Our vision is to become a lean green and happy world-class ...ah.listedcompany.com/misc/ar/20160407-ah-ar2015-en.pdf · Our vision is to become a lean green and happy world-class

Our vision is to become a lean green and happy world-class organization

with 4 fundamental values of Happy Customers, Happy Employees, Happy

Shareholders, and Happy Public.

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AAPICO

AAPICO Hitech Public Company Limited

Content

Presidentûs Message 2 Awards and Achievements 4 AAPICO Key Milestones 6 Corporate Social Responsibities 8 AAPICO Products 10 Location of Main Factories 12 Company Holding Structure 13 Revenue Structure 14 Financial Highlights 15 AAPICO Group Business 16 Main Business 17 Competition and Industrial Trend 23 Business Operation Goals and Future Projects 26 Risk Factors 28 Shareholding Structure 33 Organization and Management 37 Board of Directors 38 Corporate Governance 45 Internal Control and Ris Manage ment 61 Related Transactions 64 Managemen Discussion and Analysis 67 Report of the Audit Committee 73 Report of Nomination and Remuneration Committee 75 Company Contact Information 76 Reference 79 Corporate Information 80

Annual Report 2015 2

Presidentûs Message

AAPICOûs Vision

çOur vision is to become a lean green and

happy world-class organization with 4 fundamental

values of Happy Customers, Happy Employees,

Happy Shareholders, and Happy Public.é

The AAPICO Hitech Group did not perform well in 2015. The growth that

was expected did not materialize. Major infrastructure projects were delayed

and the only bright spot was the tourist industry, whilst the other sectors

remained languid. The net profit of the Company was Baht 338 million as

compared to Baht 386 million in 2014, a decrease of 12.4 percent year on

year.

Thailand’s local vehicle sales dropped to 799,632 units from 881,832 units

in 2014, a decline of 9.3 percent year on year. Vehicle production however

grew slightly from 1.88 million units to 1.91 million units or 1.8 percent.

Healthy growth of export largely compensated for the continued tepid

domestic market. The forecast for Thailand’s automotive industry in 2016 is

expected at around 2.0 million units. The year on year increase is expected

to be driven by export growth, which is forecasted to the tune of 1.25 million

units in 2016, whilst local demand may remain weak. The new regime of

excise tax based on CO2 emission instead of engine size, which cause new

car price to increase may be another challenge and dampen overall sales

numbers in 2016.

Based on the Bank of Thailand forecast, the Thai economy in 2016 is

expected to grow by about 3 percent. This confidence comes from the fact

that many major infrastructure projects that have been delayed are in the

process of taking off. These projects will stimulate the economy. A stable

environment with a working government are an added bonus for 2016.

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AAPICO


AAPICO Group’s revenue for 2015 was Baht 15.0 billion, with profits at Baht 338 million. Group revenue fell from Baht 15.2 billion

to Baht 15.0 billion compared to a year earlier, due to a negative impact of weaker Malaysian Ringgit which has depreciated

against Thai baht by 11% compared to last year. On currency comparable, healthy growth was seen in the Malaysian car

dealerships business.

The Group’s best performer was frame production where the volume is huge. Fortunately for us, Isuzu’s volume reduction was

lower than the industry as a whole. This was, also, the case for Ford where demand has increased in certain models and we supply

many parts. Plastics and forging, also, performed better, although still suffering losses. In any case, most companies are expected

to improve in 2016.

In Malaysia where we sell Honda passenger vehicles, two dealerships reported healthy performance and profits. Sales increased

from 3,447 units to 3,739 units compared to the previous year. This positive trend is expected to continue in 2016.

We have a new 20,000 square meters factory in China, which is still not fully utilized for producing forged and machining parts.

Current businesses occupy about 30 percent of the useful space. In 2015, our China operations had a loss. Our China business

is poised to grow due to the country’s enormous market size of 25 million units of assembled cars, with the potential of further

growth. The Group’s China operations is expected to perform better this year as plant space is not a constraint and we only need

to install machinery in order to increase capacity when new orders are received.

Company debt continues to reduce, as bank loans are being prepaid. As at December 31, 2015, the debt to equity is 55

percent. Our debt reduction will allow us to gear up with lower risks if there is a need for capital expansion or acquisitions if there

are good opportunities within our without. It is fortunate that the global economy in general is not too volatile and interest on

borrowing still hovers in the 5 percent range. This makes the cost of funds reasonable.

2015 was a more stable year for Thailand and hopefully this trend will continue in 2016. We had very good co-operation and

support from our associates, customers, other stakeholders and, also, our Board of Directors. I really appreciate all your kind

support and would like to take this opportunity to express my sincere thanks and look forward to your continued support in 2016.

Mr. Yeap Swee Chuan

President and CEO

AAPICO HITECH Public Company Limited


AAPICO has been recognized for its high standard of quality and continuous improvement as well as commitments toward its employees and society. Awards and achievements recived from customers and government offices in 2015 include the following :

Awards and Achievements

AAPICO Plastics Public Company Limited received çZero Accident Awardé from Department of Labor Protection and Welfare, Ministry of Labor.

Kunshan Chaitai-Xincheng Precision Forging Company Limited received the çOutstanding Contribution Supplieré for their excellent support and contribution from Changûan Ford Mazda Engine Company Limited, China.

New Era Sales (Malaysia) SDN. BHD. in Malaysia received the çHonda CEO - Elite Dealer 2015 Awardé for their excellent performance from Honda Malaysia.

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Tenaga Setia Resources SDN. BHD. in Malaysia received the çHonda CEO › Top Sales 2015 Awardé, which was given to the top 5 dealers with the highest sales in 2015, and the çHonda CEO › Elite Dealer 2015 Awardé for their excellent performance from Honda Malaysia

AAPICO Hitech Public Company Limited was awarded the Winner of Advance Group at TCC-TPS Activity 2015 from Toyota Motor Asia Pacific Engineering & Manufacturing (TMAP-EM)

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AAPICO

AAPICO Hitech Public Company Limited 5

AAPICO Hitech Public Company Limited AAPICO Plastics Public Company Limited AAPICO Hitech Parts Company Limited AAPICO Hitech Tooling Company Limited were recognized for their commitments for the çSafety Workplaceé Project in honor of HRH Princess Maha Chakri Sirindhorn from Ministry of Labor.

AAPICO Hitech Public Company Limited received the MATRADE Special Award for the recognition of their International Partnership from the National Trade Promotion Agency under The Ministry of International Trade and Industry Malaysia.

AAPICO Plastics Public Company Limited was the Winner of Grand Prix A-ABC Convention from Mazda and Auto Alliances (Thailand) Co., Ltd. and was invited to present their performance in Japan, and received the Q1 Award from Ford and Auto Alliances (Thailand) Co., Ltd. for the recognition in excellent quality, 100% on-time delivery, and continually improvement.

AAPICO Hitech Public Company Limited was the 1st runner up for QA improvement from Toyota Co-operation Club for their commitment to quality improvement from Toyota Motor Asia Pacific Engineering & Manufacturing (TMAP-EM).

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Key Milestones

Registered Able Autoparts Industries Co., Ltd. and started as the Ford Assembler and Distributor.

Signed Technical Agreement with Keylex Japan to produce fuel tanks for Ford and Mazda pickups in Ayutthaya.

Established 1st JV with Sanoh Japan and completed factory in Hitech Industrial Estate, Ayutthaya.

Listed on the SET on October 17, 2002.

Acquired 100% of Dana Corp. (USA) shares and renamed AAPICO Amata in Chonburi.

Completed Kunshan new factory.

Established 4 JV companies with Lemtech (60%), Edscha (49%), Sumino (49%) and Sodecia (50%).

1985

1995

1997

2002

2003

2012

2013

7

AAPICO


Expanded to China and acquired Kunshan Chaitai-Xincheng Precision Forging Co., Ltd.

Established strategic partnership with Sojitz Corp., Japan.

Acquired KPN PLC and renamed it AAPICO Forging PLC in Chonburi.

Established JV (40% equity) with Minth Corp., China.

Established AAPICO Structural Products in Chonburi.

Established JV (49% equity) with Takagi Seiko, Japan.

Completed 3S Honda showrooms. Flood 2011.

Acquired 25% equity in Quantum Inventions, Singapore. Set up Training Center in Nakornnayok.

Organized non-core business activities. Established TURBO target in 2020. ë Double Sales ë Net profit margin at 10%

2004

2005

2006

2007

2008

2009

2010

2011

2014

2015

Acquired 60% of Able ITS, a car navigation company. Established AAPICO Hitech Parts in Ayutthaya.


Corporate Social Responsibility AAPICO Hitech PLC engages in good governance and

takes responsibility for society and all groups of its

stakeholders. The Company encourages employees to

involve and improve local community and supports the

CSR projects where appropr iate. Many of the

Company’s projects concentrate on employees,

society, environment and education. The CSR projects

in 2015 includes the following:

Activities with Customers and Suppliers

The AAT-AAPICO Friendship Golf at Kiarti Thanee Country

Club, Samutprakarn province

AAPICO Family CSR 2015 at Wat Tunghiang,

Panutnikom, Chonburi province

The 2015 Annual Supplier Meeting

Company Visit at

Uniroll factory

Orientation for new suppliers

Activities with Employees Songkran Day 2015

9

AAPICO


Activities relating to Environment and Society • Green Star Award 2015 from Industrial Estate Authority of Thailand • CSR Activities at Wat Keereewan, Nakornnayok province • Annual Blood Donation Activity • Tree Planting at Peace Park, Nakornnayok province

AAPICO Scholarship for the outstanding children of AAPICO employees.

Merit Making

Sending Employee to Travel Safely for the long holiday

5S Big Cleaning Day Activity

Sport Day, Singing Competition and New Year Party

Employee Development

Safety Week Activities

Organization

Development #4 at

Khungnam Resort,

Nakornnayok province

Leadership Training #2

at Peace Park,

Nakornnayok province

Team Development and Organizational Excellence Training at Chulachomklao Royal Military Academy, Nakornnayok province

In-house training :

On the Job Trainer

Fire Evacuation

Training in

collaboration with

Hitech Industrial

Estate and Ban Wah

subdistrict


Engine

Transmission

Power train Drive Wheel Prop Shaft

Suspension

Brake

Quarter trim

Interior Parts

Trim Pillar A,B,C

Spoiler Protector

Exterior Parts

Tail Lamp

Plastics Fuel Tank Seat Component

Body side Molding Cover Pass Air Bag

Washer Tank systems

Radiator Cover

Under Hood Parts

Door trim

ë Connecting Rod

ë Shaft Balance

ë Input Shaft

ë Companion Flange

ë Gear, Clutch

ë Wheel Hub

ë Knuckle

ë Piston

Example of AAPICO Products


Automobile picture is displayed for the purpose of illustration of automobile parts only.


ë Tube Shaft

ë Yoke Weld

ë Tube Yoke

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AAPICO


Assembly Jigs Stamping Dies

11AAPICO Hitech Public Company Limited

Rear AXLE Housing

Crossmember #2.5

Sill-Side Inner Crossmember #3

Reinf ASSY-Tunnel

Crossmember #4

Crossmember

Brake Assembly Mounting #2

Assy Front floor #4



Chassis Frame Component


Kunshan, China

Manufacture forged and machined parts

and copper parts

Car dealerships

showroom and service center

Kajung and Petaling Jaya

Total Revenues 2015

Location of Main Facilities

Hitech Industrial Estate, Ayutthaya Manufacture stamping parts, assembly jigs and stamping dies.

Bangplee Industrial Estate, Samutprakan Manufacture plastic parts.

Amata Nakorn Industrial Estate,

Chonburi Manufacture chassis

frame, forging and machining parts.

Amata City Industrial Estate, Rayong

Manufacture stamping parts and plastic

fuel tank.


Thailand

Malaysia

China

13AAPICO HITECH PUBLIC COMPANY LIMITED

AAPICO

100%

100%

49%

MANUFACTURING OF AUTOMOTIVE PARTS, JIGS AND DIES

CAR DEALERSHIPS

CAR NAVIGATION SYSTEM

OTHERS

AAPICO HITECH PUBLIC COMPANY LIMITED JV PARTNERS

THAILAND OVERSEAS

Minth Group (Hong Kong/China)

Sanoh Industrial (Japan)

51%

80%

60%

49%

51%

51%

50%

49%

40%

Takagi Seiko Corporation (Japan)

Edscha Holding Gmbh (Germany)

Sumino Kogyo (Japan)

Sodecia SGPS GSA (Portugal)

Mitsuike Corporation (Japan)

Lemtech Holding (Taiwan)

Able Sanoh Industries (1996) Co., Ltd.

Sanoh Industries (Thailand) Co., Ltd.

Minith AAPICO (Thailand) Co., Ltd.

Thai Takagi Seiko Co., Ltd.

Edscha AAPICO Automotive Co., Ltd.

Sumino AAPICO (Thailand) Co., Ltd.

AAPICO Sodecia (Thailand) Co., Ltd.

AAPICO Mitsuike (Thailand) Co., Ltd.

AAPICO Lemtech (Thailand) Co., Ltd.

AAPICO AMATA Co., Ltd.

AAPICO Structural Product Co., Ltd.

AAPICO Hitech Parts Co., Ltd.

AAPICO Hitech Toolings Co., Ltd.

AAPICO Forging PLC.

AAPICO Precision Co., Ltd.

AAPICO Plastics PLC.

Katsuya (Thailand) Co., Ltd.

Kunshan Chaital-Xincheng Precision Forging Co., Ltd.

(China)

46%

20%

40%

49%

49%

49%

50%

51%

60%

100%

100%

100%

100%

100%

100%

100%

76%

Sojitz Corporation (Japan)

70% Hyundai Motor (Thailand) Co., Ltd. New Era Sales Co., Ltd. Tenaga Setia Resources

SDN. BHD. (Malaysia) 30% 100%

Able Motor Co., Ltd. 100%

AAPICO Engineering SDN. BHD. (Malaysia)

51% 49%

New Era Sales (M) SDN. BHD. (Malaysia)

A Maction Co., Ltd. AAPICO ITS Co., Ltd. 100% 60%

49%

60%

100%

88%

100%

100%

100%

15%

25%

AAPICO Engineering Co., Ltd.

AERP Co., Ltd.

AAPICO Training Center Co., Ltd.

AAPICO Technology Co., Ltd.

Foton Passenger Vehicles Distribution (Thailand) Co., Ltd.

ABLE ITS PTE. LTD. (Singapore)

AAPICO Investment PTE. LTD. (Singapore)

Jackspeed Corporation Limited (Singapore)

Quantum Inventions PTE. LTD.(Singapore)

Company Holding Structure

49%

40%

97%

100%

49%

24%

AAPICO CO. SDN. BHD. (Malaysia)

AAPICO QI. SDN. BHD. (Malaysia)

Information as of December 31, 2015

ANNUAL REPORT 2015 14

5,638

4,134 4,656

5,280

Revenue Structure Re

venu

es C

ontrib

utio

n Re

venu

es C

ontrib

utio

n

Dies Jigs and OEM Parts Manufacturing

Total Revenues 2012-2015 Design and manufacture of the following parts: • Jigs & Dies • Chassis Frame • Stamping and Welding Parts • Forging and Machining Parts • Plastic Parts and Fuel Tank Systems

Reve

nues

Con

trib

utio

n

Total Revenues 2012-2015 Sales of automobiles and after-sales service for • Ford • Mitsubishi • Honda

Total Revenues 2012-2015 Manufacture and develop: • Maps and Car Navigation Software • Telematics and Technology

Car Navigation 0.3%

Car Dealership 35.2%

Press Parts and Welding 19.8%

Chassis Frame 25.9%

Jigs % Dies 1.3%

Car Navigation

Car Dealerships

Forged & Plastics 17.5%

2012 2013 2014

13

(Unit : Million Baht)

34 28

2015

50

2012 2013 2014


2015


2012 2013 2014

9,542

12,643 12,310

2015

9,661


AAPICO

Financial Highlights

Consolidated Financial Statements

2011 2012 2013 2014 2015

Balance Sheet (Million Baht) Total Assets 11,557 13,823 12,579 12,082 11,507 Total Liabilities 7,416 8,853 7,109 6,401 5,524 Shareholder’s Equity 4,141 4,970 5,470 5,681 5,983 Profit and Loss Statements (Million Baht) Total Revenues 10,786 16,811 16,998 15,196 14,993 Sales and Service Income 10,356 16,120 15,627 14,572 14,534 Gross Profit (Loss) 764 1,062 1,075 608 714 EBITDA* 403 2,019 2,600 1,343 1,280 EBIT (59) 1,255 981 618 535 Net Profit (Loss) of the Company (392) 927 634 386 338 Net Profit (Loss) attributable to equity holders (390) 921 611 367 313 Earning per share (1.72) 3.29 2.05 1.14 0.97 Financial Ratios Current Ratio (times) 0.67 0.77 0.83 0.87 0.99 Gross Profit Margin (%) 7.4% 6.6% 6.9% 4.2% 4.9% Net Profit Margin (%) -3.8% 5.7% 3.9% 2.5% 2.2% Return on Total Assets (%) -3.4% 6.7% 4.8% 3.1% 2.9% Return on Equity (%) -9.4% 18.5% 12.2% 6.9% 5.8% Debt to Equity (times)** 1.21 1.08 0.85 0.67 0.55 Interest Coverage Ratio (times) (0.25) 4.34 3.59 2.97 3.15 Debt service Coverage Ratio (times) 0.37 1.02 1.47 0.98 1.17 Dividend Payout (% of Net Profit to equity holders) N/A 27.4% 25.9% 26.3% 30.9%***

Unit : Million Baht

* Earnings before interest, tax, depreciation, amortization and goodwill impairment and includes associate income (loss).

** Debt to Equity = (Bank overdrafts + Bank Loans)/Total Equity.

*** Dividend for the second haft of the year is pending for Shareholder’s meeting approval.

Net Profit (Loss) attributable to equity holders

16,811 16,998 15,196

2012 2013 2014 2015

14,993 921

611

367 313

Total Assets

13,823 12,579 12,082 11,507

2012 2013 2014 2015 2012 2013 2014 2015

Total Revenues


Brazed Steel Tubing

Sanoh Industries Co., Ltd.

Chassis Frame

AAPICO Amata Co., Ltd.

AAPICO Structural Products Co., Ltd.

Forged and Machined Parts

AAPICO Forging PLC.

Kunshan Chaitai-Xincheng Precision

AAPICO Precision Co., Ltd.

Forging Co., Ltd.

Fuel Lines, Brake Lines, Engine Parts

Able Sanoh Industries (1996) Co., Ltd.

AAPICO Amata Co., Ltd.

AAPICO Hitech PLC. (Ayutthaya & Rayong)

1 OEM Auto Parts Manufacturing

Metal Stamping and Welding Parts

AAPICO Hitech Parts Co., Ltd.

AAPICO Mitsuike (Thailand) Co., Ltd.

AAPICO Lemtech (Thailand) Co., Ltd.

Sumino AAPICO (Thailand) Co., Ltd.

Welding and Assembly Body-in-White (BIW)

AAPICO Sodecia (Thailand) Co., Ltd.

AAPICO Plastics PLC.

Plastic Parts and Plastic Fuel Tank

Thai Takagi Seiko Co., Ltd.

Katsuya (Thailand) Co., Ltd.

Roof Ditch Molding, Belt Line Molding, Door Sash

Minth AAPICO (Thailand) Co., Ltd.

Steel Fuel Tank System

AAPICO Hitech PLC.

Door check,Door Hinges,Parking Brake Lever

Edscha AAPICO Automotive Co., Ltd.

2 Design & Manufacture of Assembly Jigs

AAPICO Hitech Tooling Co., Ltd.

3

Design & Manufacture of Stamping Dies

AAPICO Hitech Tooling Co., Ltd.

Mitsubishi Dealer

Able Motors Co., Ltd.

Ford Dealer

New Era Sales Co., Ltd.

4 Car Dealership

Honda Dealer

Tenega Setia Resources Sdn. Bhd.

New Era Sales (M

) Sdn. Bhd.

Hyundai Distributor

Hyundai Motor (Thailand) Co., Ltd.

AAPICO ITS Co., Ltd.

AAPICO ITS Sdn. Bhd.

5 Car Navigation

AAPICO QI Sdn. Bhd.

Quantum Inventions Pte. Ltd.

Engineering Research & Development

AAPICO Engineering Co., Ltd.

AAPICO Technology Co., Ltd.

AAPICO Investment Pte. Ltd.

Investment Activities, Merger & Acquisition

Foton Passenger Vehicles Distribution

AAPICO Engineering Sdn. Bhd.

6 Others

(Thailand) Co., Ltd.

Able ITS Pte. Ltd.

Oracle System

A ERP Co., Ltd.

Training Activities

AAPICO Training Center Co., Ltd.

Manufacture of Accessories for Transporatation

Jackspeed Corporation Limited

AAPI

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Bus

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Busine

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The main business of the Company and its affiliates can be categorized as follows:


AAPICO

Main Business

AAPICO Hitech PLC was established in 1996 and

listed on the Stock Exchange of Thailand in 2002.

The Company’s main businesses initially were to

design, produce, and install assembly jigs, stamping

dies, and manufacture OEM auto-motive parts,

including floor parts, cross members, pillars, brackets,

clips, and fuel tanks. The Company has later

progressed to produce plastic, forging, machining,

and chassis frame components. In addition to its

core operations, the Company has invested in other businesses associated with the automotive industry,

namely car dealerships and car navigation system. As of today, the AAPICO Group is comprised of

37 subsidiary and associate companies (27 in Thailand and 10 overseas). The Company’s main customers

are leading automotive assemblers in Thailand.

