Form 56-1 One Report: A Deep Dive into Its Structure and Importance for Investors

Form 56-1 One Report is an annual report that publicly listed companies on the Thai stock exchange are required to prepare and submit to the Securities and Exchange Commission (SEC) of Thailand. It consolidates key information related to finance, corporate governance, and sustainability (ESG) into a single report to enhance transparency, reduce reporting burdens, and help investors more comprehensively and effectively assess a company’s value and potential.

Meaning and Importance of Form 56-1 One Report

The Form 56-1 One Report is an annual report that all listed companies on the Stock Exchange of Thailand are required to prepare and submit to the Securities and Exchange Commission (SEC) within three months after the end of their fiscal year. This report consolidates key information that helps investors understand a company’s overall business landscape and strategic direction. It includes details on business operations, risk and opportunity analysis, performance results, financial position, and sustainability information (ESG).

The SEC and the Stock Exchange mandate submission of the Form 56-1 One Report to promote transparency in corporate operations and ensure that investors have access to comprehensive information for making informed decisions. It also supports good corporate governance by requiring companies to disclose sustainability-related operations, reflecting their consideration for various stakeholders and their long-term growth potential.

The benefits of the Form 56-1 One Report for investors and stakeholders include:

1. Comprehensive information in a single report: Investors can access key financial, governance, and sustainability data all in one place.
2. Insight into business direction: The report not only reflects past performance but also outlines the company’s forward-looking vision, helping investors understand competitive trends, risk factors, and future opportunities.
3. Assessment of sustainability: ESG data allows investors to evaluate a company’s responsibility, credibility, competitiveness, and long-term growth prospects.
4. Investment value analysis: The report provides the information needed for investors to assess investment value and construct appropriate investment portfolios.
5. Transparency and credibility: Full disclosure enhances the transparency and credibility of the company in the eyes of investors and stakeholders.

In summary, the Form 56-1 One Report is a vital tool for bridging the information gap between companies and investors. It promotes informed investment decisions and supports the development of an efficient and internationally credible Thai capital market.

Structure of the Report

The Form 56-1 One Report consists of four main sections as follows:

1. Business Operations and Performance

• Structure and operations of the group of companies
• Risk management
• Business sustainability initiatives
• Management Discussion and Analysis (MD&A)
• General and other key information

This section provides an overview of the company’s operations, strategies, risks, and performance results.

2. Corporate Governance

• Corporate governance policies
• Governance structure and key information about the board of directors, subcommittees, executives, employees, and others
• Key corporate governance performance reports
• Internal controls and intercompany transactions

This section demonstrates good corporate governance and transparency in business operations.

3. Financial Statements

• Board of Directors’ responsibility statement for financial reports
• Auditor’s report
• Financial statements and accompanying notes

This section presents the company’s financial position and performance, as audited by certified public accountants.

4. Information Accuracy Certification

• Certification of information accuracy by executive directors or the highest-ranking accounting officers

This section reflects the accountability of executives for the accuracy of disclosed information.

In addition, the Form 56-1 One Report incorporates ESG (Environmental, Social, and Governance) information, highlighting sustainable business practices across environmental, social, and corporate governance aspects.

Preparing the report in this format enables investors and stakeholders to access comprehensive and structured information, allowing them to effectively evaluate the company’s performance, risks, and growth potential.

Criteria and Requirements for Preparation

The Office of the Securities and Exchange Commission (SEC) has prepared a manual for the Form 56-1 One Report to serve as a guideline for listed companies to ensure accurate and complete information disclosure. This manual includes the requirements of the Form 56-1 One Report, explanations, practical guidance, and examples. The key principle is the disclosure of material information that is accurate, sufficient for investor decision-making, and free from any misleading content.

Disclosure Requirements and Related Standards

The main requirements for information disclosure are as follows:

1. Accuracy and Reliability: Information must be based on factual accuracy, and analysis must be conducted on a reasonable basis.
2. Conciseness and Clarity: Information should be presented concisely, without redundancy, and in a language that is easy to understand.
3. Completeness and Timeliness: Disclosure must include material information that may significantly affect investor decision-making and must reflect the current status and up-to-date data.
4. Verification of Accuracy: Directors and executives are jointly responsible for the accuracy of the disclosed information.
5. Financial Reporting Standards: Financial statements must be prepared in accordance with financial reporting standards endorsed by the Federation of Accounting Professions.

