Part 3.

11. Financial Highlight

(1) Financial statements

  The company paid 620,000 THB to the auditor for audit fee. There was
  no non-audit fee.

(a) Auditor report

The auditor has reported the financial statements of Pato Chemical
Industry Public Co., Ltd. as of 31 December of 2014 - 2017 without any
conditions.

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

  PATO Chemical Industry Public Company Limited and Subsidiary

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

Separated financial statements Consolidated

  -------------------- --------- ------- --------- -------- --------- -------- --------- -------- -- --------- ------- --------- -------- --------- -------- --------- --------
                       2014              2015               2016               2017                  2014              2015               2016               2017      

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

  ASSETS                                                                                                                                                               

  CURRENT ASSETS                                                                                                                                                       

  Cash and cash        7,611     1.20    24,639    3.86     45,971    6.68     37,740    5.25        22,368    3.50    29,499    4.61     56,456    8.17     46,829    6.49
  equivalents                                                                                                                                                          

  Short - term         183,806   28.90   180,305   28.25    171,866   24.97    257,147   35.75       183,806   28.77   180,305   28.17    171,866   24.86    257,147   35.64
  investments                                                                                                                                                          

  Trade accounts       119,006   18.71   130,521   20.45    137,311   19.95    123,049   17.11       109,464   17.14   125,906   19.67    130,187   18.83    115,159   15.96
  receivable                                                                                                                                                           

  Inventories          216,626   34.06   192,581   30.17    199,949   29.05    159,436   22.17       218,462   34.20   197,918   30.92    203,312   29.41    163,592   22.68

  Total current assets 527,049   82.87   528,046   82.73    555,097   80.66    577,372   80.28       534,100   83.61   533,628   83.37    561,821   81.27    582,727   80.77

  NON - CURRENT ASSETS                                                                                                                                                 

  Available-for-sale   19,851    3.12    21,703    3.40     41,289    6.00     51,675    7.19        19,851    3.11    21,703    3.39     41,289    5.97     51,675    7.16
  investment                                                                                                                                                           

  Investment in        5,000     0.79    5,000     0.78     5,000     0.73     5,000     0.70        -         -       -         -        -         -        -         -
  subsidiary                                                                                                                                                           

  Property, plant and  43,972    6.91    45,636    7.15     53,702    7.80     57,903    8.05        43,972    6.88    45,636    7.13     53,702    7.77     57,903    8.03
  equipment                                                                                                                                                            

  Intangible assets    37,461    5.89    36,113    5.66     31,957    4.64     26,014    3.62        38,196    5.88    37,332    5.83     33,346    4.82     27,903    3.87

  Deferred tax assets  2,681     0.42    1,703     0.27     1,095     0.16     1,209     0.17        2,680     0.46    1,703     0.27     1,095     0.16     1,209     0.17

  Other non - current  16        0.00    92        0.01     56        0.01     21        0.00        16        0.00    92        0.01     56        0.01     21        0.00
  assets                                                                                                                                                               

  Total non-current    108,981   17.13   110,247   17.27    133,099   19.34    141,822   19.72       104,715   16.39   106,466   16.63    129,488   18.73    138,711   19.23
  assets                                                                                                                                                               

  Total Assets         636,030   100     638,293   100.00   688,196   100.00   719,194   100.00      638,815   100     640,094   100.00   691,309   100.00   721,438   100.00
  -------------------- --------- ------- --------- -------- --------- -------- --------- -------- -- --------- ------- --------- -------- --------- -------- --------- --------

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

                        2014              2015              2016              2017                 2014                   2015              2016              2017                          

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

  LIABILITIES AND                                                                                                                                                                           

  SHAREHOLDERS’EQUITY                                                                                                                                                                       
  CURRENT LIABILITIES                                                                                                                                                                       

  Short - term loans    51,104    8.03    49,449    7.75    33,985    4.94    13,531    1.88       51,104         8.00    49,449    7.73    33,985    4.92    13,531    1.88                
  from financial                                                                                                                                                                            
  institutions                                                                                                                                                                              

  Trade accounts        40,959    6.44    52,582    8.24    74,237    10.79   56,595    7.87       42,619         6.67    53,314    8.33    75,371    10.90   57,152    7.92                
  payable - related                                                                                                                                                                         
  companies                                                                                                                                                                                 

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

  Accrued income tax    13,450    2.11    14,244    2.23    19,942    2.90    21,341    2.97       13,645         2.13    14,703    2.30    20,812    3.01    22,003    3.05                

  Others current        1,108     0.17    799       0.13    1,085     0.16    878       0.12       1,327          0.21    804       0.13    1,092     0.16    984       0.14                
  liabilities                                                                                                                                                                               

  Total Current         106,621   16.76   117,034   18.34   129,249   18.78   92,345    12.84      108,655        17.01   118,270   18.48   131,260   18.99   93,670    12.98               
  Liabilities                                                                                                                                                                               

  NON - CURRENT                                                                                                                                                                             
  LIABILITIES                                                                                                                                                                               

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

  Employee benefit      8,890     1.40    9,048     1.42    8,028     1.17    11,840    1.65       8,890          1.39    9,048     1.41    8,028     1.16    11,840    1.64                
  obligations                                                                                                                                                                               

  Total Liabilities     115,511   18.16   126,122   19.76   137,277   19.95   104,185   14.49      117,545        18.40   127,318   19.89   139,288   20.15   105,510   14.62               

  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

  ---------------------- ----------- ----------- ----------- ----------- -- ----------- ----------- ----------- -----------
                         2014        2015        2016        2017           2014        2015        2016        2017