AAPICO Hitech PLC has a paid-up capital of Baht 322.58 million. The Company’s major shareholders are

Mr. Yeap Swee Chuan and family holding 39.85% of total outstanding shares and Sojitz Corporation holding

15.76% of total outstanding shares. The Company has two factories located at Hitech Industrial Estate in

Ayutthaya province and Amata City Industry Estate in Rayong province. Its main customers are Toyota

Motor Asia Pacific Engineering & Manufacturing Co., Ltd. and Isuzu Motor Co., (Thailand) Ltd., etc.

AAPICO HITECH PUBLIC COMPANY LIMITED [AH]

OEM AUTOMOTIVE PARTS MANUFACTURING

AAPICO AMATA COMPANY LIMITED [AA]

AAPICO Amata Company Limited’s main products

are chassis frame of Isuzu D-Max pick-up truck

model for Isuzu and axle housing complete for

American Axle & Manufacturing. The Company is

a wholly owned subsidiary of AAPICO Hitech PLC

with a paid-up capital of Baht 800 million.

AAPICO HITECH PARTS COMPANY LIMITED [AHP]

AAPICO Hitech Parts Company Limited manufactures

pressed and stamped automotive parts, such as

floor parts, brackets, etc. for OEM automakers.

The Company is a wholly owned subsidiary of

AAPICO Hitech PLC with a paid-up capital of Baht

120 million. Its main customers are Nissan.

AAPICO FORGING PUBLIC COMPANY LIMITED [AF]

AAPICO Forging PLC manufactures automotive

forged parts, such as parts in transmission system,

power train system, steering and suspension system,

engine parts, wheel hubs, etc. The Company is a

wholly owned subsidiary of AAPICO Hitech PLC

with a paid-up capital of Baht 500 million. Its main

customers are Auto Alliance (Thailand), GKN Driveline

(USA and Sweden), Dana Spicer, THK Rhythm

(Thailand), NTN Manufacturing, and American

Axle & Manufacturing.


AAPICO LEMTECH (THAILAND) COMPANY LIMITED

[AL]

AAPICO Lemtech (Thailand) Company Limited is

a joint venture between AAPICO Hitech PLC and

Lemtech Holding of Taiwan with equity participation

of 60% and 40% respectively. Its main business is to

manufacture high speed OEM automotive pressed

parts and electronic parts. Major customers are

Edscha AAPICO, Fujikura Electronics and LDC

Precision.

AAPICO MITSUIKE (THAILAND) COMPANY LIMITED

[AMIT]

AAPICO Mitsuike (Thailand) Company Limited is a

joint venture between AAPICO Hitech PLC and

Mitsuike Corporat ion of Japan with equity

participation of 51% and 49% respectively. The

Company was established to focus on engineering

and marketing of pressed parts for sales to Nissan.

The Company has paid-up capital of Baht 33 million.

AAPICO PLASTICS PUBLIC COMPANY LIMITED

[AP]

AAPICO Plastics PLC produces plastic parts for

automotive and electronic industry including plastic

fuel tank. Its main customers are Auto Alliance

(Thailand), Ford, Thai Yamaha Motor and Asian

Honda Motor. The Company is a subsidiary of

AAPICO Forging PLC, a wholly owned subsidiary of

AAPICO Hitech PLC, with registered and paid-up

capital of Baht 150 million. It has two branches,

located at Bangplee Industrial Estate in Samut Prakan

province and at Amata City Industrial Estate in

Rayong province.

AAPICO PRECISION COMPANY LIMITED [APC]

AAPICO Precision Company Limited is a subsidiary

of AAPICO Forging PLC. The Company was established

in 2014, with a paid-up capital of Baht 150 million, to

focus on the automotive machined parts. Its main

customers are GKN Driveline (USA and Sweden),

Dana Spicer, and American Axle & Manufacturing.

AAPICO SODECIA (THAILAND) COMPANY

LIMITED [ASD]

AAPICO Sodecia (Thailand) Company Limited is a

joint venture of 50% equity each between AAPICO

Hitech PLC and Sodecia (Thailand) Company

Limited, a wholly owned unit of Sodecia SGPS S.A.

of Portugal. The Company’s main businesses are to

develop the business activities of chassis cradles for

passenger cars, cross car beams and welded

assemblies for Body in White (BIW). It was registered

with a capital of Baht 120 million.

EDSCHA AAPICO AUTOMOTIVE COMPANY

LIMITED [EA]

Edscha AAPICO Automotive Company Limited is a

joint venture between AAPICO Hitech PLC and

Edscha Holding GmbH of Germany, with equity of

49% and 51% respectively. It has registered capital

of Baht 40 million. The Company’s main business is

the manufacturing, development, assembly and sales

of automotive parts of high quality door, hood,

trunklid and liftgate hinges and door checks (Hinge

Systems) and parking brake levers and pedal

boxes (Driver controls). Its main customers are Auto

Alliance (Thailand), Isuzu, General Motors and

Mitsubishi.


AAPICO

AAPICO STRUCTURAL PRODUCTS COMPANY

LIMITED [ASP]

AAPICO Structural Products Company Limited

manufactures chassis frame for both new and old

model of Isuzu D-Max pick-up truck. The Company

is a wholly owned subsidiary of AAPICO Hitech PLC

with a paid-up capital of Baht 200 million.

ABLE SANOH INDUSTRIES (1996) COMPANY

LIMITED [ASICO]

Able Sanoh Industries (1996) Company Limited is the

manufacture of brake lines, fuel lines, and engine

parts for automotive assemblers in Thailand. Its main

customers are Toyota, Auto Alliance (Thailand),

Honda, Mitsubishi and Nissan. Major shareholders are

AAPICO Hitech PLC and Sanoh Industrial (Japan)

with equity participation of 46% and 51% respectively.

KATSUYA (THAILAND) COMPANY LIMITED [KT]

Katsuya (Thailand) Company Limited’s main products

are surface treatment-water printing for plastic

products and fabric flocking for automotive interior

panels. The Company has paid-up capital of Baht

28.5 million and is jointly owned by AAPICO Hitech

PLC and AAPICO Plastics PLC, with shareholding of

76% and 24% respectively.

SANOH INDUSTRIES (THAILAND) COMPANY

LIMITED [SI]

Sanoh Industries (Thailand) Company Limited

produces Fulton brazed steel tubing for major OEM

automakers both domestic customers and export to

ASEAN countries. The Company has paid-up capital

of Baht 146.25 million and 20% of its shares are

held by AAPICO Hitech PLC.

KUNSHAN CHAITAI-XINCHENG PRECISION

FORGING COMPANY LIMITED [KCX] - China

Kunshan Chaita i-Xincheng Precis ion Forging

Company Limited is a wholly owned subsidiary of

AAPICO Hitech PLC in China. The Company’s main

business is to manufacture the automotive

components such as engine connecting rod and

copper parts such as electrical switch contactors. Its

main customers are leading automotive assemblers

in China such as SAIC, SAIC-GM-Wuling Automobile,

Chery, etc., and Schneider Electric (China).

MINTH AAPICO (THAILAND) COMPANY LIMITED [MA]

Minth AAPICO (Thailand) Company Limited’s main

businesses are to design, produce, and sel l

automotive components including door sash, trim

parts, decorative parts and roof racks. It is a joint

venture between AAPICO Hitech PLC and Minth

Group (China), with equity participation of 40% and

60% respectively. The Company has paid-up capital

of Baht 378.5 million. Its main customers are Isuzu,

Nissan, General Motors and Ford (India and Thailand).

SUMINO AAPICO (THAILAND) COMPANY

LIMITED [SA]

Sumino AAPICO (Thailand) Company Limited is a joint

venture between AAPICO Hitech PLC and Sumino

Kogyo of Japan, with equity participation of 49% and

51% respectively. The Company’s main products are

precision press welding parts of medium and small

articles of cars. The Company was established initially

to support the business expansion in Thailand of its

main customer, Mazda Motor Corporation. It has

registered capital of Baht 200 million and its factory

is located at Amata Nakorn Industrial Estate in

Chonburi province.


ASSEMBLY JIGS AND STAMPING DIES

CAR DEALERSHIPS

and export to car automakers. Its customers include

Volvo Truck Corporation Sweden, Volvo passenger cars

in Malaysia, Renault Brazil, Auto Alliance (Thailand),

Ford and Isuzu in Thailand. The Company is a wholly

owned subsidiary of AAPICO Hitech PLC with paid-

up capital of Baht 65 million. Its factory is located at

the Hitech Industrial Estate in Ayutthaya province.

AAPICO HITECH TOOLING COMPANY LIMITED

[AHT]

AAPICO Hitech Tooling Company Limited’s main

businesses are the design and manufacture of

assembly jigs and stamping dies. Its products are

used to support the production of AAPICO Group

THAI TAKAGI SEIKO COMPANY LIMITED [TTSC]

Thai Takagi Seiko Company Limited’s business is

to produce plastic molding and plastic parts for

customers in automotive industry, such as Thai

Suzuki Motor, Suzuki Motor (Thailand), Kawasaki

Motors Enterprise (Thailand), Thai Honda Manufacturing

and Keihin (Thailand). The Company is jointly owned

by AAPICO Hitech PLC, Takagi Seiko Corporation and

Sojitz Management (Thailand) Co., Ltd., with equity

participation of 49%, 49% and 2% respectively.

JACKSPEED CORPORATION LIMITED [JCL] -

Singapore

Jackspeed Corporation Limited is a company listed

in the stock exchange of Singapore with paid-up

capital of SGD 21.8 million. Its main business is to

manufacture leather seats and accessories for the

automotive industry.

ABLE MOTORS COMPANY LIMITED [AM]

Able Motors Company Limited is a car dealer

with sales and after-sales services for Mitsubishi

vehicles. The Company has two showrooms and

service centers located at Navanakorn in Pathumthani

province and at Ladprao district in Bangkok. The

Company is wholly owned by AAPICO Hitech PLC

with paid-up capital of Baht 20 million.

NEW ERA SALES COMPANY LIMITED [NESC]

New Era Sales Company Limited is a car dealer

with sales and after-sales services for Ford vehicles.

The Company has two showrooms and service

centers on Ramindra road, Bangkok and in Samut

Prakan province. The Company is wholly owned by

AAPICO Hitech PLC with paid-up capital of Baht

20 million.

NEW ERA SALES (M) SDN. BHD. [NESM] -

Malaysia

New Era Sales (M) Sdn. Bhd. is a car dealer providing

sales and after-sales services for Honda cars in

Malaysia. Its showroom and service center is located

in Kajang area. The Company has paid-up capital of

RM 1.5 million and is owned by AAPICO Hitech PLC

and Tenaga Setia Enterprise Sdn. Bhd., with equity

participation of 49% and 51% respectively.


AAPICO

CAR NAVIGATION AND TECHNOLOGY

TENAGA SETIA RESOURCES SDN. BHD. [TSR] -

Malaysia

Tenaga Setia Resources Sdn. Bhd. is a car dealer

providing sales and after-sales services for Honda

cars in Malaysia. Its showroom and service center is

located in Petaling Jaya. The Company has paid-up

capital of RM 6 million and is jointly owned by

AAPICO Hitech PLC and YLN Enterprise Sdn. Bhd.,


HYUNDAI MOTOR (THAILAND) COMPANY LIMITED

[HM]

Hyundai Motor (Thailand) Company Limited is a sole

distributor responsible for manufacturing, marketing,

sales and after-sales service for both CKD and CBU

model of Hyundai cars in Thailand. The Company

has paid-up capital of Baht 550 million and is jointly

owned by AAPICO Hitech PLC and Sojitz Corporation,


AAPICO ITS COMPANY LIMITED [AITS]

AAPICO ITS Company Limited’s business is to

provide navigation system with traffic information in

every platform. The Company’s main products are

comprising of both software and map under the

brand “POWERMAP”, as well as telematics, real-time

services and data analytics services. With the

expertise in Geographic Information System (GIS)

services and the proven record of experience in the

analysis of big traffic data, AITS embarks on the

Smart Cities technology, which has shown a success

in Singapore. The customer segments vary from

individual, dealers, corporations and government

sectors. The POWERMAP car navigation system is

installed as the OEM products in Mitsubishi, Hyundai,

Proton and MG cars. It is also marketed to all other

major automotive brands through various brands of

hardware, which can be found in accessories dealers,

such as Blaupunkt, JVC, Zulex, etc., throughout the

country.

AAPICO QI SDN. BHD. [AQI] - Malaysia

AAPICO QI Sdn. Bhd. was established in 2013

to consolidate the market of POWERMAP and

GALACTIO car navigation system in Malaysia.

POWERMAP as an OEM product, while GALACTIO

as an aftermarket product installed in various

hardware and marketed in most major automotive

brands in Malaysia.

QUANTUM INVENTIONS PRIVATE LIMITED [QI] -

Singapore

Quantum Inventions Private Limited is in the business

of providing mobility intelligence to consumer,

corporations and governments, leveraging on the

integrated suite of mobility applications, enterprise

logistics and analytics platform. AAPICO Hitech PLC

has acquired 25% equity in Quantum Inventions Pte.

Ltd., with its shareholding under the name of AAPICO

Investment Pte. Ltd.


OTHERS

A ERP COMPANY LIMITED [AERP]

A ERP Company Limited is established to support

the Oracle implementation for the AAPICO Group.

The Company has paid-up capital of Baht 1.25

million and is owned by AAPICO Hitech PLC at 88%

equity.

AAPICO INVESTMENT PRIVATE LIMITED [AIPL] -

Singapore

AAPICO Investment Private Limited was established

with the purpose of carrying on transactions related

to merger and acquisition. The Company has a paid-

up capital of SGD 6.97 million and is wholly owned

by AAPICO Hitech PLC.

AAPICO TRAINING CENTER COMPANY LIMITED

[ATC]

AAPICO Training Center Company Limited was

established in 2014 with a purpose to organize

training activities for employees of AAPICO Group. It

is a wholly owned subsidiary of AAPICO Hitech PLC.

AAPICO ENGINEERING COMPANY LIMITED [AE]

AAPICO Engineering Company Limited focuses on

CAE (Computer Aided Engineering), programming,

engineering, consultancy, engineering design and

engineering research & development. The Company

is wholly owned by AAPICO Hitech PLC with paid-up

capital of Baht 10 million.

AAPICO ENGINEERING SDN. BHD. [AEM] -

Malaysia

AAPICO Engineering Sdn. Bhd. is set up for future

business potential. Currently, it owns a showroom

which is rented to Honda dealer in Malaysia. The

Company has paid-up capital of RM 1 million and is

jointly owned by New Era Sales (M) Sdn. Bhd. and

Tenaga Setia Resources Sdn. Bhd., with equity

participation of 51% and 49% respectively.


AAPICO

After recording no growth in 2014, exports grew 6.8%

year on year in 2015. Thailand continues to play an

important role as a production and export hub for the

OEMs which have taken root here. With the dawn of

AEC, it is believed that Thailand’s position as the

leading automotive manufacturing hub in ASEAN

will be strengthened. Thailand is forecasted to export

more cars in 2016 to the tune of 1.25 million units,

which reflects an increase of 3.7% compared to 2015,

despite the clouds hanging over the world economy.

Less encouraging is the domestic market situation. It is

showing a continued downward trend, albeit less severely.

2015 saw a drop of 9.3% from the previous year. 2014

had seen a dramatic dip of 33.7%. Various factors

contributed to the weak demand, driven mainly by

the general pessimistic view of the national economy.

Thailand is still reeling from the negative implications

Competition and Industry Trend

Year 2015 has been overall a challenging year in all the major markets AAPICO Hitech group is active in. They are

namely, Thailand, Malaysia, and China.

Thailand In Thailand, actual vehicle production recorded a mere 1.8% increase year on year to 1,913,002 units. Of this

number, export volume dominated nearly 1.201 million units (63%) and domestic sales took up 0.712 million

units (37%). Healthy growth of export largely compensated for continued tepid domestic market.

Source: The Federation of Thai Industry

848 889 972 993 686

1,091 920

1,496 1,386

1,137

Thailand Vehicle Production in 2005-2015

3,000

2,500

2,000

1,500

1,000

500

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 278 299 315 401 313 554 538

958 1,071 743

Passenger Car 1 Ton Pick-up/PPV and others

1,152

2015

761

of the last political upheaval in 2014. The military

government’s management of the economy has not

been convincing since its takeover of civilian rule,

prompting it to install a new economic team during the

last quarter of 2015. Pressing household debts and low

agriculture produce prices are dampening consumer

sentiments. The negative effects of the 1st car campaign

still linger on 3 years after it has ended, with many

purchases having brought forward and depriving the

domestic market of the needs and spending power.

In addition, a new regime of excise tax based on CO2

emission instead of engine size effective from Jan 2016

will cause 80% of new car prices to increase 5-10%,

further affecting market demand. 2016 is forecasted

to see a further decrease in overall sales numbers from

799,592 in 2015 to 720,000 in 2016. This translates

into a drop of 6.2%.

unit : thousand


Source: The Federation of Thai Industry

515 490 461 388 319 454 434

764 699

512

Thailand Total Industry Volume in 2005-2015

1,600 1,400 1,200 1,000 800 600 400 200 0

188 192 170 227 230 347 362 672 631 370

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

500

299

2015

Thailand Automotive Production Capacity

2015 Investment

Car Maker Passenger Pick-up Others Total (million 2016/2017

Car Truck baht)

Toyota 280,000 660,000 940,000 10,400 1,000,000

Mitsubishi 150,000 250,000 400,000 12,600 500,000

Isuzu 330,000 30,000 360,000 360,000

Auto Alliance Thailand 150,000 150,000 300,000 12,000 320,000

Nissan 140,000 80,000 240,000 6,000 300,000

Honda 300,000 300,000 8,100 420,000

Ford 200,000 200,000 18,000 200,000

General Motors 40,000 160,000 200,000 200,000

Suzuki 80,000 80,000 8,400 100,000

SAIC Motors CP 50,000 50,000 7,600 100,000

Total 1,390,000 1,630,000 30,000 3,070,000 83,100 3,500,000

Malaysia Looking further south of Thailand, Malaysia recorded

the highest ever Total Industry Volume (TIV) of 666,674

in 2015. This is a 0.17% increase from the previous

year. A trend indicating a slowdown in the automotive

market is clearly discernable with growth reducing

from 4.6%, 4.47%, 1.48% and lastly 0.17% in the past

4 years.

As with Thailand, various factors have caused the

general gloom in the Malaysian market, chiefly because

of political uncertainty and equally of the dramatic fall

in the price of oil, which is a main income earner of

Malaysia. The main victim of this double whammy is

the Malaysian currency, Ringgit, which is one of the

main losers in 2015 with depreciation against the

US Dollar exceeding 20% at its height. The volatility

of the Ringgit and the implementation of the Goods

and Service Tax of 6% in April 2015 both greatly

affected market sentiments and are expected to

continue to cast their shadows over the overall

economy in 2016. A dip in TIV in 2016 is expected

especially with the pent up sales in December 2015

Passenger Car 1 Ton Pick-up/PPV and others

unit : thousand


AAPICO

because of announced price increase by most major

car brands for January 2016.

The Malaysian automotive market continues to show

the domination of Perodua, which increased its market

share to 32%, followed by Proton at 15.3%. The latter

continues to lose market share from 17.4% from the

previous year. Honda dislodged Toyota from the

first place of foreign brand, earning at 14.2% market

share versus Toyota’s at 14.1%.

Looking forward, foreign brands will continue to gain

strength as their pricing become more competitive due

to gradual dismantling of preferential protective policies

for the local marques.

China Moving further north of Thailand to the biggest automotive

market in the world. China’s economy recorded the

slowest annual GDP growth in recent memory at 6.9%.

It is predicted that growth will continue to decelerate,

entering into the “new normal”, where growth rates of

8% and more will be a thing of the past.

The automotive industry recorded a 3.25% in production

growth and a 4.68% sales growth in 2015, in contrast

with 7.29% and 6.85% respectively in 2014. This is

in tandem with the overall economy trend. Total

production units amounted to 24.5 million and units

sold were 24.59 million. This also marked the seventh

time in a row that China’s vehicle sales emerged as

the highest in the world, 21.5 million of those being

passenger cars.

It is interesting to observe that the SUV and MPV

segments registered strong growths at 52.7% and

10.1% respectively, while sedans’ share decreased

by 5.4%. Overall, sales of domestic passenger vehicles

is forecasted to increase 7.8% in 2016, due to solid

economic fundamentals and strong personal income

growth especially. Commercial vehicles, however, will

see negative growth of 5%, due to the overall slowing

down of economy. Worth noting is the growing segment

of alternative energy vehicles, which is forecasted to

reach 700,000 units in 2016. This segment will be the

next big thing in the future, especially with the current

emphasis in China on environmental protection.


The overall Thailand economy in 2015 has been moving

slowly after a slump in 2014. Various factors have

contributed to the weak demand, driven mainly by

the general pessimistic view of the national economy

and the uncertainty of political situation after the

takeover of military government in 2014. The effects of

the 1st car campaign, which have brought forward car

demands and advance purchases in 2012-2013, still

negatively impact the domestic market of the needs

and spending power. This was due to the mandatory

holding period of 5 years before the car can be resale.

