Annual Report 2012 EN

COMPANY PROFILE

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

As of December 31, 2012Registered capital of Bt1,202,000,000 (At Bt1 par value)Paid-up capital of Bt1,147,593,829 (1,147,593,829 shares)

THAI UNION FROZEN PRODUCTS PCL.

Type Of Business

Head Office

Bangkok Office

Website

Registration No. 0107537000891 (previously Bor.Mor.Jor. 336)

Processor and exporter of frozen and canned seafood

72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3481-6500 (Automatic 7 Lines) Fax: 66 (0) 3481-6886

979/12 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

www.thaiuniongroup.com

TUF’S GLOBAL SOURCING,PRODUCTION ANDMARKETS

GEORGIA, USAPORTUGAL

FRANCE

NORTHATLANTICOCEAN

NORTHPACIFICOCEAN

SOUTHPACIFICOCEAN

SOUTHATLANTICOCEAN

PORTUGAL

FRANCE

GHANA

SEYCHELLES

INDONESIA

VIETNAM

THAILAND

CHINA

EUROPE

TUFMARKETS

TUFPRODUCTION BASES

TUFSOURCES OF FISH

NORTHPACIFICOCEAN

SOUTHPACIFICOCEAN

INDIANOCEAN

Company ProfileContentsMessage from ChairmanMessage from PresidentOrganization ChartBoard of DirectorsAudit Committee and Sub-CommitteesManagement Team5-Year Comparative Financial Statistics2012 Sales Breakdown and DistributionCorporate History and DevelopmentOur Brands Nature of BusinessInvestments in Subsidiaries and Associated CompaniesSales Structure of TUF and SubsidiariesNature of Main BusinessRelated Business Groups TUF StrengthsFinancial HighlightsAwards, Certificates and RankingsFood Safety and Quality StandardsSustainable Development Industry Outlook and Competition Risk Factors and Other Related Factors for Investment Considerations Report on the Practice of Good Corporate GovernanceAppointment of Directors Authority of Board of Directors and Audit CommitteeShareholding Structure and ManagementRemuneration for Directors and ManagementConnected Transactions of Listed CompanyReport of Audit CommitteesManagement Discussion and Analysis (MD&A)Comparative Financial RatiosFinancial AnalysisReferencesStatement of the Board of Director’s Responsibilities for the Financial StatementsIndependent Auditor’s ReportConsolidated and the Company Only Financial StatementsNote to Consolidated Financial Statements

CONTENTS

368

101213232426272830313543444650515254556468738586899192

102104111112116117118120129

THAI UNION FROZEN PRODUCTS PCL.8

MESSAGE FROMCHAIRMAN

Today’s business world is one of dramatic change, resulting in greater challenges for businessoperations. As a manufacturer, the Company needs to quickly adapt its business strategy toreflect sudden changes in business conditions and stay competitive. The global economic downturn has significantly affected the Company’s operationsand there are several challenges facing the Companythis year including raw material costs and upward pressure on wages. The Company has closely monitored internal operations and applied intensive cost management in order to improve operational efficiency. It has also stepped up technologicaldevelopment and machinery maintenance in variousproduction processes in an effort to increaseefficiency.

Regarding the Company’s operating performance in 2012, revenue in USD terms was equivalent to USD 3,441 million, an increase of 6%. TheCompany’s revenue in Baht terms was equivalent to THB 106,698 million, an increase of 8% comparedwith that of the previous year. Meanwhile net profit

for 2012 was THB 4,694 million, a decline of 8%. The net profit decrease was due to a fire at our factoryin Samutsakhon which caused the Companyto lose sales opportunities for 2 months as well as last year’s significant fluctuations in the rawmaterial prices of tuna and shrimp. In addition, the Company’s earnings were adversely affected by the Baht’s appreciation in the second-half of 2012. In fact, last year should have been a good year for TUF but the impact of these various factors which occurred in close succession meant that theCompany’s operating performance was notoutstanding. Nonetheless, the Company is still satisfied with the overall operating performance because its revenue in Baht terms rose to above THB 100,000 million. Moreover, the success ofdebt restructuring resulted in a strengthening of our financial position. Currently, the Company’s Debt to Equity ratio is 0.83 times. We believe shareholders can remain confident that the Company cansuccessfully manage fluctuations in prices and costs caused by both internal and external factors.

ANNUAL REPORT 2012 9

Mr. Kraisorn ChansiriChairman

The Company has operated its seafood business for more than 3 decades and has expanded its global network to 4 continents i.e. Asia, America, Europe and Africa. With 10 production bases all over the world, the Company continues to enhance its competitive advantages in production capacity,raw material procurement, seafood sales andmarketing channels. The Company is also a globalleader in canned seafood and frozen seafood and owns the world’s leading brand. Continuingintegration among production facilities and various marketing bases, coupled with well-known brands and many years of experience in seafood businessoperations, has enabled the Company to effectivelycompete in this industry and be ready to fulfill the requirements of its worldwide customer base. The Company’s success is based on its strict discipline in finance and risk management and key focus on our 6 core businesses. We have a long track recordof expertise in these core businesses which helps generate good yields to the Company. As theCompany has been in the seafood business for many years, our customers accept and trust us. In addition the Company continues to make innovationsin seafood processing.

Although the Company now has a global footprint, our biggest base remains in Thailand as does our corporate headquarters. Management and I are proud that we as a Thai company can effectively compete at the global level. Currently the businessof our Company is highly stable with income growth of a thousand billion baht which has uplifted our organizational level. As Chairman, I would like to extend my thanks and admiration to Management and all the Company’s employees who worked so hard during the year. I would also like to thank shareholders, investors, and financial institutions for their strong support and trust in the Company’s operations. The Company continues to develop and improve its capacity and human resources in order to more effectively compete in the business world. However, we remain committed to achieving sustainable growth.


MESSAGE FROMPRESIDENT

Last year proved a challenging one for TUF. The global economy remained in a slowdown due to the sovereign debt crisis in the EU and the economic recession in the US. The fire at TUF’s shrimp factoryin Samutsakhon temporarily disrupted production. Meanwhile the price of tuna jumped by 22 per cent compared to that of 2011. The price of shrimp also saw significant fluctuations due to EMS (EarlyMortality Syndrome), an epidemic which resulted in lower shrimp harvests. Other challenges last year were fluctuations in currency exchange rates and more intensive competition in the US market.Despite these adverse factors, our overall businesscontinued to show growth, resulting in a satisfactoryperformance for the year.

Rapid changes in the business environment presentnew challenges to management and make it more difficult to ensure continuous growth. Therefore, the Company strives to present a clear managementstrategy, with improvements in human resources and the launch of innovative products. We also aim to upgrade our production processes in order to enhance our organization as well as compete more effectively in a global market.

TUF has clear goals for growth and we see that there are many opportunities to expand our business.Hence, we employ a strategy of continuous investmentin our 6 core business groups: tuna, shrimp and other shrimp products, sardines/mackerel, salmon, pet food and value-added products. Over the next 3 years, our main strategy is to improve businessesin which we have recently invested so that these operate at maximum efficiency and utilization. For example,

• We plan to increase our investment in Pakfood Public Company Limited (PPC) to 54.46 per cent, making it one of our subsidiaries. Combining

TUF with Pakfood, our market share for shrimp exports should increase to around 20%, thereby

strengthening our competitive position in this market.

