- Translation - Information Memorandum Kaset Thai ...ktis.listedcompany.com/newsroom/20140425-KITS-SET02-EN.pdf · - Translation - Information Memorandum Kaset Thai International

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- Translation -

Information Memorandum

Kaset Thai International Sugar Corporation Public Company Limited ("KTIS")

Head Office and Factory Location:

1/1 Moo 14 Nong Pho Sub-District, Taklee District, Nakhonsawan Province Tel: 056-338-123-5 Fax: 056-338-126 Website: www.ktisgroup.com

Contact Location: 24 Aekaphol Bldg., Vibhavadi Rangsit Rd., Din Daeng, Din Daeng, Bangkok 10400 Tel: 0-2692-0869 - 73 Fax: 0-2246-9125 or 0-2246-9140 Listing Date As at April 28th, 2014 (Trading commencement on April 28th, 2014) Listing Securities 3,860,000,000 ordinary shares with a par value Bath 1 per share, totaling THB 3,860.0

million In this offering, The Company and existing shareholders offer a total of 957,827,000

ordinary shares, which can be separated into 1. Newly issued ordinary shares offered by the Company of 585,427,000 shares

(representing 15.2% of paid-up capital post offering) 2. Ordinary shares offered for sale by existing shareholders, UT Group Pte. Ltd., of

372,400,000 shares (representing 9.6% of total paid-up capital post offering) ทุนของบรษิทั As at April 28th, 2014 (Trading commencement on April 28th, 2014) Registered capital Ordinary shares 3,888.0 million Paid-up capital Ordinary shares 3,860.0 million Secondary Market Stock Exchange of Thailand (the "SET") Offering Price THB 10 per share Offering Dates 21 - 23 April 2014

On 28 April 2014, which is the first day trade of the Company's shares on the SET, Mrs. Hathai Siriviriyakul will sell the Company's ordinary shares in the amount of 417,364,800 shares, or 10.8% of total paid-up capital of the Company post-offering, on the Big Lot Board

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to 3S Holding Co., Ltd. (held by Mrs. Hathai Siriviriyakul of 70% and Sumitomo Corporation and Nissin Sugar Co., Ltd. ("Investor A") of 30%). As a result, 3S Holding Co., Ltd. will hold 708,964,800 shares in KTIS, as agreed in the investment agreement between Sumitomo Corporation, Nissin Sugar Co., Ltd., and Mrs. Hathai Siriviriyakul. Ultimately, 3S Holding Co., Ltd. will hold KTIS shares amounting to 972,000,000 share, an equivalent of 25.2% of the Company's total paid-up capital post-offering, whereby the investment value is not exceeding THB 2,650 millions. The details of this transaction are disclosed under Others; Corporate Restructuring prior to and after the IPO, page 67 of this paper.

Use of Proceeds

The Company expects to receive proceeds approximately THB 3,772 millions from the IPO, which does not include expenses incurred from the offering of approximately THB 71.2 millions. However, it should be noted that the estimated proceeds do not include the Company's obligation to issue 208.3 million shares or THB 2,082.3 millions to the Singapore-based shareholders, which is part of the Company's restructuring. The details of the obligation as per Share and Purchase Agreements are as follows:

Name Value (THB)

Number of Shares

Percentage of the Company's Paid-up Capital Post-offering

King Wan Corporation Limited 872,670,000 87,267,000 2.3 King Wan Industries Pte. Limited 290,510,000 29,051,000 0.8 Mr. Chua Kim Hua 215,440,000 21,544,000 0.6 Miss Chua Eng Eng 215,440,000 21,544,000 0.6 Xylem Investment Pte. Ltd. 87,270,000 8,727,000 0.2 Sinotac Group Pte. Ltd. 200,470,000 20,047,000 0.5 Far East Distillers Pte. Ltd. 200,470,000 20,047,000 0.5

Total 2,082,270,000 208,227,000 5.4 The Company plans to use the proceeds to:

Used of Proceeds Amount

(THB millions) Approximate Duration

1. For repayment of loans from financial institutions 500 within 2015

2. For investment in bio-fertilization factory 20 within 2016

3. For investment in biomass power plants 1,400 within 2016

4. For investment in liquid sucrose and super refined sugar projects

980 within 2016

5. For working capital 872 within 2016

Total 3,772

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Green Shoe Option None Type of Business and Nature of Operation

The Company and its subsidiaries are a fully integrated production and sales of sugar business, as well as connected businesses. KTIS Group own two sugar factories and lease another sugar factory from Ruampol Enterprise Co., Ltd. ("RPE"). Moreover, the Company own an ethanol factory, bleached paper pulp factory, and a biomass power plant, and are currently constructing a bio-fertilizer pellet factory. Business operations Production and sale of sugar business

The Company produces and sales sugar to domestic and international customers. The products can be categorized into three types, which are refined sugar, white sugar, and raw sugar. Connected Business

Sugar production processes creates opportunities for the Company to establish connected business from the by-product of sugar production process, which are molasses, and bagasse. The connected businesses of the Company are: 1. Production and sale of bleached paper pulp

The Company produces and distributes bleached paper pulp through Environment Pulp and Paper Co., Ltd. (“EPPCO”) using bagasse obtained from sugar factories. EPPCO's paper pulp factory is in close proximity with our sugar factories. EPPCO's products comprise dry pulp and wet pulp.

2. Production and sales of ethanol

The Company produces and sales ethanol through Ekarat Pattana Co., Ltd. ("EPC") using molasses obtained from sugar factories. EPC has received licenses to produce three grades of ethanol, namely potable alcohol, industrial alcohol, and fuel grade alcohol. However, EPC currently produces industrial alcohol and fuel grade alcohol to serve the Company's current demand.

3. Production of Electricity

KTIS Group has machines and facilities within its sugar and paper pulp factories to produce electricity and stream using bagasse obtained from sugar factories. Electricity and stream produced are internally used in the 3 sugar factories and other factories. Any unused electricity is then sold to the Electricity Generating Authority of Thailand ("EGAT"), or the Provincial Electricity Authorities ("PEA"). Moreover, the Company established Kaset Thai Bio Power Co., Ltd. ("KTBP”) to operate biomass power plant with 60 megawatts capacity.

Revenue structure Revenue from production and sale of sugar is the key revenue generation of the Company, which representing

more than 80.0% of the total revenue from sales and services of the Company during the year ended 31 December 2012 to 31 December 2013. In addition, the Company has revenue from connected business approximately 20.0% of the total

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revenue from sale and services of the Company. Details of the revenue structure are presented in the following table:

For the year ended 3-month period

ended For the year ended For the year ended

30 Sep 2010 30 Sep 2011 1 Oct 2011 – 31 Dec

2011 31 Dec 2012 31 Dec 2013

(Pro-forma Financial Statements)

(Pro-forma Financial Statements)

(Pro-forma Financial

Statements)

(Pro-forma Financial

Statements)

(Consolidated Financial

Statements) Amount

% of total

Amount % of total

Amount % of total

Amount % of total

Amount % of total

(THB million)

(THB million)

(THB million)

(THB million)

(THB million)

1.Revenue from sale of sugar Domestic 6,820.7 33.1 6,626.7 30.7 1,364.0 37.8 7,335.7 29.8 5,701.5 31.6 International 10,308.9 50 11,054.7 51.2 1,441.8 39.9 13,772.2 55.9 8,525.1 47.2 Total revenue from sugar distribution

17,129.6 83 17,681.4 81.8 2,805.8 77.7 21,108.0 85.7 14,226.6 78.8

2.Revenue from sale of pulp Domestic 434.0 2.1 437.0 2 79.0 2.2 474.1 1.9 319.6 1.8 International 1,425.0 6.9 1,657.0 7.7 325.0 9.0 1,200.1 4.9 1,176.0 6.5 Total revenue from pulp 1,859.0 9.0 2,094.0 9.7 404.0 11.2 1,674.2 6.8 1,495.6 8.3 3.Revenue from sale of ethanol

Domestic 655.0 3.2 844.0 3.9 96.0 2.7 679.3 2.8 1,433.1 7.9 International 509.0 2.5 357.0 1.7 194.0 5.4 527 2.1 112.3 0.6 Total revenue from ethanol 1,164.0 5.6 1,201.0 5.6 290.0 8.1 1,206.3 4.9 1,545.4 8.6 4. Other revenues Revenue from sale of electricity 22.4 0.1 86.3 0.4 16.4 0.5 85.0 0.3 263.6 1.5 Revenue from other sales and services

461.2 2.2 545.8 2.5 93.1 2.6 557.3 2.3 520.5 2.9

Total other revenues 483.6 2.3 632.1 2.9 109.5 3.1 642.3 2.6 784.1 4.3 Total revenue 20,636.2 100.0 21,608.5 100.0 3,609.3 100.0 24,630.8 100.0 18,051.7 100.0 Sources: The Company's Financial Statements

Target customers Production and sale of sugar business 1. Domestic Customers

The two main groups of target customers for the domestic market are industrial customers and distributors 1.1 Industrial Customers

Industrial customers need sugar for production of their own products. This group of customers typically enters into one-year contract. Due to the high quantity purchased from this group of customers, industrial customers are considered as the key customers. The Company is able to sell large quantity of sugar as a result of the Company's high quality of sugar, as well as the Company's reliability and punctuality in delivery process.

Majority of the industrial customers are leading domestic companies, including: - Thainamthip Co., Ltd., the manufacturer and distributor of carbonated beverages, e.g. Coca-Cola,

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Fanta and Sprite; - Carabao TawanDang Co., Ltd., the manufacturer and distributor of CarabaoDaeng Energy drinks; - Osotspa Co., Ltd., the manufacturer and distributor of M-150, Lipoviton-D and M Sport Energy

drinks; - Friesland Campina Fresh (Thailand) Co., Ltd., the manufacturer and distributor of Foremost dairy

products; - Lactasoy Co., Ltd., the manufacturer and distributor of Lactasoy soy-milk products; - Nestle (Thai) Co., Ltd., the manufacturer and distributor of beverages and confections, e.g. Milo,

Kit-Kat and Nesvita; - Hale’s Trading (Thailand) Co., Ltd., the manufacturer and distributor of Hales Blue Boy syrup; - Srinanaporn Marketing Co., Ltd., the manufacturer and distributor of Jele Lite fruit juice and

Bento squid; and - United Foods Co., Ltd., the manufacturer and distributor of Shanghai snacks, Yoyo candy and

Toro popcorn.

1.2 Distributors The Company also sell sugar to distributors by way of the “ex-factory” method. Comparing to industrial

customers, the Company's revenue from production and sales of sugar is smaller than that of revenue from industrial customers. This is partially due to the Company has to sell the sugar to distributors at a discount to the price announced by the Thai Ministry of Commerce. The level of the discount is subject to prevailing market conditions.

2. International Customers

The sugar export is governed by the governmental regulations. Sugar sales to international market can be divided into two categories under the quota distribution system, which are "Quota B" and "Quota C". Quota B is a quota to export raw sugars amounting to 800,000 tons, required by TCSC constituted under the Sugarcane and Sugar Act. Under Quota B, 400,000 tons of raw sugars are exported via TCSC, and sugar factories can export the remaining 400,000 tons of raw sugar directly to international customers. Quota C refers to remaining sugar after Quota A and Quota B are satisfied, and the Company can export directly to customers.

As a result, the Company's target international customers sold via Quota B and Quota C, (portion that the Company can export directly) are Japanese customers, which approximately accounts for 60.0% of total revenue from the Company's exported sugar. Most of international customers are sugar traders, including well-known industrial traders such as Cargill International S.A., Bunge Agribusiness Singapore Pte. Ltd., Sumitomo Corporation, Marubeni Europe Plc. and Mitsubishi Corporation. In particular, the Company targets Japanese traders for the sale of our J-Spec raw sugar.

Connected businesses

1. Production and sale of bleached paper pulp business

1.1 Domestic Customers

EPPCO sells dry pulp and wet pulp to industrial customers domestically and these customers include paper-producing customers and food-packaging customers. These customers accounted for 21.4 - 28.3% of

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EPPCO’s total revenue for the year ended 31 December 2011 to 31 December 2013. EPPCO sells its products to leading companies in Thailand, including SCG Paper Public Co., Ltd., Kimberly-Clark (Thailand) Co., Ltd., Berli Jucker Cellox Co., Ltd., United Paper Public Co., Ltd. and Biodegradable Packaging for Environment Co., Ltd.

1.2 International Customers

EPPCO primarily sells its bleached white paper pulp to international customers through brokers. A broker may directly refer the customer to EPPCO, or purchase the product and distribute it to the international customer itself. Sales through brokers enable EPPCO to determine the price and quantity of the product it intends to sell at its discretion, without having to negotiate with the end customers. Most of EPPCO’s revenue is from international sales, accounting for approximately 71.7 - 78.6% of its total revenue for the year ended 31 December 2011 to 31 December 2013. EPPCO sells its products to leading foreign brokers such as Marubeni Corporation, OG Corporation, Beijing China Base Star Paper Co., Ltd. and Interfiber Asia Pte. Ltd.

2. Production and sale of ethanol business

2.1 Domestic Customers

EPC produces and distributes ethanol with 99.5% purity level to domestic oil dealers to use as a raw material to mix with fuels. The production of ethanol supports the Thai Government's policy to the use alternative energy to decrease reliance on imported fuels and crude oil. EPC's major customers, defined as "traders" under Section 7 of the Fuel Trade Act, B.E. 2543, are PTT Public Co., Ltd., Thai Oil Public Co., Ltd. and Bangchak Petroleum Public Co., Ltd. As of 31 December 2013, revenue from sale of ethanol in the domestic market are 92.7% of total revenue from sale of ethanol.

2.2 International Customers

EPC exports ethanol to overseas customers through distributors. Over the past, EPC have sold industrial grade ethanol with purity level of 95.5%, and fuel grade ethanol with purity level of 99.5% to overseas customers, approximately 29.8% and 13.9% of the total revenue from sale of ethanol in 2012 respectively.

However, for the year ended 2013, EPC did not export fuel grade ethanol due to increase in domestic demand for ethanol as a result of Thailand's prohibition of Benzene 91 sales since 1 January 2013. Yet, EPC exported industrial grade ethanol, approximately 7.3% of the total revenue from sale of ethanol in 2013.

3. Electricity Production Business

KTIS Group produces stream and electricity and distribute to the three sugar factories and EPPCO’s pulp factory. The remaining electricity will be sold to EGAT or PEA pursuant to the Power Purchase Agreement ("PPA") of each factory.

Distribution Channels Production and Sale of Sugar Business

1. Domestic Distribution

Most of the Company's sugar are sold and delivered directly to domestic industrial customers. The remaining sugars are then distributed from the Company's sugar factories through ex-factory arrangements with distributions.

2. International Distribution

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For export market, sugar is only distributed to international customers through export agents licensed by the Cane and Sugar Board ("CSB"). Currently, there are seven companies received such license to act as a sugar exporter. These companies will prepare export documents, arrange for the shipping of goods and customs clearance and collect payment from international customers.

Connected Business 1. Production and sale of bleached paper pulp business

1.1 Domestic Distribution

EPPCO distributes bleached white paper pulp directly to its industrial customers. Generally, EPPCO distributes its products on a monthly basis or at any time as agreed with its customers. EPPCO focuses on distributing bleached white paper pulp to leading paper industry customers in Thailand, fulfilling market demand for environmentally-friendly paper pulp, and providing knowledgeable technical sales personnel to advise customers accurately and efficiently regarding its products.

1.2 International Distribution

EPPCO distributes paper pulp to international customers through brokers. The international purchase and sale of paper pulp is conducted by way of periodic spot lot contracts, taking into consideration the market condition and price at that time. Our sales through this type of contract comprise approximately 90% of our total international sales. The remaining 10% of our total international sales are made under long-term contracts. EPPCO chooses brokers based on their access to countries with strong demands for paper pulp and their credibility with respect to reducing risks associated with the sales. In addition, EPPCO’s management continuously conducts marketing by attending trading expos to locate new groups of customers.


2.1 Domestic Distribution EPC directly distributes ethanol to domestic customers

2.2 International Distribution

EPC exports ethanol to overseas customers through distributors


Stream and electricity generated by KTIS Group's power plants are used in three sugar factories, and EPPCO’s pulp factory. The remaining electricity is sold to EGAT or PEA pursuant to the PPA for each factory. Procurement of Raw Materials Production and sale of sugar business

The quantity of sugarcane procured in each production season affects our sugar production and the production of other products, including paper pulp, ethanol and electricity. This is due to the fact that sugarcane is the primary raw material for these products. Efficient cost management is important to sugar producers. As a result, an efficient plan for raw material procurement is essential to ensure that sufficient sugarcane is procured in each production season. Our sugar factories are located at the center of the sugarcane cultivation region in Thailand enable us to benefit from proximity to raw materials. Currently, we source sugarcane from plantations covering an area of more than 1.3 million

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rai, distributed among our factories as follows:

1) KTIS's Factory with sugarcane cultivation areas covering seven provinces, namely Nakornsawan, Chainart, Singburi, Supanburi, Uthaithani, Petchaboon and Lopburi, and totaling more than 867,020 rai.

2) TIS's Factory with sugarcane cultivation areas covering five provinces, namely Uttaradit, Sukhothai, Prae, Pitsanulok, and Kumpaengpetch, and totaling 227,259 rai.

3) RPE's Factory with sugarcane cultivation areas covering four provinces, namely Nakornsawan, Pichit, Kumpaengpetch and Uthaithani, and totaling 203,000 rai.

We have also enacted measures to ensure the stable supply of sugarcane. These measures include developing support programs for our contracted farmers in order to maintain current levels of sugarcane production and increase sugarcane production to be supplied in the future. We have also set up a plantation department to manage the supply of raw materials and maintain good relations with our contract farmers. We believe that the ongoing success of our sugar business is also tied to the growth in number of sugarcane farmers .

In addition, the TIS's factory has its own sugarcane plantation to harvest sugarcane after the sugarcane provided by our contracted farmers is fully milled. This is to ensure that TIS has received a solid quantity of sugarcane in case the farmers are insufficient. TIS cultivates sugarcane on land over which it has ownership rights or on land with respect to which it does not possess original ownership documents but has possessed and occupied as evidenced by its payment of applicable property taxes pursuant to Phor.Bor.Thor.5. Under Thai laws, the land with respect to which such property taxes are paid is considered land owned by the state, although that person has the right to occupy and use the land by paying the property taxes levied on the land.

We have steadily expanded our plantation department to become one of the largest business units. More than 760 employees work in the plantation department, comprising more than 70 supporting units. These supporting units are dispatched to sugar plantation areas to provide support services to our contracted farmers by coordinating with farmers throughout the sugarcane plantation process, commencing from the selection of the sugarcane, breeds, preparation of the plantation areas, the management of the water supply, the utilization of fertilizers, composts and machines, the harvesting of the crops and the delivery of sugarcane to our factories. We believe our strong and longstanding relationships with our contracted farmers and harmony with the local communities create a significant barrier to entry for our current and future competitors.


