PRG : Annual Report 2015 (EN) by ar.prg

ANNUAL REPORT 2015

บร�ษัท ปทุมไรซมิล แอนด แกรนาร� จำกัด (มหาชน)

ANNUAL REPORT

2015

รายงานประจ�ำปี 2558 : บริษัท ปทุมไรซมิล แอนด์ แกรนารี จ�ำกัด (มหาชน) ANNUAL REPORT 2015 : PATUM RICE MILL AND GRANARY PUBLIC COMPANY LIMITED

002

บริษัท ปทุมไรซมิล แอนด์ แกรนารี จ�ำกัด (มหาชน)

CONTENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

Message from the Board of Directors Financial Highlights The Board of Directors Executive Management Policy and Business Overview Nature of Business Operations Revenue Structure Marketing and Competition Occupational Safety, Health and Environment Risk Factors General Information and Other Significant Information Dividend Payment Policy Shareholders and Management Structure Good Corporate Governance Corporate Social Responsibility Internal Control and Risk Management Report on the Responsibility of the Board of Directors towards Financial Reports Audit Committee’s Report Report of Nomination and Remuneration Committee Auditor’s Report and Financial Statements Related Transactions Management Discussion and Analysis Remuneration for Auditor Profile of Directors, Executive Management, Controlling Persons and Company Secretary Report of Changes in the Company’s Securities Holding by Directors and Executive Management Reference Persons

“In this regards, investors may obtain further information from Form 56-1 at www.sec.or.th or www.patumrice.co.th and www. patumrice.com”

Page 3 5 6 7 8 16 21 23 27 28 31 32 33 48 63 66 71 72 74 75 131 132 133 134 149 151

1. Message from the Board of Directors In 2015, the country is still in the reform process to organize and improve fundamentals for sustainable development, which would take some period of time to achieve because the economic, industrial and consumer confidence index was not recovered, the export sector has failed to grow, and the economics decline of Thailand’s top trading partners that some of whose economics did not recover well.

Mr. Suphadej Poonpipat Chairman of the Board of Directors

In the past year, the overall food business was influenced from internal and external the country especially the volatile exchange rates and the decrease of fuel prices result in a significant decrease in the rice export to the petroleum exporting countries in Africa, which is the country's main trade partners. For the country’s internal economic environment, consumers are less likely to spend due to uncertain factors effecting the their living. Moreover, the bombing incident at Erawan intersection in July affecting the traveling to Thailand of business travelers and tourists from abroad. The group of Patum Rice Mill and Granary Public Company Limited foresee various factors impacting the operation and adjust the strategies to be the refiners of mill rice and packed rice producers for the Ministry of Commerce for the government to government trade resulting in the rise of the sales higher than the target set. The Company also adjust its strategies to increase the sales of packed rice with high competitive in the country to support consumer purchasing power. For the restaurant and food court business, the Company expanded 2 branches of Suki Number One at Glas Haus Building and MBK Center together with expanding service area of the Food Island food court on the 6th Floor of MBK Center by increasing number vendors from 26 to 56. The Company also renovate and improve atmosphere of THE FIFTH food avenue on the 5th Floor of MBK Center result in an increase of revenue. The Company will still improve and develop our services by increasing number of vendor and variety of foods to be more attractive, increase co-promotion with more trade partners for the more value of money of our customers as well as expanding more branches to increase the portion of revenue from the business of restaurant and food court. The Company received the national award’s for the national project of disease-free, danger-free physically and mentally safe workplace, run by Department of Disease Control, Ministry of Public Health. The Company declared its intention to participate in the anticorruption campaign “Private Sector Collective Action Coalition against Corruption” (CAC). The Company corporate with Ramathibodi Foundation to fund the construction of Chakri Naruebodindra Medical Institute. Moreover, we still the only Company continuously receives the excellent standard certificate (with a picture of hands together in a praying position with a star— ), granted by the Department of Internal Trade, the Ministry of Commerce for the packed Jusmine rice.

For the business performance, though faced with the unexpected incident throughout the year. Patum Rice Mill and Granary Public Company Limited has total revenue for the year 2015 ending on December 31, 2558 amounting to THB 2,899 million, an increase by THB 602 million, profit for the year of THB to 325 million. As at December 31, 2015, the Company has financial stability with total assets of THB 8,894 million, an increase by approximately THB 374 million and debt of THB 2,462 million. We committed to developing our business. The Company is analyzing the way to expand to warehouse and distribution business (Logistics Solution) and to increase restaurant and food court branches to increase consumer awareness. For the food products, the Company will increase new products under the trademarks Mah Boonkrong and Mah Boonkrong Plus. I, as the chairman of the board, would like to express my sincere gratitude to customers, shareholders, investors, directors, executives, employees and everyone involved for the trust and support given to our business operation. I believe that together we will move forward and achieve the stipulate objective, goals and vision.

Mr. Suphadej Poonpipat Chairman of the Board of Directors

Mr. Suvait Theeravachirakul

Mr. Somkiat Makcayathorn

Vice Chairman of the Executive Committee

Managing Director

2. Financial highlights Description Total revenues Total revenues growth (%) Revenues from sales Revenues from sales growth (%) Gross margin Net profit (loss) attributable to equity holders of the Company

Return on total revenues (%) Value per share (Baht) Par value per share (Baht) Book value per share (Baht) Profit (loss) per share attributable to equity holders of the Company

Financial Ratios Total assets Total liabilities Shareholders' equity Return on equity (%) Return on assets (%) Total asset turnover (times) Inventory asset turnover (times) Current assets to current liabilities (times) Debt to equity raio (times) Issued and paid-up capital (million Baht) Dividend Dividend (Million Baht) Dividend per share (Baht) Dividend payout ratio (%)

Year 2015 (Jan.-Dec)

Unit : Million Baht Year 2013 (Jan.-Dec)

Year 2014 (Jan.-Dec)

2,899.1 26.2 2,549.4 31.1 454.5 325.3 11.2

2,297.9 (8.8) 1,945.2 (11.1) 295.1 328.2 14.3

2,518.9 11.8 2,188.3 14.6 227.8 294.0 11.67

1.0 10.6 0.54

1.0 11.0 0.55

10.00 104.38 4.90

Year 2015 31-Dec-15

Unit : Million Baht Year 2013 31-Dec-13

Year 2014 31-Dec-14

8,894.2 2,462.3 6,431.9 5.06 3.66 0.33 12.47 0.79 0.38 600

8,520.4 1,908.5 6,611.9 4.96 3.85 0.27 8.79 0.86 0.29 600

8,411.6 2,084.5 6,327.1 4.65 3.50 0.30 9.18 0.87 0.33 600

* * *

300.00 0.50 91.41

270.00 0.45 91.84

* The Board of Directors resolved on September 29, 2015 to pay the Interim dividend of Baht 0.25 for the period between January 1, 2015 to June 30, 2015 which has already paid on October 26, 2015. In addition, The Board of Directors will propose the shareholders attending the Annual General Meeting for the year 2016 to consider and approve the allocation of profit and dividend payment.

â&#x20AC;&#x153;In this regards, investors may obtain further information from Form 56-1 at www.sec.or.th or www.patumrice.co.th and www. patumrice.comâ&#x20AC;?

3. Board of Directors

Mr. Suphadej Poonpipat Chairman of the Board of Directors and Chairman of the Executive Committee

Dr. Pornsiri Poonakasem

Assoc.Prof.Dr.Sathit Parniangtong

Chairman of the Audit Committee and Independent Director

Chairman of the Compensation and Nomination Committee Member of the Audit Committee and Independent Director

Mr. Suvait Theeravachirakul Vice Chairman of the Executive Committee, Member and Secretary of the Compensation and Nomination Committee

Mr. Dej Bulsuk

Mr. Serm Henry Phenjati

Independent Director

MemberoftheCompensationandNominationCommittee, MemberoftheAuditCommitteeandIndependentDirector

Mr. Kasemsuk Chongmankhong

Mr. Somkiat Makcayathorn

Director

Director and Managing Director

4. Executive Management

Mr. Somkiat Makcayathorn Managing Director

Mr. Kunchit Dilokwanich

Dr. Somboon Thitinansmboon

Ms. Pimonrat Chitpavanaskul

Mr. Ekasin Tortarameta

Senior Vice President, Administration Division

Senior Vice President, Operation and Raw Material Division

Senior Vice President, Sales and Marketing Division

Vice President, Restaurant and Food Center

Miss Ratana Pakkurk

Mrs. Preeyanuch Nuntachote

Miss Dararat Homrossukhon

Deputy Vice President, Administration Division

Manager, Finance Department

Secretary of the Company and Compliance Supervisor

5. Policy and Business Overview Vision, mission, goals and strategies of the Company or the Group Vision "A leading group of companies in food business and a quality leader in packaged rice market for the utmost benefit of stakeholders with good corporate governance” Mission • • • • •

Standardize of products and services under the brand MBK Food Solution. Aim at developing systems and high-potential employees. Expand to new business as the potential source of revenue. Create a diversified business partner network. Operate with good corporate governance.

Goals and strategies The company’s goals and strategies for the next 3-5 years are as follows. The goal of sales and marketing As packaged rice is the main product of the Company, the main goals of Patum Rice Mill and Granary Public Company Limited is to be the leading distributor of packaged rice under the trademark “Mah Boonkrong Rice” who is one of the top 3 in terms of revenue from sales. In according with the target of growing in the food business, the Company’s marketing and sales strategies will focus on the following issues. 1. Increase awareness of Mah Boonkrong Rice and Mah Boonkrong Plus as the high quality trademarks with fair price. Building trust and confident of consumers by emphasizing on communication through radio, social media, sales and promotion booth in different areas as well as marketing activities to reach target customers. 2. Develop new products and packaging to respond to consumer with greater different needs. 3. Expand the distribution channels to reach more consumers by setting the goal that Mah Boonkrong Rice shall be placed in all existing modern trade channels. The Company expects the more expanding into the traditional trade by targeting to local supermarkets especially the large traditional stores that turned from traditional wholesalers to be semi supermarkets along with more expanding into catering groups such as universities, hospitals, chain restaurants that have branches across the country. For the 2016 international market, the Company will focus on expanding its market to the Asean Economics Community (AEC), and some countries in Asia such as China, a country in which the market has expanded considerably and having quite similar culture results in quite similar consumer behavior compare to the Thai’s. 4. In terms of price, it will be used as a tool in the implementation of the promotion at the appropriate time. The Company conduct a policy of risk diversification in terms of raw material prices, production and logistics costs to achieve competitiveness by taking into account the market situation, competitive conditions of competitors and its’ profit as the primary. “Mah Boonkrong Rice” has won plates of award for the production of quality packaged rice for 8 consecutive years and it is the first Company in Thailand that has been awarded the standard certificate (with a picture of hands together in a praying position inside a square), and the excellent standard certificate (with a picture of hands together in a praying position with a star— ), granted by the Department of Internal Trade, the Ministry of Commerce. All the awards the Company

received reflected the high quality image of Mah Boonkrong Rice and also building customer trust and confidence. The goal of production and quality control The Company aims at producing high quality and cost-effective products. The target was reflected by quality management system ISO 9001:2008 applied and the quality policy adopted "to instill moral awareness among its employees as well as develop organization effectiveness continuously to satisfy customer”. In order to achieve the policy, the Company specified quality objectives as a performance indicator to evaluate the production effectiveness and to control the quality of its products. The company has achieved GMP (Good Manufacturing Practice) compliance for quality assurance in the food safety system and HACCP (Hazard Analysis and Critical Control Point) certification which emphasize in production process control especially critical control point preventing any hazardous food from reaching consumers. The company is the first pre-packed mill rice factory in Thailand that has been certified both standards from SGS (Thailand) Company Limited. Moreover, since 2011, the Company continued to operate according to the rule set out in the BRC (British Retail Consortium), a quality assurance system for products to be sold in the retail market for European countries and North America that such products are certified for quality and safety. The Company also operated according to the legal standards for environmental health, including CSR starting from obtaining raw materials to delivering products to consumers. The Company passed the product testing both domestically and internationally and received the certification from SGS (Thailand) Company Limited. Another of our principal policy is that "Patum Rice Mill and Granary Group produce safety products in compliance with laws and quality standards and promote organization’s effectiveness continuously to satisfy our customers." In 2013, the Company received the certificate from the Food and Drug Administration Thailand for the standards that guarantee product quality and food safety. The goal of business diversification Although, presently, there is a decrease in growth rate of the product Fast Moving Consumer Goods (FMCG) because of the market conditions in both economic and social, the rice business still maintains. According to consumer behavior around the world, people still consume rice more or less depending of different factors. However, there are many competitors in rice business together with the intervention from the government occasionally. With the aim to diversify the business, to expand the business by adding new food products through both wholesale and retail and to expand the business to food services, the Company enhances a variety of businesses by sourcing new food products presented to the customers in all distribution channels of Mah Boonkrong rice, manages the food court on the 5th and 6th floor of MBK Center, operates Japanese restaurants by joining with a famous Japanese partner and the penetrates to operate hot pot-suki restaurant that offered promising growth rate. Those businesses mentioned are part of the Company strategy to promote sustainable growth by focusing on expanding its products and branches continuously. The Company also explores the feasibility study of investment in various food businesses to increase revenue and expand the operations of the company to cope with the market change and to diversify the risk.

The major change and development in the past year The Rice Business In 2015, the Rice Business had important development as follows: The Company is the rice producer for the Department of Foreign Trade— Ministry of Commerce— which is the government’s representative to negotiate by means of Government to Government (G2G). In the previous year, rice were exported to different countries— China, Philippines, and Indonesia. In 2016, the Company has continuously supported such policy of the government.

Moreover, the Company cooperated with Eureka Agro Machinery Co., Ltd. in order to create the innovation of “the machine of eliminating moths and their eggs by dielectric heating” which was the innovation to revolutionize Thailand’s rice packaged bag industry. It helped eliminate moths and their eggs in order to reduce chemicals. The Company received the national award’s silver plate for the national project of diseasefree, danger-free physically and mentally safe workplace, run by Department of Disease Control, Ministry of Public Health. This award indicated the care of employees with the focus on encouraging and supporting employees to have the good health, a decrease in non-communicable diseases and injuries, a decrease in diseases which were public problems of such areas, occupational and environmental safety, and good mental health. The change of the Company’s policy— from producing and distributing products to focusing on sales and marketing— was carried out in order to promote the products’ image under the rice brand “Mah Boonkrong” and “Mah Boonkrong Plus” both domestically and internationally for the sake of building the confidence of the quality of the MBK’s products. Therefore, operational guidelines were adapted to be suitable for policies’ directions. The sale distributions were divided into 2 main domestic and overseas channels as follows: The domestic sale had 3 separate channels 1. Modern trade channels included all modern retailers such as Tesco Lotus, Macro, Big C, Tops Supermarket, Max Value, 7-eleven, convenience stores etc. 2. General wholesale and retail channels included wholesale shops and grocery stores across the country. 3. Direct sales channel included hotels, hospitals, restaurants and factories etc. The overseas sale had 4 sale zones. 1. Europe and America 2. The Asian and Middle Eastern Countries 3. Africa 4. Australia, New Zealand and the Pacific Islands The distribution channels were divided into 2 channels as follows: 1. Distribution through the Company’s distribution center in Pathum Thani, Surat Thani, and Si Kew district. 2. Direct distribution from a producer to buyers in order to reduce transportation costs. Moreover, the Company has managed assets stored in warehouse buildings and ports in Pathum Thani for rent in order to increase incomes and efficiently occupy the area. For the policy for the year 2016, the Company wants to be the center of every type of food products in accordance with the word “Food Solution”. Therefore, the Company focuses on expanding more food business in terms of various styles of restaurants, a variety of food— apart from rice— for example, tamarind juice which was experimentally exported to the foreign market, and other food in order to satisfy consumers’ needs. The Company has continuously developed its business operations in order to support the sustainable growth for the business and increase the value added to the business as well. The Food Court and Restaurant Business Apart from producing and selling rice, the Company has run business about restaurants and food courts as follows: 1. The international food court called THE FIFTH Food Avenue THE FIFTH Food Avenue, run by MBK Food and Entertainment Co., Ltd., has operated since May 2006. With the concept of “THE FIFTH Food Avenue, New Definition of International Food Hall— the new style of an international food court you can feel satisfied.” The convenience and a variety of food are offered for customers. Whatever customers like to taste, everything can be found here at THE FIFTH Food Avenue. A variety of international

food— Thai, Japanese, Italian, Vietnamese, Indian, vegetarian, Arabic, Greek, Teppanyaki, and seafood— is offered. Also, an excellent gourmet-styled service is provided here. Moreover, a credit card with a limit of THB 1,000 is provided so that customers can freely choose what to eat. THE FIFTH Food Avenue has a dining place with over 500 seats and its areas are divided into the Dining zone and the Open Kitchen for various international food. In 2015, THE FIFTH Food Avenue was renovated and decorated in order to enhance its modern image. 2. The food court called MBK Food Island MBK Food Island, run by MBK Food Island Co., Ltd., is situated on the 6th floor of MBK Center. It is a dining place with over 1,000 seats available, with the concept of the food court provided with a variety of food, freshness, cleanness, and inexpensive prices. More than 50 shops which are selected to be part of MBK Food Island are famous and well recognized in order to satisfy both Thai and foreign customers’ needs. In 2015, MBK Food Island was decorated and renovated by expanding its takeaway and dining areas in order to increase a variety of shops and food. 3. The Japanese restaurants branded as “Fujio Shokudo” and “Tsurumaru Udon Honpo” The Japanese restaurants are a joint venture between the Company and Fujio Food System Co., Ltd. which is the famous company for possessing more than 13 brands of the restaurants from Japan. In 2015, the Company operated to open a total number of branches as follows: • Fujio Shokudo Restauratn offers Osaka authentic Japanese food. There is 1 branch on the 6th floor of MBK Center. • Tsurumaru Udon Honpo Restaurant offers Osaka-styled udon noodles. Emphasizing making fresh udon noodles at the restaurant, together with a various side dishes, it has 3 branches— the 6th floor of MBK Center, the 1st floor of HaHa Center, and the 1st floor of Plus Mall in Amata Nakorn. 4. Sukiyaki Number One Restaurant Sukiyaki Number One Restaurant, run by MBK Restaurant Group Public Co., Ltd., is operated with the concept of Teo-chew styled sukiyaki. This brand has been recognized for more than 50 years. Sukiyaki Number One is opened again for customers to have a classic taste of the original Teo-chew recipe. The restaurant has modern decoration but with the Chinese atmosphere all around. Its distinguished menu is a set of meat— pork, beef, chicken, and seafood— which are mingled with marinated sauce according to the original recipe in the proper temperature until the meat is well saturated. The softness of the meat is unique like nothing else. In 2015, Sukiyaki Number One had 3 branches— the 1st floor of the Nine Center, the 6th floor of MBK Center, and the 2nd floor of Glas Haus Ratchada Building. Because both restaurants have clearly different target customer groups, the Company can satisfy the needs of every customer group. The Company also plans to expand more food courts in several areas in order to expand a customer base according to a growth rate of retail business and office buildings. Apart from the food court business, the Company has viewed an opportunity of the restaurant business to grow as considering from the opening of the Japanese restaurants and Sukiyaki Number One Restaurant. A growth rate of consumers who like to dine out, the Company has a policy to expand restaurants in several areas in order to respond to the market’s growth. For the policy for the year 2016, the Company still focuses on the expansion of food business by considering the opening of various styles of restaurants which respond to consumer behavior and continuously maintaining the improvement in different aspects in order to support the sustainable growth.

Shareholding structure of PRG group Group Structure As at December 31, 2015, PRG group has divided the business operation into 3 groups consisting of 1. improving the quality and packaging of milled rice, 2. manufacturing and distribution of plastic bag, 3. restaurant and food center. The details are shown on the chart below. Shareholding structure of PRG group

MBK Public Company Limited Registered Capital: Baht 1,886.29 million, Paid-up Capital: Baht 1,886.29 million 74.52% (Book closing: 13rd October 2015)

Patum Rice Mill and Granary Public Company Limited Registered Capital: Baht 900 million, Paid-up Capital: Baht 600 million

Improving the quality and packaging of milled rice

Restaurant and food center

Manufacturing and distribution of plastic bag

99.99%

55.00%

PRG Granary Company Limited

MBK Food System Company Limited

75.00%

99.99% MBK Food Island Company Limited

MBK Food and Entertainment Co., Ltd.

Warehouse

Food service, restaurant

Food court management

Registered Capital: 500 MB

Registered Capital: 109.091 MB

Registered Capital: 500 MB

Registered Capital: 50 MB

Fojio Food System Singapore: 45%

99.99% Ratchasima Rice Company Limited

Paemala Spa Co., Ltd.: 25%

99.99%

49.99% Sima Pac

MBK Restaurant Group Co., Ltd.

Company Limited Milled rice

Produce and sale plastic bag

Restaurant

Registered Capital: 50 MB

quality selection and sell Registered Capital: 62.5 MB

Other 8 shareholders: 50%

99.99% Innofood (Thailand) Co., Ltd. Rice by product development

Registered Capital: 21 MB

Juristic person which PRG holds more than 10% Company name

PRG Granary Company Limited (PRG holds 99.99% of its paid-up capital)

Registration number Type of business Registered and paid-up capital

: : :

Head office

Telephone Fax

: :

0105517008690 Warehouse 500 million Baht consisting of 8,000,000 ordinary shares at the par value of 62.50 Baht each. 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathumtanee 12000. 0-2661-7900 0-2661-7901

Company name

: MBK Food Island Company Limited (PRG holds 99.99% of its paid-up capital) : 0105549022477 : Food court management : 500 million Baht consisting of 5,000,000 ordinary shares at the par value of 100 Baht each. : 444, 8th Floor, MBK Center Building, Phayathai Road, Wang Mai, Pathumwan, Bangkok 10330 : 02-620-9800 to 20 : 02-620-9815

Registration number Type of business Registered and paid-up capital Head office Telephone Fax Company name

Registration number Type of business Registered and paid-up capital

: : :

Head office

Telephone Fax

: :

Company name

Registration number Type of business Registered and paid-up capital

: : :

Head office

Telephone Fax

: :

MBK Food and Entertainment Company Limited (PRG holds 75.00% of its paid-up capital) 0105540062689 Food court management 50 million Baht consisting of 500,000 ordinary shares at the par value of 100 Baht each. 444, 8th Floor, MBK Center Building, Phayathai Road, Wang Mai, Pathumwan, Bangkok 10330 02-620-9800 to 20 02-620-9815 MBK Food System Company Limited (PRG holds 55.00% of its paid-up capital) 0105556143063 Food service and restaurant 109.091 million Baht consisting of 1,090,910 ordinary shares at the par value of 100 Baht each. 444, 8th Floor, MBK Center Building, Phayathai Road, Wang Mai, Pathumwan, Bangkok 10330 0-2661-7900 0-2661-7901

Company name

Registration number Type of business Registered and paid-up capital

: : :

Head office

Telephone Fax Website

: : :

MBK Public Company Limited (PRG holds 25.14% of its paid-up capital) 0107537001102 Real estate 1,886,291,000 Baht consisting of 1,886,291,000 ordinary shares at the par value of 1 Baht each 444, 8th Floor, MBK Center Building, Phayathai Road, Wang Mai, Pathumwan, Bangkok 10330 02-620-9000 02-620-7000 www.mbkgroup.co.th

Juristic person which PRG holds indirectly Company name

Registration number Type of business

: :

Registered and paid-up capital Head office

: :

Factory Telephone Fax

: :

Company name

Registration number Type of business

: :

Registered and paid-up capital Head office and factory

Telephone Fax

: :

Company name

Registration number Type of business Registered and paid-up capital Head office

: : :

Ratchasima Rice Company Limited (PRG-G holds 99.99% of its paid-up capital) 0105539087827 Milled rice quality selection, factory and warehouse, buy and sell milled rice and pre-packed rice 62.5 million Baht consisting of 2,500,000 ordinary shares at the par value of 25 Baht each. 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathumtanee 12000. Branch (1) No. 109 Moo 14, Mittraphap Road, Km. 199 Ladbuakhao, Sikhiu, Nakhon Ratchasima 30340 0-4432-3334 to 35 0-4432-3343 Innofood (Thailand) Company Limited (RR holds 99.99% of its paid-up capital) 0135551002267 Operating business of healthy rice " GABA Rice ", buy and sell of milled rice 21 million Baht consisting of 210,000 ordinary shares at the par value of 100 Baht each. 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathumtanee 12000. 0-2661-7900 0-2661-7901

Telephone

Sima Pac Company Limited (PRG-G holds 49.99% of its paid-up capital) 0135540003119 Manufacturer and distributor of plastic bag 50 million Baht consisting of 500,000 ordinary shares at the par value of 100 Baht each. 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathumtanee 12000. 109 Moo 14, Mittraphap Road, Km. 199 Ladbuakhao, Sikhiu, Nakhon Ratchasima 30340 0-4432-3456 to 57

Fax

0-4432-3279

Factory

Company name

Registration number Type of business Registered and paid-up capital

: : :

Head office

Telephone Fax

: :

MBK Restaurant Group Company Limited (MBK FE holds 99.99% of its paid-up capital) 0105555077440 Restaurant 50 million Baht and 30 million Baht accordingly consisting of 500,000 ordinary shares at the par value of 100 Baht each. 444, 8th Floor, MBK Center Building, Phayathai Road, Wang Mai, Pathumwan, Bangkok 10330 0-2661-7900 0-2661-7901

6. Nature of Business Operations Type of Business and Nature of Operation Patum Rice Mill and Granary Public Company Limited operates the business as a manufacturer and distributor of milled rice in Thailand and for export. The Company is the first manufacturer and distribution of pre-packed rice under the brand of “Mah Boonkrong” and it was the first brand to succeed in sales and earn consumer trust in the quality of the product. The Company has been listed on the Stock Exchange of Thailand on September 13, 1993 and registering for transformation to a public company on December 30, 1993. The Company business can be divided in to 3 groups as follows: Group 1: Improving the quality and packaging of milled rice Patum Rice Mill and Granary Public Company Limited (“PRG”) (MBK PCL. holds 74.52% of its paidup capital.) Main Products consists of pre-packed rice in the package size of 2, 5, 15, 48, 49 and 50 Kilograms under the trademarks of “Mah Boonkrong Rice”, “Mah Boonkrong Plus” and “Jasmine Gold Rice”. In addition, in 2015, the Company distribute by-product from rice bran and germ oil as follows: Jasmine rice is the rice that has won plates of award for the production of quality packaged rice for 8 consecutive years and it is the first Company in Thailand that has been awarded the standard certificate (with a picture of hands together in a praying position inside a square), and the excellent standard certificate (with a picture of hands together in a praying position with a star— ), granted by the Department of Internal Trade, the Ministry of Commerce. This can assure that every bag of Mah Boonkrong Jasmine Rice always holds the constant standards. Jasmine rice can be divided into several types as follows: o Jasmine Rice 100% (a red foil bag), consisting of new 100% jasmine rice from an early season. This comes in the package size of 5 kilograms. o Jasmine Rice 100% (a red bag), consisting of 100% jasmine rice. This comes in the package size of 200 grams, 2, 5, and 15 kilograms. o Jasmine Rice 100% (a green bag), consisting of old 100% jasmine rice. It comes in the package size of 1, 5, 15, 45, 49 and 50 kilograms. o Jasmine Rice 5%, consisting of 95% whole grain jasmine rice and 5% broken jasmine rice. It comes in the package size of 5 kilograms. o Jasmine Rice 10%, consisting of 90% whole grain jasmine rice and 10% broken jasmine rice. It comes in the package size of 5, 15, 48, 49 and 50 kilograms. o Jasmine Rice 100% — Jasmine Gold— is extra quality jasmine rice packed in a vacuum bag with the package size of 2 kilograms. o Homnoppakhun Brown Rice is 100% brown jasmine rice that is packed in a vacuum bag with the package size of 2 kilograms. Homtip Rice is a mixture of 70% of 100% jasmine rice and 30% of 100% white rice. Package size of Homtip Rice (a yellow bag) is 5 kilograms, Homtip Rice (a pink bag) is 5 kilograms, and Homtip Rice (an orange sack) is 15, 48, and 50 kilograms. Hompatum Rice 100% is the aromatic rice that is developed from Jasmine rice’s species. The package size of Hompatum rice (an orange bag) is 5 kilograms and Hompatum rice (a green bag) is 5 kilograms. White Rice 100% (a blue bag), with the package size of 5 kilograms and Ruangkaew rice (a dark blue bag), with the package size of 1 and 5 kilograms.

White Rice (Saohai) 100%, consisting of 100% white rice (a blue sack) with the package size of 15, 48, 49 and 50 kilograms. White Rice 15% (a brown bag), with the package size of 5 kilograms and Ruangtip rice (a purple bag) with the package size is 5 kilograms. Mah Boonkrong Plus is Thai jasmine rice with nutritive value from vegetables and grains and no additives. 6 types of Mahboonkrong Plus are as follows: 1. Grains Rice, consisting of sunflower seeds, black sesame and pumpkin. The package size is 450 grams. 2. Garlic Rice with Chinese mushrooms, consisting of garlic, Chinese mushrooms and carrots. The package size of 450 grams. 3. Five Color Rice, consisting of corn, carrots, taros and green peas. The package size is 450 grams. 4. GABA Rice (Germinated brown rice), Nutra Gaba rice is 100% brown jasmine rice which goes through natural process to add more nutritive value which are fiber, vitamins, magnesium and antioxidants such as GABA that gives nutrition 30 times more than normal brown rice, which is healthy to the body and help prevent disease such as cancer, diabetes, Alzheimer, decrease stress and feel relaxed. The package size is 1 kilogram. 5. Riceberry is a new species of jasmine rice, the cross-bred species of black rice and jasmine rice. It contains protein 2 times more than jasmine rice and high antioxidants— anthocyanin, beta-carotene, gamma oryzanol, vitamin E, tannin, zinc, and folate— but a low level of sugar. The package size is 1 kilogram. 6. 4 Hearty Rice is suitable for anyone who likes healthy food for a good health or begins to eat brown rice. It consists of 100% jasmine rice which is a specially selected grade, 100% brown jasmine rice, 100% riceberry, and red brown jasmine rice. It is an excellent cross-bred species which provide utmost nutritious benefits under a special formula of Mah Boonkrong rice. Therefore, already cooked rice has its constant quality and looks delicious. The package size is 1 kilogram. Nutra Oris 10 Rice Bran Oil is produced from fresh organic rice bran which is coldpressed immediately within 24 hours after being milled. Specific oil extractors are used, the oil is pure, fragrant, fresh, long kept, not rancid, and containing all nutrients. It ensures that the rice bran oil is fee of chemical contamination and its organic agriculture standards are certified by the International Federation of Organic Agriculture Movements (IFOAM). Pure Rice Bran Oil is produced from fresh rice bran and rice germ by a cold press method. The rice bran oil’s quality is the best. Also, the oil press factory is clean in accordance with the standards. The by-products Broken milled-rice, white rice bran, and rice rejection is broken rice resulting from an improvement process of rice quality. It is used to mix with other rice species for a formula for inferior grades as required. Moreover, broken milled-rice which is small is sold to animal feed manufacturers in order to produce animal food. PRG Granary Company Limited (“PRG-G”) (PRG holds 99.99% of its paid-up capital) PRG-G’s warehouse business offers property renting services for PRG itself and other companies. In regard to property renting, every kind of properties near PRG such as land, warehouse and PRG-G pier are provided under 1 year contract, charged according to the amount of maintenance and area space. Ratchasima Rice Company Limited (“RR”) (PRG-G holds 99.99% of its paid-up capital.) RR was established on 2nd June 1997, approved and promoted by Board of Investment (BOI) to hand over the best quality selection of rice from PRG. The Company is the manufacturer and

distributor of milled rice that is packed in 2-kilogram and 5-kilogram bags for the local market under “Mah Boonkrong” trademark. Approved on 24th February 2006, RR abolished investment promotion and allowed other rice packing company to rent the factory for 1 year. Nowadays, PRG is the major producer to improve the quality of jasmine rice— by selecting and improving the quality of rice so that the rice is bag-packaged for PRG and other domestic and international buyers. Moreover, RP has also run business about buying rice for PRG and ordinary people. INNO FOOD Thailand Company Limited (“INF”) (RR holds 99.99% of its paid-up capital.) INF manufactures rice for the health. At present, the Company manufactures germinated brown jasmine rice to strengthen health called Nutra GABA Rice, rice bran oil and organic rice germ in capsules, under “Mahboonkrong Plus” and jasmine rice bran oil which is not organic, under “INNO FOOD”. There are other types of rice for health such as Riceberry or 4 Hearty Rice trademarks. INF has also run business by buying rice for PRG and ordinary people. Group 2: Manufacturing and distribution of plastic bag Simapac Company Limited (“SMP”) (PRG-G holds 49.99% of its paid-up capital.) SMP was approved and promoted by Board of Investment (BOI) and on 27th August 1997. There was a resolution approving domestic promotion type 6.12 manufacturing plastic product or coated with plastic and on 22nd November 2006, SMP was approved by Board of Investment to promote investment in manufacturing prints from plastic film business type 6.14 Prints Manufacturing business. The Company is the manufacturer and the distributor of milled rice bags for PRG. SMP has worked on packaging business development by investing on purchasing a 8-color Gravure printing machine, a bag making machine and a grinder and a cutter machine to support in manufacturing varieties of packaging for the market which consumers demand. Group 3: Restaurant and food center MBK Food and Entertainment Company Limited (“MBK-FE”) (PRG holds 75.00% of its paid-up capital.) MBK-FE operates food court business by opening The Fifth Food Avenue, a food court on the 5th floor of MBK Center. A dinning place with 500 seats and 22 food kiosks, where various types of international cuisine are offered. The food court is grand, clean, hygienic with excellent service. Moreover, MBK-FE also acts as the food court area management of MBK Food Island, located on the 6th floor. MBK Food Island Company Limited (“MBK-FI”) (PRG holds 99.98% of its paid-up capital.) MBK-FI operates food court business by making a long term rent of the 6th floor spaces of MBK to operate a food court under the name MBK Food Island. A dinning place with 1,000 seats and 52 food stores, where various types of food are offered. Both Thais and foreigner are the customers. With the reputation for having good taste, delicious and reasonable prices making this food center to be packed with people throughout the day. This is one of the must visit place in MBK Center. MBK Food System Company Limited (MBK-FS”) (PRG holds 55% of its paid-up capital.) MBK-FS is the joint venture with Fujio Food System Company Limited from Japan, which operates 2 brands of the Japanese restaurant: “Fujio Shokudo” which distributes local and familystyled Japanese food and focuses on food’s freshness; and “Tsurumaru Udon Honpo” which distributes types of food like Udon that are freshly made in the restaurant. At present, Fujio Shokudo is opened for service on the 6th floor of MBK Center and Tsurumaru Udon Honpo has 3 branches, which are:

1. MBK Center, 6th floor (next to Fujio Shokudo) 2. HaHa Shopping Center, Srinakarin 3. Plus Mall, Amata Nakorn MBK Restaurant Group Company Limited (“MBK-RG”) (MBK-FE holds 99.99% of its paid-up capital.) MBK-RG operates the suki-yaki, traditional Teo-chew style restaurant. It was opened on 19th October 2014 at the Nine Center, on Rama 9 Road. It has had considerable success because Suki Number One has been recognized by customers for a long time, together with original taste which is delicious and impressive immediately when customers taste the food. The sales volume is very good and a lot of customers come back again to the restaurant. At present, the restaurant expanded 2 more branches in 2015 on the 6th floor of MBK Center and Glas Haus Ratchada. Moreover, MBK-RG plans to expand more branches in the future. The major change and development in the past year The Rice Business In 2015, the Rice Business had important development as follows: PRG is the rice producer for the Department of Foreign Trade— Ministry of Commerce— which is the government’s representative to negotiate by means of Government to Government (G2G). In the previous year, rice were exported to different countries— China, Philippines, and Indonesia. In 2016, PRG has continuously supported such policy of the government. Moreover, PRG cooperated with Eureka Agro Machinery Co., Ltd. in order to create the innovation of “the machine of eliminating moths and their eggs by dielectric heating” which was the innovation to revolutionize Thailand’s rice packaged bag industry. It helped eliminate moths and their eggs in order to reduce chemicals. PRG received the national award’s silver plate for the national project of disease-free, danger-free physically and mentally safe workplace, run by Department of Disease Control, Ministry of Public Health. This award indicated the care of employees with the focus on encouraging and supporting employees to have the good health, a decrease in non-communicable diseases and injuries, a decrease in diseases which were public problems of such areas, occupational and environmental safety, and good mental health. The change of PRG’s policy— from producing and distributing products to focusing on sales and marketing— was carried out in order to promote the products’ image under the rice brand “Mah Boonkrong” and “Mah Boonkrong Plus” both domestically and internationally for the sake of building the confidence of the quality of the MBK’s products. Therefore, operational guidelines were adapted to be suitable for policies’ directions. The sale distributions were divided into 2 main domestic and overseas channels as follows: The domestic sale had 3 separate channels 1. Modern trade channels included all modern retailers such as Tesco Lotus, Macro, Big C, Tops Supermarket, Max Value, 7-eleven, convenience stores etc. 2. General wholesale and retail channels included wholesale shops and grocery stores across the country. 3. Direct sales channel included hotels, hospitals, restaurants and factories etc. The overseas sale had 4 sale zones. 1. Europe and America 2. The Asian and Middle Eastern Countries 3. Africa 4. Australia, New Zealand and the Pacific Islands The distribution channels were divided into 2 channels as follows: 1. Distribution through the Company’s distribution center in Pathum Thani, Surat Thani, and Si Kew district. 2. Direct distribution from a producer to buyers in order to reduce transportation costs. Moreover, PRG has managed assets stored in warehouse buildings and ports in Pathum Thani for rent in order to increase incomes and efficiently occupy the area.

