CSR and its importance:

A commercial perspective

This presentation (the “Presentation”), is being provided solely to the intended recipient. The Presentation is strictly confidential. Save as specifically agreed in writing by CLC

Asia and APS Ventures Co., Ltd. (“CLC Asia”), the Presentation must not be copied, reproduced, distributed or passed, in whole or in part, to any other person. The Presentation

must not be used for any other purpose without the prior written consent of CLC Asia . The Presentation has been prepared on the basis of information provided by CLC Asia

and also from publicly available information. This information, which does not purport to be comprehensive, has not been independently verified by CLC Asia. The Presentation

does not constitute an audit or due diligence review and must not be construed as such. No representation or warranty, expressed or implied, is or will be made and, save in

the case of fraud, no responsibility or liability is or will be accepted by CLC Asia or by any of its officers, servants or agents or affiliates as to or in relation to the fairness,

accuracy or completeness of the Presentation or the information forming the basis of this Presentation or for any reliance placed on the Presentation by any person

whatsoever. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any

future projections, estimates, prospects or returns contained in the Presentation. This Presentation does not constitute an offer or invitation for the sale or purchase of

securities or any businesses or assets described in it, nor does it give legal, tax or financial advice.

2

Definitions of CSR….

...a concept whereby

companies integrate social

and environmental

concerns in their business

operations and in

their interaction with their

stakeholders on a voluntary

basis.

...the commitment of

business to contribute to

sustainable economic

development, working with

employees, their families,

the local community and

society at large to improve

their quality of life.

EUROPEAN COMMISSION WORLD BUSINESS COUNCIL

No ‘one’ set definition.

But should business really partake in CSR?

There exists a traditional divide with where businesses sit and how they should be viewed

‘MILTON FRIEDMAN’ VIEW

COMPANY

COMPANY

AS PART OF A NEXUS OF STAKEHOLDERS

Suppliers

CommunityEmployees

Customers

Acts in the best interest of shareholders, maximisingshareholder value

Demonstrates financial benefits of CSR also

addresses shareholder value

Environment

Benefits to business from CSR activities (1)

Typical benefits cited when conducting CSR activities

EMPLOYEE

SATISFACTION

COMPETITIVE

ADVANTAGE

REPUTATION &

LICENSE TO OPERATE

RISK & COST

REDUCTION

Benefits to business from CSR activities (1)

Firms use CSR to set themselves apart from competitors

Competitive

advantage

ACTIVITY DESIRED BENEFITS

1 Equal opportunity practices

2 Investor relations

Inclusive policy:

•Obtain workforce from widest

possible talent pool

Institutional investors actively seek

out companies with good records

in:

• Good industrial relations

• Environmental and community

stewardship

•Corporate governance

Firms active in social, cultural and

educational fields help influence

the decisions of firm stakeholders

Benefits to business from CSR activities (2)Reducing

costs and

risks

ACTIVITY DESIRED BENEFITS

1 Equal opportunity practices

2Energy savings and

environmentally sound practices

3 Better community relations

Inclusive policy:

•Improves morale

•Reduces turnover and

absenteeism from disgruntled

employees

•Lower present and future

compliance costs

•Enhance efficencies

•‘Sanctioned member’ of community

•Less opposition and intrusive

regulation

•Governments pre-disposed to offer

incentives (e.g. Tax advantages)

Benefits to business from CSR activities (3)

You can’t go to a government department to obtain a social license to operate….Reputation

and license

to operate

1 Having a strong reputation…

DESIRED BENEFITS

•Legitimacy in the eyes of the

community

•‘Sanctions’ a firm to operate in its

desired environment

• Legitimacy across your entire

supply chain and with consumers

But…reputation and social license are

intangible. They differ for each company

and differs between stakeholders.

Some figures….Much of CSR is wrapped up in intangibles, or preserving intangible value. But here are

some interesting figures…

Reputation helps preserve intangible value…

96%

Intangible value of

Coca-Cola’s brand

53%

Estimated intangible value of

fortune 500 companies in 2013

Profit: $1.08 Trillion

Revenue: $12.21 Trillion

Reputation helps provide the foundations of real value…

85%

Consumers who

have a positive

image of companies

who make the world

a better place86%

Institutionall

investors who

believe that CSR has

a positive effect on

business3 out of 5 workers want to

work with a firm who value

aree consistent with their

own

Why does this matter?

DO NO HARM

Constraints on foreign investors working in emerging markets

Foreign

Corrupt

Practices

Act

Bribery

Act

Legislation Ethical behaviour standards

Non-governmental oversight Press coverage

13

Investors are paying careful note of doing due diligence on JV partnersThere are more elements to due diligence than traditionally looked at by law firms and financial advisors

Legal DD Financial DD

Everything in

between!

• Reputation

• Corruption

• Adverse links to government

• How they deal with other stakeholders

Case study….Burmese slaves on shrimp boats (Thailand)

Large companies in the west,

under pressure from

stakeholders will ensure that

their supply chains are as

ethical and reputable as

possible

But global supply chains mean that companies can no longer hide or rely on consumer apathy.

Case study….supply chain for shrimp boats (Thailand)

Fishing boats

collect fish meal.

Estimated small

minority with

slaves.

Feed sold to

shrimp

consolidator

Consolidators

sell to shrimp

farms

Frozen

shrimp,

fed with

slave

derived

feed,

frozen

and sent

to

western

markets1

2

3

4

But despite safeguards along the way, it is still important to realise that your supply chain extends much further

Case study….Lessons Learned

1 Economics of your entire supply chain needs to be understood, examined,

supervised....and fair...

2 Suppliers who don’t meet ethical standards will be cut

Controversies such as this can kill of one countries ability to supply global

markets

The issue is taken seriously at the highest level, and can delay other business

deals

Don’t be scared to work with your partners to raise CSR standards

3

4

5

Contact us

17

Please contact:

Christopher Larkin

Managing Director

c/o AWR Lloyd Offices

87/1 All Seasons Place, Capital Tower, 26th Floor,

Wireless Rd.,

Lumpini, Pathumwan, Bangkok, 10330

Thailand

t: +66 81 866 1002 (Thailand)

e: chris@clc-asia.com

e: enquiries@clc-asia.com

www.clc-asia.com