EPPCO's main raw material used for producing bleached white paper pulp is bagasse. Currently, EPPCO uses 550,000 tons of bagasse per year. The bagasse is delivered directly by a conveyor belt from KTIS's factory. As a result, EPPCO is able to control the quality of its raw material without difficulty and incurs low transportation costs. In addition, EPPCO sources its raw materials from the TIS's factory and the RPE's factory. The quantity of bagasse EPPCO acquires depends on the amount of sugarcane processed by our sugar factories in a production season

Currently, one ton of sugarcane used in our production of sugar results in 100 kilograms of bagasse at our sugar factories

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Raw Material

For the Year Ended 31 Dec 2011 31 Dec 2012 31 Dec 2013

Quantity (tons)

Quantity (tons)

Quantity (tons)

Bagasse 559,180 557,747 608,086


Molasses

Molasses are the primary raw material used in EPC’s ethanol production processes. Approximately 242,600 tons of molasses are required annually to achieve EPC's maximum production capacity of 230,000 liters of ethanol per day. EPC purchases all of the molasses required from the Company's sugar factories.

As the sugar factories can produce molasses more than is required by EPC to reach maximum production capacity, the Company expects to be able to provide a reliable supply of molasses to EPC to meet its ethanol production demand.

Coals

Costs arising from the usage of coal are a significant production cost in ethanol production. EPC's ethanol factory uses low-sulfur coal to generate energy for its steam boiler, with a capacity of 42 tons/hour and 34 kg/cm2 of pressure. The steam is then channeled to a 3 megawatt turbine generator to generate electricity for the factory. In 2013, EPC has invested in bio-gas power plant. EPC was able to use the bio-gas to substitute the use of coal for approximately up to 29,000 tons per annum. As a result, EPC reduced the use of coal up to 70% per annum, which is also beneficial to the environment


The key raw material used in the Company's electricity production processes is bagasse, a by-product of the sugarcane milling processes in the Company's three sugar factories. As bagasse is produced at the sugar factories, the procurement cost and cost of transportation of raw materials for KTIS Group's electricity production processes are lower than if KTIS Group had to procure these raw materials from third parties.

Currently, the quantity of bagasse produced by the sugarcane milling process is sufficient for the purposes of our electricity production process. However, in the event that the quantity of bagasse produced is insufficient, coal may be used as a supplemental fuel.

Competitive Strategy Production and Sale of SugarBusiness (A) Stability of Raw Marterial

As sugarcane is the primary raw material for sugar production, the uninterrupted and adequate quality sugarcane powered is critical for our sugar business as well as connected businesses. We continually invest in and develop the quality sugarcane and plantation areas by investing in technology and providing support services for our contracted farmers and sugarcane cultivation.

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(B) Production Efficiency and Cost Saving The Company has steadily invested in our human capital and machinery in order to improve our production

efficiency, and also plan need to increase the sugar production capacity to capture the advantage of economies of scale, which will result in lower average fixed costs. The Company employs a team of engineers who are capable of building and developing our own machinery without third party assistance. As a result, the Company's construction costs are lower than the costs of purchasing imported machines. In addition, this team of engineers can maintain and repair the majority of our machineries without third party assistance. (C) Measures to Reduce Impact of Natural Disasters

To mitigate risks arise from natural disasters, such as drought and pest infection, the Company have developed corrective and preventive measures against natural disasters which may affect raw materials. The Company has advised our contracted farmers to apply the recommendations from our factory research studies, such as an oasis dripping system to save water during dry seasons and biological measures that control sugarcane pests (e.g. by facilitating the ability of certain insects, such as anatatus, camerons and euborellis, to eliminate pests in plantations) (D) Increased Value from By-Product

Our vision is to increase our shareholders' value and profits and decrease waste arising from the production process by commercial products that use by-products from the sugar production process . We intend to apply eco-friendly supply chain practices to our management of the production process by using clean and eco-friendly technology. (E) Market Share of Japan’s Sugar Industry

We are capable of producing J-Spec raw sugar products of reliable quality in compliance with Japanese regulatory standards and have been supplying J-Spec raw sugar. As a result, we believe we have built a reputation in the Japanese market as a reliable supplier of product. Consequently, we have been able to continually increase the quantity of sugar exported to Japan. Our sugar exported to Japan in 2009, 2010, and 2011 amounted to 18.2%, 27.2% and 30.9%, respectively, of the total quantity of sugar being imported into Japan respectively.

In addition, our sugar factories are able to adjust their production processes to comply with any future changes to Japanese regulatory standards. In other words, if the required product specifications of J-Spec raw sugar in Japan were amended, our sugar factories would be able to alter their production processes promptly and efficiently to meet the amended specifications Connected Business 1. Production and sale of bleached paper pulp business

(A) Secured Raw Material EPPCO has highly stable access to its raw materials because it acquires bagasse directly from KTIS's factory.

The KTIS's factory has the highest yearly sugar production of all factories in the world, producing 10,000,000 tons of sugar per year. As a result, KTIS has large amounts of bagasse as by-products. This enables EPPCO to efficiently plan its production of paper pulp by anticipating the amount of available bagasse.

EPPCO’s reliable production of large quantities of bleached white paper pulp assures its customers that EPPCO will provide and distribute these products to them when needed. In addition, EPPCO is able to plan its production and distribution efficiently and reduce production costs because of its highly stable access to raw material.

(B) Low Cost of Raw Material

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EPPCO has low costs for raw materials compared to the costs incurred by other paper pulp factories, because of the proximity of EPPCO’s paper pulp factory to the KTIS's factory, its direct supplier of raw materials. The KTIS Factory uses a conveyor belt instead of trucks to deliver its bagasse to EPPCO, resulting in low transportation costs. (C) Natural Product

EPPCO’s bleached white paper pulp is a natural product made from virgin pulp. Consumer concerns regarding environmental conservation have increased demand for EPPCO’s products. In addition, EPPCO’s factory is the first paper pulp factory in Thailand to acquire the Certificate of Food Safety Management Requirement: ISO 22000, as well as GMP & HACCP certification from SGS (Thailand) Co., Ltd., which guarantees the safety of paper pulp for consumer use and utilization as a raw material for producing food containers. 2. Production and sale of ethanol business

(A) Product Variety EPC has various products to meet consumer demands. EPC’s refinery is licensed to produce three grades of

ethanol, namely, potable alcohol, industrial alcohol, and fuel alcohol. The ability to produce a variety of products enhances EPC’s competitiveness in international markets, unlike the majority of ethanol factories in Thailand which can only produce fuel alcohol for domestic sales. (B) Certainty in Delivery of Products

EPC is able to consistently and punctually deliver products to customers as EPC obtains a steady supply of molasses from our sugar production facilities for its ethanol production process. As these raw materials are produced in quantities exceeding EPC's current production capacity, EPC has never encounter raw material shortfalls. (C) Product Quality

EPC has a policy of continually improving its products to ensure that the quality of ethanol produced is consistent with standards prescribed by law. Additionally, EPC's distiller has been modified to be able to produce B-grade ethanol, a high quality ethanol commonly sold in the international market. (D) Marketing Strategy

To meet the challenges of increasing competition in the energy industry, EPC has an ongoing marketing promotion policy, which includes regular meetings with, and providing regular training to ethanol producers both domestically and internationally. By doing so, EPC meets with customers and middlemen directly and is able to continually expand its domestic and international customer base. Environmental Impact Production and Sale of SugarBusiness

The electricity generator utilizing the by-products from the TIS's factory is required to submit an EIA Report, containing plans and protocols for improving the contaminated substances in the air, to the ERC. TIS's factory has been granted an extension for the submission of its final EIA Report to the ERC, enabling TIS to submit the completed EIA Report by September 20, 2013. According to the inspection conducted by an independent consultant, TIS' factory’s environmental quality and its emission quality at the smokestake meet the standards set by the Ministry of Industry.

The electricity generator utilizing the by-products from the RPE Factory is required to submit an operation plan and improvement measures for air contaminants to be less than 120 milligrams per cubic meters to the ERC within five years from the date of issuance of the power production license. KTIS has been granted an extension of the deadline to

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submit this plan to September 19, 2015

The Company will update the progress of this environmental issues and will disclose them to the SET.


According to the EPPCO's EIA reported dated 17 April 2012, EPPCO's air quality, noise levels, water quality and occupational health of its factory, were incompliance with international stadards. For the pending environmental issues, EPPCO has corrected all the issues except the set up of lime kiln to destroy lime and while limestone in the lime recovery process. Currectly, EPPCO is conducting a comparative study of current technologies regarding the installation of a lime kiln. EPPCO plans to complete this project in 2014. 2. Production and sale of ethanol business

We have implemented policies to reduce the effects of EPC’s production processes on the environment. For example, policies to monitor the economic use of resources and energy and to continuously improve environmental management systems to prevent pollution have been put in place to ensure that production processes accord with international standards. We have also taken steps to obtain accreditation under various international standards such as ISO 9000. As a result of these measures, EPC's ethanol factory's processes are in compliance with the air quality and noise levels standards set out in the Notification of the Ministry of Industry Re: Quantity Value of Air Contamination Released from Factory B.E. 2549 (2006) and the Notification of the National Environment Board No.15 B.E. 2540 (1997).

In addition to our efforts to manage the impact of EPC's factory's processes on air quality and noise levels, EPC has commenced campaigns to re-use wastewater from the production process in its factory as well as to use vinasse mixed with water to adjust soil conditions in our sugarcane plantations. EPC also uses vinasse to create biogas for the generation of electricity in its ethanol factory. These efforts have led to more environmentally friendly operation, reduced water treatment costs and vinasse will be mixed with filter cake and can be sold

3. Electricity Production

Broadly, the environmental impact of our electricity production processes can be separated into two categories: 1) environmental impact caused by the electricity production process of our three sugar factories and; and 2) environmental impact caused by KTBP's biomass electricity factory. The environmental impact of the factories' operations complied with the standards set out in the Notification of the National Environment Board and the Notification of the Ministry of Industry.

With regard to the environmental impact of KTBP’s biomass electricity factory, the evaluator initially determined that the environmental impact of the construction and operation of KTBP did not exceed the acceptable limits as provided in the Notification of the National Environment Board. However, this evaluation was made during the pre-test and pre-commissioning phases of KTBP and is not representative of the environmental impact of KTBP when it becomes operational. In order to minimize the potential environmental impact after KTBP becomes operational, KTBP has devised preventive and corrective measures and monitors the environmental impact of its intended operations on air, soil-surface water and noise pollution. This includes measures to limit air and soil-surface water pollution caused by solid industrial waste generated as a by-product of KTBP's.

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Summary of Material Contracts 1. Agreement to Lease Land and Factories in relation to Sugar Factory

Parties to the Agreement

RPE (the “Lessor”)

KTIS (the “Lessee”)

Execution Date July 16, 2012

Leased Property

Land, sugar factory and other buildings relating to the sugar factory

Objective The Lessor agrees to lease to the Lessee the land, sugar factory and other buildings relating to the sugar factory for the operation of the sugar factory.

Lease Term 30 years commencing from the date that the parties to the agreement register the lease agreement with the official at the relevant land office (August 15, 2012 and August 17, 2012)

Condition to Renew Lease Agreement

The Lessor agrees to provide a commitment to the Lessee to allow the Lessee to lease the leased properties for a further 30 years commencing from the last day of the lease term, provided that the Lessee shall give a notice to the Lessor of its intention to extend the lease term in writing at least 2 years prior to the end of the lease term.

Rental and Deposit

The Lessee agrees to pay the rental on annual basis as follows:

1. For the first 5 years, THB 7,300,000 per annum (divided into land rental amounting to THB 5,300,000 per annum and the rental of sugar factory and other buildings amounting to THB 2,000,000)

2. After the first 5 years, the rental will be increased pursuant to the consumer price index ("CPI") of each year as announced by the Ministry of Commerce, provided that the increase shall not exceed 20% of the rental of the previous year before the adjustment of the rental.

The Lessor agrees to return to the Lessee the deposit amounting to THB 7,300,000, which shall be paid on the lease registration date, within 30 days after the expiration of the lease agreement, except in the event where the Lessee breaches the lease agreement and causes damages to the Lessor.

2. Agreement to Lease Machinery, Equipment and Other Rights in relation to Sugar Factory


RPE (the “Lessor”)

KTIS (the “Lessee”)


Leased Property

Machinery, equipment and other rights in relation to sugar factory

Objective The Lessor agrees to lease to the Lessee the machinery, equipment and other rights in relation to sugar factory.

14

Lease Term 30 years commencing from the date that the parties to the agreement register the land and sugar factory lease agreement with the official at the relevant land office (August 15, 2012 and August 17, 2012).

Condition to Renew Lease Agreement

The Lessor agrees to provide a commitment to the Lessee to allow the Lessee to lease the leased properties for an additional 30 years commencing from the last day of the lease term, provided that the Lessee shall give notice to the Lessor of its intention to extend the lease term in writing at least 2 years prior to the end of the lease term.

Rental and Deposit

The Lessee agrees to pay the rental on annual basis as follows:

1. For the first 5 years, THB 93,700,000 per annum (exclusive of VAT)

2. After the first 5 years, the rental will be increased pursuant to the CPI of each year as announced by the Ministry of Commerce, provided that the increase shall not exceed 20% of the rental of the previous year before the adjustment of the rental.

The Lessor agrees to return to the Lessee the deposit amounting to THB 93,700,000, which shall be paid on the lease registration date, within 30 days after the expiration of the lease agreement, except in the event where the Lessee breaches the lease agreement and causes damages to the Lessor.

3. Claim Assignment Agreement


RPE (the “Assignor”)

KTIS (the “Assignee”)

Execution Date August 30, 2012

Assigned Claim

Claims of the Assignor against contract farmers for repayments under loan agreements executed between the Assignor and the contract farmer to support the contract farmer to plant sugarcane to be used in the business operations of the sugar factory (the “Debtor”), as well as claims against the guarantor, the security provider and properties which are securities (the “Contract Claims”).

Compensation for Assignment of Claim under the Agreement

THB 367,943,414.40 (three hundred sixty seven million nine hundred forty three thousand four hundred fourteen and forty satang)

Claim Assignment under the Agreement

Both parties agree that the assignment of the Contract Claims shall be effective once the Assignee fully pays the compensation for the assignment of claims to the Assignor in accordance with the conditions of this agreement (the “Assignment Date”).

Both parties agree as follows:

1. Within 60 days from the Assignment Date, the Assignor agrees to give notice of the assignment of the right to receive money to the Debtor as well as the third party who is the guarantor and/or the security provider, in order to inform the Debtor along with such third party of the

15

assignment of the Contract Claims, at the Assignor’s expense.

2. Contract Claims which are assigned under this agreement shall include existing mortgage rights, pledge rights, any rights against the guarantor, the security provider and properties which are securities and are related to the Contract Claims to be assigned from the Assignor to the Assignee. If there is need to register any such transfer of ownership in relation to Contract Claims from the Assignor to the Assignee, both parties shall proceed as specified in section 3 of this agreement regarding rights and obligations of the Assignor and the Assignee.

3. If, after the Assignment Date, the Debtor has paid out any money or has performed any action whatsoever which has the effect of releasing the Debtor as well as the third party who is the guarantor and/or the security provider from the debt owed to the Assignor before the receipt of the notice of the assignment of the right to receive the money, the Assignor agrees to pay to the Assignee the money as received from the Debtor and/or such third party.

4. Agreement to Transfer Employees of Sugar Factory


RPE (the “Assignor”)

KTIS (the “Assignee”)


Objective As at the date for the registration of the agreement to lease the land and the sugar factory with the official at the relevant land office (the “Registration Date”), the Assignor agrees to transfer its employees working in the sugar factory to the Assignee in order to allow such employees to be able to continue working in the sugar factory. The Assignee agrees to receive the transfer of such employees from the Assignor. The names, positions and details of salaries, rights, benefits and welfares of such employees shall be as informed to the Assignee by the Assignor.

Effective Date for Transferring Employees

The Assignor and the Assignee agrees that the transfer of employees shall be effective on August 1, 2012 (the “Effective Transfer Date”).

Terms for Transferring Employees

The Assignor and the Assignee agree on the transfer of employees as follows:

1. The Assignee agrees to receive the transfer of rights and duties as well as responsibility for debts and liabilities which have arisen out of or in connection with the transferred employees from the Effective Transfer Date.

The Assignor agrees to be responsible for debts and liabilities which have arisen out of or in connection with the transferred employees prior to the Effective Transfer Date.

2. The Assignee will receive the transfer of employees by continue to count their work period and will continue to assure that the transferred employees receive the same positions, salaries, rights, benefits and welfares that such employees had prior to the Effective Transfer Date as informed by the Assignor.

3. The Assignor agrees to fully pay the wages and benefits to employees and will pay salaries to

16

employees until the Effective Transfer Date.

4. Before or on the Effective Transfer Date, the Assignor will proceed to acquire the consent letters for the transfer of employees, and will deliver to the Assignee the documents relating to the transferred employees.

5. Debt Restructuring Agreement


Siricharoen Export Co., Ltd. (the “Creditor”)

TIS (the “Debtor”)

Initial Agreement Date

February 12, 2013

Amendment Date

December 25, 2013

Execution Date 31 December, 2013

Obligations of Debtor and Securities

The Debtor agrees that the Creditor has received the assignment of claims against the Debtor from financial institutions in respect to loans, as well as the assignment of the relevant securities in accordance with the law and agrees that, as at the execution date, the Debtor still has outstanding debt with the Creditor be calculated on the execution date (the “Outstanding Debt”) As at December 25, 2013, the Outstanding Debt was as follows: principal amount of THB 97,000,000 and outstanding interest amounting to THB 687,156,121.56

Agreement on Debt Restructuring

The Debtor agrees to repay the Outstanding Debt to the Creditors as follows: 1. The Debtor agrees to repay the principal amount and outstanding interest as at the execution

date in installments a period of 20 years from the execution date of this agreement. 2. The Debtor agrees to repay the debt to the Creditor by paying in annually installments in

accordance with the total amount of THB 784,156,121.56, which can be seperated into the principal amount of THB 97,000,000 and interest amount of THB 687,156,121.56

According to the amended agreement, the debtor agrees to pay principal and outstanding interest totaling of THB 34,850,000 for 19 years and will pay the remaining principal and outstanding interest totaling of THB 122,006,122 in the year 20

3. The Debtor agrees to pay interest at the average rates of threebanks: Kasikorn Bank Pcl., Bangkok Bank Pcl., and Krungthai Bank Pcl. on the outstanding principal amount for each period, and interest amount pursuant to the conditions specified in this agreement.

Consequence for Breaching the Agreement

1. If the Debtor fails to repay the debt under the debt restructuring agreement or breaches any provision in this agreement, it shall be deemed that this agreement is terminated and the Creditor shall be entitled to demand the Debtor to repay the whole amount immediately.

2. In the event that the Debtor can remedy the failure to repay the debt or remedy such breach of the agreement, such remedy must be done within 60 days from the date of default or the date of

17

breach of the agreement. In the event that the Debtor is granted an extension to repay the debt from the Creditor in writing, the Debtor shall not be deemed to have breached the debt restructuring agreement.

Remark TIS entered into business rehabilitation in November 2012. Nevertheless, TIS has improved its operational results and financial conditions, and is no longer insolvent; hence, TIS decided to terminate the rehabilitation process. Court has ordered the termination of rehabilitation process of TIS and TIS will repay the debts to the Creditor in accordance with the conditions specified in this agreement.

