ggcinvestor.ggcplc.com/misc/prospectus/20170428-ggc-memerandum-en.pdfsecondary market stock exchange...

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- Information Memerandum -

Global Green Chemicals Public Company Limited (GGC) Head Office 555/1 Energy Complex Building A, Vibhavadi-Rangsit Road, Chatuchak, Bangkok, 10900 Tel. 02-558-7300 Fax 02-558-7301 Website http://www.ggcplc.com Plant Location 8 Soi G12, Pakorn Songkhraorat Road, Tambon Map Ta Phut, Amphur Muang Rayong 21150 Tel. 038-994000 Fax 038-977444 Listing Date As at 2 May 2017 (Trading commencement on 2 May 2017) Listing Securities 986,666,700 Common shares. Par value per share of Baht 10.0. Total value of Baht 9,866,667,000

Exisiting ordinary shares pre-Initial Public Offering (IPO) of 740,000,000 shares Ordinary shares for IPO of 246,666,700 shares

representing 25.00% of total paid-up capital after IPO of Global Green Chemicals Public Company Limited (“the Company” or “GGC”)

Capital As of 2 May 2017 (Trading Commencement) Registered Capital Common Shares 1,048.33 million shares or 10,483.33 million baht Paid-up Capital Common Shares 986.67 million shares or 9,866.67 million baht Secondary Market Stock Exchange of Thailand (SET) Offering Price Baht 11.20 Offering Date 20 – 21 and 24 April 2017 Offer to institutional investors approximately 123,333,700 shares or 50.00% of the offering Offer to general investors approximately 123,334,000 shares or 50.00% of the offering Moreover, upon the end of the offering period, 37,000,000 over-allotment shares have been allocated

as shares subscribed exceeded the amount offered of 246,666,700 shares. Objectives and plans for utilizing the capital increase The Company intends to utilize the net proceeds for the following:

Use of Proceeds Approximate Amount (Baht million)

Approximate Timr Frame

1. Methyl Ester Plant 2 1,150 Within 2017 – 2019 2. Biocomplex Project 1,350 Within 2017 – 2020

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3. Working Capital and investment in aforementioned projects (if required) and other future projects

154 Within 2017 – 2019

Total 2,654

Green Shoe Option The number of up to 37,000,000 shares were borrowed from PTT Global Chemical Public

Company Limited (“PTTGC”) to allocate to investors. Phatra Securities Public Company Limited as the over-allotment agent will procure shares to return to the lender within 30 days from the first trading date on the Stock Exchange in the following manners:

1. Purchasing shares on the Stock Exchange of Thailand; and/or

2. Exercising the over-allotment option to buy shares from the Company of no more than 37,000,000 shares

Type of Business and Nature of Operation

The Company is the designated flagship green chemicals business of the PTTGC Group (which is the designated chemicals flagship of the PTT Group). The Company aspires to become a global green chemicals player that is prominentin each of the markets the Company enters into and/or operates.

PTTGC’s Board of Director’s meeting No. 1/2559 held on 25 March 2016 had approved the policy to consolidate green chemicals businesses of the PTTGC group under the Company in the future, in order to integrate PTTGC’s investments, business development plans, and future opportunities in the green chemicals business in Thailand and foreign countries together. The consolidation of PTTGC’s existing green chemicals businesses will be subject to the potential of the green businesses to generate profit in the long-term, the Company’s investment strategy, the Company’s readiness for the investment as well as related rules and regulations. Such consolidation plan will be mutually agreed between PTTGC, the Company, and related investors in such businesses, and will be subject to approval process and other relavant process of the Company, PTTGC and partners of PTTGC in its green businesses. Furthermore, PTTGC and the Company, as the Green Flagship company, will jointly consider appointing the Company to carry out expansion plans and investments in future green chemical business of PTTGC. Such consideration will be subject to the form of investment, its appropriateness, relavant laws and regulations, and the Company’s readiness to make investments. The Company is one of the largest producers of methyl ester in Thailand and the only producer of fatty alcohols in Thailand. The Company’s sales of methyl ester accounted for approximately 27% of total consumption of methyl ester (which is used to blend in retail high speed diesel fuel) in Thailand in 2016, based on the Company’s sales quantity and statistics obtained from the Department of Energy Business. Methyl ester, or B100, is used as biodiesel and blended in retail diesel fuel in Thailand. While fatty alcohols are key components for cosmetics, surfactants and pharmaceutical products. Glycerine is another product of the Company which is key component for cosmetics and pharmaceutical products.The Company also produces several byproducts, including crude glycerine, yellow glycerine, potassium sulfate, methyl ester residue and fatty alcohols residue.

The Company operates a technologically advanced production plant using equipment from leading international and local manufacturers. This, in addition to the in-house technical knowhow that the Company has developed since it began operations, has enabled the Company to operate its plant in a highly efficient manner at high production rate and to ensure consistency in the Company’s product quality. The principal feedstocks the Company uses are Refined Bleached Deoderized palm oil (“RBD palm oil”) for its production of methyl ester and Refined Bleached Deoderized palm kernel oil (“RBD palm kernel oil”) for its production of fatty alcohols. However, the technology of its production plant and the Company’s technical knowhow also provide it with flexibility to use alternative feedstock options for its production of methyl ester and fatty alcohols, which in turn provides the Company with increased flexibility to optimize profits, taking into account relative raw materials cost, the availability of raw materials and production efficiencies. 1. Product Characteristics

(a) Methyl Ester

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Methyl ester, which is commonly known as biodiesel or B100, is a clean burning renewable fuel made from natural feedstocks. Methyl ester is blended with petroleum diesel fuel and is generally regarded as a partial substitute for petroleum diesel fuel in diesel engines.

The Company sells almost all of its methyl ester to customers in Thailand, primarily diesel fuel producers and blenders in Thailand. Such diesel fuel producers and blenders will blend the methyl ester that the Company sells with petroleum diesel fuel and then sell the blended diesel fuel to consumers at retail stations.

Methyl ester has properties which are different from petroleum diesel fuel. Biodiesel fuel is generally regarded as being more environmentally friendly. Methyl ester is considered to be safer to handle compared to petroleum diesel fuel. The physical characteristics of methyl ester are closer to those of petroleum diesel fuel than pure vegetable oils, which viscosity levels are generally too high for use in diesel engines.

The Department of Energy Business requires retail diesel fuel sold at retail stations to be blended with a certain percentage range of methyl ester. The Government regularly adjusts such ratio from time to time in order to balance domestic palm oil supply and demand. Although the Government's plan, as part of its energy policy, is to increase the share of renewable and alternative energy over time, in order to ensure that sufficient palm oil is available for processing into cooking oil and for food consumption domestically, as well as to keep retail diesel fuel prices manageable for Thai consumers, the Government generally decreases the minimum ratio for the blend of methyl ester to petroleum diesel fuel in retail diesel fuel from time to time, including during dry seasons in Thailand (which typically occur between February and April, but can also extend from January to May or occur in other months) and other periods when domestic production of Crude palm oil (“CPO”) is depressed and prices are higher. Reduction of the minimum level of the biodiesel mandate by the Government reduces the demand of methyl ester and reduces the Company’s revenues.

The following graph sets out the mandatory minimum level of methyl ester to be blended with petroleum diesel fuel between 1 February 2008, when the minimum blending rate for general retail diesel fuel was first implemented, and the effective date of the prospectus.

Diesel fuel producers and blenders would in practice blend petroleum diesel fuel with methyl ester with a blending ratio at

or slightly above the mandated minimum levels (to allow for minor changes during storage and transportation). The Government regulates the price structure of petroleum products to encourage the use of biodiesel fuel and support

the agricultural industry, as well as manage the price of various types of retail fuel. The Government effects this through adjusting the excise taxes and fund contributions for fuel that is eventually sold at the petrol station, and by reducing the excise taxes and fund contributions applicable (or in certain circumstances such as an environment of high crude oil prices, increasing subsidies) to retail diesel fuel relative to other fuel (although such excise taxes and fund contributions do not impact methyl ester prices, which is based on the reference price for the sale of methyl ester which is set by the Energy Policy & Planning Office (“EPPO”) on a weekly basis based on a cost-plus formula).

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(b) Fatty Alcohols

Fatty alcohols are used in a range of goods, including surfactants, plasticizers, solvents, flavorings, fragrances, detergents, foam stabilizers, lubricant, cosmetics, plastic intermediates, shampoo, paints and coatings, textile and leather auxiliaries and printing inks.

The Company’s fatty alcohols are generally categorized as short chain (C6-C10), mid chain (C12-C14) or long chain (C16-C18), depending on the number of carbon atoms contained in each molecule.

A substantial majority of fatty alcohols worldwide are converted into surfactants. Surfactants or “surface active agents” are the basic materials used in the production of laundry detergent, dishwashing detergent and other household cleaning products. Surfactant molecules have a water-seeking, or hydrophilic, end and a water-repelling, or hydrophobic, end. The hydrophobic end is attracted to oil and/or dirt, while the hydrophilic end is soluble in water. This allows the surfactant to use the physical bond between the ends to effectively bond oil and water molecules together, thereby removing both dirt and oil.

Most detergents are formulated from a mixture of natural fatty alcohol surfactants and synthetic surfactants, such as linear alkyl benzene sulphonates. Natural fatty alcohols converted into surfactants is made up of mid chain (C12-C14) and long chain (C16-C18) fatty alcohols and is commonly referred to as detergent range.

The following chart shows the process by which end products are produced from detergent range natural fatty alcohol:

Fatty alcohol sulphates have good foaming and detergent qualities, but are generally less effective when used with “hard”

water. Fatty alcohol ethoxylates are surfactants, which are effective at removing grease and are more suited to “hard” water conditions than fatty alcohol sulphates. Fatty alcohol ethoxylates are widely used for laundry liquids. Fatty alcohol ether sulphates, another type of surfactants used in personal care applications.

Surfactants are also used in personal care products to enhance properties such as emollience, solvency and solubility as well as in healthcare and agrochemicals as a solvent.

Short chain fatty alcohols are used in the manufacture of esters for flavorings and fragrances as well as in the manufacture of plasticizers, lubricants, surfactants and solvents.

Fatty Alcohols

Fatty Alcohol Sulphates

Fatty Alcohol Ethoxylates

Fatty Alcohol Ether Sulphates

End Product

• Heavy Duty Powder • Heavy Duty Liquid • Light Duty Liquid • Textile Scouring • Industrial Cleaners • Industrial Aids • Shampoo/Bath Gel • Dishwashing Liquid • Personal Care Products • Fragrances • Lubricants • Agrochemicals

Fatty Alcohol Surfactants

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The following table sets out the Company’s fatty alcohol product types, their sources and the primary uses for such products:

Products Sources Primary Use

Short chain fatty alcohol (C6 - C10) Only palm kernel oil and coconut oil

Plasticizers, lubricants, solvents, flavorings and fragrances

Mid chain fatty alcohol (C12 - C14) Only palm kernel oil and coconut oil

Detergents, surfactants, foam stabilizers, lubricant additives, cosmetics

Long chain fatty alcohol (C16 - C18) All natural oils, including corn, rapeseed and soya

Detergents, surfactants, plastic intermediates, lubricants and cosmetics

The proportion of the short, mid and long chain fatty alcohols that the Company’s production process produces is largely a function of the type of feedstock that the Company uses in its production.

(c) Refined Glycerine

Refined glycerine is a byproduct of the Company’s methyl ester and fatty alcohols production. Glycerine is initially produced in a crude form that contains high levels of water and other impurities. This crude glycerine is then refined to produce a sweet tasting liquid that is colorless and odorless. Refined glycerine is virtually non-toxic, absorbs moisture and has solvent properties.

Refined glycerine is used as a raw material for producing pharmaceutical and medical products, resins, plastics, tobacco, creams and toothpaste. In medical and pharmaceutical preparations, refined glycerine is used as a means of improving smoothness and to provide lubrication and reduce moisture loss; for personal care products, it is mainly used to reduce moisture loss or as a sweet-tasting solvent, for example, in mouthwash or chewing gum.

(d) Byproducts

The Company also produces commercial quantities of several byproducts, including crude glycerine, yellow glycerine, potassium sulfate, methyl ester residue, and fatty alcohol residue. The Company also produces a small amount of glycerine residue which is sold or treated before any disposal.

(1) Crude Glycerine and Yellow Glycerine

Crude Glycerine and Yellow Glycerine can be further processed into refined glycerine or used as fuel. The Company typically sells crude glycerine to international customers and yellow glycerine to local and international customers. The Company’s international customers of crude glycerine and yellow glycerine are generally comprised of international distributors who will sell them to end customers located in China. (2) Potassium Sulfate

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Potassium sulfate is an ingredient used in the manufacturing of nitrogen, phosphorous and potash fertilizers. The Company typically sells potassium sulfate to local manufacturers of nitrogen, phosphorous and potash fertilizers in Thailand or local farmers in Eastern Thailand. (3) Methyl Ester Residue

Methyl ester residue with high carbon levels derived from the Company’s fatty alcohols production process can be recycled as feedstock to produce fatty alcohols in order to improve yield.

