REPORT OF INDEPENDENT FINANCIAL ADVISOR S OPINION

Transcription

1 REPORT OF INDEPENDENT FINANCIAL ADVISOR S OPINION IN RELATION TO THE ACQUISITION OF ASSETS BY MEAN OF PURCHASE AND ACCEPTANCE OF TRANSFER OF PARTIAL BUSINESS FROM CONNECTED PERSONS In order to proposed to the shareholders of NFC FERTILIZER PUBLIC COMPANY LIMITED NFC FERTILIZER PUBLIC COMPANY LIMITED Prepared by 18 March 2559

2 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons CONTENT Page Definition 3 Background and Characteristics of Transaction 5 Summary of Independent Financial Advisor Opinion 7 1. Disposition of assets and connected transaction Objective and background of the transaction Date/Month/Year of the Transaction Connected persons and characteristic of relationship with the Company General Characteristic and Size of the Transaction Details of Acquired Assets Total value of reciprocations The value of acquired assets Basis for setting value of reciprocations Expected benefits for the company Utilized source of fund Conditions for the program Effects on Issuance and offering the company s ordinary shares only to C&A which is a connected person 32 2.Transaction s Validity and Benefits Transaction s validity and benefits for listed company Risks from transaction Comparison of pros and cons of transaction and non-transaction Comparison of pros and cons of transaction and non-transaction with related persons 40 3.Appropriateness of transaction price and condition Appropriateness of transaction price Appropriateness of Conditions for the Transaction Summary of the Independent Financial Advisor s Opinion against all Transactions 69 Attachment 1- Overview of the Business Operation and the Performance of NFC Fertilizer Public Company Limited Attachment 2- Overview of the Business Operation and the Performance of Chemicals and Aromatics (Thailand) Co.,Ltd. Attachment 3- Summary of Information of SC Carrier Co.,Ltd. Attachment 4- Summary of Information of SC Management Co.,Ltd. Attachment 5- Summary of Independent Appraisers Appraisal Page 2/74

3 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Definition The Independent Financial Advisor has provided the definitions to have the meaning as specified herein in order to be used in this document. In terms of the accounting definition, the meanings are in accordance with the generally accepted accounting principle at present. These definitions are as follows:- Abbreviations Company or NFC Independent Financial Advisor or KTBS SET Office of SEC IEAT C&A RBT SCC SCM Partial Business Full name/text NFC Fertilizer Public Company Limited KTB Securities (Thailand) Co.,Ltd. Stock Exchange of Thailand Office of the Securities and Exchange Commission Industrial Estate Authority of Thailand Chemicals and Aromatics (Thailand) Co.,Ltd. Rayong Bulk Terminal Co.,Ltd. SC Carrier Co.,Ltd. SC Management Co.,Ltd. Partial Business transferred from C&A Page 3/74

4 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons No. 041/2016 March 18, 2016 Subject: The opinion report of the Independent Financial Adviser on the asset acquisition via the purchase of assets and the acceptance of partial business transfer from related parties Attention: The Board of Directors and Shareholders of NFC Fertilizer Public Company Limited Reference: 1. The resolution of the Board of Directors Meeting no. 2/2016 held on March 2, The information on the asset acquisition and the connected transaction of the Company 3. The 2014 Annual Registration Statement (Form 56-1) of NFC Fertilizer Public Company Limited 4. The financial statement of the Company and its subsidiaries audited by certified public accountant for the twelve months ended December 31, The financial statement of Chemicals and Aromatic (Thailand) Co., Ltd., ( C&A ) audited by certified public accountant for the twelve months ended December 31, The 2015 trial balance of NFC Fertilizer Public Company Limited 7. The 2015 trail balance of Chemicals and Aromatic (Thailand) Co., Ltd., ( C&A ) 8. The legal documentation and contracts relevant to the transaction 9. Certificate / Memorandum of Association / List of shareholders names (Bor Or Jor. 5) of the Company and its subsidiaries and C&A and other documents, as well as the interviews with the management of the Company and its subsidiaries and relevant staff The results analyzed by KTB Securities (Thailand) Co., Ltd., ( the IFA or "KTBS") in this report are based on the information and assumptions obtained from the management of NFC Fertilizer Public Company Limited ( the Company" or "NFC") and the information revealed to the public by the Company on the websites of the Securities and Exchange Commission ( and the Stock Exchange of Thailand ( The IFA shall not be responsible for any profits/losses and impacts arising from the transaction. Most documents related to the Company and the relevant companies are in electronic format or the Scan of Original Documents where the IFA granted by the Company believes that they are true copy. The IFA undertakes the study using its knowledge, skill and discretion as a professional whose consideration and opinions, in certain circumstances and information, can be realized today. If the situation and information has been changed significantly, it may affect the results of the IFA study. Page 4/74

5 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Background and Characteristic of the Transaction NFC Fertilizer Public Company Limited ( the Company" or "NFC"), a company listed on the Stock Exchange of Thailand ("the Stock Exchange or SET"), originally the Company ran a business in the production and distribution of chemical fertilizers, the sales of gypsum, ammonia and sulfur acid including providing sulfuric-acid storage tank service, but afterwards, the Company experienced business problems until being required to carry out the rehabilitation plan as ordered by the Central Bankruptcy Court in During the process of rectifying the situation according to the plan, the Company has adjusted its business approach by maintaining the main revenues derived from the operation of the import and distribution of ammonia to C&A and from the sale and service of sulfuric-acid containers. While the Company was under the rehabilitation, as a planning administrator, the Company has had a plan to acquire the assets and partial business transfer from C&A. In the first step, the Company has entered into a new contract to replace the original trading ammonia contract with C&A on July 1, The main point was the changes in the price of goods and certain conditions of the contract. The change in the conditions would give the Company a higher profit from the sales increase and would have a positive effect on the Company s earnings in the future (as detailed in the summary table of the differential of ammonia contracts with changes under section General Characteristic of the Transaction). However, on November 3, 2015, the Supreme Court lifted the order of the request for the rehabilitation of the Company. As a result, the Company had to leave the rehabilitation plan, which made its intention to buy the ammonia business from C&A under such plan unsuccessful. Currently the Company is in the process of urgently resolving the delisting issue within March 31, 2016 according to the notice from the Stock Exchange. Previously, the Company was all along looking for opportunities and business practice that could generate more revenues and earnings to the Company to improve its financial position in the future. Therefore, the Board of Directors Meeting of the Company no. 2/2016 held on March 2, 2016 has made a resolution to propose to the 2016 Annual General Meeting of Shareholders for the approval to acquire the assets and partial business transfer from Chemicals & Aromatic (Thailand) Co., Ltd., ("C&A") in relation to the distribution business of chemical products - ammonia and ammonium hydroxide type, i.e. the ownership of the property in all relevant distribution business of chemicals products - ammonia and ammonium hydroxide type, which includes the land lease agreement with buildings at two locations of plants in Pathum Thani and Surat Thani Provinces, the ammonia tanks and accessories, the customer data with trading agreements such as the ammonia trade, the loan of ammonia cylinder and accessories and other contracts related to the operations, with the total value of 282,896, baht inclusive of VAT. The payment for such assets and partial business transfer will be made by the issuance of new ordinary shares to specific investors (Private Placement: PP) of 1,768,106,235 shares at the price of Baht 0.16 per share (par value of Baht 0.16 per share), such price is not lower than 90% of the market price according to the related announcement of the Securities and Exchange Commission. The transaction is deemed to be of the asset acquisition in accordance with the announcement of the Capital Market Supervisory Board no. Tor Jor. 20/2551 Re: Rules on Entering into Significant Transaction Deemed as the Acquisition or Disposition of Assets dated August 31, 2008 and additional amendment and the notification of the Securities and Exchange Commission of Thailand Re: Disclosure of the Information and the Operation of Listed Companies concerning the Acquisition or Disposition of Page 5/74

6 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Assets B.E dated October 29, 2004 ( the Notification of Acquisition or Disposition"). When calculating based on criteria in the notification by using the highest value derived from any of the criteria, the total value is equal to 72% of the total assets of the Company under the consolidated financial statements as of December 31, 2015 according to the total value of consideration, greater than 50% but less than 100% and deemed as the transaction type 1 in accordance with the notification of acquisition or disposition. However, the asset acquisition and partial business transfer of C&A as well as the relevant contracts have involved directors, executives and major shareholders related to the Company. Such transaction is thus considered to be a connected transaction in accordance with the announcement of the Capital Market Supervisory Board no. Tor Jor. 21/2551 Re: Rules on the Connected Transactions and the Notification of the Securities and Exchange Commission Re: Disclosure of the Information and the Operation of Listed Companies concerning the Connected Transactions B.E ( the Notification of Connected Transaction"). The value of transaction is equal to % of the value of Net Tangible Assets ("NTA") of the Company according to the consolidated financial statements as of December 31, 2015 (NTA equals million baht), which is higher than 20 million baht or more than 3.00% of the value of net tangible assets of the Company. Therefore, the Company shall request approval from the general meeting of shareholders to enter the connected transaction with the votes of no less than 3 in 4 votes of the total votes of the shareholders present at the meeting with voting rights excluding the stakeholders and shall prepare a disclosure report of information of such transaction. In this regard, the Company has appointed KTB Securities (Thailand) Co., Ltd., ("KTBS" or "IFA") as an Independent Financial Advisor to provide opinions to the shareholders of the Company on the asset acquisition and the connected transaction and to disclose information of such acquisition and connected transaction to the Stock Exchange and to propose to the shareholders meeting for approval of the asset acquisition and the connected transaction. The Company shall propose to the 2016 General Meeting of Shareholders held on April 29, 2016 for approval of such transaction. Page 6/74

7 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Summary of the IFA s Opinion KTB Securities (Thailand) Co., Ltd., as an Independent Financial Adviser to the shareholders appointed by the Company, gives its opinion on the transaction as follows: With regard to the valuation of new ordinary shares under private placement issued by the Company to pay for the assets and partial business transfer of C&A, the IFA has assessed the appropriateness of the share price by various approaches as below summary: Valuation Approach The Assessed Value of Shares (Baht / Share) Selling Price (Baht / Share) Higher (Lower) than Selling Price of Ordinary Shares (Baht / Share) Higher (Lower) than Selling Price of Ordinary Shares (%) The Assessed Value of Shares under PP * (Million Baht) 1. Market Price N/A 0.16 N/A N/A N/A Approach 2. Book Value (0.1519) (94.94) Approach 3. Adjusted Book (0.1519) (94.94) Value Approach 4. Price-to-Book Ratio (0.1586) - (0.1587) (99.13) - (99.19) Approach 5. Price-to-Earnings Ratio Approach 6. Discounted Cash (0.133) - (0.136) (82.89) - (84.71) Flow Approach *Remark: The assessed value of shares under PP (million baht) = The assessed value of shares (baht / share) x the quantity of newly-issued shares In the IFA s opinion, the book value and the adjusted book value approaches were the past information that has not shown future business potential in terms of business value and the Company was suspended from trading so there is no market price to compare. The price-to-book ratio and the price-to-earnings ratio are the comparison of the Company s status with the companies in the Stock Exchange which reflect the value from the viewpoint of investors. But because the status and performance of the Company in 2015 was not the real operating result of the Company but it was the result of debt restructuring and reversal entries of more than 508 million baht so this value may not appropriately reflect the real value of the business. The IFA then agrees to choose the Discounted Cash Flow Approach (DCF) which indicates the future operating performance of the Company better than the others, with the assessed value of the Company s shares at baht/share where its value is lower than the newly issued shares at baht/share or lower than the selling price of ordinary shares at %. Thus the shares of the Company at a price of 0.16 baht/share, the IFA is of the opinion that it delivers significant value and benefit to shareholders and the Company. Page 7/74

8 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons The Company has a valuation of C&A property conducted by two appraisers: American Appraisal (Thailand) Co., Ltd., and The Valuation and Consultants Co., Ltd., with its objective to assess for public purpose. The estimated price of the property assessed by the two appraisers, the listed appraisers authorized by the SEC, averages about million baht. But such property valuation does not reflect the status of the business acquired. Although there is a valuation of intangible assets appraised by the Company s financial adviser at a value of million baht with the Income Approach Multi Period Excess Earnings Method: MPEEM the assessment of intangible assets calculated by the future cash flow minus the return of tangible assets and the return of working capital, one of the appropriate approaches to the valuation, however, the Company has only received the assessment report in summary presentation, not the full report. So the IFA commented that it is inappropriate and insufficient to use as a reference document for the valuation of assets in this segment (details of the valuation appeared in section 1.5, Details of the Asset Acquisition). Hence, the IFA is of the opinion that the valuation of the assets and the business acquired should be evaluated as a new business with the transferred assets by using the selling price and cost structure mainly from the real operational status of C&A. With the discounted cash flow approach based on the agreed purchase value at million baht inclusive of VAT, the business valuation can be summarized as follows: Valuation Approach 1. Net Present Value (NPV) of Partial Business million baht 2. Internal Rate of Return (IRR) of Partial Business 34.3% 3. Payback Period of Partial Business 4 years, 10 months and 19 days The IFA assesses the value investing with three financial approaches: Net Present Value (NPV), Internal Rate of Return (IRR) and Payback period. The NPV of partial business equals million baht, greater than 0; and the IRR equals 34.3%, greater than the Weighted Average Cost of Capital (WACC) based on the capital structure of the Company spent on the acquisition of partial business of C&A which, at this time, equals 7.54% per year. In regard to the payment for the asset acquisition and partial business transfer of C&A, the Company shall issue new ordinary shares of 1,768,106,235 shares with par value of Baht 0.16 per share at the selling price of Baht 0.16 per share for the allocation through Private Placement (PP) at the value of million baht. The IFA calculated that the Net Present Value of C&A business is million baht, higher than the value of paid-shares at million baht or 77.87%. Hence, the IFA is of the opinion that the purchase of assets and the transfer of partial business from C&A are reasonable in terms of price and value investing with the assessment of the net present value of the partial business transfer at million baht and the internal rate of return at 34.3%, higher than the financial cost of the Company with payback period of 4 years, 10 months and 19 days. Page 8/74

9 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Appropriateness of Conditions of the Transaction The IFA, based on the information has been obtained, given that the Company will acquire partial business from C&A by the issuance of new ordinary shares under private placement to C&A for payment of the acquisition, the IFA is of the opinion that the conditions of the transaction are appropriate because the Company has already been in the business of importing chemical products i.e. ammonia so the acquisition of partial business of C&A will enhance a full range of the Company's business from its expansion in distribution and services to end-customers. This could affect the Company's operating result and financial position in a positive way in the long term; and the conditions of the transaction stated in the agreement prohibit C&A and major shareholders from competing business in the future, including the pre-defined regulatory conditions that must be approved by the shareholders before engaging in the transaction as well as the requirements to obtain permission from the SEC for the issuance of new shares to pay for the acquisition without significant changes in the business, which are the appropriate conditions. However, the asset acquisition and partial business transfer at this time has been paid by the issuance of new shares under private placement (PP) to the seller - C&A, amounted to 1,768,106,235 shares at a price per share of 0.16 baht. After the increase in capital stock, the shareholding structure of the Company will be changed, which makes Nataphob Ratanasuwanthawee Group increase its stake from 45.60% to 56.90%, leading to the responsibility of Nataphob Ratanasuwanthawee Group to launch a tender offer to other shareholders. If Nataphob Ratanasuwanthawee Group has insufficient funds for buyback of shares from other shareholders, the Group must reduce its stake down to less than 50%. The issuance of new shares through Private Placement (PP) at this time will make Nataphob Ratanasuwanthawee Group hold the voting rights of the company more than half of the total voting rights of all ordinary shares of the Company (if there is sufficient funds for buyback of shares from other shareholders) or nearly half of the total voting rights of all ordinary shares of the Company (in case the reduction of its stake to less than 50%). Rationale and Benefits of the Transaction As the Company is now in a position that may be delisted from the Stock Exchange due to its financial and operating-result problems, with the time to resolve the delisting issue until March 31, 2016, it is all along attempting to generate more revenues and improve performance of the Company. Thus the transaction to acquire the assets and partial business transfer of C&A, at this time, with a total value of transaction at 282,896, million baht is expected to be a positive result on the financial position and performance of the Company in the future. In summary, the Company will gain benefits from the transaction as follows: Benefits of the transaction 1. Reduce reliance on a single customer in terms of ammonia business where C&A is the only customer of the Company 2. Reduce transaction / conflict of interest with shareholders and executives because C&A is a related party who has the function of co-major shareholder, co-director and co-executive with the Company Page 9/74

10 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 3. Obtain the assets and business of C&A, as well as retail customers without paying cash 4. An opportunity to gain a higher profit from the sale of goods to customer directly without an intermediary 5. Add value to the Company in terms of a complete range of ammonia import Summary of the Risk of the Transaction In this transaction, the IFA commented that shareholders shall consider the risks of the following issues (as described in the risk section - 2.2): 1. The risk that SCC and SCM may not allow the Company to renew the lease of land after the expiration of the lease in the future. The Company may have difficulty finding a place to support their business. However the Company plans to negotiate the renewal of the lease with the lessee in advance and because the machines and most of the equipment are ammonia tanks, valves, and pipelines, which are not too difficult to move them to a new location if the lease cannot be renewed. 2. The risk of a longer credit term to retail customers of C&A will cause the Company more revolving period on accounts receivable. However, the financial information on previous accounts receivable of C&A showed that the proportion has been declined and there was no default on debt payments later than specific time. 3. The risks of fluctuation in the price of ammonia and the exchange rate after a change to the ammonia agreement. After the change in the contract, the Company is exposed to the risk of fluctuation in the price of imported ammonia comparing to the ammonia price in the country including the risk of the exchange rate of ammonia import in US dollars. However, in respect of the prevention for the risk of fluctuation in the price of ammonia, the selling price is determined and adjusted by the Company according to the fluctuation in global market price. It also has futures contract to hedge the exchange rate risk. 4. An increase in the risk of ammonia shipping to the end customer - both the products and the cost go to the Company s responsibility. However, the Company has hedged this kind of risk by contracting with the insurer, SCC, to be liable for damages in transportation. Below is the summary of advantages and disadvantages of the transaction and non-transaction: Advantages and Disadvantages of the transaction Advantages of the transaction 1.Reduce the reliance on a single customer. Previously, there was only C&A, after the transaction, the Company will directly sell our products to other retail customers of C&A. 2.Increase revenue from an increasing proportion of earnings because the Company will receive profit from other retail customers of C&A instead. 3.No commitment of financing on the transaction. 4.Reduce conflict of interests with connected persons in the future especially C&A who was the sole ammonia purchaser Disadvantages of the transaction 1.The Company takes more risks from retail customers due to the risk from payment and longer credit term including the risk from the existence of retail customers of C&A. 2.The Company s shareholders have a dilution effect at 20.80%. 3.New transactions with connected persons (with SCC and SCM) have been increased. 4.To have more expenses in hiring the employees transferred from C&A Page 10/74

11 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Advantages and Disadvantages of non-transaction Advantages of non-transaction Disadvantages of non-transaction 1.The Company shall not bear the risks resulting 1.Lose opportunity to gain the margin from the from the customers of C&A directly. ammonia sale. 2.The Company s shareholders have no dilution 2.The Company loses opportunity to get the effect. experienced team from C&A. 3.To further have the transaction with C&A which is the related transaction Below is the summary of advantages and disadvantages of the transaction and non-transaction with connected persons: Advantages and Disadvantages of the transaction with connected persons Advantages of the transaction with connected Disadvantages of the transaction with connected persons persons 1.Acquire the assets, customer base and skilled 1.Changes in the shareholding structure where employees immediately. the connected persons of the Company will have their higher shareholding ratio. 2.Generate more transactions with other related companies (with SCC and SCM) Advantages and Disadvantages of non-transaction with connected persons Advantages of non-transaction with connected Disadvantages of non-transaction with persons connected persons 1.Shareholders have more confidence in the 1.High initial investment in operating business transaction. 2.Take time to build a customer base 3.The Company will have C&A customers who is only one related party If the Company wants to deal in ammonia business with retail customers, the most appropriate guideline is to do such connected transaction; since it is the transfer of assets and the ammonia sale to retail customers has already been performed by C&A, as well as the transfer of partial staff of C&A to become the Company s employees, the Company can thus operate its business continuously and immediately. The Company is not required to pay those employees for the compensation because it is the C&A responsibility. Moreover, the Company is not required to give those employees the time to learn a new business. These will gain more benefits than making the transaction with third parties. In summary, when comparing benefits, advantages and disadvantages as well as the rationale of the transaction, the IFA is of the opinion that such transaction shall improve the Company's revenue and operating results. Moreover, as the appraised value of shares being issued to pay the value of properties and the business transfer acceptance was in the amount of Baht/share (which is lower that the share price used to pay the share price i.e Baht), accordingly, the Company will benefit from the Page 11/74

12 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons issuance of shares for paying such price. In addition, the value of business (especially the ammonia business accepted from C&A i.e Million Baht) was quite higher than the value of payment a lot, therefore, the Company had benefitted from the purchase of business at this time. The transaction is deemed to be reasonable and beneficial to the Company and the Company s shareholders in terms of the appropriateness of the price and the conditions of the transaction, as mentioned above. Therefore, we have the opinion that the shareholders should approve the acquisition of assets by purchasing the assets and to accept the partial business transfer from such connected persons. However, shareholders should study the IFA s opinion report with all attachments thoroughly including documents attached to the meeting invitation in order to support decision-making for the votes. The approval of the disposal of assets is significantly based on the judgments and decisions of the shareholders. KTBS, as an Independent Financial Adviser, certifies that the above-mentioned opinions have been given with prudence in accordance with the professional standards and have been taken into account the shareholders interests as a main purpose. Page 12/74

13 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 1. Disposition of assets and connected transaction 1.1 Objective and background of the transaction NFC Fertilizer Public Company Limited ( the Company or NFC ), a company listed on the Stock Exchange of Thailand ("the Stock Exchange or SET"), operated the business relating to the sale and manufacture of chemical fertilizer, distribution of gypsum, ammonia and sulfuric acid including the service of storage tank-sulfuric acid. Later, the Company faced its business problem and it must be under the business rehabilitation plan according to the order of Central Bankruptcy Court in During the time that the Company was under business rehabilitation plan, the Company had adjusted its guideline of business operation, that is, its main operating revenue was from the import and distribution of ammonia to C&A and to distribute and render the service of sulfuric storage tank. During the time that the Company was under business rehabilitation plan, the Company, as the plan executive, had the work plan to buy partial assets and business of C&A in order to generate revenue and to result in good operating result of the Company. Hence, firstly, the Company entered into a contract to replace the original trading ammonia contract with C&A on 1 July The key point is the changes in the price of goods and certain conditions of the contract. Such change of conditions will make the Company to receive more margin of the profit from sale and it will be beneficial to the Company s operating result in the future (as detailed in the summary table of the difference of ammonia contracts with changes under section 1.4.1: General Characteristic of the Transaction). However, on 3 November 2015, the Supreme Court ordered to dismiss the request for business habilitation of the Company, accordingly, the Company was not under the business rehabilitation plan anymore. The work plan to buy the ammonia business of C&A under the business rehabilitation plan was unsuccessful. At present, the Company is taking action speedily to rectify the cause of delisting of shares within 31 March 2016 according to the letter notified by the Stock Exchange of Thailand. For the past period of time, the Company had put our effort to have opportunity and guideline for operating the business which can generate higher revenue and better operating result for the Company for the Company s higher financial status in the future. Accordingly, the Board of Directors Meeting of the Company no. 2/2016 held on March 2, 2016 has passed a resolution to propose to the 2016 Annual General Meeting of Shareholders for the approval to acquire the assets and partial business transfer from Chemicals & Aromatic (Thailand) Co., Ltd., ("C&A") in relation to the distribution business of chemical products - ammonia and ammonium hydroxide type, that is, the ownership of the property in all relevant distribution businesses of chemical products - ammonia and ammonium hydroxide type, which are, the agreement of lease of land and structures of 2 plants located in Pathum Thani Province and Surat Thani Province, the ammonia tanks and accessories, the customer base and trading agreements executed with the customers, such as the ammonia sale agreement, the loan of ammonia storage tanks and accessories and other contracts with all permits related to the business operations, with the total value of 282,896, Baht inclusive of VAT. The payment for such assets and partial business transfer will be made by the issuance of new ordinary shares to specific investors (Private Placement: PP) of 1,768,106,235 shares at the price of Baht 0.16 per share Page 13/74

14 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons (par value of Baht 0.16 per share), such price is not lower than 90% of the market price according to the related announcement of the Securities and Exchange Commission. The transaction is deemed to be of the asset acquisition in accordance with the announcement of the Capital Market Supervisory Board no. Tor Jor. 20/2551 Re: Rules on Entering into Significant Transaction Deemed as the Acquisition or Disposition of Assets dated August 31, 2008 and additional amendment and the notification of the Securities and Exchange Commission of Thailand Re: Disclosure of the Information and the Operation of Listed Companies concerning the Acquisition or Disposition of Assets B.E dated October 29, 2004 ( the Notification of Acquisition or Disposition"). When calculating based on criteria in the notification by using the highest value derived from any of the criteria, the total value is equal to 72% of the total assets of the Company under the consolidated financial statements as of December 31, 2015 according to the total value of consideration, greater than 50% but less than 100% and deemed as the transaction type 1 in accordance with the notification of acquisition or disposition. However, the asset acquisition and partial business transfer of C&A as well as the relevant contracts have involved directors, executives and major shareholders related to the Company. Such transaction is thus considered to be a connected transaction in accordance with the announcement of the Capital Market Supervisory Board no. Tor Jor. 21/2551 Re: Rules on the Connected Transactions and the Notification of the Securities and Exchange Commission Re: Disclosure of the Information and the Operation of Listed Companies concerning the Connected Transactions B.E ( the Notification of Connected Transaction"). The value of transaction is equal to % of the value of Net Tangible Assets ("NTA") of the Company according to the consolidated financial statements as of December 31, 2015 (NTA equals million Baht), which is higher than 20 million Baht or more than 3.00% of the value of net tangible assets of the Company. Therefore, the Company shall request approval from the general meeting of shareholders to enter the connected transaction with the votes of no less than 3 in 4 votes of the total votes of the shareholders present at the meeting with voting rights excluding the stakeholders and shall prepare a disclosure report of information of such transaction. 1.2 Date/Month/Year of the Transaction The Company shall enter into the transaction after the approval from the 2016 General Meeting of Shareholders which is scheduled to be held on April 29, 2016 and is subject to the approval of the SEC to offer new shares through private placement in order to pay C&A for the asset acquisition and partial business transfer within the specific time when the conditions precedent in the partial acquisition contract fulfilled in accordance with the details provided below in section 1.3. The Company expects to enter into the transaction within the 2nd quarter of Page 14/74

