BRR: Annual Report 2015 by ar.brr

Annual Report 2015

Buriram Sugar Public Company Limited

Message from the Board of Directors

(Mr. Anant Tangtongwechakit) Chief Executive Officer

(Mr. Prachuab Chaiyasan) Chairman of the Board of Director

In addition, at the end of 2015, Office of the Cane and Sugar Board granted the Company 2 new licenses to establish 2 sugar factories in Chamni district, Buriram province and Nonnarai district, Surin Province with production capacity of 20,000 tons cane per day for each factory. It is a major milestone for future business growth and it is a response to rising demand of sugar in both domestic and abroad.

A decade of the Company operation has been focusing on increasing productivity by adhered to “Sugar Made in the Field” philosophy to achieve the highest quality of sugarcane and sugar production. In fact, it is not just a machinery that matter, but it is actually the management and development of sugarcane agronomy. The Company pays attention from start, the selection of sugarcane varieties, soil preparing, nurturing, as well as the plan for harvesting of sugarcane at the right time. Thus, these practices enabled the Company to increase cane volume from 1.77 million tons in 2013/14 to 1.95 million tons in 2014/15 crop year. The sugar extracted rate up to almost 119 kg/ton cane from 117 kg/ton cane the year earlier which was the second highest in the country. In 2015/16 crop year, cane volume was expected to rise to 2.2 million tons. While, the factory’s crushing capacity was increased from 17,000 tons / day in 2014/15 to 23,000 tons / day in the 2015/2016 to accommodate more cane. The expansion was funded by the issuance and offering of domestic debenture.

The overall the turnover for the year 2015 was with a net profit of 272.34 million baht which increased 36.03 million baht or 15 percent compared to net profit of 236.31 million baht of the year 2014. The key of the increased turnover was due to increasing sugar and molasses from sugarcane from promoting the expansion of sugarcane planting to the farmers and quality control of raw materials that made the Company more revenue. Although, the world market price of sugar has dropped steadily and hit the lowest in 7 years but the Company was able to retain the ability to make a profit.

3 Annual Report 2015

For the biomass power business, Buriram Power Co., Ltd.â&#x20AC;&#x2122;s power plant (the second power plant of the group) has started selling electricity to PEA in April 2015 and has been promoted by the Board of Investment in the operation as well. And the total turnover of this business increased. In addition, to support raw material (bagasse) increasing in 2015, the Company has established Buriram Power Plus Co., Ltd. and Buriram Super Power Co., Ltd. to run the energy and electricity business in the future, including the establishment of Buriram Agro Energy Co., Ltd. to implement ethanol project which is now under study. Additionally, for social responsibility the Company believes that business development must be carried out together with social development. Through the year 2015 the Company focused on promoting the profession to raise the well-being of people in the community, such as the hand-woven mats of Sokdoo community and the hand-woven red-footed silk of Kubon community. The Company has made the strengthening and educational activities to develop and add value to their products, as well as purchase those from the community to be made for the Company to deliver as presents in the New Year and other occasions. The Company will carry on social works to gain acceptance and trust from communities and society. Finally, on behalf of the Board of Directors, we would like to extend our sincere thanks to all cane farmers, shareholders, customers, suppliers, employees and all stakeholders for the support and being a part of the Company development to move ahead. The Company will continue adhering to the vision and mission to develop the sugar business and renewable energy for sustainable growth coupled with community and social prosperity.

4 Annual Report 2015

Buriram Sugar Public Company Limited

Board of Director

Mr. Prachuab Chaiyasan

Mr. Anant Tangtongwechakit

Chairman of the Board of Director (Independent Director) and Chairman of the Audit Committee

Chief Executive Officer, Director and Chairman of the Risk Management Committee

Mrs. Seenual Tasanapant

Mr. Sirichai Sombutsiri

Independent Director and Audit Committee

5 Annual Report 2015

Board of Director

Mrs. Wanphen Punyaniran

Mrs. Jirawan Pongpichitkul

Director, Executive Director and Risk Management Director

Director

Miss Chittima Tangtrongwechakit Director, Executive Director and Risk Management Director

Mr. Sarit Tangtrongwechakij

Mr. Adisak Tangtrongweachakit

Director, Executive Director and Risk Management Director

6 Annual Report 2015

Buriram Sugar Public Company Limited

Financial Highlights Unit : Million Baht 5,385.67 6,762.11

3,954.03 4,295.86

Total Revenue

2014

2015

236.31

272.35

Total Assets

2014

2015

3,397.26 4,635.93

Total Liabilities

Net Income

2014

2015

1.71

2.18

2014

2015

1,988.40 2,126.17

Shareholder's Equity

D/E Ratio

2014

2015

Sales by Geographic

68.24 %

2015

31.76% Domestic

Export

7 Annual Report 2015

General Information of Company Buriram Sugar Public Co., Ltd. (BRR) Business Type

: Conduct business in investment by holding shares in subsidiary companies (Holding company) which are sugar manufacturing and distribution business, by product from sugar business, for example, electricity business and fertilizer business, and support business which is research and development Public Company No. : 0107556000523 Head Office/Factory : 237 Moo.2, Hinlekfai, Kumueang, Buriram 31190 Bangkok Office : 128/77-78 Phayathai Plaza Building 7th Fl., Phayathai Road,Ratchathewi, Bangkok 10400 Telephone : 04-465-9020, 0-2216-5820-2 Fax : 04-465-9020, 0-2216-5823 Website : www.buriramsugar.com

Subsidiaries Buriram Sugar Factory Co., Ltd. (BSF) Business Type Head Office/Factory Bangkok Office Telephone Fax

Buriram Sugarcane Research and Development Co., Ltd. (BRD) Business Type Head Office/Factory Bangkok Office Telephone Fax

: Research and development to improve efficiency of cane growing and caring : 237 Moo.2, Hinlekfai, Kumueang, Buriram 31190 : 128/77 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-465-9020, 0-2216-5820-2 : 04-465-9020, 0-2216-5823

Buriram Energy Co., Ltd. (BEC) Business Type Head Office/Factory Bangkok Office Telephone Fax

: Biomass power plant : 289 Moo.2, Hinlekfai, Kumueang, Buriram 31190 : 128/77 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-466-6368, 0-2216-5820-2 : 04-466-6368, 0-2216-5823

Buriram Power Co., Ltd. (BPC)

: Manufacture and distribute sugar : 237 Moo.2, Hinlekfai, Kumueang, Buriram 31190 : 128/77 Phayathai Plaza Building 7th Fl., Phayathai Road,Ratchathewi, Bangkok 10400 : 04-465-9020, 0-2216-5820-2 : 04-465-9020, 0-2216-5823

Business Type Head Office/Factory Bangkok Office Telephone Fax

8 Annual Report 2015

: Biomass power plant : 284 Moo.2, Hinlekfai, Kumueang, Buriram 31190 : 128/77 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-466-6368, 0-2216-5820-2 : 04-466-6368, 0-2216-5823

Buriram Sugar Public Company Limited

Buriram Power Plus Co., Ltd (BPP)

Buriram Agro Energy Co., Ltd (BAE)

Business Type Head Office/Factory Bangkok Office Telephone Fax

: Biomass power plant : 317 Moo.2 Hinlekfai, Kumueang, Buriram 31190 : 128/80 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-466-6368, 0-2216-5820-2 : 04-466-6368, 0-2216-5823

Buriram Super Power Co., Ltd (BSP) Business Type Head Office/Factory Bangkok Office Telephone Fax

: Biomass power plant : 289 Moo.2 Hinlekfai, Kumueang, Buriram 31190 : 128/80 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-466-6368, 0-2216-5820-2 : 04-466-6368, 0-2216-5823

Key Brand Fertilizer Co., Ltd. (KBF) Business Type Head Office/Factory Bangkok Office Telephone Fax

: Produce and distribute organic fertilizer : 237 Moo.2 Hinlekfai, Kumueang, Buriram 31190 : 128/77 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-465-9020, 0-2216-5820-2 : 04-465-9020, 0-2216-5823

9 Annual Report 2015

: Produce and distribute ethanol : 237 Moo.2, Hinlekfai, Kumueang, Buriram 31190 : 128/77 Phayathai Plaza Building 7th Fl., Phayathai Road, Ratchathewi, Bangkok 10400 : 04-465-9020, 0-2216-5820-2 : 04-465-9020, 0-2216-5823

Policy and Overview of Business Operation Overview of Business Operation

Byproduct business

Buriram Sugar Public Co., Ltd. and its subsidiaries are one of the sugar industry pioneers of Northeastern region of Thailand which Mr. Vichien Tangtongwechakit initiated cane growing practices and encouraged farmers to grow cane in Buriram Province. The group has operated an integrated business of raw sugar and brown sugar manufacturing and distribution both for domestic consumption and export more than 50 years. The Company uses byproducts of sugar manufacturing like bagasse, molasses and filter cake (press mud) to further advance the business utterly, including biomass power plant business, organic fertilizer and ethanol business.

1. Buriram Energy Co., Ltd. (BEC) originally Buriram Ethanol Co., Ltd. was registered on 2005 with 1 million Baht registered capital and increased registered capital to 15,600,000 Baht in August 2006 for preparation of ethanol plant construction. Due to unfavorable circumstances during that period, the Company has postponed its construction plan up until present. In 2010, the Company changed its name to Buriram Energy Co., Ltd. and raised its registered capital to 135,600,000 Baht in 2011. With its production capacity of 9.9 MW, Buriram Energy Co., Ltd., using bagasse as a main fuel for electricity generation, sells 8 MW of the electric power generated to Provincial Electricity Authority (PEA) and distributes remaining 1.9 MW to the sugar factory. The power plant locates near the Buriram Sugar Factory for convenience of bagasse transportation and electric power distribution. In December 30, 2011, BEC has contracted PEA to sell its electric power maximum 8 MW at 22,000 volts electric potential system and has started its distribution in May 2012. BEC electricity generation has been promoted and invested by The Thai Board of Investment in June 28, 2011. 2. Buriram Power Co., Ltd. (BPC) was registered on 2011. Currently, the Company has 170,000,000 Baht registered capital. BPC has been established to support bagasse-based biomass electricity generation project which can utilize other substitutable fuel materials such as woodchips, sugar leaves or chaff to generate electricity. The construction of BPCâ&#x20AC;&#x2122;s power plant has completed. The power plant is located near the power plant of BEC and Buriram Sugar Factory Co., Ltd. for convenience of bagasse transportation. In April 14, 2013, BPC contracted PEA to sell its electric power maximum 8 MW at 22,000 volts electric potential system and distribute to PEA since

Sugar Business Buriram Sugar Factory Co., Ltd. (BSF) was registered on 2003 with THB 1 million registered capital. In 2010 and 2011, the Company has increased registered capital to THB 990,637,000 and THB 1,050,000,000 consecutively. In 2011, BRR has transferred its employees in various departments, its sugar manufacturing and distribution license, factory license, brand, and electricity production and generation to BSF. BSF conducts sugar production and distribution business. The factory locates at 237 Moo.2, Baan Sao-Ae, Hinlekfai, Kumueang, Buriram, has authorized production capability of 17,000 tons per day, and is capable to crush sugarcane 2 million tons per annum. In 2015/16 cane crushing season, the production capacity will be increased to 23,000 tons per day. The distributed products can be divided into raw sugar and brown sugar and are sold for both domestic customer and international customer. Aside from sugar production, BSF can generate electricity from steam, a byproduct of sugar manufacturing, at 10 MW from 12 MW capacities to use in the sugar factory area. 10

Annual Report 2015

Buriram Sugar Public Company Limited 6. Buriram Agro Energy Co., Ltd. (BAE) was registered on 2015. Currently, the Company has 10,000,000 Baht paid. BAE is a company established to implement the production and distribution of ethanol which is made from molasses but is yet to start the operations. It is the process of applying for permission to prepare an environmental impact analysis (EIA).

April 2015. Moreover, the Company was approved for electricity sale from Adder system to Feed in tariff (FIT). BPC electricity generation has been promoted on investment by The Thai Board of Investment in January 5, 2015. 3. Buriram Power Plus Co., Ltd. (BPP) was registered on 2015. Currently, the Company has 10,000,000 Baht registered capital that fully paid and held 99.99% by BEC. BPP has been established to support biomass electricity generation project that will use bagasse as main raw materials. BPP is the third power plant of the group but the Company has not started operations currently because it is in the application process of power generation license from the Energy Regulatory Commission (ERC.).

Supporting Business Buriram Sugarcane Research and Development Co., Ltd. (BRD), originally Buriram Machinery Development Co., Ltd. was registered on 1996 with registered capital 1,000,000 Baht and has increased the registered capital to 70,880,000 Baht in February 16, 2010 and has changed its name to Buriram Sugarcane Research and Development Co., Ltd.

4. Buriram Super Power Co., Ltd. (BSP) was registered on 2015. Currently, the Company has 5,000,000 Baht that fully paid and held 99.99% of shareholding by BEC. BSP has been established to support biomass electricity generation project that will use bagasse as a main raw materials. BSP is the fourth power plant of the Group. Its objective is to set up to support the growth of the biomass power plant of the Company which has not started the operations.

BRD is a subsidiary company that provide raw material to BSF. BRD conducts its business via encouraging farmers to cultivate sugarcane by contract farming. The implementation helps sustain satisfactory amount of raw material for BSF operation, develop innovations such as sugarcane variety and sugarcanerelated machinery, organize farmer system, assist sugarcane cultivation, improve efficiency, and increase crop yield which help support quality of farmersâ&#x20AC;&#x2122; life.

5. Key Brand Fertilizer Co., Ltd. (KBF) was established in 2011 with the registered capital of fully paid of 15,000,000 Baht. It conducts the production of organic fertilizer and bio-fertilizer, using filter cakes, which is byproduct of sugar production process as main raw materials. KBF have started production and distribution in 2012 and has a production capacity of 30,000 tons per annum. The products will be sold to BRD to resell to the cane grower to enrich soil nourishment, which will help increase the quality of cane.

11 Annual Report 2015

Business Goal

of 9.9 MW with the Office of the Energy Regulatory Commission (ERC). The construction of the power plant will be completed by the third quarter of 2016, which plan to sell electricity to the sugar factory to accommodate the increasing capacity of the plant.

Long-term Goal The Company strives to maintain the standard and is the number one of the management and control quality of sugarcane productivity to produce sugar products and by-products for maximum efficiency. The Company understands that the raw material is highest risk of the business, so if it is well managed and controlled and stable as well as on going development, the Company will be able to conduct business securely. For the Biomass Power Energy, the Company aims to develop the business, coupled with the ongoing expansion of the sugar business. The plan is to increase the capacity of biomass power to accommodate the capacity of the various products of the Group in the future and distribution of electricity to generate the maximum return to the shareholders of the Company, the Company is considering further industrial by-products to increase revenue and to make the business sustainability by studying the investment plan of ethanol including the technology, which is in the process of preparing the report of Environmental Impact Assessment (EIA) as well as other products such as yeast.

Personnel Resource Goals The Company's personnel resources are crucial in the Company development. The Company must focus on all stages that related to both in terms of personnel to be proper to the job with regard to the process of recruiting staff from internal and outside the organization with the ability to appropriate positions and regularly continue monitor and evaluate of performance in accordance with the standards specified by the Company and retain the proper personnel. The task of personnel development is to increase the capacity and potential employees. The Company has set up a process for teaching and training as appropriate for each line of work comprehensively. Establishes guidelines assignments and result reports could lead to operational skills. Moreover, the transfer process and learning within the organization will make a concrete response to the expansion of business and industry competition more effectively.

Short-term Goal The Company aims to develop sugarcane production in the next 2-3 years by promoting the expansion of sugarcane plantations up to 250,000 Rai to produce more than 3 million tons of sugarcane along with maintaining quality standards for the highest yield. The Company plans to produce and sell refined sugar to add value and supporting increasing sugar quantity by emphasizing on exporting to industrial factory which is now in process of the information study for appropriate technology to produce quality sugar to the consumers. For the Biomass Power Energy Business, the Company is applying for an electric power plants license of the third power plant, which is capacity

There are company regulations and " business ethics and ethical conduct of the management and employees. " to respect the stakeholders as well as every personnel in the organization realize its social responsibility and has been involved in such activities.

12 Annual Report 2015

Buriram Sugar Public Company Limited

Managing with virtue and good governance Goal 1. Operating with transparency The Company sets operating plan and discloses important information based on appropriate criteria to create fairness and promote equality between shareholders. The Company provides audit system by independent internal and external auditor for fairness and transparency.

3. Promote Health and Safety Since health and safety of stakeholders of the Company is important, the Company operates business in conformance to law related to health and safety strictly and aims to improve quality level of the Company from production to distribution. The Company provides production system inspection continuously to ensure confidence of customer on quality of products and factory operation system monitoring for safety of the Companyâ&#x20AC;&#x2122;s employee.

2. Social development and support The Company firmly believes that business development of the Company must be carried out together with social development. The Company has prepared projects for social development by donating and encourage the community to raise the well-being of society. This is the mission of the Company for example of community support such as promoting Sokdoo hand-woven mats of Sokdoo community and the Kubon hand-woven red-footed silk of Kubon community by strengthening the activities of the community and manage educational activities to develop and add value to their products, as well as purchase those from the community to be made for the Company to deliver as presents. As well as promote the unemployed in Hin Lek Fai District. Along with community took part in environmental conservation for example the Green Area for Queen Sirikit was the tree planting in urban areas around the plant, by such activities, it was a collaboration between the companies with local government agencies and the surrounding community. The Company also recognizes the balance of aquatic ecosystems by releasing fish into the river which can also help to improve the well-being of the community as well.

13 Annual Report 2015

Important Background, Change, and Development Buriram Sugar Public Co., Ltd. originally Sahathairungruang Sugar Co., Ltd. (1963) (transfer business from Sahathairungruang Sugar factory limited partnership) registered and established on December 20, 1963 with 2 million Baht registered capital to operate sugar factory business in Buriram. The significant events and developments in the past are as follows: Year

Major events

1963

• Sahathairungruang Sugar Co., Ltd. was established, with 2 million Baht registered capital, to produce raw sugar. The crushing capacity at that time was 3,003 Tons Cane per Day (TCD). Major shareholder groups were Mr. Vichien Tangtongwechakit group, Mr. Somchai Siripanumat group, and Mr. Pichai Lianggobgij group.

1980

• The Company increased its registered paid-in capital to 15 million Baht.

1986

• Mr. Somchai Siripanumat group and Mr. Pichai Lianggobgij group sold all shares to Tangtongwechakit family group and changed the Company name to Buriram Sugar Co., Ltd. to conduct raw sugar and white sugar manufacturing business under “Double Keys” brand.

1990

• Received approval to expand the factory 2nd time in October 10, 1990. The capacity increased to 7,700 TCD.

1991-1994

• Continuously, increased its registered paid-in capital to 200 million Baht. • Received approval to increase the capacity to 8,991 TCD without increased equipment horsepower in October 1994

1996

• Established Buriram Sugarcane Research and Development Co., Ltd. (BRD) to support academic aspect and cane management to stabilize agricultural products and improve life quality of farmers. • Received approval to increase the capacity to 12,000 TCD without increased equipment horse power in February 1996

1997

• The Company started facing financial problems due to national economic crisis.

2001

• BRD started using MIS (Management Information System) and GIS (Geographic Information System) to manage operation for the first time in July, 2001

2003

• Established Buriram Sugar Factory Co., Ltd. (BSF) to conduct sugar trade business.

2005

• Established Buriram Energy Co., Ltd. (BEC) for support energy business in the future. • The Company started debt restructuring and entered business rehabilitation plan. 14 Annual Report 2015

Buriram Sugar Public Company Limited

Year

Major events

2009

• Acquire approval to increase its capacity from 12,000 TCD to 17,000 TCD in September, 2009. • BRD used drip irrigation system for the first time to regulate appropriate amount of water supply to sugarcane plot of member farmers for maximizing yield. • BRD started using online plot system on October 1, 2009, to survey and monitor sugarcane plot of member farmers.

2010

• Buriram Sugar Co., Ltd. made a future contract to sell its assets and business licenses to Buriram Sugar Factory Co., Ltd. in conformance to the business rehabilitation plan which has affected the Company as follows: - BRR has transferred its employees in department of production, procurement, marketing, and loan to BSF and its employees in department of material procurement, as well as fertilizer, medicine, and equipment loan to BRD for efficiency in managing personnel and experts. The department of operation and support (except department of loan) are under management of the Company. The main reason to firstly transfer personnel to the subsidiaries because the Company has not received approval to transfer the licenses from the Office of the Cane and Sugar Board. Since, period of cane crushed was near, the Company had to transfer personnel first to be able to operate work uninterruptedly. - BRR leaved the business rehabilitation plan

2011

• BRR sold its assets as well as sugar manufacturing and distribution license and factory business license to BSF. • BRR changed its operating business to Holding company while BSF operates sugar manufacturing and distributing business. • BEC have had equipped capacity 9.9 MW and made a trading contract with PEA amounted 8 MW and distributed remaining 1.9 MW to use in the factory and receive Investment Promotion Card no.2003(1)/2554 • Established Buriram Key Brand Fertilizer Co., Ltd. (KBF) to conduct organic fertilizer production and distribution business. • Established Buriram Power Co., Ltd. (BPC) for support expansion of biomass electric energy business due to expansion of amount of cane sent to crush which increase the amount of bagasse correspondingly. BPC have had equipped capacity 9.9 MW and made a trading contract with PEA

2012

• BRR increased its registered paid-in capital to 320 million Baht. • BEC started distributing electricity to PEA in May, 2012. • KBF stated production and distribution of organic fertilizer and had production capacity 30,000 tons per annum • BRR has participated in “New share, proud of province” project, a project of the Securities and Exchange Commission, which allow the Company to gain several privileges, for example, capital market workshop, advise from related organization, plague of honor, etc. 15 Annual Report 2015

Year

Major events

2013

• Buriram Sugar Co., Ltd. has converted to Buriram Sugar Public Co., Ltd. • BRR has increased its registered capital to 676,750,000 Baht to support IPO which consists of - Capital increase ordinary shares amounted 180,800,000 shares offered to existing shareholders at specified value price - Capital increase ordinary shares amounted not exceeding 6,767,500 shares offered to directors, executives, and employees at 2.70 Baht per share - Capital increase ordinary shares amounted not exceeding 169,182,500 shares offered to public • BEC participated in “Thai power love Thai energy” broadcast on Thai News Network on July 22, 2013. • BRD had more 872 farmers and own more 8,153.92 Rai of cane growing area in production year 2012/2013 totaled 7,133 farmers and 129,516.73 Rai of cane growing area. BRD finished creating UAV for cane farm survey and initialized flight in January 2013. The UAV operating time is 20 minutes at altitude 300 meters.

