Important Note: This memorandam was prepared in Thai and …investor-th.taokaenoi.co.th/newsroom/021220150811030837E.pdf · Popcorn business : The Company manufactures and sells popcorn

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- Information Memorandum - Taokaenoi Food & Marketing Public Company Limited (TKN)

Important Note: This memorandam was prepared in Thai and this English version is a translation of the Thai memoradum. While every effort was made to ensure the accuracy of the translation, there could be some inconsistency between the Thai memorandum and the English translation. In any case, the Thai memorandum shall take precedence and be considered the official Information Memorandum over its English translation. Head Office 37 Bond Street, Bangphut Pakkret, Nonthaburi 11120 (Tel.) 02-984-0666 (Fax) 02-984-0118 Website www.taokaenoi.co.th Factory Location 12/1 Moo 4, Namai Ladlumkaew, Pathumthani 12140 (Tel.) 02-108-6888 (Fax) 02-108-8708 Listing Date As of 3rd December 2015 (Trading commencement on 3rd December 2015) Listing Securities Number of common shares: 1,380,000,000 shares; Par value per share: THB 0.25 The total value: THB 345,000,000 Capital As of 3rd December 2015 Registered Capital: Common Shares THB 345,000,000 Paid-up Capital: Common Shares THB 345,000,000 Secondary Market The Stock Exchange of Thailand (SET) Offering Price THB 4.00 per share Offering Date 25th – 27th November 2015 Objectives and plans for utilizing the capital increase

1. THB 560.00 million for expanding its production capacity of the factory in Rojana industrial park

2. THB 100.00 million for investing in machineries of new production line 3. THB 780.00 million for working capital Green Shoe Option -None-

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Type of Business and Nature of Operation

Product Description

Taokaenoi Food & Marketing Public Company Limited (“TKN” or the “Company”) manufactures and sells processed seaweed and other kind of snacks, such as popcorn. The Company is continuously developing its product and being recognized as a leading of processed seaweed manufacturer in Thailand. Over the period, the Company has put high priority on quality control throughout its manufacturing process, from carefully selecting raw materials at the well-known places to the utmost attention in every production stages. The Company also receives supports and advice on its operations from various trading partners. Moreover, TKN has strong determination to promote its brand “TaoKaeNoi” while continuously developing high quality product for both domestic and overseas market. All of these are key success factors of the Company in order to achieve the sustainability of business and the acceptance on the global standard. Products can be divided into 5 main categories.

1) Crispy seaweed

Crispy seaweeds are made from selected dried seaweeds from the source. Such seaweeds are deep fried at the right temperature until they are crisp. After that, such Japanese style crispy seaweeds are seasoned and packed. Their flavors include Classic flavor, Spicy flavor, Seafood flavor, Japanese sauce flavor, Pizza flavor, Wasabi flavor, Tom-Yum-Koong flavor, Spicy BBQ flavor, and such. The products are sold under various brands such as TaoKaeNoi, Big Sheet, Mini Bite, and Konomi.

2) Grilled seaweed

Grilled seaweeds are made from selected dried seaweeds from the source. Such seaweeds are seasoned and grilled at the right temperature until they are crisp and savory. After that, such Japanese style grilled seaweeds are seasoned and packed. Their flavors include Classic flavor, Spicy flavor, Grilled squid flavor, Spicy seafood flavor, Wasabi flavor, Kimchi flavor, Spicy BBQ flavor, and such. In addition, the new product line of grilled seaweeds includes the Japanese style roll grilled seaweed which is more convenient for consumers to eat. The products are sold under various brands such as Super Crisp, Big Roll, Big Bag, Konomi Giant Sheet, Konomi Roll Stick, and such.

3) Tempura seaweed

Tempura seaweeds are made from selected dried seaweeds from the source. Such seaweeds are batter-fried at the right temperature until they are crisp and golden brown. After that, such tempura seaweeds are seasoned and packed. Their flavors include Japanese style classic flavor, Japanese spicy flavor, Wasabi flavor, Batter-fried shrimp flavor, and such. The products are sold under various brands such as TaoKaeNoi Tempura, Konomi, Hi Tempura, and such.

4) Roasted seaweed

Roasted seaweeds are made from selected dried seaweeds from the source. Such seaweeds are sprinkled with sauce and seasoning, then roasted at the right temperature and packed. Their flavors include Japanese sauce flavor, Spicy flavor, Garlic flavor, and such. The products are sold under Extra Sheet brand.

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5) Other products

Apart from the seaweed snack which is the main business of the Company, the Group also produces other snack such as popcorn and buttered and sugared toast. In addition, the Group also expands into other businesses relevant to its main one to increase the efficiency in generating revenue, managing cost, and controlling the risk arising from depending on other companies. The other businesses currently generating revenue to the Group consist of:

Popcorn business : The Company manufactures and sells popcorn snack under “Tao Kae Pop” brand. There are currently 5 flavors: Caramel flavor, Caramel cheddar cheese flavor, Seaweed flavor, Cheese pop flavor, and White cheddar cheese with nori seaweed flavor. The main distribution channels are 7-elevens and other convenience stores.

Snack and souvenir shop business : The shops sell a variety of snacks manufactured by both the Company and other manufacturers to increase customer access. The shops are operated under Taokaenoi Restaurant & Franchise Co., Ltd. (“TKNRF”), which is a wholly owned subsidiary of the Company.

Buttered and sugared toast and corn snack business : The Group sells a variety of buttered and sugared toast and corn snack under “Want More” brand to both domestic and international market to expand the products outside seaweed area. It is operated under Want More Industry Co., Ltd. (“WMI”), which is a wholly owned subsidiary of the Company.

Revenue Structure

The revenue structure for the period of 2012 – 2014 and the nine month period ended 30th September 2015 can be summarized by product type as follows:

By Product Consolidated Financial Statements

2012 2013 2014 Jan – Sep 2015 THB million % THB million % THB million % THB million %

Crispy seaweed 1,743.02 69.84 1,868.99 68.82 1,759.18 65.28 1,492.37 59.25 Grilled seaweed 450.09 18.04 574.80 21.17 660.28 24.50 828.45 32.89 Tempura seaweed 91.13 3.65 105.75 3.89 81.25 3.01 64.27 2.55 Roasted seaweed 84.30 3.38 68.63 2.52 46.66 1.73 31.61 1.26 Other products under brand “TaoKaeNoi”1

27.12 1.09 23.03 0.85 88.90 3.30 64.23 2.55

Other products2 99.93 4.00 74.70 2.75 58.70 2.18 37.66 1.50 Total 2,495.59 100.00 2,715.63 100.00 2,694.96 100.00 2,518.58 100.00 Other income 31.733 4.97 22.344 4.74 Gain on foreign exchange 15.10 - 9.00 1.43

Total Revenue 2,542.42 2,720.60 2,726.30 2,524.75 Note: 1. Other products under brand “TaoKaeNoi” are “Tao Kae Pop”, “Want More”, and such. 2. Other products are snacks and souvenirs sold at TKN Land, such as dried fruit.

3. The key components of the THB 31.73 million other income are flood insurance claim of THB 16.72 million and export tax compensation of THB 11.06 million.

4. The key component of the THB 22.34 million is BOI tax refund of THB 13.36 million.

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- Revenue Structure by Geographic Region

The revenue structure by geographic region for the period of 2012 – 2014 and the nine month period ended 30th September 2015 can be summarized as follows:

Country Consolidated Financial Statements

2012 2013 2014 Jan – Sep 2015 THB million % THB million % THB million % THB million %

Thailand 1,705.80 68.35 1,664.78 61.30 1,534.76 56.95 1,236.51 49.10 People’s Republic of China 26.62 1.07 94.78 3.49 311.86 11.57 548.81 21.79 Malaysia 101.15 4.05 131.84 4.86 179.96 6.68 96.76 3.84 Indonesia 172.66 6.92 298.49 10.99 154.51 5.73 193.33 7.68 Hong Kong 89.25 3.58 101.79 3.75 109.49 4.06 74.27 2.95 Singapore 89.25 3.58 94.39 3.48 103.14 3.83 62.18 2.47 Taiwan 143.48 5.75 85.67 3.15 79.62 2.95 46.39 1.84 Others1 167.37 6.71 243.88 8.98 221.61 8.22 260.34 10.34

Total Revenue 2,495.59 100.00 2,715.63 100.00 2,694.96 100.00 2,518.58 100.00 Note: 1. The United States of America, Vietnam, Macau, Australia, Cambodia, Netherland, Myanmar, Laos, and such Target Customers

Target customers of the Company are from both markets in Thailand and other countries, such as People’s Republic of China, Malaysia, Indonesia, Hong Kong, Singapore, Taiwan, the United States of America, Vietnam, Macau, and Australia. Below table illustrates demographics of the target customers of each product category by the Company:

Type of Product Age Area Average Income (THB)

Occupation

Crispy seaweed

TaoKaeNoi 5 - 40

Bangkok, Provincial cities, and Overseas markets (Asia, Europe, and the

United States of America)

0 - 50,000 Student, College student, and Working age population

Big Sheet 5 - 40


United States of America)


Konomi 5 - 40

Overseas markets (Asia) 0 - 50,000 Student, College student, and Working age population

Tempura seaweed

TaoKaeNoi Tempura 5 - 40


0 - 50,000 Student, College student, and Working age

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Type of Product Age Area Average Income (THB)

Occupation

United States of America) population Roasted seaweed

Extra Sheet 5 - 50

Bangkok, Provincial cities, and Overseas markets

(Asia)


Korean Style 15 - 35 Overseas markets (Asia) 10,000 - 50,000

College student and Working age population

Grilled seaweed

Super Crisp 15 - 35


(Asia, Europe)

15,000 - 25,000

Student, College student, and Working age population

Big Roll 5 - 40


(Asia)


Big Bag 5 - 40 Bangkok, Provincial cities, and Overseas markets

(Asia)


Konomi Roll Stick 5 - 40 Overseas markets (Asia) 0 - 50,000 Student, College student, and Working age population

Distribution Channels

Domestic Market

The Company sells its products through 4 channels, which are Modern Trade, Distributor, Traditional Trade, and TaoKaeNoi Land store (“TKN Land”). The Company generally makes sales agreements with the resellers on annual basis stating quantity, sales price, delivery method, place of delivery, and conditions of payment as agreed. All sales are outright. Followings are details of each distribution channel in the domestic market.