6. Agreement to Sell and to Purchase Property


TIS (the “Seller”)

BhumiPattana Business Co., Ltd. (the “Purchaser”)


May 10, 2012

Amendment date

January 29, 2014

Property to be Purchased

A total of 142 plots of land consisting of two portions: 1st portion is free from encumbrance and 2nd part is mortgaged to Siricharoen Export Co., Ltd. 1st portion of land has 105 plots with a total area of 1,805 Rai, 2 Ngan, and 3.7 Square Wah. 2nd portion of land has 37 plots with a total area of 903 Rai, 2 Ngan, and 43 Square Wah.

Purchase Price 1st portion of land can be sold as a whole at the purchase price of THB 67,500,000 2nd portion of the land can be sold as a whole at the purchase price of THB 31,000,000

Please note that such purchase price was calculated in accordance with the higher of the appraisal value or the book value of the land.

Payment Method

The purchase price shall be paid on the date of the transfer of the ownership for each plot of land.

Ownership Transfer

The ownership of the 1st portion of land shall be transferred to the Purchaser within 180 days of the execution date.

The ownership of the 2nd portion of the land shall be transferred to the Purchaser within 180 days from the date of the receipt of the written consent or approval from Siricharoen Export Co., Ltd. for the release of the mortgage.

Fee and Tax Duty

The Seller shall be solely responsible for the specific business tax, revenue tax, the transfer fee and expenses which have arisen out of the registration of the transfer of ownership.

Termination of Agreement

In the event that the Seller is unable to transfer ownership of the land within the specified period, the agreement to sell and to purchase the land shall be deemed to be terminated. The Seller shall return

18

any money that has been transferred to the Purchaser in addition to receiving the transfer of ownership from the Purchaser, provided that the Seller shall be solely responsible for the transfer fee and expenses and shall pay a fine to the Purchaser amounting to Baht 25,000,000.

7. Agreement to Sell and to Purchase Property


KTIS (the “Seller”)

BhumiPattana Business Co., Ltd. (the “Purchaser”)


June 5, 2012

Amendment date

January 29, 2014

Property tp be Purchased

529 plot with a total area of 10,639 rai, 1 ngan, and 60 Square Wah.

Purchase Price THB 417,596,750

Payment Method

The Purchaser paid a deposit amounting to Baht 10,000,000 on the execution date and shall pay the remaining purchase price on the date of the transfer of ownership.

Ownership Transfer

The land that is free from mortgage shall be transferred to the Purchaser within 90 days of execution of this agreement. The land that is mortgaged with the bank (creditor) shall be transferred to the Purchaser within 90 days of the date of receipt of written consent or approval from the bank (creditor) for the release of the mortgage.

Fee and Tax Duty

The Seller shall be solely responsible for the specific business tax, revenue tax, the transfer fee and expenses which have arisen out of the registration of the transfer of ownership.

Seizure of Deposit

In the event that the Purchaser breaches the agreement by failing to register the receipt of transfer of ownership within the specified period, the Purchaser agrees that the Seller shall be entitled to retain the deposit.

8. Letter permitting the use of land located at KhetKanklong near the large canal of KhaoKaew Mountain

Grantor Royal Irrigation Department

Grantee EPPCO

Date of Granting Permission

October 1, 2013

Details of Permission

Permission for the implant of a small pumpwith diameter of 0.70 meters in the large canal of KhaoKaew Mountain from 0+000 kilometers to 15+325 kilometers, in AmphurPayuhakeree, Nakornsawan Province

Permission 5 years from October 1, 2013 to September 30, 2018

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Period 9. Land Lease Agreement for Laying Water Pipelines and Drainage and Building Water Treatment Tower


The Treasury Department EPPCO

Agreement Date

August 7, 2003

Terms and Conditions

EPPCO agrees to comply with the terms and conditions in relation to laying water pipeline, drainage, and building water treatment tower in the Treasury Department area based on the instructed land plot. EPPCO also agrees to transfer the property's ownership to Treasury of Department under the supervision of the Royal Irrigation Department

Compensation THB 1,560,280 Fee THB 170,790 Feasibility Study None Technical and Management Assistance None Future Projects 1. New bio-mass power plant: extension of our electricity generating capacity

The new bio-mass power plant operated under Thai Ekarak Power ("TEP") is located in Uttaradit province, adjacent to the TIS sugar factory. This bio-mass power plant will use of bagasse received from TIS sugar factory as its main raw material. The bio-mass power plant will utilize the new technology in the form of a high pressure boiler, which can generate more stream and electricity than low pressure boilers, given the same amount of fuel. TEP will have capacity of 50 megawatts. Some of the electricity generated will be used in the sugar production process, while the remaining will be sold to EGAT. TEP is in the process of negotiation with EGAT for the PPA for the sale of approximately 38.0 megawatts.

The Company estimates that approximately Baht 960 million will be used in this project. The investment can be broken down as follows.

1. Building improvement THB 100.0 millions

2. Machinery and installation cost THB 806.5 millions

3. Working capital and others THB 53.5 millions

Total THB 960.0 millions

The Company expects the construction duration to be approximately 18 months and expects TEP's power plant to completed by the end of 2014. 2. New second bio-mass power plant: extension of our electricity generating capacity

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The new bio-mass power plant operated under Ruampol Bio Power Co., Ltd. ("RPBP") is located in Nakornsawan Province, adjacent to the RPE's sugar factory that the Company leases from RPE. This bio-mass power plant will use of bagasse received from RPE's sugar factory as main raw material. The bio-mass power plant will utilize the new technology in the form of a high pressure boiler, which can generally generate more stream and electricity than low pressure boilers, given the same amount of fuel. RPBP will have capacity of 50 megawatts. Some of the electricity generated will be used in the sugar production process, while the remaining will be sold to EGAT. RPBP is in the process of negotiation with EGAT for the PPA for the sale of approximately 38.0 megawatts.

The Company estimates that approximately Baht 960 million will be used in this project. The investment can be broken down as follows.

1. Building improvement THB 145.0 millions

2. Machinery and installation cost THB 769.5 millions

3. Working capital and others THB 45.5 millions

Total THB 960.0 millions

The Company expects the construction duration to be approximately 18 months and expects TEP to complete by the end of 2014.

3. Bio-fertilizer Factory

The Company utilizes by-product to produce a bio-fertilizer by sending the sugarcane sediments retrieved from sugarcane juice filtering process and vinasse received from ethanol production process to fermentation and processing machinery in order to produce high quality organic fertilizers suitable for soil improvement. This not only adds value to the by-products derived from our production processes, but also reduces the costs of chemical fertilizers for our contracted farmers. Concurrently, the use of such bio-fertilizers promotes the growing of environmentally-friendly organic agriculture. We have observed that the market demand for such bio-fertilizers have been increasing, which also provides opportunities for sale such products to third parties.

The bio-fertilizer factory, when completed, is expected to have a production capacity of 9,000 tons of bio-fertilizer pellets per annum. The factory will be operated by Kaset Thai Bio Fertilizer Co., Ltd. ("KTF"), a subsidiary of EPC, to facilitate orderly management and to consolidate our biomass production and distribution business. Furthermore, the current structure is expected to obtain the promotion certificate from the BOI, which granted KTF the exemption from payment of import duty for machinery and equipment, and exemption from payment of corporate income taxes for net profits derived from the operation of EPPCO's promoted business. This exemption commences on the date on which revenues are retained from such business operation for a period of eight years.

The Company expects to invest approximately Baht 50 million (including working capital) in this 9,000 tons megawatts project. The Company estimates that the bio-fertilizer production project will be completed in 2014. 4. Liquid Sucrose and Super Refined Sugar Projects

As some customers prefer to use liquid sucrose instead of sugar to enhance the ease of use and reduce production cost including transportation cost, cost of transforming sugar to liquid sucrose, the Company plans to establish liquid sucrose factory to serve such customers' need.

The Company's liquid sucrose production will have a capacity of 400 tons per day and over 280 operating days

21

per year. The produced liquid sucrose will have intensity of 66.5 - 67.5 bricks. The target customer will be the industrial customers. The production will be based in Nakornsawaan province, adjacent to the Company's sugar factory.

The Company also plan to produce super refined sugar, which are the raw sugar that is further refined to remove impurities from the sugar crystal. The color of these crystals is lighter with and ICUMSA level ranging from 15 - 25 ICUMSA, which are appropriate for the customers that require sugar with high purity. Super refined sugar will be produced together with the production of liquid sucrose to enhance production efficiency.

Moreover, production and distribution of super refined sugar will increase the Company competiveness in the industry. The Company plans to distribute this super refined sugar to both domestic and international customers including Middle East countries, Korea, and Japan.

The super refined sugar will have a capacity of 500 tons per day over 280 operating days a year. The production will be based in Nakornsawaan province, adjacent to the Company's sugar factory.

The Company estimates that approximately Baht 980 million will be used in this project. The investment can be broken down as follows:

1. Building improvement THB 795 millions

2. Machinery and installation cost THB 65 millions

3. Working capital and others THB 120 millions

Total THB 980 millions

The Company expects liquid sucrose and super refined sugar projects to be operating by the end of 2015.

22

Connected Transactions Connected transactions between the Company/its subsidiaries and related persons for the year ended 31 December 2013 are summarized as follows:- Persons/juristic

persons who Nature of Relationship Nature of Transaction Transaction Value

Reason and Necessity Year Ended 31 December 2013

1. S.I. Property Co., Ltd. ("S.I. Property")

(Operates real estate rental business)

S.I. Property has 4 common directors with the Company: (1) Mr. Nathapun

Siriviriyakul (2) Mrs. Sirirak

Siriviriyakul (3) Mr. Pricha

Attavipach (4) Miss Chua Eng

Eng There are related

companies hold shares in S.I. Property

Office Rent Expense and Related Charges S.I. Property leased its 245.0 sq.m and 444.2 sq.m office spaces at Liberty Plaza Building, 11th floor, Thonglor, Sukhumvit 55, Klongton-Nua, Wattana, Bangkok and charged other service expenses to TIS Accrued Expenses Accrued expenses are related to those common area expenses Securities deposit receivables These receivables are related to security deposit for office lease

2,092,105.90

605.00

398,758.00

S.I Property is the owner of 245.0 sq.m and 444.2 sq.m office spaces at Liberty Plaza Building, 11th floor, Thonglor, Sukhumvit 55, Klongton-Nua, Wattana, Bangkok. The rental rate is approximately THB230 per sqm. Such rent and lease terms are in line with market rates and practice.

2. Aekphol Sugar Co., Ltd.

("APS") (At present, APS mainly operates property rental

APS has 6 common directors with the Company: (1) Mr. Supoj

Wangpreedalertkul (2) Mr. Apichart

Noochprayoon

Office Rental and Related Expenses APS rented out office space on the 3rd, 4th, 5th (portion of it), 6th, and 7th floors of the building located at 92 Vipavadi Rangsit Road, Dindang, Bangkok to TIS, EPC and EPPCO. In addition, APS also rented out office space on the 9th, 10th and 11th of

11,431,952.05

APS is the owner of the said office space and rents it out to the Company and its subsidiaries. The rental rates are approximately THB130 - THB 230 Baht per sqm. Rents and lease terms and conditions are in line with market rates and practice.

23

Persons/juristic persons who

Nature of Relationship Nature of Transaction Transaction Value Reason and Necessity Year Ended 31 December

2013 business) (3) Mr. Nathapun

Siriviriyakul (4) Mrs. Darat

Vibhatakalasa (5) Mr. Montree

Lekvichittada (6) Mr. Boonchai

Noochprayoon There are related

companies hold shares in APS

the office building located at 133 Vipavadi Rangsit Road, Dindang, Bangkok to the Company, EPC and EPPCO Accrued Expenses Accrued expenses are related to those rental and related service expenses Security Deposit Receivable These receivables are related to security deposit for office lease

96,837.33

2,744,751.00

3. Thas Thai Business Co., Ltd.

(“TT”) (Operates sales

of gasoline business)

There are related companies hold shares in TT

Purchased of Gasoline TT sold gasoline to the Company, TIS, EPC and EPPCO

210,270,066.01

TT sold gasoline through gas station located near the factories of the Company and its subsidiaries. Selling price, terms and conditions are in line with market rates and practice.

Accounts Payable Accounts payable related to the purchased of gasoline by the Company, TIS, EPC and EPPCO from TT

23,186,503.15

24



2013 Revenue from Land Lease

The Company and TIS leased 2 plots of land located near their factories, namely (1) land with total area of 5 rai, located in Nhong Po sub-district, Taklee district, Nakornsawan province and (2) land with total area of 4 rai and 9 sq.wah, located in Khung Tapao, Muang district, Uttaradit province. Such leases are for TT to operate its gas station Other Payables The Company and TT received land leased income in advance

119,999.36

60,041.13

TT operates gasoline station business on the land belong to the Company and TIS. The rent, lease terms and conditions are better than those of market

However, on 2 July 2012, the Company and TIS made a long-term 30 years contract with TT. Such contract specified that the rent will be THB60,000 per year for each plot and will increased as per average 5 years historical CPI from 2007 – 2011.

4. TISS Co., Ltd. (“TISS”)

(Operate sugar exporting business)

TISS has 6 common directors with the Company: (1) Mr. Prasert

Siriviriyakul (2) Mr. Nathapun

Siriviriyakul (3) Mr. Boonchai

Noochprayoon (4) Mr. Supoj

Exporting Expenses TISS is the company that handles the export of products produced by the Company and TIS. Most of the payments are export agent fees, agent commissions on the sale and purchase of financial tools, export documentation expenses and custom formality charges

28,819,769.82 Under the Sugarcane and Sugar Act, sugar

mills are prohibited from exporting sugar on their own accord. Therefore, the Company have to export our products through exporting companies, which at present, one of the exporting companies that the Company uses is TISS

For selling of sugar, the Company and its subsidiaries will contact the customers directly. TISS only responsible for cargo

25



2013 Wangpreedalertkul

(5) Mr. Montree Lekvichittada

(6) Mr. Apichart Noochprayoon

There are related companies hold shares in TISS

handlings and documentation for export only

Price, exporting fee, terms and conditions between the Company and TISS are in line with market rates and practice

Packing Credit The Company and TIS obtain packing

credit loan from related company Interest expense Interest payable

968,325,000.00

134,805,383.03

695,398.98

TISS entered into a packing credit agreement with a commercial bank on behalf of the Company and TIS to obtain packing credit loan

TISS transfers an amount of money received from the bank under the approved packing credit line to the Company and TIS. As evidence of receipt, the Company and TIS issue promissory notes bearing the same interest rate that the bank charges TISS

5. Siam P.P. International Co., Ltd. (“Siam PP”)

(Operate production and sales of lime)

Siam PP has 1 common director with the Company, namely Mr. Nathapun Siriviriyaku

There is a related company hold shares in Siam PP

Selling of Lime Siam PP sold lime, which is part of raw materials for sugar and pulp productions, to the Company and EPPCO Accounts Payable Accounts payable associated with the

125,827,527.47

17,204,130.03

Siam PP sold lime to the Company and EPPCO with price, terms and condition is per the Company's internal policies

The audit committee and the board, at audit committee meeting, no. 1/2013 held on January 8, 2013 and board meeting no. 1/2013 held on January 9, 2013,

26



2013 Company and EPPCO purchased lime from Siam PP

approved the handbook for purchase and procurement, which requires that transactions between us and Siam PP be aligned with market prices/rates, terms and practices.

The said handbook was effective on the date of its establishment

6. Ruamkij Angthong

Warehouse Co., Ltd. ("Ruamkij")

(Operate warehouse rental business)

Ruamkij has 3 common directors with the Company: (1) Mrs. Darat

Vibhatakalasa (2) Mr. Nathapun

Siriviriyaku (3) Mr. Apichart

Noochprayoon

There are shareholders and related companies hold shares in Ruamkij

Storage Service Fees Ruamkij has 3 warehouses located at (1) Nhong Po sub-district, Taklee district, Nakornsawan province (2) Pa Moak sub-district/district, Angthong province and (3) Plakod sub-district, Pa Moak district, Angthong province. At present the Company and TIS rented those warehouse from Ruamkij Accrued Expenses The accrued expenses from the renting of Ruamkij’s warehouses

84,004,809.02

7,493,931.08

The warehouses were rented from Ruamkij for the purpose of sugar storage. The rental and lease terms were in accordance with market rates and practice

However, one of Ruamkij’s warehouses in Nhong Po sub-district, Taklee district, Nakornsawan was located on a plot of land owned and leased by the Company to Ruamkij. In order to avoid potential conflicts of interests, the Company purchased the warehouse from Ruamkij on December 17, 2012.

The purchase price was Baht 69,000,000, which was lower than the value appraised by an independent appraiser, namely Knight Frank Charter Co., Ltd., on 4 May

27



2013 2012

Logistics Services Expenses In addition to leasing the warehouses to the Company, Ruamkij also provides the Company and TIS with logistics services Accrued Expenses The accrued expenses from the use of Ruamkij’s logistics services

139,335,590.82

8,869,784.34

Ruamkij provides to the Company and its subsidiaries with logistics services. Service fees and terms and conditions are in accordance with market rates and practice

7. Ruam Toon Warehouse Nakornsawan

Co., Ltd. ("Ruam

Toon") (Operate

warehouse rental business)

Ruam Toon has one common director with the Company, namely Mr. Prasert Siriviriyakul

There are shareholders and related companies hold shares in Ruamkij

Storage Service Fees At present, the Company and TIS rented those warehouse from Ruam Toon Accrued Expenses The accrued expenses from the renting of Ruamkij’s warehouses

21,372,166.87

1,700,306.26

The warehouse was rented from Ruam Toon for sugar storage. The rental and lease terms are in accordance with market rates and practice

28



2013 Logistics Services

In addition to leasing warehouse to the Company, Ruam Toon also provides the Company and TIS with logistics services Accrued Expenses The accrued expenses from the use of Ruam Toon’s logistics services

14,143,759.10

1,320,855.72

Ruamkij provides to the Company and its subsidiaries with logistics services. Service fees and terms and conditions are in accordance with market rates and practice

8. K.T.S. Industry Co., Ltd. ("KTSI") (“KTSI”)

(Operates as a contractor and provider of engineering services)

Mr. Pongpop Popvipak, a director and major shareholder of KTSI, is a controlling person of the Company

Maintenance Service Fees and Spare Part Costs The Company, TIS and EPPCO employed KTSI to provide repair and maintenance services for our production facilities. Most payments are service fees for the repair and maintenance of machines and equipment, including the costs of spare parts Material Sales Revenue KTSI made payments for materials, welding wires and gas sold by the Company, TIS, EPPCO and EPC

190,000.00

3,108.73

The Company and its subsidiaries employ KTSI to conduct the repair and maintenance of our plant machinery. Before we appointed KTSI, we had conducted sourcing to compare the prices and services offered by several maintenance companies. We found that KTSI offered the lowest prices on similar terms and conditions compared to other companies in the market

We sell materials, welding wires and gas to KTSI for the repair and maintenance of our production facilities. The selling prices are a 7.0% mark up on the original costs of the materials, welding wires and gas. It is the Company's policy to sell materials,

29



2013 welding wires and gas to all contractor,

and is to charge every contractor the same price of cost plus 7% marked up, similar to those of KTSI

The audit committee and the board, at audit committee meeting no. 1/2013 held on January 8, 2013 and board meeting no. 1/2013 held on January 9, 2013, approved the establishment of a handbook for purchase and procurement. It is stipulated in the handbook that in the event that we run a procurement process or are seeking bids for repair and maintenance works, a TOR must be drawn up and announced as the criteria for considering the professional qualifications of bidders. We have appointed a committee to consider technical and price proposals and the commercial terms and conditions offered by all bidders. If the successful bidder is an associated entity, the transaction must be approved by the audit committee

The said handbook was effective on the

30



2013 date of its establishment

Asset Associated with Biomass Power Plant KTBP employed skilled labor from KTSI to assemble and install machinery in the construction of the 60 megawatt biomass electricity factory. The total value of the employment agreements was Baht 50,000,000. KTBP has just commercially operates its power plant on 7 October 2013

24,030,000.00

KTBP employed skilled labor from KTSI to assemble and install machinery in connection with the construction of the biomass electricity factory. The employment rates and terms and conditions are in accordance with our internal policies. However, the Company has considered the cost of such power plant and believe that the price that the Company employed KTSI is not more expensive than those of others similar projects

The audit committee and the board, at audit committee meeting, no. 1/2013 (before public company conversion) held on January 8, 2013 and board meeting, no. 1/2013 (before public company conversion), held on January 9, 2013 approved the establishment of a handbook for purchase and procurement. It is stipulated in the handbook that in the event that we run a procurement process or are seeking bids for repair and

31



2013 maintenance works, a TOR must be drawn up and announced as the criteria for considering the professional qualifications of bidders before a contract is awarded. We have appointed a committee to consider technical and price proposals and commercial terms and conditions offered by all bidders. If the successful bidder is an associated entity, the said transaction must be approved by the audit committee.


