GLOBAL NETWORK Contents 36 Transparency and Governance 37 Social Responsibility 38 Market and Competition 39 Research and Development 39 Future Projects 40 2006 Economic Review and Outlook for 2007 41 Risk Factors 42 Operating Results and Financial Standing 51 Other References 52 Intercompany Transactions 57 Report of The Independent Certified Public Accountants 58 Consolidated and Company Financial Statements 1 Financial Highlights 2006 3 Message from Chairman of the Boards of Directors 4 Message from Chairman of the Executive Committee 5 Report of the Audit Committee 2006 6 General Information 8 Pico Group International Network 12 Scope of Business 21 Board of Directors / The Audit Committee / The Executive Committee 26 Organizational Structure 27 Management Structure 34 Shareholding Structure 35 Business Objectives
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GLOBAL NETWORK
Contents
36 Transparency and Governance
37 Social Responsibility
38 Market and Competition
39 Research and Development
39 Future Projects
40 2006 Economic Review and Outlook
for 2007
41 Risk Factors
42 Operating Results and Financial Standing
51 Other References
52 Intercompany Transactions
57 Report of The Independent Certified Public
Accountants
58 Consolidated and Company Financial
Statements
1 Financial Highlights 2006
3 Message from Chairman of the Boards
of Directors
4 Message from Chairman of the Executive
Committee
5 Report of the Audit Committee 2006
6 General Information
8 Pico Group International Network
12 Scope of Business
21 Board of Directors / The Audit Committee /
The Executive Committee
26 Organizational Structure
27 Management Structure
34 Shareholding Structure
35 Business Objectives
Financial Highlights 2006
716.5
182.5
172.1
100 300 500 700 900 1,100
71.3
247.3
41.7
41.2
527.3
370.0
315.5
264.4
100 300 500 700 900 1,100
244.0
209.8
144.9
126.0
429.2
2006
2005
2006
2005
2004
2006
2005
2004
2006
2005
2004
2006
2005
2004
2006
2005
2004
Financial Performance
Revenue from the rendering of services
Net Profit
2004
Financial Status
Total Assets
Total Liabillties
Total Shareholders‘ Equity
Financial Ratios
(Unit : Million Baht)
(Unit : Million Baht)
2006 2005 2004
Liquidity Ratio 2.0 2.4 2.4
Debt to Equity Ratio 0.7 0.5 0.5
Gross Profit Margin 22.3% 25.5% 26.9%
Operating Profit Margin 8.5% 8.0% 10.0%
Net Profit Margin 6.4% 5.8% 6.4%
Return on Assets 14.9% 10.4% 13.6%
Return on Equity 23.7% 15.8% 22.5%
Earning per Share (Baht) 0.62 0.36 0.39
Book Value per Share : (Baht) 2.78 2.48 5.24
639.1
Gross Margin
1,0376
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PICO’s highest goal is the customer’s satisfaction.
annual report 2006
Pico (Thailand) Public Company Limited 3
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Message from Chairmanof the Board of Directors
The past year was one of our best years with a
significant increase in turnover and net income. Our
turnover amounted to Baht 1,112 million with a net profit
after taxes of baht 71 million representing an increase of
45% and 71% respectively. This increase directly reflects
our successful marketing campaign, sound cost control and
effective deployment of human resources.
Look ing forward, we see the cont inu ing
domestic and global factors that could possibly impact our
operation. Some of these are the fluctuating energy prices,
international conflicts and domestic political uncertainty, and
the potential communicable disease pandemic. To meet with
these contingencies, our plan will allow us to move quickly
in adjusting to changes. We will also focus on leveraging
the regional and worldwide network of Pico, and drawing
on the expertise and experience to enhance our business
opportunities.
Lastly, since this is the most joyous year for Thailand
and its people with the celebration of His Majesty’s 60
years accession to the throne and upcoming 80th Birthday
in 2007, the Board of Directors and I join the nation in
offering His Majesty our salutation and prayer for his
health and happiness.
(Mr. Chia Song Heng)
Chairman of the Board of Directors
annual report 2006
Pico (Thailand) Public Company Limited 4
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We expect the similar or less market expansion in
year 2007 than 2006. The competition will be intense with
the expected economic slowdown and the uncertainty of
the Government spending in this sector.
We will sharpen our business model and focus on
distinct and complete service offering. For example, the
event marketing will cover all aspects of marketing services
while the “knowledge communication” will be emphasized
in the museum, permanent/semi-permanent exhibition,
visitor center and knowledge center. Our investment
in supportive businesses will be very selective and focus
on the stated plan.
This year we implemented the “Employee
Happiness Index” which reflects our concern for staff
welfare and a sustainable growth in the long term.
Lastly on behalf of the management I would like
to thank our clients and shareholders in giving us your
continued trust and support and our staff for their ever
dedicated and consistent efforts.
Mr. Pised Chungyampin
Chairman of the Executive Committee
Message from Chairman of the Executive Committee
annual report 2006
Pico (Thailand) Public Company Limited 5
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3. Intercompany transact ion. Al l re lated
transactions were audited to ensure that there were no
conflicts of interest and that the involved transactions were
conducted at arms length and are verified as normal business
engagements. The company is well aware of this policy on
related transactions.
4. Internal audit. During 2006 a quarterly review
was undertaken on the approved internal audit program.
Additionally, at mid year a policy review of the audit program
was conducted to ensure that the process is in line with the
changes in business environment. This was to ensure an
effective and accurate financial reporting in accordance with
the legal framework and regulations as announced by the
relevant authorities.
5. Risks Management. Risks management is
reviewed quarterly to ensure compliance to established
guidelines. Risk factors were identified, probability and
repercussions evaluated and mitigating action plan suggested to
management. The company’s r isks management
throughout 2006 is satisfactory and no risks that would
materially impair operation were found.
6. Appraisal of the internal control process of the
company. The internal control process was reviewed and
appropriate and effective changes made to accommodate
the changes in the economy. The internal auditor’s review
and comments made are in line with those observed by the
external auditor in the quarterly and annual audit process.
No substantive problems or material deficiencies were noted.
Consistent recognition and rationalization of potential
problems noted by management with appropriate rectifying
measures undertaken during the period under review.
On behalf of the Audit Committee
(Dr. Chaiyod Bunyagidj)
Chairman of the Audit Committee
Pico (Thailand) Public Co., Ltd.
Reportof the Audit Committee 2006
In 2006 the audit committee duly carried out its
responsibility in accordance with the scope of authority
delegated by the Board of Directors of Pico Thailand.
This includes the duties as prescribed by the regulation
governing audit committee and to ensure that good corporate
governance is adhered to. During the year 4 meetings were
held with the results summarized as follows:
1. Good governance practice. A process to check and
ensure that practices leading to good corporate governance
is in place and compliance monitored.
2. Supervision and auditing of quarterly and annual
financial reports consolidated and unconsolidated for 2006.
Measures were adopted so that the preparation of the reports
are in full compliance with the accounting standard and
adheres to the Generally Accepted Accounting Principles and
the announcements of the Securities Exchange Commission
and Stock Exchange of Thailand both in terms of adequate
disclosure and timely completion.
annual report 2006
Pico (Thailand) Public Company Limited 6
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Name Pico (Thailand) Public Company Limited
Corporate Registration 0107546000296
Address 10 Soi Lasalle 56, Sukhumvit Road,
Bangna District, Bangkok 10260
Telephone 0-2748-7007
Facsimile 0-2745-8521, 0-2748-7591
Website www.picothai.com
Registered Capital 115,000,000 Baht
Paid up Capital 114,999,980 Baht
Par value 1 Baht
General Information
Pico (Thailand) is a joint venture between Thai
investors led by Mr. Pised Chungyampin and Pico Art
International of Singapore, a subsidiary company of Pico
Far East Holding is a Hong Kong listed event marketing
company with a worldwide network of 30 branches in 26
countries.
Pico (Thailand) is in the business of event
marketing service and the turnkey event and exhibition
management. We conceptualize, design and produce
the exhibition/ activity in accordance with the client’s
marketing concept. This is then executed in several formats
such as trade show, multi media presentation, museum
exhibit and etc.
To better and more effectively serve our clients
we have made several investments in related businesses
such as PX System which provides rental equipment such
as exhibition booths. Artcom Graphic which design
specializes in the graphic design and printing for internal
and external exhibition. Multi Designs specializes in the
latest innovation in display design and decoration.
In addition there are 4 associated companies. Inkjet is in
the large-format printing, billboard printing and graphic
production. BEC-Tero Exhibition was formed to draw on
the experience of the partners in tapping a specializes
niche market. IBRIX is in the trade show and related
business. DesignLab is a specialist in architectural and
interior design trade show and display design and
electronic media for the knowledge communication
business. As often seen in the semi permanent display in
museum.
We are committed to excellence in service quality and
consistently conduct our own appraisal using internationally
accepted criteria. Pico was the first Thai company in the trade
exhibition business to be awarded with the ISO9001:2000
from the ISO – Energy & Environmental Accredited Quality
Assessment (EAQA)
annual report 2006
Pico (Thailand) Public Company Limited 7
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The wealth creation among
all shareholders and stakeholders through
the conduction of corporate governance
policy is PICO’s responsibility.
annual report 2006
Pico (Thailand) Public Company Limited 8
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Principal Offices
AtlantaPico Atlanta, Inc. 5361 Royal Woods Parkway, Tucker, GA 30084, USATel 1 - 770 - 414 1114 Fax 1 - 770 - 414 [email protected] Person: Mr. Evarts English
BahrainPico International (Bahrain) W.L.L. No 1 Manama Centre, Government Avenue, Manama Town 316, Kingdom of BahrainTel 973 - 17 - 218898 Fax 973 - 17 - [email protected] Person: Mr. Miswadi B S
BangkokPico (Thailand) Public Company Limited10 Soi Lasalle 56, Bangna Sub-district,Bangna District, Bangkok 10260, Thailand Tel 66 - 2 - 748 7007 Fax 66 - 2 - 748 [email protected] Person: Mr. Pised Chungyampin
BeijingBeijing Pico Exhibition Services Co., Ltd. Pico Centre, 8 Li Shui Qiao Bei, Chaoyang District, Beijing 102218, ChinaTel 86 - 10 - 8482 3991 Fax 86 - 10 - 6491 [email protected] Person: Mr. Victor Leung
BruneiPico International (B) Sdn Bhd Block A, Unit 10, 1st Floor, Kiarong Complex, Lebuhraya Sultan Hassanal Bolkiah,BE1318 Bandar Seri Begawan, BruneiDarussalamTel 673 - 2426 - 990Fax 673 - 2426 - 991 [email protected] Contact Person: Mr. Peter Ng
CairoPico International (Egypt) Limited18, Al Lowaa Mahmoud Samy Street, 3/F., Nasr City, Cairo, EgyptP.O. Box: 11671, EgyptTel 20 - 2 - 671 7804 Fax 20 - 2 - 671 [email protected] Contact Person: Mr. Taha Youssef
Chicago Pico Chicago1881 Circuit Drive, Round Lake Beach,IL60073, USATel 1-847-740-0846Fax [email protected] Person: Mr. Tack Roberts
Doha Pico International (Qatar) W.L.L.No. 88 ASCO Compound, C-Ring Road, New Salata, P.O. Box 24403, Doha, State of QatarTel 974 - 467 7988Fax 974 - 467 [email protected] Person: Mr. YC Leong
DongguanDongguan Pico Exhibition Services Co., Ltd.Reservoir Ind District 1 Road,Guan Jing Tou, Dongguan 523705, ChinaTel 86 - 769 - 777 4471Fax 86 - 769 - 777 [email protected] Contact Person: Mr. Ang Swee Meng
DubaiPico International (Dubai) L.L.C.Office No. 520, Building 8,5th Floor Dubai Media City,P.O. Box 37679,Dubai, United Arab EmiratesTel 971 - 4 - 339 3188Fax 971 - 4 - 339 [email protected] Person: Mr. Peter Sng
TaipeiPico International Taiwan Limited3/F, No. 343, Nanking East Road, Section 5, Taipei, TaiwanTel 886 - 2 - 2753 5990Fax 886 - 2 - 2766 [email protected] Person: Ms. Florence Tan
TokyoPico International LimitedTokuda Building 4F,7-3 Nihonbashi Kabutocho, Chuo-ku,Tokyo 103-0026, JapanTel 81 - 3 - 3808 0891Fax 81 - 3 - 3808 [email protected] Person: Mr. Tsunemichi Yui
Other Operating Companies
Albert Smith China Co., Ltd. Shanghai Head OfficeAlbert Smith Bldg, 36 Cao Lian Road,Lian Xi Cun, Huangdu Town, Jiading District, Shanghai 201804, ChinaTel 86 - 21 - 6959 6990Fax 86 - 21 - 6959 0611/6959 [email protected], [email protected] Person: Mr. Danny Ku Beijing Rep Office:Tel 86 - 10 - 8484 8880Fax 86 - 10 - 8484 7780Shenzhen Rep Office:Tel 86 - 755 - 8290 0516Fax 86 - 755 - 8295 1282
BizArt Asia LimitedPico House, 4 Dai Fu Street,Tai Po Industrial Estate, N.T.,Hong Kong SARTel 852 - 2660 2828Fax 852 - 2660 [email protected] Person: Mr. Martyn Minns
GMC Worldwide Limited Pico House 4 Dai Fu Street,Tai Po Industrial Estate NT, HONG KONG SARTel 852 - 2660 4506Fax 852 - 2664 [email protected] Person: Ms. Sharon Soh
HanoiPico Hanoi Limited214 Nguyen Luong Bang Street, #02-01,Dong Da District, Hanoi, VietnamTel 84 - 4 - 513 1038 / 513 1039 / 513 1040Fax 84 - 4 - 513 [email protected] Person: Mr. Vincent Hu
Ho Chi Minh City Pico Hochiminh City Limited446 Hoang Van Thu Street, 1st Floor, Tan Binh District, Ho Chi Minh City, VietnamTel 84 - 8 - 948 5060Fax 84 - 8 - 948 [email protected] Person: Mr. Chung Chee Keong
Hong KongPico International (HK) LimitedPico House, 4 Dai Fu Street,Tai Po Industrial Estate, N.T.,Hong Kong SARTel 852 - 2665 0990Fax 852 - 2664 [email protected] Person: Mr. Steven Fang/Ms. Anne Li
Kuala LumpurPico International (M) Sdn BhdWisma Pico, 19-20 Jalan Tembaga SD5/2,Bandar Sri Damansara, 52200 Kuala Lumpur, MalaysiaTel 60 - 3 - 6275 5990Fax 60 - 3 - 6275 [email protected] Person: Mr. Peter The
LondonPico Exhibition (UK) Limited1 Victoria Villas, Richmond, Surrey, TW9 2JX United KingdomTel 44 - (0)20 - 8948 6211Fax 44 - (0)20 - 8948 [email protected] Person: Mr. Daren Chia
Los AngelesPico Art Exhibit Inc.20910 Normandie Ave., Unit #D, Torrance,CA 90502, USATel 1 - 310 - 328 6990Fax 1 - 310 - 328 [email protected] Person: Mr. Jolly Chang
MacauPICO International (Macao) LimitedAv. Da Amizade, No. 918, World Trade Center Building, 7/F, Flat D, MacaoTel 853 - 727 990Fax 853 - 727 [email protected] Person: Ms. Elizabeth Chu
MelbournePico Australia Pty LimitedLevel 2, 19-23 Prospect Street, Box Hill VIC 3128, AustraliaTel 61 - 3 - 9897 3500Fax 61 - 3 - 9897 3700 [email protected] Person: Mr. Anthony Tan
New DelhiPico International Exhibition Pvt LimitedPico Bhawan, A-27/15, Khanpur Extension,New Delhi 110062, IndiaTel 91 - 11 - 2609 7063/64Fax 91 - 11 - 2609 [email protected]@pico.comContact Person: Mr. Edwin Ng