• We have entered the US market for pet food which offers a very high market value, strong growth potential and a wide gross profit margin.

Hence, we have set up a US subsidiary called U.S. Pet Nutrition, LLC to take advantage of this growth opportunity.

• MW Brands plans to expand its business to many more countries in Europe. So far it has expanded in only 5 out of a total of 27 countries.


Mr. Thiraphong ChansiriPresident

Meanwhile, TUF plans to expand our business in the Asean Economic Community (AEC) by focusingon 3 brands: Sealect, Fisho and Bellotta. We have already expanded operations into Vietnam, Myanmarand Cambodia, and will enter the Indonesian marketin 2013.

In terms of our investment policy over the next few years, we will focus on expanding productioncapacity, which is one of our key growth strategies.For example, we are currently constructing a new and modern shrimp factory to replace the one damaged by fire in February 2012. We also plan to build a new ready-to-eat meals and bakery productsfactory and expand capacity at our new salmon products factory. All these expansion plans are aimed at supporting our future growth.

TUF’s achievements and continuous growth inoperating performance reflect management’scommitment to improving efficiency and the team’s organizational strength and determination. This has resulted in greater financial security for the companyas well as more integrated and larger business operations. Coupled with expansion of our global manufacturing base and our well-regarded brand names in 3 continents, we believe our company is on the right track for continuous and sustainable growth in the future.

As President, I would like to thank shareholders, analysts, investors, business partners and financialinstitutions for their support, with a special mention to our management team and employees.


Total Workforce as of December 31, 2012• Salaried Employee• Daily Employee

12,549 Staffs1,502 Staffs

11,047 Staffs

BOARD OF DIRECTORS

Company Secretary Nomination andRemuneration Committee

Quality Management

Risk Management Committee

Office of President

Audit Committee

Strategic Business Development

PRESIDENT/CEO

FishProduct Lines

Marketing Marketing Engineering Finance &Accounting

Sustainability Development

Production/QC Production/QC Supply Chain Management

HumanResource

Communication

Procurement Procurement Research &Development

Safety

IT

Investor Relations & CorporateInvestment

ShrimpProduct Lines

BU Support CorporateSupport

Internal Audit

ORGANIZATION CHART


BOARD OF DIRECTORS

Education• Honorary Doctorate Degree of Philosophy in Business Administration, Mae Fah Luang University• Honorary Science Degree of Doctor of Philosophy in Food Science and Technology,

the Thai Chamber of Commerce University• The Role of Chairman Program organized

by the Thai Institute of Directors Association (RCP 15/2007)

• Certificate, Capital Market Academy Leader Program 12 (March – July 2011)

Other Positions• Chairman, Thai Union Manufacturing Co., Ltd.• Chairman, Thai Sea Food Co., Ltd.• Chairman, Merchant Partners Securities PCL.• Executive Director, Songkla Canning PCL.• Executive Director, Thai Union Graphic Co., Ltd.• Director, Tri-Union Seafoods, LLC.• Director, Tri-Union Frozen Products Inc.

Mr. Kraisorn Chansiri ChairmanAge 78

• Director, Thai Union Seafood Co., Ltd.• Director, Thai Union Feedmill Co., Ltd. • Director, New Frontier Foods Co., Ltd.

Social Positions• Chief of Permanent Advisory Board, Thai-Chinese Merchant Club• President of the Tio Chew Association of Thailand• Vice President, Thai-Chinese Friendship Association• Honorary Live Vice President, Asian Volleyball Confederation

No. of Shares Held: 117,783,680 shares*

* Shareholders of TUF that included spouse and children as of 3 January 2013


Education• The second Middle School of Shantou, People’s Republic of China

Other Positions• Chairman, Asian-Pacific Can Co., Ltd.• Chairman, Lucky Union Foods Co., Ltd.• Executive Director and Managing Director,

Thai Union Manufacturing Co., Ltd.• Director, Thai Union Feedmill Co., Ltd.• Director, Tri-Union Seafoods, LLC.• Director, Tri-Union Products, Inc.• Director, PT Juifa International Foods Co., Ltd.• Director, Yueh Chyang Canned Food Co., Ltd.• Director, U.S. Pet Nutrition LLC.• Director MW Brands SAS • Director, New Frontier Foods Co., Ltd.



Education• Bachelor’s Degree, South China Normal University, People’s Republic of China• Directors Accreditation Program organized

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

Other Positions• Executive Director, Thai Union Manufacturing Co., Ltd.• Director, Songkla Canning PCL.• Director, Asian-Pacific Can Co., Ltd.• Director, Thai Union Seafood Co., Ltd.• Director, Thai Union Feedmill Co., Ltd.• Director, Thai Union Graphic Co., Ltd.• Director, Thai Union Investment Holding (Investment in MW Brands SAS)• Director, New Frontier Foods Co., Ltd.



Mr. Cheng Niruttinanon

Executive DirectorAge 71

Mr. Chuan Tangchansiri Executive DirectorAge 68


Education• Bachelor’s Degree (Marketing), Assumption University• Master of Business Administration (Management), University of San Francisco,

USA• Directors Certification Program organized

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

Other Positions• Chairman, Thai Union Seafood Co., Ltd.• President, MW Brands SAS • President, Thai Union International, Inc.• President, Thai Union Graphic Co., Ltd.• President, T-Holding Co., Ltd.• President, Thai Union France Holding 2 SAS• Executive Director, Thai Union Manufacturing Co., Ltd.• Executive Director, Songkla Canning PCL.• Director, Asian-Pacific Can Co., Ltd.• Director, Thai Union Feedmill Co., Ltd.• Director, Thai Union Hatchery Co., Ltd.• Director, Biz Dimension Co., Ltd.• Director, Tri-Union Seafoods, LLC.

Mr. Thiraphong Chansiri PresidentAge 48

• Director, Tri-Union Products, Inc. • Director, Lucky Union Foods Co., Ltd.• Director, PT Juifa International Foods Co., Ltd.• Director, Yueh Chyang Canned Food Co., Ltd.• Director, TN Fine Chemicals Co., Ltd.• Director, Merchant Partners Securities PCL.• Director, U.S. Pet Nutrition LLC.• Director, Thai Union Investment Holding (Investment in MW Brands SAS)• Director, New Frontier Foods Co., Ltd.

Social Positions• Advisory Committee, Market for Alternative Investment (MAI)• Advisory Committee, SET Research Institute • Advisory Committee, Thailand Future Foundation• Councilor, Thailand Management Association

(TMA)• Board of Trustees of Siam Technology College




Education• Bachelor’s Degree, Bangkok University• Directors Certification Program organized by

the Thai Institute of Director Association (DCP 84/2010)• TLCA Executive Development Program (EDP 2/2009) by Thai Listed Companies Association

Other Positions• President, Thai Union Feedmill Co., Ltd.• President, Thai Quality Shrimp Co., Ltd.• President, Thai Union Hatchery Co., Ltd.• President, Thai Union Seafood Co., Ltd.• Director, Tri-Union Frozen Products, Inc.• Director, TCM Fishery Co., Ltd.• Director, TMK Farm Co., Ltd.• Director, TMAC Co., Ltd.