Receivables From Loan Interest receivables

244,187.84

KTBP extended a loan to KTSI and charged interest at a rate of MLR - 1.875% per annum.

KTSI repaid its loan on 31 January 2013. The Company will not entering into such transactions in the future

Cost Associated with Other Inventories EPPCO purchased factory parts from

KTSI Accounts Receivables

171,652.00

2,140,000.00

EPPCO purchased bricks, which is the remaining factory parts from KTSI works. The price, terms and conditions of such transaction are in accordance with market

32



2013 Receivables from KTSI contracted

EPPCO to build Steam Transformer for KTSI

rates and practice

KTSI contracted EPPCO to provide labor in building Steam Transformer equipment, which is part of KTBP's biomass power plant. The price, terms and condition for such engagement are in accordance with market rates and practice

9. Thai Wisanu Nakornsawan Co., Ltd. ("Thai Wisanu") (Operates hotel business)

Thai Wisanu has 6 common directors with the Company: (1) Mr.Praphan

Siriviriyakul (2) Mrs. Darat

Vibhakatasala (3) Mr. Prasert


Siriviriyakul (5) Mr. Supoj

Wangpreedalertkul (6) Mr. Boonchai

Noochprayoon There is a related

Company holds

Expenses related to hotel rental Thai Wisanu is the owner of Grand Wisanu Plaza Hotel located at 26-28 Attakawe road, Muang district, Nakornsawan province. The Company and TIS rent hotel rooms from Thai Wisanu from time to time Accrued Expenses The accrued expenses from the renting of hotel rooms from Thai Wisanu by the Company and TIS

498,948.57

27,800.00

We rent hotel rooms from Thai Wisanu at similar rates and on terms and conditions similar to those offered by Thai Wisanu to third parties

33



2013 shares in Thai Wisanu

10. Weswisanu Co., Ltd. ("Weswisanu")

Thai Wisanu has 1 common directors with the Company, namely Supoj Wangpreedalertkul

Thai Wisanu, a related company to the Company, hold 90.0% shares in Weswisanu

Employee Dormitory Rent Weswisanu is the owner of the dormitory located in Nhong Po sub-district, Taklee district, Nakornsawan Province, near the EPC and EPPCO factories. Both EPC and EPPCO have rented Weswisanu’s dormitory for their employees

4,759,961.52

The Company and its subsidiaries rented dormitory from Weswisanu. Rental price is approximately THB3,529.5 per room per month. The rental charged by Weswisanu, considering its return on assets, is not higher than other companies’ rental rates in the dormitory business

Accrued Expense Accrued expense associated with EPC and EPPCO rent Weswisanu's dormitory

771,040.00

11. New Thai Identity Co., Ltd. ("NTIS") (Operates buying and selling of products)

Thai Wisanu has 2 common directors with the Company: (1) Mr. Praphan


Siriviriyakul There is a related

Company holds shares in NTIS

Other goods TIS purchased goods and factory equipment from NTIS

12,882,579.50

TIS purchased goods and factory equipment from NTIS. The prices of the goods and factory equipment sold to TIS were at cost price, plus a small amount of operating expenses, while terms and conditions of such sales are similar to what suppliers gives to NTIS

As at December 31, 2012, the Company no longer purchase goods and plant equipment from NTIS

34



2013 Such expenses shown in 2013 reflects the

contract TIS made with NTSI before December 31, 2012 to purchase goods and factory equipment from NTIS

12. KTS Enterprise and Trading Co., Ltd. (“KTSE”)

Mr. Pongpop Popvipak, a director and major shareholder of KTSE, is a controlling person of the Company

Assets Associated with Biomass Power Plant KTBP purchased machinery and equipment from KTSE for the construction of a 60 megawatt biomass electricity factory with a total value of Baht 421,524,889. The power plant has commence its operation in 4th quarter 2013 Retention Payable The retention/warranty from the purchase of machines and equipment from KTSE for the construction of the 60MW biomass power plant

306,805,000.00

11,492,694.31.00

KTBP hired KTSE to construct the biomass electricity factory. The terms of hire were in accordance with our internal policies KTBP จดัจา้ง KTSE. However, the Company has considered the cost of such power plant and believe that the price that the Company employed KTSE is not more expensive than those of others similar projects

The audit committee and the board, at audit committee meeting no. 1/2013 (before public company conversion) held on January 8, 2013 and board meeting no. 1/2013 (before public company conversion) held on January 9, 2013, approved the establishment of a handbook for purchase and procurement. It is stipulated in the handbook that, if we run a procurement process for project construction, a TOR must be drawn up

35



2013 and announced as the criteria for considering the professional qualifications of bidders before a contract is awarded. We have appointed a committee to consider technical and price proposals and commercial terms and conditions offered by the bidders. If the successful bidder is an associated entity, the transaction must be approved by the audit committee


13. Mr. Wang Sian Yu (Engineer)

Mr. Wang Sian Yu is the son of Mr. Pongpop Popvipak, a controlling person of our Company.

Boiler Design Employment Contract for Biomass Power Plant The service fee for the design of boiler with a complete set of accessories, including a dust and soot collector for the 60MW biomass power plant

5,000,000.00

KTBP hired Mr. Wang Sian Yu to design a boiler with a complete set of accessories, including dust and soot collector. The contract was made on 28 August 2012 with the total amount of THB5,000,000

KTBP paid the full amount in 4 quarter 2013

14. Sueb Siri Sawat Co., Ltd. ("Sueb Siri Sawat")

Sueb Siri Sawat has 2 common directors with the Company: (1) Mr. Supoj

Wangpreedalertkul

Land Lease Expense EPC leases the land, which has a land area of 48 rai and 44 sq.wah, in Nhong Po sub-district, Taklee district, Nakornsawan

185,070.56

EPC leased the land for its business operations. The rent and lease terms were more favorable to EPC than those available in the market.

36



2013 (Operate buying, selling and rental of assets)

(2) Mrs. Sirirak Siriviriyakul

There is a related Company holds shares in Sueb Siri Sawad

province, from Sueb Siri Sawat, to run its ethanol production factory Advance Lease Payment Land lease advance payment

99,997.94

On July 2, 2012, EPC signed a long-term lease agreement with Sueb Siri Sawat at a rent of Baht 200,000 per year. The rent would fluctuate according to the average percentage changes in the general consumer price indexes in the previous five years (2007 – 2011). Such contract will expire in 30 years and the Company has the right to extend such contract for another 30 years

15. Chai Siri Nylon Canvass Factory Limited ("CSNC") (Manufactures and sales of nylon canvas and bags)

CSNC has one common director with the Company, namely Mr. Montree Lekvichittada

The Company's directors and related persons are major shareholders of CSNC

Purchase of Sugar Bag The Company purchase sugar bag from CSNC Accounts Payable Accounts payable associated with sugar bag

58,292,479.40

22,016,320.00

The Company purchased sugar bag from CSNC. The purchase price, terms and condition are in accordance with market rates and practice

16. Ruam Toon Trading Nakornsawan Co., Ltd. (“Ruam Toon

Ruamtoon Trading has two common directors with the Company, namely (1) Mr. Prasert

Sugar Transport Charge TIS hires Ruam Toon Trading Nakornsawan to transport sugar to our warehouse for storage.

22,353,168.32

TIS hired Ruam Toon Trading to provide transportation of sugar and deliver to warehouse. Price, terms and conditions of such service are in accordance with market

37



2013 Trading”) (Operates logistic business)

Siriviriyakul (2) Mr. Supoj

Wangpreedalertkul

There is a related company holds shares in Ruam Toon Trading

Accrued Expense - transportation cost Accrued expense associated with transportation cost Other revenue TIS received compensation due to sugar damage during storage Deposit - Transportation In normal case, the Company will deduct deposit of 10% as collateral in case the Company's product is damaged during the transportation. The Company will return such amount after the service is completed

3,294,523.20

79,588.18

71,700.00

rates and practice

17. Siri Charoen Export Co., Ltd. (“Siri Charoen”) (Currently not operates any business)

Siri Charoen has 2 common directors with the Company: (1) Mr. Montree

Lekvichittada (2) Mr. Apichart

Noochprayoon The Company's

directors and related persons are shareholders in Siri

Loan Payable on Debt Restructuring TIS owes money (loan) to Siri Charoen Interest expense Interest payable

97,000,000.00 1,920,068.50

687,156,121.56

In the past, TIS owed money to financial institutions. From 2007 to 2010, as part of TIS's debt restructuring process, Siri Charoen, which has Mrs. Nowarat Wangpredalertkul, APS, and Mr. Montree Lekvichittada as major shareholder hold shares in the company 62.5%, 25.0% and 12.4% respectively, acquired all of TIS’s debts from financial institutions

TIS and Siri Charoen has entered into a debt restructuring contract, which effective

38



2013 Charoen on 1 May 2013, which is the date that

bankruptcy court has order a termination of rehabilitation. From such arrangement, TIS will pay down its outstanding principal and interest in 20 years. In addition, Siri Charoen will charge interest on principal and interest using deposit rate for 3 major banks, namely KASIKORN Bank Public Company Limited, Bangkok Bank Public Company Limited, and Krung Thai Bank Public Company Limited, as a benchmark

However, on 25 December 2013, TIS and Siri Charoen has agreed to adjust the debt restructuring plan, in which such adjustment will be effective on 31 December 2013. Such adjustment allow TIS to pay principal of THB97,000,000 and outstanding interest of THB 687,156,121.56 to Siri Charoen. The Company believes that such adjustment is better for the Company as TIS will have less liability to pay in the future

18. Kaset Thai Sugar Co.,

There are related companies and related

Loan Receivable on Debt Restructuring TIS extended a loan to KTS

349,815,726.72

TIS extended a loan to KTS to improve its liquidity

39



2013 Ltd. ("KTS") (In the past, KTS manufactured and sale sugar. Currently, KTS has no operations)

person hold shares in KTS

Interest receivables - Allowance for bad debt - Net receivables

Interest earned on installment payments

(not yet received)

74,133,730.14 (423,949,456.86)

-

19,990,786.30

Subsequently, on August 19, 2010, KTS was sued for bankruptcy and an absolute receivership order was issued against KTS

On January 10, 2013, KTS filed a petition with the official receiver to offer to pay 5% of the total debt and set aside the order

TIS has set aside an allowance for the full amount of the principal and accrued interest to be recorded as doubtful accounts

Trade Receivables

TIS sold sugar to KTS Allowance for doubtful account Net receivables

85,163,172.51

(80,905,013.88) 4,258,158.63

TIS used to sell sugar to KTS, but not yet receive its payment

As disclosed above, KTS filed a petition with the official receiver on January 10, 2013 to offer to pay 5% of the total debt and set aside the order

On 31 December 2013, TIS has set more allowance for doubtful account, bringing the allowance amount from THB68,665,116.33 to THB80,905,013.88 as per auditor's suggestion

However, KTS will pay the outstanding

40



2013 amount in 2014

19. Poom Pattana Business Co., Ltd.

(Operates property rental)

There are related companies and related person hold shares in Poom Pattana Business Co., Ltd.

Profit from selling land (Non-core assets)

The Company sold plots of land in Lopburi, Utai Thani, Nakornsawan, Petchaboon and Chaimai, with the total combined area of the plots of land is 6,970 rai, 2 ngan and 63.07sq.wah.

49,817,771.13

The Company has entered into a contract to sell non-core land, which was not part of the Company's manufacturing and/or business, to Poom Pattana Business Co., Ltd. on 5 June 2012, with the total land area of 10,774 rai, 3 ngan and 19.64 sq.wah. The price for such transaction will be the higher of book valued or appraised value

In 2012, the Company sold portion of such land, with total area of 3,668 rai, 2 ngan and 93.87 sq.wah and in 2013, the Company sold more land, with the area of 6,970 rai, 2 ngan and 63.07 sq.wah. Total combined land sale is 10,639 rai 1 ngan and 60 sq.wah.

The Company will utilize the remaining unsold land to develop cane farm for the Company's use. As a result in 1 quarter 2014, the Company has amend the contract to sell land to reflect such plan

41



2013

TIS sold plots of land in Pisanuloke, Utaradit, Sukhothai, Prea and Lampang, with the total area of 744 rai, 3 ngan and 99 sq.wah.

7,597,985.00

TIS has entered into a contract to sell non-core land, which was not part of the TIS's manufacturing and/or business, to Poom Pattana Business Co., Ltd. on 10 May 2012, with the total land area of 2,709 rai, and 46.7 sq.wah. The price for such transaction will be the higher of book valued or appraised value

In 2012, the TIS sold portion of such land, with total area of 1,982 rai and 28 sq.wah and in 2013, the Company sold more land, with the area of 744 rai, 3 ngan and 99 sq.wah. Total combined land sale is 2,726 rai 3 ngan and 127 sq.wah.

However, TIS and Poom Pattana Business Co., Ltd. has reevaluate the sale of land and discover that the land per contract is less than what actually sold for 28 rai. As a result, TIS amended such contract to increase the selling area from 2,709 rai 46.7 sq.wah. to 2,737 rai, 46.7 sq.wah.

In addition, TIS will sell the remaining land, with the total area of 10 rai and 20 sq.wah to cane farmer, in which TIS has

42



2013 amended the contract with Poom Pattana Business Co., Ltd. in 1 quarter of 2014

Other Receivables Receivable from TIS selling land to Poom Pattana Business Co., Ltd.

500,000.00

Poom Pattana Business Co., Ltd. will pay the remaining balance to TIS in 2 quarter of 2014

20. Thai Identity Power Co., Ltd. (Produce and sales of power)

Thai Identity Power Co., Ltd. has 3 common directors with the Company:

(1) Mr. Praphan Siriviriyakul

(2) Mr. Prasert Siriviriyakul

(3) Mr. Nathapun Siriviriyakul

There are directors and related persons hold shares in Thai Identity Power Co., Ltd.

Purchase of the company The Company purchase Thai Identity Power Co., Ltd. on 22 May 2013

221,716.47

The meeting of audit committee No. 3/2556 and Board of Directors No. 4/2556 on 11 April 2013 approved the Company to purchase Thai Identity Power Co., Ltd., with the total amount of THB221,716.47, equivalent to such company book value. The Company has paid such amount in 22 May 2013

The Company has a plan to use this company to build the biomass power plant from bagasse, which is one of the Company's future projects

The reason that the Company purchased such company is because Thai Identity Power Co., Ltd. has already begun requesting the relevant authorities regarding environmental issue. As such, by purchasing such company, the

43



2013 Company can save time on the documentation process

21. Ruampol Enterprise Co., Ltd

(“RPE”) (In the past,

RPE manufactured and sale sugar. Currently, RPE has no operations)

RPE has 6 common directors with the Company:

(1) Mr. Praphan Siriviriyakul

(2) Mr. Prasert Siriviriyakul

(3) Mr. Nathapun Siriviriyakul

(4) Mr. Sirivuthi Siamphakdee

(5) Mr. Montree Lekvichittada

(6) Mrs.Darat Vibhatakalasa

Shareholders of the

Company and related companies hold shares in RPE

Purchase of sugar and molasses The Company, TIS and EPC purchased sugar and molasses from RPE Accounts Payable Accounts payable for sugar and molasses

138,133,678.86

559,174,222.90

Purchasing of sugar and molasses can be divided into 2 groups as follows:-

(1) The Company and TIS purchased sugar and molasses from RPE with price, terms and conditions were in accordance with market rates and practice. Such purchase were in accordance with the sale down of remaining sugar and molasses stocks from RPE

However, in 8 May 2013, RPE had sugar remaining in stock in the amount of 5,269,400 kg., which belong to quota A. The Company purchased the remaining sugar using market price, which equivalent to the price controlled by Department of internal trade, ministry of commerce, which equaled to THB20.33 per kg. (including VAT, and if excluding VAT, such price will be THB 19.00 per kg.), deducted by expenses to be paid to the Sugar Cane and Sugar Fund equivalent to THB5.7196 per kg. and storage cost of THB0.45 per kg. (calculated from

44



2013 storage cost ofTHB0.15 per kg. per month and a storage period of 3 months). Total amount is approximately THB 67,608,509.76, which will be paid within July 2013

Such sale was due to RPE leased all of its sugar factory to the Company from 15 August 2012, and transfer related licenses to the Company on 27 February 2013. As a result, RPE cannot sell its sugar by itself

(2) EPC purchased molasses from RPE for its ethanol production. Price for such purchases was according to the Company's' internal policy. Such purchased was part of the sale down of RPE's remaining molasses stock. The Company has set a policy for not entering into such transaction again in the future. The policy was implemented on 1 January 2013

Accounts Payable Accounts payable for fertilizer and pesticide

27,587,856.03

As RPE has lease its sugar factory asset to the Company from 15 August 2012 onwards, RPE sold its remaining fertilizer and pesticide to the Company at book value

Accounts payable As RPE has lease its sugar factory asset to

45



2013 Accounts payable for factory equipments 63,840,677.14 the Company from 15 August 2012 onwards,

RPE sold factory equipment to the Company at book value

Selling expenses RPE paid quota A sugar fund and paid electricity fee on behalf of the Company

21,834,288.94

RPE has lease its sugar factory asset to the Company from 15 August 2012 onwards. However, during that time, the Company was in the process of informing all related government agency and electricity authority in changing billing name to the Company. As a result, RPE had to advance payment for certain expenses during this period. Such expenses include fee for sugar cane and sugar fund for Quota A sugar in the amount of THB21,692,337.31 and electricity bill in the amount of THB 141,951.63. As a result, the Company has the liability to pay back RPE such expenses at the amount equaled to the amount RPE advanced on behalf of the Company

Land lease KTIS lease land, with total area of 173 rai, 95.9 sq.wah., located at Ban Ma Glua sub

5,300,000.00

The Company leased land from RPE, which was part of the lease of sugar factory assets from RPE

46



2013 district, Aum Pur Muang, Nakornsawan Deposit for leasing of factory Deposit for leasing of sugar factory and machinery Prepaid lease Prepaid lease for land, factory and factory equipments Interest expenses Interest expenses recorded based on financial lease for building and machinery

101,000,000.00

62,098,815.82

34,147,389.55

Contract for land lease was made on 16 July 2012, with lease rate of THB5,300,000 per year, increased every 5 years per 5 years historical CPI, but will not exceed 20% of the prior year lease rate

Such contract will expired in 30 years, and the Company has the right to extend it for another 30 years

Lease rate was in accordance to the appraised amount by 2 independent appraisers, namely Knight Frank Charter (Thailand) Co., Ltd. on 8 May 2012, and Sallmanns (FarEast) Limited on 21 May 2012

22. Agro Ethanol Company Limited (Operate investment in property business)

Related companies hold shares in Agro Ethanol Co., Ltd.

