Part 3.

11. Financial Highlight

(1) Financial statements

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

(a) Auditor report

The auditor has reported the financial statements of Pato Chemical
Industry Public Co., Ltd. as of 31 December of 2012 - 2015 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

  -------------------- --------- ------- --------- ------- --------- ------- --------- -------- -- --------- ------- --------- ------- --------- ------- --------- --------
                       2012              2013              2014              2015                  2012              2013              2014              2015      

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

  ASSETS                                                                                                                                                           

  CURRENT ASSETS                                                                                                                                                   

  Cash and cash        11,105    2.08    55,928    8.57    7,611     1.20    24,639    3.86        15,933    3.00    73,397    11.19   22,368    3.50    29,499    4.61
  equivalents                                                                                                                                                      

  Short - term         275,431   51.68   229,356   35.14   183,806   28.90   180,305   28.25       275,431   51.59   229,356   34.98   183,806   28.77   180,305   26.17
  investments                                                                                                                                                      

  Trade accounts       62,698    11.74   129,405   19.47   119,006   18.71   130,521   20.45       62,698    11.74   118,774   18.12   109,464   17.14   125,906   19.67
  receivable                                                                                                                                                       

  Inventories          90,960    17.03   140,835   21.58   216,626   34.06   192,581   30.17       90,960    17.04   141,831   21.63   218,462   34.20   197,918   30.92

  Assets held for sale -         -       -         -       -         -       -         -           -         -       -         -       -         -       -         -

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

  Other current assets -         -       -         -       -         -       -         -           -         -       -         -       -         -       -         -

  Total current assets 440,194   82.43   555,524   85.12   527,049   82.87   528,046   62.73       445,082   83.36   563,358   85.92   534,100   83.61   533,628   83.37

  NON - CURRENT ASSETS                                                                                                                                             

  Available-for-sale   8,998     1.09    14,304    2.19    19,851    3.12    21,703    3.40        8,998     1.69    14,304    2.18    19,851    3.11    21,703    3.39
  investment                                                                                                                                                       

  Investment in        5,000     0.94    5,000     0.77    5,000     0.79    5,000     0.78        -         -       -         -       -         -       -         -
  subsidiary                                                                                                                                                       

  Property, plant and  53,501    10.02   44,490    6.62    43,972    6.91    45,636    7.15        53,501    10.02   44,490    6.79    43,972    6.88    45,636    7.13
  equipment                                                                                                                                                        

  Intangible assets    24,079    4.51    31,514    4.83    37,461    5.89    36,113    5.66        24,131    4.52    31,720    4.84    38,196    5.98    37,332    5.83

  Deferred tax assets  -         -       1,757             2,681             1,703                 -         -       1,757             2,680             1,703     

  Other non - current  2,224     0.42    16        0.00    16        0.00    92        0.01        2,224     0.42    16        0.00    16        0.00    92        0.01
  assets                                                                                                                                                           

  Total non-current    93,802    17.57   97,081    14.88   108,981   17.13   110,247   17.27       88,854    16.64   92,287    14.08   104,715   16.39   106,466   16.63
  assets                                                                                                                                                           

  Total Assets         533,996   100     652,605   100     636,030   100     638,293   100.00      533,935   100     655,645   100     638,815   100     640,094   100.00
  -------------------- --------- ------- --------- ------- --------- ------- --------- -------- -- --------- ------- --------- ------- --------- ------- --------- --------

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

                        2012             2013              2014              2015                 2012                   2013              2014              2015                          

                        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    49,448    7.75       36,219         6.78    53,845    8.21    51,104    8.00    49,448    7.73                
  from financial                                                                                                                                                                           
  institutions                                                                                                                                                                             

  Trade accounts        19,288   3.61    56,029    8.59    40,959    6.44    52,582    8.24       19,318         3.62    57,235    8.73    42,619    6.67    53,314    8.33                
  payable - related                                                                                                                                                                        
  companies                                                                                                                                                                                

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

  Accrued income tax    7,499    1.40    18,130    2.78    13,450    2.11    14,244    2.23       7,499          1.40    19,291    2.94    13,606    2.13    14,703    2.30                

  Accrued expenses      -        -       -         -       -         -       -         -          -              -       -         -       -         -       -         -                   

  Advanced receive from -        -       -         -       -         -       -         -          -              -       -         -       -         -       -         -                   
  assets held for sale                                                                                                                                                                     

  Others current        613      0.11    634       0.10    1,108     0.17    799       0.13       613            0.11    634       0.10    1,327     0.21    804       0.13                
  liabilities                                                                                                                                                                              

  Total Current         63,619   11.91   128,638   19.71   106,621   16.76   117,073   18.34      63,649         11.92   131,005   19.96   108,656   17.01   118,269   18.48               
  Liabilities                                                                                                                                                                              

