ANNUAL REPORT 2011 - Thecorporatelibrary.net

ANNUAL REPORT 2011
thai union frozen products public company limited
The World Seafood Expert

COMPANY
PROFILE
THAI UNION FROZEN PRODUCTS PCL.
Registration No. 0107537000891
(previously Bor.Mor.Jor. 336)
TYPE OF BUSINESS
Processor and exporter of frozen and canned seafood
HEAD OFFICE
72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai,
Amphoe Mueang Samutsakhon, Samutsakhon 74000
Tel: 66 (0) 3481-6500 (Automatic 7 Lines)
Fax: 66 (0) 3481-6886
BANGKOK OFFICE
979/12 M Floor, S.M. Tower, Phaholyothin Road, Samsennai,
Phayathai, Bangkok 10400
Tel: 66 (0) 2298-0024, 2298-0537 - 41
Fax: 66 (0) 2298-0548, 2298-0550
Website: www.thaiuniongroup.com
Listed on the Stock Exchange of Thailand since November 22, 1994
AS OF DECEMBER 31, 2011
Registered capital of Bt1,000,000,000 (At Bt1 par value)
Paid-up capital of Bt956,329,407 (956,329,407 shares)

CONTENTS
Contents
Message from Chairman
Message from President
Organization Chart
Board of Directors
Audit Committee and Sub-Committees
Management Team
5-Year Comparative Financial Statistics
2011 Sales Breakdown and Distribution
Corporate History and Development
MW Brands Holdings SAS
Nature of Business
Investments in Subsidiaries and Associated Companies
Sales Structure of TUF and Subsidiaries
Nature of Main Business
Related Business Groups
TUF Strengths
Financial Highlights
2
4
6
8
9
18
19
20
21
22
24
26
28
34
35
40
46
47

Sustainable Development
Industry Outlook and Competition
Risk Factors and Other Related Factors for Investment Considerations
Report on the Practice of Good Corporate Governance
Appointment of Directors
Authority of Board of Directors and Audit Committee
Shareholding Structure And Management
Remuneration for Directors and Management
Connected Transactions of Listed Company
Report of Audit Committees
Financial Ratios
Explanation of Financial Ratios
References
Management Discussion and Analysis
Statement of the Board of Director’s Responsibilities for the Financial Statements
Report of Independent Auditor
Consolidated and the Company Only Financial Statements
Note to Consolidated Financial Statements
48
50
56
60
64
74
75
77
79
80
90
92
93
94
95
104
105
106
115

MESSAGE FROM
CHAIRMAN
Mr. Kraisorn Chansiri
Chairman
that wreaked extensive havoc on many parts of
areas and with no exception to industrial zones in
Ayudhya and Pathum Thani provinces. The damages
to these major economic areas led to a host of
adverse impacts on the manufacturing sector
where a slowdown becomes inevitable as a
consequence of raw material shortage.
As far as the frozen and canned seafood industry
was concerned, the majority of processing plants
and canneries are fortunately not located within
from any direct impact of the crisis and was
capable of running their operations without
interruptions. Thai Union Frozen Products (TUF)’s
processing plants in Samutsakhon province lie in
River. Our plant facilities and those of our nearby
subsidiary were all unaffected thanks to relentless
with great cooperation from the private sector
major canals and rivers. These concerted efforts
helped save the city area of Samutsakhon
cause impacts on the daily life of some of our
employees. We therefore launched some ad-hoc
relief measures during and after the crisis to help
them get back to a normal life. Besides, TUF
formed teams of volunteers and assigned them to

THAI UNION FROZEN PRODUCTS PCL.
assist those affected employees and the general
public who were in need of a helping hand.
and other food supplies to governmental and
non-governmental agencies for disaster relief
purposes in affected areas throughout the entire
The overall Thai seafood export value for the year
registered 11% year-on-year growth to Bt245,116
million. Among all export items under the seafood
category, canned and processed seafood products
were ranked the best performer with a robust
year-on-year growth rate of 17% in value term
to reach Bt152,050 million. Based on the annual
crisis and indeed delivered a satisfactory annual
growth rate.
With regards to the annual operating performance,
which easily surpassed its target set earlier for the
sales growth in both US dollar and Thai baht term
by 43% and 38% respectively. This was considered
an exceptional achievement, setting a new corporate
earning milestone since our last record-breaking
the USD1,000 million mark in 2004, followed by
consecutive annual growth in the next 4 years, and
eventually topped USD2,000 million in 2008. However,
it took even less time (3 years) to add another USD
1,000 million of sales to attain USD3,232 million in 2011.
According to our plan, we previously targeted to
achieve annual sales of USD3,000 million within 2012.
But our 2011 performance was considered a big
leap, allowing us to attain the target one year
ahead of our plan. At present, we have raised our
2013 target to USD4,000 million. We believe that TUF
is well positioned to achieve this new sales target
given our advantage as a truly global seafood
player with an ability to source, produce and market
our products across the globe, particularly thanks
to the strength of our global tuna brands.
Throughout our entire corporate history, we have
growth with persistent and satisfactory returns to
our shareholders. As one of our normal practices,
through issuing Thai baht-denominated debentures
to local institutional investors. The debentures,
collectively worth Bt6,750 million, are of 3-year,
5-year and 10-year maturity with corresponding
coupon rates of 4.51%, 4.70% and 5.02%. The funds
raised were used for prepaying some of our existing
loans, which in turn helped reduce our total funding
costs. Continuous sales growth, on the back of a
that TUF should be able to bring its Debt-to-Equity
(D/E) ratio down to 1:1 within 2013 while our current
D/E ratio is standing at 1.47 times as a direct
consequence of the acquisition of Europe-based
MW Brands in 2010.
In line with our core corporate strategy with
a strong emphasis on continual growth, we
have been expanding through new promising
investments, greater presence in new markets
and a larger product range to meet dynamic
needs of customers and consumers across the
globe. In addition to corporate growth, we have
also been very keen on giving back to the society.
During the past year, many of our ongoing CSR
activities did contribute to the well-being of the
society and the environment. Among these
projects were “Restoring the balance of the
Coastal Eco-system through Planting 1 million
Mangrove Saplings Project”, “Hometown
Community Development Program”, “Biogas
Generation from Scraps and Wastes” and
co-founding the International Seafood
Sustainability Foundation (ISSF).
As the Chairman, I would like to take this opportunity
to recognize the efforts, commitments, integrity
and continual improvements made by our
management team and all employees in
our organization who produced satisfactory
operating results. Their deep devotion, despite
has enabled us to achieve the sales target of
USD3,000 million well before the original schedule
for 2012. My thanks are also extended to our valued
who have given us their unwavering support all
along. We are committed to attaining an even
higher level of management excellence in the
future in order to achieve our ambitious goals.
ANNUAL REPORT 2011
5

MESSAGE FROM
PRESIDENT
Mr. Thiraphong Chansiri
President
Global economies for the year 2011 was
characterized by a host of persistent challenges
carried forward from the year 2010 that exerted
increasing economic pressure to many countries.
Therefore, Thai packers also needed to monitor
closely how these impacts affected their own
customers in those markets during the year. To
the US and the European Union, have to date
been encumbered by an unresolved issue of
public debt burdens. In the meantime, Japan,
another world’s major economy, also suffered
from a catastrophic tsunami. Thailand, with seemingly
which was the worst in decades. Being a critical
manufacturing base for certain industries such
as automobile and electronics, the historic Thai
industrial sectors even in several other countries, in
addition to Thai domestic industrial activities. The
was essentially the supply of raw materials, as
demonstrably evident in the case of rice where
damages were made to harvested crops and
crop-producing areas.
Apart from these main factors shaping the national
economic landscape during the year, fuel price,
currency exchange rates and labor supply were
other key hurdles that deserved Thai packers’
continual close attention and actions whenever
necessary. Therefore, with these ongoing challenges,

THAI UNION FROZEN PRODUCTS PCL.
we are putting even more efforts in our managing
business in areas of strategy, organizational
management, production and marketing in order
to hold off these increasing outside adversities.
Given the severity of these challenges that could
likely last for a few years, we have put ourselves on
a high alert for any potential negative development.
We believe that these proactive measures should
competitiveness in the global marketplace.
In regard to our 2011 overall operating performance,
MW Brands books into Thai Union Group. During the
course of the year, MW Brands managed to deliver
satisfactory results and achieved set goals in all
quarters. Meanwhile, Tri-Union Frozen Products, Inc.
(established through the merger of Empress
International Ltd. and Tri-Union Frozen Foods, LLC.)
also reported a strong annual performance. With
the operating results of our US and European
subsidiaries well on track, we managed to increase
our total annual sales in US dollar term to USD3,232
million or Bt98,670 million in Thai baht term, which
represented 43% and 38% year-on-year growth
rates respectively. This achievement was one full
year ahead of our original sales target of USD3,000
million set for 2012. More importantly, annual net
representing 77% year-on-year growth. This new
we have developed a robust business model
supported by effective operational policies and
fruit of our employees’ dedication, diligence
and commitment to their work. Our sales target
for 2013 has now been raised to USD4,000 million
while our longer term goal is USD8,000 million for 2020.
These apparently ambitious goals demonstrate the
long-term commitment from all our staff under Thai
Union Group that they would make united efforts
to achieve them.
In order to attain the annual sales target of USD8,000
million within the planned time frame, we have
development strategies, which should serve as
a guidance for our future growth. These internallydeveloped
strategies consist of the following 7
main pillars:
development
best practices
to support growth development
business
Sharing the same view with many world-leading
corporations, we place great emphasis on
organizational development that should get
ourselves ready for a dynamic business environment
where cross-border competition becomes
increasingly complicated. This is also the key
rationale for our need to develop al corporate
vision and a set of future goals that are clear and
understood by our staff. This should enable us to
remain competitive and strong amidst challenging
business conditions in the world marketplace.
To achieve these goals, our management team
needs to act swiftly according to our prescribed
strategies.
Looking back, the milestones that we have
accomplished over decades of operations are a
demonstrated by our management team and all
are the driving force behind our continuously
outstanding performance at TUF. As the president
of TUF, I would like personally recognize the
contributions of our employees, whom I have
always believed as one of powerful drivers behind
our growth. Nevertheless, our sustainable growth
also cannot be made possible without unwavering
support from shareholders, business partners,
continue to uphold our management standards
and move forward to achieve continual and
sustainable growth for TUF in the future.
ANNUAL REPORT 2011
7

ORGANIZATION
CHART
Total Workforce as of December 31, 2011:
Salaried Employee:
Daily Employee:
12,074 Staffs
1,344 Staffs
10,730 Staffs
BOARD OF DIRECTORS
Nomination Committee
Audit Committee
Remuneration Committee
Audit Unit
Risk Management Committee
Company Secretary
PRESIDENT / CEO
FISH
PRODUCT LINES
SHRIMP
PRODUCT LINES
Managing Director
Managing Director
General Manager
General Manager
General Manager
Audit Unit
Deputy
General Manager
Deputy General
Manager Finance
Deputy
General Manager
Corporate
Account Manager

BOARD OF
DIRECTORS
Mr. Kraisorn Chansiri
Chairman
Age 77
Education
in Business Adminstration, Mae Fah Luang
University
the Thai Institute of Directors Association
(RCP 15/2007)
Program 12 (March – July 2011)
Other Positions
Social Positions
Thai-Chinese Merchant Club
Thailand
Association
No. of Shares Held: 122,282,016 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011

Mr. Cheng Niruttinanon
Executive Director
Age 70
Education
People’s Republic of China
Other Positions
Thai Union Manufacturing Co., Ltd.
No. of Shares Held: 60,716,605 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
Mr. Chuan Tangchansiri
Executive Director
Age 67
Education
the Thai Institute of Directors Association
(DAP 86/2010)
Other Positions
Co., Ltd.
(Investment in MW Brands Holdings SAS)
No. of Shares Held: 9,400,000 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
10 ANNUAL REPORT 2011

Mr. Thiraphong Chansiri
President
Age 47
Education
Assumption University
(Management), University of
San Francisco, USA
the Thai Institute of Directors Association
(DCP 10/2001)
Other Positions
Thai Union Manufacturing Co., Ltd.
Lucky Union Foods Co., Ltd.
Director, Yueh Chyang Canned Food Co., Ltd.
(Investment in MW Brands Holding SAS)
Social Positions
Investment (MAI)
(TMA)
No. of Shares Held: 82,422,782 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
ANNUAL REPORT 2011
11

Mr. Rittirong Boonmechote
Managing Director (Shrimp Product Lines)
Age 50
Education
the Thai Institute of Director Association
(DCP 84/2010)
(EDP 2/2009) by Thai Listed Companies Association
Other Positions
Mr. Yasuo Goto
Director
Age 63
Education
Experience
Hagoromo Foods Corporation
Hogoromo Foods Corporation
No. of Shares Held: - *
Social Position
Association
No. of Shares Held: 13,100,000 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
12 ANNUAL REPORT 2011

Mr. Kakiuchi Takehiko
Director
Age 57
Education
Experience
Mitsubishi Corporation
No. of Shares Held: - *
Mr. Chan Tin King
Age 44
Education
USA
the Thai Institute of Directors Association
(DCP 47/2004)
Other Positions
Biz Dimension Co., Ltd.
Co., Ltd.
(Investment in MW Brands Holdings SAS)
No. of Shares Held: 18,553,327 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
ANNUAL REPORT 2011
13

Mr. Chan Shue Chung
Executive Director
Age 37
Education
USA
University
the Thai Institute of Directors Association
(DCP 10/2002)
(EDP 1/2009) by Thai Listed Companies Association
Other Positions
Mr. Ravinder Singh Grewal Sarbjit S
Director
Age 43
Education
University of New South Wales, Australia
Other Positions
No. of Shares Held: - *
No. of Shares Held: 2,878,182 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
14 ANNUAL REPORT 2011

Mr. Sakdi Kiewkarnkha
Independent Director
Age 77
Education
and Law), Thammasat University
the Thai Institute of Directors Association
(DCP 13/2001)
the Thai Institute of Directors Association
(RCP 4/2001)
organized by the Thai Institute of Directors
Association (RCC 9/2009)
University of Singapore
Institute of Business Administration of
Chulalongkorn University
Pol.Maj.Gen. Pracha Anucrokdilok
Independent Director
Age 75
Education
University
the Thai Institute of Directors Association
(DAP 33/2005)
Experience
No. of Shares Held: 6,310 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
Experience
Commercial Bank PCL.
Insurance Co., Ltd.
Member, Dusit Thani PCL.
Metropolitan Bank PCL.
Finance PCL.
No. of Shares Held: - *
ANNUAL REPORT 2011
15

Mr. Kiti Pilunthanadiloke
Independent Director
Age 73
Education
University
the Thai Institute of Directors Association
(DAP 36/2005)
Experience
Attorney General
No. of Shares Held: - *
Mr. Kirati Assakul
Independent Director
Age 54
Education
University of Southern California
the Thai Institute of Directors Association
(DCP 27/2003)
organized by the Thai Institute of Directors
Association (RCC 5/2007)
Other Positions
No. of Shares Held: 21,000 shares*
* Shareholders of TUF that included spouse and
children as of 31 December 2011
16 ANNUAL REPORT 2011

Dr. Thamnoon Ananthothai
Independent Director
Age 55
Education
Management), Eckerd College USA
The University of Sarasota Florida USA
Walden University USA
Council for Accountancy USA
the Thai Institute of Directors Association
(ACP 10/2005)
the Thai Institute of Directors Association
(DAP 48/2005)
the Thai Institute of Directors Association
(DCP 70/2006)
the Thai Institute of Directors Association
(RCP 14/2006)
Statement organized by the Thai Institute of
Directors Association (UFS 7/2007)
Other Positions
Committee, Better World Green PCL.
Committee, IFS Capital (Thailand) PCL.
Securities PCL.
Eastern Printing PCL.
Committee, Chairman of the Nominating-
Committee and Remuneration Committee
Member, Property Prefect PCL.
University
No. of Shares Held: - *
ANNUAL REPORT 2011
17

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products PCL.
AUDIT COMMITTEE
AND SUB-COMMITTEES
AUDIT COMMITTEE
Mr. Sakdi
Kiewkarnkha
Chairman of Audit Committee
Pol.Maj.Gen. Pracha
Anucrokdilok
Audit Committee
Mr. Kiti
Pilunthanadiloke
Audit Committee
SUB-COMMITTEES;
The Nomination Committee
Dr. Thamnoon Ananthothai
The Remuneration Committee
The Risk Management Committee
Dr. Thamnoon Ananthotha
Pol.Maj.Gen. Pracha Anucrokdilok
Mr. Thiraphong Chansiri
Chairman of the Nomination Committee
Member of the Nomination Committee
Member of the Nomination Committee
Chairman of the Remuneration Committee
Member of the Remuneration Committee
Member of the Remuneration Committee
Chairman of the Risk Management Committee
Member of the Risk Management Committee
Member of the Risk Management Committee
Member of the Risk Management Committee
Member of the Risk Management Committee

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products PCL.
MANAGEMENT
TEAM
Mr. Suthidej Amornkasemwong
General Manager – Fish Product Lines
Experience
Thai Union Frozen Products PCL.
Mr. Preerasak Boonmechote
General Manager – Shrimp Product Lines
Experience
Thai Union Frozen Products PCL.
Ms. Sureenard Sukhawanchai
General Manager Audit Unit
Experience
Mr. Yongyut Setthawiwat
Deputy General Manager Finance
Experience
Mr. Niti Trakpiboon
Corporate Accounting Manager
Experience

THAI UNION FROZEN PRODUCTS PCL.
5-Year Comparative
FINANCIAL
STATISTICS
TOTAL REVENUES (MILLION BAHT)
NET PROFIT (MILLION BAHT)
TOTAL ASSETS (MILLION BAHT)
BOOK VALUE PER SHARE (BAHT)
TOTAL LIABILITIES TO EQUITY (TIMES)
RETURN ON AVERAGE EQUITY (%)

THAI UNION FROZEN PRODUCTS PCL.
2011
AND DISTRIBUTION
TUNA
PRODUCTS
FROZEN
SHRIMP
DOMESTIC
PRODUCTS
CANNED
PETFOOD
CANNED
SEAFOOD
SHRIMP
FEED
SALMON
CANNED FROZEN
SARDINE AND CEPHALOPOD
MACKEREL
2011 SALES BREAKDOWN
USA
EUROPE
JAPAN
DOMESTIC
SALES
AFRICA OCEANIA ASIA MIDDLE
(NON-JAPAN) EAST
CANADA
SOUTH
AMERICA
2011 SALES DISTRIBUTION

THAI UNION FROZEN PRODUCTS PCL.
CORPORATE
HISTORY
AND
TUF’s long history of frozen seafood processing
and export started in 1988 with Bt25-million
initial capital. Later in 1992, we embarked on
a joint venture with Mitsubishi Corporation and
Hagoromo Foods Corporation, both of which
are our Japanese business alliances that have
concurrently taken dual roles as our authorized
product distributors as well as our valued
customers. Their efforts have played critical roles
in the development of our products, enabling us
to reach high industry standards and compete
in the international marketplace. In 1994, we
became a publicly traded company on the Stock
Exchange of Thailand and ever since we have
continually increased our share capital. Today,
our registered capital amounts to Bt1,000,000,000
at Bt1 par value, with paid-up capital of
Bt956,329,407 or 956,329,407 shares.
Through the years since our inception, we
have operated our business under prudential
operations possible. This has been further
strengthened by our expertise acquired through
decades of hands-on industry experience and
visionary executive members. These factors in
combination have yielded our business success,
Vision
We strive to be the “Chef of the World” creating
and providing high quality and innovative cuisine
stakeholders’ ever evolving demands.
Mission
in people and creating opportunities for
our people with a better quality of life.
delicious and convenient food products
and simultaneously as a fair and responsible
partner for all of our stakeholders with a
commitment to building long-term mutually
successful relationships.
advocate for the seafood industry both in
Thailand and among the world business
communities.
corporate citizen with long-term commitment
to protect the environment and our Earth’s
resources.
22 ANNUAL REPORT 2011

Development within 2011
1. The Company issued debentures worth
Bt6,750 million to prepay part of its existing
loans and to reduce funding cost. The issued
debentures are of 3-year, 5-year and 10-year
maturity with respective coupon rates of
4.51%, 4.70% and 5.02%. The series of bonds,
assigned A+ rating from TRIS Rating, were
successfully placed to a group of institutional
and high net worth investors.
2. The Company sought to acquire more shares
of PT Juifa International Foods Co., Ltd., one
of its subsidiaries and a leading Indonesiabased
canned tuna processor and exporter,
from 76.50% to 88.78%. The Company’s Board
of Directors has already given its approval
to the plan since November 7, 2011 and
implementation is currently in process.
3. The Company’s Board of Directors’ Meeting,
held on December 21, 2011, approved
a resolution for the Company to make a
voluntary tender offer for all shares of Pakfood
Public Company Limited (PPC or Pakfood).
The Share Sale and Purchase Agreement
(SPA) was signed by the Company and
PPC’s major shareholders on the same day.
The acquisition will be executed when all
conditions precedent stated in the SPA are
equal to the net book value per share of
statements for the year 2011 ended
December 31, 2011.
PPC operates as a leading Thai processor, exporter
and distributor of seafood products, ready meal
frozen. PPC has issued and paid-up share capital
of Bt300,000,000 comprising 30,000,000 issued and
paid-up ordinary shares at par value of Bt10 per
share (as of September 30, 2011).
The business alliance forged by both companies
including, among others, raw material sourcing
and inventory management, manufacturing
capability management and market coverage.
The new alliance will therefore offer great
potential to increase their respective revenues
in the domestic and international markets on
continued basis.
ANNUAL REPORT 2011
23

THAI UNION FROZEN PRODUCTS PCL.
MW BRANDS
HOLDINGS SAS
JOHN WEST
currently the dominant market player in canned
seafood sector in three major European markets; the
market share of 29%, 70% and 34%, respectively.
Underpinned by the brand’s long commercial history,
John West today has strong product offerings, ranging
diversely from tuna, salmon, sardine to mackerel,
other seafood choices and to fully-processed
value-added meal and snack products. In its most
recent business milestone, John West’s logo has
been changed as part of its rebranding process.
PETIT NAVIRE
Launched in 1932, Petit Navire is currently the
market-leading canned seafood brand in France
with tuna, sardine, mackerel and value-added
varieties as its core products.
In 2011, the total market value of canned seafood
sector in France amounted to EUR825 million
(as of December 2011). Petit Navire and Hyacinthe
Parmentier collectively carved as much as 28%
In addition, MW Brands owns the following four
manufacturing facilities in strategic locations with
convenient access to sources of raw materials, thus
providing it with superior cost control advantages,
namely:
1. The processing plant of Ets Paul Paulet in
France; for value-added seafood products,
such as fully-processed ready meals and
seafood spread products
2. The processing plant of European Seafood
Investment Portugal, Lda. in Portugal; for
sardine and mackerel products
3. The processing plant of Pioneer Food Company
in Ghana; for canned tuna and tuna loin varieties
4. The processing plant of Indian Ocean Tuna Ltd.
in Seychelles; for canned tuna products
24 ANNUAL REPORT 2011
Business Strengths
Following an integration of competitive advantages
between TUF and MW Brands, the synergistic
processor and distributor with the capability of
global raw material procurement, manufacturing
and competitiveness, as summarized below:
and raw material procurement on the back of
strategically located manufacturing bases in
Ghana and Seychelles, one of the world’s largest
performance as well as facilitate greater access
to real-time in-depth information on the trend
of raw material prices and availability.

THAI UNION FROZEN PRODUCTS PCL.
MW Brands is a major fully integrated processor and distributor of canned seafood products with a strong
market presence in Europe. The extensive product range of MW Brands consists of tuna, salmon, sardine,
mackerel, value-added tuna and other seafood-based products, which are marketed under the following
trademarks:
HYACINTHE PARMENTIER
Unveiled in 1883, the core product under Hyacinthe
Parmentier trademark is sardine. The brand currently
enjoys a dominant market position in the French
market.
MAREBLU
Unveiled in 1960 in Italy, the core product range
under Mareblu trademark covers tuna, sardine
and mackerel. Mareblu is currently the third largest
player in the Italian canned seafood sector with a
6% share out of the total canned seafood market
value of EUR982 million (as of December 2011).
market share, thereby making them category
leader in the French market.
an objective to achieve maximum productivity
and become a leaner manufacturing chain.
products, such as tuna oil and pet food.
manufacturing bases in African, Caribbean
of import tariffs on canned seafood products
bound for the European Union, compared with
the normal import duty of as high as 24% being
imposed on Thai imports.
Market Strengths
in the seafood sector in Europe (the world’s
largest canned seafood consuming region) will
presence and expanding its existing European
market base.
sales distribution between its main markets,
namely the U.S., Europe and Asia.
Brand Strengths
lifted to 52% whilst private label sales are
accordingly lowered to 48%.
established and highly recognized by European
consumers. These market-dominant trademarks
are John West, Petit Navire, Hyacinthe Parmentier
and Mareblu.
ANNUAL REPORT 2011
25

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products PCL.
NATURE OF
BUSINESS
GROUP 1
Production and Export of Frozen and Canned Food Products
Thai Union Manufacturing Co., Ltd.
Songkla Canning PCL.
Thai Union Seafood Co., Ltd.
90.08%
90.44%
51.00%
GROUP 2
Production and Distribution of Packaging Products
Thai Union Graphic Co., Ltd.
90.50%*
74.00%
GROUP 3
Production and Distribution of Animal Feeds and Agriculture Products
Thai Union Feedmill Co., Ltd.
51.00%
Thai Quality Shrimp Co., Ltd.
Thai Union Hatchery Co., Ltd.
95.00%***
99.99%***
GROUP 4
Food Business in Domestic Market
T-Holding Co., Ltd.
90.00%
26

THAI UNION FROZEN PRODUCTS PCL.
GROUP 5
Overseas Investments
Thai Union International, Inc.
100.00%
Tri-Union Seafoods, LLC. (Chicken of the Sea International)
Tri-Union Frozen Products, Inc.
(Empress International Ltd. and Tri-Union Frozen Foods, LLC were merged)
U.S. Pet Nutrition, LLC
- Canadian Pet Nutrition, ULC
100.00%
82.00%
99.00%
100.00%
Thai Union Investment Holding
100.00%
MW Brands Holdings SAS
100.00%
PT Juifa International Foods Co., Ltd.
Yueh Chyang Canned Food Co., Ltd.
76.50%
51.00%*
Associated Companies
Lucky Union Foods Co., Ltd.
Biz Dimension Co., Ltd.
Avanti Feeds Limited
TN Fine Chemicals Co., Ltd.
Avanti Thai Aqua Feeds Private Ltd.
Moresby International Holdings, Inc.
25.00%
20.00%
14.99%
48.97%**
50.00%
33.33%**
* Invested by Songkla Canning PCL.
** Invested by Thai Union Manufacturing Co., Ltd.
*** Invested by Thai Union Feedmill Co., Ltd.
27

Investments in Subsidiaries and
ASSOCIATED
COMPANIES
TQS
TUI

CAPN TUIH YCC
ATA
MIH

THAI UNION FROZEN PRODUCTS PCL.
THAI UNION MANUFACTURING CO., LTD. (TUM)
ASIAN-PACIFIC CAN CO., LTD. (APC)
Tel:
Fax:
Factory:
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
979/13-16 M Floor, S.M. Tower, Phaholyothin
Road, Samsennai, Phayathai, Bangkok 10400
66 (0) 2298-0025, 298-0421 - 32
66 (0) 2298-0027 - 28
30/2 Moo 8, Sethakit 1 Road, Tambon Tarsrai,
Amphoe Mueang Samutsakhon,
Samutsakhon 74000
66 (0) 3441-2210, 3481-6441 - 4
66 (0) 3442-5459
Processor and exporter of canned tuna
and petfood
March 1994
(Additional investment in June 1999)
Common share 90.08% or 27,025,360 shares
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
38/70 Moo 8, Sethakit 1 Road, Tambon Tarsrai,
Amphoe Mueang Samutsakhon,
Samutsakhon 74000
66 (0) 3442-3401 - 6
66 (0) 3442-1493
Manufacturer and distributor of steel and
aluminum food packaging products
December 1993
Common share 90.50% or 181 shares
(Invested by Songkla Canning PCL.)
THAI UNION GRAPHIC CO., LTD. (TUG)
Tel:
Fax:
Factory:
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
979/9-10 12th Floor, S.M. Tower, Phaholyothin
Road, Samsennai, Phayathai, Bangkok 10400
66 (0) 2298-0029
66 (0) 2298-0442 - 3
Amphoe Mueang Songkhla, Songkhla 90100
66 (0) 7433-4005 - 8
66 (0) 7433-4009
Processor and exporter of canned seafood
October 1995
(Additional investment in March 1999)
Common share 90.44% or 32,556,819 shares
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Website:
255 Smaedam Road, Smaedam,
Bangkhunthian, Bangkok 10150
66 (0) 2415-5808 - 9, 2895-5865 - 6
66 (0) 2415-4371
One-stop-service offset printing house
specialized in standard high-quality printouts
July 1995 (Additional investment in May 2001)
Common share 74.00% or 2,960,000 shares
http://www.thaiuniongraphic.com
THAI UNION SEAFOOD CO., LTD. (TUS)
THAI UNION FEEDMILL CO., LTD. (TFM)
Tel:
Fax:
Factory:
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
979/8 12th Floor, S.M. Tower, Phaholyothin
Road, Samsennai, Phayathai, Bangkok 10400
66 (0) 2298-0024
66 (0) 2298-0550
77 Moo 5, Songkhla-Ranot Road, Tambon
Watkanun, Amphoe Singhanakhon,
Songkhla 90330
66 (0) 7448-3482 - 7
66 (0) 7448-3480
Processor and exporter of frozen shrimp
December 1996 (Additional investment
in March 2005 and October 2008)
Common share 51.00% or 20,400,000 shares
Tel:
Fax:
Factory:
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Website:
Amphoe Mueang Samutsakhon,
Samutsakhon 74000
66 (0) 3441-7222
66 (0) 3441-7255, 3488-5125
103/1 Moo 2, Songkhla-Ranot Road,
Tambon Pak-Trae, Amphoe Ranot, Songkhla 90140
66 (0) 7439-6933 - 7
66 (0) 7439-6938
Processor and exporter of animal feeds
June 2000 (Additional investment in May 2001,
October 2006 and August 2010)
Common share 51.00% or 25,500,000 shares
http://www.thaiunionfeedmill.com
30 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
TQS
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Amphoe Mueang Samutsakhon,
Samutsakhon 74000
66 (0) 3441-7222
66 (0) 3441-7255
Producer and distributor of nauplii and
postlarvae shrimps. Research and
development of new shrimp breeds.
July 2004
(The capital decrease in December 2007)
Common share 95.00% or 379,995 shares
(Invested by Thai Union Feedmill Co., Ltd.)
TUI
THAI UNION INTERNATIONAL, INC. (TUI)
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Sorrento South Corporate Center
9330 Scranton Road, Suite 500, San Diego,
California 92121, USA
(858) 558-9662
(858) 597-4566
A holding company for investment in USA
April 1996
Common share 100.00% or 10,000,000 shares
THAI UNION HATCHERY CO., LTD. (TUH)
TRI-UNION SEAFOODS, LLC. (TRI-U)
Tel:
Fax:
Factory:
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Amphoe Mueang Samutsakorn, Samutsakhon 74000
66 (0) 3441-7222
66 (0) 3441-7255
Amphoe Takua Pa, Phangnga 82140
66 (0) 7658-4000 – 27
66 (0) 7658-4028 – 9
produce and distribute high-quality nauplii
and postlarvae to farmers
April 2006 (Additional investment in
November 2007 and April 2011)
Common share 99.99% or 29,999,974 shares
(Invested by Thai Union Feedmill Co., Ltd.)
Tel:
Fax:
Type of Business:
Equity:
Date of Investment:
Type/% Holding/
No. of Shares:
Website:
Sorrento South Corporate Center
9330 Scranton Road, Suite 500, San Diego,
California 92121, USA
(858) 558-9662
(858) 597-4566
Processor and distributor of canned seafood
under “Chicken of the Sea” brand
USD62,390,422
July 1997
(Additional investment in January 2001)
100.00%
(Invested by Thai Union International, Inc.)
(No share issued)
http://www.chickenofthesea.com
T-HOLDING CO., LTD. (THD)
TRI-UNION FROZEN PRODUCTS, INC. (TUFP)**
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Website:
Bangkok 10150
66 (0) 2898-8200
66 (0) 2895-3001
Distributor of “Fisho”,“Sealect” and “Bellotta”
product lines
November 1996
Common share 90.00% or 6,300,000 shares
Tel:
Fax:
Tel:
Fax:
Type of Business:
Registered Capital:
Type/% Holding/
No. of Shares:
222 N. Sepulveda Blvd, Suite 1550,
El Segundo CA 90245 USA
(866) 572-0996
(310) 469-7037
5 Dakota Drive, Suite 303, Lake Success,
NY 11042 USA
(516) 740-4100
(516) 621-0199
Importer and distributor of frozen
seafood products
Common share 5,800 shares at USD0.001
Common share 68.97% or 4,000 shares
Preferred share100.00 or 4,200 shares
(Invested by Thai Union International, Inc.)
**Empress International Ltd. and Tri-Union Frozen Foods, LLC were merged
ANNUAL REPORT 2011
31

THAI UNION FROZEN PRODUCTS PCL.
U.S. PET NUTRITION LLC. (USPN)
MW BRANDS HOLDINGS SAS (MW BRANDS)
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
9330 Scranton Road, Suite 500,
San Diego CA 92121 USA
(858) 558-9662
(858) 597-4566
Processor and distributor of wet and
dry pet food
USD1
October 2010
Common share 99.00%
(Invested by Thai Union International, Inc.)
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Paris, France
(33) 1-53-77-53-53
(33) 1-53-77-17-13
Processor and exporter of canned seafood
in Europe
October 2010
Common share 100.00% or 31,367,000 shares
(Invested by Thai Union Investment Holding)
CAPN
CANADIAN PET NUTRITION, ULC (CAPN)
PT JUIFA INTERNATIONAL FOODS CO., LTD. (JIF)
Tel:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
(250) 762-5434
Processor and distributor of pet food
July 2011
Common share 100.00%
(Invested by U.S. Pet Nutrition LLC.)
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
JL. Lingkar Timur No.53
Tegalkamulyan Cilacap 53211
Jawa Tengah, Indonesia
(62-282) 521-002 - 5
(62-282) 521-007
Processor and exporter of canned
tuna products
May 2006
Common share 76.50% or 20,655 shares
TUIH
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
8th Floor, Medine Mews, La Chaussee Street,
Port Louis, Mauritius
A holding company for investment in Europe
June 2010
Common share 100.00% or 22,000,001 shares
YCC
YUEH CHYANG CANNED FOOD CO., LTD. (YCC)
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Long An Provice, People’s Republic
(84) 072-387-2377
(84) 072-387-2388
Processor and exporter of canned seafood
USD1,919,936
December 2007
51.00%
(Invested by Songkla Canning PCL.)
32
ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
TN FINE CHEMICALS CO., LTD. (TNFC)
Factory:
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
1/74-75 Samutsakhon Industrial Estate,
Tambon Tarsrai, Amphoe Mueang
Samutsakhon, Samutsakhon 74000
66 (0) 3449-0330, 3449-0009
66 (0) 3449-0008
Processor and exporter of imitation crab stick
June 1990
(Additional investment in March 2004)
Common share 25.00% or 375,000 shares
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
30/2 Moo 8, Sethakit 1 Road, Tambon Tarsrai,
Amphoe Mueang Samutsakhon,
Samutsakhon 74000
66 (0) 3442-3686
66 (0) 3442-3688
Processor and exporter of seafood
by-products, i.e. high grade oil extracts from
shell.
March 2009
Common share 48.97% or 4,407 shares
(Invested by Thai Union Manufacturing Co., Ltd.)
BIZ DIMENSION CO., LTD. (BZD)
ATA
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
979/79-80 26th Floor, S.M. Tower,
Phaholyothin Road, Samsennai,
Phayathai, Bangkok 10400
66 (0) 2298-0345
66 (0) 2298-0331 - 3
E-Procurement Service Provider
September 2003
Common share 20.00% or 1,000,000 shares
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
G2, Concorde Apartments, 6-3-658,
Somaji Guda, Hyderabad 500 082,
Andhra Pradesh, India
91-40-2331-0260, 2331-0261
91-40-2331-1604
Processor and exporter of shrimp feed
and frozen shrimp
Bt55,440,000
September 2009
Common share 50.00%
MIH
MORESBY INTERNATIONAL HOLDINGS, INC. (MIH)
Tel:
Fax:
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
G2, Concorde Apartments, 6-3-658,
Somaji Guda, Hyderabad 500 082,
Andhra Pradesh, India
91-40-2331-0260, 2331-0261
91-40-2331-1604
Processor and exporter of shrimp feed
and frozen shrimp
October 2008
Common shares 14.99% or 1,199,000 shares
Type of Business:
Registered Capital:
Date of Investment:
Type/% Holding/
No. of Shares:
Unit 4, 2nd Floor ADF Haus, Musgrave St.
Port Moresby, Papua New Guinea
A holding company set up for investment in
Majestic Seafood Corporation Ltd. in Papua
New Guinea which operates tuna processing /
maritime areas
USD1,500,000
October 2009
Common share 33.33%
(Invested by Thai Union Manufacturing Co., Ltd.)
Remark: Phuket Fishing Co.,Ltd., Samui Fishing Co.,Ltd., Phang-nga Fishing Co.,Ltd.,
group have terminated their operations and completed registeration procedures for
business dissolution and liquidation in 2011
ANNUAL REPORT 2011
33

THAI UNION FROZEN PRODUCTS PCL.
Sales Structure of
TUF AND
SUBSIDIARIES
Unit: Million Baht
Product
Business Group
Company
%
by
TUF
2011 2010 2009
Sale % Sale % Sale %
Group 1
Production and
Export of Frozen
and Canned Food
Products
Thai Union Frozen Products PCL.
Thai Union Manufacturing Co., Ltd.
Songkla Canning PCL.
Thai Union Seafood Co., Ltd.
TUF
TUM
SC
TUS
-
90.08
90.44
51.00
13,276.77
15,175.86
6,557.31
1,531.51
13.5
15.4
6.6
1.6
11,961.94
12,624.51
5,374.85
1,487.42
16.7
17.7
7.5
2.1
13,116.93
12,416.72
5,535.89
1,199.42
19.0
18.0
8.0
1.7
Group 2
Production and
Distribution of
Packaging Products
Thai Union Graphic Co., Ltd.
APC
TUG
90.50*
74.00
799.06
187.00
0.8
0.2
496.92
241.32
0.7
0.3
418.47
240.16
0.6
0.3
Group 3
Production and
Distribution of
Animal Feeds and
Agricultural Products
Thai Union Feedmill Co., Ltd.
Thai Union Hatchery Co., Ltd.
TFM
TQS
TUH
51.00
95.00*
99.99*
4,978.25
23.41
88.48
5.0
0.0
0.1
4,758.23
27.81
78.03
6.7
0.1
0.0
3,964.69
27.44
130.93
5.8
0.0
0.2
Group 4
Food Business in
Domestic Market
T-Holding Co., Ltd.
THD
90.00
1,813.86 1.8
1,514.02
2.1
1,282.66
1.9
Group 5
Overseas
Investments
Thai Union International, Inc.
Tri-Union Seafoods, LLC.
TUI
Tri-U
100.00
100.00*
N/A
13,080.19
N/A
13.3
N/A
12,860.20
N/A
18.0
N/A
15,489.63
N/A
22.5
Tri-Union Frozen Products, Inc.
TUFP
82.00*
18,594.08
18.8
(Empress International Ltd. and
11,713.50
16.4
10,136.60
14.7
Tri-Union Frozen Foods, LLC. were merged)
4,396.97
6.2
4,048.47
5.9
Thai Union Investment Holding
TUIH
100.00
N/A
N/A
N/A
N/A
N/A
N/A
MW Brands Holdings SAS
MWB
100.00*
21,867.85
22.2
2,820.32
3.9
N/A
N/A
U.S. Pet Nutrition LLC.
USPN
99.00*
N/A
N/A
N/A
N/A
N/A
N/A
Canadian Pet Nutrition, ULC.
CAPN
100.00*
N/A
N/A
N/A
N/A
N/A
N/A
PT Juifa International Foods Co., Ltd.
JIF
76.50
437.26
0.4
503.86
0.7
401.71
0.6
Yueh Chyang Canned Food Co., Ltd.
YCC
51.00*
259.49
0.3
647.50
0.9
584.77
0.8
Group 6
(All Companies have
terminated their
operations and
completed
registeration procedures
for business dissolution
and liquidation in 2011)
Phuket Fishing Co., Ltd.,
Samui Fishing Co., Ltd.,
Phang-nga Fishing Co.,Ltd.,
Songkla Fishing Co., Ltd.,
Siam Fishing Pte. Ltd.
98,670.38 100.0
71,507.40 100.0 68,994.49 100.0
Remark: The above data refers to sales structure after exclusion of connected transactions. The total sales of tuna vessel business group are derived
from sales made to member companies in Thai Union Group and therefore regarded wholly as connected transactions.
CAPN holding owned by USPN

THAI UNION FROZEN PRODUCTS PCL.
NATURE OF
MAIN BUSINESS
MAJOR EXPORT PRODUCTS
Canned/Pouched/Seal-contained Tuna
Frozen tuna is selected, defrosted, steamed,
pouched/seal-contained as per customer
requirements. In order to enrich nutritional value
soybean oil, olive oil or different seasoning sauces.
After sealing, the products undergo sanitary
Frozen Shrimp
White shrimp is processed or boiled under
standardized manufacturing process before
proceeding to freezer, being packaged and ready
for shipment to consumers worldwide. Frozen shrimp
products are available in a wide variety, ranging
from whole, headless, tail-on, headless and shelled,
boiled and to value-added products, e.g. sushi and
breaded. In addition, pouched products are also
available for more convenient preparation.
Canned/Pouched/Seal-contained Seafood
Selected raw materials, like shrimp, crab, squid
and baby clam, are shelled, boiled and brined
before being canned/pouched/seal-contained,
respectively. Sealed products are sterilized and
Canned/Pouched Sardine and Mackerel
Standard-quality fresh and frozen sardine and
mackerel, locally procured or imported, are
selected, cleaned, canned or pouched as per
customer requirements and cooked, respectively.
After cooking, the products receive appropriate
measure of certain ingredients, e.g. tomato sauce,
nutritional value and taste. Sealed products are

Frozen Tuna Loin
Frozen tuna is selected, defrosted, steamed
standards, then vacuum-packed and re-frozen,
respectively, to preserve natural nutritional value
before export and domestic sales. Tuna raw
areas and of various species, e.g. Skipjack,
Frozen Cephalopod
Imported fresh and frozen cephalopod in
conformity with required standards undergoes
with processing expertise and technique under
quality-oriented environment to preserve natural
freshness. The raw materials are processed to
become standard value-added products as per
customer requirements, e.g. sashimi and breaded.
Frozen Salmon
Imported fresh salmon under Norwegian and
Chilean selection and quality standards, rich in
Protein and Omega-3, is processed and valueadded.
Through expert and skillful manufacturing
techniques, fresh salmon is made into processed
varieties where natural freshness and original taste
are perfectly preserved.
Ready-to-Eat Frozen Food
Frozen fully processed food is developed, innovated
and prepared by using meticulously selected raw
materials in combination with authentic premium
ingredients directly imported from original sources
for international dishes, or with nutrient-rich local herbs
for original Thai dishes. Together, the raw materials and
processing environment designed to best preserve
natural taste as if freshly cooked right from kitchen.
Bakery
Creative research and development efforts
proudly lead to delectable bakery delights under
modern manufacturing environment to serve
domestic and international quality-conscious
consumers.
Canned/Pouched/Seal-contained Pet Food
Fresh tuna loin is mixed with other raw materials
or ingredients to enrich nutrition and taste as per
customer requirements before being canned/
respectively.