For the policy for the year 2016, PRG wants to be the center of every type of food products in accordance with the word “Food Solution”. Therefore, PRG focuses on expanding more food business in terms of various styles of restaurants, a variety of food— apart from rice— for example, tamarind juice which was experimentally exported to the foreign market, and other food in order to satisfy consumers’ needs. PRG has continuously developed its business operations in order to support the sustainable growth for the business and increase the value added to the business as well.

7. Revenue Structure Revenue structure of the Company and subsidiaries Unit: Thousand Baht

Products

Packed rice

PRG PRG PRG Rice bran and germ oil PRG Extracted rice bran PRG Rice flour PRG Others PRG PRG-G RR SMP INNO MBK-FE MBK-FI MBK-FS MBK-RG Dividend PRG PRG-G RR MBK-FE Big bag rice Broken rice

Total Revenue

Notes: PRG PRG-G RR SMP INNO MBK-FE MBK-FI MBK-FS MBK-RG

= = = = = = = = =

% of shareheld

99.99 99.99 49.99 99.99 75.00 99.99 59.99 75.00 99.99 99.99 75.00

Year 2015 Revenue 814,740 28.10% 1,285,044 44.33% 7,696 0.27% 0.00% 0.00% 0.00% 51,686 1.78% 7,306 0.25% 2,678 0.09% 44,128 1.52% 77 0.00% 124,811 4.31% 195,306 6.74% 31,253 1.08% 33,422 1.15% 284,622 9.82% 15,073 0.52% 73 0.00% 1,186 0.04%

Year 2014

Year 2013

Year 2012

Revenue Revenue Revenue 974,271 42.40% 1,068,000 42.40% 1,065,697 47.30% 618,897 26.93% 798,114 31.68% 717,442 31.84% 11,174 0.49% 6,067 0.24% 31,478 1.40% 0.00% 0.00% 2,550 0.11% 0.00% 0.00% 167 0.01% 0.00% 0.00% 77 0.00% 25,308 1.10% 37,209 1.48% 77,288 3.43% 6,149 0.27% 7,291 0.29% 7,125 0.32% 26 0.00% 1,133 0.04% 579 0.03% 44,206 1.92% 62,430 2.48% 88,719 3.94% 732 0.03% 837 0.03% 0.00% 128,781 5.60% 146,565 5.82% 160,973 7.01% 112,332 4.46% 23,642 1.03% 31 0.00% 4,127 0.18% 284,564 12.38% 260,850 10.36% 248,992 11.05% 15,014 0.65% 17,682 0.70% 13,136 0.58% 13 0.00% 13 0.00% 11 0.00% 0.00% 400 0.02%

Year 2011 (Jul 11 - Dec.11) Revenue 610,436 46.86% 410,481 31.51% 78,444 6.02% 1,211 0.09% 3,890 0.30% 11,808 0.91% 15,603 1.20% 1,111 0.09% 4 0.00% 40,102 3.08% 0.00%

118,568 11,107 5

9.10% 0.85% 0.00%

2,899,101 100.00% 2,297,877 100.00% 2,518,954 100.00% 2,253,261 100.00% 1,302,770 100.00%

Patum Rice Mill and Granary Public Company Limited PRG Granary Company Limited (PRG holds 99.99% of its paid-up capital) Ratchasima Rice Company Limited (PRG-G holds 99.99% of its paid-up capital) Simapac Company Limited (PRG-G holds 49.99% of its paid-up capital) INNO FOOD Thailand Company Limited (RR holds 99.99% of its paid-up capital.) MBK Food and Entertainment Company Limited (PRG holds 75.00% of its paid-up capital) MBK Food Island Company Limited (PRG holds 99.98% of its paid-up capital.) MBK Food System Company Limited (PRG holds 55% of its paid-up capital.) MBK Restaurant Group Company Limited (MBK-FE holds 99.99% of its paid-up capital.)

Revenue from rice sales for the 4 fiscal years

Year 2015

Year 2014

Year 2013

Year 2012

Distribution Channels Ton

Traditional Trade Modern Trade Catering Export Total

THB

15,448 460,838,841 12,698 452,374,697 2,494 73,605,555 67,682 1,120,660,962 98,322 2,107,480,055

Ton

THB

Ton

16,213 495,411,870 15,261 565,278,590 2,811 77,856,816 19,147 466,425,344 53,432 1,604,972,620

THB

Ton

15,918 493,118,705 18,179 657,499,580 3,011 79,618,989 18,992 641,944,111 56,100 1,872,181,385

THB

19,409 570,737,991 17,961 627,883,523 2,273 66,711,787 17,114 549,283,736 56,757 1,814,617,037

Revenue from packed rice and big bag rice sales for 2015 Unit: Thousand Baht

Distribution Channels

Packed rice/5 Kg. or less

Big bag rice/more than 5 Kg.

Total

Traditional Trade

355,810

100,396

456,206

Modern Trade

439,198

13,177

452,375

19,317

52,905

72,222

415

1,118,566

1,118,981

814,740

1,285,044

2,099,784

Catering Export Total

8. Marketing and Competition The market condition In 2015, Thailand’s rice situation was better in terms of competitive advantage because rice prices in the country were cheaper. This made Thailand regain its potential to compete in the market. This year, Thailand came back as the world’s number 2 rice exporter, next to India. However, as a result of the world’s economy which slowed down and a drop in purchasing power of the world market, entrepreneurs much focused on competition in prices. The economic situations of the world market— oil prices or wars in some countries— have been continuously considered onwards until 2016 about factors that may affect the market of rice export. The industrial trend of the market of rice packed in plastic bags The domestic market of rice packed in plastic bags for the year 2016 has a tendency towards fierce competition in prices and a variety of products. Because of the world’s slowed-down economy, there is a tendency that in early 2016 demand in the market is high, therefore, the price strategy will be used in the competition. However, if the forecast of drought in 2016 is correct, the demand situation will be a twist that has an impact on the rice’s both volumes and prices. Meanwhile, a trend towards health care is increasing all the time as a result of today’s environmental situations. Consumer behavior is changing in terms of consumption types and consumed food. Therefore, new products are offered. Forms of product presentation are various. Media to promote sales events increase. Products are distributed through different distribution channels. These factors help consumers have more options. Therefore, operational strategies have to be adapted and changed all the time in order to catch up with the competitive situation of the market. The industry’s outlook and competitive situation of the Food Court and Restaurant Business in the future Restaurants in 2015 had the market value of THB 385,000 million. It grew with a growth rate of 4.0 – 6.8%, leading to fiercer competition in the food business. The Company placed the importance of operational strategies in order to increase competitive advantage— changing from a focus on expanding a lot of branches in locations where department stores, large retail shops, and community malls were situated with the aim of making the restaurants’ brands to be outstanding and able to provide services for customers more thoroughly than competitors; to a focus on selecting locations of prospective branches in order to specifically have access to target customer groups. The Company also focused on new and special menus in accordance with the target customer groups’ dining-out styles— the food’s taste, differentiation and variation of the food, restaurants’ decoration, services provided— were factors affecting decision making of choosing a restaurant, apart from promotions and prices. The competitive potential The Company realizes the importance of continuously provide information for customers in order to stress the potential and image of the brand in the fierce price competition nowadays. The Company’s policy focuses on consumers’ health resulting from safe consumption. Customers are also invited to share happiness to others under the “Im Jung Dai Boon with Mah Boonkrong Rice” project. For every pack of Mah Boonkrong rice purchased, the donation 2 Baht will be made to Ramathibodi hospital to fund the construction of Chakri Naruebodindra Medical Institute under the “Eternity Giving” project. From the marketing survey’s information, consumers have had confidence and trust in the Company’s brand— the first packaged rice producer who pioneered the market since 1984. The Company is also the first company in Thailand to be certified for the excellent standard (with a picture of hands together in a praying position with a star) of packaged rice, granted by the Department of Internal Trade, the Ministry of Commerce. Mah Boonkrong rice has still captured

consumers’ hearts and has a good growth rate constantly. As a result, the Company has potential to be the leading distributor. Customers have given good feedback for the Food Business in terms of services such as food courts and restaurants. Customers also have confidence in the Company’s business operations in terms of standards in operating product quality and services that concerned significantly for the consumers. These allow products and services under the Company brand to receive continuous support from customers. To set good standards in order to produce quality products and services and strategies adapted to catch up with the rapid change of the market situations in order to immediately respond to consumers’ needs are key factors in the Company’s success. Marketing The customer character and target groups of the Rice Business For the reputation of products under the brand “Mah Boonkrong Rice”, the Company still maintains standards to form a relationship as partnership with customers which both parties reciprocally support each other in many aspects— information on marketing, customers’ needs, and corporate responsibility for customers. Then, the Company can have business operations in order to respond to customers’ needs immediately. In the past 3-4 years, the sales volume sold to the first 10 major customers were calculated as 35% of the total sales volume and no one had the sales volume that was higher than 30% of the sales volume for 3 consecutive years. The sales and distribution channels Rice products 1 The selling and distribution channels of the Food Business: The Company distribute rice packed in bag under the trademarks “Mah boonkrong Rice” and “Mah Boonkrong Plus” in Bangkok and its surrounding areas. At approximate 75% is the distribution of rice in Bangkok and its surrounding areas, and the remaining 25% is distributed in other areas around the country. The Company has divided channels of distribution into 3 channels, which are: - Wholesale and Traditional Retail Stores. The Company has the sales volume of 46% of the total sales volume of rice in the country. Most stores have a long term trade relationship with the Company. For the year 2016, the Company set a goal to expand the distribution to the northern and northeastern areas, and focus on the more distribution for wholesale shops, retail shops adapted itself to be halfsupermarkets in order to distribute the Company’s packaged rice to consumers across all areas entirely. - Modern wholesale and retail stores, a supermarket network and co-operatives. The Company has a sales volume of 47% of all the rice distributed in the whole country. At present, consumer behavior changes and switch to use service from modern retails, wholesale stores and supermarkets more, because of the convenience and many branches are available for services. The Company plans to expand the market into those increasing branches of every network around the country. - Direct sales, the Company has sales volume of 7% of all the rice distributed in the whole country by distributing to a network of restaurants, industrial plants, hotels, hospital and etc. In 2016, the Company plans to expand more distribution into educational institutes and a chain of restaurants in order to expand the market. 2 Export: In the previous year, the Company joined the Thai Rice Exporters Association and exported white rice according to a quota received by the government and allocated to the Thai Rice Exporters Association. Therefore, the export volume was higher than the year 2014. Jasmine rice was exported to main customers and a number of customers were increased. In 2015, the export volume of rice was 53% of the Company’s whole sales volume of rice.

The procurement of product or services The nature of procurement of products or services for selling

Patum Rice Mill and Grainer Public Company Limited The Head Office is located at 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathum Thani 12000. The plant’s location is 109/3 Moo 14 Mitraparp Road 199th KM., Tumbol Lardbuakhow Amphur Sikhiu Nakorn Ratchsima 30340. Its production capacity is as follows: o To pack rice into bags with the production capacity of 175,000 tons per year. o The base of producing packing rice in bags and improving the quality of rice packed in every size of bags for both domestic and international market was moved to be in Nakorn Ratchasima. PRG Granary Company Limited The Head Office is located at 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathum Thani 12000. The Company’s assets which are for rent are as follows: 1. 5 rice storage warehouses with the total storage capacity of 30,000 tons. 2. A port to upload and unload goods at the size of 3,000 tons per day. Ratchasima Rice Company Limited The plant’s location is at 109 Moo 14 Mitraparp Road 199th KM., Tumbol Lardbuakhow, Amphur Sikhiu, Nakorn Ratchasima 30340. Production Capacity is as follows: o To pack rice into the bags with the capacity of 100,000 tons per year. Simapac Company Limited The plant’s location is at 109/2 Moo 14 Mitraparp Road 199th KM., Tumbol Lardbuakhow, Amphur Sikhiu, Nakorn Ratchasima 30340. Production capacity is as follows: o To manufacture plastic bags, production capacity 1,440 ton per year Innofood (Thailand) Company Limited Location of Plant is at 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathumtanee 12000. Production Capacity is as follow: o Pack Gaba rice in the bag with the production capacity of 60 tons per year. The raw materials and suppliers At present, the Company has closed down rice mill business and maintained only the quality improvement of rice and rice packing warehouses, therefore primary raw materials are then changed into rice and brown rice, which can be divided into main categories as follows: 1. In-season rice or Napee rice is rice that derived from polished or milled Napee paddy rice which can be planted during May-October and can be harvested as well as distributed to the market from December to February. Napee paddy rice has very good taste. In consuming, when Napee rice is milled into rice, when cooked, it becomes soft and not wet. It is good for storage as it has low moist content. The rice’s feature is heavy (rice with harvest age of 120 days or more, counting from the seedling cultivation). It is the most popular for domestic consumption. 2. Off-season rice or Naprung rice comes from milled or polished off-season paddy rice which is cultivated off-season from the normal rice growing period. This rice can be cultivated all year which is 2-3 times a year and can be cultivated on both lowland and areas that have irrigation. Off-season paddy rice has high moist content, it has to be baked to dry to prevent against fungus. The rice feature is light (rice with harvest age of 90-120 days, counting from the seedling cultivation). 3. Jasmine rice is rice that derived from polished or milled jasmine in-season rice, which is grown on the area that has sandy soil such as the northeast area. The distinctive characteristic is that after cooked, it will be soft and tender, with soft fragrant aroma and beautiful grain, which is mouthwatering.

Source of in-season and off-season rice are all over the country but mainly comes from rice mill in the central region such as Nakhon Sawan, Phichit, Phitsanulok, Suphanburi, Phra Nakhon Si Ayutthaya and etc. However, the source of Jasmine rice comes from the northeast region such as Buriram, Khon Kaen, Roi Et, Sisaket, Maha Sarakham and etc.; as well as rice mill in the central region which is mentioned earlier. Since rice is an agricultural product, which generally agricultural products’ fluctuation in prices is high. Moreover, the nature of rice is a seasonal product, that is in-season rice during December and February is the high yield harvest interval, the price is then lower than other periods. However, as a result from government’s rice pledging project, the rice price tends to rise higher than the previous year. To purchase the rice, the quality of rice must be checked such as the moisture, the length of the grain, rice yield, level of milling, purity degree, cooking properties, etc. To purchase the rice, the Company mostly purchases rice directly from the rice mill and purchases through 2-3 agents. The Company has always researched and analyzed rice situations in order to reduce price risks and prevent the shortage of raw materials that are used in production. The environmental impacts The operations to reduce impacts related to the environment of the Food Business From previous operational performance, the Company is still determined to reduce environmental impacts by following the formulated policy on the environment. Every step of operational activities is well realized and determined in order to solve environmental problems and prevention of pollution. Previously, the Company set the significant plan to deal with the environmental problems— the management of toxic waste such as returning all packages of already used toxic chemicals to their producers in order to be repackaged, the promotion of use resources efficiently by reusing big bags for packaging rice as well as setting the big bags’ useful life for 3 years for the sake of safety, the energy reduction by improving the lighting system appropriately, and standard criteria for usage in each event which could decrease an electric bill of THB 30,000 per month— better than the former goal set as THB 26,000 per month. Moreover, the environmental management was elevated by means of participating in the project to promote the governance of industrial environment in order that communities could have access to information about the plants’ environmental management and participation in solving problems according to transparency principles and the rule of law. Moreover, the Company was certified to receive Green Industry level 2, issued by the Ministry of Industry.

9. Occupational Safety, Health and Environment The results of the implementation of the occupational safety, health and environment. In the past year, the Company placed importance on occupational safety, health and environment including accident risk assessment resulted in personal injury, just three times, which reduced from previous years that occurred more than 4 times a year and each injury is not severe, dismemberment, loss of life. The Company also improve its fire prevention and fire extinguishing system by installing 4-point automatic fire extinguishing system and improve water fire extinguishing system. Along with, the Company improved its working environtment by measuring light, noise, and the concentrations of dust and chemicals in the atmosphere. All the measured values were qualified from both the Ministry of Labour and the Ministry of Industry, like any other in the past year. The Company was not only committed to managing environment and safety but also concerned about employees’ health care. The company joined the project “the enterprise of Illness free, safety, happy body and mind” launched by the Department of Disese Control, Ministry of Public Health continuously and has been awarded the silver shield prize, which is guaranteed to the attention to its employees to promote their health, reduce illness from non-communicable diseases and injury as well as local public health problems, promote occupational safety and environment and good mental health. The project encourage every staff to participate in proposing activities subh as the sweet-and-salty reduction campaign, exercise yard arrangement participation, compaigns to control, reduce and quit smoking, alcohol, drug together with recreation activities, activities to promote mental health and to create values for employees such as mental health screening in terms of happiness, stress and depress. There are activities to promote employees’ morale and value such as sport day, singing contest, increasing public area, mental health counseling, giving outstanding employee award, positive thinking activities, employees’ children scholarship, and religion activities to uphold moral value including making merit and giving food to the monks. In addition, the company also recognizes the importance to the surrounding community by arranging activities to promote relationships, sentimental value, and knowledge exchange leading to mutual and sustainable development. The activities include donation of present or rice, jointing the educational institutes and special educational center (Autistic), surrounding communities in festivals: national children's day, Sikhio Red Cross festival, offering the eight necessities of Buddhist monks, making and off-season offering of robes and other needs to monks and making merit at Buddhist festival such as Asanhabucha, Buddhist Lent, and the end of Buddhist lent etc. In 2015, the Company provides training, both internally and externally about the environment, occupational safety, health and environment as follows: 1. Environmental governance 2. Harmful effect and hazardous on drug abuse and safety driving 3. First aid and occupational illness 4. HIV/AIDS and protection 5. Halal standards at the workplace 6. Sustainable cost reduction strategy in the procurement process 7. Guides to Safety in Confined Spaces (Total 4 Levels) 8. Guides to Safety in Confined Spaces, Operating Level 9. Occupational safety at supervisory level

10. Risk factors The Rice Business The risk arising from prices of raw materials Fluctuations of agricultural products can normally happen all the time. Factors affecting the fluctuations are from many factors such as demand and supply, weather conditions, the government’s policies in each country, the economy of the global market, etc. In 2015, the government’s policy was the distribution of rice in warehouses, while a lot of supplies were available in the market. Therefore, Thai rice’s prices were forced to decrease which led to both pros and cons - Thai rice prices were decreased so that they could compete with other countries in the market competition. At the same time, demand in the market did not much increase and this led to price competition both in domestic and international markets very much. From these situations, PRG had to establish measures to reduce risks of prices of raw materials and competition in the market as follows: For a measure of raw materials, PRG still maintained a measure of restoring raw materials sufficient for needs for the use. However, a suitable quantity of some raw materials was increased such as Jasmine rice during this raw material’s lowest price by considering statistical data and market information. This was inventory for the production throughout the year of 2016. For the international market, a measure of purchasing raw materials was the same as the previous year. Purchasing orders were placed according to purchasing quantity in order to reduce the risk of prices of inventory raw materials when compared to the market. The risk arising from price fluctuations Because of an economic slowdown, purchasing power of both domestic and international consumers decreased. In 2015, price competition highly increased in order to expand market share and competition among producers of national brands and local brands. Therefore, consumers had more options for buying goods. In 2015, PRG focused on stimulating sales volume through traditional trade because this channel had a growth rate continuously. Strategies of prizes according to sales volume and increased returns on sales for shops were utilized. Because a growth rate through modern trade was not high, the Company implemented strategies by continuously promoting marketing in each shopping center in order to maintain market share the most and costs in every dimension were taken into consideration properly. The risk arising from rice export According to the public sector’s policy on rice distribution to foreign market, rice prices in the markets decreased and led Thailand to regain its price potential to compete in the global market. Meanwhile, there was fierce competition of prices in the global market. Thai Rice Exporters Association participated in the public sector’s project on rice distribution to foreign markets by means of Government to Government (G2G) trade. As a member of Thai Rice Exporters Association, the Company had an opportunity to take part in the project as a producer and deliverer. As a result, the Company’s sales volume for foreign markets was higher, compared to the previous year. Moreover, the main market of PRG which focuses on production standards and the quality of goods and services still had confidence in the Company’s standards. Therefore, the Company could export goods. The Company’s policy to reduce risk from export followed the same standards as follows: o PRG will sign a sale contract only when there are sufficient raw materials. o PRG will store an appropriate amount of raw materials, with a minimum required by public agencies. o Financial transactions have to be done through leading and trusted banks and customers’ credibility is always verified before doing business with.

In order to protect against a fluctuation in Thai Baht currency, PRG will immediately buy a forward contract for coverage of the exchange rate of foreign currency after receiving purchasing orders.

The risk in value of THB currency PRG does not have a policy on speculative currency trading. If the Company has to import goods and pay in other currencies, PRG will prevent fluctuations in THB by booking advance exchange rates every time. The risk from natural disasters PRG has a center to take care of RPG’s areas through constantly following weather conditions in order to protect the areas from natural disasters. Nowadays, PRG’s manufacturing site is located in Nakhon Ratchasrima - a plateau with a low risk from flooding - while its site in Pathum Thani is a distribution center to distribute its products to small retailers only. Therefore, a quantity of stored products is quite little. If it is flooded, control and care-taking of products is not difficult. Moreover, there is a warehouse in the southern region prepared to support product distribution. If any area is hit by floods, PRG can still efficiently distribute its products to consumers without losing its revenue during the crisis. The Food Court and Restaurant Business The risk of business competition The social, economic and cultural changes have affected consumer behavior. The consumers prefer to dine out increasingly and this leads to an increasing number of food business entrepreneurs in order to meet increasing needs, product diversity, and quality and price competition. Therefore, PRG has to compete with a lot of the food business entrepreneurs from local and international chains, including new entrepreneurs who seek the opportunity from the social change. Moreover, for the consumer behavior towards openness to information from the mainstream media and social network that has an effect on responding to new goods and services which are profound, PRG then focuses on competitive strategies, quality, diversity, value for money of food, and the significance of the service quality, menu visions development, and marketing events in order to build a barrier to entry for other competitors. PRG stresses the significance of management in order to enhance the competitiveness of the quality of goods and services, promote marketing and public relations, and organize marketing events with a focus on consumers’ needs mainly. The risk from inability to expand branches in target areas Nowadays, the restaurant business is quite highly competitive and entrepreneurs from other types of restaurants are continuously increasing. According to criteria, rental space which has potential to expand PRG’s branches is harder to find and may increase the risk of inability to open new branches as the goal set. However, the Company has managed the risks by emphasizing the importance of forming business alliances with agencies of rental space management which belong to rental space entrepreneurs and broker firms of rental space, and preparing the Company’s internal database of rental space in Bangkok and its surrounding areas as the Company’s strategy planned in order to reduce a risk from inability to find rental space as a goal set which may have an impact on the Company’s business profits. For branches of the restaurant business which have been running, PRG signs a rental contract for 3 years per time and the contract can be renewed for 3 times. Each time is for 3 years. PRG realizes the importance of contract renewals so that PRG builds good relationships with lessors by well following the contract thoroughly. PRG has never had a problem with the lessors. It has cooperated with them to solve problems and co-organized marketing events with lessors of rental space in order to reduce a risk from inability to renew contracts and increase competence in negotiating conditions of rental contracts in the future with the lessors. The risk from a shortage of personnel PRG’s business has attached the significance of providing services. Therefore, the personnel are the key mechanism to run the business. According to its strategy, PRG makes a plan to expand its branches in order to open new branches every year and every branch, there are at least 20-25 employees per branch. PRG makes a plan to recruit and employ a lot of new employees in order to

support opening new branches and replace employees who resign from the Company early enough which may have an impact on the Companyâ&#x20AC;&#x2122;s service providing and business operations significantly. PRG well realizes that such risk has significance for running the organization because the personnel are the main foundation of security and adding value to the organization. From this concept, the organization has tried to create warm and friendly work atmosphere through cultivating the organizational culture and developing human resource management to be professional. The aims are to develop the personnel who stand for organizational core values, unity, creatively treating other people, opening the opportunity for employees to use their abilities and creatively think and do new things which encourage the employees realize their own value and intentionally use knowledge to develop the organization in order to increase the competitiveness of the organization for its secure and sustainable growth. The risk from fluctuations of raw material prices The costs of food are principle costs of the restaurant business, calculated as a proportion of 35% of sales incomes and the food costs are mainly raw material costs. Changes of food prices in restaurants cannot be immediately adapted to changes of the food costs. In order to reduce an impact of fluctuations of raw material prices so that they are reasonable prices, PRG has planned demand on main raw materials which significantly have an impact on overall costs of the Company. This is used to make a plan to purchase raw materials in time for sales schedules. It is also used as information on negotiating with producers and sellers for a large quantity of raw materials. Moreover, the analysis and comparison of changes in raw material prices which significantly have an impact on the costs is regularly reported and used as guidelines on increasing sales prices if necessary. It is also used to reduce fluctuations of prices affecting raw material prices and control the costs of raw materials to be reasonable and acceptable.

11.

General information and other significant information

Company Name Registration Number Core Business Registered and Paid-up Capital

: : : :

Head Office

Telephone Fax Sales Office

: : :

Telephone Fax Website E-mail

: : : :

Patum Rice Mill and Granery Public Company Limited 0107536001702 Food and Beverage Register capital of Baht 900 million Paid-up capital of Baht 600 million consisting of 600 million ordinary share at the par value of Baht 1 each 88 Moo 2, Tiwanont Road, Tumbol Bangkadee, Amphur Mueng, Pathumtanee 12000. 0-2661-7900 0-2661-7901 3rd Floor, Glas Haus Building 1, Soi Sukhumvit 25, Sukhumvit Road, North Klongtoey, Wattana, Bangkok 10110 0-2661-7900 0-2661-7901 www.mahboonkrongrice.com หรื อ www.patumrice.co.th prgrice@patumrice.co.th

Patum Rice Mill and Granary Public Company Limited ( SET Symbol : PRG ) was established as Mahboonkrong Rice Mill Company Limited on July 27, 1979 with the key objectives to be the biggest and most modern rice mill in Asia selling rice internationally and domestically. PRG is the first manufacturer and distribution of pre-packed rice under the brand of “Mah Boonkrong” and it was the first brand to succeed in sales and earn consumer trust in the quality of the product. The Company has been listed on the Stock Exchange of Thailand on September 13, 1993 and registering for transformation to a public company on December 30, 1993. From 1993 PRG has expanded its business to meet an increase in sale volumn by establishing Ratchasima Rice Company Limited (“RR”) in 1996 to hand over the quality selection of rice from PRG and to increase production volumn. RR was approved and promoted by Board of Investment (BOI) and is located in Sikiew District, Nakornrajsima Province. Subsequently, PRG decided to own a rice package manufacturer. In 1997 the Company join with other partners to establish Simapac Company Limited (“SMP”) by holding 50% of shares to produce rice bags other packaging for PRG and other customers. SMP was approved and promoted by Board of Investment (BOI) and is located in the same area of RR. Presently, the Company has ceased it operation of rice and flour mill, oil extraction, electric generator and turned to emphasizes on the quality selection and improvement of rice which is the key business to produce rice and other products under the brand “Mah Boonkrong” distributing through both international and domestic chennels. The production base was now moved to Sikiew District, Nakornrajsima Province. It has a daily production capacity of 55,000 rice packs.

12. Dividend payment policy Patum Rice Mill and Granary Public Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year at a performance-related rate that is not less than 50% of the net profit after tax. Dividend Payment in the previous years 2015 2014 2013 2012 Dividend Payment (Baht/share) 1. Final dividend * 0.25 2.25 2.25 2. Interim dividend * 0.25 2.25 2.00 Total * 0.50 4.50 4.25 Dividend payout ratio (%) * 90.91 91.84 114.30 Par value 1.00 1.00 10.00 10.00 * The Board of Directorsâ&#x20AC;&#x2122; meeting on September 28, 2015 approved the interim dividend payment for the operating result between January 1, 2015 to June 30. 2015 to the shareholder at the rate of Baht 0.25 per shares and the interim dividends paid to the shareholders on October 26, 2015. The Board of Directors will propose the 2016 Annual General Meeting of Shareholders to consider and approve the allocation of profit and dividend payment on April 26, 2016. Subsidiriesâ&#x20AC;&#x2122; Dividend Payment Policy PRG Granary Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year at a performance-related rate that is not less than 95% of the net profit after tax. Ratchasrima Rice Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year at a performance-related rate that is not less than 95% of the net profit after tax. Sima Pac Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year at a performance-related rate that is not less than 50% of the net profit after tax. Innofood (Thailand) Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year at a performance-related rate that is not less than 50% of the net profit after tax. MBK Food and Entertainment Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year by considering performance suitability and investment planning in the future. MBK Food Island Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year by considering performance suitability and investment planning in the future. MBK Food System Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year by considering performance suitability and investment planning in the future. MBK Restaurant Group Company Limited has a policy offered to the general meeting of shareholders to pay dividends each year by considering performance suitability and investment planning in the future.

13. Shareholders and management structure Shareholder The Company gathered the names of shareholder under section. 225 of Securities and Exchange Act B.E. 2535 by closing the share register book on October 13, 2015.

Name 1. MBK Public Company Limited

Number of shares

447,131,000

74.52

2. Thanachart Capital Public Company Limited

58,755,000

9.79

3. Thanachart Securities Public Company Limited

26,424,130

4.40

4. Thanachart Bank Public Company Limited

19,620,000

3.27

5. Thanachart Insurance Public Company Limited

12,800,000

2.13

6. Ms. Atinuj Tantivit

9,022,000

1.50

7. Ms. Wanvipa Tantivit

8,986,000

1.50

8. DBS BANK LTD.

5,844,000

0.97

9. Mr. Somkiat Limsong

794,000

0.13

10. NFS Assets Management Company Limited

700,000

0.12

9,923,870

1.65

Total Paid-up Capital

600,000,000

100.00

Thai Shareholders

593,908,390

98.98

6,091,610

1.02

11. Other Shareholders

Foreign Shareholders

(1)) Management Structure Organization Chart: December 31, 2015 BOARD OF DIRECTOR

COMPENSATION AND NOMINATION COMMITTEE

GOOD CORPORATE GOVERNANCE COMMITTEE*

EXECUTIVE COMMITTEE

AUDIT COMMITTEE

* Appointed on January 28, 2016 MANAGING DIRECTOR

INTERNAL AUDIT

RISK MANAGEMENT COMMITTEE

Senior Vice President, Operation and Raw Material Division

Senior Vice President, Administration Division

Senior Vice President, Sales and Marketing Division

Vice President, Restaurant and Food Center

Manager, Finance Department

Deputy Vice President, Administration Division

The Company’s management structure consists of the Board of Directors and specialized committees responsible for supporting important management areas and works in respect of which the Board of Directors has adopted resolutions including the Audit Committee, the Executive Committee, the Compensation and Nomination Committee as well as the Corporate Governance Committee. There are still other sub-committees especially the Risk Management Committee. The details of the responsibilities of the various committees are as follows: 1) The Board of Directors The Company’s Board of Directors is comprised of 8 members including: - 7 non-executive directors (of whom 4 are independent, exceeding one-third of the whole number of the Board) - 1 executive director.