Paris Pico Paris succ de Pico Exhibition (UK) Limited14/30 rue de Mantes, 92700Colombes, France Tel 33 - 1 - 4649 8000Fax 33 - 1 - 5683 [email protected] Person: Mr. Marc Tronson
SeoulPico North Asia Limited4F Sang Won Building, 165-11, Samsung-dong, Kangnam-ku, Seoul 135-090, Korea Tel 82 - 2 - 558 3240Fax 82 - 2 - 561 [email protected] Person: Mr. Jeferson Jo
IES-HONG KONG: Pico House, 4 Dai Fu Street, Tai Po Industrial Estate, New Territories, Hong KongTel 852 - 2665 0990Fax 852 - 2664 [email protected] Person: Mr. Cheung Kwok Wing
Chongqing International Convention and Exhibition CenterChongqing Nanping Convention And Exhibition Center Management Co., Ltd.2 Jiang Nan Avenue, Nan An District, Chongqing 400060, China Tel 86 - 23 - 6260 9001/6260 9000Fax 86 - 23 - 6260 [email protected]@picoworld.comContact Person: Mr. Louis Cheng
Ho Chi Minh City International Exhibition and Convention CentreHIECC Management Co., Ltd.2nd Level, 446 Hoang Van Thu Str., Tan Binh District, Ho Chi Minh City S.R. VietnamTel 84 - 8 - 845 1088/ 845 0454Fax 84 - 8 - 845 1080 [email protected] Person: Mr. Low Wan Thiam
Shanghai Office:MP International (Shanghai) Pte LtdFL 11E Jinming Building, No.8 South Zunyi Road, Shanghai 200336, China Tel 86 - 21 - 62959990 Fax 86 - 21 - [email protected] Contact Person: Mr. Brian Ge
Hong Kong Office:Meeting Planners International (HK) Limited 23/F, Pico Tower, 66 Gloucestor Road, Wanchai, Hong Kong SARTel 852 - 2509 3430Fax 852 - 2509 [email protected] Person: Ms. Anita Cheng
Pico Conference Centre Limited13/F, Pico Tower, 66 Gloucestor Road, Wanchai, Hong Kong SARTel 852 – 2509 9033Fax 852 - 2509 [email protected] Person: Mr. Ho Koon Dow
Pico Hong Kong Limited (Museum, Theme Park, Interior)Pico House, 4 Dai Fu Street, Tai Po Industrial Estate, N.T., Hong Kong SARTel 852 - 2689 5100Fax 852 - 2665 [email protected] Person: Mr. E K Cheng
Shanghai Pico Media Service Co., Ltd.Building 2 Huiyi Garden, No.905 Hushan Road,Shanghai 200031, ChinaTel 86 - 21 - 6387 5363Fax 86 - 21 - 6437 [email protected] Person: Mr. Alec Chau, Mr. Brian Au
Shanghai World Expo Bizarts China Co., Ltd.Flat F, 11/F, Block 2, Jin Ming Building,8 Zun Yi Road South, Shanghai 200336, ChinaTel 86 - 21 - 6219 9990Fax 86 - 21 - 6295 [email protected] Contact Person: Ms. Florence Tan
Expoman Limited11/F, Pico Tower, 66 Gloucester Road,Wanchai, Hong Kong SARTel 852 - 3101 8318Fax 852 - 3102 [email protected] Person: Mr. Terence Chiu
World Events Organisation Pte Limited 2nd Floor , Pico Creative Centre, 20 Kallang Aveneue, Singapore 339411Tel 65 - 6393 0206Fax 65 - 6392 [email protected] Person: Mr. Andrew Lee
Agents
AnkaraOmni International Yesityurt Sokok No 3/6, 06690 - Kavaklidere, Ankara, TurkeyTel 90 - 312 - 467 7054/467 9129Fax 90 - 312 - 467 7036Contact Person: Mr. Feyzan ErelPico Contact: Mr. Ngew Thye On
HelsinkiFairmatura KyHuopalahdentie 16 B 32 FIN-00330 Helsinki FinlandTel 358 - 9 - 4584544Fax 358 - 9 - [email protected] Person: Ms Maarit KaasinenPico Contact: Mr. Daren Chia
KingstonUnilink98 Kenwoods Circle, Kingston, ON, K7K 6Y2 CanadaTel 613 549 0404Fax 613 549 [email protected] Person: Derek V. ComplinPico Contact: Ms. Florence Tan
Multi Designs Company Limited 59.90 20.09 100.00 20.08 100.00 14.79 100.00
Total 20.09 100.00 20.08 100.00 14.79 100.00
Remark : 1. Income from the trade shows exhibition is recorded in the “Event Marketing Business“
2. Income from the permanent exhibition and museum exhibits is recorded in the“Knowledge Communication
Business”
Service Description
Event Marketing
The scope of business covers the marketing communication
for business provider in all areas of the business value-chain
such as:
• Product Owners
• Planner
• Trade Show Organizer, Event Owner
• Event Organizer, Show Managers
• Project realization and management
• Event Service Providers
Description of Services The company has 3 principal products:
1. Event Marketing
2. Knowledge Communication
3. Others
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Pico (Thailand) Public Company Limited 16
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PICO believes that social
is one of our responsibilities
to take care.
annual report 2006
Pico (Thailand) Public Company Limited 17
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Past projects in event marketing:
° Past projects
• Road Shows Chevrolet, Mercedes Benz, Jeep
and Ford Road shows for various products such as Chevrolet,
Mercedes Benz, Jeep and Ford in and outside of Bangkok.
• Product launch : Chevrolet Colorado Launch,
Chevy OK Day, Chevy Homecoming Day
• Road Shows for Thailand Elite Card for Tourism
Authority of Thailand in Taiwan and Korea
• 120 years anniversary for Electricity Generating
Authority of Thailand
• Bicentennial anniversary o the King Monkut’s
Institute of Technology, Ladkrabang.
• Design and construction of SUBARU pavilion
in the 22nd Thailand International Motor Expo 2005
• Pavilion construction for Heineken, Tiger Beer,
Cheers Beer in “Best of Nonthaburi” Festival 2005
• Thai Metalex 2005 of Siam-Fuchs Lubricants
Co., Ltd.
• Design and construction and decoration display
in the “OTOP” Premium and “Kitchen to the World 2005”
at the exhibition hall of the Department of External Trade
Promotion.
• ASEAN ENERGY BUSINESS FORUM 2004 at
World Trade Center Metro Manila, Philippines of PTT Public
Co., Ltd.
• Logistic & Supporting
As can be seen above our service is directed at the
business owner. This covers project planning, creative
concepts, project design, production and installation of the
event marketing for a particular merchandise. Logistic and
other supportive services are also provided. Critical to this
process is the objective of the event and the message/
information that the client wishes to convey to the
respective target. There are 4 principal models:
Business to Business (B to B) Event marketing between
those who are business operators. Example is trade show/
exhibition.
Business to Consumer (B to C) Event marketing between
business operator targeted at consumers such as product
launch, concerts/entertainment all of which is aimed at
creating and bolstering our customer’s relationship with the
consumers.
Government to Consumer (G to C) Event marketing
featuring communication between the government sector
and the public such as the public event on government’s
achievements.
Corporate Identity (CI) Even marketing designed to create
and bolster corporate image of a business such as a new
image launch.
Business value chain and direction
Planners
Trade show Organizers Event owners
Event organizers Show managers
Project Management
Venue & Facility Management
Event service providers
Logistic & supporting
Target groups
Incr
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Product Owners
annual report 2006
Pico (Thailand) Public Company Limited 18
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• Yaris Dealer Launching for DELPHI HAKUKODO
• Thailand Grand Invitation 2005 for Creative
Juice
• World Premier Ford – All New Ranger for FORD
• Annual meeting of National Science and
Technology Development Agency (NSTDA)
• Bangkok International Motor Show 2006 for
Ford / Isuzu / Volvo / THAIRUNG / CARIO
• Road show for Nokia (Thailand) in “Nokia on
Wheel” and “Nokia N-series road show”
• Commemorative Pavilion Exhibition Commemorating
The 60th Anniversary of His Majesty the King’s Accession to
the Throne for Boon Rawd Brewery Co., Ltd.
• In commemoration of H.M. the King’s 60th
anniversary accession to the throne, the design and
arrangement for graphic waterfall, self sufficiency economy
and the new theory display/exhibit and the history of the
Chakri dynasty.
Knowledge Communication
We provide services to the public and private sector
that need to communicate knowledge to the public in the
form of temporary exhibition, semi permanent exhibition,
permanent exhibition, visitor center, learning center and
museum.
Our service is built upon how to effectively deliver
the knowledge to the public. which means that, beside
premise design and construction and the realization of the
display, we are also responsible in creating the contents
of the learning program appropriate to the client’s role.
Here we need to focus on the audience or learner, the
appropriateness of the text with the goal that the audience
will gained an in-depth learning experience and be able to
use the knowledge gained to further his knowledge quest
to the fullest extent.
Our operation covers each step of the project’s
process from project outline, topic research, learning
program, exhibition design, production and the subsequent
museum management.
Our past projects in the knowledge communication
business are:
° Visitor and learning centers
• BLCP Visitor Center of the BLCP Power Plant
in the Mab Ta Phut Industrial estate, Rayong
• Design and installation of Electricity and the
Thai energy display for the National Science Museum
Organization.
• Historical archive of the Bangkok University’s Surat
Osathanugraha library. Ransit Campus
• Design and installation of inside display for
H.R.H. the Princess Mother’s archive for the Mae Fah Luang
foundation and the Tourism Authority of Thailand
• Design and construction in the exhibition hall of
the Securities Exchange of Thailand main building.
• Internal display of the children’s Museum for
Bangkok Metropolitan Administration, The science, nature
and the King sections.
• The prevention and action against narcotics display
for the Office of the Narcotics Control Board.
• Design and improvement for A Post Office at the
new Suvarnabhumi Airport
° Museum
• Renovation and interior decoration Arts and
Culture Hall for the eastern region, phase II at Burapha
University, Chonburi
• Design and decoration for a display center for
Isan folk knowledge for Ubonrachathani for Office of Small
and Medium Enterprises Promotion.
• Design and decoration of the sports museum for
the Sport Authority of Thailand
• Design for 5 storey building behind the Rama VII
museum of the Rama VII Institute at Larn Luang.
• District museum for 4 districts of Bangkok
depicting life in the community of Samphatawongse, Bangrak,
Bangkoknoi and Bangkhumthien.
• Project for the development of a historical park
and museum to commemorate the heroism of 2484
• Ramkhamhang Museum (Sukhothai) for the
Department of Fine Arts.
• Buddhism Museum, Buddha Monthon for the
National Buddhism Office.
• Rama VII Museum with display depicting life
and activities history of Rama VII at Rama VII Institute, Larn
Luang.
• Design and installation display for H.R.H. the
Princess Mother’s archive for the Mae Fah Luang foundation
and the Tourism Authority of Thailand
° Semi permanent exhibitions
• Design and decoration of the Asean Handicrafts
archive of the SUPPORT international division, Bang Sai.
• Internal display for visitors at Khao Yai National
Park, Sarika and Nang Rong waterfalls for the Parks and
Wildlife Department.
• Renovation and decoration for the library, club
house, technical display, control, graphic and “magic vision”
at the Armed Forces Preparatory School.
• Museum of the lignite mining in honor of King
RamaVII at Mae Moh Mine, Lampang.
annual report 2006
Pico (Thailand) Public Company Limited 19
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• “Natural Disasters” display for the Science Education
Office.
• “Time” display for the Science Center for
Education.
• “Man and his Environment” and “Life and the
stars” for the Science Center for Education.
• “Astronomy and Space” at the Science Park at
Wah Gore, Prachuap Kirikhan for the Ministry of Education.
• Royal Flora Ratchaphruek 2006 International
Horticultural Exposition for His Majesty the King, Chieng
Mai for Boon Rawd Brewery Co., Ltd.
• “Khao Khong Pho Ruam Palang Khao Khong
Phandin” for Department of Industrial Promotion
• National Science and Technology 2006 for
National Science Museum
Others
Beside the services mentioned we have other
services aimed at supporting and enhancing the customer’s
business.
• Rental of large air-conditioned tents from 1,000
sq.m. up to more than 20,000 sq.m. This serves to provide
additional temporary space to exhibition organizers or
large projects requiring significant covered space.
• Graphic design for signage and banner projects
used in advertising and/or public relation work.
• Furnishings to complement the merchandise
display to enhance sale such as display cabinets. These are
eye catching units placed in the exhibition booth to increase
sale in accordance with the target’s marketing plan
• Interior design of offices. Logo design of
organization.
Our past projects in this area of service are:
° Past works
• Erection of large tents at the Bangkok
International Motors Show 2001-2006 at BITEC.
• Erection of large tents for the World’s AIDS
conference 2004.
• Interior decoration of Siemens Retail Shop
• Various design of logos for financial institution
clients e.g. United Securities Public Co., Ltd.
• Lighted boxes and installation at designated spots
for “First Choice”.
• Provide various models and graphic work.
• Erection of tented traveling road shows for
Chevrolet nationwide.
• Interior design for retail banking of Land and
Houses Retail Bank Public Co., Ltd.
• Public Relations of Thailand Hotel Standard
2006
• Decoration of Dealer Shop for “ACER” nationwide
• Ford Road shows by “World Premium Ford”
û Customer Profile
Our customers are those with a track record of
consistent growth with an international aspiration. These are
state and/or state supported companies and private operation
which need to increase market awareness/penetration and
turnover. They are divided into 2 categories as follows:
1. State enterprise and other government agencies.
The public sector regularly conducts events to
publicize the workings of its units in order to increase
public awareness and understanding. This includes also the
promotional activities for government supported industries
aimed at sustaining the economic growth. The agencies
that are responsible for such activities are: the culture
ministry, the information and communication technology
ministry, science and technology ministry and the
department of export promotion.
2. The private sector:
≤ The automobile sector. This group emphasizes
event marketing as it provides a venue for the consumer to
make the decision immediately.
≤ The telecommunication sector. This is a
business characterized by high growth and intense competition
and pays a significant interest in the event marketing /
communication.
≤ The energy sector. This group has a record of
consistent growth and recognizes the importance of corporate
social responsibility. It regularly conducts activities aimed at
increasing the public understanding of its organizations.
≤ The financial institution sector. The retail
banking business is characterized by intense competition with
constantly changing marketing strategy to meet customer’s
demand. Event marketing is therefore the preferred choice
of communication for this industry.
≤ Other sectors. With the continued economic
growth the consumer product business also needs to
communicate more to meet the challenges of greater
competition e.g. the apparel industry and jewelry.
annual report 2006
Pico (Thailand) Public Company Limited 20
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û Our project management process
Our group of companies reach the customers
through:
≤ Direct solicitation. Subsequent to our internal
study of target customer’s performance or direct request by
customer, our marketing department will prepare a project
outline and budget as per client’s objective to be followed
by a presentation. If selected the project management team
will coordinate with client to proceed.