  Cash flows from                                                                                               
  investing activities                                                                                          

  Cash paid for          45,663      -           12,000      (80,731)       45,663      (64)        12,000      (80,371)
  investing in                                                                                                  
  short-term investments                                                                                        

  Proceeds from disposal 310         1,084       5,102       31             310         1,084       5,102       31
  of assets                                                                                                     

  Cash paid for          (6,404)     (7,779)     (21,052)    (11,116)       (6,404)     (7,779)     (21,052)    (11,116)
  acquisition of                                                                                                
  equipment and vehicles                                                                                        

  Cash paid for          (8,544)     (1,817)     (3,152)     (1,752)        (9,073)     (2,301)     (3,321)     (2,252)
  acquisition of                                                                                                
  intangible asset                                                                                              

  Cash paid              (4,813)     (3,995)     (17,570)    (7,526)        (4,813)     (3,995)     (17,570)    (7,526)
  available-for-sale                                                                                            
  investment                                                                                                    

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

  Dividends income       20,130      9,296       8,662       14,390         12,130      4,426       5,862       6,416

  Net cash provided by   46,342      (3,211)     (16,010)    (86,704)       37,813      (8,629)     (18,979)    (95,178)
  (used in) investing                                                                                           
  activities                                                                                                    

  Cash Flows from                                                                                               
  Financing Activities                                                                                          

  Increase(decrease)in   (2,876)     (1,518)     (15,308)    (20,484)       (2,876)     (1,518)     (15,308)    (20,484)
  short-term loans from                                                                                         
  financial institutions                                                                                        

  Interest paid          (1,071)     (598)       (486)       (618)          (1,071)     (603)       (487)       (623)

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

  Dividend paid          (128,800)   (128,795)   (99,609)    (131,023)      (128,800)   (128,795)   (99,609)    (131,023)

  Net cash used in       (131,672)   (110,863)   (114,917)   (151,507)      (131,676)   (110,863)   (114,917)   (151,507)
  financing activities                                                                                          

  ฟNet Increase          (48,316)    17,028      21,331      (8,231)        (51,029)    7,131       26,957      (9,627)
  (Decrease) in Cash and                                                                                        
  Cash equivalents                                                                                              

  Cash and cash          55,927      7,611       24,639      45,971         73,397      22,368      29,499      56,456
  equivalents, beginning                                                                                        
  of year                                                                                                       

  Cash and cash          7,611       24,639      45,970      37,740         22,368      29,499      56,456      46,829
  equivalents, end of                                                                                           
  year                                                                                                          
  ---------------------- ----------- ----------- ----------- ----------- -- ----------- ----------- ----------- -----------

(c) Financial Ratio 2014-2017 Separate Financial Statements Consolidated

  ----------------------------- --------- --------- -------- --------- -- --------- --------- -------- ---------
                                2014      2015      2016     2017         2014      2015      2016     2017

  Liquidity Ratio                                                                                      

  Current Ratio (Time)          4.94      4.51      4.29     6.25         4.92      4.51      4.28     6.22

  Quick Ratio (Time)            2.91      2.87      2.75     4.53         2.90      2.84      2.73     4.47

  Cash Flow Ratio (Time)        0.32      1.18      1.24     2.08         0.37      1.12      1.29     2.11

  Receivable Turnover (Time)    5.62      5.12      5.14     6.43         6.24      5.50      5.54     7.07

  Collection Period (Day)       64        70        70       56           58        65        65       51

  Inventory Turnover (Time)     2.72      2.21      2.42     2.98         2.71      2.18      2.42     3.01

  Inventory T/Period (Day)      132       163       148      121          133       165       149      120

  Account Payable Turnover      4.82      4.66      4.53     6.00         4.77      4.63      4.57     6.13
  (Time)                                                                                               

  Payment Period (Day)          75        77        80       60           75        78        79       59

  Cash Cycle (Day)              121       156       138      117          116       152       135      112

  Profitability Ratio                                                                                  

  Gross Profit Margin (%)       30.23     29.10     30.88    36.12        31.31     29.84     31.70    36.38

  Profit from operation (%)     19.56     18.56     21.12    26.21        20.59     19.25     22.00    26.60

  Other profit (%)              3.08      0.92      2.96     2.43         1.86      0.05      1.69     1.24

  Cash (%)                      27.91     111.13    105.06   105.10       29.96     102.04    103.36   102.98

  Net Profit Margin (%)         17.93     15.51     19.28    22.71        17.81     15.40     19.02    22.16

  Return on Equity (%)          24.88     19.36     25.74    33.43        24.86     19.31     25.79    33.34

  Efficiency Ratio                                                                                     

  Return on Total Assets (%)    20.03     15.69     20.63    27.70        19.95     15.61     20.62    27.57

  Return on Fixed Assets (%)    307.46    236.78    291.36   361.66       307.64    236.45    292.36   361.33

  Assets Turnover (Time)        111.71    101.14    106.97   121.93       112.03    101.35    108.40   124.39

  Financial Ratio                                                                                      

  Debt to Equity (Time)         0.22      0.25      0.25     0.17         0.23      0.25      0.25     0.17

  Interest Coverage (Time)      63.15     260.66    375.15   447.25       69.80     252.29    395.00   457.72

  Cash Basis (Time)             0.26      0.95      1.23     1.60         0.30      0.92      1.30     1.64

  Payout Ratio (%)              99.79     99.69     95.75    89.85        99.73     99.84     95.40    89.94

  Per Share (THB)                                                                                      

