information memorandum eastern polymer group public...

Disclaimer: The English translation of this document is prepared solely for reference for non-Thai shareholders of the Company. It should neither be relied

upon as the definitive nor the official document of the Company. The Thai version is the official document and shall prevail in all respects in the event of any

inconsistency with the English translation.

Information Memorandum

Eastern Polymer Group Public Company Limited (EPG)

Head Office 770 Theparak Road, Theparak sub-district, Mueang district, Samut

Prakan 10270

Tel: 02-383-6599

Fax: 02-383-6532

Website: www.epggroups.com

Production Plants IPP industrial estate, rayong Thailand and Tumbon Makhamkoo

Nikompattana Rayong, Thailand

Listing Date 24 December 2014 (First Trading Day: 24 December 2014)

Listing Securities Number of common shares 2,800,000,000 shares, Par value per share

of THB 1 Total value of THB 2,800 mm , the number of new shares

offered to the public is 700,000,000 shares or equivalent to 25.0% of

number of total paid-up shares after Initial Public Offering (IPO)

Capital As at 24 December 2014 (Trading commencement)

Registered capital, common shares of THB 2,800 mm

Paid-up capital, common shares of THB 2,800 mm

Secondary Market Stock Exchange of Thailand (SET)

Offering Price 5.80 THB per share

Offering Date 17 – 19 December 2014

Objectives and Plans for Utilizing the Capital Increase

Use of Proceed Amount*

(THB mm)

% Estimate

timing

Working Capital and Business Expansion 3,000 75.8 By FS 2015

Payment to loan from financial institution 960 24.2 By FS 2014

Note: *net off cost of IPO issuance

Green Shoe Option -None-

Types of Business and Nature of Operation

Types of Business and Service

Eastern Poly Group Public Company Limited (the “Company” or “EPG”) is holding company and mainly investing in

innovative polymer and plastic convertor company, which is consisting of (1) The insulator business (2) car

accessories business (3) plastic packaging business (4) other supporting business (5) research and development and

(6) joint venture (JV)

Eastern Polymer Group Public Company Limited‘s company structure (EPG)

All production businesses which the Company has invested (1) insulator business (2) car accessories business

and (3) plastic packaging business are unique and different from the competitors as well as owned amount of patents

and technology which has been developed by the Company itself,

1. Insulation Business

EPG is engaged in thermal insulation business through Aeroflex Co.Ltd (AFC), wholly owned by EPG. AFC has

developed a special type of insulator which made of Ethylene Propylene Diene Methylene (EPDM) and various

synthetic polymers. Presently, the Company has many products with patented and distributes them over 100

countries worldwide.

AFC’s superior technology provides several advantages over their competitors. AFC‘s insulation rubber can

withstand temperature range from -200 oC to 125

oC and strong humidity. Furthermore, it is eco-friendly. AFC’s

insulators are widely used in air-conditioning system and chilled water cooling system to be used to protect the

water condensation and sound protection

Presently, AFC is the world 3rd largest insulator manufacturers and distributors with approximately 10% of the

total market share. Aeroflex USA (AUS) and Aeroflex Polymer Technology (Shianghai) (APT) wholly owned by

Eastern Polymer Group Plc

Aeroflex

(AFC)

Aeroflex USA

(AUS)

APS

(APS)

Aerocell Construction Material (Jiangsu)

(ACM)

Aeroflex Europe

(AEU)

Eastern Polypack

(EPP)

Aeroklas

(ARK)

Aeroklas USA(ARK-USA)

Aeroklas Australia

(ARK-AU)

Aeroklas Shanghai

(ARK-SH)

EPG Innovation Center

(EIC)

Aeroflex Polymer

Technology (Shanghai)

(APT)

Zeon Advanced Polymix

(ZAP)

Tokai Eastern Rubber

(Thailand) (TER)

40.0%

100.0%

40.0%

40.0%

100.0%

100.0%

100.0%

20.0%

27.0%

100.0% 100.0% 100.0%100.0% 100.0%

ALP Aeroflex India

(AAI)

60.0%

Aeroklas Europe

(ARK-EU)74.9%

Insulator Business Car Accessories Business Joint VentureOther Supporting

BusinessPlastic Packaging

Business

Research and

Development

THB 600.0mm

THB 384.8mm

THB 3.0mm

THB 90.1mm

THB 180.0mm

THB 184.0mm

THB 1,200.0mm

THB 31.8mm

THB 30.0mm

THB 127.4mm

THB 21.4mm

THB 700.0mm THB 259.2mm THB 50.0mmTHB 152.5mm

THB 100.0mm

THB 2,100mm

AFC, are established to support the growing demand and to reduce transportation cost in both USA market and

China market. Normally AFC will export the compound mix (intermediate product) to Aeroflex USA (AUS) and

Aeroflex Polymer Technology (Shanghai) (APT) to continue the remaining production process and distribute

finished product directly to the customer. By doing this AFC can protect it recipes and chemical formula as

secrete.

There are additional plants in China, India, and Germany with 40% share owned by AFC through JV with the

local partners since AFC does not familiar with the market. AFC will send JVs only the compound mix in order

to protect chemical formula as the Company’s secrete.

Apart from the subsidiaries and associate companies, AFC also has presence in Switzerland and Russia in a

form of licensing. The Company provides Prefoam Tube and Sheet to local manufacturers to produce and

distribute the finished product directly to the customer

Despite the production capacity of EPDM being approximately 15,000 tons per year, Aeroflex also invested in

Aerocel construction material (Shiangshu) (ACM) in China, APL Aeroflex India (AAI) in India, and Aeroflex

Europe (AEU) in German to produce an economical type of insulator made from Nitrile Butadiene Rubber

(NBR). The production capacity for NBR is approximately 14,000 tons per year.

Apart from insulators, AFC additionally provide related products such as tape, rigid foam, and flexible duct etc.

Patents

As of 30 September 2014, AFC owns a total of 7 patents in thermal insulation business

Production capacity

The table below displays the production capacity from 2012 through 2015

Units

FY2012

(Apr 2011 –

Mar 2012)

FY2013

(Apr 2012 –

Mar 2013)

FY2014

(Apr 2013 –

Mar 2014)

1H2015

(Apr 2014 –

Sept 2014)

Mixture Production

Maximum capacity (ton) 10,000 10,000 15,000

15,000

Actual production (ton) 7,500 8,000 8,700 4,300

Efficiency (%) 75% 80% 58% 57%

Prefoam Tube and Sheet Production

Maximum capacity /1

(ton)

1,200 1,200 1,200 1,200

Actual production (ton) 395 300 320 175

Efficiency (%) 33% 25% 27% 29%

Finished Goods Production

Maximum capacity (ton) 8,000 10,000 12,000 12,000

Actual production (ton) 5,200 6,000 6,500 3,536

Efficiency (%) 65% 60% 54% 59%

Note: 1/ Classified as for sale 1,200 tons and to produce finished product 10,800 tons

2. Car Accessories Business

EPG is engaged in auto parts business through Aeroklas Co.Ltd (ARK), wholly owned by EPG. ARK

manufactures and distributes extensions for trucks such as Bed Liner, Deck Cover, Canopy, and Side Step. The

extensions are applicable to Single Cab, Space Cab, and Double Cap and can be assembled on every leading

brand of trucks (Ford, Toyota, Mazda, Isuzu, Nissan, Mitsubishi, Honda, etc.)

ARK is one of a few Thai manufacturers which do not operate solely as OEM (Original Equipment

Manufacturer). The company additionally operates as ODM (Original Design Manufacturer) and REM

(Replacement Equipment Manufacture), giving several benefits to the company.

ARK is one of the world’s largest manufacturers of Bed Liner with advanced technology allows convenient

installation; the Bed Liner can be installed without drilling into the car body. ARK has two manufacturing sites in

Thailand and China with the production capacity being more than 800,000 pieces per year.

The company patented the Twin Sheet ABS technology and implements it in producing Deck Cover and

Canopy. This technology enhances the durability of the products making them superior to competitors. The

production capacity for Deck Cover and Canopy are 24,000 per year and 20,000 set per year respectively.

ARK invented Side Step for SUV cars using Plastic Composite supplied by one of the largest local car

manufacturers. Using plastic instead of metal would reduce the overall weight of the car and thus more safe.

Patent/Petty Patent

As of 30 September 2014, ARK possesses 19 patents for 20 years and addition of 125 petty patents for 10

years regarding auto parts business.

Production Capacity and Efficiency

ARK has 2 main manufacturing sites located in Rayong, Thailand and Shanghai, China. Several subsidiaries

located in USA and Australia act as distributors to nearby countries. The following table display ARK’s

production capacity

Products Current

production

capacity

FY2012

(Apr 2011 –

Mar 2012)

FY2013

(Apr 2012 –

Mar 2013)

FY2014

(Apr 2013 –

Mar 2014)

1H2015

(Apr 2014 –

Sept 2014)

Bed Liner 800,000

units/year 62.9% 75.9% 59.6% 57.0%

Products Current

production

capacity

FY2012

(Apr 2011 –

Mar 2012)

FY2013

(Apr 2012 –

Mar 2013)

FY2014

(Apr 2013 –

Mar 2014)

1H2015

(Apr 2014 –

Sept 2014)

Canopy 24,000

units/year 77.0% 66.5% 51.1% 62.0%

Deck Cover 24,000

units/year 71.2% 76.1% 57.6% 63.0%

Side Step1 100,000

pairs/year

- - - -

Note: 1 Side Step production commences 3Q15

3. Plastic Packaging Business

EPG has engaged packaging business through Eastern Polypack Company Ltd. (EPP), wholly owned by EPG.

EPP is one of the largest manufacturers in Southeast Asia. The products possess higher quality and more

sophisticated design compared to general containers. EPP produces from all kinds of plastic, including (PP)

Polystyrene (PS) Polyethylene Terephthalate (PET) and Polylactic Acid (PLA)

EPP is the expertise in manufactures and design plastic cup with unique design and handy shape under its own

brand “EPP”. In addition, EPP plastic cup are made from high quality plastic enhancing durability and

convenient to use. Presently, EPP’s product is widely used and is recognized by well-known restaurant food

chain such as EPP is one of a few South East Asia suppliers for the world’s best franchise like Mcdonald.

Apart from plastic cup, EPP is popular for its microwavable plastic food packaging. The products are widely

used in convenience stores for ready-made food. A special kind of plastic that can withstand microwave and can

respond to today’s fast-paced and demanding environment.

Other notable products from EPP includes instant-noodle cup, design to optimize shelf life, fruit juice packaging,

yogurt containers, and etc. EPP’s products are eco-friendly and are made to be recycled. Today, the production

capacity for plastic container and plastic sheets are approximately 24,000 tons per year and 5,000 tons per year

respectively.

Patent

As of 30 September 2014, EPP possess 34 patents and in addition of 50 more patents pending.

Production Capacity

There is only 1 manufacturing site located in Rayong, Thailand. The maximum capacity of plastic container is

approximately 24,000 tons per year. The following table displays the production capacity.

Products unit

FY2012

(Apr 2011 –

Mar 2012)

FY2013

(Apr 2012 –

Mar 2013)

FY2014

(Apr 2013 –

Mar 2014)

1H2015

(Apr 2014 –

Sept 2014)

Plastic container

Production capacity Tons/year 14,000.0 15,000.0 20,000.0 24,000.0

Actual production Tons/year 10,000.0 10,800.0 12,300.0 12,100.0

Efficiency % 77.0% 72.0% 61.5% 50.41/1

Sheet plastic

Production capacity Tons/year none 5,000.0 5,000.0 5,000.0

Actual production Tons/year none 2,750.0 3,000.0 2,500.0

Efficiency % none 55.0% 60.0% 50.02%/2

Note: 1/ calculated from 1H2015 (Apr – Sept 2014) at 12,000 tons

2/ calculated from 1H2015 (Apr – Sept 2014) at 2,500 tons

During 2012 2013 2014 and 1H2015, EPP has continuously improved the production capacity to respond to the

growing demand.

4. Other Supporting Business

EPG has set up the supporting business operated by Aeroflex Polymer Technology (Shanghai) to serve and

support 3 production businesses of the group such as saucing product for trading business like paper cup,

plastic spoon and fork and partly support AFC to manufacture insulation as well

5. Research and Development

To have continuously competitive advantage above the competitors by continuously developed and research

new product to serve demand from customer, EPG has established Eastern Polymer Innovation Center (“EIC”).

EIC is one of the modernist polymer develop and research center in Thailand and also is certified by various

well-known international standards organization that develops and publishes voluntary consensus technical

standards for a wide range of materials, products, systems, and services such as ASTM, DIN, ISO, JIS, and EN

etc. Currently, EIC has capability to test and experiment more than 300

flammability test, freezing point test, and wind duration test under control of more than 14 material

2 polymer expertise

6. Joint Venture

(6.1) Manufacturer & distributor

Rubber (Thailand))

Apart from 5 main businesses, EPG Eastern Polymer Group has joined with

world largest anti-vibration manufacturer and distributor, to establish anti

Thailand under joint venture company “Tokai Eastern Rubber (Thailand)

voting right and a 20% profit sharing of TER net profit.

As of now EPG hold a 30% TER stakeholder (Excluding Prefers stock) but has the voting right and profit

sharing of 20% since Tokai Rubber Industry (TRI) own 25,000

sharing 30 times of common stock.