≤ Building and maintaining good customer
relationship, stressing on internationally accepted standard,
is key to building trust and satisfaction with customer. This
will result in consistent repeat business.
≤ Business alliances. Business alliances in the trade
organization and the branches of the event marketing industry
is a channel that provides a lead to customer.
≤ Referral business. With our 20 years in the
business and our past successes on international level
projects, our satisfied customers often refer others to us.
≤ With our Pico Far East affiliation and its
extensive network in 26 countries we have direct access to
various institutional names when they come to Thailand.
Project management process
The key steps in our project management process
are as follows:
û In marketing we begin with:
- A thorough research of customer’s product.
- Customer’s contact to learn of objectives desired
in the event.
- Identification of concepts and process.
û Design. This covers the design of the display
material, building and actual display. We will source the
most effective designer for the project. Actual display
design may be done by our subsidiary such as Multi Designs
Co., Ltd. or our associated companies like DesignLab MISC
Co., Ltd., turnkey display may be done by PX System while
graphic will be under Artcom Graphic Co., Ltd. To completely
meet customer’s expectation some work may be outsourced
to qualified specialist houses. Once completed a budget
will be tabled for presentation to customer.
û Construction. We will handle consruction for
the parts that we have the skill set and will outsource the
specialized works to qualified contractor under our strict
quality control to ensure compete compliance to plan.
Once done and duly inspected the works will be handed
over to customer.
ûManagement. Once completed we will form
a management team to run the show e.g. public relation
personnel in the show, training, rehearsal, janiforial services
and security. We will arrange and coordinate these
functions and assume responsibility until the show is
completed.
Work in Progress as at October 31, 2006
Undelivered works Total value (MB)
1. Event marketing 44
2. Knowledge communication 206
3. Others 52
Total 302
The contribution of these various groups to our business is as follows Income Portion
Business Group 2006 2005 Million Baht % Million Baht %
1. State enterprises / Government
2. Private sectors
- Automotive
- Telecommunication
- Energy
- Financial Institutions
- Food & Beverage
- Others
322
364
45
60
60
29
158
31.02
35.07
4.34
5.78
5.78
2.79
15.22
129
342
27
29
50
-
139
18.02
47.77
3.77
4.05
6.98
-
19.41
Total 1,038 100.00 716 100.00
annual report 2006
Pico (Thailand) Public Company Limited 21
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Mr. Silchai KiatpapanDirectorAge 50 yearsWork Experience1 Nov 2006 - Present Chief Executive Officer - Pico (Thailand) Public Co., Ltd.2003 - 31 Oct 2006 Chief Operating Officer - Pico (Thailand) Public Co., Ltd.1992 - present Director - Pico (Thailand) Public Co., Ltd.
Ms. Nitida ThamasoontraDirectorAge 45 yearsWork Experience2003 - present Chief Financial Officer - Pico (Thailand) Public Co., Ltd.1991 - present Director - Pico (Thailand) Public Co., Ltd.
Mr. Pised ChungyampinVice Chairman of the Board of DirectorsAge 52 yearsWork Experience1 Nov 2006 - present Vice Chairman and Chief Executive Officer - Pico (Thailand) Public Co., Ltd.2003 - 31 Oct 2006 Vice Chairman and Chief Executive Officer - Pico (Thailand) Public Co., Ltd.1992 - 2003 Director - Pico (Thailand) Public Co., Ltd.2001 - 2003 President - Trade Exhibition Association (Thai) (TEA)
Mr. Chia Song HengChairman of the Board of DirectorsAge 54 yearsWork Experience2003 - present Chairman of the Board of Directors and Vice chairman of the Executive Committee - Pico (Thailand) Public Co., Ltd. 2001 - present Director - Pico Far East Holding Pte Ltd.
1.
Mr. Chong Mang YongDirectorAge 50 yearsWork Experience2003 - present Director - Pico (Thailand) Public Co., Ltd.2000 - present Vice-President Finance, South Asia - Pico Art International Pte. Ltd.1995 - 2000 Group Financial Officer - United Motor Works International Pte. Ltd.
2.
3.
Board of DirectorsAs at 31, October 2006 of PICO (Thailand) Public Company Limited
4.
5.
annual report 2006
Pico (Thailand) Public Company Limited 22
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Board of DirectorsAs at 31, October 2006 of PICO (Thailand) Public Company Limited
Dr.ChaiyodBunyagidjIndependent DirectorAge 52 yearsWork Experience2003 - present Chairman of the Audit Committee and Independent Director - Pico (Thailand) Public Co., Ltd.1997 - present Vice President - Thailand Environment Institute (TEI)
Mrs. Sasitorn PhongsathornIndependent Director
Age 49 years
Work Experience
17 Nov 2005-present Audit Committee and Independent Director - Pico (Thailand) Public Co., Ltd.
19 Dec 2005-present President - Land and Houses Retail Bank Public Co., Ltd.
1 Jul 2005-18 Dec 2005 Vice President - Book Club Finance Public Co., Ltd.
2004 - 2005 President - United Securities Public Co., Ltd.
Mr. Sern VithespongseIndependent DirectorAge 53 yearsWork Experience2003 - present Audit Committee and Independent Director - Pico (Thailand) Public Co., Ltd.1992 - present Director - Palmer & Turner (Thailand) Co., Ltd.
Mr. Viriya PholpokeDirector and AdvisorAge 53 yearsWork Experience2 Sep 2005 - present Director and Advisor - Pico (Thailand) Public Co., Ltd.2003 -1 Sep 2005 Audit Committee and Independent Director - Pico (Thailand) Public Co., Ltd.
6.
7.
8.
9.
annual report 2006
Pico (Thailand) Public Company Limited 23
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Mrs. Sasitorn PhongsathornAudit Committee
Age 49 years
Work Experience
17 Nov 2005 - present Audit Committee - Pico (Thailand) Public Co., Ltd.
9 Dec 2005 - present President - Land and Houses Retail Bank Public Co., Ltd.
1 Jul 2005 - 18 Dec 2005 Vice President - Book Club Finance Public Co., Ltd.
2004 - 2005 President - United Securities Public Co., Ltd.
The Audit CommitteeAs at 31, October 2006 of PICO (Thailand) Public Company Limited
3.
annual report 2006
Pico (Thailand) Public Company Limited 24
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The Executive CommitteeAs at 31, October 2006 of PICO (Thailand) Public Company Limited
Mr. Chia Song HengVice chairman of the Executive Committee Age 54 yearsWork Experience2003 - present Chairman of the Board of Directors and Vice chairman of the Executive Committee - Pico (Thailand) Public Co., Ltd. 2001 - present Director - Pico Far East Holding Pte Ltd.
Mr. Chokchai VatcharanirunkulSenior Executive Vice President Event Marketing & Special ProjectAge 46 yearsWork Experience2001 - present Senior Executive Vice President Event Marketing & Special Project - Pico (Thailand) Public Co., Ltd.1995 - 2000 General Manager Event Marketing - Pico (Thailand) Public Co., Ltd.
Mr. Silchai KiatpapanChief Operating OfficerAge 50 yearsWork Experience1 Nov 2006 - Present Chief Executive Officer - Pico (Thailand) Public Co., Ltd.2003 - 31 Oct 06 Chief Operating Officer - Pico (Thailand) Public Co., Ltd.1992 - present Director - Pico (Thailand) Public Co., Ltd.
Ms. Nitida ThamasoontraChief Financial OfficerAge 45 yearsWork Experience2003 - present Chief Financial Officer - Pico (Thailand) Public Co., Ltd.1991 - present Director - Pico (Thailand) Public Co., Ltd.
2.
3.
4.
Mr. Pised ChungyampinChairman of the Executive CommitteeAge 52 yearsWork Experience1 Nov 2006-present Vice Chairman and Chief Executive Officer - Pico (Thailand) Public Co., Ltd.2003-31 Oct 2006 Vice Chairman and Chief Executive Officer - Pico (Thailand) Public Co., Ltd.1992-2003 Director - Pico (Thailand) Public Co., Ltd.2001 - 2003 President - Trade Exhibition Association (Thai) (TEA)
1.
5.
annual report 2006
Pico (Thailand) Public Company Limited 25
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The Executive CommitteeAs at 31, October 2006 of PICO (Thailand) Public Company Limited
Mr. Pornchai TangsunawanVice President Strategic Marketing
Age 39 years
Work Experience
2005 - present Vice President - Pico (Thailand) Public Co., Ltd.
2003 - 2004 Project Manager - The Shell Company of Thailand Limited & Mekong Cluster
1999 - 2003 Engineering Support Manager - The Shell Company of Thailand Limited &
The overall 2006 operation was affected by both external
and domestic events and developments. Some of these are
the continued fluctuating oil prices, bird flu and the
unpredictable U.S. economy with the resultant unsettled
interest and foreign exchange rates. The domestic
disturbances are the political tension, continued and
unresolved southern unrest and the severe flooding.
Despite these potentially adverse conditions we have
managed to come through with one of our best years ever
with total consolidated income at Baht 1,112 million and
net profit after taxes of Baht 71 million, an increase of
54% and 71% over the previous year.
Revenue from services rendered
The consolidated revenue from services for 2006
amounted to Baht 1,109 million, an increase of Baht
392 million or 55% over the previous year.
- The revenue from joint ventures totaled Baht 71
million. In 2006 we participated in joint ventures with Ek
Kha Thai Co., Ltd., Pico (Thailand) Public Co., Ltd. and
Bewcon Co., Ltd. These were for specific transactions for
the design and realization of display for the second
children museum which will be completed February 2007,
- The revenue from our traditional business grew by
Baht 322 million to total Baht 1,037 million (45%).
Increases came from all of our product segments such as
event marketing and knowledge communication and from
all customer segments both private and public sector such
as the automobile, telecommunication, energy and
financial institutions. The increased turnover is consistent
and evenly distributed. The quarterly turnover for the
current year is consistently higher than the corresponding
interval of the previous year.
• Event marketing revenue increased by 26% to
Baht 636 million.
annual report 2006
Pico (Thailand) Public Company Limited 50
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• Knowledge communication projects increased
by 130% to Baht 236 million.
• Other service income increased by 50% to Baht
165 million.
Gross Profit Margin
Our operating profit for the year is at 22.3% due
primarily to the changing in scope of services in both the
event marketing and knowledge communication.
Additionally the project size in monetary terms were
relatively high especially those from the public budget. Our
gross margin therefore is slightly lower due the changes
noted.
Selling and General Administrative expenses
The selling, general and administrative expenses increased
21% of turnover to Baht 156 million. Increases came
principally from organizational restructure, major office
renovation, substantial investment in human resource
development and the improvement in staff welfare and
benefits. These developments were undertaken to prepare
us for future growth and expansion. In connection with
the office renovation we have carefully examined the
existing and useable assets and wrote off Baht 2.8 million.
Net Income
Consolidated net profit amounted to Baht 71
million, an increase of Baht 29 million or 71% relative to
the previous year.
• Financial Standing
Assets
Consolidated assets of Baht 527 million consist of:
- Baht 116 in cash or 22% of total assets
representing an increase of 107%. This surplus will increase
the operational flexibility.
- Other current assets consist of short term
investments, trade receivables and accrued income
amounting to Baht 286 million or 54% of total assets. This
represents a 30% increase which is in line with the total
revenue growth and the recognition of income for works
completed.
- Long term assets consist of land, buildings,
equipments and other investments of Baht 125 million or
24% of total assets. The 34% increase in long term assets
is attributed mainly to the value of the major renovation
undertaken in 2006.
• Sources of Fund
The significant increase in revenue resulted in a
corresponding increase in trade receivables which was
financed internally by trade payables and equity with no
bank debt. Total liabilities of Baht 210 million consist
mostly of current obligations with only Baht 5 million in
long term obligation. Total shareholder’s equity amounts
to Baht 317 million resulting in the long term debt to
equity at a respectable 0.02 and overall leverage at 0.66
representing a slightly rise due to the revenue increase. The
operation continues to be very liquid with the current
position at 1.96.
Liquidity and cash generation
Internal cash generation continues to be strong and
consistent. Net operation generated cash improved by
Baht 28 million resulting from increased trade payables.
Non operating needs were office renovation (Baht
37 million), investment in associated companies (Baht
4 million) and dividend payment (Baht 39 million).
Net consolidated cash at year end 2006 was Baht 137
million consisting of Baht 116 million in cash and near
cash and Baht 21 million in short term investment in
government bonds.
Contingent liabilities
As of 31 October 2006 total bank guarantees
issued on our behalf by commercial banks amounted to
Baht 66.8 million or an increase of Baht 20.2 million. This is
as expected given the substantial increase in new and
larger projects acquired.
annual report 2006
Pico (Thailand) Public Company Limited 51
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Name / Office / Telephone No. / Fax. No.
Registrar Common Share Thailand Securities Depository Co., Ltd.
Preferred Share Capital Market Academy Building,
The Stock Exchange of Thailand
2/7 Moo 4, (North Park Project)
Vibhavadi-Rangsit Road, Km. 27,
Tung Song Hong, Laksi,
Bangkok 10210
Tel: (66-2) 596-9000
Fax : (66-2) 832-4994 to 4996
Auditor Mrs. Nachalee Boonyakarnkul
Certified Public Accountant (Thailand)
Registration No. 3126
Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd.
Rajanakarn Building, 25th Floor,
183 South Sathorn Road,
Yannawa, Sathorn, Bangkok 10120
Tel : (66-2) 676 5700
Fax : (66-2) 676 5757-8
Legal Advisor Dharmniti Law Office
4th floor, Nai Lert Tower,
2/4 Wireless Road,
Lumphini, Pathumwan,
Bangkok 10330
Tel : (66) 2252-1260
Fax : (66) 2252-1104
Financial Advisor - None -
Other References
annual report 2006
Pico (Thailand) Public Company Limited 52
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Intercompany Transactions
During the year transactions were made between affiliated companies with prices and charges levied
for merchandises sold and services rendered. The prices and charges constituted our normal business transaction with
subsidiaries, joint ventures and persons who may be seen as having conflicts of interest. The terms and conditions in these
transactions are in line with normal business transaction. These transactions are disclosed in the notes to financial
statements no 21 as of October 31, 2006. Details of transactions with affiliated companies and persons described above
are as follows:
Account Company Relationship
Transaction Value (Baht)
Remarks2006 2005
1 Nov 05 -31 Oct 06
1 Nov 04 -31 Oct 05
1) Revenues
from the
rendering
of services
Pico Art International Pte Ltd
Pico Art Exhibition Inc.
Pico International Taiwan Ltd
Pico International Ltd.
Pico International (M)
Sdn. Bhd.
Pico International (China) Limited
Pico (China) Ltd.
Pico Hong Kong Limited
Pico Australia Pty Ltd.
Pico Exhibition (UK) Ltd.
Pico International (HK) Ltd.
Meeting Planners International (HK) Ltd
Pico Chicago
U-Rent Company Limited
Joint Venture
Major Shareholder
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Associated Company
Joint Venture
4,945,942
17,664
2,316,391
-
181,673
1,091,519
-
-
137,383
1,258,016
1,947,620
-
936,027
1,549,772
37,988,052
3,133,989
73,666
-
2,596,583
269,579
2,053,528
1,430,841
721,957
-
714,860
2,411,732
296,800
-
255,703
-
Income f rom serv ice
provided to companies
with common majority
shareholders. This is due
to the policy to leverage
the extensive network of
the company to provide
an integrated service to
clients. Service charges
are computed on a cost
p lus bas is cons istent
with the method charged
others . The t ransac -
tions are therefore nor-
mal trade transactions
52,370,059 13,959,238
2) Trade
accounts
receivable
Pico Art International Pte Ltd
Pico Art Exhibition
Pico International (China) Limited
Pico International Taiwan Ltd
Pico International Ltd.