List of the Board of Directors are as follows: Name 1. Mr. Suphadej Poonpipat 2. Dr. Pornsiri Poonakasem 3. Assoc.Prof.Dr.Sathit Parniangtong 4. Mr. Dej Bulsuk 5. Mr. Serm Henry Phenjati 6. Mr. Suvait Theeravachirakul 7. Mr. Kasemsuk Chongmankhong 8. Mr. Somkiat Makcayathorn 9. Miss Dararat Homrossukhon

Position

Appointed date (Resolution)

Chairman Independent Director Independent Director Independent Director Independent Director Director Director Director and Managing Director Secretary of the Company

October 25, 2011 October 24, 2006 November 30, 2009 October 25, 2011 October 24, 2012 November 28, 2003 October 24, 2006 October 25, 2005 April 2, 2013

The Board of Directorsâ&#x20AC;&#x2122; meeting is held once per month and for the year 2015, the number of meetings held by the Board of Directors amounted to 12. The definition and qualifications of independent directors The definition and qualifications of independent directors according to the Companyâ&#x20AC;&#x2122;s policy on Good Corporate Governance are in line with the criteria established by the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET), with details as follows: (1) Holding shares not more than 1 percent of total number of shares with voting rights of the Company, subsidiary company, associated company, major shareholder or controlling person, including shares held by persons related to such Independent Director. (2) Is not now and never has been an executive Director, employee, staff, advisor who receives salary, or a controlling person of the Company, subsidiary company, associated company, major shareholder or controlling person, unless the foregoing status has ended not less than two years prior to the appointment date. This restriction does not include cases in which the Independent Director used to be a government official or advisor of a government unit which is a major shareholder or controlling person of the Company. (3) Not being a person related by blood or registration under laws such as father, mother, spouse, sibling and child, including spouse of children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling person of the Company or its subsidiary company. (4) Does not have and never had a business relationship with the Company, subsidiary company, associated company or major shareholder or controlling person that may have a conflict of interest that obstructs the independent opinion. As well, any Independent Director is not now and never have been a significant shareholder, controlling person of any person having a business relationship with the Company, subsidiary company, associated company, major shareholder or controlling person, unless the foregoing relationship has ended not less than two years prior to the appointment date. (5) Is not now and never has been an auditor of the Company, subsidiary company, associated company, major shareholder or controlling person. Not being a significant shareholder, controlling person or partner of an audit firm which employs auditors of the Company, subsidiary company, associated company, major shareholder or controlling person, unless the foregoing relationship has ended not less than two years prior to the appointment date. (6) Is not now and never has been a professional service provider, including a legal advisor or a financial advisor who receives service fees of more than two million baht per year from the Company, subsidiary company, associated company, major shareholder or

controlling person. Not being a significant shareholder, controlling person or partner or the professional service provider, unless the foregoing relationship has ended not less than two years prior to the appointment. (7) Not being a Director appointed as a representative of any Director of the Company, any major shareholder or a shareholder related to the major shareholders. (8) Not operating any business that is of the same status and in competition with the Company or subsidiary company. Nor being a significant partner of a partnership or an executive Director, employee, staff or advisor who receives a salary or holds more than one percent of total number of shares with voting rights of any other company which operates business in the same status and in competition with the Company or subsidiary company. (9) Not having any business or being and Executive director nor having related benefit that may obstruct the independent opinion. As well, an Independent Director must not have any prohibited characteristic that undermines independence in carrying out the duties in the Company’s operations. Tenure of the Independent Director The Independent Directors shall not hold office for a period longer than 9 years starting from the year 2016 onwards. Scope of authority and responsibilities of the Board of Directors 1. The Board of Directors is responsible for managing all the Company’s businesses in line with the legal requirements, the Company’s objectives and Articles of Association, as well as the resolutions adopted at the shareholders’ meetings. 2. The Board of Directors is authorized to assign one or more of its members or other persons to conduct any business affairs on behalf of the Company. 3. Names and number of directors authorized to sign on behalf of the Company: Mr. Suvait Theeravachirakul, Mr. Kasemsuk Chongmankhong and Mr. Somkiat Makcayathorn two directors are authorized to sign jointly with the Company’s seal affixed. Except in the case of debt guaranteed or fulfilling others obligation and responsibility under an agreement, which must be approved by the Board of Directors’ meeting before taking any action. 4. The Board of Directors is authorized to appoint or change the directors serving as authorized signatories on behalf of the Company. 5. The Board of Directors is authorized to consider and approve policies and strategies for administrating the company’s and its subsidiaries’ business operations. 6. The Board of Directors is authorized to ensure that the management team implements the established policies and strategies effectively and efficiently. 7. The Board of Directors is authorized to consider and approve the Company’s liquidity on debt instrument investment where the rate is not lower than the investment grade (rated BBB+up). 8. The Board of Directors is authorized to consider and approve on the Company’s capital expenditure. 9. The Board of Directors is authorized to consider and approve on the Company’s requirement of administrative and selling expenses. 10. The Board of Directors is authorized on managing risk of financial activities or investment activities relating to the Company and its subsidiaries projects by means of establishing risk management policies as well as monitoring and assessing results. 11. The Board of Directors has the authorities to consider the appropriateness of the Company’s and its subsidiaries’ business plan and annual budget.

12. Board of Directors is authorized to consider the Company’s Organization Chart, conduct salary structure and annual remuneration for the staff and the executive structure. 13. The Board of Directors is authorized to consider and approve the use of accounting principles and changes in the Company’s accounting principles. 14. The Board of Directors is authorized to consider and approve on opening bank accounts. 15. The Board of Directors is authorized to consider and approve on making domestic and international loan. 16. The Board of Directors is authorized to appoint sub-committees to perform duties in lieu of the Board. Scope of authority and responsibilities of the Chairman of the Board 1. Call for the Board of Directors’ Meeting and supervise the distribution of notices of meeting and other documents to ensure that the Board of Directors received sufficient information and in time. 2. Act as the Chairperson in both the Board of Directors’ meeting and Shareholders’ meeting as well as ensure that the meetings are conduct in accordance with the Company’s regulations and the specified agenda for the most efficient and effective meeting; by encouraging all of the Board of Directors to participate in the meetings and give independent opinion. 3. Conduct the meeting by providing the opportunities to fully give opinions and suggestions 4. Supervise the efficiency of the communication between the Committee and Shareholders. 5. Cast the deciding vote in the case where the shareholders’ meeting and the Board of Directors’ meeting have the equal number of vote. 6. Perform one’s duty in accordance to the laws, which especially specified that it is the responsibility of the chairman. Tenure of the Board of Directors 1. At the Annual General Meeting each year, one-third of the directors must retire from office. If the number of the directors retiring from office does not amount to exactly one-third, the nearest whole number of one-third shall be used. The directors who must retire from office in the first year and the second year in line with the preceding paragraph shall be selected by random drawing. In the following years, the directors with the longest tenure in office shall be required to retire. In an event that the number of directors with the longest tenure in office exceeds the number of directors who must retire, the retiring directors shall be selected by random drawing. The retiring directors are eligible for re-appointment. 2. Apart from retiring from office upon the expiration of the tenure, the director shall retire from office upon: (1) Death; (2) Resignation by delivering a written notice of resignation to the Company; (3) Lacking the required qualifications or becoming forbidden by any provisions of the law; (4) Resolution for the director to retire, which is adopted by at least three-fourths of the shareholders attending their meeting and having voting rights, provided that the combined number of the shares owned by these shareholders at least half of the total shares owned by all the shareholders attending the meeting and having the voting rights; (5) The order by the court of law

3. If the directorship becomes vacant due to other reasons than the expiration of the tenure, the Board of Directors shall appoint a replacement who possesses the required qualifications and is not forbidden by any provisions of the law. The replacement shall be appointed at the Board of Directors’ next meeting and has to be voted in by at least three-fourths of the remaining directors, with the exception of the situation in which the remaining tenure of the vacant directorship is less than two months. 4. In case the number of vacant directorships results in inadequate quorum, the remaining directors can act on behalf of the Board of Directors only in organizing a meeting of shareholders for the purpose of appointing replacements to fill the vacant directorships. 5. The directors appointed as replacements in line with Item 3 and Item 4 above shall be in the office only for the remaining term of the directorships being replaced. 2) The Executive Committee List of the Company’s Executive Committee, its Secretary and their positions are as follows:

1. Mr. Suphadej 2. Mr. Suvait 3. Mr. Somkiat 4. Mr. Kunchit

Name Poonpipat Theeravachirakul Makcayathorn Dilokwanich

Position Chairman of the Executive Committee Vice Chairman of the Executive Committee Member of the Executive Committee Secretary of the Executive Committee

The Executive Committee’s meeting is held once per month and for the year 2015, the number of meetings held by the Board of Directors amounted to 12. Scope of work of the Executive Committee Managing the Company’s business affairs, ensuring that they follow the policies established by the Company’s. Duties and responsibilities of the Executive Committee 1. Proposing policies and strategies for managing the Company’s and its subsidiaries’ businesses to the Board of Directors for approval. 2. Ensuring that the management team implements the established policies and strategies effectively and efficiently. 3. Considering and approving on the Company’s liquidity management, investing in debt instrument rated investment grade (rated BBB+ up) with total amount not greater than THB 200 million per one issue and reporting to the Board of Directors when such transaction was approved. 4. Considering and approving on the Company’s requirement of other capital expenditures, not specified in the annual budget, with total amount not exceeding THB 50 million per one meeting of the Executive Committee and reporting to the Board of Directors when such transaction was approved. 5. Considering and approving on the Company’s requirement of administrative and selling expenses, not specified in the annual budget, with total amount not exceeding THB 20 million per one meeting of the Executive Committee and reporting to the Board of Directors when such transaction was approved. 6. Managing risks of financial or investment activities relating to the Company’s and its subsidiaries’ projects by means of establishing risk management policies as well as monitoring and assessing results, the report of which to be presented to the Board of Directors for consideration. 7. Considering appropriateness of the annual business plan and budget in the Company and its subsidiaries’ before proposing them to the Board of Directors for approval. 8. Considering the Company’s Organization Chart, authority, salary structure, and annual remuneration for the staff and the management team before presenting them to the Board of Directors for approval.

Managing the Company’s business affairs, ensuring that they comply with the legal requirements and that there is no conflict of interest. 10. Supervising the works of various committees. 11. Acknowledging difficulties, obstacles and reviewing practical solutions. 12. Carrying out other duties as assigned by the Board of Directors.

Tenure of the Executive Committee The chairman, vice chairman and the members of the Executive Committee shall have the same tenure as the Board of Directors’ tenure. 3) The Audit Committee The Audit Committee is comprised of 3 members, all of whom are independent. One of the members has adequate knowledge and experience in auditing financial statements. Their qualifications meet all the regulations of the Stock Exchange of Thailand. The current members of the Audit Committee include the following: List of The Audit Committee, its Secretary and their positions are as follows: Name Position 1. Dr. Pornsiri Poonakasem* Chairman of the Audit Committee 2. Assoc.Prof.Dr. Sathit Parniangtong Member of the Audit Committee 3. Mr. Serm Henry Phenjati Member of the Audit Committee 4. Ms. Yupapun Paritranun Secretary of the Audit Committee Remark: * Audit Committee Chairman has adequate knowledge and experience in auditing financial statements The meeting of the Audit Committee will be held at least once every month. The minutes of the meetings will have to be sent to the Board of Directors for information. In addition, the Committee has to meet annually with the external auditors and the management to review the financial statements and meetings with the external auditors without any executive or management team and meetings with management specifically activates annually. For the year 2015, the number of meetings held by the Audit Committee amounted to 12. Scope of work of the Audit Committee The Audit Committee is responsible for carrying out the assignments given by the Board of Directors. Duties and responsibilities of the Audit Committee 1. Ensuring that the company has appropriate and efficient internal control systems and internal audit. 2. Ensuring that the company’s financial reports are accurate, complete and adequate. 3. Considering, reviewing, and proposing the appointment or removal of the company’s external auditor, including the auditing fee. 4. Ensuring that the company complies with the related rules and regulations as well as the requirements of the Stock Exchange of Thailand, Securities and Exchange Act. 5. Ensuring that the Management takes action on the deficiency or errors which have been found as a result of auditing, as well as putting pressure on the business units involved to correct the matters. 6. Reviewing evidence from internal investigations when there is an observation or an inference that there might be fraud, irregularities or substantial loopholes in the company’s internal control systems and to report them to the Board of Directors for further consideration. 7. Giving instructions and reviewing evidence when there is an observation or an inference that there might be violations of laws or breaking of rules imposed by the Stock Exchange of Thailand, which have or might have significant impact on the company’s financial position and performance.

8. Suggesting to the external auditor to verify or review transactions which are considered important and material during the period of auditing the company’s financial accounts. 9. Co-operating with the internal audit department to consider and review the company’s annual audit plan. 10. Approving the appointment, transfer, and removal of the Head of the Internal Audit. 11. Preparing the Audit Committee’s report, which is separated from the Board of Directors’ report.The Audit Committee’s report to be signed by the Chairman of the Audit Committee will be included in the company’s Annual Report. 12. Carrying out other duties as assigned by the Board of Directors. 13. Carrying out duties and responsibilities as required by the Stock Exchange of Thailand. 14. Considering and reviewing the accuracy and adequacy of the disclosure of connected transactions or other conflict of interests’ transactions. Tenure of the Audit Committee The chairman and the members of the Audit Committee shall have the same tenure as the Board of Directors’ tenure. 4) The Compensation and Nomination Committee List of the Compensation and Nomination Committee, its Secretary and their positions are as follows: Name Position Notes 1) Assoc.Prof.Dr. Sathit Parniangtong Chairman of the Compensation and Independent Director Nomination Committee 2) Mr. Serm Henry Phenjati Member of the Compensation and Independent Director Nomination Committee 3) Mr. Suvait Theeravachirakul Member and Secretary of the Compensation and Nomination Committee For the year 2015, the number of meetings held by the Company’s Compensation and Nomination Committee amounted to 2. Scope of work of the Compensation and Nomination Committee Nominating the Company’s directors and Managing Director as well as determining their remuneration. Duties and responsibilities of the Compensation and Nomination Committee 1. Nominating suitable candidates for the Company’s directorships and proposing them to the Board of Directors or to the shareholders at their meeting for approval, depending on the case. 2. Nominating suitable candidates to serve as the Company’s Managing Director as well as determining the related remuneration package by taking into account the President’s duties and responsibilities, the Company’s financial position, the salary rate comparable to the standard rates of the same industry, and proposing them to the Board of Directors for consideration and approval. 3. Considering and evaluating the Managing Director’s yearly performance. The performance result shall be proposed to the Board of Directors for considering and approving for a change in the President’s salary or any other benefits. 4. Carrying out any duties as assigned by the Board of Directors. Tenure of the Compensation and Nomination Committee The chairman and the members of the Compensation and Nomination Committee shall have the same tenure as the Board of Directors’ tenure.

5) The Good Corporate Governance Committee The Good Corporate Governance Committee has been appointed by the resolution of the Board of Directors on January 28, 2016. List of the Good Corporate Governance Committee, its Secretary and their positions are as follows: Name 1. Mr. Suphadej 2. Dr. Pornsiri 3. Assoc.Prof.Dr.Sathit 4. Mr. Dej 5. Mr. Serm Henry 6. Mr. Suvait 7. Mr. Kasemsuk 8. Mr. Somkiat 9. Miss Dararat

Poonpipat Poonakasem Parniangtong Bulsuk Phenjati Theeravachirakul Chongmankhong Makcayathorn Homrossukhon

Position Chairman of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Member of the Good Corporate Governance Committee Secretary of the Good Corporate Governance Committee

Scope of work of the Good Corporate Governance Committee Supervise and ensure that the Companyâ&#x20AC;&#x2122;s operation and executive performance comply with the Good Corporate Governance Policy. Duties and responsibilities of the Good Corporate Governance Committee 1. Considering and reviewing the Good Corporate Governance Policy and Code of Conduct suitable for the Company and compatible with the international standard of good corporate governance. 2. Monitoring and supervising to ensure that the Company complies with the Good Corporate Governance Policy. 3. Monitoring and reviewing the internal control related to anti-corruption measure. Tenure of the Good Corporate Governance Committee All members of the Good Corporate Governance Committee shall have the same tenure as the Board of Directorsâ&#x20AC;&#x2122; tenure. 6) Company Secretary and the Company Compliance Supervisor On April 2, 2013, the Company has appointed Ms. Dararat Homrossukhon, to act as company secretary of PRG in accordance with the Securities and Exchange Act and the Good Corporate Governance practices of listed companies concerning the Responsibility of Directors, having the responsibility relating to the convening of meetings and the preparation and safe-keeping of documents, such as the register of directors, the notices for the convening of the meeting of the Board of Directors, the minutes of the meetings of the Board of Directors, the annual report of the Company, the notices for the convening of the meetings of the shareholders of the Company, the minutes of the meetings of the shareholders, and the report on the fact and the nature of conflicting of interests of the directors/executives, and the giving of recommendations, information/various regulations in respect of which the directors must have knowledge and compliance, and the attending to the various activities of the directors to enable them to discharge their duty efficiently and in the manner most beneficial to the Company. Moreover, Ms. Dararat Homrossukhon also holds the position of Compliance to supervise and ensure that the Company performance is in accordance with the regulations of The Stock Exchange of Thailand, The Securities and Exchange Commission, and other related regulators.

7) The Executive Management As of December 31, 2015 the executive management consists of 7 persons as follows: Name Position 1. Mr. Somkiat Makcayathorn Managing Director 2. Mr. Kunchit Dilokwanich Senior Vice President, Administration Division Senior Vice President, Operation and Raw Material 3. Dr. Somboon Thitinansmboon Division 4. Ms. Pimonrat Chitpavanaskul Senior Vice President, Sales and Marketing Division 5. Mr. Ekasin Tortarameta Vice President, Restaurant and Food Center 6. Miss Ratana Pakkurk Deputy Vice President, Administration Division 7. Mrs. Preeyanuch Nuntachote Manager, Finance Department Managing Director’s Terms of Reference and Responsibility are as follow: 1. Monitored and supervised the Company’s and its subsidiaries management to be in line with the vision, missions, the committee policies, shareholders’ resolution, regulations and objectives of the Company; for the highest efficiency and legitimacy of the Company’s and its subsidiaries’ business operation. 2. Manage and supervise the Company and its subsidiaries general administration and ensure that it is in line with the objectives, policies, rules and regulations of the Company as well as monitor the performance of the management to regularly report the Company’s and its subsidiaries overall operation and performance to the Board of Director. 3. Determine human resource management policy and encourage the operating of every department to be in line with the guidelines that the Board of Director established in order to develop and fully uses the potential effectively. 4. Give advice and hand down the experience in business operation to the executive and staff for the benefits of the Company and its subsidiaries business operation. 5. Manage Company and its subsidiaries finance and efficiently spend budget for the highest benefit 6. Perform other tasks that are assigned by the Company’s and its subsidiaries’ Board of Directors Meeting and/or the resolution of the shareholders’ meeting, under the objectives, rules and related laws. Nomination of Directors and Executive Management In relation to selecting the candidates nominated or to be nominated as the Company’s directors, the candidates are elected by the Compensation and Nomination Committee who defined the required qualification of a director in line with the Company business strategies. The mechanism which the Company appoints its directors is specified in the Company’s Articles of Association with details as follows: 1. The number of the Company’s directors shall be determined by the shareholders at their meeting, provided that the number is not less than five. The directors may hold shares in the Company. However, at least half of the member of the Board of Directors must be residents in Thailand. 2. The directors shall be appointed at the shareholders’ meeting in line with the rules and mechanism as follows: 2.1 Each shareholder shall have one vote for each of the shares held. (Each share entitles the holder to one vote.) 2.2 The directors may be appointed by casting votes for each director or a number of directors at the same time or by any other procedures as the shareholders at their meeting deem appropriate, provided that, at each voting, the shareholders

2.3

shall cast all their votes in Item 2.1 without allocating some or more of their votes to any particular directors. The persons in order of the votes received, starting from the one with the highest votes, shall be appointed to fill the vacant directorships. In an event that the persons appointed to fill the remaining vacant directorships receive the same number of votes (In case of ties), the Chairperson of the meeting shall cast the deciding vote. A director shall be elected by the majority votes. In the event that vacant directorships receive the equal number of votes, the Chairperson of the meeting shall cast the deciding vote.

Of the Board of directors, a total of four members are representatives for the Company’s major shareholders. In the appointment of directors, minor shareholders are also entitled to appoint the Company’s directors. The Company has defined its director qualifications as follows: Qualifications of Company’s Directors 1. Being fully qualified and not be prohibited according to: - Public Company Act - Securities and Exchange Act - Securities and Exchange Commission - The Stock Exchange of Thailand - The Company’s Articles of Association - The Principles of the Company’s Good Corporate Governance 2. Having knowledge, skills and experiences that are advantage to the Company’s business lines such as in law, accounting and finance; or being qualified in other areas that are beneficial to the company’s business. 3. Being dedicated to perform all the duties as assigned. Additional information relating to the directors and the executives of the Company is as follows: In 2015, no director or executive of the Company has had any records of breaches of the law in respect of the following: 1) Being subject to a court judgment in respect of a criminal prosecution, except in the case of a prosecution arising from a traffic violation, petty offence, or any other similar offence; 2) Being adjudged a bankrupt person or placed under receivership in relation to his/her property; 3) Being an executive or a person having a controlling power over a company or partnership adjudged bankrupt or its asset being ordered to be placed under receivership. Delegation of authority to act on behalf of the Company The Company has put in place operational rules which provide details related to the exercise of authority to approve transactions on behalf of the Company. The objective is to delegate the authority to the staff holding different positions and in charge of performing various duties. To make the performance of their duties more flexible and efficient, they are authorized to act on behalf of the Company within the scope of authority specified by the Company. In this connection, the delegated authority is also subject to the Company’s appropriate internal control systems.

Remunerations for Directors and Executives Management Director Remunerations (January 1 – December 31, 2015) Director Remunerations The Compensation and Nomination Committee consider and fixing the remuneration for the Company’s Directors and sub-committees taking into account the remuneration’s appropriateness which is compatible with roles and responsibilities and compared with other operators in both the similar industry and size. The remuneration for the Company’s Directors and sub-committees comprise of position allowance, meeting allowance and other remuneration and privilege that must be accepted by the Board of Directors and approved by the shareholder’s meeting annually. In 2015, the remuneration payable to the directors was not exceeding THB 6,000,000 in accordance with the maximum aggregate amount approved by the 2015 General Meeting of Shareholders comprised of maximum amount of position allowance and meeting allowance THB 5,500,000 and other remuneration and privilege in aggregate of not exceeding THB 500,000. Other Remunerations At an Annual General Meeting of Shareholders 2015 held on April 9, 2015 approved the resolution on other remuneration for the Board of Directors, the Executive Committee, the Audit Committee, and the Compensation and Nomination Committee, as the equivalent of 500,000 Baht. The remuneration paid to directors from January 1, 2015 to December 31, 2015. Director Allowance (THB)

Meeting Allowance (THB) Other Benefit (THB)

Pension (THB) (Year2014)

Total (THB)

Board of Directors

Audit Committee

Board of Directors

Audit Committee

Executive Committee

Compensation And Nomination Committee

1. Mr. Suphadej Poonpipat

300,000

600,000

642,860

1,842,860

2. Dr. Pornsiri Poonakasem

150,000

300,000

150,000

300,000

50,000

321,430

1,271,430

3. Assoc.Prof.Dr.Sathit Parniangtong

150,000

100,000

38,028

321,430

1,059,458

4. Mr. Dej Bulsuk

150,000

100,000

49,985

321,430

621,415

5. Mr. Serm Henry Phenjati

150,000

50,000

321,430

971,430

6. Mr. Suvait Theeravachirakul

150,000

360,000

50,000

48,080

321,430

1,079,510

7. Mr. Kasemsuk Chongmankhong

150,000

40,255

321,430

661,685

8. Mr. Somkiat Makcayathorn

150,000

22,978

321,430

644,408

107,130

1,350,000

600,000

1,300,000

600,000

960,000

200,000

249,326

3,000,000

8,259,326.00

Name of Directors

9. Mr. Somboon Wongrassamee*

Total

* No. 9 Mr. Somboon Wongrassamee resigned from a director with effective from May 1, 2014

Remunerations of the Executive Management (January 1 – December 31, 2015) Salary and bonus Amount (THB) Executive Management

Number (persons) (Salary and Bonus)

Executive Management

13,257,438

Other Remunerations Executive management can join the provident fund established by the Company. Other benefit/welfare includes social security, allowance, vehicle, gasoline allowance, travel allowance, insurance premium, telephone etc. Personnel and Human Resource Development Number of Employees As of December 31, 2015, PRG Group employed a total of 499 employees as per the following details. Company Name Number of Employees (persons) Patum Rice Mill and Granary Public Company Limited 151 PRG Granary Company Limited 4 Ratchasima Rice Company Limited 66 Innofood Thailand Company Limited 5 Simapac Company Limited 43 MBK Food System Company Limited 62 MBK Restaurant Group Company Limited 70 98 MBK Food and Entertainment Company Limited Remuneration of Employees (Exclude the executive management) Employee Remunerations The remunerations of employee consists of basic salary, wages and other benefits, which were paid in the year 2013, 2014 and 2015 in the total amount of Baht 106.32 million, Baht 118.03 million and Baht 135.23 million respectively Other Remunerations The Company has provided for other remunerations and welfare benefits in addition to salaries, such as bonuses, annual salary increment, savings and credit cooperative, working at upcountry expenses, OT, uniform expenses, provident funds, medical treatment cost, group insurance, social security, yearly health check up, commuter benefits, giving monthly packed rice. Provident Funds The Company had established provident funds under the Provident Fund Act B.E. 2530 (and the amendment). The Company agrees to make its subsidy amount to 3-7% of employee salary. In addition, its employees can also contribute amount to 3-7% of their salary, the details of which are as follows: Contribution to the Fund Years of Membership Employee Saving Rate 1 year – less than 3 years 3% 3 years – less than 5 years 4% or 5% 5 years or more 5% or 6% or 7%

Company Subsidy Rate 3% 5% 7%

Payment from the Fund Years of Service Subsidy and Benefit Less than 4 years 50% 4 years-less than 5 years 60% 5 years – less than 7 years 75% 7 years-less than 9 years 90% 9 years or more 100%

Labor Dispute within the past 3 years - None Human Resources Development Policy It is the Company policy to plan and develop human resources systematically commencing from new staff recruitment, orientation for the more understanding of rules and practice of the Company. Additionally, The designated department will train their new staff member according the training manual (in accordance with the principle requirement of ISO9001:2008). Later on the new staff will be trained on the job and occasionally training on the topic related to their work. These are all including in the training and development plan approved at the beginning of each year. On average, the Company’s employees received 6 hours of training per year in 2015.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

In-house Training from January – December 2015 Course English for communication level 1 English for communication level 2 English for communication level 3 (Writing) Review: GMP, HCCP and Food Safety System standard Review: BRC Issue7 standard Harmful effect and hazardous on drug abuse and safety driving First aid and occupational illness HIV/AIDS and protection Halal standards at the workplace Customer complaint management Team building

Training Date 14 Jan.– 25 Feb. 15 25 Feb. – 26 Mar.15 2 Apr. – 15 May 15 Monthly 25-26 May 15 7 Sep.15 7 Sep.15 20 Oct.15 27 Oct.15 30 Nov.15 17 Dec. 15

Public Training from January – December 2015 Training Date Course 1. Temperature Control 29 Jan.15 2. Course design and development entitle for tax exempt 16 Jan.15 for the course trains to improve Labor under the act of skill development BE:2545 3. Sustainable cost reduction strategy in the procurement process 18 Feb.15 4. Inventory management 10-11 Mar.15 5. Craftsmanship improvement on warehouse, inventory and 23-25 Apr.15 Transportation Management 6. Innovation of single-cable sensor technology of the AS-i system 26-27 May 15 interface to all PLC model for manufacturers 7. Finance for Non-Finance 13 Jun.15 8. Sustainable corporate index (SCI) 23 Jun.15 9. Workshop: religion certifies, Halal science Supports 25 Jun.15 10. Understanding and implementation the result of calibration certificate 8-9 Jul. 15 of manufacturing instruments 11. Readiness preparation for the knowledge and competency 21 Jul.15 certification under the Promotion of Development of Labor Work Skill Act (No. 2), B.E. 2557 12. Smart Disclosure Program (SDP) 24 Jul.15 13. Collective Action Coalition Against Corruption 6 Aug.15 14. The Overall Economic Condition 7 Aug.15 15. Guides to Safety in Confined Spaces (Total 4 Levels) 10-12 Sep.15

16. Guides to Safety in Confined Spaces, Operating Level 12-13 Oct.15 17. 108 Problems: VAT, Inheritance Tax, Gift Tax Tax law update during 2014-2015 20 Oct.15 18. HCM Annual Conference 2015 ‘‘How does corporate culture 22 Oct.15 drive performance and sustainability?’ 19. Humatrix system training and test 2-6 Nov.15 20. How to reconcile the financial statement in compliance with 18 Nov.15 21. taxation criteria for calculating net profit and accuracy tax filing without fine and surcharge 22. Promotion the capability to comply with the Occupational Safety, 26 Nov.15 Health and Environment Act 23. Precaution in 2015 financial statements submission 27 Nov.15 and readiness preparation for 2016 submission 24. Financial Statement: preparation and error eliminating technique, 30 Nov.15 e-filing (New course: 2015) 25. Occupational safety at supervisory level 1-2 Dec. 15 26. Promote the organization effectiveness of labor work skill 4 Dec.15 development under the Promotion of Development of Labor Work Skill Act, B.E. 2545 and the amendment (No. 2), B.E. 25577

14. Good corporate governance Good Corporate Governance Police and the Board of Directors The Company’s Board of Directors places strong emphasis on making the Company’s business management appropriate, transparent, fair and accountable. The Company established a Good Corporate Governance policy which was in line with the rules and principles of Good Corporate Governance of the Stock Exchange of Thailand and Thai Institute of Directors which will bring about transparent business management and control as well as stability for the Company’s business operations. The Company established a Good Corporate Governance policy and prepared handbook on business ethics and the code of conduct for directors, executives and staff. The written information was disseminated to all the Company’s executives and staff to sign an acknowledgement of compliance. The Company’s Board of Directors has considered to review and improve the Good Corporate Governance policy, the business moralities, the committee ethics, the management ethics and the staff ethics. They were completely improved in according to a Good Corporate Governance policy for listed company of The Stock Exchange of Thailand principles. The policies consist of the recommended best practices under the five categories as follows: 1. Rights of Shareholders 2. Equitable Treatment of Shareholders 3. Consideration of the Roles of Stakeholders 4. Information Disclosure and Transparency 5. Responsibilities of Directors The Company has prepared handbook on its Corporate Governance policies and code of business conduct of Patum Rice Mill and Granary Public Company Limited. The contents include the Good Corporate Governance policies, the code of business conduct, the code of ethics for directors and executives, and the code of ethics for employees. They are given to all directors, executives and employees for their acknowledgment, sign-off, training and practice. The information, knowledge and the related news on the Corporate Governance are also distributed to the executives and employees regularly through the Company’s website. The orientation activities which are organized for new executives and employees also cover the topics on Corporate Governance as well as code of ethics for executives and code of ethics for employees for their information and practice guidelines. Moreover, when the Company makes their investments in various areas of businesses, it has applied the principles of Good Corporate Governance to the business operations of those subsidiaries. The Company’s Board of Directors is mainly determined to conduct all the Company’s business affairs in an appropriate, transparent and fair manner. The adherence to the principles of Good Corporate Governance will not only enhance the confidence of all concerned, including its shareholders and stakeholders, but also will add value to the Company in long term. The Board of Directors had considered and revised the Corporate Governance Report of Thai Listed Companies’ regulations by streamlining the Company’s Good Corporate Governance to be in line with the guidelines and regulations of ASEAN CG Scorecard standard. The objective is to develop Corporate Governance to be in accordance with the Thai Institute of Directors’ CGR Project. The Corporate Governance policy of Patum Rice Mill and Granary Public Company Limited covers the following practices: 1. Rights of Shareholders 2. Equitable Treatment of Shareholders 3. Consideration of the Roles of Stakeholders 4. Information Disclosure and Transparency 5. Responsibilities of Directors 6. Internal control and risk management 7. Anti-Corruption 8. Business ethics

9. Conflicts of interest which include the supervision of use of inside information. 10. Non-infringement of intellectual property and copyrights The Company’s code of business conduct, code of ethics for directors and executives and code of ethics for employees cover the following practices and behaviors: 1. In the conduct of the Company’s business affairs, the directors, executives and employees are required to comply with all the laws, rules and regulations. The compliance is beneficial to the overall management systems. 2. The directors, executives and employees have responsibility towards the Company’s shareholders and treat them in an honest and equitable manner. For the convenience of the shareholders, the Company puts in place channels for the shareholders to file their complaints and to obtain information about the Company. 3. The directors, executives and employees have responsibility towards the Company’s customers and treat them in a fair and equitable manner. The directors, executives and employees establish good relationships with the customers and provide them with correct information in a timely manner and keep confidentiality of their information. The Company also puts in place procedures for the customers to file their complaints and to give their opinions or suggestions about the management. 4. In their conduct of business affairs, the directors, executives and employees show their responsibility towards the Company’s trading partners, competitors, and officials by behaving in an appropriate, equitable and fair manner within the established framework, rules and regulations and without seeking undue benefits for themselves. The Company also puts in place procedures for the trading partners, competitors and officials to file their complaints and to give their opinions or suggestions about the management. 5. The directors, executives and employees show their responsibility towards the society, communities and environment by giving their assistance and cooperation to the state, communities, society and environment, educational institutions and political activities within the constitutional framework. The Company puts in place management systems of occupational health, safety and environment in line with the legal requirements. 6. The Company has responsibility towards its employees and treats them fairly. The Company looks after their employees in areas of benefits, welfare, working environment, and safety at work. The Company encourages the employees to develop their knowledge and skills and to make progress in their careers. The Company puts in place procedures for the employees to file their complaints on various matters. 7. The Company encourages all employees to live corporate values and safeguard the organization, taking into account the interests of the organization or the public. 8. The directors, executives and employees are prohibited from abusing their authority in seeking information for their own benefits. The key points related to the implementation of the corporate governance can be summarized as follows: 1. Rights of shareholders The Company realizes that each shareholder is the owner of the Company. As a result, it places emphasis on the appropriate maintenance of the shareholders’ basic rights as stipulated by the law as well as other rights as deemed appropriate. These rights include, among others, to right to participate in the meetings of shareholders to be informed of the Company’s performance and the right to receive a share of profit/dividends. The shareholders are provided with convenience to exercise their various rights such as proposal of agenda items, proposal of candidates for appointment as new directors, sending their questions about the Company prior to the shareholders’ meetings, as well as the right to vote on agenda items under which a resolution needs to be adopted, with the understanding that the voting rights of all the shareholders will depend on the types of the shares they own. The Company has also established an investor relations unit responsible for providing the shareholders with the convenience to exercise their rights on various matters.