High household debts and low farm income has dampen

the consumer sentiments. Thailand’s gross domestic

product (GDP) in 2015 has shown a growth of 2.8%,

which has recovered from 2014 at the 0.8% growth.

Thailand automotive industry in 2015 posted a slow

rebound with a modest growth of total vehicle production

volume at 1.8% year on year after a dramatic decline

in 2014 at 23.5%. Compensating for weaken domestic

demands, exports grew year on year, increasing its

share to 63% of total vehicle production volume in

2015.

Thailand still plays an important role as a major base

for manufacturing and research and development and

export hub for leading car automakers as their biggest

production base. With the AEC become effective as of

January 2016, Thailand’s position as a primary

manufacturing center for South East Asia is expected

to be strengthen. The eco-car program phase 2, which

requires a minimum production volume of 100,000 units

per year to be entitled for privileges, is foreseen to be

another booster for growth, driving total vehicle

production volume to reach 3 million units in 2020.

Thailand is known for the skills and proficiency of

labors and has been widely accepted by leading

automakers for the excellent quality of automotive part

products, second only to Japan. AAPICO Hitech PLC,

as one of major tier 1 suppliers, has put great

emphasis on continuous development and the strong

alliances. The Company has formed joint venture with

strong partners from Japan and Europe to improve its

ef f ic iency and enhance exist ing technology,

empowering its own inner potential to be recognized as

a trusted brand in the global arena.

AAPICO Hitech PLC has its beginning in the design

and manufacturer of automotive assembly jigs, before it

ventured further afield into the production of dies and

OEM parts, car dealerships, as well as car navigation

and technology. Today, it is recognized as a world-

class automotive part supplier, where it continues to

garner capabilities and technology across the world.

The Company is poised to attain its dual goals of

steady growth and seizing new opportunities to foster

its success as a leading automotive part manufacturer

in Thailand.

The Company sets a vision and a simple philosophy of

being a lean, green, and happy organization and

operates in compliance with the good corporate

governance principles. The Company sets its goals by

applying the SQCDEM criteria, which can be described

as follows:

S: Safety Safety always come first.

Q: Quality Quality built-in process, strive to

achieve “0” PPM.

C: Cost Competitive pricing at reasonably low

cost.

D: Delivery 100% on-time delivery with Just-In-

Time philosophy.

E: Engineering Kaizen mind in engineering and

production process.

M: Management Competent, Transparent, and hands

on management.

Today, the Company is widely recognized for excellent

production process according to the SQDEM principles.

Business Operation Goals and Future Projects


AAPICO

This is in lines with its business strategy to become

leading automotive par t manufacturer in South

East Asia and a Thailand footprint for the global

part suppliers.

Future Projects Thailand automotive industry is seen to remain static

with the no growth forecast of domestic sales in 2016.

A new regime of excise tax based on CO2 emission

instead of engine size will cause more than 80% of car

prices to increase by 5-10%, hence some advance

purchases of cars were already recorded in the last

quarter of 2015. Export volume is forecasted at around

3-4% growth, contributing to total vehicle production

volume of around 2 million units in 2016.

The continuing political uncertainty and weak economy

have contr ibuted to the delay of automotive

investments, particularly the eco-car program phase 2,

and is anticipated to further delay the growth of total

vehicle production volume to reach 3 million units in

2020.

The Company has been entrusted to supply parts for

new car models by many major car manufacturers,

namely Ford, General Motors, Nissan, Mazda, Honda,

Toyota, and Mitsubishi. The Company has been

producing parts to Auto Alliances (Thailand) Co., Ltd.,

which is the first company that has star ted the

production under the eco-car program phase 2 for

Mazda 2 in November 2014, and has continuously

developed its manufacturing processes and innovation

to support increasing demands in coming years from

other leading automakers.

AAPICO Hitech PLC and its subsidiaries have been

recognized from its customers for excellent quality,

ef f ic ient product ion process and cont inuous

development. The major awards and cer tificates

received in 2015 were the Q1 award, given to AAPICO

Plastics PLC, from Auto Alliances (Thailand) Co., Ltd.

The Q1 award is given to Ford and Mazda suppliers

in recognition for the excellent quality standard.

AAPICO Plastics PLC is the third company of the

AAPICO Group to be qualified, following AAPICO

Hitech PLC and AAPICO Forging PLC that had

received their Q1 certificate in 2014. AAPICO Plastics

PLC was also the Grand Prix winner at the A-ABC 3rd

Joint Report event from Mazda Corporation in Japan.

Furthermore, AAPICO Hitech PLC has won the first

prize of the advance group for the Toyota Production

System for the second consecutive year and was the

first runner-up for the QA improvement, of which both

awards are presented by Toyota Motor Asia Pacific

Engineering and Manufacturing (TMAP-EM).

For overseas operations, Malaysian car dealers also

received the Honda CEO awards for the top 5 sales

performance and Elite Dealer award. The Malaysian

Honda dealers have been receiving these awards for 3

years consecutively. As for China operations, the

company has been selected as the outstanding

contribution supplier from Chang’an Ford Mazda Engine

Co., Ltd. These awards are proven records for the

Company’s commitments for excellence and continuous

improvement and hence a guarantee for continuing

orders from the car manufacturers.

In 2015, the Company has announced a “TURBO” plan,

where the Company’s management has set the target

for its own operations and subsidiaries to double the

sales, either organically or with acquisitions, and

improve net profit margin to reach 10% of total

revenues. The Company and its subsidiaries aim to

achieve this target by 2020, through its continuing

effort on cost reduction and the product innovation

that enable the Company to use resources effectively

in order to grow sustainably and generate appropriate

returns to shareholders.


At AAPICO, we realized the impor tance of risk management as a foundation that facilitates the good corporate governance principles of the overall organization. The Board of Directors therefore has been giving their attention on the risk management process, and has assigned the Risk Management Committee to be responsible for the supervision of the organization’s risk management measures in a systematic manner. The Company has put in place the framework for risk management strategy, in compliance with the international guidelines, aiming to suppor t business growth and ensur ing i ts sustainable profitability and returns to shareholders and investors. In 2015, the Risk Management Committee continuously develops and improves the risk management strategy and implements risk management practices across the organization. The committee meets on quarterly basis to consider the corporate risk factors and review risk management measures in relation to the enterprise risk management framework. The committee also has reviewed the risk management policy and anti-corruption policy in compliance with the Company’s direction to fight against corruption, which will be used as a guideline across organization. On annual basis, the Risk Management Committee considers and reviews various risk factors, posing as possible threats to the Company’s operations in responses to changes in economy and business environment, as well as the control measures to reduce the impact of these risks to an acceptable level. For 2015, the Committee has reviewed the Company’s major risk factors as follows:

Country Risks Country risk is the risk associated to changes in situations in the country that the Company operates, which may adversely affect the Company’s operating profits or the value of its assets. The Company identified two major country risks, which are:

Political Risk The Company identified political risk as one of its major risk factors as it impacts the overall economy and hence the Company and the automotive industry. In the past, the political instability has affected the Company from the unrest activities and delays of the government spending plans, which resulted in the slowdown of economy, weak domestic demand consumption, and hamper the growth of automotive industry. It is hard to predict the ferocity of any political disturbance due to the on-off political conflicts, which has not been resolved over the past years. The Company however has assessed this risk and has concluded that the impact on operations may be insignificant despite the moderate likelihood of occurrence. The close monitoring of political situations in Thailand is seen to be an appropriate measure under given circumstances. Moreover, diversification and growth of business overseas has helped reducing the impact on the Company’s profitability.

Risk from natural disaster Natural disasters can happen anywhere and often without warnings. It is caused by environmental factors that injure people and damage property. The Company had been affected by natural disasters on its operations and profitability during the past 5 years, namely Tsunami in Japan which indirectly impacted the Company’s operations due to shortage of supply parts and steels which is the main component, causing the delay of the production, and the major flood in Thailand that put the Company’s main factory under 2.2 meters of water, causing the damage of machines, inventories and buildings, additional costs to protect property and recover the operations, as well as business interruption and loss of revenue due to the shutdown of operations and productions after the flood.

Risk Factors


AAPICO

The Company has contemplated on the consolidated risk from natural disaster and established protective and preventive measures to limit and reduce the impact of this risk on the Company’s operations to an acceptable level, and enable the Company to recuperate its operations back to normal business in the fastest possible manner. These measures include the preservation of dyke surrounded the area of Hitech Industrial Estate, the negotiation on insurance coverage of all factories to cover all industrial risks including business interruption, and the maintenance of multiple facilities in several locations for possible relocation if one would be affected by natural disaster. Business Risks Risk from reliance on major customers Due to a relatively small number of automakers in Thailand, the Company is inevitably exposed to customer concentration risk in the automotive parts business segment. With a large portion of its revenues contributed by three major customers, namely Isuzu, AAT and Nissan, which comprised more than 50% of total revenues, the Company is exposed to risk from reliance on these few customers. This implies that the Company’s performance is closely linked with the operating performance and the market positions of these customers and its profitability can be materially affected if the Company loses orders from one of these customers. This customer concentration risk is however expected to be partially lessen as the chance that the Company may loses customer orders is somewhat low. The automobile part orders from customers are given for the lifetime of the car model and are likely to continue for the next generation of that model. In the past, the Company had no record of losing orders. In addition, the Company continuously improves and maintains the high standards of quality, punctual delivery and competitive pricing to reassure the customer for continuation of orders in the future.

Risk relating from the country concentration of customers The Company identified a business risk relating to the country concentration of its customer base. The Company is seen to be heavily relied on the Japanese economy as its revenues are largely from Japanese automakers. The failure of Japanese economy will have an impact on Japanese automakers and therefore affect the Company and the Thailand automotive industry. This may result in business interruption and revenue losses. The Company has set up control measures to keep track of news, updates and trend of the economy worldwide in order to respond to these changes appropriately and on timely manner. The risk may not be fully mitigated given that Japanese automakers are key players in the automotive market. The Company however expects that the growth of its oversea businesses can help diversify its products and customer base and therefore reducing the impact of this risk on its operations. Risk from the competition in the automotive industry The automotive part business can be highly competitive as the car automakers demand for high standard of operations and quality from their part suppliers. For each car model, the automotive part suppliers would strive to win as many projects as possible from car automakers as this can guarantee income for the company over a lifetime of car model line. The continuation of order for the next generation model also reflects the credibility and reliability of the company in maintaining its high standards of quality, cost, and delivery. Losing orders will impact the Company’s profitability and its reputation and will be a disadvantage for future projects. The Company has long-standing relationship and good track records with car automakers. Its high standards of quality, competitive pricing and punctual delivery,


Apart from labor issues within the organization, the Company can be affected by labor disputes in other organizations in the supply chain. However, such event is expected with low possibility of occurrence and the effect on the Company’s operations should be temporary and immaterial. Risk related to quality issue Quality is a very important factor for the automotive business. Every parts produced must be at 100% as any defects or errors can be potential cause of accidents and consequence will be severe. The Company will be losing its reputation and customers and may be sued by customers for damages arising from unsafe products. The Company has put great emphasis on quality control and set a target for zero defective parts. The Company has been certified for the quality control standard (ISO/TS16949) for all its part companies and continuously improves on controlling the product quality. It can be assured that the risk related to quality control will be continually reduced. The Company also has set up provisions for warranty claims for defective parts according to its purchase contract with customers and has purchased insurance on product liability to mitigate the financial impact of this risk. Management Risks Risk from reliance on only a single Top management person The Company may be potentially at risk from reliance on the President/CEO and founder of AAPICO Group, Mr. Yeap Swee Chuan. With strong leadership and his dedication and passion in the automotive business, Mr. Yeap’s presence has been an image of the AAPICO Group. His vision and strong presence has been one of key success factors for the Company’s growth and profitability. His retirement may affect the business as the relationship with customers may be weaken and the Company may lose new orders in such an intense competitive business environment.

have been recognized by most global car automakers. Therefore, the likelihood of losing customer orders for the Company is considered very unlikely. The certifications and quality awards received in the past are also proven records of the Company for its excellence in operations and production. Operational Risks Risk from fluctuation of raw material price For the automotive par t business, the Company is exposed to the f luctuation in demands and supplies of steels in the market worldwide. As steel is the primary raw material which accounts for approximately 75% of product cost, the impact of the price volatility on the Company’s profitability can be substantial. To manage this risk, the Company has adopted a centralized purchasing policy where the Company purchases raw materials from the approved suppliers at the price which have been agreed upon with customers. When the material price moves, the product price will be adjusted or compensated accordingly. The Company therefore pass on the risk of steel price fluctuation to car automakers and hence reduce such impact on the Company’s profitability. Risk related to labor relations A large employee population can pose risk to the organization from various labor issues. Poor relations and efficient communication with employees can cause many problems, either small or severe issues and labor strike, which will affect the production and delivery, hence damaging the credibility and reputation of the company. The management has emphasized on the sufficient communication and appropriate employees’ welfares and benefits as a key to reduce people conflicts and labor disputes in the organization. With the management’s attention on labor issues, the Company has encountered very few dispute cases to date.


AAPICO

The Company has a policy to naturally hedge the foreign exchange rate risk by matching income and payments in the same currency. The Company also considers using forward or option contract to eliminate this risk where appropriate. Other Risks Risk related to safety, environment and communities The Company encounters the risks associated with health, safety, and environment from its operations and manufacturing processes. The impact of these risks can be significant. If without good management, the organization may be badly affected and incurred losses due to serious accidents. Therefore, the Company continually reviews and ensures that the policy and procedures concerning employee health, safety and environmental management are executed in al l departments and entities. The management has placed importance on safety of its employees. Employees are given orientation and trainings to create good understanding and awareness for their own safety. The Company has been promoting activities, such as Completely Check Completely Find out (CCCF) and 5S, to create a safe, clean and easy to detect environment in the workplace. It continually supports campaigns related to safe driving and drug free workplace. The Company maintains a strict maintenance scheduling of equipment, arranges annual health check-up for employees, and ensures the compliance of relevant laws and quality and environmental standards in all entities. The continual certification on ISO/TS16949 and ISO14001 is a proven record for its credibility on quality and environmental management. Risk related to investments in other countries With a goal to become a leading automotive part manufacturer in Asia, AAPICO also looks for good investment opportunities. Business dealings in other countries can pose risk to the Company due to level of uncertainty of the projects, regulations and other risks relating to the country that the Company will invest in.

The Board of Directors has addressed this concern and considered the succession plan to mitigate impact of this risk. In short-term, Mr. Yeap will continue to support the business operationally and gradually increase his focus in the area of strategic planning and advisory role for AAPICO group. Heads of subsidiary companies are empowered to be responsible for its performance and profitability and reported to the President and CEO. The Company has also structured training and development programs for managers. Financial Risks Risk from fluctuation of interest rates The Company has engaged credit faci l i t ies agreements with banks to finance its investments. These agreements have different terms and conditions, some at fixed interest rate and a large portion is at floated rate. The Company is therefore exposed to interest risk where any changes of interest rates has direct impact on the cost of capital. The Company has established risk management measures by entering interest rate swap agreement to allocate some portion of outstanding loans at fixed interest rate and engage new term loans with fixed interest rate. In 2015, the Company has issued a 3 year corporate debentures at fixed interest rate. All these measures help reducing the floated interest rate portion of outstanding loans to approximately 57% of total long-term loan outstanding as of December 2015, hence reducing impact on the Company’s profitability. Foreign Exchange Rate Risk The Company is exposed to risk from fluctuation of foreign currency exchange rate from export revenues and expenses in foreign currency, mainly the purchase of machineries and raw materials. However, this risk is considered to be insignificant as the portion of foreign currency transactions is limited due to the Company’s businesses are mainly conducted in Thai Baht currency.


2015, the impact on the Company’s profitability and liquidity can be substantial. The Company carefully and cautiously negotiates terms and conditions with banks. Before signing on any credit facilities agreement, the Company ensures that its cash flow will be sufficient for loan repayment and all required conditions and financial covenants can be achieved and maintained over the tenor of the loan agreements. In the unforeseen event that the Company cannot fulfil any conditions, the Company quickly inform and seek waiver from banks to evade the stage of default which give the right for bank to call back its loans. Risk related to corruption and misconducts The Company is firmly opposed to all forms of corruption and encourages and supports its employees at all levels to focus with conscious mind to fight against corruption. The Company ensures that relationships and business dealings are conducted and managed with integrity and are bounded by laws. Given that there were no severe cases of misconducts in the past year, the Risk Management Committee has reviewed and concluded that impact of such risk to the Company is minimal and not significant.

The Board of Directors has set guidel ines for management to conduct a feasibility study for every new projects. This information will be considered by the Board of Directors to evaluate return on investments so that the Company can allocate its funding resources in the most effective and efficient manner and generate returns back to its shareholders. Risk related to joint venture partner Due to a number of joint venture companies that the Company has invested in the past, it is exposed to possible risks which can be arisen from the performance of joint venture and the relationship between the Company and joint venture partners. These risks can result in a loss to the Company’s financials. If these joint ventures’ operations are not running well, the Company may have to account for losses. In the worst case, the Company may have to set up impairment if problems cannot resolved and reducing the value of its investments. The Company has managed this risk from the start where the management carefully select their joint venture partners in every project. To become JV partner, the management must ensure that both companies share the same vision and have respect for each other. The scope of control and terms and conditions must be discussed and agreed for each party’s responsibilities. The Company also monitors the JV performance and provide management support as deemed necessary. Risk from credit facilities with banks The Company is exposed to the risk that the bank may call back its credit facilities or demand for its loan to the Company to be repaid at high interest rate, due to the breach of terms and conditions with banks. Although the Company has diversified its funding portfolio with the issuance of debentures in the year 2015, bank loans are still a major funding source for the Company. With a sizable amount of bank loans outstanding of around Baht 2.5 billion as of December


AAPICO

As of December 31, 2015, AAPICO Hitech PLC has

registered and paid-up capital of Baht 322,583,844,

all of which are ordinary shares at par value of Baht

1 each.

During the year, the Company has made a domestic

offering in Thai Baht with a nominal value of Baht 1,000

(one thousand baht) each, in the total aggregate

principal amount of Baht 800,000,000 (Eight Hundred

Million Baht) namely, “The Debenture of Aapico

Hitech Public Company Limited No.1/2558 Due B.E.

2561” to Qualified Investors (Institutional Investors

and High Net Worth Investors: II&HNW) on April 29,

2015. The details are as follows:

Apar t from the aforementioned debenture, the

Company does not have any other securities with

terms and conditions different from ordinary shares,

such as preferred shares, etc. The Company has

registered the transfer of preferred shares to ordinary

shares on August 2, 2013. As a result, the Company

no longer has preferred shares on its account.

Shareholding Structure

Type of Debenture Senior, unsecured, unsubordinated and specify debenture holders

Tenor 3 years from the issue date

Currency Thai Baht

Issue Size Baht 800,000,000 (Eight Hundred Million Baht)

Maturity Date April 29, 2018

Conditions for Issuer has no right to redeem the debenture prior to maturity date, except in the case of

prepayment bond repurchase as defined in the Terms and Conditions. Debentureholders also have

no right to require the issuer to redeem the debenture prior to maturity date.

Interest rate and Fixed rate at 4.34% (Four point three four percent). Interest payment shall be made every

Interest peried 6 months on April 29 and October 29 of every year until the maturity date of debenture.

Status of the Debenture The debenture constitutes direct, general, unconditional and unsubordinated obligations of

the Issuer which with at all times rank pari passu among themselves and at least pari passu

with all other present and future unsecured and unsubordinated obligations of the Issuer,

save for such obligations as may be preferred by provisions of law that are both mandatory

and of general application.


The major shareholder with management control

on the Company are Mr. Yeap Swee Chuan Group,

of which Mr. Yeap Swee Chuan and Mrs. Teo Lee Ngo

are the Company’s authorized directors.

The Company does not have any shareholder’s

agreement among major shareholders. However, Sojitz

Corporation, being the second major shareholder,

has 2 representatives in the Board of Directors of

the Company in the position of non-executive director.

Top 10 Shareholders of the Company The top 10 major shareholders of the Company at the closing of share register book on March 23, 2016, are listed

in the below table.

Limitation of foreign shareholder

The threshold limit of foreign holding is at 49%

of total shares as required by law. At the closing of

share register book on March 23, 2016, the foreign

shareholding of the Company has reached its

maximum limit at 49% of total registered and paid-up

capital.

No. Shareholders Number of shares Holding %

1 Mr. Yeap Swee Chuan 40,971,379 12.70

Mrs. Teo Lee Ngo 31,811,346 9.86

Mr. Yeap Swee Chuan Group 72,782,725 22.56

2 SAIT Company Limited 25,924,320 8.04

Sojitz Automotive Investment Pte. Ltd. 24,907,680 7.72

Sojitz Corporation Group 50,832,000 15.76

3 Ms. Yeap Xin Yi 30,114,640 9.34

4 Ms. Yeap Xin Rhu 25,646,760 7.95

5 Phatra Capital Public Company Limited 14,550,600 4.51

6 Mr. Pichai Wijakkapan 12,270,640 3.80

7 Thai NVDR Company Limited 8,859,571 2.75

8 Mr. Sompong Paoenchoke 6,819,040 2.11

9 Mr. Nattapat Rangsun 5,740,000 1.78

10 Ms. Sunee Sereepanu 5,550,000 1.72

Others 89,417,868 27.72

Sum Total 322,583,844 100.00 Source: Thailand Depository (Thailand) Co., Ltd. (Information at the closing of share register book on March 23, 2016)

Remark: Mr. Yeap Swee Chuan and Mrs. Teo Lee Ngo are considered acting in concert group according to the

SEC definition.