Tokai Eastern Rubber (Thailand) (TER) is the manufacturer and distributor of anti

automotive industry. Today TER distributes its products to well

has production base in Thailand as well as export some to Tokai Rubber Industry (TRI)

largest anti-vibration manufacturer in South East Asian with production capacity of 120 million tons per year.

Currently, TER has partnered with TRI to establish production base in India.

(6.2) Manufacturer & distributor rubber compound (Investing through Zeon Advance Polymix)

EPG Eastern Polymer Group has joined with

group” to establish rubber compound production base in Thailand under Zeon Advance Polymix (ZAP) with a

27% of stakeholder.

EIC has capability to test and experiment more than 300 cases such as corrosion test,

flammability test, freezing point test, and wind duration test under control of more than 14 material

anti-vibration and hose in automotive industry (Investing through Tokkai Eastern

main businesses, EPG Eastern Polymer Group has joined with Tokai Rubber Industry (TRI), the

vibration manufacturer and distributor, to establish anti-vibration and hose

Thailand under joint venture company “Tokai Eastern Rubber (Thailand)” (TER). Currently EPG has

ing right and a 20% profit sharing of TER net profit.


sharing of 20% since Tokai Rubber Industry (TRI) own 25,000 of prefers stock, in which voting righ

sharing 30 times of common stock.

Tokai Eastern Rubber (Thailand) (TER) is the manufacturer and distributor of anti-vibration and sea horse for

automotive industry. Today TER distributes its products to well-known automotive manufacturer compa

has production base in Thailand as well as export some to Tokai Rubber Industry (TRI)

vibration manufacturer in South East Asian with production capacity of 120 million tons per year.

with TRI to establish production base in India.

Manufacturer & distributor rubber compound (Investing through Zeon Advance Polymix)

EPG Eastern Polymer Group has joined with Japanese company “Zeon Corporation Group” and “Toyota Tsusho

establish rubber compound production base in Thailand under Zeon Advance Polymix (ZAP) with a

cases such as corrosion test,

flammability test, freezing point test, and wind duration test under control of more than 14 material expertise and

in automotive industry (Investing through Tokkai Eastern

Tokai Rubber Industry (TRI), the

hose production base in

(TER). Currently EPG has both 20%


of prefers stock, in which voting right and profit

vibration and sea horse for

known automotive manufacturer company which

has production base in Thailand as well as export some to Tokai Rubber Industry (TRI) in Japan. TER is the

vibration manufacturer in South East Asian with production capacity of 120 million tons per year.

Manufacturer & distributor rubber compound (Investing through Zeon Advance Polymix)

Group” and “Toyota Tsusho

establish rubber compound production base in Thailand under Zeon Advance Polymix (ZAP) with a

ZAP is a synthetic rubber compound and natural rubber compound manufacturer and distributor. ZAP’s product

is widely used in various industries for both domestic and oversea countries. More than 70% of ZAP’s rubber

compound is used in automotive industry for producing anti-vibration and window and door seal rubber.

Currently ZAP is the one of the largest rubber compound producer in Thailand with production capacity of

47,000 tons per year

Revenue Structure

Revenue structure of the company for fiscal year (FY) 2012-2014 and 1H2015 (April 2014-Setptember 2014) is

illustrated in the table below

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

THB mm % THB mm % THB mm % THB mm %

Aeroflex 1,946.4 34.6 2,043.9 30.3 2,133.6 32.4 1,156.7 33.4

Aeroklas 1,961.8 34.9 2,590.2 38.4 2,281.5 34.6 1,214.9 35.1

Eastern Polypack 1,719.6 30.6 2,116.1 31.3 2,176.7 33.0 1,093.7 31.6

Total 5,627.8 100.0 6,750.2 100.0 6,591.8 100.0 3,465.4 100.0

Major source of EPG’s revenue comes from 3 production businesses (1) Insulation business “Aeroflex” (AFC) (2) Car

Accessories business “Aeroklas” (ARK) and (3) Plastic Packaging Business “Eastern Polypack” (EPP). In FY 2014

insulation business, car accessories business and plastic packaging business contributes 32.4%, 34.6% and 33.0% of

total revenue respectively.

Apart from classification revenue structure of EPG by operating business, the table below displays revenue structure

of the company in FY 2012-2014 and 1H2015 classifies by SET sector.

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

THB

mm %

THB

mm %

THB

mm %

THB

mm %

Construction Material

- Insulation Business (Operating

by AFC)

1,946.4 34.6 2,043.9 30.3 2,133.6 32.48 1,156.7 33.4

- Related business (Operating

by ARK)

87.0 1.5 117.0 1.7 98.0 1.5 27.5 0.8

Insulation Business and related

business 2,033.4 36.1 2,160.9 32.0 2,231.6 33.9 1,184.3 34.2

Automotive

Car Accessories Business

(Operating by ARK)

1,874.8 33.3 2,473.2 36.6 2,183.5 33.1 1,187.4 34.3

Packaging

Plastic packaging Business

(Operating by ARK)

1,719.6 30.6 2,116.1 31.3 2,176.7 33.0 1,093.7 31.6

Total Revenue 5,627.8 100.0 6,750.2 100.0 6,591.8 100.0 3,465.4 100.0

In FY 2014 the company had revenue contribution from construction material business and related business the most

at 33.4%, following by automotive business and packaging business at 33.1% and 33.0% respectively

In addition, the company also has profit sharing from Joint Venture Company, which is summarized in the table below

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

THB mm THB mm THB mm THB mm

Tokai Eastern Industry (Thailand)

(TER) 198.9 308.9 230.9 74.1

Zeon Advance Polymix (ZAP) 8.6 24.6 60.1 23.2

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

THB mm THB mm THB mm THB mm

AFC’s joint ventures company 3.5 3.7 14.7 2.3

Total Profit Sharing 211.0 337.2 305.7 99.6

During FY 2012-2014 and 1H2015, the Company had consistency profit sharing from TER and ZAP equal to THB

211.0 mm - THB 337.2 mm and THB 99.6 mm respectively or over 30% of net profit from TER and over 20% of net

profit from ZAP. However there are only a few of profit sharing from AFC’s joint ventures company since they need

cash to fund their expansion plan in oversea countries.

Gross Profit Structure

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

THB mm % THB mm % THB mm % THB

mm %

Insulation Business 686.1 43.5 580.0 31.8 771.3 44.8 422.7 47.6

Car Accessories Business 570.8 36.2 715.1 39.2 497.0 28.9 265.6 29.9

Plastic Packaging Business 322.0 20.4 531.2 29.1 453.3 26.3 199.2 22.4

Total Gross Profit 1,579.0 100.0 1,826.4 100.0 1,721.6 100.0 887.6 100.0

FY in 2012, 2013, 2014, and 1H2015, the company had gross profit of THB 1,579.0 mmm, THB 1,826.4 mm THB

1,721.6 mm and THB 887.6 mm respectively. The Company has gross profit contribution from insulation business the

most which is equal to 43.5%, 31.8%, 44.8% and 47.6% in 2012, 2013, 2014, and 1H2015. However, only in FY

2013 car accessories business contributed the largest gross profit to the Company at 39.2% of total gross profit

because of the first car policy. For gross profit contribution from plastic packaging business in 2012, 2013, 2014, and

1H2015 equal to 20.4%, 29.1%, 26.3% and 22.4% respectively

Target Customer Groups

1. Thermal insulator business ( Aeroflex Co Ltd. and other subsidiaries)

Clients in insulator business are classified into three groups (1) wholesalers, (2) contractors, and (3) international

clients.

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

% % % %

Domestic

- wholesalers 24.6 18.3 17.6 16.9

- contractors 14.1 15.9 13.1 12.2

Total domestic 38.7 34.2 30.7 29.1

International

-international clients 61.3 65.8 69.3 70.9

Total 100.0 100.0 100.0 100.0

Wholesalers

AFC’s revenue mainly derives from wholesalers. Between 2012 to 1H2015, AFC has recognized revenue from

wholesale group approximately 16.9%-24.6%. Normally AFC will distribute its product through selling agents in

each region to the end users, which most of selling agents are in air-conditioning business. Currently there are

over 100 local wholesalers.

Contractors

Between 2012 to 1H2015, contractors have shared more than 12.2%-15.9% of AFC total revenue. Most of

AFC’s clients are prominent contractors in Thailand, namely, Italiain-thai Development Plc.,

CH-Karnchang Plc., Sino-Thai Engineering & Construction Public Company Limited, Power Line Engineering

Public Company Limited, EMC Public Company Limited, Jardine Schindler (Thailand) and Taikisha (Thailand)

International Clients

There are more than 78 selling agents across 100 countries around the world representing AFC. The Company

does not allow agents to compete among themselves to avoid price competition among each agent. AFC

supports its agents in various ways including marketing and technology. Nowadays revenue from international

clients takes up 61.3%-70.9% of total revenue.

Moreover to better serve demand of the customer, AFC had considered the alternative to run the business

through selling the production license to some agents, which currently there are two production bases in form of

licensing in both Russia and Switzerland.

2. Auto-parts business

Clients in auto parts business are classified into four groups (1) Automotive Original Design Manufacturer (ODM),

(2) Automotive Original Equipment Manufacturer (OEM), (3) Replacement Equipment Manufacturer (REM), and

(4) international clients

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

% % % %

Domestic

ODM 26.3 33.1 32.1 24.7

OEM 0.5 0.7 0.6 0.5

REM 32.8 25.4 22.1 21.1

International clients

Export and international

clients

40.4 40.8 45.2 53.7

Total 100.0 100.0 100.0 100.0

ODM (Original Design Manufacturer)

In ODM, ARK designs and produces auto parts under clients’ brands. Ford, Toyota, Isuzu, Mazda, Mitsubishi, and

Volkswagen are ARK major clients.

Revenue recognition relies on the life cycle of each car model, 5-7 years, creating stable income. Minimum risk is

involved in ODM since ARK has the rights over the design, making the company a sole producer of each specific part.

Between 2012 to 1H2015, 24.7%-33.1% of total revenue is ODM.

OEM (Original Equipment Manufacturer)

There are numbers of OEMs in Thailand, creating intense competition in the market. Clients commonly have contracts

with more than one OEM at a time to diversify their risk. Thus, the profit margin from this type of customer group is

minimal. However ARK‘s revenue from OEM is quite small, in between 2012 to 1H2015, OEM occupied only 0.5%-0.7%

of total revenue.

REM (Replacement Equipment Manufacturer)

In REM, ARK designs and produces under its own brand. The company distributes their products to retailers, car

showrooms and auto parts which currently there are over 300 local retailers and 100 international retailers cooperating

with ARK. One of the advantages of REM is about creating brand awareness. Clients who purchase products from

retailers can later place orders directly on ARK. Between 2012 to 1H2015, 21.1%-32.8% of total revenue is REM.

International Clients

ARK exports their products to international agents. Having significant portion of international revenue, 40.4%-53.75% of

total revenue, diversifies domestic risks.

3. Packaging business

During 2012 to 1H2015, Eastern Polypack’s (EPP) clients can be classified into three groups: (1) wholesalers, (2)

Made-to-order clients, and (3) international clients.

FY2012

(Apr 2011 – Mar

2012)

FY2013

(Apr 2012 – Mar

2013)

FY2014

(Apr 2013 – Mar

2014)

1H2015

(Apr 2014 – Sept

2014)

% % % %

Domestic

Wholesalers 54.9 53.9 54.5 53.9

Made-to-order (ODM) 31.3 32.6 32.5 31.2

International

Exports 13.8 13.5 13.0 14.9

Total 100.0 100.0 100.0 100.0

Wholesalers

EPP merchandise their products to over 200 wholesalers across Thailand, which then distribute to local retails

such as coffee shops, bakery, restaurants, and etc. Between 2012 to 1H 2015, 53.9%-54.9% of total revenue is

from wholesalers. Moreover, EPP places their products in modern trade entity such as Makro.

Industrial clients

World’s leading f&b companies, namely, Mcdonald, KFC, Coca-Cola, Pepsi and Thai leading’s brand such as

YumYum, MaMa, S&P, Mk, and other prominent companies, all purchases packaging goods from EPP.

Between 2012 to 1H2015, Industrial clients occupied more than 31.2% - 32.6% of total revenue.

International clients

EPP’s major international client is one of the largest coffee franchises in Korea. Up to 13.0%-14.9% of total

revenue is from international clients

Distribution Channels

1. Insulation Business (Operates by Aeroflex Company Limited and its associates and subsidiaries)

The distribution channels for insulation business can be divided into 2 principal categories including 1)

Domestic customers and 2.) International customers

FY2012

(Apr 11 – Mar

12)

FY2013

(Apr 12 – Mar

13)

FY2014

(Apr 13 – Mar

14)

1st Half FY2015

(Apr 14 – Sep

14)

% % % %

Domestic 38.7 34.2 30.7 29.1

International 61.3 65.8 69.3 70.9

Total 100.0 100.0 100.0 100.0

2. Car Accessories Business (Operates by Aeroklas Company Limited and its subsidiaries)

The distribution channels for car accessories business can be divided into 2 principal categories

including 1) Domestic customers and 2.) International customers

FY2012

(Apr 11 – Mar

12)

FY2013

(Apr 12 – Mar

13)

FY2014

(Apr 13 – Mar

14)

1st Half FY2015

(Apr 14 – Sep

14)

% % % %

Domestic 59.6 59.2 54.8 46.3

Exports and International 40.4 40.8 45.2 53.7

Total 100.0 100.0 100.0 100.0

3. Plastic Packaging Business (Operates by Eastern Polypack Company Limited)

The distribution channels for plastic packaging business can be divided into 2 principal categories

including 1) Domestic customers and 2.) International customers

FY2012

(Apr 11 – Mar

12)

FY2013

(Apr 12 – Mar

13)

FY2014

(Apr 13 – Mar

14)

1st Half FY2015

(Apr 14 – Sep

14)

% % % %

Domestic 86.2 86.5 87 85.1

International 13.8 13.5 13.0 14.9

Total 100.0 100.0 100.0 100.0

Sources of Supply

1. Insulation Business (Operates by Aeroflex Company Limited and its associates and subsidiaries)

Compound

Compound used in production of Aeroflex’s insulator composes of various types of chemical, which

mainly consist of EPDM or Ethylene Propylene Diene Methylene as a main component for over 30 to 32

percent. The EPDM is produced from Aeroflex’s own mixing formula which mostly composes of

synthetic rubber, additives, fire retardant chemicals, and other chemicals. As for the procurement of

such substances, Aeroflex purchase from various suppliers for example Mitsui Chemical and Albaman.