Moreover, the Company has established the following policies in compliance with the principles of Good Corporate Governance. 1.1. Sending the notice of meeting to the shareholders At the Annual General Shareholders Meeting, the Company has assigned Thailand Securities Depository Company Limited (“TSD”), as the securities registrar, to send the notice of meeting and related documents to the shareholders, both in Thai and English. The shareholders can use them at the shareholders meeting as supporting information in making vote decisions on various matters. The notice of the meeting will clearly specify meeting agendas and objectives of the meeting for each agenda as well as the Board of Directors opinion. Related documents such as annual report, financial statements, support document for each agenda and proxy statement, will be attached with the invitation letter. The notice of the meeting shall be sent to all shareholders listed in the shareholders’ registration book. The notice should be sent on the day the Company announced the closing date of share transfer registration and should be sent 14 days in advance, as well as publish the notice of the meeting along with the mentioned meeting agenda on the Company’s website not less than 30 days prior to the meeting. The purpose is to allow the shareholders to study the information before the actual meeting. This also includes continuously advertise the invitation notice on the Newspaper not less than 3 days before the meeting date to inform shareholders to prepare in advance before participating in the meeting, which is in accordance with the Public Limited Companies Act, B.E. 2535(1992). However, for the 2015 AGM meeting the Company sent an invitation letter to shareholders 15 days in advance and publish the invitation letter along with other relevant documents on the Company’s website 34 days prior to the meeting from March 6, 2015 both Thai and English version. The purpose is to enable the shareholders to study the information before the meeting. Taking into consideration the convenience of shareholders in attending the meeting, the Company fixes appropriate date, time and place of meeting. In case any shareholders are unable to attend the meeting, they may appoint proxy holders to attend the meeting on their behalf and may cast a vote in each agenda by using the proxy statement that the Company provided. Another channel for shareholders to participate in making decision or making any votes if they were unable to attend the shareholders agenda themselves, they may appoint four independent directors proposed by the Company as their proxy holders. In voting on various agenda items, one share is equal to one vote. 1.2. Setting the Annual General Meeting of Shareholders The Company holds an Annual General Meeting of Shareholders within four months from the end of its accounting period. In case it is urgent for the shareholders to consider special agenda items, an Extraordinary General Meeting of Shareholders will be held. The special agenda items include matters that may affect the interests of the shareholders or those that are related to the conditions, rules, laws or articles that need approval by the meeting of shareholders. During For the Year 2015, the Company organized an Annual General Meeting of Shareholders on April 9, 2014 in Jamjuree Ballroom A, Mezzanine Floor, Pathumwan Princess Hotel, Bangkok. In this connection, the Company provided the shareholders including institutional investors with convenience in an equitable manner to attend the shareholders’ meeting. It put in place staff to welcome and look after the shareholders. For efficiency and the convenience of the shareholders, it made use of the barcode reader in registering the attendance of the shareholders. To check and verify the attendants’ supporting documents, the Company started accepting registrations two hours before the meeting and stopped accepting registrations just before the last agenda item of the meeting is considered. All 8 members of the Board of Directors participated in the Annual General Meeting of Shareholders. Among them were the Chairman of the Audit Committee and the Chairman of the Compensation and Nomination Committee. As well, all its senior executives and its auditor attended the meeting.

Mr. Saranpat Polsawat, who was assigned to represent the shareholder, served as a neutral party in checking and counting votes. At the meeting, the Chairman conducted the meeting in compliance with all the requirements imposed by the law. He provided the shareholders with clarifications on all the meeting procedures including vote counting methods and the exercise of voting rights. The Chairman also provided the shareholders with a report on the Company’s annual performance and other agenda items. Under each agenda item, the Chairman gave the shareholders an opportunity for giving opinions and suggestions as well as asking questions. In response to the questions, the Chairman and the executives gave the shareholders appropriate answers and explanations. The shareholders were requested to vote and adopt resolutions on all agenda items. In appointing new directors, the Company made arrangements for the shareholders to vote on each candidate separately. In this connection, the shareholders could also propose candidates for appointment as directors through the Company’s website prior to the date of the meeting of shareholders. As well, they could propose additional candidates at the meeting. The minutes of the meeting were also accurately kept. The Annual General Meeting of Shareholders 2015 took about two hours. Following the commencement of the registrations at 12.30 pm., the meeting started at 14:15 pm. and closed at 16.15 pm. 1.3. Actions undertaken after the Meeting of Shareholders The Company submitted the report of the voting result during the AGM to the Stock Exchange of Thailand (SET) within 1 day since the meeting was adjourned and also submitted the minutes of Annual General Meeting of Shareholders to the Stock Exchange of Thailand and the Securities and Exchange Commission within 14 days after the date of the meeting concerned. As well, the video recordings of the meetings are available on the Company’s website (http://www.patumrice.com). The purpose was to provide the shareholders with convenient access to the information. 2. Equitable Treatment of Shareholders The Company places very strong emphasis on the equitable treatment of all the shareholders. As a result, it has included the upholding of the rights of shareholders and the equitable treatment of shareholders in its policies on the Good Corporate Governance, the Company’s performance, voting on appointment or removal of directors as well as dividend payments, proposing additional items to the agenda, and asking questions or giving opinions on various matters which the Board of Directors brings to the attention of the shareholders for information or consideration. Although some shareholders might not be able to attend the meeting, they can appoint other persons or the independent directors who are proposed by the Company to attend the meeting on their behalf by filling in the proxy statement sent by the Company together with other supporting details. To provide the shareholders with convenience, the Company also makes available the proxy statement as well as the related details and procedures on the Company’s website 30 day prior to the meeting, from which the shareholders can download the form and the information. The shareholders can obtain additional information from the Company’s investor relations unit. All shareholders also have access to the information about the Company through various channels or sources such as its website (www.patumrice.com), annual reports, Form 56-1 or the investor relations unit. In addition the Company has set up the investor relations unit to communicate with investors, shareholders and all stakeholders. The investor relations unit can be contacted by the following contact information:

Contact person and address of the Company’s investor relations unit: Mr. Kunchit Dilokwanich Patum Rice Mill and Granary Public Company Limited 3rd Floor, Glas Hous Building, 1 Soi Sukhumvit 25, Sukhumvit Road, Klongtoey-nua, Wattana, Bangkok 10110 Telephone : 0-2661-7900 Fax : 0-2661-7901 E-mail : porntip.t.@patumrice.co.th 3. Consideration of Stakeholders’ Role The Company looks after various groups of stakeholders whether they are internal stakeholders or external of the company such as shareholders, customers, trading partners, competitor, creditors, staff at all levels, as well as society in general and the environment to ensure that the stakeholders will receive appropriate, equitable and fair treatments to foster understanding and cooperation between the stakeholder groups and the company. This is also another factor that will support the sustainable and stable growth of the Company. The company also established other relevant policies as per the following. Anti-Corruption The Board of Directors is well aware and place importance in operating the business on the principle of honesty, transparency and fairness to all parties, as well as operates the business by focuses on practicing in accordance with the rules of the established laws, with the regulations and ethics to build confidence to employees and all stakeholders. In February 2015, the Company demonstrates the importance of anti-corruption and has draft the policy on anti-corruption and anti-bribery for the Company’s benefit. This also includes Whistle Blowing Policy. In December 2015, the Company declared its intention to participate in the anticorruption campaign “Private Sector Collective Action Coalition against Corruption”. The campaign includes 7 organizations, Thai Institute of Directors, Thai Chamber of Commerce, Foreign Chamber of Commerce in Thailand, Thai Listed Companies Association, Thai Banks Association, the Federation of Thai Capital Market Organizations and the Federal of Thai Industries, in order to declare its intention to operate a transparent business, and stand against corruption with the consideration of the utmost benefits of all stakeholders. Policies and Regulations related to non-infringement of intellectual property and copyrights The Company forbids employees to use any copyright work in the Company’s advertising media, print media or in any work without permission from the copyright owners. If any is used with out permission it will be considered as piracy. Thus, the Company had established regulations in using others copyright work, from the Internet, advertising media or print media, with the work of Company and the Groups. The regulations should be strictly followed, which are: 1. Check from internet or other form of media whether the work which will be use in the Company’s advertising media or print media has any copyright or not before using it. By considering from the following principles: 1.1 Works that occur from wisdom, knowledge and capability in terms of creative work is considered intellectual property. 1.2 Contain “©” on the work piece 1.3 Mention by name of the owner of the work piece or the site of the work piece. 1.4 On the work piece appears to be stamp with watermark or logo 2. Permission must be granted from the copyright owner before using any work piece with copyright from the Internet or other form of media with the Company work. 3. It is prohibited to use copyright work from the Internet or other form of media to reproduce, modify or publish to the public without permission from the copyright owners.

4. It is prohibited to use copyright work from internet or other form of media with the Company work or individual work for commercial gain, seek profit or in a manner that may cause damage the copyright owner unless it is use for the purpose of teaching, education or non-profit events. In the case where it is necessary to use such copyright work with any of the Company work, the superior or executives with the level of vice president or equivalent or above must approved the said copyright work. The Company legal division must also approve that copyright work. If the Company found that the employee has taken the aforementioned action (Number 1-4) and causing the Company to be file with lawsuit of copyright infringement which is in line with the Copyright Act B.E. 2537 or other related laws, the Company will considered that the employees does not practice in accordance with the rules and regulation therefore disciplinary punishment will be made in accordance with the rules and regulation regarding the operation of the Company. In order that, the details of related policies which the Company established to the Board of Director, the Executive Management and all of staff in order to treat to the stakeholders unless the shareholders are as follows: 1) Customers The Company realizes that it is important for its customers to feel completely satisfied. This is because the Company’s success depends on the customer satisfaction. To win customer confidence in its services, the Company needs to treat every customer fairly. The following policies and measures have been undertaken. 1. The Company honors all the terms and conditions agreed upon with the customers. In case it is not possible to honor any terms and conditions, the Company will try to find a satisfactory resolution or make necessary adjustments. 2. The Company treats all customers fairly and equitably. 3. The Company always keeps good relation with the customers. 4. The Company takes good care of the customers, taking into consideration their safety. 5. The Company provides the customers with accurate, adequate and timely information. It keeps the customers’ information confidential. It will not use the customers’ information for one’s own benefit or for the benefit of the related parties. 6. The Company puts in place a system or process, through which the customers can file their complaints or give their suggestions about its services. In 2015, no complaint was filed. 2) Trading partners, competitors and creditors In conducting its business affairs, the Company takes into account the benefits of its trading partners, competitors and creditors. It treats them equitably and fairly, in the best interest of the Company and based on the principles of righteousness and suitability as well as the business relationship. The following are the Company’s practice guidelines. 1. The Company’s conduct of business affairs is under the framework of fair competition rules and in line with the good culture and tradition. 2. The Company honors all agreements, terms and conditions, as well as rules and regulations. If it is not possible to honor them, the Company will try to find a satisfactory resolution or make necessary adjustments. 3. The Company places emphasis on treating these stakeholders appropriately, equitably and fairly. 4. The Company does not ask for or accept or pay any undue benefits dishonestly. The Company also does not violate confidentiality. As well, it will not attempt to gain access to trade secrets in a dishonest manner.

5. The Company puts in place a system or process, through which its trading partners, competitors and creditors can file complaints. In 2015 no complaint was filed. Apart from the aforementioned regulations, the Company has set up policies and regulations in selecting the trading partners by conducting under the following principles: 1. Established the regulation in selecting and evaluating trading partners 2. Open bidding and select trading partners transparently, fairly and appropriately by the Company’s procurement committee. 3. Compile appropriate contract form 4. Provide steps of procurement and tracking system including internal control to ensure that the conditions are practices accordingly. 3) Society, communities and the environment The Company has always been committed to operating its business in a manner that shows responsibility towards society, communities and the environment. As part of its efforts, it takes actions that are of benefit to the society and communities. In particular, it complies with the building standards and requirements imposed by the authorities concerned. It has adopted the policies and measures as follows: 1. The Company complies with the laws as well as rules and regulations related to the environment. 2. It gives assistance to and cooperates with state agencies, communities, and educational institutions in their activities. The Company assists in preserving the local customs and traditions of the communities in which the Company and its offices are located. It also encourages its subsidiaries to adopt the same policy. 3. The Company encourages staff of the Company and its subsidiaries to be mindful of their responsibility towards society, communities and the environment. 4. The Company puts in place a system or process, through which complaints can be filed. In 2015, no complaint was filed. The Company always places important on society, community and environment and occupational health and safety. Its’ staff received training concerning environment and promotion of effective use of resources. The details are shown on page 26 of this report under the subject entitled ‘The environmental impacts’. 4) Employees The Company is aware that employees are the valuable assets and essential to the Company’s achievement. The Company hopes that the employees will feel proud in the organization and have an equal opportunity to progress professionally and all are given a chance to continuously develop their skills. Therefore the Company has adopted the following guidelines in regards to its employees: 1. All employees shall be treated with equality and without prejudice. 2. The Company shall support and promote activities that allow employees to feel proud in the organization as well as strengthen the relationship among employees and between employees and that organization. 3. The Company shall provide fringe benefits for employees such as provident funds, healthcare and safety in the working environment. 4. The Company shall support and promote the development and professional progress of employees. 5. The Company shall set up a system and procedure that allows employees to file a complaint in case of injustice.

Apart from conducting in compliance with the mentioned policy, the company provides adequate compensation to its employees, which is in line with that of the same industry. The company also provides its employees with welfare exceeding specifying by laws. In 2015, no complaint was filed. 4. Information disclosure and transparency The Company places strong emphasis on disclosure of its information. In this connection, the Company has adopted a policy on equitable disclosure of a policy on equitable disclosure of key information both financial and non-financial, to shareholders and stakeholders in a complete, timely and reliable manner, in both Thai and English, through various channels as follows: 4.1 Through annual reports and the Company’s website (www.patumrice.com). The disclosed information covers all areas in line with the practice guidelines given by the Stock Exchange of Thailand for directors. The information includes, among others, the following: 1. Financial statements, and financial statement analysis as well as the report on the responsibility of the Board of Directors towards the financial report together the report of the auditor in the annual report. 2. Report of the Audit Committee. 3. Related party transactions. 4. Policy and report on Corporate Governance. 5. Composition of the Board of Directors, their profiles showing experiences which are of benefit to the Company’s business performance, as well as the role, duties and responsibilities of the Board of Directors and committees on various specific areas, in addition to details on the meeting attendance of members of each committee. 6. Policy on remuneration for directors and senior executives, both in cash and other fringe benefits, as well as information about compensation for directors, members of various committees, and senior executives, (Notes: As regards directors and members of various committees, the Company will disclose details about the compensation of each person.). 7. Shareholdings of directors and senior executives. 8. Organizational structures of the Company and its subsidiaries. 9. Vision and Mission. 10. Internal control and risk management. 4.2 Website of the Securities and Exchange Commission (SEC). In full compliance with the requirements imposed by the Office of the Securities and Exchange Commission (SEC), the Company has disclosed all the information and various developments. The information is disclosed to members of the general public through SEC’s website such as Annual Report, Report of 56-1, Financial Statement. This includes, among others, related party transactions and details about company share holdings of the directors. 4.3 The Company has established an investor relations unit responsible for disclosing information to shareholders, investors, and stock analysts through its website (www.patumrice.com) under the tab entitled Investor Relations. The available information includes the information sent to the Stock Exchange of Thailand and the Securities and Exchange Commission, information about the Company’s shareholders, analyses, as well as its quarterly investor magazine entitled “MBK Today” which contains information such as the Company’s quarterly performance, share price movements, businesses of MBK Group’s member companies and the Company’s activities in the past quarter. The information on the website is regularly updated. The objective is to enable investors and interested members of the general public to have efficient and equitable access to the information.

Interested person can contact of the Companyâ&#x20AC;&#x2122;s investor relations unit at Mr. Kunchit Dilokwanich Patum Rice Mill and Granary Public Company Limited 3rd Floor, Glas Hous Building, 1 Soi Sukhumvit 25, Sukhumvit Road, Klongtoey-nua, Wattana, Bangkok 10110 Telephone : 0-2661-7900 Fax : 0-2661-7901 E-mail : porntip.t.@patumrice.co.th Website : www.patumrice.com Filing complaints and requesting for information In conduct its business affairs, the Company has adopted a policy which takes into account the satisfaction of all stakeholders. They can file complains, make suggestions, or request for information as well as sharing news, leads, and clues or giving information about the Company including matters that may cause damage to the company to the board of directors through various channels, both internal and external as follows: - E-mail address of the Audit Committee: drpornsiri@yahoo.com, sathit.parniangtong@sasin.edu and phenjati_serm@yahoo.com - E-mail address of the Managing Director: somkiat@patumrice.co.th - Other channels such as a compliant box, the company website: www.patumrice.com The Company has set up procedures in dealing with complaints from all groups of stakeholders. As part of the policy, all customers and stakeholders information will be kept confidential. The information includes complaints, suggestions, requested information, news, leads or clues about the Company. The Internal Auditor is required to witness the opening of all the complaint boxes and gathered all the complaints and suggestions to propose to the Audit Committee to consider and make further implementations. This also includes assigning the management or related department to rectify the complaints and notify the appellant to acknowledge the proceeding of the complaints. In 2015 no complaint was filed. 5. Responsibilities of the Board of Directors To manage the Company efficiently, the Board of Directors must consist of individuals with knowledge, expertise and work experience in different fields of endeavor. Importantly, they must be able to dedicate themselves fully to their work and act at all times in the best interest of the Company. 5.1 Composition of the Board of Directors 1) The total number of members of the Board of Directors must be in line with the number specified by the meeting of shareholders. However, the number of the directors must be at least five. 2) The number of independent directors must account for at least one-third of the total members of the Board of Directors. 3) All directors must have proper qualifications and possess none of the characteristics prohibited under the Public Company Limited Act. 4) The appointment of directors must be transparent and clear. They must be appointed at the meeting of the shareholders or by the Board of Directors in case the director post becomes vacant before the end of the tenure. 5.2 Independence of the Board of Directors The independent directors must possess qualifications as specified by the Company. The qualifications are in line with those prescribed in the notifications issued by the Securities and Exchange Commission. The related details are given on page 35 under the subject entitled â&#x20AC;&#x2DC;The definition and qualifications of independent directorsâ&#x20AC;&#x2122;.

In 2015, the Company had four independent directors, accounting for 50.00% of the Board of Directors. There names were as follows: 1. Dr. Pornsiri Poonakasem 2. Assoc. Prof. Dr. Sathit Parniangtong 3. Mr. Dej Bulsuk 4. Mr. Serm Henry Phenjati 5.3 Executive directors Executive directors are those directors who participate in the management of the business, in line with the Notification of the Capital Market Supervisory Board No. TorChor. 28/2551 Re: Application for and Approval of the Offer for Sale of Newly Issued Shares. According to the Notification, “Executive director” means any director who holds an executive position, or any director who is in charge of any actions deemed to be taken by executive, and shall include any authorized director except where it can be demonstrated that such authorized director signs on transactions which have been approved by the board of directors and jointly with other directors. In 2015, the Company had 1 executive director, accounting for 12.5% of the Board whose name was Mr. Somkiat Makcayathorn. 5.4 Directors authorized to sign on behalf of the Company The directors who are authorized to sign on behalf of the Company and whose names are specified in the Company’s Articles of Association include the following: 1. Mr. Suvait Theeravachirakul, 2. Mr. Kasemsuk Chongmankhong, 3. Mr. Somkiat Makcayathorn, In signing on behalf of the Company, two directors jointly sign with the Company’s seal affixed. 5.5 Responsibilities of directors In considering the holding of directorships of its members, the board of directors takes into account the appropriate arrangements that will result in the highest efficiency possible for the Company. As well, the arrangements must add value the all groups of the stakeholders. 5.6 Committees on Specific Areas The Board of Directors may appoint committees to perform some of its duties on specific areas. These committees assist the Board in carrying out some of its duties, conducting detailed studies, and checking things as deemed necessary and appropriate. These committees consist of the following: 5.6.1 The Executive Committee 5.6.2 The Audit Committee 5.6.3 The Compensation and Nomination Committee 5.6.4 The Good Corporate Governance Committee 5.6.5 The Other Committees The characteristics of the committees must be in compliance with the requirements stipulated by the Stock Exchange of Thailand. As well, the Board of Directors has clearly specified the scope of responsibilities of each committee. It also requires that the committees present their respective report at each meeting of the Board of Directors. 5.7 Holding of Directorships The Board of Directors has considered the appropriateness of time allocation in carrying out the responsibilities of each director who is required to assume positions in various subsidiaries. The objective is to achieve the maximum efficiency possible in ensuring that each subsidiary adopts policies and conducts its business affairs in alignment with the parent company and that its business is beneficial and adds value to all groups of stakeholders. The Board of Directors

then sets out a policy that individual Company Directors can serve as directors for not more than 5 companies listed on the Stock Exchange of Thailand (SET) without exception. Moreover, the Board of Directors sets out a policy that the Managing Director can occupy positions for not more than 3 listed companies in order to regulate good corporate governance with the utmost efficiency. 5.8 Segregation of duties between the Board of Directors and the management The Company clearly defines and segregates the authority between the Board of Directors and the management at various levels. In addition, the Chairman of the Board of Directors and the Managing Director must not be the same person. As well, the Company clearly segregates the authority and duties of the Chairman and the Managing Director. The objective is to strike a proper balance in managing the Company’s business. The system in segregating the roles, duties and responsibilities between the Board of Directors and the management is in line with the segregation principle that is based on the Corporate Governance policy. This includes systematic delegation of decision-making authority. The management is independent in making decisions and managing the business within the limits of the delegated authority. In this connection, the Company has prepared a handbook on the delegation of authority. It gives details about the roles and authority of the management and serves as its practice guidelines. The delegation of authority handbook will be reviewed as deemed appropriate for the conduct of the Company’s business affairs, taking into account the prevailing situation. Moreover, the Board of Directors closely monitors the performance of the management. 5.9 Training and Development of Directors The Company regularly places importance in training and development of the directors. All the newly appointed directors is required to attend the orientation session which will provide them with adequate information about the Company before they start carrying out their responsibilities. The information includes the Company’s vision, missions, strategies, goals, Memorandum of Association, Articles of Association, roles and responsibilities of the Board of Directors, policies on Good Corporate Governance, code of business ethics, code of conduct for directors, and business information of related companies, as well as related rules and regulations. The Company promoted and supported all the directors to regularly participate in the training and develop knowledge. No matter whether the training courses that are related to the performance of their responsibilities as director, are organized by the Thai Institute of Directors Association (IOD), the Stock Exchange of Thailand, the Securities and Exchange Commission or other institutes; the Company will regularly inform the directors of the details about these courses in advance. The training will enable the directors to carry out their responsibilities and look after the Company’s business affairs in an efficient manner. The directors who have participated in the training courses organized by the Thai Institute of Directors Association (IOD) include the following: Name of Directors 1. Mr. Suphadej Poonpipat

2. Dr. Pornsiri Poonakasem

3. Assoc.Prof.Dr.Sathit Parniangtong 4. Mr. Dej Bulsuk 5. Mr. Serm Henry

Phenjati

Name of Training Course from the Thai Institute Of Directors - Director Accreditation Program (DAP) Course - Role of the Compensation Committee (RCC) - Role of the Chairman Program (RCP) - Financial Institutions Governance Program (FGP) - Director Accreditation Program (DAP) - Director Certification Program (DCP) - Advanced Audit Committee Program (AACP) - Director Certification Program (DCP) - Advanced Audit Committee Program (AACP) - Director Accreditation Program (DAP) - Director Certification Program (DCP)

Name of Directors 6. Mr. Suvait Theeravachiraku

7. Mr. Kasemsuk Chongmankhong 8. Mr. Somkiat Makcayathorn

Name of Training Course from the Thai Institute Of Directors - Director Certification Program (DCP) - Audit Committee Program (ACP) - Successful Formulation & Execution of Strategy (SFE) - Director Certification Program (DCP) - Anti-Corruption for Executive Program (ACEP) - Director Accreditation Program (DAP) - Director Certification Program (DCP)

In 2015, 1 member of the Board of Directors - Mr. Suvait Theeravachirakul attended the training courses in order to promote and support the knowledge development of the director continuously as follows: Item 1 2 3 4 5 6

Course Management Outing Biz Innovation Org Design Paying a visit for TQA Overall economic situation Benchmarking Pack5 & Value

Institute MBK Training Center MBK Training Center MBK Training Center MBK Training Center MBK Training Center Federation of Accounting Professions

Date 8 February 2015 16th March 2015 14th July 2015 7th August 2015 31st August 2015 19th September 2015 th

5.10 Leadership and Vision The Company’s Board of Directors has established clear vision and mission statements as well as business directions, policies, strategies and targets. They serve as guidelines for the management in formulating business plans and budgets as well as future business expansion plans in order to enable the Company to achieve sustainable growth and stability. As for, in 2015, Patum Rice Mill and Granary Public Company Limited has revised the strategies, visions and mission to be in line with the operating performance, which also included changes in business situation and environment in order to achieve the expected vision and strategic. 5.11 Company Secretary The related details are given on page 41 under the subject entitled “Company Secretary and the Company Compliance Supervisor” 5.12 The Company’s Board of Directors has formulated a succession plan. The objectives are to ensure availability of qualified people for positions at the level of department head and above and to support the Company’s business expansion. In implementing the plan, the efficiency and potential of executives will be assessed. As well, they will be required to participate in appropriate training and development activities which are aimed at enhancing their skills and knowledge. Their professional development will be closely monitored. 5.13 Remuneration of the Board of Directors and the Executives Management The Board of Director had set up policies and regulations for the Directors and sub-committee’s remuneration at which the rates is appropriate and in line with the Directors responsibilities that have to minister to be in comply with the stakeholders expectation and in accordance with the related laws and rules. The Company, therefore, is required to select directors with experience and appropriate qualifications. The Board of Director had also set up policies that will determine the remuneration of each directors, where the remuneration rates will reflects the duties and responsibilities of each individual, this can be compared with the similar size of listed

company on The Stock Exchange of Thailand along with to be able to practice in accordance with the Good Corporate Governance. The remuneration is revised annually. The remuneration of the Board of Directors is paid in the form of the meeting allowances, director allowances and gratuity. The directors who also serve as members of other committees such as the Audit Committee and the Executive Committee will receive additional payments as deemed appropriate and in line with the resolution adopted at the shareholders’ meeting. The payments of remuneration for senior executives are made in the form of monthly salaries, bonuses or other fringe benefits. The remuneration is based on the Company’s performance as well as the performance of the executives concerned, taking into account the standard benchmarks in the same industry. The Company is required to disclose its remuneration policy and the remuneration of directors and senior executives in the annual report, in compliance with the notification issued by the Securities and Exchange Commission. The remuneration of directors and senior executives for 2015 is disclosed on page 44-45 under the subject entitled “Remunerations for Directors and Executives Management”. 5.14 Meetings of the Board of Directors The Company’s various committees including the Board of Directors, the Executive Committee, and the Audit Committee plan their meeting schedules one year in advance. They are required to hold their meeting at least once a month. They may organize additional meetings as deemed appropriate, to consider special agenda items. The purpose is to acknowledge and monitor the Company’s performance and business operations. The Company will send the notice of the meeting together with the agenda and supporting documents to each director at least 5 days before the Board of Directors’ meeting so that the directors will have adequate time to read through the documents. At the meetings, the directors can give their opinions openly and independently. The minutes of the meetings will be taken and made available for the parties concerned for future reference. As regards the Compensation and Nomination Committee, their meeting will be held when the Company has to nominate directorships or when the Managing Director’s performance has to be evaluated. For the 2015, the various committees regularly held their meetings within the scope of their prescribed duties. Meeting attendances of the members of the Company’s current committees in the 2015

Name List

1. Mr. Suphadej Poonpipat 2. Dr. Pornsiri Poonakasem 3. Assoc.Prof.Dr.Sathit Parniangtong 4. Mr. Dej Bulsuk 5. Mr. Serm Henry Phenjati 6. Mr. Suvait Theeravachirakul 7. Mr. Kasemsuk Chongmankhong 8. Mr. Somkiat Makcayathorn Note

Meeting attendances of the members (attendances/total meetings) The Board of The Executive The Audit The Directors Committee Committee Compensation (12 meetings) (12 meetings) (12 meetings) and Nomination Committee (2 meetings) 12 12 12 12 12 12 2 8 12 12 2 12 12 2 12 12 12 -

The Board of Directors at present: >> The Executive Committee amount of 3 persons such as the name list 1, 6 and 8 >> The Audit Committee amount of 3 persons such as the name list 2, 3 and 5 >> The Compensation and Nomination Committee amount of 3 persons such as the name list 3, 5 and 6 >> The Good Corporate Governance Committee was appoint on January 28, 2016 (the name list 1-8)

5.15 Self Appraisal of the Board of Directors and the Committees The Company has made arrangements for annual performance appraisal of the Board of Directors and the Committees. The Company prepared and improved forms for performance appraisal of the Board of Directors and the Committees to be clearly evident and properly in line with the guidelines provided by the Stock Exchange of Thailand which has been regulated. The purpose was to reflect the efficiency of their performance and compliance with the Good Corporate Governance principles. The procedure start from the Company secretary and secretary of the committees distributed the assessment form to the Board members and the committee members for both the Board or each committee assessment and individual selfassessment. The assessment requires each Board member and each committee member to have self-assessment through responding a questionnaire and sending it back to summarize and report to the Board of Directors. The criteria for the performance assessment of the Board of Directors, according to the Board Self-Assessment in each assessment topic, are divided into 5 levels as follows: 0 = Extremely disagree or not carry out such topic 1 = Disagree or carry out such topic little 2 = Agree or carry out such topic moderately 3 = Quite agree or carry out such topic well 4 = Extremely agree or carry out such topic excellently The criteria for the performance assessment of the Board of Directors are divided into 5 levels as follows: More than 90 equals ‘excellent’. More than 80 equals ‘very good’. More than 70 equals ‘good’. More than 60 equals ‘fairly’. Less than 60 equals ‘It should be improved’. The result of the Board Self-Assessment for the year 2015 can be summarized as follows: 1) The performance assessment of the Board of Directors The result of self-assessment of the performance through the board assessment Topic to be assessed (The board assessment)

Result of the assessment Full marks

Average marks

20.00

18.75

30.00

27.75

3) Meeting of the Board of Directors

15.00

13.65

4) The Board of Directors’ execution of duties

15.00

14.06

5) Relationship with the Management Team 6) Self-development of the Board of Directors and development of executives

10.00

9.38

10.00

9.11

100.00

92.70

1) Structure and qualifications of the Board of Directors 2) Roles, duties, and responsibilities of the Board of Directors

Total

The result of self- assessment of the performance through the individual assessment Result of the assessment Topic to be assessed (The individual assessment) Full marks Average marks 1) Structure and qualifications of the Board of Directors

30.00

28.13

30.00

27.66

40.00

37.00

100.00

92.79

2) Meeting of the Board of Directors 3) Roles, duties, and responsibilities of the Board of Directors Total

2) The performance assessment of the Committees

Result of the assessment Average marks

Topic to be assessed (The committee assessment) Full marks

The Nomination The The and Compensation Executive Audit Committee Committee Committee

1) Structure and qualifications of the Committee

20.00

19.17

20.00

2) Meeting of the Committee

20.00

19.58

19.52

19.58

3) Roles, duties, and responsibilities of the Committee

60.00

58.59

55.83

Total

100.00

99.58

97.28

95.41

3) The performance assessment of Managing Director The Board of Directors appoints the Compensation and Nomination Committee to annually evaluate the performance of Managing Director by means of consideration of their suitability for assigned duties and responsibilities, the Company’s business operations compared with the Company’s goals, actual economic situations, and a remuneration comparison with other companies in the similar industry, in order to present obtained results of the evaluation to Board of Directors’ meetings to be informed Nevertheless, a conclusion to the performance evaluation of Managing Director is individual confidential which cannot be disclosed. Criteria for the evaluation can be divided into 2 parts as follows: Part 1: The evaluation of Key Performance Indicator (KPI) Part 2: The evaluation of Competency In 2015, there is some area that the company has not complied with the principal of good corporate governance such as the Chairman of the Board of Directors is not an independent director and he is also the Chairman of the Executive Committee. This is because the Chairman of the Board is very knowledgeable with extensive experience, which is beneficial to company. However, the chairman of the Board is not the executive of the Company and he has never exercised the power to act on behalf of the Board before the Board has been informed.

