Patkl 08

Financial Highlight Comparative Data PATKOL PUBLEC COMPANY LIMITED

2551 / 2008 2550 / 2007 2549 / 2006 2548 / 2005

Total Assets 2,623 3,022 3,087 2,500

Total Liabilities 2,701 2,597 2,337 1,727

Total shareholders' Equity -78 425 750 772

Sales and services income 2,715 3,549 3,621 2,754

Total Revenue 2,738 3,591 3,664 2,788

Gross Profit -150 31 301 250

Net Profit before interest and tax -450 -188 149 138

Net Profit(Loss) -565 -289 61 67

Net profit margin -20.6% -8.1% 1.7% 2.4%

Return on Total Assets -20.0% -9.5% 2.2% 2.7%

Net Profit per share (Baht) -2.37 -1.21 0.26 0.28

Dividend per share (Baht) 0.00 -0.15 -0.10 0.00

Book Value per share (Baht) -0.33 1.78 3.14 3.24

Comparative Data PATKOL PUBLIC COMPANY LIMITEC AND SUBSIDIARIES

2551 / 2008 2550 / 2007 2549 / 2006 2548 / 2005 Total Assets 3,171 3,668 3,560 2,690

Total Liabilities 3,109 3,122 2,699 1,906

Total shareholders' Equity 50 534 849 772

Sales and services income 2,843 3,673 3,779 2,726

Total Revenue 2,871 3,702 3,811 2,761

Gross Profit -74 105 402 283

Net Profit before interest and tax -406 -161 205 144

Net Profit(Loss) -552 -279 102 69

Net profit margin -19.2% -7.5% 2.7% 2.5%

Return on Total Assets -16.1% -7.7% 3.3% 2.6%

Net Profit per share (Baht) -2.32 -1.17 0.43 0.29

Dividend per share (Baht) 0.00 -0.15 -0.10 -0.00

Book Value per share (Baht) 0.21 2.24 3.56 3.24

Massage from the Chairman of the Board After reading through Patkol’s annual business report of the past difficult and tumultuous year, shareholders may have many

questions in mind. I would like to encourage you to ask questions during the general meeting.

Through my annual message of the previous year presented to all shareholders, you have been informed that Patkol, as a leading indigenous engineering company, has since some 3 years ago taken on a new challenge and added to its port folio of core businesses, a couple of large but potentially viable turn-key projects for the development of ethanol production lines. The fact that Patkol being entrusted by the projects’ owners with the engineering works which comprise designing, fabrication, system integration and commissioning of the complete production lines, has been a good indicator of our engineering capacity and a source of our pride.

However engineering pride is one thing, but the business performance is another. You had been informed through the last year annual business report as well that Patkol experienced a loss mostly from this new business venture, due to an unexpected and drastic price rise of major raw materials and oil. The unusual price fluctuation in turn was said to be the result of the future market trading of the world materials, which cost the prices to jump 100% in a very short time.

On the other hand, the prevailing problems of the company were not due to the external influences alone. The management has also recognized that the inefficiency of material requirement plans, stock keeping, internal communication and those other wastages of resources did exist within the company. The rectification of such internal problems has been carried out, step by step, by the management for sometimes.

But, to add to our company’s economic woe, another seemingly great world economic depression, which last year started to affect the economy on the global basis, did severely worsen ours and trading partners’ businesses and financial situations. Furthermore, beyond the damages to the financial transaction of the new business, our core business activities in some sectors also drop this year to almost 50 per cent level of the normal year. The situation requires that the management and the Board to come up with evasive and drastic measures to keep the company afloat for the time being and to find ways to revive our businesses for a longer term.

In the mean time, in order to keep the operating cost of the company as low as possible, the management has so far released redundant staff and work forces by almost 40% and tightened up our belt in many other areas. The Board members, with a gesture of responsibility, also mutually agreed to cut their stipends and meeting allowances in half. With the perseverance of the remaining experienced marketing and professional staff, and the determination of the management, we are all trying hard to keep Patkol out off the powerful storms. It is our belief that Patkol will not only survive the crisis, but will see the better days ahead. We only ask for patience from all stakeholders.

Asso Prof.Dr.Somchob Chaiyavej Chairman

Message from the President and Chairman of Management Committee

Dear Shareholders

In 2008, Thai economy was in a big storm with unprecendental increase in world price of raw material, such as, steel went up 100 % in one week and oil went up over 100 % in short time . The economic situation is compounded by our country unstable political situation. Patkol has been in bad situation since last year and with all these plus world economic crisis in the last quarter, we lose more.

In the second quarter, we had started to reduce our expense and put up plan to reduce workforce. At year end, we managed to reduce our workforce from 1,528 to 1,058. We had closed our King Kaew factory, and sent all the work to Patkol Manufacturing Co., Ltd., to reduce our expense and our workforce. Backlog as at December 31, 2008 1,096 Million baht which will allow us to work 70% for 4 mounts

At the same time, we have evaluate our work process and reengineer all the process to be shortened and are in harmony with our information technology. In the last quarter, we found that we can control cost and expense better and our management has up to date information on job management and cost control.

I prayed that Thailand political situation will improve and be stable and also pray that the world economic crisis will improve so that Patkol could have more orders that were pending by our customer. The management committee and I will try our best to sell our engineering expertise to any industry that we could see the chance of getting a contract.

Dr.Piya Chongvatana (President and Chairman of Management Committee)

Board of Directors Holding of Company’s Share None Member of the Board of other businesses In conflict of interest with the Company’s None Involvement in any lawsuits None during the past 10 yrs. Highest Academic Qualification Ph.D in Mechanical Engineering

(Purdue University, USA.) National Defense College, Class 28

Training Courses for Director DAP Director Accreditation Program Employment Records Past - Instructor at the Thai-German Tech Institute (TGTI) - Deputy Director of TGTI

- Dean, Faculty of Engineering, the King Mongkut’s Institute of Technology North Bangkok (KMITNB) - Vice President and President (KMITNB) - Member of the Board: University Education Bureau - Member of the Board of Investment (BOI) - Member: National Research Council in Science and Technology - Member of the Board: Thailand Institute for Science and Technology Research

Present - Member: Steering Committee Thai-German Institute for Production Technology (Ministry of Industry) - Member: National Parliament Civil Service Council - Senior Advisor to Joint-Venture Fund “One” for SME

Name Assoc. Prof. Dr. Somchob Chaiyavej Age 72 years

Nationality Thai Position Chairman of the Board

Date of Assuming of Office April 27, 2006

Number of Years in the Office 2.8 Year

Council President: North Bangkok College - Council Member: Rajmongkol (Tanya Buri) Technical University - Advisor to the Board of Investment - Advisor to the Board of Science and Technology Research Center(STRC) of King Mongkut’s Institute of Technology North Bangkok - Director , Dr.Piya Chongvatana Foundation Senior licensed Professional Engineer: วก. 419

Holding of Company’s Share 31,316,844 Ordinary shares Member of the Board of other businesses In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the past 10 years Highest Academic Qualification - Associated Degree in Applied Science in Air

Conditioning Engineering Technology, Milwaukee School of Engineering, Milwaukee, Wisconsin, USA. - Bachelor’s Degree in Mechanical Engineering,

Chulalongkorn University - The Honorary Degree of Doctor of Engineering in Mechanical

Engineer From King Mongkut’s Institute of Technology North Bangkok 2006

Employment Records Present : - Chairman, Patkol Manufacturing Co.,Ltd. - Chairman, Patkol R&D Co.,Ltd. - Chairman, Patkol (1984) Co.,Ltd.

Name Dr.Piya Chongvatana

Age 63 Years

Nationality Thai Position President Date of Assuming of Office June 28, 1993 Number of years in the Office 16 years

Chairman, Siam Patkol Co.,Ltd. - Chairman, Kaset Phet Co.,Ltd. - Director, PKB Enterprise Co.,Ltd. - Director, Prepack Thailand Co.,Ltd.

- Advisor to the Board of Science and Technology Research Center(STRC) of King Mongkut’s Institute of Technology North Bangkok - Honorary President ,Thai Refrigeration Association

- Honorary Director of ASHRAE Thailand Chapter - Vice President , Thai - Bangladesh Chamber of Commerce

- Director of The Federation of Thai Industries - Chairman, Dr.Piya Chongvatana Foundation

Engineering License Mechanical Senior Professional Engineer

Holding of Company’s Share 25,773,303 Ordinary shares Member of the Board of other businesses In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the post 10 years Highest Academic Qualification - Bachelor’s Degree in Electrical Engineering, King Mongkut’s institute of Technology North Bangkok

- Master Degree of Public Administration Employment Records Present : - Director, Patkol Manufacturing Co.,Ltd. - Director, Patkol (1984) Co.,Ltd.

Name Mr. Sangchai Chotechuangchutchaval Age 52 Years Nationality Thai Position Director Date of Assuming of Office May 26, 1998 Number of years in the Office 10 Years

Director, Siam Patkol Co., Ltd. - Director, Kaset Phet Co.,Ltd. - Director, Patkol R&D Co.,Ltd.. - Director, Dr.Piya Chongvatana Foundatio

Engineering License Professional Electrical Engineer (Power)

Holding of Company’s Share 12,624,151 Ordinary shares Member of the Board of other businesses In conflict of interest with the Company’s - none - Involvement in any lawsuits none during the post 10 years Highest Academic Qualification - University of Hawaii (By Ford Foundation Scholarship)

Master’s Degree in Library Studies and Demography - Master’s Degree in Demography, Chulalongkorn University

Employment Records Former : - Asso.Prof Chulalongkorn University Present: - Director, Patkol Manufacturing Co.,Ltd. - Director, Patkol (1984) Co.,Ltd. - Director, Siam Patkol Co., Ltd. - Director, Kaset Phet Co.,Ltd. -Director, Patkol R&D Co.,Ltd.. - Director, PKB Enterprise Co.,Ltd - Director and secretary , Dr.Piya Chongvatana Foundatio

Name Asso.Prof. Noppavan Chongvatana Age 60 Years Nationality Thai Position Director Date of Assuming of Office June,16,2000 Number of years in the Office 8 Years

Holding of Company’s Share 2,478,683 Ordinary shares Member of the Board of other businesses In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the post 10 years Highest Academic Qualification Master’s Degree in Business Administration, Faculty of Finance, Eastern Michigan University, USA. Training Courses for Director DCP Refresher Course Employment Records Former : - Investment Banking Officer, Patra Thanakij Plc. - Vice President Financial, Patkol Plc. Present : - Audit Committee’s Consultant, Patkol Plc. - Managing Director, Prepack Thailand Co., Ltd. - Director, PKB Enterprise Co.,Ltd.

Holding of Company’s Share -none- Member of the Board of other businesses In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the post 10 years Highest Academic Qualification - Bachelor’s Degree of Law, Thammasart University

- Barrister at Law

Name Mr.Paradon Chulajata Age 44 Years Nationality Thai Position Director Date of Assuming of Office June, 28, 1993 Number of years in the Office 16 years

Name Mr. Suchart Sooksumitr Age 72 Years Nationality Thai Position Director, Independent Director Date of Assuming of Office May, 28, 1996 Number of years in the Office 13 Years

Training Courses for Director - Accounting for Non-Accounting Audit Committee

Employment Records Former : - Judge, Ministry of Justice (26 years) last position, Judge of the Supreme Court of Thailand

Present : - Director and Chairman of Audit Committee, Patkol Plc.

- Legal Advisor

Holding of Company’s Share -none- Member of the Board of other businesses In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the past 10 years Highest Academic Qualification Master’s Degree in Business Administration, South Eastern

University, Washington DC, USA. Employment Records Present : - Director and Audit Committee, Patkol Plc. - Managing Director, Chiangmai Medical Services Plc.

- Managing Director, Thai Storage Battery Plc. Engineering License Mechanical Professional Engineer

Holding of Company’s Share -none-

Member of the Board of other businesses In conflict of interest with the Company’s -none-

Name Mr. Virachai Srikajon Age 55 Years Nationality Thai Position Director, Independent Director Date of Assuming of Office June 28, 1993 Number of years in the Office 16 years

Name Mr. Preecha Chantarangkul Age 65 Years Nationality Thai Position Director, Independent Director Date of Assuming of Office June 9, 1999 Number of years in the Office 10 Years

Involvement in any lawsuits none during the post 10 years Highest Academic Qualification Bachelor’s Degree in Business Administration, Faculty of Management, Thammasart University Training Courses for Director Audit Committee Program Employment Records Present : - Director and Audit Committee, Patkol Plc.

Holding of Company’s Share 22,504,917 Ordinary shares Member of the Board of other businesses In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the post 10 years Highest Academic Qualification Master’s Degree in Perfect Management, George Washington University Training Courses for Director DCP Refresher Course Employment Records Present : - Vice President, Thai Ice Club limited Holding of Company’s Share 64,799 Ordinary shares Member of the Board of other businesses

Name Miss Nongluck Sakdakrai Age 34 Years Nationality Thai Position Director Date of Assuming of Office June, 26,2000 Number of years in the Office 9 Years

Name Mrs. Anongsiri Chaiyakul Age 65 Years Nationality Thai Position Director Date of Assuming of Office January 14, 2004 Number of years in the Office 5 Years

In conflict of interest with the Company’s -none- Involvement in any lawsuits none during the post 10 years Highest Academic Qualification Bachelor’s Degree in Accounting, Thammasart University Training Courses for Director DAP Director Accreditation Program Employment Records Present : - Director, Patkol Manufacturing Co.,Ltd. - Director, Patkol (1984) Co.,Ltd. - Director, Siam Patkol Co., Ltd. - Director, Kaset Phet Co.,Ltd. -Director, Patkol R&D Co.,Ltd.. - Director, PKB Enterprise Co.,Ltd. - Director , Dr.Piya Chongvatana

Highest Education Record - Bachelor of Seines in Engineering Mechanical Engineering King M. - Master of Science in Engineering Management Majoring in Project Management has Jersey Institute of Technology.

Working Record Present : Executive Director-Administrator

Name Mr. Panet Chongvatana Age 33 Years Nationality Thai Position Director Date of Assuming of Office August 20, 2008 Number of years in the Office 5 Month

Management Committee

Name Dr.Piya Chongvatana Age 63 Years Nationality Thai Position President , Chairman of Management

Name Mr.Sangchai Chotechuangchutchaval Age 52 Years Nationality Thai Position Executive Director-Business Group1

Name Mr.Sombatt Srichainont Age 60 Years Nationality Thai Position Executive Director-Petrochemical Business

Name Mr. Sumet Jeambutr Age 55 Years Nationality Thai Position Executive Director-Production PKM

Name Mr. Panet Chongvatana Age 33 Years Nationality Thai Position Executive Director-General Affair

Name Mr.Kittisak Chaivut Age 40 Years Nationality Thai Position Executive Director – Ethanol Business

Name Mr.Adisak Poolsri Age 46 Years Nationality Thai Position Executive Director of Technical and Development

Major Events and Developments Major events in the past 7 years

In 2005. ♦ Patkol Manufacturing Co., Ltd started the production as per privileges received from B.O.I.

♦ One of the Company’s affiliated firms, Patkol R&D Co.,Ltd., was listed as a firm capable to carry out the research and development according the Law, thus, allowing the 2 times reduction for all the expenses on research and development work

Siam Patkol Co., Ltd terminated the rental of factory premises and moved to Patkol Public Company Limited factory at King Kaew Road, thus saving the rental fee ฿ 6 Million a year.

In 2006 Dr.Piya Chongvatana, the Company’s President, received the The Honorary Phd in Mechanical Engineer from King Mongkut’s Institute of Technology North Bangkok The Company Ceased operation of two companies in the group i.e. The Riple Plate Thailand Co.,Ltd. and P.K Business Solution Co.,Ltd. The company sold all the shares in both companies to private persons. The Company had successfully diversified into renewable energy business by signing contracts for the construction of ethanol plants for 2 customers namely :- 1) Rajburi Ethanol Co., Ltd., capacity 150,000 liters/day, Project value : 500 million baht, Construction period :18 months 2) T.P.K. Ethanol Co.Ltd., Nakonrajsrima, capacity 1,020,000 liters/day Project value : 2,921 million baht Construction period : 20 months The renewable energy business will boost the Company’s growth and having broader market.

In 2007 In April, the Company increased the registered capital from 320 million baht to 325 million and issued 33.7 million

preferential share capital at 3.62 baht per share or a total of 122 million baht specifically for the shareholders. In September, Warrants PATKL-W1 was due for the 3 year period.

The two projects of ethanol plant construction delivered progress as planned. The Rachaburi Ethanol plant is reaching its completion and will be in operation by April 2008. The PK. Ethanol plant will also be in operation in June 2008.

Opened a representative office in Indonesia to facilitate the existing clients and to support the expansion of investment base of The and foreigner investor.

In 2008 Patkol showed latency as built highest steel stack in Thailand which have 135 metre in PTT Project Rajburi Ethanal Co.,Ltd project had successfully and was operation 100% in September 2008 End of 2008, Moved manufacturing Department from factory’s King Kaew to Patkol Manufacturing Co., Ltd for

increase expenses.

General Information

Company name : Patkol Public Co.,Ltd. Registered No. : 0107536000587 (Bor Mor Jor 132) Company set up : 28 November 1965 by the Chongvatana families. Types of Business : 1) Manufacturer of tube ice maker, Block Ice

Plant and small ice maker. 2) Machineries and system for refrigeration industry.

3) Machineries and processor for liquid food (milk and beverage) 4) Machineries and equipment for food processing industry. 5) Turnkey Project.

6) Service Head office : 348 Chalerm Prakiat Rama 9 Rd., Nongbon, Pravate, Bangkok 10250, Thailand. Telephone : 662 3281035-49 Fax : 662 328-1058 , 662 328-1245 Homepage : www.patkol.com E-mail : [email protected] Registered Capital : 325,230,100 Baht with paid up capital of

272,230,101 Baht, divided into 238,486,001 general shares, 33,744,100 Prefer shares.

Past Record 12 February 1992 - Changed its name from Patanakolkarn Co., Ltd. To Patkol Co., Ltd.