Profit from selling of land (Non-Core) The Company sold land in Nakornsawan province, with total area of 1,033 rai, 2 ngan, 47.1 sq.wah.

4,575,242.50

The Company has entered into a contract to sell non-core land, which was not part of the Company's manufacturing and/or business, to Agro Ethanol Company Limited on 20 June 2012, with the total land area of 1,033 rai, 2 ngan and 46.11 sq.wah. The price for such transaction will be the higher of book valued or

47



2013 appraised value

EPPCO sold land in Nakornsawan, with total area of 14 rai, 3 ngan, 34 sq.wah.

69,553.00 EPPCO has entered into a contract to sell non-core land, which was not part of the Company's manufacturing and/or business, to Agro Ethanol Co., Ltd. on 30 June 2012, with the total land area of 14 rai, 3 ngan and 34 sq.wah. The price for such transaction will be the higher of book valued or appraised value

23. E.P.C. Power Limited (Operate investment in property business)

Related companies hold shares in E.P.C. Power Limited

Profit from selling of land (Non-Core) The Company sold land in Nakornsawan and Chainart, with total area of 439 rai 79 sq.wah.

3,701,388.00

The Company has entered into a contract to sell non-core land, which was not part of the Company's manufacturing and/or business, to E.P.C. Power Limited on 15 June 2012, with the total land area of 605 rai, 2 ngan and 2.1 sq.wah. The price for such transaction will be the higher of book valued or appraised value

However, the Company has amended such contract with E.P.C. Power Limited on 18 September 2013, which adjustment mainly reducing the land area sold to 439 rai, 79 sq.wah. The Company will use the remaining land of 166 rai, 1 ngan and

48



2013 24 sq.wah to develop the Company's cane farm

49

Contingencies and Commitments The Company has a liability to issue ordinary shares amounting to THB 2,082.3 as a result shareholder restructuring

transactions occurs in preparation for the listing of the Company's shares on the SET. The transaction was executed at the time of this offering at the IPO price of THB 10. Risk Factors 1. Risks relating to the production and sale of sugar

1.1 Fluctuations in global sugar prices There are material fluctuations in sugar prices. Sugar prices are subject to various factors, including but not

limited, the demand and supply of producing and consuming countries, the import and export quantities of each country and also the speculation in the commodity market.

These factors, especially the demand and supply of sugar products, are affected by climate conditions and government policies concerning the regulation of the sugar industry, especially in developed countries. In addition, sugar prices are also affected by fuel prices as sugarcane juice and molasses can be processed into ethanol, which is then mixed with oil to produce fuel for vehicles. These factors contribute to large fluctuations in the global sugar prices.

Fluctuations in global sugar prices may affect our sales volume and in particular, our export volume. Our domestic sugar sales have not been directly affected by the fluctuating global sugar prices because domestic sugar prices are fixed by the Thai Ministry of Commerce. On the other hand, depending on the quantity of sugarcane harvested and the volume of domestic consumption, we currently export more than 60% of our total sugar sales volume. Therefore, fluctuations in global sugar prices may have a material effect on our sugar sales. 1.2 Availability of substitutes

There are currently several substitutes to sugar, including syrup made from corn starch and various types of sweeteners, such as artificial sugar. Some industrial users may use corn-starch syrup as raw material as it may be cheaper than sugar produced from sugarcane during certain periods. Consumers may also substitute sugar produced from sugarcane with artificial sugar. As a result, we face the risks of a change in consumers' behavior which may reduce the demand for sugar produced from sugarcane. 1.3 Inability of procure sufficient sugarcane of the requisite quality

Main factors contributing to fluctuations in the quantity of sugarcane are: (1) Changes in the size of the cultivation areas, which may arise from changes in Government policy, such as

policies promoting the use of renewable energy through the cultivation of renewable-energy plants, as well as the cultivation of higher-yield plants such as rubber and oil palm.

(2) Changes in climate and climate-related natural disasters such as floods, droughts, contribute to changes in sugarcane yield and sucrose yield.

(3) Insects, crop disease and pestilence might contribute to reduction in sugarcane yield and sucrose yield. If sugarcane agricultural yield is low, our production of sugar will also decrease and we may not be able to

produce sufficient sugar for distribution. Such smaller quantities will cause our average fixed costs to increase per unit while our profits per unit and net profits will decrease.

Furthermore, if sugarcane yield is low, the demand for sugarcane from other sugar producing companies may drive up the cost of sugarcane and cause our costs in procuring raw materials to increase.

The sucrose yield of sugarcane also affects our sugar productivity. If the sucrose yield is low, we will need more sugarcane for sugar production, which may or may not be available.

50

Moreover, approximately 80% to 90% of our sugar sales are made through futures contracts in which the quantity and price are fixed in advance of the actual date of delivery of the sugar. We may face difficulties in delivering the pre-agreed amount of sugar if the sucrose yield of sugarcane is low, as we will only be able to produce a smaller quantity of sugar at a higher cost. 1.4 Accounting adjustments to the price of derivatives

The nature of the sugar business is unique in that there is only one milling season in a year. While sugar is sold throughout the year, the production period runs only in the months between November and April. The export prices of sugar vary materially over the past years due to changes in global market conditions.

In order to minimize the risks of such price fluctuations, we enter into sugar derivative contracts for the sugar we expect to export each year. The majority of such sugar derivative contracts are in the form of commodity swap agreements with a term not exceeding one year. Such commodity swap agreements are entered into on the basis of the sale price of sugar as set by the TCSC, a company constituted under the Sugarcane and Sugar Act. We do not need to recognize mark-to-market adjustments in our profit and loss statement, but we will recognize the gains/losses in our profit and loss statement in accordance with the Thai Financial Reporting Standards when the agreement is completed or expires.

However, if we are required to recognize the unrealized gains or losses in the profit and loss statement when we transition to the International Financial Reporting Standard in the future, we will have to adjust the price of the derivatives, which have not been completed, terminated or expired in that quarter to the market price. This may cause our operating results in each quarter to fluctuate. 1.5 Bad debts arising from loans to our contracted farmers

Companies in the sugar industry have the practice of providing support to sugarcane farmers, whether in the form of funds for sugarcane farming, or in other forms such as the provision of fertilizers or machinery. This is known as the “grant of farmers' loan” or a “farmers' loan”. When the sugarcane is ripe for harvest, which is in the same period as that of the starting of the milling process, the sugarcane farmers will harvest and deliver the sugarcane to the factories, and the factories will pay the farmers the cost of the sugarcane less the farmers' loan which was earlier provided to the farmers.

The grant of farmers' loan ensures that the farmers will supply us with all the sugarcane harvested by the them. On the other hand, however, we face the risk of the sugarcane farmers not being able to deliver sugarcane and not repaying the farmers' loan because climate and climate-related disasters, plagues and other natural disasters may cause sugarcane productivity to be inconsistent with projections, or simply because the farmers may renege on the agreement and fail to deliver sugarcane to us. These factors can cause debts arising from the grant of farmers' loan to become bad debts and affect our operating results.

Nevertheless, the Company have a stringent policy for granting credit facilities to farmers. The Company considers farmers' biography, and readiness to plant sugarcane, their financial needs, financial solvency, and collateral by requiring group guarantees (having several farmers jointly guarantee the same debt) as well as using land, cars, trucks, or tractors as collateral, whereby the collateral amount must be equal or greater than the granting loan.

Moreover, the Company has a policy for setting aside an allowance for doubtful accounts based on the time lag of overdue accounts of the debtors. We will set aside allowance of doubtful accounts at a rate of 100.0% of any balance that is more than 1-year overdue, less the amount of debt collectibles. As at December 31, 2013, the Companies has farmer receivables amounting to THB 1,131.3 millions and has allowance for doubtful account amounting to THB 205.2 millions

51

1.6 Fluctuations in exchange rates

We export no less than 60% of our total sales revenue. Most of our exports are denominated in US dollars. We have hedged our revenues against currency risks by entering into foreign currency exchange derivative contracts. We have a policy of entering into such foreign currency exchange derivative contracts where the hedge is compared against exchange rate risks in the pricing set by TCSC. However, the hedge does not address all risks arising from exchange rate fluctuations. As a result, our sales revenue may fluctuate according to the exchange rates and this may have a negative impact upon our business operations. 1.7 Fluctuations in revenue during milling season

The revenue from the sale of sugar may fluctuate seasonally. The sugarcane harvesting season usually commences in November. We commence sugar milling in November and complete production by April. Once we have commenced milling, sugar is be sold throughout the year. Our sales volume depends on various factors, including the existing inventory, projected productivity and world sugar price. These factors cause our sales revenue and earnings to vary each quarter. 1.8 Compliance with environmental regulation

Our operations are subject to governmental and local environmental laws and regulations . Such laws and regulations govern, among others, soil, water, air and toxic pollution, the eradication and management of garbage and waste, health and safety at work, and the management of dangerous items. These regulations are complex and continuously evolve. The enforcement of such laws and regulations may be subject to the interpretation of relevant authorities.

It is our priority to ensure that our operations comply in full with the requirements governing environmental control and that production processes meet the standards required by the relevant authorities. However, due to the complexity of such laws and regulations and the way they constantly evolve, we may not be able to continue to comply with such laws and regulations in each period, and as such, we may be subject to complaints or penalties under the relevant laws and regulations governing environmental effects. Furthermore, due to the possibility of changes to environmental and health and safety laws and regulations and other unanticipated developments, the amount and timing of future expenditures to comply with such laws and regulations may vary substantially from those currently anticipated.

2. Risks relating to the production and sales of paper pulp

2.1 Reduced demand for paper pulp The demand for paper pulp is affected by global economic conditions. In the event of a global recession,

downstream industries (including the stationery paper, kraft paper, sanitary paper and container paper industries) that utilize paper pulp as raw material may be adversely affected. If such downstream industries require less paper pulp, the sales volume and net earnings of EPPCO may be materially affected. 2.2 Change in consumer behavior

The majority of EPPCO’s clients are companies in the stationery paper, craft paper, sanitary paper and container paper industries. A change of consumer behavior, which is influenced by information technology bringing about the replacement of printed materials with electronic equipment, and the campaign for the conservation of the environment and natural resources, may cause consumers to reduce the use of paper related products. These factors may cause a decrease in the demand for paper and paper pulp, and will directly affect EPPCO’s profitability. 2.3 Compliance with environmental regulation

EPPCO’s paper pulp production and distribution is subject to governmental and local laws and regulations governing the prevention and resolution of environmental effects. Such laws and regulations govern, among others,

52

soil, water, air and toxic pollution, the eradication and management of garbage and waste, health and safety at work, and the management of dangerous items. These regulations are complex and continuously evolving. The enforcement of such laws and regulations may be subject to the interpretation of the relevant authorities.

EPPCO has obtained factory operation licenses pursuant to the respective laws and regulations. Nevertheless, EPPCO still has an obligation to install lime furnaces in order to get rid of lime scraps and to burn lime stones in the lime recovery process, to fully comply with the requirements of these licenses. However, this may increase EPPCO’s investment costs, and may take an extended period of time. This may have a significant adverse impact on the factories’ production activities and EPPCO’s financial standing.

In addition to the aforementioned issues, the Company cannot guarantee that EPPCO will not be subject to any complaint or punished under the law governing environmental effects in the future, or that such complaints or punishments may incur the Company future expenditures and might consequently have an impact on our performance and financial standing

3. Risks relating to Ethanol Production and Sale

3.1 Uncertainty of government policy As Government policy in support of the use of renewable energy has played a major role in the ethanol

industry, our ethanol business is affected by the risks arising from changes to government policies, which may lack continuity and may change with a change of government. This may have a negative impact on EPC’s operations.

The National Energy Policy Board has given the Ministry of Energy the task of preparing a plan to develop renewable and alternative energy in order to reduce dependency on imported fuel and to increase the use and production of ethanol. This plan includes prohibiting the distribution of Benzene 91 and Benzene 95. However, the end of Benzene 91 distribution, which had originally been scheduled to take place by October 1, 2012, was postponed to January 1, 2013. Benzene 91 distribution has ceased in accordance with the Government's requirements to do so by March 2013. In the meantime, the cancellation of Benzene 95 distribution has not been scheduled.

The uncertainty in the government's policy has resulted in EPC’s inability to set up a clear plan to produce ethanol to meet the demands of the market and to accommodate future government policy. Moreover, due to the rescheduling of the cancellation of Benzene 91 distribution, the demand for gasohol, in which ethanol is the main mixture, has not been as high as expected. 3.2 Changes in the reference price of domestic ethanol

Despite the lack of Government regulation of the selling price of ethanol, the Office of the Energy Policy and Planning has set out the standard criteria for the calculation of the price of ethanol. Such pricing, as is referred to in EPC's ethanol sales agreements, is computed by reference to the costs incurred in the production of ethanol using molasses and cassava. If the production costs of ethanol made from molasses and cassava decrease, the ethanol selling price will also decrease. This may then affect our profitability. 3.3 Over production of ethanol

Currently, domestic ethanol factories have an aggregate production capacity of 3,890,000 liters per day (data from the Department of Alternative Energy Development and Efficiency, the Ministry of Energy). However, according to data from the Bank of Thailand, demand of domestic consumption is only 2.8 Liters per day, increased from 2012 by approximately 115.4% due to the cancellation of Benzene 91 since 1 January 2013 resulting in a substantial increase in demand for ethanol for domestic consumption, which consequently increased domestic price of ethanol.

However, domestic demand has increased, the production capacity of the domestic ethanol market still exceeds the domestic demand. If the domestic production capacity dramatically exceeds the domestic consumption

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volume, this may cause the domestic ethanol price to decrease and will affect our profitability. 3.4 Dependence on major clients

Currently, the majority of EPC’s domestic ethanol sales goes to major oil production and distribution companies, including PTT Public Company Limited, Thaioil Public Company Limited and Bangchak Petroleum Public Company Limited. If such major clients negotiate the trading conditions or terminate their trade with EPC, EPC’s revenue and operating results will be significantly affected. 3.5 Fluctuations in exchange rates

EPC exports approximately 7.3% of its total sales volume of ethanol. Most of its exports are denominated in the US dollar. Even though we have used foreign currency exchange derivative contracts to minimize the risks of exchange rate fluctuations, we cannot guarantee that such derivative contracts will be able to hedge against all risks, as EPC has entered into such derivative contracts covering only approximately 40% of its total overseas sale volume. The remaining volume of ethanol sales not subject to such derivative contracts are subject to fluctuations in exchange rates, which may have a negative impact on EPC and our business operations. 3.6 Compliance with environmental regulation

EPC's ethanol production and distribution operations are subject to governmental and local laws and regulations governing, among others, soil, water, air and toxic pollution, the eradication and management of garbage and waste, health and safety at work, and the management of dangerous items. These regulations are complex and continuously evolving. The enforcement of such laws and regulations may be subject to the interpretation of the relevant authorities.

It is EPC's priority to ensure that management is in full compliance with the requirements governing environmental control and that production processes meet the standards required by the relevant authorities . However, due to the complexity of such laws and regulations, we may not be able to continue to comply with such laws and regulations at each period, nor do the Company guarantee that EPC will not be subject to any complaint or punishment under the environmental control laws, or that this will not have an impact on our performance and financial standing.

4. Risks relating to electricity production and distribution 4.1 The electricity selling price according to the electricity price rate may not reflect our actual costs

KTIS Group has entered into Power Purchase Agreement (PPA) with the EGAT and the PEA, where fuel adjustment charges (float time rates, or "FT rates") are pegged against changes in fuel price, inflation rates, exchange rates and other factors. However, the formula that adjusts the FT rates according to fuel costs may not be consistent with our operation costs, as we use bagasse as fuel to generate electricity. This is not consistent with the fuel prices used for the calculation of electricity rates as this calculation is based on natural gas prices. In addition, the FT rates may not always be adjusted in accordance with the specified mechanism. For example, even if fuel costs increase, EGAT may not adjust the FT rates or may only adjust some parts of the FT rates. These factors can cause our Group’s earnings to decrease and may affect our Group’s performance and financial standing. 4.2 The performance of the power plants operation

The efficiency of the electricity generating process depends on the performance of the personnel and equipment of the electricity plants. The several indicators of efficiency of the electricity plants are the equivalent availability factor ("EAF") and heat rates, which are specified in the PPA. If KTIS Group is unable to maintain our production efficiency, we may not be able to generate sufficient electricity and this may in turn affect the revenue from KTIS Group’s electricity sales 4.3 Compliance with environmental regulation

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Electricity production and distribution operations are subject to governmental and local laws and regulations targeted at addressing environmental issues. Such laws and regulations are govern, among others, soil, water, air and toxic pollution, the eradication and management of garbage and waste, health and safety at work, and the management of dangerous items. These regulations are complex and continuously evolving. The enforcement of such laws and regulations may be subject to the interpretation of the relevant authorities.

In 2010, the Energy Regulatory Commission ("ERC") require that RPE, from which KTIS leases the electricity plants, propose a plan of operation to reduce air pollution caused by the production of dust. Said plan shall be prepared within five years from the date the electricity generating license is granted, provided that the electricity plants can continue their operation during the plan preparation period. RPE was granted an extension to September 19, 2015 for the preparation of the plan of operation. Because, in accordance with the business reorganization plan of RPE, the Company leases our electricity plants from RPE, the ERC has allowed RPE to assign the right under the energy business operation license to KTIS, on the condition that the Company enjoy the same rights as specified in the original license, and carry out all other relevant obligations. the Company therefore bear the responsibility of preparing and submitting the plan of operation to the ERC.

If the Company fail to submit the EIA Report or fail to prepare the plan of operation as required by the ERC, we will be considered to have failed in complying with ERC regulations and may have electricity generating license suspended or revoked. The suspension or revocation of such license may result in interference with the electricity production and distribution operations, which will have a significant adverse impact on our performance and financial standing.

