Gc 05

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INDEX PAGE

GENERAL INFORMATION 3 FINANCIAL SUMMARY 4 MESSAGE FROM THE CHAIRMAN 5 BUSINESS CHARACTERS 7 REVENUE STRUCTURE 8 COMPANY BACKGROUND 10 INDUSTRY OVERVIEWS 11 RISK FACTORS 16 SHAREHOLDER STRUCTURE 18 MANAGEMENT STRUCTURE AND DIRECTORS 19 RELATED TRANSACTIONS 33 DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION 39 AUDIT COMMITTEE’S REPORT 41 AUDITOR’S REPORT AND FINANCIAL STATEMENT 43

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GENERAL INFORMATION 31 December 2005

Company Name Global Connections Public Company Limited (“The company” or “GC”) Symbol GC Business Distributing agent of plastic, petrochemical and additive, which are used

in petrochemical and plastic transformation process. Head office 13/1 Moo 2 Kingkaew Rd., Rachateva, Bangplee, Samuthprakarn 10540 ,

Thailand Homepage http://www.gc.co.th Telephone +66 (0)2463-7921, +66 (0)2763-7999, +66 (0)2763-7923-42 Facsimile +66 (0)2763-7950, +66(0)2312-4880-1 Registration Number 0107574800153 Establishment date 27 September 1994 Date of registration Public Company

17 March 2005

Stock Listed Date 6 December 2005 Registered and Paid Capital 200,000,000 Baht Number of Ordinary Shares 200,000,000 Shares Registrars Thailand Securities Depository Co.,LTD. Capital Market Academy Building, 2nd FL 2/7 Moo 4, (North Park Project) Vibhavadi-Rangsit Rd., Tung Song Hong, Laksi, Bangkok, 10210, Thailand Tel. + 66 (0) 2596-9000 Fax. +66 (0) 2832-4994

Financial Advisor Kim Eng Securities (Thailand) PLC. 999/9 The Offices at Central World, 20th-21st FL. Rama 1 Road, Pathumwan, Bangkok 10330, Thailand Tel. +66(0)2658-6300 Fax. +66(0)2658-6862

Auditor Ernst & Young Office Limited 193/136-137 Rajadapisek Road, Klongtoey,

Bangkok 10110, Thailand Tel. +66(0)2264-0777 Fax. +66(0)2661-9192

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FINANCIAL SUMMARY

2005 2004 2003 FINANCIAL POSITION (MILLION BAHT) Current Asset 644 549 445 Total Asset 893 854 697 Current Liabilities 505 586 485 Total Liabilities 596 694 549 Shareholder’s Equity 297 160 148 OPERATING RESULT (MILLION BAHT) Sale Revenue 3,258 2,617 1,864 Gross Profit 163 133 81 Operating Profit 76 65 37 Net Profit 37 35 13 FINANCIAL RATIOS Return on Asset (%) 4.18 4.47 2.19 Return on Equity (%) 15.99 22.54 10.13 Net Profit Margin (%) 1.12 1.32 0.71 Current Ratio (Times) 1.28 0.94 0.92 Debt to Equity Ratio (Times) 2.00 4.35 3.71 Book Value per Share (Baht) 1.49 1.03 1.48 Net Profit Per share (Baht) 0.23 0.34 0.16

MESSAGE FROM THE CHAIRMAN

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n behalf of the Board of Directors of the company, I would like to express our gratitude to all customers, suppliers, financial institutions for the trust bestowed to us. And also thank all staffs for their capability and the devotion to work which bring growth and profit to the company for 10 consecutive years with an average growth rate of 25 - 30 percent annually. The year 2005 was the 11th year of operation in which the company represented as distributing of raw materials related to plastics and petrochemicals for 24 leading companies both domestic and international including CCC Chemical Commerce Company Limited, the affiliated company of Cementhai Chemicals Group.

In addition, the company has been listed in the Stock Exchange of Thailand (SET) and the shares have been trading under the main board of the SET since December 6, 2005. Our vision is to be "The Best Solution and Service Provider" and to be more than just a raw material supplier. To be the center for knowledge and the most up-to-date technology from the world leading manufacturers capable of providing technical consultant including market development which is useful for the customers and suppliers of the company. Apart from this, the company recognizes the importance of good Corporate Governance (CG). Hence the accounting system has been established in accordance with General Accepted Accounting Principles (GAAP) ensuring the correctness and transparency prior to the company listing. The company independent directors are qualified professionals from various fields, namely accountant, finance and industry. It is important for the company to set up an internal audit system to create confidence and render consultancy which will lead to the sustainable development in term of the quality of management and reduction of risk factors.

For the operating result of the year 2005, the company successfully generated all time high profit by having net profit of Baht 37 Million, an increase of 5.4 percent from the revenue of Baht 3.272 billion. The growth was partly the effect of the world oil price increase which had direct effect on petrochemical products price and the other part was from an increase in the new customers and higher purchase volume from the existing big customers following the growth of petrochemical industry and the company policy to increase the sale portion of specialty grades.

In the year 2006 the world economy still faces the on going changes all the time and may affect to the economic growth of the country. However from the past records the growth rate of plastics and petrochemicals industry has been growing in the range of 1.5 to 2.0 times of GDP all the time. It is expected that plastics and petrochemicals industry will continue to grow at such high rate. The demand for plastics has been increasing rapidly and in the future plastics will still be the products which are replacing other materials rather being replaced, especially Thailand is currently the number one production hub for petrochemicals in ASEAN. ASEAN FREE TRADE AREA (AFTA) enhances the opportunity to increase the business transactions. The reduction of import duty on petrochemical products in accordance with the announcement of the Ministry of Finance provides an advantage for the company which is the most ready in all aspects to import special grades petrochemical and plastics

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products at the lower costs due to lower import duty enabling the company to be in the better position to compete.

From the above mentioned situation, the company will operate on the basis of strategic partnership with customers, producers, inclusive of financial institutions for the sake of long term mutual benefits aiming at expanding specialty products, complete range of products and focus on development and efficiency improvement in various areas such as

--- providing advice on production techniques and collaboration in new product development for customers

--- providing good corporate governance management together with the policy to render regular dividend yield for the shareholders

--- enhance the company staffs with management knowledge and new technology --- build good relationship and develop the quality of staffs to create cooperation and coordination

among all parties in various aspects such as marketing, technology development and logistic for the sake of higher efficiency thus reducing the costs for the whole system

Lastly, all the successes of the enterprise is the result of the collaboration and devotion of all staffs, the vision and special care in management from all committee plus the support and trust from the shareholders, customers, suppliers and financial institutions. The Board of Directors of the company is confident that the success which the company has achieved this year will be the strong fundamental and foundation paving the way for the company to be the leader in the business of distribution of raw materials related to plastic and petrochemical in the country.

Yours sincerely,

( Dr. Pisit Leeahtham )

Chairman

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BUSINESS CHARACTER

The Global Connections Public Company Limited (“the Company” or “GC”) is the distributing agent of plastic, petrochemical and additive, which are used in petrochemical and plastic transformation process. The company is the distributing agent for 24 companies, which are both domestic and foreign companies leading in petrochemical and plastic in terms of production capacity and technology such as CCC Chemical Commerce Co., ltd.(a subsidiary owned 100 percent by Siam Cement Plc), Thai Plastic and Chemical Plc, Exxon Mobile Chemical, DuPont Engineering Polymers, Siam Polystyrene, Ciba Special Chemical, ChiMei Corporation, and etc. By this reason, the Company is considered to be the Thai distributor who provides the most variety petrochemical and plastic related products for Thailand.

The Company was established on September 27, 1994 by five experienced founders who each has been working in petrochemical industry for more than 15 years with the company initial registered capital of baht 2 million and began fully commercial on April 1, 1995. The knowledge and experience of founders coincided with the rapid emerging petrochemical industry in Thailand created the rapid growth for the Company. The Company’s sale growth rate was 44 percent annually rising from 45,536 metric tons in the year 2002 to 62,415 metric tons in the year 2005 with the effect from increment in sale volume 12 percent and increment in pricing 31 percent annually. On December 31, 2005 the registered capital of the company was raised to baht 200 million.

The objective of the Company is to be the best total solutions provider for petrochemical and plastic industry not only for supplying the variety products but also for advising production technology and knowledge to customers/end users in order to form long term strategic partnership with the customers as well as the suppliers.

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REVENUE STRUCTURE

The Company’s main business can be categorized into three business-units.

1. Business Unit 1: Commodity Polymer Business Unit

2. Business Unit 2: Specialty and Engineering Polymer Business Unit

3. Business Unit 3: Specialty Chemical Business Unit

The Company’s product selections ranging from commodity polymer to special additive chemical which contribute high profit margin. Global Connections PLC is one of the only two Thai distributors offering product selections from common commodity grade polymers to special grade polymers. The Company’s revenue baht 3,271 million in 2005 derived from Commodity Polymer (B.U.1) 74.1% (or baht 2,424 million), Specialty & Engineering Polymer (B.U.2) 20.4% (or baht 666 million), Specialty Chemical (B.U.3) 5.1% (or baht 167 million) and from other income 0.4% (or baht 14 million). During the past couple years, the Company business strategy was to expand market in Specialty Product Units which contributed better profit margin and depended largely on technical support, obviously the growth was significant from baht 391 million in the year 2002 to baht 833 million in the year 2005.

COMPANY REVENUES STRUCTURE 2003 - 2005: BREAK DOWN BY BUSINESS UNITS

2003 2003 2005 Amount Amount Amount REVENUE STRUCTURE

(mil THB)

%

(mil THB)

%

(mil THB)

%

Commodity polymer

1,287.2 68.7 1,864.8 70.9 2,424.0 74.1

Specialty and engineering polymer

499.4 26.7 629.7 23.9 666.2 20.4

Specialty chemical 77.4 4.1 122.2 4.7 167.4 5.1

Sale Revenue 1,864.0 99.5 2,616.7 99.5 3,257.6 99.6

Other income1 9.1 0.5 14.2 0.5 14.2 0.4

Total Revenue 1,873.1 100.0 2,630.9 100.0 3,271.8 100.0

Growth rate 31.80% 40.50% 24.36%

Remark: 1 Other income included commission income from oversea suppliers and interest income.

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THE COMPANY REVENUE BREAKS DOWN: YEAR 2003 - 2005

0

500

1,000

1,500

2,000

2,500

3,000

3,500

MILLION BAHT

2002 2003 2004 2005YEAR

Other IncomeSpecialty chemicalSpecialty and engineering polymerCommodity polymer

THE COMPANY SALE GROWTH FROM 1995 TO 2005

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

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COMPANY BACKGROUND

1994 GC was established with initial registered capital of Baht 2 million on 27th September 1994. 1995 GC was appointed to be HDPE distributing agent of Bangkok Polyethylene Plc. and increased its

registered and paid-up capital to Baht 5 million. 1996 GC was appointed to be distributing agent of CCC Chemical Commerce Co., Ltd. and Eastman

Chemical appointed GC to be distributing agent, which was the start of specialty product trading. GC increased its registered and paid-up capital to Baht 10 million.

1997 GC increased its paid-up capital to Baht 20 million to support the company expansion. GC was appointed to be distributing agent of Dupont Engineering Polymers and Chi Mei Corporation.

1998 GC was appointed to be distributing agent of Ciba Specialty Chemical and increased its paid-up capital to Baht 30 million.

1999 GC was appointed to be distributing agent of Dow Chemical Thailand and increased its paid up capital to Baht 50 million.