  Book Value (THB)              3.72      3.60      3.87     4.32         3.72      3.60      3.88     4.33

  Earnings per Share (THB)      0.92      0.71      0.96     1.37         0.92      0.71      0.96     1.37

  Dividend per Share (THB)      0.92      0.70      0.92     1.23         0.92      0.70      0.92     1.23

  Growth Rate                                                                                          

  Total Sale (%)                (2.54)    0.36      7.82     4.50         (2.57)    0.20      8.00     4.36

  Cost of Goods Sold (%)        (14.74)   9.19      8.84     (24.11)      (14.72)   8.31      9.40     (24.25)

  Sales Revenue (%)             (2.85)    (8.46)    7.82     21.60        (3.18)    (8.98)    9.52     22.31

  Selling & Admin Expense (%)   0.86      (7.32)    4.43     13.75        1.10      (7.43)    5.78     15.10

  Net Profit (%)                (3.85)    (22.55)   36.83    42.48        (4.33)    (22.71)   37.53    41.83
  ----------------------------- --------- --------- -------- --------- -- --------- --------- -------- ---------

2) Management Discussion and Analysis

The performance of PATO Chemical Industry Plc and subsidiary indicated
net profit (loss) totaled THB 99.82, 137.29,and 194.72 million in 2015 –
2017 respectively. These figures represent an increase or a reduction
percentage of (22.71), 37.53, and 41.83 respectively.

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

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

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

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

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

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

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

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

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

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

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

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

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

With regard to the agricultural and farm products, the average price are
lower, these are including non-glutinous rice in the husk, maize,
cassava and industrial sugar cane. Emphasizing on the non-glutinous rice
in the husk, the drought situation has been recovered, so the output of
non-glutinous rice in the husk is increased in the market and the
non-glutinous rice in the husk product that was still in the stock; has
pressured the price of the rice to be lower.
In 2017, the world economy continued to grow from the previous years in
a narrow range. The International Monetary Fund (IMF) expected that the
world economy would grow 3.60% (as of October 2017) increased from 3.5%
last year. Overall, global economic growth in all regions improved
including the economy of developed countries, the United States,
Eurozone, Japan, China and the ASEAN community, excepted for Middle
Eastern countries which decelerated.

The US economy expanded 2.2% which was mainly supported by consumer
spending and private investment. The unemployment rate continued to
decrease which reflected strength of the US labor market. The inflation
was below the target, therefore, Monetary Policy Committee of Federal
Reserve Bank maintained policy interest rate of 1-1.25%.

The Eurozone’s economy (Germany, France, Italy and Spain) still
continued to expand at 2.1% due to the decreasing of political concerned
in the Eurozone, which improved domestic spending and economic
confidence in the region. The inflation remained low so the European
Central Bank extended the easing of Quantitative Easing (QE) policy
until the 3^(rd) quarter of 2018 and also decreased the purchasing
amount of government bonds.

For the Japanese economy still continued to grow at 1.5% due to the
improvement of consumption spending and private investment including the
tourism sector which expanded highly. Therefore, the easy monetary
policy was still applied due to the low level of inflation rate.

The Chinese Economy still continued expanded at 6.8% due to the growth
of domestic consumption and investment. The unemployment rate was in low
level. However, Chinese economy remained vulnerable from the risks of
high NPL ratio of commercial banks in China which affected the economic
stability of the country.

For overall ASEAN economy, Indonesia, Malaysia, the Philippines,
Thailand, and Vietnam continued to expand at 5.2%.

The economy of Thailand was affected by the global economy expanded 3.9%
in 2017 mainly due to the export growth in all export sectors and almost
every category that in accordance with the expansion of the partner
countries economic and rising value in world market. Therefore, the
export and price of the products increased. While, private consumption
expanded from the improvement of the total income in the economy,
spending stimulation measure of the government, and low inflation and
interest as well as the consumer confidence and spending. Moreover, the
private investment increased especially the investment of machine which
in line with the improvement of the export. In the meantime, the
government investment decreased, this is because the flood crisis which
decreased government procurement so the budget disbursement rate was
lower than the target. The production and transportation were improved
due to the export and delivery service of land, air, and marine
including the services and tourism sectors were expanded significantly
due to tourism revenue.

The overall agricultural economy in 2017 expanded 5.3% when compared
with 2016 due to the weather and the sufficient amount of water which
facilitated the agricultural production. The half of 2016, there was the
water crisis before the situation was improved in the second half of the
year. In contrast, the water in 2017 was sufficient and available in
important reservoirs which could be served to cultivate various types of
crops especially off-season rice in Chao Phraya River Basin, Lower
North, and Upper Central. Moreover, the weather in many regions was
favorable and, therefore, could promote the export of agricultural
products and agricultural production due to the growth of the economy of
partner countries. The major crops which had more productivity are
off-season rice, maize, factory sugarcane, factory pineapple, rubber,
and oil palm. The crops which had less productivity are wet season rice,
cassava. For wet season rice, the decreasing was the result of violent
flood in many areas where damaged by tropical storm Sonca and tropical
storm Doksuri.

As a result, the average prices of agricultural products were increased,
for example, rice, sugarcane, raw rubber sheet. In case of rice, the
increasing price was the result of flood. For sugarcane, the risen price
was in accordance with the prices in the world market. For the increased
price of raw rubber sheet, it was the result of the increasing demand in
the world market. In case of the decreased prices of products, namely,
maize, cassava, factory pineapple, and oil palm, this was because the
less demand in animal food industry and the oversupply in the market.