1) Modern Trade

Modern trade generally is medium and big sized stores organizing goods orderly and offering convenient services to attract customers. Each store requires large initial investment and complicated operations. The Company sells its products mainly through this channel for customers in all regions of the country because modern trade stores have many branches and specialize in the product management. There are 2 types of modern trade:

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Convenience Store and Specialty Store: This type of modern trade mainly focuses on convenient access through a large number of branches. Usually it opens 24 hours a day. Convenience stores that sell the Company’s products are 7-Eleven, Family Mart, Jiffy, and Amway.

Supermarket and Hypermarket: This type of modern trade offers various consumer products including all kinds of cooking ingredients. Supermarkets and hypermarkets that sell the Company’s products are Tops, Tesco Lotus, BigC, Foodland, Villa Market, and Home Fresh Mart.

2) Local Distributor

Because some customers, such as Makro, demands the Company to deliver products to various store locations, it would not be cost effective for the Company to do the delivery when the volume is low. As a result, the Company entered into an agreement with local distributors to distribute the Company’s products. The agreement clearly specifies order quantity and time of delivery as agreed between both parties. At present, local distributors mainly deliver the Company’s products to Makro, and additionally to traditional trade stores, some convenience stores, and special channels: for example, Watson, Major Cineplex, SF Cinema, and such.

3) Traditional Trade

Traditional trade stores locate in various places of the country. Its main characteristics are small amount of investment to set up, few technological requirement, and simple shelf layout. It targets customer living nearby. The Company sells its products to traditional trade stores through local distributor, wholesaler, and agent channels which are responsible to deliver products to traditional trade stores.

4) Taokaenoi Land

Taokaenoi Land shop is a retail store selling snacks and souvenirs of the Company and other manufacturers. It is operated by TKNRF, the wholly owned subsidiary.

Overseas Market

At present, the Company is selling products to 35 countries in total. Using distribution network of experts in each market helps the Company expanding customer base and awareness of products in the International markets. All products are sold outright. There are 3 main distribution channels: Distributor, Importer and Exporter.

1) Distributor

Distributor acts as a middle man by buying products for sell. It is also responsible for storage, transportation, and return product. Since the Company does not have expertise in distribution network in overseas market, the Company enters into an agreement with the Distributor to distribute products in that country and nearby countries. On the agreement, it clearly specifies quantity and delivery time. The sales of Company’s products in overseas markets are mainly through Distributor. As of 30th September 2015, there were 13 distributors in total in are in Malaysia, Indonesia, Hong Kong, Singapore, Taiwan, and such.

2) Importer

Importer buys several kinds of product in other countries in order to resell them in its own country. These importers do not have any long-term purchasing contracts with the Company. As the Company regards importers as

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another channel to distribute products and gain customers in overseas markets, it builds up good relationship with each importer. Currently, the Company’s important importers are in China.

3) Exporter

Exporter generally buys products from local manufacturers and exports them to foreign countries. Like Importers, exporters do not have long-term purchasing contracts with the Company.

Sources of Supplies

1) Seaweed

Seaweed is a main ingredient of the Company’s products. When selected few foreign suppliers provide quotation, the Company reviews and enters into a purchasing contract on annual basis. Terms of contract consist of the quality of seaweed, price, and total quantity that the Company is going to buy. The Company issues purchasing order (PO) stating quantity to be delivered each time. Before delivering the whole quantity, the supplier is required to send sample to the Company in order to check the quality according to the Company’s standard. If the sample passes quality check, the supplier will deliver the whole order based on PO. The normal Credit Term is 45 to 60 days. Currently, the Company basically orders seaweed from suppliers in the Republic of Korea.

2) Palm Oil

Firstly, suppliers have to send sample to Quality Assurance department (QA) for quality checking. Once the sample passes quality check, only the selected suppliers send price quotation to the Company for review. Afterward, the Company chooses a supplier and enters into a purchasing contract stating price and quantity. The purchasing contract is periodically made in advance based on market condition. The order is made to the supplier by PO document. Currently, the Company has a purchasing agreement with only one major palm oil supplier as it offers reasonable price and good product quality. The supplier gives the Company 30 days Credit Term. Moreover, to reduce the risk of market price fluctuation during the year, the Company enters into a purchasing contract in advance at reasonable price range. The length of contract is 3 – 6 months depending on market condition.

3) Seasoning

The procurement starts at the “New product” process in which Research and Development (R&D) department coordinates with the seller to develop seasoning based on specification and price required by the Company. The purchasing transaction is based on demand in each month, and supplier has to confirm price validity for the period. The Company selectively chooses supplier based on its quality of the seasoning as a primary factor and price as a secondary factor. If the seasoning is a secret recipe, the Company will order from NCP Trading & Supply Co., Ltd. (“NCP”), the wholly owned subsidiary whose main business is manufacturing seasoning for the Company. For each purchase, the Company has to issue PO document in accordance with Lead Time condition agreed with the supplier. The regular Lead Time period is around 15 to 45 days.

4) Packaging

Suppliers have to send sample to Quality Assurance department (QA) for quality checking. Once the sample passes quality check, only the selected suppliers send price quotation to the Company to review. After the supplier is selected, supplier has to confirm price validity for the period. The purchasing transaction is determined from

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demand in each month. At present, the Company order packaging, such as snack pack, film, box, and crate from various suppliers in order to reduce risk from delay on delivery process. The Company has to issue PO document in accordance with Lead Time condition agreed with the supplier. The regular Lead Time period is around 15 to 45 days. Supplier generally gives the Company 30 to 60 days Credit Term.

5) Other raw materials

Suppliers have to send sample to Quality Assurance department (QA) for quality checking. Once the sample passes quality check, only the selected suppliers send price quotation to the Company to review. After the supplier is selected, supplier has to confirm price validity for the period. The purchasing transaction is determined from demand in each month.

6) Product Transportation

The Company employs Outsourcing Logistic Service to transport finished goods to ensure completeness and correctness of the transportation process. The Company has following criteria on the procurement process of hiring Outsourcing Logistic Service:

1. Outsourcing Logistic Service selection procedure: the Company has an annual tender process. The Outsourcing Logistic Service will be selected based on transportation cost, number and type of serviced trucks in the Fleet, serviced area, freight insurance, service quality, and Service mind. In order to manage risk of the transportation process, the Company normally hires 3 – 4 Outsourcing Logistic Service that pass above criteria.

2. Transport contract consists of the contract itself 2 sets (original and duplicate) and attachments (including price quotation) (original and duplicate)

In general, the Company prepares the contract and attachments and sends them to the outsourced party to be signed. The Company’s authorized persons will countersigned those when it get them back from the outsourced party. Once the contract is signed by both parties, the outsource starts providing transportation service for the Company. The transportation management process of the Company takes in to account risk management and legal compliance to ensure that the whole transportation process of finished goods is complete, correct, and timely.

Market Competition

In recent years, many companies with various capital bases and distribution channels have entered into the seaweed snack market. The following companies are considered main competitors of the Company:

1. Singha Corporation Co., Ltd. sells processed seaweed product under brand “MASITA” with market share of 14%*

2. Capital Trading Co., Ltd. sells processed seaweed product under brand “SELECO” with market share of 7%*

3. Triple-M Co., Ltd. sells processed seaweed product under brand “TAWANDANG” with market share of 4%*

4. European Snack Food Co., Ltd. sells processed seaweed product under brand “TEELEK” with market share of 1%*

5. Oishi Group Public Company Limited sells processed seaweed product under brand “ONORI” with market share less than 1%*

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The Company has the highest market share in the seaweed snack market. It has highest market share in every main distribution channel: Supermarket/Hypermarket, Convenience Store, and Traditional Trade Store. Although in the last 3 years the Company’s sales amount was not directly affected by new competitors such as MASITA and ONORI, the Company’s market share suffered a decrease due to these new entrances. As a result, the Company has developed business strategy to increase its market share and the whole value of seaweed snack market. Environmental Effects (if any) - None - Summary of Material Contracts

1. Dried seaweed purchase contract

Parties to the Contract Seller : Overseas manufacturer of dried seaweed Buyer : The Company

Contract Detail Seller agrees to sell and buyer agrees to buy Korea dried sea weed at the size, weight, quantity and price as agreed upon.

Seller will deliver goods to buyer on monthly basis and buyer will submit the delivery plan in terms of time to deliver and quantity to buyer on the beginning of each month.

Seller will submit the testimonial of goods to buyer every time to let buyer scrutinize and confirm the delivery of such transaction.

Buyer will have to conduct the product acceptance test within proper time period.

In case of finding the non-complied goods within 60 days after delivery, buyer will have to negotiate with seller on that particular delivery on issues such as request for discount or reimbursement.

Period From the date of contract signing until the completion of delivery and payment

2. Domestic selling contract

Parties to the Contract Seller : the Company Buyer : Local distributors

Contract Detail Seller agrees to sell and distribute products to buyer in order to sell domestically.

Buyer agrees to buy goods solely from the seller in order to resell them to the Thailand consumer market and not to sell products abroad or sell to someone in Thailand, whom is known to resell the products abroad.

Both parties have mutually right to add or cancel some products based on the list specified in the contract.

Buyer has duty to be an agent to resell other products that the

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seller requires to sell domestically under the condition that such product is in the existing product line of seller.

Buyer is responsible to hold promotion, display products, determine selling area, store products, and include submit sales report and information as requested by the seller.

Seller is responsible for cost associated with advertising and promotion and all cost relates to marketing and product development.