31 March 1992 - Registered for public company with the Security Exchange of Thailand.

28 June 1992 - Registered as Public Company and changed its name to Patkol Public Co., Ltd.

9 September 2005 - Changed address From 20/14-15 Moo 10 Chalerm Prakiat Rama 9 Rd., Nongbon, Pravate, Bangkok 10250, Thailand. To 348 Chalerm Prakiat Rama 9 Rd., Nongbon, Pravate, Bangkok 10250, Thailand.

http://www.patkol.com/�

mailto:[email protected]�

Other References

Auditors

1. Mrs. Suvimon Krittayakiern CPA No. 2982 Office of DIA International Auditing 316/32 Sukhumvit Soi 22 Sukhumvit Rd., Klongtoey, Bangkok Thailand 10110 Tel : 02 259 5300 Fax : 02 260 1553

2. Mrs. Vilairat Rojnuckarin CPA No. 3104 Office of DIA International Auditing 316/32 Sukhumvit Soi 22 Sukhumvit Rd., Klongtoey, Bangkok Thailand 10110 Tel : 02 259 5300 Fax : 02 260 1553

Registrar Thailand Securities Depository Company Limited

62 The Stock Exchange of Thailand Building, 4, 6-7 Floor, Ratchadapisek Rd., Kongteaw, Bangkok 10110. Tel : 02 359 1200-49 Fax : 02 359 1259

Business Operation Patkol Public Company Limited

1) Ice Making Machine Business Unit: The product on tube ice making machines 1.5-80 tons, nugget ice machines 100-450 kgs. and block ice plant 100-2,400 cans. The ice machine business was still growing well in 2007 for domestic and abroad. We are exporting our machines to over 40 countries, majority in the Middle East. Our machines are manufactured to the ASME (American Society of Mechanical Engineering) standard.

2) Refrigeration Business Unit: This business unit is divided into large cold rooms section and small cold room section. The

products indeed are IQF freezer Air Blast Freezer and spare parts. There are also the Evaporative condenser unit, in which Patkol was the first firm in the world who manufactured stainless steel evaporative condenser since 1990. Patkol is also supplying “Bonnet” refrigeration Show-cases with well-known standard to all retail stores

3) Liquid Food Machine Business Unit : The unit is divided into machine and system for machine for dairy and beverage

industries. Patkol could design, manufacture and install the whole system as well as providing spare parts for milk Plant, beverage industries in both alcohol and non-alcohol including stainless steel tank with CIP system. Patkol could also design, manufacture and install systems and machine for liquid chemicals, or providing only stainless steel tank and piping works; most of the major parts are manufactured at the Company’s factory under ASME standard.

4) Solid Food Processing & Engineering Business Unit : The unit is divided into frozen food industry for meat, seafood,

vegetable and fruit and canning industry for tuna, vegetable and fruit. Pakol could design conveyor units, install the system and providing spare parts to suit customers’ enquiry, with efficient productivity and friendly to environment. Most of the machine parts are manufactured at the Company’s factory with hygienic design and safety standards.

5) Turnkey Project Business Unit : Patkol had a lot of experience in the construction of food processing plant as turnkey

project for both local market an aboard. With a team of more than 300 engineers in every fields to support the turnkey project by divided into 5 parts; civil construction, main machineries for production, supporting equipment, ethanol plant and project management .The Company had constructed an ethanol plant projects with the cooperation from Katzen International USA. on technology side.

6) Services & Maintenance Business Unit : Patkol found that the maintenance and service could be greatly expanded as most

customers begin to realize the importance of system maintenance and the small service provider could not give good program. The work of our Service Department has expended and it also gave us an opportunity to increase our sale as well.

Income structure of business group (local and abroad) 2008 PATKOL PUBLIC COMPANY LIMITED AND SUBSIDIARIES

Groups of Business Operated by % Total

Income Local

Total

Income abroad

Total

Income

Other Income

฿million % ฿million % ฿million % ฿million %

1. Group Maker - Ice making machine Patkol Plc. 100% 342.34 14% 173.98 53% 516.32 18% 3.94 14% - Showcases Siam Patkol Co.,Ltd. 99.98% 0.00 0% 0.00 0% 0.00 0% 0.00 0%

342.34 14% 173.98 53% 516.32 18% 3.94 14% 2.Group Machineries and System for Refrigeration Industry

- Cold room Patkol Plc. 100% 453.02 18% 54.64 17% 507.66 18% 2.43 9% - Cold room panels P.K.B.Enterprises Co.,Ltd. 80% 86.25 3% 0.00 0% 86.25 3% 0.93 3%

- others Patkol Manufacturing Co.,Ltd. 99.99% -40.96 -2% 0.00 0% -40.96 -1% 0.00 0%

498.31 20% 54.64 17% 552.94 19% 3.36 12%

3. Group Machine &System for liquid Processing - Food &Dairy Machineries Patkol Plc. 100% 558.61 22% 25.44 8% 584.06 21% 0.60 2%

558.61 22% 25.44 8% 584.06 21% 0.60 2%

4. Group Machineries and System for Food Processing

- Food Processing Machineries Patkol Plc. 100% 116.57 5% 24.68 8% 141.24 5% 1.32 5%

116.57 5% 24.68 8% 141.24 5% 1.32 5%

5. Group Turnkey Project - Special Project Patkol Plc. 100% 107.12 4% -5.68 -2% 101.44 4% 0.99 4% - Ethanol Patkol Plc. 100% 300.67 12% 0.00 0% 300.67 11% 0.00 0% - Liquid filtration Patkol Plc. 100% 329.11 13% 0.00 0% 329.11 12% 0.02 0% - Construction, Electrical and Automation system Patkol Plc. 100% 193.03 8% 4.35 1% 197.38 7% 0.00 0% - Construction, Electrical and Automation system Patkol (1984) Co.,Ltd. 99.98% 0.15 0% 0.00 0% 0.15 0% 0.00 0%

- Special Project Patkol Manufacturing Co.,Ltd. 99.99% 0.00 0% 0.00 0% 0.00 0% 0.00 0%

930.09 37% -1.33 0% 928.76 33% 1.01 4%

6. Group Maintenance and others - Services Patkol Plc. 100% 24.06 1% 0.66 0% 24.71 1% -0.33 -1% - Others Patkol Plc. 100% 1.92 0% 0.52 0% 2.44 0% 10.57 39% - Others Patkol (1984) Co.,Ltd. 99.98% 0.00 0% 0.00 0% 0.00 0% 0.50 2% Siam Patkol Co.,Ltd. 99.98% 0.00 0% 0.00 0% 0.00 0% 0.18 1%

Patkol Manufacturing Co.,Ltd. 99.99% 45.68 2% 47.19 14% 92.87 3% 6.09 22%

71.65 3% 48.37 15% 120.02 4% 17.01 62%

Total 2,517.56 100% 325.78 100% 2,843.34 100% 27.25 100%

Risk Factors

Risk in business operations 1. Risks from relying on major clients and suppliers

The Company had no risks from relying on major suppliers as it acquired raw materials both domestic and overseas. On the client aspect, the Company also had no risks for its core businesses which are ice making machine, refrigeration units because they are dispersed in various industries. For major business, If their wasn’t corporate contract for building and Ethanol remained from last year. The ratio would be less than 12% of its total revenues. 2. Risks from production

2.1 Fluctuating raw material prices Steel and stainless are crucial raw materials for the production. However, their prices will change in according to the global

pricing. So that It has risk from Fluctuating raw material prices but the prices had increased in the middle of year 2008. In the other hand, raw material prices increased continuously and sometime it was lack of market. The construction projects of the ethanol plant also required steel and stainless in very high volume, thus adversely affecting the Company by the price fluctuation.

2.2 Technology in new construction project The Company undertaking the ethanol plant construction projects and use KATZEN INTERNATIONAL where is world

leading American company to employ ethanol production technology using flour to maximize its capacity. The company already built manufacturing Ethanol project and could produce Ethanol higher than in contract. For more cost, The Company will keep cost information of project for future. This problem will not happen again because the company already know all of problem.

3. Management Risk

The Company has strong point in “Know How” so that in personal skills were important. The company has Technical and development department as to study and develop new machinery and to by the technical support center for every department to enable employees to substitute other workers. In 2008, The Company has policy in control expense and Temporary break in Technical and development and develop product for made income. So that this personal in sale department hasten to find income from investment company.

4. Financial risks 4.1 Risks from currency exchange rates The Company partially imported raw materials, causing debts in foreign currencies. Meanwhile, it has also gained revenues

from the export with the same currencies. As a result, the Company managed risks by making Natural hedges and Forward contracts to prevent potential risks from such exchange rates.

4.2 Risks from convertible preferential shares The Company may expose to risks from issuing convertible preferential shares since they require the Company to pay

cumulative dividend to such the shareholders at the rate of 7% per annum of the convertible preferential share offer price. The Company also has to compensate for the marginal amount in cash. The marginal amount from the market price of the Company’ ordinary share was lower than the convertible preferential share offer price (3.62 baht/share). As of the conversion to ordinary shares date on December 31,2008, the market price of the ordinary shares was 0.44 baht/share.

4.3 Risks form Capital Flow Insufficiency The Company invested in Ethanol manufacturing project and other contracture that it has not yet called for the substantial

amount of debts. The Company was well aware of the risks and began to seek the sources of funding. One way was to receive loans from several banks to use in its operations. However, in economy state for called from the substantial amount of debts was late. Especially, the customers which negotiation in adjust debt and Ethanol project’s customer (Project 2). However, The Company try to close follow by debtor which see from quality of new debtor in company.

Management

A. The Company’s Board of Directors :- as of December 31,2008 1. Asso.Prof.Dr.Somchob Chaiyavej Chairman , Independent Director 2. Dr.Piya Chongvatana Director 3. Mr. Sangchai Chotechuangchutchaval Director 4. Mr. Paradon Chulajata Director 5. Mr. Suchart Sooksumitr Director, Independent Director 6. Mr. Virachai Srikajon Director, Independent Director 7. Mr. Preecha Chantarangkul Director, Independent Director 8. Miss Nongluck Sakdakrai Director 9. Mrs. Anongsiri Chaiyakul Director 10. Asso.Prof. Noppavan Chongvatana Director 11. Mr.Panet Chongvatana Director and Company Secretary

B. The body of the nomination Committee and its independency At present there are 11 directors, comprising of independent directors, representative of major shareholders and directors from the internal management. In order that the directors would work efficiently, it was set that at least in one year there shall be 5 directors’ meeting. The agenda of each meeting shall be set up in advance and shall be sent to all the directors prior to each meeting. All the meeting consideration would be for the benefit of the shareholders with fairness and just to all involved. Each director would be allowed to give his opinion freely and between each agenda there would be sufficient time allowed for freely discussion. The Chairman would look after the meeting to make sure of the appropriate time.

C. The Board of Directors’ duty are :- 1) Set up the vision, missions and strategy on business operation for the company’s prosperity and stability as well as continuously

increase the value for shareholders. 2) Dedicate himself and his time for the Company, shall not seek self benefits and commit any conflict of interest. 3) Shall consider the operation plan and develop the company ability to be compatible internationally. 4) Check and follow up on the operation of business group and the company. There should be the regular reports as well as giving

policy to develop and adjust the business operation and company personnel. 5) Look after the risk management including the good governance policy to make sure that they meet the international standard. 6) Act according to the law, company’s objectives and regulations and resolution of the shareholders with honest for the benefits of

shareholders at present and in the long run. 7) Act according to the good governance and good practice for the director of the listed company as stipulated by the Stock

Exchange of Thailand and Securities and Exchange Commission. 8) Evaluate the company’s operation and work performance of the high level

management staff. 9) Support the ethic and moral of employees in all levels and realize the important of the internal control system which would help

reducing the risk on fraud, the over exercising of power as well as illegal practices. 10) Protecting the benefits of shareholders large and small according to their right and just. The shareholders should be able to

exercise their right in protecting their benefits as well as receiving correct, complete, transparency and disclose information that could be checked.

11) The Board of Directors authorized the directors, Management Committee, sub-committees and any person or jurisdiction individually or jointly carry out any function according to the Company’s

objective at remuneration set by the Board of Directors. The Board of Directors has the right to change or revoke the authority given as well as to replace with more suitable person. The newly appointed person should carry out his study according to the order, regulation as well as the policy set by the Board of Directors.

Managing Director : Scope of work of the Managing Director. The Managing Director has to manage the Company’ s general business which covers :-

1 Looking after the overall operation of the Company to meet the Company’s objectives. 2. Consider and screening all types of investment before presenting them to the Board of Directors. 3. Consider, prepare and provide the annual budget to be presented to the Board of Directors. 4. Authorized the payment to projects that meet the approval of the Board of Directors. 5. Authorized the appointment of various consultants deemed necessary for the business operation as well as carry out other

duties as authorized by Board of Director or directors, case by case.

“However, the Managing Director is not allowed to approve any business that he, himself or conflict person may gain or loss, or causing the conflict of interest to the company on its affiliated firms. Unless it was approved by the Company’s Board of Directors who had thoroughly considered the matter.” Subcommittees The Board of Directors has appointed sub-committees to thoroughly and efficiently scrutinize crucial and specific operations and report to the Board. The sub-committees comprise of :-

1. Management Committees A. List of the management committee as of December 31,2008

1. Dr.Piya Chongvatana Chairman of Management Committee President, Patkol Plc.

2. Mr. Sangchai Chotechuangchutchaval Vice Chairman of Management Committee Executive Director-Marketing 3. Mr. Sumet Jiambutr Executive Director-PKM Factory 4. Mr.Sombatt Srichainont Executive Director-Petrochemical Business

5. Mr. Kittisak Chaivut Executive Director-Ethanol Business 6. Mr. Panet Chongvatana Executive Director-General Affair 7. Mr.Adisak Poolsri Executive Director of Technical and Development

B. The body of the management committee

The Managing Director is the Company’s highest management personnel and shall act as Chairman of the Management Committee, comprising of 7 persons (including the Managing Director). This 7 Management Committee will manage, look after and be responsible on the company’s business operation as well as set up budget, controlling the expenses as well as put up policy on personnel under the agreement of the Company’s Directors

C. Scope of work of Management Committee. The Management Committee is responsible for all general duty; from planning as well as follow up and analysis. However, the major decisions such as increase or reducing of investment, the investment, the investment in other companies, etc. the Management Committee has to ask the Board of Directors for their decision.

2. The Audit Committee A. List of the Audit Committee as of December 31, 2008

1. Mr. Suchart Sooksumitr Chairman 2. Mr. Virachai Srikajorn Director 3. Mr. Preecha Chantarangkul Director and Secretary B . The body of the Audit Committee The Company appointed the audit committee which consists of 3 independent directors who are not in executive positions and qualified in accordance with the regulations of the Stock Exchange of Thailand(SET). One of these must have the understanding and experience in accounting and finance. The audit committee will be in the office for indefinite term, unless otherwise terminated by retirement or discharged by the Board of Directors or relieved from the directorship. C. Scope of authorities of the Audit Committee

1. To review the Company’s financial statement for their accurate and adequate disclosure.

2. To review the Company’s internal control system, risk management, and internal audit for their appropriateness and efficiency.

3. To review the Company’s compliance with the Security Exchange law, SET’s regulations and other relevant laws.

4. To determine, select, nominate, and propose remuneration for the Company’s auditor.

5. To determine the Company’s information disclosure in relation with linked transactions or potential conflict of interest for their correctness and completeness.

6. To act upon an assignment by the Board of Directors and approval by the audit committee.

7. To prepare the audit committee’s activities report by disclosing in the Company’s annual report which is signed by the chairman of the audit committee.

Responsibilities : The audit committee has direct responsibilities to the Board of Directors in connection with assigned duties and responsibilities. The Board of Director is also responsible for the Company’s operations towards third parties.

3. The Nominating Committee A. List of the appointment committee as of December 31, 2008

1 Mr. Suchart Sooksumitr Chairman 2. Mr. Virachai Srikajorn Director 3. Mr. Preecha Chantarangkul Director and Secretary B. The body of the nomination committee The nomination committee comprises of 3 members of the Board of Directors, who are appointed by the Board in according to the good corporate governance to select a director to replace the director resigning by rotation or vacant directorship.

C. Scope of authorities of the nomination committee 1. To select a qualified person for directorship or managing director. 2. To establish procedures and principles for the Company’s director and managing director selection for its transparency. 3. To determine and select a qualified person for the directorship and managing director and propose to the Board of Directors

meeting and/or the shareholders meeting for approval. Responsibilities : The Nominating Committee has direct responsibilities to the Board of Directors in connection with assigned duties and responsibilities. The Board of Director is also responsible for the Company’s operations towards third parties.

4. The Remuneration Committee A. List of the remuneration committee as of December 31, 2008 1. Mr. Suchart Sooksumitr Chairman 2. Mr. Preecha Chantarangkul Director 3. Miss Nongluck Sakdakrai Director B. The body of the remuneration committee The Board of Directors appointed the remuneration committee which consists of 3 directors and 2 of which are independent directors. The committee is responsible for determining and setting up remuneration for the Company’s directors by comparing with industries of the same type.

C. Scope of authorities of the remuneration committee :

1. To determine criteria for setting up remuneration for directors and managing director. 2. To establish procedures and principles for setting up fair and reasonable remuneration for directors and managing director and propose to the shareholders meeting for approval.

Secretary of the company In order to comply with good corporate governance of the listed companies under the Board of Directors’ responsibilities category, the Company has appointed Mr.Panet Chongvatana to be the secretary of the Company. Responsibilities : The secretary is responsible for arranging a Board of Directors and shareholders meeting. Filing the meeting minutes and directors’ profile, and supporting the Board of Directors’ performance pertinent to legal regulations.