In FY2012 – FY2014, Aeroflex did not purchase from any single supplier more than 30 percent of total

cost of compound.

Other than the above mentioned compound, the production of Aeroflex’s insulator also needs other

essential compound, for example, blowing agent. For procurement of blowing agent, Aeroflex will

purchase in the amount that is enough for production of no longer than 3 months. However, if the

blowing agent price increases, Aeroflex may consider using other compound or other supplier instead.

In this regards, material or supplier switching will not affect the essential properties of the insulator.

As for procurement of raw materials during FY2012 – FY2014, Aeroflex purchased raw material from

overseas suppliers and local suppliers for 60 – 70 percent and 30 – 40 percent, respectively, exposing

Aeroflex to exchange rate risk. However, as the Company has proportion of raw material sourcing

related expenses in foreign currency that is in line with revenues in foreign currency, thus the

Company’s exposure to exchange rate risk is not as much.

Other products used in conjunction with insulators or in installation of insulators

As Aeroflex does not have policy to produce products in this category itself, therefore in order to provide

high quality products for consumers, Aeroflex purchases or orders from other manufacturers who have

expertise in this kind of products. In this regards, Aeroflex will set the standard and quality of the

products. In each purchase, Aeroflex has policy to order the stock for sales period of 1 – 2 months.


Plastic resin pellets

Being the main raw materials in production of Aeroklas’s products, Aeroklas uses various types of

plastic resin pellets including HDPE, ABS, PC, PC/ABS and DCPD in manufacturing of its products.

During FY 2012 – FY 2014 and 1st half of FY 2015 (Apr. – Sep 2014), Aeroklas incurred cost of plastic

resin pallets and additives at 41 – 44 percent of production cost. Therefore, in order to effectively

manage the cost, Aeroklas explores and surveys the raw material price from worldwide before every

purchase. As a result, at present, Aeroklas orders plastic resin pellets from overseas and local

suppliers by considering from quality, price and delivery. In this regards, the raw materials for

manufacturing of bed liner may be sourced from suppliers in Asian countries when pricing is

competitive. At the same time, Aeroklas purchases from many local suppliers, for example, PTT Global

Chemical Plc., IRPC Plc., Siam Cement Group Plc., Bayer Co.,Ltd., and some other importers of plastic

resin pellets.

However, as plastic resin pellet is derived from oil refinery, thus its production cost is based on global

crude oil price. Therefore, if the global crude oil price increases, Aeroklas will be inevitably affected.

Furthermore, as there is no financial instrument in Thailand that can protect risk from volatility of plastic

resin price presently, thus Aeroklas exposes to this risk inevitably. Nevertheless, although Aeroklas

cannot control all of the production cost, Aeroklas can manage the risk by price adjustment or passing-

through the raw material cost to its customers.

Other components

Aeroklas purchases other components, for example, hook, polymer-alloy, mirror, choke and other

installation sets to be uses as components in its products. During FY 2012 – FY 2014 and 1st half of

FY 2015 (Apr. – Sep 2014), Aeroklas incurred cost of purchasing other components at 13.0 – 15.0

percent of production cost. In this regards, Aeroklas will purchase other components from

manufacturers or suppliers who have expertise and are able to deliver products at price and quality that

Aeroklas requires.

Nevertheless, there may be some components that Aeroklas purchases from single supplier during

some period because this particular supplier offers better business deal than others. However, Aeroklas

does not rely on this particular supplier. If the supplier breaches the agreement, Aeroklas is able to

source raw materials or products from other suppliers in a timely manner.

3. Plastic Packaging Business (Operates by Eastern Polypack Company Limited)

Plastic resin pellets

Being the main raw materials in production of Eastern Polypack’s products, various types of plastic resin

pellets are used in manufacturing of its products, both plastic packaging and plastic sheet. During FY

2012 – FY 2014 and 1st half of FY 2015 (Apr. – Sep 2014), Eastern Polypack incurred cost of plastic

resin pellets at approximately 55 – 62 percent of production cost. Plastic resin pellets that Eastern

Polypack uses in production mostly are PP, PS, PET and ABS. As for procurement of plastic resin

pellets, Eastern Polypack will consider the purchase itself from both overseas and local suppliers,

depending on price, quality and suitability of each type of plastic resin. During FY 2012 – FY 2014,

Eastern Polypack mainly purchased plastic resin pellets from domestic, in which Eastern Polypack did

not purchase from any single supplier more than 30 percent of its total cost of raw materials. In order

to have bargaining power, Eastern Polypack will decide on quantity of plastic resin pellets in each

purchase by considering customers’ orders and forecasted amount of products to be sold in the future.

Since plastic resin pallet price fluctuates with crude oil price, Eastern Polypack has exposure to risk of

price volatility of its main raw material. In this regards, Eastern Polypack has policy to hedge the risk

from plastic resin pellet price fluctuation. As for industrial customers, the contract will have clause that

allows Eastern Polypack to adjust the selling price when raw material cost increases more than 10

percent. In addition, the purchase of plastic resin pellets in bulk will result in better price or lower price

than market price in general. As for pricing of products for distribution through various channels of

Eastern Polypack itself, price adjustment is more difficult because Eastern Polypack needs to consider

market mechanism and competitors before adjusting the price each time. Therefore, Eastern Polypack

has set policy to consider sourcing or using other raw material that has lower price as a substitution

when the price of original raw material increases. In this regards, the switching of raw material will not

affect the essential properties of the product. Nevertheless, as Eastern Polypack does not have policy

in purchasing large quantity of raw materials to be kept as inventory, therefore the exposure to the risk

of raw material price fluctuation is not significant. In this regards, Eastern Polypack has policy to keep

raw materials in inventory not more than 45 days.

Other products

Eastern Polypack purchases paper cups and other related products such as straws and other plastic

cutlery for selling to its customers. In this regards, Eastern Polypack purchases good quality paper

cups from APT, a company under EPG located in China. As for other products, Eastern Polypack will

purchase from manufacturers or suppliers who have expertise in that particular product and are able to

deliver quality products at suitable price. In this regards, because these products are just a

complementary product to the main products of Eastern Polypack, therefore there is no policy to

establish its own manufacturing plant for these products. During FY 2012 – FY 2014, Eastern Polypack

did not purchase from any single supplier more than 30 percent of its total cost of purchase of other

products, therefore Eastern Polypack does not have risk of having too much dependency on any single

vendor of other products. In addition, in each purchase, Eastern Polypack has policy to order in a

quantity that is enough for selling in period of not more than 60 days only, in order to maintain financial

liquidity and prevent inventory shortage.

Competition

1. Insulation Business (Operates by Aeroflex Company Limited and its associates and subsidiaries),

the Group’s Core Business

At present, there are 3 key operators in “Elastometric Thermal Insulation” industry including 1) Armacell

2) K-Flex and 3) Aeroflex. In this regards, Aeroflex is considered to be only major EPDM insulator

operator in the world who can manufacture and sell EPDM insulator that can compete in the global

market. Nevertheless, market share of Aeroflex in the world market is still relatively low at

approximately 10 percent because NBR insulators which are produced by major players, such as

Armacell and K-Flex, are widely known in Europe and America. In addition, the market expansion of

insulators which are bulky and require space in transportation, resulting in relatively high logistic cost, an

obstacle in distribution of products of this type. As a result, expansion of manufacturing base is very

essential for market expansion in this business.

Although prefoam tube and sheet technology of Aeroflex can mitigate the above mentioned problem, the

market expansion of Aeroflex’s products still require both marketing strategy and manufacturing base

expansion to be key drivers in increasing Aeroflex’s share in the world market. In this regards, at

present, Aeroflex has invested in research and development in order to bring compound mixtures and

prefoam tube and sheet into production in other countries worldwide in the future.

Armacell K-Flex Aeroflex (AFC)

Number of

Manufacturing Sites 17 9 6 + 2 Licensing

Manufacturing Site’s

Location

- Asia Australia, China (2 sites),

India, Saudi Arabia, South

China, India, Malaysia and

United Arab Emirates

China (2 sites), India and

Thailand

Armacell K-Flex Aeroflex (AFC)

Korea and Thailand

- North America USA (2 sites) - อเมรกิา

- South America Brasil

- -

- Europe Belgium, England,

Germany, Italy, Poland,

Spain and Switzerland

Italy, Poland, Russia and

Turkey

Germany, Russia and

Switzerland

Estimated Capacity

(Tons/Year)

80,000** 40,000

** 29,000

*

2013 Estimated Market

Share (%)

40.0 15.0 10.0***

Source: Strategy Department of the Company and Websites of Other Operators

Remark: * Combined capacity of subsidiaries and associates

** Estimated capacity from total sales

*** Total market share including market share of associates

Presently, Armacell has the highest number of manufacturing sites of 17 manufacturing sites in India,

China, Germany, Switzerland, USA, South Korea, Thailand, Saudi Arabia, Poland, England, Australia,

Belgium, Brazil, Italy and Spain. As a result, Armacell has the highest world market share at 40

percent. K-Flex, who has the second highest world market share at 15 percent, has in total 9

manufacturing bases in Italy, China, India, Malaysia, Turkey, Poland, Russia and United Arab Emirates.

However, market share of these two companies is projected to decrease because both companies

produce NBR insulators, therefore there is relatively great price competition especially in markets that

are highly sensitive to price such as China and India.

As for Aeroflex, its market share has steadily increased as a result of unique product quality and

continuing expansion of manufacturing base. In this regards, the market share of Aeroflex increased

from 8 percent in 2007 to 10 percent in 2013. Furthermore, due to high quality of Aeroflex’s product,

many of the world leading buildings such as Fukushima Daiichi Nuclear Power Plant, Burj Khalifa, and

Suvarnabhumi Airport selected Aeroflex’s insulator. In addition, the trend of focusing more in health

wellbeing and safety in fire accident has positively affected Aeroflex’s product, which is well qualified in

the mentioned field, has tendency to have higher market share.


The automotive industry structure consists of various types of operator which can be divided into 4

categories including (1) automotive manufacturer (2) automotive parts manufacturer (3) automotive

accessories manufacturer and (4) distributor, in which all operators are driven by car demand.

By considering the structure of the automotive industry as mentioned above, Aeroklas is considered to

be in category of automotive parts manufacturer and automotive accessories manufacturer.

Automotive Parts Manufacturer

Automotive parts manufacturer for passenger and commercial car is a producer of component parts for

automotive manufacturer. Most of the automotive parts manufacturers will manufacture various parts of

automotive according to design or model set by the automotive manufacturer. In addition, most of the

automotive parts manufacturers will have manufacturing base nearby automotive manufacturer’s

manufacturing site in order to save logistic cost and increase flexibility in production of automotive

manufacturer. In this regards, automotive parts manufacturer can be divided into two forms as follows.

First Tier Automotive Parts Manufacturer

This type of automotive parts manufacturer produces automotive parts and directly delivers to automotive

company to assemble into the car. Most of producers of this type are big company with high production

capacity and usually will provide production service of all parts.

Second Tier Automotive Parts Manufacturer

This type of automotive parts manufacturer produces automotive parts for the first tier automotive parts

manufacturer, in which parts that is produced by this kind of manufacturer are less complex than those

produced by the first tier manufacturer. In addition, parts produced by the second tier manufacturer

may not be a finished part and therefore needs to be assembled further by the first tier manufacturer

before delivery to the automakers.

Automotive Accessories Manufacturer

Automotive accessories manufacturer for passenger and commercial car are different. The automotive

accessories manufacturer for passenger car produces parts that will enhance the beauty or performance

of the car, for example, spoiler, front bumper and mag wheel.

On the other hand, the automotive accessories manufacturer for commercial car produces parts that will

enhance the performance or increase application features of the commercial car, for example, bed liner,

canopy and deck cover.

The automotive accessories manufacturer consists of 6 major manufacturers, who compete among

themselves with technology and

automotive accessories manufacturer itself, without having design or blueprint from the automotive

company. In this regards, most of the automotive accessories manufacturers will produ

parts including bed liner, deck cover, canopy and side step, which there are only Aeroklas and Maxliner

that can produce all of 4 types.

Operator

Country

Aeroklas

Thailand

Vandapac

Thailand

EGR

Australia

Pro-Form

New Zealand

International Liner

USA

PandaForm

USA

Source: Operators’ Websites

3. Plastic Packaging Business

If we consider the usage of plastic cup in Asia, we can see that there is a correlation between the uses

of premium plastic cup to the income of the people in that country. As indicated in the diagram below


themselves with technology and design of external appearance. The design will be carried out by the


company. In this regards, most of the automotive accessories manufacturers will produ


that can produce all of 4 types.