2000 GC was appointed to be distributing agent of Advance Elastomer Systems (AES). 2001 GC increased its paid-up capital to Baht 80 million to support the company expansion. 2003 GC increased its paid up capital to Baht 100 million and moved its warehouse to Kingkaew road. GC

was appointed to be distributing agent of Thai Plastic and Chemical Plc. 2004 GC was appointed to be distributing agent of Exxon Mobil, the company moved the headquarters to

Kingkaew road to facilitate the operation. The company paid dividends Baht 78 million and increased its paid-up capital to Baht 155 million.

2005 In March, GC transformed into public company limited, increased its paid-up capital to Baht 200 million and changed its par value to Baht 1 per share with the intention to implement an IPO of 45 million shares. (1.1 million shares for ESOP at baht 1.03 per share and the remain 43.9 million shares for IPO) “GC” common stock was IPO and listed in The Stock Exchange of Thailand since 6 December 2005

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INDUSTRY OVERVIEWS

According to the GC’s business characteristic, the company is a distributing agent of plastic and petrochemical product which the company’s performance will relate to petrochemical industry. The information of Thailand Petrochemical industry from The Office of Industrial Economics illustrates summary as the following.

Plastic Product Industry Plastic ProductThe plastic products produced in Thailand including plastic bag and sack, film sheet, foil, etc., seventy

percent of total production sold domestically while the rest was for export. Majority of manufacture are small size of business only 10 percent are large manufacturers. Type of raw plastic material can be described into 2 categories

1.Thermoplastic which can be reprocessed such as Polyethylene (PE), Polypropylene (PP), and Polyvinylchloride (PVC)

2.Thermosetting plastic which can not reprocessed such as Phenolics , Polyesters , Urea , and Melamine Industries which use plastic as raw material comprise of packaging, textile, shoes, construction

materials, electrical appliances, and automotive parts industry. Cost structure of these industries consist of plastic 70 percent, labor 10-15 percent, energy 8 percent and 7-12 percent as administration cost.

MarketingExport

In the year 2005, the export value of finished plastic goods was approximately USD 1,857.1 million, an increase of 19.98 percent from the year 2004 as a result of growing demand from Hong Kong, China, USA, and Japan.

The export value in the year 2005 were from plastic film, foil and strip with the value of USD 534.1 million, plastic bag with the value of USD 517.9 million, and plastic tableware with the value of USD 37.6 million, an increase of 14.60%, 38.88% and 22.88%, respectively, from the previous year.

Last year, the export volume of finished plastic goods from Thailand had increase noticeably due to the growing demand from USA since the disaster of hurricane causing shortage in production capacity of plastic and petrochemical in USA.

Export Value ( Million USD) Change (percent)

Product Type 2004 Q3/2005 Q4*/2005 2005* Q4/Q3

2005(%) 2005 Compare

2004 (%) Plastic Bags and Sacks 372.9 159.3 129.5 517.9 -18.73 38.88 Film Foil and strip 466.1 146.5 133.5 534.1 -8.85 14.6 Accessories and outfits 25.8 6.2 5.9 23.5 -5.38 -9.04

Plastic Boxes and Caskets 26.3 6.8 7.5 30.1 10.78 14.58

Office appliances 21.8 6.3 5.9 23.5 -6.88 7.65

Straw and Pipe 32.7 10.1 10.1 40.3 -0.33 23.14

Plastic floor tile and wall 40.1 15.1 12.5 50.1 -17.00 25.02

Tableware 68.9 22.5 21.2 84.7 -5.93 22.88

Others 493.2 143.9 138.2 552.9 -3.94 12.11

Total 1547.8 516.7 464.3 1857.1 -10.15 19.98

Data taken from: Ministry of Commerce Thailand. *Remark: Estimated number

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Import

In 2005, Thailand had imported finished plastic goods approximately USD 2,030 Million, 5.54% higher than the last year, mostly from Japan, China, South Korea, and South East Asian. The increase of import value come from Film Foil & Strip with 10.49 percent increment and from Straw and Pipe 0.75 percent increment, compare to the previous year.

Finished plastic goods have been import into Thailand increasingly because product price from China and Malaysia are very competitive.

Type Import value ( Million USD ) Percent Change

Product 2005 Q3 / 2005

Q4* / 2005 2005*

Q4*/Q32005 (%)

2005* compare 2004 (%)

Straw and Pipe 80.5 18.7 20.1 81.1 7.66 0.75 Film Foil and strip 668.9 190.2 184.8 739.1 -2.86 10.49 Others 1,174.0 294.8 302.6 1,210.4 2.65 3.10 Total 1,923.4 503.7 507.5 2,030.0 0.75 5.54

Data taken from: Ministry of Commerce Thailand. *Remark: Estimated number

Petrochemical Industry

The tendency of Petrochemical Industry in Thailand in the year 2005 still rising noticeably as a result of the growth of petrochemical industry from the increment of both sale quantity and sale price of most petrochemical products. Demand linkage from plastic related industries such as packaging, textile, automotive part, electric appliance, construction material, and fertilizer, which sale are increase in both domestic and international market. Besides the increase of demand size, rising in oil price also enhance and promote Petrochemical industry upward trend for the next 2-3 years.

Marketing

Expected Import value of upstream, intermediate, and downstream petrochemical industry in 2005 are baht 6,928, 48,470, and 65,195 million, correspondingly. Import value of upstream decrease 14.7%, value of intermediate increase 2.82% and the value of downstream increase 3.67%, compare to the previous year. On the other hand, export value in year 2005 for upstream was baht 39,104 million or 32.55% increase, intermediate baht 19,133 million or 17.29% increase, and downstream baht 148, 247 million or 24.54% increase compare to the same period.

Petrochemical Import table Import value (Million Baht) Export value (Million Baht))

Product 2004 2005* 2005*/2004(%) 2004 2005* 2005*/2004

(%)Upstream 8,123 6,928 -14.17 29,501 39,104 32.55 Intermediate 47,139 48,470 2.82 16,312 19,133 17.29 Downstream 62,888 65,195 3.67 119,034 148,247 24.54

Source : Thai customs department. *Remark : Estimated

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Taxation on Petrochemical industry

The objective of Asian Free Trade Area (AFTA) agreement is to relieve Import duty and Tariff among member nations to be 0-5 percent within 10 years since being as a member nation. In the year 2003 Import duty and Tariff for all phase of petrochemical product would be lower to 5 percent. Consequently, degree of competition in this region would be higher, trade value among member nations would be raised while non-member would be less impacted due to MFN (Most Favorit Nation) Tariff rates are applied. Currently, Tariff rates of MFN are higher than that of AFTA, however MFN rate, in the next five years, will be reduce to 5 percent, hence the trend of import in Petrochemical product of Thailand potentially increase. The Company can gain benefit from the lower tariff rate as the cost of import goods lower and enable the company to expand the market due to the price difference between domestic and import narrower, furthermore the properties of import products generally superior. Therefore, the company’s sale would be increase easier as a result of change in Import duty and tariff rate.

Import duty and Tariff rate for Petrochemical in Thailand 2000 2001 2002 2003 2004 2005 2006 2007

MFN Upstream 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%Intermediate 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Downstream 20.0% 20.0% 20.0% 20.0% 20.0% 12.5% 8.8% 5.0%AFTA Upstream 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Intermediate 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Downstream 15.0% 15.0% 10.0% 5.0% 5.0% 5.0% 5.0% 5.0%

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Role of Distributing AgentIn general, large producers such as Exxon Mobil, Ciba, and Chi Mei and others in Petrochemical

industry do not distribute their products by themselves because of the scatter location of end-users, high cost of each trade transaction. Furthermore, end-users of plastic mostly use the assortment of plastic raw material in the production process. As end-users perspective, it is too complicated to buy raw materials at a time from many producers. The picture below well illustrates transaction without role of distributing agent.

Trade transaction without distributing agent

The essential of distributing agents for petrochemical industry is to connect the entire product ranges from the number of large producers to serve the various needs of end-users/ customers, and to lower logistic cost of each transaction. The company can delivers value added to both suppliers and customers by satisfy economy of scope to the number of customers/ end-users and satisfy economy of scale to large producers simultaneously.

Role and benefit of distributing agent

The above picture demonstrates role and benefit of distributing agent in petrochemical industry similar to role of distribution channel for consumer products which regularly generate trade transaction at the supermarket or hyperstore such as TescoLotus, Makro, and BigC.

In addition, the barrier for new entry in petrochemical distributing agent is that the petrochemical producers usually appoint only one or two distributing agents for each country as general practice.

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Industrial Tendency Petrochemical industry has been growing in accordance with the growth trend of the economy. Forecast for year 2006 for plastic industry is expected to grow continually as a result of increase in oil price and the expectation of the development in many industrial sectors such as automotive, packaging, electrics, and electrical appliance, etc., Several producers deploy profit from this upward trend to reinvest and to improve efficiency in both upstream and downstream petrochemical production to prepare for their competitiveness for the year 2008 - 2010, which expected to be down cycle of the industry.

According to forecast of petrochemical and growth of economy, The Company believed that our business will be expanding to the target successfully. Besides, constructive factors such as reduction in import duty tariff rate will enhance company’s competitiveness in terms of imported product pricing.

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RISK FACTORS 1.Risk associated with the reliability on major suppliers or manufacturers. The highest supplier proportion is CCC Chemical Commerce (a subsidiary of Siam Cement Plc.), which

is 55 percent of total purchase in 2005. However, this purchasing proportion declines continuously. In 2003, this proportion was 66.01 percent of total purchase; in 2004 it was 63.02 percent of total purchase and declined to 55 in 2005. Moreover, GC focuses to increase the market and sale the special grade products. These products are the goods of Specialty and engineering polymer and Specialty chemical business unit. This proportion is 25.6 of total selling now. This will decrease the proportion of purchasing from CCC Chemical Commerce and will reduce the risk associated with the reliability on major suppliers.

2.Risk associated with the reliability on the officers.Because GC sells the goods by sell officers mostly. Hence, GC has the risk associated with the

reliability on the officers. If the selling officers leave GC, the clients may move their selling. Moreover, selling specialty products needs special knowledge of selling officers. If these selling officers leave GC, GC may face the officer replacement problem.

However, few officers quitted and the management has sold the product to the clients for a long time. Thus, it reduces this risk. Moreover, the management has the knowledge of every product and GC has the policy to train the officer continuously. Hence, GC should replace the officer shortly. Moreover, for specialty products, when the buyers of clients assure the quality of the products, the clients will not change the products without really necessary reasons.

3.Risk associated with the Accounts Receivable. Now GC sells the goods in credit term mostly. Thus, if account receivable turns to be bad debt

significantly, GC may encounter a delinquency risk and affect the company’s profitability. However, GC had the policy to verify the clients’ credit before provide credit to customers. GC provides the credit to some of A, B and C customers. If the new clients, who is not A or B group or cannot be examined the financial status, they have to buy the goods in cash for 2-3 times to show the ability to pay before GC provides credit to them. Now GC sets the team to consider the credit of the clients, both new and old one and also set the credit approval system, which separate from sale department to control the unsafe sale. Moreover, GC has insurance, which covers the damage from account receivable. The first insurance issue effected from 1st May 2005 and will end on 30th April 2006. It insures against the bad debt of customers, which the outstanding is more than Baht 1 million and covers 80 percent of total bad debt value. The minimum insurance premium is Baht 4.16 million and the maximum protection is 30 time of paid insurance premium. The insurance company set insurance coverage of each client. GC sets the doubtful debt allowance according to the risk of accounts receivable, the past experience and the present status of the clients. Then GC compares with the allowance for doubtful debt and insurance to verify if GC needs to reserve more doubtful debt allowance.