AAPICO

Debentures As of December 31, 2015, the Company has an outstanding debenture which has been listed and being traded on

the Thai Bond Market Association or “Thai BMA”, with details as follows: which has details as the following:

The Debenture of Aapico Hitech Public Company Limited No.1/2558 Due B.E. 2561

Type of Debenture Senior, unsecured, unsubordinated and specify debenture holders

Tenor 3 years from the issue date

Issue Size Baht 800,000,000 (Eight Hundred Million Baht)

Issue Unit 800,000 Units

Par Value Baht 1,000 (One Thousand Baht)

Issue Price Baht 1,000 (One Thousand Baht)

Issue Date April 29, 2015

Maturity Date April 29, 2018

Interest rate and Fixed rate at 4.34% (Four point three four percent). Interest payment shall be made every Interest period 6 months on April 29 and October 29 of every year until the maturity date of debenture.

Registrar Bangkok Bank Public Company Limited

Debentureholders’ Bangkok Bank Public Company Limited

Representative

Outstanding Unit 800,000 Units (Information as of December 31, 2015)

Outstanding Value Baht 800,000,000 (Information as of December 31, 2015)

Conditions for prepayment Issuer has no right to redeem the debenture prior to maturity date, except in the case of

bond repurchase as defined in the Terms and Conditions. Debentureholders also have no

right to require the issuer to redeem the debenture prior to maturity date.

Status of the Debenture The debenture constitutes direct, general, unconditional and unsubordinated obligations

of the Issuer which with at all times rank pari passu among themselves and at least pari

passu with all other present and future unsecured and unsubordinated obligations of the

Issuer, save for such obligations as may be preferred by provisions of law that are both

mandatory and of general application.

Credit Rating BBB+ / Stable

(TRIS Rating)


Dividend Policy The Company has a policy to pay dividend at the rate

of not less than 10% of net profit after taxes to its

shareholders. However, the decision for dividend payment

is subjected to future investment plan and other

necessities as the Company deems appropriate. The

Company must also have fully allocated its retained

earnings up to 10% of registered capital for legal

reserves and thus no additional reserve is required.

The dividend payment must be approved by the

shareholders’ meeting except for the interim dividend

payment, which can be approved by the Board of

Directors, given that the Company has sufficient liquidity.

In the past 5 years, the Company has paid dividend to

its shareholders, on average, at the rate ranging from

25% to 35% of net profit attributable to equity holders

after taxes, as shown in the table below.

Dividend Policy for Subsidiary Company For subsidiary company under the Company’s

management control, the payment of dividend would

be considered based on the performance, liquidity

and financial position of the Company, as well as the

future investment plan and other necessities as the

company deems appropriate. The company must also

have fully allocated its retained earnings up to 10%

of registered capital for legal reserves and thus

no additional reserve is require, before considering

the dividend payment to the Company and other

shareholders. The Company has no policy that could

pose a manipulative benefits to a lack of transparency

on good corporate governance in any way.

Unit: in Baht or in percentage 2011 2012 2013 2014 2015

Earnings per share (EPS) -1.72 4.050 2.05 1.14 0.97

Dividend per share (DPS) 0.161 0.938 0.49 0.30 0.302

Dividend Payout Ratio (%) -11.0% 27.4% 25.9% 26.4% 30.9%

Note: 1 Dividend in 2011 was paid from the performance of the 1st half of the year due to the flood in the 2nd half of the year.

2 Dividend in 2016 is pending for approval from the Annual General Meeting of Shareholders.

An overview of dividend payment in the last 5 years


AAPICO

Nomination and Remuneration Committee

Organization and Management

Risk Management Committee

Audit Committee

Internal Auditor

President and CEO Mr. Yeap Swee Chuan

1

Finance and Administration

Mrs. Teo Lee Ngo

2 Manufacturing and Operations Mr. Veera B.

3

4 5 6 Finance & Accounting

Ms. Yeap Xin Rhu

Sales & Marketing Mr. Roengsuk V.

Project Engineering Mr. Kawee W.

MIS Mr. Sattha P.

7

IT

Production

Maintenance

Logistics

Quality

Accounting

Human Resources

HR Development

- 1 7

IR

Treasury

Purchasing

Board of Directors AAPICO HITECH PLC

is the management according to the SEC definition.

Organization Chart of AAPICO Hitech Public Company Limited as of December 31, 2015


Board of Directors

Mr. Mikihisa Takayama Age 55 years Non-Executive Director / Member of Risk Management Committee Date of appointment: 14 May 2015 AH Shareholding: - Education: Bachelor of Foreign Studies, Kobe City University of Foreign Studies, Japan Work Experience in the past 5 years: 2015 - Present Director, AAPICO Hitech PLC 2013 - Present General Manager, Automotive 3 Department, Sojitz Corporation 2010 - 2013 President, Autrans (Thailand) Co., Ltd. 2008 - 2010 Deputy General Manager, Automotive 3 Department, Sojitz Corporation

Mr. Yeap Swee Chuan Age 68 years President and Chief Executive Officer / Authorized Director Date of appointment: 1 August 2002 AH Shareholding: 12.70% Education: Bachelor Degree, Technology (Industrial Management), Massey University, New Zealand Training: Director Certification Program (DCP108/2008), Thai Institute of Directors Work Experience in the past 5 years: 2010 - Present Director, Board of Trade 2010 - Present Vice Chairman, Peace Network of Thailand 2005 - Present Chairman, Malaysian Thai Chamber of Commerce 2000 - Present Director, Audit Committee, Goodyear (Thailand) PLC 1996 - Present President and CEO, AAPICO Hitech PLC

Mrs. Teo Lee Ngo Age 66 years Executive Director / Authorized Director Date of appointment: 1 August 2002 AH Shareholding: 9.86% Education: Bachelor of Commerce (Industrial and Business Management) Nanyang University, Singapore Work Experience in the past 5 years: 1996 - Present Executive Director, AAPICO Hitech PLC 1996 - Present Director, Able Sanoh Industries (1996) Co., Ltd.

Mr. Hideo Hatada Age 51 years Non-Executive Director / Member of Risk Management Committee Date of appointment: 14 August 2013 AH Shareholding: - Education: Bachelor of Electrical and Electronics Engineering, Faculty of Science and Technology, Sophia University, Japan Work Experience in the past 5 years: 2013 - Present Director, AAPICO Hitech PLC 2013 - Present President, Autrans (Thailand) Co., Ltd. 2012 - Present Director, Sojitz Automotive Investment PTE LTD 2011 - 2013 Deputy General Manager, Automotive Dept.3, Sojitz Corporation 2009 - 2011 Manager, Automotive Dept.1, Sect.1, Sojitz Corporation 2008 - 2009 Manager, Automotive Dept.1, Sect.3, Sojitz Corporation


AAPICO

Mr. Pipat R. Punya Age 67 years Independent Director / Chairman of Audit Committee / Chairman of Nomination and Remuneration Committee Date of appointment: 1 August 2002 AH Shareholding: - Education: Bachelor of Laws, Thammasat University, Thailand Master of Public and Private Management, NIDA, Thailand Training: Director Accreditation Program (DAP11/2004), Thai Institute of Directors Role of Chairman (RCP35/2014, Thai Institute of Directors Work Experience in the past 5 years: 2004 - Present Director, Villa Comforta Co., Ltd. 1996 - Present Director, AAPICO Hitech PLC 1988 - Present Director, Go Thailand Tour Co., Ltd. 1983 - Present Partner and Managing Director, Nitipat Law Office Co., Ltd.

Mr. Wichian Mektrakarn Age 62 years Independent Director / Member of Audit Committee / Member of Nomination and Remuneration Committee Date of appointment: 27 April 2015 AH Shareholding: - Education: Bachelor of Science in Electrical Engineering, California State Polytechnic University, Pomona, USA Training: Director Certification Program (DAP107/2008), Thai Institute of Directors Work Experience in the past 5 years: 2015 - Present Director, AAPICO Hitech PLC 2009 - 2014 Chief Executive Officer, Advanced Info Service PLC 2006 - 2009 President, Advanced Info Service PLC

Mr. John Parker Age 69 years Independent Director / Chairman of Risk Management Committee Date of appointment: 26 April 2011 AH Shareholding: - Education: Bachelor of Engineer, Port Elizabeth College of Education Cost and Management Accounting, University of South Africa Work Experience in the past 5 years: 2014 - Present Director, Asian Advisory Board, Pinnacle Engines Inc. 2011 - Present Director, AAPICO Hitech PLC 2006 - 2010 Executive Vice President, Asia Pacific and Africa, Ford Motor Company

Mr. Kenneth Ng Age 47 years Independent Director / Member of Audit Committee / Member of Nomination and Remuneration Committee Date of appointment: 1 December 2008 AH Shareholding: - Education: Bachelor of Sciences (Honor), Biotechnology, Graduated uppersecond, King’s College London University, UK Qualified Chartered Accountant (Institute of England & Wales) Training: Director Certification Program (DAP189/2014), Thai Institute of Directors Work Experience in the past 5 years: 2008 - Present Director, AAPICO Hitech PLC 2005 - Present Director, KNKN Co., Ltd. 2005 - Present Director, NT Asset (Thailand) Co., Ltd.


Name Board of Directors Audit Nomination & Risk Management Committee Remuneration Committee Committee

Mr. Yeap Swee Chuan1 Chairman & Executive Director Mrs. Teo Lee Ngo1 Executive Director Mr. Pipat R. Punya Independent Director Chairman Chairman Mr. Kenneth Ng2 Independent Director Member Member Mr. Wichian Mektrakarn Independent Director Member Member Mr. John Parker Independent Director Chairman Mr. Hideo Hatada Non-Executive Director Member Mr. Mikihisa Takayama Non-Executive Director Member

Remark: 1 Mr. Yeap Swee Chuan and Mrs. Teo Lee Ngo are authorized directors jointly signed together on behalf of the Company with the Company’s seal affixed.

2 Mr. Kenneth Ng is the member of Audit Committee with background in finance and/or accounting.

Board of Directors The Board of Directors of AAPICO Hitech Public

Company Limited is comprising of 8 qualified directors,

who have knowledge and experience in the automotive

กรรมการ กรรมการสรรหาและ กรรมการ

The Board of Directors is appointed and approved

by the shareholders’ meeting to have the power

and duties to appoint the Company’s management,

senior executives and directors, and to monitor the

Company’s activities and performance. Roles and

responsibilities between the Board of Directors and

the executive management have been clearly defined

and are conformed to laws, regulations, code of conducts

and business ethics.

In 2015, the Company had organized 13 meetings for

the Board of Directors and its committees, including

the shareholders’ meetings. An overview of meetings

and directors’ attendance is described below.

Board of Audit Nomination & Risk Shareholder’ Name Directors Committee Remuneration Management Meeting Committee Committee AGM EGM

Mr. Yeap Swee Chuan 4/4 - - 3/4 1/1 1/1 Mrs. Teo Lee Ngo 3/4 - - - 1/1 1/1 Mr. Pipat R. Punya 4/4 4/4 1/1 - 1/1 0/1 Mr. Kenneth Ng 4/4 4/4 1/1 - 1/1 1/1 Mr. Wichian Mektrakarn1 3/3 3/3 - - 1/1 - Mr. John Parker 4/4 - - 4/4 1/1 0/1 Mr. Hideo Hatada 4/4 - - 4/4 1/1 1/1 Mr. Mikihisa Takayama1 1/3 - - 1/3 - -

Note: Directors absent from the meetings in 2015 were due to overseas trips. Remark: 1 Mr. Wichian Mektrakarn was appointed by AGM on April 26, 2015. Mr. M. Takayama was appointed on May 14, 2015.

industry or in related fields, which are beneficial to

the Company. The list of Board of Directors and its

committees in 2015 is described in the table below.


AAPICO

Top Management The management team of AAPICO Hitech Public Company Limited as of December 31, 2015, according to the

definition of Security and Exchange Commission, is listed in the following table.

Rank Name Position

1. Mr. Yeap Swee Chuan President and CEO 2. Mrs. Teo Lee Ngo Executive Director, Finance and Administration Department 3. Mr. Veera Buanwongse Director, Manufacturing Department 4. Ms. Yeap Xin Rhu Director, Finance & Accounting and Purchase Department 5. Mr. Roengsuk Viphoonitisilkul General Manager, Sales and Marketing Department 6. Mr. Kawee Wasaruchareekul General Manager, Project Engineering Department 7. Mr. Sattha Peth-in Assistant General Manager, MIS Department

The Management of Major Subsidiary Companies The Company has the policy to empower the management of its subsidiaries. The following diagram provides an

overview of the head of major subsidiary companies.

Company Secretary The Board of Directors has appointed Ms. Phanthip

Sintawanarong as the Company Secretary, responsible

for organizing the Board of Directors and its committees’

meeting and shareholders’ meeting, as well as preparing

for notice and minute of meeting. The Company

Secretary is also responsible for the filing of documents

as stipulated by laws, SET and SEC.

Mr. Yeap Swee Chuan President and CEO [AH]

Mr. Gao Xue Guang COO

Kunshan Chaitai-Xincheng Precision Forging (China)

Ms. Yeap Xin Rhu COO

Aapico Forging PLC

Mr. Teoh Seng Leong Managing Director Aapico Plasctics PLC

Mr. Chigira Kiyoshi General Manager

Aapico Hitech Toolings

Ms. Tang Kim Koh General Manager Able Motors

New Era Sales (TH)

Ms. Tang Kim Koh General Manager New Era Sales (MY)

Tenaga Setia Resources

Mr. Yong P. COO

Aapico Amata Aapico Structural Products

Mr. Yugijo Daud General Manager

Aapico ITS

Mr. Veera B. Director

Aapico Hitech Parts Aapico Lemtech


Directors’ Remuneration Annual Remuneration Attendance Fee

For the year 2015 (per person/per year) (per person/per meeting)

Board of Directors (BOD) Independent Director Baht 275,000 Baht 15,000 Audit Committee (AC) Chairman Baht 50,000 Baht 10,000 Member Baht 25,000 Baht 10,000 Nomination and Remuneration Committee (NRC) - Baht 7,500 Risk Management Committee (RM) - Baht 7,500

The Board of Directors’ remuneration The remuneration of the Board of Directors and its

committees was considered and proposed by the

Nomination and Remuneration Committee, taking into

account the scope of responsibilities and performance

of the directors and the comparison of directors’

remuneration of other listed companies engaged in the

same industry having similar business size, performance,

and directors’ accountability. The Annual General Meeting

of Shareholders shall consider and approve the directors’

remuneration, which are comprising of the annual

remuneration and attendance fee. There are no other

benefits provided to the directors other than those

mentioned in the following table.

The payment of each director was varied according to

their responsibilities and attendance. The directors’

remuneration in 2015 was paid to independent directors

only, as the remuneration for executive directors is

included as part of the management’s compensation

and non-executive directors, as a representative of major

shareholder, are not entitled for directors’ remuneration.

The payment of directors’ remuneration to each director

is summarized in the table below.

Directors’ Remuneration Annual Attendance Fee Total For the year 2015 Remuneration BOD AC NRC RM (in baht)

Mr. Pipat R. Punya 325,000 60,000 40,000 7,500 - 432,500 Mr. Kenneth Ng 300,000 60,000 40,000 7,500 - 407,500 Mr. Supasak Chirasavinuprapand1 300,000 25,000 - - - 325,000 Mr. John Parker 275,000 60,000 - - 30,000 365,000 Mr. Wichian Mektrakarn1 - 45,000 30,000 - - 75,000

Remark: 1 Mr. Supasak Chirasavinuprapand has retired as from April 26, 2015 and has been replaced by Mr. Wichian Mektrakarn.

Executives’ remuneration The remuneration for executives is in the form of

salaries, bonuses, and provident fund. In 2015, there

were 23 executives in the position of manager level

and above, and total remuneration paid was at Baht

35.17 million.

Executives’ Remuneration Year 2014 Year 2015 For the year 2015 (million baht) (million baht)

Salary 28.47 29.30

Bonus 6.98 4.75

Provident Fund 1.03 1.12

Total Amount 36.48 35.17

Number of Executives 24 people 23 people


AAPICO

Employees’ remuneration The Company provides compensation and benefits to

its employees in the form of salaries, wages, bonuses,

contribution to social security and provident fund, as well

as welfares and other benefits. The remuneration paid

to employees in 2015 in the form of cash and cash

equivalent was in a total amount of Baht 1,354 million,

as compared to Baht 1,335 million in 2014.

Other Benefits Provident Fund

The Company has jointly established provident fund

with its employees, where both parties contribute to

the funds on monthly basis at the rate of 3%-7% of

wage or basic salary. The contribution for the year 2015

was approximately Baht 22 million, as compared to

Baht 21 million in 2014.

Long-term employee benefits

The Company also provides severance payments and

gratuity benefits to employees upon retirement. The

payment is made in compliance with labor laws.

Employee Joint Investment Program (EJIP)

The Company had init iated the Employee Joint

Investment Program (EJIP), where employee and the

Company join on voluntarily basis to regularly invest

in the Company’s stock, as an incentive scheme to

motivate and create sense of ownership for employees.

This program was offered to employees in the position

of manager level and above, who has been with the

Company for at least 1 year on the application date.

The program period was 2 years and had ended in

September 2014. There were 44 employees participated

in this program.

Employees As of December 31, 2015, AAPICO Hitech PLC and its major

subsidiaries have in total 3,991 employees, which can be

classified by country and by product segment as follows:

Product / Business Thailand Malaysia China Total

2014 2015 2014 2015 2014 2015 2014 2015

Jigs and Dies 129 130 129 130

Automotive Parts 3,040 3,124 461 314 3,501 3,438

Car Dealerships 158 155 117 149 275 304

Other1 120 116 3 120 119

Total 3,447 3,525 117 152 461 314 4,025 3,991

Remark: 1 include employees in the car navigation and technology and shared resources for supporting departments.

Human Resources Development

At AAPICO, employees are an important factor for the

sustainable growth of the Company. The Company’s

management therefore has put great emphasis on the

development of its employees. It has focused and

committed to develop and improve the abilities and

skills of its employees to reach their full potential and to

meet the changing requirements of the industry for the

high standards of quality and processes.

The Company has arranged trainings and development

programs for employees in all levels, under the

arrangement of the AAPICO Training Center, which

was established in 2014. Throughout the year, the

Company arranges trainings where expertise in various

fields are invited to teach and share their knowledge

and experience with employees. These programs can

be described in main category as follows:


Employee Orientation

The employee orientation program is aimed for

employees to understand and become accustomed

and conform to the Company’s policies. It is a

mandatory program for every employees. The session

is organized at the beginning of each month, covering

the information of the Company, its business, the

company’s policies, the safety principles, code of

conducts, and welfares and benefits for employees.

Technical Skills Development

This program aims to improve employee skills in the

areas that are directly relevant to their work, such as

quality training, safety training, etc.

Supervising Skills Development

This program aims to develop coaching skills for

managers in order to prepare for leading role in the

management level.

Quality Management System

This program involves the policy and the compliance

to the standard of quality management system, namely

ISO/TS16949 or ISO standards, in order to create

awareness to employees for the standard of quality work,

which is an important key factor for the automotive business.

Safety and Environment Management

This program focuses on employees’ awareness for

their safety at work in order to create safe workplace

environment and identify preventive measures before

the accidents.

Management Information System

This program educates employees to operate on the

ORACLE system and to use and utilize the information

technology to manage their work effectively and

efficiently and comply to applicable laws related to

computer and information technology. Training courses

are arranged on regular basis or upon the request from

department heads.

Quality of Life Training

This program attaches great impor tance to the

development of self-discipline, teamwork and good

leadership, and continuous encouragement at becoming

a good person, which will lead a person to become a

strong contributor to the organization and society. This

is in line with the Company’s vision to create a happy

workplace environment, as the employees’ quality of life

has an impact on the quality of their work. This training

is set up by the Company with a qualified team of

trainers and lecturers from Thailand Develop Club. The

outline of the course encourages remembering and

practicing the fundamental of life, refraining from vices,

encouraging love and understanding within family,

understanding the real root cause of daily problems

and working out the way to resolve and improve their

quality of life.

Management Seminar

The management seminar is arranged twice a year,

normally in the month of January and July, where

managers and executives are joining for acquaintance

and updates on the Company’s performance, strategy

and directions. In the dinner set up atmosphere,

notable speakers who are known for their managerial

and leadership role are invited to share their knowledge

and experience with the Board of Directors and the

Company’s executives. In 2015, the Company arranged

the management seminar on January 31, 2015 and July

18, 2015.


AAPICO

The Board of Directors of AAPICO Hitech Public

Company Limited has placed importance on having

good corporate governance as a foundation for long

term sustainable and profitable growth for Company.

Over the years, the Board of Directors has continuously

developed the Company’s corporate governance

principles and has applied the best practices wherever

possible and practical to the Company.

The corporate governance policy provides the guideline

in directing the affairs of the Company to conduct its

business with transparency, honesty, and ethically. The

Company has demonstrated its commitment to adhere

to guidelines for listed companies and regulations of

the SET and SEC and seek for improvements to its

solid foundation in good corporate governance.

