of Sri Trang Agro-Industry Public Company Limited 28 th April 2016 - PowerPoint PPT Presentation

SRI TRANG AGRO-INDUSTRY PUBLIC COMPANY LIMITED The 2016 Annual General Meeting of Shareholders of Sri Trang Agro-Industry Public Company Limited 28 th April 2016 1

The Voting Card’s Example 2

The Voting Card’s Example 3

Voting Procedures except agenda regarding the election of directors All shareholders / their proxies disapprove or abstain in such agenda. Mark their votes in the voting cards and sign. Officers collect your voting cards. Processing. Inform the result to the Shareholders Meeting . Sign the approve voting cards, officers will collect when the meeting finish. 4

Voting Procedures for the agenda regarding the election of directors All shareholders / their proxies. Mark their votes in the voting cards. Officers collect your voting cards. Processing. Inform the result to the Shareholders Meeting . 5

Agenda items 1. To consider and certify the minutes of the 2015 Annual General Meeting of Shareholders held on 29 April 2015 2. To acknowledge the performance results of the Board of Directors of the Company for the year 2015 and to consider and approve the audited financial statements of the Company for the year ended 31 December 2015 3. To consider and approve the dividend payment of the Company for the year 2015 4. To consider and approve the election of directors to replace the directors who retire by rotation 5. To consider and approve the determination of remuneration of directors for the year 2016 6. To consider and approve the appointment of the auditor and determination of auditing fee for the year 2016 7. Other matters (if any ) 6

Agenda item 1 To consider and certify the minutes of the 2015 Annual General Meeting of Shareholders held on 29 April 2015 A copy of the Minutes of the 2015 Annual General Meeting of Shareholders is enclosed with Invitation to the 2016 Annual General Meeting of Shareholders and disseminated on the Company’s website www.sritranggroup.com 7

Agenda item 2 To acknowledge the performance results of the Board of Directors of the Company for the year 2015 and to consider and approve the audited financial statements of the Company for the year ended 31 December 2015 The Company regularly discloses MD&A through the SET system after the release of financial statements. 8

Agenda item 2 Revenue and Sale Volume (THB million) (Ton) 1,400,000 150,000 133,704 1,204,342 1,200,000 -7% 1,126,463 1,119,966 120,000 975,604 951,935 1,000,000 90,000 99,639 800,000 92,185 600,000 60,000 75,530 -19% 400,000 61,292 30,000 200,000 0 0 2011 2012 2013 2014 2015 Sale volume (LHS) Revenue (RHS) 9

Agenda item 2 2015 Sale Volume by Region Sales Volume Trend by Region (Ton) Others 1,400,000 1,204,343 Europe 1,119,966 0.1% 1,126,463 1,200,000 -26% 879 USA Thailand 826 52,350 4,102 6% 3% 75,534 -13% 38,798 50,356 65,660 1,000,000 84,363 16% 203,125 -12% 179,517 158,528 800,000 297,522 +16% 268,543 345,329 600,000 Asia 31% 400,000 -15% 560,570 574,932 489,837 200,000 44% China 0 2556 2557 2558 Asia Thailand China Europe Others USA 10

Agenda item 2 2015 Revenue by Product Revenue Trend by Product (THB million) Others 100,000 92,185 2,518 Concentrated 75,530 8% 11% 80,000 Latex 2,567 +156% 61,292 60,000 RSS 6,573 9% 70,774 -23% 57,512 40,000 44,483 72% 20,000 TSR -44% 12,846 9,819 5,462 -15% 6,047 5,631 4,774 0 2556 2557 2558 RSS TSR Con. latex Others 11

Agenda item 2 Key Factors Affecting the Company’s Operation 1. Volatility of Natural Rubber Price 2. Foreign Exchange Rate 3. Share of Profit from Investment in Affiliates and JV 4. Finance Cost 5. Government & Country Policy 12

Agenda item 2 Factor 1 : Volatility of Natural Rubber Price 250 2014 Avg. 2015 Avg. RSS ▼ 20% YoY RSS = 196 RSS = 156 TSR TSR = 171 TSR = 137 SICOM Price 200 (US cent : Kg.) 150 100 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15  In 2015, NR price continued downward movement to hit a 6-year low or 2015 2014 %YoY decreased 20% YoY from China slowdown, slump in oil and Revenue (THB million) 61,292 75,530 ▼ 19% commodities’ prices, and a sharp appreciation of US dollar. 1,119,966 1,204,342 ▼ 7% Sales Volume (Ton)  The decline of NR price required us to recognise inventory allowance Average Selling Price amounted Baht 374 million . 48,858 60,583 ▼ 19% (THB/Ton ) 13

