Part 3.

11. Financial Highlight

(1) Financial statements

  The company paid 530,000 THB to the auditor for audit fee. There was
  no non-audit fee.

(a) Auditor report

The auditor has reported the financial statements of Pato Chemical
Industry Public Co., Ltd. as of 31 December of 2011 - 2014 without any
conditions.

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

  PATO Chemical Industry Public Company Limited and Subsidiary

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

Separated financial statements Consolidated

  -------------------- --------- ------- --------- ------- --------- ------- --------- ------- -- --------- ------- --------- ------- --------- ------- --------- -------
                       2011              2012              2013              2014                 2011              2012              2013              2014      

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

  ASSETS                                                                                                                                                          

  CURRENT ASSETS                                                                                                                                                  

  Cash and cash        181,028   31.09   11,105    2.08    55,928    8.57    7,611     1.20       185,992   31.95   15,933    3.00    73,397    11.19   22,368    3.50
  equivalents                                                                                                                                                     

  Short - term         178,930   30.73   275,431   51.68   229,356   35.14   183,806   28.90      178,930   30.73   275,431   51.59   229,356   34.98   183,806   28.77
  investments                                                                                                                                                     

  Trade accounts       52,173    8.96    62,698    11.74   129,405   19.47   119,006   18.71      54,413    9.35    62,698    11.74   118,774   17.76   109,464   17.14
  receivable                                                                                                                                                      

  Inventories          84,941    14.59   90,960    17.03   140,835   21.58   216,626   34.06      84,941    14.59   90,960    17.04   141,831   21.63   218,462   34.20

  Assets held for sale 500       0.09    -         -       -         -       -         -          500       0.09    -         -       -         -       -         -

  Advances for         -         -       -         -       -         -       -         -          -         -       -         -       -         -       -         -
  inventories                                                                                                                                                     

  Other current assets 2,240     0.38    -         -       -         -       -         -          -         -       -         -       -         -       -         -

  Total current assets 499,812   85.84   440,194   82.43   555,524   85.12   527,049   82.87      504,776   86.70   445,082   83.30   563,358   85.92   534,100   83.61

  NON - CURRENT ASSETS                                                                                                                                            

  Available-for-sale   -         -       8,998     1.09    14,304    2.19    19,851    3.12       -         -       8,998     1.69    14,304    2.18    19,851    3.11
  investment                                                                                                                                                      

  Investment in        5,000     0.86    5,000     0.94    5,000     0.77    5,000     0.79       -         -       -         -       -         -       -         -
  subsidiary                                                                                                                                                      

  Property, plant and  60,421    10.38   53,501    10.02   44,490    6.62    43,972    6.91       60,421    10.38   53,501    10.02   44,490    6.79    43,972    6.88
  equipment                                                                                                                                                       

  Intangible assets    15,101    2.59    24,079    4.51    31,514    4.63    37,461    5.89       15,101    2.59    24,131    4.52    31,720    4.84    38,196    5.98

  Deferred tax assets  -         -       -         -       1,757             2,681                -         -       -         -       1,757             2,680     

  Other non - current  1,903     0.33    2,224     0.42    16        0.00    16        0.00       1,903     0.33    2,224     0.42    16        0.00    16        0.00
  assets                                                                                                                                                          

  Total non-current    82,425    14.16   93,802    17.57   97,081    14.88   108,981   17.13      77,425    13.30   88,854    16.64   92,287    14.08   104,715   16.39
  assets                                                                                                                                                          

  Total Assets         582,237   100     533,996   100     652,605   100     636,030   100        582,201   100     533,935   100     655,645   100     638,815   100
  -------------------- --------- ------- --------- ------- --------- ------- --------- ------- -- --------- ------- --------- ------- --------- ------- --------- -------

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

                        2011            2012             2013              2014                 2011                  2012             2013              2014                          

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

  LIABILITIES AND                                                                                                                                                                      

  SHAREHOLDERS’EQUITY                                                                                                                                                                  
  CURRENT LIABILITIES                                                                                                                                                                  

  Short - term loans    -        -      36,219   6.78    53,845    8.25    51,104    8.03       -              -      36,219   6.78    53,845    8.21    51,104    8.00                
  from financial                                                                                                                                                                       
  institutions                                                                                                                                                                         

  Trade accounts        81       0.01   19,288   3.61    56,029    8.59    40,959    6.44       20,983         3.80   19,318   3.62    57,235    8.73    42,619    6.67                
  payable - related                                                                                                                                                                    
  companies                                                                                                                                                                            

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

  Accrued income tax    22,132   3.80   7,499    1.40    18,130    2.78    13,450    2.11       22,132         3.60   7,499    1.40    19,291    2.94    13,606    2.13                

  Accrued expenses      21,138   3.63   -        -       -         -       -         -          -              -      -        -       -         -       -         -                   

  Advanced receive from 5,000    0.86   -        -       -         -       -         -          5,000          .86    -        -       -         -       -         -                   
  assets held for sale                                                                                                                                                                 

  Others current        281      0.05   613      0.11    634       0.10    1,108     0.17       537            0.09   613      0.11    634       0.10    1,327     0.21                
  liabilities                                                                                                                                                                          

  Total Current         48,632   8.35   63,619   11.91   128,638   19.71   106,621   16.76      48,652         8.36   63,649   11.92   131,005   19.96   117,545   17.01               
  Liabilities                                                                                                                                                                          

  NON - CURRENT                                                                                                                                                                        
  LIABILITIES                                                                                                                                                                          

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

  Employee benefit      8,109    1.39   8,097    1.52    6,835     1.05    8,890     1.40       8,109          1.39   8,097    1.52    6,835     1.04    8,890     1.39                
  obligations                                                                                                                                                                          

  Total Liabilities     56,741   9.75   71,716   13.43   135,473   20.76   115,511   18.16      56,761         9.75   71,746   13.44   137,840   21.02   117,546   18.40               

  SHAREHOLDERS' EQUITY  -        -      -        -       -         -       -         -          -              -      -        -       -         -       -         -                   

  Share                                                                                                                                                                                
  capital-ordinary                                                                                                                                                                     
  share THB. 10.00 par                                                                                                                                                                 
  value                                                                                                                                                                                