Parts and Accessories for Commercial Car

Bed Liner Deck Cover Canopy Side Step

� � � �

� � � �

- � � -

New Zealand � � - -

� - - -

� - - -

(Operates by Eastern Polypack Company Limited




design of external appearance. The design will be carried out by the


company. In this regards, most of the automotive accessories manufacturers will produce 4 important


Side Step Others

� �

� �

- �

- �

- -

- �

)



that most of the countries, that have higher beverage consumption per Capita and GDP per Capita,

usually use premium plastic cup. This correlation can be seen in Japan, South Korea, Taiwan,

Singapore and Hong Kong. Since there are many world renowned food and beverage stores who need

to maintain a premium appearance located in these countries therefore, the majority of these restaurant

and coffee shop choose to use a premium plastic cup rather than a general plastic cup. The majority of

these premium plastic cups are imported from nearby countries rather than producing it themselves

domestically, since the cost of the wages in those countries is not worthwhile to invest in premium

plastic cup manufacturing facility.

Relationship between GDP per Capita and Beverage Consumption per Capita in 2013

Source: Research department of the Company

In developing countries such as Thailand, Malaysia and China there is an increasing use of premium

and general plastic cup, which the market share of these two type of plastic cup are fairly close. The

consumption of premium plastic cup is driven by the higher purchasing power of the people in that

country as well as the popularity of the premium food and beverage store that is currently expanding

its outlet throughout those countries i.e. Starbucks, Coffee Bean and Coffee Club. These outlets

expansion of both local and international operators can create a high tendency for those operators to

use more premium plastic cup.

The procurement of these premium plastic cups depends on the production capability in each country.

In some country the food and beverage operators are able to procure premium plastic cup

Cambodia

MyanmarIndia

The Philippines

VietnamLao

Indonesia

Thailand

ChinaMalaysia

Taiwan

South KoreaHongkong

Japan

Singapore

GDP per Capita 2013

(USD)

Bev

erag

e C

on

sum

pti

on

per

Cap

ita

2013

(US

Dฯ

)

Countries that consume general

plastic cups

Countries that consume both premium

and general plastic cups

Countries that consume premium plastic cups

1,000 2,000 3,000 4,000 5,000 7,000 9,000 20,000 30,000 40,000 50,0000 60,000

0

50

100

150

200

250

300

350

550

750

950

1,150

1,350

1,550

11,000

domestically since the local operators have the capability to produce premium plastic cup i.e. Thailand

but for other countries, the food and beverage operators need to import premium plastic cup from

other nearby countries.

For the country that have relatively low GDP per Capita i.e. India, Indonesia, Philippine, Laos,

Cambodia, Vietnam and Myanmar, there is very limited growing popularity of premium food and

beverages operators that uses premium plastic cup. These developing countries still use a general

plastic cup. Nevertheless, these consumer behaviors are subject to change and with the expansion

within Asia, making these developing countries that consume general plastic cup have a higher

potential to consume premium plastic cup in the near future. The competitive landscape of this

industry consists of multiple small businesses which have limited production capacity and the premium

plastic cup which most of the country need to imported from the nearby countries.

Structure of Asian major manufacturer in food and beverage plastic packaging industry

Thermoforming Plastic Cup Producer in Asia, June 2014

Operator Country

Type of Plastic

PP PS GPPS PET

Eastern Polypack Thailand � � � �

Toyo Seikan Group Holdings (Tokan Kogyo) Japan � �

Honor Plastic Industrial Taiwan �

Greiner Packaging International The Philippines �

Kingfa Hongkong � �

Source: Company

Since premium plastic cup is in the industry that required advanced technology as well as high

technology machinery. Therefore, there is only a few numbers of major manufacturers since the

market size considered to be relatively small. In Asia there are a total of 5 key manufacturers which

consist of Eastern Polypack, Tokyo Group, Honor Plastic Industry, Greiner Packaging International and

Kingfa. These companies dominated 30% – 40% of the thermoforming plastic cup industry in which,

Eastern Polypack dominated 15% of the Asian market.

Thermoforming Plastic Cup and Injection Moulding Manufacturer in Thailand, June 2014

Operator Country

Type of Plastic

PP PS GPPS PET

Eastern Polypack Thailand � � � �

Thai Elephant Cup Thailand � �

Vandapac Thailand � � �

Srithai Superware (Injection Moulding) Thailand �

C.P. Packaging Industry (Injection Moulding) Thailand �

Source: Company

For the market in Thailand, the company predicted that all of the 5 major manufacturers of

Thermoforming and Injection Moulding will be 70% of the market share and for Eastern Polypack, it

will be the dominant player and gain 35% of the total marketing share in Thailand.

In this regards, Eastern Polypack is considered as the only major manufacturer in Asia that has the

ability to produce every form of plastic cup, since other manufacturers do not have the capability or

the production capacity to produce every form of plastic cup. In addition, major producer in each

country, especially high income countries, is facing with the problem that there is not enough

production capacity to export because of high domestic consumption. Currently, only Eastern

Ploypack Company is large enough to export every categories of its product.

Environmental Impact: None

Summary of Agreement

Joint Venture Agreement

Tokai Eastern Rubber (Thailand) Co., Ltd.

Board of directors and

company’s general

management and

administration

� Board of directors, who is responsible for general management of the company,

consists of 9 directors, in which each shareholder can send its representatives as

follows,

o Tokai Rubber Industries, Ltd. – 5 representatives

o Eastern Polymer Group Plc. – 2 representatives

o Sumipol Co., Ltd. – 1 representative

o Toyota Tsusho (Thailand) Co., Ltd. – 1 representative

� At least 7 directors are required to attend in each board of directors' meeting.

� Board of directors does not have authority to consider in every agenda, especially the

agenda that is important to operation of Tokai Eastern Rubber (Thailand) Co., Ltd.

This type of agenda requires approval from shareholders’ meeting. These important

agenda are including,

o Preparation of annual financial statements, appropriation of profit or loss and

considerations on dividends

o Approval of the annual budget

o Establishment or dissolution of manufacturing plant or affiliated company

o Purchase of land, plant, or any other assets with value higher than 5 millions

baht

o Transfer, sale, lease, or any other transaction that relates to land, plant, and

assets with value higher than 10 millions baht.

o Borrowing of amount more than 20 millions baht

o Decision to enter into important contract

Shareholders’ meeting � In each board of directors’ meeting, shareholders with combined shareholding of at

least 2/3 of total outstanding shares are required to attend the meeting.

� The approval of general meeting requires majority vote to approve these agenda,

except for important agenda, which is required approval from shareholders’ meeting of

at least 81 percent, as follows,

o Increase and reduction of capital

o Issuance of new shares in addition to common shares at the par value

o Amendment of the memorandum and articles of association

o The amalgamation with another company

o Dissolution of the company


� As for voting in the shareholders’ meeting, rights of common shareholders and

preferred shareholders are as following,

o Common shares – 1 voting rights per 1 share

o Preferred shares – 30 voting rights per 1 share

Restrictions on transfer

of shares

� In the event of trading of shares, delivery of shares, using shares as collateral or any

other transaction involving the company’s shares, there shall be letter to the board of

directors for notification and consent before proceeding.

� Price for trading of the company’s shares shall be determined by an independent

appraisal appointed by the board of directors.

� In the event that a shareholder wishes to sell the company’s shares, other shareholders

have the rights to buy such shares within 50 days. After a specified period, the

shareholder, who wishes to sell the shares, shall sell the shares to a third party.

� Tokai Rubber Industries, Ltd. and Eastern Polymer Group Plc. have the rights to trade

or transfer the company’s shares to the affiliates without having to pass restrictions on

transfer of shares.

Dividend policy � Dividends from the company’s profits will be allocated to preferred shareholders at

dividends per share amount that is equal to 30 times of dividends per share paid to

common shareholders. In the event of non-payment of dividends in any year, the

dividends shall not be carried forward to next year.

� Dividends shall be allocated to each shareholder within 60 days after shareholders’

meeting.

Termination and

amendment

� This agreement shall be immediately terminated when the government of Thailand or

any authority or authorized person cancels permission of place of business or any

operation of the company by any reason.

� Any amendment or addition to agreement must be unanimously approved by all

shareholders.

Zeon Advanced Polymix Co., Ltd.

Board of directors and

company’s general

management and

administration

� Board of directors, who is responsible for general management of the company,

consists of 7 directors, in which each shareholder can send its representatives as

follows,

o Zeon Corporation – 3 representatives

o Toyota Tsusho (Thailand) Co., Ltd. – 2 representatives

o Eastern Polymer Group Plc. – 2 representatives

� At least 61 percent of total directors are required to attend in each board of directors'

meeting.

� Board of directors does not have authority to consider in every agenda, especially the

agenda that is important to operation of Zeon Advance Polymix Co., Ltd. This type of

agenda requires approval from shareholders’ meeting. These important agenda are

including,


o Transfer, sale, or guarantee provision, or management of key business or key

assets

o The amalgamation with another company or investment in other company

o Establishment of branch, plant and affiliate


o Approval on transfer or sale of the company’s shares



o Preparation of annual financial statements, appropriation of profit or loss and

considerations on dividends


o Approval of the annual budget

o Capital increase through purchase of shares and payment of newly issued

shares of the company according to proportion of shares that the shareholder

holds.

Shareholders’ meeting � In each board of directors’ meeting, shareholders with combined shareholding of at

least 2/3 of total outstanding shares are required to attend the meeting.

� The approval of general meeting requires majority vote to approve these agenda,

except for important agenda, which is required approval from shareholders’ meeting of

at least 75 percent, as follows,

o Consideration of annual financial statements, appropriation of profit or loss,

dividends, reserves and unallocated amount of the company’s profit that have

not yet been paid as dividends


o The amalgamation with another company




� As for voting in the shareholders’ meeting, all common shares have equal voting

rights.

Restrictions on transfer

of shares

� Shareholder shall not sell, transfer, deliver, or use as collateral or engage in any

transaction involving the company’s shares.

� In the event that a shareholder wishes to sell the company’s shares, other shareholders

have the rights to buy such shares first. If more than one shareholder are interested in

buying the shares, the shares will be allcoated to each interested shareholder

according to proportion of existing shareholdings.

� In the event that transaction between shareholders cannot be agreed upon, the seller

can sell shares to a third party with consent of board of directors.

� Trading price of the company’s share shall be determined from the latest financial

statements of the company. In the case that the trading price cannot be agreed upon,

the trading price shall be determined by an independent appraisal which has been

agreed by seller and buyer.

Dividend policy � The company shall pay dividend not less than 20 percent of net profit. However, in the

event that the company incurs accumulated loss, no dividend shall be paid.

Termination and

amendment

� Any amendment or addition to agreement must be unanimously approved by all

shareholders.

Feasibility Study None

Management and Technical Assistance None

Future Project

The Company has policy to maintain leadership in every invested business by continuing research for new

products. The Company research budget is approximately 1.0% of its total revenue. In addition, the Company

shall continue expanding its business in other untapped area to strengthen its business. The details of

expansion in 2 – 3 years (fiscal year 2015 – 2017) shown below

Summary of the Company Investment Plan in 2 – 3 years (fiscal year 2015 – 2017)

Business Project

Investment Amount

(THB mm)

Investment Period

Insulation business Expansion of USA capacity THB 300 mm Fiscal year 2016

(Apr 15 – Mar 16)

Expansion of europe capacity THB 300 mm Fiscal year 2017

(Apr 16 – Mar 17)

Car accessory Distribution channel project THB 700 mm Fiscal year 2016

Business Project

Investment Amount

(THB mm)

Investment Period

business (Apr 15 – Mar 16)

Expansion of deck cover and

canopy capacity

THB 300 mm Fiscal year 2016

(Apr 15 – Mar 16)

Expansion of side step capacity THB 100 mm Fiscal year 2017

(Apr 16 – Mar 17)

Plastic container

business

Expansion of PET cup capacity THB 100 mm Fiscal year 2015

(Apr 14 – Mar 15)

Expansion of plastic sheet

capacity

THB 100 mm Fiscal year 2016

(Apr 15 – Mar 16)

Expansion of fully equiped PET

cup capacity

THB 400 - 500 mm Fiscal year 2017

(Apr 16 – Mar 17)

Related Party Transaction (“RPT”)

The Audit Committee no.5/2014 held on 15 August 2014 has considered the related party transactions of the Company in fisical year 2014 (April 2013 – March 2014)

and first half of fisical year 2015 (April – September 2015) with a discussion with managements and related juristic person. As the notes to audited financial statements

reviewed by the Audit Committee, RPT is under the Company’s normal business in accordance with the general business terms and on the arm’s length basis.

Moreover, there is no transfer of interests and benefits between the Company and conflict person. RPT for fiscal year 2014 and first half of fiscal year 2015 are as

follows;

Conflict Person

Juristic person/company who might have conflict of interest Nature of Business Relationship

Vitoorapakorn Group

- � Vitoorapakorn Group holds 100% share in the Company before offering

IPO shares to public, and after IPO Vitoorapakorn Group holds 75%

share in the Company

� Vitoorapakorn Group has 5 board seats in the Company including (1)

Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3) Chamnarn

Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Ekawat Vitoorapakorn

Vitoorapakorn Holding Co., Ltd.