4.Risk associated with exchange rate. Nearly all of the goods bought from foreign suppliers are in US Dollar term. In 2005, GC imports the

goods in US Dollar accounts for 20.87 percent of total purchase and expects that it will increase to 25-30 percent of total purchase in 2005. The petrochemical import duty of non-AFTA reduces from 12.50 percent to 8.75 percent. This increases the demand of imported specialty goods. If the exchange rate of Thai Baht against US Dollar fluctuates, it may affect the GC’s profitability.

However, to protect the exchange rate risk, GC follows the movement of the exchange rate of Thai Baht against US Dollar closely by asking the advice of the bank to determine whether GC should buy the forward contacts. GC has the policy that there is not speculate. GC must not buy the forward contacts without the trading obligations. Moreover, GC uses the cost plus policy to set the price for imported goods and GC will not sell the goods in advance without agree the exchange rate with the clients or buy the forward contacts. This can provide some hedge of exchange rate risk.

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5.Risk associate with working capital Because GC has to reserve the inventory for deliver to the clients in a short time and credit term of

clients is about 44 days, which is longer than the credit term of suppliers, which is about 20 days. This causes GC have to maintain the working capital for operation. Cash cycle is about 46 days. If sale of the company increases significantly, GC may need to find more capital source, which is more costly than the financial cost in the present.

However, GC has the credit line with many financial institutions and obtains the capital from this initial public offering. This makes GC the stronger working capital status and improves the debt to equity ratio. Moreover, GC is likely to get the better conditions from bank due to GC’s good performance.

6.Risk associated with the fluctuations in the price of goods in the world market Although GC sells the goods to the domestic customers mostly, product price fluctuates with the world

market because the petrochemical goods is commodity produce, which depends on uncertain demand and supply in the world market. GC’s profitability changes according to the world market price as the cycle. There is the risk in the case that GC buys the goods in the high price and the price declines. This may lead GC to sell inventory to the clients cheaper or lower than buying price, which cause GC’s profitability’s lower or loss in some cases.

However, GC tries lower this risk by keeping inventory in the low level especially the goods, which has high fluctuation price, and follows the changing price from the global supplier data all the time. Moreover, for the customers, who order the big amount in advance, GC is supported about the quantity and price directly from manufacturers and/or suppliers. This can lower the risk. Furthermore, specialty products are affected by this risk only little because GC sets the price according to the cost.

7.Risk associated with low profit margin Profit margin of GC is low, which is according to the nature of business. Thus, factors i.e. the

fluctuation of interest rate, foreign exchange, quality of account receivable and inventory management could affect net profit margin. However, GC has the stronger working capital situation from this initial public offering and good firm performance. Thus, GC trends to get the better conditions of debt from bank. Furthermore, GC follows the exchange rate policy, customer credit policy and inventory management policy closely, which should lower the affect to the profit margin.

Moreover, GC has the advantage about the accepted quality of the products from the first to the third of the world manufacturers, which leads GC to expand the specialty products in high rate every year. This leads profit margin of GC better and higher than common competitors, who focus on commodity products, lower profit margin.

8.Risk associated with terminates the distributing agent contact. The distributing agent contacts are both in long term and one-year contact. Thus, GC will face the risk

not to continue the distributing agent contact from the manufacturers. if GC cannot follows the agreements of each manufacturer i.e. cannot achieve the sale target of manufacturers or cannot maintain the basic structure, which is set by the manufacturers.

However, GC has good performance continuously and also has many repeat clients, which impress the manufacturers. Moreover, GC contacts with the manufacturers closely to explain the domestic sale progression. Thus, the manufacturers remain renew the contacts even GC cannot achieve the sale target because they understand the reasons. In the past GC has never been terminated the contact with any manufacturers.

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SHAREHOLDER STRUCTURE Shareholders’ Structure As of 25th November 2005

No. of shareholders No. of shares % of paid-up capital 1. Strategic shareholders 1.1 Government, state-owned enterprises - - - or public sector agencies

1.2 Directors, manager, and executive management 27 158,099,900 79.07 including related persons and associated persons) 1.3 Shareholders who have a holding of above 5% - - -

including related persons 1.4 Controlling Shareholders - - - 1.5 Shareholders who enter into agreement not to - - - sell their stocks within a specified period 2. Non-Strategic shareholders hold > 1 trading unit 1,062 41,900,100 20.93 3. Non-Strategic shareholders hold < 1 trading unit - . - . - . Total Shareholders 1,089 200,000,000 100.00

Major Shareholders As of 25th November 2005 Name No. of shares % of paid-up capital 1. Mr. Somchai Kulimakin 46,499,800 23.25 2. Mr. Siri Thirawattanawong 27,125,000 13.56 3. Mr. Bhiya Jriyasetapong 27,125,000 13.56 4. Mr. Sumruay Tichachol 27,125,000 13.56 5. Mr. Aikachai Sirijantanan 27,125,000 13.56 6. Ms. Pranee Piriyamasakul 1,000,000 0.50 7. Mr. Somkiat Terdtultaveedey 600,000 0.30 8. Mr. Ronnachai Jinwattanaporn 600,000 0.30 9. Mrs. Saowanee Dolrudej 500,000 0.25 10. Mr. Wattana Tangkitwej 500,000 0.25 11. Ms. Kamolpon Nontananonchai 500,000 0.25 12. Mr. Chaiporn Panchavongroj 500,000 0.25 13. Ms. Noradee Vongsirikul 500,000 0.25 14. Mr. Vinai Srisuvan 500,000 0.25 15. Mr. Sumit Sumitratchatanon 500,000 0.25 16. Mrs. Siripa Sumitratchatanon 500,000 0.25 Total 161,199,800 80.59

Foreign Shareholders As of 25th November 2005

There are 15 foreign shareholders which held 993,800 shares or 0.50% of paid-up capital

Note : The company has a limitation on the percentage of equity shares held by foreign shareholders stated in the article of association no. 7 that The company equity shares are fully transfer except the transferring will cause share of the company held by the foreign shareholders exceed the 49% of the company total shares.

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MANAGEMENT STRUCTURE AND DIRECTORS

Dr. Pisit Leeahtam

Chairman of The board Age 54 Percent of Share holding (%) 0.08 2004 Present 2001 Present 2001 2003 1997 2001 1995 -- 1997 1991 -- 1994 1987 -- 1990

Chairman Vice Chairman CEO Deputy Minister of Finance Executive Vice President Director, Office of the Governor Economist

Global Connections PLC KGI Securities (Thailand) PLC TT&T PLC Ministry of Finance Bangkok Bank Plc Bank of Thailand International Monetary Fund (IMF)

Ph.D, Economics, Erasmus University, Netherlands M.S., Economics, Erasmus University, Netherlands B.S., Economics, Erasmus University, Netherlands

Directors Certification Program (DCP) class 18/2002 Thai Institute of Directors (Thai-IOD)

Mr. Virah Mavichak

Chairman of Audit Committee Age 62 Percent of Share

holding (%)0.05 2004 Present 2005 Present 2001 2003 1999 2000 1997 - 1998 1996 1997 1973 1996 1972 1973 1972 1973 1971 - 1972

Chairman of Audit Committee Director and Environment Advisor Director general Deputy undersecretary General inspector Deputy director general Engineer Plant Manager Production Manager Graduate Instructor

Global Connections PLC Refine Tech Co.,Ltd. Department of Industrial works The permanent secretary Office of Ministry of Industry The permanent secretary Office of Ministry of Industry Department of Industrial works Department of Industrial works Sri-Thai Co.,Ltd. Union Carbide (Thailand) Co.,ltd. Faculty of Engineering, Chulalongkorn University

M.S. Chemical Engineering, University of Texas, USA B.S. Engineering, Chulalongkorn University

Directors Certification Program (DCP) class 26/2003 Thai Institute of Directors (Thai-IOD)

20

Assoc.Prof. Chawalee Pongpatirochna

Audit Committee Age 70 Percent of Share holding (%) 0.05 2004 Present 1999 -- Present 1997 -- Present 1995 -- Present 2004 -- Present 1996 -- 2003 1962 -- 1995 2519 - 2530

Audit Committee Chairman of Audit Committee Director Director Executive Director Managing Director Assoc. Professor Financial management secretary

Global Connections PLC Phatra Leasing PCL Phatra Leasing PCL Chula Unisearch, Chulalongkorn University The Continuing Education Center, Chulalongkorn University Intellectual Property Institute , Chulalongkorn University Faculty of Commerce and Accountancy, Chulalongkorn University Chulalongkorn University

Equivalence to Master degree, Business Administration, The School of Economics and Business Administration in Gothenburg , Sweden Bachelor Degree in Accounting, Chulalongkorn University

Director Accreditation Program (DAP) class1/2546 Thai Institute of Directors (Thai-IOD)

Mr. Chanitr Charnchainarong

Audit Committee Age 41 Percent of Share holding (%)0.05 2006 Present 2005 Feb 2006 2004 2005 1998 Jan 2006 1998 Jan 2006

President Audit Committee Advisor Vice President Director

Market for Alternative Investment (mai) Global Connections PLC Market for Alternative Investment (mai) VNET Capital Company Limited VNET Venture Capital Management Securities Co. Ltd

Master of Science in Electrical Engineering, Purdue University, Indiana, USA Bachelor of Science in Electrical Engineering, Purdue University, Indiana, USA Chartered Financial Analyst

Directors Certification Program (DCP) 2004 Thai Institute of Directors (Thai-IOD) Remarks: Mr. Chanitr Charnchainarong had resigned from The Company’s Audit Committee on February 14, 2006

21

Mr.Suchart Suphayak Audit Committee Age 48 Percent of Share holding (%) 0.00 2006 Present 2004 Present 2004 Present 2004 Present 2003 - 2004 1998 2003 1996 1997 1994 1996

Audit Committee Advisor Audit Committee Audit Committee CFO Vice President Vice President Vice President

Global Connections PLC Total Green Group Co., ltd.. ADDA (Thailand) PCL Repax Construction Co., ltd. Sammitr Motor Group ltd. Kad Suan Kaew Co., ltd Rattana Real Estate Plc. Thanapol Finance Securities PLC

Master Degree in Business Administration, Chulalongkorn University Bachelor Degree in Accounting , Assumption University

Director Accreditation Program (DAP) class 30/2004 Thai Institute of Directors (Thai-IOD) Remarks : The Board of Directors’ resolution 1/2006 held on February 22, 2006 appointed Mr. Suchart Suphayak to be a

member of the Audit Committee.

Mr. Somchai Kulimakin

President Age 48 Percent of Share holding (%)23.25 1995 - Present 1988 1995 1985 1988 1979 - 1985

President Executive Vice President Assistant Manager Sale Dept. Manager

Global Connections PLC Liack Seng Trading Co., Ltd. Central Pacific (EX-IM) GmbH, Germany Metro Co., Ltd.

