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:: Annual Report 2009 ::

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  • 2552 | Annual Report 2009

    ()KCE ELECTRONICS PUBLIC COMPANY LIMITED

  • Financial Highlights

    Summarized Financial Data

    2552 Directorss Report 2009

    The Audit Committee Report

    Nature of Business

    | Contents

    10 Top Ten Shareholders from Shareholder List

    Board of Directors

    Management Staff

    Remuneration

    Corporate Governance Report

    2

    3

    4

    8

    10

    13

    14

    24

    26

    28

  • Industrial Status and Competition

    Management Explanation and Analysis

    Persons with vested interest and cross over transactions

    Risk Factors and Risk Management

    General Information

    Report of the Board of Directors Responsibilities for Financial Statements

    Report of Independent Auditor and Financial Statements

    Check List of 56-2

    80

    88

    100

    102

    108

    112

    114

    218

    Quality Policy KCE commits to provide products and services to meet or exceed agreed requirements for all

    of our customers through continuous improvement and by doing it right the first time.

  • 2552 2

    Financial Highlights (Based on Consolidated Financial Statements)

    4OTAL2EVENUESh-ILLION"AHT

    .ET0ROFIT,OSSh-ILLION"AHT

    : Unit : Million Baht

    2552 | 2009 2551 | 2008 2550 | 2007

    Total revenues 5,938.806 7,896.501 8,578.713

    EBITDA 1,012.706 437.558 1,124.543

    () Net profit (loss) 171.553 (399.170) 257.426

    Net cash from operating activities 696.158 602.880 631.092

    () () Earnings per share (Baht) 0.38 (0.86) 0.66

    () Weighted average number of ordinary shares (Thousand shares)

    456,049 462,219 388,387

    () Number of employees (person) 4,505 4,053 4,703

    Total assets 8,807.773 9,384.641 9,876.965

    Total liabilities 6,329.209 7,074.400 7,166.872

    Total shareholders equity 2,478.564 2,310.241 2,710.093

    () Issued and paid-up Share capital 462.497 462.497 462.497

    % / % Dividends / Net profit - 12.12% -

  • Annual Report 2009 3

    Summarized Financial Data

    / Financial Data :

    Unit : Million Baht 2552 | 2009 2551 | 2008 2550 | 2007 Total assets 8,807.773 9,384.641 9,876.965

    Total liabilities 6,329.209 7,074.400 7,166.872

    Total shareholders equity 2,478.564 2,310.241 2,710.093

    Sales and service income 5,752.443 7,667.337 8,365.411

    Total Revenues 5,938.806 7,896.501 8,578.713

    Gross margin 1,079.192 1,065.180 1,471.192

    () Net Profit (Loss) 171.553 (399.170) 257.426

    Net cash from operating activities 696.158 602.880 631.092

    / Financial Ratios

    Gross Margin / Total Sales income 18.76% 13.89% 17.59%

    Net Income / Total Sales income 2.98% -5.21% 3.08%

    Return on Shareholders Equity 6.92% -17.28% 9.50%

    Return on Assets 1.95% -4.25% 2.61%

    Net cash from operating activities / Sales 12.10% 7.86% 7.54%

    Net cash from operating activities / Shareholders equity 28.09% 26.10% 23.29%

    () Earning Per Share (Baht) 0.38 (0.86) 0.66

    () Dividend Per Share (Baht) - 0.08 -

    () Book Value Per Share (Baht) 5.36 5.00 5.86

    k4OTAL!SSETSh-ILLION"AHT

    ghh3HAREHOLDERS}%QUITYh-ILLION"AHT

  • 2552 4

    2552 2552 5,752.4 ( 168 ) 7,667.3 ( 231 )

    (Demand) 4 (the scrappage incentive schemes) 40

    399.2 2551 171.5

    (Demand) (Economy of scale) 14 19 2551 2552 24.7 4 (Productivity)

