TUF: Annual Report 2011

ANNUAL REPORT 2011thai union frozen products public company limited

The World Seafood Expert

THAI UNION FROZEN PRODUCTS PCL.Registration No. 0107537000891 (previously Bor.Mor.Jor. 336)

TYPE OF BUSINESSProcessor and exporter of frozen and canned seafood

HEAD OFFICE72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3481-6500 (Automatic 7 Lines) Fax: 66 (0) 3481-6886

BANGKOK OFFICE979/12 M Floor, S.M. Tower, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400Tel: 66 (0) 2298-0024, 2298-0537 - 41 Fax: 66 (0) 2298-0548, 2298-0550

Website: www.thaiuniongroup.com

Listed on the Stock Exchange of Thailand since November 22, 1994

AS OF DECEMBER 31, 2011Registered capital of Bt1,000,000,000 (At Bt1 par value)Paid-up capital of Bt956,329,407 (956,329,407 shares)

COMPANYPROFILE

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Contents

Message from Chairman

Message from President

Organization Chart

Board of Directors

Audit Committee and Sub-Committees

Management Team

5-Year Comparative Financial Statistics

2011 Sales Breakdown and Distribution

Corporate History and Development

MW Brands Holdings SAS

Nature of Business

Investments in Subsidiaries and Associated Companies

Sales Structure of TUF and Subsidiaries

Nature of Main Business

Related Business Groups

TUF Strengths

Financial Highlights

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CONTENTS

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Sustainable Development

Industry Outlook and Competition

Risk Factors and Other Related Factors for Investment Considerations

Report on the Practice of Good Corporate Governance

Appointment of Directors

Authority of Board of Directors and Audit Committee

Shareholding Structure And Management

Remuneration for Directors and Management

Connected Transactions of Listed Company

Report of Audit Committees

Financial Ratios

Explanation of Financial Ratios

References

Management Discussion and Analysis

Statement of the Board of Director’s Responsibilities for the Financial Statements

Report of Independent Auditor

Consolidated and the Company Only Financial Statements

Note to Consolidated Financial Statements

485056606474757779809092939495

104105106115

Mr. Kraisorn ChansiriChairman

MESSAGE FROMCHAIRMAN

�� !��"��that wreaked extensive havoc on many parts of ��#��$�� areas and with no exception to industrial zones inAyudhya and Pathum Thani provinces. The damages to these major economic areas led to a host of adverse impacts on the manufacturing sector where a slowdown becomes inevitable as aconsequence of raw material shortage.

As far as the frozen and canned seafood industry was concerned, the majority of processing plants and canneries are fortunately not located within ��"��%�$$��$��#�&�&��from any direct impact of the crisis and wascapable of running their operations without

interruptions. Thai Union Frozen Products (TUF)’s processing plants in Samutsakhon province lie in ��'��$��"��River. Our plant facilities and those of our nearby subsidiary were all unaffected thanks to relentless ��&��$$��$��&�� $��#� ��with great cooperation from the private sector ��&��"��major canals and rivers. These concerted efforts helped save the city area of Samutsakhon��&��$��*+��&��"��cause impacts on the daily life of some of ouremployees. We therefore launched some ad-hoc relief measures during and after the crisis to help them get back to a normal life. Besides, TUF formed teams of volunteers and assigned them to

5ANNUAL REPORT 2011

THAI UNION FROZEN PRODUCTS PCL.

assist those affected employees and the general public who were in need of a helping hand. ��#��and other food supplies to governmental and non-governmental agencies for disaster relief purposes in affected areas throughout the entire "��*

The overall Thai seafood export value for the year registered 11% year-on-year growth to Bt245,116 million. Among all export items under the seafood category, canned and processed seafood products were ranked the best performer with a robust year-on-year growth rate of 17% in value term to reach Bt152,050 million. Based on the annual �!��#��$��$��#��!��&��$��"��crisis and indeed delivered a satisfactory annual growth rate. With regards to the annual operating performance, �<=��&�>>?��which easily surpassed its target set earlier for the��*@��&��K� �� &��sales growth in both US dollar and Thai baht term by 43% and 38% respectively. This was consideredan exceptional achievement, setting a new corporateearning milestone since our last record-breaking ��$@�Q�QVV�� X*Z��K��#�� <=[��#� �� K��the USD1,000 million mark in 2004, followed by consecutive annual growth in the next 4 years, and eventually topped USD2,000 million in 2008. However,it took even less time (3 years) to add another USD 1,000 million of sales to attain USD3,232 million in 2011.According to our plan, we previously targeted to achieve annual sales of USD3,000 million within 2012.But our 2011 performance was considered a big leap, allowing us to attain the target one year ahead of our plan. At present, we have raised our 2013 target to USD4,000 million. We believe that TUFis well positioned to achieve this new sales target given our advantage as a truly global seafood player with an ability to source, produce and market our products across the globe, particularly thanks to the strength of our global tuna brands.

Throughout our entire corporate history, we have K�� $��#�#�growth with persistent and satisfactory returns to our shareholders. As one of our normal practices, ��#��!��

through issuing Thai baht-denominated debentures to local institutional investors. The debentures,collectively worth Bt6,750 million, are of 3-year, 5-year and 10-year maturity with corresponding coupon rates of 4.51%, 4.70% and 5.02%. The funds raised were used for prepaying some of our existing loans, which in turn helped reduce our total fundingcosts. Continuous sales growth, on the back of a �� #��that TUF should be able to bring its Debt-to-Equity (D/E) ratio down to 1:1 within 2013 while our currentD/E ratio is standing at 1.47 times as a directconsequence of the acquisition of Europe-based MW Brands in 2010.

In line with our core corporate strategy witha strong emphasis on continual growth, wehave been expanding through new promising investments, greater presence in new marketsand a larger product range to meet dynamic needs of customers and consumers across the globe. In addition to corporate growth, we have also been very keen on giving back to the society. During the past year, many of our ongoing CSR activities did contribute to the well-being of the society and the environment. Among theseprojects were “Restoring the balance of theCoastal Eco-system through Planting 1 million Mangrove Saplings Project”, “HometownCommunity Development Program”, “BiogasGeneration from Scraps and Wastes” andco-founding the International SeafoodSustainability Foundation (ISSF).

As the Chairman, I would like to take this opportunity to recognize the efforts, commitments, integrity and continual improvements made by ourmanagement team and all employees inour organization who produced satisfactoryoperating results. Their deep devotion, despite&��#�� #��has enabled us to achieve the sales target of USD3,000 million well before the original schedule for 2012. My thanks are also extended to our valued �� &�� #��who have given us their unwavering support all along. We are committed to attaining an even higher level of management excellence in the future in order to achieve our ambitious goals.

Mr. Thiraphong ChansiriPresident

MESSAGE FROMPRESIDENT

Global economies for the year 2011 wascharacterized by a host of persistent challenges carried forward from the year 2010 that exerted increasing economic pressure to many countries. Therefore, Thai packers also needed to monitor closely how these impacts affected their owncustomers in those markets during the year. To��K��[��#��"#�� #��the US and the European Union, have to date been encumbered by an unresolved issue ofpublic debt burdens. In the meantime, Japan,another world’s major economy, also sufferedfrom a catastrophic tsunami. Thailand, with seemingly ��!��!��&��"��which was the worst in decades. Being a critical manufacturing base for certain industries such

as automobile and electronics, the historic Thai "��&��K ��#��&��industrial sectors even in several other countries, in addition to Thai domestic industrial activities. The ��$��"�� $��#��was essentially the supply of raw materials, as demonstrably evident in the case of rice where damages were made to harvested crops and crop-producing areas.

Apart from these main factors shaping the national economic landscape during the year, fuel price, currency exchange rates and labor supply were other key hurdles that deserved Thai packers’continual close attention and actions whenever necessary. Therefore, with these ongoing challenges,

7ANNUAL REPORT 2011


we are putting even more efforts in our managing business in areas of strategy, organizationalmanagement, production and marketing in order to hold off these increasing outside adversities. Given the severity of these challenges that could likely last for a few years, we have put ourselves on a high alert for any potential negative development. We believe that these proactive measures should ��#��K ��#��K �competitiveness in the global marketplace.

In regard to our 2011 overall operating performance, ��$# %�� $MW Brands books into Thai Union Group. During the course of the year, MW Brands managed to deliver satisfactory results and achieved set goals in all quarters. Meanwhile, Tri-Union Frozen Products, Inc. (established through the merger of EmpressInternational Ltd. and Tri-Union Frozen Foods, LLC.) also reported a strong annual performance. With the operating results of our US and Europeansubsidiaries well on track, we managed to increase our total annual sales in US dollar term to USD3,232 million or Bt98,670 million in Thai baht term, which represented 43% and 38% year-on-year growth rates respectively. This achievement was one full year ahead of our original sales target of USD3,000 million set for 2012. More importantly, annual net �� K��@�\��>\�� representing 77% year-on-year growth. This new �� #�K� ��$��we have developed a robust business model supported by effective operational policies and �$��!��#��K��*��!�� # �� fruit of our employees’ dedication, diligence and commitment to their work. Our sales target for 2013 has now been raised to USD4,000 million while our longer term goal is USD8,000 million for 2020.These apparently ambitious goals demonstrate the long-term commitment from all our staff under Thai Union Group that they would make united efforts to achieve them.

In order to attain the annual sales target of USD8,000 million within the planned time frame, we have ��&� ��$� �� %��]�� development strategies, which should serve asa guidance for our future growth. These internally-developed strategies consist of the following 7 main pillars:

^ �� _�� &� ��^ `#� ��{|�$��_$��}#� ��$��$��

development^ @�� _��&� ��$#��

best practices^ ��&��_��&��&��#��&� ��^ ~�� !�� _��&� ��^ ��$�� _#��$��

to support growth development^ |#��K� ��_��&� ��$�#��K � business

Sharing the same view with many world-leading corporations, we place great emphasis onorganizational development that should getourselves ready for a dynamic business environment where cross-border competition becomesincreasingly complicated. This is also the keyrationale for our need to develop al corporate vision and a set of future goals that are clear and understood by our staff. This should enable us to remain competitive and strong amidst challengingbusiness conditions in the world marketplace. To achieve these goals, our management team needs to act swiftly according to our prescribed strategies.

Looking back, the milestones that we haveaccomplished over decades of operations are a ��#��"��$��demonstrated by our management team and all ��$$��*� �� #��K��#��$�� are the driving force behind our continuouslyoutstanding performance at TUF. As the president of TUF, I would like personally recognize thecontributions of our employees, whom I have always believed as one of powerful drivers behind our growth. Nevertheless, our sustainable growth also cannot be made possible without unwaveringsupport from shareholders, business partners, �� #��&�� continue to uphold our management standards and move forward to achieve continual andsustainable growth for TUF in the future.

ORGANIZATIONCHARTTotal Workforce as of December 31, 2011: Salaried Employee: Daily Employee:

12,074 Staffs1,344 Staffs

10,730 Staffs

Nomination Committee

Remuneration Committee

BOARD OF DIRECTORS

PRESIDENT / CEO

Audit Committee

Audit Unit

Risk Management Committee

FISHPRODUCT LINES

Managing Director

Deputy GeneralManager Finance

General ManagerAudit Unit

SHRIMPPRODUCT LINES

Managing Director

General Manager

DeputyGeneral Manager

CorporateAccount Manager

General Manager

DeputyGeneral Manager

Company Secretary

BOARD OF DIRECTORS

Social Positions^ ��$�$��&��@�� Thai-Chinese Merchant Club^ ��$��$

Thailand^ ��%��=��

Association^ +��Z�&�� K� ��$��

No. of Shares Held: 122,282,016 shares*

* Shareholders of TUF that included spouse and children as of 31 December 2011

Mr. Kraisorn Chansiri ChairmanAge 77

Education^ +��$��

in Business Adminstration, Mae Fah Luang University

^ �� $��]��K�the Thai Institute of Directors Association

(RCP 15/2007)^ �� Z��

Program 12 (March – July 2011)

Other Positions^ ��<��#$��#��*�Z��*^ ��|��=��*�Z��*^ ��|��#��Z*^ �!��#��&��|�� Z*^ �!��#��&��<��*�Z��*^ ��%<��|��$��ZZ�*^ ��%<��=��]��#��*^ ��<��|��$��*�Z��*^ ��<��=�� *�Z��*

10 ANNUAL REPORT 2011

Mr. Chuan Tangchansiri Executive DirectorAge 67

Education^ ��]��K�

the Thai Institute of Directors Association (DAP 86/2010)

Other Positions^ �!��#��&��<��#$��#��

Co., Ltd.^ ��|�� Z*^ ��%��*�Z��*^ ��<��|��$��*�Z��*^ ��<��=�� *�Z��*^ ��<��*�Z��*^ ��<��&��+� ��

(Investment in MW Brands Holdings SAS)



Mr. Cheng Niruttinanon Executive DirectorAge 70

Education^ �� |�� $|��#�

People’s Republic of China

Other Positions^ ��%��*�Z��*^ ��Z#��<��=��*�Z��*^ �!��#��&��

Thai Union Manufacturing Co., Ltd.^ ��<��=�� *�Z��*^ ��%<��|��$��ZZ�*^ ��#�$�� =��*�Z��*^ ��#��=��*�Z��*^ ��<*|*��#��ZZ�*^ ��@��+� ��|�|



11ANNUAL REPORT 2011

Social Positions^ ��Z��^ ��&��$�� &�

Investment (MAI)^ ��&��|��#��^ ��#��

(TMA)^ @��$��#��$|��



Mr. Thiraphong Chansiri PresidentAge 47

Education^ @�� [�� Assumption University^ ��$@#��

(Management), University of San Francisco, USA^ ��]��K�

the Thai Institute of Directors Association (DCP 10/2001)

Other Positions^ ��<��|��$��*�Z��*^ ��@��+� ��|�|^ ��<�� *^ ��<��*�Z��*^ ��%+� ��*�Z��*^ �!��#��&�� Thai Union Manufacturing Co., Ltd.^ �!��#��&��|�� Z*^ ��%��*�Z��*^ ��<��=�� *�Z��*^ ��<��+��*�Z��*^ ��@�]��*�Z��*^ ��%<��|��$��ZZ�*^ ��%<��=��]��#��*^ ��Lucky Union Foods Co., Ltd.^ ��#�$�� =��*�Z��*^ Director, Yueh Chyang Canned Food Co., Ltd.^ ��=�� *�Z��*^ ��|��#��Z*^ ��<*|*��#��ZZ�*^ ��<��&��+� ��

(Investment in MW Brands Holding SAS)


Mr. Yasuo Goto DirectorAge 63

Education^ @�� [��<��&��

Experience^ ��{��$�!��#��&�~$�� Hagoromo Foods Corporation ^ ��+��=��^ �� Hogoromo Foods Corporation

No. of Shares Held: - *

Mr. Rittirong Boonmechote Managing Director (Shrimp Product Lines)Age 50

Education^ @�� [��@��<��&��^ ��]��K�

the Thai Institute of Director Association (DCP 84/2010)^ �Z��!��#��&��&� �� (EDP 2/2009) by Thai Listed Companies Association

Other Positions^ ��<��=�� *�Z��*^ ��`#� ��|��*�Z��*^ ��<��+��*�Z��*^ ��<��|��$��*�Z��*^ ��%<��=��]��#��*

Social Position^ ��=��]��=��^ ��@��<��&�� #��

Association




Mr. Kakiuchi Takehiko DirectorAge 57

Education ^ @�� [��<��&��

Experience ^ |��=��$

Mitsubishi Corporation


Mr. Chan Tin King �� Age 44

Education ^ @�� [�� $��|��<��&��

USA^ ��]��K�

the Thai Institute of Directors Association (DCP 47/2004)

Other Positions^ �!��#��&�� Biz Dimension Co., Ltd.^ �!��#��&��<��#$��#��

Co., Ltd.^ �!��#��&��|�� Z*^ ��%+� ��*�Z��*^ ��%<��|��$��ZZ�*^ ��%<��=��]��#��*^ ��<��+��*�Z��*^ ��#�$�� =��*�Z��*^ ��#��=��*�Z��*^ ��<��&��+� ��

(Investment in MW Brands Holdings SAS)^ ��@��+� ��|�|




Mr. Chan Shue Chung Executive DirectorAge 37

Education^ @�� [��~��|��<��&��

USA^ ��$@#��@��

University^ ��]��K�

the Thai Institute of Directors Association (DCP 10/2002) ^ �Z��!��#��&��&� �� (EDP 1/2009) by Thai Listed Companies Association

Other Positions^ ��<��=�� *�Z��*^ ��<��+��*�Z��*



Mr. Ravinder Singh Grewal Sarbjit SDirectorAge 43

Education^ @�� [�� University of New South Wales, Australia^ ��#K ��#��#�� |��

Other Positions^ �� +� ��#�� ^ ��|��%Z�+�� ^ � ��|��#��Z��*^ � ��~��Z��*^ ��@��+� ��|�|^ ��|��~� $� �Z��@��#��



Mr. Sakdi Kiewkarnkha Independent DirectorAge 77

Education^ @�� [��#��

and Law), Thammasat University^ ��]��K�

the Thai Institute of Directors Association (DCP 13/2001)^ �� $��]��K�

the Thai Institute of Directors Association (RCP 4/2001)^ �� $��

organized by the Thai Institute of Directors Association (RCC 9/2009)

^ �!��#��&��|��$��<��&��{University of Singapore

^ |��!��#��&��|��#��Institute of Business Administration of

Chulalongkorn University

Experience^ �!��#��&��|��

Commercial Bank PCL.^ �!��#��&��@�� Z�$�

Insurance Co., Ltd.^ ��{�#��

Member, Dusit Thani PCL.^ ��&��!��#��&�@��@��

Metropolitan Bank PCL.^ ��$�#��@�� #K

Finance PCL.^ ��[��

�� #��=�#��


Pol.Maj.Gen. Pracha Anucrokdilok Independent DirectorAge 75

Education^ @�� [��Z��

University ^ � ��$��#K ��$��^ ��]��K�


Experience^ ��`#��&��^ ��#��@#��#^ ��#��

No. of Shares Held: 6,310 shares*



Mr. Kiti Pilunthanadiloke Independent DirectorAge 73

Education^ @�� [��Z��

University ^ @��Z��^ ��]��K�


Experience ^ Z��Z�� #�� ^ |�� #K ��#��~$��$��

Attorney General


Mr. Kirati AssakulIndependent DirectorAge 54

Education^ @�� [��

~��`#��[�<��&��^ ��[��

University of Southern California^ ��]��K�

the Thai Institute of Directors Association (DCP 27/2003)^ �� $��

organized by the Thai Institute of Directors Association (RCC 5/2007)

Other Positions^ ��$��@��~�� Z*^ ��~��Z�$��#��*�Z��*

No. of Shares Held: 21,000 shares*



Other Positions^ ��Z*^ ��$�#��

Committee, Better World Green PCL.^ ��$�#��

Committee, IFS Capital (Thailand) PCL. ^ �!��#��&��

Securities PCL.^ ��$�#��

Eastern Printing PCL.^ ��#��

Committee, Chairman of the Nominating-Committee and Remuneration Committee Member, Property Prefect PCL.

^ ��#��@��University


Dr. Thamnoon Ananthothai Independent DirectorAge 55

Education^ @�� [��#��{

Management), Eckerd College USA^ ��[��*@*�� The University of Sarasota Florida USA^ �*�*�� Walden University USA^ �*�*��

Council for Accountancy USA^ �#��]��K� the Thai Institute of Directors Association (ACP 10/2005)^ ��]��K�

the Thai Institute of Directors Association (DAP 48/2005) ^ ��]��K�

the Thai Institute of Directors Association (DCP 70/2006) ^ �� $��]��K�

the Thai Institute of Directors Association (RCP 14/2006)^ <��=#�� $=��

Statement organized by the Thai Institute of Directors Association (UFS 7/2007)


Mr. SakdiKiewkarnkhaChairman of Audit Committee

Mr. KitiPilunthanadilokeAudit Committee

AUDIT COMMITTEE

SUB-COMMITTEES;

Pol.Maj.Gen. Pracha AnucrokdilokAudit Committee

The Nomination Committee

The Remuneration Committee

The Risk Management Committee

Dr. Thamnoon Ananthothai

��*|��

��*��

��*��#

��*�� #��

��*��

Dr. Thamnoon Ananthotha

��*|��

Pol.Maj.Gen. Pracha Anucrokdilok

Mr. Thiraphong Chansiri

��*��

Chairman of the Nomination Committee

Member of the Nomination Committee

Member of the Nomination Committee

Chairman of the Remuneration Committee

Member of the Remuneration Committee

Member of the Remuneration Committee

Chairman of the Risk Management Committee

Member of the Risk Management Committee




Thai Union Frozen Products PCL.

AUDIT COMMITTEEAND SUB-COMMITTEES


Mr. Suthidej AmornkasemwongGeneral Manager – Fish Product Lines

Experience ^ ��=��#��Z��


Mr. Preerasak BoonmechoteGeneral Manager – Shrimp Product Lines

Experience^ �� |��#��Z��


Ms. Sureenard SukhawanchaiGeneral Manager Audit Unit

Experience ^ ��$�� #��#��#��*�Z��*

^ ��$=��#��#��*�Z��*

Mr. Yongyut Setthawiwat Deputy General Manager Finance

Experience^ ��#�� Z*

^ ��#��+#�� # ��Z��*

Mr. Niti TrakpiboonCorporate Accounting Manager

Experience^ ��$��

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MANAGEMENTTEAM



FINANCIALSTATISTICS

5-Year Comparative

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TOTAL REVENUES (MILLION BAHT)

TOTAL ASSETS (MILLION BAHT)

TOTAL LIABILITIES TO EQUITY (TIMES)

NET PROFIT (MILLION BAHT)

BOOK VALUE PER SHARE (BAHT)

RETURN ON AVERAGE EQUITY (%)


|�Z�|@��~��AND DISTRIBUTION

2011

2011 SALES BREAKDOWN

2011 SALES DISTRIBUTION

TUNAPRODUCTS

USA

FROZENSHRIMP

EUROPE

CANNEDPETFOOD

JAPAN

CANNEDSEAFOOD

DOMESTICSALES

AFRICA OCEANIA MIDDLEEAST

CANADA SOUTHAMERICA

ASIA(NON-JAPAN)

SHRIMPFEED

SALMONDOMESTICPRODUCTS

FROZENCEPHALOPOD

CANNEDSARDINE AND

MACKEREL



CORPORATE HISTORYAND��Z~��

TUF’s long history of frozen seafood processing and export started in 1988 with Bt25-million initial capital. Later in 1992, we embarked on a joint venture with Mitsubishi Corporation and Hagoromo Foods Corporation, both of which are our Japanese business alliances that have concurrently taken dual roles as our authorized product distributors as well as our valued customers. Their efforts have played critical roles in the development of our products, enabling us to reach high industry standards and compete in the international marketplace. In 1994, we became a publicly traded company on the Stock Exchange of Thailand and ever since we have continually increased our share capital. Today, our registered capital amounts to Bt1,000,000,000 at Bt1 par value, with paid-up capital of Bt956,329,407 or 956,329,407 shares.

Through the years since our inception, we have operated our business under prudential �� &��$��operations possible. This has been further strengthened by our expertise acquired through decades of hands-on industry experience and visionary executive members. These factors in combination have yielded our business success, �#�� #��*

Vision

We strive to be the “Chef of the World” creating and providing high quality and innovative cuisine ��$# ��#��#��#��stakeholders’ ever evolving demands.

Mission

^ �� $��&��in people and creating opportunities for �� "�#��&��our people with a better quality of life.

^ ��#��&��$��%}#� ��$��delicious and convenient food products and simultaneously as a fair and responsible partner for all of our stakeholders with a commitment to building long-term mutually successful relationships.

^ � �K� ��K��advocate for the seafood industry both in Thailand and among the world business communities.

^ ��&�� corporate citizen with long-term commitment to protect the environment and our Earth’s resources.


Development within 2011 1. The Company issued debentures worth

Bt6,750 million to prepay part of its existing loans and to reduce funding cost. The issued debentures are of 3-year, 5-year and 10-year maturity with respective coupon rates of 4.51%, 4.70% and 5.02%. The series of bonds, assigned A+ rating from TRIS Rating, were successfully placed to a group of institutional and high net worth investors.

2. The Company sought to acquire more shares of PT Juifa International Foods Co., Ltd., one of its subsidiaries and a leading Indonesia-based canned tuna processor and exporter, from 76.50% to 88.78%. The Company’s Board of Directors has already given its approval to the plan since November 7, 2011 and implementation is currently in process.

3. The Company’s Board of Directors’ Meeting, held on December 21, 2011, approved a resolution for the Company to make a voluntary tender offer for all shares of Pakfood Public Company Limited (PPC or Pakfood). The Share Sale and Purchase Agreement

(SPA) was signed by the Company and PPC’s major shareholders on the same day. The acquisition will be executed when all conditions precedent stated in the SPA are $# ��*��$$��equal to the net book value per share of ��#��[�� statements for the year 2011 ended December 31, 2011.

PPC operates as a leading Thai processor, exporter and distributor of seafood products, ready meal ��%��$��#��K�� frozen. PPC has issued and paid-up share capital of Bt300,000,000 comprising 30,000,000 issued and paid-up ordinary shares at par value of Bt10 per share (as of September 30, 2011).

The business alliance forged by both companies �� &��#��#�#� �K�� including, among others, raw material sourcing and inventory management, manufacturing capability management and market coverage. The new alliance will therefore offer great potential to increase their respective revenues in the domestic and international markets on continued basis.



MW BRANDSHOLDINGS SAS

In addition, MW Brands owns the following four manufacturing facilities in strategic locations with convenient access to sources of raw materials, thus providing it with superior cost control advantages, namely:

1. The processing plant of Ets Paul Paulet in France; for value-added seafood products, such as fully-processed ready meals and

seafood spread products2. The processing plant of European Seafood Investment Portugal, Lda. in Portugal; for sardine and mackerel products3. The processing plant of Pioneer Food Company in Ghana; for canned tuna and tuna loin varieties4. The processing plant of Indian Ocean Tuna Ltd.

in Seychelles; for canned tuna products

JOHN WEST

��currently the dominant market player in canned seafood sector in three major European markets; the <�� market share of 29%, 70% and 34%, respectively.Underpinned by the brand’s long commercial history,John West today has strong product offerings, rangingdiversely from tuna, salmon, sardine to mackerel, other seafood choices and to fully-processedvalue-added meal and snack products. In its most recent business milestone, John West’s logo has been changed as part of its rebranding process.

PETIT NAVIRE

Launched in 1932, Petit Navire is currently the market-leading canned seafood brand in France with tuna, sardine, mackerel and value-added varieties as its core products.

In 2011, the total market value of canned seafood sector in France amounted to EUR825 million(as of December 2011). Petit Navire and Hyacinthe Parmentier collectively carved as much as 28%

Business Strengths

Following an integration of competitive advantages between TUF and MW Brands, the synergistic K�� <=�$# ��$��processor and distributor with the capability of global raw material procurement, manufacturing and competitiveness, as summarized below:

^ ��$$��&��#��%��"��and raw material procurement on the back of strategically located manufacturing bases in Ghana and Seychelles, one of the world’s largest �#��*

^ @��}#��X�#��%�� &��#��%��K� ��

performance as well as facilitate greater access to real-time in-depth information on the trend of raw material prices and availability.



MW Brands is a major fully integrated processor and distributor of canned seafood products with a strong market presence in Europe. The extensive product range of MW Brands consists of tuna, salmon, sardine, mackerel, value-added tuna and other seafood-based products, which are marketed under the following trademarks:

HYACINTHE PARMENTIER

Unveiled in 1883, the core product under HyacintheParmentier trademark is sardine. The brand currentlyenjoys a dominant market position in the French market.

market share, thereby making them category leader in the French market.

MAREBLU

Unveiled in 1960 in Italy, the core product range under Mareblu trademark covers tuna, sardine and mackerel. Mareblu is currently the third largest player in the Italian canned seafood sector with a 6% share out of the total canned seafood market value of EUR982 million (as of December 2011).

^ ��$$��&��#��$�� an objective to achieve maximum productivity

and become a leaner manufacturing chain.^ ��{��$$��&��&� #�%��

products, such as tuna oil and pet food.^ ��$$�!��&� ��_��@��[

manufacturing bases in African, Caribbean ��#�� !��of import tariffs on canned seafood products bound for the European Union, compared with the normal import duty of as high as 24% being imposed on Thai imports.

Market Strengths

^ ��@��[�� in the seafood sector in Europe (the world’s largest canned seafood consuming region) will ��<=��K ��$��#��

presence and expanding its existing European market base.

^ �<=�� K��K ��&��K� ��sales distribution between its main markets, namely the U.S., Europe and Asia.

Brand Strengths

^ �<=[��K�� lifted to 52% whilst private label sales are

accordingly lowered to 48%.^ � ��#��@�� established and highly recognized by European consumers. These market-dominant trademarks are John West, Petit Navire, Hyacinthe Parmentier and Mareblu.

26


NATURE OFBUSINESS

Production and Export of Frozen and Canned Food Products

Production and Distribution of Packaging Products

Food Business in Domestic Market

Production and Distribution of Animal Feeds and Agriculture Products

GROUP 1

GROUP 2

GROUP 3

GROUP 4

Thai Union Manufacturing Co., Ltd.

Songkla Canning PCL.

Thai Union Seafood Co., Ltd.

Thai Union Feedmill Co., Ltd.

� Thai Quality Shrimp Co., Ltd.

� Thai Union Hatchery Co., Ltd.

��

Thai Union Graphic Co., Ltd.

T-Holding Co., Ltd.

90.08%

90.44%

51.00%

51.00%

95.00%***

99.99%***

90.50%*

74.00%

90.00%



27


Overseas Investments

Associated Companies

GROUP 5

Thai Union International, Inc.

� Tri-Union Seafoods, LLC. (Chicken of the Sea International)

� Tri-Union Frozen Products, Inc.

(Empress International Ltd. and Tri-Union Frozen Foods, LLC were merged)

� U.S. Pet Nutrition, LLC

- Canadian Pet Nutrition, ULC

Thai Union Investment Holding

� MW Brands Holdings SAS

PT Juifa International Foods Co., Ltd.

Yueh Chyang Canned Food Co., Ltd.

Lucky Union Foods Co., Ltd.

Biz Dimension Co., Ltd.

Avanti Feeds Limited

TN Fine Chemicals Co., Ltd.

Avanti Thai Aqua Feeds Private Ltd.

Moresby International Holdings, Inc.

100.00%

100.00%

82.00%

99.00%

100.00%

100.00%

100.00%

76.50%

51.00%*

25.00%

20.00%

14.99%

48.97%**

50.00%

33.33%**

* Invested by Songkla Canning PCL.** Invested by Thai Union Manufacturing Co., Ltd.*** Invested by Thai Union Feedmill Co., Ltd.


TQS TUI

ASSOCIATEDCOMPANIES

Investments in Subsidiaries and

CAPN TUIH YCC

ATA MIH



��!

Tel:Fax:

Factory:

Tel:Fax:

Type of Business:

Registered Capital:Date of Investment:

Type/% Holding/No. of Shares:

��!

Tel:Fax:

Factory:

Tel:Fax:

Type of Business:Registered Capital:Date of Investment:


��!

Tel:Fax:

Factory:

Tel:Fax:



979/13-16 M Floor, S.M. Tower, Phaholyothin Road, Samsennai, Phayathai, Bangkok 1040066 (0) 2298-0025, 298-0421 - 3266 (0) 2298-0027 - 2830/2 Moo 8, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon,Samutsakhon 7400066 (0) 3441-2210, 3481-6441 - 466 (0) 3442-5459Processor and exporter of canned tunaand petfood@�Q��@�� #�March 1994(Additional investment in June 1999)Common share 90.08% or 27,025,360 shares

979/9-10 12th Floor, S.M. Tower, Phaholyothin Road, Samsennai, Phayathai, Bangkok 1040066 (0) 2298-0029 66 (0) 2298-0442 - 3QQQ��'��&��'��K��&��Amphoe Mueang Songkhla, Songkhla 9010066 (0) 7433-4005 - 8 66 (0) 7433-4009Processor and exporter of canned seafood@�Q��@�� #�October 1995(Additional investment in March 1999)Common share 90.44% or 32,556,819 shares

979/8 12th Floor, S.M. Tower, Phaholyothin Road, Samsennai, Phayathai, Bangkok 1040066 (0) 2298-002466 (0) 2298-055077 Moo 5, Songkhla-Ranot Road, Tambon Watkanun, Amphoe Singhanakhon,Songkhla 9033066 (0) 7448-3482 - 766 (0) 7448-3480Processor and exporter of frozen shrimp@�V��@�� #�December 1996 (Additional investmentin March 2005 and October 2008)Common share 51.00% or 20,400,000 shares

THAI UNION MANUFACTURING CO., LTD. (TUM)

|~��Z��Z*�|��

THAI UNION SEAFOOD CO., LTD. (TUS)

��!

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Type of Business:



��!

Tel:Fax:

Type of Business:



Website:

��!

Tel:Fax:

Factory:

Tel:Fax:



Website:

38/70 Moo 8, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon,Samutsakhon 7400066 (0) 3442-3401 - 666 (0) 3442-1493Manufacturer and distributor of steel and aluminum food packaging products@��@�V�� #�December 1993Common share 90.50% or 181 shares (Invested by Songkla Canning PCL.)

255 Smaedam Road, Smaedam,Bangkhunthian, Bangkok 1015066 (0) 2415-5808 - 9, 2895-5865 - 666 (0) 2415-4371One-stop-service offset printing housespecialized in standard high-quality printouts @�V��@�� #�July 1995 (Additional investment in May 2001)Common share 74.00% or 2,960,000 shares

http://www.thaiuniongraphic.com

�X��K�� Amphoe Mueang Samutsakhon,Samutsakhon 7400066 (0) 3441-7222 66 (0) 3441-7255, 3488-5125103/1 Moo 2, Songkhla-Ranot Road,Tambon Pak-Trae, Amphoe Ranot, Songkhla 9014066 (0) 7439-6933 - 7 66 (0) 7439-6938Processor and exporter of animal feeds@�\��@�� #�June 2000 (Additional investment in May 2001, October 2006 and August 2010)Common share 51.00% or 25,500,000 shares

http://www.thaiunionfeedmill.com

ASIAN-PACIFIC CAN CO., LTD. (APC)

THAI UNION GRAPHIC CO., LTD. (TUG)

THAI UNION FEEDMILL CO., LTD. (TFM)

31

TQS TUI

ANNUAL REPORT 2011


��!

Tel:Fax:

Type of Business:



��!

Tel:Fax:

Factory:

Tel:Fax:

Type of Business:



��!

Tel:Fax:

Type of Business:



Website:

�X��K�� Amphoe Mueang Samutsakhon,Samutsakhon 7400066 (0) 3441-722266 (0) 3441-7255Producer and distributor of nauplii andpostlarvae shrimps. Research anddevelopment of new shrimp breeds.@�V��@�� #�July 2004(The capital decrease in December 2007)Common share 95.00% or 379,995 shares(Invested by Thai Union Feedmill Co., Ltd.)

�X��K�� Amphoe Mueang Samutsakorn, Samutsakhon 7400066 (0) 3441-722266 (0) 3441-7255V��V��K�� Amphoe Takua Pa, Phangnga 82140 66 (0) 7658-4000 – 2766 (0) 7658-4028 – 9 `#� ��%��K��&� ��produce and distribute high-quality naupliiand postlarvae to farmers@�V��@�� #�April 2006 (Additional investment inNovember 2007 and April 2011)Common share 99.99% or 29,999,974 shares (Invested by Thai Union Feedmill Co., Ltd.)

��'��@��K��@��K��Bangkok 1015066 (0) 2898-8200 66 (0) 2895-3001 Distributor of “Fisho”,“Sealect” and “Bellotta” product lines@�>��@�� #�November 1996Common share 90.00% or 6,300,000 shares

��_��*��*��

�+��`<�Z��|+��~*�Z��*��`|�

THAI UNION HATCHERY CO., LTD. (TUH)

T-HOLDING CO., LTD. (THD)

��!

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��!

Tel:Fax:

Type of Business:

Equity:Date of Investment:


Website:

"��!

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��!

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Type of Business:

Registered Capital:


Sorrento South Corporate Center 9330 Scranton Road, Suite 500, San Diego, California 92121, USA (858) 558-9662 (858) 597-4566 A holding company for investment in USA<|��<|�� #�April 1996Common share 100.00% or 10,000,000 shares

Sorrento South Corporate Center9330 Scranton Road, Suite 500, San Diego, California 92121, USA(858) 558-9662 (858) 597-4566 Processor and distributor of canned seafood under “Chicken of the Sea” brandUSD62,390,422 July 1997(Additional investment in January 2001) 100.00%(Invested by Thai Union International, Inc.) (No share issued)http://www.chickenofthesea.com

222 N. Sepulveda Blvd, Suite 1550,El Segundo CA 90245 USA(866) 572-0996(310) 469-70375 Dakota Drive, Suite 303, Lake Success,NY 11042 USA(516) 740-4100(516) 621-0199Importer and distributor of frozenseafood productsCommon share 5,800 shares at USD0.001�� #��$��|��V��<|��*�� #�Common share 68.97% or 4,000 sharesPreferred share100.00 or 4,200 shares(Invested by Thai Union International, Inc.)

THAI UNION INTERNATIONAL, INC. (TUI)

TRI-UNION SEAFOODS, LLC. (TRI-U)

TRI-UNION FROZEN PRODUCTS, INC. (TUFP)**

**Empress International Ltd. and Tri-Union Frozen Foods, LLC were merged

32

YCC

CAPN

TUIH

ANNUAL REPORT 2011


��!

Tel:Fax:

Type of Business:



��!

Tel:Type of Business:



��!



9330 Scranton Road, Suite 500,San Diego CA 92121 USA(858) 558-9662 (858) 597-4566Processor and distributor of wet anddry pet foodUSD1October 2010Common share 99.00%(Invested by Thai Union International, Inc.)

��\�� Z��@��(250) 762-5434Processor and distributor of pet food��<|��*�� #�July 2011Common share 100.00%(Invested by U.S. Pet Nutrition LLC.)

8th Floor, Medine Mews, La Chaussee Street, Port Louis, MauritiusA holding company for investment in Europe��<�� #�June 2010Common share 100.00% or 22,000,001 shares

U.S. PET NUTRITION LLC. (USPN)

CANADIAN PET NUTRITION, ULC (CAPN)

�+��<��~��|��+~Z��<�+�

��!

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Type of Business:



��!

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Type of Business:



��!

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��V��&��#��#��>\��Paris, France (33) 1-53-77-53-53(33) 1-53-77-17-13 Processor and exporter of canned seafoodin EuropeQ��Q�>��<�� #�October 2010Common share 100.00% or 31,367,000 shares(Invested by Thai Union Investment Holding)

JL. Lingkar Timur No.53Tegalkamulyan Cilacap 53211Jawa Tengah, Indonesia(62-282) 521-002 - 5(62-282) 521-007Processor and exporter of cannedtuna products<|��>��<|�� #�May 2006Common share 76.50% or 20,655 shares

��#�� @��Z#��Long An Provice, People’s Republic�$��(84) 072-387-2377(84) 072-387-2388 Processor and exporter of canned seafoodUSD1,919,936December 200751.00%(Invested by Songkla Canning PCL.)

MW BRANDS HOLDINGS SAS (MW BRANDS)

PT JUIFA INTERNATIONAL FOODS CO., LTD. (JIF)

YUEH CHYANG CANNED FOOD CO., LTD. (YCC)

33

ATA

MIH

ANNUAL REPORT 2011


��#Factory:

Tel:Fax:



��!

Tel:Fax:



��!

Tel:Fax:

Type of Business:



1/74-75 Samutsakhon Industrial Estate,Tambon Tarsrai, Amphoe MueangSamutsakhon, Samutsakhon 7400066 (0) 3449-0330, 3449-0009 66 (0) 3449-0008Processor and exporter of imitation crab stick@��\��@�� #�June 1990(Additional investment in March 2004)Common share 25.00% or 375,000 shares

979/79-80 26th Floor, S.M. Tower,Phaholyothin Road, Samsennai,Phayathai, Bangkok 10400 66 (0) 2298-034566 (0) 2298-0331 - 3 E-Procurement Service Provider@��\��@�\�� #�September 2003Common share 20.00% or 1,000,000 shares

G2, Concorde Apartments, 6-3-658,Somaji Guda, Hyderabad 500 082,Andhra Pradesh, India91-40-2331-0260, 2331-026191-40-2331-1604Processor and exporter of shrimp feedand frozen shrimp�� #�October 2008Common shares 14.99% or 1,199,000 shares

Z<��<��~�=~~�|�~*�Z��*�Z<=�

BIZ DIMENSION CO., LTD. (BZD)

��=��|Z��=Z�

��!

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��!

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Type of Business:



��!

Type of Business:



30/2 Moo 8, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon,Samutsakhon 74000 66 (0) 3442-368666 (0) 3442-3688Processor and exporter of seafoodby-products, i.e. high grade oil extracts from �#�� #��&��$��shell.@�X��@�� #�March 2009Common share 48.97% or 4,407 shares(Invested by Thai Union Manufacturing Co., Ltd.)