(4) Fatty Alcohol Residue

Fatty alcohol residue is an ingredient in the manufacturing of candles, crayons, car wax and antifoam agent for papers and may also be re-fractionated to produce long chain fatty alcohols or used as fuel. The Company’s customers of fatty alcohol residue generally comprise manufacturers located in Thailand or international buyers, principally in China and Brazil.

2. Revenue Structure

The Company’s revenue from sale of goods comprises revenue from sales of methyl ester, fatty alcohols, refined glycerine and byproducts including crude glycerine, yellow glycerine, potassium sulfate, methyl ester residue and fatty alcohols residue as well as revenue from trading of raw materials, primarily CPO.

The following table sets out the Company’s revenue from sale of goods from each of its products for the periods indicated:

Year ended December 31,

2014 2015 2016

Revenue

from sale of goods

% of total revenue

Revenue from sale of

goods

% of total revenue

Revenue from sale of

goods

% of total revenue

Products (in Baht millions , except percentages)

Methyl ester 7,902.3 50.3% 8,239.1 56.7% 10,257.0 59.6% Fatty alcohols 6,266.0 39.9% 5,080.0 34.9% 5,640.5 32.8% Refined glycerine 738.2 4.7% 592.6 4.1% 560.5 3.3% Others 808.2 5.1% 630.5 4.3% 742.1 4.3% Total 15,714.7 100.0% 14,542.2 100.0% 17,200.1 100.0%

3. Target Customers and Distribution Channels

The Company sells almost all of its methyl ester to customers in Thailand, primarily diesel fuel producers and blenders in Thailand. The Company has established years of strong business relationship with most of its major customers since 2008 and is committed to provide high quality customer service.

The Company has entered into term contracts with certain customers for the supply of methyl ester, including PTT, PTTGC, Thai Oil, Shell, Esso, SPRC, IRPC and Chevron, which are typically for terms of one year, but may also have shorter terms. Certain contracts provide for the terms to be automatically renewed unless terminated. The Company’s contracts generally specify a range of quantity, at the buyer's option, of methyl ester to be purchased. Certain contracts have minimum offtake quantities and/or variable ranges and/or quantities depending on the applicable biodiesel mandate. Delivery schedules are generally to be mutually agreed, and certain of the Company’s contracts also require its customers to advise their offtake quantities for the next month by a specified date in advance.

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The Government sets the reference price for the sale of methyl ester on a weekly basis by applying a cost-plus formula based on the domestic market prices of CPO, RBD palm oil, palm stearin, methanol and other costs. In line with industry practice and due to market competition, the price at which the Company agrees to sell methyl ester is typically negotiated based on an agreed amount (in Baht per liter). For certain customers with term contracts, including Thai Oil and PTTGC, the Company negotiates such selling price on a quarterly basis, while for certain other customers, the Company is required to bid it’s selling price annually which will be in effect for a year if the Company’s bid is accepted.

The Company’s fatty alcohols are sold to the domestic and international markets, primarily to processers in the consumer goods and oleochemicals industries as well as traders and distributors who resell its products to their customers. The Company’s international markets for fatty alcohols are principally China, India and Europe, as well as South Africa and South America. The prices of fatty alcohols that the Company sells generally tend to be negotiated with reference to the weekly average price of fatty alcohols as reported by ICIS. The Company sells its refined glycerine products to the domestic and international spot markets, primarily to healthcare and personal care producers and distributors. The Company also uses the services of agents for some sales, to which the Company pays sales commissions. The Company’s international markets for refined glycerine are principally India and Bangladesh, as well as New Zealand. The prices of refined glycerine that the Company produces generally tend to be set with reference to the weekly average price of glycerine as reported by ICIS.

The Company does not typically enter into term contracts with its customers for the supply of fatty alcohols, refined glycerine or byproducts.

The following tables set out the Company’s sale quantity as of year ended 31 December 2014, 2015, and 2016.

Year ended December 31, 2014 2015 2016

Products Sale Quantity (Tons) Methyl ester 236,216 266,061 281,688 Fatty Alcohols 113,841 105,866 100,140 Refined Glycerine 29,854 30,464 31,834 Others(1) 32,926 46,441 39,315

Remarks: (1) Primarily comprises crude glycerine, yellow glycerine, potassium sulfate, methyl ester residue and fatty alcohols residue 4. Source of Supply

The principal feedstock option for the Company’s production of methyl ester and fatty alcohols is RBD palm oil and RBD palm kernel oil, respectively. The Company typically purchases CPO and uses local third party refineries to process the CPO that the Company purchases into RBD palm oil under tolling agreements. The Company may also purchase RBD palm oil directly from the domestic spot markets when the cost of purchasing CPO and refining them under the Company’s tolling agreements with refineries is more expensive than directly purchasing RBD palm oil.

For the Company’s production of fatty alcohols, the Company typically purchase kernel nut and Crude palm kernel oil (“CPKO”) and/or RBD palm kernel oil. In case of the purchase of palm kernel nut and/or CPKO, the Company will then use local third party crushing mill and/or refineries to crush palm kernel nut into CPKO and refine CPKO into RBD palm kernel oil. However; it is subject to the prevailing prices of the various raw materials and the cost of crushing and tolling.

The Company’s tolling agreements generally provide for a fixed fee per quantity of raw materials that are processed. These agreements generally also provide for maximum loss ratio per quantity of raw materials and specify certain parameters of quality. The Company generally enters into agreements for a term of six months, after which they will be automatically renewed for an additional term of six months unless terminated by either party by prior written notice.

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The technology of the Company’s production plant provides it with increased feedstock flexibility that enables the Company to use both CPO and RBD palm oil as well as certain other types of plant oils including palm stearin, palm fatty acid distillate, and other vegetable oil for the Company’s production of methyl ester, and palm stearin and refined coconut oil for the Company’s production of fatty alcohols.

The Company negotiates delivery terms for its raw materials at the time of purchase and payments are generally made on credit terms ranging from three to fifteen days. Other than the Company’s suppliers of catalyst, the Company is not dependent on any one supplier for any of the Company’s key raw materials. In selecting the Company’s suppliers, the Company considers several factors such as reliability, prices, consistency and quality of raw materials, delivery time and credit terms provided by the suppliers. Certain of the Company’s purchases of raw materials for fatty alcohols are imported and are purchased in U.S. dollars. The Company does not currently enter into hedging transactions for its purchases of commodities.

5. Competition

(a) Methyl ester

The Company competes on various factors for the sales of methyl ester including service standards, product quality, prices and marketing programs. The Company believes that it is able to compete effectively, through provision of high service standards, with 24-hour plant operations and logistics service which enable the Company to facilitate urgent deliveries. Moreover, the Company has been consistently maintaining high product quality.

The Company competes primarily domestically due to (i) licensing requirements for the import of methyl ester into Thailand and (ii) the generally higher cost of raw materials in Thailand, which makes it generally less competitive to export methyl ester produced in Thailand. However, from time to time, if the cost of raw materials in Thailand becomes competitive, the Company may sell methyl ester for export. The Company’s major methyl ester competitors in Thailand are Patum Vegetable Oil Co., Ltd., Energy Absolute Public Company Limited, AI Energy Public Company Limited, Bangchak Biofuel Co., Ltd. and New Biodiesel Co., Ltd.

(b) Fatty alcohols

The Company competes primarily on price and to a lesser extent on other factors such as service standards, product quality and marketing programs. The Company’s major fatty alcohols competitors are international vertically integrated oleochemicals producers including Musim Mas Holdings, Kuala Lumpur Kepong Bhd, Wilmar International Limited and PT Ecogreen Oleochemicals.

The Company also competes with producers of synthetic fatty alcohols. The decreases in the price of crude petroleum from around 2014 has lowered the production costs and prices of synthetic fatty alcohols, which has in turn resulted in price pressures for natural fatty alcohols.

(c) Refined Glycerine

The Company competes primarily on service standards, product quality and price. The Company’s major refined glycerine competitors are Patum Vegetable Oil Co., Ltd., Energy Absolute Public Company Limited, and Musim Mas Holdings and Wilmar International Limited.

Environmental Impacts The Company believes that it is an “environmental-friendly” manufacturer and has strong intention to preserve the

environment. The Company is in compliance in all material respects with applicable environmental regulations in Thailand. The Company is not aware of any environmental proceedings or investigations that would materially affect its business, cash flow, financial condition, results of operations or prospects. Summary of Material Contracts

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Most of the material contracts that the Company has entered into are with PTT and PTTGC group, which are juristic persons who may have conflict of interest. These material contracts are detailed as follow

1. Shared Services Agreements

General Shared Services Agreement between the Company and PTTGC

Parties to the agreement

▪ PTTGC (Service Provider)

Material terms of the agreement

▪ The Company entered into an agreement with PTTGC dated 6 March 2017 ▪ The Company agrees to obtain from PTTGC and PTTGC agrees to provide to the Company services

relating to Organizational Effectiveness (including scope relating to human resources, general administration and information technology), procurement, finance and accounting, corporate affair, technical and operational excellence (including scrope relating to intregrity and reliabiiilllity of such operation, process technology, process engineering and process control, and technical warehouse management), Quality Safety Occupational Health and Environment (including scope relating to Environmental Impact studies and operational compliance with EIA) and Project management (including scope relating to project feasibility studies).

▪ The Company agrees to pay a service fee monthly. Other service fee for services not specified under this agreement may be agreed from time to time.

Contractual period

▪ The agreement spans for 1 year, commencing on 1 January 2017 and ending on 31 December 2017

Termination clause

▪ This agreement may be terminated by either party by providing at least six month prior written notice or upon default of either party provided that the defaulting party has not rectified such default within 30 days from the date of receiving a written notice.

▪ PTTGC has the right to terminate this agreement if PTTGC directly or indirectly holds less than 50.0% of the Company’s paid-up capital.

General Shared Services Agreement between TFA and PTTGC




▪ TFA entered into an agreement with PTTGC dated 6 March 2017 ▪ TFA agrees to obtain from PTTGC and PTTGC agrees to provide to TFA certain services relating to

procurement, finance and accounting, technical warehouse management and Quality Safety Occupational Health and Environment.

▪ TFA agrees to pay a service fee monthly. Other service fee for services not specified under this agreement may be agreed from time to time.

Contractual period


Termination clause

▪ This agreement can be terminate by either party by providing at least six month prior written notice or upon default of either party provided that the defaulting party has not rectified such default within 30 days from the date of receiving a written notice.


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Plant Maintenance Agreements between the Company/ TFA and PTTGC




▪ The Company entered into 2 agreements with PTTGC both dated 6 March 2017. ▪ The Company agrees to obtain from PTTGC and PTTGC agrees to provide to the Company services

relating to plant maintenance services and other related works, including Routine Maintenance, Unit Shutdown Maintenance, Turnaround Maintenance, maintence services relating to Computerized Maintenance Management System, workshop and tool room maintencence and urgent maintence request from On-call system.

▪ The Company agrees to pay a service fee monthly. Other service fee for services not specified under this agreement may be agreed from time to time.

Contractual period

▪ Both agreements span for 1 year, commencing on 1 January 2017 and ending on 31 December 2017

Termination clause

▪ Both agreements may be terminated by either party by providing at least six month prior written notice or upon default of either party provided that the defaulting party has not rectified such default within 30 days from the date of receiving a written notice.

▪ PTTGC has the right to terminate both agreements if PTTGC directly or indirectly holds less than 50.0% of the Company’s paid-up capital.

Shared Laboratory Testing Service Agreement between the Company and PTTGC


▪ PTTGC (Service provider)


▪ The Company entered into an agreement with PTTGC dated 9 March 2017 ▪ The Company agrees to to obtain from PTTGC and PTTGC agrees to provide to the Company services

relating to to the testing of sample substances, feedstock, products or other works pursuant to scopes of work and conditions as agreed by the parties.

▪ The Company agrees to pay a service fee monthly according to the sample testing scheduled in the Lab Analysis Schedule specified in the agreement and special requests as per actual occurence. Other service fee for services not specified under this agreement may be agreed from time to time.

Contractual period


Termination clause

▪ This agreement may be terminated by either party by providing at least six month prior written notice or upon default of either party provided that the defaulting party has not rectified such default within 30 days from the date of receiving a written notice.


2. Product sales agreement

Methyl Ester purchase agreement between the Company and PTT


▪ PTT (Purchaser)

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▪ The Company entered into an agreement with PTT dated 29 March 2017 ▪ The Company agrees to sell and PTT agrees to purchase methyl ester. The agreement specifies a

minimum offtake amount per month depending on the prevailing biodiesel mandate announced by Department of Enery Business (“DOEB”).

▪ The selling price of methyl ester is referenced to the price of methyl ester on the delivery date as announced by EPPO adjusted by various factors.

Contractual period

▪ This agreemenet becomes effective on 1 April 2017 and ends on 31 March 2018.

Termination clause

▪ This agreement may be terminated upon default of either party or by providing at least thirty days prior written notice subjected to mutually agreement between both parties.

Methyl Ester purchase agreement between the Company and Thai Oil


▪ Thai Oil (Purchser)


▪ The Company entered into an agreement with Thai Oil dated 24 December 2015. ▪ The Company agrees to sell and Thai Oil agrees to purchase methyl ester. The agreement specified a

minimum quantity of Methyl Ester off-take. The selling price of methyl ester is referenced to the price of methyl ester on the delivery date as announced by EPPO adjusted by various factors.

