Part 3.

11. Financial Highlight

(1) Financial statements

  The company paid 560,000 THB to the auditor for audit fee. There was
  no non-audit fee.

(a) Auditor report

The auditor has reported the financial statements of Pato Chemical
Industry Public Co., Ltd. as of 31 December of 2014 - 2016 without any
conditions.

(b) Balance Sheet, Statement of Income, Statement of cash flows

  PATO Chemical Industry Public Company Limited and Subsidiary

  Comparative Statements of Financial Position for the year ended
  December 31 (Unit: Thousand THB)

Separated financial statements Consolidated

  -------------------- --------- ------- --------- ------- --------- -------- --------- -------- -- --------- ------- --------- ------- --------- -------- --------- --------
                       2013              2014              2015               2016                  2013              2014              2015               2016      

                       Amount    %       Amount    %       Amount    %        Amount    %           Amount    %       Amount    %       Amount    %        Amount    %

  ASSETS                                                                                                                                                             

  CURRENT ASSETS                                                                                                                                                     

  Cash and cash        55,928    8.57    7,611     1.20    24,639    3.86     45,971    6.68        73,397    11.19   22,368    3.50    29,499    4.61     56,456    8.17
  equivalents                                                                                                                                                        

  Short - term         229,356   35.14   183,806   28.90   180,305   28.25    171,866   24.97       229,356   34.98   183,806   28.77   180,305   26.17    171,866   24.86
  investments                                                                                                                                                        

  Trade accounts       129,405   19.83   119,006   18.71   130,521   20.45    137,311   19.95       118,774   18.12   109,464   17.14   125,906   19.67    130,187   18.83
  receivable                                                                                                                                                         

  Inventories          140,835   21.58   216,626   34.06   192,581   30.17    199,949   29.05       141,831   21.63   218,462   34.20   197,918   30.92    203,312   29.41

  Total current assets 555,524   85.12   527,049   82.87   528,046   62.73    555,097   80.66       563,358   85.92   534,100   83.61   533,628   83.37    561,821   81.27

  NON - CURRENT ASSETS                                                                                                                                               

  Available-for-sale   14,304    2.19    19,851    3.12    21,703    3.40     41,289    6.00        14,304    2.18    19,851    3.11    21,703    3.39     41,289    5.97
  investment                                                                                                                                                         

  Investment in        5,000     0.77    5,000     0.79    5,000     0.78     5,000     0.73        -         -       -         -       -         -        -         -
  subsidiary                                                                                                                                                         

  Property, plant and  44,490    6.82    43,972    6.91    45,636    7.15     53,702    7.80        44,490    6.79    43,972    6.88    45,636    7.13     53,702    7.77
  equipment                                                                                                                                                          

  Intangible assets    31,514    4.83    37,461    5.89    36,113    5.66     31,957    4.64        31,720    4.84    38,196    5.98    37,332    5.83     33,346    4.82

  Deferred tax assets  1,757     0.27    2,681     0.42    1,703     0.27     1,095     0.16        1,757     0.27    2,680     0.46    1,703     0.27     1,095     0.16

  Other non - current  16        0.00    16        0.00    92        0.01     56        0.01        16        0.00    16        0.00    92        0.01     56        0.01
  assets                                                                                                                                                             

  Total non-current    97,081    14.88   108,981   17.13   110,247   17.27    133,099   19.34       92,287    14.08   104,715   16.39   106,466   16.63    129,488   18.73
  assets                                                                                                                                                             

  Total Assets         652,605   100     636,030   100     638,293   100.00   686,196   100.00      655,645   100     638,815   100     640,094   100.00   691,309   100.00
  -------------------- --------- ------- --------- ------- --------- -------- --------- -------- -- --------- ------- --------- ------- --------- -------- --------- --------

  --------------------- --------- ------- --------- ------- --------- ------- --------- ------- -- -------------- ------- --------- ------- --------- ------- --------- ------- -- -- ----- --
  Separated financial                                                                              Consolidated                                                                             
  statements                                                                                                                                                                                

                        2013              2014              2015              2016                 2013                   2014              2015              2016                          

                        Amount    %       Amount    %       Amount    %       Amount    %          Amount         %       Amount    %       Amount    %       Amount    %                   

  LIABILITIES AND                                                                                                                                                                           

  SHAREHOLDERS’EQUITY                                                                                                                                                                       
  CURRENT LIABILITIES                                                                                                                                                                       

  Short - term loans    53,845    8.25    51,104    8.03    49,449    7.75    33,985    4.94       53,845         8.21    51,104    8.00    49,449    7.73    33,985    4.92                
  from financial                                                                                                                                                                            
  institutions                                                                                                                                                                              

  Trade accounts        56,029    8.59    40,959    6.44    52,582    8.24    74,237    10.79      57,235         8.73    42,619    6.67    53,314    8.33    75,371    10.90               
  payable - related                                                                                                                                                                         
  companies                                                                                                                                                                                 

  Current portion of    -         -       -         -       -         -       -         -          -              -       -         -       -         -       -         -                   
  hire-purchase                                                                                                                                                                             
  contracts payable                                                                                                                                                                         

  Accrued income tax    18,130    2.78    13,450    2.11    14,244    2.23    19,942    2.90       19,291         2.94    13,606    2.13    14,703    2.30    20,812    3.01                

  Others current        634       0.10    1,108     0.17    799       0.13    1,085     0.16       634            0.10    1,327     0.21    804       0.13    1,092     0.16                
  liabilities                                                                                                                                                                               

  Total Current         128,638   19.71   106,621   16.76   117,073   18.34   129,249   18.78      131,005        19.96   108,655   17.01   118,269   18.48   131,260   18.99               
  Liabilities                                                                                                                                                                               

  NON - CURRENT                                                                                                                                                                             
  LIABILITIES                                                                                                                                                                               

  Hire-purchase         -         -       -         -       -         -       -         -                                 -         -       -         -       -         -                   
  contracts payable-net                                                                                                                                                                     

  Employee benefit      6,835     1.05    8,890     1.40    9,048     1.42    8,028     1.17       6,835          1.04    8,890     1.39    9,048     1.41    8,028     1.16                
  obligations                                                                                                                                                                               

  Total Liabilities     135,473   20.76   115,511   18.16   126,121   19.76   137,277   19.95      137,840        21.02   117,545   18.40   127,317   19.89   139,288   20.15               

  SHAREHOLDERS' EQUITY                                                                                                                                                                      

  Share                                                                                                                                                                                     
  capital-ordinary                                                                                                                                                                          
  share THB. 1.00 par                                                                                                                                                                       
  value                                                                                                                                                                                     

  Authorizes share                                                                                                                                                                          
  capital                                                                                                                                                                                   

  2012 and 2013:                                                                                                                                                                            
  Authorized shared                                                                                                                                                                         
  capital 142,800,000                                                                                                                                                                       
  ordinary shares.                                                                                                                                                                          
  --------------------- --------- ------- --------- ------- --------- ------- --------- ------- -- -------------- ------- --------- ------- --------- ------- --------- ------- -- -- ----- --

[TABLE]

  PATO Chemical Industry Public Company Limited and Subsidiary
  Statements of Income for the year ended December 31 (Unit: Thousand)

Separated financial statements Consolidated

[TABLE]

  Statement of Cash Flows for the Year Ended December 31 (Unit: Thousand
  THB)

Separated financial statements Consolidated

[TABLE]

  Statement of Cash Flows for the Year Ended December 31 (Unit: Thousand
  THB)

Separated financial statements Consolidated

  ---------------------- ---------- ----------- ----------- ----------- -- ---------- ----------- ----------- -----------
                         2013       2014        2015        2016           2013       2014        2015        2016

  Cash flows from                                                                                             
  investing activities                                                                                        

  Cash paid for          30,000     45,663      -           12,000         30,000     45,663      (64)        12,000
  investing in                                                                                                
  short-term investments                                                                                      

  Proceeds from disposal 2          310         1,084       5,102          2          310         1,084       5,102
  of assets                                                                                                   

  Cash paid for          (1,515)    (6,404)     (7,779)     (21,052)       (1,515)    (6,404)     (7,779)     (21,052)
  acquisition of                                                                                              
  equipment and vehicles                                                                                      

  Cash paid for          (8,488)    (8,544)     (1,817)     (3,152)        (8,643)    (9,073)     (2,301)     (3,321)
  acquisition of                                                                                              
  intangible asset                                                                                            

  Cash paid              (6,021)    (4,813)     (3,995)     (17,570)       (6,021)    (4,813)     (3,995)     (17,570)
  available-for-sale                                                                                          
  investment                                                                                                  

  Cash paid for          -          -           -           -              -          -           -           -
  investment in                                                                                               
  subsidiary                                                                                                  

  Dividends income       24,597     20,130      9,496       8,662          16,597     12,130      4,426       5,862

  Net cash provided by   38,575     46,342      (3,211)     (16,010)       30,420     37,813      (8,629)     (18,979)
  (used in) investing                                                                                         
  activities                                                                                                  

  Cash Flows from                                                                                             
  Financing Activities                                                                                        

  Increase(decrease)in   15,993     (2,876)     (1,518)     (15,308)       15,993     (2,876)     (1,518)     (15,308)
  short-term loans from                                                                                       
  financial institutions                                                                                      

  Proceeds from issue of -          -           19,450      -              -          -           19,450      -
  common shares                                                                                               

  Dividend paid          (84,000)   (128,800)   (128,795)   (99,609)       (84,000)   (128,800)   (128,795)   (99,609)

  Net cash used in       (68,007)   (131,672)   (110,863)   (114,917)      (68,007)   (131,676)   (110,863)   (114,917)
  financing activities                                                                                        