G2, Concorde Apartments, 6-3-658,Somaji Guda, Hyderabad 500 082,Andhra Pradesh, India91-40-2331-0260, 2331-026191-40-2331-1604Processor and exporter of shrimp feedand frozen shrimpBt55,440,000 September 2009Common share 50.00%

Unit 4, 2nd Floor ADF Haus, Musgrave St.Port Moresby, Papua New Guinea A holding company set up for investment in Majestic Seafood Corporation Ltd. in Papua New Guinea which operates tuna processing / �#��#��[��K�maritime areasUSD1,500,000October 2009Common share 33.33% (Invested by Thai Union Manufacturing Co., Ltd.)

TN FINE CHEMICALS CO., LTD. (TNFC)

��+��`<�=��|��Z��*��

MORESBY INTERNATIONAL HOLDINGS, INC. (MIH)

Remark: Phuket Fishing Co.,Ltd., Samui Fishing Co.,Ltd., Phang-nga Fishing Co.,Ltd., |�� =��*�Z��*��|��=��*�Z��*� #��&�� K#��group have terminated their operations and completed registeration procedures for business dissolution and liquidation in 2011

THAI UNION FROZEN PRODUCTS PCL.THAI UNION FROZEN PRODUCTS PCL.

Remark: The above data refers to sales structure after exclusion of connected transactions. The total sales of tuna vessel business group are derived from sales made to member companies in Thai Union Group and therefore regarded wholly as connected transactions.

�� K�|��`|��<+�� K��=��%<��<=��<|�� K��<��@�� K��<�+�CAPN holding owned by USPN

TUF ANDSUBSIDIARIES

Sales Structure of

Unit: Million Baht

2011 2010 2009

Sale Sale Sale% % %

Group 1Production andExport of Frozenand Canned Food Products

Group 3Production andDistribution ofAnimal Feeds andAgricultural Products

Group 5OverseasInvestments

Group 2Production andDistribution ofPackaging Products

Group 6=��

Group 4Food Business inDomestic Market


Thai Union Manufacturing Co., Ltd.

Songkla Canning PCL.

Thai Union Seafood Co., Ltd.

Thai Union Feedmill Co., Ltd.

��`#� ��|��*�Z��*

Thai Union Hatchery Co., Ltd.

Phuket Fishing Co., Ltd.,

Samui Fishing Co., Ltd.,

Phang-nga Fishing Co.,Ltd.,

Songkla Fishing Co., Ltd.,

Siam Fishing Pte. Ltd.

(All Companies have terminated theiroperations andcompletedregisteration procedures for business dissolution and liquidation in 2011)

Thai Union International, Inc.

Tri-Union Seafoods, LLC.

Tri-Union Frozen Products, Inc.

(Empress International Ltd. and

Tri-Union Frozen Foods, LLC. were merged)


MW Brands Holdings SAS

U.S. Pet Nutrition LLC.

Canadian Pet Nutrition, ULC.

PT Juifa International Foods Co., Ltd.

Yueh Chyang Canned Food Co., Ltd.

��*�Z��*

Thai Union Graphic Co., Ltd.

T-Holding Co., Ltd.

ProductBusiness Group Company

%byTUF

-

90.08

90.44

51.00

51.00

95.00*

99.99*

100.00

100.00*

82.00*

100.00

100.00*

99.00*

100.00*

76.50

51.00*

90.50*

74.00

90.00

11,961.94

12,624.51

5,374.85

1,487.42

3,964.69

27.44

130.93

4,758.23

27.81

78.03

N/A

15,489.63

10,136.60

4,048.47

N/A

N/A

N/A

N/A

401.71

584.77

N/A

12,860.20

11,713.50

4,396.97

N/A

2,820.32

N/A

N/A

503.86

647.50

418.47

240.16

496.92

241.32

1,282.661,514.02

13,116.93

12,416.72

5,535.89

1,199.42

16.7

17.7

7.5

2.1

5.8

0.0

0.2

6.7

0.1

0.0

N/A

22.5

14.7

5.9

N/A

N/A

N/A

N/A

0.6

0.8

N/A

18.0

16.4

6.2

N/A

3.9

N/A

N/A

0.7

0.9

0.6

0.3

0.7

0.3

1.92.1

19.0

18.0

8.0

1.7

TUF

TUM

SC

TUS

TFM

TQS

TUH

TUI

Tri-U

TUFP

TUIH

MWB

USPN

CAPN

JIF

YCC

68,994.4971,507.40 100.0100.0

APC

TUG

THD

13,276.77

15,175.86

6,557.31

1,531.51

13.5

15.4

6.6

1.6

799.06

187.00

0.8

0.2

4,978.25

23.41

88.48

5.0

0.0

0.1

1,813.86 1.8

N/A

13,080.19

18,594.08

N/A

21,867.85

N/A

N/A

437.26

259.49

N/A

13.3

18.8

N/A

22.2

N/A

N/A

0.4

0.3

98,670.38 100.0


NATURE OFMAIN BUSINESS

MAJOR EXPORT PRODUCTS

Canned/Pouched/Seal-contained TunaFrozen tuna is selected, defrosted, steamed, � �� K�$��K��pouched/seal-contained as per customer requirements. In order to enrich nutritional value ��#��$��#�� *�*K��#�"�� soybean oil, olive oil or different seasoning sauces. After sealing, the products undergo sanitary �� ]�� }#� ��*

Canned/Pouched/Seal-contained SeafoodSelected raw materials, like shrimp, crab, squid and baby clam, are shelled, boiled and brined before being canned/pouched/seal-contained, respectively. Sealed products are sterilized and ��&�� }#� ��*

Frozen ShrimpWhite shrimp is processed or boiled under standardized manufacturing process before proceeding to freezer, being packaged and ready for shipment to consumers worldwide. Frozen shrimp products are available in a wide variety, ranging from whole, headless, tail-on, headless and shelled, boiled and to value-added products, e.g. sushi and breaded. In addition, pouched products are also available for more convenient preparation.

Canned/Pouched Sardine and MackerelStandard-quality fresh and frozen sardine and mackerel, locally procured or imported, are selected, cleaned, canned or pouched as per customer requirements and cooked, respectively. After cooking, the products receive appropriate measure of certain ingredients, e.g. tomato sauce, K��#�"�� K�� &�� nutritional value and taste. Sealed products are �� ]��&�� }#� ��*

Frozen Tuna LoinFrozen tuna is selected, defrosted, steamed �� #��standards, then vacuum-packed and re-frozen, respectively, to preserve natural nutritional value before export and domestic sales. Tuna raw �� $��%��areas and of various species, e.g. Skipjack, �� K��*

BakeryCreative research and development efforts proudly lead to delectable bakery delights under modern manufacturing environment to serve domestic and international quality-conscious consumers.

Frozen SalmonImported fresh salmon under Norwegian and Chilean selection and quality standards, rich in Protein and Omega-3, is processed and value-added. Through expert and skillful manufacturing techniques, fresh salmon is made into processed varieties where natural freshness and original taste are perfectly preserved.

Frozen CephalopodImported fresh and frozen cephalopod in conformity with required standards undergoes �$��#$��#��K��with processing expertise and technique under quality-oriented environment to preserve natural freshness. The raw materials are processed to become standard value-added products as per customer requirements, e.g. sashimi and breaded.

Canned/Pouched/Seal-contained Pet FoodFresh tuna loin is mixed with other raw materials or ingredients to enrich nutrition and taste as per customer requirements before being canned/�� %�� ]��&�� }#� ��respectively.

Ready-to-Eat Frozen FoodFrozen fully processed food is developed, innovated and prepared by using meticulously selected raw materials in combination with authentic premium ingredients directly imported from original sources for international dishes, or with nutrient-rich local herbs for original Thai dishes. Together, the raw materials and ��#��$��processing environment designed to best preserve natural taste as if freshly cooked right from kitchen.

Sealect Family: Canned Fish

Premium quality raw materials are processed in conformity with internationally recognized standards. “Sealect” family includes the following varieties:

1. Classic Canned Tuna comprises the following varieties:�#��|��K �~� ��#��Steak in Brine, Tuna Steak in Spring Water, Tuna |��|#�"��~� ��Z��#��|��K �~� ��#��|��@��Tuna Sandwich in Spring Water

2. Thai-style Flavored Canned Tuna comprises the following varieties: Stir-fried Tuna with Chili and Basil (Tuna Paad Prig Baikaprao), Stir-fried Tuna with Red Chili (Tuna Paad Prig), Tuna ��#��#��#��Mussaman Curry (Mussaman Tuna), Stir-fried Tuna Curry (Panaeng Tuna), Tuna Chili Curry Soup (Nam Prig Tuna), Tuna Curry Soup (Naam Ya Tuna), Stir-fried Tuna with Black Pepper (Tuna Paad Prig Thai Dum) and Stir-fried Tuna with Roasted Chili Paste (Pad Prig Pao Tuna)

3. Tuna Salad in Mayonnaise comprises the following varieties:

^ �#��|��|��&�� K �� "�&��%� ��|�� ^ �#��|� ��Z��%$��

^ �#��|��|��&��|� ��Spread and Shrimp Spread.

$� &��'&��+��;��$<� ��! Salad Cream with Tuna, Salad Cream with Seafood, Thousand Island Salad Cream with �#��#��|� ��|��{Isolated Soy Protein

5. Seasoned Tuna; available in 3 recipes: Stir-fried Tuna in Chili Paste (Tuna Prung Rod Naam Prig Paad), Stir-fried Tuna in Pickled Fish (Tuna Prung Rod Pla Raa) and Stir-fried Tuna in Spicy Salad (Tuna Prung Rod Larb)

6. Mackerel in Tomato Sauce

7. Sardine in Tomato Sauce and Sardine in Spicy Dressing

8. Sanma in Tomato Sauce

9. Grilled Saba in Kabayaki Sauce and Saba in Teriyaki Sauce

MAJOR DOMESTIC PRODUCTS

Fisho Family: Fish-based/Squid-based Snack

��#��%K��=��$�� #��$��K ��$��#�}#� �� %"�&��#��}#��*�=��$��# ��#��&��K�$��K��K��#��&��*��?��#�� =�� ]�� $��#��*��K�� $�� $#K ��+�� |~14001accreditation body guarantees that “Fisho” is hygienically produced and has attained standard environmental performance. Through continued product development efforts, “Fisho” has been ��&��&��$��#��K��$� ��Q��#��_

1. Seasoned and Shredded Fish Snack

^ Fisho Original;�&�� K ��V"�&��%@��K��#��Tasty, Squid and Soy Sauce in various pack sizes from 7 to 52 grams

^ Fisho iDee:|��#��&�� K ��"�&��@��#��@��K��#�� {|��K��=��$��&�� |� ��=�K��=��$�� &� �� #��K��K�� &��

^ Fisho Dino Master Character; available in 3 "�&��@��K��#��

2. Seasoned Fish Slice; broken into the following varieties:

2.1 Seasoned Fish Slice in Dipping Sauce^ |��=��| ��|�#��&�� K �

��V"�&��~�� @ ��Pepper Crab and Shrimp Paste

^ |��=��| ��|��&�� K �� "�&��@��K��#��|#��|��

2.2 Seasoned and Baked Fish Slice; available in �"�&��~�� |}#��|��|}#��

3. Crispy Seasoned and Baked Fish Slice; �&�� K ��Q"�&��+��{|�� Dipping and Tasty Squid

Bellotta Family: Pet Food

Bellotta is broken into 5 groups:

1. Packaged Dog and Cat Food (Premium Grade)

^ @� ��#��=��&�� K ��"�&��%@��$Z��$��Z�&��Beef Loaf Balanced Nutrition, Chicken in Jelly with Oligofructose, Chicken in Jelly Topping Tuna with Omega 3, Chicken in Jelly Topping �#��Z��~��Q��Z��K{Chicken Loaf

^ @� ��#��=��&�� K ��>"�&��%�#��Z��&��K ��#��Z��&��Imitation Crab Meat, Tuna Light Meat in Jelly Topping Shrimp, Tuna Light Meat in Jelly Hair Ball Control, Tuna Light Meat Mixed Beef in Jelly, Tuna Light Meat Mixed Cheese in Jelly ��#��@��$��=��# �

2. Cup-packaged Cat Food (Premium Grade)

^ @� ��#��=��=��# ��#��&�� K ��V"�&��&��Salmon with Anchovy in Gravy, Tuna with Scallop in Gravy and Tuna with Crab in Gravy

3. Canned Dog and Cat Food^ @� ��=��&�� K ��\"�&��%@��$ ��#��!��K �� Chicken Loaf Mixed Rice (With L-carnitine),

@��$��#��{Z�&��&��Z��K��#��Gravy and Beef Chunk Topping Chicken Ham in Gravy

^ @� ��=��&�� K �� 5 flavors - Tuna in Jelly Topping Chicken (3 Layers), Tuna Chunk Mixed Tuna Flake in

Gravy (Lutein Added), Tuna in Jelly Topping Shrimp, Tuna in Jelly Topping Chicken and

Tuna Topping Shirasu

4. SLU-pouched Dog and Cat Food

^ @� ��=��&�� K �� \"�&��%Z��K��#��{��K ��&��

Z��K��#��&��#��{��K ��&��@��$��#��{��K �in Gravy and Beef Chunk in Gravy

^ @� ��=��&�� K ��\"�&��%Tuna Mixed Chicken Chunk in Jelly, Tuna Mixed Sardine in Jelly, Tuna Mixed Beef in Jelly, Tuna in Jelly and Seafood Platter

5. Cup-packaged Dog and Cat Food

^ @� ��&��=��&�� K �� Q"�&��%|��$��&�� |��$��

Salmon Gravy with Real Salmon and Liver Gravy with Real Liver

^ @� ��&��=��&�� K �� Q"�&��%��&��

�#��{��&�� #��{��and Shrimp Gravy with Real Shrimp



�� >��)

��*�Z��*��#$��#��and distributor of steel and aluminum food packagingproducts (conventional lid and 2-piece easy-open lid).

During 2011, APC continued to see good growth with 12.8% increase in annual sales. The sales growth for the year was mainly contributed by stronger market demand by up to 30% year-on-year for empty can with easy-open lid (EOE) category. In addition, sales performance was also pleasingand improving, with up to 60% annual growth, among target customer groups outside Thai Union Group as a result of customer base expansionefforts made during the year.

In respect to overall market environment foraluminum food package products in Thailand,the industry saw a 8% year-on-year decline inmarket growth rate during the year thanks primarily��"�� #��#�materials, when compared to imported counterpartswith more competitive prices. However, downward movement in material prices was later observed during mid-year to year-end to USD400 per metric ton on average, with tendency towards further decline until early 2012.

Purchase plan for additional machinery fromSongkla Canning PCL., its parent company, has been included in APC’s strategy for 2012. APCanticipates that the additional machinery should be ready for production in the second quarter of 2012 and should increase monthly productioncapacity for 307-mm can size to 5 million sets.

RELATEDBUSINESS GROUPS

Thai Union Graphic Co., Ltd. (TUG)

Thai Union Graphic Co., Ltd. (TUG) offers high-qualityoffset printing services through fully-integrated one-stop-service, enhanced technologicalcapabilities and guaranteed after-sales services. Throughout its presence in printing industry, TUG �� ]��$��$printing service is critical to the attainment ofits business objectives. Therefore, continuedimprovements in modern technological capabilitieshave been constantly areas of strong focus at TUG in order to best meet customer demand and ensure highest satisfaction among customers from each industry. In addition, TUG believes in the importance of human capital in its business and the vital contribution it makes to business success. This belief has led TUG to constantly improve its breadth of people to become printing specialists who are readily equipped with skills and knowledgeto effectively provide consulting service and meet virtually every printing need of customers.

The printing industry has been characterized K�� &��past several years, with tendency towards more competitive pressure each year. In order to stay competitive amidst such an industry landscape, TUG differentiates itself from its printing sector peer group by extending its range of service offerings to drive customer value. Packaging design servicefeatures computer-aided design with over 2,000 available formats and styles for customer to choose from. Sample cutting service is madepossible through its sample cutter, which is capableof providing customer with realistic overview of



printing output before actual printing. Besides,TUG also attempts to shorten production lead time ��K��K ��#��}#� ��through the entire printing process in order to achieve greater customer satisfaction.

TUG’s 2012 business plan includes provision and installation of a rolled sticker printer in response to stronger market demand. The machine has printingcapacity in excess of 20 million stickers per month.

T-Holding Co., Ltd. (THD)

T-HOLDING CO., LTD. (THD) is a marketingcommunications strategy consultant and adistributor of branded products under “Sealect”, “Fisho” and “Bellotta” trademarks for domestic market in Thailand.

“Sealect” Family

2011 saw an overall 6% growth rate in Thai canned ��|�� second most dominant brand with 12% annual growth rate. Nevertheless, Sealect branded productscontinued to maintain its leadership in domestic Thai canned tuna market with robust growth rate of up to 27% during the year. Throughout the entire year, Sealect constantly deployed marketingcommunications strategy through all available media. In parallel with the implementation ofmarketing communications strategy, continual �{��$$��&��K��of its product offerings essentially to best meet consumer needs.

Current tuna consumption among Thai consumersamounts only to 40 grams/person/year. Comparatively,annual domestic sardine/mackerel consumption per person stands at 850 grams, or 21 times higher than that of tuna. Based on the research data, Sealect managed to launch proactive marketingefforts to promote increased tuna consumptionamong Thai consumers. New products were launched under “seasoned tuna category”; Stir-friedTuna in Chili Paste (Tuna Prung Rod Naam Prig Paad) and Stir-fried Tuna in Pickled Fish (Tuna Prung Rod Pla Raa). The two new Sealect innovativeproducts feature brilliant combination of wholesometuna texture and Thai traditional spices and

condiments to create tasty recipes that are much favored among Thai consumers. Both new productsreported strong consumer feedback on the back of their two obvious advantages; affordable retail price that offers excellent value for money for consumers; and their favorably distinctive taste. Consumers can enjoy the products right out ofthe can, along with freshly cooked rice, with no additional preparation required. Alternatively, consumers can also use the products as mainingredient in variety of delicious dishes such as fried rice, sandwich, sautéed vegetable, to name but a handful, simply for the sake of enhanced ��&��%�� $��!��among consumers.

In regard to business strategy in 2012, Sealect &�� $��!��#�K��%��market-leading canned tuna producer in domestic ��*��$��|�� #�to adhere to its marketing concept with strong focus on promoting higher tuna consumption among Thai consumers as alternative substitutefor conventional meat such as pork andchicken. Canned tuna products have an array ofadvantages that suit well with hectic lifestyle led by�� %��#��%��$��*Among those advantages include storage and ��#��&�� K��derived from naturally digestible tuna texture with low fat yet high DHA composition. In considerationof these intrinsic value and advantages of its canned tuna products, Sealect plans to deploy 360-degree marketing communications strategy with main feature involving suggested product application in a number of simple, appetizing and time-saving Thai dishes beyond imagination of most consumers. Sealect anticipates that the campaign should boost sales growth and broaden customer base for canned tuna products in Thailandby over 20% against an average of mere 6% perennialmarket growth per annum in the past. As for sardine/mackerel products, Sealect aims to capture new generation consumers through building their perceptions of Sealect as a decided brand of choice with attractiveness, modernity and accessibility and being commonly favored among the new generations. In order to implementthe brand awareness campaign, major Sealect’s



strong points will be emphasized to attract target consumers. Among those strong points include meticulously selected quality tuna chunks and ��%}#� ��#��#�� K��Royal Project. The procurement of tomato sauce $�� |�� &��reliable quality ingredient while also providing additional earning channel to those local growers participating in the royal project.

“Fisho” Family ��"��#��$�#��}#��$��had negative impacts on Fisho’s annual salesperformance. Both target consumers and retail stores opted to purchase only necessary living�� &��#��"��*Besides, scheduled promotional campaigns in conjunction with participating retail stores and general grocery outlets during the ending quarter of the year were all unable to implement. As fourth}#��#�#� ��K#�� #� sales of Fisho [and other products in the snack industry], the impossibility to carry out plannedpromotional campaigns during the period resulted in sales below target. Despite a host of unfavorabletrading factors during the year, Fisho still managed to deliver a creditable 3% annual sales growth.

In 2012, Fisho has set its annual growth target at 20% although the annual growth rate of overall �� &��#��?level. Fisho expects to increase its market share to 15% by 2012 year-end via fully integrated brand building campaign in order to further enhance its brand strength. Along with the efforts to increase K��&��$��#��will also be promoted in parallel with reinforcementof brand perception and brand awareness among teen and new generation consumers, its main targetgroups during 2012.

Aside from attempting to promote greater brand recognition among target consumers, a number of improvements will be made across Fisho product ranges. Among them is product re-formulation that encompasses taste, aroma and texture quality to achieve greater consumer satisfaction. Duringre-formulation process, research efforts will be made to create the best new Fisho formulation.

Moreover, improvements in packaging formats and styles will also be made to better suit target groups as well as to project Fisho’s unique brand image when it is distributed to sales outlets.

Majority of sales efforts during 2012 will be taken through constant promotional activities to beimplemented in partnership with participatingconvenience stores, one of the major saleschannels for Fisho and other snack products.Aside from this, special attention will be givento on-shelf product orientation and display to ��!��]��&��}#��among consumers within store environment, both in retail stores and general grocery outlets in regions.Sales activities during 2012 will be focused more on product distribution in regional areas. In the mean time, �� K#�� K��in addition to conventional general grocery outlet.2012 will also see more joint promotional campaigns between Fisho and other alliance commodities.

“Bellotta” Wet-based Dog and Cat Food Family

An increasingly upward trend in keeping pets has been obvious recently along with constantly growinginterest among keen keepers in the quality and nutritious value of pet nourishment. Underpinned by these favorable trading conditions, “Bellotta” wet-based dog and cat food products havesuccessfully broaden their customer base accordinglyover the years. In particular, the cat food product ranges under premium category have proved widely popular among target customers due to their trust in Bellotta’s product quality and brand strength. Such this strong customer acceptance and feedback are creditably achieved through a number of contributing factors. Export-standard processing facilities, coupled with top-quality raw materials of tuna light meat, play crucial roles in acquiring the reputation and brand loyalty among the target customers. In addition, strong product offerings are another major factor, as demonstrablyevident from a broad range of available product choices, taste varieties and formulae. Moreover, Bellotta has continually introduced innovative packaging designs and formats in order to best meet cat’s appetite and every need and functionalrequirement by pet keepers.



Bellotta continued to see good growth in 2011albeit a number of unusually severe natural disastersduring the year. Sales were substantially generated from the cat food products, accounting for 70% of total Bellotta sales. While there were less deploymentof marketing communications and public relations materials in the year, stronger focus was shifted to marketing campaigns designed to gain business foothold in new potential market frontiers. In order to materialize the strategy, Bellotta-sponsored dog and cat contest events were launched both onregional and national levels to further promote brandrecognition and loyalty among target customers.

Bellotta’s marketing strategy for 2012 will continue to center on cat food products. In parallel with ��%K��$�� !��into premium pellet cat food to extend its branded product range under premium category. There will be an intense focus on direct and comprehensiveaccess to target customer groups and commercialstores. Joint sales promotional campaigns willbe implemented in partnership with selected participating pet shops and animal hospitals on a regular basis through the entire year. In addition, Bellotta will also sharpen its focus on sponsorshipof cat contest events. Meanwhile, continuedmarketing efforts will be made to reinforce the marketing position of its proprietary dog food products.

Thai Union Seafood Co., Ltd. (TUS)

Thai Union Seafood Co., Ltd. (TUS) is involved in frozen shrimp processing and export.

TUS reported a robust year-on-year sales growth of44% to USD134 million in 2011, with across-the-boardpleasing and improving performance seen among � ��#��*��#��K �growth in the year included marinated, breaded and alive shrimp varieties, among others. In particular,live shrimp product ranges shipped to Japan enjoyed as much as 20-30% higher selling prices against their normal shrimp counterparts. Furthermore,competition was less intense in the premium qualitylive shrimp-based product varieties.

Owing mainly to shrimp price volatility during the year, TUS revamped its sales strategies accordingly with more stress on short-term sales contracts as a proactive measure to minimize potential impacts of volatile raw material prices and currencyexchange rates. With regard to capital investment in 2011, TUS constructed its own ice-making facilitieswith daily production capacity of 60 metric tons. The facilities were housed in the initial processing area within its shrimp plant compound. The purposeof the investment was to better control ice qualityas well as meet growing market demand for its shrimp products. As for business strategy for 2012, TUS has set itsannual growth target at 30% for productioncapacity and sales performance [from the total annual quantity of processed raw materials of 23,000 metric tons in 2011]. As another area of greatemphasis, more strenuous efforts will be taken to extend its geographical and product reach to �� K �� such as China, Singapore, Taiwan and Europe. Apart from these planned actions, a couple of plant improvement initiatives have also been in the pipeline to support continuing business growth. Namely, initial processing area will be enlarged along with an increase in staff and worker head counts. In addition, more automation will beintroduced in the production lines to improve��#��$��*�!�� $�#��equipment to be introduced in the plant include sushi processor, scale unit and packaging machine.

Thai Union Feedmill Co., Ltd. (TFM)

Thai Union Feedmill Co., Ltd. (TFM) is a manufacturerand distributor of aquatic feed varieties with ��$��#��&��both domestic and overseas markets. TFM operatesunder its corporate vision of “Thailand-based manufacturer of top-quality aquatic feed” and adheres to the following commitments:

^ �� #��the entire work procedures in parallel with continued improvements to achieve maximum �$��#��$��

^ <��{��&��#��K��to provide customers with unparalleled quality products and services; and

^ ��#��K �K��#��#�#� cooperation with customers, trading partners, employees and shareholders.

TFM could achieve 90% of its annual sales target in 2011. Benchmarked against its original commercialtargets for the year, the sales performance deliveredby its two core product categories were individually��V?$��$��V?$��$��*

�� #� �� $��$��#��$��grew by 50% from 2010 level, with extraordinary sales achievement 24% above set target for the ��*�� $��"��$��$��&��#��?��$�� $�� *��for sales breakdown by shrimp feed products, feed for white shrimp accounted for 55% of the total shrimp feed sold throughout the year, followedrespectively by supplementary feed (25%), feed for black tiger shrimp (20%)

In 2012, TFM has set its annual growth target at 17% K��$��$��#��*��plans to broaden customer base among its existingcore markets while also concurrently embarking on penetrating into new promising markets. In implementing its annual market plan during 2012, TFM will deploy strategies with primary focus on goodquality on a stable basis, satisfaction-guaranteed ��%�� {��%�� #��&��'��promotional sales campaign with potential customers.

Concerning investment projects within 2012, TFM plans to replace and improve its existing obsoletemachinery at Mahachai processing plant to a more advanced system. The new machinery is equipped with superior technological capability, ��%�$��K ��$��product quality. Apart from this investment project, new feed mill will be constructed at the current manufacturing site in Amphoe Ranot, Songkhla Province along with two additional shrimp feed production lines. The new plant and additional feed production lines will increase TFM’s productioncapacity by approximately 4,000 – 5,000 metric tons per month. Both the machinery improvement

and plant/production line improvement projects will require capital investment worth Bt420 million and are expected to complete around 2012 year-end.It is anticipated that all these new facilities should beable to meet TFM’s production capacity requirementduring the next 3 – 5 years in minimum.

Aside from the capital investments to be made in production line improvements and extension during2012, TFM also plans to invest in the erection ofadditional shrimp farming facility in Satun Province on 154-rai plot of land. The new shrimp farming facility will house 24 ponds and operate for dual �#�� $��{�#��$��=�and as shrimp breed development unit for Thai Union Hatchery Co., Ltd. (TUH).

Pertaining to overall landscape of Thai shrimp farming industry in 2011, annual output shrank by approximately 8-10% from the level in the prior year thanks to a few contributing factors. Among ��&��$��"��the beginning of the year and the subsequently��%��"��K�� early April. As a consequence of the floods,immediate extensive damages to shrimp farms in southern region were seen across Chumphon,Surat Thani, Nakhon Si Thammarat, Songkhla, �� #��K��&��*�� these affected areas, Surat Thani Province was hardest hit with an estimated decline in annual yield by approximately 50,000 metric tons out of this natural disaster alone, apart from repeated pond preparation and delayed start of next farmingcycle among local farmers in the wake of the event. Also contributing to the less impressive annual farming output in 2011 was climaticuncertainty which affected the growth rate among farmed shrimps and therefore made the $��#�#�#� ��$��*��factor to blame was the outbreak of white spot syndrome in different farming areas countrywide, beginning in June and continuing through the entireyear. In the meantime, other shrimp-producingcountries also delivered less lackluster annualfarming performance as a consequence of ahost of unfavorable factors during the year. Thesenegative and positive factors for Thai shrimp farmingindustry in the year, along with their impacts in combination, eventually resulted in Thai average

shrimp prices being favorable all the year round �� K�$��*

In reference to the shrimp epidemics, theunprecedented presence of EMS (Early MortalitySyndrome) among Thai farmed shrimps was detected for the first time in farming areas in Chanthaburi Province, in addition to the already prevailing white spot syndrome. The spread of the recently detected disease, if occurred, would inevitably damage Thai shrimp farming crops, akin to the earlier occurrences in China and Malaysia. With alarming sign in sight, Thai farmers need to develop and have in place their proactive measuresagainst probable EMS epidemics along with �� &��"�!�K �*��$$�� them properly and timely realign their strategiesin response to emerging challenges and therefore maintain their competitiveness in global shrimp-farming industry.

However, TFM anticipated that 2012 should seeannual Thai shrimp farming output hover around the same level of 2011, namely with eitherincrease or decrease within a 10% range from 2011. Concerning price trends, shrimp prices should remain favorable until April 2012 withpossibility to further stay in satisfactory level through the entire year provided that there is no considerable year-on-year increase in farmingoutput in Thailand and other shrimp-producing countries during the year. Statistics show that over 99% of commercial shrimp farming activities in Thailand involves white shrimp whereas there is less than 1% farming activities related to black tiger shrimp. Currently, over 25% of Thai farmers has introduced auto feed device in their farms in order to ward off pressures from the ongoing tight labor supply and the forthcoming hike of minimum daily wage to Bt300, to be in effect in April 2012. It is estimated that the auto feed users in commercial shrimp farming environment will double in number to 50% by 2012 year-end.

Thai Union Hatchery Co., Ltd. (TUH)

Thai Union Hatchery Co., Ltd. (TUH) is a manufacturerof high-quality white shrimps (Penaeus vannamei) nauplii for distribution to customers of Thai Union Feedmill Co., Ltd. (TFM) and domestic shrimp farmers.TUH operates under strong quality commitment to ensure continual provision of unparalleled productsand services to customers.

In 2011, TUH delivered 30% year-on-year sales growth for its nauplii products while shrimp juvenileposted sales in the neighborhood of the prior year level. During the third quarter of the year, plankton production house was adapted and its function was shifted to sand worm production. The outputof the in-house sand worm production was used $��$��#��#��[�� on imported sand worm supply. During the year, TUH was accredited with Best Aquaculture Practices�@��K��}#��# �#��#�� *(ACC) for its standard practices on shrimp culture and processing in compliance with international institutional guidelines.

In 2012, TUH has set its annual growth target at 50% from 2011 for both nauplii and shrimp juvenile products. Areas of special emphasis in 2012 will be maintenance and improvement of product and service quality. TUH also plans to implement hatcheryfacility extension plan during the year to itsproduction site in Amphoe Sathingphra, Songkhla Province. The purpose of the hatchery extension project is to increase production capacity to betterserve target customer groups in upper southern region. In addition, another initiative in the pipeline is improvement and development of commercially viable white shrimp breeds with special characteristicsin order to provide support for shrimp business growth in the future. The breed engineering efforts will be made in collaboration with other respective state agencies.



1. TUF and other Thailand-based subsidiaries are all major seafood manufactures with combined raw material processing capacities of tuna, frozen shrimp, canned pet food and frozen cephalopod of 568,000, 75,000, 57,000 and �\��*��annual output, we manage to keep our

production costs low through economies of scale. 2. TUF is a truly brand owner of various world’s

top canned and frozen seafood products, ranging from “John West”, the number-one K��<�� the Netherlands; Petit Navire and Hyacinthe Parmentier, the dominant brands in France market; “Mareblu”, the third-largest brand in Italy; “Chicken of the Sea”, the third-largest brand in U.S. market; “Century”, the foremost brand in China and “Sealect”, the leading brands in Thailand, thus further broadening and diversifying our customer base with greater overall strengths.

3. TUF’s overseas investments help expand overall production capacity and acquire remarkable industry ranking the largest tuna canner in the world and concurrently the leader in global frozen and canned seafood industry.

4. TUF and subsidiaries have wide range of processed seafood variety and are readily equipped with 76,000 –ton cold storage capacity. Both strengths in combination enable TUF to better meet customer needs in terms of product

choice and order volume.

5. Thai Union Group products are consumed by large customer base and available in different countries and territories, thus making global product presence and simultaneously

lowering economic impacts in any certain country on TUF.

6. Thai Union Group has strong international competitiveness. Standard quality products at competitive price as well as experienced and capable marketing personnel with regular customer visits play roles in acquiring us such a strong competitiveness in global market.

7. Management team member carry with them long experience in, and insight into, frozen seafood business and are well recognized in the industry. Additionally, our operation personnel are fully equipped with professional capabilities necessary for their roles. Our

management and personnel strengths are among the drives that propel our continued growth.

TUF STRENGTHS



Financial Highlights Unit: Million Baht

Per Share (Baht)

Year 2011

Year 2011

Year 2010

Year 2010

Year 2009

Year 2009

Sales

Total Revenues

?� ��

Total Assets

Total Liabilities

Shareholders’ Equity

Basic Earnings per Share

Diluted Earnings per Share

Dividend

Par Value

Book Value

68,995

69,697

10,444

35,870

17,459

18,411

3.79

3.79

1.92

1.00

18.49

71,507

72,810

9,531

74,777

51,541

23,236

3.20

3.15

1.60

1.00

23.36

FINANCIALHIGHLIGHTS

98,670

99,589

16,369

83,230

56,161

27,069

5.30

5.17

1.56

1.00

25.53

AWARDS, CERTIFICATES ��|

~#��$��%$��#�� $$��&�strategic management, coupled with a strong determination to grow consistently in all relevant business segments that would lead to achievement of competitiveness, helped us to land a host of prestigious awards granted by ��$$��&��K��and organizations, trade partners and the �� #��$� ��_

1. Accredited with Thailand Trust Mark ��K��$�� Trade Promotion, Ministry of Commerce, as high potential Thai exporter having the capability to consistently maintain product quality standard and to securely acquire �#��#��international markets.

�* �� [�@��%��consecutively in FinanceAsia Magazine’s annual Best Managed Companies Poll, and also named among award-winning Thai companies in Overall Best Managed Company, Best Corporate Governance and Best Investor Relations subcategories.

Q* ��#��&� ��=�&��~and the Most Favorite CFO in the Food and Agribusiness sector by the Securities Analysts Association (SAA) of Thailand’s annual awards.

4. Named the winner of Green Leadership Award by Enterprise Asia in Asia Responsible Entrepreneurship Award - Southeast Asia 2011 for the “Regaining Coastal Ecosystem Balance through 1,000,000 Mangrove Sprouts”

program, a TUF’s internally developed initiative, based on CSR program judgment criteria with emphasis on conservation and revival of natural resources and environment.

\* ��$��$��bond ratings with a stable outlook by TRIS Rating Co., Ltd. despite the sizeable acquisition of MW Brands and increased debt burden.

In addition, we place hygiene and food safety ��&��$��#��order to ensure the highest level of customer satisfaction, which is evident from numerous �� }#� ��#�by various institutes and agencies as follows:

^ ��|~X��_��`#� ��|��K�<��|��&��<��|�*

^ ��|~�V��&�� |��K�<��|��&��<��|�*

^ ��|~��>��\K��@#��#�$Z�K��`#� ��|��of Medical Sciences, Ministry of Public Health and by the National Bureau of Agricultural Commodity and Food Standards (ACFS), Ministry of Agriculture and Cooperatives of Thailand.

^ ��@�� K� |��$��=��|�$��K�<��|��&��<��|�*

^ ��K�|�|%�� Service GmbH (Germany) for compliance with food processing requirements within Shrimp, Cephalopod and Salmon Production Lines.

^ ��K�|�� K� $�� food processing requirements within Fish 1, Fish 2, Meal and Bakery Production Lines.

^ �� =��|��\��=|�K�|�|%�� |��&��K+��for compliance with food processing requirements within Shrimp Production Line.

^ ��K�<��$Orthodox Jewish Congregations of America.

^ ��K��<|=��#�Administration (FDA), a US agency in charge of inspecting the quality of imported food and medicines.

^ ��K��=��Agency (CFIA), a Canadian agency in charge of monitoring quality of imported food and medicines.

^ ��+�]�� Control Points (HACCP) by Department of Fishery and Department of Agriculture, Ministry of Agriculture and Cooperatives of Thailand and with HACCP USFDA by SGS (Thailand) Limited. The Hazard Analysis Critical Control Points system is a quality assurance system on food safety, which can effectively prevent hazards, including biological, chemical and physical contamination by placing emphasis on monitoring manufacturing procedures, especially the points or stages that are critical control points (CCP), with consumer safety as the key objective.

^ ��#$��#��Practices (GMP) for food manufacturing operation by Department of Fishery, Department of Livestock and Department of Agriculture, Ministry of Agriculture and ��&��$�� K��~$��of Public Health of Samut Sakhon Province.

^ ��+� � ��K�� Islamic Committee of Thailand.

^ ��K�|�#��$��@#��#�$Standards (SABS) for compliance with food processing requirements within Fish 1 Production Line.

^ ��@��}#��# �#��@��K��}#��# �#��#�� Inc. (ACC) in terms of standard practices on shrimp culture and processing, covering shrimp hatchery, shrimp farm and shrimp processing factories with emphasis on social and environmental responsibility as well as attention to the safety of food products and product traceability.

^ �� `#� ��#��`��K�� Z��Australia, as an operator in compliance with the Global Food Safety Standards and International Retailing Best Practice within Canned Tuna and Canned Sardine Production Lines.

^ ��`��K�Department of Fishery, Ministry of Agriculture and Cooperatives of Thailand.

^ ��~��# �#�� $�� with ACT Organic Standards within Shrimp Production Line.

SUSTAINABLE��Z~��



TUF has thrived rapidly and continuously during the past several years in various aspects, as demonstrably evident from obvious increases in the sizes of our organization, business, capital investment, production capacity, new market frontiers and various development initiatives to propel sustainable growth. Being in such a rapid growth has prompted us to realize the potential impacts of our operations on the country’s economy, society and environment. Being conscious of this fact, we envision that corporate sustainability should be built on well-balanced �!��#��$�� {��&�� &� ��strategy and business strategy so that both � ��"�#�� K��*In addition, we also attach great importance to determination of our own criteria and guidelines on sustainable development practices that meet international standards for the purpose of acquiring ��K� ��"��#��K��# �#��of management transparency. The development process of the mentioned criteria and guideline encompasses comprehensive analysis of potential impacts of our operations on society and environment. We are determined to further drive our best practices on minimizing the societal and environmental impacts of our operations.

As a result of the above commitment and the strenuous efforts taken in turning it into reality, we were proudly named the winner of “Green Leadership Award” for the year 2011 by Enterprise Asia, a famous NGO in pursuit of entrepreneurship development. We were judged the award winner due to our proven leadership roles in environmental protection in Southeast Asia. Based on the criteria, ��#��K��}#� ��environmentally responsible enterprise that realizes the potential adverse impacts of its operations on environmental welfare and attempts to minimize those impacts. Successful award winner is required to demonstrate strong evidence of commitments ��$��&��&�� friendly product design, recyclable waste reduction and management, and powerful visions as well as strategies for integrating environmental aspects into business practices.

The framework for our progress towards sustainabledevelopment consists of the following key components:

Continuous Protection with Sustainable Growth

With our heavy dependency on natural seafood supplies, particularly tuna, which is the raw material of our core product category, we are therefore acutely aware that our main business activities are directly related to marine ecosystem, from �� #�� *�� making commercial progress, we also place strong emphasis on marine ecosystem pollution potentially caused by our operations with the intention of helping sustain marine ecosystem balance. In this regard, we have been cooperating closely with the Regional Fisheries Management Organizations (RFMOs), an international organization dedicated ��#��K ��$��#��or highly migratory species (including tuna), in data exchange program for improved fishery management. Among our cooperative actions on this front includes provision of our tuna procurement data to RFMOs so as to enable them to trace back to the origins of our tuna raw materials.