2014

• BSF increased its capacity to 17,000 TCD • BEC participated in “Electalon Passion Life” broadcast on Royal Thai Army Television station on August 4, 2014 • BRD had more 2,754 farmers and own more 38,857.92 Rai of cane growing area in production year 2013/2014 totaled 9,877 farmers and 168,374.65 Rai of cane growing area. • BRR has registered in The Stock Exchange of Thailand in November 6, 2014.

2015

• Established Buriram Agro Energy Co., Ltd. (BAE), which is held 99.99 per cent of shareholding by BRR. The objectives are produce and sell ethanol. Recently is yet to start operations. • Established Buriram Power Plus Co., Ltd. (BPP) for producing biomass power. Currently, there has not started business operation because there is asking for license to produce electricity from the Energy Regulatory Commission (ERC). • Established Buriram Super Power Co., Ltd. (BSP) which is held 99.99 per cent of shareholding by BEC for supporting the operation of the energy in the future. Currently, there has not started business operation. • The resolution of Extraordinary General Meeting of Shareholders No. 1/2015 approved the issuance and offering of debentures of 2,000 million baht to expand production capacity to 23,000 cane tons per day and / or general working capital of the Company. • End of the year 2015, there was approved by the Office of the Cane and Sugar Board to set 2 sugar factories in the area of Chamni district, Buriram province and Nonnarai district, Surin Province with production capacity of 20,000 cane tons per day of each factory.

16 Annual Report 2015

Buriram Sugar Public Company Limited

Shareholding Structure of the Company group The Company is holding company consisted of 8 subsidiaries, 5 operational companies and 3 companies that have still not operated, as follows: Nature of Business regarding definition of the SEC

Registered Capital (Million Baht)

Investment proportion (%)

1,050.00

99.90

Manufacture and distribute sugar (core business)

Company that conduct core business

80.00* (74.00)**

Buriram Energy Co., Ltd.

135.60

99.99

Biomass power plant

Subsidiary

3.18* (7.00)**

Buriram Power Co., Ltd.***

170.00

99.99

Biomass power plant

Subsidiary

3.32* (10.00)** (Started to operate in quarter 2 of year 2015

Buriram Power Plus Co., Ltd.***

10.00

99.99

Biomass power plant (in process to ask for ERC***** approval on the energy industry license)

Subsidiary

N.A.**** (Currently, there has not started business operation)

Buriram Super Power Co., Ltd.***

5.00

99.99

Biomass power plant (To support future project of biomass electricity generation)

Subsidiary

N.A.**** (Currently, there has not started business operation)

Key Brand Fertilizer Co., Ltd.

15.00

99.99

Produce and distribute organic fertilizer

Subsidiary

8.81* (2.00)**

Buriram Agro Energy Co., Ltd.

10.00

99.99

Produce and distribute ethanol (in process to do EIA report)

Subsidiary

N.A.**** (Currently, there has not started business operation)

70.88

99.99

Research and development to improve efficiency of cane growing and caring

Subsidiary

4.69* (7.00)**

Name of Company

Nature of Business

Size of Subsidiary to the Holding Company*

Sugar Business Buriram Sugar Factory Co., Ltd.

Byproduct Business

Support Business Buriram Sugarcane Research and Development Co., Ltd.

17 Annual Report 2015

Remark : * **

Sizes of Subsidiary to the Holding Company are calculated using revenue of subsidiaryâ&#x20AC;&#x2122;s core business divided by 2015 total revenue instead of categorize by asset size, since the Company believes that revenue method capable to show operating performance and return from investment of subsidiaries more accurately than asset method. Sizes of Subsidiary to the Holding Company calculated using asset criteria by divide total asset of subsidiary after deducted connected transaction with total asset of the Holding Company at the end of 2015 *** To hold the shares by Buriram Energy Co., Ltd. **** In the year 2015, the subsidiary has not started business operation. Therefore it is unable to calculate the size of subsidiary for the Holding Company. ***** ERC is Energy Regulatory Commission

Subsidiary Structure of Buriram Sugar Public Company Limited

Buriram Sugar Public Company Limited

99.90%

99.99%

Buriram Agro Energy Key Brand Fertilizer Buriram Sugar Factory Buriram Sugarcane Research Buriram Energy Co., Ltd. (Biomass Power Co., Ltd. Co., Ltd. and Development Co., Ltd Co., Ltd. Plant 9.9 MW) (Organic Fertilizer Business) (Ethanol Business) (Promote cane growing) (Sugar Business)

99.99%

Buriram Power Co., Ltd. (Biomass Power Plant 9.9MW)

Buriram Power Plus Co., Ltd. (Biomass Power Plant 9.9MW)

99.99%

Buriram Super Power Co., Ltd. (Power Plant)

Relationship of major shareholders with the business group -None-

18 Annual Report 2015

Buriram Sugar Public Company Limited

Nature of Business The Companyâ&#x20AC;&#x2122;s revenue structure

Revenue structure of the Company and its subsidiaries are as follows: Company and Subsidiaries

2013

2014

2015

Million Baht

1. Revenue from sugar and molasses sales 1.1Revenue from domestic brown sugar sales

BSF

886.64

22.25

908.37

22.97

961.78

22.39

1.2 Revenue from international raw sugar sales

BSF

2,188.11

53.42

2,129.35

53.85

2,110.52

49.13

1.3 Revenue from domestic molasses sales

BSF

293.59

7.32

290.32

7.34

358.09

8.33

3,368.34

82.66

3,328.04

84.17

3,430.39

79.85

Total revenue from sugar and molasses sales 2. Revenue from byproduct business 2.1 Revenue from electricity sales

BEC,BPC

132.62

3.31

182.53

4.62

279.00

6.49

2.2 Revenue from fertilizer sales

KBF

275.13

6.86

285.04

7.21

378.30

8.81

BSF,BRD

202.78

6.22

124.71

3.15

138.96

3.23

610.53

16.39

592.28

14.98

796.26

18.53

BRR,BSF, BRD,BEC,BPC

29.93

0.75

23.92

0.60

63.26

1.47

BSF

(24.24)

(0.60)

9.79

0.25

6.12

0.14

3,984.56

100.00

3,954.03

100.00

4,295.85

100.00

2.3 Revenue from other sales Total revenue from byproduct sales 3. Other revenues * 4. Revenus (loss) on foreign exchange rate Total revenue

Remark *Other revenues are profit from asset selling, bad debt recovery, interest received, etc.

19 Annual Report 2015

Manufacture and distribute sugar business: Operated by BSF Natures of products and services BSF was awarded ISO 9001: 2008 certificate in 2001 for quality management, “QMS” (“Quality Management System”) which ensures customer satisfaction, “GMP“ (“Good Manufacturing Practice”), HACCP which help managing hazard analysis and critical control points which certificates for our good quality sugar, and Halal which ensure product permission for Muslims. Sugar produced by BSF can be divided into two categories according to their type and level of purity which are: raw sugar and brown sugar. A quantity of sugar production is shown below. 2013

2014

2015

Ton

Raw Sugar

142,825.69

75.43

152,947.00

76.00

167,499.00

76.68

Brown Sugar

46,511.23

24.57

48,265.00

24.00

50,916.00

23.32

Total

189,336.92

100.00

201,212.00

100.00

218,415.00

100.00

1. Raw Sugar

2. Brown Sugar

Raw sugar is the sugar from the initial production process by boiling and crystallizing sugarcane. Raw sugar has a color value higher than 1,500 ICUMSA. It is dark brown, and has a high dirt index and a low purity index. Raw sugar crystal tends to stick together and not crumbly. This type of sugar cannot be consumed until it is refined or purified, turning into white sugar or refined sugar. Transfer is done in bulk without the use of sacks to export.

Brown sugar is purified sugar without processing its color value; so it becomes gold with the color value lower than 1,000 ICUMSA. The Company manufactures brown sugar with 401-1,000 ICUMSA (the 3rd grade), 0.1% moisture to sell to distributors in community and nearby areas in Buriram, and up-country areas. The variety of package is provided for customer satisfaction as follows: (Quality control results)

High polarization sugar is partly purified raw sugar. High pol sugar has a color value between 1,000 and 1,500 ICUMSA. It is yellow blend with brown. It can be consumed without any further process needed. To distribute, BSF packs high polarization sugar in sacks before export to international market.

20 Annual Report 2015

1kg per package 50kg per package 1kg per package in 50kg sack 500g per package 500g per package in 25kg sack 1kg per package in 25kg sack

Buriram Sugar Public Company Limited - Filter cake Sugarcane filter cake (press mud) is a byproduct from sugarcane juice filtration. Composing of various nutrients, e.g. protein and other minerals, the layer of filter cake protects the soil against erosion, adjusts pH, improves water retention, ameliorates physical and biological soil properties, and is an important source of plant nutrients. Filter cake can also be used as animal food or biochemical gas production.

Aside from sugar from sugar manufacturing, 14,000 tons of sugarcane, which BSF can process to 1,500 tons of sugar, also provides other byproducts which are 600 tons of molasses, 3,500 tons of bagasse, and 600 tons of filter cake. The physical characteristics and utility of byproducts are as follows: - Molasses Byproduct of sugar production, molasses is dark and sweet syrup left over from the centrifuge process. Most of molasses composition is uncrystallised sucrose. A ton of sugarcane processed in sugar factories provides 40-45 kilograms of molasses as a byproduct.

BSF currently distributes its filter cake to Key Brand Fertilizer Co., Ltd. (KBF) which is one of the subsidiary companies of BRR. KBF then use the filter cake as a main component to produce organic fertilizer and sell it to BRD to support farmers in the plantation area by improving soil fertility and increasing amount of sugarcane per area.

Molasses can be used as food and beverage production material like liquor, yeast, MSG, vinegar and sauce, including organic fertilizer and ethanol production as well.

Moreover, steam from sugar production can be utilized to propel machineries and generate electricity. BSF has an electric generation capacity of 12 MW and currently generates 10 MW for usage in the sugar factory. The additional generation helps reduce electricity cost and manage existed resource sustainably.

- Bagasses Bagasse is the remained fibrous residues after sugarcane stalks are crushed to extract their juice. It contains carbon, hydrogen, oxygen, and nitrogen and can be used as an effective biofuel for electricity generation after being dry in the sun. Aside from biofuel, it can also be used for making paper, fiber board, particle board, or cellulose fibers production. Currently, Buriram Energy Co., Ltd. (BEC) and Buriram Power Co., Ltd. (BPC) are both of subsidiary companies of BRR, conducts biomass electricity generation business with capacity up to 9.9 megawatts of each plant, using bagasse as a biofuel. Surplus electricity amount 8 megawatts of each plant are sold to Provincial Electricity Authority and remaining 1.9 megawatts of each plant are supplied to the factory. The remaining bagasse is sold to other biomass power plants.

21 Annual Report 2015

Market and Competition

- Have an excellent understanding of cane types and varieties suitable for plantation area and appropriate time to harvest cane, for example, cane harvested at the end of monsoon season that are highest in quantity and quality is planted at the end of October to January. Proper age of the cane is 12 to 13 months. While cane harvested at the beginning of monsoon season has disadvantages that are: low products and quality, high cost, lots of weeds, and risk from flood. And stump cane which is cane that grow from cut cane cost lower and may provide more or less products compare to new-grown cane depended on caring.

Competitive Strategy

Accumulating experience and expertise more than 50 years, the Company has developed its sugar business consistently via inventive activities such as new research and development on sugarcane variety, tool and machinery used in sugar production business, sugarcane cultivation extension, and sugarcane plantation management system. The execution ensures that the Company operates its business in accordance with its own vision which is “Excellence in knowledge and management to ensure raw materials security and better living conditions for cane growers.”. The competitive strategies that the Company has utilized are as follows:

- Improve soil and fertilizer constantly via collaboration with Suranaree University of Technology, Nakhon Ratchasima to develop fertilizer composition that suitable for every sugarcane plot which will increase products and reduce cost of farmers.

• Suitability of sugarcane plantation area From statistical data of sugarcane growing area in 2015/ 2016, the northeastern region of Thailand produced the highest quantity of sugarcane to factories thanks to rainfall and climate suitable for cane growing. From 2015/2016 report, Buriram sugarcane growing area covered 200,941 Rai (ranked 8th compared to other provinces in the northeastern region) and produced cane 11.09 tons/rai.

- Control spread of disease and insect by natural means, for example, breeding Trichogrammas to control stem borers, breeding green fungus to control stem boring grubs, and etc. to ensure safety of raw material. - Have cane growing promotion department to ensure required quantity and quality of cane. Cane growing will be supported closely by promoters dispatched to every area totaled 10 branch offices. Each promoter is responsible for 30,000-50,000 tons of cane or 200-250 farmers by using online information technology, geographic information system, and GPS to survey and manage cane growing area systematically.

• Strength of Research and Development (Operated by Buriram Sugarcane Research and Development Co., Ltd.) From the notion “Sugar is made in farm. The factory is only a cane extractor”; hence Buriram Sugarcane Research & Development Co., Ltd. or BRD which is responsible for promotion of sugarcane growing is essential for the Company’s business. Distinctive points of BRD are:

- Promote use of water system to increase cane products which results in increasing time of cane growing outside ordinary season as well as distribution of fertilizer via the water system. By utilizing the system, the production can increase from normally 10-20 tons/rai to 30-40 tons/rai. 22

Annual Report 2015

Buriram Sugar Public Company Limited

- Organize workshop to create understanding of appropriate production technology and divide farmers by success level of cane growing to simplify development. farm.

- Arrange study trip both domestic and international to develop and apply experience suitable for each farmerâ&#x20AC;&#x2122;s

- Utilize strong farmer group system to ensure planning, controlling, and monitoring cane management systematically and timely with suitable equipments and sufficient services. â&#x20AC;˘ Raw material procurement capability and quality material Because the Company recognizes the importance of cane farmers, the Company concentrates on the academic development and loan for cane farmers which are well-received. The participated cane farmers increase gradually every year from 5,600 farmers in 2010 to 12,500 farmers in 2015 and cane growing area is increase from 118,000 Rai in 2010 to 200,000 Rai in 2015. Most of cane farmers are skillful in cane growing, proficient in occupation, and ready to develop themselves together with the factory which resulted in an increase of an amount of sugarcane crushed. The Company manages its sugarcane procurement via contract farming. By providing fund, fertilizer, chemical, sugarcane variety, or other agricultural machinery, the Company is able to secure future sugarcane ownership in 50 kilometers area around the factory before cane crushing season. Additionally, the Company aims to keep good relationship with farmers by sending 10 teams of agricultural extension officers to make a field research at each plot, recommend suitable sugarcane variety, manage soil and water condition, and help take care of each cultivation period from growing to harvest and distribution. The actions make certain that farmers can produce quality sugarcane, gain more crop yield, receive steady revenue, and become respectable alliance with the Company. Through indicated management, BSF has never faced scarcity of sugarcane in cane crushing season. Moreover, zoning among sugar factories in the areas of Buriram, Surin, and Nakhon Ratchasima has been established to prevent purchasing competition between the sugar factories.

23 Annual Report 2015

Table shown cane growing area, amount of cane crushed, and number of contractor which receive support 2015/16

2010/11

2011/12

2012/13

2013/14

2014/15

Growing area (Rai)

118,000

107,900

129,000

168,000

176,000

189,000

Amount of Cane crushed (million ton)

1.58

1.48

1.75

1.77

1.95

2.20

Number of contractor (person)

5,600

6,000

9,000

15,000

15,500

16,000

(estimated)

â&#x20AC;˘ Production efficiency and sweet quality The Company places importance from area selection, cane variety preparation, soil analysis, growing and caring, and quality harvest (proper age, variety, and freshness). The caring of cane from receiving support until growth cause farmer to be able to produce high quality cane. BSF is capable of producing sugar more efficiently compared to industry average as shown below: Propotion of sugar per ton cane

(kg per 1 ton cane) 2015/16

2010/11

2011/12

2012/13

2013/14

2014/15

BSF

101.91

109.55

105.00

117.66

118.60

119.00

Industry average

101.17

101.33

100.28

100.93

106.64

N.A.

(estimated)

Aside from fine cane, the Company also focuses on improving efficiency of machines which are controlled by computer system, from transport cane for crushing to sugar packing. The Company also inspects quality of each process and appoints international food quality inspection firms to inspect quality of sugar in the last process before distribution. Additionally, cumulative experience and expertise more than 50 years make the Company capable to produce high-class sugar.

24 Annual Report 2015

Buriram Sugar Public Company Limited • Resourceful sugarcane farm management BRD use online information system and satellite system to survey cane growing area. The information can be accessed through mobile phone or website including all cane growing activities and plot management, from plot area measuring to queueing which make promotion work correct and fast as well as receive fine cane. The Company’s promoters also monitor and solve farmers’ problem to help farmers gain more product at required quality.

• Create satisfaction and maintain good relationship with customers The Company places importance on customer satisfaction via surveying sugar market in each area, studying popularity of each sugar brand, researching customer behavior and demand in each area, being open for suggestion and complain, as well as provide satisfaction questionnaire every 3 months to improve, amend, and develop products and services continuously to ensure that customers can have confidence and trust in the Company’s efficient production processes and services.

Nature of customers and distribution channel

BSF distributes sugar to both domestic and international customers, brown sugar for domestic distribution and primarily raw sugar for international market. In the previous 4 years, proportions of revenues from domestic and international market are as follows: Revenues from Domestic and International market 2013

2014

2015

Million Baht

886.64

28.84

908.37

29.90

961.78

31.30

Raw sugar

2,188.11

71.16

2,129.35

70.10

2,110.52

68.70

total

3,074.75

100.00

3,037.72

100.00

3,072.30

100.00

Domestic Brown sugar International

25 Annual Report 2015

Target customer and distribution channel 1. Domestic sales (Quota A) BSF distributes brown sugar to domestic customers via distributor or sells directly to consumers in local community and nearby areas in Buriram and other upcountry province under “Double Key” brand. Buyers obtain products in front of the factory. Distributors are likely to buy 50kg sugar from BSF to resell to consumers. Since this sugar distribution channel is very competitive, BSF’s sales department monitors sugar demand constantly, conducts customer satisfaction surveys every 3 months, and initiate sales promotion to maintain market share for this customer group. Distributor may request product 3-4 days in advance or receive orders from customer daily. Thanks to strong relationship between BSF and its customers, current customers are long-time customers who have confidence in quality and on-time delivery of the products. To expand sales and customer base, BSF try to reach new customers who have potential to efficiently obtain and distribute products in each area via market survey in various provinces to seek major distributors continuously. Following table shown ratio of domestic distribution channels 2013

2014

2015

Million Baht

Distributor

886.64

100.00

908.37

100.00

961.78

100.00

Total revenue

886.64

100.00

908.37

100.00

961.78

100.00

2. International sugar trade (Quota B and C) In sugar export, Quota B is the raw sugar in the amount that The Office of the Cane and Sugar Board decides and exports via Thai Cane and Sugar Co., Ltd. Quota C is the remaining sugar from Quota A and B by which BSF can export through seven authorized exporting companies. The Company associated with other 19 sugar factories found The Thai Sugar Trading Co., Ltd. to be a representative for sugar export of BSF. The Thai Sugar Trading Co., Ltd. has responsibilities as follows: - The Thai Sugar Trading Co., Ltd. delivers products, provided necessary documents for export and Customs procedures, as well as collects money from BSF’s customer. - The Thai Sugar Trading Co., Ltd. signs loan contract for BSF export with a commercial bank on behalf of The Thai Sugar Trading Co., Ltd. for financial support. - The Thai Sugar Trading Co., Ltd. will transfer amount of money received from export loan with the commercial bank to BSF. BSF then issues promissory note to The Thai Sugar Trading Co., Ltd. as evidence on transaction. The interest rate that BSF pay to The Thai Sugar Trading Co., Ltd. in the promissory note is same as interest rate that The Thai Sugar Trading Co., Ltd. pay to the commercial bank. 26 Annual Report 2015

Buriram Sugar Public Company Limited

For international trading of Quota C, BSF will make a contract for each transaction. A contract last approximately 3 months and specify a quantity of sugar required to deliver without specific price. The price of products delivered will be set later based on world market price at delivering date. Most customers of BSF are large international wholesaler like Bunge Louis Dreyfus Sucden, Olam Wilmar, and etc. who have good financial position. The inspection of customers’ financial position will be performed through The Thai Sugar Trading Co., Ltd.