(“Holding”)

Investing Business � Vitoorapakorn Group holds 100% share in the Holding

� Vitoorapakorn Group has 6 board seats in Holding including (1) Pawat

Vitoorapakorn (2) Teerawat Vitoorapakorn (3) Chamnarn Vitoorapakorn

(4) Chalieo Vitoorapakorn (5) Ea Vitoorapakorn and (6) Tanawat

Vitoorapakorn

Eastern Syntec Co., Ltd.

(“Syntec”)

Manufacture of other fabricated metal duct for

air venculation system and energy saving

lamp

� Vitoorapakorn Group holds 100% share directly and indirectly in Syntec

� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Syntec

including (1) Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3)

Chamnarn Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Ekawat

Vitoorapakorn


I.P.P. (Thailand) Co., Ltd.

(“IPP”)

Industrial estate business including property

for sale, space rental, utilities and other

services

� Vitoorapakorn Group holds 100% share directly and indirectly in IPP

� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in IPP



Vitoorapakorn

Hayakawa Eastern Rubber Co., Ltd. (“Hayakawa”) Kindergarden mat manufacturing business

� Vitoorapakorn Group holds 35% share directly and indirectly in

Hayakawa

� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in

Hayakawa ( Chamnarn Vitoorapakorn)

� In addition, Mr. Charin Varintaraporn, management of the Company, is

the board member of Hayakawa

Abric Eastern International Co., Ltd. (“Abric”) Metal and plastic safty seal manufacturing

business

� Vitoorapakorn Group holds 25% share directly and indirectly in Abric

� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Abric



Vitoorapakorn

Dynamic Eastern Garment Co., Ltd.

(“Dynamic”)

Leather and garment business � Vitoorapakorn Group holds 74% share directly and indirectly in

Dynammic

� As of 31 March 2014, Vitoorapakorn Group has 2 board seats in

Dynamic including (1) Ratiporn Chaiyangyuen and (2) Chalieo

Vitoorapakorn

Patton Aero Co., Ltd.

(“Patton”)

Aircondition manufacturing business

� Vitoorapakorn Group holds 40% share directly and indirectly in

Dynammic


Dynamic including (1) Pawat Vitoorapakorn and (2) Chalieo

Vitoorapakorn


Siam Inter Air Supply Co., Ltd. (“Siam Inter”) Aircondition manufacturing business

� Vitoorapakorn Group holds 40% share directly and indirectly in Siam

Inter

� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in Siam

Inter (Ratiporn Vitoorapakorn)

Four-S (2007) Co., Ltd.

(“Four-S”)

Office building space rental business and

hostel business

� Vitoorapakorn Group holds 100% share directly and indirectly in Four-S

� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Four-S


Chamnarn Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Eakwat

Vitoorapakorn

Best Architechtural Lighting Co., Ltd. (“Best”)

Lighting and equipment business � Vitoorapakorn Group holds 40% share directly and indirectly in Best

� As of 31 March 2014, Vitoorapakorn Group has 3 board seats in Best

including (1) Naowarat Vitoorapakorn (2) Kanyarat Vitoorapakorn and (3)

Rungravee Vitoorapakorn

B.N.C.-1 Partnership

(“BNC.1”)

Land building and office rental business � BNC.1 was set up by Vitoorapakorn Group

BNC. 4 Partnership

(“BNC. 4”)

Land building and office rental business � BNC.4 was set up by Vitoorapakorn Group

Group of Person T & C Land and House (“T&C”)

Group of Person P & C Land and House (“P&C”)

Group of Person PRV (“PRV”)

Land building and office rental business � T&C, P&C and PRV were set up by Vitoorapakorn Group


FARAERO OTO, SANTIC A.S.

(“Faraero”)

Van liner manufacturing business in Turkey � Vitoorapakorn Group holds 40% share directly and indirectly in Faraero


Faraero including (Ekawat Vitoorapakorn)

Siam BR Service Co., Ltd.

(“Siam BR”)

Airconidtion business including both sale and

repairing

� Vitoorapakorn Group holds 51% share directly and indirectly in Siam BR

� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in Siam

BR (Ratiporn Vitoorapakorn)

Eastern Polytech Co., Ltd.

(“EPT”)

Metal and plastic profile manufacturing

business

(Discontinue business after the flooding in

2012)

� Vitoorapakorn Group holds 100% share in the EPT

� Vitoorapakorn Group has 6 board seats in EPT including (1) Pawat

Vitoorapakorn (2) Teerawat Vitoorapakorn (3) Chamnarn Vitoorapakorn

(4) Chalieo Vitoorapakorn (5) Ekwat Vitoorapakorn and (6) Tanawat

Vitoorapakorn

All-outt Co., Ltd.

(“All-outt”)

Learning center business including physical,

and social, and trading hair related product

business

� Vitoorapakorn Group holds 88.25% share directly and indirectly in Best

� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in Best

including (Supawadee Vitoorapakorn)

Sanki Eastern (Thailand) Co., Ltd. (“Sanki”) Manufacturing parts for camera and lighting

system business

� Vitoorapakorn Group holds 30% share directly and indirectly in Sanki

� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Sanki

including (1) Pawat Vitoorapakorn and (2) Chamnarn Vitoorapakorn

Details of RPT of fisical year 2014 (April 2013 – March 2014) and first half of fisical year 2015 (April – September 2015)

Unit: THB mm

Details of the Transaction

Transaction value

Opinion of Audit Committee Fisical year

2014

(Apr13–Mar 14)

half of fisical

year 2015

(Apr – Sep 15)

Revenue 131.908 15.227

1. Service and consultation revenue

1.1. IT service revenue from Syntec

1.2. Consultation revenue from Syntec

1.3. Utilities revenue from IPP

1.4. Service revenue from Abric, Patton, Syntec, Sanki, Best and

Hayakawa

4.776 2.419 Transactions is appropriated as the Company has no impact to its operation

from providing such services and having income higher than its expense

2. Revenue from space rental

2.1. Office space rental revenue from Abric

0.135 0.090 The Company rent 20. sq.m. office to Abric at 750 THB/sq.m./month which is

not less than rental rate in nearby location of 700 THB/sq.m./month

3. Revenue from selling finish goods

3.1. Seling insulator to Syntec, IPP, Hayakawa, Patton, Siam Inter,

Four-S, and EPT

3.2. Seling plastic packaging to Syntec and IPP

3.3. Seling plastic sheet to Faraero

17.437 9.779 Transactions are done under the general business terms and on the arm’s

length basis with the price not less than other customers

4. Revenue of other goods

4.1. Selling consumable goods to Syntec

4.2. Selling papers boxes to Abric

106.639 2.939 Transactions are done under the general business terms and on the arm’s

length basis at the same selling price as other customers


Transaction value


2014

(Apr13–Mar 14)

half of fisical

year 2015

(Apr – Sep 15)

4.3. Selling assets to Faraero, All-outt and IPP

4.4. Selling Faraero shares to EPT

4.5. Selling boat to IPP, Holding, Vitoorapakorn Group

5. Other Revenue

5.1. Management revenue from IPP

5.2. Interest revenue from Holding

2.921 - Transactions are done under the general business terms and on the arm’s

length basis at the same selling price as other customers. In addition, the

Company has adequate resource to complete the transactions without impact

to the Company’s operation.

Expense 175.221 76.084

1. Rental expense (Land, building, and equipment)

1.1. Space rental expense paid to Syntec and IPP

1.2. Space rental expense paid to BNC1., BNC 4., T&C, P&T, and

PRV

14.583 7.292 The Company rent land building and equipment from Syntec, IPP, to BNC1.,

BNC 4., T&C, P&T, and PRV for their operation. The transactions are ingregal

to the Company’s opereation. The rental rates are on the arm length basis

and closed to market rate and nearby location rental rate

2. Rental expense (Vehicle)

2.1. Truck rental expense paid to Syntec

2.2. Vehicle rental expense paid to IPP

19.107 3.825 The Company rents truck and other vehicles for operation, as department of

land transport does not allow the Company to buy addition trucks. However

the rental rates are on the arm length’s basis and less than other truck

providers


Transaction value


2014

(Apr13–Mar 14)

half of fisical

year 2015

(Apr – Sep 15)

3. Uilities and other expenses

3.1. Utilities expense paid to IPP

3.2. Other expense paid to IPP

29.293 13.503 The Company and its subsidiaries have factories located in IPP so the

Company and subsidiaries required to use utilizes in industrial estate which

provided by IPP. In addition, the rates are not higher than market rate.

4. Finished goods expense

4.1. Finished goods and raw materials expense paid to Syntec,

Abric, Dynamic and EPT

36.309 21.887 Buying finished goods and raw materials are considered as the normal

operating business on the arm length basis. The price is not higher than the

rate that Syntec, Abric, Dynamic and EPT charged others

5. Expense for land building and equipment

5.1. Expense of buying vehicles from IPP

5.2. Expense of buying equipment from Siam Inter

5.3. Expense of buying assets from EPT

36.309 21.887 The Company and subsidiaries required to acquire those assets from conflict

persons for operation as the price is appropriated and is the same rate as the

market rate

6. Other Expense

6.1. Other expense paid to Syntec

6.2. Uniform expense paid to Dynamics

6.3. Repair expense paid to Siam Inter

6.4. Hostel rental expense paid to Four-S

6.5. Maintenance expense paid to Siam BR

6.6. Other expense paid to Hayakawa

6.7. Interest expense paid to Holding and Vitoorapakorn Group

22.154 8.597 Other expense such as uniform, maintenance, hostel rental, interest expense

and service expense are done at appropriated rate which does not higher

than market rate.

Risk Factors

1. Operational Risk

1.1.1 Risk related to the Company

Risk of procurement and fluctuation of raw materials

Plastic including syntetic rubber (“polymer”) is the major cost of the Company for operation. In fiscal

year 2014, Aeroflex, Aeroklas, and Eastern Polypack’ polymer cost is 30% – 32%, 41% - 44%, and

55% - 62% of total operational cost. In addition, polymer cost shares 22% and 40% of total cost of

TER and ZAP respectively. Polymer shares the largest portion of the Company’s cost. If the Company

cannot procure sufficient amount of polymer, it may cease its operation.

However, the Company takes this risk into consideration by having conservative risk mitigation policy.

In term of volume, the Company maintains good relationship with all of the suppliers and diversifies

risk by using global sourcing through 40 suppliers in local and overseas.

In term of price voluntarily, the Company could manage price risk by pass through mechanism to the

customers, since the contract secured with the customer partly allowing the Company to adjust price

according to polymer price. In addition, the Company could switch materials or using other materials to

reduce cost to maintain profit margin.

Risk from changing technology

Since the Company operates plastic conversion business by using mixing and compounding,

extruding, injection, thermal forming, blow molding and reaction injection molding (R.I.M.), if new

technology invented by competitors, the Company might lose competition advantage. In addition, the

Company could not adapt to the new technology on time, it will cease the Company’s operation.

However the Company takes this risk into consideration by investing in EPG Innovation Center Co.,

Ltd. (“EIC”) to research and focus on the new products for the Company. In addition, EIC is fully

equipped and considered one of the most recent technology research centers in South East Asia. In

addition, EIC also hires highly experience researchers to join EIC for developing products.

Risk of in the event of an emergency, accident and natural disaster in relation to the factory or

the machine of the Company

Factory and machinery are integral parts for operating core business of the Company, the subsidiary

and the associate companies. In the case of emergency, accident or natural disaster take place and

damage the factories including machinery, will cause the Company, subsidiary and associate

companies business interruption resulting in poor performance and forgone some of important

customers. Since these customers require new suppliers to continue operating their business without

depending only on the Company and to taking back these customers might not be possible. In

addition, repairing or investing in the new machinery and factory would require large amount of capital

expenditure to continue the Company’s business.

However, the subsidiary and associate company take into consideration of this risk as taking place of

these events would cause major damage to the Company, so the Company has protected this risk by

entering into insurance contact for the event of accident, disaster and natural disaster.

Risk from the expiring patents

Currently the Company’s revenue mainly comes from the patterns accounting for more than 30% of

total core revenue. The Company products or revenue are protecting by the law from the patterns

which competitors cannot copy and duplicate. However, once these patents expire, the protection from

law will be uplifted resulting in poorer performance or loss operation.

However, the Company takes into the account of this risk by consulting highly experience lawyer to

monitor on this risk. In addition, the Company also registers more patterns and extending the patterns

to prolong the existing patterns to additional 10 to 20 years

1.1.2 Risk of thermal insulator business

Risk of price war from the competitors

In elastomeric thermal insulator business of Aeroflex has few players in the market such as Amacell

(USA), K-Flex (Italy) and Aeroflex (Thailand). From the past, the competitions between all the players

are considered medium to high depending on the regions. Sometime, Aeroflex uses the pricing

strategy to complete in the competition resulting in lower the price and lower profit from operation.

However, the Company products have superior quality comparing to the products of the competitors in

term of thermal insulation, service temperature, condensation and flammability. With the superior

quality would be secured price insensitive customers which not sensitive to pricing policy or any

discount from the competitors as the competitors’ products do not have similar quality comparing to

the Company. In addition, Aeroflex is the product that certified and required by the engineers who

specify products for each building. Aeroflex also launch another brand “Celflex” which has lower

quality to compete with the competitors.

Risk from dependence on the construction and real estate business

Insulator is considered one of the construction materials which directly related to the construction

activities, construction and real estate industry. In addition, once the construction industry slows down

as happened in 1997 – 1999, resulting to Aeroflex performance. However both industries do not have

significatnt impact to the Company, as 20%-30% of Aeroflex’s products are also being used in the

replacement market or using for maintenance building.