MAJOR DOMESTIC PRODUCTS
Sealect Family: Canned Fish
Premium quality raw materials are processed in conformity with internationally recognized standards.
“Sealect” family includes the following varieties:
1. Classic Canned Tuna comprises the following
varieties:
Steak in Brine, Tuna Steak in Spring Water, Tuna
Tuna Sandwich in Spring Water
2. Thai-style Flavored Canned Tuna comprises
the following varieties: Stir-fried Tuna with Chili
and Basil (Tuna Paad Prig Baikaprao), Stir-fried
Tuna with Red Chili (Tuna Paad Prig), Tuna
Mussaman Curry (Mussaman Tuna), Stir-fried
Tuna Curry (Panaeng Tuna), Tuna Chili Curry
Soup (Nam Prig Tuna), Tuna Curry Soup (Naam
Ya Tuna), Stir-fried Tuna with Black Pepper
(Tuna Paad Prig Thai Dum) and Stir-fried Tuna
with Roasted Chili Paste (Pad Prig Pao Tuna)
3. Tuna Salad in Mayonnaise comprises the
following varieties:
Spread and Shrimp Spread.
Salad Cream with Tuna, Salad Cream with
Seafood, Thousand Island Salad Cream with
Isolated Soy Protein
5. Seasoned Tuna; available in 3 recipes: Stir-fried
Tuna in Chili Paste (Tuna Prung Rod Naam Prig
Paad), Stir-fried Tuna in Pickled Fish (Tuna Prung
Rod Pla Raa) and Stir-fried Tuna in Spicy Salad
(Tuna Prung Rod Larb)
6. Mackerel in Tomato Sauce
7. Sardine in Tomato Sauce and Sardine in Spicy
Dressing
8. Sanma in Tomato Sauce
9. Grilled Saba in Kabayaki Sauce and Saba in
Teriyaki Sauce

Fisho Family: Fish-based/Squid-based Snack
14001accreditation body guarantees that “Fisho” is hygienically produced and has attained standard
environmental performance. Through continued product development efforts, “Fisho” has been
1. Seasoned and Shredded Fish Snack
Fisho Original;
Tasty, Squid and Soy Sauce in various pack
sizes from 7 to 52 grams
Fisho iDee:
Fisho Dino Master Character; available in 3
2. Seasoned Fish Slice; broken into the following
varieties:
2.1 Seasoned Fish Slice in Dipping Sauce
Pepper Crab and Shrimp Paste
2.2 Seasoned and Baked Fish Slice; available in
3. Crispy Seasoned and Baked Fish Slice;
Dipping and Tasty Squid

Bellotta Family: Pet Food
Bellotta is broken into 5 groups:
1. Packaged Dog and Cat Food (Premium Grade)
Beef Loaf Balanced Nutrition, Chicken in Jelly
with Oligofructose, Chicken in Jelly Topping
Tuna with Omega 3, Chicken in Jelly Topping
Chicken Loaf
Imitation Crab Meat, Tuna Light Meat in Jelly
Topping Shrimp, Tuna Light Meat in Jelly Hair
Ball Control, Tuna Light Meat Mixed Beef in
Jelly, Tuna Light Meat Mixed Cheese in Jelly
2. Cup-packaged Cat Food (Premium Grade)
Salmon with Anchovy in Gravy, Tuna with
Scallop in Gravy and Tuna with Crab in Gravy
3. Canned Dog and Cat Food
Chicken Loaf Mixed Rice (With L-carnitine),
Gravy and Beef Chunk Topping Chicken Ham
in Gravy
5 flavors - Tuna in Jelly Topping Chicken
(3 Layers), Tuna Chunk Mixed Tuna Flake in
Gravy (Lutein Added), Tuna in Jelly Topping
Shrimp, Tuna in Jelly Topping Chicken and
Tuna Topping Shirasu
4. SLU-pouched Dog and Cat Food
in Gravy and Beef Chunk in Gravy
Tuna Mixed Chicken Chunk in Jelly, Tuna Mixed
Sardine in Jelly, Tuna Mixed Beef in Jelly, Tuna
in Jelly and Seafood Platter
5. Cup-packaged Dog and Cat Food
Salmon Gravy with Real Salmon and Liver
Gravy with Real Liver
and Shrimp Gravy with Real Shrimp

THAI UNION FROZEN PRODUCTS PCL.
RELATED
BUSINESS GROUPS
)
and distributor of steel and aluminum food packaging
products (conventional lid and 2-piece easy-open lid).
During 2011, APC continued to see good growth
with 12.8% increase in annual sales. The sales
growth for the year was mainly contributed by
stronger market demand by up to 30% year-on-year
for empty can with easy-open lid (EOE) category.
In addition, sales performance was also pleasing
and improving, with up to 60% annual growth,
among target customer groups outside Thai Union
Group as a result of customer base expansion
efforts made during the year.
In respect to overall market environment for
aluminum food package products in Thailand,
the industry saw a 8% year-on-year decline in
market growth rate during the year thanks primarily
materials, when compared to imported counterparts
with more competitive prices. However, downward
movement in material prices was later observed
during mid-year to year-end to USD400 per metric
ton on average, with tendency towards further
decline until early 2012.
Purchase plan for additional machinery from
Songkla Canning PCL., its parent company, has
been included in APC’s strategy for 2012. APC
anticipates that the additional machinery should
be ready for production in the second quarter of
2012 and should increase monthly production
capacity for 307-mm can size to 5 million sets.
Thai Union Graphic Co., Ltd. (TUG)
Thai Union Graphic Co., Ltd. (TUG) offers high-quality
offset printing services through fully-integrated
one-stop-service, enhanced technological
capabilities and guaranteed after-sales services.
Throughout its presence in printing industry, TUG
printing service is critical to the attainment of
its business objectives. Therefore, continued
improvements in modern technological capabilities
have been constantly areas of strong focus at
TUG in order to best meet customer demand and
ensure highest satisfaction among customers from
each industry. In addition, TUG believes in the
importance of human capital in its business and
the vital contribution it makes to business success.
This belief has led TUG to constantly improve its
breadth of people to become printing specialists
who are readily equipped with skills and knowledge
to effectively provide consulting service and meet
virtually every printing need of customers.
The printing industry has been characterized
past several years, with tendency towards more
competitive pressure each year. In order to stay
competitive amidst such an industry landscape,
TUG differentiates itself from its printing sector peer
group by extending its range of service offerings to
drive customer value. Packaging design service
features computer-aided design with over 2,000
available formats and styles for customer to
choose from. Sample cutting service is made
possible through its sample cutter, which is capable
of providing customer with realistic overview of
40 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
printing output before actual printing. Besides,
TUG also attempts to shorten production lead time
through the entire printing process in order to
achieve greater customer satisfaction.
TUG’s 2012 business plan includes provision and
installation of a rolled sticker printer in response to
stronger market demand. The machine has printing
capacity in excess of 20 million stickers per month.
T-Holding Co., Ltd. (THD)
T-HOLDING CO., LTD. (THD) is a marketing
communications strategy consultant and a
distributor of branded products under “Sealect”,
“Fisho” and “Bellotta” trademarks for domestic
market in Thailand.
“Sealect” Family
2011 saw an overall 6% growth rate in Thai canned
second most dominant brand with 12% annual
growth rate. Nevertheless, Sealect branded products
continued to maintain its leadership in domestic
Thai canned tuna market with robust growth rate
of up to 27% during the year. Throughout the entire
year, Sealect constantly deployed marketing
communications strategy through all available
media. In parallel with the implementation of
marketing communications strategy, continual
of its product offerings essentially to best meet
consumer needs.
Current tuna consumption among Thai consumers
amounts only to 40 grams/person/year. Comparatively,
annual domestic sardine/mackerel consumption
per person stands at 850 grams, or 21 times higher
than that of tuna. Based on the research data,
Sealect managed to launch proactive marketing
efforts to promote increased tuna consumption
among Thai consumers. New products were
launched under “seasoned tuna category”; Stir-fried
Tuna in Chili Paste (Tuna Prung Rod Naam Prig
Paad) and Stir-fried Tuna in Pickled Fish (Tuna Prung
Rod Pla Raa). The two new Sealect innovative
products feature brilliant combination of wholesome
tuna texture and Thai traditional spices and
condiments to create tasty recipes that are much
favored among Thai consumers. Both new products
reported strong consumer feedback on the back
of their two obvious advantages; affordable retail
price that offers excellent value for money for
consumers; and their favorably distinctive taste.
Consumers can enjoy the products right out of
the can, along with freshly cooked rice, with no
additional preparation required. Alternatively,
consumers can also use the products as main
ingredient in variety of delicious dishes such as
fried rice, sandwich, sautéed vegetable, to name
but a handful, simply for the sake of enhanced
among consumers.
In regard to business strategy in 2012, Sealect
market-leading canned tuna producer in domestic
to adhere to its marketing concept with strong
focus on promoting higher tuna consumption
among Thai consumers as alternative substitute
for conventional meat such as pork and
chicken. Canned tuna products have an array of
advantages that suit well with hectic lifestyle led by
Among those advantages include storage and
derived from naturally digestible tuna texture with
low fat yet high DHA composition. In consideration
of these intrinsic value and advantages of its
canned tuna products, Sealect plans to deploy
360-degree marketing communications strategy
with main feature involving suggested product
application in a number of simple, appetizing
and time-saving Thai dishes beyond imagination
of most consumers. Sealect anticipates that the
campaign should boost sales growth and broaden
customer base for canned tuna products in Thailand
by over 20% against an average of mere 6% perennial
market growth per annum in the past.
As for sardine/mackerel products, Sealect aims
to capture new generation consumers through
building their perceptions of Sealect as a decided
brand of choice with attractiveness, modernity
and accessibility and being commonly favored
among the new generations. In order to implement
the brand awareness campaign, major Sealect’s
ANNUAL REPORT 2011
41

THAI UNION FROZEN PRODUCTS PCL.
strong points will be emphasized to attract target
consumers. Among those strong points include
meticulously selected quality tuna chunks and
Royal Project. The procurement of tomato sauce
reliable quality ingredient while also providing
additional earning channel to those local growers
participating in the royal project.
“Fisho” Family
had negative impacts on Fisho’s annual sales
performance. Both target consumers and retail
stores opted to purchase only necessary living
Besides, scheduled promotional campaigns in
conjunction with participating retail stores and
general grocery outlets during the ending quarter
of the year were all unable to implement. As fourth
sales of Fisho [and other products in the snack
industry], the impossibility to carry out planned
promotional campaigns during the period resulted
in sales below target. Despite a host of unfavorable
trading factors during the year, Fisho still managed
to deliver a creditable 3% annual sales growth.
In 2012, Fisho has set its annual growth target at
20% although the annual growth rate of overall
level. Fisho expects to increase its market share to
15% by 2012 year-end via fully integrated brand
building campaign in order to further enhance its
brand strength. Along with the efforts to increase
will also be promoted in parallel with reinforcement
of brand perception and brand awareness among
teen and new generation consumers, its main target
groups during 2012.
Aside from attempting to promote greater brand
recognition among target consumers, a number of
improvements will be made across Fisho product
ranges. Among them is product re-formulation that
encompasses taste, aroma and texture quality to
achieve greater consumer satisfaction. During
re-formulation process, research efforts will be
made to create the best new Fisho formulation.
Moreover, improvements in packaging formats
and styles will also be made to better suit target
groups as well as to project Fisho’s unique brand
image when it is distributed to sales outlets.
Majority of sales efforts during 2012 will be taken
through constant promotional activities to be
implemented in partnership with participating
convenience stores, one of the major sales
channels for Fisho and other snack products.
Aside from this, special attention will be given
to on-shelf product orientation and display to
among consumers within store environment, both
in retail stores and general grocery outlets in regions.
Sales activities during 2012 will be focused more on
product distribution in regional areas. In the mean time,
in addition to conventional general grocery outlet.
2012 will also see more joint promotional campaigns
between Fisho and other alliance commodities.
“Bellotta” Wet-based Dog and Cat Food Family
An increasingly upward trend in keeping pets has
been obvious recently along with constantly growing
interest among keen keepers in the quality and
nutritious value of pet nourishment. Underpinned
by these favorable trading conditions, “Bellotta”
wet-based dog and cat food products have
successfully broaden their customer base accordingly
over the years. In particular, the cat food product
ranges under premium category have proved
widely popular among target customers due to
their trust in Bellotta’s product quality and brand
strength. Such this strong customer acceptance
and feedback are creditably achieved through
a number of contributing factors. Export-standard
processing facilities, coupled with top-quality raw
materials of tuna light meat, play crucial roles in
acquiring the reputation and brand loyalty among
the target customers. In addition, strong product
offerings are another major factor, as demonstrably
evident from a broad range of available product
choices, taste varieties and formulae. Moreover,
Bellotta has continually introduced innovative
packaging designs and formats in order to best
meet cat’s appetite and every need and functional
requirement by pet keepers.
42 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Bellotta continued to see good growth in 2011
albeit a number of unusually severe natural disasters
during the year. Sales were substantially generated
from the cat food products, accounting for 70% of
total Bellotta sales. While there were less deployment
of marketing communications and public relations
materials in the year, stronger focus was shifted to
marketing campaigns designed to gain business
foothold in new potential market frontiers. In order
to materialize the strategy, Bellotta-sponsored dog
and cat contest events were launched both on
regional and national levels to further promote brand
recognition and loyalty among target customers.
Bellotta’s marketing strategy for 2012 will continue
to center on cat food products. In parallel with
into premium pellet cat food to extend its branded
product range under premium category. There will
be an intense focus on direct and comprehensive
access to target customer groups and commercial
stores. Joint sales promotional campaigns will
be implemented in partnership with selected
participating pet shops and animal hospitals on a
regular basis through the entire year. In addition,
Bellotta will also sharpen its focus on sponsorship
of cat contest events. Meanwhile, continued
marketing efforts will be made to reinforce the
marketing position of its proprietary dog food
products.
Thai Union Seafood Co., Ltd. (TUS)
Thai Union Seafood Co., Ltd. (TUS) is involved in
frozen shrimp processing and export.
TUS reported a robust year-on-year sales growth of
44% to USD134 million in 2011, with across-the-board
pleasing and improving performance seen among
growth in the year included marinated, breaded
and alive shrimp varieties, among others. In particular,
live shrimp product ranges shipped to Japan
enjoyed as much as 20-30% higher selling prices
against their normal shrimp counterparts. Furthermore,
competition was less intense in the premium quality
live shrimp-based product varieties.
Owing mainly to shrimp price volatility during the
year, TUS revamped its sales strategies accordingly
with more stress on short-term sales contracts as a
proactive measure to minimize potential impacts
of volatile raw material prices and currency
exchange rates. With regard to capital investment
in 2011, TUS constructed its own ice-making facilities
with daily production capacity of 60 metric tons.
The facilities were housed in the initial processing
area within its shrimp plant compound. The purpose
of the investment was to better control ice quality
as well as meet growing market demand for its
shrimp products.
As for business strategy for 2012, TUS has set its
annual growth target at 30% for production
capacity and sales performance [from the total
annual quantity of processed raw materials of
23,000 metric tons in 2011]. As another area of great
emphasis, more strenuous efforts will be taken to
extend its geographical and product reach to
such as China, Singapore, Taiwan and Europe.
Apart from these planned actions, a couple of
plant improvement initiatives have also been in
the pipeline to support continuing business growth.
Namely, initial processing area will be enlarged
along with an increase in staff and worker head
counts. In addition, more automation will be
introduced in the production lines to improve
equipment to be introduced in the plant include
sushi processor, scale unit and packaging machine.
Thai Union Feedmill Co., Ltd. (TFM)
Thai Union Feedmill Co., Ltd. (TFM) is a manufacturer
and distributor of aquatic feed varieties with
both domestic and overseas markets. TFM operates
under its corporate vision of “Thailand-based
manufacturer of top-quality aquatic feed” and
adheres to the following commitments:
the entire work procedures in parallel with
continued improvements to achieve maximum
ANNUAL REPORT 2011
43

to provide customers with unparalleled quality
products and services; and
cooperation with customers, trading partners,
employees and shareholders.
and plant/production line improvement projects
will require capital investment worth Bt420 million
and are expected to complete around 2012 year-end.
It is anticipated that all these new facilities should be
able to meet TFM’s production capacity requirement
during the next 3 – 5 years in minimum.
TFM could achieve 90% of its annual sales target in
2011. Benchmarked against its original commercial
targets for the year, the sales performance delivered
by its two core product categories were individually
grew by 50% from 2010 level, with extraordinary
sales achievement 24% above set target for the
for sales breakdown by shrimp feed products, feed
for white shrimp accounted for 55% of the total
shrimp feed sold throughout the year, followed
respectively by supplementary feed (25%), feed
for black tiger shrimp (20%)
In 2012, TFM has set its annual growth target at 17%
plans to broaden customer base among its existing
core markets while also concurrently embarking
on penetrating into new promising markets. In
implementing its annual market plan during 2012,
TFM will deploy strategies with primary focus on good
quality on a stable basis, satisfaction-guaranteed
promotional sales campaign with potential customers.
Concerning investment projects within 2012, TFM
plans to replace and improve its existing obsolete
machinery at Mahachai processing plant to a
more advanced system. The new machinery is
equipped with superior technological capability,
product quality. Apart from this investment project,
new feed mill will be constructed at the current
manufacturing site in Amphoe Ranot, Songkhla
Province along with two additional shrimp feed
production lines. The new plant and additional
feed production lines will increase TFM’s production
capacity by approximately 4,000 – 5,000 metric
tons per month. Both the machinery improvement
Aside from the capital investments to be made in
production line improvements and extension during
2012, TFM also plans to invest in the erection of
additional shrimp farming facility in Satun Province
on 154-rai plot of land. The new shrimp farming
facility will house 24 ponds and operate for dual
and as shrimp breed development unit for Thai
Union Hatchery Co., Ltd. (TUH).
Pertaining to overall landscape of Thai shrimp
farming industry in 2011, annual output shrank by
approximately 8-10% from the level in the prior
year thanks to a few contributing factors. Among
the beginning of the year and the subsequently
early April. As a consequence of the floods,
immediate extensive damages to shrimp farms in
southern region were seen across Chumphon,
Surat Thani, Nakhon Si Thammarat, Songkhla,
these affected areas, Surat Thani Province was
hardest hit with an estimated decline in annual
yield by approximately 50,000 metric tons out of
this natural disaster alone, apart from repeated
pond preparation and delayed start of next farming
cycle among local farmers in the wake of the
event. Also contributing to the less impressive
annual farming output in 2011 was climatic
uncertainty which affected the growth rate
among farmed shrimps and therefore made the
factor to blame was the outbreak of white spot
syndrome in different farming areas countrywide,
beginning in June and continuing through the entire
year. In the meantime, other shrimp-producing
countries also delivered less lackluster annual
farming performance as a consequence of a
host of unfavorable factors during the year. These
negative and positive factors for Thai shrimp farming
industry in the year, along with their impacts in
combination, eventually resulted in Thai average

shrimp prices being favorable all the year round
In reference to the shrimp epidemics, the
unprecedented presence of EMS (Early Mortality
Syndrome) among Thai farmed shrimps was
detected for the first time in farming areas in
Chanthaburi Province, in addition to the already
prevailing white spot syndrome. The spread of
the recently detected disease, if occurred, would
inevitably damage Thai shrimp farming crops, akin
to the earlier occurrences in China and Malaysia.
With alarming sign in sight, Thai farmers need to
develop and have in place their proactive measures
against probable EMS epidemics along with
them properly and timely realign their strategies
in response to emerging challenges and therefore
maintain their competitiveness in global shrimpfarming
industry.
However, TFM anticipated that 2012 should see
annual Thai shrimp farming output hover around
the same level of 2011, namely with either
increase or decrease within a 10% range from
2011. Concerning price trends, shrimp prices
should remain favorable until April 2012 with
possibility to further stay in satisfactory level
through the entire year provided that there is no
considerable year-on-year increase in farming
output in Thailand and other shrimp-producing
countries during the year. Statistics show that over
99% of commercial shrimp farming activities in
Thailand involves white shrimp whereas there is less
than 1% farming activities related to black tiger
shrimp. Currently, over 25% of Thai farmers has
introduced auto feed device in their farms in order
to ward off pressures from the ongoing tight labor
supply and the forthcoming hike of minimum daily
wage to Bt300, to be in effect in April 2012. It is
estimated that the auto feed users in commercial
shrimp farming environment will double in number
to 50% by 2012 year-end.
Thai Union Hatchery Co., Ltd. (TUH)
Thai Union Hatchery Co., Ltd. (TUH) is a manufacturer
of high-quality white shrimps (Penaeus vannamei)
nauplii for distribution to customers of Thai Union
Feedmill Co., Ltd. (TFM) and domestic shrimp farmers.
TUH operates under strong quality commitment to
ensure continual provision of unparalleled products
and services to customers.
In 2011, TUH delivered 30% year-on-year sales
growth for its nauplii products while shrimp juvenile
posted sales in the neighborhood of the prior year
level. During the third quarter of the year, plankton
production house was adapted and its function
was shifted to sand worm production. The output
of the in-house sand worm production was used
on imported sand worm supply. During the year,
TUH was accredited with Best Aquaculture Practices
(ACC) for its standard practices on shrimp culture
and processing in compliance with international
institutional guidelines.
In 2012, TUH has set its annual growth target at
50% from 2011 for both nauplii and shrimp juvenile
products. Areas of special emphasis in 2012 will be
maintenance and improvement of product and
service quality. TUH also plans to implement hatchery
facility extension plan during the year to its
production site in Amphoe Sathingphra, Songkhla
Province. The purpose of the hatchery extension
project is to increase production capacity to better
serve target customer groups in upper southern
region. In addition, another initiative in the pipeline
is improvement and development of commercially
viable white shrimp breeds with special characteristics
in order to provide support for shrimp business
growth in the future. The breed engineering efforts
will be made in collaboration with other respective
state agencies.

THAI UNION FROZEN PRODUCTS PCL.
TUF STRENGTHS
1. TUF and other Thailand-based subsidiaries are all
major seafood manufactures with combined
raw material processing capacities of tuna,
frozen shrimp, canned pet food and frozen
cephalopod of 568,000, 75,000, 57,000 and
annual output, we manage to keep our
production costs low through economies of scale.
2. TUF is a truly brand owner of various world’s
top canned and frozen seafood products,
ranging from “John West”, the number-one
the Netherlands; Petit Navire and Hyacinthe
Parmentier, the dominant brands in France
market; “Mareblu”, the third-largest brand in
Italy; “Chicken of the Sea”, the third-largest
brand in U.S. market; “Century”, the foremost
brand in China and “Sealect”, the leading
brands in Thailand, thus further broadening and
diversifying our customer base with greater
overall strengths.
3. TUF’s overseas investments help expand overall
production capacity and acquire remarkable
industry ranking the largest tuna canner in the
world and concurrently the leader in global
frozen and canned seafood industry.
4. TUF and subsidiaries have wide range of
processed seafood variety and are readily
equipped with 76,000 –ton cold storage capacity.
Both strengths in combination enable TUF to
better meet customer needs in terms of product
choice and order volume.
5. Thai Union Group products are consumed by
large customer base and available in different
countries and territories, thus making global
product presence and simultaneously
lowering economic impacts in any certain
country on TUF.
6. Thai Union Group has strong international
competitiveness. Standard quality products at
competitive price as well as experienced and
capable marketing personnel with regular
customer visits play roles in acquiring us such
a strong competitiveness in global market.
7. Management team member carry with them
long experience in, and insight into, frozen
seafood business and are well recognized
in the industry. Additionally, our operation
personnel are fully equipped with professional
capabilities necessary for their roles. Our
management and personnel strengths are among
the drives that propel our continued growth.
46 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
FINANCIAL
HIGHLIGHTS
Financial Highlights
Unit: Million Baht
Year 2011
Year 2010
Year 2009
Sales
98,670
71,507
68,995
Total Revenues
99,589
72,810
69,697
16,369
9,531
10,444
Total Assets
83,230
74,777
35,870
Total Liabilities
56,161
51,541
17,459
Shareholders’ Equity
27,069
23,236
18,411
Per Share (Baht)
Year 2011
Year 2010
Year 2009
Basic Earnings per Share
5.30
3.20
3.79
Diluted Earnings per Share
5.17
3.15
3.79
Dividend
1.56
1.60
1.92
Par Value
1.00
1.00
1.00
Book Value
25.53
23.36
18.49
ANNUAL REPORT 2011
47

AWARDS, CERTIFICATES
strategic management, coupled with a strong
determination to grow consistently in all
relevant business segments that would lead to
achievement of competitiveness, helped us to
land a host of prestigious awards granted by
and organizations, trade partners and the
1. Accredited with Thailand Trust Mark
Trade Promotion, Ministry of Commerce,
as high potential Thai exporter having the
capability to consistently maintain product
quality standard and to securely acquire
international markets.
consecutively in FinanceAsia Magazine’s
annual Best Managed Companies Poll,
and also named among award-winning
Thai companies in Overall Best Managed
Company, Best Corporate Governance and
Best Investor Relations subcategories.
and the Most Favorite CFO in the Food and
Agribusiness sector by the Securities Analysts
Association (SAA) of Thailand’s annual awards.
4. Named the winner of Green Leadership
Award by Enterprise Asia in Asia Responsible
Entrepreneurship Award - Southeast Asia
2011 for the “Regaining Coastal Ecosystem
Balance through 1,000,000 Mangrove Sprouts”
program, a TUF’s internally developed
initiative, based on CSR program judgment
criteria with emphasis on conservation and
revival of natural resources and environment.
bond ratings with a stable outlook by
TRIS Rating Co., Ltd. despite the sizeable
acquisition of MW Brands and increased debt
burden.
In addition, we place hygiene and food safety
order to ensure the highest level of customer
satisfaction, which is evident from numerous
by various institutes and agencies as follows:
of Medical Sciences, Ministry of Public Health
and by the National Bureau of Agricultural
Commodity and Food Standards (ACFS),
Ministry of Agriculture and Cooperatives of
Thailand.

Service GmbH (Germany) for compliance with
food processing requirements within Shrimp,
Cephalopod and Salmon Production Lines.
food processing requirements within Fish 1,
Fish 2, Meal and Bakery Production Lines.
for compliance with food processing
requirements within Shrimp Production Line.
Orthodox Jewish Congregations of America.
Administration (FDA), a US agency in charge
of inspecting the quality of imported food
and medicines.
Agency (CFIA), a Canadian agency in
charge of monitoring quality of imported food
and medicines.
Control Points (HACCP) by Department of
Fishery and Department of Agriculture, Ministry
of Agriculture and Cooperatives of Thailand
and with HACCP USFDA by SGS (Thailand)
Limited. The Hazard Analysis Critical Control
Points system is a quality assurance system on
food safety, which can effectively prevent
hazards, including biological, chemical and
physical contamination by placing emphasis
on monitoring manufacturing procedures,
especially the points or stages that are critical
control points (CCP), with consumer safety as
the key objective.
Practices (GMP) for food manufacturing
operation by Department of Fishery,
Department of Livestock and Department
of Agriculture, Ministry of Agriculture and
of Public Health of Samut Sakhon Province.
Islamic Committee of Thailand.
Standards (SABS) for compliance with
food processing requirements within Fish 1
Production Line.
Inc. (ACC) in terms of standard practices
on shrimp culture and processing, covering
shrimp hatchery, shrimp farm and shrimp
processing factories with emphasis on social
and environmental responsibility as well as
attention to the safety of food products and
product traceability.
Australia, as an operator in compliance
with the Global Food Safety Standards
and International Retailing Best Practice
within Canned Tuna and Canned Sardine
Production Lines.
Department of Fishery, Ministry of Agriculture
and Cooperatives of Thailand.
with ACT Organic Standards within Shrimp
Production Line.

SUSTAINABLE

THAI UNION FROZEN PRODUCTS PCL.
TUF has thrived rapidly and continuously during
the past several years in various aspects, as
demonstrably evident from obvious increases
in the sizes of our organization, business, capital
investment, production capacity, new market
frontiers and various development initiatives to
propel sustainable growth. Being in such a rapid
growth has prompted us to realize the potential
impacts of our operations on the country’s
economy, society and environment. Being
conscious of this fact, we envision that corporate
sustainability should be built on well-balanced
strategy and business strategy so that both
In addition, we also attach great importance to
determination of our own criteria and guidelines
on sustainable development practices that meet
international standards for the purpose of acquiring
of management transparency. The development
process of the mentioned criteria and guideline
encompasses comprehensive analysis of potential
impacts of our operations on society and
environment. We are determined to further drive
our best practices on minimizing the societal and
environmental impacts of our operations.
As a result of the above commitment and the
strenuous efforts taken in turning it into reality,
we were proudly named the winner of “Green
Leadership Award” for the year 2011 by Enterprise
Asia, a famous NGO in pursuit of entrepreneurship
development. We were judged the award winner
due to our proven leadership roles in environmental
protection in Southeast Asia. Based on the criteria,
environmentally responsible enterprise that realizes
the potential adverse impacts of its operations on
environmental welfare and attempts to minimize
those impacts. Successful award winner is required
to demonstrate strong evidence of commitments
friendly product design, recyclable waste reduction
and management, and powerful visions as well as
strategies for integrating environmental aspects into
business practices.
The framework for our progress towards sustainable
development consists of the following key
components:
Continuous Protection with Sustainable Growth
With our heavy dependency on natural seafood
supplies, particularly tuna, which is the raw material
of our core product category, we are therefore
acutely aware that our main business activities
are directly related to marine ecosystem, from
making commercial progress, we also place strong
emphasis on marine ecosystem pollution potentially
caused by our operations with the intention of
helping sustain marine ecosystem balance. In this
regard, we have been cooperating closely with
the Regional Fisheries Management Organizations
(RFMOs), an international organization dedicated
or highly migratory species (including tuna), in
data exchange program for improved fishery
management. Among our cooperative actions on
this front includes provision of our tuna procurement
data to RFMOs so as to enable them to trace back
to the origins of our tuna raw materials.
Another concrete example of our commitment to
promote sustainable marine ecosystem balance
can be seen through our active participation in
the establishment of the International Sustainable
Seafood Foundation (ISSF) as one of its co-founding
members. ISSF is established through the brainchild
and mutual cooperation of 9 global seafood and
tuna industry leaders, which include TUF together
with its two subsidiaries, MWB and Chicken
of the Sea. The implementation of the ISSF’s
environmentally critical mission is also joined by
leading scientists and experts in marine ecosystem
and representatives from non-governmental
organizations, such as World Wide Fund for Nature
(WWF). The objectives of ISSF are to develop
science-based measures on sustainable marine
resource management to ensure optimum
balance of global marine ecology, based on
new technological innovations that are made
possible through research projects. In attaining
the objectives, we and other founding members
are ready to provide support and resources to
facilitate experiments and research projects to
In addition, ISSF supports monitoring and alarming
ANNUAL REPORT 2011
51

THAI UNION FROZEN PRODUCTS PCL.
scheme that ensures appropriate stock of each
preventing their population from falling below
acceptable safety levels. Furthermore, prevention
against illegal, unreported and unregulated (IUU)
Contribution to Future Challenge
Thai Union Group are fully aware that sustainable
development requires a huge investment of time
and effort. In harmony with ISSF’s opinion, we realize
the paramount importance of long-term planning
in order to achieve the goals of sustainable
development. Therefore, ISSF has developed a set
of 6 long-term development guidelines as set
forth below:
1. Control and Reduce Fishing Capacity
2. Mitigate by Catch
3. Eliminate IUU Fishing
4. Expand Data Support – Collection and Analysis
5. Enhance Performance in Monitoring,
6. Improve Overall Tuna Stock’s Health
sustainability requires strong support from high
standards and risk prevention measures to preserve
have been working closely with our suppliers,
national governments, the EU, RFMOs and NGos to
maintain and improve the environment from the
viewpoints of seafood processor. Our partnership
with those like-minded parties is also intended to
promote experiment of new innovations to mitigate
environmental impacts, including research projects
involving lower emissions of carbon dioxide.
All these international collaborative efforts are
taken to ensure that we will be able to grow our
business whilst concurrently fostering sustainable
development.
Operation and Environmental Management
with environmental performance commitment
serves as one of the major contributing factors for
our proven commercial successes.
We are committed to full compliance with
legislative requirements and institutional guidelines
under the international environmental and quality
management standards of ISO 14001 and ISO
9001. On-site surveillance audits are carried out
annually at our processing facilities by certified
accreditation bodies to ensure their continued
compliance with the requirements of those standards.
We are very conscious of fully observing statutory
rules and regulations governing our business
activities and those associated with various
aspects of environmental management. These
include our full respect to requirements pertaining
to environmental management systems and
organizational capability to maintain required
levels of environmental performance. Among
them are all forms of pollution prevention and
waste mitigation measures that are taken with
special emphasis on responsible consumption of
natural resources such as energy, raw materials,
water and packaging. Also central to this
approach is to encourage organization-wide
employee involvement in any corporate missions
intended to drive environmental performance.
Such employee involvement is made possible
through building a powerful sense of common
purpose among personnel of all levels, creating
nature-care awareness and providing appropriate
technical training sessions.
Energy Conservation Measures
We have actively been seeking to promote the
growing importance of reduced consumption of
natural resources across all our manufacturing
bases. This clear insight into the global energy
agenda should lead to lower energy consumption
within our organization, with strong emphasis on
of knowledge and expertise among our able
engineering and process development teams
has proudly resulted in the following internally
developed innovations in support of our energy
conservation initiatives:
Heat Recover Project: The project is designed to
utilize the heat in water exiting the cooling system
to preheat input water before it enters the boiler’s
deaerator. The objectives of the project are as
follows:
52 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
1. To cut coal consumption through preheating
input water before it enters the boiler’s
deaerator.
2. To reduce consumption of electrical energy in
the cooling system’s evaporative condenser.
Biogas is a form of alternative energy that can
be produced through biochemical process. As
seafood processor, our manufacturing process
generates organic waste on a daily basis. In order
to deal with the organic waste responsibly, our
waste with the following objectives:
the byproducts of seafood processing.
available within our organization.
lowered use of conventional commercial gas.
reducing greenhouse gas emission and
therefore contributing constructively to global
warming agenda.
Information System (HRIS) within our organization
HR data management but also lowers our operating
costs. Under this human capital management policy,
all people across the business are engaged side by
side in continual process of knowledge acquisition
and management.
Each year, our personnel management system focuses
mainly on competency, which is composed of 3
major elements; Core Competency, Management
Competency and Functional Competency. In
addition to this, the Individual Development Plan
(IDP) is applied organization-wide to personnel of all
appraisal system. Meanwhile, 360-degree competency
assessment is required for senior supervisory and
departmental management personnel. Apart from
these competency-intensive appraisals, assistant
departmental manager and other higher-ranking
positions are additionally subject to succession
planning performance appraisal.
management and soft skills development among
each position level as one of the job enhancement
factors, the following personnel development efforts
have been made:
Providing Quality of Life
Sustainable Human Capital Development
We have adopted a progress-oriented HR policy,
as we believe in the utmost importance of human
capital in our business and the vital contribution
it makes to our achievement of common goals.
Therefore, we are committed to promoting greater
professional capability among our employees
in parallel with continued improvements in their
quality of life. We help expand their career
potential as well as provide exciting and challenging
career opportunities with the intention of encouraging
them to perform their respective functions at their
best. In doing so, we develop, and capitalize on,
our tailored individual development plan on a
continued basis. The individual development plan
is implemented in conjunction with systematic
follow-up and performance evaluation conducted
to our personnel training and development programs.
In addition, the availability of Human Resource
personnel such as Occupational Health and Safety
practical communicative English course provided
to marketing and internal audit personnel, and
Total Productivity Management (TPM) training
such as communicative skills, supervisory skills
and time management skills
Program
tools and techniques required for providing
effective coaching sessions to their subordinates.
high-potential people, in preparation for their
future roles as TUF executives.
ANNUAL REPORT 2011
53

In addition to the implementation of the abovementioned
initiatives, our business decisions take
account of the welfare of all employees. We
are committed to fair employment practices
regardless of races and positions. We are also
committed to observing all applicable labor
and employment laws wherever in the world
we operate. Among our core HR policies is full
compliance with those laws that pertain to the
prohibition of child and forced labor.
Meanwhile, we have continuously made every
effort to ensure that all our production sites are
safe workplaces for our employees and those
of our business alliances. We seek to embed
safety awareness in our corporate culture
through organization-wide implementation of
occupational safety strategies and initiatives
with vigor. With steady progress made on our
accident and incident control performance,
we were presented with The Outstanding
Industrial Establishment Award for the year 2011
in recognition of our occupational health, safety
and environmental achievements. Furthermore,
our particular attention in this regard has all along
included the vital issue of good health and health
maintenance among our employees.
1. Annual health checkup
2. Medical diagnosis to identify health risk factors
3. Randomized urine/blood tests to detect
habitual substance uses
1. New Year’s Party
2. Songkran Festival
3. Harmony-promoting activity
1. TUF Music Event
2. Company-sponsored Annual Trip Package
3. Annual Mini-Half Marathon
Propelling Society and Community
We are well placed to play our part in propelling
society on a path of sustainable development
projects, supporting participatory community
development programs, as well as encouraging
our employees to play an active role in social
development.
Natural Habitat Rehabilitation for Mangroves:
Regaining Coastal Ecosystem Balance through
1,000,000 Saplings
The project is a collaboration between us and the
Mangrove Forest Resources Development Station
6 in Phetchaburi Province. Under the project, we
are to support the cultivation of 1,000,000 saplings
of mangrove species - red mangrove, true mangrove
and Indian mangrove – through the entire 5-year
period of the project. The objective of the project is
to promote the conservation and restoration of
mangrove forests along the coast of Thailand.
In addition, we organize two mangrove forest
reforestation trips per year for interested employees
and business partners with the aim of increasing
the country’s green area.