1. Right of Shareholders The Company operates with consideration to the rights

of shareholders and refrain from limiting shareholders

to have access to the company information. Shareholders

receive their basic rights, which include the right to

freely buy, sell, and transfer shares, the right to

adequately receive news and information in a timely

manner and on regular basis, the right to participate

and vote in the shareholders’ meeting to elect or

remove board members, appoint external auditor and

receive share of profit, and the right to approve the

amendments to the company’s articles of association

or memorandum of association, etc. The Company

encourages shareholders to attend the shareholders’

meeting and exercise their rights, and prohibits any

actions that could violate shareholders’ rights.

The Company has the policy to promote and facilitate

shareholders’ participation, including institutional

investors, at the general meeting of shareholders by

selecting the venue, time and date at the convenient of

shareholders to attend the meeting. In 2015, the Annual

General Meeting of shareholders was held on Monday,

April 27, 2015 at 14.30 Hrs. at the Stock Exchange of

Thailand. In any cases that shareholders are not able to

participate in the shareholders’ meeting, the Company

encourages shareholders to appoint independent

director or any individual as their proxy. The proxy

form, which shareholders can specify their vote on

each agenda, is delivered to shareholder together with

the notice of the meeting and can be downloaded from

the company website.

Before the meeting, the Company prepared and

published notice of the meeting to shareholders in a

clear and timely manner. The notice of meeting

explicitly indicated time, date, venue, and the matters to

be tabled at the meeting including the board’s opinion

on each agenda. Sufficient information was attached

with the notice, which was delivered by post mail to

shareholders 7 days prior to the meeting. The same

information was also made available on the company’s

website, in both Thai and English language, allowing

sufficient time for shareholders to review information

before the meeting.

For the AGM 2015, the Company provided opportunity

to shareholders to propose agenda items or nominate

qualified candidates to be appointed as the Company’s

director for the board’s consideration during October

to December 2014, with detailed criteria and procedure

publicly available on the company website under

investor relations section. Shareholders were also given

opportunity to submit inquiries through the same

channel. However, there were no proposal from

shareholders for the board’s consideration of any

additional agenda items or director nominees.

On the meeting day, the Company used an online

registration tool to facilitate the registration process.

Shareholders and proxy holders were requested to

verify their identity as prescribed in the registration

procedure provided with the notice of the meeting. The

Company also provided stamp duty for proxy holders

at their convenience.

Corporate Governance


Before the meeting is convened, the Chairman clearly

advised the quorum, voting procedures and voting

count method to the meeting prior to the discussion of

the agenda items. Shareholders are allowed to attend

the meeting after it has been convened, however, their

votes would be counted as quorum as from time they

attend the meeting and would be entitled only for

pending agendas that have not yet resolved. Directors

are advised to join the shareholders’ meeting. At the

AGM 2015, 7 out of 8 directors (87.5%) attended

the meeting, which included the Chairman of the Board

of Directors, the Chairman of Audit Committee and

Nomination and Remuneration Committee and the

Chairman of Risk Management Committee. External

auditors also attended the meeting and witnessed the

vote counting.

The Company discussed the matters in the AGM in

sequence as given in the notice of the meeting.

Shareholders are encouraged to express their opinions

and suggestions, as well as raising questions to the

Board of Directors. There were no matters other than

those specified in the notice of the meeting. For the

election of director, the Company provided that

shareholders to elect the Company’s director on

individual basis. Voting cards used at the meeting were

kept for evidence and verification.

After the meeting day, the Company published the

resolution of the meeting for each agenda before 9:00

a.m. of the following working day through SET portal.

The minute of the meeting was prepared in accurate

detail and was made available to public on the

company website within 14 days after the meeting.

2. Equitable Treatment of Shareholders The Company has the policy to treat each and every

shareholder fairly and equally regardless of the

percentage of shareholding, gender, age, race,

nationality, religion, beliefs, political opinions or physical

abilities. The Company’s shareholders’ meeting is open

for all shareholders. Each shareholder has their right

according to number of shareholding. One share per

one vote. There are no shares of any privileges over

other shareholders. Minority shareholders have equal

rights to express their opinions, propose meeting

agenda and nominate the Company’s directors. The

Company has clearly stated timeline, process, and

criteria on the company website under the investor

relations section. Shareholders can also request for

meetings or company visit.

The Company always follows requirements of SEC and

SET regarding the dealing of related transactions. The

business transactions with related parties must be fair

and at arm’s length and bases agreed upon the

Company and those related parties. Directors are

required to report to the Board of Directors of their

conflict of interest in the meeting agenda and shall

abstain from participating and voting as they cannot

express their opinion freely.

The Use of Insider Information

The Board of Directors has established the guideline

for the use of insider information to prevent directors

and executives from taking advantages of inside

information and from dishonest dealing for themselves

and their related parties. Insider trading or the use of

inside information for personal or others’ gain is strictly

prohibited. In addition, the Board of Directors has

established the guideline concerning the report of the

changes of ownership of the Company’s shares of

directors and executives, which can be summarized as follows:

1. The use of insider information for personal or

others’ gain is strictly prohibited.

2. The inside information both f inancial and

non-financial which has not been disclosed to

public and may affect the business or stock price

must be kept strictly confidential and must not

disclose to any parties not involving in such transactions.


AAPICO

Shareholders

The Company aims to achieve growth in earnings and

generate appropriate returns to shareholders in the long

run. The Board of Directors and executives shall ensure

to conduct the business as effectively and efficiently

and in a transparent and auditable manner. The

Company shall carry on its operations in consideration

to the best interests of shareholders and shall comply

with the good corporate governance principles. The

reporting and disclosure shall be made on consistent

basis, completely and truthfully reflect the status of the

company, its operating results, financial position, and

other reports. There shall be no disclosure of inside

information to individuals which caused damage to

shareholders as a whole.

Customers

The Company places the highest value on its customers.

The Company focuses on excellent production process

according to the SQCDEM principles and has firm

commitment to continuously develop and improve the

quality of its products and services to meet or exceed

customers’ expectations. It ensures the continuation of production and just in time delivery for the effectiveness

of the overall automotive supply chain management.

The continuing accreditation to the quality management

system and awards and achievements from customers over the years has been a guarantee for the Company’s

commitment toward excellence.

The Company strictly keeps the confidentiality of

information of each customer. It does not share the

customer information to its competitors or to the public.

In addition, the Company has a policy on the use of

intellectual property and copyrights, where it shall

operate in compliance with all regulations or contractual

requirements governing the use of such property. The

use of computer and information technology shall also

be conformed to the Computer Related Act and other

local intellectual property and copyright laws.

3. Directors and executives who have access to

inside information shall refrain from trading

the Company’s securities for a period of one

month prior to and within 24 hours after the

announcement of the Company’s results of

operations to the Stock Exchange of Thailand.

4. Directors and executives shall inform the company

secretary of their trading of the Company’s

securities at least one day prior to the transaction

date. The Company Secretary has duty to report

these changes to the Board of Directors at the

next board meeting.

5. Directors and executives are responsible to report

the changes of security holding under their names

and their related persons to the Office of the

Securities and Exchange Commission as follows:

a. Acquisition of the Company’s securities for

the first time must be reported within 30

days after the closing date of the offering

of securities to the public or the date of

appointment of the director or executive

(Form 59-1).

b. Changes in securities holding resulting from

disposition, transfer or being transferred

for securities must be repor ted within

3 working days after transaction date (Form

59-2 or Form 246-2).

The Company has disclosed this policy to its directors, executives, and employees of the Company and subsidiaries

to act in compliance with this policy. Any violation to

this policy resulting in derogation or damage to the

Company are subjected to penalty measures and possibly

legal actions taken by relevant regulatory authorities.

3. Roles of Stakeholders The Company recognizes the rights and different needs

and interests of each stakeholders and therefore has

carefully defined the policy to meet the needs of its

stakeholders, either by law or by agreement with the Company. The Company’s stakeholders can be classified

into the following groups:


relevant competition law, intellectual and business laws

and code of conducts, and shall not use dishonest

method to discredit a competitor.

Creditors

The Company shall operate in compliance with terms

and conditions agreed upon with creditors, both trading

partners and financial institutions. The Company shall

report its financial position as required by creditors and

shall notify in advance of any issues that may have

resulted in a breach of agreements or financial

covenants to resolve issues.

Employees

The Company places importance on the well-being of

its employees as they are considered a key foundation

for the Company’s long term success and sustainable

growth. The Company has been focusing on enhancing

employees’ knowledge and well-being according to

the Company’s vision and considers the employee

satisfaction as the utmost importance. The Company

ensures the employees’ compensation and welfare are reasonable and appropriate according to their capabilities

and able to maintain their motivation. It encourages

employees to continually improve their knowledge and

skills by attending various seminars or training courses

arranged internally or by other organizations.

The Company has put the health and safety of employees

at high priority. It ensures the safe and proper

workplace in order to reduce risks related to safety and

accidents for its employees. It has implemented the 5S

principle throughout the organization and has arranged

necessary safety trainings to all employees to create

awareness and maintain high standards of safety and

discipline in the workplace.

The Company promotes mutual respect among

employees and treats each and every employee fairly

and equally. The Company upholds human right in all

activities and will not act in violation of human right

Business Partners and Joint Venture

Integrity is a vital part of AAPICO’s business. The

Company considers the equality and honesty as

virtues among its core values for long term business

relationship. The Company treats its business partners

and joint venture with fairness and integrity, and

requires both parties to honor the shareholder’s

agreement and strictly comply with business ethics,

restrictions, applicable rules and laws of the country

they operate in. To its best knowledge, the Company

ensures that its business partners are reputable and

do not risk the Company being associated with

corrupted activities.

Suppliers

The selection of suppliers shall also be treated fairly

and openly that no parties are having the unfair

advantage of separate, prior, closed-door negotiations

for the contract. The purchase and hire of material and

service is considered for its quality, price, service, and

delivery in accordance with the product requirements

and shall never be based on the receipt of gift,

hospitality or favors of any kind from suppliers or

business partners. All employees must conform to the

Company’s policy regarding the gift policy and the

anti-corruption policy.

In order to conform to the Company’s quality system

standards, the Company performs yearly audit on all its

OEM suppliers as to ensure that its suppliers are

committed to the same level of quality-cost-delivery

standard and that the products outsourced to suppliers

meet the customer’s requirements.

Competitors

The Company shall operate with open, fairness, and

integrity by adhering to honesty and fair competition.

It shall operate under no circumstances cause or be

part of any breach of general or special competition

regulations, such as illegal cooperation in pricing, illegal

market sharing or any behavior that is in breach of


AAPICO

employees at all levels to focus with conscious mind to

fight against corruption. The Company has formulated

the anti-corruption policy, which is used as a tool to

govern business decisions and is applied equally to

corporate actions throughout organization and to the

behavior of individual employees in conducting the

Company’s businesses.

The anti-corruption policy sets out the standard

practices and responsibilities in preventing corruption in

business transactions and provides framework and

guidance to employees on how to recognize and deal

with bribery and corruption issues to ensure that

decision making that could lead to corruption are

performed with due care and conscientiousness. The

Company takes zero-tolerance approach to bribery and

corruption and has provided trainings to all employees

especially those operate in areas that are perceived

as high risk. It also communicates to all suppliers,

customers, contractors, agents, and business partners

of the Company’s anti-corruption policy.

The Company has joined the Thailand’s Private

Sector Collective Action against Corruption (CAC) since

2014 and reaffirms its commitment to fight against

corruption in all business operations. The Company

has continually streamlined its processes across

organization to assure the certification from CAC.

Whistle Blower Policy

The Company encourages employees and third

parties to raise concerns about any issues or suspicion

of malpractices at the earliest possible stage. The

Company provides a communication channel for

employees and all group of stakeholders to raise

concerns or report complaints and any misconduct

or illegal acts directly to the Company’s executives

or to the Chairman of Audit Committee by sending a

letter or electronic mail to [email protected]. The Audit

Committee, as assigned by the Board, reviews all

comments and complaints and delegate to the

laws or chi ld labor protect ion both local and

international. Over the years, the Company has received

a recognition for its intention and commitment on

employee well-being such as the Happy Workplace for

Sustainability, the White Factory award, etc.

Community

The Company continually supports and contributes

to community and society where it operates. The

corporate social responsibility has been put on the

management’s agenda. Every year the Company has

made contributions and donations to community

projects as well as providing supports to employees

who are involved in improving the quality of life of the

community that the Company is present. These

charitable contributions shall be legal and ethical under

local laws and practices.

The Company adheres and complies with social and

environment protection laws and related regulations

as required by the Labor and Social Welfare Ministry,

the Industrial Ministry, the announcement of the

Industrial Estate Authority of Thailand and other relevant

agencies. It strongly encourages its subsidiary and

associate companies to use resources efficiently and

ef fectively for energy conservation and aim for environmental protection in every parts of its operations.

In 2014, the Company has announced the “Green”

vision as one of the key mission of the Company,

whereby the Company encourages and continuously

implements ideas to use the minimum input of the

natural resources to achieve the maximum output.

Anti-Corruption and Misconducts

At AAPICO Hitech, the Company intended to do

business and operate with integrity, honesty, fairness

and transparency. It aims to be a responsible partner

and acts with integrity towards employees, customers,

business partners, shareholders, as well as the wider

community. The Company is firmly opposed to all

forms of corruptions. It supports and encourages every


in a timely manner so that stakeholders can base their

decision. The Company commits to make its best effort

to disclose information in all possible channels to allow

equal access to all stakeholders. Information is primarily

managed through SET portal and the Company’s website

and is provided in both Thai and English language.

The Board of Directors ensures that the Company’s

financial statements were prepared fairly and accurately

according to the general accepted accounting principle

and has been audited by external auditor, who were

authorized and approved by the shareholders’ meeting.

All reports, being the quarterly financial statements,

the annual statement (56-1) and annual report (56-2),

are provided in a complete and accurate manner and

made available on-time as required by the SEC and

SET. The report of changes in the holding of the

Company’s shares of directors and executives have

been disclosed and reported to the SEC in a timely

manner. The overview of the Company’s’ shareholding

by directors and executives in 2015 is provided in the

table below.

executive management to investigate further on the

reported issues. These issues and the follow up

progress are informed to the Board of Directors at the

quarterly meeting. In 2015, the Company has received

no reports of misconducts or disputes relating to fraud,

corruption, any breach of contract or violation against

applicable laws and regulations.

The Company aims to encourage openness and will

support anyone who raises the genuine concerns in

good faith. The Company commits to ensure that no

one will suffer from any unfair treatment as a result of

refusing to take part in bribery or corruption, or

because of reporting their suspicion that an actual or

potential bribery or other corruption offense has taken

place or may be taken place. It also has a policy to

protect confidentiality of whistleblower.

4. Disclosure and Transparency The Company ensures the disclosures of the Company’s

information is clear and transparent, which reflects true

status of the Company’s performance, and is reported

Name Position No. of shares at Increases / No. of shares at

the book closing (Decreases) the book closing

on March 30, 2015 during the year on March 23, 2016

Mr. Yeap Swee Chuan President and CEO/Executive Director 40,847,873 123,5061 40,971,379

Mrs. Teo Lee Ngo Executive Director 31,811,346 - 31,811,346

Mr. Pipat R. Punya Independent Director - - -

Mr. Kenneth Ng Independent Director - - -

Mr. Wichian Mektrakarn Independent Director - - -

Mr. John Parker Independent Director - - -

Mr. Yoshiki Kishimoto Non-Executive Director - - -

Mr. Hideo Hatada Non-Executive Director - - -

Mr. Veera Buanwongse Director - - -

Ms. Yeap Xin Rhu Director 25,646,760 - 25,646,760

Mr. Roengsuk Viphoonitisilkul General Manager - - -

Mr. Kawee Wasaruchareekul General Manager 18,729 - 18,729

Mr. Sattha Peth-in Assistant General Manager 85 - 85

Remark: 1 the change in securities holding of Mr. Yeap Swee Chuan was the transfer from NVDR to Foreign Holding account.


AAPICO

The Company has emphasized the role of Investor

Relations as a primary contact window for investors,

shareholders, analysts, and general public. The IR team

is responsible for the publication of the Company’s

news and updates of corporate information in an

accurate and timely manner according to the SET

requirements and regulations, and respond to any

questions or concerns from interested parties.

To enhance the accessibility of stakeholders, the

Company always participates in meetings or events

where possible and appropriate, both local and abroad,

to increase interaction with all groups of stakeholders.

In 2015, the Company has par t icipated in the

Opportunity Day by SET every quarter, the SET Thai

Corporate Day, Thailand Focus, as well as conference

and roadshows in Hong Kong, Japan and Malaysia. It

also arranged analysts’ meeting, a factory visit for

shareholders, as well as meetings with journalists and

individual investors.

5. Responsibilities of the Board of Directors The Board of Directors has its roles and responsibilities

in providing guidance and direction to the Company’s

management and assuring that the Company’s

businesses are operated for the best interest of

shareholders in the long run. The Board of Directors

is comprised of respected, knowledgeable and competent

individuals with various skills and experience in areas

that are beneficial to the Company.

Structure of the Board of Directors

The Company has set the Board of Directors an

appropriate number of members to the size of

business. Each director holds qualif ications as

defined by the Public Limited Company Act and

has no manners indicat ing a lack of f i t to be

entrusted with the administration of the company

by law or requirements of the Secur i t ies and

Exchange Commission.

For the year 2015, the Board of Directors consists

of eight (8) members, which are the Chairman and

executive director, an executive director, two non-

executive directors, and four independent directors (of

which one independent director has been in a position

for longer than nine years). In compliance with good

corporate governance principle, the Company has plan

to adjust its board composition upon the retirement of

the directors where appropriate.

Qualification of Director

The Board of Directors has defined the qualification of

the Company’s directors as follows:

1) Possess qualification according to the rules and

regulations by the Securities and Exchange Act,

the Stock Exchange of Thailand, the Public

Company Act B.E.2535 and have no prohibited

characteristics or manners indicating a lack of

trustworthiness to manage the Company from the

view of shareholders by law or by the Company’s

Articles of Association.

2) Not disqualified under Section 68 of the Public

Companies Act B.E. 2535.

3) Have knowledge, skills, or experience in the

automotive industry and/or capable to perform

directors’ duties with diversified background

which are beneficial to the Company’s business.

4) Able to devote time especially for making key

decision and handle duties for the best interest of

the Company and able to participate in all the

board meetings and shareholders’ meetings

unless necessary or emergency.

5) Do not perform any actions in a way that affect

the interest or benefit of the Company or in a way

that would be beneficial to particular individual of

entity for oneself or other persons’ benefits.

Qualification of Independent Director

Independent director is a director who does not have

any related business or work that may affect his or her


business transactions in the amount more than

Baht 20 million or more than 3% of net tangible

assets after deducting the liabilities and equity of

minority shareholders, whichever is lower.

7) Shall not be a director appointed as representative

of the Company’s directors or major shareholders.

8) Shall not operate or be part of business that

operates in the same industry or in a direct

competition with the Company’s operations.

9) Shall be capable to perform duties, give opinions,

and report results of work performance according

to the dut ies entrusted by the Board

independently from the control of management or

major shareholders of the Company

Terms of Service for Directors

Years of Service in each rotation

The Company’s Articles of Association indicates the

number of years served on the Board of Directors in

accordance with the Public Limited Company Act,

which specifies that one-third of total number of

directors must retire from the office at the Annual

General Meeting. If it is not possible to divide total

number of directors evenly by three, the number

closest to one-third is applied. In choosing directors to

retire, the directors who have served the longest years

are the most eligible to retire. Nevertheless, the retiring

directors are eligible for re-election.

Apart from the aforementioned retirement by rotation,

directors may be removed from the office by the

following reasons.

• Death

• Resignation (with effect from the date the Company

receives the resignation letter)

• Being disqualified or being under any of the

prohibition under the Public Company Act and

laws governing securities and stock exchange

• Removal by a resolution of shareholders’ meeting

• Removal by a court order

independent decision. The Board of Directors has

defined the qualification of independent director in

compliance with the minimum requirement of the

Offices of Securities and Exchange Commission and

the Stock Exchange of Thailand. The Company’s

independent director shall comply with, but not

limited to, the following requirements:

1) Shall not hold shares exceeding one percent

of total number of voting shares of the Company,

subsidiary, associate, major shareholders,

including shares held by related persons of such

independent director.

2) Shall not be or have been an executive director,

employee, staff member, advisor who receives

salary of the Company, subsidiary, associate,

major shareholders, or juristic person with conflict

of interest.

3) Shall not be a person related by blood or legal

registration as father, mother, spouse, sibling, or

child, including spouse of child, of the Company’s

executive or major shareholders.

4) Shall not be or have been an auditor of the Company, subsidiary, associate, major shareholders,

unless foregoing relationship has ended not less

than two years prior to the date of becoming an

independent director.

5) Shall not be or have been a provider of any

professional services including legal advisor or

financial advisor who receives service fees

exceeding Baht 2 million per year from the Company, subsidiary, associate, major shareholders,

unless the foregoing relationship has ended not

less than two years prior to the date of becoming

an independent director.

6) Shall neither have nor ever had a business relationship with the Company, subsidiary, associate,

major shareholders, unless the foregoing relationship

has ended not less than two years prior to the

date of becoming an independent director. The

term “business relationship” refers to any normal


AAPICO

qualification of company secretary to have but not limited

to knowledge in law and/or finance and accounting.

Roles and Responsibilities of the Board of Directors

The Board of Directors has its roles and responsibilities

separately from the Company’s management as to

ensure that businesses are conducted in a lawful and

ethical manner and that operations are run efficiently

and effectively. The roles and responsibilities of the

Board of Directors include but not limited to the following:

1) Review and approve key business matters such

as the Company’s vision and mission, business

strategy and financial targets, risks relating to

operations and annual operation plan and budget,

as well as monitoring that management has

followed the business plan ef fectively and efficiently.