  Net Increase           44,824     (48,316)    17,028      21,331         57,405     (51,029)    7,131       26,957
  (Decrease) in Cash and                                                                                      
  Cash equivalents                                                                                            

  Cash and cash          11,104     55,927      7,611       24,639         15,993     73,397      22,368      29,499
  equivalents, beginning                                                                                      
  of year                                                                                                     

  Cash and cash          55,928     7,611       24,639      45,970         73,398     22,368      29,499      56,456
  equivalents, end of                                                                                         
  year                                                                                                        
  ---------------------- ---------- ----------- ----------- ----------- -- ---------- ----------- ----------- -----------

(c) Financial Ratio 2013-2016 Separate Financial Statements Consolidated

  ----------------------------- -------- --------- --------- -------- -- -------- --------- --------- --------
                                2013     2014      2015      2016        2013     2014      2015      2016

  Liquidity Ratio                                                                                     

  Current Ratio (Time)          4.32     4.94      4.51      4.29        4.30     4.92      4.51      4.28

  Quick Ratio (Time)            3.22     2.91      2.87      2.75        3.22     2.90      2.84      2.73

  Cash Flow Ratio (Time)        0.77     0.31      1.17      1.24        0.98     0.36      1.12      1.29

  Receivable Turnover (Time)    7.48     5.62      5.12      5.14        8.10     6.24      5.50      5.54

  Collection Period (Day)       48       64        70        70          44       58        65        65

  Inventory Turnover (Time)     4.11     2.72      2.21      2.42        4.11     2.71      2.18      2.42

  Inventory T/Period (Day)      88       132       163       148         87       133       165       149

  Account Payable Turnover      5.77     4.82      4.67      4.53        5.75     4.77      4.63      4.57
  (Time)                                                                                              

  Payment Period (Day)          62       75        77        80          63       75        78        79

  Cash Cycle (Day)              74       121       156       138         68       116       152       135

  Profitability Ratio                                                                                 

  Gross Profit Margin (%)       33.60    30.23     29.10     30.88       34.84    31.31     29.84     31.70

  Profit from operation (%)     22.52    19.56     18.56     21.12       23.95    20.59     19.25     22.00

  Other profit (%)              0.34     3.08      0.92      2.96        (1.22)   1.86      0.05      1.68

  Cash (%)                      45.93    27.12     110.63    104.73      53.96    29.23     101.56    103.40

  Net Profit Margin (%)         18.63    17.93     15.51     19.28       18.59    17.81     15.40     19.02

  Return on Equity (%)          27.41    24.88     19.36     25.74       27.55    24.86     19.31     25.79

  Efficiency Ratio                                                                                    

  Return on Total Assets (%)    22.62    20.03     15.69     20.63       22.70    19.95     15.61     20.62

  Return on Fixed Assets (%)    295.45   307.46    236.78    291.36      297.01   307.64    236.45    292.36

  Assets Turnover (Time)        121.44   111.71    101.14    106.97      122.08   112.03    101.35    108.40

  Financial Ratio                                                                                     

  Debt to Equity (Time)         0.26     0.22      0.25      0.25        0.27     0.23      0.25      0.25

  Interest Coverage (Time)      90.82    62.15     259.66    374.15      110.86   68.80     251.29    394.00

  Cash Basis (Time)             0.79     0.26      0.95      1.23        1.01     0.30      0.91      1.30

  Payout Ratio (%)              95.95    99.79     99.69     95.75       95.41    99.73     99.84     95.40

  Per Share (THB)                                                                                     

  Book Value (THB)              3.69     3.72      3.62      3.87        3.70     3.72      3.63      3.88

  Earnings per Share (THB)      0.96     0.92      0.71      0.96        0.96     0.92      0.71      0.96

  Dividend per Share (THB)      0.92     0.92      0.70      0.92        0.92     0.92      0.70      0.92

  Growth Rate                                                                                         

  Total Sale (%)                22.21    (2.54)    0.36      7.82        22.79    (2.57)    0.20      8.00

  Cost of Goods Sold (%)        88.90    (14.74)   9.19      8.85        92.12    (14.72)   8.31      9.40

  Sales Revenue (%)             121.40   (2.85)    (8.46)    7.82        126.62   (3.18)    (8.98)    9.52

  Selling & Admin Expense (%)   78.98    0.85      (7.32)    4.43        79.77    1.10      (7.43)    5.78

  Net Profit (%)                57.32    (3.85)    (22.55)   36.83       58.28    (4.33)    (22.71)   37.53
  ----------------------------- -------- --------- --------- -------- -- -------- --------- --------- --------

2) Management Discussion and Analysis

The performance of PATO Chemical Industry Plc and subsidiary indicated
net profit (loss) totaled THB 129.15, 99.82, and 137.29 million in 2014
– 2016 respectively. These figures represent an increase or a reduction
percentage of (4.33), (22.71) and 37.53 respectively.

In 2014, the world economy continued to expand in a relatively narrow
range. It is expected that the world economy will expand by 3.3%, which
is an equivalent to that of 2013. The overall world economy has been
significantly impacted by situations in the Americas, Europe and Asia.
For instance, the U.S. monetary policy agreed to stop Quantitative
Easing (QE) program after it had been operated since the end of 2014.
Europe’s economy was not only impacted by economic slowdown in some of
EU’s countries, which are in need of financial aid from European Central
Bank (ECB), but also political crisis between Russia and Ukraine,
causing it to marginally expand thanks to fragile confidence from
private sector and slow recovery in demand. In terms of Asia, Japan’s
economy tends to expand in a smaller rate thanks to the consumption tax
adjustment measures, which has been effective since 1 April 2014 causing
relatively slow recovery in consumption and manufacturing. The Japanese
government, therefore, had to use Quantitative and Qualitative Easing
(QQE) measures in addition to the long-term economic restoration
measures, which had already been used. The Chinese economy, which used
to expand more than 10% (double digits), also saw smaller expansion from
domestic demand due to the government’s economic balance adjustment to
encourage Chinese economy to sustainably expand.

Thailand has also been impacted by situations in foreign countries,
which caused the country’s economic slowdown. This factor coupled with
domestic situations enabled Thailand’s economy to marginally expand. The
chronic political instability during the first five months of 2014 and
the slow revival of export caused the country’s economy to shrink in the
first half of the year. For the second half of the year, Thailand’s
economy began to show signs of recovery thanks to resolving political
situation, greater confidence among investors and the return to normalcy
of the government’s budget disbursement. However, the expansion rate of
the economy is still comparatively low due to the low rate of domestic
consumption from lower prices of many agricultural products. On the
other hand, the export began to expand but it was still impacted by the
world economic slowdown causing the export value to decrease despite the
depreciation of the Thai baht, which is beneficial to the export.

The economy in the agricultural sector in 2014 has been greatly impacted
by abovementioned problems. Compared to 2013, the expansion rate stands
at only 1.2%. This is mainly due to the continuous drought from 2013 to
2014 in many areas of the country, especially the lower northern region
and the upper central region, which are important rice growing areas in
Thailand, causing great damage to the out-of-season rice cultivation. In
addition, in May 2014, which was the early growing season, the drought
still continued in many areas, and in September 2014, some important
plant growing areas were inundated causing damages to agricultural
products.

In 2015, the world economy continued to expand in a relatively narrow
range. It is expected that the world economy will expand by 3.1%, which
is a slight decrease from that of 2014. The overall world economy has
been significantly impacted by various situations such as a fluctuation
in financial and capital markets and a decrease in prices of oil and
commodity products in the Americas, Europe and Asia. For instance, the
U.S. economy expanded by 2.6% thanks to better domestic consumption and
lower unemployment rate which reflects its stronger labor market. The
Federal Reserve System (FED) decided to raise interest rates in December
2015, which reflected the U.S. economic recovery. European economy also
showed signs of recovery with 1.9% expansion thanks to the European
Central Bank (ECB)’s flexible financial policies with bond purchases as
well as the policy to offer long-term loans to commercial banks, which
caused liquidation in economic system and better private sector
consumption. At the same time, the Euro currency depreciated causing the
expansion in exports and surplus balance of trade.

For Asia, it’s worth nothing that Chinese economy saw only single-digit
expansion (6.8%), a decline from its typcial double-digit growth.
However, when compared to other developped countries, its expansion rate
was still high. This was caused by the Chinese government’s intention to
reform its economic system for better balance and sustainabilty by
reducing drastic growth in real estate business which might cause
economic bubble from sub-prime loans of the banks. At the same time, the
Chinese governemnt promoted the economic growth from the increase of
people’s purchasing power and the investment in infrastructure which, in
the long run, would maintain the country’s effiency and economic
stability as well as the world econmy in general.

Thailand was impacted by situations in foreign countries, which caused
the country’s economic slowdown in the range of 2.70%. This factor
coupled with domestic situations enabled Thailand’s economy to
marginally expand. The political instability brought about worries among
investors, expenses in investment projects as well as the goverment’s
measures to stimulate economy which play an important role in creating
liquidity for the country’s economy. At the same time, private
consumption still showed no signs of obvious recovery since prices of
many agricultural products decreased in accordance with prices of
commidity products in the global market causing high household debt.
Private investment was impacted by the lower utilization rate of
production capacity. The decline in overseas demand from various
measures caused a deceleration in investment in private sector. This was
followed by a decrease in exports which was reflected by the contionous
decrease of Thailand’s totoal export value. Another important factor was
the fluctuations in the global money market which made financial
institutions become more careful in offering loans. On the other hand,
the positive factor in the global economy is the fact that domestic
consumption and product export might be better thanks to the significant
drop in oil prices. Additionally, the tourism industry has continously
expanded.