This is our annual philanthropic program with
the aim of promoting employee participation in
nominating community development projects.
This program cultivates a sense of community
pride and develops and maintains ties between
the workers and their hometowns. We strongly
believe that sustainable community development
can only be achieved through fostering a powerful
With this logic in mind, we have embarked on
the mission of growing such awareness among
program is to encourage our employees to think
about community services and social contribution
outcome of their choices could lead to mutual
concept among all other community members
while also being viewed as a positive role model
for them to follow, thereby providing a healthy
environment for building a further sense of common
purpose.
All our employees are invited to submit proposals
communities. Their community development
proposals may vary greatly from public infrastructure
to educational facility and to luncheon project,
to name a handful. As a rule, all well-thought-out
proposals are submitted to program committee
for review and judgment in accordance with
selection criteria.
Besides projects already mentioned, we have
continuously undertaken a number of other
public-benefit projects, including:
emergency relief assistance to victims;
the Thai Red Cross Society; and
National Children’s Day
At TUF, we are very conscious of our roles in
relation to the communities where we operate.
Through the Community Relations Program,
our representatives are dispatched on a
quarterly basis to meet regularly with residents
of neighboring communities to discuss issues of
their environmental concerns and receive their
feedback and suggestions of our environmental
performance. The gathered information is
subsequently reviewed and used as a basis
to develop bilateral proactive and corrective
actions. We establish a Community Relations
Steering Group to oversee and follow up the
implementation of those actions. We promote
community involvement in our implementation
of environmental improvement measures, as in
the case of noise pollution management, among
others. Today, we no longer receive any complaint
about noise pollution from surrounding communities
as a consequence of our well-maintained noise level
of not over 70 dB –A in accordance with statutory
standard criteria.

THAI UNION FROZEN PRODUCTS PCL.
AND COMPETITION
Thai seafood industry in 2011 still saw continued
growth despite persisting global economic
2010. The main European economies, in particular,
crisis became a cause for concern for potential
adverse impacts on Thai food export sector. The
concerns were based on the fact that European
consumption and its market potential make up a
sizeable proportion of Thai exports, thus perennially
being one of Thailand’s major export destinations.
Nevertheless, as food commodities are among
did not have any adverse impacts on Thai food
exports. Meanwhile, Thailand experienced one
havoc on different regions throughout the country,
as well as many local industrial operators.
Although food industry was not directly affected
packaging materials to manufacturing sites was
interrupted thanks to paralyzed logistics services.
Such this natural disaster has been considered as
an additional business risk factor and prompted
domestic industrial players to establish their site
emergency preparedness plans to better cope
in the future.
Incidents and crises during the course of the year
inevitably created considerably challenging trading
conditions for Thai seafood exporters, who
otherwise managed to deal with the unfavorable
situations successfully. This was demonstrably evident
from a robust year-on-year growth of 16.9% in
export value of canned and processed seafood
products, canned seafood reported total annual
export volume of 591,609 metric tons, a slight
56 ANNUAL REPORT 2011
decline by 0.8% from 2010, and total annual
export value of Bt70,537 million, representing a
14.5% year-on-year growth. In contrast to the
canned seafood category, processed seafood
witnessed annual export growth in both volume
and value at 405,160 metric tons and Bt81,513
million, accounting for 2.3% and 19% year-on-year
growth respectively. The statistics demonstrated
continued development of Thai seafood exports.
Although weaker performance was observed
among certain Thai seafood items during the last
quarter of the year due primarily to the impacts of
pressure on the overall performance of Thai
seafood industry during 2011 given demonstrable
whole-year growth figures. Nevertheless, in
consideration of all the uncertainties during the
course of the year, Thai seafood exporters will
need to keep close monitoring of market situations
to get themselves prepared for any unexpected
challenges and to maintain their competitiveness
in global marketplace.
FROZEN SEAFOOD PRODUCTS
Frozen Tuna Loin
The volume of Thai frozen tuna loin exports during
2011 reached 40,908 metric tons on export value
of Bt6,124 million. When compared to their 2010
decline in both volume and value by 23.2% and
2.1%, respectively. The US was the largest market
for Thai frozen tuna loin exports with 21,877 metric
tons in volume and Bt3,380 million in value and
carved 55.2% share of the total export value. The
second largest export market for Thai frozen tuna
loin was Italy with export value of Bt617 million,
followed respectively by Israel with export value of
Bt586 million, accounting for 10% and 9.6% of the
total export value, respectively.

THAI UNION FROZEN PRODUCTS PCL.
Frozen and Value-added Shrimp
Thai frozen and value-added shrimp export during
2011 reported lower export volume by 7.7% to 394,880
metric tons against 427,925 metric tons recorded in
2010. In contrast to export volume, the export value
of Thai frozen and value-added shrimp products
expanded by 9.4% year-on-year to Bt110,643 million.
under this category revealed a decline in both
volume and value of frozen shrimp exports by 17%
and 1%, respectively. In contrast, value-added
shrimp exports registered year-on-year growth in both
volume and value to 178,662 metric tons and Bt54,606
million, up by 7.9% and 25.6%, respectively.
The statistical export breakdown by product suggested
that Thai seafood exporters have increasingly
placed more emphasis on value-added shrimp
than frozen shrimp.
for Thai frozen and value-added shrimp products,
with export value reaching Bt51,316 million, or
equivalent to 46% of the total export value. Ran
second was Japan, and followed respectively by
5% share of the total export value, respectively.
Frozen and Value-added Cephalopod
Annual export statistics indicated that the volume
of Thai frozen and value-added cephalopod
exports during 2011 shrank by 8.5% year-on-year
to 64,790 metric tons. In contrast, the export value
increased by 9.6% year-on-year to Bt12,859 million.
Japan was the largest market for Thai frozen and
value-added cephalopod exports with export value
hitting Bt5,722 million, followed by Italy (Bt3,362 million)
and the US (Bt835 million). The three major export
markets represented 45%, 26% and 7% of the total
export value, respectively.
CANNED SEAFOOD PRODUCTS
Canned Tuna
Thai canned tuna export during 2011 saw a
year-on-year value expansion by 18% to Bt61,462
million. On the contrary, the whole year export
volume dropped slightly by 0.6% year-on-year
to 518,279 metric tons against 521,205 metric
tons registered in 2010. Tuna raw material prices
were highly volatile during the year with wholeyear
average price at record-breaking level of
USD1,766 per metric ton.
Top export destination for Thai canned tuna
products was the US, whose imports from Thailand
amounted in volume to 99,314 metric tons and
in value to Bt12,207 million. The second largest
market was Australia with export volume of 42,279
metric tons and export value of Bt6,081 million.
Japan was ranked third with 29,941 metric tons in
export volume and Bt4,749 million in export value.
Canned Shrimp
Thailand’s 2011 canned shrimp export was less
vibrant both in terms of volume and value when
export volume in 2011 was recorded at 12,131
metric tons, or a 38% decline from 19,438 metric
tons in 2010. In line with the decline in export
volume, the whole-year export value of Thai
canned shrimp products in 2011 stood at Bt3,193
million, representing a 27% drop from Bt4,349
ANNUAL REPORT 2011
57

THAI UNION FROZEN PRODUCTS PCL.
the number-one export market for canned shrimp
products from Thailand with 53% share of the total
export value. Japan was the second largest market
with 12% share and Canada was ranked third with
11% share.
Canned Crab Meat
The 2011 export statistics indicated that Thai canned
crab meat export was lower both in terms of
volume and value from a year ago. The 2011
and Bt1,475 million in export value, posting a
year-on-year decline of 22% and 6%, respectively.
As much as 82% of Thai canned crab meat exports
were shipped to the US, the largest market in 2011.
Other important export markets by ranking were
France, Canada and Japan, with a share of 5%,
3% and 2% of the total export value, respectively.
Canned Pet Food
Thai canned pet food export during 2011 showed
an upward trend in both volume and value from
a year ago. The whole-year export volume rose by
11% year-on-year to 305,038 metric tons and the
whole-year export value grew by 9% year-on-year
to Bt21,457 million. Japan continued to remain the
top export destination for Thai canned pet food
products with 121,836 metric tons in export volume,
or 40% of the total export volume, and with Bt8,433
million in export value, representing 39% of the total
export value. By ranking, the US and Italy were the
other important export markets, sharing Bt3,406
million and Bt2,055 million, or 16% and 10% of the
total export value, respectively.
INDUSTRY TRENDS
The overall situation of Thai seafood export for 2011
continued to see more vibrant expansion. Annual
sales achieved value growth both in US dollar and
Thai baht terms. Canned and value-added seafood
registered year-on-year growth rate of 22% and
17%, respectively. Annual export statistics also
indicated that value-added shrimp products
delivered exceptionally strong expansion in comparison
with other items within shrimp product range.
US dollar and Thai baht terms by 31% and 26%,
among Thai seafood exporters to add more value
to their products.
Thai seafood industry this year was dominated by
the year, tuna prices soared to USD2,000 per metric
ton with annual average ceiling of USD1,766
per metric ton, or jumping by 37% year-on-year.
Such these unfavorable price movements drove
manufacturing costs up and eventually forced
Thai seafood exporters to adjust their selling prices
upwards accordingly. With regard to shrimp,
prices were not as much volatile as the year before.
Decline in global shrimp farming yields was
seen as direct consequence of natural disaster
among major shrimp-producing countries such as
yields for 2011 dropped by 8% year-on-year to
510,000 metric tons. Albeit weaker shrimp harvest
worldwide this year, world market prices remained
satisfactorily stable due to sustainably strong
demand among consumers.
58 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
We anticipate that Thai seafood industry outlook
for 2012 should continue to expand on the back
of a few supporting reasons. Firstly, demand for
seafood has remained sustainably strong around
the world. Secondly, seafood exports from Thailand
have enjoyed good global reputation and
recognition because of its proven track records
of high quality and food safety standard
compliance. Thirdly, being a good source of
protein with relatively affordable prices when
compared to other protein food items, seafood
products such as canned tuna should be in constant
demand and therefore should not encumber Thai
seafood export performance in 2012. Despite
these highly likely positive scenarios, year 2012
will be dominated by a host of challenges that
call for strong attention and close monitoring
among Thai seafood exporters. Among those
challenges lying ahead to overcome include
the volatile nature of raw material prices, oil
prices and currency exchange rates. In addition,
the statutory increase in minimum daily wage
to Bt300, to be effective around April 2012, is
expected to drive up labor cost by 40%. Besides,
there are ongoing challenges from non-tariff trade
barriers (NTBs) that are being deployed or to
be imposed by importing nations in the future.
Among them are the European Union (EU)’s
Generalized Preference of System (GSP) and the
US shrimp antidumping duty (AD), including the
FDA Food Safety Modernization Act (FSMA), which
has been introduced by the US since early 2011.
These risk factors require Thai seafood exporters
to monitor their business environment closely and
also to position themselves at their advantages
that would allow most effective responses to any
emerging or unforeseen challenges.
We have been strictly adhering to prudential
business practices throughout the entire organization
and closely monitoring the macro and market
situations on continued basis in order to ensure
that any potential impacts of key business risks are
kept to the minimal. Besides, we seek to achieve
continued developments through the entire
organization. The efforts extend from production
process improvement, marketing strategy revamp,
to continual innovative product developments,
inventory management and to raw material
sourcing. All of these proactive measures are
for the sole purpose of building our potential for
competitiveness in the global marketplace.
CANNED
SARDINE
FROZEN TUNA LOIN
AND CANNED TUNA
CANNED
PET FOOD
FROZEN
SHRIMP
FROZEN
CEPHALOPOD
MARKET SHARE OF THAI UNION GROUP AMONG THAI EXPORTERS
Sources:
ANNUAL REPORT 2011
59

THAI UNION FROZEN PRODUCTS PCL.
Risk Factors and Other Related
CONSIDERATIONS
BUSINESS RISKS
Trade Barriers
to become one of the world’s leading players,
both in terms of production potential and
competitiveness as well as acceptance by countries
throughout the world in its recognized food
safety and world-class quality. These factors in
combination have placed Thailand on a strategic
position to gain strong reputation and unwavering
trust in global marketplace as one of the world’s
top seafood processing and exporting countries.
Seafood exports bring tremendous amount of
export revenues into the Thai economy each
economic growth. However, this remarkable
growth is not without obstacles. Thailand has
been continuously facing trade barriers erected
by its trade partners. Such barriers include both
tariff and non-tariff measures, the latter of which
have particularly become more prevalent and
further incorporating sensitive topics into their more
rigid international trade standards, creating more
hurdles for Thai seafood operators to overcome.
Under this continually unfavorable circumstance,
close monitoring of situations and keeping abreast
of new conditional updates and developments
are all a must among Thai seafood operators
to ensure their timely adoption of appropriate
measures in order to stay compliant with any
upcoming non-tariff barriers.
The Company’s Policy and Actions Taken
We have been closely monitoring all situations
that may affect our exports and have undertaken
measures to adapt to new regulations and rapidly
changing market trends. As a result of our policy
to always maintain our status as a good corporate
citizen in the global seafood market, TUF and its
trade partners and customers, both within Thailand
and throughout the world. We continuously emphasize
sustainable development in all aspects of our
operations under our internally Sustainability at
TUF encompasses protection of natural resources
and the environment through our responsible
environmental management, fair and equitable
treatment of our workers, and meaningful long-term
contributions to sustainable social development
of the surrounding communities as well as on
the national and international levels. Marketing
and investment policies are also developed and
implemented with the aim to broaden our markets
to cover all parts of the world and to diversify our
product portfolio, with strong emphasis on value
added products, in order to better serve our
customers’ needs. Through a series of strategic
investments, we now have or are constructing
manufacturing facilities in 10 countries, including
Guinea, the United States, France, Portugal,
Ghana and Seychelles with Thailand as the main
production base. Such diverse production locations
enable us to successfully take advantage of, or
manage risks of, the country of origin requirement
that is normally stipulated in preferential trade
measures or trade barriers.
PRODUCTION RISKS
Raw Material Price and Procurement
The cost of raw materials accounts for about 70
to 80 percent of our overall production cost. Raw
material procurement is therefore a major driver
of the Company’s costs and profits. Prices of
in accordance with world market situations.
Therefore, it is our policy to set our prices based
on the prevailing market trend which could
occasionally result in cost differential between raw
60 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
material inventory and products sold owing to their
variances in purchase costs and selling prices.
factors that have constant impacts on several
packaging materials, seasoning and other ingredients,
which have also varied accordingly.
The Company’s Policy and Actions Taken
Tuna
To minimize the cost difference between the time
products are sold, and to allow the shortest period
and purchase of tuna are made between 30-45
days in advance, while maintaining inventory
turnover at an appropriate level.
Shrimp
We source our shrimp directly from shrimp farmers
in various farming regions throughout the country
enables us to match costs and selling prices to
shrimp price.
Cephalopod
With continually growing demand for cephalopod
raw materials, we pursue both local and overseas
procurement, which in turn protects us from the risk
of the raw material shortage. We have responded
effectively to price increases by maximizing production
of value-added products, a strategy that has
in this segment.
Energy Price
Energy is one of our key inputs, and we have in
recent years adapted our production process to
minimize potential losses and lower our production
costs in other areas. We will continue to seek ways
to improve our management system and raise
Human Resources
The seafood industry is a labor-intensive industry
that also requires a certain level of industry-
industries, workers in the seafood industry must
undergo trainings to develop their production
skills to match the types and characteristics of the
in the industry may not be as attractive compared
to other sectors, such as textiles or electronics,
in terms of odor and temperature. In a seafood
unavoidable, and in some areas, temperature
the industry constantly faces a high turnover
and worker shortages. In addition, the statutory
increase in minimum daily wage to Bt300, to be
effective on April 2012, is expected to drive up
labor cost.
The Company’s Policy and Actions Taken
Recognizing that our workers, at every level, are
we have focused on making our company an
attractive place to work. We regularly review our
compensation package to ensure fairness and
emphasize equitable treatment of our workers
regardless of position, race, and gender as well
as provide all workers with opportunities to grow
personally and in their career. Regarding to the
increasing in minimum daily wage, we are well
prepared for this situation, the solution of making
use of machine-driven automation to replace
certain portion of indirect or support daily workers
(who are mostly involved in material handling and
record-keeping activities) would help address both
problems at the same time. A smaller labor pool
would allow us to stabilize our costs despite the
wage hike. Moreover, our intention to move some
of the indirect / support daily workers into the
direct production sections, such as cleaning and
cutting, should allow us to increase our production
capacity as well as productivity which would
otherwise be not possible without enough labor.
After all, with the combination of automation and
converting support workers into direct production
workers should lead to cost savings, allowing us
to stay competitive regardless of any potential
minimum daily wage hike pursued by the new Thai
government.
NATURAL DISASTER RISKS
Dramatic changes in environmental and climatic
conditions worldwide have been evident through
the past several years and unprecedentedly resulted
in unusually frequent occurrence of severe natural
disasters in each region across the globe. Among
those catastrophic events include a series of massive
ANNUAL REPORT 2011
61

THAI UNION FROZEN PRODUCTS PCL.
earthquakes in different parts of the world such as
Chile, New Zealand and Japan, resulting in enormous
on trading and economy.
natural disaster in Thailand. In particular, the recent
year 2011 was reported the worst of all in the
including Bangkok and its peripheral areas, suffered
extensive damages and losses. There were a couple
crisis this year. Firstly, the country had been hit by
a series of storms one after another with short
intervals in between. Secondly, the water reserve
in some major reservoirs and dams at the time had
nearly exceeded their safe storage levels, with
some no longer able to receive incoming water
to natural waterways to prevent disastrous collapse
of the structures. These two factors in combination
wreaked havoc on the country’s economy. The
damages to national economy as consequence of
electronics were among a few concrete samples of
many affected industries within Thai manufacturing
sector. In the mean time, agricultural sector was
also faced with direct impacts thanks to extensive
damages to crop-producing and farming areas
in many parts of the country. As with the
manufacturing and agricultural sectors, labor
sector was not an exception when plant closures
inevitably became the last resort among business
Thai industrial operators to develop and have in
place their site emergency preparedness programs
with particular emphasis on prevention of future
impacts of natural disasters.
The Company’s Policy and Actions Taken
We have had in place a set of well-planned
preventive measures to be deployed in emergencies
disaster. It is intended that all these available
established measures will help cushion the severity
of the impacts of future natural disaster threats. The
measures are developed into corporate emergency
preparedness plan, which encompasses various
aspects of emergency during natural disaster
period, including training session, emergency
response rehearsal and evacuation drill. The
purpose of the emergency preparedness plan is
to equip all employees with necessary survival skills
and allow them to learn how to react properly
and effectively with minimum panic whenever
natural disaster strikes. In addition, we have also
developed two-level emergency response plan as
detailed below:
any occurrence of natural disaster emergency
outside the area where our business operates;
to our employee welfare as well as business
operations; and within handling capacity of
team. Required preparedness during minor
emergency consists of close monitoring of latest
situation updates, direct report of any situation
further report to Emergency Director and response
actions by emergency team in accordance
with pre-determined procedures.
any occurrence of natural disaster emergency
our employee welfare, business operations,
surrounding communities as well as overall
company environment; and beyond handling
rescue team. Required preparedness during
major emergency consists of immediate
evacuation and strict adherence to evacuation
plan to proceed towards pre-determined
escape routes to safe areas.
Unlike many other industrial establishments, our
manufacturing facilities and business operations
remained unaffected and safe from any serious
Although our processing plant and those of our
subsidiaries (Thai Union Manufacturing and
we successfully managed to survive. This was an
outcome of well-coordinated efforts and keen
cooperation among Samut Sakhon provincial
to their proactive measures taken both before
and throughout the crisis period. Despite being
62 ANNUAL REPORT 2011

deployed to best protect our plant and machineries
also closely monitored the situations and stayed
abreast of the latest updates on water levels, as
publicized through concerned agencies, on a daily
basis. Responsible personnel were dispatched to
patrol the areas surrounding plant compound for
real-time and on-site consideration of the situations.
Meeting session of our Flood Steering Committee
was arranged on a daily basis to discuss and
evaluate the latest situations and potential risk
exposure. In parallel with the preparations to
safeguard our physical plant assets from the
to help our affected employees at our best.
ADMINISTRATIVE AND MANAGEMENT RISKS
Operational System
Our strategy of investment expansion has currently
resulted in 24 subsidiaries and associated companies
with each being active in different business areas.
Such diverse collection of business operations,
poses a risk associated with ensuring that all
entities operate under harmonized policies aim at
generating satisfactory returns on investments.
The Company’s Policy and Actions Taken
TUF places great emphasis on business administration
and operational management. We have developed
comprehensive corporate policies providing
strategic directions to our subsidiaries and
associated companies. Our management teams
possess extensive experiences and expertise
directly relevant to the business that they manage.
While our corporate executives provide strategic
guidance and policies, management teams based
at the subsidiaries and associated companies are
given full authority to run the operations.
Our investments in subsidiaries usually feature
agreements of minority ownership by relevant
management teams for the purpose of ensuring
appropriate incentives for running the business. As
the parent company, TUF monitors and controls
operations in the area of annual business plans,
business expansion, and further investments to
maintain harmony among all subsidiaries. As part
of its monitoring and auditing responsibility, our
Internal Audit Department ensures that the highest
operations are preserved and that full compliance
with the Board’s policy is achieved.
FINANCIAL RISK
Volatility of Foreign Exchange Rates
In recent years, foreign exchange rates have been
relatively volatile and consequently impacted
our business, given the fact that over 90% of
revenues from Thailand-based operations of Thai
Union Group is generated from shipping products
to overseas markets, such as the US, the EU, and
Japan. Because of this, a majority of our revenues
are recognized in foreign currencies, mostly in U.S.
are subject to the risk of foreign exchange volatility.
The Company’s Policy and Actions Taken
We have maintained a close watch on
movements of currency exchange rates as well as
considered all appropriate measures in managing
our exposure to exchange rate risks. Our revenue
and expense streams have provided an effective
natural hedge, as we import most of our raw
materials and export most of our products, using
US dollar as the transactional currency. Other
measures taken include the utilization of forward
contracts and currency options to minimize our
Interest Rate Risks
Globalization has connected economies in
all parts of the world together, allowing rapid
movement of investment funds across borders.
This implies a world where interest rates can
change very quickly, requiring business operators
address risks associated with shifting interest rates.
The Company’s Policy and Actions Taken
As in the case of currency exchange rate situations,
we have continuously monitored interest rate
movement. Thai Union Group as a whole has been
carefully maintaining an optimal debt structure
given interest rate situations and trends, with
loans. The debt structure can be also adjusted
to match changing circumstances via various
and Cross Currency Swap.
OTHER RELATED FACTORS FOR INVESTMENT
CONSIDERATION
Lawsuits
TUF and its subsidiaries are not involved in any
lawsuit affecting their assets by more than 5% of
shareholders’ equity.

THAI UNION FROZEN PRODUCTS PCL.
Report on the Practice of Good
CORPORATE
The Board of Directors of Thai Union Frozen Products PCL.
perceives the importance of good corporate
governance within the Company in order to
promote sustainable operational growth and to
gain public acceptance of the Company both
locally and internationally. Being guided by this
perception, the Board is determined to adhere
to good corporate governance principles and
therefore embraces such principles directed by
the Stock Exchange of Thailand, in conjunction
with honesty, transparency, responsibility, business
standards in accordance with the Code of Best
Practices of listed company. This principle adoption is
intended to enhance the Company’s competitiveness,
the Company’s operations among shareholders,
investors and all stakeholders, thereby creating
effective, prosperous and sustainable growth in
the Company’s business, as well as adding value
to shareholders while also taking into account all
stakeholders.
Following the perception of the importance of
good corporate governance above mentioned,
the Board therefore promotes and supports
the practice of good corporate governance
principles directed by the Stock Exchange of
Thailand through devising its own policy centered
on 5 pillars as set forth below:
1. Right of Shareholders
2. Equitable Treatment of Shareholders
3. Roles of Stakeholders
4. Information Disclosure and Transparency
5. Board of Directors’ Responsibilities
1. Right of Shareholders
disclosure is made in the complete, accurate,
punctual, and equitable manner to all parties
concerned. The Company has appropriate
controlling system and risk management adequate
for facilitating well-informed decision making. The
Company adheres to business ethics as a main
pillar to prevent damages to all stakeholders.
The Board oversees the Company’s disclosure of
all material information to ensure its accuracy,
fairness and timeliness in order to secure investor
The Company’s information disclosures to shareholders
are made on the basis of equity regardless of share
volume owned, individuals or juristic person and
being local or overseas. In each shareholders’
meeting, the Company places emphasis on, and
respects, the right of shareholders by strictly carrying
out the meeting pursuant to the Public Limited
Companies Act. This can be evident from the
Company’s following arrangements for the hosting
of the Annual General Meeting of Shareholders
(AGM) on April 25, 2011.
Meeting Preparation Procedure and Delivery of
Meeting Invitation
to propose name list of potential director
candidates and meeting agenda for 2011
Annual General Meeting of Shareholders.
Company secretary was assigned to publicize
such information electronically through the
Stock Exchange of Thailand communication
systems and forwarded to corporate website
32 days prior to the date of meeting invitation
delivery in order to allocate appropriate time
for their proposals.
The Company follows good corporate governance
principles and sets clear business policy perceiving
equitable treatment of shareholders and stakeholders.
This can be evident from the fact that the Board
and the management cooperate their efforts to
careful administration for the best interests of
the Company and shareholders. Operations are
transparent and can be verified. Information
64 ANNUAL REPORT 2011
along with sufficiently-detailed relevant
documentation and opinions of the Board
given in each agenda (except for annual
report) on www.thaiuniongroup.com since
March 25, 2011 and such information
dissemination was available for 31 days prior
to the date of AGM.
Depository Co., Ltd., in its capacity as registrar,
to deliver to shareholders meeting invitation

THAI UNION FROZEN PRODUCTS PCL.
along with sufficiently-detailed relevant
documentation, opinions of the Board given in
each agenda, proxy form for convenience of
shareholder who is unable to attend the meeting
and wishes to authorize an appropriate person
or any independent director to act as proxy
and vote on his/her behalf, and including
annual report CD-ROM 21 days prior to the
date of AGM.
Post Today newspapers (in Thai) and Bangkok
Post (in English) for 3 consecutive days and 7 days
prior to the date of meeting to reassure shareholder
attendance on the scheduled meeting date
and time.
On-site Meeting Procedure
between 8:00 a.m. - 10:00 a.m. of April 25, 2011
at the well-known Dusit Thani Bangkok Hotel to
provide convenient access to shareholders. In
the past year, there were totally 425 shareholders
in attendance with aggregate share volume of
690,040,101 units, equivalent to 72.16% of the total
issued and paid-up shares.
General Meeting of Shareholders, in which
there were 13 board members, including the
Chairman, in attendance out of the whole
board of 15 members. The board members in
attendance comprised Chairman, President,
Managing Director, Financial Executives and
Audit Committee members, who are independent
directors. As some Board members are
representatives of overseas shareholders, not
all Board members were able to attend the
meeting. However, without their presence, all
such members could express their opinions
about the issues through the agendas being
directly delivered to them prior to the meeting.
secretary to clearly explain vote-casting and
vote-counting procedures for each agenda
to eligible shareholders. No additional agenda
may be added to meeting session unless it
is proposed in advance. The meeting was
conducted in the manner that allowed and
encouraged all shareholders to raise questions,
express opinions and give suggestions about
the issues through the entire meeting session.
Furthermore, in each meeting session, Company’s
auditors were required to participate in
vote-counting procedure as witnesses as well
as to answer questions raised.
Company made available ballots to facilitate
exercise of voting right by shareholders in case
of their disapproval or abstention of any agenda
being considered. Shareholders were allowed
to freely cast their votes for each director
candidate on an individual basis, not on the
clearly announced onsite to make known to all
attending shareholders immediately following
the end of voting procedure in each agenda.
The meeting session was also videotaped for
further dissemination afterwards. Interested
shareholders may request copy of the videotape
Post-meeting Procedure
agenda considered in 2011 Annual General Meeting
of Shareholders on www.thaiuniongroup.com
immediately on the date of meeting, except
for questions raised by shareholders and answers
given during the meeting session. Complete
resolutions of the meeting were subsequently
submitted through the Stock Exchange of
Thailand communication systems and forwarded
to corporate website on May 9, 2011, or
14 days following the date of AGM.
Hosting of shareholders’ meeting with great emphasis
on equitable voting right has earned the Company
excellent performance in the 2011 annual evaluation
of Annual General Meeting of Shareholders conducted
by Thai Investors Association.
2. Equitable Treatment of Shareholders
The Company perceives the importance of right
of shareholders, is well aware of its responsibility to
ensure equitable treatment of shareholders and
therefore have put the following initiatives into
action.
to prepare data and communicate to
shareholders with regards to the Company’s
invitation for shareholders to propose name
list of potential director candidates and
meeting agenda for consideration in 2011
Annual General Meeting of Shareholders.
Such information was publicized electronically
through the Stock Exchange of Thailand
communication systems and forwarded to
investor relations section on corporate website
32 days prior to the date of meeting invitation
delivery in order to allocate appropriate time
for their proposals. Although the Company
has provided shareholders with such these
proposal opportunities since 2007, no proposals,
however, were submitted for either director
candidates or meeting agenda during the
past year. In addition, we do not have the
additional agendas that did not notice.
4 independent directors who were to act
as proxies to vote in each meeting agenda
on behalf of shareholders. In 2011 Annual
General Meeting of Shareholders, there were
ANNUAL REPORT 2011
65

THAI UNION FROZEN PRODUCTS PCL.
74 shareholders who authorized Mr. Sakdi
to act as proxy and vote on his/her behalf,
there were 18 shareholders who authorized
Committee, 15 shareholders who authorized
Dr. Thamnoon Ananthothai, and 3 shareholders
purpose. All of them have been serving as
independent directors and had earlier been
proposed by the Board to act as proxies.
a correct and complete manner and to publicize
the resolutions of all agenda considered in 2011
Annual General Meeting of Shareholders in investor
relations section on www.thaiuniongroup.com
immediately on the date of meeting, except
for questions raised by shareholders and answers
given during the meeting session. Complete
resolutions of the meeting were subsequently
submitted through the Stock Exchange of Thailand
communication systems and forwarded to
corporate website within 14 days following
the date of meeting.
guard against the use of internal information
for personal gains among the Board and
management members by communicating
their mandatory duties to report any changes
made to the securities ownership of their own,
those of their spouses and children below lawful
age to the Securities and Exchange Commission
(SEC) and the Stock Exchange of Thailand (SET)
pursuant to Section 59 of the Securities and
Exchange Act B.E. 2535 on immediate basis
and not later than 3 business days following the
date of purchase, sell, transfer or receipt of such
securities. The Board or management members or
sections with access to, or acknowledgement
of, internal information are not allowed to leak
the information to outsiders or other unauthorized
persons. In addition, no securities trading by
those management is allowed within the
period of one month prior to the disclosure
information to the public in order to prevent
illegal use of internal information undisclosed
to the public, which can affect the trading of
the Company’s share on the Stock Exchange
of Thailand. However, this prohibition is exempted
trading prices driven naturally by overall stock
market mechanism, which encourages those
management to trade their securities only in
response to the stock market situations and
in good faith. Furthermore, the Board and
management members are made aware of
legal punishment and penalty pursuant to the
Securities and Exchange Act B.E. 2535 and
relevant regulations.
66 ANNUAL REPORT 2011
oversee and follow up items with potential
Company secretary is responsible for preparing
quarterly summary report of those items and
transactions and regularly publicizes such
report at year-end in the Company’s annual
report and Form 56-1. Furthermore, the Board
and management members, in any Board
meeting, are required to comply with good
corporate governance policy by not participating
in casting votes or giving opinions on any issues
as disclosed to the Company by the Board
and management members pursuant to
Interests Disclosure by Listed Company Directors,
Management Members and Connected Persons.
With regards to this issue, the Section 89/14 of
the Securities and Exchange Act B.E. 2535,
as subsequently amended under the authority
of the Securities and Exchange Act (No. 4) B.E. 2551,
stipulates that the Board and management
members must report to the Company their
vested interests in the Company’s and its
subsidiaries’ operations and management,
or those of their connected persons. This
requirement is aimed to furnish necessary
information to the Company and to enable
the Company to comply with its own connected
transaction handling procedures, which are
established to prevent such items with potential
siphoning of corporate funds and interests
from the Company and its subsidiaries.
3. Roles of Stakeholders
The Company perceives the importance of right
of all stakeholders and equitable treatment, as
the Company foresees the importance of their
support and the mutual cooperation between the
Company and the various groups of stakeholders
in that it can secure long-term business wealth,
the Company adheres to equitable treatment of
all stakeholders as well as ensures that effective
administration of internal controls and compliance
controls are established and maintained, as
summarized below;
The Company is determined to
generating maximum long-term returns on
investment with regular and sustainable strong
operational performance and continued
growth while simultaneously paying attention
to accurate, complete and punctual disclosure
of material information to all shareholders in
response to their unwavering trust and support
given to the Company.

THAI UNION FROZEN PRODUCTS PCL.
The Company treats employees
equitably and fairly with appropriate
remuneration comparable to remuneration
paid in the same industry. Provision of fringe
but also exceeds relevant standard mandatory
to employees are provident fund, annual health
safe and sanitary workplace environment,
employee recreational activities, and in-house
physical workout facility to promote mutual
recreation among employees. In addition,
the annual mini-marathon run started since
2009 to encourage the employees to be
committed to that goal. Although some
employees will not do before, but they will
try to practice successfully. Besides, much
emphasis is also placed on long-term
personnel development, ample learning
and self-development opportunity for career
advancement and improved life quality. In
order to put these implementations in actions,
the Company introduces organization-wide
professional human resources management
systems to maximize personnel potentiality
and capability throughout the entire business
group. Employees of all levels are encouraged
to acquire new knowledge and skills through
company-subsidized scholarship program
along with seminar/training attendance at
leading educational institutions. The Company
provides employee manual, which equips
employees with necessary information on
In addition, the Company has adopted
a progress-oriented HR policy, driven by
passionate belief in the utmost importance
of human capital in business and the vital
contribution it makes to the Company’s
achievement of common goals. Therefore, the
Company is committed to promoting greater
professional capability among employees
in parallel with continued improvements
in their quality of life. Concerning learning
and development paths made available to
employees, appropriate practical learning
programs are developed and applied to
within the Company until their retirement.
In this regard, the Company has provided
continued support to facilitate their greater
learning experiences through time allocation,
as detailed below:
Human Capital Development: The Company’s
human capital development is intended to
encourage employees to perform respective
to achieve this goal, the Company develops,
and capitalizes on, tailored individual
development plan on a continued basis. The
individual development plan is implemented
in conjunction with systematic follow-up and
performance evaluation conducted to
personnel training and development programs.
Employees of all levels throughout the business
of knowledge-based approach. In addition,
the availability of Human Resource Information
System (HRIS) within the Company not only
management but also lowers operating costs.
Under this human capital management policy,
all people across the business are engaged
side by side in continual process of knowledge
acquisition and management. Apart from
these continued HR development efforts
regardless of position levels of employees,
the Company has been making regular
investment in the area of organizational
development since 2004 with the intention
of further strengthening organizational
performance. In this regard, the Company has
disciplines to work in advisory capacity
on the organizational and human capital
development initiatives. Those professional
advisory bodies include Accenture, CSR,
INWIS and APM Group, among others. The
Company’s human capital development
policy is created in harmony with corporate
visions and business strategies. Great
emphasis is placed on development efforts
in line with current personnel management
system (PMS), which centers on competency
development. Such competency is composed
of 3 major elements; Core Competency,
Management Competency and Functional
Competency. Moreover, as the Company
management and soft skills development
among each position level as one of job
enhancement factors, other personnel
development efforts have also been made.
These efforts encompass a wide range of
personnel development aspects; for example,
prerequisite knowledge for industrial
establishment personnel, development of
management and soft skills, Leadership Program,
Coaching Program, cross-functional rotation
system, inter-departmental personnel
realignment system, trial function performance
in superior position and Star Program.
Customer: The Company builds customer
satisfaction and is responsible for customers
through offering high-quality products in
compliance with food safety, occupational
health and environment standards, adhering
to commitments given to customers, delivering
goods and service on-time and at fair prices,
making customers accurately well-informed of
available goods and service, and also placing
The Company also sets aside special unit or
appoints persons in charge of handling
ANNUAL REPORT 2011
67

THAI UNION FROZEN PRODUCTS PCL.
customer complaints and responding to those
complaints without delay.
Supplier: The Company treats suppliers
equitably and fairly in line with commercial
conditions, is willingly open for their opinions
and suggestions to forge stronger business
relations and places much attention to their
Creditor: The Company strictly adheres to loan
agreement commitments given to respective
commercial banks so as to ensure the availability
of proper and fair returns on their loan investments.
Furthermore, the Company takes best efforts
interests with creditors.
Competitor: The Company competes with
competitor under fair commercial competition,
with business ethics and in compliance with
applicable legislation, thereby having no
trading disputes with any competitor.
prepared in accordance with generally accepted
accounting standards by applying appropriate
accounting policy on a regular and carefully
The Board has provided report indicating its
Such report is exhibited alongside the auditor’s
report in the Company’s annual report to ensure
regularly following the generally accepted
accounting standards and accounting policy.
The Board opinions that there is effective administration
of internal controls in the Company and that the
statements for period ending December 31, 2011,
for which the Company’s auditors have conducted
the audits on a generally accepted auditing standards.
Remuneration for Directors and Management
Corporate Social Responsibility: The Company
perceives the corporate responsibility for the
environment in the society and community
and for natural resources conservation. In
turning its nature-care spirit into actions,
extensive corporate support is given to
communities around the plant in terms of both
safety and environment at its best. Among
our corporate social responsibilities having
been materialized include, for example,
Mangrove Sapling Bank Program, which
is aimed to safeguard intact mangrove
areas as well as to regain natural fertility
among deteriorated ones, and Hometown
Community Development Program, which has
been running on continued basis with clear
objectives of promoting community strength
and fostering pride in hometowns among
employees. Other company-sponsored CSR
initiatives in actions through the entire 2011
are further described under Sustainable
Development heading on page 50-55 of this
annual report.
monthly retainer and meeting allowance
comparable in average to the general
practice in the industry, suitable for the scope
and amount of assigned responsibilities, and
shareholders approved. Aside from the
preceding meeting allowance, directors
are not additionally remunerated from the
Company’s subsidiaries.
form of monthly retainer, meeting allowance,
salary, provident fund matching contribution
and annual bonus based mainly on operational
performance of the Company and work
performance of each director.
the form of salary, provident fund matching
contribution and annual bonus based mainly
on operational performance of the Company
and work performance of each management
member.
4. Information Disclosure and Transparency
The Board devises policy on correct, complete
channels of the Stock Exchange of Thailand and
investor relations section on corporate website in
both English and Thai languages so as to provide
equitable and credible access opportunity for
shareholders, investors and any persons interested
in obtaining such information.
The Board stands behind the Company and its
the Company does not pay any other
remuneration to directors.
The Company considers the total amount of
annual remuneration paid to the Board and
management members is not high when
compared to the average amount paid by
other listed companies in the Stock Exchange of
Thailand due to the Company’s attention to the
best interests of shareholders. The remuneration
paid to the Board and management members in
the year 2011 in comparison with its counterparts
in the year 2010 is set forth below:
68 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
2011
2010
Number (Person)
Unit : Million baht Board of Directors Management Board of Directors
Team
Meeting Allowance
Salary/Annual Bonus
Provident Fund Matching Contribution
Total
15
5.55
-
-
5.55
12
-
72.83
3.58
76.41
15
3.85
-
-
3.85
Management
Team
13
-
52.70
3.68
56.38
The Board perceives the importance of correct,
complete and transparent information disclosure to
all shareholders, investors and all parties concerned
on equitable treatment basis. Information on
clearly and timely under relevant laws to provide
target groups with correct understanding of
the Company, thereby creating acceptance
and investment sentiment among investors. The
communication also allows the Company to
gain insight into public view on the Company’s
operations, which will be a part of considerations
for future goal and strategy setting. Although the
Company clearly assigns the management and
other personnel to assist in communicating with
the pubic as follows:
1. Mr. Thiraphong Chansiri President
2. Mr. Wai Yat Paco Lee Finance Controller
Tel: 0-2298-0024 Ext. 670-4
The past continued communications of operational
to stock analysts, investors and shareholders during
2010 were as follows:
and stock analysts
of operating results
In addition, the Company provides the public
with written information dissemination through
corporate website http://www.thaiuniongroup.com
and printed media as follows:
on operational results issued to investors and
stock analysts on a quarterly basis
newsletter delivered to shareholders and
investors to regularly report new information
and updates on the Company’s operations
other interested general public
changes in need of public disclosure pursuant
Stock Exchange Commission and the Stock
Exchange of Thailand
Due to continued strong adherence to transparent
information disclosure, Securities Analysts Association
grants to the Company its annual SAA’s Picked
Award for being the most-admired listed
company’s top executive. The Company wins
Most-admired CEO Award, The Most-admired
CFO Award, The grant of the awards is based on
favorable votes cast by stock analysts and fund
managers who identify the Company’s regular
provision of complete and accurate in-depth
information, including facilitating convenient
availability and accessibility for interviews as their
deciding factors to vote for the Company.
ANNUAL REPORT 2011
69