Term of Contract 1 year and can be automatically extended another year until any party has an intention to leave the contract by 6 month notice in advance before the contract maturity date.

Termination of Contract One of the parties is insolvent or filed bankrupt, discontinue or liquidate or breach the contract or unable to adhere to the contract and do not take corrective actions within 30 days after receiving of notice from another party. Another party then has right to cancel the contract immediately.

Both parties agree in written form to terminate the contract. Pricing and Payment Price of products on the invoice sent to the buyer is quoted based

on the price of the effective month that products are withdrawn for selling.

Seller has to notify if any change of price to the buyer in written by 2-month notice in advance.

Buyer has to make payment to the seller within 60 days since the last day in the week as appeared on the invoice.

3. Overseas selling contract

Parties to the Contract Seller : the Company Buyer : Overseas distributors

Contract Detail Buyer has the exclusive right to resell and market products of the seller in the country as specified in the contract.

Buyer has to sell seller’s products in each year at minimum quantity as specified in the contract, which will be increased every year.

Buyer cannot be an agent to sell other products with the same characteristics as the seller’s and must not participate or provide selling advice on any products that is similar to seller’s products.

Seller must not distribute products to the country specified in the contract intentionally. The seller must prevent and take action on such case by the best effort.

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Any significant marketing and advertising campaign must be approved by the seller in written, and the seller is responsible for the cost associated with such activities as permitted by the seller.

Seller will support the marketing and advertising cost to the buyer as well as a portion of any fee arising from importing products and distribution to retail stores as specified in the contract.

Term of Contract 3 years and will be automatically extended another year if there is no request from any parties to terminate the contract in written within 90-day notice in advance. In case of the termination of contract is due to the buyer, the buyer has to be responsible for financial damage, calculated based on profit from the sales in previous year.

Termination of Contract One of the parties is insolvent or filed bankrupt, discontinue or liquidate or breach the contract or unable to adhere to the contract.

In case of one of the parties is unable to adhere to the contract longer than 30 days because of legal issues, the contract will be terminated after the 30 day period automatically.

Pricing and Payment Price of products selling to the buyer will be fixed within 6 months after signing the contract. In case of increasing production cost, the seller will have to notify the buyer in written 3 months in advance.

Buyer has to make payment to seller in full amount for each purchase as evident by invoice with the payment channel as specified before the goods will be shipped to the buyer.

In case of the full compliance of contract by buyer, the seller may consider to grant the credit term.

4. Land lease contract

Parties to the Contract Tenor : The Company Landlord : Several persons

Location Nopphawong office, No 12/1 Moo 4 NaMai, Ladlumkaew, Pathumthani Contract detail Landlord agrees to lease the land to the tenor for business use.

The tenor must not make another lease to others or transfer or sell the lease agreement and not do land improvement for further sell or incur the damage to premise.

Tenor will be responsible for utilities bills and related tax.

Landlord cannot claim from the tenor for any damages upon removing the building, which is not the main structure of the landlord.

If the landlord intends to sell the premise, the land lord must give the right to the tenor to be first person to buy at the price

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announced within 15 days after announcement. If the tenor waive or the time lapse, land lord can make an offer to other persons.

Contract Length 3 - 8 years remaining approximately Termination of Contract If the tenor is willing to cancel the contract before the ending date as

specified in the contract or the tenor breach the contract, all the financial guarantee will be confiscated immediately without any notice from the landlord who will notify to the tenor later by written.

Pricing and Payment Rental payment has to be made in advance on monthly basis Extension of Contract If the tenor wants to extend the rental period, the tenor has to notify in

written to the landlord at least 3 months before the maturity date. Furthermore, the land plot that building 1, building 3, and building 4 are located, the landlord agrees with the tenor to renew the contract for 3 years at a time. The extension of rental period will not exceed 9 - 12 years.

Other Conditions The tenor agrees to not alter or add or demolish any structures in the land without any approval from the landlord, except such action is for the purpose as indicated on the contract. However, if that additional structure both approval and non-approval by the tenor cannot be removed from the land, the ownership of that additional structure will belong to the landlord.

5. Document storage lease contract

Parties to the Contract Lessee : The Company Lessor : Mr. Itthipat Peeradechapan, Miss Orrapat Peeradechapan,

and Mr. Nutchatpong Peeradechapan Contract Detail If there is any outstanding lease payment not paid to the lessor, the

lessee agrees to compensate the outstanding amount with additional interest rate at 15% together with damages and related expenses.

Pricing and Payment Monthly lease fee is at THB 10,000 paid to each individual lessor, so the total monthly payment is THB 30,000 due 10th of each month.

Contract Length 3 years (from 1st April 2015 to 31st March 2018) Termination of Contract If any parties wants to terminate the contract before the maturity, that

party has to inform in written to another party in advance at least 30 days.

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6. TaoKaeNoi Land Space Lease Agreement

Parties to the Contract Lessee : TKNRF Lessor : Department store, Supermarket, Hypermarket and other

commercial space owner Contract Detail Both Lessor and lessee agree to lease the space for selling snacks

according to the agreement.

Lessee has to pay property tax, stamp duty, and related tax on the lease agreement and other related agreement that any government agencies will collect throughout the agreement period.

Lessor is the assured party of an insurance against loss and fire including an insurance against loss from a store decoration. The lessor specifies insurance claim amount and is an only sole beneficiary. The lessee has to pay an insurance premium based on the rental space.

Lessee has to open and close the store according to an instruction of lessor. If the lessee delay open the store, early close the store, or not open the store without sufficient reason, the lessor has right to charge penalty on daily basis.

If it is necessary, the lessor has right to install any equipment, to repair and maintenance, or to decorate the leased space. The lessor may close the leased space but with the least consequence to the lessee. The lessor is not responsible to any inconvenience of the lessee based on these actions as mentioned.

Contract Length 3 years. Lessor and lessee may agree to renew the agreement if the lessee informs the lessor in written in advance within the given time before ending of the agreement. Conditions in the new agreement have to be agreed by both parties. The new agreement together with a security deposit has to be completed prior to the end of the current lease agreement.

Termination of Contract Lessee takes action that breaks the agreement or service agreement and utilities agreement which are parts of the agreement or the leased space is confiscated or seized by the court or the lessee is bankrupt based on the final judgment of the court.

In case the lessee is default in rental payment but the lessor does not terminate the agreement, the lessee has to pay additional interest at 15% of the outstanding amount since the default date until all payments are made fully.

After the agreement is ended, the lessee has to move out and return the leased space back in good condition. The lessor may

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request to remove store decorations or any things attached to the space as proper. If the lessor cannot return to possess the leased space, the lessee has to compensate back to the lessor on daily basis.

In case of fire or loss event causes damage to the leased space and the lessor finds that the lessee cannot operate at that space, the lessor has no right to ask for compensation from the lessee.

If the leased space is expropriated by a government agency, the lessee has no right to ask for compensation from the lessor.

At the end of management contract or utilities agreement Pricing and Payment Monthly rental payment is made in advance. The rate increases

annually. Feasibility Study (if any) -None- Technical and Management Assistance -None- Future Projects

The Company has 2 future projects which are a new plant at Rojana industrial park and an expansion of the current plant at Nopphawong. Details of each project are as follows:

1. A new plant at Rojana industrial park

Board of Director Meeting No. 13/2013 as of 16 December 2013 approved to purchase land for constructing a new plant at Rojana industrial park, Sam Bandit, Uthai District, Ayuttha. The purpose of this project is to expand capacity for the business growth in 3 to 5 years and to increase efficiency of the manufacturing process. The total land area is 18 rai.

The total investment value of the whole project is THB 578.25 million with a maximum manufacturing capacity of 3,600 tons per year. The Company set up the project team in November 2014, started piling in February 2015, announced on the contractor bidding process in March 2015, and started the construction process in April 2015. The construction of new plant is expected to complete within 13 months, and will start manufacturing process in 2016 which is in line with the Company’s sales estimation. The project risks are concerned with the possible delay of construction process and machine installation, source of fund for investment and working capital, and employee risk regarding skills development.

2. Expansion project of the current manufacturing plant at Nopphawong

The machinery maintenance and manufacturing capacity expansion at Noppawong plant project was approved by the Board of Director in the annual budget meeting of 2015 held on 20th December 2014. This is the regular procedure of the Company that requires the Chief Executive Officer or authorized persons to approve every transaction related to purchasing new machines and area improvement. The purpose of this project is to increase manufacturing efficiency as the maintenance cost is high for manufacturing machines already in use for a long period.

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The increasing demand of the Company’s products is also pressing. Once the machines are upgraded, their efficiency will be increased from 90 BPM (Bag per Minute) to 120 BPM (Bag per Minute). The project started in February 2015 with total investment value of THB 2.1 million. The Company expects all machines to be upgraded completely within the 4th quarter of 2015. Once the whole project is finished, the Company expects a 0.6% decrease in manufacturing labor cost.

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Related Transaction

The persons who may have conflicts of interest with the Company during the fiscal year 2014 ending 31st December 2014 and the nine-month period, ended 30th September 2015 are as follows:

1. Persons who may have conflicts of interest

Persons who may have conflicts Relationship Mr. Itthipat Peeradechapan (“Mr. Itthipat”)

Director, CEO, Major shareholder holding 45.29% of the Company, and Major shareholder holding 70.00% of Peeradechanpan Holding Co., Ltd. which holds 35.29% shares of the Company as of 30th September 2015.

Miss Orrapat Peeradechapan (“Miss Orrapat”)

Director, Managing Director, shareholder of the Company holding 9.71%, and shareholder holding 15.00% of Peeradechanpan Holding Co., Ltd. which holds 35.29% shares of the Company as of 30th September 2015.

Mr. Nutchatpong Peeradechapan (“Mr. Nutchatpong”)

Director, Managing Director, shareholder of the Company holding 9.71%, and shareholder holding 15.00% of Peeradechanpan Holding Co., Ltd. which holds 35.29% shares of the Company as of 30th September 2015.