The economy in the agricutltural sector in 2015 has been greatly
impacted by abovementioned problems. Compared to 2014, the declination
rate stands at 4.2%. This is mainy due to the continous drought from the
end of 2014 to 2015 causing great damage to agricultural products as
well as in-season and off-season rice cultivations . Farmers were not
able to sow their crop and the drough still continued in many areas due
to dry spell.

In 2016, the world economy continued to grow in narrow range from 2.4%
in the previous year to 2.9%. The world economic outlook in 2017 will be
mainly focus to the overall economy of the United States, European
Union, China, Japan and may include ASEAN which are considered a big
market.

The U.S. economy still had growth rate at 1.6, which the Federal Reserve
Bank of the United States increased the interest rate from 0 – 0.1 to
0.25 – 0.50 in December of last year. This adjustment has been made for
the first time in the past 7 years, resulting in a strengthening Dollar
against Euro, Yen and Bath. Business investment decelerated; on the
other hand, the unemployment rate decreased which strengthened its
economy. The consumption rate was below the production capacity so the
prices of the commodities in agriculture and industrial sectors went
down, and the reduction of products in inventory, which caused the U.S.
economy in 2016 expanded at the slowest pace.

The EU economy was under the pressure from the result of The United
Kingdom referendum: withdrawal from the EU (BREXIT), which played part
to the struggling European economy due to the European debt crisis of
European countries that were not able to compete with other countries,
which are not part of the European Union. However, QE policy
(Quantitative Easing) from European Central Bank (ECB), which stimulated
the lending commercial banks especially for household loans - helped
expand the consumer rate of the private sectors and that helped raise
the EU economy to grow steadily to 1.9%.

Japan's economic growth was still weak, which increased only 0.50% from
the government investment and from the easy monetary policy whereas the
consumption rate of the private sectors and exporting rate still
decreased.

The Chinese economy, which ranked the second largest of the world
economy, is slowing down but still grew at the rate of 6.6%, which was
considered a high rate. This was due to the support from consumption and
service sectors.

However, the Chinese economy was still at risk from the debts of its
commercial banks, which caused negative effects to the financial
stability and could weaken Yuan. This is because China needed to add
more Yuan to improve the liquidity of its commercial banks and caused
the whole economy of China to be continually slowing down.

Meanwhile, ASEAN’s economic growth expanded 4.8%, which of this group;
Indonesia was the country that its economy was in concerned condition
due to the situation of the deficit in trade and current account.

In case of Thailand, the economy expanded at the rate of 3.2%, this is
due to the fact that the economy received the impact from world economy,
for instance, the interest rate hike affects the direction of Thai Baht
and the impact from slow China economy from non-performing loans of
commercial banks, caused the demands to decrease and commodity price
tended to fall that these are the obstacles for recovery of exports.
However, Thailand economy is still able to be expanded because the
positive factors from household spending and public investment in
transportation infrastructure made the private investment also expanded.
Moreover, the other factors, for example, adding of the stimulus package
“Shop Chuay Chart” project in 2016, has helped the exports and services
and tourism sectors growth.

The overall of agricultural economy in 2016 continued to shrink at 0.50%
when compared with 2015 because of the drought in 2015 to beginning of
2016. The amount of water in the main embankments was very low and
inadequate for many kinds of agricultural plantation, especially
off-season rice in Chao Phraya basin, the lower northern and central of
Thailand. Moreover, the direction of agricultural product exports have
declined since the economy of major trading partners such as China
continue to slow. The second half of 2016, the situation of drought and
water in the embankments have improved, however, the products of
agricultural crops in 2016 were still in contraction at 1.8% when
compared with 2015 that the decreased products of important agricultural
crops were, for example, the off-season rice, maize, cassava, industrial
sugar cane, industrial pineapple, rubber and oil palm. However, there
are the increase of average price of agricultural crops such as
industrial pineapple, oil palm and rubber due to the decrease of
production and inadequate for the market needs.

With regard to the agricultural and farm products, the average price are
lower, these are including non-glutinous rice in the husk, maize,
cassava and industrial sugar cane. Emphasizing on the non-glutinous rice
in the husk, the drought situation has been recovered, so the output of
non-glutinous rice in the husk is increased in the market and the
non-glutinous rice in the husk product that was still in the stock; has
pressured the price of the rice to be lower.

Consequently, performance of the company during the past 3 years were as
follows:

Sales revenue during 2014 – 2016 were THB 711.66, 647.78, and 709.43
million respectively, representing an increase (a decrease) percentage
of (3.18), (8.98), and 9.52 respectively.

Total revenue during 2014 – 2016 were THB 725.12, 648.09, and 721.64
million, representing an increase (a decrease) percentage of (0.14),
(10.62),and 11.35 respectively.

Cost of Sales in 2014 – 2016 were THB 488.84, 454.50 and 484.55 million,
representing an increase (a decrease) percentage of 2.07, (7.02), and
6.61 respectively.  

The gross profit of 2014 – 2016 are THB 222.82, 193.29, and 224.88
million, represent an increase (or decrease) of (12.99) %, (13.25), and
16.34 respectively.

In 2014, the world economy expanded slightly due to the impacts from
aforementioned situations in the Americas, Europe and Asia. Thailand’s
economy was also affected by these situations, in addition to other
domestic factors, which contributed to the slowdown of the country’s
economic expansion, such as the chronic political problems from the
government’s rice pledging scheme, natural disasters such as drought and
flood which brought great damage to agricultural sector in terms of
production and price. Realizing this, the government has continuously
come up with related measures to help farmers.

From the abovementioned factors, the sales volume in 2014 stands at THB
711.66 million deceased by THB 3.18% or 23.33 million. In 2014, the
company has a gross profit of THB 222.82 million, decreased by THB
12.99% or 33.26 million, affected by the rise of cost of goods sold in
2014 to THB 488.84 million, increased by THB 2.07% or 9.93 million.

  All in all, important factors can be summed up as follows:

1.  The company’s sales volume in 2014 decreased from the chronic
    drought. The water level in the dam is not sufficient for
    cultivation. The government, therefore, forbade farmers to do the
    out-of-season rice cultivation. At the same time, in-season rice
    cultivation was also impacted. Statistics show that, compared to
    2013, the area of in-season rice cultivation decreased by 0.55%
    while the area of out-of-season rice cultivation decreased by 5.59%
    (source: Thai National AGRIS Centre, Office of Agricultural
    Economics). This causes the decrease in overall production volume of
    both in-season and out-of-season rice.

2.  The price of agricultural products, such as paddy and Para rubber,
    decreased. For paddy, the price decreased mainly due to fact that
    the government’s rice pledging scheme ended. There was no more
    intervention so the price went back to depend on market mechanism.
    In terms of Para rubber, the price has been continuously declined
    due to the oversupply thanks to the fact that the supply of Para
    rubber in the market has increased while the demand in the world
    market did not.

3.  From the problem of rice pledging scheme, farmers did not receive
    their money on time causing the lack of financial fluidity. The
    government has tried to solve the problem until farmers receive
    their money. However, the cultivation could not be done anyway since
    the season was already over and the level of water was not
    sufficient.

4.  The use of chemical pesticides has decreased from the lower amount
    of cultivation due to the drought and the insufficiency of water
    supply in the dam. The lower amount of cultivation is also the
    reason why there is no outbreak of brown plant-hoppers and rice stem
    borers.

From the abovementioned reasons, the financial liquidity and purchasing
power of farmers have decreased. At the same time, the lower amount of
cultivation and the lack of pest outbreaks caused the need in chemical
pesticides to greatly reduce. Since the demand in the market has reduced
while the competition has increased, the pricing strategies have been
widely used to maintain the company’s marketing shares.

For commodity products, which have low gross profit, such as chemical
pesticides for rice, which has only three types hold 15.73% of total
sales volume. In 2013, the sales volume of this product occupies only
7.32% of total sales volume. In terms of specialty products, which boast
high gross profit, such as chemical pesticide granules for rice hold
10.63% of total sales volume. In 2013, the sales volume of such product
occupies 24.92% of total sales volume.

For the aforementioned factors, cost of sales has increased while the
sales volume has decreased. That is the main reason why the gross profit
of 2014 stands at THB 222.82 million, or an equivalent of 31.31%, which
decreased THB (33.26) million from that of the previous year, or an
equivalent of (12.99)%.

Other revenues in 2014, which stand at THB 13.46 million, increased THB
22.34 million, or an equivalent of 251.57%, coming from investment THB
12.74 million, which comprises dividend as well as gains on sale of
investments and unrealized gains THB 12.24 million, interest income THB
0.50 million, gains on exchange rate THB 0.32 million, gains on sale of
fixed assets THB (0.31) million, and others THB (0.09) million.

In 2015, the world economy continued to expand slightly due to the
impacts from aforementioned situations in the Americas, Europe and Asia.
Thailand’s economy was also affected by these sitatuions, in additon to
other domestic factors, which contributed to the slowdown of the
country’s economic expansion, such as uncertain political situation
which caused worries among investors, and natural disasters such as
drought which brought great damange to agricultural sector in terms of
produciton and price. Realizing this problem, the government has
continuoulsy come up with related measures to help famers.

From the aforementioned factors, the sales volume in 2015 stands at
647.78 million THB decreased by (8.98)% or 63.88 million THB. In 2015,
the company has cost of sales of 454.50 million THB, decreased by
(7.02)% or (34.34) million THB, causing its gross profit to stand at
193.29 million THB, decreased by (13.25)% or (29.53) million THB .