Another concrete example of our commitment to promote sustainable marine ecosystem balance can be seen through our active participation in the establishment of the International Sustainable Seafood Foundation (ISSF) as one of its co-foundingmembers. ISSF is established through the brainchild and mutual cooperation of 9 global seafood and tuna industry leaders, which include TUF together with its two subsidiaries, MWB and Chicken of the Sea. The implementation of the ISSF’s environmentally critical mission is also joined byleading scientists and experts in marine ecosystemand representatives from non-governmental organizations, such as World Wide Fund for Nature(WWF). The objectives of ISSF are to develop science-based measures on sustainable marine resource management to ensure optimum balance of global marine ecology, based on new technological innovations that are made possible through research projects. In attaining the objectives, we and other founding members are ready to provide support and resources to facilitate experiments and research projects to ��}#��$��}#�� K ��K �*In addition, ISSF supports monitoring and alarming



scheme that ensures appropriate stock of each ��# ��K�preventing their population from falling below acceptable safety levels. Furthermore, prevention against illegal, unreported and unregulated (IUU) ��&��&��$�||=*

Contribution to Future ChallengeThai Union Group are fully aware that sustainable development requires a huge investment of time and effort. In harmony with ISSF’s opinion, we realize the paramount importance of long-term planning in order to achieve the goals of sustainable development. Therefore, ISSF has developed a set of 6 long-term development guidelines as set forth below:

1. Control and Reduce Fishing Capacity2. Mitigate by Catch3. Eliminate IUU Fishing4. Expand Data Support – Collection and Analysis5. Enhance Performance in Monitoring, �� {|#�&�� 6. Improve Overall Tuna Stock’s Health

+��&��$��&�� sustainability requires strong support from high standards and risk prevention measures to preserve &��*��have been working closely with our suppliers, national governments, the EU, RFMOs and NGos to maintain and improve the environment from the viewpoints of seafood processor. Our partnership with those like-minded parties is also intended to promote experiment of new innovations to mitigate environmental impacts, including research projects involving lower emissions of carbon dioxide. All these international collaborative efforts are taken to ensure that we will be able to grow our business whilst concurrently fostering sustainable development.

Operation and Environmental Management��#��$�� with environmental performance commitment serves as one of the major contributing factors for our proven commercial successes.

We are committed to full compliance with legislative requirements and institutional guidelines

under the international environmental and quality management standards of ISO 14001 and ISO 9001. On-site surveillance audits are carried out annually at our processing facilities by certified accreditation bodies to ensure their continued compliance with the requirements of those standards.

�� We are very conscious of fully observing statutory rules and regulations governing our business activities and those associated with various aspects of environmental management. These include our full respect to requirements pertaining to environmental management systems and organizational capability to maintain required levels of environmental performance. Among them are all forms of pollution prevention and waste mitigation measures that are taken with special emphasis on responsible consumption of natural resources such as energy, raw materials, water and packaging. Also central to this approach is to encourage organization-wide employee involvement in any corporate missions intended to drive environmental performance. Such employee involvement is made possible through building a powerful sense of common purpose among personnel of all levels, creating nature-care awareness and providing appropriate technical training sessions.

Energy Conservation MeasuresWe have actively been seeking to promote the growing importance of reduced consumption of natural resources across all our manufacturing bases. This clear insight into the global energy agenda should lead to lower energy consumption within our organization, with strong emphasis on ��%�$��#��*��K��of knowledge and expertise among our able engineering and process development teams has proudly resulted in the following internally developed innovations in support of our energy conservation initiatives:

Heat Recover Project: The project is designed to utilize the heat in water exiting the cooling system to preheat input water before it enters the boiler’s deaerator. The objectives of the project are as follows:



1. To cut coal consumption through preheating input water before it enters the boiler’s deaerator.

2. To reduce consumption of electrical energy in the cooling system’s evaporative condenser.

�� Biogas is a form of alternative energy that can be produced through biochemical process. As seafood processor, our manufacturing process generates organic waste on a daily basis. In order to deal with the organic waste responsibly, our �{��K�� #��!��#�K��$��waste with the following objectives:

^ �� &��K�$# ��!� ��the byproducts of seafood processing.

^ ��]��#��$� ��#��available within our organization.

^ ��#��#��#��lowered use of conventional commercial gas.

^ ��&��K ��$reducing greenhouse gas emission and therefore contributing constructively to global warming agenda.

Providing Quality of Life

Sustainable Human Capital DevelopmentWe have adopted a progress-oriented HR policy, as we believe in the utmost importance of human capital in our business and the vital contribution it makes to our achievement of common goals. Therefore, we are committed to promoting greater professional capability among our employees in parallel with continued improvements in their quality of life. We help expand their career potential as well as provide exciting and challengingcareer opportunities with the intention of encouragingthem to perform their respective functions at their best. In doing so, we develop, and capitalize on, our tailored individual development plan on a continued basis. The individual development plan is implemented in conjunction with systematic follow-up and performance evaluation conducted to our personnel training and development programs.In addition, the availability of Human Resource

Information System (HRIS) within our organization �� $��#��$�#�HR data management but also lowers our operatingcosts. Under this human capital management policy,all people across the business are engaged side byside in continual process of knowledge acquisition and management.

Each year, our personnel management system focusesmainly on competency, which is composed of 3 major elements; Core Competency, Management Competency and Functional Competency. In addition to this, the Individual Development Plan (IDP) is applied organization-wide to personnel of all �&� �� %K��&��#� ��$��appraisal system. Meanwhile, 360-degree competencyassessment is required for senior supervisory and departmental management personnel. Apart from these competency-intensive appraisals, assistant departmental manager and other higher-ranking positions are additionally subject to succession planning performance appraisal.

��$��$��$#�� management and soft skills development amongeach position level as one of the job enhancementfactors, the following personnel development effortshave been made:

^ ��}#�� $��#�� K �� personnel such as Occupational Health and Safety �~+|��`#� ��|��`�|�^ ��&� ��$��$#�� #�� practical communicative English course provided to marketing and internal audit personnel, and

Total Productivity Management (TPM) training ��&��`��`��

^ ��&� ��$��$�� such as communicative skills, supervisory skills and time management skills

^ ��&� ��$ ��#��Z��Program

^ ��}#��

tools and techniques required for providing effective coaching sessions to their subordinates.

^ |�� !�� K� ��$��%��$�� high-potential people, in preparation for their

future roles as TUF executives.

In addition to the implementation of the above-mentioned initiatives, our business decisions take account of the welfare of all employees. We are committed to fair employment practices regardless of races and positions. We are also committed to observing all applicable labor and employment laws wherever in the world we operate. Among our core HR policies is full compliance with those laws that pertain to the prohibition of child and forced labor.

Meanwhile, we have continuously made every effort to ensure that all our production sites are safe workplaces for our employees and those of our business alliances. We seek to embed safety awareness in our corporate culture through organization-wide implementation of occupational safety strategies and initiatives with vigor. With steady progress made on our accident and incident control performance, we were presented with The Outstanding Industrial Establishment Award for the year 2011 in recognition of our occupational health, safety and environmental achievements. Furthermore, our particular attention in this regard has all along included the vital issue of good health and health maintenance among our employees.

� �� 1. Annual health checkup2. Medical diagnosis to identify health risk factors 3. Randomized urine/blood tests to detect

habitual substance uses

� �� 1. New Year’s Party2. Songkran Festival3. Harmony-promoting activity

� �� 1. TUF Music Event2. Company-sponsored Annual Trip Package 3. Annual Mini-Half Marathon

Propelling Society and Community

We are well placed to play our part in propelling society on a path of sustainable development ��#��# ��K#��#K ��K��projects, supporting participatory community development programs, as well as encouraging our employees to play an active role in social development.

!"#$%&'�� (�� &� �� '�� )��#��(�� *+�� , ��(��&�� (�� *-

�� .��)�� /��Natural Habitat Rehabilitation for Mangroves: Regaining Coastal Ecosystem Balance through 1,000,000 Saplings

The project is a collaboration between us and the Mangrove Forest Resources Development Station 6 in Phetchaburi Province. Under the project, weare to support the cultivation of 1,000,000 saplings of mangrove species - red mangrove, true mangroveand Indian mangrove – through the entire 5-yearperiod of the project. The objective of the project isto promote the conservation and restoration of mangrove forests along the coast of Thailand. In addition, we organize two mangrove forest reforestation trips per year for interested employeesand business partners with the aim of increasing the country’s green area.

0 �� '�� 1�� This is our annual philanthropic program with the aim of promoting employee participation in nominating community development projects. This program cultivates a sense of community pride and develops and maintains ties between the workers and their hometowns. We strongly believe that sustainable community development can only be achieved through fostering a powerful��$��#��*With this logic in mind, we have embarked on the mission of growing such awareness among �#�� &��*��$��#��$��program is to encourage our employees to think about community services and social contribution �� K�� #��*��outcome of their choices could lead to mutual concept among all other community members while also being viewed as a positive role model for them to follow, thereby providing a healthy environment for building a further sense of commonpurpose.

All our employees are invited to submit proposals�$��'��# �K��communities. Their community development proposals may vary greatly from public infrastructureto educational facility and to luncheon project,to name a handful. As a rule, all well-thought-out proposals are submitted to program committee for review and judgment in accordance with selection criteria.

Besides projects already mentioned, we have continuously undertaken a number of other public-benefit projects, including:

^ ��#K ��&��emergency relief assistance to victims;

^ @ ��&�� K�� the Thai Red Cross Society; and ^ ��K#��&��#K ��

National Children’s Day

� ��2�� At TUF, we are very conscious of our roles in relation to the communities where we operate. Through the Community Relations Program, our representatives are dispatched on a quarterly basis to meet regularly with residents of neighboring communities to discuss issues of their environmental concerns and receive their feedback and suggestions of our environmental performance. The gathered information is subsequently reviewed and used as a basis to develop bilateral proactive and corrective actions. We establish a Community Relations Steering Group to oversee and follow up the implementation of those actions. We promote community involvement in our implementationof environmental improvement measures, as inthe case of noise pollution management, amongothers. Today, we no longer receive any complaintabout noise pollution from surrounding communitiesas a consequence of our well-maintained noise levelof not over 70 dB –A in accordance with statutory standard criteria.



��<|��~<�Z~~�AND COMPETITION

Thai seafood industry in 2011 still saw continued growth despite persisting global economic ��#��}#��$�� $2010. The main European economies, in particular, �#$$�� #��*�� crisis became a cause for concern for potential adverse impacts on Thai food export sector. The concerns were based on the fact that European consumption and its market potential make up a sizeable proportion of Thai exports, thus perennially being one of Thailand’s major export destinations. Nevertheless, as food commodities are among K�� &�� did not have any adverse impacts on Thai food exports. Meanwhile, Thailand experienced one �$��"��havoc on different regions throughout the country,as well as many local industrial operators. Although food industry was not directly affected K��"�� &��$�� packaging materials to manufacturing sites was interrupted thanks to paralyzed logistics services. Such this natural disaster has been considered as an additional business risk factor and prompted domestic industrial players to establish their site emergency preparedness plans to better copein the future.

Incidents and crises during the course of the year inevitably created considerably challenging tradingconditions for Thai seafood exporters, who otherwise managed to deal with the unfavorable situations successfully. This was demonstrably evidentfrom a robust year-on-year growth of 16.9% in export value of canned and processed seafood ��#��@��\��\�� *�� products, canned seafood reported total annual export volume of 591,609 metric tons, a slight

decline by 0.8% from 2010, and total annual export value of Bt70,537 million, representing a 14.5% year-on-year growth. In contrast to the canned seafood category, processed seafood witnessed annual export growth in both volume and value at 405,160 metric tons and Bt81,513 million, accounting for 2.3% and 19% year-on-year growth respectively. The statistics demonstrated continued development of Thai seafood exports. Although weaker performance was observed among certain Thai seafood items during the last quarter of the year due primarily to the impacts of ��"��pressure on the overall performance of Thai seafood industry during 2011 given demonstrable whole-year growth figures. Nevertheless, in consideration of all the uncertainties during the course of the year, Thai seafood exporters will need to keep close monitoring of market situations to get themselves prepared for any unexpected challenges and to maintain their competitiveness in global marketplace. FROZEN SEAFOOD PRODUCTSFrozen Tuna Loin

The volume of Thai frozen tuna loin exports during 2011 reached 40,908 metric tons on export value of Bt6,124 million. When compared to their 2010 ��#��#��%��%��decline in both volume and value by 23.2% and 2.1%, respectively. The US was the largest market for Thai frozen tuna loin exports with 21,877 metric tons in volume and Bt3,380 million in value and carved 55.2% share of the total export value. The second largest export market for Thai frozen tuna loin was Italy with export value of Bt617 million, followed respectively by Israel with export value of Bt586 million, accounting for 10% and 9.6% of the total export value, respectively.



Frozen and Value-added Shrimp Thai frozen and value-added shrimp export during 2011 reported lower export volume by 7.7% to 394,880 metric tons against 427,925 metric tons recorded in 2010. In contrast to export volume, the export value of Thai frozen and value-added shrimp products expanded by 9.4% year-on-year to Bt110,643 million. ��#�� &��#� ��under this category revealed a decline in both volume and value of frozen shrimp exports by 17% and 1%, respectively. In contrast, value-added shrimp exports registered year-on-year growth in both volume and value to 178,662 metric tons and Bt54,606 million, up by 7.9% and 25.6%, respectively.

The statistical export breakdown by product suggestedthat Thai seafood exporters have increasingly placed more emphasis on value-added shrimp than frozen shrimp.

��<|��for Thai frozen and value-added shrimp products, with export value reaching Bt51,316 million, or equivalent to 46% of the total export value. Ran second was Japan, and followed respectively by ��<��?��?��5% share of the total export value, respectively.

Frozen and Value-added Cephalopod

Annual export statistics indicated that the volume of Thai frozen and value-added cephalopod exports during 2011 shrank by 8.5% year-on-year to 64,790 metric tons. In contrast, the export value increased by 9.6% year-on-year to Bt12,859 million. Japan was the largest market for Thai frozen and value-added cephalopod exports with export value hitting Bt5,722 million, followed by Italy (Bt3,362 million)

and the US (Bt835 million). The three major export markets represented 45%, 26% and 7% of the total export value, respectively.

CANNED SEAFOOD PRODUCTSCanned Tuna

Thai canned tuna export during 2011 saw ayear-on-year value expansion by 18% to Bt61,462 million. On the contrary, the whole year export volume dropped slightly by 0.6% year-on-year to 518,279 metric tons against 521,205 metric tons registered in 2010. Tuna raw material prices were highly volatile during the year with whole-year average price at record-breaking level of USD1,766 per metric ton.

Top export destination for Thai canned tuna products was the US, whose imports from Thailand amounted in volume to 99,314 metric tons and in value to Bt12,207 million. The second largest market was Australia with export volume of 42,279 metric tons and export value of Bt6,081 million. Japan was ranked third with 29,941 metric tons in export volume and Bt4,749 million in export value. Canned Shrimp

Thailand’s 2011 canned shrimp export was less vibrant both in terms of volume and value when ��#��*�� %��export volume in 2011 was recorded at 12,131 metric tons, or a 38% decline from 19,438 metric tons in 2010. In line with the decline in export volume, the whole-year export value of Thai canned shrimp products in 2011 stood at Bt3,193 million, representing a 27% drop from Bt4,349 �� *��<|��



the number-one export market for canned shrimp products from Thailand with 53% share of the total export value. Japan was the second largest market with 12% share and Canada was ranked third with 11% share.

Canned Crab Meat

The 2011 export statistics indicated that Thai canned crab meat export was lower both in terms of volume and value from a year ago. The 2011 ��#��Q��\��!��&� #��and Bt1,475 million in export value, posting ayear-on-year decline of 22% and 6%, respectively. As much as 82% of Thai canned crab meat exports were shipped to the US, the largest market in 2011. Other important export markets by ranking were France, Canada and Japan, with a share of 5%, 3% and 2% of the total export value, respectively.

Canned Pet Food

Thai canned pet food export during 2011 showed an upward trend in both volume and value from a year ago. The whole-year export volume rose by 11% year-on-year to 305,038 metric tons and the whole-year export value grew by 9% year-on-year to Bt21,457 million. Japan continued to remain the top export destination for Thai canned pet food products with 121,836 metric tons in export volume, or 40% of the total export volume, and with Bt8,433 million in export value, representing 39% of the total export value. By ranking, the US and Italy were the other important export markets, sharing Bt3,406 million and Bt2,055 million, or 16% and 10% of the total export value, respectively.

INDUSTRY TRENDS

The overall situation of Thai seafood export for 2011 continued to see more vibrant expansion. Annual sales achieved value growth both in US dollar andThai baht terms. Canned and value-added seafoodregistered year-on-year growth rate of 22% and 17%, respectively. Annual export statistics also indicated that value-added shrimp products delivered exceptionally strong expansion in comparison with other items within shrimp product range. �� #�%�� K��US dollar and Thai baht terms by 31% and 26%, ��&� �*��#��"��among Thai seafood exporters to add more value to their products.

Thai seafood industry this year was dominated by �� "��*�#��#��$the year, tuna prices soared to USD2,000 per metric ton with annual average ceiling of USD1,766 per metric ton, or jumping by 37% year-on-year. Such these unfavorable price movements drove manufacturing costs up and eventually forced Thai seafood exporters to adjust their selling prices upwards accordingly. With regard to shrimp, prices were not as much volatile as the year before. Decline in global shrimp farming yields was seen as direct consequence of natural disaster among major shrimp-producing countries such as �� *��#� ��yields for 2011 dropped by 8% year-on-year to 510,000 metric tons. Albeit weaker shrimp harvest worldwide this year, world market prices remained satisfactorily stable due to sustainably strong demand among consumers.



We anticipate that Thai seafood industry outlook for 2012 should continue to expand on the back of a few supporting reasons. Firstly, demand for seafood has remained sustainably strong around the world. Secondly, seafood exports from Thailand have enjoyed good global reputation and recognition because of its proven track records of high quality and food safety standard compliance. Thirdly, being a good source of protein with relatively affordable prices when compared to other protein food items, seafood products such as canned tuna should be in constant demand and therefore should not encumber Thai seafood export performance in 2012. Despite these highly likely positive scenarios, year 2012 will be dominated by a host of challenges that call for strong attention and close monitoring among Thai seafood exporters. Among those challenges lying ahead to overcome include the volatile nature of raw material prices, oil prices and currency exchange rates. In addition, the statutory increase in minimum daily wage to Bt300, to be effective around April 2012, is expected to drive up labor cost by 40%. Besides, there are ongoing challenges from non-tariff trade barriers (NTBs) that are being deployed or to be imposed by importing nations in the future.

Among them are the European Union (EU)’s Generalized Preference of System (GSP) and the US shrimp antidumping duty (AD), including the FDA Food Safety Modernization Act (FSMA), which has been introduced by the US since early 2011. These risk factors require Thai seafood exporters to monitor their business environment closely and also to position themselves at their advantages that would allow most effective responses to any emerging or unforeseen challenges.

We have been strictly adhering to prudential business practices throughout the entire organization and closely monitoring the macro and market situations on continued basis in order to ensure that any potential impacts of key business risks are kept to the minimal. Besides, we seek to achieve continued developments through the entire organization. The efforts extend from production process improvement, marketing strategy revamp, to continual innovative product developments, inventory management and to raw material sourcing. All of these proactive measures are for the sole purpose of building our potential for $#��K �� #��#�competitiveness in the global marketplace.

Sources:^ �#��^ @#��#�$��# �#�� ~$��$��# �#�� ^ ��$��^ �� =��#��

MARKET SHARE OF THAI UNION GROUP AMONG THAI EXPORTERS

CANNED SARDINE

FROZEN TUNA LOIN AND CANNED TUNA

CANNEDPET FOOD

FROZEN SHRIMP

FROZEN CEPHALOPOD



=��~�|=~��|��CONSIDERATIONSBUSINESS RISKS

Trade Barriers�� [��$��#�� to become one of the world’s leading players, both in terms of production potential and competitiveness as well as acceptance by countries throughout the world in its recognized food safety and world-class quality. These factors in combination have placed Thailand on a strategic position to gain strong reputation and unwavering trust in global marketplace as one of the world’s top seafood processing and exporting countries. Seafood exports bring tremendous amount of export revenues into the Thai economy each ��&��$��[�economic growth. However, this remarkable growth is not without obstacles. Thailand has been continuously facing trade barriers erected by its trade partners. Such barriers include both tariff and non-tariff measures, the latter of which have particularly become more prevalent and ��*�� K�further incorporating sensitive topics into their more rigid international trade standards, creating more hurdles for Thai seafood operators to overcome. Under this continually unfavorable circumstance, close monitoring of situations and keeping abreast of new conditional updates and developments are all a must among Thai seafood operators to ensure their timely adoption of appropriate measures in order to stay compliant with any upcoming non-tariff barriers.

The Company’s Policy and Actions TakenWe have been closely monitoring all situations that may affect our exports and have undertaken measures to adapt to new regulations and rapidly changing market trends. As a result of our policy to always maintain our status as a good corporate citizen in the global seafood market, TUF and its

Risk Factors and Other Related

��#��&��#��$��trade partners and customers, both within Thailand and throughout the world. We continuously emphasize sustainable development in all aspects of our operations under our internally Sustainability at TUF encompasses protection of natural resources and the environment through our responsible environmental management, fair and equitable treatment of our workers, and meaningful long-term contributions to sustainable social development of the surrounding communities as well as on the national and international levels. Marketing and investment policies are also developed and implemented with the aim to broaden our markets to cover all parts of the world and to diversify our product portfolio, with strong emphasis on value added products, in order to better serve our customers’ needs. Through a series of strategic investments, we now have or are constructing manufacturing facilities in 10 countries, including �� #��Guinea, the United States, France, Portugal, Ghana and Seychelles with Thailand as the main production base. Such diverse production locations enable us to successfully take advantage of, or manage risks of, the country of origin requirement that is normally stipulated in preferential trade measures or trade barriers.

PRODUCTION RISKS

Raw Material Price and ProcurementThe cost of raw materials accounts for about 70 to 80 percent of our overall production cost. Raw material procurement is therefore a major driver of the Company’s costs and profits. Prices of ��$�#�� #��#��"#��#��in accordance with world market situations. Therefore, it is our policy to set our prices based on the prevailing market trend which could occasionally result in cost differential between raw



material inventory and products sold owing to their variances in purchase costs and selling prices. ��"#��#�� K��"#�� factors that have constant impacts on several��#��$�� packaging materials, seasoning and other ingredients, which have also varied accordingly.

The Company’s Policy and Actions Taken

TunaTo minimize the cost difference between the time �$�� #��products are sold, and to allow the shortest period �$&��K ��#�� $��#��and purchase of tuna are made between 30-45 days in advance, while maintaining inventory turnover at an appropriate level.

ShrimpWe source our shrimp directly from shrimp farmers in various farming regions throughout the country ��#��#$��"��$�#�� *�� enables us to match costs and selling prices to �� $��shrimp price.

CephalopodWith continually growing demand for cephalopod raw materials, we pursue both local and overseas procurement, which in turn protects us from the risk of the raw material shortage. We have responded effectively to price increases by maximizing production�$��&� ��&��$� ��of value-added products, a strategy that has � ��#��K ��in this segment.

Energy PriceEnergy is one of our key inputs, and we have in recent years adapted our production process to minimize potential losses and lower our production costs in other areas. We will continue to seek ways to improve our management system and raise �#��#��$��K��&�� $"#��#��*

Human ResourcesThe seafood industry is a labor-intensive industry that also requires a certain level of industry-�� *�� K��&�industries, workers in the seafood industry must undergo trainings to develop their production

skills to match the types and characteristics of the ��#��*=#��in the industry may not be as attractive compared to other sectors, such as textiles or electronics, in terms of odor and temperature. In a seafood ��#$��#��$�� $��unavoidable, and in some areas, temperature �#��K�� &� *��$��the industry constantly faces a high turnover and worker shortages. In addition, the statutory increase in minimum daily wage to Bt300, to be effective on April 2012, is expected to drive up labor cost.

The Company’s Policy and Actions TakenRecognizing that our workers, at every level, are ��#��K� ��#��we have focused on making our company an attractive place to work. We regularly review our compensation package to ensure fairness and ��}#��&��$�� $��K��*�� emphasize equitable treatment of our workers regardless of position, race, and gender as well as provide all workers with opportunities to grow personally and in their career. Regarding to the increasing in minimum daily wage, we are well prepared for this situation, the solution of making use of machine-driven automation to replace certain portion of indirect or support daily workers (who are mostly involved in material handling and record-keeping activities) would help address both problems at the same time. A smaller labor pool would allow us to stabilize our costs despite the wage hike. Moreover, our intention to move some of the indirect / support daily workers into the direct production sections, such as cleaning and cutting, should allow us to increase our production capacity as well as productivity which would otherwise be not possible without enough labor. After all, with the combination of automation and converting support workers into direct production workers should lead to cost savings, allowing us to stay competitive regardless of any potential minimum daily wage hike pursued by the new Thai government.

NATURAL DISASTER RISKS

Dramatic changes in environmental and climatic conditions worldwide have been evident through the past several years and unprecedentedly resulted in unusually frequent occurrence of severe natural disasters in each region across the globe. Among those catastrophic events include a series of massive



earthquakes in different parts of the world such asChile, New Zealand and Japan, resulting in enormous ��$ �$�� on trading and economy.

= ��K��$��}#��natural disaster in Thailand. In particular, the recent "��#�� #� ��$��$��year 2011 was reported the worst of all in the ��#��[�"��*��$$��$�� including Bangkok and its peripheral areas, suffered extensive damages and losses. There were a couple�$��'��K#��$��"��crisis this year. Firstly, the country had been hit bya series of storms one after another with short intervals in between. Secondly, the water reserve in some major reservoirs and dams at the time had nearly exceeded their safe storage levels, with some no longer able to receive incoming water "��$��K��$�� to natural waterways to prevent disastrous collapse of the structures. These two factors in combination ��"��[��wreaked havoc on the country’s economy. The damages to national economy as consequence of ��"��#�*�#��K� ��electronics were among a few concrete samples of many affected industries within Thai manufacturing sector. In the mean time, agricultural sector was also faced with direct impacts thanks to extensive damages to crop-producing and farming areasin many parts of the country. As with the manufacturing and agricultural sectors, labor sector was not an exception when plant closures inevitably became the last resort among business ��#��*��"��Thai industrial operators to develop and have in place their site emergency preparedness programs with particular emphasis on prevention of future impacts of natural disasters. The Company’s Policy and Actions TakenWe have had in place a set of well-planned preventive measures to be deployed in emergencies��$��# ��#��}#��$��#�� disaster. It is intended that all these available established measures will help cushion the severity of the impacts of future natural disaster threats. The measures are developed into corporate emergencypreparedness plan, which encompasses various aspects of emergency during natural disaster period, including training session, emergency response rehearsal and evacuation drill. The

purpose of the emergency preparedness plan is to equip all employees with necessary survival skills and allow them to learn how to react properly and effectively with minimum panic whenever natural disaster strikes. In addition, we have also developed two-level emergency response plan as detailed below: ^ ��_��$��

any occurrence of natural disaster emergency outside the area where our business operates; ��&�� &� �� to our employee welfare as well as business

operations; and within handling capacity of �$�� #��#�

team. Required preparedness during minor emergency consists of close monitoring of latest situation updates, direct report of any situation �� &��further report to Emergency Director and response

actions by emergency team in accordance with pre-determined procedures.

^ ��'��_��'��$��

any occurrence of natural disaster emergency ��&�� &� �� our employee welfare, business operations, surrounding communities as well as overall company environment; and beyond handling ��$�$�� #��rescue team. Required preparedness during major emergency consists of immediate evacuation and strict adherence to evacuation

plan to proceed towards pre-determined escape routes to safe areas.

Unlike many other industrial establishments, our manufacturing facilities and business operations remained unaffected and safe from any serious ��&��$��"��*Although our processing plant and those of our subsidiaries (Thai Union Manufacturing and��%�� '��$��"��$��"��&��we successfully managed to survive. This was an outcome of well-coordinated efforts and keen cooperation among Samut Sakhon provincial �$�� #�� to their proactive measures taken both before and throughout the crisis period. Despite being �&��#� ��$�$��$��"�� #��$��# ��*��#��K ��#��

deployed to best protect our plant and machineries �� "��&��*��also closely monitored the situations and stayed abreast of the latest updates on water levels, as publicized through concerned agencies, on a daily basis. Responsible personnel were dispatched to patrol the areas surrounding plant compound forreal-time and on-site consideration of the situations.Meeting session of our Flood Steering Committee was arranged on a daily basis to discuss and evaluate the latest situations and potential risk exposure. In parallel with the preparations to safeguard our physical plant assets from the "�� "�� $��#��to help our affected employees at our best.

ADMINISTRATIVE AND MANAGEMENT RISKS

Operational SystemOur strategy of investment expansion has currently resulted in 24 subsidiaries and associated companies with each being active in different business areas. Such diverse collection of business operations, �� K�� $��$��$��K#��"#��#��&��#��poses a risk associated with ensuring that all entities operate under harmonized policies aim at generating satisfactory returns on investments.

The Company’s Policy and Actions TakenTUF places great emphasis on business administrationand operational management. We have developedcomprehensive corporate policies providing strategic directions to our subsidiaries and associated companies. Our management teams possess extensive experiences and expertisedirectly relevant to the business that they manage.While our corporate executives provide strategic guidance and policies, management teams basedat the subsidiaries and associated companies are given full authority to run the operations.

Our investments in subsidiaries usually feature agreements of minority ownership by relevant management teams for the purpose of ensuring appropriate incentives for running the business. As the parent company, TUF monitors and controls operations in the area of annual business plans, business expansion, and further investments to maintain harmony among all subsidiaries. As part of its monitoring and auditing responsibility, our Internal Audit Department ensures that the highest �$��#�[��&�� operations are preserved and that full compliance with the Board’s policy is achieved.

FINANCIAL RISK

Volatility of Foreign Exchange RatesIn recent years, foreign exchange rates have been relatively volatile and consequently impacted our business, given the fact that over 90% of revenues from Thailand-based operations of Thai Union Group is generated from shipping products to overseas markets, such as the US, the EU, and Japan. Because of this, a majority of our revenues are recognized in foreign currencies, mostly in U.S. �� *��$��#��&��#��are subject to the risk of foreign exchange volatility.

The Company’s Policy and Actions TakenWe have maintained a close watch on movements of currency exchange rates as well as considered all appropriate measures in managing our exposure to exchange rate risks. Our revenue and expense streams have provided an effective natural hedge, as we import most of our raw materials and export most of our products, using US dollar as the transactional currency. Other measures taken include the utilization of forward contracts and currency options to minimize our �!��#��#��"#��#�� $��#��$�#�� #��*

Interest Rate RisksGlobalization has connected economies in all parts of the world together, allowing rapid movement of investment funds across borders. This implies a world where interest rates can change very quickly, requiring business operators ��$# �� #�� address risks associated with shifting interest rates.

The Company’s Policy and Actions TakenAs in the case of currency exchange rate situations, we have continuously monitored interest rate movement. Thai Union Group as a whole has been carefully maintaining an optimal debt structure given interest rate situations and trends, with ��$�!��"��%��loans. The debt structure can be also adjusted to match changing circumstances via various �� #�� #��|��and Cross Currency Swap.

OTHER RELATED FACTORS FOR INVESTMENT CONSIDERATION

LawsuitsTUF and its subsidiaries are not involved in any lawsuit affecting their assets by more than 5% of shareholders’ equity.



CORPORATE�~��The Board of Directors of Thai Union Frozen Products PCL.perceives the importance of good corporate governance within the Company in order to promote sustainable operational growth and to gain public acceptance of the Company both locally and internationally. Being guided by this perception, the Board is determined to adhere to good corporate governance principles and therefore embraces such principles directed by the Stock Exchange of Thailand, in conjunction with honesty, transparency, responsibility, business ��#�� &� �$��standards in accordance with the Code of BestPractices of listed company. This principle adoption isintended to enhance the Company’s competitiveness,��#�� $#��K��the Company’s operations among shareholders, investors and all stakeholders, thereby creating effective, prosperous and sustainable growth in the Company’s business, as well as adding value to shareholders while also taking into account all stakeholders.

Following the perception of the importance of good corporate governance above mentioned, the Board therefore promotes and supports the practice of good corporate governance principles directed by the Stock Exchange of Thailand through devising its own policy centered on 5 pillars as set forth below:

1. Right of Shareholders2. Equitable Treatment of Shareholders3. Roles of Stakeholders4. Information Disclosure and Transparency5. Board of Directors’ Responsibilities

1. Right of Shareholders

The Company follows good corporate governanceprinciples and sets clear business policy perceiving equitable treatment of shareholders and stakeholders.This can be evident from the fact that the Board and the management cooperate their efforts to�$�� &��$��#��careful administration for the best interests of the Company and shareholders. Operations are transparent and can be verified. Information

Report on the Practice of Good

disclosure is made in the complete, accurate, punctual, and equitable manner to all parties concerned. The Company has appropriate controlling system and risk management adequatefor facilitating well-informed decision making. The Company adheres to business ethics as a main pillar to prevent damages to all stakeholders. The Board oversees the Company’s disclosure of all material information to ensure its accuracy, fairness and timeliness in order to secure investor ��*

The Company’s information disclosures to shareholdersare made on the basis of equity regardless of sharevolume owned, individuals or juristic person and being local or overseas. In each shareholders’ meeting, the Company places emphasis on, andrespects, the right of shareholders by strictly carryingout the meeting pursuant to the Public Limited Companies Act. This can be evident from the Company’s following arrangements for the hosting of the Annual General Meeting of Shareholders (AGM) on April 25, 2011.

Meeting Preparation Procedure and Delivery of Meeting Invitation

^ ��@��K�� to propose name list of potential director candidates and meeting agenda for 2011 Annual General Meeting of Shareholders. Company secretary was assigned to publicize such information electronically through the Stock Exchange of Thailand communication systems and forwarded to corporate website 32 days prior to the date of meeting invitation delivery in order to allocate appropriate time for their proposals.

^ ��#K ��]��&��along with sufficiently-detailed relevant documentation and opinions of the Board given in each agenda (except for annual report) on www.thaiuniongroup.com since March 25, 2011 and such information dissemination was available for 31 days prior

to the date of AGM.

^ ��#��]�� |��#��Depository Co., Ltd., in its capacity as registrar,

to deliver to shareholders meeting invitation



along with sufficiently-detailed relevant documentation, opinions of the Board given in each agenda, proxy form for convenience of

shareholder who is unable to attend the meeting and wishes to authorize an appropriate person

or any independent director to act as proxy and vote on his/her behalf, and including annual report CD-ROM 21 days prior to the date of AGM.

^ ��#K ��]��&��Post Today newspapers (in Thai) and Bangkok Post (in English) for 3 consecutive days and 7 days

prior to the date of meeting to reassure shareholder attendance on the scheduled meeting date

and time.

On-site Meeting Procedure

^ ��$��between 8:00 a.m. - 10:00 a.m. of April 25, 2011 at the well-known Dusit Thani Bangkok Hotel to provide convenient access to shareholders. In the past year, there were totally 425 shareholders

in attendance with aggregate share volume of 690,040,101 units, equivalent to 72.16% of the total issued and paid-up shares.

^ ��$��@��#� General Meeting of Shareholders, in which there were 13 board members, including the Chairman, in attendance out of the whole board of 15 members. The board members in attendance comprised Chairman, President,

Managing Director, Financial Executives and Audit Committee members, who are independent directors. As some Board members are

representatives of overseas shareholders, not all Board members were able to attend the meeting. However, without their presence, all such members could express their opinions about the issues through the agendas being directly delivered to them prior to the meeting.

^ ��$��secretary to clearly explain vote-casting and vote-counting procedures for each agenda to eligible shareholders. No additional agenda may be added to meeting session unless it is proposed in advance. The meeting was conducted in the manner that allowed and encouraged all shareholders to raise questions, express opinions and give suggestions about

the issues through the entire meeting session. Furthermore, in each meeting session, Company’s auditors were required to participate in vote-counting procedure as witnesses as well

as to answer questions raised.

^ ��&�&��Company made available ballots to facilitate exercise of voting right by shareholders in case

of their disapproval or abstention of any agenda being considered. Shareholders were allowed

to freely cast their votes for each director candidate on an individual basis, not on the

�� K��$��*��#��clearly announced onsite to make known to all attending shareholders immediately following the end of voting procedure in each agenda. The meeting session was also videotaped for further dissemination afterwards. Interested shareholders may request copy of the videotape

$��~$��$��*

Post-meeting Procedure

^ ��#K ��]�� #��$� agenda considered in 2011 Annual General Meeting of Shareholders on www.thaiuniongroup.com immediately on the date of meeting, except

for questions raised by shareholders and answers given during the meeting session. Complete

resolutions of the meeting were subsequently submitted through the Stock Exchange of

Thailand communication systems and forwarded to corporate website on May 9, 2011, or 14 days following the date of AGM.

Hosting of shareholders’ meeting with great emphasison equitable voting right has earned the Companyexcellent performance in the 2011 annual evaluationof Annual General Meeting of Shareholders conductedby Thai Investors Association.

2. Equitable Treatment of Shareholders

The Company perceives the importance of right of shareholders, is well aware of its responsibility to ensure equitable treatment of shareholders and therefore have put the following initiatives into action.

^ ��@��to prepare data and communicate to shareholders with regards to the Company’s invitation for shareholders to propose name list of potential director candidates and meeting agenda for consideration in 2011 Annual General Meeting of Shareholders. Such information was publicized electronically through the Stock Exchange of Thailand communication systems and forwarded to investor relations section on corporate website 32 days prior to the date of meeting invitation delivery in order to allocate appropriate time for their proposals. Although the Company

has provided shareholders with such these proposal opportunities since 2007, no proposals, however, were submitted for either director

candidates or meeting agenda during the past year. In addition, we do not have the additional agendas that did not notice.

^ ��@�� $�� 4 independent directors who were to act as proxies to vote in each meeting agenda on behalf of shareholders. In 2011 Annual General Meeting of Shareholders, there were



74 shareholders who authorized Mr. Sakdi ��$�#��to act as proxy and vote on his/her behalf, there were 18 shareholders who authorized ��*�� #�� K��$�#��Committee, 15 shareholders who authorized

Dr. Thamnoon Ananthothai, and 3 shareholders ��#��]��*��# $��purpose. All of them have been serving as independent directors and had earlier been proposed by the Board to act as proxies.

^ ��@��#�� #��

a correct and complete manner and to publicize the resolutions of all agenda considered in 2011 Annual General Meeting of Shareholders in investor relations section on www.thaiuniongroup.com immediately on the date of meeting, except

for questions raised by shareholders and answers given during the meeting session. Complete

resolutions of the meeting were subsequently submitted through the Stock Exchange of Thailand

communication systems and forwarded to corporate website within 14 days following

the date of meeting.

^ ��&��&��#��guard against the use of internal information for personal gains among the Board and management members by communicating their mandatory duties to report any changes made to the securities ownership of their own, those of their spouses and children below lawful

age to the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) pursuant to Section 59 of the Securities and Exchange Act B.E. 2535 on immediate basis and not later than 3 business days following the

date of purchase, sell, transfer or receipt of such securities. The Board or management members or

sections with access to, or acknowledgement of, internal information are not allowed to leak the information to outsiders or other unauthorized persons. In addition, no securities trading by

those management is allowed within the period of one month prior to the disclosure �$�� information to the public in order to prevent illegal use of internal information undisclosed to the public, which can affect the trading of the Company’s share on the Stock Exchange of Thailand. However, this prohibition is exempted

��$��#��"#��#��$��#�� trading prices driven naturally by overall stock

market mechanism, which encourages those management to trade their securities only in response to the stock market situations and in good faith. Furthermore, the Board and management members are made aware of legal punishment and penalty pursuant to the Securities and Exchange Act B.E. 2535 and relevant regulations.

^ ��@��oversee and follow up items with potential

��"��$��* Company secretary is responsible for preparing

quarterly summary report of those items and transactions and regularly publicizes such report at year-end in the Company’s annual report and Form 56-1. Furthermore, the Board

and management members, in any Board meeting, are required to comply with good

corporate governance policy by not participating in casting votes or giving opinions on any issues ��&��"��$��&��*

^ ��@�� $��$&��as disclosed to the Company by the Board and management members pursuant to ��*��*��*��\\��$�� &��}#��

Interests Disclosure by Listed Company Directors, Management Members and Connected Persons. With regards to this issue, the Section 89/14 of

the Securities and Exchange Act B.E. 2535, as subsequently amended under the authority of the Securities and Exchange Act (No. 4) B.E. 2551, stipulates that the Board and management

members must report to the Company their vested interests in the Company’s and its subsidiaries’ operations and management, or those of their connected persons. This requirement is aimed to furnish necessary information to the Company and to enable

the Company to comply with its own connected transaction handling procedures, which are established to prevent such items with potential ��"��$��$�� K �

siphoning of corporate funds and interests from the Company and its subsidiaries.

3. Roles of Stakeholders

The Company perceives the importance of right of all stakeholders and equitable treatment, as the Company foresees the importance of their support and the mutual cooperation between the Company and the various groups of stakeholders in that it can secure long-term business wealth, �� K� ��*��$��the Company adheres to equitable treatment of all stakeholders as well as ensures that effective administration of internal controls and compliance controls are established and maintained, as summarized below;

� &�� ! The Company is determined to �� $�� #��generating maximum long-term returns on investment with regular and sustainable strong operational performance and continued growth while simultaneously paying attention to accurate, complete and punctual disclosure

of material information to all shareholders in response to their unwavering trust and support given to the Company.