15 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 1.3 Connected persons and characteristic of relationship with the Company In regard to the asset acquisition and partial business transfer at this time, the Company shall enter into two main contracts: the Asset Acquisition and Partial Business Transfer Contract, and the Agreement of Lease of C&A s Factory Location Land (to be bought by Company), the contractual parties and the characteristics of relationship with the Company are as follows: 1.Asset Acquisition and Partial Business Transfer Contract Buyer : the Company Seller : C&A Relationship : Being a connected person of the Company, namely co-directors, executives and major shareholders as below: Connected persons 1. Mr. Nataphob Ratanasuwanthawee Relationship as a co-director, executive and co-major shareholder holding shares of C&A and the Company at 91.67% and 44.11% of paid-up capital of C&A and the Company respectively 2. Mr. Nataphong Ratanasuwanthawee as a co-director and co-shareholder holding shares of C&A and the Company at 8.33% of paid-up capital of C&A and holding 10 shares of the Company respectively 2. Agreement of Lease of Land with Buildings, two locations of plants of the business acquired 2.1 Agreement of Lease of Land with Buildings, which are the plant location in Pathum Thani province Lessee : the Company Lessor : S. C. Management Co., Ltd ("SCM"). Relationship : Being a related party to the Company, namely co-directors, executives and major shareholders as below: Connected persons Relationship 1. Mr. Nataphob Ratanasuwanthawee as a co-director and co-major shareholder holding shares of SCM and the Company at 99.35% and 44.11% of paid-up capital of SCM and the Company respectively 2. Mr. Nataphong Ratanasuwanthawee as a co-director and co-shareholder holding shares of SCM and the Company at 0.65% of paid-up capital of SCM and holding 10 shares of the Company 3. Mrs. Bongkot Rungkornpaisarn as a co-director holding 1 share of SCM and 10 shares of the Company Page 15/74

16 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons General condition of factory area in Pathumthani Province Ammonia Factory Building 2.2 Agreement of Lease of Land with Buildings, which are the plant location in Surat Thani Province Lessee : the Company Lessor : S. C. Carrier Co., Ltd. ("SCC") Relationship : Being a related party to the Company, namely co-directors, executives and major shareholders as below: Connected persons Relationship 1. Mr. Nataphob Ratanasuwanthawee as a co-director and co-major shareholder holding shares of SCC and the Company at 92.22% and 44.11% of paid-up capital of SCC and the Company respectively 2. Mr. Nataphong Ratanasuwanthawee as a co-director and co-shareholder holding shares of SCC and the Company at 7.78% of paid-up capital of SCC and holding 10 shares of the Company 3. Mrs. Bongkot Rungkornpaisarn as a co-director holding 1 share of SCC and 10 shares of the Company Page 16/74

17 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons General condition of factory area in Surat Thani Province (a) Ammonia Sale Contract Ammonia Factory Building Buyer : Seller : C&A Company Contract execution date: 1 July 2015 Relationship : Being a connected person of the Company, the same as the above-mentioned the Asset Acquisition and Partial Business Transfer Contract (the details of the Contract appeared in Clause hereof) (b) Logistics Contractor Contract Employer : The Company Contractor : S.C. Carrier Co., Ltd. ("SCC") Relationship : Being a connected person of the Company, the same as the above-mentioned land lease agreement Contract execution date: 1 July 2015 Page 17/74

18 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 1.4 General Characteristic and Size of the Transaction General Characteristic of the Transaction The Board of Directors Meeting of the Company has made a resolution to acquire the assets and partial business transfer from C&A in relation to the distribution business of chemical products - ammonia and ammonium hydroxide type, including the ownership of the property in relevant distribution business of chemical products - ammonia and ammonium hydroxide type, that is, the ownership of the property in all relevant distribution businesses of chemical products - ammonia and ammonium hydroxide type, which are, the agreement of lease of land and structures of 2 plants located in Pathum Thani Province and Surat Thani Province, the ammonia tanks and accessories, the customer base and trading agreements executed with the customers, such as the ammonia sale agreement, the loan of ammonia storage tanks and accessories and other contracts with all permits related to the business operations, with the total value of 282,896, Baht, inclusive of VAT. The payment for such assets and partial business transfer will be made by the issuance of new ordinary shares to specific investors (Private Placement: PP) of 1,768,106,235 shares at the price of Baht 0.16 per share (par value of Baht 0.16 per share), such price is not lower than 90% of the market price according to the related announcement of the Securities and Exchange Commission. Such asset acquisition and partial business transfer are the transaction with connected persons: co-directors and co-major shareholders. In this regard, the Company will enter into the contracts with the connected persons according to the details and the key point of the agreements as follows: The key point of the C&A Partial Business Transfer Contract: Subject 1. Asset acquisition and partial business transfer 2. Payment for the asset acquisition and partial business transfer 3. Prohibition of the business competition Details / conditions On the day of the business transfer, the Company shall acquire the assets and partial business transfer from C&A in relation to the distribution business of chemical products - ammonia and ammonium hydroxide type, that is, the ownership of the property in all relevant distribution businesses of chemical products - ammonia and ammonium hydroxide type, which are, the agreement of lease of land and structures of 2 plants located in Pathum Thani Province and Surat Thani Province, the ammonia tanks and accessories, the customer data with trading agreements such as the ammonia trade, the loan of ammonia cylinder and accessories and other contracts with all permits related to the operations, as specified in the partial business transfer contract. The company shall pay C&A for the asset acquisition and partial business transfer by the issuance of new ordinary shares. The Company shall pay C&A for the asset acquisition and partial business transfer at 282,896, Baht inclusive of VAT (the business value is equal to 264,389, Baht and VAT is 18,507, Baht) by the issuance of new ordinary shares of the Company and the allocation under private placement to C&A at 1,768,106,235 shares with par value of Baht 0.16 per share and the selling price of Baht 0.16 per share. C&A confirms and agrees to not allow the largest shareholders of C&A, Mr.Nataphob Ratanasuwanthawee and Mr.Nataphong Ratanasuwanthawee, to operate the distribution business of chemical products ammonia and ammonium hydroxide type, including any other Page 18/74

19 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Subject Details / conditions business related to the distribution of chemical products ammonia and ammonium hydroxide type, whether directly or indirectly, in competition with the Company s business of chemical products ammonia and ammonium hydroxide type. 4. Conditions Precedent The asset acquisition and partial business transfer from C&A shall be subject to the Conditions Precedent, as stated in the partial business transfer contract including the following key terms: The asset acquisition and partial business transfer from C&A to the Company has been approved by the Board of Directors and the Company s Shareholders Meeting. The increase in the Company s authorized capital of 282,896, Baht inclusive of VAT, from 1,076,894, Baht to 1,359,792, Baht and the allocation of new ordinary shares at 1,768,106,235 shares with par value of 0.16 Baht per share to C&A has been approved by the Company s Shareholders Meeting. The sale and partial business transfer from C&A to the Company has been approved by the Board of Directors and the C&A Shareholders Meeting. No Material Adverse Change in the business transferred from C&A from the date of entering into the contract until the date of business transfer. The SEC has given its approval to the Company for the offering of new shares as the payment for the asset acquisition and partial business transfer to C&A in accordance with the related announcement of the Capital Market Supervisory Board. 5. Processing time The transfer date shall take place within 7 business days from the date of the completion of Conditions Precedent as set forth in the partial business transfer contract or the exemption or any other date to be agreed by both parties. 6. Other conditions In case where the Company Shareholders Meeting resolved not to approve the purchase and the acceptance of partial business transfer from C&A, then, the Company and C&A agreed to terminate the ammonia sale contract between the Company and C&A dated 1 July 2015 and agreed to enter into the new contract containing the terms and conditions in line with the ammonia sale contract between the Company and C&A dated 15 June REMARK: After transferring the business to the Company, then, C&A s main properties would be the trade account receivables approximately in the amount of 88 Million Baht, the loan and the unpaid debt of the Group of Companies approximately in the amount of 427 Million Baht, and the liabilities would be the trade account payables approximately in the amount of 49 Million Baht, debt of financial institution approximately in the amount of 228 Million Baht, loan from the Group of Companies approximately in the amount of 12 Million Baht in accordance with the estimate of financial statements as of 31 December After transferring the business to the Company, then, C&A may operate its business in manner of Holding or operate other businesses or may wind up the company. Page 19/74

20 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Summary of General Information of C&A Business Operation C&A operated its main business in the manufacture and distribution of petrochemical products, which are, ammonia and Ammonium Hydroxide. Ammonia was the raw material used in various industries, for instance, rubber manufacture industry, chemical industry, metal industry, cool tissue, etc. Generally, ammonia was imported by the operators who used ammonia in their production process, for instance, chemical fertilizer factory. Partial ammonia was imported by the operators importing the ammonia for being distributed to industrial factories. The world s major manufacturers were China, India, USA and Indonesia. Moreover, C&A also operates other business of loan and lending money to other companies in Mr.Nattaphob Ratanasuwantawee s group. Currently, regarding the business of ammonia import and distribution in Thailand, the ammonia was mainly imported from Indonesia, Malaysia and Saudi Arabia. The 2 major distributors of ammonia in Thailand were Chemicals and Aromatics (Thailand) Co.,Ltd. (its market share was nearly 60%) and UNIGAS and Petrochemicals Public Company Limited (its market share was nearly 40%). In addition, there were some retail distributors who imported ammonia from Malaysia by motorcars to be distributed to the rubber manufacture factory in bordering provinces in the South of Thailand, etc. There was only few importers and distributors of ammonia because the application for operating this business is complicated. Moreover, the investment in such business needed high investment. Further, as ammonia market in Thailand was still small, therefore, there was no operator being interested to invest in the construction of ammonia manufacture factory. (see C&A additional information in the Attachment 2 hereof). The key point of the Land Lease Agreement with Buildings as the locations of two ammonia plants: 1. Agreement of Lease of Land with Buildings, - the plant location in Thanyabui District, Pathum Thani Province. Subject Agreement 1. Lessee The Company 2. Lessor SCM 3. Leased Property Land title deed no with buildings, located in Buengyeetho Sub-district, Thanyabui District, Pathum Thani Province 4. Leased Area 2,509 square meters 5. Rental charges 90,000 Baht per month 6. Rental period Land lease agreement with buildings for a period of three years. When the lease ends, the lessor agrees to renew the lease for another three years under the same terms and conditions in all respects, except for rental charges which the parties will renegotiate. 7. Other significant agreements The lessee can construct buildings on the leased property without prior consent of the lessor. Page 20/74

21 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Subject Agreement The lessee is allowed to construct any building on the leased land without the lessor prior consent. In the case where the building is permanently constructed by the lessee on the leased land, the lessee agreed that the building s ownership will belong to the lessor on the date which the lease agreement terminated. The lessee will deliver with the building to the lessor in the AS-IS condition on the date which the lease agreement terminated and the lessee has no duty to demolish such building. The lessor certifies that such land has not been under any obligation to reduce the lessee s right and the lessor agrees to allow the lessee to use a path in the lessor s land to access the public ways. The lessee has the right to terminate the lease with prior notice no less than 60 days, when appears that the lessee cannot use the leased property for the lessee s purpose or the lessee does not wish to rent the property any more. 2. Land lease agreement with buildings constructed thereon for the plant which is situated in Muang District, Suratthani Province Matter 1. Lessee The Company 2. Lessor SCC Terms 3. Leased property Land with title deed no , together with buildings constructed thereon, located at Beungkung Sub-district, Muang District, Suratthani Province Thanyaburi District, Patumthanee Province 4. Leased area 2, Square Metres 5. Lease payment Baht 60,000 per month 6. Lease term The lease will begin after the partial business transfer with the length at 3 years, provided that upon expiration of the term, the lessor agrees to renew the agreement for another 3 years under the same terms and conditions, except for the lease payment to be agreed by the parties. 7. Other key terms The lessee is allowed to construct any building on the leased land without prior consent from the lessor. In the case where the building is permanently constructed by the lessee on the leased land, the lessee has agreed that the building s ownership will belong to the lessor on the date which the lease agreement terminated. The lessee will deliver with the building to the lessor in the AS-IS condition on the date which the lease agreement terminated and the lessee has no duty to demolish such building. The lessor warrants that the leased land is free from any Page 21/74

22 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Matter Terms encumbrance which will deprive the lessee of its rights. The lessor also agrees to allow the lessee to use areas of the lessor as exit to public ways. The lessee has the right to terminate the agreement with at least 60 days prior notice in case the lessee can no longer use the leased land in accordance with the purpose of the lessee, or in case the lessee no longer wishes to lease the leased land. The 2 land leases have undergone the fair lease price appraisal, referenced by an independent price appraiser which is The Valuation and Consultant Company Limited according to the report number V&C59R-0199 and number V&C59R-0200 dated 25 February The objective is for the public and Mr. Smith Promsakha Na Sakolnakorn signed his name as the appraiser with approval from SEC. The method used was market comparison approach in searching for a fair price for land and land with building lease by comparing the prices to those of land and land with building lease price of 6 nearby areas in Patumthani. The fair price is calculated to be 96,622 baht per month. There are 4 areas used for comparison in Suratthani and the fair price is calculated to be 60,491 baht per month. The independent financial advisor is of the opinion that it was an appropriate appraisal method with enough places for comparison. The 2 lease prices are approximately the same with the appraised price, therefore they are appropriate. As for the appropriateness concerning other conditions, they are normal lease conditions which are appropriate. However, as for the part where the lease duration is for 3 years and the extension is for 3 years which lead to a 6 year lease and is quite short for the use as the company s plant. Nevertheless, the company already has a plan to renew the lease in advance before the lease is up and if the lessor will not allowed the lease renewal, the company will know in advance. Therefore, the company will have the time to find a new place as well as preparing all permits concerning the move of machines and equipment to the new plant because the plant in Suratthani only serves as a storage for tanks and some reserved ammonia for customers in the southern part of Thailand. As for the plant in Patumthani, the production there is only for diluting ammonia, not a complex production industry and most of the related production equipment include ammonia storage tanks and connecting trail pieces. Moving equipment to the new place can be carried out without too much difficulty. Therefore, this condition is acceptable. Moreover, the company has signed the contract with all connected persons including ammonia sale and transportation contract. The aforementioned contracts are part of and are related to this partial business transfer. The main part of the contract is as followed: A) Ammonia sale contract The company used to sign the name in the ammonia sale contract with C&A on 15 June Later, the company signed the new contract on 1 July 2015 according to the plan that the company will buy C&A business under the revival plan. The differences between the 2 contracts are put in summary in the table below. The change in the good s price and some conditions resulted in a higher income for the company even though the company has to be responsible for the transportation fee (according to the transportation contract). The company still has an increasing profit. However, as the company has revealed the resolution of the board of directors meeting, there are more conditions added to the partial business sale contract between the company and C&A. The conditions are set in the case where the shareholder meeting should decide to not approve of the sale and the partial business transfer from C&A. The company and C&A agreed to terminate the ammonia sale contract dated on 1 July 2015 and will Page 22/74

23 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons make a new contract with rules and conditions according to the ammonia sale contract dated on 15 June 2012 which may result in lower income and profit for the company. In the case where the shareholder meeting approved the sale and partial business transfer from C&A, the company and C&A will sign a contract on the partial business sale of C&A. The whole ammonia business will be transferred to be the company s and will end the C&A ammonia sale contract. Table of similarities and differences of the ammonia sale contract which has been changed Number Important lease details Sale contract dated 15 June 2012 Sale contract dated 1 July The parties NFC as a seller and C&A as a The same buyer 2 Minimum amount 18,000 per year 25,000 per year 3 Lease duration 5 years from the date of signing (ending on 14 June 2017) 5 years from the date of signing (ending on 31 July 2020) 4 Promise to extend contract 5 Delivering the goods to the buyer Extend at 5 year interval with prior notice and new price as agreed upon Delivering at the NFC bin 6 Findig transporters and their expenses C&A will find transporters and take care of the expenses 7 Ownership of the goods The goods will be under the buyer s ownership once they exist the bin 8 Goods price structure Using the price according to Cost Plus using US Dollar Price announcement Use the price as stated in the contract with no announcement of the new price The same, but use the price announced by NFC for each extension Marked as delivered when the goods arrive at the destination or if the buyer picks up the goods in person, the point of delivery is at the NFC bin NFC will find transporters and take care of the expenses The ownership is transferred to the buyer when the goods arrive at the destination or once they exist the bin (if the buyer pick up the goods themselves) Use the price as announced in advance using Thai Baht The price is announced by the distance and can be changed easily if the capital of NFC changes. Page 23/74

24 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 9 Guarantee that the agreement is followed 10 Reasons for breach of contract 11 Reimbursement for damages 12 Fine in the case where the money is unpaid 13 Reasons for end of contract L/G with budget of 9 million The same baht and the letter of guarantee by Mr. Natthapong Rattanasuwanthawee with no limit Should there be any damage, The same the other party will have to compensate within 30 days. If no compensation is received within that period of time, there will also be an additional interest of 15% per year If the goods are refused with The same unacceptable reasons or not being delivered, the fine will be 0.1% of the amount in that lot 15% The same 1) Use the rights to end the contract 2) The contract comes to an end 3) NFC cannot maintain their required license 4) The rights to land lease between IEAT and NFC ended 5) Both parties agree to end the contract 6) IEAT does not allow NFC to transport the goods through the pier 7) The development collaboration contract between IEAT and NFC ended The same 14 Other contract points They will be according to The same regular law In the case where the shareholders approve the sale and business transfer of C&A for the ammonia business this time, the aforementioned contract will be canceled because the company has received all ammonia business. However, if the shareholders do not approve, this will lead to the company cancelling the contract dated on 1 July 2015 and making a new contract with rules and conditions according to the contract dated on 15 June Page 24/74

25 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons B. The main parts of the transportation service contract Matter 1. Lessee The Company 2. Lessor SCC Terms 3. Nature of service Transport ammonia (NH 3 ) via trucks from the starting point, NFC Fertilizer plant in Rayong, to the destination agreed upon by the parties. The contractor agreed to find trucks in good and suitable condition for the task and with an appropriate size for the type and amount of goods that the employer has informed as well as a driver. 4. Transportation rate The employer agrees to pay the transportation fee to the contractor using the rate of baht/kilogram based on the goods weights and taking into account the distance of transportation with fee reference as set by the contractor* 5. Lease duration The duration is for 3 years from 1 August 2015 to 31 July In the case where before the end of the contract is reached, if a party wishes to renew the lease, that party will need to let the other party know in advance by at least 30 days. The parties will need to discuss the details again. *Note: The price is set the same for all customers which the independent financial advisor has already randomly tested. The income from ammonia transportation at approximately million baht yearly is calculated at 3.93% of income from SCC transportation Calculation for program size 1) The list of asset obtained and some part of business transfer The aforementioned list is held as the asset obtainment according to the notification of the capital market supervisory board at TJ. 20/2551 of the basis to important list making concerning asset obtainment or sale, dated 31 August There is also an edited version and a notification from the stock market supervisory board concerning the revealing and the practice of the registered company concerning the obtainment or sale of asset 2004 dated 29 October 2004 ( Notification of the list of obtainment or sale ). After calculation using all basis mentioned in the notification using the highest amount calculated from one of the basis comes to the list of 72% of the company s total asset according to the financial budget at 31 December 2015, according to the total of reimbursement where the list is more than 50% but less than 100%. This can be counted as type 1 list according to the notification of obtainment and sale. Therefore, the company must ask permission to do the list of asset obtainment and business transfer using the votes of shareholders where there must be at least 3 in 4 votes of all shareholders who attend the meeting and have the rights to vote. This will not count the portion of shareholders who may lose or gain from the decision. There will also be a reveal of the program s information as the asset obtainment calculation is detailed below: Page 25/74

26 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Financial information The company C&A List As of 31 December 2015 (in million of Baht) As of 31 December 2014 (in million of Baht) Total assets Intangible assets Total liabilities Minority shareholder equity NTA Net profit (loss) Program size calculation Calculation basis Calculation formula Size of program (%) 1. Basis for net tangible assets 2. Basis for net profit from working 3. Basis for the total value of repayment 4. Basis for the share value for asset payment (NTA of the business x obtained ratio) x 100 NTA of the registered company (Net profit of the business x obtained ratio) x 100 Net profit of the registered company Amount of money paid x 100 Total assets of the registered company Shares that the company use to pay for the assets x 100 The company s paid shares Notes 1/ Cannot be calculated because it is an asset purchase N.A. N.A. 1/ N.A. N.A. 1/ x , x 100 6, % 26.27% 2) Related programs In obtaining the assets and transferring of said business concerns dealing with people who are related: C&A and the company which Mr. Natthapop Ratnasuwantawee as director and major shareholders with Mr. Natthapong Ratnasuwantawee as a co-director. While doing the land lease transfer that has to be done by contract between SCM and SCC, Mr. Natthapop Ratnasuwantawee acts as director and major shareholders with Mr. Natthapong Ratnasuwantawee as a co-director. The aforementioned programs are related with the size of % of the company s NTA according to the total financial budget at 31 December 2016 (NTA equals to million baht) which is more than 20 million baht or more than 3% of the company s net tangible assets. Therefore, the company must ask for permission for any related program from the shareholder meeting with votes no less than 3 in 4 votes of all shareholders who attend the meeting and have the rights to vote. This will not count the portion of shareholders who may lose or gain from the decision. There will also be a reveal of the program s information. Page 26/74

27 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 1.5 Details of Acquired Assets Partial Business of C&A only the parts concerning the chemical product sale business such as ammonia and ammonium hydroxide or the ownership of the related assets used in the chemical product sale business such as ammonia and ammonium hydroxide which include 1) The land leases with buildings constructed thereon of the 2 ammonia packaging polants: (1) situated at 9/25 Moo 4, Buengyeetho Subdistrict, Aranburi District, Patumthani and (2) situated at 105/10 Moo 2 Surat-Paknam Road, Bangkung Subdistrict, Muengsuratthani District, Suratthani 2) Ammonia gas bin with related equipment which are the ammonia base and transportation pipe 3) Customer base and business contracts with the customers such as ammonia gas sale contract, ammonia gas bin and related equipment borrow agreement and other related contracts 4) Two plant license (RN. 4) and related license for relating business conduction In assessing said assets which are from the business transfer, only the assets which can be used are appraised. From the appraisal of the American Appraisal (Thailand) Limited according to the report number 2016/186 dated 25 February The objective is for the sake of the public with Mr. Bienvenido Rodolfo El Vergara signing his name as the main appraiser who has been approved by SEC and The Valuation and Consultant Company Limited according to the report number V&C59R V&C59R-0203 for a total of 5 reports dated 25 February The objective is for the sake of the public with Mr. Smith Promsakha Na Sakolnakorn signing his name as the main appraiser who has been approved by SEC. The two companies use the cost approach to deduct the depreciation asset which the independent financial advisor is of the opinion that it is a suitable appraisal method. However, the two companies different appraisal prices are from the hypothesis of new compensated capital value and the machine and equipment of different shelf life as shown in the following table: Shelf life New compensated capital Total appraised value (Baht) American Appraisal (Thailand) Company Limited 20 years, according to the table of machine shelf life, production support group (iron bin) Will be considered from the prices received from producers, sale representatives along with the company s information The Valuation and Consultant Company Limited 15 years (made in Thailand, Taiwan, China, Korea, India and other Asian countries) according to the table of shelf life of chemical industry and production machines Asking for prices from the sale representatives and producers 86,141,100 67,356,700 Page 27/74

28 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons The 2 appraisers used different information bases as references which led to different prices. The independent financial advisor saw to that the references of the 2 appraisers were according to the standards which depended on the different interpretations. Therefore, it is appropriate that the company should use the average of the 2 appraisers. The details to the assets which were appraised by the 2 appraisers can be concluded in the following table: Details of locations of the appraised properties Machinery and equipment Particulars of the appraised properties American Appraisal (Thailand) Co.,Ltd. Appraised value(baht) The Valuation and Consultant Co.,Ltd. -In SCC s land in Mueang Suratthani District, Suratthani Four 30-ton ammonia storage tanks with 7,626,000 5,270,000 Province equipment -In SCM s land in Thanyaburi District, Pathumthani Province Connecting equipment 26,694,500 20,376,700 -Ajinomoto Co.,Ltd. Mueang Kamphaengpetch District, Kamphaengpetch Province -NY Rubber Company Limited, Nongyai District, Cholburi Province -Thai Mac STR Company Limited, Klaeng District, Rayong Province -Thai Eastern Rubber Co.,Ltd., Nongyai District, Cholburi Province -Thai Rubber Latex Corporation (Thailand) Public Company Limited, Nongyai District, Cholburi Province Two 37-ton ammonia storage tanks with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment - Southland Latex Co.,Ltd., Klaeng District, Rayong Province One 12.5-ton ammonia storage tank with equipment -Shun Thai Rubber Gloves Industry Public Co.,Ltd., Klaeng One 12.5-ton ammonia storage tank with District, Rayong Province equipment 7,430,000 4,910, , , , , , , , , , , , ,000 - Sritong Rubber Latex Co.,Ltd. One 12.5-ton ammonia storage tank with Klaeng District, Rayong Province equipment 925, ,000 - SSDC (Tigertex) Co.,Ltd., Kabinburi District, Prachinburi One 12.5-ton ammonia storage tank with Province equipment 657, ,000 -Global Chemical Co.,Ltd., Mueang District, Samutprakarn One 12.5-ton ammonia storage tank with Province equipment 726, ,000 - Thai Rubber Latex Group Co.,Ltd., Mueang District,Rayong One 12.5-ton ammonia storage tank with Province equipment 580, ,000 -Thai Fermentation Industry Co., Ltd.), Banpong District, One 30-ton ammonia storage tanks with Ratchaburi Province equipment 1,238,000 1,220,000 -NFC Fertilizer Public Company Limited, Ten 4-ton ammonia stainless storage tanks with equipment and eight 15-ton ammonia 8,109,600 8,070,000 storage tanks with equipment -Hadsyn Rubber Company Limited, Hatyai District, Songkla One 12.5-ton ammonia storage tank with Province equipment 588, ,000 -Hadsyn Latex Company Limited, Sadao District, Songkla Province One 12.5-ton ammonia storage tank with equipment and One 25-ton ammonia storage 1,141,000 1,580,000 tanks with equipment Southland Latex Company Limited, Natawee District, Songkla Province One 12.5-ton ammonia storage tank with equipment One 15-ton ammonia storage 2,581,000 1,250,000 tanks with equipment B Tech Industry Company Limited, Rattaphum District, One 12.5-ton ammonia storage tank with Songkla Province equipment 660, ,000 Thaima Rubber Co.,Ltd., Bangklam District, Songkla Province One 12.5-ton ammonia storage tank with 588, ,000 Page 28/74