Furthermore, if ERC does not approve the environmental assessment report of TIS, ERC might suspend or terminate electricity generating license, which will have a significant adverse impact on our performance and financial standing.

In addition to the aforementioned issues, the Company cannot guarantee that it will not be subject to any complaint or punished under the laws targeted at environmental issues in the future, the Company also does not represent that its performance and financial standing will not be affected by any complaints or punishment under such laws. Furthermore, due to the possibility of changes to environmental and health and safety laws and regulations and other unanticipated developments, the amount and timing of future expenditures to comply with such laws and regulations may vary substantially from those currently anticipated.

5. The pro-forma consolidated financial statement may not reflect our Group's actual operating results and financial standing

In 2012, the Company underwent a restructuring in order to increase its operating efficiency and to prepare for its listing on the SET. In this regard, we prepared the pro-forma consolidated financial statement, which reflects material effects upon our past financial statement, as if the Company had invested in the subsidiaries in the past. However, the pro-forma consolidated financial statement may not reflect the Company Group’s actual operating results and financial standing as it was prepared on the basis of certain assumptions that had not yet materialized.

Lawsuit

As at January 15, 2013, we do not have any pending legal disputes that: (a) represent more than 5% of our shareholders’ equity, and which may have an adverse effect on our assets; or (b) may have a significant impact on our business operations No. of Employees As at December 31, 2013, the Company and its subsidiaries have employees totaling to

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3,282 employees. Company Background

The Company or KTIS Group, originally known as Thai Identity Sugar Group, was founded by Mr. Jaroon Siriviriyakul and Mrs. Hathai Siriviriyakul. We are a sugar producer with more than 49 years of experience. Currently, KTIS Group are a fully integrated production and sale of sugarwith connected industrial business.

The Company converted to a public company limited and increased registered capital from THB 3,274,573,000 to THB 3,888,000,000 on January 29, 2013 with paid-up capital of THB 3,274,573,000. Origination The Company first began operations as a sugar distributor. In 1967, Mr. Jaroon

Siriviriyakul and other distributors in Nakornsawan Province, together purchases MahaKhoon Industry Co., Ltd., which has a sugar factory as a core asset, and renamed to the company to Ruampol Enterprise Co., Ltd. ("RPE"). Since then, RPE has continuously increased the production capacity of its sugar factory from 500 tons of sugarcane per day to the present 15,000 tons of sugarcane per day. After the success of the RPE, RPE shareholders decided to acquire Thai Identity Sugar Factory Co., Ltd. ("TIS") in 1981. At the time, TIS had a production capacity of 6,000 tons of sugarcane per day, which has since been continually improved and expanded. Currently, the TIS Factory has a total production capacity of 18,000 tons of sugarcane per day. Subsequently, shareholders decided to purchase Kaset Thai Sugar Co., Ltd. in 1988, which has a production capacity of 6,000 tons of sugarcane per day.

In 2003 Apart from sugar production and distribution, the Siriviriyakul family has diversified its

business operations through the establishment of a group of companies with fully-integrated operations that utilize by-products from sugar production. In 2003, the Siriviriyakul family jointly established Environment Pulp and Paper Co., Ltd. ("EPPCO") with Permsin Pattana Co., Ltd. ("PSP") and two groups of Singapore-based investors, King Wan Corporation Limited, and Xylem Investment Pte. Ltd.. EPPCO produces bleached paper pulp using bagasse, a by-product from sugar production, as its main raw material with a production capacity of approximately 100,000 tons of bleached paper pulp per annum.

In 2005 Siriviriyakul family, together with three Singapore-based investors, King Wan Industries

Pte Ltd., Far East Distillers Pte Ltd., and Sinotac Group Pte Ltd., jointly established Ekarat Pattana Co., Ltd. ("EPC") to operate an Production and sale of ethanol business from molasses which is by-product from sugar production. EPC currently has a maximum production capacity of 230,000 liters of ethanol per day.

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In 2008 Management of the Company sought business alliances with the intention of improving the financial structure and liquidity of Kaset Thai Sugar Co., Ltd., which was affected by economic crisis in Thailand. Until 2008, management decided to joint venture with a Singapore-based company, UT Group Pte. Ltd., and established the new sugar company named Kaset Thai Industry Sugar Co., Ltd. This joint investment resulted in the further expansion of KTS Factory's production capacity to 55,000 tons of sugarcane per day

In 2010 Siriviriyakul family commenced a project that utilized bagasse, a by-product of bleached

paper pulp production, as a raw material for the generation and sale of electricity. Kaset Thai Bio Power Co., Ltd. ("KTBP") was established to run a biomass power plant with a 60 megawatt capacity. KTBP has been commercially run since October 7, 2013. KTBP is currently one of the largest small renewable energy power producer (SPP) in Thailand. It will sell electricity to the Electricity Generating Authority of Thailand pursuant to a sale and purchase of electricity agreement.

In 2011 Siriviriyakul family also expected benefits from utilizing molasses and vinasse, by-

products from our sugar and ethanol production businesses respectively, to produce and distribute bio-fertilizer pellets. Kaset Thai Bio Fertilizer Co., Ltd. ("KTF") was established as a wholly-owned subsidiary of EPC in order to expand its integrated industrial business. Upon commencement of operations, KTF will have a production capacity of 90,000 tons of bio-fertilizer pellets per annum.

In 2012 Apart from introducing more products from the integrated industrial business, we have

also implemented a development policy for sugarcane harvesting and farming. In 2012, we entered into a contract with T. K. Equipments Co., Ltd., John Deere’s authorized dealer in Thailand, to purchase 40 John Deere sugarcane harvesters with total value of approximately THB 438 million. Pursuant to this contract, John Deere will provide training and advise us on the maintenance, repair, and development of our farming tools and equipment. These harvesters are expected to enhance our contract farmers’ efficiency in sugarcane cultivation, which will in turn result in an increase in the amount of raw materials available for our business operations. This is consistent with our philosophy that "wealthy farmers secure KTIS Group".

In 2013 − The Company aims to continue its business expansion. Board meeting No. 4/2556

dated April 11, 2013 and Extraordinary General Meeting No. 1/2556 dated April 29, 2013, have considerately agreed to purchase Thai Ekarak Power Co., Ltd. ("TEP") from existing shareholders to operating biomass power plant with a 50 megawatt capacity using bagasse directly received from TIS. As of May 22, 2013, the Company has purchased TEP amount of THB 221,716.47, which is equivalent to book value of the TEP. Additionally, the Board meeting and the Extraordinary General Meeting, also agreed to establish Sapsirikaset Co., Ltd. (“SSK”) to procure

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land for the Company's future business expansion. In 2013, SSK has purchased land from non-related parties totaling to 2,629 Rais, 1 Ngan, and 16 Square Wah.

− On June 14, 2013, the Company established Ruampol Bio Power Co., Ltd. to operate a biomass power plant with a 50 megawatt capacity using bagasse directly delivered from RPE

− On September 16, 2013, Sumitomo Corporation and Nissin Sugar Co., Ltd. ("Investor A") entered into the investment agreement to participate in equity investment in the Company's shares via 3S Holding Co., Ltd. with the amount not exceeded THB 2,650 millions, in which the two companies are not related. As a world trading, the Company believes the investment will strengthen the Company's competitiveness in the global market and will help expanding business in Southeast Asia. Nevertheless, this investment will not give Investor A material management authorities to management in the Company's business operation

− Moreover, according to the investment, 3S Holding Co., Ltd. cannot dispose shares of the Company within one year after the commencement of the trading date. As a result, Investor A will not be able to dispose the Company's shares within one year after the Company has been listed in the SET, although the shares held by Investor A are not considered as a lock-up portion according to Notification of the Board of Governors on the SET on "Prohibiting Management or Shareholders and Related Persons from Selling Shares and Securities within a Specified Period, 2001". Moreover, the investment agreement indicates that Investor A must hold at least 30% of the Company's shares in 3S Holding Co., Ltd.

− Furthermore, the Board Meeting No. 9/2556, dated on November 11, 2013, has considerately agreed to established (1) Lopburi International Sugar Co., Ltd ("LIS"), to support the Company's business plan to expand its production and sale of sugarof KTIS Group (2) Lopburi Bioethanol Co., Ltd. ("LBE") to support the Company's business plan to expand its ethanal production and distribution of KTIS Group, and (3) Lopburi Biopower Co., Ltd. ("LBP") to support the Company's business expansion in electricity areas. These companies will be operating under PSP. However, the companies are still in the process of granting relevant operating licenses and requesting for B.O.I. certificates.

Investment in subsidiaries As at December 31, 2013, the Company has direct subsidiaries as listed below

To enhance the efficiency of the Company's business operation and prepare the Company for listing in the SET, the Company has restructured the shareholding structure Company. In doing so, the Company has purchased shares in subsidiaries

After the restructuring of the shareholder, the Company holds shares in 12 following subsidiaries:

Name Type of business

Paid-up Capital

% of shareholding

Investment Cost (Baht)

Direct subsidiaries

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Name Type of business Paid-up Capital

% of shareholding

Investment Cost (Baht)

1 Thai Identity Sugar Factory Co., Ltd. (TIS)

Sugar production and distribution 1,215 100.0 1,214,999,400

2 Ekarat Pattana Co., Ltd. (EPC)

Ethanol production and distribution 256 100.0 860,655,657

3 Environment Pulp and Paper Co., Ltd. (EPPCO)

Pulp production and distribution 1,200 74.0 1,754,191,582

4 Permsinpattana Co., Ltd (PSP)

A holding company, currently hold 26% in EPPCO

5 100.0 698,904,543

5 Kaset Thai Bio Power (KTBP)

Electricity production 500 100.0 1,698,219,093

6 Ruamphol Biopower Co., Ltd.

Not yet operate 1 100.0 999,700

7 Thai Ekarak Power Co., Ltd. (TEP)

Electricity production (Not yet operate)

1 100.0 971,492

8 Sapsirikaset Co., Ltd. (SSK)

Land procurement 1 100.0 999,700

Indirect subsidiaries that the Company holds shares via Ekarat Pattana Co., Ltd. 9 Kaset Thai Bio Fertilizer

Co., Ltd. (KTF) Bio-fertilizer production and distribution (Not yet operate)

15 100.0 N/A

Indirect subsidiaries that the Company holds shares via Permsinpattana Co., Ltd (PSP) 10 Lopburi International

Sugar Co., Ltd ("LIS") Production and sale of sugar(Not yet operate)

1 100.0 N/A

11 Lopburi Bioethanol Co., Ltd. ("LBE")

Ethanol production and distribution (Not yet operate)

1 100.0 N/A

12 Lopburi Biopower Co., Ltd. ("LBP")

Electricity production (Not yet operate)

1 100.0 N/A

Moreover, the Company entered into long term lease agreements for land, a sugar factory, machinery, and other

rights in relation to sugar factory with RPE.

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Structure of KTIS Group prior to Restructuring

Structure of KTIS Group after Restructuring

Source: KTIS * Including Singapore-based shareholders

1. King Wan Corporation Limited will hold shares of the Company approximately 2.3% 2. King Wan Industries Pte. Limited will hold shares of the Company approximately 0.8% 3. Xylem Investment Pte. Ltd. will hold shares of the Company approximately 0.2% 4. Sinotac Group Pte. Ltd. will hold shares of the Company approximately 0.5% 5. Mr. Chua Kim Hua will hold shares of the Company approximately 0.6% 6. Mr. Chua Eng Eng will hold shares of the Company approximately 0.6% 7. Far East Distillers Pte. Ltd. will hold shares of the Company approximately 0.5%

In addition, the Company plan to sell some of the Company's land, which is not part of the business operation (Non-

core asset) to the previous owner. The price for such transaction will be the higher of book valued or appraised value. The transaction is part of the restructuring process and the Company might earn gain from the sale of this non-core asset, which should not be material. Change in Capital in the last 3 years

Unit: THB millions

Date Capital

increase (decrease)

After the increase (decrease) Note/ objective

28 January 2013 613.4 3,888.0 For allocation to the ESOP warrant amounting to

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Unit: THB millions

Date Capital

increase (decrease)

After the increase (decrease) Note/ objective

28,000,000 shares and for allocation to the public at the initial public offering amounting to 585,427,000 shares

20 June 2012 1,139.6 3,274.6 For shareholder restructuring of the Company in preparation for listing in the SET

22 February 2012 135.0 2,135.0 For shareholder restructuring of the Company

Accounting Period 1 January - 31 December Auditor Mr. Prasit Yuengsrikul PricewaterhouseCoopers ABAS Ltd. Registrar Thailand Securities Depository Co., Ltd. Financial Advisor Kasikorn Securites Pcl. Co-lead underwriter

KT ZMICO Securities Company Limited Maybank Kim Eng Securities (Thailand) Plc.

Underwriter AEC Securities Plc.

Dividend Policy

The Company declares dividend payments amounting to not less than 50% of our net profits as recorded in the Company's standalone financial statements, after deducting all taxes and legal reserves pursuant to the Company's Articles of Association and relevant laws, if no event and not limited by debt covenant, and the dividend payment does not have a significant effect to the Company's operations. The decision shall be made to ensure the shareholders' benefits are maximized. B.O.I. Certificates

KTIS Group obtained a promotion certificate from the Thailand BOI as detailed in the following:

EPPCO obtained a promotion certificate from the Thailand BOI in respect of its pulp production and distribution business on June 5, 2003. As such, subject to the conditions imposed by the BOI, EPPCO is provided with certain significant privileges, as follows

- Exemption from payment of import duty for machinery and equipment; - Exemption from payment of corporate income taxes for the net profits derived from the operation of

EPPCO's promoted business. This exemption commences on the date on which revenues are retained from such business operation for a period of eight years;

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- Following the period of exemption from payment of corporate income taxes on the net profits for eight years as described above, corporate income taxes are reduced by 50% for a further period of five years; and

- During the period by which corporate income taxes are exempted, dividends distributed from the profits derived from the promoted business are excluded in the calculations of personal or corporate income tax, as the case may be.

EPC obtained a promotion certificate from the Thailand BOI in respect of its Production and sale of ethanol business on August 11, 2004. As such, subject to the conditions imposed by the BOI, EPC is provided with certain significant privileges, as follows:

- Exemption from payment of import duty for machinery and equipment; - Exemption from payment of corporate income taxes for the net profits derived from the operation of EPC's

promoted business, in an aggregate of not more than 100% of the invested amount, excluding the cost of land and working capital. This exemption commences on the date on which revenues are retained from such business operation for a period of eight years;

- Deduction of costs in relation to installation or construction of facilities by 25% of the amount invested in the promoted business. This deduction is in addition to the normal deduction for depreciation; and


KTBP obtained a promotion certificate from the BOI in respect of its electricity production and distribution business on August 26, 2010. As such, subject to the conditions imposed by the BOI, KTBP is provided with certain significant privileges, as follows:

- Exemption from payment of import duty for machinery and equipment; - Exemption from payment of corporate income taxes on the net profits derived from the operation of KTBP's

promoted business, in an aggregate of not more than 100% of the invested amount, excluding the cost of land and working capital. This exemption commences on the date on which revenues are retained from such business operation for a period of eight years.

- Following the period of exemption from payment of corporate income taxes on the net profits for eight years as described above, corporate income taxes are reduced by 50% for a further period of five years;

- Deduction of costs in relation to installation or construction of facilities by 25% of the amount invested in the promoted business. This deduction is in addition to the normal deduction for depreciation; and


Number of Shareholders As at April 24, 2014

No. of

Shareholders No. of Shares % of paid-up

Capital 1. Strategic shareholders

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No. of Shareholders

No. of Shares % of paid-up Capital

1.1 Directors, manager, and executive management including related person

21 577,418,600 14.96

1.2 Shareholders who have a holding of above 5% including related person

2 2,361,960,000 61.19

1.3 Controlling Shareholders - - - 2. Non-Strategic shareholders hold > 1 trading unit 5,195 920,621,400

23.85

3. Non-Strategic shareholders hold < 1 trading unit - - - Total 5,218 3,860,000,000 100.00%

Major Shareholders As at April 24, 2014

Shareholders

After the offer of newly issued shares to the public

Prior to the public offering

Number of shares

Percentage Number of

shares Percentage

1. Siriviriyakul Family Mrs. Hathai Siriviriyakul1 2,070,360,000 53.64 2,070,360,000 63.23 Mr. Sirapak Siriviriyakul 190,000,000 4.92 190,000,000 5.80 Mr. Sirapat Siriviriyakul 120,892,900 3.13 120,892,900 3.69 Mr. Prin Siriviriyakul 70,832,000 1.84 5,832,000 0.18 Mrs. Pranee Siriviriyakul 5,832,000 0.15 5,832,000 0.18 Mr. Prach Siriviriyakul 5,832,000 0.15 5,832,000 0.18 Mr. Pan Siriviriyakul 5,832,000 0.15 5,832,000 0.18 Miss Saisiri Siriviriyakul 65,000,000 1.68 - - Miss Siraarpa Siriviriyakul 38,880,000 1.01 38,880,000 1.19 Mr. Prasong Siriviriyakul 27,216,000 0.71 27,216,000 0.83 Mrs. Voraya Siriviriyakul 27,215,900 0.71 27,215,900 0.83 Miss Kanokthip Siriviriyakul 8,776,000 0.23 7,776,000 0.24 Mr. Prasert Siriviriyakul 5,832,000 0.15 5,832,000 0.18 Miss Arisara Siriviriyakul 330,000 0.01 - - Miss Issaraporn Siriviriyakul 5,000 0.00 - -

Sub-total 2,642,835,800 68.47 2,511,500,800 76.70 2. 3S Holding Co., Ltd.1 291,600,000 7.55 291,600,000 8.90 3. Aushores Trust (Singapore) Pte. Ltd.

(ATO Zenith Asia Fund) 128,000,000 3.32 - -

4. Miss Kristy Joelle Green 97,800,000 2.53 - - 5. King Wan Group

King Wan Corporation Limited 87,267,000 2.26 - -

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Shareholders

After the offer of newly issued shares to the public

Prior to the public offering

Number of shares

Percentage Number of

shares Percentage

King Wan Industries Pte Ltd. 29,051,000 0.75 - - Sub-total 116,318,000 3.01 - -

6. Wangpreedalertkul Family Mr. Supoj Wangpreedalertkul 6,344,000 0.16 6,344,000 0.19 Mrs. Nawarat Wangpreedalertkul 8,282,000 0.21 8,282,000 0.25 Mr. Poomrerk Wangpreedalertkul 35,131,300 0.91 5,832,000 0.18 Mr. Poomrata Wangpreedalertkul 23,279,400 0.60 5,832,000 0.18 Mr. Surat Wangpreedalertkul 800,000 0.02 - - Mr. Kriengsak Wangpreedalertkul 50,000 0.00 - -

Sub-total 73,886,700 1.91 26,290,000 0.80 7. Singapore-base Shareholders

Miss Chua Eng Eng 21,544,000 0.56 - - Mr. Chua Kim Hua 21,544,000 0.56 - - Xylem Investment Pte. Ltd. 8,727,000 0.23 - -

Sub-total 51,815,000 1.34 - - 8. Mr. Arun Bumrungkao 21,000,000 0.54 - - 9. Sinotac Group Pte Ltd. 20,047,000 0.52 - - 10. Far East Distillers Pte Ltd. 20,047,000 0.52 - -

Total 3,463,349,500 89.72 2,829,390,800 86.40

Remarks: 1 On 28 April 2014, which is the first day trade of the Company's shares on the SET, Mrs. Hathai Siriviriyakul will sell the Company's ordinary shares in the amount of 417,364,800 shares, or 10.8% of total paid-up capital of the Company post-offering, on the Big Lot Board to 3S Holding Co., Ltd. (held by Mrs. Hathai Siriviriyakul of 70% and Sumitomo Corporation and Nissin Sugar Co., Ltd. ("Investor A") of 30%). As a result, 3S Holding Co., Ltd. will hold 708,964,800 shares in KTIS, as agreed in the investment agreement between Sumitomo Corporation, Nissin Sugar Co., Ltd., and Mrs. Hathai Siriviriyakul. Ultimately, 3S Holding Co., Ltd. will hold KTIS shares amounting to 972,000,000 share, an equivalent of 25.2% of the Company's total paid-up capital post-offering, whereby the investment value is not exceeding THB 2,650 millions.