Pico (China) Ltd.
Meeting Planners International (HK) Ltd.
Pico International (M) Sdn. Bhd.
Pico Australia Pty Ltd.
Pico International (HK) Ltd.
U-Rent Company Limited
Major Shareholder
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Same Ultimate Holding Company
Associated Company
110,000
-
1,093,033
260,000
-
-
-
119,840
147,000
570,000
26,584
98,375
81,382
-
-
2,505,010
1,531,000
317,576
202,850
-
1,640,047
21,732
Trade receivables arose
f r o m t h e s e r v i c e s
provided to copan ies
w i t h i n t h e g r o u p
(deta i l s in 1) . Credit
t e r m s e x t e n d e d t o
copanies with common
majority shareholders
a ve rage 60 -90 day s
consistent with normal
trade transactions, normal
business terms. Therefore
these transactions are
normal trade transactions
2,326,457 6,397,972
annual report 2006
Pico (Thailand) Public Company Limited 53
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Account Company Relationship
Transaction Value(Baht)
Remarks2006 2005
1 Nov 05 -31 Oct 06
1 Nov 04 -31 Oct 05
3) Costs of the rendering of services
Pico Art International Pte LtdPico International Taiwan LtdPico International (M) Sdn. Bhd.Pico International (China) LimitedPico Atlanta Pte Ltd.Meeting Planners International (HK) Ltd.Pico International (HK) LtdInter-Expo Exhibition Services Ltd.U-Rent Company LimitedInkjet Images (Thailand) Co., Ltd.Designlab MISC Company Limited
Associated CompanyAssociated CompanyAssociated Company
--
327,859780,000819,65221,219
--
10,252,654964,690
7,552,000
1,369,829966,148333,846
---
246,2857,375
5,585,9511,182,900
-
Cost of serv ices ar i ses from services rendered by group companies. These are in accordance with the company’s agreement with affiliates to leverage the special ized expert ise of Pico’s group of companies to deliver an integrated service package to the customer. The company canslect on particular expertise of a PICO c o m p a n y w i t h i n t h e g roup . The t ransp i red transactions are therefore normal trade practice with s imi lar charges as with others outside the group.
20,718,074 9,692,334
4) Trade accounts
payable
Pico International (China) LimitedPico International (M) Sdn. Bhd.U-Rent Company LimitedInkjet Images (Thailand) Co., Ltd.Designlab MISC Company Limited
Same Ultimate Holding CompanySame Ultimate Holding Company
Associated CompanyAssociated CompanyAssociated Company
722,782110,635
1,197,440102,858
1,027,200
-333,846
1,117,76255,390
-
The trade payables are from the transactions for se r v i ce s desc r ibed in (3) both with affiliated companies and companies with common majority shareholders. Credit terms are 60-90 days consistent with market practice. The transact ions therefore constitute normal business
3,160,915 1,506,998
5) The gross amount due from customers for contract work
Pico International Taiwan LtdPico International (HK) LtdU-Rent Company Limited
Same Ultimate Holding CompanySame Ultimate Holding Company
Associated Company
24,95098,598
-
--
500
This represents the amount for services rendered and income recognized as per progress of work without invoicing to the client. Once the project is completed as per contract invoice will be issued and this transaction will revert to trade receivables with credit terms as in (2)
123,548 500
6) Accrued Cost Pico International (China) Limited.U-Rent Company Limited
Same Ultimate Holding CompanyAssociated Company
38,744173,900
-219,772
This represents an amount due to affiliated companies for services received but not in receipt of invoice as of the account closing date. On receipt of invoice the amount will be booked as trade payables with credit terms as in (4).
212,644 219,772
annual report 2006
Pico (Thailand) Public Company Limited 54
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Account Company Relationship
Transaction Value (Baht)
Remarks2006 2005
1 Nov 05 - 31 Oct 06
1 Nov 04 - 31 Oct 05
7) Amounts due to related parties
Pico Art International Pte Ltd.Pico Global Services Limited
Major ShareholderSame Ultimate Holding Company
11,681,64138,440
4,508,55027,398
T h e c o m p a n y o w e s P ico Art Internat ional Pte. and Pico group of companies a management f e e p e r ( 1 0 ) , m e d i a charges and marketing materials. These charges are considered normal business transactions. The policy for intercompany transaction is that market pricing is charged.
11,720,081 4,535,948
8) Dividend income U-Rent Company Limited
Associated Company
- 337,500 In 2005 Px Company which is our subsidiary received a dividend payment from U Rent Co., Ltd. No dividend payment is made this year.
- 337,500
9) Amounts due from related
parties
Pico Art International Pte Ltd.Pico Global Services LimitedU-Rent Company Limited
Major ShareholderSame Ultimate Holding Company
Associated Company
257,335-
13,600
-2,564
17,848
This represents services rendered to companies in Pico Network and our subsidiaries consisting of advances in payment of utilities. 60-90 days are given which is considered normal trade transaction.
270,935 20,412
10) Management fee (Expenses)
Pico Art International Pte Ltd. Major Shareholder
22,745,446 15,493,753 This represents management fee accord ing to the I n t e l l e c t u a l P ro p e r t y License Agreement and Offshore Services Agreement. 2.53% of revenue is paid for trade and copyrights related to Pico Art. The fee covers cooperation and assistance from Pico Art in technology, training and personnel development and marketing cooperation.
22,745,446 15,493,753
11) Other income Pico Art International Pte Ltd.Pico Global Services LimitedU-Rent Company Limited
Major ShareholderSame Ultimate Holding Company
Associated Company
-47,667
486,261
110,642-
648,348
Rental income for space leased to U Rent Co., Ltd. at rates consistent with market. Income received from Pico Global Serviecs was for meeting conference at rate which is consistent with Pico Global Services payment to other subsidiaries.
533,928 758,990
annual report 2006
Pico (Thailand) Public Company Limited 55
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Account Company Relationship
Transaction Value (Baht)
Remarks2006 2005
1 Nov 05 - 31 Oct 06
1 Nov 04 - 31 Oct 05
12) Dividends Pico Art International Pte Ltd.Directors
Major ShareholderDirectors
12,707,50010,724,519
21,496,66719,854,359
The company paid dividends to major shareholders, P ico Art Internat ional and directors: Mr. Pised, Mr. Silchai, and Miss Nitida in amount of Baht 12,707,500, Baht 9,973,266.92, Baht 435,027.96 and Baht 316,223.80 respectively. This payment is consistent with rate paid to other shareholders.
23,432,019 41,351,026
13) Other expenses Pico Art International Pte Ltd.Pico International Ltd.Pico Global Services Limited
Major ShareholderSame Ultimate Holding CompanySame Ultimate Holding Company
476,488-
189,517
152,22390,239
245,434
Payments were made to several companies within the Pico group for items such as office supplies w i th “P i co Network” heading, insurance for works performed. These payments are considered normal business transactions and the charges are similar to amounts paid by all Pico companies worldwide.
666,005 487,896
14) Directors’ remuneration
Directors Director
4,400,000 4,000,000 Compensation was made to directors in accordance with the shareholders’ resolution.
15) Short – term loan to a related party
Joint Venture Joint Venture
5,054,915 - A d v a n c e s m a d e a n d considered normal business transaction.
16) Other current asset
Joint Venture Joint Venture 4,064,722 - Retention deducted by the joint venture on each progress payment received similar to retention deducted by other customers.
17) The gross amount due to customers for contract work
Pico Australia Pty Ltd. Same Ultimate Holding Company 136,796 - Advance payment received for works to be completed. This is normal trade transaction where advance payment is made as a condition of the contract.
18) Deposits received from customers
Joint Venture Joint Venture 925,415 - Deduction made on prog-ress payment by the joint venture to l iquidate the advance payment received. Considered normal trade practice
annual report 2006
Pico (Thailand) Public Company Limited 56
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Account Company Relationship
Transaction Value (Baht)
Remarks2006 2005
1 Nov 05 - 31 Oct 06
1 Nov 04 -31 Oct 05
19) Investments using the equity method
U-Rent Company LimitedBec – Tero Exhibition Co.,LtdDesignlab MISC Company LimitedIbrix Company LimitedInkjet Images (Thailand) Co., Ltd
Associated CompanyAssociated CompanyAssociated CompanyAssociated CompanyAssociated Company
2,316,743366,906487,543
2,212,6554,884,319
1,560,155---
4,047,477
Pico invested in Inkjet Images (Thailand) Co., Ltd., Bec-Tero Exhibition Co., Ltd., Designlab MISC Company Limited And Ibrix Company Limited at 22.22%, 39%, 20 and 40 respectively. PX System invested in U-Rent at 22.5% Pico (Thailand) Plc. and PX System Co., Ltd. recorded the investment at net book value which is deemed to represent a fair value.
10,268,166 5,607,602
20) Share of profits from investments using the equity method
U-Rent Company LimitedInkjet Images (Thailand) Co., LtdBec - Tero Exhibition Co., LtdDesignlab MISC Company LimitedIbrix Company Limited
Associated CompanyAssociated CompanyAssociated CompanyAssociated CompanyAssociated Company
756,588836,872
(1,583,073)87,643
212,855
585,813(142,938)
---
Pico invested in Inkjet Images (Thailand) Co., Ltd., Bec - Tero Exhibition Co., Ltd., Designlab MISC Company Limited. And Ibrix Company Limited at 22.22%, 39%, 20 and 40 respectively. PX System invested in U-Rent at 22.5% Pico (Thailand) Plc. and PX System Co., Ltd. recorded the investment at net book value which is deemed to represent a fair value.
310,885 442,875
* The company is an indirect shareholder of U - Rent Co., Ltd. through PX System Co., Ltd. at 22.5% of total.
• Procedures for approval of intercompany transactions.
The policy for approval of intercompany
for deliberation by independent directors and final approval
by the Board of Directors during
which directors with vested interest shall abstain from
voting.
• Trend for future intercompany transaction
In the past, as a limited liability company, Pico was
subject to regulations concerning intercompany
transactions, as is the case with a public company. There
were transactions that management was involved in the
approval process with related companies and individuals
related to intellectual property rights, which were
considered normal business transactions. In the conduct
of these transactions the maximum benefits to the
company was of primary concern.
It is expected that such transaction with related
such as sale or purchases with credit terms extended or
received will continue in a normal course
of business. These transactions with related individuals will
be screened by independent directors to ensure that they
are consistent with normal trade transaction. The company
will strictly follow the relevant SET announcements with
no person with vested interest taking part in the approval
process of such transaction.
annual report 2006
Pico (Thailand) Public Company Limited 57
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Report of The Independent Certified Public Accountants
REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORSPICO (THAILAND) PUBLIC COMPANY LIMITED
We have audited the consolidated balance sheet of Pico (Thailand) Public Company Limited and its subsidiaries and the balance sheet of Pico (Thailand) Public Company Limited as at October 31, 2006, and the related consolidated and Company’s statements of income, changes in shareholders’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements for the year ended October 31, 2005, presented herein for comparison, have been audited by another auditor of the same firm whose audit report thereon dated November 23, 2005 stated that nothing had come to her attention that caused her to believe that the financial statements were not presented fairly, in all material respects, in accordance with generally accepted accounting principles.We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the aforementioned consolidated and Company’s financial statements present fairly, in all material respects, the financial position of Pico (Thailand) Public Company Limited and its subsidiaries and of Pico (Thailand) Public Company Limited as at October 31, 2006, and the results of its operations and its cash flows for the year then ended in accordance with generally accepted accounting principles.