THAI UNION FROZEN PRODUCTS PCL.
5. Board of Directors’ Responsibilities
The Board has set up policy, strategies, goals
and budgeting in order to improve operational
the Company. The Board follows up and ensures
that the management’s work performance is in
line with the work plans. The Board also clearly
members, the management, staff and other parties
concerned. The Board assigns the Audit Committee
to oversee the Internal Audit Department, to
evaluate the department’s work performance, to
ensure an adequacy of internal controls and to
promote appropriate risk management in order
to preserve the best interests of the Company.
In order to be equipped with further knowledge,
capability and potentials as visionary directorship,
the Thai Institute of Directors Association (IOD); Mr.
Thiraphong Chansiri, Mr. Rittirong Boonmechote,
Program (DAP); Mr. Chuan Tangchansiri, Pol.Maj.
and Dr. Thamnoon Ananthothai independent
director. For the Role of Chairman Program (RCP);
and Dr. Thamnoon Ananthothai. For the Role
of Compensation Committee (RCC); Mr. Sakdi
the course. For the TLCA Executive Development
Program; Mr. Rittirong Boonmechote and Mr. Chan
Chairman of the Board, has also attended the Top
Executive Program (Class 12) organized by the
Capital Market Academy (CMA) during 2011.
Although some members of the Board and
the management team are shareholders, the
management policy is based mainly on the best
interests of the Company, particularly decision
interests. Those members are not eligible for voting
in order to preserve independence in decision
making. Furthermore, the information regarding
such consideration is immediately disclosed to the
public for transparency. The necessary information
is also regularly disclosed in the Company’s annual
report and Form 56-1.
The Company has created the code of ethics or
statement of business conduct for all directors,
management team and employees. The code
serves as guidelines for their honest and equitable
work operations and is made known to all directors,
management team and employees to ensure
their awareness, understanding and compliance.
The Company believes that such practice
would improve the standards of good corporate
the Company’s management as well as preserve
justice and credibility in the capital market.
Board Composition
The Company’s Board of Directors comprises
15 members, namely; 7 executive directors, 2
directors from business partners (in support of
business strategies), 1 director from Bondholders
and 5 independent directors (3 of which also serve
as Audit Committee members). Such proportion of
the Board members allows effective considerations
for the best interests of the Company. For the year
2011, there were totally 5 independent directors
to be at one-third of the total number of Board
members or the proportion accounts for 33.33%.
Director
Committee established by the Stock Exchange
serve as independent director must be able to
perform duties to preserve the best interests of all
of interests and be available in Board meetings
to give independent and unbiased opinions and
judgments.
An independent director must meet the following
criteria:
1. Holds no more than 0.05% of total voting stocks
of TUF including stocks held by connected
persons of the independent director, as well as
nominees.
2. Is not or has not ever been a major shareholder.
3. Is not or has not ever been board member of
its parent company or an executive director,
employee, staff, advisor who receives salary of
a controlling person of TUF, its parent company,
its subsidiaries or its associated companies.
4. Is not any professional advisor.
5. Has not or has not had a business relationship
with the Company, its parent company, its
subsidiaries, its associated companies or
interests, in the manner that may interfere with
his independent judgment.
6. Does not represent the Company’s or its major
shareholder’s board members or a shareholder
who is related to the Company’s major
shareholders.
70 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
director is based on the Company’s Corporate
Governance Policy established by the Board.
Moreover, the Company’s criteria are stricter than
“the criteria” required by the Stock Exchange of
Thailand and the Securities Exchange Commission
in term of stock holding ratio.
Although the title Chairman of the Board and
Managing Director are not combined into one
position, both represent the same group of major
shareholders. However, consideration of important
matters requires approval from directors from all
groups of shareholders. Independent directors
play important roles in giving opinions, balancing
and verifying the power of management.
Board Meeting
The Board meeting is held regularly on a quarterly
agendas mutually agreed and decided by
Chairman and President. Follow-up agenda is
regularly included in the meeting. Company
secretary sends meeting agendas and meeting
invitation to the Board members not less than 12
days in advance to allocate appropriate time for
data analysis. The agendas and meeting invitation
may be sent to the Board members less than 12 days
in advance in the case of urgency or preservation of
the Company’s interests. Each meeting session lasts
about 2 hours. There were totally 7 ordinary meeting
sessions during the year 2011, with each director’s
attendance summarized below:
Board Meeting (Times)
Unit: Time
Directors
1. Mr. Kraisorn Chansiri
2. Mr. Cheng Niruttinanon
3. Mr. Chuan Tangchansiri
4. Mr. Thiraphong Chansiri
5. Mr. Rittirong Boonmechote
6. Mr. Yasuo Goto
7. Mr. Kakiuchi Takehino
8. Mr. Ravinder Singh Grewal Sarbjit S
9. Mr. Chan Tin King
10. Mr. Chan Shue Chung
11. Mr. Sakdi Kiewkarnkha *
12. Pol.Maj.Gen. Pracha Anucrokdilok *
13. Mr. Kiti Pilunthanadiloke *
14. Dr. Thamnoon Ananthothai
15. Mr. Kirati Assakul
* Independent Director and Audit Committee
Times of Attendance/
Total Sessions Held
6/7
5/7
7/7
7/7
6/7
1/7
1/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
6/7
Prior Notice via
Electronics Media
1/7
2/7
-
-
1/7
6/7
6/7
-
-
-
-
-
-
-
1/7
Remarks:
2. The company secretary is assigned to oversee and facilitate the Board meeting including documenting the meeting
ANNUAL REPORT 2011
71

THAI UNION FROZEN PRODUCTS PCL.
Subcommittee
The Board has appointed committees to assist in
governing the Company.
1. Audit Committee
Mr. Kirati Assakul
Chairman of Remuneration Committee
Mr. Kiti Pilunthanadilok
Member of Remuneration Committee
Mr. Chan Tin King
Member of Remuneration Committee
The Audit Committee has 3 years of tenure and
is composed of 3 independent directors
accounting, organizational management and law
disciplines. All independent directors neither hold
any managerial positions, nor perform employee
or consulting roles for the Company. TUF Audit
Committee composition is as set forth below:
Mr. Sakdi Kiewkarnkha
Chairman of Audit Committee
Pol.Maj.Gen. Pracha Anucrokdilok
Audit Committee
Mr. Kiti Pilunthanadiloke
Audit Committee
The Audit Committee met regularly in 14 meeting
sessions during the year 2011 to implement assigned
tasks and report performance results directly to
the Board. The details of those implemented tasks
are described under “Report of Audit Committee”
heading on page 90 of this annual report.
2. Nomination Committee
The Nomination Committee includes a Chairman
and two other members. Majority members must
required by the Securities and Exchange Commission
and the Stock Exchange of Thailand, and must have
the appropriate level and scope of experience and
expertise. TUF Nomination Committee composition
is as set forth below:
Dr. Thamnoon Ananthothai
Chairman of Nomination Committee
Mr. Sakdi Kiewkarnkha
Member of Nomination Committee
Mr. Chan Tin King
Member of Nomination Committee
3. Remuneration Committee
The Remuneration Committee includes a Chairman
and two other members. Majority members
must be independent directors possessing
qualifications required by the Securities and
Exchange Commission and the Stock Exchange
of Thailand, and must have the appropriate
level and scope of experience and expertise.
TUF Remuneration Committee composition
is as set forth below:
4. Risk Management Committee
The Risk management Committee includes a
Chairman and four other members. Majority
members must be independent directors
Securities and Exchange Commission and the
Stock Exchange of Thailand, and must have the
appropriate level and scope of experience and
expertise. TUF Risk Management Committee
composition is as set forth below:
Dr. Thamnoon Ananthothai
Chairman of Risk Management Committee
Mr. Sakdi Kiewkarnkha
Member of Risk Management Committee
Pol.Maj.Gen Pracha Anucrokdilok
Member of Risk Management Committee
Mr. Thiraphong Chansiri
Member of Risk Management Committee
Mr. Chan Tin King
Member of Risk Management Committee
Controlling System, Internal Audit and Risk
Management
Controlling System and Internal Audit: The
Company has its own Internal Audit Unit to
regularly oversee internal controls system, to
effectiveness of controlling system for greater
has also been set up to be in charge of reviewing
operations, compliance controls, risk management
and extraordinary items are incorporated. The
past internal audit reports indicated that the
Company’s operations have been in line with
controls, risk assessment, risk management and
prevention measures, compliance control and
operations.
Risk Management: The Risk Management
Committee assigns the management team to
regularly identify internal and external risk factors
as well as to conduct assessment of their impacts
on the Company’s business. Risk management
team is diversely composed of management
members and top executives who are directly
responsible for the work areas where risk factors
72 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
analyzes target risk factors in order to determine
root causes and create countermeasures. The
countermeasures are turned into practical
guidance to either prevent or minimize potential
impacts of those risks. In addition, the risk management
team also follows up and ensures that taken
corrective and preventive actions are in line with
its directed countermeasures and reports the
performance of countermeasure implementation
to Audit Committee for subsequent address in
Board meeting.
The Board determines handling procedures and
interests and connected transactions. Much efforts
and prudential considerations are independently
taken in order to identify the appropriateness of
target items under the scope of the Company’s
Corporate Governance Policy and for the best
interests of the Company. Those items with nature
transactions are treated in the same manner as
report of those items and transactions is prepared
and regularly publicized at year-end in the Company’s
annual report and Form 56-1. Furthermore,
the Company requires that the Board and
management members report to the Company
their vested interests in the Company’s and its
subsidiaries’ operations and management, or
those of their connected persons. This requirement
is aimed to furnish necessary information to the
Company and to enable the Company to comply
with its own connected transaction handling
procedures, which are established to prevent
possible siphoning of corporate funds and interests
from the Company and its subsidiaries.
The Company imposes preventive measures to
guard against the use of internal information
for personal gains among the Board and
management members by communicating their
mandatory duties to report any changes made
to the securities ownership of their own, those of
their spouses and children below lawful age to the
Securities and Exchange Commission (SEC) and
the Stock Exchange of Thailand (SET) pursuant to
Section 59 of the Securities and Exchange Act
B.E. 2535 on immediate basis and not later than
3 business days following the date of purchase,
sell, transfer or receipt of such securities. The Board
or management members or sections with access
to, or acknowledgement of, internal information
are not allowed to leak the information to the
outsiders or other unauthorized persons. In addition,
no securities trading by those management is
allowed within the period of one month prior
other material information to the public in order
to prevent illegal use of internal information
undisclosed to the public, which can affect the
trading of the Company’s share on the Stock
Exchange of Thailand.
ANNUAL REPORT 2011
73

THAI UNION FROZEN PRODUCTS PCL.
APPOINTMENT OF
DIRECTORS
Board of Directors shall appoint a director, whose
qualifications are deemed appropriate and
qualified pursuant to the Public Companies
Limited Act. Such appointment can be made
only in the event that directorship either expires
in consequence of whatever causes during the
remaining tenure. One third of directors shall retire
and new directors shall be elected in an annual
general meeting of shareholders according to
criteria and procedures set forth below:
1. Each shareholder has a right to vote in
proportion to share volume owned; the
principle of “one share, one vote” is applied.
2. Each shareholder is required to cast the entire
vote owned in 1 for one or more candidates
but can not split the vote into portions.
3. Candidates shall be entitled to directorship
based on votes received. Candidate with
and followed by the other less voted,
respectively. As a rule, the number of newly
appointed directors must not exceed the
number of new directors intended in that
election.
Shareholders, if necessary, may pass resolutions to
remove any director prior to statutory expiration of
votes of all shareholders present at a meeting is
reached; and (b) the aggregate share volume
owned by shareholders in (a) must be greater
than half of the aggregate share volume owned
by all shareholders present at the meeting. Such
of all board members and the management
comply fully with Section 68 of the Public
Companies Limited Act of 1992 and the SEC’s
Regulation Governing the Rules, Conditions and
Procedures for the Securities Offer and Permission
dated May 18, 1992.
Board of Directors shall appoint any person
to act as independent director provided that
the appointee is (a) not an employee or staff
member receiving regular salary from the
company or its subsidiaries; (b) independent of
major dominant shareholders; (c) a shareholder
of not more than 0.05% of the respective paid-up
capital of the company; and (d) able to equally
protect the interests of minority shareholders.
Board of Directors shall consider and vote to appoint
during meeting of shareholders.
74 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Authority of Board of
DIRECTORS AND
AUDIT COMMITTEE
Authority of Board of Directors
Board of Directors is authorized to manage the
company in conformity with objectives, regulations
and shareholder resolutions with honesty, in good
faith, and for the best interest of the company.
Additionally, Board of Directors is responsible for
setting corporate policy and direction as well
as ensure that the management implement the
Legal binding of the company requires a countersign
of two directors in minimum and the seal of the
may authorize certain directors to deal with such
legal binding.
Board members are required to disclose any
material interest in transactions or contracts which
the company enters into and increase/decrease
in share/debenture ownership in the company
Directors is authorized to implement and direct
the company’s activities except for the following
issues, which require prior shareholder approval.
(1) Any issue that requires shareholder approval,
pursuant to the law;
(2) Altering the company’s par value or registered
capital;
(3) Increase in the company’s Board members.
(4) Any deed that yields Board of Directors’ gain
or loss or any deed that is obliged, by SET
regulations, to have shareholder’s approval.
Authority of Executive Directors
(1) Implement the company’s policy, which
obliges to laws, conditions, regulations, and
rules of the Company, except for those issues
subjected to the consent of shareholders.
(2) Set, propose and devise business policy and
strategy to Board of Directors.
(3) Set business plan, business management
authority, annual budget estimation, and
budget allocation propose all these to Board
of Directors for review and approval, as well
as follow business plan and strategy in
accordance with the corporate policy and
business guidelines to committed to Board of
Directors.
(4) Handle general business administration, set
up organization and management structures
to cover all aspects of personnel recruitment,
training, employment, and employment
termination.
institution, including giving collateral or
making any payment for normal business
transactions, e.g. payment made for branch
expansion investment or any regular business
operations. The approval of the said credit
facility must involve not over Bt200 million or
equivalent in value, or the value as approved
by Board of Directors. However, the credit
facility value allowed for approval may be
subject to change as deemed appropriate
depending on the consideration of Board of
Directors.
(6) Appoint or dismiss any employee holding
position lower than managing director.
(7) Perform other duties as assigned by Board
of Directors.
ANNUAL REPORT 2011
75

THAI UNION FROZEN PRODUCTS PCL.
In addition, the above-mentioned approval
authorities must not be in nature of any business
transactions that allow executive directors, or
their authorized persons, to grant further approval
interest (according to the company’s articles of
Stock Exchange of Thailand) with the company
or its subsidiaries except that the said approval is
given for business transactions in accordance with
corporate policy and criteria approved by Board
of Directors, provided that executive directors
with vested interest in such issue are not eligible
for voting right. Board of Directors is authorized
to make change to the authority of executive
directors as deemed necessary or appropriate.
The following policies are under the consideration
of managing director or Board of Directors:
(1) Financial Policy
Directors
by Board of Directors
Directors
President
(2) Business and Marketing Policy; approved by
Managing Director
(3) Management Policy
Executive Directors
Managing Director
(4) Employee Policy
Executive Directors
punishment or resignation of the
management; approved by Managing
Director
(5) Budgeted Purchase of Fixed Assets; approved
by Managing Director
(6) Unbudgeted Purchase of Fixed Assets;
approved by Board of Directors
In the case where Board of Directors authorizes
another person to perform duties on behalf of
Board of Directors regarding ordinary business
conduct, such authorization is made following
the resolution passed in Board of Directors’
and responsibility. Such authorization does not
give authority to the said authorized person to
approve issues that the said authorized person,
or other persons may have vested interest
company or its subsidiaries.
Authority of Audit Committee
The company requires that Audit Committee
consist in minimum of 3 independent members
with assigned duties in accordance with those
Commission’s and the Stock Exchange of
Thailand’s regulations. Audit Committee is
competent experience to review the fairness of
performing other duties in their capacity as Audit
Committee, as summarized below:
(1) Perform the followings: (a) ensure that Board’s
directions are fully followed; (b) maintain
transparency; (c) provide Internal Audit
Department with task guidelines; (d) review and
approve annual internal audit plan submitted
by Internal Audit Department; (e) manage
compliance with applicable requirements, laws
and regulations; and (g) give opinions and
assess an adequacy of internal controls and
report to Board of Directors.
reports and provide guidelines for preparing
such reports and relevant analysis prior to
submission to Board of Directors.
(3) Devise policy on commercial best practice
with emphases on prohibitions and
responsibilities applied to staff.
(4) Coordinate with external parties, e.g.
Exchange Commission, the Stock Exchange of
Thailand, for opinions on the company’s internal
controls and review of relevant regulations.
76 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Shareholding
STRUCTURE AND
MANAGEMENT
Shareholder
Shares %
01. Chansiri Family
02. Niruttinanon Family
03. Mitsubishi Corporation
04. Thai NVDR Co., Ltd.
05. Merrill Lynch International – GEF Account Client General
06. Boonmechote Family
07. Chase Nominees Limited 42
09. Hogoromo Foods Corporation
10. Mr. Tin King Chan
241,519,925
75,823,508
72,446,900
38,283,856
29,840,000
26,326,500
26,316,700
22,607,819
18,900,000
18,553,327
25.25
7.93
7.58
4.00
3.12
2.75
2.75
2.36
1.98
1.94
Remark: On the closing date of register book (August 30, 2011) and based on total number of shares of
for exercising their right to vote in shareholder meeting 4.00% of total votes will be excluded.
ANNUAL REPORT 2011
77

THAI UNION FROZEN PRODUCTS PCL.
Shareholding Structure as of December 30, 2011
Types
% Holding
JURISTIC PERSONS
Thai
Foreign
Total
PRIVATE INDIVIDUALS
Thai
Foreign
Total
GRAND TOTAL
2011
33.84
33.63
67.47
32.21
0.32
32.53
100.00
2010
31.76
34.64
66.40
32.22
1.38
33.60
100.00
Change in Shareholdings of The Board of Director as of
December 31, 2011 and 2010
Board of Directors
01. Mr. Kraisorn Chansiri
02. Mr. Cheng Niruttinanon
03. Mr. Chuan Tangchansiri
04. Mr. Thiraphong Chansiri
05. Mr. Rittirong Boonmechote
06. Mr. Yasuo Goto
07. Mr. Kakiuchi Takehiko
08. Mr. Chan Tin King
09. Mr. Chan Shue Chung
10. Mr. Ravinder Singh Grewal Sarbjit S
11. Mr. Sakdi Kiewkarnkha
12. Pol.Maj.Gen. Pracha Anucrokdilok
13. Mr. Kiti Pilunthanadiloke
14. Dr. Thamnoon Ananthothai
15. Mr. Kirati Assakul
TOTAL
As of
December 31, 2011
122,282,016
60,716,605
9,400,000
82,422,782
13,100,000
-
-
18,553,327
2,878,182
-
-
6,310
-
-
21,000
309,380,222
As of
December 31, 2010
122,282,016
61,417,272
9,400,000
78,602,082
13,100,000
-
N/A
18,553,327
2,978,182
-
-
6,310
22,845
-
21,000
306,383,034
Remark: Shareholders of TUF that included spouse and children

THAI UNION FROZEN PRODUCTS PCL.
Remuneration for
DIRECTORS AND
MANAGEMENT
Remuneration 2011 (Baht)
Board of Directors Monthly Retainer Meeting allowance
Audit
Committee Fees
1. Mr. Kraisorn Chansiri
360,000
120,000
2. Mr. Cheng Niruttinanon
180,000
75,000
3. Mr. Chuan Tangchansiri
180,000
105,000
4. Mr. Thiraphong Chansiri
180,000
105,000
5. Mr. Rittirong Boonmechote
180,000
90,000
6. Mr. Yasuo Goto
180,000
15,000
7. Mr. Kakiuchi Takehiko
180,000
15,000
8. Mr. Chan Tin King
180,000
105,000
9. Mr. Chan Shue Chung
180,000
105,000
10. Mr. Ravinder Singh Grewal Sarbjit S
180,000
105,000
11. Mr. Sakdi Kiewkarnkha
240,000
105,000
540,000
12. Pol.Maj.Gen. Pracha Anucrokdilok
240,000
105,000
240,000
13. Mr. Kiti Pilunthanadiloke
240,000
105,000
240,000
14. Dr. Thamnoon Ananthothai
240,000
105,000
15. Mr. Kirati Assakul
240,000
90,000
Remuneration 2011 (Baht)
Salary, Bonus and Provident Fund
12 members of the management team 76.41 Million
Other Forms of Remuneration: None
ANNUAL REPORT 2011
79

THAI UNION FROZEN PRODUCTS PCL.
Connected
TRANSACTIONS OF
LISTED COMPANY
CONNECTED TRANSACTION SUMMARY BY CATEGORY
Connected Company
Position Held
in TUF
No. of Shares Owned
in Connected
Company
1. Thai Union Feedmill Co., Ltd.
Mr. Rittirong Boonmechote
Director
3,539,985
11.8%
Mr. Prasert Boonmechote
Relative of Director
1,500,000
5.0%
(Mr. Rittirong’s father)
Mr. Wattana Boonmechote
Relative of Director
1,050,000
3.5%
(Mr. Rittirong’s brother)
2. Thai Union Seafood Co., Ltd.
Mr. Rittirong Boonmechote
Director
2,649,900
13.2%
Mr. Prasert Boonmechote
Relative of Director
2,000,000
10.0%
(Mr. Rittirong’s father)
Mr. Wattana Boonmechote
Relative of Director
600,000
3.0%
(Mr. Rittirong’s brother)

THAI UNION FROZEN PRODUCTS PCL.
The company has transactions with individuals /
on the shareholding structure of the company,
such transactions. Nevertheless, those transactions
minority shareholders of the company.
With regards to business transactions with
the company has provided the details of such
transactions in the Note (Item 10) for reference.
Further details related to those transactions,
excluding those already provided in the Notes to
the Financial Statements, are as follows:
Policy of Price Connected Transactions for year 2011
Market Price
Market Price
Commercial Transactions:
Supporting Commercial Transactions:
at the total amount of Bt780,000.
Asset or Service Transactions: -
Financial Assistance Transactions:
at the total amount of Bt1,071
(No balance of loan as of December 31, 2011)
Commercial Transactions:
Supporting Commercial Transactions:
at the total amount of Bt4,286,400.

THAI UNION FROZEN PRODUCTS PCL.
Connected Company Position Held in TUF
No. of Shares Owned
in Connected
Company
3. Lucky Union Foods Co., Ltd.
Mr. Cheng Niruttinanon
Director
102,000
11.3%
4. Chansiri Real Estate Co., Ltd.
Mr. Thiraphong Chansiri
Director
19,680,000
32.8%
Mr. Dejphon Chansiri
Relative of Director
15,260,000
25.4%
(Mr. Kraisorn’s son)
Mr. Disaphol Chansiri
Relative of Director
15,260,000
25.4%
(Mr. Kraisorn’s son)
Mr. Kraisorn Chansiri
Director
7,800,000
13.0%
Ms. Bussakorn Chansiri
Relative of Director
2,000,000
3.4%
(Mr. Kraisorn’s wife)
Mr. Chuan Tangchansiri
Director
-
-
5. Thai Union Securities Co., Ltd.
Mr. Kraisorn Chansiri
Director
2,200
22.0%
Mr. Cheng Niruttinanon
Director
2,000
20.0%
Mr. Chuan Tangchansiri
Director
1,000
10.0%
6. Jana Industry Co., Ltd.
Mr. Cheng Niruttinanon
Director
50,000
25.0%
7. TC Union Agrotech Co., Ltd.
Mr. Cheng Niruttinanon
Director
496,000
49.6%
82 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Policy of Price
Connected Transactions for year 2011
Market Price
Compare to
neighbor areas
Commercial Transactions:
Supporting Commercial Transactions:
Short-term Rent of Immovable Property Transactions:
to facilitate business transactions, the three companies entered into rental
contract with the Chansiri Real Estate Co., Ltd., a real estate developer.
The contracted rental charge is Bt270/square metre/month and the service
charge is between Bt180/square metre/month depending on level of the rented
area. The rental and service charge is consistent with general market price in
the industry and apply only for rented area, excluding other utility charge.
The rental period is 3 years. The contract will expire in December 2013. Under
the Board of Directors’ Meeting No.8/2010 resolution passed on November 1, 2010.
Commercial Transaction: -
Market Price
Market Price
Commercial Transactions:
Commercial Transactions:
Asset or Service Transaction:
at the total amount of Bt378,788.
ANNUAL REPORT 2011
83

THAI UNION FROZEN PRODUCTS PCL.
Connected Company Position Held in TUF
No. of Shares Owned
in Connected
Company
8. Lucky Surimi Products Co., Ltd.
Mr. Cheng Niruttinanon
Director
1
0.0%
9. Ekawat Products Co., Ltd.
Mr.Prasert Boonmechote
Relative of Director
100,000
20.0%
(Mr. Rittirong’s father)
Mr. Wattana Boonmechote
Relative of Director
137,500
27.5%
(Mr. Rittirong’s brother)
Ms.Rungtiwa Boonmechote
Relative of Director
50,000
10.0%
(Mr. Rittirong’s sister)
10. Pae Rungtiwa
Ms. Rungtiwa Boonmechote
Relative of Director
-
-
(Natural Person)
(Mr. Rittirong’s sister)
11. Geminai & Associate Co., Ltd.
Mr. Dejphon Chansiri
Relative of Director
459,870
92.0%
(Mr. Kraisorn’s son)
84 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Policy of Price
Connected Transactions for year 2011
Compare to
neighbor areas
Market Price
Short-term Rent of Immovable Property Transaction:
service of Lucky Surimi Products Co., Ltd., as a solution for the Company’s
inadequate processing area for extension of its value added production line
(pie and ready-to-eat food). The rental agreement is effective for 3 years,
between January 1st, 2010 and December 31st, 2012 at Bt495,000.00 per
month (the said amount is only for the rent and service charge, excluding
expenses on water supply, electricity and telephone). Under the Board of
Directors’ Meeting No.2/2010 resolution passed on March 24, 2010.
Asset or Service Transaction:
at the total amount of Bt45,000.
Commercial Transaction:
Market Price
Market Price
Commercial Transaction:
Commercial Transaction:
Asset or Service Transactions:
at the total amount of Bt44,968,465. Under the Board of Directors’ Meeting
No.5/2010 resolution passed on August 4, 2010.
at the total amount of Bt3,925,467.
ANNUAL REPORT 2011
85

THAI UNION FROZEN PRODUCTS PCL.
Connected Company Position Held in TUF
No. of Shares Owned
in Connected
Company
12. Waithai Co., Ltd.
Mr. Cheng Niruttinanon
Director
100,000
31.3%
Mr. Kraisorn Chansiri
Director
59,200
18.5%
Mr. Chuan Tangchansiri
Director
20,000
6.3%
Mr. Thiraphong Chansiri
Director
20,000
6.3%
13. Ahead Way
Mr. Cheng Niruttinanon
Director
6,998
70.0%
International Co., Ltd.
14. Thaipatana
Mr. Cheng Niruttinanon
Director
20,000
40.0%
Stainless Steel Co., Ltd.
Mr. Chan Hon Kit
Director
5,000
10.0%
Mr. Chuan Tangchansiri
Director
5,000
10.0%
15. Yueh Chyang
Mr. Cheng Niruttinanon
Director
120,181US$
6.2%
Canned Food Co., Ltd.
86 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Policy of Price
Connected Transactions for year 2011
Market Price,
Compare to general
supplier
Market Price
Market Price
Market Price
Supporting Commercial Transactions:
Under the 2011 AGM resolution passed on April 25, 2011of the expenses
for transaction per year not exceeding Bt100 million with connected
persons for 3 years.
Commercial Transactions:
Asset or Service Transactions:
Under the 2011 AGM resolution passed on April 25, 2011of the expenses
for transaction per year not exceeding Bt150 million with connected
persons for 3 years.
Short-term Rent of Immovable Property Transaction:
at the total amount of Bt90,000.
Commercial Transactions:
Purchase of raw materials from TUM at the total amount of Bt69,023,155.
ANNUAL REPORT 2011
87

THAI UNION FROZEN PRODUCTS PCL.
Connected Company Position Held in TUF
No. of Shares Owned
in Connected
Company
16. Biz Dimension Co., Ltd.
Mr. Kraisorn Chansiri
Director
2,850,000
9.5%
Mr. Chan Tin King
Director
749,997
2.5%
Mr. Thiraphong Chansiri
Director
49,995
0.2%
17. Thai Union
Mr. Kraisorn Chansiri
Director
16,300
54.3%
Properties Co., Ltd.
Ms. Bussakorn Chansiri
Relative of Director
7,700
25.7%
(Mr. Kraisorn’s wife)
Mr. Thiraphong Chansiri
Director
2,400
8.0%
Mr. Dejphon Chansiri
Relative of Director
1,800
6.0%
(Mr. Kraisorn’s son)
Mr. Disaphol Chansiri
Relative of Director
1,800
6.0%
(Mr. Kraisorn’s son)
Mr. Chuan Tangchansiri
Director
-
-
Remarks:
and under general trading conditions under the Board of Directors’ Meeting No. 5/2008 resolution
passed on August 20, 2008.
connected company less than 10% of its registered capital but also hold director titles in the said
connected company.
number of shares.
Consultants (Thailand) Co., Ltd. as insurer. The transaction is considered connected, as Mr. Chuan
Tangchansiri, TUF Director, also has director title in the insurer. Through the entire year 2011, TUF paid
The insurer is entitled to commission only partially from total amount of the paid premium.
88 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Policy of Price
Connected Transactions for year 2011
Market Price
Supporting Commercial Transactions:
and e-Auction service from TUF at the total amount of Bt400,000.
and e-Auction service from TUM at the total amount of Bt300,000
and web-based activities from THD at the total amount of Bt983,944.
ANNUAL REPORT 2011
89

THAI UNION FROZEN PRODUCTS PCL.
REPORT OF
AUDIT COMMITTEES
To Our Directors and Shareholders,
TUF Audit Committee is composed of 3
independent directors who are professionally
management, law, internal controls and risk
management. All Audit Committee members
of the Stock Exchange Commission’s and the
Stock Exchange of Thailand’s regulations. They
neither hold any managerial position, nor perform
employee or consulting roles for the Company. TUF
Audit Committee composition is as set forth below:
Mr. Sakdi Kiewkarnkha,
Independent Director, acting in capacity as Audit
Committee Chairman; attended 14 meeting
sessions during the year 2011.
Pol.Maj.Gen. Pracha Anucrokdilok,
Independent Director, acting in capacity as
Audit Committee Member; attended 14 meeting
sessions during the year 2011.
Mr. Kiti Pilunthanadiloke,
Independent Director, acting in capacity as
Audit Committee Member; attended 14 meeting
sessions during the year 2011.
The Audit Committee convened in 14 sessions
during the year 2011, with key tasks summarized
as follows:
The Audit Committee has examined the annual
2011, and found that all of the Company’s
had been prepared in accordance with generally
accepted accounting standards and that
adequate, complete and reliable information
disclosure had been preserved. In addition, the
Audit Committee also conducted a review of
disclosure of connected transactions between
the Company and its subsidiaries and those
The review by the Audit Committee also ensured
compliance with securities and stock exchange
laws, Stock Exchange of Thailand requirements,
and laws pertaining to the Company’s business.
The Audit Committee also ensured that internal
audits were implemented according to approved
plans, followed up on corrective actions taken
well as preventing or minimizing potential risks. In
2011, the Internal Audit Department conducted
internal audits for the Company and 7 domestic
subsidiaries. The Audit Committee was informed
Internal Audit Department on a regular basis.
Based on such reports, the Audit Committee
declared that the Company’s and its subsidiaries’
internal controls and risk management systems
were maintained in an appropriate manner,
with each company’s managerial staff closely
monitoring their operations. The Company places
considerable importance on internal audit
organizational hierarchy for both the Internal Audit
Department and personnel attached to it since
January 1, 2011.
90 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
The Audit Committee visited the Company and 4
of its domestic subsidiaries, and attended meetings
with the management of each company to review
issues pertaining to risk management, internal
statements problems, and problems concerning
independent auditors and internal auditors.
Such on-site visits also included observation of
manufacturing processes, inventory management,
and general environmental conditions.
The Audit Committee Chairman visited 5 overseas
subsidiaries in France, Portugal, Seychelles and
Ghana (2 subsidiaries), and attended meetings
with the management of each company to discuss
various corporate issues. As with the visits paid to the
Company and its domestic subsidiaries in Thailand,
such on-site visits also included observation of
manufacturing processes, inventory management,
and general environmental conditions.
The Audit Committee acted according to its
terms of reference to assist the Board of Directors
were performed with ensured independence
and objectivity as well as with fully unconditional
access to relevant information. Expression of
professional opinions were based on transparency
and all in conformity with the Good Practice
Guidelines stipulated by the Stock Exchange of
Thailand. As a result of its work during the year
under review, the Audit Committee opinioned that
the Company had operated under adequate
and appropriate internal controls and risk
been prepared in accordance with generally
accepted accounting standards, and that
relevant legislative and regulatory requirements
were fully observed.
The Audit Committee conducted performance
appraisal of independent auditors and found that
they had performed their professional roles with
independence and had full unconditional access
to all data required. The independent auditors
made inquiries to the Company’s executives
and directors to provide observations and
suggestions involving accounting systems, internal
controls and risk management to the Company
and its subsidiaries as they deemed necessary
and appropriate. Seeing that their professional
performance, according to the performance
appraisal conducted, was satisfactory and proved
interest, the Audit Committee proposed that
to act in the same capacity for the year 2012,
and proposed the remuneration to the Board of
shareholders’ meeting accordingly.
(Mr. Sakdi Kiewkarnkha)
(Pol.Maj.Gen. Pracha Anucrokdilok)
(Mr. Kiti Pilunthanadiloke)
ANNUAL REPORT 2011
91

THAI UNION FROZEN PRODUCTS PCL.
FINANCIAL
RATIOS
2010-2011 Comparative Financial Ratios
1. Liquidity Ratios
Ratios Year 2011 Year 2010
1.59
1.62
0.48
0.49
2. Leverage Ratios
2.07
2.22
1.47
1.61
3.74
6.21
1.25
1.29
3.50
3.37
9.72
9.10
13.29
14.52
16.59
13.33
5.10
3.95
22.36
15.41
10.75
8.58
5.30
3.20
1.56
1.60
25.53
23.36
* Debt = Interest-bearing debts only
**Pre-tax ROA = EBIT / Average total assets
92 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Explanation of
FINANCIAL
RATIOS
The current ratio fell slightly to 1.59 times in 2011
from 1.62 times in 2010 while the quick ratio also
dropped to 0.48 time in 2011 from 0.49 time in
2010. The decline in the values of these ratios was
caused by the fact that the value of total current
assets increased by 18%, while the value of total
current liabilities increased by as much as 20%
from a year ago. The current liabilities therefore
expanded in a faster pace that of current assets,
causing the value of the ratio to drop.
The total liabilities-to-equity ratio declined to 2.07
times in 2011 from 2.22 times in 2010. Total liabilities
(including all debts and liabilities) rose moderately by
9% as sales continued to expand while shareholders’
equity jumped by 16% from a year ago, thanks
consolidation of MW Brands and continual business
expansion. The debt-to equity ratio, which addresses
the interest-bearing debts only, gradually came down
from the peak at 1.61 times in 2010 to 1.47 times in
prepayment of long term debts from MW Brands
acquisition. The time-interest-earned ratio decreased
to 3.74 times in 2011 from 6.21 times in 2010 when
the full year impact of the increased interest costs
on debts as the consequence of MW Brands was felt.
Asset turnover ratios: The total asset turnover ratio
and accounts receivable ratio decreased to 1.25
times from 1.29 times while accounts receivable
turnover ratio rose to 9.72 times from 9.10 times
a year ago, thanks to a high sales growth rate of
38% (in Thai baht term) during the year. Total assets
increased by 11% only (where inventories were up
by 22% and accounts receivable by 21%).
Inventory turnover ratio increased to 3.50 times
from 3.37 times in 2010 as a result of 33% increase
in the cost of sales but the average inventory was
up by 22% only. Accounts payable turnover ratio
declined to 13.29 times from 14.52 times in 2010 due to
the fact that the cost of sales rose 33% from a year ago
with accounts payable also increasing only by 10%.
stride from a year ago. Sales in Thai baht term or
US dollar surged sharply from a year ago, thanks
to continual growth of the core business and the
European acquisition. Despite some historically high
raw material prices, the recovery of shrimp business
margin from 13.33% in 2010 to 16.59% in 2011 and
Shareholders’ equity increased by 16% whereas
on average equity in 2011 rose from 15.41% a year
ago to 22.36%. The higher shareholders’ equity was
while the amount of dividend payments during the year
was kept at Bt1,195 m as part of the de-leveraging
policy. As a result, the book value per share rose from
Bt23.36 in the previous year to Bt25.53 at the end of 2011.
The total number of common shares in 2011 remained
by 80%, leading to higher earnings per share (EPS).
with Bt2,874 million in 2010 with EPS of Bt5.30 and
Bt3.20 respectively.
The value of average total assets was by 11% as
earnings before interest and tax (EBITDA) rose to
70%, leading to a higher pre-tax return on assets
(ROA), up from 8.58 times to 10.75 times in 2011.
Despite our long term dividend payout policy of
50%, we limited our payment to Bt 1,200 million at
from new debts incurred due to MW Brands acquisition.
As a result, the payout ratio dropped to 29%, but
the actual payment only decreased by 2.5%, thanks
to better earnings in 2011.