Timeline and Procedures for Submitting the Report

Listed companies must submit the Form 56-1 One Report to the SEC within three months from the end of the accounting period. The main procedures are as follows:

1. Data Preparation: The company must compile and prepare information according to the prescribed structure.
2. Internal Review: The information must undergo internal verification to ensure accuracy.
3. Board Approval: The company's board of directors must review and approve the information before disclosure.
4. Submission and Publication: The company must submit the Form 56-1 One Report through the SETLink system of the Stock Exchange of Thailand.
5. Public Disclosure: After approval, the information will be published on the websites of the SEC and the Stock Exchange of Thailand.

Compliance with these guidelines and requirements enables listed companies to efficiently prepare and submit the Form 56-1 One Report in alignment with the objective of transparent and accurate information disclosure to investors and the public.

Preparation Procedures and Involved Agencies

The preparation of the Form 56-1 One Report requires collaboration among various internal departments as well as coordination with external parties. The details are as follows:

Internal Departments

The preparation of the Form 56-1 One Report depends on data from several internal departments, each playing a crucial role:

• Accounting and Finance Department: Responsible for preparing the financial statements, Management Discussion and Analysis (MD&A), and key financial information.
• Legal Department: Ensures that disclosures comply with relevant regulations and verifies the accuracy of legal information.
• Company Secretary: Coordinates between departments and compiles corporate governance information.
• Investor Relations Department: Provides information on shareholders and dividend policies.
• Human Resources Department: Supplies data on organizational structure, employee headcount, and personnel development policies.
• Risk Management Department: Offers insights on the organization's risk management practices.
• Sustainability Development Department: Responsible for ESG (Environmental, Social, and Governance) data and sustainability-related operations.

Coordination with External Auditors and Consultants

The preparation process also involves working with external parties, including:

• Auditors: Review and certify the financial statements and provide opinions on internal control systems.
• Legal Advisors: Offer guidance on compliance with legal disclosure requirements and related regulations.
• Financial Advisors: Assist in analyzing and presenting complex financial data.
• Sustainability Consultants: Advise on ESG reporting and the development of sustainability strategies.

Systems and Tools Used for Data Collection

Efficient systems and tools are necessary for compiling the data required for the Form 56-1 One Report. These may include:

• Enterprise Resource Planning (ERP) Systems: Used to gather and process financial and operational data.
• Document Management Systems: Help organize and retrieve relevant documentation.
• Data Analytics Software: Used to analyze and present data in an accessible format.
• SETLink System: Employed to submit and publish the Form 56-1 One Report to the Stock Exchange of Thailand.

To ensure timely and high-quality submission, companies must develop a clear plan and timeline for the process—from data collection and verification, through board approval, to final submission and public disclosure. This structured approach helps meet deadlines and regulatory expectations.

Utilization of Information for Listed Company Analysis

The 56-1 One Report is a key information source that enables investors to comprehensively analyze and assess listed companies. It offers multiple benefits to investors, including the following:

Using Information in the 56-1 One Report for Stock Analysis

Investors can utilize the data from the 56-1 One Report to analyze stocks from various perspectives:

• Fundamental Analysis: Leverage financial data and operational performance to assess the financial health of a company. This includes analyzing financial ratios and evaluating trends in revenue and profit.
• Valuation Assessment: Use financial data and future earnings projections to calculate the fair value of a stock, employing methods such as Discounted Cash Flow (DCF) or Price-to-Earnings Ratio (P/E Ratio).
• Risk Analysis: Study risk factors and the company’s risk management practices to evaluate investment risks.
• Comparative Analysis: Compare performance and financial ratios with other companies in the same industry.