24 Projects Co., Ltd. (“24”) operating real estate

Mr. Itthipat, Miss Orrapat, and Mr. Nutchatpong are common shareholders and directors. As of 30th September 2015, 70% shares of 24 were held by Mr. Itthipat, 20% by Miss Orrapat, and 10% by Mr. Nutchatpong.

Dr. Tobi Co., Ltd. (“Dr. Tobi”) operating beverage

Mr. Itthipat, Miss Orrapat, and Mr. Nutchatpong are common shareholders and directors. As of 30th September 2015, 70% shares of Dr. Tobi were held by Mr. Itthipat, 20% by Miss Orrapat, and 10% by Mr. Nutchatpong.

Gen C Inspire Corporation Co., Ltd. (“Gen C”) operating game online

Mr. Nutchatpong is a common director, and Mr. Itthipat and Mr. Nutchatpong are common shareholders. As of 30th September 2015, 5% shares of Gen C were held by Mr. Itthipat and 60% by Mr. Nutchatpong.

17

2. Related-Party Transactions

2.1. Sales and Rendering of Services Transactions

Seller / Service Provider

Buyer / Service

Recipient

Type of Transaction / Terms and Conditions

Transaction Value (THB million)

Necessity and Reasonableness of Transactions 2014 Jan - Sep

2015

Dr. Tobi Company The Company purchased beverage products from Dr. Tobi to distribute to staff as benefit on the hot weather days in the 2nd and 3rd quarters of 2015.

- Purchase of goods

-

0.32

Necessity of Transaction

The Company purchased beverage products from Dr. Tobi to distribute to staff in production lines as benefit on the hot weather days in the 2nd and 3rd quarters of 2015.

Reasonableness of Transaction

Transactions are done at the price comparable to what charged to other non-related customers of Dr. Tobi.

Opinion of Audit Committee

The Audit Committee reviewed and approved the appropriateness of business terms of the transaction and the reasonableness of price. The Audit Committee emphasized that in the future this kind of transaction has to be done under general business terms and on the arm’s length basis.

Dr. Tobi TKNRF TKNRF purchased beverage products from Dr. Tobi for reselling at its retail stores. The transactions were made at prices comparable with other customers with the same purchasing quantity.


TKNRF purchased beverage products from Dr. Tobi for reselling at its retail stores.


18


Buyer / Service

Recipient




2015

- Purchase of goods

- Trade payable

- Trade receivable

0.36

0.04

-

0.01

-

0.00

Transactions are done at the price comparable to what charged to other non-related customers of Dr. Tobi.



Company Dr. Tobi Dr. Tobi purchased TaoKaeNoi seaweed snack products from the Company for promotion campaign. The transactions were made at prices comparable with other customers with the same purchasing quantity.


Dr. Tobi purchased TaoKaeNoi seaweed snack products from the Company for promotion campaign.


Transactions are done at the price comparable to what charged to other non-related customers of the Company.



- Purchase of goods -

0.07

19


Buyer / Service

Recipient




2015

TKNRF Dr. Tobi TKNRF charged initial fee and promotion fee from Dr. Tobi according to the general business term of snack store.


TKNRF charged initial fee and promotion fee from Dr. Tobi according to the general business term of snack store.

- Sales promotion expenses

- Other receivable

0.03

0.02

0.02

0.01


Initial fees and promotion fees are computed under general business terms applied to other non-related product owners.



Mr. Itthipat

Company On 1st April 2015, the Company purchased trademarks used for its business operation from Mr. Itthipat, the owner of trademarks, at the price of THB 1.00 million in total. The transaction price was below the appraised value of trademarks estimated by Year Appraisal Co., Ltd. for public purpose in report no. 0447/2558 dated 9th February 2015. The valuation was assessed by Dr. Chong Chongyosying

- 1.00 Necessity of Transaction

These trademarks are necessary for the Company’s business operation.


As the purchasing price is below the appraised value of the trademarks, the Company does not suffer any loss from the transaction.


The Audit Committee reviewed and approved the appropriateness of business terms of the transaction and the reasonableness of price.

20


Buyer / Service

Recipient




2015 (Qualified Senior Value Vor.tor. 059)

If the ownership of any trademark as registered with the Department of Intellectual Property (“DIP”) or the right of any trademark registration requests was not able to be transferred from Mr. Itthipat to the Company, Mr. Itthipat agreed that the Company may continue to use these trademarks with no further payment aside from the aforementioned amount of THB 1.00 million and the Company and Mr. Itthipat shall later enter into an agreement for that effect.

21

2.2. Building Rental Transactions

Lessor Lessee Type of Transaction / Terms and Conditions


Necessity and Reasonableness of Transactions 2014 Jan – Sep

2015

Mr. Itthipat Company The Company entered into a building rental agreement with Mr. Itthipat for a 3-story building on a 118.4 square meter land plot with usable area of 355.2 square meters. The location is no. 93/7 Rattanathibet Road, Bang Rak Noi, Amphoe Mueang Nonthaburi, Nonthaburi. Monthly rental fee is THB 15,000. The purpose of this rental is for document and promotional equipment storage. Later, the Company terminated the former agreement and entered into new 3-year rental agreement with monthly rental fee of THB 10,000 effective from 1st April 2015 to 31st March 2018. If either party wants to terminate the agreement earlier, the written notice has to be delivered to the other party not less than 30 days in advance.

- Rental expenses

0.18

0.11


The Company rented the building from Mr. Itthipat for document and promotional equipment storage because as there is no space available at the head office and the factory.


The revised monthly rental fee of THB 10,000 is comparable to the rental rate in the nearby area. The rent of THB 28.15 per square meter per month is quite lower than the nearby rental rate ranging from THB 34 per square meter per month to THB 62 per square meter per month.


The Audit Committee reviewed and approved the appropriateness of business terms of the transaction and the reasonableness of revised rental fee as it is comparable to the rental rate in the nearby area.

Miss Orrapat Company The Company entered into a building rental agreement with Miss Orrapat for a 3-story building on a 118.4 square meter land plot with usable area of 355.2 square meters. The location is no. 93/6 Rattanathibet Road, Bang Rak Noi,


The Company rented the building from Miss Orrapat for document and promotional equipment storage as there is no space available

22




2015 Amphoe Mueang Nonthaburi, Nonthaburi. Monthly rental fee is THB 15,000. The purpose of this rental is for document and promotional equipment storage. Later, the Company terminated the former agreement and entered into new 3-year rental agreement with monthly rental fee of THB 10,000 effective from 1st April 2015 to 31st March 2018. If either party wants to terminate the agreement earlier, the written notice has to be delivered to the other party not less than 30 days in advance.

- Rental expenses

0.18

0.11

at the head office and the factory.


The revised monthly rental fee of THB 10,000 is comparable to the rental rate in the nearby area. The rent of THB 28.15 per square meter per month is quite lower than the nearby rental rate ranging from THB 34 per square meter per month to THB 62 per square meter per month.



Mr. Nutchatpong

Company The Company entered into a building rental agreement with Mr. Nutchatpong for a 3-story building on a 118.4 square meter land plot with usable area of 355.2 square meters. The location is no. 93/5 Rattanathibet Road, Bang Rak Noi, Amphoe Mueang Nonthaburi, Nonthaburi. Monthly rental fee is THB 15,000. The purpose of this rental is for document and promotional equipment storage. Later, the Company terminated the former agreement and entered into new 3-year rental agreement with monthly rental fee of THB


The Company rented the building from Mr. Nutchatpong for document and promotional equipment storage as there is no space available at the head office and the factory.


The revised monthly rental fee of THB 10,000 is comparable to the market rental rate in the nearby area. The rent of THB 28.15 per square meter per month is quite lower than the nearby rental

23




2015 10,000 effective from 1st April 2015 to 31st March 2018. If either party wants to terminate the agreement earlier, the written notice has to be delivered to the other party not less than 30 days in advance.

- Rental expenses

0.18

0.11

rate ranging from THB 34 per square meter per month to THB 62 per square meter per month.



Dr. Tobi TKNRF TKNRF has rented space of a building no. 77 Bond Street of Dr. Tobi to use as an office. Monthly rental and service fee is THB 130,000 in total. The agreement period is 1 year effective from 1st June 2014. The rental period shall automatically renew for another one year term after the rental completion of each term, unless either party provides notice to the other of its intent to terminate the agreement not less than 30 days before the end of the then current term.


TKNRF rented space of the building from Dr. Tobi to use an office as there is no space available at the head office of the Company and the factory.


Rental rate is based on the square meters rented and is the same rate Dr. Tobi paid to rent the whole building from an outside party. Service charge is also based on the size of the space rented.

- Rental expenses

- Other payable

1.34

-

1.17

-


The Audit Committee reviewed and approved the appropriateness of business terms of the transaction and the reasonableness of price.

24

2.3. Loan Transactions

The Company and its subsidiaries have a policy not to enter into any lending agreement with its related parties in the future.

2.4. Loan Guarantees with the Financial Institutions

As of 31st December 2014 and 30th September 2015, major shareholders of the Company guaranteed credit lines for the Company without charging any fee as follows:

The Audit Committee approved the appropriateness of business terms of these transactions as they were beneficial to the Company’s operation. However, every financial institution mentioned in the table above already issued letters to release personal guarantee of Mr. Itthipat and Miss Orrapat after the initial public offering of the Company’s shares.