Contractual period

▪ The agreement inititially spans for 1 year commencing on 1 January 2016. Afterwards the agreement is automically extended for another consecutive calendar year.

Termination clause

▪ This agreement may be terminated by providing atleast 1 month prior written notice.

Methyl Ester purchase agreement between the Company and PTTGC


▪ PTTGC (Purchaser)


▪ The Company entered into an agreement with PTTGC dated 28 March 2017. ▪ The Company agrees to sell and PTTGC agrees to purchase methyl ester. The contract specifies a

minimum and maximum off-take amounts per month. ▪ The price of Methyl Ester is reference to the Methyl Ester price announced by the EPPO adjusted by

various factors.

Contractual period

▪ The agreement is effective from 1 April 2017 to 30 June 2017.

Termination clause

▪ This agreement may be terminated upon default of either party.

3. Raw material purchase agreement

Hydrogen purchase agreement between the Company and PTTGC


▪ PTTGC (Seller)

Material terms of ▪ The Company entered into an agreement with PTTGC dated 1 April 2009

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the agreement ▪ PTTGC is committed to make available an agreed range of quantity of hydrogen, with actual quantities to be agreed prior to each delivery.

▪ The price the Company pay for hydrogen produced by PTTGC is pegged to the prevailing monthly prices of natural gas for industrial users announced by PTT, with adjustments for heating value per unit volume of hydrogen.

▪ The hydrogen procured by PTTGC shall be delivered to the company via a pipeline.

Contractual period

▪ This agreement has an initial term of 15 years commencing on 1 April 2009 after which it is automatically renewed for successive terms of one year.

Termination clause

▪ This agreement may be terminated on default of either party or by either party by providing a six months prior written notice.

Methanol purchase agreement between the Company and PTT


▪ PTT (Seller)


▪ The company entered into an agreement with PTT dated 1 January 2017. ▪ The Company agrees to purchase and PTT agrees to sell methanol. The agreement specifies a minimum

and maximum offtake amounts per year. ▪ The purchase price of methanol is referenced to the average price of methanol announced by ICIS (a

division of Reed Business Information Ltd.) and Platts (a division of McGraw Hill Financial) adjusted by various factors.

Contractual period

▪ The agreement becomes effective on 1 January 2017 to 31 December 2017.

Termination clause

▪ This agreement may be terminated upon default of either party.

4. Utility purchase agreement

Steam purchase agreement between the Company and GPSC


▪ GPSC (Seller)


▪ The Company has entered into a steam purchase agreement with GPSC , the successor company to PTT Utility Co., Ltd., dated 1 October 2007, as amended on 1 January 2011.

▪ GPSC agrees to provide the Company with steam up to a contracted capacity of 42.0 tons per hour. Under this agreement, the Company agrees to take or pay for the minimum percentage of the contracted capacity for steam. This obligation is proportionately reduced to reflect shutdowns for scheduled maintenance at the Company’s plant, periods of force majeure and certain cases of supply interruptions.

▪ The Company may increase the contracted capacity for steam by up to 5.0% every three years. ▪ The Company pays GPSC a monthly purchase price for steam comprised of three components, as follows:

o a fixed amount that is independent of the actual steam delivered; o a steam charge component, reflecting a charge for actual steam delivered; and o an unreturned condensate charge component, reflecting a charge for water resulting from the

cooling of steam which the company does not return to GPSC; ▪ The steam charge is subject to adjustment for changes in the Thai consumer price index and prices of

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natural gas. Prices for steam may also be adjusted to reflect any variation in GPSC's costs caused by a change in law.

Contractual period

▪ This agreement expires on 1 July 2023, after which it may be extended for a period of five years if agreed by both parties.

Termination clause

▪ This agreement may be terminated upon default of either party or at the occurrence of a force majeure event.

Power purchase agreemenet between the Company and GPSC


▪ GPSC (Seller)


▪ The Company has entered into a power purchase agreement with GPSC, dated 1 September 2007, as amended on 1 January 2011.

▪ GPSC agrees to provide the Company with electricity. Under this agreement, GPSC is currently committed to make available to the Company up to 4.8 MW of available electric generating capacity.

▪ The Company may increase the electric generating capacity by up to 5.0% every three years. ▪ Under this agreement, the Company agrees to take or pay for the minimum percentage of the contracted

capacity for electricity. This obligation is proportionately reduced to reflect shutdowns for scheduled maintenance at the Company’s plant, periods of force majeure and certain cases of supply interruptions.

▪ The Company pays GPSC a monthly purchase price for electricity comprised of four components, as follows:

o a capacity component, reflecting generating capacity committed to the Company; o an energy component, reflecting a base charge for actual energy delivered; o a fuel transfer component, reflecting a charge for the cost of fuel to generate electricity; and o a reactive energy component, reflecting a charge applicable when the Company fail to maintain

a specified power factor. ▪ The four components of the purchase price for electricity are based on prevailing time-of-use service rates

for large industries announced by the Provincial Electricity Authority of Thailand from time to time. Prices for electricity may also be adjusted to reflect any variation in GPSC's costs caused by a change in law.

Contractual period

▪ This agreement expires on 1 July 2023, after which it may be extended for a period of five years if agreed by both parties.

Termination clause

▪ This agreement may be terminated on default of either party or at the occurrence of a force majeure event.

5. Engineering service agreement

Plant Inspection Service agreement between the Company and PTTME


▪ PTTME (Service Provider)


▪ The Company has two agreements for plant inspection services with PTT Maintenance and Engineering dated 13 March 2017.

▪ PTTME agrees to provide the Company with a variety of inspection services comprised of plant condition

14

monitoring, pressure equipment inspection, quality assurance and quality control services and risk-based inspections.

▪ The Company pays PTTME for redered services fees comprised of a fixed and variable component and certain transportation and other costs associated with delivery of services to the Company with a specified maximum limit.

Contractual period

▪ The services under both agreements commenced on 1 March 2017 for a period of one year until 28 February 2018.

Termination clause

▪ Both agreements may be terminated by the Company by providing a 30 days prior written notice or upon default of PTTME or non-payment of amounts due by the Company.

Engineering Service agreement between the Company and PTTME


▪ PTTME (Service Provider)


▪ The Company has two agreements for plant engineering services with PTT Maintenance and Engineering dated 13 March 2017.

▪ PTTME agrees to provide the Company with a variety of engineering services relating to plant modification to improve the reliability and efficiency of equipment and processes such as contract management, site management, engineering and warehousing support, quality assurance, and safety, health and environmental management.

▪ The Company pays PTTME for redered services fees comprised of a fixed fee and certain transportation and other costs associated with delivery of services to the Company with a specified maximum limit.

Contractual period

▪ The services under both agreements commenced on 1 January 2017 for a period of three year until 31 December 2019.

Termination clause

▪ Both agreements may be terminated by the Company by providing a 30 days prior written notice or upon default of PTTME or non-payment of amounts due by the Company.

6. Land lease agreement

Land lease agreement between the Company and PTTGC


▪ PTTGC (Lessor)


▪ The Company has three agreements with PTTGC dated 25 July 2007, 29 August 2007 and 15 September 2009.

▪ The Company rent 63,797 square meter of land at the Hemaraj Eastern Industrial Estate from PTTGC. ▪ The Company pay a fixed annual rental fee under each of these agreements that is revised every five

years under a specified limit.

Contractual period

▪ These agreements have an initial period of 30 years commencing 1 August 2006 until 31 July 2036, ▪ After which it may be extended for an additional period of 20 years if agreed by both parties by providing a

written notice one year prior to the contracts’ termination.

Termination clause

▪ These agreements may be terminated upon the company’s default, or by providing a six months prior written notice.

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7. Agreements relating to secondment employees

PTTGC’s employees seconded to the Company


▪ PTTGC


▪ The Company has seconded employees from PTTGC in accordance with the agreement on secondment employees between PTTGC and the Company dated 11 November 2015 and PTTGC’s policy regarding human resource management of B.E. 2554, which states that PTTGC”s employees seconded to the Company will work at the Company for 4 years from the date the employee is sent to the Company unless PTTGC has to call back its employee prior to the specified period.

▪ PTTGC’s employees that are seconded to the Company must enter into a direct agreement with PTTGC. ▪ The seconded employees from PTTGC will maintain their status as PTTGC’s employees and will carry out

their position at the Company in accordance with the Company’s work conduct. PTTGC will make payment for salary, bonuses and benefits directly to the seconded employee from PTTGC and the Company will reimburse such payment to PTTGC at a rate and benefits actually paid by PTTGC to the seconded employees in accordance with the agreement between the Company and PTTGC.

The company’s employee seconded to PTTGC


▪ PTTGC


▪ The Company seconded its employees to PTTGC in accordance with the agreement on secondment employees between the Company and PTTGC dated 1 December 2015 and the Company’s policy regarding human resource management of B.E. 2558, which states that the Company’s employees seconded to PTTGC will work at PTTGC for 4 years from the date the employee is sent to PTTGC unless the Company has to call back its employee prior to the specified period.

▪ The Company’s employees that are seconded to PTTGC must enter into a direct agreement with the Company.

▪ The seconded employees from the Company will maintain their status as the Company’s employees and will carry out their position at PTTGC in accordance with PTTGC’s work conduct. The Company will make payment for salary, bonuses and benefits directly to the seconded employee from the Company and PTTGC will reimburse such payment to the Company at a rate and benefits actiually paid by the Company to the seconded employees in accordance with the agreement between PTTGC and the Company.

Feasibility Study - None - Technical and Management Assistance

As of 31 December 2016, PTTGC as the major shareholder of the Company had seconded a total of 32 employees, which comprise of managements and employees, to support the Company’s business operations. The seconded employees work for various departments such as operation department, marketing, sales and procurement department, finance and accounting department and engineering and maintence department. These transactions are made in accordance with terms agreed between the Company and PTTGC.

Other than Secondment employees from PTTGC the Company receive various services from PTT group and PTTGC group as follow

16

1. General Shared Service Agreements with PTTGC for receiving services relating to Organizational Effectiveness (including scope relating to human resources, general administration and information technology), procurement, finance and accounting, corporate affair, technical and operational excellence (including scrope relating to intregrity and reliability of such operation, process technology, process engineering and process control, and technical warehouse management), Quality Safety Occupational Health and Environment (including scope relating to Environmental Impact studies and operational compliance with EIA) and Project management (including scope relating to project feasibility studies)

2. Plant Maintenance Agreements with PTTGC for receiving services relating to plant maintenance services and other related works, including Routine Maintenance, Unit Shutdown Maintenance, Turnaround Maintenance, maintence services relating to Computerized Maintenance Management System, workshop and tool room maintencence and urgent maintence request from On-call system

3. Shared Laboratory Testing Service Agreement with PTTGC for receiving services relating to to the testing of sample substances, feedstock, products or other works

4. Inspection service with PTTME for receiving services relating to plant inspection services such as plant condition monitoring, pressure equipment inspection, quality assurance and quality control services and risk-based inspections.

5. Engineering service with PTTME for receiving engineering services relating to plant modification to improve the reliability and efficiency of equipment and processes such as contract management, site management, engineering and warehousing support, quality assurance, and safety, health and environmental management.

(Please refer to “Summary of Material Contracts” section and “Related Party Transactions” section for more information)

Future Projects

The Company has the following important future projects 1) Methyl Ester Plant 2

The Company plans to construct a new methyl ester plant with a capacity of 200,000 tons per annum in order to capture significant growth opportunities in the biodiesel industry in Thailand. The construction of the new methyl ester plant began in March 2017 and is expected to commence commercial operations in 2018. The new plant is located at Nong Yai District in Chonburi Province and will incorporate equipment from international engineering companies such as C.M. Bernardini International S.P.A. and Mecpro Heavy Engineering Ltd. The proposed plant is designed to have a refinery unit which is capable of using CPO with high acidity content (which is generally cheaper) without reducing production capacity and a post-treatment unit for methyl ester which will allow the Company to produce high quality methyl ester with low contamination or impurities. The Company also intends to have the production process that consumes less utilities, such as steam, in order to minimize utilities costs. Plant 2 will allow company to have flexibility in feedstock and capacity adjustment between the 2 plants. This plant optimization may allow company to reduce the production cost.

The Company anticipates that the total capital expenditure for the new methyl ester plant will be approximately Baht 1,650.0 million. The Company intends to use a portion of the proceeds of the offering and internal cash flow to finance a portion of these costs.

2) Joint Venture for Palm Kernel Oil Extraction Plant In order to increase the security of the Company’s access to CPKO, on 1 November 2016, the Company has entered into a joint

venture with Eastern Palm Oil Company Limited in which the Company holds a 30.0% interest to develop a palm kernel oil extraction plant with a raw material capacity of 90,000 tons per annum, which will process palm kernels into CPKO. The Company believes this joint venture will enable the Company to secure CPKO at more competitive prices which should improve the profitability of the Company’s fatty alcohols. The plant is expected to commence commercial operations in 2017.

The Company anticipates that the total investment costs for the palm kernel oil extraction plant will be approximately Baht 380.0 million.