Nachalee Boonyakarnkul Certified Public Accountant (Thailand)
Balance Sheets As at October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2006 2005 2006 2005ASSETS
CURRENT ASSETSCash and cash equivalents 115,637,608 55,668,650 91,093,563 28,237,875Cash and cash equivalents - Joint Venture 432,776 - - -Current investments (Note 5) 20,595,547 76,466,796 20,126,097 75,013,902Trade accounts receivable, net (Note 6) 118,312,310 110,500,032 107,847,671 91,190,060Amounts due from related parties (Note 21) 270,935 20,412 619,268 701,371Short-term loan to a related party (Notes 7 and 21) 5,054,915 - 8,424,859 -Inventories 367,213 271,410 367,213 271,410Other current assets
The gross amount due from customers for contract work (Notes 8 and 21) 83,156,895 73,197,392 78,871,579 69,252,694Deposits at banks used as collateral - Joint Venture 4,920,000 - - -Others (Note 21) 43,147,667 20,363,708 43,610,511 18,306,705Others - Joint Venture 9,880,342 - - -Total Current Assets 401,776,208 336,488,400 350,960,761 282,974,017
NON - CURRENT ASSETSDeposits at banks used as collateral (Note 9) 810,000 810,000 - -Investments using the equity method
(Notes 10 and 21) 10,268,166 5,607,602 41,040,503 33,318,525Other long-term investments 1,210,000 930,000 - -Property, plant and equipment, net (Notes 11 and 21) 109,169,459 82,508,458 91,990,559 72,726,451Intangible assets, net (Note 12) 2,639,960 1,587,897 2,400,540 1,492,523Other non-current assets 1,459,491 1,304,536 1,409,491 1,304,536
Total Non - Current Assets 125,557,076 92,748,493 136,841,093 108,842,035TOTAL ASSETS 527,333,284 429,236,893 487,801,854 391,816,052
Notes to the financial statements form an integral part of these statements
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
AS AT OCTOBER 31, 2006 AND 2005
CONSOLIDATED THE COMPANY ONLY
BALANCE SHEETS
BAHT
annual report 2006
Pico (Thailand) Public Company Limited 59
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Balance Sheets (Continued) As at October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2006 2005 2006 2005LIABILITIES AND SHAREHOLDERS’ EQUITYCURRENT LIABILITIES
Trade accounts payable (Note 14) 107,745,536 82,543,547 99,589,733 68,603,618Short-term loan from a related party
- Joint Venture 1,550,056 - - -Current portion of obligations under
hire-purchase agreements (Note 16) 2,214,478 1,830,527 2,198,654 1,830,527Amounts due to related parties (Note 21) 11,720,081 4,535,948 11,720,081 4,573,398Amount due to a related party - Joint Venture 974,496 - - -Other current liabilities
Accrued expenses 33,644,576 24,626,130 28,634,869 17,327,515The gross amount due to customers
for contract work (Notes 15 and 21) 5,483,446 9,144,461 1,821,218 5,454,800Deposits received from customers (Note 21) 7,433,673 643,658 8,050,616 643,658Others 26,519,444 17,386,471 22,939,931 13,821,075Others - Joint Venture 7,186,669 - - -
Total Current Liabilities 204,472,455 140,710,742 174,955,102 112,254,591
NON - CURRENT LIABILITIESObligations under hire-purchase agreements
(Note 16) 5,289,535 4,157,986 5,289,535 4,157,986Total Non - Current Liabilities 5,289,535 4,157,986 5,289,535 4,157,986
TOTAL LIABILITIES 209,761,990 144,868,728 180,244,637 116,412,577
BAHT
CONSOLIDATED THE COMPANY ONLY
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS (CONTINUED)
AS AT OCTOBER 31, 2006 AND 2005
Notes to the financial statements form an integral part of these statements
annual report 2006
Pico (Thailand) Public Company Limited 60
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Balance Sheets (Continued) As at October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2006 2005 2006 2005LIABILITIES AND SHAREHOLDERS’ EQUITY (CONTINUED)SHAREHOLDERS’ EQUITYSHARE CAPITAL (Note 17)
Registered share capital 330,000 preferred shares of Baht 1 each 330,000 330,000 330,000 330,000114,670,000 ordinary shares of Baht 1 each 114,670,000 114,670,000 114,670,000 114,670,000
115,000,000 115,000,000 115,000,000 115,000,000Issued and paid-up share capital
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (Note 17) SHARES 114,669,980 114,669,980 114,669,980 114,669,980
Notes to the financial statements form an integral part of these statements
Revenues from the rendering of services (Note 21)
THE COMPANY ONLYCONSOLIDATED
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF INCOME
FOR THE YEARS ENDED OCTOBER 31, 2006 AND 2005BAHT
Balance Sheets (Continued) As at October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
annual report 2006
Pico (Thailand) Public Company Limited 62
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Co
nso
lidat
ed S
tate
men
ts o
f C
han
ges
in S
har
eho
lder
s’ E
qu
ity
Fo
r Th
e Ye
ars
End
ed O
cto
ber
31
, 2
00
6 a
nd
20
05
PI
CO
(TH
AIL
AN
D)
PUB
LIC
CO
MPA
NY
LIM
ITED
AN
D S
UB
SID
IAR
IES
Premi
um on
Land
reval
uation
Mi
nority
To
talsha
re cap
ital
surplu
sAp
propri
ated
Unapp
ropria
tedint
erest
shareh
olders
'Pre
ferred
Or
dinary
Or
dinary
Legal
reser
veequ
itysha
ressha
ressha
res
Begin
ning b
alance
, Nove
mber 1
, 2004
330,00
0
64,670
,000
101
,250,0
00
9,217,
379
5,0
65,476
56,124
,057
7,3
28,867
243
,985,7
79Iss
uance
of ord
inary
shares
(Note
17)
-49,
999,98
0
--
--
-49,
999,98
0La
nd rev
aluatio
n surp
lus (N
ote 11
)-
--
18,700
,000
-
--
18,700
,000
Legal
reserv
e (No
te 18)
--
--
2,085,
102
(2,
085,10
2)
--
Divide
nds de
clared
(Note
19)
--
--
-(71
,655,4
62)
(1,001
,000)
(72
,656,4
62)Ne
t incom
e-
--
--
41,702
,045
2,6
36,823
44,
338,86
8En
ding b
alance
, Octo
ber 31
, 2005
330,00
0
114,66
9,980
101
,250,0
00
27,917
,379
7,1
50,578
24,085
,538
8,9
64,690
284
,368,1
65
Begin
ning b
alance
, Nove
mber 1
, 2005
330,00
0
114,66
9,980
101
,250,0
00
27,917
,379
7,1
50,578
24,085
,538
8,9
64,690
284
,368,1
65Le
gal res
erve (
Note 1
8)-
--
-3,5
62,683
(3,562
,683)
-
-Div
idends
decla
red (N
ote 19
)-
--
--
(39,09
9,908)
(1,
501,50
0)
(40,60
1,408)
Net in
come
--
--
-71,
253,65
0
2,550,
887
73,804
,537
Endin
g bala
nce, O
ctober
31, 20
06330
,000
114
,669,9
80
101,25
0,000
27,
917,37
9
10,713
,261
52,
676,59
7
10,014
,077
317
,571,2
94
PICO
(THAI
LAND
) PUB
LIC C
OMPA
NY L
IMITE
D AN
D SU
BSID
IARI
ESCO
NSOL
IDAT
ED ST
ATEM
ENTS
OF
CHAN
GES I
N SH
AREH
OLDE
RS' E
QUITY
FO
R TH
E YE
ARS E
NDED
OCT
OBER
31, 2
006 AN
D 2005
BAHT
Issued
and p
aid-up
share
capita
l
Notes
to th
e finan
cial st
ateme
nts fo
rm an
integ
ral pa
rt of th
ese sta
tement
s
Retai
ned Ea
rnings
annual report 2006
Pico (Thailand) Public Company Limited 63
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The
Co
mp
any’
s St
atem
ents
of
Ch
ang
es in
Sh
areh
old
ers’
Eq
uit
y
For
The
Year
s En
ded
Oct
ob
er 3
1,
20
06
an
d 2
00
5
PIC
O (
THA
ILA
ND
) PU
BLI
C C
OM
PAN
Y L
IMIT
ED A
ND
SU
BSI
DIA
RIE
S
Premi
um on
Land
reval
uation
To
talsha
re cap
ital
surplu
sAp
propri
ated
Unapp
ropria
tedsha
rehold
ers'
Prefer
red
Ordin
ary
Ordin
aryLe
gal re
serve
equity
shares
shares
shares
Begin
ning b
alance
, Nove
mber 1
, 2004
330,00
0
64,
670,00
0
101,25
0,000
9,2
17,379
5,065,
476
56,
124,05
7
236
,656,9
12Iss
uance
of ord
inary
shares
(Note
17)
-49,
999,98
0
--
--
49,999
,980
Land
revalu
ation s
urplus
(Note
11)
--
-18,
700,00
0
--
18,700
,000
Legal
reserv
e (Note
18)
--
--
2,085,
102
(2,
085,10
2)
-
Divide
nds de
clared
(Note
19)
--
--
-(71
,655,4
62)
(71
,655,4
62)Ne
t incom
e-
--
--
41,702
,045
41,702
,045
Endin
g bala
nce, O
ctober
31, 20
05330
,000
114,66
9,980
101
,250,0
00
27,917
,379
7,1
50,578
24,085
,538
275,40
3,475
Begin
ning b
alance
, Nove
mber 1
, 2005
330,00
0
114
,669,9
80
101,25
0,000
27,
917,37
9
7,150,
578
24,
085,53
8
275
,403,4
75Le
gal res
erve (N
ote 18
)-
--
-3,5
62,683
(3,562
,683)
-Div
idends
decla
red (N
ote 19
)-
--
--
(39,09
9,908)
(39,09
9,908)
Net in
come
--
--
-71,
253,65
0
71,
253,65
0En
ding b
alance
, Octo
ber 31
, 2006
330,00
0
114
,669,9
80
101,25
0,000
27,
917,37
9
10,713
,261
52,
676,59
7
307
,557,2
17
Issued
and p
aid-up
share
capita
l
Notes
to th
e finan
cial st
ateme
nts fo
rm an
integ
ral pa
rt of th
ese sta
tement
s
Retai
ned Ea
rnings
PICO
(THAI
LAND
) PUB
LIC C
OMPA
NY L
IMITE
DTH
E CO
MPAN
Y 'S S
TATE
MENT
S OF
CHAN
GES I
N SH
AREH
OLDE
RS' E
QUITY
FOR
THE
YEAR
S END
ED O
CTOB
ER 31
, 2006
AND
2005
BAHT
annual report 2006
Pico (Thailand) Public Company Limited 64
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Statements of Cash Flows For The Years Ended October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2006 2005 2006 2005CASH FLOWS FROM OPERATING ACTIVITIESNet income 71,253,650 41,702,045 71,253,650 41,702,045Items to reconcile net income to net cash flows from
operating activities:Depreciation and amortization of intangible assets 14,495,481 11,776,063 8,108,854 6,348,792Doubtful accounts and bad debt 655,546 1,406,632 228,200 702,146Gain on sale of fixed assets (906,977) (1,020,488) (960,073) (262,565)Loss on writing off of fixed assets 2,630,617 309,507 2,611,858 288,284Unrealized gains on exchange rate (22,020) (17,817) (23,323) -Dividends received from investments
using the equity method - 337,500 4,498,500 6,302,800Share of profits from investments
using the equity method (310,885) (442,875) (7,710,799) (10,102,938)Net income of minority interest 2,550,887 2,636,823 - -
Income from operations before changes in operatingassets and liabilities 90,346,299 56,687,390 78,006,867 44,978,564
Operating assets (increase) decreaseTrade accounts receivable (8,471,474) (12,402,637) (16,888,156) (11,992,341)Amounts due from related parties (250,523) 60,496 82,103 5,139Inventories (95,803) 284,834 (95,803) 284,834The gross amount due from customers for
contract work (9,959,502) 13,982,466 (9,618,884) 16,460,700Other current assets (22,770,415) (6,267,855) (25,303,807) (5,693,049)Other current assets - Joint Venture (9,880,342) - - -Other non - current assets (154,955) 519,342 (104,955) 475,811
52,864,036 26,077,365 44,519,658
THE COMPANY ONLYCONSOLIDATED
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED OCTOBER 31, 2006 AND 2005BAHT
Notes to the financial statements form an integral part of these statements
annual report 2006
Pico (Thailand) Public Company Limited 65
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Statements of Cash Flows (Continued) For The Years Ended October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2006 2005 2006 2005CASH FLOWS FROM OPERATING ACTIVITIES(CONTINUED)
Operating liabilities increase (decrease)Trade accounts payable 25,223,927 13,106,389 31,008,053 10,096,385Amounts due to related parties 7,187,864 (2,606,404) 7,150,414 (2,562,924)Amount due to a related party - Joint Venture 974,496 - - -Accrued expenses 9,018,446 1,482,915 11,307,354 (777,842)The gross amount due to customers for contract work (3,661,015) 3,448,065 (3,633,583) 3,550,035Deposits received from customers 6,790,015 611,900 7,406,958 611,900Other current liabilities 6,065,056 1,171,610 6,283,771 1,862,599Other current liabilities - Joint Venture 7,186,669 - - -
Net cash provided by operating activities 97,548,743 70,078,511 85,600,332 57,299,811
CASH FLOWS FROM INVESTING ACTIVITIESCash received from deposit at bank used as collateral - 2,000,000 - 2,000,000Cash payment from deposits at banks used as collateral
- Joint Venture (4,920,000) - - -Cash payment for purchases of fixed assets (37,104,391) (10,645,213) (23,553,048) (7,871,612)Cash payment for purchase of intangible assets (408,862) (328,303) (237,472) (324,676)Cash payment for capital investment in Joint Venture - - (160,000) -Purchase of investments in associated companies (4,349,680) - (4,349,680) -Purchase of investment in other companies (280,000) (450,000) - -Short-term loan to a related company (5,054,915) - (8,424,859) -Proceeds from short-term loan to a related parties - - - 300,000Cash received from sale of fixed assets 1,068,442 1,992,248 1,049,842 805,572
Net cash used in investing activities (51,049,406) (7,431,268) (35,675,217) (5,090,716)
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED OCTOBER 31, 2006 AND 2005BAHT
Notes to the financial statements form an integral part of these statements
CONSOLIDATED THE COMPANY ONLY
annual report 2006
Pico (Thailand) Public Company Limited 66
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Statements of Cash Flows (Continued) For The Years Ended October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
2006 2005 2006 2005CASH FLOWS FROM FINANCING ACTIVITIES
Cash payment for obligations under hire-purchase agreements (2,917,500) (1,792,505) (2,857,324) (1,792,505)
Dividends paid (39,099,908) (21,655,482) (39,099,908) (21,655,482)Dividends of subsidiaries paid to minority shareholders (1,501,500) (2,307,200) - -Short-term loan from a related company - Joint Venture 1,550,056 - - -
Net cash used in financing activities (41,968,852) (25,755,187) (41,957,232) (23,447,987)
Net increase in cash and cash equivalents 4,530,485 36,892,056 7,967,883 28,761,108Cash and cash equivalents balance as at beginning 132,135,446 95,243,390 103,251,777 74,490,669Cash and cash equivalents balance as at ending (Note 4.2) 136,665,931 132,135,446 111,219,660 103,251,777
Notes to the financial statements form an integral part of these statements
CONSOLIDATED THE COMPANY ONLY
BAHTFOR THE YEARS ENDED OCTOBER 31, 2006 AND 2005
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED)
annual report 2006
Pico (Thailand) Public Company Limited 67
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Notes to the Consolidated and Company Financial Statements For The Years Ended October 31, 2006 and 2005 PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES
PICO (THAILAND) PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS FOR THE YEARS ENDED OCTOBER 31, 2006 AND 2005
1. OPERATIONS OF THE COMPANY AND SUBSIDIARIES
Pico (Thailand) Public Company Limited and subsidiaries are companies registered in Thailand. The information of business, locations and number of employees of the Company and subsidiaries as at October 31, are as follows:
Name Registered date Business type Location* Number of Employees
2006 2005 Pico (Thailand) Public March 27, 1992 Design and fabrication of exhibition 10 Soi Lasalle 56 98 94
Company Limited booths for trade exhibition organizers, Sukhumvit Rd., company showrooms and shop Kwang Bangna, counters, interiors for museums, theme Khet Bangna,
park and visitor centers Bangkok Subsidiaries PX System February 23, 1995 Rental of equipment and contractor on 10 Soi Lasalle 56 21 18
Company Limited the trade exhibition standard booths Sukhumvit Rd., Kwang Bangna, Khet Bangna, Bangkok
Artcom Graphic March 12, 1996 Graphic banner and inkjet printing 10 Soi Lasalle 56 19 20 Company Limited design Sukhumvit Rd.,
Kwang Bangna, Khet Bangna,
Bangkok Multi Designs April 19, 1995 Trade exhibition and interior design 10 Soi Lasalle 56 11 8
Company Limited Sukhumvit Rd., Kwang Bangna, Khet Bangna, Bangkok
The major shareholder of Pico (Thailand) Public Company Limited is Pico Art International Pte Ltd which was incorporated in Singapore. The Company became listed on the Market for Alternative Investment on April 20, 2004. For the year ended October 31, 2006, staff costs of the Company and subsidiaries in the consolidated and the Company’s financial statements are approximately Baht 106.01 million and Baht 84.99 million, respectively and for the year ended October 31, 2005 the staff costs of the Company and subsidiaries in the consolidated and the Company’s financial statements are Baht 82.65 million and Baht 62.71 million, respectively.* On May 8, 2006, the Company and subsidiaries changed their addresses from 39/4 Moo 9 Soi
Sukhumvit 105 (Lasalle 56) Sukhumvit Rd., Kwang Bangna, Khet Bangna, Bangkok, to 10 Soi Lasalle 56 Sukhumvit Rd., Kwang Bangna, Khet Bangna, Bangkok, commencing on May 8, 2006 onward.
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annual report 2006
Pico (Thailand) Public Company Limited 68
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2. BASIS FOR PREPARATION OF THE CONSOLIDATED AND COMPANY’S FINANACIAL STATEMENTS
2.1 The statutory financial statements are prepared in the Thai language in accordance with accounting standards and practices generally accepted in Thailand. The financial statements are shown in accordance with the Notification of the Department of Commercial Registration (currently the Department of Business Development) dated September 14, 2001 regarding “The Brief Particulars in the Financial Statements B.E. 2544”.
2.2 The consolidated financial statements include the accounts of Pico (Thailand) Public Company Limited, three subsidiaries and Joint Venture (applied proportionate consolidation) by eliminating significant balances and business transactions with such parties. The portions of the Company’s ownership as at October 31, 2006 and 2005 are as follows:
% of ownership Subsidiary companies
PX System Company Limited 89.95 Artcom Graphic Company Limited 60.00 Multi Designs Company Limited 59.90
Joint Venture % of proportion Joint Venture of Ekca Thai Co., Ltd, Pico (Thailand) Pcl.
and Bewcon Co., Ltd. 40.00
3. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies are summarized below: 3.1 Allowance for doubtful accounts
Allowance for doubtful accounts is provided at the estimated collection losses on receivables, based on the Company’s collection experience together with a review of the financial position of each debtor.