Social Positions• Vice President, Thai Frozen Foods Association• Vice President, Bangkok University Alumni

Association



Education• Bachelor’s Degree, Keio University, Japan

Experience• President & Chief Executive Office, Hagoromo Foods Corporation • Chairman, Hagoromo Foods Corporation• Director and Managing Director, Hagoromo Foods Corporation

No. of Shares Held: -

Mr. Rittirong Boonmechote

Managing Director (Shrimp Product Lines)Age 51

Mr. Yasuo Goto

DirectorAge 64


Education• Bachelor’s Degree, Kyoto University, Japan

Experience• Senior Vice President (Food Department) of

Mitsubishi Corporation


Education• Bachelor’s Degree, California State University, USA• Directors Certification Program organized by

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

Other Positions• Executive Director and Managing Director, Biz Dimension Co., Ltd.• Executive Director, Thai Union Manufacturing Co., Ltd.• Executive Director, Songkla Canning PCL.• Director, T-Holding Co., Ltd.• Director, Tri-Union Seafoods, LLC.• Director, Tri-Union Frozen Products Inc.• Director, Thai Union Hatchery Co., Ltd.• Director, PT Juifa International Foods Co., Ltd.• Director, Yueh Chyang Canned Food Co., Ltd. • Director, Thai Union Investment Holding (Investment in MW Brands SAS)• Director, MW Brands SAS• Director, New Frontier Foods Co., Ltd.



Mr. Takehiko Kakiuchi DirectorAge 58

Mr. Chan Tin King

Executive Director and Chief Financial OfficerAge 45


Education• Bachelor’s Degree, Oregon State University,

USA• Master of Business Administration, Bangkok University• Directors Certification Program organized


• TLCA Executive Development Program (EDP 1/2009) by Thai Listed Companies Association

Other Positions• Director, Thai Union Feedmill Co., Ltd.• Director, Thai Union Hatchery Co., Ltd.



Education• Bachelor’s Degree (Commerce), University of New South Wales, Australia• Certified Public Accountants, Australian Society

Other Positions• Director, Wellard Holdings (Australia)• Director, Shangri-La Hotel (Malaysia)• Alt Director, Straits Resource Ltd.• Alt Director, Otto Marine Ltd. • Director, MW Brands SAS • Director, Scomi Oilfeld Limited (Bermuda)



Mr. Chan Shue Chung

Executive DirectorAge 38

Mr. Ravinder Singh Grewal Sarbjit S

DirectorAge 44


Education• Bachelor’s Degree (Accounting, Commerce and Law), Thammasat University• Directors Certification Program organized


• The Role of Chairman Program organized by the Thai Institute of Directors Association (RCP 4/2001)

• DCP Refresher Course organized by the Thai Institute of Directors Association (RE DCP 2/2006)• Handling Conflicts of Interest: What the Board

should do? organized by the Thai Institute of Directors Association (4/2008)• The Role of Compensation Committee organized by the Thai Institute of Directors Association

(RCC 9/2009)• How to Develop a Risk Management organized by the Thai Institute of Directors Association

(HRP 2/2012)• Executive Program, Stanford University & University of Singapore• Senior Executive Program, Sasin Graduate

Institute of Business Administration of Chulalongkorn University • Audit World – Conference 25-26 June 2012

Resort World Convention Centre, Singapore

Mr. Sakdi Kiewkarnkha

Independent DirectorAge 78

• Audit World – Post Conference 27 June 2012 Resort World Convention Centre, Singapore

Experience• Banking Ombudsman, Bank of Thailand • Executive Vice President, The Siam Commercial Bank PCL. • Executive Director, Bangkok Metropolitan Bank PCL.• Executive Director, Bangkok Metropolitan Life Insurance Co., Ltd.• Chairman of Audit Committee, The Book Club Finance PCL.• Independent Director & Audit Committee Member, Dusit Thani PCL.• Advisor to Executive Board, Bangkok Metropolitan Bank PCL.• Certified Public Accountant No. 0156 from 1962• Attorney of Law No.2913401 from 1986

Social Positions• Vice President, The Princess Mother’s Medical

Volunteer Foundation




Education• Bachelor’s Degree (Law), Ramkhamhaeng University • Police Cadet Academy of Republic of China• Directors Accreditation Program organized


Experience• Commander, Quartermaster Division• Deputy Commissioner, Immigration Bureau• Deputy Inspector General, Royal Thai Police

No. of Shares Held: 7,572 shares*


Education• Bachelor’s Degree (Law), Thammasat University • Barrister at Law• Directors Accreditation Program organized


Experience• Lawyer, Kiti Legal Counselors• Special Public Prosecutor, Office of the Attorney General



Pol.Maj.Gen. Pracha Anucrokdilok


Mr. Kiti Pilunthanadiloke



Education• Bachelor’s Degree (Accountancy & Management), Eckerd College USA• Master’s Degree (M.B.A Management), The University of Sarasota Florida USA• Ph.D. International Management, Walden University USA• A.C.A Certificate, American Accreditation

Council for Accountancy USA• Audit Committee Program organized by the

Thai Institute of Directors Association (ACP 10/2005)• Directors Accreditation Program organized


• Directors Certification Program organized by the Thai Institute of Directors Association (DCP 70/2006)

• The Role of Chairman Program organized by the Thai Institute of Directors Association (RCP 14/2006)

• Understanding the Fundamental of Financial Statement organized by the Thai Institute of Directors Association (UFS 7/2007)

Dr. Thamnoon Ananthothai Independent DirectorAge 56

Other Positions• Chairman, Vintage Engineering PCL.• Vice Chairman and Chairman of Audit Committee, Better World Green PCL.• Vice Chairman and Chairman of Audit Committee, IFS Capital (Thailand) PCL. • Executive Director, Merchant Partners Securities PCL.• Director and Chairman of Audit Committee,

Eastern Printing PCL.• Director, Independent Director, Audit Committee, Chairman of the Nominating-Committee and

Remuneration Committee Member, Property Prefect PCL.

• Director and Audit Committee, Bangkok University




Education• Bachelor’s Degree (Chemical Engineering

Ontario), Queen’s University USA• Master’s Degree (Chemical Engineering),

University of Southern California USA• Directors Certification Program organized


• The Role of Compensation Committee organized by the Thai Institute of Directors Association

(RCC 5/2007)

Other Positions• Chairman, Ocean Life Insurance Co., Ltd.• Chairman of the Boards, Ocean Glass PCL.

No. of Shares Held: 13,312 shares*


Mr. Kirati Assakul Independent DirectorAge 55

Nomination and Remuneration Committee

1. Dr. Thamnoon Ananthothai2. Mr. Sakdi Kiewkarnkha3. Mr. Chan Tin King

Risk Management Committee

1. Dr. Thamnoon Ananthothai2. Mr. Sakdi Kiewkarnkha3. Pol.Maj.Gen. Pracha Anucrokdilok4. Mr. Thiraphong Chansiri5. Mr. Chan Tin King

Chairman of the Nomination and Remuneration CommitteeMember of the Nomination and Remuneration CommitteeMember of the Nomination and Remuneration Committee

Chairman of Risk Management CommitteeMember of Risk Management CommitteeMember of Risk Management CommitteeMember of Risk Management CommitteeMember of Risk Management Committee

Mr. SakdiKiewkarnkha

Chairman of Audit Committee

Pol.Maj.Gen. PrachaAnucrokdilok Audit Committee

Mr. KitiPilunthanadiloke Audit Committee

AUDIT COMMITTEEAND SUB-COMMITTEESAudit Committee

Sub-Committees;

14 2

35



MANAGEMENT TEAM

1. Mr. Suthidej Amornkasemwong Assistant Managing Director – Fish Product Lines

Experience• General Manager (Fish Product Lines), Thai Union Frozen Products PCL.• Marketing Manager (Fish Product Lines), Thai Union Frozen Products PCL.