  2009: Share                                                                                                                                                                          
  capital-ordinary                                                                                                                                                                     
  share THB. 1.00 par                                                                                                                                                                  
  value                                                                                                                                                                                

  2011, 2012, and 2013:                                                                                                                                                                
  Authorized shared                                                                                                                                                                    
  capital 142,800,000                                                                                                                                                                  
  ordinary shares.                                                                                                                                                                     
  --------------------- -------- ------ -------- ------- --------- ------- --------- ------- -- -------------- ------ -------- ------- --------- ------- --------- ------- -- -- ----- --

[TABLE]

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

Separated financial statements Consolidated

[TABLE]

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

Separated financial statements Consolidated

[TABLE]

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

Separated financial statements Consolidated

  ---------------------- ----------- ----------- ---------- ----------- -- ----------- ----------- ---------- -----------
                         2011        2012        2013       2014           2011        2012        2013       2014

  Cash flows from                                                                                             
  investing activities                                                                                        

  Cash paid for          (270,808)   (520,345)   30,000     45,663         (270,808)   (520,345)   30,000     45,663
  investing in                                                                                                
  short-term investments                                                                                      

  Proceeds from disposal 2,210       57,046      2          310            7,210       57,046      2          310
  of assets                                                                                                   

  Cash paid for          (8,202)     (14,106)    (1,515)    (6,404)        (8,202)     (4,106)     (1,515)    (6,404)
  acquisition of                                                                                              
  equipment and vehicles                                                                                      

  Cash paid for          (8,946)     (9,149)     (8,488)    (8,544)        (8,946)     (9,201)     (8,643)    (8,544)
  acquisition of                                                                                              
  intangible asset                                                                                            

  Cash paid              -           (6,338)     (6,021)    (4,813)        -           (6,338)     (6,021)    (4,813)
  available-for-sale                                                                                          
  investment                                                                                                  

  Cash paid for          (5,000)     -           -          -              -           -           -          -
  investment in                                                                                               
  subsidiary                                                                                                  

  Dividends income       -           20,157      24,597     20,130         -           20,157      16,597     12,130

  Net cash provided by   105,062     (33,490)    38,575     46,342         110,062     (33,542)    30,420     37,813
  (used in) investing                                                                                         
  activities                                                                                                  

  Cash Flows from                                                                                             
  Financing Activities                                                                                        

  Increase(decrease)in   (127,698)   36,219      15,993     (2,876)        (127,698)   36,219      15,993     (2,876)
  short-term loans from                                                                                       
  financial institutions                                                                                      

  Repayment of           -           -           -          -              -           -           -          -
  liabilities under hair                                                                                      
  purchase agreements                                                                                         

  Dividend paid          (156,800)   (151,200)   (84,000)   (128,800)      (156,800)   (151,200)   (84,000)   (128,800)

  Net cash used in       (284,498)   (114,981)   (68,007)   (131,676)      (284,498)   (114,981)   (68,007)   (131,676)
  financing activities                                                                                        

  Net Increase           147,640     (169,923)   44,824     (48,316)       152,604     (169,998)   57,405     (51,029)
  (Decrease) in Cash and                                                                                      
  Cash equivalents                                                                                            

  Cash and cash          33,388      181,028     11,104     55,927         33,388      185,902     15,993     73,397
  equivalents, beginning                                                                                      
  of year                                                                                                     

  Cash and cash          181,028     11,105      55,928     7,611          185,992     15,994      73,398     22,368
  equivalents, end of                                                                                         
  year                                                                                                        
  ---------------------- ----------- ----------- ---------- ----------- -- ----------- ----------- ---------- -----------

(c) Financial Ratio 2011-2014 Separate Financial Statements Consolidated

  ----------------------------- --------- ---------- -------- --------- -- --------- ---------- -------- ---------
                                2011      2012       2013     2014         2011      2012       2013     2014

  Liquidity Ratio                                                                                        

  Current Ratio (Time)          10.28     6.92       4.30     4.94         10.38     6.99       4.28     4.92

  Quick Ratio (Time)            8.47      5.49       3.21     2.91         8.62      5.56       3.20     2.90

  Cash Flow Ratio (Time)        2.41      (0.38)     0.77     0.31         2.41      (0.38)     0.98     0.36

  Receivable Turnover (Time)    8.88      5.65       7.57     5.62         8.79      5.54       8.21     6.24

  Collection Period (Day)       41        64         48       64           41        65         44       58

  Inventory Turnover (Time)     4.84      2.75       4.11     2.72         4.84      2.75       4.11     2.71

  Inventory T/Period (Day)      74        131        88       132          74        131        87       133

  Account Payable Turnover      7.71      8.70       5.77     4.82         6.83      6.32       5.75     4.77
  (Time)                                                                                                 

  Payment Period (Day)          47        41         62       75           53        57         63       75

  Cash Cycle (Day)              68        153        73       122          63        139        69       115

  Profitability Ratio                                                                                    

  Gross Profit Margin (%)       33.99     25.42      13.60    30.23        33.99     25.42      34.84    31.31

  Profit from operation (%)     25.40     4.15       22.52    19.56        25.39     4.13       23.95    20.59

  Other profit (%)              0.70      22.51      0.34     3.08         0.70      22.52      (1.22)   1.86

  Cash (%)                      134.87    (159.30)   45.93    27.12        134.89    (160.24)   53.96    29.23

  Net Profit Margin (%)         17.93     20.39      18.63    17.93        17.92     20.38      18.59    17.81

  Return on Equity (%)          33.02     17.28      27.41    24.88        33.01     17.27      27.55    24.86

  Efficiency Ratio                                                                                       

  Return on Total Assets (%)    26.04     15.29      22.62    20.03        26.03     15.28      22.70    19.95

  Return on Fixed Assets (%)    295.16    169.15     295.45   307.46       295.07    169.09     297.01   307.64

  Assets Turnover (Time)        145.22    75.00      121.44   111.71       145.23    75.00      122.08   112.03

  Financial Ratio                                                                                        

  Debt to Equity (Time)         0.11      0.16       0.26     0.22         0.11      0.16       0.27     0.23

  Interest Coverage (Time)      224.51    1.44       90.82    62.15        224.49    1.41       110.86   68.80

  Cash Basis (Time)             1.83      (0.13)     0.79     0.26         1.98      (0.14)     1.01     0.30