3.2 Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method.
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3.3 Investments in subsidiaries, associated companies, Joint Venture and other companies Investments in subsidiary and associated companies are presented by the equity method except in the case an impairment in value of investment has occurred, the resultant loss is recognized in the statement of income.
Interests in Joint Venture included in the Company’s financial statements is accounted for by equity method. Investments in other companies are general investments which are stated at cost. Debt securities held-to-maturity are stated at the amortized cost. The difference of net book value at the date of acquisition being over or under cost of investments has been recognized as income or expense in the statement of income. Management believes that the net book value at the acquisition date approximates to the fair value of investments.
3.4 Property, plant and equipment Land is stated at the appraised value. Plant and equipment are stated at cost, net of accumulated depreciation.Depreciation is computed by the straight-line method, based on the estimated useful lives of the assets as follows:
Buildings and building improvement 20 years Operating equipment 2.5 - 5 years Others 3 - 5 years
Where the carrying amount of an asset is greater than its recoverable amount, it is written down immediately to its recoverable amount. The recoverable amount is the higher of the anticipated discounted cash flows from the continuing use of the assets and the amount obtainable from the sale of the assets less any costs of disposal.Increases in carrying amount arising on land revaluation are credited to land revaluation surplus in shareholders’ equity. Where the carrying amount of land is greater than the revalued amount, it is written down in the statement of income. Revaluation decreases are charged against the related revaluation surplus in respect of the same land to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of such land; decreases in excess of that amount are charged to the statement of income. The Company has a policy for revaluation of land used in operations every 5 years by the independent appraisers.
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3.5 Intangible assets Intangible assets consisting of computer software and patent are stated at cost, net of accumulated amortization.Amortization is calculated by the straight-line method, based on the estimated useful lives of the assets as 5-10 years.
3.6 Long-term lease a) Operating lease
Lease in which substantially all the risks and rewards of ownership of assets remain with the lessor are accounted for as operating lease. Rentals applicable to such operating leases are charged to the statement of income over the lease term.
b) Finance lease Finance lease are the leases in which substantially all the risks and rewards of ownership other than legal title are transferred to the Company. At inception, the fair value of the leased assets is recorded together with the obligations after netting deferred interest. The leased assets are depreciated using the straight-line method over their estimated useful lives. Interest, finance charge, or depreciation are recognized in the statement of income.
3.7 Foreign currency transactions Transactions denominated in foreign currencies incurred during the year are translated into Baht at the rates of exchange prevailing at the transaction dates. All balances of monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Baht at the exchange rates announced by the Bank of Thailand at that date. Gains or losses on foreign exchange arising on settlements and translation are recognized as income or expense in the statement of income as incurred.
3.8 Recognition of revenues Service income is recognized by the percentage of completion method. The percentage of completion is measured by the proportion of actual costs incurred up to the end of the year and the total anticipated cost to be incurred to completion.
3.9 Provident fund The Company has a provident fund for those employees who have indicated their willingness to join. The contributions from the employees are deducted from their monthly salaries, with the Company matching the individuals’ contributions. The provident fund is managed by a financial institution which is authorized by the Government in accordance with the Provident Fund Act B.E. 2530 (1987). The contribution for employee provident fund is recorded as expenses when incurred.
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Pico (Thailand) Public Company Limited 71
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3.10 Income tax expense Income tax expense, if any, is based on tax paid and accrued for the year.
3.11 Basic earnings per share Basic earnings per share are calculated by dividing net income for the year after cash dividend or dividend which has been declared for preferred shares, by the weighted average number of ordinary shares outstanding during the year.
3.12 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and liabilities. Actual results may differ from those estimates.
4. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND CASH EQUIVALENTS
4.1 Cash paid for interest and income tax for the years ended October 31, are as follows: Baht
4.2 Cash and cash equivalents consist of cash in hand and all types of deposits at financial institutions with original maturities of three months or less and excluding deposits at financial institutions used as collateral as at October 31, are as follows:
BahtCONSOLIDATED THE COMPANY ONLY
2006 2005 2006 2005
Cash and deposits at financial institutions 115,637,608 55,668,650 91,093,563 28,237,875Cash and deposits at financial institutions -
Land revaluation surplus brought forward 27,917,379 9,217,379 27,917,379 9,217,379
Increasing in land valuation for the year - 18,700,000 - 18,700,000
Land revaluation surplus carried forward 27,917,379 27,917,379 27,917,379 27,917,379
4.3.3 Dividend payable Baht
CONSOLIDATED THE COMPANY ONLY 2006 2005 2006 2005
Dividend payable brought forward - 1,306,200 - - Dividends declared for the year
(Note 19) 40,601,408 72,656,462 39,099,908 71,655,462 Less Cash payments for dividends (40,601,408) (23,962,682) (39,099,908) (21,655,482)
Stock dividend - (49,999,980) - (49,999,980) Liabilities recorded (included in
other current liabilities) - - - -
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annual report 2006
Pico (Thailand) Public Company Limited 73
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4.3.4 Dividend receivable Baht
CONSOLIDATED THE COMPANY ONLY 2006 2005 2006 2005
Dividend receivable brought forward - - - 3,303,800 Dividends declared for the year - 337,500 4,498,500 2,999,000 Less Cash received - (337,500) (4,498,500) (6,302,800)Assets recorded (included in
other current assets) - - - -
5. CURRENT INVESTMENTS
Current investments as at October 31, consist of the following: Baht
Within 3 months 21,828,045 14,266,982 18,415,459 12,367,272 Between 3 and 6 months 10,674,764 11,876,486 10,235,263 10,955,002 Between 6 and 12 months 6,310,176 990,230 6,206,000 406,600 More than 12 months 1,750,717 2,885,356 586,325 1,634,925
117,702,160 107,007,895 106,168,363 86,498,970 Less Allowance for doubtful accounts (1,716,307) (2,905,835) (500,725) (1,586,775)
115,985,853 104,102,060 105,667,638 84,912,195
The Company has not provided an allowance for doubtful accounts for the overdue related party accounts receivable as the management of the Company expects to collect in full from those receivables.
7. SHORT-TERM LOAN TO A RELATED PARTY
Short-term loan to a related party as at October 31, 2006, consists of the following: Baht
CONSOLIDATED THE COMPANY ONLY
Short-term loan to a related party - Joint Venture 5,054,915 8,424,859
Related party relationship is described in Note 21. The short-term loan as at October 31, 2006, bears interest at 3.75% per annum.
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annual report 2006
Pico (Thailand) Public Company Limited 75
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8. THE GROSS AMOUNT DUE FROM CUSTOMERS FOR CONTRACT WORK
The gross amount due from customers for contract work as at October 31, are as follows: Baht
CONSOLIDATED THE COMPANY ONLY 2006 2005 2006 2005
Contract costs incurred and profit/losses recognized to date 156,123,121 99,299,264 151,105,379 95,354,566Less Billing and advances from customers (72,966,226) (26,101,872) (72,233,800) (26,101,872) 83,156,895 73,197,392 78,871,579 69,252,694
9. DEPOSITS AT BANKS USED AS COLLATERAL
As at October 31, 2006 and 2005, the subsidiaries have fixed deposits at banks used as collateral against bank overdrafts, short-term loan, and letters of guarantee issued by banks (see Notes 13 and 27).
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annual report 2006
Pico (Thailand) Public Company Limited 76
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10.IN
VEST
MENT
S USIN
G THE
EQU
ITY M
ETHO
D
Invest
ments
using
the e
quity
metho
d as a
t Octo
ber 31
, are a
s follo
ws:
Baht
COMP
ANY’S
NAME
BU
SINES
S PO
RTIO
N OF
CO
NSOL
IDAT
ED
TH
E CO
MPAN
Y ON
LY
AC
TIVITY
INV
ESTME
NTS
PAID
-UP CA
PITAL
CO
ST M
ETHO
D
EQUI
TY M
ETHO
D
COST
MET
HOD
EQUI
TY M
ETHO
D Su
bsidia
ry com
panies
%
2006
2005
2006
2005
200
6 200
5
2006
2005
2006
200
5 PX
Syste
m Co
mpany
Limi
ted
Renta
l of e
quipm
ent
and co
ntract
or
on
the tra
de exh
ibition
sta
ndard
booths
89.
95 1,0
00,000
1,0
00,000
3,7
50,714
3,7
50,714
-
-
3,750,
714
3,750,
714
21,649
,523
19,020
,132
Artco
m Gr
aphic C
ompan
y Lim
itedGr
aphic b
anner
and
ink
jet pri
nting
design
60.
00 1,0
00,000
1,0
00,000
1,0
22,400
1,0
22,400
-
-
1,022,
400
1,022,
400
8,426,
204
8,227,
460
Multi
Desig
ns Co
mpany
Limi
ted
Trade
exhibi
tion
and
inter
ior de
sign
59.90
400,00
0 400
,000
360,00
0
360,00
0
-
- 360
,000
360,00
0 2,9
54,271
2,0
23,486
As
sociat
ed com
pany -
Direc
t
Inkjet
Image
s (Thai
land)
De
sign a
nd pri
nting
of
Co
mpany
Limi
tedadv
ertisin
g bann
er 22.
22 6,0
00,000
6,0
00,000
3,9
22,033
3,9
22,033
4,8
84,319
4,0
47,447
3,9
22,033
3,9
22,033
4,8
84,319
4,0
47,447
Be
c - Te
ro Ex
hibitio
n Co.,
Ltd.*
Stagin
g, orga
nizing
, prod
ucing,
ma
naging
anand
explo
iting e
xhibit
ion
39.00
5,000,
000-
1,949,
980-
366,9
06 -
1,949,
980-
366,90
6-
Desig
nlab M
ISC Co
., Ltd.
* De
sign
20.00
2,000,
000
- 399
,900
-
487,
543
- 399
,900
- 487
,543
- Ibr
ix Co
mpany
Limi
ted *
Trade
exhibi
tion
and in
terior
desig
n 40.
00 5,0
00,000
-
1,999,
800
-
2
,212,6
55
- 1,9
99,800
-
2,212,
655
- As
sociat
ed com
pany -
Indir
ect
U-Re
nt Co
mpany
Limi
ted
Proper
ty ren
tal 20.
24 2,0
00,000
2,0
00,000
505
,125
505
,125
2,3
16,743
1,5
60,155
-
- -
- Joi
nt Ve
nture
Joint
Ventu
re
Interi
ors an
d cons
tructio
n
for
muse
um
40.00
400,00
0 -
160,00
0
-
-
- 160
,000
- 59,
082
- To
tal inv
estme
nts us
ing th
e equi
ty me
thod
14,
069,95
2
9,560,
272
10,268
,166
5,6
07,602
13,564
,827
9,055,
147
41,040
,503
33,318
,525
* Duri
ng the
year
ended
Octob
er 31,
2006,
the C
ompan
y acqu
ired i
nvestm
ents in
such
associ
ated c
ompan
ies of
Baht
4.35 m
illion
at par
value
of th
e shar
es.…/
11
annual report 2006
Pico (Thailand) Public Company Limited 77
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11. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net consist of the following: Baht
Balance as at Additions Disposals Transfer in Balance as at October 31, (out) October 31,
Total accumulated depreciation (51,850,468) (14,328,793) 9,940,898 - (56,238,363) Assets under construction 6,056,733 21,129,455 - (27,035,128) 151,060 Property, plant and equipment-net 82,508,458 29,466,625 (2,805,624) - 109,169,459 Depreciation for the years:
2006 14,328,793 2005 11,635,743
Cost of fully depreciated fixed assets still in use: 2006 Gross carrying amount 21,248,016 2005 Gross carrying amount 11,590,367
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annual report 2006
Pico (Thailand) Public Company Limited 78
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PROPERTY, PLANT AND EQUIPMENT, NET (CONTINUED)Baht
Balance as at Additions Disposals Transfer in Balance as at October 31, (out) October 31,
2005 2006THE COMPANY ONLY Cost and appraisal value:
Total accumulated depreciation (28,701,831) (7,969,511) 9,215,510 - (27,455,832)Assets under construction 6,371,057 21,129,456 - (27,349,453) 151,060 Property, plant and equipment-net 72,726,451 21,965,735 (2,701,627) - 91,990,559 Depreciation for the years:
2006 7,969,511 2005 6,219,725
Cost of fully depreciated fixed assets still in use: 2006 Gross carrying amount 4,126,476 2005 Gross carrying amount 2,670,608
During the year ended October 31, 1994, land was professionally appraised and the revaluation account is shown in land revaluation surplus under shareholders’ equity. The land was re-appraised by the independent appraiser on July 31, 2000 and the decline in value of Baht 5.3 million was deducted from such revaluation surplus. On August 9, 2005, such land was re-appraised by the independent appraiser and surplus in value of Baht 18.7 million was included in such revaluation surplus. As at October 31, 2006 and 2005, The Company has mortgaged land and buildings with a bank as security for bank overdraft, short-term loan, and letters of guarantee issued by the bank (see Notes 13 and 27).
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Pico (Thailand) Public Company Limited 79
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12. INTANGIBLE ASSETS, NET
Intangible assets, net as at October 31, are as follows: Baht
CONSOLIDATED THE COMPANY ONLY 2006 2005 2006 2005
Cost of intangible assets 2,782,901 1,401,627 2,497,008 1,287,125Less Accumulated amortization of Intangible assets (411,623) (244,935) (365,150) (225,807)
2,371,278 1,156,692 2,131,858 1,061,318Intangible assets under installation 268,682 431,205 268,682 431,205Intangible assets, net 2,639,960 1,587,897 2,400,540 1,492,523
Amortization for the years 166,688 140,320 139,343 129,065
13. BANK OVERDRAFTS AND SHORT-TERM LOAN FROM FINANCIAL INSTITUTIONS
The Company and a subsidiary have unused credit facilities for bank overdraft as at October 31, as follows: Million Baht
CONSOLIDATED THE COMPANY ONLY
2006 18.50 18.00 2005 18.50 18.00
The collateral of bank overdrafts and short-term loan from financial institutions are the pledge of fixed deposits at banks and the mortgage of land and building with interest rate at minimum overdraft rate (MOR) plus 0.5% and 0.25% per annum (see Notes 9 and 11). As at October 31, 2006 and 2005, the Company and a subsidiary have no bank overdrafts and no short-term loan from financial institutions.