  NON - CURRENT                                                                                                                                                                            
  LIABILITIES                                                                                                                                                                              

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

  Employee benefit      8,097    1.52    6,835     1.05    8,890     1.40    9,048     1.42       8,097          1.52    6,835     1.04    8,890     1.39    9,048     1.41                
  obligations                                                                                                                                                                              

  Total Liabilities     71,716   13.43   135,473   20.76   115,511   18.16   126,121   19.76      71,746         13.44   137,840   21.02   117,546   18.40   127,317   19.89               

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

  Share                                                                                                                                                                                    
  capital-ordinary                                                                                                                                                                         
  share THB. 1.00 par                                                                                                                                                                      
  value                                                                                                                                                                                    

  Authorizes share                                                                                                                                                                         
  capital                                                                                                                                                                                  

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

[TABLE]

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

Separated financial statements Consolidated

[TABLE]

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

Separated financial statements Consolidated

[TABLE]

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

Separated financial statements Consolidated

  ---------------------- ----------- ---------- ----------- ----------- -- ----------- ---------- ----------- -----------
                         2012        2013       2014        2015           2012        2013       2014        2015

  Cash flows from                                                                                             
  investing activities                                                                                        

  Cash paid for          (520,345)   30,000     45,663      -              (520,345)   30,000     45,663      (64)
  investing in                                                                                                
  short-term investments                                                                                      

  Proceeds from disposal 57,046      2          310         1,084          57,046      2          310         1,084
  of assets                                                                                                   

  Cash paid for          (14,106)    (1,515)    (6,404)     (7,779)        (4,106)     (1,515)    (6,404)     (7,779)
  acquisition of                                                                                              
  equipment and vehicles                                                                                      

  Cash paid for          (9,149)     (8,488)    (8,544)     (1,817)        (9,201)     (8,643)    (9,073)     (2,301)
  acquisition of                                                                                              
  intangible asset                                                                                            

  Cash paid              (6,338)     (6,021)    (4,813)     (3,995)        (6,338)     (6,021)    (4,813)     (3,995)
  available-for-sale                                                                                          
  investment                                                                                                  

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

  Dividends income       20,157      24,597     20,130      9,496          20,157      16,597     12,130      4,426

  Net cash provided by   (33,490)    38,575     46,342      (3,011)        (33,542)    30,420     37,813      (8,629)
  (used in) investing                                                                                         
  activities                                                                                                  

  Cash Flows from                                                                                             
  Financing Activities                                                                                        

  Increase(decrease)in   36,219      15,993     (2,876)     (1,518)        36,219      15,993     (2,876)     (1,518)
  short-term loans from                                                                                       
  financial institutions                                                                                      

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

  Dividend paid          (151,200)   (84,000)   (128,736)   (128,795)      (151,200)   (84,000)   (128,796)   (128,795)

  Net cash used in       (114,981)   (68,007)   (131,672)   (110,863)      (114,981)   (68,007)   (131,672)   (110,863)
  financing activities                                                                                        

  Net Increase           (169,923)   44,824     (48,316)    17,028         (169,998)   57,405     (51,029)    7,131
  (Decrease) in Cash and                                                                                      
  Cash equivalents                                                                                            

  Cash and cash          181,028     11,104     55,927      7,611          185,902     15,993     73,397      22,368
  equivalents, beginning                                                                                      
  of year                                                                                                     

  Cash and cash          11,105      55,928     7,611       24,639         15,994      73,398     22,368      29,499
  equivalents, end of                                                                                         
  year                                                                                                        
  ---------------------- ----------- ---------- ----------- ----------- -- ----------- ---------- ----------- -----------

(c) Financial Ratio 2012-2015 Separate Financial Statements Consolidated

  ----------------------------- ---------- -------- --------- --------- -- ---------- -------- --------- ---------
                                2012       2013     2014      2015         2012       2013     2014      2015

  Liquidity Ratio                                                                                        

  Current Ratio (Time)          6.92       4.32     4.94      4.51         6.99       4.30     4.92      4.51

  Quick Ratio (Time)            5.49       3.22     2.91      2.87         5.56       3.22     2.90      2.84

  Cash Flow Ratio (Time)        (0.38)     0.77     0.31      1.17         (0.38)     0.98     0.36      1.12

  Receivable Turnover (Time)    5.65       7.48     5.62      5.12         5.54       8.10     6.24      5.50

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

  Inventory Turnover (Time)     2.75       4.11     2.72      2.21         2.75       4.11     2.71      2.18

  Inventory T/Period (Day)      131        88       132       163          131        87       133       165