29 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Details of locations of the appraised properties Particulars of the appraised properties equipment -E Hup Huat Co.,Ltd., Sadao District, Songkla Province One 12.5-ton ammonia storage tank with equipment Fale Tech Company Limited, Rattaphum District, Songkla One 12.5-ton ammonia storage tank with Province equipment -Nam Hua Rubber Co.,Ltd., Sadao District, Songkla Province One 12.5-ton ammonia storage tank with equipment -Tat Win Co.,Ltd., Sadao District, Songkla Province One 12.5-ton ammonia storage tank with equipment and One 15-ton ammonia storage tanks with equipment S.K. Latex Co.,Ltd., Bangklam District, Songkla Province One 12.5-ton ammonia storage tank with equipment -Top Glove Technology Co.,Ltd., Sadao District, Songkla One 12.5-ton ammonia storage tank with Province equipment - Phatthalung Paratex Co.,Ltd., Pabon District, Phatthalung Province -Thai Rubber Latex Corporation (Thailand) Public Company Limited, Hatyai District, Songkla Province -Sricharoen Group Co.,Ltd., Nabon District, Nakon Srithammarat Province -Thai Lam Heng Rubber Industry Company Limited, Huayyod District, Trang Province -Sritrang Agro-Industry Company Limited, Mueang District, Trang Province -Num Rubber & Latex Co.,Ltd., Palien District, Trang Province -Trang Latex Co.,Ltd., Huayyod District, Trang Province -Thaimek STR Co.,Ltd., Mueang District, Krabi Province -Thai Rubber Latex Corporation (Thailand) Public Company Limited, Mueang District, Suratthani Province -Thai Rubber Latex Corporation (Thailand) Public Company Limited, Takuatung District, Pang-nga Province Wintech Company Limited, Rattaphum District, Songkla Province -Thungsong Srisawat Co.,Ltd., Palien District, Trang Province -Platinum Rubber Co.,Ltd.,Sikao District, Trang Province -Srithong Latex Co.,Ltd., Lamtub District, Krabi Province -Tachang Rubber Co.,Ltd., Tachang District, Suratthani Province American Appraisal (Thailand) Co.,Ltd. Appraised value(baht) The Valuation and Consultant Co.,Ltd. 610, , , , , ,000 2,581,000 1,270, , , , ,000 One 12.5-ton ammonia storage tank with equipment 657, ,000 One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 12.5-ton ammonia storage tank with equipment One 15-ton ammonia storage tanks with equipment One 15-ton ammonia storage tanks with equipment One 25-ton ammonia storage tanks with equipment One 25-ton ammonia storage tanks with equipment One 30-ton ammonia storage tanks with equipment One 30-ton ammonia storage tanks with equipment 602, , , , , , , , , , , , , , , ,000 1,919, ,000 1,919, ,000 1,257,000 1,010,000 1,371, ,000 2,787,000 1,530,000 2,230,000 3,210,000 Total 86,641,100 67,356,700 Note: The machines and equipment which are the assets that are appraised include the storage tank and equipment including load cell, base frame and pipe and valve as well as piping system (for further details, see attachment 5). As for intangible assets from the transferring this time include customer base and business contracts as well as other related contracts and licenses for plant administration and administration of Page 29/74

30 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons related business parts. They were appraised from the list of methods to merge the business between the company and C&A dated 29 February 2016 by the company s financial advisor, Finnaravi Consultant Company Limited, using the income approach multiperiod excess earnings method (MPEEM). The value is million baht. Value appraisal using MPEEM has the following formula and hypothesis: MPEEM formula = (Free Cash Flow Net Compensation of Revolving Fund Tangible Asset Compensation)/Tangible Assets Hypothesis 1) The company s intangible assets include the customer base and business contracts as well as other related contracts and licenses for plant administration and administration of related business parts 2) Net revolving fund excluding loans and loans between affiliated companies 3) Rates of compensation used in calculation Return of Net Working Capital - Capital of MOR 7.52% per year - Average net revolving fund million baht Return on Tangible Asset (PPE) - Average rate of compensation from the industry s PPE 10.64% per year (The business information about the warehouse and storing of other goods which have not been categorized at other place, with reference from Business Online Public Limited Company) - Asset value for conducting business million baht - WACC 11.63% per year Appraisal with MPEEM is intangible asset appraisal by assessing future cash flow value and subtracts that by the compensation from tangible assets and the compensation from the revolving fund. It can be counted as one appropriate way to assess intangible assets. However, the independent financial advisor has checked with the company and learned that the company only received a presentation as an appraisal report, not a full report. Therefore the independent financial advisor is of the opinion that it is not appropriate or sufficient as a document reference for asset appraisal. 1.6 Total value of reciprocations Total value of reciprocation in asset buying and partial business transfer from C&A of only the parts concerning the chemical product sale business such as ammonia and ammonium hydroxide as stated above comes to a total of 282,896, baht with VAT (consist of value of purchased business at 264,389, baht and VAT at 18,507, baht). The company agrees to pay by ordinary shares of the company at 0.16 baht per 1 share at a total of not over 1,768,106,235 shares. Page 30/74

31 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 1.7 The value of acquired assets The asset buying and partial business transfer of C&A of only the parts concerning the chemical product sale business such as ammonia and ammonium hydroxide which means the ownership of the assets used in the chemical product such as ammonia and ammonium hydroxide and every other related products business which is the lease of the land with the buildings constructed thereon of the 2 plants: one in Patumthani and one in Suratthani. This also includes the ammonia gas tanks as well as the related equipment, customer base, and business contracts with the customers such as ammonia gas sale contract, ammonia gas bin and related equipment borrow agreement and other related contracts along with all related license concerning the business at a tota; value of 282,896, baht with VAT. The asset buying and partial business transfer program at the highest is 72% of the company s total asset according to the total financial budget dated 31 December According to the total value of reciprocations at more than 50% but less than 100% can be counted as type 1 according to the notification of obtaining and selling. Moreover, the aforementioned programs are connected according to the notification of connected program. Each program is % of the company s net tangible asset at 31 December 2015 which is counted as a program that is more than 3% of the company s net tangible asset. 1.8 Basis for setting value of reciprocations The price of asset buying and partial business transfer of C&A of only the parts concerning the chemical product sale business such as ammonia and ammonium hydroxide as mentioned above is at the price that the buyer and seller has agreed upon at 282,896, baht with VAT (consist of value of purchased business at 264,389, baht and VAT at 18,507, baht). The reference is from the average appraisal of assets and related items using the depreciation asset method of 2 independent asset appraisers: American Appraisal (Thailand) Company Limited and The Valuation and Consultant Company Limited. They are appraisers who are approved by the SEC at the value of million baht and the appraisal of intangible assets uses the Income Approach Multiperiod Excess Earnings Method : MPEEM which is managed by the company s advisors at million baht (for further details please see 1.6 Details of acquired assets). 1.9 Expected benefits for the company 1) Create added value for the business in the part of importing and selling ammonia which can be expanded to a complete service for the customer and thus increase the competitive potential for the company as well as creating an opportunity to expand into other chemical products in the future 2) Create stability in long-termed business and increase the business financial strength 1.10 Utilized source of fund The company will provide ordinary shares and increase the private placement for C&A at no more than 1,768,106,235 shares with par value at 0.16 baht per share. The total value is 282,896, baht and the company will wait for the decision from the shareholder meetings of 2016 in order to proceed further on all related matters. Page 31/74

32 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 1.11 Conditions for the program In preparing to buy assets and accept partial business transfer from C&A of only the parts concerning the chemical product sale business such as ammonia and ammoniumhydroxide as well as paying compensation by ordinary shares to C&A as stated above. The company has to appoint independent financial advisors to provide opinions for the list making of asset obtainment and related matters. Moreover, a shareholder meeting has to be arranged to approve of the list making of asset obtainment and related matters and must be approved by at least 3 in 4 votes of all shareholders who attend the meeting and have the rights to vote. This will not count the portion of shareholders who may lose or gain from the decision. The company will make a partial business transfer agreement with C&A. Moreover, the previously stated list making will be under the conditions precedent stated in the partial business sale agreement as stated in 1.3 contract partners and their relationships with the company Effects on Issuance and offering the company s ordinary shares only to C&A which is a connected person 1) Effects on Control Dilution Control Dilution = 1-Q 0 / (Q 0 +Q 1 ) where Q 0 = original amount of ordinary shares Q 1 = new amount of ordinary shares Control Dilution = 1- [6,730,589,515 / (6,730,589, ,768,106,235)] PP style of capital increase Q 0 Q 1 Control Dilution 6,730,589,515 1,768,106, % 2) Effects on Price Dilution Price Dilution = P 0 - P 1 where P 0 = current market price P 1 = market price after sale offer P 0 = (P 0 x the number of shares already paid for) + (sale offer price x the number of shares that are offered for sale PP style) offered for sale PP style) PP style of capital increase (the number of shares already paid for + the number of shares that are P 0 P 1 Price Dilution None, because the current company shares are not for sale and are categorized under matters that need improvement 0.16 N.A. Page 32/74

33 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons The offer sale of shares this time has no effect on the price dilution because the company s share sale has been put on hold in the stock market for over 10 years. Therefore, there is no referenced price. 3) Effects on Earnings Dilution Earnings Dilution = (EPS 0 EPS 1 ) / EPS 0 where EPS 0 before sale offer = Net profit (loss) / Q 0 EPS 1 after sale offer = Net profit (loss) / Q 1 Earnings Dilution = ( ) / Earnings Dilution PP style of capital increase 20.80% 4) The change in shareholding structure after the list making After the PP style of ordinary share issue for asset payment and partial business transfer from connected persons, the company s shareholding structure is as followed: 1 Before the arrangement (on 18 March 2016) Number of shares (Share) % After the arrangement Number of shares (Share) % Name of shareholders The gathering of Ratnasuwantawee group 3,068,805, % 4,836,911, % 1.1 Mr. Natthapop Ratnasuwantawee 2,968,805, % 2,968,805, % 1.2 SSC 100,000, % 100,000, % C&A - 0.0% 1,768,106, % Inter Speck Global Company Limited 1,375,000, % 1,375,000, % Mr. Pittayakorn Naotawarn 750,000, % 750,000, % 4 Mr. Asia Pukhananant 220,000, % 220,000, % Mr. Prachaya 5 Sermsuksakulchai 220,000, % 220,000, % 6 Mr. Wichai Tongtang 200,000, % 200,000, % Mr. Achawee 7 Ungsuthamra 190,343, % 190,343, % 8 All Chatpimolkul family 243,166, % 243,166, % Mr. Direk Chatpimolkul 1.55% 1.22% Page 33/74

34 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Name of shareholders Before the arrangement (on 18 March 2016) After the arrangement Number of Number of shares (Share) % shares (Share) % 104,000, ,000,000 Mr. Somkiat Chatpimolkul 50,000, % 50,000, % Mr. Somchai Chatpimolkul 50,000, % 50,000, % 9 Ms. Apinya Chatpimolkul 39,166, % 39,166, % All Chaikulngamdee family 120,000, % 120,000, % 9.1 Mr. Tanit Chaikulngamdee 84,000, % 84,000, % 9.2 Mr. Wichai Chaikulngamdee 20,000, % 20,000, % 9.3 Mrs. Thapana Chaikulngamdee 16,000, % 16,000, % 10 Others 343,274, % 343,274, % Total 6,730,589, % 8,498,695, % From the foregoing table, the Independent Financial Advisor opines that change of ratio of shareholding in Nattaphop Rattanasuwantawee Group will lead to the increase of such ratio from 45.60% to 56.90%. Therefore, Nattaphop Rattanasuwantawee Group shall be obliged to propose to purchase from the shareholders all securities for business in conformity to the Announcement of SEC No. ThorJor. 12/2554 on rules, conditions and procedures for the Acquisition of Securities for Business. However, such proposal of Nattaphop Rattanasuwantawee Group will be managed after transaction and the Company s capital increase ordinary shares being registered with the Ministry of Commerce. Provided that the proposal to purchase all of the Company s securities in the price not less than the share prices receivable from this PP capital increase at 0.16 Baht per share for all 3,661,784,501 existing shares valued approximate million Baht. Consequently, there will be the risk that Nattaphop Rattanasuwantawee Group will have insufficient fund to make the proposal to purchase all assets in business of the other shareholders. Having audited the basic information, the independent financial advisor finds that Nattaphop Rattanasuwantawee Group by Mr. Nattaphop Suwanthawi held shares in several companies including 99.35% of SCM s shares equivalent to approximate 1,324,79 Million Baht according to the financial statement for year 2014 and 92.22% of SCC s shares equivalent to approximate 1, Million Baht according to the financial statement for year However, at any time to make a proposal to purchase assets from another business, the remaining cash and the funding pool of such proposal such as loan from financial institutes shall be considered. The information and financial status of Nattaphop Page 34/74

35 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Rattanasuwantawee Group as at the proposal of asset purchase shall be examined by the independent financial advisor of the proposer of such proposal. However, if Nattaphop Rattanasuwantawee Group cannot find the funding pool to make the proposal to purchase assets from other shareholders business, Nattaphop Rattanasuwantawee Group shall manage with deduction of its own shareholders equity to less than 50% of the Company s shares. Page 35/74

36 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 2. Transaction s validity and benefits 2.1 Transaction s validity and benefits for listed company As NFC is registered with SET and used to merely carry on business in relation to chemical fertilizer distribution and production, gypsum, sulfuric acid and ammonia distribution as well as services of sulfuric acid containers, after that the Company suffered business issues and required to be subject to reorganization plan according to 2003 verdict of the Central Bankruptcy Court. During the Company s reorganization process, the Company changed its business operation and earned its income merely derived from ammonia import and distribution for C&A and services of sulfuric acid containers. Under the reorganization process, the Company as the plan manager planned to partially purchase the assets and business of C&A in order to increase its income and improve the Company s operation, the Company and C&A therefore entered into a new ammonia sale and purchase agreement on 1 st July 2015, in substitution of the existing one, having the prices and some condition of the existing agreement materially changed which will increase the Company s profit from sale and will be favorable to the Company s future income (as reflected in the table of the difference between the original and changed ammonia sale and purchase agreement, in Clause General Nature of Transaction). However, on 3 rd November 2015, the Supreme Court ruled to dismiss the Company s reorganization plan resulting in the Company s giving up its reorganization plan and failed to complete the plan to purchase ammonia business from C&A under such reorganization plan. At present, the Company is under the process of urgent solving of share revocation within 31 st March 2016 according to the notification from SET. The Company has sought for opportunity and channel to increase its income and improve its business operation for the sake of the Company s future financial status. Consequently, the board of directors meeting No. 2/2016 was hold on 2 nd March 2016 as well as resolved to propose to the annual general meeting 2016 to consider and approve assets purchase and partial business transfer of C&A only in the part relevant to business of distribution of chemical products, ammonia and ammonium hydroxide categories, such as the ownership in the properties implemented in such business operation namely 2 ammonia separation factories in Pathumthani and Suratchathani Province under the factory site leases, ammonia containers and related equipments, customers, agreements awarded by the customers such as ammonia sale and purchase agreement, ammonia containers and related equipment rent agreement and other related agreements as well as all licenses in connection with such business operation, having 282,896, Baht total value inclusive of VAT, provided that the prices of assets and partial business transfer will be settled by issuance of 1,768,106,235 capital increase ordinary share to private placement at 0.16 Baht per price (0.16 Baht par value). Benefits The transaction will bring to the Company the following benefits: 1. Reduction of Dependence on Exclusive Customer The Company is licenses to import ammonium from overseas. The Company distributed the same to only one customer i.e. C&A and awarded C&A an agreement to appoint it as the sole and exclusive distributor, and C&A then sub-distributed to other customers. Acquisition of assets and partial business transfer in ammonia business from C&A will make the Company to be a direct distributor of all customers. 2. Reduction of mutual transactions/conflicts of interest between shareholders and executives At present, the Company sells ammonia to C&A by their directors and executives involved, therefore, such transaction may cause conflict of interest, however, after this transaction, the Page 36/74

37 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Company can sell ammonia to C&A s customers without any involving between the Company and C&A s customers. 3. Acquisition of assets, business and minor customers of C&A without cash payment In acquisition of assets and partial business transfer, the Company bears no obligation to source any cash or loan pool which is subject to interest, as the Company will pay the price of assets and business transfer by issuance of the Company s new shares. 4. Opportunity to earn higher profit margin In the former distribution of ammonia by distributing to C&A, the Company will earn profit from C&A whereby C&A can sell such ammonia and earn profit from its customers. After this transaction, the sale will be made without any middleman who will reduce partial profit and interest and will cause the Company to directly earn profit from C&A s customers. During , C&A s net profit less other incomes and corporate income tax from other incomes is Million Baht, Million Baht and Million Baht respectively (as reflected in C&A s profit loss statement, attachment No. 2). Thereby if the Company earns such profit from C&A s ammonia distribution will make the Company earn greater profit. 5. Increase of value in ammonia import business In the case where the Company expands the distribution and provides full services to end customers which will promote its business potential as well as increases its revenue and profit derived from ammonia sale, the Company s business value therefore is increased as well which is not caused by additional debt restructuring. 2.2 Risks from transaction 1. Risk of non-renewal of land and building leases entered into by the Company, SCC and SCM in future In this transaction, the Company is required to enter into lease agreements of land and building where the ammonia filling factories is located in Pathumthani Provice with SCM and in Suratthani Province with SCC having 3 years lease terms and renewable for 3 years totaling in 6 years lease term. Thereby, after the expiration of such lease term, if any lessor refuses to renew the lease, the Company will have problem to find a new site to operate its business which will affect the procurement and distribution to its customers. In order to prevent this problem, the Company has planned to negotiate such lease renewal in advance before each expiration, If the lessor refuses to renew the agreement, the Company will acknowledge the same in advance and have sufficient time to find a new site location and apply for all relevant licenses for relocation of all machines and equipment to the new site. As the factory in Suratthani is merely for depot and reservation of ammonia for distribution in southern region and the factory in Pathumthani is merely for dilution of ammonia which is not a complicate industry which requires mostly ammonia containers and connection devices thereof, The relocation of such devices is not difficult. 2. Risk from too long credit term of C&A s minor customers As the Company used to sell ammonia to only C&A, the Company will suffer risk from only one customer. After the transaction, the Company will directly distribute ammonia to minor customers. Thereby the Company will face several risks such as term of payment changing from 15 days period provided to C&A to days for minor customers transferred from C&A constituting a longer term of payment and longer receivable revolving period to the Company. However, having audited C&A s information, there is no problem of its receivables in terms of debt payment and no default payment. From 2015 (internal) financial statement, C&A s receivables are approximate Million Baht. In addition the Company earned more profit from business operation and improve the Company s business and increase the Company s working capital to be sufficient for such credit terms. Page 37/74

38 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 3. Risk from variation of ammonia price and rate of exchange Due to the fact that the price under the agreement dated 15 th June 2012 is fixed by combination of import cost and profit based on USD currency, there will be no effect to the Company from variation of ammonia price in global market, thereby the Company will definitely earn exact profit per ton with only risk from rate of exchange. After entering into an agreement on 1 st July 2015 and acquisition of assets and partial business transfer from C&A, the Company will face the risk form variation of ammonia import price and global market price which the Company may not be able to eliminate all risks of difference between global and domestic price of ammonia as well as the Company will face the risk of exchange rate as the price for C&A s customers is fixed in Baht currency The Company can prevent the risk from exchange rate by making forward contracts regardless of the ammonia price for C&A s customers fixed in Baht currency which subject to price adjustment on variation between ammonia global and domestic price. 4. Increased risk from transporting ammonia product to end users Difference between the business process of managing the sales agreement dated 15 th June and 1 st July 2015 for the process of delivering product may have the risk of product and delivery to the destination including the relevant expenditure will be the buyer s responsibility. When the product is moved from the Company s container due to the delivery as agreed in the agreement dated 15 th June 2012, the buyer has responsibility to receive the product at the Company s container during the agreement date on 1 st July Moreover, after the transaction of purchasing assets and partial business from C&A, the Company has responsibility to deliver the product to the destination according to the buyer s command and be responsible for transportation, relevant expenditures including risk of the product until arriving the destination. However, the Company has employed SCC to be responsible for transporting ammonia from the Company to the end user. In the employment agreement, SCC has made the insurance of damage for this part. 2.3 Comparison of pros and cons of transaction and non-transaction Transaction Pros 1. Reduction of Dependence on Exclusive Customer that C&A was originally the exclusive customer of the Company and changes to distribute to other minor customers of C&A directly. Acquisition of assets and business transfer from C&A make the Company an ammonia importer and the distributor to all minor customers varied from at present, the Company imports and distributes ammonia only to C&A, however, the sale proportion of only one major customer of C&A is equal to 62% of C&A total sale. 2. Increase of income form increase of profit proportion The Company earns increase of income due to no ammonia being sold by C&A but directly sold the former customers of C&A resulting in the profit C&A receives from customers will be of the Company instead, which will increase the Company s profit. 3. No obligation in loan sourcing for transaction In this acquisition of assets and business transfer, the Company has to pay no cash but settle by issuance of PP capital increase ordinary shares, therefore, the Company has no obligation in funding sourcing to pay the price of acquisition of assets and business transfer from C&A. 4. Reduction of future conflict of interest between relevant persons Page 38/74

39 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Prior to this transaction, the transactions made between the Company and C&A are interrelated, however if the Company acquires such assets and partial business transfer, in future, the Company can directly sell its products to C&A s customers being third party instead of C&A which will reduce such interrelated transactions as well as conflict of interest. Cons 1. The Company suffers risk from minor customers As the Company used to exclusively sell ammonia to C&A under which the Company has to suffer risk from only one customers, however after the transaction, the Company will directly sell ammonia to several minor customers which may cause the Company to suffer risks in several aspects such as risks of product payment and the longer payment period in which the original period for C&A is fixed at 15 days and the extended period for C&A minor customers are ranged days. It is regarded that the Company has the longer payment period and has the increased turnover period of account receivable including risks from survival of the business of many minor customers. However, from the review of account receivable s data of the Company, it is found that C&A has no any debtors who breached the settlement. Moreover, in the financial statement of 2015 (the internal financial statement) had the account receivable for million baht that the proportion decreased from previous years according to the inspected financial statement. For example, in 2013, the account receivable was approximately million baht and million baht in In addition, an increase of profit derived from the operations results in the Company s value improvement and leads to an increase of the Company s turnover capital to support an increase of account receivable. With regard to having many minor customers, although there is risk from business survival of an increase of customers, it is distributing risks to many customers substituting risk from the only one customers; C&A as at present. 2. Dilution Effect against the Company s shareholders The payment of assets and transferred business by issuance of 1,768,106,235 PP capital increase ordinary shares, at 0.16 Baht per share, will cause 20.80% of both Control dilution and earning dilution of the Company s existing shareholder s equity. However, the Company s share will have an increase of value derived from an increase of revenue the Company will receive from the acceptance of assets and business transfer. 3. New transaction with other connected persons After acquisition of partial business transfer, the Company will become the lesee of the lands on which the factories are located in Suratthani and Pathumthani Province with SCC and SCM respectively. Both SCC and SCM has major shareholders, directors and executives involving the Company. Therefore, the leases of factory sites are new transactions with new relevant persons instead of the leases entered into by the Company, SCC and SCM which are small transactions and the fair price can be easily inspected. 4. Increased expenditure of employing employees transferred from C&A For this acquisition of asset and business transfer, the Company has accepted some 12 employees from C&A. Therefore, the Company has an increased expenditure of such employees incurred and it is the Company s expenditure. However, such employees have knowledge and expertise in the business that the Company accepted transfer therefore the operation is more effective than in case the Company must recruit new employees who have no expertise of this job. Page 39/74

40 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Non-transaction Pros 1. No direct risk from C&A customers If the Company conducts no such transaction, the Company will directly suffer risk in ammonia distribution business from only C&A whereby C&A will take the risks from ammonia sale caused by minor customers. Such risks are namely risk in payment or survival of business operation of minor customers which will affect C&A s ammonia orders. 2. No Dilution Effect against the Company s shareholders Cons In the case of no such transaction, the Company will issue no PP capital increase ordinary share for payment of assets and business transferred which is constituted as a condition of the approval of the shareholders meeting. Therefore, no dilution effect will be caused against the Company s shareholders. 1. Loss of increase income from ammonia sale of C&A As the Company distributes ammonia to C&A constituting a sale by middleman, C&A may distribute such ammonia and earn other profits. Thereby, if the Company s shareholders do not approve this transaction, the Company will lose the opportunity to earn profit from increase of income without no profit shared to C&A. Risk for shares revocation from SET 2. The Company will lose the opportunity to be transferred of experienced and qualified staff from C&A In the acquisition of assets and partial business, the Company receives transfer of ammonia business for 12 related staffs from C&A. These personnel are experienced and qualified in such business of which the Company requires paying no severance pay because it is the expenditure which will be responsible by C&A. 3. Transactions with C&A which are the connected transaction If this time has no transaction, the Company still sells the product to the exclusive customer; C&A which is the connected transaction and it is difficult to inspect the appropriateness of sales price. 2.4 Comparison of pros and cons of transaction and non-transaction with connected persons Transaction with connected persons Pros 1. Immediate acquisition of assets, customers and qualified staff As per transfer and sale of assets and business in connection with ammonia distribution which are the exclusive business operated by C&A as well as admission of C&S s staff as the Company s personnel, the Company can continue its business immediately without no new business formation. Page 40/74