1. Remuneration for Directors and Executives

The directors’ remuneration for the year 2008 is as follows :- Remuneration Remuneration rate

1.) The Company’s directors - Monthly remuneration (pension) * Chairman 52,500 Baht * Director 23,100 Baht /person -Meeting attendance payment * All directors 10,000 Baht/meeting

2.) Sub-committees - Audit Committee * Monthly remuneration 23,100 Baht /person - Nominating Committee * None - Remuneration Committee * None Remark : The shareholders meeting No.43 approved no payment of dividend for fiscal year ended December 31, 2007 as the

company operation is at a loss. Remarks : This amount did not include the remuneration paid to Management Committee who were not on the

Board. - The total remuneration paid to the Management Committee for the year 2008 was 26,784,745 Baht. - being salaries, bonuses, provident fund and others. Remarks : The paid remuneration were paid to :-

1. Company’s directors who were the Management Committee. 2. Management who were the Management Committee.

The total remuneration of employees The total remuneration for the 927 employees as of December 31, 2008 was 321,904,742 Baht as detailed below :

Remuneration Type Total mount (Baht) Wages/salary 287,078,079.00 Bonus 18,436,153.00 Incentive 1,347,654.00 Provident fund 6,780,004.00 Social security fund 8,262,852.00

Records of the Director’s meeting Audit Nominating Remuneration Board of

Name Committee Committee Committee Directors A B Total

1. Asso.Prof.Dr.Somchob Chaiyavej 4/4 0/6 4/10

2. Miss Ratchanee Chongvatana ** 0/4 1/6 1/10

3. Dr. Piya Chongvatana 4/4 6/6 10/10

4. Mrs. Vipa Chulajata ** 2/4 1/6 3/10

5. Mr.Sangchai Chotechuangchutchaval 4/4 6/6 10/10

6. Asso.Prof. Noppavan Chongvatana 0/4 6/6 6/10

7. Mr. Paradorn Chulajata * 5/10 3/4 6/6 9/10

8. Mr. Suchat Suksumitr 10/10 1/1 1/1 4/4 6/6 10/10

9. Mr. Veerachai Srikajorn 10/10 1/1 4/4 6/6 10/10

10. Mr. Preecha Jantrarangkul 10/10 1/1 1/1 4/4 6/6 10/10

11. Mrs.Anongsiri Chiyakul 4/4 6/6 10/10 12. Miss. Nongrak Sakdakrai 1/1 3/4 4/6 7/10

13. Mr.Panet Chongvatana *** 1/4 3/6 4/10 * Mr. Paradorn Chulajata is the advisor to the audit committee ** Mrs. Vipa Chulajata and Ms. Ratchanee Chongvatana had resigned from Company’s Director since June 18, 2008. **** Mr.Panet Chongvatana has been appointed to be a director in place of Ms.Ratchanee Chongvatana. Effective as on August 20, 2008. A = Ordinary Meeting , B = Extraordinary Meeting

Management Operation

The Company’s management team had acted according to the 15 Codes of Best Practices of Security Exchange of Thailand as per following details :-

1. Policy on corporate governance. The Company management team realized the importance of good corporate governance which had made the Company’s trust

worthy firm and gained trust from shareholders, customers, employees as well as society. The main practices of the company are :- 1. Treated all the shareholders fairly and in accordance with global standard business operation.

2. Established the good workforce in order to yield the highest value to the Company’s products in order to gain trust from customers.

3. Set up the operation target with clear strategy for the steady growth of business.

4. Set up the employee’s etiquette, however, while preparing this etiquette the employees should keep strictly the Company’ s motto which is sincere and intent

5. Arranged to have suitable internal control and constantly analyzing the management risks to make sure that the Company has certain risk in accordance to the situation.

6. The company will disclose the correct information to the shareholders and manage the transparency business.

2. Shareholders rights.

In 2006, the company held one ordinary shareholders meeting. The meetings was held at the Company’s premises for the convenience of the shareholders. Also, the company had sent the notice of the meeting and relevant documents to all the shareholders not less than 7 days before the meeting date. The company also provided the proxy form in case the shareholders were not able to participate.

3. Right of various groups of stakeholders. The Company are well aware that its operation involved various groups of stakeholders and had ensured that their rights are

protected and treated with care such as :-

1) The management and all the staff are trust worthy and would use their ability at the fullest. All the decisions are transparency and will yield the benefits to shareholders, customers, debtors and the public.

2) The management and staff will not disclose the company’s inside information to the public for their own benefits.

3) The management and staff will not do anything that would cause conflict of interest, without the Company’s

permission. 4) The Company has disclosed sufficient financial information basing on the accounting standard, security codes

and Security Exchange Committee.

5) The Company has disclosed the Company’s operation and be fair to all the shareholders and customers. 6) It is the Company’s policy to carry out a fair share to all the company’s competitors. 7) The company will not wrongly obtain inside information or secret of the competitors. 8) The Company is strictly responsible to all the agreements made with suppliers and debtors. 9) The Company gives suitable salary to all their staff basing on each individual knowledge, capability and

responsibility. 10) The Company has continuously supported the personnel development to ensure the sound standing of its staff. 11) The Company has followed all the rules and regulations of the labour laws and workman compensation. 12) The Company supported the public and community activities. 13) The Company will refrain from wrong doing that may damage the country reputation, natural resources and

environments. 14) The Company will not support any individual who may commit the outlaw business, doing harm to the public or

the country’s stability. The stakeholders’ rights are also prescribed in the Company’s ethics as follows :

• Customers The Company responds to customers’ needs with quality products and equitable services, loyalty, and protection of their interests as well as their confidential information.

• Shareholders The Company equally respects all shareholders’ rights and performs its businesses by efficiency, loyalty, transparency, and non-disclosure of information for its owns benefits, and disclosure of accurate and adequate financial information to shareholders.

• Employees The Company recruits and maintains qualified employees to carry out the performances as well as continuously improves their capabilities. For instance, the Company has provided an English class for employees who are in need for the language their career part and security. Furthermore, all remuneration and benefits are appropriately in line with their skills and capabilities such as Provident fund and special work allowance. These include safe and hygienic work place that facilitates effective working environment.

• Alliances and partners The Company collaborates with the partners in exchanging information for mutual benefits and upholds loyalty and fairness by encompassing all opinions, suggestions, and explanations.

• Society and environment

The Company has consistently continued to support social and environmental activities such as making donations to needy schools, charities, flooding victims, etc.

4. Shareholders Meeting According to the 1992 Public Company’ s Law, the Company would held General Shareholders’ meeting at least once a year to consider various matters as stipulated by law. During the meeting, the Company gave the right to shareholders to view their opinions and answer their queries. In each meeting, the Company’s directors, auditor and legal advisor were participated in order to give answers to the shareholders. In each meeting the Company’s Managing Director, as Chairman of the meeting had given sufficient time for each meeting agenda for shareholders queries.

5. Leadership and Vision. The Company’s directors perform their role in determining the Company’s policies, goals and budgets and follow up to ensure that all are efficiently practiced in order to yield the fullest benefits for shareholders.

Vision & Mission Vision Our goal is to be the world number one Ice Making Machines Producer and the leader of ASEAN in Food Machine Engineering and Refrigeration Technology. Mission 1. We will hold commitment to our customers and will always concern to the optimum benefits of our customers. 2. We will develop our human resources both in professional and management skills to be efficient and competitive. 3. We will be innovative and devoted to develop our machines and our technology to maintain the leading edges in all our businesses. 4. We will develop to be an IT organization with simplify work process and real time information for quick and correct decision. 5. We will contribute to the society and the environmental preservation The directors had set up internal audit committee for internal checking and set up efficient risk management with proper follow up during the directors meeting.

6. Conflict of Interest The Company has an adequate plan to avoid the conflict of interest (see detail on Management of Internal Information and

Connected Transaction) for the benefits of the Company, the shareholders and the public. However, the connected transactions are completely disclosed in the yearly report.

7) Business Ethic

The Company has a written code of ethics in the compliance manual, item 4, the code of Corporate ethics, which was given to all its staff so that they could conduct the business accordingly.

8) Balance of power in the Board of Directors Out of the 11 directors, 4 of them are Management directors and 4 are the independent directors, 3 of them, who hold the position of audit committee as well. Therefore, there are only 4 independent directors or 36.36% of the board.

9) Aggregation or segregation of positions The Company’s Chairman of the Board is independent and does not hold the position of managing director. The authority of the

board’s chairman and head of management team are clearly separated.

10) Directors and Management Remuneration The nominated directors for considering remuneration submitted their policy and scheme on remuneration to be paid to the company’s directors and management and had been adopted by the shareholders’ meeting. The remuneration paid for the year 2008 is shown in page 36 remuneration for directors and management.

11) Board of Directors’ Meetings The Board of Directors meetings were set well in advance each year. The meetings were held every 3 months, the Company will send the meeting agenda 7 days before each meeting date.

The Audit Committee’s meeting was held once a month and the date was set well in advance, the relevant documents were sent 7 days prior the meeting date.

12) Special Committees. The Company’s management set up special committee for particular matters such as audit committee, sub-committee for selecting auditors, sub-committee for remuneration. These special committees should report their work to the company’s management.

13) System Control and Internal Auditing. The Company has set up regulations to control the working procedures as well as having internal audit committee to recheck the work to ensure the work efficiency and constant internal check up in all process. The audit committee was allowed to work independently and in accordance to the global standard and reported directly to the Managing Director.

14) Management on Use of Internal Information

In 2008 , the Company reviewed the regulations and use of internal information to prevent crucial information and know-how from loss and/or to protect insiders/outsiders from using such information for their personal purposes. In case an employee or an

executive discloses the said information or makes use for his/her personal purpose or carries out any action that may cause the conflict of interest, such the person will be penalized.

15) Directors’ Report

The Company’s directors are responsible for the consolidated financial statements of the Company and its affiliated firms as well as yearly reports. The Audit Committee together with the independent auditors, are responsible for the balance sheets of the Company and its affiliated firms to make sure that those balance sheets are according to the acceptable accounting standard as stipulated by the Security Exchange Committee and Security Exchange Board.

16) Independence and Definition of the Independent Directors

The independent director, under the definition stipulated in the Company’s corporate governance policies, means an independent director who is qualified for his/her independency under the qualification of SET regulations and shall be able to equally take care of shareholders’ benefits and to prevent them from the conflict of interests. In addition, the directors will be able to attend the Board of Director meeting and provide their opinion independently, which con be detailed as follows : 1.) Hold shares not exceeding 0.5% of the paid-in capital in the Company, affiliated companies, joint companies, or other related companies. Whereas, the share holding will include a number of shares held by related parties. 2.) Do not involve in the management of the Company, affiliated companies, joint companies, other related companies, or the major shareholders and are not a worker, an employee, or a consultant who receive monthly salary from the Company, affiliated companies, joint companies, other related companies, or the major shareholders. 3.) Do not have any benefits or interests either directly or indirectly in finance and management of the Company, affiliated companies, joint companies, or the major shareholders and did not have such the said benefits or interests one year prior to appointment unless the Board of Directors has carefully considered and agreed that such the benefits or interests involvement will not affect the performance and their independent suggestion. 4.) Are not related or close relatives to the Executives or the Company’s major shareholders. 5.) Are not assigned as proxy to maintain interests for the Company’s directors, the major shareholders, or shareholders who are related to the major shareholder. 6.) Can perform, recommend, or report the results of performances as assigned by the Board of Directors without any control of management or major shareholders, including related persons or close relatives of the said parties.

17) Directors Nomination and Appointment Process

The Company has appointed and assigned the nomination sub-committee to establish principles and policies in lelecting a qualified person to assume the directorship in accordance with the Articles of Association and other relevant laws. The sub-committee also performs the selection of a qualified person and proposes for the directorship to fill the vacancy by which the committee will determine the education background and experience as well as his/her professionals as for facilitating the decision making of the Board of Directors and the shareholders.

Additionally, in every annual ordinary shareholder meeting, one-third of the directors will have to resign. If the number of directors cannot be divided into 3 part, the resignation will be made to a number close to the one-third. The resignation from the directorship in the first and second year after the registration in SET will be made by a draw. For the later years, the directors who are in the post for the longest period will make the resignation. The resigned directors, however, may be selected to resume the post. In case of vacancy due to other causes rather than retirement by rotation, the committee will select a qualified person who is not in prohibited quality under Section 68 of Public Company Limited Act 1992 A.D. to assume the directorship. Unless the term of the said director is less than 2 months, the person who assumes the directorship will be in his/her post only for the rest of the term of the former director. Whereas, the Company provides the shareholders meeting to appoint a director in accordance with the principles and procedures prescribed in the Articles of Association as follows :

1. ) One shareholder has a number of votes equal to the number of share(s) held. 2. ) Each shareholder can exercise all votes under Clause(1) to appoint one or more persons. In case of appointing many

persons to be the directors, the unequal number of votes cannot be specifically given to a particular person. 3. The person of the same number of vacant posts who receive the highest votes will be appointed as directors, In case of a tie,

causing the exceeding number of the vacancy, a draw will be made to obtain the required number.

The Company has not determined the maximum number of occasions a director can be re-elected, or his/her age, but will take into consideration his/her time, capabilities and knowledge devoted to the Company in performing duties.

18) Investors Relation

The Company has an investor relation unit which carries out the promotion and communication with shareholders investors as well as other interested persons in the Company’s performance. Any interested person can contact directly at office of president, Tel. 02-328-1035-49 Ext. 240 , 213 or visit the website www.patkol.com

Personnel As at December 31, 2008 , there were 927 employees, divided according to the main business lines as follows :-

Policy on Personal Department.

1. Develop, improve and modernize the Organization’ human resources management and its work could be efficiently appraised and measured.

2. Select knowledgeable staff, suitable for each position. 3. Keep the selected ones by giving them fair, motivated and competitive remuneration. 4. Build good relation between employers and between the company and employers. Improve working environment,

provide safety precaution, reducing accident as well as granting suitable fringe benefits. 5. Develop on workers skill through in-house and outside training.

Department Engineers Workers Others Total Management (E1-E3) Refrigeration (RF) Ice Machine (IM) Liquid processing (FD) Food processing (FPE) Turnkey (TK) Ethanol (ET) Services (SV) Finance & Accounting (AF+AC) Purchasing / Admin. / Personnel/Admin BU Technical & Development (T&D) Factory Personnel 1 (KK) Electrical Automation

- 20 22 44 14 27 48 1 - - 4

43 -

- 116 94 57 34

15 9 18 - - -

94 -

19 11 13 7 8 6 5 -

31 129

2 34 2

19 147 129 108 56 48 62 19 31

129 6

171 2

Total 223 437 267 927

Organization Chart

Internal Control

The audit committee meeting No. 10/2008 on December 19, 2008 carried out the evaluation on the Company’s internal control system and came to the conclusion on the internal control system sufficiency in 5 parts as follows:

Part 1. Organization and Environment The goals of the Company’s businesses are set up as clear, possible and measurable. The Company set up the organization structure that facilitates management to carry out efficient performance and achieve their goals and benefits of the company. The company also established and procedures for financial transaction, procurement, and other administrative operation based on partners and the Company’s interest.

Part 2. Risk Management The company manages all risks by consistently evaluating both internal and external factors that can be attributed to the cause of such risks and provided risk management measures, including monitoring its planned performance

Part 3 Operation Control of the management The management’s operations are clearly and independently separated by responsibilities such as approval, accounting and information technology, and assets management. The approval on transaction of the company with major shareholders, directors, executives, or other related parties to the said will be based on maximum interests of the Company as though of any person in general.

Part 4. Information Technology and Communication The Company always provides adequate crucial information as for facilitation decision making of the Board of Directors. He directors will be notified for a meeting appointment or provided necessary and adequate information for consideration 7 days prior to the meeting. Accounting record and other relevant document will be categorized and filed in accordance with accounting policy under generally acceptd accounting principles and business characteristics appropriateness.

Part 5. Monitoring System The company monitors general operations by comparing to the business purposes. The internal auditor will examine the compliance with the internal control system and directly report to the audit committee and examined parties. Any subject defects will be reported to the audit committee in due course as well as the progress on defect improvement to the management.

Audit Committee Corporate Governance Report of the year 2008

To Shareholders of Patkol Public Co., Ltd The audit committee is pleased to submit the annual audit committee report for the year and December 31, 2008 as follow: Patkol Public Co., Ltd’s Board of Directors appointed the Company’s audit committee, comprising of 3 directors who are

not in the management committee and have no interests in shareholding, namely Mr.Suchart Suksumitr, chairman or the audit committee, Mr.Virachai Srikajon and preecha Chantharangkul. In 2007, The audit committee had held 10 meetings for which the subject matters can be concluded as follow:

1. Corporate Governance The company has complied with the good corporate governance under business transparency and ethics to establish confidence towards the shareholders, investor, and other parties. The company has provided the good corporate governance in writing since 2003 onwards as shown in 56-1.

2. Supervision and financial Review The audit committee, together with the management and the auditor, has performed the review of both fiscal and annual financial statement for the year 2008 to assure that the company’s financial reports as well as the consolidated financial statement had been accurately prepared in accordance with the generally accepted accounting standard. The disclosure of information was adequate, accurate, credible and on time. Furthermore, such the reviews of the transaction disclosure between the company and its affiliated firms had also been made to assure that it has complied with the business condition and SET’s regulations

3. Supervision and Risk management The audit committee supervised the risk management on outstanding debtors, cash flow, loan structure by evaluating monthly risk management in according to risk factors or potentials, assessing the impact from such risks, and suggesting the measure for managing the said risks. The audit committee has found risk from major project (building Ethanol manufacturing factory). As recession in economy of the world and country including oil price which decrease in world market. So that may affect to own business stayed determine investment.

4. Internal Control System Evaluation The result of the internal control system evaluation was in line with those of the auditor who provided fiscal and annual report in that there was no subject matter or defects.

5. Internal Audit Supervision The audit committees often review the operation of the internal audit unit to assure its efficiency and independency.

6. The Selection of the auditor The audit committee has collaborated with the Company’s Board of Directors to consider and appointed the auditing firm, DIA, to be the auditor for the year 2009 for another term and set up the appropriate remuneration.

February 28, 2009 On behalf of the audit committee

(Suchart Sooksumitr) Chairman of the Audit Committee

Major Shareholders

List of names and ratio of shares owned of the first 10 major shareholders (information from the report on shares distribution as at December 31, 2008 )

No. Name of person / Private Co., No. of shares Percentage of shares

1. Mr. Piya Chongvatana 31,316,844 13.13 2. Mrs. Vipa Chulajata 31,116,475 13.05

3. Miss Ratchanee Chongvatana 28,879,942 12.11 4 Mr. Sangchai Chotchuangchutchaval 25,773,303 10.81

5. Miss Nongluck Sakdakrai 20,000,000 8.39

6. Thai NDVR Co.,Ltd. 13,307,950 5.58 7. Mrs. Noppavan Chongvatana 12,624,151 5.29

8. Mrs.Pornpana Sakdakrai 9,200,000 3.86

9. Swee Cheng Investment Pte. Ltd. 3,810,539 1.60

10 Mr.Panet Chongvatana 3,548,742 1.49

รวม 179,577,946 75.31

Transactions with Related Parties

Related transactions among the companies in Patkol Group were normal business to business traders. The pricing will be based on comparison of the prices and the market or a similar type of business by adding on profits as follows :

Pricing policies

Sales of products and services Costs plus profit of 10% or more Finished products – Costs plus profit of 5% or more

Procurement of products and services Costs plus profit of 5% or more

Rental and service fees for the buildings In accordance with the contracts 1.000-148,000 baht/month

Related Interest The interest rate of 6.875 – 7.75% per annum for lending and loan

In approving relate transactions, the Company has prescribed a clear authorization, based on the consideration of the balance between flexibility in normal business operations and proper internal control system. Such the subjects were consistently reviewed by the audit committee. For the related transactions, the Company has considered maximum benefits to the group by receiving and compensating in respect with a business type and in fair market price.

