Risk

Producing

The Company is a manufacturer and distributor of Frozen Vegetables
product which must use Soy Beans, Green Beans and Sweet Corns as
important raw materials of producing capital and since these raw
materials are the agriculture raw materials that mainly depends on the
nature factors make the company may affect and incur some shortage of
such raw materials.

To serve this risk, the company would use the way of increasing more
volume of producing in next stage due to raw materials could be able to
grow 2-3 stages a year and harvesting life is only about 60-90 days.
Therefore, if the problem arises in any stage of growing, the company
would increase more growing area in next stage.

From arose of flood problem, the growing areas of the formers whose
joint company project were few affect owing most growing areas were in
the upper Northern region of the country.

Conducting business

 The Company has presently exported Frozen Vegetables product to Japan market about 75% of the total sale which this dependence on Japan market at high portion would affect the company business from their economic slowdown. And/or change on the trade policy of such country.

 However, as the products of the company which is food type necessary for standard of living and Japanese peoples like to consume Frozen Soy Beans and Frozen Green Beans also the company has a good relationship with the customer throughout, so the affective from depending on Japan market as a main would not be so risk.

Exchange rate

 As the company has its value export about 80% of the total sale with all products sold in US Dollar currency, so the company may be affected due to stronger exchange rate, would make the company receive less baht value from less exchange rate.

 The measurement to reduce risk in this case, the company has made a US exchange forward contract which can reduce moderate risk from foreign exchange rate in which the company will make forward sell contract each time about 300,000-2,000,000 US Dollars for periods time 6 - 12 months make the company would be able to prevent risk in exchange rate not less than 6 months.

Quality products

 Quality products that must free from chemical causes the company having risk in returning products from the customers if incapable to control the quality to free from chemical as agreed with the customers.

 The standard measure of controlling quality products which is an impact incur from chemical residue, the company is available an inspection process strictly according to GMP standard in which the company has arranged detector for detecting chemical residue that having high efficient which presently the company available 2 detectors capable to detect the chemical residue more than 250 kinds whereas the company uses the chemical about 20 kinds.

Management

Board of Company comprise 7 directors represented main shareholders
group which are of experience in agricultural business for a long time
and 4 Independent Directors jointly formulate the policy to the Board of
Executive, take care and control operation of the Board of Executive
continuously and efficiency.

Board of Executive comprise 5 high rank executive team which each of
person is of knowledgeable and competent in managing agricultural
business excellently, having scatter an authority in management and
decision appropriately inclusive meeting together to make decision in an
important point.

Working of the Board of Executive and Board of Company are conducting
under the policy of Good Corporate Governance, think of every group of
stakeholders, transparency, checkable and in every meeting of Board of
Company, the meeting has reported operation review and open a chance to
every director for making inquiry at their wish, so risk in management
of the company then is in a low level.

Financial

The Company has total assets amount 1,255.7 million baht, total
liabilities 99.7 million baht or come to 7.9% of total assets and
shareholder equity 1,156.0 million baht or come to 92.1% of total
assets, liabilities ratio per shareholder equity 0.09:1 time, liquidity
ratio 11.0 times and quick liquidity ratio 6.0 times, also amount credit
line provided by 3 financial institutions that the company is using
services are the credit lines that need not have promissory note which
shows the financial status and reliably of the company obtained from the
financial institutions in a high level. Besides, the company has held
the financial policy of thoroughness make the company’s financial risk
is in low level.

Investment

The Company has a good performance and profitable throughout (except in
the year 1997 due to economic crisis). At December 31, 2011, the company
had total retained earnings amount 706.9 million baht or 56.3% of total
assets and the company could pay dividend to the shareholders every
year.