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บริษัท ศรีไทยซุปเปอร์แวร์ จำกัด (มหาชน) Srithai Superware Public Company Limited

355 ถนนสุขสวัสดิ์ ซอย 36 แขวงบางปะกอก เขตราษฎร์บูรณะ กรุงเทพฯ 10140 โทรศัพท์ 66 2427 0088 โทรสาร 66 2428 9675

355 Suksawat Rd., Soi 36, Bangpakok, Rasburana, Bangkok 10140 Tel. : 66 2427 0088 Fax : 66 2428 9675 www.srithaisuperware.com

srithai 2008 cover.indd 1

รายงานประจำปี 2551 Annual Report 2008

บริษัท ศรีไทยซุปเปอร์แวร์ จำกัด (มหาชน) Srithai Superware Public Company Limited

4/7/09 9:45:58 PM


CONTENTS HIGHLIGHT OF CONSOLIDATED FINANCIAL STATEMENTS 2 Message by the Chairman 4 1. GENERAL INFORMATION 6 2. NATURE OF BUSINESS 13 3. STRUCTURE OF SHAREHOLDERS AND MANAGEMENT 28 • Report of the Nominating and Remuneration Committee 45 4. RISK FACTORS 56 5. RELATED PARTY TRANSACTIONS 60 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF BUSINESS PERFORMANCE 62 7. IMPORTANT CHANGES AND SIGNIFICANT EVENTS OVER THE PAST YEAR 73 Report by the Board of Directors on its Responsibility to Financial Statements 80 Report of the Audit Committee 81 Auditor’s Report and Financial Statements Attached Sheet

Annual Report 2008 - As of December 31, 2008

1


HIGHLIGHT OF CONSOLIDATED FINANCIAL STATEMENTS

2008

CONSOLIDATED BALANCE SHEETS

Unit : Thousand Baht 2007 2006

Assets

7,451,859

6,878,961

6,702,399

Liabilities

2,393,215

1,816,115

1,741,923

Shareholders' equity

5,058,644

5,062,846

4,960,476

CONSOLIDATED INCOME STATEMENTS

Total revenues

5,832,703

5,611,088

5,365,455

Total expenses

5,622,275

5,345,100

5,034,522

210,428

265,988

330,933

98,193

174,404

396,419

350,654

527,113

591,866

Net cash receipts (payments) for investing activities

(740,483)

(455,925)

(313,865)

Net cash receipts (payments) for financing activities

405,224

(71,379)

(350,119)

Cash and cash equivalents, closing balance

291,006

275,611

275,802

Profit before financial costs and income tax Net profit for year CONSOLIDATED STATEMENTS OF CASH FLOWS Cash flows from operating activities

KEY FINANCIAL RATIOS

1.5

1.8

1.6

Account Receivable Turnover (days)

66.7

68.2

62.5

Inventory Turnover (days)

29.9

30.0

30.2

Account Payable Turnover (days)

57.0

64.8

60.8

Gross Profit Ratio to Sales (%)

20.7

19.8

21.0

Net Profit Ratio to Total Revenues (%)

1.7

3.1

7.4

Return on Total Assets (%)

1.4

2.6

6.2

Debt to Equity Ratio (times)

0.5

0.4

0.4

Current Ratio (times)

2

Annual Report 2008 - As of December 31, 2008


Annual Report 2008 - As of December 31, 2008

3

2007 2008

Sales and Hire of Work Gross Margin Net Profit

2006

(Unit : Million Baht)

2007 2008

Assets Liabilities Shareholders’ Equity

Assets, Liabilities and Shareholders’ Equity

2006

(Unit : Million Baht)

Operation Results

2006

(Unit : Baht)

2007

Book Value per Share

(Unit : Baht)

Earnings per Share

2008


Message by the Chairman

In the year 2008, the global economic condition fluctuated wildly. The collapse of the bubble economy in the property sector and the consequent loss of credit control by subprime borrowers as well as the issuance of high-yield substandard debt instruments in the financial sector in the United States resulted in the bankruptcy of investment banks and the instability of commercial banks in that country. The resultant global economic meltdown had negative repercussions that severely affected economies worldwide, including Thailand. The property development and the automobile industry are some of the main industries which suffered from deteriorating consumer confidence, affecting battery manufacturing and pick-up car assembly in particular. The economic crisis plunged the prices of one of our major raw material, the plastic pellet, from THB 60/kg in the year 2008 to a very low level of THB 30/kg in early 2009. Unfortunately, this plunge did not benefit the Company due to the fact that the purchasing power of many industries shrunk significantly. To cope with this dilemma, the Company implemented many changes in order to survive this. Plastic injection machines were moved from the Suksawat factory to the Amata Nakorn factory in Chonburi province, installing them in the Electric Park area where energy saving programs have been in operation. As a result, our energy consumption rate was brought down to over half its usual consumption, from 2.2 Kw hr/1 kg of output to 1 Kw hr/1 kg of output. Srithai Superware’s goal is to decrease the rate down to 0.7 Kw hr/1 kg of output. In addition to this energy saving campaign, Srithai Superware also plans to install a control platform for all the machines whereby production activities could be more efficiently monitored on real time. Management could have on-line access to production information from any corner of the world. Our product line was also updated to include consumer - friendly items which can help stabilize sales figures during this economic recession. We invested in in-mould labeling machines for our food packaging products, i.e., popcorn buckets and carbonated drink containers (thin wall) for use in cinema houses. Srithai also

4

Annual Report 2008 - As of December 31, 2008


started production of screw-on caps and PET preforms for blowing PET receptacles into bottles for carbonated drinks and drinking water. Tamper-free CD boxes which can help prevent the pirating of its contents are expected to be a welcome addition to our product line. The economic challenges have also caused us to pursue an even more vigorous marketing strategy for our existing products. Our new customers include 2 new large pallet manufacturers in Thailand to whom we will start delivery in May 2009. Future plans to enhance the production efficiency at the Korat factory by introducing the Lean Manufacturing Process which is already being practiced at the Amata Nakorn factory in Chonburi will maximize production while minimizing wasteful steps and procedures. With regards to our household products, Srithai sold these items to 98 countries worldwide last year. In adopting a more broad-based marketing strategy as opposed to a more focused market concentration, the Company only felt a faint pulse of the global economic crisis. And to further increase sales, Srithai Superware was also able to successfully negotiate the distribution of our products via a leading household product retailer with an extensive network worldwide. In addition, we expanded our efforts into target market groups with potential growth by launching healthcare and beauty-care products under the brand “S Natur”. Recent research by a respected professor from King Monkut’s University of Technology Thonburi proved the many positive benefits of Xanthone, an extract from mangosteen. Realizing our ability to offer this unique discovery to the public, we launched this new product under a direct-sale “from shelf to stores” scheme of the multi-level marketing system. Contrary to present-day business trends, Srithai Superware is experiencing steady growth amid economic contraction. Strategic moves through our “SOS” program, focusing on Survival, finding new Opportunities and fostering Specialty, differentiates us from our competitors. Srithai is confident that all the strategic moves and changes being put in place will enable it to attain a growth of 3% in increased sales in the year 2009. On behalf of the Management, Srithai Superware wishes to thank all of our shareholders and patrons for their continued support and for having confidence in us. In my capacity as Chairman, I have made it clear to all that we have been paving the way for prosperity for the Company for the next 5 years. In order to maintain a strong and stable organization, we will continue to redirect our corporate culture as needed in order to prepare for any challenges we may face in this time of economic recession. Mr. Sanan Angubolkul Chairman

Annual Report 2008 - As of December 31, 2008

5


1. GENERAL INFORMATION Srithai Superware Public Company Limited Head Office : 355 Suksawat Rd., Soi 36, Bangpakok, Rasburana, Bangkok 10140 Tel. : 66 2427 0088 Fax : 66 2428 9675 URL : www.srithaisuperware.com Registration Number : 0107536001516 Registered and Paid up Capital : THB2,709,904,800 Comprising 270,990,480 common shares at par value THB10 Accounting Period : January 1 - Decemer 31 Share Registrar : Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Bldg., Rachadapisek Road, Khwaeng Klongtoey, Khet Klongtoey, Bangkok 10110 Tel. : 66 2229 2800 Fax : 66 2359 1259 Auditor :

Legal Advisor :

Security Agent :

Siam City Bank Public Company Limited Head Office 1101 New Petchburi Road, Rajthevi, Bangkok 10400 Tel : 66 2208 5000 Fax : 66 2253 6227

Managerial Contract :

None

6

Mr. Prasan Chuaphanich Certified Public Accountant (Thailand) No. 3051 PricewaterhouseCoopers ABAS Limited 15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Tel. : 66 2286 9999, 66 2344 1000 Fax : 66 2286 5050 Niti-Pricha Office 69/33 Soi Athens Theater, Phayathai, Bangkok 10400 Tel. : 66 2252 9494, 66 2251 3225 Fax : 66 2251 3226, 66 2255 5201

Annual Report 2008 - As of December 31, 2008


JURISTIC PERSON’S SHARES OF WHICH THE COMPANY HOLDS MORE THAN 10% Subsidiary Companies 1. Company Name : Srithai (Vietnam) Co., Ltd. Location : 9 Street 2, Song Than 1 Industrial Park, Di An District, Binh Duong Province, Socialist Republic of Vietnam Type of Business : Manufacture of Plastic Products Telephone : 84 650 790023-4 Fax : 84 650 790025 Paid-up Capital : Dong 109,337,834,503 2. Company Name : Srithai Moulds Co., Ltd. Location : 55/1, 55/6 Moo 1, Nong-Samsak, Amphoe Ban Bueng, Chon Buri Type of Business : Manufacture of Moulds Telephone : 0 3837 9280-2 Fax : 0 3847 6352 Number of shares issued and paid up : 1,000,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 100,000,000 3. Company Name : Srithai Nanoplast Co., Ltd. Location : 42 Moo 4, Tambon Bualoy, Amphoe Nhong Kae, Saraburi Type of Business : Manufacture of Plastic Products Telephone : 0 3637 3251-5 Fax : 0 3637 3256 Number of shares issued and paid up : 4,000,000 shares, paid-up per share : Baht 10 Paid-up Capital : Baht 40,000,000 4. Company Name : Srithai Miyagawa Co., Ltd. Location : 539 Moo 4, Tambon Prak-Sa, Amphoe Mueang, Samut Prakan Type of Business : Manufacture of Moulds and Plastic Products Telephone : 0 2324 0911 Fax : 0 2324 0427 Number of shares issued and paid up : 1,200,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 120,000,000 5. Company Name : Srithai Lock&Lock Co., Ltd.(1) Location : 191 Silom Complex Building 19th Floor, Unit 3, Silom Road, Silom, Bang Rak, Bangkok Type of Business : Import and Sale of Lock & Lock Food Container Telephone : 0 2632 1794 - 5 Fax : 0 2632 1796 Number of shares issued and paid up : 1,700,000 shares, paid-up per share : Baht 10 Paid-up Capital : Baht 17,000,000 (1)

Registered incorporation of the company with the Ministry of Commerce on 25 December 2008.

Annual Report 2008 - As of December 31, 2008

7


6. Company Name : Srithai Shin-Osaka Co., Ltd. Location : 1/132 Moo 2, Tambon Ta-sai, Amphoe Mueang, Samut Sakorn Type of Business : Mould Laminating Telephone : 0 3449 0130-1 Fax : 0 3449 0132 Number of shares issued and paid up : 600,000 shares, paid-up per share : Baht 83 Paid-up Capital : Baht 49,800,000 Associated Companies 1. Company Name : Srithai Sanko Co., Ltd. Location : 355 Moo 4, Soi Suksawat 36, Suksawat Rd., Bangpakok, Rasburana, Bangkok Type of Business : Trading Company Telephone : 0 2427 0088, 0 2428 9936 Fax : 0 2428 9935 Number of shares issued and paid up : 200,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 20,000,000 2. Company Name : Srithai WBG Co., Ltd.(2) Location : 355 Moo 4, Soi Suksawat 36, Suksawat Rd, Bangpakok, Rasburana, Bangkok Type of Business : Distribution of Food Supplement and Health Care Products under

Network Marketing System Telephone : 0 2427 0088 Fax : 0 2428 9938 Number of shares issued and paid up : 800,000 shares, paid-up per share : Baht 10 Paid-up Capital : Baht 8,000,000 (2)

Registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation.

3. 4.

Company Name : Thai MFC Co., Ltd. Location : 1 Siam Cement Road, Bang Sue, Bangkok Type of Business : Manufacture of Melamine Powder Telephone : 0 2586 3895 Fax : 0 2586 4878 Number of shares issued and paid up : 2,000,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 200,000,000 Company Name : S.K.I. Ceramics Co., Ltd. Location : 7/101 Moo 4, Tambon Mab Yang Porn, Amphoe Pluak Daeng, Rayong Type of Business : Manufacture of Ceramics Tableware Telephone : 0 3895 6025 Fax : 0 3895 6030 Number of shares issued and paid up : 12,500,000 shares, paid-up per share : Baht 10 Paid-up Capital : Baht 125,000,000

8

Annual Report 2008 - As of December 31, 2008


5. Company Name : Beijing Huatai Replica of Porcelain Products Co., Ltd. Location : Xi Guan Street No. 104, Tongxian, Beijing, P.R.C. Type of Business : Manufacture of Melamine Products Telephone : 86 10 6954 7477 Fax : 86 10 6954 1924 Paid-up Capital : Yuan 8,947,925 6. Company Name : Srithai Packaging Co., Ltd. Location : 30/27 Moo 2, Tambon Khok Kham, Amphoe Mueang Samut Sakhon, Samut Sakhon Type of Business : Manufacture of Packaging Telephone : 0 3445 2100-7 Fax : 0 3445 2108-9 Number of shares issued and paid up : 600,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 60,000,000 7. Company Name : PT. Srithai Maspion Indonesia Location : Ji Kembang Jepun 38, 40 Surabaya, Indonesia Type of Business : Manufacture of Melamine Products Telephone : 62 31 891 3004 Fax : 62 31 891 3630 Number of shares issued and paid up : 9,320 shares, paid-up per share : Rupiah 1,115,250 Paid-up Capital : Rupiah 10,394,130,000 8. Company Name : Thai Takahashi Plastics Co., Ltd. Location : 479 Moo 4, Tambon Prak-Sa, Amphoe Mueang, Samut Prakan Type of Business : Manufacture of Plastic Products Telephone : 0 2324 0730, 0 2709 3480 Fax : 0 2324 0698-9 Number of shares issued and paid up : 200,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 20,000,000 9. Company Name : Soko Srithai Co., Ltd.(3) Location : 94 Moo 5, Wellgrow Industrial Estate, Bangna-Trad Highway Km. 36, Tambon Bang-Samak, Amphoe Bang Pakong, Chachengsao 24130 Type of Business : Manufacture of Plastic Products Telephone : 0 3857 0265-8 Fax : 0 3857 0271 Number of shares issued and paid up : 250,000 shares, paid-up per share : Baht 1,000 Paid-up Capital : Baht 250,000,000 (3)

Registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation.

Annual Report 2008 - As of December 31, 2008

9


10.

Company Name : LN Srithai Comm Co., Ltd.(4) Location : 71/12 Moo 5, Tambon Tha-Kam, Amphoe Bang Pakong, Chachengsao Type of Business : Manufacture of Telephone Sets Telephone : 0 3857 3061-3 Fax : 0 3857 3064 Number of shares issued and paid up : 76,000 shares, paid-up per share : Baht 1,000 Paid-up Capital : Baht 76,000,000

Classification of investment in the company was changed from an associated company to other long-term investment since December 11, 2008.

(4)

11. Company Name : Takahashi Korat (1995) Co., Ltd. Location : 479 Moo 4, Tambon Prak-Sa, Amphoe Mueang, Samut Prakan Type of Business : Manufacture of Plastic Products (for electronics) Telephone : 0 4433 8158 Fax : 0 4437 5011, 0 4437 5017 Number of shares issued and paid up : 1,500,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 150,000,000 12. Company Name : Takahashi Plastics Co., Ltd. Location : 479 Moo 4, Tambon Prak-Sa, Amphoe Mueang, Samut Prakan Type of Business : Manufacture of Plastic Products Telephone : 0 2324 0730, 0 2709 3480 Fax : 0 2324 0698-9 Number of shares issued and paid up : 400,000 shares, paid-up per share : Baht 100 Paid-up Capital : Baht 40,000,000 Joint Venture Company 1. Company Name : Srithai-Otto (Thailand) Co., Ltd. Location : 355 Moo 4, Soi Suksawat 36, Suksawat Rd., Bangpakok, Rasburana, Bangkok Type of Business : Trading Company Telephone : 0 2427 0088 Fax : 0 2874 5015 Number of shares issued and paid up : 200,000 shares, paid-up per share : Baht 50 Paid-up Capital : Baht 10,000,000

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Annual Report 2008 - As of December 31, 2008


SHARHOLDING STRUCTURE OF SRITHAI SUPERWARE GROUP CLASSIFIED BY BUSINESS LINE

Srithai Superware Public Company Limited Plastic

Trading

Mould & Others

Srithai (Vietnam) 95.8%

Srithai Lock & Lock 51.0%

Srithai Moulds 71.0%

Srithai Nanoplast 70.0%

Srithai - Otto 50.0%

Srithai Miyagawa 51.0%

Thai MFC 45.0%

Srithai Sanko 48.0%

S.K.I. Ceramics 42.0%

Beijing Huatai 40.0%

Srithai WBG 47.0%

Srithai Shin - Osaka 40.0%

PT. Srithai Maspion 32.5%

Srithai Packaging 39.2%

Thai Takahashi Plastics 25.0%

LN Srithai Comm 20.0%

Soko Srithai 24.0% Takahashi Korat 19.0% Takahashi Plastics 16.5%

Annual Report 2008 - As of December 31, 2008

11


SHAREHOLDING STRUCTURE OF SRITHAI SUPERWARE GROUP

Srithai Superware Public Company Limited Subsidiary

Joint Venture

Srithai (Vietnam) 95.8%

Srithai Sanko 48.0%

PT. Srithai Maspion 32.5%

Srithai Moulds 71.0%

Srithai WBG 47.0%

Thai Takahashi Plastics 25.0%

Srithai Nanoplast 70.0%

Thai MFC 45.0%

Soko Srithai 24.0%

Srithai Miyagawan 51.0%

S.K.I Ceramics 42.0%

LN Srithai Comm 20.0%

Srithai Lock & Lock 51.0%

Beijing Huatai 40.0%

Takahashi Korat 19.0%

Srithai Shin - Osaka 40.0%

Srithai Packaging 39.2%

Takahashi Plastics 16.5%

Remark : (1) (2) (3) (4) (5)

12

Associates

Srithai - Otto 50.0%

Srithai Lock & Lock Company Limited registered incorporation of the company with the Ministry of Commerce on 25 December 2008. Srithai Shin-Osaka Company Limited is a subsidiary. Eventhough the Company holds shares in it less than half, the Company has controlling votes, directly or indirectly, and controlling power. Srithai WBG Company Limited registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation. Soko Srithai Company Limited registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation. The company changed classification of investment in LN Srithai Comm Company Limited from an associated company to other long-term investments on December 11, 2008.

Annual Report 2008 - As of December 31, 2008


2. NATURE OF BUSINESS 2.1 COMPANY BACKGROUND Srithai Superware Public Company Limited, “the Company”, was initially operated under the name “Srithai Plastic Industry Limited Partnership”. It was found by Mr. Sumit Lertsumitkul on August 1, 1963, to operate as a manufacturer and distributor of household plasticware. In 1972, the business was renamed “Srithai Superware Limited Partnership” and the management team was reorganized. Mr. Sanan Angubolkul was appointed as Factory Manager at that time. A new product line, melamine tableware, was added. In 1979, the limited partnership was transformed into a company limited under the name “Srithai Superware Company Limited”, after which the Company kept on expanding. The Company was listed in The Stock Exchange of Thailand on October 2, 1991, with an increase of registered capital from Baht 170 million to Baht 200 million. The Company was transformed into a public company limited on December 13, 1993. The Company increased its registered capital again to Baht 470 million on January 14, 1994, and subsequently to Baht 500 million on March 19, 1996, with fully paid-up share capital of Baht 400 million. In July 1997, under the pressure of economic crisis in the Asia-Pacific region, the Company announced debt restructuring. The Company later agreed with a creditor to file a petition to Court for business reorganization under the bankruptcy law. The Court approved the petition on May 28, 1999, and the reorganization plan on December 30, 1999, by appointing SGV-Na Thalang & Co., Ltd. as plan administrator. In the first quarter of 2000, Srithai Rungruengsaap (1999) Co., Ltd., a subsidiary, was established to hold parts of assets of the Company in line with the

structure as indicated in the approved reorganization plan, to whom parts of land and shares in related companies of the Company were sold. On April 28, 2000, the Company converted a portion of debt to equity according to the reorganization plan. It resulted in an increase in paid-up capital from Baht 400 million to Baht 2,857 million. The remainder portion of the affected debts was converted to Secured Floating Rate Notes (FRN) amounting to USD 84.2 million, redeemable in 5 years. The Company repaid and prepaid the FRN from time to time. Implementation of the business reorganization plan of the Company had been completed. On July 15, 2002, the Southern Bangkok Civil Court passed an order to release the Company from the reorganization plan by virtue of Section 90/70 of the Bankruptcy Act B.E. 2483. As a result, the Management team of the Company resumed managerial power again. On July 19, 2002, the Company signed a Syndicated Long-term Loan Agreement with the Siam City Bank Pcl. and the Bangkok Bank Pcl. amounted THB 2,100 million. The loan was used to repay all the Secured Floating Rate Notes, and freed the Company from all offshore loans. After borrowing the syndicated long-term loan, the Company has repaid and prepaid many installments. The Company could fully repay the principal amount of the long-term loan to the two banks during the year 2007. On August 12, 2005 Mr. Sumit Lertsumitkul, late Chairman of the Board of Directors of the Company, passed away. Her Royal Highness Princess Maha Chakri Sirindhorn graciously presided over the cremation ceremony of Mr. Sumit Lertsumitkul on March 10, 2006. Later on, the Board of Directors unanimously appointed the President Mr. Sanan Angubolkul to be the Chairman and President of the Company. The Board did not Annual Report 2008 - As of December 31, 2008

13


appoint a new director to replace Mr. Sumit Lertsumitkul. On June 21, 2006, an entire business transfer agreement was signed between the Company and Srithai Rungruengsaap (1999) Co., Ltd., the subsidiary. At the 25th Annual General Meeting of Shareholders (for the year 2005) on April 28, 2006, a resolution was passed to accept the transfer of the entire business of the subsidiary in order to simplify the structure of investments within the Group. Subsequently, Srithai Rungruengsaap (1999) Co., Ltd. registered its dissolution with the Ministry of Commerce on July 14, 2006. It liquidated its assets in the year 2007. The Company has restructured its lines of businesses. The new structure comprises a plastic business line, of which main products are industrial products and household products, a trading business line, and a supporting line. The new structure has been in effect since October 1, 2006. The Board of Directors had approved the Re-engineering Plan and the New Business Activity Plan as strategies for attaining sustainable growth along the path to become a World-Class Company in the future by adjusting management process and slashing production overhead costs of industrial products to enhance competitiveness, profitability, and origination of product differentiation and value-adding. A part of the plan is to relocate the industrial product plant from Suksawat to Amata

14

Annual Report 2008 - As of December 31, 2008

Nakorn Plant in Chonburi Province, replacing old machines with new ones to be installed in an area called Electric Park in where energy conservation would be focused. In addition, improvements were made to building and the plant, machines and production line, including electricity and water systems. Investments in new moulds were mode to launch new products. These improvements were an evidence of modernization of a plastic plant dedicated for industrial products. On 22 December 2008, Her Royal Highness Princess Soamsawali presided over the grand opening ceremony of the company’s factory at Amata Nakorn, Chonburi, in commemoration of the 45th year Anniversary of the Company. 2.2 BUSINESS OUTLOOK OF SRITHAI

SUPERWARE GROUP Business outlook of Srithai Superware Group is mostly under the same structure as that of our core businesses, i.e. Plastic Business Line which comprises industrial products and household products and Trading Business Line. The Company has set its strategy of doing integrated businesses to reduce dependency on outsiders, so that competitiveness of the Group could be enhanced. Mould-making subsidiaries, a core success factor of the Plastics Business Line, and other affiliated companies that cannot be classified under the two main business lines are grouped under “other businesses”.