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3) Joint Venture for Biocomplex Project The government supports and encourages the development of 10 targeted industries to be the new engine of economic growth (New S-curve). One of the targeted industries which will be given the investment priviledges is the biochemicals and bioplastics industry. This is also part of government effort to move toward the “Bioeconomy” by having the ecomomy driven by science, technology, and innovation (Thailand 4.0). Bioeconomy will leverage on Thailand’s current agricultural-based economy by expanding it into downstream, high value products, benefit from Thailand’s competitive advantage on its agricultural products and biodiversity. The policy will allow for the development of bio-based raw material into bio-based energy, bio-based chemicals/ materials, food/feed for future, and biopharmaceuticals. The government will select sugar cane and cassava in which Thailand is the largest and second largest exportor as a pioneer raw material, and may consider expanding to use palm and rubber to be processed into various products throughout the value chain, creating value-added and sustainable value to agricultural products.

In order to drive such policy, the government has arranged for the drafting and signing of Memorandum of Understanding (“MoU”) to develop Bioeconomy on 23 January 2017 to boost competitive edge of the country. The purpose of this MoU is to encourage cooperation among public sector, private sector, and academic institutions to drive development and investment of private sector, from modern farming, investment in infrastructure, R&D, and expanding into new markets. The investment in first phrase (2016-2018) is expected to be on bio-based energy, bio-based chemicals/ materials, food/feed for future, and biopharmaceuticals.

The Company partners with KTIS in pushing Biocomplex project to become part of government’s plan on bioeconomy. Biocomplex project proposed by the Company and KTIS will involve the production of (1) biofuel (2) electricity and stream to biomass and (3) bioplastic and biochemical.

The Company intends for its Biocomplex to be developed in two phases. In the first phase, the Company plans to develop (i) a sugarcane crushing mill with a crushing capacity of 2.4 million tons per annum that produces concentrated sugarcane juice and high-test molasses, (ii) an ethanol plant with a capacity of 186 million liters per annum that would use the concentrated sugarcane juice and high-test molasses produced by the sugarcane crushing mill as feedstock, (iii) a biomass power plant and high pressure steam plant to generate electricity and steam for the Company’s Biocomplex, as well as to supply to external parties in case of excess capacity and (iv) other utility infrastructure to serve the Biocomplex and future biochemicals business. Biocomplex project is expected to locate in Nakornsawan province. The Company is collaborating with a local university and the overseas research and innovation center to support the Company in the study of this project. The Company is in the process of feasibility and detailed study, conducting an environmental impact assessment report for the construction of the Biocomplex and related infrastructure, as well as acquisition of related licenses and regulatory approval in regards to amendment of Sugar and Sugarcane Act. In addition, the Company’s engineering team is preparing engineering designs for this project with certain engineering consultants. The Company plans to commence construction of the project in the forth quarter of 2017. The first phase of the Company’s Biocomplex is expected to commence commercial operations in the forth quarter of 2019.

The Company anticipates that the total investment costs for the first phase of the Biocomplex will be approximately Baht 7,615.0 million of which the Company expects to be financed by debt and equity contribution by the Company and its joint venture partner. The Company intends to use a portion of of the net proceeds to fund the Company’s equity contribution requirement. The Company’s Board of Directors approved in principle the first phase of the Biocomplex project in August 2016. The Company intends to conduct a feasibility and investment study so that the results may be presented to the Company’s Board of Directors for their further action on the first phase of the Biocomplex project within 2017.

Following the first phase of the Company’s Biocomplex, in the second phase, the Company is in the process of conducting feasibility study to develop bioplastics and biochemicals plants to process sugarcane juice, ethanol, and other raw materials from phase 1 for the production of (1) Biochemical products (such as Lactic acid, Succinic Acid), which will be used for Bioplastic industry; (2) products for food industry (such as Lactic acid, low calorie sugar) for food industry; (3) products for animal feed industry (such as additives, protein and vitamin for animal farm food (amino acids) and from yeast extract) for animal feed industry; and (4) sugar cane ethanol derivatives such as Butanol, Bioplastic feedstock). The second phase will not only use the technology

18

from potential partners but also potentially utilize the technology and expertise of PTTGC’s subsidiaries such as NatureWorks and Myriant.

As a fully integrated production complex (linking raw material production, utility, and crushing mill together), the Biocomplex should create following synergy benefits/cost savings between biochemicals and sugarcane producers.

Raw material cost saving from shared raw material sourcing and infrastructure

Logistic cost saving from proximity of plant and raw material

Utility cost saving using power from biomass, waste from sugarcane farm, and biogas from waste water

Utilizing waste from production process to produce fertilizer that can in turn be used in agricultural sector

The above benefits should enhance its competitiveness in terms of unit cost, raw materials stability, and operational sustainability in the long-term.

Related Party Transactions The Company had entered into various transactions with juristic persons who may have conflict of interest in accordance

with Notification of the Securities and Exchange Commission No. KorChor. 17/2551 Re: Determination of Definitions in Notifications relating to Issuance and Offer for Sale of Securities dated 15 December 2008 and as amended, which included major shareholders and companies that the Company’s major shareholders is a controlling person or has significant interests in. Such related party transactions are made for the purpose of the Company’s business operations, where the aforementioned transactions can be summarize and categorized in to the following 4 categories

1. Normal Business Transactions are transactions that the Company and its subsidiaries made in their normal business operations and are necessary to the operation of the Company and its subsidiaries. Therefore, in the future the Company and its subsidiaries will continue to have transactions in similar nature. The important Normal Business Transactions the Company and its subsidiaries have can be summarized as follow:

1.1. Purchases of important raw materials used in the Company’s production process. These transactions have general commercial terms that a conflicting person had with third parties and/or made in the interests of the Company and its subsidiaries. These include:

Methanol purchase from PTT, who is one of the few Methanol suppliers that is capable of delivering Methanol to the sea port near Map Ta Phut Industrial Estate

Hydrogen purchase from PTTGC, who has a hydrogen production plant that can delivery hydrogen to the Company via a pipeline

1.2. Sales of products including methyl ester, fatty alcohols, glycerine and other byproducts and tankstroage services provided to customers in the PTT group and PTTGC group. The Company sets price and other commercial terms on an arm’s length basis

2. Supporting Business Transactions are transactions that the Company and its subsidiaries made to support their normal business operations. These transactions have general commercial terms that a conflicting person had with third parties and/or made in the interests of the Company and its subsidiaries. In the future the Company and its subsidiaries will continue to have transactions in similar nature. The important Normal Business Transactions the Company and its subsidiaries have can be summarized as follow: 2.1. Transactions relating to Shared Service Agreements including General Shared Service Agreement, Plant Maintenance

Shared Service and Lab Shared Service with PTTGC, which is relating to sharing human resources with PTTGC 2.2. Transactions relating to PTTGC and PTT’s employees seconded to the Company 2.3. Transactions relating to the Company’s employees seconded to PTTGC and TEX 2.4. Transactions relating to the agreement for Plant Engineering service and Plant Inspection service with PTTME

19

2.5. Transactions relating to the agreement for emergency control center service with NPC S&E 2.6. Transactions relating to safety service agreement with NPCSG 2.7. Transactions relating to the agreement to storage tanks rental and services with TTT and TOCGC 2.8. Transactions relating to the agreement to lease piperack infrastructure with PTT, PTTGC and EFT 2.9. Transactions relating to the agreement for operation and maintencance of the piperack infrastructure with EFT 2.10. Transactions relating to agreements to purchase power, steam and water from GPSC 2.11. Transactions relating to the purchase of water for fire extinguishing with TOCGC 2.12. Transactions relating to Insurance policy with Dhipaya 2.13. Transactions relating to office rental from PTTGC and PTT Phenol

3. Transactions relating to Assets

3.1. Transactions relating to the agreement to rent land in Map Ta Phut Industrial Estate with PTTGC

3.2. Transactions relating to the acquisition of TEX from PTTGC

4. Financial Support

4.1. Transaction relating to short term loan agreement under the LMS system between the Company and PTTGC. Currently PTTGC has entirely paid back the loan to the Company as of 30 September 2015

4.2. Transactions relating to long term loan agreement under Credit Facility A and C between the Company and PTTGC. Currently the Company has entirely paid back the loan to PTTGC as of 5 November 2015

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Nature and description of important related party transactions between the Company and Juristic persons who may have conflict of interest Important Related party transactions the Company had entered with Juristic persons who may have conflict of interest for the year ended 31 December 2015 and year ended 31 December 2016 are detailed as follow

(1) PTT

Relationship with the Company: Major shareholder of PTTGC, the major shareholder of the Company. PTT owns 48.89% interests in PTTGC

Agreement and Nature of the transaction

Transaction Size (Baht Million)

Neccesity and rationale of the transaction Opinion of the Audit

Committee Year ended

31 December 2015

Year ended

31 December 2016 Income from sales of methyl ester Revenue Account recievable

4,733.31 372.09

5,155.05 330.16

The Company had entered into an agreement with PTT, where PTT agrees to purchase methyl ester from the Company (Please refer to “Contract summary” section for more information) in the quantity that is specified in the agreement. The price is reference to methyl ester price announced by EPPO adjusted by various factors that depends on delivery location, market competition, quality of methyl ester and the quantity of methyl ester specified in the agreement.

The following income from sales of products is a normal business transaction with general commercial terms, where the Company quoted selling price on an Arm’s length basis.

The transaction is part of the Company’s normal business operation that is reference to the market price and is made on an Arm’s Length Basis.

Expenses paid for purchase of methanol Expenses Account payable

(290.14) (0.21)

(274.63) (30.43)

The company had entered into an agreement with PTT to purchase methanol (Please refer to “Contract summary” section for more information), which is one of the major raw material used in the Company’s production process. The agreement specifies a minimum off-take quanity. The price is referenced to historical average price announced by ICIS and PLATTS (a devision of Mcgraw Hill Financial) adjusted by various factors

The methanol purchase agreements are procured on a yearly basis and the Company compares the pricing formula with other suppliers prior to entering into an agreement.

The transaction is part of the Company’s normal business operation and the price is reference to the market price. The Company also compares price with other suppliers prior to entering into an agreement every year.

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(2) PTTGC

Relationship with the Company: (1) Major shareholder in the Company holding over 99.99% interests in the Company, (2) the Company and PTTGC have 1 mutual director (3) 4 of the Company’s directors, are PTTGC’s managements and (4) TFA has 1 director that is PTTGC’s management





31 December 2015

Year ended

31 December 2016 Income from sales of methyl ester on the agreement Revenue Account recievable Income from sales of methyl ester on spot basis Revenue Account recievable

220.19 43.93

529.43 -

960.82 58.79

- -

The Company had entered into an agreement with PTT, where PTT agrees to purchase methyl ester from the Company (Please refer to “Contract summary” section for more information) in the quantity that is specified in the agreement. The price is reference to methyl ester price announced by EPPO adjusted by various factors that depends on delivery location, market competition, quality of methyl ester and the quantity of methyl ester specified in the agreement.

For the first 9 months of 2015, PTTGC purchases methyl ester from the Company on a spot basis given that the Company and PTTGC are reviewing the period of the agreement from 1 year to 3 months. Regardless, the Company uses the same basis in setting prices as they did for the agreements.

The transaction is part of the Company’s normal business operation that is reference to the market price and is made on an Arm’s Length Basis.

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31 December 2015

Year ended

31 December 2016 Expenses paid for purchase of hydrogen Expense Account payable

(94.19) (4.37)

(75.53) (8.30)

The Company entered into an agreement with PTTGC to purchase hydrogen (Please refer to “Contract summary” section for more information), which is one of the major raw material used in the Company’s fatty alcohol production process, in accordance with the quantity specified in the agreement. The price of hydrogen is referenced to the natural gas price for industrial users announced by PTT, adjusted with the pipe delivery fee and a profit margin.

The following transaction is a normal business transaction and occurs out of necessity, where the Company had chooses hydrogen suppliers in Map tha put industrial estate that are capable of delivering hydrogen to minimize the risk of transaporting hydrogen because hydrogen has an explosive characteristic. Furthermore the Company had considered the purity of hydrogen which can help increase the effectiveness of catalysts in the production process.

PTTGC is a hydrogen supplier in Map tha put industrial estate that can deliver hydrogen via a pipeline and also offer the lowest price.

The transaction is necessary and appropriate for the Company’s normal business operation, to whic the purchase price is referenced to a market price and has commercial terms that follows the principle that other suppliers provide.

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31 December 2015

Year ended

31 December 2016 Expenses paid for services relating to General Shared Service Expense Account payable

(32.58) (2.77)

(31.30) (4.55)

The Company and TFA had entered into the General Shared Serivces agreement with PTTGC (Please refer to “Contract summary” section for more information), which follows a resource sharing policy of the PTTGC group regarding allocation of expenses relating to such resources, in accordance with the scope of services and number of employees required to provide such scope of service specified in the agreement. Such transaction could help the Company save costs from hiring full time employees for certain scope of work.

The fees charged by PTTGC are referenced to the wage and number of full time equivalent employees for each of the scope in the agreement. The service rate uses the same principal that is generally used by other group of companies. Furthermore, the service rate charged to the Company is the same for all of PTTGC’s subsidiaries.