3. Ms. Sureenard Sukhawanchai General Manager Audit Unit

Experience• Manager of Internal Audit Department, Krungthai Panich Insurance Co., Ltd.• Assistant Manager of Finance Department, Krungthai Panich Insurance Co., Ltd.

4. Mr. Yongyut Setthawiwat Deputy General Manager Finance

Experience• Corporate Treasurer, KCE Electronics PCL• Treasury Manager, Hutchison CAT Wireless Multimedia Ltd.

5. Mr. Niti Trakpiboon Corporate Accounting Manager

Experience• Assistant Vice President Information Management Department, Kiatnakin Securities Co., Ltd.

2. Mr. Preerasak Boonmechote General Manager – Shrimp Product Lines

Experience• Assistant General Manager (Shrimp Product Lines), Thai Union Frozen Products PCL.

69,519

16.26

2,200

1.46

39,865

16.03

69,697

18.49

3,344

0.95

35,870

21.79

72,810

23.36

2,874

2.22

74,777

15.41

99,589107,679

25.57

34.77

5,117

4,694

2.07

1.35

83,27794,759

22.79

15.22


5-YEAR COMPARATIVEFINANCIAL STATISTICS

Total Revenues(Million Bt)

Book Value per Share(Bt)

Net Profit(Million Bt)

Total Liabilities toEquity(Times)

Total Assets(Million Bt)

Return on AverageEquity(%)

2012

2012

2012

2012

2012

2012

2011

2011

2011

2011

2011

2011

2010

2010

2010

2010

2010

2010

2008

2008

2008

2008

2008

2008

2009

2009

2009

2009

2009

2009

49%

36%30%9%10%5%3%3%2%1%1%

23%6%7%4%11%


2012 SALES BREAKDOWNAND DISTRIBUTION

Tuna Business

Shrimp Business and Related Products

Sardine and Mackerel Business

Petfood Business

Salmon Business

Value Added Business and Other Products

2012 SALES BREAKDOWN

USA

Europe

Japan

Domestic Sales

Africa

Australia

Asia (Non-Japan)

Middle East

Canada

South America

2012 SALES DISTRIBUTION


CORPORATE HISTORYAND DEVELOPMENT

TUF’s long history of frozen seafood processing and export started in 1988 with Bt25-million initialcapital. Later in 1992, we embarked on a jointventure with Mitsubishi Corporation and Hagoromo Foods Corporation, both of which are our Japanesebusiness alliances that have 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 we have continually increased ourinvestment capital ever since. Today, our registeredcapital amounts to Bt1,202,000,000 at Bt1 par value, with paid-up capital of Bt1,147,593,829 or 1,147,593,829 shares.

Through the years since the establishment, we have operated our business under prudentmanagement policy to achieve the most efficientoperations possible. This has been furtherstrengthened by our expertise developed through decades of hands-on industry experience andvisionary executive members. These factors in combination have yielded our business success, sustained growth and solid financial status to date.

Vision

We strive to be the “Chef of the World” creating and providing high quality and innovative cuisine that fully satisfies our customers, consumers and stakeholders’ ever evolving demands.

Mission

• Trusted as a provider of high-quality, safe, 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.• Renowned as an employer of choice; investing in people and creating opportunities for careers to grow and talent to flourish; providing our

people with a better quality of life.• Globally respected as an ambassador and advocate for business associated with the seafood industry both in Thailand and among

the world business communities.• Admired as an environmentally aware corporate citizen with long-term commitment to protect

the environment and our Earth’s resources.


Development in 2012

1. The Company reduced the amount of registered capital from Bt1,000,000,000 to Bt999,186,550 through cancellation of 813,450 registered common shares. This move was intended for a subsequent increase in the amount of

registered capital to facilitate other prospects.

2. The Company increased the amount of registered capital from Bt999,186,550 to Bt1,202,000,000 at Bt1 par value, through

issuance of 202,813,450 registered common shares. The new shares were offered to the current shareholders, limited individuals according to their shareholding proportion, and

the shareholders of the convertible debentures at Bt50 per share, at 5 current shares: 1 newly issued share. This move aims at accelerating the company’s debt reduction plan resulting from the MWB acquisition, as well as facilitating

for the continual growth in the future.

3. Changing of shareholding ratio in Avanti Feeds Ltd., TUF’s joint venture company, which is a listed company in India’s capital market, from 14.99% to 25.12%, by trading TUF’s 3,844,800 shares in Avanti Thai Aqua Feeds Ltd. with 1,083,042 shares in Avanti Feeds Ltd., made Avanti Feeds Ltd. the sole shareholder of

The increased investment in Pakfood Public Co., Ltd. is to allow for more flexibility in management. Pakfood’s readiness in manufacturing is valuable to support future businessgrowth, thus enabling TUF to expand its seafood and frozen food businesses faster and definitely strengthen its business in the future.

Avanti Thai Aqua Feed Ltd. This change further enhances effective management and

increases shrimp feeds production capacity due to the steady and continuing growth in shrimp business in India, especially the shrimp feeds business.

4. The successful joint venture of Thai Union Feedmill Co., Ltd., a TUF’s subsidiary, and Mitsubishi Corporation, to form TMAC Co., Ltd. for shrimp farming business in Thailand at the proportion of 51% and 49% respectively, has strengthened the company’s capability in sourcing quality shrimp raw materials from

safe and reliable sources, and imposing effective traceability. The joint venture adds

to TUF’s business development portfolio in shrimp feeds and shrimp hatchery businesses.

5. The company increased investment in Pakfood Public Company Limited by acquiring 2,989,999

shares, equal to 9.97% of total issued shares, resulting in TUF’s owning 14,989,999 shares of Pakfood, accounting for 49.97% of total

issued shares.

Recently in February 2013, the Company purchasedadditional shares of 9.04%, as a result, the Company’scurrent share holding in Pakfood Public Co., Ltd. represents 54.46% or 17,971,756 shares.


OUR BRANDS

AMERICA

EUROPE ASIA

The company currently owns a number of global brands of frozen seafood and premium brand of pet food, covering 3 continents:

Chicken of the Sea #3 brand in the U.S.A.In addition to its branding strength in this continent, Tri-Union Frozen Products, Inc., our subsidiary, is also the largest importer of frozen shrimps in the U.S.A.