Pricing policy 1.Domestic sales (Quota A) Two Thai ministries are responsible for determining domestic sugar price. Ministry of Industry by Office of The Cane and Sugar Board set sugar price for selling at factories’ front while Ministry of Commerce by Central Board on Prices of Goods and Services set sugar price for retail. The announcement of Central Board on Prices of Goods and Services on January 26, 2015 determine sugar price for each delivering place and selling area as follows: 1.1 Wholesale price (including sac) delivered at factory every area of Thailand Refined sugar per sac (net sugar quantity 50kg)

1,070.00 Baht

White sugar grade 1 and 2 per sac (net sugar quantity 50kg)

1,016.50 Baht

White sugar grade 3 per sac (net sugar quantity 50kg)

1,016.50 Baht

1.2 Wholesale price (including sac and distributution since 6 sacs or 300 kgs.) delivered at wholesellers’ store every area of Thailand Refined sugar per sac (net sugar quantity 50kg)

1,104.75 Baht

White sugar grade 1 and 2 per sac (net sugar quantity 50kg)

1,051.25 Baht

White sugar grade 3 per sac (net sugar quantity 50kg)

1,038.00 Baht

1.3 Retail price in Bangkok, Nonthaburi, Pathum Thani, Samut Prakan, and Samut Sakhon Refined sugar per kg (net sugar quantity 1kg)

22.85 Baht

White sugar grade 1 and 2 per kg (net sugar quantity 1kg)

21.85 Baht

White sugar grade 3 (brown sugar) per kg (net sugar quantity 1kg

21.35 Baht

Source : Office of The Cane and Sugar Board 27 Annual Report 2015

If there’s separation of sugar to 1kg package, price of the package can not exceed 0.70 Baht per kg and 0.75 Baht per kg for wholesale and retail correspondingly, for example, selling price of refined sugar in 1kg package in Bangkok equal to 22.85+0.75 = 23.60 Baht and 23.50 Baht in other areas. 2. International sales (Quota B and C) Selling price of Quota B International sugar sales volume of Quota B is determined by The Office of the Cane and Sugar Board and Thai Cane and Sugar Co., Ltd. is the organization that decide export sugar price. The Company also sets policy on sales proportion, selling price, and exchange rate approximated to Thai Cane and Sugar Co., Ltd. to reduce risk from fluctuating of sugar price and exchange rate. Selling price of Quota C The Company set policy on international sugar selling price based on world market, for example, New York Sugar No.11 future price and London Sugar No.5 future price.

Sugar Industry’s Market Situation

1) Overall picture of World’s Sugar Industry 1.1) World Sugar Supply and Demand Unit: Million Ton1 World Sugar’s Production Consumption and Stock (October – September) 2007/08

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/162

Production

166.520

151.615

158.451

165.201

174.575

184.098

181.347

181.729

176.903

Consumption

161.042

161.968

162.567

162.774

168.425

172.461

175.997

178.851

181.658

Stock

70.517

71.533

60.048

55.951

57.130

63.684

72.787

77.491

78.444

Source: World Sugar Balances 2006-07 – 2015/16 F.O. Licth’s International Sugar and Sweetener Report, 05.02.2016 Remarks: 1. Metric ton raw value 2. Estimated

2014/15 crop year was volatile due to the change of weather condition. It had an effect on sugar production all over the world. Meanwhile, many research offices announced that the world is starting to enter deficit era where demand of sugar is higher than supply of around 500,000 tons. It is also predicted that the trend will be higher in 2015/2016 crop year. However, the amount of stock in countries with high consumption of sugar such as China and India is still in a high level. Therefore, the price of sugar has not become higher.

28 Annual Report 2015

Buriram Sugar Public Company Limited 1.2) World Sugar Industry Unit: Million Ton1 Big Players

Sugar Production (October - September) 2011/12

2012/13

2013/14

2014/15

2015/162

Brazil

35.2

41.1

39.5

34.7

38.8

India

28.6

27.3

26.5

29.0

26.0

China

12.5

14.2

14.4

11.4

9.2

European Union (EU)

19.0

17.4

17.1

19.0

14.9

USA

7.7

8.1

7.6

7.8

8.1

Thai

10.5

10.3

11.6

11.3

10.3

Australia

3.6

5.0

4.0

5.1

4.8

Source: 1. World Sugar Balances 2006-07 – 2015/16 F.O. Licth’s International Sugar and Sweetener Report, 05.02.2016 2. India Sugar Millers Association (ISMA) 3. Sucden 4. Office of the Cane and Sugar Board, Ministry of Industry Thailand Remark: 1. Metric ton raw value 2. Estimated

Important production countries have less sugar production because of the effect from El Nino phenomenon, especially in India and China. It is, therefore, expected that in 2016, the world will short of sugar at approximately 4 – 5 million tons. In China’s alone, sugar production significantly dropped due to the problems of drought and decreasing cultivated area. 1.3) World’s Key Sugar Consumers Unit: Million Ton1 Key Sugar Consumers

Consumption (October – September) 2011/12

2012/13

2013/14

2014/15

2015/162

India

24.5

25.3

26.2

27.2

27.7

European – Union (EU)

19.0

19.2

19.3

China

15.3

15.7

16.1

16.6

17.1

Brazil

12.6

12.7

12.6

12.4

USA

10.2

10.6

11.1

10.9

Indonesia

5.6

5.9

6.3

6.5

6.7

Source: 1. World Sugar Balances 2006-07 – 2015/16 F.O. Licth’s International Sugar and Sweetener Report, 05.02.2016 2. Indian Sugar Mills Association (ISMA) 3. Office of the Cane and Sugar Board, Ministry of Industry Thailand Remarks: 1. Metric ton raw value 2. Estimated 29 Annual Report 2015

Due to the growing rates of economy and population, India and China are countries that have very high sugar consumption ratio. The trend of sugar consumption in the world has been continuously growing at 2% per year. Asia continent is the area that has the highest shortage. In the present time, the world consumes around 180 million tons of sugar a yearly and it is predicted that the rate will increase to 200 million tons in the next 3 – 4 years. Asia and Africa have high level of growth while America and Europe has a stable growth. This is, therefore, an important opportunity for Thailand as Asia’s No. 1 of sugar exporter to play a role as a sugar manufacturer.

1.4) World’s Key Sugar Exporters Unit: Million Ton1 Key Sugar Exporter

Exports (October – September) 2011/12

2012/13

2013/14

2014/15

2015/162

Brazil

29.6

24.7

23.7

25.4

Thai

7.2

7.3

7.9

Australia

2.6

3.1

3.2

3.6

Guatemala

1.7

1.8

2.5

2.2

India

3.8

2.7

2.6

Other Countries

23.1

24.1

24.7

24.6

24.9

Source: 1. World Sugar Balances 2006-07 – 2015/16 F.O. Licth’s International Sugar and Sweetener Report, 05.02.2016 2. Sucden 3. Office of the Cane and Sugar Board, Ministry of Industry Thailand Remarks: 1. Metric ton raw value 2. Estimated

Although Thai’s sugar export volume is 3 times behind Brazil, Thailand’s role in the world’s sugar market is increasingly significant according to the rising amount of exported sugar. However, the effect of climate change especially El Nino phenomenon is another important factor that affects the balance of the world’s sugar. Our company in 2015 has the total numbers of sugar export of 160,000 tons. The 5 most important markets are South Korea, Indonesia, Taiwan, Mozambique and China.

30 Annual Report 2015

Buriram Sugar Public Company Limited 1.5) World Important Sugar Importers Unit: Million Ton1 Sugar Importers

Imports (October – September) 2011/12

2012/13

2013/14

2014/15

2015/162

Indonesia

2.8

4.2

3.8

3.1

4.2

USA

3.3

2.9

3.2

3.3

2.9

China

4.3

3.7

4.5

United Arab Emirate

2.1

2.2

2.5

1.9

2.2

Malaysia

1.9

Others

46.4

49.4

48.3

47.7

48.4

Source: 1. World Sugar Balances 2006-07 – 2015/16 F.O. Licth’s International Sugar and Sweetener Report, 05.02.2016 2. Office of the Cane and Sugar Board, Ministry of Industry Thailand Remarks: 1. Metric Ton Raw Value 2. Estimated

From the effect of climate change and the entry into force of ASEAN Economic Community (AEC), as well as the enforcement of commitments under ASEAN Trade in Goods Agreement (ATIGA), Thailand stands to gain from the opening up of market access for sugar. In 2016, Indonesia’s sugar imported tariff is lower for ASEAN sugar origin, therefore Thai sugar has comparative advantage over other competitors outside the group. Analysis 2015 had high level of fluctuation including a drop of world sugar price to the lowest point in 8 years on 24th August 2015 at the rate of 10.39 cent/pound and the price gradually rose to 15.58 cent/pound on 3rd December 2015. The main reasons that affect price movement consist of: 1) It was the first year that the world's sugar production is lower than demand after 5 consecutive years of world’s sugar surplus. However, sugar stock in some manufacturing countries and major importers is still high, which makes world sugar price still fluctuated by the role of funds and speculators. 2) Brazil economy, which is the world’s number 1 sugar manufacturer and exporter, was declining recently. The value of Real was down from 2.55 Real per one US dollar to the level of 4.20 Real per one US dollar in late September, 2015, more than 50% weakness, making Brazilian sugar more competitive over sugar from other origins.

31 Annual Report 2015

Source: Bloomberg Business

3) The crude price in the world market has fallen continuously pressing the price of other commodities. 4) The recession or downturn of China economy is affecting the world economy. 5) The changes of the Earth's climate, especially the El Nino phenomenon, directly affect to all major sugar-producing countries like Brazil, China, India and Thailand. 6) The roles of the funds and the speculators. 7) Change of the economic policy of the major countries.

2) Thailand and World Sugar Market Thailand has long been Asia and ASEANâ&#x20AC;&#x2122;s number one sugar exporter. On the world scale, Thailand is second after Brazil. With its geographical location in Asia, the world biggest deficit region of around 10 million tons a year, Thailand has some advantage over its main rival, Brazil and Australia. Nonetheless, it has been forecasted that in 2020 gab between demand and supply will reach 15 million tons. This provides opportunity for Thai sugar exporters to fulfill the rising demand Although there are a lot of opportunities to produce sugar to meet the demand in Asiaâ&#x20AC;&#x2122;s market, Thailand still encounters many challenges such as the climate change, the fluctuation of the price that is effected by different factors, the shortage of irrigation system and the lack of research, etc.

32 Annual Report 2015

Buriram Sugar Public Company Limited

2.1) Thailand’s Sugar Export Destinations (January -December) Unit: Ton Countries

Export Volume 2014

2015

2016

2015

Indonesia

1,898,087

1,781,115

1,746,594

1,861,232

Japan

847,580

754,252

752,211

634,719

Cambodia

599,571

651,578

546,950

490,904

China

965,491

262,678

704,382

876,871

Malaysia

448,081

326,163

676,875

497,805

Others

2,723,936

2,785,941

2,894563

3,604,974

Total

7,482,746

6,561,727

7,321,575

7,966,505

Source: Office of the Cane and Sugar Board, Ministry of Industry Thailand

2.2 ) Sugar Price Record New York No. 11 Sugar Price on December 2014 – December 2015 Unit: Cent/Pond

Source: F.O. Lichts’ International Sugar & Sweetener Report, January 5, 2016, Vol. 148 No. 1

On February 2, 2011, New York No. 11 sugar price hit 36 cent/pound, the highest record in decade. Since the price hike, sugar producing nations had expanded their capacities and cane growers had also increased their cane acreages leading to big global surplus. As a result, the price gradually fall and touched 14 cent/pound in late 2014. However, several research houses have recently predicted that sugar demand is to set to exceed supply in 2016. World sugar will enter deficit period from next year and price is expected to rise accordingly. 33 Annual Report 2015

The sugar price was decreased as a result of the expansion of sugar cane cultivation area and sugar production capacity of the country's major manufacturers that cause oversupply in the market. While the demand of sugar consumption growth only 2% per year, however, during the year 2016, several research houses have recently predicted that sugar demand is to set to exceed supply and World sugar will enter deficit period from next year and price is expected to rise accordingly. After the sugar price decreased to the level of 10.13 cents per pound during the month of August 2015, it again changed the price up to 15.24 cents per pound in December 2015

for smooth transition to ASEAN Economic Community (AEC) in early 2016. As a more comprehensive legal instrument, ATIGA’s commitments and tariffs reduction framework are stricter than CEPT in order to prevent members, particularly the six original members from evade their obligations, while providing some flexibility for new members or CLMV. The opening up of markets under AFTA then ATIGA for Thailand, if succeed , would greatly benefit Thai cane growers and sugar industry as a whole rather than harmful. The objective of ASEAN trade liberalization is to create single production base for Asia in parallel with the building of social and cultural harmony among members. If ASEAN become a production base for food, beverage and other sugar related businesses, it will strengthen regional cane and sugar industry. Besides, extension businesses include bio-energy, bio-chemical and bio-plastic would add values and attract investment to ASEAN.

2.3) Thai Sugar Industry Commitments under FTAs As world No. 2 sugar exporter and its geographical proximity to Asia, the biggest sugar consuming region with approximately 10 million tons of sugar demand over supply, Thailand has some comparative advantages over its main rivals, namely Brazil and Australia. Besides, the entry into force of several bilateral, regional and multilateral free trade agreements, the Thai government has committed with others to liberalize as well as enhance its economic sector competitiveness, is the main mechanism for sugar markets expansion per se. Important FTAs include 2.3.1) ASEAN Economic Community (AEC) Established in 1992 by ASEAN’s head of states, ASEAN Free Trade Agreement (AFTA) was formed to enhance ASEAN members’ competitive advantage as an integrated production and market base. The main objective is to liberalize trade through the elimination of intra-regional tariffs and non-tariff barriers (NTBs) and the restructuring of customs duty to facilitate intra-ASEAN trade using Common Effective Preferential Tariff (CEPT) Agreement as a tool.

Under the obligation of ASEAN trade liberalization, cane growers and sugar mills have to enhance their efficiency to ensure their competitiveness. Cane growers need to understand the changing business environment in the region. They should focus their effort on cane growing development to reduce cost and increase yield in comparison to high standard sugar exporting nations-Brazil and Australia. Sugar mills have to upgrade their production standard to match their rivals in parallel with the effort to preserve national resources and environment. They both have to monitor the movement of sugar market and the progress of technology. Challenging factor for Thai’s cane and sugar industry is the need to restructure its sugar regime especially the domestic quota and price management in consistent with obligation under ATIGA. However, any changing policy must address the benefits of all concerned parties-consumers, cane growers and sugar mills.

In 2007, CEPT was reviewed and finally changed to ASEAN Trade in Goods Agreement (ATIGA) which entered into force in May 2014 with the aim to cover every aspect of trade issues to prepare ASEAN members 34

Annual Report 2015

Buriram Sugar Public Company Limited

Cane growers and sugar mills may also have to take risk from the fluctuation of world sugar price despite the fact that the chance of low sugar price barely exists due to Asian economic growth and strong sugar consumption demand. ASEAN Economic Community poses both opportunity and challenge to Thaiâ&#x20AC;&#x2122;s cane and sugar industry. As Asiaâ&#x20AC;&#x2122;s No. 1 and World No. 2 sugar exporter, the industry has to adjust to change to stay ahead of its competitors. 2.3.2) ASEAN-South Korea Free Trade Agreement The reduction of raw sugar tariffs under ASEAN-South Korea FTA benefits Thailand the most as South Korea is one of Asia major raw sugar importers. Each year, South Korea imports around 1.6 million tons of raw sugar and 500-20,000 tons of white sugar In the year 2016, the Republic of Korea imported sugar from Thailand with the total of 527,895 tons. The tax reduction for the raw sugar item will benefit Thailand over other competitor countries. 2.4) Domestic Sugar Industry Domestic sugar industry was governed by Cane and Sugar ACT 1984, the Cane and Sugar Board determines the quantity of sugar for the domestic distributor. In each year, they will estimate the domestic consumption and will regulate a quota for every plant to produce and distribute. Meanwhile, sugar retail price is to be determined by Ministry of Commerce according to Price of Goods and Services Act 1992. In 2014/15 crushing season, Thailand has 51 sugar mills with crushing capacity of 110 million tons/year. Over 11.3 million tons of sugar were produced during the crushing season starting from November to April. Thai Sugar Groups and Companies Group

No. of Factory

Sugar Production (Ton)

Share (%)

Mitr Phol

2,304,306

20.32

Thai Roong Ruang

1,595,595

14.07

KTIS

991,570

8.74

KSL

919,648

8.11

Wangkanai

565,676

4.99

Korach

645,006

5.69

Banpong

438,302

3.87

Erawan

641,393

5.66

Kumphawapi

407,521

3.59

Chonburi

539,306

4.76

Thai Sugar Mill

328,395

2.90

Mitr Kasetr Industry

250,458

2.21

BRR

231,408

2.04

Other

1,480,495

13.06

Total

11,339,085

100

Source: Thai Sugar Millers Corporation Limited (TSMC) 35 Annual Report 2015

By-Product Business Biomass Power Plant Business operated by BEC, BPC The quality of the products and services â&#x20AC;&#x201C; Biomass Power Plant Business Operated by BEC, BPC

Buriram Energy Company Limited (BEC) BEC has operated its business by producing biomass power, and the Company has installed the production capacity of 9.9 MW by using the bagasse as its fundamental fuel and can also use a cane leaf, chopped woods, and rice husk as the raw materials to produce the electricity. Besides, the Company also sells the electricity to the Provincial Electricity Authority (PEA) at a number of 8 MW and uses a 1.9 MW within the plant. The power plant is located in a nearby Buriram Sugar Factory in order that it is easy to bring the bagasse from the sugar production process to use as the fuel and comfortable to sell the electricity and steam to BSF.

Buriram Power Company Limited (BPC) BPC registered and operated its company in the year 2011. At present, the BEC has its authorized capital of 170 million baht. From this, the Company holds shares at 99.99% and runs the biomass power plant business. The Company claims or determines its capacity at 9.9 MW, and the Company can also use the cane leaves, chopped woods and rice husk as its raw materials in the electricity production process. That the power factory is located in the nearby location of the BEC Power Plant and Buriram Sugar Factory is to facilitate the bagasse transportation, which is the main fuel for producing the electricity. Another time, the Company can also sell its electricity to the Provincial Electricity Authority (PEA). With this, the BPC signs a contract of sales in buying the electricity with PEA. By this, PEA agrees to buy the electricity with the quantity of 8 MW. Decisively, BPC has begun to sell the electricity to PEA in April 2015. The details of the contract of sales that BEC and BPC did sign with the PEA are as follows: Company

A contract No. A date of singing the contract

Buriram Energy Company Limited

Burriam Power Company Limited

VSPP-PEA 044/2011

VSPP-PEA 008/2013

December 2011

4 April 2013

Capacity

The 8 megawatts of the maximum power quantity at 22,000 volts voltage level.

Period of Time

5 years and 5 years at a time continuously and automatically.

20 years from the date of the start of commercial supplier.

Price

The electricity rates sold to PEA are at the pressure level of 11-33 KVs in compliance with the declaration of the Electricity Generating Authority of Thailand combined with the Fuel Adjustment Charge (at the given time) (Ft), and it is expected to increase the buying power (Adder) at 0.3 baht per KW per hour for a period of 7 years from the date of the purchase and sale the electricity to the Electric Generating Authority of Thailand.

The power rates sold to the EGAT are in compliance with the statement of the Corporate Governance Committee on Energy on the issues: buying the renewable power (the sun power is not included) in the era of changing from Adder to Feed-in Tariff (FiT).

In addition, the Company has established two subsidiaries to run the biomass power production to support the expansion of the sugar business and the increase of the bagasse. In summary, the details are as follows: 36 Annual Report 2015

Buriram Sugar Public Company Limited Buriram Power Plus Company Limited (“BPP”) The Company has been registered in the year 2015 with its authorized capital of 10,000,000 baht with the full payment. Officially, the BEC holds shares at 99.99%. This company is established to implement biomass power production business by using bagasse as the primary fuel. Additionally, this is the 3rd power plant of the group of the by-products production. The Company, at present, does not yet operate its business because it is under the process asking for the permission from The REGULATORY GUIDELINES OF THE ENERGY REGULATORY COMMISSION (RGERC).

Buriram Superpower Company Limited (“BSP”) BSP is registered in the year 2015 with the authorized capital of 5,000,000 baht with its full payment. The BEC holds shares at 99.99%. This company is established to implement biomass power production business by using bagasse as the primary fuel. Also, this is the 4th power plant of the business circulation of the by-products production. The main objective of this running this company is to accommodate the growth of the biomass power plant business of the Company. At present, the business operation has not been started yet.