Although there are no other service providers that provides exactly the same service, when considering from most of the services provided by other outsource service providers that are similar, the rate from PTTGC is compariable to that of other outsource service providers in the market.

It is necessary for the Company and TFA to receive some of the services from PTTGC to support its normal business operation, where receiving such service from PTTGC will enable the Company with effective management and cut down costs when compare with hiring its own employee and develop a system that is equivalent to the standards that is currently in place for the Company.

The transaction is necessary and appropriate for supporting the Company’s normal business operations. The transaction also has lower cost than hiring full time employees and developing its own system. The service rate charged is also the rate that PTTGC charged all its subsidiaries and is follows the same principal that is generally used by other shared service providers in the marker.

24





31 December 2015

Year ended

31 December 2016 Expenses paid for services relating to Plant Maintenance Shared Service Expense Account payable

(42.19) (3.76)

(50.20) (4.47)

The Company and TFA had entered into the Plant Maintenance Shared Serivces agreement with PTTGC (Please refer to “Contract summary” section for more information), which follows a resource sharing policy of the PTTGC group regarding allocation of expenses relating to such resources, in accordance with the scope of services and number of employees required to provide such scope of servicespecified in the agreement. Such transaction could help the Company save costs from hiring full time employees for certain scope of work.

The fees charged by PTTGC are referenced to the wage and number of full time equivalent employees for each of the scope in the agreement. The service rate uses the same principal that is generally used by outsource service provider in the market. Furthermore, the service rate charged to the Company is the same for all of PTTGC’s subsidiaries.

Although there are no other service providers that provides exactly the same service, when considering from most of the services provided by other outsource service providers that are similar, the rate from PTTGC is compariable to that of other outsource service providers in the market.

PTTGC has expertise in carrying out maintenance work on machines and equipments, which enables the Company with flexibility in carry out its business operations and also provide lower expenses than hiring full time employee, training employees and developing a system that is equivalent to the standards that is currently in place for the Company.

The transaction is necessary and appropriate for supporting the Company’s normal business operations. The transaction also has lower cost than hiring full time employees and developing its own system. The service rate charged is also the rate that PTTGC charged all its subsidiaries and is follows the same principal that is generally used by other outsource service providers in the market.

25





31 December 2015

Year ended

31 December 2016 Expenses paid for services relating to lab shared service Expense Account payabe

(14.63) (1.64)

(16.59) (1.98)

The Company had entered into the Lab Shared Serivces agreement with PTTGC (Please refer to “Contract summary” section for more information), which follows a resource sharing policy of the PTTGC group regarding allocation of expenses relating to such resources, in accordance with the scope of services and number of employees required to provide such scope of service specified in the agreement. Such transaction could help the Company save costs from hiring full time employees for certain scope of work.

The fees charged by PTTGC are referenced to the wage of employees and the expenses relating to usage of equipments and chemicals used to carry out lab testing services that actually occur in accordance with the scope speicfid in the agreement. The service rate uses the same principal that is generally used by outsource service provider in the market. Furthermore, the service rate charged to the Company is the same for all of PTTGC’s subsidiaries.

PTTGC has expertise in carrying out lab testing of chemical sample, which enables the Company with flexibility in carry out its business operations and also provide lower expenses than hiring full time employee, training employees and developing a system that is equivalent to the standards that is currently in place for the Company.

The transaction is necessary and appropriate for supporting the Company’s normal business operations. The transaction also has lower cost than hiring full time employees and developing its own system. The service rate charged is also the rate that PTTGC charged all its subsidiaries and is follows the same principal that is generally used by other outsource service providers in the market.

26





31 December 2015

Year ended

31 December 2016 Expenses paid for services relating to secondment sent from PTTGC Expense Account payable

(24.87) (11.48)

(66.89) (22.42)

PTTGC as a major shareholder in the Company had seconded its employees to the Company (Please refer to “Contract summary” section for more information), to support the Company’s usual business operation. PTTGC will be responsible in making payment of salary, bonus and various benefits to PTTGC’s employees seconded to the Company, where the Company will reimburse PTTGC for the wages and benefits PTTGC had paid to the seconded employee as agreed between PTTGC and the Company. The transaction enables the Company with effective management when considering the experience of the aforementioned employee and the expense relating to training a new employee that the Company hired by itself.

The transaction is necessary and appropriate for supporting the Company’s normal business operation. The fees paid for such service is paid for what had actually occurred.

Income from services relating to secondment sent to PTTGC Revenue Account recievable Unearned revenue

56.11 6.67 9.75

18.59 2.64 3.26

The Company as a subsidiary of PTTGC had seconded its employees tp PTTGC (Please refer to “Contract summary” section for more information), to support the PTTGC’s usual business operation. The Company will be responsible in making payment of salary, bonus and various benefits to the Company’s employees seconded to the Company, where PTTGC will reimburse the Company for the wages and benefits the Company had paid to its seconded employee as agreed between the Company and PTTGC.

The transaction is necessary and appropriate for supporting the Company’s normal business operation. The fees paid for such service is paid for what had actually occurred.

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31 December 2015

Year ended

31 December 2016 Expenses from land lease Expense Account recievable Account payable

(5.44) 3.17

-

(5.43)

- (2.27)

The Company had entered into 3 agreements with PTTGC (Please refer to “Contract summary” section for more information) to rent the land in Map Tha put industrial estate to produce methyl ester, fatty alcohol glycerine and other byproducts. The 3 agreements are for renting land area of 27-3-13.6 rai, 2-0-86.4 rai and 9-3-43.9 rai respectively.

Having a production plant on the Map tha phut industrial estate can help lower the cost of transporting some of the importatnt raw materials, which enables the Company with production cost advantages. Currently the Company pays a land rental fee of Baht 136,500 per rai per year, which is referenced to the announced land rental rate from Industrial Estate Authority of Thailand (“IEAT”) and is the rental rate that PTTGC charge to other lessee and its subsidiaries.

The following transaction is a transactions relating to assets, which is necessary and appropriate. The rental rate for the land is comparable with other lands with similar characteristic and is quoted in accordance with the announced land rental rate by Industrial Estate Authority of Thailand.

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31 December 2015

Year ended

31 December 2016 Investment in TEX shares Investment Purchase

-

(690.50)

The Company has acquired 50% interest in TEX from PTTGC and its representatives on 31 March 2016, where the Company paid Baht 690.50 million for 2.1 million shares at the price of Baht 328.80 per share. The price paid is the fair value of the target company which is assessed using Discount Cash Flow (“DCF”) method analyzed by the Company’s financial advisers that the Company had engaged for TEX acquisition. Furthermore such acquisition is made in accordance with PTTGC’s plan in designating the Company as the Green Flagship Company of the PTTGC group.

The following transaction is a transactions relating to assets, which is necessary given the Company’s plan to become the designated green flagship of the PTTGC group. The transaction is also in accordance with the plan to expand the Company’s Oleochemical business through Value Chain Integration. The fair value of the target company has been assessed by the Company’s financial advisers.

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(3) TEX

Relationship with the Company: (1) previously a company that PTTGC owns 50.00% interest, where as of 31 March 2016 PTTGC and its representatives had sold all its interests in TEX to the Company (2) the Company and TEX have 2 mutual directors and (3) 1 of the Company’s management is a TEX’s director and management





31 December 2015

Year ended

31 December 2016 Income from sales of fatty alcohol Revenue Account recievable

742.98 126.49

1,756.76 419.05

The Company sells fatty alcohol products to TEX, which is a main raw material in TEX’s production process.

TEX is the Company’s major customer who had its production plant location opposite to the Company’s production plant, which can be delivered to TEX via a pipeline connecting between the Company’s plant and TEX’s plant. The price of the afforemention product is referenced to the market price of fatty alcohol announced by ICIS adjusted for various factor such as delivery location, market competition and quantity of the afformention product.


The transaction is a normal business operation that is reference to the market price and is made on an Arm’s Length Basis.

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(4) GPSC

Relationship with the Company: (1) a company that PTT owns 22.58% interest (2) a company that PTTGC owns 22.73% interest and (3) The Company and GPSC have 2 mutual directors





31 December 2015

Year ended

31 December 2016 Expenses from purchase of electricity Expense Account payable

(111.59) (11.54)

(109.07) (9.49)

The Company had entered into a long term agreement with GPSC to purchase electricity (Please refer to “Contract summary” section for more information) which specified a minimum off-take portion specified in the agreement.

The following transaction is for supporting the Company’s normal business operation. The terms and conditions of the agreement is mutually agreed by the Company and GPSC, to which electricity tarriff is referenced to tariff announced by Provincial Electricity Authority and the fuel used for electricity generation. Such tariff is used in principal by GPSC for all its customers whether related or not related.

Furthermore, GPSC is one of the electricity producers for industrial user that is considered reliable.

The transaction is made for supporting the Company’s normal business operations, and arises out of necessity. The tariff for electricity is referenced to Provincial Electricity Authority announcement and is principally used by GPSC for all its customers.

31





31 December 2015

Year ended

31 December 2016 Expenses from purchase of steam Expense Account payable

(424.84) (33.23)

(357.86) (30.95)

The Company had entered into a long term agreement with GPSC to purchase steam (Please refer to “Contract summary” section for more information) which specieid a minimum off-take portion specified in the agreement.

The following transaction is for supporting the Company’s normal business operation. The terms and conditions of the agreement is mutually agreed by the Company and GPSC, to which steam price is referenced to natural gas price and clarify water, adjusted by consumer price index. Such tariff is used in principal by GPSC for all its customers whether related or not related.

Furthermore, GPSC is one of the steam producers for industrial user that is considered reliable.

The transaction is made for supporting the Company’s normal business operations, and arises out of necessity. The price of ssteam is referenced to the price of its raw material and is principally used by GPSC for all its customers.

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(5) PTTME

Relationship with the Company: (1) a company that PTT owns 40.00% interest and (2) a company that PTTGC owns 59.99% interest





31 December 2015

Year ended

31 December 2016 Expenses for Plant Engineering Service and Plant Inspection Service Expense Account payable

(17.18) (2.07)

(17.93) (7.24)

The Company and TFA had entered into the Plant Engineering service and Plant Inspection service agreement with PTTME (Please refer to “Contract summary” section for more information), which comprises of reporting of operations and other site management services relating to engineering such as controlling the installation of new equipments and machineries, improvement of machines in the production plant and technical warehouse, inspection services for machines and equipments, quality control and assessment, and coordination with employees providing services under the Shared Service agreements between the Company and PTTGC.

The following transaction is for supporting the Company’s normal business operation. The service fee is referenced to the number of PTTME’s employees and the equipment use for providing services. Although there are no other service providers that provides exactly the same service, when considering similar services provided by other service providers, the rate from PTTGC is compariable to that of other service providers in the market.

The transaction is necessary and appropriate for supporting the Company’s normal business operations. The service fee is also comparable to the services priced by other service providers for similar services.

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(6) Thai Oil

Relationship with the Company: a company that PTT owns 49.10% interest





31 December 2015

Year ended

31 December 2016 Income from sales of methyl ester Revenue Account recievable

788.15 47.24

998.41 49.85

The Company had entered into an agreement with Thai Oil, where Thai Oil agrees to purchase methyl ester from the Company (Please refer to “Contract summary” section for more information). The price is reference to methyl ester price announced by EPPO adjusted by various factors that depends on delivery location, market competition, quality of methyl ester and the scheduled quantity of methyl ester that Thai Oil agrees to purchase.


The transaction is a normal business operation that is reference to the market price and is made on an Arm’s Length Basis.

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Contingencies and Commitment The following table illustrates the Company’s important contractual obligations as of 31 December 2016 Expected payment due by period

Total Less than 1

year 1-3 years 3-5 years

More than 5 years

(in Baht million) Long-term bank loans(1) 2,621.2 230.6 617.6 1,008.0 765.0 Finance leases(2) 14.6 3.0 5.2 6.4 - Purchase obligations 2,966.7 379.9 801.4 860.9 924.5 Operating lease obligations 289.4 35.2 69.2 53.4 131.6 Note: (1) Long-term bank loans include payment obligations with respect to principal only and not interest (2) Finance leases include payment obligations excluding interest

Certain Key Risk Factors

An investment in shares of GGC involves risks. The following describes some of the significant risks that could affect GGC and the value of the shares. There are also other risks that are material and other risks which currently the Company believed to be immaterial, may also impair its business operations, financial condition, results of operations and prospects, and could turn out to be material.

1. Product prices are volatile and may be influenced by global trends

Prices for the Company’s products are based upon, or affected by, (i) global prices of raw materials for the Company’s products, competing products and the finished products themselves in global markets and (ii) general supply and demand dynamics, all of which are subject to significant fluctuations.

Domestic prices of methyl ester are negotiated with reference to a reference price for the sale of methyl ester announced by EPPO. EPPO sets such reference price on a weekly basis by applying a cost-plus formula based on the domestic market prices of CPO, RBD palm oil, palm stearin, methanol and other costs. However, prices of the Company’s feedstock may not be same as the announced domestic prices by Department of Internal Trade. Such prices are affected by multiple factors, including supply and demand for those products and other vegetable oils, global economic developments, the price of crude oil and weather, among others. In general, the prices of the Company’s feedstocks are positively correlated to the announced domestic prices by Department of Internal Trade.