STRUCTURE OF REVENUE The structure of revenue of the Group can be classified by business lines : Plastics Business Line comprising Industrial Products and Household Products, Trading Business Line, and Mould-Making Business Line as described below :- CONSOLIDATED For the year ended December 31, 2008 (Unit : Thousand Baht) Plastics Business Household Products Domestic Production

Sales and hire of work

1,803,845

Revenues from subsidiaries Total Sales and hire of work

(937) 1,802,908

Trading and Moulds Businesses

Industrial Products

Overseas Production

Domestic Production

27,516

3,360,450

Overseas Production

Total

193,988

484,288 5,870,087

(13,013) (15,295) (1,911) 14,503 3,345,155 192,077

(61,209) (92,365) 423,079 5,777,722

Remark : Additional information classified by business lines and geographic segments was disclosed in notes to financial statements for the year ended December 31, 2008, page 20

STRUCTURE OF TOTAL SALES OF SRITHAI SUPERWARE GROUP Unit of Total Sales : Million Baht

2008 Sales (%) Domestic Export Plastic Businesses Srithai Superware Pcl. Srithai (Vietnam) Co., Ltd. (Sales in Vietnam) Srithai Nanoplast Co., Ltd. Srithai Miyagawa Co., Ltd. Thai MFC Co., Ltd. Beijing Huatai Replica of Porcelain Products Co., Ltd. (Sales in China) PT. Srithai Maspion Indonesia (Sales in Indonesia) Soko Srithai Co., Ltd.(1) Takahashi Korat (1995) Co., Ltd. Takahashi Plastics Co., Ltd. Total Plastic Businesses Trading Businesses Srithai Superware Pcl.

2008

2007

2006

Sales

%

Sales

%

Sales

%

76 80

24 20

4,599 222

40.5 2.0

4,542 199

35.2 1.5

4,366 138

30.9 1.0

100 64 26 100

0 36 74 0

31 489 667 104

0.3 4.3 5.9 0.9

59 483 561 76

0.5 3.7 4.4 0.6

16 366 643 84

0.1 2.6 4.6 0.6

100

0

95

0.8

70

0.6

64

0.4

100 100 92

0 0 8

0 1,040 358 7,605

0.0 9.2 3.2 67.1

5 3,239 379 9,613

0.0 141 25.1 4,920 2.9 606 74.5 11,344

1.0 34.9 4.3 80.4

89

11

161

1.4

109

0.8

94

0.7

Annual Report 2008 - As of December 31, 2008

15


STRUCTURE OF TOTAL SALES OF SRITHAI SUPERWARE GROUP (CONT.) 2008 Sales (%) Domestic Export Srithai-Otto (Thailand) Co., Ltd. Srithai Sanko Co., Ltd. Srithai WBG Co., Ltd.(2) Srithai Plaschem (Thailand) Co., Ltd. (3) Total Trading Businesses Other Businesses Mould-Making Srithai Superware Pcl. Srithai Moulds Co., Ltd. Srithai Miyagawa Co., Ltd. Srithai Shin-Osaka Co., Ltd. Total Mould-Making Others Srithai Superware Pcl. Srithai Rungruengsaap (1999) Co., Ltd. (4) (Rental Income) S.K.I. Ceramics Co., Ltd. Srithai Packaging Co., Ltd. LN Srithai Comm Co., Ltd. (5) Total Others Grand Total

100 100 100 -

0 0 0 -

2008 Sales

Unit of Total Sales : Million Baht

2007 %

Sales

2006 %

Sales

%

58 101 3 0

0.5 0.9 0.0 0.0

48 52 3 0

0.4 0.4 0.0 0.0

73 19 0 15

0.5 0.2 0.0 0.1

323

2.8

212

1.6

201

1.5

71 100 100 100

29 0 0 0

112 117 82 7 328

1.1 1.0 0.7 0.1 2.9

45 106 96 13 260

0.4 0.8 0.7 0.1 2.0

75 127 173 33 408

0.5 0.9 1.2 0.3 2.9

100 -

0 -

42 0

0.4 0.0

16 0

0.1 0.0

9 27

0.0 0.2

9 100 1

91 0 99

194 1.7 295 2.3 341 2.4 142 1.2 105 0.8 128 0.9 2,709 23.9 2,409 18.7 1,653 11.7 3,087 27.2 2,825 21.9 2,158 15.2 11,343 100.0 12,910 100.0 14,111 100.0

Soko Srithai Company Limited registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation. Srithai WBG Company Limited registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation. (3) Srithai Plaschem (Thailand) Co., Ltd. had registered its dissolution in 2006 and liquidation was completed. (4) Srithai Rungruengsaap (1999) Co., Ltd. had registered its dissolution in 2006 and liquidation was completed. (5) The company changed classification of investment in LN Srithai Comm Company Limited from an associated company to other long-term investments on December 11, 2008. Remarks : 1. Structure of Sales of the Company and group companies, shown comparatively for 3 years 2006-2008, was derived from financial statements of respective company without eliminating inter-company transactions. 2. Exchange rates used in the translation of sales of foreign associates were as shown below:- (1) (2)

2008 2007 2006 Baht 1 = 500.000 VND Baht 1 = 476.190 VND Baht 1 = 454.545 VND

Srithai (Vietnam) Co., Ltd. Beijing Huatai Replica of Porcelain Products Co., Ltd. Baht 1 = 0.197 RMB PT. Srithai Maspion Indonesia Baht 1 = 332.591 RP

16

Annual Report 2008 - As of December 31, 2008

Baht 1 = 0.218 RMB Baht 1 = 295.412 RP

Baht 1 = 0.218 RMB Baht 1 = 266.830 RP


2.3 VISION, MISSION AND BUSINESS DIRECTION OF THE COMPANY

The Company has announced its Vision, Mission and Business Direction for the year 20072009 (revised version) so that the executives and all staffs could share a common understanding and coordinating among them to push forward the Company to achieve the desired goals and move forward to designated direction steadily. Besides, the Company has released its Vision, Mission and Business Direction to public, partners and stakeholders in order to enhance their confidence in the direction and future of the Company and in doing business withthe Company. Vision To be a leading company of Thailand in the manufacturer and distribution of plastic products and household products that gain international recognition. Mission 1. Mission in Marketing Gain more market share in domestic market

and expand export markets with quality and standardized products. 2. Mission in Production 2.1 Offer high quality products with lower costs at competitive prices to the world markets, supported by standardized production-management system. 2.2 Improve and develop new products to fulfill demand in markets. 3. Mission in Customer Satisfaction Improve and maintain quality standard of goods so as to build up confidence and customer satisfaction by providing impressive services to customers regularly. 4. Mission in Management Promote personnel development for enhancing their value adding, advancement in career path and their safety at work places. Be aware of corporate social responsibility and environmental protection.

Business Direction of Srithai Superware Pcl. for period 2007- 2009 (Revision)

1. During 2007- 2009 we shall focus on quality growth as described below:- Plastic Business : • Export Markets Focus on sustainably aggressive

growth by covering markets in

100 countries. • Domestic Markets Focus on continual growth.

Maintain our market shares

and secured profitability.

Attach importance on product

lines of high market growth.

Focus on profitable products. • Product Lines Focus on development of

Expansion production technology for

industrial goods and

household goods so as to

expand new product lines in

an aim to cover as many

market targets as possible. • Production Base Target at countries of high

Expansion potential in production work

such as Vietnam and India. Trading Business : • Expand business for widening product varieties by doing trading business. 2. We shall expand our production capacity and invest in moulds and machines of high efficiency, so that worthwhile return on investment could be expected. 3. We are committed to build up corporate culture under which our staffs will work as a team with very high team spirit, so as to assure that our customers are well serviced inside and outside our organization. Focus will be given to the success of teams. Our organization will reward the persons participating in the success of their teams. 4. We shall focus on quality improvement of our goods, reduction of production costs, and punctual delivery of goods to customers. These factors will boost up our competitiveness and Annual Report 2008 - As of December 31, 2008

17


maintain our leadership in the markets for our motorcycle assemblers. Auto parts need high main products forever. precision and quality and are part of industrial 5. We are committed to fully utilize our modern

products that generate revenue to the Company. information technology to provide useful and 5. Production base of household products is timely information to our Management teams, so expanded into Vietnam via a subsidiary’s that decision-making process will be made investment in Vietnam. Moreover, the effective. Company has planned to expand production 6. We shall emphasize on innovations and human

base into India as well. resource development to fulfill need of our 6. Production capacity for household products is organizational growth. increased by investing in melamine compression machines to support business In 2008, the Company operated in tandem growth and expand customer bases domestically with its business direction. Details are as follow :- and internationally. 7. The Company is making research and development on Bio-Plastic which is degradable Plastics Business Line as new alternative for users in the future. Comprising industrial products and household products. 1. In 2008, the Company was able to export Trading Business Line The Company has launched food boxes under household products to 98 countries worldwide. In addition, the Company got orders from one Lock&Lock brand from Korea, gadgetry for kitchen of the world’s leading household product and catering under Abert, Broggi and Ghidini retailers in Sweden who has customers in 37 brands from Italy and table, sun loungers and artificial rattan chair under Evolutiff and Kettal countries worldwide. 2. The Company invested and operated in brands from France and Spain. All those products accordance with re-engineering and new have good growth potential. In addition, the business plans in order to make changes in Company has launched consumer products made management & production technique, to locally to market in mid 2008 under SNatur brand enhance production competency with high via direct sales distribution channel called MLM technology, to differentiate and create value- scheme (Multi-Level Marketing), such as healthadded products, and to expand into new care and beauty-care products, food supplement, products. Detail was shown in Section 7 : and other consumer products. Those products Important changes and significant events over have received warm welcome and attention, especially on beauty-care products based on the past year. 3. Production and distribution of Material research finding of respected professors of King Handling Products like packaging products such Mongkut’s University of Technology Thonburi on as boxes, pallets and pails are focused. All Xanthone’s extract from mangosteen. Moreover, the those products are manufactured in Amata Company is searching for products that are modern Nakorn factory under BOI promotion. and hot for both domestic and export markets for Moreover, the Company has invested to distribution at reasonable prices. The Company has increase production capacity to support sales been focussing on selling full range of products or group of products that could be sold to the same growth of Material Handling products. 4. Production technology and quality are target customers such as HoReCa comprising continuously developed to build up customers’ customers in hotel, restaurant and catering business. confidence and trust among auto and

18

Annual Report 2008 - As of December 31, 2008


2.4 BUSINESS OPERATION BY BUSINESS LINE 2.4.1 Plastic Business The Company’s plastic business unit has been categorized by its main products i.e. industrial products and household products. The categorization was made according to the function of the products and has been detailed as following:- (1) Industrial Products (a) Description of Product or Service Engineering Parts - parts that are used in the assembly of industrial products such as microwave oven, air-conditioner, refrigerator, washing machine, parts for automobiles and motorcycle, fax machine, printer etc. for which the Company can provide both manufacturing and assembling parts. Battery Cases - Exterior plastic case, lid and anode & cathode of batteries for cars and motorcycles. Pallet - Low-rise rectangular plastic pedestal used for putting on with goods in warehouse. There are openings inside the pallet for forks of forklift trucks to insert for lifting.

Bottle Crate - Plastic crates with inside divided into small sockets for keeping upright bottles such as soft drink, beer, and other drinks, etc. Container -Pail for paint, chemical, lubricant and grease Garbage Bin - Large garbage bin with wheels for sidewalk or public places Crate - Fish crate, spare part box, milk crate and crate for fruits & vegetables

Annual Report 2008 - As of December 31, 2008

19


Thin Wall Packaging Product - Plastic ware for use as food & beverage containers produced by thin wall injection technology. Premium Products - Made-to-order products for free gift promotional campaign of brand-owners and department stores. Products are mostly designed by brand owners and printed with customers’ brands. Other Products - Accessories, decorations, and appliances etc. (b) Marketing and Competition Description of Customer Customers who buy automotive and motorcycle parts and battery cases use the products for further assembly in their production process. Customers who buy pallets, bottle crates, pails, garbage bins, and container crates are endusers such as manufacturing plants. Customers who buy thin wall packaging products are F&B factories, cinema house launching marketing campaign, and convenient stores. Premium products are directly sold to brandowners and retailers for their promotional campaign. Accessories, decorations, and appliances are sold through sale agents or retailers who distribute the products to the consumers.

20

Annual Report 2008 - As of December 31, 2008

Credit term Usually credit term of 30-90 days is granted to customers of plastic products. Sales in grand sales event are made in cash. Competitive Strategy Emphasis is put on high quality products, wide variety of products and complete integration of services, owing to the fact that certain related companies can produce moulds for customers. Distribution Channel Plastic products are

distributed through the following Export Sales : 12.5% Domestic Sales : 87.5% Distributors are Srithai Marketing Co., Ltd., Siam Melamine Marketing Co., Ltd., Srithai-Otto (Thailand) Co., Ltd., Tanasiri Industries Co., Ltd. and S. Sirithai Trading Co., Ltd. They have been our trade partners for a very long time. (c) Competitive Environment Most plastic product producers focus on just any one particular product line and compete only in their niche markets. For instance, producers of household plastic products will only produce household products and not other. There are thousands of plastic factories in the country, most of which are relatively small like shop-house factories or household factories with low investment and low technology. Only few plastic factories considered large enough can produce quantity products to serve individuals and businesses as it requires high investment, strict quality control, and advanced technology. Additionally, brand name is also important in creating creditability among customers, especially for manufacturing of engineering parts which requires high quality and timeliness of delivery. However, fluctuation in resin prices resulting in rising resin price coupled with economic recession has caused many small plastic factories to terminate their operations. The Group is the leader in plastic industry with many of modern machines and application of new technologies used to enhance its production competency continuously. Currently, the Company


has two modern factories producing industrial products with total production capacity as high as 45,000 tons per annum. The Company has expertise in producing plastic precision parts such as industrial and vehicle parts, but will not compete with small producers on plastic products for general use in which price competition is strong but quality is low merely to gain more market share. On contrary, the Company has focused on industrial products of big market size by offering high quality modern products that can serve wide variety of demand of customers. In addition, the Company has developed products continuously to differentiate its product and create value-added on it, and expanded into new product line to consistently increase variety of industrial products. Hence, the Company is confident in its competitiveness competency and its business growth prospect in the future. Size of the Company as Compared to Competitors’ The Company cannot compare its size with its competitors because there are thousands of plastic injection factories, medium and small. Therefore, size can be estimated from market shares as follow:- market share battery cases 70% industrial parts 60% material handling 50-60% (d) Sourcing of Products or Services The Company moved its operation and production line from Suksawat factory which produced small industrial parts like electric parts and auto parts, etc, to Amata Nakorn factory, Chonburi. Therefore, there are only two factories producing industrial parts, i.e. Amata Nakorn factory in Chonburi and Bangpu factory. The two factories are producing different products as follow:- Suksawat Factory (currently under renovation to support new business)

Amata Nakorn Factory in Chonburi At present, it produces almost all industrial products either small or large pieces. This includes pallets, bottle crates, pails, garbage bins, food & beverage packaging products, decoration accessories, electric parts and auto parts. Bangpu Factory Producing battery cases. Important raw materials are various types of plastic resin, which are purchased domestically from various producers. Hence, there is no problem on raw material quality or shortage. However, when

Annual Report 2008 - As of December 31, 2008

21


crude oil price rose, the price of plastic resin also increased. To reduce risk on fluctuation of resin prices, the Company placed frequent orders and negotiated for better trade condition with suppliers on occasional basis to get reasonable raw material prices. In the case of rising raw material prices, the Company sometimes can pass on rising cost to customers, if there is such an agreement. Taking customers’ orders in a short period and focusing on OEM business can help reduce risk from price fluctuation of raw materials. The production process does not cause any negative impact to environment. Currently, the Company is doing R&D on BioPlastic which is degradable as an alternative choice in the future. (e) Pending Orders Customer-base of the Company is extensive; therefore, the Company did not rely on big customers whose pending orders valued more than 10% of total revenue. (2) Household Products (a) Description of Product or Service Household Products comprise tableware and kitchenware made of melamine powder and beautifully decorated with printed patterns or cartoons characters. They include dish, bowl, rice bowl, ladle, spoon, cup etc. Our factory has received promotional privileges from The Board of Investment. (b) Marketing and Competition Description of Customers distributed by the sale agents and direct sales and export. Credit term Usually credit term of 30 150 days is granted to wholesalers. Sales in grand

22

Annual Report 2008 - As of December 31, 2008

sales event are made in cash and direct sales are also mostly made in cash. Competitive Strategy Emphasis is made on high quality product with beautiful decoration and colorful design along with product shapes which are suitable for multi-purpose functions. Distribution Channel Household products have the following distribution channels: Export Sales : 42.1% Domestic Sales : 57.9% Distributors are Siam Melamine Marketing Co., Ltd. and Srithai Marketing Co., Ltd. They have been our trade partners for a very long time. (c) Competitive Environment Houseware that made of melamine powder with heat resistant up to 100 oC is suitable for producing food container because it is safe for consumer. There are currently not so many producers in the market. Melamine products of the Company become popular in the markets both domestic and abroad due to their durable and many beautiful designs with the use of 100% melamine powder. Export markets can be expanded to neighbouring countries and developed countries. The Company is the leader in business of melamine products and largest manufacturer in Thailand. The Company has modern production technology and has adopted Lean Manufacturing process in the production of houseware. The Company is moving forward to more automation in its production process. It has added another production base for houseware in Vietnam in order to reduce production cost and increase price competitiveness of the Company. Presently the Company is the market leader for household plastic products made of melamine distributed under 6 brands, i.e. Superware, Vanda, Flowerware, Melamineware, UNICA and Ektra. In Thailand, the Company is the only melamine product distributor who deploys a team force of direct sales.


Size of the Company as Compared to Competitors’ The Company is biggest in term of market share and production capacity. Our production capacity is in excess of 10,000 tons per annum, bigger than those of competitors many times. (d) Sourcing of Product or Service The Company produces its household plastic products made of melamine at the factory in Nakorn Rachasrima province, in Suranaree Industrial Estate. Production is focused on made-toorder products as per purchase orders from overseas, and to satisfy demand for certain popular designs in the domestic market. Major raw material is melamine powder, almost all purchased from domestic producers, i.e. Thai MFC Co., Ltd., Thai K.K. Co., Ltd. and Panasonic Electric Works (Ayuthaya) Co., Ltd. These three companies have maintained good relationship with the Company. There are no problems on quality or shortage of raw material, and the production process causes no environmental impacts. The Company buys melamine powder from Thai MFC Co., Ltd. more than 50% of total purchase. Apart from the standard quality, purchase price is reasonable due to Thai MFC Co., Ltd. being an affiliate, and there is no shortage problem of raw material. (e) Pending Orders The Company sells to tens of thousands of customers in domestic and export markets, both

consumers and distributors. There is no pending order amounted more than 10% of total revenue.

“Ektra” products are made of plastic or melamine. It is designed for Metro living people to be in line with the popularity of designed products that are suitable for modern living. This creates the expansion of upper-class customers. Ektra products are popular quite satisfactorily, especially Modern Catering products that are tableware in modern style. The Company sells these products through direct sales, department stores, leading shops and export market. 2.4.2 Trading Business Line Besides Plastic Business Line, Trading Business Line is another revenue generator for the Company. This involves searching/importing of new products of high quality, modern and in-trend, and popular both domestically and internationally to sell here at reasonable prices. Below are products on the Company’s shelf. (a) Description of Product or Service Products categorized under trading business line comprise:- Domestic Products Bedding, food cooking ware, consumable products such as health-care & beauty-care products, supplementary foods and other consumer products, etc. Imported Products Lock & Lock food preservation boxes with special locking system being imported from Korea. Gadgets used in kitchen and catering under brand names “Albert”, “Broggi”, and “Ghidini” from Italy. Annual Report 2008 - As of December 31, 2008

23


Tables, sun loungers, and artificial rattan chairs under brand names “Evolutif” and “Kettal” from France and Spain. (b) Marketing and Competition Description of Customer End users and HoReCa business which consists of Hotel, Restaurant, and Catering. Credit term Usually credit term of 90 150 days is granted to wholesalers. Sales in grand sales event are made in cash and direct sales are also mostly made in cash. Competitive Strategy Emphasis on products that are high potential in the market and reasonable price as well as are differentiated from existing products locally. Most of them are imported and then distributed by direct sales systems either Singlelevel Marketing (SLM) or Multi-level Marketing (MLM) to penetrate individual consumers and target customers. Moreover, sales promotion activities have been used continually to gain product recognition. In addition, the Company has also focused on selling complete range of a product line or groups of products that could be offered to the same target group of customers. Distribution Channel Sell directly to consumers and use selling agents as distributors. Moreover, direct sales systems both Single-level Marketing (SLM) and Multi-level Marketing (MLM) have been used. (c) Competitive Environment The Company committed itself to select products of high quality and popularity to be distributed to customers. We also do the market survey in order to pick up the right product that could satisfy the customer. We continually launch marketing and sales activities through distribution channels of the Company – sales agents, direct

24

Annual Report 2008 - As of December 31, 2008

sales, and department stores. All of these activities allow recognition and make easy access to our product for consumers. As a result, our products become well-known and accepted among customers, and have high potential to be the products of common use and to gain more sales in the future. Anyway, the Company carefully studied products and market in order to avoid unnecessary risk and competition. Besides, trading business does not require large investment. If any product is not lucrative or not welcome by consumers, the Company could give up distribution of that product with very little impact. It is a good point of this type of business.

Size of the Company as Compared to Competitors’ The Company cannot compare size of trading business with its competitors’ because there are many types of products and of different applications. There are many competitors of many sizes, so that the Company could not evaluate market condition of each product and determine market share. However, given special quality, feature and patent protection, the Company’s products are difficult to copy and become another choice of consumers. (d) Sourcing of Products or Services The Company procures products from both local and international sources. The Company does not face product shortage problem eventhough most products are popular and well-accepted among customers since it has good relationship with the manufacturers.

(e) Pending Orders The Company distributed products to various types of customers – i.e. end users, retailers, sales agents and HoReCa (Hotel, Restaurant, and Catering). In addition, revenue proportion of trading business in the year 2008 is still small as compared to total revenue of the Company. Therefore, there is no pending order amounted more than 10% of total revenue.