15. Corporate social responsibility Patum Rice Mill and Granary Public Company Limited is a quality leader of packaged rice market for consistency of quality and standard. The group aims at the constinously and stability growth of business as well as operating business with responsibility to social and taking into account all stakeholders both internal and external such as shareholders, customers, partners, competitors, creditors, employees at all levels, society, communities and environment as present to its’ vision “A leading group of companies in food business and a quality leader in packaged rice market for the utmost benefit of stakeholders with good corporate governance”. Process in preparing the corporate social responsibility report The standards adopted by the Company in developing practice guidelines and preparing CSR reports are base on the Stock Exchange of Thailand (SET)’s Approach to Social Responsibility Implementation for Corporations, which are widely recognized by organizations and practictioners working in the field of corporate social responsibility. Adopting the SET’s approach represents a good start for the Company in developing its reports and in prepareing itself for sustainability report in the future. Key areas in implementation of CSR activities Key areas in implementation of CSR activities of the Company in 2015 could be summarize as follows: Good corporate governance The Company has strickly complied with the corporate governance principles for listed companies established by the Stock Exchange of Thailand by disclosure information as required transparently and equally open to inquiries from shareholders annually. Details appear in item 14 Good Corporate Governance in this report Fair business operations The Company operates its business with fairness. The procedure and authority table of purchasing are established to enhance the competitiveness and for a fair practice when selecting suppliers. There have been audited by an external auditor to prevent bribery or fraud. The Company also established policy and guidelines regarding non-infringement of intellectual property rights. The Company operates its business based on the principles of corporate governance, business ethics and responsibility towards all stakeholder groups as well as strictly complies with laws, contracts and agreements. Anti-corruption On February 24, 2015, the Company has the anti-corruption policy with clear guidelines and whistle-blowing policy obtaining clues or compliants from misconduct against laws, rules morals and ethic, inappropriate behaviors and behaviors that may be indicative of fraud in organization both from employees and all stakeholders. In addition, in December 2015, the Chairman of the Board has signed the declaration of intent to join the Thailand Private Sector Collective Action Coalition against Corruption to demonstrate the commitment of the company to prevent and combat corruption in all its forms. Currently, the Company is under the preparing process which will cover the assessment risks associated with fraud and corruption, the implementation of anti-corruption policy into practice, the disclosure of information, exchange policies, experiences, best practices in doing business fairly and create corporation with other companies in the group, suppliers and other stakeholders. Respect human rights and treat workers fairly. • The Company respects human rights and treating all employees fairly, as well as complies with laws related to human rights and employment. The Company complies with Labour Protection Act B.E. 2541, including social security, workmen’s compensation fund. The Company provide

benefits and welfare to its employees at all levels such as health insurance and life insurance associated with the rights as a member of MBK Employee Savings and Credit Cooperatives Limited. Employees are entitled to receive clar information about their benefits, compensation, welfare, insurance coverage, carreer path, any condition to receive special compensation rate since the hiring process. • Employees will be trained regularly to develop thier potention according to their positions and responsibilities. The Company has an annual training plan for its employees including the training plan associated with the parent company, MBK Public Company Limited and external training. The training program was implement continuously every year. In 2015 the average training hours was 6 hours/person/year. • In term of channels to receive complaint or listen to feedback from employees, the Company has prepared a suggestion box situated at the easy access area so that employees who have grievances or unfair practices can submit freely. Consumer responsibilities • The Company established and maintained the constant policy of high quality standards of product (packaged rice) which reflected by the certifications received such as the International Organization for Standardization (ISO9001:2008), the Hazard Analysis and Critical Control Points (HACCP), the Good Manufacturing Practice (GMP), the British Retail Consortium (BRC) and the food permitted under the Islamic Law (HALAL). The Company also received the certification of trusted quality or Thailand Trust Mark (TTM), granted by the Department of Export Promotion, the excellent standard certificate (with a picture of hands together in a praying position with a star— ), granted by the Department of Internal Trade, the Ministry of Commerce and the Reader's Digest Trusted Brands 2010 in Thailand voted by consumers throughout the country. These demonstrated the Company’s constant attention to product quality before reaching consumers. The Company is attentive to production certification and international certification of Good Agriculture Practices and the recertification within the stipulated period as it is the responsibility of Company to partners, customers and consumers. Moreover, granting the international certification is a good business opportunity to export overseas especially countries with strict product quality. Currently, some countries, such as Canada, strict more on production standards by taking into account the human rights and labour treatment. The Company has a policy to achieve the CSR Certificate to reflect company standards under the good governance. • The Company opened channels to receive the consumers / partners complaints on unsatisfied with the quality of product and announced on the website of such channels. The Company recorded number of complaints and problems, provided corrective actions and monitoring. • The Company has a policy to improve skills of sales staff enabling to support our partners to sell products under the trade mark Mah Boonkrong Rice which will be implemented in 2016. Environmental reservation The Company has its operations to reduce impacts related to the environment continuously. Details shown in “The operations to reduce impacts related to the environment of the Food Business.” on page26 of this report. The innovation and diffusion of innovation from its social responsibility • The Company is developing an invention which is a machine to get rid of the Jusmine rice weevil. The invention is under the process of experiment and modification to be more effectively. Such innovation was published through the website and other media. This can point out that the Company placed importance on improving the quality of packaged rice with high standard and safety for consumers. The experiment has operated since 2015. • The Company has a plan/project to utilise lean process in both rice and restaurant businesses with an aim to reduce waste such as raw material, labour, time, energy occurred from errors, duplication and waste in the process throughout the value chain starting from selecting raw

materials from suppliers until the delivery goods and services to consumers. The study will be made in 2016. â&#x20AC;˘ Executives of the company who are as an expert practitioner of Jasmine Rice has served as an academic consultant to the Thai Rice Growers Association and the Association that are associated with the gathering of agricultural sector/public sector exchanging academic information, opinions and create the opportunity of participation between business operators and civil society consistently. These demonstrate that the Company has the responsibility to engage civil society groups, who is one of the key stakeholders. CSR-after-process Im Jung Dai Boon with Mah Boonkrong Rice is a longterm project. The objective is to allow the customers of Mah Boonkrong Rice to participate with the Company, for every pack of Mah Boonkrong rice purchased, the donation 2 Baht will be made to Ramathibodi hospital to fund the construction of Chakri Naruebodindra Medical Institute to be the new campus for medical school where medical personnels and healthcare professionals were produced. The hospitals will provide services at all levels for patients in Samutprakarn by integrating health promotion and education, disease prevention and rehabilitation services, standard health care and public health services. Initially, Baht 2 million was donated under this project in 2015. Other activities: The Company provides support to various institutes both nearby and across the country, with activities throughout the year as follows: 1. 2015 Childrenâ&#x20AC;&#x2122;s day activities on January 10, 2015: Support Jusmine Rice size 200 g. to district administration organization of Lad Bua Khao, Lad Bua Khao School, Lert Sawat School, Nongbua School, and Special Education Center totally 850 packages. and support sweet, toy and stationary to schools amount to Baht 15,000. 2. Red Cross Festival at Sikhio: Donate 200 packets of Jusmin Rice size 200 g. 3. Asanhabucha and Buddhist festival: Donate Jasmine Rice 100% (a green bag) size 5 kilograms to Wat Lad Bua khao 20 bags and Wat Nong Bua Horm 20 bags. 4. The end if Buddhist Lent festival: Donate Jasmine Rice 100% (a green bag) size 5 kilograms to Wat Khao Chan Ngam 20 bags and to Wat Lertnimit 20 bags. 5. Donate Jasmine Rice 100% (a green bag) size 5 kilograms to Wat Khao Chan Ngam 20 bags and to Wat Lertnimit 20 bags. 6. Donate Jasmine Rice 100% (a green bag) size 5 kilograms to special educational center (Autistic) 120 bags. 7. Provide Jasmine Rice 100% (a green bag) size 5 kilograms 180 bags, Ruangkaew Rice size 5 kilograms of 840 bags to government offices and temples to support their activities.

16. Internal control and risk management Internal Control The Board of Directors and Executive Management are aware that the internal control system plays a crucial role on planting confidence to the management team in terms of reducing business risks and helping the business run efficiently by suitably managing the resources to achieve the target goal. Therefore, the internal control assessment is performed at least once a year. The Board of Directors allows the Audit Committee to supervise the internal control system, the risk management system, the corporate governance system, and the compliance of related laws, orders and regulations to prevent conflict of interest. Besides, related transactions are operated to control the performance of subsidiary companies, the abuse of the assets of the Company and subsidiary companies, and to protect the property of the company from being lost or abused and the rights infringement, care and use of property to prevent fraud or misconduct. The Company sets up an auditing mechanism and balance by hiring the internal auditors from MBK Public Company Limited who is independent in performing auditing work, evaluating performance and sufficiency of the internal control system, the risk management system and the corporate governance system in the performances of all units in the companies and its affiliates. They adopts the framework of COSO (The Committee of Sponsoring Organizations of the Tread way Commission) and Enterprise Risk Management, and monitoring regulations in compliance with the Stock Exchange of Thailand (SET), Thai Institute of Directors (IOD), and Organization for Economic Cooperation and Development (OECD) to be used to fulfill internal control, risk management, and regulation in order to allow the Company’s performances to pursue every aspect of effective and efficient work. Besides, the Board of Director revises the assessment form of sufficiency for an internal control system annually according to an internal control framework of Securities and Exchange Commission (SEC) which reference to the Committee of Sponsoring Organizations of the Treadway Commission (COSO) — for both 5 principles and 17 components. In 2015, the Company did not find any significant problem in the Company’s internal control system: Organizational Control The Board of Directors is comprised of independent directors as required by the Stock Exchange of Thailand, who possess knowledge and expertise which are helpful for business. The Board obviously assigns roles and duties to committees and management teams, and monitors their role-and-duty based performance by setting a clear organizational structure and its chain of command for proper balance and internal control and establishing business goals and Key Performance Indicator (KPI) in order to assess the efficiency of performance and to regularly follow its results compared with the organization’s goals. The policies on good corporate governance, business ethics, and professional etiquette of directors, executives, and the Company’s employees, are in writing. Every employee is encouraged to have awareness of these policies and comply with them continuously through receiving training annually in order that work performance is transparent and fair to every stakeholder group. Also, a clearly defined follow-up process and punishments are run by internal auditors– directly subordinated to the Audit Committee— in order to help the Company’s internal control. Manuals for authority and work performance of every system are in writing to be used as guidelines for work performance by taking duties, responsibilities, and an internal control system into consideration. The Company provides policies on individual development, recruitment, and employees’ performance evaluation. Competency and Key Performance Indicators (KPI) for organization, line, division, department, and individual lines are related to the employees’ performance evaluation. Moreover, the Company selects potential employees to participate in the Talent and Succession Plan in order to promote and maintain competent employees to work with the Company.

Risk Assessment The Company organizes the Risk Management Committee (RMC) to monitor the organization’s risk management to achieve goals according to the organization’s acceptance level. RMC then sets a policy on risk management in order that every employee complies with the policy which risks from external and internal factors— covering every aspect of the risks— are evaluated and managed. They are strategic, operational, financial, compliance, and event risk factors. A corruption risk is also included. In order to find suitable and adequate measures against these risks, a report is submitted to RMC every quarter and another report is submitted to the Board of Directors annually. Risk factors which are changing externally and internally that may affect the organization are also reviewed annually. Moreover, the Committee and Executive Team responsible for the Company’s financial reports comply with certified financial reporting standards and disclose complete and correct information on time. Activities Control The Company has internal control measures in accordance with risks and business types by clearly dividing duties and responsibilities of each position, providing and reviewing manuals of authority and manuals/processes of performance appropriate to the organizational structure and current work performance. Each position can be run by checks and balances, and proper rechecks. Also, each position’s work performance is regularly reexamined by internal auditor in compliance with rules, regulations, and manuals of authority and work performance in order to ensure efficient work performance with a suitable and adequate internal control system. An information technology system is employed to promote faster and more efficient work performance. Moreover, the Company imposes policies, rules, and regulations to transactions on a party involved in the Company to comply in the same direction such as major shareholders, directors, executives, and interested party for correctness, transparency, and fairness. The Company’s utmost benefits are taken into consideration according to regulations of the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). IT and Communication System The Company realizes the importance of the IT and Communication System and always encourages the improvement of the system to ensure that all information is accurate and up-todate. An efficient and modern IT system is adopted to guarantee the safety of the information from the process of collecting, processing, storing and following-up to bring such information to advantage management work of the executive members and interested parties. This process should be carried out as a complete, accurate method and within an appropriate time so that it can be used in the business decision making. There is also a policy regarding the security in the information technology and the use of information. Channels of communication are opened for information receivers from both inside and outside the organization to have access easily and rapidly such as intranet and internet as the communication channels to publicize the Company’s information. Agencies responsible for specific information such as the Investor Relations and the Information Center are established. In addition the Company assigned its secretary to take care of the preparing of information and meeting documents in advance including providing clear meeting minutes, summary of opinions and decisions of the meeting. Monitoring Activities The Board of Directors provides a system to evaluate and monitor the internal control system covering all aspects such as accounting and finance, operations, compliance with laws/regulations, asset management, and corruption, which significantly have an impact on the Company’s reputation in order to solve any incurred problem. The Board of Directors assigns the Audit Committee to audit and monitor the internal control system by nominating internal auditors to follow up and evaluate work performance in accordance with International Standards for the Professional Practice of Internal Auditing (IIA) to ensure that evidence found from monitoring will

be improved or solved appropriately and promptly. Moreover, the evaluation of internal audit for accounting and finance is carried out by certified accountants and presented to the Audit Committee for consideration every quarter and every year. As a result of reviews conducted by certified accountants and internal auditors, no significant faults are found. Internal System Checking The Internal Audit Committee assigns the internal audit department to give assurance and consulting independently and fairly in monitoring and evaluating the sufficiency of the internal control system, and following improvements for more suitable workflow, covering workflow of the Company and its affiliated companies. They are reported directly to the Audit Committee to ensure that the Company’s operations have the adequate, appropriate, and sufficient internal control system, together with risk management within the Company’s acceptable level and good corporate governance in order to achieve the goals of the organization’s operations. The internal audit department’s charters and internal auditors’ code of conduct are employed as guidelines on clearcut work performance. Their duties and responsibilities to cover all 4 assigned missions can be divided as followed: 1) Administrative and Management Checking 2) Regulation Checking 3) Operation Checking 4) Computer Checking Risk Management The Risk Management Committee of Patum Rice Mill and Granary Public Company Limited Duties and responsibilities of the Risk Management Committee 1. To impose PRG Group’s policies and guidelines on risk management in order that PRG Group’s operations reach its objectives and goals. 2. To analyze and evaluate incurred or possibly incurred risks at a level of PRG Group continuously and annually. 3. To consider, approve, and review risk management plans of PRG Group annually. 4. To review and monitor risk management performance of PRG Group regularly. 5. To report to the Board of Directors and communicate risks and major risk management to the Audit Committee. 6. To support, follow up, and develop risk management of PRG Group regularly. 7. The Risk Management Committee conducts meetings as follows: 7.1 To review and monitor risk management performance once a quarter for the 1st4th quarter. 7.2 To review risk management plans once a year. PRG Public Company Limited realizes the importance of risk management as an important mechanism and tool to help the organization achieve the target objectives and goals. Therefore, the Company has set up a risk management policy that focuses on the improvement of the risk management system according to the good corporate governance guidelines. There is also an integrated risk management that is implemented systematically and consistently throughout the organization. Risks in all levels of the organization and may directly affect the business can be divided into 5 aspects: - Strategic Risk is the risk in important strategies and policies of the Company. It could arise from an appropriate strategy or the operation by the strategy or the inconsistency of the policy, target, strategy, organization’s structure, the state of competition, resources, plan implementation and environment. However, the Company has always followed up on important strategies and plans that can affect the Company’ strategic goals. - Operational Risk is the risk that could arise from every operation process. It covers all factors related to the process, tools, IT, and personnel that could affect the operation of the

organization. However, the Company has set up a clear operational process and a measure to supervise the work of each unit that could cause damage on the organization so that the operation can be correct and appropriate. - Financial Risk is the risk that could arise out of the ineffectiveness of budget, financial problems and risks that could affect the performance and financial status of the organization. The Company has always generated sufficient fund in time to reduce the risks that could affect the Company’s investments. - Compliance Risk is the risk that could arise out of the inability to comply by the related rules and laws. It could be that the rules and laws were not appropriate and become an obstacle to the operation. However, the Company has also considered the compliance by the rules within and outside the organization as well as important laws by supervising and examining the strict compliance by the related rules and laws. - Hazard Risk is the risk that could affect the life safety of customers, tenants, employees and the organization’s property. The hazard could come from both internal and external factors. The Company has set up a policy and safety measure to strictly prevent such risk that could cause damage to the Company. Additionally, in regards to the investments in different projects, the Risk Management Committee (RMC) has implemented a rule stipulating that the request for the approval of the budget exceeding 10 million Baht requires a risk analysis and an approval from the relevant directors. The Risk Management Committee (RMC) must always be informed to prevent any investment risk of the Company. The Company continues to track the execution of risk management. All levels are required to submit a quarterly risk management report in order to reduce the risk to an acceptable level and allow the risk management plan to be reviewed and updated annually. Code of Ethics and Code of Conduct The Board of Directors has made available the Code of Ethics and the Code of Conduct for directors, executives and Company’s staff. They serve as guidelines for all directors, executives and staff of the Company and its subsidiaries in carrying out their duties in honest, upright and fair manner. The purpose is to ensure that the Company’s conduct of business affairs meets with the established objectives, taking into consideration the responsibility towards all groups of stakeholders including shareholders, customers, trading partners, competitors, creditors, staff, society, communities, as well as the environment. The codes also help enhance the positive corporate image that will bring greater stability to the Company. Adhering to the codes is also in line with the Company’s good corporate governance principles. The Company had determined to monitor and supervise the committee, the executives and employees to practice in accordance to the business ethic and code of ethics by assigning all the employees to acknowledge and understand the business operation ethics handbook that the Company had established and to use it as a guideline to perform their duties with integrity, honesty, and fairness. Those who refrain will be investigated and appropriate disciplinary punishment will be made, which may be to the extent of termination of employment and even legal action made be in the case of illegal conduct. Conflicts of Interest The Board of Directors has adopted a policy and various measures that serve as guidelines for dealing with conflicts of interest. The policy and the measures are in compliance with the guidelines given by the Stock Exchange of Thailand. In this connection, all employees of the Company are required to take into consideration the best interest of the Company when they make business decisions. In addressing conflicts of interest, the employees have to consider carefully and adhere to the principles of honesty, integrity and rationality a well as independence within the framework of good ethics. The Board of Directors also ensures that complete information is disclosed, mainly in the best interest of the Company. In considering and deciding on matters which require approval, those with conflicts of interest or those who are involved in the matters under consideration are prohibited from participating in the process. At the meetings of the Board of

Directors in the past year, if there was an agenda item in which a director might have a conflict of interest, the director concerned would refrain from giving opinions or voting on the item. In this connection, the Audit Committee is responsible for giving opinions on the related party transactions or any transactions which might involve a conflict of interest, in an appropriate and careful manner and in compliance with the requirements imposed by the Stock Exchange of Thailand. As regards the transactions which might involve a conflict of interest, the Board of Directors will consider such transactions in an appropriate and careful manner and in compliance with the requirements imposed by the Stock Exchange of Thailand. The information about the transactions has to be disclosed in the annual report (Forms 56-1 and 56-2). In 2015, there was no event that showed inappropriate behavior or practice involving a conflict of interest. Supervision of use of inside information The Company places strong emphasis on the supervision of use of inside information. As a result, it has adopted a policy on good corporate governance. As well, it has established its Code of Ethics and the Code of Conduct. The directors, executives and staff are prohibited from using inside information for their own benefit by taking advantage of their positions. They are also prohibited from getting involved in either any business that competes with the Company or any other related businesses. As well, they shall not use inside information in trading the company shares for their own or othersâ&#x20AC;&#x2122; benefit. The related details are as follows: Supervision of Use of the Companyâ&#x20AC;&#x2122;s Inside Information The Board of Directors, executives or staffs who have access to inside information are prohibited from disclosing it to any third party or person who is not involved in the matter. They are also prohibited from using the information for their own benefit. Changes in shareholdings Members of the Board of Directors and executives including their spouses and minor children are required to prepare and disclose reports annually to the Securities and Exchange Commission (SEC) when there are changes in their holdings of shares in Patum Rice Mill and Granary Public Company Limited, in compliance with Section 59 of Securities and Exchange Act B.E. 2535. Trading of Company Shares They are prohibited from trading the company shares before the financial statements are disclosed to the public. The Company issues a notification prohibiting the share trading every time before the disclosure schedule. In 2015, there was no event that showed inappropriate behaviorâ&#x20AC;&#x2122;s supervision of use of inside information.

17. Report on the responsibility of the Board of Directors towards financial reports The Company’s Board of Director is responsible for the separate financial statements of the Company and the consolidated financial statements of the Company and its subsidiaries as well as financial information presentation in the annual reports. The financial statements for the year end December 31, 2015 have been prepared in accordance with Thailand’s General Accepted Accounting Principle (GAAP), In preparing the financial statements, appropriate accounting policies have been adopted and regularly adhered to, using careful discretion and reasonable estimated. As well, key information has been adequately disclosed in the notes to the financial statements. The purpose is to ensure that the disclosed information rightly reflect the Company’s financial status, performance and cash flows in transparent manner, which are beneficial to the investing public. Importantly, the certified auditor from EY Office Limited has audited the financial statements and issued an unqualified opinion on them. To enable the auditor to conduct the audit and provide the opinion in line with the audit standards, the Company provides the auditor with its support in terms of information and documents. The Board of Directors has also put in place and maintained risk management system, internal control systems, internal audit systems as well as appropriate and efficient corporate governance. The purpose is to ensure that the accounting information is accurate, complete and adequate, and that not only the Company’s assets and risk protection are properly maintained but also fraud and significant irregular actions are prevented. In this connection, the Board of Directors has appointed the Audit Committee with all of its members being independent directors. The Committee is responsible for reviewing accounting policies and ensuring the quality of financial reports. It is also responsible for reviewing internal control systems. As well, it is responsible for ensuring that the disclosure of information about related party transactions is complete, adequate and appropriate. The opinion of the Audit Committee is given in its report which is already included in this Annual Report. The Board of Directors is of the opinion that overall internal control system are adequate and appropriate and gives rise to the reasonable confidence that the separate financial statements of the Company as well as the consolidated financial statements of the Company and its subsidiaries for the year end December 31, 2015 are reliable and in compliance with the General Accepted Accounting Principle (GAAP) as well as the related laws and regulations.

Suphadej Poonpipat Chairman of Board of Director

Somkiat Makcayathorn Managing Director

18. Audit committee’s report Dear Shareholders of Patum Rice Mill and Granery Public Company Limited The Audit Committee of Patum Rice Mill and Granary Public Company Limited consists of three following independent directors with qualifications and expertise in accounting and management. 1. Dr. Pornsiri Poonakasem Chairman of the Audit Committee 2. Asso. Prof. Dr. Sathit Paniangtong Member of the Audit Committee 3. Mr. Serm Henry Phenjati Member of the Audit Committee Ms. Yupapun Paritranun Secretary of the Audit Committee The Audit Committee has performed its duties within the scope of responsibilities assigned and in accordance with the charter of the Audit Committee, which is in compliance with the regulation of the Stock Exchange of Thailand. In the accounting period 2015 the Audit Committee had convened a total of 12 meetings, each of which was attended by all members on the Audit Committee together with the management, internal audit team and auditors to discuss relevant issues and report the meeting outcomes to the Board of Directors. The essence of the work performed can be summarized as follows: Financial Statement Report The Audit Committee, the auditors, management division and Internal Audit had reviewed the Company’s quarterly and the yearly financial statements as well as the consolidated financial statements of the Company and its subsidiaries. By considering from important aspect and consultation is free to ensure that the internal control process of the Company financial budget is accurate and reliable, as well as to ensure that the disclosure of important information is sufficient and timeliness for the financial statement users. Which is also in accordance with the laws and related notices as well as in accordance with the regulations of the Stock Exchange of Thailand and Securities and Exchange Commission and in comply with Financial Reporting Standards. In addition, the Audit Committee had a meeting with the auditors without any executives or management attended the meeting for inquiring about various issues of the results of auditing and the auditors did not have any information or special observation from the audit. Related Transaction or Conflict of interest transaction The Audit Committee had considered and given opinions about connected transactions or transactions that may give rise to a conflict of interest with the Company and its subsidiaries. The purpose is caution, rationality and taking into account the interest of the stakeholders and also includes adequate information in line with the conditions imposed by the Stock Exchange of Thailand. Internal Control System and Risk Management The Audit Committee reviewed the adequacy of the Company’s and its subsidiaries’ Internal Control Systems and Risk Management by making inquiries and considering based on the reports of the Internal Audit Department and the auditors, along with the implementation of solutions and streamline to significant issues or issues with high risk, as well as acknowledge the reports on unusual events in terms of fraudulent or operational error in order to find the causes and approaches to prevent such incidents in the future. The purpose is to assess the appropriateness and the efficiency of the Company’s Internal Control System, risk management, and business operations of the management that are in line with the established policies and the delegation of the authority.

Regulatory compliance and regulations The Audit Committee reviewed the Company’s business operation to ensure that it is in line with the securities and exchange law, regulation of the Stock Exchange of Thailand and laws relation to the business of the Company and acknowledge the changing of regulations which have an effect on the company’s business operation. Good Corporate Governance The Audit Committee had reviewed and evaluated on Good Corporate Governance to ensure that the Company manages in accordance with the principles of Good Corporate Governance for Listed Company on the Stock Exchange of Thailand, in order to build confidence and reliability to stakeholders. Internal Audit Governance The Audit Committee had annually reviewed the Charter of the Audit Committee and the Internal Audit Department as well as considered the independence of the Internal Audit Department, its scope of responsibilities and annual audit plan. The Audit Committee also considered the audit report and monitored the implementation of solutions to significant issues mentioned in the audit report. Giving advice on how to improve and streamline the audit performance to be more efficient. The committee also considered the appropriateness of the budget, the workforce, training and personnel development. In addition, the committee considered key performance index (KPI) to evaluate the annual performance of the Internal Audit Department and assigned the department to take Internal Control Self Assessment by using the Internal Audit Standard that is in accordance with the International Standard for the Professional Practice of Internal Auditing. Considering the appointed Auditors and Compensation The Audit Committee had selected and considered the remuneration of the Auditors of EY Office Company Limited by considering auditors qualifications, knowledge, capabilities, experiences, the audit quality of the previous year, and the independence of the auditors which are in accordance with the regulations of The Stock Exchange of Thailand or any other related department. The Audit Committee sees that the auditors from EY Office Company Limited have good understanding of the Company’s business and regulary delivered their work in a timely manner, thus the Board of Directors proposed to the Annual General Meeting of Shareholders of the year 2014 to appoint EY Office Company Limited as the Company’s auditors. The appointed auditors are: Ms. Ratana Jala Certified Public Accountant license number 3734 and/or Ms. Nonglak Pumnoi Certified Public Accountant license number 4172 and/or Ms. Sumalee Reewarabandith Certified Public Accountant license number 3970 The Audit Committee deemed that during the accounting period ended on 31st December 2014, the company had put in place the transparent, adequate and appropriate Internal Control Systems covering risky management and the company had established procedures that helped build confidence in Company’s operation in accordance with the related laws by having good corporate governance along with the compilation and disclosure of adequate and reliable Company’s financial report information.

Dr. Pornsiri Poonakasem Chairman of Audit Committee 18th February 2016

19. Compensation and nomination committeeâ&#x20AC;&#x2122;s report The Companyâ&#x20AC;&#x2122;s Board of Directors approved the establishment of the Nomination and Remuneration Committee to perform duties as assign by the Board. As at December 31, 2015, the Nomination and Remuneration Committee consists of three members as follows: 1. Asso. Prof. Dr. Sathit Parniangtong Chairman of the Compensation and Nomination Committee, (Independent director) 2. Mr. Serm Henry Phenjati Member of the Compensation and Nomination Committee, (Independent director) 3. Mr. Suvait Theeravachirakul Secretary and Member of the Compensation and Nomination Committee The Nomination and Remuneration Committee is responsible for searching for qualified candidates for directorship and propose them to the Board of Directors or the meeting of shareholders for consideration. It is also responsible for searching for qualified candidates for the position of Managing Director as well as considering the remuneration of the position. The Committee will appraise the performance of the Managing Director annually. For the year 2015, the Nomination and Remuneration Committee carried out its duties cautiously, carefully and in a rational manner. To fill vacancies as a result of the retirement of directors by rotation, the Committee held 2 meetings during the period to review and propose names of candidates who were qualified legally and in compliance with the rules and regulations related to directorship. The Committee also considered the remuneration of the Board of Directors and the various committees. The names of the qualified candidates were proposed to the Board of Directors and the meeting of the shareholders for appointment. The shareholders were also provided with an opportunity to propose names of persons whom they considered appropriate for appointment as directors. As regards the consideration of the remuneration of Managing Director, the Committee took into account the positionâ&#x20AC;&#x2122;s duties and responsibilities, the assignments given to the Managing Director as well as the performance of the Company in comparison with the established targets. The Committee also took into account the real economic conditions and the levels of remuneration earned by the same position in similar industries.

Asso. Prof. Dr. Sathit Parniangtong Chairman of the Compensation and Nomination Committee

20. Auditorâ&#x20AC;&#x2122;s Report and Financial Statements Independent Auditor's Report To the Shareholders of Patum Rice Mill and Granary Public Company Limited I have audited the accompanying financial statements of Patum Rice Mill and Granary Public Company Limited and its subsidiaries which comprise the consolidated statement of financial position as at 31 December 2015, and the related consolidated statements of comprehensive income, changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statement of Patum Rice Mill and Granary public Company Limited for the same year. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Patum Rice Mill and Granary Public Company Limited and its subsidiaries as at 31 December 2015, and their financial performance for the year then ended in accordance with Thai Financial Reporting Standards.

Nonglak Pumnoi Certified Public Accountant (Thailand) No. 4172 EY Office Limited Bangkok: 18 February 2016

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of financial position As at 31 December 2015 (Unit: Baht) Consolidated financial statements Note

2015

Separate financial statements

2014

2015

2014

Assets Current assets Cash and cash equivalents

22,620,413

46,600,536

6,967,054

4,428,906

Trade and other receivables

6, 8

675,187,329

271,276,274

663,745,796

261,086,162

Inventories

240,052,723

168,719,533

147,995,316

149,127,885

Short-term loan to a subsidiary

6,500,000

Other current assets

51,779,876

57,276,447

16,369,256

21,106,293

Total current assets

989,640,341

543,872,790

841,577,422

435,749,246

1,133,073,567

883,073,567

7,039,418,373

7,289,043,138

6,686,918,373

6,924,043,138

33,948,500

3,408,275

3,578,259

4,425

61,086

Non-current assets Investments in subsidiaries Investment in parent company - available-for-sale security Long-term investments - available-for-sale security Other long-term investments Investment properties

39,889,363

40,719,900

29,525,467

30,765,720

Property, plant and equipment

320,957,648

325,523,075

171,945,461

185,918,269

Prepaid rental fee

388,985,594

237,932,922

Intangible asset

6,476,633

6,298,775

4,343,850

5,099,776

Deferred tax assets

3,078,110

3,829,300

1,701,313

3,062,542

Goodwill

53,421,268

14,948,746

16,204,735

Total non-current assets

7,904,532,510

7,976,551,372

8,027,512,456

8,032,024,098

Total assets

8,894,172,851

8,520,424,162

8,869,089,878

8,467,773,344

Other non-current assets

The accompanying notes are an integral part of the financial statements.

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2015 (Unit: Baht) Consolidated financial statements Note

2015

Separate financial statements

2014

2015

2014

Liabilities and shareholders' equity Current liabilities Bank overdrafts and short-term loans from banks 16

993,121,509

513,076,251

993,121,509

513,076,251

Short-term loans from related persons

4,000,000

Short-term loan from a subsidiary

271,620,000

302,120,000

231,008,076

103,156,827

241,862,427

63,129,449

297,563

3,869,583

2,192,166

3,316,276

417,694

16,639,657

12,645,828

5,493,638

4,164,863

1,244,936,388

635,071,072

1,515,711,413

882,908,257

14,786,295

19,284,819

8,506,566

15,312,712

of current portion

694,312

Deferred tax liabilities

1,198,581,953

1,250,543,906

1,155,868,954

1,203,293,906

3,308,604

3,541,729

Total non-current liabilities

1,217,371,164

1,273,370,454

1,165,069,832

1,218,606,618

Total liabilities

2,462,307,552

1,908,441,526

2,680,781,245

2,101,514,875

Trade and other payables Current portion of liabilities under financial lease

6, 17 18

Income tax payable Other current liabilities Total current liabilities Non-current liabilities Provision for long-term employee benefits Liabilities under financial lease - net

Other non-current liabilities

The accompanying notes are an integral part of the financial statements.

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of financial position (continued) As at 31 December 2015 (Unit: Baht) Consolidated financial statements Note

2015

Separate financial statements

2014

2015

2014

Shareholders' equity Share capital Registered share capital 900,000,000 ordinary shares of Baht 1 each

900,000,000

600,000,000

160,000,000

90,000,000

642,914,328

612,438,619

714,832,820

703,082,844

Other components of shareholders' equity

4,877,272,064

5,083,082,875

4,623,475,813

4,813,175,625

Equity attributable to owners of the Company

6,370,186,392

6,545,521,494

6,188,308,633

6,366,258,469

61,678,907

66,461,142

Total shareholders' equity

6,431,865,299

6,611,982,636

6,188,308,633

6,366,258,469

Total liabilities and shareholders' equity

8,894,172,851

8,520,424,162

8,869,089,878

8,467,773,344

Issued and fully paid-up share capital 600,000,000 ordinary shares of Baht 1 each Share premium Retained earnings Appropriated - statutory reserve Unappropriated

Non-controlling interests of the subsidiaries

The accompanying notes are an integral part of the financial statements.

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of comprehensive income For the year ended 31 December 2015 (Unit: Baht) Consolidated financial statements

Separate financial statements

Note

2015

2014

2015

2014

2,549,380,992

1,945,219,133

2,174,517,662

1,604,976,135

8,256,262

10,752,004

12, 24

300,954,516

299,591,501

284,622,484

284,563,645

40,508,761

42,314,735

41,952,235

42,778,293

2,899,100,531

2,297,877,373

2,501,092,381

1,932,318,073

2,094,920,848

1,650,131,920

1,800,849,087

1,333,239,831

7,444,828

10,742,770

Sales Revenues from sales Revenues from services Dividend income Other income Total revenues Expenses Cost of sales

Cost of services Selling expenses

345,038,383

212,133,312

288,019,321

184,993,862

Administrative expenses

114,023,613

95,053,839

75,221,718

63,888,584

2,561,427,672

1,968,061,841

2,164,090,126

1,582,122,277

337,672,859

329,815,532

337,002,255

350,195,796

(15,436,425)

(13,507,850)

(19,893,701)

(14,930,219)

322,236,434

316,307,682

317,108,554

335,265,577

Total expenses Profit before finance cost and income tax expenses Finance cost

Profit before income tax expenses Income tax expenses

Profit for the year

(9,174,328)

(2,069,911)

(9,199,161)

(453,262)

313,062,106

314,237,771

307,909,393

334,812,315

(259,809,765)

299,549,718

(237,124,765)

284,549,718

51,961,953

(59,909,944)

47,424,953

(56,909,944)

(207,847,812)

239,639,774

(189,699,812)

227,639,774

Other comprehensive income: Other comprehensive income to be reclassified to profit or loss in subsequent periods: Gain (loss) on change in value of available-for-sale investments Income tax effect Other comprehensive income to be reclassified to profit or loss in subsequent periods - net of income tax

Other comprehensive income not to be reclassified to profit or loss in subsequent periods Actuarial gain Income tax effect

6,971,710

(1,394,342)

5,577,368

4,800,729 (960,146)

Other comprehensive income not to be reclassified to profit or loss in subsequent periods - net of income tax

3,840,583

Other comprehensive income for the year

(202,270,444)

239,639,774

(185,859,229)

227,639,774

Total comprehensive income for the year

110,791,662

553,877,545

122,050,164

562,452,089

The accompanying notes are an integral part of the financial statements.

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of comprehensive income (continued) For the year ended 31 December 2015 (Unit: Baht) Consolidated financial statements Note

2015

2014

Separate financial statements 2015

2014

Net income attributable to: Equity holders of the Company

325,306,643

328,236,164

Minority interests of subsidiaries

(12,244,537)

(13,998,393)

313,062,106

314,237,771

Equity holders of the Company

124,664,897

567,875,938

Non-controlling interests of the subsidiaries

(13,873,235)

(13,998,393)

110,791,662

553,877,545

307,677,393

334,812,315

122,050,164

562,452,089

Total comprehensive income attributable to:

(Unit: Baht) Earnings per share Basic earnings per share

Profit attributable to equity holders of the Company

0.54

0.55

0.51

The accompanying notes are an integral part of the financial statements.

0.56

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of changes in shareholders' equity For the year ended 31 December 2015 (Unit: Baht) Consolidated financial statements Equity attributable to the owners of the Company Other components of equity other comprehensive income

Issued and

Retained earnings

fully paid-up

Appropriated -

share capital Balance as at 1 January 2014

Share premium

600,000,000

160,000,000

statutory reserve

Unappropriated

90,000,000

569,202,455

Surplus (deficit)

Total equity

Equity attributable

on changes in value

attributable to

to non-controlling

Total

of available-for-sale

the owners of

interests of

Shareholders'

investments

the Company

the subsidiaries

4,843,443,101

6,262,645,556

64,459,535

equity 6,327,105,091

Increase in non-controlling interests of subsidiaries from investment in subsidiaries Profit for the year

328,236,164

16,000,000

(13,998,393)

314,237,771

Other comprehensive income for the year

239,639,774

Total comprehensive income for the year

328,236,164

239,639,774

567,875,938

Dividend paid (Note 26)

(285,000,000)

Balance as at 31 December 2014

600,000,000

160,000,000

90,000,000

612,438,619

5,322,722,649

6,545,521,494

66,461,142

6,611,982,636

Balance as at 1 January 2015

600,000,000

160,000,000

90,000,000

612,438,619

5,083,082,875

6,545,521,494

66,461,142

6,611,982,636

(285,000,000)

(13,998,393) -

239,639,774 553,877,545 (285,000,000)

Increase in non-controlling interests of subsidiaries from investment in subsidiaries

325,306,643

5,169,066

(205,810,811)

Total comprehensive income for the year

330,475,709

(205,810,811)

Dividend paid (Note 26)

(300,000,000)

600,000,000

160,000,000

90,000,000

642,914,328

Profit for the year Other comprehensive income for the year

Balance as at 31 December 2015

The accompanying notes are an integral part of the financial statements.

