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. The
company is expected to get the revenue from Carbon Credit Sale in 2009.

Apart from completed projects mentioned, the Company expanded its
ventures as follows:

(1) Sugarcane plantation and sugar production in Laos: KSL holds 97% of
the shares in Savannakhet Sugar Corporation, engaging in sugarcane
plantation and sugar production. The concession is done between the
company and the Lao government for sugarcane plantation, and
constructions of buildings and sugar mill at the area of 10,000 hectares
(62,500 rai). The company has started sugarcane plantation in part of
the area. In 2007, the company will use the canes from 2006 as a seeding
for expanding more plantation areas to grow more sugarcane, enough for
crushing in sugar mill. In 2008, the company started the construction of
the sugar mill. The sugar mill is expected to be finished and start
crushing, producing and distributing sugar in 2009.

(2) Sugarcane plantation and sugar production in Cambodia: In 2006 KSL
invests 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 constructions of buildings and sugar mill at the area of
20,000 hectares (125,000 rai) in Koh Kong. The company has started
sugarcane plantation in some parts of the area. In 2007 and 2008, the
company will use the canes as a seeding for expanding more area to have
enough sugar cane for crushing. The sugar mill construction is to
commence in 2008 with a budget of THB 1,850 million. Its crushing
capacity amounts to 6,000 tons cane per day. The sugar mill is expected
to be finished and start crushing, producing and distributing sugar in
2009.

(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 20,400 TCD. This project also includes
the ethanol production facilities at a capacity of 200,000 liters per
day, 45 MW power plant, and organic fertilizer plant which are
downstream business of the Company's sugar production. The projects are
expected to start factory operation in 2010.

Regarding 2008 KSL operating results (accounting year November 2007 -
October 2008), its net profit increased from THB 836 million in 2007 to
THB 860 million in 2008. Parts of the profit increase are from:

(1) a 16.8-percent increase in sugar sale volumes, from 537,110 tons in
2007 to 627,341 tons in 2008. The average sugar price in 2008 slightly
declined by 3.1 percent.

(2) an increase in ethanol sale volumes, from 18.9 million liters in
2007 to 50.4 million liters in 2008. The increase in domestic demand was
caused by the rise of oil prices and the government’s promotion of
alternative energy use. The Company also exported its ethanol. The
average selling price of ethanol in 2008 is lower than that in 2007 by
approximately 6.5 percent.

(3) a 19.7-percent increase in electricity sale volume, from 114,419
Mw-hr to 136,997 Mw-hr. The average selling price increased from THB
2,527 per Mw-hr to THB 2,668 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 three percent compared to that in the previous year.

In 2009, Despite the economic recession, according to the nature of
business, the Company's food and energy businesses should be affected to
a minor extent only, unlike other types of businesses. Positive factors
benefiting corporate operations include prices of electricity that are
expected to rise and an increase in carbon credit sales. Negative
factors are project expenses and operating results of sugar mills in
Laos and Cambodia. Their production, start in 2009, is likely that the
output will not be high. In addition, there are some uncertainties, such
as sugar and ethanol prices in the world market that are partially
related to oil prices, increase in cost of capital for maintaining
liquidity in business operations during recession, and political
instability. The latter factor impacts industry policies and the
country's economic confidence.