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

Sales revenue during 2015 – 2017 were THB 647.78, 709.43, and 867.70
million respectively, representing an increase (a decrease) percentage
of (8.98), 9.52, and 22.31 respectively.

Total revenue during 2015 – 2017 were THB 648.09, 721.64, and 878.64
million, representing an increase (a decrease) percentage of (10.62),
11.35, and 21.76 respectively.

Cost of Sales in 2015 – 2017 were THB 454.50, 484.55, and 552.05
million, representing an increase (a decrease) percentage of (7.02),
6.61, and 13.93 respectively.  

The gross profit of 2015 – 2017 are THB 193.29, 224.88, and 315.65
million, represent an increase (or decrease) of (13.25), 16.34, and
40.36 respectively.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Main causes could be summarized by issue as follows:

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

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

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

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

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

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

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

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

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

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

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

There was also a gain from currency exchange rate due to the fluctuation
of baht value ranging between 36.31-34.68 baht per dollar. The company
had a policy to hedge foreign exchange rate risk by utilizing forward
contract which resulted in an increased gain in the exchange rate of
3.30 million baht or 179.42% when compared to the previous year.
In 2017, economic situation continued to expand slightly due to the
improved world economic growth, for example, the United States,
Eurozone, Japan, China and ASEAN 5. As mentioned above, The Thai
economic situation experienced both positive and negative factors such
as floods that caused the damages to agricultural products, decreased
number of products and continued affecting to price of agricultural
crops. This was necessary that the government had to find the solution
by determining the policies and measures to help the agricultural
sector. In agricultural sector, these were consisted of upgrading the
agricultural standards to sustainability by focusing on integration of
13 main policies, namely, the learning center project, optimizing
agricultural production, extension needs of large agricultural land plot
of farmers, management of agricultural areas, organic farming, new
theory agriculture, agricultural product bank, upgrading the
cooperatives, production plan and integrated rice marketing. This was to
reduce the cost and upgrade the agricultural products to be more
effective and up to standard by using the innovation and technology for
production.

According to the above factors, the sales in 2017 were THB 867.70
million that was increased THB 158.27 million or 22.31%. The selling
costs were THB 552.05 million in 2017, an increase of THB 67.50 million
or 13.93%. In 2017, the gross profit margin was at THB 315.65 million,
an increase of THB 90.77 million or 40.36% y-o-y.

The key issues could be summarized as follows:

1.  The sales in 2017 were increased since the economic conditions were
    slightly expanded from the previous year. The amount of rainfall in
    2017 was sufficient for cultivation and for irrigation in many dams,
    so agriculturists could increasingly cultivate in many areas and a
    permissive weather effected on agricultural production of wet season
    rice cultivation, off-season rice cultivation and cultivation of
    maize in the planting areas increased for 0.54%, 112.02% and 0.26%
    respectively (source: Agricultural Information Center, Office of
    Agricultural Economics), so productivity of farmers increased,
    especially off-season rice. On the other hand, productivity of wet
    season rice was decreased.

2.  The agricultural outputs of the major crops which were increased,
    namely; off-season rice, maize, sugarcane, factory pineapple,
    para-rubber and oil palm, 131.37%, 3.36%, 15.74%, 7.94%, 3.74% and
    18.33% respectively. In case of wet season rice, the planting areas
    were slightly increased from previous year, but productivity
    decreased 6.98%, this was due to severe flooding from the influence
    of tropical storm Sonca and Doksuri during the third quarter in many
    provinces of the northeastern region such as Sakon Nakhon, Nakhon
    Phanom, Bueng Kan and Kalasin including the central region such as
    Chai Nat, Ayutthaya and Lop Buri, resulting in the damages in
    cultivate areas of wet-season rice. For the price of agricultural
    products with the higher average price such as rice, sugarcane, raw
    rubber sheet, especially the price of Jasmine wet-season rice was
    increased 28.01%, prices of sugarcane, raw rubber sheet were
    increased for 26.50% and 23.63% respectively because flood crisis
    causing the productivity to reduce and resulting in the world market
    price increased as well as the market demand. In contrast, the
    average prices of some agricultural product sectors decreased such
    as maize, cassava, factory pineapple, oil palm since these sectors
    could be substituted by other materials, the oversupply of the
    products to the market and quality could not meet the market
    standards.

3.  For the debt of agriculturists, the government flood relief helped
    agriculturists who received the impact from flood crisis by 3,000
    Baht per household and other measures for reviving the
    agriculturists in terms of debt and new credits such as Farmers'
    Reconstruction and Development Fund to solve the debt problems of
    agriculturists quickly and effectively, in particularly, for helping
    informal debt and supporting the small farmer loan that helped
    farmers had better financial liquidity and to have available fund
    for new round of cultivating.

4.  The exports of agricultural products increased 12.53% from the
    previous year. For example, rice products and value of rice exports
    were increased 10.52%, rubber and oil palm were increased 36.97% and
    65.66% respectively from higher market demand, and the improved
    competitiveness of Thailand including better economy of the trading
    partners, thus the exports of agricultural products increased
    resulting in the higher price of agricultural products in the
    country.

5.  The use for pesticides increased because the increasing of
    agricultural area from the sufficient rainfall and water for
    cultivation, also the weather has facilitated in many areas of the
    country, these factors lead to better results in productivity,
    especially the off-season rice yield which resulted in the weeds and
    insect pests outbreak, therefore, the demand for pesticides
    increased accordingly.

Due to the above reasons, the financial liquidity of agriculturists was
improved, and spending power increased, so demands in the market
increased. The competition between competitors, for example, price and
promotion to maintain the market share was remained but the competition
was soften due to higher demands in the market and thus be able to sell
more.