� �'@� [��! The Company treats employees equitably and fairly with appropriate remuneration comparable to remuneration paid in the same industry. Provision of fringe K��

but also exceeds relevant standard mandatory ��}#��*��K��&�� K �to employees are provident fund, annual health

��%#��$��]�� safe and sanitary workplace environment, employee recreational activities, and in-house physical workout facility to promote mutual recreation among employees. In addition, the annual mini-marathon run started since 2009 to encourage the employees to be committed to that goal. Although some employees will not do before, but they will try to practice successfully. Besides, much emphasis is also placed on long-term personnel development, ample learning and self-development opportunity for career advancement and improved life quality. In order to put these implementations in actions, the Company introduces organization-wide professional human resources management systems to maximize personnel potentiality and capability throughout the entire business group. Employees of all levels are encouraged to acquire new knowledge and skills through company-subsidized scholarship program along with seminar/training attendance at leading educational institutions. The Company provides employee manual, which equips employees with necessary information on �� $��K��*In addition, the Company has adopted a progress-oriented HR policy, driven by passionate belief in the utmost importance of human capital in business and the vital contribution it makes to the Company’s achievement of common goals. Therefore, the Company is committed to promoting greater professional capability among employees in parallel with continued improvements in their quality of life. Concerning learning and development paths made available to employees, appropriate practical learning programs are developed and applied to �� $��$�� within the Company until their retirement. In this regard, the Company has provided continued support to facilitate their greater learning experiences through time allocation, �� K#��as detailed below:

Human Capital Development: The Company’s human capital development is intended to encourage employees to perform respective $#��#��$��*��to achieve this goal, the Company develops, and capitalizes on, tailored individual development plan on a continued basis. The individual development plan is implemented in conjunction with systematic follow-up and performance evaluation conducted to

personnel training and development programs. Employees of all levels throughout the business ��K��$��]��%�� of knowledge-based approach. In addition,

the availability of Human Resource Information System (HRIS) within the Company not only

��$��#��$+�� management but also lowers operating costs.

Under this human capital management policy, all people across the business are engaged side by side in continual process of knowledge acquisition and management. Apart from these continued HR development efforts regardless of position levels of employees, the Company has been making regular investment in the area of organizational development since 2004 with the intention of further strengthening organizational performance. In this regard, the Company has ��}#� ��&��!��$$��disciplines to work in advisory capacity on the organizational and human capital development initiatives. Those professional advisory bodies include Accenture, CSR, INWIS and APM Group, among others. The Company’s human capital development policy is created in harmony with corporate visions and business strategies. Great emphasis is placed on development efforts in line with current personnel management system (PMS), which centers on competency development. Such competency is composed of 3 major elements; Core Competency, Management Competency and Functional Competency. Moreover, as the Company $��$��$#�� management and soft skills development among each position level as one of job enhancement factors, other personnel development efforts have also been made. These efforts encompass a wide range of personnel development aspects; for example,

prerequisite knowledge for industrial establishment personnel, development of ��$#�� &� ��$

management and soft skills, Leadership Program, Coaching Program, cross-functional rotation

system, inter-departmental personnel realignment system, trial function performance in superior position and Star Program.

^ Customer: The Company builds customer satisfaction and is responsible for customers through offering high-quality products in compliance with food safety, occupational health and environment standards, adhering to commitments given to customers, delivering goods and service on-time and at fair prices, making customers accurately well-informed of available goods and service, and also placing �#��#�� *The Company also sets aside special unit or

appoints persons in charge of handling



customer complaints and responding to those complaints without delay.

^ Supplier: The Company treats suppliers equitably and fairly in line with commercial conditions, is willingly open for their opinions and suggestions to forge stronger business relations and places much attention to their �� *

^ Creditor: The Company strictly adheres to loan agreement commitments given to respective

commercial banks so as to ensure the availability of proper and fair returns on their loan investments. Furthermore, the Company takes best efforts

��]��!��#�� "��$interests with creditors.

^ Competitor: The Company competes with competitor under fair commercial competition, with business ethics and in compliance with applicable legislation, thereby having no trading disputes with any competitor.

^ Corporate Social Responsibility: The Company perceives the corporate responsibility for the environment in the society and community and for natural resources conservation. In turning its nature-care spirit into actions, extensive corporate support is given to communities around the plant in terms of both safety and environment at its best. Among our corporate social responsibilities having been materialized include, for example, Mangrove Sapling Bank Program, which is aimed to safeguard intact mangrove areas as well as to regain natural fertility among deteriorated ones, and Hometown Community Development Program, which has been running on continued basis with clear objectives of promoting community strength and fostering pride in hometowns among employees. Other company-sponsored CSR initiatives in actions through the entire 2011 are further described under Sustainable Development heading on page 50-55 of this annual report.

4. Information Disclosure and Transparency

The Board devises policy on correct, complete ��#��#� �� #��$�� %�� $��#��channels of the Stock Exchange of Thailand and investor relations section on corporate website in both English and Thai languages so as to provide equitable and credible access opportunity for shareholders, investors and any persons interested in obtaining such information.

The Board stands behind the Company and its �#K��[�� $��[�

��#� ��*�� prepared in accordance with generally accepted accounting standards by applying appropriate accounting policy on a regular and carefully ��K��*�� $��#$�� *

The Board has provided report indicating its ��K� �� *Such report is exhibited alongside the auditor’s report in the Company’s annual report to ensure��#��$��$�� regularly following the generally accepted accounting standards and accounting policy.

The Board opinions that there is effective administrationof internal controls in the Company and that the ��K �$��#��$�� statements for period ending December 31, 2011,for which the Company’s auditors have conductedthe audits on a generally accepted auditing standards.

Remuneration for Directors and Management

^ ��#��$��$monthly retainer and meeting allowance comparable in average to the general practice in the industry, suitable for the scope and amount of assigned responsibilities, and

shareholders approved. Aside from the preceding meeting allowance, directors are not additionally remunerated from the Company’s subsidiaries.

^ �!��#��&��#��form of monthly retainer, meeting allowance, salary, provident fund matching contribution

and annual bonus based mainly on operational performance of the Company and work

performance of each director.

^ ��#��the form of salary, provident fund matching contribution and annual bonus based mainly on operational performance of the Company and work performance of each management member.

^ ��$��#�� the Company does not pay any other

remuneration to directors.

The Company considers the total amount of annual remuneration paid to the Board and management members is not high when compared to the average amount paid by other listed companies in the Stock Exchange of Thailand due to the Company’s attention to the best interests of shareholders. The remuneration paid to the Board and management members in the year 2011 in comparison with its counterparts in the year 2010 is set forth below:



15

5.55

-

-

5.55

15

3.85

-

-

3.85

12

-

72.83

3.58

76.41

13

-

52.70

3.68

56.38

Number (Person)

Meeting Allowance

Salary/Annual Bonus

Provident Fund Matching Contribution

Total

Unit : Million baht Board of Directors Board of DirectorsManagement Team

Management Team

20102011

The Board perceives the importance of correct, complete and transparent information disclosure toall shareholders, investors and all parties concernedon equitable treatment basis. Information on �� #��#��clearly and timely under relevant laws to provide target groups with correct understanding of the Company, thereby creating acceptance and investment sentiment among investors. The communication also allows the Company to gain insight into public view on the Company’s operations, which will be a part of considerations for future goal and strategy setting. Although the ��&�� <��$�� #��Company clearly assigns the management and other personnel to assist in communicating with the pubic as follows:

1. Mr. Thiraphong Chansiri President2. Mr. Wai Yat Paco Lee Finance Controller\� �� Tel: 0-2298-0024 Ext. 670-4

The past continued communications of operational��$�� %�� $��to stock analysts, investors and shareholders during 2010 were as follows:

^ ��!�� &��K��&��and stock analysts

^ Q�� $� ��#�� of operating results

^ �� &��K��

^ �� &��K��

^ ��&��&��$��

In addition, the Company provides the public with written information dissemination through corporate website http://www.thaiuniongroup.com and printed media as follows:

^ ��&�� &��$�� on operational results issued to investors and

stock analysts on a quarterly basis

^ �<=�%�� K�� newsletter delivered to shareholders and investors to regularly report new information and updates on the Company’s operations

^ ��#� ��$�� &��other interested general public

^ ��$��changes in need of public disclosure pursuant ��$��|��#��Stock Exchange Commission and the Stock Exchange of Thailand

Due to continued strong adherence to transparent information disclosure, Securities Analysts Associationgrants to the Company its annual SAA’s Picked Award for being the most-admired listed company’s top executive. The Company wins �� {=��Most-admired CEO Award, The Most-admired CFO Award, The grant of the awards is based on favorable votes cast by stock analysts and fund managers who identify the Company’s regular provision of complete and accurate in-depth information, including facilitating convenient availability and accessibility for interviews as their deciding factors to vote for the Company.



5. Board of Directors’ Responsibilities

The Board has set up policy, strategies, goals and budgeting in order to improve operational �$��&��K��$the Company. The Board follows up and ensures that the management’s work performance is in line with the work plans. The Board also clearly �� #��K� ��$��@��members, the management, staff and other parties concerned. The Board assigns the Audit Committee to oversee the Internal Audit Department, to evaluate the department’s work performance, to ensure an adequacy of internal controls and to promote appropriate risk management in order to preserve the best interests of the Company. In order to be equipped with further knowledge, capability and potentials as visionary directorship, �&��$��&��]��K�the Thai Institute of Directors Association (IOD); Mr. Thiraphong Chansiri, Mr. Rittirong Boonmechote, ��*��*��|�#��#��*|��*��*��# *=��Program (DAP); Mr. Chuan Tangchansiri, Pol.Maj.��*��#�� *�� #�� and Dr. Thamnoon Ananthothai independent director. For the Role of Chairman Program (RCP); ��*��*|��and Dr. Thamnoon Ananthothai. For the Role of Compensation Committee (RCC); Mr. Sakdi ��*��# ��&��the course. For the TLCA Executive Development Program; Mr. Rittirong Boonmechote and Mr. Chan |�#��#��*��*��Chairman of the Board, has also attended the Top Executive Program (Class 12) organized by the Capital Market Academy (CMA) during 2011.

Although some members of the Board and the management team are shareholders, the management policy is based mainly on the best interests of the Company, particularly decision ��#��&��"��$��&��interests. Those members are not eligible for voting $��#��#��"��$��in order to preserve independence in decision making. Furthermore, the information regarding such consideration is immediately disclosed to the public for transparency. The necessary information is also regularly disclosed in the Company’s annual report and Form 56-1.

The Company has created the code of ethics or statement of business conduct for all directors, management team and employees. The code serves as guidelines for their honest and equitable work operations and is made known to all directors,management team and employees to ensure their awareness, understanding and compliance.

The Company believes that such practice would improve the standards of good corporate ��&��&��the Company’s management as well as preserve justice and credibility in the capital market.

Board Composition

The Company’s Board of Directors comprises 15 members, namely; 7 executive directors, 2 directors from business partners (in support of business strategies), 1 director from Bondholders and 5 independent directors (3 of which also serve as Audit Committee members). Such proportion of the Board members allows effective considerations for the best interests of the Company. For the year 2011, there were totally 5 independent directors to be at one-third of the total number of Board members or the proportion accounts for 33.33%. �� ]�� ^��@��Director

��}#� ��$��}#� ��K��&��`#� ��K� ��$�#��Committee established by the Stock Exchange �$�� *��}#� ��serve as independent director must be able to perform duties to preserve the best interests of all �� }#��K ��#��"��of interests and be available in Board meetings to give independent and unbiased opinions and judgments.

An independent director must meet the following criteria:

1. Holds no more than 0.05% of total voting stocks of TUF including stocks held by connected persons of the independent director, as well as nominees.

2. Is not or has not ever been a major shareholder.3. Is not or has not ever been board member of

its parent company or an executive director, employee, staff, advisor who receives salary of

a controlling person of TUF, its parent company, its subsidiaries or its associated companies.4. Is not any professional advisor.5. Has not or has not had a business relationship

with the Company, its parent company, its subsidiaries, its associated companies or �'#��&��"��$interests, in the manner that may interfere with his independent judgment.

6. Does not represent the Company’s or its major shareholder’s board members or a shareholder who is related to the Company’s major shareholders.



��$��%��$��director is based on the Company’s Corporate Governance Policy established by the Board. Moreover, the Company’s criteria are stricter than “the criteria” required by the Stock Exchange of Thailand and the Securities Exchange Commission in term of stock holding ratio.

Although the title Chairman of the Board and Managing Director are not combined into one position, both represent the same group of major shareholders. However, consideration of important matters requires approval from directors from all groups of shareholders. Independent directors play important roles in giving opinions, balancing and verifying the power of management.

Board Meeting

The Board meeting is held regularly on a quarterly K��$� �� # ��agendas mutually agreed and decided by Chairman and President. Follow-up agenda is regularly included in the meeting. Company secretary sends meeting agendas and meeting invitation to the Board members not less than 12 days in advance to allocate appropriate time for data analysis. The agendas and meeting invitation may be sent to the Board members less than 12 days in advance in the case of urgency or preservation of the Company’s interests. Each meeting session lasts about 2 hours. There were totally 7 ordinary meeting sessions during the year 2011, with each director’s attendance summarized below:

1. Mr. Kraisorn Chansiri

2. Mr. Cheng Niruttinanon

3. Mr. Chuan Tangchansiri

4. Mr. Thiraphong Chansiri

5. Mr. Rittirong Boonmechote

6. Mr. Yasuo Goto

7. Mr. Kakiuchi Takehino

8. Mr. Ravinder Singh Grewal Sarbjit S

9. Mr. Chan Tin King

10. Mr. Chan Shue Chung

11. Mr. Sakdi Kiewkarnkha *

12. Pol.Maj.Gen. Pracha Anucrokdilok *

13. Mr. Kiti Pilunthanadiloke *

14. Dr. Thamnoon Ananthothai

15. Mr. Kirati Assakul

* Independent Director and Audit Committee

Times of Attendance/Total Sessions HeldDirectors

Prior Notice viaElectronics Media

6/7

5/7

7/7

7/7

6/7

1/7

1/7

7/7

7/7

7/7

7/7

7/7

7/7

7/7

6/7

Board Meeting (Times)

Unit: Time

Remarks:�* ��*��#��*��#��#��$�� *2. The company secretary is assigned to oversee and facilitate the Board meeting including documenting the meeting �� #�� &��K ��*

1/7

2/7

-

-

1/7

6/7

6/7

-

-

-

-

-

-

-

1/7



Subcommittee

The Board has appointed committees to assist in governing the Company. 1. Audit Committee

The Audit Committee has 3 years of tenure andis composed of 3 independent directors ��$�� accounting, organizational management and law disciplines. All independent directors neither hold any managerial positions, nor perform employee or consulting roles for the Company. TUF Audit Committee composition is as set forth below:

^ Mr. Sakdi Kiewkarnkha Chairman of Audit Committee^ Pol.Maj.Gen. Pracha Anucrokdilok Audit Committee^ Mr. Kiti Pilunthanadiloke Audit Committee

The Audit Committee met regularly in 14 meeting sessions during the year 2011 to implement assignedtasks and report performance results directly to the Board. The details of those implemented tasks are described under “Report of Audit Committee” heading on page 90 of this annual report.

2. Nomination Committee

The Nomination Committee includes a Chairman and two other members. Majority members must K��}#� ��required by the Securities and Exchange Commissionand the Stock Exchange of Thailand, and must havethe appropriate level and scope of experience andexpertise. TUF Nomination Committee composition is as set forth below:

^ Dr. Thamnoon Ananthothai Chairman of Nomination Committee^ Mr. Sakdi Kiewkarnkha Member of Nomination Committee^ Mr. Chan Tin King Member of Nomination Committee

3. Remuneration Committee

The Remuneration Committee includes a Chairman and two other members. Majority membersmust be independent directors possessing qualifications required by the Securities and Exchange Commission and the Stock Exchangeof Thailand, and must have the appropriatelevel and scope of experience and expertise.TUF Remuneration Committee compositionis as set forth below:

^ Mr. Kirati Assakul Chairman of Remuneration Committee^ Mr. Kiti Pilunthanadilok Member of Remuneration Committee^ Mr. Chan Tin King Member of Remuneration Committee

4. Risk Management Committee

The Risk management Committee includes a Chairman and four other members. Majority members must be independent directors ��}#� ��}#��K��Securities and Exchange Commission and the Stock Exchange of Thailand, and must have the appropriate level and scope of experience and expertise. TUF Risk Management Committee composition is as set forth below:

^ Dr. Thamnoon Ananthothai Chairman of Risk Management Committee^ Mr. Sakdi Kiewkarnkha Member of Risk Management Committee^ Pol.Maj.Gen Pracha Anucrokdilok Member of Risk Management Committee^ Mr. Thiraphong Chansiri Member of Risk Management Committee^ Mr. Chan Tin King Member of Risk Management Committee

Controlling System, Internal Audit and Risk Management

Controlling System and Internal Audit: The Company has its own Internal Audit Unit to regularly oversee internal controls system, to ��#��effectiveness of controlling system for greater ��K� ��$�� *��has also been set up to be in charge of reviewing ��$��$�� operations, compliance controls, risk management and extraordinary items are incorporated. The past internal audit reports indicated that the Company’s operations have been in line with �� $�� controls, risk assessment, risk management and prevention measures, compliance control and ��%�� operations.

Risk Management: The Risk Management Committee assigns the management team to regularly identify internal and external risk factors as well as to conduct assessment of their impacts on the Company’s business. Risk management team is diversely composed of management members and top executives who are directly responsible for the work areas where risk factors



��*��analyzes target risk factors in order to determine root causes and create countermeasures. The countermeasures are turned into practical guidance to either prevent or minimize potential impacts of those risks. In addition, the risk managementteam also follows up and ensures that taken corrective and preventive actions are in line with its directed countermeasures and reports the performance of countermeasure implementation to Audit Committee for subsequent address in Board meeting.

� �<�� ^��_�� ^��^�� '��

The Board determines handling procedures and ��#�� "��$interests and connected transactions. Much efforts and prudential considerations are independently taken in order to identify the appropriateness of target items under the scope of the Company’s Corporate Governance Policy and for the best interests of the Company. Those items with nature �$�� "��$��transactions are treated in the same manner as ��#��*`#�� #��report of those items and transactions is prepared and regularly publicized at year-end in the Company’sannual report and Form 56-1. Furthermore, the Company requires that the Board and management members report to the Company their vested interests in the Company’s and its subsidiaries’ operations and management, or those of their connected persons. This requirement is aimed to furnish necessary information to the Company and to enable the Company to comply with its own connected transaction handling procedures, which are established to prevent �#�� "��$��$��possible siphoning of corporate funds and interests from the Company and its subsidiaries.

The Company imposes preventive measures to guard against the use of internal information for personal gains among the Board and management members by communicating their mandatory duties to report any changes made to the securities ownership of their own, those of their spouses and children below lawful age to the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) pursuant to Section 59 of the Securities and Exchange ActB.E. 2535 on immediate basis and not later than3 business days following the date of purchase,sell, transfer or receipt of such securities. The Board or management members or sections with access to, or acknowledgement of, internal informationare not allowed to leak the information to the outsiders or other unauthorized persons. In addition, no securities trading by those management is allowed within the period of one month prior �� #��$�� other material information to the public in order to prevent illegal use of internal information undisclosed to the public, which can affect the trading of the Company’s share on the Stock Exchange of Thailand.



Board of Directors shall appoint a director, whose qualifications are deemed appropriate and qualified pursuant to the Public Companies Limited Act. Such appointment can be made only in the event that directorship either expires K�� $��#�� $� �&��in consequence of whatever causes during the �$��*��#K��#�� &�� K��$�� $��remaining tenure. One third of directors shall retire and new directors shall be elected in an annual general meeting of shareholders according to criteria and procedures set forth below:

1. Each shareholder has a right to vote in proportion to share volume owned; the principle of “one share, one vote” is applied.

2. Each shareholder is required to cast the entire vote owned in 1 for one or more candidates but can not split the vote into portions.

3. Candidates shall be entitled to directorship based on votes received. Candidate with ��!��#�&�� and followed by the other less voted, respectively. As a rule, the number of newly appointed directors must not exceed the number of new directors intended in that election.

Shareholders, if necessary, may pass resolutions to remove any director prior to statutory expiration of �$��&��$�#��$��'��votes of all shareholders present at a meeting is reached; and (b) the aggregate share volume owned by shareholders in (a) must be greater than half of the aggregate share volume owned by all shareholders present at the meeting. Such�� K��$$��&�� }#� ��of all board members and the management comply fully with Section 68 of the Public Companies Limited Act of 1992 and the SEC’s Regulation Governing the Rules, Conditions and Procedures for the Securities Offer and Permission dated May 18, 1992.

Board of Directors shall appoint any person ��$�� ]��}#� ��to act as independent director provided that the appointee is (a) not an employee or staff member receiving regular salary from the company or its subsidiaries; (b) independent of major dominant shareholders; (c) a shareholder of not more than 0.05% of the respective paid-up capital of the company; and (d) able to equally protect the interests of minority shareholders. Board of Directors shall consider and vote to appoint }#� ��$#��&� during meeting of shareholders.

APPOINTMENT OFDIRECTORS



Authority of Board of Directors

Board of Directors is authorized to manage thecompany in conformity with objectives, regulationsand shareholder resolutions with honesty, in good faith, and for the best interest of the company. Additionally, Board of Directors is responsible for setting corporate policy and direction as well as ensure that the management implement the �� $$��&� ��$�� *

Legal binding of the company requires a countersignof two directors in minimum and the seal of the ��$�!��*� ��&� ��@��$��may authorize certain directors to deal with such legal binding.

Board members are required to disclose any material interest in transactions or contracts which the company enters into and increase/decrease in share/debenture ownership in the company ��#K��#�� *@��$Directors is authorized to implement and direct the company’s activities except for the following issues, which require prior shareholder approval.

(1) Any issue that requires shareholder approval, pursuant to the law;

(2) Altering the company’s par value or registered capital;(3) Increase in the company’s Board members.(4) Any deed that yields Board of Directors’ gain

or loss or any deed that is obliged, by SET regulations, to have shareholder’s approval.

Authority of Executive Directors

(1) Implement the company’s policy, which obliges to laws, conditions, regulations, and rules of the Company, except for those issues subjected to the consent of shareholders.

(2) Set, propose and devise business policy and strategy to Board of Directors.

(3) Set business plan, business management authority, annual budget estimation, and budget allocation propose all these to Board

of Directors for review and approval, as well as follow business plan and strategy in

accordance with the corporate policy and business guidelines to committed to Board of Directors.

(4) Handle general business administration, set up organization and management structures to cover all aspects of personnel recruitment, training, employment, and employment termination.

�\� ��&��$�� }#�� institution, including giving collateral or

making any payment for normal business transactions, e.g. payment made for branch expansion investment or any regular business operations. The approval of the said credit facility must involve not over Bt200 million or equivalent in value, or the value as approved by Board of Directors. However, the credit facility value allowed for approval may be subject to change as deemed appropriate depending on the consideration of Board of Directors.

(6) Appoint or dismiss any employee holding position lower than managing director.

(7) Perform other duties as assigned by Board of Directors.

DIRECTORS ANDAUDIT COMMITTEE

Authority of Board of



In addition, the above-mentioned approval authorities must not be in nature of any business transactions that allow executive directors, or their authorized persons, to grant further approval $��&��"��$��&��$��$��"��$interest (according to the company’s articles of ��#��#��$��~$��$��|��!��Stock Exchange of Thailand) with the company or its subsidiaries except that the said approval is given for business transactions in accordance with corporate policy and criteria approved by Board of Directors, provided that executive directors with vested interest in such issue are not eligible for voting right. Board of Directors is authorized to make change to the authority of executive directors as deemed necessary or appropriate.

The following policies are under the consideration of managing director or Board of Directors:

(1) Financial Policy^ ��#� K#��&��K�@��$

Directors^ ��&��&��

by Board of Directors^ Z�� &��K��!��#��&�

Directors^ �� &��K�

President(2) Business and Marketing Policy; approved by

Managing Director(3) Management Policy

^ ~��]�� #��#��&��K�Executive Directors

^ �� &��K�Managing Director

^ ��# ��$��K��&��K��

(4) Employee Policy^ |� ��K��#��&��K�

Executive Directors^ ��#��$��&� #��

punishment or resignation of the management; approved by Managing Director

(5) Budgeted Purchase of Fixed Assets; approved by Managing Director

(6) Unbudgeted Purchase of Fixed Assets; approved by Board of Directors

In the case where Board of Directors authorizes another person to perform duties on behalf of Board of Directors regarding ordinary business conduct, such authorization is made following the resolution passed in Board of Directors’ �� #��and responsibility. Such authorization does not give authority to the said authorized person to approve issues that the said authorized person, or other persons may have vested interest ��"��$��$��company or its subsidiaries.

Authority of Audit Committee

The company requires that Audit Committee consist in minimum of 3 independent members with assigned duties in accordance with those ��# ��~$��$��|��!��Commission’s and the Stock Exchange of Thailand’s regulations. Audit Committee is �#$�� }#�� competent experience to review the fairness of ��[�� #��performing other duties in their capacity as Audit Committee, as summarized below:

(1) Perform the followings: (a) ensure that Board’s directions are fully followed; (b) maintain transparency; (c) provide Internal Audit Department with task guidelines; (d) review and approve annual internal audit plan submitted by Internal Audit Department; (e) manage �� "��$��$��#��$# compliance with applicable requirements, laws and regulations; and (g) give opinions and assess an adequacy of internal controls and report to Board of Directors.

�� &��$�� reports and provide guidelines for preparing such reports and relevant analysis prior to submission to Board of Directors.

(3) Devise policy on commercial best practice with emphases on prohibitions and responsibilities applied to staff.

(4) Coordinate with external parties, e.g. ��#��~$��$��|��Exchange Commission, the Stock Exchange of Thailand, for opinions on the company’s internal controls and review of relevant regulations.



01. Chansiri Family

02. Niruttinanon Family

03. Mitsubishi Corporation

04. Thai NVDR Co., Ltd.

05. Merrill Lynch International – GEF Account Client General

06. Boonmechote Family

07. Chase Nominees Limited 42

`{�& ��&��[��

09. Hogoromo Foods Corporation

10. Mr. Tin King Chan

241,519,925

75,823,508

72,446,900

38,283,856

29,840,000

26,326,500

26,316,700

22,607,819

18,900,000

18,553,327

25.25

7.93

7.58

4.00

3.12

2.75

2.75

2.36

1.98

1.94

Shareholder

Shares %

Remark: On the closing date of register book (August 30, 2011) and based on total number of shares of X\��Q�X�V�>��&� #��$@��*�Z��*�� K�� K �for exercising their right to vote in shareholder meeting 4.00% of total votes will be excluded.

STRUCTURE ANDMANAGEMENT

Shareholding







06. Mr. Yasuo Goto

07. Mr. Kakiuchi Takehiko




11. Mr. Sakdi Kiewkarnkha

12. Pol.Maj.Gen. Pracha Anucrokdilok

13. Mr. Kiti Pilunthanadiloke



JURISTIC PERSONS

Thai

Foreign

Total

PRIVATE INDIVIDUALS

Thai

Foreign

Total

GRAND TOTAL

2011

33.84

33.63

67.47

32.21

0.32

32.53

100.00

2010

31.76

34.64

66.40

32.22

1.38

33.60

100.00

122,282,016

60,716,605

9,400,000

82,422,782

13,100,000

-

-

18,553,327

2,878,182

-

-

6,310

-

-

21,000

309,380,222

122,282,016

61,417,272

9,400,000

78,602,082

13,100,000

-

N/A

18,553,327

2,978,182

-

-

6,310

22,845

-

21,000

306,383,034

Board of Directors

TOTAL

Types

As ofDecember 31, 2011

As ofDecember 31, 2010

% Holding

Remark: Shareholders of TUF that included spouse and children

Shareholding Structure as of December 30, 2011

Change in Shareholdings of The Board of Director as ofDecember 31, 2011 and 2010








6. Mr. Yasuo Goto

7. Mr. Kakiuchi Takehiko




11. Mr. Sakdi Kiewkarnkha

12. Pol.Maj.Gen. Pracha Anucrokdilok

13. Mr. Kiti Pilunthanadiloke



360,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

240,000

240,000

240,000

240,000

240,000

120,000

75,000

105,000

105,000

90,000

15,000

15,000

105,000

105,000

105,000

105,000

105,000

105,000

105,000

90,000

540,000

240,000

240,000

12 members of the management team 76.41 Million

Other Forms of Remuneration: None

Remuneration 2011 (Baht)

Board of Directors Monthly Retainer Meeting allowance AuditCommittee Fees

Remuneration 2011 (Baht) Salary, Bonus and Provident Fund

DIRECTORS ANDMANAGEMENT

Remuneration for


TRANSACTIONS OFLISTED COMPANY

Connected

CONNECTED TRANSACTION SUMMARY BY CATEGORY

Connected Company =��{Z�� Position Heldin TUF

No. of Shares Ownedin Connected

Company

1. Thai Union Feedmill Co., Ltd.

2. Thai Union Seafood Co., Ltd.

Mr. Rittirong Boonmechote

Mr. Prasert Boonmechote

(Mr. Rittirong’s father)

Mr. Wattana Boonmechote

(Mr. Rittirong’s brother)

Mr. Rittirong Boonmechote

Mr. Prasert Boonmechote




Director

Relative of Director


Director



3,539,985

1,500,000

1,050,000

2,649,900

2,000,000

600,000

11.8%

5.0%

3.5%

13.2%

10.0%

3.0%


The company has transactions with individuals / ��&��"��$��K��on the shareholding structure of the company,��# ��$�� $such transactions. Nevertheless, those transactions ��#��"��$��minority shareholders of the company.

With regards to business transactions with��&��"��$��the company has provided the details of such transactions in the Note (Item 10) for reference.

Further details related to those transactions, excluding those already provided in the Notes to the Financial Statements, are as follows:

Policy of Price Connected Transactions for year 2011

Market Price

Market Price

Commercial Transactions:

^ #��$�� $��<=�� #��$@�Q��>�X�X��*

^ #��$��$��<|�� #��$@��>�*

^ #��$��$��+�� #��$@��X��*

^ #��$�� $��<�� #��$@�X��VQ�*

^ |� ��$�� <=�� #��$@�\�V��X*

^ |� ��$�� <=�� #��$@�Q\��\�*

Supporting Commercial Transactions:

^ ��$��&�� K��&��<=

at the total amount of Bt780,000.

Asset or Service Transactions: -

Financial Assistance Transactions:

^ ��&��$��#��$��<=

at the total amount of Bt1,071

(No balance of loan as of December 31, 2011)


^ #��$�� $��<=�� #��$@�Q��>�\��Q*

^ |� ��$��~|�� #��$@��VX��Q��*

^ |� ��$�� <=�� #��$@��\>��QQ\*

^ |� ��$�� =�� #��$@��>�*

^ |� ��$�� |�� #��$@��Q�>>�*


^ ��$��&��<=�� #��$@��*

^ ��$��&��<�

at the total amount of Bt4,286,400.



Connected Company =��{Z�� Position Held in TUF

3. Lucky Union Foods Co., Ltd.

4. Chansiri Real Estate Co., Ltd.

5. Thai Union Securities Co., Ltd.

6. Jana Industry Co., Ltd.

7. TC Union Agrotech Co., Ltd.

Mr. Cheng Niruttinanon


Mr. Dejphon Chansiri

(Mr. Kraisorn’s son)

Mr. Disaphol Chansiri


Mr. Kraisorn Chansiri

Ms. Bussakorn Chansiri

(Mr. Kraisorn’s wife)

Mr. Chuan Tangchansiri






Director

Director



Director


Director

Director

Director

Director

Director

Director

102,000

19,680,000

15,260,000

15,260,000

7,800,000

2,000,000

-

2,200

2,000

1,000

50,000

496,000

11.3%

32.8%

25.4%

25.4%

13.0%

3.4%

-

22.0%

20.0%

10.0%

25.0%

49.6%


Company



Connected Transactions for year 2011


^ #��$��$��<�� #��$@�QV��V�*

^ #��$�� $��<=�� #��$@�Q�\��*

^ |� ��$�� <�� #��$@�>�XX\�Q��*

^ |� ��$��|�� #��$@��V>��*


^ ��$�� &��<�� #��$@��V��*

Short-term Rent of Immovable Property Transactions:

^ �<=��<��|��&��$��@��$��

�� #��$@��X�QX\*��#�@��$��

to facilitate business transactions, the three companies entered into rental

contract with the Chansiri Real Estate Co., Ltd., a real estate developer.

The contracted rental charge is Bt270/square metre/month and the service

charge is between Bt180/square metre/month depending on level of the rented

area. The rental and service charge is consistent with general market price in

the industry and apply only for rented area, excluding other utility charge.

The rental period is 3 years. The contract will expire in December 2013. Under

the Board of Directors’ Meeting No.8/2010 resolution passed on November 1, 2010.

Commercial Transaction: -


^ #��$�� $��|�� #��$@�X��X�*

^ |� ��$�� =�� #��$@��QX>��\X*


^ #��$�� $��<�� #��$@��X>��Q>�>��*

^ #��$�� $��<=�� #��$@��Q>�>>X�V�>*

^ #��$��$��<�� #��$@��V��*

^ |� ��$�� =�� #��$@��>��V��>\*

^ |� ��$�� <�� #��$@��X��*

Asset or Service Transaction:

^ ��$��|� �� &��<=


Policy of Price

Market Price

Compare to

neighbor areas

Market Price

Market Price




8. Lucky Surimi Products Co., Ltd.

9. Ekawat Products Co., Ltd.

10. Pae Rungtiwa

(Natural Person)

11. Geminai & Associate Co., Ltd.


Mr.Prasert Boonmechote




Ms.Rungtiwa Boonmechote

(Mr. Rittirong’s sister)

Ms. Rungtiwa Boonmechote

(Mr. Rittirong’s sister)



Director






1

100,000

137,500

50,000

-

459,870

0.0%

20.0%

27.5%

10.0%

-

92.0%


Company




Short-term Rent of Immovable Property Transaction:

^ �<=��&�� #��$@��Q��>�>

$��$�� #��}#��

service of Lucky Surimi Products Co., Ltd., as a solution for the Company’s

inadequate processing area for extension of its value added production line

(pie and ready-to-eat food). The rental agreement is effective for 3 years,

between January 1st, 2010 and December 31st, 2012 at Bt495,000.00 per

month (the said amount is only for the rent and service charge, excluding

expenses on water supply, electricity and telephone). Under the Board of

Directors’ Meeting No.2/2010 resolution passed on March 24, 2010.

Asset or Service Transaction:

^ ��&�$�� #��}#��$��<�


Commercial Transaction:

^ |� ��$�� <=�� #��$@�Q��>X�X\\��\�*

^ |� ��$�� <|�� #��$@�V��V\��V�>*


^ |� ��$�� <=�� #��$@�Q��X�\Q�*


^ #��$��$��+�� #��$@�V��\�*

Asset or Service Transactions:

^ ��&�$�� #�� $��<=

at the total amount of Bt44,968,465. Under the Board of Directors’ Meeting

No.5/2010 resolution passed on August 4, 2010.

^ ��&�$�� #��#��$��$��<�

at the total amount of Bt3,925,467.

Policy of Price

Compare to

neighbor areas

Market Price

Market Price

Market Price




12. Waithai Co., Ltd.

13. Ahead Way

International Co., Ltd.

14. Thaipatana

Stainless Steel Co., Ltd.

15. Yueh Chyang

Canned Food Co., Ltd.







Mr. Chan Hon Kit



Director

Director

Director

Director

Director

Director

Director

Director

Director

100,000

59,200

20,000

20,000

6,998

20,000

5,000

5,000

120,181US$

31.3%

18.5%

6.3%

6.3%

70.0%

40.0%

10.0%

10.0%

6.2%


Company





^ ��&�$��+�# ��$��<�� #��$@�Q��X��\>�*

^ ��&�$��+�# ��$��<=�� #��$@��\��*

^ ��&�$��+�# ��$�� #��$@��>��*

^ ��&�$��+�# ��$��|�� #��$@�V��QX�*

Under the 2011 AGM resolution passed on April 25, 2011of the expenses

for transaction per year not exceeding Bt100 million with connected

persons for 3 years.


^ #��$��$��=�� #��$@�VQ��>>>�X>�*

^ #��$��$��+�� #��$@�QQ��V*

^ |� ��$��~|�� #��$@��>��V�X��QX*

Asset or Service Transactions:

^ ��&�$��&��$��<�� #��$@��QVX�X��*

^ ��&�$��&��$��<=�� #��$@�Q�XQ\�>��*

^ ��&�$��&��$��|�� #��$@��\��*

^ |� ��$�}#��<�� #��$@��X��V��XX*

^ |� ��$�}#��<=�� #��$@�X�VV��*

^ |� ��$�}#�� #��$@�\��V��*

^ |� ��$�}#��|�� #��$@��\��*

Under the 2011 AGM resolution passed on April 25, 2011of the expenses

for transaction per year not exceeding Bt150 million with connected

persons for 3 years.

Short-term Rent of Immovable Property Transaction:

^ ��&�$��$��#��$��<�



^ |� ��$��<|�� #��$@�>\X��\*

^ |� ��$��~|=�� #��$@��VX��V\�*

^ |� ��$��<�� #��$@��>�\VV*

^ |� ��$��<=�� #��$@�>�\\��\Q�*

^ Purchase of raw materials from TUM at the total amount of Bt69,023,155.

Policy of Price

Market Price,

Compare to general

supplier

Market Price

Market Price

Market Price




16. Biz Dimension Co., Ltd.

17. Thai Union

Properties Co., Ltd.


Mr. Chan Tin King



Ms. Bussakorn Chansiri

(Mr. Kraisorn’s wife)




Mr. Disaphol Chansiri



Director

Director

Director

Director


Director



Director

2,850,000

749,997

49,995

16,300

7,700

2,400

1,800

1,800

-

9.5%

2.5%

0.2%

54.3%

25.7%

8.0%

6.0%

6.0%

-

Remarks:^ �� $��#�� $�� #��$K#��

and under general trading conditions under the Board of Directors’ Meeting No. 5/2008 resolution passed on August 20, 2008.

^ =��*��*��#��*��#�� *��*��<=��

connected company less than 10% of its registered capital but also hold director titles in the said connected company.

^ =��\��#��=��*�Z��* ��&��&� #��number of shares.

��<=��#K��&��#�� %��Consultants (Thailand) Co., Ltd. as insurer. The transaction is considered connected, as Mr. Chuan Tangchansiri, TUF Director, also has director title in the insurer. Through the entire year 2011, TUF paid��!�� @�\�*\�� #��#��#��%��# �� *�Z��*The insurer is entitled to commission only partially from total amount of the paid premium.


Company





^ ��&�$��$�� &��$��%��#��

and e-Auction service from TUF at the total amount of Bt400,000.

^ ��&�$��$�� &��$��%��#��

and e-Auction service from TUM at the total amount of Bt300,000

^ ��&�$��$�� &��$��*��K��#��

and web-based activities from THD at the total amount of Bt983,944.

Policy of Price

Market Price



To Our Directors and Shareholders,

TUF Audit Committee is composed of 3 independent directors who are professionally ��#��]�� management, law, internal controls and risk management. All Audit Committee members ��}#� ��# ��K��~$��of the Stock Exchange Commission’s and the Stock Exchange of Thailand’s regulations. They neither hold any managerial position, nor perform employee or consulting roles for the Company. TUF Audit Committee composition is as set forth below:

Mr. Sakdi Kiewkarnkha,Independent Director, acting in capacity as Audit Committee Chairman; attended 14 meeting sessions during the year 2011.

Pol.Maj.Gen. Pracha Anucrokdilok,Independent Director, acting in capacity as Audit Committee Member; attended 14 meeting sessions during the year 2011.

Mr. Kiti Pilunthanadiloke,Independent Director, acting in capacity as Audit Committee Member; attended 14 meeting sessions during the year 2011.

The Audit Committee convened in 14 sessions during the year 2011, with key tasks summarizedas follows:

The Audit Committee has examined the annual ��}#�� $��2011, and found that all of the Company’s �� $��#K��

had been prepared in accordance with generally accepted accounting standards and that adequate, complete and reliable information disclosure had been preserved. In addition, the Audit Committee also conducted a review of disclosure of connected transactions between the Company and its subsidiaries and those �� $��"��$��*The review by the Audit Committee also ensured compliance with securities and stock exchange laws, Stock Exchange of Thailand requirements, and laws pertaining to the Company’s business.

The Audit Committee also ensured that internal audits were implemented according to approved plans, followed up on corrective actions taken ��'��}#��$�� well as preventing or minimizing potential risks. In 2011, the Internal Audit Department conducted internal audits for the Company and 7 domestic subsidiaries. The Audit Committee was informed �$�� #��&��K��Internal Audit Department on a regular basis. Based on such reports, the Audit Committee declared that the Company’s and its subsidiaries’ internal controls and risk management systems were maintained in an appropriate manner, with each company’s managerial staff closely monitoring their operations. The Company places considerable importance on internal audit ��&��&��$��$�� $organizational hierarchy for both the Internal Audit Department and personnel attached to it since January 1, 2011.

