ended on 30 September 2013 and 2012 are as follows:

Consolidated Separate financial statements financial statements Note 2013 2012 2013 2012 in thousand Baht At 1 October 1,256,472 63,893 19,984 8,771Additional investments 43,187 27,892 - -Change of investments from associates to joint ventures 13 - 1,105,376 - 11,213Dividends received (70,733) (58,626) - -Share of profits in joint ventures 95,570 117,339 - -Impairment charges - - (203) -Translation adjustments (18,033) 598 - -At 30 September 1,306,463 1,256,472 19,781 19,984

Significant additional investments of the Group during the year that ended on 30 September 2013 are as follows: Subsidiaries - Soleado During the year, Soleado, together with Merton Group (Cyprus) Limited, an associate, and Britmar (Asia) Pte. Ltd., a business partner, subscribed for an additional 1,200,000 ordinary shares of Qing Mei at a total purchase price of USD 1,200,000, or Baht 36.6 million each. The Group’s ownership in Qing Mei remains the same at 33.33%. Subsidiaries - MMPLC On 1 October 2012, MMPLC subscribed for 800 shares, equivalent to 40.0% of the total shares in Zamil Mermaid Offshore Services Co. (LLC), a new jointly-controlled operation, for total consideration of Baht 6.6 million (Saudi Riyal 0.8 million). The joint arrangements between the participating parties require, among other matters, consent from both partners equally for actions and decisions of the jointly-controlled operation. The Group’s share of the result of its principal joint ventures, all of which are unlisted, and its share of the assets including goodwill and liabilities are as follows:

)(


Annual Report 2013

127


54

2013 % Profit (loss) Assets Liabilities Revenues Profits Interest sharing

Name Baht’000 Baht’000 Baht’000 Baht’000 held Baht’000 Thoresen (Indochina) S.A. 210,611 10,877 335,970 35,601 50.0 17,801Petrolift Inc. 3,776,373 1,851,611 1,093,846 229,889 40.0 91,955 109,756Add Others (14,186) 95,570

2012 % Profit (loss) Assets Liabilities Revenues Profits Interest sharing

Name Baht’000 Baht’000 Baht’000 Baht’000 held Baht’000 Thoresen (Indochina) S.A. 237,627 77,019 511,124 53,500 50.0 26,750Petrolift Inc. 4,008,696 1,994,136 1,063,764 267,745 40.0 107,098 133,848Add Others (16,509) 117,339

15 Goodwill

The movements of goodwill during the years that ended on 30 September 2013 and 2012 are as follows:

Consolidated

financial statements 2013 2012

(restated)(in thousand Baht)

Opening net book value 1,478,996 3,801,094Impairment charges (516,031) (2,318,666)Translation adjustments 5,696 (3,432)Closing net book value 968,661 1,478,996

Goodwill is allocated to the Group’s cash-generating units (“CGU”) identified according to business segment. A segment-level summary of the goodwill allocation is presented as follows:

Energy business

Infrastructure business Total

(in thousand Baht) Goodwill allocation 968,661 2,834,697 3,803,358Less Impairment charge - (2,834,697) (2,834,697)Net 968,661 - 968,661


Annual Report 2013

128


55

During the year, UMS and its subsidiaries (“the UMS Group”) incurred a net loss of Baht 375.5 million and as of 30 September 2013, the UMS Group’s current liabilities exceeded current assets by Baht 555.2 million. Moreover, the UMS Group had breached certain loan covenants according to the requirements in loan agreements with financial institutions. These factors may cast doubt about the recoverable amounts from the UMS Group. As a result, the Company’s Board of Directors has considered setting up additional impairment loss against goodwill and customer relationship (note 17) of Baht 516.0 million and Baht 79.8 million, respectively and recognised them in the statement of income. The calculation of value-in-use was performed using income approach which is based on projected free cash flows covering the next five years according to UMS’ strategic plan approved by its Board of Directors. Cash flows beyond the five-year period are extrapolated using the estimated nil growth rate and a discount rate of 15% which is UMS’s weighted average cost of capital (2012: 3.6% and 14%, respectively).


Annual Report 2013

129

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its

Sub

sidi

arie

s N

otes

to

fina

ncia

l sta

tem

ents

56

16

Pro

pert

y, p

lant

, and

equ

ipm

ent

Con

solid

ated

fina

ncia

l sta

tem

ents

Fu

rnitu

re,

O

cean

ves

sels

,fix

ture

s,

B

uild

ings

supp

ort v

esse

ls,

mac

hine

ry,

an

d B

uild

ing

supp

ly v

esse

ls,

an

d M

otor

M

otor

Con

stru

ctio

n

La

nd

fact

orie

s im

prov

emen

tsan

d te

nder

rig

sD

ry-d

ocki

ngeq

uipm

ent

vehi

cles

la

unch

es

Bar

ges

in p

rogr

ess

Tota

l

(in

thou

sand

Bah

t) C

ost

At

1 O

ctob

er 2

011

(res

tate

d)

613,

879

1,16

6,66

0 17

9,77

4 24

,727

,494

85

1,78

3 3,

292,

643

115,

626

2,20

9 13

8,57

3 2,

810,

830

33,8

99,4

71

Addi

tions

-

23,2

75

1,09

4 60

7,15

4 22

7,21

2 96

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16

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-

950

679,

769

1,65

3,05

3

Tran

sfer

s -

69,7

42

7,62

5 -

- 11

7,54

4 -

- 38

5 (2

00,2

53)

(4,9

57)

Dis

posa

ls a

nd w

rite

-off

s (4

,724

) -

(944

) (4

8,72

6)

(76,

497)

(3

3,03

8)(1

2,86

4)

(202

) -

(376

,744

)(5

53,7

39)

Effe

ct o

f mov

emen

t

in

exc

hang

e ra

tes

(284

) (1

,528

) 4,

988

(186

,527

) (5

4,06

0)

(26,

130)

(510

) 17

8 (1

) (3

4,21

6)(2

98,0

90)

At

30 S

epte

mbe

r 20

12 a

nd

1

Oct

ober

201

2 (r

esta

ted)

60

8,87

1 1,

258,

149

192,

537

25,0

99,3

95

948,

438

3,44

8,00

3 11

8,86

7 2,

185

139,

907

2,87

9,38

6 34

,695

,738

Addi

tions

-

1,18

4 9,

229

507,

951

781,

295

175,

829

19,5

11

24,6

01

55

906,

346

2,42

6,00

1

Tran

sfer

-

133,

302

1,28

4 2,

360,

745

33,2

77

611,

278

1,51

1 -

- (3

,141

,397

)-

Dis

posa

ls a

nd w

rite

-off

s (2

,534

) (6

,427

) (3

,136

) (1

,975

,491

) (9

2,02

2)

(361

,236

)(1

,990

) -

- (4

38,2

43)

(2,8

81,0

79)

Effe

ct o

f mov

emen

t

in

exc

hang

e ra

tes

471

11,2

71

(1,0

93)

695,

088

35,0

19

43,2

80

3,40

6 78

9 41

2 21

0 78

8,85

3

At

30 S

epte

mbe

r 20

13

606,

808

1,39

7,47

9 19

8,82

1 26

,687

,688

1,

706,

007

3,91

7,15

4 14

1,30

5 27

,575

14

0,37

4 20

6,30

2 35

,029

,513


Annual Report 2013

130

Thor

esen

Tha

i Age

ncie

s P

ublic

Com

pany

Lim

ited

and

its

Sub

sidi

arie

s N

otes

to

fina

ncia

l sta

tem

ents

57

C

onso

lidat

ed fi

nanc

ial s

tate

men

ts

Fu

rnitu

re,

O

cean

ves

sels

,fix

ture

s,

B

uild

ings

supp

ort v

esse

ls,

mac

hine

ry,

an

d B

uild

ing

supp

ly v

esse

ls,

an

d M

otor

M

otor

Con

stru

ctio

n

La

nd

fact

orie

s im

prov

emen

tsan

d te

nder

rig

sD

ry-d

ocki

ngeq

uipm

ent

vehi

cles

la

unch

es

Bar

ges

in p

rogr

ess

Tota

l

(in

thou

sand

Bah

t) D

epre

ciat

ion

and

impa

irm

ent

c h

arge

s

At

1 O

ctob

er 2

011

(res

tate

d)

3,16

4 37

4,85

8 10

7,10

7 5,

911,

526

496,

479

1,44

9,17

278

,523

99

2 38

,680

23

1,37

4 8,

691,

875

Dep

reci

atio

n ch

arge

for

the

year

-

61,5

57

17,5

22

994,

111

264,

526

357,

379

10,1

89

442

212

- 1,

705,

938

Impa

irm

ent c

harg

es, n

et

(3,1

64)

- -

- -

- -

- -

530,

826

527,

662

Tran

sfer

-

- -

- -

(2,5

15)

- -

346

- (2

,169

)

Dis

posa

ls a

nd w

rite

-off

s -

- (3

67)

(48,

673)

(7

6,49

7)

(25,

200)

(12,

466)

-

- -

(163

,203

)

Effe

ct o

f mov

emen

t

in

exc

hang

e ra

tes

- (6

68)

(508

) 24

,738

(5

3,23

5)

(12,

022)

(425

) (1

6)

(1)

(6,7

65)

(48,

902)

At

30 S

epte

mbe

r 20

12 a

nd

1

Oct

ober

201

2 (r

esta

ted)

-

435,

747

123,

754

6,88

1,70

2 63

1,27

3 1,

766,

814

75,8

21

1,41

8 39

,237

75

5,43

5 10

,711

,201

Dep

reci

atio

n ch

arge

for

the

year

-

66,1

72

17,2

17

1,02

4,20

6 27

0,22

1 35

5,12

1 15

,111

3,

913

2,72

1 -

1,75

4,68

2

Impa

irm

ent c

harg

es, n

et

- -

- 4,

210,

943

- (8

,102

)-

- 3,

582

(746

,756

)3,

459,

667

Dis

posa

ls a

nd w

rite

-off

s -

(3,7

38)

(3,1

36)

(1,8

42,5

50)

(79,

185)

(1

61,1

35)

1,26

0 -

- -

(2,0

88,4

84)

Effe

ct o

f mov

emen

t

in

exc

hang

e ra

tes

- 2,

302

(1,1

45)

230,

418

14,8

10

19,3

12

337

145

410

(8,6

79)

257,

910

At

30 S

epte

mbe

r 20

13

- 50

0,48

3 13

6,69

0 10

,504

,719

83

7,11

9 1,

972,

010

92,5

29

5,47

6 45

,950

-

14,0

94,9

76

Net

boo

k va

lue

At

1 O

ctob

er 2

011

(res

tate

d)

610,

715

791,

802

72,6

67

18,8

15,9

68

355,

304

1,84

3,47

1 37

,103

1,

217

99,8

93

2,57

9,45

6 25

,207

,596

At

30 S

epte

mbe

r 20

12 a

nd

1

Oct

ober

201

2 (r

esta

ted)

60

8,87

1 82

2,40

2 68

,783

18

,217

,693

31

7,16

5 1,

681,

189

43,0

46

767

100,

670

2,12

3,95

1 23

,984

,537

At

30 S

epte

mbe

r 20

13

606,

808

896,

996

62,1

31

16,1

82,9

69

868,

888

1,94

5,14

4 48

,776

22

,099

94

,424

20

6,30

2 20

,934

,537


Annual Report 2013

131


58

Separate financial statements Furniture,

Building fixtures,

and

Motor

Land Buildings improvements equipment vehicles Total (in thousand Baht) Cost At 1 October 2011 82,847 201,846 90,547 66,382 3,280 444,902Additions - - - 1,313 - 1,313Disposals - - - - (474) (474)At 30 September 2012 and 1 October 2012 82,847 201,846 90,547 67,695 2,806 445,741Additions 17,100 1,900 1,416 1,491 - 21,907At 30 September 2013 99,947 203,746 91,963 69,186 2,806 467,648 Depreciation At 1 October 2011 - 110,755 60,583 38,907 2,378 212,623Depreciation charge for the year - 9,656 6,893 12,183 611 29,343Disposals - - - - (409) (409)At 30 September 2012 and 1 October 2012 - 120,411 67,476 51,090 2,580 241,557Depreciation charge for the year - 9,303 6,412 11,626 226 27,567At 30 September 2013 - 129,714 73,888 62,716 2,806 269,124 Net book value At 1 October 2011 82,847 91,091 29,964 27,475 902 232,279 At 30 September 2012 and 1 October 2012 82,847 81,435 23,071 16,605 226 204,184 At 30 September 2013 99,947 74,032 18,075 6,470 - 198,524

Significant movement of property, plant, and equipment of the Group during the year that ended on 30 September 2013 is as follows: Significant additions, disposals, and write-offs:

Significant additions during the year that ended on 30 September 2013 were i) final instalment

payment for new build ocean vessels, ii) payments for dry-docking of vessels and drilling rigs, iii) payments for a second-hand ocean vessel, iv) payments for support vessels and rig equipment, and progress payments for new equipment under construction and installation, and v) payments for warehouse construction.

Significant disposals and write-offs during the year that ended on 30 September 2013 were i) disposals of an ocean vessel and a remotely operated vehicle and ii) termination of vessel main engine contract.

Impairment evaluation By a result of the prolonged downturn and resultant low freight rates in the dry bulk industry, this has negatively affected dry bulk shipping performance. During the year that ended on 30 September 2013, the Company’s subsidiaries recognised an impairment charge of USD 123.5 million (2012: USD 10.7 million) on certain of their vessels as a result of lower recoverable amounts of vessels.


Annual Report 2013

132


59

The recoverable amounts of the vessels were determined based on higher of value-in-use and fair value less costs to sell. The fair value was determined based on the vessel valuation report obtained from an accredited ship broker. The value-in-use was determined using an income approach based on cash flow projection of each vessel assisted by an independent appraiser. Management determined the budgeted cash flows based on past performance and its expectations of market development. Cash inflows are based on existing charter contracts and management’s best estimate of the average charter rates over the next 5 years using third party advisors and extrapolated by using nil growth rate. Cash outflows are estimated i) by using the most recently approved budget and extrapolated by using nil growth rate for the operating expenses and ii) by using the approved dry-docking plan for capital expenditure based on the historical experiences.

A weighted average cost of capital (“WACC”) of 8.0% (2012: 7.5%) was used as the discount rate in the value in use calculation. The cost of the equity component was derived using the capital asset pricing model. Property, plant, and equipment as of 30 September 2013 and 2012 used as collateral for loan facilities can be summarised as follows:

Two ocean vessels were discharged from the mortgage with financial institutions as collateral

for a loan facility (2012: at a total value of USD 7.5 million).

Ten ocean vessels are mortgaged with financial institutions as collateral for their loans at a total value of USD 104.0 million (2012: USD 95.0 million).

Two subsea vessels and a tender rig were mortgaged with various banks as collateral for bank overdraft and loan facilities for a total value of Baht 1,129.5 million and USD 110.0 million (2012: Baht 1,359.5 million and USD 110.0 million).

Twelve barges are mortgaged with a bank as collateral for its bank overdrafts and long-term loans for a total value of Baht 125.0 million (2012: Baht 125.0 million).

Certain land and buildings of the Group are mortgaged with various banks as collateral for loan facilities, bank overdraft facilities, and letters of guarantee for a total value of Baht 900.0 million and VND 117,575 million (2012: Baht 925.0 million and VND 124,922 million).


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17 Intangible assets

Consolidated financial statements

Customer

relationship

Other

intangibleassets

Computer software

Computer software

under installation Total

(in thousand Baht) Cost At 1 October 2011 (restated) 563,851 8,256 301,152 26,713 899,972Additions - - 12,699 - 12,699 Transfers - - 25,575 (20,618) 4,957 Disposals and write-offs - - (1,328) - (1,328)Effect of movement in exchange rates - - (1,296) - (1,296)At 30 September 2012 and 1 October 2012 (restated) 563,851 8,256 336,802 6,095 915,004Additions - - 9,391 - 9,391Disposals and write-offs - - (26,607) - (26,607)Effect of movement in exchange rates - - 3,320 - 3,320 At 30 September 2013 563,851 8,256 322,906 6,095 901,108 Amortisation At 1 October 2011 (restated) 134,920 2,412 155,470 - 292,802 Amortisation charge for the year 69,984 1,114 43,839 - 114,937 Impairment charges - - 8,207 - 8,207 Transfers - - 2,170 - 2,170 Disposals and write-offs - - (80) - (80)Effect of movement in exchange rates - - (538) - (538)At 30 September 2012 and 1 October 2012 (restated) 204,904 3,526 209,068 - 417,498 Amortisation charge for the year 69,897 1,082 39,768 - 110,747 Impairment charges 79,839 - - - 79,839 Disposals and write-offs - - (26,607) - (26,607)Effect of movement in exchange rates 87 31 3,085 - 3,203 At 30 September 2013 354,727 4,639 225,314 - 584,680 Net book value At 1 October 2011 (restated) 428,931 5,844 145,682 26,713 607,170 At 30 September 2012 and 1 October 2012 (restated) 358,947 4,730 127,734 6,095 497,506 At 30 September 2013 209,124 3,617 97,592 6,095 316,428


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Separate financial statements

Computer software

Computer software under

installation Total (in thousand Baht) Cost At 1 October 2011 165,259 26,713 191,972Additions 116 - 116Transfer 20,618 (20,618) -At 30 September 2012 and 1 October 2012 185,993 6,095 192,088Additions 383 - 383At 30 September 2013 186,376 6,095 192,471 Amortisation At 1 October 2011 66,406 - 66,406Amortisation charge for the year 26,736 - 26,736Impairment charges 8,207 - 8,207At 30 September 2012 and 1 October 2012 101,349 - 101,349Amortisation charge for the year 21,545 - 21,545At 30 September 2013 122,894 - 122,894 Net book value At 1 October 2011 98,853 26,713 125,566 At 30 September 2012 and 1 October 2012 84,644 6,095 90,739 At 30 September 2013 63,482 6,095 69,577


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18 Other non-current assets

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht)

Long-term prepayment - land use rights, net 5,821 9,392 - -Insurance claims 265,443 280,166 - -Restricted deposit at a financial institution over 1 year 125,588 123,328 - -Other assets 81,278 50,650 698 247Total 478,130 463,536 698 247

The restricted deposit at a financial institution, which matures over one year from now, is pledged against long-term loans with a local financial institution. The restricted deposit must be maintained at a minimum amount of the next two principal and interest payments after the two-year grace period expired on 30 September 2013.

19 Interest-bearing liabilities

Consolidated Separate financial statements financial statements Note 2013 2012 2013 2012 (restated) (in thousand Baht) Current Bank overdrafts 12,140 7,230 - - Short-term loans 1,168,349 1,263,004 - - Short-term loan from related parties 5 - - 5,916,004 5,660,905Current portion of long-term loans 2,279,612 3,318,265 220,000 40,000Current portion of finance lease liabilities 4,239 5,373 - - 3,464,340 4,593,872 6,136,004 5,700,905 Non-current Long-term loans 6,627,589 5,387,990 940,000 1,160,000Bonds 3,996,772 3,995,530 3,996,772 3,995,530Finance lease liabilities 9,604 11,193 - - 10,633,965 9,394,713 4,936,772 5,155,530 Total 14,098,305 13,988,585 11,072,776 10,856,435


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The periods to maturity of long-term loans as at 30 September were as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht) Within one year 2,279,612 3,318,265 220,000 40,000After one year but within five years 4,408,361 2,713,647 940,000 1,160,000After five years 2,219,228 2,674,343 - -Total 8,907,201 8,706,255 1,160,000 1,200,000

The currency denomination of long-term loans as at 30 September were as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht) Thai Baht (THB) 1,365,899 1,760,829 1,160,000 1,200,000United States Dollars (USD) 7,427,532 6,945,426 - -Qatar Riyal (QAR) 113,770 - - -Total 8,907,201 8,706,255 1,160,000 1,200,000

The Company Long-term loans Loan for convertible bond redemption was granted by a local commercial bank and is denominated in Thai Baht with a total outstanding balance of Baht 1,160 million as at 30 September 2013 (2012: Baht 1,200 million) with repayment term over 5 years and is unsecured. The loan bears interest rate at a floating reference rate plus a margin. Bonds In July 2010, the Company issued and sold two tranches of unsubordinated and unsecured Thai Baht bonds at face value worth Baht 4 billion. The details of bonds are as follows: Bond No. Number of units

Face value /unit(Baht)

Interest rate (% per annum) Maturity dated

Tranche 1 2,000,000 1,000 3.60 9 July 2015Tranche 2 2,000,000 1,000 3.82 29 June 2017 The Thai Baht bonds were issued at par with a face value of Baht 1,000 per unit. The term of the first tranche is five years from issue date and the term of the second tranche is six years, eleven months and twenty days from the issue date. The Company will pay interest every three months and will pay the entire principal amount at the maturity date.