  Payout Ratio (%)              87.70     98.45      95.95    99.79        87.72     98.49      95.41    99.73

  Per Share (THB)                                                                                        

  Book Value (THB)              3.75      3.30       3.69     3.72         3.75      3.30       3.70     3.72

  Earnings per Share (THB)      1.23      0.61       0.96     0.92         1.23      0.61       0.96     0.92

  Dividend per Share (THB)      1.08      0.60       0.92     0.92         1.08      0.60       0.92     0.92

  Growth Rate                                                                                            

  Total Sale (%)                (21.54)   (8.29)     22.21    (2.54)       (21.55)   (8.29)     22.79    (2.57)

  Cost of Goods Sold (%)        (74.58)   26.39      88.90    (14.74)      (74.57)   26.44      92.12    (14.72)

  Sales Revenue (%)             6.53      (66.04)    121.40   (2.85)       6.53      (66.04)    126.62   (3.18)

  Selling & Admin Expense (%)   7.33      (56.36     78.98    0.85         7.34      (56.36)    79.77    1.10

  Net Profit (%)                (6.17     (50.51)    57.32    (3.85)       (6.20)    (50.53)    58.28    (4.33)
  ----------------------------- --------- ---------- -------- --------- -- --------- ---------- -------- ---------

2) Management Discussion and Analysis (Unit: 1,000 THB)

The performance of PATO Chemical Industry Plc and subsidiary indicated
net profit (loss) totaled THB 85.29, 134.99, and 129.15 million in 2012
– 2014 respectively. These figures represent an increase or a reduction
percentage of (50.52), 58.28, and (4.33) respectively.

In 2012, the global economy had still struggled with a minor growth
ratio. Overall, it was affected by several significant events taking
place in America, Europe, as well as Asia, for example, a political
problem caused a switch a leader of financial team in US, triggering
Quantitative Easing policy (QE); or Europe also started QE to solve
their economic crisis; Fiscal Cliff; ballooned inflation, public debt
crisis, including several earthquakes and tsunamis around the world.
These events slowed the word economic growth.

Inevitably, Thailand was one of the countries which were affected by
such events; however, the overall Thai economic growth was still 5.9%
(projected by Bank of Thailand) which was higher than the world economy,
as a result of quick responses after the flood crisis in late 2011,
especially the private industrial sector expanded their investment in
manufacturing and machinery to set off the loss, and increase their
manufacturing capacity. With the high investment by the private sector,
the private expenses grew continually. Meanwhile, the public sector set
out policies to aid and solve in the short and long run i.e.
compensation provided for flood victims, debt relief, loans with low
interest, increase in salary of government officials, pledges of
agricultural products, water management project, etc. These measures
were implemented to boost Thai economy in the short and long terms. Thai
export was also affected by the slow-down in the global economy and Euro
debt crisis, resulting in the less export value than the expected
target, but still in a range of 3.5% growth, and the lower-than-average
inflation rate owing to the government’s price control measure on
consumer products and diesel. The agricultural market environment in
2012 expanded some 4 % as the production of agricultural produces was
generally back on track after the flood crisis in late 2011. The
favorable weather also favored the expansion in productions.

In 2013, the world economy gradually and continuously recovered from
2012, but was still susceptible to the fluctuation, resulting in a
marginal growth expansion. Overall, the world economy was subject to
significant events taking place in America, Europe and Asia. For
example, at the beginning of 2013, United States encountered the fiscal
cliff, policy change in QE 3 gradually decreased in the purchase of
bonds by Federal Reserve Bank in the future which caused jitters among
the investors who hesitated to support the economic system, as well as
the political conflict on the annual fiscal budget resulted in the
temporary government shutdown. Economic problems still lingered in some
EU members’ countries that solicited for the financial support from
European Central Bank to purchase their government bonds, and created
the European Financial Stability Facility. The series of events
manifested that the EU economies was still sensitive and fragile
condition, and various measures was deployed to regain the economic
stability. In addition, the Japanese economy was subject to fragility
and JPY currency continuously tended to strengthen, affecting the export
sector. Meanwhile the economy of China seemed to slow down as the credit
granting became stringent with a close monitoring on loan sharks which
could put the national banking stability into risks because of the
mounting non-performing loans.

Thailand was one of the countries that were impacted from these events.
Still the overall Thai economy tended to slow down, resulting in minimal
growth expansion owing to a sluggish payment from the first car campaign
and government’s rice pledging scheme which faced a problem in payment,
which caused rising household debts. The private and public sectors
delayed their investments, and the export sector was affected by the
sluggish world economy and fluctuation of currencies. Thai economy was
beset by problems, as well as political unrest. The anti-government
demonstration and rallies from farmers who did not receive the payments
also smoldered the tourism segment.

In overview, the Thai agricultural economy in 2013 also suffered from
various problems. The expansion rate was at 1.1% only since the
agricultural sector sustained a severe drought in the first half year
and the decrease in the harvest of several important agricultural
produces, i.e. out-of-season rice, cassava, animal-feeding corns. In the
latter half year, the tropical storm did influence over the North,
North-East and East of Thailand, giving positive impact to the
agricultural sector as the farmers could increase the harvest of rice,
sugarcane, rubber plants, and palm. Especially the harvest of season
rice was increased due to the price incentive from the government’s rice
pledging scheme.

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

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

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

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

Sales revenue during 2012 – 2014 were THB 324.33, 734.99, and 711.66
million respectively, representing an increase (a decrease) percentage
of (66.04), 126.62, and (3.18) respectively.

Total revenue during 2012 – 2014 were THB 418.59, 726.11, and 725.12
million, representing an increase (a decrease) percentage of (56.47),
73.46, and (0.14) respectively.

Cost of Sales in 2012 – 2014 were THB 241.87, 478.91, and 488.84
million, representing an increase (a decrease) percentage of (61.63),
98.00, and 2.07 respectively.  

The gross profit of 2012 – 2014 are THB 82.46, 256.08 and 222.82
million, represent an increase (or decrease) of (74.60) %, 210.55% and
(12.99) %, respectively.