    () 18 2,468.7 3,032.3

    210 168.5 185.8 2552

    2552 88

    148.4 1,283.5 94.3

    13 3,817.3 4,410.4

    252 151.9 231.9

    31 1,051.3 1,534.9

    2552 41 32.4 45.9

  • Annual Report 2009 5

    The Companys consolidated sales for the year 2009 amounted to Baht 5,752.4 million (USD 168 million), down from Baht 7,667.3 million (USD 231 million) in 2008. The reduction in 2009 sales reflects the significant reduction in demand from the automotive industry during the first half of 2009 due to the recession. The automotive industry started to recover during the second half of 2009 with the recovery gaining momentum during the fourth quarter as a result of the governmental scrappage incentive schemes. Consequently, sales improved by some 40% from first half to second half of 2009. Restructuring and aggressive cost reduction programs, including the temporary suspension of production at its K.C.E. International factory, substantially reduced the Companys cost base and this, combined with the increase in Company sales of higher tech products, resulted in profit of Baht 171.5 million for 2009 (compared with a loss of Baht 399.2 million for 2008). The turnaround in the Companys performance can be attributed to increased demand from existing and new customers and a significant improvement in margins. Customer demand resulted in the Companys production plants running at full capacity thus achieving economy of scale. The significant improvement in gross profit margins, from 14% in 2008 to 19% in 2009 and as high as 24.7% in 4Q09, was driven by a successful cost improvement program; the maximizing of production efficiency; improved yields, resulting in improved productivity; and an increased product mix of hi-tech PCB, high-margin products. Results Summary The Group Company earnings are summarized as follows :

    KCE Electronics Plc. Although sales revenues decreased by 18% to Baht 2,468.7 million from Baht

    3,032.3 million, profits increased by 210% from a loss of Baht 168.5 million in 2008 to a profit of Baht 185.8 million.

    KCEI Due to the temporary closure of KCEI during 2009, Sales revenues decreased

    by 88% to Baht 148.4 million, down from Baht 1,283.5 million, resulting in a loss of Baht 94.3 million.

    KCET Sales revenues decreased by 13% to Baht 3,817.3 million from Baht 4,410.4

    million in the previous year. Notwithstanding the reduction in sales revenue, Profit increased by 252% to Baht 151.9 million from the previous years loss of Baht 231.9 million.

    TLM Sales revenues decreased by 31% to Baht 1,051.3 million, down from Baht

    1,534.9 million. Profit for the year increased by 41% from Baht 32.4 million to Baht 45.9 million.

    Directorss Report 2009

  • 2552 6

    () 1 212.4 211.0

    3.6 3.3

    SAP ERP (Enterprise Resource Planning)

    56.1 12.3

    2553

    - Demand 2552

    2552 536 244

    2551 604 2550 Demand 3

    60

    PCB Tier one 20

    PCB 3 ( :

    Dr. Hayao Nakahara - N.T. Information Ltd.) PCB 2553 ()

  • Annual Report 2009 7

    KCE Thailand Sales revenue from the KCE Thailand Sales office decreased slightly by 1%

    from Baht 212.4 million to Baht 211.0 million, and profits decreased from Baht 3.6 million to Baht 3.3 million.

    TBS KCE Groups new SAP ERP (Enterprise Resource Planning) implementation

    subsidiary achieved sales revenues in its first year of Baht 56.1 million, with a profit of Baht 12.3 million.

    OUTLOOK

    The Board of Directors is cautiously optimistic in its outlook for 2010. December and January are typically slower months due to seasonal demand fluctuations; however, the Company has seen increases in sales during this period. December sales for the Group were Baht 536 million compared to Baht 244 million for 2008 and Baht 604 million for 2007. These encouraging indications of a recovery in demand and the current strong forward order book have allowed the full reopening of K.C.E. International. KCEs sales are to three main market sectors - Automotive, Industrial and Consumer. The largest sector for the Company is Automotive, which accounts for over 60% of sales. The Company supplies PCBs to a large proportion of the worlds top 20 Tier 1s and is now ranked as the worlds third biggest supplier of PCBs to the automotive industry (Source : Research by Dr. Hayao Nakahara of N.T. Information Ltd.). The worldwide automotive industrys requirement for PCB is rapidly growing due to the increasing requirements for electronic functionality and KCE is well positioned to capitalize on this growing industry. During the recession, the Company has not only succeeded in maintaining existing market share in what has undoubtedly been one of the most extreme downturns experienced during the Companys history, but it has also taken the opportunity to develop new customers, which we believe will contribute to the Companys sales growth in the near future. The Board of Directors would like to thank the staff, shareholders, partners, customers and financial institutions for their continued support during what we hope was the last year of the global recession, during which we have laid the foundations for what we anticipate to be a brighter 2010.

    Bancha Ongkosit Chairman KCE Electronics Public Company Limited

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  • To Shareholders

    The effects of the global economic crisis in 2009 brought about significant impacts to the Company and its subsidiaries. Therefore, the management had to make certain strategic business adjustments, one of which was the improvement of computerized information technology for timely analysis and control of the manufacturing process and