4,671,461,253

9,091,000

(12,244,537)

313,062,106

(200,641,745)

(1,628,698)

(202,270,443)

124,664,898

(13,873,235)

(300,000,000)

110,791,663 (300,000,000)

6,370,186,392

61,678,907

6,431,865,299

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Statement of changes in shareholders' equity (continued) For the year ended 31 December 2015 (Unit: Baht) Separate financial statements Other components of equity Other comprehensive income Surplus (deficit) Issued and

Retained earnings

fully paid-up

Appropriated -

share capital Balance as at 1 January 2014

Share premium

600,000,000

160,000,000

statutory reserve

Unappropriated

90,000,000

653,270,529

on changes in value

Total

of available-for-sale

Shareholders'

investments

equity

4,585,535,851

6,088,806,380

Profit for the year

334,812,315

Other comprehensive income for the year

227,639,774

Total comprehensive income for the year

334,812,315

227,639,774

562,452,089

(285,000,000)

Balance as at 31 December 2014

Dividend paid (Note 26)

600,000,000

160,000,000

90,000,000

Balance as at 1 January 2015

600,000,000

160,000,000

Profit for the year

(285,000,000)

703,082,844

5,040,815,399

6,928,710,558

90,000,000

703,082,844

4,813,175,625

6,366,258,469

307,909,393

Other comprehensive income for the year

3,840,583

(189,699,812)

(185,859,229)

Total comprehensive income for the year

311,749,976

(189,699,812)

122,050,164

Dividend paid (Note 26)

(300,000,000)

600,000,000

160,000,000

90,000,000

714,832,820

4,433,776,001

6,310,358,797

Balance as at 31 December 2015

The accompanying notes are an integral part of the financial statements.

(300,000,000)

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Cash flow statement For the year ended 31 December 2015 (Unit: Baht) Consolidated financial statements 2015

Separate financial statements

2014

2015

2014

Cash flows from operating activities Profit before tax

322,236,434

316,307,682

317,108,554

335,265,577

47,713,432

35,968,055

18,877,185

18,895,467

Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities: Depreciation and amortisation Gain (loss) on sales of equipment

2,112,007

Amortisation of prepaid rental fee

22,137,899

Reversal of allowance for doubtful debts

(250,000)

(28,825) 12,991,102

(500,000)

103,379

(103,379)

Allowance for impairment on asset

627,621

Dividend income Interest income Interest expenses

(250,000)

Provision for long-term employee benefits (reversal)

(9,248)

(900,000)

Unrealised gain on exchange

Allowance for diminution in value of inventories (reversal)

(1,681,047)

800,000

(6,200,000)

2,797,615

(5,100,000)

3,076,000

2,473,186

1,580,093

(2,005,417)

1,288,650

(300,954,516)

(299,591,501)

(284,622,484)

(284,563,645)

(445,444)

(1,474,278)

(7,474,125)

(15,063,784)

15,436,425

13,507,850

19,893,701

14,930,219

104,259,423

81,682,035

54,849,746

74,015,857

(403,661,055)

(35,423,228)

(402,462,690)

(39,540,527)

Profit from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade and other receivables Inventories Other current assets Other non-current assets Prepaid rental fee

(65,133,190)

102,513,234

6,232,569

97,785,698

10,163,842

53,425,682

4,475,828

48,397,266

1,255,989

(5,737,490)

128,996,160

27,799,535

179,385,790

18,151,320

2,091,256

7,832,900

1,328,775

550,119

(4,491,635)

(1,466,490)

(173,190,570)

Operating liabilities increase (decrease) Trade and other payables Other current liabilities Other non-current liabilities Long-term employee benefits paid Cash flows from (used in) operating activities Cash paid for income tax Net cash flows from (used in) operating activities

(233,125) (395,451,270) (10,955,065) (406,406,335)

226,134,543 (12,958,873) 213,175,670

(156,189,982) (5,638,287) (161,828,269)

The accompanying notes are an integral part of the financial statements.

(1,466,490) 197,893,243 (1,798,739) 196,094,504

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Cash flow statement (continued) For the year ended 31 December 2015 (Unit: Baht) Consolidated financial statements 2015

Separate financial statements

2014

2015

2014

Cash flows from investing activities Cash paid for purchase of current investments

169,984

56,661

Cash paid for increase share capital of subsidiary (Note 10)

Net cash paid for acquisition share capital of subsidiary (Note 10)

Cash received from reduction of capital of subsidiary

(44,133,500)

(588,404)

(250,000,000)

(522,500,000)

Cash received from non-controlling interest of subsidiary from increase share capital of a subsidiary

9,091,000

16,000,000

Cash received from short-term loans to subsidiaries

270,880,000

19,230,000

Increase in short-term loans to subsidiaries

(277,380,000)

(7,600,000)

Cash received from long-term loan to a subsidiary

286,200,000

Increase in long-term loan to a subsidiary

(11,200,000)

1,994,074

369,165

1,989,874

16,355

300,954,516

299,591,501

284,622,484

284,563,645

495,747

1,423,975

7,423,802

15,129,718

Proceed from sales of plant and equipment Cash received from dividends Cash received from interest income Purchase of intangible assets Purchase of investment properties

(1,827,964) -

(1,003,499) (641,255)

(341,351) -

(385,200) -

Purchase of plant and equipment

(44,773,443)

(62,615,301)

(2,875,673)

(1,239,096)

Net cash flows from investing activities

221,970,414

252,536,182

34,375,797

62,215,422

Cash flows from financing activities Increase (decrease) in bank overdrafts Decrease in restricted bank deposit Cash received from short-term loans from banks Repayment of short-term loans from banks

45,258

(3,449,076)

45,258

511,000

2,085,000,000

1,437,000,000

2,085,000,000

1,437,000,000

(1,605,000,000)

(1,697,000,000)

(1,605,000,000)

(1,697,000,000)

Cash received from short-term loans from subsidiaries

317,811,000

Repayment of short-term loans from subsidiaries

(348,311,000)

Repayment of short-term loans from related persons Cash paid for financial lease agreement Cash paid for dividend

(3,066,713)

(4,000,000) (198,375)

(3,000,000) -

(198,375)

369,320,000 (67,200,000) -

(300,000,000)

(285,000,000)

(300,000,000)

(285,000,000)

Cash paid for interest expenses

(15,391,085)

(13,778,711)

(19,356,263)

(14,562,607)

Net cash flows from (used in) financing activities

160,455,798

(564,716,787)

129,990,620

(260,509,320)

Net increase (decrease) in cash and cash equivalents

(23,980,123)

(99,004,935)

2,538,148

(2,199,394)

Cash and cash equivalents as at beginning of year

46,600,536

145,605,471

4,428,906

6,628,300

Cash and cash equivalents as at end of year

22,620,413

46,600,536

6,967,054

4,428,906

The accompanying notes are an integral part of the financial statements.

Patum Rice Mill and Granary Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2015 1.

Corporate information Patum Rice Mill and Granary Public Company Limited (â&#x20AC;&#x153;the Companyâ&#x20AC;?) is a public company incorporated and domiciled in Thailand. Its parent company is MBK Public Company Limited, which was incorporated in Thailand. The Company is principally engaged in the processing and packaging of rice and related business. Its registered office and factory address is at 88, Moo 2, Tiwanont Road, Bangkadee Sub-District, Muang District, Pathumtani 12000 and a second factory is located at 109/3, Moo 14, Mitraparp Road Km.199, Lardbuakhow Sub-District, Sikhiu District, Nakornratchasima 30340.

Basis for preparation of the financial statements

2.1

The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2

Basis of consolidation a)

The consolidated financial statements include the financial statements of Patum Rice Mill and Granary Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”):

Company’s name

Nature of business

Country of

Percentage of

incorporation

shareholding 2015

Directly owned

2014

PRG Granary Co., Ltd.

Warehouse rental

Thailand

99.99

MBK Food and Entertainment

Food center

Thailand

75.00

MBK Food Island Co., Ltd.

Food center

Thailand

99.98

MBK Food System Co., Ltd.

Restaurant

Thailand

55.00

60.00

Distributor of rice, plant and

Thailand

99.99

Thailand

49.99

Thailand

99.99

Thailand

99.99

Co., Ltd.

Indirectly owned (owned by PRG Granary Co., Ltd.) Ratchsima Rice Co., Ltd.

machinery rental Sima Pac Co., Ltd.*

Manufacturer and distributor of plastic bag

(owned by Ratchsima Rice Co., Ltd.) Innofood (Thailand) Co., Ltd.

Distributor of rice and development of product from rice

(owned by MBK Food and Entertainment Co., Ltd.) MBK Restaurant Group Co., Ltd.

Restaurant

(Formerly known as “MBK Suki Number One Co., Ltd.”) * The Company has control over financial and operating policies of Sima Pac Co., Ltd. through the Board of Directors of that company.

During the current year, there were significant changes the composition of the Group as described in Note 10. b)

The Company is deemed to have control over an investee or subsidiaries if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns.

Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

The financial statements of the subsidiaries are prepared using the same reporting period and significant accounting policies as the Company.

Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements.

Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position.

2.3

The separate financial statements present investments in subsidiaries under the cost method.

New financial reporting standards Below is a summary of financial reporting standards that became effective in the current accounting year and those that will become effective in the future. a)

Financial reporting standards that became effective in the current year The Company has adopted the revised (revised 2014) and new financial reporting standards issued by the Federation of Accounting Professions which become effective for fiscal years beginning on or after 1 January 2015. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Companyâ&#x20AC;&#x2122;s financial statements. However, some of these standards involve changes to key principles, which are summarised below: TAS 19 (revised 2014) Employee Benefits This revised standard requires that the entity recognises actuarial gains and losses immediately in other comprehensive income while the former standard allowed the entity to recognise such gains and losses immediately in either profit or loss or other comprehensive income, or to recognise them gradually in profit or loss. This revised standard does not have any impact on the financial statements as the Company and its subsidiaries already recognise actuarial gains and losses immediately in other comprehensive income.

TFRS 10 Consolidated Financial Statements TFRS 10 prescribes requirements for the preparation of consolidated financial statements and replaces the content of TAS 27 Consolidated and Separate Financial Statements dealing with consolidated financial statements. This standard changes the principles used in considering whether control exists. Under this standard, an investor is deemed to have control over an investee if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns, even if it holds less than half of the shares or voting rights. This important change requires the management to exercise a lot of judgement when reviewing whether the Company and its subsidiaries have control over investees and determining which entities have to be included in preparation of the consolidated financial statements. This standard does not have any impact on the financial statements of the Company and its subsidiaries. TFRS 12 Disclosure of Interests in Other Entities This standard stipulates disclosures relating to an entityâ&#x20AC;&#x2122;s interests in subsidiaries, joint arrangements and associates, including structured entities. This standard therefore has no financial impact on the financial statements of the Company and its subsidiaries. TFRS 13 Fair Value Measurement This standard provides guidance on how to measure fair value and stipulates disclosures related to fair value measurement. Entities are to apply the guidance under this standard if they are required by other financial reporting standards to measure their assets or liabilities at fair value. The effects of the adoption of this standard are to be recognised prospectively. This standard does not have any significant impact on the financial statements of the Company and its subsidiaries. (b) Financial reporting standard that will become effective in the future During the current year, the Federation of Accounting Professions issued a number of the revised (revised 2015) and new financial reporting standards and accounting treatment guidance which is effective for fiscal years beginning on or after 1 January 2016. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards.

The management of the Company and its subsidiaries believe that the revised financial reporting standards will not have any significant impact on the financial statements when they are initially applied. 4.

Significant accounting policies

4.1

Revenue recognition a)

Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances.

Rendering of services Service revenue is recognised when service has been rendered taking into account the stage of completion.

Interest income Interest income is recognised on an accrual basis based on the effective interest rate.

Dividends Dividend is recognised when the right to receive the dividend is established.

4.2

Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

4.3

Trade accounts receivable Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging.

4.4

Inventories Finished goods and work in process are valued at the lower of cost under the first-in, first-out method and net realisable value and comprise raw material, direct labour and attributable factory overheads. Raw materials, chemicals, spare parts and factory supplies are valued at the lower of average cost and net realisable value and are charged to production costs whenever consumed.

4.5

Investments a)

Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income, and will be recorded in profit or loss when the securities are sold.

Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on impairment (if any).

Investments in subsidiaries are accounted for in the separate financial statements using the cost method.

The fair value of marketable security is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange of Thailand. The weighted average method is used for computation of the cost of investments. In the event the Company and its subsidiaries reclassify investments in securities from one type to another, such investment will be readjusted to its fair value as at the reclassification date. The difference between the carrying amount of the investment and its fair value on that date is recorded in profit or loss or recorded as other components of shareholdersâ&#x20AC;&#x2122; equity, depending on the type of investment that is reclassified. 4.6

Investment properties Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). Depreciation of investment properties is calculated by reference to their costs on the straight-line basis over estimated useful lives of 10 - 20 years. Depreciation of the investment properties is included in determining income. No depreciation is provided on land. On disposal of investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period when the asset is derecognised.

4.7

Property, plant and equipment and depreciation Land is stated at cost less allowance for loss on impairment (if any). Plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straightline basis over the following estimated useful lives: Buildings

5 - 20 years

Machinery and factory equipment

5 - 20 years

Furniture, fixtures and office equipment

3 - 10 years

Motor vehicles

5 years

Depreciation is included in determining income. No depreciation is provided on land, land improvement, and assets under installation. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 4.8

Intangible assets Intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss. Computer software has useful life of 10 years.

4.9

Goodwill Goodwill is initially recorded at cost, which equals to the excess of cost of business combination over the fair value of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combination, the excess is immediately recognised as gain in profit or loss. Goodwill is carried at cost less any accumulated impairment loss. Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. An impairment loss is recognised in profit or loss. Impairment losses relating to goodwill cannot be reversed in future periods.

4.10 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors, and officers with authority in the planning and direction of the Companyâ&#x20AC;&#x2122;s operations. 4.11 Long-term leases Leases of property, plant and equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element is charged to profit or loss over the lease period. The asset acquired under finance lease is depreciated over the useful life of the asset. Leases of property, plant and equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating leases payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. When an operating lease is terminated before the lease period has expired, and payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

4.12 Foreign currencies The consolidated and separate financial statements are presented in Baht, which is also the Companyâ&#x20AC;&#x2122;s functional currency. Items of each entity included in the consolidated financial statements are measured using the functional currency of that entity. Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in determining income.

4.13 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment and intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assetâ&#x20AC;&#x2122;s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss. 4.14 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The fundâ&#x20AC;&#x2122;s assets are held in a separate trust fund and the Company and its subsidiariesâ&#x20AC;&#x2122; contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiaries have obligations in respect of the severance payments they must make to employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by an independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised immediately in other comprehensive income. 4.15 Provisions Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

4.16 Income taxes Income tax expense represents the sum of corporate income tax currently payable and deferred tax. a)

Current tax Current income tax is provided in the accounts at the amounts expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation.

Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Company and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised. At each reporting date, the Company and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Company and its subsidiaries record deferred tax directly to shareholdersâ&#x20AC;&#x2122; equity if the tax relates to items that are recorded directly to shareholdersâ&#x20AC;&#x2122; equity.

4.17 Forward exchange contracts Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange ruling at the end of reporting period. Unrecognised gains and losses from the translation are included in determining income. Premiums or discounts on forward exchange contracts are amortised on a straight-line basis over the contract periods.

4.18 Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between buyer and seller (market participants) at the measurement date. The Company and its subsidiaries apply a quoted market price in an active market to measure their assets and liabilities that are required to be measured at fair value by relevant financial reporting standards. Except in case of no active market of an identical asset or liability or when a quoted market price is not available, the Company and its subsidiaries measure fair value using valuation technique that are appropriate in the circumstances and maximises the use of relevant observable inputs related to assets and liabilities that are required to be measured at fair value. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categories of input to be used in fair value measurement as follows: Level 1 -

Use of quoted market prices in an observable active market for such assets or liabilities

Level 2 -

Use of other observable inputs for such assets or liabilities, whether directly or indirectly

Level 3 - Use of unobservable inputs such as estimates of future cash flows At the end of each reporting period, the Company and its subsidiaries determine whether transfers have occurred between levels within the fair value hierarchy for assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis. 5.

Significant accounting judgements and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows:

Consolidation of subsidiary that the Company holds less than half of shares The management of the Company determined that the Company has control over Sima Pac Company Limited, even though the Company holds 49.99% of shares and voting rights that is less than half of shares and voting rights. This is because the Company is a major shareholder and has the ability to direct the significant activities, while other shareholders are only minor shareholders. As a result, Sima Pac Company Limited is deemed to be a subsidiary of the Company and has to be included in the consolidated financial statements from the date on which the Company assumed control. Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgement and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Fair value of financial instruments In determining the fair value of financial instruments recognised in the statement of financial position that are not actively traded and for which quoted market prices are not readily available, the management exercise judgement, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk (bank and counterparty, both) liquidity, correlation and longerterm volatility of financial instruments. Change in assumptions about these factors could affect the fair value recognised in the statement of financial position and disclosures of fair value hierarchy. Impairment of equity investments The Company and its subsidiaries treat available-for-sale investments and other investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgement of the management.

Investment properties In determining depreciation of investment properties, the management is required to make estimates of the useful lives and residual values of the Company and its subsidiariesâ&#x20AC;&#x2122; investment properties and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review investment property for impairment on a periodical basis and record impairment loss in the period when it is determined that its recoverable amount is lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review. Property, plant and equipment and Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the plant and equipment and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses when it is determined that their recoverable amounts are lower than the carrying amounts. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Goodwill and intangible assets The initial recognition and measurement of goodwill and intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows. Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the temporary differences and losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimate future taxable profits. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate.

Related party transactions During the year, the Group had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Million Baht) Consolidated financial statements 2015

Separate financial statements

2014

2015

Transfer pricing policy

2014

Transactions with parent company Sales

Dividend income

300

285

Declared rate

Prepaid rental fee payment

173

Contract price

Sales

Market price or prices which approximated market prices

Rental income

Contract price

Service income

Contract price

Purchase of raw materials

821

677

Rental expenses

Interest income

Interest expenses

Market price or prices which approximated market prices

Sales

Market price or prices which approximated market prices

Service expenses

Contract price

Service expenses Acquisition of investment in a subsidiary (Note 10)

Market price or prices which approximated market prices

Transactions with subsidiaries (eliminated from the consolidated financial statements)

Cost plus margin Contract rate with reference to the rates charged to third parties MLR of a commercial bank

Transactions with related companies

The outstanding balances of the above transactions have been presented in the statements of financial position as at 31 December 2015 and 2014 as follows: (Unit: Thousand Baht) Consolidated financial statements 2015

Separate financial statements

2014

2015

2014

Trade and other receivables - related parties Parent company

1,274

1,582

804

815

1,435

472

125

167

123

134

1,399

1,749

2,362

1,421

1,357

6,325

73,990

15,450

Related parties (under common control)

1,018

377

270

Total

2,375

6,702

74,068

15,720

Subsidiaries Related parties (under common control) Total Trade and other payables - related parties Parent company Subsidiaries

Short-term loans to subsidiaries Movements of short-term loans to subsidiaries as at 31 December 2015 were as follows: (Unit: Thousand Baht) Separate financial statements Balance as at 31 December

Balance as at 31 December

During the year

2014

Increase

Decrease

2015

Short-term loans to subsidiaries PRG Granary Company Limited

260,380

(260,380)

MBK Food and Entertainment Company Limited

17,000

(10,500)

6,500

277,380

(270,800)

6,500

Short-term loans to subsidiaries carried interest at MLR rate of a local commercial bank and dued at call.

100

Short-term loans from related persons Short-term loans from related persons amounting to Baht 4 million are loans from directors of Sima Pac Company Limited, a subsidiary, carry interest at MLR rate of a local commercial bank and due at call. As at 31 December 2015 and 2014, the outstanding balance and movement of short-term loans from related persons were as follows: (Unit: Thousand Baht) Consolidated financial statements Balance as at

Balance as at

31 December

During the year

2014

Increase

Decrease

2015

Short-term loans from related persons 4,000

Sima Pac Co., Ltd.

(4,000)

Short-term loans from subsidiaries As at 31 December 2015 and 2014, the outstanding balance and movement of short-term loans from subsidiaries were as follows: (Unit: Thousand Baht) Separate financial statements Balance as at Related

31 December

2014

Balance as at During the year Increase

Decrease

31 December 2015

Short-term loans from subsidiaries MBK Food and Entertainment Co., Ltd.

Subsidiary

34,500

63,500

(98,000)

MBK Food System Co., Ltd.

Subsidiary

22,000

17,991

(29,591)

10,400

MBK Food Island Co., Ltd.

Subsidiary

235,000

50,800

(204,000)

81,800

PRG Granary Co., Ltd.

Subsidiary

4,620

183,020

(8,220)

179,420

Subsidiary

6,000

2,500

(8,500)

302,120

317,811

(348,311)

271,620

MBK Restaurant Group Co., Ltd. (Formerly known as â&#x20AC;&#x153;MBK Suki Number One Co., Ltd.â&#x20AC;?)

101

Prepaid rental fee On 2 April 2013, MBK Food Island Company Limited, a subsidiary, entered into a long-term space rental agreement, a long-term building equipment and systems rental agreement, and a long-term promotion and development space agreement with MBK Public Company Limited, for periods of 20 years (from 21 April 2013 to 20 April 2033). Under these agreements the subsidiary is required to pay prepaid rental fees over the terms of the contracts, totaling Baht 260 million. As at the date of the agreements date, the subsidiary classified the leases as operating leases, for which the rental payments are recognised as an expense on a straight-line basis over the lease period. On 29 October 2014, MBK Food Island Company Limited, a subsidiary, entered into a longterm space rental agreement, a long-term building equipment and systems rental agreement, and a long-term promotion and development space agreement with MBK Public Company Limited, for periods of 18 years (from 1 September 2014 to 20 April 2033). Under these agreements the subsidiary is required to pay prepaid rental fees over the terms of the contracts, totaling Baht 176 million. As at the date of the agreements date, the subsidiary classified the leases as operating leases, for which the rental payments are recognised as an expense on a straight-line basis over the lease period.

(Unit: Thousand Baht) 2015

2014

Prepaid rental fee - Beginning of the year (Net book value)

237,933

250,924

Prepaid rental fee increase

173,190

Less: Amortisation

(22,137)

(12,991)

Net book value

388,986

237,933

22,137

12,991

Amortisation for the year

102

Directors and managementâ&#x20AC;&#x2122;s benefits During the years ended 31 December 2015 and 2014, the Company and its subsidiaries had employee benefit expenses payable to their directors and management as below. (Unit: Million Baht) Consolidated

Separate

financial statements

2015 Short-term employee benefits Post-employment benefits Total

2014

2015

2014

Cash and cash equivalents (Unit: Baht) Consolidated

Separate

financial statements

2015

2014

Cash on hand

1,997,752

2,553,932

110,000

Bank deposits

20,622,661

44,046,604

6,857,054

4,318,906

Total

22,620,413

46,600,536

6,967,054

4,428,906

Bank deposits include savings accounts and fixed deposits. The savings account carried interest 0.13 - 0.40 percent per annum (2014: 0.38 percent per annum).

103

Trade and other receivables (Unit: Baht) Consolidated

Separate

financial statements

2015

2014

2015

2014

Trade receivables - related parties Aged on the basis of due dates Not yet due

1,320,757

1,124,436

1,050,313

950,106

29,549

6,720

217,034

6,720

1,350,306

1,131,156

1,267,347

956,826

623,077,635

227,394,670

618,089,596

225,433,702

33,892,487

29,107,621

32,087,745

25,060,566

2,392,629

1,189,429

874,402

1,189,429

6 - 12 months

125,341

103,410

125,341

103,410

Over 12 months

749,680

962,309

749,680

962,310

660,237,772

258,757,439

651,926,764

252,749,417

Past due Up to 3 months Total trade receivables - related parties, net Trade receivables - unrelated parties Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months

Total Less: Allowance for doubtful accounts

(750,000)

(1,000,000)

(750,000)

(1,000,000)

Total trade receivable - unrelated parties, net

659,487,772

257,757,439

651,176,764

251,749,417

660,838,078

258,888,595

652,444,111

252,706,243

49,042

617,895

1,094,333

463,780

Other receivables - unrelated parties

14,300,209

11,769,784

10,207,352

7,916,139

Total other receivables

14,349,251

12,387,679

11,301,685

8,379,919

675,187,329

271,276,274

663,745,796

261,086,162

Total trade receivable - net Other receivables Other receivables - related parties

Trade and other receivables - net

104

Inventories (Unit: Baht) Consolidated financial statements Reduce cost to net Cost

realisable value

2015

2014

2015

Finished goods

72,946,209

51,871,701

Raw materials

146,255,331

104,040,253

Work in process Store supplies Total

Inventories - net

2014

(450,000) -

2015

2014

(1,550,000)

72,496,209

50,321,701

(1,400,000)

146,255,331

102,640,253

1,153,266

1,894,358

1,153,266

1,894,358

20,578,917

17,994,221

(431,000)

(4,131,000)

20,147,917

13,863,221

240,933,723

175,800,533

(881,000)

(7,081,000)

240,052,723

168,719,533 (Unit: Baht)

Separate financial statements Reduce cost to net Cost

realisable value

2014

2013

Finished goods

70,073,303

46,094,740

Raw materials

65,200,565

96,330,085

Store supplies

13,171,448

12,253,060

148,445,316

154,677,885

Total

2014

Inventories - net

2013

(450,000)

(1,550,000) -

2014

2013

69,623,303

44,544,740

65,200,565

96,330,085

(4,000,000)

13,171,448

8,253,060

(5,550,000)

147,995,316

149,127,885

During the current year, the Company reversed the write-down of cost of inventories by Baht 6.2 million (The Company Only: Baht 5.1 million), and reduced the amount of inventories recognised as expenses during the year. The Company has pledged inventories of approximately Baht 215 million (2014: Baht 141 million) to secure short-term loans from a bank, as discussed in Note 16. 10.

Investments in subsidiaries

10.1 Details of investments in subsidiaries as presented in separate financial statements is as follows: (Unit: Baht) Shareholding Companyâ&#x20AC;&#x2122;s name

PRG Granary Co., Ltd.

Paid up capital

Dividend received

percentage

Cost

2015

2014

2015

2014

Thousand

Baht

500,000

250,000

99.99

during the years

2015

2014

2015

2014

489,636,680

239,636,680

MBK Food and Entertainment Co., Ltd.

50,000

75.00

84,751,452

MBK Food Island Co., Ltd.

500,000

99.99

498,685,435

MBK Food System Co., Ltd.

109,091

100,000

55.00

60.00

60,000,000

1,133,073,567

883,073,567

105

PRG Granary Company Limited On 3 September 2015, the Extraordinary General Meeting of the shareholders of PRG Granary Company Limited, a subsidiary, passed a resolution granting approval for the company to increase its registered capital from Baht 250 million to Baht 500 million, through the issuance of 4,000,000 new ordinary shares with a par value of Baht 62.50 each, total amounting to Baht 250 million, and all share allocation to the Company. The Company paid in the called-up share subscription on 25 September 2015. The share capital increase of this subsidiary was registered with the Ministry of Commerce on 30 September 2015. MBK Restaurant Group Company Limited (Formerly known as â&#x20AC;&#x153;MBK Suki Number One Company Limitedâ&#x20AC;?) On 2 October 2014, the meeting of the Board of the Directors of MBK Food and Entertainment Company Limited passed a resolution to approve the purchase of ordinary shares of MBK Restaurant Group Company Limited from MBK Public Company Limited total 100,000 ordinary shares at 86.95 Baht per share, or for a total of Baht 8.69 million. Estimates of fair values of the assets acquired and the liabilities assumed on the acquisition date of MBK Restaurant Group Company Limited are presented below. (Unit: Baht) Cash and cash equivalents

8,106,261

Trade and other receivables

526,339

Other current assets

184,092

Other non-current assets

4,000

Total assets

8,820,692

Trade and other payables

126,027

Total liabilities

126,027

Net assets value

8,694,665

Cost of business combination

8,694,665

Less: Net assets value

(8,694,665) -

Goodwill Reconciliation of net cash Cash paid for acquisition of the subsidiary

8,694,665

Less: Cash and cash equivalents of the subsidiary

8,106,261

Net cash paid for acquisition of the subsidiary

588,404

106

The Company undertook to measure the fair value of identified assets and liabilities acquired as at the acquisition date and completed this measurement in September 2015, which was within the measurement period of 12 months from the acquisition date stipulated in TFRS 3 (revised 2014). The fair values of these assets and liabilities were not different from the estimated fair values that were recorded at the acquisition date. Revenues and losses of MBK Restaurant Group Company Limited for the period from the acquisition date (13 October 2014) to 31 December 2014, which was included in consolidated statements of comprehensive income total amounting to Baht 4.08 million and Baht 0.04 million, respectively. On 16 October 2015, the Extraordinary General Meeting of the shareholders of MBK Restaurant Group Company Limited, a subsidiary of MBK Food and Entertainment Company Limited, which is a subsidiary of the Company, passed a resolution granting approval for the subsidiary to increase its registered capital from Baht 10 million to Baht 50 million, through the issuance of 400,000 new shares with a par value of Baht 100 each, total amounting to Baht 40 million, and all share allocation to MBK Food and Entertainment Company Limited. MBK Food and Entertainment Company Limited paid in the partial called-up share subscription of Baht 20 million on 16 October 2015. The share capital increase of this subsidiary was registered with the Ministry of Commerce on 20 October 2015. MBK Food System Company Limited On 21 December 2015, the meeting of the Board of the Directors of MBK Food System Company Limited, a subsidiary, passed a resolution granting approval for the subsidiary to increase its registered capital from Baht 100,000,000 to Baht 109,091,000, through the issuance of 90,910 new ordinary shares with a par value of Baht 100 each, total amounting to Baht 9,091,000, and all share allocation to unrelated company. The Groupâ&#x20AC;&#x2122;s equity interest in this subsidiary fell from 60% to 55%, however, the Group still has control over this company. Goodwill (Unit: Baht) Consolidated financial statements 2015 Innofood (Thailand) Co., Ltd.

2014

240,097

MBK Food and Entertainment Co., Ltd.

53,181,171

Goodwill

53,421,268

107

10.2 Details of investments in subsidiaries that have material non-controlling interests (Unit: Million Baht) Proportion of equity

Companyâ&#x20AC;&#x2122;s name

Profit/loss allocated to

Dividend paid to

interest held by

Accumulated balance of

non-controlling interests

during the years

2015

2014

(%)

50.01

2015

2014

2015

2014

2015

2014

50.01

18.75

19.58

(0.83)

(6.27)

25.00

15.69

17.10

0.63

2.04

45.00

40.00

27.46

29.80

(11.43)

(9.75)

Sima Pac Company Limited MBK Food and Entertainment Company Limited MBK Food System Company Limited

10.3 Summarised financial information that based on amounts before inter-company elimination about subsidiaries that have material non-controlling Summarised information about financial position (Unit: Million Baht) MBK Food and Sima Pac

Entertainment

MBK Food System

Company Limited

2015

2014

2015

2014

2015

2014

Current assets

19.32

22.33

10.45

66.84

17.72

33.41

Non-current assets

25.13

30.71

77.91

18.95

40.41

49.95

Current liabilities

6.11

12.08

23.90

13.72

3.09

8.87

Non-current liabilities

0.85

1.80

1.69

3.68

Summarised information about comprehensive income (Unit: Million Baht) For the years ended 31 December MBK Food and Sima Pac

Entertainment

MBK Food System

Company Limited

2015

2014

2015

2014

2015

2014

Revenue

66.04

58.42

136.83

140.05

31.50

23.80

Profit (loss)

(1.66)

(12.54)

2.52

8.14

(28.58)

(24.39)

Other comprehensive income

(8.15)

(5.63)

8.14

Total comprehensive income

(1.66)

(12.54)

(28.58)

108

(24.39)

Summarised information about cash flow (Unit: Million Baht) For the years ended 31 December MBK Food and Sima Pac

Entertainment

MBK Food System

Company Limited

2015

2014

2015

2014

2015

Cash flow from operating activities

7.99

5.07

1.45

3.8

(15.01)

(24.68)

(0.16)

0.24

(33.68)

(42.70)

4.63

(64.12)

(6.42)

(6.73)

10.36

9.09

39.99

1.41

(1.42)

(21.87)

(1.29)

(48.81)

Cash flow from investing activities Cash flow from financing activities

Net increase (decrease) in cash and cash equivalents

11.

(38.90)

Investment in parent company - available-for-sale securities (Unit: Baht) Consolidated financial statements Dividend received Shareholding percentage Nature of business

MBK Public Company Limited

Property rental and

2015

2014

26.47

Investments

during the years

2015

2014

955,416,356

6,084,002,017

6,333,626,782

7,039,418,373

7,289,043,138

2015

2014

299,549,718

development Add: Unrealised gain on change in value of investment

(Unit: Baht) Separate financial statements Dividend received Shareholding percentage Nature of business

MBK Public Company Limited

Property rental and

2015

2014

25.14

Investments

during the years

2015

2014

907,573,606

5,779,344,767

6,016,469,532

6,686,918,373

6,924,043,138

2015

2014

284,549,718

development Add: Unrealised gain on change in value of investment

109

The investment in parent company is long-term investment in marketable equity securities which classified as available-for-sale securities. Although the Company invests more than 20% of common shares of the parent company and has certain common directors, such investment is not classified as investment in associate because the Company has no significant influence in participating in the financial and operating policy decisions of the parent company. As at 31 December 2015, the Company has pledged its investment in the listed securities of parent company and entered into a negative pledge agreement on such listed securities totalling 318 million shares, with value at end of reporting period amounting to Baht 4,484 million (2014: 348 million shares, Baht 5,081 million) to secure bank overdraft and short-term loan facilities from banks, as discussed in Note 16. 12.

Long-term investment - available-for-sale securities Long-term investment - available-for-sale securities as at 31 December 2015 comprise the following: (Unit: Thousand Baht) Consolidated financial statements 2015 Available-for-sale securities Equity securities

44,133 (10,185)

Less: Unrealised loss on changes in value of investment

33,948

Long-term investment - available-for-sale securities

13.