The sales of all products in both commodity product and specialty
products were increased, especially in the key products used in the
paddy rice field had the added ratio as 55.50% of all sales in 2017 that
was increased 18.72% when comparing with sales in 2016, except pesticide
products that was less due to no outbreak of pests and the releasing of
new fungicide products which were the products used in some fruit plants
and flowers as well as rice fields.

The increased sales caused the productivity increased, even though Thai
Baht had strengthened significantly. The costs of imported materials
tended increased to the average material price of 5%-20% since the
enforcement of various pollution laws in China where was the main raw
material producers, therefore, this additional cost of production made
the raw material producers increased their prices.

While the production process required labors to adequately support the
increased of the sales sufficiently, it was necessary to seek labors
from external sources, outside companies and resulting to the higher
labor cost from last year including the overhead expenses of production
as well. Referring to the demand for higher production volume and other
factors made the selling costs increased of 13.93% when comparing with
the previous year. This was the key factor to make the gross profit in
2017 of 315.65 million Baht equal to the gross profit margin of 36.38%,
which increased of 90.77 million Baht or 40.36% when comparing with
gross profit last year.

Although, the cost ratio increased in 2017, the added cost ratio was
lower than the increased in selling ratio. Therefore, the gross profit
margin increased.

The other incomes in 2017 were THB 10.94 million, a decrease of THB 1.27
million or 10.40% in comparison with the other incomes of last year.
These incomes consisted of the increased investment income due to the
slight improvement of investment conditions in stock market, hence, the
investment incomes, which mainly were the capital gain and unrealized
gain including dividend and interest received of THB 10.62 million equal
to the increase of THB 1.14 million or 12.06%. The profits from exchange
rate were due to Thai Baht appreciation in the range of 36.02 – 32.68
Baht/USD. The company provided preventive measure of the foreign
exchange hedging policy by Forward Contract, which resulted in the
profit from exchange rate of THB 0.18 million, decreased of THB 1.28
million or 87.36% compared to the previous year.

Table showing rate of increases (reduction) during 2015 – 2017

  ---------- ---------- --------- --------- ---------- --------- ---------- ---------- --------- ---------
             2015                           2016                            2017                 

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

  Sales      647.78     100.00    (8.98)    709.43     100.00    9.52       867.70     100.00    22.31

  Total      0.31       0.05      (97.70)   12.21      1.72      3,838.71   10.94      1.26      (10.40)
  revenues                                                                                       

  Cost of    (454.50)   (70.16)   (7.02)    (484.55)   (68.30)   6.61       (552.05)   (63.62)   13.93
  sales                                                                                          

  Gross      193.29     29.84     (13.25)   224.88     31.70     16.34      315.65     36.38     40.36
  profit                                                                                         
  ---------- ---------- --------- --------- ---------- --------- ---------- ---------- --------- ---------

Sales and General Administrative expenses during 2015-2017 totaled THB
68.61, 68.78, and 84.85 million representing an increase (a decrease)
percentage of (10.05), 0.25, and 23.36 respectively, not including
financial cost.

Financial cost in 2015 – 2017 totaled THB 0.60, 0.49 million, and 0.62
representing an increase (a decrease) of (43.92), (18.33), and 26.53
respectively.

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

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

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

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

In 2017, when each type of account in 2017 is considered, we can see
that selling expenses stand at THB 43.63 million, an increase of THB
13.78 million over the previous year, or an equivalent of 46.15%. This
is due to the fact that the demand of the product in the market has
increased from rainfalls and the sufficient water supply for the
cultivation. In addition, market competition was less intense. However,
the company had to maintain or increase market share causing the selling
expenses to increase accordingly, such as sale promotion expenses of THB
12.93 million, an increase of THB 10.24 million or 381.20%. Commission
and transportation expenses increased in line with the increase in sales
volume. The expenses on registration fee increased due to new products
etc.

Administrative expenses in 2017 are at THB 41.22 million, an increase of
THB 2.29 million over the previous year, or an equivalent of 5.89%. This
slight change stems from the increase in salary and welfare for
employees.
The increase in selling and administrative expenses of THB 16.07 million
or an increase of 23.36% y-o-y under the increase in sales volume shows
the effective financial management in term of cost savings, and thus the
Company is able to enjoy the increase in revenue.

Financial costs in 2017 stand at THB 0.62 million, an increase of THB
0.14 million over the previous year, or an equivalent of 27.77%, all of
which are T/R interest from the order of raw materials from other
countries. With currency strengthen from the impacts of world economy
and the USA monetary policy led to worries among investors. Foreign
capital flows into other regions including Thailand shows the sign of
better economic situation. Capital flows into both the capital and bond
markets, the Thai baht appreciated. 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 by T/R. In 2017,
Thai baht continues to appreciate from THB 36.02 to 32.68 to a dollar.
As a result, T / R payments are faster in order to reduce T / R interest
burden and reduce the impact of exchange rate fluctuations. The company
also has a policy to do forward contract to reduce risk in financial
costs to a minimum.

Operational profits in 2015–2017 came to THB 124.68, 156.10, and 230.80
million respectively, representing a percentage of 19.25, 22, and 26.60
respectively.

Net profits in 2015 – 2017 came to THB 99.82, 137.29, and 194.72
million, or a percentage of 15.40, 19.35 and 22.44 respectively.

Return on equity during 2015 – 2017 were 19.31, 25.79, and 33.34
respectively.