41 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Cons 1. Increase of the Company s shareholding structure who are the Company s connected persons and have an increase of shareholding proportion. The issuance of 1,768,106,235 PP capital increase ordinary shares for payment of assets and partially transferred business to C&A makes C&A to become the Company s shareholder holding 20.80% of shares as well as makes Mr. Natthaphop Rattanasuwanthawi to be partial and shareholder of the Company who holding majority of shares whether directly or indirectly which will increase from 45.60% to after the allotment of PP capital increase ordinary shares for payment of acquisition of assets and business transfer and cause such persons to be entitled to majority of the Company s votes. However, in the future, asking approval using the resolution of the committee or the shareholder meeting for transactions that such persons are related, they will have no any right of voting for approval. 2. Increased transaction made with connected companies with SCC and SCM Due to the fact that C&A s business operation involves with other companies i.e. - 60,000 Baht/month rent under the Lease of factory site in Suratthani Province from SCC - 9,000 Baht/month rent under the Lease of factory site in Pathumthani Province from SCC - Shipment services (commencing under the plan from August 2015) by SCC However, although there is an increase of transactions and connected persons, the value of such transactions has no significant value and will be devaluated to be less than all sale of ammonia exclusive for C&A (the Company s revenue derived from selling ammonia to C&A in 2015 with the value of approximately 600 million baht) and such transactions appropriateness become easier to inspect that the determination of sale price to C&A. Moreover, if they have been approved for the acceptance of business transfer from C&A, the land lease agreement of both locations and ammonia employment transportation which will be extended in the future must be considered and opined from the Inspection Committee because they are the connected transaction. No Transaction with connected persons Pros 1. Encouraging shareholders in making transaction There will be no doubt of shareholders in the case of making transaction with third party regarding interest transfer in comparison to transaction made with connected person. Therefore, shareholder will deem that the transaction made with third party will be truely undertaken in favor of business development and expansion. Cons 1. High cost for starting the business The option not to do transaction with relevant person will incur higher cost against the Company in respects of dealing with minor customers, staff recruitment, proposal of sale made to new customers, ammonia filling service which are required investment for the customers. All costs cannot be paid by issuance of the Company s shares. Page 41/74

42 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 2. Time-consuming attraction of customers As the Company has never directly sold any products to minor customers but sold only to C&A. If this acquisition of assets and business is not conducted and investment with other party is required, the Company may not conduct the same in a timely basis and may lose its customers to the only 2 present competitors and requires to manage time-consuming attraction of new customers. 3. The company has C&A which is the exclusive customer. If the Company does not do such transaction, the Company will distribute ammonia to C&A as the exclusive customer and C&A still runs the business with its own customers. Therefore, the opportunity that the company will have other customers besides C&A decreases. Consequently, if the Company wishes to carry on business of ammonia sale to minor customers, the most appropriate guideline is to do such connected transaction. As acquisition of assets and business of ammonia sale to minor customers which is the current business of C&A and employing some of C&A staff as the Company s will enable the Company to immediately carry on its business whereby the Company will be responsible for no compensation to those staff employed by the Company as C&A shall be responsible thereto. In addition, the Company will save considerable time to training its staff from the beginning which will be more favorable to the Company than doing transaction with any third party. Page 42/74

43 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 3. Appropriateness of transaction price and condition 3.1 Appropriateness of transaction price In order to consider the validity of acquisition of assets from C&A, the Company will purchase and receive partial business transfer from C&A only in the part relevant to business of ammonia and ammonium hydroxide distribution as well as receive the ownership in the properties implemented in such business, customers, commercial agreements awarded by customers and other relevant agreements and licenses in connection with the Company s business operation provided that in considerations of C&A s assets and partial business transfer, PP capital increase ordinary shares shall be issued to C&A. The independent financial advisor considers 6 share value appraisals pertaining to generally accepted financial theories consisting of: 1) Market Price Approach 2) Book Value Approach (BV) 3) Adjusted Book Value (ABV) 4) Price to Book Value Approach (P/BV) 5) Price to Earnings Approach (P/E) 6) Discounted Cash Flow Approach: DCF The information implemented in this appraisal received from the Company and C&A are namely audited financial statements and internal financial statements, financial estimations and hypotheses, report of C&A s asset appraisal, financial data from several websites and the information disclosed by the Company to the website of the Office of The Securities and Exchange Commission and of the Stock Exchange of Thailand ( The independent financial advisor considered the validity of the price of capital increase ordinary shares newly issued by the Company and the value of partial business transferred from C&A of which the details are as follows: NFC s appraisal of newly issued capital increase ordinary shares 1. Market Price Approach Market Price according to SEC s definition is weighted average price to book of ordinary shares in SET for at least 7 day but not exceeding 15 consecutive days before the day the share price is determined or the board of directors approves a transaction. However, due to the fact that NFC is frozen from sale in SET for considerable period, therefore, its market price cannot be implemented and the independent financial advisor cannot implement this approach to appraise the Company s share price. Page 43/74

44 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 2. Book Value Approach By this approach, the share price is calculated by implementation of shareholders equity under any financial statement divided by all paid-up shares. The independent financial advisor implements the Company s financial statement for year ending 31 st December 2015 audited by a certified public auditor in order to calculate the book value as follows: Unit: Million Baht Issued and paid-up capital 1, Accumulated loss (1,023.49) Capital margin from asset appraisal 0.25 Total shareholders equity of the Company Interests beyond control of subsidiary companies 0.72 Total shareholders equity All paid-up shares of NFC (Million Shares) 6, Book value per share (Baht) Remark: The par value of the Company s shares equals to 0.16 Baht/share Having calculated by this approach, the Company s ordinary share values Baht/share (rounding up from Baht/share) which is Baht less than the share price at 0.16 Baht/share equivalents to 94.94%. However, by this book value approach, the share value of the Company will be shown only according to the financial statement as at the appraisal date and reflect no potential of future business growth. 3. Adjusted Book Value This appraisal of share value can be done by having the Company s all assets less with commitments and contingent liabilities as appears in the financial statement for year ending on 31 st December 2015 audited by a certified public auditor, and adjust all transactions occurring after the closure of such financial statement or transactions affecting the book value to reflect the more accurate value, and then having shareholders equity divided by all paid-up shares of the Company. The independent financial advisor considered the financial statement and notes thereto for year ending on 31 st December 2015 and found no transaction required to be adjusted due to sufficient reserve and depreciation, the book value calculated by this approach are as follows: Page 44/74

45 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Unit: Million Baht Issued and paid-up capital 1, Accumulated loss (1,023.49) Capital margin from asset appraisal 0.25 Total shareholders equity of the Company Interests beyond control of subsidiary companies 0.72 Total shareholders equity Adjusted transaction Nil 0 Total shareholders equity All paid-up shares of NFC (Million Shares) 6, Book value per share (Baht) Remark: The par value of the Company s shares equals to 0.16 Baht/share Having calculated by this approach, the Company s ordinary share values Baht/share (rounding up from Baht/share) which is Baht less than the share price at 0.16 Baht/share equivalents to 94.94%. By this adjusted book value approach, the share value of the Company reflects no potential of future business growth; however, it is present basic value of the Company s shares. 4. Price to Book Value (P/BV) The share value appraisal by implementing book value per share (BVPS) for the lasted audited financial statement as at the day of value appraisal multiply by P/BV ratio of the registered companies with similar business operation to the Company. The criteria for selection of peer group are as follows: 1. Company carrying on business of chemical distribution similar to NFC 2. Registered with SET or MIA 3. Having market value, P/BV for the past one year which will be implemented by the independent financial advisor previously from 1 st March From the above criteria, there are 4 companies which meet such criteria namely: 1) Grattitude Infinite PCL ( GIFT ) carrying on business of procuring, developing and distributing specialty chemical for several industries. Page 45/74

46 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 2) Thai Central Chemical PCL ( TCCC ) carrying on business of manufacturing and distributing chemical fertilizers having its subsidiaries to distribute products implemented in several industries. 3) UAC Global PCL ( UAC ) carrying on business of importing, selling chemical implemented in fuel, distillation and petrochemical industries. 4) Union Petrochemical PCL ( UKEM ) carrying on business of importing and distributing chemical products inclusive of solvents. However, as UAC Global PCL ( UAC ) have much greater P/BV than other selected companies, the independent financial advisor did not refer UAC s information but implement those of other 3 companies for comparison and calculation. In this calculation of the Company's ordinary share value, the independent financial advisor implements the ratio of market value and book value from the last business day before the board of directors resolved to propose to the shareholders' meeting to consider and approve the acquisition of assets and partial business transfer from C&A to a one year period or from 27 February 2015 to 1 March 2016 of which the details of calculation are as follows: Securities 7 business days 14 business days Average previous P/BV Ratio 1 Month 3 Months 6 Months 1 year GIFT TCCC UKEM Average Price/Share (Baht) Source: SETSMART From the BVPS calculation of NFC (under 2nd approach), the book value equals to Baht/share, thereby appraisal of share value by multiplying book value with average of P/BV ratio of 3 SET registered companies with similar business operation, the Company's share value is in the range of Baht/share which is Baht/share or % less than the price of ordinary shares. 5. Price to Earnings Approach (P/E) In this approach, the share value is calculated by net profit per share from the latest audited financial statement as at the appraisal day, multiplying by average P/E ratio (PER) of SET registered companies with similar business operation, whereby the criteria of peer group selection are as follows: 1) Company carrying on business of chemical distribution similar to NFC 2) Registered with SET or MIA 3) Having market value, P/BV for the past one year which will be implemented by the independent financial advisor previously from 1 st March Page 46/74

47 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons From the above criteria, there are 4 companies which meet such criteria namely: 1) Grattitude Infinite PCL ( GIFT ) carrying on business of procuring, developing and distributing specialty chemical for several industries. 2) Thai Central Chemical PCL ( TCCC ) carrying on business of manufacturing and distributing chemical fertilizers having its subsidiaries to distribute products implemented in several industries. 3) UAC Global PCL ( UAC ) carrying on business of importing, selling chemical implemented in fuel, distillation and petrochemical industries. 4) Union Petrochemical PCL ( UKEM ) carrying on business of importing and distributing chemical products inclusive of solvents. However, as UAC Global PCL ( UAC ) have much greater P/E than other selected companies, the independent financial advisor did not refer UAC s information but implement those of other 3 companies for comparison and calculation. In this calculation of the Company's ordinary share value, the independent financial advisor implements ratio of market value and net profit from the last business day before the board of directors resolved to propose to the shareholders' meeting to consider and approve the acquisition of assets and partial business transfer from C&A to a one year period or from 27 th February 2015 to 1 st March 2016 of which the details of calculation are as follows: Average previous P/E Ratio Securities 7 business 14 business 1 Month 3 Months 6 Months 1 year days days GIFT TCCC UKEM Average Price/Share (Baht) Source: SETSMART From the Company's financial statement of the previous 12 years ending on 31st December 2015, the Company earns net profit equal to Baht/share. Thereby, in this calculation, the Company's net profit is multiplied by average of 3 SET registered companies with similar business operation. The share value is in the range of Baht/share which is Baht/share or 18.75%-25.00% higher than the price of ordinary shares. 6. Discounted Cash Flow Approach (DCF) In this calculation of the Company's ordinary share value, the Company's future business operation is concerned by calculation the present value of estimated cash flow for shareholders' equity with appropriate discounting rate. The net cash flow calculated by referring to the Company's financial estimation of next 5 years ( ) on going concern basis without any significant change and under the current economic condition and situation, then implementing the net cash flow to calculate the present Page 47/74

48 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons value by average weighted financial cost plus cash and liabilities. However, the independent financial advisor does not take the future effects of this transaction into the preparation of financial estimation. Description of significant hypotheses implemented in preparation of financial estimation The Company's financial estimation of next 5 years ( ) by referring to data and hypotheses received by the Company are namely financial statement, annual report, budget for year 2016 and the information disclosed to the public and interviewing of relevant executives and staff only for consideration and calculation of fair price in comparison to the proposed price of the Company's ordinary shares. If there by any effect from economic condition and other external factors against the Company's business operation as well as any significant change in the Company's internal business, the appraised value under these approach are subject to change as well. In formulation of the Company's financial hypotheses, the independent financial advisor focuses on conservative basis and to maintain the actual data. The independent financial advisor prepares the estimations by referring to ammonia sale and purchase agreement entered into by NFC and C&A on 15th June 2012 not the new agreement executed on 1st July 2015 due to the fact that the Company and C&A will agree to terminate the ammonia sale agreement dated 1st July 2015 and agree to make the new agreement with the requirements and conditions according to the ammonia sale agreement dated 15 th June As partial business operation in 2016 is resulted from the ammonia sale and purchase agreement dated 1st July 2015 which the ammonia sales prices and cost of some items were adjusted. 1. Estimated income The Company s income consists of chemical product sales, incomes from services and other incomes of which the hypotheses thereof are as follows: 1.1 Income derived from chemicals sales - Ammonia The independent financial advisor fixes the amount of ammonia sale to be equivalent to those in the financial statement for 2016 prepared by the Company. It is expected that the Company will be able to sell ammonia for 31,800 ton/year which increased from 2015 referring from data of sales volume in the first 2 months of 2016 and an increased sales proposal to the new customers who agree to increase sales and it is expected to start in May After 2017, the independent financial advisor fixed the rate of sale growth to increase for 1% per year throughout the estimated period pertaining to Gross Domestic Products ( GDP ) (Source : As most customers of the Company purchase ammonia products to be used for components of industry of monosodium glutamate and rubber tree production, which is expected the growth in such industrial sector according to the national gross economy and the independent financial advisor specifies the sale price of 2016 to be equivalent to average sale cost of 2015 at 17, Baht/ton plus profits according to the terms between NFC and C&A at US Dollars/ton calculated at the rate of exchange 36 Baht/US Dollars. - Sulfuric acid The independent financial advisor fixes the amount of sulfuric acid sale since 2016 to be equivalent to those in the financial statement for 2016 prepared by the Company. It is expected Page 48/74

49 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons that in 2016, there will be 215,600 ton/year sale, the independent financial specifies that after 2017 the rate of sale growth will increase 1% per year because the Company has the exclusive customer who purchases sulfuric acid. In the past, trading of customers was annually determined in advance resulting in uncertainty. Therefore, the independent financial advisor fixes the sales growth estimation according to the extension rate of national gross economy as the conservative basis and specifies the amount of ammonia sale to be equivalent to the average cost of sale in 2015 at 1, baht/ton as the Company s policy for selling sulfuric acid that the sales price is calculated according to the cost and the profit derives from the service charge of using containers and sulfuric acid transfer and growth determination of sales price for 0 percent because the sales price in the past had fluctuation and did not impact against the Company s profit as it was the sales using the cost price. - Gypsum As gypsum is the By-Product derived from the previous fertilizer production. The Company presently does not produce fertilizer and has no customer who especially purchases gypsum. Therefore, the Company has no certain revenue from selling gypsum so IFA did not estimate revenue from selling gypsum and the Company already reserved the elimination for the whole amount of gypsum. IFA considers that the revenue from selling gypsum is not calculated for this time has no impact against the estimation arrangement. - Chemical fertilizer IFA does not calculate the revenue from producing and selling chemical fertilizer for this time because the Company has not run the business of chemical fertilizer production and distribution for a long time. Moreover, the Company has no plan in near future to operate the chemical fertilizer production and distribution. Therefore, calculating the revenue that the Company has stopped operating the business for a long time does not reflect the fact. Basing on the assumption, the sales estimation can be arranged since 2016 comparing the actual information in as follows: Items (Unit : Million Baht) 2013A 2014A 2015A Revenue from selling ammonia Sales volume (ton) 23, , , Average sales price (Bath/ton) 19, , ,110.49* Tank maintenance cost+profit(bath/ton) Include in raw material cost Include in raw material cost Include in raw material cost Total sales price 19, , , Revenue from selling ammonia (Million Baht) Revenue from selling sulfuric acid Sales volume (ton) 212, , , Cost of sales (Bath/ton) 1, , , Revenue from selling sulfuric acid (Million Baht) Page 49/74

50 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons *Since 1 July 2015, the conditions in the contract has bee changed resulting in the structure of sales price does not conform to the proportion of the cost price and the determined tank and profit maintenance costs. Items (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Revenue from selling ammonia* Sales volume (ton) 31, , , , , Raw material cost (Bath/ton) 17, , , , , Tank maintenance cost+profit(bath/ton) 1, , , , , Total sales price 19, , , , , Revenue from selling ammonia (Million Baht) Sales volume (ton) 212, , , , , Cost of sales (Bath/ton) 1, , , , , Revenue from selling sulfuric acid (Million Baht) Revenue from providing service The revenue from providing service of the Company derives from changing a plant which did not manufacture any products to be a warehouse and service area. The major revenue derives from 4 types as follows: - Revenue from providing service of using Module Assembly Yard for 200 rai with a service charge of Million Baht 600,000 per rai per year referring from the Company s financial estimation. IFA determines the rental rate for 30 percent in 2016 and increases to 75 percent since 2017 and the rate has been remained throughout the estimation period because the Company anticipates that an amount of customers may increase referring from data that the Company informed that they negotiated with the customers who are interested in renting the serviced area. - Revenue from providing service for storage unit and yard (from SCM) with the service area of 50,000 square meters. IFA the service charge in 2016 for Baht 100 per square meter per month. The rental rate is equal to 30 percent or it is revenue from storage unit for Million Baht 1.5 or 1.8 per year. The Company presently agrees to use the area or it is approximately 30 percent of total area. IFA determines the Company to remain running the business with customers and there are probably new customers. Moreover, in 2016, revenue from providing service for storage unit and yard from other companies is Million Baht In the first half year of 2016, total revenue is Million Baht Revenue from providing service for transferring sulfuric referring from the service charge agreed with customers in 2016 is equal to Bath 117 per ton per year resulting from the service agreement of tank and sulfuric transfer between the Company and customers. Afterwards, it increases in the rate of 1.80 percent per year basing on the inflation rate (source: the economic report, Kasikorn Research Center on 1 February 2016). As the anticipated inflation rate demonstrates the change of product and service price level in the future. The revenue of providing service for tanks, it is equal to Million Baht 1.18 per month and the rate has been remained throughout the estimation period as agree with customers. Page 50/74

51 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons - Revenue from other service charges such as other service charges from related companies, revenue from using a harbor and others. IFA determines other revenues from service charge equal to assumption basing on the Company s financial estimation of Million Baht With regard to the revenue of harbor service, IFA determines the Company has right to receive revenue from this until September It is the par of other service charges due to the termination of agreement that the Industrial Estate Authority of Thailand requested to use the Company s harbor, which was calculated as revenue in 2016 of Million Baht Basing on the assumption, the sales estimation can be arranged since 2016 comparing the actual information in as follows: Items (Unit : Million Baht) 2013A 2014A 2015A Revenue from providing service of leasing Module Assembly Yard Revenue from providing service of storage unit (from SCM and other companies) Revenue from providing service for transferring sulfuric and service charge of tanks. Revenue from other service charges Total revenues from providing services Item (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Revenue from providing service of leasing Module Assembly Yard Revenue from providing service of storage unit (from SCM and other companies) Revenue from providing service for transferring sulfuric and service charge of tanks. Revenue from other service charges Total revenues from providing services Other revenues Other revenues of the Company derive from deposit interest at the interest rate of 1 percent per year of estimation based cash amount and the transaction which is equal to cash. 2. Estimation of cost of sales 2.1 Cost of sales of chemical products IFA determines the purchase volume of ammonia and sulfuric acid for selling since 2016 equal to the Company s sales volume throughout the estimation period because determining the purchase plan according to the sales volume to avoid outstanding products for the cost of goods sold, the sales price in 2016 is determined to be equal to the average price of cost of sales in Costs of ammonia and sulfuric acid are 17, and 1, Baht/ton respectively. Moreover, the price of cost of sales is determined the growth rate of 0 percent throughout the estimation Page 51/74

52 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons period because the sales price of ammonia has fluctuation against the volume of purchase demand and demand/supply in the global market and fluctuation according to the fluctuated oil price. Therefore IFA, estimates basing on the conservative basis. With regard to the cost of sulfuric acid, as it was sold as the costs without expecting profit from sales. On the other hand, the profit was calculated from the tank service charge and the change of price does not impact the Company s cash flow. Therefore, the growth of sales price is not determined. Basing on the assumption, the cost of sales estimation can be arranged since 2016 comparing the actual information in as follows: Item (Unit : Million Baht) 2013A 2014A 2015A Sales volume (ton) , , Cost of sales (Bath/ton) 18,838,68 18, , Cost from selling ammonia (Million Baht) Sales volume (ton) 133, , Cost of sales (Bath/ton) 1, , , Cost from selling sulfuric acid (Million Baht) Item (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Sales volume (ton) 31, , , , , Cost of sales (Bath/ton) 17, , , , , Cost from selling ammonia (Million Baht) Sales volume (ton) 212, , , , , Cost of sales (Bath/ton) 1, , , , , Cost from selling sulfuric acid (Million Baht) 2.2 Cost from providing services IFA determines the cost from providing services according to the budget of the year 2016 for Million Baht It is divided into 2 parts according to the Company s financial policy; the service cost in the proportion of and the remaining of is the cost of stopping fertilizer production that this business has not been presently operated. IFA determines the cost from providing services which excludes depreciation increases for 1.80 percent according to the inflation rate because the anticipated inflation rate demonstrates the change of product and service price level. Basing on the assumption, the cost of sales estimation can be arranged since 2016 comparing the actual information in as follows: Page 52/74

53 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Item (Unit : Million Baht) 2013A 2014A 2015A Cost of service (23.50 percent) Cost of stopping production (76.50 percent) Total costs from providing services Item (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Cost of service (23.50 percent) Cost of stopping production (76.50 percent) Total costs from providing services Estimation of Expenditure Expenditure of management Other expenditures consist of salary and welfare, costs of travel and transport, cost of utilities, etc. It is determined to increase for 1.80 percent per year according to the inflation rate throughput the estimation period and the wages for the financial and legal advisors are determined to be equal to the Company s budget of the year 2016 because the Company s has the items to uses opinions of experts from both financial and independent advisors as well as the Company s legal advisor resulting in the Company s increase of this expenditure. The wages for the management advisor and compensation for Committee referred from 2015 and do not increase throughout the estimation because this expenditure must depend on the action plan and the Company s policy. Basing on the assumption, the cost of sales estimation can be arranged since 2016 comparing the actual information in as follows: Item (Unit : Million Baht) 2013A 2014A 2015A Wage for financial advisor Wage for legal advisor Wage for management advisor Compensation for Committee Other management expenditures Item (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Wage for financial advisor Wage for legal advisor Wage for management advisor Compensation for Committee Other management expenditures Page 53/74

54 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 4. Corporate Income Tax It is referred from the 20 percent tax rate of net profit prior to calculated tax throughout the estimation period. However, as the Company has accounting deficit therefore the Company is able to use deficit as deduction for tax calculation. Thus, the Company has no obligation to pay for tax until Other financial ratios according to the ratio in Collection Period 9.06 days - Inventory Collection Period days - Settlement Period days 6. Estimation of Cash Flow Statement The estimation of cash flow statement according to the assumption of revenue structure, cost, and expenditure can be summarized as follows: Item (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Cash flow from operations Cash flow from investment activities Cash flow from financing activities Net Cash Flow to Firm (Free Cash Flow: FCFF) Company s financial estimation during is as follows: Item (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Total assets Total debts Shareholders allocation Total revenues 1, , , , , Total expenditures 1, , , , , Tax (8.56) Net Profit (Loss) Terminal Value Estimating the terminal value has the formula as follows: Terminal Value = ((FCFF 5 (1+g)) / (K e -g) By FCFF 5 = Net Cash Flow Value of the Business in the 5 th year (2020) g = Increase rate of cash flow per year of Going Concern is Page 54/74

55 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons determined to be equal to 0 percent. WACC = Weighted Average Cost of Capital is equal to 7.54 percent per year. Discount Rate The discount rate used to calculate the Net Present Value of Cash Flow derives from calculating Weighted Average Cost of Capital (WACC) according to the Company s capital structure. IFA has calculated WACC from the Company s Weighted Average Cost of Debt (K d ) and Cost of Capital (K e ) with details of discount rate estimation as follows: By WACC = K e *E/(D+E) + K d *(1-T)*D/(D+E) K e = Cost of Capital or Return Rate Required by Shareholders (R e ) K d = Cost of Debt or Company s Loan Interest Rate or 0 percent because NFC has no loan. T = Corporate Income Tax Rate or percent E = Allocation of Total Shareholders D = Debt Included Interest Cost of Capital (K e ) or Internal Return Rate Required by Shareholders (R e ) is calculated from Capital Asset Pricing Model(CAPM) as follows: K e (or R e ) = R f + β(r m - R f ) By Risk Free Rate (R f ) = Refer from the return rate of 25 year government bond or it is equal to 3.15 percent per year (information dated 1 March 2016) which is the return rate of long term government bond in accordance with the Company s appraisal assumes that it is the Going Concern Basis. Beta (β) = Refer from fluctuation between the daily return of the Stock Exchange of Thailand and the average return rate of 1) Gratitude Infinite Public Company Limited ( GIFT ), 2) Thai Central Chemical Public Company Limited ( TCCC ), and 3) Union Petrochemical Public Company Limited ( UKEM ) who has run the business of chemical distribution (retrospective value for 2 years until 1 March 2016), the period which probably reflected the return rate required by investors in the business from the Unleveraged Beta is equal to Market Risk (R m ) = The 25 year retrospective return rate from investment in the Stock Exchange of Thailand from which is equal to per year as it was the period which reflected the average return rate the most. According to the calculation as above equation, R e or cost of capital K e is equal to 7.54 percent per year and as the Company has no debt included interest, IFA uses the cost of capital to calculate WACC during the estimation period which is equal to 7.54 percent per year. Page 55/74