  Account Payable Turnover      8.70       5.77     4.82      4.67         6.32       5.75     4.77      4.63
  (Time)                                                                                                 

  Payment Period (Day)          41         62       75        77           57         63       75        78

  Cash Cycle (Day)              154        73       122       156          139        68       115       152

  Profitability Ratio                                                                                    

  Gross Profit Margin (%)       25.42      13.60    30.23     29.10        25.42      34.84    31.31     29.84

  Profit from operation (%)     4.15       22.52    19.56     18.56        4.13       23.95    20.59     19.25

  Other profit (%)              22.51      0.34     3.08      0.92         22.52      (1.22)   1.86      0.05

  Cash (%)                      (159.30)   45.93    27.12     110.63       (160.24)   53.96    29.23     101.56

  Net Profit Margin (%)         20.39      18.63    17.93     15.51        20.38      18.59    17.81     15.40

  Return on Equity (%)          17.28      27.41    24.88     19.36        17.27      27.55    24.86     19.31

  Efficiency Ratio                                                                                       

  Return on Total Assets (%)    15.29      22.62    20.03     15.69        15.28      22.70    19.95     15.61

  Return on Fixed Assets (%)    169.15     295.45   307.46    236.78       169.09     297.01   307.64    236.45

  Assets Turnover (Time)        75.00      121.44   111.71    101.14       75.00      122.08   112.03    101.35

  Financial Ratio                                                                                        

  Debt to Equity (Time)         0.16       0.26     0.22      0.25         0.16       0.27     0.23      0.25

  Interest Coverage (Time)      1.44       90.82    62.15     259.66       1.41       110.86   68.80     251.29

  Cash Basis (Time)             (0.13)     0.79     0.26      0.95         (0.14)     1.01     0.30      0.91

  Payout Ratio (%)              98.45      95.95    99.79     99.69        98.49      95.41    99.73     99.84

  Per Share (THB)                                                                                        

  Book Value (THB)              3.30       3.69     3.72      3.62         3.30       3.70     3.72      3.63

  Earnings per Share (THB)      0.61       0.96     0.92      0.71         0.61       0.96     0.92      0.71

  Dividend per Share (THB)      0.60       0.92     0.92      0.70         0.60       0.92     0.92      0.70

  Growth Rate                                                                                            

  Total Sale (%)                (8.29)     22.21    (2.54)    0.36         (8.29)     22.79    (2.57)    0.20

  Cost of Goods Sold (%)        26.39      88.90    (14.74)   9.19         26.40      92.12    (14.72)   8.31

  Sales Revenue (%)             (66.04)    121.40   (2.85)    (8.46)       (66.04)    126.62   (3.18)    (8.98)

  Selling & Admin Expense (%)   (56.41)    78.98    0.85      (5.84)       (56.36)    79.77    1.10      (7.43)

  Net Profit (%)                (50.51)    57.32    (3.85)    (22.55)      (50.51)    58.28    (4.33)    (22.71)
  ----------------------------- ---------- -------- --------- --------- -- ---------- -------- --------- ---------

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

The performance of PATO Chemical Industry Plc and subsidiary indicated
net profit (loss) totaled THB 134.99, 129.15, and 99.82 million in 2013
– 2015 respectively. These figures represent an increase or a reduction
percentage of 58.28, (4.33), and (22.71) respectively.

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.

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

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

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

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

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

Sales revenue during 2013 – 2015 were THB 734.99, 711.66, and 647.78
million respectively, representing an increase (a decrease) percentage
of 126.62, (3.18), and (8.98) respectively.

Total revenue during 2013 – 2015 were THB 726.11, 725.12, and 648.09
million, representing an increase (a decrease) percentage of 73.46,
(0.14), and (10.62) respectively.

Cost of Sales in 2013 – 2015 were THB 478.91, 488.84,and 454.50 million,
representing an increase (a decrease) percentage of 98.00, 2.07, and
(7.02) respectively.  

The gross profit of 2013 – 2015 are THB 256.08, 222.82,and 193.29
million, represent an increase (or decrease) of 210.55%, (12.99) %, and
(13.25) respectively.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.  The company’s sales volume in 2015 decreased from the continous
    drought from 21014 to 2015. The water level in the dam is not
    sufficient for cultivation. The government, therefore, forbade
    farmers to do the off-season rice cultivation. At the same time,
    in-season rice cultivatio was also postponed. Statistics show that,
    compared to 2014, the area of in-season and off-season rice
    cultivations decreased by 7.58% and 43.61%, respectively (source:
    Thai National AGRIS Centre, Office of Agricultural Economics). This
    cuases the decrease in overall production volume of both in-season
    and off-season rice.