The Marketing and the Competition Situation The Competition Strategies With the lower production costs and efficient resource management, it makes the BEC and the BPC be able to produce the biomass power by using the bagasse, which is a by-product of the sugar production of the BSF. Consequently, one part of the power products manufactured from these two companies will be returned to use in the sugar mills, and another part will be sold to the Provincial Electricity Authority of Thailand (EGAT). This is one of the ways to benefit the bagasse, which is a by-product of BSF, and it is regarded as the effective resource management. What’s more, there is no payment for the freight of buying those raw materials from BSF. Another thing is that the power gained from the production process can be returned to use in the sugar factory. The Customer Features and Trading Channels BEC and BPC company produces and sells the biomass power with an installed capacity total 0f 7.8 megawatts. From this, the 16 megawatts of the electricity will be sold to the only one customer, namely, the Provincial Electricity Authority, following the contrast of sales dated on December 30, 2011, and April 4, 2013, while the remaining 3.8 megawatts will be stored for use within the Company group. The Pricing Policy The BEC and BPC have sold the electricity to the EGA following the declared price from the policy of the Small Power Plant Project under the price issue of the power sales. 37 Annual Report 2015

The Industry Situation and Competition The Ministry of Energy in cooperation with the Electricity Generating Authority of Thailand has considered the development plan of the country's electricity capacity of Thailand B.E. 2558-2579 (2015 – 2036) (PDP2015 plan) with an emphasis on enhancing the stability of the electrical system with the distribution of the fuel to produce electricity. In addition, it is to decrease reliance on the natural gas, increase the proportion of electricity generated from coal, a clean technology, supply more electricity from other countries, and upsurge the proportion of electricity produced from renewable energy sources; this also includes the development of power transmission systems, and power distribution systems to support the renewable energy development and enter the ASEAN Economic Community (AEC). The Production Data and the Power Consuming of Thailand The Power Development Plan of Thailand in the years B.E. 2558-2579 (PDP2015) has a brief summary as follows: At the end of the plans and at the end of B.E. 2579, there will be a total net capacity of electricity by 70,335 megawatts with the power capacity at the end of the year 2014 equaling to 37,612 MW combined with the new power plant capacity of the total 57,459 MW. Also, there are some expiration power plants (stopped operating) during the years 2015 – 2036, which means there will be 24,736 megawatts disappeared from the system. These are the power capacities during the year 2015 – 2036: - Electric Capacity at December 2014 37,612 megawatts - New Electric Capacity during 2015 – 2036 57,459 megawatts - Electrical Capacity Detaching from the system during 2015 – 2036 -24,736 megawatts - Total of Electric Capacity at the end of the year 2036 70,335 megawatts Electricity Demand Forecasting The maximum power demand of the running system in January occurred on January 20, 2016, at 19.00 p.m., which was equal to 25,312.30 MW. It was 410.00 MW, or 1.59% decrease, comparing to the last month.

Reference: Information Technology and Organization Communications Section, Electricity Generating Authority (EGA) 38 Annual Report 2015

Buriram Sugar Public Company Limited

From the preparation of the electricity demand forecasts of the country, the government officer has estimated the likely long-term gross domestic product (GDP) 2014-2036, which is in the average of 3.94% per year. For this estimation, the average rate of the population increase, which is in 0.03% per year, is engaged, and also the Energy Efficiency Development Plan (EEDP) has been applied with the aim to reduce the power consumption in the year 2036, which is equal to 89,672 million units. The officer also considers the framework of the Alternative Energy Development Plan (AEDP) for the manufacturing sector in the year 2036, which will have the capacity of electricity from renewable energy sources into the system with the number of 19,634.4 MW. For the electricity demand forecast, which was used in the preparation of the PDP2015 plan, when the summation of the energy conservation plan, the renewable energy development plan, and the alternative energy has been counted, during the years 2014-2036, the total net electric power demand of the country will upsurge to the rate of 2.67% per year. In the year 2036, the total net electricity power demand (Energy) and the total maximum power (Peak) of the country will approximately be at 326,119 million units and 49,655 and MW. PDP2010 Rev3 B.E.

PDP2015

Changing rate (%)

Maximum Maximum Maximum Electric Energy Electric Energy Electric Energy Electric Energy Electric Energy Electric Energy (Million Units) (Million Units) (Million Units) (Megawatts) (Megawatts) (Megawatts)

2559

31,809

210,619

30,218

197,891

-1,591

-12,728

2569

46,003

304,548

40,791

267,629

-5,212

-36,919

2573

52,256

346,767

44,424

291,519

-7,832

-55,248

2579

49,655

326,119

Reference: The Power Development Plan of Thailand, B.E. 2558 – 2579 (2015 – 2036) (PDP2015)

In the past, both the government and the relevant departments have given the priority to the development of the renewable energy more seriously. Consequently, the government encourage the use of the domestic resources effectively, especially the renewable energy because it is the clean energy and can be used continuously. What’s more, all of the raw materials used in the electric production is of low-cost. Also supporting the renewable energy can reduce the reliance on electricity from commercial power, which can reduce the costs of importing fuel from abroad, reduce the environmental impact, and help lessen the financial burden of the State investment in the electricity production and distribution system. Supply of Raw Materials. Obviously, BEC and BPC employs the bagasse as the fuel in the electric production. Currently, bagasse is a by-product of sugar production of BSF, and it has brought into the production process, which is sufficient to make the biomass power plant in generating the electricity according to the capacity. However, the biomass power plant has also been designed to accommodate other raw materials, such as hacked wood and rice husk. Anyway, if there is not enough bagasse to produce electricity, BPC and BEC can use other raw materials to produce the electricity. 39 Annual Report 2015

Organic Fertilizer Production Business, performed by KBF The quality of the products and services The Fertilizer Company Limited or KBF registered in the year 2011, and currently, the 15 million baht of its registered capital has already paid up. KBF has operated its production business and sold the organic fertilizer on December 2012 by using the decomposed filter product, which is a by-product of the sugar production of the circulation group as the raw material in the production of organic fertilizer. That the KBF factory is located in the nearby area to Buriram Sugar Factory is to facilitate the transport of raw materials, a left-over product, which is the main product in manufacturing the fertilizer and to save money on the freight. KBF's product is mainly the organic fertilizer, both the powder and granular type. Presently, 95% of the KBFâ&#x20AC;&#x2122;s products of organic fertilizer has sold through the BRD. From this, the BRD will subsequently sell it to the sugarcane farmers through campaigns or other promotions so that they can lower their investment. At the same time, with this fertilizer, their production per rai is high and with the good quality, and also, this will make them be able to bring their products to the factory to compensate the prepaid money supported from the BRD, which is beneficial to both the Company and the sugarcane farmers. In addition, approximately 5% of the organic fertilizer will be available to any third party, which will be another business expansion in the future.

Marketing and Competition Situation Competition Strategy The main goal of running this business of KBF is to provide the sugarcane-farmer the best fertilizer and appropriate price so as to reduce the capital in manufacturing of the farmers and to value the production per rai, which will make the sugarcane farmers gain more money per the product they can produce. 1. Good Products and Suitability for Each Piece (Plantation) From the focus on the growing of the sugar cane and the increase of the products per rai in the high rate, KBF has carried out the research and development to research and develop the production of the fertilizer, which makes the Company be able to produce the fertilizers in a variety of formulas, and the Company can also control the quality of the fertilizer every sack with a low-cost. On the other hand, it can be applied to various kinds of economic plants: appropriate and consistent with the sugarcane area (in an individual piece). In fact, before distributing this product to the farmer, the Company did perform research with the sample pieces to study the response to the growth of the sugar cane. When it is found that it is effective, it is then introduced to the sugarcane farmers. Throughout the past period, the Company's products are found to give good results on the growth of the sugarcane. It is also of the quality standards of accountability, Act of the fertilizer, B.E. 2518 and it is also low cost, making it well-known among the farmer.

40 Annual Report 2015

Buriram Sugar Public Company Limited 2. Establishing Distribution Centers in Every Campaign (Operation) Area. KBF has conjoined BRD establishing the goods distribution center across the campaign area in order to facilitate the farmers to get support from the Company, which is another way of supporting business affiliates. This is because when the farmer has the facility to purchase travel and get the fertilizer, they can improve the soil in the right time, causing the better growth of the sugar cane. 3. The Educational Field Trip (to the Sugar Cane Plantation) KBF expands its know-how by visiting other sugar cane plantations, which use the product from the sugar cane factory (the same business) so as to strengthen the self-confidence of the KBD’s products. The Customer Features and Distribution Channels At present, mainly 95% of the KBF’s products has sold to BRD, and the BRD will resell it to the sugarcane farmer through campaigns or other promotions. Distribution will be based on the location that is used to promote the Company's District Office. As follows:

Promotion Zones

The Company’s District Areas

Promotion Zones

The Company’s District Areas

Saw Ae Village, Khu Muang District

Na Sri Nuan Village, Lam Plai Mas District

Nong Khrue Village, Muang District

Nong Pai Village, Stuek District

None Khaw village, Khaen Dong District

Samet Village, Stuek District

La Gor Village, Stuek District

Kra Deung Village, Nang Rong District

Lam Ta Men Chai District

Ban Dan Sub-district, Ban Dan District

A policy to set up the price Since the chemical fertilizer and organic fertilizer are one of the factors that BRD uses to set up the campaign for the farmers, specifying the fertilizer’s price is divided into 2 cases; the prices of the instant chemical fertilizers, which are purchased in to sell out, will follow the price of the general market, while the prices of the organic fertilizer produced by the Company itself are decided by considering from the production capital (Cost Plus Method). This is to provide the farmer the better quality fertilizer with the formula to suit their needs in the growth of the sugar cane, with the cheap price, and in reducing the capital for the farmer.

41 Annual Report 2015

Trading Supporting Section KBF, together with BRD, a partner company, has regularly organized many kinds of campaigns by designing the business plan and also performing the trading supporting activity together. The KBFâ&#x20AC;&#x2122;s trading supporting team will work together with its partner company in each area to study the cultivated area, learn on-site problems, solve the problems together and also adjust the decided plan suiting the needs of each area. Besides, KBF has the plan to broadcast its products through the local cable TVs, community radios, and local newspapers. Additionally, the trading supporting team will evaluate or follow the growth of the sugar cane periodically to make the products be recognized and to grasp the farmer the productâ&#x20AC;&#x2122;s symbol; this is to make the product be more dependable, which will emphasize the farmer to trust the products of the Company. Industry Situation and Competition Obviously, the chemical fertilizer industry is one of the most important industries of the country because Thailand, as we all know, is the agricultural country since the fertilizer plays an important role in increasing the agricultural products. However, Thailand cannot produce enough fertilizers to suit the farmersâ&#x20AC;&#x2122; needs because its producing capital is very high, so mostly importing those fertilizers from overseas is the best solution. The Table Showing the Quantity and the Imported Value of the Chemical Fertilizer (the Chief Formula), in the years 2010 - 2014 (Values : Million Baht) FS*

(Values : Million Baht) 2010

2011

Quantity

2012

2013

2014

Value

Quantity

Value

Quantity

Value

Quantity

Value

Quantity

Value

Single or Straight Fertilizers 46-0-0

2,121,342

21,824

2,087,879

27,758

2,153,690

30,240

2,170,237

24,483

2,132,266

23,770

18-46-0

481,343

7,997

395,044

7,939

536,806

10,198

550,257

8,606

553,592

8,753

0-0-60

517,828

6,940

755,120

10,895

586,155

9,825

657,578

8,798

690,656

7,712

Total

3,120,514

36,760

3,238,042

46,592

3,276,650

50,263

3,378,072

41,886

3,376,514

40,235

21-0-0

350,023

1,893

276,558

2,047

282,782

2,266

191,674

1,154

104,386

480

16-20-0

494,393

5,187

571,528

7,147

549,688

7,587

575,112

6,885

466,321

5,034

16-16-8

10,795

122

42,736

616

71,223

1,050

102,488

1,345

61,589

752

15-15-15

409,488

5,513

379,906

5,691

400,776

6,511

534,378

7,483

466,529

6,208

Others

787,495

11,736

1,070,410

16,807

1,002,157

16,269

857,167

13,505

939,681

13,393

Total

2,052,194

24,451

2,341,138

32,308

2,306,626

33,683

2,260,819

30,372

2,038,506

25,868

Net Total 5,172,708

61,211

5,579,181

78,899

5,583,276

83,947

5,638,891

72,259

5,415,020

66,103

*Fertilizer Formulas Reference: Chemical Fertilizer Section, Office of Agricultural Plants and material control, Department of Agriculture (updated on May 7, 2015) 42 Annual Report 2015

Buriram Sugar Public Company Limited

The Ministry of Agriculture and Cooperatives continue to educate farmers in the use of the chemical fertilizer and organic fertilizer to cause the balance and suitability of the soil conditions and encourage the farmers to mix the chemical fertilizers themselves. This is to promote the farmers to benefit the left-over products (farm wastes) as their own fertilizers. Furthermore, the Ministry of Agriculture promotes the integrated use of fertilizers, that is to say, the farmers can use in conjunction with the chemical fertilizer, organic fertilizer, and/ or bio-fertilizers at an appropriate rate suiting to each plant. Additionally, the use of the mixed fertilizers can reduce the use of chemical fertilizers and it also helps add other organic objects in the soil, making it more naturally plentiful. Actually, this is one of the measures in place to help reduce production costs for farmers because, as we all know, the chemical fertilizer is one of the important production factors that affect the farmer's production costs. Fertilizerâ&#x20AC;&#x2122;s Price Because Thailand is not yet able to produce the chemical fertilizers to support the farmersâ&#x20AC;&#x2122; needs across the country. So, it is required to import from the country that can manufacture the chemical fertilizer. However, the Ministry of Agriculture and Cooperatives will have to keep track of the fertilizerâ&#x20AC;&#x2122;s prices to make sure that they are suitable for the farmers and also to protect them from such exploitation. Supplying The KBF has used the decompose filter, which is a by-product of the sugar production from the BSF as its raw materials to produce the fertilizer production. In addition, the decompose filter is accounted for about 5% of the quantity of the sugar cane in the production of each year operation.

43 Annual Report 2015

Risk Factors

Risk from business operation of the Company

Business of the Company and its subsidiaries are as follows:

1. Raw sugar and brown sugar manufacturing and distribution operated by Buriram Sugar Factory Co., Ltd. (“BSF”) 2. Byproduct business as follows: - Biomass power plant operated by Buriram Energy Co., Ltd. (“BEC”) and Buriram Power Co., Ltd. (“BPC”) and - Organic fertilizer manufacturing and distribution business operated by Key Brand Fertilizer Co., Ltd. (“KBF”) 3. Supporting business operated by Buriram Sugarcane Research and Development Co., Ltd. (“BRD”)

Risk from business operation of Buriram Sugar Factory Co., Ltd. (“BSF”)

1. Risk Factors from Raw Material Sourcing The Company’s business is to run factories to product raw sugar and brown sugar which use sugarcane as raw material. To allocate sufficient sugarcane for crushing is the most important factor affecting the operations and the performance of the Company. The quantity of sugarcane available each season is depended on these main factors:

(a) Changes in the acreage under sugarcane plantation may depend on the price agreed for the cane and whether it is worthwhile for the farmers to grow sugarcane compared to other agricultural crops as well as the promotional policies of the government like zoning. However, Buriram is one of the pioneer provinces to switch from rice to sugarcane plantation according to Thailand Ministry of Agriculture and Cooperatives. Additionally, the Company has surveyed and evaluated the fluctuation and has worked out solutions for needed area. Between 2011 and 2015, Buriram sugarcane plantation has increased steadily with more farmer products per acre every year, the detail is as follows; 2011/12

Sugarcane Plantation (Rai)

Buriram 185,356 Province All area in 8,998,286 Thailand

2012/13

2013/14

2014/15

2015/2016(F)

Average Production (Ton/Rai)

Sugarcane Plantation (Rai)

Average Production (Ton/Rai)

Sugarcane Plantation (Rai)

Average Production (Ton/Rai)

Sugarcane Plantation (Rai)

Average Production (Ton/Rai)

Sugarcane Plantation (Rai)

Average Production (Ton/Rai)

N/A

188,946

11.09

200,112

11.29

200,941

11.09

210,941

11.09

N/A

9,487,320

11.32

10,078,025

11.24

10,530,927

11.08

11,033,731

11.10

Source : Office of the Cane and Sugar Board 44 Annual Report 2015

Buriram Sugar Public Company Limited

(b) Climate, rainfall, irrigation, soil fertility, sugarcane varieties, and other sugarcane disease altogether affect the crop yield of sugarcane. The fluctuation of each factor can cause agricultural output diminution. The Company has supported sugarcane watering during dry season through drip irrigation system in sugarcane farm. Via cooperation with The Office of the Cane and Sugar Fund, the Company has offered long-term loan with 2% interest rate per annum for irrigation development.

(c) Risk from soil fertility quality, the Company has in place a policy that focus on soil improvement in sugarcane plantation area, for example, harvesting without setting fire to preserve organic matter, adjusting pH for fertilizer efficiency, and using filter cake-based fertilizer which is a byproduct of sugar production. Since the policy implementation, the agricultural output of sugarcane increase gradually from 8-9 tons/Rai during 2004-2010 to 12-13 tons/Rai during 2011-2015.

(d) Risk from sugarcane varieties the Company has carefully chosen sugarcane variety that appropriate for the plantation area, has had sugarcane testing area, has selected new sugarcane variety to replace deteriorated variety, and has chosen sugarcane variety that provides more sugar per ton cane and offer farmer higher return.

(e) Local sugarcane purchasing competition, if nearby sugar factory offers higher sugarcane price than BSFâ&#x20AC;&#x2122;s price to a farmer, the farmer may trade their sugarcane to that factory instead. This reduces amount of BSFâ&#x20AC;&#x2122;s sugarcane crushed. BRD manage sugarcane procurement via contract. By providing fund, fertilizer, chemical, sugarcane variety, or other agricultural machinery, the Company is able to secure future sugarcane ownership in 50 kilometers area around the factory before cane crushing season. Additionally, BRD aims to keep good relationship with farmers by sending 17 teams of agricultural extension officers to make a field research at each plot, recommend suitable sugarcane variety, manage soil and water condition, and help take care of each cultivation period from growing to harvest to distribute to BSF by using online and GPS system to ensure that every sugarcane plot is monitored and supported appropriately. The actions make certain that farmers can produce quality sugarcane, gain more crop yield, receive steady revenue, and become respectable alliance with the Company. BRD is also capable to procure sugarcane from out of supporting area. Through indicated management, BSF has never faced scarcity of sugarcane in cane crushing season.

Moreover, zoning among sugar factories in the areas of Buriram, Surin, and Nakhon Ratchasima provinces has been established to prevent purchasing competition between the sugar factories.

45 Annual Report 2015

2. Risk from fluctuating sugar prices in global market For sugar trading in global market, sugar is one of the agricultural products that highly fluctuate compared to other agricultural products. Fluctuation of global sugar price depends on demand and supply of sugar-manufacturing nations, of consuming nations, exporters and importers, speculation of some traders in commodity market, proper climate for cultivation, as well as national policy which may support or restrict export and import of government sugar industry especially for developed nations. Additionally, sugar price currently corresponds to fuel price since cane juice and molasses can be used to manufacture ethanol which can be mixed with oil for automobile fuel. The specified factors result in high fluctuation of global sugar price. For each Thai sugar factory to export sugar, the export must be accomplished through agency company, according to The Sugarcane and Sugar Act B.E. 2527. And the factory will be allocated the amount of sugar for domestic consumption and export by The Sugar Board and depended on the amount of sugar production capacity in the corresponding season. The regulation causes the export and the domestic sale rate of each sugar factories to be approximate. In 2014 and 2015, the Company had revenues from sugar export account for 77% and 80% of the total revenue consecutively. The export price is primarily based on international sugar price which depend on demand and supply of overall global market. Hence, the Companyâ&#x20AC;&#x2122;s revenue highly depends on the variation of sugar price. In 2015, the average volatility of raw sugar price of New York Sugar is 14.37 cent/pond. Average price of raw sugar of New York Sugar No. 11 Fiscal year Average price (Cent/pond)

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

9.99

14.63

9.9

12.1

17.98 22.28 27.07 21.57 17.47 16.34 14.37

Average price of white sugar of London Sugar No. 5 Fiscal year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Average price 279.63 421.66 309.55 351.59 487.39 616.49 706.07 587.74 496.58 439.30 419.37 (US$/ton) Source : Bloomberg and CitiCommodities/Agricultural

Since primary cost of sugar manufacturing is sugarcane price which depends on the Companyâ&#x20AC;&#x2122;s revenue (The cane and sugar industry in Thailand is regulated under a 70:30 revenue sharing scheme between sugarcane farmers and sugar mills.). Hence, if international sugar price drops, cost of sugarcane purchasing from farmers will fall in parallel. Therefore, it reduces the impact of sugar prices at a certain level. However, the Company decided to invest in some related projects, e.g. bagasse-based power plant and organic fertilizer plant; hereafter, the Company anticipates that the operating results would be less affected by the global sugar prices. 46 Annual Report 2015

Buriram Sugar Public Company Limited

3. Risk of Bad Debts Arising from Credit Given to Farmers (Advance Credit) BRD/BSF supports the sugarcane farmers to grow the sugarcane to be supplied to the factory via advance credit for each plot and growth activity of sugarcane. The Company uses database system and Global Positioning System (GPS) to survey the sugarcane plantation areas, which allow every area to be tracked, monitored, and aided according to real condition. The support is in the form of post-dated cheque to let the farmers invest in sugarcane variety, land, irrigation, machine and equipment or fertilizer. The credit support helps reserve sugarcane for crushing. After the sugarcane crop is ready for harvesting and the sugar factory is ready to start crushing the cane, the farmers harvest the cane and send it to the sugar factory and receive payment for the value of the cane supplied after the advance credit and other financial support given is deducted. The risks that are generated from such sugarcane credit can come from reduced production in any year due to drought conditions, losses from crop disease and pestilence, etc. Such liabilities, arising from advance credit, can undesirably affect the BSFâ&#x20AC;&#x2122;s operation performance requiring higher amounts of provisioning for bad debts. During 2011 to 2015, the Company estimates allowance for doubtful account as follows: (Unit: Million Baht)

Allowance for doubtful account Farmers account receivable Percentage of doubtful account

2011

2012

2013

2014

2015

6.41

20.33

1.05

3.44

560.61

975.21

1,135.29

880.68

989.21

1.14

1.79

0.11

0.34

The ratio of allowance for doubtful account during 2011 to 2015 is approximately 0.66% of farmers account receivable at the end of the accounting period. The Company has valued the risk management of advance credit; so it is controlled, starting from to specify qualification of borrower, the process of granting the credit line to the debt collection system, as well as to make the approving advance loan system by giving advance credit to sugarcane farmers who can achieve by paying on periodic of each work installments including the securities and the guarantor.The Company has regularly sent agricultural extension officers to attend to sugarcane farmers who receive the advance credit granted by the Company. A Global Positioning System (GPS) has been used to survey and measure the sugarcane planting areas in order to get the accurate information about sugarcane planting process, and to help detect and solve problems in time.