In 2012, the global economy had still been stagnant with a small growth
ratio, attributed to the significant economic factors in US, Europe and
Asia as stated above, as well as the natural disaster which still
affected the overall global economy and Thai markets. Consequently, the
Thai national market expanded 5.9% (projected by BOT). Both external and
internal factors significantly impacted the structure of Thai
agricultural production capacity, but the global and domestic demands
increased, contributing to higher expansion in crop production as the
agricultural sector generally recovered from the 2011 flood crisis,
favored by the weather and the expansion in cropping lands in late 2012.
For rice, the major reason was that the attractive price from the
government’s rice pledging scheme, resulting in the expansion of farming
lands.

In terms of export, the volume and value increased, reflecting the
demands in overseas market. Meanwhile, the volumes and values of rice,
palm oil and rubber declined as a result of decreasing price in the
global market affected by the world economic downturn mainly due to the
global economic problem. Therefore, the overseas customers purchased
such products from other countries who offered the lower price, for
example, they bought rice from India and Vietnam. Consequently Thailand
lost the title as the world’s top rice exporter, falling behind Vietnam.
In addition, there were impacts from the Act of Hazardous Substances
(the 3^(rd)) B.E. 2551 which was issued to improve the Act of Hazardous
Substances B.E. 2535, and came in to effect on August 23, 2008.
According to the new Act, the license to manufacture, import and export
the hazardous substances could have been valid until August 22, 2011
(three years after the declaration of the Act), therefore, the trader
neither imported nor manufactured the hazardous products, but was still
permitted to distribute the existing stocks for 2 years.

Currently, the Company has already applied to register the pesticide and
herbicides as the same number of products that they used to distribute,
together with additional products. On December 31, 2012, the Company has
been granted the permit to import 37 products and manufacture for 50
trade names. The Company is confident that they will continually obtain
the permit for the registration of several pesticide and herbicide
products from Department of Agriculture. However, the process of
registration takes complicated steps with many documents involved, and
must be considered by Department of Agriculture, resulting in delay in
issuing the permit and leading the declining number of products
distributed in the market. Therefore, the sales turnover in 2012 dropped
to THB 324.33 million, changing by THB (630.59) million, or 66.04%.

In terms of the cost of goods sold in 2012, it stood at THB 241.87
million, dropping by THB (388.44) million, or (61.63) %. It was founded
that the declination of the cost was lower when compared with the
decrease in sales turnover. The significant factor of the cost was a
higher cost of raw materials owing to the import of finished products
instead of Technical Grade which will be repackaged to small units, and
volatility of the oil price in the global market caused by the political
uncertainty in Middle East countries.

Besides, the volatile exchange rate of THB gave a side effect. At the
beginning of the year, the average exchange rate stood at THB31.83
/dollar, and then appreciated to THB 30.77 a dollar at the late of the
year, causing a small decrease in the cost of raw materials which
favored to the cost of productions to reduce by (74.45) % compared with
the earlier year; while the labor cost and operating cost declined
(53.84) % and (53.01) % respectively.

The Company has set out the policy and management strategies in line
with the current market situation with the highest cost effectiveness
and efficiency. In 2012, the production volume declined; therefore, the
Company reduced the number of production staff members in consistence
with the production capacity. Such impact was attributed to the
declaration of Hazardous Substance Act (the 3^(rd)) B.E. 2551. While the
Company has been await the approval of the registration of the chemical
substances, the sales turnover has declined, and the cost of production
and sales decreased by (72.87)% and (61.63)% respectively, resulting in
the gross profit as of 2012 at THB 82.46 million or 25.42%, dropping by
(74.60)% compared with 2011.

The other incomes in 2012 was THB 94.26 million, increasing by THB 87.54
million, or 1,302.68% due to the investment in debt securities at THB
30.27 million, profits from sales of assets at THB 61.55 million which
consisted of sales of 10-3-04 rai plot of land at Minburi Plant for THB
65 million and sales of old cars at THB 0.58 million, profit from
exchange rate at THB 2.24 million and others incomes at THB 0.20
million.

In 2013, the world economy slightly improved in consequence of
significant events in America, Europe and Asia as mentioned above. Thai
economy was also influenced by such events, and staggered by domestic
problems, including political conflicts and natural disasters.
Nevertheless, government implemented measures to favor farmers and
agriculturists i.e. rice pledging scheme, which raise the rice price and
encouraged the farmers to speed up the harvest.

In addition, the company progressed in registration for the herbicides
which was used to distribute, including additional product lines which
were lodged for registration since 2012 and rolled out on shelves. In
2013, the Company continuously obtained the permits from the Department
of Agriculture. The permits included the major product line i.e. Granule
used in paddy field which could gain the market share of more than 70%
of the total sales turnover.

Favored by the mentioned factors, the sales turnover of 2013 was gained
at THB 734.99 million or increased by THB 410.66 million, equivalent to
126.62%.

The sales cost as of 2013 stayed at THB 478.91 million, or increased by
THB 237.13 million, accounting for 98%. It was noted that the ratio of
increment in the sales cost was lower than those of the ratio of sales
turnover. The increase in the sales cost resulted from the higher cost
of raw materials as some finished products were imported, instead of
Technical Grade materials. Furthermore, the fluctuation of world oil
price also gave an impact to the price of raw materials. The currency
fluctuation also weakened THB value against USD. At the beginning of the
year, the exchange rate of THB stood at THB 29.86/USD and rose to THB
32.95/USD later of the year. As a result, the production cost increased
166.57% against the previous year, meanwhile, the labor cost and
operating cost increased 35.04% and 30.62% respectively.

The Company set forth a policy to run the business and manage the
manufacturing process in economic, cost-effective and efficient ways. In
2013, the more recruitment were arranged to cope with the increasing
production capacity, as the Company could continuously obtain the
permits of registration for the herbicide products from the Department
of Agriculture. Consequently, the sales turnover increases, so did the
production cost and sales cost, at 144.75% and 65.16% respectively. The
initial profit margin of 2013 was at THB 256.08 million or 34.84%, or
increased 210.55% compared to the previous year of 2012.

As for other incomes as of 2013, it stayed at THB (8.88) million and
decreased by THB 103.15 million or (109.42) % due to the income of debt
instrument investment amounting to THB 1.04 million and loss of exchange
rate in amount of THB 10.46 million resulting from the weakening THB
currency and down trend of stock market affected by QE policy which
postpone in the bond redemption.