Bank Credit Lines Guarantor Loan Facility

As of 31st December 2014 As of 30th September 2015

Export-Import Bank of Thailand Foreign Exchange Forward Contract Mr. Itthipat and Miss Orrapat USD 0.62 million USD 0.04 million

Krung Thai Bank PCL. Letter of Credit and Trust Receipt Mr. Itthipat THB 0.78 million -

The Siam Commercial Bank PCL. Foreign Exchange Forward Contract Mr. Itthipat THB 0.39 million THB 6.81 million

Letter of Credit, Trust Receipt, and Packing Credit

Mr. Itthipat THB 65.13 million THB 17.93 million

Bank Overdraft Mr. Itthipat - THB 0.02 million

TMB Bank PCL. Letter of Credit, Trust Receipt, and Packing Credit

Mr. Itthipat THB 124.92 million THB 164.99 million

Foreign Exchange Forward Contract Mr. Itthipat - THB 26.63 million

25

Contingencies and Commitments 1. As of 30 September 2015, the Company and subsidiaries have capital expenditure commitments of THB 189.90 million and Yen 36.0 million to purchase machines and equipment and to construct a factory.

2. The Company and subsidiaries have land lease agreement, building and office space lease agreement, and service agreement with contract length from 1 year to 18 years.

3. The Company reached an agreement with the foreign company on purchasing raw material in advance which already specified period, quantity, and price. As of 30th September 2015, the remaining commitment of such agreement is USD 5.4 million.

4. As of 30th September 2015, the Company has the letter of guarantee issued by the financial institution by the name of the Company of THB 3.2 million. It is for the normal operation of the Company, such as the letter of guarantee on electricity usage.

Risk Factors

1. Risk from dependency on the major suppliers : the raw material for the Company’s products is imported seaweed, which is ordered mainly from Korea. The Company faces the risk of raw material shortage both in terms of quantity and quality which would materially impact the Company’s operation. However, the company has criteria to select the supplier based on its past experience, reputation in the market, and good financial status. The order from various suppliers could mitigate the risk from dependency on some suppliers. In addition, the Company continues maintaining good relationship with other suppliers who have never done business with the Company, so the Company can divert to the alternative sources as substitution when there is any problems arising with the current one.

2. Risk from dependency on major customers : In the previous year, the Company sold a large portion of their products to a big domestic retail store. The Company generated more than 30% of its domestic revenue from this customer. If the Company loses such customer, there would be a big impact on revenue of the Company. Nevertheless, the Company has kept good relationship with this customer to date since establishment. Moreover, the Company has policy to diversify its distribution channel to other groups of customer in order to reduce such dependency.

3. Risk from dependency on seaweed products : Since all products of the Company are made of seaweed, the Company faces risk of decreasing demand due to the personal taste change that would reduce the Company’s revenue dramatically. The Company has recognized this risk and continually developed other type of products by their Research and Development department in order to explore and study customer behavior and perception to its new developed products. Additionally, the Company plans to expand its business with “From Sea to Farm” business model by expanding its production line from its raw material from sea to other agricultural raw material. In the recent years, the Company has launched new products such as “Tao Kae Pop” popcorn.

4. Risk from inability to renew the land lease contract at Nopphawong office : Since the Company’s factory is located at Nopphawong area, where the Company has lease contracts with many counterparties. If the Company

26

cannot agree on contract renewal term with any of those counterparties, it would lead to business disruption and impact on its revenue and reputation. Currently, the Company successfully negotiates on contract extension for most of the area that are necessary for company operation. The lessor agreed to extend the contract to year 2020 and promised to extend again for 9 to 12 years. The land lease agreements consist of one area used for the Company’s operation with remaining term of 8 years, and other areas are used as car park and cafeteria that have no risk to the Company’s operation in short term. However, the Company recognizes the risk and is now in the process of negotiation with landlords to extend the contract for the longer term. On the other hand, the Company is constructing the second factory at the Rojana Industrial Estate which is expected to commercially operate by 2016 with the capacity to expand its future growth. Additionally, the Company possesses a plot of land at Lat Bua Luang, which can be used for purpose of production expansion or relocation. The Company is able to build such factory within 6 months with the capital expenditure less than THB 300 million, so the Company is confident that the risk could be mitigated away with minimal impact its operation.

5. Risk from price fluctuation of raw material : The production cost of seaweed product is the major portion of total production cost. Thus, the seaweed price fluctuation would affect the production cost. In order to mitigate the risk, the Company has agreed with suppliers to make purchasing contract with 1 year term in general. Such contracts already specify price, quantity, and quality of seaweed that suppliers have to deliver to the Company based on terms in the contract. If market price of seaweed increases more than the agreed price on the contract, the Company will be benefit from the lower raw material cost over its competitors that have to purchase at market price.

6. Risk from labor : The Company’s operation in various production processes mainly rely on labors to operate, for example, frying, grilling, baking and packaging. This makes the Company has a risk of labor shortage and lack of high quality labor required time consuming on recruitment and training process. In addition, the government periodically increases the minimum wage that will eventually impact the Company’s production cost. However, the Company has been outsourcing the recruitment function to a professional company to expedite the process and lower associated cost for labor management because the high turnover rate. The Company also hired human resources professional to work with line managers on compensation scheme of labor and meet industry standard of competitive remuneration plan and incentive. This will enable the Company to be able to compete in labor market and maintain experienced high quality labors. Also, the Company continues researching for better technology to improve its operation.

7. Risk from obsolescence of inventory : The Company’s inventory mainly comprises of finished goods, raw material and packaging material. These inventories have to be properly managed and used in specific time period. The finished goods principally are finished seaweed products in stock with up to 1 year expiration after the manufacturing date. The major raw material is seaweed under purchase contract and can store for a year, while the seasoning can be kept up to 6 months. For the packaging material, it must be placed in the proper condition and kept upto 6 months. The export finished goods could be last for 12 months because the transportation time has to be put into consideration that is a reason to make a longer lasting packaging. Notwithstanding, the Company has prepared a comprehensive and prudent inventory management policy to prevent and mitigate such risk by forecasting demand and production capacity. For packaging material, the Company has determined the location of warehouse that has good air circulation along with proper handling procedure.

8. Risk from foreign exchange volatility : The Company has purchased the seaweed raw material from abroad to sell both domestically and internationally. All the purchase and sell contracts are designated to transact in US Dollar. Since the Company use US Dollar as a main currency for both import and export transactions, it can maintain the gross margin to be sustainable. When the US Dollar appreciates, both raw material cost and sell

27

value will simultaneously increase. Otherwise, if the USD depreciates, both raw material cost and sell value will decrease. The Company also entered into a forward contract with domestic financial institutions to hedge against foreign currency risk.

9. Risk from loan repayment : Currently, the Company raised a portion of fund on loan from financial institutions and from issuing bill of exchange for its normal operation and investment in new project. Such obligation makes the Company to maintain adequate liquidity for principal repayment when they are due to ensure that there is no material impact to business continuity and financial status. In addition, loan agreements between the Company and financial institutions specify loan covenants term that the Company has to strictly adhere to. In case of breach on loan covenants, the creditors can enforce the Company to pay the penalty rate of interest and may seize the pledged collateral which harms the Company’s reputation, financial stability, and financial performance materially. However, the Company has continuously adhered to those conditions and covenants while set prudent cash management policy in order to maintain the proper and enough debt payment capabilities.

Lawsuit As of 30th September 2015, the Company and subsidiaries had no lawsuit

that would have adverse effect on assets of the Company and subsidiaries at the level of greater than 5% of their shareholders’ equity and had no lawsuit that would have a material effect on their operations.

No. of Employees As of 30th September 2015, Total of 3,154 employees Company Background

On 21st September 2004, the Company was registered as a company limited with the Ministry of Commerce with initial registered capital of THB 1 million. Its business purpose is to manufacture and distribute processed seaweed under brand “TaoKaeNoi”. Over the period, the Company is investing in processed seaweed business continuously. There were 2 manufacturing plants in Nonthaburi and in Pathumthani (At present, there is only one left in Pathumthani). The Company also invested in related business in order to response swiftly to consumers’ demand, launch new options to the market, and support its main business, such as snack and souvenir retail store, seasoning powder manufacturing plant, and roasted bread product. All of these investments add new sources of income, reduce operating cost, and create awareness of the Company and “TaoKaeNoi” brand more widely in the market.

In 2009, the Company founded TKNRF, wholly owned subsidiary, to operate “TaoKaeNoi Land” snack and souvenir retail stores that have several branches mainly in Bangkok and metropolitan. Later in 2010, the Company bought WMI, the manufacturing and selling roasted bread company under brand “Want More”, from former shareholders. This investment added new type of snack to the current product line of the Company. In 2011, the Company bought NCP, the seasoning powder manufacturing company that had supplied seasoning powders to the Company for manufacturing processing seaweed product. Over the period of investment in new businesses, the Company had increased its registered capital in order to support its business expansion and respond to increasing market competition. The Company was registered as Public Company Limited on 10th May 2013, and as of 3rd December 2015, its registered and paid-up capital was THB 345 million in total. The Company plans to increase its manufacturing capacity of the current plant and construct new factory in response of increasing of consumers demand in both domestic and overseas market in the future. The Company also considers investing in related business in order to increase its efficiency and sustain its business growth.

28

Investment in Subsidiary/ Associated/ As of 30th September 2015, the Company hold stakes in these companies: Related Companies

Unit : THB million

Name Type of Business Paid-up Capital

% of Shareholding

Investment Cost

Taokaenoi Restaurant & Franchise Co., Ltd.

Snack and souvenir retail store 35.00 99.99 35.00

Want More Industry Co., Ltd. Snack and souvenir trading 5.00 99.99 4.54 NCP Trading & Supply Co., Ltd. Seasoning manufacturer 1.00 99.99 0.49

Change in Paid-up Capital in the last 3 years

Unit : THB million

Date Capital

Increase After the Increase

Note/ Objective

4th December 2013 95.00 255.00 Support business expansion 30th November 2015 90.00 345.00 Initial Public Offering Accounting Period 1st January to 31st December Auditor Miss Sumalee Reewarabundit, E Y Office Company Limited Registrar Thailand Securities Depositary Company Limited Financial Advisor Asia Plus Advisory Company Limited Lead Underwriter Asia Plus Securities Company Limited Dividend Payment Policy The Company will pay dividend of no less than 40% of net

profit after taxes, legal reserves, and other reserves (if any) from the separate financial statements. However, dividend payment is subject to operating result, financial position, liquidity, needs of working capital, investment plan, future business expansion, market condition, appropriateness, and other factors related to operation and management of the Company under the condition that the Company will have sufficient cash for its business operation. Such operation has to maximize the benefit of shareholders as appropriate in the view of the Board of Directors and/or shareholders of the Company.