Key Indicators Investors Commonly Focus On

Investors often pay attention to several important indicators found in the 56-1 One Report, such as:

• Revenue and profit growth rate
• Gross margin and net profit margin
• Return on Equity (ROE)
• Debt-to-Equity Ratio (D/E Ratio)
• Current Ratio
• Cash flow from operations
• Market share and industry growth

The report also includes ESG (Environmental, Social, and Governance) indicators such as greenhouse gas emissions, energy and water consumption, and employee turnover rate.

Qualitative Information: Corporate Strategy, Business Direction, and Management Perspective

Qualitative data in the 56-1 One Report is as important as quantitative figures. Investors can benefit from this information in the following ways:

• Corporate Strategy: Understand the company’s long-term direction and business plans, and evaluate their alignment with the business environment and industry trends.
• Business Direction: Analyze growth opportunities and challenges the company may face, including plans to adapt to technological changes and evolving consumer behavior.
• Management Perspective: Gain insights into the vision and mindset of top executives, which reflects their capability to lead the company toward its goals.
• ESG Information: Assess the company’s commitment and actions toward sustainability, which impacts its long-term competitiveness and growth potential.

Analyzing this qualitative data helps investors evaluate a company’s potential and competitiveness in a more comprehensive manner, beyond just financial figures.

In Conclusion, the 56-1 One Report is a crucial tool that enables investors to conduct effective investment analysis and decision-making. It provides comprehensive data covering financials, operations, and sustainability—key elements in assessing a company’s value and long-term potential.

Sample Report of a Listed Company

Sample Reports 

PTT Public Company Limited (PTT) serves as a strong example of a well-prepared Form 56-1 One Report in the energy sector. The report comprehensively presents financial information, corporate governance, and sustainability practices. It utilizes graphics and diagrams to enhance clarity and readability, and clearly aligns the company’s business strategy with the Sustainable Development Goals (SDGs).

Comparison of Best Practices

The following are recognized best practices for preparing a Form 56-1 One Report:

1. Comprehensive and Transparent Disclosure: Companies should provide honest and balanced information, covering both positive and negative aspects.
2. Use of Clear, Understandable Language: Avoid overly complex technical jargon.
3. Incorporation of Graphics and Visual Aids: Helps make the information easier to grasp and more engaging.
4. Linkage of Information to Long-term Strategy and Goals: Demonstrates the company’s vision and strategic direction.
5. Complete ESG Reporting: Reflects a strong commitment to sustainability.

Lessons from Errors or Regulatory Penalties Related to Incomplete Disclosure

Common mistakes found in preparing Form 56-1 One Reports include:

1. Incorrect Data Classification: For instance, recording expenses under assets or recording liabilities as revenue.
2. Failure to Verify Data Accuracy: Can result in inaccurate or incomplete disclosures.
3. Neglecting Asset Impairment Costs: Overlooking depreciation can lead to overstated asset values in financial statements.
4. Inaccurate Liability Valuation: Can paint an overly optimistic picture of the company’s financial health.
5. Failure to Update Financial Statements According to Revised Accounting Standards: This may render the reports non-compliant and unreliable.

Companies that fail to disclose information accurately or completely may face penalties from the Securities and Exchange Commission (SEC), including fines, required corrections, or— in severe cases— delisting from the stock exchange. Studying these incidents helps other companies recognize the importance of producing careful and accurate reports.

The Stock Exchange of Thailand has compiled over 800 examples of Form 56-1 One Reports from listed companies. Investors can study these reports to compare and learn best practices. Reviewing these examples and case studies can help both listed companies and investors better understand the significance and effective utilization of the Form 56-1 One Report.

Latest Regulatory and Requirement Updates

The process of preparing and disclosing the 56-1 One Report continues to evolve in response to investor demands and international standards. Key emerging trends include:

Changes in Regulations and Requirements

The Securities and Exchange Commission (SEC) has continuously revised reporting regulations. Most recently, updates have been made to the reporting requirements for IPO share sales to ensure investors receive more comprehensive, transparent, and timely information. Furthermore, there is a growing trend toward stricter disclosure of ESG-related information, particularly regarding climate change and human rights.