2.4.3 Other Business Other business lines comprise mould-making business which is supporting plastic business, and businesses other than plastic business and trading business as following:- (1) Mould-Making Business The Company does not itself make moulds for sale to outsiders. Mould-making business has been operated by our subsidiaries, namely Srithai Miyagawa Co., Ltd. and Srithai Moulds Co., Ltd. Both companies are leaders in this business. Their products are supplied to automobile industry, electrical appliance industry and toiletry which require very high precision of injected parts. Srithai Shin-Osaka Co., Ltd., another company in Srithai Group, has been providing mould laminating business. As mould is used for producing both industrial and household products, mould is important to the plastic business line. Each mould has different feature and efficiency. If low quality mould is used, the end products may be of low quality and substandard and it may result in rejects in the production line. There are three groups of moulds as follow:- Group 1 Mould to inject products of simple design like household products, electrical appliances and toys that require simple plastic injection system. This group of moulds are cheap and many small mould-makers are involved in this business. Group 2 Mould to inject products like electric parts, auto parts and sanitaryware that need high & long process technology. This requires high investment in machines and software to support production. Srithai Miyakawa Co., Ltd and Srithai Moulds Co., Ltd are mould-makers for this group of moulds.

Group 3 Mould of round shape and smooth surface like mould to inject buckets or glass, which require high efficiency machines. Most mouldmakers in Thailand could not make moulds of this group, so they have to hire offshore mould-makers to make such moulds and then import it at expensive costs. The Company’s subsidiary has planned to improve and develop production technology to produce moulds of this group in the future to substitute import. (a) Description of Product or Service It is a hire-of-work to make moulds for plastic injection or melamine compression as per designs and sizes described by clients, including mould repair services. (b) Marketing and Competition Plastic products have been used increasingly every year as manufacturers look toward cost saving by changing raw materials from high cost metal to low cost plastic. They are in auto industry, electrical appliance industry, sanitaryware industry, etc. Mould is an important part and a start point of plastic injection. Over the past three years, there were a lot of mould makers, Thai or foreigners, invested in mould-making businesses, small or big moulds, with initial investment of approximately THB 100 million each. In addition, with support and personnel development of this industry in the country to improve advancement and efficiency of staffs, it results in an increase in mould production capacity and no more labor shortage. Production capacity of moulds could fulfill demand in the country. Only moulds of complicated shape and requiring high production technology are imported. With increasing demand for moulds, plastic product manufacturers could hire mould-makers inside or outside the country by comparing quality, capability and pricing among them before making decision. Hence, mould industry in Thailand has faced fierce competition from foreign makers in term of both pricing and technology. Annual Report 2008 - As of December 31, 2008

25


(c) Competitive Status and Potential Competency and availability of skilled labors, modern machinery & equipments, and Company software have made Srithai Miyakawa Co., Ltd. and Srithai Moulds Co., Ltd. capable in making high precision moulds. They could make and supply moulds to auto industry, electrical appliance industry, sanitaryware industry, and others as many as 200-300 sets per annum, amounting to THB 200-300. In 2008, the two companies got orders from their customers only 70-80% of their production capacity due to economic recession and price-cutting competition. However, they tried to cut costs to increase competitiveness. They set up a goal to develop their competency that they will be able to make more complicated moulds. Size of the Company as Compared to Competitors’ Srithai Miyagawa Co., Ltd. has invested in tools, machinery and man-power to be able to make moulds of weight 200 kgs. up to 5,000 kgs., whereas Srithai Moulds Co., Ltd. can make large mould of weight up to 10,000 kgs. There are about 50 competitors of the same size with us. However, those competitors have special skill in different areas of products. As a result, competition is not so high. (d) Sourcing of Product or Service Iron ingot is the raw material of mouldmaking. There are many import agents for iron ingots in Thailand. Hence, competition among those import agents is high. Mould-making companies of ours can then procure iron ingots easily without shortage of supply. (e) Pending Orders As of December 31, 2008, Srithai Miyakawa Co., Ltd, Srithai Moulds Co., Ltd and Srithai ShinOsaka Co., Ltd, had pending orders not more than 10% of total revenue. However, mould making is time consuming, especially on design, production and testing in its normal production process. As

26

Annual Report 2008 - As of December 31, 2008

such, if purchase orders come in late of the year, there is a chance that pending jobs will be varied subject to proportion of purchase order amount received by year end. (2) Other Businesses (a) Description of Product or Service S.K.I. Ceramics Co., Ltd. Manufacturing ceramic tablewares. Srithai Packaging Co., Ltd. Manufacturing corrugated paper boxes printed by offset technique for sale to goods manufacturers (made-to- orders) LN Srithai Comm Co., Ltd. Manufacturing fixed-line telephone sets, both with cord and cordless, and switching board. (b) Marketing, Competition, and Competitive Environment S.K.I. Ceramics Co., Ltd. Very high competition in business. Products of the company are exported to U.S.A. and Japan under brand names of customers. Besides, the company has sold ceramic products under “Miyako” Brand for local customers in order to increase sales channels for the company. Srithai Packaging Co., Ltd. Facing strong competition. However, it can retain a group of loyal customers with its quality and service, so there is no problem. LN Srithai Comm Co., Ltd. Most of its products are for export. Major customer is the parent company in Korea. The company acts as a production base for the parent company. (c) Sourcing of Product or Service S.K.I. Ceramics Co., Ltd. Major raw materials are clay which are purchased from both local trader and abroad; stickers and coating solution from a shareholder, Iwatani International Corporation (Osaka). There is no raw material shortage problem.


Srithai Packaging Co., Ltd. Major raw materials are card board and craft paper, which are all purchased from domestic suppliers. Sometimes price of paper pulp rises, causing price of paper to increase to some extent. There is no problem of raw material shortage. LN Srithai Comm Co., Ltd. Major raw materials are IC and electronics parts imported from overseas distributors. There is no raw material shortage problem as these raw materials are generally available.

Plastic components are outsourced from local plastic injection factories. Since there are so many plastic injection factories, there is no problem of shortage of supplier. (d) Pending Orders S.K.I. Ceramics Co., Ltd., Srithai Packaging

Co., Ltd., and LN Srithai Comm Co., Ltd. had no pending order valued more than 10% of total revenue.

Annual Report 2008 - As of December 31, 2008

27


3. STRUCTURE OF SHAREHOLDERS AND MANAGEMENT 3.1 LIST OF 10 MAJOR SHAREHOLDERS As of December 31, 2008 3.1.1 SHAREHOLDERS WHO COULD PARTICIPATE IN FORMULATION OF POLICIES Name MR. SANAN ANGUBOLKUL

Rank Shares % 1 44,082,351 16.27

Major Business Chairman and President of Srithai Superware Pcl. 5.61 Director of Srithai Superware Pcl.

MRS. SRISUDA LERTSUMITKUL 3 15,206,400 3.1.2 SHAREHOLDERS WHO COULD NOT PARTICIPATE IN FORMULATION OF

CORPORATE POLICIES Name Rank Shares % MS. MAYUREE SIRIVAJANANGKUL

2

16,307,349

6.02

MR. SOMBAT & MS. NALINEE LERTSUMITKUL

4

11,251,700

4.15

MR. SAMRERNG MANOONPOL

5

10,481,400

3.87

MR. SOMYOD LERTSUMITKUL

6

10,070,815

3.72

MS. BUNNAPA LERTSUMITKUL

7

7,320,000

2.70

MR. SOMSAK LERTSUMITKUL

8

7,102,070

2.62

HSBC BANK PLC - CLIENTS GENERAL A/C

9

6,887,200

2.54

MR. KAMONPLUST MEKWORAWUT

10

6,652,500

2.45

135,361,785

49.95

Total shares of 10 major shareholders Total common shares

270,990,480 100.00

Remark : 1. The Company decreased the registered and paid-up capital from 2,857,142,860 Baht to 2,709,904,800 Baht by cutting off the common shares that were repurchased and have not yet been sold of 14,723,806 shares at the par value of 10 Baht or the total value of 147,238,060 Baht. The Company has already registered the decreased share capital with the Ministry of Commerce on 12 December 2008. 2. Investors can check name-list of the current top 10 major shareholders shown in the Company’s website before arrival date of the Annual General Meeting of Shareholders. 3.2 MANAGEMENT The Board of Directors is responsible for overall management of the Company. According to the Articles of Association, the Board consists of at least 5 directors but not more than 12 directors, and at least 3 of them must be independent directors. At least half a number of Directors representing in the Meeting of the Board of

28

Annual Report 2008 - As of December 31, 2008

Directors constitutes a quorum. The Meeting of Shareholders nominates Directors. The term of Directorship is 3 years. Any director whose term is expired can be re-elected by the Meeting of Shareholders. Management conducts business on behalf of the Board of Directors.


Annual Report 2008 - As of December 31, 2008

29

Mr. Pongsak

Kantiratanawong Marketing

Director-

Pakaging

�Products

Mr. Pawat

Chalermpong Marketing

Director

Industrial

Products

Mr. Jarung Srisakul Factory Director- Industrial Products

(Acting) Chief Operating Officer

Mr. Manit

Ativanichayaphong (Acting)

Direct Sales

Director

Mr. Manit

Ativanichayaphong Trading Business

Director

Mr. Manit Ativanichayaphong

Ms. Nitaya

Prasertnukulphol Marketing

Director

Household Products

Mr. Apisit Tangsatit Senior Factory Director-Industrial Products

Mr. Naphol Lertsumitkul Assistant to the President

Mr. Prayoon

Kaijitte Personnel &

Administration

Director

Mr. Prin

Bholnivas (Acting)

Finance

Director

Chief Financial Officer

Mr. Prin Bholnivas

Internal Audit Department

Safety Section

Audit Committee

Risk Management Sub-Committee

Mr. Sanan Angubolkul President

Executive Committee

Board of Directors

Office of Company Secretary

Nominating and Remuneration Committee

3.2.1 STRUCTURE OF ORGANIZATION

Ms. Bunnapa

Lertsumitkul Human

Resource

Development

Director


3.2.2 BOARD OF DIRECTORS : AUTHORITY AND RESPONSIBILITIES BOARD OF DIRECTORS

Standing from left to right : Mr. Enghug Nontikarn, Mr. Prin Bholnivas, Mr. Naphol Lertsumitkul, Mr. Manit Ativanichayaphong, Mr. Suchat Boonbanjerdsri Seated from left to right

30

Annual Report 2008 - As of December 31, 2008

: Mrs. Siriporn Sailasoot, Mr. Sanan Angubolkul, Prof. Viroj Lowhaphandu, Mrs. Srisuda Lertsumitkul


1. Mr. Sanan

Angubolkul

Chairman, President and Nominating and Remuneration Committee Member 2. Prof. Viroj Lowhaphandu Independent Director and Chairman of the Audit Committee 3. Mr. Enghug Nontikarn Independent Director, Audit Committee Member and Chairman of the Nominating and Remuneration Committee 4. Mr. Suchat Boonbanjerdsri Independent Director and Audit Committee Member 5. Mrs. Srisuda Lertsumitkul Director 6. Mr. Manit Ativanichayaphong Director and Risk Management Sub-Committee Member 7. Mr. Naphol Lertsumitkul Director 8. Mr. Prin Bholnivas Director, Nominating and Remuneration Committee Member, Chairman of the Risk Management Sub-Committee and Company Secretary 9. Mrs. Siriporn Sailasoot Independent Director Remark : Mrs. Siriporn Sailasoot has been holding directorial position since 3 March 2008 according to the Board Resolution no. 1/2551, held on 24 February 2008, replacing Mr.Thawee Kongyungyuen, the late Director who passed away on 12 January 2008. AUTHORITY AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS The Board of Directors has the following authorities and responsibilities : 1. Performing duties in accordance with the law, the Objects and Articles of Association of the Company as well as the resolution of the Meeting of Shareholders; 2. Prescribing business policies and targets for the Management to follow; 3. Monitoring and controlling Management to conduct business efficiently and in good faith, and to follow shareholders’ resolution; 4. Calling for the Meeting of the Shareholders at least once a year to report business performance and to request for the resolutions on matters beyond the power of the Board of Directors e.g. declaration of dividend; 5. Calling for the Meeting of the Board of Directors at least once every three months; 6. Entering into any transaction or any act which may have material effect on financial position, obligation on liabilities, and reputation of the

Company, e.g. borrowing money from financial institution; 7. Entering into any connected transaction that requires no approval of Shareholders’ Meeting between the Company, its subsidiaries, or affiliated companies and connected persons; 8. Setting up internal control system and efficient internal auditing procedure; 9. Directing and monitoring the accuracy, completeness, and transparency of financial reporting and reporting of other information to shareholders and other concerned parties; 10. Nominating and defining scope of duties and responsibilities of ad-hoc committee in any particular issue; 11. Nominating and changing authorized signatories who can bind the Company; 12. Setting up policies, business strategies, business plan, and annual budget for the Company; 13. Following up results of work and business results quarterly and annually of the Company, and comparing it to budget;

Annual Report 2008 - As of December 31, 2008

31


14. Entering into any contract that is not normal 16. Amending or changing the scope of authorities business of the Company, or any material and responsibilities of the Board as mentioned contract of normal business nature; above. 15. Directing and monitoring the compliance to principles of good corporate governance; and 3.2.3 MANAGEMENT : AUTHORITY AND RESPONSIBILITIES MANAGEMENT (Definitions as set by the Office of the Securities and Exchange Commission) 1. Mr. Sanan Angubolkul Chairman and President 2. Mr. Prin Bholnivas Chief Financial Officer 3. Mr. Manit Ativanichayaphong Acting Chief Operating Officer, Trading Business Director and Acting Direct Sale Director 4. Mr. Naphol Lertsumitkul Assistant to the President 5. Mr. Prayoon Kajitte Personnel and Administration Director 6. Ms. Bunnapa Lertsumitkul Human Resource Development Director 7. Mr. Apisit Tangsatit Senior Factory Director - Industrial Products 8. Mr. Pawat Chalermpong Marketing Director - Industrial Products 9. Ms. Nitaya Prasertnukulphol Marketing Director - Household Products 10. Mr. Pongsak Kantiratanawong Marketing Director - Packaging Products 11. Ms. Jarung Srisakul Factory Director - Industrial Products 12. Mr. Thawee Kongyungyuen Factory Director (Korat) Remark : Mr. Jarung Srisakul held position on 1 January 2008. Mr. Thawee Kongyungyuen, Factory Director (Korat), passed away on January 12, 2008. AUTHORITY AND RESPONSIBILITIES OF THE PRESIDENT 1. Manage and supervise the Company’s business operations in accordance with the direction/ goal of the Company and to strengthen the Company’s businesses according to the policies of the Board of Directors. 2. Manage and Implement short-term and longterm plans in order to achieve the Company’s objectives and goals. 3. Implement financial management in order for the Company to have proper and strong financial structure. 4. Manage proactive public relations and foster good relationship with every group of

32

Annual Report 2008 - As of December 31, 2008

5. 6. 7. 8.

stakeholders in order to create good and sustainable Company’s image. Implement risk management properly and efficiently. Manage the organization’s activities regarding environmental responsibility and corporate social responsibility. Supervise and perform duties according to the laws, and Company’s objectives, rules, and regulations. Perform duties as assigned by the Board of Directors.


AUTHORITY AND RESPONSIBILITIES OF THE MANAGEMENT The Management will manage the Company so as to assure that work plan being implemented and policies of the Board being followed. The Executive Committee will carry out any assignment from the Board as follows:- 1. Managing, directing and monitoring the performance of the Company in order to be efficient, comply with the direction and objectives of the Company and keep up the strength of business as stated by policies of the Board of Directors; 2. Screening any agenda to be proposed to the Board of Directors and carrying out any assignment from the Board; 3. Reporting to the Board;

4. Planning and screening all short-term and long-term plans so as to achieve purpose and objectives of the Company; 5. Planning financial management so as to diminish financial burdens and to solidify the financing structure of the Company; and 6. Performing duties in compliance with the laws, the objectives and Articles of Association of the Company. COMPANY SECRETARY Mr. Prin Bholnivas (holding position on 13 August 2008 according to the Board Resolution no. 5/2551, held on 12 August 2008)

3.2.4 BACKGROUND INFORMATION ABOUNT DIRECTORS AND EXECUTIVES 1) Mr. Sanan Angubolkul Age 63 Years

Position

: Chairman, President and Nominating and Remuneration Committee Member Has authority to sign for the Company as per Certification Document Education : - Bachelor Degree in Business Administration, University of Oglethorpe, Atlanta, Georgia, U.S.A. - Honorary Doctorate Degree in Business Administration,

Chiang-Mai University - Honorary Doctorate Degree in Marketing, Sripatum University - Certificate of Achievement, 3rd Class,

The National Defence College of Thailand Training : Chairman 2000 Program, class no. 4/2001 Thai Institute of Directors Association Thai Capital Market Leaer Program 7 (2008) Thai Capital Market Academy Experience : 1972 - Present Srithai Superware Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies - Non-listed Companies : Please see the additional details in 3.2.6 “ Details of Directors and Management who have control over companies in Srithai Superware Group� Competing companies / company : None related to business of the Company No. of Share : 44,082,351 Shares or 16.27 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None Annual Report 2008 - As of December 31, 2008

33


2) Prof. Viroj Lowhaphandu Age 79 Years

3) Mr. Enghug Nontikarn Age 53 Years

34

Annual Report 2008 - As of December 31, 2008

Position Education

: Independent Director and Chairman of the Audit Committee Has no authority to sign for the Company : - Bachelor of Commerce and Bachelor of Law, Thammasat University - Higher Diploma in Accountancy, Thammasat University - Master of Business Administration, The American University, Washington D.C., U.S.A. - Certificate of Achievement, 22nd Class,

The National Defence College of Thailand - Honorary Doctorate Degree in Accounting, Thammasat University - Honorary Doctorate Degree (Business Administration-Banking), Sripatum University - Honorary Doctor of Philosophy (Leadership in Society, Business and Politics), Rangsit University Training : Director Certification Program (DCP) Thai Institute of Directors Association Certified Professional Internal Auditors Certified Public Accountant (Thailand) Experience : 1978 - 1980 Deputy Permanent Secretary of State, for Finance 1980 - 1985 Director General of Treasury Department 1985 - 1986 Director General of Revenue Department 1986 - 1990 Director General of Customs Department 1990 - 1991 Director General of Excise Department Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies Executive Director, Central Plaza Hotel Pcl. - Non-listed Companies : - Directors and Treasurer, Ajinomoto Foundation - Chairman Bangpra Golf International Co., Ltd. - Chairman Moong Pattana International Public Company Limited - Member of the Board of Trustee and Chairman of the Audit Committee The University of the Thai Chamber of Cmmerce - Chairman of the CPA Examination Sub-Committee Federation of Accounting Professions Competing companies / company : None related to business of the Company No. of Share : 0 Share or 0.00 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None Position : Independent Director, Audit Committee Member and Chairman of the Nominating and Remuneration Committee Has no authority to sign for the Company Education : M.B.A. - Faculty of Commerce & Accountancy, Thammasat University Training : Director Accreditation Program (DAP) Thai Institute of Directors Association


4) Mr. Suchat Boonbanjerdsri Age 50 Years

Experience

: 1979 - 1991 Krung Thai Bank Pcl. 1991 - 1995 Bangkok Metropolitan Bank Pcl. 1995 - 1998 Senior Vice President

Siam City Bank Pcl. 1998 - 2001 Executive Vice President

Siam City Bank Pcl. 2002 - 2006 First Executive Vice President Siam City Bank Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies Vice President Siam City Bank Pcl. - Non-listed Companies : None Competing companies / company : None related to business of the Company No. of Share

: 5,900 Share or 0.00 percent (as of December 30, 2008) (included shares held by spouse) Relationship among Directors : None Illegal acts in the past 10 years : None Position : Independent Director and Audit Committee Member Has no authority to sign for the Company Education : - M.B.A. - Finance & Marketing Wharton School, University of Pennsylvania, U.S.A. - Bachelor of Quantitative Economics, 2nd class honor Chulalongkorn University Training : Directors Certification Program (DCP) Audit Committee Program (ACP) Thai Institute of Directors Association Experience : 1985 - 1986 Dealer - Treasury Department Kasikornbank Pcl. 1986 - 1994 Manager, Los Angeles Branch Kasikornbank Pcl. 1987 Guest Lecturer, M.B.A. Program Thammasat University

Kasetsart University 1994 - 1996 Senior Vice President Asset Plus Securities Co., Ltd. 1996 - 1997 Managing Director

Dynamic Eastern Finance (1991) Pcl. 1997 - 1998 Non core Sale Department

Financial Restructuring Authority of Thailand 1999 - 2000 Advisor

Sub-Committee on Fiscal, Banking and Financial Institution

House of Representatives 2000 Guest Lecturer, M.B.A. Program Siam University 2001 - 2002 Director

Aeronautical Radio of Thailand Co., Ltd. A state enterprise under the Ministry of

Transport and Communication Annual Report 2008 - As of December 31, 2008

35


2001 - 2002 Director

Siam Syntech Construction Pcl. 2001 - 2005 Advisor

Sub-Committee on Economics

Development House of Representatives 2002 - 2006 Advisor, Risk Management Committee Aeronautical Radio of Thailand Co., Ltd. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : Director - Non-listed Companies Practicum Engineering Co., Ltd. Competing companies / company : None related to business of the Company No. of Share : 0 Shares or 0.00 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None 5) Mrs. Srisuda Lertsumitkul Position : Director Age 69 Years Has no authority to sign for the Company Education : Elementary school Training : Never take any training course of Thai Institute of Directors

Association Experience : Co-Founder of Srithai Superware Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : None - Non-listed Companies Competing companies / company : None related to business of the Company No. of Share : 15,206,400 Shares or 5.61 percent (as of December 30, 2008) Relationship among Directors : Mother of Mr. Naphol and Ms. Bunnapa Lertsumitkul Illegal acts in the past 10 years : None 6) Mr. Manit Ativanichayaphong Position : Director, Risk Management Sub-Committee Member, Age 64 Years Acting Chief Operating Office, Trading Business Director and Acting Direct Sale Director Has authority to sign for the Company as per Certification

Document Education : Bachelor Degree in Marketing, Ramkamhaeng University Training : Director Accreditation Program (DAP) Director Certification Program (DCP) Thai Institute of Directors Association Experience : 1967 - 1974 Account Executive Grant Advertising International Inc. 1974 - Present Srithai Superware Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : Please see the additional aetails in 3.2.6 “Details of - Non-listed Companies Directors and Management who have control over companies in Srithai Superware Group� Competing companies / company : None related to business of the Company

36

Annual Report 2008 - As of December 31, 2008


7) Mr. Naphol Lertsumitkul Age 48 Years

8) Mr. Prin Bholnivas Age 53 Years

No. of Share

(included shares held by spouse) Relationship among Directors Illegal acts in the past 10 years Position

: 1,148,720 Shares or 0.42 percent (as of December 30, 2008)

: None : None : Director and Assistant to the President Has authority to sign for the Company as per Certification

Document Education : Associate of Applied Science in Business Management, University of Houston, Texas, U.S.A. Training : Director Accreditation Program (DAP) Director Certification Program (DCP) Thai Institute of Directors Association Experience : 1986 - Present Srithai Superware Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : Please see the additional aetails in 3.2.6 “Details of - Non-listed Companies Directors and Management who have control over companies in Srithai Superware Group” Competing companies / company : None related to business of the Company No. of Share : 4,201,700 Shares or 1.55 percent (as of December 30, 2008) (included shares held by spouse) Relationship among Directors : Son of Mrs. Srisuda Lertsumitkul and elder brother of Ms. Bunnapa Lertsumitkul Illegal acts in the past 10 years : None Position : Director, Nominating and Remuneration Committee Member, Chairman of the Risk Management

Sub-Committee, Company Secretary and Chief Financial Office Has authority to sign for the Company as per Certification

Document Education : - B.B.A. (Accounting), Thammasat University - M.B.A. (Accounting), University of Wisconsin - Madison, Wisconsin, U.S.A. Training : Director Accreditation Program (DAP) Director Certification Program (DCP) Role of the Compensation Committee (RCC) Audit Committee Program (ACP) Company Secretary Program Developing Corporate Governance Policy D&O Insurance Mitigating Directors Liabilities Risk Thai Institute of Directors Association Experience : 1982 - 1989 Chief of Financial Analysis & Planning

Division, Accounting and Finance

Department, State Railways of Thailand 1989 - 1992 Financial Controller Sunny’s Supermarket Co., Ltd. 1992 - 1993 Senior Manager - Management Information System Division, Accounting Department TelecomAsia Corporation Pcl. Annual Report 2008 - As of December 31, 2008

37


9) Mrs. Siriporn Sailasoot Age 62 Years

38

Annual Report 2008 - As of December 31, 2008

Present Positions in Companies - Listed Companies - Non-listed Companies

1993 - 2000 Assistant Vice President - Finance & Accounting, Marketing and Distribution Business Group, Charoen Pokphand Group : Srithai Superware Public Company Limited : Director Practicum Engineering Co., Ltd. Please see the additional details in 3.2.6 “Details of Directors and Management who have control over companies in Srithai Superware Group” Competing companies / company : None related to business of the Company No. of Share : 200,000 Shares or 0.07 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None Position : Independent Director Has no authority to sign for the Company Education : - B.Sc. in Engineering, Electrical Engineering Chulalongkorn University - Certificate in Energy Planning Programme for Southeast Asia Countries, Pennsylvania State University - Certificate, Top Executive Training Program 1, Office of the Civil Service Commission - Certificate of Achievement, 42nd Class, The National Defence College of Thailand, Institute of National Defence Academy - Certificate in Leadership, Management and Governance in The Public Section, The Australian National University Training : Directors Certification Program Thai Institute of Directors Association Experience : 1997-2000 Deputy Director General (Administrator Level 9), Department of Energy Development and Promotion, Ministry of Science, Technology and Environment 2000 – 2002 Director General (Administrator Level 10), Department of Energy Development and Promotion, Ministry of Science, Technology and Environment 2002 – 2006 Director General (Administrator Level 10), Department of Alternative Energy Development and Efficiency, Ministry of Energy 2006-2007 Advisor Thai Military Bank Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies (holding directorial position on 3 March 2008) - Non-listed Companies : Advisor Corporate Development & Productivity Improvement Office, Charoen Pokphand Group Co., Ltd.