14. TRADE ACCOUNTS PAYABLE
Trade accounts payable as at October 31, are as follows: Baht
15. THE GROSS AMOUNT DUE TO CUSTOMERS FOR CONTRACT WORK
The gross amount due to customers for contract work as at October 31, are as follows: Baht
CONSOLIDATED THE COMPANY ONLY 2006 2005 2006 2005
Billing and advances from customers 84,772,491 17,709,997 80,783,895 13,526,042 Less Contract costs incurred and profit/losses
recognized to date (79,289,045) (8,565,536) (78,962,677) (8,071,242) 5,483,446 9,144,461 1,821,218 5,454,800
16. OBLIGATIONS UNDER HIRE-PURCHASE AGREEMENTS
Obligations under hire-purchase agreements as at October 31, are as follows: Baht
CONSOLIDATED THE COMPANY ONLY 2006 2005 2006 2005
Obligations under hire-purchase agreements 8,797,521 6,770,901 8,781,408 6,770,901 Less Deferred interest (1,293,508) (782,388) (1,293,219) (782,388) 7,504,013 5,988,513 7,488,189 5,988,513 Less Obligations under hire-purchase
agreements due within one year (2,214,478) (1,830,527) (2,198,654) (1,830,527) 5,289,535 4,157,986 5,289,535 4,157,986
17. SHARE CAPITAL
The Company’s registered share capital comprised ordinary shares and preferred shares. The preferred shares have the right to receive dividends equal to ordinary shares. The dividend will be calculated from profit earned after the issuance of preferred shares. However, any profit on the appraisal of land, buildings and other assets which existed before the issuance of the preferred shares, will be allocated solely to the ordinary shares. The preferred shareholders have the right to vote in the shareholder meeting, a ten thousand preferred shares are equivalent to one voting right of a ordinary share. The preferred shares have the right to receive the proportion of their return on investments upon liquidation equal to ordinary shares. On February 15, 2005, the annual ordinary shareholders’ meeting resolved to increase in authorized share capital of Baht 50 million from 65 million to 115 million by issuing such 50 million new ordinary shares of Baht 1 each for the stock dividend as mentioned in Note 19. The Company registered the share capital increase with the Ministry of Commerce on March 2, 2005.
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annual report 2006
Pico (Thailand) Public Company Limited 81
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As at October 31, the premium on ordinary share capital, net are as follows: Baht
2006 2005 Premium on ordinary share capital 105,000,000 105,000,000Less Underwriting fee (3,750,000) (3,750,000)
101,250,000 101,250,000The weighted average number of ordinary shares for the year ended October 31, are calculated as follows:
Shares2006 2005
Number of shares, beginning balance 114,669,980 64,670,000Plus The effect on the issuance of stock dividend (Note 19) - 49,999,980Weighted average number of ordinary shares 114,669,980 114,669,980
18. LEGAL RESERVE
Under the Public Companies Limited Act, the Company is required to set aside as a legal reserve at least 5% of its net income after deficit brought forward (if any) until the reserve is not less than 10% of the registered capital. Such reserve fund is not available for distribution as dividend until the Company is finally wound up.
19. DIVIDENDS PAID
19.1 The Company On June 2, 2006, the Company’s board of directors meeting resolved to take action for interim dividend payment of Baht 0.17 per share to the shareholders whose names were listed in the Company’s registrar book as at June 19, 2006. Such dividends of Baht 19.55 million were paid on June 30, 2006. On February 15, 2006, the annual ordinary shareholders’ meeting resolved to take action for the appropriation of legal reserve of Baht 2.08 million, appropriation of dividend of Baht 19.55 million from the net profit of 2005 to the shareholders whose names were listed in the Company’s registrar book as at January 30, 2006 for dividend payment of Baht 0.17 per share. The Company paid such dividend on February 28, 2006. On June 1, 2005, the Company’s board of directors meeting resolved to take action for interim dividend payment of Baht 0.14 per share to the shareholders whose names were listed in the Company’s registrar book as at June 17, 2005. Such dividends of Baht 16.10 million were paid on June 30, 2005. On February 15, 2005, the annual ordinary shareholders’ meeting resolved to take action for the appropriation of legal reserve of Baht 2.06 million, appropriation of dividend of Baht 55.56 million from the profit by issuing the ordinary shares to the shareholders whose names were listed in the Company’s registrar book as at January 26, 2005 in the proportion of 0.77 new share to 1 existing share, totaling 50 million shares of Baht 1 par value (the market price as at January 26, 2005 was Baht 2.68 per share) and cash payment of Baht 0.09 each. The Company paid such dividend on February 28, 2005.
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Pico (Thailand) Public Company Limited 82
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19.2 The subsidiaries On May 23, 2006, the extraordinary shareholders’ meeting of Artcom Graphic Company Limited passed a resolution for an interim dividend payment of Baht 300 per share for 10,000 ordinary shares totaling Baht 3 million to the shareholders whose names were listed in the Company’s registrar book as at May 23, 2006. Such dividend was paid on May 26, 2006.On February 3, 2006, the board of directors’ meeting of PX System Company Limited passed a resolution to take action for annual dividend payment for 2005 of Baht 300 per share to the shareholders whose names were listed in the Company’s registrar book as at February 7, 2006 totaling Baht 3 million. On February 27, 2006, the annual ordinary shareholders’ meeting of PX System Company Limited resolved to take action for dividend payment according to a resolution of board of directors’ meeting. Such dividend was paid in February and July 2006.On June 16, 2005, the extraordinary shareholders’ meeting of Artcom Graphic Company Limited passed a resolution for an interim dividend payment of Baht 200 per share for 10,000 ordinary shares totaling Baht 2 million to shareholders as an appropriation of net profit for the operation result from November 1, 2004 to April 30, 2005, such dividend has been paid to shareholders on June 17, 2005. On September 12, 2005, the board of directors’ meeting of PX System Company Limited passed a resolution for a dividend payment of Baht 200 per share for 10,000 ordinary shares totaling Baht 2 million, as an appropriation of the net profits for 2005. Such dividend was paid on September 2005.
20. BASIC EARNINGS PER SHARE
The calculation of the basis earnings per share for the years ended October 31, is based on the following data:
2006 2005 Baht Baht
Net income 71,253,650 41,702,045Less Dividends of preferred shares (112,200) (328,251)Net income for the calculation purpose of basic
earnings per share 71,141,450 41,373,794
Weighted average number of ordinary shares (Note 17) Shares 114,669,980 114,669,980Basic earnings per share Baht 0.62 0.36
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annual report 2006
Pico (Thailand) Public Company Limited 83
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21. RELATED PARTIES TRANSACTIONS
The financial statements included certain transactions with related parties. These parties are related through common shareholdings and/or directorship. The financial statements reflect the effects of these transactions on the basis determined by the companies concerned. Significant balances with the related parties as at October 31, are as follows:
BahtAccount / Companies Relationship Consolidated The Company Only 2006 2005 2006 2005
Trade accounts receivable (Note 6) Pico Art International Pte Ltd Major Shareholder 110,000 98,375 110,000 - Pico Art Exhibition Same Ultimate Holding Company - 81,382 - 81,382 Pico International (China) Limited Same Ultimate Holding Company 1,093,033 - 1,093,033 - Pico International Taiwan Ltd. Same Ultimate Holding Company 260,000 - 260,000 - Pico International Ltd. Same Ultimate Holding Company - 2,505,010 - 2,505,010 Pico (China) Ltd. Same Ultimate Holding Company - 1,531,000 - 1,531,000 Meeting Planners International (HK) Ltd. Same Ultimate Holding Company - 317,576 - 317,576 Pico International (M) Sdn. Bhd. Same Ultimate Holding Company 119,840 202,850 - 202,850 Pico Austraila Pty Ltd.. Same Ultimate Holding Company 147,000 - 147,000 - Pico International (HK) Ltd. Same Ultimate Holding Company 570,000 1,640,047 570,000 1,640,047 U-Rent Company Limited Associated Company 26,584 21,732 - - 2,326,457 6,397,972 2,180,033 6,277,865
Amounts due from related parties Pico Art International Pte Ltd Major Shareholder 257,335 - 257,335 - Pico Global Services Limited Same Ultimate Holding Company - 2,564 - 2,564 PX System Company Limited Subsidiary - - 64,269 276,664 Artcom Graphic Company Limited Subsidiary - - 143,479 85,356 Multi Designs Company Limited Subsidiary - - 154,185 318,939 U-Rent Company Limited Associated Company 13,600 17,848 - 17,848
270,935 20,412 619,268 701,371
Short-term loan to a related party Joint Venture Joint Venture 5,054,915 - 8,424,859 -
The gross amount due from customers for contract work Pico International Taiwan Ltd. Same Ultimate Holding Company 24,950 - 24,950 - Pico International (HK) Ltd. Same Ultimate Holding Company 98,598 - 98,598 - Multi Designs Company Limited Subsidiary - - 654,206 654,206U-Rent Company Limited Associated Company - 500 - -
123,548 500 777,754 654,206
Other current asset Joint Venture Joint Venture 4,064,722 - 6,774,536 -
…/18
annual report 2006
Pico (Thailand) Public Company Limited 84
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BahtAccount / Companies Relationship Consolidated The Company Only 2006 2005 2006 2005
Investments using the equity method PX System Company Limited Subsidiary - - 21,649,522 19,020,132 Artcom Graphic Company Limited Subsidiary - - 8,426,204 8,227,460 Multi Designs Company Limited Subsidiary - - 2,954,271 2,023,486 U-Rent Company Limited Associated Company 2,316,743 1,560,155 - - Bec - Tero Exhibition Co., Ltd. Associated Company 366,906 - 366,906 - Designlab MISC Company Limited Associated Company 487,543 - 487,543 - Ibrix Company Limited Associated Company 2,212,655 - 2,212,655 - Inkjet Images (Thailand) Company Limited Associated Company 4,884,319 4,047,447 4,884,319 4,047,447 Joint Venture Joint Venture - - 59,083 -
10,268,166 5,607,602 41,040,503 33,318,525 Building under construction (Design fee)
Multi Designs Company Limited Subsidiary - - - 314,324
Buildings and buildings improvement, net Multi Designs Company Limited Subsidiary - - 299,377 -
Trade accounts payable (Note 14)
Pico International (China) Limited Same Ultimate Holding Company 722,782 - 722,782 - Pico International (M) Sdn. Bhd. Same Ultimate Holding Company 110,635 333,846 110,635 333,846 PX System Company Limited Subsidiary - - 32,100 357,327 Artcom Graphic Company Limited Subsidiary - - 2,682,578 1,599,072 Multi Designs Company Limited Subsidiary - - 1,512,445 1,156,349 U-Rent Company Limited Associated Company 1,197,440 1,117,762 570,447 429,241 Inkjet Images (Thailand) Company Limited Associated Company 102,858 55,390 97,215 24,466 Designlab MISC Company Limited Associated Company 1,027,200 - 1,027,200 -
Pico International (China) Limited Same Ultimate Holding Company 38,744 - 38,744 - PX System Company Limited Subsidiary - - - 175,000 Artcom Graphic Company Limited Subsidiary - - 131,042 34,452 Multi Designs Company Limited Subsidiary - - - 75,000 U-Rent Company Limited Associated Company 173,900 219,772 173,900 173,369
212,644 219,772 343,686 457,821 Amounts due to related parties
Pico Art International Pte Ltd Major Shareholder 11,681,641 4,508,550 11,681,641 4,508,550 Pico Global Services Limited Same Ultimate Holding Company 38,440 27,398 38,440 27,398 Multi Designs Company Limited Subsidiary - - - 37,450
11,720,081 4,535,948 11,720,081 4,573,398 The gross amount due to customers for contract work
Pico Australia Pty Ltd. Same Ultimate Holding Company 136,796 - 136,796 - Deposits received from customers
Joint Venture Joint Venture 925,415 - 1,542,358 -
…/19
annual report 2006
Pico (Thailand) Public Company Limited 85
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Significant business transactions with related parties for the years ended October 31, are mainly as follows:
BahtAccount / Companies Relationship Consolidated The Company Only
2006 2005 2006 2005 Revenues from the rendering of services
Pico Art International Pte Ltd Major Shareholder 4,945,942 3,133,989 3,309,720 3,042,049Pico Art Exhibition Inc. Same Ultimate Holding Company 17,664 73,666 17,664 73,666Pico International Taiwan Ltd Same Ultimate Holding Company 2,316,391 - 267,941 -Pico International Ltd. Same Ultimate Holding Company - 2,596,583 - 2,596,583Pico International (M) Sdn. Bhd. Same Ultimate Holding Company 181,673 269,579 69,673 189,579Pico International (China) Limited Same Ultimate Holding Company 1,091,519 2,053,528 1,091,519 2,053,528Pico (China) Ltd. Same Ultimate Holding Company - 1,430,841 - 1,430,841Pico Hong Kong Limited Same Ultimate Holding Company - 721,957 - -Pico Australia Pty Ltd. Same Ultimate Holding Company 137,383 - 137,383 -Pico Exhibition (UK) Ltd. Same Ultimate Holding Company 1,258,016 714,860 1,258,016 714,860Pico International (HK) Ltd. Same Ultimate Holding Company 1,947,620 2,411,732 1,849,422 2,343,807Pico Chicago Same Ultimate Holding Company 936,027 - - -Meeting Planners International (HK) Ltd. Same Ultimate Holding Company - 296,800 - 296,800Multi Designs Company Limited Subsidiary - - 132,000 5,306,023U-Rent Company Limited Associated Company 1,549,772 255,703 - -Joint Venture Joint Venture 37,988,052 - 63,313,421 - 52,370,059 13,959,238 71,446,759 18,047,736
Management fee (income)
PX System Company Limited Subsidiary - - 388,800 388,800 Artcom Graphic Company Limited Subsidiary - - 218,400 218,400 Multi Designs Company Limited Subsidiary - - 338,400 338,400 - - 945,600 945,600
Dividend income
PX System Company Limited Subsidiary - - 2,698,500 1,799,000 Artcom Graphic Company Limited Subsidiary - - 1,800,000 1,200,000 U-Rent Company Limited Associated Company - 337,500 - - - 337,500 4,498,500 2,999,000
Other income
Pico Art International Pte. Ltd. Major Shareholder - 110,642 - 110,642 Pico Global Services Limited Same Ultimate Holding Company 47,667 - 47,667 - PX System Company Limited Subsidiary - - 865,920 865,920 Artcom Graphic Company Limited Subsidiary - - 529,905 417,700 Multi Designs Company Limited Subsidiary - - 347,400 365,883 U-Rent Company Limited Associated Company 486,261 648,348 486,261 648,348 533,928 758,990 2,277,153 2,408,493
…/20
annual report 2006
Pico (Thailand) Public Company Limited 86
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BahtAccount / Companies Relationship Consolidated The Company Only
2006 2005 2006 2005 Share of profits from investments using the equity method
PX System Company Limited Subsidiary - - 5,327,891 7,560,375 Artcom Graphic Company Limited Subsidiary - - 1,998,743 2,046,593 Multi Designs Company Limited Subsidiary - - 930,785 638,908 U-Rent Company Limited Associated Company 756,588 585,813 - - Inkjet Images (Thailand) Company Limited Associated Company 836,872 (142,938) 836,872 (142,938) Bec - Tero Exhibition Co., Ltd. Associated Company (1,583,073) - (1,583,073) - Designlab MISC Company Limited Associated Company 87,643 - 87,643 - Ibrix Company Limited Associated Company 212,855 - 212,855 - Joint Venture Joint Venture - - (100,917) -
310,885 442,875 7,710,799 10,102,938 Costs of the rendering of services
Pico Art International Pte Ltd Major Shareholder - 1,369,829 - 1,369,829 Pico International Taiwan Ltd Same Ultimate Holding Company - 966,148 - 966,148 Pico International (M) Sdn. Bhd. Same Ultimate Holding Company 327,859 333,846 327,859 333,846Pico International (China) Limited Same Ultimate Holding Company 780,000 - 780,000 - Pico Altanta Pte Ltd Same Ultimate Holding Company 819,652 - 819,652 - Meeting Planners international(HK) Ltd Same Ultimate Holding Company 21,219 - 21,219 - Pico International (HK) Ltd. Same Ultimate Holding Company - 246,285 - 246,285 Inter-Expo Exhibition Services Limited Same Ultimate Holding Company - 7,375 - 7,375 PX System Company Limited Subsidiary - - 6,678,334 2,475,840 Artcom Graphic Company Limited Subsidiary - - 6,213,245 5,559,453 Multi Designs Company Limited Subsidiary - - 8,585,200 4,417,700 U-Rent Company Limited Associated Company 10,252,654 5,585,951 8,749,245 4,091,877 Inkjet Images (Thailand) Company Limited Associated Company 964,690 1,182,900 959,416 1,153,998 Designlab MISC Company Limited Associated Company 7,552,000 - 7,552,000 -
Pico Art International Pte Ltd Major Shareholder 22,745,446 15,493,753 22,745,446 15,493,753 Dividend
Pico Art International Pte Ltd Major Shareholder 12,707,500 21,496,667 12,707,500 21,496,667 Directors Director 10,724,519 19,854,359 10,724,519 19,851,559 23,432,019 41,351,026 23,432,019 41,348,226
Other expenses
Pico Art International Pte Ltd Major Shareholder 476,488 152,223 476,488 152,223 Pico International Ltd Same Ultimate Holding Company - 90,239 - 90,239 Pico Global Services Limited Same Ultimate Holding Company 189,517 245,434 189,517 245,434 PX System Company Limited Subsidiary - - 6,860 8,000 Artcom Graphic Company Limited Subsidiary - - 52,919 23,016 Multi Designs Company Limited Subsidiary - - 12,000 150,500 666,005 487,896 737,784 669,412
…/21
annual report 2006
Pico (Thailand) Public Company Limited 87
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- Service income and cost of service are determined by the Company and its related companies based on the cost plus basis as the condition in the normal course of business.