Result from Business Operation

In 2008, The Company obtained income which was come from sale revenue and also service sector less than 23%. Thus, majority income was transformed refrigeration business, group of major project business, machinery business and liquid and food business. Moreover, there were divided incomes to 2 types. Firstly, domestic income was 89% and secondly, international income was 11%. So that the income trendly decreased because of the company stayed still to establish the project of building Ethanol manufacturing Turing so the total income was less than estimated.

Business Operation Overall pictures of the past operation

The Company’s overall operation for 2007-2008 was as follows :- Unit : million baht

Consolidated (Million Baht) Year 2551 Year 2550 Variance

Total % Total % Total %

Sale and services income Cost of sales and service

2,843.34 (2,917.36)

100.0% -102.6%

3,672.78 (3,568.03)

100.0% -97.1%

(829.44) 650.67

-23% -18%

Gross profit (loss) (74.02) -2.6% 104.75 2.9% (178.77) -171%

Other income Selling expenses administration expenses Other expenses – Loss on impairment of assets Other expenses- Doubtful accounts Finance cost - Interest expenses

27.25 (130.39) (136.52)

(21.05) (70.09)

(143.21)

1.0% -4.6% -4.8% -0.7% -2.5% -5.0%

28.85 (77.77)

(171.03) 0.00

(45.61) (115.99)

0.8% -2.1% -4.7% 0.0%

-1.2% -3.2%

(1.60) (52.62)

34.51 (21.05) (25.30) (27.22)

-6% 68%

-20% N/A 55% 23%

Profit (Loss) before income tax (548.83) 3.2% 77 2.0% 39 50.2%

Income tax (3.39) -0.1% (2.38) -0.1% (1.01) 43%

Net profit (loss) (552.23) -19.4% (279.17) -7.6% (273.06) 98%

According to information, the result of lost on 2008 came from the reason of cost revenue and service sector growth 102.6%

Sale annual while in 2007, cost revenue and service sector was 97% of sale annual because the price of steel, metal and bronze rapidly has changed since 2007 and continue. Therefore, the company decided to negotiation raw material to stock keeping and this preparation process was to build Ethanol manufacturing so the company already deals contact to do this manufacturing. Further more, in 2008 the price of raw material was continue decrease then the company stayed still this project and the company was not gained payment from customer so they tried to reuse the raw material which means they avoided paying expense to buy new raw material.

Moreover, Pure civil project who was another customer of the company were no benefit if the company deal but the company had deal with because there already signed contact each other so we can analyze detail as following

The Operation of each Business Unit

1) Income from sales and services

Total Income Ice Making Machineries Turnkey Services Center Total

Million Baht Machine and for and Other

Industrial Liquid and food

Refrigeration processing

2551

Sale and services income - income 840.64 675.18 930.09 69.73 1.92 2,517.56 Sale and services income - Abroad 228.62 50.12 (1.33) 47.85 0.52 325.78

Total 1,069.26 725.30 928.76 117.58 2.44 2,843.34

Cost of sales (972.98) (587.59) (1,243.13) (114.84) 1.18 (2,917.36)

Gross profit (Loss) 96.28 137.71 (314.37) 2.74 3.62 (74.02)

Other Income Selling expenses administration expenses Finance cost - Interest expenses expenses- Doubtful accounts Income tax

7.30 0.00

(5.04) (25.28) (55.79)

0.00

1.92 0.00

(7.18) (9.97) (1.25)

0.00

1.01 0.00

(2.13) (51.63) (14.41)

0.00

(0.33) 0.00

(3.19) (0.52)

0.67 0.00

17.34 (130.39) (139.71)

(55.81) (0.13)

(3..39)

27.24 (130.39) (157.55) (143.21)

(70.91) (3.39)

Net profit (loss) 17.47 121.23 (381.53) (0.93) (308.47) (552.23)

% of profit per total sales %Gross profit per total sales % Net profit per total sales

38% 9% 2%

26% 19% 17%

33% -34% -41%

4% 2%

-1%

0% 148%

-12642%

100% -3%

-19%

Total Income Ice Making Machineries Turnkey Services Center Total

Million Baht Machine and for and Other

Industrial Liquid and food

Refrigeration processing

2550

Sale and services income - income 958.29 587.06 1,514.10 76.71 1.23 3,137.39 Sale and services income - Abroad 293.10 99.51 71.21 71.57 0.00 535.39

Total 1,251.39 686.57 7,585.31 148.28 1.23 3,672.78

Cost of sales (1,207.02) (623.55) (1,607.05) (130.40) 0.00 (3,568.02)

Gross profit (Loss) 44.37 63.02 (21.74) 17.88 1.23 104.76

Other Income Selling expenses administration expenses Finance cost - Interest expenses expenses- Doubtful accounts Other expenses – Loss on impairment of assets Income tax

13.06 (4.95)

0.00 (12.59) (39.85)

0.00 0.00

0.91 (0.98)

0.00 (4.39) (1.87)

0.00 0.00

2.16 (1.48)

0.00 (36.66)

(3.72)

0.00 0.00

0.38 (1.02)

0.00 (0.38) (0.17)

0.00 0.00

12.33 (69.34)

(127.11) (61.96)

0.00

(43.92) (2.38)

28.84 (77.77)

(127.11) (115.98)

(45.61)

(43.92) (2.38)

Net profit (loss) 0.04 56.69 (61.44) (16.69) (291.15) (279.17)

% of profit per total sales %Gross profit per total sales % Net profit per total sales

34% 4% 0%

19% 9% 8%

43% -1% -4%

4% 12% 11%

0% 100%

-23671%

100% 3%

-8% The company income in 2008 came from group refrigeration business estimated 38% from grand total, Group of major

project business 33%, machinery and liquid product and food business 26% from grand total According to mention before, the benefit was from refrigeration business, machinery business, and liquid product and food

increase from last year because of the company concentrated to control benefit such adaptation the cost to be suitable to the price and control budget. However, the company stayed still to build Ethanol manufacturing so this cost were including Petro chemical so the project from contractor and Ethanol project was delayed from 2007 and the company was lost benefit . Moreover, Potato which transformed to raw material was harmful to machinery so the company had to use high quality machinery (metal and steel). The project from pure civil made low benefit to the company because of the impact of world business crisis but the company had no choice so they had to accept that project.

Other income

There is compounded with the return of customer, compensation (income) for export products, benefit from currency exchange and assets sale income

Set up cost and sale revenue & service sector expense - The company had set up increasing because the company reused raw material from stock when raw material price was decrease

(in market) and the set up cost of pure civil project was cheap so the quality of result was poor as well then some work must fix so this was leaded to cost over run.

- The expenses are highly increased more than last year. Thus, when the company adaptation their self so some department were eliminated such as R&D department (temporary). The method to concern and analyze information could do 2 methods.

To compare between expense and administration. We can observe that in year 2008 higher than year 2007 approximately 18 million because of there had strangely expense i.e. Expense for R&D 14 million and expense support inventory value (incase of decrease inventory value) 14 million. Thus, if we consider, we are going to see those expense possibly reduce.

- The company exposed policy of reservation of debt so this policy was to superintend and to follow up debtor and because of ex-debtor and new-debtor was increased and the structure of debt had…………….. So the company needed to tight up the policy set the team to follow up closely to avoid facing problem.

- The company had high interest paid more than previous year because of loan for project Ethanol had return money quite slower than planning return of loan of the company.

Investment Policy

In 2008, the company had a limitation of budget for investment for dealing assets so they kept still maintenance budget (machinery) annual and expanding manufacturing budget which is belonged with PKB Enterprise Co., Ltd because of this was a investment continuing project since 2007. Restriction minor company and Co-operation Company.

Control of affiliated and joint companies The company had restriction policy to look after minor company and Co-operation Company to ensure an policy has been

being together and also support major company policy and method. Therefore, the company invested in expert business and even related to the company objective so to ensure that can keep capability, The manager restrict look after by setting team to establishment policy, budget, marketing structure and productivity as close as possible. Eventually, objective is to classify information and manage recourse with high capability and high useful to the company.

Financial Position and Results of Operation FINANCIAL POSITION AND RESULTS OF OPERATION PATKOL PUBLIC COMPANY LIMITED (Baht’000)

BALANCE SHEET AS AT DECEMBER 31 2008 2007 2006 2005

ASSETS CURRENT ASSETS Cash and cash equivalents 56,599 2.2% 59,884 2.0% 32,957 1.1% 97,649 3.9% Current investment - 0.0% - 0.0% 20,000 0.6% - 0.0% Accounts receivable - net 773,867 29.5% 494,330 16.4% 830,696 26.9% 564,267 22.6% Accounts receivable - related companies - net 905 0.0% 2,346 0.1% 80,957 2.6% 162,721 6.5% Installments receivables - net 55,459 2.1% 131,354 4.3% 162,979 5.3% 156,658 6.3% Unbilled revenues from sales and services – net 723,111 27.6% 1,173,380 38.8% 796,288 25.8% 441,324 17.7% Short term loans to related companies - 0.0% 5,850 0.2% 30,178 1.0% 17,882 0.7% Inventories – net 154,902 5.9% 181,821 6.0% 247,070 8.0% 251,183 10.0% Other current assets 155,024 5.9% 264,104 8.7% 165,182 5.4% 82,603 3.3%

Total Current Assets 1,919,868 73.2% 2,313,069 76.5% 2,366,307 76.7% 1,774,287 71.0%

NON-CURRENT ASSETS Installments receivables 6,602 0.3% 17,277 0.6% 27,137 0.9% 19,393 0.8% Deposits at bank with commitment 6,694 0.3% 1,260 0.0% 8,900 0.3% 9,964 0.4% Investments for using the equity method 113,248 4.3% 113,248 3.7% 113,248 3.7% 144,333 5.8% Property , plant and equipment -net 497,073 18.9% 512,345 17.0% 524,459 17.0% 517,906 20.7% Intangible assets - net 19,248 0.7% 19,248 0.6% 26,742 0.9% 6,747 0.3% Unused land in operations - net 19,624 0.7% 22,918 0.8% 19,248 0.6% 19,248 0.8% Other non-current assets 41,000 1.6% 22,671 0.8% 1,115 0.0% 7,739 0.3%

Total non-current assets 703,489 26.8% 708,966 23.5% 720,849 23.3% 725,330 29.0%

TOTAL ASSETS 2,623,357 100% 3,022,035 100% 3,087,156 100% 2,499,617 100%

LIABILITIES AND SHAREHOLDERS'EQUITY CURRENT LIABILITIES Bank overdrafts and short-term loans from financial institution 1,214,905 46.3% 1,538,335 50.9% 912,929 29.6% 761,154 30.5% Trade accounts payable 657,234 25.1% 444,186 14.7% 674,604 21.9% 308,539 12.3% Trade accounts payable - related parties 171,507 6.5% 32,325 1.1% 137,714 4.5% 90,106 3.6% Current portion of long-term debts 125,533 4.8% 52,942 1.8% 60,761 2.0% 158,651 6.3% Short-term loans from related persons and parties 0 0.0% 20,267 0.7% 0 0.0% 32 0.0% Financial liabilities - convertible preferred shares 117,846 4.5% 0 0.0% 0 0.0% 0 0.0% Collections in excess of earned revenues 240,026 9.1% 187,323 6.2% 316,742 10.3% 152,330 6.1% Other current liablilities 106,703 4.1% 130,459 4.3% 107,768 3.5% 80,265 3.2%

Total current liablities 2,633,753 100% 2,405,837 80% 2,210,518 72% 1,551,077 62%

NON-CURRENT LIABLITIES Long - term loans from related parties 50,000 1.9% 0 0.0% 0 0.0% 0 0.0% Liabilities under compromise agreement - net 13,865 0.5% 0 0.0% 0 0.0% 0 0.0% Long - term loans - net 2,924 0.1% 67,127 2.2% 109,670 3.6% 150,352 6.0% Liabilities under financial lease agreement - net 666 0.0% 5,884 0.2% 17,131 0.6% 25,756 1.0% Financial liabilities - convertible preferred shares 0 0.0% 117,846 3.9% 0 0.0% 0 0.0%

Total non-current liablities 67,456 2.6% 190,858 6.3% 126,802 4.1% 176,108 7.0%

Total liablities 2,701,209 103% 2,596,695 86% 2,337,319 76% 1,727,185 69%

SHAREHOLDERS’ EQUITY Convertible preferred shares 643 0.0% 643 0.0% 0 0.0% 0 0.0% Share capital - common shares authorized, issued and fully paid-up 238,486 9.1% 238,486 7.9% 238,486 7.7% 238,486 9.5% Premium on common shares 0 0.0% 0 0.0% 0 0.0% 0 0.0% Revaluation increment in land 321,922 12.3% 260,241 8.6% 260,241 8.4% 260,241 10.4% Retained earnings - Appropriated for reserve fund 32,000 1.2% 32,000 1.1% 32,000 1.0% 32,000 1.3% Unappropriated retained earnings -670,903 -25.6% -106,029 -3.5% 219,110 7.1% 241,705 9.7%

Total Shareholders’ Equity - net -77,852 -3.0% 425,341 14.1% 749,837 24.3% 772,432 30.9%

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,623,357 100% 3,022,035 100% 3,087,156 100% 2,499,617 100%

STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31 2008 2007 2006 2005

Sales and services income 2,715,057 100% 3,548,564 100% 3,620,564 100% 2,754,330 100% Costs of sales and services -2,864,821 -106% -3,517,997 -99% -3,319,604 -92% -2,504,118 -91%

Gross profit (loss) -149,764 -6% 30,567 1% 300,960 8% 250,212 9% Other income 22,927 1% 42,901 1% 43,585 1% 33,390 1% Selling expenses -130,387 -5% -171,027 -5% -195,771 -5% -146,003 -5% Administrative expenses -100,872 -4% -44,743 -1% 0 0% 0 0% Other expenses - Loss on impairment of assets -21,045 -1% 0 0% 0 0% 0 0% Other expenses - Doubtful accounts -70,772 -3% -45,608 -1% 0 0% 0 0%

NET INCOME FROM OPERATION -449,913 -17% -187,910 -5% 148,774 4% 137,599 5% Share of profits (losses) from investments for using the equity method 0 0% 0 0% 0 0% -1,299 0% Finance cost - Interest expenses -114,960 -4% -101,457 -3% -65,599 -2% -47,673 -2% Profit (Loss) before income tax -564,874 -21% -289,366 -8% 83,175 2% 88,627 3% Income tax 0 0% 0 0% -22,043 -1% -21,300 -1%

Profit (Loss) for the period -564,874 -21% -289,366 -8% 61,133 2% 67,327 2%

CASH FLOWS 2008 2007 2006 2005

CASH FLOWS FROM OPERATING ACTIVITIES: Profit (Loss) before income tax -564,874 -289,366 83,175 88,627 Adjustment 0 0 0 0 Equity (gain) loss from investments 0 0 0 1,299 Depreciation 49,535 49,844 45,289 39,549 Bad debt and doubtful accounts 119,344 45,608 13,579 -5,552 Unbilled receivable 398,661 -377,092 -354,963 45,063 Allowance for devaluation of inventories 18,510 2,262 2,725 302 Gain on sales of fixed assets -788 -1,753 -1,899 -1,716 Write off damaged fixed assets 26,178 986 1,092 15,064 Loss on impairment of assets 21,045 0 0 -16 Unrealized loss on exchange rate 695 1,811 -3,435 -255 Amortized intangible assets 7,038 6,842 3,902 1,320 Interest expenses 114,960 101,457 66,774 44,113 Profit (Loss) of operation before change in operating assets and liabilities 0 0 582 0

(Increase) Decrease in changes in parts of operating assets 190,304 -459,403 -143,180 227,798 Trade accounts receivable -341,034 297,791 -271,417 26,056 Accounts receivable - related parties 1,441 78,611 81,764 -147,714 Installments receivables 80,293 33,333 -19,756 39,761 Inventories 8,409 62,986 1,389 -27,930 Other current assets 108,904 -96,935 -81,584 -28,774 Other non-current assets 464 204 6,625 -464 Increase (Decrease) in changes in parts of operating liabilities 0 0 0 0 Trade accounts payable 311,485 -230,236 366,030 -60,668 Accounts payable - related parties 139,182 -105,389 47,608 45,016 Liabilities under compromise agreement -28,721 0 0 0 Collection in excess of earned revenues 52,703 -129,419 164,412 50,996 Other current liabilities -32,626 18,173 27,361 16,200 Cash generated from operation 490,804 -530,284 179,251 140,278 Interest paid -105,915 -96,760 -66,774 -44,113 Income tax paid -18,794 -23,925 -19,879 -21,764

Net cash provided by (used in) operating activities 366,096 -650,970 92,598 74,400

Cash flows from investing activities (Increase) Decrease in current investment 0 20,000 -20,000 0 (Increase) Decrease in short-term loans to related parties 5,850 24,328 -13,149 -14,378 Dividend received 0 0 0 48,411 (Increase) Decrease deposits at bank with commitment -5,434 7,640 1,064 -8,910 Cash received from sales of fixed assets 2,042 1,933 2,224 3,465 Cash paid for purchase of fixed assets -21,057 -38,896 -50,838 -70,863

Cash paid for purchase of intangible assets -3,745 -3,017 -23,897 -16 Cash received from recovery of capital 0 0 0 1,500 Cash paid for purchase of investments from minority interest 0 0 -30,000 0 Cash received (paid) from sales of investment 0 0 622 0 Cash received (paid) from sales of intangible assets 0 0 0 112 Decrease in other assets 0 0 0 -270

Net cash provided by (used in) investing activities -22,344 11,988 -133,973 -40,949

Cash flows from financing activities Increase (Decrease) in overdrafts and short-term loans from financial institutions -323,468 624,581 152,041 81,893 Cash received (paid) for short-term loans from related persons and companies -20,267 20,267 -32 -19 Cash received from long -term loan from related person 50,000 0 -38,821 7,069 Cash paid for long-term loans -42,055 -50,791 0 -45,000 Cash paid for redemption of debentures 0 0 -100,000 -100,000 Cash paid for liabilities under financial lease agreement -11,256 -10,817 -10,795 -4,946 Cash paid for dividend 0 -35,773 -23,849 0 Cash received from convertible preferred shares issuance 0 118,489 0 0 Cash received from increase inshare capital 0 0 0 0

Net cash provided by (used in) financing activities -347,046 665,956 -21,456 -61,003

Effect of change in exchange rate on cash 9 -47 303 -408 Net increase (decrease) in cash and cash equivalents -3,285 26,927 -64,691 -27,496 Cash and cash equivalents as at January 1 59,884 32,957 97,649 125,145