REPORT OFAUDIT COMMITTEES



(Pol.Maj.Gen. Pracha Anucrokdilok)��

(Mr. Sakdi Kiewkarnkha)��

(Mr. Kiti Pilunthanadiloke)��

The Audit Committee visited the Company and 4 of its domestic subsidiaries, and attended meetings with the management of each company to review issues pertaining to risk management, internal �� &�� statements problems, and problems concerning independent auditors and internal auditors. Such on-site visits also included observation of manufacturing processes, inventory management, and general environmental conditions.

The Audit Committee Chairman visited 5 overseas subsidiaries in France, Portugal, Seychelles and Ghana (2 subsidiaries), and attended meetings with the management of each company to discuss various corporate issues. As with the visits paid to the Company and its domestic subsidiaries in Thailand, such on-site visits also included observation of manufacturing processes, inventory management, and general environmental conditions.

The Audit Committee acted according to its terms of reference to assist the Board of Directors ��$# � ��K� ��*|#�� were performed with ensured independence and objectivity as well as with fully unconditional access to relevant information. Expression of professional opinions were based on transparency and all in conformity with the Good Practice Guidelines stipulated by the Stock Exchange of

Thailand. As a result of its work during the year under review, the Audit Committee opinioned that the Company had operated under adequate and appropriate internal controls and risk �� been prepared in accordance with generally accepted accounting standards, and that relevant legislative and regulatory requirements were fully observed.

The Audit Committee conducted performance appraisal of independent auditors and found that they had performed their professional roles with independence and had full unconditional access to all data required. The independent auditors made inquiries to the Company’s executives and directors to provide observations and suggestions involving accounting systems, internal controls and risk management to the Company and its subsidiaries as they deemed necessary and appropriate. Seeing that their professional performance, according to the performance appraisal conducted, was satisfactory and proved K�� [��[�interest, the Audit Committee proposed that ��{��#��~$��Z��K��%��to act in the same capacity for the year 2012, and proposed the remuneration to the Board of ��&�� &� ��shareholders’ meeting accordingly.



* Debt = Interest-bearing debts only**Pre-tax ROA = EBIT / Average total assets

Ratios Year 2011 Year 2010

1.62

0.49

2.22

1.61

6.21

1.29

3.37

9.10

14.52

13.33

3.95

15.41

8.58

3.20

1.60

23.36

1. Liquidity Ratios

^ �#��

^ `#��

2. Leverage Ratios

^ �� Z��K� ��}#��

^ ��K��}#��

^ ��

\��[��[~��

^ ��#��&��

^ ��&��#��&��

^ ��#��&�K ��#��&��

^ ��#��K ��#��&��

$�� ;��[~��

^ ��?�

^ ��?�

^ ��#��&��}#��?�

^ ��#��?��

^ ��|��@��

^ ��&��|��@��

^ @�� #��|��@��

FINANCIALRATIOS

2010-2011 Comparative Financial Ratios

1.59

0.48

2.07

1.47

3.74

1.25

3.50

9.72

13.29

16.59

5.10

22.36

10.75

5.30

1.56

25.53


FINANCIALRATIOS

Explanation of

The current ratio fell slightly to 1.59 times in 2011 from 1.62 times in 2010 while the quick ratio also dropped to 0.48 time in 2011 from 0.49 time in 2010. The decline in the values of these ratios was caused by the fact that the value of total current assets increased by 18%, while the value of total current liabilities increased by as much as 20% from a year ago. The current liabilities therefore expanded in a faster pace that of current assets, causing the value of the ratio to drop.

The total liabilities-to-equity ratio declined to 2.07 times in 2011 from 2.22 times in 2010. Total liabilities (including all debts and liabilities) rose moderately by9% as sales continued to expand while shareholders’ equity jumped by 16% from a year ago, thanks ��# ��$consolidation of MW Brands and continual business expansion. The debt-to equity ratio, which addresses the interest-bearing debts only, gradually came downfrom the peak at 1.61 times in 2010 to 1.47 times in ��&��K� �� prepayment of long term debts from MW Brands acquisition. The time-interest-earned ratio decreased to 3.74 times in 2011 from 6.21 times in 2010 when the full year impact of the increased interest costs on debts as the consequence of MW Brands was felt.

Asset turnover ratios: The total asset turnover ratio and accounts receivable ratio decreased to 1.25 times from 1.29 times while accounts receivable turnover ratio rose to 9.72 times from 9.10 times a year ago, thanks to a high sales growth rate of 38% (in Thai baht term) during the year. Total assets increased by 11% only (where inventories were up by 22% and accounts receivable by 21%).

Inventory turnover ratio increased to 3.50 times from 3.37 times in 2010 as a result of 33% increase in the cost of sales but the average inventory was up by 22% only. Accounts payable turnover ratio declined to 13.29 times from 14.52 times in 2010 due to

the fact that the cost of sales rose 33% from a year agowith accounts payable also increasing only by 10%.

��$��K� ��stride from a year ago. Sales in Thai baht term or US dollar surged sharply from a year ago, thanks to continual growth of the core business and the European acquisition. Despite some historically high raw material prices, the recovery of shrimp business��@��}#�� $��margin from 13.33% in 2010 to 16.59% in 2011 and �� $��Q*X\?��\*��?*

Shareholders’ equity increased by 16% whereas ��'#��K�>>?*��}#�� #��on average equity in 2011 rose from 15.41% a year ago to 22.36%. The higher shareholders’ equity was ��#� ��$@�\��>\�while the amount of dividend payments during the yearwas kept at Bt1,195 m as part of the de-leveragingpolicy. As a result, the book value per share rose from Bt23.36 in the previous year to Bt25.53 at the end of 2011.

The total number of common shares in 2011 remained #��X\�*Q�� #��*��by 80%, leading to higher earnings per share (EPS). ��@�\��>\�� with Bt2,874 million in 2010 with EPS of Bt5.30 and Bt3.20 respectively.

The value of average total assets was by 11% as earnings before interest and tax (EBITDA) rose to 70%, leading to a higher pre-tax return on assets (ROA), up from 8.58 times to 10.75 times in 2011.

Despite our long term dividend payout policy of 50%, we limited our payment to Bt 1,200 million at ��&��#��$��% �&��from new debts incurred due to MW Brands acquisition.As a result, the payout ratio dropped to 29%, but the actual payment only decreased by 2.5%, thanksto better earnings in 2011.



REFERENCES

Common Share Registrar

Thailand Securities Depository Co., Ltd7th Floor, The Stock Exchange of Thailand Building62 �� Bangkok 10110Tel: 66 (0) 2229-2440

Convertible Debentures Registrar

Stock Information DepartmentThai Union Frozen Products PCL. (TUF)26th Floor, S.M. Tower, Phaholyothin Road,Samsennai, Phayathai, Bangkok 10400 Thailand Tel: 66 (0) 2298-0024Fax: 66 (0) 2298-0553

Independent Auditors

Mr. Sophon Permsirivallop orMs. Rungnapa Lertsuwankul orMr. Chayapol Suppasedtanon or Ms. Pimjai Manitkajohnkit ��{��#��~$��Z��XQ��Q�%�Q>�QQ��= ��Z��'��~$�� !�� Bangkok 10110 Tel: 66 (0) 2264-0777, 2661-9190Fax: 66 (0) 2264-0709

Independent Auditor Remuneration

1. Audit FeeThe Company and subsidiaries paid audit fee to:

^ �#��#��are attached to, individual or entity

related to independent auditors and �#��#�� 7,405,400 Bt

2. Non-Audit FeeThe Company and subsidiaries paid remuneration incurred by the following service:

^ �#��$��#�� independent auditors are attached to, individual or entity related to independent �#��#��#�� #�� @�%*^ �#��$��$�� #��#��

��V��$��@��$��&��#��independent auditors are attached to, individual or entity related to independent �#��#��#��

�� #�� V��@�



DISCUSSION AND��Z�|�|��{��&��$��<=��&��&��#��could digest and manage the sizeable acquisition �$��@��K��}#� �sizeable amount of debts. As the year progressed, �� $��}#��#�performance was still partially dampened by the yetrecovering shrimp export business and accountingadjustments due to MW Brands acquisition), operatingperformance improved sharply and was delivered according to plans despite the high raw material prices in the second half of the year and continual uncertainty in key economies, such as the US and the European Union. The Thai baht situation was �� K ��#��}#��K#�only took a plunge in late fourth quarter when the ��"��#��&��[�� *��#�&�&��$��#�� disaster with no negative impact. MW Brands managed to report a very consistent performance throughout the year, which helped ensure investors��[��*��#��in interest expenses, the underlying operating��$��$��#�� $��[��&�� *

As expected, the European market becomes ��[�� <|*��<|remained as its largest market at 36% of sales (though compared with 46% a year ago), followed by Europe at 32%, while Japan and the Thai marketare 10% respectively. This composition led to a morebalanced market exposure. Sales generated from Europe (up 190%, thanks to MW Brands acquisition),Middle East (up 71%), Asia ex-Japan (up 36%), Oceania (up 30%), Japan (up 24%), South America (up 18%), Thai domestic market (up 16%), the US (up 10%) and Canada (up 5.0%) were all higher than a year ago as opposed to Africa (down 5%).

Management

In terms of the main operating units, Chicken of the Sea International accounted for 13% of the total group sales while Chicken of the Sea Frozen Products for 19%. In other words, the US operating units added up to 32% of the total. MW Brands also K��K#��#��$��23% when Thai and other operating units made up for the biggest portion (45%).

Total tuna sales (can + loin) in US dollar term were USD1,545 million, up 70% from USD912 million ayear ago while volume (tonnage) increased by 30%. The factor behind the increase was essentiallyconsolidation of MW Brands’ full year result, leading��&��'#�� #��*� ��the historic high raw material prices, particularly in the second half of the year, also led to upward price adjustments. Tuna sales in the US inched up K�Q?�� #��there. Nevertheless, tuna sales to all other markets were strong, namely Europe (up 232%), Middle East(up 67%), Asia ex-Japan (up 46%), Japan (up 44%), Oceania (up 37%), Africa (up 27%), South America (up 21%) and Canada (up 6%). The tuna raw material��#�� a new record at USD2,000 in September, then reaching another new high (USD2,030) in December.On average, the price has increased by 37% from a year ago. Therefore, the average selling price was also adjusted upward by 30% when sales volumein tonnage increased by 30%.

With regards to the raw material price situation, the average skipjack tuna raw material price for WPO in 2011 was US$1,766 / metric ton, up 37% from a year ago (US$1,287 / metric ton). During the year, tuna prices (skipjack) were generally on an uptrend. The year started with prices at around US$1,500 and stayed stable through April.



Then prices rose continuously since May and set a new high (US$2,000) in September. After some briefstability, the price surged to another new high (USD2,030) in December. As of the latest (February2012), prices dropped slightly to USD1,930. The higher raw material price was generally attributableto periodic poor catches (as a result of unpredictableand sometime extreme weather patterns), increased��# �� =��%�� #��#�� &�� K� ��$}#� ��%�<<�$��<��$��K��$�� $��#�� %��% ��*

Total shrimp sales in US dollar term were USD615 million, up 22% from a year ago while volume (tonnage) growth was also on an uptrend, up 5%. Selling prices were generally adjusted upward to cope with the persistently higher shrimp raw materialprices. The demand was healthy thanks to the gradual recovery of the US economy, our successfulpenetration into the EU markets and increased sourcing from Japan. The dominant market remainedthe US, followed by Japan while the fast developingmarket was the EU. Both the EU and Japan are mainmarkets for the higher value-added products.

In 2011, the domestic shrimp raw material price has become more stable, though still at high levels,since the upward trend in 2010. In general, theaverage price (60 pieces / kg) was Bt142 / kg, which was 16% higher than the previous year, partly due to the local shrimp supply disruptions as a result �$��&��"��"��#��$�� "��&��the Central Region in the last quarter. It was estimated��#��?�$�� #��"��sending prices higher upon the strong demand in the market. Nevertheless, it is expected that prices could be slightly higher in 2012 as local supply is still �$$��K��"��*

In July, 2011, the US Department of Commerce �<|��#��$��#��$�� <|shrimp anti-dumping (AD) duty rate for Thai exporters$��&��=�K��X��*�� (and effective) rate for non-mandatory respondents(All Others) was reduced further from last round’s 2.61% to 0.73%. This new rate would serve as a reference rate for TUF’s shrimp exports to the US between now and the announcement of another

AD rate in the next annual review due September 2012. The lower rate was considered very favorableeven though we are becoming less concerned about the impact of the AD rate as an increasingportion of our shrimp shipments to the US are value-added products (e.g. breaded products) which are not subject to the duty. The low rate is a positive development, indicating a fading tradeissue. It should allow Thai shrimp exporters to competemore effectively with other shrimp exporting countries,�� #��Brazil, in the US market. Thanks to the continualexpansion of its domestic market, China is becomingless a trade threat, but a potential export market for Thai shrimp exports.

��$@�\��>\�� K�>>?from Bt 2,874 million to set a new corporate milestone,as margins expanded in most categories, particularlyin shrimp and tuna business. Thai baht exchange rate (vs. USD) was generally stable (except for the last quarter when it weakened considerably due to the fear of any adverse impact of the historic ��"�� #��#��#��K� ��*��&�� $��!��dropped to Bt305 million from Bt807 million in 2010.Average selling prices were generally adjusted upward to cope with higher raw material costs. ��&��K� �� #� EBITDA of Bt10,105 million, jumping by 70% from Bt5,950 million a year ago, thanks to accretive acquisition of MW Brands. The operating cash "��#��@�\�V�� $��@�Q�VQ�� #�� new high at Bt2,272 million due to increased debts incurred for the European acquisition.

Pre-tax return on assets (ROA) and return on equity (ROE) also increased to 11% and 22% respectively, demonstrating the continual improvement in the �!��K#��K��$��}#��*��[��K�%��%�}#��#� �� to 1.44x from 1.57x at the end of 2010 and Debt-EBITDAratio fell dramatically to 3.94x from 7.38x a year ago (when the acquisition debts are completely recognized, but only two months of MW Brands operations were included last year). We expect �� #� �� near 1.0x at the end of 2012 while Debt / EBITDA ratio should fall to close to 2.5x or below during the same time.



MW Brands Update

More than one year after the acquisition, MW Brandscontinued to deliver consistent and predictable performance. In 2011, MW Brands maintained its position as one of the largest shelf-stable/ ambient seafood processors in Europe with annual sales of ¡\�� #��?$��*��K� ��has been consistent from last year. The biggest ��$��#��K�=��<��#��$��around 78% of its sales. Sales from its own brands were also in excess of 80% of the total. Thanks to ��&��#��[�&�� integrated operations and the market leading positions of its brands, MW Brands managed to deliver healthy margins in the past few years.

��K�� <��QV?��Ireland (70%) and Netherlands (34%) while Petit Navire remained the No.1 (28%) canned seafood brand in France. Both brands accounted for 90% of MW Brands total sales. Mareblu maintained its No.3 position (6%) in the Italian canned seafood market with market share on the rise.

During 2011, the parent company carried out a $��&��&��*

�� &�� '��acquisition debts with existing lenders and Thai baht-denominated loans through issuing Thai baht debentures worth Bt6,750 million

<��&��&��[��#�

acquisition of MW Brands, the maturity of the majority of our Thai baht debentures (only

Bt500 million remaining in June) and an opportunity to bring our interest burden down,

we launched a series of Thai baht debentures ��@��>\�� # ��of our Thai baht loans originally raised for the acquisition in a year before. The debentures were of 3-year, 5-year and 10-year maturity which were also assigned A+ rating by TRIS

Rating. Siam Commercial Bank Public Company Z��@��#K ��Z�� +��|��@�� Limited (Bangkok Branch), were appointed as

the joint lead underwriters for such debentures. ��$��#�such a large amount of debentures as well as

with the longest tenor. Thai institutional investors ��K��#��witnessed by a strong response and excessive investor demand on the book-building day when the issues were 1.7 times oversubscribed. ��$��#��

size from the initial plan of Bt4,500 million to Bt6,750 million. Considering the arrangements, it is estimated the all-in savings should be approximately 100 basis points in term of interest

��&�� *Z�� managed to re-negotiate with the existing

lenders of the euro-denominated loans for lower interest rates in September 2011. Similarly, the annual interest cost savings amounted to approximately 100 basis point on the outstanding

euro loans that would expire in less than 4 years on average.

2. U.S. Pet Nutrition penetrating US pet market

Since the announcement of setting a new venture U.S. Pet Nutrition in December 2010, the

��$��K#� ��pet food processing plant in Georgia, US, right next to Chicken of the Sea’s existing plant. This new investment is expected to open up new opportunities to penetrate the premium US pet food market. Thanks to its strategic location, it ��# �� #��K��dry pet food, taking advantages of the supply of local raw materials. The new plant started to produce since the beginning of 2012, though still at a very initial stage. In spite of the fact that pet food is positioned to be one of the ��[��

�!��K#�� $��#��#��*��$��

business has in fact a bigger market than that of canned tuna in the US with a potentially

attractive margin. The move is meant to develop ��[��#��$��

tuna and shrimp which have already established �� *

3. Investment in 40% of Pakfood Public Company Limited

On December 21, the board of directors passed a resolution to purchase shares of Pakfood Public Company Limited (PPC)



through a voluntary tender offer which would be paid fully in cash and to sign the share purchase agreement (SPA) with major shareholders of PPC to purchase PPC shares of not less than 40 percent.

Pakfood is one of the leading Thai frozen seafood processor and exporter with a strong focus in frozen shrimp, pasteurized crab meat and ready-to-eat meals (chilled and frozen). Its main markets are the US, the EU and Japan. It also owns a local brand “T Time” focusing on value-added food products, such as dim sum, �� *�� $@��X\X�� $@��X�� *As of December 31, 2011, its total assets were worth Bt3,817 million.

On February 29, the transacted price was agreed at Bt 51 per PPC share. However, the tender offer is subject to satisfaction of conditions

precedent such as 1) approvals of all matters as required under transaction documents by the board of directors; 2) satisfactory completion

�$ �� #��!�� #�� of PPC.

��]��&� #��$ cooperation between the two leading seafood companies which both share similar business in

shrimp and value-added frozen food products. �� # �� $��material sourcing, improved management

of manufacturing capacities and more joint marketing efforts to expand our local and overseas markets, such as the US and the EU which have been offering plenty of growth

opportunities. With PPC’s capability of value-added frozen seafood products, this partnership should lead to more business opportunities as TUF can offer more variety of products to serve

consumers’ needs.

It is estimated that the typical annual shrimp ��#��K�K�� &� �amount to almost 20% of total Thai shrimp output per year, creating a crucial advantage for the alliance. In addition, as the local labor supply continues to tighten, this linkup should also lead to more optimal capacity utilization at

K��[�� #�#�� expansion. As a result of these, it should lead to

better supply chain management that could potentially create more cost savings and further

��&��K� ��$��K��*

After the successful purchase of the company’s existing shares, the earnings of PPC will be

recognized in TUF’s income statement by the �}#��&�� V�?�$�� #�K��$��[�outstanding common shares. The share acquisition

will be paid in full by cash which will be funded K�� "��*��

�$��}#��[�� position should be very limited, given that the size of investment relative to the total assets value of TUF. This transaction is expected to be completed in the early second quarter of 2012.

The following paragraphs summarize our 2011��$�� *

Financials

Sales

Consolidated sales in dollar term surged by 43% YoY in 2011. In Thai baht term, sales increased by 38% to Bt98,670 million from Bt71,507 million in2010. Sales of the group could still grow by 13.2%in 2011 even if the full year sales contribution of MW Brands in 2010 was considered. MW Brands acquisition was indeed completed in late Oct, 2010. Therefore only operating performance for the last two months was consolidated into TUF’s books for that year. The average exchange rate for the year was at Bt30.63 / USD in comparison with 31.53 / USD in 2010. Thai baht, on average, appreciated against US dollar by 2.9%.

All products registered sales growth in dollar term from a year ago. The items showed the highestgrowth rates were namely canned sardine / mackerelproducts (up 81%), followed by tuna products (up 70%), salmon products (52%), products for the domestic markets shrimp (42%), products for the domestic market (up 28%), frozen shrimp (up 22%), cephalopod (up 19%), pet food (up 10%), shrimp feed (up 8%) and other canned seafood (up 2%). Nevertheless, tuna products still accounted forthe biggest portion of our sales at 48%, followedby shrimp at 19%, pet food at 6%, other canned seafood at 5%, shrimp feed at 5%, salmon 5%,



canned sardine/mackerel at 4% and frozen cephalopod at 1% and products for the domestic market at 7%. Compared with 2011, key growth markets were Europe (up 190%), Middles East (up 71%), Asia ex-Japan (up 36%), Oceania (up 30%), Japan (up 24%), South America (up 18%), Thai domestic market (up 16%), USA (up 10%), Canada (up 5%) while our sales to Africa were slightly lower than a year ago. The US remained our largestmarket, closely followed by Europe (32%), but its share dropped from 46% in 2010 to 36%.

Gross Margin

Gross margin in 2011 was 16.6%, up from 13.3%a year ago, thanks to the strong performancesof the existing business and full consolidation of�� K ��@��#�*These key factors helped overcome the challengesof consistently higher raw material prices, particularlytuna. Protection from the high import tariff in the EU,its strong brand leadership and the full integrationdown its supply chain enabled MW Brands to deliververy consistent results. In addition to encouraging results across all Thailand-based subsidiaries, the recovery of Thai shrimp export business was also a driving factor behind this strong performance. Thanks to customers’ understanding and cooperation,we were able to shorten the term of our shrimp export sales contracts. This mechanism practically allowed us to adjust selling prices more frequently �� &��$"#��#�� K� ��back to more consistent levels. In the US, there ��&�� #�� *��competition and high raw material prices exerted ��#��K� ��$�#��K#��*On the bright side, the successful merger between the Chicken of the Sea Frozen Foods and Empress International continued to perform on the back of strong domestic demand for imported shrimp. �!��$��}#�� partially affected by 1) shipments of some remainingshrimp orders that were not priced in the higher rawmaterial prices and 2) the carried-forward accountingimpact (€ 2.8 million) due to inventory step-up as a resultof purchase price allocation required for MW Brands��&��#�~��K��K� ��&��sharply as expected, starting the second quarter and thru the end of the year.

Selling and Administrative Expenses

Selling and administrative expenses increased by 45% or Bt2,770 million to Bt 8,882 million from Bt6,112million in 2010. The primary reason for the hike was consolidation of MW Brands into the group. However, this item, especially in terms of percentage of sales (9%), was actually similar to our estimate with no surprise. Given MW Brands a brand-heavy business, selling and promotion expenses were generally ��*�$�� #�� #�expected range of 9.0 – 9.5%.

Other Incomes (Excluding Foreign ExchangeGain/Loss)

In 2011, other incomes totaled Bt614 million, which consisted of dividends, export subsidies, compensationfrom accounts payable, interest income, claims to raw material suppliers and sales of obsolete assets and supplies and others.

FOREX Gain/Loss

In 2011, we reported a foreign exchange gain of Bt305 million, down 62% from a gain of Bt807 million in 2010 as a result of a more stable Thai baht in general. As a result, any contribution from foreign exchange hedging was limited. Any gain ��$�� of Thai baht appreciation. On average, Thai baht appreciated by 3.2% from a year ago. Forward contract is one of the main tools that we used to minimize any potential impact from the volatility of Thai baht exchange rate. With the existing hedging policy and currency trend, we normally do not �!�� K�K��the coming year.

Financial Expenses (Including Interest Expenses, Bank Charges & Others)

Financial expenses amounted to Bt2,272 million,up 198% from Bt764 million a year ago. Interestexpenses alone were Bt2,063 million, compared with Bt667 million a year ago, mainly due to the full ��$��#��$��K��incurred in the last quarter of 2010 for acquiringMW Brands. The average effective borrowing rate for the year was 5.88%. Going forward, we expect that the effective rate for 2012 to drop given lower



��$��!��#Thai baht bond issuance and rate re-negotiation of the euro-denominated acquisition loans (both in the third quarter 2011) and declining interest rate environment in Thailand.

Corporate Income Tax

Corporate income tax for the group in 2011 wasBt192 million, falling by 69% or a decrease ofBt437 million from Bt629 million in 2010. A lowertax expense was essentially contributed by the ��!�� '��$�� leveraged structure deployed for the MW Brands acquisition and the recognition of one-off tax credits upon closing down some France and Thailand operating units which had cumulative losses on their books. Currently, the majority of TUF plants in Thailand enjoy income tax privileges from the Board of Investment (BOI). Therefore, they are generally subject to very low tax rates, as opposed to our overseas subsidiaries, particularly those US based operations which has to pay normal US tax rates that are higher than Thai rates. The effective tax rate for the group during the year dropped to 3.1% from 15.8% in 2010. The rate should return toa higher level in 2012.

��

��'#��by 77% or Bt2,201 million, to Bt5,075 million fromBt2,874 million a year ago due to earningcontribution from MW Brands and improved Thai operations. Earnings per share surged to Bt5.30 from Bt3.20.

Assets

Total assets in 2011 were valued at Bt83,230 million, representing an increase of Bt8,453 million fromBt74,777 million in 2010, thanks to expanded workingcapital needed for higher costs of production andproduct selling prices. The assets were mainlycomposed of:

1. Trade receivables (before allowance for doubtful debts) were worth Bt11,345 million,

up 20% from Bt9,451 million in 2010 primarily thanks to the full year consolidation of MW

Brands into the group and generally higher

selling prices led by high raw material prices. The average age was within the normal range. At the end of 2011, 96% of our accounts receivable

were either not yet due or less than 1 month overdue while around 2% was overdue by more than 1 year. The account receivables turnover rate has been stable at 37 days,

consistent with the norm and our credit policy. The allowance for doubtful debts was

approximately 2% of total accounts receivable. The status is considered healthy and typical.

2. Year-end inventory (net) rose by 22% to Bt 26,132 million from Bt21,346 million a year ago

mainly caused by the acquisition of MW Brands and the high raw material costs. Normally, there is an allowance of diminution in value of ��&�� *��the amount was Bt443 million. This amount is usually composed of four parts: 1) an allowance

��$��@��\�� allowance made for raw materials (Bt112 million)

and; 3) an allowance made for ingredients and packaging (Bt70 million); and others (Bt10 million).

In respect of the inventory turnover rate, the average number of days that stocks were kept was 103 days, slightly lower than a year ago. Nevertheless, we would continue to implement plans to reduce the inventory level while not hurting the service level to our customers going

forward. In our case, lower inventory level would directly help reduce working capital requirement. Therefore, the plan to achieve leaner inventory should help reduce our debt burden going forward.

3. Property, plant and equipment (net) valued Bt15,655 million, an increase of 10% from Bt14,190 million in 2010. New acquisitions amounted to Bt3,365 million. The key reason for the increase was to 1) expanding and

improving the existing plant capacity; 2) expanding and improving the existing plant

facilities at Thai Union Manufacturing, MW Brands, Songkla Canning and Thai Union

Feedmill; 3) building the new plant for U.S. Pet Nutrition in Lyons, Georgia of the US. Also, other new machinery was bought and improvements were made to increase the �$��$�#��#K��[� ��*



Liabilities Total liabilities in 2011 remained stable at Bt56,161 million, compared with Bt51,541 million a year ago.Liabilities were essentially composed of bank overdraftsand loans (Bt14,477 million), trade payables (Bt7,919 million), deferred tax liabilities (Bt4,918 million) and debentures (Bt7,228 million), long-term loans (Bt15,599 million), a convertible bond(Bt 2,462 million) and others. Interest-bearing debts amounted to Bt39,758 million, of which around64% were considered long term while the restshort term. Moreover, around 51% of these debts were stated in Thai baht while 18% in US dollarand 31% in EURO. Shareholders’ Equity The total number of registered capital was increasedto Bt1,000 million while issued and paid-up commonshares were 956,329,407 units, remaining unchangedduring the year. In 2011, we paid two times of dividends amounting to Bt1,195 million (Bt1.25 per share). This was originally intended for meeting a covenant placed on the debts incurred for theacquisition of MW Brands. Although we successfully��K�� &��from those covenants since the third quarter,we maintained those as internal policies for�� $%�� K'��&��$��% �&��$��[�� position. If the operating performance of the group continued to progress as planned on top of these policies, we should be able to restore our �� &��K � �&� K��end of 2012. Then, we should also be able to revert to our long term policy of paying at least 50% of �� &��*

Cash Flows

��"��$��&��were Bt5,462 million, up 59% to Bt3,436 million, mainly due to the consolidation of MW Brands into the group. The annual depreciation and amortizationexpenses for the group amounted to Bt1,616 million.

Meanwhile, cash spent on investing activities amounted to Bt3,178 million as planned. In additionto the voluntary dividend cap, it was our intention to limit our annual investment budget to around@�QK� ��#�� #��

position to the pre-acquisition period. During the year, acquisitions of property, plant and equipmentwere made in the parent company and most of its local and overseas subsidiaries in order to add more capacity to their existing facilities.

��#�"��$��&��#��@��Q�>�� "��$Bt26,890 million in the previous year (then mainly $��@��}#��*��#�"�� # ��$��$�maturing Thai baht bond and some acquisition debts and a sharp increase in interest expenses. During the year, a four-year Thai baht worth Bt3,200 million was repaid while a series of new Thai baht bonds (3/5/10 year maturity) worth Bt6,750 millionwere issued. Meanwhile, dividend payments amounting to Bt1,195 million were made during the year.

After taking into consideration of all these cash ��"��#�"��<=��#K��a net decrease in cash and cash equivalent byBt135 million at the end of the year.

Subsequent event

��K��#��$�#�|��#�|�� =�K�#��*�� of the shrimp processing plant while other production plants, namely tuna, sardine / mackerel andcephalopod, in the same area were all unaffected.There were no heavy damages to the plant assets and no casualty. The plant, facilities and inventorieswere fully insured, even including any potential impact from business interruption as a result of the ��*��&�� $��!��processing workers at Samut Sakhon plant to our subsidiary’s processing facilities in Songkhla province(Thai Union Seafood), in addition to other productionplants in the same area. These emergency measures��&��K ��<=��# �K��K ��$# � �#��and future demand with no glitch.

The Samut Sakhon shrimp plant is one of the group’stwo main Thailand-based shrimp processing facilitiesfor export markets and generated sales worth USD233 million in 2011, accounting for 7% of the total consolidated sales of Thai Union Group. This plant can process up to 120 metric tons of whole �� K��*��}#��$



each year is typically a low-season period for the shrimp processing business. Therefore, the utilizationrate of the plant’s capacity was estimated at only ��?��$��*��# ��customers, investors, shareholders and all staff in that its production activities should return to normalcyas soon as possible with no major permanent impacton its business operations.

Future Prospect

We expect the group’s sales (in dollar term) to growaround 16% in 2011, mainly thanks to continualexpansion in all business lines with tuna products remaining as the key driver. However, growth shouldbe seen across all products categories. The US should still be our largest market, but emerging markets, namely the Middle East, Africa and Asia (ex-Japan), are expected to post strong growth from their small bases. We would ensure operating margins in 2012 to be stable at levels seen in the previous year. Financial cost should decrease as more acquisition debts would be gradually prepaid.Nevertheless, the effective tax rate should reboundas we do not expect any more tax credit in 2012. The new plant built by US Pet Nutrition is up and running. The new capacity should be gradually � ��#��#��<|premium pet food market. MW Brands shouldcontinue to improve as we expect more synergies to be realized at its operational level.

Our main task in 2012 is to:

1. Optimize MW Brands operations through realization of synergies in terms of cost savings,

�� &��&��cost savings on packaging and joint procurement

��%��#��into higher value-added products

2. Penetrate niche segments of the US pet food market thru U.S. Pet Nutrition and its new plant

3. Restructure labor force and implement automation in Thailand-based operations in order to handle the 40% hike in the minimum wage

V* ��&��#��$��#�� productivity management approach thru automation, waste reduction, employee skill enhancement, and machine downtime reduction

5. Increase the proportion of value-added products through new product development 6. Expand sales to new markets >* �� =£��

��#��]��"��K��&��actively

Food safety and sustainability continue to be very, or potentially the most, critical factors for foodexporting business going forward. They can serve as an advantage as well as a disadvantage (in formof trade barriers) to any food company. Given our ��%��frequent factory audits by customers from most food safety-stringent markets, we are reassured that our high standards and track record will work to our advantage. Besides, our management also takes note of consumers and investors’ growing awareness of the impact of each business onthe environment in terms of preservation andsustainability. That intention led to our involvement in co-founding the International Seafood Sustainability=�#�� X��$��research and promote preservation of tuna resources.=#��#�$�#�%��#��hatchery, shrimp feed mill, partner farms and ��$�� K��}#��# �#��Council (ACC) is another proof of this intention.

In addition to proper execution of our focused strategy and our staff’s determination to success, we believe the likelihood of meeting our goal this yearwill also be subject to the following critical factors:

� � �� As 90% of the group’s revenues are in foreign currencies, any extreme

"#��#��$$��!�� &��#��K� ��*�� K��#��a portion of our Thai plants’ expenses are in Thai baht. In 2011, around 80% of our group (consolidated) operating expenses were in

foreign currencies. As a dollar earner, we normally K��$�� #��*@#��

to our non-speculative and timely currency hedging policy, we have been successful in riding out most of the foreign exchange rate



"#��#��$��!��gains in the past few years as a proof.

^ Raw material price. The average skipjack tuna raw material price for WPO in 2011 was USD 1,766 / metric ton, which was 37% higher than a year ago (USD1,287 / metric ton). The key factors driving up prices were poorer catching (normally caused by extreme and unseasonal ��

regulations. There is indeed no immediate concern for any long term shortage of skipjack �#��$��#��such as survey reports from International Seafood

Sustainability Foundation. Chicken of the Sea International and TUF are founding members �$��%��]��*|��'��#��the species primarily used for packing canned tuna. Skipjack tuna packed in a can is commonly

called “light tuna” in the US.

Tuna raw material price was high in 2010. The year started with prices at around USD1,500 and stayed stable through April. Then prices continued to surge to hit a new high at USD2,000 in September.After some brief stability, it went further up to USD 2,000 in December setting a new record. As amatter of fact, it set a new record (USD2,030) again in January, 2012. The price is now stabilizingat slightly below USD2,000. The raw material price volatility from time to time could exert some pressureon margins as price adjustments might not be as timely as we wish, but we can generally achieve that over a longer period of time. 2011 was anotheryear on record to demonstrate our ability to sustainour margins despite raw material price volatility. Our long term track record shows that non-speculativepurchase, careful inventory management of raw materials and timely adjustment of the selling pricehas helped us ride out most of the potential impactfrom such volatility. Our selling prices are normally set on (raw material) cost-plus (processing fees)basis.

^ Interest rates. The direction of the world interest was mixed, but Thai rates were generally heading ��# ��$��"��

quarter in 2011. With the majority of our long term debts (64% of all interest bearing debts, �� }#��%�� !��

either by default or with use of hedging instruments, we can be certain that any potentially negative impact from interest rate volatility should be

minimal. The remaining 36% of the group’s

interest-bearing debts, which are mainly used $�� %��

�"��*�� }#��$�#� attention in the year to come.

Most of these factors are beyond our control, but close monitoring and punctual adjustments will allowus to minimize risk exposure or take advantage of any opportunities that might arise.

We uphold corporate governance, transparency and professional management, in light of corporatesocial responsibility (CSR), as our long time guiding principles. We treat shareholders, whether major or minority, in the fairest and most responsible mannerby committing to full and timely information disclosureand returning cash in form of dividend to them ��#��K �*��&��[��#�commitments has been consistently proved innumerous awards which we received over the years. Furthermore, consistent coverage by analystsfrom world and local leading investment banks ��#��K��$��}#��&��K��"#�� investment managers are just some of the proofs of our long term commitment to good corporategovernance. Moreover, as countries around the world are becoming more integrated and dependenton each other, awareness and care for thesustainability of each company’s business practicesin respect to the environment and the societybecome consumers’ interests. Our management has been taking proactive measures to ensure that our business practices are sustainable through &��#�� &��|#��K� ��#�� for the business under the group.

Our long time dividend policy is to pay at least 50%�$�#��*��#��#��management and ability to adapt to changingbusiness environments, we have managed to report��#��&� ��K �}#��&��payments since our listing in the Stock Exchange of�� XXV*+��&�� $%�� discipline, we limit our annual capital expenditureto not more than Bt3 billion and the annual dividend��!��#��$@��*�K� �� $�� &� �$�#��#� �� #�� #��#� Debt / EBITDA ratio drops to a satisfactory level (say 1:1). Based on our expectation, this new policy should stay for next 2 years.



FINANCIALSTATEMENTS

Statement of the Board of Director’sResponsibilities for the

As the Company is a listed company on theStock Exchange of Thailand, the Board ofDirectors hereby expresses its responsibility for��#��[�� #�� "��#� �� #��# ��K��on accounting principles which require accurate, complete, and adequate recording of accounting ��&��*��$�� #��and attention have been taken in the reporting �$��

comply with the generally accepted accounting standards. We also wish to assure that adequate disclosure of all pertinent material data hasK�� accordance with the updated Accounting |�� *Independent auditors have unconditionally�!��#�� statements in the Report of Independent Auditors.

(Mr. Kraisorn Chansiri)��

(Mr. Thiraphong Chansiri)��


��&��#�� $�� $��<��=��]��#��Public Company Limited and its subsidiaries as at 31 December 2011, the related consolidated statements �$��&�� [�}#��"��$��&�� #�� $��<��=��]��#��#K ��Z��$��*�� K� ��$��[��as to their correctness and the completeness of the presentation. My responsibility is to express an opinion �� K��#��* ��#�� $�&��subsidiaries, Thai Union International, Inc. and its subsidiaries and PT Juifa International Foods and�#��=��*�Z��*�� #�� *��31 December 2011, these subsidiaries had total assets of Baht 15,617 million, and total revenues for the year ��$@��Q��Q>\�� *�� $��#K��#��K��auditors whose reports have been furnished to me, and my opinion, in so far as it relates to the amounts�� #��$��#K�� K�� $��auditors.

I conducted my audit in accordance with generally accepted auditing standards. Those standards��}#�� $��#�� K�� K ��#��K�#�� statements are free of material misstatement. An audit includes examining, on a test basis, evidence�#�� #�� #�� * �� #�� #�� #�� #��K�� &� #��&�� *�K� ��&��#��$��#��$��&��K �K��$��*

�� K�� #�� #�� $ �� #�� $��K�&��$�� $��<��=��]��#��Public Company Limited and its subsidiaries and of Thai Union Frozen Products Public Company Limited as ��Q��K��# ��$��"��$��with generally accepted accounting principles.

�� $ �� <�� =��]�� #�� #K �� Z�� #K�� $��<��=��]��#��#K ��Z��for the year ended 31 December 2010 were audited in accordance with generally accepted auditing �� K� �� #�� $ �#� �� #�� =�K�#�� !�� #�}#� ��$��&� #��$��K ��*

REPORT OF INDEPENDENT AUDITORTO THE SHAREHOLDERS OF THAI UNION FROZEN PRODUCTS PUBLIC COMPANY LIMITED

Sophon Permsirivallop��

��!�"��#�$%��&��'��#(()��*� ��+��,��

Without qualifying my opinion on the aforementioned�� Q��\�� *�#��current year, the Company adopted a number of revised and new accounting standards as issued by the Federation of Accounting Professions, and applied them in the preparation and presentation �$�� *



Thai Union Frozen Products Public Company Limited and its subsidiaries

Statements of financial position

As at 31 December 2011 and 2010

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 2011 2010 2011 2010

Assets

Current assets

Cash and cash equivalents 8 902,520,399 1,037,296,710 55,908,174 14,912,270

Trade and other receivables 9, 10 11,160,791,416 9,261,819,663 4,088,187,150 3,066,632,071

Short-term loans to subsidiaries 10 - - 80,000,000 625,824,650

Current portion of long-term loans to subsidiaries 10 - - 440,335,000 2,691,738,000

Current portion of long-term loans to other companies 4,070,571 1,430,750 - -

Inventories 11 26,131,954,501 21,346,117,741 3,618,231,368 2,423,325,643

Other current assets

Prepaid income tax 106,600,895 286,323,491 28,162,734 28,162,734

Current portion of forward exchange contracts receivables 142,731,953 748,337,711 140,443,542 558,700,840

Value added tax refundable 664,015,221 538,929,720 42,214,924 60,726,120

Others 817,680,910 739,834,454 34,631,753 51,494,323

Total other current assets 1,731,028,979 2,313,425,376 245,452,953 699,084,017

Total current assets 39,930,365,866 33,960,090,240 8,528,114,645 9,521,516,651

Non-current assets

Restricted deposits with financial institution 12 12,024,282 11,031,720 - -

Investments in subsidiaries 13 - - 4,566,571,387 4,396,708,852

Investments in associates 14 923,968,413 837,717,064 66,231,008 66,231,008

Other long-term investments 15 70,305,372 72,669,275 34,579,160 34,579,160

Long-term loans to subsidiaries - net of current portion 10 - - 17,007,904,981 15,429,105,300

Long-term loans to other companies - net of

current portion 24,557,502 28,630,292 - -

Property, plant and equipment 16 15,654,960,315 14,190,173,390 3,204,693,088 3,004,741,748

Goodwill 11,674,495,827 11,396,141,526 - -

Intangible assets 17 13,349,544,156 13,027,293,393 1,675,667 1,508,855

Other non-current assets

Forward exchange contracts receivables

- net of current portion 76,264,500 387,308,300 76,264,500 387,308,300

Leasehold rights 175,671,012 21,094,331 - -

Advance payment for purchase property, plant and equipment 8,251,306 35,227,356 - -

Deferred tax assets 24 1,062,569,162 498,561,829 35,156,604 18,609,334

Unamortized discount from forward exchange contracts 185,529,121 246,928,814 185,529,121 246,928,815

Others 81,058,709 64,055,054 16,195,821 10,773,125

Total non-current assets 43,299,199,677 40,816,832,344 25,194,801,337 23,596,494,497

Total assets 83,229,565,543 74,776,922,584 33,722,915,982 33,118,011,148

The accompanying notes are an integral part of the financial statements.