THAI UNION FROZEN PRODUCTS PCL.
REFERENCES
Common Share Registrar
Thailand Securities Depository Co., Ltd
7 th Floor, The Stock Exchange of Thailand Building
62
Bangkok 10110
Tel: 66 (0) 2229-2440
Convertible Debentures Registrar
Stock Information Department
Thai Union Frozen Products PCL. (TUF)
26 th Floor, S.M. Tower, Phaholyothin Road,
Samsennai, Phayathai, Bangkok 10400 Thailand
Tel: 66 (0) 2298-0024
Fax: 66 (0) 2298-0553
Independent Auditors
Mr. Sophon Permsirivallop or
Ms. Rungnapa Lertsuwankul or
Mr. Chayapol Suppasedtanon or
Ms. Pimjai Manitkajohnkit
Bangkok 10110
Tel: 66 (0) 2264-0777, 2661-9190
Fax: 66 (0) 2264-0709
Independent Auditor Remuneration
1. Audit Fee
The Company and subsidiaries paid audit fee to:
are attached to, individual or entity
related to independent auditors and
7,405,400 Bt
2. Non-Audit Fee
The Company and subsidiaries paid remuneration
incurred by the following service:
independent auditors are attached to,
individual or entity related to independent
independent auditors are attached to,
individual or entity related to independent
94 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Management
DISCUSSION AND
could digest and manage the sizeable acquisition
sizeable amount of debts. As the year progressed,
performance was still partially dampened by the yet
recovering shrimp export business and accounting
adjustments due to MW Brands acquisition), operating
performance improved sharply and was delivered
according to plans despite the high raw material
prices in the second half of the year and continual
uncertainty in key economies, such as the US and
the European Union. The Thai baht situation was
only took a plunge in late fourth quarter when the
disaster with no negative impact. MW Brands
managed to report a very consistent performance
throughout the year, which helped ensure investors
in interest expenses, the underlying operating
As expected, the European market becomes
remained as its largest market at 36% of sales
(though compared with 46% a year ago), followed
by Europe at 32%, while Japan and the Thai market
are 10% respectively. This composition led to a more
balanced market exposure. Sales generated from
Europe (up 190%, thanks to MW Brands acquisition),
Middle East (up 71%), Asia ex-Japan (up 36%),
Oceania (up 30%), Japan (up 24%), South America
(up 18%), Thai domestic market (up 16%), the US
(up 10%) and Canada (up 5.0%) were all higher
than a year ago as opposed to Africa (down 5%).
In terms of the main operating units, Chicken of
the Sea International accounted for 13% of the
total group sales while Chicken of the Sea Frozen
Products for 19%. In other words, the US operating
units added up to 32% of the total. MW Brands also
23% when Thai and other operating units made up
for the biggest portion (45%).
Total tuna sales (can + loin) in US dollar term were
USD1,545 million, up 70% from USD912 million a
year ago while volume (tonnage) increased by
30%. The factor behind the increase was essentially
consolidation of MW Brands’ full year result, leading
the historic high raw material prices, particularly
in the second half of the year, also led to upward
price adjustments. Tuna sales in the US inched up
there. Nevertheless, tuna sales to all other markets
were strong, namely Europe (up 232%), Middle East
(up 67%), Asia ex-Japan (up 46%), Japan (up 44%),
Oceania (up 37%), Africa (up 27%), South America
(up 21%) and Canada (up 6%). The tuna raw material
a new record at USD2,000 in September, then
reaching another new high (USD2,030) in December.
On average, the price has increased by 37% from
a year ago. Therefore, the average selling price
was also adjusted upward by 30% when sales volume
in tonnage increased by 30%.
With regards to the raw material price situation,
the average skipjack tuna raw material price for
WPO in 2011 was US$1,766 / metric ton, up 37%
from a year ago (US$1,287 / metric ton). During
the year, tuna prices (skipjack) were generally on
an uptrend. The year started with prices at around
US$1,500 and stayed stable through April.
ANNUAL REPORT 2011
95

THAI UNION FROZEN PRODUCTS PCL.
Then prices rose continuously since May and set a
new high (US$2,000) in September. After some brief
stability, the price surged to another new high
(USD2,030) in December. As of the latest (February
2012), prices dropped slightly to USD1,930. The
higher raw material price was generally attributable
to periodic poor catches (as a result of unpredictable
and sometime extreme weather patterns), increased
Total shrimp sales in US dollar term were USD615
million, up 22% from a year ago while volume
(tonnage) growth was also on an uptrend, up 5%.
Selling prices were generally adjusted upward to
cope with the persistently higher shrimp raw material
prices. The demand was healthy thanks to the
gradual recovery of the US economy, our successful
penetration into the EU markets and increased
sourcing from Japan. The dominant market remained
the US, followed by Japan while the fast developing
market was the EU. Both the EU and Japan are main
markets for the higher value-added products.
In 2011, the domestic shrimp raw material price
has become more stable, though still at high levels,
since the upward trend in 2010. In general, the
average price (60 pieces / kg) was Bt142 / kg,
which was 16% higher than the previous year, partly
due to the local shrimp supply disruptions as a result
the Central Region in the last quarter. It was estimated
sending prices higher upon the strong demand in
the market. Nevertheless, it is expected that prices
could be slightly higher in 2012 as local supply is still
In July, 2011, the US Department of Commerce
shrimp anti-dumping (AD) duty rate for Thai exporters
(and effective) rate for non-mandatory respondents
(All Others) was reduced further from last round’s
2.61% to 0.73%. This new rate would serve as a
reference rate for TUF’s shrimp exports to the US
between now and the announcement of another
AD rate in the next annual review due September
2012. The lower rate was considered very favorable
even though we are becoming less concerned
about the impact of the AD rate as an increasing
portion of our shrimp shipments to the US are
value-added products (e.g. breaded products)
which are not subject to the duty. The low rate is a
positive development, indicating a fading trade
issue. It should allow Thai shrimp exporters to compete
more effectively with other shrimp exporting countries,
Brazil, in the US market. Thanks to the continual
expansion of its domestic market, China is becoming
less a trade threat, but a potential export market
for Thai shrimp exports.
from Bt 2,874 million to set a new corporate milestone,
as margins expanded in most categories, particularly
in shrimp and tuna business. Thai baht exchange
rate (vs. USD) was generally stable (except for the
last quarter when it weakened considerably due
to the fear of any adverse impact of the historic
dropped to Bt305 million from Bt807 million in 2010.
Average selling prices were generally adjusted
upward to cope with higher raw material costs.
EBITDA of Bt10,105 million, jumping by 70% from
Bt5,950 million a year ago, thanks to accretive
acquisition of MW Brands. The operating cash
new high at Bt2,272 million due to increased debts
incurred for the European acquisition.
Pre-tax return on assets (ROA) and return on equity
(ROE) also increased to 11% and 22% respectively,
demonstrating the continual improvement in the
to 1.44x from 1.57x at the end of 2010 and Debt-EBITDA
ratio fell dramatically to 3.94x from 7.38x a year
ago (when the acquisition debts are completely
recognized, but only two months of MW Brands
operations were included last year). We expect
near 1.0x at the end of 2012 while Debt / EBITDA
ratio should fall to close to 2.5x or below during the
same time.
96 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
MW Brands Update
More than one year after the acquisition, MW Brands
continued to deliver consistent and predictable
performance. In 2011, MW Brands maintained its
position as one of the largest shelf-stable/ ambient
seafood processors in Europe with annual sales of
has been consistent from last year. The biggest
around 78% of its sales. Sales from its own brands
were also in excess of 80% of the total. Thanks to
integrated operations and the market leading
positions of its brands, MW Brands managed to
deliver healthy margins in the past few years.
Ireland (70%) and Netherlands (34%) while Petit
Navire remained the No.1 (28%) canned seafood
brand in France. Both brands accounted for 90%
of MW Brands total sales. Mareblu maintained its
No.3 position (6%) in the Italian canned seafood
market with market share on the rise.
During 2011, the parent company carried out a
acquisition debts with existing lenders and Thai
baht-denominated loans through issuing Thai
baht debentures worth Bt6,750 million
acquisition of MW Brands, the maturity of the
majority of our Thai baht debentures (only
Bt500 million remaining in June) and an
opportunity to bring our interest burden down,
we launched a series of Thai baht debentures
of our Thai baht loans originally raised for the
acquisition in a year before. The debentures
were of 3-year, 5-year and 10-year maturity
which were also assigned A+ rating by TRIS
Rating. Siam Commercial Bank Public Company
Limited (Bangkok Branch), were appointed as
the joint lead underwriters for such debentures.
such a large amount of debentures as well as
with the longest tenor. Thai institutional investors
witnessed by a strong response and excessive
investor demand on the book-building day
when the issues were 1.7 times oversubscribed.
size from the initial plan of Bt4,500 million to
Bt6,750 million. Considering the arrangements,
it is estimated the all-in savings should be
approximately 100 basis points in term of interest
managed to re-negotiate with the existing
lenders of the euro-denominated loans for
lower interest rates in September 2011. Similarly,
the annual interest cost savings amounted to
approximately 100 basis point on the outstanding
euro loans that would expire in less than 4 years
on average.
2. U.S. Pet Nutrition penetrating US pet market
Since the announcement of setting a new
venture U.S. Pet Nutrition in December 2010, the
pet food processing plant in Georgia, US, right
next to Chicken of the Sea’s existing plant. This
new investment is expected to open up new
opportunities to penetrate the premium US pet
food market. Thanks to its strategic location, it
dry pet food, taking advantages of the supply
of local raw materials. The new plant started to
produce since the beginning of 2012, though
still at a very initial stage. In spite of the fact
that pet food is positioned to be one of the
business has in fact a bigger market than that
of canned tuna in the US with a potentially
attractive margin. The move is meant to develop
tuna and shrimp which have already established
3. Investment in 40% of Pakfood Public Company
Limited
On December 21, the board of directors
passed a resolution to purchase shares of
Pakfood Public Company Limited (PPC)
ANNUAL REPORT 2011
97

THAI UNION FROZEN PRODUCTS PCL.
through a voluntary tender offer which would be
paid fully in cash and to sign the share purchase
agreement (SPA) with major shareholders of PPC
to purchase PPC shares of not less than 40 percent.
Pakfood is one of the leading Thai frozen
seafood processor and exporter with a strong
focus in frozen shrimp, pasteurized crab meat
and ready-to-eat meals (chilled and frozen). Its
main markets are the US, the EU and Japan. It
also owns a local brand “T Time” focusing on
value-added food products, such as dim sum,
As of December 31, 2011, its total assets were
worth Bt3,817 million.
On February 29, the transacted price was
agreed at Bt 51 per PPC share. However, the
tender offer is subject to satisfaction of conditions
precedent such as 1) approvals of all matters
as required under transaction documents by
the board of directors; 2) satisfactory completion
of PPC.
cooperation between the two leading seafood
companies which both share similar business in
shrimp and value-added frozen food products.
material sourcing, improved management
of manufacturing capacities and more joint
marketing efforts to expand our local and
overseas markets, such as the US and the EU
which have been offering plenty of growth
opportunities. With PPC’s capability of value-added
frozen seafood products, this partnership should
lead to more business opportunities as TUF
can offer more variety of products to serve
consumers’ needs.
It is estimated that the typical annual shrimp
amount to almost 20% of total Thai shrimp
output per year, creating a crucial advantage
for the alliance. In addition, as the local labor
supply continues to tighten, this linkup should
also lead to more optimal capacity utilization at
expansion. As a result of these, it should lead to
98 ANNUAL REPORT 2011
better supply chain management that could
potentially create more cost savings and further
After the successful purchase of the company’s
existing shares, the earnings of PPC will be
recognized in TUF’s income statement by the
outstanding common shares. The share acquisition
will be paid in full by cash which will be funded
position should be very limited, given that the
size of investment relative to the total assets
value of TUF. This transaction is expected to be
completed in the early second quarter of 2012.
The following paragraphs summarize our 2011
Financials
Sales
Consolidated sales in dollar term surged by 43%
YoY in 2011. In Thai baht term, sales increased by
38% to Bt98,670 million from Bt71,507 million in
2010. Sales of the group could still grow by 13.2%
in 2011 even if the full year sales contribution of
MW Brands in 2010 was considered. MW Brands
acquisition was indeed completed in late Oct,
2010. Therefore only operating performance for
the last two months was consolidated into TUF’s
books for that year. The average exchange rate
for the year was at Bt30.63 / USD in comparison
with 31.53 / USD in 2010. Thai baht, on average,
appreciated against US dollar by 2.9%.
All products registered sales growth in dollar term
from a year ago. The items showed the highest
growth rates were namely canned sardine / mackerel
products (up 81%), followed by tuna products
(up 70%), salmon products (52%), products for the
domestic markets shrimp (42%), products for the
domestic market (up 28%), frozen shrimp (up 22%),
cephalopod (up 19%), pet food (up 10%), shrimp
feed (up 8%) and other canned seafood (up 2%).
Nevertheless, tuna products still accounted for
the biggest portion of our sales at 48%, followed
by shrimp at 19%, pet food at 6%, other canned
seafood at 5%, shrimp feed at 5%, salmon 5%,

THAI UNION FROZEN PRODUCTS PCL.
canned sardine/mackerel at 4% and frozen
cephalopod at 1% and products for the domestic
market at 7%. Compared with 2011, key growth
markets were Europe (up 190%), Middles East (up
71%), Asia ex-Japan (up 36%), Oceania (up 30%),
Japan (up 24%), South America (up 18%), Thai
domestic market (up 16%), USA (up 10%), Canada
(up 5%) while our sales to Africa were slightly lower
than a year ago. The US remained our largest
market, closely followed by Europe (32%), but its
share dropped from 46% in 2010 to 36%.
Gross Margin
Gross margin in 2011 was 16.6%, up from 13.3%
a year ago, thanks to the strong performances
of the existing business and full consolidation of
These key factors helped overcome the challenges
of consistently higher raw material prices, particularly
tuna. Protection from the high import tariff in the EU,
its strong brand leadership and the full integration
down its supply chain enabled MW Brands to deliver
very consistent results. In addition to encouraging
results across all Thailand-based subsidiaries, the
recovery of Thai shrimp export business was also
a driving factor behind this strong performance.
Thanks to customers’ understanding and cooperation,
we were able to shorten the term of our shrimp
export sales contracts. This mechanism practically
allowed us to adjust selling prices more frequently
back to more consistent levels. In the US, there
competition and high raw material prices exerted
On the bright side, the successful merger between
the Chicken of the Sea Frozen Foods and Empress
International continued to perform on the back
of strong domestic demand for imported shrimp.
partially affected by 1) shipments of some remaining
shrimp orders that were not priced in the higher raw
material prices and 2) the carried-forward accounting
impact (€ 2.8 million) due to inventory step-up as a result
of purchase price allocation required for MW Brands
sharply as expected, starting the second quarter
and thru the end of the year.
Selling and Administrative Expenses
Selling and administrative expenses increased by
45% or Bt2,770 million to Bt 8,882 million from Bt6,112
million in 2010. The primary reason for the hike was
consolidation of MW Brands into the group. However,
this item, especially in terms of percentage of sales
(9%), was actually similar to our estimate with no
surprise. Given MW Brands a brand-heavy business,
selling and promotion expenses were generally
expected range of 9.0 – 9.5%.
Other Incomes (Excluding Foreign Exchange
Gain/Loss)
In 2011, other incomes totaled Bt614 million, which
consisted of dividends, export subsidies, compensation
from accounts payable, interest income, claims to
raw material suppliers and sales of obsolete assets
and supplies and others.
FOREX Gain/Loss
In 2011, we reported a foreign exchange gain
of Bt305 million, down 62% from a gain of Bt807
million in 2010 as a result of a more stable Thai
baht in general. As a result, any contribution from
foreign exchange hedging was limited. Any gain
of Thai baht appreciation. On average, Thai baht
appreciated by 3.2% from a year ago. Forward
contract is one of the main tools that we used to
minimize any potential impact from the volatility of
Thai baht exchange rate. With the existing hedging
policy and currency trend, we normally do not
the coming year.
Financial Expenses (Including Interest Expenses,
Bank Charges & Others)
Financial expenses amounted to Bt2,272 million,
up 198% from Bt764 million a year ago. Interest
expenses alone were Bt2,063 million, compared
with Bt667 million a year ago, mainly due to the full
incurred in the last quarter of 2010 for acquiring
MW Brands. The average effective borrowing rate
for the year was 5.88%. Going forward, we expect
that the effective rate for 2012 to drop given lower
ANNUAL REPORT 2011
99

THAI UNION FROZEN PRODUCTS PCL.
Thai baht bond issuance and rate re-negotiation
of the euro-denominated acquisition loans (both
in the third quarter 2011) and declining interest
rate environment in Thailand.
Corporate Income Tax
Corporate income tax for the group in 2011 was
Bt192 million, falling by 69% or a decrease of
Bt437 million from Bt629 million in 2010. A lower
tax expense was essentially contributed by the
leveraged structure deployed for the MW Brands
acquisition and the recognition of one-off tax
credits upon closing down some France and
Thailand operating units which had cumulative
losses on their books. Currently, the majority of TUF
plants in Thailand enjoy income tax privileges from
the Board of Investment (BOI). Therefore, they are
generally subject to very low tax rates, as opposed
to our overseas subsidiaries, particularly those US
based operations which has to pay normal US tax
rates that are higher than Thai rates. The effective
tax rate for the group during the year dropped to
3.1% from 15.8% in 2010. The rate should return to
a higher level in 2012.
by 77% or Bt2,201 million, to Bt5,075 million from
Bt2,874 million a year ago due to earning
contribution from MW Brands and improved Thai
operations. Earnings per share surged to Bt5.30
from Bt3.20.
Assets
Total assets in 2011 were valued at Bt83,230 million,
representing an increase of Bt8,453 million from
Bt74,777 million in 2010, thanks to expanded working
capital needed for higher costs of production and
product selling prices. The assets were mainly
composed of:
1. Trade receivables (before allowance for
doubtful debts) were worth Bt11,345 million,
up 20% from Bt9,451 million in 2010 primarily
thanks to the full year consolidation of MW
Brands into the group and generally higher
100 ANNUAL REPORT 2011
selling prices led by high raw material prices.
The average age was within the normal range.
At the end of 2011, 96% of our accounts receivable
were either not yet due or less than 1 month
overdue while around 2% was overdue by
more than 1 year. The account receivables
turnover rate has been stable at 37 days,
consistent with the norm and our credit policy.
The allowance for doubtful debts was
approximately 2% of total accounts receivable.
The status is considered healthy and typical.
2. Year-end inventory (net) rose by 22% to
Bt 26,132 million from Bt21,346 million a year ago
mainly caused by the acquisition of MW Brands
and the high raw material costs. Normally,
there is an allowance of diminution in value of
the amount was Bt443 million. This amount is
usually composed of four parts: 1) an allowance
allowance made for raw materials (Bt112 million)
and; 3) an allowance made for ingredients
and packaging (Bt70 million); and others
(Bt10 million).
In respect of the inventory turnover rate, the
average number of days that stocks were kept
was 103 days, slightly lower than a year ago.
Nevertheless, we would continue to implement
plans to reduce the inventory level while not
hurting the service level to our customers going
forward. In our case, lower inventory level
would directly help reduce working capital
requirement. Therefore, the plan to achieve
leaner inventory should help reduce our debt
burden going forward.
3. Property, plant and equipment (net) valued
Bt15,655 million, an increase of 10% from
Bt14,190 million in 2010. New acquisitions
amounted to Bt3,365 million. The key reason for
the increase was to 1) expanding and
improving the existing plant capacity; 2)
expanding and improving the existing plant
facilities at Thai Union Manufacturing, MW
Brands, Songkla Canning and Thai Union
Feedmill; 3) building the new plant for U.S.
Pet Nutrition in Lyons, Georgia of the US.
Also, other new machinery was bought and
improvements were made to increase the

THAI UNION FROZEN PRODUCTS PCL.
Liabilities
Total liabilities in 2011 remained stable at Bt56,161
million, compared with Bt51,541 million a year ago.
Liabilities were essentially composed of bank overdrafts
and loans (Bt14,477 million), trade payables
(Bt7,919 million), deferred tax liabilities (Bt4,918
million) and debentures (Bt7,228 million), long-term
loans (Bt15,599 million), a convertible bond
(Bt 2,462 million) and others. Interest-bearing debts
amounted to Bt39,758 million, of which around
64% were considered long term while the rest
short term. Moreover, around 51% of these debts
were stated in Thai baht while 18% in US dollar
and 31% in EURO.
Shareholders’ Equity
The total number of registered capital was increased
to Bt1,000 million while issued and paid-up common
shares were 956,329,407 units, remaining unchanged
during the year. In 2011, we paid two times of
dividends amounting to Bt1,195 million (Bt1.25 per
share). This was originally intended for meeting a
covenant placed on the debts incurred for the
acquisition of MW Brands. Although we successfully
from those covenants since the third quarter,
we maintained those as internal policies for
position. If the operating performance of the
group continued to progress as planned on top
of these policies, we should be able to restore our
end of 2012. Then, we should also be able to revert
to our long term policy of paying at least 50% of
Cash Flows
were Bt5,462 million, up 59% to Bt3,436 million,
mainly due to the consolidation of MW Brands into
the group. The annual depreciation and amortization
expenses for the group amounted to Bt1,616 million.
Meanwhile, cash spent on investing activities
amounted to Bt3,178 million as planned. In addition
to the voluntary dividend cap, it was our intention
to limit our annual investment budget to around
position to the pre-acquisition period. During the
year, acquisitions of property, plant and equipment
were made in the parent company and most of
its local and overseas subsidiaries in order to add
more capacity to their existing facilities.
Bt26,890 million in the previous year (then mainly
maturing Thai baht bond and some acquisition
debts and a sharp increase in interest expenses.
During the year, a four-year Thai baht worth Bt3,200
million was repaid while a series of new Thai baht
bonds (3/5/10 year maturity) worth Bt6,750 million
were issued. Meanwhile, dividend payments
amounting to Bt1,195 million were made during
the year.
After taking into consideration of all these cash
a net decrease in cash and cash equivalent by
Bt135 million at the end of the year.
Subsequent event
of the shrimp processing plant while other production
plants, namely tuna, sardine / mackerel and
cephalopod, in the same area were all unaffected.
There were no heavy damages to the plant assets
and no casualty. The plant, facilities and inventories
were fully insured, even including any potential
impact from business interruption as a result of the
processing workers at Samut Sakhon plant to our
subsidiary’s processing facilities in Songkhla province
(Thai Union Seafood), in addition to other production
plants in the same area. These emergency measures
and future demand with no glitch.
The Samut Sakhon shrimp plant is one of the group’s
two main Thailand-based shrimp processing facilities
for export markets and generated sales worth
USD233 million in 2011, accounting for 7% of the
total consolidated sales of Thai Union Group. This
plant can process up to 120 metric tons of whole
ANNUAL REPORT 2011
101

THAI UNION FROZEN PRODUCTS PCL.
each year is typically a low-season period for the
shrimp processing business. Therefore, the utilization
rate of the plant’s capacity was estimated at only
customers, investors, shareholders and all staff in
that its production activities should return to normalcy
as soon as possible with no major permanent impact
on its business operations.
productivity management approach thru
automation, waste reduction, employee skill
enhancement, and machine downtime reduction
5. Increase the proportion of value-added products
through new product development
6. Expand sales to new markets
Future Prospect
We expect the group’s sales (in dollar term) to grow
around 16% in 2011, mainly thanks to continual
expansion in all business lines with tuna products
remaining as the key driver. However, growth should
be seen across all products categories. The US
should still be our largest market, but emerging
markets, namely the Middle East, Africa and Asia
(ex-Japan), are expected to post strong growth
from their small bases. We would ensure operating
margins in 2012 to be stable at levels seen in the
previous year. Financial cost should decrease as
more acquisition debts would be gradually prepaid.
Nevertheless, the effective tax rate should rebound
as we do not expect any more tax credit in 2012.
The new plant built by US Pet Nutrition is up and
running. The new capacity should be gradually
premium pet food market. MW Brands should
continue to improve as we expect more synergies
to be realized at its operational level.
Our main task in 2012 is to:
1. Optimize MW Brands operations through
realization of synergies in terms of cost savings,
cost savings on packaging and joint procurement
into higher value-added products
2. Penetrate niche segments of the US pet food
market thru U.S. Pet Nutrition and its new plant
3. Restructure labor force and implement automation
in Thailand-based operations in order to handle
the 40% hike in the minimum wage
102 ANNUAL REPORT 2011
actively
Food safety and sustainability continue to be very,
or potentially the most, critical factors for food
exporting business going forward. They can serve
as an advantage as well as a disadvantage (in form
of trade barriers) to any food company. Given our
frequent factory audits by customers from most
food safety-stringent markets, we are reassured
that our high standards and track record will work
to our advantage. Besides, our management also
takes note of consumers and investors’ growing
awareness of the impact of each business on
the environment in terms of preservation and
sustainability. That intention led to our involvement
in co-founding the International Seafood Sustainability
research and promote preservation of tuna resources.
hatchery, shrimp feed mill, partner farms and
Council (ACC) is another proof of this intention.
In addition to proper execution of our focused
strategy and our staff’s determination to success,
we believe the likelihood of meeting our goal this year
will also be subject to the following critical factors:
As 90% of the group’s
revenues are in foreign currencies, any extreme
a portion of our Thai plants’ expenses are in
Thai baht. In 2011, around 80% of our group
(consolidated) operating expenses were in
foreign currencies. As a dollar earner, we normally
to our non-speculative and timely currency
hedging policy, we have been successful in
riding out most of the foreign exchange rate

THAI UNION FROZEN PRODUCTS PCL.
gains in the past few years as a proof.
Raw material price. The average skipjack tuna
raw material price for WPO in 2011 was USD
1,766 / metric ton, which was 37% higher than
a year ago (USD1,287 / metric ton). The key
factors driving up prices were poorer catching
(normally caused by extreme and unseasonal
regulations. There is indeed no immediate
concern for any long term shortage of skipjack
such as survey reports from International Seafood
Sustainability Foundation. Chicken of the Sea
International and TUF are founding members
the species primarily used for packing canned
tuna. Skipjack tuna packed in a can is commonly
called “light tuna” in the US.
Tuna raw material price was high in 2010. The year
started with prices at around USD1,500 and stayed
stable through April. Then prices continued to
surge to hit a new high at USD2,000 in September.
After some brief stability, it went further up to USD
2,000 in December setting a new record. As a
matter of fact, it set a new record (USD2,030)
again in January, 2012. The price is now stabilizing
at slightly below USD2,000. The raw material price
volatility from time to time could exert some pressure
on margins as price adjustments might not be as
timely as we wish, but we can generally achieve
that over a longer period of time. 2011 was another
year on record to demonstrate our ability to sustain
our margins despite raw material price volatility.
Our long term track record shows that non-speculative
purchase, careful inventory management of raw
materials and timely adjustment of the selling price
has helped us ride out most of the potential impact
from such volatility. Our selling prices are normally
set on (raw material) cost-plus (processing fees)basis.
Interest rates. The direction of the world interest
was mixed, but Thai rates were generally heading
quarter in 2011. With the majority of our long
term debts (64% of all interest bearing debts,
either by default or with use of hedging instruments,
we can be certain that any potentially negative
impact from interest rate volatility should be
minimal. The remaining 36% of the group’s
interest-bearing debts, which are mainly used
attention in the year to come.
Most of these factors are beyond our control, but
close monitoring and punctual adjustments will allow
us to minimize risk exposure or take advantage of
any opportunities that might arise.
We uphold corporate governance, transparency
and professional management, in light of corporate
social responsibility (CSR), as our long time guiding
principles. We treat shareholders, whether major or
minority, in the fairest and most responsible manner
by committing to full and timely information disclosure
and returning cash in form of dividend to them
commitments has been consistently proved in
numerous awards which we received over the
years. Furthermore, consistent coverage by analysts
from world and local leading investment banks
investment managers are just some of the proofs
of our long term commitment to good corporate
governance. Moreover, as countries around the
world are becoming more integrated and dependent
on each other, awareness and care for the
sustainability of each company’s business practices
in respect to the environment and the society
become consumers’ interests. Our management
has been taking proactive measures to ensure
that our business practices are sustainable through
for the business under the group.
Our long time dividend policy is to pay at least 50%
management and ability to adapt to changing
business environments, we have managed to report
payments since our listing in the Stock Exchange of
discipline, we limit our annual capital expenditure
to not more than Bt3 billion and the annual dividend
Debt / EBITDA ratio drops to a satisfactory level
(say 1:1). Based on our expectation, this new
policy should stay for next 2 years.
ANNUAL REPORT 2011
103

THAI UNION FROZEN PRODUCTS PCL.
Statement of the Board of Director’s
Responsibilities for the
FINANCIAL
STATEMENTS
As the Company is a listed company on the
Stock Exchange of Thailand, the Board of
Directors hereby expresses its responsibility for
on accounting principles which require accurate,
complete, and adequate recording of accounting
and attention have been taken in the reporting
comply with the generally accepted accounting
standards. We also wish to assure that adequate
disclosure of all pertinent material data has
accordance with the updated Accounting
Independent auditors have unconditionally
statements in the Report of Independent Auditors.
(Mr. Kraisorn Chansiri)
(Mr. Thiraphong Chansiri)
104 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
REPORT OF INDEPENDENT
AUDITOR
TO THE SHAREHOLDERS OF THAI UNION FROZEN PRODUCTS PUBLIC COMPANY LIMITED
Public Company Limited and its subsidiaries as at 31 December 2011, the related consolidated statements
as to their correctness and the completeness of the presentation. My responsibility is to express an opinion
subsidiaries, Thai Union International, Inc. and its subsidiaries and PT Juifa International Foods and
31 December 2011, these subsidiaries had total assets of Baht 15,617 million, and total revenues for the year
auditors whose reports have been furnished to me, and my opinion, in so far as it relates to the amounts
auditors.
I conducted my audit in accordance with generally accepted auditing standards. Those standards
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
Public Company Limited and its subsidiaries and of Thai Union Frozen Products Public Company Limited as
with generally accepted accounting principles.
for the year ended 31 December 2010 were audited in accordance with generally accepted auditing
Without qualifying my opinion on the aforementioned
current year, the Company adopted a number of
revised and new accounting standards as issued
by the Federation of Accounting Professions, and
applied them in the preparation and presentation
Sophon Permsirivallop

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Statements of financial position
As at 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
Assets
Current assets
Cash and cash equivalents 8 902,520,399 1,037,296,710 55,908,174 14,912,270
Trade and other receivables 9, 10 11,160,791,416 9,261,819,663 4,088,187,150 3,066,632,071
Short-term loans to subsidiaries 10 - - 80,000,000 625,824,650
Current portion of long-term loans to subsidiaries 10 - - 440,335,000 2,691,738,000
Current portion of long-term loans to other companies 4,070,571 1,430,750 - -
Inventories 11 26,131,954,501 21,346,117,741 3,618,231,368 2,423,325,643
Other current assets
Prepaid income tax 106,600,895 286,323,491 28,162,734 28,162,734
Current portion of forward exchange contracts receivables 142,731,953 748,337,711 140,443,542 558,700,840
Value added tax refundable 664,015,221 538,929,720 42,214,924 60,726,120
Others 817,680,910 739,834,454 34,631,753 51,494,323
Total other current assets 1,731,028,979 2,313,425,376 245,452,953 699,084,017
Total current assets 39,930,365,866 33,960,090,240 8,528,114,645 9,521,516,651
Non-current assets
Restricted deposits with financial institution 12 12,024,282 11,031,720 - -
Investments in subsidiaries 13 - - 4,566,571,387 4,396,708,852
Investments in associates 14 923,968,413 837,717,064 66,231,008 66,231,008
Other long-term investments 15 70,305,372 72,669,275 34,579,160 34,579,160
Long-term loans to subsidiaries - net of current portion 10 - - 17,007,904,981 15,429,105,300
Long-term loans to other companies - net of
current portion 24,557,502 28,630,292 - -
Property, plant and equipment 16 15,654,960,315 14,190,173,390 3,204,693,088 3,004,741,748
Goodwill 11,674,495,827 11,396,141,526 - -
Intangible assets 17 13,349,544,156 13,027,293,393 1,675,667 1,508,855
Other non-current assets
Forward exchange contracts receivables
- net of current portion 76,264,500 387,308,300 76,264,500 387,308,300
Leasehold rights 175,671,012 21,094,331 - -
Advance payment for purchase property, plant and equipment 8,251,306 35,227,356 - -
Deferred tax assets 24 1,062,569,162 498,561,829 35,156,604 18,609,334
Unamortized discount from forward exchange contracts 185,529,121 246,928,814 185,529,121 246,928,815
Others 81,058,709 64,055,054 16,195,821 10,773,125
Total non-current assets 43,299,199,677 40,816,832,344 25,194,801,337 23,596,494,497
Total assets 83,229,565,543 74,776,922,584 33,722,915,982 33,118,011,148
The accompanying notes are an integral part of the financial statements.
106 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Statements of financial position (continued)
As at 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
Liabilities and shareholders' equity
Current liabilities
Bank overdrafts and short-term loans from
financial institutions 19 14,477,174,817 8,363,776,804 3,553,985,552 1,992,669,842
Trade and other payables 10, 18 7,919,074,759 7,194,757,157 1,372,242,118 1,297,504,736
Short-term loans from subsidiaries 10 - - - 245,840,000
Current portion of long-term loans 20 983,548,345 516,057,950 - -
Current portion of debentures 21 - 3,200,000,000 - 3,200,000,000
Income tax payable 202,584,061 187,665,033 36,862,821 25,084,196
Other current liabilities 1,559,477,746 1,479,031,528 343,641,837 265,745,009
Total current liabilities 25,141,859,728 20,941,288,472 5,306,732,328 7,026,843,783
Non-current liabilities
Long-term loans - net of current portion 20 14,615,040,023 22,500,817,529 2,250,000,000 8,896,807,865
Debentures - net of current portion 21 7,228,325,702 500,000,000 7,228,325,702 500,000,000
Convertible bond 22 2,462,169,097 2,390,745,712 2,462,169,097 2,390,745,712
Provision for long-term employee benefits 23 992,478,495 - 190,432,553 -
Deferred tax liabilities 24 4,918,293,992 4,641,052,228 626,052 -
Forward exchange contracts payable - net of
current portion 411,350,702 88,683,600 362,851,125 88,683,600
Other non-current liabilities 391,011,166 478,800,280 88,236,570 47,267,248
Total non-current liabilities 31,018,669,177 30,600,099,349 12,582,641,099 11,923,504,425
Total liabilities 56,160,528,905 51,541,387,821 17,889,373,427 18,950,348,208
Shareholders' equity
Share capital 25
Registered
1,000,000,000 ordinary shares of Baht 1 each 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000
Issued and paid-up
956,329,407 ordinary shares of Baht 1 each 956,329,407 956,329,407 956,329,407 956,329,407
Share premium 8,158,890,230 8,158,890,230 8,158,890,230 8,158,890,230
Retained earnings
Appropriated - statutory reserve 26 100,000,000 89,000,000 100,000,000 89,000,000
Unappropriated 15,207,087,354 11,850,241,901 6,618,322,918 4,963,443,303
Other components of shareholders' equity (4,663,470) (87,474,610) - -
Equity attributable to owners of the Company 24,417,643,521 20,966,986,928 15,833,542,555 14,167,662,940
Non-controlling interests of the subsidiaries 2,651,393,117 2,268,547,835 - -
Total shareholders' equity 27,069,036,638 23,235,534,763 15,833,542,555 14,167,662,940
Total liabilities and shareholders' equity 83,229,565,543 74,776,922,584 33,722,915,982 33,118,011,148
- - - -
The accompanying notes are an integral part of the financial statements.
ANNUAL REPORT 2011
107

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Income statements
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
Revenues
Sales 10 98,670,377,747 71,507,401,428 23,725,730,352 21,183,980,131
Other income
Dividend income 828,755 351,530 1,214,008,607 1,218,830,079
Interest income 9,813,442 5,458,483 1,049,605,168 437,024,383
Exchange gains 304,755,850 806,951,116 47,608,703 356,087,169
Others 603,149,130 489,528,362 203,671,429 197,178,319
Total other income 918,547,177 1,302,289,491 2,514,893,907 2,209,119,950
Total revenues 99,588,924,924 72,809,690,919 26,240,624,259 23,393,100,081
Expenses
Cost of sales 82,301,395,646 61,976,442,881 20,907,255,927 19,586,410,643
Selling expenses 4,943,658,813 3,887,944,873 793,262,577 933,906,512
Administrative expenses 3,938,537,211 2,224,376,582 731,729,179 502,777,272
Total expenses 91,183,591,670 68,088,764,336 22,432,247,683 21,023,094,427
Profit before share of profit from investments
in associates, finance cost and corporate income tax 8,405,333,254 4,720,926,583 3,808,376,576 2,370,005,654
Share of profit from investments in associates 83,729,560 23,521,321 - -
Profit before finance cost and corporate income tax 8,489,062,814 4,744,447,904 3,808,376,576 2,370,005,654
Finance cost (2,272,152,444) (763,644,302) (675,156,144) (341,496,134)
Profit before corporate income tax 6,216,910,370 3,980,803,602 3,133,220,432 2,028,509,520
Corporate income tax 24 (192,158,813) (628,569,170) (110,110,413) (77,560,909)
Profit for the year 6,024,751,557 3,352,234,432 3,023,110,019 1,950,948,611
Profit attributable to:
Equity holders of the Company 5,074,540,384 2,873,694,317 3,023,110,019 1,950,948,611
Non-controlling interests of the subsidiaries 950,211,173 478,540,115
6,024,751,557 3,352,234,432
Earnings per share 29
Basic earnings per share
Profit attributable to equity holders of the Company 5.30 3.20 3.16 2.17
Diluted earnings per share
Profit attributable to equity holders of the Company 5.17 3.19 3.11 2.17
The accompanying notes are an integral part of the financial statements.
108 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Statements of comprehensive income
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Profit for the year 6,024,751,557 3,352,234,432 3,023,110,019 1,950,948,611
Other comprehensive income:
Exchange differences on translation of
financial statements in foreign currency 80,905,135 51,778,081 - -
Gain on change in value of available-for-sale investments 1,168,445 1,249,855 - 498,600
Loss on change in the value of pension fund (28,937,425) (14,102,896) - -
Increase (decrease) in other reserves (5,471,986) 5,940,220 - -
Other comprehensive income for the year 47,664,169 44,865,260 - 498,600
Total comprehensive income for the year 6,072,415,726 3,397,099,692 3,023,110,019 1,951,447,211
Total comprehensive income attributable to:
Equity holders of the Company 5,157,351,524 2,918,559,577 3,023,110,019 1,951,447,211
Non-controlling interests of the subsidiaries 915,064,202 478,540,115
6,072,415,726 3,397,099,692
The accompanying notes are an integral part of the financial statements.
ANNUAL REPORT 2011
109