Prices for fatty alcohols are based on, among other factors, (i) raw material prices, (ii) domestic and global demand for fatty alcohols, and (iii) competitive factors such as industry capacity and output levels. The Company also competes with producers of synthetic fatty alcohols, a substitute product to the Company’s natural fatty alcohols, and, to a lesser extent and for certain limited applications. In relation to customers who are equally able to use natural or synthetic fatty alcohols, depending on the price, the price of synthetic fatty alcohols partly limits the price the Company can charge for its natural fatty alcohols.

Furthermore, since prices for CPO and palm oil derivatives, such as palm kernel oil, as well as prices for natural fatty alcohol substitutes such as synthetic fatty alcohols, are linked to commodities markets, in particular markets for crude oil, prices for the Company’s products may be affected by global trends, over which the Company have no control, such as the significant decline of crude oil price since the middle of 2014, the currency fluctuation, availability of supply, consumer demand, taxes and tariffs, changes in governmental policies and programs, and other unforeseen circumstances. Continued volatility in the prices of crude oil and other commodities may lead to fluctuations in the prices of CPO and related products the Company use as raw materials. The value of the Company’s inventories is also subject to fluctuations in market prices.

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Although increases or decreases in the price of raw materials may result in corresponding increases or decreases in the price of the Company’s products, the Company cannot assure that such prices will correspond in the same proportion or such prices for its products will increase or can be maintained at current levels. Any decrease in the prices of the Company’s products could adversely affect its business, cash flow, financial condition, results of operations and prospects.

Generally, profit margin from the Company’s sale of methyl ester is not affected by the fluctuation of raw materials price and products price because the Company’s sales of methyl ester is referenced on a cost-plus formula which is based on the announced palm oil price by Department of Internal Trade and other costs plus additional margin from EPPO. This will partly reflect the Company’s cost. For fatty alcohols, the Company conducts risk management in order to minimize the volatility by monitoring raw material price and palm oil derivatives price, as well as considering the improvement of the Company’s production unit and the suitability of feedstock selection in order to maintain its current profit margin. In addition, the Company also focuses on inventory control by sourcing the key raw materials after the Company have agreed with its customers on their purchase order or the Company’s customers confirm their order with an agreed price.

2. Uncertainy from the increase of raw material prices and inability to adequately source raw materials at the aceeptable price

The key raw materials that the Company uses in its operations are CPO and CPKO. The largest component of the Company’s cost of sales is raw materials. Raw materials accounted for 88.8%, 88.0%, and 90.2% of its total cost of sales for 2014, 2015, 2016, respectively. To remain competitive, the Company needs to secure a stable and adequate supply of raw materials at acceptable prices.

Thailand imposes a significant customs duty on palm oil-based raw materials used for the production of derivative products (such as methyl ester and fatty alcohols) that are sold domestically (such customs duty paid can be reclaimed by the Company if the derivative products produced from the imported raw materials are exported). As the Company sells substantially all of its methyl ester production domestically, it is not economically feasible for the Company to purchase CPO and other palm oil-based raw materials from the international markets for the Company’s production of methyl ester. For the Company’s production of fatty alcohols, to the extent that any shortfall of palm kernel oil in Thailand requires the Company to purchase imported palm kernel oil or RBD palm kernel oil to produce fatty alcohols, its domestic sales of such fatty alcohols may be less competitive as compared to the Company’s overseas competitors due to the imposition of such customs duty. In addition, the Company does not typically enter into long-term contracts for the supply of palm oil-based raw materials, thus the Company is generally exposed to the availability and the prevailing price for such raw materials on spot markets. Furthermore, if the Company is unable to secure a stable and adequate supply of raw materials at acceptable prices due to the various types of events, such as the CPO shortage, which may impair Company’s bargaining power with palm oil supplier, the Company’s operating costs may increase or the Company may have to slow down or shut down its production plant. The Company may purchase at the higher volume than the Company normally purchase in the event that there is the decrease of raw material price or the Company would like to benefit from the economy of scale, which could result in slower inventory turnover. These afforemention scenarios could have materially and adversely affect the Company’s business operations.

To mitigate such risks, the Company closely monitors the market price and production of palm oil and palm kernel oil. The Company also establishes relationships with palm oil and palm kernel oil producers and traders, in Thailand and outside of Thailand, to enable the Company with choices in procurement of palm oil and palm kernel oil at reasonable prices and adequate quantity. Furthermore, the Company had a plan to invest in palm kernel extraction plant project to decrease the afforemention risk.

The Company is currently able to procure hydrogen, which is a key raw material to produce fatty alcohols, at a competitive price, because the Company’s plant is located at the same industrial complex where PTTGC, the Company’s hydrogen supplier, is located. In addition, the Company’s location allows the Company to transport hydrogen through a pipeline that connects the hydrogen production facilities with the Company’s production plant, which significantly reduces logistics costs related to transportation. The Company may have to purchase hydrogen on the market in the future from another supplier which will involve additional costs such as requiring the Company to lease or connect to a new pipeline network. In addition, PTTGC may not continue

36

to produce hydrogen in close proximity to the Company’s production facility. Any such change in the supply arrangements for hydrogen may have a material adverse impact on the Company’s business, cash flow, financial condition, results of operations and prospects. Further, the price of hydrogen tends to be linked to the price of natural gas, thus any increase in natural gas prices in the future may cause the Company to incur higher costs related to the purchase of hydrogen, which could have a material adverse impact on the Company’s business, cash flow, financial condition, results of operations and prospects.

The Company purchases a proprietary catalyst from a leading German Company which is required for the hydrogenation process of the Company’s fatty alcohol production with a 15 year contract, the price of catalyst at whichthe Company purchase is adjusted annually from an initial base price based on changes in prices of certain metal commodities and average labor cost in Germany. If the Company is unable to obtain such catalyst from this supplier, or if the price of the catalyst increases significantly, the Company’s operating costs may increase or the Company may have to slow down or shut down its fatty alcohols plant, which could have a material adverse impact on the Company’s business, cash flow, financial condition, results of operations and prospects. Nonetheless, the Company reserves some of its catalysts to assure itself for continuous production process.

3. Demand for methyl ester in Thailand is heavily dependent on the biodiesel mandate set by the Government as well as on Government regulations on the price structure of petroleum products.

Demand for methyl ester is largely dependent, in addition to general diesel fuel consumption, on the biodiesel mandate set by the Government under Notification of the Department of Energy Business of the Ministry of Energy regarding Prescription of Properties and Quality of Diesel Fuel B.E. 2556 (2013), as amended from time to time, issued under Fuel Trade Act B.E. 2543 (2000). This notification requires diesel fuel sold at the petrol station to be blended with a percentage range of methyl ester. The methyl ester the Company produces is used by the Company’s customers to blend with petroleum diesel in order to produce retail diesel fuel which complies with the specification required by the Department of Energy Business. Substantially all of the Company’s methyl ester production is sold domestically.

The Government regularly adjusts the biodiesel mandate from time to time in order to balance domestic palm oil supply and demand, and also palm oil stock in the Country. The Government generally decreases the minimum level of methyl ester required to be mixed with petroleum diesel fuel from time to time, taking into account the availability of raw materials in order to ensure sufficient palm oil is available for processing into cooking oil and for food consumption domestically, as well as to keep retail diesel fuel prices manageable for Thai consumers. Furthermore, the Government may adjust the biodiesel mandate minimum requirement based on other factors or policy objectives, which may include economic factors. Such change to the biodieselmandate should have a material adverse impact on the domestic demand for methyl ester and the company’s sales of methyl ester

Furthermore, any future increase of the level of the biodiesel mandate will also be subject to any limitations on the ability of existing diesel engines to use retail diesel fuel containing such mandated level of methyl ester.

To mitigate the risk of a decrease in sales of methyl ester, the Company manges its raw material and inventory level, and also utilizes alternative feedstocks in order to maximize its profit margin

Currently the Government regulates the price structure of petroleum products to, among others, encourage the use of biodiesel fuel and supports the domestic palm oil industry generally, as well as manage the price of various types of retail fuel. The Government effects this through adjusting the excise taxes and fund contributions for fuel that is eventually sold at the petrol station, and by reducing the excise taxes and fund contributions applicable (or in certain circumstances such as an environment of high crude oil prices, increasing subsidies) to retail diesel fuel relative to other fuel. The Company cannot assure you that the Government will not change its policy for the promotion of the use of biodiesel fuel relative to other fuels. Any reduction or removal of the Government support for the competitiveness of biodiesel fuel relative to other fuel sources would likely lead to a decrease in demand for methyl ester, which would have a material adverse impact on the Company’s business.

In addition, the import of methyl ester into Thailand requires a license from the Government which the Company understands may be difficult to obtain. Any future relaxation or removal of the licensing requirements for the import of methyl ester,

37

or the customs duty on the palm oil-based raw materials that the Company imports could increase competition and have a material adverse impact on the Company’s business and prospects

4. Climate change, natural disaster, and/or the related legal and regulatory measures to address climate change may affect the volume and the Company’s raw material price or product price

There is growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters. In the event that such climate change has a negative effect on agricultural productivity, there may be a decrease in production of palm oil and palm kernel oil, key raw materials for the production of methyl ester and fatty alcohols, which would affect the Company’s business. Furthermore, the El Niño phenomenon has in the past had, and may in the future have, an adverse effect on the supply of, and prices for, palm oil and its derivatives. In particular, drought conditions in Thailand in 2015 and 2016 have been attributed to the El Niño phenomenon. Such drought conditions can adversely affect the harvest from oil palm trees and, consequently, CPO production a year or two later. Moreover, the natural disaster, such as flood in southern provinces in Thailand from the end of 2016 to the early year of 2017, negatively impacted to supply and price of CPO in the market during that time.

The increasing concern over climate change also may result in more regional, domestic and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. In the event that such regulation is enacted and is more aggressive than the sustainability measures that the Company is currently undertaking to monitor its waste emissions, prices of palm oil and its byproducts, such as palm kernel oil, may increase. This would likely lead to higher prices for the Company’s raw materials which could lead to higher prices for its products, making them less competitive compared to substitutes. As a result, climate change and related regulations could negatively affect the Company’s business, cash flow, financial condition, results of operations and prospects.

5. The Company relies heavily on its major customers which are the subsidiaries and affiliates of the Company’s major shareholders and other companies in PTT Group

The Company’s major customer is the PTT Group (including the PTTGC Group and TEX but excluding SPRC and Bangchak which PTT divested in 2015), which represented 48.1%, 52.4%, and 54.7% of the Company’s revenue from sale of goods for 2014, 2015, and 2016. It is essential for the Company to maintain close and mutually beneficial relationships with them. The Company sells its methyl ester to almost all of fuel distributors in Thailand, including PTT, which is the major shareholder of the Company through shareholding percentage in PTTGC and also the biggest fuel reailer in Thailand. The Company’s contracts for methyl ester are typically for terms of one year, but may also have shorter terms whereas the Company typically sells fatty alcohols and refined glycerine on spot basis. As such, there can be no assurance that the Company’s major customers will continue their purchases, if at all, from the Company at the current levels. Moreover, the Company’s revenue is also subject to its customers’ business, product quality, sales strategy, industry conditions and the overall economic market environment. In essence, any significant reduction of sales to or loss of any of the Company’s customers could materially and adversely affect its profitability and results of operations. The Company is aware of the aforementioned risks; therefore, the Company then focuses on maintaining the customer satisfaction by improving its product quality and services, as well as consistenly exploring opportunities to expand its customer base.

6. The Company’s business is exposed to significant competition from other companies and substitute products.

The methyl ester and fatty alcohols businesses are highly competitive. The Company competes with other Thai methyl ester producers, many of whom have strong links to petroleum companies that sell diesel fuel. Any changes in government policy and regulation, i.e. the termination or waiver on the import of methyl ester into Thailand, may also increase the competition.

While the Company is the only producer of fatty alcohols in Thailand, the Company competes with international producers of fatty alcohols in the markets in which the Company operates in particular China and India. Some of the Company’s competitors may drive down product prices if they have costs lower than the Company and their export quantities are large enough to influence market prices. Furthermore, certain of the Company’s competitors have also established relationships with some of the Company’s

38

current or potential customers which could make it more difficult for the Company to increase the Company’s customer base in the future.

The Company also faces competition from manufacturers of synthetic fatty alcohols which can be a substitute to natural fatty alcohols for certain applications. The price of synthetic fatty alcohols is linked to the price of petroleum since synthetic fatty alcohols are made from petroleum. The decline in crude oil prices has thus led to a corresponding decline in prices for synthetic products which will lessen the competitiveness of natural fatty alcohols. To alleviate the impact from the competition from declining price of synthetic fatty alcohols, the Company targets to develop the quality of its natural fatty alcohols and sell its products to the personal care industry which prefers the use of natural fatty alcohols as a raw material.

Furthermore, the expansion of fatty production capacity in the industry and the entry of new competitors in the Company’s key markets may lead to downward pressure on prices, which could have a material adverse impact on the Company’s business, cash flow, financial condition, results of operation and prospects. However, the Company has continuously established relationships with customers and consistenly developed the product quality and services to expand the Company’s customer base, satisfy the customers, and use the Company’s products.