John West#1 brand in the U.K.,the Netherlands,and Ireland

Petit Navire#1 brand in France

Hyacinthe Parmentier#3 brand in France

Mareblu#3 brand in Italy

Century#1 brand in China

Sealect#1 brand of Tunain Thailand and ASEAN

FishoQuality brand of fish snack in Thailand

BellottaPremium brand of pet foodin Thailand

90.08%

90.44%

51%

100%**

54.46%


NATURE OF BUSINESS

THAI UNION FROZEN PRODUCTS PUBLIC COMPANY LIMITED

GROUP 1Production and Export of Frozen and Canned Food Products

THAI UNION MANUFACTURING CO., LTD.(TUM)

SONGKLA CANNING PCL.(SC)

THAI UNION SEAFOOD CO., LTD.(TUS)

NEW FRONTIER FOODS CO., LTD.(NFF)

PAKFOOD PUBLIC COMPANY LIMITED(PPC)

75%***

80%***

51%

51%***

95%***

100%***

90.5%*

74%


GROUP 3Production and Distribution of Animal Feeds and Agriculture Products

THAI UNION FEEDMILL CO., LTD.(TFM)

THAI UNION HATCHERY CO., LTD.(TUH)

TMK FARM CO., LTD.(TMK)

TCM FISHERY CO., LTD.(TCM)

THAI MAC CO., LTD.(TMAC)

THAI QUALITY SHRIMP CO., LTD.(TQS)

GROUP 2Production and Distribution of Packaging Products

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

THAI UNION GRAPHIC CO., LTD.(TUG)

90.00%

82.00%

100%

100%

99.00%

100%

88.78%


GROUP 4Food Business in Domestic Market

T-HOLDING CO., LTD.(THD)

GROUP 5Overseas Investments

THAI UNION INTERNATIONAL, INC.(TUI)

TRI-UNION FROZEN PRODUCTS, INC.(TUFP)

CANADIAN PET NUTRITION, ULC(CAPN)

U.S. PET NUTRITION, LLC(USPN)

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

TRI-UNION SEAFOODS, LLC.(TRI-U) (Chicken of the Sea International)

100%

33.33%**

48.97%**

25%

20%

25.12%

100%

51%*


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

MW BRANDS SAS(MW BRANDS)

ASSOCIATED COMPANIES

LUCKY UNION FOODS CO., LTD.(LUF)

AVANTI FEEDS LIMITED(AFL)

MORESBY INTERNATIONAL HOLDINGS, INC.(MIH)

TN FINE CHEMICAL CO., LTD.(TNFC)

BIZ DIMENSION CO., LTD.(BZD)

THAI UNION INVESTMENT HOLDING(TUIH)

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


INVESTMENTS IN

SUBSIDIARIES ANDASSOCIATED COMPANIES


Office:979/8 12th Floor, S.M. Tower, Phaholyothin Road,Samsennai, Phayathai, Bangkok 10400Tel: 66 (0) 2298-0024Fax: 66 (0) 2298-0550

Factory:77 Moo 5, Songkhla-Ranot Road, Tambon Watkanun, Amphoe Singhanakhon, Songkhla 90330Tel: 66 (0) 7448-3482 - 7Fax: 66 (0) 7448-3480 - 1

Type of Business:Processor and exporter of frozen shrimp

Registered Capital:Bt300,000,000 at Bt10 Par Value

Date of Investment:December 1996 (Additional investmentin March 2005 and October 2008)

Type/% Holding/No. of Shares:Common share 51.00% or 15,300,000 shares

Office:38/70 Moo 8, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3442-3401 - 6Fax: 66 (0) 3442-1493

Type of Business:Manufacturer and distributor of steel andaluminum food packaging products

Registered Capital:Bt80,000,000 at Bt400,000 Par Value

Date of Investment:December 1993

Type/% Holding/No. of Shares:Common share 90.50% or 181 shares (Invested by Songkla Canning PCL.)

THAI UNION SEAFOOD CO., LTD.(TUS)

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

Office:979/13-16 M Floor, S.M. Tower, Phaholyothin Road,Samsennai, Phayathai, Bangkok 10400Tel: 66 (0) 2298-0025, 298-0421 - 32Fax: 66 (0) 2298-0027 - 28

Factory:30/2 Moo 8, Sethakit 1 Road, Tambon Tarsrai, Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3441-2210, 3481-6441 - 4Fax: 66 (0) 3442-5459

Type of Business:Processor and exporter of canned tuna and petfood


Date of Investment:March 1994 (Additional investment in June 1999)


Office:979/9-10 12th Floor, S.M. Tower, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400Tel: 66 (0) 2298-0029 Fax: 66 (0) 2298-0442 - 3

Factory:333 Kanjanavanij Road, Tambon Pavong,Amphoe Mueang Songkhla, Songkhla 90100Tel: 66 (0) 7433-4005 - 8 Fax: 66 (0) 7433-4009

Type of Business:Processor and exporter of canned seafood


Date of Investment:October 1995 (Additional investment in March 1999)


THAI UNION MANUFACTURINGCO., LTD. (TUM)

SONGKLA CANNING PCL.(SC)


Office:89/1 Moo 2, Rama II Road, Tambon Kalong, Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3441-7222, 3441-7219 Fax: 66 (0) 3441-7255

Type of Business:Producer and distributor of nauplii and postlarvae shrimps.Research and development of new shrimp breeds.


Date of Investment:July 2004 (The capital decrease in December 2007)

Type/% Holding/No. of Shares:Common share 95.00% or 379,994 shares(Invested by Thai Union Feedmill Co., Ltd.)

Office:255 Smaedam Road, Smaedam, Bangkhunthian,Bangkok 10150Tel: 66 (0) 2415-5808 - 9, 2895-5865 - 6Fax: 66 (0) 2415-4371

Type of Business:One-stop-service offset printing house specializedin standard high-quality printouts


Date of Investment:July 1995 (Additional investment in May 2001)


Website:http://www.thaiuniongraphic.com


Factory:42 Moo 14, Tambon Kokkloy, Amphoe Takua Thung, Phangnga 82140 Tel: 66 (0) 7658-4000 – 27Fax: 66 (0) 7658-4028 – 9

Type of Business:Quality white-shrimp breed development to produce and distribute high-quality nauplii and postlarvae to farmers


Date of Investment:April 2006 (Additional investment inNovember 2007, April 2011 and January 2013)

Type/% Holding/No. of Shares:Common share 100.00% or 41,999,950 shares (Invested by Thai Union Feedmill Co., Ltd.)

Office/Factory:89/1 Moo 2, Rama II Road, Tambon Kalong, Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3441-7222, 3441-7219 Fax: 66 (0) 3441-7255

Factory:103/1 Moo 2, Songkhla-Ranot Road, Tambon Pak-Trae, Amphoe Ranot, Songkhla 90140Tel: 66 (0) 7439-6933-7 Fax: 66 (0) 7439-6938

Type of Business:Processor and exporter of animal feeds


Date of Investment:June 2000 (Additional investment in May 2001,October 2006 and August 2010)


Website:http://www.thaiunionfeedmill.com

THAI QUALITY SHRIMPCO., LTD. (TQS)

THAI UNION GRAPHICCO., LTD. (TUG)

THAI UNION HATCHERYCO., LTD. (TUH)

THAI UNION FEEDMILL CO., LTD. (TFM)


Office:Sorrento South Corporate Center9330 Scranton Road, Suite 500, San Diego,California 92121, USATel: (858) 558-9662Fax: (858) 597-4566

Type of Business:Processor and distributor of canned seafood under “Chicken of the Sea” brand

Equity:USD62,614,649

Date of Investment:July 1997 (Additional investment in January 2001)

Type/% Holding/No. of Shares:100.00% (Invested by Thai Union International, Inc.) (No share issued)

Website:http://www.chickenofthesea.com

Office:11 Kanjanapisek Road, Bangbon, Bangbon,Bangkok 10150Tel: 66 (0) 2898-8200Fax: 66 (0) 2895-3001

Type of Business:Distributor of “Fisho”,“Sealect” and “Bellotta” product lines


Date of Investment:November 1996


Website:http://www.fisho.com, http://www.sealectbrand.com

West Office:222 N. Sepulveda Blvd, Suite 1550,El Segundo CA 90245 USATel: (866) 572-0996Fax: (310) 469-7037

East Office:5 Dakota Drive, Suite 303, Lake Success, NY 11042 USATel: (516) 740-4100Fax: (516) 621-0199

Type of Business:Importer and distributor of frozen seafood products

Registered Capital:Common share 5,800 shares at USD0.001Par Value Preferred Share 4,200 sharesat USD0.001 Par Value

Type/%Holding/No. of Shares:Common share 68.97% or 4,000 sharesPreferred share100.00 or 4,200 shares(Invested by Thai Union International, Inc.)