29

BOI Certificates

The Company and affiliates were granted an investment incentive according to the BOI certificates from the Board of Investment under the Investment Promotion Act, B.E. 2520 (1977). The Company and affiliates have to follow terms and conditions as indicated on the BOI certificate. As of 30th September 2015, these BOI certificates are active as follows:

No. Date Summary of BOI Incentive related to the Company’s Operation 1433/2553

(Nopphawong Plant)

9th April 2010 For an investment in manufacturing processing seaweed product: Permit to bring into the Kingdom certain number of skilled workers or

experts, spouses, and dependents to work for a given period Exemption of import duties on machinery (effective until 9 October

2015*) Exemption of import duties on raw material and other necessary

material that have to be imported from foreign countries for manufacturing to export (effective until 9 January 2017)

Exemption of import duties on material for export (effective until 9 January 2017)

2155(2)/2554 (Rojana Plant)

20th September 2011 (Approved to move the operation site

from Lat Bua Luang to Rojana Industrial

Park on 25th November 2014)

For an investment in manufacturing processing seaweed product: Permit to bring into the Kingdom (Not including Burmese, Lao,

Cambodian) certain number of skilled workers or experts, spouses, and dependents to work for a given period

Exemption of import duties on machinery (effective until 20 March 2015*)

Exemption of import duties on raw material and other necessary material that have to be imported from foreign countries for manufacturing to export (Unused right)

Exemption of import duties on material for export (Unused right) Exemption of corporate income tax for the net income from the BOI

privilege operation in total of no more than 100% of total capital investment, excluding land cost and working capital within 7 years.

Exemption of taking dividend incurred from BOI privilege operation into consideration for corporate income tax calculation. (Unused right)

1514(2)2554 (Nopphawong

Plant)

6th May 2011 For an investment in manufacturing snack made of flour: Permit to bring into the Kingdom certain number of skilled workers or

experts, spouses, and dependents to work for a given period Exemption of import duties on machinery (effective until 6 November


material that have to be imported from foreign countries for manufacturing to export (Unused right)

30

No. Date Summary of BOI Incentive related to the Company’s Operation




2103(2)2557 (Nopphawong

Plant)

8th September 2014 For an investment in manufacturing baked corn: Permit to bring into the Kingdom certain number of skilled workers or

experts, spouses, and dependents to work for a given period Exemption of import duties on machinery (effective until 8th March


material that have to be imported from foreign countries for manufacturing to export (Unused right)




Note : * Extension of machinery importation period shall be approved for not exceeding 1 year at a time and not exceeding 3 times in total. No. of Shareholders As of 30 November 2015 No. of

Shareholder No. of Shares

% of paid up capital

1. Strategic shareholders 1.1 Directors, manage, and executive management

including related persons and associated persons 4 1,020,000,000 73.91

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

- - -

1.3 Controlling Shareholders - - - 2. Non-Strategic shareholders hold > 1 trading unit* 6,165 360,000,000 26.09 3. Non-Strategic shareholders hold < 1 trading unit* - -

Total Shareholders 6,169 1,380,000,000 100.00 Remark : * 1 trading unit equals 100 shares

31

Major Shareholders As of 30 November 2015

No. Shareholder Name1 Post IPO Pre IPO

No. of share (share)

(%) No. of share

(share) (%)

1 Peeradechapan Group 1,020,000,000 73.91 1,020,000,000 100.00 - Mr. Itthipat Peeradechapan 462,000,000 33.48 462,000,000 45.29 - Peeradechapan Holding Co., Ltd.2 360,000,000 26.09 360,000,000 35.29 - Miss Orrapat Peeradechapan 99,000,000 7.17 99,000,000 9.71 - Mr. Nutchatpong Peeradechapan 99,000,000 7.17 99,000,000 9.71 2 Miss Pitchsinee Seriwiwattana 16,500,000 1.20 - - 3 Kaewsawang Group 13,195,000 0.96 - - - Mr. Watchara Kaewsawang 6,825,000 0.49 - - - Mrs. Sopit Kaewsawang 3,000,000 0.22 - - - Mr. Worawit Kaewsawang 3,000,000 0.22 - - - Mr. Kittituch Kaewsawang 200,000 0.01 - - - Mr. Veeraphat Kaewsawang 100,000 0.01 - - - Miss Pranpreeya Kaewsawang 50,000 0.00 - - - Mr. Pakapon Kaewsawang 20,000 0.00 - - 4 Mr. Suthipong Wetwarut 8,034,600 0.58 - - 5 Ruengprasertkul Group 6,005,000 0.44 - - - Miss Wipawee Ruengprasertkul 6,000,000 0.43 - - - Mr. Wisan Ruengprasertkul 5,000 0.00 - - 6 Mr. Sompong Chonkadeedumrongkul 5,216,700 0.38 - - 7 Mrs. Sanlaya Jarujinda 5,000,000 0.36 - - 8 Jefferies International Limited 5,000,000 0.36 - - 9 Mr. Nares Ngamapichon 4,000,000 0.29 - - 10 Miss Sukanya Chaiputhi 3,075,200 0.22 - - 11 Other Minorities 293,973,500 21.30 - -

Grand Total 1,380,000,000 100.00 1,020,000,000 100.00 Remark : 1.The list of top 10 major shareholders of the Company is categorized by family relationship in accordance with the disclosure

under Section 69 of Securities and Exchange Act B.E. 2535, which does not associate to any relationship or behavior according to definitions in Notification of the Capital Market Supervisory Board No. TorChor 7/2552 Re: Rules and Procedures for Acting in Concert.

2.Peeradechapan Holding Co., Ltd. is a company with THB 1 million registered and fully paid capital comprised of 100,000 shares with par value of THB 10. As of 16th December 2014, shareholders are as follows:

No. Shareholder Name No. of share (share) (%) 1 Peeradechapan Group 100,000 100.00

- Mr. Itthipat Peeradechapan 70,000 70.00 - Miss Orrapat Peeradechapan 15,000 15.00 - Mr. Nutchatpong Peeradechapan 15,000 15.00

Total 100,000 100.00

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Remark : * The list of shareholders of Peeradechapan Holding Co., Ltd. Company is categorized by family relationship in accordance with the disclosure under Section 69 of Securities and Exchange Act B.E. 2535, which does not associate to any relationship or behavior according to definitions in Notification of the Capital Market Supervisory Board No. TorChor 7/2552.

Foreign Shareholders As of 30 November 2015

The Company has 49 foreign shareholders, accounted for 17,775,600 shares or 1.29% of total paid-up capital Note The Company has a limitation on the percentage of equity shares held by foreign shareholders stated in clause 7 of the article of association that “Shares of the Company are freely transferred without limitation and the Company’s shares held by foreigners at any time must not be greater than forty nine (49)% of the Company’s paid-up capital”

Board of Directors

Name Position Start Date 1. Mr. Yuth Vorachattarn Chairman of the Board of

Directors / Independent Director / Audit Committee

24th March 2012

2. Mrs. Wanee Thasanamontien Independent Director and Chairman of Audit

Committee

13th November 2014

3. Mr. Chaiyong Ratanachroensiri Independent Director and Audit Committee

24th March 2012

4. Mr. Somboon Prasitjutrakul Director 8th November 2013 5. Mr. Itthipat Peeradechapan Director and

Chief Executive Officer 21st September 2004

6. Miss Orrapat Peeradechapan Director and Managing Director – International Markets

21st September 2004

7. Mr. Nutchatpong Peeradechapan Director and Managing Director –

Information Technology

21st September 2004

8. Miss Porntera Rongkasiriphan Director and Administrative Director

10 November 2008

Audit Committee The board of directors meeting No. 11/2014 held on 13th November 2014 (Mrs.

Wanee Thasanamontien), the general meeting of shareholders No. 1/2014 held on 18th March 2014 (Mr. Yuth Vorachattarn), and the general meeting of shareholders No. 1/2013 held on 30th April 2013 (Mr. Chaiyong Ratanachroensiri), passed a resolution appointing the audit committee.

Members of Audit Committee

33

Name Position 1. Mrs. Wanee Thasanamontien Chairman of Audit Committee 2. Mr. Yuth Vorachattarn Audit Committee 3. Mr. Chaiyong Ratanachroensiri Audit Committee

Mr. Nutchatpong Peeradechapan is the secretary of the audit committee

Scope of Duties and Responsibilities

1. To review the Company’s financial statements to ensure accuracy and sufficiently disclosure, by cooperating with auditor and management in preparing financial reports both quarter and annual.

2. To review and ensure that the Company has appropriate and efficient internal controls and internal audit systems. These activities shall be mutually performed with the external auditor and internal auditor.

3. To review and ensure that the Company complies with the securities and exchange laws, regulations of the SET and laws relating to the Company’s business.

4. To consider, select and nominate the auditor of the Company, and to determine the compensation of such auditor by regarding the creditability and adequacy of resources, the audit work engaged by that audit company, as well as experience of personnel assigned to perform the audit activities in the Company. The selected auditor shall be proposed by the Board of Directors to the ordinary meeting of shareholders for its approval and appointment.

5. To consider the Company’s disclosure of information to ensure its accuracy and completeness when there are connected transactions or transactions that may result in a conflict of interest, and to approve for such transaction before proposing it to the meeting of the Board of Directors and/or the meeting of shareholders of the Company.

6. In case that the auditor finds any doubtful occurrence relating to a director or executive or any violation of law by any person who is responsible for the performance of the business of the Company and its subsidiaries and the auditor reports such finding to the Audit Committee, the Audit Committee shall proceed without delay to additionally investigate such occurrence and report the initial results of investigation to the Office of the Securities and Exchange Commission and the auditor within 30 days from the date of receiving the report from the auditor.