47 Annual Report 2015

4. Foreign exchange risk The Company recognizes approximately 71% and 77% of its sugar export revenue as US$, ergo the Companyâ&#x20AC;&#x2122;s revenue fluctuates according to the exchange rate of Thai Baht and US$. However, the Company has applied risk avoidance measure by signing future foreign exchange contract based on exchange rate of Thai Cane and Sugar Co., Ltd. for Quota B., but the method depends on the Board of Directorsâ&#x20AC;&#x2122; discretion and exchange rate forecasting. And such risk preventive measure might not be able to prevent the risk if Thai Bath appreciates for long duration.

5. Risk from government control 5.1 Risk from Government Policy The sugarcane and sugar industry in Thailand is under the supervision and control of the Office of the Cane and Sugar Board under the Cane and Sugar Act B.E.2527. The Board regulates the management of sugarcane plantation area, the amount of sugar produced by a quota system (Quota A for domestic sales, Quota B and C for sugar exports), controls the domestic price, regulates on the ratio of distribution of revenue from the sugar business between the farmers and sugar factories, with the revenues sharing in the ratio of 70:30, etc. The 70:30 revenues sharing system is specified by the Cane and Sugar Board international price (Quota B) which is a standard price, for calculating sugar export revenue of whole country to be included on the income distribution of sugar and molasses in sugar industry's total revenue. Then, the deduct the cost of production and distribution for forecasting earnings of the industry. After that there will be split in the ratio of 70:30. The 70 percent will be divided by the volume of cane production to be used to determine the price of sugarcane that will be purchased the plant. So the 70:30 system would lead to industry instability. There is production price risk of raw sugar prices reduction in the country, because the cane price based on the price of sugar cane has sold. It is evident that the Minister of Industry, the Minister of Agriculture and Cooperative and the Minister of Commerce are responsible for maintaining the regulatory compliance. In case, changes in the domestic sugar prices or changes in regulation of entire sugar industry, it will have a definite impact on the operations of performance of the Company and other companies in the sugar industry. There is possible risk from diminution of restriction to emancipate cane and sugar industry in accordance with obligation between Thai and other nations such as ASEAN FTA, Bilateral FTA, Regional Comprehensive Economic Partnership, as well as multilateral framework like WTO. Encompassing FTA is both an opportunity and a challenge for cane and sugar industry which should be monitoring closely.

48 Annual Report 2015

Buriram Sugar Public Company Limited

The sugarcane and sugar industry is a precursor of the food and processed food industries. Also cane sugar is a commodity product that has been exported throughout the world. Hence, the Company realizes the importance of government policies in shaping directions of cane and sugar industry and believes that the policies and its future change exist to provide a positive impact for the industry, farmers, and sugar factories themselves. 5.2 Risk of the Fluctuating Income from Sugar Sales Normally, the sugarcane harvesting period in Thailand starts from November to April. Consequently, the factory usually starts selling sugar products from December up to the end of the harvesting period. However, the Company will distribute sugar for domestic consumption (Quota A) in succession in 52 weeks. For international trade (Quota C), the Company always considers various factors in its sugar sales, such as inventory, expected production, Cane and Sugar Board international price (Quota B), and world sugar prices to be used as a standard for determining the Company export price. Since the Companyâ&#x20AC;&#x2122;s sugar sales for each quarter are not constant, the revenue from the Companyâ&#x20AC;&#x2122;s sugar distribution for each quarter may rise or decline depending on the previously specified factors and sales quantity in each quarter.

6. Risk from raw material cost The cane and sugar industry in Thailand is regulated under a 70:30 revenue sharing scheme between sugarcane farmers and sugar mills. The sugarcane prices are regularly calculated by the Cane and Sugar Board to allocate 70 % of the sugar industry lump sum revenue to the sugarcane farmers. So if TCSC sells sugar at high price, the raw material price are probably high as well but on the other hand, if the TCSC sell sugar at lower price, the raw material price will be reduced accordingly which the volatility of raw material prices will affect margins. To reduce the risk, the Company needs to sell sugar at a higher price than the average selling price of TCSC so the Company has not been loss of raw material increases price. The Company sets up the risk management by closely monitoring the period and sales volume of Thai Cane & Sugar Co., Ltd. to ensure that the Company sells some sugar at an appropriate rate compared to Thai Cane and Sugar Co., Ltd.

49 Annual Report 2015

Risk from Byproduct Business Operation Biomass Power Plant Business operated by Buriram Energy Co., Ltd. (BEC) and Buriram Power Co.,Ltd. (BPC)

1. Risk from insufficiency of fuel material for electricity generation

the risk from scarcity of fuel material can be competently controlled. Nevertheless, use of substitute fuel materials may result in rise of cost of electricity generation which in turn affects the Company’s net profit.

Currently, Buriram Sugar Factory Co., Ltd. or BSF provides of bagasse which is a byproduct of sugar manufacturing to BEC and BPC to be used as a biofuel for electricity generation. As a result, if an amount of seasonal sugarcane is low, an amount of bagasse delivered to the power plant will be affected. The scarcity risk may result in an interruption of the electricity generation. Presently, bagasse from the Company’s sugar manufacturing accounts for 26% of weight of sugarcane crushed. In 2014/2015, the Company possess byproduct bagasse approximately 520,000 tons which the sugar factory uses 250,000 tons to generate heat for sugar manufacturing process and the both of 9.9 MW power plants demand 430 tons/day or 130,000 tons/year to generate electricity sufficiently. However, the demand is going to increase from additional power plant construction of BPP which is the third power plant. Approximately, bagasse demand will raise about 640,000 tons/year to generate electricity 29.7 MW of three power plants. If an amount of cane crushed is less than 2,300,000 tons, bagasse quantity may not be sufficient for full capacity electricity generation.

2. Risk from Environmental Impact The Company’s electricity generation business is in compliance with environmental laws and regulations which covered pollution control procedures in land, water, and air. From past to present, the Company has put in place measures to ensure the prevention of environmental impact such as substance drainage system, substance control system, wastewater management system, and waste elimination system. The Company also provides green space or open space reserve in the power plant project in 25 Rai areas, utilizes wet scrubber system to reduce dust particle and monitors environmental impact to assure that the electricity generation process is in consistence with environmental laws and regulations. In July 2012, Buriram Energy Co., Ltd. was awarded Green Activity Level 2 Certification and also in July 2015 Buriram Power Co., Ltd. was awarded Green Commitment Level 1 Certification under Green Industry Project, hosted by the Ministry of Industry Thailand which displayed an excellence in systematically environment management of the Company. Also there’s continuous evaluation program to ensure unceasing development from the provincial Office of Industry and provincial industry colony.

Additionally, the Company’s machineries can utilize other substitutable fuel materials such as woodchips or chaff to generate electricity and in the 2015/2016, the Company purchases sugarcane leaves from the sugarcane famers more than 20,000 families to use as fuel material to generate electricity. Since sugarcane leaves have lower moisture than bagasse making it can be used as fuel to produce electricity. Hence 50

Annual Report 2015

Buriram Sugar Public Company Limited

Organic Fertilizer production and distribution business operated by Key Brand Fertilizer Co. Ltd. (KBF)

1. Risk from existing consumption behavior

2. Risk from Environmental Impact KBFâ&#x20AC;&#x2122;s fertilizer production and distribution business conducting is in accordance with laws and Fertilizer ACT B.E. 2518 Revised by Fertilizer ACT (No. 2) B.E. 2550 about quality control to preserve benefits of farmers and agriculture. The laws and act covers pollution control of land, water, air, and pollutant, trash and waste elimination, health and safety in the workplace, and dangerous material handling. However, the laws and act is intricate, constantly unstable, and highly dependent on subjective interpretations of related organizations.

Key Brand Fertilizer Co. Ltd. or KBF start producing organic fertilizer for farmers in December 2012. Most of the customers are farmers who have little knowledge of soil improvement by organic matter which help enhance chemical fertilizer and adjust physical and chemical condition of soil. Also, plant reacts to organic fertilizer slower than chemical fertilizer and organic fertilizer usage is more complicated; hence, Key Brand Fertilizer Co. Ltd. has cooperated with Buriram Sugarcane Research and Development Co., Ltd. to inform about organic fertilizer, create sample plot to simulate organic fertilizer usage with the development of machinery and transportation design of bagging the Big Bag. Then, the fork lift will lift the bag to the fertilizer machine so the cane farmers can be easily take the powder fertilizer into farmland nearby. However, the Company also provides knowledge about organic fertilizers and provide study of sample vegetable plots used organic fertilizer and distribute supported academic data to create a change of farmer behaviors.

KBF has been authorized to build a factory and produce organic fertilizer legally according to related laws and regulations. The Company also provides preventive measures to avoid environmental impacts to the employee and the communities near the factory, for example, utilizing dust collector chamber, using wet scrubber system, using water cannon vehicle around the factory, providing soundproof headband to reduce acoustic impact and taking part in the CSR activities to develop the community and social sustainably. Because KBFâ&#x20AC;&#x2122;s factory locates far from communities, KBF assure that risk from environmental impacts is low.

51 Annual Report 2015

Other Risks

2. Risk from the Company’s Major Shareholders influence in administrative policies setting

1. Risk from high Debt to Equity ratio In December 31, 2015 and 2014, the Company’s D/E ratios are 2.18 and 1.71 consecutively. However, since the Company is a holding company, loan contracts with Siam Commercial Bank are signed by operating subsidiaries such as BSF, BEC and BPC etc. which each subsidiary maintain D/E ratio separately. In December 31, 2015, D/E ratios of BSF, BEC and BPC are in compliance with loan contracts with Siam Commercial Bank. The Company has raised capital from the issuing debentures of two years maturity redemption of SET made the ratios of debt to equity shareholders of the Company increased from the year 2014. However, the rate is still remained above the statutes. The Company has a risk management plan to monitor the ratio of debt to shareholders on a quarterly basis for report to the Board Risk Management Committee.

Tangtrongwechakit family group and Buriram Capital Co., Ltd., which the group is a major shareholder, hold the Company shares totaled 74.32% of registered capital issued and paid after offering of these ordinary shares. The Tangtrongwechakit family group is also members of executive directors and directors who are authorized. The Company and/or the minor shareholders may risk to be influenced by the major shareholders. The major shareholders may freely set policy direction, control the policy and management, and direct the approval of shareholder meeting resolutions except some resolutions that require 3 out of 4 of total vote from the meeting in accordance with laws or the Company regulation; hence other shareholders may not be able to gather vote to inspect or balance power of the major shareholders. However, for the Company’s transparency and power balancing, the Company has provided the internal audit department (In-House) which consisted of audit committee, internal audit officer and outsourced audit company for checking the operations of the Company, balancing decision power, and considering agendas before present to shareholders’ meeting to prevent potential conflicts of interest and ensure transparency of the Company’s operation. Also the Company has set up the risk management unit is under the command of the risk management committee for checking and control the Company’s risk, as well as to do the risk management plan

52 Annual Report 2015

Buriram Sugar Public Company Limited

Shareholding Structure As of December 2015, Buriram Sugar Public Company Limited has THB 676,750,000 registered capital by dividing into 676,750,000 ordinary shares, par value THB 1 per share and the Company has a fully-paid registered capital of THB 676,750,000.

1. Major Shareholder

The Companyâ&#x20AC;&#x2122;s number of shareholder as shown in the share register book on December 28, 2015 as follows; Number of Shareholder

Amount of Share

Percent of Share

2,701

676,750,000

100

2,701

676,750,000

100

Thai Shareholders Foreign Shareholder Total

List of Top Ten Major Shareholders by dividing into groups as follows; Name of Shareholder

Number of Share

Percent of Share

Tangtrongwechakit Group Buriram Capital Co., Ltd. Mr. Anant Tangtongwechakit Mrs. Wanphen Punyaniran Mrs. Jirawan Pongpichitkul Miss Chittima Tangtrongwechakit Mr. Sarit Tangtrongwechakij Mr. Adisak Tangtrongweachakit Mr. Piyawit Srisawat Mrs. Sureewan Tangtongwechakit Miss Kornkanok Punyaniran

503,793,600 338,380,000 27,507,500 27,407,500 27,407,500 27,407,500 27,407,500 27,407,500 37,000 21,100 9,000

74.32 50.00 4.06 4.05 4.05 4.05 4.05 4.05 0.01 0.00 0.00

Sareewiwatthana Group Mrs. Waranee Sareewiwatthana Mr. Paiboon Sareewiwatthana Miss Pimsiri Sareewiwatthana Miss Pitsinee Sareewiwatthana

40,526,200 17,326,200 13,200,000 5,000,000 5,000,000

5.99 2.56 1.95 0.74 0.74

Mr. Sutthipong Veswarut

8,256,300

1.22

Mr. Nattaphat Khahanurak

6,414,600

0.95

53 Annual Report 2015

Name of Shareholder

Number of Share

Percent of Share

Mr. Pairoj Siwapornchai

6,274,450

0.93

Shartpinyo Group Miss Jutirat Shartpinyo Mr. Utain Shartpinyo

6,597,800 4,417,800 2,180,000

0.97 0.65 0.32

Mr. Dusit Wongsuthiroj

3,875,000

0.57

Mr. Amnat Klawkla

3,380,000

0.50

Miss Pannita Anantakul

3,372,000

0.50

10.

Mr. Pornsin Kraisakdawat

2,940,000

0.43

585,429,950

86.38

Total

Remarks : Buriram Capital Co., Ltd. is a holding company that has THB 339,380,000 registered capital by dividing into 3,393,800 ordinary shares, par value THB 100 per share. Shareholder name list on December 31, 2015 is as follows;

Name of Shareholder

Number of Share

Percent of Share

576,945

17.00

2 Mrs. Wanphen Punyaniran

563,371

16.60

Mrs. Jirawan Pongpichitkul

563,371

16.60

4 Miss Chittima Tangtrongwechakit

563,371

16.60

563,371

16.60

563,371

16.60

3,393,800

100.00

Mr. Anant Tangtongwechakit

Mr. Sarit Tangtrongwechakij

6 Mr. Adisak Tangtrongweachakit Total

54 Annual Report 2015

Buriram Sugar Public Company Limited

2. Major Shareholder of the Company’s Subsidiaries 2.1 Buriram Sugar Factory Co., Ltd.’s shareholder name list is as follows;

Name of Shareholder

Number of Share

Percent of Share

1 Buriram Sugar Public Company Limited

10,490,000

99.904

2 Mr. Anant Tangtongwechakit

1,666

0.016

3 Mrs. Wanphen Punyaniran

1,666

0.016

4 Mrs. Jirawan Pongpichitkul

1,666

0.016

5 Miss Chittima Tangtrongwechakit

1,666

0.016

6 Mr. Sarit Tangtrongwechakij

1,666

0.016

7 Mr. Adisak Tangtrongweachakit

1,666

0.016

10,500,000

100

8 Mrs. Pakinee Tangtrongweachakij Total

2.2 Buriram Sugarcane Research and Development Co., Ltd.’s shareholder name list is as follows; Name of Shareholder

Number of Share

Percent of Share

1 Buriram Sugar Public Company Limited

708,794

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Wanphen Punyaniran

4 Mrs. Jirawan Pongpichitkul

5 Miss Chittima Tangtrongwechakit

6 Mr. Sarit Tangtrongwechakij

7 Mr. Adisak Tangtrongweachakit

708,800

100

Total

55 Annual Report 2015

2.3 Buriram Energy Co., Ltd.â&#x20AC;&#x2122;s shareholder name list is as follows;

Name of Shareholder

Number of Share

Percent of Share

1 Buriram Sugar Public Company Limited

1,355,993

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Wanphen Punyaniran

4 Mrs. Jirawan Pongpichitkul

5 Miss Chittima Tangtrongwechakit

6 Mr. Sarit Tangtrongwechakij

7 Mr. Adisak Tangtrongweachakit

8 Mrs. Pakinee Tangtrongweachakij

1,356,000

100

Total

2.4 Buriram Power Co., Ltd.â&#x20AC;&#x2122;s shareholder name list is as follows;

Name of Shareholder

Number of Share

Percent of Share

1,699,994

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Wanphen Punyaniran

4 Mrs. Jirawan Pongpichitkul

5 Miss Chittima Tangtrongwechakit

6 Mr. Sarit Tangtrongwechakij

7 Mr. Adisak Tangtrongweachakit

1,700,000

100

1 Buriram Energy Co., Ltd.

Total

56 Annual Report 2015

Buriram Sugar Public Company Limited 2.5 Key Brand Fertilizer Co., Ltd.’s shareholder name list is as follows; Name of Shareholder

Number of Share

Percent of Share

1 Buriram Sugar Public Company Limited

149,994

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Wanphen Punyaniran

4 Mrs. Jirawan Pongpichitkul

5 Miss Chittima Tangtrongwechakit

6 Mr. Sarit Tangtrongwechakij

1 150,000

7 Mr. Adisak Tangtrongweachakit Total

100

2.6 Buriram Power Plus Co., Ltd.’s shareholder name list is as follows; Name of Shareholder

Number of Share

Percent of Share

99,995

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Jirawan Pongpichitkul

4 Miss Chittima Tangtrongwechakit

5 Mr. Sarit Tangtrongwechakij

1 100,000

1 Buriram Energy Co., Ltd.

6 Mr. Adisak Tangtrongweachakit Total

100

2.7 Buriram Super Power Co., Ltd.’s shareholder name list is as follows; Name of Shareholder

Number of Share

Percent of Share

49,995

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Jirawan Pongpichitkul

4 Miss Chittima Tangtrongwechakit

5 Mr. Sarit Tangtrongwechakij

1 50,000

1 Buriram Energy Co., Ltd.

6 Mr. Adisak Tangtrongweachakit Total 57

Annual Report 2015

100

2.8 Buriram Agro Energy Co., Ltd.’s shareholder name list is as follows; Name of Shareholder

Number of Share

Percent of Share

1 Buriram Sugar Public Company Limited

99,995

100

2 Mr. Anant Tangtongwechakit

3 Mrs. Jirawan Pongpichitkul

4 Miss Chittima Tangtrongwechakit

5 Mr. Sarit Tangtrongwechakij

1 100,000

6 Mr. Adisak Tangtrongweachakit Total

100

Agreement of Major Shareholders There is no any agreement among the major shareholders on matters that affect the issuance and offering of securities and the management of the Company.

Issuance of Other Securities The Extraordinary General Meeting of Shareholders No. 1/2015 on September 18, 2015 approved the issuance and offering the 2,000 Million Baht of domestic debentures to use for the project of capacity increasing to 23,000 TCD and other related projects, as well as working capital. The detail of the issuance and offering debentures as of February 25, 2015 is as follows;

• 250 million Baht of Buriram Sugar Public Company Limited’s debentures No.1/2015 (Yield to Maturity in 2017) was offered to Land and House Fund Management Co., Ltd.

• 600 million Baht of Buriram Sugar Public Company Limited’s debentures No.2/2015 (Yield to Maturity in 2017) was offered to public.

The Company issued the debentures in total 850 million Baht and remains 1,150 million Baht.

58 Annual Report 2015

Buriram Sugar Public Company Limited

Corporate Social Responsibility Our Corporate Social Responsibility Policy With our determination to develop the business sustainably and improve living condition of cane farmers and neighboring communities as well as the organization’s personnel to recognize social responsibilities and involve in such activities. The Company has set and directed CSR policy based on the original principle which is “Growth in Business, Sound in Environment and Sustainability in Community Development” under determination framework as follows:

“G C E C S Governance, Commitment, Environment, Community and Sustainable”

G – Governance “Conduct Business with Transparency” C - Commitment “Determination to Responsibility” E - Environment “Environmental Preservation” C - Community “Go Along with Community” S – Sustainable “Stay Sustainability”

59 Annual Report 2015

Mission We strongly valued importance of business development together with community and social development sustainability. Then the Company has established an important mission for achieving the goal as follows; 1. Enhance working model on business development under good governance and business ethics. 2. Support and Develop environment-friendly technology to be used in manufacturing process throughout supply-chain. 3. Encourage and Enhance community members and staffs’ standard of living via projects or activities whose staffs take part in. 4. Determine to raise staffs’ efficiency and knowledge on social and environmental works to reach business sustainable development outcome. 5. Give Priority to individual rights and a fairly treat of staff, customers and shareholders. 6. Support and Develop community education. 7. Prevent and Solve issues on child labor.

CSR Operation Strategy 5 core strategies are as follows:

1. Create public mind awareness among staffs and encourage them to participate in Company’s Public service projects. 2. Emphasis and apply “Sugar Made in the Field” philosophy on every CSR activities or projects. 3. Initiate joint-projects with tradition and not-tradition opinion leaders government agencies, non-governmental organizations (NGOs) and surrounding communities. 4. Use sugar production’s by-products in CSR projects for society and business benefits.