7 The Company has major shareholders which owns over half of the Company’s shares, which has control over the Company whose interests may vary from that of the Company.

Upon completion of this Offering, PTTGC will own and control approximately 75.00% of the Company’s share capital (assuming the over-allotment option is not exercised) or approximately 72.29% of the Company’s share capital (assuming the over-allotment option is exercised in full). PTTGC will continue to have the ability to exercise a controlling influence over the Company’s management, policies, business and affairs through controlling the composition of the Company’s Board and being likely able to control the majority of votes for approving material transactions in shareholder meetings. Therefore, the Company cannot assure you that the minority shareholders will be able to assemble the votes to monitor and balance the power of the matters which are proposed by the major shareholders.

The Company’s Board of Directors consists of 11 members, 6 of whom are independent directors. 3 of the independent directors are in the Audit Committee in order to ensure that any of the Company’s decisions are for the Company’s interest. Furthermore, the Company has mechanisms to assess its Board of Directors and have policies for entering in to a related party transactions or transactions with a connected person of directors, major shareholder or controlling person of the Company and a person who may have conflict of interests. The person who may have conflict of interest cannot be involved with any approval process for the relavant transactions.

Furthermore, PTTGC holds a 50.0% interest in Emery by holding through PTT Chemical International Private Limited, a wholly-owned subsidiary of PTTGC. Part of Emery’s business overlap with the Company’s business. Although PTTGC does not have a definite control over Emery, taking shareholding structure into account, the Company’s controlling parties’ interest may not be aligned with the Company’s interest

8. The Company may face a number of risks relating to the expansion of its operations including potential expansion into other green chemicals businesses

As the Company intend to seek and explore new business opportunities for growth in other green chemical businesses to diversify its existing product offering, whether through the Company’s own investment, joint venture or other form of collaboration with strategic partners or acquisitions, including acquisitions of green chemicals businesses or interests in green chemical businesses currently held by the PTTGC Group. The Company may not succeed in identifying and acquiring these opportunities on favorable terms or at all, or the Company may not achieve synergies from any such acquisition or be able to fully integrate such acquisition.

The Company plans to expand various parts of its operations, including through investment in a new methyl ester plant and a palm kernel oil extraction plant. Such expansion will require significant additional capital expenditures. The Company’s actual capital expenditures may be significantly higher or lower than these planned amounts due to various factors, including, among

39

others, changes in macroeconomic conditions, unplanned cost overruns, the Company’s ability to generate sufficient cash flows from operations and the Company’s ability to obtain adequate external financing for these planned capital expenditures.

The Company has undertaken certain preparations with KTIS for the development of a Biocomplex project in Thailand which comprises of various plants including integrated sugarcane crushing mill, ethanol plant, cogenerations, and other utility infrastructure, and bioplastics and/or biochemical production plants. The Company may decide not to proceed with the Biocomplex project for various reaons, including an inability to obtain sufficient financing, or regulatory, operating or commercial risks. If the Company decides to proceed with this project, the Company may not be able to complete this project on time or on budget and the Company may not be successful in developing it or its related sugar-based businesses as these will require the Company to become involved in production processes, product lines and markets that are new to the Company.

The Company may have risks arising from the expansion including financial risk and operational risk, as well as additional construction period and unplanned cost overruns. In addition, the Company may not be able to sell the additional numbers of products resulting from the Company’s capacity expansion project under the acceptable commercial terms. Such risk may negatively affect the Company’s business, cash flow, financial condition, result of operations and prospects.

9. The Company may not be able to pursue the Biocomplex project due to regulatory reasons

The Company has undertaken certain preparations with KTIS for the development of a Biocomplex project in Thailand which comprises of various plants that utilize sugarcane and/or derivatives of sugarcane as primary raw materials. Thai regulations currently prohibit the utilization of sugarcane for the production of products other than sugar. The Company understands that these rules and regulations are agreed in principle by the Cabinet on 11 October 2016 and in the process of being revised but the Company cannot assure you that they in fact will be revised or revised in a manner that will allow the Company to proceed with the Biocomplex project as the Company have envisioned and planned, which will adversely affect the Company’s expansion plans and may adversely affect the Company’s growth and prospects. Due to the uncertainty of the related rules and regulations, the clarity of the related regulations is the key factor for its investment in Biocomplex project.

Lawsuit

The Company does not have any material legal dispute

No. of Employees

As of 31 December 2016, the Company had 159 employees including 32 secondments from PTTGC and 1 secondment from PTT.

Company Background

The Company was established in July 2005 as Thai Oleochemicals Co., Ltd., a 99.99%-owned subsidiary of Thai Olefins Public Company Limited, the predecessor to PTTGC, the Company’s controlling shareholder. Thai Olefins Public Company Limited amalgamated with National Petrochemical Public Company Limited on 7 December 2005 to form PTT Chemical Public Company Limited, and PTT Chemical Public Company Limited amalgamated with PTT Aromatics and Refining Public Company Limited on 19 October 2011 to form PTTGC.

The Company undertook a corporate restructuring which the Company completed in October 2015. Later in March 2016, the company acquired a 50.0% interest in TEX from PTTGC.

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Investment in Subsidiary/Associated/ Related Companies As of 31 December 2016, the Company has investment in subsidiary/ associated/ related companies as follows: Baht million

Name Type of Business Paid-up capital % of shareholding Investment cost

Thai Fatty Alcohols Co., Ltd. Manufacturing and distributing biochemical products

1,060 100 1,685

Thai Ethoxylate Co.,Ltd. Manufacturing and distributing chemical and ethoxylate product

420 50 691

Thai Eastern Top Seeds Oil Co.,Ltd Manufacturing and distributing crude palm kernel oil

56 30 17

Change in Capital in the last 3 years

Baht million

Date Capital increase (decrease) After the increase

(decrease) Note

17 February 2016 2,405 9,805 Decrease par value and increase registered capital

28 September 2016 (2,405) 7,400 Decrease registered capital 28 September 2016 3,083 10,483 Increase registered capital

Capital Restructuring

In connection with this offering, GGC has been undergoing a capital restructuring which involve a reduction in retained earnings resulting from payments of dividned to PTTGC as follows:

By the resolution of the Board of Directors' Meeting on 14 September 2016, the Board of Directors has approved payment of interim dividend of Baht 999.0 million, which was paid to shareholder on 13 October 2016.

By the resolution of the Annual General Meeting of Shareholders on 21 March 2017, the shareholders have approved payment of dividend of Baht 259.0 million, which has been distributed to former shareholders on 20 April 2017.

Accounting Period 1 January to 31 December

Auditor

Auditors for the Company’s financial statements and financial information are as follows:

Financial Statements Auditor’s Name and Company Audited financial statements For the year ended 31 Decemebr 2014

Vairoj Jindamaneepitak KPMG Phoomchai Audit Ltd.

Audited special purpose financial statements For the year ended 31 Decemebr 2015


Pro forma consolidated financial statements For the year ended 31 December 2015, 2014 and 2013


Audited financial statements For the year ended 31 Decemebr 2016


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The Annual General Meeting of Shareholders held on 21 March 2017 passed a resolution to appoint Mr. Natthaphong Tantichattanon CPA Registration No.8829, or Ms. Vipavan Pattavanvivek CPA Registration No.4795, or Mr. Waiyawat Kosamarnchaiyakij CPA Registration No.6333 as the Company’s auditor for 2017.

Registrar Thailand Securities Depositary Company Limited (TSD)

Financial Advisor Finansa Securities Limited Phatra Securities Public Company Limited Lead Underwriter Finansa Securities Limited Phatra Securities Public Company Limited

Dividend Policy

The Company’s policy is to pay dividends of at least 30.0% of net profit after tax and allocation of all reserve funds, subject to the Company’s future investment plans, the approval of the Company’s shareholders and other relevant factors.

B.O.I. Certificate

The Company has obtained investment promotion privileges from the BOI pursuant to the Investment Promotion Act B.E. 2520 (1977), as amended (the "Investment Promotion Act") under the Investment Promotion Certificate No. 1547(2)/2549 dated 30 May 2006 for the production of methyl ester, fatty alcohols, glycerine, potassium sulfate and byproducts which are waste and scrap from the Company’s production process ("Investment Promotion Certificate"). The Company’s subsidiary, TFA, has also obtained investment promotion privileges from the BOI pursuant to the Investment Promotion Act under Investment Promotion Certificate No. 1068(2)/2550 dated 31 January 2007 for the production of fractionated fatty alcohols and byproducts which are light ends hydrocarbon, residue and waste and scrap from the production process ("TFA's Investment Promotion Certificate"). The Company has obtained the Operation Commencement License from the BOI under Operation Commencement License No. 000211/Sor Bor Tor. 4/2553 dated 4 November 2010. TFA has also obtained the Operation Commencement License from the BOI under Operation Commencement License No. 000210/Sor Bor Tor. 4/2553 dated 4 November 2010.

Under the Investment Promotion Certificate and the TFA's Investment Promotion Certificate, the BOI has granted the Company, among others, the following privileges:

permission to deduct annual loss (that was incurred during the Corporate Income Tax Exemption Period) from net profits accrued after the expiration of the Corporate Income Tax Exemption Period for a period of up to five years from the expiry of the Corporate Income Tax Exemption Period. The Company has the option of deducting such loss from the net profits of any one year or several years;

50.0% reduction of the applicable corporate income tax rate on net profits for a period of five years commencing on the expiry of the Corporate Income Tax Exemption Period; and

permission to deduct an amount twice the actual costs of transportation, electricity and water supply for up to 10 years from the date revenue is first generated from the Companyan operations.

To enjoy the foregoing privileges, the Company is subjected to certain conditions set forth in the Investment Promotion Certificate and TFA's Investment Promotion Certificate including, among others:

maintaining the Company's and TFA's registered capital at a minimum of Baht 2,400.0 million and Baht 410.0 million, respectively; and

maintaining that Thai nationals hold at least 51.0% of shares in the Company's and TFA's registered capital.

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No. of Shareholders

As of 27 April 2017

No. of

shareholders No. of shares

% of paid-up capital

1. Strategic shareholders 1.1 Directors, manager, and executive

management including related persons and associated persons

1 1,800 0.0002

1.2 Shareholders who have a holding of above 5% including related persons(1) 1 702,999,980 71.25

1.3 Controlling Shareholders - - - 2. Non-Strategic shareholders hold > 1 trading unit 6,215 283,666,900 28.75 3. Non-Strategic shareholders hold < 1 trading unit 2 20 0.00 Total Shareholders 6,219 986,666,700 100.00

(1) Shareholder who has a holding of above 5% in the above table is PTTGC. The information in the table is based on shareholding after allocating 37,000,000 overallotment shares. After the over-allotment agent procure shares to return to the PTTGC within 30 days from the first trading date on the Stock Exchange, PTTGC will hold 739,999,980 shares in the Company

Major Shareholders

As of 27 April 2017

Name Post - IPO Pre - IPO

No. of shares % of paid-up

capital No. of shares


1 PTT Global Chemical Public Company Limited(1) 702,999,980(2) 71.25 739,999,980 >99.99

2 Muang Thai Life Assurance Public Company Limited 9,000,000 0.91 - -

3 Bangkok Life Assurance Public Company Limited

8,312,700 0.84 - -

4 Tangcravakoon Family(3) 7,312,500 0.74 - - Mr. Chawin Tangcravakoon 5,000,000 0.51 - - Mr. Kanes Tangcravakoon 2,312,500 0.23 - - 5 Mr. Anurit Kerdsinchai 5,000,000 0.51 - - 6 Mr. Aiyawatt Srivaddhanaprabha 5,000,000 0.51 - - 7 Ms. Cattaliya Beevor 5,000,000 0.51 - - 8 Deutsche Bank AG.Singapore (DCS) A/C

DB (M) BHD A/C AFFIN Hwang Asset Management Berhad

4,700,000 0.48 - -

9 Provident fund for EGAT employees 3,709,300 0.38 - - 10 Mr. Suchai Pornchaisak-udom 3,000,000 0.30 7,312,500 -

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Name Post - IPO Pre - IPO

No. of shares % of paid-up

capital No. of shares


Total 754,034,480 76.42 739,999,980 >99.99 (1) PTTGC operates petrochemical and refinery business, with PTT being the major shareholder holding 48.89%

share in PTTGC (according to PTTGCersonsancial statements for the year ended 31 December 2016). PTT group is the largest supplier of petroleum and natural gas in Thailand by market share.

(2) Number of shares held by PTTGC is less than 739,999,980 shares due to the fact that PTTGC has lent 37,000,000 shares to the overallotment agent to be allocated as overallotment shares.

(3) Grouping by family is based on collecting the name of the shareholders sharing the same surnames. The members in this group may not in fact be related persons, connected persons nor concert party.

Foreign Shareholders As of 27 April 2017, the Company has 50 foreign shareholders holding 7,532,300 shares representing

0.76% of total paid up capital after IPO.