All in all, important factors can be summed up as follows:

1.  The company’s sales volume in 2015 decreased from the continous
    drought from 2014 to 2015. The water level in the dam is not
    sufficient for cultivation. The government, therefore, forbade
    farmers to do the off-season rice cultivation. At the same time,
    in-season rice cultivatio was also postponed. Statistics show that,
    compared to 2014, the area of in-season and off-season rice
    cultivations decreased by (7.58)% and (43.61)%, respectively
    (source: Thai National AGRIS Centre, Office of Agricultural
    Economics). This cuases the decrease in overall production volume of
    both in-season and off-season rice.

2.  The production volume and the price of many agricultural products
    decreased. For instance, the production volume of in-season rice and
    off-season rice decreased by (15.62)% and (44.48)%, respectively.
    The price of 15% moist paddy increased by only 0.07% while the price
    of jasmine in-season rice decreased by (9.69)%. The production
    volume of Para rubber (raw rubber) decreased by (2.23)% while the
    price of raw rubber level 3 decreased by (18.37)%. These were mostly
    caused by problems and obstacles in cultivation as mentioned
    earlier. At the same time, the supply of Para rubber in the market
    was higher while the demand in the global market did not increase
    causing surplus products in the market.

3.  Farmers have debts, as they were not able to cultivate. As a
    consequence, they lacked financial liquidity and were not able to
    pay for their old debts and invest in the new cultivation.

4.  The agricultural exports tend to decrease due to economic downturn
    causing the price of domestic agricultural products to decline
    accordingly.

5.  The use of chemical pesticides has decreased from the lower amount
    of cultivation due to the drought and the insufficiency of water
    supply in the dam. The lower amount of cultivation is also the
    reason why there is no outbreak of brown plant-hoppers and rice stem
    borers.

From the abovementioned reasons, the financial liquidity and purchasing
power of farmers have decreased. At the same time, the lower amount of
cultivation and the lack of pest outbreaks caused the need in chemical
pesticides to greatly reduce. Since the demand in the market has reduced
while the competition has increased, various marketing strategies such
as pricing and sales promotion have been used to maintain the company’s
marketing shares.

Commodity products and specialty products, which have low gross profit
to high gross profit, saw decreased sales volume in all product
categories. It’s worth mentioning that chemical pesticides for rice,
which occupies 27.42 of total sales volume in 2015, decreased by (12.16)
when compared to that of 2014.

From the aforementioned factor, the decrease in sales volume caused cost
of goods sold to decrease as well. However, the change in the cost
decreased by greater amount than that of sales volume thanks to the use
of pricing strategies to compete with competitors in order to maintain
market shares. Cost of imported raw materials tend to decrease from the
market price but still have an impact from the depreciation of Thai baht
currency. At the same time, production process requires sufficient labor
so the human resources recruitment from outside is needed. This caused
labor cost to slightly increase from the previous year while
manufacturing overhead declined thanks to the decrease of production and
sales volumes. This is the main reason why the gross profit of 2015
stands at 193.29 million THB, or an equivalent of 29.84%, which
decreased (29.53) million THB from that of the previous year, or an
equivalent of (13.25)%

Other revenues in 2015 which stand at 0.31 million THB, decreased
(13.16) million THB, or an equivalent of (97.70)% from that of the
previous year due to the fluctuations in financial and capital markets.
The revenue from investment worth 1.00 million THB comprises dividend as
well as loss on sale of investments, unrealized loss (0.86 million THB),
interest income (0.14 million THB), loss on exchange rate from the
currency depreciation in 2015 between 32.95-36.27 THB / US Dollars (1.84
million THB) and gains on sale of fixed assets (1.08 million THB), and
others (0.06 million THB).

In 2016, the economic condition continued to slightly expand which was
due to the impact of the global economic crisis occurred to foreign
countries such as the United Sates, European Union, China, and Japan as
previously mentioned above. This further created both positive and
negative internal factors affecting the economic condition of Thailand
such as political issues which investors felt uncertain towards the
instability, droughts that damaged agricultural products which resulted
lower crop yield and price. The public sector has put various policies
and measures in to place to help the agricultural sector with the
agricultural reform consisting of the learning center project to
increase manufacturing efficiency of agricultural products, large scale
agriculture, management of agricultural farmland, organic farming, and
agricultural products bank, as well as the development of agricultural
product manufacturing. All aimed to help decrease the cost of
agricultural production of farmers and to improve the quality of their
agricultural products in order to gain competitive edge in the market.

From the factors above, the sales figure in 2016 went up to 709.43
million baht with 61.65 million baht or 9.52% increase whereas the cost
of sales of 2016 was 484.55 million baht with 30.05 million baht or
6.61% increase which resulted the 2016’s gross profit to be 224.88
million baht with 31.59 million or 16.34% increase.

Main causes could be summarized by issue as follows:

1.  The sales figure in 2016 increased due to the continuous drought
    from 2015 to early 2016 which caused scarcity on usable water supply
    among various dams insufficient for crop cultivation thus the
    government seek cooperation on the halt of off-season rice farming.
    After the second half of 2016, the situation unfolded, water supply
    from dams restored to sufficient level to supply the plantation
    which allowed in-season rice farming which covered 0.64% more area
    whereas the area for off-season rice farming decreased by 22.37%.
    (Source: Center for Agricultural Information, Office of Agricultural
    Economics) This explained why the production volume by farmers
    increased while off-season rice decreased.

1.  The yield of main agricultural crop products decreased. The yield of
    products such as off season rice, maize, cassava, industrial sugar
    cane, industrial pineapple, rubber, and oil palm had decreased by
    (29.37), (5.11), (2.40), (10.51), (1.70), (0.90), and (7.24) percent
    respectively whereas the yield of in-season rice product increased
    by 3.26%. In terms of pricing of important products, the prices of
    non-glutinous rice in the husk with 15% moisture, in-season rice,
    maize, cassava and industrial sugar cane declined by (1.60),
    (29.38), (9.52), (26.27), and (7.26) percent respectively. However,
    the prices of industrial pineapple, rubber, and oil palm had
    increased slightly. Due to the drought, which was both problematic
    and obstructing to crop cultivation, and the market mechanism, the
    prices of these crops continued to fluctuate.

2.  Farmer’s debts: due to fact that the government asked the farmers to
    halt their off-season rice farming and turn to cultivating less
    water-consuming crops, the yield of off-season rice tremendously
    reduced. Consequently, farmers lacked financial liquidity and thus
    were unable to repay their old debts nor invest in the new farming
    round.

3.  Exports of agricultural products tended to decrease due to the
    global economic slowdown. The demand for commodities from
    international trading partners such as China also declined which
    resulted a continued domestic price reduction on most major
    agricultural commodities.

5. Demand for pesticides in the first half of the year decreased due to
the decline in crop cultivation from drought crisis and insufficient dam
water supply which also subsequently reduced the occurrence of weed
outbreaks, plant diseases, and pests. However, the amount of rain falls
in the second half of the year made it possible for plantation so the
situation of drought crisis unfolded. Cultivation could begin in many
areas and as well followed by the outbreak of weeds, plant diseases and
pests such as rice blast disease, brown planthopper, and stem borers in
rice fields. There was a rise in demand of pesticides during this
period.

From the above reasons, there was a decline in financial liquidity for
farmers during the first half of the year as well as their purchasing
power which resulted, a decreased demand of agricultural chemicals in
the market. Competition among competitors in all aspects such as price
and promotion intensified to maintain the market share. Consequently,
the sales figure of the first six months of 2016 yielded 275.09 million
baht however, since the market demand increased in the second half due
to the aforementioned reasons, sales figure during the second six months
increased to 434.34 million baht which was 159.25 million baht or 57.89%
higher than the first six months. Market pricing competition among
competitors declined as well due to the return of high market demand
which increasingly drove more sales.

Sales of all types of products including commodity and specialty
increased at the same time, the sales proportion of products with higher
gross profit also increased especially the main products used in rice
fields which accounted 56.85% of total circulation in 2016. The
increasing change is 2.14% when compared to 2015.

Increased sales led to increased manufacturing which affected the
tendency of raw material cost reduction compared to the market price. In
addition, the fluctuation of baht value also contributed to the impact
on raw material cost reduction however, after the end of the fourth
quarter in 2016, the market price of imported raw materials increased
for 10.15% due to Chinese legislative enforcement regarding various
pollution laws which resulted in a higher cost of production.
Subsequently, raw material producers decided to raise prices.

While the manufacturing process required adequate labor to accommodate
the increased sales, it was crucial, therefore, to find additional
recruitment from external companies. Consequently, the labor cost went
higher than the previous year. The production overhead also increased
due as part of the impact from increased production volume as well as
other factors resulting the costs to have increased by 6.61% compared to
the previous year. As a result, the gross profit in 2016 yielded 224.88
million baht or 31.70% which was an increased change of 31.59 million
baht or 16.34% when compared to the previous year.

Though the manufacturing cost increased in 2016, it was considerably
lower than the increased sales therefore, the gross profit increased.

As for other income in 2016, 12.21 million baht was earned which was
11.90 million baht or 3,838.71% higher than the previous year due to
improvement in financial and capital markets. This resulted in an
investment income of 9.48 million baht comprising of dividend income,
loss on sale of investment, unrealized gains on changes in the value of
investments, and earned interest which, in total, was an increase of
8.47 million baht or 834.61%.

There was also a gain from currency exchange rate due to the fluctuation
of baht value ranging between 36.31-34.68 baht per dollar. The company
had a policy to hedge foreign exchange rate risk by utilizing forward
contract which resulted in an increased gain in the exchange rate of
3.30 million baht or 179.42% when compared to the previous year.