Bachelor Degree in Business Administration, Assumption University

Directors Certification Program (DCP) Class 62/2005 Thai Institute of Directors (Thai-IOD)

22

Mr. Sumruay Tichachol Senior Executive Vice President : Department of Marketing 1

Age 48 Percent of Share holding (%)13.56 1996 Present 1994 1996 1989 1994 1986 1988 1981 1986 1980 - 1981

Senior Executive Vice President : Department of Marketing 1 Sale Dept. Manager Direct Sale Manager Sale Representative Sale Dept. Manager Technical officer

Global Connections PLC Siam brother Import-Export Co.,Ltd., Thai Polyethylene Co., ltd. Siam Cement Trading Co.,Ltd. Metro Co., Ltd. Bangkok Steel Industry PLC

Bachelor Degree in Economics, Thammasat University

Director Accreditation Program (DAP) 2004 Thai Institute of Directors (Thai-IOD)

Mr. Aikachai Sirijuntanan

Senior Executive Vice President : Department of Marketing 2 Age 41 Percent of Share holding (%)13.56 1995 Present 1986 1995 1986 - 1988

Senior Executive Vice President Department of Marketing 1 Sale Dept. Manager Instructor of Polymer Engineering Faculty

Global Connections PLC Liack Seng Trading Co., Ltd. Rajamangala Institute of Technology

Master Degree in Business Administration, Chulalongkorn University Bachelor of Science in Industrial Chemistry, King Mongkut s Institute of Technology North Bangkok. Bachelor Degree in Polymer Engineering, Rajamangala Institute of Technology Certificate Chemical Engineering, Rajamangala Institute of Technology


23

Mr. Siri Thirawattanawong

Senior Executive Vice President: Department of Administration Age 42 Percent of Share holding (%)13.56 1995 Present 1992 --1994 1990 - 1992 1987 - 1990

Senior Executive Vice President Department of Administration Sale Dept. Manager Sale Dept. Manager Sale Representative

Global Connections PLC Liack Seng Trading Co., Ltd. Talomsin Plastic Co.,Ltd. MC Plastic Co.,Ltd



Mr. Bhija Jriyasetapong

Senior Executive Vice President : Department of Operation Age 45 Percent of Share holding (%)13.56 1995 -- Present 1989 -- 1995 1983 -- 1989

Senior Executive Vice President Department of Operation Sale Dept. Manager Sale Dept. Manager

Global Connections PLC Liack Seng Trading Co., Ltd. Metro Co., Ltd.



24

The Board of Directors Members of the Board of Directors as of 31 December 2005

1. Dr. Pisit Leeahtam Chairman of the Board 2. Mr. Somchai Kulimakin Director 3. Mr. Siri Thirawattanawong Director 4. Mr. Bhija Jriyasetapong Director 5. Mr. Sumruay Tichachol Director 6. Mr. Aikachai Sirijuntanan Director 7. Mr. Virah Mavichak Director and Chairman of Audit Committee 8. Assoc. Prof. Chawalee Pongpatirochna Director and Member of Audit Committee 9. Mr. Chanitr Charnchainarong Director and Member of Audit Committee Remark : Mr. Chanitr Charnchainarong had resigned from The Company’s Audit Committee on February 14, 2006,

The Board of Directors’ resolution held on February 22, 2006 had appointed Mr. Suchart Suphayak to be a member of the Audit Committee.

Management Structure

Scope, Authorities and Duties of the Board of Directors

Board ofDirectors

Executive C om m ittee

Audit C om m ittee

Internal Audit

President

The President Office

Marketing Departm ent 1

MarketingDepartm ent2

Adm inistration Operation Finance & Account

25

The Board of Directors has authority in management and operation of the Company's business in accordance with the laws, objectives, the Articles of Association, and the resolution of shareholders’ meetings, has authority to formulate the policies and directions, the financial management, the risk management, to supervise and control the Management to compliance with the assigned policies efficiency and effectively, to be responsible to the shareholders, has to preserve the shareholders' interest, and disclose the information accurately and completely with the standard and the transparency. In addition, the Board of Directors is authorized to appoint the directors, and/or the executives to act under the scope of authority and duties of the Board of Directors, unless the acts of the following matters which shall be approved in advance by the shareholders’ meeting:-

(a) Any issues stipulated by law that resolutions of shareholders must be sought. (b) Any transaction in which the directors have the interest and there is a law or provision of the Stock Exchange of Thailand prescribes that there must be the approval of the shareholders' meeting for such transaction.

In this connection, the director who has the interest or has the conflict of interest in any matter is not entitled to cast the vote for such matter.

26

The Executive Committee

Members of the Executive Committee as of December 31, 2005 1. Mr. Somchai Kulimakin Chairman of Executive Committee 2. Mr. Siri Thirawattanawong Executive Committee 3. Mr. Bhija Jriyasetapong Executive Committee 4. Mr. Sumruay Tichachol Executive Committee 5. Mr. Aikachai Sirijuntanan Executive Committee

Scope, Authorities and Duties of the Executive Committee

1. To plan and formulate the Company’s policies, directions, strategies, work plans, organization structure, management structure, and business discipline to proper with the circumstances of the economy and the market’s competition for proposing to the Board of Directors’ approval.

2. To plan and formulate the Company’s business plan, annual budget, line of authority for proposing to the Board of Directors’ approval.

3. To audit and follow the implementation of the Company’s assigned policies and management directions efficiently and support the Company’s business performance.

4. To take consideration for approval of auctions or hire of works with company or person with the budget scope not exceed 150 million Baht.

5. To recruit or dismiss the Company’s staff in management level excluding Managing Director and the Company’s directors positions.

6. To supervise and checks the outcome of the Company’s daily operation in accordance with the Company’s business plan approved by the Board of Directors.

7. To sign on any documents which related to withdrawal document from the Company’s bank account under the conditions and limitations which approved by the Board of Directors.

8. To permit the Company’s expenditures on the approved annual budget without any limitation. 9. To sign on contract which binding the Company for the period from 1-3 years and not exceed 150

million Baht. 10. To invest or invest in capital expenditure (not exceed 150 million Baht) or the transaction fixed on

the annual budget approved by the Board of Directors. 11. To finds out the financing for investment or invest in capital expenditure which was approved by

the Board of Directors, or refinance the outstanding liabilities under the better terms and conditions. 12. To approve extra compensation for staff (Bonus) in accordance with the approved budget by the

Board of Directors. 13. To approve the rising of staff’s compensation in accordance with the approved budget by the Board

of Directors. 14. To act as appropriates for any duties which shall be assigned from the Board of Directors.

However, the Executive Committee shall delegate its powers to the Management of the Company as appropriates for approving of one or more financial issues under the authorized scope of power.

Nevertheless, the above delegation of authority shall be in accordance with Thailand legislations and the Company’s the articles of association. Moreover, where the conflicts of interest of the Executive Director(s) occurred of the prohibited person under the provision of SEC, the Executive Committee shall present that issue to the Board of Directors for taking the consideration, and the Executive Director(s) who has the conflict of interest is not entitled to cast the vote for such matter.

Nonetheless, any transactions which were in relation or related with the receiving or selling the Company or affiliate Company’s assets under provision of SET, shall be approved by the shareholder’s meeting and/or acted as stated in that provision.

27

The Management Committee

Members of the Management Committee as of December 31, 2005 1. Mr. Somchai Kulimakin President 2. Mr. Sumruay Tichachol Senior Executive Vice President Department of Marketing 1 (Commodity Products) 3. Mr. Aikachai Sirijuntanan Senior Executive Vice President Department of Marketing 2 (Specialty Products) 4. Mr. Siri Thirawattanawong Senior Executive Vice President Department of Administration 5. Mr. Bhija Jriyasetapong Senior Executive Vice President Department of Operation 6. Mrs. Pravishya Hansakul Executive Vice President Department of Accounting and Finance

Scope, Authorities and Duties of the Managing Director

1. To manages and operates Company’s normal business in accordance with business policies, plans and strategies approved by the board of Directors.

2. To permits any normal transaction of the Company including offering, contracting, purchasing, and hiring within the amount of Baht 30 Million or in accordance with the authority assigned by the Board of Directors.

3. To assigns any responsibilities of the Company’s management and operation to the Management or to the staff according to organization structure approved by the Board of Directors in line with the Laws and the Company’s articles of association.

4. To recruits, appoints, transfers, dismiss, lay-off, assigns wages of all Company’s staffs below the management level including appointing employer’s representative for the Company’s provident fund committee.

5. To issues any orders, practices, declarations, and memorandums involving operation in accordance with the policies and for preserve interest of the Company and for keeping the Company’s discipline.

6. To acts as appropriates for any duties which shall be assigned by the Board of Directors.

GC

1. Commodity Polymer

2. Specialty & Engineering

Polymer

3. Specialty Chemical

1.PolyolefinSBU

- CCC- SABIC- Borealis- The Polyolefin- Cabot Plastics- Asia Polymer- Nova Chemical- Others

2.PET&PVC SBU

- Thai PET- TPC- Others

1.Engineer&Synthetic

RubberSBU

2.Themo.Rubber&

Transparency SBU

3.StyrenicPlasticSBU

4.IT SolutionSBU

- Dupont- Chisso- G.E.Plastic- Exxon Mobil- Others

- AES- Eastman- - Exxon Mobil- Dow (UCC Prod.)- TPE Compound- Cabot Plastics- Others

- Chi Mei- Others

- DOW Chemical- Chi Mei- Denka- Nova Chemical- Others

1.Additive&Adhesive

SBU

2.Petrochem.&Intermediate

SBU

- Ciba Specialty- Crompton- Exxon Mobil- Others

- Chevron- Owen Corning- Luzinac- Others

GC

1. Commodity Polymer

2. Specialty & Engineering

Polymer

3. Specialty Chemical

1.PolyolefinSBU

- CCC- SABIC- Borealis- The Polyolefin- Cabot Plastics- Asia Polymer- Nova Chemical- Others

2.PET&PVC SBU

- Thai PET- TPC- Others

1.Engineer&Synthetic

RubberSBU

2.Themo.Rubber&

Transparency SBU

3.StyrenicPlasticSBU

4.IT SolutionSBU

- Dupont- Chisso- G.E.Plastic- Exxon Mobil- Others

- AES- Eastman- - Exxon Mobil- Dow (UCC Prod.)- TPE Compound- Cabot Plastics- Others

- Chi Mei- Others

- DOW Chemical- Chi Mei- Denka- Nova Chemical- Others

1.Additive&Adhesive

SBU

2.Petrochem.&Intermediate

SBU

- Ciba Specialty- Crompton- Exxon Mobil- Others

- Chevron- Owen Corning- Luzinac- Others

-Thai PET resin

- Rio Tinto Mineral - Others

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The Managing Director shall be under direct supervising of the Board of Directors and shall directly report to the Board of Directors. Thus, the Management Director shall perform in the directions and policies assigned by the Board of Directors.

Nevertheless, the above delegation of power shall be in accordance with Thailand legislations and the Company’s articles of association. Moreover, where the conflicts of interests of the Managing Director occurred or the prohibited person under the SEC’s provision appeared, the Managing Director do not have power for approval that matter and shall present that issue to the Board of Directors for taking the consideration.

Nonetheless, any transactions, which were in relation or related with the receiving or selling the Company of affiliated Company’s assets under the SET provision, shall be approved by the shareholder’s meeting and/or acts as stated in that provision.