Investment properties The net book value of investment properties as at 31 December 2015 and 2014 is presented below. (Unit: Baht) Consolidated financial statements

Separate financial statements

Building Land

for rent

Building Total

Land

for rent

Total

As at 31 December 2015: Cost Less: Accumulated depreciation Net book value

33,198,631 -

77,390,152

110,588,783

29,525,466

1,181,521

30,706,987

(70,699,420)

1,181,520

33,198,631

6,690,732

39,889,363

29,525,466

29,525,467

33,198,631

77,390,152

110,588,783

29,525,466

5,319,476

34,844,942

(69,868,883)

7,521,269

40,719,900

As at 31 December 2014: Cost Less: Accumulated depreciation Net book value

33,198,631

29,525,466

110

(4,079,222)

1,240,254

30,765,720

A reconciliation of the net book value of investment properties for the years ended 31 December 2015 and 2014 is presented below. (Unit: Baht) Consolidated financial statements 2015 Net book value at beginning of year

2014

Separate financial statements 2015

2014

40,719,900

41,773,787

30,765,720

30,972,618

Acquisition of Building for rent

641,255

Reclassification

Disposal - net book value

Depreciation charged Net book value at end of year

(830,537) 39,889,363

(1,085,505) (1) (1,695,141) 40,719,900

(154,748) 29,525,467

(206,898) 30,765,720

The fair value of the investment properties as at 31 December 2015 and 2014 is presented below. (Unit: Baht) Consolidated financial statements

Land Building for rent Total

Separate financial statements

2015

2014

2015

2014

315,731,000

43,393,102

45,032,350

3,119,953

360,763,350

43,393,102

46,513,055

The fair value of the above investment properties have been determined based on appraisal value performed by an independent appraiser. The fair value of the land has been determined using market approach amounting to Baht 316 million in the consolidated financial statements (Separate financial statement: Baht 43 million). The fair value of the building for rent has been determined using cost approach amounting to Baht 45 million in the consolidated financial statements.

111

14.

Property, plant and equipment (Unit: Baht)

Consolidated financial statements Furniture Machinery Land and land

fixtures, office

and factory

equipment and

Asset under

improvement

Buildings

equipment

motor vehicles

installation

Total

Cost: 1 January 2015

107,370,836

236,439,824

303,870,206

120,687,565

7,606,933

Additions

74,900

20,175,498

12,009,361

12,513,684

Disposals / write-off

(5,160,175)

(5,840,337)

775,975,364 44,773,443 (11,000,512)

19,389,973

170,028

107,370,836

236,514,724

338,275,502

127,026,617

560,616

809,748,295

1 January 2015

168,934,239

178,588,303

102,129,747

449,652,289

Depreciation for the year

11,171,141

27,482,305

6,689,080

45,342,526

Depreciation on disposals

(1,486,515)

(5,517,653)

31 December 2015

180,105,380

204,584,093

103,301,174

487,990,647

1 January 2015

800,000

31 December 2015

800,000

107,370,836

56,409,344

132,891,409

23,725,443

560,616

320,957,648

Transfer in/(transfer out) 31 December 2015

(19,560,001)

Accumulated depreciation:

(7,004,168)

Allowance for impairment loss:

Net book value: 31 December 2015 Depreciation for the year 45,342,526

2015 (Baht 31 million included in manufacturing cost, and Baht 14 million included in selling and administrative expenses)

(Unit: Baht)

Consolidated financial statements Furniture Machinery Land and land

fixtures, office

and factory

equipment and

Asset under

improvement

Buildings

equipment

motor vehicles

installation

107,278,388

236,217,974

259,136,448

116,131,543

3,363,100

722,127,453

92,448

45,500

16,980,179

3,951,006

41,546,168

62,615,301

(5,518,376)

(3,249,014)

Total

Cost: 1 January 2014 Additions Disposals / write-off Transfer in / (transfer out)

(8,767,390)

176,350

33,271,955

3,854,030

107,370,836

236,439,824

303,870,206

120,687,565

7,606,933

775,975,364

1 January 2014

157,703,962

167,202,601

100,082,530

424,989,093

Depreciation for the year

11,230,277

16,903,329

4,956,641

33,090,247

(2,909,424)

31 December 2014

(37,302,335)

Accumulated depreciation:

Depreciation on disposals

31 December 2014

168,934,239

(5,517,627) 178,588,303

102,129,747

(8,427,051) 449,652,289

Allowance for impairment loss: 1 January 2014

Increase during the year

800,000

31 December 2014

800,000

107,370,836

67,505,585

124,481,903

18,557,818

7,606,933

325,523,075

Net book value: 31 December 2014 Depreciation for the year 2014 (Baht 27 million included in manufacturing cost, and Baht 6 million included in selling and administrative expenses)

112

33,090,247

(Unit: Baht) Separate financial statements Furniture Machinery Land and land improvement

fixtures, office

and factory

equipment and

Asset under

Buildings

equipment

motor vehicles

installation

Total

Cost: 1 January 2015

77,885,370

129,012,865

100,936,000

52,041,432

406,214

360,281,881

Reclassification

4,137,955

Additions

74,900

95,524

2,674,832

30,417

2,875,673

Disposals

(168,279)

(5,867,446)

Transfer in / (transfer out) 31 December 2015

(5,699,167)

30,000

77,885,370

133,225,720

100,893,245

49,017,097

(30,000)

406,631

361,428,063

173,563,612

Accumulated depreciation: 1 January 2015

76,651,883

52,211,360

44,700,369

Reclassification

3,052,450

Depreciation for the year

6,369,398

8,382,914

2,872,847

17,625,159

Depreciation on disposals

(5,393,338)

(2,506,169)

31 December 2015

86,073,731

60,428,993

42,179,878

188,682,602

1 January 2015

800,000

31 December 2015

800,000

77,885,370

47,151,989

39,664,252

6,837,219

406,631

171,945,461

(165,281)

Net book value:

Net book value: 31 December 2015 Depreciation for the year 2015 (Baht 11 million included in manufacturing cost, and Baht 6 million included in selling and administrative expenses)

17,625,159 (Unit: Baht)

Separate financial statements Furniture Machinery Land and land improvement

fixtures, office

and factory

equipment and

Asset under

Buildings

equipment

motor vehicles

installation

Total

Cost: 1 January 2014

77,792,921

128,967,365

101,454,169

52,321,727

406,214

Additions

92,449

45,500

298,506

802,641

1,239,096

Disposals

(816,675)

(1,899,611)

77,885,370

129,012,865

100,936,000

52,041,432

406,214

360,281,881

31 December 2014

(1,082,936)

360,942,396

Accumulated depreciation: 1 January 2014

70,314,569

44,502,762

43,008,744

157,826,075

Depreciation for the year

6,337,314

8,524,620

2,768,107

17,630,041

Depreciation on disposals

(816,022)

(1,076,482)

(1,892,504)

31 December 2014

76,651,883

52,211,360

44,700,369

173,563,612

Net book value: 1 January 2014

Increase during the year

800,000

31 December 2014

800,000

77,885,370

52,360,982

47,924,640

7,341,063

406,214

185,918,269

Net book value: 31 December 2014 Depreciation for the year 2014 (Baht 12 million included in manufacturing cost, and Baht 5 million included in selling and administrative expenses)

113

17,630,041

As at 31 December 2015, certain items of building, machinery and equipment of the Company and its subsidiaries were fully depreciated but are still in use. The gross carrying amounts before deducting accumulated depreciation of those assets amounted to approximately Baht 289 million, (2014: Baht 222 million) (Separate financial statements: Baht 61 million (2014: Baht 63 million)). 15.

Intangible asset - Computer software Details of intangible assets which are computer software are as follows: (Unit: Baht) Consolidated financial statements

Separate financial statements

2015

2014

2015

2014

Cost

14,619,677

12,901,450

11,183,083

10,841,732

Less: Accumulated amortisation

(8,143,044)

(6,602,675)

(6,839,233)

(5,741,956)

6,476,633

6,298,775

4,343,850

5,099,776

1,540,369

1,182,667

1,097,277

1,058,528

Net book value Amortisation expenses included in the profit or loss for the year

A reconciliation of the net book value of intangible assets for the years 2015 and 2014 is presented below. (Unit: Baht) Consolidated financial statements 2015 Net book value at beginning of year Acquisition of subsidiaries Acquisition of computer software Amortisation Net book value at end of year

2014

Separate financial statements 2015

2014

6,298,775

6,305,564

5,099,776

5,773,104

172,379

1,718,227

1,003,499

341,351

385,200

(1,540,369)

(1,182,667)

(1,097,277)

(1,058,528)

6,476,633

6,298,775

4,343,850

5,099,776

114

16.

Bank overdrafts and short-term loans from banks (Unit: Baht)

Interest rate 2015

2014

(% per

annum)

7.4

7.425

2 - 2.06

2.39 - 2.40

Bank overdrafts Short-term loans from banks Total

Consolidated

Separate

financial statements

2015

2014

2015

2014

121,509

76,251

121,509

76,251

993,000,000

513,000,000

993,000,000

513,000,000

993,121,509

513,076,251

993,121,509

513,076,251

Bank overdrafts and short-term loan facilities from banks are secured by the pledge of inventories and listed securities as discussed in Notes 9 and 11. 17.

Trade and other payables (Unit: Baht) Consolidated financial statements 2015 Trade payables - related parties Trade payables - unrelated parties Other payables - related parties Accrued expenses Total trade and other payables

18.

Separate financial statements

2014

2015

2014

97,795

168,152

68,340,425

12,879,194

160,541,573

60,699,746

111,782,926

25,347,211

2,277,596

6,533,867

5,727,103

2,841,168

68,091,112

35,755,062

56,011,973

22,061,876

231,008,076

103,156,827

241,862,427

63,129,449

Long-term liabilities under financial lease agreement (Unit: Thousand Baht) Consolidated/Separate financial statements 31 December 2015 Liabilities under finance lease agreement

1,031,160

Less: Deferred interest expenses

(39,285)

Total

991,875

Less: Current portion

(297,563)

Liabilities under finance lease agreements - net of current portion

694,312

The Company has entered into the finance lease agreement with leasing company for rental of motor vehicles for use in its operations, whereby they are committed to pay rental on a monthly basis. The terms of the agreements are generally 4 years.

115

Future minimum lease payments required under finance lease agreement were as follows: (Unit: Thousand Baht) As at 31 December 2015 Less than 1 year

1 - 4 years

Total

Future minimum lease payments

309,348

721,810

1,031,158

Less: Deferred interest expenses

(11,785)

(27,498)

(39,285)

297,563

694,312

991,875

Present value of future minimum lease payments

19.

Provision for long-term employee benefits Provision for long-term employee benefits, which is compensations on employeesâ&#x20AC;&#x2122; retirement, was as follows: (Unit: Baht)

Balance at beginning of year

Consolidated financial

Separate financial

statements

2015

2014

2015

2014

19,284,819

19,171,216

15,312,712

15,490,552

1,676,059

1,408,659

1,203,586

1,210,474

797,127

737,141

630,997

589,915

Current service cost Interest cost Gain on curtailments

(565,707)

(511,739)

Included in other comprehensive income: Actuarial gain arising from Demographic assumptions changes Financial assumptions changes Experience adjustments Benefits paid during the year

(3,527,142)

1,311,831

(4,756,399)

Balance at end of year

14,786,295

(2,721,029)

961,565

(3,041,265)

(1,466,490)

(3,840,000)

(1,466,490)

19,284,819

8,506,566

15,312,712

Long-term employee benefit expenses included in the profit or loss was as follows: (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2015

2014

2015

2014

Cost of sales

558,436

388,696

397,970

263,183

Selling expenses

124,663

82,422

124,663

82,422

1,662,889

1,233,449

1,311,950

943,045

2,345,988

1,704,567

1,834,583

1,288,650

Administrative expenses

116

The Company and its subsidiaries will not expect to pay any of long-term employee benefits during the next year (2014: Baht 1.5 million). As at 31 December 2015, the weighted average duration of the liabilities for long-term employee benefit is 13 years (2014: 17 years). Significant actuarial assumptions are summarised below: (Unit: percent per annum) Consolidated

Separate

financial statements

2015

2014

2015

2014

2.8

4.0

2.8

4.0

Salary increase rate

4.0 - 7.0

Turnover rate

0 - 40.0

0 - 10.0

0 - 40.0

0 - 10.0

Discount rate

The result of sensitivity analysis for significant assumptions that affect the present value of the long-term employee benefit obligation as at 31 December 2015 are summarised below: (Unit: Million Baht) Consolidated financial statements Amount increase Increase

(decrease)

(percent per annum)

Amount increase Increase

(decrease)

(percent per annum)

Discount rate

1.0

(1.2)

1.0

1.4

Salary increase rate

1.0

1.3

1.0

(1.2)

20.0

(1.3)

20.0

1.7

Turnover rate

(Unit: Million Baht) Separate financial statements Amount increase Increase

(decrease)

(percent per annum)

Amount increase Increase

(decrease)

(percent per annum)

Discount rate

1.0

(1.0)

1.0

Salary increase rate

1.0

(1.0)

20.0

(1.0)

20.0

1.2

Turnover rate

117

20.

Income tax Some subsidiaries are not liable for corporate income tax for the years ended 31 December 2015 and 2014 because the subsidiaries have tax loss brought forward from previous years. Income tax expenses for the years ended 31 December 2015 and 2014 are made up as follows: (Unit: Baht) Consolidated financial statements

Separate financial statements

2015

2014

2015

9,799,590

2,074,854

8,954,143

2014

Current income tax: Current income tax charge

488,831

Adjustment in respect of income tax of previous year

(156,065)

Deferred tax: Relating to origination and reversal of temporary differences

(469,197)

(4,943)

401,083

(35,569)

Income tax expense reported in the statement of comprehensive income

9,174,328

2,069,911

9,199,161

453,262

The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2015 and 2014 are as follows: (Unit: Baht) Consolidated financial statements 2015

2014

Separate financial statements 2015

2014

Deferred tax on gains (losses) from the changes in values of available-for-sale investments Deferred tax on actuarial gain

(51,961,953)

59,909,943

1,394,342

50,567,611

59,909,943

(47,424,953)

56,909,943

960,146

(46,464,807)

56,909,943

Reconciliations between accounting profit and income tax expenses is shown below. (Unit: Baht) Consolidated financial statements

Accounting profit before tax Applicable tax rate

Separate financial statements

2015

2014

2015

2014

322,236,434

316,307,682

317,108,554

335,265,577

20%

Accounting profit before tax multiplied by applicable tax rate

64,447,287

63,261,536

63,421,711

67,053,115

Adjustment in respect of income tax of previous year

(156,095)

Tax effect of non-deductible expenses and income not subject to tax

(55,116,894)

(61,191,625)

(54,066,485)

9,174,328

2,069,911

9,199,161

(66,599,853)

Income tax expenses reported in the statement of comprehensive income

118

453,262

The components of deferred tax assets and deferred tax liabilities are as follows: (Unit: Baht) Consolidated financial statements 2015

2014

Separate financial statements 2015

2014

Deferred tax assets Provision for long-term employee benefits

3,078,110

3,829,300

1,701,313

3,062,542

1,198,581,953

1,250,543,906

1,155,868,954

1,203,293,906

Deferred tax liabilities Unrealised gain from available-for-sale investments

As at 31 December 2015, subsidiaries have unused tax losses of Baht 114 million (2014: Baht 102 million). The subsidiaries do not recognised these tax losses as deferred tax asset because the subsidiaries consider that it is not probable that taxable profit will be available against which the unused tax losses can be utilised before expiry date. The unused tax losses amounting to Baht 21 million will be expired by 2017. 21.

Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. At present the statutory reserve has fully been set aside.

22.

Expenses by nature Significant expenses by nature are as follows: (Unit: Baht) Consolidated financial statements

Salary and wages and other employee benefits Severance payment Depreciation and amortisation expenses Transportation expenses Commission and sales promotion expenses Repair and maintenance expenses

Separate financial statements

2015

2014

2015

2014

135,230,408

118,026,693

66,356,379

70,438,777

963,310

1,979,666

963,310

1,338,410

47,713,432

35,968,055

18,877,185

18,895,467

161,183,340

65,546,303

155,844,959

65,454,979

63,137,774

67,299,635

58,999,122

61,839,524

7,489,745

6,825,737

1,416,757

3,443,857

Electricity expenses

33,782,680

31,821,754

2,069,763

10,207,569

Rental expenses

72,361,186

29,218,431

4,122,831

8,747,547

1,803,871,918

1,301,876,034

1,781,905,216

1,252,196,491

10,193,270

7,049,654

7,235,253

(8,184,415)

Raw materials and consumables used Changes in inventories of finished goods and work in progress (increase)

119

23.

Basic earnings per share Basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year.

24.

Segment information Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance. The chief operating decision maker has been identified as Managing Director. For management purposes, the Company and its subsidiaries are organised into business units based on its products and services and have three reportable segments: (1) improving the quality and packaging of milled rice and (2) manufacturing and distribution of plastic bag (3) food center. No operating segments have been aggregated to form the above reportable operating segments. The chief operating decision maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. Segment performance is measured based on operating profit or loss and total assets and on a basis consistent with that used to measure operating profit or loss and total assets in the financial statements. The basis of accounting for any transactions between reportable segments is consistent with that for third party transactions.

120

The following tables present revenue and profit information regarding the Company and its subsidiariesâ&#x20AC;&#x2122; operating segments for the years ended

December 2015 and 2014, respectively. (Unit: Baht) Manufacturing and

Revenue from external customers Inter-segment revenue

Improving the quality

distribution of

And packaging of milled rice

plastic bag

Food center

2015

2014

2,139,231,850

1,604,342,529

43,847,167

43,612,084

2015

2014

2015

2014

366,301,975

Elimination of inter-

Consolidated

segment revenues

financial statements

2015

2014

297,264,520

2015

2014

2,549,380,992

1,945,219,133

103,491

15,820

21,869,901

14,217,127

(21,973,392)

(14,232,947)

Interest revenue

2,103,026

15,011,810

28,817

38,973

3,503,217

3,131,117

(5,189,616)

(16,707,621)

445,444

1,474,279

Interest expense

(19,893,701)

(14,930,223)

(441,356)

(776,774)

(290,984)

(14,508,474)

5,189,616

16,707,621

(15,436,425)

(13,507,850)

Depreciation and amortisation

(23,995,353)

(24,930,609)

(5,558,165)

(5,958,650)

(18,159,915)

(5,078,796)

(47,713,433)

(35,968,055)

Income tax expense or income

(8,398,948)

(423,440)

60,098

44,703

(835,478)

(1,691,174)

(9,174,328)

(2,069,911)

Segment profit (loss)

36,930,482

(2,660,800)

(12,541,340)

(22,019,347)

(23,226,837)

(122,549)

269,944

12,127,786

14,646,270

Dividend income

300,954,516

299,591,501

Profit for the year

313,082,302

314,237,771

50,144,503

Unallocated income:

121

The following table presents segment assets of the Company and its subsidiariesâ&#x20AC;&#x2122; operating segments as at 31 December 2015 and 2014: (Unit: Baht)

Property, plant and equipment Prepaid rental fee

Improving the quality

Manufacturing and distribution

and packaging of milled rice

of plastic bag

Consolidated financial Food center

statements

Elimination of inter-segment

2015

2014

2015

2014

2015

209,767,359

228,143,997

24,962,036

30,346,256

86,228,253

67,032,822

320,957,648

325,523,075

388,985,594

237,932,923

388,985,594

237,932,923

2014

2015

2014

2015

2014

Unallocated assets

- Investment in parent company â&#x20AC;&#x201C; available-for-sale security

7,039,418,373 7,289,043,138 1,114,811,236

- Other assets

667,925,026

8,894,172,851 8,520,424,162

Total assets

Transfer prices between business segments are as presented in Note 6 to the financial statements. .

122

Geographic information Revenue from external customers is based on locations of the customers. (Unit: Baht) 2015

2014

2,334,322,564

1,642,950,383

108,850,596

88,657,844

Europe

75,587,075

87,180,638

Asia Pacific

38,136,837

126,430,268

2,556,897,072

1,945,219,133

Revenue from external customers Thailand United States/Canada

Total Major customers

For the year 2015, the Company and its subsidiaries have revenue from three major customers in amount of Baht 1,195 million, arising from processing and packaging of rice segment (2014: Baht 413 million).

25.

Provident fund The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Under the fund rules, the Company, its subsidiaries and their employees must contribute 5 percent of basic salary. The fund, which is managed by Thanachart Asset Management Company Limited, will be paid to employees upon termination in accordance with the fund rules. During the year ended 31 December 2015, the Company and its subsidiaries contributed Baht 3 million (2014: Baht 2 million) (Separate financial statements: Baht 2 million (2014: Baht 2 million)) to the fund.

123

26.

Dividends (Unit: Million Baht) Dividend Approved by Final dividends on the year ended 31 December 2013

Total dividends

Annual General Meeting of the shareholders on 30 April 2014

Interim dividend on the six-month period ended 30 June 2014

(Baht per share)

135

2.25

150

0.25

Board of Director Meeting on 2 October 2014

285 Final dividends on the year ended 31 December 2014

Annual General Meeting of the shareholders on 9 April 2015

Interim dividend on the six-month period ended 30 June 2015

150

0.25

150

0.25

Board of Director Meeting on 28 September 2015

300

27.

Commitments and guarantees

27.1 Capital commitments As at 31 December 2015, four subsidiaries have capital commitments of Baht 25 million (2014: Baht 4 million), relating to the design and decoration of space and acquisition of computer system.

27.2 Operating lease commitments Two subsidiaries have entered into several lease agreements in respect of the lease of building space and equipment. The terms of the agreements are 3 and 20 years. As at 31 December 2015, future minimum lease payments required under these noncancellable operating leases contracts were as follows. (Unit: Million Baht) Payable: In up to 1 year

In over 1 and up to 5 years

101

In over 5 years

272

124

27.3 Long-term service commitment A subsidiary has entered into license and technical assistance agreement with an overseas related company for the use of a trademark, training and providing of information related to restaurant business operation. Under the conditions of the license agreement, the subsidiary is to pay royalty fee at the rate as stipulated in the agreement.

27.4 Guarantees As at 31 December 2015, there were outstanding bank guarantees of approximately Baht 53 million (2014: Baht 19 million) issued by the banks on behalf of the Company and its subsidiaries (Separate financial statements: Baht 52 million (2014: Baht 18 million)) in respect of utilities payments of the Company and its subsidiaries and purchase and sale agreements under The Paddy Pledging Schemes of 2014/2015.

28.

Fair value hierarchy As at 31 December 2015, the Company and its subsidiaries had the assets and liabilities that were measured at fair value using different levels of inputs as follows: (Unit: Million Baht) Consolidated Financial Statements Level 1

Level 2

Level 3

Total

7,073

361

993

Asset measured at fair value Available-for-sale investments Equity instruments Asset for which fair value is disclosed Investment property Liability for which fair value is disclosed Loans

125

(Unit: Million Baht) Separate Financial Statements Level 1

Level 2

Level 3

Total

6,687

Loans

Investment property

1,265

Asset measured at fair value Available-for-sale investments Equity instruments Assets for which fair value are disclosed

Liability for which fair value is disclosed Loans

29.

Financial instruments

29.1 Financial risk management The financial instruments of the Company and its subsidiaries, as defined under Thai Accounting Standard No.107 â&#x20AC;&#x153;Financial Instruments: Disclosure and Presentationsâ&#x20AC;?, principally comprise cash and cash equivalents, trade accounts receivable, loans, investments, trade accounts payable and short-term borrowing. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable and loans. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentrations of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables as stated in the statement of financial position.

126

Interest rate risk The Company and its subsidiariesâ&#x20AC;&#x2122; exposure to interest rate risk relates primarily to their cash at banks, bank overdrafts, and short-term loans from banks and related parties. Significant financial assets and liabilities as at 31 December 2015 and 2014 classified by type of interest rate are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or repricing date if this occurs before the maturity date. (Unit: Baht) Consolidated financial statements as at 31 December 2015 Fixed interest rates

Floating

within 1 year

interest rate

Total

Interest rate (percent per annum)

Financial assets Cash equivalents (excluding cash)

20,622,661

121,509

993,000,000

0.13 - 0.40

Financial liabilities Bank overdrafts Short-term loans from banks

7.40 2.00 - 2.06 (Unit: Baht)

Consolidated financial statements as at 31 December 2014 Fixed interest rates

Floating

within 1 year

interest rate

Total

Interest rate (percent per annum)

Financial assets Cash equivalents (excluding cash)

18,000,000

26,046,604

44,046,604

76,251

513,000,000

0.375 - 2.60

Financial liabilities Bank overdrafts Short-term loans from banks

127

7.425 2.39 - 2.40

(Unit: Baht) Separate financial statements as at 31 December 2015 Fixed interest rates

Floating

within 1 year

interest rate

Total

Interest rate (percent per annum)

Financial assets Cash equivalents (excluding cash)

6,875,054

0.13 - 0.40

121,509

993,000,000

2.00 - 2.06

271,620,000

2.05 - 6.53

Financial liabilities Bank overdrafts Short-term loans from banks Short-term loans from subsidiaries

7.40

(Unit: Baht) Separate financial statements as at 31 December 2014 Fixed interest rates

Floating

within 1 year

interest rate

Total

Interest rate (percent per annum)

Financial assets Cash equivalents (excluding cash)

4,318,906

0.375

76,251

7.425

513,000,000

2.39 - 2.40

302,120,000

2.41 - 6.75

Financial liabilities Bank overdrafts Short-term loans from banks Short-term loans from subsidiaries

Foreign currency risk The Companyâ&#x20AC;&#x2122;s exposure to foreign currency risk arise mainly from trading transactions that are denominated in foreign currencies. The Company seeks to reduce this risk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year.

128

The balances of financial assets denominated in foreign currencies as at 31 December 2015 and 2014 are summarised below. Foreign currency

Financial assets

US dollar

Exchange rate as at 31 December

2015

2014

(Unit)

488,036

2015

2014

(Baht per

1 foreign currency

unit)

1,058,546

35.8295

32.72

Forward exchange contracts outstanding are summarised below. As at 31 December 2015 Foreign

Sold

currency

amount

Contractual exchange rate

(Unit)

(Baht per 1 foreign currency unit)

12,667,523

34.1616 - 36.2984

US dollar

Maturity date

12 January 2016 - 15 June 2016

As at 31 December 2014 Foreign

Sold

currency

amount

Contractual exchange rate

(Unit)

(Baht per 1 foreign currency unit)

US dollar

3,572,354

32.4020 - 33.0947

Maturity date

18 March 2015 - 30 June 2015

29.2 Fair value of financial instruments Since the majority of the Company and its subsidiariesâ&#x20AC;&#x2122; financial instruments are shortterm in nature and loans bear interest at the rate approximately to market interest rates, their fair value is not expected to be materially different from the amounts presented in the statements of financial position.

30.

Promotional privileges Sima Pac Company Limited has received promotional privileges from the Board of Investment for the manufacturer of film plastics pursuant to the promotion certificate No. 1903(2)/2556 issued on 27 June 2013. Subject to certain imposed conditions, the privileges include an exemption from corporate income tax for a period of 8 years from the date the promoted operations commenced generating revenues (21 October 2013).

129

Operating revenues for the years ended 31 December 2015 and 2014 divided according to promoted and non-promoted operations are shown below. (Unit: Baht) Consolidated financial statements 2015

2014

Separate financial statements 2015

2014

Revenues from sales - promoted operations

30,641,897

27,111,044

2,518,739,095

1,918,108,089

2,174,517,662

1,604,976,135

2,549,380,992

1,945,219,133

2,174,517,662

1,604,976,135

Revenues from sales - non-promoted operations Total

31.

Capital management The primary objective of the Companyâ&#x20AC;&#x2122;s capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern. According to the statements of financial position as at 31 December 2015 and 2014, the Company and its subsidiariesâ&#x20AC;&#x2122; debt-to-equity ratio was 0.38:1 (2014: 0.29:1) and the Company's was 0.43:1 (2014: 0.33:1).

32.

Approval of financial statements These financial statements were authorised for issue by the Audit Committee of the Company on 18 February 2016.

130

21. Related transactions In the previous year there were related transactions between PRG and subsidiaries and related parties. PRG disclosed the transactions in the note to the financial statements for the year ended December 31, 2015 (No. 6). However the transactions with persons who may have a conflict of interest can be summarized as per the following.

Persons who may have conflicts Transactions with parent company MBK Public Company Limited (“MBK”)

Relationship

A major shareholder holding 74.52% of PRG PRG hold 25.14% of MBK PRG Granery Co., Ltd hold 1.33% of MBK

Transactions with related companies Subsidiaries of MBK Direct/indirect shareholding by MBK Paradise Park Company Limited 65.36% (indirect) Siam Delice Company Limited 65.36% (indirect) Glas Haus Building Company 99.99% (indirect) LimitedGlas Haus Ratchada Co., 99.99% (direct) Ltd. 99.97% (direct) MBK Smart Force Company Limited 99.98% (indirect) The nine center Company Limited 99.99% (direct) MBK Hotels and Tourism Company 100% (direct) Limited 99.99% (direct) Supsinnthanee Company Limited 72.60% (indirect) Riverdale Golf and Country Club Company 99.99% (direct) 72.60% (indirect) Limited MBK Resort Public Company 99.99% (direct) Limited 99.97% (direct) Ma Boonkhrong Sirichai Enterprise Co., 99.97% (direct) Ltd. Plan Estate Company Limited T leasing Company Limited MBK Training Center Company Limited MBK Service Solution Co., Ltd.

Year 2015 (million Baht

300

173

Contract price

Sales

Services expense

Market price or prices which approximated market prices Contract price

Transaction Type Sales Dividend income Prepaid rental fee payment Service expenses Acquisition of investment in a subsidiary (MBK-RG)

Necessity and Reasonableness Market price or prices which approximated market prices Declared rate

Policy on Related Transactions The Board of Directors and the Audit Committee consider and give opinions about related transactions or transactions possibly causing conflicts of interest between PRG and its subsidiaries by holding principles fo prudence, rationality, fairness, consideration of stakehoders’ involved interest, and disclosure of sufficient information to comply with rules and regulations of the Stock Exchange of Thailand (SET) and the Securities and exchange Commission (SEC). Policy on future related transactions Any transactions that may occur in the future, the Company shall comply with the laws regarding the Securities and Exchange Commission and rules and regulations, notifications, orders or requirements of the Capital Market Supervisory Board and the Stock Exchange of Thailand including to comply with requirements on the disclosure of related party transactions of the Company.

131

22. Management discussion and analysis Operation Results At the end of fiscal year 2015, the Patum Rice Mill and Granary Public Company Limited and its subsidiaries has a total revenues of 2,899.10 million baht and a net profit attribute to equity holders of the company of 325.31 million baht when compare to the fiscal year 2014 that has a total revenues of 2,297.88 million baht and a net profit attribute to equity holders of the company of 328.24 million baht the company has a higher total revenues by 601.22 million baht or 26.16% and a decrease in net profit by 2.93 million baht or 0.89%. The summary of consolidated operation results and management discussion and analysis are as follow. Summary of Consolidated Operation Results Unit : million baht Increase %Increase 2015 2014 (Decrease) (Decrease) Revenues from sales 2,549.38 1,945.22 604.16 31.06 Cost of goods sold 2,094.92 1,650.13 444.79 26.95 Selling expenses 345.04 212.13 132.91 62.65 Administrative Expenses 114.02 95.05 18.97 19.96 Finance cost 15.44 13.51 2.93 21.69 Profit attributable to equity holders 325.31 328.24 (2.93) (0.89) of the company Management Discussion and Analysis 1. Revenues from sales In 2015 revenues from sales is 2,549.38 million baht which is higher than revenues from sales in 2014 of 1,945.22 million baht by 604.16 million baht. Details are as follow.

Revenues from sales Rice Plastic Bag Food Centers and Restaurants

2015

2014

2,549.38 2,139.23 43.85 366.30

1,945.22 1,604.34 43.61 297.26

Unit : million baht Increase %Increase (Decrease) (Decrease) 604.16 31.06 534.89 33.34 0.24 0.55 69.04 23.23

Revenues from rice business increase by 543.89 million baht or 33.34% resulting from an increase in export by 36% from the year 2014 of 485 million baht to 1,149 million baht in 2015, which is mainly from the sale of rice to the Department of International Trade Promotion, Ministry of Commerce delivery to Philippines, China, and Indonesia. Meanwhile, the revenue from rice of other channels is slightly decline due to the high competition and buyers delay the purchase of stocks due to economic assessment. Revenues from plastic bags increase slightly due to the administrative improvement, which results in higher production efficiency and better performance in operation. Revenues from food centers and restaurants increase by 69.04 million baht or 23.23%, which results from the area expansion of MBK Food Island, the renovation of the Fifth to be more modern and inviting, the opening 2 new branches of Tsurumaru and Fujio, and the opening 2 new branches of Suki Yaki Number One.

132

2. Cost of goods sold In 2015 cost of goods sold has increased from 2014 by 444.79 million baht or 29.95% resulting from the high increase in sales in 2015. In contrary, when comparing to the percentage to sales, the cost of goods sold is decrease in proportion mainly from the decrease of rice price. In average, the cost per ton of Hom Mali Rice decreased from 28,439 baht last year to 26,640 baht this year or decreased by 1,799 baht and White Rice decreased from 13,349 baht last year to 12,139 baht this year or decreased by 1,210 baht. 3. Selling expenses Selling expenses of 2015 have increased by 132.91 million baht mainly from the increase in transportation cost by 91.74 million baht from the sale of rice to the Department of International Trade Promotion, Ministry of Commerce. The rest is from the Japanese restaurants which has opened two more branches and from the opening 2 more branches of a Sukiyaki restaurant. 4. Administrative expenses In 2015 administrative expenses have increased by 18.97 million baht. The increase is mainly from the opening new branch and the increase in salary and bonus to prepare for the business expansion. 5. Finance cost In 2015 the finance cost is 15.44 million baht whereas the finance cost of 2014 is 13.51 million baht. The increase in finance cost 2.93 million baht is from the increase in the average bank loans from 494 million baht in 2014 to 745 million baht in 2015. The increase in bank loan is for the stocking of Hom Mali Rice due to the higher sales. The increase in bank loan is also for the increase in the investment in subsidiary companies for the renovation and expansion the area of food centers and opening new more branches of restaurant.