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The movement of bonds during the year that ended on 30 September 2013 and 2012 are as follows:

Consolidated and Separate financial statements 2013 2012

(in thousand BahtAt 1 October 3,995,530 3,994,284Amortisation on deferred issuing costs 1,242 1,246At 30 September 3,996,772 3,995,530

Consolidated Short-term loans As at 30 September 2013, the Group has unsecured short-term loans in form of promissory notes, bill of exchanges, and trust receipts from local financial institutions amounting to Baht 1,168.3 million (2012: Baht 1,263.0 million). Long-term loans

Movements of long-term loans during the years that ended on 30 September 2013 and 2012 are as follows:

Consolidated Separate financial financial statements statements

2013 2012 2013 2012 (restated)

in thousand Baht At 1 October 8,706,255 7,708,881 1,200,000 -Additions 1,037,951 2,941,975 - 1,200,000Repayments (973,064) (1,873,803) (40,000) -Reclassify to short-term loan - (1,000) - -Translation adjustments 132,442 (73,226) - -Amortisation on deferred issuing costs 3,617 3,428 - -At 30 September 8,907,201 8,706,255 1,160,000 1,200,000Less current portion of long-term loans (2,279,612) (3,318,265) (220,000) (40,000)Long-term loans - net of current portion 6,627,589 5,387,990 940,000 1,160,000

a) Loans for the purchases and constructions of ocean vessels, a tender rig, support vessels and

equipment, and barges: - Loans for the purchase and construction of ocean vessels are granted by foreign

syndicated banks and are denominated in US Dollars with a total outstanding balance of USD 103.6 million as at 30 September 2013 (2012: USD 94.6 million) with repayment terms within 5 - 17 years from the vessel delivery date. As at 30 September 2013, interest rates and securities on the loans are as follows: The loan balance of USD 32.3 million (2012: USD 35.8 million): fixed rate and LIBOR

plus a certain margin and is secured by a mortgage of two vessels and a corporate guarantee by the Company.

)

)(


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The loan balance of USD 71.3 million (2012: USD 58.8 million): LIBOR plus a certain margin and is secured by a mortgage of ten of the Group’s ocean vessels and subsequently by the new build or second-hand vessels that have been acquired under these loans facilities, assignment of insurance for the collateral vessels, pledge or charge over bank accounts, and a corporate guarantee by the Company.

- Loan for the purchase of a tender rig is granted by a local commercial bank and is

denominated in US Dollars with a total outstanding balance of USD 2.7 million as at 30 September 2013 (2012: USD 5.5 million) with repayment term within 9 years. This loan bears interest at the rate of USD-LIBOR plus a certain margin, is secured by a mortgage of the tender rig, and is guaranteed by subsidiaries.

- Loan for the special maintenance of a tender rig is granted by a local commercial bank

and is denominated in US Dollars with a total outstanding balance of USD 9.0 million as at 30 September 2013 (2012: Nil) with repayment term within 2 years. This loan bears interest at the rate of USD-LIBOR plus a certain margin, is secured by a mortgage of the tender rig, and is guaranteed by subsidiaries.

- Loans for the purchase of support vessels and equipment are granted by local

commercial banks and are denominated in US Dollars, having a total outstanding balance of USD 122.1 million as at 30 September 2013 (2012: USD 126.1 million) with repayment terms within 8 - 10 years. As at 30 September 2013, the interest rate is USD-LIBOR plus a certain margin (2012: USD-LIBOR plus a certain margin). These loans are currently secured by mortgages of support vessels and are guaranteed by a subsidiary.

- Loans for working capital are granted by a foreign commercial bank and are

denominated in Qatar Riyal, having a total outstanding balance of QAR 13.2 million as at 30 September 2013 (2012: Nil) with repayment terms within 1.3 years. As at 30 September 2013, interest rate is fixed (2012: Nil). These loans are currently guaranteed by a subsidiary.

- Loans for the purchase of barges are granted by a local commercial bank and are denominated in Thai Baht with a total outstanding balance of Baht 21.4 million as at 30 September 2013 (2012: Baht 33.4 million) with repayment term within 7 years. This loan bears interest at MLR minus certain margins and is secured by a mortgage of all barges.

According to a condition of the loan agreements, the Company and its subsidiaries are not allowed to create any encumbrance on the assets which are used as collateral, except obtaining prior consent of the banks and permitted liens. The Company and its subsidiaries must comply with other conditions and restrictions stated in the term loan agreements.

b) Loans for the construction of a building and warehouse are granted by local commercial

banks and are denominated in Thai Baht with a total outstanding balance of Baht 72.7 million as at 30 September 2013 (2012: Baht 97.2 million) and repayment terms within 6.5 - 8 years. As at 30 September 2013, interest rates and the detail of mortgages are as follows:

- The loan balance of Baht 65.9 million (2012: Baht 81.4 million): MLR minus a certain

margin. The loans are secured by mortgages of the subsidiary’s land & buildings and are guaranteed by the Company.

- The loan balance of Baht 6.8 million (2012: Baht 15.8 million): the one year fixed deposit rate for personal account plus a certain margin. The loans are secured by mortgages of the subsidiary’s land & buildings and are guaranteed by the Company.


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c) Loans for the construction of machinery and warehouses and working capital are granted by local commercial banks and are denominated in Thai Baht with a total outstanding balance of Baht 111.8 million as at 30 September 2013 (2012: Baht 430.2 million) and repayment terms within 3 - 7 years. These loans bear interest at MLR minus certain margins and are secured by mortgages of a subsidiary’s partial land and construction on that land.

As at 30 September 2013, the Company as a guarantor for loans undertaken by subsidiaries, and the Company and UMS as the borrowers had breached certain loan covenants. According to Thai Accounting Standard No. 1 (Revised 2009) - Presentation of Financial Statements, the entity has to present the liability as current if an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. As a result, the long-term portion of loans amounting to Baht 972.1 million was presented as current liabilities as of 30 September 2013. Currently, management is discussing with the relevant banks and has the opinion that the outcome will not result in a material adverse effect.

20 Employee benefit obligations

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Bah Employee benefit obligations 108,640 100,473 11,121 20,371Charge to statement of income 19,845 12,087 (8,798) 4,323

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht Statements of financial position obligations for: Retirement benefits 108,640 100,473 11,121 20,371

a) Retirement benefits

The movement in the defined benefit obligations during the year is as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Bah ) Beginning balance 100,473 107,718 20,371 16,367Current service costs 32,421 33,819 2,833 6,802Interest costs 1,910 1,885 302 497Actuarial gains - (23,617) - (2,976)Curtailment gains (14,486) - (11,933) -Benefits paid (8,430) (18,356) (452) (319)Translation adjustment (3,248) (976) - -Ending balance 108,640 100,473 11,121 20,371

)

)

t

t


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The amounts recognised in the statement of income are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht Current service costs 32,421 33,819 2,833 6,802Interest costs 1,910 1,885 302 497Amortisation of actuarial gains - (23,617) - (2,976)Curtailment gains (14,486) - (11,933) -Total (included in staff costs) 19,845 12,087 (8,798) 4,323

The principal actuarial assumptions used were as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012Discount rate 3.7% - 4.3% 3.7% - 4.3% 3.8% 3.8%Future salary

increases 4% - 6% 4% - 6% 6% 6%

Mortality rate 0.01% - 1.32% 0.01% - 1.32% 0.10% - 1.32% 0.10% - 1.32%Resignation rate 0% - 31% 0% - 31% 0% - 18% 0% - 18%

b) Retention incentives

The movement in the retention incentive obligations during the year is as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand B ht) Beginning of the year - 60,808 - -Current service cost (reversal) - (14,960) - -Paid during the year - (45,847) - -Realised gains on exchange rate - (62) - -Translation adjustments - 61 - -Ending balance - - - -

The amounts recognised in the statement of income are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht) Current service cost (reversal) - (14,960) - - These amounts are included in service, selling, and administrative expenses.

)

a


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21 Share capital and warrants

The reduction of authorised share capital At the Extraordinary General Meeting of Shareholders No. 1/2013 held on 14 December 2012, the shareholders approved to reduce the Company’s authorised share capital by cancelling 75,000,000 authorised but unissued shares reserved for convertible bonds, resulting in a decrease from the existing authorised share capital of Baht 783,004,413 to a new authorised share capital of Baht 708,004,413 divided into 708,004,413 ordinary shares each of par value of Baht 1. Issue of ordinary shares and warrants At the Annual General Meeting of Shareholders No. 1/2013 held on 30 January 2013, shareholders approved the following resolutions: Increase of the authorised share capital by 424,802,647 shares at a par value of Baht 1 each

from the existing authorised share capital of Baht 708,004,413. The new authorised share capital of Baht 1,132,807,060 is divided into 1,132,807,060 shares at the par value of Baht 1 each.

Issuance and offering of the following securities:

- No more than 283,201,765 new ordinary shares at a par value of Baht 1 each in combination

with - No more than 141,600,882 units of warrants to purchase new ordinary shares of the

Company No. 3 ("TTA-W3" or "Warrants")

The above securities will be offered to existing shareholders in proportion to their shareholding percentage (Right Offering: RO) in a ratio of 5 existing ordinary shares to 2 new ordinary shares in combination with 1 Warrant (5:2:1). The RO price is Baht 14 per one share. The offering price for the Warrants is Baht 0 per one unit. The exercise price for the Warrants is Baht 17 per share (except in case of rights adjustments). Existing shareholders exercising the right to subscribe for the capital increase shares will be allocated 1 warrant for every 2 rights share subscribed.

Consolidated and Separate financial statements

Par value 2013 2012 per share Number Baht Number Baht

(in Baht) (thousand shares / thousand BahtAuthorised At 1 October - ordinary shares 1 783,004 783,004 833,004 833,004Reduction of shares 1 (75,000) (75,000) (50,000) (50,000)Increase of new shares 1 424,803 424,803 - -At 30 September - ordinary shares 1 1,132,807 1,132,807 783,004 783,004 Issued and paid-up At 1 October - ordinary shares 1 708,004 708,004 708,004 708,004Issue of new shares 1 283,202 283,202 - -Exercise of warrants 1 632 632 - -At 30 September - ordinary shares 1 991,838 991,838 708,004 708,004

)


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Allocation of capital increase ordinary shares as follows: Offering of new ordinary shares

- No more than 283,201,765 new ordinary shares at the par value of Baht 1 per share must be

offered to existing shareholders of the Company in proportion to their shareholding percentage at a ratio of 5 existing ordinary shares to 2 new ordinary shares at an offering price of Baht 14 per share.

- Existing shareholders shall have the right to oversubscribe in the RO based on the ratio

specified above by indicating their intention to oversubscribe by no more than 50 percent of existing ordinary shares held by them. Shareholders may oversubscribe, and oversubscription shares may be allocated to such oversubscribing shareholders only when there are shares left after allocation to all shareholders who have subscribed to shares proportionately to their shareholding percentage in the RO. Such allocation of oversubscription shares shall be proportionate to their shareholding percentage and shall be subject to the foreign shareholding limit as prescribed under the Articles of Association of the Company, which currently provides that foreign shareholders may hold shares in the Company up to 49 percent of total issued shares of the Company.

- Any new ordinary shares left after allocation to existing shareholders shall be allocated in a

private placement (the "Private Placement") at an offering price, which is not lower than 90 percent of market price. However, the Private Placement offering price will not be lower than the RO price.

Allocation of new ordinary shares for the exercise of Warrants

- No more than 141,600,882 new ordinary shares shall be allocated for the exercise of warrants

No. 3 to purchase ordinary shares of the Company to be offered proportionately to existing shareholders of the Company.

The registration of the increase of authorised share capital was approved by the Business Development Department, Ministry of Commerce on 6 February 2013. On 12 March 2013, the Company announced the sale to the existing shareholders of 283,201,751 rights shares, resulting in proceeds of Baht 3,964.82 million. On 14 March 2013, the Company announced the result of issuance and allocation of TTA-W3 to the existing shareholders who subscribed for newly issued ordinary shares and were allocated 141,600,255 units of TTA-W3 at an offering price Baht 0 per unit. The new ordinary shares and TTA-W3 were traded on the SET on 14 March 2013 and 25 March 2013, respectively. As at 30 September 2013, 631,797 units of TTA-W3 were exercised and registered as paid-up share capital, resulting in an increase of the Company’s paid-up share capital to Baht 991,837,961.


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Movements in the number of warrants outstanding and their related weighted average exercise prices are as follows:

Consolidated Separate financial statements financial statements

Average exercise priceper warrant

Number of

Average exercise price per warrant

Number of (in Baht) units’000 (in Baht) units’000At 1 October 2012 Issue 17 141,600 17 141,600Exercise 17 (2,390) 17 (2,390) At 30 September 2013 17 139,210 17 139,210

22 Legal reserves

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht) Opening balance 93,500 93,500 93,500 93,500Appropriation during the year - - - - Closing balance 93,500 93,500 93,500 93,500

Under the Public Limited Company Act., B.E. 2535, the Company is required to set aside as legal reserve at least 5% of its annual net profit after accumulated deficits brought forward (if any) until the reserve is not less than 10% of the authorised share capital. The legal reserve is non-distributable.

23 Share-based payment MMPLC had four share option schemes in operation during the financial year, all of which are equity-settled schemes:

i) Employee share option plan 2008 (“ESOP 2008”) was approved by MMPLC’s shareholders on

11 July 2007. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme.

ii) Employee share option plan 2009 (“ESOP 2009”) was approved by MMPLC’s shareholders on

29 January 2009. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme.


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iii) Employee share option plan 2010 (“ESOP 2010”) was approved by MMPLC’s shareholders on

28 January 2010. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives and non-executive directors. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme.

iv) Employee share option plan 2011 (“ESOP 2011”) was approved by MMPLC’s shareholders on 25 January 2011. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives and non-executive directors. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme.

Share options were granted to selected executives and non-executive directors of MMPLC and its subsidiaries. The exercise price of the granted options is equal to the average of the “Market Price”, being the price equal to the weighted average price for the shares on the Singapore Exchange (SGX-ST) fifteen consecutive trading days immediately preceding the date of grant. Options are conditional on the employee completing three years’ service (the vesting period). The options are exercisable starting three years from the grant date. MMPLC has no legal or constructive obligation to repurchase or settle the options in cash. Pursuant to the terms of each ESOP, an adjustment must be made to the exercise price and/or the numbers of options granted in the event that there is any variation to MMPLC’s issued capital, such as arising from a rights issue. This is for purpose of the mitigation of the dilution effect on the options already granted arising from such a capitalising exercise. In early October 2013, MMPLC completed a capitalisation exercise in the form of a non-renounceable non-underwritten rights issue and private placement of 627,798,180 shares at a price of SGD 0.28 for each rights share on the basis of 4 rights shares for every 5 existing ordinary shares. Accordingly, the total number of options granted pursuant to ESOP 2008, ESOP 2009, ESOP 2010, and ESOP 2011 and their respective exercise prices have been adjusted by the Remuneration Committee to be as follows:

Outstanding no.

of options Previous

exercise price (SGD per share)

Adjusted no. of options

Adjusted exercise price

(SGD per share) ESOP 2008 661,200 0.30 745,092 0.27ESOP 2009 552,000 0.81 622,037 0.72ESOP 2010 345,000 0.45 388,773 0.40ESOP 2011 620,000 0.24 698,664 0.21Total 2,178,200 2,454,566


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None of the participants in any of the said ESOPs were granted 5% or more of the total number of options originally available in each ESOP and no options were granted at a discount. Furthermore, no directors or controlling shareholders of MMPLC hold options under any of the said ESOPs and no options are held by the Company or other subsidiaries, nor any of its or their directors or employees. Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

Consolidated Separate financial statements financial statements Average Option Average Option

exercise priceSGD per share

Shares’000

exercise price SGD per share

Shares’000

At 1 October 2011 0.52 2,331 Granted 0.24 1,310 - -Forfeited 0.41 (1,109) - - At 30 September 2012 0.42 2,532 - - At 1 October 2012 0.42 2,532 Granted 0.39 276 - -Forfeited 0.33 (353) - - At 30 September 2013 0.39 2,455 - - Out of the 2,454,566 outstanding options (2012: 2,531,800 options), 1,367,129 options (2012: 672,800 options) were exercisable. No share options were exercised throughout the year. The average share price during the year that ended on 30 September 2013 was SGD 0.36 per share (2012: SGD 0.31 per share). Share options outstanding at the end of the year have the following expiry date and exercise prices: Consolidated Separate financial statements financial statements Exercise 30 30 Exercise 30 30 price September September price September September SGD per 2013 2012 SGD per 2013 2012 share Shares’000 Shares’000 share Shares’000 Shares’000Expired date: 20 November 2013 0.27 745 673 - - 16 November 2014 0.72 622 599 - - 1 December 2015 0.40 389 370 - - 15 December 2016 0.21 699 890 - - 2,455 2,532 - -

The weighted average fair value of options granted during the year determined using the Binomial Lattice valuation model was SGD 0.09 per option. The significant inputs into the model were a weighted average share price of SGD 0.23 at the grant date, exercise price shown above, volatility of 45%, dividend yield of 0%, an expected option life of 3.85 years, and an annual risk-free interest rate of 3.015% - 3.081%.


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On 15 December 2011, 1,310,000 share options were granted to MMPLC’s executives and non-executive directors with an exercise price set at the market price on that date of SGD 0.24 per share (share price: SGD 0.23 per share) (expiry date: 15 December 2016). With the effective of TFRS 2, share-based payments granted on or after 1 October 2011 will be accounted for. Given that this option has a vesting period of 3 years, the accounting expense with respect to the plan may be amortised over 3 years. The projected accounting expense calculated by an actuary which is recognised as a component of equity in the statement of changes in equity for the year that ended on 30 September 2013 amounts to Baht 0.46 million (2012: Baht 0.37 million).