Board of Directors

Name Position Starting Date 1. Mr. Supattanapong

Punmeechaow Chairman of the Board of Directors Appointed as director

17/02/2016 2. Mr. Permsak

Shevawattananon Independent Director and Chairman of Audit Committee

Appointed as director 17/02/2016 Appointed as Chairman of Audit Committee 26/02/2016

3. Air Chief Marshal Songtam Chokkanapitag

Independent Director and Chairman of Nomination and Remuneration Committee

Appointed as director 17/02/2016 Appointed as Chairman of Nomination and Remuneration Committee 26/02/2016

4. Mr. Athavudhi Hirunburana Nomination and Remuneration Committee member, and Corporate Governance and Sustainability Committee member

Appointed as director 17/02/2016 Appointed as Nomination and Remuneration Committee member 26/02/2016 Appointed as Corporate Governance and Sustainability Committee member 13/01/2017

5. Mr. Narongsak Jivakanun Risk Committee member

Appointed as director 17/02/2016 Appointed as Risk Committee member 13/01/2017

44

Name Position Starting Date 6. Mrs. Kannika Ngamsopee Independent Director, Audit Committee member,

and Chairperson of Risk Committee

Appointed as director 17/02/2016

Appointed as Audit Committee member 26/02/2016 Appointed as Chairman of Risk Committee 13/01/2017

7. Prof. Dr. Kamchai Jongjakapun

Independent Director, and Corporate Governance and Sustainability Committee member

Appointed as director 17/02/2016 Appointed as Corporate Governance and Sustainability Committee member 13/01/2017

8. Mr. Patiparn Sukorndhaman

Nomination and Remuneration Committee member

Appointed as director 17/02/2016 Appointed as Nomination and Remuneration Committee member 26/02/2016

9. Mr. Jirawat Nooritanon Director, Managing Director, and Risk Committee member

Appointed as director 17/02/2016 Appointed as Risk Committee member 13/01/2017

10. Mr. Apichart Jongskul Independent Director, and Audit Committee member


Appointed as Audit Committee member 13/01/2017(1)

11. Mr. Payungsak Chartsutipol Independent Director, and Chairman of Corporate Governance and Sustainability Committee


Appointed as Chairman of Corporate Governance and Sustainability Committee 13/01/2017

Company secretary is Mrs. Sornraya Yoobho (1) Mr. Apichart Jongskul was appointed as Audit Committee member to replace the term of Prof. Dr. Kamchai Jongjakapun

who was initially appointed on 26 February 2016.

Audit Committee

The Board of Directors meeting No.1/2017 held on 13 Januray 2017 passed a resolution appointing the audit committee comprising of

Name Title

45

Name Title 1. Permsak Shevawattananon Chairman of Audit Committee 2. Kannika Ngamsopee Audit Committee member 3. Apichart Jongskul Audit Committee member

Mrs. Kannika Ngamsopee is the director who has knowledge, understanding and experiences in accounting and finance.

She has a M.S. (Accounting) 2nd Class Honors and B.B.A (Accounting) at Thammasat University. She has also served as Vice-President – Financial Controller at Chase Manhattan Bank (Thailand) in 1982 – 1992, Senior Vice-President at Bangkok Mass Transit System Public Company Limited in 1993 – 1994, and as Chief Financial Officer at Sithe Pacific Development LLC in 1998 – 2000. Mr. Siripong Suebsuk is the secretary to the audit committee.

Each Audit Committee member serves a term of three years and may be re-appointed. Once the members are due to retire, they may be re-appointed. Audit Committee Scope of Work

The Audit Committee has the scope of supporting corporate governance especially the Company’s internal control, audit, and compliance with the law and related regulations. In this role, the Audit Committee has the responsibilities set out below:

1. Financial reporting and audit reviewing the accuracy, reliability, and sufficient disclosure of the Company’s financial reports and

ensuring its compliance with the accounting standards, and relevant laws; considering, selecting, and recommending the appointment of the external auditor to ensure the auditor's

independence and removing the external auditor when it fails or neglects to perform or dishonestly performs its duties; and

encouraging independence and providing an opinion on the suitability of the external auditor. 2. Internal Controls

reviewing the adequacy and effectiveness of the Company’s internal control system; reviewing the appropriateness of the Company’s risk management system and risk assessment

procedures; and reviewing and overseeing the effectiveness of the Company’s internal whistleblowing procedures

concerning incident reports and complaints. 3. Internal Audit

reviewing the adequacy and effectiveness of the Company’s internal audit system and ensuring conformity with the International Standards for the Professional Practice of Internal Auditing of the Institute of Internal Audit;

overseeing the independence of the Internal Audit Department; reviewing the appointment and replacement, and evaluating the performance of, the head of the Internal

Audit Department; reviewing and approving the charter of the Internal Audit Department; approving and evaluating annual internal audit plans to ensure consistency with the Company’s types and

levels of risks; reviewing audit results of the Internal Audit Department; and developing understanding among the Audit Committee, the Company’s management, the Internal Audit

Department and the Company’s external auditors to ensure coordination, and reviewing the scope of the audit with the Company’s external auditors to ensure consistency and coordination.

4. Compliance with the Law and Related Regulations reviewing the Company’s activities to ensure compliance with the laws of the Securities and Exchange Act

and the requirements of the SET, and any other laws relevant to the Company’s businesses;

46

reviewing connected transactions or transactions that may lead to conflicts of interest to ensure that they conform to the law and regulations of the SET, and that they are reasonable and to maximize the Company’s benefit; and

investigating any incident upon notification by the Company’s auditor concerning any suspicious incident involving a director, the management or any person responsible for the Company’s business operation who may have breached his/her duty and responsibilities under the relevant provisions of the Securities and Exchange Act article 281/2 clause 2, article 305, article 306, article 308, article 309, article 310, article 311, article 312, or article 313 and reporting the outcome of the investigation to the Thai SEC and auditor within 30 days from the date of notification by the auditor.

5. Other Duties procuring advice from external independent advisers where necessary on the Company’s expenses revewing the charter of Audit Committee and proposing any revisions of such charter to the Board of

Directors for approval performing other Board-assigned duties

Listing Conditions

-None-

Silent Period

Shareholders, who own common shares before the company’s public offering, holding 542,666,685 shares or 55% of paid up capital after the initial public offering certify to the Stock Exchange of Thailand that their shares will not be sold for the period of one year from the first trading date. Upon the expiry of 6 months period of the prescribed time, those shareholders will be allowed to sell 25% of the total amount of shares prohibited for sale and the rest after one year.

Relaxation

-None-

Others

-None-

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STATISTICAL SUMMARY

Global Green Chemicals Public Company Limited

Millon of Baht Baht / Share(1) Percent Year end TOTAL

SALES NET PROFIT

(LOSS) NET PROFIT

(LOSS) attributable to owners of the

Company

EARNINGS (LOSS)

attributable to owners of the

Company

DIVIDEND(2) BOOK VALUE

PAYOUT RATIO (%)(3)

2014 (Pro Forma) 2015 (audited) 2016 (audited)

15,714.7 14,542.2 17,200.1

1,103.2 904.9 961.1

982.7 807.7 936.9

1.3 1.1 1.3

0.6 0.1 1.9

11.3 12.2 10.7

42 10 150

(1) Par value 10.00 Baht (2) Calculated from actual dividend paid during the year (3) Calculated from dividend (Baht/Share) divided by earnings (loss) attributable to owners of the Company

(Baht/Share). By the resolution of the Annual General Meeting of Shareholders on 21 March 2017, the shareholders have approved the payment of dividend of Baht 259.0 million, which has been distributed to former shareholders on 20 April 2017.

48


Statement of Financial Position

Pro Forma Financial Statements

Consolidated Financial Statements

For the year ended 31 December

2014 2015 2016

(in million of Baht) Asset Current assets Cash and cash equivalents 98.4 1,038.4 527.7 Trade accounts receivable 1,246.9 1,231.4 1,510.4 Other receivables 69.0 85.1 43.1 Value-added tax receivable 153.9 130.2 128.6 Inventories 1,892.2 2,599.3 4,374.4 Short-term loans to related party 913.9 - - Other current assets 15.0 31.1 62.0 Total current assets 4,389.3 5,115.5 6,646.2 Non-current assets Investments in subsidiary Investments in joint venture 687.2 662.1 695.7 Investments in associate - - 16.2 Plant and equipment 4,936.1 4,520.4 4,166.5 Intangible assets 88.6 85.3 80.4 Deferred tax assets 14.4 16.8 19.1 Other non-current assets 38.7 7.8 7.3 Total non-current assets 5,765.0 5,292.4 4,985.2 Total assets 10,154.3 10,407.9 11,631.4 Liabilities and equity Current liabilities Short-term loans from financial institution - - 60.0 Trade accounts payable 223.2 268.8 711.7 Other payables 164.9 202.0 222.4 Payables to contractors 26.2 13.9 26.9 Current portion of long-term loans from financial institution - 42.0 230.6 Current portion of finance lease liabilities 0.7 0.4 3.0 Income tax payable - - 21.1 Total current liabilities 415.0 527.1 1,275.7 Non-current liabilities Long-term loans from financial institution - 790.0 2,383.8 Long-term loans from related party 1,358.5 - - Finance lease liabilities 0.6 0.2 11.6

49


Statement of Financial Position

Pro Forma Financial Statements

Consolidated Financial Statements


2014 2015 2016

(in million of Baht) Deferred tax liabilities 2.0 2.0 1.9 Employee benefit obligations 25.5 30.3 35.4 Total non-current liabilities 1,386.6 822.5 2,432.7 Total liabilities 1,801.6 1,349.6 3,708.4 Equity Share capital

Authorised share capital 7,400.0 7,400.0 10,483.3 Issued and paid-up share capital 7,400.0 7,400.0 7,400.0

Difference arising from bussiness combination under common control - - (4.1)

Retained earnings Appropriated Legal reserve 101.2 139.0 230.1 Unappropriated 164.3 857.2 297.0

Equity attributable to owners of the Company 7,665.5 8,396.2 7,923.0 Former shareholder before business restructuring 687.2 662.1 -

Total equity 8,352.7 9,058.3 7,923.0 Total liabilities and equity 10,154.3 10,407.9 11,631.4

50

Note: (1) On 17 February 2016, the shareholders approved a reduction of par value from Baht 100 to Baht 10. The number of ordinary shares outstanding for the year ended 31 December 2014 and 2015 has been adjusted as if the event had occurred at the beginning of the period presented to reflect such change in the number of shares.

Global Green Chemicals Public Company Limited Statement of Comprehensive Income

Pro Forma Financial

Statements Consolidated Financial Statements


2014 2015 2014

(in million of Baht) Revenue from sale of goods 15,714.7 14,542.2 17,200.1 Cost of sales (14,296.6) (13,371.4) (15,715.8) Gross profit 1,418.1 1,170.8 1,484.3 Investment income 26.7 20.7 6.9 Other income 77.3 76.6 47.8 Net foreign exchange gain 16.5 61.2 24.0 Net derivatives gain 9.0 0.2 8.8 Selling expenses (356.7) (310.6) (330.1) Administrative expenses (125.8) (158.4) (287.7) Finance costs (86.1) (55.3) (67.3) Share of profit of investments in joint venture 120.5 97.2 104.5 Share of loss of investments in associate - - (0.5) Profit before income tax expense 1,099.5 902.4 990.7 Reversal of (income tax expense) 3.7 2.5 (29.6) Profit for the year 1,103.2 904.9 961.1

Profit attributable to: Owners of the Company 982.7 807.7 936.9 Former shareholder before business restructuring 120.5 97.2 24.2 Profit for the year 1,103.2 904.9 961.1

Basic earnings per share (1) 1.3 1.1 1.3

Profit for the year 1,103.2 904.9 961.1 Other comprehensive income (loss) Defined benefit plan actuarial losses (6.6) - - Share of other comprehensive loss of investment in joint venture (0.8) - - Other comprehensive income (loss) for the year, net of income tax (7.4) - - Total Comprehensive income for the year 1,095.8 904.9 961.1

Total comprehensive income attributable to: Owners of the company 976.1 807.7 936.9 Former shareholder before business restructuring 119.7 97.2 24.2 Total comprehensive income for the year 1,095.8 904.9 961.1

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Global Green Chemicals Public Company Limited Statement of Cash Flows

Pro Forma Financial

Statements Consolidated Financial Statements


2014 2015 2559

(in million of Baht) Statement of Cash Flows data Net cash from (used in) operating activities 927.5 740.9 (123.4) Net cash from (used in) investing activities (966.6) 858.5 (754.7) Net cash from (used in) financing activities (932.1) (659.5) 367.2 Net increase (decrease) in cash and cash equivalents (971.2) 939.9 (510.9) Cash and cash equivalents at 1 January 1,069.6 98.4 1,038.4 Effect of exchange rate changes on balances held in foreign currencies - 0.1 0.2 Cash and cash equivalents at 31 December 98.4 1,038.4 527.7

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Prepared by Finansa Securities Limited Phatra Securities Public Company Limited

GGC certifies that information reported in this information memorandum is correct


Mr. Athavudhi Hirunburana Director

Mr. Jirawat Nooritanon Director and Managing Director

ggcinvestor.ggcplc.com/misc/prospectus/20170428-ggc-memerandum-en.pdfsecondary market stock exchange...

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