56 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Calculating by using above assumption can calculate NFC s cash flow as follows: Unit : Million Baht 2016F 2017F 2018F 2019F 2020F Free Cash Flow to Firm Terminal Value Net Present Value of Cash Flow Net Present Value of Terminal Value Net Present Value Cash on Hand Debt (338.53) Company s Value (Million Baht) From above data, when combining it with cash on hand and deducting with loan included interest on 31 December 2015, the Company has cash on hand for Million Baht and has no loan included interest. IFA can summarize the Company s newly issued ordinary share appraisal equal to Million Baht or Baht/Share. IFA makes the sensitivity analysis of share value by adjusting the value of growth rate of ammonia sales volume. IFA considers that the change of ammonia sales volume increase or decrease will impact the change of ordinary shares. However, the previous ammonia sales volume had the less change rate. Therefore, IFA adjusts the growth rate of ammonia sales volume by testing the range of 0-2 percent. The result of share appraisal by Discounted Cash Flow Approach can be summarized according to cases as follows: Ordinary Share Value Growth rate of ammonia sales volume (Baht/Share) 0.0% % % The result of sensitivity analysis by changing the growth rate of ammonia sales volume has the value of Million Baht or Baht/Share. However, the Company s appraisal is arranged by referring the assumption gained from the Company under the current economic state and situation. Therefore, if there is any change regarding the Company s business plans and policies or changed economic state resulting in significant difference from running the Company s current business changes from the estimation and determined variable, the determined estimation under above assumption will change significantly and probably impacts the change of Company s appraised value as well. With regard to another important change is the rental rate of storage unit and Module Assembly Yard which are the Company s service revenue and it is the part to increase the business s value as well. Page 56/74

57 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Table of summarizing and comparing appropriateness of appraisal result Appraisal Approach 1. Market Price Approach 2. Book Value Approach 3. Adjusted Book Value Approach 4. Price to Book Value Approach Appraised share value (Baht/Share) Sales Price(Baht/Share) Higher (Lower) than Sale Price of Ordinary share (Baht/Share) Higher (Lower) than Sale Price of Ordinary share (%) Appraised share value (Million Baht) N/A 0.16 N/A N/A N/A (0.1519) (94.94) (0.1519) (94.94) (0.1586) - (0.1587) (99.13) (99.19) Price to Earnings Approach 6. Discounted Cash Flow Approach , , (0.133) (0.136) (82.89) (84.71) Remark: Appraised Share value of PP (Million Baht) = Appraised Share value (Baht/share) x Newly Issued Shares IFA considered that the book value approach and adjusted book value approach are previous information which does not demonstrate potential of running the business in the future which is the business s value and the Company was stopped from shares trading, so there is no market price for comparison. With regard to compare the market price ratio against the Price to Book Value Approach and Price to Earnings is to compare the Company s status with the Securities Companies which reflects the value basing on investors perspective However, the Company s status and revenue in 2015 did not result from the Company s actual performance but from the debt restructuring and accounting reversal for Baht 508 million. Therefore, the acquired value may not show the business s actual value appropriately. IFA considered to choose Discounted Cash Flow Approach (DCF), which showed the status of company s more appropriate performance in the future with the calculation of the Company s ordinary share value of Baht/share. The value of share which is lower than of the newly issued is equal to Baht/share or lower than the sale price of ordinary share with the percentage of Therefore, selling the Company s share with the price of 0.16Baht/share, IFA considered that it is worthwhile and beneficial to the Shareholders and the Company. Page 57/74

58 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Summary of the ordinary share appraisal that the Company choose 1. Discounted Cash Flow Approach (DCF) This appraisal approach is calculation from the turnover estimation basing on assumptions gained from the Company, previous data that truly incurred and determined under the state of industry, economy, current situation and ability to make the Company s profit. In the future, it may be the most suitable approach and reflect the Company s actual value. Summary of the ordinary share appraisal that the Company did not choose 1. Market Price Approach IFA fails to appraise shares by this approach because the Company has been stopped from trading in the Stock Exchange of Thailand for more than 10 years so there is no current market price for reference. 2. Book Value Approach and Adjusted Book Value Approach The appraisal using the book value approach demonstrated the business s financial state of a specific period according to the financial statement report checked/verified by the Company s auditor. With regard to the adjusted book value approach, there is adjustment for items proposed in the financial statement which demonstrated the Company s financial status at a specific period as the current market value resulting in accuracy of the financial status. However, both approaches of ordinary share value calculation does not realize the business in the future, the company s competitiveness, tendency of economic state, and an overview of the Company s business in the future. Therefore, both approaches of share appraisal probably does not reflect the actual share price of the Going Concern business appropriately. 3. Price to Book Value Approach (P/BV) and Price to Earnings Approach (P/E) Calculating to appraise the ordinary shares by this approach is to calculate the average of P/BV Ratio and PER of the 3 registered companies which run similar businesses with BVPS and EPS respectively. To acquire the share price for each approach, IFA considered that the average ratio of P/BV and P/E derives from 3 chosen Peer Group and reasonably reflected the aspect of investors in the Stock Exchange of Thailand against the ordinary share price of the company group. However, as BVPS and EPS from the Company s latest financial statement on 31 December 2015 did not derive from the Company s actual operation but from the special items. The significant items are the items from debt restructuring and distribution disqualification of using a harbor, etc. In addition, both approaches of ordinary share value calculation does not realize the business in the future, the company s competitiveness, tendency of economic state, and an overview of the Company s business in the future. Therefore, both approaches of share appraisal probably do not reflect the actual share price of the Going Concern business appropriately. Page 58/74

59 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Asset Appraisal of the Partial Business Transfer from C&A The Company appraised the C&A s asset to be purchased. The 2 appraisers are American Appraisal (Thailand) Co., Ltd. and The Value & Consultants Co., Ltd. The appraisal is for the public purpose. However, the 2 listed major appraisers have been approved from the Securities and Exchange Commission and the average appraised price is Million Baht However, as such asset appraisal did not show the status of business acquisition. Although the asset appraisal was immaterial and the Company s IFA considered the value of Million Baht by MPEEM, which is the appraisal approach of the intangible assets. The Future Cash Flow Appraisal is deducted from the return gained from tangible assets and the return from capital turnover. It is regarded as one of appropriate appraisal approach of the intangible assets. However, the Company has been reported the brief appraisal as the presentation, not the full report. IFA considers that it is inappropriate and insufficient for referring as the documents of this asset appraisal (details of the appraisal appeared in No. 1.5 of the details of acquired assets). Thus, IFA could not express his opinion against such appraisal and considered that the asset appraisal and business acquisition should be performed likewise the new business which has the transferred asset of operation and mainly use the structure of sale price and cost from information of C&A s actual operation for appraisal. The Net Present Value Appraisal of such business bases on the acceptance of purchase with value added is Million Baht With regard to the appraisal of partial business, IFA considered worthwhileness of investment funds from factors as follows: 1) Net Present Value (NPV) of the partial business It is to calculate NPV of the partial business calculated from Cash Inflow and deducted by Cash Outflow. Then it is calculated as the NPV using the Discount Rate calculated from the Company s WACC. 2) Internal Rate of Return (IRR) of the partial business It is calculating to find IRR of the partial business using the Discount Rate resulting in NPV of the partial business is equal to 0 and consider value of all investment funds and future net cash flow to be obtained from the partial business transfer. 3) Payback Period of the partial business It is to calculate a project s break even for the period (year, month, day) that net cash flow from the partial business in the future will be equal to the investment funds or reach the payback period. After studying data and documents of the partial business transfer from C&A including other relevant data, IFA can summarize the opinion regarding appropriateness of the investment as follows: Important explanation of assumption used to arrange the financial budget The C&A s financial budget is arranged to be used for the period of 5 years during referring data and the assumption obtained from C&A such as financial statement, report of asset appraisal arranged by American Appraisal (Thailand) Company Limited and The Valuation & Consultants Company Limited, the report of studying the guideline of consolidation between NFC and C&A arranged by Finar V Consultants Company Limited and the NFC s budget of the year 2016 and Page 59/74

60 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons public data as well as interviewing the executives and relevant officers, however, for the purpose of considering to appraise the partial business that the Company accept transfer from C&A. If the economic state and other external factors impact operations of the partial business including the business state of partial business significantly changes from the determined assumption, the appraised value using this approach must change as well. With regard to arranging this assumption of financial budget of the partial business, IFA realizes the conservative basis and focuses on remaining data which ever incurred significantly. IFA arranges the estimation referring from the ammonia sales contract made on 15 June 2012 between NFC and C&A which was not the new one signed on 1 July If this transaction of asset purchase and acceptance of transfer from C&A had not been approved the transactions from the Shareholder Meeting, the new contract will be canceled and the new contract will be made using the terms and conditions same as the contract dated 15 June Therefore the assumption is determined likewise starting the new business and obtained only the asset for operations and some personnel referring the cost and expenditure for C&A s business incurred in 2015 as the database that IFA used to arrange the estimation. 1. Estimation of revenue The revenue structure of the partial business consists of revenue from selling 2 chemical products; ammonia and ammonium hydroxide with details of assumption as follows: Sales volume of ammonia and ammonium hydroxide Sales volume of ammonium hydroxide in 2016 which uses this assumption is referred from the sales volume of ammonium hydroxide in 2015 because the business of selling ammonium hydroxide has no increase of new customers significantly. Therefore, the estimation increases in the rate of 1.00 percent according to the GDP growth which is equal throughout the estimation period and it is expected that the industry which uses ammonium hydroxide will increase according to the gross national economy. The C&A s ammonia sales volume, as it is the NFC s single customer so the sales volume derives from the NFC s sales estimation referred from the data of actual sales in the first 2 months of 2016 and the increased offer with new customers which is expected to be distributed in May 2016, is deducted with the volume of ammonia that C&A produced ammonium hydroxide. It is made from diluted ammonia in the proportion of 25 percent or ammonia raw material volume purchased from NFC for 1 of 4 of such ammonium hydroxide sales volume with the growth rate of ammonia sales volume in equal to 1.00 percent per year according to the growth rate of GDP because most customers of C&A purchase ammonia products used as components of industries of monosodium glutamate and rubber tree production. The consumption growth of such industries according to the national gross economy can be summarized the revenue estimation since 2016 comparing the C&A s previous sales volume in the table as follows: Page 60/74

61 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Item (Unit : Ton) 2013A 2014A 2015A Sales volume of ammonium hydroxide 1, , , Sales volume of ammonia 23, , , Revenue (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Sales volume of ammonia purchased from NFC 30, , , , , Sales volume of ammonium hydroxide 4, , , , , Volume of ammonia used for ammonium hydroxide 1, , , , , production Sales volume of ammonia 30, , , , , Sales price of ammonia and ammonium hydroxide IFA refers the sales price of ammonia and ammonium hydroxide from the average sales price from the database of distribution at the beginning of 2016 which is equal to 7.90 Baht per kilo and Baht per kilo because the price of ammonia fluctuates according to the oil price and demand/supply in the global market which greatly fluctuates resulting in IFA estimates the growth rate of 0 percent per year throughout the estimation period according to the conservative basis which can be summarized as follows: Item (Unit : Baht/Kilo) 2013A 2014A 2015A 2016F- 2020F Sales price of ammonium hydroxide Sales price of ammonia Revenue from C&A s sales volume can be summarized the revenue estimation from sales comparing the previous data in the table as follows: Item (Unit : Ton) 2013A 2014A 2015A Revenue from selling ammonia Revenue from selling ammonium hydroxide Total revenue of selling chemicals Page 61/74

62 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Revenue (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Revenue from selling ammonia Revenue from selling ammonium hydroxide Total revenues from selling chemicals Estimation of Cost of Sales It consists of expenditure of purchasing products from NFC and transportation cost to customers. IFA refers expenditure of purchasing products from the estimation of NFC s ammonia sales price determined the sales price of 2016 is equal to the average cost of 2015 at 17, Baht/ton plus the profit agreed between NFC and C&A at US dollars calculated from the exchange rate of 36 Baht/US dollars. The actual calculation of transportation cost is referred from the oil price according to the distance per transporting weight. Therefore, IFA estimates the transportation cost referring from the actual expenditure according to the financial budget within 2015 with the average rate of 1,739 Bath/ton and the average estimation of transportation to reach the growth rate of 1.80 percent per year according to the inflation rate throughout the estimation period because the oil price which has fluctuation and the distance are the factor that cannot be estimated. The estimation of C&A s cost of sales comparing the previous actual cost can be summarized in the table as follows: Cost of sales (Unit : Million Baht) 2013A 2014A 2015A Cost of goods Transportation cost Total cost of sales Cost of sales (Unit : Million Baht) 2016F 2017F 2018F 2019F 2020F Cost of goods Transportation cost Total cost of sales Estimation of expenditure - Expenditure of sales It consists of expenditures of vehicle, entertainment, and others. IFA determines the proportion of 0.09 percent of revenue from selling ammonia referring expenditure of sales and deducting the profit and loss from the exchange rate from the C&A s financial statement within 2015 because this expenditure increases as the increased proportion and percentage and conforms to the proportion compared with the period of previous year. - Expenditure of management Page 62/74

63 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Employee Salary IFA refers data of expenditure for employee salary from the C&A s financial statement within There were total C&A s employees and total salary was equal to Million Baht 2.66 with the growth rate of 7.00 percent according to the policy of SC Group from interviewing C&A s Executives. Expenditures of utilities, rental, and insurance premium IFA refers data from expenditure of utilities, rental, and insurance premium in The utilities expenditure was 96,000 Baht/month, the rental expenditure referred from the rate according to the incurred financial statement within 2015 of Million Baht 1,17 and the insurance premium according to the financial statement within 2015 of 180,000 Baht/year and the estimation of growth rate of 1.80 percent according to the inflation rate because the anticipated inflation rate demonstrates the change of product and service price level in the future. Maintenance cost and other expenditures IFA refers the assumption of the estimation from the expenditure in 2015 by calculating the maintenance cost in the ratio of 0.50 percent of revenue from sales whereas the ratio of all other expenditures is 0.77 percent of revenue from sales throughout the estimation period. Data can be summarized as follows: Items Expenditure of sales Employee salary Utilities Rental cost Insurance premium Maintenance cost Other expenditures Assumption Ratio is 0.09 percent of sales volume. Growth rate is 7.00 percent per year. Growth rate is 1.80 percent per year. Growth rate is 1.80 percent per year. Growth rate is 1.80 percent per year. Ratio is 0.50 percent of sales volume. Ratio is 0.77 percent of sales volume. 4. Other financial ratios IFA, analyzes other financial ratios according to the C&A operation policy in 2015 because it demonstrates the C&A s current operations the most as follows: - Collection Period days - Inventory Collection Period 3.55 days Page 63/74

64 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons - Settlement Period 15 days Estimation of cash flow according to the assumption of revenue structure, cost, and expenditure can be summarized as follows: Unit : Million Baht 2016F 2017F 2018F 2019F 2020F Total revenue Total cost of sales (667.32) (674.00) (680.71) (687.52) (694.40) Expenditures of sales and management (16.07) (16.42) (16.80) (17.18) (17.58) Total expenditures (683.39) (690.42) (697.51) (704.70) (711.98) Profit prior to deduction of income tax and accrued interest Income Tax (15.06) (15.17) (15.28) (15.39) (15.50) Depreciation Cash flow from increased (decreased) operations* (79.07) (0.79) (0.80) (0.81) (0.82) Net Cash Flow (14.99) Financial estimation of the partial business during is as follows: Unit : Million Baht 2016F 2017F 2018F 2019F 2020F Total assets Total debts Shareholders allocation Total revenues Total expenditures (683.40) (690.42) (697.51) (704.70) (711.99) Financial capital Income Tax (15.06) (15.17) (15.28) (15.39) (15.50) Net Profit (Loss) Terminal Value Estimating the terminal value has the formula as follows: Terminal Value = ((Net Cash Flow 5 (1+g)) / (WACC-g) By Net Cash Flow 5 = Net Cash Flow Value of the Business in the 5 th year (2020) g = Increase rate of cash flow per year of Going Concern is determined to be equal to 0 percent. WACC = Weighted Average Cost of Capital (WACC) of NFC is equal to 7.54 percent per year. Page 64/74

65 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 6. Discount Rate The discount rate used to calculate the Net Present Value of Cash Flow derives from calculating Weighted Average Cost of Capital (WACC) according to the Company s capital structure. IFA has calculated WACC from the Company s Weighted Average Cost of Debt (K d ) and Cost of Capital (K e ) with details of discount rate estimation as follows: By WACC = K e *E/(D+E) + K d *(1-T)*D/(D+E) K e = Cost of Capital or Return Rate Required by Shareholders (R e ) K d = Cost of Debt or Company s Loan Interest Rate or 0 percent because NFC hasno loan. T = Corporate Income Tax Rate or 20 percent E = Allocation of Total Shareholders D = Debt Included Interest Cost of Capital (K e ) or Internal Return Rate Required by Shareholders (R e ) is calculatd from Capital Asset Pricing Model(CAPM) as follows: K e (or R e ) = R f + β(r m - R f ) By Risk Free Rate (R f ) = Refer from the return rate of 25 year government bond or it is equal to 3.15 percent per year (information dated 1 March 2016) which is the return rate of long term government bond in accordance with the Company s appraisal assumes that it is the Going Concern Basis. Beta (β) = Refer from fluctuation between the daily return of the Stock Exchange of Thailand and the average return rate of 1) Gratitude Infinite Public Company Limited ( GIFT ), 2) Thai Central Chemical Public Company Limited ( TCCC ), and 3) Union Petrochemical Public Company Limited ( UKEM ) who has run the business of chemical distribution (retrospective value of 2 years until 1 March 2016), the period which probably reflected the return rate required by investors in the business from the Unleveraged Beta is equal to Market Risk (R m ) = The 25 year retrospective return rate from investment in the Stock Exchange of Thailand from which is equal to per year as it was the period which reflected the average return rate the most. According to the calculation as above equation, R e or cost of capital K e is equal to 7.54 percent per year and as the Company has no debt included interest, IFA uses the cost of capital to calculate WACC during the estimation period which is equal to 7.54 percent per year. Page 65/74

66 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Calculating by using above assumption can calculate cash flow as follows: Unit : Million Baht 2016F 2017F 2018F 2019F 2020F Free Cash Flow to Firm (14.99) Terminal Value Net Present Value of Cash Flow (13.94) Net Present Value of Terminal Value Net Present Value Investment funds of the partial business (282.90) Net Present Value Sensitivity Analysis IFA makes the sensitivity analysis of share value by adjusting the value of growth rate of ammonia sales volume because the change of ammonia sales impacts the change of Net Present Value. However, from the previous data of ammonia sales volume had the low change rate therefore IFA tested the sensitivity of 0-2 percent. The result of share appraisal by Discounted Cash Flow Approach can be summarized according to cases as follows: Net Present Value of Growth rate of ammonia sales volume Cash Flow (Baht/Share) 0.0% % % The result of sensitivity analysis by changing the growth rate of ammonia sales volume has the net present value of cash flow of Million Baht Table of summarizing and comparing appropriateness of investmen by approaches for C&A Appraisal Approach 1. Net Present Value (NPV) of the partial business Million Baht 2. Internal Rate of Return (IRR) of the partial business 34.3 percent 3. Payback Period of the partial business 4 years, 10 months, 19 days IFA appraised worthwhileness from the investment by all 3 financial approaches; Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period. However, NPV of the partial business is equal to Million Baht which is more than 0 and the calculation of IRR from the investment is equal to 34.3 percent which has the value more than Weighted Average Cost of Capital (WACC) basing on the Company s capital structure used for purchasing this partial business of C&A, which is equal to 7.54 percent per year. Page 66/74

67 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons With regard to the compensation payment for the asset purchase and acceptance of the partial business transfer from C&A, the Company issued the newly issued ordinary shares for 1,768,106,235 shares with the value of Baht 0.16 each to support the allotment for the Private Placement (PP). Therefore, IFA compared NPV with the newly issued shares that the value is equal to 0.28 Baht/share and its value is higher than the newly issued shares for 0.12 Baht/share or percent. Therefore, IFA considered that the asset purchase and acceptance of the partial business transfer from C&A has reasonability in terms of the price and investment worthwhileness by appraising from the NPV of partial business that the company will obtain which is equal to Million Baht and IRR is equal to Million Baht 34.3 which is higher than the Company s financial cost and the Payback period is approximately 4 years, 10 months, 19 days. 3.2 Appropriateness of Conditions for the Transaction IFA considered obtained information and agreed that the Company will purchase the partial business transfer from C&A by issuing and offering the ordinary shares with the specific capital increase to C&A for the purpose of payment has appropriateness of conditions for the transaction because the Company has run the business of importing chemical in the type of ammonia. Therefore, the purchase of partial business of C&A will supplement the Company s business to be complete. The Company will be able to extend distribution and provide services to end users resulting good revenue and financial status in a long term including reduce the conflict of interest because the Company does not have to contact a middleman (C&A). The company can sell to customers directly. Moreover, the transaction payment by an increase of ordinary share will help the Company has no problem of liquidity that the Company must afford money to pay such transaction value. It will be beneficial to the Company and the future Shareholders although issuing and offering to sell such share will impact the proportion of shareholding and control dilution. It will impact and control dilution and EPS dilution at the level of percent. However, this transaction is regarded that it makes the worthwhile return for approval because the Company will have better turnover from the operation resulting from an increase of revene. In a long term, it will be a good result towards an increase of Company s ordinary shares and it will be beneficial to the Shareholders. The contract of sell and purchase of partial business of C&A specifies that C&A should agree and agree to manage the C&A major shareholders do not have to run the business of distributing chemical products in types of ammonia and ammonia hydroxide including other businesses relating to such distribution of chemical products directly and indirectly in the nature of competition with the Company s business. IFA considers that it is appropriate because it helps to protect the items which probably cause the conflict of interest. With regard to this transaction, if the Shareholder Meeting approves this company s transaction and capital increase as well as allotment of specific ordinary share increase and the party of sell and purchase of partial business of C&A has completely complied with the conditions, the Company must make the lease contract of land and premises which is the location of 2 plants. This is the rental from connected persons with the Company; SC Management Company Limited (The plant is located in Pathumthani Province) and SC Carrier Company Limited (The plant is located in Suratthani Province). IFA considered that such contract has the appropriate rental price and other conditions and it is beneficial to the Company in a long term. With regard to the rental price, although it is shorter than from the Company s action plan that the Company has prepared to extend the additional contract in the future and the guideline in case the contract is not extended, it is regarded that the management is arranged to the reasonable criteria. The rental price is appropriate as the market price and IFA considers appropriateness of the price referring from the report of independent appraiser; The Valuation & Consultant Company Page 67/74

68 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Limited. Moreover, the location of such plant is suitable for distributing the Company s products to customers. Apart from above contract, the Company has made the transportation service contract with SC Carrier Company Limited ( SCC ) with the period of 3 years starting from 1 August 2015 to 31 July The Company employed SCC to transport ammonia from the Company s plant in Rayong to the terminal as agreed and items of such contract are connected. IFA considers such items are appropriate by considering from the table of transportation rate that SCC charges from the Company and comparing with the table that SCC charges from other customers and SCC is has expertise for providing transportation for such product. The Board of Inspection Director will consider reasonability of the connected items in the future. However, this asset purchase and acceptance of transfer is the payment by issuing the ordinary shares with capital increase (PP) to the seller; C&A for 1,768,106,235 shares with the price of 0.16 Baht/share. Later, the capital increase changed the structure of holding the ordinary share resulting in the Group of Nuttaphob Suwantawee has an increase of shareholding proportion from percent to percent. Therefore, the Group of Nuttaphob Suwantawee has responsibility to arrange all securities purchase offers of the business from other shareholders. If Group of Nuttaphob Suwantawee has insufficient source of capital funds to arrange securities purchase offers of the business from other shareholders, they must reduce the proportion of holding shares to be lower than 50 percent. This issuance of the ordinary shares with capital increase (PP) results in the Group of Nuttaphob Suwantawee possesses the right of voting of the Company over a half of all voting rights of Company s all ordinary shares (In case there is sufficient source of capital fund for arranging the securities purchase offers of the business) or almost half of all voting rights of Company s all ordinary shares (in case of the tproportion of holding shares must be reduced to be lower than 50 percent). Page 68/74

69 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons 4.Summary of the Independent Financial Advisor s opinion against all transactions With regard to the appraisal of PP ordinary shares value issued by the Company for the purpose of asset payment and the acceptance of the partial business transfer of C&A, IFA has appraised appropriateness of the price of paid shares by the approaches as follows: Appraisal Approach 1. Market Price Approach 2. Book Value Approach 3. Adjusted Book Value Approach 4. Price to Book Value Approach Appraised share value (Baht/Share) Sales Price(Baht/Share) Higher (Lower) Sale Price of Ordinary share (Baht/Share) Higher (Lower) Sale Price of Ordinary share (%) Appraised PP share value* (Million Baht) N/A 0.16 N/A N/A N/A (0.1519) (94.94) (0.1519) (94.94) (0.1586) - (0.1587) (99.13) (99.19) Price to Earnings Approach 6. Discounted Cash Flow Approach (0.133) (0.136) (82.89) (84.71) Remark: Appraised Share value of PP (Million Baht) = Appraised Share value (Baht/share) x Newly Issued Shares IFA considered that the book value approach and adjusted book value approach are previous information which does not demonstrate potential of running the business in the future which is the business s value and the Company was stopped from share trading that there is no market price for comparison. With regard to compare the market price ratio against the Price to Book Value Approach and Price to Earnings is to compare the Company s status with the Securities Companies which reflects the value basing on investors perspective. However, the Company s status and revenue in 2015 did not result from the Company s actual performance but from the debt restructuring and accounting reversal for Baht 508 million. Therefore, the acquired value may not show the business s actual value appropriately. IFA considered to choose Discounted Cash Flow Approach (DCF) which shows the status of company s turnover in the future with the calculation rather than other approaches by calculating of the Company s ordinary share value of Baht/share. The value of share which is lower than of the newly issued is equal to Baht/share or lower than the sale price of ordinary share with the percentage of Therefore, selling the Company s share with the price of 0.16Baht/share, IFA considered that it is worthwhile and beneficial to the Shareholders and the Company. Page 69/74