29

The Audit Committee

Members of the Audit Committee as of 31 December 2005 1. Mr. Virah Mavichak Chairman of Audit Committee 2. Assoc. Prof. Chawalee Pongpatirochna Audit Committee 3. Mr. Chanitr Charnchainarong Audit Committee

Secretary to the Audit Committee Ms. Pornpimol Torpaiboon

The Audit Committee of the Company has the scope of duties and responsibilities to the Company’s board of directors as follows:

1. To review the sufficiency, credibility and objectivity of the financial reporting by coordinating with the external auditors and management responsible for preparing the quarterly and yearly financial reports. The audit committee may suggest issues or matters to be included for review or audit by the external auditors during its audit of the company. 2. To review the adequacy and effectiveness of the internal control systems and internal audit functions by coordinating with the external auditors and internal auditors. 3. To review compliance with the Securities and Exchange Acts, Regulations of the SET, and any other relevant laws. 4. To consider and advise the appointment of the external auditors including the audit fee by considering the creditability, the adequacy of its resources, the firm's audit engagements, and the experience of its supervisory and professional staff. 5. To consider compliance with all connected transaction disclosures or the conflict-of-interests disclosures. 6. To take care of any other matters assigned to it by the board of directors, such as reviewing the company's financial and risk management policies, reviewing compliance with the Code of Corporate Conduct of the management, and reviewing with the company's management, all important reports which must be disclosed to the public according to the law (e.g. Management Discussion and Analysis (MD&A), etc.). 7. To report the activities of the audit committee in the company's annual report, which must be signed by the chairman of the audit committee. The following information should be included in the report.

7.1 Comments on the company's financial reporting process and the disclosure of its financial information, which must be correct, sufficient, and credible. 7.2 Comments on the adequacy of the company's internal control systems. 7.3 Statements on whether the company's auditor is suitable for re-appointment. 7.4 Comments on compliance with the Securities and Exchange Acts, Regulations of the SET, and any other relevant laws. 7.5 Other statements that shareholders and general investors deem to be considered under the scope of the functions and responsibilities assigned to them by the board.

30

The finding for the Board of DirectorsAccording to the Company’s regulations, the Company does not have a pre-finding committee.

The Board of Directors consists of at least 5 Directors who appointed by the Shareholder Meeting with Majority decision in respect to the rules and measures as follows:

1. Individual election by the Shareholders

2. Under 1., there is an one vote per one share

3. The sequence of persons who being appointed started from the highest votes shall be appointed respectively as the Director(s) as equal as the total number of the Directors which will be appointed or elected in that period. However, when there are two or more persons getting the same amount of votes which caused to exceed the sum of appointing or electing of the Directors in that period, the decision of the Chairman of election shall prevail.

There is a number of one-third of the Board of Directors shall retire in each annual Meeting. Where the number of the Board of Directors cannot exactly divide by three, the total number of retiring Director(s) shall be the closet number of one-third. The retiring Director(s) in the first and second years after Company’s transforming shall be selected by the lucky draw. Otherwise, the longer Directors shall be retired. However, the retiring Director(s) under this clause may be re-elected.

Except for the number of the Board of Directors is not enough for the completion of its meeting, Where there is the unoccupied Director(s) caused by any reasons other than from the duration expired, the Board of Directors shall appoint the person(s), who qualified, and not prohibited by laws, to be the replaced Director(s) in the next Board of Directors’ meeting. In case of the duration of the replaced Director(s) is less than 2 months left, the replacing Director(s) shall be on that position as long as the left duration of the replaced Director(s).

Where the number of the Board of Directors is not enough of the completion of its meeting, the rests of the Board of Directors shall manage, on behalf of the Board of Directors, merely for setting up the Shareholder’s meeting for election of the entire unoccupied Director(s).

The rules of designating the independent Directors

The proceeding of finding the independent Directors

Firstly, the Board of Directors shall consider the persons who have the qualifications as defined by the regulation of SEC, and intently support the Company’s businesses with their appropriate potentials. Then, the Shareholder’s Meeting shall consider for approval on the final step.

1. Holding shares not more than 5 percent of voting rights shares of the Company, affiliated company, related company, or person who may has conflict with the company’s interest.

2. Being a director who is not an employee, staff member or does not take part in the management of any company, affiliated company, associated company or related company which may has conflict of interest with the Company.

3. Being a director who is not a related person or close relative of any person whom may has conflict.

4. Being a director who has no business relate with any company, affiliated company, associated company or related company which may has conflict or not being person who has conflict with the company’s interest that may obstruct his/her independent consideration for the Company.

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Remuneration Monetary Remuneration

(1) Remuneration for the Board of Directors From Fiscal year end December 31, 2004 and December 31, 2005, the number of meeting and the

amount of annual gratuity for the Board of Directors as the followings Meeting

Remark: * Director who had appointed on 22nd December 2005, which held only one meeting for the year 2005 ** Dr. Teeron Pongmakapat had resigned on 31st January 2005 and the Company had appointed Mr.Chanitr Charnchainarong to be the audit committee on 21st February 2005

Remuneration

Remarks: The Company has contribute only one meeting fee for the meeting 17/2004 The Shareholder’s resolution held on 2005 general meeting has assign remuneration for the Board of

Directors and audit committee including meeting fee and bonus for the year 2005 for the amount within 2,000,000 Baht

Attendance/Numberof Meeting for

Board of Direct

Attendance/Number of Meeting for

Audit Committee

Name Position

2004 2005 2005

1 Dr. Pisit Leeahtam* Chairman of the Board 1/17 6/6 -

2 Mr. Virah Mavichak * Chairman of Audit Committee 1/17 6/6 5/5

3 Assoc. Prof. Chawalee Pongpatirochna*

Audit Committee 1/17 6/6 5/5

4 Dr. Teeron Pongmakapat** Audit Committee 0/17 0/6 0/5

5 Mr.Chanitr Charnchainarong ** Audit Committee 0/17 5/6 5/5

6 Mr. Somchai Kulimakin Director 17/17 6/6 -

7 Mr. Siri Thirawattanawong Director 17/17 5/6 -

8 Mr. Bhija Jriyasetapong Director 17/17 5/6 -

9 Mr. Sumruay Tichachol Director 17/17 6/6 -

10 Mr. Aikachai Sirijuntanan Director 17/17 6/6 -

Meeting Fee ( )Name Position

2004 2005

1 Dr. Pisit Leeahtam* Chairman of the Board 50,000 300,000

2 Mr. Virah Mavichak * Chairman of the Audit Committee

20,000 220,000

3 Assoc. Prof. Chawalee Pongpatirochna*

Audit Committee 15,000 165,000

4 Dr. Teeron Pongmakapat ** Audit Committee - -

5 Mr.Chanitr Charnchainarong Audit Committee - 150,000

6 Mr. Somchai Kulimakin Director 20,000 120,000

7 Mr. Siri Thirawattanawong Director 15,000 75,000

8 Mr. Bhija Jriyasetapong Director 15,000 75,000

9 Mr. Sumruay Tichachol Director 15,000 90,000

10 Mr. Aikachai Sirijuntanan Director 15,000 90,000

Total 165,000 1,285,000

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(2) Remuneration for executive directors and management committee For the Fiscal year ended 31 December 2005, remuneration for executive directors and management committee total of six was Baht 23.6 million in form of salary and bonus.

Other forms of remuneration The company has established provident fund since 2000, the company’s contribution to the provident

fund for the management executives (The Management committee) totaled Baht 1.93 million in 2004 and Baht 2.88 million in 2005. The Company cars have been provided for the management committee. The company’s contribute common share for four independent directors and one management committee with the total of 550,000 shares as the followings;

1. Dr. Pisit Leeahtam 150,000 Shares 2. Mr. Virah Mavichak 100,000 Shares 3. Assoc. Prof. Chawalee Pongpatirochna 100,000 Shares 4. Mr.Chanitr Charnchainarong 100,000 Shares 5. Mrs. Pravishya Hansakul 100,000 Shares

33

Related transactions (UNIT: MILLION BAHT)

Related Company/person

Description of Relations

Description of Transactions

Size of 2004 transactions

Size of 2005 transactions

Necessaries and reasons of transactions

Integrity Plastics Co.,Ltd

Mr.Aikachai Sirichantanunt, the major shareholder and director of the GC company, was the major shareholder and director of the Integrity Plastics Company. However, he had transferred his shares of the Integrity Plastics Company and resigned from the director of that company on the 31st December 2004

Trade the instant petrochemical products, on the date of 31st December 2004 and 2005 has the sum of the debts at 1.19 and 0.53 million Baht respectively.

5.91 3.89 There were normal businesses and transactions of the GC Company with its customers. Therefore, the Auditor Committee found that they were normal businesses and transactions of GC company and they were in relation with the market prices.

Vector Solution Co.,Ltd

Ms.Patchamon Thirawattanawong, elder sister of Mr. Siri Thirawattanawong (major shareholder and director of GC Company), is the major shareholder and director of Vector Solution Company

Trade the instant computer products, on the date of 31st December 2004 and 2005 has the sum of the debts at 0.58 and 0.13 million Baht respectively.

12.7 0.30 There were normal businesses and transactions of the Integrity Plastics Company with its customers. Therefore, the Auditor Committee found that they were normal businesses and transactions of that company and they were in relation with the market prices.

RELATED TRANSACTIONS

34

Pay the commission of the selling of monitors to the Vector Solution Company

0.21 0.02 Her customers were introduced by the Vector Solution company. Therefore, the Audit Committee considered and found that those transactions were in relation with the contracts and reasonable.

Purchase the instant Computer products

0.26 0.05

New Modern Superpack Co.,Ltd.

Mr. Wichan Nanthananonchai, a 1 share holder, is an elder brother of Ms. Boonsri Kuleemakin (1 share holder) which is a wife of Mr.Somchai Kuleemakin s (major shareholder and director of the GC Company) and the major shareholder and director of New Modern Company

Trade the instant petrochemical products, on the date of 31st December 2004 and 2005 has the sum of the debts at 0.00 and (0.17) million Baht respectively.


Purchase the instant petrochemical products

7.34 0.00 According to the shortage of some GC s products which created high demand for GC s customers, GC Company had to purchase those products from New

35

Modern Superpack Company, then delivered to GC s customers. Consequently, the Auditor Committee found that they were normal businesses and transactions of GC company and they were in relation with the market prices.

21 Construction Co.,Ltd

Mr. Hook Tichachol, the elder brother of Mr. Sumruay Tichachol which is the major shareholder and director of the GC Company, is the major and director of 21 Construction Company.

Payment for the building and warehouse s construction

1.94 0.25 Due to the expansion of the GC company, the company had to expand the area of the warehouse and office. Then, when the GC company got the land for building the warehouse and office, the company had to find the contractor which was in charge of the construction sites and selected from auction. Therefore, the Audit Committee considered and found that those transactions were in relation with the

36

contracts and reasonable.

Brandage Co,.Ltd Mr.Pichai Sirichantanunt, elder brother of Mr.Aikachai Sirichantanunt which is the major and director of the GC Company, is a major shareholder and director of the Brandage Company.

Trade the instant computer products.


Advertisement fee 0.10 0.01 The GC Company advertised its computer products on the Brandage magazine which the readers are GC company s target groups. Therefore, the Auditor Committee found that they were in relation with the market prices.

Brandmaker Co.,Ltd

Mr.Pichai Sirichantanunt, elder brother of Mr.Aikachai Sirichantanunt which is the major and director of the GC Company, is a major

Seminar s fee 0.05 0.00 The GC s employees were sent in the marketing skills improvement of training. Therefore, the Auditor Committee found that

37

shareholder and director of the Brandmaker Company.

they were normal businesses and transactions of GC company and they were in relation with the market prices.

Taicoon-Brandage Holding Co.,Ltd.

Mr.Pichai Sirichantanunt, elder brother of Mr.Aikachai Sirichantanunt which is the major and director of the GC Company, is a major shareholder and director of the Taicoon-Brandage Holding Company.

Trade the instant computer products.


Seminar s fee 0.06 0.00 The GC s employees were sent in the marketing skills improvement of training. Therefore, the Auditor Committee found that they were normal businesses and transactions of GC company and they were in relation with the market prices.