Cash and cash equivalents as at December 31 56,599 59,884 32,957 97,649

DATA PER SHARES (Baht) 2008 2007 2006 2005

Book Value per shares -0.33 1.78 3.14 3.24 Earnings per shares -2.37 -1.21 0.26 0.28 Cash Dividend per share 0.00 -0.15 -0.10 0.00 Stock Dividend per share 0.00 0.00 0.00 0.00

GROWTH RATE (%) 2008 2007 2006 2005

Total Assets -13% -2% 24% 3% Total Liabilities 4% 11% 35% 0% Sales and Services Income -23% -2% 31% 23% Cost and Expenses -16% 8% 33% 22% Net Income -95% -573% -9% 28%

FINANCIAL RATIO 2008 2007 2006 2005

LIQUIDITY RATIO :

Liquidity Ratio (Time) 0.7 1.0 1.1 1.1

Quick Ratio (Time) 0.6 0.8 0.5 0.6

Liquidity Ratio - Cash (Time) 0.1 -0.3 0.0 0.1

Account Receivable-Turnover (Time) 1.6 4.5 3.4 3.0

Average no.of day for collection (days) 224 81 106 120

Inventory Turnover (Time) 17 23 19 13

Average no.of day for sales (days) 21 16 19 27

Account Payable-Turnover (Time) 4 5 5 6

Average no.of day for payment (days) 82 66 66 58

Cash Cycle (days) 163 31 60 89

PROFITABILITY RATIO : 0 0 0 0

Gross margin (%) -6% 1% 8% 9%

Operation profit margin (%) -17% -5% 4% 5%

Other Profit Margin (%) 1% 1% 1% 1%

Cash to profitability ratio (%) -81% 346% 62% 54%

Net profit margin (%) -21% -8% 2% 2%

Return on equity (%) -325% -49% 8% 9%

EFFICIENCY RATIO : 0 0 0 0

Return on Assets (%) -20% -9% 2% 3%

Return on Fixed Assets (%) -102% -46% 20% 21%

Assets Turnover (Times) 1 1 1 1

FINANCIAL POLICY RATIO : 0 0 0 0

Debt to Equity Ratio (Time) -35 6 3 2

Time Interest Earned (Time) 4 5 3 3

Cash debt coverage(Cash basis) (Time) -4 7 0 0

Dividend payout ratio(%) 0% 12% 39% 0%

FINANCIAL POSITION AND RESULTS OF OPERATION PATKOL PUBLIC COMPANY LIMITED AND SUBSIDIARIES (Baht”000)

BALANCE SHEET AS AT DECEMBER 31 2008 2007 2006 2005

ASSETS CURRENT ASSETS Cash and cash equivalents 64,307 2.0% 72,143 2.0% 54,631 1.5% 106,487 4.0% Current investment 11 0.0% 11 0.0% 20,010 0.6% 10 0.0% Accounts receivable - net 788,454 24.9% 518,128 14.1% 880,578 24.7% 594,411 22.1% Accounts receivable - related companies - net 513 0.0% 346 0.0% 342 0.0% 811 0.0% Installments receivables - net 55,459 1.7% 131,354 3.6% 162,979 4.6% 156,658 5.8% Unbilled revenues from sales and services – net 729,413 23.0% 1,182,447 32.2% 808,567 22.7% 462,099 17.2% Short term loans to related companies - 0.0% - 0.0% - 0.0% - 0.0% Inventories – net 460,341 14.5% 573,106 15.6% 490,720 13.8% 428,019 15.9% Other current assets 133,492 4.2% 241,534 6.6% 177,767 5.0% 104,932 3.9%

Total Current Assets 2,231,991 70.4% 2,719,067 74.1% 2,595,595 72.9% 1,853,428 68.9%

NON-CURRENT ASSETS - - - - Installments receivables 6,602 0.2% 17,277 0.5% 27,137 0.8% 19,393 0.7% Deposits at bank with commitment 7,962 0.3% 2,503 0.1% 10,104 0.3% 11,295 0.4% Investments for using the equity method - 0.0% - 0.0% - 0.0% - 0.0% Property , plant and equipment -net 824,002 26.0% 842,749 23.0% 857,716 24.1% 746,421 27.7% Intangible assets - net 38,691 1.2% 38,691 1.1% 29,118 0.8% 42,460 1.6% Unused land in operations - net 20,534 0.6% 24,588 0.7% 38,691 1.1% 7,506 0.3% Other non-current assets 41,593 1.3% 22,820 0.6% 1,361 0.0% 9,345 0.3%

Total non-current assets 939,384 29.6% 948,628 25.9% 964,127 27.1% 836,420 31.1%

TOTAL ASSETS 3,171,375 100% 3,667,695 100% 3,559,722 100% 2,689,848 100%

LIABILITIES AND SHAREHOLDERS'EQUITY CURRENT LIABILITIES Bank overdrafts and short-term loans from financial institution 1,411,217 44.5% 1,693,010 46.2% 959,555 27.0% 804,240 29.9% Trade accounts payable 737,109 23.2% 665,623 18.1% 918,382 25.8% 395,964 14.7% Trade accounts payable - related parties 198 0.0% 293 0.0% 355 0.0% 390 0.0% Current portion of long-term debts 245,965 7.8% 75,557 2.1% 68,837 1.9% 160,095 6.0% Short-term loans from related persons and parties 13,000 0.4% - 0.0% - 0.0% - 0.0% Financial liabilities - convertible preferred shares 117,846 3.7% - 0.0% - 0.0% - 0.0% Collections in excess of earned revenues 240,026 7.6% 189,078 5.2% 322,777 9.1% 153,246 5.7% Other current liablilities 113,347 3.6% 142,362 3.9% 124,724 3.5% 91,761 3.4%

Total current liablities 2,878,708 91% 2,765,923 75% 2,394,629 67% 1,605,696 60%

NON-CURRENT LIABLITIES Long - term loans from related parties 50,000 1.6% - 0.0% - 0.0% - 0.0% Liabilities under compromise agreement - net 44,759 1.4% - 0.0% - 0.0% - 0.0%

STATEMENT OF INCOME FOR THE YEAR ENDED

DECEMBER 31 2008 2007 2006 2005

Sales and services income 2,843,342 100% 3,672,781 100% 3,779,433 100% 2,725,504 100%

Costs of sales and services -

2,917,362 -106% -3,568,029 -99% -

3,377,482 -92% -2,442,795 -91%

Gross profit (loss) -74,020 -6% 104,752 1% 401,951 8% 282,709 9% Other income 27,251 1% 28,852 1% 31,510 1% 35,571 1% Selling expenses -130,387 -5% -77,767 -5% -228,541 -5% -174,110 -5% Administrative expenses -136,517 -4% -171,027 -1% 0 0% 0 0% Other expenses - Loss on impairment of assets -21,045 -1% 0 0% 0 0% 0 0% Other expenses - Doubtful accounts -70,904 -3% -45,608 -1% 0 0% 0 0%

NET INCOME FROM OPERATION -405,622 -17% -160,797 -5% 204,920 4% 144,170 5% Share of profits (losses) from investments for using the equity method 0 0% 0 0% 0 0% 0 0% Finance cost - Interest expenses -143,211 -4% -115,994 -3% -77,214 -2% -50,491 -2% Profit (Loss) before income tax -548,833 -21% -276,791 -8% 127,706 2% 93,679 3% Income tax -3,394 0% -2,381 0% -25,801 -1% -24,812 -1%

Profit (Loss) for the period -552,227 -21% -279,172 -8% 101,905 2% 68,867 2%

Attributable to :

Long - term loans - net

134,924 4.3% 231,127 6.3% 284,400 8.0% 270,351 10.1%

Liabilities under financial lease agreement - net 666 0.0% 7,452 0.2% 20,043 0.6% 30,206 1.1%

Financial liabilities - convertible preferred shares - 0.0% 117,846 3.2% - 0.0% - 0.0%

Total non-current liablities 230,349 7.3% 356,426 9.7% 304,443 8.6% 300,557 11.2%

Total liablities 3,109,057 98% 3,122,348 85% 2,699,072 76% 1,906,253 71%

SHAREHOLDERS’ EQUITY

Convertible preferred shares 643 0.0% 643 0.0% - 0.0% - 0.0%

Share capital - common shares authorized, issued and fully paid-up 238,486 7.5% 238,486 6.5% 238,486 6.7% 238,486 8.9%

Premium on common shares 0 0.0% 0 0.0% - 0.0% - 0.0%

Revaluation increment in land 329,439 10.4% 260,241 7.1% 260,241 7.3% 260,241 9.7%

Retained earnings - Appropriated for reserve fund 32,000 1.0% 32,000 0.9% 32,000 0.9% 32,000 1.2%

Un appropriated retained earnings -550,520 -17.4% 2,248 0.1% 318,304 8.9% 241,705 9.0%

Total shareholders' equity 50,048 1.6% 533,618 14.5% 849,031 23.9% 772,432 28.7%

Minority interest 12,270 0.4% 11,729 0.3% 11,620 0.3% 11,162 0.4%

Total Shareholders’ Equity - net 62,318 2.0% 545,347 14.9% 849,031 23.9% 772,432 28.7%

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 3,171,375 100% 3,667,695 100% 3,559,723 100% 2,689,847 100%

Equity holders of the parent -552,767 -19% -280,283 -8% 100,447 3% 67,327 2%

Minority interests of subsidiaries 540 0% 1,111 0% 1,458 0% 1,539 0%

-552,227 -19% -279,172 -8% 101,905 3% 68,866 3%

CASH FLOWS 2008 2007 2006 2005

CASH FLOWS FROM OPERATING ACTIVITIES: Profit (Loss) before income tax -548,833 -276,791 127,706 93,679 Adjustment 0 0 0 0 Equity (gain) loss from investments 0 0 0 0 Depreciation 77,643 77,174 64,351 47,843 Bad debt and doubtful accounts 119,461 45,608 13,577 -5,579 Unbilled receivable 401,243 -373,879 -346,469 35,961 Allowance for devaluation of inventories 19,906 2,883 2,864 297 Gain on sales of fixed assets -882 -1,759 -1,895 -383 Write off damaged fixed assets 26,178 1,382 1,107 14,245 Loss on impairment of assets 21,045 2,382 3,769 0 Unrealized loss on exchange rate 725 1,539 -3,055 -275 Amortized intangible assets 7,833 7,705 4,275 1,513 Interest expenses 143,211 115,994 78,678 48,406 Profit (Loss) of operation before change in operating assets and liabilities 0 0 209 0 (Increase) Decrease in changes in parts of operating assets 267,530 -397,763 -54,883 235,707 Trade accounts receivable -331,588 323,851 -291,609 21,854 Accounts receivable - related parties -167 -4 470 283 Installments receivables 80,293 33,333 -19,756 39,761 Inventories 92,859 -85,269 -65,565 -158,732 Other current assets 106,318 -57,760 -72,862 -44,747 Other non-current assets 181 301 7,983 95 Increase (Decrease) in changes in parts of operating liabilities 0 0 0 0 Trade accounts payable 70,854 -252,551 522,724 -25,759 Accounts payable - related parties -95 -62 -35 166 Liabilities under compromise agreement 103,081 0 0 0 Collection in excess of earned revenues 50,948 -133,700 169,531 56,974 Other current liabilities -41,260 10,866 33,253 -34,237 Cash generated from operation 398,955 -558,758 229,251 91,365 Interest paid -134,655 -116,477 78,678 48,406 Income tax paid -18,953 -27,766 22,652 28,859

Net cash provided by (used in) operating activities 245,346 -703,002 330,581 168,630

Cash flows from investing activities 0 0 0 0 (Increase) Decrease in current investment -0 20,000 -20,000 0 (Increase) Decrease in short-term loans to related parties 0 0 0 0 Dividend received 0 0 0 0

(Increase) Decrease deposits at bank with commitment -5,460 7,601 1,192 -8,918 Cash received from sales of fixed assets 2,142 1,938 8,317 4,669 Cash paid for purchase of fixed assets -38,181 -62,276 -180,380 -171,406 Cash paid for purchase of intangible assets -3,780 -3,175 -472 -455 Cash received from recovery of capital 0 0 0 0 Cash paid for purchase of investments from minority interest 0 0 0 0 Cash received (paid) from sales of investment 0 0 0 0 Cash received (paid) from sales of intangible assets 0 0 0 112 Decrease in other assets 0 0 -25,887 -270

Net cash provided by (used in) investing activities -45,278 -35,912 -217,230 -176,269

Cash flows from financing activities 0 0 0 0 Increase (Decrease) in overdrafts and short-term loans from financial institutions -281,851 732,899 155,315 115,169 Cash received (paid) for short-term loans from related persons and companies 0 0 0 0 Cash received from long -term loan from related person 50,000 0 0 127,069 Cash paid for long-term loans 23,976 -47,021 22,409 -45,000 Cash paid for redemption of debentures 0 0 -100,000 -100,000 Cash paid for liabilities under financial lease agreement -13,039 -12,122 -12,577 -6,202 Cash paid for dividend 0 -35,773 -24,850 -651 Cash received from convertible preferred shares issuance 0 0 0 0 Cash received from increase inshare capital 0 0 0 0

Net cash provided by (used in) financing activities -220,913 637,984 40,297 90,385

Effect of change in exchange rate on cash 9 -47 303 -417 Net increase (decrease) in cash and cash equivalents -7,836 17,511 -51,856 -69,849 Cash and cash equivalents as at January 1 72,143 54,631 106,487 176,336

Cash and cash equivalents as at December 31 64,307 72,143 54,631 106,487

DATA PER SHARES (Baht) 2008 2007 2006 2005

Book Value per shares 0.21 2.24 3.56 3.24 Earnings per shares -2.32 -1.17 0.43 0.29 Cash Dividend per share 0.00 -0.15 -0.10 -0.00

Stock Dividend per share 0.00 0.00 0.00 0.00

GROWTH RATE (%) 2008 2007 2006 2005

Total Assets -14% 3% 32% 9% Total Liabilities 0% 16% 42% 9% Sales and Services Income -23% -3% 39% 14% Cost and Expenses -15% 7% 38% 12%

Net Income -98% -374% 48% 28%

FINANCIAL RATIO 2008 2007 2006 2005

LIQUIDITY RATIO : Liquidity Ratio (Time) 0.7 1.0 1.1 1.1 Quick Ratio (Time) 0.6 0.8 0.5 0.6 Liquidity Ratio - Cash (Time) 0.1 -0.3 0.0 0.1 Account Receivable-Turnover (Time) 1.6 4.5 3.4 3.0 Average no.of day for collection (days) 22.4 81 106 120 Inventory Turnover (Time) 17 23 19 13 Average no.of day for sales (days) 21 16 19 27 Account Payable-Turnover (Time) 4 5 5 6 Average no.of day for payment (days) 82 66 66 58 Cash Cycle (days) 163 31 60 89 PROFITABILITY RATIO : Gross margin (%) -6% 1% 8% 9% Operation profit margin (%) -17% -5% 4% 5% Other Profit Margin (%) 1% 1% 1% 1% Cash to profitability ratio (%) -81% 346% 62% 54% Net profit margin (%) -21% -8% 2% 2% Return on equity (%) -325% -49% 8% 9% EFFICIENCY RATIO : Return on Assets (%) -20% -9% 2% 3% Return on Fixed Assets (%) -102% -46% 20% 21% Assets Turnover (Times) 1 1 1 1 FINANCIAL POLICY RATIO : Debt to Equity Ratio (Time) -35 6 3 2 Time Interest Earned (Time) 4 5 3 3 Cash debt coverage(Cash basis) (Time) -4 7 0 0

Dividend payout ratio(%) 0% 12% 39% 0%

AUDITOR'S REPORT AND FINANCIAL STATEMENTS

PATKOL PUBLIC COMPANY LIMITED AND SUBSIDIARIES

AS AT DECEMBER 31, 2008 AND 2007

AUDITOR’S REPORT To The Shareholders of PATKOL PUBLIC COMPANY LIMITED

I have audited the consolidated balance sheets of PATKOL PUBLIC COMPANY LIMITED AND

SUBSIDIARIES and the separate balance sheets of PATKOL PUBLIC COMPANY LIMITED as at December 31, 2008 and 2007, and the related consolidated statements of income and separate statements of income, consolidated statements of changes in shareholders’ equity and separate statements of changes in shareholders’ equity, and consolidated statements of cash flows and separate statements of cash flows for the years then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the consolidated financial statements and the separate financial statements referred to above present fairly, in all material respects, the consolidated financial position of PATKOL PUBLIC COMPANY LIMITED AND SUBSIDIARIES and the separate financial position of PATKOL PUBLIC COMPANY LIMITED as at December 31, 2008 and 2007, the results of their and its operations and cash flows for the years then ended in conformity with generally accepted accounting principles.

Office of D I A International Auditing

(Mrs. Suvimol Krittayakiern)

C.P.A. (Thailand)

Registration No. 2982

March 1, 2009


BALANCE SHEETS


Assets Consolidated (Baht) Separated (Baht)

Note 2008 2007 2008 2007

Current assets

Cash and cash equivalents 7 64,306,765 72,142,666 56,599,117 59,883,968

Current investments 11,067 10,812 0 0

Trade accounts receivable - net 8 788,453,986 518,127,592 773,867,333 494,329,545

Accounts receivable - related parties 29 512,649 345,831 904,919 2,346,145

Installments receivable due within one year 9 55,459,298 131,354,379 55,459,298 131,354,379

Unbilled receivable 10 729,413,461 1,182,446,584 723,111,488 1,173,379,738

Short - term loans to related parties 29 0 0 0 5,850,000

Inventories - net 11 460,341,033 573,105,501 154,902,146 181,821,468

Other current assets

Retentions 25,372,810 30,283,034 25,372,810 30,283,034

Advance payment 29 59,920,943 89,249,084 96,109,980 141,551,945

Receivable - Revenue Department 15,365,585 70,218,826 3,794,471 46,258,387

Advance receivable 4,875,380 21,839,206 4,875,380 21,839,206

Others 27,957,712 29,943,455 24,871,474 24,171,109

Total current assets 2,231,990,689 2,719,066,970 1,919,868,416 2,313,068,924

Non-current assets

Installments receivable - net 9 6,602,196 17,276,954 6,602,196 17,276,954

Deposits at bank with commitment 12 7,962,244 2,502,670 6,693,537 1,260,000

Long-term investments in subsidiaries 13 0 0 113,248,325 113,248,325

Property, plant and equipment - net 14 824,001,697 842,749,370 497,072,911 512,345,034

Non-performed land - net 15 38,691,250 38,691,250 19,247,500 19,247,500

Intangible assets - net 16 20,534,422 24,587,837 19,624,243 22,917,884

Other non-current assets

Withholding income tax 40,713,482 21,760,293 40,553,980 21,760,293

Others 879,059 1,060,043 446,000 910,387

Total non-current assets 939,384,350 948,628,417 703,488,692 708,966,377

Total assets 3,171,375,039 3,667,695,387 2,623,357,108 3,022,035,301

Notes to financial statements are parts of these financial statements.