2) Consider and review the Company’s corporate

governance policy and monitor the compliance to

the policy at least once a year.

3) Promote the Company’s code of conducts in

writing and make sure that directors, executives

and employees at all levels are aware and adhere

to the Company’s ethical standards and act in

compliance with the code of conducts.

4) Define a guideline for the consideration of

transactions with conflict of interests for the

benefits of the Company and shareholders, where

persons with vested interest cannot participate in

the voting or decision-making process of that

issue. Ensure that the Company complies with the

regulations and that disclosure of transactions

with conflict of interests are correct and complete.

5) Ensure that internal control system is in place and

effective and financial reporting and operations

are in compliance with rules and regulations, and

assign a responsible person or unit to

independently audit and report on the Company’s

internal control system to the Board of Directors

at least once a year.

Number of Consecutive Terms of Service

The Company’s directors have been approved by

shareholders’ meeting and are highly qual i f ied

individuals with knowledge and expertise beneficial

to the Company’s business. These directors are also

respected for their morality and ethics, as well as

consistent good performance of duties. If shareholders

continue to trust the directors and re-appoint them

to the Board, the Company shall respect the right of

shareholders. Therefore, the Company does not clearly

specified the term of service of each director.

However, the Board of Directors has plan to nominate

new directors to replace long-serving independent

directors and is committed on the renewable tenure

of independent director to no more than nine (9)

consecutive years.

Limitation of positions held by Directors in the

listed companies

The Board of Directors has set a policy to limit number

of holding positions in the board of listed companies,

other than its own subsidiaries, for not more than five

(5) companies, and shall not sit in the board of the

Company that operates in the same industry or in

direct competition with the Company’s operations. This

policy aims to ensure that directors can devote time to

perform their duties effectively. The holding of positions

of directors shall also be reported to the Board of

Directors for acknowledgement.

Company Secretary

The Board of Directors has assigned the duties and

responsibilities of company secretary to organize meetings

for the board and its committees, shareholders’ meeting,

as well as coordinates activities and trainings for

directors. Company secretary is also responsible for

preparing notice to the meetings, minute of meetings,

annual report, as well as filing of documents as

required by law and relevant regulations by the SEC

and SET. The Board of Directors has considered the


documents of each agenda will be sent to directors for

consideration at least 7 days prior to the meeting date.

The Chairman ensures that number of directors

attending the meeting satisfy the quorum as specified

in the Company’s Articles of Association to convene

the meeting. During the meeting, the Chairman allows

sufficient time to consider and discuss each agenda

carefully and thoroughly. Directors are encouraged and

able to express their opinion freely and independently

before casting their votes. Each director is counted as

one vote. At least two-third of total number of directors

shall be present for the voting of each agenda.

However, director with vested interest in particular

agenda shall be excused or abstained from voting for

that agenda.

Board of Directors’ Performance Evaluation

The Board of Directors conducts the assessment of

the board performance on annual basis. The self-

assessment criteria is based on the good corporate

governance guidance from the SET, which considers

the board structure and performance in 6 categories,

which are:

1. Structure and characteristics of the Board

2. Roles and responsibilities of the Board

3. Board meetings

4. The Board’s performance of duties

5. Relationship with management

6. Self-development of directors and executive

development

In 2015, the Board of Directors conducted three

sets of self-assessment for the Board of Directors,

as a whole and on individual basis, and for the

sub-committees. All eight (8) directors have completed

the self-assessment questionnaires.

The assessment results of the Board of Directors as

a whole has improved year on year in all areas,

with an average score of 4.11 (82%) in 2015, as

compared to 3.85 (77%) in 2014. Of total 6 categories,

6) Establish the risk management policy for the

organization and assign the management to

manage the Company’s risks and look for

business opportunities that may arise from these

risks and report to the Board of Directors on

regular basis.

7) Provide adequate communication channels for

shareholders and ensure that disclosure of

information is correct, concise, transparent and reliable.

8) Understand the roles and responsibilities of the

Board of Directors and the Company’s nature of

business and always express own opinion independently.

9) Perform duties with honesty and care, taking into

account the best interest of the Company and fair

treatment of shareholders.

10) Oversee and monitor business operations by

requiring financial report that is accurate and

complete and devote sufficient time and effort to

the Company.

Board of Directors’ Meetings

The regular Board of Directors’ meetings are scheduled

in advance for the entire year. Each director is informed

of the meeting schedule and is responsible to manage

time to attend meeting accordingly. The Board of

Directors holds at least four (4) meetings in a year to

consider and approve the Company’s f inancial

statements. Directors are also invited to participate in

the management review meeting at least twice a year

to approve the business plan and review performance

of the Company’s subsidiaries. Each director shall have

their meeting attendance of at least 75% of total

meetings in a year. In 2015, seven (7) directors have

their attendance of at least 75% of total meetings in

2015. The director who did not fulfill this requirement

was due to other obligations overseas.

Before each meeting, the Chairman set the agenda

of the meeting. The notice of meeting and relevant


AAPICO

perform their duties, which includes an introduction to

the Company and its businesses and roles and

responsibilities of the Board of Directors and its

committees.

The Company encourages directors to attend training

courses upon the SEC recommendat ions. The

independent director is required to attend the

fundamental courses organized by the Thai Institute of

Directors, namely the Director Accreditation Program

(DAP) or the Director Certification Program (DCP), as

details of the program provide essential information for

directors to per form their duties effectively. The

Company’s directors who have attended these courses

are as follows:

1. Mr. Yeap Swee Chuan

attended the Director Certification Program

(DCP108/2008)

2. Mr. Pipat R. Punya

attended the Director Accreditation Program

(DAP11/2004) and Role of Chairman Program

(RCP35/2014)

3. Mr. Kenneth Ng


(DCP189/2014)

4. Mr. Wichian Mektrakarn


(DCP107/2008)

There were no attendance of the fundamental training

in 2015, due to the timing and availability of training

courses did not match their requirements for English

course. However, directors and executives are

encouraged to attend the seminar organized by SEC,

SET and other organization, which relates to the

Company’s business in order to perform their duties

completely and effectively. The seminars and trainings

attended in 2015 include the Breakfast Talk (SEC), Tone

at the Top series 1/2015: Ethical Leadership - Creating

a sustainable culture (IOD), the CG report evaluation

(SET), etc.

the excel lent score (above 80%) was given in

4 categories, with the highest score in the relationship

with management. The lowest score was still the roles

and responsibilities of the Board, despite being the

most improvement of the year. The assessment results

of Audit Committee, Nomination and Remuneration

Committee, and Risk Management Committee were

also in good level with the score of 4.05 (81%), 3.89

(78%), and 3.74 (75%) respectively. The assessment

result of directors on individual basis was an average

of 4.17 (83%). The Board of Directors have discussed

recommendations and suggestions to continually

improve its performance in coming year.

Remuneration for Board of Directors and Executives

The remuneration of the Board of Directors and its

committees has been set according to the policy and

recommendation from the Nomination and Remuneration

Committee within the framework and limit as approved

by the shareholders’ meeting. The remuneration of

directors is considered based on the scope of

responsibilities and performance of the directors, the

comparison of directors’ remuneration of other listed

companies engaged in the same business regarding the performance, business size, directors’ accountability,

with reference to the report on directors’ remuneration

conducted by the Thai Institute of Directors (IOD).

Upon the board approval, the proposal is passed to the

Annual General Meeting of shareholders for approval.

The remuneration of executives is considered based

on their responsibilities and accountabilities, individual

performance as well as operational results of the

business. The payment is approved by the President

and Chief Executive Officer of the Company.

Board of Director’s Trainings and Development

The Board of Directors encourages the directors to

continuously develop and improve their skills and

knowledge in relation to their duties and responsibilities.

Directors are provided with relevant information to


9) The change of policy and operations that have

material impact on accounting, risk management,

and internal audit.

10) The appointment and determination of authority of

the sub-committees.

11) The proposal, appointment, and termination of the

Company’s directors and secretary status.

12) Any other actions in accordance with laws,

objectives, the Ar ticles of Association, and

resolutions of the shareholders’ meetings.

The Board of Directors may authorize directors or

sub-committee to perform any acts on their behalf,

except the following subjects, which can be done only

upon the approval from shareholders’ meeting.

1) The subject which the law requires of the

approval from shareholders’ meeting.

2) Transactions which the directors have interests

therein and that the law or regulations of the Stock Exchange of Thailand requires the resolution

of shareholders’ meeting. The director who has

vested interest in the issues or have conflict of

interest with the Company or affiliated company

shall be excused or abstained from voting right.

The following cases must be approved by the Board

of Directors and the shareholders’ meeting with a vote

of not less than 3/4 of total votes of the shareholders

attending and entitled to vote for:

1) Any sale or transfer of the entire or significant

part of the Company’s business.

2) Any purchase or taking over of other firms by

the Company.

3) Any making, amendment or termination of

contracts with respect to the granting of a lease

of the whole or significant part of the business of

the Company, the assignment of the management

of the business of the Company to any other

person or the amalgamation of the business with

other persons with the purpose of profit and loss sharing.

Power and Duties of the Board of Directors

The Board of Directors shall ensure that the Company

is operating in compliance with laws, the Articles of

Association and resolution of shareholders with honesty

and care, and acts in accordance with criteria and

regulations of the Stock Exchange of Thailand and the

Securities and Exchange Commission for the best

interests of the Company and shareholders.

In line with the good governance principles, the Board

of Directors shall have the authority and responsibility

in approval of the following matters.

1) The quarterly business performance and financial

statements of the Company in comparison to

the forecast and budget and the consideration of

future trends of the year.

2) Related party transactions among the Company,

subsidiary companies, associate companies, and

related companies or individuals that do not

violate the regulations of the Stock Exchange

of Thailand and the Securities and Exchange

Commission.

3) Any transactions that would highly affect the

Company’s capital structure, financial status,

business operation, strategy and the Company’s’ reputation.

4) Payment of interim dividends.

5) Employment of the President and senior executives.

6) Determination and change of the approval authority

of the Company.

7) Acquisitions and disposals of business and assets

and participation in joint venture projects that

do not violate any rules of the Stock Exchange

of Thailand and have value of transaction which

requires the board approval according to the

announcement of the Stock Exchange of Thailand

relating to the acquisition and disposal of assets

and connected transactions.

8) Contracts that are not related to an ordinary course

of business or contracts that are significant in

value and materiality to the Company’s business.


AAPICO

Power and Duties of the Audit Committee

The Audit Committee’s duties and responsibilities can

be described as follows:

1) Ensure that the Company maintains accurate and

sufficient financial statements in accordance with

the general accepted accounting standards and

relevant laws.

2) Ensure that the Company’s internal control and

internal audit is sufficient and efficient, and

operations have been carried out in compliance

with rules, policies and relevant guidelines.

Evaluate the independence of internal audit

function by reviewing performance report and the

organization structure of internal audit. Approve

the appointment and termination of internal

auditor as well as evaluate their performance.

3) Consider and propose the appointment of external

auditor and audit fee to the Board of Directors, by

taking into account the per formance and

independence of auditor. Arrange meeting with

auditor without the management presence at least

once a year in order to seek the objectivity of

auditor’s opinion.

4) Ensure that the Company’s operations are carried

out in accordance with laws and regulations of

the SEC and SET, as well as laws concerning the

business of the Company.

5) Define the Company’s corporate governance

policy to be in line with good governance

guidelines from the SET. Review the policy and

operations at least once a year.

6) Review disclosure of information, particularly

matters that may constitute related transaction or

transactions that have conflict of interest, to be

complete and accurate.

7) Review complaints and concerns from stakeholders

and report to the Board of Directors.

8) Perform any other matters as assigned by the

Board of Directors.

9) Report the Audit Committee’s performance to the

Board of Directors every quarter.

4) The amendment to the Memorandum of

Association and Article of Association.

5) The increase and decrease of capital , the

issuance of debentures, the amalgamation or

dissolution of the Company.

The Sub-Committees The Board of Directors has delegated some of its

duties and responsibilities to its committees to assist

the Board in reviewing and providing their independent

opinions on particular matters. These committees are

Audit Committee, Nomination and Remuneration

Committee and Risk Management Committee.

The sub-committees are comprised of directors

who are experts in particular areas. In 2015, due

to the ret i rement by rotat ion of Mr. Supasak

Chirasavinuprapand, the Board of Directors has

appointed Mr. Wichian Mektrakarn to be the member

of the Audit Committee and the member of Nomination

and Remuneration Committee with effective as from

May 14, 2015. On the same date, the Board of

Directors has appointed Mr. Mikihisa Takayama in

the position of director and the member of Risk

Management Committee, replacing Mr. Yoshiki

Kishimoto who resigned from his position.

Audit Committee The Audit Committee comprises of three (3) independent

directors, as follows:

1. Mr. Pipat R. Punya Chairman

2. Mr. Kenneth Ng Member

3. Mr. Wichian Mektrakarn Member

Where Mr. Kenneth Ng, with his background and

experience in finance and accounting, has the sufficient

knowledge to review the rel iabi l i ty of f inancial statements.


10) Consider and review duties and responsibilities

of the Audit Committee and evaluate the

performance of the committee on annual basis,

as well as prepare the report of Audit Committee

and disclose in the Company’s annual report.

Nomination and Remuneration Committee The Nomination and Remuneration Committee comprises

of three (3) independent directors, which are the same

group as the Audit Committee. The scope of duties

and responsibilities delegated by the Board of Directors

are as follows.

Power and Duties of the Nomination and Remuneration

Committee

1) Establish the policy, criteria and procedures for

the nomination of director and top executives of

the Company and determine criteria and type of

remunerations and other benefits for the Board of

Directors and its committees and propose for

approval to the Board of Directors and to the

shareholders’ meeting respectively.

2) Select and nominate qualified individuals to be

the Company’s directors and top executives.

3) Ensure that size and elements of the Board of

Directors is suitable to the Company’s business

and that adjustments are appropriate in response

to the changing environment.

4) Define the self-assessment criteria of the Board of

Directors and their annual remuneration by

considering the duties, responsibilities and risks involved.

5) Review succession plan for management in key

positions and re-confirm the list of qualified

candidates.

6) Perform any other matters as assigned by the

Board of Directors.

Risk Management Committee The Risk Management Committee, reporting to the

Audit Committee, comprises of three (3) directors, of

which the Chairman is an independent director and two

members are non-executive directors as follows.

1. Mr. John Parker Chairman

2. Mr. Hideo Hatada Member

3. Mr. Mikihisa Takayama Member

Power and Duties of the Risk Management Committee

a. Establish the Company’s risk management policy

and determine the risk appetite. Consider the risk

management plan for the organization as a whole

and ensure that control measures are adequate

and appropriate.

b. Consider and recommend to the Board of Directors

regarding the strategy, direction and resources

used in the Company’s risk management process,

as well as the risk tolerance level for approval.

c. Conduct risk assessment and review corporate

risks at least once a year and ensure that the organization has implemented the risk management

actions according to plan.

d. Review and recommend to the Board of Directors

on overal l r isk management and standard practices in order to improve the risk management

processes of the organization.

The Nomination of the Board of Directors and Top Executives The Appointment of Directors

According to the Company’s Articles of Association,

the Board of Directors shall comprise of at least five

(5) directors and not less than half of whom shall

have residence in Thailand. The Nomination and

Remuneration Committee is responsible for selecting

qualified candidates to be the Company’s directors,


AAPICO

replacing the directors who are retiring on rotation at

the end of their terms, or whatever the case may be,

and proposing a list of candidates to the Board of

Directors for approval and subsequently for resolution

at the shareholder’s meeting. The Nomination and

Remuneration Committee selects candidates based on

their knowledge, experience, expertise, a proven record

of ethics and integrity, and the ability to share their

opinion independently and devote sufficient time to the

Company. The Company also gives the right to

shareholders to nominate qualified individuals to be the

Company’s director.

The number of nominated directors generally is equal

to the number of retiring directors or resigned directors,

whatever the case may be. The appointment of the

Company’s directors must receive more than half of the

voting rights of shareholders who attend the meeting in

person or by proxy. The directors shall be elected at

the shareholders’ meeting in accordance with the

following rules and procedures:

1. Each shareholder shall have a voting right equal

to one share per one vote.

2. Each shareholder may exercise all the votes

he/she has under 1) to elect one or several

persons as director or directors but cannot split

share voting.

3. The candidates shall be ranked in descending

order, from the highest to the lowest number of

votes, and shall be appointed in that order until

all the director positions are filled. Where there

is an equality of votes cast for candidates causing

the number of directors to be exceeded, the

Chairman of the meeting shall have a casting

vote.

In case that director leaves their position for the

reasons other than retirement by rotation, the Board of

Directors may appoint qualified individuals to replace

the resigned director at the next Board of Directors’

meeting, given that remaining terms of service must be

longer than 2 months. The appointment of replacing

directors must receive more than 3/4 of the votes of

the remaining directors, and the replacing directors are

eligible to stay in the board up to the remaining terms

of service of the resigned directors.

The Appointment of Executives

The appointment of executive is considered by the

Company’s management, who takes the lead in

nominating and selecting with the qualified candidates

with knowledge, skills, and experiences that are

suitable to the Company’s operations, and having good

understanding of the nature and business cycle of the

industry to be able to drive the business growth and

achieve the Company’s objective.

The Governance of Subsidiary and Associate Company

The Company controls and manages the operations of

its subsidiary and associate companies through its

representative in the management team, whereby the

number of directors appointed by the Company as

representative may vary according to the Company’s

shareholding or the agreement between the Company

and other shareholders.

The management of the company has duties and

responsibilities to carry out operations according to the

policy and drive overall performance to achieve the

target, such as sales growth, cost reduction, and

investments to be in line with the business plan. They

are also responsible to manage human resources and

resolve problems or conflicts that may impact the

operations, and ensure ef fective communication

throughout the organization.

For subsidiaries that the Company exercises its

control, the scope of authority of executive directors

is defined within the scope of the SEC notification.

The management of subsidiary companies shall ensure


that transactions between related parties are handled

correctly and completely, and that the same disclosure

policy as the parent company is applied. The financial

reporting of subsidiary must also be auditable and

provided on time for the Company for consolidation purpose.

Auditor and Auditors’ remuneration

For the year 2015, the Board of Directors, with the

shareholders’ approval, has appointed EY Office

Limited to be the auditor to audit the Company’s

financial statements for the fiscal year ended as of

December 31, 2015, given their past performance

records and level of professional and independency.

Audit fee

The Company paid the audit fee in 2015 for the audit

of the financial statements of the Company and its

major subsidiaries at the total amount of Baht

8,640,000, of which the audit fee for the Company only

is amounted to Baht 1,800,000.

However, the subsidiaries of the Company are not all

using the auditing service from EY Office Limited as

some of the businesses are not complicated and the

contribution to the group is not significant. Therefore

the Company decides to use local auditing firm where

costs are more appropriate.

Non-Audit fee

In addition to audit fee, the Company and some of its

subsidiary companies have engaged non-audit service

from EY Office Limited, which is the compliance audit

to the conditions stipulated in the investment promotion

certificate (BOI audit). The total amount for this non-

audit service in 2015 was a total of Baht 500,000, of

which include the non-audit fee for the Company only

of Baht 100,000.


AAPICO

In accordance with the good corporate governance

principle, the Board of Directors continuously put

emphasis on the effective and adequate internal

control and the risk management of the Company

and thereby assigned the Audit Committee to

assess the adequacy of the Company’s internal control

system. The Company has contracted internal auditor

to review the Company’s operations and work

processes of key risk areas according to the annual

audit plan. The internal auditor is an independent

party reporting directly to the Audit Committee at

the review meetings on quarterly basis.

The Audit Committee reviews the report from internal

auditor on their findings and recommendations, which

summarize the compliance of key activities in line

with the established system and applicable laws and

regulations, and the follow up of corrective actions.

The Audit Committee also considers the evaluation of

the sufficiency of the Company’s internal control based

on the assessment of internal auditor, which can be

summarized in 5 areas as follows:

Control Environment The Board of Directors and the Company’s management

has set policies and guidelines based on the good

corporate governance principle for employees to

conduct business in an efficient and ethical way with

transparency. Employees are well informed of the

Company’s policies and code of conducts at the

orientation and shall be complied with applicable laws

and regulations. Any malpractices or unlawful acts

would be penalized according to the severity of the

issue.

The Company has defined its management structure,

allowing the Board of Directors to oversight the

management performance independently for the highest

benefits of shareholders. It also has clearly segregated

the duties, responsibilities, accountabilities of the

Board of Directors, its committees, the management

and employees in the organization structure, and has

engaged independent external parties to monitor

and review the compliance to the working procedures

and ensure the effectiveness of operations.

The Company believes that a good control environment

involve a good control of working processes and skills

and discipline of employees. The Company has

developed its manufacturing processes toward the

quality standards and has adopted the quality

management system (ISO/TS16949) and environmental

management (ISO14001) as the control framework. The

Company has set up training center to manage and

provide sufficient trainings to employees in order to

develop their skills and adapt to changing environment.

Incentives are appropriately set up and reviewed based

on the agreed performance target.

Risk Assessment The Company places importance on risk management

process as a key foundation for good corporate

governance. The Risk Management Committee,

assigned by the Board of Directors, has played a key

role in driving the overall risk management process.

The committee meets on quarterly basis to identify

and review issues or events that may impact the

Company’s business and its operations and define

appropriate measures to manage these impact to an

acceptable level.