70 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons The Company appraised the C&A s asset to be purchased. The 2 appraisers are American Appraisal (Thailand) Co., Ltd. and The Value & Consultants Co., Ltd. The appraisal is for the public purpose. However, the 2 listed major appraisers have been approved from the Securities and Exchange Commission and the average appraised price is Million Baht However, as such asset appraisal did not show the status of business acquisition. Although the asset appraisal was immaterial and the Company s IFA considered the value of Million Baht by MPEEM, it is the appraisal approach of the intangible assets. The Future Cash Flow Appraisal is deducted from the return gained from tangible assets and the return from capital turnover. It is regarded as one of appropriate appraisal approach of the intangible assets. However, the Company has been reported the brief appraisal as the presentation, not the full report. IFA considers that it is inappropriate and insufficient for referring as the documents of this asset appraisal (details of the appraisal appeared in No. 1 of the details of acquired assets). Thus, IFA considers that the asset appraisal and business acquisition should be performed likewise the new business which has the transferred asset of operation and mainly use the structure of sale price and cost from information of C&A s actual operation for appraisal. The Net Present Value Appraisal of such business basing on the acceptance of purchase with value added is Million Baht The result of business appraisal can be summarized as follows: Appraisal Approach 1. Net Present Value (NPV) of the partial business Million Baht 2. Internal Rate of Return (IRR) of the partial business 3. Payback Period of the partial business 34.3 percent 4 years, 10 months, 19 days IFA appraised worthwhileness from the investment sing all financial approaches; Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period. However, NPV of the partial business is equal to Million Baht which is more than 0 and the calculation of IRR is equal to 34.3 percent which has the value more than Weighted Average Cost of Capital (WACC) basing on the Company s capital structure used for purchasing this partial business of C&A, which is equal to 7.54 percent per year. With regard to the consideration payment for the asset purchase and acceptance of the partial business transfer from C&A, the Company will issue the newly issued ordinary shares for 1,768,106,235 shares with the value of Baht 0.16 each to support the allotment for the Private Placement (PP) or Million Baht IFA calculates NPV of the C&A s business at Million Baht which is higher than the value of paid shares for Million Baht or percent. Therefore, IFA considered that the asset purchase and acceptance of the partial business transfer from C&A has reasonability in terms of investment worthwhileness by calculating from NPV of the partcial business that the Company will accept transfer from C&A which is equal to Million Baht and IRR is equal to Million Baht 34.3 which is higher than the Company s financial cost with the Payback period of 4 years, 10 months, 19 days. Appropriateness of Conditions for the Transaction IFA considered obtained information and agreed that the Company will purchase the partial business transfer from C&A by issuing and offering the ordinary shares with the specific capital increase to C&A for the purpose of payment has appropriateness of conditions for the transaction because the Page 70/74

71 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Company has run the business of importing chemical in the type of ammonia. Therefore, the purchase of partial business of C&A will supplement the Company s business to be complete. The Company will be able to extend distribution and provide services to end users resulting good revenue and financial status in a long term and the conditions for the transactions specified in the contract that C&A and the major Shareholders are not allowed to run the business competition in the future including the conditions prior to the transactions. In addition, they should be permitted from the Shareholders prior to the transactions and from the Securities and Exchange Commission to issue the new shares for the purpose of payment and no material change of the business which is the appropriate condition. However, this asset purchase and acceptance of transfer is the payment by issuing the ordinary shares with capital increase (PP) to the seller; C&A for 1,768,106,235 shares with the price of 0.16 Baht/share. Later, the capital increase changed the structure of holding the ordinary share resulting in the Group of Nuttaphob Suwantawee has an increase of shareholding proportion from percent to percent. Therefore, the Group of Nuttaphob Suwantawee has respontibility to arrange all securities purchase offers of the business from other shareholders. If Group of Nuttaphob Suwantawee has insufficient source of capital funds to arrange securities purchase offers of the business from other shareholders, they must reduce the proportion of holding shares to be lower than 50 percent. This issuance of the ordinary shares with capital increase (PP) results in the Group of Nuttaphob Suwantawee possesses the right of voting of the Company over a half of all voting rights of Company s all ordinary shares (In case there is sufficient source of capital fund for arranging the securities purchase offers of the business) or almost half of all voting rights of Company s all ordinary shares (in case of the proportion of holding shares must be reduced to be lower than 50 percent). Reasonability and Interests of the Transactions As the Company has been in the scope of being delisted from the Stock Exchange of Thailand due to the current financial problem and operations and has the period of amendment until the 31 st March In previous period, the Company attempted to build the revenue and develop the Company s performance. Therefore, this transaction of asset purchase and the acceptance of partial business transfer C&A with the total transaction value of Million Baht 282,896, has been expected that it will have the good result towards the Company s financial status and operations in the future. In conclusion, the Company will obtain interests from the transactions as follows: Interests of the Transactions 1. Reduce dependency of a single customer for the business of selling ammonia and C&A is the Company s single customer. 2. Reduce inter-transactions / interest conflict with the Shareholders and the Executives because C&A is the connected person with the mutual Major Shareholders, Committees, and the Executives with the Company. 3. Acquire the asset and the business of C&A including retail customers without cash payment. 4. Increase the acquisition of profit margin from distributing products to customers directly without the mediator. 5. Create value added to the business in the part of ammonia import with complete operations. Page 71/74

72 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Summary of the risks of transactions: With regard to this transaction, IFA considers that the Shareholders must consider the risks of factors as follows: (details in the risk topic no. 2.2) 1. Risk in case SCC and SCM do not approve to extend the land lease contract to the Company after the expiry in the future and the Company may experience the problem of finding the place for doing their own business. The Company actually has the plan to negotiate and extend the forward lease contract with the lessor and as most machine and equipment are ammonia tanks, valves, and pipelines, if the Company fails to extend the lease contract, it is not difficult to move equipment for running the business to the new place. 2. Risk from providing the longer credit term to the C&A s retail customers because the Company will increase the turnover period of account receivable. However, from the previous financial data of the C&A s account receivable, the proportion reduces and has no breach of due payment which exceeds the due date. 3. Risk from the fluctuation of ammonia price, from the foreign exchange rate, from the change of ammonia sales contract and later the change of contract results in the Company has the risk from the fluctuation of ammonia price comparing with the state of ammonia price traded in overseas. It includes risk from the exchange rate from importing ammonia using the US dollar. However, with regard to preventing risk in terms of the fluctuation of ammonia price, the Company has determined the ammonia price which fluctuates according to the global price and has made the forward sales contract to prevent risk from the exchange rate. 4. Increased risk from transporting ammonia to end-users. With regard to the products and expenditure, the Company takes responsibility. The Company has prevented this risk by making the contract to employ SCC to arrange the insurance and take liability against the damage of transportation. Summary of advantages and disadvantages of transactions and non transactions as follows: Advantages and disadvantages of transactions Advantages of transactions Disadvantages of transactions 1. Reduce dependency of a single customer. 1. The Company obtains more risk from There was originally only C&A and it was retail customers from payment and the changed to distribute products to other longer credit term including risk of business C&A s retail customers directly. survival of the C&A s retail customers. 2. Increase revenue from profit proportion when the Company obtains the profit from the C&A s retail customers instead. 2. The Company s Shareholders will cause Dilution Effect in the rate of percent. 3. No burden to find a source of money for the transactions because it is issuance of new shares for value payment. 4. Reduce interest conflict with connected persons in the future. In particular, C&A is the single one who purchases ammonia. 3. The new transactions are incurred with connected persons to SCC and SCM. 4. An increase of expenditure of employing employees transferred from C&A. Page 72/74

73 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons Advantages and disadvantages of non transactions Advantages of non transactions Disadvantages of non transactions 1. The Company does not directly bear risk 1. Lose an opportunity to receive profit caused from C&A s customers. from C&A selling ammonia. 2. The Company s Shareholders will not 2. The Company loses the opportunity to cause Dilution Effect. be transferred the experienced team Risk from C&A. 3. The new transactions are incurred with connected persons to SCC and SCM. Summary of advantages and disadvantages of transactions and non-transactions with connected persons as follows: Advantages and disadvantages of transactions with connected persons Advantages of transactions with connected Disadvantages of transactions with connected persons persons 1. Forthwith acquire asset for doing the business, customer base, and skillful employees. 1. Change the Company s shareholding structure which is the Company s connected persons who have the increase of holding shares proportion. 2. Transactions between other related Companies. Advantages and disadvantages of non transactions with connected persons Advantages of non transactions with connected Disadvantages of non-transactions with persons connected persons 1. Increase more confidence to the Shareholders 1. A lot of money for starting the business is for transactions. required. 2. Spend much time to build customer base. 3. The Company still has C&A who is the only one connected person. Therefore, if the Company would like to run the business of trading ammonia to retail customers, the most appropriate guideline is to do such related transactions. As it is the asset selling transfer and distributing the business of ammonia to retail customers which is the specific transaction that C&A already run and accepted some employees of C&A as the Company s employees, the Company can run the business forthwith without paying compensation to those employees whom the Company accepted to work for because C&A took this responsibility instead. In addition, the Company does not waste time to teach employees start learning new business and this will have benefits more than doing transactions with the third party. Page 73/74

74 Report of Independent Financial Advisor s Opinion in relation to the Acquisition of Assets by mean of Purchase and Acceptance of Transfer of Partial Business from the Connected Persons In conclusion, when comparing interests, advantages, and disadvantages including reasonability of transactions, IFA considers that such transaction will improve the Company s revenue and operations. Moreover, the appraisal value of shares issued for price payment of the asset value and acceptance of business transfer is Baht/share which is lower than the price of share used for payment is 0.16 Baht/share. Therefore, the Company received the interest from issuing shares for such price payment and the specific value of the ammonia business gained from C&A is Million Baht which is higher than the paid value for Million Baht , which it regarded as the large amount. Therefore, the Company receives the increase from this business purchase. Therefore, such transaction has reasonability and it is beneficial to the Company and the Shareholders in terms of appropriateness of the price and conditions for the transactions as mentioned above. This is considered that the Shareholders should approve the asset acquisition and the asset purchase and the acceptance of partial business from such connected persons. However, the Shareholders should study information in this IFA s opinion report, all attached documents including documents attached to this meeting invitation letter for considering and deciding to make resolution. Considering such asset distribution significantly depends on the Shareholders discretion and decision. However, KTBS, on behalf of the IFA, certifies that above opinions have been carefully considered in accordance with the profession standard and mainly regard the Shareholders interest. Independent Financial Advisor KTB Securities (Thailand) Co., Ltd.... (Mr.Chong Kyu Kim) Authorized signatory... (Mr. Anan Numbunnam) Operation Controller Page 74/74

75 ATTACHMENT 1 Overview of the Business Operation and the Performance of NFC Fertilizer Public Company Limited (Source : Annual Registration Statement (Report form 56-1) of 2014 and the Company s Financial Statement) General Information Company s Name : English name : Abbreviation : Company s registration number : Registered capital : Paid-up capital : Business category : Head office location : NFC Fertilizer Public Company Limited NFC Fertilizer Public Company Limited NFC (previous Reg.No. was Bor.Mor.Jor.572) 1, Million Baht 1, Million Baht Tel.No. : Factory Location : Tel.No. : Website : To import the raw material and the chemical products used in the chemical industry. Currently, the Company is categorized as the listed company under the business rehabilitation. No.88, SC Group Building, 4 th Floor, the Parkland Road (Bangna-Trad Km.5), Bangna Sub-district, Bangna District, BaNGKOK. Mabtaput Industrial Estate, No.2, I-Song Road, Mabtaput Sub-district, Mueng District, Rayong Province Policy and Business Operation Overview Vision, Objective, Goal or Strategy of Operation of the Company Previously, the Company manufactured the fertilizer from basic raw material, then, the Company imported the fertilizer to be sold and to manufacture Bulk Blending Fertilizer. Moreover, the Company was the importer of Ammonia and Sulfuric Acid to be sold in the country. The Company had its strategy of operation according to the business plan as follows:- 1. To manufacture and sell the finished fertilizer; 2. To render service of warehouse; 3. To sell Ammonia and Sulfuric Acid including to render service of product storage tanks; 4. To sell gypsum; 5. To render the logistics service and the warehouse of liquid goods; 6. To operate the service of Module Assembly Yard Important Change and Development (year ) During the past 3 years, the Company had its important change and development relating to its shareholding structure, management and business operation as follows:- -On 12 March 2013, Stock Exchange of Thailand (SET) announced that NFC was a company in Non- Performing Group (NPG), Phase 3, which was due on 12 March In addition, the Company sought for the extension to solve the cause of Delisting for another 1 year in accordance with the regulation of SET; Page 1/16

76 -On 1 November 2013, Industrial Estate Authority of Thailand had temporarily extended the period of time for the customers of Rayong Bulk Terminal Co.,Ltd. (RBT) to use the service of Company s pier service for another 1 year in order to solve the problem on the congestion of goods ship at Map Ta Phut Industrial Port in accordance with government policy, ended on 1 November On 29 January 2014, SET notified the SET s resolution to take action against the listed companies whose their operation or financial status which may be delisted from SET at Phase 3. SET notified the Company to submit its request for not being delisted from SET or the request for extension of time for business rehabilitation. Accordingly, the Company would to rectify the cause of Delisting as the case may be. In this regard, the Company must submit the annual financial statements of 2013 having been audited by the Certified Public Accountant (CPA) including the explanation or any supporting documents or being beneficial to the SET s consideration on such request of the Company within 31 March On 27 March 2014, the Company submitted the letter seeking for extension of time for business rehabilitation in order to rectify the cause of Delisting. In this regard, the Company must submit the report of Certified Public Accountant (CPA) including the annual financial statements of the Company and its subsidiary companies for the year whose accounting period ended on 31 December 2013 and business rehabilitation. The Company notified SET that it was unable to take action to have the qualification not to be delisted according to the regulations as prescribed by SET within 31 March But the Company had the complete qualification according to the regulations seeking for the extension of time for business rehabilitation. -On 4 April 2014, SET sent the letter disapproving the extension of time for business rehabilitation and the delisting of Company s ordinary shares from the listed company. SET had the opinion that, the Company s consolidated financial statements of 2013, ended on 31 March 2013, which has been audited by CPA, still showed the share s equity being lower than zero and also showed the net loss of the Company s operation. Moreover, the Company did not clearly proposed the guideline for rectifying the cause of delisting, accordingly, the Company lacked the complete qualification for extension of time for rectifying the cause of delisting. Therefore, SET proposed SEC to consider and to further delist Company s ordinary shares from the listed company. If the Company had any additional fact, document or evidence, which may affect the SET s action, the Company must give explanation and submit the document or evidence, to SET S Board to support the consideration on this matter. -On 22 April 2014, the Company submitted the letter seeking for extension of time for business rehabilitation in order to rectify the cause of Delisting. The Company explained and gave the additional information regarding the cause which the Company was unable to take action in order to have the qualification to successfully rectify the cause of delisting in line with the SET s prescribed regulation. The Company had fully put its best effort to successfully rectify the cause of delisting in line with the SET s prescribed regulation, but there were other external factors other than the above-mentioned factors beyond its control. As a result, the Company suffered the loss of operation and the share s equity (according to the Company s consolidated financial statements of 2013, ended on 31 March 2013) was lower than zero. However, the Company expected that it would be able to dispose its right of land lease for some projects ad it would have profit from the debt restructuring according to the business rehabilitation plan. Accordingly, the share s equity in the Company s consolidated financial statements of 2014, approximately in 3rd quarter, would be in positive number. Therefore, SET was requested to consider and approve the period of business rehabilitation for another 1 year in order to rectify the cause of delisting. -On 6 June 2014, SET sent the letter approving the extension of time for rectifying the cause of delisting of Company s ordinary shares from the listed company. SET had the opinion that the Company had the clear guideline and progress for rectifying the cause of delisting of Company s ordinary shares and also had the intention and the continuous effort to rectify the cause of delisting. Thus, SET deemed that it was appropriate to give the time for rectifying the cause of delisting until 31 March The Company must prepare and submit the report of progress for rectifying the cause of delisting and must also submit the financial statements to SET every quarter and to submit the request for not being delisted and must submit the financial statements of 2014 having been audited by the Certified Public Accountant (CPA), including the explanation or document, information supporting or beneficial to the consideration within 31 March On 19 June 2014, the Company submitted the letter notifying SET to acknowledge SET s approval of time to the Company in rectifying the cause of delisting of Company s ordinary shares from the listed company. -On 15 October 2014, Industrial Estate Authority of Thailand had temporarily extended the period of time for the customers of Rayong Bulk Terminal Co.,Ltd. (RBT) to use the service of Company s port for Page 2/16

77 another 1 year in order to solve the problem on the congestion of goods ship at Map Ta Phut Industrial Port in accordance with government policy, ended on 30 September On 22 January 2015, SET sent the letter notifying SET s operation against the listed companies whose their operation or financial status which may be delisted from SET and notified the Company that it was nearly due period of time to rectify the cause of delisting. The Company was requested to submit its request for not being delisted from SET and to give reason or supportive information showing that Company s operation and operating result had no cause of delisting from SET In this regard, the Company must submit the annual financial statements of 2014 having been audited by the Certified Public Accountant (CPA) for the SET s consideration within 31 March On 18 February 2015, the Company also submitted the request for operating the business of Tank Farm to Industrial Estate Authority of Thailand. -On 23 February 2015, the Company also submitted the request for operating the business of Module Assembly Yard to Industrial Estate Authority of Thailand. -On 23 March 2015 and 17 April 2015, the Company as the executive of business rehabilitation plan, submitted the request for amendment of business rehabilitation for another 1 year and for operating the business of Module Assembly Yard. - On 23 and 30 March 2015, the Company submitted the letter seeking for extension of time for rectifying the cause of Delisting for another 1 year because the Company submitted the request to Central Bankruptcy Court to extend the period of time of business rehabilitation plan for another 1 year. Accordingly, the Company requested for extension of time in order to rectify the cause of delisting for another 1 year until 31 March 2016 in order to be in line with business rehabilitation plan and action plan of the Company. -On 8 April 2015, SET sent the letter notifying SETs action against the listed companies whose their operation or financial status which may be delisted from SET and SET gave the time for rectifying the cause delisting. SET notified the Company that that the Company s information provided according to the letter dated 23 March and 30 March was unclear, the letter did not show the Company s operation guideline in rectifying the cause of Delisting. Therefore, SET was in need to propose SET s Board to further delist the Company s ordinary shares.. If the Company had any additional fact, document or evidence, which may affect the SET s action, the Company must give explanation on fact and submit the document to be considered by SET S Board within 29 April On 29 April 2015, the Company submitted the letter seeking for extension of time for further rectifying the cause of Delisting not less than 1 year in order to explain on the progress of action in court and the period of time of action of business plan, the rectifying of cause of delisting in case where the auditor did not give his opinion to the financial statements of Company (during ) and the Company s action plan in order that the Company would have the complete qualifications and would be able to have no cause of delisting and the Company s shares would be traded as usual in SET within 31 March 2016 according to the extended period of time requested by the Company. -On 8 May 2015, the creditors meeting had resolved to adopt the executive s proposal for amendment of business rehabilitation plan representing 81.04% of the creditors who casted the votes and passed the resolution and 91.74% of the creditors who casted the votes and passed the resolution, respectively. The receiver would compile the complete business rehabilitation plan and propose the plan to be further considered by the Central Bankruptcy Court. -On 27 May 2015, the Company had submitted the additional explanation to SET to propose the progress in various aspects including the guideline to adjust the shareholder s equity to be in positive number and the Company s operating result had continuously shown its profit. -On 22 June 2015, SET asked the Company to explain the fact on rectifying of the cause of delisting of Company s ordinary shares from the listed company and to submit the relevant evidence and document again within 7 July On 23 June 2015, Industrial Estate Authority of Thailand permitted the Company to exploit the land according to the land lease agreement for industry and to operate other businesses as the Company had submitted the request for operation of business other than the manufacture and sale of chemical fertilizer according to the previous objective. -On 7 July 2015, the Company had explained the fact on rectifying of the cause of delisting of Company s ordinary shares from the listed company and had submitted the relevant evidences and documents again to Page 3/16

78 SET. In this regard, the Company would improve its action plan in order to rectify the cause of delisting of Company s ordinary shares from the listed company and would report the progress of Company s business rehabilitation. -On 3 August 2015, SET notified the Company to take action without delay in order to have the qualification to have no cause of delisting within the period of time specified SET. The Company must submit the request for not being delisted and must submit the financial statements of 2014 having been audited by the Certified Public Accountant (CPA), including the explanation or document, information supporting or beneficial to the consideration within 31 March In addition, the Company was requested to affix the signature for acknowledging and giving the consent to comply with the conditions on extension of period of time for rectifying of the cause of delisting and to return them to SET within 17 August On 22 September 2015, the Central Bankruptcy Court issued the order approving the amendment of business rehabilitation plan and the extension of the operation s period of time for another 1 year including the increase of business of Module Assembly Yard. - On 22 September 2015 and 12 October 2015, the Company as the executive of business rehabilitation plan had submitted the request for 3 rd time-amendment of business rehabilitation. 1. In order that the debt would be fully paid at one time and for the success of business rehabilitation plan; 2. For the security of long-tern business operation, and in order to develop the business based on the current potential of assets and the increase of business line by integrating the potential business with those of the Company; 3. To create the added value and liquidity of the Company s shares by rectifying the cause of delisting of the listed company and in order that SET would permit the Company s securities to be traded in SET again; 4. In order that the executive of business rehabilitation plan would be able to efficiently and successfully manage the plan which would beneficial to all creditors. -On 26 October 2015, the creditors meeting had resolved to adopt the executive s proposal for amendment of business rehabilitation plan representing 68.80% of the creditors who casted the votes and passed the resolution. Moreover, the receiver ordered the executive of business rehabilitation plan to submit the complete business rehabilitation plan and to explain the plan in details to the receiver within 2 November On 3 November 2015, the Supreme Court passed the order to dismiss the request for Company s business rehabilitation in accordance with the Supreme Court s Judgement No.2541/2558. As a result, the authority, duty in managing the Company s properties were owned by the executive, board of directors and shareholders of the Company again. -In addition, on 3 November 2015, the Supreme Court passed the Judgement No.9778/2558 to strike the case out of the case-list. In such case, the Company asked the court to order the Board of Industrial Estate Authority of Thailand ( Board of IEAT ) to pause the action or to prohibit further action in taking any action for taking back the area of pier together with the structures because Automatic Stay (which was effective on the date on which the court passed the order to accept the request for Company s business rehabilitation) had terminated. -On 11 November 2015, the Company as the executive of the business rehabilitation plan had returned the properties, corporate seal, accounts and documents relating to Company s properties and businesses to the Board of Director who had checked and accepted the delivery of business, properties, corporate seal, accounts and documents relating to Company s properties and businesses. -On 21 December 2015, the Extraordinary General Meeting resolved and approved the increase of registered capital in form of the Private Placement amounting to 340 Million Baht, by issuing 2,125,000,000 shares, whose the par value was 0.16 Baht per share, and approved to allot such shares to 2 investors who could accept the Company s conditions i.e. Inter Spec Global Co.,Ltd. amounting 1,375,000 shares whose the par value was 0.16 Baht per share, and for Mr.Pitayakorn Naothaworn amounting 1,375,000 shares whose the par value was 0.16 Baht per share. -On 25 December 2015, the Company had fully received the payment of such capital-increase shares price, in the amount of 340 Million Baht. Page 4/16

79 -On 28 December 2015, the Company had registered the Company s capital increase in the amount of 1,076,894, Baht, comprising 6,730,589,515 shares, whose the par value was 0.16 Baht. On 28 December 2015 and 30 December 2015, the Company had already paid the debt according to the previous business rehabilitation plan to Group 1 Creditors, Group 2 Creditors, Group 4 Creditors, Group 5 Creditors, Group 7 Creditors. With regard to Group 3 Creditors, it is currently under the coordination with the state agencies. In addition, after such debt payment, the Company still had partial unpaid debt. The Company had jointly agreed with the creditors that the Company would pay the debt by mean of delivery of goods and/or service until the debt has fully been paid. Shareholding Structure of the Group The Company s subsidiary company was Rayong Bulk Terminal Co.,Ltd. (RBT)which operated the business of pier and warehouse. The Shareholding Structure was as follows:- NFC Fertilizer Public Company Limited (To manufacture and sell chemical fertilizer) % Rayong Bulk Terminal Co.,Ltd. Business Operation Characteristics Revenues Structure Revenues 2013 (audited) 2014 (audited) 2015 (audited) (Million Baht) % (Million Baht) % (Million Baht) % Revenue from sale of product en route and chemical products Revenue from service Profit from debt restructuring Other revenue Total revenues , Characteristics of Product or Service 1.Chemical Product The Company had the plan to sell 3 main fertilizers, which were Bulk Blending Fertilizer, Compounded Fertilizer and Straight Fertilizer. The Company would only manufacture Compounded Fertilizer. The Company would import Straight Fertilizer and Compounded Fertilizer to be sold to domestic customers. The Company would provide the chemical fertilizer with the required formula, to the customers for instance, , , and , whose their trademarks were under the National Fertilizer s brand and Cooperative s brand, etc. With regard to Straight Fertilizer and Compounded Fertilizer which would be imported by the Company for trading, some parts of them would directly be sold to the customers without any action. The Company would prepare the storage tanks for some parts of them before selling them to the customers. Page 5/16