- On November 1, 2001 the Company entered into the Management Consultant Agreements with three subsidiaries. The management fees charged to such subsidiaries are presented as follows:
Company Monthly fee (Baht) Px System Company Limited 32,400 Artcom Graphic Company Limited 18,200 Multi Designs Company Limited 28,200
Such agreements shall be in effect for a year from the date of the agreement and the two parties can renew the agreement for a successive term of 1 year. In 2004, the Company has renewed and extended such Management Consultant Agreements for 3 years. Subsequently, on November 1, 2006, the Company entered into the new Management Consultant Agreements with three subsidiaries. The management fees charged to such subsidiaries are the same amount. The new agreements shall be in effect for 3 years from the date of the agreement and the two parties can renew the agreement for a successive term of 3 years.
- On July 10, 1992, the Company entered into the Off-shore Services agreement and Intellectual Property License agreement with Pico Art International Pte Ltd, a major shareholder. Subsequently, amendments of both agreements have been made on November 3, 2003. In consideration thereof, the Company is committed to pay fees under the new amendments at the agreed rates of the gross revenues. Both agreements shall continue for an indefinite period until terminated by the mutual agreement of the parties.
22. SHARE OF PROFITS (LOSSES) FROM INVESTMENTS USING THE EQUITY METHOD
For the years ended October 31, 2006 and 2005, share of profits (losses) from investments using the equity method included in the financial statements are based on the net income (loss) of the financial statements of subsidiaries and associated companies for the years ended October 31, 2006 and 2005. Such share of profits (losses) can be stated as percentages of the Company’s net income as follows:
% of ownership % of net income 2006 2005 2006 2005
THE COMPANY ONLY Subsidiary companies
PX System Company Limited 89.95 89.95 6.52 16.91 Artcom Graphic Company Limited 60.00 60.00 2.81 4.91 Multi Designs Company Limited 59.90 59.90 1.31 1.53
Associated companies - Direct Inkjet Images (Thailand) Company Limited 22.22 22.22 1.17 (0.34) Bec - Tero Exhibition Company Limited 39.00 - (2.22) - Designlab MISC Company Limited 20.00 - 0.12 - Ibrix Company Limited 40.00 - 0.30 -
…/22
annual report 2006
Pico (Thailand) Public Company Limited 88
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% of ownership % of net income 2006 2005 2006 2005
Joint Venture Joint Venture 40.00 40.00 (0.14) -
CONSOLIDATED Associated companies - Direct
Inkjet Images (Thailand) Company Limited 22.22 22.22 1.17 (0.34) Bec - Tero Exhibition Company Limited 39.00 - (2.22) - Designlab MISC Company Limited 20.00 - 0.12 - Ibrix Company Limited 40.00 - 0.30 -
Associated company - Indirect U-Rent Company Limited 20.24 20.24 0.96 1.22
For the years ended October 31, 2006 and 2005, share of profits (losses) from investments using the equity method of associated companies were computed from the financial statements for the years ended October 31, 2006 and 2005, which had not been audited.
23. PROVIDENT FUND
For the years ended October 31, 2006 and 2005, the Company contributions included in services and administrative expenses in the financial statements were as follows:
Baht CONSOLIDATED THE COMPANY ONLY
2006 1,102,708 961,165 2005 822,225 822,225
24. DISCLOSURE OF FINANCIAL INSTRUMENTS
The Company and subsidiaries present and disclose financial instruments as follows: 24.1 Accounting Policies
Details of significant accounting policies are disclosed in Note 3. 24.2 Credit Risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in a financial loss to the Company and subsidiaries. Concentrations of credit risk with respect to trade receivable are limited because the customers of the Company and subsidiaries are diversified.In the case of recognized financial assets in the balance sheet, the carrying amount of the assets recorded in the balance sheet represents the Company’s maximum exposure to credit risk.
…/23
annual report 2006
Pico (Thailand) Public Company Limited 89
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24.3 Foreign Exchange Risk Foreign exchange risk arises from the change in foreign currency exchange rate to have an adverse effect on the Company and subsidiaries in the current reporting year and in future years. The Company and subsidiaries do not expect to incur material effects of foreign currency exchange rate on its financial position and results of the operations because the majority of business activities are denominated in Thai Baht.
24.4 Interest Rate Risk Interest rate risk arises from the potential for a change in interest rate to have an adverse effect on the Company and subsidiaries in the current reporting period and in future years. The Company and subsidiaries do not expect to incur material incremental effect on its interest expense since the Company and its subsidiaries have no outstanding loan balance at the balance sheet date.
24.5 Estimated Fair Value of Financial Instruments Thai Accounting Standard No. 48, “Financial Instruments: Disclosure and Presentation” requires certain fair value disclosures. Considerable judgement is necessarily required in estimation of fair value. Accordingly, the estimated fair value presented herein is not necessarily indicative of the amount that could be realized in a current marker exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The following methods and assumptions were used by the Company and subsidiaries in estimating fair values of financial instruments.Cash and cash equivalents, current investments, accounts receivable, amounts due from related companies, short-term loan to a related party, other current assets, trade accounts payable, amounts due to related companies and other current liabilities: the carrying values approximate their fair values due to the relatively short period to maturity. The current net assets value of non-listed securities based on the latest available financial statements of those companies approximate fair values. As at October 31, 2006 and 2005, the carrying values of the financial assets and liabilities which is different from the fair values are as follows:
BAHTCONSOLIDATED THE COMPANY ONLY
Carrying Value Fair Value Carrying Value Fair Value 2006 2005 2006 2005 2006 2005 2006 2005
Fair value is estimated using the available each year’s market rates which are approximately 4.00 - 7.00% per annum for the year ended October 31, 2006 and approximately 3.10 - 5.75% per annum for the year ended October 31, 2005.
…/24
annual report 2006
Pico (Thailand) Public Company Limited 90
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25. B
USIN
ESS S
EGME
NT IN
FORM
ATIO
N Bu
siness
segm
ent in
forma
tion f
or the
Comp
any an
d subs
idiari
es are
prese
nted a
s follo
ws:
CONS
OLID
ATED
Baht
Fo
r the y
ear en
ded Oc
tober
31, 20
06 Fo
r the y
ear en
ded Oc
tober
31, 20
05
Reven
ue Ty
pe Ex
hibitio
n Ev
entMu
seums
Inkjet
&Ot
hers
Total
Exhib
ition
Event
Museu
msInk
jet &
Ot
hers
Total
Marke
ting
Exhib
itgra
phic
Ma
rketin
gEx
hibit
graph
ic
Re
venues
from
the re
nderin
g
of ser
vices
349,84
0,165
286
,090,8
28
236,06
2,472
43,
844,73
0 121
,765,6
67
1,037,
603,86
2 249
,554,1
11
254,22
2,042
102
,879,2
48
27,891
,182
81,952
,003
716
,498,5
86 Re
venues
from
the re
nderin
g
of
servic
es-Joi
n Vent
ure
- -
71,191
,028
-
71,191
,028
- -
- -
- -
Other
incom
e -
- -
- 3,2
69,311
3,2
69,311
-
- -
- 3,2
78,092
3,2
78,092
Sh
are of
profi
ts from
inves
tment
s
using
the eq
uity m
ethod
-
-
-
-
310,88
5 310
,885
-
-
-
- 442
,875
442,87
5 To
tal rev
enues
349
,840,1
65
286,09
0,828
307
,253,5
00
43,844
,730
125,34
5,863
1,112,
375,08
6 249
,554,1
11
254,22
2,042
102
,879,2
48
27,891
,182
85,672
,970
720,21
9,553
Inc
ome b
efore
incom
e tax
94,037
,150
57,
238,09
2 Le
ss Inc
ome ta
x
(20
,232,6
13)
(12,89
9,224)
73,
804,53
7
44,338
,868
Less
Minor
ity in
terest
in
con
solida
ted ne
t incom
e
(2,550
,887)
(2,636
,823)
Net in
come
71,253
,650
41,
702,04
5
Int
er-seg
ment
fixed
asset
s 26,
611,15
0
- -
11,989
,392
- 38,
600,54
2 17,
459,58
3
- -
11,599
,193
- 29,
058,77
6 Ge
neral f
ixed a
ssets
126
,807,2
80
105,30
0,150
Total
fixed
assets
165
,407,8
22
134,35
8,926
Less
Accum
ulated
depre
ciatio
n
(56
,238,3
63)
(51,85
0,468)
Fixed
assets
- net
109,16
9,459
82,
508,45
8 Ge
neral a
ssets
418,16
3,825
346
,728,4
35 To
tal As
sets
527,33
3,284
429
,236,8
93 .../25
annual report 2006
Pico (Thailand) Public Company Limited 91
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26.RI
SK M
ANAG
EMEN
T PO
LICIES
FOR
ASS
ETS A
ND L
IABIL
ITIES
IN F
OREIG
N CU
RREN
CY
The C
ompan
y and
subsid
iaries
do no
t have
a pol
icy to
cover
forei
gn exc
hange
exposu
re of
assets
and l
iabilit
ies in
forei
gn cur
rencie
s beca
use th
e Com
pany a
nd sub
sidiar
ies do
not ex
pect to
incur
mate
rial ef
fects o
f forei
gn cur
rency
exchan
ge rat
e on i
ts fina
ncial p
ositio
n and
result
s of th
e oper
ations
becaus
e the m
ajority
of
busine
ss act
ivities
are d
enomi
nated
in Th
ai Baht
. All f
oreign
curre
ncy tra
nsactio
ns hav
e to be
appro
ved by
mana
gement
. As
sets a
nd liab
ilities
of th
e Com
pany a
nd sub
sidiar
ies in
forei
gn cur
rencie
s are
as fol
lows:
Te
rm of
receip
t/ CO
NSOL
IDAT
ED A
ND T
HE C
OMPA
NY O
NLY
payme
nt(da
ys)US
D S$
HK$
RM
AUD
EURO
NT
$ BA
HT
As
at Oc
tober
31, 20
06
Cash
and ca
sh equ
ivalen
t -
483
274
290
3,9
73 834
1,3
59 5,3
28 175
,946
Trade
accoun
ts rece
ivable
30
- 90
2,310
2,041
- -
- -
- 132
,255
2,793
2,315
290
3,973
834
1,359
5,328
308,20
1 Tra
de acc
ounts p
ayable
30
- 90
22,599
-
833
,417
Other
payabl
es
30 - 9
0
22,832
8,0
86 -
- -
- 579
,808
22,599
22,
832
8,086
- -
- -
1,413,
225
As at
Octob
er 31,
2005
Ca
sh and
cash
equiva
lent
-
531
213
290
4,222
834
2,214
3,377
223,48
7 Tra
de acc
ounts r
eceiva
ble
30 - 9
0 64,
608
38,607
-
- -
- -
3,559,
976
Other r
eceiva
ble
30 - 9
0
- -
- -
- 153
-
7,447
65,139
38,
820
290
4,222
834
2,367
3,377
3,790,
910
Trade
accoun
ts paya
ble
30 - 9
0
- 915
-
30,258
-
- -
356,05
5 Oth
er pay
ables
30
- 90
-
- 5,1
84 -
- -
- 27,
398
-
915
5,184
30,258
-
- -
383,45
3
…/26
annual report 2006
Pico (Thailand) Public Company Limited 92
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27. GUARANTEES
As at October 31, 2006 and 2005, the Company and a subsidiary have bank letters of guarantee as required by the contracts with customers amounting to approximately Baht 66.78 million and Baht 46.60 million, respectively.As at October 31, 2006 and 2005, the Company and subsidiaries have collateral against such letters of guarantee as referred to Notes 9 and 11.
28. CORPORATE TAX
According to the Royal Decree No. 387 B.E. 2544 issued under the Revenue Code regarding the corporate income tax rate deduction dated August 28, 2001, the corporate income tax for the listed on the Market for Alternative Investment has been reduced from 30% to 20%. This will remain in effect for five consecutive accounting periods beginning in the period the Company was registered to be the listed company of the Market for Alternative Investment under the regulations of the Stock Exchange of Thailand.
29. SIGNIFICANT AGREEMENT
29.1 On August 25, 2004, the Company entered into a Joint Venture Agreement with Ekca Thai Co., Ltd. and Bewcon Co., Ltd. The objective of which is to construct building and design exhibition. The investment portion of Exca Thai Co., Ltd, Pico (Thailand) Public Company Limited and Bewcon Co., Ltd is 4 : 4 : 2. The operating income or loss from the Joint Venture will be transferred to each party at such portion.
29.2 As at October 31, 2006 and 2005, the Joint Venture another has a letter of guarantee issued by a bank of Baht 12.3 million for performance guarantee and letter of guarantee of Baht 24.6 million for cash advance received from customer. Such letters are secured by a transfer of the right to receive money on contract work to the bank and pledge of fixed deposits of Baht 12.3 million with a bank.
29.3 On March 3, 2006, the Company entered into a Consortium Agreement with Story! Inc (NZ) Ltd. The objective of the Consortium is to construct building and design exhibition. The responsible portions of the Company and Story! Inc (NZ) Ltd. are 90% and 10% of contract work.
30. COMMITMENTS AND CONTINGENT LIABILITIES
As at October 31, 2006 and 2005, the Company had capital commitments to pay construction in progress and purchase of computer software in the total amount of approximately Baht 0.11 million and Baht 1.33 million, respectively.
31. RECLASSIFICATION
A reclassification has been made to the financial statements for the year ended October 31, 2005 to conform to the presentation of the financial statements for the year ended October 31, 2006 which intangible assets as at October 31, 2005 of Baht 1.59 million and Baht 1.49 million are separately presented in other assets which were previously included in other assets in consolidated and the Company’s financial statements, respectively.
32. APPROVAL FOR ISSUING OF FINANCIAL STATEMENTS
These financial statements have been approved for issuing by the Company’s Boards of Directors on December 8, 2006.