Table showing rate of increases (reduction) during 2014 – 2016

  ---------- ---------- --------- --------- ---------- --------- --------- ---------- --------- ----------
             2014                           2015                           2016                 

             Amount     %         Change    Amount     %         Change    Amount     %         Change (%)
                                  (%)                            (%)                            

  Sales      711.66     100.00    (3.18)    647.78     100.00    (8.98)    709.43     100.00    9.52

  Total      13.46      1.89      251.57    0.31       0.05      (97.70)   12.21      1.72      3,838.71
  revenues                                                                                      

  Cost of    (488.84)   (68.69)   2.07      (454.50)   (70.16)   (7.02)    (484.55)   (68.30)   6.61
  sales                                                                                         

  Gross      222.82     31.31     (12.99)   193.29     29.84     (13.25)   224.88     31.70     16.34
  profit                                                                                        
  ---------- ---------- --------- --------- ---------- --------- --------- ---------- --------- ----------

Sales and General Administrative expenses during 2014-2016 totaled THB
76.28, 68.61 and 68.78 million representing an increase (a decrease)
percentage of (4.68), (10.05) and 0.25 respectively, not including
financial cost.

Financial cost in 2014 – 2016 totaled THB 1.07, 0.60, and 0.49 million,
representing an increase (a decrease) of (6.95) %, (43.92), and (18.33)
respectively.

In 2014, when each type of account in 2014 is considered, we can see
that selling expenses stand at THB 35.72 million, a decrease of THB
(3.73) million over the previous year, or an equivalent of (9.45)%. This
is due to the fact that the demand of the product in the market has
reduced from the drought and the insufficient water supply for the
cultivation. In addition, the price of agricultural products have
reduced causing the selling expenses to reduce accordingly, such as sale
promotion expenses, commission, transportation expenses, etc.

Administrative expenses in 2014 are at THB 40.56 million, a decrease of
THB (0.02) million over the previous year, or an equivalent of (0.05)%.
This slight change stems from the change in fringe benefit and welfare
for employees under ESOP project. In 2014, which is the second year of
the project, saw its number of shares decreased from 2,800,000 to
2,455,000 due to the reduced number of employees and the withdrawal of
some employees from the project. This part of expenses, therefore,
decreased while other fixed expenses, such as salary and depreciation
expenses, increased, causing overall administrative expenses to slightly
reduce.

Financial costs in 2014 stand at THB 1.07 million, a decrease of THB
(0.08) million over the previous year, or an equivalent of (6.95)%, all
of which are T/R interest from the order of raw materials from other
countries. With currency fluctuations from the impacts of world economy,
the Thai baht depreciated. The payment for T/R debts has to take into
consideration the situation at that particular moment to achieve the
maximum benefits in terms of financial costs by paying according to the
term or extending the payment term. In 2014, the company also has a
policy to do forward contract to reduce risk in financial costs to a
minimum.

In 2015, when each type of account is considered, we can see that
selling expenses in 2015 stand at 30.52 million THB, a decrease of 5.20
million THB from the previous year, or an equivalent of 14.56%. This is
due to the fact that the demand of the product in the market has reduced
from the drought and the insufficient water supply for the cultivation.
In addition, the price of agricultural products have reduced causing the
selling expenses to reduce accordingly, such as sale promotion expenses,
commission, transportation expenses, etc.

Admistration expenses in 2015 are at 38.10 million THB, a decrease of
(2.46) million THB from the previous year, or an equivalent of (6.07)%
This change stems from the change in fringe benefit and walfare for
employees under ESOP project which is in the year to use the right to
buy shares. At the same time, fixed expenses such as salary increased
while other expenses slightly reduced due to decreased sales volume
which brought about less investment in variable management and thereby
less administrative expenses.

Financial costs in 2015 stand at 0.60 million THB, a decrease of (0.47)
million THB from the previous year, or an equivalent of (43.92)%, all of
which are T/R interest from the decreased order of raw materials from
other countries. With currency flunctuations from the impacts of world
economy, the Thai Baht depriciated. The paymanet of T/R debts has to
take into consideration the situation at that particular moment to
achieve maximum benefits in terms of financial costs by paying according
to the term or extending the payment term. In 2015, the Thai Baht
depriciated significantly since May, ranging from 32.95 - 36.27 THB / US
Dollars. This is the reason why the company paid for T/R debts earlier
in order to reduce burden from T/R interest and loss from currency
exchange. In addition, the company also has a policy to do forward
contract to reduce risks of impact from currency exchange and to
properly pay for T/R debts according to the situation in order to reduce
finacial costs.

In 2016, when each type of account is considered, we can see that
selling expenses at in 2016 stand at 29.85 million THB, a decrease of
(0.67) million THB from the previous year, or an equivalent of (2.19)%.
This is due to the fact that the demand of the product in the market for
Q3 and Q4 has increased from the rainfall and water level in dams
increase leads to sufficient water supply for the cultivation. In
addition, price competition in the market became less intense causing
the selling expenses to reduce accordingly, such as sale promotion
expenses of 2.83 mllion THB or a decrease of (4.33) million THB, or an
equivalent of (60.50). Salary and welfare for employee reduced from
decrease of number of employees. Other expenses, which are sales
commission, fuel expenses, depreciation, transportation, and
registration fees, increased.

Admistration expenses in 2016 are at 38.93 million THB, an increase of
0.83 million THB from the previous year, or an equivalent of 2.18% The
decrease stems from the fringe benefit and walfare for employees under
ESOP project which ended last year.

Financial costs in 2016 stand at 0.49 million THB, a decrease of (0.11)
million THB from the previous year, or an equivalent of (18.33)%, all of
which are T/R interest from the increased order of raw materials from
other countries. With currency flunctuations from the impacts of the
economy, the Thai Baht depriciated. The paymanet of T/R debts has to
take into consideration the situation at that particular moment to
achieve maximum benefits in terms of financial costs by paying according
to the term or extending the payment term. In 2016, the Thai Baht
depriciated from January – November, at 35.30 THB / US Dollars. This is
the reason why the company paid off T/R debts earlier in order to reduce
burden from T/R interest and loss from currency exchange. In addition,
the company also has a policy to do forward contract to reduce risks of
impact from currency exchange and to properly pay for T/R debts
according to the situation in order to reduce finacial costs.

Operational profits in 2014–2016 came to THB 146.54, 124.68, and 156.10
million respectively, representing a percentage of 20.59, 19.25, and 22
respectively.

Net profits in 2014 – 2016 came to THB 129.15, 99.82, and 137.29
million, or a percentage of 17.81, 15.40, and 19.02 respectively.

Return on equity during 2014 – 2016 were 24.86%, 19.31, and 25.79
respectively.

In 2014, the sales volume in 2014, which decreased by (3.18)%, is the
result of the drought and insufficiency of water supply for cultivation.
The amount of agricultural products greatly reduced and their prices are
lower. At the same time, the lack of financial liquidity from the
rice-pledging scheme causes farmers to lose their purchasing power. The
demand in chemical pesticides also reduced thanks to the lack of pest
outbreaks.

When the demand in the market decreases, the company needs to increase
its sales volume and maintain its market shares. The market is more
competitive so the company has to apply pricing strategies in order to
compete with others. Therefore, the sales ratio of low profit margin
products increased while that of high profit margin products decreased.
The cost of goods sold increased by 2.07% while the sales volume
decreased causing the gross profit in 2014 to reduce by (12.99)%

Selling expenses and administrative expenses in 2014 decreased by
(4.68)%. Since the company’s sales volume has decreased, the company is
committed to operating wisely and effectively in order to generate
highest revenues possible. As the competition in the today’s market is
fierce, promotion strategies are very crucial in stimulating consumer
demand. In 2014, the company spent THB 10.21 million in promotion
strategies, a decrease of THB 1.31 million over the previous year, or an
equivalent of (11.36)%. However, the company still made a profit of THB
146.54 million from its operations in 2014, or an equivalent of 20.59%,
a decrease of THB (29.51) million over the previous year, or an
equivalent of 16.76%.

Investment income in 2014 stands a THB t 12.74 million, an increase of
THB 11.70 million, or an equivalent of 1,125%. With the impacts from the
world economy, the Stock Exchange of Thailand fluctuated during the
first three quarters of 2014. Temporary investment generated income for
the company during that time. The downturn of the stock market in the
last quarter of 2014 caused lesser impacts to the company’s income
including the exchange rate, which had fluctuated throughout 2014.
Eventually, the company generated a profit of THB 0.32 million from the
exchange rate, an increase of THB 10.78 million, or an equivalent of
103.06%, over the previous year (2013), which saw the loss from exchange
rate of THB 10.46 million.

Corporate income tax in 2014 is at THB 29.78 million, a decrease of THB
1.24 million over the previous year, or an equivalent of (3.99)%. Since
the sales volume has declined, the profit before corporate income tax
deduction stands at THB 158.93 million, a decrease of THB (7.08) million
over the previous year, or an equivalent of (4.27)%. That is why the
corporate income tax in 2014 decreased.

From the aforementioned factors, the company’s operating results in the
current situation are satisfactory, which leads to the company’s net
profit of THB 129.15 million in 2014, or an equivalent of 18.15%. Return
of Equity (ROE) for shareholders stands at 24.86%, decreased from
(27.55)% in 2013.