These financial statements have been approved by the shareholders' general

meeting No. ……………..held on………………

I do hereby certify that the above financial statements are correct in all aspects.


BALANCE SHEETS (Cont.)


Liabilities and shareholders' equity Consolidated (Baht) Separated (Baht)

Note 2008 2007 2008 2007

Current liabilities

Overdrafts and short-term loans

from financial institutions 17 1,411,217,469 1,693,009,846 1,214,904,873 1,538,335,209

Trade accounts payable 737,109,126 665,623,432 657,233,857 444,185,797

Trade accounts payable - related parties 29 197,593 292,557 171,506,959 32,324,850

Current portion of long-term debts 18 245,965,172 75,557,104 125,533,288 52,942,333

Short-term loans from related persons

and parties 29 13,000,000 0 0 20,267,067

Financial liabilities - convertible

preferred shares 22 117,845,894 0 117,845,894 0

Other current liabilities

Collections in excess of earned revenues 240,025,504 189,077,672 240,025,504 187,322,857

Accrued expenses 31,566,730 59,018,197 30,033,217 50,813,361

Retentions 51,885,771 39,841,422 51,885,771 39,841,422

Others 29,894,525 43,502,506 24,783,781 39,804,180

Total current liabilities 2,878,707,784 2,765,922,736 2,633,753,144 2,405,837,076

Non-current liabilities

Long - term loans from related parties 29 50,000,000 0 50,000,000 0

Liabilities under compromise agreement - net 19 44,758,947 0 13,865,415 0

Long - term loans - net 20 134,924,445 231,127,302 2,924,445 67,127,302

Liabilities under financial lease

agreement - net 21 666,071 7,452,366 666,071 5,884,462

Financial liabilities - convertible

preferred shares 22 0 117,845,894 0 117,845,894

Total non-current liabilities 230,349,463 356,425,562 67,455,931 190,857,658

Total liabilities 3,109,057,247 3,122,348,298 2,701,209,075 2,596,694,734



BALANCE SHEETS (Cont.)


Liabilities and shareholders' equity (cont.) Consolidated (Baht) Separated (Baht)

Note 2008 2007 2008 2007

Shareholders' equity

Share capital 22

Authorized share capital

33,744,100 preferred shares

of Baht 1 each 33,744,100 33,744,100

33,744,100

33,744,100

291,486,000 common shares

of Baht 1 each 291,486,000 291,486,000

291,486,000

291,486,000

Issued and paid-up share capital

Convertible preferred shares 22 643,139 643,139

643,139

643,139

238,486,001 common shares

of Baht 1 each 238,486,001 238,486,001

238,486,001

238,486,001

Premium on common shares 4 4

4

4

Revaluation surplus on fixed assets 23 329,438,791 260,240,615

321,921,991

260,240,615

Retained earnings

Appropriated - legal reserve 24 32,000,000 32,000,000

32,000,000

32,000,000

Unappropriated 25 (550,519,653) 2,248,317 (670,903,102) (106,029,192)

Total shareholders' equity 50,048,282 533,618,076 (77,851,967)

425,340,567

Minority interest 12,269,510 0 0

11,729,013

Total shareholders' equity and

minority interest 62,317,792 545,347,089 (77,851,967)

425,340,567

Total liabilities and shareholders' equity 3,171,375,039 3,667,695,387 2,623,357,108 3,022,035,301



STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

Consolidated (Baht) Separated (Baht)

Note 2008 2007 2008 2007

Sales and services income 29 2,843,342,124 3,672,780,909 2,715,057,002 3,548,563,880

Cost of sales and services 29 (2,917,362,238) (3,568,028,692

) (2,864,821,079) (3,517,997,161)

Gross profit (loss) (74,020,114) 104,752,217 (149,764,077) 30,566,719

Other income - Dividend received 0 0 0 9,098,980

- Others 29 27,251,474 28,852,100 22,926,785 33,802,172

Selling expenses (130,386,573) (77,766,862) (130,386,573) (171,026,665)

Administrative expenses (136,516,787) (171,026,667) (100,871,684) (44,742,897)

Other expenses - Loss on impairment of assets (21,045,493) 0 (21,045,493) 0

Other expenses - Doubtful accounts (70,904,056) (45,607,868) (70,772,410) (45,607,868)

Finance cost - Interest expenses 29 (143,211,477) (115,994,405) (114,960,458) (101,456,881)

Profit (Loss) before income tax (548,833,026) (276,791,485) (564,873,910) (289,366,440)

Income tax (3,394,447) (2,380,834) 0 0

Profit (Loss) for the period (552,227,473) (279,172,319) (564,873,910) (289,366,440)

Attributable to :

Equity holders of the parent (552,767,970) (280,282,834) (564,873,910) (289,366,440)

Minority interests of subsidiaries 540,497 1,110,515 0 0

(552,227,473) (279,172,319) (564,873,910) (289,366,440)

Earnings per share 28

Basic earnings per share

Profit (Loss) for the period - equity holders

of the parent (2.32) (1.18) (2.37) (1.21)


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STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007


2008 2007 2008 2007

Cash flows from operating activities

Profit (Loss) before income tax (548,833,026) (276,791,485) (564,873,910) (289,366,440)

Adjustment

Depreciation 77,643,149 77,174,240 49,534,548 49,843,886

Bad debt and doubtful accounts 119,460,625 45,607,868 119,343,850 45,607,868

Unbilled receivable 401,242,895 (373,879,400) 398,661,348 (377,092,175)

Allowance for devaluation of inventories 19,905,572 2,883,190 18,510,055 2,261,945

Gain on sales of fixed assets (881,534) (1,759,208) (788,430) (1,752,978)

Write off damaged fixed assets 26,177,573 1,381,517 26,177,573 986,243

Loss on impairment of assets 21,045,493 2,381,643 21,045,493 0

Unrealized loss on exchange rate 725,049 1,539,143 695,137 1,810,607

Amortized intangible assets 7,833,089 7,705,192 7,038,314 6,841,596

Interest expenses 143,211,477 115,994,405 114,960,458 101,456,881

Profit (Loss) of operation before change

in operating assets and liabilities 267,530,362 (397,762,895) 190,304,436 (459,402,567)

(Increase) Decrease in changes in parts of operating assets

Trade accounts receivable (331,587,738) 323,851,212 (341,033,982) 297,791,053

Accounts receivable - related parties (166,818) (4,066) 1,441,226 78,610,976

Installments receivables 80,292,986 33,332,796 80,292,981 33,332,796

Inventories 92,858,896 (85,269,047) 8,409,267 62,986,274

Other current assets 106,317,590 (57,760,111) 108,903,633 (96,935,252)

Other non-current assets 180,984 301,087 464,387 204,230

Increase (Decrease) in changes in parts of operating liabilities

Trade accounts payable 70,854,236 (252,550,637) 311,484,728 (230,235,926)

Accounts payable - related parties (94,964) (62,321) 139,182,109 (105,389,063)

Liabilities under compromise agreement 103,081,122 0 (28,721,080) 0

Collection in excess of earned revenues 50,947,832 (133,699,699) 52,702,647 (129,419,434)

Other current liabilities (41,259,659) 10,865,732 (32,626,060) 18,172,795

Cash generated from operation 398,954,829 (558,757,949) 490,804,292 (530,284,118)

Interest paid (134,655,470) (116,477,179) (105,914,659) (96,759,968)

Income tax paid (18,953,189) (27,766,447) (18,793,687) (23,925,419)

Net cash provided by (used in) operating activities 245,346,170 (703,001,575) 366,095,946 (650,969,505)



STATEMENTS OF CASH FLOWS (Cont.)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007


2008 2007 2008 2007

Cash flows from investing activities

(Increase) Decrease in current investment (255) 19,999,588 0 20,000,000

(Increase) Decrease in short-term loans to

related parties 0 0 5,850,000 24,328,095

(Increase) Decrease deposits at bank with commitment (5,459,574) 7,600,853 (5,433,537) 7,640,000

Cash received from sales of fixed assets 2,142,142 1,938,336 2,041,722 1,933,124

Cash paid for purchase of fixed assets (38,180,973) (62,275,929) (21,057,407) (38,896,380)

Cash paid for purchase of intangible assets (3,779,674) (3,175,324) (3,744,673) (3,017,324)

Net cash provided by (used in) investing activities (45,278,334) (35,912,476) (22,343,895) 11,987,515

Cash flows from financing activities

Increase (Decrease) in overdrafts and short-term

loans from financial institutions (281,850,855) 732,899,162 (323,467,744) 624,580,749

Cash paid for short-term loans from

related persons and companies 0 0 (20,267,067) 0

Cash received from short -term loan from related person

or companies 13,000,000 0 0 20,267,067

Cash received from long -term loan from related person 50,000,000 0 50,000,000 0

Cash paid for long-term loans 23,976,489 (47,020,707) (42,055,175) (50,790,707)

Cash paid for liabilities under financial lease agreement (13,038,701) (12,121,954) (11,256,246) (10,817,298)

Cash paid for dividend 0 (35,772,900) 0 (35,772,900)

Cash received from convertible preferred

shares issuance 0 118,489,033 0 118,489,033

Cash received from increase inshare capital 0 5 0 5

Net cash provided by (used in) financing activities (207,913,067) 756,472,639 (347,046,232) 665,955,949

Effect of change in exchange rate on cash 9,330 (47,352) 9,330 (47,352)

Net increase (decrease) in cash and cash equivalents (7,835,901) 17,511,236 (3,284,851) 26,926,607

Cash and cash equivalents as at January 1 72,142,666 54,631,430 59,883,968 32,957,361

Cash and cash equivalents as at December 31 64,306,765 72,142,666 56,599,117 59,883,968


PATKOL PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS AS AT DECEMBER 31, 2008 AND 2007

1. GENERAL INFORMATION

1.1 Patkol Public Company Limited was incorporated as a company limited on November 28, 1965 with registration no. 372/2508 and changed to a public company limited on June 28, 1993 with registration no. 0107536000587.

1.2 The Company’s office is located at 348 Chalermprakiat Rama 9 Road, Pravate, Bangkok 10250. 1.3 The Company is engaged in the trading and services of engineering products which include turnkey sales of

services in design, manufacturing and installation of various types of industrial refrigeration for the ice making industry and supermarket, dairy and ice-cream processing, as well as food related processing plant and supplies made to order.

1.4 The Company and subsidiaries have staff expenses for the years ended December 31, 2008 and 2007 amount of Baht 346.62 million and Baht 506.76 million in the consolidated financial statements, Baht 432.46 million and Baht 419.74 million in the separate financial statements, respectively.

2. EFFECT FROM ECONOMIC CRISIS For the year ended December 31, 2008, the Company got gross loss because of error in cost estimation due to

the Company agreed to construct a big project without experience about that construction type. Moreover, the economic crisis worldwide expended from financial crisis of United States has effected to capital market and money market, resulting the Company’s receivables are able to make payment on due date. The consumers’ expenditure trend is slow down, resulting the Company cannot reach its gold. It is unpredictable for consequent effects in the future. These financial statements have been prepared on the basses of current situation and estimates currently considered appropriate. However, in long-term, these factors may adversely effect to the financial statements.

3. PREPARATION OF FINANCIAL STATEMENTS BASIS The consolidated and separate financial statements have been prepared in accordance with the generally

accepted accounting principles enunciated under the Accounting Act B.E. 2543 including the Accounting Standards issued under the Accounting Professions Act B.E. 2547 and presented in accordance with the regulations of the Securities and Exchange Commission regarding the preparation of financial statements under the Securities and Exchange Act B.E. 2535. The consolidated and separate financial statements have been prepared under the historical cost

convention, except as transaction disclosed in related accounting policy. Formerly, the condensed form of financial statements have been prepared under the notification of the

Department of Business Development dated September 14, 2001 regarding the condensed form which must be shown in the

financial statements. However, the Company has changed the format of financial statements presentation for the

year ended December 31, 2008 to be in compliance with the Accounting Standards No. 25 “(Revised 2007) Cash Flows Statements” and No. 35 “(Revised 2007) Presentation of Financial Statements” which are effective on or after January 1, 2008 onwards,

Expense information is disclosed in notes to financial statements of each related transaction.

4. BASIS OF CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements for the years ended December 31, 2008 and 2007 have been consolidated the financial statements of Patkol Public Company Limited and subsidiaries which Patkol Public Company Limited has controled

over financial policy and operations as follows:

Percentage of shareholding Type of business Subsidiaries

2008 2007

Share capital held by the Company Manufacture and sale of food related Patkol Manufacturing Co., Ltd. 99.99 99.99 processing equipment and cooling equipment Patkol (1984) Co., Ltd. 99.98 99.98 Manufacture and sale the electric system

equipment Patkol R & D Co., Ltd. 99.98 99.8 Research and development in applied technology and related fields PKB Enterprise Co., Ltd. 80.00 80.00 Manufacture and import foam plate

and equipment for cold room business Siam Patkol Co., Ltd. 99.98 99.98 Manufacture and sale the cooling system (60% of share capital indirectly held by Patkol (1984) Co., equipment Ltd., and hold 98.80% of share capital of Kaset Phet Co., Ltd. ) Kaset Phet Co., Ltd. 98.80 98.80 Consultant and brokerage

The consolidated financial statements have been prepared in conformity with the same accounting policy for the accounts

and accounting events of the Company and subsidiaries. The balance of accounts and transaction between the Company and its subsidiaries, inter - company unrealized gain

between the Company and net assets of subsidiaries have been eliminated from the consolidated financial statements.

5. NEW ACCOUNTING STANDARDS ISSUANCE

The Federation of Accounting Professions issued the notification No. 9/2550, No. 38/2550, No. 62/2550 and No. 86/2551, pertaining to the Accounting Standards announced in the Government Gazette, intention to follow the new Accounting Standards as following :

5.1 The Accounting Standards which are effective in 2007 : No. 44 “Consolidated Financial Statements and Separate Financial Statements” No. 45 “Investments in Associates” No. 46 “Interests in Joint Venture”

Those three Accounting Standards are required to adopt for the financial statements beginning on or after January 1, 2007 onwards. On January 1, 2007, the Company changed the accounting policy about investments in subsidiary and associate in the separate financial statements to be in compliant with the revised financial statements No. 44 and No. 45.

5.2 The Accounting Standards which are effective in 2008 : No. 25 “Cash Flows Statements” No. 29 “Leases” No. 31 “Inventories” No. 33 “Borrowing Costs” No. 35 “Presentation of Financial Statements” No. 41 “Interim Financial Reporting” No. 43 “Business Combinations” No. 49 “Construction Contracts” No. 51 “Intangible assets”

Those ten Accounting Standards are required to adopt for the financial statements beginning on or after January 1, 2008 onwards. The Company’s management deems that the adoption of those Accounting Standards are not materially affected to the financial statements in 2008.

5.3 The Accounting Professions became effective in the year 2009 : No. 36 (Revised 2007) Impairment of Assets No. 54 (Revised 2007) Non - current Assets Held for Sale and Discontinued Operations

The above Accounting Standards are required to adopt for the financial statements beginning on or after January 1, 2009 onwards. The Company’s management deems that the Accounting Standards shall not be materially affected to the financial statements when they are adopted.

The above Accounting Standards are required to adopt for the financial statements beginning on or after January 1, 2009 onwards. The Company’s management deems that the Accounting Standards shall not be materially affected to the financial statements when they are adopted.

6. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6.1 Revenues and expenses recognition 6.1.1 Revenues and expenditures are recognized on an accrual basis. 6.1.2 Revenue from sales is recognized on the value of delivered goods and the significant risks and rewards of 6.1.3 Revenue from services is recognized by the percentage of completion which is based on the proportion

of actual costs to the total estimated costs by considering the effects to the most recent estimates of total costs, coupled with the consideration of the physical completion estimated by the engineer.

6.2 Cash and cash equivalents Cash and cash equivalents are cash on hand and deposits at banks which held to maturity not over three months and

without restriction. 6.3 Allowance for doubtful accounts The Company and subsidiaries provided allowance for doubtful accounts equal to the estimated uncollectible

receivable. The estimated loss are based on historical collection experience coupled with a review of the current status of existing receivables.

6.4 Inventories Inventories are valued at the lower of cost or net realizable value. The cost calculation are detailed as follows :

6.4.1 Finished goods and work in process are recorded on a specific method. 6.4.2 Raw material, spare and supplies are recorded on a moving average method.

6.5 Investment Investment in subsidiaries are stated at cost less provision for impairment (if any). 6.6 Property, plant and equipment The Company and subsidiaries initially recorded property, plant and equipment at cost. In 2004, the Company hired an

independent appraiser to revalue land by cost approach and revised the asset value. In the fourth quarter of 2008, the Company and subsidiaries recorded land and buildings at revalued amount which were valued by an independent appraiser by cost approach according to 4 appraise reports dated December 19, 2008 and January 5, 2009. The Company and subsidiaries recorded increased amount occurred from the revalution as “increment of assets” together with “revaluation surplus on fixed assets” under the shareholders’ equity in balance sheets. The depreciation on assets which were stated at cost method is recorded in the statements of income and depreciation on increment of fixed assets will be recorded in revaluation surplus on

fixed assets account. Therefore, revaluation surplus on fixed assets will be decreased by depreciation on increment of fixed assets and has no effect to retained earnings. The Company has complied with the Federation of Accounting Professions' notification No. 25/2549 dated October 11, 2006 and the Government Gazette's announcement dated October 30, 2006 regarding "Accounting for Revaluation" by applying cost basis. However, on December 31, 2008, the Company has revalued the fixed assets so the statements of income and earnings per share are not affected.

After the revaluation, the Company and subsidiaries stated land at the new value less provision for impairment of

assets (if any). Buildings are stated at the new value less accumulated depreciation and provision for impairment of assets (if any). Equipment is stated at cost less relevant accumulated depreciation and provision for impairment of assets (if any).

In 2008, the Company changed the estimated useful life of buildings according to the independent appraiser report

from 20 years to be 30-50 years by using the replacement cost method so the statements of income as at December 31, 2008 are not affected.

Building and equipment are depreciated by the straight - line method over the estimated useful lives of the assets a follows:

Interest from long-term borrowings for acquisition of fixed assets is capitalized as part of fixed assets and stopped to recognize as cost of fixed assets when the assets are ready for use.