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

Office:Sorrento South Corporate Center 9330 Scranton Road, Suite 500, San Diego, California 92121, USA Tel: (858) 558-9662Fax: (858) 597-4566

Type of Business:A holding company for investment in USA

Registered Capital:USD10,000,000 at USD1 Par Value

Date of Investment:April 1996


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

T-HOLDING CO., LTD.(THD)

TRI-UNION FROZENPRODUCTS, INC. (TUFP)

THAI UNION INTERNATIONAL, INC. (TUI)


Office:8th Floor, Medine Mews, La Chaussee Street,Port Louis, Mauritius

Type of Business:A holding company for investment in Europe

Registered Capital:222,000,000 shares at EUR1 Par Value

Date of Investment:June 2010

Type/%Holding/No. of Shares:Common share 100.00% or 222,000,000 shares

Office:9330 Scranton Road, Suite 500, San Diego CA 92121 USATel: (858) 558-9662Fax: (858) 597-4566

Type of Business:Processor and distributor of wet and dry pet food

Registered Capital:USD1

Date of Investment:October 2010

Type/%Holding/No. of Shares:Common share 99.00%(Invested by Thai Union International, Inc.)Common share 1.00%(Invested by Tri-Union Seafoods, LLC)

Office:104, Avenue du Président Kennedy 75016 Paris, France Tel: (33) 1-53-77-53-53Fax: (33) 1-53-77-17-13

Type of Business:Processor and exporter of canned seafood in Europe

Registered Capital:31,367,000 shares at EUR1 Par Value


Type/%Holding/No. of Shares:Common share 100.00% or 31,367,000 shares(Invested by Thai Union Investment Holding)

Office:100, 1150 Kalamalka Lake Road, Vernon,BC V1T6V2 CanadaTel: (250) 762-5434

Type of Business:Processor and distributor of pet food

Registered Capital:100 shares at USD0.01 Par Value

Date of Investment:July 2011

Type/%Holding/No. of Shares:Common share 100.00% (Invested by U.S. Pet Nutrition LLC.)

THAI UNION INVESTMENTHOLDING (TUIH)

U.S. PET NUTRITION LLC.(USPN)

MW BRANDS SAS(MW BRANDS)

CANADIAN PET NUTRITION,ULC (CAPN)


Office:JL. Lingkar Timur No.53 Tegalkamulyan Cilacap 53211Jawa Tengah, IndonesiaTel: (62-282) 521-002 - 5Fax: (62-282) 521-007

Type of Business:Processor and exporter of canned tuna products

Registered Capital:USD2,700,000 at USD100 Par Value

Date of Investment:May 2006

Type/% Holding/No. of Shares:Common share 88.78% or 23,970 shares

Office/Factory:1/74-75 Samutsakhon Industrial Estate, Tambon Tarsrai,Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3449-0330, 3449-0009 Fax: 66 (0) 3449-0008

Type of Business:Processor and exporter of imitation crab stick


Date of Investment:June 1990 (Additional investment in March 2004)

Type/% Holding/No. of Shares:Common share 25.00% or 375,000 shares

Office:Nhut Chinh Village, Ben Luc District,Long An Province, People’s Republic of VietnamTel: (84) 072-387-2377Fax: (84) 072-387-2388

Type of Business:Processor and exporter of canned seafood

Registered Capital:USD1,919,936


Type/%Holding/No. of Shares:51.00% (Invested by Songkla Canning PCL.)

Office:979/79-80 26th Floor, S.M. Tower, Phaholyothin Road, Samsennai, Phayathai, Bangkok 10400 Tel: 66 (0) 2298-0345Fax: 66 (0) 2298-0331 - 3

Type of Business:E-Procurement Service Provider


Date of Investment:September 2003


PT JUIFA INTERNATIONAL FOODSCO., LTD. (JIF)

LUCKY UNION FOODS CO., LTD.(LUF)

YUEH CHYANG CANNEDFOOD CO., LTD. (YCC)

BIZ DIMENSION CO., LTD.(BZD)


Office:Unit 4, 2nd Floor ADF Haus, Musgrave St., Port Moresby,Papua New Guinea

Type of Business: A holding company set up for investment in Majestic Seafood Corporation Ltd. in Papua New Guinea which operates tuna processing / tuna fishing in the country’s waters and nearby maritime areas

Registered Capital:USD9,400,000


Type/% Holding/No. of Shares:Common share 33.33% (Invested by Thai Union Manufacturing Co., Ltd.)

Office:G2, Concorde Apartments, 6-3-658, Somaji Guda,Hyderabad-500 082, Andhra Pradesh, IndiaTel: 91-40-2331-0260, 2331-0261Fax: 91-40-2331-1604

Type of Business:Processor and exporter of shrimp feed and frozen shrimp

Registered Capital:INR90,830,420 at INR10 Par Value


Type/% Holding/No. of Shares:Common shares 25.12% or 2,282,042 shares

Office:103 Soi Ruam Mit, Non Si Road, Chong Non Si,Yannawa Bangkok 10120Tel: 66 (0) 2295-1991-9, 2295-2000-1Fax: 66 (0) 2861-1205

Factory:30 Ekkachai Road, Tambon Nadee, Amphoe Mueang, Samutsakhon 74000 Tel: 66 (0) 3483-3803 – 6Fax: 66 (0) 3486-1110

Type of Business:Processor and exporter of seafood andready- to- eat products


Date of Investment:April 2012 (Additional investment in December 2012and February 2013)

Type/%Holding/No. of Shares:Common shares 54.46 or 17,971,756 shares

Office:30/2 Moo 8, Sethakit 1 Road, Tambon Tarsrai,Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3442-3686Fax: 66 (0) 3442-3688

Type of Business:Processor and exporter of seafood by-products, i.e.high grade oil extracts from tuna fish, glucosaminederived from shrimp shell.

Registered Capital:Bt90,000,000 at Bt10,000 Par Value

Date of Investment:March 2009

Type/% Holding/No. of Shares:Common share 48.97% or 4,407 shares(Invested by Thai Union Manufacturing Co., Ltd.)

MORESBY INTERNATIONALHOLDINGS, INC. (MIH)

AVANTI FEEDS LIMITED(AFL)

PAKFOOD PUBLICCOMPANY LIMITED (PPC)

TN FINE CHEMICAL CO., LTD.(TNFC)


Office:89/1 Moo 12, Rama II Road, Tambon Kalong,Amphoe Mueang Samutsakhon, Samutsakhon 74000Tel: 66 (0) 3441-7222, 3441-7219 Fax: 66 (0) 3441-7255

Type of Business:Shrimp Farm





Farm:147 Moo 11, Tambon Kumpang, Amphoe La-ngu,Satun 91110



Date of Investment:April 2012


Office:30/24 Moo 8, Rama II Road, Tambon Tarsrai,Amphoe Mueang Samutsakhon, Samutsakhon 74000

Type of Business:Processor and exporter of canned tuna and petfood


Date of Investment:January 2013

Type/% Holding/No. of Shares:Common share 100.00% or 999,989 shares (Invested by Thai Union Manufacturing Co., Ltd.)


