Part 1

Executive Summary

Khon Kaen Sugar Industry Public Co., Ltd. was established in 1976 with
the registered capital of THB 1,705 million and the paid-up capital of
THB 1,550 million. The Company engages in sugar manufacturing and
develops business relating to sugar production. In 2005 the Company
undertook an initial public offering and was listed in the Stock
Exchange of Thailand as “KSL”. Since then, the Company has changed the
vision, from being a traditional sugar manufacturer to a renewable
energy producer. The company had realized the promising growing demand
for renewable energy. Such vision is derived from the fact that
corporate products are energy sources. Sugar provides energy for humans.
Ethanol fuels automobiles. Bio fertilizer nurtures plants. Electricity
from burning biomass like bagasses (cane fiber) is an energy driving
equipment and machinery. According to its vision, KSL has continuously
invested in renewable energy businesses as well as planned to expand
them. In 2005, corporate main earnings were from the operation of the
company’s four sugar mills located in different regions of Thailand. In
2006, the Company’s Ethanol plant at Khon Kaen province achieved a
production capacity of 150,000 litres per day, using molasses and cane
juice as raw material. Bio fertilizer plant utilizes wastewater from
ethanol production and filter cake from sugar mill as raw materials. In
fiscal year 2007, KSL commenced the operation of its 30-MW power plant
in Khon Kaen province, which utilizes bagasse, cane fiber from sugar
production. The electricity produced has been sold to Electricity
Generating Authority of Thailand. In addition, in 2007, under Kyoto
Protocol, the company’s power plant has been registered by CDM Executive
Board, having the right to sell CDM or so-called Carbon Credit. It is
expected that the Company will begin to realize its income from carbon
credit sale in 2010.

In 2010, the following projects that KSL has invested in will be
completed and ready for commercial operations:

(1) Sugarcane plantation and sugar production in Laos: KSL established
Savannakhet Sugar Corporation, in which it holds 97% of the shares. This
subsidiary engages in sugarcane plantation and sugar production in Laos.
The concession is done between the company and the Lao government for
sugarcane plantation, and construction of buildings and sugar mill in
the area of 10,000 hectares (62,500 rai). At the beginning of this
project, the company started cultivating sugarcane in a small part of
the area. In each following year, the sugarcane seed pieces obtained
have been used in cultivation to expand the plantation. It is estimated
that at the beginning of 2010, the company will be able to start
crushing some cane from the plantation for sugar production.

  (2) Sugarcane plantation and sugar production in Cambodia: KSL and its
  subsidiaries hold 50% of the common shares of Koh Kong Plantation Co.,
  Ltd. and Koh Kong Sugar Industry Co., Ltd. The memorandum of
  understanding is done between the companies and the Cambodian
  government for sugarcane plantation, and construction of buildings and
  sugar mill in the area of 20,000 hectares (125,000 rai) in Koh Kong
  Province. At the beginning of this project, the companies started
  cultivating sugarcane in a small part of the area. In each following
  year, the sugarcane seed pieces obtained have been used in cultivation
  to expand the plantation. It is estimated that at the beginning of
  2010 the companies will be able to start crushing some cane from the
  plantation for sugar production.

The sugarcane plantation and sugar production projects in Laos and
Cambodia began constructing the mills in 2008. The machinery was tested
in 2009 before being commercially operated in 2010.

  (3) Renewable Energy Project in Bo Ploy: The venture includes
  relocation and expansion of production capacity of New Krung Thai
  Sugar Factory Co., Ltd. (subsidiary) sugar mill from Tamaka District
  to Bo Ploy District, Kanchanaburi Province. Its daily licensed
  production capacity of 8,385 TCD will be increased to 32,000 TCD. This
  project also includes the ethanol production facilities at a capacity
  of 200,000 liters per day, 90 MW power plant, and organic fertilizer
  plant which are downstream business of the Company's sugar production.
  To accommodate the amount of raw materials available in the area, the
  company divided its investment into 2 phases. In the first phase, it
  invested in the sugar mill with a production capacity of 14,000 tons
  per day, 45-MW power plant, and the ethanol production facilities at a
  capacity of 200,000 liters per day. The company expected that in early
  2010, the sugar mill and power plant in the first phase would be able
  to operate commercially. The ethanol production facilities and
  fertilizer plant will be ready for operations in mid 2010. Phase 2 of
  the project will commence in 2010. The company will invest in
  increasing the capacity of its sugar production at a rate of 18,000
  tons per day. There will also be a 45-MW increase in the power
  generating capacity of the power plant. The company expected that
  phase 2 of the project would be ready for operating commercially in
  early 2011.

Regarding 2009 KSL operating results (accounting year November 2008 -
October 2009), its net profit increased from THB 860 million in 2008 to
THB 901 million in 2009. Parts of the profit increase are from:

(1) The Company’s sugar sales decreased by 12 percent, from 627,341 tons
    in 2008 to 549,967 tons in 2009 due to a decrease in the amount of
    sugarcane crushed. In 2009, however, the Company’s average selling
    price of sugar increased by 19 percent as a result of the increase
    in the world market sugar prices. The Company‘s sugar production
    businesses subsequently had a 3-percent increase in profit.

(2) The Company’s ethanol sales decreased from 50.4 million liters in
    2008 to 42.5 million liters in 2009 due to shortage of raw materials
    for ethanol production. The average selling price of ethanol all
    year increased from THB 16.75 per liter to THB 21.13 per liter in
    the previous year. As a result, the Company‘s profit from its
    ethanol production increased by 43 percent.

(3) The Company had a 10 percent increase in profit from its power
    generation businesses, like its ethanol production enterprise. Its
    electricity sales volume decreased by 7 percent, from 136,997 Mw-hr
    to 127,459 Mw-hr. The average selling price, in contrast, increased
    from THB 2,668 per Mw-hr to THB 2,880 per Mw-hr.

The Company investment in the construction of several projects caused
the increases in administrative and project expenses, such as machinery
removal and machine transportation. The interest expenses also
increased. The mentioned factors resulted in a small increase in net
profit by 5 percent compared to that in the previous year.

In 2010, it is esitimated that the economy will recover, and several
projects of the Company will begin to operate commercially. Positive
factors will be increases in sugar selling prices and amounts of sugar
production compared to those in the previous year. These factors will
partly be the result of the first phase of the Renewable Energy Project
in Bo Ploy; the operation will begin in 2010. Negative factors may
include increases in corporate expenses from the Company’s projects and
interest. Operations of the sugarcane plantation and sugar production
projects in Laos and Cambodia in 2010 may not yield very high results as
it will be the first year of commercial operations. There may also be
other uncertainties, such as fluctuation of sugar prices in the world
market, fluctuation of prices of raw materials for ethanol production,
fluctuation of exchange rates, and political instability. The Company’s
operating results in 2010 can be affected by such uncertainties.