80 2.Sale of Gypsum The Company had by-product from manufacture of the Compounded Fertilizer. The by-product were stored at the floor of Company s factory in Rayong Province. The gypsum was used in 2 cases, firstly, it was used for agricultural purpose (as the soil improvement substance), and, secondly, it was used for industrial purpose (it was mainly used in construction material industry). In the past, the used gypsum was from natural source, but the Company s gypsum was from the manufacture of กรดฟอสฟอร ค with lower manufacturing cost, therefore, its price competitiveness was higher than the natural gypsum in agricultural sector. 3.Sale of Ammonia and Sulfuric Acid and Storage tank Service The Company would import Ammonia and Sulfuric Acid to be sold to the domestic customers and would provide service of transport of goods via the pipeline and storage tank service. 4.Warehouse Service As there was the vacant area in warehouse, therefore, the Company provided the area service to the customers who needed to utilize such area for the goods storage. Accordingly, the service generated more income for the Company. 5. Providing of Company s port service for the customers of Rayong Bulk Terminal Co.,Ltd. (RBT) As the Company was approved by the Board of Industrial Estate Authority of Thailand ( Board of IEAT ) to provide service of Company s port (the ad hoc pier being used for the Company s business only) for the customers of Rayong Bulk Terminal Co.,Ltd. (RBT) for another 1 year from 1 November 2012 in order to solve the problem on the congestion of goods ship at Map Ta Phut Industrial Port in accordance with government policy. Board of IEAT approved the extension of period of time for another 1 year from 1 October 2015 to 30 September 2016 or until the port of RBT could be open, but not exceeding 1 year. This would be an additional source of income generated from the Company s existing property. Marketing and Competition 1.Chemical Fertilizer The Company had the marketing plan and sale plan. The Company s target group were the sale agents, agricultural cooperatives, agricultural state agencies, industrial factories and fertilizer blending factories. Firstly, the Company would contact the fertilizer sale agents and prime buyers and simultaneously acquired the new fertilizer sale agents. The Company would consider the world market price and selling price of competitors as the guideline in fixing the selling price. There would be the additional discount as appropriate according to the market condition in each period of time and each area in order to motivate the customers to purchase the Company s products. 2.Gypsum Sale For the past period of time, the Company was able to sell the gypsum approximately 2,500 tons per month on average. Moreover, the Company would also acquire other gypsum purchasers. However, the main obstruction of gypsum sale was the transportation expense which was quite high when compared with the gypsum value. Further, there might be the improvement of some gypsum qualifications in order that the gypsum qualifications would be appropriate to be used in industrial sector. 3. Sale of Ammonia and Sulfuric Acid and Storage tank Service Ammonia was the basic raw material used in various industries, for instance, chemical industry, metal industry, cool tissue, etc. The ammonia price in world market increased according to the oil price and natural gas. As a result, the selling price in country had increased. However, the Company had the advantages in having the large storage tanks, pier including the standard imported equipment, as a result, the operating cost was low. Moreover, due to the growth of chemical industry, rubber and plastic, the demand of ammonia had increased and the Company was still able to further compete with others in this industry. Page 6/16

81 The sulfuric acid was the basic raw material for various industries, for instance, fertilizer, battery, garment, color, tissue, alum, etc. In Thailand, the manufacturers of sulfuric acid can be divided into 2 categories according to the manufacturing process, which were, the manufacture from the sulfuric acid burning and the byproduct of ore smelting. The competition in market depended on the manufacturing volume of the latter manufacturer. If the manufacturers could produce the sulfuric acid with their highest manufacturing capacity, the product would flood in country s market. Therefore, the product must be exported to foreign countries. 4.Warehouse Service The Company s target customers were the logistics business operators and the import/export agent companies who needed to use the warehouse area for the import and the export. In this connection, the Company forecasted that there were other customers who operate the similar businesses operators who were interested in using the Company s warehouse service. The Company would collect the warehouse service charge according to the actually used area. The service charge rate would adjust according to the appropriateness of market condition in such period of time, etc. 5.Pier Service The Company s pier service could be provided to the customers of Rayong Bulk Terminal Co.,Ltd. (RBT) who were the customers in Map Ta Phut Industrial Estate and the bulk cargo, for instance, the hot rolled steel sheet, cold rolled steel sheet, H-BEAM steel. Currently, Board of IEAT approved the extension of period of time for another 1 year from 1 October 2015 to 30 September 2016 or until the port of RBT could be open, but not exceeding 1 year. Providing of Product or Service 1.Chemical Fertilizer With regard to the straight fertilizer and compounded fertilizer, the Company would mainly import them from foreign countries. However, the Company would import the raw material from the country and foreign countries, depending on the raw material volume and expenses on the order of each time. The Company had the policy to order the raw material from various manufacturers in order to reduce the risk from raw material shortage and in order that the raw material would have the quality with appropriate price. 2.Gypsum Sale Gypsum was the by-product of the manufacture of compounded fertilizer in the past. It was stored on the Company s factory floor in Rayong Province. The Company had sold the gypsum to customers in agricultural sector and industrial sector. 3.Sale of Ammonia and Sulfuric Acid The Company would import ammonia and sulfuric acid to be sold to the domestic country and also provided service of products transport via pipeline and storage tank to customers. 4. Storage tank Service The Company provided the service of warehouse vacant area to the customers who needed to utilize such area for the goods storage. Accordingly, the service generated more income for the Company. 5. Providing of Company s port service As the Company could use the Company s current pier in order to support and to provide service to the customers of Rayong Bulk Terminal Co.,Ltd. (RBT). In addition, the Company was approved by the Board of Industrial Estate Authority of Thailand ( Board of IEAT ) to provide service of Company s port for another 1 year (from 1 November 2015 to 30 September 2016) or until the port of RBT could be open, but not exceeding 1 year. This would be an additional source of income for the Company. Page 7/16

82 Board of Directors Name List as of 30 December 2015 Board of Directors Name List Position 1. Mr.Wisanu Niwesmarin Chairman/Independent Director 2. Mr.Nattaphob Ratanasuwantawee Vice Chairman/Chairman of Executive Board/Managing Director 3. Mrs.Bongkot Rungkornpaisarn Director 4. Mr.Wiboon Rasmeepaisarn Director 5. Mr.Yongyos Palanitisena Director 6. Mr.Supakij Dulyapitch Director 7. Mr.Kijja Samunyahiran Director 8. Mr.Nattaphong Ratanasuwantawee Director 9. Mrs.Sunee Sornchaithanasuk Independent Director 10. Mr.Seri Wongmonta Chairman of Audit Committee 11. Mr.Sumit Petcharapiratch Audit Committee and Independent Director 12. Mrs.Aree Termwattanapakdee Audit Committee and Independent Director The directors with authority to sign on behalf of the Company were as follwos:- 1. Mr.Nattaphob Ratanasuwantawee jointly signs with Mr.Yongyos Palanitisena or Mr.Supakij Dulyapitch, altogether two persons together with the corporate seal affixed; 2. Mrs.Bongkot Rungkornpaisarn and Mr.Kijja Samunyahiran jointly signs with Mr.Yongyos Palanitisena or Mr.Supakij Dulyapitch, altogether three persons together with the corporate seal affixed; Name list of top 10 shareholders shareholders as of 18 March 2016 Name list of shareholders Before allocation as of 18 March 2016 After allocation Number of shares % Number of shares % 1. Ratanasuwantawee Group 3,068,805, % 4,836,911, % 1.1 Mr.Nattaphob Ratanasuwantawee 2,968,805, % 2,968,805, % 1.2 SC Carrier Co.,Ltd. 100,000, % 100,000, % 1.3 C&A % 1,768,106, % 2. Interspec Global Co.,Ltd. 1,375,000, % 1,375,000, % 3. Mr.Pittayakorn Naothaworn 750,000, % 750,000, % 4. Mr.Asia Pukhunanun 220,000, % 220,000, % 5. Mr.Pradchaya Sermsuksakulchai 220,000, % 220,000, % 6. Mr.Wichai Thongthang 200,000, % 200,000, % 7. Mr.Archavee Aungsatumrat 190,343, % 190,343, % Page 8/16

83 Name list of shareholders Before allocation as of 18 March 2016 After allocation Number of shares % Number of shares % 8. Chatpimonkul Family 243,166, % 243,166, % 8.1 Mr.Direk Chatpimonkul 104,000, % 104,000, % 8.2 Mr.Somkait Chatpimonkul 50,000, % 50,000, % 8.3 Mr.Somchai Chatpimonkul 50,000, % 50,000, % 8.4 Ms.Apinya Chatpimonkul 39,166, % 39,166, % 9. Chaikunngamdee Family 120,000, % 120,000, % 9.1 Mr.Thanis Chaikunngamdee 84,000, % 84,000, % 9.2 Mr.Wichai Chaikunngamdee 20,000, % 20,000, % 9.3 Mrs.Thapana Chaikunngamdee 16,000, % 16,000, % 10. Other shareholders 343,274, % 343,274, % Grand total 6,730,589, % 8,498,695, % ASSETS Financial Status and Operating Result Financial Status Statements Particulars (Unit : Thousand Baht) CURENT ASSETS 31 December 2013 % 31 December 2014 % (Audited) (Audited) (Audited) 31 December 2015 % Cash and cash equivalents 8, , , Restricted deposits with bank -Legal Execution Dept. Trade accounts receivable and other receivables 5, , , related companies-net 11, , , general customers-net 6, , , Inventories net 51, , , Advances for land rental 17, , , Advances for goods , , Income tax withheld at sources 8, , , Refundable value asses tax 5, , , Other current assets 45, , , Assets of terminated operation , Total Current Assets NON-CURRENT ASSETS 161, , , Restricted deposits with bank 5, , Restricted deposits -related company 21, , Page 9/16

84 Particulars (Unit : Thousand Baht) 31 December 2013 % 31 December 2014 % (Audited) (Audited) (Audited) 31 December 2015 % Investment in subsidiary company Other long-term Investment-net 3, , , land, building and factory equipment - net 189, , , Right to use the pier- net 576, , Other non-current Assets 33, , , Total Non-Current Assets 829, , , TOTAL ASSETS 990, , , LIABILITIES AND PORTION OF SHAREHOLDERS CURRENT LIABILITIES Trade accounts payable and other payables - related companies 17, , , general suppliers 4, , , Liabilities of guaranteed of debentures 46, , liabilities under Rehabilitation plan (1-year due period of payment) 44, , Advance received from customer related companies 43, , , Advance received from customer-others 30, , , Accrued compensation expense and debts under joint operating agreement 276, , , Other current liabilities 10, , , Total Current Liabilities 474, , , NON-CURRENT LIABILITIES liabilities under Rehabilitation plan-net 626, , Provision for gypsum relocation cost 76, , , Employee benefits obligation 2, , , Other non-current liabilities 5, , , TOTAL NON-CURRENT LIABILITIES 711, , , TOTA LIABILITIES 1,185, ,253, , LIABILITIES AND PORTION OF SHAREHOLDERS(continued) PORTION OF SHAREHOLDERS Share capital-common share at Baht 0.16 par value - Authorized 6,730,589,515 shares 736, , ,076, (2557: 4,605,589,515 shares) -Issued and fully paid-up Page 10/16

85 Particulars (Unit : Thousand Baht) -Issued and fully paid-up 6,730,589,515 shares (2014: 4,605,589,515 shares) 31 December 2013 % 31 December 2014 % (Audited) (Audited) (Audited) 31 December 2015 % 736, , ,076, Deficit (998,370) (100.79) (1,103,664) (118.53) (1,023,494) (260.50) Surplus on assets revaluation TOTAL PORTION OF SHAREHOLDERS (CAPITAL DEFICIENCY) (260,973) (26.35) (366,393) (39.35) 53, Non-controlling interests in subsidiary 66, , TOTAL PORTION OF SHAREHOLDERS (CAPITAL DEFICIENCY) TOTAL LIABILITIES AND PORTION OF SHAREHOLDERS (NET CAPITAL DEFICIENCY) (194,872) (19.67) (322,616) (34.65) 54, , , , Revenue PROFIT AND LOSS STATEMENTS Particulars (Unit : Thousand Baht) 31 December 2013 % 31 December 2014 % 31 December 2015 % (Audited) (Audited) (Audited) Revenue from sales of chemical products 653, , , Revenue from services 133, , , Total Revenues from Sales and Services 786, , ,039, COSTS OF SALES AND SERVICES Cost of chemical products sold 626, , , Cost of services 25, , , Total Costs of Sales and Services 652, , , Gross profit 134, , , Other income 36, , , Profit from debt restructuring , the reversing entry of the accrued compensation expense and debts under joint operating agreement , Profit Before Expenses 170, , , Selling expenses , Administrative expenses 28, , , Doubtful debt-related companies , , Loss from the guarantee obligation , Loss from depreciation of investment in subsidiary Loss from the amortization of the right to use the pier Expense from factory temporary suspension of product manufacture , , , , the expense from cessation of usage of pier 119, , , Page 11/16

86 Particulars (Unit : Thousand Baht) 31 December 2013 % 31 December 2014 % 31 December 2015 % (Audited) (Audited) (Audited) Financial costs 6, , , Total expenses 268, , , NET PROFIT (LOSS) FOR THE YEAR (97,640) (12.41) (126,206) (15.00) 37, OTHER COMPERHENSIVE PROFIT (LOSS) Transaction not be categorized to profit and loss statements later assets revaluation (126) (0.02) (126) (0.01) (126) (0.01) Actuarial Loss-Net from tax (1,412) (0.17) (197) (0.02) TOTAL COMPERHENSIVE PROFIT (LOSS) FOR THE YEAR (97,160) (12.35) (127,744) (15.18) 36, ALLOCATION OF PROFIT (LOSS) Portion of the Company shareholders (76,742) (9.76) (103,882) (12.35) 80, Portion of non-controlling interests in subsidiary (20,898) (2.66) (22,324) (2.65) (43,057) (4.14) ALLOCATION OF COMPERHENSIVE PROFIT (LOSS) FOR THE YEAR (97,640) (12.41) (126,206) (15.00) 37, Portion of the Company shareholders (76,262) (9.70) (105,420) (12.53) 80, Portion of non-controlling interests in subsidiary (20,898) (2.66) (22,324) (2.65) (43,057) (4.14) Basic Earnings (loss) per Share (97,160) (12.35) (127,744) (15.18) 36, Loss (Baht per share) (0.02) (0.02) 0.02 Weight average number of common shares (Thousand Shares) 4,605,590 4,605,590 4,657,987 CASHFLOW Particulars (Unit : Thousand Baht) Cash Flows from Operating Activities 31 December December December 2015 (Audited) (Audited) (Audited) (Audited) Profit (loss) for the year (97,640) (126,206) 37,310 Adjustments to reconcile profit (loss) to net cash Provided from (used in) operation activities Depreciation and amortization 88,850 88,368 63,290 Loss (gain) on exchange rate 716 (2,078) 2,842 Loss (gain) on disposal of assets 60 (394) 2,160 Allowance for impairment of assets - 8,554 13,263 Allowance (reversal of allowance ) for doubtful accountsrelated companies (400) 19,946 (79,765) Decline value of inventories (468) (614) (1,886) Amortization of consumables - - (122) Loss from depreciation of investment in subsidiary Page 12/16

87 Particulars (Unit : Thousand Baht) 31 December December December 2015 (Audited) (Audited) (Audited) Loss from the amortization of the right to use the pier ,928 Decreased provision of gypsums relocation cost 28,511 (2,104) (30,965) the reversing entry of the accrued compensation expense and debts under joint operating agreement - - (250,665) Deferred revenue Profit from the debt restructuring (3,680) (237) (258,290) Interest income (145) (58) (39) Interest paid 5,951 5,252 3,780 Provision for employee benefits obligation (199) Gain (loss) from operations before changes in operating (35,467) (9,261) 11,352 Decrease (Increase) in Operating Assets Trade accounts receivable and other receivables-related companies (3,724) (16,090) (45,341) Trade accounts receivable and other receivables-general 1,494 7,551 99,176 Inventories 69,729 (66,709) (10,880) Other current assets (34,815) 27,511 7,877 Other non-current assets (3) 1 - Increase (Decrease) in Operating Liabilities Trade accounts payable and other payable-related companies (1,592) (4,356) 19,744 Trade accounts payable and other payable-general (4,102) 32,468 (11,359) Liabilities of guaranteed of debentures - - (46,956) Advance received from customer related companies (129) (900) (39,861) Advance received from customer others (22,471) 12,293 14,853 Accrued compensation expense and debts under joint operating agreement 67,493 68,595 15,567 Other current liabilities 3,072 (849) 44,378 Other non-current liabilities Net Cash from Operating Activities 39,735 50,554 58,550 Page 13/16

88 Significant Financial Ratios Financial Ratios 31 December December December 2015 Liquidity(times) Gross Profit 17.06% 15.74% 20.67% Net Profit % % 3.34% Yield per shareholder N/A N/A N/A Yield from assets % % -4.48% Debt to Portion of shareholders ratio(times) Financial Statements Analysis Business Overview In 2015, the Company and the subsidiary had the assets in the amount of Million Baht, which decreased from 2014 in the amount of Million Baht. The liabilities in 2015 was in the amount of Million Baht, decreased from 2014 in the amount of Million Baht. The profit in 2015 was in the amount of Million Baht, divided into the portion of shareholders in the amount of Million Baht, and portion of non-controlling interests in subsidiary having loss in the amount of Million Baht. After considering the operating result of this accounting period, the profit increased in the amount of Million Baht, or increased by % when compared with the loss of the portion of shareholders. Because in 2015, the Company had the profit from debt restructuring and the reversing entry of the accrued compensation expense and debts under joint operating agreement. With regard to the subsidiary, it was under the absolute receivership according to the order of Bankruptcy Court. Accordingly, the subsidiary was unable to operate its business as usual since The subsidiary had no revenue from operation while it had the cost and expenses according to agreement. Later, in March 2015, Central Bankruptcy Court had ordered to dismiss the request of the subsidiary which objected the order of the receiver, as a result, the joint agreement on the development of area of pier between the subsidiary and Industrial Estate Authority of Thailand had terminated. Such factor had material effect in the value of right to use the pier including other assets in the financial statements the subsidiary. During the accounting period, the subsidiary had the amortization of the right to use the pier in the amount of Million Baht from the account, as a result, the subsidiary s operation would be greatly and continuously affected upto the future. Therefore, the subsidiary suffered the net loss in 2015, the Company must record the loss due to the depreciation of investment in its subsidiary in the amount of Million Baht. Accordingly. The Company s financial statements had the net loss in the amount of Million Baht in On 3 November 2015, the Supreme Court ordered to dismiss the request for business rehabilitation plan according to the judgement of the Central Bankruptcy Court. The judgement was the consequence of the appeal of Industrial Estate Authority of Thailand having been filed to the Supreme Court in However, the Supreme Court s order to dismiss the request for business rehabilitation plan did not affect any action having been taken by the receiver or the plan executive prior to the issuance of the Supreme Court s order. At present, the Company has the status of a listed company in SET which has already passed the procedure of business rehabilitation through the Central Bankruptcy Court. Therefore, the authority, duty of management of Company s properties belonged to the Company s executives again, as a result, the shareholders have the right according to laws. In December 2015, the Company increased its capital in the Private Placement in the amount of 340 Million Baht in order to bring the money to repay debt according to the request for the debt restructuring or the creditors under the previous business rehabilitation plan. As a result, the Company was able to restructure the debt exceeding 75%. Moreover, the Company had appointed the financial advisor to study the guideline for the amalgamation with a related company in order that the Company would be able to operate its businesses with sustainable profit. Accordingly, the Company forecasted that it would be able to take action to have the qualification and to have no cause of delisting within the period of time specified by SET. Page 14/16

89 Operating Result of the Company and the Subsidiary Operating Result In 2015, the Company and the subsidiary had profit in the amount of Million Baht, divided into the portion of shareholders in the amount of Million Baht, and portion of non-controlling interests in subsidiary having loss in the amount of Million Baht. After considering the operating result of this accounting period, the profit increased in the amount of Million Baht, or increased by % when compared with the loss of the portion of shareholders in 2014, in the amount of Million Baht. The Company would like to summarize the items with material change as follows:- -The Company and the subsidiary had the revenue from sale and service in the amount of 1, Million Baht, or increased in the amount of Million Baht or representing % when compared with 2014 where the revenue from sale and service was in the amount of Million Baht. Because the Company was able to sell more chemical product and the price of sulfuric acid in the world market increased when compared with the previous year. Moreover, the Company had adjusted the method of sale and had fixed the structure of selling price of ammonia to the customers since August As a result, the revenue from sale of chemical product increased when compared with the revenue in the same period of previous year, in the amount of Million Baht, or increased by 24.53%. In addition, the Company and the subsidiary also had the revenue from service in the amount of Million Baht or increased in the amount of Million Baht or representing 17.86% when compared with the revenue previous year, where the revenue from service was in the amount of Million Baht. -Cost of sale and service of the Company and the subsidiary of this year was in the amount of Million Baht, increased in the amount of Million Baht or representing 16.34% from the amount Million Baht when compared with the previous year. Because the cost of chemical product sale increased in the amount of Million Baht or representing 16.78%, and the cost of service increased in the amount of 2.27 Million Baht or representing 7.07%, when compared with the year The Company and the subsidiary had the gross profit in the amount of Million Baht, or increased in the amount of Million Baht or representing % when compared with the same period of previous year where the gross profit was only in the amount of Million Baht. -The Company and the subsidiary had the profit before expenses in the amount of Million Baht, or increased in the amount of Million Baht or representing % from the profit in the amount of Million Baht of the previous year. Because the Company had other revenue in the amount of Million Baht, or increased in the amount of Million Baht or representing % when compared with In addition, the Company had the profit from the debt restructuring in the amount of Million Baht, the reversing entry of the accrued compensation expense and debts under joint operating agreement in the amount of Million Baht -In this accounting period, the Company and the subsidiary had the gross expenses in the amount of Million Baht, or increased in the amount of Million Baht or representing % when compared with the previous year. Because, this year, the Company had the loss from the amortization of the right to use the pier in the amount of Million Baht, expenses of factory temporary suspension of product manufacture in the amount of Million Baht, the expense from cessation of usage of pier in the amount of Million Baht, Selling expenses in the amount of Million Baht, Administrative expenses in the amount of Million Baht, loss from the guarantee obligation in the amount of Million Baht, doubtful debt in the amount of Million Baht and Financial costs in the amount of 4.71 Million Baht. Profitability In 2015, the Company and the subsidiary had the gross profit in the amount of Million Baht, while the net income was by 3.34% because the Company had more revenue from the sale of chemical product and sulfuric acid. Moreover, the Company had the profit from debt restructuring, decrease of provision for the gypsum relocation and the reversing entry of the accrued compensation expense and debts under joint operating agreement. Page 15/16

90 Ability of Property Management The Company and the subsidiary had the ratio of yield and the ratio of yield from the fixed assets by 12.14% and respectively, which increased from the previous year. Because the Company and the subsidiary had more net profit as earlier mentioned. Additionally, the Company had recorded the depreciation of the parts of land, building and factory equipment which were impaired, amortization of the right to use the pier of the subsidiary. Liquidity and Capital Adequacy In 2015, if we considered the overall liquidity, the Company and the subsidiary s liquidity ratio was at good level i.e ratios in The ratio increased due to the increase of current assets which was in the amount or representing (it mainly incurred from more cash and cash equivalents) and Trade accounts receivable and other receivables of the related companies when compared with the same period of The current liabilities decreased in the amount of Million Baht, or representing 51.01%, it mainly incurred from Accrued compensation expense and debts Under joint operating agreement which decreased in the amount of Million Baht, Liabilities of guaranteed of debentures increased in the amount of Million Baht, Liabilities under rehabilitation plan (which was due in year 1) increased in the amount of Million Baht and Advance received from customer decreased in the amount of Million Baht, other current liabilities increased Million Baht and the trade accounts payable increased in the amount of Million Baht. However, the Company still needs the working capital to be used in business for the maintenance of factory and for business expansion, the source of fund would be from the bank s loan and the capital increase in the near future. Financial Status of the Company and the Subsidiary Financial Status As of 31 December 2015, the Company and the subsidiary s total assets were in the amount of Million Baht, total liabilities were in the amount of Million Baht, net portion of the Company s shareholders was in the amount of Million Baht or net share value was 0.02 Baht per share. The summary of financial status was as follows:- Total assets decreased in the amount of Million Baht or decreased by 57.80% when compared with the accounting period of 2014 year-end because the Company and the subsidiary s current assets increased in the amount of Million Baht or increased by 52.34%, while the Company and the subsidiary s non-current assets of this accounting period decreased in the amount of Million Baht or decreased by 86.25%; The total liabilities decreased in the amount of Million Baht or decreased by 73.00% when compared with the accounting period of 2014 year-end because the Company and the subsidiary s current liabilities decreased in the amount of Million Baht or decreased by 5101%, while noncurrent liabilities decreased in the amount of Million Baht or decreased by 91.89%; Moreover, the Company and the subsidiary s portion of shareholders was in the amount of Million Baht, or increased in the amount of Million Baht or increased by % when compared with the accounting period of 2014 year-end where portion of shareholders was in the amount of (323) Million Baht, because the Company had increased the capital in the amount of 340 Million Baht and the subsidiary s current retained loss decreased in the amount of Million Baht and portion of non-controlling interests increased in the amount of Million Baht. Accordingly, the Company and the subsidiary s net book value was in the amount of 0.02 Baht per share. Page 16/16