Farm:173/1 Moo 4, Tambon Bangsak, Amphoe Kantang,Trang 92110



Date of Investment:June 2012


TMAC CO., LTD.(TMAC)

TCM FISHERY CO., LTD.(TCM)

NEW FRONTIER FOODSCO., LTD. (NFF)

TMK FARM CO., LTD.(TMK)


SALES STRUCTURE OF TUF AND SUBSIDIARIES

Thai Union Frozen Products PCL

Thai union Manufacturing Co., Ltd.

Songkla Canning PCL.

Thai Union Seafood Co., Ltd.

Asian – Pacific Co., Ltd.

Thai Union Graphic Co., Ltd.

Thai Union Feedmill Co., Ltd.

Thai Quality Shrimp Co., Ltd.

Thai Union Hatchery Co., Ltd.

T-Holding Co., Ltd.

Thai Union International, Inc.

• Tri-Union Seafoods, LLC.

• Tri-Union Frozen Products, Inc.

• U.S. Pet Nutrition LLC.

Thai Union Investment Holding

• MW Brands SAS

PT Juifa International Foods Co., Ltd.

Yueh Chyang Canned Food Co., Ltd.

TUF

TUM

SC

TUS

APC

TUG

TFM

TQS

TUH

THD

TUI

Tri-U

TUFP

USPN

TUIH

MWB

JIF

YCC

Group 1Productionand Export of Frozen and Canned Food Products

Group 2Productionand Distributionof Packaging Products

Group 3Production andDistribution ofAnimal Feeds and Agricultural Products

Group 4Food Businessin DomesticMarket

Group 5OverseasInvestments

-

90.08

90.44

51.00

90.50*

74.00

51.00

95.00*

99.99*

90.00

100.00

100.00*

82.00*

99.00*

100.00

100.00*

76.50

51.00*

13,276.77

15,175.86

6,557.31

1,531.51

15,011.09

17,237.95

7,212.52

1,394.42

799.06

187.00

1,068.88

157.88

4,978.25

23.41

88.48

4,951.52

22.08

149.20

1,813.861,419.40

N/A

13,080.19

18,594.08

N/A

N/A

21,867.85

437.26

259.49

98,670.38

N/A

14,124.28

18,576.08

508.74

N/A

24,116.98

459.51

287.09

106,697.62

11,961.94

12,642.51

5,374.85

1,487.42

496.92

241.32

4,758.23

27.81

78.03

1,514.02

N/A

12,860.20

11,713.50

4,396.97

N/A

N/A

2,820.32

503.86

647.50

71,507.40

13.5

15.4

6.6

1.6

14.1

16.2

6.8

1.3

0.8

0.2

1.0

0.2

5.0

0.0

0.1

4.6

0.0

0.1

1.81.3

N/A

13.3

18.8

N/A

N/A

22.2

0.4

0.3

100.0

N/A

13.2

17.4

0.5

N/A

22.6

0.4

0.3

100.0

16.7

17.7

7.5

2.1

0.7

0.3

6.7

0.1

0.0

2.1

N/A

18.0

16.4

6.2

N/A

N/A

3.9

0.7

0.9

100.0

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.

* APC and YCC holding owned by SC / TQS and TUH holding owned by TFM / Tri-U, TUFP and USPN holding owned by TUI / MWB holding owned by TUIH

Product /Business Group

Company2012 2011 2010

Unit: Million Baht

%Holding by TUF Sale Sale Sale% % %

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


NATURE OFMAIN BUSINESS

Tuna

Frozen cooked tuna and canned tuna, manufacturedunder customer’s brands and TUF’s own brands, contributes 49% of the total corporate revenues.

Shrimp and Related Products

Frozen shrimps and by products, such as shrimp food and hatchery contributes 23% of the totalcorporate revenues.

Sardine and Mackerel

Canned sardine and mackerel, manufactured undercustomer’s brands and TUF’s own brands, contributes6% of the total corporate revenues.


Salmon

Frozen salmon, processed salmon, and canned salmon, manufactured under both customer’s brands and TUF’s own brands, contributes 4% of the total corporate revenues.

Pet Food

Pet food, manufactured under both customer’s brands and TUF’s own brands, contributes 7% of the total corporate revenues.

Other Value-Added products

Ready-to-eat frozen food, frozen seafood, frozencephalopod, and bakery, manufactured under bothcustomer’s brands and TUF’s own brands, contributes11% of the total corporate revenues.


RELATEDBUSINESS GROUPS


Asian Pacific Can Co., Ltd. (APC)

Asian Pacific Can Co., Ltd. is a manufacturer and distributor of steel and aluminum food packaging products (conventional lid and 2-piece easy-open lid).

The company’s sales in 2012 stayed flat from a year ago. It also invested 13 million baht inpurchasing a 307-mm can making machine toexpand production capacity and fulfill consumers’growing demand. The company currently can produceup to 16 million pieces of 307-mm empty cans.

In 2013, APC will further expand its productioncapacity to support increasing orders. APC isdetermined to maintain and further develop it its quality product standards and punctual delivery to meet customers’ demand with high satisfaction.

Thai Union Graphic Co., Ltd. (TUG)

Thai Union Graphic Co., Ltd. offers high-quality offset printing services, such as label printing, box printing, book printing, rolled sticker printing, etc.

The printing industry is undergoing change as aresult of the growing popularity of digital media. The demand for print media for advertising purposeshas declined. Therefore TUG has changed itsmarketing focus in 2012 to industrial printing, such as for industrial packaging, in order to compensate for a lower demand for print media.

In 2013, TUG will remain its focus on industrial printing. It will also apply for certification of quality standards, namely GMP and HACCP (The companyhas already been ISO-9001 certified), in order to produce prints that can be in direct contact with food. This plan should be accomplished in the third quarter of 2013.

T-Holding Co., Ltd. (THD)

T-HOLDING CO., LTD. is a marketing communicationsstrategy consultant and a distributor of branded products under the trademarks of “Sealect”, “Fisho” and “Bellotta” for the domestic market in Thailand.

“Sealect” Family

In 2012, the overall canned fish market in Thailand increased by only 1% due to economic uncertainty and a lower demand after the Thai flood crisis in 2011. However, Sealect remained ranked the secondin the overall canned fish market with a growth rate of 13% and retained its first ranking within the canned tuna category with a market share inexcess of 45%.

In 2012, there were continual marketing efforts on Sealect brand in the canned fish market. Sealectcanned tuna products were rebranded and launched with a new logo and new packaging in order to highlight its leadership on innovation in the canned tuna market. The new images projected an universal recognition and higher product premium. In addition, the company performed its 360-Degreemarketing communications plan under the campaign“Gin Pla Dai Boi, Aroi Dai Tookwan” (Enjoy your daily meal with tuna) through road show activities, online media, including a new set of advertising commercials. The latter was to convey a messagethat that Sealect Tuna is a suitable ingredientfor preparing different dishes, both Thai andinternational. Also, fish products are fit forhealth-conscious consumers and can be consumedon a daily basis, particularly that tuna fish has a high nutritional value and can be used in many new recipes for everyday cooking with high palatability.