38

Advertisement fee 0.00 0.11 The GC Company advertised its computer products on the Brandage magazine which the readers are GC company s target groups. Therefore, the Auditor Committee found that they were in relation with the market prices.

GC company s directors which are: 1. Mr. Somchai Kuleemakin 2. Mr. Sumruay Tichachol 3. Mr.Aikachai Sirichantanunt 4. Mr.Siri Thirawattanawong 5. Mr. Bhiya Jariyasethapong

Company s directors On the date of 31st December 2004 and 2005, all 5 directors were together being the guarantors of the loans from the Banks and financial institutes which were 949 and 1,341 million Baht respectively. The Guaranteed loans were such as an O/D account, promissory notes, and long term loan.

0.00 0.00 Practically, the Company s director which requested for the loans must guaranteed those loans for the debtors in respect to the Banks and financial institutes regulation. Even though the Company had been transformed to the Public company, however, all 5 GC company s director had to still be the company s guarantors for running the company s business without any charges to the company.

39

DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION

Analysis of Overall Performance

The distribution business of the plastic resins, plastic, and petrochemical related products need relatively high working capital. The key success factors of this business depend on the inventory management, the logistic systems that meet the clients’ needs in time, cost of capital, receivables management and sales revenue. Due to this business has low gross profit margin, to build up more sales revenue will result in good net profit.

Sales revenue

The Company had total sales revenue of Baht 3,258 million in 2005, increase Baht 641 million from last year or equivalent to 24%. The increase of sales revenue came from both sales volume and sales price. The main reason was the growth of the relevant industries such as packaging and automotive sectors, etc.

Another reason was the efficient inventory management policy and the logistic system to quickly deliver the goods to the clients and the skilled team that has the capability to provide the good advices to the clients, resulting in the increase of both clients’ satisfaction and sales revenue.

Moreover, the Company has also focused on the specialty products, which have high growth, better profit margin and less price sensitivity compared to the commodity products.

Financial Operating Results

In 2005, total cost of sales and operating expenses were Baht 3,196 million, or 25% increase from last year which was in line with the growth of sales revenue. Costs of goods sold increased from 94.93% to 94.99% was mainly due to the increase in product cost resulting from the rise in oil prices of which directly affected to petrochemical products as well as plastic resins.

GC incurred Baht 101 million in selling and administrative expenses, an increase of 23% from last year. Key factors contributing to this rise were the loss from exchange rate, the increase in personnel expenses due to both annual salary adjustments and the additional number of staff as per business expansion.

Interest expenses were Baht 25 million, or 25% higher than last year’s as the more increase in sales revenue, the more working capital required. Besides the higher average loan balance, short-term interest rates also rose significantly starting from the second half of the year.

As a result of the discussed factors, our net income rose to Baht 37 million in 2005 versus Baht 35 million in 2004 or equivalent to 6% increased.

Analysis of Financial Position (FY2005/2004)

Assets: As of 31 December 2005, GC recorded total assets of Baht 893 million, a year-on-year increase of Baht 39 million, due to the increase in accounts receivable reflected from sales revenue increased.

Liabilities : As of 31 December 2005, GC recorded total liabilities of Baht 596 million, a decrease of Baht 99 million from the previous year. This is caused by the decline of short-term loan in December due to the incoming fund from IPO proceed.

40

Shareholders’ Equity: As of 31 December 2005, the portion of shareholders’ equity amounted to Baht 297 million, an increase of Baht 137 million, or 86%, due to the good fund from IPO and a rise in net profit from operations in fiscal year 2005.

41

AUDIT COMMITTEE’S REPORT

To: The Shareholders

The Audit Committee of Global Connections Public Company, which was appointed by the resolution of the Board of Directors’ meeting, consists of three independent Directors as follows:

1. Mr. Virah Mavichak Chairman of Audit Committee

2. Assoc. Prof. Chawalee Pongpatirochna Audit Committee

3. Mr. Chanitr Charnchainarong Audit Committee

For the year of 2005, the Audit Committee had independently accomplished their assigned tasks with no limitations in gathering the Company’s information in any aspects. The Audit Committee had organized totally 6 meetings together with concerned management, of which three of them were joined by The External Auditor. The Main important issues can be summarized as follows:-

1. The Audit Committee had audited the quarterly financial statement and the financial statement for the year 2005 to confirm that The Company’s financial report was made in accordance with Generally Accepted Accounting Principles and the disclosure of information was sufficient, complete and reliable. Moreover, the Committee had intensively considered and discussed the audited report with the external auditor and internal auditors and provided The Company with valuable notices and suggestions.

2. The Audit Committee had considered the internal control system and the internal control forms which were prepared by Dharmniti Auditing Company to ensure with sound reasoning that the system is sufficient, suitable and effective. Due to the fact that at the early stage, The Company has not set up Internal Audit Unit, so Dharmniti Auditing Company was contracted as an outsource to set up The Company’s internal control system, develop internal audit manual which can monitor the occurrence of risk and The Company’s businesses operation and also provide the recommendations which may improve the internal audit efficiency including act as internal audit outsource for 4 months.

3. The Audit Committee had considered internal audit plan for the year 2005 which prepared by Dharmniti Auditing Company.

4. The Audit Committee has examined the company’s internal audit reports to ensure that all were in line with the audit plan. For more effective internal audit control and to avoid any possible risk that might happen, The Committee has suggested that follow up schemes should be set up to ensure all the significant issues recommended in the internal audit reports had been rectified.

5. The Audit Committee had considered the progression on follow up of the overdue Account Receivables.

6. The Audit Committee suggested the management to systematically document all the rules, regulations and guideline with respect to The Company’s businesses operation.

7. The Audit Committee had overseen to ensure that all rules and regulations are strictly enforced, and no significant abuse was founded.

8. The Audit Committee had reviewed The Company’s compliance to all legal aspects and regulations to SET, as well as other business laws in order to ensure the shareholders and all concerned parties of Company’s good corporate governance and transparency. The Committee are in the view that The Company had conducted its business consistently with all related laws and find no significant mistake. The Audit Committee also commented on the disclosure of related transactions between the Company and other related companies that those transactions were executed as normal business practice with reasonable market prices. These all are in the line with regulation set up by SET.

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The Committee has selected the authorized Auditors with fixed remunerations and proposed to the Board of

Directors for further requesting the Shareholders’ approval for appointing Ernst & Young Office Limited, also

recognized either of Khun Siraporn Ouaanunkun or Khun Suppachai Panyawattano, to be the Company’s Auditor

for another period of the fiscal year end on 31 December 2006.

(Mr.Vira Mavichak)

Chairman of Audit Committee

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AUDITOR’S REPORT AND FINANCIAL STATEMENT

GLOBAL CONNECTIONS PUBLIC COMPANY LIMITED (FORMERLY KNOWN AS GLOBAL CONNECTIONS COMPANY LIMITED )

REPORT AND FINANCIAL STATEMENTS 31 DECEMBER 2005 AND 2004

Report of Independent Auditor To The Board of Directors and Shareholders of Global Connections Public Company Limited (Formerly known as Global Connections Company Limited )

I have audited the balance sheets of Global Connections Pubic Company Limited as at 31 December 2005 and 2004, and the related statements of earnings, changes in shareholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company s management as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits.

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 statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Global Connections Public Company Limited as at 31 December 2005 and 2004, and the results of its operations and cash flows for the years then ended in accordance with generally accepted accounting principles.

Siraporn Ouaanunkun Certified Public Accountant (Thailand) No. 3844 Ernst & Young Office Limited Bangkok : 22 February 2006

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GLOBAL C ONNEC TIONS PUBLIC C OMPANY LIMITED(FORMERLY KNOWN AS "GLOBAL C ONNEC TIONS C OMPANY LIMITED")

BALANC E SHEETSAS AT 31 DEC EMBER 2005 AND 2004

(Unit : Baht)Note 2005 2004

ASSETSC URRENT ASSETS C ash and cash equivalents 10,548,284 7,308,524 Trade accounts receivable - net 466,709,142 331,586,737 Inventories - net 163,829,665 206,120,417 Other current assets 3,165,512 4,007,217 TOTAL C URRENT ASSETS 644,252,603 549,022,895 NON-C URRENT ASSETS Deposits with banks placed as collateral 80,200,000 129,200,000 Property, plant and equipm ent - net 160,628,654 174,996,958 Assets awaiting sale - net 7,660,000 - Other non-current assets 241,933 875,770 TOTAL NON-C URRENT ASSETS 248,730,587 305,072,728 TOTAL ASSETS 892,983,190 854,095,623 LIABILITIES AND SHAREHOLDERS' EQUITYC URRENT LIABILITIES Bank overdrafts and short-term loans from financial institutions 272,180,719 391,882,331 Trade accounts payable 195,532,067 151,224,064 C urrent portion of liabilities under finance lease and hire purchase agreem ents 4,205,605 5,108,548 C urrent portion of long-term loans 17,160,000 15,730,000 Other current liabilities Accrued expenses 3,145,538 2,939,222 C orporate incom e tax payable 7,739,890 6,613,296 Value added tax payable 3,266,592 32,196 W ithholding tax payable 1,338,043 10,580,128 Others 127,350 499,448 TOTAL C URRENT LIABILITIES 504,695,804 584,609,233 NON-C URRENT LIABILITIES Liabilities under finance lease and hire purchase agreem ents - net of current portion 3,979,156 5,574,122 Long-term loans - net of current portion 87,110,000 104,270,000 TOTAL NON-C URRENT LIABILITIES 91,089,156 109,844,122 TOTAL LIABILITIES 595,784,960 694,453,355 SHAREHOLDERS' EQUITY Share capital Registered, issued and fully paid 200,000,000 ordinary shares of Baht 1 each (31 Decem ber 2004 : 1,550,000 ordinary shares of Baht 100 each) 200,000,000 155,000,000 Share prem ium 56,034,035 - Retained earnings Appropriated - statutory reserve 6,250,000 4,410,000 Unappropriated 34,914,195 232,268 TOTAL SHAREHOLDERS' EQUITY 297,198,230 159,642,268 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 892,983,190 854,095,623

The accom panying notes are an integral part of the financial statem ents.