In 2014, the company invested in available-for-sale securities for THB
19.85 million, in which, as of 31 December 2014, the company gained the
profit from change for THB 2.68 million, or an equivalent of 15.60%
increase from the investment. This means that the profit from the change
of fair value of investment in available-for-sale securities in 2014 is
THB 0.74 million. Deferred tax stated under the topic of profits from
investment evaluation in available-for-sale securities is THB 0.59
million. In 2014, the company has actuarial losses from fringe benefit
project for employees for THB 0.77 million. Therefore, the company’s
comprehensive income in 2014 stands at THB 128.97 million, or an
equivalent of 17.79% of total income.

In 2015 The sales volume in 2015, which decreased by (8.98)%, is the
result of the drought and insufficiency of water supply for cultivation
as well as the lack of seasonal rainfalls. The amount of agricultural
products reduced and their prices are lower. At the same time, the lack
of financial liquidity caused farmers to lose their purchasing power.
The demand in chemical pesticides also reduced due to the lack of pest
outbreaks.

When the demand in the market decreases, the company needs to increase
its sales volume and try to maintain its market shares. The market is
increasingly competitive so the company has to apply pricing and sales
promotion strategies in order to compete with others. As such, the sales
ratio of low profit margin and high profit margin products decreased. In
particular, products used in paddy fields, which typically boasts high
sales ratio in total sales volume, still decreased by 12.16 from the
previous year. The use of marketing strategies enabled the decrease of
cost of sales become lower than that of sales volume causing gross
profits to decline accordingly.

Selling expenses and administrative expenses in 2015 decreased by
(10.05)%. Since the company’s sales volume has decreased, the company is
committed to operating wisely and effectively in order to generate
highest revenues possible. As the competition in the today’s market is
increasingly fierce, sales promotion strategies are crucial in
stimulating consumer demand. In particular, in the fourth quarter, which
is the last quarter of the year, it’s necessary to attract more
customers by means of various strategies in order to increase sales
volume. In 2015, the company spent THB 7.16 million in sales promotion
strategies, a decrease of THB (3.05) million from the previous year, or
an equivalent of 29.87%. However, the company still made a profit of THB
124.68 million from its operations in 2015, or an equivalent of 19.25%,
a decrease of (21.86) million THB from the previous year, or an
equivalent of (14.92)%.

Investment income in 2015 stands at THB 1.00 million, a decrease of THB
(11.74) million, or an equivalent of (92.15)%. With the impacts from the
world economy, domestic financial and capital markets significantly
fluctuated since the second half of the year. The downturn of the stock
market in the fourth quarter of the year impacted the company’s
temporary investment, which used to generate income for the company in
the form of dividend. The currency exchange was also impacted causing
fluctuations in currency exchange rates and depreciation in Thai Baht
currency. All of these factors caused the company to suffer the loss
from exchange rate of THB (1.84) million, a decrease of THB (2.16)
million from the previous year, or an equivalent of (6.75)%

Corporate income tax in 2015 is at THB 24.55 million, a decrease of THB
(5.23) million from the previous year, or an equivalent of (17.56)%.
Since the sales volume has declined, the profit before corporate income
tax deduction stands at THB 124.38 million, a decrease of THB (34.55)
million from the previous year, or an equivalent of (21.74)%. That is
why the corporate income tax in 2015 decreased.

From the aforementioned factors, the company’s operating results in the
current situation are satisfactory, which leads to the company’s net
profit of THB 99.82 million in 2015, or an equivalent of 15.40%. Return
of Equity (ROE) for shareholders stands at 19.31%, a decrease of
(24.86)% from the previous year.

In 2015, the company invested in available-for-sale securities for THB
3.99 million, in which, as of 31 December 2015, the company gained the
profit from change for THB 0.54 million which was from the decrease of
investment value by (2.14) million THB, or an equivalent of (79.85)%
caused by the downturn of capital market. The company’s deferred tax
stated under the topic of profits (losses) from investment evaluation in
comprehensive income in 2015 stands at THB 98.11 million, or an
equivalent of 15.14% of total income.

In 2016, the sales volume which increased by 9.52%, is the result of the
drought and insufficiency of water supply for cultivation during the
first half of the year has ended. It was until rainfall and water level
in the main dams increased and finally led to sufficient water for
cultivation by the second half of the year. However, the quantity of
agricultural produce reduced and outside factors as world economy
causing demand of the produces to decline. The lack of financial
liquidity caused farmers to lose ability to pay off debts nonetheless
government policy to help farmers to live a better life.

When the demand in the market increases, the company’s sales volume went
up by 57.89% during the second half compared with the first half of the
year. Market competition became less intense on price. As such, the
sales volume of both Commodity Product and Specialty Product increased.
Meanwhile, sales ratio of high profit margin products increased. In
particular, products used in paddy fields, which typically shares 56.85%
of total year sales, increased by 8.14 compared with the previous year.
The use of marketing strategies enabled the increase in sales volume and
causing gross profits to increase accordingly.

Selling expenses and administrative expenses in 2016 increased by 0.25%.
Since the company’s sales volume has increased, the company is committed
to operating wisely and effectively in order to generate highest
revenues possible. As the competition in the today’s market was less
intensified from the first half the year, sales promotion becomes less
necessary as agrochemical demand in the market is high. In 2016, the
company still made a profit of THB 156.10 million from its operations
which represents 22% of total net sales. An increase of 31.42 million
THB from the previous year represents an equivalent of 25.20% over the
previous year.

Corporate income tax in 2016 is at 30.53 million THB, an increase of THB
5.98 million from the previous year, or an equivalent of 24.37%. Since
the sales volume has increases, the profit before corporate income tax
deduction stands at THB 168.31 million, an increase of THB 43.45 million
from the previous year, or an equivalent of 34.94%. The company has
included within, the benefit of exemption from tax on dividends received
from unit trust subject to holding conditions and profit from value
adjustment of available-for-sale investment etc.

From the aforementioned factors, the company’s operating results in the
current situation are satisfactory, which leads to the company’s net
profit of THB 137.29 million in 2016, or an equivalent of 19.02%. Return
of Equity (ROE) for shareholders stands at 25.79%, an increase of 19.31%
from the previous year.

In 2016, the company invested in available-for-sale securities for 17.57
million THB, in which, as of 31 December 2016, the company gained the
profit from fair value adjustment of available-for-sale securities.
Profit of THB 2.55 million is the increase from investment value of THB
2.02million caused by the upturn of capital market in 2016. The
company’s deferred tax stated under the topic of profits (losses) from
investment evaluation in comprehensive income in 2016 stands at THB
138.91 million, or an equivalent of 19.25% of total income.

Total assets in 2014-2016 amounting to THB 638.81, 640.09, and 691.31
million respectively, marked an increase (a decrease) at a percentage of
(2.57), 0.20, and 8.00 respectively.

Total liabilities in 2014-2016 amounting to THB 117.54, 127.32 ,and
139.28 million, marked an increase (a decrease) percentage of (14.73),
8.31, and 9.40 respectively.

Shareholder equity in 2014-2016 amounting to THB 521.27, 512.78, and
552.02 million, marked an increase (a decrease) percentage of 0.67,
(1.63), and 7.65 respectively.

In 2014, with the reduced sales volumes, the Company’s operating results
boast net profit of THB 129.15 million, causing its balance sheet to be
significantly different from that of 2013. The economy slowdown from
aforementioned problems caused the Company’s total assets to decrease
for THB (16.83) million, or an equivalent of (2.57)%, when compared to
the previous year. Major sections that increased (decreased) are cash
and cash deposits which decreased for THB (51.03) million. This amount
comes from a decrease in temporary investment for THB (45.54) million
and accounts receivable for THB (9.3) million as well as an increase in
inventory stocks and investment in available-for-sale securities for THB
76.63 million and THB 5.55 million, respectively.

The company’s total liabilities deceased for THB (20.30) million, or an
equivalent of (14.73)%, when compared to that of the previous year. This
amount includes a decrease in short term loan from financial
institutions (T/R creditors) for THB (2.74) million, trade account
payable and other creditors for THB (14.61) million, and income tax
payable for THB 5.69 million, etc.

Shareholder’s equity increased for THB 3.46 million, or an equivalent of
0.67%, when compared to that of the previous year. This amount comes
from an increase in stock warrants which have not been used in ESOP
project, covering the period of three years (2013-2015), for THB 3.30
million, a decrease in unappropriated retained earnings for THB 0.42
million, a decrease in net profit, as well as an increase in other parts
of shareholder’s equity for THB 0.58 million, comprising profits from
available-for-sale securities and deferred tax as mentioned earlier.

The changes in the balance sheet come from the decrease in sales volume
from various problems causing the lower demand in agricultural products.
Due to the highly competitive market, the amount of remaining products
that the Company prepared for the market including raw materials are
higher than those of the previous year. Since the Company purchased
higher amount of raw materials than that of 2013, the Company has debt
burden from more creditors. However, thanks to the company’s high
financial liquidity in 2013, despite the fact that the year 2014 which
saw a decrease in sales volume for only 3.18% and the slightly late debt
collecting, the Company still had sufficient financial liquidity to pay
for T/R creditors as well as other trade creditors, causing total debt
to reduce.

Therefore, from the Company’s operating results in 2014, the cash flows
decreased by (44.09)%. The liquidity ratio decreased from 4.30 times in
2013, to 4.92 times in 2014, and the quick liquidity ration decreased
from 3.22 times in 2013, to 2.90 times in 2014. At the same time, the
cash flow liquidity ratio reduced from 0.98 times in 2013 to 0.36 times
in 2014, and the cash flow liquidity ratio reduced from 44 days in 2013,
to 58 days in 2014. The average sale period decreased from 87 days in
2013, to 113 days in 2014, while the accounts payable payment period
increased from 63 days in 2013, to 75 days in 2014, leaving the cash
cycle to be 115 days. We can see that from the operating results, the
Company’s overall liquidity ratio decreased.