24 Segment information Segment information is presented in respect of the Group’s business segments. The primary format, business segments, is based on the Group’s management and internal reporting structure. Business segments The Group comprises the following main business segments:

Segment 1 TransportSegment 2 InfrastructureSegment 3 EnergySegment 4 Holding

Business segment results Revenue and results, based on business segments, in the consolidated financial statements for the years that ended on 30 September 2013 and 2012 were as follows:

Consolidated financial statements For the year that ended on 30 September 2013 Elimination of

inter-segment

Transport Infrastructure Energy Holding transactions Total (in thousand Baht)

Revenues from operations 5,090,010 5,407,873 8,243,399 492,058 (770,251) 18,463,089Revenues from inter-segment (278,130) (63) - (492,058) 770,251 - Revenue from external customers 4,811,880 5,407,810 8,243,399 - - 18,463,089 Operating profits (losses) (3,966,053) 21,319 710,178 (203,302) (957,896) (4,395,754) Share of profits from associates and joint ventures 254,662 Finance costs (509,625)Income taxes (217,970)

Net losses for the year (4,868,687)

Property, plant, and equipment 8,783,116 1,561,896 10,291,605 314,341 (16,421) 20,934,537

Total assets 18,567,352 3,959,336 22,680,095 37,296,886 (39,412,280) 43,091,389


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Consolidated financial statements For the year that ended on 30 September 2012 (restated) Elimination of inter-

segment Transport Infrastructure Energy Holding transactions Total (in thousand Baht) Revenues from operations 4,021,663 7,031,583 5,721,169 783,726 (1,210,934) 16,347,207Revenues from inter-segment (427,208) - - (783,726) 1,210,934 - Revenue from external customers 3,594,455 7,031,583 5,721,169 - - 16,347,207 Operating profits (losses) (693,107) 91,440 533,466 (3,391,882) (205,491) (3,665,574) Share of profits from associates and joint ventures 129,426Finance costs (753,858)Income taxes (165,880)

Net losses for the year (4,455,886) Property, plant, and equipment 12,259,940 1,518,542 9,870,176 334,599 1,280 23,984,537 Total assets 21,885,743 4,466,259 16,443,402 35,880,389 (37,878,568) 40,797,225

25 Other operating income

Consolidated Separate financial statements financial statementsYears that ended on 30 September 2013 2012 2013 2012

(restated) (in thousand Baht) Dividend income 1,795 5,845 316,757 1,124,818Management fee income - - (4,273) 12,784Realised gains on cross currency and interest rate swap agreements 11,653 6,998 11,653 598Gains on disposals of investments in

subsidiaries - - 144 - Gains on disposals of short-term

investments 32,284 - 8,224 - Gains on sales of property, plant, and equipment 45,969 - - 617Compensation for termination of property, plant and equipment 14,882 - - -Interest income 38,383 67,114 38,514 210,658Gains on exchange rates 71,197 63,937 72,254 -Insurance claims received 11,785 54,342 - -Other income 84,676 117,133 33,265 72,110Total 312,624 315,369 476,538 1,421,585


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26 Expense by nature

The statements of income include an analysis of expenses by function. Expenses by nature disclosed in accordance with the requirements of various TFRS were as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht) Expenses included in vessel operating expenses Voyage expenses 1,745,167 1,174,678 - -Vessel supplies and spare parts expenses and repair and maintenance expenses 205,378 207,347 - -Crew and staff costs 369,316 323,964 - -Charter hire 1,505,038 604,223 - -Depreciation and amortisation 761,223 724,701 - - Expenses included in offshore service expenses Vessel expenses and repair and maintenance expenses 1,213,245 1,097,466 - -Crew, staff costs, and subcontractor costs 3,200,974 2,052,358 - -Charter hire and equipment rental 549,137 106,800 - -Depreciation and amortisation 816,924 800,406 - - Expenses included in costs of sales Cost of raw materials 4,113,396 5,845,413 - -Supplies and spare parts expenses and repair and maintenance expenses 41,854 39,122 - -Staff costs 91,564 77,592 - -Depreciation and amortisation 66,419 57,704 - - Expenses included in service, selling, and administrative expenses Staff costs 1,216,741 986,881 177,415 178,341Professional fees 164,637 165,696 30,172 68,028Office and office equipment rental 52,261 56,942 7,167 6,285Depreciation and amortisation 220,863 238,064 49,112 56,079 Impairment charges and write-offs Impairment on amount due from related parties 10,123 232,305 - - Impairment on short-term loans to

related parties - 123,996 - - Impairment on inventories and vessels

supplies and spare parts 243,294 107,639 - - Impairment on long-term loans to

related parties - 551,780 - 2,731,526


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Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (restated) (in thousand Baht) Impairment on investments in

subsidiaries, associates, and joint venture 120,245 - 412,276 836,872

Impairment on goodwill 516,031 2,318,666 - -Impairment on property, plant, and equipment and intangible assets 4,004,446 535,869 - 8,207Write-off of property, plant, and equipment 659 170,410 - -Write-off of deferred arrangement fee for loan - 206,342 - -

27 Income tax expense

Income taxes as shown in the consolidated and Company statements of income are calculated based on net taxable income from non-BOI activities using a principal tax rate for operations in Thailand and specific tax rates applicable to each respective country for overseas operations. Non-BOI activities comprise gains from disposals of assets, shipping related services including agency, drilling services outside Thailand, offshore related services, and production and trading of fertiliser and coal. Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013, and 2014; from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1 January 2013 and 2014, respectively. It is understood that the Government will proceed to amend the law in order to maintain the corporate income tax rate at not higher than 20% for the accounting period 2015 which begins on or after 1 January 2015 and onwards in order to give full effect to the Cabinet resolution dated 11 October 2011 to increase Thailand’s tax competitiveness.


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28 Losses per share

Basic losses per share The calculation of basic losses per share for the year was based on the losses for the year attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the year as follows:

Consolidated Separate financial statements financial statements Years that ended on 30 September 2013 2012 2013 2012 (restated) (in thousand Baht / thousand shares) Losses for the year attributable to equity holders of the Company (basic) (5,080,218) (4,494,434) (594,655) (2,899,981) Number of ordinary shares outstanding at 1 October 2012 and 2011 708,004 708,004 708,004 708,004 Effect of new shares issued during the year 158,435 - 158,435 - Weighted average number of ordinary shares outstanding (basic) 866,439 708,004 866,439 708,004 Losses per share (basic) (in Baht) (5.86) (6.35) (0.69) (4.10) Diluted losses per share There was no potential dilution in losses per share from the warrants, because the average share price during the year 2013 was lower than the exercise price.

29 Dividends

a) For the year that ended on 30 September 2013

MMPLC At the Annual General Meeting of Shareholders No.1/2013 held on 28 January 2013, the shareholders approved the payment of an annual dividend of Baht 0.0274 per share, amounting to Baht 21.5 million. The dividend payment was made to shareholders on 22 February 2013.

b) For the year that ended on 30 September 2012

The Company At the Annual General Meeting of Shareholders which was held on 31 January 2012, the shareholders approved the annual dividend payment for the year that ended on 30 September 2011 at Baht 1.00 per share amounting to Baht 708.0 million. However, since the Company announced an interim dividend of Baht 0.50 per share in June 2011, the remaining dividend of Baht 0.50 per share be paid to shareholders. The annual dividend payment was made on 23 February 2012. However, dividends of Baht 1,050 were not paid to certain shareholders due to disqualification. As a result of the dividend payment, the conversion price of convertible bonds was adjusted to Baht 50.18 per share (previously Baht 50.35 per share) with effect from 8 February 2012 to 24 September 2012.


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UMS At the Annual General Meeting of Shareholders which was held on 24 January 2012, the shareholders approved the annual dividend payment from the net income of UMS for the year that ended on 30 September 2011 at Baht 0.20 per share amounting to Baht 30.7 million. The annual dividend payment was made on 20 February 2012.

30 Promotional privileges As at 30 September 2013, one direct subsidiary and six indirect subsidiaries received promotional privileges from the Board of Investment (“BOI”) under services of submerged structure inspection, service of underwater equipment, service of inspection of marine pollution, drilling services, trade and investment service office, and port services. The main privileges include exemption from payment of import duty on machinery and exemption from corporate income taxes for the promoted activities for a period of 8 years from the date when income is first derived, or when approval is given by the BOI. Furthermore, a shipping subsidiary received promotional privileges from the Maritime and Port Authority of Singapore (“MPA”) under service of domestic and international shipping. The main privileges include exemption from corporate income taxes for the shipping profits for the period commencing from 8 September 2008 to 8 September 2016. To be entitled to the privileges, the Group must comply with the conditions and restrictions provided in the promotional certificates.

31 Financial instruments

Financial risk management policies The principal financial risks faced by the Group are foreign exchange rate risk, interest rate risk, bunker prices, freight rates, and credit risk. The objective in using financial instruments is to reduce the uncertainty over future cash flows arising from movements in exchange rates, interest rates, bunker prices, and freight rates, and to manage the liquidity of the cash resources. Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders and issue new shares or bonds. Foreign exchange rate and interest rate risk The exchange rate risk is the principal risk faced by the Group as certain purchases and services are entered into foreign currencies and also interest rate risk, which is the risk that future movements in market interest rates will affect the results of the Group’s operations and its cash flows. The Group manages these risks as follows:


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a) Cross currency and interest rate swap contracts

The Company entered into cross currency and interest rate swap contracts with a commercial bank against 5 year and 7 year Thai Baht bonds with maturities in 2015 and 2017. The Company has locked in fixed USD interest rates of 3.65% and 3.60% per annum, respectively. As at 30 September 2013, the outstanding bond balances were USD 127.83 million (2012: USD 127.83 million) and these bonds had notional amounts of Baht 4,000 million (2012: Baht 4,000 million).

The Company entered into a cross currency and interest rate swap contracts with a commercial bank against a long term loan with repayment term over 5 years. The Company swapped interest rates from 6M THBFIX + 2.00% per annum to USD 6M Libor + 2.93% per annum. In September 2013, the Company partially unwind the swap in order to reverse some obligations to THB to match with its sources of funds. Therefore, as at 30 September 2013, the outstanding long-term loan balance was divided into 2 currencies: (1) THB 280 million and (2) USD 28.25 million (2012: USD 38.52 million) and this loan had a notional amount of Baht 1,160 million (2012: Baht 1,200 million).

On 11 August 2011, UMS, a subsidiary, entered into an interest rate swap contract with a commercial bank for a long term loan in Thai Baht currency. The loan had a notional amount of Baht 500 million. We have swapped the floating interest rate of 6M THBFIX plus 1.25% per annum to a fixed interest rate of 4.37% per annum. As at 30 September 2013, there was no outstanding loan balance (2012: Baht 245 million).

The net fair values of the cross currency and interest rate swap contracts at the statements of financial position date are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht) Unfavorable on cross currency and interest rate swap contracts 197,912 248,144 197,912 248,144 Unfavorable on interest rate swap contract - 408 - -

The fair values of cross currency and interest rate swap contracts have been calculated (using rates quoted by the counterparty to the contracts) as if the contracts were terminated at the statements of financial position date.

b) Forward foreign exchange contracts

UMS, a subsidiary, entered into forward foreign exchange contracts with local financial institutions in order to hedge the foreign exchange risk relating to trust receipts. As at 30 September 2013, the outstanding contract, whose settlement date is 22 October 2013 (2012: between 15 October and 25 October 2012) is as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht)

USD 0.5 million at rate Baht 29.14 per USD 1 (2012: USD 3.1 million at rates Baht 30.93 - 31.19 per USD 1) 15,611 96,556 - -


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The net fair values of the forward foreign exchange contracts at the statements of financial position date are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht) Favorable (unfavorable) on forward foreign exchange contracts 1,376 (884) - - The fair values of the forward foreign exchange contracts have been calculated (using rates quoted by the counterparty to the contracts) as if the contract was terminated at the statements of financial position date.

c) Bunker swap contracts

During the year 2013, a subsidiary entered into bunker swap contracts with commercial banks for hedging bunker prices in connection with long-term cargo contract commitments. We have locked in bunker price at the range of USD 588.4 - USD 642.0. As at 30 September 2013, the outstanding bunker quantities were 11,500 metric tones. The net fair values of the bunker swap contracts at the statements of financial position date are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand USD) Favorable (unfavorable) on bunker swap contracts, net 134 (254) - (271)

d) Forward freight agreements

TSS entered into forward freight agreements with financial institutions and exchange traded derivatives for hedging freight rates in connection with chartered-in vessels. TSS has locked in freight rates at a range of USD 9,500 - USD 12,850 per day (2012: USD 7,650 - USD 9,500 per day). As at 30 September 2013, the outstanding forward freight agreements to sell are 180 days (2012: 450 days). The net fair values of the forward freight agreements at the statement of financial position date are as follows: Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand USD) Favorable on forward freight agreements 90 79 - -

Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due.


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Most of the Group’s income, being freight income, is normally paid by clients in advance, or prior to the corresponding cargoes being released to them. Management is therefore of the opinion that credit risk is not significant, and that the cost of hedging will outweigh the possible benefit. The Group has not entered into any derivative contracts relating to credit risk. For the offshore service income and the revenues from sales and service income, management is of the opinion that credit risk is not significant. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. Determination of fair values The carrying amounts of the financial assets and financial liabilities approximate their fair value.

32 Commitments and contingent liabilities

32.1 Capital commitments

The Group has significant capital commitments towards building, machinery, warehouse construction, ship building, dry-docking, and vessel equipment contracts but not yet recognised as liabilities as at 30 September 2013 and 2012 as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in millions) - USD 0.9 59.9 - -- VND 12,875.0 64,252.9 - - - THB 6.2 19.1 - -

32.2 Other commitments

a) Operating lease commitments

The future aggregate minimum lease payments under non-cancellable operating leases of vessels and land are as follows:

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (in thousand Baht) Not later than 1 year 670,322 564,954 - -Later than 1 year but not later than 5 years 569,824 102,410 - -Later than 5 years 117,446 88,910 - -Total 1,357,592 756,274 - -

b) Sale and purchase contracts for steam coal

As at 30 September 2013, UMS, a subsidiary, had outstanding commitments relating to sale and purchase contracts for steam coal with foreign coal suppliers for a specific volume plus or minus 10%. The coal price shall be adjusted, subject to the quality of the coal, as specified by a formula in the agreements.


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Moreover, UMS also had outstanding commitments relating to sales contracts for steam coal with domestic enterprises for a specific volume plus or minus 10% at a fixed price per contract.

32.3 Significant agreements

Vessel and rig charter contracts Consolidated

financial statements Separate

financial statements 2013 2012 2013 2012

Long-term charter-out contracts: Number of vessels and rigs - 1 - - Remaining period (months) - 23 - - Long-term charter-in contracts: Number of vessels 2 2 - - Remaining period (months) 17 - 35 12 - 17 - -

32.4 Contingent liabilities

a) Guarantees

The Company and the Group have given the following guarantees in the normal course of business:

30 September 2013 Consolidated

financial statements Baht million USD million VND million QAR millionLetter of guarantees issued by bank on behalf of the Group 25.2 20.8 24,512.6 - Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight

forwarding 58.2 254.8 - 17.6

30 September 2013 Separate

financial statements Baht million USD million

Letter of guarantees issued by bank on behalf of the Group - - Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding 58.2 120.9


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30 September 2012 Consolidated

financial statements Baht million USD million VND million

Letter of guarantees issued by bank on behalf of the Group 43.6 5.6 76,855.0 Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding 79.1 246.8 -

30 September 2012 Separate

financial statements Baht million USD million

Letter of guarantees issued by bank on behalf of the Group - - Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding 79.1 115.2

b) Other contingent liabilities

As at 30 September 2013, a subsidiary had other contingent liabilities of approximately USD 2 million (2012: USD 2 million).

33 Events after the reporting period

Further to the announcement made by MMPLC on 30 September 2013, on 3 October 2013, the Board of Directors announced that MMPLC has completed the allotment and issue of 58,105,821 Private Placement Shares (“Placement Shares”). The Placement Shares were listed for quotation on the Main Board of the SGX-ST on 4 October 2013 and rank pari passu in all respects to the other shares in issue.

One subsidiary entered into a Memorandum of Agreement to purchase an ocean vessel with purchase prices of USD 19.5 million.

On 1 October 2013, PM Thoresen, a newly established subsidiary, obtained 100% shareholding over Baconco Co., Ltd., a company incorporated in Vietnam from Soleado, a company incorporated in Singapore and under common control of the Company.

On 25 October 2013, PM Thoresen called for additional paid-up share capital from Baht 1 million to Baht 931 million, or an increase of Baht 930 million. The new paid-up share capital is under process of registration.


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On 12 November 2013, PM Thoresen purchased 1 ordinary share from Soleado in Atlantis Offshore Construction Pte. Ltd. at the price of SGD 1. PM Thoresen became the sole shareholder in Atlantis Offshore Construction Pte. Ltd. on 12 November 2013. Atlantis Offshore Construction Pte. Ltd. was renamed to PM Thoresen Asia (Singapore) Pte. Ltd. on 14 November 2013.

At the Board of Directors Meeting of MMPLC held on 26 November 2013, the Board approved to recommend an annual dividend payment equal to 90% of the net profits for the year that that ended on 30 September 2013. Total dividends will be approximately Baht 371.7 million or equivalent to USD 12.2 million. This dividend shall be proposed to the Annual General Meeting of Shareholders of MMPLC in January 2014 for their consideration and approval.

At the Board of Directors Meeting of the Company held on 27 November 2013, the Board

resolved to approve the following matters: 1) the reduction in the registered capital of the Company from Baht 1,132,807,060 to Baht

1,132,806,419 by cancelling 641 authorised but unissued shares. 2) the increase in the registered capital of the Company by up to Baht 466,941,198 by

issuing up to 466,941,198 new ordinary shares each at a par value of Baht 1, thus totaling a capital increase by up to Baht 466,941,198.

3) the issuance and offering for sale of the following securities: (1) no more than

339,841,925 new ordinary shares each at a par value of Baht 1 in combination with (2) no more than 113,280,641 units of warrant to purchase ordinary shares of TTA No. 4 ("TTA-W4" or "Warrants"). The above newly issued securities shall be offered for sale to existing shareholders of the Company in proportion to their current shareholding percentage in the Company (the "Right Offering"), at an offering ratio of 10 existing ordinary shares to 3 new ordinary shares to 1 unit of Warrants.

The above mentioned matters will be proposed to the Annual General Meeting of Shareholders of the Company in January 2014 for their consideration and approval.


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34 Thai Financial Reporting Standards (“TFRS”) not yet adopted The Group has not adopted the following new and revised TFRS that have been issued as of the reporting date but are not yet effective, except for TAS 21 (revised 2009) - The Effects of Changes in Foreign Exchange Rates. Those new and revised TFRS are expected to become effective for annual financial periods beginning on or after 1 January in the year indicated in the following table:

TFRS Topic Year

effective TAS 12 Income Taxes 2013TFRS 8 Operating Segments 2013FAP Announcement 34/2555

Accounting Guidance for Transfers and Receives of Financial

Assets

2013

TFRIC 4 Determining Whether an Arrangement contains a Lease 2014 Management expects to adopt and apply these new and revised TFRS in accordance with the FAP’s announcement and has made a preliminary assessment of the potential initial impact on the consolidated and separate financial statements of those new standards and assessed significant potential impacts as follows: TAS 12 – Income taxes The principal change introduced by TAS 12 is the requirement to account for deferred tax liabilities and assets in the financial statements. Deferred tax liabilities and assets are the amounts of income taxes payable and recoverable, respectively, in future periods in respect of temporary differences between the carrying amount of the liability or asset in the statement of financial position and the amount attributed to that liability or asset for tax purposes; and the carry forward of unused tax losses. Currently, the Group does not recognise deferred tax in the financial statements. The Group will adopt TAS 12 with effect from 1 October 2013. The effects of the change will be recognised retrospectively in the financial statements and the statement of financial position as at 30 September 2013 and 2012 will be adjusted accordingly. As of the date of the financial statements, management is still in the process of estimating the impact for adoption of TAS 12. TFRIC 4 – Determining whether an Arrangement contains a Lease TFRIC 4 addresses arrangements that do not take the legal form of a lease, but convey rights to use items for agreed periods of time in return for a payment or series of payments. TFRIC 4 provides guidance for evaluating whether such arrangements are, effectively leases and should be accounted for under TAS 17 Leases. If an agreement is determined to contain a lease, then TFRIC 4 requires TAS 17 to be applied to classify and account for the lease.


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maNagEmENT STRUcTURE

the Company’s management structure comprises the Board of Directors and five sub-committees being executive Committee, audit Committee, Nomination and remuneration Committee, risk management Committee, and Corporate Governance Committee.

1. board of directors as of 30 September 2013

Thoresen Thai agencies Public company limited

Name Position1. mr. Prasert Bunsumpun Chairman of the Board/ Chairman of executive Committee2. mr. Chalermchai mahagitsiri executive Vice Chairman/ member of executive

Committee/ member of risk management Committee/President & Chief executive officer (effective on 1 January 2014)

3. m.l. Chandchutha Chandratat President & Chief executive officer (resigned, effective on 31 December 2013)/ member of executive Committee

4. mr. Chia wan Huat Joseph member of executive Committee/ member of Corporate Governance Committee

5. mr. Krish follet Chairman of audit Committee/Chairman of risk management Committee/Independent Director

6. mr. Santi Bangor Chairman of Nomination and remuneration Committee/Chairman of Corporate Governance Committee/ member of audit Committee/ Independent Director

7. ms. ausana mahagitsiri member of Nomination and remuneration Committee/ member of Corporate Governance Committee/Non-executive Director

8. mr. Ghanim Saad m. alsaad al-Kuwari Independent Director9. mr. mohammed rashed ahmad m. al Nasseri member of Nomination and remuneration Committee10. mr. Yves Barbieux Director11. mr. Cherdpong Siriwit Independent Director/ member of audit Committee

the Board of Directors of four core subsidiaries being thoresen Shipping Singapore Pte. ltd., mermaid maritime Public Company limited, Unique mining Services Public Company limited, and Baconco Co., ltd. are shown below.