Corresponding to the changing business environment

and economic factors, the Risk Management

Committee reviews the Company’s risk, both internal

and external factors, on annual basis. The committee

also reviews the adequacy of the risk management

policy and other relevant policies for effective internal

control system of the Company.

Internal Control and Risk Management


Control Activities The Company has formulated work instructions as a

guideline for employees to operate in a correct,

effective and efficient manner and without errors. These

work instructions are provided for every key processes,

covering activities in the manufacturing, sales and

marketing, purchasing, financing and reporting, as well

as general management, where appropriate controls are

embedded in the procedure in order to prevent the

misconducts or corruption issues. Responsible units

have been assigned to undertake the inspection and

monitor the operations in compliance with work

instructions and relevant regulations.

The Company has set up the scope and the approval

authority of the management in each level. Duties and

responsibilities are clearly defined between staffs,

supervisors, managers, and executives. Employees’

access to the Company’s operating system are

carefully created, controlled and reviewed on regular

basis, especially those involving in the authorization,

recording and custody of assets.

The Company has emphasized the strong control in the

misuse of the assets for the benefits of directors and

executives. Transactions which may cause conflict of

interests are carefully considered and approved at

arm’s length basis. Major contracts and agreements,

par ticularly those involving major shareholders,

directors, and executives have been duly authorized

and approved with the consideration of independent

directors who have no vested interests in that subject.

Investments and joint venture are monitored the

performance through the monthly financial review

meetings, where head of operations report and present

their performance to the Company’s management.

Information and Communication The Company has systematic and ef fect ive

communications within the organization. Employees are

well informed of the Company’s events and trainings

via bulletin board, intranet, emails and group meetings.

For the Board of Directors, the company secretary

arranges the board meeting and ensures that important

information requiring the directors’ attention are sent

to directors at least 7 days in advance of the meeting

in order for directors to have sufficient information

for their decisions. The company secretary also

arranges the minute of meeting to be recorded and

documented in a complete and accurate manner for

future reference.

The disclosure of information to public has been

arranged through various channels, whereby the

Company’s website at www.aapico.com, SET portal

system, and SET Opportunity Day are the primary

communication channel for general information and the

Company’s news and announcements to investor

community . The Company has inst i tuted and

emphasized the role of investor relations as the primary

contact window for investors, analysts and shareholders

in case of questions that need further clarification. The

Company always welcome for visits or meetings with

shareholders or investors.

The Board of Directors has established a reporting

channel for employees or third parties to raise genuine

concerns or repor t misconducts, corruptions, or

violation of laws directly to the Audit Committee. The

Company encourages and supports the anti-corruption

actions and commits to ensure that no one would

suffer from detrimental treatments as a result of

reporting their suspicion of wrongdoings.


AAPICO

Monitoring Activities The Company schedules several meetings throughout

the year to monitor and follow up on its operations

as to ensure that each operating unit is performing

well, both financially and non-financially, according to

plan. The performance of each subsidiary are reviewed

and reported to management at the monthly review

meeting, and the consolidated results of the Company

are presented to the Audit Committee and the Board

of Directors for review on quarterly basis before

disclosing to public.

On quar terly basis, the Board of Directors also

schedules a review of internal control system in key

areas, namely production, purchasing, sales and

marketing, and human resources. At this meeting,

internal auditor reports directly to Audit Committee

their findings on the assessment of compliance to

working procedures, as well as recommendations and

the follow up on corrective actions. In case of matters

requiring immediate attentions, internal auditor can

inform the management to discuss and resolve the

problems at any time.

For the review of production processes, the quality

assessment function is assigned to inspect and monitor

the compliance to the policies and regulations and

work instructions. In addition, the Company employs

external party (e.g. TUV) to audit and certify that its

productions are conformed to the quality management

standards (ISO/TS16949) and environment standards

(ISO14001). Customers also request a regular audit as

to ensure that production processes are carried out

according to agreed procedures and that there are no

changes in the processes without prior notification.


The Company had business transactions with related parties, who are mainly subsidiary and associate companies, joint venture, and directors of the AAPICO Group. These related transactions arose in the ordinary

Related Transactions

course of business and were concluded on the commercial terms and bases agreed upon between the Company and related parties, which can be described as follows:

Type of Transactions Description

Sales and Purchases of Sales of automobile parts and stamping dies among the Company, subsidiary and goods and services associate companies. Sales and Purchases of Sales and transfers of machines and equipment among the Company and subsidiary machinery and equipment companies. Rental income Rental charge for the use of premises among the Company, subsidiary and associate companies. Management Fee Shared management costs among the Company, subsidiary and associate companies. Interest income Interest charge for the loans to and from subsidiary companies for the purpose of providing working capital and cash flow support. Dividend income Dividend received from its subsidiary or associate companies.

The significant transactions with related parties in the year 2015 can be summarized in the table below: (Unit : Million Baht)

Consolidated Separate financial statements financial statements Transfer Pricing Policy 2015 2014 2015 2014 Transactions with subsidiaries (eliminated from the consolidated financial statements) Sales of goods and services Cost plus margin - - 197 462 Sales of machinery and equipment Cost plus margin - - 1 16 Interest income 0.01%-5.10% p.a. - - 139 140 Dividend income As declared - - 258 345 Rental income Close to rental rates for other building in vicinity - - 4 4 Management fee income Approximate cost - - 65 61 Other income Approximate cost - - 10 10 Purchases of goods and services Cost plus margin - - 329 320 Purchases of machinery and equipment Cost plus margin - - 13 5 Interest expense 1.00%-5.10% p.a. - - 9 4 Other expense Approximate cost - - 15 16 Transactions with associate and joint venture Sales of goods and services Cost plus margin 209 159 1 1 Dividend income As declared - - 136 137 Rental income Close to rental rates for other building in vicinity 7 5 - 3 Management fee income Approximate cost 4 4 4 4 Other income Approximate cost 14 9 7 1 Purchases of goods and services Cost plus margin 261 217 167 178 Other expenses Approximate cost 11 1 8 1 Transactions with related parties Purchase of machinery and equipment Cost plus margin - 29 - -


AAPICO

Loans to and from related parties The Company has a policy of centralized financial

management in order to effectively control and manage

the Company’s cost of capital, and hence maximizing

returns for the benefits of the Company and its

shareholders. Under this policy, financial transactions

and funding for investments and working capitals are

managed centrally by corporate office. The financial

services and credit facilities are made by the Company

and the Company then lends out to subsidiary companies.

As at December 31, 2015 and 2014, the balances of

accounts and the balances of loans between the

Company and those related parties are summarized as

follows:

(Unit : Thousand Baht)

Consolidated Separate financial statements financial statements Transfer Pricing Policy 2015 2014 2015 2014

Trade and other receivables Subsidiaries - - 345,141 249,822 Associates 60,103 64,174 9,754 12,431 Joint venture 696 1,277 32 3 Related companies 2,846 2,297 339 339 Total 63,645 67,748 355,266 262,595

Trade and other payables Subsidiaries - - 41,201 73,144 Associates 42,573 50,017 27,733 27,875 Related companies 12,428 181,698 - - Total 55,001 231,715 68,934 101,019

Short term loans to: New Era Sales Co., Ltd. Subsidiary - - 12,000 14,000 Able Motors Co., Ltd. Subsidiary - - 18,000 29,000 Katsuya (Thailand) Co., Ltd. Subsidiary - - 600 803 Aapico Hitech Parts Co., Ltd. Subsidiary - - 60,000 139,000 Aapico Hitech Tooling Co., Ltd. Subsidiary - - 36,000 29,000 Aapico Forging PLC Subsidiary - - 288,000 192,500 Aapico Amata Co., Ltd. Subsidiary - - 18,000 114,670 Kunshan Chaitai-Xincheng Precision Forging Co., Ltd. Subsidiary - - 71,847 - Dee Mak SDN. BHD. Common director - 702 - - Total - 702 504,447 518,973

Long term loans to: New Era Sales Co., Ltd. Subsidiary - - 250,000 260,000 Able Motors Co., Ltd. Subsidiary - - 87,000 35,000 Katsuya (Thailand) Co., Ltd. Subsidiary - - 3,200 3,000 Aapico Hitech Parts Co., Ltd. Subsidiary - - 215,000 120,000 Aapico Hitech Tooling Co., Ltd. Subsidiary - - 38,700 70,000


(Unit : Thousand Baht)

Consolidated Separate financial statements financial statements Transfer Pricing Policy 2015 2014 2015 2014

Aapico Forging PLC Subsidiary - - 1,921,100 1,920,000 Aapico Amata Co., Ltd. Subsidiary - - 42,970 - Kunshan Chaitai-Xincheng Precision Forging Co., Ltd. Subsidiary - - - 65,626 Aapico Investment Pte. Ltd. Subsidiary - - 86,267 84,271 Foton Passenger Vehicles Distribution (Thailand) Co., Ltd. Subsidiary - - - 1,000 Total - - 2,644,237 2,558,897

Short term loans from: Aapico Engineering Co., Ltd. Subsidiary - - 9,200 9,200 Aapico Structural Products Co., Ltd. Subsidiary - - 252,300 218,000 Dee Mak SDN. BHD. Common director 1,686 1,211 - - Directors of the Group 12,932 15,902 - - Total 14,618 17,113 261,500 227,200

Necessity and Justification for Related Transactions The Audit Committee considered the Company’s

related transactions in 2015 and found that these

transactions be reasonable, and transactions that the

Company invested had a good tendency, would be

profitable to the Company as a whole, and were

conducted fairly and at the arm’s length basis.

Policies or Trends relating to Future Related Transactions The Company tends to continue these related

transactions incurred for the ordinary course of

business and in line with the centralized financial

management policy. These transactions include but

not limited to sales and purchases of goods and

services, loans to and from related parties and interest

payment, rental of premises, management services and

dividend income. Transfer pricing policy applied for

related transactions shall be concluded on commercial

terms, which are comparable to market price or at

arm’s length basis, and bases agreed upon between

the Company and related parties.

The Audit Committee, assigned by the Board of

Directors, ensures that the Company will conduct

related transact ions with transparency and in

compliance to the Company’s good governance, and

strictly following applicable rules and regulations by

the Stock Exchange of Thailand and the Securities

and Exchange Commission. These related transactions

shall be prepared in accordance with the generally

accepted accounting principles.

In the case that related transactions may involve

with potential conflict of interests, the Audit Committee

shall consider and provide its opinion on the necessity

and justification of such transactions. In the situation

where the Audit Committee does not possess sufficient

knowledge or expertise on the subjects, the Audit

Committee may seek advice from experts or assign an

independent party to express opinion on tht transaction

to support their decision.


AAPICO

Overview of Business in 2015 AAPICO Hitech Public Company Limited is principally

engaged in the manufacture and distribution of

automobile parts, including pressed parts, forged parts,

machined parts and plastic parts, as well as the design

of stamping dies and assembly jigs for the automobile

production. The Company also operates car dealerships

and supplies car navigation system and technology

under the brand “POWERMAP”.

The Company has main factories and facilities in three

countries, namely Thailand, Malaysia and China.

The Company’s total revenues come mainly from the

automobile parts business and the car dealerships

business. The revenue from car navigation system and

technology was nominal and hence was included as

part of the revenue from the automobile parts segment.

In 2015, the revenue composition of the automobile

parts and car dealership segment was at the ratio of

65:35, as compared to the ratio of 63:37 in the year

2014.

Management Discussion and Analysis

The Automotive Industry in Thailand Total vehicle production volume in Thailand in 2015

grew marginally by 1.8% compared to 2014, from 1.880

million units in 2014 to 1.913 million units in 2015. Of

this volume, the production for export was at 1.201

million units (63%) and domestic sales at 0.712 million

units (37%). The production of passenger cars and

commercial cars both increased year on year by 2.43%

and 0.09% respectively.

Domestic demands in 2015 continued to be weak,

posting a 9.3% decline year on year, driven mainly by

the slowdown of economy and dampen consumer

sentiments due to low agriculture produce prices, high

household debts and negative effect of the 1st car

campaign, with many purchases had been brought

forward and hence depriving the domestic market

needs and spending power. Offsetting this decline was

a solid export volume growth at 6.8% year on year.

Total Revenues

Overview of Thailand Automotive

Export Domestic Production

Auto Parts Car Dealers

2015 35%

2014 37%

2014 63%

2015 65%

3.0

2.5

2.0

1.5

1.0

0.5

0.0 2554 2555 2556 2557 2558

(unit : million)


Sales and service income in 2015 posted a nominal

decline by Baht 38 million or by 0.3%. Solid growth

was seen in Thailand at a 4.2% increase year on year,

driven by the increases of vehicle production volume,

which grew 1.8% year on year, and some tooling

income in 2015. This growth however was offset by a

sale decline in China due to the slowdown of economy

and lower revenue from Malaysia which was impacted

by the weaker currency translation rate as compared to

2014.

Sales and Service Income by segment

Sales from the automobile parts segment grew year

on year by 2.8%, driven by higher sales in the OEM

segment in Thailand and tooling income from the

plastic division. This growth, however, was largely offset

by lower sales of forged and machined parts in China,

due to the slowdown of economy, and lower sales from

assembly jigs and stamping die business.

Contrary to the growth in the automotive parts segment,

sales of the car dealerhips segment posted a decline

of 5.7% year on year. This decline was mainly due to

the impact of weaker currency exchange rate, where

Malaysian Ringgit has depreciated against Thai Baht

by about 11% compared to last year. After the

adjustment of this currency impact, sales grew

marginally by 0.8%. A healthy growth from Honda car

sales in Malaysia was largely offset by weak domestic

demands in Thailand.

Profit and Loss Analysis For the year 2015, the Company reported a total revenue

of Baht 14,993 million and net profit attributable to

equity holders of Baht 313 million, as compared to

Baht 15,196 million and Baht 367 million respectively

for the year 2014. The decrease of profit, and hence

earnings per share, compared to last year was mainly

due to lower income and foreign currency exchange

fluctuation, despite improved gross profit margin, higher

share of profit from associates and lower financing costs.

Revenues

Total revenue of the Company in 2015 decreased Baht

203 million or by 1.3% compared to 2014, primarily

due to lower income from scrap sales as a result of a

slump steel price and partly due to lower sales. Other

income in 2014 also included a tooling income of Baht

97 million and a Baht 10 million exchange rate gain

related to the derivative agreements in 2014, as

compared to an exchange loss in 2015.

Unit : Million Baht Y2014 Y2015 Change %

Sales and service income 14,572 14,534 (38) -0.3% Other income 614 459 (155) -25.2% Exchange gains 10 - (10) -100%

Total Revenues 15,196 14,993 (203) -1.3%


Sales and Service Income (unit : in million baht)

2015 2014

9.07 9.33

5.50 5.20


Thailand 10,130 10,559 429 4.2% Malaysia 3,741 3,393 (348) -9.3% China 701 582 (119) -17.0%

Sales and service income 14,572 14,534 (38) -0.3%


AAPICO

Gross Profit

Despite the sales decline, gross profit increased by

17.4% year on year. Gross profit margin improved

from 4.2% of sales in 2014 to 4.9% of sales in 2015,

driven by profit from tooling income and efficiency

improvement.

The margin improvement was seen from the automotive

parts segment, driven by tooling income profit and

improved inventory control in plastic parts business.

Improvement was also seen in jigs and dies products,

pressed parts and forged and machined parts in

Thailand, while forged parts in China reported lower

gross profit, mainly as a result of lower sales.

The gross profit margin for the car dealerships segment

was lower than last year, as the margin in Thailand was

pressured by lower sales. This was partly compensated

by better margin in Malaysian car dealers, driven by

higher car sales.

Selling and Administrative Expenses

Selling and administrative expenses increased by 5.6%

year on year, mainly attributable to increased level of

fixed costs in the automotive parts segment and a

Baht 22 million exchange rate loss related to the

derivative agreements in 2015, as compared to a gain

recorded as other income in 2014. The cost level of the

car dealerships segment remained relatively stable

compared to last year.

Earnings

Earnings before interest and taxes (EBIT) decreased

year on year, from Baht 488 million in 2014 to Baht

387 million in 2015. In percentage of revenue, EBIT

margin also decreased from 3.2% in 2014 to 2.6% in

2015. This reduction of earnings was mainly due to lower

sales, lower scrap income, and an exchange rate loss.

After adjustment for depreciation expense and

include associate income, EBITDA in 2015 was Baht

1,280 million, compared to Baht 1,343 million in 2014.

EBITDA margin in 2015 was at 8.5% of revenue,

compared to 8.8% of revenue in 2014.

Share of profit from investments in associates and

joint venture

Major contributors of profit in 2015 were Hyundai and

Able Sanoh. Compared to 2014 performance, Able

Sanoh’s profit notably increased, driven by higher sales,

which were partly due to some new projects in 2015,

followed by better results from Quantum Inventions.

These increases were partly offset by lower profit from

Hyundai, which was effected by weak domestic

demand and a loss from Thai Takagi Seiko.


Earnings before interest and tax (unit : in million baht)

2015 2014

376 283

112 104


Hyundai 107 89 (18) -17% Able Sanoh 20 74 54 270% Thai Takagi Seiko 3 (20) (23) -767% Quantum Inventions (1) 8 9 900% Other (5) (3) 2 40% Associate income 129 148 19 14.7%


Sales and service income 14,572 14,534 (38) -0.3% Cost of sales & service 13,964 13,820 (144) -1.0% Gross Profit 608 714 106 17.4% Gross Profit Margin 4.2% 4.9% 0.7%


Financial Standing Analysis As of December 31, 2015, the Company has total

assets of Baht 11,507 million, comprising of total

liabilities of Baht 5,524 million and shareholders’ equity

of Baht 5,983 million.

Assets

Total assets decreased by Baht 575 million, mainly

from decreases of property, plant and equipments,

primarily as a result of depreciation, and lower

inventory level compared to last year.

In 2015, the Company has continued monitoring the

control of inventories and receivables. The average

collection period hence further improved by 4 days,

from 51.7 days in 2014 to 47.4 days in 2015, and

the average inventory holding period was shorten by

1 day, from 31.3 days to 30.2 days.

Liabilities and Shareholders’ Equity

Total liabilities decreased by Baht 877 million, mainly

attributable to a Baht 515 million decrease of debt

level and decreases of trade and other payable.

The average payable period was slightly faster than last

year by 1 day, from 57.3 days in 2014 to 56.0 days in 2015.

The loan outstanding with banks has continuously

decreased during the year to Baht 2,483 million at the

Finance Costs and Income Tax Expenses

The Company has continuously reduced its finance

costs over the years and recorded a reduction of Baht

38 million in 2015. This was mainly due to the

reduction of interest bearing debts level as well as low

interest rate on new fundings, both from banks and

from the issuance of debenture in 2015.

Income tax expenses, largely related to the Malaysian

car dealerships operations, increased by Baht 4 million

compared to 2014.

Net Profit

Net profit of the Company decreased year on year

by Baht 48 million, almost all of which attributable to

lower profit in the automotive parts segment, as a

result of lower scrap income and foreign currency

exchange fluctuation, despite improved gross profit

margin, lower interest costs, and higher share of profit

from associates.

Excluding the minority interest portion, net profit

attributable to equity holders in 2015 were Baht 313

million or at 2.1% of revenue. On a per share basis,

earnings were at Baht 0.97 per share in 2015.


Receivable 1,900 1,912 12 0.6% Inventories 1,209 1,109 (100) -8.3% Current Assets 3,822 3,683 (139) -3.6% Investment in associates 1,384 1,445 61 4.4% Goodwill 235 235 - 0.0% PPE 6,318 5,847 (471) -7.5%

Non-Current Assets 8,260 7,824 (436) -5.3% Total Assets 12,082 11,507 (575) -4.8%


Net Profit 386 338 (48) -12.4% Net Profit Margin % 2.5% 2.3% -0.3% Minority Interest 19 25 6 31.6% Net Profit to Equity Holders 367 313 (54) -14.7% Net Profit Margin % 2.4% 2.1% -0.3% EPS 1.14 0.97 (0.17) -14.7%


Finance costs 208 170 (38) -18% Income tax expenses 23 27 4 17%

Finance and Tax 231 197 (34) -14.7%


AAPICO

end of 2015. This was due to prepayment of long term

loans, in addition to the regular repayment schedule,

as a measure to reduce financing costs. Offsetting

the decrease of bank loans, was the issuance of the

3 year debenture at a nominal value of Baht 800 million

in April 2015, according to the Company’s finance

strategy to diversify its source of funds portfolio. This

debenture will be due in full amount in 2018.

Total shareholders’ equity increased by Baht 302

million, maily attributable to retained profit for the

year. In 2015, the Company has paid out dividend at

the amount of Baht 64 million.

Key Financial Performance

The Company’s return on assets (ROA) and return on

equity (ROE) have declined year on year, mainly due to

lower profit of the Company, which has decreased

from Baht 386 million to Baht 338 million.

Despite the weaker profitability performance, the

Company has continuously improved its liquidity

management with the reduction of obligations with

banks. The interest bearing debt to equity ratio has

improved to 0.55 times in 2015, achieving the Company’s

target of long term funding structure at around 0.5-0.6

times. The current ratio has improved from 0.87 times

in 2014 to 0.99 times in 2015, with the reduction of

current obligations to match its liquid funds.

The Company also improved its ability to service debt

obligation. Despite the weaker profitabilty performance,

the improvement was entirely attributable to the

reduction of debt obligations at the beginning of the

year and hence reducing interest expenses. As a result,

the interest coverage ratio has improved from 2.97

times in 2014 to 3.15 times in 2015.