6.7 Non-performed land Non-performed land is stated at cost less provision for impairment of assets (if any). 6.8 Intangible assets Intangible assets are stated at cost less accumulated amortization. Such amortization are calculated at cost of assets on a

straight-line basis over the estimated useful lives of the assets for 5 years. Intangible assets consist of computer software and intellectual property.

Number of years

Building and improvement 10 and 20

Machinery and equipment 5

Machinery for lease 8

Office equipment 3 and 5

Vehicles 5

Land and assets in progress are not depreciated.

6.9 Impairment of assets The Company and subsidiaries have considered the impairment of assets whenever events or changes indicated that the

carrying amount of an assets exceeds its recoverable value (net selling price of the assets under current operation or its utilization value whichever is higher). The Company and subsidiaries will consider the impairment for each asset item or each asset unit generating cash flows, whichevver is practical. In case of the carrying amount of an asset exceeds its recoverable value, the Company will recognize an impairment in the statements of income. The Company will reverse the impairment loss whenever there is an indication that there is no longer impairment or reduction in impairment.

6.10 Transaction in foreign currencies The Company records its transactions in foreign currencies converted into Thai Baht by using the exchange rates ruling

on the transaction dates. The balance of assets and liabilities in foreign currencies as at the balance sheets date are converted into Thai Baht on the average commercial bank buying and selling rate except forward contracts which are based on contractual rate.

Gain or loss on exchange rate is included in the results of its operation. 6.11 Financial instruments Financial instruments are presented in balance sheets, consist of cash and cash equivalents, accounts receivable,

short-term loans, deposit at bank with commitment, other receivables, bank overdrafts and short-term loans from financial institutions, accounts payable, short-term loans, long-term loans, long - term liabilities under financial lease agreement and other payables. The basis of recognition and measurement of each item are separately disclosed in the related transactions.

6.12 Long - term lease agreement The Company and subsidiaries recorded vehicles and office equipments under financial lease agreement / hire

purchase agreement as assets and liabilities in an amount equal to the fair value at the leased assets or the present value of minimum payments under agreement. Interest expenses are recorded on over the term of agreement.

6.13 Operating lease - where the Company and subsidiaries are the lessor The Company and subsidiaries present assets for lease under operating lease contract in the balance sheets according

to the nature of assets. Income from operating lease is recognized as income over the lease term. 6.14 Corporate income tax The Company and subsidiaries recorded corporate income tax by calculating from taxable net profit based on the

condition described in the Revenue Code.

6.15 Employees’ benefit 6.15.1 Provident fund The Company and some subsidiaries have established provident fund under the defined contribution plan. The fund’s

assets are separated entitles which are administered by the external fund manager. The fund is contributed to both by the employees and the Company at the same rate of 3% of employees’ salaries. The fund contribution payments to the provident fund were recorded as expenses in the statements of income in the incurred period.

6.15.2 Retirement benefit This obligation is to provide retirement benefit to retired employees under the defined retirement plan, determined by the

labor law. The Company will record the retirement cost in the period in which the employees retired.

6.16 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles required the

management to make several estimation and assumption which affect the reported amounts in the financial statements and notes related thereto. Consequent actual results may differ from these estimates.

6.17 Provision for liabilities The Company and subsidiaries recognize a provision for liabilities when an entity has a present legal or constructive

obligation as a result of a past event. It is probable that an outflow of economic benefits resources will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. If some or all the expenditure is required to settle a provision, is expected to be reimbursed when it is virtually certain that reimbursement will be received if the Company and subsidiaries settles the obligation. The amount recognized should not exceed the amount of the provision.

6.18 Provision for liabilities The Company and subsidiaries recognize a provision for liabilities when an entity has a present legal or constructive

obligation as a result of a past event. It is probable that an outflow of economic benefits resources will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. If some or all the expenditure is required to settle a provision, is expected to be reimbursed when it is virtually certain that reimbursement will be received if the Company and subsidiaries settles the obligation. The amount recognized should not exceed the amount of the provision.

6.19 Basic earnings per share Basic earnings (loss) per share are calculated by dividing the net profit (loss) attributable to ordinary shareholders by the

weighted average number of ordinary shares outstanding during the year. Diluted earnings (loss) per share is calculated by using profit (loss) by the weighted average number of ordinary shares

outstanding during the year plus the effects of potential ordinary shares from exercise right of warrants and convertible preferred shares.

7. ADDITIONAL CASH FLOWS INFORMATION 7.1 Property, plant and equipment In 2008 and 2007, a subsidiary purchased fixed assets by credit in amount of Baht 528,800.00 and Baht 316,547.20,

respectively. 7.2 In 2008, the Company and a subsidiary made a compromise letters with payables in amount of Baht 99,067,622.40 and Baht

192,149,286, respectively and transferred such amount from trade accounts payable to long-term loans as stated in note 18.

7.3 In 2008, the Company transferred work in process to assets under construction in amount of Baht 6,459,057

7.4 7.4 In 2008, the Company and subsidiaries revalued land and building in amount of Baht 61,681,376 and Baht 7,516,800, respectively as stated in note 6.6.

7.5 Cash and cash equivalents Cash and cash equivalents are cash on hand and deposits at banks which held to maturity not over three months and without restriction. Cash and cash equivalents presented in cash flows arise form transactions in balance sheet as follows:


2008 2007 2008 2007

Cash 205,701 216,878 110,000 110,000

Current account 41,678,916 41,609,325 35,599,865 39,564,376

Saving deposit 22,375,668 30,139,613 20,889,252 20,078,270

Fixed deposit 46,480 176,850 0 131,322

Total 64,306,765 72,142,666 56,599,117 59,883,968

8. TRADE ACCOUNTS RECEIVABLE – NET


2008 2007 2008 2007

Accounts receivable are separated on aging :

Undue :

- Normal 289,925,291 158,640,965 269,374,253 146,906,378

- Debt acceptance 81,105,404 101,774,837 109,781,328 101,774,837

Overdue :

- Less than 3 months 464,385,301 184,097,347 457,781,876 173,104,898

- Over 3 months to 6 months 15,088,586 39,544,956 13,882,529 39,181,450

- Over 6 months to 12 months 7,494,753 36,460,900 6,515,969 35,967,395

- Over 12 months 26,111,384 18,076,615 11,679,072 17,402,312

Under legal action 40,425,867 54,221,034 39,193,415 52,873,295

Total 924,536,586 592,816,654 908,208,442 567,210,565

Less Allowance for doubtful accounts (136,082,600) (74,689,062) (134,341,109) (72,881,020)

Net 788,453,986 518,127,592 773,867,333 494,329,545


2008 2007 2008 2007

Allowance for doubtful accounts

Beginning balance 74,689,062 37,204,409 72,881,020 35,425,577

Increase 61,393,538 37,484,653 61,460,089 37,455,443

Ending balance 136,082,600 74,689,062 134,341,109 72,881,020

9. INSTALLMENTS RECEIVABLE - NET


2008 2007 2008 2007

Installments receivable 78,124,723 151,319,246 78,124,723 151,319,246

Under legal action 31,789,878 38,888,335 31,789,878 38,888,335

Total 109,914,601 190,207,581 109,914,601 190,207,581


Net 62,061,494 148,631,333 62,061,494 148,631,333

Installments receivable due within 1 year (55,459,298) (131,354,379) (55,459,298) (131,354,379)

Net 6,602,196 17,276,954 6,602,196 17,276,954


2008 2007 2008 2007



Increase 6,276,859 8,152,425 6,276,859 8,152,425

Ending balance 47,853,107 41,576,248 47,853,107 41,576,248

10. UNBILLED RECEIVABLE

11. INVENTORIES – NET


2008 2007 2008 2007

Finished goods 2,821,548 2,502,296 1,479,916 2,043,464

Raw materials, spare parts and supplies 294,788,297 379,804,522 123,001,182 143,534,454

Work in process 194,218,826 201,722,675 59,672,134 46,326,506

Work in transit 3,432,358 4,090,432 3,432,357 4,090,432

Total 495,261,029 588,119,925 187,585,589 195,994,856

Less Allowance for declining in

value of goods (34,919,996) (15,014,424) (32,683,443) (14,173,388)

Net 460,341,033 573,105,501 154,902,146 181,821,468


2008 2007 2008 2007

Unbilled receivable 785,245,689 1,186,488,584 778,760,390 1,177,421,738


Net 729,413,461 1,182,446,584 723,111,488 1,173,379,738


2008 2007 2008 2007



Increase 51,790,228 0 51,606,902 0

Ending balance 55,832,228 4,042,000 55,648,902 4,042,000

12. DEPOSITS AT BANK WITH COMMITMENT The Company and subsidiaries ' fixed deposits were used as collaterals for credit line with bank (note 17).

13. LONG - TERM INVESTMENT IN SUBSIDIARIES

Separate (Baht)

Company Paid-up capital % of shareholding Cost Method

(Million Baht)

2008 2007 2008 2007 2008 2007

Subsidiaries :-

- Patkol Manufacturing Co., Ltd. 100.00 100.00 99.99 99.99 99,999,300 99,999,300

- Siam Patkol Co., Ltd. 2.50 2.50 39.99 39.99 999,850 999,850

- Patkol (1984) Co., Ltd. 3.00 3.00 99.98 99.98 2,999,400 2,999,400

- Patkol R & D Co., Ltd. 1.25 1.25 99.98 99.98 1,249,775 1,249,775

- PKB Enterprise Co., Ltd. 10.00 10.00 80.00 80.00 8,000,000 8,000,000

Total investment in subsidiaries 113,248,325 113,248,325

The financial statements of the aforementioned subsidiaries which were brought into the preparation of consolidated financial

statements for the year ended December 31, 2008 and 2007were audited by the auditor already. The minutes of extraordinary shareholders' meeting no. 1/2007 held on March 22, 2007 of Patkol (1984) Co., Ltd., passed the

resolution to pay dividend from retained earnings at Baht 170 per share, amounting to Baht 5.10 million which was paid on May 21, 2007. The minutes of shareholders' annual general meeting no. 12/2007 held on April 30, 2007 of PKB Enterprise Co., Ltd., passed the resolution to pay dividend from retained earnings at Baht 50 per share, amounting to Baht 5 million which was paid on June 27, 2007.

14. PROPERTY, PLANT AND EQUIPMENT – NET

14. PROPERTY, PLANT AND EQUIPMENT - NET (Cont.)

15. NON-PERFORMED LAND – NET


2008 2007 2008 2007

Land 44,055,806 44,055,806 20,843,481 20,843,481

Less Provision for impairment of assets (5,364,556) (5,364,556) (1,595,981) (1,595,981)

Net 38,691,250 38,691,250 19,247,500 19,247,500

In 2004, the Company recorded provision for impairment of land in amount of Baht 1.59 million. In 2006, the Company

hired a land appraise company to appraise non-performed land of a subsidiary by market approach. According to the appraise report dated January 12, 2007, the fair value of the land as at the report date equal to Baht 19.44 million which was lower than book value by Baht 3.77 million. Therefore, the subsidiary recognized the difference as loss on impairment of assets in full amount.

All of the Company and subsidiaries' lands are used as guarantee for overdrafts and short-term loans from financial

institutions (note 17), long-term loans (note 20) and contingent liabilities (note 33).

16. INTANGIBLE ASSETS – NET


2008 2007 2008 2007

Computer software 60,359,290 61,023,265 58,372,894 57,616,733

Intellectual property 11,097,378 6,653,729 9,642,241 6,653,729

Total 71,456,668 67,676,994 68,015,135 64,270,462

Less Accumulated amortization (50,922,246) (43,089,157) (48,390,892) (41,352,578)

Net 20,534,422 24,587,837 19,624,243 22,917,884

Amortization for the years 7,833,089 7,705,195 7,038,314 6,841,597

17. OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS


2008 2007 2008 2007

Bank overdrafts 105,862,134 83,972,182 37,395,085 35,062,867

Promissory notes 1,122,251,182 1,399,453,000 1,022,251,182 1,299,453,000

Discounted post dated cheque 15,316,876 40,103,976 15,316,876 40,103,976

Trust receipts 48,433,277 66,574,688 20,587,730 63,699,366

Packing credit - export 119,354,000 102,906,000 119,354,000 100,016,000

Net 1,411,217,469 1,693,009,846 1,214,904,873 1,538,335,209

As at December 31, 2008 and 2007, the Company has credit facilities from several banks in total amount of Baht

2,541.93 million and Baht 2,596.63 million, respectively and USD 1.63 million, collateralized by deposit at banks (note 12), the mortgages of land and its construction (note 14), non - performed land (note 15), leasehold land and by the subsidiary's guarantee.

As at December 31, 2008 and 2007, the subsidiary has credit facilities from several banks in total amount of Baht 327

million and Baht 282.90 million, respectively and USD 1.38 million, guaranteed by deposit at banks (note 12), mortgaging land with its construction and machinery (note 14) non - performed land (note 15) and the Company's guarantee.

18. CURRENT PORTION OF LONG - TERM DEBT


2008 2007 2008 2007

Long - term loan 96,159,970 63,012,288 64,159,970 42,012,288

Liabilities under financial lease agreements 6,292,410 12,286,811 4,892,190 10,930,045

Liabilities under hire purchase agreements 135,952 258,005 0 0

Liabilities under compromise agreements 143,376,840 0 56,481,128 0

Total 245,965,172 75,557,104 125,533,288 52,942,333

19. LIABILITIES UNDER COMPROMISE AGREEMENTS – NET


2008 2007 2008 2007

Liabilities under compromise agreement 188,135,787 0 70,346,543 0

Less Current portion of long-term debt (143,376,840) 0 (56,481,128) 0

Liabilities under compromise agreement - net 44,758,947 0 13,865,415 0

During the year 2008, the Company and a subsidiary entered into compromise agreements with 11 payables and 9 payables

with the total debts as at the compromise agreements date equal to Baht 99.07 million and Baht 192.15 million by making monthly payment within 6 months to 24 months and 4 months to 24 months with interest rate at 5% - 7.50% per annum and 6% - 7.50% per annum in vary amount from Baht 0.09 million to Baht 1.96 million and Baht 0.26 million to Baht 2.95 million, respectively, maturity in 2008 to 2010.

20. LONG-TERM LOANS – NET


2008 2007 2008 2007

Long-term loans 231,084,415 294,139,590 67,084,415 109,139,590

Less Current portion of long-term debt (96,159,970) (63,012,288) (64,159,970) (42,012,288)

Net 134,924,445 231,127,302 2,924,445 67,127,302

The Company has obtained long - term loans from two domestic banks as follows :

The 1st credit line in the amount of Baht 312 million at the interest rate of MLR - 2.0% to MLR per annum. The principal is repayable in the quarterly amount of Baht 30 million (February 2003 to January 2009) and Baht 54 million (February 2009 - January 2010). Such loans are guaranteed by mortgaging land with its construction ( note 14 ) and non - performed land (note 15).

The 2nd credit line in the amount of Baht 10 million at the interest rate of MLR - 1.0% per annum. The principal and

interest is repayable in the quarterly amount of Baht 0.62 million (2007 - 2011). Such loans are guaranteed by leasehold and benefits received from fire insurance.

Subsidiary has obtained long - term loans from a domestic bank as follows : The 1st credit line in the amount of Baht 120 million at the interest rate of MLR - 2.25% to MLR - 0.25% per annum.

The principal is repayable in the quarterly amount of Baht 2.50 million to Baht 10 million (2005 - 2012) which was graced for the principal repayment in the first two years.

The 2nd credit line in the amount of Baht 70 million at the interest rate of MLR - 1.0% to MLR per annum. The principal is

repayable in the quarterly amount of Baht 1.50 million to Baht 6 million (2006 - 2012).

Such loans are guaranteed by mortgaging land with its construction and machinery (note 14), non - performed land (note 15) and the Company's guarantee.

21. LIABILITIES UNDER FINANCIAL LEASE AGREEMENTS – NET


2008 2007 2008 2007

Liabilities under financial lease agreements 7,204,126 21,331,342 5,759,850 18,079,377

Liabilities under hire purchase agreements 141,180 141,180 0 0

Less Deferred interest expense (250,873) (1,475,340) (201,589) (1,264,870)

Total 7,094,433 19,997,182 5,558,261 16,814,507

Less Current portion of liabilities

- Financial lease (6,292,410) (12,286,811) (4,892,190) (10,930,045)

- Hire purchase (135,952) (258,005) 0 0

Net 666,071 7,452,366 666,071 5,884,462

As at December 31, 2008 and 2007 the Company and subsidiaries entered into financial lease agreements and hire

purchase agreements of vehicles and office equipment with several finance companies. These are repayable in 36 - 48 monthly installments. The agreements will terminate in 2010.

22. SHARE CAPITAL 22.1 In the extraordinary shareholders' meeting no. 1/2007 held on March 27, 2007, the shareholders passed the resolution as follows :

22.1.1 Approved to decrease the Company's share capital from Baht 320 million to Baht 291.49 million divided into 291,486,000 shares of Baht 1.00 each by cancelling the unallocated 28,514,000 shares. The Company has registered the decrease share capital with the Ministry of Commerce on March 28, 2007.

22.1.2 Approved to increase share capital from Baht 291.49 million to Baht 325.23 million to serve the issuance and offering new convertible preferred shares, divided into 291,486,000 ordinary shares of Baht 1.00 each total amount of Baht 291.49 million and 33,744,100 preferred shares of Baht 1.00 each, total amount of Baht 33.74 million allocated to the specific investors at the offering price of Baht 3.62 each. The Company has received the payment from issuance of convertible preferred shares amount of Baht 118.49 million (after deduction with share issuance expenses of Baht 3.66 million) on March 30, 2007 and the Company has registered the increase share capital with the Ministry of Commerce on April 5, 2007. 22.2 Right of convertible preferred shares are as follows :

Name of preferred shares : Patkol Public Company Limited preferred shares Number of share : 33,744,100 shares of Baht 1.00 each total amount of Baht 33.74 million

at the offering price of Baht 3.62 each. Issuance date : March 28, 2007 Expiry date : April 5, 2009 Conditions of preferred shares : 1) The preferred shares are entitled to cumulative dividend with the right

to receive dividend at least once a year at the annual rate of 7% and will have the first right to the capital refund over the shareholders of the ordinary shares. :2) The shareholders of preferred share will have no right to receive dividend declared in the annual shareholders' general meeting for the year 2007. : 3) The period of preferred shares is 2 years from the issuing date and as at the expiry date if the market price of preferred shares is lower than the issued price, the Company agrees to compensate the difference to the investors within 14 business days from the expiry date of the preferred shares, whether the preferred shares are converted to ordinary shares at the expiry date or not. The compensation will not be enforced if the preferred shares are converted to ordinary shares before the expiry date.

