8. MANAGEMENT

8.1 Corporate Structure as of 31 December 2012

8.2 Management Structure

Committees of STA

As of 31 December 2012, the corporate structure of STA consists of five
committees which are the Board of Directors of STA, the Audit Committee,
the Executive Committee, the Nominating Committee and the Remuneration
Committee.

8.2.1 The Board of Directors of STA

As of 31 December 2012, the Board of Directors of STA consists of 11
directors as follows:

  -----------------------------------------------------------------------
  Name                    Position                     Remarks
  ----------------------- ---------------------------- ------------------
  1. Mr. Viyavood         Chairman /Managing Director/ Executive Director
  Sincharoenkul           Executive Committee          

  2. Mr. Prasit Panidkul  Vice-chairman/               Executive Director
                          Executive Committee          

  3. Mr. Chaiyos          Director/ Executive          Executive Director
  Sincharoenkul           Committee                    

  4. Mr. Anan Pruksanusak Director/ Executive          Executive Director
                          Committee                    

  5. Mr. Kitichai         Director/ Executive          Executive Director
  Sincharoenkul           Committee/ Nominating        
                          Committee member             

  6. Mr. Paul Sumade Lee  Director/ Executive          Executive Director
                          Committee                    

  7. Mr. Veerasith        Director                     Non-Executive
  Sinchareonkul                                        Director

  8. Mr. Prakob           Lead Independent Director/   Non-Executive
  Visitkitjakarn          Chairman of the Audit        Director
                          Committee/ Chairman of the   
                          Remuneration Committee       

  9. Mr. Kriang           Independent Director/        Non-Executive
  Yanyongdilok            Audit Committee member/      Director
                          Chairman of the Nominating   
                          Committee/ Remuneration      
                          Committee member             

  10. Mr. Samacha         Independent Director/        Non-Executive
  Potavorn                Audit Committee member/      Director
                          Nominating Committee member/ 
                          Remuneration Committee       
                          member                       

  11. Mr. Neo Ah Chap     Independent Director         Non-Executive
                                                       Director
  -----------------------------------------------------------------------

Mrs. Pacharin Anuwongwattanachai is a secretary to the Board of
Directors of the Company.

Authorized Directors of STA

Any two of the following seven directors, Mr. Viyavood Sincharoenkul,
Mr. Chaiyos Sincharoenkul, Mr. Prasit Panidkul, Mr. Anan Pruksanusak,
Mr. Kitichai Sincharoenkul, Mr. Veerasith Sinchareonkul and Mr. Lee Paul
Sumade, may jointly sign with STA’s seal affixed.

Engagement of Mr. Somwang Sincharoenkul as Honorary Adviser

The Board of Directors Meeting No. 4/2010 held on 6 May 2010 resolved to
approve the engagement of Mr. Somwang Sincharoenkul as the Honorary
Adviser of STA. Such advisory services are as follows:

1.  Advise on the formulation of the Company’s goals and vision.

2.  Advise on the Company’s investment and business plans and the
    business operation policy of the Company, both domestically and
    internationally.

3.  Advise on strategies in relation to the use of raw materials,
    procurement, price and quantity in each period pursuant to the local
    conditions.

4.  Advise on dealings with communities, local authorities and
    government agencies in the southern part of Thailand.

Mr. Somwang Sincharoenkul does not have any participation in the
Company’s operation. His remuneration during 2 years starting from 6 May
2010 to 6 May 2012 is Baht 400,000 per month or Baht 4,800,000 per year.
This transaction is considered as a connected transaction which
continues to be carried out in the future.

As the Honorary Advisor period of Mr. Somwang Sincharoenkul was ending
on 6 May 2012, the Board of Directors Meeting No. 2/2012 held on 9 March
2012 approved the extension period of his services for two years which
will end on 6 May 2014. The remuneration rate remains the same at Baht
400,000 per month or Baht 4,800,000 per year.

Scope of Duties and Responsibilities of the Board of Directors of STA

STA has determined the scope of duties and responsibilities of the Board
of Directors of STA as follows:

1. Duties of the Board of Directors

  The Board of Directors of STA shall perform its duties with knowledge,
  ability, and experience to benefit the business operation of the
  Company. The Board of Directors shall also perform its duties in
  accordance with STA’s objectives, its Articles of Association and
  shareholders' resolutions with due care in order to protect the
  interests of STA and be responsible to STA shareholders. According to
  the Articles of Association of STA, a meeting of the Board of
  Directors shall be held at least once every three months.

2. Review and Approve the Appropriate Policies

  The Board of Directors of STA is responsible for proposing, reviewing
  and approving STA’s policies and business direction.

3. Supervision of the Executive Committee

  The Board of Directors of STA shall supervise the Executive Committee
  to ensure that the policies set out are followed efficiently and that
  they notify the Board of Directors to propose material matters in
  relation to the significant business operations of STA and connected
  transactions to be in accordance with the regulations of the SEC, the
  SET and the SGX-ST.

  If necessary, the Board of Directors of STA may appoint advisor(s) to
  advise or provide professional opinions to support the significant
  business decisions of STA.

4. Arrange the Efficient Internal Control and Internal Audit Systems

  The Board of Directors of STA shall arrange efficient internal control
  and internal audit systems, in particular in respect of transactions
  in which the director(s) have an interest and are required to be
  approved by the shareholders’ meeting pursuant to the law as well as
  the SET and SGX-ST regulations.

In any case, the assignment of the duties and responsibilities of the
Board of Directors of STA shall not constitute an authorization or
sub-authorization which may cause the Board of Directors of STA or its
assignee to be able to approve any transaction in which such person or
other related party (as defined in the Notification of the SEC or the
notification of the Capital Market Supervisory Board) may have a
conflict of interest or may benefit in any manner, or any other conflict
of interest with STA or its subsidiaries, except when the approvals of
such transactions are consistent with the policy and criteria approved
by the shareholders meeting or the Board of Directors meeting of STA.

Composition and Appointment of the Board of Directors of STA

The following is a summary of the composition, appointment, removal or
retirement from the Board of Directors of STA set forth in the Articles
of Association of STA:

1.  The number of members of the Board of Directors of STA shall be
    determined by a shareholders meeting but shall be not less than five
    persons and not less than one-half of the total number of Directors
    must reside in the Kingdom of Thailand.

2.  Directors shall be elected at a shareholders meeting in accordance
    with the following criteria and procedures:

    1.  Each shareholder shall have one vote for one share.

    2.  A shareholder must use all of his/her votes in (1) to elect one
        or several persons as Director or Directors, however, he or she
        may not split his/her votes unequally between any person in any
        number.

    3.  The persons who receive the most votes shall be elected as
        Directors, in the number of Directors required or to be elected
        on the relevant occasion. In the event that votes of two or more
        nominees are equal in number, causing the number of Directors
        required or to be elected on such relevant occasion to be
        exceeded, the chairman of the meeting shall have a casting vote.

3.  At every annual general meeting, one-third of the Directors, or, if
    the number of Directors is not a multiple of three, then the number
    nearest to one-third, shall retire from office.

  The Directors who are to retire from office in the first and the
  second years after registration of the Company shall be drawn by lots.
  In subsequent years, the Directors who have been holding office for
  the longest time shall retire.

4.  Any Director wishing to resign from office shall submit his or her
    resignation letter to STA. The resignation shall be effective from
    the date on which STA receives the resignation letter.

5.  The shareholders meeting may pass a resolution to remove any
    Director from office prior to rotation, by a vote of not less than
    three-fourths of the number of the shareholders attending the
    meeting and having the right to vote, and whose shares represent a
    total of not less than one half of the number of shares held by the
    shareholders attending the meeting and having the right to vote.

The Board currently comprises eleven Directors, four of whom are
Independent Directors. The Company has six Executive Directors and five
Non-executive Directors.

The composition of the Board takes into consideration the nature and
scope of the Group’s operations to allow constructive discussion, a
diversity and balance of judgment for effective decision making. The
Directors have invaluable experience in accounting, finance, business
management, strategic planning, marketing, law and the rubber industry.

Selection of Independent Director

Qualifications of Independent Director

1.  Holding shares not exceeding one percent of the total number of
    shares with voting rights of STA, its parent company, subsidiary
    company, associate company, major shareholder or controlling person
    of STA, including shares held by related persons of such independent
    director.

2.  Not having any relationship with (a) STA; (b) STA's holding company,
    subsidiary or fellow subsidiary; (c) any person who has an interest
    or interests in one or more voting shares in STA and the total votes
    attached to that share, or those shares, is not less than ten
    percent of the total votes attached to all the voting shares in STA
    ("10% Shareholder"); and/or (d) STA's officers, that could interfere
    or be reasonably perceived to interfere with the exercise of the
    Director's independent business judgment with a view to the best
    interests of STA.

3.  Neither being nor having an immediate family member who is or was,
    in the current or immediate past financial year, a 10% shareholder
    of, or a partner in (with 10% or more stake), or an executive
    officer of, or a director of, any organisation to which STA or any
    of its subsidiaries made, or from which STA or any of its
    subsidiaries received, significant payments or material services
    (which may include auditing, banking, consulting and legal
    services), in the current or immediate past financial year.

4.  Not being nor having been directly associated with a ten percent
    shareholder of STA in the current or immediate past financial year.

5.  Neither being nor having been an executive director, employee,
    staff, advisor who receives salary, or a controlling person of STA,
    its parent company, subsidiary company, associate company,
    same-level subsidiary company, major shareholder or controlling
    person of STA, unless the foregoing status ended not less than three
    financial years prior to the appointment as an independent director.
    Such prohibited characteristic shall not include the case where the
    independent director used to be a government official or advisor of
    a government unit which is a major shareholder or controlling person
    of STA.

6.  Not being a person related by blood or legal registration as father,
    mother, spouse, sibling, and child, including spouse of child, of a
    director, executive, major shareholder, controlling person, or
    person to be nominated as director, executive or controlling person
    of STA or its subsidiary company.

7.  Not have an immediate family member including spouse, child, adopted
    child, stepchild, brother, sister and parent, who is, or has been in
    any of the past three financial years, employed by the Company or
    any of its related companies and whose remuneration is determined by
    the remuneration committee.

8.  Not being a director or having an immediate family member including
    spouse, child, adopted child, stepchild, brother, sister, and
    parent, accepting any compensation from STA or any of its related
    corporations for the provision of services, other than compensation
    for board service, for the current or immediate past financial year.

9.  Neither having nor having had a business relationship with STA, its
    parent company, subsidiary company, associate company, major
    shareholder or controlling person, in the manner which may interfere
    with his independent judgement, and neither being nor having been a
    significant shareholder or controlling person of any person having a
    business relationship with STA, its parent company, subsidiary
    company, associate company, major shareholder or controlling person,
    unless the foregoing relationship ended not less than two years
    prior to the appointment as an independent director .

10. Neither being nor having been an auditor of STA, its parent company,
    subsidiary company, associate company, major shareholder or
    controlling person of STA, and not being a significant shareholder,
    controlling person, or partner of an audit firm which employs
    auditors of STA, its parent company, subsidiary company, associate
    company, major shareholder or controlling person of STA, unless the
    foregoing relationship ended not less than two years prior to the
    appointment as an independent director .