Statements of financial position (continued)

As at 31 December 2011 and 2010

(Unit: Baht)


Note 2011 2010 2011 2010

Liabilities and shareholders' equity

Current liabilities

Bank overdrafts and short-term loans from

financial institutions 19 14,477,174,817 8,363,776,804 3,553,985,552 1,992,669,842

Trade and other payables 10, 18 7,919,074,759 7,194,757,157 1,372,242,118 1,297,504,736

Short-term loans from subsidiaries 10 - - - 245,840,000

Current portion of long-term loans 20 983,548,345 516,057,950 - -

Current portion of debentures 21 - 3,200,000,000 - 3,200,000,000

Income tax payable 202,584,061 187,665,033 36,862,821 25,084,196

Other current liabilities 1,559,477,746 1,479,031,528 343,641,837 265,745,009

Total current liabilities 25,141,859,728 20,941,288,472 5,306,732,328 7,026,843,783

Non-current liabilities

Long-term loans - net of current portion 20 14,615,040,023 22,500,817,529 2,250,000,000 8,896,807,865

Debentures - net of current portion 21 7,228,325,702 500,000,000 7,228,325,702 500,000,000

Convertible bond 22 2,462,169,097 2,390,745,712 2,462,169,097 2,390,745,712

Provision for long-term employee benefits 23 992,478,495 - 190,432,553 -

Deferred tax liabilities 24 4,918,293,992 4,641,052,228 626,052 -

Forward exchange contracts payable - net of

current portion 411,350,702 88,683,600 362,851,125 88,683,600

Other non-current liabilities 391,011,166 478,800,280 88,236,570 47,267,248

Total non-current liabilities 31,018,669,177 30,600,099,349 12,582,641,099 11,923,504,425

Total liabilities 56,160,528,905 51,541,387,821 17,889,373,427 18,950,348,208

Shareholders' equity

Share capital 25

Registered

1,000,000,000 ordinary shares of Baht 1 each 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000

Issued and paid-up

956,329,407 ordinary shares of Baht 1 each 956,329,407 956,329,407 956,329,407 956,329,407

Share premium 8,158,890,230 8,158,890,230 8,158,890,230 8,158,890,230

Retained earnings

Appropriated - statutory reserve 26 100,000,000 89,000,000 100,000,000 89,000,000

Unappropriated 15,207,087,354 11,850,241,901 6,618,322,918 4,963,443,303

Other components of shareholders' equity (4,663,470) (87,474,610) - -

Equity attributable to owners of the Company 24,417,643,521 20,966,986,928 15,833,542,555 14,167,662,940

Non-controlling interests of the subsidiaries 2,651,393,117 2,268,547,835 - -

Total shareholders' equity 27,069,036,638 23,235,534,763 15,833,542,555 14,167,662,940

Total liabilities and shareholders' equity 83,229,565,543 74,776,922,584 33,722,915,982 33,118,011,148

- - - -





Income statements

For the years ended 31 December 2011 and 2010

(Unit: Baht)


Note 2011 2010 2011 2010

Revenues

Sales 10 98,670,377,747 71,507,401,428 23,725,730,352 21,183,980,131

Other income

Dividend income 828,755 351,530 1,214,008,607 1,218,830,079

Interest income 9,813,442 5,458,483 1,049,605,168 437,024,383

Exchange gains 304,755,850 806,951,116 47,608,703 356,087,169

Others 603,149,130 489,528,362 203,671,429 197,178,319

Total other income 918,547,177 1,302,289,491 2,514,893,907 2,209,119,950

Total revenues 99,588,924,924 72,809,690,919 26,240,624,259 23,393,100,081

Expenses

Cost of sales 82,301,395,646 61,976,442,881 20,907,255,927 19,586,410,643

Selling expenses 4,943,658,813 3,887,944,873 793,262,577 933,906,512

Administrative expenses 3,938,537,211 2,224,376,582 731,729,179 502,777,272

Total expenses 91,183,591,670 68,088,764,336 22,432,247,683 21,023,094,427

Profit before share of profit from investments

in associates, finance cost and corporate income tax 8,405,333,254 4,720,926,583 3,808,376,576 2,370,005,654

Share of profit from investments in associates 83,729,560 23,521,321 - -

Profit before finance cost and corporate income tax 8,489,062,814 4,744,447,904 3,808,376,576 2,370,005,654

Finance cost (2,272,152,444) (763,644,302) (675,156,144) (341,496,134)

Profit before corporate income tax 6,216,910,370 3,980,803,602 3,133,220,432 2,028,509,520

Corporate income tax 24 (192,158,813) (628,569,170) (110,110,413) (77,560,909)

Profit for the year 6,024,751,557 3,352,234,432 3,023,110,019 1,950,948,611

Profit attributable to:Equity holders of the Company 5,074,540,384 2,873,694,317 3,023,110,019 1,950,948,611Non-controlling interests of the subsidiaries 950,211,173 478,540,115

6,024,751,557 3,352,234,432

Earnings per share 29

Basic earnings per share Profit attributable to equity holders of the Company 5.30 3.20 3.16 2.17

Diluted earnings per share Profit attributable to equity holders of the Company 5.17 3.19 3.11 2.17





Statements of comprehensive income


(Unit: Baht)


2011 2010 2011 2010

Profit for the year 6,024,751,557 3,352,234,432 3,023,110,019 1,950,948,611

Other comprehensive income:

Exchange differences on translation of

financial statements in foreign currency 80,905,135 51,778,081 - -

Gain on change in value of available-for-sale investments 1,168,445 1,249,855 - 498,600

Loss on change in the value of pension fund (28,937,425) (14,102,896) - -

Increase (decrease) in other reserves (5,471,986) 5,940,220 - -

Other comprehensive income for the year 47,664,169 44,865,260 - 498,600

Total comprehensive income for the year 6,072,415,726 3,397,099,692 3,023,110,019 1,951,447,211

Total comprehensive income attributable to:

Equity holders of the Company 5,157,351,524 2,918,559,577 3,023,110,019 1,951,447,211

Non-controlling interests of the subsidiaries 915,064,202 478,540,115

6,072,415,726 3,397,099,692




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Cash flows statements


(Unit: Baht)


2011 2010 2011 2010

Cash flows from operating activities

Profit before tax 6,216,910,370 3,980,803,602 3,133,220,432 2,028,509,520

Adjustments to reconcile profit before tax to net cash provided by

(paid from) operating activities:

Depreciation and amortisation 1,616,173,839 1,218,951,112 273,012,582 321,396,732

Amortisation of premium/discount from forward foreign

exchange contracts 63,014,522 (20,092,691) 63,413,780 (16,151,035)

Amortisation of issue cost of convertible bond, debentures

and long-term loans from financial institutions 163,988,942 24,622,866 111,307,543 6,519,270

Allowance for doubtful accounts (reversal) 14,684,702 28,431,144 22,572,912 (5,553,031)

Decrease of inventory to net realisable value 84,431,465 60,876,793 34,941,812 5,151,959

Allowance for loss on impairment of assets 17,938,239 - 29,772,627 -

Allowance for loss on impairment of goodwill 16,743,910 - - -

Reverse of allowance for loss on impairment of other long-term

investments - (9,677,789) - -

Share of profit from investments in associates (83,729,560) (23,521,321) - -

Loss on sale of investments 1,401,327 1,672,850 - 459,050

Provision for long-term employee benefits 146,852,225 - 24,739,652 -

Gain on dissolution of subsidiaries (1,113) - - -

Loss (gain) on sale / write-off of property, plant and equipment

and other intangible assets 30,275,050 4,705,935 5,076,340 (467,262)

Loss on write-off of leasehold right 1,504,070 1,231,079 - -

Unrealised exchange loss (gain) 812,917,376 (193,805,314) 611,414,570 (74,126,280)

Dividend income (828,755) (351,530) (1,214,008,607) (1,218,830,079)

Interest income (9,813,442) (5,472,882) (1,049,605,168) (437,024,383)

Interest expense 2,063,502,112 675,995,934 558,153,628 329,299,896

Profit from operating activities before change in operating

assets and liabilities 11,155,965,279 5,744,369,788 2,604,012,103 939,184,357

Decrease (increase) in operating assets

Trade and other receivables (1,617,843,008) (545,450,821) (950,398,721) (148,078,403)

Inventories (4,301,590,313) (603,777,734) (1,228,040,546) 1,475,559,827

Other current assets (225,389,433) 193,796,342 32,891,163 6,171,700

Other non-current assets 10,984,622 (78,651,292) (16,194,681) (4,264,187)

Increase (decrease) in operating liabilities

Trade and other payables 653,779,147 (146,678,004) 111,324,157 (273,636,674)

Other current liabilities (1,828,977) (463,083,360) 15,797,820 12,772,392

Other non-current liabilities 115,970,729 (45,232,836) 49,125,531 (19,668,925)

Cash flows from operating activities 5,790,048,046 4,055,292,083 618,516,826 1,988,040,087

Cash paid for corporate income tax (328,043,131) (618,967,962) (107,022,356) (53,747,447)

Net cash from operating activities 5,462,004,915 3,436,324,121 511,494,470 1,934,292,640





Cash flows statements (continued)


(Unit: Baht)

Consolidated financial statements Separate financial statements2011 2010 2011 2010

Cash flows from investing activities

Increase in restricted deposits with financial institutions (735,191) (67,050) - -

Acquisitions of property, plant and equipment (3,364,840,178) (2,727,955,535) (556,106,161) (849,726,010)

Acquisitions of intangible assets (37,306,973) (10,529,932) (640,038) (982,829)

Acquisitions of leasehold rights (2,365,337) (5,210,703) - -

Decrease in short-term loans to subsidiaries - - 545,824,650 880,900,360

Decrease (increase) in long-term loans to subsidiaries - - 1,119,297,720 (14,241,728,600)

Decrease (increase) in long-term loans to other companies 1,304,154 (18,467,276) - -

Cash paid to purchase of investments in subsidiaries (Note 2.2) - (28,371,146,505) - -

Increase in investments in subsidiaries - - (169,862,535) (1,052,755,665)

Increase in investments in associates (44,548,168) (35,688,000) - -

Decrease (increase) in other long-term investments (1,040,989) - - 4,565,950

Dissolution of subsidiaries (174,911) - - -

Interest received 9,802,775 4,433,406 1,040,025,013 300,032,832

Dividend received 35,828,755 11,851,530 1,214,008,607 1,218,830,079

Proceeds from sale of investments 3,154,823 23,638,101 - -

Proceeds from sales of property, plant and equipment

and intangible assets 222,988,668 369,573,119 1,262,886 19,705,711

Net cash from (used in) investing activities (3,177,932,572) (30,759,568,845) 3,193,810,142 (13,721,158,172)

Cash flows from financing activities

Increase in bank overdrafts and short-term loans

from financial institutions 5,838,799,223 3,096,225,965 1,561,315,710 1,109,682,138

Decrease in short-term loans from subsidiaries - - (245,840,000) (732,770,000)

Increase (decrease) in long-term loans from financial institutions (7,964,450,950) 22,989,777,010 (6,750,000,000) 9,000,000,000

Increase (decrease) in debentures 3,550,000,000 (1,500,000,000) 3,550,000,000 (1,500,000,000)

Cash paid for interest expense (2,059,765,423) (589,445,249) (560,455,101) (258,781,706)

Cash paid for unamortized front end and deferred

debentures fees (23,964,321) (887,504,570) (23,964,321) (133,749,693)

Increase in convertible bond - 2,502,060,000 - 2,502,060,000

Proceeds from issued additional share capital - 3,713,251,829 - 3,713,251,829

Decrease in non-controlling interests of the subsidiaries (511,958,582) (438,633,033) - -

Dividend paid (1,195,364,996) (1,995,945,703) (1,195,364,996) (1,995,945,703)

Net cash from (used in) financing activities (2,366,705,049) 26,889,786,249 (3,664,308,708) 11,703,746,865

Increase (decrease) in translation adjustment (52,143,605) 742,380,572 - -

Net increase (decrease) in cash and cash equivalents (134,776,311) 308,922,097 40,995,904 (83,118,667)

Cash and cash equivalents at beginning of year 1,037,296,710 728,374,613 14,912,270 98,030,937

Cash and cash equivalents at end of year (Note 8) 902,520,399 1,037,296,710 55,908,174 14,912,270





Cash flows statements (continued)


(Unit: Baht)

Consolidated financial statements Separate financial statements2011 2010 2011 2010

Supplement cash flows information

Non-cash items:

Undue installment of acquisition of property, plant

and equipment 95,370,986 180,495,494 24,143,691 70,611,788

Unrealised gain on changes in the value of investments (1,168,445) (751,255) - -

Transfer of properties foreclosed to property, plant

and equipment 57,056,539 - 57,056,539 -

Transfer of property, plant and equipment to

other current assets 3,371,006 - - -

Transfer of property, plant and equipment

to leasehold rights 152,767,975 - - -

An adjustment provision for long-term employee

benefits to the beginning balance of retained earnings 511,329,935 - 161,865,408 -




Thai Union Frozen Products Public Company Limited and its subsidiaries Notes to consolidated financial statements For the years ended 31 December 2011 and 2010

1. General information

1.1 Corporate information

Thai Union Frozen Products Public Company Limited (“the Company”) is a public

company incorporated and domiciled in Thailand.

The Company operates its business in Thailand and its subsidiaries operate their

businesses in Thailand and overseas. Their principal activities in Thailand are the

manufacture and export of frozen and canned seafood, and local subsidiaries are also

engaged in the packaging and printing, pet food businesses and fishery.

The principal activities of the overseas subsidiaries such as the subsidiaries in United

States are the manufacture and distribution of canned seafood, and the import of

shrimp and other frozen seafood products for sale to restaurant chains, retailing,

wholesaling and food processing, the subsidiaries in Europe are the manufacturer and

distributor of ambient seafood products to countries in Europe under their trademarks,

and two subsidiaries in Asia, principally located in Indonesia and Vietnam are the

manufacturer and distributor of seafood.

The Company’s registered address is 72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai,

Amphoe Muangsamutsakorn, Samutsakorn. The Company has 5 branches in Bangkok

and Samutsakorn.

1.2 Acquisition of PPC’s shares

The Board of Directors’ Meeting held on 21 December 2011 of the Company has

approved a resolution for the Company to make a voluntary tender offer for all shares

of Pakfood Public Company Limited (PPC or Pakfood). The details of this transaction

are as follows.



� On 21 December 2011, the Company and a group of existing shareholders of

Pakfood have entered into the Share Sale and Purchase Agreement (SPA) of PPC.

The Company, pursuant to Thai applicable laws, is required to make a voluntary

tender offer for all shares in PPC. The acquisition will be executed when all conditions

precedent stated in the SPA are fully satisfied. The transaction is expected to take

place in second quarter of 2012.

� The Company will purchase Pakfood’s common in a voluntary tender offer process

with conditions that the aggregate number of shares acquired in the tender offer shall

not be less than 40% of total issued and paid-up shares of Pakfood. The offer price

per share is equal to the net book value per share of the audited Pakfood’s

consolidated financial statements for the year ended 31 December 2011. The

Company will pay fully in cash.

� Pakfood is a listed company in the Stock Exchange of Thailand. Pakfood and its

subsidiaries operate as a manufacturer and distributor of food products, semi-finished

food products, ready to eat meal, both chilled and frozen, domestically and

internationally.

� The Company will purchase Pakfood’s shares if conditions precedent including but

not limited to the following conditions are satisfied.

1. The purchase price per share shall be based on the net book value per share

of Pakfood pursuant of the audited financial statement of Pakfood as of

31 December 2011.

2. The meetings of the board of directors and/or the shareholders of Pakfood

shall have been duly convened and approve all matters as required under

transaction documents.

3. Legal, customs, tax and financial due diligence of Pakfood shall be completed

at satisfaction of the Company.

4. Documentation in relation to waivers of event of defaults and consents by

lenders to Pakfood shall be signed in a form satisfactory to the Company.

� This investment will strengthen frozen food and ready to eat meal sectors especially

in terms of export.

� The source of fund is from cash flow from the operation of the Company.

2. Basis of preparation

2.1 The financial statements have been prepared in accordance with accounting standards

enunciated under the Accounting Profession Act B.E. 2547, except for the early

adoption of TAS No. 12 “Income Taxes”.



The presentation of the financial statements has been made in compliance with the

stipulations of the Notification of the Department of Business Development dated

28 September 2011, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements

of the Company. The financial statements in English language have been translated

from the Thai language financial statements.

The financial statements have been prepared on a historical cost basis except where

otherwise disclosed in the accounting policies.

2.2 Basis of consolidation

a) The consolidated financial statements include the financial statements of Thai

Union Frozen Products Public Company Limited (“the Company”) and the following

subsidiary companies (“the subsidiaries”):

Country of Percentage of

company’s name Nature of business incorporation shareholding

2011 2010

Percent Percent

Held by the Company

Thai Union Manufacturing Co., Ltd. Manufacturer & exporter of Thailand

canned tuna and pet food

Songkla Canning Pcl. Manufacturer & exporter of Thailand

canned seafood

Thai Union Seafood Co., Ltd. Manufacturer & exporter of Thailand

frozen shrimp

T-Holding Co., Ltd. Distributor Thailand

Thai Union Feedmill Co., Ltd. Manufacturer & distributor of Thailand

animal feeds

Thai Union Graphic Co., Ltd. Printing manufacturer Thailand

Thai Union International, Inc. (TUI) Holding company USA

PT Juifa International Foods Manufacturer & distributor of Indonesia 88.78 76.50

canned tuna and seafood

Thai Union Investment Holding Holding company Mauritius 100.00 100.00

Co., Ltd. (TUIH)

Held by subsidiaries

Tri-Union Seafoods, LLC Manufacturer & USA 100.00 100.00

(100% held by TUI) distributor of canned

tuna and seafood




Company’s name Nature of business incorporation shareholding

2011 2010

Percent Percent

Tri-Union Samoa Packing Corporation Liquidated USA - 100.00

(100% held by Tri-Union

Seafoods, LLC)

Tri-Union Frozen Products, Inc. (TUFP) Importer and distributor USA 82.00 82.00*

(82% held by TUI) of frozen seafood

Empress International, Ltd. (Empress) Importer and distributor of USA - -*

(100% held by TUI) frozen shrimp and other seafood

Tri-Union Frozen Foods, LLC Importer and distributor of USA - -*

(70% held by TUI) frozen seafood

US Pet Nutrition, LLC (USPN) Manufacturer & distributor USA 100.00 100.00

(99% held by TUI and 1% held by of premium pet food

Tri-Union Seafoods, LLC)

Empress International of California Ltd. Sales office USA - -*

(100% held by Empress)

Empress International Midwest Ltd. Sales office USA - -*

(100% held by Empress)

Asian-Pacific Can Co., Ltd. Manufacturer & Thailand 81.85 81.85

(90.5% held by Songkla Canning distributor of packaging

Pcl.) for food products

Yueh Chyang Canned Food Co., Ltd. Manufacturer & Vietnam 46.12 46.12

(51% held by Songkla distributor of canned

Canning Pcl.) tuna and seafood

Thai Union Hatchery Co., Ltd. Shrimp breeding and rearing Thailand 51.00 51.00

(99.99% held by Thai Union

Feedmill Co., Ltd.)

Thai Quality Shrimp Co., Ltd. Shrimp breeding and species Thailand 48.45 48.45

(95% held by Thai Union Feedmill developer

Co., Ltd.)

Phuket Fishing Co., Ltd. Liquidated Thailand - 90.08

(100% held by Thai Union

Manufacturing Co., Ltd.)





2011 2010

Percent Percent

Samui Fishing Co., Ltd. Liquidated Thailand - 90.08



Phang-nga Fishing Co., Ltd. Liquidated Thailand - 90.08



Songkla Fishing Co., Ltd. Liquidated Thailand - 90.08



Siam Fishing Pte. Ltd. General wholesale trade Singapore 90.08 90.08

(100% held by Thai Union (including importers

Manufacturing Co., Ltd.) and exporters)

Mauritius Company Holding company Mauritius 100.00 100.00

(100% held by TUIH)

Thai Union EU Seafood 1 SA Holding company Luxembourg 100.00 100.00

(100% held by TUIH)

Thai Union EU Seafood 2 SA Holding company Luxembourg 100.00 100.00


EU Seafood 1 SA)

Thai Union France Holding SAS Holding company France 100.00 100.00


EU Seafood 2 SA)

MW Brands Holding SAS Liquidated France - 100.00


France Holding SAS)

MW Brands SAS Headquarter activity France 100.00 100.00

(100% held by MW Brands Holding

SAS)

MW Brands Seychelles Limited Exporter of canned Tuna Seychelles 100.00 100.00

(100% held by MW Brands SAS)





2011 2010

Percent Percent

Etablissements Paul Paulet SAS Manufacturer, importer, France 100.00 100.00

(100% held by MW Brands SAS) distributor and exporter

of canned seafood

European Seafood Investment Portugal Manufacturer and exporter of Portugal 100.00 100.00

(74% held by MW Brands SAS and canned sardines and

26% held by Thai Union France mackerel

Holding SAS)

Pioneer Food Cannery Limited Manufacturer of canned tuna Ghana 100.00 100.00

(100% held by Etablissements Paul

Paulet SAS)

Mareblu SRL Importer and distributor of Italy 100.00 100.00

(74% held by MW Brands SAS and canned seafood

26% held by Thai Union France

Holding SAS)

UK Seafood Investments Limited Holding company United 100.00 100.00

(100% held by MW Brands SAS) Kingdom

Indian Ocean Tuna Limited Manufacturer and exporter of Seychelles 60.00 60.00

(60% held by Thai Union France canned tuna

Holding SAS)

John West Foods Limited Importer and distributor of United 100.00 100.00

(100% held by UK Seafood canned seafood Kingdom

Investments Limited)

Irish Seafood Investments Limited Importer and distributor of Ireland 100.00 100.00

(100% held by MW Brands SAS) canned seafood

John West Holland BV Importer and distributor of Netherland 100.00 100.00

(100% held by Irish Seafood canned seafood

Investments Limited)

TTV Limited Deep-sea fishing fleet Ghana 50.00 50.00

(50% held by Etablissements Paul operation

Paulet SAS)



* On 31 December 2010, Tri-Union Frozen Foods, LLC (TUFF) was merged with and into Empress International Ltd.

(Empress), a subsidiary of Thai Union International, Inc. The merger was accounted for as a combination of entities

under common control. The surviving entity was Empress and its name was changed to Tri-Union Frozen Products,

Inc. (TUFP). As at 31 December 2010, TUFP is 82% owned by TUI.

On 7 October 2011, Phuket Fishing Co., Ltd., Samui Fishing Co., Ltd., Phang-nga

Fishing Co., Ltd. and Songkla Fishing Co., Ltd., subsidiaries of Thai Union

Manufacturing Co., Ltd. were registered to close the operation and completed the

liquidation in November 2011.

During 2010, the overseas subsidiary established US Pet Nutrition LLC, (USPN) in the

USA to engage in the manufacture and distribution of pet food.

On 5 October 2010, the overseas subsidiary sold its production facility on the America

Samoa Island, including all equipment and machineries that remained at the facility,

to a third party. Tri-Union Samoa Packing Corporation was liquidated effective

31 December 2010. MW Brands Holding SAS was liquidated effective 31 January 2011.

During 2010, the Company invested in 100% ordinary shares of Thai Union Investment

Holding Co., Ltd., a company registered in the Republic of Mauritius, to acquire MW Brands

Holdings SAS in France. The consolidated financial statements include the statement

of financial position of that company as at 31 December 2010 and the profit or loss for

the period from the investment date to 31 December 2010. Such company has

recorded the net assets acquired at their fair value as of the acquisition date. The

remaining excess of the purchase price over the fair value of the net assets acquired

has been recorded as goodwill. However, the Company has recorded some tangible

assets acquired at their net book value, not fair value. The Company is awaiting

tangible a third party appraisal in order to allocate the fair value associated with the

assets. During the second quarter of current year, the subsidiary obtained these

appraisals of the tangible assets from such third party. The appraisal value immaterially

differs from net book value. The Company therefore has not adjusted the value of

goodwill.�During the third quarter of the current year, a subsidiary revised the

component approach of certain assets, resulting in an increase of their net book value

by EUR 0.86 million or Baht 36 million. This adjustment has been reduced in the

goodwill from the acquisition of MW Brands and in accumulated depreciation in those

assets.



Details of the fair values of identifiable assets, liabilities and contingent liabilities of MW Brands

and their net book values, are as follow:

(Unit: Million Baht)

Fair value Net book value

AssetsCash and cash equivalents 643 643

Trade accounts receivable 3,311 3,311

Inventories 5,863 5,519

Property, plant and equipment, net 3,841 3,782

Intangible assets (Note 17) 12,944 172

Other assets 558 391

Total assets 27,160 13,818

LiabilitiesTrade accounts payables 4,608 4,608

Deferred tax liabilities (Note 24) 4,162 -

Other liabilities 982 963

Total liabilities 9,752 5,571

Net asset value 17,408 8,247

Equity of the Company (%) 100

Net assets value attributable to the

company’s investment 17,408

Positive goodwill 11,606

Purchase price 29,014

Less: Cash and cash equivalents of subsidiaries (643)

Net cash paid for purchase of subsidiaries 28,371

Details of acquisition of MW Brands Group are as follows.

(Unit: Million Baht) Purchase price Cash paid 28,742 Direct costs related to the acquisition 272Total 29,014Fair value of net assets received 17,408Goodwill 11,606



The largest fair value adjustments above relate to the recognition of the present value

of the portfolio of trademarks comprising Petit Navire, John West, Hyacinthe

Parmentier, Mareblu and Starkist. The values derived from the royalty approach have

been considered and they have also been corroborated by the profit premium

approach. The royalty approach consists in applying to the trademark revenues derived

from a royalty rate determined by a qualitative and quantitative analysis of the

positioning of the trademarks in the market. The profit premium approach is based on

the difference of EBIT per ton between trademark and private labels activities, which is

then applied on the projected trademark volumes to determine the present value of the

forecasted cash flows. The determined fair value of the trademarks amounts to

Baht12,334 million (EUR296 million), with related deferred tax liabilities of Baht3,917 million

(EUR94 million).�

Relationship with distributors in France of Baht235 million (EUR6 million) and a free

license agreement of the Weight Watchers trademark of Baht210 million (EUR5 million).

The distributor relationship relates to the long term tracked record of the private label

activities in France and has been valuated using the excess earning methodology

which expresses the discounted excess of profitability over the post tax contributory

assets charges. This asset has a definite life of 20 years. The same approach has been

retained to evaluate the Weight Watchers free license agreement corroborated by a

relief from the royalty approach. A definite life of 39 years has been retained. Both

intangible assets have related deferred tax liabilities of Baht140 million (EUR3.4 million).

The Baht1 million amortisation of these two assets has been included in the consolidated

profit or loss for 2010.

The finished goods have also been subject to a fair value evaluation. This resulted in a

Baht344 million (EUR8 million) increased in inventories, with related deferred tax

liabilities of Baht105 million (EUR2.5 million). These inventories had 3 months selling

maturity therefore an amount of Baht156 million (EUR3.8 million), net of deferred tax,

has been released in the consolidated profit or loss for 2010.

The contingent liabilities have also been subject to a review bringing an additional EUR0.4 million

provision related to a withholding tax risk in Ghana. This provision has been released

offsetting the risk effect on the consolidated profit or loss for 2010.



The residual goodwill of EUR272 million represents MW Brands specific positioning in

the whole value chain thanks to its global tax rate which is lower than the tax rates

applied on the recognised items, the cost of the assembled workforce and future

synergies expected to arise in the combined life operations.�

The operating loss of MW Brands Group (included TUIH) from the acquisition date to

31 December 2010 amounting to Baht7 million was included in the consolidated

financial statements. If the combination had taken place at the beginning of the year,

the operating results of MW Brands Group had been included in the consolidated

financial statements as though it had been the Company’s subsidiaries since 1 January 2010,

total revenues and profit in profit or loss for the year ended 31 December 2010 would

have been by Baht18,520 million (EUR458.4 million) and Baht818 million (EUR20.3

million), respectively.

b) Subsidiaries are fully consolidated, being the date on which the Company obtains

control, and continue to be consolidated until the date that such control ceases.

c) The financial statements of the subsidiaries are prepared using the same significant

accounting policies as the Company.

d) The assets and liabilities in the financial statements of overseas subsidiaries are

translated to Baht using the exchange rate prevailing on the end of reporting period,

and revenues and expenses translated using monthly average exchange rates. The

resulting differences are shown under the caption of “Exchange differences on

translation of financial statements in foreign currency” in the statements of changes

in shareholders’ equity.

e) Material balances and transactions between the Company and its subsidiaries have

been eliminated from the consolidated financial statements.

f) Non-controlling interests represent the portion of profit or loss and net assets of the

subsidiaries that are not held by the Group and are presented separately in the

consolidated profit or loss and within equity in the consolidated statement of

financial position.

2.3 The separate financial statements, which present investments in subsidiaries and

associates under the cost method, have been prepared solely for the benefit of the

public.



3. Adoption of new accounting standards during the year

During the current year, the Company adopted a number of revised and new accounting standards, issued by the Federation of Accounting Professions, as listed below.

Accounting standards:

TAS 1 (revised 2009) Presentation of Financial Statements

TAS 2 (revised 2009) Inventories

TAS 7 (revised 2009) Statement of Cash Flows�

TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates

and Errors�

TAS 10 (revised 2009) Events after the Reporting Period

TAS 11 (revised 2009) Construction Contracts

TAS 16 (revised 2009) Property, Plant and Equipment

TAS 17 (revised 2009) Leases

TAS 18 (revised 2009) Revenue

TAS 19 Employee Benefits

TAS 23 (revised 2009) Borrowing Costs

TAS 24 (revised 2009) Related Party Disclosures

TAS 26 Accounting and Reporting by Retirement Benefit Plans

TAS 27 (revised 2009) Consolidated and Separate Financial Statements

TAS 28 (revised 2009) Investments in Associates

TAS 29 Financial Reporting in Hyperinflationary Economies

TAS 31 (revised 2009) Interests in Joint Ventures

TAS 33 (revised 2009) Earnings per Share

TAS 34 (revised 2009) Interim Financial Reporting

TAS 36 (revised 2009) Impairment of Assets

TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets

TAS 38 (revised 2009) Intangible Assets

TAS 40 (revised 2009) Investment Property

Financial reporting standards:

TFRS 2 Share-Based Payment

TFRS 3 (revised 2009) Business Combinations

TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued

Operations

TFRS 6 Exploration for and Evaluation of Mineral Resources

�



Financial Reporting Standard Interpretations:

TFRIC 15 Agreements for the Construction of Real Estate

Accounting Standard Interpretations:

SIC 31 Revenue-Barter Transactions Involving Advertising Services

These accounting standards do not have any significant impact on the financial

statements, except for the following accounting standards.

TAS 19�Employee Benefits

This accounting standard requires employee benefits to be recognised as expense in

the period in which the service is performed by the employee. In particular, an entity

has to evaluate and make a provision for post-employment benefits using actuarial

techniques. The Company and its subsidiaries previously accounted for such employee

benefits when they were incurred.

The Company and its subsidiaries have changed this accounting policy in the current

year and recognise the liability in the transition period through an adjustment to the

beginning balance of retained earnings in the current period. The change will have the

effect of decreasing the profit of the Company and its subsidiaries for the years ended

31 December 2011 by Baht147 million, or 0.15 Baht per share (Separate financial

statements: decreasing profit by Baht25 million, or 0.02 Baht per share). The

cumulative effect of the changes in the accounting policy has been presented in

Note 5 to financial statements.

4. New accounting standards issued during the years not yet effective

The Federation of Accounting Professions issued the following new/revised accounting

standards that are effective for fiscal years beginning on or after 1 January 2013.

Accounting standards:

TAS 12 Income Taxes

TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of

Government Assistance

TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates

Accounting Standard Interpretations:

SIC 10 Government Assistance - No Specific Relation to Operating Activities

SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets

SIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders



The Company’s management believes that these accounting standards will not have

any significant impact on the financial statements for the year when they are initially

applied, except for the following accounting standards.

TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates

This accounting standard requires an entity to identify its functional currency in

accordance with certain conditions in the standard and to record transactions and

report its financial position and operating results in this functional currency, which may

not be Baht.

At present, the management is still evaluating the impact on the financial statements in

the year when this standard is adopted.

5. Cumulative effect of changes in accounting policies due to the adoption of TAS 19

During the current year, the Company made the changes to its significant accounting

policies described in Note 3, as a result of the adoption of TAS 19 Employee Benefits.�

The cumulative effect of the changes in the accounting policies has been separately

presented in the statements of changes in shareholders' equity.

The amounts of adjustments affecting the provision for long-term employee benefits

(net of deferred tax assets of Baht32 million) and unappropriated retained earnings in the

statement of financial position as at 1 January 2011 resulted decreased of Baht571 million

(Separate financial statements: Baht162 million (net of deferred tax assets of Baht7 million)),

excluding the provision that the overseas subsidiaries had already established.

6. Significant accounting policies

6.1 Revenue recognition

Sales of goods

Sales of goods are recognised when the significant risks and rewards of ownership of

the goods have passed to the buyer. Sales are the invoiced value of goods supplied,

excluding value added tax, of goods supplied after deducting discount and allowances.

Sales of merchandise by an overseas subsidiary under commercial agreements are

recognised when the subsidiary’s distributor sells such merchandise. The overseas

subsidiary may be reimbursed for bank charges, warehousing, and certain other costs

incurred in connection with these agreements, and the subsidiary records such

reimbursements as a deduction from cost of sales.



Interest income

Interest income is recognised as interest accrues based on the effective rate method.

Dividends

Dividends are recognised when the right to receive the dividends is established.

Tax coupon received

Subsidies granted by the Ministry of Finance in the form of tax coupons are recognised

as income when the Company obtains written notification of approval of the tax coupon.

6.2 Cash and cash equivalents

Cash and cash equivalents included cash in hand and at banks, and all highly liquid

investments with an original maturity of three months or less and not subject to

withdrawal restrictions.

6.3 Trade accounts receivable

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful

accounts is provided for the estimated losses that may be incurred in collection of

receivables. The allowance is generally based on collection experiences and analysis

of debt aging.

6.4 Inventories

Finished goods and work in process are valued at the lower of standard cost (which

approximates actual cost) and net realisable value. Standard cost includes all

production costs and attributable factory overheads.

Raw materials are valued at cost (first-in, first-out method). Ingredients and packaging

are valued at cost (weighted average method).

Some local subsidiaries record ingredients and packaging using the first-in, first-out method.

The effect of the difference in accounting policy is immaterial to profit and the book values of

inventories in the consolidated financial statements as at 31 December 2011 and 2010.

6.5 Investments

a) Investments in available-for-sale securities are stated at fair value. Changes in the

fair value of these securities are recorded as a separate item in shareholders’

equity, and will be recorded in profit or loss when the securities are sold.

b) Investments in non-marketable equity securities, which the Company classifies as

other investment, are stated at cost net of allowance for loss on diminution in value

(if any).



c) Investments in associates are accounted for in the consolidated financial statements

using the equity method.

d) Investments in subsidiaries and associates are accounted for in the separate

financial statements using the cost method.

The weighted average method is used for computation of the cost of investments.

6.6 Property, plant and equipment and Depreciation

Land is stated at cost. Land improvement, plant and equipment are stated at cost less

accumulated depreciation and allowance for impairment of assets (if any). Depreciation of

land improvement, plant and equipment is calculated by reference to their costs on the

straight-line basis over the following estimated useful lives:

Land improvement, buildings and construction - 3 - 40 years

Machinery and equipment - 3 - 25 years

Furniture and fixtures - 3 - 20 years

Motor vehicles - 3 - 20 years

Depreciation of machinery and equipment, furniture and fixtures and motor vehicles of

an overseas subsidiary is calculated on the declining balance basis over their estimated

useful lives of 5 - 20 years. The effect of the difference in accounting policy is

immaterial to profit or loss.

No depreciation is provided for land and construction in progress.

Equipment under a capital lease is stated at the present value of the minimum lease

payments and amortised on a straight-line method over the lesser of the lease term or

the estimated useful life of the equipment.

Depreciation is included in determining income.

An item of property, plant and equipment is derecognised upon disposal or when no

future economic benefits are expected from its use or disposal. Any gain or loss arising

on disposal of an asset (calculated as the difference between the net disposal proceeds

and the carrying amount of the asset) is included in profit or loss when the asset is

derecognised.



6.7 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an

asset that necessarily takes a substantial period of time to get ready for its intended

use or sale are capitalised as part of the cost of the respective assets. All other

borrowing costs are expensed in the period they are incurred. Borrowing costs consist

of interest and other costs that an entity incurs in connection with the borrowing of

funds.

6.8 Intangible assets

Intangible assets acquired through business combination are initially recognised at their

fair value on the date of business acquisition while intangible assets acquired in other

cases are recognised at cost. Following the initial recognition, the intangible assets are

carried at cost less any accumulated amortisation and any accumulated impairment

losses (if any).

Intangible assets with finite lives are amortised on a systematic basis over the

economic useful life and tested for impairment whenever there is an indication that the

intangible asset may be impaired. The amortisation period and the amortisation method

of such intangible assets are reviewed at least at each financial year end. The

amortisation expense is charged to profit or loss.

A summary of the intangible assets with finite useful lives is as follows.

Useful lives

Trademarks - 5, 10 ,20, 39 years

Copyrights - 1 - 7 years

Computer software - 3, 5, 10 years

Intangible assets with indefinite useful lives are not amortised, but are tested for

impairment annually either individually or at the cash generating unit level.

6.9 Goodwill

Goodwill is initially recorded at cost, which equals to the excess of cost of business

combination over the fair value of the net assets acquired. If the fair value of the net

assets acquired exceeds the cost of business combination, the excess is immediately

recognised as gain in profit or loss.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is tested

for impairment annually and when circumstances indicate that the carrying value may

be impaired.



For the purpose of impairment testing, goodwill acquired in a business combination is

allocated to each of the Company and its subsidiaries’ cash generating units (or group

of cash-generating units) that are expected to benefit from the synergies of the

combination. The Company and its subsidiaries estimate the recoverable amount of

each cash-generating unit (or group of cash-generating units) to which the goodwill

relates. Where the recoverable amount of the cash-generating unit is less than the

carrying amount, an impairment loss is recognised in profit or loss. Impairment losses

relating to goodwill cannot be reversed in future periods.

6.10 Leasehold right and amortisation

Leasehold right is stated at cost less accumulated amortisation. Amortisation of

leasehold right is calculated by reference to its cost on a straight-line basis over the

period of lease.

6.11 Deferred financial fees

Financial expenses related to borrowings that are typically incurred on or before signing

facility agreements and before actual draw down of the loans are recorded as deferred

financial fees. A portion of deferred financial fees proportionate to the amount of the

loan facility already drawn is presented as a deduction against the related loan account

and amortised using the effective interest rate method over the term of the loans.

The amortisation of deferred financial fees is included in determining borrowing costs.

6.12 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by,

the Company, whether directly or indirectly, or which are under common control with

the Company.

They also include associates and individuals which directly or indirectly own a voting

interest in the Company that gives them significant influence over the Company,

key management personnel, directors and officers with authority in the planning and

direction of the Company’s operations.



6.13 Long-term leases

Leases of property, plant or equipment which transfer substantially all the risks and

rewards of ownership are classified as finance leases. Finance leases are capitalised at

the lower of the fair value of the leased assets and the present value of the minimum

lease payments. The outstanding rental obligations, net of finance charges, are

included in other long-term payables, while the interest element is charged to profit or

loss over the lease period. The assets acquired under finance leases is depreciated

over the useful life of the leased assets.

Operating lease payments are recognised as an expense in profit or loss on a straight

line basis over the lease term.

6.14 Foreign currencies

Transactions in foreign currencies are translated into Baht at the exchange rate ruling

at the date of the transaction. Monetary assets and liabilities denominated in foreign

currencies are translated into Baht at the exchange rate ruling at the end of reporting

period.