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

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

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

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

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

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

In 2015, the company invested in available-for-sale securities for THB
3.99 million, in which, as of 31 December 2015, the company gained the
profit from change for THB 2.14 million which was from the decrease of
investment value by (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 THB 98.11 million, or an
equivalent of 15.14% of total income.

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

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

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

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

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

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

In 2017, the sales volume in 2017, increased by 22.31%, is the result of
no more drought crisis and sufficiency of rainfalls and water supply for
cultivation. The amount of main agricultural products greatly increased
such as, off-season rice, maize, sugarcane, pineapple, para-rubber, palm
oil, and so on. Unfortunately, in-season rice fields were affected by
floods in many areas, the yield decreased. However, the external factors
of the world economy continue to expand, leading to improved trade
partners. As a result, exports of agricultural products increased. Price
of main domestic agricultural commodities such as rice paddy, sugarcane
and raw rubber sheet have increased. The financial liquidity of the
farmers improved accordingly. The policies to help farmers supported by
the government on both production, finance, including debt repayment for
farmers led to increasing in purchasing power. Demand in the market
increased.

Market competition become less intensified. The company still maintains
its marketing policy in all aspects, such as price and promotion to
maintain the market share of the Company. Sales of all products of the
Company, such as Commodity Product and Specialty Product, especially the
main products used in rice fields accounted for 55.50% of total sales in
2017, increased by 18.72% y-o-y. While the cost of production such as
cost of raw materials kept increasing due to factors affecting the raw
material producers, resulting in rising prices. Labor and overheads cost
increased in line with the production. However, the increase was at the
lower rate of the increase in sales resulting in a higher gross profit
compared to 2016.

Selling expenses and administrative expenses in 2017 increased by
23.36%. Since the company’s sales volume has increased, the company is
committed to operating wisely and effectively in order to generate
highest revenues possible in line with current situation. As the
competition in the today’s market still exist, promotion strategies in
stimulating consumer demand are needed. In 2017, the company spent THB
12.93 million in promotion strategies, an increase of THB 10.24 million
over the previous year, or an equivalent of 381.20% y-o-y. However, the
company still made a profit of THB 230.80 million from its operations in
2017, or an equivalent of 26.60%, an increase of THB 74.70 million over
the previous year, or an equivalent of 47.85%.

Corporate income tax in 2017 is at THB 46.40 million, an increase of THB
15.86 million over the previous year, or an equivalent of 51.95%. Since
the sales volume has increased, the profit before corporate income tax
deduction stands at THB 241.74 million, an increase of THB 73.42 million
over the previous year, or an equivalent of 43.62%. The Company has
included the right to exclude tax from dividends from investment units
that meet the conditions of holding period and profits from the
valuation of trading securities (investment units) etc.

From the aforementioned factors, the company’s operating results in the
current situation are satisfactory, which leads to the company’s net
profit of THB 194.72 million in 2017, or an equivalent of 22.44%. Return
of Equity (ROE) for shareholders stands at 33.34%, increased from 25.79%
in 2016.

In 2017, the company invested in available-for-sale securities for THB
7.53 million, in which fair value was adjusted as of 31 December 2017,
the company gained the profit from change for THB 3.24 million. The
profit from the change of fair value of investment in available-for-sale
securities in 2017 is THB 5.79 million due to the improvement of the
Stock Market. Deferred tax stated under the topic of profit (loss) on
the measurement of total investment for the year 2017 amounting to THB
2.59 million and the new valuation of the post-employment benefit
obligation as per the actuarial loss amounted to THB 2.42 million.
Therefore, the total comprehensive income for the year 2017 stands at
THB 194.89 million or an equivalent of 22.46%.

Total assets in 2015-2017 amounting to THB 640.09, 691.31, 721.44
million respectively, marked an increase (a decrease) at a percentage of
0.20, 8.00, and 4.36 respectively.

Total liabilities in 2015-2017 amounting to THB 127.32, 139.28, and
105.51 million, marked an increase (a decrease) percentage of 8.31,
9.40, and (24.25) respectively.

Shareholder equity in 2015-2017 amounting to THB 512.78, 552.02, and
615.93 million, marked an increase (a decrease) percentage of (1.63),
7.65, and 11.58 respectively.

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 THB 8.20 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 189.78%. 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 0.37 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 16.03% when compared
with the previous year The import of raw materials in 2015 increased and
T/R payment period was extended. However, the volatility of the exchange
rate led to the weakening baht. In accordance with its risks preventing
policy, the Company paid its debts to T/R creditors earlier causing its
short-term loans from the financial institutions to reduce forex lost.
Meanwhile, the Company has covered exposure with forward contract to
reduce financial cost and led to cost savings and get the most out of
current situation. Short-term loans from financial institutions
decreased consequently. The Company paid for dividend THB 128.80
million. In addition, in 2015, the Company received proceeds from the
issuance of common shares of THB 19.45 million from ESOP project. Cash
and cash equivalents then equal to THB 29.50 million, an increase of THB
7.13 million or an equivalent of 31.87%.

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

Interest coverage ratio increased from 69.80 times in 2014 to 252.29
times in 2015. From the aforementioned operation result, the Company saw
operation cash flow increased THB 127.23 million, an increase of
THB83.32, or an equivalent of 189.78%. The pay-off T/R creditor in
advance helped reduce financial cost by (43.92) % compare with the
previous year. Therefore, interest coverage decreased accordingly.