11. Neither being nor having been a provider of any professional
    services including those as legal advisor or financial advisor who
    receives service fees exceeding two million baht per year from STA,
    its parent company, subsidiary company, associate company, major
    shareholder or controlling person of STA, and not being a
    significant shareholder, controlling person or partner of the
    provider of professional services, unless the foregoing relationship
    ended not less than two years prior to the appointment as an
    independent director .

12. Not being a director appointed as representative of directors of
    STA, major shareholder or shareholder who is related to a major
    shareholder, or a director who is or has been directly associated
    with a 10% Shareholder, in the current or immediate past financial
    year. A director will be considered "directly associated" with a 10%
    Shareholder when the director is accustomed or under obligation,
    whether formal or informal, to act in accordance with the
    directions, instructions or wishes of the 10% Shareholder in
    relation to the corporate affairs of STA.

13. Not undertaking any business in the same nature and in competition
    to the business of STA or its subsidiary company or not being a
    significant partner in a partnership or being an executive director,
    employee, staff, advisor who receives salary or holds shares
    exceeding one percent of the total number of shares with voting
    rights of other company which undertakes business in the same nature
    and in competition to the business of STA or its subsidiary company.

14. Not having any other characteristics which would cause the inability
    to express independent opinions with regard to STA’s business
    operations.

The qualifications of the Independent Director of STA are more stringent
than the definitions as specified in the notification of the Capital
Market Supervisory Board.

The Nominating Committee is also guided by the Code of Corporate
Governance 2012 in determining independence.

The Board of Directors is of the opinion that both Mr. Prakob
Visitkitjakarn and Mr. Kriang Yanyongdilok, who have served as
Independent Directors for STA beyond nine years, should continue to
serve as Independent Directors of STA as they have the qualifications
required by the Capital Market Supervisory Board and Code of Corporate
Governance 2012 and do not have any characteristics which would cause
them to be unable to express their independent opinions with regard to
STA’s business operations. During their respective terms of appointment,
both Mr. Prakob Visitkitjakarn and Mr. Kriang Yanyongdilok have
performed their duty as Audit Committee and Remuneration Directors for
the benefit and the good governance of the Company.

2.  Executive Committee

As of 31 December 2012, the Executive Committee consisted of 6 Directors
as shown below.

  -----------------------------------------------------------------------
  Name                              Position
  --------------------------------- -------------------------------------
  1. Mr. Viyavood Sincharoenkul     Chairman of Executive Director

  2. Mr. Prasit Panidkul            Executive Director

  3. Mr. Chaiyos Sincharoenkul      Executive Director

  4. Mr. Anan Pruksanusak           Executive Director

  5. Mr. Kitichai Sincharoenkul     Executive Director

  6. Mr. Paul Sumade Lee            Executive Director
  -----------------------------------------------------------------------

Scope of Duties and Responsibilities of the Executive Committee

1.  To order, plan, and operate the business of STA to be in accordance
    with the policies set out by the Board of Directors of STA.

2.  To appoint STA’s management to efficiently and transparently manage
    STA’s businesses.

3.  Any two of the Executive Committee members jointly signing and
    affixing the company seal are eligible to grant proxies to any
    person to perform on behalf of STA in respect of any business that
    will benefit STA.

4.  To determine the appropriate employees’ benefits and welfare in
    compliance with corporate culture and applicable laws.

5.  To approve the credit limits of the normal business transactions or
    other transactions that bind STA.

In any case, the assignment of duties and responsibilities of the
Executive Committee shall not constitute an authorization or
sub-authorization which may cause the Executive Committee or its
assignee to be able to approve any transaction in which such person or
other related party (as defined in the Notification of the SEC or the
Capital Market Supervisory Board) may have a conflict of interest or may
benefit in any manner or any other conflict of interest with STA or its
subsidiaries. Such approval must be proposed at a meeting of the Board
of Directors and/or the meeting of shareholders, as the case may be, for
approval, as stipulated in the Articles of Association of STA or
subsidiaries, or any applicable laws.

2.  Audit Committee

Audit Committee

The Audit Committee consists of 3 independent directors and all have the
qualifications required by the Capital Market Supervisory Board and the
SET. As of 31 December 2012, the Audit Committee consists of the
following directors:

+-------------------------------+--------------------------------------+
| Name                          | Position                             |
+===============================+======================================+
| 1.  Mr. Prakob Visitkitjakarn | Chairman of the Audit Committee      |
+-------------------------------+--------------------------------------+
| 2.  Mr. Kriang Yanyongdilok   | Audit Committee Member               |
+-------------------------------+--------------------------------------+
| 3.  Mr. Samacha Potavorn      | Audit Committee Member               |
+-------------------------------+--------------------------------------+

Mr. Prakob Visitkitjakarn and Mr. Kriang Yanyongdilok are the Audit
Committee members who have sufficient knowledge and experience to review
the reliability of financial statements of STA.

Mr. Wittawas Grungtanmuang is a secretary to the Audit Committee.

Scope of Duties and Responsibilities of the Audit Committee

1.  To assist the Board of Directors in the discharge of its
    responsibilities on financial and accounting matters (including
    reviewing STA’s financial reporting process and our Company’s
    consolidated financial statements to ensure accuracy and adequacy).

2.  To review our Company’s internal control system and internal audit
    system to ensure that they are suitable and efficient, to determine
    an internal audit unit’s independence, as well as to approve the
    appointment, transfer and dismissal of the chief of an internal
    audit unit or any other unit in charge of an internal audit.

3.  To review our Company’s compliance with the law on securities and
    exchange, the regulations of the SET, the rules of SGX-ST, and the
    laws relating to business of STA.

4.  To consider, select and nominate an independent person to be STA’s
    auditor, and to propose such person’s remuneration, as well as to
    attend a non-management meeting with an auditor at least once a
    year.

5.  To review the connected transactions, interested person transactions
    or the transactions that may lead to conflicts of interest, to
    ensure that they are in compliance with the laws and the regulations
    of the SGX-ST and the SET, and are reasonable and in the best
    interests of STA.

6.  To prepare, and to disclose in our Company’s annual report, an Audit
    Committee’s report which must be signed by the Chairman of the Audit
    Committee and consist of at least the following information:

  (1) an opinion on the accuracy, completeness and credibility of the
  company’s financial report;

  (2) an opinion on the adequacy of the company’s internal control
  system;

  (3) an opinion on the compliance with the law on securities and
  exchange, the regulations of the SET, the rules of SGX-ST, or the laws
  relating to the STA’s business;

  (4) an opinion on the suitability of the auditor of STA;

  (5) an opinion on the transactions that may lead to conflicts of
  interests;

  (6) the number of the Audit Committee meetings, and the attendance at
  such meetings by each committee member;

  (7) an opinion or overview of comments received by the Audit Committee
  from its performance of duties in accordance with the charter; and

  (8) other transactions which, according to the Audit Committee’s
  opinion, should be known to the shareholders and general investors,
  within the scope of duties and responsibilities assigned by the
  company’s board of directors.

7.  To commission and review the findings of significant internal
    investigations and/or consult with the auditor in relation to such
    findings and report the findings to the Board of Directors of STA in
    the event that there is any suspected fraud or irregularity or
    infringement of any law or regulations of Thailand and Singapore,
    the rules of the SET and SGX-ST, or other relevant regulations which
    has or is likely to have a material impact on the results of
    operations and/or financial position of STA.

8.  To review the audit plans, scope of work and results of our audits
    compiled by our internal and external auditors.

9.  To review the co-operation given by our officers to the external
    auditors.

10. To review our risk management structure (including all hedging
    policies) and any oversight of our risk management processes and
    activities to mitigate and manage risk at acceptable levels
    determined by our Directors.

11. To perform any other act as delegated by the Board of Directors and
    approved by the Audit Committee.

Apart from the duties listed above, the Audit Committee is required to
commission and review the findings of internal investigations into
matters where there is any suspected fraud or irregularity, or failure
of internal controls or infringement of any law, rule or regulation
which has or is likely to have a material impact on the results of
operations and/or financial position of STA.

2.  Nominating Committee

As of 31 December 2012, the Nominating Committee of STA consists of 3
Directors as follows:

  -----------------------------------------------------------------------
  Name                             Position
  -------------------------------- --------------------------------------
  1. Mr. Kriang Yanyongdilok       Chairman of the Nominating Committee

  2. Mr. Samacha Potavorn          Nominating Committee Member

  3. Mr. Kitichai Sincharoenkul    Nominating Committee Member
  -----------------------------------------------------------------------

Scope of Duties and Responsibilities of the Nominating Committee

1.  Reviewing and assessing candidates for directorships (including
    executive directorships) before making recommendations to the Board
    of Directors of STA for the appointment of Directors.

2.  Reviewing and recommending nominations for appointment,
    re-appointment or re-election or renewal of appointment of the
    Directors having regard to the Director’s contribution and
    performance.

3.  Determining annually whether or not a Director is independent.

4.  Deciding whether or not a Director is able to and has been
    adequately carrying out his duties as a director.

Certain factors considered by the Nominating Committee in order to carry
out their responsibilities above include:

-   independence of mind;

-   capability of the individual and how it meets the needs of the
    Company and simultaneously complements the skill set of the other
    Board members;

-   experience and track record as directors in other companies; and

-   ability to commit time and effort toward discharging his
    responsibilities as a Director.

Nomination of Directors

The Nominating Committee will nominate candidates who have appropriate
qualifications to be a Director of STA. At the end of the office term of
any Director or when it is necessary to appoint more Directors, the
Nominating Committee will jointly discuss and consider determining the
person(s) with appropriate experience, knowledge and ability to benefit
STA to be a Director of STA. The nomination of the aforementioned
person(s) will be proposed to the meeting of the Board of Directors of
STA and the meeting of shareholders, respectively, for further approval.

The resolution of the meeting of shareholders for the appointment of
directors will be the majority of votes of the shareholders attending
the meeting and having the right to vote.

2.  Remuneration Committee

As of 31 December 2012, the Remuneration Committee consists of 3
Directors as follows:

  -----------------------------------------------------------------------
  Name                           Position
  ------------------------------ ----------------------------------------
  1. Mr. Prakob Visitkitjakarn   Chairman of the Remuneration Committee

  2. Mr. Kriang Yanyongdilok     Remuneration Committee Member

  3. Mr. Samacha Potavorn        Remuneration Committee Member
  -----------------------------------------------------------------------

Scope of Duties and Responsibilities of the Remuneration Committee

Our Remuneration Committee is responsible, among other things, for
recommending to the Board of Directors a framework and criteria of
remuneration for the Directors and executive officers, and for
recommending specific remuneration packages for each Director and the
Managing Director and to perform any other acts as delegated by the
Board of Directors.