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GLOBAL C ONNEC TIONS PUBLIC C OMPANY LIMITED(FORMERLY KNOW N AS "GLOBAL C ONNEC TIONS C OMPANY LIMITED")

STATEMENTS OF EARNINGSFOR THE YEARS ENDED 31 DEC EMBER 2005 AND 2004

(Unit : Baht)Note 2005 2004

REVENUES Sales 3,257,581,176 2,616,671,019 Other incom e 14,233,567 14,189,011 TOTAL REVENUES 3,271,814,743 2,630,860,030 EXPENSES C ost of sales 3,094,502,043 2,484,093,630 Selling and adm inistrative expenses 99,308,518 82,012,813 Directors' rem uneration 2,000,000 180,000 TOTAL EXPENSES 3,195,810,561 2,566,286,443 EARNINGS BEFORE INTEREST EXPENSES AND C ORPORATE INC OME TAX 76,004,182 64,573,587 INTEREST EXPENSES (24,985,262) (17,064,273) C ORPORATE INC OME TAX (14,496,993) (12,847,431) NET EARNINGS FOR THE YEAR 36,521,927 34,661,883

BASIC EARNINGS PER SHARE Net earnings 0.23 0.34

W eighted average num ber of ordinary shares (shares) 159,652,877 100,751,366


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STATEMENTS OF C ASH FLOWSFOR THE YEARS ENDED 31 DEC EMBER 2005 AND 2004

(Unit : Baht)2005 2004

C ash flows from (used in) operating activities Net earnings 36,521,927 34,661,883 Adjustm ents to reconcile net earnings to net cash provided by (paid for) operating activities :- Depreciation 10,637,153 9,988,638 Unrealised exchange gain (11,856) (1,234,381) Bad debts and allowance for doubtful accounts (Reversal) 2,483,540 (56,578) Provision for dim inution in value of inventories (Reversal) (1,189,000) 3,000,000 Provision for obsolete inventories (Reversal) 627,000 (15,000,000) Loss on disposal and write-off of vehicles and equipm ent 145,607 371,973 Provision for im pairm ent loss on assets awaiting sale 1,237,203 - Deferred interest from liabilities under finance lease and hire purchase agreem ents am ortisation 520,864 634,523 Earnings from operating activities before changes in operatring assets and liabilities 50,972,438 32,366,058 Decrease (increase) in operating assets :- Trade accounts receivable (137,605,945) (41,290,440) Inventories 42,852,752 (71,339,902) Other current assets 841,705 (701,972) Other non-current assets 215,117 (95,750) Increase (decrease) in operating liabilities :- Trade accounts payable 44,319,859 21,098,862 Accrued expenses 206,316 (122,087) C orporate incom e tax payable 1,126,594 (1,600,233) Other current liabilities (6,379,787) 6,755,460 Net cash used in operating activities (3,450,951) (54,930,004) C ash flows from (used in) investing activities Decrease (increase) in deposits with banks placed as collateral 49,000,000 -45,633,915 Decrease in other long-term investm ent - 10,000,000 C ash paid for building and equipm ent (2,345,655) (24,744,443) Proceeds from disposal of vehicles and equipm ent 281,127 820,374 Net cash from (used in) investing activities 46,935,472 (59,557,984) C ash flows from (used in) financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions (119,701,612) 68,322,325 C ash paid for liabilities under finance lease and hire purchase agreem ents (5,847,184) (5,632,648) Increase (decrease) in long-term loan (15,730,000) 53,326,090 Proceeds from share capital increase 101,034,035 - Interim dividend paid - net of proceeds from share capital increase - (23,000,000) Net cash from (used in) financing activities (40,244,761) 93,015,767 Net increase (decrease) in cash and cash equivalents 3,239,760 (21,472,221) C ash and cash equivalents at beginning of year 7,308,524 28,780,745 C ash and cash equivalents at end of year 10,548,284 7,308,524

- - Supplem ental cash flows inform ation C ash paid during the year for :- Interest expenses 25,627,981 16,461,344 C orporate incom e tax 13,370,399 14,447,664 Non-cash transactions :- Vehicles purchased under finance lease/hire purchase agreem ents 2,828,411 3,653,069 Interim dividend paid returned to share capital increase - 55,000,000


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(Unit : Baht)Issued andfully paid up Appropriated -

Note ordinary shares Share prem ium statutory reserve Unappropriated Total

Balance as at 1 January 2004 100,000,000 - - 47,980,385 147,980,385Share capital increase 55,000,000 - - - 55,000,000 Transferred retained earnings to statutory reserve - - 4,410,000 (4,410,000) -Interim dividend paid - - - (78,000,000) (78,000,000) Net earnings for the year - - - 34,661,883 34,661,883 Balance as at 31 Decem ber 2004 155,000,000 - 4,410,000 232,268 159,642,268Share capital increase 45,000,000 56,034,035 - - 101,034,035Transferred retained earnings to statutory reserve - - 1,840,000 (1,840,000) -Net earnings for the year - - - 36,521,927 36,521,927 Balance as at 31 Decem ber 2005 200,000,000 56,034,035 6,250,000 34,914,195 297,198,230

- The accom panying notes are an integral part of the financial statem ents.

Retained earnings


STATEMENTS OF C HANGES IN SHAREHOLDERS' EQUITYFOR THE YEARS ENDED 31 DEC EMBER 2005 AND 2004

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GLOBAL CONNECTIONS PUBLIC COMPANY LIMITED (FORMERLY KNOWN AS GLOBAL CONNECTIONS COMPANY LIMITED )

NOTES TO FINANCIAL STATEMENTS 1. GENERAL INFORMATION

Global Connections Public Company Limited (hereinafter referred to as the Company ) was established as a limited company under Thai laws on 27 September 1994. On 1 March 2005, the Annual General Meeting of the Company s shareholders approved the change of the status of the Company to a public company under the Public Limited Companies Act and also approved the change of the Company s name from Global Connections Company Limited to Global Connections Public Company Limited . The Company registered the change of its status with the Ministry of Commerce on 17 March 2005.The Company operates its business in Thailand and its principal activity is the wholesale of plastic and plastic-related products. The Company s registered office is located at No. 13/1 Moo 2 King-Kaew Road, Rachateva, Bangplee, Samutprakarn.

2. SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547.

Significant accounting policies adopted by the Company are summarised below :-

2.1 Revenue recognition Sales of goods are recognised when products are delivered and title passes to customers. 2.2 Cash and cash equivalents

Cash and cash equivalents include cash on hand, all bank accounts and negotiable certificates of deposit with no more than 3 months remaining to maturity, including call notes receivable and term notes receivable maturing within 3 months or less and without commitments.

2.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for, based on an estimate of collection losses that may be incurred in collection of receivables. The estimate is based on collection experience and the current status of receivables outstanding at the balance sheet date.

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2.4 Inventories Inventories are valued at the lower of cost (weighted average method) or net realisable value. 2.5 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less depreciation and provision for impairment. Depreciation is calculated by reference to their costs on the straight-line basis over their estimated useful lives as follows :-

Buildings - 20, 30 years Office equipment - 3, 5 years Furniture and fixture - 5, 10 years Tools and equipment - 5 years Vehicles - 5 years

No depreciation is provided for land, land improvements and construction in progress. Depreciation is included in determining earnings.

The Company recognise impairment loss if events or changes in circumstances indicate the carrying value may not be recoverable.

2.6 Assets awaiting sale

Assets awaiting sale represent idle property, plant and equipment and are stated at the lower of net book value or net realisable value. Loss on impairment is included in determining earnings.

2.7 Borrowing costs Interest costs on borrowings incurred during the construction periods are capitlised as part of the cost of buildings. Capitalisation ceases when the buildings are ready for their intended use.

2.8 Assets under finance lease and hire purchase agreements The Company records vehicles under finance lease/hire purchase agreements as assets and liabilities in an amount equal to the fair value of the leased/hire purchase assets at the inception of the agreements. The present value of the minimum payments under the agreement is calculated using the interest rates stipulated in the agreement. Interest expenses are recorded to each period over the term of the agreements based on the outstanding balance of the liabilities under finance lease/hire purchase agreements during each period.

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2.9 Foreign currencies Foreign currency transactions incurred during the year are translated into Baht at the exchange rates ruling on the transaction dates. Assets and liabilities dominated in foreign currency outstanding on the balance sheets date are translated into Baht at the exchange rates ruling on the balance sheets date, with the exception of those covered by forward exchange contracts, which are translated at the contracted rates.

Exchange gain and loss are included in determining earnings. 2.10 Provident fund

The Company and its employees have jointly registered a provident fund scheme under the Provident Fund Act B.E. 2530. The Fund is contributed to by both the employees and the Company at the rate of 4 to 15 percent of the employee s basic salary based on their year of service. The fund will be paid to the employees upon termination in accordance with the rules of the Fund. The fund is a part of AIA Permpoon Registered Provident Fund which is managed by American International Assurance Company Limited.

2.11 Basic earnings per share Basic earnings per share is determined by dividing net earnings for the year by the weighted average number of ordinary shares in issue during the year, after adjusting the number of ordinary shares in proportion to the change in the par value of the ordinary shares from Baht 100 each to Baht 1 each as discussed in Note 11 to the financial statements as if the change in the number of shares had occurred since the beginning of the year. The previous year s reported earnings per share is also restated for comparative purposes.

2.12 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates of certain accounting transactions, affecting amounts reported in the financial statements and notes thereto. Subsequent actual results may differ from these estimates.

3. DEPOSITS WITH BANKS PLACED AS COLLATERAL As at 31 December 2005, the Company has pledged fixed deposits with banks totaling Baht 80.2 million (2004 : Baht 129.2 million) as collateral to secure bank guarantees issued on behalf of the Company and credit facilities obtained from financial institutions.

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4. TRADE ACCOUNTS RECEIVABLE An aging analysis of the trade accounts receivable as at 31 December 2005 and 2004 were as follows:-

(Unit : Baht) 2005 2004 Current receivables 316,797,698 180,207,877 Past due receivables Not exceeding 1 month 106,062,621 119,351,781 Over 1 month to 3 months 21,655,034 27,304,798 Over 3 months to 6 months 17,496,149 5,156,932 Over 6 months to 12 months 5,220,361 24,539 Over 12 months 2,477,279 540,810

Total trade accounts receivable 469,709,142 332,586,737

Less : Allowance for doubtful accounts (3,000,000) (1,000,000) Trade accounts receivable - net 466,709,142 331,586,737

5. INVENTORIES

(Unit : Baht) 2005 2004 Finished goods 163,456,953 200,701,397 Goods in transit 2,810,712 8,419,020 166,267,665 209,120,417 Less : Provision for diminution in value of inventories (1,811,000) (3,000,000) Provision for obsolete inventories (627,000) - Inventories - net 163,829,665 206,120,417

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6. PROPERTY, PLANT AND EQUIPMENT

(Unit : Baht)

Land and land improvements Buildings

Office equipment, furniture and

fixture Tools and equipment Vehicles

Construction in progress Total

At cost : 31 December 2004 54,465,280 103,617,739 12,279,993 2,987,294 23,829,463 7,800 197,187,569 Purchases / Transfers in - 346,585 1,078,391 2,750 4,179,631 388,785 5,996,142 Disposals / Transfers out (1,750,233) (10,389,740) (3,382,117) (295,454) (202,800) (396,585) (16,416,929) 31 December 2005 52,715,047 93,574,584 9,976,267 2,694,590 27,806,294 - 186,766,782 Accumulated depreciation : 31 December 2004 - 7,749,786 6,199,619 938,389 7,302,817 - 22,190,611 Depreciation for the year - 3,556,992 1,602,580 480,935 4,996,646 - 10,637,153 Transfers in/(out) - (3,299,676) (1,779,642) (139,482) - - (5,218,800) Disposals - - (1,307,651) (155,633) (7,552) - (1,470,836) 31 December 2005 - 8,007,102 4,714,906 1,124,209 12,291,911 - 26,138,128 Net book value : 31 December 2005 52,715,047 85,567,482 5,261,361 1,570,381 15,514,383 - 160,628,654

31 December 2004 54,465,280 95,867,953 6,080,374 2,048,905 16,526,646 7,800 174,996,958

Depreciation charge included in earnings statements for the year ended 31 December 2005 10,637,153

2004 9,988,638

As at 31 December 2005, the Company has vehicles acquired under finance lease and hire purchase agreements, with net book values amounting to approximately Baht 14.9 million. The ownership of these vehicles is to be transferred to the Company upon completion of payment. Moreover, certain assets of the Company with the gross carrying amount of Baht 1.5 million are the fully depreciated assets but are still in use.

The Company has mortgaged its land and the construction thereon, to secure credit facilities obtained from banks.