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

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

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

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

Therefore, from the Company’s operating results in 2016, the cash flows
increased by 26.81%. The liquidity ratio decreased from 4.51 times in
2015, to 4.28 times in 2016, and the quick ratio decreased from 2.84
times in 2015, to 2.73 times in 2016. At the same time, the cash flow
liquidity ratio increased from 1.12 times in 2015 to 1.29 times in 2016,
and the collection and payment period was 65 days and 65 days
respectively in 2015, same level as the previous year. The average
inventory turnover period quicker from 165 days in 2015, to 149 days in
2016, leaving the cash cycle to be better from 152 days in 2015 to 135
days in 2016. We can see that from the operating results, the Company’s
overall liquidity ratio maintained the same as previous year.

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

Cash flows from financing activities decreased by 3.53% when compared
with the previous year The import of raw materials in 2016 increased.
Thus, there were more T/R and payment period was extended. However, the
volatility of the exchange rate led to the weakening baht. In accordance
with its risks preventing policy, the Company paid its debts to T/R
creditors earlier causing its short-term loans from the financial
institutions to reduce forex lost. Meanwhile, the Company has covered
exposure with forward contract to reduce financial cost and led to cost
savings and get the most out of current situation. Short-term loans from
financial institutions decreased consequently. The Company paid for
dividend THB 99.61million. Cash and cash equivalents by the end of the
year then equal to THB56.46 million, an increase of THB 26.96 million or
an equivalent of 91.38%.

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

Interest coverage ratio increased from 252.29 times in 2015 to 395 times
in 2016. From the aforementioned operation result, the Company saw
operation cash flow increased THB 161.34 million, an increase of
THB34.11, or an equivalent of 26.81%. The pay-off T/R creditor in
advance helped reduce financial cost by (18.33) % compare with the
previous year. Therefore, interest coverage increased accordingly.

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

In 2017, with the increased sales volumes, the Company’s operating
results boast net profit of THB 194.72 million, causing its balance
sheet to be significantly different from that of 2016. The world economy
from aforementioned situation caused the Company’s total assets to
increase to a total of THB 721.44 million, an increase of THB 20.13
million is an equivalent of (2.57) %, when compared to the previous
year. Major sections that increased (decreased) are cash and cash
deposits which increased for THB 75.65 million or a different of 33.13%
y-o-y. Accounts receivable and other receivable decreased by THB (15.03)
million or an equivalent of (11.54) %. Inventory decreased by THB
(39.72) or an equivalent of (19.54) % y-o-y. Available-for-sales
securities increased from new investment and unrealized profits from the
change of fair value totaled THB 10.3 million, an equivalent of 25.15%
y-o-y. An increase in property, plant and equipment for THB 4.20 million
was an equivalent of 7.82 % from investment of factory building and
machinery with replacement and renovation, new vehicles to replace
obsolete ones. Intangible assets, and Deferred Tax for THB (5.33)
million or an equivalent of (15.47) % from selling of some assets and
the cancellation of new product registration that does not meet market
demand or products that were not allowed to be registered any more.

The company’s total liabilities deceased for THB (33.78) million, or an
equivalent of (24.25) %, when compared to that of the previous year.
This amount includes an increase (a decrease) in short term loan from
financial institutions (T/R creditors) for THB (20.45) million or an
equivalent of (60.19) %, trade account payable and other creditors for
THB (18.22) million or an equivalent of (24.17) %, and income tax
payable for THB 1.19 million or an equivalent of 5.72%. The employee
benefit obligation increased by THB 3.81 million or 47.49% due to the
increase in service cost and interest from obligation of THB 0.82
million. The loss on the actuarial valuation was THB 2.89 million.

Shareholder’s equity increased for THB 63.91 million, or an equivalent
of 11.58%, when compared to that of the previous year. This amount comes
from an increase in unappropriated retained earnings for THB 61.31
million, or an equivalent of 26.50% from the increase in net profit and
other components of shareholder’s equity which includes surplus on
revaluation of fair value of available-for-sale of THB 2.59 million, or
an equivalent of 127.07%.
The changes in the balance sheet come from the increase in sales volume
from various factors such as favorable irrigation water, weather causing
proper cultivation. The increase in agricultural products especially
off-season rice led to the higher demand in agro chemical products. Due
to the less competitive market but the competition still exist as per
market mechanism, the Company had to prepare raw materials for
production in 2017 at appropriate quantity for market demand.

Therefore, the cash and cash equivalents, short-term investments
increased while accounts receivable and inventories decreased with a
faster collection period and sales period. As the baht strengthens, the
company needs reduce the impact of exchange rates by covering the
exposure with forward contracts at appropriate rate and speeding up T/R
payment, short-term loan form financial institution reduced
consequently. Account payables for raw materials and domestic packaging
materials reduced. As a result, average payment period was faster. As
for financial liquidity management, the Company bought and sold
temporary investments for debt repayment. The investments in various
forms was to increase revenue.

Therefore, from the Company’s operating results in 20174, the cash flows
increased by 47.32 %. As for financial ratio, the liquidity ratio
increased from 4.28 times in 2016, to 6.22 times in 2017, and the quick
liquidity ratio increased from 2.73 times in 2016, to 4.47 times in
2017. At the same time, the cash flow liquidity ratio increased from
1.29 times in 2016 to 2.11 times in 2017, and the average collection
period reduced from 65 days in 2016, to 51 days in 2017. The average
sale period decreased from 149 days in 2016, to 120 days in 2017, while
the accounts payable payment period reduced from 79 days in 2016, to 59
days in 2017, leaving the cash cycle to be better from 135 days in 2016
to 112 days in 2017.