3.  Details of Attendance for the Meetings of the Board of Directors and
    Board Committees

Details of the meeting attendance for the meetings of the Board of
Directors, Executive Committee and Audit Committee in 2011 and 2012 are
as follows:

  ---------------------------------------------------------------------------------------------------------------------------
  Name             No. of               No. of               No. of                No. of               No. of         
                   Attendances          Attendances          Attendances           Attendances          Attendances    
  ---------------- ------------- ------ ------------- ------ ------------- ------- ------------- ------ -------------- ------
                   Board of             Executive            Audit                 Nominating           Remuneration   
                   Directors of         Committee            Committee             Committee            Committee      
                   STA                                                                                                 

                   2011          2012   2011          2012   2011          2012    2011          2012   2011           2012

  1. Mr. Viyavood  7/7           6/6    8/8           8/8    -             -       -             -      -              -
  Sincharoenkul                                                                                                        

  2. Mr. Prasit    7/7           6/6    8/8           8/8    -             -       -             -      -              -
  Panidkul                                                                                                             

  3. Mr. Chaiyos   7/7           6/6    8/8           8/8    -             -       -             -      -              -
  Sincharoenkul                                                                                                        

  4. Mr. Anan      6/7           6/6    8/8           8/8    -             -       -             -      -              -
  Pruksanusak                                                                                                          

  5. Mr. Kitichai  7/7           6/6    8/8           8/8    -             -       1/1           1/1    -              -
  Sincharoenkul                                                                                                        

  6. Mr. Paul      7/7           5/6    8/8           8/8    -             -       -             -      -              -
  Sumade Lee                                                                                                           

  7. Mr. Veerasith 7/7           5/6    -             -      -             -       -             -      -              -
  Sinchareonkul                                                                                                        

  8. Mr. Prakob    7/7           6/6    -             -      7/7           12/12   -             -      1/1            1/1
  Visitkitjakarn                                                                                                       

  9. Mr. Kriang    7/7           5/6    -             -      7/7           11/12   1/1           1/1    1/1            1/1
  Yanyongdilok                                                                                                         

  10. Mr. Samacha  7/7           6/6    -             -      7/7           12/12   1/1           1/1    1/1            1/1
  Potavorn                                                                                                             

  11. Mr. Neo Ah   6/7           5/6    -             -      -             -       -             -      -              -
  Chap                                                                                                                 
  ---------------------------------------------------------------------------------------------------------------------------

4.  Executives (pursuant to the definition of “Executive” in the SEC’s
    notification no. GorJor. 17/2551 re: Determination of Definitions
    under Notifications relating to Issuance and Offering of Securities)

As of 31 December 2012, the list of Executives of STA is as follows:

+-----------------------------+----------------------------------------+
| Name                        | Position                               |
+=============================+========================================+
|   1. Mr. Viyavood           | Chairman and Managing Director         |
|   Sincharoenkul             |                                        |
+-----------------------------+----------------------------------------+
|   2. Mr. Prasit Panidkul    | Vice Chairman                          |
+-----------------------------+----------------------------------------+
|   3. Mr. Chaiyos            | Director                               |
|   Sincharoenkul             |                                        |
+-----------------------------+----------------------------------------+
|   4. Mr. Anan Pruksanusak   | Director                               |
+-----------------------------+----------------------------------------+
|   5. Mr. Kitichai           | Director and Manager of Legal and      |
|   Sincharoenkul             | Administration                         |
+-----------------------------+----------------------------------------+
|   6. Mr. Paul Sumade Lee    | Director and Manager of Sales and      |
|                             | Marketing                              |
+-----------------------------+----------------------------------------+
|   7. Mr. Veerasith          | Director                               |
|   Sinchareonkul             |                                        |
+-----------------------------+----------------------------------------+
|   8. Mr. Prakob             | Independent Director and Chairman of   |
|   Visitkitjakarn            | the Audit Committee                    |
+-----------------------------+----------------------------------------+
|   9. Mr. Kriang             | Independent Director and Member of the |
|   Yanyongdilok              | Audit Committee                        |
+-----------------------------+----------------------------------------+
|   10. Mr. Samacha Potavorn  | Independent Director and Member of the |
|                             | Audit Committee                        |
+-----------------------------+----------------------------------------+
|   11. Mr. Neo Ah Chap       | Independent Director                   |
+-----------------------------+----------------------------------------+
|   12. Mrs. Prapai           | Group Procurement Manager              |
|   Srisuttiphong             |                                        |
+-----------------------------+----------------------------------------+
|   13. Mr. Chalermpop        | Co-Group Production Manager            |
|   Khanjan                   |                                        |
+-----------------------------+----------------------------------------+
|   14. Mr. Arsom Aksornnam   | Co-Group Production Manager            |
+-----------------------------+----------------------------------------+
|   15. Mr. Chaidet           | Group Quality Assurance Manager        |
|   Pruksanusak               |                                        |
+-----------------------------+----------------------------------------+
|   16. Mr. Rattapong         | Co-Group Engineering Manager           |
|   Laparojkit                |                                        |
+-----------------------------+----------------------------------------+
|   17. Mr. Phanlert          | Co-Group Engineering Manager           |
|   Wangsuphadilok            |                                        |
+-----------------------------+----------------------------------------+
|   18. Mr. Udom Pruksanusak  | Co-Group Human Resource Manager        |
+-----------------------------+----------------------------------------+
|   19. Ms. Nuchanart         | Co-Group Human Resource Manager        |
|   Chaiyarat                 |                                        |
+-----------------------------+----------------------------------------+
|   20. Ms. Lim Li Ping       | Controller                             |
+-----------------------------+----------------------------------------+
|   21. Mr. Patrawut Panitkul | Chief Financial Officer                |
+-----------------------------+----------------------------------------+

Note: “Executive” means a director, manager or the next four executives
succeeding the manager, a person holding an equivalent position to the
fourth executive, including a person holding the position of manager or
equivalent in the accounting or finance departments

Scope of Authorities and Responsibilities of the Managing Director

1.  Approve any juristic act binding the company for the normal business
    operation of STA in an amount not exceeding Baht 200,000,000.

2.  Issue and amend the rules, orders, and work rules of STA, for
    example, the acceptance, appointment, removal and disciplining of
    staff and employees, and the determination of salary and other
    monies, including compensation and other welfare.

3.  Determine the salary rate and other remuneration, including expenses
    rate and facilities of the manager or equivalent for proposing to
    the Executive Committee for further approval.

4.  Administer STA pursuant to the resolutions and policies of the Board
    of Directors of STA.

5.  Propose significant matters to the Board of Directors of STA or the
    meeting of shareholders for further approval or other appropriate
    action.

6.  Study the feasibility of new projects and consider and approve the
    projects as delegated by the Board of Directors of STA and the
    Executive Committee.

7.  Perform other matters as delegated by the Board of Directors of STA
    and/or the Executive Committee from time to time.

However, the abovementioned approvals shall not be given in a way that
may cause the Managing Director or his authorized representative to be
able to approve any transaction in which he himself or any related
person has or may have a conflict of interest with STA or its
subsidiaries as defined in the Notification of the SEC or the Capital
Market Supervisory Board.

2.  Company Secretary

The Board of Directors of STA resolved to approve the appointment of
Mrs. Pacharin Anuwongwattanachai as the Company Secretary (the “Company
Secretary”) having the duties and responsibilities as provided in the
Securities and Exchange Act, including providing advice on and ensuring
compliance with relevant laws and regulations which the Board is
required to know and follow. The Company Secretary attends and documents
all Board meetings and ensures Board procedures are followed. The
appointment and removal of the Company Secretary is subject to the
approval of the Board.in the Securities and Exchange Act.

2.  Remuneration of Directors and Executive Officers

    1.  Financial Remuneration

  (1) Directors’ Fees

For the fiscal year ended 31 December 2012, STA paid the directors’ fees
to the Directors in the amount of Baht 5,472,000 for services rendered
by them in forms of monetary remuneration. The details are as follows:

  -----------------------------------------------------------------------
  Name                               Amount of Directors’ Fees (Baht)
  ---------------------------------- ------------------------------------
                                     Fiscal year ended 31 December 2012

  1. Mr. Viyavood Sincharoenkul      576,000

  2. Mr. Prasit Panidkul             432,000

  3. Mr. Chaiyos Sincharoenkul       432,000

  4. Mr. Anan Pruksanusak            432,000

  5. Mr. Kitichai Sincharoenkul      432,000

  6. Mr. Paul Sumade Lee             432,000

  7. Mr. Veerasith Sinchareonkul     432,000

  8. Mr. Prakob Visitkitjakarn       720,000

  9. Mr. Kriang Yanyongdilok         576,000

  10. Mr. Samacha Potavorn           576,000

  11. Mr. Neo Ah Chap                432,000
  -----------------------------------------------------------------------

(2) Remuneration of the Directors and Executive Officers

For the fiscal year ended 31 December 2012, STA paid remuneration to the
Executive Directors and Executive Officers, totaling 19 persons, in the
amount of Baht 103,920,840 of which Baht 16,562,215 was paid to the top
five key management personnel who are not directors or the CEO. Such
remuneration was in the form of salary, bonus and other compensation.

Fees and compensation paid by our Company to each of our Directors and
each of the top five Executive Officers of STA (for services rendered by
them in all capacities to STA and our subsidiaries), in remuneration
bands⁽¹⁾ for year ended 31 December 2012, are as follows:

+----------------+-----------+---------+---------+----------+--------+
| Name           | Amount of | Dir     | Salary  | Per      | Total  |
|                | Rem       | ector’s | (%)     | formance | (%)    |
|                | uneration |         |         | based    |        |
|                | Paid by   | Fees    |         | bonuses  |        |
|                | STA       | (%)     |         | (%)      |        |
+================+===========+=========+=========+==========+========+
| 1. Mr.         | Band F    | 1.84    | 66.95   | 31.21    | 100    |
| Viyavood       |           |         |         |          |        |
| Sincharoenkul  |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 2. Mr. Prasit  | Band B    | 4.23    | 53.52   | 42.25    | 100    |
| Panidkul       |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 3. Mr. Chaiyos | Band B    | 5.16    | 52.69   | 42.15    | 100    |
| Sincharoenkul  |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 4. Mr. Anan    | Band A    | 25.29   | 50.37   | 24.34    | 100    |
| Pruksanusak    |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 5. Mr.         | Band B    | 3.60    | 55.69   | 40.71    | 100    |
| Kitichai       |           |         |         |          |        |
| Sincharoenkul  |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 6. Mr. Paul    | Band B    | 4.02    | 78.90   | 17.08    | 100    |
| Sumade Lee     |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 7. Mr.         | Band A    | 100     | -       | -        | 100    |
| Veerasith      |           |         |         |          |        |
| Sinchareonkul  |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 8. Mr. Prakob  | Band A    | 100     | -       | -        | 100    |
| Visitkitjakarn |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 9. Mr. Kriang  | Band A    | 100     | -       | -        | 100    |
| Yanyongdilok   |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 10. Mr.        | Band A    | 100     | -       | -        | 100    |
| Samacha        |           |         |         |          |        |
| Potavorn       |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 11. Mr. Neo Ah | Band A    | 100     | -       | -        | 100    |
| Chap           |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| Top five       |           |         |         |          |        |
| Executive      |           |         |         |          |        |
| Officers       |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 1. Mrs. Prapai | Band A    | -       | 48.83   | 51.17    | 100    |
| Srisuttiphong  |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 2. Ms. Lim Li  | Band A    | -       | 79.90   | 20.10    | 100    |
| Ping           |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 3. Mr.         | Band A    | -       | 61.77   | 38.23    | 100    |
| Rattapong      |           |         |         |          |        |
| Laparojkit     |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 4. Mr.         | Band A    | -       | 67.16   | 32.84    | 100    |
| Chalermpop     |           |         |         |          |        |
| Khanjan        |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+
| 5. Mr. Chaidet | Band A    | -       | 75.19   | 24.81    | 100    |
| Pruksanusak    |           |         |         |          |        |
+----------------+-----------+---------+---------+----------+--------+

Notes:

(1) Remuneration bands:

Band A means between SGD 1 and SGD 250,000.

Band B means between SGD 250,001 and SGD 500,000.