The Company’s cash flows from the investment increased by 24.30%, when
compared to the previous year. The Company invested in temporary
investment for THB 45.66 million in 2014, received dividend for THB
12.13 million, bought machineries and vehicles for THB 6.40 million and
paid for expenses related to the registration for the new license
according to Hazard Substances Act, which is under operation, for THB
9.07 million, and invested in available-for-sale securities for THB 4.81
million.

Cash flows from financing activities increased by 93.62% when compared
with the previous year since the order of raw materials from other
countries increased from that of 2013, causing more T/R creditors. In
accordance with its risks preventing policy, the Company paid its debts
to T/R creditors earlier causing its short-term loans from the financial
institutions to reduce. The Company also paid for dividends for THB
128.80 million.

From the operating results in 2014, the Company’s cash and cash deposits
stand at THB 22.37 million, a decrease of THB (51.03) million over the
previous year, or an equivalent of (69.52)%

The Company’s capital structure comprises debt-to-equity ratio, which
decreased from 0.27 times in 2013 to 0.23 times in 2014, mostly from the
decrease of T/R creditors and other trade creditors, enabling the ratio
to be slightly better than that of the previous year and can be
considered very good.

Interest coverage ratio decreased from 110.80 times in 2013 to 68.80
times in 2014. Operation cash flow decreased as the sales volume
declined. Therefore, the financial liquidity reduced and the interest
coverage decreased accordingly.

Meanwhile, the Company’s operating results decreased causing its net
profit to reduce. Therefore, its return on assets decreased from 22.70%
in 2013 to 19.95% in 2014; its return on fixed assets increased from
297.01% in 2013 to 307.64% in 2014, and its asset turnover ratio reduced
from 122.08 times in 2013 to 112.03 times in 2014. We can see that all
ratios decreased except for return on fixed assets, which increased, due
to the fact that fixed assets declined from the cut of depreciation
expenses. All in all, this indicates that the ability in profit
generation from the wise and efficient use of assets has decreased when
compared with the previous year.

In 2015, with the reduced sales volumes, the Company’s operating results
boast net profit of THB

99.82 million, causing its balance sheet to be significantly different
from that of 2014. The economic slowdown from aforementioned problems
caused the Company’s total assets to increase for THB 1.28 million, or
an equivalent of 0.20%, when compared to the previous year. Major
sections that increased (decreased) are cash and cash deposits which
increased for THB 7.13 million, or an equivalent of 31.87% Short-Term
Investments decreased for THB (3.50) million, or an equivalent of
(1.90)%. Accounts receivable increased for THB 16.44 million or an
equivalent of 15.02%. A decrease in inventories for THB (20.54) was an
equivalent of (9.40)%. Investment in available-for-sale securities and
the adjustment of unrealized profit for THB 1.85 million was an
equivalent of 9.32%. Property, plant and equipment, intangible assets,
and deferred tax assets slightly decreased.

The company’s total liabilities increased for THB 9.77 million, or an
equivalent of 8.31%, when compared to that of the previous year. This
amount includes a decrease in short term loan from financial
institutions (T/R creditors) for THB (1.65) million, or an equivalent of
(3.23)%. Trade account payable and other creditors increased for THB
10.70 million, or an equivalent of 25.10%. Income tax payable increased
for THB 1.09 million, or an equivalent of 8.01%.

Shareholder’s equity decreased for THB (8.49) million, or an equivalent
of (1.63)%, when compared to that of the previous year. This amount
comes from an increase (a decrease) in stock warrants which have been
exercised under ESOP project for 2,372,000 shares at THB8.20 per share
on December 30, 2015, making the surplus on ordinary shares of THB162.01
million. An increase of THB27.01 million was an equivalent of 20.01%,
The non-exercised warrants were expired due to the termination of the
ESOP project resulting in a decrease for THB(7.11) million or an
equivalent of (100)%. In addition, a decrease in net profit led to a
decrease in shareholders’ equity.

The changes in the balance sheet come from the decrease in sales volume
from various problems causing the lower demand in agricultural products.
Due to the highly competitive market, the amount of remaining products
that the Company prepared for the market including imported raw
materials were more than enough to meet market demand. It was necessary
for the Company to reduce purchasing order from abroad appropriately and
sufficiently. Q4 which was the last quarter, the Company had to boost
sales volume with marketing strategies and thus increase sales volume to
be higher than the same period of the previous year and thus making the
total cash and cash equivalents increased. Accounts receivable increased
while inventories decreased. As a result, collection period slightly
decreased compared to the previous year. The average inventory turnover
was slower due to the decline in sales. With the significant volatility
of the baht, the company needs to reduce the impact of exchange rates by
speeding up T/R payment. The Company continued to buy some domestic raw
materials and packaging materials during the last quarter to meet market
demand. As a result, Account payables increased, payment period
increased and led to a slightly decrease in liquidity ratio.

Therefore, from the Company’s operating results in 2015, the cash flows
increased by 195.63%. The liquidity ratio decreased from 4.92 times in
2014, to 4.51 times in 2015, and the quick ratio decreased from 2.90
times in 2014, to 2.84 times in 2015. At the same time, the cash flow
liquidity ratio increased from 0.36 times in 2014 to 1.12 times in 2015,
and the collection period reduced from 58 days in 2014, to 65 days in
2015. The average inventory turnover period decreased from 133 days in
2014, to 165 days in 2015, while payment period increased from 75 days
in 2014, to 78 days in 2015, leaving the cash cycle to be 152 days. We
can see that from the operating results, the Company’s overall liquidity
ratio decreased.

The Company’s cash flows from the investment decreased by (122.83)%,
when compared to the previous year. The Company invested in short-term
investment and available-for-sale investment for THB 4.06 million in
2015, received dividend for THB 4.43 million, bought machineries and
vehicles for THB 7.78 million, received from obsolete vehicle trade-off
for THB 1.08, and paid for expenses related to the registration for the
new license for THB 2.30 million.

Cash flows from financing activities increased by 15.80% when compared
with the previous year The import of raw materials in 2015 increased and
T/R payment period was extended. However, the volatility of the exchange
rate led to the weakening baht. In accordance with its risks preventing
policy, the Company paid its debts to T/R creditors earlier causing its
short-term loans from the financial institutions to reduce forex lost.
Meanwhile, the Company has covered exposure with forward contract to
reduce financial cost and led to cost savings and get the most out of
current situation. Short-term loans from financial institutions
decreased consequently. The Company paid for dividend THB 128.80
million. In addition, in 2015, the Company received proceeds from the
issuance of common shares of THB 19.45 million from ESOP project. Cash
and cash equivalents then equal to THB 29.50 million, an increase of THB
7.13 million or an equivalent of 31.87%.

The Company’s capital structure comprises debt-to-equity ratio, which
slightly increased from 0.23 times in 2014 to 0.25 times in 2015, mostly
from the decrease of Shareholder’s equity due to the decrease in
company’s performance. However, the ratio still is considered very good.

Interest coverage ratio increased from 68.80 times in 2014 to 251.29
times in 2015. From the aforementioned operation result, the Company saw
operation cash flow increased THB 126.62 million, an increase of
THB23.79, or an equivalent of 195.63%. From the to pay off T/R creditor
in advance helped reduce financial cost by (43.92)% compare with the
previous year. Therefore, interest coverage decreased accordingly.

Meanwhile, the Company’s operating results decreased causing its net
profit to reduce. Therefore, its return on assets decreased from 19.95%
in 2014 to 15.61% in 2015; its return on fixed assets decreased from
307.64% in 2014 to 236.45% in 2015, and its asset turnover ratio reduced
from 112.03 times in 2014 to 101.35 times in 2015. All in all, this
indicates that the ability in profit generation from the wise and
efficient use of assets has decreased in accordance with current
situation when compared with the previous year.

In 2016, with the increased sales volumes, the Company’s operating
results boast net profit of THB 137.29 million, causing its balance
sheet to be significantly different from that of 2015. The world
economic situation and from other aforementioned problems affected
Thailand economy and caused the Company’s total assets to increase for
THB 51.22 million, or an equivalent of 8.00%, when compared to the
previous year. Major sections that increased (decreased) are cash and
cash deposits which increased for THB 26.96 million, or an equivalent of
91.38%. Short-Term Investments decreased for THB (8.44) million, or an
equivalent of (4.68)%. Trade creditors and other creditors increased by
4.48 million THB or an equivalent of 3.40%. An increase in inventories
for THB 5.39 was an equivalent of 2.70%. Investment in
available-for-sale securities and the adjustment of unrealized profit
for THB 19.59 million was an equivalent of 90.20%. An increase in
property, plant and equipment for THB 8.07 million was an equivalent of
17.70 % from investment of vehicles, factory building and machinery with
replacement and renovation. Intangible assets decreased for THB (3.99)
million or an equivalent of (10.68)% from selling of some assets.
Deferred tax and other non-current assets slightly decrease.

The company’s total liabilities increased for THB 11.97 million, or an
equivalent of 9.40%, when compared to that of the previous year. Major
increase (decrease) includes decrease in short term loan from financial
institutions (T/R creditors) for THB (15.46) million, or an equivalent
of (31.27)%. Trade account payable and other creditors increased for THB
22.06 million, or an equivalent of 41.37%. Income tax payable increased
for THB 6.11 million, or an equivalent of 41.55%. Employee benefit
obligations decreased for THB (1.02) million or an equivalent of
(11.27)% due to employee retirement.