The Company’s cash flows from the investment decreased by (401.49) %,
when compared to the previous year. The Company applied a policy to
lengthen payment term and increase investment in temporary investment
for THB 81 million and investment in available-for-sale securities for
THB 7.53 million and received dividend for THB 6.42 million. The Company
bought machineries and vehicles for THB 11.01 million and paid for
expenses related to the registration for the new license according to
Hazard Substances Act, which is under operation, for THB 2.25 million.

Cash flows from financing activities reduced by 31.82% when compared
with the previous year since the order of raw materials from other
countries increased from that of 2016, causing more T/R creditors. The
Company applied a policy to lengthen payment term in 2017. Due to the
strengthen baht and to prevent risk from forex loss, the Company covered
exposure with forward contract and fastened T/R paid off period to
reduce financial cost and led to cost savings and to get the most out of
current situation, causing its short-term loans from the financial
institutions to reduce. The Company also paid for dividends for THB
131.02 million. Cash and cash equivalents by the end of the year then
equal to THB 46.83 million. A difference of THB 9.63 million was
equivalent to 17.06% y-o-y.

The Company’s capital structure comprises debt-to-equity ratio, which
was 0.25 times for 2016 and 0.17 times in 2017. The company is able to
manage and control effective financial position under improving
operational by decreasing payables burden significantly. As a result,
payout reduced, and this ratio level is considered very well.

Interest coverage ratio increased from 395 times in 2016 to 457.72 times
in 2017. From the aforementioned operation result, the Company saw
operation cash flow increased THB 237.68 million, an increase of
THB76.34, or an equivalent of 47.32 %. The pay-off T/R creditor in
advance slightly helped financial cost to increase slightly compared
with the previous year. Therefore, interest coverage increased
accordingly.

Meanwhile, the Company’s operating results increased causing its net
profit to increase. Therefore, its return on assets increased from
20.62% in 2016 to 27.57% in 2017; its return on fixed assets increased
from 292.36% in 2016 to 361.33% in 2017, and its asset turnover ratio
increase from 108.40 times in 2016 to 124.39 times in 2017. All in all,
this indicates that the ability in profit generation from the wise and
efficient use of assets has increased in accordance with current
situation when compared with the previous year.

The important factors and the effect of overall operation in 2018, Thai
economy anticipated to grow continually in the narrow range from
3.4-3.6% due to the supporting factors from:

1. The improvement of global economy resulting in acceleration of
industrial sector and supporting the overall economy, therefore;
enhanced export sector, tourism sector and their respective management
sector.

2. The driving force from government spending remained positive while
public investment also accelerated by increasing investment budget in
large-scale and ongoing transportation and logistics projects.

3. Private investment showed clear signs of recovery from 2017
especially in equipment and machinery investments. Thus, the investment
tended to grow steadily in production, resulting in the improvement of
production capacity in major export industries as well as construction
of transportation and logistics projects such as mass rapid transport
systems.

4. The of economic growth in improved key sectors such as tourism, which
was from the global economic recovery of major countries, which tend to
have the growth of long-distance tourists and regional tourists. Export
sector was expected to expand well, lead to the increase of prices in
world market while logistics and transportation sector tended to grow
favorably by development of tourism activities, production activities
and import-export sectors. Moreover, wholesale and retail sectors
continued to increase by upturn of household spending, and demand from
different sectors in accordingly.

5. The improvement of employment ratio and income base of general
population in economic system, in agricultural sector due to hospitable
climate and sufficient water for irrigation continually facilitated the
growth in productivity from the previous year; as well as in industry
sectors, tourism sectors, logistics and transportation sectors, also
likely to expanded and recruited more labors forces in economic system.

However, some risks in economic system still remained, for example, the
decrease of driving force from expansion of agricultural production
during the demand of recovery from draughts in the past few years until
the situation turned normal in 2017, resulted in continued development
up to 2018, when compared with 2017. It can be said that the
agricultural sector in 2018 would receive less driving force and likely
to decrease faster than expected, in case of being impacted by La Nina
phenomenon.

In addition, there are still financial risks from changes in monetary
policy in key countries leading to the reduction of liquidity in world
market and would increase the interest rate in world market faster than
economic basic factors could cope with, hence, impact the economic
recovery. This causes fluctuation in economic system with changing
anticipation about factors in economic system that may result in the
uncertainty of capital movement due to the adjustment of loan interest
rate. These factors would impact global stock markets and exchange rate,
which effect on Thai Baht, and influence domestic agricultural product
price.

The tendency of agricultural economy in 2018 is anticipated to expand in
range of 3.0-4.0%, in every production sector (source: Agricultural
economy condition in 2017 and tendency in 2018 from Agricultural Policy
and Planning Division, Office of Agricultural Economics) which received
supporting factors from various agricultural policies and measures that
are beneficial to farmers. The result will be extended nationwide to
create competitiveness with cost effective, productivity increase and
product quality development to respond needs of the market.

The promising weather and sufficient water for agricultural product is
positive factors as same as in 2017 since adequate rainwater leading to
the increase of water in main reservoirs sufficient for cultivation.
Meanwhile, the world economy in 2018 tends to get better continuing from
2017 especially for trade partner countries, which will be advantageous
to agricultural product and Thai product export, resulting in better
export and domestic prices.

The agricultural products increased, namely, wet-season rice,
out-of-season rice, maize, sugarcane, factory pineapple, rubber, oil
palm, longan, durian, mangosteen and rambutan. The price expected to be
mostly similar to 2017 except for longan, durian, mangosteen and
rambutan that possibly have better price due to high demand in the
market and product quality meets consumers need.

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.