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7. ASSETS AWAITING SALE (Unit : Baht)

2005 2004 Idle property, plant and equipment (cost less accumulated

depreciation up to the last day of usage) 8,897,203 - Less : Provision for impairment (1,237,203) - Assets awaiting sale - net 7,660,000 -

During the current year, the Company ceased using certain property, plant and equipment located at its former office in its operations. As a result, the Company has presented these assets separately under the caption of assets awaiting sale in the balance sheet. They are stated at net value, after deducting provision for diminution in value set aside on the basis of the assets appraisal value, as appraised by an independent appraiser on 30 December 2005.

8. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS (Unit : Baht)

2005 2004 Bank overdrafts 10,862,202 34,610,334 Trust receipts - 62,572,475 Promissory notes 261,318,517 294,699,522 Total bank overdrafts and short-term loans from financial

institutions 272,180,719 391,882,331

As at 31 December 2005, the Company has bank overdrafts and short-term loans facilities with 7 financial institutions (2004 : 5 financial institutions) of totaling Baht 1,107.6 million (2004 : Baht 690.6 million). Such credit facilities have been secured by the pledge/mortgage of the Company s fixed deposits with banks, land and the construction thereon, and joint guarantees from the Company s directors. The short-term loan facilities agreement with one bank contains normal covenants such as that the debt (total liability less deposits under lien with banks) to equity ratio is not to exceed 4:1 at all times.

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9. LIABILITIES UNDER FINANCE LEASE AND HIRE PURCHASE AGREEMENTS Liabilities under finance lease and hire purchase agreements as at 31 December 2005 and 2004 of the Company are comprised of :-

(Unit : Baht) 2005 2004

Liabilities under finance lease and hire purchase agreements 8,812,717 11,389,901

Less : Deferred interest (627,956) (707,231) 8,184,761 10,682,670 Less : Current portion (4,205,605) (5,108,548) Liabilities under finance lease and hire purchase agreements -

net of current portion 3,979,156 5,574,122

10. LONG-TERM LOAN Long-term loan as at 31 December 2005 and 2004 consist of the following :-

(Unit : Baht) 2005 2004 Baht loan from a bank, carrying interest at a certain percentage per annum in 2004, MLR less a certain percentage per annum in 2005 and 2006, and MLR per annum in 2007 onwards, repayable in monthly installment of Baht 1.43 million as from February 2005 to January 2012 104,270,000 120,000,000

Total 104,270,000 120,000,000

Less : Current portion (17,160,000) (15,730,000) Long-term loan - net of current portion 87,110,000 104,270,000

As at 31 December 2005, the bank loan has been secured by the pledge/mortgage of the Company s fixed deposits with the bank, land and the construction thereon, and joint guarantees from the Company s directors.

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11. SHARE CAPITAL On 30 November 2004 and 17 December 2004, the Extraordinary General Meeting of the Company s shareholders approved the increase of the Company s registered capital by Baht 100 million (1 million ordinary shares of Baht 100 each) to a total of Baht 155 million (1.55 million ordinary shares of Baht 100 each), through the issue of 550,000 additional shares for offer to the existing shareholders at a price of Baht 100 per share. On 21 December 2004, the Company received the payment of all share capital increment from the shareholders and registered the increase of its registered capital with the Ministry of Commerce on 27 December 2004. On 1 March 2005, the Annual General Meeting of the Company s shareholders approved the change in the status of the Company to a public company and also approved the reduction of the par value of the ordinary shares from Baht 100 each to Baht 1 each. As a result, the Company s registered and paid-up share capital is Baht 155 million, comprising 155 million ordinary shares of Baht 1 each. The Annual General Meeting of the Company s shareholders also approved an increase in the Company s registered share capital from Baht 155 million (155 million ordinary shares of Baht 1 each) to Baht 200 million (200 million ordinary shares of Baht 1 each), through the issuance of 45 million additional ordinary shares of Baht 1 each. The Company registered the increase in its registered share capital and the change in the par value of its shares with the Ministry of Commerce on 17 March 2005. On 7 June 2005, the Extraordinary General Meeting of the Company s shareholders approved the 45 million new additional ordinary shares to be allotted as follows :-

- 1.1 million ordinary shares are to be offered to employees, directors and managements at a price of Baht 1.03 each

- 43.9 million ordinary shares are to be offered to the public On 14 June 2005, the Company received the payment of the additional shares offered to the employees, directors and managements, and registered the increase in its paid-up capital with the Ministry of Commerce on 28 June 2005. On 11 November 2005, the Board of Directors approved the sale of the additional shares offered to the public, at a price of Baht 2.34 per share. On 24 November 2005, the Company received the payment of this share capital increment. All expenses related to this share offering are presented as a deduction from the share premium. The Company registered the increase in its paid-up capital with the Ministry of Commerce on 28 November 2005.

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12. STATUTORY RESERVE According to the Public Limited Companies Act B.E.2535, the Company is required to set aside a statutory reserve at least five percent of its net profit for the year, after deducting accumulated deficit brought forward (if any), until such reserve reaches ten percent of the registered share capital. The statutory reserve could not be used for dividend payment.

13. DIVIDEND On 30 November 2004, the Extraordinary General Meeting of the Company s shareholders approved the payment of an interim dividend of Baht 78 per share, a total of Baht 78 million. This dividend was paid in December 2004.

14. NUMBER OF EMPLOYEES AND RELATED EXPENSES

2005 2004 Number of employees at the end of year (Persons) 85 75 Personnel expenses for the year (Thousand Baht) 45,386 41,856

15. DIRECTORS REMUNERATION Directors remuneration represents the benefits paid to directors, exclusive of salaries, bonus and related benefit

payable to directors who hold executive positions. 16. CORPORATE INCOME TAX

Corporate income tax for the year was calculated based on net earnings for the year after adding back non-deductible expenses and provisions and deducting the provisions which are regarded as tax-deductible expenses for tax computation purpose.

17. PROVIDENT FUND During the year 2005, approximately Baht 3.4 million has been contributed to the fund by the Company (2004 : Baht 2.4 million).

18. RELATED PARTY TRANSACTIONS During the years ended 31 December 2005 and 2004, the Company had significant business transactions with its related companies (related by way of having shareholders and authorised directors being members of the same family as that of the Company s directors). Such transactions, which were concluded on the terms and basis stated in the relevant agreements, or as agreed by the Company and those companies in the ordinary course of business of the Company, are summarised below:-

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(Unit : Million Baht) 2005 2004 Pricing policy

Transactions between the Company and related companies

Sales of finished goods 29.9 109.5 Market price Purchase of finished goods 0.1 7.6 Market price Construction of building and purchase of

equipment 0.6 1.9 Contract price

Service expenses 0.2 0.4 Market price

As at 31 December 2005 and 2004, the outstanding balances of the transactions are shown under the caption of trade accounts receivable and accrued expenses in the balance sheet. Details are as follows:- (Unit : Baht) 2005 2004

Trade accounts receivable - related com panies

Integrity Plastics Company Limited 532,809 1,185,079 Vector Tech Solution Company Limited 133,750 576,730 New Modern Super Pack Company Limited (168,525) - Total trade accounts receivable related companies 498,034 1,761,809

Accrued expenses - related com panies Vector Tech Solution Company Limited 191,016 23,968 Total accrued expenses - related companies 191,016 23,968

19. FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to both a financial assets of one entity and a financial liabilities or equity instrument of another entity. Financial risk management and policies The Company does not hold or issue derivative instruments for speculative or trading purposes.

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Interest rate risk The interest rate risk is the risk that future movements in market interest rates will affect the results of the Company s operations and its cash flows. The Company s exposure to interest rate risk relates primarily to its deposits with banks and loans from financial institution. The Company does not use derivative financial instruments to hedge such risk. (The details of loans are set out in Note 8 and 10 to the financial statements). Foreign currency risk The Company s exposure to foreign currency risk relates primarily to its trade accounts payable which is denominated in foreign currencies. The Company primarily utilise forward exchange contracts to hedge such financial liabilities, when they consider it appropriate. Forward exchange contracts outstanding on 31 December 2005 are summarised below:-

Foreign currency Forward exchange contract Forward rate (Baht per unit of foreign currency)

USD 1,211,980 40.825 - 41.410 As at 31 December 2005, the Company s foreign currency-denominated trade accounts payable amounting to approximately USD 0.2 million was unhedged.

Credit risk The Company is exposed to credit risk primarily with respect to trade accounts receivable. However, since the Company has a prudent credit policy and grants credit only to creditworthy customers which have a stable position and have had a long relationship with the Company, the Company does not anticipate material losses from its debt collection. Fair value Since the majority of financial assets and liabilities are short-term, and the interest rate of long-term loan vary in line with market rates, the management believes that the fair value of the Company s financial assets and liabilities does not materially differ from their carrying value.

20. FINANCIAL INFORMATION BY SEGMENT The operations of the Company involve two industry segments, the wholesale of plastic and plastic-related products and the wholesale of computer monitors to both domestic and export markets, but the main activity is the wholesale of plastic and plastic-related products to domestic markets (more than 98 percent of total sales). For this reason, financial information has not been presented by either industry segment or geographic area.

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21. BANK GUARANTEES As at 31 December 2005, there were outstanding bank guarantees issued on behalf of the Company of approximately Baht 92 million (2004 : Baht 102 million) in respect of certain performance bonds as required in the normal course of business of the Company.

22. COMMITMENTS As at 31 December 2005, the Company has the following commitments :-

22.1 A commitment under building rental agreement which the Company is to pay the rental fee amounting to approximately Baht 2.2 million in 2006.

22.2 Commitments under lease agreements for vehicles which the Company is to pay the rental fee amounting to approximately Baht 1.4 million from 2006 to 2008.

22.3 A commitment under trade credit insurance policy with an insurance company in which the Company is to pay the minimum insurance premium amounting to approximately Baht 2.8 million from 2006 to 2007.

22.4 Commitments under lease agreements for office equipment which the Company is to pay the rental fee amounting to approximately Baht 1.0 million from 2006 to 2008.

23. CORRECTION OF ERROR In September 2004, the Company performed stocktaking and found that some inventories were missing. This was because of error and incompleteness in the previous accounting systems. Although such difference should be classified as error in prior periods and the Company should retroactively adjust this transaction, in actual practice, such adjustment would take a certain period of time and the cost incurred would be very expensive. Therefore, the Company classified the difference as error found in the year 2004, adjusted the error and included this transaction as cost of sales amounting to approximately Baht 41.8 million in the statements of earnings for the third quarter of 2004 (the amount was calculated using the unit cost of September 2004 multiplied by the volumes of missing inventories). However, during the third quarter of 2004, the Company reversed the provision for obsolete inventories amounting to Baht 15 million, which was recorded in 2003, as cost of sales. Consequently, the net effect of the above transactions, which was included in cost of sales for the third quarter of 2004, totaled approximately Baht 26.8 million. In this regard, there was a significant increase in cost price in September 2004. If the Company used the unit cost during the early 2004 in the adjustment calculation, the net effect would decrease by approximately Baht 8.4 million. Therefore, without the cost price effect, the net effect of the above adjustment would be Baht 18.4 million.

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24. SUBSEQUENT EVENT On 22 February 2006, the Board of Directors passed a resolution to propose the payment of a dividend in respect of the 2005 earnings of Baht 0.14 per share, or a total of Baht 28 million. Such dividend will be paid and recorded after being approved by the Annual General Meeting of the Company s shareholders.

25. PRESENTATION The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543. Certain amounts in the financial statements for year ended 31 December 2004 have been reclassified to conform to the current year classifications, with no effect on previously net earnings or shareholders' equity.

26. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorised for issue by the Board of Directors on 22 February 2006.

Gc 05

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