Agenda item 2 Adjusted Gross Profit and Adjusted Gross Profit Margin The increase in adjusted gross profit (THB million) (%) and adjusted gross profit margin 8,000 10% was due to our: 8.1% 8% 6.6% 6,000  Selective selling policy 6.1% 6,049 6%  Effective risk management 4,000 4,981 4,642 strategies and efficient inventory 4% management 2,000 2%  Productivity enhancement 0 0% 2556 2557 2558 Adjusted Gross Profit Margin (RHS) Adjusted Gross Profit (LHS) * Adjusting for (reversal) allowance of inventory, realised forex gains /(losses), and realised rubber futures gains/(losses) 14

Agenda item 2 Factor 2 : Foreign Exchange Rate 37 2014 Avg. 2015 Avg. ▲ 5% YoY 36 32.34 34.09 35 THB/USD THB/USD THB/USD 34 Movement 33 32 31 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15  (THB million ) 2015 2014 In 2015, US Dollars continued to appreciate from the looming policy interest rate increase of the US Federal Reserve. 248 104 Realised gain on exchange rate  Although we have lowered level of currency derivative instruments in 2015 ( 34 ) 267 Unrealised gain/(loss) on exchange rate to benefit from the appreciation of US Dollars, our gains on foreign 214 371 exchange declined YoY. Gains on exchange rate 15

Agenda item 2 Factor 3 : Share of Profit from Investment in Affiliates and JVs Earning before Interest and Tax (EBIT) 2015 Share of Profit by Business (THB million) Hydraulic hoses 23% 3,200 Examination gloves 3,016 85% Natural Rubber 496 -5% 2,400 Others 1,952 -3% 1,690 +21% 1,600 649 535  The increase in share of profit from investment in 2,520 +13% 800 affiliates and joint ventures was driven primarily by 1,304 1,155 net profit growth of examination gloves business. 0  EBIT increased mainly from the growth of gross profit and lower administrative expenses. 2556 2557 2558 Operating Profit Share of Profit from Investment in Affiliates and JV 16

Agenda item 2 Factor 4 : Finance Cost 2015 2014 MLR = 6.6% RP 1.6% 2.0% STA = 3.2% RP = 1.6% MLR 6.6% 6.8% STA 3.2% 3.5% (THB million ) 2015 2014 Factors driving 2015 finance cost up  The increase YoY of unrealised loss on exchange rate of USD denominated Interest expenses 588 595 loans owing to a depreciation of IDR against USD. unrealised loss on exchange rate of 269 68  However, the increase of short-term and long-term borrowings from financial USD denominated loans institutions to support business expansion during the year has been counterbalanced by our lower effective interest rate Finance cost 857 663 17

Agenda item 2 Factor 5 : Government & Country Policy • The Thai government’s rubber buffer fund scheme implemented during peak season in Q1 2015 to buy ribbed smoked sheet (RSS) at Government Policy higher-than-market price has disrupted our raw materials stock up activity and affected our sale performance since the global market price of RSS did not pick up in the same magnitude of local price. • The reinstatement of US tariff for Chinese tires in January 2015 had Tax Policy of adversely impacted the Chinese tire manufacturers. Important Countries • China purchase tax reduction of small car took effect on October 2015 through the end of 2016 could bolster automobile and tire industry. 18

Agenda item 2 Net Profit and Net Profit Margin Net profit and net profit margin (THB million) increase due to: 2,000 2.5%  The increase of gross profit from 2.0% 1,820 2.0% selective selling policy 1.8% 1,500  The decrease of administrative 1.4% 1.5% expenses. 1,000 1,118 1,038  Profit sharing from our joint ventures 1.0% mainly from an improvement of net 500 0.5% profit of examination glove business Offset by - 0.0%  Less gain from hedging activities 2556 2557 2558 Net profit (LHS) Net profit margin (RHS)  The increase of finance cost 19

Agenda item 2 Financial Structure – Total Assets 2015 Total Assets Consolidated ( THB million ) 31 Dec 15 31 Dec 14 % Chg. Cash and cash equivalent 2,197.2 2,131.6 3.1% Cash and cash Trade accounts receivable and other Trade accounts receivable 3,854.2 4,688.4 -17.8% receivable, net equivalent Investment in and other receivable, net Others Inventories, net 13,959.8 10,029.9 39.2% associates and 11% 8% 5% 9% JVs Other current assets 1,519.4 834.4 82.1% 32% Total Current Assets 21,530.6 17,684.4 21.7% Investments in associates 4,736.7 4,036.1 17.4% 35% Property, plant and equipment, net 15,185.5 14,355.0 5.8% Inventories, net Rubber and Palm plantations, net 1,221.2 901.2 35.5% Property, plant and Other non-current assets 1,204.5 813.8 48.0% equipment, net Total non-current assets 22,348.0 20,106.1 11.2% Total Assets 43,878.6 37,790.5 16.1% 20