91 ATTACHMENT 2 Overview of the Business Operation and the Performance of Chemicals and Aromatics (Thailand) Co.,Ltd. (Source : Report of Study on the Guideline of the Merger & Acquisition of Finnara V Consultant Co.,Ltd. and the Audited Financial Statement of C&A ( ) and Internal Financial Statement of 2015) General Information Company s Name: English name: Registration date: 14 October 1988 Company s registration number: Registered capital: Paid-up capital: Business category: Head office location: Chemicals and Aromatics (Thailand) Co.,Ltd. Chemicals and Aromatics (Thailand) Co.,Ltd (previous Reg.No.8142/2531) 30,000,000 Baht 30,000,000 Baht Tel.No.: Branch Office 001 Location: Branch Office 002 Location: Tel.No.: Telefax: To manufacture and distribute the petrochemical products No.88, SC Group Building, 4 th Floor, the Parkland Road (Bangna- Trad Km.5), Bangna Sub-district, Bangna District, Bangkok No.9/25, Moo 4, Buengyeetho Sub-district, Thanyaburi District, Pathumthani Province No.105, Moo 2, Surat-Paknam Road, Bangkung Sub-district, Mueang Suratthani District, Suratthani Province Policy and Business Operation Overview Chemicals and Aromatics (Thailand) Co.,Ltd.( C&A ) was firstly established under the name CNA (Thailand) Co.,Ltd. on 14 October The initial registered capital was in the amount of 10 Million Baht to operate the business as the dealer of the imported chemical products and to provide the service of product transport via the pipeline and the containers in various customers areas and also managed the chemical volume to be sufficient with the customers demand. Later, in February 1993, the Company s name was changed from CNA (Thailand) Co.,Ltd. to be Chemicals and Aromatics (Thailand) Co.,Ltd. and on 12 July 2004, the Company submitted the request to the Ministry of Commerce for increasing its capital from 10 Million Baht to be 30 Million Baht. Business Operation Characteristics C&A manufactures and distributes the petrochemical products which are as follows:- 1.Ammonia (NH 3 ) C&A sells the Ammonia to domestic customers and provides the service of product transport via the pipeline and the containers to customers. In this connection, C&A purchased the ammonia products from National Fertilizer Public Company Limited ( NFC ) which was permitted to lawfully import the hazardous chemicals. The ammonia distributed by C&A was used in various industries, for instance, industry of monosodium glutamate (MSG) manufacture, industry of latex manufacture and industry of cooling. Page 1/6

92 2.Ammonium Hydroxide (NH 4 OH) C&A sold its Ammonium Hydroxide to its domestic customers who demanded to mainly use the Ammonium Hydroxide in the power plant industry, gas separation plant, coal manufacture industry in order to reduce the air pollution arising out of the combustion. Revenue Structure Revenue 2013(audited) 2014(audited) 2013(internal) (Million Baht) % (Million Baht) % (Million Baht) % Revenue from sale Other revenue Total revenues Products and Service Characteristics The products distributed by C&A were divided into 2 categories as follows:- 1.Ammonia (NH 3 ) which was much used in various industries, for instance, industry of monosodium glutamate (MSG) manufacture, industry of latex manufacture and industry of cooling. 2.Ammonium Hydroxide (NH 4 OH) comprised - Ammonium Hydroxide with 20% concentration; - Ammonium Hydroxide with 25% concentration; - Ammonium Hydroxide with 27% concentration; Ammonium Hydroxide was mainly used in the power plant industry, gas separation plant, coal manufacture industry in order to reduce the air pollution arising out of the combustion. Marketing and Competition Ammonia was the raw material used in various industries, for instance, chemical industry, metal industry, cool tissue, etc. Generally, ammonia was imported by the operators who used ammonia in their production process, for instance, chemical fertilizer factory. The world s major manufacturers were China, India, USA and Indonesia. In Thailand, there was no ammonia manufacture in the country because the construction of ammonia manufacture factory needed high investment. Moreover, as ammonia market in Thailand was still small, therefore, there was no operator investing in the construction of ammonia manufacture factory. The whole ammonia used in Thailand was mainly imported from foreign countries i.e. Indonesia, Malaysia and Saudi Arabia. The 2 major distributors of ammonia in Thailand were Chemicals and Aromatics (Thailand) Co.,Ltd. and UNIGAS and Petrochemicals Public Company Limited. In addition, there were some retail distributors who imported ammonia from Malaysia by motorcars to be distributed to the rubber manufacture factory in bordering provinces in the South of Thailand. Provision of Products or Services C&A purchased ammonia from National Fertilizer Public Company Limited ( NFC ) which was permitted to lawfully import the hazardous chemicals. In transferring the products, C&A hired SC Carrier Co.,Ltd. who was the provider of hazardous chemicals transport service being permitted to transfer the ammonia. Moreover, SC Carrier Co.,Ltd. was proficient in management of transport and storage of hazardous substances, and had the safety standard at international level. Board of Directors Name List 1. Mr.Nattaphob Ratanasuwantawee 2. Mr.Nattaphong Ratanasuwantawee The director who has authority to sign on behalf of the Company is a director signs with the corporate seal s affixed. Page 2/6

93 Major Shareholders Name list Major Shareholders as of 30 April 2015 Number of Total value of No. Shareholders Name list % shares shares(baht) 1 Mr.Nattaphob Ratanasuwantawee 274, % 27,499, Mr.Nattaphong Ratanasuwantawee 25, % 2,500,000 3 Mrs.Bongkot Rungkornpaisarn % Mrs.Cholruedee Ruentawin % Mrs.Wimol Duncharoensukjit % Mr.Wiboon Rasmeepaisarn % 100 Total of shareholders 300, % 30,000,000 *Par value is 100 Baht per share Financial Status and Operating Result Financial Status Statements The reference information was based on the financial statements for the accounting period ended as of 31 December 2014 which had been audited by CPA (Miss Pornthip Tangpongbundit), License No.3707, P. Consultant Office, and the internal financial statements of C&A of ASSETS Particulars (Unit : Thousand Baht) 31 December 31 December 31 December 2013 % 2014 % 2015 % (Audited) (Audited) (Internal) CURENT ASSETS Cash and cash equivalents 26,528, ,590 Trade accounts receivable and other receivables - net 132,014, ,786,388 Loan and Accrued interest receivable 84,197, ,817,763 Inventories net 4,488, ,182,321 Deposit 24,481, Debtor due to sale of investment 28,021, ,021,978 Other current assets 3,019, ,726, ,304, ,339, ,403, ,410, ,021, ,624, Total Current Assets 302,751, ,979, ,104, Non-Current Assets building and equipment - net 127,833, ,636, ,565, Intangible assets-net 14, ,146 Other non-current Assets 3,172, , , Total Non-Current Assets 131,020, ,712, ,681, TOTAL ASSETS 433,772, ,692, ,786, LIABILITIES AND PORTION OF SHAREHOLDERS CURRENT LIABILITIES O/D and short-term loan from financial institution 75,785, ,828, ,755, Page 3/6

94 Particulars (Unit : Thousand Baht) 31 December 31 December 31 December 2013 % 2014 % 2015 % (Audited) (Audited) (Internal) Trade accounts payable and other payables 122,514, ,010, ,171, Corporate income tax payable 3,263, ,555, Short-term loan and Accrued interest payable 41,755, ,437,138 Long-term loan (1-year due period of payment) 11,640, ,640,000 Debt under financial lease agreement (1-year due period of payment) ,681 Other current liabilities 54, , ,556, ,640, , , Total Current Liabilities 255,014, ,641, ,176, NON-CURRENT LIABILITIES Long-term loan-net 25,680, ,040,000 Debt under financial lease agreement-net - - 2,050, ,400, ,060, TOTAL NON-CURRENT LIABILITIES 25,680, ,090, ,460, TOTA LIABILITIES 280,694, ,732, ,637, LIABILITIES AND PORTION OF SHAREHOLDERS(continued) PORTION OF SHAREHOLDERS - Authorized 30,000,000 30,000,000 30,000,000 -Issued and fully paid-up 30,000, ,000, ,000, Unappropriated retained earnings 123,078, ,959, ,148, TOTAL PORTION OF SHAREHOLDERS 153,078, ,959, ,148, TOTAL LIABILITIES AND PORTION OF SHAREHOLDERS 433,772, ,692, ,786, Revenues PROFIT AND LOSS STATEMENTS Particulars (Unit : Thousand Baht) 31 December 31 December 31 December 2013 % 2014 % 2015 % (Audited) (Audited) (Audited) Revenues from Sales 652,743, ,335, ,068, Other Revenues 4,806, ,047, ,320, Total Revenues 657,550, ,383, ,389, Costs and expenses Costs of Sales (584,320,644) 89.5 (626,896,753) 86.7 (646,616,875) 89.6 Selling expenses (452,093) 0.1 (2,730,802) 0.4 (4,922,629) 0.7 Administrative expenses (34,702,381) 5.3 (55,600,695) 7.7 (29,223,698) 4.0 Total costs and expenses (619,475,118) 94.9 (685,228,250) 94.7 (680,763,202) 94.3 Profit before finance cost and income tax expenses 38,074, ,154, ,626, finance cost (10,584,126) 1.6 (12,665,892) 1.8 (16,590,693) 2.3 Profit before income tax 27,490, ,489, ,035, Corporate income tax (5,511,168) 0.8 (22,607,606) 3.1 (9,846,310) 1.4 Net profit 21,979, ,881, ,189, Page 4/6

95 Significant Financial Ratios Financial Ratios 31 December December December 2015 Liquidity Ratio (times) Gross Profit 10.4% 13.3% 10.1% Net Profit 3.3% 11.1% 5.1% Yield per shareholder 14.4% 37.0% 13.6% Yield from assets 5.1% 13.0% 6.7% Debt to Portion of shareholders ratio(times) Financial Statements Analysis Operating Result Revenue from sale and service -In 2015, the Company had the total revenue in the amount of Million Baht, divided into the revenue from sale in the amount of Million Baht, or other revenue in the amount of Million Baht, decreased in the amount of Million Baht or representing 8.01 % when compared with 2014 due to the decease of revenue from sale was in the amount of 1.27 Million Baht or decreased by 0.17%. In addition, other revenue decreased in the amount of Million Baht. As in 2014, C&A had sold the assets, as a result, there was the income from the sale of structures and building, accordingly, other revenues had greatly decreased. -In 2014, the Company had the total revenue in the amount of Million Baht and other revenue in the amount of Million Baht, the total revenue increased in the amount of Million Baht or representing % when compared with 2013 due to the increase of revenue from sale of ammonia (which increased from the previous year) in the amount of Million Baht or representing %, and other revenue increased in the amount of Million Baht from the sale of structures and building, Cost of sale and service -In 2015, cost of sale and service of C&A was in the amount of Million Baht, increased in the amount of Million Baht or representing 3.15% from the amount Million Baht when compared with the previous year. While, the cost of sale and service of C&A in 2014 was in the amount of Million Baht, increased in the amount of Million Baht or representing 7.29% from the amount Million Baht when compared with the previous year. Profit before expenses -In 2015, C&A had the profit before expenses in the amount of Million Baht, decreased in the amount of Million Baht or representing % when compared with the profit before expenses of 2014 in the amount of Million Baht. In 2015, as C&A had the increased cost of sale while the revenue from sale decreased, as a result, the profit before expenses of 2015 decreased. In 2014, C&A had the profit before expenses in the amount of Million Baht, increased in the amount of Million Baht or representing % when compared with the profit before expenses in the amount of Million Baht of Gross expenses -In 2015, C&A had the gross expenses in the amount of Million Baht, or decreased in the amount of Million Baht or representing % when compared with the previous year. Because, in 2015, there was no expense of development of land on the leased premises when compared with the year Page 5/6

96 In 2014, C&A had the gross expenses in the amount of Million Baht, or increased in the amount of Million Baht or representing % from the expenses in the amount of 35.15Million Baht of the previous year, resulting from the record of expense of development of land on the leased premises. Financial Status Total assets As of 31 December 2015, C&A s total assets were in the amount of Million Baht, decreased from the previous year in the amount of Million Baht or decreased by 17.38% because the current assets decreased in the amount of Million Baht, and the non-current assets decreased in the amount of Million Baht. As of 31 December 2014, C&A s total assets were in the amount of Million Baht, increased from the previous year in the amount of Million Baht or decreased by 59.00%% because the current assets increased in the amount of Million Baht, and the non-current assets decreased in the amount of Million Baht. Total liabilities As of 31 December 2015, the C&A s total liabilities were in the amount of Million Baht, comprising the current liabilities in the amount of Million Baht and the non-current liabilities were in the amount of 3.46 Million Baht, because the total liabilities decreased from the previous year in the amount of Million Baht or representing 35.38% because the current liabilities decreased in the amount of 146 Million Baht, and the non-current liabilities decreased in the amount of 12.63Million Baht. As of 31 December 2014, the C&A s total liabilities were in the amount of Million Baht, comprising the current liabilities in the amount of Million Baht and the non-current liabilities were in the amount of Million Baht, because the total liabilities increased from the previous year in the amount of Million Baht or representing 59.14% because the current liabilities increased in the amount of Million Baht, and the non-current liabilities decreased in the amount of 9.59Million Baht. Portion of the shareholders As of 31 December 2015, the portion of shareholders was in the amount of Million Baht or increased by 15.72% when compared with the portion of shareholders as of 31 December 2014 in the amount of Million Baht. Significant Financial Ratios Profitability -In 2015, C&A had gross profit at 10.12% while the net profit was at 5.12%. C&A s profitability decreased when compared with the previous year. In 2014, C&A had gross profit at 13.33% due to the increase of ammonia cost of sale in 2015 and the net profit was at 11.08%. Ability of Property Management -In 2015, C&A s trade account receivables current ratio was 7.74 times and the debt collection period was 47 days on average, the inventories current ratio was times and the selling period was 3 days on average. While in 2014, C&A s trade account receivables current ratio was 8.53 times and the debt collection period was 43 days on average, the inventories current ratio was times, as a result, the selling period was 4 days on average. C&A had the yield from assets at 6.70% in 2015, decreased from 2014 where the yield from assets was at 13.03% due to the decrease of other revenue in 2015 from the sale of structures and buildings. Liquidity and Capital Adequacy In 2015, C&A s liquidity ratio was 1.94 times, increased from 2014 where liquidity ratio was 1.55 times, the cash cycle was 3 days. With regard to the debt payment ability in 2015, C&A s debt to portion of shareholders was 1.03 times, decreased from 2014 where debt to portion of shareholders was 1.84 times due to the decrease of total liabilities and the increase of such portion of shareholders. Page 6/6

97 ATTACHMENT 3 Summary of Information of SC Carrier Co.,Ltd. ( SCC ) (source: website BOL by Business Online Public Company Limited) General Information Company s Name: SC Carrier Co.,Ltd. English name: SC Carrier Co.,Ltd. Registration date: 2 June 1988 Company s registration number: (previous Reg.No.was 4030/2531) Registered capital: Paid-up capital: Business category: Head office location: 450,000,000 Baht 450,000,000 Baht Tel.No.: Telefax: - To render the land transportation service No.88, the Parkland Road, Bangna Sub-district, Bangna District, Bangkok Policy and Business Operation Overview SCC was firstly registered under the name of SC Rubber Co.,Ltd. 2 June 1988, its initial registered capital was in the amount of 20 Million Baht for rendering the service of transportation of chemical products and petroleum product i.e. oil, gas, chemical product and operated the industry of petrochemical oil. Later, its name was changed to be SC Carrier Co.,Ltd. on 28 November Previously, SCC had increased its registered capital and paid-up capital for many times. Most recently, on 1 August 2012, SCM had increased its registered capital from 400,000,000 Baht to be 450,000,000 Baht, divided into 4,500,000 shares, whose the par value was 100 Baht per share. On 30 April 2015, SCC s paid-up capital was in the total amount of 450,000,000 Baht. Board of Directors 1. Mr.Nattaphob Ratanasuwantawee 2. Mr.Nattaphong Ratanasuwantawee 3. Mrs.Cholruedee Ruentawin 4. Mrs.Bongkot Rungkornpaisarn 5. Mr.Wiboon Rasmeepaisarn 6. Mrs.Wimol Duncharoensukjit Mr.Nattaphob Ratanasuwantawee signs and affixes the corporate seal, or Mr.Nattaphong Ratanasuwantawee jointly signs with Mrs.Bongkot Rungkornpaisarn or Mrs.Cholruedee Ruentawin totaling 2 persons and affix the corporate seal. Page 1/3

98 Name list of Shareholders Name list of Shareholders as of 30 April 2015 No. Number of Total value of Shareholders Name list % shares shares(baht) 1 Mr.Nattaphob 4,149, % 414,999,600 Ratanasuwantawee 2 Mr.Nattaphong 350, % 35,000,000 Ratanasuwantawee 3 Mrs.Cholruedee Ruentawin % Mrs.Bongkot Rungkornpaisarn % Mr.Wiboon Rasmeepaisarn % Mrs.Wimol Duncharoensukjit % 100 Total 4,500, % 450,000,000 Summary of Financial Statements Financial Status Statements Particulars 31 December December December 2015 % % (Unit : Thousand Baht) (Audited) (Audited) (Audited) % ASSETS CURENT ASSETS Cash and deposit at financial institution 10,821, ,981, ,759, Trade accounts receivable 305,849, ,732, ,939, Short-term loan 345,227, ,320, ,063, Inventories net 10,886, ,029, ,447, Other current assets 275,297, ,909, ,607, Total Current Assets 948,081, ,093,972, ,240,817, Loan and long-term investment 16,000, ,000, ,000, Land, building and equipment - net 2,800,520, ,487,823, ,476,787, Other non-current Assets 233,722, ,261, ,882, Total non-current Assets 3,050,242, ,595,084, ,672,670, TOTAL ASSETS 3,998,324, ,689,057, ,913,488, LIABILITIES AND PORTION OF SHAREHOLDERS LIABILITIES O/D and short-term loan from financial institution 975,117, ,186, ,043, Trade accounts payable 107,934, ,954, ,940, Long-term loan(1-year due period of payment) 187,218, ,041, Short-term loan 194,613, ,107, ,027,114, OTHER CURRENT 447,053, ,270, ,975, LIABILITIES Total Current Liabilities 1,911,938, ,560,560, ,785,074, Long-term loan 699,824, ,989, ,621, OTHER NON-CURRENT LIABILITIES 447,291, ,943, ,801, TOTAL NON-CURRENT LIABILITIES 1,147,115, ,069,933, ,423, Page 2/3

99 Particulars 31 December December December 2015 % % % (Unit : Thousand Baht) (Audited) (Audited) (Audited) TOTA LIABILITIES 3,059,054, ,630,493, ,696,497, PORTION OF SHAREHOLDERS - Authorized 450,000, ,000, ,000,000 -Issued and fully paid-up 450,000, ,000, ,000, Retained earnings(deficit) 489,270, ,563, ,990, PORTION OF SHAREHOLDERS 939,270, ,058,563, ,216,990, TOTAL LIABILITIES AND PORTION OF SHAREHOLDERS 3,998,324, ,689,057, ,913,488, Particulars (Unit : Thousand Baht) PROFIT AND LOSS STATEMENTS 31 December 2013 % 31 December 2014 % 31 December 2015 % (Audited) (Audited) (Audited) Revenue Revenues from Sales and 2,147,767, ,971,413, ,857,873, Services Other Revenue 88,075, ,966, ,910, Total Revenues 2,235,842, ,070,380, ,946,783, Cost and expenses Costs of Sales or Services (1,583,332,081) 73.7 (1,557,802,650) 79.0 (1,424,362,973) 76.7 Administrative expenses (273,546,253) 12.7 (218,719,521) 11.1 (175,802,552) 9.5 Other expenses Total costs and expenses (1,856,878,334) 86.5 (1,776,522,171) 90.1 (1,600,165,525) 86.1 Profit before finance cost 378,964, ,858, ,618, and income tax expenses Interest paid (126,347,309) 5.9 (149,353,182) 7.6 (156,202,189) 8.4 Income tax (53,522,507) 2.5 (25,211,293) 1.3 (31,989,574) 1.7 Net profit 199,094, ,293, ,426, Significant Financial Ratios Financial Ratios 31 December December December 2015 Liquidity Ratio (times) Gross Profit 26.28% 20.98% 23.33% Net Profit 9.27% 6.05% 8.53% Yield per shareholder 42.39% 11.94% 13.92% Yield from assets 9.96% 3.10% 4.17% Debt to Portion of shareholders ratio(times) Page 3/3

100 ATTACHMENT 4 Summary of Information of SC Management Co.,Ltd. ( SCM ) (source: website BOL by Business Online Public Company Limited) General Information Company s Name: SC Management Co.,Ltd. English name: SC Management Co.,Ltd. Registration date: 15 October 1985 Company s registration number: Registered capital: Paid-up capital: Business category: Head office location: District, Bangkok Branch office location: 1,084,000,000 Baht 1,084,000,000 Baht Tel.No.: Telefax: To render the water transportation service No.88, the Parkland Road, Bangna Sub-district, Bangna Map Ta Phut Indutrial Estate, No.1, I-One, Map Ta Phut Sub-district, Mueang District, Rayong Province Policy and Business Operation Overview SC Management Co.,Ltd. ( SCM ) was registered and established on 15 October 1985 for rendering the service of water transportation, pier, pilot boat, line handing boat including the oil slick disposal. SCM s services included the industrial port, commercial port and offshore drilling platform of oil and gas. There were 48 service boats with 500-3,860 horse power. Previously, SCM had increased its registered capital and paid-up capital for many times. Most recently, on 14 May 2015, SCM had increased its registered capital from 400,000,000 Baht to be 1,084,000,000 Baht, divided into 1,0840,000 shares, whose the par value was 100 Baht per share. On 5 June 2015, SCM s paid-up capital was in the total amount of 421,000,000 Baht. Board of Directors 1. Mr.Nattaphob Ratanasuwantawee 2. Mr.Nattaphong Ratanasuwantawee 3. Mrs.Bongkot Rungkornpaisarn 4. Mr.Surajit Ratanasuwantawee 5. Mr.Suchai Nimnual Mr.Nattaphob Ratanasuwantawee signs and affixes the corporate seal, or Mr.Nattaphong Ratanasuwantawee jointly signs with Mrs.Bongkot Rungkornpaisarn or Mr.Suchai Nimnual totaling 2 persons and affix the corporate seal. Page 1/3

101 Name list of Shareholders Name list of Shareholders as of 5 June 2015 was as follows:- No. Number of Total value of Shareholders Name list % shares shares(baht) 1 Mr.Nattaphob 10,769, % 413,999,800 Ratanasuwantawee 2 Mr.Nattaphong 69, % 6,999,900 Ratanasuwantawee 3 Mrs.Bongkot Rungkornpaisarn % Mrs.Cholruedee Ruentawin % Mr.Suchai Nimnual % 100 Total 10,840, % 421,000,000 Summary of Financial Statements Financial Status Statements Particulars (Unit : Thousand Baht) ASSETS CURENT ASSETS 31 December December December 2015 % % (Audited) (Audited) (Audited) Cash and deposit at financial institution 46,505, ,736, ,811, Trade accounts receivable 348,362, ,613, ,543, Short-term loan 298,173, ,189, ,889, Inventories net 8,383, ,749, ,882, Other current assets 134,786, ,968, ,524, % Total Current Assets 836,211, ,257, ,189,651, Loan and long-term investment 249, , ,499, Land, building, equipment - net 1,186,531, ,729,429, ,710,920, Other non-current Assets 203,128, ,017, ,997, Total Non-Current Assets 1,389,908, ,070,696, ,939,417, TOTAL ASSETS 2,226,119, ,958,953, ,129,069, LIABILITIES AND PORTION OF SHAREHOLDERS CURRENT LIABILITIES O/D and short-term loan from financial institution 102,568, ,371, ,288, Trade accounts payable 78,394, ,402, ,572, Long-term loan(1-year due period of payment) 139,220, ,550, ,942, Other current liabilities 70,809, ,114, ,487, Total Current Liabilities 390,992, ,438, ,291, NON-CURRENT LIABILITIES Long-term loan 1,010,811, ,196,483, ,037,648, Page 2/3

102 Particulars (Unit : Thousand Baht) 31 December 2013 % 31 December 2014 % 31 December 2015 (Audited) (Audited) (Audited) Other non-current liabilities 29,167, ,057, ,723, TOTAL NON-CURRENT LIABILITIES 1,039,978, ,229,541, ,053,372, TOTA LIABILITIES 1,430,971, ,937,980, ,795,663, PORTION OF SHAREHOLDERS - Authorized 200,000, ,000, ,000,000 -Issued and fully paid-up 185,710, ,000, ,000, Retained earnings (deficit) 609,438, ,972, ,133,405, PORTION OF SHAREHOLDERS 795,148, ,020,972, ,333,405, TOTAL LIABILITIES AND PORTION OF SHAREHOLDERS 2,226,119, ,958,953, ,129,069, % PROFIT AND LOSS STATEMENTS Particulars (Unit : Thousand Baht) 31 December percent 31 December percent (Audited) (Audited) (Audited) 31 December 2015 ร อยละ Revenue Revenues from Sales and Services 1,063,663, ,156,056, ,620,684, Other Revenues 42,141, ,241, ,744, Total Revenues 1,105,805, ,223,297, ,664,428, Cost and expenses Costs of Sales or Services (637,487,526) 59.9 (711,208,304) 61.5 (1,055,895,325) 65.2 Administrative expenses (121,621,844) 11.4 (173,383,509) 15.0 (144,234,818) 8.9 Other expenses (13,726,520) 1.3 (13,793,720) 1.2 (18,883,530) 1.2 Total costs and expenses (772,835,890) 72.7 (898,385,533) 77.7 (1,219,013,673) 75.2 Profit before finance cost and income tax expenses 332,969, ,911, ,415, Interest paid (68,710,037) 6.5 (84,006,699) 7.3 (92,713,319) 5.7 Income tax (23,654,695) 2.2 (29,370,401) 2.5 (40,268,783) 2.5 Net Profit 240,604, ,534, ,433, Significant Financial Ratios Financial Ratios 31 December December December 2015 Liquidity Ratio (times) Gross Profit 40.07% 38.48% 34.85% Net Profit 22.92% 18.52% 19.51% Yield per shareholder n/a 23.30% 26.54% Yield from assets n/a 8.16% 10.26% Debt to Portion of shareholders ratio(times) Page 3/3

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