In the present, the Company’s CSR project and activity has developed strongly and continuously with regard to social and all stakeholders responsibility both internal and external organization namely; 1. Internal organization : Executive, employee and shareholder 2. External organization : Community, environment, customer, trading partner, debtor, creditor, business competitor and other related private and government sector

We are pleased to present the CSR projects and activities in 2015 in the sustainability report 2015 as attachment. 60 Annual Report 2015

Buriram Sugar Public Company Limited

Management Structure

Board of Directors

Company Secretary

Risk Management Committee

Audit Committee

Risk Management Department

Internal Audit Office

Executive Committee

Managing Director Investor Relation

Vice Managing Vice Managing Vice Managing Vice Managing Director: Director: Director: Director: Domestic Investment Domestic Investment Domestic Investment International Investment (Agricultural business) (Energy business) (Commercial)

Vice Managing Director: Finance & Operation

Assistant Managing Director: Finance & Operation

61 Annual Report 2015

Assistant Managing Director: International Affair

Assistant Managing Director: Financial Management

Management Structure Terms

Management Structure of the Company consists of the Board of Directors and 3 Sub-Committees which are Audit Committee, Risk Management Committee and Executive Committee.

In an annual general meeting, one third of the directors are required to resign. If the total number of directors does not allow such division, the number of directors to resign should be at the closest to one third of the total. In the first and the second year after registering, the directors required to resign will be selected via lot. For following years, directors who have stayed the longest with the Board shall exit. The directors whose terms have completed may be reelected to the Board.

The Board of Directors As of 31 December 2015 the Board of Directors consists of 9 members are included: Name 1. Mr. Prachuab Chaiyasan

Position Chairman of the Board of Directors

Scope of Duties and Responsibilities of the Board of Directors

(Independent Director) 2. Mr. Anant Tangtongwechakit

Director

3. Mrs. Wanphen Punyaniran

Director

4. Mrs. Jirawan Pongpichitkul

Director

5. Miss Chittima Tangtrongwechakit

Director

6. Mr. Sarit Tangtrongwechakij

Director

1. To undertake and manage the Company responsibly, carefully, trustworthily, and in conformity with any and all related laws, objectives, and Articles of Association of the Company, as well as resolutions of the meetings of shareholders.

7. Mr. Adisak Tangtrongweachakit Director 8. Mrs. Seenual Tasanapant

Directors (Independent Director)

9. Mr. Sirichai Sombutsiri

Directors (Independent Director)

2. To consider and approve any significant matters related to the Company’s business operations, e.g. vision, mission, policies, business strategies, goals and operating plans, financial targets, and budget of the Company and its subsidiaries.

Miss Patcharee Kosanam was appointed as the Company Secretary in the meeting of the Board of Directors No.8/2015 held on November 12, 2015

3. To govern and care for the normal business operations of the Company; and to have the Management work efficiently and proficiently to be in line with the determined vision, mission, policies, business strategies, goals and operating plans, financial targets, and budget of the Company.

The authorized directors are: 1. Mr. Anant Tangtongwechakit 2. Mrs. Wanphen Punyaniran 3. Mrs. Jirawan Pongpichitkul 4. Miss Chittima Tangtrongwechakit 5. Mr. Sarit Tangtrongwechakij 6. Mr. Adisak Tangtrongweachakit “Any two authorized directors co-sign their names and affix the Company’s seal.” 62

Annual Report 2015

Buriram Sugar Public Company Limited

4. To provide the accounting system, financial reports and auditing; and to care for the internal control system, the internal audit system, the risk management system, and the misconduct prevention, as well as provide monitoring measure on operation performance of the Company, its subsidiaries, and its joint ventures in order to ensure that they are all efficient and proficient

10. To recruit and appoint a person with knowledge, competence and experience that the Board of Directors deems appropriately, and with all other qualifications required by related laws and regulations to hold a position of directorship in case any director vacate his office due to other reasons apart from the expiration of the term of office.

5. To prepare the annual reports of the Company and/or the Board of Directors in accordance with all related laws and regulations required.

11. To recruit a person with knowledge, competence, experience and all other qualifications required by related laws and regulations to hold a position of directorship, and such person shall be nominated for the meeting of shareholdersâ&#x20AC;&#x2122; consideration.

6. To care for and provide a governing mechanism to prevent the potential conflicts of interest between any stakeholders and the Company, its subsidiaries, and its joint ventures.

12. To appoint or nominate person to be director or executive in the subsidiaries and/or joint venture in proportion of shareholding in the subsidiaries and joint venture. Such appointed or nominated director or executive shall be legally qualified for duties and responsibilities as well as not possess any characteristics prohibited in accordance with announcement of the Securities and Exchange Commission.

7. To consider, approve, consider and give opinions for consideration and approved by the meeting of shareholders in case of making any transactions significantly to the Company or any connected transactions in accordance with the procedure, conditions, legal process and related rules and regulations and/or obligations required by the Company, its subsidiaries, and its joint ventures.

13. To consider annual dividend payment and interim dividend payment of the Company and its subsidiaries.

8. To appoint any of the Companyâ&#x20AC;&#x2122;s directors as the chairman of the board; and to appoint some directors subject to the number of the Board of Directors deems appropriately as the vice chairman.

14. To consider and set up the criteria of remuneration payment to the Companyâ&#x20AC;&#x2122;s directors and top management.

9. To determine and amend the authorized directors of the Company.

15. To consider appropriate amount of remuneration for directors of the Company in line with the criteria of remuneration payment set up by the Board of Directors which shall be proposed to the meeting of shareholders for consideration and approval.

63 Annual Report 2015

16. To evaluate the work performance of the Managing Director and Top Management; to consider and set up the remuneration for the Top Management in line with the criteria of remuneration payment set up by the Board of Directors.

23. To set up and amend any matters prescribed in the regulations and Articles of Association of the Company. 24. To engage other power, duties and responsibilities as required by laws and other related regulations, Articles of Associations of the Company, and the resolutions of the meetings of shareholders.

17. To appoint any sub-committees; to recruit and appoint the directors or persons having engaged the knowledge, competence and experience as the Board of Directors deems appropriately to hold positions in those sub-committees; and to lay down the scope of authority, duties and responsibilities of those sub-committees.

In case that the Board of Directors or their authorized representative must carry out or enter into any transaction which may cause potential conflict of interest with the Company and/or its subsidiaries and/or related companies, the Board of Directors or their authorized representative will have no power to approve the specified transaction except the approval is in accordance with the policies and regulations which the Board of Directors and/or shareholderâ&#x20AC;&#x2122;s meeting (case by case) has considered and approved under laws, regulations, objectives, or the Articles of Association of the Company.

18. To appoint any of executive board members as the Managing Director; and to determine the scope of authority, duties and responsibilities of the Managing Director. 19. To appoint a director or person having engaging the qualifications, knowledge, competence and experience as the Board of Directors deems appropriately as the Company Secretary. 20. To appoint and/or empower one or several directors or persons to take any acts under the scope of directorship power and as the Board of Directors deems appropriately. However, such empowerment may be suspended, cancelled or altered. 21. To provide and care for the communication channels to connect with each group of shareholders and stake holders of the Company appropriately. 22. To care for the accuracy, completion, timing and transparent disclosure of important information related to the Company via fair and creditably accessible channels. 64

Annual Report 2015

Buriram Sugar Public Company Limited

Audit Committee

2. To provide some advice to the Board of Directors and the Management on the improvement of the Company’s working processor system in order to reduce related risks to ensure that the financial statements of the Company are accurate and efficiently utilized.

As of 31 December 2015 the Audit Committee consists of 3 members are included: Name

Position

1. Mr. Prachuab Chaiyasan

Chairman of the Audit Committee

2. Mrs. Seenual Tasanapant

Audit Committee

3. Mr. Sirichai Sombutsiri

Audit Committee

3. To consider, recruit, and nominate an independent person to be the Company’s auditor; to propose the remuneration for such an auditor; and to have the meetings with the auditor at least once a year without the attendance of the Management.

Remark : - Mrs. Seenual Tasanapant and Mr. Sirichai Sombutsiri are directors who possess knowledge and experience sufficient to be able to review credibility of financial statement.

4. To advise the Board of Director and executive to improve working process and system efficiently to reduce the risk for making financial report correctly and usefully.

- Ms. Porntip Winyupakorn was the secretary of the Audit Committee.

Terms The Audit Committee’s term lasts 3 years. Audit Committee whose terms have ended may be reelected to the Board. In case of a vacant position due to causes other than term completion, the Board must appoint qualified and lawful candidates as replacement Audit Committee to maintain a number of Audit Committee required by the Board of Directors. Each replacement shall serve in such position only for his/her predecessor’s remaining term.

5. To review the internal control system and internal audit system of the Company to ensure that they are run appropriately and proficiently; to verify the independence of the Internal Audit Department; and to give approval of the appointment, removal and dismissal of the Head of Internal Audit Department or those of other departments which is responsible for the internal audit activities of the Company. 6. To control and monitor the operation of the internal audit office according to the internal audit office charter

Scope of Duties and Responsibilities of the Audit Committee 1. To review the financial statements of the Company to ensure that they are disclosed accurately and adequately by coordinating with the external auditor and the Management who are responsible for the preparation of quarterly and yearly financial statements. The Audit Committee may have the auditor review or audit any transactions necessarily or importantly while auditing the Company’s account.

7. To verify and advise on adequacy, propriety and efficiency of risk management

65 Annual Report 2015

8. To consider any connected transactions or those with potential conflicts of interest to be in conformity with laws on securities and stock exchange, and regulations of the Stock Exchange of Thailand in order to ensure that such transactions are reasonable and enhance the best benefit for the Company; and to consider to ensure the Companyâ&#x20AC;&#x2122;s disclosure of connected transactions or those possibly causing the conflicts of interest which is accurate and adequate.

11. In performing duties, if the Audit Committee finds or suspects, the following transactions may have the material impact on the financial status and operation results of the Company, the Audit Committee shall report them to the Board of Directors prior to the improvement within the timeframe of the Audit Committee who deems appropriately :

9. To verify that the Company conforms to laws on securities and stock exchange, regulations of the Stock Exchange of Thailand and any other laws on the business of the Company. 10. To disclose the reports of the Audit Committee, which signed by the Audit Committee Chairman, in the annual reports of the Company which including the minimum information as follows:

a) Opinion on fairness, completeness, and reliability of financial statements of the Company.

b) Opinion on adequacy of internal control system of the Company.

c) Opinion on legal conformance to Securities and Exchange Act, regulations of the Stock Exchange of Thailand, or any laws related with business of the Company.

d) Opinion on appropriateness of the auditor.

e) Opinion on transaction that may cause potential conflict of interest.

f) Number of meeting of the Audit Committee and attending of each Audit Committee.

g) Opinion or general remark that Audit Committee receive from compliance with charter.

h) Other information that deems appropriate for shareholders and investors to know under scope of duties and responsibilities assigned by the Board of Directors.

a) Transactions causing conflicts of interest

b) Dishonest or irregularity or important defect in the internal control system

c) Violation of laws on securities and stock exchange, regulations of the Stock Exchange of Thailand or laws on the business of the Company.

â&#x20AC;&#x192; If the Board of Directors or the Management of the Company fails to remedy such within the timeframe specified in paragraph one, any of the Audit Committee members may report the transaction or act stated in paragraph one to the Securities and Exchange Commission or the Stock Exchange of Thailand. 12. The Audit Committee may seek for an independent opinion from other professional advisors if it deems necessarily under the Companyâ&#x20AC;&#x2122;s expense. 13.To perform other duties specifically assigned by the Board of Directors with consent of the Audit Committee. 66

Annual Report 2015

Buriram Sugar Public Company Limited

Risk Management Committee

Scope of Duties and Responsibilities of the Risk Management Committee.

As of December 31, 2015, the Risk Management Committee consists of 5 members are included: Name

1. Present and supportive Board of Directors to set risk management policies and acceptable risk levels to the Company.

Position

1. Mr. Anant Tangtongwechakit

Chairman of the Risk Management Committee

2. Mrs. Jirawan Pongpichitkul

Risk Management Director

2. Present an overview of the Company risk, how to manage and to monitor risks to the Board of Directors.

3. Miss Chittima Tangtrongwechakit Risk Management Director 4. Mr. Sarit Tangtrongwechakij

Risk Management Director

3. Review the risk management report and implemented to ensure that risk management is adequate and appropriate to manage the risks to an acceptable level.

5. Mr. Adisak Tangtrongweachakit Risk Management Director

Miss Kaynica Tanawechayasiri was the secretary of the Risk Management Committee.

Term of position

4. Coordinated with the Audit Committee by exchanging knowledge and information about the risks and internal controls that affect or may affect the Company.

1. The Risk Management Committee shall hold the position for a term of three years from the date the Board of Directors has approved the appointment.

5. Decide and make recommendations on critical issues that arise in the risk management process.

2. Risk Management Committee who retired by rotation may be appointed back into position again if it is approved by the Board of Directors.

6. Encourage a culture of risk management in organizations.

3. Moreover, when retired by rotation, the Risk Management Committee will be retired when

7. Evaluate the performance of the Risk Management Committee and report on the annual assessment to the Board of Directors.

• dead

• resign

• Disqualified or prohibited under the Companies Act 1992 and the Securities Exchange Act of 1992 (including any amendments).

• The Board of Directors' resolution dismissed.

• The court has ordered dismissed.

8. Review the appropriateness of charter yearly. This is to ensures that the content of the charter is consistent with the objectives and strategies for risk management of the Company.

67 Annual Report 2015

9. Review the risk and the Company's risk management approach according to the risk agency evaluate, including provide suggestions for improvement.

3. To set up the organization structure and management policy of the Company as well as policies of recruitment, training, employment and termination of employment for the Company’s employees. The Managing Director and/or the Director to the Human Resources Department may be authorized to sign signature in the employment contract.

10. Oversee the effectiveness of the risk management processes of the Company on track and review continuously.

4. To conduct the feasibility studies on investment in new projects, and to be empowered to consider and approve the Company for an investment or a joint venture with an individual, juristic person or any other business organization in the investment form the Executive Committee deems appropriately in order to operate the business subject to the Company’s objectives, and to consider and approve the Company’s expenditure for such investment, business contracts and/or any related acts to complete such matter for the amount of investment from Baht 10 million up to Baht 50 million.

Executive Committee As of December 31, 2015 the Executive Committee consist of 5 members are included; Name

Position

1. Mr. Anant Tangtongwechakit

Chairman of Executive Committee

2. Mrs. Jirawan Pongpichitkul

Executive Director

3. Miss Chittima Tangtrongwechakit Executive Director

4. Mr. Sarit Tangtrongwechakij

Executive Director

5. Mr. Adisak Tangtrongweachakit

Executive Director

5. To consider and approve financial transactions to be made with any financial institutions in respect with the opening of account, taking out of loans and credit line, pledge, mortgage, guarantee and other matters as well as selling and purchase, and registration for any ownership of land in accordance with the Company’s objectives in order to benefit the business operations of the Company; and to take any legal acts, make contracts and/or perform other acts related to such matters until it is completed, in the amount from Baht10 million up to Baht1,000 million for each transaction but must not exceeding annum budget approved by the Board of Directors.

Miss Patcharee Kosanam is the secretary of the Executive Committee.

Scope of Duties and Responsibilities of the Executive Committee 1. To consider and prepare the policies, business strategies, operating goals and plans, financial targets, and budget of the Company by appropriately regarding various business factors to be proposed for the Board of Directors’ approval. 2. To govern, inspect, and monitor the Company’s business operations to ensure that they are efficiently and proficiently carried out in line with the policies, business strategies, operating goals and plans, financial targets, and budget of the Company as approved by the Board of Directors. 68

Annual Report 2015

Buriram Sugar Public Company Limited

6. To consider and approve of entering into a contract and financial instruments, e.g. future contract for the right in sugar sales and purchases, foreign currencies exchange forward contract, etc. in order to prevent the Companyâ&#x20AC;&#x2122;s financial risks.

12. To have any power, duties and responsibilities as per assignments or policies given by the Board of Directors. In case that the Executive Committee or their authorized representative must carry out or enter into any transaction which may cause potential conflict of interest with the Company and/or its subsidiaries and/ or related companies, the Executive Committee or their authorized representative will have no power to approve the specified transaction except the approval is in accordance with the policies and regulations which the Board of Directors and/or shareholderâ&#x20AC;&#x2122;s meeting (case by case) has considered and approved under laws, regulations, objectives, or the Articles of Association of the Company.

7. To consider and provide advice or opinions to the Board of Directors about any projects, proposals or entering into transactions related to the Companyâ&#x20AC;&#x2122;s operations, which need the operating amount greater than the permitted amount and/or required by any related laws and regulations or Articles of Association of the Company that must be considered and approved by the meeting of shareholders or that of the Board of Directors. 8. To consider and approve of the rules, regulations, management policies and business operations of the Company or any other acts binding the Company. 9. To empower the Managing Director to operate the business of the Company in accordance with the scope of power, duties and responsibilities as designated and governed by the Executive Committee. 10. To appoint and/or assign the Executive Director or a person or several persons to take any acts under the scope of power given to the Executive Committee and as the Executive Committee deems appropriately. The Executive Committee may suspend, cancel or alter such power. 11. To consider and approve of the Empowered Operation Manual to enable the appointed and/ or authorized persons to be aware of the scope of responsibilities and given power, and such that shall be a working manual for further working reference and to make the working procedure in order. 69

Annual Report 2015

Executive

2. To consider, negotiate, and approve for engaging into any juristic acts and/or taking actions, which involve some money for not more than Baht 10 million, relatedto the Company’s day-to-day operations and/or management but must not exceeding annum budget approved by the Board of Directors.

As of December 31, 2015 the executives consist of 9 following members. Name

Position

1. Mr. Anant Tangtongwechakit

Managing Director

2. Mrs. Jirawan Pongpichitkul

Senior Vice Managing Director (Domestic Investment)

3. Miss Chittima Tangtrongwechakit

Senior Vice Managing Director (Domestic Investment)

3. To consider the engagement into any juristic acts, and/or to negotiate for any contracts related to any operations or undertaking in connection with the Company’s day-to-day operations and/or management, which involve some money higher than the determined amount, in order to provide some opinions and propose such matter to the Board of Directors and/or the Executive Committee for further screening and finding out the solutions.

4. Mr. Adisak Tangtrongweachakit Senior Vice Managing Director (Domestic Investment) 5. Mr. Sarit Tangtrongwechakij

Senior Vice Managing Director (International Investment)

6. Mr. Vorathep Lertchaiudomchok

Vice Managing Director of Finance & Operation

7. Mr. Pitak Chaosoun

Assistant Senior Managing Director of Finance & Operation

8. Mr. Pattarapong Pongsawasdi

Assistant Senior Managing Director of International Affair

9. Mr.Adul Suravudhikul

Assistant Senior Managing Director of Financial Management

Scope of Duties and Responsibilities of the Managing Directors

5. To consider and approve transactions with banks and financial institutions involving account opening, borrowing, pawning, mortgages, guarantees, and other activities including property trading and land ownership registration according to specified objectives in order to facilitate the Company’s operation as well as any juristic acts and/or any related acts to complete such matter for the amount of money up to 10 million Baht per transaction.

1. To be responsible for the Company’s day-to-day operations and/or management, as well as for supervising general operations to be in line with policies, business strategy, goals and operating plans, financial targets and budgets of the Company as approved by the Board of Directors.

70 Annual Report 2015

Buriram Sugar Public Company Limited

6. To set up certain trading conditions, e.g. line of credit, period of payment, entering into a contract of sale, changes of trading terms, etc. and such transactions involve some money not more than Baht 10 million. but must not exceeding annum budget approved by the Board of Directors. 7. To recruit, appoint, remove, transfer, dismiss, and set up the scope of authority, duties and appropriate benefits for employees of the Company, who hold position of the Department Manager or lower according to the policies settled by the Executive Committee.

8. To appoint some advisors in any fields necessary for the Companyâ&#x20AC;&#x2122;s day-to-day operations and/or management.

9. To appoint and/or empower any person or persons to take acts under the scope of authority of the Managing Director as the Managing Director considers it is appropriate whereas such empowerment may be cancelled, revoked or revised by the Managing Director. 10. To have any authority, duties and responsibilities as assigned or subject to policies given by the Board of Directors and/or the Executive Committee. In case that the Managing Director or their authorized representative must carry out or enter into any transaction which may cause potential conflict of interest with the Company and/or its subsidiaries and/or related companies, the Managing Director or their authorized representative will have no power to approve the specified transaction except the approval is in accordance with the policies and regulations which the Board of Directors and/or shareholderâ&#x20AC;&#x2122;s meeting (case by case) has considered and approved under laws, regulations, objectives, or the Articles of Association of the Company.

71 Annual Report 2015

Company Secretary In the meeting of the Board of Directors No.8/2015 held on November 12, 2015, the Board of Directors has resolved to appoint Miss Patcharee Kosanam as Company Secretary in conformance to Section 89/15 of Securities and Exchange Act BE 2535 (Including amended).

Miss Patcharee Kosanam was trained from the Thai Institute of Director (IOD) on following courses;

• Company Secretary Program (CSP), Class 50/2013

• Effective Minute Taking (EMT), Class 25/2013

• Board Reporting Program (BRP), Class 10/2013

• Company Reporting Program (CRP), Class 5/2013

Scope of duties and responsibilities of Company Secretary are as follows: 1. To maintain efficiency of the operation of the Board of Directors and the Executives in conformance to the Company’s articles of association and related laws and regulations.

2. To organize Board and shareholders’ meetings according to rules and applicable laws.

3. To record minutes of the shareholder’s meetings and minutes of the Board of Directors’ meeting. Coordinate and follow up the shareholders’ and Board’s resolutions. 4. To prepare and maintain all documents relating to the Company’s statutory register of directors, Annual Reports, notices and minutes of the meetings of the Board of Directors as well as notices and minutes of the shareholders’ meetings. 5. To maintain and keep a record of vested interests as reported by directors and executives and send copies reporting vested interests of directors and executives or related persons to the Chairman of the Audit Committee within seven days of the receipt of each report.