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a) Thoresen Shipping Singapore Pte. ltd.

Name Position

1. mr. Chalermchai mahagitsiri Director

2. m.l. Chandchutha Chandratat managing Director

3. mr. David lawrence ames/1 Director

4. mr. lee wei Hsiung Director

5. mr. tan King Chang alternate Director

Note /1 mr. David lawrence ames resigned from the Board of Directors on 1 october 2013 and mr. Ian Clifford Claxton became a Board member on 1 october 2013.

b) mermaid maritime Public company limitedName Position

1. mr. Prasert Bunsumpun Non-executive Chairman

2. mr. Chalermchai mahagitsiri executive Vice Chairman

3. m.l. Chandchutha Chandratat executive Director

4. mr. Chia wan Huat Joseph executive Director

5. mr. toh wen Keong Joachim Independent Director

6. Dr. Jean Paul thevenin Non-executive Director

7. mr. Ng Cher Yan Independent Director

c) Unique mining Services Public company limited

Name Position

1. mr. Chalermchai mahagitsiri Director

2. m.l. Chandchutha Chandratat managing Director

3. mr. David lawrence ames/1 Director

4. mr. lee wei Hsiung Director

5. mr. tan King Chang alternate Director

6. mr. ekavaj amornvivat Chairman of audit Committee/Independent Director

7. mr. Suchart thammapitagkulmember of audit Committee/ member of Nomination and remuneration Committee/Independent Direc tor

8. Pol.lt.Gen. Kamrob Panyakaew member of audit Committee/Independent Director

9. mr. taratorn wongprasat Independent Director

d) baconco co., ltd.

Name Position

1. m.l. Chandchutha Chandratat/2 Director

2. mr. Vichai Chuensuksawadi/3 Director

3. mr. Sigmund Stromme Director

Note /2 m.l. Chandchutha Chandratat resigned from the Board of Directors on 13 November 2013 and mr. Chalermchai mahagitsiri became a Board member on 13 November 2013. /3 mr. Vichai Chuensuksawadi resigned from the Board of Directors on 13 November 2013 and mr. Krailuck asawachatroj became a Board member on 13 November 2013.


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2. Executives

Thoresen Thai agencies Public company limited

Name Position

1. mr. Chalermchai mahagitsiri executive Vice Chairman/President & Chief executive officer (effective on 1 January 2014)

2. m.l. Chandchutha Chandratat President & Chief executive officer (resigned, effective on 31 December 2013)

3. mr. David lawrence ames /4 executive Vice President, transport

4. mr. Krailuck asawachatroj/6 executive Vice President, Corporate finance and accounting(effective on 1 January 2014)

5. mr. Somporn Chitphentom/7 executive Vice President, Corporate Strategy

6. mr. Vichai Chuensuksawadi/5 executive Vice President, Infrastructure

7. mr. Prithayuth Nivasabutr/5 executive Vice President, Corporate Business Services

8. ms. Urai Pluemsomran executive Vice President, Corporate risk and Compliance /executive Vice President, Corporate Human resources

9. mrs. thitima rungkwansiriroj/5 executive Vice President, Corporate finance and accounting

Note /4 mr. David lawrence ames resigned from the executive on 29 october 2013. /5 mr. Vichai Chuensuksawadi, mr. Prithayuth Nivasabutr, mrs. thitima rungkwansiriroj resigned from the executives on 31 December 2013. /6 mr. Krailuck asawachatroj was appointed as an executive member on 16 July 2013. /7 mr. Somporn Chitphentom was appointed as an executive member on 1 october 2013.

the executives of the four core subsidiaries being thoresen Shipping Singapore Pte. ltd., mermaid maritime Public Company limited, Unique mining Services Public Company limited, and Baconco Co., ltd. are shown below.

a) Thoresen Shipping Singapore Pte. ltd.

Name Position

1. mr. Ian Clifford Claxton managing Director

2. mr. michael anderson Director, Commercial

3. mr. mikal Boe Director, risk management

4. mr. Henrik Jeremiassen associate Director, Chartering

5. mr. Yodchia ratanachiwakron Director, marine operations

6. mr. Vinh Julien Nguyen Director, Business Planning

7. ms. rujira Panichagit associate Director, finance & accounting

8. ms. Natawan toomngern Director, Human resources

b) mermaid maritime Public company limited

Name Position

1. mr. Chalermchai mahagitsiri executive Vice Chairman/acting managing Director

2. mr. michael Van ambrose managing Director, mermaid offshore Services ltd.

3. mr. Stephen Gregor lenz executive Director, mermaid Drilling ltd.

4. ms. Siriwan Chamnannarongsak Group Chief finance officer


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c) Unique mining Services Public company limited

Name Position

1. mr. Krisda leeaphorn acting managing Director/Deputy managing Director/acting Chief financial officer and General Support

2. mr. Vichai Chuensuksawadi/8 acting managing Director

3. mr. Phatphong Phongsathiansak Director, Sourcing and logistics

4. mr. Vasa Kosadat Director, Sales and marketing

5. ms. rachadaporn Domrongsin accounting manager

Note: /8 mr. Vichai Chuensuksawadi resigned from acting managing Director of Unique mining Services Public Company limited on 1 December 2013.

d) baconco co., ltd.

Name Position

1. mr. Pinguet Didier Deputy General Director & Commercial Director

2. mr. Siquet Pierre louis Bernard General Director3. mr. Ho Ngoc Chau financial & administrative4. mr. Ngo Xuan Giang Chief representative, Hai Phong Brunch5. mr. Nguyen Dang Cat Plant manager6. mr. Ho minh Phuc Sales manager

Organisation chart of the company as of 30 September 2013Thoresen Thai agencies Public company limited

Corporate Governance Committee

executive Committee

board of directors

Infrastructure Group

Corporate Services

transport Group

remuneration & Nomination Committee

Human resources

Strategy and Business

Development

office of Corporate

affairs

energy Group

Corporate accounting &

finance

President & Chiefexecutive officer

executive ViceChairman

office of Internal audit

risk management and Compliance

audit Committee risk management Committee


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3. company Secretarythe Board of Directors has appointed ms. mantanee Surakarnkul as Company Secretary. the role and responsibilities of the Company Secretary can be viewed at item Company Secretary and Board Committees of the Corporate Governance report.

4. Remuneration of the directors and Executives 4.1 Thoresen Thai agencies Public company limited

Remuneration for the board, the board committees, and Senior Executive Officers

the Board’s remuneration consists of

total standard monthly fees and attendance fee per meeting for non-executive directors.

the Chairperson of the Board of Directors and sub-committee shall receive an attendance fee equal to 1.20 times the attendance fee of other non-executive directors and sub-committee members.

travelling allowance shall be paid to foreign directors who travel into thailand to attend Board of Directors meetings or committee meetings.

the executive Director(s) shall receive no monthly fees or other forms of remuneration.

Bonus if the Company’s performance achieves criteria to distribute bonus to directors as approved by the Company’s shareholders.

the Senior executive officers’ compensation consists of cash remuneration (salary) and other remuneration consists of long term incentives, provident fund, and social security contributions.

Remuneration in cash

The board’s Remuneration

at the 2013 aGm, tta’s shareholders approved the remuneration of tta’s Board/1 as follows:

total standard monthly fees for all nine (9) non-executive directors shall be Baht 430,000. If an additional non-executive director is appointed to the Board, he/she will receive a standard monthly fee of Baht 35,000. the non-executive directors shall receive an attendance fee of Baht 45,000 per meeting. the Chairperson of the Board of Directors shall receive an attendance fee of Baht 54,000 per meeting, which is equal to 1.20 times the attendance fee of other

non-executive directors.

the Chairperson of the aC shall receive an attendance fee of Baht 48,000 per meeting, which is equal to 1.20 times the attendance fees of other aC members, while other aC members shall each receive an attendance fee of Baht 40,000 per meeting.

the Chairperson of the Nominat ion and remuneration Committee shall receive an attendance fee of Baht 36,000 per meeting, which is equal to 1.20 times of the attendance fee of other members of the Nomination and remuneration Committee members. other remuneration and Nomination Committee members shall each receive an attendance fee of Baht 30,000 per meeting.

the Chairpersons of the risk management Committee and the Corporate Governance Committee shall each receive an attendance fee of Baht 18,000 per meeting, which is equal to 1.20 times the attendance fees of other members of the risk management Committee and the Corporate Governance Committee. other members shall each receive an attendance fee of Baht 15,000 per meeting.

travelling allowance shall be paid to foreign directors who travel into thailand to attend Board of Directors meetings or committee meetings as follows:

- from asia to thailand: USD 500 per day

- from europe/USa and others to thailand: USD 1,000 per day

the executive Director(s) shall receive no monthly fees or other forms of remuneration.

to align the interests of the Board and shareholders, a bonus for all non-executive Directors is proposed to be paid only after a 15% return on parent shareholders funds/2 is achieved. once this threshold is reached, a bonus equal to 0.50% of annual consolidated net profit above a 15% return on parent shareholders funds will be shared equally among all non-executive Directors.

Note: /1 remuneration package of the Board of Directors and

sub-committees was approved by the shareholders at the

annual General meeting of the Shareholders on 2 march 2011, and

there have been no changes after that. However, the remuneration

package is proposed to shareholders for acknowledgement

pursuant to the Best Practices of Corporate Governance by the

Set. /2 return on parent shareholders funds= tta consolidated net profit – unrealised exchange gains or losses

paid up share capital + share premium + legal reserve + retained earnings


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164

remuneration and Bonus for the Board and Board Committees for the 2013 financial YearUnit: Baht

Name

board of directors attendance Fees

Total (Standard

and attendance fees)

Travelallowance

(only foreign

directors)(USd)

Standard Remuneration bonus

board ofdirectors

audit committee

Executive committee

Nomination and

Remunerationcommittee

corporate governancecommittee

Riskmanagement

committee

1. mr. Prasert Bunsumpun 1,800,000 - 594,000 - 836,000 - - - 3,230,000 -

2. mr. Chalermchai mahagitsiri 140,000 - 225,000 - 120,000 - - 15,000 500,000 -

3. m.l. Chandchutha Chandratat 0 - 0 - - - - 0 0 -

4. mr. Chia wan Huat Joseph 420,000 - 540,000 - 480,000 - 45,000 - 1,485,000 -

5. mr. Krish follett 420,000 - 540,000 672,000 - - - 36,000 1,668,000 -

6. mr. Santi Bangor 420,000 - 540,000 520,000 - 180,000 54,000 - 1,714,000 -

7. ms. ausana mahagitsiri 420,000 - 450,000 - - 270,000 30,000 270,000 1,170,000 -

8. mr. Ghanim Saad m. alsaad al-Kuwari

420,000 - 45,000 - - - - - 465,000 -

9. mr. mohammad rashed ahmad m. alnasseri *

280,000 - 315,000 - - 150,000 - 150,000 745,000 20,000

10. mr. Yves Barbieux ** 92,581 - 90,000 - - - - - 182,581 3,000

11. mr. Cherdpong Siriwit *** 280,000 - 270,000 320,000 - - - - 870,000 -

Total 4,692,581 0 3,609,000 1,512,000 1,436,000 600,000 129,000 51,000 12,029,581 23,000

Note: * mr. mohammad rashed ahmad m. alnasseri became a Board member on 30 January 2013 and became a member of NrC on 14 february 2013. ** mr. Yves Barbieux became a Board member on 12 July 2013. *** mr. Cherdpong Siriwit became a Board member on 30 January 2013 and became a member of aC on 12 february 2013.

remuneration and Bonus for the Board and Board Committees who resigned during the financial year 2013 Unit: Baht

Name

board of directors attendance Fees

Total (standard and

attendance fees)

Total Travelling allowance (only

foreign directors)(USd)


board of directors audit committee

Nomination and Remuneration

committee

Risk management

committee

1. Dr. Pichit Nithivasin 140,000 - 180,000 - 144,000 - 464,000 -

2. mr. oral wilson Dawe 105,000 - 180,000 - 120,000 15,000 420,000 4,000

3. mr. Peter Stokes 140,000 - 90,000 120,000 - - 350,000 2,000

Total 385,000 0 450,000 120,000 264,000 15,000 1,234,000 6,000

Note: - Dr. Pichit Nithivasin and mr. Peter Stokes resigned from the Board of Directors on 30 January 2013. - mr. oral wilson Dawe resigned from the Board of Directors on 26 December 2012.

Remuneration of Executivesremuneration of executives in the form of salary and bonus and other cash remuneration is as follows:

Executive during financial year/full-year

equivalent people 2013

Executive during financial year/full-year

equivalent people 2012

total salary and bonus 10 persons/7.37 persons Baht 71.35 million 8 persons/7.54 persons Baht 66.03 million

other remuneration(Provident fund contributions by tta)

10 persons/7.37 persons Baht 6.21 million 8 persons/7.54 persons Baht 5.63 million

Note: there are total ten (10) executives in financial year 2013. one executive resigned during the financial year.


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165

remuneration of the directors and executives of four core subsidiaries being thoresen Shipping Singapore Pte. ltd., mermaid maritime Public Company limited, Unique mining Services Public Company limited, and Baconco Co., ltd. are shown below.

4.2 Thoresen Shipping Singapore Pte. ltd.

(1) Remuneration in cash

a) No cash remuneration paid to directors of thoresen Shipping Singapore Pte. ltd.

b) total cash remuneration to two executives of thoresen Shipping Singapore Pte. ltd. for the financial year ended on 30 September 2013 consisted of salary and bonus amounted to SGD 750,474

(2) Other remuneration

other remuneration of directors None

other remuneration of executives None4.3 mermaid maritime Public company limited


a) total remuneration of eight directors of mermaid maritime Public Company limited for the financial year ended on 30 September 2013

Unit: Baht

Name

board of directors attendance FeesTotal

(Standard and attendance fees)

Travel allowance

(Only foreign directors)


audit committee

Executive committee

Nomination committee

Remuneration committee

Risk management

committee

1. mr. Prasert Bunsumpun 900,000 - - 720,000 - - - 1,620,000 -2. mr. Chalermchai mahagitsiri - - - - - - - - -3. m.l. Chandchutha Chandratat - - - - - - - - -4. mr. Chia wan Huat Joseph 600,000 - 420,000 480,000 138,000 138,000 7,475 1,783,475 -5. mr. Surasak Khaoroptham* 500,000 - - - - - - 500,000 -6. mr. Ng Cher Yan 645,000 - 675,000 - 150,000 225,000 - 1,695,000 660,0007. mr. toh wen Keong Joachim 645,000 - 450,000 - 225,000 150,000 - 1,470,000 660,0008. Dr. Jean Paul thevenin ** 406,452 - 265,000 - 87,071 87,071 4,983 850,577 -

Total 3,696,452 - 1,810,000 1,200,000 600,071 600,071 12,458 7,919,052 1,320,000

Note : * mr. Surasak Khaoroptham resigned from the Board of Directors in July 2013. **Dr. Jean Paul thevenin was appointed as a director in January 2013.

b) total remuneration of four executives for the financial year ended on 30 September 2013 consisted of salary and bonus amounted to Baht 19,127,680.-


other remuneration of directors

None

other remuneration of executives

the Company provides provident funds to one executive with the contribution from the Company amounted to 7% of his based salary or Baht 318,150 for the financial year ended on 30 September 2013.


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166

4.3 Unique mining Services Public company limited


a) remuneration in cash of nine directors for the financial year ended on 30 September 2013

Name Position

2013

Remuneration (baht/year)

attendance Fees (baht/year)

board of directors

audit committee


committee

1. Pol. Gen. Chidchai Vanasatidya Chairman of the Board No director fee as he receives salary in the executive position of the Company

2. mr. Chalermchai mahagitsiri Vice Chairman No director fee as he receives salary in the executiveposition of the Company

3. mr. Somporn Chitphentom* Director No director fee as he was appointed as director on 6 November 2013

4. mr. Chia wan Huat Joseph Chairman of Nomination and remuneration Committee/Director

No director fee as he receives salary in the executive position of the Company

5. ms. ausana mahagitsiri member of Nomination andremuneration Committee/Director

240,000 90,000 - 15,000

6. mr. ekavaj amornvivat Chairman of audit Committee/Independent Director

240,000 135,000 180,000 -

7. mr. Suchart thammapitagkul member of audit Committee/member of Nomination and remuneration Committee/Independent Director

240,000 105,000 150,000 15,000

8. Pol.lt.Gen. Kamrob Panyakaew* member of audit Committee/ Independent Director

180,000 90,000 105,000 -

9. mr. taratorn wongprasat* Independent Director 180,000 90,000 - -

Note:- Pol. lt.Gen. Kamrob Panyakaew was appointed as an independent director and an audit committee member from 24 January 2013- mr. taratorn wongprasat was appointed as an independent director and an audit committee member from 24 January 2013.- mr. Somporn Chitphentom replaced m.l. Chandchutha Chandratat as a director from 6 November 2013.

b) total remuneration of eight executives for the financial year ended on 30 September 2013 consisted of salary amounted to Baht 18,186,166.66. Bonus was paid in December 2013 and is not included in this period.


other remuneration of directorsNone

other remuneration of executives

the Company provides provident funds to employees at the contribution rate 5%, 7% and 10%. In the financial year ended on 30 September 2013, none of the executives was member of Provident fund of the Company.

4.4 baconco co., ltd.


a) No cash remuneration paid to directors of Baconco Co., ltd.

b) total cash remuneration to six executives of Baconco Co., ltd. for the financial year ended on 30 September 2013 consisted of salary and bonus amounted to Baht 11,229,443.


other remuneration of directorsNone

other remuneration of executivesNone


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167

INcOmE STRUcTURE

aUdIT FEES

audit feesthe Company and its subsidiaries paid audit fees to audit firms for the last financial year of Baht 19,449,934.

Non-audit feesthe Company and its subsidiaries paid non-audit fees to audit firms for the last financial year of Baht 5,353,782, primarily relating to auditing the subsidiaries’ compliance to the conditions in the approved International Shipping enterprise (“aIS”) scheme, BoI’s certificates, tax filling and tax advice.

group of business generated by

company’sStake

(%)

Revenue

2013 % 2012 % 2011 %

transport Group Shipping 100 4,937,883,434 26 3,740,694,553 22 5,685,562,845 29

energy Group mermaid 57.14 8,349,682,130 44 5,687,063,854 34 5,479,585,371 28

Coal/Infrastructure Group UmS 88.68 1,931,065,483 10 3,427,649,084 20 3,275,623,527 17

fertiliser/Infrastructure Group Baconco 100 3,229,389,323 17 3,375,802,043 20 2,970,482,153 15

others/Infrastructure Group Gtl/CmSS 51/100 269,794,242 2 245,423,364 2 265,758,037 2

other income 312,560,107 2 315,369,280 2 1,696,842,460 9

Total 19,030,374,719 100 16,792,002,178 100 19,373,854,393 100


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RISk FacTORS

Risk managementtta focuses on the following risk categories: strategic, operational, compliance, and financial risks. the risk overview highlights the main risks known to tta, which could hinder it in achieving its strategic and financial objectives. Some risks not yet known to tta, or currently believed not to be material, could in the future have a major impact on tta’s businesses, objectives, revenues, income, assets, liquidity, or capital resources.

risk management forms an integral part of the business planning and review cycle. the Company integrates risk analysis and controls into its daily operations, and management is responsible for identifying the critical business risks and for the implementation of fit-for-purpose risk responses.

taking risks is an inherent part of the business, so a structured risk management process encourages management to take risks in a controlled manner. Strategic risks and opportunities may affect tta’s strategic ambitions. operational risks include adverse unexpected developments resulting from internal processes, people and systems, or from external events that are linked to the actual running of each business. Compliance risks cover unanticipated failures to implement, or comply with, appropriate policies and procedures. within the area of financial risks, tta identifies risks related to foreign exchange, interest rate, and counterparty.