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Statements of changes in shareholders' equity
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements
Equity attributable to owners of the Company
Other components of shareholders' equity
Other comprehensive income
Exchange
differences on Surplus (deficit)
translation of on changes Provision for Total other Total equity Equity attributable
Issued and financial in value of changes in components of attributable to to non-controlling Total
fully paid-up Retained earnings statements in available-for-sale the value of Other shareholders' owners of interests of shareholders'
share capital Share premium Appropriated Unappropriated foreign currency investments pension fund reserves equity the Company the subsidiaries equity
Balance as at 31 December 2009 883,170,950 4,518,796,858 89,000,000 10,972,493,287 (99,416,505) (19,362,247) (13,561,118) - (132,339,870) 16,331,121,225 2,079,643,560 18,410,764,785
Dividend paid (Note 33) - - - (1,995,945,703)
- - - - - (1,995,945,703) (500,316,794) (2,496,262,497)
Total comprehensive income for the year - - - 2,873,694,317 51,778,081 1,249,855 (14,102,896) 5,940,220 44,865,260 2,918,559,577 478,540,115 3,397,099,692
Issued ordinary share capital (Note 25) 73,158,457 3,640,093,372 - - - - - - - 3,713,251,829 122,500,000 3,835,751,829
Increase in non-controlling interests
of the subsidiaries - - - - - - - - - - 88,180,954 88,180,954
Balance as at 31 December 2010 956,329,407 8,158,890,230 89,000,000 11,850,241,901 (47,638,424) (18,112,392) (27,664,014) 5,940,220 (87,474,610) 20,966,986,928 2,268,547,835 23,235,534,763
Balance as at 31 December 2010 956,329,407 8,158,890,230 89,000,000 11,850,241,901 (47,638,424) (18,112,392) (27,664,014) 5,940,220 (87,474,610) 20,966,986,928 986 928 2,268,547,835 23,235,534,763
Cumulative effect of change in accounting
policy for employee benefits (Note 5) - - - (511,329,935)
- - - - - (511,329,935) (60,093,550) (571,423,485)
Dividend paid (Note 33) - - - (1,195,364,996)
- - - - - (1,195,364,996) (455,841,067) (1,651,206,063)
Total comprehensive income for the year - - - 5,074,540,384 116,052,106 1,168,445 (28,937,425) (5,471,986) 82,811,140 5,157,351,524 915,064,202 6,072,415,726
Unappropriated retained earnings transferred
to statutory reserve (Note 26) - - 11,000,000 (11,000,000) - - - - - - - -
Decrease in non-controlling interests of
the subsidiaries - - - - - - - - - - (16,284,303) (16,284,303)
Balance as at 31 December 2011 956,329,407 8,158,890,230 100,000,000 15,207,087,354 68,413,682 (16,943,947) (56,601,439) 468,234
(4,663,470) 24,417,643,521 2,651,393,117 27,069,036,638
The accompanying notes are an integral part of the financial statements.
110 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Statements of changes in shareholders' equity
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Separate financial statements
Other components of
shareholders' equity
Other comprehensive
income
Surplus (deficit) on Total other
Issued and changes in value of components of Total
fully paid-up Retained earnings
available-for-sale shareholders' shareholders'
share capital Share premium Appropriated Unappropriated investments equity equity
Balance as at 31 December 2009 883,170,950 4,518,796,858 89,000,000 5,008,440,395 (498,600) (498,600) 10,498,909,603
Dividend paid (Note 33) - - - (1,995,945,703)
- - (1,995,945,703)
Total comprehensive income for the year - - - 1,950,948,611
498,600 498,600 1,951,447,211
Issued ordinary share capital (Note 25) 73,158,457 3,640,093,372 - - - - 3,713,251,829
Balance as at 31 December 2010 956,329,407 8,158,890,230 89,000,000 4,963,443,303 - - 14,167,662,940
Balance as at 31 December 2010 956,329,407 8,158,890,230 89,000,000 4,963,443,303 - - 14,167,662,940
Cumulative effect of change in accounting policy
for employee benefits (Note 5) - - - (161,865,408)
- - (161,865,408)
Dividend paid (Note 33) - - - (1,195,364,996)
- - (1,195,364,996)
Total comprehensive income for the year - - - 3,023,110,019
- - 3,023,110,019
Unappropriated retained earnings transferred to
statutory reserve (Note 26) - - 11,000,000 (11,000,000) - - -
Balance as at 31 December 2011 956,329,407 8,158,890,230 100,000,000 6,618,322,918 - - 15,833,542,555
The accompanying notes are an integral part of the financial statements.
ANNUAL REPORT 2011
111

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Cash flows statements
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements Separate financial statements
2011 2010 2011 2010
Cash flows from operating activities
Profit before tax 6,216,910,370 3,980,803,602 3,133,220,432 2,028,509,520
Adjustments to reconcile profit before tax to net cash provided by
(paid from) operating activities:
Depreciation and amortisation 1,616,173,839 1,218,951,112 273,012,582 321,396,732
Amortisation of premium/discount from forward foreign
exchange contracts 63,014,522 (20,092,691) 63,413,780 (16,151,035)
Amortisation of issue cost of convertible bond, debentures
and long-term loans from financial institutions 163,988,942 24,622,866 111,307,543 6,519,270
Allowance for doubtful accounts (reversal) 14,684,702 28,431,144 22,572,912 (5,553,031)
Decrease of inventory to net realisable value 84,431,465 60,876,793 34,941,812 5,151,959
Allowance for loss on impairment of assets 17,938,239 - 29,772,627 -
Allowance for loss on impairment of goodwill 16,743,910 - - -
Reverse of allowance for loss on impairment of other long-term
investments - (9,677,789) - -
Share of profit from investments in associates (83,729,560) (23,521,321) - -
Loss on sale of investments 1,401,327 1,672,850 - 459,050
Provision for long-term employee benefits 146,852,225 - 24,739,652 -
Gain on dissolution of subsidiaries (1,113) - - -
Loss (gain) on sale / write-off of property, plant and equipment
and other intangible assets 30,275,050 4,705,935 5,076,340 (467,262)
Loss on write-off of leasehold right 1,504,070 1,231,079 - -
Unrealised exchange loss (gain) 812,917,376 (193,805,314) 611,414,570 (74,126,280)
Dividend income (828,755) (351,530) (1,214,008,607) (1,218,830,079)
Interest income (9,813,442) (5,472,882) (1,049,605,168) (437,024,383)
Interest expense 2,063,502,112 675,995,934 558,153,628 329,299,896
Profit from operating activities before change in operating
assets and liabilities 11,155,965,279 5,744,369,788 2,604,012,103 939,184,357
Decrease (increase) in operating assets
Trade and other receivables (1,617,843,008) (545,450,821) (950,398,721) (148,078,403)
Inventories (4,301,590,313) (603,777,734) (1,228,040,546) 1,475,559,827
Other current assets (225,389,433) 193,796,342 32,891,163 6,171,700
Other non-current assets 10,984,622 (78,651,292) (16,194,681) (4,264,187)
Increase (decrease) in operating liabilities
Trade and other payables 653,779,147 (146,678,004) 111,324,157 (273,636,674)
Other current liabilities (1,828,977) (463,083,360) 15,797,820 12,772,392
Other non-current liabilities 115,970,729 (45,232,836) 49,125,531 (19,668,925)
Cash flows from operating activities 5,790,048,046 4,055,292,083 618,516,826 1,988,040,087
Cash paid for corporate income tax (328,043,131) (618,967,962) (107,022,356) (53,747,447)
Net cash from operating activities 5,462,004,915 3,436,324,121 511,494,470 1,934,292,640
The accompanying notes are an integral part of the financial statements.
112 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Cash flows statements (continued)
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements Separate financial statements
2011 2010 2011 2010
Cash flows from investing activities
Increase in restricted deposits with financial institutions (735,191) (67,050) - -
Acquisitions of property, plant and equipment (3,364,840,178) (2,727,955,535) (556,106,161) (849,726,010)
Acquisitions of intangible assets (37,306,973) (10,529,932) (640,038) (982,829)
Acquisitions of leasehold rights (2,365,337) (5,210,703) - -
Decrease in short-term loans to subsidiaries - - 545,824,650 880,900,360
Decrease (increase) in long-term loans to subsidiaries - - 1,119,297,720 (14,241,728,600)
Decrease (increase) in long-term loans to other companies 1,304,154 (18,467,276) - -
Cash paid to purchase of investments in subsidiaries (Note 2.2) - (28,371,146,505) - -
Increase in investments in subsidiaries - - (169,862,535) (1,052,755,665)
Increase in investments in associates (44,548,168) (35,688,000) - -
Decrease (increase) in other long-term investments (1,040,989) - - 4,565,950
Dissolution of subsidiaries (174,911) - - -
Interest received 9,802,775 4,433,406 1,040,025,013 300,032,832
Dividend received 35,828,755 11,851,530 1,214,008,607 1,218,830,079
Proceeds from sale of investments 3,154,823 23,638,101 - -
Proceeds from sales of property, plant and equipment
and intangible assets 222,988,668 369,573,119 1,262,886 19,705,711
Net cash from (used in) investing activities (3,177,932,572) (30,759,568,845) 3,193,810,142 (13,721,158,172)
Cash flows from financing activities
Increase in bank overdrafts and short-term loans
from financial institutions 5,838,799,223 3,096,225,965 1,561,315,710 1,109,682,138
Decrease in short-term loans from subsidiaries - - (245,840,000) (732,770,000)
Increase (decrease) in long-term loans from financial institutions (7,964,450,950) 22,989,777,010 (6,750,000,000) 9,000,000,000
Increase (decrease) in debentures 3,550,000,000 (1,500,000,000) 3,550,000,000 (1,500,000,000)
Cash paid for interest expense (2,059,765,423) (589,445,249) (560,455,101) (258,781,706)
Cash paid for unamortized front end and deferred
debentures fees (23,964,321) (887,504,570) (23,964,321) (133,749,693)
Increase in convertible bond - 2,502,060,000 - 2,502,060,000
Proceeds from issued additional share capital - 3,713,251,829 - 3,713,251,829
Decrease in non-controlling interests of the subsidiaries (511,958,582) (438,633,033) - -
Dividend paid (1,195,364,996) (1,995,945,703) (1,195,364,996) (1,995,945,703)
Net cash from (used in) financing activities (2,366,705,049) 26,889,786,249 (3,664,308,708) 11,703,746,865
Increase (decrease) in translation adjustment (52,143,605) 742,380,572 - -
Net increase (decrease) in cash and cash equivalents (134,776,311) 308,922,097 40,995,904 (83,118,667)
Cash and cash equivalents at beginning of year 1,037,296,710 728,374,613 14,912,270 98,030,937
Cash and cash equivalents at end of year (Note 8) 902,520,399 1,037,296,710 55,908,174 14,912,270
The accompanying notes are an integral part of the financial statements.
ANNUAL REPORT 2011
113

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Cash flows statements (continued)
For the years ended 31 December 2011 and 2010
(Unit: Baht)
Consolidated financial statements Separate financial statements
2011 2010 2011 2010
Supplement cash flows information
Non-cash items:
Undue installment of acquisition of property, plant
and equipment 95,370,986 180,495,494 24,143,691 70,611,788
Unrealised gain on changes in the value of investments (1,168,445) (751,255) - -
Transfer of properties foreclosed to property, plant
and equipment 57,056,539 - 57,056,539 -
Transfer of property, plant and equipment to
other current assets 3,371,006 - - -
Transfer of property, plant and equipment
to leasehold rights 152,767,975 - - -
An adjustment provision for long-term employee
benefits to the beginning balance of retained earnings 511,329,935 - 161,865,408 -
The accompanying notes are an integral part of the financial statements.
114 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Thai Union Frozen Products Public Company Limited and its subsidiaries
Notes to consolidated financial statements
For the years ended 31December 2011 and 2010
1. General information
1.1 Corporate information
Thai Union Frozen Products Public Company Limited (“the Company”) is a public
company incorporated and domiciled in Thailand.
The Company operates its business in Thailand and its subsidiaries operate their
businesses in Thailand and overseas. Their principal activities in Thailand are the
manufacture and export of frozen and canned seafood, and local subsidiaries are also
engaged in the packaging and printing, pet food businesses and fishery.
The principal activities of the overseas subsidiaries such as the subsidiaries in United
States are the manufacture and distribution of canned seafood, and the import of
shrimp and other frozen seafood products for sale to restaurant chains, retailing,
wholesaling and food processing, the subsidiaries in Europe are the manufacturer and
distributor of ambient seafood products to countries in Europe under their trademarks,
and two subsidiaries in Asia, principally located in Indonesia and Vietnam are the
manufacturer and distributor of seafood.
The Company’s registered address is 72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai,
Amphoe Muangsamutsakorn, Samutsakorn. The Company has 5 branches in Bangkok
and Samutsakorn.
1.2 Acquisition of PPC’s shares
The Board of Directors’ Meeting held on 21 December 2011 of the Company has
approved a resolution for the Company to make a voluntary tender offer for all shares
of Pakfood Public Company Limited (PPC or Pakfood). The details of this transaction
are as follows.
ANNUAL REPORT 2011
115

THAI UNION FROZEN PRODUCTS PCL.
On 21 December 2011, the Company and a group of existing shareholders of
Pakfood have entered into the Share Sale and Purchase Agreement (SPA) of PPC.
The Company, pursuant to Thai applicable laws, is required to make a voluntary
tender offer for all shares in PPC. The acquisition will be executed when all conditions
precedent stated in the SPA are fully satisfied. The transaction is expected to take
place in second quarter of 2012.
The Company will purchase Pakfood’s common in a voluntary tender offer process
with conditions that the aggregate number of shares acquired in the tender offer shall
not be less than 40% of total issued and paid-up shares of Pakfood. The offer price
per share is equal to the net book value per share of the audited Pakfood’s
consolidated financial statements for the year ended 31 December 2011. The
Company will pay fully in cash.
Pakfood is a listed company in the Stock Exchange of Thailand. Pakfood and its
subsidiaries operate as a manufacturer and distributor of food products, semi-finished
food products, ready to eat meal, both chilled and frozen, domestically and
internationally.
The Company will purchase Pakfood’s shares if conditions precedent including but
not limited to the following conditions are satisfied.
1. The purchase price per share shall be based on the net book value per share
of Pakfood pursuant of the audited financial statement of Pakfood as of
31 December 2011.
2. The meetings of the board of directors and/or the shareholders of Pakfood
shall have been duly convened and approve all matters as required under
transaction documents.
3. Legal, customs, tax and financial due diligence of Pakfood shall be completed
at satisfaction of the Company.
4. Documentation in relation to waivers of event of defaults and consents by
lenders to Pakfood shall be signed in a form satisfactory to the Company.
This investment will strengthen frozen food and ready to eat meal sectors especially
in terms of export.
The source of fund is from cash flow from the operation of the Company.
2. Basis of preparation
2.1 The financial statements have been prepared in accordance with accounting standards
enunciated under the Accounting Profession Act B.E. 2547, except for the early
adoption of TAS No. 12 “Income Taxes”.
116 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
The presentation of the financial statements has been made in compliance with the
stipulations of the Notification of the Department of Business Development dated
28 September 2011, issued under the Accounting Act B.E. 2543.
The financial statements in Thai language are the official statutory financial statements
of the Company. The financial statements in English language have been translated
from the Thai language financial statements.
The financial statements have been prepared on a historical cost basis except where
otherwise disclosed in the accounting policies.
2.2 Basis of consolidation
a) The consolidated financial statements include the financial statements of Thai
Union Frozen Products Public Company Limited (“the Company”) and the following
subsidiary companies (“the subsidiaries”):
Country of Percentage of
company’s name Nature of business incorporation shareholding
2011 2010
Held by the Company
Percent
Percent
Thai Union Manufacturing Co., Ltd. Manufacturer & exporter of Thailand
canned tuna and pet food
Songkla Canning Pcl. Manufacturer & exporter of Thailand
canned seafood
Thai Union Seafood Co., Ltd. Manufacturer & exporter of Thailand
frozen shrimp
T-Holding Co., Ltd. Distributor Thailand
Thai Union Feedmill Co., Ltd. Manufacturer & distributor of Thailand
animal feeds
Thai Union Graphic Co., Ltd. Printing manufacturer Thailand
Thai Union International, Inc. (TUI) Holding company USA
PT Juifa International Foods Manufacturer & distributor of Indonesia 88.78 76.50
canned tuna and seafood
Thai Union Investment Holding Holding company Mauritius 100.00 100.00
Co., Ltd. (TUIH)
Held by subsidiaries
Tri-Union Seafoods, LLC Manufacturer & USA 100.00 100.00
(100% held by TUI) distributor of canned
tuna and seafood
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
Country of Percentage of
Company’s name Nature of business incorporation shareholding
2011 2010
Percent Percent
Tri-Union Samoa Packing Corporation Liquidated USA - 100.00
(100% held by Tri-Union
Seafoods, LLC)
Tri-Union Frozen Products, Inc. (TUFP) Importer and distributor USA 82.00 82.00*
(82% held by TUI) of frozen seafood
Empress International, Ltd. (Empress) Importer and distributor of USA - -*
(100% held by TUI) frozen shrimp and other
seafood
Tri-Union Frozen Foods, LLC Importer and distributor of USA - -*
(70% held by TUI) frozen seafood
US Pet Nutrition, LLC (USPN) Manufacturer & distributor USA 100.00 100.00
(99% held by TUI and 1% held by of premium pet food
Tri-Union Seafoods, LLC)
Empress International of California Ltd. Sales office USA - -*
(100% held by Empress)
Empress International Midwest Ltd. Sales office USA - -*
(100% held by Empress)
Asian-Pacific Can Co., Ltd. Manufacturer & Thailand 81.85 81.85
(90.5% held by Songkla Canning distributor of packaging
Pcl.)
for food products
Yueh Chyang Canned Food Co., Ltd. Manufacturer & Vietnam 46.12 46.12
(51% held by Songkla distributor of canned
Canning Pcl.)
tuna and seafood
Thai Union Hatchery Co., Ltd. Shrimp breeding and rearing Thailand 51.00 51.00
(99.99% held by Thai Union
Feedmill Co., Ltd.)
Thai Quality Shrimp Co., Ltd. Shrimp breeding and species Thailand 48.45 48.45
(95% held by Thai Union Feedmill developer
Co., Ltd.)
Phuket Fishing Co., Ltd. Liquidated Thailand - 90.08
(100% held by Thai Union
Manufacturing Co., Ltd.)
118 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
Country of Percentage of
Company’s name Nature of business incorporation shareholding
2011 2010
Percent Percent
Samui Fishing Co., Ltd. Liquidated Thailand - 90.08
(100% held by Thai Union
Manufacturing Co., Ltd.)
Phang-nga Fishing Co., Ltd. Liquidated Thailand - 90.08
(100% held by Thai Union
Manufacturing Co., Ltd.)
Songkla Fishing Co., Ltd. Liquidated Thailand - 90.08
(100% held by Thai Union
Manufacturing Co., Ltd.)
Siam Fishing Pte. Ltd. General wholesale trade Singapore 90.08 90.08
(100% held by Thai Union (including importers
Manufacturing Co., Ltd.)
and exporters)
Mauritius Company Holding company Mauritius 100.00 100.00
(100% held by TUIH)
Thai Union EU Seafood 1 SA Holding company Luxembourg 100.00 100.00
(100% held by TUIH)
Thai Union EU Seafood 2 SA Holding company Luxembourg 100.00 100.00
(100% held by Thai Union
EU Seafood 1 SA)
Thai Union France Holding SAS Holding company France 100.00 100.00
(100% held by Thai Union
EU Seafood 2 SA)
MW Brands Holding SAS Liquidated France - 100.00
(100% held by Thai Union
France Holding SAS)
MW Brands SAS Headquarter activity France 100.00 100.00
(100% held by MW Brands Holding
SAS)
MW Brands Seychelles Limited Exporter of canned Tuna Seychelles 100.00 100.00
(100% held by MW Brands SAS)
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
Country of Percentage of
Company’s name Nature of business incorporation shareholding
2011 2010
Percent Percent
Etablissements Paul Paulet SAS Manufacturer, importer, France 100.00 100.00
(100% held by MW Brands SAS) distributor and exporter
of canned seafood
European Seafood Investment Portugal Manufacturer and exporter of Portugal 100.00 100.00
(74% held by MW Brands SAS and canned sardines and
26% held by Thai Union France mackerel
Holding SAS)
Pioneer Food Cannery Limited Manufacturer of canned tuna Ghana 100.00 100.00
(100% held by Etablissements Paul
Paulet SAS)
Mareblu SRL Importer and distributor of Italy 100.00 100.00
(74% held by MW Brands SAS and canned seafood
26% held by Thai Union France
Holding SAS)
UK Seafood Investments Limited Holding company United 100.00 100.00
(100% held by MW Brands SAS) Kingdom
Indian Ocean Tuna Limited Manufacturer and exporter of Seychelles 60.00 60.00
(60% held by Thai Union France canned tuna
Holding SAS)
John West Foods Limited Importer and distributor of United 100.00 100.00
(100% held by UK Seafood canned seafood Kingdom
Investments Limited)
Irish Seafood Investments Limited Importer and distributor of Ireland 100.00 100.00
(100% held by MW Brands SAS) canned seafood
John West Holland BV Importer and distributor of Netherland 100.00 100.00
(100% held by Irish Seafood canned seafood
Investments Limited)
TTV Limited Deep-sea fishing fleet Ghana 50.00 50.00
(50% held by Etablissements Paul operation
Paulet SAS)
120 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
* On 31 December 2010, Tri-Union Frozen Foods, LLC (TUFF) was merged with and into Empress International Ltd.
(Empress), a subsidiary of Thai Union International, Inc. The merger was accounted for as a combination of entities
under common control. The surviving entity was Empress and its name was changed to Tri-Union Frozen Products,
Inc. (TUFP). As at 31 December 2010, TUFP is 82% owned by TUI.
On 7 October 2011, Phuket Fishing Co., Ltd., Samui Fishing Co., Ltd., Phang-nga
Fishing Co., Ltd. and Songkla Fishing Co., Ltd., subsidiaries of Thai Union
Manufacturing Co., Ltd. were registered to close the operation and completed the
liquidation in November 2011.
During 2010, the overseas subsidiary established US Pet Nutrition LLC, (USPN) in the
USA to engage in the manufacture and distribution of pet food.
On 5 October 2010, the overseas subsidiary sold its production facility on the America
Samoa Island, including all equipment and machineries that remained at the facility,
to a third party. Tri-Union Samoa Packing Corporation was liquidated effective
31 December 2010. MW Brands Holding SAS was liquidated effective 31 January 2011.
During 2010, the Company invested in 100% ordinary shares of Thai Union Investment
Holding Co., Ltd., a company registered in the Republic of Mauritius, to acquire MW Brands
Holdings SAS in France. The consolidated financial statements include the statement
of financial position of that company as at 31 December 2010 and the profit or loss for
the period from the investment date to 31 December 2010. Such company has
recorded the net assets acquired at their fair value as of the acquisition date. The
remaining excess of the purchase price over the fair value of the net assets acquired
has been recorded as goodwill. However, the Company has recorded some tangible
assets acquired at their net book value, not fair value. The Company is awaiting
tangible a third party appraisal in order to allocate the fair value associated with the
assets. During the second quarter of current year, the subsidiary obtained these
appraisals of the tangible assets from such third party. The appraisal value immaterially
differs from net book value. The Company therefore has not adjusted the value of
goodwill.During the third quarter of the current year, a subsidiary revised the
component approach of certain assets, resulting in an increase of their net book value
by EUR 0.86 million or Baht 36 million. This adjustment has been reduced in the
goodwill from the acquisition of MW Brands and in accumulated depreciation in those
assets.
ANNUAL REPORT 2011
121