10) Mr. Prayoon Kajitte Age 58 Years 11) Ms. Bunnapa Lertsumitkul Age 47 Years 12) Mr. Apisit Tangsatit Age 51 Years

Competing companies / company related to business of the Company No. of Share Relationship among Directors Illegal acts in the past 10 years Position Education Experience Present Positions in Companies - Listed Companies - Non-listed Companies Competing companies / company related to business of the Company No. of Share Relationship among Directors Illegal acts in the past 10 years Position Education Experience Present Positions in Companies - Listed Companies - Non-listed Companies Competing companies / company related to business of the Company No. of Share Relationship among Directors

: None : 0 Shares or 0.00 percent (as of December 30, 2008) : None : None : Personnel and Administration Director Has no authority to sign for the Company : Associate Degree, Rajamangala Institute Bangkok Technical Campus : 1972 - 1974 Technician, Anglo-Thai Industrial Co., Ltd. : Srithai Superware Public Company Limited : None : None : 90,000 Shares or 0.03 percent (as of December 30, 2008) : None : None : Human Resource Development Director Has no authority to sign for the Company : City of London Polytechnic : 1984 - Present Srithai Superware Pcl. : Srithai Superware Public Company Limited : None : None

: 7,320,000 Shares or 2.70 percent (as of December 30, 2008) : Daughter of Mrs. Srisuda Lertsumitkul younger sister of Mr. Naphol Lertsumitkul Illegal acts in the past 10 years : None Position : Senior Factory Director - Industrial Products Has no authority to sign for the Company Education : Bachelor Degree in Mechanics, King Mongkut’s University of Technology Thonburi Experience : 1983 - Present Srithai Superware Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : Please see the additional details in 3.2.6 “Details of - Non-listed Companies Directors and Management who have control over companies in Srithai Superware Group” Competing companies / company : None related to business of the Company No. of Share : 30,142 Shares or 0.01 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None Annual Report 2008 - As of December 31, 2008

39


: Risk Management Sub-Committee Member and Marketing Director - Industrial Products Has no authority to sign for the Company : - Bachelor Degree in Business Administration (Marketing),

Ramkamhaeng University - M.B.A, Webster University, St. Louis, U.S.A. Experience : 1987 - 1988 Account Executive Fareast Advertising Pcl. 1988 - 1990 Import & Export Department Siam Commercial Bank Pcl. 1990 - 1993 Manager of Finance Shinawatra Computer and

Communication Pcl. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : Please see the additional details in 3.2.6 “Details of - Non-listed Companies Directors and Management who have control over companies in Srithai Superware Group� Competing companies / company : None related to business of the Company No. of Share : 30,000 Shares or 0.01 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None 14) Ms. Nitaya Prasertnukulphol Position : Risk Management Sub-Committee Member and Age 49 Years Marketing Director - Household Products Has no authority to sign for the Company Education : M.B.A. (Marketing), Thammasat University Experience : 1986 - 1994 Marketing Manager Berli Jucker (Public) Co., Ltd. 1994 - 2000 Director of Marketing & Sales International Beauty Products Co., Ltd.

Thailand (a subsidiary company of The Tempo

Group, Indonesia) 2000 - 2006 Senior Technical Adviser in Marketing &

Sales, PT. Barclay Products, Indonesia (a subsidiary company of The Tempo

Group, Indonesia) Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : None - Non-listed Companies Competing companies / company : None related to business of the Company No. of Share : 0 Shares or 0.00 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None 13) Mr. Pawat Chalermpong Age 48 Years

40

Annual Report 2008 - As of December 31, 2008

Position Education


15) Mr. Pongsak Kantiratanawong Age 51 Years 16) Mr. Jarung Srisakul Age 55 Years

Position Education Experience

: Marketing Director - Packaging Products Has no authority to sign for the Company : - B. Sc. (Biochemistry), Chulalongkorn University - MBA (Marketing), Thammasat University : 1980 - 1985 Technical Sales Representative Hoechst Thai Ltd. 1985 Marketing Off ice SCT Co., Ltd. 1986 - 1993 Senior Marketing Manager Thai Modern Plastic Industry Co., Ltd. 1993 - 2007 Vice President C.P. Packaging Industry Co., Ltd. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies : None - Non-listed Companies Competing companies / company : None related to business of the Company No. of Share : 0 Shares or 0.00 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None Position : Risk Management Sub-Committee Member and Factory Director Industrial Products Has no authority to sign for the Company Education : - Bachelor of Science in Electronics & Telecommunication Engineering, Saint Louis University - Master of Science in Management Engineering (MS.ME), Saint Louis University Experience : 1993 - 2000 Manufacturing Director Unico Consumer products Co., Ltd. 2001 - 2004 General Manager Bangkok Decor Metal Co., Ltd. 2004 - 2006 General Manager Srithai Miyagawa Co., Ltd. Present Positions in Companies : Srithai Superware Public Company Limited - Listed Companies (holding directorial position on 1 January 2008) - Non-listed Companies : None Competing companies / company : None related to business of the Company No. of Share : 0 Shares or 0.00 percent (as of December 30, 2008) Relationship among Directors : None Illegal acts in the past 10 years : None

Annual Report 2008 - As of December 31, 2008

41


3.2.5 Attendance of Directors at meetings In the year 2008, there were 8 Board Meetings and 4 Audit Committee Meetings. Attendance report of Directors and Audit Committee Members is shown hereunder:- Number of Meetings Attended Board of Directors’ Audit Committee’s Meetings Meetings 8 - 8 4 8 4 8 4 6 - 8 - 7 - 8 4 7* -

Board of Directors’ Name

Mr. Sanan Angubolkul Prof. Viroj Lowhaphandu Mr. Enghug Nontikarn Mr. Suchat Boonbanjerdsri Mrs. Srisuda Lertsumitkul Mr. Manit Ativanichayaphong Mr. Naphol Lertsumitkul Mr. Prin Bholnivas Mrs. Siriporn Sailasoot * Mrs. Siriporn Sailasoot held directorial position on 3 March 2008 3.2.6 Details of Directors and Management who have control over companies in Srithai Superware

Group Abbreviation : CM = Chairman DR = Director ED = Executive Director Company   Subsidiaries Srithai (Vietnam) Co., Ltd. Srithai Moulds Co., Ltd. Srithai Nanoplast Co., Ltd. Srithai Miyagawa Co., Ltd. Srithai Lock&Lock Co., Ltd.(1) Srithai Shin-Osaka Co., Ltd. Associated Companies Srithai Sanko Co., Ltd. Srithai WBG Co., Ltd.(2) Thai MFC Co., Ltd. S.K.I. Ceramics Co., Ltd. Beijing Huatai Replica of Porcelain Products Co., Ltd. Srithai Packaging Co., Ltd.

42

Annual Report 2008 - As of December 31, 2008

Mr. Manit Mr. Prin Mr. Naphol Mr. Apisit Mr. Pawat Mr. Sanan Ativanichaya Angubolkul phong Bholnivas Lertsumitkul Tangsatit Chalermpong

  CM CM ED CM ED ED   ED ED DR ED DR

- - - - DR - - DR DR DR -

  DR DR DR DR DR DR   DR DR DR DR -

  - - - DR - -   - - - - -

  - - - DR - -   DR - - - -

  - - DR - - -   - - - - -

DR

-

DR

-

-

-


Mr. Manit Mr. Prin Mr. Naphol Mr. Apisit Mr. Pawat Mr. Sanan Ativanichaya Angubolkul phong Bholnivas Lertsumitkul Tangsatit Chalermpong

Company  

PT. Srithai Maspion Indonesia DR - - - - - Thai Takahashi Plastics Co., Ltd. DR - DR - - - (3) Soko Srithai Co., Ltd. - - - - - - (4) LN Srithai Comm Co., Ltd. DR - DR - - - Takahashi Korat (1995) Co., Ltd. DR - DR - DR - Takahashi Plastics Co., Ltd. DR - DR - - - Joint Venture Company           Srithai-Otto (Thailand) Co., Ltd. ED - DR - - ED Related Companies           Srithai Marketing Co., Ltd. - - - - - - Siam Melamine Marketing Co., Ltd. - - - - - - Srithai Stainless Co., Ltd. - - - - - - Firstpoint Translogistics Co., Ltd. - - - ED - - D.M.S. Tech Co., Ltd. DR - - - - - P.E.T (Thailand) Co., Ltd.(5) - - - - - - S.Sahatara (Thailand) Co., Ltd. DR - - - - - DR - - - - - Toho Foam (Thailand) Co., Ltd. (1) Registered incorporation of the company with the Ministry of Commerce on 25 December 2008. (2) Registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation . (3) Registered for the company’s dissolution in 2008 with the Ministry of Commerce and was under liquidation. (4) During the year 2008, status of investment in the company was changed from an associated company to other long-term investment, and Mr. Prin Bholnivas resigned from the directorial position. (5) Mr. Sanan Angubolkul resigned from the directorial position in the year 2008. 3.2.7 Director of Subsidiaries Abbreviation CM = Chairman, DR = Director, ED = Executive Director Name

Srithai Srithai Srithai Srithai Srithai Srithai

(Vietnam) Moulds Nanoplast Miyagawa Lock&Lock Shin-Osaka

Mr. Sanan

Angubolkul

CM

CM

ED

CM

ED

ED

Mr. Prin

Bholnivas

DR

DR

DR

DR

DR

DR

Mr. Manit

Ativanichayaphong

-

-

-

-

DR

-

Mr. Naphol

Lertsumitkul

-

-

-

DR

-

-

Annual Report 2008 - As of December 31, 2008

43


Name

Srithai Srithai Srithai Srithai Srithai Srithai

(Vietnam) Moulds Nanoplast Miyagawa Lock&Lock Shin-Osaka

Mr. Apisit

Tangsatit

-

-

-

DR

-

-

Mr. Pawat

Chalermpong

-

-

DR

-

-

-

Mr. Santi

Sakgumjorn

ED

-

-

-

-

-

Mr. Prapon

Siripanich

-

ED

-

-

-

-

Mr. Michio

Nakai

-

ED

-

-

-

-

Mr. Somyod

Lertsumitkul

-

-

DR

-

-

-

Mr. Seishiro

Miyagawa

-

-

-

DR

-

-

Mr. Shingo

Miyagawa

-

-

-

DR

-

-

Mr. Masanobu Terakura

ED

-

-

Mr. Park

Hyon Chul

-

-

-

-

DR

-

Mr. Kim

Il Hae

-

-

-

-

ED

-

Miss Suwanna Mahuttanapun - - - - - DR Note : Subsidiary means the company that Srithai Superware Public Company Limited has the right to vote directly and indirectly of more than 50% of all the rights to vote or has the authority to control financial management policy and its business operations. Financial statements of a subsidiary will be consolidated in financial statements of the parent company. 3.2.8 NOMINATION OF DIRECTORS In the year 2005, the Company has appointed a Nominating and Remuneration Committee, of which an Independent Director is Chairman, to perform the duty of nominating new directors, and propose to the Board for approval and/or propose to the meeting of shareholders for approval. The procedure of nominating directors was described in Article no. 13 and no. 14 of the Articles of Association as following:- “(1) One shareholder has one voting right for one share held; (2) Each shareholder will cast all his votes in (1) to elect one candidate or more as Director, but he cannot split his votes, more or less, to elect any candidate;

44

Annual Report 2008 - As of December 31, 2008

(3) The candidates shall be ranked in order descending from the highest number of votes to the lowest, and shall be appointed as directors in that order until all of the director positions are filled. Where the votes cast for candidates in descending order are tied, which would otherwise cause the number of directors to be exceeded, the chairman shall have a casting vote.�

Nomination of Executives When any senior executive resigns or retires, the Nominating and Remuneration Committee will nominate a new senior executive and propose to the Board for approval.


Report of the Nominating and Remuneration Committee To : Shareholders Srithai Superware Public Company Limited The Nominating and Remuneration Committee has been appointed by the Board of Directors according to the resolution of the Board of Directors’ Meeting No. 4/2548 on 10 August 2005 in order to comply with the Company’s good corporate governance policies and the good corporate governance principles of the Stock Exchange of Thailand to help the Board of Directors to recruit and nominate the potential directors and top executives, to determine the remuneration for the directors and top executives, and to ensure that such process is transparent, fair among stakeholders, and efficient to the business. The Nominating and Remuneration Committee consists of 3 Company’s directors and an independent director acts as the Chairman of the Committee. The term of the Nominating and Remuneration Committee shall be no more than 3 years and the Board of Directors’ Meeting No. 7/2550 on 10 November 2007 had the resolution to extend the term of the current Nominating and Remuneration Committee for another 3 years from the year 2008, and the term shall expire in the fiscal year 2010. Performance of the Nominating and Remuneration Committee In 2008, the Nominating and Remuneration Committee held the meeting for 3 times, and the number of times each member of the Nominating and Remuneration Committee attended the meeting was as follows :- Number of Times Attending the Meeting / Number of Name Position Total Meetings (Times) Mr. Enghug Nontikarn Chairman of the Nominating and 3/3 Remuneration Committee Mr. Sanan Angubolkul Member of the Nominating and 3/3 Remuneration Committee Mr. Prin Bholnivas Member of the Nominating and 3/3 Remuneration Committee and Secretary of the Committee Duties of the Nominating and Remuneration Committee during the year 2008 can be summarized as follows :- 1. Appointed Company’s director in replacement of Company’s director who passed away. 2. Elected Company’s directors in replacement of Company’s directors who were due for retirement by rotation and proposed director’s remuneration to the shareholders’ meeting No. 27 (for the year 2007). 3. Adjusted salaries of Company’s top executives for the year 2008. 4. Considered bonus for Company’s top executives for the performance of the year 2008. On Behalf of the Nominating and Remuneration Committee Mr. Enghug Nontikarn Chairman of Nominating and Remuneration Committee

Annual Report 2008 - As of December 31, 2008

45


46

3.2.9 REMUNERATION FOR DIRECTORS, EXECUTIVES AND MANAGEMENT (Definitions as set by the Office of the Securities and Exchange Commission) (1) Financial Remuneration - Directors 2007 2008 Amount Name – Position Amount (million baht) (million baht) Meeting Allowance Mr. Sanan Angubolkul : Chairman and President 0.200 0.187 Prof. Viroj Lowhaphandu : Chairman of the Audit

0.450 0.427 Committee Mr. Enghug Nontikarn : Audit Committee Member 0.250 0.233 Mr. Suchat Boonbanjerdsri : Audit Committee Member 0.250 0.233 Mrs. Srisuda Lertsumitkul : Director 0.100 0.095 Mr. Manit Ativanichayaphong : Director 0.100 0.095 Mr. Thawee Kongyungyuen : Director - 0.095 Mr. Naphol Lertsumitkul : Director 0.100 0.095 Mr. Prin Bholnivas : Director 0.100 0.095 Mrs. Siriporn Sailasoot* : Independent Director 0.075 - Total 1.625 1.555 * (holding directorial position on 3 March 2008 according to the Board Resolution no. 1/2551, held on 24 February 2008, replacing Mr.Thawee Kongyungyuen, the late Director, who passed away on 12 January 2008) - Management (1) 2008 2007 Number Amount (million baht) Number Amount (million baht) Salary 12 37.90 11 32.58 (2) 12 4.79 11 4.11 Bonus Total 12 42.69 11 36.69 (2) Other Remuneration None Note : 1. Management comprise: 1.1 Mr. Sanan Angubolkul 1.2 Mr. Prin Bholnivas 1.3 Mr. Manit Ativanichayaphong 1.4 Mr. Naphol Lertsumitkul 1.5 Mr. Thawee Kongyungyuen (passed away on January 12, 2008) 1.6 Mr. Prayoon Kajitte 1.7 Ms. Bunnapa Lertsumitkul 1.8 Mr. Apisit Tangsatit 1.9 Mr. Pawat Chalermpong 1.10 Ms. Nitaya Prasertnukulphol 1.11 Mr. Pongsak Kantiratanawong 1.12 Mr. Jarung Srisakul (Appointed on 1 January 2008) 2. Included accrued bonus of the year.

Annual Report 2008 - As of December 31, 2008


3.2.10 Report on Good Corporate

Governance The Board has realized the importance of good corporate governance in view of its role to increase transparency, competitiveness of the Company, and confidence among shareholders and stakeholders. Compliance to good corporate governance could be summarized as following:- 1. Right and Equality Conduct to Shareholders The Company pays attention to performing the duties with transparency and honesty, promoting the sustainable competitive advantage, and fostering the confidence among stakeholders. Thus, the Board of Directors implements the good corporate governance policy as follows:- Furnishing Information The Company disseminates updated and accurate information via many channels regularly, especially via the Company’s website (www. srithaisuperware.com). Business news, marketing activities, financial information and other information including message by the Chairman “In Touch…... From Chairman’s Desk” are broadcast from time to time via this channel.

Convening Shareholders’ Meeting The Company offers the rights to shareholders for the Annual General Meeting of Shareholders so they are able to submit the meeting agendas in several issues, including proposing the name of individuals to be the Company’s directors. The Company posts the details, criteria, procedures, and relevant documents regarding the submission of the meeting agenda and/or name of individuals to be the Company’s directors on the Company’s website, and informs such rights via the information system of the Stock Exchange of Thailand by giving sufficient time for considering and proposing such issues to the shareholders before proposing to the Board of Directors for further consideration. For the Annual General Meeting of Shareholders in 2007, there was no shareholder exercising such rights. The Company has forwarded relevant information of concerned agenda to all shareholders at least 14 days before date of meeting, and also informed them about criteria, information and details of significant agendas and opinion of the Board of Directors in each agenda as following:- - Rules and procedures of attending the meeting. - Proposing at least 1 independent director to be proxy of shareholders. - Agenda regarding the Board of Directors’ report of the Company performance during the past year. - Agenda regarding the approval of the audited Balance Sheet and Income Statement. - Agenda on appointing directors who have been considered by the Nominating and Remuneration Committee. Background information of nominated directors and number of times of attending Board Meeting in the past year was also furnished. In the agenda regarding the appointment of Company’s directors, the Company proposed to appoint the directors on an individual basis. - Agenda on remuneration of directors who have been considered by the Nominating Annual Report 2008 - As of December 31, 2008

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and Remuneration Committee. Policy on remuneration, criteria and procedure of consideration, amount and method of remuneration varied to responsibility of each director were also furnished. - Agenda on appointing auditor and audit fee as approved by the Audit Committee together with proposing name of auditor and auditor’s office, years of providing service to the Company, and opinion of the Board of Directors. - Agenda on appropriation of net profit and dividend payment with detail on dividend policy and comparing actual payment with the dividend policy. In the shareholders’ meeting, the Board of Directors consisting of Chairman/President/ Chairman of the Audit Committee/Chairman of the Nominating and Remuneration Committee/ Independent Directors/Executive Directors/ relevant high-level executives always pay attention to and attend the meeting all together. The Chairman of the Board of Directors acts as the Chairman of the meeting. He allocates sufficient time to shareholders for their inquiries. The Company Secretary informed the shareholders criteria used in the meeting and voting right. The Company distributed voting cards for each agenda to shareholders at time of registration and also arranged for a legal advisor to count the votes together with a representative of the shareholders witnessing the counting in each meeting agenda. After the meeting of shareholders, the Company has submitted all relevant information via IT system of the Stock Exchange of Thailand. The Company has also issued minutes of shareholders’ meeting describing sufficiently significant information such as names of attending/unattending directors, method of voting and vote counting, significant explanations, resolution of the meeting under three categories, i.e. approve, disapprove, or abstain, questions of shareholders and explanations. The

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Annual Report 2008 - As of December 31, 2008

said minutes of shareholders’ meeting (in details) has been broadcast via the Company’s website. Control and Monitor on Insiders’ Trading The Company has attached much importance on this matter. The Company has issued Regulation on Prevention of Insiders’ Trading in order to prevent manipulation of inside information for personal benefits of directors and executives, especially the trading of shares issued by the Company within 15 days before disclosure of financial statements to the general public. Offenders will face penalty according to codes of the Company and punishment personally as prescribed under the Securities and Exchange Act (version 4) B.E. 2551. Disclosure of Vested Interest of Directors, Executives and Other Concerned Parties The Company requires that if any director has conflict of interests with the Company in any agenda, such director shall not be in the meeting room in order to assure transparency and fairness toward the Company’s overall interests, and requires the Company’s directors and executives to prepare the conflict of interest report of their own and related parties and to submit it to the Company Secretary in order to observe requirements of relevant laws. 2. Roles of Stakeholders In 2006, the Company notified the code of ethics to every level of employees and the Company’s executives to serve as their guideline for carrying out their assignments with quality and virtue. The code of ethics covers the following:- 1) Guidelines for Treatment to Customers 2) Guidelines for Treatment to Competitors 3) Guidelines for Treatment to Government Agencies 4) Guidelines for Treatment to Employees 5) Guidelines for Treatment to Society 6) Guidelines for Treatment to Counterparties 7) Guidelines for Treatment to Creditors