Strategic Riskstta’s global operations are exposed to economic and political developments in countries in which it operates or trades.

for example, the high degree of unemployment in certain countries and the sustainable level of commodities demand growth in China directly affect the different businesses. Numerous other factors, such as fluctuation of energy and raw material prices, as well as global political conflicts, including the middle east and other regions, could continue to impact macroeconomic factors and the international capital and credit markets.

tta may encounter difficulty in planning and managing operations due to unfavourable political factors including unexpected legal or regulatory changes, such as foreign exchange import or export controls, increased marine regulations, or restrictions on repatriation of returns from foreign investments. as emerging markets are becoming increasingly important in tta’s operations, the above-mentioned risks are also expected to grow and could have an adverse impact on tta’s financial condition and operating results.

tta manages this risk through ongoing periodic review of the strategic plans defined by each business unit. Such review focuses on preserving or enhancing competitiveness, indentifying additional growth opportunities, and responding to industry, regulatory, or macroeconomic changes or trends, which impact each business. In addition to the internal resources, management also consults industry and financial experts and frequently interacts with a number of reliable institutions and other sources to check information creditability and analyse differences among various assumptions. this ongoing review enables corrective actions to be taken well in advance of significant changes, which might impact the performance of the Group.


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as a number of our businesses are highly capital intensive, the timing, nature, pricing, and financing of investments in both existing businesses and new activities is critical.

rigorous investment criteria have been established and are closely followed in the course of any new investment discussions. risks in connection with investment decisions are minimised by the use of detailed guidelines and multi-level review of all significant investments.

as the Group has grown and added activities both domestically and internationally, the complexity of our operations and the skills required to effectively manage such operations has grown as well.

the Group now has both majority-owned subsidiaries and associate companies, with a number of them listed on various stock markets. In addition to the regulatory and compliance risks (which are addressed below), the continuing growth of the Group, both in its existing businesses and through new investments, will create ongoing challenges to manage the various businesses and to ensure high quality human resources are in place to provide such oversight. to mitigate this risk, tta has significantly increased efforts in the recruitment, training and development, and retention programmes to meet our anticipated personnel needs.

Operational RisksTransport group

Risks relating to shipping business

the dry bulk shipping company is exposed to risks of marine disaster, environmental mishaps resulting in substantial claims, cargo/property loss or damage, and business interruptions due to accidents or other events caused by mechanical failure, human error, political action in various countries, labour strikes, piracy, adverse weather conditions, and other such circumstances and events. this could result in increased costs or loss of revenues. However, to cover against most of these risks, which are standard for an international ship owner/operator, insurance covers are available in the international insurance industry. accordingly, the dry bulk company is adequately covered against such aforesaid circumstances and events, although insurance premiums do vary with a company’s perceived

exposure to these risks.

the operations of the Company are subject to extensive and changing regulations. Non-compliance with these regulations may result in the detention of ships leading to loss of revenues or claims from charterers, significant expenses for ship modifications or changes in operating procedures. However, the Company is vigilant on these issues and maintains operations in compliance with internationally prescribed safety and technical standards.

the operations of the ships require skilled personnel to be employed as crew to operate its ships. likewise, management requires skilled managers at the corporate level with appropriate technical knowledge and experience. Sourcing and retaining such personnel is crucial for the business operations of the dry bulk company. However, due to the adoption of fair and reasonable staffing policies, the Company has been successful in sourcing and retaining highly skilled and qualified personnel.

as the dry bulk company increases its level of contracts of affreightment (“Coa”), the exposure to changes in the oil price also rises. to mitigate this risk, the Company actively hedges bunker requirements for its Coa’s.

the shipping industry and market is cyclical, experiencing volatility in profitability, vessel values, and freight rates, resulting from changes in the supply of and demand for shipping capacity.

In the Company’s opinion, given the uncertainty and the extreme volatility in the market where rates can shoot up or collapse very quickly, it is always prudent to secure future earnings, at reasonably high freight rates whenever possible, as a cushion against a sudden and, more particularly, a sustained collapse of the freight rates in the spot market. to limit this volatility, the Group’s objective is a diversified and balanced fleet employment. the Company employs a certain percentage of the fleet on period time charters, which are supplemented by Coa’s and tramp services. the demand side of the Company’s business is generated by the quantity of cargo its vessels are required to transport. Severe depression in growth and trade could reduce the demand for ships.

as with any commercial enterprise, the dry bulk company is exposed to counterparty risk. this is particularly true in times of financial hardship.


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However, the Company is always conscious of the counterparty risk associated with its period charters and takes appropriate evaluative steps before engaging in charters. furthermore, regardless of credit-worthiness, the dry bulk company maintains rigid payment standards. It is for this reason that through the depressed market of the last year, the Company did not suffer any significant losses on account of defaults by charterers.

the Company is not exposed to any risk of concentration of its business with any one customer and any loss of business from one such customer shall not have any significant impact on the Company’s business and will not result in sudden and significant loss of revenues.

World events could affect the company’s results and financial condition.

In the past, political conflicts have resulted in attacks on vessels, mining of waterways, and other efforts to disrupt international shipping. acts of piracy have also affected vessels trading in regions, such as the middle east and South China Sea. any of these occurrences could have a material adverse impact on the Company’s operating results and financial condition.

the continued level of piracy attacks and our experience over the last three years have led it to provide significant additional passive deterrents, preparations, drills, procedures, and training of sea staff prior to entering and during transit of piracy-affected areas. these additional measures include full 360 degree razor wire fencing, accommodation and bridge protection, military level personal body and head protection, and mandatory use of patrolled sea corridors. furthermore, we have purchased additional insurance coverage for protection against kidnap and ransom liabilities.

Energy group

Risks relating to the group’s Offshore Services business

mermaid provides offshore services to the oil and gas industry, and its business is affected by fluctuations in the prices of oil and gas, which impact the level of activity in oil and gas exploration, development, and production.

Depending on the market price of oil and gas, oil and gas companies may cancel or reduce their activities, thus reducing the demand for mermaid’s offshore services.

Demand for the Group’s offshore business is highly competitive and subject to periods of high demand, short supply, and high rates often followed by periods of low demand, excess supply, and low rates. the entry into the market of newly constructed, upgraded, or reactivated drilling or subsea engineering vessels will increase market supply and may inhibit the increase of rates or reduce them. mermaid’s offshore services assets may be idle, or mermaid may have to enter into lower rate contracts in response to market conditions in the future.

In addition, as most of mermaid’s subsea engineering services contracts are short-term in nature, changes in market conditions can quickly affect business. further, as mermaid’s offshore services business is project-based, its cash flow may not always be predictable and may be uneven. as a result of fluctuation in demand, its results of operations may be volatile.

mermaid’s strategy is to secure a number of different assets on long-term contracts. this provides a guaranteed earnings stream that is not affected by spot market conditions and provides a hedge against market volatility.

The group’s offshore services business is subject to a number of operating risks.

mermaid’s offshore services business is subject to various risks inherent in the oil and gas industry, such as fires, natural disasters, adverse weather condition, explosions, and encountering formations with abnormal pressures, blowouts, cratering, pipeline ruptures, and spills. a number of these risks could have severe consequences, including loss of human life or serious injury, significant damage to mermaid’s or its clients’ assets and equipment, environmental pollution, personal injury litigation, political consequences, and damage to mermaid’s reputation.

mermaid’s offshore services business is also subject to equipment failure risks, which may require long periods to repair and result in loss of revenue.


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a major system failure could result in substantial loss of life and or serious injury, damage to or loss of vessels and equipment and protracted legal or political disputes and damage to mermaid’s reputation.

mermaid constantly invests substantial capital in the fleet, and insists upon a comprehensive maintenance and repair schedule, that minimises the risk of equipment failure. furthermore, mermaid maintains a high focus on safety at all times, with a comprehensive safety management system in place, with clear safety guidelines and detailed safety training and awareness programs. In addition, clients also regularly inspect the fleet and provide their input to ongoing repair and maintenance programs.

there are a limited number of potential clients, particularly for the drilling business, and a limited number of projects available in the niche markets that mermaid’s offshore services business operates in. mermaid faces competition for both contracts and resources. most contracts are generally awarded on a competitive bid basis, with price being the primary factor in determining contract award, the availability and capability of equipment and experience of the contractor may also be considered in determining the award. In any given year, a small number of contracts and projects account for a significant portion of mermaid’s revenues and profitability. the loss of any single existing client for the drilling business could thus have a material adverse impact on the drilling business and potentially mermaid’s revenues and profitability as a whole, if mermaid is unable to secure new clients to replace such a client.

mermaid works hard to maintain good relationships and its good reputation with all its major clients, nor has mermaid ever been technically disqualified from bidding for new contracts by clients with whom it has worked previously.

Infrastructure group

Risks Relating to the group’s coal logistics business

Transport related risks

UmS imports coal from Indonesia regularly. the modes used are dry bulk vessels or ocean going

barges. there are two potential risks related to this - availability of vessels and fluctuations in freight rates during any given period.

UmS is well aware of these situations and addresses them through either fixed long term contracts with carriers and/or spot contracts. In the meantime, the Company’s dry bulk shipping business provides weekly updates and analysis on freight rate movements, allowing UmS to make fast and informed decisions.

Risk related to coal procurement

major factors that affect procurement and cost are:i) availability of supply at required specification/ qualityii) Prices of required specification/qualityiii) exchange rates

risks related to supply availability include mine capacity and demand requirements from major importers. UmS is also exposed to specification and quality risks that occur in Indonesia on a regular basis. UmS identifies on an annual basis its import volume requirements, as well as the desired specifications and quality. while the volumes may not be at the levels of the major import countries mentioned, the major Indonesian suppliers do participate in our bids of 50% of the volume or more. at the same time, specifications and quality requirements are managed strictly through the coal sourcing agreements that include rejection limits and penalties.

from a pricing perspective, most of the coal indices are tied to world market rates. the price of coal will fluctuate based on global supply and demand. UmS closely monitors coal price indexes and through a balanced long term fixed and spot coal sourcing agreements is able to manage the cost of goods sold.

approximately 90 percent of UmS’ cost of goods sold is denominated in US dollars, while all of its revenues are in thai Baht. therefore, there is potential foreign exchange risk. when the thai Baht depreciates, UmS’ cost of imported raw materials will be higher. UmS manages this risk through a policy of using forward contracts for all costs of imports and is therefore able to considerably mitigate foreign exchange rate risk.


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Risk from new competitors

New competitors continue to enter the coal distribution market in thailand. Previously it was seen that coal trading requires relatively minimal investment in terms of equipment and machinery. Increased competition has resulted in price undercutting and overall narrowing of gross margins for coal traders.

UmS continues to retain its key strategies in order to differentiate its products from competitors. for example, UmS provides consultative recommendations to customers on the quality of coal to match each type of boiler by industry type, as well as provide advice to customers on technical and other services related enquiries.

In essence, UmS screens and improves coal quality to be optimal for each type of boiler that is used by small and medium sized manufacturers. this ensures high efficiency for customers.

more recently, with increasing community concerns related to coal processing, many local and provincial government bodies are strictly enforcing or adding additional protection requirements to protect communities and the environment. UmS upgrades its facilities on an ongoing basis to meet and exceed the requirements. UmS is ISo 14001 certified.

Risk from substitute products and market expansion

In general, primary energy resources used by domestic industries are fuel oil, natural gas, and coal. fuel oil was the most popular choice among manufacturing companies due to its availability and ease of use (ease of maintenance). Natural gas is another choice for industry given its lower cost compared to fuel oil. Coal use as an energy source is still not widespread.

while coal is a viable low cost source, many manufacturers are also looking to other sources such as palm husks, wood chips, and other bio mass fuels.

Risk from communities and related environmental impacts

Coal is classified into many types including anthracite, bituminous, sub bituminous, and lignite. Currently, UmS imports bituminous and sub-bituminous coal that generates low sulphur (sulphur content is in the range of 0.1-1.5% while sulphur content in fuel oil is

in the range of 0.1-3.0%). this creates less impact to the environment.

to minimise negative perceptions and the potential for adverse environmental impact to communities, UmS engages in a closed manufacturing process that complies with government regulations. Specifically, UmS reduces particulate dispersion with a closed storage system, covering coal stockyards with plastic sheets, spraying water on coal stockpiles, building high fences around the warehouse, and planting trees around the land perimeter to trap particulates. UmS also covers trucks with plastic sheets and washes the truck tires prior to dispatch in order to prevent coal falling onto roads.

Risks Relating to the group’s Fertiliser & Warehousing business in vietnam

Risk related fertiliser raw material prices

Global and domestic fertiliser raw material prices can be volatile. while this volatility cannot be completely eliminated, it is mitigated and minimised through two approaches:

a) maintain low inventories, therefore limiting exposure in a market down turn situation and

b) firm pricing and discount policies together with customer management based on superior quality and cash sales.

Risk of fertiliser raw material procurement

Baconco purchases raw materials from both domestic and overseas sources. In general, supply is balanced with a 50/50 split domestic and foreign. with Baconco’s strategic policies of low inventory and just-in-time purchase of raw materials, it may be exposed to a higher probability of raw material shortage when global supply is tight.

Baconco has established long term relations with a number of large and medium sized suppliers internationally. these suppliers continue to be very supportive of the company based on its quality commitments, adherence to contractual obligations, and prompt payment for materials.

domestic competition for fertiliser

Vietnam is a highly competitive market for fertilisers and agrochemicals. there is currently an overcapacity of NPK production in Vietnam (bulk blending and


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granulation). In the next several years, more projects are being planned.

Baconco has chosen a strategy of differentiation and concentrates on specialised products to limit exposure to competition. overall, Baconco engages in over 50 different fertiliser formulas from generic market blends to highly specialised types. this is to ensure that Baconco stays ahead of the competition, which in general produces 10-15 product types.

Baconco also engages in multiple production processes, as well as value adding its products with some unique processes such as compaction, USP, and bio coating of fertilisers. through this approach, Baconco is able to maintain its high quality reputation and brand image.

On-time delivery of fertiliser

with Baconco’s just-in-time production policy, finished products inventory is low. this could lead to a higher probability of delivery delays to customers.

Baconco manages this risk with a good supply chain approach. the factory knows several weeks in advance about the incoming orders. Combined with a preventative maintenance program for machineries and equipment, production capacities are consistently maintained. finally through automated bagging lines and loading processes, product is delivered to customers without delays.

Foreign currency risks

Baconco purchases half of its raw materials in USD and sells finished goods domestically in VND. Given there are constant devaluations of the VND by the Vietnamese government, foreign exchange risks exist. this foreign exchange risk may be managed by maintaining low inventories (based on the company’s strategic policies) and a cash sales/payment policy resulting in zero customer debt. this approach has permitted Baconco to pay suppliers promptly and reduce USD exposure.

Baconco is also engaged in exporting some of its production, thereby generating USD income, which is used to pay raw material suppliers.

Risks related to regulatory compliance

the Vietnamese government establishes specific standards for fertiliser formulas in order to protect consumers and penalties are enforced if products are not manufactured based on tested specifications. Baconco imports raw materials from reliable foreign and domestic suppliers and already has the reputation as a high quality producer of fertiliser. with the direction calls for innovation of production formulas, Baconco’s products are always in compliance or above government stated standards.

compliance RisksRisk from Regulatory changes in countries where TTa has investments

tta takes all possible measures to protect its own legal position and prevent legal risks from arising.

the core of the programme is the tta Code of Conduct, which defines ethical behaviour guidelines. this is complemented by training and testing programs, and a whistle Blower line for reporting compliance violations.

Insofar as possible and practical, the Company limits liability and damage risks through insurance coverage, the type and scope of which is continually adjusted to meet current requirements.

Environment, Occupational health, Safety and Security Risk

tta adherence to high technical standards and rules of conduct minimises potential damage and thus ensures the continuity of plant and equipment. tta updates these preventive measures regularly. we systematically conduct health and environmental safety audits at all locations. through inspections and consultation, we minimise the risks to people and the environment.

Risk from Social and community Impacts

to address these risks, tta monitors and analyses the impacts of changes in environmental and safety laws and regulations on our operations. we closely coordinate with government agencies, apply available information to develop work plans and response measures, and ensure ongoing community relations activities in operating areas with a constant focus on community participation.


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Financial Risksthe principal financial risks are foreign exchange risk, interest rate risk, and counterparty risk. the Group uses instruments such as cross currency and interest rate swap contracts, foreign currency forward contracts, bunker swap contracts, and freight forward agreements to manage various financial risks. the objective in using these financial instruments is to reduce the uncertainty over future cash flows. It is our policy not to enter into any derivative transactions for speculative purposes.

Foreign Exchange Risk

International maritime, offshore services, third-party logistics, and fertiliser businesses utilise the US dollar as the major currency for commercial transactions and asset acquisitions. additionally, US dollar denominated loan facilities have been obtained to fund these US dollar generating businesses and investment. the Group’s primary objective is to maximise the operating revenues and minimise costs in US dollars. this ensures an appropriate balance of foreign currency revenues against foreign currency commercial expenditures, asset acquisitions, and loan obligations. residual exchange rate risks are managed through financial instruments, such as forward and swap contracts and foreign-currency deposits.

the Group has executed derivatives such as cross currency and interest rate swaps to fix our financial costs. Cross currency and interest rate swap contracts protect the Group from movements in exchange rates and interest rates. (Please see details in financial Notes no. 31)

Interest Rate Risk

the Group seeks to manage its exposure to interest rate volatility and minimise its interest costs. Interest rate volatility is mitigated through actively managing the mix of fixed and floating interest rates on our borrowings and through the use of derivatives, such as interest rate swaps, on our longer-term borrowings. furthermore, we actively manage the overall tenor of our loan portfolio to match with cash flows from operation.

counterparty Risk

most of our dry bulk freight income is normally paid by clients in advance, or prior to the corresponding cargoes being released to them. most of our offshore services income comes from top-tier national or multinational oil and gas companies. as for coal sales, the largest customers are well-established public companies in thailand and coal sales to each Sme client are not significantly large. almost all fertiliser sales are done in cash. we do not believe that counterparty risk is significant and that the cost of hedging such risk would outweigh the possible benefit. we therefore have not entered into any derivative contracts relating to this risk.


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ShaREhOldINgS by dIREcTORS/ExEcUTIvES

Shareholdings by directors as of 30 September 2013

(No. of Shares)

Nameas of

30 Sept. 12changes

during the yearas of

30 Sept. 13

1. mr. Prasert Bunsumpun 20,000 9,484 29,484

Spouse 0 0 0

2. mr. Chalermchai mahagitsiri 100,313,700 55,367,688 155,681,388

3. m.l. Chandchutha Chandratat 871,857 252,173 1,124,030

Spouse 0 0 0

4. mr. Chia wan Huat Joseph 0 0 0

Spouse 0 0 0

5. mr. Krish follett 0 0 0

Spouse 0 0 0

6. mr. Santi Bangor 0 0 0

Spouse 0 0 0

7. ms. ausana mahagitsiri 27,417,100 12,966,840 40,383,940

8. mr. Ghanim Saad m alsaad al-Kuwari 0 0 0

9. mr. mohammed rashed ahmad m.alnasseri (1) 0 0 0

Spouse 0 0 0

10. mr. Yves Babieux (2) 0 0 0

Spouse 0 0 0

11. mr. Cherdpong Siriwit (1) 0 0 0

Spouse 0 0 0

Total 128,622,657 68,596,185 197,218,842

Note : (1) mr. mohammed rashed ahmad m.alnasseri and mr. Cherdpong Siriwit became directors on 30 January 2013. (2) mr. Yves Babieux became a director on 12 July 2013.


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Shareholdings by Executives as of 30 September 2013(No. of Shares)

Nameas of

30 Sept. 12changes

during the yearas

of 30 Sept. 13

1. mr. Chalermchai mahagitsiri 100,313,700 55,367,688 155,681,388

2. m.l. Chandchutha Chandratat 871,857 252,173 1,124,030

Spouse 0 0 0

3. mr. David lawrence ames 138,681 (138,681) 0

Spouse 0 0 0

4. mr. Krailuck asawachatroj(1) 0 0 0

Spouse 0 0 0

5. mr. Somporn Chitphentom(2) 0 0 0

Spouse 0 0 0

6. mr. Vichai Chuensuksawadi 17,274 (17,274) 0

Spouse 0 0 0

7. mr. Prithayuth Nivasabutr 60,340 (60,340) 0

8. ms. Urai Pluemsomran 94,370 61,706 156,076

9. mrs. thitima rungkwansiriroj 16,177 (16,000) 177

Total 101,512,399 55,449,272 156,961,671

Note: (1) mr. Krailuck asawachatroj became an executive officer on 16 July 2013. (2) mr. Somporn Chitphentom became an executive officer on 1 october 2013.