THAI UNION FROZEN PRODUCTS PCL.
Details of the fair values of identifiable assets, liabilities and contingent liabilities of MW Brands
and their net book values, are as follow:
(Unit: Million Baht)
Fair value Net book value
Assets
Cash and cash equivalents 643 643
Trade accounts receivable 3,311 3,311
Inventories 5,863 5,519
Property, plant and equipment, net 3,841 3,782
Intangible assets (Note 17) 12,944 172
Other assets 558 391
Total assets 27,160 13,818
Liabilities
Trade accounts payables 4,608 4,608
Deferred tax liabilities (Note 24) 4,162 -
Other liabilities 982 963
Total liabilities 9,752 5,571
Net asset value 17,408 8,247
Equity of the Company (%) 100
Net assets value attributable to the
company’s investment 17,408
Positive goodwill 11,606
Purchase price 29,014
Less: Cash and cash equivalents of
subsidiaries (643)
Net cash paid for purchase
of subsidiaries 28,371
Details of acquisition of MW Brands Group are as follows.
(Unit: Million Baht)
Purchase price
Cash paid 28,742
Direct costs related to the acquisition 272
Total 29,014
Fair value of net assets received 17,408
Goodwill 11,606
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THAI UNION FROZEN PRODUCTS PCL.
The largest fair value adjustments above relate to the recognition of the present value
of the portfolio of trademarks comprising Petit Navire, John West, Hyacinthe
Parmentier, Mareblu and Starkist. The values derived from the royalty approach have
been considered and they have also been corroborated by the profit premium
approach. The royalty approach consists in applying to the trademark revenues derived
from a royalty rate determined by a qualitative and quantitative analysis of the
positioning of the trademarks in the market. The profit premium approach is based on
the difference of EBIT per ton between trademark and private labels activities, which is
then applied on the projected trademark volumes to determine the present value of the
forecasted cash flows. The determined fair value of the trademarks amounts to
Baht12,334 million (EUR296 million), with related deferred tax liabilities of Baht3,917 million
(EUR94 million).
Relationship with distributors in France of Baht235 million (EUR6 million) and a free
license agreement of the Weight Watchers trademark of Baht210 million (EUR5 million).
The distributor relationship relates to the long term tracked record of the private label
activities in France and has been valuated using the excess earning methodology
which expresses the discounted excess of profitability over the post tax contributory
assets charges. This asset has a definite life of 20 years. The same approach has been
retained to evaluate the Weight Watchers free license agreement corroborated by a
relief from the royalty approach. A definite life of 39 years has been retained. Both
intangible assets have related deferred tax liabilities of Baht140 million (EUR3.4 million).
The Baht1 million amortisation of these two assets has been included in the consolidated
profit or loss for 2010.
The finished goods have also been subject to a fair value evaluation. This resulted in a
Baht344 million (EUR8 million) increased in inventories, with related deferred tax
liabilities of Baht105 million (EUR2.5 million). These inventories had 3 months selling
maturity therefore an amount of Baht156 million (EUR3.8 million), net of deferred tax,
has been released in the consolidated profit or loss for 2010.
The contingent liabilities have also been subject to a review bringing an additional EUR0.4 million
provision related to a withholding tax risk in Ghana. This provision has been released
offsetting the risk effect on the consolidated profit or loss for 2010.
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
The residual goodwill of EUR272 million represents MW Brands specific positioning in
the whole value chain thanks to its global tax rate which is lower than the tax rates
applied on the recognised items, the cost of the assembled workforce and future
synergies expected to arise in the combined life operations.
The operating loss of MW Brands Group (included TUIH) from the acquisition date to
31 December 2010 amounting to Baht7 million was included in the consolidated
financial statements. If the combination had taken place at the beginning of the year,
the operating results of MW Brands Group had been included in the consolidated
financial statements as though it had been the Company’s subsidiaries since 1 January 2010,
total revenues and profit in profit or loss for the year ended 31 December 2010 would
have been by Baht18,520 million (EUR458.4 million) and Baht818 million (EUR20.3
million), respectively.
b) Subsidiaries are fully consolidated, being the date on which the Company obtains
control, and continue to be consolidated until the date that such control ceases.
c) The financial statements of the subsidiaries are prepared using the same significant
accounting policies as the Company.
d) The assets and liabilities in the financial statements of overseas subsidiaries are
translated to Baht using the exchange rate prevailing on the end of reporting period,
and revenues and expenses translated using monthly average exchange rates. The
resulting differences are shown under the caption of “Exchange differences on
translation of financial statements in foreign currency” in the statements of changes
in shareholders’ equity.
e) Material balances and transactions between the Company and its subsidiaries have
been eliminated from the consolidated financial statements.
f) Non-controlling interests represent the portion of profit or loss and net assets of the
subsidiaries that are not held by the Group and are presented separately in the
consolidated profit or loss and within equity in the consolidated statement of
financial position.
2.3 The separate financial statements, which present investments in subsidiaries and
associates under the cost method, have been prepared solely for the benefit of the
public.
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THAI UNION FROZEN PRODUCTS PCL.
3. Adoption of new accounting standards during the year
During the current year, the Company adopted a number of revised and new
accounting standards, issued by the Federation of Accounting Professions, as listed
below.
Accounting standards:
TAS 1 (revised 2009)
TAS 2 (revised 2009)
TAS 7 (revised 2009)
TAS 8 (revised 2009)
TAS 10 (revised 2009)
TAS 11 (revised 2009)
TAS 16 (revised 2009)
TAS 17 (revised 2009)
TAS 18 (revised 2009)
TAS 19
TAS 23 (revised 2009)
TAS 24 (revised 2009)
TAS 26
TAS 27 (revised 2009)
TAS 28 (revised 2009)
TAS 29
TAS 31 (revised 2009)
TAS 33 (revised 2009)
TAS 34 (revised 2009)
TAS 36 (revised 2009)
TAS 37 (revised 2009)
TAS 38 (revised 2009)
TAS 40 (revised 2009)
Presentation of Financial Statements
Inventories
Statement of Cash Flows
Accounting Policies, Changes in Accounting Estimates
and Errors
Events after the Reporting Period
Construction Contracts
Property, Plant and Equipment
Leases
Revenue
Employee Benefits
Borrowing Costs
Related Party Disclosures
Accounting and Reporting by Retirement Benefit Plans
Consolidated and Separate Financial Statements
Investments in Associates
Financial Reporting in Hyperinflationary Economies
Interests in Joint Ventures
Earnings per Share
Interim Financial Reporting
Impairment of Assets
Provisions, Contingent Liabilities and Contingent Assets
Intangible Assets
Investment Property
Financial reporting standards:
TFRS 2
Share-Based Payment
TFRS 3 (revised 2009) Business Combinations
TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued
Operations
TFRS 6
Exploration for and Evaluation of Mineral Resources
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
Financial Reporting Standard Interpretations:
TFRIC 15
Agreements for the Construction of Real Estate
Accounting Standard Interpretations:
SIC 31
Revenue-Barter Transactions Involving Advertising Services
These accounting standards do not have any significant impact on the financial
statements, except for the following accounting standards.
TAS 19Employee Benefits
This accounting standard requires employee benefits to be recognised as expense in
the period in which the service is performed by the employee. In particular, an entity
has to evaluate and make a provision for post-employment benefits using actuarial
techniques. The Company and its subsidiaries previously accounted for such employee
benefits when they were incurred.
The Company and its subsidiaries have changed this accounting policy in the current
year and recognise the liability in the transition period through an adjustment to the
beginning balance of retained earnings in the current period. The change will have the
effect of decreasing the profit of the Company and its subsidiaries for the years ended
31 December 2011 by Baht147 million, or 0.15 Baht per share (Separate financial
statements: decreasing profit by Baht25 million, or 0.02 Baht per share). The
cumulative effect of the changes in the accounting policy has been presented in
Note 5 to financial statements.
4. New accounting standards issued during the years not yet effective
The Federation of Accounting Professions issued the following new/revised accounting
standards that are effective for fiscal years beginning on or after 1 January 2013.
Accounting standards:
TAS 12
Income Taxes
TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of
Government Assistance
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates
Accounting Standard Interpretations:
SIC 10 Government Assistance - No Specific Relation to Operating Activities
SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets
SIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders
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The Company’s management believes that these accounting standards will not have
any significant impact on the financial statements for the year when they are initially
applied, except for the following accounting standards.
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates
This accounting standard requires an entity to identify its functional currency in
accordance with certain conditions in the standard and to record transactions and
report its financial position and operating results in this functional currency, which may
not be Baht.
At present, the management is still evaluating the impact on the financial statements in
the year when this standard is adopted.
5. Cumulative effect of changes in accounting policies due to the adoption of
TAS 19
During the current year, the Company made the changes to its significant accounting
policies described in Note 3, as a result of the adoption of TAS 19 Employee Benefits.
The cumulative effect of the changes in the accounting policies has been separately
presented in the statements of changes in shareholders' equity.
The amounts of adjustments affecting the provision for long-term employee benefits
(net of deferred tax assets of Baht32 million) and unappropriated retained earnings in the
statement of financial position as at 1 January 2011 resulted decreased of Baht571 million
(Separate financial statements: Baht162 million (net of deferred tax assets of Baht7 million)),
excluding the provision that the overseas subsidiaries had already established.
6. Significant accounting policies
6.1 Revenue recognition
Sales of goods
Sales of goods are recognised when the significant risks and rewards of ownership of
the goods have passed to the buyer. Sales are the invoiced value of goods supplied,
excluding value added tax, of goods supplied after deducting discount and allowances.
Sales of merchandise by an overseas subsidiary under commercial agreements are
recognised when the subsidiary’s distributor sells such merchandise. The overseas
subsidiary may be reimbursed for bank charges, warehousing, and certain other costs
incurred in connection with these agreements, and the subsidiary records such
reimbursements as a deduction from cost of sales.
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Interest income
Interest income is recognised as interest accrues based on the effective rate method.
Dividends
Dividends are recognised when the right to receive the dividends is established.
Tax coupon received
Subsidies granted by the Ministry of Finance in the form of tax coupons are recognised
as income when the Company obtains written notification of approval of the tax coupon.
6.2 Cash and cash equivalents
Cash and cash equivalents included cash in hand and at banks, and all highly liquid
investments with an original maturity of three months or less and not subject to
withdrawal restrictions.
6.3 Trade accounts receivable
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful
accounts is provided for the estimated losses that may be incurred in collection of
receivables. The allowance is generally based on collection experiences and analysis
of debt aging.
6.4 Inventories
Finished goods and work in process are valued at the lower of standard cost (which
approximates actual cost) and net realisable value. Standard cost includes all
production costs and attributable factory overheads.
Raw materials are valued at cost (first-in, first-out method). Ingredients and packaging
are valued at cost (weighted average method).
Some local subsidiaries record ingredients and packaging using the first-in, first-out method.
The effect of the difference in accounting policy is immaterial to profit and the book values of
inventories in the consolidated financial statements as at 31 December 2011 and 2010.
6.5 Investments
a) Investments in available-for-sale securities are stated at fair value. Changes in the
fair value of these securities are recorded as a separate item in shareholders’
equity, and will be recorded in profit or loss when the securities are sold.
b) Investments in non-marketable equity securities, which the Company classifies as
other investment, are stated at cost net of allowance for loss on diminution in value
(if any).
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c) Investments in associates are accounted for in the consolidated financial statements
using the equity method.
d) Investments in subsidiaries and associates are accounted for in the separate
financial statements using the cost method.
The weighted average method is used for computation of the cost of investments.
6.6 Property, plant and equipment and Depreciation
Land is stated at cost. Land improvement, plant and equipment are stated at cost less
accumulated depreciation and allowance for impairment of assets (if any). Depreciation of
land improvement, plant and equipment is calculated by reference to their costs on the
straight-line basis over the following estimated useful lives:
Land improvement, buildings and construction - 3 - 40 years
Machinery and equipment - 3 - 25 years
Furniture and fixtures - 3 - 20 years
Motor vehicles - 3 - 20 years
Depreciation of machinery and equipment, furniture and fixtures and motor vehicles of
an overseas subsidiary is calculated on the declining balance basis over their estimated
useful lives of 5 - 20 years. The effect of the difference in accounting policy is
immaterial to profit or loss.
No depreciation is provided for land and construction in progress.
Equipment under a capital lease is stated at the present value of the minimum lease
payments and amortised on a straight-line method over the lesser of the lease term or
the estimated useful life of the equipment.
Depreciation is included in determining income.
An item of property, plant and equipment is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal.Any gain or loss arising
on disposal of an asset(calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss when the asset is
derecognised.
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6.7 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended
use or sale are capitalised as part of the cost of the respective assets. All other
borrowing costs are expensed in the period they are incurred. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of
funds.
6.8 Intangible assets
Intangible assets acquired through business combination are initially recognised at their
fair value on the date of business acquisition while intangible assets acquired in other
cases are recognised at cost. Following the initial recognition, the intangible assets are
carried at cost less any accumulated amortisation and any accumulated impairment
losses (if any).
Intangible assets with finite lives are amortised on a systematic basis over the
economic useful life and tested for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method
of such intangible assets are reviewed at least at each financial year end. The
amortisation expense is charged to profit or loss.
A summary of the intangible assets with finite useful lives is as follows.
Useful lives
Trademarks - 5, 10 ,20, 39 years
Copyrights - 1 - 7 years
Computer software - 3, 5, 10 years
Intangible assets with indefinite useful lives are not amortised, but are tested for
impairment annually either individually or at the cash generating unit level.
6.9 Goodwill
Goodwill is initially recorded at cost, which equals to the excess of cost of business
combination over the fair value of the net assets acquired. If the fair value of the net
assets acquired exceeds the cost of business combination, the excess is immediately
recognised as gain in profit or loss.
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested
for impairment annually and when circumstances indicate that the carrying value may
be impaired.
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For the purpose of impairment testing, goodwill acquired in a business combination is
allocated to each of the Company and its subsidiaries’ cash generating units (or group
of cash-generating units) that are expected to benefit from the synergies of the
combination. The Company and its subsidiaries estimate the recoverable amount of
each cash-generating unit (or group of cash-generating units) to which the goodwill
relates. Where the recoverable amount of the cash-generating unit is less than the
carrying amount, an impairment loss is recognised in profit or loss. Impairment losses
relating to goodwill cannot be reversed in future periods.
6.10 Leasehold right and amortisation
Leasehold right is stated at cost less accumulated amortisation. Amortisation of
leasehold right is calculated by reference to its cost on a straight-line basis over the
period of lease.
6.11 Deferred financial fees
Financial expenses related to borrowings that are typically incurred on or before signing
facility agreements and before actual draw down of the loans are recorded as deferred
financial fees. A portion of deferred financial fees proportionate to the amount of the
loan facility already drawn is presented as a deduction against the related loan account
and amortised using the effective interest rate method over the term of the loans.
The amortisation of deferred financial fees is included in determining borrowing costs.
6.12 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by,
the Company, whether directly or indirectly, or which are under common control with
the Company.
They also include associates and individuals which directly or indirectly own a voting
interest in the Company that gives them significant influence over the Company,
key management personnel, directors and officers with authority in the planning and
direction of the Company’s operations.
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6.13 Long-term leases
Leases of property, plant or equipment which transfer substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised at
the lower of the fair value of the leased assets and the present value of the minimum
lease payments. The outstanding rental obligations, net of finance charges, are
included in other long-term payables, while the interest element is charged to profit or
loss over the lease period. The assets acquired under finance leases is depreciated
over the useful life of the leased assets.
Operating lease payments are recognised as an expense in profit or loss on a straight
line basis over the lease term.
6.14 Foreign currencies
Transactions in foreign currencies are translated into Baht at the exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated into Baht at the exchange rate ruling at the end of reporting
period.
Gains and losses on exchange are included in determining income.
6.15 Impairment of assets
At the end of each reporting period, the Company and its subsidiaries performs
impairment reviews in respect of the property, plant and equipment and other intangible
assets whenever events or changes in circumstances indicate that an asset may be
impaired. The Company and its subsidiaries also carries out annual impairment reviews
in respect of goodwill and intangible assets with indefinite useful lives. An impairment
loss is recognised when the recoverable amount of an asset, which is the higher of the
asset’s fair value less costs to sell and its value in use, is less than the carrying
amount. In determining value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs to sell, an appropriate valuation model is used.
These calculations are corroborated by a valuation model that, based on information
available, reflects the amount that the Company and its subsidiaries could obtain from
the disposal of the asset in an arm’s length transaction between knowledgeable, willing
parties, after deducting the costs of disposal.
The Company and its subsidiaries recognized an impairment loss in profit or loss.
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6.16 Employee benefits
Short-term employee benefits
Salaries, wages, bonuses and contributions to the social security fund are recognised as
expenses when incurred.
Post-employment benefits (Defined contribution plans)
The Company and its subsidiaries and its employees have jointly established a provident
fund. The fund is monthly contributed by employees and by the Company and its
subsidiaries. The fund’s assets are held in a separate trust fund and the Company and its
subsidiaries' contributions are recognised as expenses when incurred.
Post-employment benefits (Defined benefit plans)
The Company and its subsidiaries have obligations in respect of the severance
payments it must make to employees upon retirement under labor law. The Company
and its subsidiaries treat these severance payment obligations as a defined benefit plan.
The obligation under the defined benefit plan is determined by a professionally qualified
independent actuary based on actuarial techniques, using the projected unit credit
method.
For the first-time adoption of TAS 19 Employee Benefits, the Company and its
subsidiaries elected to recognise the transitional liability, which exceeds the liability that
would have been recognised at the same date under the previous accounting policy,
through an adjustment to the beginning balance of retained earnings in the current
period.
The oversea subsidiary has a define benefit plan covering all of its former production
employees in American Samoa. The benefit are based on a percentage of
compensation during each year of service. The oversea subsidiary makes annual
contributions to the plan equal to the minimum required by applicable regulations.
6.17 Provisions
Provisions are recognised when the Company and its subsidiaries have a present
obligation as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
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6.18 Income tax
Income tax expense represents the sum of corporate income tax currently payable and
deferred tax.
Current tax
Income tax is provided in the accounts at the amount expected to be paid to the
taxation authorities, based on taxable profits determined in accordance with tax
legislation of each country. Income tax of the overseas subsidiaries is provided for in
the accounts based on the taxable profits determined in accordance with tax legislation
of their countries.
Deferred tax
Deferred income tax is provided on temporary differences between the tax bases of
assets and liabilities and their carrying amounts at the end of each reporting period,
using the tax rate enacted at the end of the reporting period.
The Company and its subsidiaries recognise deferred tax liabilities for all taxable
temporary differences while they recognise deferred tax assets for all deductible
temporary differences and tax losses carried forward to the extent that it is probable
that future taxable profit will be available against which such deductible temporary
differences and tax losses carried forward can be utilised.
At each reporting date, the Company and its subsidiaries review and reduce the
carrying amount of deferred tax assets to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised.
The Company and its subsidiaries record deferred tax directly to shareholders' equity
if the tax rates to items that are recorded directly to share holders' equity.
6.19 Asset retirement obligations
The overseas subsidiary accounts for asset retirement obligations in accordance with
FASB statement No. 143, “Accounting for Asset Retirement Obligations”. The effect of the
difference in accounting policy is immaterial to profit or loss for the years 2011 and 2010.
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6.20 Derivatives
Forward exchange contracts
Receivables and payables arising from forward exchange contracts are translated into
Baht at the rates of exchange ruling at the end of reporting period. Unrecognised gains
and losses from the translation are included in determining income. Premiums or discounts
on forward exchange contracts are amortised on a straight-line basis over the contract
periods.
Interest rate swap contracts
The net amount of interest to be received from or paid to the counterparty under the
interest rate swap contracts is recognised as income or expenses on an accrual basis.
Foreign currency option agreements
The notional amounts of the foreign currency option agreements utilised by the Company
and its subsidiaries are not recognised as assets or liabilities upon inception of the
agreements. Gain and loss from the translation are included in determining income.
7. Significant accounting judgments and estimates
The preparation of financial statements in conformity with generally accepted
accounting principles at times requires management to make subjective judgments and
estimates regarding matters that are inherently uncertain. These judgments and
estimates affect reported amounts and disclosures and actual results could differ.
Significant judgments and estimates are as follows:
Leases
In determining whether a lease is to be classified as an operating lease or finance
lease, the management is required to use judgment regarding whether significant risk
and rewards of ownership of the leased asset have been transferred, taking into
consideration terms and conditions of the arrangement.
Allowance for doubtful accounts
In determining an allowance for doubtful accounts, the management needs to make
judgment and estimates based upon, among other things, past collection history, aging
profile of outstanding debts and the prevailing economic condition.
Impairment of equity investments
The Company and its subsidiaries treat available-for-sale investments and other
investments as impaired when the management judges that there has been a
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THAI UNION FROZEN PRODUCTS PCL.
significant or prolonged decline in the fair value below their cost or where other
objective evidence of impairment exists. The determination of what is “significant” or
“prolonged” requires judgment.
Property plant and equipment/Depreciation
In determining depreciation of plant and equipment, the management is required to
make estimates of the useful lives and residual values of the Company’s plant and
equipment and to review estimate useful lives and residual values when there are any
changes.
In addition, the management is required to review property, plant and equipment for
impairment on a periodical basis and record impairment losses in the period when it is
determined that their recoverable amount is lower than the carrying amount. This
requires judgments regarding forecast of future revenues andexpenses relating to the
assets subject to the review.
Goodwill and intangible assets
The initial recognition and measurement of goodwill and other intangible assets, and
subsequent impairment testing, require management to make estimates of cash flows
to be generated by the asset or the cash generating units and to choose a suitable
discount rate in order to calculate the present value of those cash flows.
Deferred tax assets
Deferred tax assets are recognised in respect of temporary differences only to the
extent that it is probable that taxable profit will be available against which these
differences can be utilised. Significant management judgment is required to determine
the amount of deferred tax assets that can be recognised, based upon the likely timing
and level of estimate future profits.
Post-employment benefit under defined benefit plans and other long-term
employee benefits
The obligation under the defined benefit plan and other long-term employee benefit
plans is determined based on actuarial techniques. Such determination is made based
on various assumptions, including discount rate, future salary increase rate, mortality
rate and staff turnover rate.
Litigation
The Company and its subsidiaries have contingent liabilities as a result of litigation. The
management has used judgement to assess of the results of the litigation and believes
that no loss will result. Therefore no contingent liabilities are recorded as at the end of
reporting period.
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8. Cash and cash equivalents
(Unit: Thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Cash 3,398 3,057 1,572 1,238
Bank deposits 899,122 1,034,240 54,336 13,674
Total 902,520 1,037,297 55,908 14,912
As at 31 December 2011, bank deposits in saving accounts and fixed deposits carried
interests between 0.17 and 1.93% per annum (2010: between 0.04 and 1.37% per
annum).
9. Trade and other receivables
(Unit: Thousand Baht)
Consolidated financial statements Separate financial statements
2011 2010 2011 2010
Trade receivables - related parties
Aged on the basis of due dates
Not yet due 21,050 21,681 1,134,315 1,369,499
Past due
1 - 30 days 40,341 39,254 534,394 249,097
31 - 60 days - 4 358,201 151,800
61 - 90 days - - 447,824 12,672
91 - 120 days - - - 5,082
Total trade receivables - related parties 61,391 60,939 2,474,734 1,788,150
Trade receivables - unrelated parties
Aged on the basis of due dates
Not yet due 9,222,755 7,026,107 1,226,524 854,306
Past due
1 - 30 days 1,421,944 1,717,161 170,386 160,023
31 - 60 days 210,035 280,892 5,791 45,664
61 - 90 days 102,888 82,706 1,560 11,109
91 - 120 days 58,582 65,733 - 12,345
121 - 180 days 37,279 50,708 - 9,191
181 - 365 days 66,298 43,026 - 4,768
Over 365 days 164,281 123,853 20,915 326
Total trade receivables - unrelated
parties 11,284,062 9,390,186 1,425,176 1,097,732
Total trade receivables 11,345,453 9,451,125 3,899,910 2,885,882
Less: Allowance for doubtful accounts (250,793) (233,267) (25,518) (2,945)
Total trade receivables - net 11,094,660 9,217,858 3,874,392 2,882,937
parties 576 565 184,652 175,072
Accrued income 26,688 16,953 11,668 8,378
Advance payment 38,867 26,444 17,475 245
Total o 66,131 43,962 213,795 183,695
Total trade and other receivables - net 11,160,791 9,261,820 4,088,187 3,066,632
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As at 31 December 2011 and 2010, certain trade accounts receivable of two overseas
subsidiaries have secured their credit facilities as mentioned in Note 19.
10. Related party transactions
During the years, the Company and its subsidiaries had significant business
transactions with related parties. Such transactions are summarised below.
(Unit: Million Baht)
Consolidated
Separate
financial statements financial statements Transfer Pricing Policy
2011 2010 2011 2010
Transactions with subsidiaries:
(Eliminated from consolidated financial statements)
Sales - - 10,348 9,222 Cost plus margin
Dividend income - - 1,196 1,207 As declared
Interest income - - 1,049 435 2.55 - 6.40% per annum
(2010: 1.85 - 6.40% per
annum)
Other income - - 41 37 Near market price
Sale of assets - - - 44 Near market price
Purchases of goods - - 1,115 981 Cost plus margin
Purchase of assets - - - 111 Near market price
Interest expense - - 3 12 2.50% per annum (2010:
1.10 - 1.95% per annum)
Management fee - - 52 41 Contract price
Other expenses - - 87 48 Near market price
Transactions with associates:
Sales 26 19 7 6 Cost plus margin
Dividend income 35 12 35 12 As declared
Other income 21 16 - - Near market price
Purchases of goods 9 11 - - Cost plus margin
Purchases service expense 1 1 - - Near market price
Transactions with related companies:
Sales 1,064 1,139 238 248 Cost plus margin
Purchases of goods 4,775 3,124 3,910 2,244 Cost plus margin
Transportation expense 44 42 8 10 Near market price
Expenses relating to assets 132 286 54 197 Near market price
The Company and its subsidiaries have insured with Asia-Pacific Risk Consultants
(Thailand) Co., Ltd. which is an insurance broker related by way of having common
directors. During the year 2011, insurance premiums paid through that company
amounted to Baht 52 million (2010: Baht 60 million).
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The relationships between the Company and the related parties are summarised below.
List of related companies
Songkla Canning Pcl.
Thai Union Manufacturing Co., Ltd.
Thai Union Seafood Co., Ltd.
T-Holding Co., Ltd.
Thai Union Feedmill Co., Ltd.
Thai Union Graphic Co., Ltd.
Thai Union International, Inc. (TUI)
PT Juifa International Foods
Thai Union Investment Holding Co., Ltd. (TUIH)
Tri-Union Seafoods, LLC
Tri-Union Frozen products, Inc. (TUFP)
Empress International, Ltd. (Empress)
Tri-Union Frozen Foods, LLC
US Pet Nutrition, LLC (USPN)
Canadian Pet Nutrition, ULC
Empress International of California Ltd.
Empress International Midwest Ltd.
Asian-Pacific Can Co., Ltd.
Yueh Chyang Canned Food Co., Ltd.
Thai Union Hatchery Co., Ltd.
Thai Quality Shrimp Co., Ltd.
Phuket Fishing Co., Ltd.
Samui Fishing Co., Ltd.
Phang-nga Fishing Co., Ltd.
Songkla Fishing Co., Ltd.
Siam Fishing Pte. Ltd.
Thai Union EU Seafood 1 S.A.
Thai Union EU Seafood 2 S.A.
MW Brands SAS
European Seafood Investment Portugal
UK Seafood Investment Limited
John West Food Limited
Mareblu SRL
MW Brands Seychelles Limited
Indian Ocean Tuna Limited
Pioneer Food Cannery Limited
TTV Limited
Mauritius Company
Relationship
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
Subsidiary (Held by subsidiary)
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List of related companies
Relationship
Thai Union France Holding SAS
Subsidiary (Held by subsidiary)
Etablissements Paul Paulet SAS
Subsidiary (Held by subsidiary)
Irish Seafood Investments Limited
Subsidiary (Held by subsidiary)
John West Holland BV
Subsidiary (Held by subsidiary)
Lucky Union Foods Co., Ltd.
Associated company
Biz Dimension Co., Ltd.
Associated company
Avanti Thai Aqua Feeds Private Limited Associated company
Century Trading (Shanghai) Co., Ltd.
Associated company (Held by subsidiary)
TN Fine Chemicals Co., Ltd.
Associated company (Held by subsidiary)
Moresby International Holdings Inc.
Associated company (Held by subsidiary)
LDH (La Doria) Limited
Associated company (Held by subsidiary)
Geminai & Associate Co., Ltd.
Common shareholders/Relative of directors
Chansiri Real Estate Co., Ltd.
Common major shareholders/Common directors
Thai Union Securities Co., Ltd.
Common major shareholders/Common directors
Asian Pacific Thai Tuna Co., Ltd.
Common major shareholders/Common directors
T.C. Union Global Pcl.
Common major shareholders/Common directors
Jana Fish Industries Limited
Common major shareholders/Common directors
T.C. Union Agrotech Co., Ltd.
Common major shareholders/Common directors
Waithai Co., Ltd.
Common major shareholders/Common directors
Merchant Partners Securities Co., Ltd.
Common shareholders/Common directors
Thaipatana Stainless Steel Co., Ltd.
Common major shareholders/Common directors
Hanhong Kanchang Registered Ordinary
Partnership
Common major shareholders/Common directors
Lucky Surimi Products Co., Ltd.
Common directors
Asia-Pacific Risk Consultants (Thailand) Co., Ltd Common shareholders/Common directors
Asia-Pacific Risk Insurance Broker Co., Ltd. Common shareholders/Common directors
Ahead Way International Co., Ltd.
Common major shareholders/Common directors
Ekawat Products Co., Ltd.
Relative of director
Miss Rungtiwa Boonmechote
Relative of director
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The balances of the accounts as at 31 December 2011 and 2010 between the
Company and those related parties are as follows:
(Unit: Thousand Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
Trade accounts receivable - related parties (Note 9)
Subsidiaries - - 2,465,524 1,778,370
Associated companies 4,622 7,750 1,056 1,073
Related companies 56,769 53,189 8,154 8,707
Total trade accounts receivable - related parties 61,391 60,939 2,474,734 1,788,150
Trade and other payables - related parties (Note 18)
Subsidiaries - - 220,906 235,982
Associated companies 1,584 2,928 48 56
Related companies 64,724 88,300 22,288 40,036
Total trade and other payables - related parties 66,308 91,228 243,242 276,074
Short-term loans to subsidiaries
(Eliminated from consolidated financial statements)
Thai Union International, Inc. - - - 545,825
Thai Union Graphic Co., Ltd. - - 80,000 80,000
Total - - 80,000 625,825
Long-term loans to subsidiaries
(Eliminated from consolidated financial statements)
Thai Union Investment Holding Co., Ltd. - - 15,207,249 13,963,603
Thai Union International, Inc. - - 2,240,991 2,362,748
Thai Union Manufacturing Co., Ltd. - - - 1,794,492
Total - - 17,448,240 18,120,843
Less: Current portion
Thai Union International, Inc. - - (440,335) (897,246)
Thai Union Manufacturing Co., Ltd. - - - (1,794,492)
- - (440,335) (2,691,738)
Net - - 17,007,905 15,429,105
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(Unit: Thousand Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
Short-term loans from subsidiaries
(Eliminated from consolidated financial statements)
Songkla Canning Pcl. - - - 245,840
Total - - - 245,840
During 2011, movements of loans to/from related parties were as follows:
(Unit: Thousand Baht)
Separate financial statements
Balance as at During the year Balance as at
1 January 2011 Increase Decrease Revaluation 31 December 2011
Short-term loans to subsidiaries
Thai Union International, Inc. 545,825 - (583,055) 37,230 -
Thai Union Manufacturing Co., Ltd. - 254,970 (254,970) - -
Songkla Canning Pcl. - 107,460 (107,460) - -
Thai Union Graphic Co., Ltd. 80,000 13,840 (13,840) - 80,000
625,825 376,270 (959,325) 37,230 80,000
Long-term loans to subsidiaries
Thai Union Investment Holding Co., Ltd. 13,963,603 898,265 - 345,381 15,207,249
Thai Union International, Inc. 2,362,748 674,175 (897,246) 101,314 2,240,991
Thai Union Manufacturing Co., Ltd. 1,794,492 - (1,794,492) - -
18,120,843 1,572,440 (2,691,738) 446,695 17,448,240
Short-term loans from subsidiaries
Thai Union Manufacturing Co., Ltd. - 804,360 (804,360) - -
Songkla Canning Pcl. 245,840 635,090 (880,930) - -
Thai Union Feedmill Co., Ltd. - 11,500 (11,500) - -
245,840 1,450,950 (1,696,790) - -
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Directors and management’s benefits
During the years ended 31 December 2011 and 2010, the Company and its subsidiaries
had employee benefits expenses payable to their directors and management as follows:
(Unit: Million Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
Short-term employee benefits 614 410 78 52
Post-employment benefits 17 - 4 -
Other long-term benefits 5 101 - -
Termination benefits 45 24 - -
Total 681 535 82 52
11. Inventory
(Unit: Thousand Baht)
Consolidated financial statements
Reduce cost to net
Cost realisable value Inventories - net
2011 2010 2011 2010 2011 2010
Finished goods 13,932,395 11,878,951 (251,014) (207,525) 13,681,381 11,671,426
Work in process 66,796 63,625 (328) - 66,468 63,625
Raw materials 7,047,991 5,244,553 (112,276) (84,921) 6,935,715 5,159,632
Ingredient and packaging 1,477,321 1,179,481 (70,225) (62,812) 1,407,096 1,116,669
Goods in transit 542,705 2,923,102 (9,206) - 533,499 2,923,102
Spare parts 3,507,796 411,664 - - 3,507,796 411,664
Total 26,575,004 21,701,376 (443,049) (355,258) 26,131,955 21,346,118
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(Unit: Thousand Baht)
Separate financial statements
Reduce cost to net
Cost realisable value Inventories - net
2011 2010 2011 2010 2011 2010
Finished goods 1,248,738 841,306 (45,032) (46,123) 1,203,706 795,183
Work in process 21,529 19,875 - - 21,529 19,875
Raw materials 1,745,004 1,276,836 (43,817) (4,567) 1,701,187 1,272,269
Ingredient and packaging 260,433 258,200 (13,463) (16,680) 246,970 241,520
Goods in transit 421,724 74,798 - - 421,724 74,798
Spare parts 23,115 19,681 - - 23,115 19,681
Total 3,720,543 2,490,696 (102,312) (67,370) 3,618,231 2,423,326
Two overseas subsidiaries have mortgaged the certain inventories of that company to
financial institutions to secure its credit facilities as mentioned in Note 19.
12. Restricted deposits with financial institutions
These represent fixed deposits pledged with financial institution to secure credit
facilities.
13. Investments in subsidiaries
Details of investments in subsidiaries as presented in separate financial statements are
as follows.
(Unit: Thousand Baht)
Shareholding
Dividend received
Company’s name Paid-up capital percentage Cost during the year
2011 2010 2011 2010 2011 2010 2011 2010
% %
Songkla Canning Pcl. Baht 360 million Baht 360 million 90.44 90.44 1,379,791 1,379,791 569,744 406,960
Thai Union Manufacturing Baht 300 million Baht 300 million 90.08 90.08 1,212,172 1,212,172 270,254 364,842
Co., Ltd.
Thai Union Seafood Co., Ltd. Baht 300 million Baht 300 million 51.00 51.00 189,316 189,316 - 30,600
T-Holding Co., Ltd. Baht 70 million Baht 70 million 90.00 90.00 20,699 20,699 3,150 -
Thai Union Feedmill Co., Ltd. Baht 500 million Baht 500 million 51.00 51.00 255,000 255,000 307,020 367,200
Thai Union Graphic Co., Ltd. Baht 40 million Baht 40 million 74.00 74.00 45,331 45,331 5,180 10,360
Thai Union International, Inc. USD 13.1 million USD 8.1 million 100.00 100.00 482,170 325,770 - -
(TUI)
PT Juifa International Foods USD 2.7 million USD 2.7 million 88.78 76.50 82,972 69,510 26,577 27,151
Thai Union Investment Holding
Co., Ltd. (TUIH) EUR 22 million EUR 22 million 100.00 100.00 925,256 925,256 - -
Total 4,592,707 4,422,845 1,181,905 1,207,113
Less: Provision for impairment of investments (26,136) (26,136)
Net 4,566,571 4,396,709
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The shares of MW Brands and its subsidiaries, subsidiaries of Thai Union Investment
Holding Co., Ltd., were pledged as collateral of their subsidiaries long-term loans as
described in Note 20.
During the second quarter of the current year, US Pet Nutrition, LLC (USPN), which is
the subsidiary of Thai Union International, Inc. (TUI), established Canadian Pet
Nutrition, ULC in Canada to engage in the distribution of pet food.
During the fourth quarter of the current year, the Company increased portion of
investment in PT Juifa International Foods, which is the subsidiary of the Company
from 76.50% to 88.78% or amount of Baht 13.5 million.
On 21 December 2011, the meeting of the Board of Directors approved the additional
investment in TUI of not over USD 15 million. During the fourth quarter of the current
year, the Company invested in this company amounting to USD 5 million.
During the first quarter of 2010, Thai Union Seafood Co., Ltd., subsidiary, called-up the
additional 25% of its share capital. The Company additionally invested Baht 25.5 million
in this company.
During the third quarter of 2010, Thai Union Feedmill Co., Ltd., subsidiary, increased in
the registered share capital of Baht 200 million. The Company additionally invested
Baht 102 million in this company.
Acquisition of MW Brands
On 27 July 2010, the meeting of the Company’s Board of Directors approved the
acquisition of MW Brands, which can be summarised as follow.
- Approval of the entry into Share Purchase Agreement and associated ancillary
agreements in regards to the acquisition of shares and business of MW Brands
Holdings SAS (“MW Brands”). MW Brands is a vertically integrated group, which
manufactures and distributes the ambient seafood products through its trademarks.
MW Brands, headquartered in France, has factories in strategic locations close to
two major fishing grounds, Seychelles and Ghana, and also in Portugal and France.
MW Brands market its products across Europe through four main trademarks.
The details of the transaction as prescribed in the Acquisition Rule as follows.
- The Company and the Seller have entered into a sale and purchase
agreement in relation to the Company's proposed acquisition of MW Brands
on 27 July 2010. Completion of the Transaction is conditional on approval
from the Extraordinary General Meeting of Shareholders, which will be held on
2 September 2010 and Competition Clearance.
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THAI UNION FROZEN PRODUCTS PCL.
- The purchaser, Thai Union EU Seafood 2 S.A. incorporated in Luxembourg for
the purposes of the acquisition, which is wholly owned by the Company.
- The Company will purchase 31,367,000 shares of MW Brands, equivalent to
100 % of the issued share capital as at 27 July 2010 of MW Brands and a
maximum number of 417,517 additional shares of MW Brands to be issued
upon exercise of stock-option granted by MW Brands together with the
repayment of long-term debt and shareholders' debt for the amount equivalent
to an enterprise value of EUR 680 million.
- The Company has agreed to pay for 100% of the share capital of MW Brands
as at 27 July 2010 from the sources of funds derived from domestic financial
institutions and overseas for the total enterprise value of up to EUR680 million
(equivalent to Baht28,496 million). The payment shall be made to the seller
and its creditors on the closing date.
- Source of funds
- Long-term loans from 3 leading domestic financial institutions for the
total credit line of up to Baht15,000 million. Such loans will have
maturities of 6 years and 8 years.
- Long-term loans contract with 4 leading foreign financial institutions in the
amount of EUR340 million. Such loans will have maturities of 6 years and
7 years and collateral in the form of shares of MW Brands and its
subsidiaries.
- The Company will issue a convertible bond to private placement investor
worth EUR60 million. The bond will have a tenor of 4 years from the issue
date and an annual coupon of 5% p.a. and an overall yield of 8% p.a.
unless converted into common shares. The bond can be converted into
common shares at any time after the first year at a conversion price of
Baht56 per share (Revised).
- Approval of the execution of Credit Facility Agreements for the acquisition of
shares and business of MW Brands as described above.
- Approval of the reduction of the Company's registered capital from Baht885,090,950
to Baht883,170,950.
- Approval of the increase of the Company's registered capital in the additional
amount of 116,829,050 shares (Baht 1 per share) from the current registered
capital of Baht883,170,950 and the new registered capital will be Baht
1,000,000,000 for the purpose of reserving the issuance of newly issued
convertible bond.
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- Approval of the allotment of new ordinary shares from capital increase of
the Company reserving for the issuance of convertible bond as described
above.
- Approval of the issuance and offering of newly issued convertible bond to
specific investors (Private Placement) in the amount not exceeding EUR60 million
as described above.
- Approval of the allotment of remaining ordinary shares from those shares
reserved for the issuance of convertible bond, as preceding paragraph, to the
existing shareholders on a pro rata basis (Right Offering) or to the investors
on a Private Placement basis.
- Approval of the Company's incorporation of its new overseas subsidiary,
commercially referred to as Thai Union Investment Holding Co., Ltd. on the
territory of Republic of Mauritius under total registered capital of EUR 1, which
will be wholly owned by the Company. The Company additionally invested
EUR22 million during 2010. The purpose of the incorporation of Thai Union
Investment Holding is to acquire MW Brands Holdings SAS.
- Approval of the appointment of the Company's appointment of CIMB
Securities (Thailand) Co., Ltd. as an independent financial advisor to give the
Company's directors and shareholders its professional opinions on the
acquisition of MW Brands Holdings SAS.
- Approval of the date and agendas for the Extraordinary General Meeting of
Shareholders No.1/2010 that shall be held on 2 September 2010.
On 2 September 2010, the Extraordinary General Meeting of Shareholders
approved the acquisition of MW Brands, the execution of credit long-term loan
agreements, the reduction and increase of the Company’s registered capital and
the issuance and offering of new convertible bond. The bond are to partially fund
the acquisition of MW Brands’ shares and business in accordance with the
resolution of the Board of Directors meeting held on 27 July 2010. The Company
subsequently received confirmation from the UK Office of Fair Trading regarding its
anti-trust obligations in respect of the merger.
Thai Union EU Seafood 1 S.A., by the Company, purchased 100% interests in
MW Brands and settled the long-term loans and loans from shareholders, which
equaled the total enterprise value of EUR 680 million. The completion date of this
acquisition is 29 October 2010 as described in Note 2.2.
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THAI UNION FROZEN PRODUCTS PCL.
14. Investments in associates
14.1 Details of associates:
(Unit: Thousand Baht)
Consolidated financial statements
Nature Country of Carrying amounts
Company's name of business incorporation Shareholding percentage Cost based on equity method
Investments in associates, directly held by the Company
2011 2010 2011 2010 2011 2010
% %
Lucky Union Foods Co., Ltd.
Manufacturer & exporter of
crab sticks
Thailand 25.00 25.00 37,500 37,500 298,386 295,100
Biz Dimension Co., Ltd. E-Commerce under website Thailand 20.00 20.00 1,010 1,010 19,711 17,911
Avanti Thai Aqua Feeds Private Manufacturer & distributor India 50.00 50.00 27,721 27,721 27,721 27,721
Limited
of animal feeds
Investments in associates, directly held by subsidiaries
Century Trading (Shanghai) Importer & exporter of food The People's 45.04 45.04 75,900 75,900 25,265 18,337
Co., Ltd. (50% held by Thai Union products Republic of
Manufacturing Co., Ltd.)
China
TN Fine Chemical Co., Ltd. Manufacturer & exporter Thailand 44.14 44.14 44,070 44,070 44,894 38,000
(49% held by Thai Union of by-products from
Manufacturing Co., Ltd.)
seafoods
Moresby International Holdings Inc. Holding in fishing British Virgin 33.33 33.33 96,981 52,433 96,981 52,433
(33% held by Thai Union company Island
Manufacturing Co., Ltd.)
LDH (La Doria) Limited Distributor of food products United 20.00 20.00 95,940 95,940 411,010 388,215
(20% held by MW Brands) Kingdom
379,122 334,574 923,968 837,717
Unit: Thousand Baht
Separate financial statements
Country of Shareholding
Company's name Nature of business incorporation percentage Cost
2011 2010 2011 2010
% %
Lucky Union Foods Co., Ltd.
Manufacturer & exporter of
Thailand 25.00 25.00 37,500 37,500
crab sticks
Biz Dimension Co., Ltd. E-Commerce under website Thailand 20.00 20.00 1,010 1,010
Avanti Thai Aqua Feeds Private Limited Manufacturer & distributor of animal feeds India 50.00 50.00 27,721 27,721
66,231 66,231
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14.2 Share of income/loss
During the year, the Company and its subsidiaries have recognised its share of net
income (loss) from investments in associated companies in the consolidated financial
statements as follows:
Unit: Thousand Baht
Consolidated
financial statements
Share of income (loss) from
investments in associates
Company’s name
during the year
2011 2010
Lucky Union Foods Co., Ltd. 38,287 25,958
Biz Dimension Co., Ltd. 1,801 1,671
Century Trading (Shanghai) Co., Ltd. 6,927 (538)
TN Fine Chemicals Co., Ltd. 6,894 (3,570)
LDH (La Doria) Limited 29,821 -
Total 83,730 23,521
14.3 Summarised financial information of associates
Financial information of associates is summarised below.
(Unit: Million Baht
Paid-up capital as at
Total assets as at
Total liabilities as at
Total revenues
Profit (loss) for the
31 December
31 December
31 December
for the years ended
years ended
Company’s name
(Unit: Million)
31 December
31 December
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Lucky Union Foods Co., Ltd. Baht150 Baht150 1,726 1,719 560 552 1,297 1,035 153 104
Biz Dimension Co., Ltd. Baht25 Baht25 49 42 6 5 74 76 9 8
Avanti Thai Aqua Feeds Rupee Rupee 71 52 24 1 1 2 1 1
Private Limited 76.9 76.9
Century Trading (Shanghai) Co., Ltd. USD4 USD4 55 46 4 13 225 177 14 (1)
TN Fine Chemicals Co., Ltd. Baht 90 Baht 90 99 116 8 39 100 55 14 (7)
Moresby International Holdings Inc. USD9.4 USD5.0 295 149 - - - - - -
LDH (La Doria) Limited GBP 1 GBP 1 3,758 2,658 2,796 1,602 11,567 9,178 363 244
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THAI UNION FROZEN PRODUCTS PCL.
During the current year, Moresby International Holdings Inc. increased the registered
share capital of USD4.4 million. Thai Union Manufacturing Co., Ltd. additionally
invested USD1.5 million in this company.
Investments in some associates were determined on the basis of financial information
provided by those companies' management. These were unaudited by their external
auditors due to time constraints. However, the values of the investments in associates
are immaterial.
15. Other long-term investments
(Unit: Thousand Baht)
Consolidated financial statements
2011 2010
Cost Fair value Cost Fair value
Other long-term investments
Available-for-sale securities - Unit trusts 50,546 33,577 55,101 36,989
Unrealised loss on changes in the
value of investments (16,969) (18,112)
Total available-for-sale securities 33,577 36,989
Other investments
- Ordinary shares 36,628 35,580
- Unit trusts 100 100
Total other long-term investments 70,305 72,669
(Unit: Thousand Baht)
Separate
financial statements
2011 2010
Other long-term investments
Other investments - ordinary shares 34,579 34,579
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16. Property, plant and equipment
Unit: Thousand Baht
Consolidated financial statements
Buildings
Assets under
Land and and Machinery Furniture installation and
land building and and Motor under
improvement improvement equipment fixtures vehicles construction Total
Cost
1 January 2010 1,248,104 4,437,996 9,645,069 366,040 418,971 1,104,878 17,221,058
Increase from acquisition of subsidiaries
during the year (Note 2.2) 48,664 1,979,489 4,955,046 292,320 198,649 330,902 7,805,070
Additions 409,111 38,148 75,483 31,574 27,376 2,169,735 2,751,427
Disposals/write off (116,349) (207,788) (1,051,767) (43,191) (33,647) (678) (1,453,420)
Transfer in (out) 31,057 539,753 1,317,522 30,660 59,545 (1,978,537) -