3. Disclosure of Information and Transparency The Board of Directors has made available disclosure of the Company’s both financial and non-financial information accurately, completely, timely, and transparently in accordance with regulations determined by the Securities and Exchange Commission and the Stock Exchange of Thailand via the IT system and the Company has presented significant information in its Annual Report comprising:- - Organization structure and business structure - Vision and mission - Risk factors - Business performance - Report by the Board of Directors on its accountability to financial statements which certified the compliance to generally accepted accounting principles, suitable for our businesses, applying appropriate accounting policies consistently, and signed by Chairman of the Board. - Report of the Audit Committee on its duties and responsibilities regarding assurance that financial statements are compliant to relevant laws, internal control system, appointment of auditors, and other matters as prescribed by the Stock Exchange of Thailand. - Report by the Nominating and Remuneration Committee. The annual report is posted on the Company’s website in both Thai and English versions. The office of Company Secretary also acts as the Investor Relations Office and is responsible for providing news and information to the shareholders or investors who are interested in the Company’s businesses. 4. Responsibilities of the Board The Board comprises well experienced directors who are knowledgeable, efficient, and fit to business. Presently, there are 9 directors, i.e. 5 directors who are representatives of the shareholders

are the Company’s executives. They are knowledgeable, proficient, and experienced in the Company’s businesses. The Company has 4 independent directors who possess diverse skills and experiences, and strong leadership so they can apply their judgment freely. The Board of Directors has appointed 3 independent directors to be the Audit Committee responsible for supporting the Board of Directors in carrying out its prescribed duties and responsibility. Definition of Independent Director An independent director means persons who have the qualifications as stipulated by the Securities and Exchange Commission according to the notification of the Capital Market Supervisory Board No. TorJor. 28/2551 Re : The Request for Approval and the Approval of Initial Public Offering, as follows :- (A) The persons who hold the voting shares of no more than 1% of the total number of shares in the Company, parent company, subsidiaries, associated companies, or juristic persons that may have conflicts with the company, and the shares held by the related parties of such independent director will also be counted. (B) The persons shall not be or did not use to be the directors who participate in the management of the Company, the workers, employees, full-time consultants, or the authorized persons of the Company, parent company, subsidiaries, associated companies, or juristic persons that may have conflicts with the Company, except that they do not have such qualifications for at least 2 years before the date of submitting the request to the office. (C) The persons shall not have blood relationship with or shall not legally register to be the parents, spouse, siblings, and children, including spouse of children or the management, or major shareholders, or authorized persons or persons who are proposed to be the management or authorized persons of the Company/subsidiaries. Annual Report 2008 - As of December 31, 2008

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(D) The persons shall not have or did not use to have business relationship with the Company, parent company, subsidiaries, associated companies, or juristic persons that may have conflicts with the Company and such relationship may impede their own freedom of judgment, and shall not be or did not use to be the major shareholders, directors who are not independent directors, or management of the persons who have the business relationship with the Company, parent company, subsidiaries, associated companies, or juristic persons that may have conflicts with the Company, except that they do not have such qualifications for at least 2 years before the date of submitting the request to the office. The business relationship according to the definition stipulated by the Securities and Exchange Commission means the normal business transactions for conducting the businesses, renting or leasing the immovable properties, the transactions relevant to the assets or services or the grant or acceptance of financial assistance by accepting or lending, guaranteeing, offering assets to be the debt guarantee, including the similar behaviors, and such actions may affect the persons who request for approval or parties to possess debts that shall be paid to the other party of lower of at least 3% of the net tangible assets of the persons who request for approval or at least 20 million baht. The calculation of such debts shall comply with the calculation methods of the value of related transactions according to the notification of the Board of Governors of the Stock Exchange of Thailand regarding the disclosure of information and the operations of the listed companies on the related transactions but upon considering such debts, shall include the debts incurred within 1 year before the date of business relationship with the same person. (E) The persons shall not be or did not use to be the external auditors of the Company, parent

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Annual Report 2008 - As of December 31, 2008

company, subsidiaries, associated companies, or juristic persons that may have conflicts with the Company, and shall not be the major shareholders, directors who are not independent directors, management, or managing partners of the audit office that are auditors of the Company, parent company, subsidiaries, associated companies, or juristic persons that have conflicts with the Company, except that they do not have such qualifications for at least 2 years before the date of submitting the request to the office. F) The persons shall not be or did not use to be any professional service providers, including the legal services or financial advisory services that obtain the service fee more than 2,000,000 baht per year from the Company, parent company, subsidiaries, associated companies, or juristic persons that may have conflicts with the Company. In case that such professional service providers are juristic persons, including being major shareholders, directors who are not independent directors, management or managing partners of such professional service providers, except that they do not have such qualifications for at least 2 years before the date of submitting the request to the office. (G) The persons are not the directors who are appointed to be the representatives of the Company’s directors, major shareholders, or shareholders who are related to major shareholders of the Company. (H) The persons do not have any other characteristics that prohibit such people from freely expressing opinions regarding the Company’s operations. After being appointed to be independent directors who have the characteristics according to paragraph (A) to (H), such independent directors may be assigned by the Board of Directors to make decisions regarding the operations of the Company, parent company, subsidiaries, associated companies, or other subsidiary of the same level, or juristic persons that may have conflicts with the Company with the collective decision.


Nominating of Directors Board of Director appointed a Nominating and Remuneration Committee to perform the duty of nominating individuals who possess qualifications and experiences as required by the Company. The nominated persons should be able to devote time and efforts to carry out their duties efficiently for the benefits of the Company. In appointing a director, the Board of Directors shall approve or propose to a meeting of shareholders for approval as the case may be, subject to criteria and method described in Article 13 and 14 of Articles of Association of the Company as follows:- “Article 13 The shareholders’ meeting shall elect the directors in accordance with the conditions and procedures as follows:- (1) One shareholder has one voting right for one share held; (2) Each shareholder will cast all his votes in (1) to elect one candidate or more as Director, but he can not split his votes, more or less, to elect any candidate; (3) The candidates shall be ranked in order descending from the highest number of votes to the lowest, and shall be appointed as directors in that order until all of the director positions are filled. Where the votes cast for candidates in descending order are tied, which would otherwise cause the number of directors to be exceeded, the chairman shall have a casting vote. Article 14 At every annual general meeting, one-third of the directors shall retire. If the number of directors cannot be divided into three, the number of directors closet to one-third shall retire. In the first and second years after the registration of the Company, the directors shall retire by drawing lots. In subsequent years, the director who has held office for the longest shall retire.”

The Company did not describe maximum numbers of times of being nominated as director nor qualification on limit of age for directorship. In this regard, Article 14 of the Company’s Articles of Association will be observed. Doubling of Positions The two positions, Chairman and President, are held by the same person who represents a group of major shareholders. The Company deems the doubling of positions appropriate under this circumstance due to the fact that this person has gained much experiences in this business for a very long time, and he is widely recognized among business community. However, with the ratio of the independent directors of more than one-third of the number of directors, the Board of Directors is able to balance its motion, and opinions could be expressed freely when reviewing performance of the Management. Remuneration for Directors and Executives The Company had appointed a Nominating and Remuneration Committee to formulate a policy on remuneration for directors transparently and properly compared to those of other businesses in the same industry. The Nominating and Remuneration Committee has a policy to determine the remuneration for directors and executives by considering the information obtained from the survey of Thai Institute of Directors regarding the directors’ remuneration of listed companies as criteria for determining the remuneration of the company’s directors. The executive directors shall obtain the remuneration that relates to their respective performance. Regarding the independent directors and members of the Audit Committee, the Company has proposed proper amount of remuneration according to their workload, duties, and responsibilities. The Company has proposed directors’ remuneration to the meeting of shareholders for approval as

Annual Report 2008 - As of December 31, 2008

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required under Public Limited Company Act. The Company disclosed details of remuneration for directors and executives in its Annual Report and Annual Filing of Information Form (Form 56-1) every year. Board Meetings Schedule of Board Meetings has been set up in advance for 5 times of ordinary meetings per annum. Extraordinary meeting of the Board may be called for. Agendas of the ordinary meetings usually comprise acknowledgement of audit result of reviewed or audited financial reports and suggestions made by the Audit Committee, considering and monitoring business operation results in accordance with business plan and policy, approving significant business matters such as vision, mission, strategy, financial target and budget etc., consideration on agenda proposed by Management, and acknowledgement of performance of subcommittees set up by the Board for specific assignments, i.e. the Audit Committee, the Nominating and Remuneration Committee and the Risk Management Sub-committee. The Chairman allocates sufficient time for the Company’s directors to freely and fairly express their opinions on important issues based on the interests of the shareholders and relevant parties. Upon considering the agenda of conflicts of interests, the relevant directors are required not to be in the meeting room for considering such agenda. The Company Secretary prepares the invitation letter, the meeting agenda, and the necessary documents for the Company’s directors at least 7 days in advance of the meeting date so that the directors could have sufficient time to study the information before attending the meeting. The Company Secretary also takes and prepares minutes of meeting with complete and sufficient information, and keeps such minutes and the relevant information in file after being adopted by the Board of Directors so that it could be accessed by the Board of Directors and relevant parties.

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Annual Report 2008 - As of December 31, 2008

Performance Evaluation of the Board The Board of Directors requires that all members of the Board of Directors shall evaluate themselves collectively by using the form provided by the Stock Exchange of Thailand. Such evaluation shall cover the following:- 1) Satisfaction of the Board on its own performance/Company’s performance and problem-solving of management. 2) Understanding of the Board on its roles/ businesses and strategies of the Company. 3) Good relationship between the Board and management. 4) Description of roles and duties of the President, and appropriate evaluation of his performance. 5) Efficiency in business operation of subsidiaries. 6) Efficient performance of all committees. 7) Devotion of time to carry out works of directors. 8) Preparation of directors before attending Board Meeting. 9) Expressing opinion independently by Board Members. 10) Expressing opinion without bias by Board Members. 11) Chairing Board Meetings by the Chairman. 12) Confidence of investors in the Board. 13) Compliance to good corporate governance. In the Board of Directors’ meeting No. 8/2551 on 24 December 2008, the Board of Directors evaluated their own performance for the year 2008 together, and the outcome was satisfactory. Committees and Sub-committee The Board had appointed 3 committees and sub-committee who were assigned to study in details and review various assignments, i.e. the Audit Committee, the Nominating and Remuneration Committee, and Risk Management Sub-committee. The Board has outlined policies and frame-work of


the 3 Committees and Sub-committee clearly regarding their duties and responsibilities, meeting procedure, and reporting to the Board as follows:-. 1) Audit Committee The Board of Directors has appointed the Audit Committee consisting of 3 independent directors who posses qualifications as stipulated by the Notification of the Capital Market Supervisory Board and the Stock Exchange of Thailand. The Audit Committee consists of Professor Viroj Lowhaphandu who has expertise in accounting, auditing, finance, and taxation, and Mr. Enghug Nontikarn and Mr. Suchat Boonbanjerdsri who have expertise in finance and banking, investment, and accounting. 2) Nominating and Remuneration Committee The Board of Directors has appointed the Nominating and Remuneration Committee consisting of at least 3 members of the Board of Directors and one of them shall be an independent director who acts as the Chairman of the Nominating and Remuneration Committee. They are:- 1) Mr. Enghug Nontikarn Chairman of the Nominating and Remuneration Committee 2) Mr. Sanan Angubolkul Member 3) Mr. Prin Bholnivas Member and Secretary Authority and Responsibility of the Nominating and Remuneration Committee: 1. Consider organization chart, qualification and composition of directors and executives of the Company; 2. Select capable persons and propose their names to the meeting of shareholders for nomination as directors, or to the Board for nomination as executives if there is a vacant position, as the case may be; 3. Consider and propose structure of remuneration for directors and executives, such as salary, severance pay, bonus, welfare, meeting allowance, and other financial or non-financial remuneration; 4. Evaluate performance of the Nominating and

Remuneration Committee, and report to the Board; 5. Other assignments relevant to nominating personnel and remunerating as deemed fit by the Board. 3) Risk Management Sub-committee The Board of Directors has appointed the Risk Management Sub-committee consisting of highlevel executives and relevant executives as follows:- 1. Mr. Prin Bholnivas Chairman of the Risk

Management Sub-Committee 2. Mr. Manit Ativanichayaphong Member 3. Mr. Pawat Chalermpong Member 4. Ms. Nitaya Prasertnukulphol Member 5. Mr. Jarung Srisakul Member 6. Mr. Pramual Pinyo Member 7. Mr. Tanatch Sripan Member and Secretary Authorities and Responsibilities of the Risk Management Sub-committee: 1. Study, review and evaluate any possible risk, including trend of probable impact on the organization, for both internal and external risks covering at least 4 areas as described below:- - Financial risk - Operational risk - Business risk - External factors risk 2. Formulate policies on risk management, and propose it to the Board for the Board’s overview; 3. Formulate strategies, organizational structure, and resources used in the management of risks, in compliance to risk management policies and business directions of the Company; 4. Set up risk-taking criteria of operation in term of financial limit and nature of transactions; 5. Monitor and review policies, strategies and implementation to assure that risk management strategies are implemented appropriately; 6. Be authorized to appoint working group to evaluate and keep track of risk throughout the organization; Annual Report 2008 - As of December 31, 2008

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7. Other matters as assigned by the Board. In the year 2008, the Sub-committee had proceeded in the following:- 1. Drew up a risk management plan together with the Information Technology Department. 2. Monitored and coordinated with the Personnel and Administration Department and the Office of Human Resource Development in drawing up a risk management plan. 3. Reviewed work procedures so as to assure efficient control and implementation. 4. Considered the performance of the sub-committee in the year 2008. 5. Reviewed any obstacles and problems in carrying out assignments as per work procedure the subcommittee has notified to the organization. Company Secretary The Company has appointed the Chief Financial Officer to be the Company Secretary with duties and responsibilities as prescribed in the Securities and Exchange Act (No.4) B.E.2551. Transactions that may cause conflict of interest Regarding the transactions between the Company or its subsidiaries and the related persons such as executives, major shareholders, or authorized officers, etc. which may lead to the conflict of interests, the Board of Directors follows the criteria, procedures, and the disclosure of the related party transactions identified by the Capital Market Supervisory Committee in order to maximize the benefits to the Company and shareholders, and to generate the transparency for such transactions. 3.2.11 Internal Control The Company has a policy to set up an efficient and effective internal control system. It is the duties and responsibilities of the Board and the Management to set up and maintain an internal control system, including review of its efficiency from time to time, to safeguard investments of

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Annual Report 2008 - As of December 31, 2008

shareholders and assets of the Company. Scope of an internal control system covers financial control, business operations, monitoring to assure compliance to laws and relevant regulations, and risk management. An efficient internal control system will reasonably boost up confidence that the Company will achieve its objectives and targets as following:- - Information system and financial reports are accurate and respectable. - Compliance to regulations, policies and work procedures of the Company and relevant laws. - Assets of the Company exist and are kept in good order. - Business operations are efficient, and resources are used efficiently. - Objectives of the Company are achieved effectively. A good internal control system will be a tool to intercept irregularity, and it serves as an alarm signal. It helps to reduce risk to an acceptable level. The internal control system set up by the Company is in line with that of the Committee of Sponsoring Organization of the Treadway Commission (COSO), which could be summarized according to areas of control as following:- 1. Organization & Control Environment. The Company has a business plan that outlines the targets, strategies, vision and budget with clear performance indice. Organizational structure was adjusted to stay in line with the business plan. There was improvement on the monitoring methods of business. Qualified personnels are recruited and developed continually. There are policies and work procedures on financial transactions, purchasing, risk management, personnel management, and other. 2. Risk Management. The Company had introduced risk management in corporate level since the year 2004. The Risk Management SubCommittee and the Audit Committee played the role of monitoring.


3. Operational Control. The Company introduced segregation of duties for purpose of internal controlling, written authorization on approval of transactions variable to financial limits, procedure of works for connected transactions and intra-company transactions so as to observe the laws. 4. Information & Communication. The Company has made available information system to support decision-making. A department was set up to collect, analyze and store data in the datawarehouse system. Information system within the organization is of two-way nature. Sufficient information and documents have been furnished to the Board before its decision-making. Directors could ask for additional information from the Company freely. 5. Monitoring. The Company introduced monitoring system for its executives and directors so that business plan could be achieved. Internal Audit Department monitored and evaluated internal control system freely, and it could report the results and suggestions to the Management for further action. In the Board of Directors’ meeting No. 8 / 2551 on 24 December 2008, the Board of Directors evaluated the Company’s internal control system by using the evaluation form provided by the Stock Exchange of Thailand in 5 aspects as mentioned above and the outcome indicated that the Company had sufficient internal control system. In addition, based on the audit results for the year 2008, the external auditor Pricewaterhouse Coopers ABAS Limited issued a report of its observation on internal control system, and proposed it to the Audit Committee and the Board of Directors. The Company has assigned concerned departments to make improvements based on the report. Internal Audit The Company has an Internal Audit Department. It reported directly to the Audit

Committee and the President. It played the roles of giving counsel, auditing, evaluating internal control system, monitoring risk management system, and corporate governing, so as to assure that risk management system, internal control system, and corporate governing were sufficient, efficient, and serving its desired objectives. Internal Audit Department was independent. It was allocated with sufficient resource and budget appropriate for carrying out its tasks on operational audits, compliance to legal requirements, rules and regulations. The annual auditing plan was prepared by considering the relevant risk factors and was approved by the Audit Committee. The audit result and performance report were provided to the Audit Committee and the President as well as the quarterly summary of audit results to meeting of the Board of Directors. 3.2.12 DIVIDEND POLICY (1) DIVIDEND POLICY OF THE

COMPANY The Company has a policy to pay out dividend from profit at the rate not less than 50% of net profit each year as shown in the Company’s financial statements, and on a condition that the Company has no retained loss. (2) DIVIDEND POLICY OF

SUBSIDIARIES Due to the fact that each subsidiary has its own management team who is free on formulating dividend policy, the Company could not set up dividend policy for any subsidiary. However, subsidiaries will usually pay out dividend at reasonable ratio subject to their financial standing at that time, if they have profit and there is no other concerns. There is no pre-determined dividend pay-out ratio.

Annual Report 2008 - As of December 31, 2008

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4. RISK FACTORS 4.1 MARKETING RISK Competition in export markets for melamine tableware is very fierce, especially China competitors. Despite products from China are of low quality and shipment being not reliable, the Company has been facing higher competition and losing market share. This is due to the fact that Chinese competitors have lower production cost, especially labour cost, so they could sell products at cheaper prices. Besides, quality of Chinese products has been improving and Chinese government has been subsidizing exports in many ways. The Company has set up the following risk counter-measures:- A. Find out cheaper sources of raw materials with acceptable quality. B. Improve production efficiency to reduce cost per unit. C. Expand customer bases continuously to countries in Eastern Europe, Africa and South America. In 2008 the Company exported to nearly 100 countries worldwide served as the Company’s customers. D. Increase product variety and sell products as per customers require (made-to-order). E. Develop new product designs to serve many applications and launch new design of contemporary trend. F. Expand production base in Vietnam in where labor forces are plenty and production cost is low, and India as well. G. Emphasize on markets that have high purchasing power and love quality products like Middle East and Europe. H. Involve in marketing and sales promotion activities on a continual basis. I. Make public relations to promote the Company’s products and make consumers aware of the danger by using low quality melamine products made of toxic ingredient. In domestic market, some competitors in this same business import cheaper products to sell here. The Company has managed that risk by diversifying its sales distribution channels via agencies and direct approach to customers. In addition, the Company

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Annual Report 2008 - As of December 31, 2008

has also joined with a governmental unit to set up quality control standard for imported goods so as to make sure that imported products are of comparable quality with local products to protect consumers too. 4.2 RISK OF RAW MATERIAL PRICE Plastic resin and melamine powder, two key raw materials, are by-products from oil refinery process. If price of world crude oil rises, price of raw material rises. Though the Company buys most raw material from domestic source, the selling prices are referred to world market price quoted globally in US Dollar currency. So the fluctuation in foreign exchange rate between Thai Baht and US Dollar has some impact to raw material prices. Moreover, demand and supply side of production and consumption of those raw materials is another key factor determining raw material prices. If world prices rise, the Company has to hike selling prices accordingly. Since plastic resin and melamine powder are major part of cost of production, the Company has planned to manage that risk as follows:- A. Check prices with many suppliers for best conditions before making any decision. B. Monitor prices of raw materials both from domestic and offshore suppliers and crude oil price trend as well. C. If raw material prices tend to rise in the future, the Company will buy it now to support production for a certain period of time. If raw material prices are volatile, the Company will make purchasing orders more frequently. D. In case that price of raw materials in offshore market is below that of domestic one, the Company imports raw material. E. Negotiate occasionally on trade conditions with suppliers to get appropriate prices. F. Taking OEM orders for industrial parts exposes the Company to minimal risk on volatility of raw material prices because hirers take that risk. There are agreements between the two parties to adjust prices when prices of raw materials change.


4.3 PRODUCTION RISK The Company buys almost all melamine powder from Thai MFC Co., Ltd and Thai KK Co., Ltd, hence there is a production risk of reliability on just a few suppliers. The Company has planned to manage that risk as follows:- A. The Company invests in 45% in Thai MFC, a major melamine powder supplier of the Company, to make sure that there is a source of melamine powder with acceptable quality for production. B. The Company can buy melamine powder from other sources like: From domestic : Panasonic Electric Works (Ayudhya) Co., Ltd. From offshore : China, Italy, Japan, Taiwan. For plastic resin, the Company can buy it from both domestic and international sources. 4.4 FINANCIAL RISK 4.4.1 RISK OF BREACHING FINANCIAL COVENANTS The Company has to comply with financial covenants, as required by the Loan Agreements signed between the Company and the Siam City Bank Pcl. and the Bangkok Bank Pcl. The Agreement is still effective until outstanding loans being fully settled. In case of breaching of any financial covenant, an event of default may be declared. Risk Counter-Measures: The Company has prepared a financial projection for internal use. It can be used as a tool by Management to predict financial ratios of the future. Real figures in subsequent interim periods are closely monitored to lessen the chance of breaching any financial covenant. 4.4.2 RISK OF FOREIGN EXCHANGE RATES Exports of products and imports of raw materials, finished goods and machines expose the Company to risk of foreign exchange fluctuation. In such case, the Company cannot forecast income and cost accurately.