Band C means between SGD 500,001 and SGD 750,000.

Band D means between SGD 750,001 and SGD 1,000,000.

Band E means between SGD 1,000,001 and SGD 1,250,000.

Band F means between SGD 1,250,001 and SGD 1,500,000.

Remuneration bands are based on the average (Baht: SGD) foreign exchange
rates for the stipulated year, being SGD 1 to Baht 24.8812.

Compensation includes benefit-in-kinds and compensation that has already
been paid includes any deferred compensation accrued for the financial
year in question and payable at a later date. The estimated amount of
compensation payable in the current financial year includes bonus or
profit-sharing plan or any other profit-linked agreement or arrangement.

Sri Trang International Pte. Ltd. have entered into employment
agreements with each of our Directors, Dr. Viyavood Sincharoenkul and
Mr. Paul Sumade Lee. Each of these employment agreements does not have a
fixed term of employment.

Pursuant to their respective employment agreements, each of Dr. Viyavood
Sincharoenkul and
Mr. Paul Sumade Lee will be entitled to the following:

-   a monthly salary and a variable bonus, as determined by the Profit
    Incentive Scheme (as defined below); and

-   coverage of all reasonable business expenses incurred or paid for
    during the term of employment, in connection with the discharge of
    their duties to Group.

Profit Incentive Scheme

Each of our Directors, Dr. Viyavood Sincharoenkul and Mr. Paul Sumade
Lee are entitled to participate in a profit incentive scheme (the
"Profit Incentive Scheme") in respect of each financial year of our
subsidiary, Sri Trang International.

Under the Profit Incentive Scheme, in respect of each financial year, if
the board of directors of Sri Trang International determines that there
is a surplus ("Surplus") after deducting (i) 10% of Sri Trang
International’s issued and paid-up capital, or such other amount as may
be determined by the board of directors of Sri Trang International, at
their sole discretion, from time to time, (ii) 5% of any retained
profits as at the beginning of the relevant financial year and (iii)
accumulated losses as at the beginning of the relevant financial year,
from Sri Trang International’s profit after tax (as reflected in its
audited accounts), 20% of such Surplus will be payable under the Profit
Incentive Scheme ("Profit

Incentive").

The Company has retirement benefits scheme for all directors and
employees for their retirement or post-employment.

8.3.2 Other Remunerations

None

8.4 Retirement and Re-election of Directors

A retiring Director shall be eligible for re-election. The Directors to
retire in every year shall be those, subject to retirement by rotation,
who have been longest in office since their last re-election or
appointment. The details of the retirement and re-election of the
Directors are set out as follows:

+-------------------+-------------------+--------------+--------------+
| Name of Director  | Position          | Date of      | Date of last |
|                   |                   | first        | re-election  |
|                   |                   | appointment  | as Director  |
|                   |                   | to the Board |              |
+===================+===================+==============+==============+
| 1.  Dr. Viyavood  | Chairman and      | 27 December  | 27 April     |
|     Sincharoenkul | Managing Director | 1993         | 2012         |
+-------------------+-------------------+--------------+--------------+
| 2.  Mr. Prasit    | Vice-chairman     | 27 December  | 28 April     |
|     Panidkul      |                   | 1993         | 2011         |
+-------------------+-------------------+--------------+--------------+
| 3.  Mr. Chaiyos   | Director          | 27 December  | 28 April     |
|     Sincharoenkul |                   | 1993         | 2011         |
+-------------------+-------------------+--------------+--------------+
| 4.  Mr. Anan      | Director          | 5 November   | 28 April     |
|     Pruksanusak   |                   | 1993         | 2011         |
+-------------------+-------------------+--------------+--------------+
| 5.  Mr. Kitichai  | Director and      | 10 April     | 27 April     |
|     Sincharoenkul | Manager of Legal  | 1995         | 2012         |
|                   | and               |              |              |
|                   | Administration    |              |              |
+-------------------+-------------------+--------------+--------------+
| 6.  Mr. Paul      | Director and      | 28 June 2010 | -            |
|     Sumade Lee    | Manager of Sales  |              |              |
|                   | and Marketing     |              |              |
+-------------------+-------------------+--------------+--------------+
| 7.  Mr. Veerasith | Director          | 28 April     | -            |
|     Sinchareonkul |                   | 2010         |              |
+-------------------+-------------------+--------------+--------------+
| 8.  Mr. Prakob    | Independent       | 27 December  | 27 April     |
|                   | Director and      | 1993         | 2012         |
|    Visitkitjakarn | Chairman of the   |              |              |
|                   | Audit Committee   |              |              |
+-------------------+-------------------+--------------+--------------+
| 9.  Mr. Kriang    | Independent       | 25 January   | 28 April     |
|     Yanyongdilok  | Director and      | 2000         | 2011         |
|                   | Member of the     |              |              |
|                   | Audit Committee   |              |              |
+-------------------+-------------------+--------------+--------------+
| 10. Mr. Samacha   | Independent       | 1 February   | 27 April     |
|     Potavorn      | Director and      | 2008         | 2012         |
|                   | Member of the     |              |              |
|                   | Audit Committee   |              |              |
+-------------------+-------------------+--------------+--------------+
| 11. Mr. Neo Ah    | Independent       | 28 June 2010 | -            |
|     Chap          | Director          |              |              |
+-------------------+-------------------+--------------+--------------+

5.  Employees

    1.  Number of Employees and Significant Changes to the Number of
        Employees

As of 31 December 2010, 31 December 2011 and 31 December 2012, the
Company had 5,414 employees, 6,214 employees, and 6,205 employees,
respectively, which can be divided into the following activities:

  -----------------------------------------------------------------------
  Activity                      As of 31                    
                                December                    
  ----------------------------- ------------- ------------- -------------
                                2010          2011          2012

  Procurement                   553           685           639

  Production                    3,516         3,975         4,044

  Quality assurance             545           541           514

  Finance and accounting        149           164           177

  Engineering                   362           424           406

  Sales and marketing           53            56            66

  Human resource                224           356           335

  Company secretarial, legal    12            13            24
  and administrative                                        

  Total                         5,414         6,214         6,205
  -----------------------------------------------------------------------

The breakdown of our employees by geographical location as of 31
December 2010, 31 December 2011 and 31 December 2012 is as follows:

  -----------------------------------------------------------------------
  Geographical location         As of 31                    
                                December                    
  ----------------------------- ------------- ------------- -------------
                                2010          2011          2012

  Thailand                      4,502         5,225         5,237

  Indonesia                     866           940           916

  Singapore                     21            24            22

  USA                           13            13            13

  PRC                           12            12            17

  Total                         5,414         6,214         6,205
  -----------------------------------------------------------------------

The increase in number of our employees in 2011 compared to 2010 was in
line with the increase in number of processing plants to support
business expansion of our Group.

Our employees are not unionised in Thailand. Certain of our employees in
Indonesia have established labour unions that have been registered with
the Indonesia Manpower Authority and have entered into collective labour
agreements with our subsidiaries.

8.5.2 Major labour disputes during the last three years

The cooperative agreement among Thailand, Indonesia, and Malaysia in
August 2012 for the export quota of 300,000 tons within 6 months
(October 2012 – March 2013) has adversely affected the utilisation rate
of PT Sri Trang Lingga, our subsidiary in Indonesia. This led to the
decrease in working hour and income of daily staffs. Although PT Sri
Trang Lingga has a minimum wage guarantee policy, there was a strike of
some staffs who concerned about their long-term income in October 2012.
Representative from various parties also participated the negotiation
between PT Sri Trang Lingga and the representative of staffs. The
proposal to terminate and pay compensation required by the laws to those
staffs was acceptable to all parties. Afterwards, PT Sri Trang Lingga
has set up employee relations to resolve the grievance, coordinate with
employee union, and support the staffs in order to avoid the recurrence
of such problem.

Apart from the above incident, the Company has not experienced any
material labour disputes or related work stoppages in the three most
recent completed financial years. We believe that our relationship with
our employees is good.

6.  Personnel Remuneration

8.6.1 Total remuneration of employees

STA

The employees of STA receive the remunerations in forms of salary,
overtime payment, bonus, and other welfares such as life and health
insurance. For the fiscal year end as of 31 December 2012, the Company
had expenses for salary and bonus and others employee benefit in an
amount of
Baht 514.69 million.

8.6.2 Employee Development Policy

Staff Training and Development

The rubber processing industry is a labour and capital-intensive
industry. Accordingly, we place emphasis on staff training to improve
and upgrade our employees’ technical knowledge and skills in their
respective fields. We believe that focusing on the training of our
employees not only helps us to increase the efficiency of our operations
and optimise our production capabilities but also build cohesion within
our Group’s workforce.

Our staff training programmes are formulated by our human resource
department and are designed according to our employees’ job requirements
and responsibilities. Our staff training programmes are divided into
four main categories — administration, manufacturing, service and
engineering. This ensures that our employees receive the appropriate
training for them to carry out their assigned roles within our Group.

We also send our employees for training and exchanges in local, Asian
countries, and EU countries for skills development.

7.  Corporate Governance

The Board of Directors of STA has conducted the business operation
appropriately and effectively in accordance with its objectives by
utilizing expertise, diligence, and due care to protect the interests of
the Company and to comply with the laws, objectives, and the Articles of
Association of STA. The Board of Directors of STA has also followed the
Principles of Good Corporate Governance for Directors of Listed
Companies and the Principles of Good Corporate Governance for Listed
Companies of 2006 as well as the Code of Corporate Governance 2012. The
roles and responsibilities of the Board of Directors of STA are all
managed with due care, in particular in the process of decision making.
Careful consideration is given using reasonable judgment based on
honesty, transparency, ethics, and the concern of stakeholders as well
as all aspects of the best interests of shareholders.

8.7.1 Principles of Good Corporate Governance under the Principles of
Good Corporate Governance for Listed Companies of 2006

STA has established principles for good corporate governance in
accordance with the Principle of Good Corporate Governance for Listed
Companies of 2006 as prescribed by the SET. The details of 5 principles
of good corporate governance areas are as follows:

1.  Rights of Shareholders

STA always realizes that the main factors for building shareholders’
trust and confidence for investing in the businesses of STA are the
application of policies and operations that protect the fundamental
rights of the shareholders as well as the equality of all shareholders
as prescribed by the laws, and encouraging the shareholders to exercise
their fundamental rights. For example:

1.  Right to Receive Profit Sharing in the Form of Dividend: STA has a
    policy on dividend payment which is based on careful consideration
    of the financial position, results of operation and cash flow of
    STA, the ability of our subsidiaries, associates and joint venture
    entity to make dividend payment, STA’s expected working capital
    requirements to support the future growth of STA, the economic
    situation, and other external factors that STA expects will have an
    impact on its operations. In order to manage the business operation
    efficiently, the dividend payment policy is at approximately 30
    percent of the net profit.

2.  Right to Attend the Shareholders’ meeting: STA pays great attention
    to the sufficiency of information so that the shareholders are able
    to make a well-informed decision at the shareholders’ meeting,
    including casting their votes and expressing their opinions on
    significant changes and the election of the Board of Directors of
    STA, based on information which is accurate, complete, transparent,
    and equally shared.

Where the STA's shares are held through CDP, CDP will be the only holder
on record of such shares. Accordingly, as a matter of Thai law, CDP will
be the only person or entity recognised as a shareholder and legally
entitled to vote on any matter to be submitted to the vote of the
Company's shareholders at a general meeting of shareholders.