The debt service coverage ratio (DSCR) has also

improved from 0.98 times in 2014 to 1.17 times in

2015. The DSCR in 2015 was still below the banks’

requirement, which requires the Company to maintain

this ratio at above 1.2 times, and the Company has

received the bank waiver for the breach of financial

covenants for the year 2015.

Cash Flow Analysis The Company’s cash and cash equivalent amount

increased by Baht 24 million, from Baht 314 million

in 2014 to Baht 338 million in 2015.

During the year, cash flow from operations decreased

Profitability Ratio Y2014 Y2015 Change

Return on Assets (%) 3.1% 2.9% -0.3%

Return on Equity (%) 6.9% 5.8% -1.1%


Trade and Other Payables 2,318 1,978 (340) -14.7% Short-Term borrowings 737 655 (82) -11.1% Current portion of LT loans 1,168 923 (245) -21.0% Long-term Loans 1,891 905 (986) -52.1% Debenture - 798 798 Interest-bearing Debts 3,796 3,281 (515) -13.6%

Total Liabilities 6,401 5,524 (877) -13.7%

Total Shareholders’ Equity 5,681 5,983 302 5.3%

Liquidity Ratio Y2014 Y2015 Change

Debt : Equity Ratio (time) 0.67% 0.55% (0.12)%

Current Ratio (time) 0.87% 0.99% 0.13%

Debt Service Ratio Y2014 Y2015 Change

Interest Coverage 2.97% 3.15% 0.18% Debt Service Coverage 0.98% 1.17% 0.20%


Cash from Operating 1,637 927 (710) -43.4% Cash from Investing (376) (144) 232 -61.7% Cash from Financing (1,162) (745) 417 -35.9% Translation adjustments (23) (13) 10 -43.5% Net cash increase 76 25 (51) -67.1% Cash Balance 314 338 24 7.6%


manufacturing hub in ASEAN will be strengthen.

Thailand’s domestic car market is however less

encouraging. The negative effects of the 1st car

campaign is expected to still linger on in 2016, as well

as the high household debt and weak agriculture

produce price. The latter may also be further impacted

by the draught issue. In addition, a new regime tax

based on CO2 emission instead of engine size effective

from January 2016 is also expected to affect market

demand, as an anticipated higher car price may further

decrease an overall sales numbers in 2016.

For the Malaysian market, it is anticipated that the

volatility of Ringgit and the implementation of Goods

and Service Tax in 2015 will have an impact over the

overall economy in 2016. The announced car price

increases by most major brands for January 2016 may

result in a dip in TIV in 2016.

The Company closely monitors the development of

economy and the automotive industry and preparing

for challenges ahead. The Company will continue its

focus on controling cost activities and cost reduction

measures, as well as efficiency improvement in order

to achieve a lean and cost effective manufacturing

process. The Company is also seeking new

opportunities and exploring new markets for profitable

growth, either throught is own investments or with joint

venture partners. The Company is also gearing towards

sustainability growth with emphasis on quality, cost,

delivery, management and engineering innovation to

achieve customers’ targets, and as well as continuous

improvements in all companies.

by Baht 710 million, mainly due to lower earnings, as

compared to 2014 and partial receipt of cash from

insurance income in 2014. The lower cash flow from

operations was compensated by decreases of cash

used in investing and financing activities by Baht 232

million and Baht 417 million respectively. Main activities

that used lower cash were the decrease of capital

expenditures by Baht 187 million, the decrease of net

repayment of debts by Baht 318 million, the decrease

of interest payment by Baht 47 million and lower

dividend payment in 2015 by Baht 45 million.

Major factors and influences potentially affecting future operations or financial standing The financial results and operations of the Company

and its subsidiaries are greatly attached to the

development of automotive industry and car markets in

Thailand and Malaysia. The demand for vehicle

production volume is an important driver for the

manufacture of automotive parts business in Thailand,

where its performance is inclinded to move in the same

trend as the industry’s performance. The trend of

domest ic demand is an indicator for the car

dealerships business in Thailand and Malaysia.

Looking forward, Thailand’s total vehicle production

volume is forecasted to reach 2 million units in 2016,

representing an increase of 4-5% year on year. This

increase is expected to be driven by export growth,

which is forecasted to increase to 1.25 million units in

2016. With the implementation of AEC, it is believed

that Thailand’s position as the leading automotive


AAPICO

The Audit Committee of Aapico Hitech Public Company Limited is comprised of 3 qualified independent directors

according to the definition and requirements of the Securities and Exchange Commission and the Stock Exchange

of Thailand. Mr. Pipat R. Punya acts as the Chairman of the committee with Mr. Kenneth Ng and Mr. Wichian

Mektrakarn (appointed as of May 14, 2015) as the member of the committee.

The Board of Directors has delegated its responsibilities to the Audit Committee to carry out its duties, which

include reviewing the financial statements and disclosure of notes to financial statements, good corporate

governance practices, assessment of internal control and internal audit, compliance to laws and related regulations,

assessment of risks, as well as proposing the appointment of external auditor.

In the year 2015, the Audit Committee held 4 meetings to perform its duties and the proceedings from each

meeting were reported to the Board of Directors. Under its scope of authorities and responsibilities, the Audit

Committee meetings were conducted to give fair opinion which can be summarized as follows:

The reviews of quarterly and annual financial statements were performed by considering financial reports,

significant items, accounting policies, disclosure of information in notes to financial statements and compliance

with financial reporting standards and regulatory requirements. The committee reviewed with the management

that the financial statements were prepared in accordance with the Thai Financial Reporting Standards (TFRS),

and that there was sufficient disclosure in the notes to financial statements, adequate internal control in a good

level and no material issues concerning the non-compliance to related regulations. After the review, the Audit

Committee thereby approved the financial statements, which external auditors reviewed and audited without

reservation.

The review of the effectiveness and adequacy of internal control system and internal audit were conducted

by considering the report from internal auditor and the assessment of internal control system. Upon reviewing,

the committee has concluded that the Company’s internal control system is in place without significant

deficiencies. The report from internal auditor also reflected that the compliance of policies and procedures was

at a good level. The committee also gave recommendations to the management to enhance greater efficiency

of the Company’s internal control process.

The review of the Company’s operations and reporting was in compliance with laws and regulations

concerning the SEC and SET requirements and other regulations relating to the Company’s business. There were

no reporting of any misconducts in the year 2015.

The assessment of risks and the risk management process were conducted by the Risk Management

Committee and reported to the Audit Committee. The Company’s risk factors were classified into country risk,

market risk, operational risk, financial risk and other risks and are reviewed on annual basis in response to

changes in the economy both domestically and globally.

Report of Audit Committee


The Audit Committee has evaluated the performance of the Company’s external auditor, EY Office Limited, for

the year 2015 and considered that their service and level of independence to be of value to the Company’s

operations. Based on the satisfactory results and their widely recognized audit standard and experience, the Audit

Committee recommended the reappointment of EY Office Limited as the Company’s external auditor for the year

2016 to the Board of Directors for consideration and concurrence for submission to the Annual General Meeting of

Shareholders for approval.

For matters of potential conflict of interest transactions, the Audit Committee reviewed the Company’s

financial statements and the audit report and ensured that these transactions are properly reviewed and disclosed

in compliance with regulatory requirements and good corporate governance principles.

The Audit Committee has performed its duties prudently and independently and issued its opinion for the benefit

of Aapico Hitech PLC. From the review and supervision under the scope of responsibilities in the aforementioned

topics, it can be summarized that the Company’s financial statements are accurate and reliable and in compliance

with financial reporting standards and regulatory requirements, and that the Company is operated under an

environment with appropriate risk management, effective and adequate internal control system which is suitable to

the business environment, and in compliance with laws and relevant regulatory requirements.

(Mr. Pipat R. Punya)

Chairman of Audit Committee


AAPICO

The Nomination and Remuneration Committee of Aapico Hitech PLC is comprised of 3 independent directors,

namely Mr. Pipat R. Punya (Chairman of the committee), Mr. Kenneth Ng and Mr. Wichian Mektrakarn (appointed

as of May 14, 2015). As assigned by the Board, the committee has the duties and responsibilities in formulating

the policy, criteria and procedures for the nomination and remuneration of the Board of Directors and its

committees, in line with the business strategy and direction of the Company.

The Nomination and Remuneration Committee has responsibility to consider qualification of candidates nominated

for the position of the Company’s director. They shall ensure that these candidates are qualified by not having

characteristics that are prohibiting them from holding a directorship, and their background, knowledge and

experience are benefiting the Company’s operations. The committee shall ensure that the composition of the

Board of Directors is suitable to the Company’s business with appropriate proportion, size and diversity. In the

year 2015, the committee has nominated Mr. Wichian Mektrakarn for the position of the Company’s director,

member of Audit Committee and member of Nomination and Remuneration Committee, replacing Mr. Supasak

Chirasavinuprapand who had retired by rotation. This nomination was approved by the Board of Directors and the

2015 Annual General Meeting of Shareholders, as proposed.

The Nomination and Remuneration Committee has carefully considered the remuneration of the Board of Directors

and its committees, in comparison with the directors’ remuneration of other listed companies with similar

size, profitability and accountability. For the year 2015, the committee proposed to maintain the annual

remuneration and attendance fee of the Board of Directors and its committee at the same rate as in the year

2014. This proposal was also approved by the 2015 Annual General Meeting of Shareholders, as proposed.

The Nomination and Remuneration Committee has performed its duties prudently within the scope of

responsibilities as delegated by the Board of Directors. The Nomination and Remuneration Committee also

has disclosed the remunerations and benefits to the Board of Directors in the Annual Report and Form 56-1

for transparency purpose.

(Mr. Pipat R. Punya)

Chairman of Nomination and Remuneration Committee

Report of Nomination and Remuneration Committee


Country Company Address Contact

OEM Auto Parts Manufacturing

Thailand AAPICO Hitech Public 99 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880

Company Limited Tambol Banlane Ampur Bang Pa-in Fax : (66) 35 350 881

Ayuthaya Province 13160 www.aapico.com

[2nd Factory] 7/289 Moo 6 Amata City Industrial Estate Tel : (66) 38 650 888

Tambol Mabyangporn Ampur Pluakdaeng Fax : (66) 38 036 228

Rayong Province 21140

[Corporate Office] Room 2812, 28th Floor, The Offices at Central World Tel : (66) 2 613 1504

999/9 Rama I Road Kwaeng Pathumwan Fax : (66) 2 613 1508

Khet Pathumwan Bangkok 10330

AAPICO Amata 700/483 Moo 2 Amata Nakorn Industrial Estate Tel : (66) 38 717 200

Company Limited Tambol Bankao Ampur Panthong Fax : (66) 38 717 187

Chonburi Province 20160

AAPICO Forging Public 700/20 Moo 6 Amata Nakorn Industrial Estate Tel : (66) 38 213 355

Company Limited Tambol Nongmaidaeng Ampur Mueng-Chonburi Fax : (66) 38 213 360


AAPICO Hitech Parts 99/2 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880


Ayuthaya Province 13160

AAPICO Plastics Public 358-358/1 Moo 17 Bangplee Industrial Estate Tel : (66) 2 315 3456

Company Limited Taparuk Road Tambol Bangsaothong Fax : (66) 2 315 3334

Ampur Bangsaothong Samutprakarn Province 10540

[2nd Factory] 7/288 Moo 6 Amata City Industrial Estate Tel : (66) 38 650 888

Tambol Mabyangporn Ampur Pluakdaeng Fax : (66) 38 650 804


AAPICO Precision 700/16 Moo 6 Amata Nakorn Industrial Estate Tel : (66) 38 213 355



AAPICO Structural Products 700/16 Moo 6 Amata Nakorn Industrial Estate Tel : (66) 38 717 200



Katsuya (Thailand) 229/104-105 Moo 1 Taparuk Rd., Tel : (66) 2 706 5915-9

Company Limited Tambol Bangsaothong Ampur Bangsaothong Fax : (66) 2 706 5910

Samutprakarn Province 10540

AAPICO Lemtech (Thailand) 56 Moo 9 Tambol Tanoo Ampur U-thai Tel : (66) 35 741 808

Company Limited Ayuthaya Province 13160 Fax : (66) 35 719 383

AAPICO Mitsuike (Thailand) 99 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880



Company Contact Information


AAPICO


Thailand Able Sanoh Industries 98 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880

(1996) Company Limited Tambol Banlane Ampur Bang Pa-in Fax : (66) 35 350 881


Edscha AAPICO Automotive 99/2 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880



Minth AAPICO (Thailand) 7/290 Moo 6 Amata City Industrial Estate Tel : (66) 38 650 865-7

Company Limited Tambol Mabyangporn Ampur Pluakdaeng Fax : (66) 38 650 864


Sanoh Industries (Thailand) 7/209 Moo 6 Amata City Industrial Estate Tel : (66) 38 956 250

Company Limited Tambol Mabyangporn Ampur Pluakdaeng Fax : (66) 38 956 252


Sumino AAPICO 700/706 Moo 3 Amata Nakorn Industrial Estate Tel : (66) 38 447 628

(Thailand) Company Limited Tambol Bankao Ampur Panthong Fax : (66) 38 447 632


Thai Takagi Seiko 358-358/1 Moo 17 Bangplee Industrial Estate Soi 7/1 Tel : (66) 2 705 8800-01

Company Limited Theapharuk Road Tambol Bangsaothong Fax : (66) 2 705 8808

Ampur Bangsaothong Samutprakarn Province 10540

China Kunshan Chaitai-Xincheng Economic and Technological Development Zone Tel : (86) 512 5767 1757

Precision Forging Company 405 Yunque Road Kunshan City Fax : (86) 512 5767 0964

Limited Jiangsu Province 215331 China

Design and Manufacture of Assembly Jigs

Thailand AAPICO Hitech Tooling 99/1 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880



Car Dealerships

Thailand Able Motors 14/9 Moo 14 Phaholyothin Road Tel : (66) 2 908 6001-7

Company Limited Tambol Klong Neung Ampur Klong Luang Fax : (66) 2 908 6009

Pathumthani Province 12120

[Office branch] 2418-2420 Ladprao Road

Kwaeng/Khet Wangthonglang Bangkok

New Era Sales 97 Ramindra Road Kweang Ramindra Tel : (66) 2 519 5800-4

Company Limited Khet Kannayao Bangkok 10230 Fax : (66) 2 946 5107

[Office branch] 89/89 Moo 5 Srinakarin Road

Tambol Bangmuang Ampur Bangsaothong

Samutprakarn Province 10270

Malaysia New Era Sales (M) Lot 39821, Jalan Semenyih Tel : (60) 3 8737 0403

SDN. BHD. 43000 Kajang Selangor Fax : (60) 3 8737 7406

Tenaga Setia Resources No. 10 Jalan 51/217 Section 51 Tel : (60) 3 7784 8411

SDN. BHD. 46050 Petaling Jaya Selangor Fax : (60) 3 7784 7411



Car Navigation

Thailand AAPICO ITS 141 Thailand Science Park, Phahonyothin Road, Tel : (66) 35 350 880

Company Limited Tambol Khlong Nueng, Ampur Khlong Luang, Fax : (66) 35 350 881

Pathumthani Province 12120 www.powermap.in.th

Malaysia AAPICO ITS Co. No. 10 Jalan 51/217 Section 51 Tel : (60) 3 7785 5158


AAPICO QI SDN. BHD. 38-1, Jalan Mega Mendung, Off Jalan Klang Lama,

58200 Kuala Lumpur

Singapore Able ITS PTE. LTD. 745 Lorong 5 Toa Payoh The Actuary #03-01 Tel : (65) 6836 1919

Singapore 319455

Quantum Inventions Block 71 Ayer Rajah Crescent #03-23/24

Private Limited Singapore 139951

Others

Thailand AAPICO Engineering 99 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880



A ERP Company Limited 99 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880

Tambol Banlane Ampur Bang Pa-in Fax : (66) 35 350 881


AAPICO Training Center 99 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880



AAPICO Technology 99 Moo 1 Hitech Industrial Estate Tel : (66) 35 350 880



Malaysia AAPICO Engineering No. 10 Jalan 51/217 Section 51 Tel : (60) 3 7784 8411


Singapore AAPICO Investment 745 Lorong 5 Toa Payoh The Actuary #03-01 Tel : (65) 6836 1919

Private Limited Singapore 319455

Jackspeed Corporation 221 Henderson Road #06-15 Tel : (65) 6273 0386

Limited Singapore 159557 Fax : (65) 6273 0396


AAPICO

Security Depository Registrar : Thailand Securities Depository Company Limited

Address : 93 Ratchadapisek Road, Dindaeng, Bangkok 10400 Thailand

Telephone : (66) 2 009-9000, (66) 2 009-9999

Fax : (66) 2 009-9991

Auditor : EY Office Limited

Address : Lake Rajada Office Complex, Floor 33,

193/136-137 Rajadapisek Road, Klongtoey, Bangkok 10110

Telephone : (66) 2 264-0777

Fax : (66) 2 264-0789

Company Credit Rating For the year 2015, TRIS Rating affirms the company

rating and the senior unsecured debenture rating of

Aapico Hitech PLC at “BBB+”. The rating reflects

the Company’s strong business profile as a Tier-1

automotive part manufacturer in Thailand, its strong

relationships with major automakers, high barrier to

entry in the Tier-1 automotive part industry, and strong

fundamentals of the automotive production in Thailand.

These strength are however partially weighted down

by the relatively thin profit margin of its stamped

products and car dealership segments, high customer

concentration due to the character of industry which

has small number of major automakers in Thailand, and

cyclical nature of the automotive industry.

TRIS Rating has given the rating outlook at “Stable”,

which reflects its expectation that the Company will be

able to maintain its strong market position in its core

lines of business and will continue to maintain its

financial strength.

Reference


Information as at December 31, 2015

Abbreviation AH

Registration Number 0107545000179

Type of Business Design, produce, and install assembly jigs and stamping dies, and produce OEM

automotive parts, which include floor parts, brackets, chassis frames, forged and

machine parts including steering and suspension system, cross members, pillars, clips,

and fuel tank to leading automobile assemblers in Thailand, as well as car dealerships

and car navigation businesses. Website www.aapico.com

Established 1996

First day of Trading 17 October 2002

in SET

Address 99 Moo 1 Hitech Industrial Estate Tambol Ban Lane

Amphur Bang Pa-in Ayutthaya Province 13160

Registered Capital Baht 322,649,160 Consist of Ordinary 322,649,160 shares*

Paid Up Capital Baht 322,583,844 Consist of Ordinary 322,583,844 shares*

*Par Value at 1 baht per share

Accounting Cycle 1 January- 31 December

Major Shareholders Major shareholders are Mr. Yeap Swee Chuan and family with shareholding of 39.85%

and Sojitz Corporation with shareholding of 15.76% of the total outstanding shares.

Remaining shares are held by institutional and individual investors.

Corporate Information

AH Stock Trading History for 2007-2015

หน่วย : 1,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

40

35

30

25

20

15

10

5

0

Share Volume

Closed Price (Baht)

3/1/2007

27/2/2007

27/4/2007

26/6/2007

22/8/2007

16/10/2007

13/12/2007

11/2/2008

8/4/2008

9/6/2008

5/8/2008

3/9/2008

25/11/2008

26/1/2009

23/3/2009

26/5/2009

23/7/2009

17/9/2009

11/12/2009

1/12/2010

7/9/2010

11/2/2010

29/12/2010

25/2/2011

27/4/2011

27/6/2011

24/8/2011

18/10/2011

15/12/2011

10/2/2012

10/4/2012

11/6/2012

6/8/2012

1/10/2012

26/11/2012

24/1/2013

21/3/2013

22/5/2013

18/7/2013

13/9/2013

8/11/2013

9/1/2014

6/3/2014

7/5/2014

7/7/2014

3/9/2014

29/10/2014

25/12/2014

23/2/2015

24/4/2015

24/6/2015

21/8/2015

15/10/2015

14/12/2015

9/2/2016

Volume (Share) Closed Price

TENAGA SETIA RESOURCES SDN. BHD PETALING JAYA

NEW ERA SALES (M) SDN. BHD. KAJANG SELANGOR

MINTH AAPICO (THAILAND) CO., LTD. RAYONG ABLE MOTORS CO., LTD. PATHUMTHANI

AAPICO HITECH PLC, AAPICO PLASTICS PLC, RAYONG AAPICO FORGING PLC. CHONBURI

AAPICO HITECH PLC. AAPICO HITECH TOOLING CO., LTD. AYUTHAYA

AAPICO HITECH PARTS CO., LTD. AAPICO MITSUIKE (THAILAND)

CO., LTD. AYUTHAYA

AAPICO AMATA CO., LTD. CHONBURI

NEW ERA SALES CO., LTD. BANGKOK

AAPICO PLASTICS PLC. SAMUTPRAKARN

AAPICO ITS CO., LTD. A MACTION CO., LTD.

AYUTHAYA

AAPICO STRUCTURAL PRODUCTS CO., LTD. CHONBURI ABLE SANOH INDUSTRIES (1996)

CO., LTD. AYUTHAYA

KUNSHAN CHAITAI-XINCHENG PRECISION FORGING CO., LTD. KUNSHAN

Documents

Our vision is to become a lean green and happy world-class ...ah.listedcompany.com/misc/ar/20160407-ah-ar2015-en.pdf · Our vision is to become a lean green and happy world-class