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

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

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

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

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

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

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

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

Table showing rate of increases (reduction) during 2013 – 2015

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

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

  Sales      734.99     100.00    126.62     711.66     100.00    (3.18)    647.78     100.00    (8.98)

  Total      (8.88)     (1.21)    (109.42)   13.46      1.89      251.57    0.31       0.05      (97.70)
  revenues                                                                                       

  Cost of    (478.91)   (65.16)   (98.00)    (488.84)   (68.69)   2.07      (454.50)   (70.16)   (7.02)
  sales                                                                                          

  Gross      256.08     34.84     210.55     222.82     31.31     (12.99)   193.29     29.84     (13.25)
  profit                                                                                         
  ---------- ---------- --------- ---------- ---------- --------- --------- ---------- --------- ---------

Sales and General Administrative expenses during 2013-2015 totaled THB
80.03, 76.28, and 68.61 million, representing an increase (a decrease)
percentage of 15.88, (4.68), and (10.05) respectively, not including
financial cost.

Financial cost in 2013 – 2015 totaled THB 1.15, 1.07, and 0.60 million,
representing an increase (a decrease) of 80.34%, (6.95) %, and (43.92)
respectively.

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.

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

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

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

Operational profits in 2013–2015 came to THB 176.05, 146.54, and 124.68
million respectively, representing a percentage of 23.95, 20.59, and
19.25 respectively.

Net profits in 2013 – 2015 came to THB 134.99, 129.15, and 99.82
million, or a percentage of 18.59, 17.81, and 15.40 respectively.

Return on equity during 2013 – 2015 were 27.63%, 24.86%, and 19.31
respectively.

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.

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

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

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

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

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

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

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

Total assets in 2013-2015 amounting to THB 655.65, 638.81, and 640.09
million respectively, marked an increase (a decrease) at a percentage of
22.79, (2.57), and 0.20 respectively.

Total liabilities in 2013-2015 amounting to THB 137.84, 117.54, and
127.32 million, marked an increase (a decrease) percentage of 92.14,
(14.73), and 8.31 respectively.

Shareholder equity in 2013-2015 amounting to THB 517.81, 521.27, and
512.78 million, marked an increase (a decrease) of 12.03%, 0.67, and
(1.63) respectively.

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, the average inventory turnover period
decrease from 131 days in 2012 to 87 days in 2013, and 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.

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

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

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

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

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

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

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

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

The Company’s capital structure comprises debt-to-equity ratio, which
slightly increased from 0.23 times in 2014 to 0.25 times in 2015, mostly
from the decrease of 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 increased from 68.80 times in 2014 to 251.29
times in 2015. From the aforementioned operation result, the Company saw
operation cash flow increased THB 126.62 million, an increase of
THB23.79, or an equivalent of 195.63%. From the to pay off T/R creditor
in advance helped reduce financial cost by (43.92)% compare with the
previous year. Therefore, interest coverage decreased accordingly.

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

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 2015, as mentioned earlier.

The main key factors which will affects the Company’s operation result
in 2016 includes the narrow expansion of economy by 3.0% - 4.0%, driven
by the factors accelerating spending and investment in infrastructure
projects of the government. This will increase confidence and encourage
private spending and more investment. Export sector continues to be at
risk from a slowdown in the global economy. Tourism industry has
experienced continued growth. Factors related to the agricultural sector
are still at risks by negative impact on agricultural production.
Agricultural product prices in Thailand are affected by the slow growth
of global economy from European financial problems, droughts from
climate change, monitory policies of different countries causing
volatility of capital flows, increasing of interest loan affecting
global stock markets including Thailand, fluctuated global crude oil
prices over time from uncontrollable production quantity among NON-OPEC
and OPEC, and the exchange rate over Thai baht are for instance.

Nevertheless, it is estimated that the agricultural economy in 2016 will
expand in a range of 2.5% -3.5% (Source: Agricultural Economic Outlook
for 2015 and trend of 2016, Policy and Agricultural Development
Division, Department of Agricultural Economic), 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. It is expected that the climate change will
prolong rainy period. Irrigation water in main dams will reduce to the
insufficient level for cultivation during the first half of the year.
However, water is expected to increase during the second half of the
year due to rainy season. Some of the agricultural produces will
tentatively increase, such as in-season rice, Para rubber, maize, palm
oil, longan, durian, mangosteen, and rambutan. Out-of-season rice
continues downward trend. Therefore, the price of agricultural produces
in 2016 mostly remains proximate with those in 2015 as the global
economic situation has not fully recovered and affect the agricultural
exports to major trading partners. There are still enough supply of
agricultural products on the world market. The world crude oil prices
remain at low level. The global climate change increase and 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 2016 is expected to increase
when compared to 2015. 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, let market
forces operate on their own, and seeking market channel aboard.

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

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

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

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

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

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

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

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

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

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