Shareholder list of 3S Holding Co., Ltd as of 24 April 2014

Name No. of Share Percentage to Total shares After the offer of newly issued shares

to the public Mrs Hathai Siriviriyakul 204,120,000 70.0 Sumitomo Corporation 72,900,000 25.0 Nissin Sugar Co. 14,580,000 5.0 Total 291,600,000 100.0

Foreign Shareholders As at April 24, 2014, the Company has 30 foreign shareholders, holding 739,895,600

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shares in total, or approximately 19.17% of paid-up capital. Remarks: The company has a limitation of foreign shareholding. According to the Article of Association no. 11, a total share held by foreigners in at any one time must not exceeding 49.0 percent of the total paid-up capital. The Company has the right to refuse the transfer of shares that cause foreign shareholding to exceed the limit.

Board of Directors

No. Name Position Appointed Date 1. Mr. Pricha Atthawipach Chairman 16 May 2008

2. Mr. Sirivuthi Siamphakdee Vice-Chairman 16 May 2008

3. Mr. Parphan Siriviriyakul Director and Chief Executive Officer - KTIS Group

16 May 2008

4. Mr. Natthapan Siriviriyakul Director and Chief Executive Officer - Bio Energy and Product

16 May 2008

5. Mrs. Darat Wiphataklas Director and Deputy Executive Officer - KTIS Group

26 April 2012

6. Mr. Prasert Siriviriyakul Director and Chief Executive Officer - Cane and Sugar

16 May 2008

7. Miss Siraarpa Siriviriyakul Director 26 April 2012

8. Mr. Apichart Noochprayoon Director 26 April 2012

9. Mr. Boonchai Noochprayoon 1

Director 26 April 2012

10. Ms. Chua Eng Eng 2 Director 29 January 2013

11. Mr. Krairit Nilkhooha Independent Director and Chairman of Audit Committee

1 March 2014

12. Mr. Sataporn Kotheranurak Independent Director and Member of Audit Committee

26 April 2012

13. Acting Sublt. Theerayut Changpetch

Independent Director and Member of Audit Committee

26 April 2012

14. Mr. Isgan Kraiwit Independent Director 26 April 2012

15 Mr. Phoonsak Boonsalee Independent Director 26 April 2012

Remarks: 1 After the Company lists on the SET, Investor A, which has already entered into investment agreement with the Company to participate in investment equity of the Company via 3S Holding , will appoint one person to be sat in the Board of Director by replacing Mr. Boonchai Noochprayoon's seat

2 Ms. Chua Eng Eng is a director and is a representative from King Wan Corporation Limited Audit Comittee

Our Board, at Board of Directors Meeting No. 1/2013 held on January 29, 2013, passed resolution to appoint Audit

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Committee as detail as follows: No. Name Position 1. Mr. Sompong Wanapha Chairman of Audit Committee 2. Mr. Sataporn Kotheranurak Member of Audit Committee


Member of Audit Committee

Mr. Sataporn Kotheranurak is the Audit Committee that has sufficient knowledge and experience to review the accuracy and reliability of the Company's Financial Statement.

Nevertheless, Board of Directors Meeting No. 1/2014 dated 26 February 2014 passed resolution to appoint Mr. Krairit Nilkhooha to replace Mr. Sompong Wanapha that has resigned from the Board of Director of the Company and act as independent director and Audit Committee.

Currently, the Company has Audit Committee as follows:

No. Name Position 1. Mr. Krairit Nilkhooha Chairman of Audit Committee

2. Mr. Sataporn Kotheranurak Member of Audit Committee


Member of Audit Committee

Mr. Sataporn Kotheranurak is the Audit Committee that has sufficient knowledge and experience to review the accuracy and reliability of the Company's Financial Statement. Mrs. Nattira Paisayom is a secretary of the Audit Committee.

Scope of Power and Duties of the Audit Committee

Our Board, at Board of Directors Meeting No. 1/2013 held on January 29, 2013, defined the scope of power and duties of the Audit Committee, as follows:

(A) The Audit Committee shall ensure that our financial statements are complete and accurate;

(B) The Audit Committee shall ensure that we have implemented appropriate and efficient internal controls and audit systems, and that the Internal Audit Bureau is independent. It shall also be responsible forthe approval of the appointment, transfer or termination of the Chief of the Internal Audit Bureau, or any other unit responsible for internal audit;

(C) The Audit Committee shall ensure that we comply with securities and exchange laws, regulations of the SET and laws relating to our business operations;

(D) The Audit Committee shall recruit and nominate an independent third-party as our auditor, determine the auditor's fees and hold at least one meeting per year with the auditor, without the participation of the management;

(E) The Audit Committee shall ensure that our connected transactions, or transactions that may result in conflicts of interest, are conducted in compliance with the law and rules of the SET, and shall ensure that such transactions are reasonable and in our best interests;

(F) The Audit Committee shall prepare an Audit Committee’s report which will be disclosed in our annual

66

report. The report must be signed by the chairman of the Audit Committee and shall contain the following details:

1) an opinion on the accuracy, completeness and reliability of our financial statements; 2) an opinion on the sufficiency of our audit control system; 3) an opinion on compliance with securities and exchange laws, regulations of the SET and the laws

relating to our business; 4) an opinion on the suitability of the auditor; 5) an opinion on transactions which may result in conflicts of interest; 6) number of meetings held by the Audit Committee and the attendance record of each member of the

Audit Committee; 7) comments or overall remarks obtained by the Audit Committee in relation to its performance under

the Charter; and 8) other matters of which our shareholders and general investors should be informed

(G) If the Audit Committee, in the course of their duties, finds or is suspicious of one of the following transactions or actions which has significantly affected our financial standing and operating results, the Audit Committee shall report such transaction or action to the Board such that the relevant rectifications can be made:

1) a transaction resulting in a conflict of interest; 2) fraud or any major irregularity or defect in our internal control system; or 3) a violation of securities and exchange laws, regulations of the SET and the laws relating to our

business If the Board or Management fails to rectify the problem within the time specified, any member of the Audit

Committee may make a report to the SEC or the SET; and

(H) The Audit Committee shall perform any other activities as designated by the Board with the Audit Committee’s approval.

Membership Term The term of Directorship of the chairman and members of the Audit Committee is three years from the date of their

appointment. Any retiring member of the Audit Committee may be re-elected. Where a Director’s office in the Audit Committee is vacated by reason other than retirement, the Board shall elect a sufficiently qualified candidate to ensure that the requirements prescribed by the Board are met. The person so appointed shall remain in office for the same period of time as the vacating Director was entitled to remain in office.

Listing Conditions None

Silent Period Shareholders, who own common shares before the company’s public offering,

holding 2,123,000,000 shares or 55% of paid up capital after the initial public offering certify to the Stock Exchange of Thailand that their shares will not be sold for the period of one year from the first trading date. Upon the expiry of 6 months period of the prescribed time, those shareholders will be allowed to sell 25% of the total amount of shares prohibited for sale and the rest after one year

Waiver from the SET None

67

Others ESOP Warrants

Our Board, at Board of Directors Meeting No. 1/2014 held on February 26, 2014 and Annual General Meeting of shareholders No. 1/2014, held on March 13, 2014, passed a resolution to approve the issuance of 28,000,000 warrant units to management and employees of the Company, in addition to Board of Directors' resolution No. 1/2013 held on January 29, 2013, and Extraordinary General Meeting of shareholder's resolution No. 1/2013 dated January 28, 2013, that were expired, by maintaining the resolution of the Board of Directors resolution No. 1/2013 and Extraordinary General Meeting of shareholder's. The details of the ESOP Warrants are as follows: Name of Securities Employee Share Option Warrant of Kaset Thai International Sugar Corporation

Public Company Limited issued to management and employees of the Company (“ESOP Warrant”)

Type Identifiable and non-transferable Maturity 5 years from the issue and offering date of warrants Amount of ESOP Warrants Not exceeding 28,000,000 units Number of Common Shares reserved for ESOP Warrant

Not exceeding 28,000,000 unit (at par value of THB 1), which is equivalent to 0.7% of the Company's total shares post-offering and post-the issuance of ESOP warrants

Issue Date Date set by management subsequent to the Company conversion to Public Company Limited and the shareholder approval.

Offering Type The warrant shall be issued and allocated to management and employees of the Company and its subsidiaries. The allocation shall be done by appointed management under the term and conditions and allocation method approved by shareholders

Offering Price per Unit THB 0 (zero Baht) Exercise Rate Each holding of 1 unit of warrants is entitled to convert the warrant into 1

ordinary share, except in the case that the exercise right is amended under a condition of amendment as will be prescribed in the terms and conditions of the warrant

Exercise Price Equivalent to IPO price Offering period The Company will offer to sell the warrants within 1 year of the date

determined by our Annual General Meeting 2014 dated March 13, 2014, which approved us to issue and offer the warrants.

Exercise Period On the last day of each month, commencing from the first month falling 4 years and 6 months following the warrant issue date. In addition, the exercise right may be exercised on any of the final 5 business days prior to the expiry of the 5 year warrant period

Other Benefits in addition to Rights as Common Shareholders

None

Secondary Market of the Warrant The warrant will not be sold in the SET Secondary Market of Common Shares Converted from the Warrants

The common shares converted from the warrants will be eligible for sale and purchase in the SET

68

Corporate Restructuring prior to and after the IPO

Sumitomo Corporation and Nissin Sugar Co., Ltd. ("Investor A") has expressed its intention to invest in the Company through 3S Holding Co., Ltd. (“Joint Venture Company”). Investor A signed a Memorandum of Understanding (MOU) in relation to the investment of the Company with Mrs. Hathai Siriviriyakul, a major shareholder of the Company on 27 December 2012. On 16 September 2013, Investor A signed investment agreement in relation to the investment in the Company via 3S Holding Co., Ltd. with the investment value not exceeding THB 2,650.0 millions. The investor A are neither a related party nor an existing shareholder of the Company.

Transaction Steps

(1) Investor A and Mrs. Hathai Siriviriyakul together hold KTIS's shares via Joint Venture Company. 3S Holding Co., Ltd. will hold 25.0% of the Company total share post-offering and the issuance of warrant. Ultimately, Mrs. Hathai Siriviriyakul will hold 70.0% of the Company via Hathai Jaroon Ek Holding Co., Ltd., which hold by Mrs. Hathai Siriviriyakul at 100.0%. While investor A will hold 3S Holding Co., Ltd. at 30.0% (Sumitomo Corporation and Nissin Sugar Co., Ltd. will hold Joint Venture Company at 25%, and 5%, respectively.).

(2) Prior to listing in the SET, Mrs. Hathai Siriviriyakul transferred KTIS shares amount of 291,600,000 share

or 7.5% of the Company's total share post-offering to Joint Venture Company. It should be noted that the transferred shares are not part of the lock-up portion according to Bor. Jor. Ror. 01-03, Notification of the Board of Governors on the SET on "Prohibiting Management or Shareholders and Related Persons from Selling Shares and Securities within a Specified Period, 2001" or "Silent Period".

Moreover, Joint Venture Company expressed its intention not to dispose the Company's shares for at least a year.

(3) Mrs. Hathai Siriviriyakul will transferred KTIS shares amounting to 417,364,800 shares or 10.8% of the

Company's total share post-offering within 2 weeks after listing in the SET, to Joint Venture Company. It

69

should be noted that the shares to be transferred are not part of the lock-up portion as per Notification of the SET in relation to Silent Period.

(4) Subsequent to 6 month after listing in the SET, Mrs. Hathai Siriviriyakul will transfer KTIS shares

amounting to 263,035,200 shares, or 6.8% of the Company's total shares post-offering, to Joint Venture Company. It should be noted that these shares to be transferred are part of the locked-up shares, which can be transferred in accordance with the Notification of the SET in relation to Silent Period.

(5) After one year of being listing in the SET, Mrs. Hathai Siriviriyakul will transfer KTIS shares amount of

1,360,800,000 shares, or 35.0% of the Company's total shares post-offering, to Jaroon Hathai Ek Holding Co., Ltd. (100.0% held by Mrs. Hathai Siriviriyakul) It should be noted that these shares to be transferred are part of the locked-up shares, which can be transferred in accordance with the Notification of the SET in relation to Silent Period.

Statictics

70

Kaset Thai International Sugar Corporation Public Company Limited

For the Year Ended Sale and

services revenues

(THB million)

Net Profit (Loss)

To Owners of the

Company (THB

million)

Net Profit (Loss)

(THB/Share)*

Dividend

(THB/Share)* Book Value

(THB/Share)* Dividend

Payout ratio (%)

12-month ended 30 September 2011

13,433.6 179.0 0.09 0.161 1.17 177.78

3-month ended 31 December 2011

1,991.9 112.7 0.06 - 1.19 -


17,132.6 1,911.4 0.71 - 1.43


13,963.1 774.6 0.24 - 1.66 -

Remarks: * The computation is based on a par value of THB 1 1 On 30 January 2012, Annual General Meeting No. 1/2012, passes resolution on dividend payment for the year ended

30 September 2011 at THB 0.16 per share (calculated based on a par value of THB 1), which is equivalent to THB 310.0 millions. The dividend was paid on 13 February 2012

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries

For the Year Ended 31 December

Sale and services revenues (THB mm)

Net Profit (Loss)

To Owners of the

Company (THB mm)

Net Profit (Loss)

(THB/Share)*

Dividend

(THB/Share)* Book Value

(THB/Share)* Dividend

Payout ratio (%)

2011 (Pro-forma Financial

Statment)1

22,076.7 1,110.4 0.34 0.162 0.17 47.06

2012 24,630.7 1,702.0 0.63 - 0.563 - 2013 18,051.7 1,263.8 0.39 - 0.81 -

Remarks: * The computation is based on a par value of THB 1 1 As the Company restructured the Company Structure. The Company, prepared Pro-forma Financial Statement for

analysis and comparison purposes 2 On 30 January 2012, Annual General Meeting No. 1/2012, passes resolution on dividend payment for the year ended

30 September 2011 at THB 0.16 per share (calculated based on a par value of THB 1), which is equivalent to THB 310.0 millions. The dividend was paid on 13 February 2012

3 The computation is based on average paid-up capital as at 1 January 2012 and 31 December 2012

71

72

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries Statement of Financial Position

Remarks 1 Due to corporate restructuring prior to listing in the SET, the Company prepared Pro-forma Financial Statement for the year ended 31 December 2014 for analysis and comparison purposes 2 Percentage to total assets

For the Year Ended

31 Dec 2011 31 Dec 2012 31 Dec 2013 (Pro-forma Financial Statement)1 (Consolidated Financial Statement) ( Consolidated Financial Statement)

THB million %2 THB million %2 THB million %2

Current assets Cash and cash equivalent 392.8 2.5 1,157.3 7.3 416.3 2.6 Short-term investment 51.0 0.3 0.9 0.0 0.9 0.0 Receivable – net 1,038.5 6.5 818.2 5.1 720.3 4.5 Farmer receivable – net 348.3 2.2 1,073.1 6.7 580.5 3.6 Receivable from related party 303.9 1.9 655.7 4.1 379.9 2.3 Inventory 3,339.1 20.9 3,579.3 22.4 4,561.6 28.2 Short-term loans to others 79.3 0.5 161.5 1.0 - - Short-term loans to related parties 5.0 0.0 - - - - Other current assets 521.7 3.3 126.6 0.8 48.8 0.3 Total current assets 6,079.1 38.0 7,572.7 47.5 6,708.3 41.5 Non-current assets Investment in associate - cost method - - - - - - Deposit in financial institution 11.9 0.1 - - - - Investment 0.4 0.0 0.4 0.0 0.4 0.0 Long-term loans to related parties 2,668.6 16.7 - - - - Investment property - - - - 269.9 1.7 Property, plant, and equipment - net 6,986.8 43.7 7,573.3 47.5 8,800.0 54.4 Intangible asset - net 3.0 0.0 6.5 0.0 11.7 0.1 Deferred tax assets - - 184.2 1.2 174.3 1.1 Other non-current assets 238.4 1.5 618.7 3.9 204.5 1.3 Total non-current assets 9,909.2 62.0 8,383.1 52.5 9,460.8 58.5 Total assets 15,988.3 100.0 15,955.8 100.0 16,169.1 100.0

73

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries Statement of Financial Position (Cont')


(Pro-forma Financial Statement)1 (Consolidated Financial Statement) (Consolidated Financial Statement)

THB million %2 THB million %2 THB million %2 Liabilities Current liability Trust receipt payable 397.8 2.5 336.3 2.1 425.1 2.6 Trade payable and notes payable 2,407.9 15.1 3,779.5 23.7 2,973.9 18.4 Short-term borrowing from financial institution 633.3 4.0 789.7 4.9 1,044.1 6.5 Short-term borrowing from related parties 2,056.5 12.9 570.1 3.6 968.3 6.0 Current portion to a long-term borrowing from financial institution

645.7 4.0 1,130.9 7.1 1,257.0 7.8

Current portion to a long-term borrowing from related parties - - 3.0 0.0 4.9 0.0 Current portion to a long-term borrowing from others 14.2 0.1 21.67 0.1 50.2 0.3 Current portion of financial lease obligation 5.7 0.0 4.6 0.0 5.2 0.0 Other payables 255.1 1.6 424.8 2.7 439.8 2.7 Payables to related parties 18.6 0.1 23.8 0.1 56.2 0.3 Unearned revenue 15.5 0.1 2.4 0.0 94.0 0.6 Deferred tax liability 43.8 0.3 395.8 2.5 68.2 0.4 Future obligation to issue shares 2,082.3 13.0 2,082.3 13.1 2,082.3 12.9 Other current liabilities 265.2 1.7 300.7 1.9 102.5 0.6 Total current liabilities 8,841.7 55.3 9,865.6 61.8 9,571.6 59.2

Remarks 1 Due to corporate restructuring prior to listing in the SET, the Company prepared Pro-forma Financial Statement for the year ended 31 December 2014 for analysis and comparison purposes 2 Percentage to total liabilities and shareholders' equity

74

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries Statement of Financial Position (Cont')