Gains and losses on exchange are included in determining income.�

6.15 Impairment of assets

At the end of each reporting period, the Company and its subsidiaries performs

impairment reviews in respect of the property, plant and equipment and other intangible

assets whenever events or changes in circumstances indicate that an asset may be

impaired. The Company and its subsidiaries also carries out annual impairment reviews

in respect of goodwill and intangible assets with indefinite useful lives. An impairment

loss is recognised when the recoverable amount of an asset, which is the higher of the

asset’s fair value less costs to sell and its value in use, is less than the carrying

amount. In determining value in use, the estimated future cash flows are discounted to

their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset.

In determining fair value less costs to sell, an appropriate valuation model is used.

These calculations are corroborated by a valuation model that, based on information

available, reflects the amount that the Company and its subsidiaries could obtain from

the disposal of the asset in an arm’s length transaction between knowledgeable, willing

parties, after deducting the costs of disposal.

The Company and its subsidiaries recognized an impairment loss in profit or loss.



6.16 Employee benefits

Short-term employee benefits

Salaries, wages, bonuses and contributions to the social security fund are recognised as

expenses when incurred.

Post-employment benefits (Defined contribution plans)

The Company and its subsidiaries and its employees have jointly established a provident

fund. The fund is monthly contributed by employees and by the Company and its

subsidiaries. The fund’s assets are held in a separate trust fund and the Company and its

subsidiaries' contributions are recognised as expenses when incurred.

� Post-employment benefits (Defined benefit plans)

� The Company and its subsidiaries have obligations in respect of the severance

payments it must make to employees upon retirement under labor law. The Company

and its subsidiaries treat these severance payment obligations as a defined benefit plan.�

The obligation under the defined benefit plan is determined by a professionally qualified

independent actuary based on actuarial techniques, using the projected unit credit

method.

For the first-time adoption of TAS 19 Employee Benefits, the Company and its

subsidiaries elected to recognise the transitional liability, which exceeds the liability that

would have been recognised at the same date under the previous accounting policy,

through an adjustment to the beginning balance of retained earnings in the current

period.

The oversea subsidiary has a define benefit plan covering all of its former production

employees in American Samoa. The benefit are based on a percentage of

compensation during each year of service. The oversea subsidiary makes annual

contributions to the plan equal to the minimum required by applicable regulations.�

6.17 Provisions

Provisions are recognised when the Company and its subsidiaries have a present

obligation as a result of a past event, it is probable that an outflow of resources

embodying economic benefits will be required to settle the obligation, and a reliable

estimate can be made of the amount of the obligation.



6.18 Income tax

Income tax expense represents the sum of corporate income tax currently payable and

deferred tax.

Current tax

Income tax is provided in the accounts at the amount expected to be paid to the

taxation authorities, based on taxable profits determined in accordance with tax

legislation of each country. Income tax of the overseas subsidiaries is provided for in

the accounts based on the taxable profits determined in accordance with tax legislation

of their countries.

Deferred tax

Deferred income tax is provided on temporary differences between the tax bases of

assets and liabilities and their carrying amounts at the end of each reporting period,

using the tax rate enacted at the end of the reporting period.

The Company and its subsidiaries recognise deferred tax liabilities for all taxable

temporary differences while they recognise deferred tax assets for all deductible

temporary differences and tax losses carried forward to the extent that it is probable

that future taxable profit will be available against which such deductible temporary

differences and tax losses carried forward can be utilised.

At each reporting date, the Company and its subsidiaries review and reduce the

carrying amount of deferred tax assets to the extent that it is no longer probable that

sufficient taxable profit will be available to allow all or part of the deferred tax asset to

be utilised.

The Company and its subsidiaries record deferred tax directly to shareholders' equity

if the tax rates to items that are recorded directly to share holders' equity.

6.19 Asset retirement obligations

The overseas subsidiary accounts for asset retirement obligations in accordance with

FASB statement No. 143, “Accounting for Asset Retirement Obligations”. The effect of the

difference in accounting policy is immaterial to profit or loss for the years 2011 and 2010.



6.20 Derivatives

Forward exchange contracts

Receivables and payables arising from forward exchange contracts are translated into

Baht at the rates of exchange ruling at the end of reporting period. Unrecognised gains

and losses from the translation are included in determining income. Premiums or discounts

on forward exchange contracts are amortised on a straight-line basis over the contract

periods.

Interest rate swap contracts

The net amount of interest to be received from or paid to the counterparty under the

interest rate swap contracts is recognised as income or expenses on an accrual basis.

Foreign currency option agreements

The notional amounts of the foreign currency option agreements utilised by the Company

and its subsidiaries are not recognised as assets or liabilities upon inception of the

agreements. Gain and loss from the translation are included in determining income.

7. Significant accounting judgments and estimates

The preparation of financial statements in conformity with generally accepted

accounting principles at times requires management to make subjective judgments and

estimates regarding matters that are inherently uncertain. These judgments and

estimates affect reported amounts and disclosures and actual results could differ.

Significant judgments and estimates are as follows:

Leases

In determining whether a lease is to be classified as an operating lease or finance

lease, the management is required to use judgment regarding whether significant risk

and rewards of ownership of the leased asset have been transferred, taking into

consideration terms and conditions of the arrangement.

Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make

judgment and estimates based upon, among other things, past collection history, aging

profile of outstanding debts and the prevailing economic condition.

Impairment of equity investments�

The Company and its subsidiaries treat available-for-sale investments and other

investments as impaired when the management judges that there has been a



significant or prolonged decline in the fair value below their cost or where other

objective evidence of impairment exists. The determination of what is “significant” or

“prolonged” requires judgment.

Property plant and equipment/Depreciation

In determining depreciation of plant and equipment, the management is required to

make estimates of the useful lives and residual values of the Company’s plant and

equipment and to review estimate useful lives and residual values when there are any

changes.

In addition, the management is required to review property, plant and equipment for

impairment on a periodical basis and record impairment losses in the period when it is

determined that their recoverable amount is lower than the carrying amount. This

requires judgments regarding forecast of future revenues and�expenses relating to the

assets subject to the review.

Goodwill and intangible assets

The initial recognition and measurement of goodwill and other intangible assets, and

subsequent impairment testing, require management to make estimates of cash flows

to be generated by the asset or the cash generating units and to choose a suitable

discount rate in order to calculate the present value of those cash flows.

Deferred tax assets

Deferred tax assets are recognised in respect of temporary differences only to the

extent that it is probable that taxable profit will be available against which these

differences can be utilised. Significant management judgment is required to determine

the amount of deferred tax assets that can be recognised, based upon the likely timing

and level of estimate future profits.

Post-employment benefit under defined benefit plans and other long-term employee benefits

The obligation under the defined benefit plan and other long-term employee benefit

plans is determined based on actuarial techniques. Such determination is made based

on various assumptions, including discount rate, future salary increase rate, mortality

rate and staff turnover rate.

Litigation

The Company and its subsidiaries have contingent liabilities as a result of litigation. The

management has used judgement to assess of the results of the litigation and believes

that no loss will result. Therefore no contingent liabilities are recorded as at the end of

reporting period.



8. Cash and cash equivalents

(Unit: Thousand Baht)


2011 2010 2011 2010

Cash 3,398 3,057 1,572 1,238

Bank deposits 899,122 1,034,240 54,336 13,674

Total 902,520 1,037,297 55,908 14,912

As at 31 December 2011, bank deposits in saving accounts and fixed deposits carried

interests between 0.17 and 1.93% per annum (2010: between 0.04 and 1.37% per

annum).

9. Trade and other receivables



2011 2010 2011 2010Trade receivables - related parties Aged on the basis of due dates

Not yet due 21,050 21,681 1,134,315 1,369,499 Past due

1 - 30 days 40,341 39,254 534,394 249,097 31 - 60 days - 4 358,201 151,800 61 - 90 days - - 447,824 12,672 91 - 120 days - - - 5,082

Total trade receivables - related parties 61,391 60,939 2,474,734 1,788,150

Trade receivables - unrelated partiesAged on the basis of due dates

Not yet due 9,222,755 7,026,107 1,226,524 854,306 Past due

1 - 30 days 1,421,944 1,717,161 170,386 160,023 31 - 60 days 210,035 280,892 5,791 45,664 61 - 90 days 102,888 82,706 1,560 11,109 91 - 120 days 58,582 65,733 - 12,345 121 - 180 days 37,279 50,708 - 9,191 181 - 365 days 66,298 43,026 - 4,768 Over 365 days 164,281 123,853 20,915 326

Total trade receivables - unrelated parties 11,284,062 9,390,186 1,425,176 1,097,732

Total trade receivables 11,345,453 9,451,125 3,899,910 2,885,882 Less: Allowance for doubtful accounts (250,793) (233,267) (25,518) (2,945)

Total trade receivables - net 11,094,660 9,217,858 3,874,392 2,882,937

� � parties 576 565 184,652 175,072

Accrued income 26,688 16,953 11,668 8,378Advance payment 38,867 26,444 17,475 245

Total o 66,131 43,962 213,795 183,695

Total trade and other receivables - net 11,160,791 9,261,820 4,088,187 3,066,632



As at 31 December 2011 and 2010, certain trade accounts receivable of two overseas

subsidiaries have secured their credit facilities as mentioned in Note 19.

10. Related party transactions

During the years, the Company and its subsidiaries had significant business

transactions with related parties. Such transactions are summarised below.


Consolidated Separate

financial statements financial statements Transfer Pricing Policy

2011 2010 2011 2010

Transactions with subsidiaries:

(Eliminated from consolidated financial statements)

Sales - - 10,348 9,222 Cost plus margin

Dividend income - - 1,196 1,207 As declared

Interest income - - 1,049 435 2.55 - 6.40% per annum

(2010: 1.85 - 6.40% per

annum)

Other income - - 41 37 Near market price

Sale of assets - - - 44 Near market price

Purchases of goods - - 1,115 981 Cost plus margin

Purchase of assets - - - 111 Near market price

Interest expense - - 3 12 2.50% per annum (2010:

1.10 - 1.95% per annum)

Management fee - - 52 41 Contract price

Other expenses - - 87 48 Near market price

Transactions with associates:

Sales 26 19 7 6 Cost plus margin

Dividend income 35 12 35 12 As declared

Other income 21 16 - - Near market price

Purchases of goods 9 11 - - Cost plus margin

Purchases service expense 1 1 - - Near market price

Transactions with related companies: � � �Sales 1,064 1,139 238 248 Cost plus margin

Purchases of goods 4,775 3,124 3,910 2,244 Cost plus margin

Transportation expense 44 42 8 10 Near market price

Expenses relating to assets 132 286 54 197 Near market price

The Company and its subsidiaries have insured with Asia-Pacific Risk Consultants

(Thailand) Co., Ltd. which is an insurance broker related by way of having common

directors. During the year 2011, insurance premiums paid through that company

amounted to Baht 52 million (2010: Baht 60 million).



The relationships between the Company and the related parties are summarised below.

List of related companies Relationship

Songkla Canning Pcl. SubsidiaryThai Union Manufacturing Co., Ltd. Subsidiary Thai Union Seafood Co., Ltd. Subsidiary T-Holding Co., Ltd. Subsidiary Thai Union Feedmill Co., Ltd. Subsidiary Thai Union Graphic Co., Ltd. Subsidiary Thai Union International, Inc. (TUI) Subsidiary PT Juifa International Foods Subsidiary Thai Union Investment Holding Co., Ltd. (TUIH) Subsidiary Tri-Union Seafoods, LLC Subsidiary (Held by subsidiary) Tri-Union Frozen products, Inc. (TUFP) Subsidiary (Held by subsidiary) Empress International, Ltd. (Empress) Subsidiary (Held by subsidiary) Tri-Union Frozen Foods, LLC Subsidiary (Held by subsidiary) US Pet Nutrition, LLC (USPN) Subsidiary (Held by subsidiary) Canadian Pet Nutrition, ULC Subsidiary (Held by subsidiary) Empress International of California Ltd. Subsidiary (Held by subsidiary) Empress International Midwest Ltd. Subsidiary (Held by subsidiary) Asian-Pacific Can Co., Ltd. Subsidiary (Held by subsidiary) Yueh Chyang Canned Food Co., Ltd. Subsidiary (Held by subsidiary) Thai Union Hatchery Co., Ltd. Subsidiary (Held by subsidiary) Thai Quality Shrimp Co., Ltd. Subsidiary (Held by subsidiary) Phuket Fishing Co., Ltd. Subsidiary (Held by subsidiary) Samui Fishing Co., Ltd. Subsidiary (Held by subsidiary) Phang-nga Fishing Co., Ltd. Subsidiary (Held by subsidiary) Songkla Fishing Co., Ltd. Subsidiary (Held by subsidiary) Siam Fishing Pte. Ltd. Subsidiary (Held by subsidiary) Thai Union EU Seafood 1 S.A. Subsidiary (Held by subsidiary) Thai Union EU Seafood 2 S.A. Subsidiary (Held by subsidiary) MW Brands SAS Subsidiary (Held by subsidiary) European Seafood Investment Portugal Subsidiary (Held by subsidiary) UK Seafood Investment Limited Subsidiary (Held by subsidiary) John West Food Limited Subsidiary (Held by subsidiary) Mareblu SRL Subsidiary (Held by subsidiary) MW Brands Seychelles Limited Subsidiary (Held by subsidiary) Indian Ocean Tuna Limited Subsidiary (Held by subsidiary) Pioneer Food Cannery Limited Subsidiary (Held by subsidiary) TTV Limited Subsidiary (Held by subsidiary) Mauritius Company Subsidiary (Held by subsidiary)



List of related companies Relationship

Thai Union France Holding SAS Subsidiary (Held by subsidiary) Etablissements Paul Paulet SAS Subsidiary (Held by subsidiary) Irish Seafood Investments Limited Subsidiary (Held by subsidiary) John West Holland BV Subsidiary (Held by subsidiary) Lucky Union Foods Co., Ltd. Associated company Biz Dimension Co., Ltd. Associated company Avanti Thai Aqua Feeds Private Limited Associated company Century Trading (Shanghai) Co., Ltd. Associated company (Held by subsidiary) TN Fine Chemicals Co., Ltd. Associated company (Held by subsidiary) Moresby International Holdings Inc. Associated company (Held by subsidiary) LDH (La Doria) Limited Associated company (Held by subsidiary)

Geminai & Associate Co., Ltd. Common shareholders/Relative of directors

Chansiri Real Estate Co., Ltd. Common major shareholders/Common directors

Thai Union Securities Co., Ltd. Common major shareholders/Common directors

Asian Pacific Thai Tuna Co., Ltd. Common major shareholders/Common directors

T.C. Union Global Pcl. Common major shareholders/Common directors

Jana Fish Industries Limited Common major shareholders/Common directors

T.C. Union Agrotech Co., Ltd. Common major shareholders/Common directors

Waithai Co., Ltd. Common major shareholders/Common directors

Merchant Partners Securities Co., Ltd. Common shareholders/Common directors

Thaipatana Stainless Steel Co., Ltd. Common major shareholders/Common directors

Hanhong Kanchang Registered Ordinary

Partnership Common major shareholders/Common directors

Lucky Surimi Products Co., Ltd. Common directors

Asia-Pacific Risk Consultants (Thailand) Co., Ltd Common shareholders/Common directors

Asia-Pacific Risk Insurance Broker Co., Ltd. Common shareholders/Common directors

Ahead Way International Co., Ltd. Common major shareholders/Common directors

Ekawat Products Co., Ltd. Relative of director

Miss Rungtiwa Boonmechote Relative of director



The balances of the accounts as at 31 December 2011 and 2010 between the

Company and those related parties are as follows:

� � � � (Unit: Thousand Baht)


financial statements financial statements

2011 2010 2011 2010

Trade accounts receivable - related parties (Note 9)

Subsidiaries - - 2,465,524 1,778,370

Associated companies 4,622 7,750 1,056 1,073

Related companies 56,769 53,189 8,154 8,707

Total trade accounts receivable - related parties 61,391 60,939 2,474,734 1,788,150

Trade and other payables - related parties (Note 18)

Subsidiaries - - 220,906 235,982

Associated companies 1,584 2,928 48 56

Related companies 64,724 88,300 22,288 40,036

Total trade and other payables - related parties 66,308 91,228 243,242 276,074

Short-term loans to subsidiaries


Thai Union International, Inc. - - - 545,825

Thai Union Graphic Co., Ltd. - - 80,000 80,000

Total - - 80,000 625,825

Long-term loans to subsidiaries


Thai Union Investment Holding Co., Ltd. - - 15,207,249 13,963,603

Thai Union International, Inc. - - 2,240,991 2,362,748

Thai Union Manufacturing Co., Ltd. - - - 1,794,492

Total - - 17,448,240 18,120,843

Less: Current portion

Thai Union International, Inc. - - (440,335) (897,246)

Thai Union Manufacturing Co., Ltd. - - - (1,794,492)

- - (440,335) (2,691,738)

Net - - 17,007,905 15,429,105






2011 2010 2011 2010

Short-term loans from subsidiaries


Songkla Canning Pcl. - - - 245,840

Total - - - 245,840

During 2011, movements of loans to/from related parties were as follows:


Separate financial statements

Balance as at During the year Balance as at

1 January 2011 Increase Decrease Revaluation 31 December 2011

Short-term loans to subsidiaries

Thai Union International, Inc. 545,825 - (583,055) 37,230 -

Thai Union Manufacturing Co., Ltd. - 254,970 (254,970) - -

Songkla Canning Pcl. - 107,460 (107,460) - -

Thai Union Graphic Co., Ltd. 80,000 13,840 (13,840) - 80,000

625,825 376,270 (959,325) 37,230 80,000

Long-term loans to subsidiaries

Thai Union Investment Holding Co., Ltd. 13,963,603 898,265 - 345,381 15,207,249

Thai Union International, Inc. 2,362,748 674,175 (897,246) 101,314 2,240,991

Thai Union Manufacturing Co., Ltd. 1,794,492 - (1,794,492) - -

18,120,843 1,572,440 (2,691,738) 446,695 17,448,240

Short-term loans from subsidiaries

Thai Union Manufacturing Co., Ltd. - 804,360 (804,360) - -

Songkla Canning Pcl. 245,840 635,090 (880,930) - -

Thai Union Feedmill Co., Ltd. - 11,500 (11,500) - -

245,840 1,450,950 (1,696,790) - -



Directors and management’s benefits

During the years ended 31 December 2011 and 2010, the Company and its subsidiaries

had employee benefits expenses payable to their directors and management as follows:

(Unit: Million Baht) Consolidated ��

financial statements Separate ��

financial statements

2011 2010 2011 2010Short-term employee benefits 614 410 78 52 Post-employment benefits 17 - 4 - Other long-term benefits 5 101 - - Termination benefits 45 24 - -

Total 681 535 82 52

11. Inventory


Consolidated financial statements

Reduce cost to net

Cost realisable value Inventories - net

2011 2010 2011 2010 2011 2010

Finished goods 13,932,395 11,878,951 (251,014) (207,525) 13,681,381 11,671,426

Work in process 66,796 63,625 (328) - 66,468 63,625

Raw materials 7,047,991 5,244,553 (112,276) (84,921) 6,935,715 5,159,632

Ingredient and packaging 1,477,321 1,179,481 (70,225) (62,812) 1,407,096 1,116,669

Goods in transit 542,705 2,923,102 (9,206) - 533,499 2,923,102

Spare parts 3,507,796 411,664 - - 3,507,796 411,664

Total 26,575,004 21,701,376 (443,049) (355,258) 26,131,955 21,346,118





Reduce cost to net

Cost realisable value Inventories - net

2011 2010 2011 2010 2011 2010

Finished goods 1,248,738 841,306 (45,032) (46,123) 1,203,706 795,183

Work in process 21,529 19,875 - - 21,529 19,875

Raw materials 1,745,004 1,276,836 (43,817) (4,567) 1,701,187 1,272,269

Ingredient and packaging 260,433 258,200 (13,463) (16,680) 246,970 241,520

Goods in transit 421,724 74,798 - - 421,724 74,798

Spare parts 23,115 19,681 - - 23,115 19,681

Total 3,720,543 2,490,696 (102,312) (67,370) 3,618,231 2,423,326

Two overseas subsidiaries have mortgaged the certain inventories of that company to

financial institutions to secure its credit facilities as mentioned in Note 19.

12. Restricted deposits with financial institutions

These represent fixed deposits pledged with financial institution to secure credit

facilities.

13. Investments in subsidiaries

Details of investments in subsidiaries as presented in separate financial statements are

as follows.


Shareholding Dividend received

Company’s name Paid-up capital percentage Cost during the year

2011 2010 2011 2010 2011 2010 2011 2010

% %

Songkla Canning Pcl. Baht 360 million Baht 360 million 90.44 90.44 1,379,791 1,379,791 569,744 406,960

Thai Union Manufacturing Baht 300 million Baht 300 million 90.08 90.08 1,212,172 1,212,172 270,254 364,842

Co., Ltd.

Thai Union Seafood Co., Ltd. Baht 300 million Baht 300 million 51.00 51.00 189,316 189,316 - 30,600

T-Holding Co., Ltd. Baht 70 million Baht 70 million 90.00 90.00 20,699 20,699 3,150 -

Thai Union Feedmill Co., Ltd. Baht 500 million Baht 500 million 51.00 51.00 255,000 255,000 307,020 367,200

Thai Union Graphic Co., Ltd. Baht 40 million Baht 40 million 74.00 74.00 45,331 45,331 5,180 10,360

Thai Union International, Inc. USD 13.1 million USD 8.1 million 100.00 100.00 482,170 325,770 - -

(TUI)

PT Juifa International Foods USD 2.7 million USD 2.7 million 88.78 76.50 82,972 69,510 26,577 27,151


Co., Ltd. (TUIH) EUR 22 million EUR 22 million 100.00 100.00 925,256 925,256 - -

Total 4,592,707 4,422,845 1,181,905 1,207,113

Less: Provision for impairment of investments � (26,136) (26,136)

Net � 4,566,571 4,396,709



The shares of MW Brands and its subsidiaries, subsidiaries of Thai Union Investment

Holding Co., Ltd., were pledged as collateral of their subsidiaries long-term loans as

described in Note 20.

During the second quarter of the current year, US Pet Nutrition, LLC (USPN), which is

the subsidiary of Thai Union International, Inc. (TUI), established Canadian Pet

Nutrition, ULC in Canada to engage in the distribution of pet food.

During the fourth quarter of the current year, the Company increased portion of

investment in PT Juifa International Foods, which is the subsidiary of the Company

from 76.50% to 88.78% or amount of Baht 13.5 million.

On 21 December 2011, the meeting of the Board of Directors approved the additional

investment in TUI of not over USD 15 million. During the fourth quarter of the current

year, the Company invested in this company amounting to USD 5 million.

During the first quarter of 2010, Thai Union Seafood Co., Ltd., subsidiary, called-up the

additional 25% of its share capital. The Company additionally invested Baht 25.5 million

in this company.

During the third quarter of 2010, Thai Union Feedmill Co., Ltd., subsidiary, increased in

the registered share capital of Baht 200 million. The Company additionally invested

Baht 102 million in this company.

Acquisition of MW Brands

On 27 July 2010, the meeting of the Company’s Board of Directors approved the

acquisition of MW Brands, which can be summarised as follow.

- Approval of the entry into Share Purchase Agreement and associated ancillary

agreements in regards to the acquisition of shares and business of MW Brands

Holdings SAS (“MW Brands”). MW Brands is a vertically integrated group, which

manufactures and distributes the ambient seafood products through its trademarks.

MW Brands, headquartered in France, has factories in strategic locations close to

two major fishing grounds, Seychelles and Ghana, and also in Portugal and France.

MW Brands market its products across Europe through four main trademarks.

The details of the transaction as prescribed in the Acquisition Rule as follows.

- The Company and the Seller have entered into a sale and purchase

agreement in relation to the Company's proposed acquisition of MW Brands

on 27 July 2010. Completion of the Transaction is conditional on approval

from the Extraordinary General Meeting of Shareholders, which will be held on

2 September 2010 and Competition Clearance.



- The purchaser, Thai Union EU Seafood 2 S.A. incorporated in Luxembourg for

the purposes of the acquisition, which is wholly owned by the Company.

- The Company will purchase 31,367,000 shares of MW Brands, equivalent to

100 % of the issued share capital as at 27 July 2010 of MW Brands and a

maximum number of 417,517 additional shares of MW Brands to be issued

upon exercise of stock-option granted by MW Brands together with the

repayment of long-term debt and shareholders' debt for the amount equivalent

to an enterprise value of EUR 680 million.

- The Company has agreed to pay for 100% of the share capital of MW Brands

as at 27 July 2010 from the sources of funds derived from domestic financial

institutions and overseas for the total enterprise value of up to EUR680 million

(equivalent to Baht28,496 million). The payment shall be made to the seller

and its creditors on the closing date.

- Source of funds

- Long-term loans from 3 leading domestic financial institutions for the

total credit line of up to Baht15,000 million. Such loans will have

maturities of 6 years and 8 years.

- Long-term loans contract with 4 leading foreign financial institutions in the

amount of EUR340 million. Such loans will have maturities of 6 years and

7 years and collateral in the form of shares of MW Brands and its

subsidiaries.

- The Company will issue a convertible bond to private placement investor

worth EUR60 million. The bond will have a tenor of 4 years from the issue

date and an annual coupon of 5% p.a. and an overall yield of 8% p.a.

unless converted into common shares. The bond can be converted into

common shares at any time after the first year at a conversion price of

Baht56 per share (Revised).

- Approval of the execution of Credit Facility Agreements for the acquisition of

shares and business of MW Brands as described above.

- Approval of the reduction of the Company's registered capital from Baht885,090,950

to Baht883,170,950.

- Approval of the increase of the Company's registered capital in the additional

amount of 116,829,050 shares (Baht 1 per share) from the current registered

capital of Baht883,170,950 and the new registered capital will be Baht

1,000,000,000 for the purpose of reserving the issuance of newly issued

convertible bond.



- Approval of the allotment of new ordinary shares from capital increase of

the Company reserving for the issuance of convertible bond as described

above.

- Approval of the issuance and offering of newly issued convertible bond to

specific investors (Private Placement) in the amount not exceeding EUR60 million

as described above.

- Approval of the allotment of remaining ordinary shares from those shares

reserved for the issuance of convertible bond, as preceding paragraph, to the

existing shareholders on a pro rata basis (Right Offering) or to the investors

on a Private Placement basis.

- Approval of the Company's incorporation of its new overseas subsidiary,

commercially referred to as Thai Union Investment Holding Co., Ltd. on the

territory of Republic of Mauritius under total registered capital of EUR 1, which

will be wholly owned by the Company. The Company additionally invested

EUR22 million during 2010. The purpose of the incorporation of Thai Union

Investment Holding is to acquire MW Brands Holdings SAS.

- Approval of the appointment of the Company's appointment of CIMB

Securities (Thailand) Co., Ltd. as an independent financial advisor to give the

Company's directors and shareholders its professional opinions on the

acquisition of MW Brands Holdings SAS.

- Approval of the date and agendas for the Extraordinary General Meeting of

Shareholders No.1/2010 that shall be held on 2 September 2010.

On 2 September 2010, the Extraordinary General Meeting of Shareholders

approved the acquisition of MW Brands, the execution of credit long-term loan

agreements, the reduction and increase of the Company’s registered capital and

the issuance and offering of new convertible bond. The bond are to partially fund

the acquisition of MW Brands’ shares and business in accordance with the

resolution of the Board of Directors meeting held on 27 July 2010. The Company

subsequently received confirmation from the UK Office of Fair Trading regarding its

anti-trust obligations in respect of the merger.

Thai Union EU Seafood 1 S.A., by the Company, purchased 100% interests in

MW Brands and settled the long-term loans and loans from shareholders, which

equaled the total enterprise value of EUR 680 million. The completion date of this

acquisition is 29 October 2010 as described in Note 2.2.



14. Investments in associates

14.1 Details of associates:



Nature Country of Carrying amounts

Company's name of business incorporation Shareholding percentage Cost based on equity method

2011 2010 2011 2010 2011 2010

% %

Investments in associates, directly held by the Company

Lucky Union Foods Co., Ltd. Manufacturer & exporter of

crab sticks

Thailand 25.00 25.00 37,500 37,500 298,386 295,100

Biz Dimension Co., Ltd. E-Commerce under website Thailand 20.00 20.00 1,010 1,010 19,711 17,911

Avanti Thai Aqua Feeds Private Manufacturer & distributor India 50.00 50.00 27,721 27,721 27,721 27,721

Limited of animal feeds

Investments in associates, directly held by subsidiaries

Century Trading (Shanghai) Importer & exporter of food The People's 45.04 45.04 75,900 75,900 25,265 18,337

Co., Ltd. (50% held by Thai Union products Republic of

Manufacturing Co., Ltd.) China

TN Fine Chemical Co., Ltd. Manufacturer & exporter Thailand 44.14 44.14 44,070 44,070 44,894 38,000

(49% held by Thai Union of by-products from

Manufacturing Co., Ltd.) seafoods

Moresby International Holdings Inc. Holding in fishing British Virgin 33.33 33.33 96,981 52,433 96,981 52,433

(33% held by Thai Union company Island


LDH (La Doria) Limited Distributor of food products United 20.00 20.00 95,940 95,940 411,010 388,215

(20% held by MW Brands) Kingdom

379,122 334,574 923,968 837,717

Unit: Thousand Baht


Country of Shareholding

Company's name Nature of business incorporation percentage Cost

2011 2010 2011 2010

% %

Lucky Union Foods Co., Ltd. Manufacturer & exporter of

crab sticks

Thailand 25.00 25.00 37,500 37,500

Biz Dimension Co., Ltd. E-Commerce under website Thailand 20.00 20.00 1,010 1,010

Avanti Thai Aqua Feeds Private Limited Manufacturer & distributor of animal feeds India 50.00 50.00 27,721 27,721

66,231 66,231



14.2 Share of income/loss

During the year, the Company and its subsidiaries have recognised its share of net

income (loss) from investments in associated companies in the consolidated financial

statements as follows:

Unit: Thousand Baht

Consolidated


Company’s name

Share of income (loss) from

investments in associates

during the year

2011 2010

Lucky Union Foods Co., Ltd. 38,287 25,958

Biz Dimension Co., Ltd. 1,801 1,671

Century Trading (Shanghai) Co., Ltd. 6,927 (538)

TN Fine Chemicals Co., Ltd. 6,894 (3,570)

LDH (La Doria) Limited 29,821 -

Total 83,730 23,521

14.3 Summarised financial information of associates

Financial information of associates is summarised below.

(Unit: Million Baht

Company’s name

Paid-up capital as at

31 December

(Unit: Million)

Total assets as at

31 December

Total liabilities as at

31 December

Total revenues

for the years ended

31 December

Profit (loss) for the

years ended

31 December

2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Lucky Union Foods Co., Ltd. Baht150 Baht150 1,726 1,719 560 552 1,297 1,035 153 104

Biz Dimension Co., Ltd. Baht25 Baht25 49 42 6 5 74 76 9 8

Avanti Thai Aqua Feeds Rupee Rupee 71 52 24 1 1 2 1 1

Private Limited 76.9 76.9

Century Trading (Shanghai) Co., Ltd. USD4 USD4 55 46 4 13 225 177 14 (1)

TN Fine Chemicals Co., Ltd. Baht 90 Baht 90 99 116 8 39 100 55 14 (7)

Moresby International Holdings Inc. USD9.4 USD5.0 295 149 - - - - - -

LDH (La Doria) Limited GBP 1 GBP 1 3,758 2,658 2,796 1,602 11,567 9,178 363 244



During the current year, Moresby International Holdings Inc. increased the registered

share capital of USD4.4 million. Thai Union Manufacturing Co., Ltd. additionally

invested USD1.5 million in this company.

Investments in some associates were determined on the basis of financial information

provided by those companies' management. These were unaudited by their external

auditors due to time constraints. However, the values of the investments in associates

are immaterial.

15. Other long-term investments (Unit: Thousand Baht)


2011 2010

Cost Fair value Cost Fair value

Other long-term investments

Available-for-sale securities - Unit trusts 50,546 33,577 55,101 36,989

Unrealised loss on changes in the

value of investments (16,969) (18,112)

Total available-for-sale securities 33,577 36,989

Other investments

- Ordinary shares 36,628 35,580

- Unit trusts 100 100

Total other long-term investments 70,305 72,669


Separate


2011 2010

Other long-term investmentsOther investments - ordinary shares 34,579 34,579



16. Property, plant and equipment

Unit: Thousand Baht


Buildings Assets under

Land and and Machinery Furniture installation and

land building and and Motor under

improvement improvement equipment fixtures vehicles construction Total

Cost

1 January 2010 1,248,104 4,437,996 9,645,069 366,040 418,971 1,104,878 17,221,058

Increase from acquisition of subsidiaries

during the year (Note 2.2) 48,664 1,979,489 4,955,046 292,320 198,649 330,902 7,805,070

Additions 409,111 38,148 75,483 31,574 27,376 2,169,735 2,751,427

Disposals/write off (116,349) (207,788) (1,051,767) (43,191) (33,647) (678) (1,453,420)

Transfer in (out) 31,057 539,753 1,317,522 30,660 59,545 (1,978,537) -

Translation adjustment (3,682) (123,496) (242,559) (22,470) (8,041) (28,754) (429,002)

31 December 2010 1,616,905 6,664,102 14,698,794 654,933 662,853 1,597,546 25,895,133

Additions 44,332 65,307 370,512 27,239 47,848 2,724,477 3,279,715

Disposals/write off - (145,839) (301,968) (42,436) (27,660) (12,412) (530,315)

Transfer to other assets - - - - - (156,138) (156,138)

Transfer in (out) 6,830 546,388 1,595,738 71,631 25,349 (2,245,936) -

Translation adjustment 3,233 67,005 153,337 15,467 6,337 7,768 253,147

31 December 2011 1,671,300 7,196,963 16,516,413 726,834 714,727 1,915,305 28,741,542

Accumulated depreciation

1 January 2010 17,925 1,793,468 5,229,436 284,361 277,713 - 7,602,903

Increase from acquisition of subsidiaries

during the year (Note 2.2) 991 778,613 2,855,075 172,766 156,801 - 3,964,246

Depreciation for the year 4,809 225,011 873,228 35,220 50,108 - 1,188,376

Depreciation for disposals/write off (887) (141,928) (685,292) (37,065) (28,184) - (893,356)

Translation adjustment (131) (51,334) (135,886) (15,360) (6,257) - (208,968)

31 December 2010 22,707 2,603,830 8,136,561 439,922 450,181 - 11,653,201

Depreciation for the year 4,722 325,686 1,094,947 72,736 53,608 - 1,551,699

Depreciation for disposals/write off - (137,489) (111,802) (40,153) (23,443) - (312,887)

Translation adjustment 89 19,468 90,485 9,220 4,667 - 123,929

31 December 2011 27,518 2,811,495 9,210,191 481,725 485,013 - 13,015,942

Allowance for loss on impairment of assets

1 January 2010 - 32,371 215,823 - 3,483 - 251,677

Decrease during the year - - (190,088) - - - (190,088)

Translation adjustment - - (9,830) - - - (9,830)

31 December 2010 - 32,371 15,905 - 3,483 - 51,759

Increase during the year - 33,255 - - - - 33,255

Decrease during the year - - (11,834) - (3,483) - (15,317)

Translation adjustment - - 943 - - - 943

31 December 2011 - 65,626 5,014 - - - 70,640



Unit: Thousand Baht






Net book value

31 December 2010 1,594,198 4,027,901 6,546,328 215,011 209,189 1,597,546 14,190,173

31 December 2011 1,643,782 4,319,842 7,301,209 245,109 229,714 1,915,304 15,654,960

Depreciation for the years

2010 (Baht1,039 million include in manufacturing cost and the balances in selling and administrative expenses) 1,188,376

2011 (Baht1,446 million include in manufacturing cost and the balances in selling and administrative expenses) 1,551,699







Cost

1 January 2010 387,280 1,525,668 1,690,486 51,429 127,518 341,308 4,123,689

Additions 369,912 - 19,158 2,130 7,092 527,717 926,009

Disposals/write off (17,079) - (2,867) (1,851) (1,125) (2,617) (25,539)

Transfer in (out) - 177,158 131,663 6,115 2,710 (317,646) -

31 December 2010 740,113 1,702,826 1,838,440 57,823 136,195 548,762 5,024,159

Additions - 41,758 120,531 5,134 23,464 318,751 509,638

Disposals/write off - - (14,192) (257) (7,913) (114) (22,476)

Transfer in (out) 2,257 269,410 160,925 441 (6,484) (426,549) -

31 December 2011 742,370 2,013,994 2,105,704 63,141 145,262 440,850 5,511,321

Accumulated depreciation

1 January 2010 - 560,751 993,951 26,238 85,311 - 1,666,251

Depreciation for the year - 81,833 216,386 8,465 14,318 - 321,002

Depreciation for disposals/ write off - - (834) (1,731) (1,125) - (3,690)

31 December 2010 - 642,584 1,209,503 32,972 98,504 - 1,983,563

Depreciation for the year - 62,929 190,820 9,381 9,409 - 272,539

Depreciation for disposals/write off - - (7,022) (227) (7,851) - (15,100)

31 December 2011 - 705,513 1,393,301 42,126 100,062 - 2,241,002

Allowance for loss on impairment of assets

1 January 2010 - 32,371 - - 3,483 - 35,854

Increase (Decrease) - - - - - - -

31 December 2010 - 32,371 - - 3,483 - 35,854

Increase during the year - 33,255 - - - - 33,255

Decrease during the year - - - - (3,483) - (3,483)

31 December 2011 - 65,626 - - - - 65,626









Net book value

31 December 2010 740,113 1,027,871 628,937 24,851 34,208 548,762 3,004,742

31 December 2011 742,370 1,242,855 712,403 21,015 45,200 440,850 3,204,693

Depreciation for the years

2010 (Baht 304 million include in manufacturing cost and the balances in selling and administrative expenses) 321,002

2011 (Baht 255 million include in manufacturing cost and the balances in selling and administrative expenses) 272,539

As at 31 December 2011, certain plant and equipment items of the Company and its

subsidiaries have been fully depreciated but are still in use. The gross carrying amount

(before deducting accumulated depreciation) of those assets amounted to

approximately Baht5,189 million (2010: Baht4,664 million).

17. Intangible assets



Covenant

Customer not to Computer Distributor

Licences Trademark Patents relationships complete software relationships Others Total

Cost

At 1 January 2010 47 874 36 141 14 92 - - 1,204

Increase from acquisition of

subsidiaries (Note 2.2) 210 12,585 - - - 159 235 2 13,191

Additions 2 - - - - 9 - - 11

Disposal/write off - - - - - (3) - - (3)

Translation adjustment (7) (622) - (14) (1) (8) (10) - (662)

At 31 December 2010 252 12,837 36 127 13 249 225 2 13,741

Addition - 1 - - - 37 - 1 39

Disposal/write off - - (36) - - - - - (36)

Translation adjustment 12 376 - 7 - 3 7 - 405

31 December 2011 264 13,214 - 134 13 289 232 3 14,149





Covenant

Customer not to Computer Distributor

Licences Trademark Patents relationships complete software relationships Others Total

Amortisation

At 1 January 2010 12 296 - 90 14 78 - - 490


subsidiaries (Note 2.2) - - - - - 65 - - 65

Amortisation 6 - - 13 - 8 1 - 28

Amortisation for disposal/

write off - - - - - (3) - - (3)

Translation adjustment - (28) - (8) (1) (3) - - (40)

At 31 December 2010 18 268 - 95 13 145 1 - 540

Amortisation 9 - - 13 - 31 8 - 61

Translation adjustment - 13 - 5 - 1 - - 19

At 31 December 2011 27 281 - 113 13 177 9 - 620

Impairment

At 1 January 2010 - - - - - - - - -


subsidiaries (Note 2.2) - 182 - - - - - - 182

Translation adjustment - (8) - - - - - - (8)

At 31 December 2010 - 174 - - - - - - 174

Translation adjustment - 5 - - - - - - 5

At 31 December 2011 - ��179� - - - - - - ��179

Net book value

At 31 December 2010 234 12,395 36 32 - 104 224 2 13,027

At 31 December 2011 237 12,754 - 21 - 112 223 3 13,350


Separate ��


Computer software

CostAt 1 January 2010 8.0

Additions 1.0

At 31 December 2010 9.0

Additions 0.7





Separate ��


Computer software

Amortisation At 1 January 2010 7.1

Amortisation 0.4


Amortisation 0.5


Net book value



Acquisition during the year

Licenses, distributor relationships trademark and intangible assets acquired through

business combinations. These licenses and distributor relationships have been granted

for approximately 39 years and 20 years, respectively. Trademarks acquired have

indefinite useful life.

As at 31 December 2011, some trademark of the overseas subsidiary was incorporated

at eligible collateral as mentioned in Note 19.