4) The shareholders of the preferred shares can convert all or part of the shares to ordinary shares at the ratio of 1 preferred share : 1 ordinary share. The conversion can be done quarterly since the issuing and the offering date. : 5) The rights of preferred shares and right on receive incompleted payment of dividend shall not be enforced when the conversion of preferred shares is completed, the rights shall be enforced as the same as ordinary shares. : 6) One preferred share has one voting right. : 7) The preferred shares will not be listed on the SET.

From such issuance of convertible preferred shares which held as mixed financial instruments including by financial liabilities, therefore, such financial instruments after deduction with share issuance expenses consist of :

Amount of Baht

Composition of financial liabilities 117,845,894

Composition of capital 643,139

Total benefits derived from convertible preferred shares 118,489,033

The Company calculated the composition of financial liabilities from issuance of convertible preferred shares by fair value

at the discount rate of 7.5% per annum. The Company has interest expenses from such financial instrument for the years ended December 31, 2008 and 2007 amount of Baht 14.80 million and Baht 5.85 million, respectively.

In 2008, the Company reclassified financial expense-convertible preferred shares to current liabilities because it is maturity

on April 5, 2009.

22.3 Warrants On September 22, 2004, the Company issued 53 million units of warrants in the form of specified the name of the

holders are negotiable with 3 years maturity from the issuance date to the existing shareholders. One unit of warrant has a right to purchase one ordinary share at Baht 5.00 each with the exercise period on every 25 of February, May, August and November. The first exercise date is on November 25, 2004 until August 25, 2007 and the last exercise date will be on September 21, 2007. On September 7, 2007, there is exercise right of warrants for 1 unit.

23. REVALUATION SURPLUS ON FIXED ASSETS According to note 6.6 and note 14, in the fourth quarter of 2008, the Company and subsidiaries hired an independent appraiser to appraise land and building by cost approach and determined the asset value according to the appraise report, resulting revaluation surplus on fixed assets in amount of Baht 329.44 million in the consolidated financial statements and

Baht 321.92 million in the separate financial statements.

Revaluation surplus on fixed assets comprise of: Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Revaluation surplus of land Beginning balance 260,240,615 260,240,615 260,240,615 260,240,615 Decrease (8,435,374) 0 (15,952,174) 0 Ending balance 251,805,241 260,240,615 244,288,441 260,240,615 Revaluation surplus of building Beginning balance 0 0 0 0 Decrease 77,633,550 0 77,633,550 0 Ending balance 77,633,550 0 77,633,550 0

Revaluation surplus of fixed assets 329,438,791 260,240,615 321,921,991 260,240,615

24. LEGAL RESERVE

According to the Public Company Limited Act. B.E. 2535, the Company has to set aside its reserve as a legal reserve not less than 5% of the annual net profit deducted by the total accumulated deficit brought forward (if any) unit the reserve reaches an amount not less than 10% of the authorized share capital. Such legal reserve is not available for dividends distribution.

25. RETAINED EARNINGS APPROPRIATION

In 2007, according to the minutes of the shareholders' annual general meeting no. 42 held on April 26, 2007, the Company passed the resolution to pay dividend to the shareholders for the results of its operation as at December 31, 2006 for 238.49 million shares at Baht 0.15 each, amounting to Baht 35.77 million which was paid on May 25, 2007.

26. DIRECTORS' REMUNERATION Directors' remuneration is all benefits paid to the Company's directors excluding salaries and related expenses

which paid to executive director. The directors' remuneration for years ended December 31, 2008 and 2007 was Baht 4.78 million and Baht

5.34 million, respectively.

27. CORPORATE INCOME TAX The Company and subsidiaries calculated corporate income tax at the rate of 25 - 30% of profit (loss) before

deducting with tax expenses added by the reserve and other expenses which shall not be allowed as expenses in tax calculation and deducted with taxable deficit brought forward from the previous year except a subsidiary (Patkol Manufacturing Co., Ltd.) calculated corporate income tax at the rate of 30% of profit (loss) before deducting with tax expenses added by the reserve and other expenses which shall not be allowed as expenses in tax calculation and deducted with taxable deficit brought forward from the previous year not exceed 5 years and exempted taxable profit derived from promoted business by using the right and privileges as specified in the promotion certificate (note 30).

28. EARNINGS PER SHARE

For the years ended December 31, 2008 and 2007, the Company has not presented diluted earnings per share in the statements of income due to decrease in loss per share in the consolidated and separated financial statements as follows:

Consolidated For the year ended December 31 Profit (Loss) Number of shares Baht / share 2008 2007 2008 2007 2008 2007 Basic earnings per share Basic earnings per share shareholders (552,767,970) (280,282,834) 238,486,001 238,486,001 (2.32) (1.18)

Consolidated For the year ended December 31 Profit (Loss) Number of shares Baht / share 2008 2007 2008 2007 2008 2007 Effects of potential common share (exercise rights) 0 0 33,744,100 33,744,100 Diluted earnings per share Profit (Loss) of common shareholders

assumed as conversion to common share (552,767,970) (280,282,834) 272,230,101 272,230,101 (2.03) (1.03)

Separated For the year ended December 31 Profit (Loss) Number of shares Baht / share Basic earnings per share Profit (Loss) of common shareholders (564,873,910) (289,366,440) 238,486,001 238,486,001 (2.37) (1.21)

Effects of potential common share (exercise rights) 0 0 33,744,100 33,744,100 Diluted earnings per share Profit (Loss) of common shareholders

assumed as conversion to common share (564,873,910) (289,366,440) 272,230,101 272,230,101 (2.07) (1.06)

29. TRANSACTIONS WITH RELATED PERSON AND PARTIES Assets, liabilities, revenues and expenses arose from transaction with related person and companies. These related

transactions are determined on the conditions in the normal course of business and based on the company concerned as follows : 29.1 Relationship

Person Inter - transaction Relationship

Mr. Piya Chongwattana Loan Company's director

Mr. Boonyong Kulkarnchanacheewin Loan Company's director

Miss Nonglak Sakdakrai Loan Company's director Mrs. Wipa Chullachat Loan Related by director

Miss Ratchanee Chongwattana Loan Related by director

Mr. Boonyong and Miss Rapeephan Kulkarnchanacheewin

Body of Persons

Loan เ Related by director

Mr. Boonyong and Mr. Pisith Kulkarnchanacheewin Body of Persons

Loan Related by director

Subsidiaries

Patkol Manufacturing Co., Ltd. Sale of goods and services

Common major shareholder and director

Patkol (1984) Co., Ltd. Sale of goods and services

Common major shareholder and director

Patkol R&D Co., Ltd. Services Common major shareholder and director

PKB Enterprise Co., Ltd. Sale of goods and services

Common major shareholder and director and common director

Siam Patkol Co., Ltd. Services Subsidiary of Patkol (1984) Co., Ltd.

Kaset Phet Co., Ltd. Services Subsidiary of Siam Patkol Co., Ltd. and common director

Prepack (Thailand) Co., Ltd. Services Common director

29.2 Pricing policy Pricing policy Sale and services Cost plus profit 1% and cost plus profit 5% for finished goods Purchase of goods and services Cost plus profit 5% Building rental and services At Baht 1,000 - 148,000 per month

Inter-company interest At the interest rate of 6.875% - 7.75% per annum

Inter-company interest No interest charge

29.3 Assets and liabilities with related persons and parties are as follows : 29.3.1 Trade accounts receivable Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 0 1,645,198 Patkol (1984) Co., Ltd. 0 0 0 150,975 PKB Enterprise Co., Ltd. 0 0 392,271 204,141 Prepack (Thailand) Co., Ltd. 512,649 345,831 512,648 345,831

Total 512,649 345,831 904,919 2,346,145

29.3.2 Short-term loans to related parties and accrued interest income Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. Principal 0 0 0 5,850,000 Accrued interest income 0 0 0 379,133

Total 0 0 0 6,229,133

Increase and decrease of loans to related parties for the years ended December 31, 2008 and 2007 are as follows : Separated (Baht) Loans 2008 2007 Beginning balance 5,850,000 30,178,094 Increase during the period 341,245,969 448,284,361 Decrease during the period (347,095,969) (472,612,455) Ending balance 0 5,850,000

Such loans have no agreement entering and collaterals. 29.3.3 Advance payment Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 35,478,145 50,149,946 Patkol (1984) Co., Ltd. 0 0 0 1,695,000 PKB Enterprise Co., Ltd. 0 0 0 480,000

Total 0 0 35,478,145 52,324,946

29.3.4 Trade accounts payable Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 128,209,959 1,937,434 Patkol (1984) Co., Ltd. 0 0 25,985,148 9,010,440 PKB Enterprise Co., Ltd. 0 0 17,222,321 21,084,419 Prepack (Thailand) Co., Ltd. 197,593 292,557 89,531 292,557

Total 197,593 292,557 171,506,959 32,324,850

29.3.5 Short-term loans from related persons and parties Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol (1984) Co., Ltd. 0 0 0 20,267,067 Mr. Boonyong Kulkarnchanacheewin 3,000,000 0 0 0 Mr. Boonyong and Miss Rapeephan Kulkarnchanacheewin Body of Persons 5,000,000 0 0 0 Mr. Boonyong and Mr. Pisith Kulkarnchanacheewin Body of Persons 5,000,000 0 0 0

Total 13,000,000 0 0 20,267,067

Increase and decrease of loans for the years ended December 31, 2008 and 2007 are as follows : Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Beginning balance 0 0 20,267,067 0 Increase during the period 13,000,000 20,000,000 1,950,000 48,810,839 Decrease during the period 0 (20,000,000) (22,217,067) (28,543,772) Ending balance 13,000,000 0 0 20,267,067

Such loans have no agreement entering and collaterals. 29.3.6 Long-term loans from related persons During the year 2008, the Company has loans from director and director of the Company group, total 4

persons without interest charge. Such loans are for the purpose of increase of share capital in the next 3 months. When the increase of share capital is registered, these loans are invalid.

Increase and decrease of loan for the years ended December 31, 2008 and 2007 are as follows :

Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Beginning balance 0 0 0 0 Increase during the period - Mr. Piya Chongwattana 33,200,000 0 33,200,000 0 - Miss Nonglak Sakdakrai 6,800,000 0 6,800,000 0 - Mrs. Wipa Chullachat 5,000,000 0 5,000,000 0 - Miss Ratchanee Chongwattana 5,000,000 0 5,000,000 0 Ending balance 50,000,000 0 50,000,000 0

29.4 Revenues and expenses transaction with related persons and parties 29.4.1 Sales of goods and services

Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 9,768,187 41,148,480 PKB Enterprise Co., Ltd. 0 0 293,545 2,118,600 Patkol (1984) Co., Ltd. 0 0 0 677,686 Prepack (Thailand) Co., Ltd. 131,850 118,584 6,250 63,884

รวม 131,850 118,584 10,067,982 44,008,650

29.4.2 Cost of sales and services Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 551,541,036 594,908,128 Patkol (1984) Co., Ltd. 0 0 40,507,356 40,482,292 PKB Enterprise Co., Ltd. 0 0 22,693,985 38,035,074 Siam Patkol Co., Ltd. 0 0 0 5,256 Prepack (Thailand) Co., Ltd. 863,244 869,754 540,721 747,117

Total 863,244 869,754 615,283,098 674,177,867

29.4.3 Rental and other fees

Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 350,445 136,724 Patkol (1984) Co., Ltd. 0 0 1,819,080 1,776,000 PKB Enterprise Co., Ltd. 0 0 780,000 987,844 Patkol R&D Co., Ltd. 0 0 24,000 24,000 Siam Patkol Co., Ltd. 0 0 12,000 12,000 Kaset Phet Co., Ltd. 0 0 4,800 4,800 Prepack (Thailand) Co., Ltd. 863,244 1,955,952 1,989,752 1,954,752 Siam Patkol Co., Ltd. 0 0 0 12,000 Kaset Phet Co., Ltd. 0 0 0 4,800

Total 863,244 1,955,952 4,980,077 4,912,920

29.4.4 Interest income Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 0 4,628,436 Patkol (1984) Co., Ltd. 321,472 0 0 162,248

Total 321,472 0 0 4,790,684

29.4.5 Interest expenses Consolidated (Baht) Separated (Baht) 2008 2007 2008 2007 Patkol Manufacturing Co., Ltd. 0 0 0 106 Patkol (1984) Co., Ltd. 0 0 326,472 284,838

Total 0 0 326,472 284,944

30. PROMOTIONAL PRIVIEGES

A subsidiary (Patkol Manafucturing Co,. Ltd.) is granted certain right and privileges as a promoted industry under the Promotion of Investment Act B.E. 2520 for the manufacturing business of industrial machineries and spare parts or machineries equipment. The Significant privileges are as follows :

1) To exempt the corporate income tax from net profit for the period of 8 years from the date of income earnings, provided that such a project with capital investment not exceed 100 per cent of total investment excluding cost of land and working capital.

2) To exempt the customs duty for imported raw materials and essential materials used in manufacturing for re-export for the period of 5 years from the imported date.

3) To excemp the import duty on machinery which have to import within June 18, 2006. Such company was granted the extension period of importing of machinery until June 18, 2008 in compliance with the approval letter no. OrKor. 0905/003394 dated May 11, 2007.

Subsidiary must to comply with the certain conditions and terms as stipulated in promotion certificate from being a promoted industry company. Subsidiary's revenues are separated as follows : (Unit : Baht)

For the year ended December 31, 2007 Promoted business Non-promoted business Total Revenue from sales and services 586,325,249 17,288,871 603,614,120 Other income 5,905,618 185,217 6,090,835

Total 592,230,867 17,474,088 609,704,955

(Unit : Baht)

For the year ended December 31, 2007 Promoted business Non-promoted business Total Revenue from sales and services 649,378,061 15,733,539 665,111,600 Other income 5,459,401 142,871 5,602,272

Total 654,837,462 15,876,410 670,713,872

31. FINANCIAL INFORMATION BY SEGMENT

32. DISCLOSURE OF FINANCIAL INSTRUMENTS 32.1 Accounting policy The significant accounting policies and method adopted including the basis of recognition and measurement

relating to each class of financial assets and liabilities have been disclosed in note 6. 32.2 Credit risk

Credit risk derives from failure by counterparties to discharge their obligations resulting in financial loss to the Company and subsidiaries. Financial assets shown in balance sheets at the book value deducted by allowance for doubtful accounts is maximum value of credit risk. 32.3 Exchange rate Risk

The Company and subsidiaries have the exchange rate risk for trade accounts receivable and Payable denominated to foreign currency. The Company has reduced the uncertainty of future cash flow by using natural hedge. Besides, the Company has managed the risk by entering into forward contract. As at December 31, 2008 and 2007 the Company and subsidiaries have assets and liabilities denominated to

Consolidated Separated Transaction Currency 2008 2007 2008 2007

Cash at banks USD 87,949 639,669 87,949 639,669 Trade accounts receivable USD 1,028,406 2,528,319 818,456 2,528,319 EURO 36,700 36,842 36,700 36,842 SGD 0 7,140 0 7,140 Trust receipt payable USD 277,637 1,035,924 63,879 1,035,924 EURO 67,606 576,319 67,606 576,319 GBP 1,430 0 0 1,430 Trade accounts payable USD 159,349 126,651 159,349 126,651 EURO 125,555 107,712 125,555 107,712 DKK 27,106 38,303 26,317 38,303

งบการเงินรวม งบการเงินเฉพาะกิจการ

Transaction Currency 2008 2007 2008 2007 Forward contract - Purchase Rate of unit USD 40,000 0 0 0 Rate of unit USD Forward contract - Sale Rate of unit USD 257,744 0 100,000 0 Rate of unit USD

32.4 Interest rate risk Interest rate risk from changes in market interest rate will affect the results of the Company and

subsidiaries' operations and cash flows. The Company and subsidiaries exposed the interest rate risk due to its deposits at financial institutions, deposits at bank with commitment, short - term loans from financial institutions, long - term loans and long-term liabilities under financial lease agreement. The Company and its

subsidiaries do not use derivative financial instruments to hedge such risk.

32.5 Convertible preferred shares risk2 The Company may have a risk from issuance of convertible preferred shares (note 22) since the

convertible preferred shares required the Company to make cumulative dividend payment to the convertible preferred shareholders at the rate of 7% per annum of offering price of convertible preferred shares and is liable to pay the variance of merket price of ordinary shares which is lower than the offering price of convertible preferred shares (Baht 3.62 per share) at the convertible of ordinary share date. As at December 31, 2008 and 2007, the market price of the Company's ordinary shares equal to Baht 0.44 per share and Baht 1.64 per share, respectively. However, such liabilities were recorded as financial liabilities - convertible preferred shares under non-current liabilities as stated in note 22. 32.6 Fair value of financial instruments

shareholders at the rate of 7% per annum of offering price of convertible preferred shares and is liable to pay the variance of merket price of ordinary shares which is lower than the offering price of convertible preferred shares Financial assets shown in balance sheets consist of cash and cash equivalents, trade accounts receivable, short-term loans and other receivables. Financial liabilities shown in balance sheet consist of bank overdrafts and short-term loans from financial institutions, trade accounts payable, short-term loans, long-term loans and other payables.

The carrying value of financial assets and liabilities are close to their fair value.

33. COMMITMENT AND CONTINGENT LIABILITIES

33.1 As at December 31, 2008 and 2007, the Company and subsidiaries have commitment under the hiring contractor 33.2 As at December 31, 2008, the Company and subsidiaries have non-performed letter of credit in the amount

of Baht 48.44 million (2007 : Baht 25.61 million, USD 750,699.95 and EURO 3,499.19). 33.1 As at December 31, 2008 and 2007, the Company and subsidiaries have contingent liabilities on bank's

issuance letter of guarantee for the Company's and subsidiaries retentions and the work offer competing bids to the customers as follows :

2008 2007 Domestic currency (million Baht) 709.79 744.3 Overseas currency EURO 17,310 20,809 USD 279,815 601,893

32.4 As at December 31, 2008 and 2007, the Company and subsidiaries have comitment under machinery

purchase agreement in amount of Baht 1.69 million and Baht 13.80 million, respectively and unrenderred machinery in amount of Baht 0.17 million and Baht 1.35 million, respectively.

34. RECLASSIFICATION

The certain accounting of the 2007 financial statements were reclassified in conformity with the presentation of the 2008 interim financial statements. The significant transaction is to transfer the income tax deduction at source amount of Baht 21.76 million in the consolidated and separate financial statements from other current assets to be non-current assets.

35. FINANCIAL STATEMENTS APPROVAL

These financial statements have been approved to be issued by the Company's Board of Directors on March 1, 2009.

Patkl 08

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