In addition, Aeroflex also develop new products such as roof-insulator and acoustic board to diversify

company risk from both industries.

Risk from investing and expanding into overseas

Logistic cost is considered major cost of the Company account for 15% - 20% of total cost of the

Company during fiscal year 2012 – 2014, so Aeroflex is expanding to overseas to reduce such cost

and improving logistic cost and logistic time. However inadequate international experience in each

location would result the Company to suffer loss from operation and the Aeroflex’s formula could be

released to the competitors.

Aeroflex concerns on this risk and invests under the conservative basis by investing in the form of

associate companies, licensing with business partners which resulting in risk mitigation. Having the

business partner in overseas would assist the Company on business expansion resulting in faster

succession. For the investing plan, the Company would slowly invest and not invest in fully scale

manufacturer in overseas (overseas plant can produce only Prefoam Tube and Sheet or Compound)

to prevent secretly formula to be released to competitors. In addition, the production plant of the

wholly owned subsidiaries is not fully equipped factories as well since Aeroflex would like to reduce

the risk from investing activities. Currently wholly owned subsidiary in USA performance is profitable

and continuously improve.

1.1.3 Risk of car accessories business

Risk of termination of existing contact or non-continuing the contact with key customers

Aeroklas commences ODM production business for world leading automotive companies such as

Toyota Ford Isuzu Nissan and Mitsubishi. In fiscal year 2012 – 2014, ODM business contributes 40% -

50% of total revenue to ARK. To do such business, ARK is required to enter into contract with leading

automotive companies which some contacts are short term contract (1-2 years), so ARK would face

the risk of discontinue or renewal ODM contract from many events such as relocation the leading

automotive companies.

However, leading automotive companies generally do not change their supplier until the new model

launched, each of the model shall survive for 5 – 8 years. To select the new suppliers would require

additional time and would pending the production process, generally selecting new suppliers required

3 – 36 months. In addition, relocating for new location is difficult to take place as Thailand has many

expreinced workers and having research center with supporting from government would secure

leading automotive companies for long time.

In addition, ARK holds many patterns of revenue product which protecting copy or duplicate from

competitors, ARK holds the bargaining power from having monopolistic advantage over the leading

automotives which protecting the Company from termination contract from the leading automotive

companies. Furthermore, to prevent such risk, the Company use and service group of the companies

closely.

Risk from dependence on the automotive industry

ARK operates business from depending on the automotive industries as fiscal year 2012 – 2014, the

Copany performance declined 80% - 85% of total ARK revenue as the automotive industry slows

down and due to other economics factor decline. This factor could result in loss from operation and

poor performance.

As the automotive is important to human being, since 2009 automotive industry has average growth

rate of 6.9% per annum. In addition 64% of automotive businesses in Thailand have been supported

by the government by providing various incentives such as tax benefit and first car policy to become

Detriot of Asia. During the 2009 - 2012, automotive industries continue growth at rate of 31.57% per

annum.

In addition, due to the fierce competition in automotive industry, the leading automotive renew and

launching new model more offent, this event providing opportunities to ARK to introduce new products

to the market to maintain its revenue.

Furthermore, commercial cars or pick-ups are widely used for business resulting less voluntarily to

ARK revenue comparing to passenger car business

1.1.4 Risk of plastic packaging business

Risk of termination of existing contact or non-continuing the contact with key customers

Estern Polypack Co., Ltd. (EPP) operates plastic packaging business by having 31% - 33% revenue

come from ODM business. ODM business requires EPP to do contact with leading f&b companies

such as McDonald, CPall, and Yum Yum. Some of the contacts do not specify the tenor of the contact

or exact order, entails risk of terminating contact to EPP once the contact expire. The leading f&b

companies would decide to discontinue the contact resulting in poor performance of EPP.

However, to award the contact to new comer would not be simple as the leading f&b companies would

not terminate contact until found the satisfy suppliers who able to service in term of price and quality.

Terminating contact by the leading f&b companies could result in business interruption of the f&b

companies. In addition, selecting process of leading f&b companies would require period of time to

ensure the quality. For example, to achieve certificate from Mcdonald, the Company requires 3 years.

Risk of dependence on domestic consumption

Majority of EPP revenue come from domestic, during fiscal year 2012 – 2014, EPP has domestic

revenue more than 85%. If Thailand economic crisis take place, slowdown or any of natural disasters,

contagion and terrorist take place in Thailand, EPP performance would be affected directly from lower

domestic consumption. Especially, these events prolong for periods of time, EPP could possible loss

from the events.

The Company takes into the consideration of this risk by reduction of domestic consumption, as total

of the Group exporting 40% and EPP products are directly related to daily consumption so EPP

performance should not decline during the crisis.

2. Financial Risk

Risk from fluctuations in currency exchange rates

Subsidiary companies and associate companies have revenue and expense in form of foreign

currency such as revenue from selling product to customer in overseas, polymer expense, machinery

expense and the overseas employee expense. Fisical year 2014, Aeroflex, Aeroklas, and Eastern

Polypack have revenue and expense in term of foreign currency 33% of revenue and 25% of the

expense respectively.

In addition, TER and ZAP have revenue and expense in term of foreign currency 10% of revenue and

20% of the expense respectively.

The exchange rate is depended on Thailand economic and global economic which beyond the

Company, subsidiaries, and associated companies’ controlling power or beyond the estimation. Once

the exchange rate changes into the unfavorable trend, the Company could have impact to its

performance.

The Company has risk policy to mitigate such fluctuation of the currency by setting up the hedging

policy for risk mitigation only. The policy has limited the hedging ratio and limited the tenor period.

In addition, the advantage of the Company is the consolidated hedging or group hedging and the

Company position is natural hedge, these 2 factors could mitigate exchange rate risk.

3. Management Risk

Risk of having major shareholder holding more than 75% after the IPO

Vitoorapakorn Group currently holds 100% in the Company and after 25% newly issued shares

allocation in the IPO, the Vitoorapakorn Group will dilute upto 75% of total issued shares. By holding

75% shares, the Vitoorapakorn Group still has control over the Company can direct companies in

almost the agendas including the agendas which required ¾ vote from shareholders. The minority

shareholders might not able to accumulate the vote to block or balance the power of the

Vitoorapakorn Group.

In addition, the Company board seats are consists of 4 independent directors from 9 directors. These

4 directors would doing monitoring, reviewing and balancing the power of the major shareholders.

In addition, to do the connected transaction, the company has to follow the process of SET and SEC

accordingly

Risk of depending on key management (executive officer) or the specialize

The success depends to a significant extent upon the continued services, vision, and expertise of our

executive officers, especially Vitoorapakorn Group, the experience in insulator, car accessory and

plastic packaging business. The loss of any of the executive officers and other key management

personnel or failure to recruit suitable or comparable replacements could have an adverse effect on

the Company.

The business also requires having highly-skilled and dedicated engineer, and other stuffs. The loss of

significant number of highly-skilled persons or failure to recruit suitable or comparable replacements

could have an adverse effect on the Company.

Company has concerned on this issue and has set up the sub-committee to manage and direct

business plan and strategy. In addition, the Company has trained and well developed staff regulary.

The Company believe that the Company could secure talent to continue business accede to the

existing executive officers. In addition, the Company has compensated the employee which in relation

to the period of work. During fiscal year 2012 – 2014 employees has resigned from the Company 3

persons (2.5% per year excluding retired employees).

Legal Dispute -None-

No. of Employee

The number of employee of the company and its subsidiary are displayed in table below

As of 31

March 2012

As of 31

March 2013

As of 31

March 2014

As of 30 June

2014

1. Insulation Business (Aeroflex) 788 760 693 698

2. Car Accessories Business (Aeroklas) 1,099 1,320 1,048 1,091

3. Plastic Packaging Business (Eastern

Polypack)

673 822 835 893

4. Headquarter - - 64 63

5. Other Business 56 48 55 55

Total 2,616 2,950 2,695 2,800

Company Background

Eastern Polymer Group Public Limited Company

Year Event

1978 � Incepted Eastern Polymer Industries Co, Ltd. to operate insulator business

� Relocated factory base to Samutprakarn with a total area of 1,500 square meters and manufactured

“Aeroflex” insulators

1994 � Incepted Aeroflex International Co, Ltd.to expand manufacturing base of insulator and its related products

internationally

� Started manufacturing automotive accessories under Aeroflex International Co, Ltd.

1995 � Jointly invested with Zeon Corporation and Toyota Tsusho to incorporate Zeon Advance Polymix to

manufacture compound rubber for other rubber production

� Jointly invested with Tokai Rubber Industries Co, Ltd. to incorporate Tokai Eastern Rubber (Thailand) to

produce anti-vibration rubber products for automotive, CD players and in-car sound proofing

2001 � Incepted Eastern Polypack Co, Ltd. to acquire Thai Modern Plastic Industry Plc’s assets, in which run

plastic packaging business

2008 � Restructured Aeroflex International Co, Ltd (hereafter renamed “Aeroklas”) to solely operate automotive

accessories by transferring insulator business unit to Eastern Polymer Industries Co, Ltd.

2010 � Incorporated EPG Innovation Center Co, Ltd (EIC) to run a research and development especially for

polymer, composite and metal products

2012 � Restructured Eastern Polymer Industries Co, Ltd. to be the holding company for the purpose of listing in

Stock Exchange of Thailand by transferring insulator business to Aeroflex Co, Ltd (Aeroflex is purposefully

set up, in 2013, for running insulator business) and purchasing Aeroklas’s and Eastern Polypack’s shares

back from the Vitoorapakorn

2013 � Renamed Eastern Polymer Industries Co, Ltd. to Eastern Polymer Group Public Company Limited and

converted to public company for listing in the Stock Exchange of Thailand

Investment in subsidiary/Associated/Related Companies

Company Ownership

percentage1/

(%)

Business

Insulation Business

1. Aeroflex Co.Ltd AFC 100.0 Manufacturer and distributor of EPDM

synthetic rubber insulation, compound

mix, and intermediate product


1.1 Aeroflex USA Co.Ltd AUS 100.0 Manufactures rubber insulation and

distributes in USA

1.2 APS Co.Ltd APS 60.0 Manufacturer and distributor of seal

rubber for automotive industry

1.3 ALP Aeroflex India Co. Ltd AAI 40.0 Manufactures rubber insulation and

distributes in India and nearby countries

1.4 Aerocel Construction Material

(Shaingshu) Co.Ltd

ACM 40.0 Manufactures rubber insulation and

distributes in China and nearby

countries

1.5 Aeroflex Europe Co.Ltd AEU 40.0 Manufactures rubber insulation and

distributes in German and nearby

European countries

Car Accessories Business

2. Aerklas Co.Ltd ARK 100.0 Manufacturer and distributor of Bed

line, deck cover, and other related

products and construction material

related product


2.1 Aerklas USA Co.Ltd ARK-USA 100.0 Manufacturer and distributor of Bed


products in USA

2.2 Aerklas Australia Co.Ltd ARK-AU 100.0 Manufacturer and distributor of Bed


products in Australia

2.4 Aeroklas Shianghai Co.Ltd ARK-SH 100.0 Manufacturer and distributor of Bed


products in China

2.5 Aeroklas Europe Co.Ltd ARK-EU2/

74.9 Manufacturer and distributor of Bed


products in German and European

countries

Plastic Packaging Business

3. Eastern Ploypack Co.Ltd EPP 100.0 Manufacturer and distributor of plastic

cup and packaging

Other Supporting Business

4. Aeroflex Polymer Technology

(Shianghai) Co.Ltd

APT 100.0 Manufacturer and distributor of rubber

insulation in China and provide

sourcing service in China to support

other business

Research and Development

5. Eastern Polymer Innovation Center

Co.Ltd

EIC 100.0 Research and Development

Note: 1/ Direct and indirect % of shareholding of Vitoorapakorn Group

2/ In the process of settlement and expect to be done in October 2014

Company Ownership

percentage1/

(%)

Business

Joint Venture

6.1 Tokai Eastern Rubber (Thailand)

Co.Ltd

TER 20.03/ Manufacturer and distributor of anti-

vibration and sea horse rubber for

automotive industry

6.2 Zeon Advance Polymix Co.Ltd ZAP 27.0 Manufacturer and distributor Rubber

Compound for automotive industry

Note:3/The Company hold 30,0% of common share in TER, however the Company has rights to receive dividend and voting right only 20% as there is 25,000

preferred shares holding by TRI, which the preferred shares have rights to vote and receive dividend 30 times of common shares. In addition, the Company has

reserve matters on TER as stated in the shareholder agreement and article of association that important agenda required at least 81% favorable vote

Change in Capital in the last 3 years

Unit: THB mm

Date Capital

Increase/(Decrease)

Post-capital

Increase/(Decrease) Objectives

7 August 2013 700.0 2,800.0 Initial Public Offering of 700 million

shares with par value of THB 1.0 per

share and selling price of THB 5.8 per

share. The company’s objectives of this

fund raising is to use for business

expansion and paid back debt

Accounting Period

1 April to 31 March

Auditor Mr. Sudwin Khantipanyawong

PricewaterhouseCooper (Thailand) (“PwC”)

Registrar Thailand Securities Depository Co., Ltd

Financial Advisor The Siam Commercial Bank Public Company Limited

Lead Underwriter SCB Securities Co., Ltd

Dividend Policy

Company

The Company has a policy to pay dividend by considering the capability of paying dividend from

accumulated the company net profit, in which the company will pay at not less than 30% of net profit of

consolidated financial statement after tax and legal reserve. The decision of the dividend payment is based

primarily on benefits to the shareholders regarding, for instance, the Company financial position or reserve of

funds for future investments as decided by board of director

Subsidiary

All of the company’s subsidiaries have a policy to pay dividend to the shareholders not least than 50% of net

profit of separated financial statement after tax and legal reserve. The decision of the dividend payment is

based primarily on benefits to the shareholders regarding, for instance, the Company financial position or

reserve of funds for future investments as decided by board of director. The dividend payment shall not

affect the Company normal operation.