7. To prepare the Audit Committee’s corporate governance report to be disclosed in the Company’s annual report. The report must be signed by the Chairman of the Audit Committee. The report must comprise of:

a) Opinion on accuracy, completeness and reliability of the financial report of the Company and its subsidiaries;

b) Opinion on adequacy of the internal control system of the Company and its subsidiaries;

34

c) Opinion on compliance on the securities and exchange laws, regulations of the SET and laws relating to the Company or its subsidiaries’ businesses;

d) Opinion on appropriateness of the auditor; e) Opinion on transactions that may result in a conflict of interest; f) Number of the Audit Committee meetings and attendances of each

member of the Audit Committee; g) Opinion or observation in general which may be raised from the

performance of the Audit Committee’s duties; and h) Any report which the shareholders or other investors should be

informed of in accordance with the scope of duties and responsibilities assigned by the Board of Directors.

8. In case that the Audit Committee finds or suspects any of the following transactions which may have a substantial impact to the financial status and the operation of the Company, the Audit Committee shall immediately investigate and report such transaction to the Board of Directors in order for the board to take immediate action to solve the problem:

a) Transactions concerning any conflicts of interest; b) The findings of investigations into matters of which any suspected

fraud or irregularity is suspected or any failure of the internal control system; and

c) The findings of investigations into matters of which any infringement of any regulations or laws of the Exchange or the related business laws is suspected.

If the Board of Directors or the executives do not resolve said matter within a specific period, any member of the Audit Committee has the right to report such matter to the Securities and Exchange Commission and/or the Stock Exchange of Thailand.

9. The Audit Committee has the right to seek any opinion from any independent professional advisors at the Company’s expense when necessary.

10. To perform any other functions assigned by the Board of Directors and agreed by the Audit Committee.

To perform any activities upon the scope of duties and responsibilities specified above, the Audit Committee has the authority to invite any related management, executives or employees of the Company to report, share comments, attend the meeting or submit documents as it deems relevant and necessary.

The Board of Directors has the authority to amend and change the scope of duties and authority assigned to the Audit Committee as it deems necessary or appropriate.

35

Each member of Audit Committee has terms for holding office of 3 years except resignation due to the completion of terms according to Article of Association, which can be reelected.

Terms for holding office 1. Chairman 3 years 2. Member 3 years

Listing Conditions (If any) - None – Silent Period Shareholders, who own common shares before the company’s public offering, holding

759,000,000 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.

Relaxation - None - Others Board of Directors Meeting No. 14/2015 held on 6 November 2015 made a resolution to

pay out dividend of THB 86.70 million from the Company’s internal cash flow. The dividend was paid on 18th November 2015; therefore, the shareholders subscribing for the IPO shares shall not receive such dividend payment.

Statistical Summary Taokaenoi Food & Marketing Public Company Limited and its subsidiaries

------------ THB million -------------- ------------------------ THB/Share1 ----------------------

Year Sales Net Profit

(Loss)

Earnings (Loss) per

share2

Dividend3

Book Value

Payout Ratio (%)

2012 2013 2014

Nine-month period, ended 30 September

2015 (Reviewed)

2,495.59 2,715.63 2,694.96 2,518.58

105.42 128.31 198.58 244.81

0.1647 0.2005 0.2968 0.2400

0.18 0.09 0.41 0.21

0.39 0.40 0.35 0.37

108.61 44.42

139.04 87.50

Remark : 1. Par value is THB 0.25 per share 2. Calculated using the weighted average number of shares of the particular period on the par value of THB 0.25 3. Calculated using the number of shares of each dividend payment period on the par value of THB 0.25

Taokaenoi Food & Marketing Public Company Limited

------------ THB million -------------- ------------------------ THB/Share1 ----------------------

Year Sales Net Profit

(Loss)

Earnings (Loss) per

share2

Dividend3

Book Value

Payout Ratio (%)

2012 2013 2014

Nine-month period, ended 30 September

2015 (Reviewed)

2,405.90 2,651.52 2,632.23 2,477.52

108.80 133.23 214.10 246.15

0.1700 0.2082 0.3200 0.2413

0.18 0.09 0.41 0.21

0.41 0.43 0.58 0.40

105.24 42.78

128.96 87.02

Remark : 1. Par value is THB 0.25 per share 2. Calculated using the weighted average number of shares of the particular period on the par value of THB 0.25 3. Calculated using the number of shares of each dividend payment period on the par value of THB 0.25

36

Taokaenoi Food & Marketing Public Company Limited and its subsidiaries

(Unit: THB million)

Statement of Financial Position Audited Reviewed

31 Dec 2012 31 Dec 2013 31 Dec 2014 30 Sep 2015

Assets

Current assets

Cash and cash equivalents 65.67 42.21 68.06 112.35

Trade and other receivables 342.64 391.13 468.08 428.19

Short-term loans to related parties 24.15 21.50 - -

Inventories 208.11 226.06 228.00 243.14

Other current assets 10.42 14.19 17.60 33.36

Total current assets 650.98 695.09 781.74 817.04

Non-current assets

Restricted bank deposits 35.00 36.24 36.28 36.63

Investment property - - 39.75 39.75

Property, plant and equipment 320.91 311.22 391.33 483.51

Intangible assets 8.49 8.97 9.29 11.07

Deferred tax assets 2.45 4.63 4.35 8.23

Other non-current assets 16.61 33.60 13.97 50.52

Total non-current assets 383.46 394.67 494.96 629.70

Total assets 1,034.44 1,089.75 1,276.70 1,446.75

Liabilities

Current liabilities

Short-term loans from banks 208.54 320.42 290.16 291.76

Trade and other payables 341.57 374.75 450.79 590.01

Other short-term loans 132.08 49.55 49.56 49.54

Current portion of long-term loans 3.90 4.15 8.72 8.84 Current portion of liabilities under finance lease

agreements 11.33 12.75 16.12 9.32

Income tax payable 32.19 19.74 35.05 38.84

Other current liabilities 8.92 14.25 13.10 34.58

Total current liabilities 738.52 795.62 863.49 1,022.89

37


31 Dec 2012 31 Dec 2013 31 Dec 2014 30 Sep 2015

Non-current liabilities

Long-term loans 21.19 16.60 33.18 26.51

Liabilities under finance lease agreements 22.98 15.47 22.37 17.75

Provision for long-term employee benefits 1.91 3.69 3.86 5.64

Other non-current liabilities 1.75 1.50 1.20 0.97

Total non-current liabilities 47.84 37.25 60.62 50.87

Total liabilities 786.36 832.86 924.12 1,073.76

Shareholders’ equity

Issued and paid-up share capital 160.00 160.00 255.00 255.00

Retained earnings

Appropriated – Statutory reserve 16.28 22.94 30.28 30.28

Unappropriated 71.79 73.95 67.30 87.71

Total shareholders’ equity 248.08 256.89 352.58 372.99

Total liabilities and shareholders’ equity 1,034.44 1,089.75 1,276.70 1,446.75

Statement of Comprehensive Income

Audited Reviewed

2012 2013 2014 Jan to Sep 2015

Revenues

Sales 2,495.59 2,715.63 2,694.96 2,518.58

Other income 46.83 4.97 31.34 6.17

Total revenues 2,542.42 2,720.60 2,726.30 2,524.75

Expenses

Cost of sales 1,788.10 1,783.00 1,778.61 1,632.71

Selling expenses 441.90 556.59 490.72 406.21

Administrative expenses 139.84 196.47 182.66 162.38

Total expenses 2,369.83 2,536.06 2,451.99 2,201.29 Profit before finance cost and income tax

expenses 172.59 184.55 274.31 323.46

Finance cost 23.94 16.96 19.59 12.78

38

Statement of Comprehensive Income

Audited Reviewed

2012 2013 2014 Jan to Sep 2015

Profit before income tax expenses 148.64 167.59 254.72 310.68

Income tax expenses 43.22 39.27 56.14 65.88

Net profit 105.42 128.31 198.58 244.81

Statement of cash flows

Audited Reviewed

2012

2013 2014 Jan to Sep 2015

Cash flows from operating activities

Profit before tax 148.64 167.59 254.72 310.68

Adjustments

Depreciation and amortization 58.03 65.81 65.68 53.76

Write-off of equipment 2.45 15.56 6.38 0.53

Allowance for doubtful accounts (reversal) (0.61) 1.58 (0.34) 2.09 Amortization of premium (discount) on forward exchange

contracts 0.26 (0.17) 0.26 (0.07)

Reduction of cost of inventories to net realizable value 3.33 (2.28) 0.58 15.88

Impairment loss - - - 1.70

Allowance for impairment loss of assets (reversal) - 4.50 (4.50) -

(Gain) loss on sales of equipment (0.37) 0.96 (0.04) 1.31

(Gain) loss on exchange rate (8.74) 3.79 (9.55) 3.58


Provision for liability from litigation - - 4.85 -

Actuarial gains (1.99) - - -

Interest income (1.21) (1.79) (1.25) (0.42)

Interest expense 19.45 15.33 17.66 11.81 Profit from operating activities before changes in operating assets

and liabilities 221.05 272.66 336.27 402.90

Operating assets (increase) decrease

Trade and other receivables (38.40) (47.93) (77.72) 38.56

Inventories 66.39 (15.68) (2.52) (31.02)

Other current assets 1.48 (3.50) (3.37) (15.89)

39


Audited Reviewed

2012

2013 2014 Jan to Sep 2015

Other non-current assets (3.87) (17.82) 3.21 (1.87)

Operating liabilities increase (decrease)

Trade and other payables (78.27) 31.22 72.25 100.72

Other current liabilities 3.22 (0.22) (1.09) 19.82

Cash flows from operating activities 171.60 218.75 327.04 513.23

Cash paid for long-term employee benefits - - - (0.27)

Cash paid for income tax (12.44) (54.16) (40.88) (65.96)