6. To perform other duties as required by the regulations of the Capital Market Supervisory Board.

Details of the directors of the subsidiaries. Names of directors in each subsidiaries, only the significantly company with total revenue of over 10 percent of total revenue on the consolidated income statement of the last fiscal year include Buriram Sugar Factory Co., Ltd. (BSF). Details about the directors of Buriram Sugar Factory Co., Ltd. are as follows: 72 Annual Report 2015

Buriram Sugar Public Company Limited

Organization of Buriram Sugar Factory Co., Ltd. (â&#x20AC;&#x153;Core Businessâ&#x20AC;?)

Board of Director

Board of Executive Director

Managing Director

Senior Vice Managing Director of Production

Mr. Sarit Tangtrongwechakij

Senior Vice Managing Director of Procurement and Domestic Sale Miss Chittima Tangtrongwechakit

Vice Managing Director of Operation

Mr. Vorathep Lertchaiudomchok

Vice Managing Director of Production

Assistant Managing Director of Production

Production Manager

Quality Control Manager

Assistant Managing Director of Operation

Domestic Sale Manager

73 Annual Report 2015

Credit Manager

Buriram Sugar Factory Co., Ltd. (BSF) Board of Director

Executive

As of December 31, 2015 the Board of Director consists of the following 5 members;

As of December 31, 2015 the Executive consists of the following 7 members;

Name

Position

Name

1. Mr. Anant Tangtongwechakit Chairman of the Board of Director

Position

1. Mr. Anant Tangtongwechakit Managing Director 2. Miss Chittima Tangtrongwechakit

Senior Vice Managing Director of Procurement and Domestic Sale

3. Mr. Sarit Tangtrongwechakij

Senior Vice Managing Director of Production

4. Mr. Vorathep Lertchaiudomchok

Vice Managing Director of Operation

5. Mr. Yanyong Kittithatphongphon

Vice Managing Director of Production

Executive Committee

6. Mr. Nopanant Phoolsap

Assistant Managing Director of Production

As of December 31, 2015 the Executive Committee consists of the following 5 members;

7. Mr. Pitak Chaosoun

Assistant Managing Director of Operation

2. Mrs. Jirawan Pongpichitkul

Director

3. Miss Chittima Tangtrongwechakit

Director

4. Mr. Sarit Tangtrongwechakij

Director

5. Mr. Adisak Tangtrongweachakit

Director

Name

Position

Duties and Responsibilities Scope of the Subsidiariesâ&#x20AC;&#x2122; Board of Directors

1. Mr. Anant Tangtongwechakit Chairman of the Executive Committee 2. Mrs. Jirawan Pongpichitkul

Executive Director

3. Miss Chittima Tangtrongwechakit

Executive Director

4. Mr. Sarit Tangtrongwechakij

Executive Director

5. Mr. Adisak Tangtrongweachakit

Executive Director

The Board of Directors Meeting No. 6/2014 held on August 22, 2014 has approved the scope and functions of the Board are as follows. 1. Manage the subsidiaries business operations to be the best for shareholders. For the subsidiary operations, the Board of Directors of the subsidiaries are to perform their duties with honesty, responsibility and carefully with compliance with laws and regulations of the company and the resolutions of the shareholders' meeting as well as the resolution of the Board of Directors.

74 Annual Report 2015

Buriram Sugar Public Company Limited

2. Supervise the normal business operations of the subsidiaries and supervise the management to perform according to the vision, mission, policies, business strategies, business goals, action plans, financial goals and budgets of major company.

10. Evaluate the performance of the Managing Director and senior executives and consider the senior executivesâ&#x20AC;&#x2122; remuneration in accordance with the remuneration guidelines specified by the Board of Directors.

3. Provide accounting system, financial reporting and auditing including monitoring the internal control system, Risk Management System and anti-corruption including the measures to tracking the subsidiaries company's operating provide an effective and tightened enough.

11. Appoint and / or authorize the Board of Directors or any or several persons to take any action within the Commission's powers as the Board see appropriate. The Board of Directors may terminate or change these authorities. 12. Disclose information about financial position and operating results of the connected transactions of subsidiaries as well as the acquisition or disposition of assets and / or items significance to the Company with correctly informed and within a reasonable time set by the Company.

4. Supervise and provide a supervision mechanism for prevent conflicts of interest between the company's stakeholders. 5. Appoint one appropriate person of directors to be president and a vice chairman.

13. Disclose and deliver their interests and personal information that is relevant to the Board of Directors of the Company to identify relationships and transactions with the company or its parent company that may cause a conflict of interest within a reasonable time set by the Company.

6. Define and / or change the authorized signatoryâ&#x20AC;&#x2122;s directors of Subsidiaries Company. 7. Consider and determine the criteria for the remuneration of directors and senior executives. 8. Nominate individuals with knowledge, skills, experience and qualified according to law and relevant regulation to propose to the shareholders meeting to consider and appoint as the Director.

14. Report the business plan, business growth, large investment projects as approved by the Company, as well as joint investment with other operators to the Company. Through the monthly operating reporting period and to clarify and / or submission of documents in case of requested by Company.

9. Consider the amount of remuneration of Directors remuneration guidelines of the Board of Directors to propose to the shareholders meeting to consider and approve.

15. Clarify and / or submission of documents in case of requested by Company.

75 Annual Report 2015

16. Clarify and / or submission of documents in case of requested by Company in the case of the Company found any significant issues. 17. Is authorized, duties and responsibilities of any other specified in the law and relevant regulation Articles of Association and resolution of the shareholders meeting. However, any acting of the Board of Directors or any person authorized by the Board of Directors, stakeholders who may have a conflict of interest with the Company or any related company. The Board of Directors or the person authorized by the Board of Directors are not authorized for those action in the matter. Except the approval which based on policies and guidelines, the Board of Directors of the parent company and / or the shareholders meeting of the parent company. (Considered by case) To consider and approved change. On the basis of the laws and regulations of the company.

Financial Amount Approval Definition Buriram Sugar Public Company Limited and its subsidiaries defined authority to approve limits for operating a normal transaction, the Company's Board of Directors is authorized to approve committee delegates (the chairman of the executive committee, executive director and managing director who are directors of the Company) and the delegates are authorized employees as they see appropriate. It can be summarized as follows: Approval

Executive Committee

Managing Director

Senior Vice Managing Director / Vice Managing Director

Assistant Managing Director

The amount exceeding 100,000 baht

20,000 - 100,000 Baht

The amount exceeding 100,000 baht

Not exceeding 100,000

1. Expenses - Expenses associated with operating and general expenses. 2. Purchasing - Purchase of fixed assets

Approved aside from budget

- The signing of the various purchase document.

The amount exceeding 1,000,000 baht

Not exceeding 1,000,000 Not exceeding 500,000

3. Finance - The advancing disbursement at a time.

The amount exceeding 100,000 baht

20,000 - 100,000 baht

Without authority to approve

4. General - The sale of other assets - Building renovation

The amount exceeding Not exceeding 100,000 100,000 baht The amount exceeding Not exceeding 500,000 500,000 baht 76 Annual Report 2015

Buriram Sugar Public Company Limited

Remuneration of Directors and Executives Remuneration in Cash The Annual General Meeting of shareholders on April 21, 2015 passed a resolution approving of the Remuneration Director of the Company in 2015, which Board of Directors approve remuneration from the financial results of the company including the operations and responsibilities of Director by comparison with the same type of business or industry or close to the company And reference remuneration of directors and executives of listed companies in 2012, which was prepared by the Stock Exchange of Thailand.

Monthly Remuneration (Baht/month)

Annual Bonus (Baht)

Chairman of the Board of Directors

15,000

400,000

Director

10,000

150,000

Monthly Remuneration (Baht/month)

Annual Bonus (Baht)

Chairman of Audit Committee

15,000

150,000

Audit Director

10,000

100,000

Monthly Remuneration (Baht/month)

Annual Bonus (Baht)

Chairman of Risk Management Committee

15,000

400,000

Risk Management Director

10,000

150,000

Monthly Remuneration (Baht/month)

Annual Bonus (Baht)

Chairman of Executive Committee

15,000

150,000

Executive Director

10,000

100,000

Position

77 Annual Report 2015

In 2014 and 2015, the Company remunerated the directors as following detail; Name

Remuneration

Position

2014

2015

Mr. Prachuab Chaiyasan

Chairman of the Board of Directors, Independent Director, and Chairman of the Audit Committee

880,000

910,000

Mr. Anant Tangtongwechakit

Director, CEO and Chairman of Risk Management Committee

743,750

930,000

Mrs. Wanphen Punyaniran

Director

260,000

270,000

Mrs. Jirawan Pongpichitkul

Director, Executive Director and Risk Management Director

630,000

710,000

Miss Chittima Tangtrongwechakit

Director, Executive Director and Risk Management Director

630,000

710,000

Mr. Sarit Tangtrongwechakij

Director, Executive Director and Risk Management Director

630,000

710,000

Mr. Adisak Tangtrongweachakit

Director, Executive Director and Risk Management Director

620,000

710,000

Mr. Amnuay Patise

Independent Director and Audit Committee

535,000

Mrs. Seenual Tasanapant

Independent Director and Audit Committee

122,500

490,000

Mr. Sirichai Sombutsiri

Independent Director and Audit Committee

350,000

490,000

5,521,250

5,930,000

Total

Remark : 1. Mr. Prachuab Chaiyasan was appointed on September 18, 2012

2. Mr. Amnuay Patise

was appointed on October 15, 2012 and resigned on October 2, 2014

3. Mr. Sirichai Sombutsiri was appointed on January 1, 2013

4. Mrs. Seenual Tasanapant was appointed on October 3, 2014

78 Annual Report 2015

Buriram Sugar Public Company Limited

Buriram Sugar Factory Co., Ltd.

In 2014 and 2015, the Company remunerated the Board of Directors as following detail; Name Mr. Anant

Remuneration (THB)

Position

Tangtongwechakit

Mrs. Jirawan Pongpichitkul Miss Chittima Tangtrongwechakit Mr. Sarit

Tangtrongwechakij

Mr. Adisak

Tangtrongweachakit

Chairman Director Director Director Director

Total

2014

2015

580,000 270,000 270,000 270,000 270,000 1,660,000

In 2014 and 2015, the Company remunerated the Executive Committee as following detail; Name Mr. Anant

Remuneration (THB)

Position

Tangtongwechakit

Mrs. Jirawan Pongpichitkul Miss Chittima Tangtrongwechakit Mr. Sarit

Tangtrongwechakij

Mr. Adisak

Tangtrongweachakit

CEO Executive Director Executive Director Executive Director Executive Director

Total

2014

2015

330,000 220,000 220,000 220,000 220,000 1,210,000

Remuneration of Executive

In 2014 and 2015, the Company remunerated the Executives including salary, bonus and benefits as following detail; BRR Amount of Executive Amount of remuneration

BSF

2014

2015

2014

2015

20,767,459

22,691,592

11,801,695

14,661,000

Other Remuneration

- None -

79 Annual Report 2015

The superintendent oversees the operations of its subsidiaries

(A) The Company Annual Dividend Payment and the Interim Dividend (if any). (B) The Company Articles of Association Amendments

Buriram Sugar Public Co., Ltd. overseeing and managing the affairs of the company including monitoring of its compliance with the measures and mechanisms that can be defined as a unit of the company itself and according to company policy, Buriram Sugar Public Co., Ltd.. for maintaining interest of investments and for the maximum benefit to the Company in the overall Buriram Sugar Public Co., Ltd. has a mechanism to oversee the implementation of the company the as follows:

The items (D) to the (L) is considered significant items if the company transact, it will have a significant impact on the financial position and results of operations of the Company by the rules prescribed by the relevant notifications of the Capital Market Commission and the Notification of the Stock Exchange of Thailand. The acquisition or disposition of assets and / or the transaction (Considered by case) shall be compliant for a case that when calculating the size of the list of transactions compared to the size of the company in accordance with the above. The criteria to be considered for approval by the Board of Directors of the Company. The list is as follows.

1. The company will appoint or nominate candidates as directors or manager of subsidiaries and / or associated companies, at least in proportion of their shareholding in subsidiaries and associated companies. The directors and executives nominated by the Company or appointed by judgment in assessing vote of the meeting of the Board Directors of subsidiaries and / or its associate in relation to the general management and the normal business of the subsidiary and / or joint promotion as the directors and management of the subsidiaries and / or associates have been agreed for the benefit of directors or management accordingly roles and responsibilities must be qualified.

(D) If the Company entered into a transaction or related to the acquisition or disposition of assets. (E) Transfer or relinquish benefits including a waiver claim on the damage of the company. (F) The sale or transfer of all or a substantial part to any other person. (G) The purchase or business transfer of another company by the company.

2. In following case, there need to be approved by the Board of Directors of the Company or the shareholders meeting of the major company (Considered by case) before approval by the Board of Directors or the shareholders meeting of the Company (Considered by case).

(H) The business operation, amendment or termination of contracts relating to the leasing business of the Company or a substantial part, assignment for other person with business management of the company or enterprise integration with another party. (I) Renting or leasing all or part of the business or assets of the company's significant.

(1) If there is case needs of approval by the Board of Directors of the Company or the shareholders meeting of the major company (Considered by case) before the company transactions the

(J) Loans, Lending, Crediting and credit guaranteeing for transactions binding the Company to increase the financial burden or providing financial help to another person in any other way, is not the Company's normal business of the company. 80

Annual Report 2015

Buriram Sugar Public Company Limited

(K) Going out of Business

reduced to less than 50 percent of the total votes of companies in a transaction besides the normal business transactions of the company.

(L) Any other matters that are not normal business. The list will affect the company significantly.

(D) Going out of Business of the Major Company

(E) Any other transaction that are not normal business of the major Company and which affects the company significantly.

(2) Subject need approval by the shareholders meeting of the parent company before the company operate the transaction however, it has to follow the rules defined by the relevant notifications of the Capital Market Supervisory Board and the Board of the Stock Exchange of Thailand. This must be the case that when calculating the size of the list of transactions compared to the size of the company in accordance with those already mentioned must be approved by a shareholders meeting of the major company as well.

(F) The amendment of the regulations of the company could impact significantly on the financial position and results of operations of Company. This includes, but is not only, amendments of company regulations that affect the rights of the company to nominate or to appoint a director or executives of the company proportionally to their shareholding in company. The vote of the directors who are nominated or appointed by the Company, the Board of Directors of major Company. Voting at the meeting of major company's major shareholder and / or payment of dividends on the Company.

(A) If the Company entered into a connected transaction or related to the acquisition or disposition of major company assets. (B) The capital increase by issuance of new shares and the allocation of shares of the company including the reduction capital of the Company which is not in proportion of the existing shareholdings of the shareholders, which will result in the proportion of voting rights of the Company. The direct and / or indirect, in the meeting of the shareholders of the company, whether in any descend fell more than 10 percent of the total votes of companies or as a result, the proportion of voting rights of the Company both directly and / or indirectly to the shareholders meeting of the Company that are not in any descend reduced to less than 50 percent of the total number of major companies.

3. Board, Executive Director and Administrators of the subsidiaries are responsible for the following: (A) Disclosure the financial and operating results of the connected transaction of the company as well as the acquisition or disposition of assets and / or items of significance to the company with the correct and complete information within a reasonable time determined by the Company. Incidentally, the Board of Company Directors are to consider the enter into a connected transaction, the acquisition or disposition of a significant asset of the company by the rules prescribed by the relevant notifications of the Capital Market Supervisory Board and the Board of the Stock Exchange of Thailand to apply mutatis mutandis.

(C) Any other action which is a result of the proportion of the voting rights of the Company both direct and / or indirect of the shareholders meeting of the Company that are not in any descend decreased more than 10 percent of the total votes of major companies or as a result of the proportion of voting rights of the major Company direct and / or indirect in the shareholders meeting of the company, whether in any descend

(B) And disclose their interests and personal information that is relevant to the Board of Directors of the Company to understand the relationships and transactions with the company or its parent company that 81

Annual Report 2015

may cause conflict of interest and avoid transactions that may cause conflict of interest with the company or its parent company. The Board of Directors is responsible for informing the Board of Directors of the Company informed by setting the time limit for the judge to consider or approve any considerations that take into consideration the overall interests of the company.

(F) Clarify and / or transmit of data or documents related to the company if the company detects any significant issues. (G) Responsible for the company's internal control system, risk management system and anti-fraud system appropriately, effectively and strong enough to ensure that the operation of the company will adhere to the policy of the company, Laws and regulations in announcement of the corporate governance of listed companies by Capital Market Commission, the Securities and Exchange Commission and the Stock Exchange of Thailand including of work arrangement which clearly show that the company has sufficient disclosure information to public in accordance with significantly procedure the continuous and reliable transaction. There must be a channel for Directors and Executives of major company to get the information of the Company to monitor the operating results and financial position. The transaction between the Company's directors, Executive Director and company Executives and significant corporate transactions efficiently in addition to providing a mechanism to monitor the system in such a major company. The team of internal auditors and independent directors of major company can access information directly and manage a reporting system to monitor and report to directors and executives of major company to ensure that the Company regularly follow the conducted system.

However the directors of the company must not participate in the self-interest or a conflict of interests, both directly and indirectly as well. Incidentally, any Director, Executives or person who is related with the company get the benefit financially other than they normally would or cause the Company or its parent company the damaged will be presumed that the action is inconsistent with the interests of the company significantly. (A) The transaction between the Company and the Board of Directors, executives or individuals who are not related by the rules of the transaction. (B) The use of information of the company unless the information is already publicly available. (C) The use of the property or the business opportunity of the Company in the same way that big companies do and violation of rules or a general practice, according to the Capital Market Commission's Notification.

4. Prohibiting any of Directors, Executive Director, Executives, officers, employees or assignees of the company including spouses and underage of those persons use the internal information of company both derived from duty act or in any other way that are or may be affected significantly to the Company and / or to benefit themselves or others, whether directly or indirectly and whether they get returns or not.

(D) Report the business plan, business growth, large investment projects as approved by the company as well as investment joint with other operators to the company through the monthly reporting and to clarify the operating results and / or submission of supporting documents in the case when the company requested. (E) Clarify the operating results and / or submission of supporting documents in the case when the company requested.

82 Annual Report 2015

Buriram Sugar Public Company Limited

5. Directors, Executives Director or a related person of the Company is about to do business with the company, the transaction will be approved by the Board of Directors and / or the Board of Executives of the Company and / or the shareholders of the Company and / or the shareholders meeting of the company (Consider by case) As the transaction was calculated by the rules prescribed by the relevant notifications of the Capital Market Supervisory Board and the Board of the Stock Exchange of Thailand. The acquisition or disposition of assets and / or the connected transaction. (Consider by case) shall apply mutatis mutandis. However, unless the transaction is a commercial agreement in the same way that a person would be conducted with the parties in the same situation, the bargaining power of trade without influence in their status as Directors. Executive Director, Executives of the company or any relative (Consider by case) The trade agreements that have been approved by the Board of Directors of the Company or adhere to the principle of the committee which already approved.

Personnel 1. Amount of Employee and Employeeâ&#x20AC;&#x2122;s Remuneration 2012

2013

Permanent Employee

Daily Worker

Total Remuneration Permanent Employee (Million THB) Employee

BRR

137

40.57

167

50.93

BSF

237

537

774

73.72

265

632

897

130.28

BEC

8.62

15.51

KBF

2.84

10.38

BRD

128

195

31.17

129

184

39.94

BPC

Total

537

709

1,246

156.91

584

799

1,383

247.04

83 Annual Report 2015

Daily Worker

Total Remuneration Employee (Million THB)

2014

2015

Permanent Employee

Daily Worker

Total Remuneration Permanent Employee (Million THB) Employee

Daily Worker

Total Remuneration Employee (Million THB)

BRR

112

186

61.52

129

201

76.71

BSF

300

739

1,039

155.56

277

790

1067

179.87

BEC

17.68

19.42

KBF

11.22

16.71

BRD

132

179

41.84

142

191

46.42

BPC

1.88

12.82

Total

678

915

1,593

289.80

710

953

1,663

351.95

2. Provident Fund The Company appointed SCB Asset Management Co., Ltd. (SCBAM) to be as the provident fund manager of the Company and its subsidiaries since August 22, 2013.

3. The personnel development of the company The company personnel development is as follow: â&#x20AC;˘ Collaboration with external organizations to develop employees. The company has partnerships with external organizations such as the Skill Development Center to train employees If the employees are be able to pass the Department of Skill Development standard, It will be based on the minimum salary rates that the Department of Skill Development has determined. In addition, each year, every department will have a budget for training employees to third parties to develop and / or update their professional knowledge. â&#x20AC;˘ The scholarship, the company provides scholarship for further education employees in tertiary education and graduate students under the conditions employees to return capital to the company.

84 Annual Report 2015

Buriram Sugar Public Company Limited

Director and Executive Profile NAME/POSITION 1. Mr. Prachuab Chaiyasan (71 years old) - Chairman of the Board of Director - Independent Director - Chairman of the Audit Committee

EDUCATION BACKGROUND

WORK EXPERIENCE

% OF SHARES

- Bachelor of Political Science, Thammasat University

0.05

PAST 5 YEARS - PRESENT - Chairman of the Board of Director - Independent Director

- Doctor of Philosophy, Honorary Degree in Political Science, Ramkhamhaeng University

- Chairman of the Audit Committee - Director - Chairman of Audit Committee

- Director Accreditation Program (DAP) class 54/2006, Thai Institute of Directors (IOD)

Taiping Ethanol Co., Ltd.