Risk Counter-Measures: The Company has been signing forward contracts with banks to prevent risk of foreign exchange in observation of situation of foreign exchange market at that time. Entering into forward contracts enables the Company to know precisely our income and cost, and facilitates our mapping of appropriate business strategies. 4.4.3 INTEREST RATE RISK The Company’s long-term loans consist of the long-term loans under energy conservation project, and the long-term loan the Company additionally received during the year 2008 for investment plan. A part of such two types of long-term loans carries fixed interest charge throughout the 7-year period since it is the low-cost loan supported by the government for energy conservation, and the other part of long-term loan bears interest rates at MLR – 1.5% up to MLR per year throughout the 7-year period. In additions, the Company’s working capital credit facilities bear interest rate at MOR per year; hence, the Company exposes to risk of fluctuation of floating interesting rate based on MLR and MOR in the financial market. Risk Counter-Measures: As the Company having obtained additional long-term loan during the year 2008 for purpose of investment the proportion of long-term loans with floating interest rate based on MLR was higher as compared to those with fixed interest rate. Hence, the Company has faced the risk from higher interest rate compared with that of last year. However, the Company implemented risk counter-measures for managing interest rate risk by setting investment plans in advance so that the Company could have sufficient time seeking for proper sources of credit lines with reasonable interest rate, and by prepaying principal amount as deemed appropriate in case of excess liquidity. For working capital credit facilities, the Company’s overdraft line was based on floating interest rate (MOR). The Company has applied a risk counter-measure by preparing the projected cash flow in advance so that the Company was able to Annual Report 2008 - As of December 31, 2008

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estimate the needs for cash in each period, and was able to plan and raise a short-term loan at a fixed interest rate to support liquidity from other types of credit lines. Furthermore, the Company also raised additional source of working capital by obtaining credit lines with 3 domestic commercial banks during the year 2008. 4.4.4 CREDIT RISK Due to most of the Company’s sales to customers – both domestic and export customers being on credit, selling to existing customers and new customers along with expansion of customer base under different credit terms granting to the customers have exposed the Company to credit risk that customers might not pay their dues. Risk Counter-Measures: The Company has set guidelines for customer credit rating. By trying to find out more information about customers and analyzing credit worthiness before granting credit to them, credit risk of the Company deems appropriate. Besides, the Company has a large number of customers who are manufacturers and distributors. Those customers are active in diverse markets. Therefore, credit risk on concentration of customers is low. Taking into consideration the above reasons and our past experience on collection of accounts receivable, management believes that no additional credit provision beyond the amounts provided as allowance for doubtful accounts is necessary. Furthermore, payment terms for most export customers are opening of letters of credit or partial or full payment before shipment in case of new customers or those whose financial standing is still in doubt. 4.4.5 LIQUIDITY RISK The Company needs to maintain sufficient cash and financial liquidity to support working capital requirement for running the business as well as to support additional investments and business expansion in the future. Failure on having sufficient financial liquidity causes the risk of losing business opportunity to compete in the market and leads to interruption in running the business.

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Annual Report 2008 - As of December 31, 2008

Risk Counter-Measures: The Company has been currently provided with sources of working capital from local commercial banks amounted THB 600 million, comprising bank overdraft, promissory notes, L/C, T/R, L/G and additional working capital credit lines granted by another 3 commercial banks in the year 2008 amounting to THB 375 million for a total amount of THB 975 million. Size of those credit facilities was deemed appropriate and sufficient for running business. Besides, the Company keeps on trying to find additional sources of working capital in order to make sure that it will have sufficient credit facilities with reasonable terms and cost. The Company has projected its cash flows and monitors it closely so as to assure that the Company will not face liquidity problem. 4.4.6 Capital Risk In normal business operation, the Company has to maintain sufficient capital for its operation and investment so that its business could be operational smoothly and growth could be expected subject to environment and external supporting factors. Sources of fund may come from debt financing and equity financing. In case the mixture of fund from different sources is not suitable, there might be capital risk of inappropriate financial structure resulting in instability of business operation and a damage financially. Risk Counter-Measures: The Company realizes significance of capital risk management. Therefore, the Company has formulated a policy on capital management for the objective of safeguarding the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. In maintaining or restructuring capital, the Company might adjust its dividend policy, pay back value of shares to shareholders, issue new shares, repurchase treasury shares, or disposing of assets so as to reduce debt as deemed appropriate on a case by case basis.


4.5 RISK OF INABILITY TO DECLARE

DIVIDEND The Company has adopted a dividend-payment policy that dividend will be paid out from profit at the rate not less than 50% of net profit each year as shown in the Company’s financial statements, and on a condition that the Company has no retained loss. Therefore, declaration of dividend is subject to operation results and financial circumstance in each year. Risk Counter-Measures: The Company has prepared a business plan and financial projections. By so doing, the Company can predict the operation results and financial

circumstance in the future, and ways of doing business can be adjusted according to the economic condition, industrial situation, and other outside factors. This is an effort to reduce risk of inability to declare dividend. The Company has appropriated its net profit of the year 2007 as legal reserve for the amount of THB 9,000,000, and paid out dividend to shareholders at the rate of THB 0.50 per share, totalling THB 135,495,240, which is 76.89% of net profit as shown in the Company financial statements on 27 May 2008. Regarding operation result of the year 2008, dividend could be declared only after getting approval from the shareholders’ meeting.

Annual Report 2008 - As of December 31, 2008

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5. RELATED PARTY TRANSACTIONS 5.1 CONNECTED PERSON AND RELATED PARTY TRANSACTIONS The Company has some related companies Supervisory Board. Types of businesses and according to the criteria set by the Capital Market relationship with the Company are as follows :- Name Nature of business Relationship with the Company Srithai Moulds Co., Ltd.

Mould Making

1. A subsidiary whose 71.0% of shares held by the Company. 2. 29.0% of shares held by executives of the Company and relatives of some executives.

Srithai Nanoplast Co., Ltd.

Manufacture of plastic products

1. A subsidiary whose 70.0% of shares held by the Company. 2. 15.0% of shares held by an executive of the Company and relatives of some executives. 3. A relative of some executives of the Company serves as a director in Srithai Nanoplast Co., Ltd.

Srithai Shin-Osaka Co., Ltd.

Mould laminating

Srithai Packaging Co., Ltd.

Manufacture of Packaging

1. A subsidiary whose 40.0% of shares held by the Company. 2. 15.0% of shares held by executives of the Company and relatives of some executives. 1. An associate whose 39.2% of shares held by the Company. 2. A relative of some executives of the Company serves as a director in Srithai Packaging Co., Ltd.

Srithai Marketing Co., Ltd.

Distributor of

house-ware products

1. A related company. 2. 72.0% of shares held by relatives of some executives of the Company. Some of them serve as directors of Srithai Marketing Co., Ltd. Siam Melamine Marketing Distributor of plastic 1. A related company. Co., Ltd. products and melamine 2. 65.0% of shares held by relatives of some products executives of the Company. Srithai Stainless Co., Ltd. Distributor of 1. A related company. kitchenware and furniture 2. 60.0% of shares held by relatives of some executives of the Company. They also serve as directors of Srithai Stainless Co., Ltd. Firstpoint Translogistics Co., Ltd. Domestic cargo 1. A related company. transportation 2. 100.0% of shares held by an executive of the Company and his relatives. 3. An executive of the Company serves as a director in Firstpoint Translogistics Co., Ltd. S.Sahatara (Thailand) Co., Ltd. Printing Stickers 1. A related company. 2. 100.0% of shares held by an executive of the Company and relatives of some executives. Some of them serve as directors of S.Sahatara (Thailand) Co., Ltd.

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Annual Report 2008 - As of December 31, 2008


Name Toho Foam (Thailand) Co., Ltd.

Nature of business

Relationship with the Company

Manufacturing and Selling EPE Foam

1. A related company. 2. 73.2% of shares held by an executive of the Company and relatives of some executives. Some of them serve as directors of Toho Foam (Thailand) Co., Ltd.

Remark : Executive and relative of executive mean person or persons as defined in the relevant criteria on

connected transaction as laid down by the Capital Market Supervisory Board.

Although the Company and its subsidiaries have such related party transactions with related companies but they are the related transactions incurred for normal business operations and / or for supporting the normal business operations of the Company and its subsidiaries. Most of them transacted at prices and conditions similar to those transactions between each related company and outsiders as the criteria for related transactions in order to maximize the benefits of each company. If there are some differences of term & condition from those transactions with outsiders, the price and conditions of such transactions shall be different for no more than the scope laid down by the Board of Directors. The Company has disclosed details of related party transactions for the year 2008 in the note to financial statements for the year ended on 31 December 2008. 5.2 THE NEEDS FOR RELATED PARTY TRANSACTIONS The Group concerns the importance of vertical integration of businesses, so as to minimize any dependence on outsider, and increase competitive edge of the Group. As a result, related party transactions occur from time to time due to the necessity of purchasing and selling goods and services among related parties. 5.3 PROCEDURE OF APPROVAL ON INTER-COMPANY TRANSACTIONS Each company in the Group has its own Management team who tries to maximize benefit of their company. Regarding inter-company transactions, terms and conditions of trade and services were based on normal transactions of outsiders. Terms and conditions of inter-company

transactions were compared with those from external sources of information for reason of reasonableness of terms and prices of inter-company transactions. Of course, exceptional cases were considered during sales promotion campaign or at time of transacting with long-term trade partner on a case by case basis. However, the Board has been very careful to assure that interest of shareholders and all stakeholders was safeguarded for transactions which might have any conflict of interest. In order for the Company to accurately follow the criteria regarding the related transactions, the Board of Directors had passed a resolution during the Board of Directors’ meeting No. 6/2551 on 9 November 2008 approving in principle pricing of products/services and terms of debt collection/ settlement between the Company/subsidiaries and related persons according to the definition as stipulated by the Securities and Exchange Act (No.4) B.E.2551 and the Notification of the Capital Market Supervisory Board No. TorJor. 21/2551 dated 31 August 2008, and granted the power to the management to approve the related party transactions within the scope stipulated by the Board of Directors. 5.4 POLICY AND FUTURE TREND OF RELATED PARTY TRANSACTIONS The Group has the policy to allow each company in the Group to trade freely with any party. Price and term of trade will be major factors influencing the decision of each company’s Management. The number of related party transactions is not expected to fluctuate much in each year.

Annual Report 2008 - As of December 31, 2008

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6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF BUSINESS PERFORMANCE

6.1 SIGNIFICANT FINANCIAL RATIOS OF CONSOLIDATED FINANCIAL STATEMENTS Ratio Unit 2008 2007 2006 Liquidity Ratio Current Ratio Times 1.49 1.84 1.55 Quick Ratio Times 0.92 1.20 0.95 Operating Cash Flows Ratio Times 0.26 0.42 0.49 Account Receivable Turnover Times 5.40 5.28 5.76 Average Collection Period Days 66.72 68.19 62.51 Inventory Turnover* Times 12.06 12.01 11.94 Inventory Turnover Days Days 29.85 29.97 30.16 Account Payable Turnover Times 6.31 5.56 5.93 Average Payment Period Days 57.02 64.75 60.75 Cash Cycle** Days 39.55 33.41 31.93 Profitability Ratio Gross Profit to Sales % 20.74 19.83 21.03 Operating Margin to Sales % 3.85 4.17 5.94 Non-operating Margin to Total Revenues % 0.94 0.85 0.96 Operating Cash Flows Margin % 157.69 227.19 187.46 Net Profit Ratio to Total Revenues % 1.68 3.11 7.39 Return on Equity % 1.94 3.48 8.28 Efficiency Ratio Return on Total Assets % 1.37 2.57 6.18 Return on Net Fixed Assets % 10.97 13.18 20.69 Total Assets Turnover Times 0.81 0.83 0.84 Financial Policy Ratio Debt to Equity Ratio Times 0.47 0.36 0.35 Interest Coverage Ratio Times 12.16 28.64 30.22 Operating Cash Flows Coverage Times 0.34 0.66 0.73 Dividend Payout Ratio % 157.13 78.17 58.24 * Only finished goods inventory, excluding work in process, goods in transit and raw materials (before allowance for net realisable value and allowance for obsolescence) ** Average Collection Period + Inventory Turnover Days - Average Payment Period

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Annual Report 2008 - As of December 31, 2008


6.2 Management’s Discussion and Analysis Financial Ratios Analysis on Consolidated Financial Statements Liquidity The overall liquidity ratios of the Group declined from that of last year. The Current Ratio dropped from 1.84 times in the year 2007 to 1.49 times in the year 2008 due to weaker operating results of the Group and increasing in current liabilities from accounts payable relating to capital expenditure activities, working capital borrowings and draw-down of long-term loans during the year 2008. Moreover, such an increase in current liabilities caused the Group’s Quick Ratio to decline from 1.20 times in the year 2007 to 0.92 times in the year 2008. Cash Cycle was lengthened from 33.41 days in the year 2007 to 39.55 days in the year 2008 because Average Payment Period was shortened from 64.75 days in the year 2007 to 57.02 days in the year 2008 as a result of trade negotiation in order to get reasonable raw materials and goods prices. Meanwhile, Average Collection Period was shortened from 68.19 days in the year 2007 to 66.72 days in the year 2008 and Average Inventory Turnover Ratio decreased slightly from 29.97 days in the year 2007 to 29.85 days in the year 2008, reflecting in improved efficiency in both debt collection and inventory management of the Group. The Group’s financial liquidity was still good despite a decline from that of last year due to more investment in capital expenditure to improve production efficiency and competitive edge, and business expansion of the Group. Profitability Though Gross Profit to Sales Ratio improved from 19.83% in the year 2007 to 20.74% in the year 2008 due to selling price adjustment and increase in proportion of higher-margin products along with effective cost control, a rising in oil price and other raw material prices during first half of the year 2008 caused the Group to suffer from rising transportation cost, while the fluctuation in foreign exchange rate negatively affected its export

revenues and offshore payment on goods, machinery & equipment purchase. Therefore, earnings before interest and tax were lower than that of last year. Moreover, use of long-term loans for investment and use of working capital credit facilities to support liquidity and business expansion caused the Group to bear higher financial expenses than that of last year. The overall profitability ratio, therefore, weakened in the year 2008 as compared to that of the year 2007 in line with the world and country’s economic recession and rising operating cost. Efficiency Return on Total Assets Ratio decreased from 2.57% in the year 2007 to 1.37% in the year 2008 and Return on Net Fixed Assets Ratio declined from 13.18% in the year 2007 to 10.97% in the year 2008 as a result of decrease in net profit from THB 174.40 million in the year 2007 to THB 98.19 million in the year 2008. Moreover, an increase in net fixed assets value as a result of investment and import made especially during late 2008 which effected insignificantly on revenue and depreciation expenses. In summary, the Group had a decline in overall efficiency ratio in line with its operating results. Financial Policy An increase in both short-term and long-term borrowings and an increase in accounts payable on fixed assets investment for business expansion affected its Debt to Equity Ratio to rise from 0.36 time in the year 2007 to 0.47 time in the year 2008. Due to long term loan of THB 2,100 million being fully repaid in the year 2007 in accordance with debt restructuring plan, and no debt repayment for new borrowings was scheduled during 2008, the overall debt repayment in the year 2008 was then lower than that of 2007. However, the weaker operating results and the rising in investment in fixed assets according to investment plan had resulted in decrease of Interest Coverage Ratio and Operating Cashflows Coverage. Annual Report 2008 - As of December 31, 2008

63


Analysis of Consolidated Financial Statements 6.2.1 Overview of Business Performance A. Revenues Business structure of the Group comprises two major lines, Plastics Business and Trading Business whereas Moulds Making Business is an important support to Plastics Business. Majority of Plastics Business Line* Trading Business Line & Moulds Total * Comprising - Industrial Products - Household Products Total Plastics Business Line Revenue contribution from industrial products is higher than that from household ones because industrial products can serve clients’ demand in wider application, for example, industrial and auto parts are used for the expansion of property & auto sectors. Plastic boxes could fulfill demand in beverage industry. Pallets could serve in various industries which have their own warehouses or to support delivery system etc. Household products, on the other hand, could fulfill demand of end users, restaurants & food shops etc. Hence, variety of customers for industrial products is wider than that for household products. To stimulate growth of Trading Business Line, we need to do sourcing for new and modern products of high quality and popularity in both domestic and foreign markets to sell here at reasonable prices. Continuous sales promotion is another key factor to gain brand awareness & recognition. Moreover, the Company also has strong distribution channels with over hundred thousands of direct sales persons and agents. The Company, therefore, is confident in its Trading Business Line on both growth prospects and revenue expansion as expected.

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Annual Report 2008 - As of December 31, 2008

revenue comes from Plastics Business because Trading Business has just begun and been developing to become another significant income generating business. Plastics Business can be classified as industrial products and household products. Revenue breakdown from sales and hireof-work by business line is illustrated below. 2008 92.68% 7.32% 100.00%

2007 95.20% 4.80% 100.00%

66.06% 33.94% 100.00%

68.93% 31.07% 100.00%

Though revenue contribution from Mould Making Business is not significant as compared to total revenue of the Group, revenue growth thereof is related to that of Plastics Business because moulds are a major supporting factor for both industrial and household products. Investment out lays of customers, business negotiation with trade partners and capability to make high precision moulds are factors supporting growth of revenue of Mould Making Business. With an aim to be the leader in all industries and markets, the Company has focused on employing advanced technology and automation and formulation of strategies to differentiate and add value to its products to enhance competitiveness. Moreover, the Company is looking for new business opportunities for new products that its markets are growing and profitable, so that product ranges are wider and new markets and customer base can be expanded. This will help reduce negative impact of economic recession, shrinkage of certain markets, and degree of dependency on any particular industry. It allows revenue to grow continuously. The Company is ready to transfer knowledge and experience, and to give advices to affiliated companies so that Srithai Superware Group could firmly grow together.


B. Marketing and Trend 1) Plastic Business Line Domestic Market for Industrial Products Industrial products of the Company could satisfy demand of customers in many industries. However, it is related to growth of manufacturing sector of the country. The overall picture of economic recession and fluctuation of oil prices resulted in reduction of production capacity and suspension of purchase orders by customers in the year 2008. In addition, the Company was selective in accepting only purchase orders of reasonable gross margin. It resulted in a decrease of domestic sales of industrial products in the year 2008 as compared to that of 2007. However, business expansion to new product groups to offset shrinkage of sales in certain industries and increase in production efficiency, and endless product development to differentiate our products recession and add value on it, will lessen impact of economics recession and result in total domestic sales of industrial product in the year 2009 to approximate that in the year 2008. Export Market for Industrial Products In the first half of 2008, the Company got some negative impact from strengthening of baht currency and prices adjustment of raw materials due to the rise of oil prices. Total export sale of industrial products in the 2008 was higher than that of 2007 by 21%, thanks to the increased sale of crates and battery cases exported to Indochina countries and soaring of export sale of plastic garbage bins as compared to that of 2007. The Company believed that the negative impact from world economic recession and shrinkage of markets in certain industries in late 2008 will persist in 2009. The Company has planned to address this problem by maintaining export markets in Indochina countries, and target at market expansion in Korea, China, Singapore, Australia and Middle-East countries. Introduction of new product such as CD boxes, screw-on caps and PET performs for bottles will generate some revenue to

the Company in 2009, and will result in sales of industrial products in 2009 approximating that in 2008. Domestic Market for Household Products Domestic sales of household products in the first three quarters showed an impressive growth which was attributable to introduction of many new decorations and sales promotion. However, economic recession, political instability, closure of many business and rising rate of unemployment happened in late 2008 had resulted in sales amount lower than expected. Trend of consumption and household expenditure in the year 2009 is declining continuously from late 2008. It had a negative impact on expansion of sales. Therefore, the Company plans to launch more new products. New decorations and new shapes were designed, and sales promotion launched to stimulate demand in the market and to incentivise consumers. The Company is confident that our product quality, many channels of distribution and efficient direct sales forces could push our household products to replace tablewares made of other materials e.g. ceramics or glass which are breakable. In the year 2009, the Company expects some growth on sales of household products as compared to that of 2008. Export Market for Household Products The prevailing problems of baht strength against the US dollars and imitation of our products in certain countries will not be so serious. The expansion of markets in the Middle-East and Europe due to existence of import regulations and industrial standard that blocks import of household products that may be harzadous to public health due to usage of urea or mixture of urea and melamine powder as raw material in place of pure melamine at 100%, our marketing effort to penetrate new markets covering nearly 100 countries presently, and confidence gained from a household product retailer from Sweden in production and supply of household products for distribution to consumers in Annual Report 2008 - As of December 31, 2008

65


37 countries, all have resulted in an increase of our export sales over that of the preceding year and over the target. However, the world economic recession and fluctuation of baht currency will result in minimal increase of our export value for household products in 2009 over that of 2008. Our marketing effort on presentation of quality household products made of melamine powder, development of product shapes and decorations to suit various applications, and our export drive to penetrate new markets in Eastern Europe, Africa and South America, all build up confidence that the Company could expand export markets extensively. Our brand names are well - know all over the world. As a result, sale our household products could grow further. 2) Trading Business Line In the year 2008, the Company has imported and distributed many products under our trading business line, e.g. food preservation boxes under the brand name Lock&Lock, kitchen gadgets imported

from a foreign country, table and sun loungers, etc. Those products showed good record of sales growth. In addition, the Company has added another product line by distributing consumer products of locally made since the mid of 2008 via our direct sales channel under MLM scheme(Multi-Level Marketing) under our new brand name SNatur, e.g. health-care and beauty-care products, food supplement, other consumables. Consumers paid interest and warmly welcomed our products, especially beauty-care products made under research finding of respected professors of King Mongkut’s University of Technology Thonburi by using an extract of mangosteen called Xanthone as ingredients of our products. By our endless marketing efforts and sales promotion, and our sourcing of modern products which are popular in domestic and international markets for putting on sales at reasonable prices had resulted in a sales growth of trading business line in the year 2008 over that of 2007. It is expected to grow further.