  CDP has appointed a Thai custodian to safekeep all the shares held by
  CDP. Such Thai custodian will act as CDP’s proxy during a general
  meeting of shareholders and CDP will instruct such Thai custodian to
  split its votes in accordance with the instructions that CDP receives
  from investors holding shares through CDP. However, shareholders who
  desire to attend shareholders’ meetings and exercise their voting
  rights under their names with regard to the shares beneficially owned
  by them will be required to transfer their shares out of the CDP
  system and have the share transfer registered in the share register
  book. In addition, a shareholder who transfers the Company's shares
  out of the CDP system will not be able to trade such shares on the
  SGX-ST unless he first transfers such shares back into the CDP system.

  In order to provide the equivalent of the annual general meeting to
  shareholders in Singapore holding shares through the CDP, STA will
  hold an annual investor forum in Singapore soon after the annual
  general meeting is held in Thailand, to enable as even a level of
  access to information as possible at the time of such forum.
  Shareholders in Singapore holding shares through the CDP will be given
  the opportunity to air their views and ask Directors any questions
  they may have. The representation of the Board at the forum will
  include at the minimum, the Managing Director, two other Executive
  Directors and two Independent Directors, one of whom will be the Lead
  Independent Director.

3.  Right to Vote on Agenda Items in the Shareholders’ meeting: The
    completed invitation to shareholders’ meeting and attachments will
    be forwarded to shareholders in advance. The invitation to
    shareholders’ meeting includes details on agenda items, attachments
    to agenda items, opinions of the Board of Directors of STA, proxy
    forms as prescribed by the Ministry of Commerce, a name list of all
    independent directors to whom the shareholders are able to give
    their proxy, and a map of the meeting venue. The invitation to the
    shareholders’ meeting also includes the information regarding the
    required documents that shareholders have to present to the meeting
    in order to protect their right to attend the meeting, the Articles
    of Association of STA pertaining to the shareholders’ meeting, and
    voting instructions. Furthermore, so that the investors can obtain
    information thoroughly, the shareholders can access all information
    with respect to the agenda of the shareholders’ meeting at
    www.sritranggroup.com and the website of the SGX-ST at www.sgx.com
    ("SGXNET").

4.  Equal Right to Express Opinions and Make Inquiries in the
    Shareholders’ meeting: With respect to agenda items and proposed
    agenda items, the Chairman of the shareholders’ meeting should
    allocate sufficient time and encourage the shareholders to express
    their opinions and make inquiries in the meeting. STA's Lead
    Independent Director, Mr Prakob Visitkitjakarn, also the Chairman of
    the Audit Committee and Remuneration Committee, will be present at
    the annual general meeting to address questions that shareholders’
    may have. External auditors will also be present to address queries
    in relation to the audit of the Group and the auditors’ report.

2. Fair Treatment of Shareholders

(1) The shareholders’ meeting shall be held in accordance with the
agenda mentioned in the invitation to shareholders’ meeting. The policy
is that no additional agenda item is included in the meeting without
prior notice to the shareholders. STA sends a complete invitation to
shareholders’ meeting, including attachments, with all sufficient
information relevant to the meeting to the shareholders. Moreover, STA
posts all information which is relevant to the meeting at its website
(www.sritranggroup.com) and on SGXNET so that the shareholders will have
sufficient time to carefully study this information. In addition, the
invitation to shareholders’ meeting shall be advertised no less than
three days prior to the shareholders’ meeting in a daily newspaper for
at least three consecutive days in order to allow shareholders to have
sufficient time to prepare for attending the shareholders’ meeting.
Chairman of the Board, the respective Chairman of the Audit,
Remuneration, and Nominating Committees, and each director usually are
present and are available to address shareholders' queries at these
meetings. The external auditors are also present to address
shareholders' queries about the conduct of audit and the preparation and
content of the auditor's report. Before the commencement of each
meeting, the Chairman will give instructions on the voting and the
counting methods as clearly prescribed. During the meeting, the Chairman
allows the shareholders, equally, to make inquiries and express their
opinions as well as to make recommendations. The Chairman also answers
questions and provides complete information as requested by the
shareholders. After the meeting, STA will send the minutes of the
shareholders’ meeting to the SET and the SGX-ST within the prescribed
period.

(2) STA has encouraged the shareholders to use ballots for voting on
each agenda item. The ballots shall be kept in the meeting room for vote
counting prior to the announcement of the resolutions. For the purpose
of transparency, STA makes an announcement of the detailed results
showing the number of votes cast for and against each resolution and the
respective percentages and keeps all ballots having signatures of the
shareholders or their proxy for future reference.

(3) Minutes of the shareholders’ meeting must be accurately and
completely recorded and submitted to the SET within 14 days after the
shareholders’ meeting. The resolutions of the shareholders’ meeting will
be posted on the website of STA at www.sritranggroup.com and on SGXNET.

(4) The policy regarding the monitoring of the use of insider
information has been established for strict compliance by personnel at
all levels.

(5) A full and clear disclosure of shareholding structure in the
subsidiaries and associates is made to assure shareholders that the
operational structure of STA is transparent and accountable.

(6) STA places importance on the accurate, full, timely, and transparent
disclosure of information on various issues to shareholders. As such,
significant information is disclosed on a regular basis.

(7) STA has established a channel of communication for minority
shareholders to directly access information on various issues e.g. the
activities of the Board of Directors, supervision and monitoring of the
operation, and auditing through the email address of the independent
directors. Furthermore, minority shareholders may directly seek
information from the Company Secretary of STA or the Investor Relations
Office.

3. Role of Stakeholders

STA fully realizes that the growth and development of STA has resulted
from the full support given by all interested parties. STA places
importance on the rights of all stakeholders, both internal stakeholders
such as personnel, staff members, and the executives of STA and the
subsidiaries and external stakeholders such as commercial partners
ranging from the suppliers of raw materials to various groups of
customers of finished products, financial institutions, government
agencies that provide close co-operation, and finally, the shareholders
of STA. In this regard, STA realizes its responsibilities towards the
above-mentioned stakeholders. The details of such responsibilities are
as follows:

Shareholders:

STA is committed to be the representative of its shareholders in
conducting its business operation in a transparent manner, and having a
reliable accounting and finance system that brings the highest
satisfaction to shareholders by continuous considering the long-term,
sustainable growth of STA and an adequate return.

Employees:

STA treats its employees equally and fairly by providing a good and safe
working environment and adequate remuneration. Moreover, STA supports
its employees in terms of providing the opportunity to develop
knowledge, skills and experiences for career improvement. STA has
established a Health and Working Environment Committee. A training
program is specially designed for relevant personnel responsible for
overseeing, providing advice, and giving accurate information on safety,
occupational heath, and the working environment, and the prevention of
accidents resulting from work as well as providing other interesting
health information to the employees. Considering the employee’s welfare
with respect to the safe and maximum working efficiency, STA has
introduced various activities that promote the quality of life of
employees, such as establishing a library and creating entertainment
programs as well as various activities which are designed to promote
employees’ good physical and mental health. Moreover, a handbook for
employees has been published and is publicized through STA Intranet.

Customers:

STA is committed to create customer satisfaction by producing quality
products and delivering the products on a timely basis and maintaining a
good sustainable relationship. A guideline for customer relations
practice is included in the Employees’ Handbook.

Business Partners:

STA purchases goods and services from its business partners pursuant to
commercial conditions and always complies with the agreements entered
into with its business partners and strictly follows the laws and
regulations and possesses good business ethics in regard to business
competition.

Government Agencies and Related Organizations:

STA strictly complies with various laws and regulations e.g. laws
pertaining to the environment, safety, labour, tax management and
accounting, as well as the government notifications relating to the
business operations of STA.

Society and Environment:

STA is aware of and concerned about the safety, environment, and the
quality of life of the people, and the importance of natural resources
conservation, the promotion of energy sufficiency, the alternative use
of natural resources to minimize the impact on society, the environment
and people’s quality of life to the greatest possible extent. As such,
STA supports activities in the neighborhood community of the factories
by providing the most efficient management of safety and environment.

In addition, STA has supervised and monitored its management system to
ensure full compliance with laws and regulations of regulatory agencies
and the fair and strict equitable treatment of all stakeholders.

4. Information Disclosure and Transparency

(1) The Board of Directors of STA is responsible for the accurate,
complete, timely, and transparent disclosure of both significant
financial and non-financial information of STA through easy-to-access
channels, which reflects fairness and reliability so that the
stakeholders are all equally able to receive information in compliance
with the requirements of various regulators.

(2) STA has set up a public relations department in order to communicate
with investors and related third parties. The Investor Relations Office
is the center for communication between shareholders, stakeholders,
investors, and analysts.

(3) The Board of Directors of STA supports the preparation of
information in an accurate, reliable, timely, and regular manner in both
Thai and English through communication channels at SET and the website
of STA.

(4) The Board of Directors of STA has a duty to report its corporate
governance policy through the Annual Report and website of STA.

(5) The Board of Directors of STA has a duty to disclose meeting
attendance of Directors and the Audit Committee members.

(6) The Board of Directors of STA is responsible for the preparation of
the balance sheet, profit and loss statement, auditor’s report, annual
report, and other relevant reports for shareholders approval.

(7) The Board of Directors of STA has a duty to report risk factors,
types of risk, and the cause and impact of risk upon the business
operation of STA through the Annual Report.

The Board of Directors of STA ensures that the disclosure of significant
information is conducted in an accurate, precise, reliable, and timely
manner in accordance with the regulations of the SEC and SET, and that
such information is disclosed in the Annual Registration Statement (Form
56-1) and the Annual Report (Form 56-2) so that the shareholders are
equally informed. Furthermore, the Investor Relations Office has been
established to act as a contact person for communication with investors,
shareholders, securities analysts, and other related agencies.

The STA website is updated regularly. Information which should be
disclosed is posted on the STA website. The Investor Relations Office at
Bangkok Branch can be contacted at: Tel: 0-2207-4500,
Fax 0-2108-2244, or at www.sritranggroup.com

5. Responsibility of the Board of Directors

(1) The Structure of the Board of Directors

  The Board of Directors of STA, consisting of directors who have
  knowledge, competence and experience in business, has the duty to
  determine policies, visions, strategies, goals, missions, business
  plans and budgets of STA, as well as to monitor the management team to
  effectively and efficiently manage the business of STA in accordance
  with the policies under the legal framework, objectives, the Articles
  of Association of STA and the resolutions of the shareholders meeting
  and the Board of Directors Meeting. Such duties must be performed with
  responsibility, due care and loyalty under the principles of good
  corporate governance in order to increase the best economic value for
  the business and the highest stability for the shareholders.

  The Board of Directors of STA consists of 11 directors, including four
  independent directors who are fully qualified under the notifications
  of the Capital Market Supervisory Board and the SET.

  No director of STA shall hold the office of director in more than five
  listed companies. In the case that any director holds the office of
  director in more than five listed companies, the Board of Directors
  will further review the efficiency of such director’s performance.

  According to the Articles of Association of STA, at every annual
  general meeting, one-third of the Directors, or, if the number of
  Directors is not a multiple of three, then the number nearest to
  one-third, shall retire from office. The Directors who are to retire
  from office in the first and the second years after registration of
  the company shall be drawn by lots. In the subsequent years, the
  Directors who have been holding office for the longest time shall
  retire

  STA has appointed a Company Secretary to provide advice on compliance
  with relevant laws and regulations which the Board of Directors is
  required to know. The Company Secretary shall also supervise the
  activities of the Board of Directors and ensure that the resolutions
  of the Board of Directors meeting have been complied with.