Translation adjustment (3,682) (123,496) (242,559) (22,470) (8,041) (28,754) (429,002)
31 December 2010 1,616,905 6,664,102 14,698,794 654,933 662,853 1,597,546 25,895,133
Additions 44,332 65,307 370,512 27,239 47,848 2,724,477 3,279,715
Disposals/write off - (145,839) (301,968) (42,436) (27,660) (12,412) (530,315)
Transfer to other assets - - - - - (156,138) (156,138)
Transfer in (out) 6,830 546,388 1,595,738 71,631 25,349 (2,245,936) -
Translation adjustment 3,233 67,005 153,337 15,467 6,337 7,768 253,147
31 December 2011 1,671,300 7,196,963 16,516,413 726,834 714,727 1,915,305 28,741,542
Accumulated depreciation
1 January 2010 17,925 1,793,468 5,229,436 284,361 277,713 - 7,602,903
Increase from acquisition of subsidiaries
during the year (Note 2.2) 991 778,613 2,855,075 172,766 156,801 - 3,964,246
Depreciation for the year 4,809 225,011 873,228 35,220 50,108 - 1,188,376
Depreciation for disposals/write off (887) (141,928) (685,292) (37,065) (28,184) - (893,356)
Translation adjustment (131) (51,334) (135,886) (15,360) (6,257) - (208,968)
31 December 2010 22,707 2,603,830 8,136,561 439,922 450,181 - 11,653,201
Depreciation for the year 4,722 325,686 1,094,947 72,736 53,608 - 1,551,699
Depreciation for disposals/write off - (137,489) (111,802) (40,153) (23,443) - (312,887)
Translation adjustment 89 19,468 90,485 9,220 4,667 - 123,929
31 December 2011 27,518 2,811,495 9,210,191 481,725 485,013 - 13,015,942
Allowance for loss on impairment of assets
1 January 2010 - 32,371 215,823 - 3,483 - 251,677
Decrease during the year - - (190,088) - - - (190,088)
Translation adjustment - - (9,830) - - - (9,830)
31 December 2010 - 32,371 15,905 - 3,483 - 51,759
Increase during the year - 33,255 - - - - 33,255
Decrease during the year - - (11,834) - (3,483) - (15,317)
Translation adjustment - - 943 - - - 943
31 December 2011 - 65,626 5,014 - - - 70,640
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Unit: Thousand Baht
Consolidated financial statements
Buildings
Assets under
Land and and Machinery Furniture installation and
land building and and Motor under
improvement improvement equipment fixtures vehicles construction Total
Net book value
31 December 2010 1,594,198 4,027,901 6,546,328 215,011 209,189 1,597,546 14,190,173
31 December 2011 1,643,782 4,319,842 7,301,209 245,109 229,714 1,915,304 15,654,960
Depreciation for the years
2010 (Baht1,039 million include in manufacturing cost and the balances in selling and administrative expenses) 1,188,376
2011 (Baht1,446 million include in manufacturing cost and the balances in selling and administrative expenses) 1,551,699
(Unit: Thousand Baht)
Separate financial statements
Buildings
Assets under
Land and and Machinery Furniture installation and
land building and and Motor under
improvement improvement equipment fixtures vehicles construction Total
Cost
1 January 2010 387,280 1,525,668 1,690,486 51,429 127,518 341,308 4,123,689
Additions 369,912 - 19,158 2,130 7,092 527,717 926,009
Disposals/write off (17,079) - (2,867) (1,851) (1,125) (2,617) (25,539)
Transfer in (out) - 177,158 131,663 6,115 2,710 (317,646) -
31 December 2010 740,113 1,702,826 1,838,440 57,823 136,195 548,762 5,024,159
Additions - 41,758 120,531 5,134 23,464 318,751 509,638
Disposals/write off - - (14,192) (257) (7,913) (114) (22,476)
Transfer in (out) 2,257 269,410 160,925 441 (6,484) (426,549) -
31 December 2011 742,370 2,013,994 2,105,704 63,141 145,262 440,850 5,511,321
Accumulated depreciation
1 January 2010 - 560,751 993,951 26,238 85,311 - 1,666,251
Depreciation for the year - 81,833 216,386 8,465 14,318 - 321,002
Depreciation for disposals/ write off - - (834) (1,731) (1,125) - (3,690)
31 December 2010 - 642,584 1,209,503 32,972 98,504 - 1,983,563
Depreciation for the year - 62,929 190,820 9,381 9,409 - 272,539
Depreciation for disposals/write off - - (7,022) (227) (7,851) - (15,100)
31 December 2011 - 705,513 1,393,301 42,126 100,062 - 2,241,002
Allowance for loss on impairment of assets
1 January 2010 - 32,371 - - 3,483 - 35,854
Increase (Decrease) - - - - - - -
31 December 2010 - 32,371 - - 3,483 - 35,854
Increase during the year - 33,255 - - - - 33,255
Decrease during the year - - - - (3,483) - (3,483)
31 December 2011 - 65,626 - - - - 65,626
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(Unit: Thousand Baht)
Separate financial statements
Buildings
Assets under
Land and and Machinery Furniture installation and
land building and and Motor under
improvement improvement equipment fixtures vehicles construction Total
Net book value
31 December 2010 740,113 1,027,871 628,937 24,851 34,208 548,762 3,004,742
31 December 2011 742,370 1,242,855 712,403 21,015 45,200 440,850 3,204,693
Depreciation for the years
2010 (Baht 304 million include in manufacturing cost and the balances in selling and administrative expenses) 321,002
2011 (Baht 255 million include in manufacturing cost and the balances in selling and administrative expenses) 272,539
As at 31 December 2011, certain plant and equipment items of the Company and its
subsidiaries have been fully depreciated but are still in use. The gross carrying amount
(before deducting accumulated depreciation) of those assets amounted to
approximately Baht5,189 million (2010: Baht4,664 million).
17. Intangible assets
Consolidated financial statements
(Unit: Million Baht)
Covenant
Customer not to Computer Distributor
Licences Trademark Patents relationships complete software relationships Others Total
Cost
At 1 January 2010 47 874 36 141 14 92 - - 1,204
Increase from acquisition of
subsidiaries (Note 2.2) 210 12,585 - - - 159 235 2 13,191
Additions 2 - - - - 9 - - 11
Disposal/write off - - - - - (3) - - (3)
Translation adjustment (7) (622) - (14) (1) (8) (10) - (662)
At 31 December 2010 252 12,837 36 127 13 249 225 2 13,741
Addition - 1 - - - 37 - 1 39
Disposal/write off - - (36) - - - - - (36)
Translation adjustment 12 376 - 7 - 3 7 - 405
31 December 2011 264 13,214 - 134 13 289 232 3 14,149
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(Unit: Million Baht)
Consolidated financial statements
Covenant
Customer not to Computer Distributor
Licences Trademark Patents relationships complete software relationships Others Total
Amortisation
At 1 January 2010 12 296 - 90 14 78 - - 490
Increase from acquisition of
subsidiaries (Note 2.2) - - - - - 65 - - 65
Amortisation 6 - - 13 - 8 1 - 28
Amortisation for disposal/
write off - - - - - (3) - - (3)
Translation adjustment - (28) - (8) (1) (3) - - (40)
At 31 December 2010 18 268 - 95 13 145 1 - 540
Amortisation 9 - - 13 - 31 8 - 61
Translation adjustment - 13 - 5 - 1 - - 19
At 31 December 2011 27 281 - 113 13 177 9 - 620
Impairment
At 1 January 2010 - - - - - - - - -
Increase from acquisition of
subsidiaries (Note 2.2) - 182 - - - - - - 182
Translation adjustment - (8) - - - - - - (8)
At 31 December 2010 - 174 - - - - - - 174
Translation adjustment - 5 - - - - - - 5
At 31 December 2011 - 179 - - - - - - 179
Net book value
At 31 December 2010
234 12,395 36 32 - 104 224 2 13,027
At 31 December 2011 237 12,754 - 21 - 112 223 3 13,350
(Unit: Million Baht)
Separate
financial statements
Computer software
Cost
At 1 January 2010 8.0
Additions 1.0
At 31 December 2010 9.0
Additions 0.7
At 31 December 2011 9.7
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(Unit: Million Baht)
Separate
financial statements
Computer software
Amortisation
At 1 January 2010 7.1
Amortisation 0.4
At 31 December 2010 7.5
Amortisation 0.5
At 31 December 2011 8.0
Net book value
At 31 December 2010 1.5
At 31 December 2011 1.7
Acquisition during the year
Licenses, distributor relationships trademark and intangible assets acquired through
business combinations. These licenses and distributor relationships have been granted
for approximately 39 years and 20 years, respectively. Trademarks acquired have
indefinite useful life.
As at 31 December 2011, some trademark of the overseas subsidiary was incorporated
at eligible collateral as mentioned in Note 19.
18. Trade and other payables
(Unit: Thousand Baht)
Consolidated
Separate
financial statements
financial statements
2011 2010 2011 2010
Trade payables - related parties 28,047 39,975 231,330 243,513
Trade payables - unrelated parties 6,444,194 5,869,655 833,626 696,100
Accrued interest expenses to related parties - - 8 445
Accrued expenses - related parties 38,261 51,253 11,904 32,116
Other payables construction and
asset purchase 95,371 180,495 24,144 70,612
Accrued expenses 1,313,202 1,053,379 271,230 254,719
Total trade and other payables 7,919,075 7,194,757 1,372,242 1,297,505
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THAI UNION FROZEN PRODUCTS PCL.
19. Bank overdrafts and short-term loans from financial institutions
The Company entered into interest rate swap agreements for short-term loans from
financial institution to hedge interest rate risk, as mentioned in Note 35.1
TUI entered into an amended and restated credit agreement (the TUFP credit facility)
with Bank of America N.A. The TUFP credit facility provides for a USD85 million
revolving facility and expires on 15 October 2013. Borrowings under the credit facility
bear interest, at TUFP’s option, at LIBOR plus a margin of 2.00 to 2.50% per annum, or
the bank’s prime rate plus 1.00 to 1.50% per annum, subject to excess availability
evaluated on a quarterly basis. An unused line fee is charged at 0.25% per annum,
subject to adjustment, on the average daily unused portion of the credit facility.
The credit facility is secured by all accounts receivable and inventory of TUFP.
This revolving credit agreement includes a requirement that all borrowers maintain a
lockbox arrangement whereby cash receipts are used to repay the amounts
outstanding under the revolving agreement. Therefore, all borrowings made under the
TUFP credit agreement will be classified as short-term.
On 16 February 2011, TUFP entered into a second amendment to the TUFP credit
agreement with Bank of America, N.A. for USD15 million temporary increase in the
availability under the TUFP Credit Agreement through 16 May 2011, which was
extended through 15 June 2011 under a TUFP third amendment. Borrowings under the
TUFP amendments No. 2, 3 and 4 bear interest at LIBOR plus 2.25% per annum or the
bank's prime rate plus 1.25% per annum, subject to excess availability evaluated on
a quarterly basis. The unused line fee remains at 0.25% per annum, subject to
adjustment on the average daily unused portion of the credit facility. On 6 June 2011,
TUFP entered into a fourth amendment to the Credit Agreement (TUFP Amendment
No. 4) with BOA, which increased the temporary credit line to USD115 million through
15 July 2011. On 16 July 2011, TUFP further amended the TUFP Credit Agreement
(TUFP Amendment No. 5) to increase the credit line to USD140 million through the
15 October 2013 expiration date, with other terms remaining unchanged from the initial
TUFP Credit Agreement.
As at 31 December 2011, the balance under the credit facility was USD126 million at
interest rate between 2.28 to 4.25% per annum and actual unused availability was
approximately USD12 million. TUFP is subject to certain financial covenants including
interest coverage ratio and leverage coverage ratio and others. As at 31 December 2011,
TUFP determined it was in compliance with these covenants.
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Tri-Union Frozen Foods, LLC (TUFF) maintained a revolving credit facility with
Wells Fargo Foothill, LLC until 15 October 2010, which was replaced by TUFP credit
facility. The TUFP Facility provided for borrowing and the issuance of letter of credit of
up to USD45 million subject to limitations based on eligible accounts receivable and
inventory and may be increased to USD75 million under certain conditions. The issuance
of letters of credit reduces the borrowing capacity. Borrowings under the credit
agreement bear interest, at TUFF’s option, at LIBOR plus a margin of 2.75% per annum or
the Central Bank's rate plus 2% per annum. TUFF was subject to certain financial
covenants including fixed coverage ratio and leverage coverage ratio as well as other
operating covenants including limitation capital expenditures, transactions with
affiliates, distributions, and dividends. The facility is guaranteed by the Company and
collateralised by TUFF’s accounts receivable and inventory. In association with the
TUFP Credit Facility in place, TUFF repaid Wells Fargo Foothill, LLC for the entire
outstanding balance on 15 October 2010.
On 11 March 2011, Tri-Union Seafoods, LLC (Tri-U) entered into an amended revolving
credit facility with Bank of America N.A. The credit facility, which expires on 11 March 2014,
provides for borrowings and the issuance of letters of credit up to USD95 million subject
to limitations based on eligible accounts receivable and inventory. The issuance of letters
of credit reduces the amount of borrowing capacity. Borrowings under the credit facility
bear interest, at Tri-U’s option, at LIBOR plus a margin of 2.00% per annum or 2.25%
per annum, the bank's prime rate, or the bank’s prime rate plus 1.00% per annum or
1.25% per annum, depending upon the ratio of amounts outstanding to secured
accounts receivable and inventory, subject to quarterly adjustment. An unused line fee
is charged at 0.375% per annum, subject to adjustment, on the average daily unused
portion of the credit facility. The credit facility is secured by accounts receivable and
inventory of Tri-U. On 6 June 2011, Tri-U amended its credit facility with the above
financial institution to incorporate the "Chicken of the Sea" trademark at eligible collateral
with USD10 million additional availability component loan at LIBOR plus a margin of
3.75% or 4.00% per annum or the bank's prime rate plus 2.75% or 3.00% per annum
within the USD95 million credit line. Until repayment in full of the additional component
loan, borrowing under Tri-U credit facility bears interest at LIBOR plus 2.25% or 2.50%
per annum, or the bank's prime rate plus 1.25% or 1.50% per annum at Tri-U option.
As at 31 December 2011, the balance under the credit facility was USD87 million with
interest rate at 2.63 to 6.00% per annum and actual unused availability was approximately
USD5 million. Tri-U is subject to certain financial covenants including an interest
coverage ratio and leverage ratio and other covenants, including limitations on
indebtedness capital leases capital expenditures, transactions with affiliates, distributions,
and dividends. Tri-U determined it was not in compliance with these covenants as of
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
31 December 2011. The financial institution has the right to call the debt immediately
due and payable. As of 10 February 2012, management has not received any
notification from the bank that it intends to call the debts. The Company is currently
engaged in negotiations with the financial institution to modify the terms of the
covenants in order to be in compliance through at least 31 December 2012. There can
be no assurances that Tri-U will be successful in negotiating a debt modification.
The Company has confirmed to Tri-U that it will provide financial support sufficient for
Tri-U to satisfy its obligations and debt service requirements as they come due until at
least 1 January 2013.
20. Long-term loans
Long-term loans as at 31 December 2011 and 2010 consist of:
(Unit: Million Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
USD loans 9 8 - -
Baht loans 3,092 10,259 2,250 9,000
EUR loans 13,240 13,589 - -
Less: Deferred financial fees (742) (839) - (103)
Total 15,599 23,017 2,250 8,897
Less: Current portion (984) (516) - -
Net 14,615 22,501 2,250 8,897
During the third quarter of 2006, a local subsidiary entered into two loan agreements
amounting to Baht150 million with two local financial institutions. The loans carry interest
at MLR minus 1.25% per annum and MLR minus 0.50% per annum. These loans are to be
repaid within year 2013 and have been guaranteed by a local subsidiary. During the
second quarter of the current year, the above subsidiary had already paid the principal
in full amount.
During the second quarter of 2007, a local subsidiary drew Baht380 million of two loan
agreements from a local financial institution. The loans carry interest at 4.85% per annum,
and THBFIX plus 0.5% per annum. These loans are to be repaid within year 2012.
As at 31 December 2011, the balance of this loan is Baht24 million.
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THAI UNION FROZEN PRODUCTS PCL.
During the third quarter of 2007, a local subsidiary entered into a 7-year loan
agreement amounting to Baht1,190 million with a local financial institution. The loan
carries interest at THBFIX plus 0.39% per annum and is to be repaid in semi-annually
installments, the first of which will be due in January 2011. The loan contains covenants
relating to various matters stipulated in the agreement. However, during 2008, the above
subsidiary had repaid principal amount of Baht100 million. As at 31 December 2011,
the balance of this loan was Baht818 million.
During the last quarter of 2010, the Company has entered into, two unsecured loan
agreements 6-year and 8-year, amounting to Baht9,000 million in total with the group of
financial institutions. The loan carries interest at THBFIX plus 1.50 to 1.75% per annum
and is to be repaid within year 2019. However, during the current quarter, the Company
had restructured and had already paid in full.
In 2010, an overseas subsidiary has entered into loan agreements with four overseas
financial institutions to acquire EUR340 million loans. The loans carry interest at the
LIBOR plus 4.5 to 5.0% per annum, are to be repaid within 6 years and 7 years and
secured by the shares of MW Brands and its subsidiaries.
During the third quarter of 2011, the Company has entered into a 7-year loan
agreement amounting to Baht2,250 million with a local financial institution. The loan
carries interest at THBFIX per annum and is to be repaid in quarterly installments, the
first of which will be due in October 2013. The loan contains covenants relating to
various matters stipulated in the agreement. As at 31 December 2011, the balance of
this loan was Baht2,250 million.
21. Debentures
On 26 October 2005, a meeting of the Company’s Board of Directors approved the
issuance of debentures of the Company and/or its subsidiary companies in an amount
of up to Baht8,500 million or the equivalent of another currency, for the purposes of
refinancing debt and future expansion. Such debentures may be offered to the public
and/or institutional investors and/or local and/or foreign investors.
On 7 June 2007, the Company issued Baht3,200 million (3,200,000 units of debentures of
Baht1,000 each) of registered, unsubordinated, unsecured debentures with no trustee, with
interest rate at 3.91% per annum and the redemption in full is due in June 2011.
The Company already paid in full in June 2011.
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THAI UNION FROZEN PRODUCTS PCL.
On 12 November 2008, the Company issued the 2-year debentures of Baht1,500 million
(1,500,000 units of debentures of Baht1,000 each) of registered, unsubordinated,
unsecured debentures with no trustee, with interest rate at 4.7% per annum, which
redeemed on the maturity date in 2010 and the 5-year debentures of Baht500 million
(500,000 units of debentures of Baht1,000 each) of registered, unsubordinated, unsecured
debentures with no trustee, with interest rate at 5.5% per annum and the redemption is due
in 2013.
On 25 April 2011, the Annual General Meeting of Shareholders approved the increase
of credit limit for issuance of debentures of the Company and/or its subsidiaries in an
amount of up to Baht15,000 million or the equivalent in other currencies, for the
purpose of refinancing debt and future expansion. Such debentures may be offered to
the public and/or institutional investors and/or local and/or foreign investors.
On 27 July 2011, the Company issued three debentures the 3 to 10 year debentures of
Baht6,750 million (6,750,000 units of debentures of Baht1,000 each) of registered,
unsubordinated, unsecured debentures with no trustee, with interest rate at 4.51 to
5.02% per annum and the redemption is due in 2014, 2016 and 2021.
The debentures contain covenants relating to various matters such as the maintenance
of debt to shareholders’ equity ratio and interest cover ratio, and certain conditions in
issuance of debentures agreements, for example, annual dividend payment in the form
of cash exceeding 60 percent of net income of the year is prohibited, etc.
22. Convertible bond
On 2 September 2010, the Extraordinary General Meeting of Shareholders approved
the issuance non-secured convertible bond to specific investors (Private Placement) of
EUR 60 million. The bond has a tenor of 4 years and an annual coupon of 5% p.a. and
an overall yield of 8% p.a. unless converted into common shares. The bond can be
converted into common shares at any time after the first year at a conversion price of
Baht 56 per share. On 27 October 2010, the Company issued these convertible bond.
The convertible bond contains covenants relating to various matters.
According to the Thai Accounting Standard No. 107 “Financial Instruments: Disclosure
and Presentation”, the issuer of convertible bond is required to classify the bond’s
liability and equity components and present them separately from the owner’s equity in
the statements of financial position. However, the rate of interest payable in the future
on the convertible bond was the same as the market rate prevailing on the date of bond
issuance. The Company therefore recorded all the convertible bond as liabilities.
The liability component continues to be presented on an amortised cost basis, until
conversion to ordinary shares or maturity of the bond.
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THAI UNION FROZEN PRODUCTS PCL.
23. Provision for long-term employee benefits
The amount related to long-term employee benefits recognised in profit or loss and the
statements of financial position are summarised below.
(Unit: Thousand Baht)
2011
Consolidated
financial statements
Separate
Financial statements
Current service cost 85,501 16,958
Interest cost 61,351 7,782
Long-term employee benefit expenses
for the years 146,852 24,740
Defined benefit obligation 1,062,945 190,433
Fair value of plan assets (70,467) -
Provisions for long-term employee benefits 992,478 190,433
The changes in the present value of the defined benefit obligation are as follow:
(Unit: Thousand Baht)
2011
Consolidated
financial statements
Separate
financial statements
Defined benefit obligation at beginning of year 397,714 -
Cumulative effect of change in accounting policy
for employee benefits adjusted against
beginning balance of retained earnings (Note 5)
603,395 169,096
Current service cost 91,535 16,958
Interest cost 62,821 7,782
Benefits paid during the year (125,326) (3,403)
Actuarial losses 17,934 -
Translation adjustment 14,872 -
Defined benefit obligation at end of year 1,062,945 190,433
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THAI UNION FROZEN PRODUCTS PCL.
The change in the fair value of plan assets is as follows:
(Unit: Thousand Baht)
2011
Consolidated
financial statements
Separate
financial statements
Fair value of plan assets at beginning of year 115,292 -
Expected return on plan assets (8,851) -
Contributions 41,745 -
Benefits paid during the year (87,471) -
Actuarial losses 5,482 -
Translation adjustments 4,270 -
Fair value of plan assets at end of year 70,467 -
The major categories of plan assets as a percentage of total plan assets are as
follows:
2011
Consolidated
financial statements
Separate
financial statements
% %
Equity securities 64 -
Debt securities 36 -
Principal actuarial assumptions at the valuation date were as follows:
Consolidated financial statements Separate financial statements
2011 2010 2011 2010
(% per annum) (% per annum) (% per annum) (% per annum)
Discount rate 4.2 - 12.4 4.2 - 12.4 4.7 4.7
Future salary increase rate
(depending on age of employee) 3.0 - 10.0 3.0 - 10.0 3.5 - 10.0 3.5 - 10.0
Staff turnover rate 1.0 - 30.0 1.0 - 30.0 2.5 - 30.0 2.5 - 30.0
162 ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.
24. Income tax/deferred tax assets (liabilities)
Income tax expenses for the years ended 31 December 2011 and 2010 are made up
as follows:
(Unit: Million Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
Current income tax:
Current income tax charge 586 293 119 79
Translation adjustment 11 13 - -
Expense (income) in deferred income tax (405) 323 (9) (1)
Income tax expense reported in income statements 192 629 110 78
Reconciliation between tax expenses and the product of accounting profit multiplied by
the applicable tax rates for the year ended 31 December 2011 and 2010.
(Unit: Million Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
Accounting profit before corporate income tax 6,217 3,981 3,133 2,029
Applicable tax rate 10-35% 10-35% 30% 25-30%
Accounting profit before tax multiplied by
applicable tax rate 2,075 1,150 940 594
Tax adjust for prior year (2) (1) - -
Tax effect of intercompany transactions (345) 449 - -
Tax effect for:
investment promotion (Note 28) (1,310) (665) (481) (149)
tax-exempt incomes and non-deductible expenses (168) 2 (341) (366)
Increase in deferred tax assets (155) (693) (9) (1)
Increase in deferred tax liabilities 97 387 1 -
Corporate income tax in income statements 192 629 110 78
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THAI UNION FROZEN PRODUCTS PCL.
As at 31 December 2011 and 2010 the components of deferred tax assets and deferred
tax liabilities are as follows:
(Unit: Million Baht)
Consolidated
Separate
financial statements
financial statements
2011 2010 2011 2010
Deferred tax assets
Tax losses brought forward 566 157 - -
Tax effect of non-deductible expenses
Allowance for doubtful accounts 20 19 5 1
Allowance for devaluation in
the value of inventories 118 73 4 9
Assets value 13 9 13 9
Other allowance 21 2 - -
Provision for long-term employee benefit 49 - 5 -
Accrued liabilities 125 159 - -
Inventory cost capitalisation 142 79 - -
Others 9 1 8 -
Total 1,063 499 35 19
Deferred tax liabilities
Depreciation and amortisation 472 373 1 -
Intangible assets 3,853 3,749 - -
Prepaid expense 19 14 - -
Others reserves 207 149 - -
Other 367 356 - -
Total 4,918 4,641 1 -
The above deferred tax liabilities included the deferred tax liabilities of EUR 100 million
from the appraised value of fair value of intangible assets at acquisition date as
discussed in note 2.2.
In October 2011, the cabinet passed a resolution to reduce the corporate income tax
rate from 30 percent to 23 percent in 2012, and then to 20 percent from 2013.
In addition, in order to comply with the resolution of the cabinet, in December 2011, the
decreases in tax rates for 2012 - 2014 were enacted through a royal decree.
The Company reflected the changes in tax rates in its deferred tax calculation, as
presented above.
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THAI UNION FROZEN PRODUCTS PCL.
25. Share capital
On 2 September 2010, the Extraordinary General Meeting of Shareholders of the
Company approved the following resolutions relating to changes in the Company’s
registered share capital.
1) Approved the reduction of registered share capital of the Company from
Baht885,090,950 to Baht883,170,950.
2) Approved the increase of registered share capital of the Company from
Baht883,170,950 to Baht1,000,000,000.
The above reduction and increase of registered share capital were made for the
purposes of the acquisition of MW Brands, as described in Note 13. The Company
registered the reduction and increase in its registered share capital with the Ministry of
Commerce on 10 September 2010 and 13 September 2010, respectively.
Reconciliation of the number of issued and paid-up share capital
Unit: Shares
For the years ended 31 December
2011 2010
Number of ordinary shares at the beginning of year 956,329,407 883,170,950
Increase in the number of ordinary shares due to
share capital increase* - 73,158,457
Number of ordinary shares at the end of year 956,329,407 956,329,407
* The Company allocated the new 73,158,457 shares to the existing shareholders at
the ratio of 20 existing common shares to 1 newly issued shares. The shares were offer
at a price of Baht 50 per share, totaling 44,158,457 shares. In addition, the Company
allocated 29,000,000 shares through private placement at the subscription price of
Baht53 per share. The Company registered its additional shares with the Ministry of
Commerce on 27 October 2010 and the shares were first traded on Stock Exchange of
Thailand on 29 October 2010.
26. Statutory reserve
Pursuant to section 116 of the Public Limited Companies Act B.E. 2535, the Company
is required to set aside a statutory reserve at least 5% of its net income after deducting
accumulated deficit brought forward (if any) until the reserve reaches 10% of the
registered share capital. The statutory reserve is not available for dividend distribution.
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
27. Expenses by nature
Significant expenses by nature are as follow:
(Unit: Thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Salary and wages and other employee benefits 8,620,366 5,486,862 1,944,049 1,740,563
Depreciation 1,551,699 1,188,376 272,539 321,002
Amortisation expenses 64,475 30,575 473 394
Loss on impairment 34,681 - 29,772 -
Rental expenses under operating lease agreements 737,568 582,988 184,220 249,438
Raw materials, consumables used
and finished goods purchased 59,485,850 49,226,353 17,867,630 15,440,499
Changes in inventories of finished
goods and work in progress (2,056,615) (2,892,682) (409,086) 702,711
28. Promotional privileges
The Company has been granted promotional privileges by the Board of Investment to
carry on the activity of producing frozen seafood, processed and semi- processed food
and others. In addition, five subsidiaries were granted promotional privileges by the
Board of Investment to produce frozen seafood, processed and semi-processed food,
processed animal feeds and others. Subject to certain imposed conditions, the tax
privileges of the Company and these subsidiaries include the following:
- Exemption from corporate income tax on income from the promoted activities for a
period of 8 years, to the extent that the amount of tax exempted does not exceed
investment capital exclusive of land and working capital for manufacturing frozen
seafood and canned pet food and for a period of 8 years for semi-canned food and
frozen ready-meal commencing as from the date of first earning operating income.
In case that there are losses incurred during the corporate income tax exemption
period, the Company and its subsidiaries are allowed to utilise the losses as
a deduction against net income of future years after the expiry of the tax exemption
period but with a time limit of 5 years after that period.
- Exemption from income tax on dividend paid to the shareholders from the income of
the promoted operation during the corporate income tax exemption period.
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- Exemption from import duty on raw materials and essential materials imported for
use specifically in producing for export for a period of 1 year and/or 5 years as from
the date of first import.
- Exemption from import duty on items which the promoted person imports for
re-export for a period of 1 year and/or 5 years as from the date of first import.
- Five percent of any increment in export income over that of the preceding year is
deductible from taxable income for a period of ten years commencing as from the
date of first earning operating income, provided that the export sales of that year
are not lower than the average export sales of the past three years, except for the
first two years.
- Exemption from import duty on machinery as approved by the Board.
In addition, subsidiaries have been accorded the following additional privileges:
- A fifty percent reduction of corporate income tax on their net income, for a period of
5 years after the corporate income tax exemption expired.
- Permission to double deduct the costs of transportation, electricity and water supply
for corporate income tax purpose, for a period of 10 years, commencing as from the
date of first earning operating income.
- Permission to deduct twenty five percent of the cost of public utilities, in addition to
normal depreciation charges.
The Company’s operation revenues for the years are below shown divided according to
promoted and non-promoted activities.
2011 2010
(Unit: Thousand Baht)
B.O.I. Non - B.O.I. B.O.I. Non - B.O.I.
promoted promoted Total promoted promoted Total
Revenues
Sales
Local 2,784,983 775,403 3,560,386 1,930,745 1,025,087 2,955,832
Export 19,735,527 429,818 20,165,345 15,716,541 2,511,607 18,228,148
Other income 126,051 2,388,842 2,514,893 405,829 1,803,291 2,209,120
Total revenues 22,646,561 3,594,063 26,240,624 18,053,115 5,339,985 23,393,100
29. Earnings per share
Basic earnings per share is calculated by dividing profit for the year attributable to
equity holders of the Company (excluding other comprehensive income) by the
weighted average number of ordinary shares in issue during the year.
ANNUAL REPORT 2011
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THAI UNION FROZEN PRODUCTS PCL.
Diluted earnings per share is calculated by dividing profit for the year attributable to
equity holders of the Company (excluding other comprehensive income) by the
weighted average number of ordinary shares in issue during the year plus the weighted
average number of ordinary shares which would need to be issued to convert all
dilutive potential ordinary shares into ordinary shares. The calculation assumes that the
conversion took place either at the beginning of the year or on the date the potential
ordinary shares were issued.
For the year ended 31 December 2011
Weighted
Profit for the year average Earnings per share
Consolidated Separate number of Consolidated Separate
financial financial ordinary financial financial
statements statements shares statements statements
Million Baht Million Baht Million share Baht Baht
Basic earnings per share
Profit attributable to equity holders of the parent 5,075 3,023 956.3 5.30 3.16
Add: Interest expense from convertible bond
recognised during the year 90 90 -
Effect of dilutive potential ordinary shares - - 42.9
Diluted earnings per share
Profit of ordinary shareholders assuming
the conversion of warrants to ordinary shares 5,165 3,113 999.2 5.17 3.11
For the year ended 31 December 2010
Weighted
Profit for the year average Earnings per share
Consolidated Separate number of Consolidated Separate
financial financial ordinary financial financial
statements statements shares statements statements
Million Baht Million Baht Million share Baht Baht
Basic earnings per share
Profit attributable to equity holders of the parent 2,874 1,951 897.4 3.20 2.17
Add: Interest expense from convertible bond
recognised during the year 22 22 -
Effect of dilutive potential ordinary shares - - 7.8
Diluted earnings per share
Profit of ordinary shareholders assuming
the conversion of warrants to ordinary shares 2,896 1,973 905.2 3.19 2.17
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THAI UNION FROZEN PRODUCTS PCL.
30. Segment information
The operations of the Company and its subsidiaries principally involve the production,
distribution and export of frozen seafood products. Some overseas subsidiaries of
which the principal business activity is overseas investments. These activities are
carried out in Thailand and overseas. Their income comes from both local and export
sales. Below is the consolidated financial information for the years ended
31 December 2011 and 2010 of the Company and its subsidiaries by segment.
(Unit: Million Baht)
Frozen and canned
food products Other businesses Total Elimination Grand total
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Sales
- Local 4,571 3,704 11,221 10,532 15,792 14,236 (6,129) (4,893) 9,663 9,343
- Export 102,509 74,844 898 668 103,407 75,512 (14,400) (13,348) 89,007 62,164
Total sales 107,080 78,548 12,119 11,200 119,199 89,748 (20,529) (18,241) 98,670 71,507
Segment operating income 7,772 3,275 1,323 1,297 9,095 4,572 (646) 152 8,449 4,724
Unallocated income (expenses):
Interest income 10 5
Administrative expenses (54) (8)
Share of profit from investment in associated companies 84 24
Finance cost (2,272) (764)
Corporate income tax (192) (629)
Profit attributable to non-controlling interests of the subsidiaries (950) (478)
Profit attributable to equity holders of the company 5,075 2,874
Financial information of the Company and its subsidiaries presented by geographical
segment for the years ended 31 December 2011 and 2010 is as follows:
(Unit: Million Baht)
Thailand Overseas Total Elimination Grand total
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Sales
- Frozen and canned
food products 51,330 44,430 55,750 34,118 107,080 78,548 (18,433) (16,278) 88,647 62,270
- Other businesses 12,119 11,200 - - 12,119 11,200 (2,096) (1,963) 10,023 9,237
Total sales 63,449 55,630 55,750 34,118 119,199 89,748 (20,529) (18,241) 98,670 71,507
Segment operating income 8,449 4,724
Property, plant and equipment 9,248 9,562 6,219 4,592 15,467 14,154 188 36 15,655 14,190
Unallocated assets 67,575 60,587
Total assets 83,230 74,777
Transfer prices between the Company and its subsidiaries are as set out in Note 10.
ANNUAL REPORT 2011
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31. Provident fund
The Company, the local subsidiaries and their employees have jointly established provident
funds under the Provident Fund Act B.E. 2530. The funds are contributed to on a monthly
basis, by the employees at rates ranging from 2 to 5 percent of the basic salaries, and by
the Company and its local subsidiaries at rates ranging from 2 to 10 percent, based on the
length of employment. The Company’s fund is managed by MFC Asset Management Pcl.
and the local subsidiaries’ fund is managed by American International Assurance Co., Ltd.
and TISCO Asset Management Co., Ltd.
During the year 2011, the Company and its local subsidiaries contributed approximately
Baht45 million (2010: Baht42 million) to the fund
32. Provision for changes in the value of pension fund
An overseas subsidiary has established a pension fund under which it matches
participants’ contributions under these plans at a rate of 50 percent of an employee’s
contribution up to a maximum of 6 percent of eligible compensation. The overseas
subsidiary contributed USD0.4 million to the fund in the year 2011 (2010: USD0.4 million).
33. Dividends
(Unit: Million Baht)
Dividend
Dividends Approved by Total dividends per share
(Baht per share)
Final dividends for 2009 Annual General Meeting of the
shareholders on 22 March 2010 883 1.00
Interim dividends for 2010 Board of Directors’ meeting on
4 August 2010 883 1.00
Interim dividends for 2010 Board of Directors’ meeting on
30 September 2010 230 0.26
Total dividends for 2010 1,996
Interim dividends for 2011 Annual General Meeting of the
shareholders on 25 April 2011 325 0.34
Interim dividends for 2011 Board of Directors’ meeting on
5 August 2011 870 0.91
Total dividends for 2011 1,195
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34. Commitments and contingent liabilities
34.1 Commitments
As at 31 December 2011, the Company and its subsidiaries have the following
commitments:
a) The Company and its subsidiaries have the commitments under the following
agreements:
Payable within
Less than 1 year 1 to 5 years More than 5 years Total
Office rental and service agreements Baht 52 million Baht 57 million Baht 9 million Baht 118 million
EUR 1 million EUR 2 million - EUR 3 million
Land lease agreements - Baht 3 million Baht 3 million Baht 6 million
USD 3 million USD 9 million USD 3 million USD 15 million
- EUR 1 million EUR 1 million EUR 2 million
Car lease agreements Baht 5 million Baht 4 million - Baht 9 million
EUR 1 million - - EUR 1 million
Machine lease agreements Baht 2 million Baht 4 million - Baht 6 million
- USD 1 million - USD 1 million
Computer & copy machine lease
Agreements Baht 39 million Baht 66 million - Baht 105 million
Warehouse and factory
construction agreements Baht 65 million - - Baht 65 million
Purchase machinery, equipment
and vehicle agreements Baht 58 million - - Baht 58 million
Advertising agreements Baht 9 million - - Baht 9 million
Communication agreements Baht 1 million Baht 1 million - Baht 2 million
Advisory agreements Baht 14 million - - Baht 14 million
Marketing and management
service agreements Baht 1 million - - Baht 1 million
Internet network service agreements Baht 3 million Baht 7 million - Baht 10 million
b) The Company and its subsidiaries are committed to pay the uncalled portions of
their investments as follows:
Amount
The local subsidiary Baht 51.0 million
The overseas subsidiary USD 1.9 million
The overseas associates USD 2.3 million
c) The overseas subsidiary has agreed to make payments under royalty agreements
for the use of certain production machinery and equipment. The agreements require
fixed payments plus an additional sum based on output. Total payments made
under these arrangement for the year ended 2011 amounting to USD1 million
(2010: USD1 million).
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d) The Office of the Attorney General of a US state filed a lawsuit against the three
largest canned tuna companies in the US, including TUI, for failure to warn
consumers that certain tuna contains mercury. Such case was dismissed on
8 January 2007. However, the plaintiff filed a notice of appeal and the appeal was
granted on 19 August 2008. TUI filed a petition for an en banc appeal, which was
denied. On 13 January 2009, TUI filed a petition with the Supreme Court, which the
Court has declined to hear. Each party has subsequently filed motions and are
currently awaiting the Judge’s rulings. TUI is unable to predict the probable
outcome of this matter. As such, TUI has no accrual related to this matter as of
31 December 2011.
34.2 Guarantees
a) As at 31 December 2011, there were outstanding bank guarantees of approximately
Baht54 million and USD4 million (2010: Baht58 million and USD5 million) issued by
banks on behalf of the Company in respect of certain performance bonds as required in
the normal course of business.
b) As at 31 December 2011, there were outstanding bank guarantees of approximately
Baht92 million (2010: Baht103 million) issued by banks on behalf of the subsidiaries in
respect of certain performance bonds as required in the normal course of business.
35. Financial instruments
35.1 Financial risk management
The Company and its subsidiaries’ financial instruments, as defined under Thai Accounting
Standard No. 107 “Financial Instruments: Disclosure and Presentations”, principally
comprise cash and cash equivalents, restricted deposits with financial institutions, trade
accounts receivable, loans, investments, accounts payable, short-term loans, long-term
loans, debentures and convertible bond. The financial risks associated with these financial
instruments and how they are managed are described below.
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Credit risk
The Company and its subsidiaries are exposed to credit risk primarily with respect to
trade accounts receivable and loans. The Company and its subsidiaries manage the
risk by adopting appropriate credit control policies and procedures and therefore do not
expect to incur material financial losses. The maximum exposure to credit risk is limited
to the carrying amounts of receivables and loans as stated in the statement of financial
position.
Interest rate risk
The Company and its subsidiaries’ exposure to interest rate risk relates primarily to its
deposits at financial institutions, bank overdrafts, short-term borrowings, long-term
borrowings, debentures and convertible bond. However, since most of the Company
and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed
interest rates which are close to the market rate, including the Company and its
subsidiaries had entered into interest rate swap agreements. The interest rate risk is
expected to be minimal.
Significant financial assets and liabilities as at 31 December 2011 classified by type of
interest rates are summarised in the table below, with those financial assets and
liabilities that carry fixed interest rates further classified based on the maturity date, or
the repricing date if this occurs before the maturity date.
Consolidated financial statements as at 31 December 2011
Fixed interest rates
Within Over Floating Non- interest
1 year 1-5 years 5 years interest rate bearing Total Interest rate
(Million Baht)
(% p.a.)
Financial assets
Cash and cash equivalents - - - 543 360 903 0.17 - 1.93
Trade and other receivables - - - - 11,161 11,161 -
Restricted deposits with financial
institutions - - - 12 - 12 0.62
Long-term loans to other companies 4 12 13 - - 29 3.00 - 3.75
4 12 13 555 11,521 12,105
Financial liabilities
Bank overdrafts and short-term loans
from financial institutions 7,673 - - 6,804 - 14,477 2.43 - 4.70
Trade and other payables - - - - 7,919 7,919 -
Long-term loans 10 - 9 15,580 - 15,599 3.69 - 5.00
Debentures - 5,733 1,495 - - 7,228 4.69
Convertible bond - 2,462 - - - 2,462 5.00
7,683 8,195 1,504 22,384 7,919 47,685
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Separate financial statements as at 31 December 2011
Fixed interest rates
Within Over Floating Non- interest
1 year 1-5 years 5 years interest rate bearing Total Interest rate
(Million Baht)
(% p.a.)
Financial assets
Cash and cash equivalents - - - 30 26 56 0.17
Trade and other receivables - - - - 4,088 4,088 -
Short-term loans to subsidiaries 80 - - - - 80 3.05
Long-term loans to subsidiaries 440 - 15,207 1,801 - 17,448 0.48 - 6.25
520 - 15,207 1,831 4,114 21,672
Financial liabilities
Bank overdrafts and short-term loans
from financial institutions 3,554 - - - - 3,554 3.24
Trade and other payables - - - - 1,372 1,372 -
Long-term loans - - - 2,250 - 2,250 3.91
Debentures - 5,733 1,495 - - 7,228 4.69
Convertible bond - 2,462 - - - 2,462 5.00
3,554 8,195 1,495 2,250 1,372 16,866
The Company and its subsidiaries entered into interest rate swap agreements to
manage risk associated with the financial liabilities carrying floating interest. The details
of short-term loans from financial institutions and long-term loans are set out in
Notes 19 and 20. The detail of the interest rate swap agreement outstanding as at
31 December 2011 is as follows:
The Company
Principal amount
Interest Revenue Rate Swap Interest Expense Rate
agreements
Swap agreements
Terminal date
1 Baht2,040 million Float rate 3-month
Fixed rate 4.522% October 2016
(first 2 years)
Baht170-1,700
million (remaining
4 years)
THBFIX-Reuters plus
1.50% (first 2 years)
Float rate 3-month
THBFIX-Reuters plus
1.75% (remaining 4 years)
2 Baht510 million Float rate 3-month
Fixed rate 4.48% October 2016
(first 2 years)
Baht42.5-425
million (remaining
4 years)
THBFIX-Reuters plus
1.50% (first 2 years)
Float rate 3-month
THBFIX-Reuters plus
1.75% (remaining 4 years)
3 Baht500 million Float rate 3-month THBFIX- Fixed rate 3.39% August 2015
Reuters
4 Baht500 million Float rate 6-month THBFIX Fixed rate 3.50% August 2015
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Subsidiaries
Principal
amount
Interest Revenue Rate Swap
agreements
Interest Expense Rate
Swap agreements
Terminal date
1 EUR94 million Float rate 3-month EURIBOR Fixed rate 2.70 % October 2017
2 EUR132 million Float rate 3-month EURIBOR Fixed rate 2.73 % October 2017
3 USD40 million Float rate 3-month LIBOR Fixed rate 1.85 - 2.55% February 2016
4 USD40 million Float rate 3-month LIBOR Fixed rate 1.85 - 2.55% February 2016
Cross currency and interest rate swap agreements
The Company
Currency and Interest Revenue Rate Swap
agreements
Currency and Interest Expense Rate
Swap agreements
Terminal date
Principal amount Interest rate Principal amount Interest rate
1* Baht397.8 million Float rate 3-month USD 12 million Fixed rate 4.4086% July 2012
THBFIX
2 Baht1,134 million Float rate 3-month USD 35 million Float rate 3-month July 2013
THBFIX - Reuters
LIBOR-BBA plus
0.665%
3 Baht674 million Float rate 3-month USD 22 million Float rate 3-month June 2014
THBFIX plus 2.31%
LIBOR plus 3.00%
* No initial exchange
Subsidiaries
Currency and Interest Revenue Rate Swap
agreements
Currency and Interest Expense Rate
Swap agreements
Terminal date
Principal amount Interest rate Principal amount Interest rate
1 Baht976 million Float rate 3-month
THBFIX plus 2.94%
USD 32 million Fixed rate 5.65% March 2015
Foreign currency risk
The Company and its subsidiaries’ exposure to foreign currency risk arises mainly from
trading transactions and borrowings that are denominated in foreign currencies.
The Company and its subsidiaries seek to reduce this risk by entering into forward
exchange contracts when it considers appropriate.
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The balances of financial assets and liabilities denominated in foreign currencies of
the Company and its subsidiaries as at 31 December 2011 are summarised below.
Financial Financial Average exchange rate
Foreign currency assets liabilities as at 31 December 2011
(Million) (Million) (Baht per 1 foreign currency unit)
USD 308 17 31.64
JPY 83 91 0.41
EUR 376 60 40.97
Foreign exchange contracts outstanding as at 31 December 2011 are summarised
below.
Bought Sold Contractual exchange rate
Foreign currency amount amount Bought Sold Contractual maturity date
(Million)
(Million)
The Company
USD against Baht - 213 - 29.89 - 43.00 January 2012 - December 2014
JPY against Baht - 107 - 0.41 April 2012 - June 2012
EUR against Baht 1 320 41.29 - 41.93 39.10 - 44.66 January 2012 - December 2014
Subsidiaries
USD against Baht - 164 - 30.26 - 32.13 January 2012 - January 2013
USD against GBP 4 - 1.58 - December 2012
USD against EUR 3 - 1.45 - January - March 2012
EUR against GBP 9 - 0.84 - January - December 2012
As at 31 December 2011, the Company and its local subsidiaries have outstanding
option agreements with special conditions with financial institutions under which they
have obligations to sell amounts of between USD30 million up to USD67 million,
depending on conditions stipulated in the agreements, at rates ranging from Baht 30.25
to Baht31.70 per USD. These agreements will terminate within September 2012.
Moreover, as at 31 December 2011, the overseas subsidiaries have outstanding option
agreements as follow.
Bought Sold Contractual exchange rate Contractual
Foreign currency amount amount Bought Sold maturity date
(Million) (Million)
EUR against USD 18.6 26.8 1.4435 1.4435 December 2012
GBP against USD 24.2 40.0 1.6500 1.6500 December 2012
EUR against GBP 34.0 41.8 0.8125 0.8125 December 2012
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35.2 Fair values of financial instruments
Since the majority of the Company and its subsidiaries’ financial instruments bear
floating interest rates, their fair value is not expected to be materially different from the
amounts presented in the statement of financial position.
A fair value is the amount for which an asset can be exchanged or a liability settled
between knowledgeable, willing parties in an arm’s length transaction. The fair value is
determined by reference to the market price of the financial instrument or by using an
appropriate valuation technique, depending on the nature of the instrument.
36. Capital management
The primary objective of the Company’s capital management is to ensure that it has an
appropriate financial structure in order to support its business and maximise
shareholder value. As at 31 December 2011, the Group’s debt to equity ratio was
2.07:1 (2010: 2.22:1) and the Company’s was 1.12:1 (2010: 1.33:1).
37. Subsequent events
On 11 February 2012, there was a fire incident in one section of the Company’s plant
located in Samutsakorn province, which has no effect to other production lines.
The Company is currently estimating the resultant damage. However, the Company
has comprehensive insurance coverage for damage to inventories and assets as well
as business interruption insurance. The financial impact of the incident will be reflected
in 2012 accounts. In addition, the Company has a plan to reallocate some its
production lines to group companies and can thus assure that its production capacity is
adequate to meet all customer orders both in terms of production and delivery.
The meeting of the Company's Board of Directors No. 1/2012, held on 21 February 2012,
passed the resolution to approve dividend payment of Baht0.65 per share from its
income for the period from 1 July 2011 to 31 December 2011, to the Company's
shareholders totaling Baht622 million. The dividend will be paid on 4 April 2012.
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38. Reclassification
To comply with the Notification of the Department of Business Development relating to
the financial statement presentation as described in Note 2 and as the result of the
adoption of revised and new accounting standards as described in Note 3 and Note 5,
certain amounts in the financial statements for the year ended 31 December 2010 have
been reclassified to the current year’s classification, without any effect to the previously
reported profit or shareholders equity. The reclassification are as follow:
(Unit: Thousand Baht)
Consolidated
financial statements
As As previously
reclassified reported
Separate
financial statements
As As previously
reclassified reported
Trade and other receivables 9,261,820 - 3,066,632 -
Trade accounts receivable -net - 9,217,858 - 2,882,937
Inventories 21,346,118 20,934,454 2,423,326 2,403,645
Prepaid income tax 286,324 543,165 28,163 28,163
Prepaid expense - 164,410 - 23,443
Spare parts - 448,702 - 20,158
Interest receivables - 565 - 175,072
Advance payment - 26,444 - 245
Other current assets 739,834 339,436 51,495 35,962
Property ,plant and equipment - net 14,190,173 14,092,179 3,004,742 2,947,676
Properties foreclosed - net - 57,057 - 57,057
Goodwill 11,396,143 - - -
Intangible assets 13,027,293 24,423,435 1,509 1,509
Trade and other payables 7,194,757 - 1,297,505 -
Trade accounts payable - 5,909,630 - 939,613
Accrued expenses - 1,104,632 - 287,280
Accounts payable - construction and
asset purchase - 180,495 - 70,612
Billback - 162,793 - -
Other current liabilities 1,479,031 1,316,238 265,745 265,745
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(Unit: Thousand Baht)
Consolidated
financial statements
As As previously
reclassified reported
Separate
financial statements
As As previously
reclassified reported
Revaluation deficit on change in value of
investments - (18,112) - -
Provision for change in the value of
pension fund - (27,664) - -
Other reserve - 5,941 - -
Translation adjustment - (47,640) - -
Other components of shareholders’ equity (87,475) - - -
Compensation from accounts payable - 61,085 - 59,049
Tax coupon received - 104,931 - 22,436
Other income 489,528 323,512 197,178 115,693
Administrative expenses 2,224,377 2,162,497 502,777 444,861
Management benefits expenses - 56,383 - 56,383
Other expenses - 5,497 - 1,533
39. Approval of financial statements
These financial statements were authorised for issue by the Audit Committee and the
Company’s management on 21 February 2012.
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