Shareholder’s equity increased for THB 39.24 million, or an equivalent
of 7.65%, when compared to that of the previous year. This amount comes
from an increase (a decrease) in unappropriated retained earning for THB
37.63 million, or an equivalent of 19.43% from the increase in net
profit and other components of shareholder’s equity which includes
surplus on revaluation of investment for THB 1.61 million, or an
equivalent of 367.33%.
The changes in the balance sheet come from the increase in sales volume.
Even though there were various problems during the first half of the
year, the situation became unravel. . Farmers were able to cultivate new
crops causing the higher demand in agricultural products. Competition in
the market became less intense. Sales volume during the second half
increased significantly in replacement of the first half of the year.
The Company managed to import raw materials to meet the increasing
production in 2016 appropriately and sufficiently to meet market demand.
And thus making the total cash and cash equivalents, accounts
receivable, and inventories increased. The collection period remained
the same as the previous year. The average inventory turnover was
quicker. With the significant volatility of the baht, the company needs
to reduce the impact of exchange rates by speeding up T/R payment when
the exchange rate was at appropriate level. T/R payable thus
significantly decreased. The Company continued to buy some domestic raw
materials and packaging materials to meet market demand. As a result,
trade and other account payables increased. However, average payment was
the same as the previous year. To manage liquidity ratio, the company
needed to divest some current investment to pay-off liabilities so as to
generate more income.

Therefore, from the Company’s operating results in 2016, the cash flows
increased by 27.03%. The liquidity ratio decreased from 4.51 times in
2015, to 4.28 times in 2016, and the quick ratio decreased from 2.84
times in 2015, to 2.73 times in 2016. At the same time, the cash flow
liquidity ratio increased from 1.12 times in 2015 to 1.29 times in 2016,
and the collection and payment period was 65 days and 79 days
respectively in 2015, same level as the previous year. The average
inventory turnover period quicker from 165 days in 2015, to 149 days in
2016, leaving the cash cycle to be better from 152 days in 2015 to 135
days in 2016. We can see that from the operating results, the Company’s
overall liquidity ratio maintained the same as previous year.

The Company’s cash flows from the investment decreased by (119.94)%,
when compared to the previous year. The Company invested in available-
for-sale investment for THB 17.57 million in 2016, received dividend for
THB 5.86 million, bought equipment and vehicles for THB 21.05 million,
received from obsolete vehicle trade-off for THB 5.10, and paid for
expenses related to the registration for the new license for THB 3.32
million.

Cash flows from financing activities decreased by 3.66% when compared
with the previous year The import of raw materials in 2016 increased.
Thus, there were more T/R and payment period was extended. However, the
volatility of the exchange rate led to the weakening baht. In accordance
with its risks preventing policy, the Company paid its debts to T/R
creditors earlier causing its short-term loans from the financial
institutions to reduce forex lost. Meanwhile, the Company has covered
exposure with forward contract to reduce financial cost and led to cost
savings and get the most out of current situation. Short-term loans from
financial institutions decreased consequently. The Company paid for
dividend THB 99.61million. Cash and cash equivalents by the end of the
year then equal to THB56.46 million, an increase of THB 26.96 million or
an equivalent of 91.38%.

The Company’s capital structure comprises debt-to-equity ratio, which
was 0.25 times for both 2015 and 2016. The company is able to manage and
control financial position to maintain same ratio while operating result
increase. This ratio level is considered very good.

Interest coverage ratio increased from 251.29 times in 2015 to 394 times
in 2016. From the aforementioned operation result, the Company saw
operation cash flow increased THB 160.85 million, an increase of
THB34.23, or an equivalent of 27.03%. From the to pay off T/R creditor
in advance helped reduce financial cost by (18.33)% compare with the
previous year. Therefore, interest coverage increased accordingly.

Meanwhile, the Company’s operating results increased causing its net
profit to increase. Therefore, its return on assets increased from
15.61% in 2015 to 20.62% in 2016; its return on fixed assets increased
from 236.45% in 2015 to 292.36% in 2016, and its asset turnover ratio
increase from 101.35 times in 2015 to 108.40 times in 2016. All in all,
this indicates that the ability in profit generation from the wise and
efficient use of assets has increased in accordance with current
situation when compared with the previous year.

From the capital structure shown, the Company still has the policy to
carefully manage its finance in order to achieve maximum returns, while
keeping risks that may impact its operation to a minimum. The Company
still places emphasis on investment in wise and efficient spending to
achieve highest revenue possible. To this end, the Company set the
policy to properly order raw materials in terms of quantity, quality and
price, to be in accordance with the market situation at that particular
moment. In terms of exchange rate risk, which is outside factor that may
impact the Company’s operating results, the Company has set the policy
to prevent risk from fluctuation. To doing so, the Company has managed
foreign debt payment term in order to achieve the lowest cost capital
possible by doing forward contract to reduce its risks.

The Company has continuously recognized the importance of financial
stability. Therefore, the Company has a policy to carefully manage its
finance by using its current liabilities to invest in current assets in
order to achieve financial liquidity and maximum returns while making
the most efficient use of financial capital possible. This goal is to
generate the highest returns to shareholders while keeping important
financial ratios in good levels, which can be seen in the operating
results of 2016, as mentioned earlier.

The major important factors and the effects on 2017 performances, which
is the economy, will continue to weigh on growth prospects in short
intervals approximately 3% - 4% that is supported by the following
factors:

1.  Slow expansion of export will be supporting factor that help to
    improve the manufacturing industries and the private investment,

2.  The recovery and expansion of agricultural productions will be
    supporting factor for the growth of household spending,

3.  The public investment continues to expand at good level

4.  The tourism sector tends to expand at good level.

However, the risks of economic fluctuation and global finance, the
important topics, are needed to be followed and accessed. In 2017,
Global economy tends to expand at 3.3% - 3.4% which boosted by the
increasing of global commercial treads, crude oil price, and commodity
price. Thai economy will be expanded from these positive factors. Other
factors related to agriculture sector, which is expected to be expanded,
still has some risks which may negatively impact the productions such as
the impact of economy that does not grow as expected coming from
European Financial Crisis and drought crisis from climate change. For
example, in 2016, many countries have changed their monetary policies
and revised the interest rate on loans which affect the capital flows
fluctuations, global stock markets, global oil prices, and exchange
rates (impact on Thai Baht rate). All of these issues have occurred in
2016 and in case of re-occurring this year, will send impact to the
price of domestic agricultural products.

Agricultural economic trend in 2017 is expected to expand in the range
of 2.4% - 3.4% in every part (Source: Agricultural Economy 2016 and the
Trend of 2017 by Agricultural Economic Policy and Development Strategy
Department, Office of Agricultural Economics) boosted by the government
policies and regulations in agricultures which help to improve the
agriculture’s standards to become a sustainability. For example, it
encourages the agriculturists to work under Philosophy of Sufficiency
Economy and to develop the conceptual knowledge by applying sciences,
technology, and agricultural business management. This helps to improve
the agricultural production’s standards and efficiency, thus,
agriculturists will have better quality of life and income security.

With regards to better weather condition and water content in 2017,
which helped the production of agricultural products more when compared
with 2016. Thus, the usable water supply in main dams is increased and
sufficient for the agricultures. Moreover, global economic direction in
2017 is on the way up and good for the exporting of agricultural
products lead to a better price. This may be the exception for China,
which the economy is continue to slowdown, and that caused the decrease
of demand in Thai agricultural products, therefore, the exports also
fall. In addition, the cost of agricultural production rises due to
higher crude oil price in global market.

The agricultural products, such as in-season rice, off-season rice,
maize, cassava, industrial sugar cane, industrial pineapple, rubber
tree, oil palm, longan, durian, mangosteen, and rambutan, are
increasing. The majority of prices will be higher in short intervals due
to slow growth of global economy. This will increase the exports of
agricultural products to trading partners.

In agricultural sector production, the Government will continue to
provide its full support in all areas such as:

  1.   Technology development - Developing production technology by
educating farmers and providing good plant breeds in order to further
develop quality of output and create competitive capability.

2.   Marketing - Helping to sustain agricultural prices, let market
forces operate on their own, and seeking market channel aboard.

3.   Finances – Providing loan support which might be in the form of a
village fund, low-interest loans so as to create opportunity for farmers
and allow farmers to easier fund accessibility.

4.  Promote agricultural processing – This is done by creating added
value to products which would develop product quality and enable to
export.

Government support on production and its strategy to restructure
agricultural products to make it in line with market needs and create
competitiveness for the country, will improve farmers’ situation and
living standards.

Raw material prices rising higher with world market conditions are a
risk factor, making the cost price of products higher. The fluctuation
of oil prices, THB fluctuation and weakening, drought and flooding, and
the new regulation from the government enforced recently are also
external factors which are beyond control. However, the company has
devised a policy to ease the effects from these risk factors.

1. Company policy to manage forex on raw material imports, for example,
with an extension of account payable and the using of forward contract
to reduce risks with prudent consideration of favorable exchange rate.

2.  Practicing more caution when ordering raw materials, seeing that it
    concords with needs. This will reduce damage from excessive
    inventory. However, lead Time is considered to avoid short of
    inventory.

3.  Making careful consideration before opening new trade accounts and
    expanding credit lines to prevent damage from bad debts and strictly
    performing in accordance with collection policy.

4.  Disseminate knowledge on technology and correct usage of product to
    increase yields, promote safety, with no environmental effects.

5.  Arrange enough budget to handle with the Hazardous substance Act
    (No.3) B.E. 2551 enforced.

These above factors affect the company’s operations and financial
position. Therefore, it is the policy of the company to try and reduce
the adverse effects from these various factors through the above
mentioned measures. Although, these are outside factors that cannot be
controlled, it is expected that this policy will reflect in better
operations for the company.