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ShaREhOldINg STRUcTURE

major Shareholders

thoresen thai agencies Public Company limited

as of 29 November 2013 (the latest share register book closing date)

No. Shareholders Number of Shares Percentage

1. mr. Chalermchai mahagitsiri 155,681,388 15.67

2. raffles resources 1 ltd. 52,293,275 5.26

3. ms. ausana mahagitsiri 40,383,940 4.06

4. thai NVDr Co., ltd. 28,153,597 2.83

5. mr. Prateep tangmatitham 20,982,460 2.11

6. State Street Bank europe limited 15,748,604 1.59

7. east fourteen limited-Dimensional emer mkts Value fD 14,900,427 1.50

8. mr. Nurak mahatana-anon 10,838,500 1.09

9. State Street Bank and trust Company 8,259,500 0.83

10. Nortrust Nominees ltd. 8,166,900 0.82

total 355,408,591 35.76

other shareholders 638,187,900 64.24

Total of shares 993,596,491 100.00

Proportion of Shareholding

thoresen thai agencies Public Company limited

as of 29 November 2013 (the latest share register book closing date)

Share distribution by Nationality Number of shareholders Number of Shares Percentage

thai 20,427 866,019,033 87.16

foreign 106 127,577,458 12.84

Total of Shareholders 20,533 993,596,491 100.00


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dIvIdENd POlIcy

the timing and amount of dividends, if any, will depend on our operational results, financial condition, cash requirements and availability, restrictions in financing agreements, and other factors deemed relevant by our Board. Because we are a holding company with no material assets other than the shares of our subsidiaries and affiliates, our ability to pay dividends on the common shares depends on the earnings and dividend distributions of our subsidiaries and affiliates.

tta has established a policy to distribute dividends of at least 25% of the consolidated net profit after tax but excluding unrealised foreign exchange gains or losses, subject to the Company’s investment plans and other relevant factors. the Board may review and revise the dividend policy from time to time to reflect the Company’s future business plans, the needs for investment, and other factors, as the Board deems appropriate. However, dividend distributions may not exceed the retained earnings reported in the financial statements of the Company only.

the declaration and payment of dividends will always be subject to thai law. for example, thai law prescribes that the declaration and payment of dividends is subject to the discretion of the aGm on the recommendation of the Board (for final dividends) or at the discretion of the Board (for any interim dividends). furthermore, thai law generally prohibits the payment of dividends other than from profits (net profits plus retained earnings less any accumulated losses) and provided that the company first maintains a minimum reserve fund of 10% of the capital of the company, or higher if determined by company regulations, and cannot be made while a company is insolvent or would be rendered insolvent by the payment of such a dividend.

most of our subsidiaries have adhered to a policy to pay dividends to tta at not less than 70% of their net profit, except for the smaller shipping services companies, mermaid, and UmS. as listed companies on the SGX-St and maI, respectively, their Board of Directors must apply the same level of care and judgement when recommending dividends as the tta Board. mermaid’s and UmS’s possible dividend payments will depend on various factors, including return on equity and retained earnings, expected financial performances, projected level of capital expenditures and other investment plans, and restrictions on payment of dividends that may be imposed by its financing arrangements.


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cORPORaTE gOvERNaNcE REPORT

Corporate Governance is a structure and process of relationships between a company’s shareholders, board of directors, and management with an underlying objective to enhance its long-term competitiveness and shareholder value.

at the Board of Directors’ meeting on 21 December 2011, the Board established a Corporate Governance Committee (the “CGC”) to review corporate governance practices and the Code of Conduct and to monitor compliance of the practices so that it remains within an ethical framework.

the CGC reviewed the Company’s Corporate Governance Policy, which was approved by the Board of Directors on 24 December 2012.

tta’s corporate governance principles are as follows:

Rule of law: management and operations shall be in line with relevant laws, charters, regulations, and board resolutions

accountability: all concerned parties have to be aware of their duties and responsibilities

Transparency: Business activities and operations shall be auditable and transparent

Participation: recognition of the rights of shareholders and stakeholders to participate in company activities

value for money: all investments and resource utilisation must meet targeted financial and economic returns

the main components of tta’s Corporate Governance Policy are set in accordance with the guidelines of the Stock exchange of thailand are as follows:

1. rights and equitable treatment of Shareholders

2. rights of Stakeholders

3. Information Disclosure and transparency

4. Structure and responsibilities of the Board of Directors

5. Business ethics and Code of Conduct

the CGC has reviewed this report and is of the opinion that tta has generally followed the corporate governance practices discussed herein.

the CG practices in the 2013 financial year were as follows:

1. Rights and Equitable Treatment of Shareholders(a) gENERal RIghTS aNd EQUalITy

tta is accountable to its shareholders in terms of information disclosure, accounting methods, use of insider information, and conflict of interest.

tta recognises the duty to ensure fair treatment to all shareholders. tta has a duty to protect shareholders’ benefits and rights, which include, among other things, the rights to receive dividends and obtain relevant and adequate information from the Company on a regular and timely basis. tta also has a duty to disseminate transparent information and ensure management accountability through shareholders’ meeting arrangements.

each shareholder shall receive, prior to any shareholders’ meeting, complete and sufficient information concerning the proposed agenda attached to the meeting notification.

all shareholders are given proxy forms, allowing them to appoint their authorised representative or select an independent director to attend and vote at the meetings on their behalf.


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to increase communication channels and shareholder interaction, the Board has implemented a policy to give shareholders an opportunity to propose agenda items for future shareholders’ meetings. Shareholders are able to send their questions to us and propose agenda items to the Board for consideration via our website prior to any shareholders’ meetings. Guidelines that allow shareholders to nominate directors are also posted on our website.

tta allows shareholders to submit agenda items and director nominations through 30 September of each year to provide sufficient time to consider all agenda items. the policy to include agenda items and recommend director nominations is posted in tta’s website under Investor relations.

(b) ShaREhOldERS’ mEETINgS

tta conducts shareholders’ meetings in accordance with applicable laws and generally accepted practices, which allow shareholders to exercise their rights fully and in an informed manner. within four (4) months after our financial year-end, tta organises an annual General meeting of Shareholders (“aGm”). the meeting is conducted in accordance with applicable laws and Set requirements, from the calling of the meeting, the notification of the meeting agendas, the dispatch of meeting materials, the conduct of the meeting, and the distribution of minutes.

In addition, tta publishes the notice of each meeting in at least one thai language and one english language in a daily newspaper for three consecutive days no later than three (3) days prior to each aGm. we also publish the meeting notice on our website.

In fY 2013, tta held two shareholders’ meeting, namely the 1/2013 extraordinary General meeting of Shareholders (the “1/2013 eGm”) held on 14 December 2012 and the 1/2013 annual General meeting of Shareholders (the “1/2013 aGm”) held on 30 January 2013.

Procedures for the Shareholders’ meeting were as follows:

(i) Procedures prior to the meetings

the 1/2013 eGm was held on 14 December 2012 at 9:00 a.m. at the the Plaza athenee Bangkok. the 1/2013 aGm was held on 30 January 2013 at 1:30 P.m. the Imperial Queen’s Park Hotel, Bangkok.

the meeting venues are easily accessible through public transportation systems and convenient for shareholders to travel to them. the Company informed shareholders of the date, time, place, and meeting agendas together with the rationales or details of all Board resolutions on each agenda via Set’s elCID on the following day after the Board resolved to call the shareholders’ meetings.

tta uses the shareholders record date to ensure sufficient time to scrutinise meeting notices or request additional information ahead of the meeting. the notice and relevant documents to the 1/2013 eGm was sent to shareholders and the Set on 4 December 2012. the notice and relevant documents to the 1/2013 aGm was sent to shareholders and the Set on 8 January 2013, which was at least fourteen (14) days prior to the meeting. Going forward, the Company will make best efforts to send all meeting notices to shareholders more than 14 days prior to the meeting as per the Set’s best practices. the notice was also made available on tta’s website in advance so that shareholders have sufficient time to study the information to make their decisions. each agenda included the opinion of the Board.

the Company encourages all shareholders to attend the Company’s shareholders’ meetings. apart from direct mailings, the Company notified its shareholders via Set’s elCID that the 1/2013 eGm’s meeting notice and relevant documents were available to download on the Company’s website on 6 December 2012. the 1/2013 aGm’s meeting notice and relevant documents were available to download on the Company’s website on 10 January 2013.

the Company also advertised the meeting notice in at least one thai language and one english language in a daily newspaper for three consecutive days no later than three (3) days prior to the shareholders’ meeting date. the notice of the 1/2013 eGm and aGm were advertised on 8-10 December 2012, and on 21-23 January 2013, respectively.

In addition, details such as time and place of the meeting, the meeting agendas with rationale and opinion of the Board on each agenda item in the notice of the annual general meeting or extraordinary general meeting, proxy forms, and a list of documents required for attending the meeting were distributed to shareholders in advance of meetings to assist them in exercising their rights and casting their votes on each agenda item.


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(ii) at the shareholders’ meeting

In the shareholders’ meetings, tta facilitated registration by separating lines between shareholders and proxy holders. tta used a bar code system to register meeting attendees and to countvotes. envelopes were made readily available for shareholders to mail their proxy forms. the e-voting programme of the thailand Securities Depository Co., ltd. (“tSD”) was also used in the registration and vote count, increasing efficiency and transparency.

(iii) during the meeting

the Chairman of the Board of Directors presides over the meetings of shareholders. for shareholders’ convenience and clarification, multimedia presentations are shown during all meetings. tta conducts the meeting in accordance with the agenda and offers an equal opportunity for each shareholder to cast their vote.

In the 1/2013 eGm and aGm meetings, legal advisors from HNP Counsellors limited were engaged to act as independent inspectors to monitor the registration and the counting of votes, and the Chairman asked for two shareholders to bear witness to the vote counting, with two shareholders nominating themselves as witnesses, to ensure the meetings ware transparent and complied with applicable laws.

tta was rated “excellent” (scores ranging between 90-99) from the Corporate Governance report of thai listed Companies for the quality of aGm organisation in 2007-2013. the assessment results were based on the assessment form of the SeC in conjunction with the listed Companies association and thai Investors association.

(iv) Procedures following the meeting

the Company submitted to the Set the resolutions of the shareholders’ meetings with details of voting results of each agenda through the Set’s elCID and also posted the resolutions immediately in tta’s website at http://www.thoresen.com.

the Company prepared and submitted the minutes of the shareholders’ meetings to the Set and the Business Development Department, ministry of Commerce within the required time frame after the meeting. the minutes were also posted on our website.

2. Rights of Stakeholderstta acknowledges the importance of all stakeholder groups. recognising their contribution to our competitiveness and profitability, the Company takes into consideration the interests of both internal stakeholders, namely shareholders, employees, and management and external stakeholders such as creditors, suppliers, clients, communities, government agencies, and other related organisations. to safeguard their rights, tta complies with all applicable laws and regulations and has established adequate internal controls and auditing systems to monitor compliance.

(a) aNTI-cORRUPTION EFFORTS

tta conducts business with strong ethics and responsibility for all concerned parties. the Company’s Code of Conduct was published in 2010 to provide guidelines in line with tta’s business philosophies.

the Company has clear guidelines on receiving gifts and entertainment. No gift, favour, or entertainment should be accepted or given, if it obligates or might be perceived as an attempt to influence fair judgement. No director, manager, employee, and their family members should accept or receive a gift or entertainment if it is (i) not consistent with customary business practices, (ii) extravagant in value, (iii) can be construed as a kickback, bribe, or payoff in violation of any laws, and (iv) violates any other laws or regulations.

the Company set up a Procurement Policy to protect fraud by outlining procurement procedures and authorities of purchasing officers and Purchasing Committee. Purchasing Committee and acceptance Committee shall not be the same group of people.

the Company has established notification channels via tta’s website and via tta’s P.o. Box No. 33 to report any concerns, misconduct, fraudulent act, or corruption to the audit Committee and to provide protection for any person who files a complaint or cooperates in the investigation of the charge (the “whistleblower Policy”).


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(b) ShaREhOldERS

tta always makes an effort to maximise shareholders’ long-term benefits through careful consideration of business risks. all information shall be disclosed fairly and transparently in a timely manner and use our best efforts to protect our assets and reputation.

(c) EmPlOyEES

employees are regarded as valuable assets of the Company. we continually seek to recruit and retain capable and experienced employees in accordance with our strategic and operating plans.

we emphasise the importance of employees’ development at all levels by the implementation of Individual Development Plans that allow employees to create development plans concerning their indiv idual needs. we strongly bel ieve that improvement of our employees’ capabilities will ultimately increase our competitiveness in the long run.

(d) cOUNTERPaRTIES

tta conducts business affairs with our partners, competitors, creditors, suppliers, etc. according to the contracted terms and conditions in a fair and ethical manner.

(E) clIENTS

tta recognises that clients are crucial to the success of our operations. accordingly, we ensure our clients’ satisfaction by offering high-quality services that meet their needs and expectations in a fair and professional manner.

(F) INTEllEcTUal PROPERTy

tta aims to comply with legal requirements on intel-lectual property and copyrights. tta has issued an Information technology Policy that requires proper licenses for all installed software on the Company’s computers.

(g) RESPONSIbIlITy TO ThE cOmmUNITy, SOcIETy, aNd ENvIRONmENT

tta aims to achieve consistently high standards of behaviour towards society and the environment. we will manage the business with the goal to alleviate the adverse effects on the environment and ensure compliance with environmental laws and regulations.

tta encourages employees to improve their office environments and their communities. tta’s occupat ional Heal th and Safe ty work ing environmental Committee was established to improve the office environments. Details on our responsibility to the community, society, and environment can be reviewed from the Corporate Social responsibility Policy in this annual report.

3. Information disclosure and Transparencytta has strong determination to reveal timely and updated information, both financial and general information related to the Company’s business. Such information is disclosed to shareholders, investors, and any related parties via Set’s elCID, the Company’s website (www.thoresen.com), press releases, the Company’s annual Information Disclosure form 56-1, and the Company’s annual report. tta actively participates in “opportunity Days” arranged by Set on a quarterly basis.

In fY 2013, we met and provided information to interested parties on various occasions as follows:

1. one-on-one meetings with shareholders, creditors, and analysts (48 meetings)

2. Quarterly meetings with analysts to discuss our most recent financial performance (3 meetings)

3. Investor conferences (10 conferences)

4. road shows (3 road shows)

5. Quarterly presentation at the Set’s opportunity Day (4 presentations)

6. Disclosure of periodic reports, such as financial statements, quarterly financial statements, annual report, the Company’s annual Disclosure form (form 56-1), and quarterly financial results (14 disclosures)

7. Disclosure of non-periodic reports, such as the notification of general meeting of shareholders and its resolutions, asset acquisitions, and investments (40 disclosures)

8. Press releases (22releases)

9. Distribution of news and photo releases about the Company’s activities (6 releases)

10. media relations activities (15 local media interviews and 14 international media interviews)


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4. Structure and Responsibilities of the board of directors(a) bOaRd STRUcTURE

the size of the tta’s Board complies with Public limited Companies act B.e. 2535 and the Company’s articles of association.

all directors have a number of duties and responsibilities as specified in the articles of association. In conducting the Company’s business, a director shall perform his duty with responsibility, due care and loyalty, and shall comply with all laws, the objectives, the articles of association, and the resolutions of the shareholders’ meetings.

(i) Independent director

an independent director is a director who does not manage tta or any of its subsidiaries, is independent

from management and major shareholders, and has no business dealings with tta, which may compromise our interests and/or the shareholders’ interests.

the main qualifications of an independent director are as per the definition of the Notification of the Capital market Supervisory Board. the definition of an independent director is also available on the Company’s website.

(ii) members of the board of directors

tta has eleven (11) directors on the Board, which consists of two (2) executive directors (18% of the total number of directors), nine (9) non-executive directors (82% of the total number of directors), and five (5) independent directors (45% of the total number of directors). the Board as of 30 September 2013 consisted of the following persons:

members of the Board of Directors as of 30 September 2013

Name Position

1. mr. Prasert Bunsumpun Chairman of the Board/Chairman of executive Committee

2. mr. Chalermchai mahagitsiri executive Vice Chairman/member of executive Committee/member of risk management Committee/President & Chief executive officer (effective on 1 January 2013)

3. m.l. Chandchutha Chandratat President & Chief executive officer (resigned, effective on 31 December 2013)/member of executive Committee

4. mr. Chia wan Huat Joseph member of executive Committee/member of Corporate Governance Committee

5. mr. Krish follett Chairman of audit Committee/Chairman of risk management Committee/Independent Director

6. mr. Santi Bangor Chairman of Nomination and remuneration Committee/Chairman of Corporate Governance Committee/member of audit Committee/Independent Director

7. ms. ausana mahagitsiri member of Nomination and remuneration Committee/ member of Corporate Governance Committee/Non-executive Director


Independent Director

9. mr. mohammad rashed ahmad m. alnasseri

member of Nomination and remuneration Committee

10. mr. Yves Barbieux Director

11. mr. Cherdpong Siriwit member of audit Committee/Independent Director


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(iii) Segregation of Positions

the Board elects one of its non-executive directors as Chairman. the Chairman and President & Chief executive officer are two separate individuals. the Chairman oversees the implementation of policies and guidelines pursuant to the strategies established by the Board and management and ensures that Board meetings are successfully conducted. During each meeting, all directors are encouraged to actively participate and raise essential questions.

the authorities of the Board and management are clearly defined and segregated. at the same time, the Board stays away from routine tasks or business activities under management responsibility.

(iv) directors’ Term of Service on board

duration of Each Term

Under the articles of association, at every annual General meeting of Shareholders, one-third of the Board, or if the number is not a multiple of three, the number nearest to one-third, shall retire from office. In choosing those directors who retire, length of service on the Board should be considered, so that those who have served the longest are most eligible to retire. the term of each director is approximately 3 years. a retiring director is eligible for re-election.

Number of consecutive Terms of a director is Permitted to Serve

the Company believes that each of its elected directors is a highly qualified individual who is respected for being knowledgeable, moral, and effective. If shareholders show confidence in a director by re-electing him or her, the Board will honour that decision. therefore, the Company does not set a limit on consecutive terms of service by a director.

However, the Board of Directors will consider suitable solutions regarding consecutive terms of directors and independent directors in due course.

(b) cOmPaNy SEcRETaRy aNd bOaRd cOmmITTEES

the Board has appointed the Company Secretary and five (5) committees, namely the audit Committee, the Nomination and remuneration Committee, executive Committee, risk management Committee, and Corporate Governance Committee.

(i) company Secretary

the Board appointed ms. mantanee Surakarnkul as the Company Secretary on 14 august 2008 to take responsibility for matters connected with meetings of the Board and the shareholders and to contribute to best corporate governance practices. She also serves as the secretary of the Board and Corporate Governance Committee to coordinate subsequent actions under the Board’s resolutions.

the Company Secretary’s duties and responsibilities include:

to provide advice pertaining to tta’s regulations and articles of association, to monitor new laws and regulations on a regular basis, and to report any significant changes to the Board;

to arrange meetings of shareholders and the Board in accordance with applicable laws and regulations;

to prepare minutes of shareholders’ and Board meetings and to monitor execution of such resolutions on a regular basis;

to ensure that all public information disclosure is in accordance with laws and the SeC’s and Set’s regulations;

to facilitate the Board’s activities, including director orientation; and

to file and keep records of tta’s key documents, such as directors’ registration, notice to the meetings, minutes of meetings, annual reports, notice to shareholders’ meetings, and reports on directors’ and management’s interest.

Details of the Company Secretary’s functions are available on the Company’s website and in the Company’s annual Information Disclosure form (form 56-1). the Company encourages the Company Secretary to attend courses relating to company secretarial functions, including the Director Certification Program, Company Secretary Program, and effective minutes taking.