(2) Sub-committees

  The Board of Directors has a duty to carefully and effectively
  consider and give approval on significant operational matters;
  therefore, sub-committees are formed to assist the Board of Directors
  in various aspects. An Audit Committee is appointed consisting of at
  least three independent directors and at least one of them must have
  knowledge of accounting and finance and must have a qualification on
  independence as prescribed by the notifications of the Capital Market
  Supervisory Board and by the definition of an independent director.
  The Audit Committee was established for the purpose of monitoring the
  internal control system, financial report system, corporate
  governance, risk management, as well as the selection and the
  appointment of the auditor. Moreover, STA has formed other
  sub-committees such as the Remuneration Committee and the Nominating
  Committee in order to manage the businesses of STA. The majority of
  members of the sub-committees are independent committee members in
  order to ensure a transparent and independent business operation.

(3) Roles, Duties, and Responsibilities of the Board of Directors

  The Board of Directors of STA oversees the business operation and the
  mission of STA to be in accordance with the approval given by
  shareholders, applicable laws, objectives, the Articles of Association
  of STA, and resolutions of the Board of Directors meeting and the
  shareholders meeting. The Board of Directors of STA must exercise good
  business judgment in making business decisions and perform its duty
  with responsibility, due care, and loyalty in the best interests of
  STA.

  Conflict of Interests

  The Board of Directors of STA has established a policy for preventing
  conflicts of interests on the basis that any decision-making on
  business transactions must be made only for the best interest of STA,
  and that any act which may cause a conflict of interest should be
  avoided. It is required that a person involved in or having a conflict
  of interest in any agenda item to be discussed in a meeting shall
  report the relationship or conflict of interest in such agenda item to
  STA, as well as abstain from voting and shall have no authority to
  grant approval for such transaction.

(4) The Board of Directors Meeting

  According to the Articles of Association of STA, the Board of
  Directors shall hold a meeting at least once every three months and
  any additional meetings as necessary. A meeting notice will be
  delivered to directors at least seven days prior to the date of the
  meeting, except in the case where it is necessary or urgent to
  preserve the rights and benefits of STA. At each meeting, the agenda
  items of the meeting must be clearly specified and supported by
  complete and sufficient documents, and must be delivered to the
  directors in advance so that the directors will have sufficient time
  to study such information prior to the meeting. At the meeting, each
  director is allowed to openly discuss and express his/her opinion. In
  addition, at the meeting of the Board of Directors, the senior
  executives will be invited to participate in order to present
  additional details of information on such matters in which they are
  directly involved.

  STA is committed to providing the Board of Directors with adequate,
  complete, continuous information in a timely manner prior to a Board
  of Directors meeting. The Directors can directly and independently
  contact the Company Secretary. The Company Secretary is responsible
  for advising the Board of Directors on compliance with legal and
  regulatory requirements.

(5) Remuneration

  The remuneration for directors must be made on a practical industry
  level based on working experience, role, responsibilities, and must be
  in line with the average market practice of the same industry.

(6) Training for Directors and Executives

  The Board of Directors has a policy to enhance and accommodate the
  provision of training on good corporate governance. Regular and
  continuous training programs are provided to directors so that they
  can improve their knowledge.

Dealings in Securities

STA has a policy and procedure to monitor its executives in relation to
their use of inside information of STA and its subsidiaries for personal
interest as follows:

1.  Educate the Directors and executives of each department regarding
    their duties to prepare and disclose the report of securities
    holding and the report of changes in securities holding of STA to
    the Office of the SEC, the SET and SGX-ST, as the case may be,
    including the applicable penalty in the case of breach according to
    the SEC Act, the regulations of the SET and the SGX-ST Listing
    Manual.

2.  Arrange for the Directors and executives of STA and their spouses
    and minor-children to prepare and disclose the report of securities
    holding and the report of changes in securities holding of STA to
    the Office of the SEC pursuant to Section 59 of the SEC Act and
    deliver copies of such documents to STA on the same day, and to
    report to SGX-ST as stipulated in the Listing Manual of SGX-ST.

3.  The Directors and executives of STA and its subsidiaries who know
    material inside information affecting changes in securities price,
    must be cautious in the trading of securities of STA within one
    month prior to the time when the financial statement or such inside
    information is disclosed to the public. Moreover, within 24 hours
    after such inside information has been disclosed to the public, no
    person involved with such inside information shall disclose any
    inside information to any person before such inside information has
    been notified to the SET and/or SGX-ST. Regarding penalty measures
    in the case of a violation of the above-mentioned regulations, STA
    deems such violation as warranting a disciplinary penalty according
    the working rules of STA.

4. The directors, executives, staff members and employees of STA shall
not, whether directly or indirectly, purchase or sell, offer to purchase
or sell or invite any other person to purchase, sell or offer to
purchase or sell shares or other securities (if any) of STA by using
inside information which has or may have an impact on the change of the
price of STA securities and has not been disclosed to the public, in a
manner that may directly or indirectly cause damage to STA and whether
or not such act is done for their own or another person’s benefit, or to
disclose such information so that they will receive consideration from
the person who engages in the aforementioned acts.

Directors and employees are also expected to observe applicable insider
trading laws at all times even when dealing in securities within
permitted trading periods. In addition, the Directors and employees are
expected not to deal in the Company’s securities for short-term
considerations.

2.  Principles of Good Corporate Governance under the Code of Corporate
    Governance 2012

THE BOARD'S CONDUCT OF AFFAIRS

Principle 1: Effective Board to lead and control the Company

The Board's principal roles are set out under "Scope of Duties and
Responsibilities of the Board of Directors of STA". The membership and
attendance of the members of the Board and Board Committees at Board and
Board Committee meetings held in FY2011 and FY2012, are disclosed in the
table set out under "Details of Attendance for the Meetings of the Board
of Directors and Board Committees".

Certain material corporate actions such as quarterly results
announcements, annual results and financial statements, declaration of
dividends, convening of shareholders’ meetings, authorization of merger
and acquisition transactions, and other material transactions that
exceed the authority of the Executive Board and MD will require the
Board’s approval. The Board of Directors also consider and approve any
transactions, including but not limited to related party transaction and
the acquisition/disposal of assets of the Company, that are required by
the SET and the SGX-ST.

STA has made available resources for Directors to receive training in
any relevant specific area to enable them to discharge their duties with
due care and diligence.

BOARD COMPOSITION AND GUIDANCE

Principle 2: Strong and independent element on the Board

The Board composition of the Company is set out under "Scope of Duties
and Responsibilities of the Board of Directors of STA – Composition and
Appointment of the Board of Directors of STA". In determining the
independence of the Directors of STA, the Nominating Committee is guided
by the factors set out under "Selection of Independent Director". The
Nominating Committee reviews nominations for re-appointment as set out
under "Scope of Duties and Responsibilities of the Nominating
Committee".

Brief profiles of the Company's Directors are provided under the section
"Board of Directors".

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Principle 3: Clear division of responsibilities between the leadership
of the Board and the executives responsible for managing the Company's
business

Dr Viyavood Sincharoenkul is the Chairman and Managing Director (the
equivalent of the Chief Executive Officer) ("MD") of the Company.

Notwithstanding the above, the Board believes that Dr Sincharoenkul
should continue to lead the Group as Chairman and MD. Dr Sincharoenkul
manages the day-to-day operations of the Group as its MD and is
responsible for the strategic direction and growth of the Group. As
Chairman, he ensures that Board meetings are held when necessary and
sets agendas in consultation with other Directors. He ensures that Board
members are provided with complete, accurate and timely information on a
regular basis.

Furthermore, there is accountability and independent decision making by
the Board by virtue of the following factors:

-   The Board is of the view that there are sufficient safeguards and
    checks in place to ensure that management is accountable to the
    Board as a whole. The Nominating Committee, Remuneration Committee
    and Audit Committee are all chaired by Independent Directors.

-   Active participation by Independent Directors during Board meetings,
    who challenge the assumptions and proposals of the management on all
    issues affecting the affairs and businesses of the Group.

-   The appointment of Mr Prakob Visitkitjakarn as Lead Independent
    Director, to address shareholder concerns which could not have been
    resolved through the normal channels of the Chairman or MD, or for
    which such contact is inappropriate. The Lead Independent Director
    also acts as the principal liaison between the Independent Directors
    and the Chairman on sensitive issues.

BOARD MEMBERSHIP

Principle 4: Formal and transparent process for the appointment and
re-appointment of directors to the Board

The Nominating Committee comprises a majority of Independent Directors,
including the Chairman. The members of the Nominating Committee are Mr.
Kriang Yanyongdilok, Mr. Samacha Potavorn and Mr. Kitichai
Sincharoenkul. The Chairman of the Nominating Committee is Mr. Kriang
Yanyongdilok. The duties and responsibilities of the Nominating
Committee are set out in the section titled "Nominating Committee –
Scope of Duties and Responsibilities of the Nominating Committee".

The selection, nomination, appointment and re-election processes of the
Company's Directors according to the Articles of Association of STA are
set out under the section titled "Composition and Appointment of the
Board of Directors of STA" and "Nomination of Directors". For details of
the factors taken into consideration for the selection of independent
Directors, please refer to the section "Selection of Independent
Director – Qualifications of Independent Director". The Independent
Directors shall not be under anyone’s influence and controlled by any
situation.

A retiring Director shall be eligible for re-election. The Directors to
retire in every year shall be those, subject to retirement by rotation,
who have been longest in office since their last re-election or
appointment. The details of the retirement and re-election of the
Directors are set out under the section titled "Retirement and
re-election of Directors".

The directorships or chairmanships both present and those held over the
preceding three years in other listed companies and other major
appointments by the Directors are set out below:

+-------------+-------------+------------+------------+---------------+
| Name of     | Present     |            | Three      |               |
| Director    |             |            | preceding  |               |
|             |             |            | years      |               |
|             |             |            | (2010 –    |               |
|             |             |            | 2012)      |               |
+-------------+-------------+------------+------------+---------------+
|             | Name of     | Position   | Name of    | Position      |
|             | Company     |            | Company    |               |
+-------------+-------------+------------+------------+---------------+
| 1.  Mr.     | ARIP PLC    | I          | ARIP PLC   | Independent   |
|     Prakob  |             | ndependent |            | Director and  |
|     Vis     |             | Director   |            | Chairman of   |
| itkitjakarn |             | and        |            | the Audit     |
|             |             | Chairman   |            | Committee     |
|             |             | of the     |            |               |
|             |             | Audit      |            |               |
|             |             | Committee  |            |               |
+-------------+-------------+------------+------------+---------------+
|             |             |            | Siam City  | Director and  |
|             |             |            | Cement PLC | Chairman of   |
|             |             |            |            | the Audit     |
|             |             |            |            | Committee     |
+-------------+-------------+------------+------------+---------------+
| 2.  Mr. Neo | NAC         | Sole-      | -          | -             |
|     Ah Chap | Consultancy | Proprietor |            |               |
|             | Services    |            |            |               |
+-------------+-------------+------------+------------+---------------+

BOARD PERFORMANCE

Principle 5: Formal annual assessment of the effectiveness of the Board
as a whole and its board committees and the contribution by each
Director to the effectiveness of the Board

The Board has, through the Nominating Committee, implemented an annual
evaluation process to assess the overall performance and effectiveness
of the Board as a whole and the contribution by individual directors to
the effectiveness of the Board.