C. Operation Results (highlight from consolidated statements)

2008 2007 Amount % Amount % 5,778 100.00 5,563 100.00 Sales and hire of work (4,580) (79.26) (4,460) (80.17) Cost of sales and hire of work 1,198 20.74 1,103 19.83 Gross profit (976) (16.89) (871) (15.66) Selling & administrative expenses (12) (0.21) 34 0.61 Other income (expenses) - net 210 3.64 266 4.78 Earnings before financial expenses & tax (46) (0.80) (27) (0.48) Financial expenses 2 0.04 14 0.25 Share of profit from associates and interest in joint venture 166 2.88 253 4.55 Earnings before tax (32) (0.55) (56) (1.01) Income tax 134 2.33 197 3.54 Net income Attributable to: 98 1.70 174 3.13 Equity holders of the Company 36 0.63 23 0.41 Minority interests

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Annual Report 2008 - As of December 31, 2008

Unit : Million Baht 2006 Amount % 5,314 100.00 (4,197) (78.97) 1,117 21.03 (802) (15.09) 15 0.29 330 6.23 (30) (0.56) 63 1.19 363 58 421 396 25

6.86 1.08 7.94 7.46 0.48


Net profit for the year 2008 for equity holders of the Company as per consolidated financial statements was THB 98.19 million, a THB 76.21 million plunge or 43.70% from a year earlier. Comparative consolidated operation results and financial position for the year 2008 and 2007 were described as following. • Consolidated statements of income for the year ended 31 December 2008 as compared with that of the same period of previous year ended 31 December 2007(details as shown in Consolidated and Company Financial Statements for the year 2008 under Statements of Income) 1. Sales and hire of work amounted THB 5,777.72 million was higher than that of the previous year by THB 214.27 million, or 3.85% due to :- 1.1 Plastics Business Line - Sales of Household Products of domestic and overseas production under Plastics Business Line amounted THB 1,817.41 million, or 31.46% of total sales, was increased by THB 171.75 million over that of previous year or 10.44% due to increase in export sales orders following the expansion of overseas markets and selling price adjustments as well as sales promotion activities. 1.2 Sales of Industrial Products of domestic and overseas production under Plastics Business Line amounted THB 3,537.23 million, or 61.22% of total sales, was decreased by THB 113.69 million over that of previous year or 3.11%. That was due to economy slowdown causing some customers of industrial products to delay the purchase, and adjustments of selling prices in line with decrease of oil prices. However, the Company has been adjusting sales structure to focus on high value products and increase orders of new products under certain categories. 1.3 Sales of Trading and Moulds Business Line amounted THB 423.08 million, or 7.32% of total sales, was increased by THB 156.20 million over that of previous year or

58.53%. That was due to an increase in purchase orders of moulds from customers of industrial products, as well as searching for new products and sales promotion activities of Trading Business Line. 2. Gross profit was THB 1,198.19 million, an increase of THB 94.92 million. Gross profit on sales ratio for the year ended 31 December 2008 was 20.74%, higher than that of the previous year being 19.83% due to selling price adjustment and increase in sales of profitable products. In addition, higher production output in line with sales led to more efficiency of cost management. 3. Selling and administrative expenses amounted THB 975.82 million was increased by THB 104.56 million over that of the previous year. Selling and administrative expenses on sales ratio was 16.89% for the year ended 31 December 2008, higher than that of the previous year being at 15.66%. The increase was due to annual salary and wages adjustment, domestic and export transportation expenses as a consequence of soaring of sales revenue and increase in transportation costs, as well as increase in advertising and sales promotion expenses in order to push sales. 4. Other expenses amounted THB 65.30 million was increased by THB 53.19 million over that of the previous year due to loss from exchange rate. 5. Share of profit from associates and interest in joint venture amounted THB 2.01 million was decreased by THB 12.22 million when compared with that of the previous year. That was due to an associate engaged in industrial products business and another associate engaged in household products business faced with significant decrease in sales resulting from losing important customers. In addition, an associate engaged in household products business under Plastics Business Line recognized lower gross profit ratios because of an increase in raw material price. 6. Finance costs amounted THB 46.10 million was increased by THB 19.27 million over that of the previous year or 71.84% as a result of more Annual Report 2008 - As of December 31, 2008

67


long-term loan for fixed assets acquisition according to business expansion, and for working capital. 7. Income tax Expenses amounted THB 31.70 million was decreased by THB 24.65 million when compared to the previous year amounted THB 56.35 million due to a decrease in net profit. Moreover, in the year 2008, the Company’s corporate income tax rate was reduced from 30% to 25% according to the Royal Decree No. 475 B.E. 2551 which was announced in the Royal Gazette dated 6 August 2008, resulting in tax expense decrease. The Group recognized deferred tax assets less than previous year by THB 13.58 million. 8. Basic earnings per share is THB 0.36, a decrease of 43.75% as compared to THB 0.64 per share of previous year. That was due to a decrease in net profit. • Consolidated Balance Sheets as of 31 December 2008 comparing to that as of 31 December 2007. (detail as shown in Consolidated and Company Financial Statements for the year 2008 under Balance Sheets) 1. Total assets amounted THB 7,451.86 million were increased by THB 572.90 million over that as of 31 December 2007 or 8.33% due to the significant changes as follows :- 1.1 Net trade accounts and notes receivable amounted THB 1,007.28 million were decreased by THB 108.70 million over that of previous year due to efficiency in debts collection. 1.2 Inventories amounted THB 800.72 million were increased by THB 77.87 million over that of previous year. Inventory level was increased in line with sales expansion. A part of it was waiting for delivery. 1.3 Investments in associates and interest in joint venture amounted THB 343.11 million were decreased by THB 100.75

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Annual Report 2008 - As of December 31, 2008

million over that of previous year due to their performance of the year, netted with dividends received (under equity method of accounting) and change in status of an associate to other long-term investments in the 4th quarter of the year 2008 amounted THB 73.55 million. 1.4 Property, plant and equipment amounted THB 4,596.69 million were increased by THB 572.30 million due to acquisitions of new assets, and netted with disposals and depreciation expenses during the year. 1.5 Deferred tax assets amounted THB 40.07 million were decreased by THB 9.86 million over that of the previous year because of the Company’s recognition of income tax expenses amounted THB 32.62 million, netted with additional deferred income tax assets recorded during the year by THB 22.76 million. 2. Total liabilities amounted THB 2,393.21 million were increased by THB 577.10 million over that as of 31 December 2007 or 31.78% due to the following significant changes :- 2.1 Short-term loans from banks amounted THB 210.35 million were increased by THB 195.41 million over that of previous year due to short-term promissory notes not exceeding 3 months being raised for the Company’s normal operation. 2.2 Trade accounts payable amounted THB 632.54 million were decreased by THB 185.60 million over that of previous year because of sooner payment for raw material for gaining reasonable price. 2.3 Current portion of long – term loans and long – term loans amounted THB 804.25 million were increased by THB 365.81 million due to the Group’s


additional borrowing under the investment project amounted THB 458.97 million, netted with repayment of principal amounted THB 94.56 million during the year. 2.4 Payable of long – term assets amounted THB 315.59 million were increased by THB 268.17 million over that of previous year due to acquisition of new assets for business expansion and year end exchange rate adjustment of payable. 2.5 Other current liabilities amounted THB 92.35 million were decreased by THB 37.60 million over that of previous year due to decrease of advance receipts from customers since the work delivery was made and then recognized as revenue. 2.6 Deferred tax liabilities amounted THB 243.44 million were decreased by THB 27.07 million over that of previous year due to recognition of depreciation expenses portion of appraised assets and fixed assets disposal. 3. Total shareholders’ equity amounted THB 5,058.64 million were decreased by THB 4.20 million over that as of 31 December 2007 or 0.08% due to the following significant changes :- 3.1 Share capital amounted THB 2,709.90 million was decreased by THB 147.24 million over that of previous year due to reduction of share capital for the unsold treasury shares amounted THB 127.31 million resulting in THB 19.93 million difference between the par value and treasury shares purchase value. The such amount was recorded as premium on treasury shares. 3.2 Net profit attributable to the parent company for year ended 31 December 2008 amounted THB 98.19 million. 3.3 Unrealized gain is fair value reserves on assets amounted THB 1,083.88 million was decreased by THB 58.79 million

over that of previous year because of assets revaluation surplus amortization against an addition to retained earnings which was in line with increase in depreciation expenses portion of appraised assets. 3.4 Minority interests amounted THB 263.66 million were increased by THB 14.79 million over that of previous year due to net profit of the year ended 31 December 2008 amounted THB 36.44 million, netted with depreciation expenses portion of assets’ revaluation amounted THB 2.24 million, and dividends amounted THB 18.82 million. • Consolidated statements of cash flows for the year ended 31 December 2008 comparing to that of previous year ended 31 December 2007 showed a net increase of cash flows of THB 15.40 million, comprising(details as shown in Consolidated and Company Financial Statements for the year 2008 under Statements of Cash Flows):- 1. Net cash receipts from operating activities amounted THB 350.65 million were decreased by THB 176.46 million over that of previous year due to operating performance of the year 2008, netted with changes in trade accounts receivable, inventories, and trade accounts payable. 2. Net cash payments for investing activities amounted THB 740.48 million were from acquisition of fixed assets amounted THB 747.54 million and intangible assets amounted THB 34.44 million in order to get prepared for business expansion, netted with cash received from fixed assets disposal amounted THB 23.90 million and dividends received amounted THB 35.72 million. 3. Net cash receipts for financing activities amounted THB 405.22 million were due to the Group’s receipt of long – term loans under the investment plan amounted THB 458.97 million, netted with repayment of Annual Report 2008 - As of December 31, 2008

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principal amounted THB 94.56 million, increase of short-term loans from banks amounted THB 195.41 million, and dividends payment amounted THB 154.29 million.

that the Company has well utilized the assets and has paid close attention to safe-guarding all shareholders and stakeholders’ interest. Besides, the Company realizes the significance of sufficiency in making allowances for assets so as to reflect 6.2.2 Quality of Assets accurately asset valuation and financial position of The Company has set up regulations and Srithai Superware Group. In the year 2008, measures for controlling, monitoring and managing allowances for assets were shown below: assets, including procedural practice, so as to assure

Allowance for doubtful accounts – Accounts receivable and short-term borrowings Allowance for net realizable value and allowance for obsolescence Allowance for impairment of investments Allowance for impairment of machinery and equipment and for unrecoverable of deferred moulds Impairment of intangible assets

6.2.3 Borrowing 1) Srithai Superware Public Company Limited The Company’s long-term loans have divided into two tranches. The first one is long-term loans to support investment under energy conservation project which bears low interest rate as government support has been provided via local commercial banks with total outstanding amount of THB 452.43 million with seven-year maturity. Repayment schedule is set once every 3 months, starting in the year 2005 and ending in the year 2014. As of December 31, 2008, the outstanding balance of this type of loans was THB 294.98 million. Another tranche has been granted by Bangkok Bank Pcl. and Siam City Bank Pcl. amounting to THB 1,084.92 million with seven-year maturity. Repayment schedule is set once every 3 months, starting in the year 2009 and ending in the year 2015. During the year 2008, the Company signed

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Annual Report 2008 - As of December 31, 2008

Consolidated Financial Statements Year 2008 Year 2007 Million Baht Million Baht 7.02 14.00 15.77

15.53

3.50 10.11

3.50 7.90

3.98

-

seven Loan Agreements amounting to THB 959.92 million. Of which, THB 430.16 million were drawn down in 2008. Another Loan Agreement worth of THB 125 million was signed in early 2009. The Company has no problem to repay principal or to service interest charge. The Loan Agreements that the Company signed with the two banks had no covenant which may materially affect the operation or business expansion of the Company, except certain financial ratios which must be maintained under the conditions set forth in the Loan Agreements. 2) Subsidiaries • Srithai (Vietnam) Co., Ltd. has borrowed a long-term loan from a commercial bank in the Socialist Republic of Vietnam for business expansion. As of December 31, 2008, the outstanding balance of the loan was equivalent to THB 14.86 million.


• Srithai Moulds Co., Ltd. has borrowed two long-term loans under the energy conservation project from two local banks for total credit limit of THB 24.40 million. The loans are repayable monthly and once every 3 months with the first installment made in the year 2006 and the last will be in 2013. Outstanding balance of the long-term loans as of December 31, 2008 was THB 15.11 million. • Srithai Miyagawa Co., Ltd. has borrowed THB 77.28 million long-term loans from domestic banks for energy conservation project. Principal repayments would be made on monthly installments starting at the beginning of 2006 and to be completed at the end of 2014. Outstanding balance of the long-term loans as of December 31, 2008 was THB 49.14 million. Another three subsidiaries, which are Srithai Nanoplast Co., Ltd., Srithai Lock & Lock Co., Ltd., and Srithai Shin-Osaka Co., Ltd., have no additional long-term borrowings during 2008 due to lack of significant investment plans. More importantly, Srithai Lock & Lock Co., Ltd., has just established in December 25, 2008. Therefore, all those three subsidiaries have no long-term outstanding debts at the end of the year 2008. Conclusion In the year 2008, the Company had experienced many changes especially the fluctuation in oil prices – hitting record high and record low in the same year. This affected price of plastic resin, which is major raw materials, raising its overall operation cost. The US’s financial crisis has had impact not only to the US, but also to other countries including Thailand. The world is under economic recession. Production slash, slow down purchasing order, declining foreign investors’ confidence on Thai political & economic stability were three key challenging factors that the Company experienced in the year 2008 with difficulty. The Company has then set up business plan with caution

in order to take care all stakeholders’ benefits with continuing return to shareholders and investors. With an increase in sales in the year 2008 on back of higher export volume after penetrating into new markets (now almost 100 countries are the Company’s markets), price hikes and rising in proportion of higher-margin products were three factors attributable to an increase in overall gross profit margin compared to that of last year. The Company, on the other hand, had faced a rising in operating costs both from raw material and transportation costs. Moreover, an increase in financial cost from business expansion & use of working capital and a rise in foreign exchange cost as Baht fluctuated against US dollar caused the Company to finally report a decline in operating profit compared to that of last year. On financial side, the Company, however, has strong financial position and its financial liquidity is at appropriate level, taking into consideration business requirement and investment. With aim to be the leader in all businesses involved, the Company drew up re-engineering activities and new business plans by improving both management and production processes. Product differentiation and value-added creation have been used for existing industrial products, whilst widening product variety by launching new products. The Company has pursued those plans since late 2007 and had completely relocated its production facility and operation of Suksawat factory to Amata Nakorn Chonburi, with production starting in mid 2008. Moreover, old machines were replaced by new ones and more robots were employed. It has resulted in decreased production on overhead cost, reduction in defect rate and increased productivity. The group of new products in which the Company has invested for business expansion and/or sourcing for our distributorship are:- thin wall packaging products such as popcorn buckets and soft drink cups produced under IML technique (In-Mould Labeling), screw-on caps and PET performs for bottles, boxes for CD and DVD, beauty-care products under the brand name SNatur. Some Annual Report 2008 - As of December 31, 2008

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products had been launched to markets in the year 2008. The Company views that markets for the group of new products are promising, and it could generate more income in the year 2009. It will lessen negative effect on the Company at time of market shrinkage in certain industries. As to current business operation, the Company continually sets up measures so as to alleviate adverse effect from oil price problem by focusing on hire-of-work business for which the Company does not have to take risks on fluctuation of raw material prices. Other strategies are the upward adjustment of sales prices of our goods, shortening of lead time between order-taking and date of delivery, slashing production cost by planning new production bases in other countries of high potential i.e. Vietnam and India which have abundant labor forces at lower cost. These will enhance price competitiveness, as well as wider coverage of markets and customer base expansion. The Company has already expanded its production line for household products in Vietnam by investing in our subsidiary in Vietnam. Apart from Vietnam, India is another market that the Company plans to do so in the future. The Company has many customer bases in domestic and export markets, and its products could fulfill needs of customers in many industries. Also, the Company has strong commitment to expand markets aggressively and to have access to new

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groups of customers. To do so, the Company has been focusing on launching new product designs and product development, value-adding of products, including sourcing for new products for distribution to markets. Our customers have confidence in the quality and brands of our products, therefore the Company is confident in good potential on sales growth and competitive edge over its competitors. Srithai Superware Group has structural strength because the group operates as integrated business, so that the Group is least dependent on outsiders’ businesses. As a result, the Company could well control quality of goods and services of the whole Group to meet the same standard. Besides, procurements could be made at appropriate prices, and income could be circulated among companies within the Group. The Group keeps on penetrating new markets and customers to increase sales. Despite economic crisis, the Company still moves on developing and improving its production, management, and human resource for sustainable growth of business. Also, state-of-art information technology was brought in to help operate the business. These activities have reinforced strong base so that the Company could grow along the path to become a world class company which will finally add value to the shareholders’ interest.


7. IMPORTANT CHANGES AND SIGNIFICANT EVENTS OVER THE PAST YEAR 7.1 SIGNIFICANT EVENTS In the year 2008, the Company faced series of major events. Some transactions had been disclosed to the public after the Board of Directors passed the resolution in accordance with the regulation of the Stock Exchange of Thailand through ELCID and Company’s website. The important changes and significant events were:- 1) Investment 1.1) Investment in Re-engineering Plan and Investment in New Activity and Business Plan In 2007, the Board of Directors approved plans for re-engineering and new activity and business plan with aim to improve management and production capability, to enhance high-technology production competency and to create product differentiation and value-added. This is believed to support the Company’s long-term growth continuously and sustainably and to be recognized as a world-class company. In 2008, the Company had invested in following categories as shown below:- 1.1.1) Production Competency and New Technology - Move production line and operation from Suksawat to Amata Nakorn, Chonburi Province and set up the area inside called Electric Park for purpose of energy conservation. Commercial production started in mid of 2008. - Replace old machines with the new ones with higher efficiency. - Look toward the automatic production system by using robot. - Introduce IML (In-Mould Labeling) process for food & beverage packaging, instead of Silk Screening or Offset Printing. - Use Tandem Plastic Injection Technology, in which two moulds can be mounted on one machine, to produce crate before producing other products, claiming to be the first company in Asia who uses that technology.

- Be the first company in Thailand who produces battery case under Cell Combination Moulding and Decorating technique. Production process is automatic with the use of robot. This will enhance the Company’s productivity and quality as well as help reduce energy consumption and inventory stocking. - Install real-time control platform. Management can have access to the Company’s production information on real-time basis from any corner in the world. - Use Lean Manufacturing process to produce household products at Korat plant and develop new production techniques to be more automatic. - Renovate buildings and factory, machines, production line, and electricity and water systems in order to support new production line and technology. - Hire experienced technical consultant who specializes in plastic injection moulding production to give advice on production technique, strategic planning and process management. 1.1.2) Business Expansion and New Product - Invest in new moulds on profitable products that demand is rising. - Push thin wall products like pop corn buckets and soft drink cup produced under IML (In-Mould Labeling) available at cinema houses. The Company also gets order from convenient store to produce thin wall containers for hot & cold drinks. - Invest in a new production line for screw-on caps and PET preforms under patent licensing from Universal Closure Limited for production and distribution of the screw-on caps Annual Report 2008 - As of December 31, 2008

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covering 14 countries. This is a new innovation focused on reduction of cost and raw material consumption which enhances competitiveness and leadership of the Company in this industry. Target customers are bottlers of carbonated drink and water. - Invest in machines and moulds to produce of CD&DVD boxes with special features and patent protection. This is another confidence and trust received from an offshore distributor on quality of our goods and our leadership in injection technology.

1.2) Newly Established Subsidiaries Lock & Lock Co., Ltd. (“L&L”), Korean’s producer and distributor of plastic products, especially in plastic boxes for food storage, with customers approximately in 100 countries worldwide, has expressed wish to increase efficiency in distribution of food boxes under brand “L&L” in Thailand. So as to expand customer base and penetrate market in Thailand, taking into consideration that the Company being the sole distributor for L&L products, the Company joined hands with L&L to set up a new company called Srithai Lock & Lock Co., Ltd to engage in importing and distributing plastic boxes for food storage and other related products. Registered with the Ministry of Commerce on 25 December, 2008, the new company has paid-up capital of THB 17 million, comprising 1,700,000 million shares at THB 10 par each with 51% stake held by the Company. 1.3) Liquidation of Two Affiliates During, the year 2008, its two affiliates, Soko Srithai Co., Ltd and Srithai WBG Co., Ltd, were closed down due to unfavorable business circumstance of partners, operating problems and losing major customers. After taking all factors into consideration, business close down was better than keeping those two firms operating with ongoing expenses or investing more to turn it around but no

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Annual Report 2008 - As of December 31, 2008

hope on profit. The Company held shares in the two companies at 24% and 47% respectively. The Company fully booked losses on impairment of investments in those two companies. Those two companies had registered its dissolution with the Ministry of Commerce in the year 2008. 1.4) Change in status of investment in LN Srithai Comm Co., Ltd LN Srithai Comm Co., Ltd (“LN”), a producer of telephone set, is the Company’s affiliate with 20% stake. The Company has some influence in LN in its management but with no control. Two managements of the Company are LN directors for purpose of safe guarding our interest as a shareholder. Since LN’s business performance during the past years was satisfactory, and it could pay dividend continually, the Company decided to decrease role of our executives in LN so that they have more time to monitor our core business in line with increased duties and responsibility of our directors and executives according to the Business Direction which being focussed on aggressive and continual growth. Such decrease of role has resulted in more suitable structure of the whole group because LN is not in the same core business with the Company and there is no significant intercompany transaction. The Company decided to reduce director quota at LN by half to just one (from two) and having no right to sign any document binding LN. The status of this investment has therefore changed from the investment in affiliates to become other long-term investment and voting rights remain the same. 2) Borrowings 2.1) Additional Loan to Finance Investment Plan The Company had received additional longterm loans of THB 1,084.92 million from Bangkok Bank Pcl.(BBL) and Siam City Bank Pcl.(SCIB) to finance investment plan. The first tranche is charged at fixed rate at 4% per annum, while the


remaining is charged at MLR-1.5% to MLR-0.5% for seven years term. During 2008, seven contracts of such long-term loan had been signed amounted THB 959.92 million, and THB 430.16 million out of which was drawn down during the year, while another loan contract of THB 125 million was signed in early 2009. In addition, the Company received additional credit facilities from the said two banks to support working capital of our business and business expansion. Total working capital credit facilities has increased from THB 400 million to THB 650 million, together with additional foreign exchange forward contract facility USD 6.5 million. 2.2) New Working Capital Credit Facilities In 2008, the Company had received additional credit facilities from three local financial institutions totaling THB 575 million. This comprises O/D (overdraft), P/N (promissory notes), L/C (letter of credit), T/R (trust receipt) and Forward Contract, etc. These credit facilities are used to support business expansion and to increase the Company’s liquidity at appropriate sources of funds and at suitable cost. 3) Others 3.1) Director Appointment In Replacement of the Late Director In 2008, the Company’s Board of Directors appointed Ms. Siriporn Sailasoot, who is capable and knowledgeable without any disqualification record according to Public Limited Company Act B.E. 2535 under Article 68. She was nominated by the Nominating and Remuneration Committee as Director effective on March 3, 2008 after Mr. Thawee Kongyungyuen who passed away on January 12, 2008. Her term as a Director will end on the same date of the remaining term of Mr. Thawee Kongyungyuen. 3.2) Dividend Payment The Company set as legal reserve the sum of THB 9,000,000 for the year 2007 and paid

dividend to shareholders at rate of THB 0.50 per share amounted THB 135,495,240 equivalent to 76.89% of net profit of the Company financial statements on May 27, 2008. 3.3) Treasury Stocks Written off The period of repurchase of treasury stock for purpose of financial management started on 1 June 2005 to 30 November 2005 which was the date of share repurchase completion. Total purchase was 14,723,806 shares, equivalent to 5.15% of total common shares. Average purchase price was BAHT 8.65 per share, amounted THB 127,309,640. Number of shares remaining with the shareholders was 270,990,480 shares. After the completion of share repurchase, the Company could dispose of the treasury shares during 1 June 2006 to 30 November 2008 according to the Treasury Stock Rules. The Board of Directors has approved selling of 14,723,806 repurchased shares during 1 September 2006 to 30 November 2008 at prices equal to or higher than THB 8.65 per share which is the average cost price of the treasury stock. However, selling price will not be less than 85% of the latest 5-day average close price according to criteria of the Stock Exchange of Thailand. The Company did not dispose of the treasury stock due to the reason of unsuitability of share prices till the end of the share repurchase program on 30 November 2008. In order to observe the law, the Board approved reduction of authorized and paid-up capital by writing off the unsold treasury stock, and amending Memorandum of Association in line with the capital reduction. After the capital reduction, the Company has registered and paid-up capital of THB 2,709,904,800, comprising 270,990,480 shares at par value THB 10 per share. The Company has registered the capital reduction with the Ministry of Commerce on 12 December 2008. 7.2 Human Resource Development The Company has attached much importance Annual Report 2008 - As of December 31, 2008

75


on human resource (HR) development by assigning the Office of Human Resource Development to determine and provide training courses and activities to enhance staff with knowledge and capability, specialization in their duties, and readiness and potential to grow in the future. Moreover, the Office of Human Resource Development is expected to be developed to become an educational institution in the future. It will be a center of knowledge of plastic industry and plastic injection technology. The Company is willing to transfer such knowledge not only to staffs but also to outsider for the sake of social contribution. To achieve the said target, the Office of Human Resource Development has set up 4 main missions:- 1. Creating 4S organization culture; 2. Creating learning organization; 3. Professional training and development; 4. Managerial training and development Creating Organization Culture The Company has a vision and determination to develop its business to become a world-class company. By doing so, the organization could grow firmly and sustainably. The personnel should be value added by enhancing their working skill and quality so as to bring achievement to the organization and bring the Company to the goals. The Company, therefore, has introduced “4 principles of management (4S)” which now becomes philosophy of working with an aim to improve efficiency and effectiveness of staffs in its personnel development and culturalization of the organization. The 4S comprises:- STRENGTH : strength of team-work leads to strength of the organization • The personnel have consciousness in morality and virtue so as to work together in team-work and likewise appreciate the Company as a part of their lives. STRETCH : to do it better today, and to be