133

23. Remuneration for auditor Audit Fee The Company and its subsidiaries paid the audit fee to • The Company’s auditor (Ms. Ratana Jara or Ms Nonglak Pumpnoi or Ms. Ratchada Yongsawatwanich in the previous year, with the total amount of -0- Baht • An audit office where an auditor works for (EY Office Limited), individuals or business relating to an auditor and an audit office where an auditor works for, in the previous accounting year, with a total amount of 1,697,000 Baht as follows: • Patum Rice Mill and Granary PCL. 927,000 Baht • Subsidiaries 770,000 Baht Non-audit Fee - No -

134

24. Profile of Directors, Executive Management, Controlling Persons and Company Secretary Directors 1. Mr. Suphadej Poonpipat Chairman of the Board of Directors and Chairman of the Executive Committee Age: 65 years Date appointed as director: October 25, 2011 Tenure as director: 4 years Education: - Master of Science, University of Wisconsin, USA - Bachelor of Business Administration and Accounting, Chulalongkorn University Director training: Thai Institute of Directors Association (IOD) - Certificate, Director Accreditation Program (DAP), Class 8/2004 - Certificate, Role of the Compensation Committee (RCC), Class 15/2012 - Certificate, Role of Chairman Program (RCP), Class 28/2012 - Certificate, Financial Institution Governance Program (FGP), Class 4/2012 Experience: Listed Companies (Current: 4 Companies) Sep.12-Present Chairman of the Board of Directors and Chairman of the Executive Committee, Patum Rice Mill and Granary Public Company Limited 2011â&#x20AC;&#x201C;Sep. 12 Vice Chairman of the Board of Directors, Patum Rice Mill and Granary Public Company Limited 2010 - Present Chief Executive Officer, Thanachart Capital Public Company Limited 2007 - Present Vice Chairman of the Board of Directors and Chairman of the Executive Committee, Thanachart Capital Public Company Limited 2002 - Present Member of the Compensation and Nomination Committee, MBK Public Company Limited 2006 - Present Vice Chairman of the Board of Directors, MBK Public Company Limited 2003 - Present Vice Chairman of the Executive Committee, MBK Public Company Limited 2007 - Present Director, Royal Orchid Hotel (Thailand) Public Company Limited Other Non-Listed Companies/Entities (Current: 9 Companies) 2014 - Present Director, Siam City Life Assurance Public Company Limited Sep.12-Present Vice Chairman of the Board of Directors, Thanachart Insurance Public Company Limited 2005 - Present Director and Vice Chairman of the Executive Committee Thanachart Insurance Public Company Limited 2005 - Present Vice Chairman of the Board of Directors and Chairman of the Executive Committee, Thanachart Bank Public Company Limited 2011 - Present Director, DMS Property Investment Private Limited 2007 - Present Director, Thai Royal Orchid Real Estate Company Limited 2006 - Present Director, Siam Piwat Holding Company Limited 2005 - Present Director, MBK Resort Public Company Limited 2003 - Present Director, Siam Piwat Company Limited 2003 - Present Director, Plan Estate Company Limited PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): -None-

135

2. Dr. Pornsiri Poonakasem Chairman of the Audit Committee and Independent Director Age: 64 years Date appointed as director: October 24, 2006 Tenure as director: 9 years Expertise: Accounting Type of director nominated: Independent Director Education: - Ph.D (Accounting), University of Florida-Gainesville, Florida, U.S.A. - M.A.S.(Accounting), University of Illinois-Urbana-Urbana-Champaign, Illinois, U.S.A. (Royal Thai Government scholarship) - Bachelor of Accountancy (Second Class Honor), Chulalongkorn University Director Training: Thai Institute of Directors Association (IOD) - Director Accreditation Program (DAP), 2008 - Director Certification Program (DCP), Class 132/2010 - Advanced Audit Committee Program (AACP), Class 17/2014 Experience: Listed Companies (Current: 1 Company) Oct.06-Present Chairman of the Audit Committee and Independent Director Patum Rice Mill and Granary Public Company Limited 1996 - 1998 Vice President, Finance, Loxley Public Company Limited 1994 - 1996 President, Accounting and Auditing, Sin Bualuang Public Company Limited Other Non-Listed Companies/Entities (Current: 5 Entities) 2015 - Present Member of the Audit Committee, National Science Technology and Innovation Policy Office 2014 - Present Member of the Accounting System Committee, Federation of Accounting Professions under the Royal Patronage of His Majesty the King 2014 - Present Member of the Audit Committee, Rajamangala University of Technology Tawan-ok 2010 - Present Member of the Accounting Testing Subcommittee, Federation of Accounting Professions under the Royal Patronage of His Majesty the King 2006 - Present Director, M.S. (Internal Auditing), University of the Thai Chamber of Commerce 2004 - 2006 Dean, Faculty of Accountancy, Dhurakij Pundit University 2003 - 2004 Vice President for Administration, Walailak University 2001 - 2003 Executives Director of Finance and Executives Director of Investment Center, National Science and Technology Development Agency (NSTDA) 1998 - 2001 Vice President for Administration, Rangsit University 1980 - 1994 Professor, Faculty of Commerce and Accountancy, Chulalongkorn University 1975 - 1980 State Audit Officer, Office of the Auditor General of Thailand PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship with management: -None-

136

3. Assoc. Prof. Dr. Sathit Parniangtong Chairman of the Compensation and Nomination Committee, Member of the Audit Committee and Independent Director Age: 62 years Date appointed as director: November 30, 2009 Tenure as director: 6 years Education: - PhD.: Operations Management and Finance University of Wisconsin, USA - Masters: Industrial and Systems Engineering University of Wisconsin, USA - Bachelors: Industrial and Manufacturing Engineering University of Wisconsin, USA - Certificate in Politics and Governance in Democratic Systems for Executives Course, King Prajadhipokâ&#x20AC;&#x2122;s Institute, 2004 Director Training: Thai Institute of Directors Association (IOD) - Director Certification Program (DCP), Class 128/2010 - Advanced Audit Committee Program (AACP), Class 13/2013 Experience: Listed Companies (Current: 2 Companies) 2009 - Present Chairman of the Compensation and Nomination Committee, Member of the Audit Committee and Independent Director Patum Rice Mill and Granary Public Company Limited 2013 - Present Chairman of the Compensation and Nomination Committee, Member of the Audit Committee and Independent Director PM Thoresen Asia Holdings Public Company Limited Other Non-Listed Companies/Entities (Current: 1 Entity) 2001 - Present Associate Professor, Part Time Faculty - Faculty of Commerce and Accountancy, Thammasat University - Sasin Graduate Institute of Business Administration of Chulalongkorn University 2002 - 2003 Director of Management Project-Collaboration with Michael E. Porter : Creating the Foundations for Higher Productivity of Thailand - Office of the National Economic and Social Development Board (NESDB) 1989 - 2000 Executives, Booz Allen & Hamilton, AT Kearney, Leading consulting firms located in Washington DC, USA. 1989 - 1997 Adjunct Professor, George Washington University, Washington DC, USA 1985 - 1989 Adjunct Professor, University of Texas, Austin, USA 1982 - 1989 Executives, Baxter- multinational consumer manufacturer, American Airlines-transportation firm, located in Illinois and Texas PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): -None-

137

4. Mr. Dej Bulsuk Independent Director Age: 65 years Date appointed as director: October 25, 2011 Tenure as director: 4 years Education: - Bachelor of Business Administration, Thammasat University Director training: Thai Institute of Directors Association (IOD) - Certificate, Director Accreditation Program (DAP), Class 23/2004 Experience: Listed Companies (Current: 4 Companies) 2011 - Present Independent Director, Patum Rice Mill and Granary Public Company Limited 2001 - Present Member of the Audit Committee and Independent Director, AEON Thana Sinsap (Thailand) Public Company Limited 2004 - Present Member of the Audit Committee and Independent Director, Siam Future Development Public Company Limited 2004 - Present Member of the Audit Committee and Independent Director, The Erawan Group Public Company Limited 2002 - Aug.15 Independent Director, GMM Grammy Public Company Limited 2006 - Aug.15 Member of the Nomination and Remuneration Committee, GMM Grammy Public Company Limited 2009 - Aug.15 Member of the Audit Committee, GMM Grammy Public Company Limited 2006 - Feb.09 Chairman of the Audit Committee, GMM Grammy Public Company Limited 2002 – 2006 Member of the Audit Committee, GMM Grammy Public Company Limited 2002 - Feb.09 Member of the Audit Committee and Independent Director, GMM Media Public Company Limited 2002 – 2013 Member of the Audit Committee and Independent Director, Jay Mart Public Company Limited 2006 - Jun.09 Advisor Director, President Bakery Public Company Limited Other Non-Listed Companies/Entities (Current: 1 Company) 2004 - Present Chairman of the Executive Board, CCC Business Development Co., Ltd. 2007 - 2009 Director/Chairman of the Good Governance, and Recruitment and Remuneration Committee, Thailand Convention and Exhibition BureauTCEB (Public Organization) 2004 - 2006 Honorary Chairman, McThai Co., Ltd. (McDonald’s Thailand) 1984 - 2004 President, McThai Co., Ltd. (McDonald’s Thailand) 2001 - 2006 Chairman, Ronald McDonald’s House Charities PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): -None-

138

5. Mr. Serm Henry Phenjati Member of the Compensation and Nomination Committee, Member of the Audit Committee and Independent Director Age: 57 years Date appointed as director: December 24, 2012 Tenure as director: 3 years Education: - Masters in Systems Management, University of Southern California - Bachelors of Civil Engineering/Building Design, University of Southern California Director Training: Thai Institute of Directors Association (IOD) - Certificate, Director Certification Program (DCP), Class 182/2013 Experience: Listed Companies (Current: 2 Companies) Dec.12-Present Member of the Compensation and Nomination Committee, Member of the Audit Committee and Independent Director Patum Rice Mill and Granary Public Company Limited May15-Present Independent Director, Royal Orchid Hotel (Thailand) PCL. 2006 - 2008 Director, Royal Orchid Holiday, Thai Airways International PCL. 2003 - 2006 Director, Marketing Communication, Thai Airways International PCL. 1995 - 2003 Advertising Manager, Thai Airways International PCL. 1991 - 1995 Sales Manager, United States of America, Thai Airways International PCL. 1988 - 1991 Sales Staff, Italy, Thai Airways International PCL. Other Non-Listed Companies/Entities (Current: 1 Company) Present Director, PH Seven Group Company Limited 2008 - 2014 Chief Executive Officer, Baraquda Group Company Limited Consultant, Dusit d2 Baraquda Pattaya Hotel 1984 - 1988 Marketing Research Manager for Advertising Company, Leo Burnett Thailand Company Limited PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): -None-

139

6. Mr. Suvait Theeravachirakul Vice Chairman of the Executive Committee, Member and Secretary of the Compensation and Nomination Committee Age 57 years Date appointed as director: November 28, 2003 Tenure as director: 12 years Education - Master of Business Administration, Wagner College, New York, U.S.A. - Chief Executive Program, Class 10, Capital Market Academy (CMA) - Anti-Corruption Strategic Management course for Senior Executives, Class 5, Sanya Dharmasakti Anti-Corruption Institute Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) - Director Certification Program (DCP) Class 9/2001 - Audit Committee Program (ACP) Class 15/2006 - Successful Formulation & Execution of Strategy (SFE) 2010 Experience: Listed Companies (Current: 5 Companies) 2009 - Present Vice Chairman of the Executive Committee, Member and Secretary of the Compensation and Nomination Committee Patum Rice Mill and Granary Public Company Limited 2003 - Present Member of the Executive Committee Patum Rice Mill and Granary Public Company Limited 2009 - Present President, MBK Public Company Limited 2002 - Present Director and CEO, MBK Public Company Limited 2002 - Present Member of the Executive Committee, MBK Public Company Limited 2007 - Present Independent Director and Member of the Audit Committee, IFS Capital (Thailand) Public Company Limited 2005 - Present Independent Director, Member of the Audit Committee, and Member of Risk Management Committee Thai Rung Union Car Public Company Limited 2000 - Present Member of the Executive Committee, Royal Orchid Hotel (Thailand) Public Company Limited Non-Listed Companies (Current: 71 Companies) 2013 - Present Chairman of the Board of Directors, MBK Food System Company Limited Director, Innofood (Thailand) Company Limited 2012 - Present Chairman of the Board of Directors, MBK Restaurant Group Co., Ltd. 2009 - Present Director, Sima Pac Company Limited 2006 - Present Chairman of the Board of Directors, MBK Food Island Company Limited 2005 - Present Director, PRG Granary Company Limited Director, Ratchasima Rice Company Limited 1997 - Present Chairman of the Board of Directors, MBK Food and Entertainment Co., Ltd. Present Chairman of the Board of Directors and Director - The Subsidiaries and Associates of MBK Public Company PRG shareholding: 0.00037% (As at book closing date on October 13, 2015) Family relationship (with directors/management): Brother-in-law of Mr. Somkiat Makcayathorn.

140

7. Mr. Kasemsuk Chongmankhong Director Age 57 years Date appointed as director: October 24, 2006 Tenure as director: 9 years Education - Master of Accounting, Thammasat University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) - Director Certification Program (DCP) year 2004 - Anti-Corruption for Executive Program (ACEP) Class 2/2012 Experience: Listed Companies (Current: 2 Companies) 2006 - Present Director, Patum Rice Mill and Granary Public Company Limited 2003 - Present Senior Executive Vice President, Finance and Administration, MBK Public Company Limited Non-Listed Companies (Current: 65 Companies) 2014 - Present Director, MBK Food System Company Limited 2013 - Present Director, Innofood (Thailand) Company Limited 2012 - Present Director, MBK Restaurant Group Company Limited 2009 - Present Director, Ratchasrima Rice Company Limited 2006 - Present Director, Sima Pac Company Limited Director, MBK Food Island Company Limited Director, PRG Granary Company Limited 2003 - Present Director, MBK Food and Entertainment Company Limited Present Director of the Subsidiaries and Associates of MBK Public Company PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): -None-

141

8. Mr. Somkiat Makcayathorn Director and Managing Director Age 50 years Date appointed as director: October 25, 2005 Tenure as director: 10 years Education - Master of Marketing, Thammasat University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) - Director Accreditation Program (DAP) year 2006 - Director Certification Program (DCP) year 2007 Experience: Listed Companies (Current: 1 Company) 2005 - Present Director and Managing Director, Patum Rice Mill and Granary Public Company Limited 2001 - 2004 Director of Sales and Marketing, Advance Agro Public Company Limited Non-Listed Companies/Entities (Current: 11 Entities) 2014 - Present Honorary Chairman, Thai Rice Packers Association 2011 - 2014 Chairman, Thai Rice Packers Association 2014 - Present -Arbitration Sub-committee, The Thai Chamber of Commerce and Board of Trade of Thailand -Member of the Executive Committee and Secretary-General, Thai Rice Exporters Association -Director, MBK Restaurant Group Company Limited 2013 - Present Chairman of the Executive Committee, - MBK Food System Company Limited - MBK Food Island Company Limited - MBK Food and Entertainment Company Limited 2008 - Present Member of the Executive Committee, Innofood (Thailand) Company Limited 2005 - Present Member of the Executive Committee, - PRG Granary Company Limited - Sima Pac Company Limited 2004 - Present Member of the Executive Committee, Ratchasima Rice Company Limited 2008 - Present Member of the Executive Committee, 2001 – 2004 Duputy Managing Director, Hi-Tech Paper Company Limited 1999 – 2001 Chief Marketing Officer and Acting Managing Director, J & J Marine Foods Company Limited 1987 – 1999 General Manager, I.C.C. Cosmos Company Limited PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): Brother-in-law of Mr. Suvait Theeravachirakul

142

/ I L E

Independent Director Director Executive Committee Member Executive Management

// V Y O

Indirect Subsidiary : Ratchasrima Rice Company Limited

Indirect Subsidiary: Innofood (Thailand) Company Limited

X I O,Z I L I, L -

X I O,Z I, L I, L I L L -

X I O,Z I I -

I,L I O,I,L I I -

I,L I X I I I, L -

Audit Committee Member Vice Chairman of The Board of Directors Executive Committee Vice Chairman MD/CEO

/// X Z

V,Y I,L O,I,L I E O,I,L I I I I,L -

Audit Committee Chairman Chairman of The Board of Directors Executive Committee Chairman

143

Related Company : MBK Public Company Limited

Subsidiary Company: MBK Food System Company Limited

X I O,I I I -

Indirect Subsidiary: Sima Pac Company Limited

Subsidiary Company: MBK Food and Entertainment Company Limited

X,Z 2. Dr. Pornsiri Poonakasem /, /// 3. Assoc. Prof. Dr. Sathit Paniangtong /, // 4. Mr. Dej Bulsuk / 5. Mr. Serm Henry Phenjati /, // 6. Mr. Suvait Theeravachirakul Y I, L 7. Mr. Kasemsuk Chongmankhong I I 8. Mr. Somkiat Makcayathorn O,I ,L O,I,L 9. Ms. Arthorn Vanasantakul 10. Miss Ririnda Poonpipat 11. Mrs. Nartrudee Chitrudi- Amphai 12. Mr. Masahiro Fujio 13. Mr.Yuichiro Kuki 14. Mr. Apichat Kamoltham 15. Mr. Kunchit Dilokwanich E I 16. Dr. Somboon Thitinansmboon E I 17. Ms. Pimonrat Chitpavanaskul E 18. Mr. Chavalit Limatibul 19. Mr. Sumet Limatibul 20. Mr. Suthee Limatibul 21. Mr. Ekasin Tortarameta E 22. Miss Rattana Pakkurk E 23. Mrs. Preeyanuch Nuntachote E -

Subsidiary Company: MBK Food Island Company Limited

1. Mr. Suphadej Poonpipat

Indirect Subsidiary: MBK Restaurant Group Company Limited

Name-surname/Company Name

Subsidiary Company: PRG Granary Company Limited

List of the Board of Directors and the executive management, controlling persons entitled in direct and indirect subsidiaries, associated companies and related companies as of December 31, 2015

Patum Rice Mill and Granary Public Company Limited

List of the Board of Directors and the executive management, controlling persons

Executive Management 1. Mr. Somkiat Makcayathorn Director and Managing Director Age 50 years Date appointed as director: October 25, 2005 Tenure as director: 10 years Education - Master of Marketing, Thammasat University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) - Director Accreditation Program (DAP) year 2006 - Director Certification Program (DCP) year 2007 Experience: Listed Companies (Current: 1 Company) 2005 - Present Director and Managing Director, Patum Rice Mill and Granary Public Company Limited 2001 - 2004 Director of Sales and Marketing, Advance Agro Public Company Limited Non-Listed Companies/Entities (Current: 11 Entities) 2014 - Present Honorary Chairman, Thai Rice Packers Association 2011 - 2014 Chairman, Thai Rice Packers Association 2014 - Present -Arbitration Sub-committee, The Thai Chamber of Commerce and Board of Trade of Thailand -Member of the Executive Committee and Secretary-General, Thai Rice Exporters Association -Director, MBK Restaurant Group Company Limited 2013 - Present Chairman of the Executive Committee, - MBK Food System Company Limited - MBK Food Island Company Limited - MBK Food and Entertainment Company Limited 2008 - Present Member of the Executive Committee, Innofood (Thailand) Company Limited 2005 - Present Member of the Executive Committee, - PRG Granary Company Limited - Sima Pac Company Limited 2004 - Present Member of the Executive Committee, Ratchasima Rice Company Limited 2008 - Present Member of the Executive Committee, 2001 – 2004 Duputy Managing Director, Hi-Tech Paper Company Limited 1999 – 2001 Chief Marketing Officer and Acting Managing Director, J & J Marine Foods Company Limited 1987 – 1999 General Manager, I.C.C. Cosmos Company Limited PRG shareholding: -None- (As at book closing date on October 13, 2015) Family relationship (with directors/management): Brother-in-law of Mr. Suvait Theeravachirakul

144

2. Mr. Kunchit Dilokwanich Senior Vice President, Administration Division Age 62 years Education - M.B.A. (Finance), University of Wisconsin, U.S.A. - M.S. (Accounting), University of Wisconsin, U.S.A. Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) 2014 - Present Senior Vice President, Administration Division, Patum Rice Mill and Granary Public Company Limited Non-Listed Companies/Entities (Current: 11 Entities) 2014 - Present Director, MBK Restaurant Group Company Limited 2010 - Present Director, Sima Pac Company Limited 2009 - Present Director, PRG Granary Company Limited 2008 - Present Director, Innofood (Thailand) Company Limited 2003 - Present Director, Ratchasima Rice Company Limited 1989 â&#x20AC;&#x201C; 1993 IT Manager, Laemthong Corporation Group PRG shareholding: 0.0002% (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

3. Dr. Somboon Thitinansmboon Senior Vice President, Operation and Raw Material Division Age 57 years Education - Doctor of Science, Chulalongkorn University - Master of Business Administration, Chulalongkorn University - Bachelor of Science, Chulalongkorn University - Bachelor of Thai Traditional Medicine, (First Class Honor) Sukhothai Thammathirat Open University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) Oct.15-Present Senior Vice President, Operation and Raw Material Division Patum Rice Mill and Granary Public Company Limited 2014 - Sep.15 Senior Vice President, Raw Material Division, Patum Rice Mill and Granary Public Company Limited 1991 â&#x20AC;&#x201C; Dec.13 Vice President of Business Development and Raw Materials Patum Rice Mill and Granary Public Company Limited Non-Listed Companies/Entities (Current: 7 Entities) Sep.14-Present Member of the Executive Committee, - MBK Food and Entertainment Company Limited - MBK Food Island Company Limited May14-Present Director, PRG Granary Company Limited Director, Ratchasima Rice Company Limited Mar08-Present Director, Innofood (Thailand) Company Limited Mar15-Present Advisor, Thai Agriculturist Association May14-Present Vice President and Secretary-General, Thai Rice Association 2006-2010 Committee Member, Institute of Food Research and Product Development, Kasetsart University PRG shareholding: 0.0042% (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

145

4. Ms. Pimonrat Chitpavanaskul Senior Vice President, Sales and Marketing Division Age 46 years Education -Master of Business Administration in Marketing & MIS, Oklahoma City University, USA -Bachelor of Political Science, Chiang Mai University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) 2015 - Present Senior Vice President, Sales and Marketing Division Patum Rice Mill and Granary Public Company Limited 2014 - Present President, Overseas Patum Rice Mill and Granary Public Company Limited 2008 - Present Export Manager Patum Rice Mill and Granary Public Company Limited Non-Listed Companies/Entities (Current: 3 Companies) 2014 - Present Member of the Executive Committee - MBK Food Island Company Limited - MBK Food and Entertainment Company Limited - Innofood (Thailand) Company Limited 1999 â&#x20AC;&#x201C; 2008 Export Manager, Lanna Agro Industry Company Limited PRG shareholding: - None - (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

5. Mr. Ekasin Tortarameta Vice President, Restaurant and Food Center Age 37 years Education - Master of Economics in Finance, National Institute of Development Administration -Bachelor of Engineering in Civil Engineering Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) Oct.15-Present Vice President, Restaurant and Food Center Patum Rice Mill and Granary Public Company Limited Apr.12-Oct.15 Executive Assistant to SEVP Finance and Administration MBK Public Company Limited 2008 - Present Civil Engineer Italian Thai Development Public Company Limited Non-Listed Companies/Entities -NonePRG shareholding: - None - (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

146

6. Ms.Rattana Pakkurk Deputy to Vice President, Administration Division Age 52 years Education Bachelor of Business Administration (BBA) in Accounting Ramkhamhaeng University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) 2013-Present Deputy to Vice President, Administration Division Patum Rice Mill and Granary Public Company Limited 1993-2013 Manager, Accounts Patum Rice Mill and Granary Public Company Limited Non-Listed Companies/Entities 1991-1993 Head of Accounting Department, Laemthong Corporation Group PRG shareholding: 0.0002% (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

7. Mrs. Preeyanuch Nuntachote Manager, Finance Department Age 55 years Education - M.B.A. Dhurakij Pundit University - Bachelor of Accountancy (Second Class Honor), Dhurakij Pundit University Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) 2001-Present Manager, Finance Department Patum Rice Mill and Granary Public Company Limited 1996-2000 Deputy to Manager, Accounts and Finance Patum Rice Mill and Granary Public Company Limited 2008-2011 Head of Finance Department Patum Rice Mill and Granary Public Company Limited Non-Listed Companies/Entities -NonePRG shareholding: 0.0000017% (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

147

8. Miss Dararat Homrossukhon Secretary of the Company and Head of Compliance Age 48 years Education - MA in Applied Economic Policy Analysis, Northeastern University, Boston, MA., USA - MBA in Finance, Kasetsart University - BBA in Finance, Thammasat University - Company Secretary Program (CSP # 32/2009) - Effective Minute Taking (EMT # 19/2011) Seminar on role and responsibility of directors: Thai Institute of Directors (IOD) -NoneExperience: Listed Companies (Current: 1 Company) 2013-Present Secretary of the Company and Head of Compliance Patum Rice Mill and Granary Public Company Limited 2008-Present Secretary of the Company and Vice President Compliance MBK Public Company Limited 2005-Present Secretary of the Executive Committee MBK Public Company Limited 2005-2009 Vice President Business Investment MBK Public Company Limited Non-Listed Companies/Entities -NonePRG shareholding: - None - (As at book closing date on October 13, 2015) Family relationship (with directors/management): - None -

148

25.

Report of changes in the Companyâ&#x20AC;&#x2122;s securities holding by directors and executive management Number of share holding in PRG on the book closing date Number (shares) Name-surname As at

13 Oct 15

Number (shares) As at 20 Oct 14

Increase (Decrease)

22,100 -

200 -

21,900 -

1,000 25,000 1,000 -

Board of Directors

Mr. Suphadej Poonpipat Spouse and minor child

Dr. Pornsiri Poonakasem Spouse and minor child

Asso. Prof. Dr. Sathit Paniangtong Spouse and minor child

Mr. Suvait Theeravachirakul Spouse and minor child

Mr. Dej Bulsuk Spouse and minor child

Mr. Serm Henry Phenjati Spouse and minor child

Mr. Kasemsuk Chongmankhong Spouse and minor child

Mr. Somkiat Makcayathorn Spouse and minor child

Executive Management

Mr. Somkiat Makcayathorn Spouse and minor child

Mr. Kunchit Dilokwanich Spouse and minor child

Dr. Somboon Thitinansmboon Spouse and minor child

Ms. Pimonrat Chitpavanaskul Spouse and minor child

Mr. Ekasin Tortarameta Spouse and minor child

Ms. Rattana Pakkurk Spouse and minor child

149

Name-surname

Number (shares) As at

13 Oct 15

Number (shares) As at 20 Oct 14

Increase (Decrease)

10 -

Executive Management

Mrs. Preeyanuch Nuntachote Spouse and minor child

Miss Dararat Homrossukhon Spouse and minor child

Remark: The Company has changed its par value from May 14, 2014 as per the following details. Before: Registered capital of THB 900 million and paid-up capital of THB 600 million with the par value of Baht 10 each, totaling 90 million shares. After: Registered capital of THB 900 million and paid-up capital of THB 600 million with the par value of Baht 1 each, totaling 900 million shares.

150

26.

Reference Persons

Securities Registrar Thailand Securities Depository Company Limited Address: The Stock Exchange of Thailand Building, 14th Floor, 93 Ratchadaphisek Road, Dindaeng, Dindaeng, Bangkok 10400 Tel: 0-2009-9000 Fax: 0-2009-9001 Ext. 9384 Auditor Ms. Ratana Jara, license no. 3734 and/or Mrs. Nonglak Pumnoi, license no. 4172 and/or Ms.Rachada Yongsawadvanich, license no.4951 of EY Office Limited appointed as the company auditor. In case that the appointed auditors cannot perform their duties, EY Office Limited will assign another auditor to perform the job. Address: EY Office Limited 193/136-137 Rajadapisek Road (near Queen Sirikit National Convention Centre), Klongtoey, Bangkok 10110 Tel: 0-2264-0777, 0-2661-9190 Fax: 0-2264-0789-90, 0-2661-9192 Financial Advisor Thanachart Bank Public Company Limited Registration Number: 0107536001401 Address: 444 MBK Tower, Phayathai Road, Wangmai, Pathumwan Bangkok 10330 Tel: 0-2217-8000 Fax: 0-2217-8333 Website: www.thanachartbank.com Financial Institutes 1. Siam Commercial Bank PCL. 2. Kasikornbank PCL. 3. Krungthai Bank PCL. 4. United Overseas Bank (Thai) PCL. 5. Industrial and Commercial Bank of China (Thai) PCL. (Previously named ACL Bank PCL.)

151

¢ŒÒÇÁÒºØÞ¤ÃÍ§ ¢ŒÒÇÊÒÃºÃÃ¨Ø¶Ø§¢¹Ò´ 5 ¡¡. ÃÒÂáÃ¡¢Í§àÁ×Í§ä·Â ¼ÅÔµâ´Â¡ÃÃÁÇÔ¸Õ·Õ่·Ñ¹ÊÁÑÂ à¹Œ¹¤ÇÒÁÊÐÍÒ´ สุดยอดข้าวแห่ง·ÓãËŒ คุณภาพ จากข้ าวมาบุ่¹ญã¨ã¹¡ÒÃºÃÔ ครอง พิถีพิถันâในการคั ดสรรพันธุ์ข้าวที่ดี à ¡Ô ´ ¤ÇÒÁÁÑ À¤ จากแดนสยาม ผ่านกรรมวิธีชั้นสูงในการรักษาคุณค่าทางด้านอาหาร และกลิ่นหอม อันเป็นเอกลักáÅÐ¤§¤Ø ษณ์เฉพาะข้ วมาบุญÁครอง ท�ำให้ไÓด้àÊÁÍµÅÍ´»‚ ข้าว นุ่ม กลิ่นหอม ทานอร่อย ³าÀÒ¾ãËŒ Õ¤ÇÒÁÊÁ่ การันตีคุณภาพด้วยรางวัลมากมาย สามารถครองใจผู้บริโภคได้ถึงปัจจุบัน ¨¹ÊÒÁÒÃ¶¤ÃÍ§ã¨¼ÙŒºÃÔâÀ¤ä´Œ¶Ö§»˜¨¨ØºÑ¹

“ข้าวมาบุญครอง”

“ÊÐÍÒ´·Ø¡¶Ø§ ËØ§¢Ö้¹ËÁŒÍ ÍÔ่ÁÍØ‹¹·Ø¡¤ÃÍº¤ÃÑÇ” พบกับข้าวคุณภาพ หลากหลายสายพันธุท์ คี่ ณ ุ ต้องการ ได้ทบี่ ธู จ�ำหน่าย ºÙ ¸ ¨ÓË¹‹ Ò Â¢Œ Ò ÇÁÒºØ Þ ¤ÃÍ§ ข้าวมาบุญครอง 3 แห่ง - ชั้น G เอ็มบีเค เซนเตอร์ àÍ็ÁºÕà¤ à«¹àµÍÃ ªÑ้¹ G - ชั้น 1 ศูนย์การค้า เดอะไนน์ พระราม 9 à´ÍÐ ä¹¹ าส์¾ÃÐÃÒÁ - ชั้น 3 อาคารกลาสเฮ้ สุขุมวิท925ªÑ้¹ 1 ¢ŒÒÇÁÒºØÞ¤ÃÍ§ ÊÓ¹Ñ¡§Ò¹ãËÞ‹ ÍÒ¤ÒÃ¡ÅÒÊàÎŒÒÊ ªÑ้¹ 3

ติดตามข่าวสารของเราได้ที่ ¢ŒÒÇÁÒºØข้Þาวมาบุ ¤ÃÍ§ ญครอง 02 661 - 7900

“MBK Food Island” ที่สุดของศูนย์รวมร้านอาหาร ที่มีชื่อเสียง ในเรื่องรสชาติ และความ อร่อย หลากหลายเมนูให้เลือกสรร ในราคาสบายกระเป๋า แวะเวียน ไปได้ที่ MBK Food Island ชั้น 6 MBK Center ติดตามข่าวสารของเราได้ที่

MBK Food Island

“THE FIFTH Food avenue” ศูนย์อาหารนานาชาติ คุณจะได้สมั ผัสกับความหลากหลายวัฒนธรรมทางด้าน อาหาร จากทัว่ ทุกมุมโลก ทีเ่ ราได้รวบรวมมาไว้ทกี่ ลางใจเมืองกรุงเทพมหานคร ณ THE Fifth Food Avenue ชั้น 5 MBK Center ติดตามข่าวสารของเราได้ที่

THE Fifth Food Avenue

“ฟูจิโอะ” ร้านอาหารญีป่ นุ่ เพือ่ สุขภาพ สไตล์โฮมเมดจากโอซาก้า ทีค่ ดั สรรวัตถุดบิ สด ใหม่ พิถีพิถัน ใส่ใจทุกขั้นตอนการปรุง จนได้เมนูอาหารรสเลิศ คุณภาพ เยี่ยม เสิร์ฟพร้อมข้าวญี่ปุ่น กลิ่นหอม รสนุ่ม ด้วยการหุงแบบคามาทากิ แล้วพบกัน ณ ร้านฟูจโิ อะ เปิดให้บริการทุกวัน ตัง้ แต่เวลา 11.00–21.30 น. - ฟูจิโอะ ชั้น 6 MBK Center สอบถามเพิ่มเติม โทร 02-620-9777 ติดตามข่าวสารของเราได้ที่

“ซูรุมารุ” อุด้งเส้นสด ต้นต�ำรับจากโอซาก้า สัมผัสความอร่อยของอุด้ง เส้นเหนียว นุ่ม สดใหม่ เสิร์ฟพร้อมน�้ำซุปรสกลมกล่อม กลิ่น หอมเย้ายวนใจ การันตีความอร่อยด้วยรางวัลสุดยอดเมนูอุด้ง ในรายการชื่อดังจากประเทศญี่ปุ่น แล้วพบกัน ณ ร้านซูรุมารุ เปิดให้บริการทุกวัน ตั้งแต่เวลา 11.00 – 21.30 น. - ซูรุมารุ ชั้น 1 ศูนย์การค้า Ha Ha สอบถามเพิ่มเติม โทร 061-819-6739 ติดตามข่าวสารของเราได้ที่

TsurumaruUdonTH

FujioShokudoTH

“สุกี้ยากี้ นัมเบอร์วัน” สุกี้ยากี้สูตรต้นต�ำรับ ระดับต�ำนาน กว่า 50 ปี เชิญคุณสัมผัสเนื้อหมูหมักรสนุ้ม..นุ่ม ในน�้ำซุปหอมกรุ่น รสชาติกลมกล่อม ผสานกับน�ำ้ จิม้ รสเด็ดสูตรลับเฉพาะ พร้อมเมนูอาหารระดับพรีเมีย่ มนานาชนิด ทีย่ กทัพ พร้อมเสิร์ฟความอร่อย อันเป็นเอกลักษณ์เฉพาะ ที่ร้านสุกี้ยากี้ นัมเบอร์วัน ที่เดียวเท่านั้น แล้วพบกัน ณ ร้านสุกี้ยากี้ นัมเบอร์วัน ทั้ง 3 สาขา - MBK Center ชั้น 6 เปิดให้บริการ เวลา 10.00 – 22.00 น. - อาคารกลาสเฮาส์ รัชดา ชั้น 2 เปิดให้บริการ เวลา 11.00 – 22.30 น - ศูนย์การค้า เดอะไนน์ พระรามเก้า ชั้น 1 โซน East Village เปิดให้บริการ เวลา 11.00 – 22.00น ติดตามข่าวสารของเราได้ที่

Sukinumberone

บร�ษัท ปทุมไรซมิล แอนด แกรนาร� จำกัด (มหาชน) เลขที่ 1 อาคารกลาสเฮ าส ชั้น 3 ซอยสุข�มว�ท 25 ถนนสุข�มว�ท แขวงคลองเตยเหนือ เขตวัฒนา กรุงเทพฯ 10110 โทรศัพท : 0-2661-7900 โทรสาร : 0-2661-7901 www.mahboonkrongrice.com / www.facebook.com/mbkrice / E-mail: prgrice@patumrice.co.th