Table showing rate of increases (reduction) during 2012 – 2014

  ---------- ---------- --------- ---------- ---------- --------- ---------- ---------- --------- ---------
             2012                            2013                            2014                 

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

  Sales      324.33     100.00    (66.04)    734.99     100.00    126.62     711.66     100.00    (3.18)

  Total      94.26      29.06     1,302.68   (8.88)     (1.21)    (109.42)   13.46      1.89      251.57
  revenues                                                                                        

  Cost of    (241.87)   (74.58)   (61.63)    (478.91)   (65.16)   (98.00)    (488.84)   (68.69)   2.07
  sales                                                                                           

  Gross      82.46      25.42     (74.60)    256.08     34.84     210.55     222.82     31.31     (12.99)
  profit                                                                                          
  ---------- ---------- --------- ---------- ---------- --------- ---------- ---------- --------- ---------

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

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

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

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

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

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

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

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

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

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

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

Sales and General Administrative expenses during 2012-2014 totaled THB
69.06, 80.03, and 76.28 million, representing an increase (a decrease)
percentage of (15.94), 15.88, and (4.68) respectively, not including
financial cost.

Financial cost in 2012 – 2014 totaled THB 0.64, 1.15, and 1.07 million,
representing an increase (a decrease) of (64.65) %, 80.34%, and (6.95) %
respectively.

In 2012, considered the classification of accounting entries, the cost
of sales as of 2012 stood at THB 18.35 million, declining by (26.78)%,
or (59.34)% compared the past year. This was because the sales turnover
of 2012 was in the wane at (66.04) % against the year earlier, caused by
the impact from the Hazardous Substance Act (The 3^(rd)) B.E 2551. The
Company has taken up the process of registration for the chemical
substances and waited for the approval. The volumes of the production
and sales significant dropped, resulting in the declination of sales and
market cost i.e. sales promotion cost, commission, transportation and
vehicle cost etc.

Meanwhile, the administration cost for 2012 was at THB 38.10 million,
increasing by THB 1.07 million, or 2.89% against the year earlier. Such
increase resulted from the benefit welfares of the employees. Regarding
the cost incurring from the interruption of production during the first
quarter of 2012, it stood at THB 12.60 million mainly owning to the
announcement of Hazardous Substance Act (the 3^(rd)) B.E. 2551. The
Company had to destroy the packaging whose the registration expired and
could not be manufactured in amount of THB 5.40 million, and the
production-related cost was THB 7.2 million as the Company has not been
granted the permit and could not start the manufacturing.

The financial cost as of 2012 was recorded at THB 0.64 million,
declining by THB (1.16) million, or (64.65) % compared with the previous
year, mainly due to the decrease in T/R interest from the declining
order of raw materials from overseas, as well as the volatility of
exchange rate caused by the global economic downtrend in many countries,
especially US. Therefore, the management of T/R settlement must have
been depended on the current market situation in order to maintain the
most economical and efficient financial cost, especially to make a
payment on specific term basis, or extend the term which might lead to
more burden in payment, but the Company would pay with the lower
exchange rate.

In 2013, based on the accounting classification, the sales expenses as
of 2013 stood at THB 39.45 million or increased by THB 21.10 million, or
114.95% against the previous year, as the sales turnover of 2013
ascended at 126.62% from the last year. The increasing sales expenses
included sales promotion, commission, transportation and vehicle cost,
etc.

Regarding the administrative cost in 2013, it was at THB 40.58 million,
or increased by THB 2.48 million or 6.51 % compared to the previous
year. The increase reflected to the ESOP scheme which started for the
first year. The Company could control the administrative cost
effectively and economically and generate more incomes from increasing
sales.

The financial cost as 2013 reached at THB 1.15 million which increased
by THB 0.51 million, or 80.34% against the past year, as a consequence
of T/R interest payment from the increasing import of raw materials. In
addition, the fluctuation in the foreign currencies and QE policy by FED
smashed THB currency. Therefore, the Company was required to take the
current market situation into their account to manage the payment of T/R
interest in order to economize and maximize the financial cost,
especially to settle the debts on timely term of payment or to extend
the payment term. In 2013, the Company considered to enhance the risk
management by purchasing Forward Contract to hedge for the risk and
minimize the financial cost.

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

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

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

Operational profits in 2012–2014 came to THB 13.40, 176.05, and 146.54
million respectively, representing a percentage of 4.13, 23.95, and
20.59 respectively.

Net profits in 2012 – 2014 came to THB 85.29, 134.99, and 129.15
million, or a percentage of 20.38, 18.59, and 17.81 respectively.

Return on equity during 2012 – 2014 were 17.32%, 27.63%, and 24.86%
respectively.

In 2012, the overall Thai economic expanded only 5.9% (projected by
BOT), due to the recovery from the flood crisis in late 2011. For the
industrial sector, they had to invest in machinery to increase the
production capacity, resulting in the private sector to expand their
business. At the same time, the public sector laid down various policies
to support and solve the problem in the short and long term. In
connection with the Hazardous Substance Act (the 3^(rd)) B.E. 2551), the
Company was unable to import the raw materials to manufacture the
products, incurring the cost caused by the stoppage of production.

Affected by the global economic downturn and the declaration of
Hazardous Substance Act (the 3^(rd)) B.E. 2551, the structure of
manufacturing and distribution has been changed, affecting the demands
in the market. Consequently, the sales turnover of 2012 receded (66.04)
% compared with the previous year; meanwhile, the cost of production and
sales ballooned as the volumes of products in 2012 manufactured shrank,
compared with those in 2011; therefore, the cost per unit was higher. In
addition, the registration process was involved with complicated steps
and time consumption. This affected and changed the manufacturing
structure, i.e., from mixing to repackaging with smaller units,
resulting in higher cost of raw materials. Nevertheless, the Company has
still focused the policy to manage the production cost with
cost-effectiveness and efficiency under the current market environment
in order to catch up with the competitors and maintain the market
shares. On the ground of the sales turnover and cost of goods sold as
stated above, the gross profit of 2012 was at THB 82.46 million or 25.42
of net sales, receding by THB (242.15) million, or (74.60)% compared
with the earlier year.

The cost of sales and administration, including the cost of production
interruption as of 2012 has declined amounting to THB (13.10) million,
or (15.94) % as a result of the significant decrease in sales amount. In
addition, the Company has still followed the marketing policy to save
the market shares, and focused on the administration action plan to
invest the business with the highest economy, cost-effectiveness and
efficiency, to generate the top profits under the restricted market
environment. The profit from the operation in 2012 was at THB 13.40
million, or 4.13% of the net sales amount, which decreased by THB
(229.05) million or (94.47) % compared with the previous year.