The evaluation process is undertaken as an internal exercise and
involves Board members completing a questionnaire designed to seek their
views on the various aspects of the Board performance so as to assess
the overall effectiveness of the Board such as the appropriateness of
Board structure and competency mix, the degree of independence of the
Board, the accessibility to management, participation in strategic
planning, self-development process of the Board and development plan for
management, Board process and procedure, and the effectiveness of the
Board’s oversight of the Company’s performance. The criteria taken into
account in assessing each individual Director include the value of
contribution to the development of strategy, the degree of preparedness,
industry and business knowledge, and experience which are crucial to the
Group’s business.

The responses are reviewed by the Nominating Committee before submitting
to the Board for discussing and determining areas for improvement and
enhancement of the Board effectiveness. Following the review, the Board
is of the view that the Board and its Board Committees operate
effectively and each Director is contributing to the overall
effectiveness of the Board.

ACCESS TO INFORMATION

Principle 6: Board members should be provided with complete, adequate
and timely information

The Board has separate and independent access to senior management and
the Company Secretary at all times. The management provides information
requested by the Board promptly and keeps the Board informed of all
material events and transactions as they occur. Meeting agendas and
board materials are provided to all Directors with sufficient time prior
to meetings, so that there is sufficient time to seek clarification if
required. The management consults Board members as necessary and
appropriate.

The role of the Company Secretary is set out under "Company Secretary".

The Directors may, in fulfilling their duties, as a group or
individually, when necessary, direct the Company to appoint external
professionals to render advice.

REMUNERATION MATTERS

Principle 7: Formal and transparent procedure for developing policy on
executive remuneration

Principle 8: Remuneration of directors should be adequate but not
excessive

Principle 9: Disclosure on remuneration policies, level and mix of
remuneration, and procedure for setting remuneration

The Remuneration Committee comprises entirely of Non-executive and
Independent Directors. The Remuneration Committee comprises Mr. Prakob
Visitkitjakarn, Mr. Kriang Yanyongdilok, and Mr. Samacha Potavorn. The
Chairman of the Remuneration Committee is Mr. Visitkitjakarn.

The roles and functions of the Remuneration Committee is set out in the
section "Scope of Duties and Responsibilities of the Remuneration
Committee". The recommendations of the Remuneration Committee are
submitted for endorsement by the entire Board. All aspects of
remuneration, including but not limited to Directors’ fees, salaries,
allowances, bonuses, options and benefits-in-kind shall be covered by
the Remuneration Committee.

Please refer to the section titled "Remuneration of Directors and
Executive Officers" for information on the remuneration of the Company's
Directors and Executive Officers.

The remuneration of employees who are immediate family members of
Directors for the year ended 31 December 2012 are as follows:

+------------------------+-----------------------+--------------------+
| Name                   | Relationship          | Remuneration Band* |
+------------------------+-----------------------+--------------------+
| 1.  Mrs. Promsuk       | Spouse of Dr.         | Band   V           |
|     Sincharoenkul      | Viyavood              |                    |
|                        | Sincharoenkul,        |                    |
|                        | Managing Director of  |                    |
|                        | the Company           |                    |
+------------------------+-----------------------+--------------------+
| 2.  Mr. Anek           | Brother of Mr. Anan   | Band  II           |
|     Pruksanusak        | Pruksanusak           |                    |
+------------------------+-----------------------+--------------------+
| 3.  Mr. Somboon        | Brother of Mr. Anan   | Band II            |
|     Pruksanusak        | Pruksanusak           |                    |
+------------------------+-----------------------+--------------------+

Note*:

Band I    means remuneration between SGD 1 and SGD 50,000

Band II    means remuneration between SGD 50,001 and SGD 100,000

Band III    means remuneration between SGD 100,001 and SGD 150,000

Band IV    means remuneration between SGD 150,001 and SGD 200,000

Band V  means remuneration between SGD 200,001 and SGD 250,000

ACCOUNTABILITY AND AUDIT

Principle 10: The Board should present a balanced and understandable
assessment of the Company’s performance, position and prospects

The Board has adopted a policy of openness and transparency in the
conduct of the Company’s affairs while preserving the commercial
interests of the Company. The Company reports its financial results
quarterly and presents such financial results in a balanced and
understandable manner.

Financial results and other price sensitive information are disseminated
to shareholders via SGXNET and on the website of the SET, to the SGX-ST
and SET as required, press releases, the Company’s website and through
media and analyst briefings. Any information disseminated on the website
of one stock exchange is simultaneously released on the other as well,
in order to preserve parity of information between shareholders on both
exchanges.

The Company will also hold annual investor forums in Singapore where CDP
depositors can meet the Directors. At the minimum, the Managing
Director, two other Executive Directors and two Independent Directors,
one of whom will be the Lead Independent Director, will be present at
the investor forum. Shareholders will have the opportunity to be briefed
on the Company's performance and may raise any queries directly with the
Directors present.

RISK MANAGEMENT AND INTERNAL CONTROLS

Principle 11: Sound system of risk management and internal controls

Risk Management

Risks

As a result of the Company's multi-national platform, it is exposed to
various types of financial risks, such as foreign exchange risk,
interest rate risk, credit and counterparty risks and liquidity risk.
The Company uses forward and simple option contracts and interest rate
swaps to hedge certain risk exposures.

The Company actively monitors and manages these risks associated with
its business activities through an experienced risk management group
which is responsible for identifying, evaluating, managing and
controlling such risks.

Foreign exchange risks

The Company is exposed to foreign exchange risks arising from its
exposure to currencies such as Indonesian Rupiah and US Dollars. These
foreign exchange risks arise primarily from the difference of currencies
dominated in the Company's sales and costs. As the Company presents its
income statement in Baht, it generally benefits in the event the US
Dollar appreciates against the Baht. The Company generally manages its
foreign exchange risk through the use of forward and simple option
contracts.

The Company is also exposed to foreign currency translation risks in
respect of its investments in foreign operations. The Company does not
hedge its exposure to such risks as the management believes that the
exposure to such risks is not significant due to the long-term nature of
the Company's investments in foreign operations.

Price risks

Prices of commodities in general, including natural rubber, have been
volatile and the Company, like other participants in the natural rubber
industry, is exposed to the risk of fluctuations in the price of natural
rubber. To mitigate such risks, the Company monitors the demand and
supply of natural rubber as well as prices of Natural Rubber Products.
Through its long-established relationships, diversified customer base
and negotiation power with buyers, the Company is able to transact sales
of Natural Rubber Products either on a spot basis or long-term
contracts, depending on various factors, including the price of natural
rubber. In the event the Company is unable to transact its sales of
Natural Rubber Products, it may enter into hedging arrangements through
the use of rubber futures contracts.

Interest rate risks

The Company has fixed and floating interest rate borrowings. Interest
rate risks refer to the Company's exposure to interest rate fluctuations
on the Group’s borrowings. The Company manages its exposure to interest
rate risks by ensuring that the majority of the borrowings have a
suitable repayment term as necessary for the use in such period and
considering the trend of the interest rate in such period.

Credit and counterparty risks

A large portion of the Company's sales are to customers in various
countries and territories in Asia such as, the PRC, India, Singapore,
Japan and Korea and to the United States and Europe, for which the
Company will require letters of credit from customers or cash against
the presentation of documents of title. As such, the Company is exposed
to credit and counterparty risks arising from normal business activities
if its customers or counterparties fail to meet their contractual
obligations. To mitigate such risks, the Company only transacts with
counterparties after taking steps to assess their creditworthiness while
also taking into account past transactional experience with such
counterparties and their financial position. The Company also regularly
monitors its counterparties’ use of the credit limits which have been
granted, with a specific focus on the counterparties identified as being
of higher risk of default. Additionally, for sales into the PRC, the
Company generally requires payment of cash on delivery and may grant
substantial customers credit terms from the date of issuance of the
invoice.

The Company is also exposed to credit risks with respect to the cash
deposits which it places with and derivative financial instruments which
it enters into with banks and financial institutions. The Company
assesses the creditworthiness of the banks and financial institutions
with which it transacts and mitigates its exposure by increasing the
number of banks and financial institutions with which such cash deposits
are placed.

Liquidity risks

The working capital cycle for the Natural Rubber Products produced, from
the purchase of raw materials to the receipt of payment from customers,
is approximately two to four months. As such, the Company regularly
monitors its liquidity requirements to ensure it has sufficient cash to
meet its operational needs while also maintaining sufficient headroom on
unutilised committed borrowing facilities at all times so that the
borrowing limits or covenants on its credit facilities are not breached.
Additionally, the Company believes that due to the global demand for
Natural Rubber Products, there is a ready market for its inventory and
should be able to sell them quickly in the event that the Company is in
need of funds.

Internal control systems

The following sets out a summary of the Company's internal control
system and functions implemented to handle the risks related to the
business:

-   Management Activity Control System – The Board of Directors sets the
    operating goals of the Company by determining the clear mission,
    detailed operating plan of each department, and Key Performance
    Indicators (KPIs) in financial outcome, operating output, and
    customer satisfaction. Such control is closely monitored every
    month. The Board of Directors also annually reviews the adequacy and
    effectiveness of the Company's internal control systems.

-   Risk Assessment – Changing environments may cause business at risk
    and negative impacts, therefore continuous risk assessment and
    monitoring are required. Each department shall assess its risk and
    prepare the solution plan. In addition, there is a management
    meeting every month to evaluate the current situation and select
    strategy to cope with the possible risks.

-   Control System – The Company clearly determines measures and
    implementation plans by issuing orders, rules, approval authority,
    and working procedures for the management and all employees.

-   Information and Communication – STA has moved towards “IT
    governance” to manage and control its IT system efficiently with IT
    risk management system based on international standard level. The
    goal and plan of the IT system are set based on the nature of STA's
    business and conforms with related laws and regulations. To minimize
    the incidences of errors or misleading information, users can only
    access the IT system through the channel provided by STA. In
    addition, STA provides backup and IT continuity plan in preparation
    for an emergency event. Nowadays, the Company has various
    communication networks, via both the Internet and its Intranet. The
    Internet is a communications channel between the Company and
    stakeholders such as shareholders, investors, and other external
    parties. For internal communication within the Group, the Intranet
    is the key method for correspondence. This ensures efficiency and
    accuracy of information, and that information is delivered in time
    to all related parties.

-   Monitoring and Evaluation Systems – To monitor the operating
    performance of all business units, each business unit reports its
    operating performance to the management every month. The internal
    audit team also frequently audits all operating units and reports to
    the Audit Committee quarterly.

-   Risk Reporting – Daily reports setting out the aggregate amount and
    cost of raw materials purchased are generated by the managers of
    each of the Company's rubber processing facilities. In addition, the
    Company's sales and marketing department also generates a daily
    sales and inventory report. The senior management team utilises
    these reports to determine the net position of the Company's sales
    and cost of goods sold, and hence, the exposure to the various
    risks.