The Role of Technology

Technology plays a crucial role in advancing the preparation and dissemination of the 56-1 One Report:

• Use of XBRL (eXtensible Business Reporting Language): The Department of Business Development has implemented the DBD e-Filing system for submitting financial statements electronically, applying the XBRL technology—an international standard for business reporting. This enhances the efficiency of data storage, analysis, and dissemination.
• Digital Platforms: There is a trend toward developing digital platforms for the preparation and publication of the 56-1 One Report. These platforms will allow companies to update information in real-time, while investors will benefit from easier access to current data.
• Big Data Analytics: This technology enables the analysis of large volumes of data from the 56-1 One Report to uncover trends and insights that are valuable to investors and regulators.

Direction of Thailand’s Capital Market and International Disclosure Standards

Thailand’s capital market is increasingly aligning with international standards, moving in the following directions:

• Emphasis on ESG Information: The Stock Exchange of Thailand has updated its rules on shareholder disclosure, requiring listed companies to disclose shareholders with holdings of at least 0.5% of paid-up capital. This reflects a push for greater transparency and good corporate governance.
• Adoption of International Financial Reporting Standards (IFRS): There is a growing likelihood of full adoption of IFRS in the future, to ensure Thai companies’ financial statements are globally recognized.
• Integrated Reporting: There is a movement to encourage listed companies to adopt integrated reporting, which combines financial and non-financial data. This approach gives investors a clearer picture of the company’s long-term value creation.
• Increased Reporting Frequency: Consideration may be given to requiring certain information to be reported quarterly or even monthly, to ensure the timeliness of disclosures.

These trends reflect ongoing efforts to enhance the quality and effectiveness of disclosure practices in Thailand’s capital market, aiming to bolster its credibility and global competitiveness. However, such changes may pose challenges for listed companies, requiring adjustments and investments in systems and personnel to meet the emerging standards.

Summary of Key Contents of the Report

The Form 56-1 One Report is a vital tool that enables investors to gain a comprehensive understanding of a listed company’s business operations. It consolidates key information related to financial performance, corporate governance, and sustainability into a single report. This integration helps reduce the risk of information asymmetry between institutional and retail investors and reflects the company’s adherence to good governance principles.

When monitoring a company's financial data, investors should focus on analyzing trends and making comparisons with other companies within the same industry. Key metrics to consider include revenue and profit growth rates, gross profit margin, return on equity (ROE), and the debt-to-equity (D/E) ratio. Additionally, qualitative aspects such as business strategies and management’s outlook on industry trends can offer insights into a company’s future opportunities and challenges.

For novice investors, reading and analyzing the Form 56-1 One Report should begin with understanding its structure and focusing on critical sections, such as the financial highlights, Management Discussion and Analysis (MD&A), and risk information. It is essential to approach the report critically, asking questions and seeking supplemental information from other sources, such as industry news and analyst reports. Reviewing at least three years of historical data can also help investors identify performance trends more clearly.

Effectively utilizing the Form 56-1 One Report allows investors to thoroughly assess a company’s value and potential, leading to more informed investment decisions aligned with their individual goals.

Sources and References

For those interested in further studying the Form 56-1 One Report, the following sources offer useful information:

1. The website of the Office of the Securities and Exchange Commission (SEC) of Thailand at www.sec.or.th serves as a primary source, providing regulations, announcements, and guidelines related to the preparation of the Form 56-1 One Report.
2. The Form 56-1 One Report Preparation Manual, published by the SEC, offers detailed guidance on how to prepare the report, including examples of disclosures under various sections.
3. Sample Form 56-1 One Reports from leading listed companies, such as PTT Public Company Limited and PTG Energy Public Company Limited, which can be downloaded from the companies' websites.
4. The SET Investnow website, operated by the Stock Exchange of Thailand (SET), features educational articles for investors on how to read and analyze the Form 56-1 One Report.
5. The SETLink system from the SET, which is the channel through which listed companies submit and disclose their Form 56-1 One Reports.
6. The SEC Check First website, operated by the SEC, which allows users to search for information on companies and individuals under the SEC's supervision.

Studying these resources will help both listed companies and investors better understand the importance, preparation process, and practical uses of the Form 56-1 One Report. Additionally, it is advisable to regularly follow updates to regulations and guidelines from the SEC and the SET to stay current with changes in corporate disclosure practices in Thailand.

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