The profit in 2012 has waned considerably reflecting the declining sales
turnovers, as a result of the above-mentioned factors. The Company has
still required generating incomes from the existing resources, while
waiting for the permits of chemical substance registration. The
financial position of the Company was on the solid ground, especially
the Company has had a number of cash flow and deposited in banks, as
well as temporary investment. The Company efficiently managed the money
and generated the profit of THB 30.27 million, increasing by THB 24.07
million or 388.42%. In 2012, the Company sold the 10-3-04 rai plot of
land at an old Minburi Plant, earning the profit of THB 60.96 million,
and sold an old car amounting to THB 0.58 million. Besides, the Company
could earn the profits from the foreign exchange rate amounting to THB
2.24 million, increasing by THB 4.45 million or 201.96 compared with the
previous year.

Regarding the corporate tax in 2012, it was THB 21.73 million,
decreasing by THB (53.28) million or (71.03) % compared to the earlier
year. It was noted that the rate of corporate tax as of 2011 was
equivalent to 30% of the net profit; meanwhile the corporate tax rate of
2012 was at 23%of net profits. The receding sales turnovers also
contributed to the decrease in net profits; consequently, the corporate
tax in 2012 was smaller.

Under the current restriction of the major factors as stated above, the
Company could earn the satisfactory result of THB 85.29 million net
profits for 2012, accounting for 20.38% of the total income, decreasing
by THB(87.07) million , or (50.52)% . Consequently, the return margin
for the shareholders was at 17.27 %, decreasing from 33.01% of 2011.

In 2012, the Company invested in available-for-sales securities
amounting to THB 8.99 million. On December 31, 2012, the investment
amount of the available-for-sales securities have been changed its fair
value, and the Company could earn the profits from such change in amount
of THB2.66 million, or increasing by 29.56%. Therefore, the
comprehensive loss/profits for 2012 amounted to THB 87.95 million,
equivalent to 21.01 % of the total revenue.

In 2013, the sales turnovers of 2013 increased by 126.62% as a result of
the Government’s rice pledging scheme which encouraged the farmers to
expand the areas of paddy fields, especially the season rice. Besides
the Company had been granted the permits of registration for the main
herbicide products and other additional products lines, they could
import, manufacture and distribute the products to satisfy the market
demand.

Consequently, the sales turnover expanded while the production cost and
sales cost also increased, but still lower than the ratio of the sales
turnovers. Even though the cost of imported material per unit was higher
owing to the rise of world oil price and the fluctuation of foreign
currencies which caused the loss of foreign exchange and affected to the
administrative cost, the Company set forth the policy to manage the raw
material procurement, i.e. to acquire good quality raw materials at
reasonable price to be used in the increasing production line to reflect
the market demands. The Company committed themselves to manage the
administrative cost in economic, cost-effective and efficient ways under
the current market situation, maintain the competitiveness capability in
the market, and maximize the market shares. As a result of the best
efforts, the initial profit margins as of 2013 was generated at THB
256.08 million, or 34.84% of the net sales, or increasing by THB 173.62,
or 210.85% against the previous year.

The sales expenses and administration expenses, including the ones
incurred by the cessation of the production in 2012, increased by THB
10.97 million or 15.88 % to reflect the increase in sales turnover. The
Company still maintained the management policy by focusing on the
investment in the most economic, cost-effective and efficient ways to
maximize the incomes. Under the severe competition in the market, the
sales promotion was indeed necessary to encourage the market demand in
each quarter, therefore, the cost of business promotion in 2013 nosed
up. Nevertheless, the Company could manage to generate the 2013
operation profits in amount of THB 176.05 million, or equivalent to
23.95% of the net sales, or increasing by THB162.65 million, or
1,213.81% compared to the previous year.

In spite that the Company could manage to improve the operation profits
of 2013 significantly, they were still affected by the world economic
problems in USA, Europe and Asia which also hit the Thai stock market in
the latter half of 2013 and weakened THB currency. As a result, the
Company could generate the income from the investment at THB 1.04
million, or decreased by THB (29.23) million, or (96.57)%, and sustained
the loss of foreign exchange at THB (10.46) million, decreasing by THB
(12.71) million, or 566.16%.

The corporate tax as of 2013 stood at THB 31.02 million, increasing by
THB9.28 million, or 42.71% against the previous year. It was noted that
the corporate tax rate as of 2012 stayed at 23% of the net profits
before tax deduction, meanwhile the 2013 corporate tax rate was at 20%
of the net profits before tax deduction. Therefore, despite the increase
in the sales turnover and the profits before tax at 55.12%, the
corporate tax nosed up only 42.71%.

As the above reasons, the Company could manage their operation
successfully under the stringent situation and generate the 2013 net
profits in amount of THB 134.99 million, equivalent to 18.59% of the
total incomes, or increasing by THB 49.71 million, or 58.27%, and
therefore, the rate of returns to the shareholders was 27.55%, or
increased by 17.27% from 2012.

In 2013, the Company invested in the available-for-sales securities in
amount of THB 14.30 million. On December 31, 2013, the fair values of
the available-for-sales securities were adjusted, and the profits from
the adjustment was at THB 1.94 million, or increasing 15.79%, which
meant that the loss incurred due to the adjustment of fair value of the
investment in the available-for-sales securities in 2013 in amount of
THB 0.72 million, and the loss incurred due to the adjustment in the
deferred income tax under Gain (loss) on change in value of available
sale investments in amount of THB 0.53 million. Therefore, the
comprehensive incomes for 2013 stood at THB 134.42 million or equivalent
to 18.51% of the total income.

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

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

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

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

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

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

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

Total assets in 2012-2014 amounting to THB 533.94, 655.65, and 638.81
million respectively, marked an increase (a decrease) at a percentage of
(8.29), 22.79, and (2.57) respectively.

Total liabilities in 2012-2014 amounting to THB 71.74, 137.84, and
117.54 million, marked an increase (a decrease) percentage of 26.39,
92.14, and (14.73) respectively.