Cash paid for interest - - - (11.23)

Net cash flows from operating activities 159.16 164.59 286.16 435.76

Cash flows from investing activities

Increase in restricted bank deposits (8.25) (1.23) (0.05) (0.35)

Increase in advance payments for purchases of assets - - (67.12) (59.72)

Acquisitions of property, plant and equipment (111.04) (74.06) (96.93) (86.57)

Acquisitions of intangible assets (0.74) (2.01) (2.12) (3.18)

Proceeds from sales of property, plant and equipment 11.58 2.32 26.50 1.80

Cash receipt from short-term loans to related party 10.30 19.65 25.50 -

Cash paid for short-term loans to related party (34.45) (17.00) (4.00) -

Interest income 1.23 1.52 1.26 0.55

Net cash flows from (used in) investing activities (131.36) (70.82) (116.96) (147.46)

Cash flows from financing activities

Increase (decrease) short-term loans from banks (91.30) 117.05 (27.36) 1.51

Proceeds from common stock issuance - - 95.00 -

Cash receipt from other short-term loans 133.57 177.80 30.00 -

Cash receipt from short-term loans to related party 1.00 - - -

Repayment of loans to related party (3.00) - - -

Cash receipt from long-term loans - - 26.35 -

Repayment of long-term loans (3.18) (4.34) (5.20) -

Repayment of liabilities under finance lease agreements (11.05) (11.37) (15.10) (6.56)

Repayment of other short-term loans - (265.00) (30.00) (14.56)

40


Audited Reviewed

2012

2013 2014 Jan to Sep 2015

Dividend paid (32.00) (119.50) (199.20) (224.40)

Cash paid for interest (20.22) (11.86) (17.84) -

Net cash flows from (used in) financing activities (26.18) (117.23) (143.34) (244.01)

Net increase (decrease) in cash and cash equivalents 1.62 (23.46) 25.86 44.29

Cash and cash equivalents at beginning of the year 64.05 65.67 42.21 68.06

Cash and cash equivalents at end of the year 65.67 42.21 68.06 112.35

Taokaenoi Food & Marketing Public Company Limited

(Unit: THB million)


31 Dec 2012 31 Dec 2013 31 Dec 2014 30 Sep 2015

Assets

Current assets

Cash and cash equivalents 56.89 20.13 51.24 82.10

Trade and other receivables 356.65 416.18 507.94 473.40

Short-term loans to related parties 20.00 20.00 - -

Inventories 194.48 211.29 214.97 229.33

Other current assets 8.55 13.06 16.66 32.32

Total current assets 636.58 680.66 790.80 817.16

Non-current assets

Restricted bank deposits 35.00 36.24 36.28 36.63

Investment in subsidiaries 40.03 40.03 40.03 40.03

Investment property - - 39.75 39.75

Property, plant and equipment 308.43 299.44 369.30 468.58

Intangible assets 7.08 7.93 8.66 10.71

Deferred tax assets 2.05 4.34 4.27 8.10

Other non-current assets 10.83 22.60 7.82 46.43

Total non-current assets 403.43 410.58 506.11 650.22

Total assets 1,040.00 1,091.24 1,296.91 1,467.38

41


31 Dec 2012 31 Dec 2013 31 Dec 2014 30 Sep 2015

Liabilities

Current liabilities

Short-term loans from banks 208.54 320.42 290.16 291.76

Trade and other payables 332.49 356.53 440.35 577.77

Other short-term loans 132.08 49.55 49.56 49.54

Current portion of long-term loans 3.90 4.15 8.72 8.84 Current portion of liabilities under finance lease

agreements 11.33 12.75 14.83 7.99

Income tax payable 31.84 19.69 34.90 38.26

Other current liabilities 8.79 14.01 12.67 34.32

Total current liabilities 728.96 777.11 851.18 1,008.47

Non-current liabilities

Long-term loans 21.19 16.60 33.18 26.51

Liabilities under finance lease agreements 22.98 15.47 19.67 16.05


Other non-current liabilities 0.79 0.53 - -

Total non-current liabilities 46.81 36.16 56.59 48.02

Total liabilities 775.78 813.28 907.77 1,056.49

Shareholders’ equity

Issued and paid-up share capital 160.00 160.00 255.00 255.00

Retained earnings

Appropriated – Statutory reserve 16.00 22.66 30.00 30.00

Unappropriated 88.23 95.30 104.14 125.88

Total shareholders’ equity 264.23 277.96 389.14 410.88

Total liabilities and shareholders’ equity 1,040.00 1091.24 1,296.91 1,467.38

Statement of Comprehensive Income Audited Reviewed

2012 2013 2014 Jan to Sep

2015

Revenues

Sales 2,405.90 2,651.52 2,632.23 2,477.52

Other income 50.76 6.04 26.52 10.21

42

Statement of Comprehensive Income Audited Reviewed

2012 2013 2014 Jan to Sep

2015

Gain on foreign exchange rate - - 8.99 -

Total revenues 2,456.66 2,657.55 2,667.74 2,487.74

Expenses

Cost of sales 1,731.47 1,760.41 1,755.84 1,623.80

Selling expenses 417.85 528.64 456.73 390.63

Administrative expenses 132.33 176.26 166.00 149.60

Loss on foreign exchange rate - 3.09 - -

Total expenses 2,281.65 2,468.39 2,378.56 2,164.04 Profit before finance cost and income tax

expenses 175.00 189.16 289.18 323.70

Finance cost 23.69 16.80 19.34 12.50

Profit before income tax expenses 151.31 172.35 269.84 311.20

Income tax expenses 42.51 39.12 55.74 65.05

Net profit 108.80 133.23 214.10 246.15

Statement of cash flows Audited Reviewed

2012 2013 2014 Jan to Sep

2015

Cash flows from operating activities

Profit before tax 151.31 172.35 269.84 311.20

Adjustments

Depreciation and amortization 54.18 61.62 59.61 48.97

Write-off of equipment 0.43 14.96 6.37 0.53

Allowance for doubtful accounts (reversal) (0.61) 1.17 (0.16) 2.09 Amortization of premium (discount) on forward exchange

contracts 0.26 (0.17) 0.26 (0.07)

Reduction of cost of inventories to net realizable value 2.81 (2.19) 0.99 15.64

Allowance for impairment loss of assets (reversal) - 4.50 (4.50) -

(Gain) loss on sales of equipment (0.34) 0.96 (0.27) (1.19)

Loss on disposal of investment in subsidiary 16.00 - - -

43


2012 2013 2014 Jan to Sep

2015

Unrealized (gain) loss on exchange rate (8.74) 3.79 (9.57) 3.58


Provision for liability from litigation - - 4.85 -

Actuarial gains (1.90) - - -

Dividend income (5.00) - - -

Interest income (1.30) (1.65) (1.14) (0.40)

Interest expense 19.34 15.33 17.60 11.68 Profit from operating activities before changes in operating assets

and liabilities 228.17 272.39 345.66 394.05

Operating assets (increase) decrease

Trade and other receivables (46.53) (58.54) (92.74) 33.21

Inventories 62.32 (14.61) (4.67) (30.01)

Other current assets 0.37 (4.51) (3.55) (15.79)

Other non-current assets (3.48) (12.59) 2.70 (3.30)

Operating liabilities increase (decrease)

Trade and other payables (75.35) 22.09 80.07 99.43

Other current liabilities 3.29 (0.33) (1.28) 19.99

Cash flows from operating activities 168.80 203.89 326.17 497.58

Cash paid for long-term employee benefits - - - (0.27)

Cash paid for income tax (11.56) (53.55) (40.78) (65.52)

Cash paid for interest - - - (11.23)

Net cash flows from operating activities 157.24 150.35 285.39 420.56

Cash flows from investing activities

Increase in restricted bank deposits (8.25) (1.23) (0.05) (0.35)

Increase in advance payments for purchases of assets - - (63.07) (59.19)

Acquisitions of property, plant and equipment (105.77) (70.38) (87.44) (86.24)

Acquisitions of intangible assets - (1.96) (2.12) (3.18)

Cash paid for investment in subsidiary (15.00) - - -

Cash receipt from disposal of investment in subsidiary 4.00 - - -

44


2012 2013 2014 Jan to Sep

2015

Proceeds from sales of property, plant and equipment 11.52 2.32 20.20 1.68

Cash receipt from short-term loans to related party 10.30 17.00 20.00 -

Cash paid for short-term loans to related party (30.30) (17.00) - -

Dividend income 5.00 - - -

Interest income 1.28 1.38 1.18 0.51

Net cash flows from (used in) investing activities (127.22) (69.88) (111.30) (146.77)

Cash flows from financing activities

Increase (decrease) short-term loans from banks (91.30) 117.05 (27.36) 1.51

Proceeds from common stock issuance - - 95.00 -

Cash receipt from other short-term loans 133.57 177.80 30.00 -

Cash receipt from short-term loans to related party - - - -

Repayment of loans to related party - - - -

Cash receipt from long-term loans - - 26.35 -

Repayment of long-term loans (3.18) (4.34) (5.20) (6.56)

Repayment of liabilities under finance lease agreements (11.05) (11.37) (14.79) (13.48)

Repayment of other short-term loans - (265.00) (30.00) -

Dividend paid (32.00) (119.50) (199.20) (224.40)

Cash paid for interest (20.08) (11.86) (17.79) -

Net cash flows from (used in) financing activities (24.05) (117.23) (142.98) (242.93)

Net increase (decrease) in cash and cash equivalents 5.98 (36.76) 31.11 30.86

Cash and cash equivalents at beginning of the year 50.91 56.89 20.13 51.24

Cash and cash equivalents at end of the year 56.89 20.13 51.24 82.10

Prepared by Asia Plus Advisory Co., Ltd.

Documents

Important Note: This memorandam was prepared in Thai and …investor-th.taokaenoi.co.th/newsroom/021220150811030837E.pdf · Popcorn business : The Company manufactures and sells popcorn