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Annual Report 2008 - As of December 31, 2008

ahead of tomorrow • The personnel could continually develop and improve the capability of themselves and their works to be more efficient. SPEED : to respond quickly with service mindfulness • The personnel could support requirements of concerned persons from both inside and outside the organization with up-todate, correct, and quick information, and make service impression. SYSTEM : to work systematically and traceable • The personnel could work systematically and make decision based on correct and precise analyzed information. The Company has set the year 2008 as the year for “S1”, Strength, by assigning office of the Human Resource Development to provide training courses and activities to educate staffs for their better understanding of “Strength” concept. Activities for the other three remaining “s” will be designed to match with its concept in the later years. 7.3 Information Technology System In the year 2008, the Company had done various information technology development plans so as to support other business units to operate more efficiently and faster. Details are as follow:- 1) Developing direct sales system in order to support the expansion of business. 2) Increasing efficiency of server and other hardware equipments in order to improve the infrastructure of information technology to be more capable so as to support local area networking throughout the organization. 3) Improving internet and e-mail efficiency. 4) Introducing technological instruments like Remote Access, VPN and WiFi, etc, so that working system problems could be faster solved from outside the Company by logging


in through security system. 5) Upgrading Oracle system so as to improve the working efficiency. 6) Developing E-Office information system, e.g., computerized document control so as to reduce cost and improve the working efficiency in the office. 7) Providing training to staffs to enhance computer knowledge, skill, and understanding in information technology. 7.4 Remuneration to Auditors 1) Audit Fee The Company and subsidiaries paid audit fee to:- - External auditor in the past accounting year for the sum of THB 2.24 million. - Audit firm for whom the auditor work and persons or business related to the auditor and such audit firm for whom the auditor work, in the past accounting year for the sum of THB 1.59 million and USD 18,600. 2) Non-audit fee The Company and subsidiaries paid non-audit fee for computer system control review, advice on preparation of consolidated financial statements, and audit on compliance to BOI promotional certificate of companies in the Group to:- - auditors in the past accounting year the sum of THB 0.57 million, and the Company is obligated to pay to them in the future the sum of THB -- million. - audit firm for whom the auditor work and persons or business related to the auditor and such audit firm in the past accounting year the sum of THB 0.20 million, and the Company is obligated to pay to them in the future the sum of THB -- million. 7.5 Policy and Energy Conservation Measure The Company has continuously focused on energy conservation measures both for its factories and head office by setting up various campaigns to raise awareness of all levels of employees. Besides

normal energy conservation measures, the Company is open for employees to share ideas or opinions on how to save energy as well as survey on how to eliminate energy waste. All these aim to convince all employees to participate in the Company’s energy conservation program. Such program is not only good to the Company in terms of cost reduction, but also to sociaty and nation as a whole. In the year 2008, Department of Alternative Energy Development and Efficiency, Ministry of Energy, has introduced the pilot project called “Standard Plan of Energy Management” to set up energy management procedure in accordance with Energy Conservation Act (No. 2) in 2007 and draft of Ministerial Regulation on standard, criteria, and methodology on management of energy in controlled factories and buildings as well as other related regulations to be effective in 2009. There were 40 companies nationwide, including us, that participated in this project. Benefit from this project to the Company is to prepare each factory to get ready for evaluation by external inspectors who were certified by Department of Alternative Energy Development and Efficiency, Ministry of Energy before the new law becomes effective. In addition, on March 7, 2008, the Company joined hands with Energy Conservation Consulting Center of the Thai Chambers of Commerce to organize a pragmatic operational seminar on the topic “Energy Conservation Measures for Plastic Industry” by inviting lecturer from King Mongkut’s University of Technology Thonburi as a guest speaker. There were participants from 30 plastic plants attending theoretical and pragmatic approaches course of the seminar at Suksawat plant. This seminar is not only to show the Company’s attention on energy conservation and social benefit, but also to exchange knowledge and experience, and fair treatment to partners, competitors and all stakeholders.

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7.6 Safety, Health and Working Environment The Company has followed a scheme on safety, health and working environment seriously and continually. This includes training employees before they start working, making a work manual, disseminating information about safety and setting up a sub-committee on safety, health and working environment in each plant to work closely in audit of safety, improvement, and evaluation. This aims to achieve results as described in the Company’s policy and suitability with our business operation. It helps pave a way to standardization on safety, health and working environment of international standard, resulting in an increase in competitive edge for the Company as a whole by reducing waste in term of staff, time and productivity, together with improving the Company’s image to the public. In the year 2008, the Company has appointed staffs, who passed the training courses “Safety Manager” and “Safety Supervisor” in each factory, to be “Safety Manager and Safety Supervisor” in accordance with legal requirement. Moreover, the Company is about to enter into the procedure of certification of standard at Korat factory to get Thai Industrial Standards Institute’s certification number 18001:2542 and OSHAS 18001:2007. Should the Company get those two certifications, it will increase consumers’ confidence in the Company’s production process with regard to safety at ministerial and international standards level. 7.7 Environment The Company has realized the importance of social and environmental responsibilities and considered as part of its key tasks assigned to all staffs. The Company wishes to continually improve environmental management system. The Company has set up an environmental policy to serve as a guideline to all. Factory at Bangpu passed the certification for environmental management under ISO 14001:2004 by United Registrar of Systems (Thailand) Ltd. (URS) since 2007. In 2009, the Company has a plan to upgrade Bangpu factory’s

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Annual Report 2008 - As of December 31, 2008

certification continuously in order to get certificate of the new version, ISO 14001:2007, and parallel to environmental management certification of Korat factory for ISO 14001:2007. 7.8 Other Activities The followings were continual activities undertaken in 2008: 1) You Dee Mee Suk Project To campaign for and train staffs on living with sufficiency according to the King’s Sufficiency Economic Activities. 2) Long-term Training for Students Project To let students of vocational level and higher vocational level from the North Eastern region of Thailand have a long-term training and pay incentive and welfare as if they are our staffs. 3) School inside Factory Activity It is a cooperation among the Company, the Labor Ministry and the Education Ministry, in providing education inside factory to staffs and interested persons who live thereby for sake of their chance to be educated by setting up three outsideschool educational centers within Bangpu, Amata Nakorn Chonburi and Korat plants. 7.9 Awards Received in 2008 1) To Be No. 1 Award for Regional Manufacturers This award is rewarded to manufactures that have launched campaigns and activities against drug addiction inside the Company’s premise and its neighboring community. Korat plant used to get the To be No.1 Award for Provincial Manufacturers in 2007. In 2008, the plant was selected as the candidate of Nakornrachsrima Province in the contest for that award again and finally it won that reward for the contest of the North Eastern Region from Her Royal Highness Ubonrat Ratchakanya Siriwattapunnawadee, on March 21, 2008.


2) TLS 8001-2546 Certificate of Perfect Level at Initial Stage On April 9, 2008, Korat plant got the TLS 8001-2546 certificate of perfect level at initial stage from Department of Social Welfare and Labor Protection, Labor Ministry. This award is for manufacturers who have good labor management in accordance with labor standard system of Labor Ministry for purpose of supporting and developing business enterprises on good labor management system, so that employees will get protection and treated fairly with better living standard. The Company used to get such reward in 2006. 3) Management Excellence Award for Controlled Factory On July 30, 2008, the Company received the Management Excellence Award for Controlled Factory on Energy Conservation Plan in the event Thailand Energy Award 2008 organized by Department of Alternative Energy Development and Efficiency, Energy Ministry. There were 137 business enterprises participated in the contest. The Minister of Energy presented the awards at Chulaporn Research Institute, Bangkok. 4) Manufacturer Excellence Award on Labor Relationship and Labor Welfare for 2008 On September 23, 2008, Korat plant received the Manufacturer Excellence Award on Labor Relationship and Labor Welfare for 2008 from Minister of Labor. The Company has got the award for many consecutive years. There are three criterions considered in the contest; business enterprise information, labor relationship information and labor welfare information.

5) Distinguished Private Sector Compliant with Measures/Protections/Corrections of Drug Problems in Nakornratchasrima Province for 2008(Return Good People Back to Society) On October 15, 2008, Korat plant received the Distinguished Private Sector Compliant with Measures/Protections/Corrections of Drug Problems in Nakornratchasrima Province for 2008 (Return Good People Back to Society) from Nakornratchasrima Province Governor. 6) Manufacturer Excellence Award on Hiring Disables On November 3, 2008, Korat plant received the Manufacturer Excellence Award on Hiring Disables from Minister of Social Development and Human Security. This was because the Company hired disables according to the proportion required by law. Presently, the Company hires 12 disables who are deaf, blind and handicapped physically. This was the second consecutive year the Company received such award. 7) Plate of Honor for Blood Donation Supporter under the King’s Project On December 1, 2008, Korat plant received the Plate of Honor for Blood Donation Supporter under the King’s Project from Chairman of the Blood Donation Solicitation & Support Committee, Thai Red Cross Society. Korat plant had held three blood donations in 2008.

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Report by the Board of Directors

on its Responsibility to Financial Statements

To : Shareholders Srithai Superware Public Company Limited The Board of Directors is accountable for correctness of financial statements of Srithai Superware Public Company Limited and consolidated financial statements of Srithai Superware Public Company Limited and its subsidiaries including financial information presented in the Annual Report. The Company has adopted appropriate accounting policies consistently applied and conformed to generally accepted accounting standards. Also, significant information was sufficiently disclosed in notes to financial statements for sake of proper benefits to shareholders, investors, and stakeholders. Financial statements of the Company and consolidated financial statements of the Company and its subsidiaries have been audited by PricewaterhouseCoopers ABAS Limited, auditor of the Company. The Board of Directors and executives supported the auditor with all necessary information and documents so that external auditor could audit and express his opinion in accordance with auditing standards. The external auditor has expressed his opinion in Auditor’s Report as shown in the Annual Report. The Board of Directors has provided risk management system and maintained internal control systems with appropriateness. That was to assure reasonably of the correctness, completeness, and sufficiency of accounting records that the Company’s assets have been maintained and safeguarded, and dishonest conducts or material abnormal operations have been prevented. The Board of Directors has appointed an Audit Committee to be responsible for reviewing accounting policies, quality of financial reports, internal control system, internal audit system, risk management system, and disclosure of related party-transaction information. The Audit Committee has expressed their opinion in the Audit Committee’s Report as shown in this Annual Report. The Board of Directors opines that managerial structure and internal control system of the Company are satisfactory. The Company’s auditor did not qualify the Company’s financial statements, or raised any specific observation thereon, so we could rest assured that financial statements of Srithai Superware Public Company Limited and consolidated financial statements of Srithai Superware Public Company Limited and its subsidiaries as at December 31, 2008 present fairly in all material respects the financial position, performance, and cash flows in accordance with generally accepted accounting principles and other relevant laws and regulations. On Behalf of the Board of Directors Mr. Sanan Angubolkul Chairman of the Board

80

Annual Report 2008 - As of December 31, 2008


Report of the Audit Committee To : Shareholders Srithai Superware Public Company Limited The Audit Committee of Srithai Superware Public Company Limited consists of Prof. Viroj Lowhaphandu as chairman, Mr. Enghug Nontikarn and Mr. Suchat Boonbanjerdsri, as members. They are independent directors of the Company. The Audit Committee supervised the internal section of the Company. They held 4 meetings in a year to consider the internal auditing reports together with the auditor, representative of the Company’s executives and the head of internal auditing section, who act as the secretary of the meeting. The major contents of the meetings can be summarized as follows. 1. Preparation of the Financial Statements for the year 2008 The financial statements of Srithai Superware Public Company Limited have been recorded and prepared according to the Accounting Act B.E.2543 and the declarations of the Department of Business Development, Ministry of Commerce. It also followed to the accounting standards declared by the Federation of Accounting Professions under the Royal Patronage of His Majesty the King, and audited by the certified public auditor, who was approved by the Securities and Exchange Commission and appointed by the shareholders’ meeting. The Company’s financial statements disclosed sufficient information. In case of any comments being made by certified public auditor, the Company always improved the financial statements accurately and properly. 2. Internal Control System The Company has good internal control system and has always improved according to the criteria recommended by the Stock Exchange of Thailand or the Securities and Exchange Commission via the Thai Institute of Directors, especially the raw materials control, the subsidiaries’ purchase of products, and the control of financial documents. For trading business, the Company has improved the inventory control system as compared to that of last year. The internal auditing department also recruited additional workforce to discharge the increased workload on auditing of the subsidiaries and associated companies since the fiscal year 2008. The Company also increased officers for the internal audit section to look after the preparation of consolidated financial statements in order to comply with the standards set up by the authority. 3. Risk Management Activities The Company has appointed a Sub-committee on Risk Management. This sub-committee is separated from the Audit Committee. The sub-committee on Risk Management composed of the Chief Financial Officer as chairman, and the Directors of Production, Sales and Finance as members of the sub-committee. The sub-committee held 12 meetings a year, and report outcome of the meetings to the Audit Committee for acknowledgement comments and proposed to determine risk counter-measure plan when the Company has to face with the economic crisis and any uncontrollable incidents, which might impact to the Company’s business operations.

Annual Report 2008 - As of December 31, 2008

81


4. Compliance with Securities and Exchange Act and relevant laws The Audit Committee has reviewed transactions executed with related persons and business in every quarter, as compared to those transactions executed with outsiders, and found no significant damage or any conflict of interest. Those transactions were executed in such a way that a reasonable person might have executed it with others. No irregularity on giving noneligible benefit to directors or executives other than normal remuneration was found. Such irregularity might cause damage or conflict to the interest of the Company. The Company has complied with regulations on good corporate governance set up by the Company. Performance evaluation for the year 2008 conducted by Thai Institute of Directors Association in collaboration with Office of the Securities and Exchange Commission and The Stock Exchange of Thailand revealed that the Company achieved scoring at 84% which was higher than that of listed companies in SET100 group and averaged scoring of all listed companies. 5. Appointment of Certified Public Auditor for the fiscal year 2009 May the Audit Committee propose to the shareholders’ meeting to appoint Mr. Prasan Chuaphanich, Certified Public Auditor No. 3051 and Ms. Nangnoi Charoenthaveesub, Certified Public Auditor No. 3044 and Mr. Kajornkiet Aroonpirodkul, Certified Public Auditor No. 3445 from PricewaterhouseCoopers ABAS Company Limited to be the Company’s auditor. Any authorized auditor mentioned above shall be able to audit and express his or her opinion on the financial statements. In case that all the Public Auditors mentioned above cannot perform their duties, PricewaterhouseCoopers ABAS Company Limited shall provide other Certified Public Auditor for the Company for the fiscal year 2009. Auditing fee shall be 2,270,000 Baht (Two Million, Two hundred and Seventy Thousand Baht only).

Bangkok February 2009

82

Annual Report 2008 - As of December 31, 2008

On Behalf of the Audit Committee Srithai Superware Public Company Limited

(Professor Viroj Lowhaphandu) Chairman of the Audit Committee


SRITHAI SUPERWARE PUBLIC COMPANY LIMITED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2008


AUDITOR’S REPORT

Annual Report 2008 - As of December 31, 2008

1


BALANCE SHEETS

Srithai Superware Public Company Limited Balance Sheets As at 31 December 2008 and 2007

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements.

2

Annual Report 2008 - As of December 31, 2008


BALANCE SHEETS

Srithai Superware Public Company Limited Balance Sheets As at 31 December 2008 and 2007

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements. Annual Report 2008 - As of December 31, 2008

3


STATEMENTS OF INCOME

Srithai Superware Public Company Limited Statements of Income For the years ended 31 December 2008 and 2007

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements.

4

Annual Report 2008 - As of December 31, 2008


-

-

Acquisition of investment in subsidiary

Liquidation of subsidiary

-

-

-

-

-

-

-

-

-

-

-

-

(29,735,144)

-

-

-

-

(29,735,144)

-

(29,735,144)

-

(3,514,079)

-

-

-

(26,221,065)

(34,268,076)

-

-

-

-

(34,268,076)

-

(34,268,076)

-

(4,532,932)

-

-

(29,735,144)

(Note 28)

1,142,670,822

-

-

-

-

1,142,670,822

-

1,142,670,822

(27,490,902)

-

(616,746)

(54,979,931)

14,555,033

1,211,203,368

1,083,878,951

-

-

-

-

1,083,878,951

-

1,083,878,951

(3,537,572)

-

(2,163,792)

(53,090,507)

1,142,670,822

(Note 29)

gain

Unrealised

earnings

95,000,000

-

-

9,000,000

-

86,000,000

-

86,000,000

-

-

-

-

-

86,000,000

100,000,000

-

-

5,000,000

-

95,000,000

-

95,000,000

-

-

-

-

95,000,000

(Note 26)

- legal reserve

- treasury

127,309,640

-

-

-

-

127,309,640

-

127,309,640

-

-

-

-

-

127,309,640

-

-

(127,309,640)

-

-

127,309,640

-

127,309,640

-

-

-

-

127,309,640

(Note 27)

shares reserve

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements.

748,904,360

-

-

(9,000,000)

(121,945,716)

879,850,076

174,404,249

705,445,827

2,988,345

-

-

78,542,759

-

623,914,723

915,544,110

-

127,309,640

(5,000,000)

(135,466,790)

928,701,260

98,193,129

830,508,131

5,760,190

-

-

75,843,581

748,904,360

earnings

retained

Unappropriated

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements.

2,857,142,860

-

Legal reserve

Closing balance as at 31 December 2007

-

Total gain (loss) recognised for the year Dividends (Note 36)

2,857,142,860

-

2,857,142,860

Increase (decrease) during the year (net of deferred tax liabilities)

Total gain (loss) recognised in equity Net profit for the year

-

Currency translation differences

-

Fair value reserves on available-for-sale investments

(net of deferred tax liabilities)

Transfer of fair value reserves on assets - depreciation

-

2,857,142,860

Opening balance as at 1 January 2007 Fair value reserves on assets (net of deferred tax liabilities) -

19,928,420

2,709,904,800

Closing balance as at 31 December 2008

-

19,928,420

-

(147,238,060)

-

Reversal of treasury shares reserve

-

-

-

-

-

Offset of treasury shares

-

Legal reserve

2,857,142,860

-

2,857,142,860

Total gain (loss) recognised for the year Dividends (Note 36)

Total gain (loss) recognised in equity Net profit for the year

-

-

-

Currency translation differences

Increase (decrease) during the year (net of deferred tax liabilities)

-

-

-

-

2,857,142,860

(Note 25)

(Note 25)

and associates

overseas subsidiary

Premium on treasury shares

paid up

earnings

retained

retained

Appropriated Appropriated

Translation investments in

share capital

Consolidated (Baht) Attributable to equity holders of the company adjustment for

Issued and

-

Fair value reserves on available-for-sale investments

(net of deferred tax liabilities)

Opening balance as at 1 January 2008 Transfer of fair value reserves on assets - depreciation

Srithai Superware Public Company Limited Statements of Changes in Shareholders’ Equity For the years ended 31 December 2008 and 2007

(127,309,640)

-

-

-

-

(127,309,640)

-

(127,309,640)

-

-

-

-

-

(127,309,640)

-

127,309,640

-

-

-

(127,309,640)

-

(127,309,640)

-

-

-

-

(127,309,640)

(Note 27)

shares

Treasury

4,813,982,898

-

-

-

(121,945,716)

4,935,928,614

174,404,249

4,761,524,365

(24,502,557)

(3,514,079)

(616,746)

23,562,828

14,555,033

4,752,039,886

4,794,988,205

-

-

-

(135,466,790)

4,930,454,995

98,193,129

4,832,261,866

2,222,618

(4,532,932)

(2,163,792)

22,753,074

4,813,982,898

Total

248,862,784

(49)

12,132,484

-

-

236,730,349

22,631,879

214,098,470

5,661,828

-

-

-

-

208,436,642

263,655,652

-

-

-

-

263,655,652

36,436,022

227,219,630

(21,643,154)

-

-

-

248,862,784

(Note 30)

interests

Minority

5

5,062,845,682

(49)

12,132,484

-

(121,945,716)

5,172,658,963

197,036,128

4,975,622,835

(18,840,729)

(3,514,079)

(616,746)

23,562,828

14,555,033

4,960,476,528

5,058,643,857

-

-

-

(135,466,790)

5,194,110,647

134,629,151

5,059,481,496

(19,420,536)

(4,532,932)

(2,163,792)

22,753,074

5,062,845,682

Total

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Annual Report 2008 - As of December 31, 2008

5


6

Annual Report 2008 - As of December 31, 2008

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements.

Srithai Superware Public Company Limited Statements of Changes in Shareholders’ Equity For the years ended 31 December 2008 and 2007

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)


STATEMENTS OF CASH FLOWS

Srithai Superware Public Company Limited Statements of Cash Flows For the years ended 31 December 2008 and 2007

The notes to the consolidated and company financial statements on pages 8 to 64 form an integral part of these financial statements.

Annual Report 2008 - As of December 31, 2008

7


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

8

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

9


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

10

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

11


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

12

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

13


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

14

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

15


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

16

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

17


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

18

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

19


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

20

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

21


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

22

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

23


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

24

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

25


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

26

Annual Report 2008 - As of December 31, 2008


Annual Report 2008 - As of December 31, 2008

27

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

28

Annual Report 2008 - As of December 31, 2008


Annual Report 2008 - As of December 31, 2008

29

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

30

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

31


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

32

Annual Report 2008 - As of December 31, 2008


Annual Report 2008 - As of December 31, 2008

33

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

34

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

35


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

36

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

37


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

38

Annual Report 2008 - As of December 31, 2008


Annual Report 2008 - As of December 31, 2008

39

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

40

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

41


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

42

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

43


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

44

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

45


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

46

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

47


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

48

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

49


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

50

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

51


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

52

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

53


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

54

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

55


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

56

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

57


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

58

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

59


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

60

Annual Report 2008 - As of December 31, 2008


Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

Annual Report 2008 - As of December 31, 2008

61


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

62

Annual Report 2008 - As of December 31, 2008


Annual Report 2008 - As of December 31, 2008

63

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007


NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (Continued)

Srithai Superware Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2008 and 2007

64

Annual Report 2008 - As of December 31, 2008


บริษัท ศรีไทยซุปเปอร์แวร์ จำกัด (มหาชน) Srithai Superware Public Company Limited

355 ถนนสุขสวัสดิ์ ซอย 36 แขวงบางปะกอก เขตราษฎร์บูรณะ กรุงเทพฯ 10140 โทรศัพท์ 66 2427 0088 โทรสาร 66 2428 9675

355 Suksawat Rd., Soi 36, Bangpakok, Rasburana, Bangkok 10140 Tel. : 66 2427 0088 Fax : 66 2428 9675 www.srithaisuperware.com

srithai 2008 cover.indd 1

รายงานประจำปี 2551 Annual Report 2008

บริษัท ศรีไทยซุปเปอร์แวร์ จำกัด (มหาชน) Srithai Superware Public Company Limited

4/7/09 9:45:58 PM

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