-   Reviews – The managers of the Company's rubber processing facilities
    meet with the procurement and sales and marketing teams on a monthly
    basis, to prepare the budget (including the targeted monthly
    production capacities for each of the Company's rubber processing
    facilities as well as the sales targets for the month). These
    targets are set after taking into account several factors such as
    the estimated effective production capacity at each of the rubber
    processing facilities, the supply of raw materials that the Company
    is able to acquire, the demand for Natural Rubber Products, the
    price of natural rubber in the commodities markets and other general
    economic conditions. Such budgets are then reviewed by the senior
    management team before they are implemented. Through these monthly
    budget meetings and the setting of targets, the Company has
    established procedures which it believes allows it to achieve
    maximum return on investments within the appropriate risk parameters
    that are set by the senior management team from time to time.

The Board of Directors with the concurrence of the Audit Committee is of
the opinion that the Company’s internal controls in the past year are
adequate and effective. The details are set out under “Audit Committee
Report”.

The Board of Directors have received assurance from the MD and the CFO
that the financial records have been properly maintained and the
financial statements give a true and fair view of the Company's
operations and finances; and the effectiveness of the Company's risk
management and internal control systems.

Principle 12: Establishment of Audit Committee with written terms of
reference

The Audit Committee comprises entirely of Non-executive Directors,
namely, Mr. Prakob Visitkitjakarn, Mr. Kriang Yanyongdilok and Mr.
Samacha Potavorn. The Chairman of the Audit Committee is Mr.
Visitkitjakarn.

The Audit Committee have meeting quarterly and privately meet with the
internal audit team and external auditors at least once a year without
the presence of management to review the adequacy of audit arrangement,
with particular emphasis on the scope and quality of their audits, and
the independence and objectivity of the internal and external auditors.
The Audit Committee has the duties and responsibilities as set out under
"Scope of Duties and Responsibilities of the Audit Committee".

The Company's auditors have not provided any non-audit services and as
such, the Company has not paid non-audit fees to the auditors.

INTERNAL AUDIT

Principle 13: Establishment of an effective internal audit function that
is adequately resourced and independent of the activities it audits.

The Company recognises the importance of an internal control system,
risk management system, and operational control, to ensure that all
employees and the Executive Board share their duties and
responsibilities so that all share the same goals.

Independent internal audit function

The Company's Internal Audit Department is an independent unit, which
reports directly to the Audit Committee. Under the Company's yearly
internal audit plan, the Internal Control Department will perform an
audit of the internal controls system, implement the risk management
system, and provide general advice under the "Standard for the
Professional Practice of Internal Auditing". This standard is an
operating guideline and framework of internal audit that focuses on
independent, just, and international standard operations with high
quality auditing work. Guidelines for the development and training of
internal audit staff are also included in the standard.

The Internal Audit Department provides adequate staffing with relevant
experience to conduct the internal audits and has full, free and
unrestricted access to all data of the Company that it requires to carry
out its function. The Internal Audit Department is responsible for the
internal auditing of all business unit operations of the Group under its
annual internal auditing plan and provides advice to improve the
internal audit system. The main considerations are primarily business
and operational risks.

The Audit Committee continuously reviews the performance and the
adequacy of the internal audit function. In addition, the Audit
Committee may recommend improvements to the internal audit and internal
control systems to the Board of Directors.

SHAREHOLDER RIGHTS AND RESPONSIBILITIES

Principle 14: Fair and equitable treatment of all shareholders

Principle 15: Regular, effective and fair communication with
shareholders

Principle 16: Greater shareholder participation at general meetings of
shareholders

The Company aims to provide timely information to shareholders, and such
information should be substantial and clear in relation to the matters
at hand. The Company ensures that all shareholders should be equally
informed of all major developments impacting the Group, and is
accessible and responsive to the public at all times.

For more information on communication with shareholders, please refer to
the section titled "Corporate Governance – Principles of Good Corporate
Governance under the Principles of Good Corporate Governance for Listed
Companies of 2006 – Rights of Shareholders" and "Corporate Governance –
Principles of Good Corporate Governance under the Principles of Good
Corporate Governance for Listed Companies of 2006 – Fair Treatment for
Shareholders".

7.  Corporate Social Responsibility (CSR)

Over the past 25 years that Sri Trang Group has committed to process and
export Natural Rubber products, we have dedicated to conduct business
with good practices of corporate governance and Corporate Social
Responsibility (CSR). Therefore, in 2012, the Company has announced CSR
policy. Our philosophy is to grow along with the community and society
and to be an effective mechanism to constantly strengthen the stability
of rubber industry. We value our way to conduct business in parallel
with creating activities for communities and societies, maintain our
environmentally-friendly production, create a fair trade standard to
gain trust and acceptance from rubber farmers and customers, consider
the impact on every aspect from business operations to all stakeholders
including shareholders, employees, customers, suppliers, communities,
and government agencies, as well as create the attitude and
organisational culture to make employee participate more in CSR
activities.

Policy and guideline practices for CSR of Sri Trang Group, our core
mission, lays on the five meaning of “GREEN” Natural Rubber as follows;

1.  Good Corporate Governance

The company is dedicated to good practices of corporate governance
focusing on the structure of the Board of Directors, management, and
shareholders to create a competitive advantage which will build growth
and increase value of shareholders in the long run. In addition, other
stakeholders are also taken into consideration.

2.  Responsibility to Supply Chain

Sri Trang Group's core business is to produce primary natural rubber
products (Midstream processing). Yet, the Company has extended business
line to cover the whole supply chain right start from rubber plantations
to the production of finished products. This allows the Company to
strictly control the quality of products to respond downstream business
who focus on the quality of the product at most. Another main concern of
downstream businesses, whether latex examination glove producers or tyre
makers, is to ensure the safety for users. Thus, our responsibilities
through supply chain management cover;

1.  Rubber farmers and rubber dealers: Our Group is strived for fair,
    transparent, clear principles, and accountability procurement of
    natural rubber which is the main raw materials for our production.
    We also encourage rubber farmers to produce high quality of rubber
    without contamination and to properly store the rubber so that the
    quality of raw materials will meet our factory’s standard. Moreover,
    we support rubber farmers with knowledge to properly operate rubber
    plantations in order to increase yield which will in turn increase
    their revenues as well as sustainable quality of life.

2.  Customer: Our Group is committed to produce high quality products
    and provide good services to create the highest satisfaction for the
    customers. We sincerely handle complaints from customers and
    promptly improve and correct flaws that might be caused from
    productions and/or services to create the highest effective and
    efficient production.

3.  Environmental Friendly and Safe Operation

As our Group's nature of business is directly related to the natural and
environment, we strictly adhere to environmental practices by
implementing the effective environmental management systems. We also set
up measures to prevent and minimize the environmental impacts caused by
different activities from our Group to comply with laws and regulations.
Furthermore, we aim to develop and promote more green areas within the
factories to retain moisture, increase fresh air, and reduce unfavorable
odors from production process. In addition, we reduce the use of
chemicals in rubber plantation and production of natural rubber products
as well as finished products since it might affect the environment and
communities in the long run.

Aside from environmental-friendly production and being aware that we are
part of community, we stick to practice guidelines to preserve and
maintain the ecological and social environment of the surrounding
communities which will not only create the livable community but also
support companies to smoothly and steadily run the business in the long
term.

In terms of health & safety, our Group fully complies with laws,
regulations and other related requirements. We provide training, set up
adequate and effective health & safety rules and plans in workplace, and
create a safe working environment for employees, contractors, and the
other related parties.

4.  Engagement with Transparency

Our Group is committed to operate business with fairness, transparency,
and accountability in all process. We believe that to operate business
with fairness and ethic, comply with laws, and respect the rules of
society could build confidence of stakeholders and reduce conflict of
interest. This will benefit business operation of the company in the
long run. We also encourage every level of our employees to work with
integrity and adhere to ethic of business. Employees should not exploit
benefits that may cause conflict of interest to the Company and its
stakeholders and should not improperly indulge on business operation. We
also have a policy against all forms of corruptions to establish
standards of transparent business operation which will benefit the
organisation and rubber industry in the long run.

5.  Nurture Sustainability Attitudes Towards Organisation

The Company believes that effective and sustainable CSR practices is
rooted from the awareness of employees in every level from all
departments. They need to have a positive attitude to follow the
policies and have responsibility to society and other related parties.
Our people also volunteer to participate in the community development
and of business partners’ quality of life improvement. Moreover, they
cooperate to change their working behavior and daily lifestyle in
accordance with environmental conservation guidelines, to reduce energy
consumption costs, and to enhance the effectiveness of organisation.

The Company promotes and supports staffs to devote to social activity,
for example, to volunteer and participate activities of community,
alleviate natural disaster victims, appropriately and continuously
support any kinds of shortages in the community, and create a benevolent
society and social care for each other to remain forever. Besides, we
place great emphasis in manufacturing quality products for our customers
and at the same time giving back to our community and conserving our
planet’s resources.

The activities employed in 2012 can be summarized as follow:

-   Supported Baht 300,000 to develop “Tapping Skill Development
    Training Programme” with cooperation of Rubber Replanting Aid Fund
    Association for northeastern rubber farmers. There have been 4
    programs conducted in Mukdahan, Sakon Nakhon, Udon Thani, and Loei
    province. More than 150 rubber farmers learn how to properly operate
    rubber plantations in order to safe and extend life of rubber tree.

-   Contributed Baht 2,000,000 to support University Sports No. 39 of
    Prince of Songkla University.

-   Contributed Baht 200,000 to Rubber Replanting Aid Fund Association
    to support annual honorable retirement event.

-   Granted scholarship to the students of Wad Jang School in Trang
    province and Baan Koksamed School in Songkhla province

-   Fishing for lunch project and library construction for Baan Kok
    Petch School in Buriram province.

-   Contributed sport equipment, sport shirts, and prize for sport
    competition of Baan Jumpa Prachanuchror School and Baan Koi School
    in Udon Thani province.

-   Donate Baht 400,000 to build the arch at Mae Gaew Tai Temple in
    Chiang Rai Province

-   Supported local traditional activities such as long boat racing in
    Bueng Kan and Mukdahan province.

-   Provide blood donation to Red Cross every year across our factories
    nationwide.

In addition, we aim to have our products associated with not only being
of quality, but being environmentally friendly and natural resources
saving as well. In our normal operational and strategic policies, we
also have focused on the following initiatives.

Plantation

We have been only developing plantations on land which are approved by
the government for the cultivation of rubber trees. We have documented
and will strive to purchasing land with lawful right for planting. We
adhere strictly to environment-friendly and community-friendly policies.

Processing Efficiency

We continually improve the efficiency of our processing methods through
the modification of our production machinery. This will enable us to
minimise the production costs of Natural Rubber Products through
material savings and optimise existing production processes through the
development of innovative processing systems. For example, we have
developed various processes and systems which reduce the loss of raw
materials through in-process recycling of raw materials.

Energy Savings

We adhere to the Energy Conservation Promotion Act by creating energy
saving measures and cost saving. For example, we use energy saving
materials, decrease downtime operation, reduce electricity consumption
in production process, and replace LPG gas with bio-energy and boiler to
oven the rubber.

Waste Management

We have a standardized waste water treatment system. The quality of
treated water and emitted air from our processing facilities are monthly
inspected. Moreover, we also set up waste management system to separate
and reduce waste from our factory.

Behavioral Change

We also regularly promote behavioral change of our staffs towards
environmental friendly habits. For example, we have instituted campaigns
to reduce global warming by encouraging the use of cloth bags in place
of plastic bags and the use of bicycle instead of fuel-consuming
vehicles at our production facilities, and promote waste separating for
recycle and reduce waste for disposing.