- Director

Thai Nguan Metal Public Company Limited

- Chairman of Council Ramkhamhaeng University - Director

(70 years old) - Independent Director - Audit Committee

- Bachelor of Law, Thammasat University

- Independent Director - Audit Committee - Independent Director

- Bachelor of Accounting, Thammasat University

- Audit Committee - Director

- Director Accreditation Program (DAP) class 55/2006 Thai Institute of Directors (IOD) - Director Certification Program (DCP) class 79/2007 Thai Institute of Directors (IOD) - Audit Committee Program (ACP) class 17/2007 Thai Institute of Directors (IOD) - Certified Public Accountant No. 2974 85 Annual Report 2015

Thai Ethanol Power Public Company Limited

- Director - Chairman of Audit Committee

- Director Certification Program (DCP) class 83/2007 Thai Institute of Directors (IOD)

2. Mrs. Seenual Tasanapant

Buriram Sugar Public Company Limited

Ramkhamhaeng University Paksong Capital Co., Ltd. Buriram Sugar Public Company Limited The Steel Public Company Limited Taiping Ethanol Co., Ltd.

- Advisor of Administrative Director

Mahidol University Savings and Credit Co-Operative Limited

- Manager

Mahidol University Savings and Credit Co-Operative Limited

NAME/POSITION

EDUCATION BACKGROUND

3. Mr. Sirichai Sombutsiri

- Bachelor of Business Administration in Accounting (Honor), Thammasat University

(62 years old) - Independent Director - Audit Committee

WORK EXPERIENCE

% OF SHARES 0.05

- Master of Business Administration in Finance, University of Southern California, USA - Advanced Management Program, Harvard Business School, USA

PAST 5 YEARS - PRESENT - Independent Director - Audit Committee

Buriram Sugar Public Company Limited

- Vice President of Business Customer

Siam Commercial Bank Public Company Limited

- Vice President of Big Customer

Siam Commercial Bank Public Company Limited

- Director

OHTL Public Company Limited

- Independent Director - Director

- Certificate, The Joint State Private Sector Regular Course of the National Defense College Class 15 - Director Accreditation Program (DAP) class 25/2004 Thai Institute of Directors (IOD) - Capital Market Academy Leadership Program class 5, Capital Market Academy

86 Annual Report 2015

- Executive Director

Land and Houses Bank Public Company Limited

Buriram Sugar Public Company Limited

NAME/POSITION

EDUCATION BACKGROUND

4. Mr. Anant Tangtongwechakit - Bachelor of Business (51 years old) Administration (Marketing), Assumption University - Chairman of Executive

4.06

- Chairman of Risk Management Committee - Managing Director

PAST 5 YEARS - PRESENT - Chairman of Executive Committee - Director

Buriram Sugar Public Company Limited

- Chairman of Risk Management Committee

Committee

- Director

WORK EXPERIENCE

% OF SHARES

- Master of Art (Political Science, Politics and Government), Ramkhamhaeng University

- Managing Director - Chairman of the Board of Directors - Chairman of Executive Committee

Buriram Sugar Factory Co., Ltd.

- Managing Director - Chairman of the Board of Directors Buriram Sugarcane Research - Chairman of Executive Committee and Development Co., Ltd.

- Certificate of Sugar Technology class 1, Faculty of Agro-Industry, Kasetsart University

- Chairman of the Board of Directors

Buriram Energy Co., Ltd.

- Chairman of Executive Committee - Director Accreditation Program (DAP) class 99/2012, Thai Institute of Directors (IOD)

- Chairman of the Board of Directors - Chairman of Executive Committee

Key Brand Fertilizer Co., Ltd.

- Chairman of the Board of Directors

Buriram Power Co., Ltd.

- Chairman of Executive Committee

- Capital Market Academy Leadership Program class 15, Capital Market Academy

- Director

Thai Sugar Producers Association

- Director

The Thai Sugar Trading Co., Ltd.

- Chairman of the Board of Directors BRS Train Terminal Logistics Co., Ltd. - Chairman of Executive Committee

- Diploma, The National Defense Course of the National Defense College Class 56

- Director

Taksin Pattana Co., Ltd.

- Director

Suriwan Enterprise Co., Ltd.

- Director

A Team Intertrade Co., Ltd.

- Director

Siphandone Bolaven Co., Ltd.

- Chairman of Executive Committee - Director - Chairman of the Board of Directors - Chairman of Executive Committee - Chairman of the Board of Directors - Chairman of Executive Committee - Chairman of the Board of Directors - Chairman of Executive Committee 87 Annual Report 2015

T Plus Property Co., Ltd. Buriram Power Plus Co., Ltd. Buriram Super Power Co., Ltd. Buriram Agro Energy Co., Ltd.

NAME/POSITION

EDUCATION BACKGROUND

5. Mrs. Wanphen Punyaniran - Secondary school grade 2, Marywitthaya Prachinburi School (49 years old) - Director

4.05

- Director Accreditation Program (DAP) class 98/2012, Thai Institute of Directors (IOD)

- Risk Management Director - Senior Vice Managing Director (Domestic Investment : Agricultural Business)

PAST 5 YEARS - PRESENT - Director

Buriram Sugar Public Company Limited

- Director

Key Brand Fertilizer Co., Ltd.

- Executive Director - Managing Director

6. Mrs. Jirawan Pongpichitkul - Bachelor of Science (Nursing and Midwifery), (48 years old) Mahidol University - Director - Executive Director

WORK EXPERIENCE

% OF SHARES

4.05

- Director - Executive Director

Buriram Sugar Public Company Limited

- Risk Management Director - Senior Vice Managing

- Master of Public and Private Management, National Institute of Development Administration

Director (Domestic Investment : Agricultural Business) - Director

- Director Accreditation Program (DAP) class 98/2012, Thai Institute of Directors (IOD)

- Executive Director - Director - Executive Director

Buriram Sugar Factory Co., Ltd. Buriram Sugarcane Research and Development Co., Ltd.

- Managing Director - Director

Buriram Energy Co., Ltd.

- Director

Key Brand Fertilizer Co., Ltd.

- Executive Director - Director

Buriram Power Co., Ltd.

- Director

Buriram Power Plus Co., Ltd.

- Director

Buriram Super Power Co., Ltd.

- Director

Buriram Agro Energy Co., Ltd.

88 Annual Report 2015

Buriram Sugar Public Company Limited

NAME/POSITION

EDUCATION BACKGROUND

7. Miss Chittima Tangtrongwechakit - Bachelor of Business Administration (Marketing) (45 years old) - Director - Executive Director - Risk Management Director - Senior Vice Managing Director (Domestic Investment : Commercial)

WORK EXPERIENCE

% OF SHARES 4.05

PAST 5 YEARS - PRESENT - Director - Executive Director

Buriram Rajabhat University

Buriram Sugar Public Company Limited

- Risk Management Director

- Director Accreditation Program (DAP) class 98/2012, Thai Institute of Directors (IOD)

- Senior Vice Managing Director (Domestic Investment : Commercial) - Director - Executive Director

Buriram Sugar Factory Co., Ltd.

- Senior Vice Managing Director (Purchasing)

89 Annual Report 2015

- Director

Buriram Sugarcane Research and Development Co., Ltd.

- Director

Buriram Energy Co., Ltd.

- Director

Key Brand Fertilizer Co., Ltd.

- Director

Buriram Power Co., Ltd.

- Director

Buriram Power Plus Co., Ltd

- Director

Buriram Super Power Co., Ltd.

- Director

Buriram Agro Energy Co., Ltd.

NAME/POSITION

EDUCATION BACKGROUND

% OF SHARES

8. Mr. Sarit Tangtrongwechakij - Bachelor of Business Administration (Management), (45 years old) Buriram Rajabhat University - Director - Executive Director - Risk Management Director - Senior Vice Managing Director (International Investment)

4.05

- Master of Art (Political Science, Politics and Government), Ramkhamhaeng University - Director Accreditation Program (DAP) class 98/2012, Thai Institute of Directors (IOD)

WORK EXPERIENCE PAST 5 YEARS - PRESENT - Director - Executive Director - Risk Management Director - Senior Vice Managing Director (International Investment) - Director - Executive Director

- Director

- Director - Executive Director

Buriram Sugarcane Research and Development Co., Ltd. Buriram Energy Co., Ltd.

- Director

Key Brand Fertilizer Co., Ltd.

- Director

Buriram Power Co., Ltd.

- Executive Director - Director - Executive Director - Director - Executive Director - Director - Executive Director - Director - Executive Director

Annual Report 2015

Buriram Sugar Factory Co., Ltd.

- Senior Vice Managing Director (Production) - Executive Director

Buriram Sugar Public Company Limited

Buriram Power Plus Co., Ltd. Buriram Super Power Co., Ltd. Buriram Agro Energy Co., Ltd. Siphandone Bolaven Co., Ltd.

- Director

World International Network Co., Ltd

- Director

Buriram Premier Bike Co., Ltd.

Buriram Sugar Public Company Limited

NAME/POSITION

EDUCATION BACKGROUND

9. Mr. Adisak Tangtrongweachakit - Bachelor of Business Administration (Marketing), (43 years old) University of the Thai Chamber - Director of Commerce - Executive Director - Risk Management Director - Senior Vice Managing Director (Energy Business)

WORK EXPERIENCE

% OF SHARES 4.05

PAST 5 YEARS - PRESENT - Director - Executive Director

Buriram Sugar Public Company Limited

- Risk Management Director - Senior Vice Managing

- Master of Business Administration (Management), Bellevue University, USA

Director (Energy Business) - Director - Executive Director

- Director Accreditation Program (DAP) class 98/2012, Thai Institute of Directors (IOD)

Buriram Sugar Factory Co., Ltd.

- Director

Buriram Sugarcane Research and Development Co., Ltd.

- Director

Buriram Energy Co., Ltd.

- Executive Director - Managing Director - Director

Key Brand Fertilizer Co., Ltd.

- Director

Buriram Power Co., Ltd.

- Executive Director - Managing Director - Director - Executive Director

Buriram Power Plus Co., Ltd.

- Managing Director - Director - Executive Director

Buriram Super Power Co., Ltd.

- Managing Director - Director - Executive Director - Director - Executive Director

Buriram Agro Energy Co., Ltd. BRS Train Terminal Logistics Co., Ltd.

- Managing Director - Vice Chairman of the Board of Directors

91 Annual Report 2015

The Federation of Buriram Industries

Corporate Governance Company focus on operating under good governance. The Board of Directors is committed to follow the principles of good corporation. It will also enhance the transparency and efficiency of the management. This will build trust to the shareholders, investors and all concerned parties. The Board of Directors Meeting No. 1/2012 on February 27, 2012. The Board of Directors has approved a policy of good governance. According to the Stock Exchange of Thailand It covers the 5 principles of good corporate governance as follow:

Category 1 : Rights of Shareholders The Board of Directors is always concerned and valued the rights of the Companyâ&#x20AC;&#x2122;s shareholders such as stockbrokerage, stock transfer, corporate information provision, shareholder meeting attendance and vote,etc. ;Therefore, the corporate governance policy is placed by regarding with the basic rights and convenience of all shareholders. The relevant important polices are described below. 1. The Company lays down a policy of providing the information, adequacy and timing, to all of its shareholders about the date, time, venue, agendas of each meeting of the shareholders, as well as all other associated issues for any decision-making in the meetings of shareholders as required by laws.

4. The Chairman of the meeting of the shareholders should allocate sufficient time to the shareholders. Some shareholders may equally submit their questions relating to any of the meeting agendas during the meeting. The Board of Directors will participate in the meeting to answer the interrelated question if any.

2. Should a shareholder not be able to physically present at a meeting, they may appoint their proxy or an independent director as their proxy to attend and vote in the meeting via proxy form as provided in the Attachment.

5. To provide correct and complete meeting minutes for shareholder to access. 6. To publish news and information regularly via the Companyâ&#x20AC;&#x2122;s website, the SET, and the SEC.

3. Prior to the meeting date, The Company may inform the shareholders of the procedure of voting for resolution as stated in the Companyâ&#x20AC;&#x2122;s regulation.

92 Annual Report 2015

Buriram Sugar Public Company Limited

Category 2 : Equitable Treatments of Shareholders

To ensure fair and equitable treatments of shareholders, the Company has policy as follows:

1. The Company allows its shareholders to propose matters to be included in a meetingâ&#x20AC;&#x2122;s agenda or nomination of candidates for corporate directors, prior to the meeting, with requirements and procedures. 2. In the Annual General Meeting, The majority of shareholders, who are the Companyâ&#x20AC;&#x2122;s executives, shall not propose other additional agendas, particularly some important agendas, without notifying the shareholders in advance to ensure that every shareholder has sufficient time for data investigation before making decisions on voting. 3. The Company has a policy of encouraging the shareholders to use the proxy to enable the shareholders to determine the direction of voting. At least one independent director should be proposed for the shareholdersâ&#x20AC;&#x2122; proxy.Such proxy form shall be delivered by the Company, along with the name(s) of independent director. 4. The Company has a policy of using the ballot tickets for any significant agendas, e.g. connected transactions, acquisition or disposal of significant assets, etc. for the transparency and verification of voting in case of any arguments. And in the appointment of directors, the Company encourages the shareholders to exercise their right in appointing each director. 5. The Company issues the written guidance on retention and prevention of the use of the internal information. This guidance is informed to all employees in the organization for their compliance. Every director and executive has a duty of reporting his interest or stake to the Company as required by laws.

93 Annual Report 2015

Category 3: Role of Stakeholders The Company realizes the significance of other stakeholders contributing to its financial stability and sustainability. These stakeholders include, for instance, customers, employees, trading partners, creditors, and the surrounding community. The Company has always ensured integrity and fair treatment for each stakeholder through its established business ethics policies as follows:

SHAREHOLDERS

CUSTOMERS

: The Company focuses on ethical operation and discloses important information such as financial statement and other related information to shareholders transparently, accurately, completely and timely. : The Company gives importance to customers with the highest responsibility through quality control of products and services under fair conditions. All customers’ information is clandestine and will not be disclosed or unethically used.

EMPLOYEES

: The Company ensures fair and equal treatment for all employees. Employees are entitled to benefits, safety policy, and suitable working environment according to their positions without discrimination. Provident fund has been set for corporate employees’ security. The Company also encourages its employees’ knowledge and skill development through in-house and outside training.

TRADING PARTNERS

: The Company adheres to integrity, equality, and rights of benefits. The Company always respects its trading partners’ legal rights and rights as specified in agreements.

COMPETITORS

: The Company supports the principles of fair competition and operates its business with integrity without any legal or ethical wrongdoings.

COMMUNITY, SOCIETY, AND ENVIRONMENT

: The Company has always been responsible to the society and environment via promoting social activities that bring sustainable development to the community. The Company also strictly complies with applicable environmental laws and develops preventive strategy to control environmental impact consistently.

94 Annual Report 2015

Buriram Sugar Public Company Limited

Category 4: Disclosure of Information and Transparency The company ensures that corporate information is provided correctly, accurately, on time, and transparently to The Stock Exchange of Thailand, The Securities and Exchange Commission, and related organization through following corporate practices: 1. To disclose financial statement and other information that correlated to business accurately, truthfully and completely. The Company’s financial statements must fairly present in accordance with generally accepted accounting principle and receive approval from the Audit Committee and the Board of Directors before disclose to The Stock Exchange of Thailand, shareholders and related organization.

3. To disclose roles and duties of the Board of Directors and committees, number of meeting attended for each director, and the director and executive remuneration policy as disclosed in the 2014 annual statements (Form 56-1) and the 2014 annual report. For investor relation, the Company found a team to coordinate communications between the Company, investors, shareholders, and related organization which is Mr. Pattarapong Pongsawasdi

2. To disclose the Company’s information via the channels provided by the SET, the SEC, and via the Company’s website to ensure provision of information services for shareholders and associated individuals.

Category 5: Responsibilities of the Board The Board of Directors shall take care of the Company’s working system to ensure that all of the Company activities are done according to laws, objectives, regulations of the Company, and the resolution of shareholder meeting ethically.

1. Board of Directors

As of 31 December 2015 the Board of Directors consists of 9 members are included:

The numbers of directors are 9 persons totally. Each director’s term is according to the Company’s Article of Association section 15 which stated that in an annual general meeting, one third of the directors are required to resign. If the total number of directors does not allow such division, the number of directors to resign should be at the closest to one third of the total. The directors whose terms have completed may be reelected to the Board. The Board of Directors shall comprise of 6 Executive Directors and 3 Non-executive Directors which are legally qualified as the Independent Directors conforming to the SEC regulation. The structure is in accordance with the SEC ACT B.E. 2535 which stated that of registered company must have Independent Directors more than or equal to 1 out of 3 members of board of directors.

Name-Surname

1. Mr. Prachuab Chaiyasan

Position

Chairman of the Board of Directors (Independent Director)

Director Mr. Anant Tangtongwechakit Director Mrs. Wanphen Punyaniran Director Mrs. Jirawan Pongpichitkul Director Miss Chittima Tangtrongwechakit Director 6. Mr. Sarit Tangtrongwechakij Director 7. Mr. Adisak Tangtrongweachakit Directors (Independent 8. Mrs. Seenual Tasanapant

2. 3. 4. 5.

Director)

9. Mr. Sirichai Sombutsiri 95

Annual Report 2015

Directors (Independent Director)

The Board of Directors appointed the Company secretary that has the role and responsibilities of the Board of Directors and shareholders, such as holding meeting, recording and doing minutes of meeting and coordination and monitoring compliance with the resolution of the Board of Directors and shareholders. As well it is vital to care to advise the committee on rules and administration, to practice the storage of important documents of the Company.

of the Company, its subsidiaries, and its joint ventures in order to ensure that they are all efficient and proficient 5. To prepare the annual reports of the Company and/or the Board of Directors in accordance with all related laws and regulations required. 6. To care for and provide a governing mechanism to prevent the potential conflicts of interest between any stakeholders and the Company, its subsidiaries, and its joint ventures.

Scope of Duties and Responsibilities of the Board of Directors 1. To undertake and manage the Company responsibly, carefully, trustworthily, and in conformity with any and all related laws, objectives, and Articles of Association of the Company, as well as resolutions of the meetings of shareholders.

2. To consider and approve any significant matters related to the Companyâ&#x20AC;&#x2122;s business operations, e.g. vision, mission, policies, business strategies, goals and operating plans, financial targets, and budget of the Company and its subsidiaries.

9. To determine and amend the authorized directors of the Company. 10. To recruit and appoint a person with knowledge, competence and experience that the Board of Directors deems appropriately, and with all other qualifications required by related laws and regulations to hold a position of directorship in case any director vacate his office due to other reasons apart from the expiration of the term of office.

96 Annual Report 2015

Buriram Sugar Public Company Limited

12. To appoint or nominate person to be director or executive in the subsidiaries and / or joint venture in proportion of shareholding in the subsidiaries and joint venture. Such appointed or nominated director or executive shall be legally qualified for duties and responsibilities as well as not possess any characteristics prohibited in accordance with announcement of the Securities and Exchange Commission.

13. To consider annual dividend payment and interim dividend payment of the Company and its subsidiaries.

20. To appoint and/or empower one or several directors or persons to take any acts under the scope of directorship power and as the Board of Directors deems appropriately. However, such empowerment may be suspended, cancelled or altered.

14. To consider and set up the criteria of remuneration payment to the Companyâ&#x20AC;&#x2122;s directors and top management. 15. To consider appropriate amount of remuneration for directors of the Company in line with the criteria of remuneration payment set up by the Board of Directors which shall be proposed to the meeting of shareholders for consideration and approval.

21. To provide and care for the communication channels to connect with each group of shareholders and stake holders of the Company appropriately. 22. To care for the accuracy, completion, timing and transparent disclosure of important information related to the Company via fair and creditably accessible channels.

23. To set up and amend any matters prescribed in the regulations and Articles of Association of the Company.

97 Annual Report 2015

Scope of Duties and Responsibilities of the Audit Committee

24. To engage other power, duties and responsibilities as required by laws and other related regulations, Articles of Associations of the Company, and the resolutions of the meetings of shareholders.

1. To review the financial statements of the Company to ensure that they are disclosed accurately and adequately by coordinating with the external auditor and the Management who are responsible for the preparation of quarterly and yearly financial statements. The Audit Committee may have the auditor review or audit any transactions necessarily or importantly while auditing the Company’s account.

In case that the Board of Directors or their authorized representative must carry out or enter into any transaction which may cause potential conflict of interest with the Company and/or its subsidiaries and/or related companies, the Board of Directors or their authorized representative will have no power to approve the specified transaction except the approval is in accordance with the policies and regulations which the Board of Directors and/or shareholder’s meeting (case by case) has considered and approved under laws, regulations, objectives, or the Articles of Association of the Company.

2. Subcommittees

Management Structure of the Company consists of the Board of Directors and 3 Sub-Committees which are Audit Committee, Risk Management Committee and Executive Committee according to the good corporate governance.

4. To advise the Board of Director and executive to improve working process and system efficiently to reduce the risk for making financial report correctly and usefully.

2.1 Audit Committee As of December 31, 2015, the Audit Committee has 3 members that the Chairman of the Audit Committee and the two audit directors are independent directors to ensure transparency and independence in the performance of duties, the detail is as follows; Name

Position

1. Mr. Prachuab Chaiyasan

Chairman of the Audit Committee

2. Mrs. Seenual Tasanapant 3. Mr. Sirichai Sombutsiri

Audit Committee Audit Committee 98

Annual Report 2015

Buriram Sugar Public Company Limited

6. To control and monitor the operation of the internal audit office according to the internal audit office charter