B.O.I. Certificates

Business No. of B.O.I.

Certificates

Starting date – Expired date

Insulation Business 1233/อ./255 19 January 2012 – 18 January 2017

1232(2)/อ./2556 9 June 2014 – 8 June 2022

9 June 2022 – 8 June 2027

Car Accessories Business 1389/2542 12 January 2001 – 11 January 2014

2083(2)/2548 7 January 2010 – 6 January 202

178 (2)/2549 Not Generate Revenue yet

1014(2)/2554 Not Generate Revenue yet

1902(2)/2556 Not Generate Revenue yet

Plastic Packaging Business 1588/2544 20 September 2003 – 19 September 2011

1139(2)/2552 26 October 2011 – 25 October 2019

1652(2)/2554 8 April 2014 – 7 April 2107

Research and Development 2023(4)/2549 14 September 2010 – 13 September 2018

No. of Shareholders As of 22 December 2014 No, of

Shareholder

No. of

Shares

% of paid up

capital

1. Strategic shareholders

1.1 Directors, manager, and executive management

Including related persons and associated persons

17 2,100,000,000 75.0

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 6,612 700,000,000 25.0

3. Non-strategic shareholders hold < 1 trading unit - - -

Total Shareholders 6,629 2,800,000,000 100.0

Major Shareholders As of 22 December 2014

Shareholders Pre IPO Post IPO

No.of Shares % No.of Shares %

1 Vitoorapakorn Group

Vitoorapakorn Holding Co., Ltd*

Mr. Pawat Vitoorapakor

Mr. Teerawat Vitoorapakorn

Mr. Chumnan Vitoorapakorn

Mr. Chalieo Vitoorapakorn

Mr. Ekawat Vitoorapakorn

Mr. Tanawat Vitoorapakorn

Miss Rungravee Vitoorapakorn

Miss Naowarat Vitoorapakorn

Miss Warapin Vitoorapakorn

Miss Ratipin Vitoorapakorn

Mrs. Tia Siu Buai

Miss Ratiporn Chaiyangyuen

Miss Wariya Theerajaruwat

Miss Nisna Theerajaruwat

Mr. Pawit Theerajaruwat

Mr. Tawin Theerajaruwat

2,100,000,000

1,679,999,800

92,400,100

63,000,100

58,800,000

54,600,000

50,400,000

29,400,000

14,700,000

14,700,000

8,400,000

8,400,000

8,400,000

8,400,000

2,100,000

2,100,000

2,100,000

2,100,000

75.0

60.0

3.3

2.3

2.1

2.0

1.8

1.1

0.5

0.5

0.3

0.3

0.3

0.3

0.1

0.1

0.1

0.1

2,100,000,000

1,679,999,800

92,400,100

63,000,100

58,800,000

54,600,000

50,400,000

29,400,000

14,700,000

14,700,000

8,400,000

8,400,000

8,400,000

8,400,000

2,100,000

2,100,000

2,100,000

2,100,000

100.0

80.0

4.0

3.0

2.8

2.6

2.4

1.4

0.7

0.7

0.4

0.4

0.4

0.4

0.1

0.1

0.1

0.1

Shareholders Pre IPO Post IPO

No.of Shares % No.of Shares %

2 Social Security Office 10,298,800 0.37 - -

3 Provident Fund of the EGAT 10,011,300 0.36 - -

4 MFC Dividend Mutual Fund 8,643,800 0.31 - -

5 Mr. Sompong Chonkadeedhumrong 8,080,000 0.29 - -

6 Thai Value Focus Dividend Mutual Fund 7,634,000 0.27 - -

7 Krung Sri Long Term Dividend Fund 7,020,200 0.25 - -

8 Thai Life Insurance Co., Ltd. 6,909,200 0.25 - -

9 Provident Fund of the PEA (Provincial

Electricity Authority) 6,881,200 0.25 - -

10 SCB Equity for living Mutual Fund 6,281,900 0.22 - -

11 Other 628,239,600 22.4 - -

Total 2,800,000,000 100.0 2,100,000,000 100.0

Note : List of Vitoorapakorn Holding’s Shareholder consists of Mr. Pawat Vitoorapakorn, Mr. Teerawat Vitoorapakorn, Mr. Chumnan

Vitoorapakorn, Mr. Chalieo Vitoorapakorn, Mr. Ekawat Vitoorapakorn, Mr. Tanawat Vitoorapakorn, Miss Rungravee Vitoorapakorn, Miss

Naowarat Vitoorapakorn, Miss Warapin Vitoorapakorn, Miss Ratipin Vitoorapakorn, Mrs. Tia Siu Buai, Miss Ratiporn Chaiyangyuen, Miss

Wariya Theerajaruwat, Miss Nisna Theerajaruwat, Mr. Pawit Theerajaruwat and Mr. Tawin Theerajaruwat

Foreign Shareholders

As of 22 December 2014, the Company has 40 foreign shareholders, totaling 26,667,900 shares 0.95% of total paid

up capital).

Note: The Company has the restriction regarding shareholding of foreigners in compliance with clause 10 of the Company’s regulation,

which states that share of the Company can be liberally transferred without constraint and shares hold by non-Thai individuals at any time

must not exceed forty-nine percent (49%) of total shares of the Company. Any shares transfer that may cause the proportion of

shareholding by non-Thai persons to exceed the limit of the percentage mentioned, the Company has the right to refuse such transfer of

the Company.

Board of Directors

As of 14 November 2013, the Board of Directors comprise of 9 directors as follow

Member of Board of

Directors

Position

(EPG)

Date of

Appointment

(EPG)

AFC ARK EPP

1. Mr. Vachara

Tuntariyanond

Chairman of the board of

director/ Independent

director/ Chairman of Risk

Management Committee

8 August 2013 - - -

2. Dr. Pawat

Vitoorapakorn

Vice-Chairman of the board

of director/ Chairman of

Executive Committee/ CEO

8 August 2013 Director Director Director

3. Mr. Teerawat

Vitoorapakorn

Director/ Member of

Executive Committee/

Nomination and

Remuneration Committee

8 August 2013 Director Director Director/ CEO

4. Mr. Chumnan

Vitoorapakorn

Director/ Member of

Executive Committee

/Member of Risk


8 August 2013 Director/

CEO Director Director

5. Assoc.Prof.Dr. Chalieo

Vitoorapakorn

Director/ Member of

Executive Committee/

Nomination and


8 August 2013 Director Director Director

6. Mr. Ekawat

Vitoorapakorn

Director/ Member of

Executive Committee

/Member of Risk


8 August 2013 Director Director/ CEO Director

7. Mr. Chaiwat

Atsawintarangkun

Chairman of Audit

Committee/ Independent

director/ Member of Risk

Management Committee/

Chairman of Nomination and


8 August 2013 - - -

8. Mr. Thanachai

Santichaikul

Audit Committee/

Independent director/

Nomination and


8 August 2013 - - -

9. Mr. Panchai

Wattanachai

Audit Committee/

Independent director/

Nomination and


8 August 2013 - - -

Note: The board of directors meeting No. 11/2013 held on 4 December 2013 passed a resolution appointing Miss Rungravee Vitoorapakorn as corporate

secretary

Audit Committee

As of 8 August 2013, the board of directors pass a resolution appointing the audit committee as follow

Members of the audit committee

1. Mr. Chaiwat Atsawintarangkun Chairman of Audit Committee

2. Mr. Thanachai Santichaikul Audit Committee

3. Mr. Panchai Wattanachai Audit Committee

Secretary to the audit committee: Mrs.Yaowaporn Ranorm

Scope of duties and responsibilities:

Shareholder Extraordinary Meeting No. 1/2013 held on 8 August 2013 passed a resolution appointing the scope

of duties and responsibilities of audit committee as follow

1.To verify that the Company has an accurate and adequate financial statements

2.To verify that the Company has proper and effective internal control and internal audit system and to

review the independence of internal audit function of the Company. To approve the appointment,

transfer or eliminate the head of internal audit function responsible for the internal audit of the

Company.

3.To review the company’s compliance with the law on securities and exchange, the regulations of the

Stock Exchange of Thailand, and the laws relating to the company’s business

4.To consider, select, propose an appointment, and propose remuneration to auditors of the Company

and meeting with the auditor without management attendance at least once a year

5.To consider related party transaction complying with the laws regarding securities and The Stock

Exchange of Thailand and regulations of The Stock Exchange of Thailand.

6.To prepare, and disclose in the company’s annual report, an Audit Committee’s report which must be

signed by the Chairman of the Audit Committee and consist of at least the following information:

a. an opinion on the accuracy, completeness and credibility of the company’s financial report;

b. an opinion on the adequacy of the company’s internal control system;

c. an opinion on the compliance with the law on securities and exchange, the regulations of the

Stock Exchange of Thailand, or the laws relating to the company’s business;

d. an opinion on the suitability of an auditor;

e. an opinion on the transactions that may lead to conflicts of interests;

f. the number of the Audit Committee meetings, and the attendance at such meetings by each

committee member;

g. an opinion or overview of comments received by the Audit Committee from its performance of

duties in accordance with the charter; and

h. Other transactions which, according to the Audit Committee’s opinion, should be known to the

shareholders and general investors

7.Perform any other act as assigned by the company’s board of directors, with the approval of the Audit

Committee. Audit Committee will directly report to the Board of Directors of the Company

The Number of year in duty

� Chairman of Audit Committee 3 years

� Audit Committee 3 years

Listing Condition None

Silent Period

Shareholders, who own common shares before the Company’s public offering, holding 1,540,000, 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 from the Stock

Exchange

None

Statistic Summary

Financial Year End

(End

31 Mar)

Revenue

(THB mm)

Profit

(Loss)

(THB

mm)

EPS(Loss)

(THB/Share)

Dividend

(THB/Share)

Par value per

share*

(THB/Share)

Payout

Ratio

(%)

2012 5,627.7 480.3 0.2 0.2 1.65 94.9

2012 6,750.1 787.2 0.4 1.1 1.12 286.6

2014 6,591.8 630.4 0.3 0.0 1.35 0.0

1H2015 (End 31 Sept

2014) (Reviewed) 3,465.4 301.8 0.1 0.1 1.40 66.1

Note: Par value 1.00 THB/share calculated from paid up capital of 2,800 million shares

The Securities and Exchange Commission

Eastern Polymer Group Public Company Limited

Statement of Financial Position

For the Year Ended 30 April 2011 to 31 March 2014 and For the Half Year Ended 30 September 2014

In FY 2012, the Company had restructured the holding of its company under control and form the holding company;

therefore, the Company prepares performa financial statement to simulate a current holding structure since 1 April

2011. Financial Statement for FY 2012-2014 and 1H2015 are reviewed by Mr. Sudwin Panyawong, SEC listed auditor

no. 3534 of Pricewaterhouse Cooper ABAR

FY 2012

(Apr 11 - Mar 12)

FY 2013

(Apr 12 - Mar 13)

FY 2014

(Apr 13 - Mar 14)

1H2015

(Apr 14 - Sept 14)


Assets

Current assets

Cash and cash equivalents 1,197.2 10.8 103.6 1.0 140.5 1.3 138.1 1.2

Short-term loan to related parties 107.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0

Trade and other accounts receivable (net) 1,248.0 11.2 1,351.2 12.6 1,145.7 10.5 1,191.6 10.7

Inventories (net) 1,776.0 16.0 1,767.2 16.5 1,782.4 16.4 1,909.6 17.2

Value added tax 45.4 0.4 137.4 1.3 22.2 0.2 43.7 0.4

Current portion of land leasehold right

(net)

0.2 0.0 0.2 0.0 0.2 0.0 0.2 0.0

Other current assets 6.4 0.1 3.9 0.0 3.4 0.0 5.3 0.1

Available for sale associated companies 242.8 2.2 0.0 0.0 0.0 0.0 0.0 0.0

Total current assets 4,623.1 41.6 3,363.5 31.5 3,094.4 28.4 3,288.6 29.6

Non-current assets

Restricted deposits at financial institutions 429.9 3.9 444.8 4.2 464.5 4.3 460.0 4.2

Available-for-sale investments 0.1 0.0 0.1 0.0 0.0 0.0 0.1 0.0

Investments in associates 1,280.1 11.5 1,460.3 13.7 1,576.0 14.5 1,596.3 14.4

Investments in subsidiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other long term investment 3.7 0.0 0.0 0.0 0.0 0.0 20.4 0.2

Long-term loan to related parties 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Property, plant and equipment (net) 4,418.7 39.7 5,132.9 48.0 5,475.8 50.2 5,463.0 49.2

Intangible assets (net) 108.8 1.0 82.3 0.8 71.5 0.7 68.1 0.6

Land leasehold right (net) 7.8 0.1 7.4 0.1 7.8 0.1 7.8 0.1

Deferred income tax assets (net) 226.5 2.0 177.3 1.7 175.4 1.6 158.2 1.4

Other non-current assets 18.9 0.2 18.2 0.2 33.6 0.3 34.2 0.3

Total non-current assets 6,494.6 58.4 7,323.4 68.5 7,804.6 71.6 7,808.1 70.4

FY 2012

(Apr 11 - Mar 12)