(ii) audit committee

the audit Committee (“aC”) is comprised of at least three (3) independent directors.

the aC has full-delegated authority from the Board to perform its tasks. an audit plan and meeting


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schedule are set each year to allow the aC to monitor management on the key risks identified in tta’s annual business plan.

as of 30 September 2013, the audit Committee (“aC”) included mr. Krish follett (Chairman), mr. Santi Bangor, and mr. Cherdpong Siriwit. all aC members are independent directors. During fY 2013, the audit Committee convened 14 meetings.

appointment of the auditors and Fixing the auditing Fee

the Board assigned the aC to consider and propose the appointment of the external auditors and the auditing fee to shareholders for approval at every aGm. at the 2013 aGm, the shareholders approved the following items:

1. the appointment of mr. Veerachai ratanajratkul, CPa No. 4323, mrs. Siripen Sukcharoenyingyong, CPa No. 3636, mr. Charoen Phosamritlert, CPa No. 4068, or ms. Pornthip rimdusit, CPa No. 5565, of KPmG Phoomchai audit ltd. as auditors for the 2013 financial year.

2. the audit fee in the amount of Baht 3.20 million to review and audit tta’s financial statements and consolidated financial statements.

the aC advised the Board of its assessment and recommendation for the appointment of the external auditors and the auditing fee.

the aC has proposed to appoint KPmG Phoomchai audit ltd. as external auditors of the Company to our shareholders at the next aGm to be held on 30 January 2014.

(iii) Nomination and Remuneration committee

the Nomination and remuneration Committee (“NrC”) comprises at least three (3) non-executive directors.

at the Board of Directors meeting held on 13 may 2011, the Board approved the Nomination and remuneration Committee Charter. as of 30 September 2013, the NrC included mr. Santi Bangor (Chairman), ms. ausana mahagitsiri, and mr. mohammad rashed ahmad m. alnasseri.

the NrC’s main tasks include the determination of the process and criteria for the selection and qualification of candidates nominated in accordance with the Board’s recommended structure, size, and composition. It reviews and opines on all candidates nominated (whether by the Board, shareholders, or otherwise) for appointment to the Board.

the NrC is authorised by the Board to assess the performance of top executives, including the President & Ceo and executive Vice Presidents on an annual basis in order to determine their remuneration before proposing to the Board for approval.

the NrC will also consider the remuneration of non-executive directors and propose it to the Board to recommend to the Company’s shareholders for approval.

the Board sets the level of remuneration for all non-executive directors within the limits approved by shareholders and in line with the thai Institute of Directors association guidelines regarding Director Compensation Best Practices (September 2006).

(iv) Risk management committee

at the Board of Directors meeting held on 14 may 2010, the Board approved the appointment of the risk management Committee (“rmC”) and on 14 December 2010, the Board approved the risk management Committee Charter. the rmC members comprise a minimum of four (4) members from the Company’s directors and executives.

as of 30 September 2013, the rmC included mr. Krish follett (Chairman), mr. Chalermchai mahagitsiri, the President & Chief executive officer, and executive Vice President, Corporate finance & accounting. the executive Vice President, Corporate risk, and Compliance acts as secretary of the rmC. there were 2 (two) rmC meetings in fY 2013.

the rmC’s main tasks include reviewing the effectiveness of the enterprise risk management system and be assured that material risks are identified and appropriate risk management processes are in place, including the formulation and subsequent updating of appropriate group wide policies.


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(v) corporate governance committee

at the Board of Directors meeting held on 28 November 2011, the Board approved the appointment of the Corporate Governance Committee (“CGC”) and on 21 December 2011, the Board approved the Corporate Governance Charter. the Corporate Governance Committee (the “CGC”) comprises a minimum of three (3) non-executive directors.

as of 30 September 2013, the CGC included mr. Santi Bangor (Chairman), ms. ausana mahagitsiri, and mr. Chia wan Huat Joseph. During fY 2013, the CGC convened 3 meetings.

the CGC’s main tasks include reviewing the Corporate Governance Policy and the Code of Conduct and to monitor compliance, so that tta operates within an ethical framework and to monitor ongoing improvements.

In 2012, the CGC reviewed the Corporate Governance Policy and evaluated Board performance through a self assessment process. the CGC has also developed guidelines of representative directors.

(vi) Executive committee

at the Board of Directors meeting held on 14 february 2012, the Board approved the appointment of the executive Committee (“eC”) and on 15 march 2012, the Board approved the executive Committee Charter.

the executive Committee (the “eC”) comprises a minimum of four (4) members from the Company’s directors and executives.

as of 30 September 2013, the eC included mr. Prasert Bunsumpun (Chirman), mr. Chalermchai mahagitsiri, m.l. Chandchutha Chandratat, and mr. Chia wan Huat Joseph. During fY 2013, the eC convened 12 meetings.

the eC’s main tasks include considering the Company’s business plans and annual budget for presentation to the Board, considering overall investment and financing strategies, and approve transactions within its delegated authorities.

(c) cONFlIcT OF INTEREST

(i) Potential conflict of Interest Transactions and Inter-company Transactions

Since 2009, directors and executives have been required to submit a report that summarises their related persons’ interests and securities ownership in other companies. this information is filed with tta and used to monitor potential related party or connected transactions. New tta directors and senior executives shall submit this report within thirty (30) days after being appointed.

In case there are changes in related persons and close relatives, directors and executives shall submit a revised report to tta within fourteen (14) days after changes occur.

Directors, executives, and employees must refrain from any transactions that may lead to a conflict of interest with tta. any interested directors, executives, and employees are not allowed to participate in the decision-making process. In particular, directors are prohibited from considering or casting their votes on matters in which they may have a potential conflict of interest.

(ii) monitoring Insider Trading

the Board prohibits directors, executives, and employees from using an opportunity or information acquired while working in their positions to seek personal benefit or to establish a competing or related business with tta. this includes a complete prohibition against using material insider information to buy or sell tta’s shares and securities for their own interest and against giving insider information to other persons or entities to buy or sell tta’s shares and securities.

Directors and executives are required to report trading transactions in tta’s shares and securities and their ownership position whenever changes occur. the Company prohibits all directors and senior executives to trade in tta’s shares and securities during the period of three (3) weeks prior to the release of our quarterly and annual financial results (the “Blackout Period”). this prohibition applies to entities in which our directors have a beneficial interest, are employed by, or act as a representative thereof. the Company Secretary will remind directors and executives about this restriction at least seven (7) days in advance of the Blackout Period.


Annual Report 2013

187

(d) INTERNal cONTROl

the Company has defined internal control as a process that is influenced by the Board, the aC, the President & Chief executive officer, management, and other employees and is formulated to provide reasonable assurance that the Company achieves effectiveness of its business activities, reliable financial reporting, and compliance with applicable laws and regulations. the internal control structure consists of organisational arrangements with clearly defined lines of responsibility and delegations of authority, and comprehensive systems and control procedures.

the Internal audit Department (“IaD”) is an independent department that reports directly to the aC. the IaD assists the aC and the Board by performing regular assessments and evaluations on the Company’s internal controls control environment, financial and accounting matters, compliance, business and financial risk management policies and procedures, and ensuring that internal controls are adequate to meet the Company’s requirements. the findings are discussed with the relevant part ies and, when necessary, improvements are made. the follow-up of these agreements is reported to the aC and the Board.

the Company has internal control and risk management systems based on the framework of the Committee of Sponsoring organisations of the treadway Commission (“CoSo”) governing business operations and management processes. the Company has focused on five main components as follows;

1. Organisational control Environment

the Company encourages and promotes a good working environment by setting policies, and planning, executing, controlling, and monitoring all business activities. the Company has also established a suitable organisational structure and adheres to its business philosophies and ethics. the Company expects all management to be honest and ethical and act as role models for all employees. all stakeholders are treated with fairness and respect and in such a way that adheres to good corporate governance principles.

the Board has appointed the aC to oversee matters concerning the monitoring of the Company’s financial reporting and the efficiency of internal controls in relation to the financial reporting.

employee authorities and responsibilities are also clearly determined at each level. the fundamental values described in the Code of Conduct apply to every employee. the Code of Conduct creates a cli-mate rooted in focus on the customer, achievement, mutual respect, teamwork, and trust. In addition, business goals have been formulated for employees to follow and have been closely monitored. moreover, the Company defines all job descriptions, job specifications, and assigned suitable authorities and responsibilities. the Company recognises that a proper control environment will lead to work efficiency and effectiveness.

2. Risk assessment

the Company’s management has reviewed its risk policies, frameworks, and plans. management and staff have been trained on the importance of risk management so that everyone is prepared to mitigate or resolve identified risks in a timely fashion. the Company is promoting a risk awareness culture, in which risk management is everyone’s responsibility. a risk management structure has been systematically created.

risk management plans and measures have been formulated where both internal and external risk factors possibly affecting the Company’s businesses and operations are assessed. the risk assessment also results in control targets for how risks are to be managed through various control structures. risk management monitoring plans are carefully reviewed before being reported to the Board .the Board appointed the rmC to review the risk management framework and structure and provide recommendations that align with strategic business directions and plans, while supervising, monitoring, and reviewing key outcomes of risk management reporting to ensure their alignment with standards and prevailing circumstances.

3. control activities

authority and approval assignments have been defined for each department and are monitored regularly. the transactions amongst the Company and its


Annual Report 2013

188

related parties have been carefully controlled by upholding its best interests as if the Company were dealing with outside parties on an arm’s length basis and conform to SeC and Set requirements. In addition, the Company recognises the importance of internal control systems on an operational level to ensure that operations are conducted efficiently. Powers and duties of operations and management level personnel are laid down clearly, including proper segregation of duties between the operations units, control units, and assessment units for the purpose of maintaining appropriate checks and balances. there is a proper level of control maintained on the utilisation and valuation of our property/assets.

4. Information and communication

Information technology has been developed to ensure efficient business operations and to serve management’s needs. the Company recognises the importance of accuracy, reliability, and prompt information and communication. the primary objective is the provision of accurate and timely data for decision-making. It also has an effective information security system, including a contingency plan to protect the information system when there are serious incidents that may cause system failure. furthermore, the Company deploys an audit trail system that can track back and review historical data. an internal control system for the financial and accounting functions is clearly set up, which allows adequate reporting to the relevant management.

the Company complies with the Computer offense act and computer traffic data as required by the ministry of Information and Communications technology. the Company also has invested in an effective communication system, including internal and external channels. the internal communication manages through various channels such as quarterly town hall meetings, the Company’s intranet, and email. the accounting records conform to generally accepted accounting standards, and the accounting files are updated regularly.

5. monitoring

Since the existing systems provide prompt and reliable information on a regular basis, management and the Board can therefore achieve proper monitoring over relevant financial reports in an effective manner and support key business objectives. at the same time, they can also perform an accurate review and assessment, and suggest improvements over existing business plans, supported by effective internal supervision carried out by the IaD throughout the year.

the internal audit works according to an annual audit plan that is approved and monitored by the aC. the plan prioritises companies, business areas, and processes. the results of the performed audits and following up observations are reported to the aC. No significant control deficiencies have been reported to date. However, recommendations regarding internal controls have been provided in some areas. the IaD also reviews whether key operations and financial activities are conducted efficiently and legally.

(E) bOaRd mEETINgS

Board meetings shall be held once at least every three (3) months specified in the Company’s articles of association. Special meetings are convened as necessary to address specific needs. In fY 2013, there were twelve (12) Board meetings. Principal meeting agendas were: consideration of tta’s strategic direction, annual business plan and budget, quarterly financial reports, and significant acquisition and disposal of assets.

the Board requires all members to devote sufficient time to the work of the Board, to perform the duties and responsibilities of Directors, and to use their best endeavours to attend meetings. all directors are encouraged to attend at least 75% of all Board meetings held during the year.


Annual Report 2013

189

Details of Directors’ attendance record in 2013 financial Year

Name

meeting attendance in 2013

appointment during the year

board of directors(Total 12)

audit committee(Total 14)

Executive committee(Total 12)

Nomination and

Remuneration committee

(Total 9)

corporate governance committee

(Total 3)

Risk management committee

(Total 2)

1. mr. Prasert Bunsumpun 11/12 - 12/12 - - -

2. mr. Chalermchai mahagitsiri 12/12 - 11/12 - - 2/2

3. m.l. Chandchutha Chandratat 12/12 - 11/12 - - 2/2

4. mr. Chia wan Huat Joseph 12/12 - 12/12 - 3/3 -

5. mr. Krish follett 12/12 14/14 - - - 2/2

6. mr. Santi Bangor 12/12 13/14 - 5/5 3/3 -

7. ms. ausana mahagitsiri 10/12 - - 9/9 2/3 -


1/12 - - - - -

9. mr. mohammad rashed ahmad m. alnasseri

7/7 - - 5/5 - - - Board member on 30 Jan 2013- NrC member on 14 february 2013

10. mr. Yves Barbieux 2/2 - - - - - - Board member on 12 July 2013

11. mr. Cherdpong Siriwit 6/7 8/10 - - - - - Board member on 30 Jan 2013- aC member on 12 feb 2013

Details of Directors’ attendance record who resigned during the 2013 financial Year

Name

meeting attendance in 2013

Resignation during the year

board of directors(Total 12)

audit committee(Total 14)


committee(Total 9)

Risk management committee

(Total 2)

1. Dr. Pichit Nithivasin 4/4 - 4/4 - resigned from the Board of Directors on 30 January 2013

2. mr. oral wilson Dawe 4/4 - 4/4 1/1 resigned from the Board of Directors on 26 December 2012

3. mr. Peter Stokes 2/4 3/3 - - resigned from the Board of Directors on 30 January 2013

Note: a total of 12 Board of Directors meetings took place during the year: 6 regular meetings and 6 special meetings.

(F) bOaRd aSSESSmENT

the Board conducted a formal evaluation of its own performance for the year that ended on 30 September 2013. the evaluation process was led by the Chairman of the CGC and was conducted by sending a board assessment form to each Director. the responses to the form were collated by the Company Secretary and the Chairman of the CGC reported the result to the Board of Directors.

there were six (6) main areas of evaluation namely:

1. Structure and Characteristics of the Board2. roles and responsibilities of the Board3. Board of Directors meetings

4. Board of Directors’ Performance of Duties5. relationship with management6. Self-development of Directors

In 2013, the assessment results as a whole were very good. the Board discussed the results and possible improvements and asked different committees to propose measures to improve the efficiency of the Board.


Annual Report 2013

190

(g) dIREcTOR ORIENTaTION aNd dEvElOPmENT

the Company prepares a handbook for directors, which includes a summary of the Company’s information, policies, charters, and structure and distributes it to all directors as basic information. the Company established a Director Induction Program for new Board members to facilitate their prompt performance of duties. the President & Chief executive officer normally gives orientation meetings for new Board members. In these meetings, briefings on tta’s policies and key business operations are given. moreover, new Board members will also meet with different executives to understand the business units in greater detail.

In addition, tta encourages directors to attend courses or join activities aimed at improving their

performance on the Board and Board committees. eight (8) directors have participated in the thai Institute of Directors’ (“IoD”) director training programmes, including the role of Chairman Program (“rCP”), the Director accreditation Program (“DaP”), the Director Certification Program (“DCP”), the finance for Non-finance Director Program (“fND”), the role of the Compensation Committee Program (“rCC”), the audit Committee Program (“aCP”), and 4m; monitoring fraud risk management (mfm 9/2013), monitoring the System of Internal Control and risk management (mIr 14/2013), monitoring the Internal audit function (mIa 14/2013), monitoring the Quality of financial reporting (mfr 17/2013).

tta encourages directors who have not participated in the above training programmes to participate at the Company’s expense.

list of key courses in IoD which tta’s directors attended

courses No. of participantsthe role of Chairman 2the Director accreditation Program 2

the Director Certification Program 6the finance for Non-finance Director Program 1the role of the Compensation Committee Program 1the audit Committee Program 24m 1

5. business Ethics and code of conduct(a) TTa’S EThIcal aNd OPERaTIONal gUIdElINES

tta has the following ethical and operational guidelines:

(i) Fairness

we believe in being fair to all parties having a business relationship with us and conscientiously avoid favouritism or a conflict of interest situation.

(ii) Professionalism

we carry out our responsibilities in a professional manner and are determined to achieve excellence by continuously increasing performance levels through new methods and technologies.

(iii) Proactiveness

we are responsive to client needs and social, technical, and economic changes and adapt to the circumstances.

(iv) discipline and compliance

we pursue business affairs with discipline and ethical principles and ensure that our undertakings comply with laws, rules, and regulations.

(b) cOdE OF cONdUcT

the Board has approved a Core Values, mission and Vision (“VmV”) framework to guide business operations. a Code of Business Conduct was approved by the Board on 12 february 2010 to implement the VmV framework, emphasising our four Core Values.


Annual Report 2013

191

tta has arranged Code of Conduct training to all employees to ensure that they understand good practices and has included the Code of Conduct training as part of the orientation for new employees.

The four core values are:

(i) Integrity: we are open, honest, and ethical, deliver on our promises, and build and nurture trust in our relationships.

(ii) Excellence: we set high standards of quality, safety, environment, security, and service, are always prepared for challenges, and conduct our business professionally.

(iii) Team Spirit: we care for our clients, employees, and suppliers and behave in ways that build a spirit of teamwork and collaboration and show deep respect for one another.

(iv) commitment: we are passionate about the future of this Company and feel accountable for business results and success.


Annual Report 2013

192

INSIdE INFORmaTION cONTROl

Directors and management are required to submit securities holding reports to tta on the same day as when they submit the reports to the SeC and the Set in accordance with the SeC and Set Notifications regarding reports of securities holding. they are also required to follow the Set Guidelines on Insider trading, which require Directors and executives refraining from securities trading before the disclosure of financial statements or other important information that may affect the price of the securities. for further details, please review our Corporate Governance report.


Annual Report 2013

193

REl

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Annual Report 2013

194

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Annual Report 2013

195

com

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Annual Report 2013

196

Necessity and Rationale of Related Party Transactions

In case tta or its subsidiary signs an agreement or conducts a related party transaction with a subsidiary company, affiliated company and/or third party, tta or a subsidiary will consider the necessity and rationale of such agreement based mainly on tta’s interests.

approval measures or Procedures of Related Party Transactions

If tta or its subsidiary is to execute an agreement or if there is any related party transaction between tta and its subsidiary, affiliated company, related company, third party and/or anyone with possible conflict of interests, the Board of Directors requires tta or a subsidiary, for the purpose of its benefits, to comply with the rules and regulations of the Set and the SeC regarding disclosure of information of listed companies concerning connected transactions. Prices and other conditions shall be on an arm’s length basis and are conducted in the best interests of tta and all shareholders. Directors, executives, or employees having an interest in such transaction are not allowed to participate in the decision-making process and in any approval process.

Policy for Future Related Party Transactions

the audit Committee and tta will jointly consider and review any related party transactions that may arise in the future to ensure their necessity and fair price basis.