18. Trade and other payables

� � � � (Unit: Thousand Baht)

� Consolidated ��


Separate ��


� 2011 2010 2011 2010

�Trade payables - related parties 28,047� 39,975� 231,330� 243,513��Trade payables - unrelated parties� 6,444,194� 5,869,655� 833,626� 696,100�Accrued interest expenses to related parties -� -� 8� 445� Accrued expenses - related parties 38,261� 51,253� 11,904� 32,116� Other payables construction and

asset purchase 95,371� 180,495� 24,144� 70,612��Accrued expenses 1,313,202� 1,053,379� 271,230� 254,719�

Total trade and other payables 7,919,075� 7,194,757� 1,372,242� 1,297,505�



19. Bank overdrafts and short-term loans from financial institutions

The Company entered into interest rate swap agreements for short-term loans from

financial institution to hedge interest rate risk, as mentioned in Note 35.1

TUI entered into an amended and restated credit agreement (the TUFP credit facility)

with Bank of America N.A. The TUFP credit facility provides for a USD85 million

revolving facility and expires on 15 October 2013. Borrowings under the credit facility

bear interest, at TUFP’s option, at LIBOR plus a margin of 2.00 to 2.50% per annum, or

the bank’s prime rate plus 1.00 to 1.50% per annum, subject to excess availability

evaluated on a quarterly basis. An unused line fee is charged at 0.25% per annum,

subject to adjustment, on the average daily unused portion of the credit facility.

The credit facility is secured by all accounts receivable and inventory of TUFP.

This revolving credit agreement includes a requirement that all borrowers maintain a

lockbox arrangement whereby cash receipts are used to repay the amounts

outstanding under the revolving agreement. Therefore, all borrowings made under the

TUFP credit agreement will be classified as short-term.

On 16 February 2011, TUFP entered into a second amendment to the TUFP credit

agreement with Bank of America, N.A. for USD15 million temporary increase in the

availability under the TUFP Credit Agreement through 16 May 2011, which was

extended through 15 June 2011 under a TUFP third amendment. Borrowings under the

TUFP amendments No. 2, 3 and 4 bear interest at LIBOR plus 2.25% per annum or the

bank's prime rate plus 1.25% per annum, subject to excess availability evaluated on

a quarterly basis. The unused line fee remains at 0.25% per annum, subject to

adjustment on the average daily unused portion of the credit facility. On 6 June 2011,

TUFP entered into a fourth amendment to the Credit Agreement (TUFP Amendment

No. 4) with BOA, which increased the temporary credit line to USD115 million through

15 July 2011. On 16 July 2011, TUFP further amended the TUFP Credit Agreement

(TUFP Amendment No. 5) to increase the credit line to USD140 million through the

15 October 2013 expiration date, with other terms remaining unchanged from the initial

TUFP Credit Agreement.

As at 31 December 2011, the balance under the credit facility was USD126 million at

interest rate between 2.28 to 4.25% per annum and actual unused availability was

approximately USD12 million. TUFP is subject to certain financial covenants including

interest coverage ratio and leverage coverage ratio and others. As at 31 December 2011,

TUFP determined it was in compliance with these covenants.



Tri-Union Frozen Foods, LLC (TUFF) maintained a revolving credit facility with

Wells Fargo Foothill, LLC until 15 October 2010, which was replaced by TUFP credit

facility. The TUFP Facility provided for borrowing and the issuance of letter of credit of

up to USD45 million subject to limitations based on eligible accounts receivable and

inventory and may be increased to USD75 million under certain conditions. The issuance

of letters of credit reduces the borrowing capacity. Borrowings under the credit

agreement bear interest, at TUFF’s option, at LIBOR plus a margin of 2.75% per annum or

the Central Bank's rate plus 2% per annum. TUFF was subject to certain financial

covenants including fixed coverage ratio and leverage coverage ratio as well as other

operating covenants including limitation capital expenditures, transactions with

affiliates, distributions, and dividends. The facility is guaranteed by the Company and

collateralised by TUFF’s accounts receivable and inventory. In association with the

TUFP Credit Facility in place, TUFF repaid Wells Fargo Foothill, LLC for the entire

outstanding balance on 15 October 2010.

On 11 March 2011, Tri-Union Seafoods, LLC (Tri-U) entered into an amended revolving

credit facility with Bank of America N.A. The credit facility, which expires on 11 March 2014,

provides for borrowings and the issuance of letters of credit up to USD95 million subject

to limitations based on eligible accounts receivable and inventory. The issuance of letters

of credit reduces the amount of borrowing capacity. Borrowings under the credit facility

bear interest, at Tri-U’s option, at LIBOR plus a margin of 2.00% per annum or 2.25%

per annum, the bank's prime rate, or the bank’s prime rate plus 1.00% per annum or

1.25% per annum, depending upon the ratio of amounts outstanding to secured

accounts receivable and inventory, subject to quarterly adjustment. An unused line fee

is charged at 0.375% per annum, subject to adjustment, on the average daily unused

portion of the credit facility. The credit facility is secured by accounts receivable and

inventory of Tri-U. On 6 June 2011, Tri-U amended its credit facility with the above

financial institution to incorporate the "Chicken of the Sea" trademark at eligible collateral

with USD10 million additional availability component loan at LIBOR plus a margin of

3.75% or 4.00% per annum or the bank's prime rate plus 2.75% or 3.00% per annum

within the USD95 million credit line. Until repayment in full of the additional component

loan, borrowing under Tri-U credit facility bears interest at LIBOR plus 2.25% or 2.50%

per annum, or the bank's prime rate plus 1.25% or 1.50% per annum at Tri-U option.

As at 31 December 2011, the balance under the credit facility was USD87 million with

interest rate at 2.63 to 6.00% per annum and actual unused availability was approximately

USD5 million. Tri-U is subject to certain financial covenants including an interest

coverage ratio and leverage ratio and other covenants, including limitations on

indebtedness capital leases capital expenditures, transactions with affiliates, distributions,

and dividends. Tri-U determined it was not in compliance with these covenants as of



31 December 2011. The financial institution has the right to call the debt immediately

due and payable. As of 10 February 2012, management has not received any

notification from the bank that it intends to call the debts. The Company is currently

engaged in negotiations with the financial institution to modify the terms of the

covenants in order to be in compliance through at least 31 December 2012. There can

be no assurances that Tri-U will be successful in negotiating a debt modification.

The Company has confirmed to Tri-U that it will provide financial support sufficient for

Tri-U to satisfy its obligations and debt service requirements as they come due until at

least 1 January 2013.

20. Long-term loans

Long-term loans as at 31 December 2011 and 2010 consist of:


Consolidated


Separate


2011 2010 2011 2010

USD loans 9 8 - -

Baht loans 3,092 10,259 2,250 9,000

EUR loans 13,240 13,589 - -

Less: Deferred financial fees (742) (839) - (103)

Total 15,599 23,017 2,250 8,897

Less: Current portion (984) (516) - -

Net 14,615 22,501 2,250 8,897

During the third quarter of 2006, a local subsidiary entered into two loan agreements

amounting to Baht150 million with two local financial institutions. The loans carry interest

at MLR minus 1.25% per annum and MLR minus 0.50% per annum. These loans are to be

repaid within year 2013 and have been guaranteed by a local subsidiary. During the

second quarter of the current year, the above subsidiary had already paid the principal

in full amount.

During the second quarter of 2007, a local subsidiary drew Baht380 million of two loan

agreements from a local financial institution. The loans carry interest at 4.85% per annum,

and THBFIX plus 0.5% per annum. These loans are to be repaid within year 2012.

As at 31 December 2011, the balance of this loan is Baht24 million.



During the third quarter of 2007, a local subsidiary entered into a 7-year loan

agreement amounting to Baht1,190 million with a local financial institution. The loan

carries interest at THBFIX plus 0.39% per annum and is to be repaid in semi-annually

installments, the first of which will be due in January 2011. The loan contains covenants

relating to various matters stipulated in the agreement. However, during 2008, the above

subsidiary had repaid principal amount of Baht100 million. As at 31 December 2011,

the balance of this loan was Baht818 million.

During the last quarter of 2010, the Company has entered into, two unsecured loan

agreements 6-year and 8-year, amounting to Baht9,000 million in total with the group of

financial institutions. The loan carries interest at THBFIX plus 1.50 to 1.75% per annum

and is to be repaid within year 2019. However, during the current quarter, the Company

had restructured and had already paid in full.

In 2010, an overseas subsidiary has entered into loan agreements with four overseas

financial institutions to acquire EUR340 million loans. The loans carry interest at the

LIBOR plus 4.5 to 5.0% per annum, are to be repaid within 6 years and 7 years and

secured by the shares of MW Brands and its subsidiaries.

During the third quarter of 2011, the Company has entered into a 7-year loan

agreement amounting to Baht2,250 million with a local financial institution. The loan

carries interest at THBFIX per annum and is to be repaid in quarterly installments, the

first of which will be due in October 2013. The loan contains covenants relating to

various matters stipulated in the agreement. As at 31 December 2011, the balance of

this loan was Baht2,250 million.

21. Debentures

On 26 October 2005, a meeting of the Company’s Board of Directors approved the

issuance of debentures of the Company and/or its subsidiary companies in an amount

of up to Baht8,500 million or the equivalent of another currency, for the purposes of

refinancing debt and future expansion. Such debentures may be offered to the public

and/or institutional investors and/or local and/or foreign investors.

On 7 June 2007, the Company issued Baht3,200 million (3,200,000 units of debentures of

Baht1,000 each) of registered, unsubordinated, unsecured debentures with no trustee, with

interest rate at 3.91% per annum and the redemption in full is due in June 2011.

The Company already paid in full in June 2011.



On 12 November 2008, the Company issued the 2-year debentures of Baht1,500 million

(1,500,000 units of debentures of Baht1,000 each) of registered, unsubordinated,

unsecured debentures with no trustee, with interest rate at 4.7% per annum, which

redeemed on the maturity date in 2010 and the 5-year debentures of Baht500 million

(500,000 units of debentures of Baht1,000 each) of registered, unsubordinated, unsecured

debentures with no trustee, with interest rate at 5.5% per annum and the redemption is due

in 2013.

On 25 April 2011, the Annual General Meeting of Shareholders approved the increase

of credit limit for issuance of debentures of the Company and/or its subsidiaries in an

amount of up to Baht15,000 million or the equivalent in other currencies, for the

purpose of refinancing debt and future expansion. Such debentures may be offered to

the public and/or institutional investors and/or local and/or foreign investors.

On 27 July 2011, the Company issued three debentures the 3 to 10 year debentures of

Baht6,750 million (6,750,000 units of debentures of Baht1,000 each) of registered,

unsubordinated, unsecured debentures with no trustee, with interest rate at 4.51 to

5.02% per annum and the redemption is due in 2014, 2016 and 2021.

The debentures contain covenants relating to various matters such as the maintenance

of debt to shareholders’ equity ratio and interest cover ratio, and certain conditions in

issuance of debentures agreements, for example, annual dividend payment in the form

of cash exceeding 60 percent of net income of the year is prohibited, etc.

22. Convertible bond

On 2 September 2010, the Extraordinary General Meeting of Shareholders approved

the issuance non-secured convertible bond to specific investors (Private Placement) of

EUR 60 million. The bond has a tenor of 4 years and an annual coupon of 5% p.a. and

an overall yield of 8% p.a. unless converted into common shares. The bond can be

converted into common shares at any time after the first year at a conversion price of

Baht 56 per share. On 27 October 2010, the Company issued these convertible bond.

The convertible bond contains covenants relating to various matters.

According to the Thai Accounting Standard No. 107 “Financial Instruments: Disclosure

and Presentation”, the issuer of convertible bond is required to classify the bond’s

liability and equity components and present them separately from the owner’s equity in

the statements of financial position. However, the rate of interest payable in the future

on the convertible bond was the same as the market rate prevailing on the date of bond

issuance. The Company therefore recorded all the convertible bond as liabilities.

The liability component continues to be presented on an amortised cost basis, until

conversion to ordinary shares or maturity of the bond.



23. Provision for long-term employee benefits

The amount related to long-term employee benefits recognised in profit or loss and the

statements of financial position are summarised below.

(Unit: Thousand Baht)2011


SeparateFinancial statements

Current service cost 85,501 16,958 Interest cost 61,351 7,782Long-term employee benefit expenses for the years 146,852 24,740

Defined benefit obligation 1,062,945 190,433

Fair value of plan assets (70,467) -

Provisions for long-term employee benefits

992,478 190,433

The changes in the present value of the defined benefit obligation are as follow:


2011

Consolidated


Separate


Defined benefit obligation at beginning of year 397,714 -

Cumulative effect of change in accounting policy

for employee benefits adjusted against

beginning balance of retained earnings (Note 5) 603,395 169,096

Current service cost 91,535 16,958

Interest cost 62,821 7,782

Benefits paid during the year (125,326) (3,403)

Actuarial losses 17,934 -

Translation adjustment 14,872 -

Defined benefit obligation at end of year 1,062,945 190,433



The change in the fair value of plan assets is as follows:


2011

Consolidated


Separate


Fair value of plan assets at beginning of year 115,292 -

Expected return on plan assets (8,851) -

Contributions 41,745 -

Benefits paid during the year (87,471) -

Actuarial losses 5,482 -

Translation adjustments 4,270 -

Fair value of plan assets at end of year 70,467 -

The major categories of plan assets as a percentage of total plan assets are as

follows:

2011

Consolidated


Separate


% %

Equity securities 64 -

Debt securities 36 -

Principal actuarial assumptions at the valuation date were as follows:

� Consolidated financial statements Separate financial statements

� 2011 2010� 2011 2010�

(% per annum) (% per annum) (% per annum) (% per annum)

Discount rate 4.2 - 12.4 4.2 - 12.4 4.7 4.7

Future salary increase rate

(depending on age of employee) 3.0 - 10.0 3.0 - 10.0 3.5 - 10.0 3.5 - 10.0

Staff turnover rate 1.0 - 30.0 1.0 - 30.0 2.5 - 30.0 2.5 - 30.0



24. Income tax/deferred tax assets (liabilities)

Income tax expenses for the years ended 31 December 2011 and 2010 are made up

as follows:




2011 2010 2011 2010

Current income tax:

Current income tax charge 586 293 119 79

Translation adjustment 11 13 - -

Expense (income) in deferred income tax (405) 323 (9) (1)

Income tax expense reported in income statements 192 629 110 78

Reconciliation between tax expenses and the product of accounting profit multiplied by

the applicable tax rates for the year ended 31 December 2011 and 2010.




2011 2010 2011 2010

Accounting profit before corporate income tax 6,217 3,981 3,133 2,029

Applicable tax rate 10-35% 10-35% 30% 25-30%

Accounting profit before tax multiplied by

applicable tax rate 2,075 1,150 940 594

Tax adjust for prior year (2) (1) - -

Tax effect of intercompany transactions (345) 449 - -

Tax effect for:

investment promotion (Note 28) (1,310) (665) (481) (149)

tax-exempt incomes and non-deductible expenses (168) 2 (341) (366)

Increase in deferred tax assets (155) (693) (9) (1)

Increase in deferred tax liabilities 97 387 1 -

Corporate income tax in income statements 192 629 110 78



As at 31 December 2011 and 2010 the components of deferred tax assets and deferred

tax liabilities are as follows:


Consolidated � Separate �


2011 2010 2011 2010

Deferred tax assets

Tax losses brought forward 566 157 - -

Tax effect of non-deductible expenses

Allowance for doubtful accounts 20 19 5 1

Allowance for devaluation in

the value of inventories 118 73 4 9

Assets value 13 9 13 9

Other allowance 21 2 - -

Provision for long-term employee benefit 49 - 5 -

Accrued liabilities 125 159 - -

Inventory cost capitalisation 142 79 - -

Others 9 1 8 -

Total 1,063 499 35 19

Deferred tax liabilities

Depreciation and amortisation 472 373 1 -

Intangible assets 3,853 3,749 - -

Prepaid expense 19 14 - -

Others reserves 207 149 - -

Other 367 356 - -

Total 4,918 4,641 1 -

The above deferred tax liabilities included the deferred tax liabilities of EUR 100 million

from the appraised value of fair value of intangible assets at acquisition date as

discussed in note 2.2.

In October 2011, the cabinet passed a resolution to reduce the corporate income tax

rate from 30 percent to 23 percent in 2012, and then to 20 percent from 2013.

In addition, in order to comply with the resolution of the cabinet, in December 2011, the

decreases in tax rates for 2012 - 2014 were enacted through a royal decree.

The Company reflected the changes in tax rates in its deferred tax calculation, as

presented above.



25. Share capital

� On 2 September 2010, the Extraordinary General Meeting of Shareholders of the

Company approved the following resolutions relating to changes in the Company’s

registered share capital.

� 1) Approved the reduction of registered share capital of the Company from

Baht885,090,950 to Baht883,170,950.

2) Approved the increase of registered share capital of the Company from

Baht883,170,950 to Baht1,000,000,000.

The above reduction and increase of registered share capital were made for the

purposes of the acquisition of MW Brands, as described in Note 13. The Company

registered the reduction and increase in its registered share capital with the Ministry of

Commerce on 10 September 2010 and 13 September 2010, respectively.

Reconciliation of the number of issued and paid-up share capital

Unit: Shares

For the years ended 31 December

2011 2010

Number of ordinary shares at the beginning of year 956,329,407 883,170,950

Increase in the number of ordinary shares due to

share capital increase* - 73,158,457

Number of ordinary shares at the end of year 956,329,407 956,329,407

* The Company allocated the new 73,158,457 shares to the existing shareholders at

the ratio of 20 existing common shares to 1 newly issued shares. The shares were offer

at a price of Baht 50 per share, totaling 44,158,457 shares. In addition, the Company

allocated 29,000,000 shares through private placement at the subscription price of

Baht53 per share. The Company registered its additional shares with the Ministry of

Commerce on 27 October 2010 and the shares were first traded on Stock Exchange of

Thailand on 29 October 2010.

26. Statutory reserve

Pursuant to section 116 of the Public Limited Companies Act B.E. 2535, the Company

is required to set aside a statutory reserve at least 5% of its net income after deducting

accumulated deficit brought forward (if any) until the reserve reaches 10% of the

registered share capital. The statutory reserve is not available for dividend distribution.



27. Expenses by nature

Significant expenses by nature are as follow:



2011 2010 2011 2010

Salary and wages and other employee benefits 8,620,366 5,486,862 1,944,049 1,740,563

Depreciation 1,551,699 1,188,376 272,539 321,002

Amortisation expenses 64,475 30,575 473 394

Loss on impairment 34,681 - 29,772 -

Rental expenses under operating lease agreements 737,568 582,988 184,220 249,438

Raw materials, consumables used

and finished goods purchased 59,485,850 49,226,353 17,867,630 15,440,499

Changes in inventories of finished

goods and work in progress (2,056,615) (2,892,682) (409,086) 702,711

28. Promotional privileges

The Company has been granted promotional privileges by the Board of Investment to

carry on the activity of producing frozen seafood, processed and semi- processed food

and others. In addition, five subsidiaries were granted promotional privileges by the

Board of Investment to produce frozen seafood, processed and semi-processed food,

processed animal feeds and others. Subject to certain imposed conditions, the tax

privileges of the Company and these subsidiaries include the following:

- Exemption from corporate income tax on income from the promoted activities for a

period of 8 years, to the extent that the amount of tax exempted does not exceed

investment capital exclusive of land and working capital for manufacturing frozen

seafood and canned pet food and for a period of 8 years for semi-canned food and

frozen ready-meal commencing as from the date of first earning operating income.

In case that there are losses incurred during the corporate income tax exemption

period, the Company and its subsidiaries are allowed to utilise the losses as

a deduction against net income of future years after the expiry of the tax exemption

period but with a time limit of 5 years after that period.

- Exemption from income tax on dividend paid to the shareholders from the income of

the promoted operation during the corporate income tax exemption period.



- Exemption from import duty on raw materials and essential materials imported for

use specifically in producing for export for a period of 1 year and/or 5 years as from

the date of first import.

- Exemption from import duty on items which the promoted person imports for

re-export for a period of 1 year and/or 5 years as from the date of first import.

- Five percent of any increment in export income over that of the preceding year is

deductible from taxable income for a period of ten years commencing as from the

date of first earning operating income, provided that the export sales of that year

are not lower than the average export sales of the past three years, except for the

first two years.

- Exemption from import duty on machinery as approved by the Board.

In addition, subsidiaries have been accorded the following additional privileges:

- A fifty percent reduction of corporate income tax on their net income, for a period of

5 years after the corporate income tax exemption expired.

- Permission to double deduct the costs of transportation, electricity and water supply

for corporate income tax purpose, for a period of 10 years, commencing as from the

date of first earning operating income.

- Permission to deduct twenty five percent of the cost of public utilities, in addition to

normal depreciation charges.

The Company’s operation revenues for the years are below shown divided according to

promoted and non-promoted activities. (Unit: Thousand Baht)

2011 2010

B.O.I. Non - B.O.I. B.O.I. Non - B.O.I.

promoted promoted Total promoted promoted Total

Revenues

��Sales

Local 2,784,983 775,403 3,560,386 1,930,745 1,025,087 2,955,832

Export 19,735,527 429,818 20,165,345 15,716,541 2,511,607 18,228,148

Other income 126,051 2,388,842 2,514,893 405,829 1,803,291 2,209,120

Total revenues 22,646,561 3,594,063 26,240,624 18,053,115 5,339,985 23,393,100

29. Earnings per share

Basic earnings per share is calculated by dividing profit for the year attributable to

equity holders of the Company (excluding other comprehensive income) by the

weighted average number of ordinary shares in issue during the year.



Diluted earnings per share is calculated by dividing profit for the year attributable to

equity holders of the Company (excluding other comprehensive income) by the

weighted average number of ordinary shares in issue during the year plus the weighted

average number of ordinary shares which would need to be issued to convert all

dilutive potential ordinary shares into ordinary shares. The calculation assumes that the

conversion took place either at the beginning of the year or on the date the potential

ordinary shares were issued.

For the year ended 31 December 2011

Weighted

Profit for the year average Earnings per share

Consolidated Separate number of Consolidated Separate

financial financial ordinary financial financial

statements statements shares statements statements

Million Baht Million Baht Million share Baht Baht

Basic earnings per share

Profit attributable to equity holders of the parent� 5,075 3,023 956.3 5.30 3.16

Add: Interest expense from convertible bond

recognised during the year 90 90 -

Effect of dilutive potential ordinary shares - - 42.9

Diluted earnings per share

Profit of ordinary shareholders assuming

the conversion of warrants to ordinary shares 5,165 3,113 999.2 5.17 3.11

For the year ended 31 December 2010

Weighted

Profit for the year average Earnings per share

Consolidated Separate number of Consolidated Separate

financial financial ordinary financial financial

statements statements shares statements statements

Million Baht Million Baht Million share Baht Baht

Basic earnings per share

Profit attributable to equity holders of the parent 2,874 1,951 897.4 3.20 2.17

Add: Interest expense from convertible bond

recognised during the year 22 22 -

Effect of dilutive potential ordinary shares - - 7.8

Diluted earnings per share

Profit of ordinary shareholders assuming

the conversion of warrants to ordinary shares 2,896 1,973 905.2 3.19 2.17



30. Segment information

The operations of the Company and its subsidiaries principally involve the production,

distribution and export of frozen seafood products. Some overseas subsidiaries of

which the principal business activity is overseas investments. These activities are

carried out in Thailand and overseas. Their income comes from both local and export

sales. Below is the consolidated financial information for the years ended

31 December 2011 and 2010 of the Company and its subsidiaries by segment.


Frozen and canned

food products Other businesses Total Elimination Grand total

2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Sales

- Local 4,571 3,704 11,221 10,532 15,792 14,236 (6,129) (4,893) 9,663 9,343

- Export 102,509 74,844 898 668 103,407 75,512 (14,400) (13,348) 89,007 62,164

Total sales 107,080 78,548 12,119 11,200 119,199 89,748 (20,529) (18,241) 98,670 71,507

Segment operating income 7,772 3,275 1,323 1,297 9,095 4,572 (646) 152 8,449 4,724

Unallocated income (expenses):

Interest income 10 5

Administrative expenses (54) (8)

Share of profit from investment in associated companies 84 24

Finance cost (2,272) (764)

Corporate income tax (192) (629)

Profit attributable to non-controlling interests of the subsidiaries (950) (478)

Profit attributable to equity holders of the company 5,075 2,874

Financial information of the Company and its subsidiaries presented by geographical

segment for the years ended 31 December 2011 and 2010 is as follows:


Thailand Overseas Total Elimination Grand total

2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Sales

- Frozen and canned

food products 51,330 44,430 55,750 34,118 107,080 78,548 (18,433) (16,278) 88,647 62,270

- Other businesses 12,119 11,200 - - 12,119 11,200 (2,096) (1,963) 10,023 9,237

Total sales 63,449 55,630 55,750 34,118 119,199 89,748 (20,529) (18,241) 98,670 71,507

Segment operating income 8,449 4,724

Property, plant and equipment 9,248 9,562 6,219 4,592 15,467 14,154 188 36 15,655 14,190

Unallocated assets 67,575 60,587

Total assets 83,230 74,777

Transfer prices between the Company and its subsidiaries are as set out in Note 10.



31. Provident fund

The Company, the local subsidiaries and their employees have jointly established provident

funds under the Provident Fund Act B.E. 2530. The funds are contributed to on a monthly

basis, by the employees at rates ranging from 2 to 5 percent of the basic salaries, and by

the Company and its local subsidiaries at rates ranging from 2 to 10 percent, based on the

length of employment. The Company’s fund is managed by MFC Asset Management Pcl.

and the local subsidiaries’ fund is managed by American International Assurance Co., Ltd.

and TISCO Asset Management Co., Ltd.

During the year 2011, the Company and its local subsidiaries contributed approximately

Baht45 million (2010: Baht42 million) to the fund�

32. Provision for changes in the value of pension fund

An overseas subsidiary has established a pension fund under which it matches

participants’ contributions under these plans at a rate of 50 percent of an employee’s

contribution up to a maximum of 6 percent of eligible compensation. The overseas

subsidiary contributed USD0.4 million to the fund in the year 2011 (2010: USD0.4 million).

33. Dividends


Dividend

Dividends Approved by Total dividends per share

(Baht per share)

Final dividends for 2009 Annual General Meeting of the

shareholders on 22 March 2010 883 1.00

Interim dividends for 2010 Board of Directors’ meeting on �

4 August 2010 883� 1.00

Interim dividends for 2010 Board of Directors’ meeting on

30 September 2010 230 0.26

Total dividends for 2010 1,996

Interim dividends for 2011 Annual General Meeting of the

shareholders on 25 April 2011 325 0.34

Interim dividends for 2011 Board of Directors’ meeting on

5 August 2011 870 0.91

Total dividends for 2011 1,195



34. Commitments and contingent liabilities

34.1 Commitments

As at 31 December 2011, the Company and its subsidiaries have the following

commitments:

a) The Company and its subsidiaries have the commitments under the following

agreements:

Payable within

Less than 1 year 1 to 5 years More than 5 years Total

Office rental and service agreements Baht 52 million Baht 57 million Baht 9 million Baht 118 million

EUR 1 million EUR 2 million - EUR 3 million

Land lease agreements - Baht 3 million Baht 3 million Baht 6 million

USD 3 million USD 9 million USD 3 million USD 15 million

- EUR 1 million EUR 1 million EUR 2 million

Car lease agreements Baht 5 million Baht 4 million - Baht 9 million

EUR 1 million - - EUR 1 million

Machine lease agreements Baht 2 million Baht 4 million - Baht 6 million

- USD 1 million - USD 1 million

Computer & copy machine lease

Agreements Baht 39 million Baht 66 million - Baht 105 million

Warehouse and factory �

construction agreements Baht 65 million - - Baht 65 million

Purchase machinery, equipment

and vehicle agreements Baht 58 million - - Baht 58 million

Advertising agreements Baht 9 million - - Baht 9 million

Communication agreements Baht 1 million Baht 1 million - Baht 2 million

Advisory agreements Baht 14 million - - Baht 14 million

Marketing and management

service agreements Baht 1 million - - Baht 1 million

Internet network service agreements Baht 3 million Baht 7 million - Baht 10 million

b) The Company and its subsidiaries are committed to pay the uncalled portions of

their investments as follows:

Amount

The local subsidiary Baht 51.0 million

The overseas subsidiary USD 1.9 million

The overseas associates USD 2.3 million

c) The overseas subsidiary has agreed to make payments under royalty agreements

for the use of certain production machinery and equipment. The agreements require

fixed payments plus an additional sum based on output. Total payments made

under these arrangement for the year ended 2011 amounting to USD1 million

(2010: USD1 million).



d) The Office of the Attorney General of a US state filed a lawsuit against the three

largest canned tuna companies in the US, including TUI, for failure to warn

consumers that certain tuna contains mercury. Such case was dismissed on

8 January 2007. However, the plaintiff filed a notice of appeal and the appeal was

granted on 19 August 2008. TUI filed a petition for an en banc appeal, which was

denied. On 13 January 2009, TUI filed a petition with the Supreme Court, which the

Court has declined to hear. Each party has subsequently filed motions and are

currently awaiting the Judge’s rulings. TUI is unable to predict the probable

outcome of this matter. As such, TUI has no accrual related to this matter as of

31 December 2011.

34.2 Guarantees

a) As at 31 December 2011, there were outstanding bank guarantees of approximately

Baht54 million and USD4 million (2010: Baht58 million and USD5 million) issued by

banks on behalf of the Company in respect of certain performance bonds as required in

the normal course of business.

b) As at 31 December 2011, there were outstanding bank guarantees of approximately

Baht92 million (2010: Baht103 million) issued by banks on behalf of the subsidiaries in

respect of certain performance bonds as required in the normal course of business.

35. Financial instruments

35.1 Financial risk management

The Company and its subsidiaries’ financial instruments, as defined under Thai Accounting

Standard No. 107 “Financial Instruments: Disclosure and Presentations”, principally

comprise cash and cash equivalents, restricted deposits with financial institutions, trade

accounts receivable, loans, investments, accounts payable, short-term loans, long-term

loans, debentures and convertible bond. The financial risks associated with these financial

instruments and how they are managed are described below.



Credit risk

The Company and its subsidiaries are exposed to credit risk primarily with respect to

trade accounts receivable and loans. The Company and its subsidiaries manage the

risk by adopting appropriate credit control policies and procedures and therefore do not

expect to incur material financial losses. The maximum exposure to credit risk is limited

to the carrying amounts of receivables and loans as stated in the statement of financial

position.

Interest rate risk

The Company and its subsidiaries’ exposure to interest rate risk relates primarily to its

deposits at financial institutions, bank overdrafts, short-term borrowings, long-term

borrowings, debentures and convertible bond. However, since most of the Company

and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed

interest rates which are close to the market rate, including the Company and its

subsidiaries had entered into interest rate swap agreements. The interest rate risk is

expected to be minimal.

Significant financial assets and liabilities as at 31 December 2011 classified by type of

interest rates are summarised in the table below, with those financial assets and

liabilities that carry fixed interest rates further classified based on the maturity date, or

the repricing date if this occurs before the maturity date.Consolidated financial statements as at 31 December 2011

Fixed interest rates

Within Over Floating Non- interest

1 year 1-5 years 5 years interest rate bearing Total Interest rate

(Million Baht) (% p.a.)

Financial assets

Cash and cash equivalents - - - 543 360 903 0.17 - 1.93

Trade and other receivables - - - - 11,161 11,161 -

Restricted deposits with financial

institutions - - - 12 - 12 0.62

Long-term loans to other companies 4 12 13 - - 29 3.00 - 3.75

4 12 13 555 11,521 12,105

Financial liabilities

Bank overdrafts and short-term loans

from financial institutions 7,673 - - 6,804 - 14,477 2.43 - 4.70

Trade and other payables - - - - 7,919 7,919 -

Long-term loans 10 - 9 15,580 - 15,599 3.69 - 5.00

Debentures - 5,733 1,495 - - 7,228 4.69

Convertible bond - 2,462 - - - 2,462 5.00

7,683 8,195 1,504 22,384 7,919 47,685



Separate financial statements as at 31 December 2011

Fixed interest rates

Within Over Floating Non- interest

1 year 1-5 years 5 years interest rate bearing Total Interest rate

(Million Baht) (% p.a.)

Financial assets

Cash and cash equivalents - - - 30 26 56 0.17

Trade and other receivables - - - - 4,088 4,088 -

Short-term loans to subsidiaries 80 - - - - 80 3.05

Long-term loans to subsidiaries 440 - 15,207 1,801 - 17,448 0.48 - 6.25

520 - 15,207 1,831 4,114 21,672

Financial liabilities

Bank overdrafts and short-term loans

from financial institutions 3,554 - - - - 3,554 3.24

Trade and other payables - - - - 1,372 1,372 -

Long-term loans - - - 2,250 - 2,250 3.91

Debentures - 5,733 1,495 - - 7,228 4.69

Convertible bond - 2,462 - - - 2,462 5.00

3,554 8,195 1,495 2,250 1,372 16,866

The Company and its subsidiaries entered into interest rate swap agreements to

manage risk associated with the financial liabilities carrying floating interest. The details

of short-term loans from financial institutions and long-term loans are set out in

Notes 19 and 20. The detail of the interest rate swap agreement outstanding as at

31 December 2011 is as follows:

The Company

Principal amount�Interest Revenue Rate Swap

agreements Interest Expense Rate

Swap agreements Terminal date

1 Baht2,040 million (first 2 years) Baht170-1,700 million (remaining 4 years)

Float rate 3-month THBFIX-Reuters plus 1.50% (first 2 years)

Float rate 3-month THBFIX-Reuters plus 1.75% (remaining 4 years)

Fixed rate 4.522% October 2016

2 Baht510 million (first 2 years) Baht42.5-425 million (remaining 4 years)

Float rate 3-month THBFIX-Reuters plus 1.50% (first 2 years)

Float rate 3-month THBFIX-Reuters plus 1.75% (remaining 4 years)

Fixed rate 4.48% October 2016

3 Baht500 million Float rate 3-month THBFIX-Reuters

Fixed rate 3.39% August 2015

4 Baht500 million Float rate 6-month THBFIX Fixed rate 3.50% August 2015



Subsidiaries

Principal amount

Interest Revenue Rate Swap agreements

Interest Expense Rate Swap agreements Terminal date

1 EUR94 million� Float rate 3-month EURIBOR Fixed rate 2.70 % October 2017 2 EUR132 million� Float rate 3-month EURIBOR Fixed rate 2.73 % October 2017 3 USD40 million Float rate 3-month LIBOR Fixed rate 1.85 - 2.55% February 2016 4 USD40 million Float rate 3-month LIBOR Fixed rate 1.85 - 2.55% February 2016

Cross currency and interest rate swap agreements

The Company

Currency and Interest Revenue Rate Swap agreements

Currency and Interest Expense Rate Swap agreements� Terminal date

Principal amount Interest rate Principal amount� Interest rate 1* Baht397.8 million Float rate 3-month

THBFIX USD 12 million Fixed rate 4.4086% July 2012

2 Baht1,134 million Float rate 3-month THBFIX - Reuters

USD 35 million Float rate 3-month LIBOR-BBA plus 0.665%

July 2013

3 Baht674 million Float rate 3-month THBFIX plus 2.31%

USD 22 million Float rate 3-month LIBOR plus 3.00%

June 2014

* No initial exchange

Subsidiaries

Currency and Interest Revenue Rate Swap agreements

Currency and Interest Expense Rate Swap agreements� Terminal date

Principal amount Interest rate Principal amount� Interest rate 1 Baht976 million Float rate 3-month

THBFIX plus 2.94%�USD 32 million Fixed rate 5.65% March 2015

Foreign currency risk

The Company and its subsidiaries’ exposure to foreign currency risk arises mainly from

trading transactions and borrowings that are denominated in foreign currencies.

The Company and its subsidiaries seek to reduce this risk by entering into forward

exchange contracts when it considers appropriate.



The balances of financial assets and liabilities denominated in foreign currencies of

the Company and its subsidiaries as at 31 December 2011 are summarised below.

Financial Financial Average exchange rate

Foreign currency assets liabilities as at 31 December 2011

(Million) (Million) (Baht per 1 foreign currency unit)

USD 308 17 31.64

JPY 83 91 0.41

EUR 376 60 40.97

Foreign exchange contracts outstanding as at 31 December 2011 are summarised

below.

Bought Sold Contractual exchange rate

Foreign currency amount amount Bought Sold Contractual maturity date

(Million) (Million)

The Company

USD against Baht - 213 - 29.89 - 43.00 January 2012 - December 2014

JPY against Baht - 107 - 0.41 April 2012 - June 2012

EUR against Baht 1 320 41.29 - 41.93 39.10 - 44.66 January 2012 - December 2014

Subsidiaries

USD against Baht - 164 - 30.26 - 32.13 January 2012 - January 2013

USD against GBP 4 - 1.58 - December 2012

USD against EUR 3 - 1.45 - January - March 2012

EUR against GBP 9 - 0.84 - January - December 2012

As at 31 December 2011, the Company and its local subsidiaries have outstanding

option agreements with special conditions with financial institutions under which they

have obligations to sell amounts of between USD30 million up to USD67 million,

depending on conditions stipulated in the agreements, at rates ranging from Baht 30.25

to Baht31.70 per USD. These agreements will terminate within September 2012.

Moreover, as at 31 December 2011, the overseas subsidiaries have outstanding option

agreements as follow.

Bought Sold Contractual exchange rate Contractual

Foreign currency amount amount Bought Sold maturity date

(Million) (Million)

EUR against USD 18.6 26.8 1.4435 1.4435 December 2012

GBP against USD 24.2 40.0 1.6500 1.6500 December 2012

EUR against GBP 34.0 41.8 0.8125 0.8125 December 2012



35.2 Fair values of financial instruments

Since the majority of the Company and its subsidiaries’ financial instruments bear

floating interest rates, their fair value is not expected to be materially different from the

amounts presented in the statement of financial position.

A fair value is the amount for which an asset can be exchanged or a liability settled

between knowledgeable, willing parties in an arm’s length transaction. The fair value is

determined by reference to the market price of the financial instrument or by using an

appropriate valuation technique, depending on the nature of the instrument.

36. Capital management

The primary objective of the Company’s capital management is to ensure that it has an

appropriate financial structure in order to support its business and maximise

shareholder value. As at 31 December 2011, the Group’s debt to equity ratio was

2.07:1 (2010: 2.22:1) and the Company’s was 1.12:1 (2010: 1.33:1).

37. Subsequent events

On 11 February 2012, there was a fire incident in one section of the Company’s plant

located in Samutsakorn province, which has no effect to other production lines.

The Company is currently estimating the resultant damage. However, the Company

has comprehensive insurance coverage for damage to inventories and assets as well

as business interruption insurance. The financial impact of the incident will be reflected

in 2012 accounts. In addition, the Company has a plan to reallocate some its

production lines to group companies and can thus assure that its production capacity is

adequate to meet all customer orders both in terms of production and delivery.

The meeting of the Company's Board of Directors No. 1/2012, held on 21 February 2012,

passed the resolution to approve dividend payment of Baht0.65 per share from its

income for the period from 1 July 2011 to 31 December 2011, to the Company's

shareholders totaling Baht622 million. The dividend will be paid on 4 April 2012.



38. Reclassification

To comply with the Notification of the Department of Business Development relating to

the financial statement presentation as described in Note 2 and as the result of the

adoption of revised and new accounting standards as described in Note 3 and Note 5,

certain amounts in the financial statements for the year ended 31 December 2010 have

been reclassified to the current year’s classification, without any effect to the previously

reported profit or shareholders equity. The reclassification are as follow:


Consolidated


Separate


As

reclassified

As previously

reported

As

reclassified

As previously

reported

Trade and other receivables 9,261,820 - 3,066,632 -

Trade accounts receivable -net - 9,217,858 - 2,882,937

Inventories 21,346,118 20,934,454 2,423,326 2,403,645

Prepaid income tax 286,324 543,165 28,163 28,163

Prepaid expense - 164,410 - 23,443

Spare parts - 448,702 - 20,158

Interest receivables - 565 - 175,072

Advance payment - 26,444 - 245

Other current assets 739,834 339,436 51,495 35,962

Property ,plant and equipment - net 14,190,173 14,092,179 3,004,742 2,947,676

Properties foreclosed - net - 57,057 - 57,057

Goodwill 11,396,143 - - -

Intangible assets 13,027,293 24,423,435 1,509 1,509

Trade and other payables 7,194,757 - 1,297,505 -

Trade accounts payable - 5,909,630 - 939,613

Accrued expenses - 1,104,632 - 287,280

Accounts payable - construction and

asset purchase - 180,495 - 70,612

Billback - 162,793 - -

Other current liabilities 1,479,031 1,316,238 265,745 265,745




Consolidated


Separate


As

reclassified

As previously

reported

As

reclassified

As previously

reported

Revaluation deficit on change in value of

investments - (18,112) - -

Provision for change in the value of

pension fund - (27,664) - -

Other reserve - 5,941 - -

Translation adjustment - (47,640) - -

Other components of shareholders’ equity (87,475) - - -

Compensation from accounts payable - 61,085 - 59,049

Tax coupon received - 104,931 - 22,436

Other income 489,528 323,512 197,178 115,693

Administrative expenses 2,224,377 2,162,497 502,777 444,861

Management benefits expenses - 56,383 - 56,383

Other expenses - 5,497 - 1,533

39. Approval of financial statements

These financial statements were authorised for issue by the Audit Committee and the

Company’s management on 21 February 2012.

TUF: Annual Report 2011

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Transcript of TUF: Annual Report 2011