Shareholder equity in 2012-2014 amounting to THB 462.19, 517.81, and
521.27 million, marked an increase (a decrease) of (12.03) %, 12.03%,
and 0.67 respectively.

In 2012, the sales turnover decreased (66.04) %, generating the 2012
profit of THB 85.29 million. As a result, the Company’s financial
statement was significantly changed from 2011, attributed to the impact
from the market environment and the Hazardous Substance Act as mentioned
earlier. Consequently, the total assets decreased by THB (48.26)
million, or (8.29) % compared with the previous year, i.e. the cash flow
and cash deposited in banks decreased by THB (170) million, and the
temporary investment increased by THB 96.50 million, trade receivables
and other receivables were at THB 8.28 million, the inventory stock was
in value of THB 6.02 million, investment for available-for-sales
securities was worth of THB 8.99 million, and the Non-current assets
amounted to THB 11.43 million.

The total debt increased by THB 14.98 million, or 26.39 %, compared to
the previous year, mainly due to the increase in the short-term loans
granted from financial institution (creditor T/R) in amount of THB 36.22
million, and decrease in the trade account payable and income tax
payable in amount of THB (16.30) million, and drop of others in value of
THB (4.92) million.

Therefore, as a result of the performance as of 2012, the cash flow
decreased by (106.57) %, consisting of the decrease in the liquidity
from 10.38 times in 2011, to 6.99 times in 2012. The quick ratio
decreased from 8.62 times in 2011 to 5.56 times in 2012. The cash ratio
decreased from 2.4 times in 2011 to (0.38) times in 2012, the average
collection period increased from 41 days in 2011 to 64 days in 2012, the
average holding period increased from 74 days in 2011 to 131 days in
2012, the payment period decreased from 53 days in 2011 to 41 days in
2012, therefore, the cash cycle remained 153 days. It was noted that the
liquidity ratio decreased, but was still in a good range, mainly due to
the declaration of Hazardous Substance Act, causing the decrease in
sales amount, and production interruption while the permit of
registration was in process. The raw materials were not ordered from
overseas suppliers and only the raw materials and packaging was
purchased from the local suppliers to brace for the production after the
permit is granted. Until the 2^(nd) quarter of 2012, the Company
received the permits of chemical substances for pesticide and herbicide,
and started its production process, and ordered a few raw materials from
overseas suppliers as per the permit granted. Consequently, in 2012, the
Company still maintained a large amount of cash, cash deposited in
banks, and temporary investment, and there were a few of T/R creditors.
However, the Company was still required to pay a large amount of
corporate tax, resulting in the decrease in the operating cash flow.

The cash flow from the investment activities decreased by (130.47) %,
compared with the previous year. The Company allocated more in the
temporary investment amounting to THB 91.10 million in 2012. The Company
sold the plot of land at Minburi plant and old car, and earned the
dividends from the temporary investment. The Company also purchased
machinery and vehicles in amount of THB 4.11 million, and settled the
operating cost for registration process amounting to THB 9.2 million,
and unearned revenue from the asset disposal in amount of THB 6.33
million.

The cash flow in income earning activities also lessened (59.58) %
compared with the earlier year as the there was a purchase of raw
materials from overseas, and there were T/R creditors in 2012, amounting
to THB 151.20 million, and the settlement period and dividend payment
has not been due yet

In connection with the sales turnovers which decreased (66.04) %, the
cash or cash equivalent was at THB (169.99) million, lessening by THB
(322.60) million, or 211.39%

The capital structure was composed of the liability ratio against the
portion of shareholders increasing from 0.11 in 2011 to 0.16 in 2012,
due to the increase in the current liability incurred from T/R
creditors. The liability ratio slightly expanded, but it was still
considered in a good shape.

EBITDA decreased from 224.51 times in 2011, to 1.41 times in 2012. The
operating cash flow significantly reduced from the shrinking sales
turnover. Consequently, the Company’s liquidity became lessening,
affecting the EBITDA coverage ratio.

Simultaneously, the Company’s overall operating result declined
significantly. Due to the current market environment and Hazardous
Substance Act, the sales turnover decreased, nevertheless, the Company
still managed their finance stance efficiently and enabled to make
profits from the limited resources, including asset disposal. The
Company’s yields on assets reduced from 26.03% in 2011 to 15.28% in
2012, and the yields on fixed assets declined from 295.07% in 2011 to
169.09% in 2012, and the total asset turnover ratio lessened from 145.23
times in 2011 to 75 times in 2012, reflecting the decrease in the asset
investment and the Company’s operating result under the declaration of
Hazardous Substance Act.

In 2013, the increase in the turnover at 126.62 % yielded the net profit
at THB 134.99 million. Therefore, the financial position significantly
changed from 2012. Having been impacted by economic problems, political
issues on the rice pledging scheme and permits on the registration of
herbicide chemicals, the Company could gain the overall assets at THB
121.71 million, or increasing 22.79% compared to the last year. The
major increasing (decreasing) items included the cash flow or equivalent
at THB 57.40 million, account receivables and others debts at THB 53.73
million, the inventory at THB 50.87 million and the investment in the
available-for-sales securities at THB 5.31 million and the decreasing
items include the temporary investment at THB (46.07) million.

The total debt increased to THB 66.10 million, or 92.14% against the
previous year, comprising the short-term loan from financial institution
(T/R creditors) at THB 17.63 million, payables and others at THB 37.92
million, and income tax payable at THB 11.79 million, etc.

The shareholder’s equity increased THB 55. 62 million, or 12.03%,
against the previous year, mainly from the increment of the reserve of
share warrants which has not been used under ESOP project in amount of
THB 3.89 million in the 3 year validity (2013-2015), the increase in the
an unappropriated retained earnings at THB 52.82 million, and decrease
in others contributing factors of shareholders at THB 1.56 million,
consisting of the loss from the available-for-sales securities and
deferred income tax, as clarified above.

The significant change in the financial statement regarding the main
assets reflected the increase in the sales turnover which was required
to be prepared in terms of the inventory stock, i.e. raw materials,
packaging materials and finished products to support the production
process to satisfy the market demand. Therefore, the inventory stock
increased. Meanwhile, the payables and others, including the short term
borrowing from financial institution (T/R payables) also increased as
the Company purchased the raw materials required for the production
process. When the sales volumes expanded, the Company gained more cash
flow and trade receivables. In addition, the expenses in production,
sales and administration, as well as corporate tax increased to reflect
such the expansion of sales volumes.