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cOmPaNy INvESTmENTS

No. Name of companyType of Shares

# of IssuedShares

# of InvestedShares

% of holding

Par value

Transport groupType of business : Ship management

1. thoresen & Company (Bangkok) limited26/26-27 orakarn Building, 8th floorChidlom road, lumpinee, Pathumwan Bangkok 10330tel. : +66 (0) 2250-0569

ordinaryPreference

9,470,0003,030,000

9,470,0003,029,994

99.9/1 10

Type of business : International maritime Transportation

2. thor Jupiter Shipping Co., ltd. ordinary 974,000 973,993 99.9 100

3. thor wind Shipping Co., ltd. ordinary 2,000,000 1,999,993 99.9 100

4. thor wave Shipping Co., ltd. ordinary 2,000,000 1,999,993 99.9 100

5. thor Harmony Shipping Co., ltd. ordinary 3,500,000 3,499,993 99.9 100

6. thor Dynamic Shipping Co., ltd. ordinary 3,600,000 3,599,993 99.9 100

7. thor Integrity Shipping Co., ltd. ordinary 3,850,000 3,849,993 99.9 100

8. thor enterprise Shipping Co., ltd. ordinary 6,300,000 6,299,993 99.9 100

9. thor energy Shipping Co., ltd. ordinary 10,000,000 9,999,993 99.9 100

10. thor endeavour Shipping Co., ltd. ordinary 11,000,000 10,999,993 99.9 100

11. thor merchant Shipping Co., ltd. ordinary 200,000 199,994 99.9 100

12. Hermes Shipping Co., ltd. ordinary 270,000 269,994 99.9 100

13. thor Star Shipping Co., ltd. ordinary 300,000 299,993 99.9 100

14. thor Skipper Shipping Co., ltd. ordinary 300,000 299,993 99.9 100

15. thor Sailor Shipping Co., ltd. ordinary 300,000 299,993 99.9 100

16. thor mariner Shipping Co., ltd. ordinary 350,000 349,994 99.9 100

17. thor Sun Shipping Co., ltd. ordinary 400,000 399,993 99.9 100

18. thor Spirit Shipping Co., ltd. ordinary 400,000 399,993 99.9 100

19. thor Sky Shipping Co., ltd. ordinary 400,000 399,993 99.9 100

20. thor Sea Shipping Co., ltd. ordinary 400,000 399,993 99.9 100

21. thor trader Shipping Co., ltd. ordinary 450,000 449,993 99.9 100

Investments in other companies exceeding 10% of other companies’ shares as of 30 September 2013 are as follows:


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# of IssuedShares

# of InvestedShares

% of holding

Par value

22. thor traveller Shipping Co., ltd. ordinary 450,000 449,993 99.9 100

23. thor orchid Shipping Co., ltd. ordinary 472,500 472,493 99.9 100

24. thor Confidence Shipping Co., ltd. ordinary 500,000 499,993 99.9 100

25. thor Nautilus Shipping Co., ltd. ordinary 500,000 499,993 99.9 100

26. thor mercury Shipping Co., ltd. ordinary 600,000 599,994 99.9 100

27. thor triumph Shipping Co., ltd. ordinary 600,000 599,993 99.9 100

28. thor lotus Shipping Co., ltd. ordinary 630,000 629,993 99.9 100

29. thor Jasmine Shipping Co., ltd. ordinary 700,000 699,993 99.9 100

30. thor Champion Shipping Co., ltd. ordinary 750,000 749,993 99.9 100

31. thor Venture Shipping Co., ltd. ordinary 750,000 749,993 99.9 100

32. thor Guardian Shipping Co., ltd. ordinary 750,000 749,993 99.9 100

33. thor Nautica Shipping Co., ltd. ordinary 753,000 752,993 99.9 100

34. thor Pilot Shipping Co., ltd. ordinary 800,000 799,993 99.9 100

35. thor Navigator Shipping Co., ltd. ordinary 990,000 989,993 99.9 100

36. thor transit Shipping Co., ltd. ordinary 1,000,000 999,993 99.9 100

37. thor alliance Shipping Co., ltd. ordinary 1,060,000 1,059,993 99.9 100

38. thor Commander Shipping Co., ltd. ordinary 1,150,000 1,149,993 99.9 100

39. thor tribute Shipping Co., ltd. ordinary 1,170,000 1,169,993 99.9 100

40. thor Neptune Shipping Co., ltd. ordinary 1,380,000 1,379,993 99.9 100

41. thor Captain Shipping Co., ltd. ordinary 1,530,000 1,529,994 99.9 100

42. thor Nexus Shipping Co., ltd. ordinary 1,857,000 1,856,993 99.9 100

43. thor master Shipping Co., ltd. ordinary 1,880,000 1,879,993 99.9 100

44. thor transporter Shipping Co., ltd. ordinary 2,000,000 1,999,993 99.9 100

45. thor Nereus Shipping Co., ltd. ordinary 2,128,000 2,127,993 99.9 100

46. thor Nectar Shipping Co., ltd. ordinary 2,541,000 2,540,993 99.9 100

Note : the registered office address of companies in items No. 2-46 is 26/32 orakarn Building, 10th floor, Soi Chidlom Ploenchit road, lumpinee, Pathumwan, Bangkok 10330 tel. : +66 (0) 2250-0569

Type of business : International maritime Transportation

47. thoresen Chartering (HK) limitedSuite B, 12th floor, two Chinachem Plaza135 Des Voeux road Central, Hong Kong

ordinary 500,000 499,999 99.99 HKD 1

48. thoresen Shipping Singapore Pte. ltd.3 Church Street, #22-06 Samsung HubSingapore 049483tel. : +65 6578-7000

ordinary 294,353,800 294,353,800 100.0 SGD 1

49. thoresen Shipping Germany GmbHStavendamm 4a, 28195 Bremen, Germanytel. : 421 336 52 22

ordinary 25,000 25,000 100.0 euro 1


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# of IssuedShares

# of InvestedShares

% of holding

Par value

50. Pt Perusahaan Pelayaran equinoxGlobe Building 4th & 5th floorJalan Bancit raya Kav.31-33, JakartaIndonesia 12740tel. : +6221 7918 7006

ordinary 24,510 12,010 49.0 1,000,000rupiah

51. thoresen Shipping Denmark apStuborg Boulevard 12, 3.2900 Hellerup, Denmark

ordinary 80,000 80,000 100.0/1 DKK 1

Type of business : Ship agency

52. thoresen Shipping and logistics ltd.26/26-27 orakarn Building, 8th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2254-0266

ordinary 500,000 245,000 49.0 100

53. Gulf agency Company (thailand) ltd.26/30-31 orakarn Building, 9th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2650-7400

ordinary 22,000 11,215 51.0 1,000

54. thoresen Shipping fZe1901-19th floor, Golden toweropp. marbella resort, al BuhairahCorniche road, Sharjah, Uae.tel. : 971-6-574 2244

ordinary 1 1 100.0 550,550Dirhams

55. thoresen (Indochina) S.a.17th floor, Petroland tower12 tan trao Street, tan Phu ward, District 7 Ho Chi min City, Vietnamtel. : +84 8 5411 1919

ordinary 2,500 1,250 50.0 USD 100

Type of business : Ship brokerage

56. fearnleys (thailand) ltd.26/55 orakarn Building, 15th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2253-6160

ordinary 135,000 66,144 49.0 100

57. thoresen Chartering (Pte) ltd.3 Church Street, #22-06 Samsung HubSingapore 049483tel. : +65 6578-7000

ordinary 100,000 100,000 100.0 SGD 1


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# of IssuedShares

# of InvestedShares

% of holding

Par value

Type of business : Oil and gasTankering

58. Petrolift Inc.6th floor, mapfre Insular Corporate Center madrigal Business Park I, 1220acacia avenue, ayala alabangmuntinlupa City, Philippines

ordinary 1,259,350,452 503,740,176 40.0/4 1Philippines

Peso

Energy group

Type of business : Offshore Services

59. mermaid maritime Public Company limited26/28-29 orakarn Building, 9th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2255-3115-6

ordinary 1,412,545,923 590,000,000217,145,813/1

57.14 1

Type of business : coal mining

60. merton Group (Cyprus) ltd.Nikou Kranidioti 7D, tower 4, 3rd floor flat/office 302, egkomi, PC 2411 Nicosia, Cyprus

ordinary 33,288 8,704 26.15/4 USD 1

61. Qing mei Pte. ltd.24 Duxton Hill Singapore 089607

ordinary 12,600,000 4,200,000 33.33/4 USD 1

Infrastructure group

Type of business : Ship Supplies, logistics, Ship Stevedoring and Transportation

62. Chidlom marine Services & Supplies ltd.26/22-23 orakarn Building, 7th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2250-0569

ordinary 700,000 699,993 99.9 100

63. GaC thoresen logistics ltd.26/30-31 orakarn Building, 9th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 3818-5090-2

ordinary 750,000 382,496 51.0 100

Type of business : Port Operations

64. Sharjah Ports Services llCP.o.Box 510, Port KhalidSharjah, United arab emiratestel. : 971-6-528 1327

ordinary 26,000 12,740 49.0/2 100Dirhams

65. Baria SerecePhu my Borough, tan thanh DistrictBaria Vung tau Province, Vietnamtel. : +84.64.3876603

ordinary 2,039,080 407,816 20.0/4 100,000VND


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# of IssuedShares

# of InvestedShares

% of holding

Par value

Type of business : coal logistics business

66. Unique mining Services Public Company limited 36/83 P.S. tower Building, 24th floorSoi Sukhumvit 21, Sukhumvit roadKlongtoey, wattana, Bangkok 10110tel. : +66 (0) 2664-1701-8

ordinary 153,454,064 136,083,041 88.68/3 0.50

Type of business : Fertilisers business

67. Baconco Co., ltd.Phu my I Industrial Park, tan thanh town Baria Vung tau Province, Vietnamtel. : 064.893 400

Charter capital is VND 377,072,638,790 100.0/5 -

holding group

Type of business : holding company

68. Soleado Holdings Pte. ltd.3 Church Street, #22-06Samsung Hub Singapore 049483tel. : +65 6578-7000

ordinary 130,000,000 130,000,000 100.0 SGD 1

69. athene Holdings ltd.26/32 orakarn Building, 10th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2254-8437

ordinary 1,000,000 999,993 99.9 100

70. Pm thoresen asia Holdings ltd.26/22-23 orakarn Building, 7th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2254-8437

ordinary 1,000,000 99,998 99.9 10.0

Others

Type of business : Service Provider

71. thoresen Services Center ltd.26/22-23 orakarn Building, 7th floorSoi Chidlom, Ploenchit road, lumpineePathumwan, Bangkok 10330tel. : +66 (0) 2254-8437

ordinary 60,000,000 599,993 99.9 100

Note: /1 indirectly held by thoresen Shipping Singapore Pte. ltd. /2 indirectly held by thoresen Shipping fZe /3 indirectly held by athene Holdings ltd. /4 indirectly held by Soleado Holdings Pte. ltd. /5 indirectly held by Pm thoresen asia Holdings ltd.


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glOSSaRy

The following are definitions of key terms used in this annual report.

glossary of maritime Terms:

bhSI the Baltic Handysize Index is a measure of the strength of smaller dry bulk vessel spot freight earnings (basis 28,000 dwt bulk carriers). It was established on a trial basis in may 2006 and was formally launched in January 2007.

bSI the Baltic Supramax Index (BSI) (basis 52,000 dwt bulk carriers) was officially launched in January 2006.

bulk vessels/carriers Vessels which are specially designed and built to carry large volumes of cargo in bulk cargo form.

charter the hire of vessel or drilling rig for a specified period of time or in the case of bulk carriers to carry cargo for a fixed fee from a loading port to a discharging port. the contract for a charter is called a charterparty.

charterer the individual or company hiring a vessel.

charter hire Rate a sum of money paid to the vessel or drilling rig owner by a charterer under a charterparty for the use of a vessel or drilling rig.

classification Society an independent organisation which certifies that a vessel or drilling rig has been built and maintained in accordance with the rules of such organisation and complies with the applicable rules and regulations of the country of such vessel or drilling rig and the international conventions of which that country is a mem-ber.

deadweight Tonne (“dwt”) a unit of a vessel’s capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. a vessel’s dwt, or total deadweight, is the total weight the vessel can carry when loaded to a particular load line.

deepwater for dive support vessels, this refers to water depths beyond 300 metres. for drilling, this comprises “5th Generation Deepwater”, which refers to the latest generation of semisubmersible rigs and drillships possessing the latest technical drilling capabilities and the ability to operate in water depths in excess of 7,000 feet. “other Deepwater” refers to semisubmersible rigs and drillships that possess the ability to drill in water depths greater than 4,500 feet.

dive Support vessel Specially equipped vessel that performs services and acts as an operational base for divers, remotely operated vehicles, and specialised equipment.


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double-hulled a double hull is a ship hull design and construction method where the bottom and sides of the ship have two complete layers of watertight hull surface: one outer layer forming the normal hull of the ship, and a second inner hull which is some distance inboard, typically by a few feet, which forms a redundant barrier to seawater in case the outer hull is damaged and leaks.

dP-2 Dynamic position 2- redundancy allows the vessel to maintain position even with failure of one component or subsystem, required for vessels which support manned diving operations.

dry bulk Non-liquid cargoes of commodities shipped in an unpackaged state.

dry-docking the removal of a vessel or drilling rig from the water for inspection and / or repair of submerged parts.

dynamic Position (“dP”) Computer-directed thruster systems that use satellite-based positioning and other positioning technologies to ensure the proper counteraction to wind, current, and wave forces enabling the vessel to maintain its position without the use of anchors.

Freight Rates a price at which a certain cargo is delivered from one point to another. the price depends on the form of the cargo, the mode of transport (truck, ship, train, aircraft), the weight of the cargo, and the distance to the delivery destination. many shipping services, especially air carriers, use dimensional weight for calculating the price, which takes into account both weight and volume of the cargo.

gross Tonne Unit of 100 cubic feet or 2.831 cubic meters used in arriving at the calculation of gross tonnage.

handymax a dry bulk carrier of approximately 35,000 to 60,000 dwt.

handysize a dry bulk carrier having a carrying capacity of up to approximately 35,000 dwt.

hull the shell or body of a vessel.

International maritime Organisation (“ImO”))

a United Nations agency that issues international trade standards for shipping.

metric Tonne a unit of measurement equal to 1,000 kilograms.

Newbuilding a newly constructed vessel.

Orderbook a reference to currently placed orders for the construction of vessels or drilling rigs (e.g., the Handymax orderbook).

Panamax a dry bulk carrier of approximately 60,000 to 80,000 dwt of maximum length, depth and draft capable of passing fully loaded through the Panama Canal.

Remotely Operated vehicles (“ROv”)

robotic vehicles used to complement, support, and increase the efficiency of diving and sub-sea operations and for tasks beyond the capability of manned diving operations.

Scrapping the disposal of old or damaged vessel tonnage by way of sale as scrap metal.

Short-Term Time charter a time charter which lasts less than approximately twelve months.


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Supramax a bulk carrier with a capacity less than 60,000 dwt. Supramax vessels are relatively bigger in size with 50,000 to 60,000 Dwt It is well suited for small ports with length and draught restrictions, or ports lacking transshipment infrastructure.

Tender Rig a tender rig is a purpose-built self-erecting drilling tender barge with a flat bottom, raked sterns, and raked bow hull shape. It is designed as a cost-efficient and flexible drilling system for development scenarios involving multiple well slot fixed offshore platforms whereby the rig moves from platform to platform using its own drilling equipment set which is lifted by its own crane. lifting operations can be made onto platforms up to a height of 90 feet above sea level.

Time charter Contract for hire of a vessel. a charter under which the vessel owner is paid charter hire rate on a per day basis for a certain period of time, the vessel owner being responsible for providing the crew and paying operating costs while the charterer is responsible for paying the voyage costs. any delays at port or during the voyages are the responsibility of the charterer, save for certain spe-cific exceptions such as loss of time arising from vessel breakdown and routine maintenance.

TOE tonne of oil equivalent. a unit of energy: the amount of energy released by burning one tonne of crude oil, approximately 42 GJ. toe is sometimes used for large amounts of energy, as it can be more intuitive to visualise, say, the energy released by burning 1000 tonnes of oil than 42,000 billion joules (the SI unit of energy).

voyage charter Contract for hire of a vessel under which a vessel owner is paid freight on the basis of moving cargo from a loading port to a discharge port. the vessel owner is responsible for paying both operating costs and voyage costs. the charterer is typically responsible for any delay at the loading or discharging ports.

glossary of coal Terms:

anthracite Coals with a volatile-carbon ratio equal to 0.12 or less. It has a bright black luster and is coal of the highest rank.

bituminous coal a general term descriptive of coal intermediate in rank between sub bituminous and semi-anthracite and including coking coals. Bituminous coals may be either bright or dull and are usually banded in appearance.

bTU British thermal Unit. the quantity of heat required to raise the temperature of one pound of distilled water 1°f at its point of maximum density.

calorific value Quantity of heat produced when a unit weight of coal burns. Calorific value is measured in British thermal units per pound or calories per gram.

coal dust Particles of coal that can pass a No. 20 sieve.

coal mine an area of land and all structures, facilities, machinery, tools, equipment, shafts, slopes, tunnels, excavations and other property, real or personal, placed upon, under or above the surface of such land by any person, used in, or to be used in, or resulting from the work of extracting in such area bituminous coal, lignite, or anthracite from its natural deposits in the earth by any means or method and the work of preparing the coal so extracted and includes custom coal prepara-tion facilities.


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coal Reserve the economically mineable part of the coal resource, as defined in the JorC Code. It includes diluting materials and allowances for losses.

cv Calorific Value basis (GaD, Nar, or Gar).

lignite a brownish-black coal composed of vegetable matter which has been altered more than in peat, but less than in sub-bituminous coal.

calorific value the energy in kilocalories released per kg of coal burned.

Sub-bituminous Sub-bituminous coals may be dull, dark brown to black, soft and crumbly at the lower end of the range, to bright jet-black, hard, and relatively strong at the upper end. they contain 15-30% inherent moisture by weight and are non-coking (undergo little swelling upon heating).

Sulphur forms sulphur dioxide during coal combustion.

Thermal coal Coals which are normally used for the generation of heat for steam raising and other general industry applications. these coals generally do not exhibit any coking properties and therefore would not make coke in a conventional coke oven. However, thermal coals can be used as PCI Coals provided they have levels of ash, moisture, volatile matter and sulphur which make them suitable for the production of blast furnace pig iron.

glossary of Fertiliser Terms:

Urea the most common nitrogen fertiliser in the world. formula Co(NH2)2, can be prilled or granular, and obtained by chemical process (natural gas into ammonia, and then urea).

NPk Stands for “Nitrogen Phosphorus Potassium”, used to mention the compound fertilisers associating the three main fertilising nutrients, to be differentiated from the single fertilisers.

blending or “bulk blending” is a physical process mixing single fertilisers together to obtain NPK fertilisers.

granulation Process using steam, water and heat to manufacture NPK fertilisers, thereafter called granulated fertilisers.

compaction Process using heat and pressure to manufacture NPK fertilisers, thereafter called compacted fertilisers.


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ThE cOmPaNy

as of 30 September 2013

Name of company : thoresen thai agencies Public Company limited

Registration No. : 0107537002737

date of Establishment : 16 august 1983

date of conversion to Public company limited : 15 December 1994

date of listing Ordinary Shares in SET : 25 September 1995

address : 26/26-27 orakarn Building, 8th floorSoi Chidlom, Ploenchit roadBangkok 10330,thailandtelephone : +66 (0) 2254-8437website: http://www.thoresen.com

Type of business : Holding company with 3 lines of business:transport, energy, and Infrastructure

Ordinary Shares

Registered capital : Baht 1,132,807,060

Paid up capital : Baht 991,837,961

No. of Issued Shares : 991,837,961 ordinary shares

Par value : Baht 1 per share

Warrants (TTa-W3)

Number of Warrants issued : 141,600,882 units

Number of Warrants Unexercised : 140,968,458 units

Exercise Price : Baht 17.00 per share

Term of Warrants : 30 months or 2.5 years from the warrants issue date, 11 march 2013

domestic debentures

Issued domestic debentures : tranche 1: Baht 2,000,000,000, with 5-year termtranche 2: Baht 2,000,000,000, with 7-year term

date of listing domestic debentures in Thai bond market association

: 9 July 2010


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Securities Registrar of Ordinary Shares : thailand Securities Depository Co., ltd.62 the Stock exchange of thailand Building, rachadapisek road, Klongtoey Bangkok 10110, thailand telephone : +66 (0) 2229-2800

auditor : mr. Veerachai ratanajaratkulCertified Public accountant registration No. 4323KPmG Phoomchai audit ltd.48th - 51st floors, empire tower195 South Sathorn road Yannawa, SathornBangkok 10120, thailandtelephone : +66 (0) 2677-2000

legal advisor : Baker & mcKenzie ltd.5th floor, 22nd - 25th floor, abdulrahim Place990 rama IV road, Srilom, Bangrak, Bangkok 10500, thailandtelephone : +66 (0) 2636-2000

: watson, farley & williams asia Practice llP6 Battery road #28-00 Singapore 049909telephone : +65 6532 5335

Remark: Investors can study additional details of the issuer from the Company’s annual Information Disclosure form (form 56-1) on the SeC’s website at http://www.sec.or.th or on the Company’s website at http://www.thoresen.com.


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