FY 2013

(Apr 12 - Mar 13)

FY 2014

(Apr 13 - Mar 14)

1H2015

(Apr 14 - Sept 14)


Total assets 11,117.7 100.0 10,686.9 100.0 10,898.9 100.0 11,096.7 100.00

Liabilities and shareholders’ equity

Current liabilities

Bank overdrafts and short-term loans from

financial institutions

3,689.4 33.2 4,818.4 45.1 4,425.3 40.6 3,006.1 27.1

Trade and other accounts payable 828.8 7.5 878.0 8.2 744.2 6.8 864.0 7.8

Short-term loan from related parties 844.4 7.6 13.3 0.1 27.0 0.2 24.8 0.2

Current portions of long-term loans from

financial institutions

202.6 1.8 339.9 3.2 431.3 4.0 440.5 4.0

Current portions of finance lease liabilities

(net)

0.5 0.0 2.0 0.0 4.2 0.0 4.9 0.0

Accrued income tax 3.2 0.0 11.1 0.1 22.3 0.2 12.1 0.1

Value added tax 0.0 0.0 0.0 0.0 2.0 0.0 1.0 0.0

Other current liabilities 8.3 0.1 11.8 0.1 9.1 0.1 13.9 0.1

Total current liabilities 5,577.1 50.2 6,074.5 56.8 5,665.4 52.0 4,367.4 39.4

Non-current liabilities

Long-term loans from financial institutions 869.6 7.8 1,421.8 13.3 1,359.3 12.5 2,712.0 24.4

Finance lease liabilities (net) 0.8 0.0 2.9 0.0 4.6 0.0 4.0 0.0

Employee benefit obligations 48.3 0.4 64.2 0.6 87.3 0.8 90.0 0.8

Total non-current liabilities 918.8 8.3 1,489.0 13.9 1,451.1 13.3 2,806.0 25.3

Total liabilities 6,495.9 58.4 7,563.5 70.8 7,116.5 65.3 7,173.4 64.6

Shareholders’ equity

Share capital 2,100.0 18.9 2,100.0 19.7 2,800.0 25.7 2,800.0 25.3

Issued and fully paid-up share capital 2,100.0 18.9 2,100.0 19.7 2,100.0 19.3 2,100.0 18.9

Retained earnings

- Appropriated – legal reserve 36.7 0.3 50.0 0.5 50.0 0.5 50.0 0.5

- Unappropriated 1,824.1 16.4 341.7 3.2 909.3 8.3 1,011.5 9.1

Surplus from business combination under

common control

638.7 5.7 638.7 6.0 701.7 6.4 701.7 6.3

Other components of shareholders’ equity 22.3 0.2 -7.0 -0.1 20.5 0.2 59.0 0.5

Equity attributable to owners of the parent 4,621.8 41.6 3,123.4 29.2 3,781.5 34.7 3,922.2 35.4

Non-controlling interests - - - - 0.9 0.0 1.1 0.0

Total shareholders’ equity 4,621.8 41.6 3,123.4 29.2 3,782.5 34.7 3,923.3 35.4

Total liabilities and shareholders’ equity 11,117.7 100.0 10,686.9 100.0 10,898.9 100.0 11,096.7 100.00


Statements of Comprehensive Income

For the Year Ended 30 April 2011 to 31 March 2014 and For the Half Year Ended 30 September 2013 and 2014

FY 2012

(Apr 11 - Mar 12)

FY 2013

(Apr 12 - Mar 13)

FY 2014

(Apr 13 - Mar 14)

1H2015

(Apr 14 - Sept 14)

FY 2012

(Apr 11 - Mar 12)

THB mm % THB mm % THB mm % THB mm % THB mm %

Revenue from sales of goods 5,627.7 100.0 6,750.1 100.0 6,591.8 100.0 3,360.0 100.0 3,465.37 100

Revenue from services - - 0.0 0.0 1.9 0.0 0.4 0.0 0.9 0

FY 2012

(Apr 11 - Mar 12)

FY 2013

(Apr 12 - Mar 13)

FY 2014

(Apr 13 - Mar 14)

1H2015

(Apr 14 - Sept 14)

FY 2012

(Apr 11 - Mar 12)

THB mm % THB mm % THB mm % THB mm % THB mm %

Cost of goods sold (4,048.7) (71.9) (4,923.8) (72.9) (4,870.2) (73.9) (2449.5) (72.9) (2,577.8) (74.4)

Cost of services - - (2.1) (0.0) (1.5) (0.0) (0.3) 0.0 (0.6) 0

Gross profit 1,579.0 28.1 1,824.3 27.0 1,722.1 26.1 910.6 27.1 887.8 25.6

Profit sharing from the associate

companies

- - 117.2 1.7 0.0 0.0 0.0 0.0 0.0 0.0

Other income 20.8 0.4 50.0 0.7 63.2 1.0 50.8 1.5 15.7 0.5

Profit before expenses 1,599.9 28.4 1,991.5 29.5 1,785.2 27.1 963.7 28.6 903.6 26.1

Selling expenses (471.3) (8.4) (571.2) (8.5) (552.7) (8.4) (273.2) (8.1) (279.8) (8.1)

Administrative expenses (709.2) (12.6) (630.8) (9.3) (592.8) (9.0) (291.1) (8.7) (248.9) (7.2)

Other gains (losses) – net gain (loss)

on exchange rate

56.1 1.0 (31.5) -0.5 96.8 1.5 62.1 1.8 (12.2) (0.4)

Other expenses (4.9) (0.1) (4.2) (0.1) (1.3) 0.0 0.0 0.0 (6.6) (0.2)

Finance cost (252.4) (4.5) (239.9) (3.6) (356.2) (5.4) (189.0) (5.6) (122.5) (3.5)

Share profit from investments in

associates

211.0 3.7 337.2 5.0 305.7 4.6 170.4 5.1 99.6 2.9

Profit (loss) before income tax 429.1 7.6 851.1 12.6 684.6 10.4 440.7 13.1 333.1 9.6

Income tax 51.2 0.9 (63.9) (0.9) (54.2) (0.8) (25.2) (0.8) (31.3) (0.9)

Net profit (loss) for the period 480.3 8.5 787.2 11.7 630.4 9.6 415.5 12.4 301.8 8.7


Statement of Cash Flows

For the Year Ended 30 April 2011 to 31 March 2014 and For the Half Year Ended 30 September 2013 and 2014

FY 2012

(Apr 11 - Mar

12)

FY 2013

(Apr 12 - Mar

13)

FY 2014

(Apr 13 - Mar

14)

1H2015

(Apr 14 - Sept

14)

FY 2012

(Apr 11 - Mar

12)

THB mm. THB mm. THB mm. THB mm. THB mm.

Cash flows from operating activities:

Profit (loss) before income tax 429.1 851.1 684.6 440.7 333.1

Adjustments 0.0 0.0 0.0 0.0 0.0

(Reversal of) allowance for doubtful accounts 13.9 5.1 5.9 6.0 2.7

(Reversal of) allowance for obsolete and slow moving

inventories

0.0 0.0 19.4 17.5 3.2

(Reversal of) allowance for inventories cost in excess of net

realizable value

4.6 7.0 6.7 - (0.3)

Allowance for impairment of other long term investment 1.7 3.3 0.0 0.0 0.0

Net (gain) loss on exchange rates – unrealized 7.7 (59.2) 29.5 28.3 3.6

Net gain on sales of investment in associates 0.0 0.0 (26.8) (26.8) 0.0

Profit from divesting other long term investment 0.0 (1.1) 0.0 0.0 0.0

Share of (profit) from investments in associates (211.0) (337.2) (305.7) (170.5) (99.6)

Profit from divesting stake in associated companies 0.0 (117.2) 0.0 0.0 0.0

Depreciation 269.0 344.5 421.5 199.8 233.2

Amortization 18.0 14.0 19.1 9.2 8.8

Net loss on written-off of property, plant and equipment 0.1 13.7 1.3 - 6.6

Net (gain) loss on disposals of property, plant and equipment 1.8 (10.7) (7.9) (7.5) 0.2

Employee benefit obligations 9.1 15.9 24.5 5.3 7.8

Dividend income 0.0 0.0 0.0 0.0 0.0

Interest income (12.5) (15.4) (11.1) (6.2) (4.8)

Finance cost 244.7 299.1 326.8 160.7 118.9

Profit (loss) before income tax after adjustments 776.2 1,013.0 1,187.9 656.6 613.3

Change in operating assets and liabilities

Increase (decrease) in operating assets

Trade and other accounts receivable (225.8) (109.6) 172.3 132.8 (78.2)

Inventories (376.8) 1.8 (41.3) (115.5) (130.1)

Value added tax (33.4) (91.9) 117.2 104.8 (22.5)

Other current assets (5.0) 2.6 0.5 3.3 (2.0)

Other non-current assets 1.0 0.7 (0.6) (9.1) (0.7)

Increase (decrease) in operating liabilities 0.0 0.0 0.0 0.0 0.0

Trade and other accounts payable (123.7) (5.4) (136.3) (52.4) 112.4

Other current liabilities 5.3 3.5 (2.6) (7.9) 4.8

Employee benefit obligations paid (3.8) 0.0 (2.1) - (5.1)

Cash generated from (used in) operating activities before

interest income received, finance cost paid and income tax paid

14.0 814.7 1,294.9 712.7 492.1

Interest income received 8.2 16.6 11.6 8.7 1.1

Finance cost paid – interest expense (234.4) (304.0) (360.2) (196.1) (121.7)

Income tax paid 1.5 (6.6) (30.9) (25.4) (24.5)

Net cash generated from (used in) operating activities (210.6) 520.7 915.4 499.9 347.0

FY 2012

(Apr 11 - Mar

12)

FY 2013

(Apr 12 - Mar

13)

FY 2014

(Apr 13 - Mar

14)

1H2015

(Apr 14 - Sept

14)

FY 2012

(Apr 11 - Mar

12)

THB mm. THB mm. THB mm. THB mm. THB mm.

Cash flows from investing activities

(Increase) decrease in restricted deposits at financial institutions (12.5) (14.9) (19.7) (11.5) 4.5

Cash received from divesting stake in subsidiaries 0.0 0.0 0.0 0.0 0.0

Cash paid for maintaining stake in subsidiaries (15.0) (31.0) 0.0 0.0 0.0

Dividend received from associated companies which available

for sale

0.0 52.5 0.0 0.0 0.0

Cash received from divesting associated companies which

available for sale

0.0 338.5 0.0 0.0 0.0

Cash received from divesting long term investment 24.5 1.5 0.0 0.0 0.0

Cash paid for purchase of investments in associates (38.1) (23.1) (35.5) (12.7) (12.8)

Cash paid for the companies under common control basis (712.8) 0.0 0.0 0.0 0.0

Cash paid for purchase of property, plant and equipment (889.2) (1,694.5) (735.9) (425.9) (232.4)

Cash paid for purchase of intangible assets (4.3) (0.7) (8.0) (1.5) (5.5)

Cash received from disposals of property, plant and equipment 168.7 691.9 39.1 41.2 19.2

Short-term loan to subsidiaries 0.0 0.0 0.0 0.0 0.0

- Proceeds (78.0) (12.0) (127.0) (111.0) 0.0

- Repayments 13.0 119.0 127.0 0.0 0.0

Cash paid for long-term lending to related partiesเ 0.0 0.0 0.0 0.0 0.0

Dividend receipts from investments in associates 323.2 163.8 220.2 215.3 111.0

Profit sharing from long-term investment 0.0 0.0 0.0 0.0 0.0

Net cash (used in) generated from used in investing

activities

(1,220.5) (409.1) (539.8) (305.1) (116.1)

Cash flows from financing activities

Increase (decrease) in bank overdrafts and short-term loans

from financial institutions

740.5 1,188.2 (393.1) (217.7) 9.8

Short-term loans from related parties 0.0 0.0 0.0 0.0 0.0

- Proceeds 1,539.5 1,840.4 37.2 0.0 0.0

- Repayments (948.9) (2,670.2) (25.3) (13.3) (2.4)

Long-term loans from financial institutions – Proceeds 232.2 1,351.4 396.3 227.1 136.2

Long-term loans from financial institutions – Repayments (222.1) (660.0) (372.2) (157.3) (202.8)

Finance lease liabilities payments (1.8) (1.4) (4.3) (3.8) (2.3)

Cash receive from capital increase 1,700.0 0.0 0.0 0.0 0.0

Dividends paid (455.7) (2,256.3) 0.0 0.0 (199.5)

Cash receive from non-controlling interest 0.0 0.0 1.2 0.0 0.0

Net cash (used in) financing activities 2,583.7 (1,208.0) (360.3) (165.0) (261.0)

Translation differences 2.2 2.8 21.5 7.3 27.6

Net increase (decrease) in cash and cash equivalents 1,154.7 (1,093.6) 36.9 37.0 (2.4)

Cash and cash equivalents at the beginning of the period 42.5 1,197.2 103.6 140.5 177.5

Cash and cash equivalents at the end of the period 1,197.2 103.6 140.5 177.5 175.1

Prepared by Siam Commercial Bank Public Company Limited


Teerwat Vitoorapakorn Chumnarn Vitoorapakorn

Mr. Teerawat Vitoorapakorn Mr. Chumnarn Vitoorapakorn

Director Director

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