Therefore, the operating cash flows increased 542.34%, with the 4.30
times liquidity ratio, decreasing from the 6.99 times liquidity ratio as
of 2012. The quick liquidity ratio reduced to 3.22 times in 2013 from
5.56 times in 2012, the cash ratio increased from (0.38) times in 2012
to 0.98 times in 2013, the average collection period reduced from 65
days in 2012, to 44 days in 2013, and the average payment period
increase from 57 days in 2012 to 63 days in 2013. Therefore, the cash
cycle was 69 days, and the liquidity ratio reduced to reflect the
expanding sales volumes, and increasing liabilities due to the increment
in the purchase of raw materials, and expenses in production
distribution, sales and administration.

The cash flow from the investment activities rose 190.69%, compared to
the previous year. In 2013, the Company invested more the temporary
investment in amount of THB30 million and gained the dividends of THB
16.60 million. The machinery, equipment and vehicles were purchased in
amount of THB 1.15 million. The registration cost under the new
Hazardous Chemical Act was also settled in amount of THB 8.64 million
and the available-for-sales securities were invested in amount of THB
6.02 million.

The cash from the financing activities increased (40.85)% compared to
the last year, as the raw materials were purchased from overseas, which
lead to T/R payables in 2013 which have not been due for settlement and
dividend payment in amount of THB 84.00 million.

Based on the expanding operations in 2013, the Company gained more cash
and equivalent at THB 57.40 million, increasing by THB 227.40 million or
133.77%.

Based on the capital structure, the debt to equity ratio increased from
0.16 in 2012, to 0.27 in 2013. The increase reflected the higher current
liabilities from T/R payables and trade accounts and other payables, but
was still in the acceptable range.

The interest coverage ratio increased from 1.41 times in 2012 to 110.85
times in 2013, as the operating cash flow and sales turnover increased,
resulting in the higher liquidity of the Company.

At the same time, the Company’s performance was enhanced and yielded the
net profit margins due to the current economic environment, climate and
the government’s scheme which encouraged agriculturist to increase their
agricultural products, as well as obtaining the registration permits on
the major herbicide products.

The operation result as of 2013 and gains from the assets increased from
15.28% in 2012 to 22.70% in 2013. The return on fixed assets increased
from 169.09% in 2012 to 297.01% in 2013, and the total asset turnover
increased from 75.01 times in 2012 to 122.08 times in 2013. The
improvement in the operation revealed the capability in generating the
profit margins by using the assets in efficient and cost effective ways.

Based on the capital structure, the Company laid down a financial policy
prudently and effectively to earn the highest yields with minimum risks,
and also took the investment-related expenses into account. For example,
the registration for chemical substance was considered as sizeable
investment; the policy, action plan and management for registration of
chemical substances were set out to obtain the permits as soonest as
possible; the policy for raw material supplies was considered to
purchase with appropriate quantity, quality and price in line with the
current situation and registration progress, as well as the action plan
and market strategies were also set forth to respond to the high
competitive market; various external and internal factors must be taken
into consideration, i.e. volatility of currency and the management of
overseas settlement terms, in order to hedge the possible risks and cope
with the financial situation appropriately with the highest economy and
efficiency.

The Company has still put a strong emphasis on the financial stability
by investing the current liabilities in the current assets in order to
strengthen the liquidity and earn the highest yields. This resulted in
the most economic financial cost in order to earn the highest yields for
the shareholders, and also maintain the important financial ratio in the
best levels, as shown in the performance as of 2013 as explained above.

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

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

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

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

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

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

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

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

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

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

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

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

The Company has continuously recognized the importance of financial
stability. Therefore, the Company has a policy to carefully manage its
finance by using its current liabilities to invest in current assets in
order to achieve financial liquidity and maximum returns while making
the most efficient use of financial capital possible. This goal is to
generate the highest returns to shareholders while keeping important
financial ratios in good levels, which can be seen in the operating
results of 2014, as mentioned earlier.

The significant contributing factors which will affect the Company’s
operation in 2015 includes the 3.5-4.5% expansion of economy, as well as
the vulnerable agricultural environment which will be subject to
negative impacts, such as, the global slow growth economies, the
financial problems in Europe, droughts and political problems in Russia.
Besides, financial policies of various countries lead to volatility of
capital flows due to the interest loan rate adjustment. These factors
create uncertainties among investors and impact on global stock markets,
including Thailand. World crude oil prices continue to fluctuate over
time and the exchange rate has an impact on Thai baht. All these factors
affect the export of agricultural products.

Nevertheless, it is estimated that the agricultural economy in 2015 will
expand in a range of 2% -3% under the above-mentioned factors, the risk
of water management and climate change, and the outbreak of plant
diseases, as well as the price drop of agricultural products which will
cause the drop of liquidity and purchasing power of farmers.
Consequently, demand of agrochemical products will decrease. However, it
is expected that under the climate change which shall be the same as
2014, some of the agricultural produces will tentatively increase, such
as in-season rice, Para rubber while out-of-season rice price tend to
drop due to insufficient water management. Therefore, the price of
agricultural produces in 2015 mostly remains proximate with those in
2014. The overall increase in agricultural productivity will result in
the higher export trend of agricultural products which likely to pick up
from the steady growth of global economy. Another important factor is
the global climate change that may result in damage to the agricultural
sector. This will affect the price and the export of Thailand.

The registration process for the new products also helps enhance the
production capability to satisfy the market demand. At present, the
Company has continuously sought for the permits of registration of new
products, therefore, the sales volumes of 2015 is expected to increase
when compared to 2014. Besides, there are still positive factors
favoring the agricultural sector in the aspect of both production and
price, namely, the government’s policy and measures to help the farmers
and agriculturists to access to the financial supports, such as, Nano
Finance, providing financial assistance to agriculturists as subsidies
compensate to farmers and agriculturist of para-rubber plantations, and
so on in order to give them an incentive, to enhance the production
capacity and to lift up the price.

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

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

2.   Marketing - Helping to sustain agricultural prices by providing
farmers with loans using their agricultural goods as collateral. This
will keep agricultural prices from falling too low and let market forces
operate on their own.

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

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

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

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

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

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

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

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

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

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