Remarks 1 Due to corporate restructuring prior to listing in the SET, the Company prepared Pro-forma Financial Statement for the year ended 31 December 2014 for analysis and comparison purposes 2 Percentage to total liabilities and shareholders' equity

3 Adjusted par value to THB 1 for comparison purpose


(Pro-forma Financial Statement)1 (Consolidated Financial Statement) (Consolidated Financial Statement)

THB million %2 THB million %2 THB million %2 Non-current liabilities Long-term borrowing from financial institution 1,964.7 12.3 2,674.2 16.8 1,914.6 11.8 Long-term borrowing from related parties 2,008.5 12.6 106.0 0.7 92.2 0.6 Long-term borrowing from others 71.8 0.4 97.3 0.6 182.5 1.1 Financial lease obligation 812.3 5.1 823.2 5.2 818.0 5.1 Provision for employee benefit 148.0 0.9 232.6 1.5 260.5 1.6 Estimated liability from long-term demolition - - - - 9.6 0.1 Other non-current liabilities 1,572.6 9.8 692.1 4.3 657.4 4.1 Total non-current liabilities 6,577.9 41.1 4,622.4 29.0 3,934.7 24.3 Total liabilities 15,419.6 96.4 14,488.0 90.8 13,506.3 83.5 Shareholders' equity Share capital Paid-up capital Common shares 3,274,573,0003 share at par value of THB 1 3,274.6 20.5 3,274.6 20.5 3,274.6 20.3 Surplus from business combination under common control (3,738.7) (23.4) (3,577.2) (22.4) (3,577.2) (22.1) Retained earning Appropriated - Legal reserve - - 16.5 0.1 55.3 0.3 - Cumulative effect of the change - - - - - - Inappropriate 1,032.8 6.5 1,753.8 11.0 2,910.2 18.0 Total shareholders' equity 568.6 3.6 1,467.7 9.2 2,662.8 16.5 Total liabilities and shareholders' equity 15,988.2 100.0 15,955.7 100.0 16,169.1 100.0

75

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries Income Statement

3-month Period Ended For the Year Ended

31 Dec 2011 31 Dec 2011 31 Dec 2012 31 Dec 2013 (Pro-forma Financial Statement)1 (Pro-forma Financial Statement)1 (Consolidated Financial

Statement) (Consolidated Financial

Statement) THB million %2 THB million %2 THB million %2 THB million %2

Revenue from sale and services 3,609.3 100.0 22,076.7 100.0 24,630.7 100.0 18,051.7 100.0 Cost of sales and services (2,401.7) (66.5) (16,666.7) (75.5) (17,808.0) (72.3) (13,824.7) (76.6) Gross profit 1,207.5 33.5 5,410.0 24.5 6,822.7 27.7 4,227.0 23.4 Other revenue 98.4 2.7 642.9 2.9 526.6 2.1 786.9 4.4 Earning before expenses 1,305.9 36.2 6,052.9 27.4 7,349.3 29.8 5,013.9 27.8 Selling expenses (536.6) (14.9) (2,498.4) (11.3) (2,483.6) (10.1) (2,038.4) (11.3) General administrative expenses (250.2) (6.9) (1,761.3) (8.0) (1,093.9) (4.4) (1,054.5) (5.8) Total expenses (786.8) (21.8) (4,259.7) (19.3) (3,577.4) (14.5) (3,092.9) (17.1) Earning before interest and tax 519.1 14.4 1,793.2 8.1 3,771.9 15.3 1,921.0 10.6 Interest expense (120.6) (3.3) (524.8) (2.4) (395.1) (1.6) (439.1) (2.4) Earning before tax 398.5 11.0 1,268.3 5.7 3,376.8 13.7 1,481.9 8.2 Income tax (47.0) (1.3) (158.0) (0.7) (807.3) (3.3) (218.1) (1.2) Net profit 351.6 9.7 1,110.4 5.0 2,569.5 10.4 1,263.8 7.0 Owners of the parent 351.6 9.7 1,110.4 5.0 1,702.0 10.2 1,263.8 7.0 Minority interest - - - - 867.5 6.9 - -

Remarks 1 Due to corporate restructuring prior to listing in the SET, the Company prepared Pro-forma Financial Statement for the year ended 31 December 2014 for analysis and comparison purposes 2 Percentage to revenue from sale and services

76

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries Statement of Cash Flows

For the Year Ended 31 Dec 2012 31 Dec 2013

(Consolidated Financial Statement) (Consolidated Financial Statement)THB millions THB millions

Cash flow before changes in operating activities Gain (loss) before income tax for the period 3,376.8 1,481.9 Adjustments of profit before corporate income tax for the period to net cash provided by operating activities

- Gain from RPE (349.8) - - Depreciation and amortization 497.7 629.3 - Gain on discount from the transfer of rights (52.6) (141.3) - Gain on impairment loss on investment (3.5) - - Allowance for doubtful account 31.5 22.2 - Post-employment benefits expenses 62.4 (58.0) - Financial costs 395.1 439.1 - Interest income (140.4) (52.6) - Gain on disposal of investments (54.2) - - Loss from revaluation of investment - 6.5 - Unrealized (gain) loss on foreign currency exchange (37.9) 48.7 - Dividend income (27.1) - - Gain on sale of property, plant, and equipment (82.4) (2.5) Cash flow before changes in operating assets and liabilities 3,615.5 2,373.2

77

Kaset Thai International Sugar Corporation Public Company Limited and Its Subsidiaries Statement of Cash Flows (Cont')

Remarks 1 Including changes in assets and liabilities from trade receivables, receivable from related parties, and receivable from others 2 Including changes in assets and liabilities from trade payables, notes payables, payable from related parties, payable from others, unearned revenues, and trust receipt

For the Year Ended

31 Dec 2012 31 Dec 2012


Cash flow before changes in operating assets and liabilities (Cont') 3,615.5 2,373.2 Changes in operating assets and liabilities - Receivables (139.5)1 352.51 - Farmer receivables (683.6) 626.5 - Inventory (240.2) (982.2) - Other current assets 36.6 77.9 - Other non-current assets (68.8) 426.8 - Payables 1,436.92 (695.3)2 - Other current liabilities 133.6 (198.2) - Other non-current liabilities 0.8 (6.7) - Income tax (325.4) (518.6) - Financial cost (1,255.0) (433.9) Net cash flows used in operating activities 2,510.7 1,022.0

78


For the Year Ended 31 Dec 2012 31 Dec 2012


Cash flows from investing activities Interest income 551.5 41.7 Short-term loan 50.1 0.0 Cash paid to subsidiaries (3,478.9) - Short-term loan to others (82.2) 161.5 Long-term loan to related parties 5.0 - Cash paid for purchase of investment property - (276.5) Cash paid for purchase of property, plant, and equipment (1,609.7) (1,851.4) Cash paid for purchase of intangible assets (5.4) (3.2) Cash received from disposal of investment 1,147.4 - Cash received from disposal of property, plant, and equipment 350.4 8.3 Cash received from loan to related parties 2,534.3 - Cash received from dividend income 27.1 - Net cash flow from (used in) investing activities (510.3) (1,919.7)

79


ปีบญัชีสิ้นสดุวนัที่

31 ธ.ค. 55 31 ธ.ค. 56

(งบการเงินรวม) (งบการเงินรวม) ล้านบาท ล้านบาท

Cash flow from financing activities Cash received from short-term borrowing from financial institutions 132.8 294.3 Cash received from short-term borrowing from related parties (1,486.4) 398.2 Cash received from long-term borrowing from financial institutions 1,994.3 815.0 Cash received from long-term borrowing from related parties 12.0 - Cash received from long-term borrowing from others 43.8 136.4 Cash paid for financial lease (95.7) (4.6) Repayment of long-term borrowings from financial institution and others (813.8) (1,470.5) Repayment of long-term borrowings from related parties (1,911.5) (12.0) Cash received from share capital 1,274.6 - Dividend paid (995.4) - Net cash flows used in financial activities (1,845.3) 156.7 Decrease in cash and cash equivalent - net 155.2 (741.0) Beginning cash balance 1,002.2 1,157.3 Ending cash balance 1,157.3 416.3

80

Kaset Thai International Sugar Corporation Public Company Limited Statement of Financial Position

For the Year Ended

31 Dec 2011 31 Dec 2012 31 Dec 2013

THB million %1 THB million %1 THB million %1

Current assets Cash and cash equivalent 256.0 3.3 518.5 3.5 271.2 1.8 Receivable – net 545.6 7.1 731.0 5.0 354.4 2.3 Farmer receivable – net 65.7 0.9 872.2 5.9 340.1 2.2 Receivable from related party 301.3 3.9 572.9 3.9 370.4 2.4 Inventory 2,045.9 26.6 2,242.8 15.3 3,383.0 21.9 Short-term loans to related parties - - 886.0 6.0 1,565.0 10.1 Other current assets 224.9 2.9 64.6 0.4 12.5 0.1 Total current assets 3,439.4 44.7 5,887.9 40.1 6,296.6 40.8 Non-current assets Investment in subsidiaries - - 6,227.0 42.4 6,229.9 40.3 Deposit in financial institution 0.6 0.0 - - Investment 0.1 0.0 0.1 0.0 0.1 0.0 Long-term loans to related parties 2,622.7 34.1 - - - - Property, plant, and equipment - net 1,625.8 21.1 1,999.8 13.6 2,579.8 16.7 Intangible asset - net 1.5 0.0 2.5 0.0 2.5 0.0 Deferred tax assets - - 163.1 1.1 155.0 1.0 Other non-current assets 6.6 0.1 409.7 2.8 175.9 1.1 Total non-current assets 4,257.3 55.3 8,802.1 59.9 9,143.3 59.2 Total assets 7,696.7 100.0 14,690.0 100.0 15,439.9 100.0 Remark 1 Percentage of total assets

81

Kaset Thai International Sugar Corporation Public Company Limited Statement of Financial Position (Cont')

For the Year Ended

31 Dec 2011 31 Dec 2012 31 Dec 2013 THB million %1 THB million %1 THB million %1

Liabilities Current liability Trade payable and notes payable 1,904.9 24.8 3,149.6 21.5 2,600.6 16.9 Short-term borrowing from financial institution 192.5 2.5 315.0 2.1 650.4 4.2 Short-term borrowing from related parties 700.0 9.1 963.9 6.6 1,593.3 10.4 Current portion to a long-term borrowing from financial institution 452.4 5.9 452.4 3.1 652.5 4.2 Current portion to a long-term borrowing from others 2.9 0.0 10.5 0.1 10.7 0.1 Current portion of financial lease obligation - - 4.6 0.0 5.2 0.0 Other payables 143.2 1.9 252.4 1.7 262.9 1.7 Payables to related parties 5.6 0.1 17.9 0.1 20.3 0.1 Unearned revenue 0.2 0.0 0.2 0.0 84.8 0.6 Deferred tax liability 43.8 0.6 297.2 2.0 64.3 0.4 Future obligation to issue shares - - 2,082.3 14.2 2,082.3 13.5 Other current liabilities 128.0 1.7 246.6 1.7 44.5 0.3 Total current liabilities 3,573.5 46.4 7,792.5 53.1 8,071.7 52.5

Remark 1 Percentage of total liabilities and shareholders' equity

82

Kaset Thai International Sugar Corporation Public Company Limited Statement of Financial Position (Cont')

Remarks 1 As the Company restructured the Company Structure. The Company, prepared Pro-forma Financial Statement for the year ended 31 December 2014 for analysis and comparison purposes 2 Adjusted par value to THB 1 for comparison purpose


THB million %1 THB million %1 THB million %1 Non-current liabilities Long-term borrowing from financial institution 1,662.6 21.6 1,210.2 8.2 940.6 6.1 Long-term borrowing from related parties - - - - - - Long-term borrowing from others 15.7 0.2 48.0 0.3 37.5 0.2 Financial lease obligation - - 823.2 5.6 818.0 5.3 Provision for employee benefit 66.8 0.9 127.2 0.9 151.9 1.0 Estimated liability from long-term demolition - - - - - - Other non-current liabilities - - - - - - Total non-current liabilities 1,745.1 22.7 2,208.6 15.1 1,948.1 12.7 Total liabilities 5,318.6 69.1 10,001.1 68.2 10,019.8 65.1 Shareholders' equity Share capital Paid-up capital Common shares 3,274,573,0002 share at par value of THB 1 2,000.0 26.0 3,274.6 22.3 3,274.6 21.3 Surplus from business combination under common control - - (573.2) (3.9) (573.2) (3.7) Retained earning Appropriated - Legal reserve - - 16.5 0.1 55.3 0.4 - Cumulative effect of the change - - - - - - Inappropriate 378.0 4.9 1,971.1 13.4 2,663.5 17.3 Total shareholders' equity 2,378.0 30.9 4,688.9 31.9 5,420.1 35.1 Total liabilities and shareholders' equity 7,696.7 100.0 14,690.0 100.0 15,439.9 100.0

83

Kaset Thai International Sugar Corporation Public Company Limited Income Statement

Remarks 1 Percentage to revenue from sale and services

For the Year Ended 3-month Period Ended For the Year Ended

30 Sep 2011 31 Dec 2011 31 Dec 2012 31 Dec 2013

THB million %1 THB million %1 THB million %1 THB million %1 Revenue from sale and services 13,433.6 100.0 1,991.9 100.0 17,132.6 100.0 13,963.1 100.0 Cost of sales and services (11,636.4) (86.6) (1,416.4) (71.1) (13,100.3) (76.5) (11,356.8) (81.3) Gross profit 1,797.2 13.4 575.5 28.9 4,032.2 23.5 2,606.3 18.7 Other revenue 467.0 3.5 61.2 3.1 664.2 3.9 793.2 5.7 Earning before expenses 2,264.2 16.9 636.7 32.0 4,696.4 27.4 3,399.5 24.3 Selling expenses (1,364.1) (10.2) (331.7) (16.7) (1,517.1) (8.9) (1,493.2) (10.7) General administrative expenses (446.1) (3.3) (96.6) (4.8) (568.7) (3.3) (607.9) (4.4) Total expenses (1,810.2) (13.5) (428.3) (21.5) (2,085.7) (12.2) (2,101.2) (15.0) Earning before interest and tax 454.0 3.4 208.4 10.5 2,610.7 15.2 1,298.4 9.3 Interest expense (230.7) (1.7) (48.7) (2.4) (225.1) (1.3) (330.7) (2.4) Earning before tax 223.2 1.7 159.7 8.0 2,385.6 13.9 967.6 6.9 Income tax (44.2) (0.3) (47.0) (2.4) (474.2) (2.8) (193.0) (1.4) Net profit 179.0 1.3 112.7 5.7 1,911.4 11.2 774.6 5.5

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Kaset Thai International Sugar Corporation Public Company Limited Statement of Cash Flows

For the Year Ended 3-month Period Ended For the Year Ended 30 Sep 2011 31 Dec 2011 31 Dec 2012 31 Dec 2013 THB million THB million THB million THB million Cash flow before changes in operating activities Gain (loss) before income tax for the period 223.2 159.7 2,385.6 967.6 Adjustments of profit before corporate income tax for the period to net cash provided by operating activities

- Depreciation and amortization 107.0 33.9 177.7 247.0 - Gain from disposal of investment in associate companies (130.2) - - - - Gain on discount from the transfer of rights (25.1) (2.5) (52.6) (141.3) - Allowance for doubtful account 46.0 - 14.0 (5.2) - Post-employment benefits expenses - 1.6 53.9 (29.6) - Financial costs 230.7 48.7 225.1 330.7 - Interest income (156.5) (44.2) (127.8) (96.6) - Dividend income - - (377.5) - - Gain on sale of property, plant, and equipment (0.6) (0.3) (42.8) (0.2) Cash flow before changes in operating assets and liabilities 294.5 197.0 2,255.6 1,272.5

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Kaset Thai International Sugar Corporation Public Company Limited Statement of Cash Flows (Cont')

Remarks 1 Including changes in assets and liabilities from trade receivables, receivable from related parties, and receivable from others 2 Including changes in assets and liabilities from trade payables, notes payables, payable from related parties, payable from others, unearned revenues, and trust receipt


30 Sep 2011 31 Dec 2011 31 Dec 2012 31 Dec 2013

THB million THB million THB million THB million Cash flow before changes in operating assets and liabilities (Cont') 294.5 197.0 2,255.6 1,272.5 Changes in operating assets and liabilities - Receivables (392.6) 91.5 (513.4)1 615.21 - Farmer receivables 43.0 193.1 (767.9) 671.6 - Inventory (148.6) (1,093.4) (196.9) (1,140.2) - Other receivables 55.3 - - - - Other current assets (122.0) (65.8) (29.2) 52.0 - Other non-current assets 4.6 7.0 (131.3) 240.8 - Payables 418.0 787.1 1,328.12 (456.5)2

- Other current liabilities 8.9 82.0 144.0 (202.1) - Income tax (147.5) (3.2) (225.9) (407.0) - Financial cost (230.7) (48.7) (223.9) (328.2) Net cash flows used in operating activities (217.1) 146.6 1,639.3 318.1

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For the Year Ended 3-month Period Ended For the Year Ended 30 Sep 2011 31 Dec 2011 31 Dec 2012 31 Dec 2013 THB million THB million THB million THB million Cash flows from investing activities Cash received from disposal of investment in associate companies 159.0 - Interest income 7.8 11.6 507.0 60.5 Investment in subsidiaries - - (4,144.7) (3.0) Long-term loan to related parties - - (886.0) (679.0) Cash paid for purchase of property, plant, and equipment (409.1) (108.2) (927.6) (822.9) Cash paid for purchase of intangible assets (1.2) (0.2) (2.0) (1.5) Cash received from disposal of property, plant, and equipment 2.4 0.6 366.9 0.2 Cash received from loan to related parties - - 2,488.5 - Cash received from dividend income - - 377.5 - Net cash flow from (used in) investing activities (241.2) (96.2) (2,220.5) (1,445.6)

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Prepared by Kasikorn Securities Public Company Limited

(Parphan Siriviriyakul) (Natthapan Siriviriyakul) Director and Chief Executive Officer - KTIS Group) Director and Chief Executive Officer - Bio Energy and Product


30 Sep 2011 31 Dec 2011 31 Dec 2012 31 Dec 2013

THB million THB million THB million THB million Cash flow from financing activities Cash received from short-term borrowing from financial institutions 425.0 (232.5) 122.5 335.4 Cash received from short-term borrowing from related parties 101.3 598.7 263.9 629.5 Cash received from long-term borrowing from financial institutions 315.0 - - 700.0 Cash received from long-term borrowing from others 18.6 - 43.8 - Repayment of long-term borrowings from financial institution and others - - (95.7) (4.6) Repayment of long-term borrowings from related parties (375.0) (450.0) (455.3) (780.0) Cash received from share capital - - 1,274.6 - Dividend paid - - (310.0) - Net cash flows used in financial activities 843.7 880.3 Decrease in cash and cash equivalent - net 26.6 (33.4) 262.5 (247.2) Beginning cash balance 262.8 289.4 256.0 518.5 Ending cash balance 289.4 256.0 518.5 271.2

Documents

- Translation - Information Memorandum Kaset Thai ...ktis.listedcompany.com/newsroom/20140425-KITS-SET02-EN.pdf · - Translation - Information Memorandum Kaset Thai International