For sardine and mackerel products, THD signed a Memorandum of Understanding (MoU) for a businesspartnership to support the Doi Kham Royal Project in 2012. It sourced high quality tomatoes from Doi Kham as an ingredient in its tomato sauce for sardineand mackerel products while provided a job and income opportunity for farmers working in the royal project.

In 2013, the company will emphasize strengtheningthe brand image of Sealect brand in order to highlightits leadership in the canned fish market with high quality and variety products to meet customers of all genders and ages with satisfaction. THD will also expand its distribution channels in Bangkok and up-country while continuously developing new products


“Fisho” Family

Fisho is also one of the company’s leading productbrands. In 2012, its brand image was greatlyenhanced for its high quality and popularity among Thais. The company developed products that meet the different perspectives of its target groups. Fisho’s brand image was developed based on the following key elements:

1. Product Quality

1.1 Formula development: the company developed a new formula and had a leading research institute to review and test it. The company

then concluded that its products were acceptable in all major aspects by consumers, such as

flavor, product texture and color. Hence, the company was confident that its products quality

should meet customers’ demand.1.2 Packaging development: Fisho’s packaging

was re-designed in order to to project a more modern image by using innovative opaque metalite to replace the plastic sheet. By this way, fish quality can be better preserved and warrants a high quality product to customers.

1.3 Product format development: Fisho products were developed in many different formats and flavors for customers’ choices. Currently, fish stripe products carry 6 flavors, fish chip 5 flavors,

grinded fish 2 flavors, and fish crispy 3 flavors. The fish crispy is unique in the seafood snack market and has no competitor. Therefore, this is an attractive segment for the company.

2. Fully Integrated Communication

Fisho presented its new campaign under the concept“Fisho Happy Snack”. The concept showed that Fisho is a fish stripe snack with an outstanding and different quality from other snacks. Fisho is a snack you can eat all the time and can make a customerfeel good. The company applied the 360-degreeadvertising to build product recognition andacquaintance with target customers. The company

also launched an online media via a Facebook fan page (www.facebook.com/fishopage) for a direct and up-to-date communication to consumers and a growing popularity of digital media.

3. Distribution Channels

The company made its product display on shelves in a more attractive way in each distribution channel,such as modern trade and superstores in upcountryareas. Also, the company made a brand block more appealing to buy. Moreover, the company a offered promotions to business partners to push sales as well as conducting product tasting for customers. Our business partners l responded positively and stocked more Fisho products in their stores.Meanwhile, our consumers also showed have more interests in Fisho products.

“Bellotta” Wet-Based Dog and Cat Food Family

Pet food in Thailand is a sizeable market with high growth potential. In 2012, the local pet food marketgrew 20% growth due to the fast growing petpopulation. Pet owners have also spent more on pet food on average because they tend to treat and take care of their pets more like their ownchildren or family members. This trend continued to grow based on a high growth rate in pet services and related business, such as grooming, boarding, training, recreational activities (e.g. swimming pool for pets), veterinary clinics and hospitals, medical treatments, equipment, clothing and accessories, snack & treat, and kitten-puppy farms and petcontests.

In 2012, Bellotta continuously focused on sales promotion to create product trial in order to make an impression on consumers and to build brand loyalty. Its sales revenue last year increased by 32% from the previous year, particularly from Alu Trayfor cats, which is a premium grade product. This hasconfirmed that pet owners are less price-sensitive and willing to pay for premium products due to their care for their pets.


Thai Union Seafood Co., Ltd. (TUS)

Thai Union Seafood Co., Ltd. is involved in frozen shrimp processing for export business.

In 2012, the company recorded sales revenue of USD 123.4 million, down 8% from the previous year. This was due to higher raw shrimp pricesbetween August and the year end. The Thai shrimp industry suffered a shrimp disease outbreak called EMS (Early Mortality Syndrome) which resulted in lower production. Moreover, other major shrimp producing countries, namely China, Vietnam and Malaysia, were also affected by this disease, leadingto increasing raw material prices. During the year, the company expanded its customer base in Koreaand other Asian markets (non-Japan), resulting in a growth rate of 69% from the previous year in these markets.

In 2013, TUS will put focus on market expansionin value-added products, such as Alive Shrimp which has high value and few competitors as well as building customer trust in its high qualityproducts through certification and compliance with international standards.

Thai Union Feedmill Co., Ltd. (TFM)

Thai Union Feedmill Co., Ltd. is a manufacturerand distributor of aquatic feed for shrimp and fish, serving both domestic and overseas markets.

In 2012, Thailand exported 348,390 metric tons of shrimp products worth THB 95,473 million. This showed a decline of 10.3% in volume and 12.7% in value respectively from lasrt year due to lower shrimp production. Thai shrimp production in 2012 is estimated to drop 10% to 540,000 metric tons from 600,000 metric tons a year ago due mainly to:

1. Shrimp disease outbreak called EMS (Early Mortality Syndrome) 2. Shortage supply of high quality baby shrimps

In terms of TFM’s performance, the company’s sales were short of its original annual target. In 2013, the domestic shrimp feed and fish feedmarkets are expected to continually grow, especiallyfor feed for Sea Bass which expects sales to more than double and generates the highest margin among other fish feeds. This will be also the firm’s focus market this year.

In 2013, the company will emphasize marketexpansion and developing a new customer base. Meanwhile, the company will also secure its existingcustomer base via representatives and direct sales to farms.

Thai Union Hatchery Co., Ltd. (TUH)

Thai Union Hatchery Co., Ltd. is a manufacturer ofhigh-quality white shrimps (Penaeus vannamei) nauplii under strong quality commitment to ensure continual provision of unparalleled products and services to customers. At present, the company is certified by international standards, such as The Accreditation Committee of Aquaculture CertificationCouncil, Inc. (ACC), Code of Conduct Shrimp Hatchery (COC) and ISO 9001-2008.

TUH’s sales in 2012 showed growth rates of 90% and 60% of nauplii products and shrimp babiesrespectively, thanks to a production capacityexpansion of baby shrimps. The baby white shrimp farm at Amphoe Sathingphra, Songkhla province and the one in Amphoe Khogkloy, Phangaga province can produce 2,400 million baby shrimp per year. The company also changed its deliverymethod of baby shrimps from delivery in bags to delivery in tanks. The new method has a betterquality of baby shrimps and meets customers’satisfaction.

Meanwhile, TUH started the breeding program and produced its own high quality broodstocks, nauplii and baby shrimps. The company also produced Polychaete to feed its brookstocks. By this way, the company can reduce buying Polychaete from anexternal party by as much as 10% of the company’stotal usage.


TUFSTRENGTHS

1. TUF and other Thailand-based subsidiaries are all major seafood processors with combined

production capacity of tuna, frozen shrimp, frozen seafood, and canned pet food of 580,000,

76,000, 131,000 and 55,000 tons per year respectively. Such a large annual output enables lower cost of production through economy of

scale.

2. TUF is the brand owner of a number of world’s top canned and frozen seafood products, ranging

from “John West”, the number-one brand in the United Kingdom, Ireland and the Netherlands;

Petit Navire and Hyacinthe Parmentier, the dominant brands in France; “Mareblu”, the third-largest brand in Italy; “Chicken of the Sea”, the third-largest brand in the U.S.; “Century”, the number-one brand in China; and “Sealect”, the leading brand in Thailand. TUF’s production base that spans across 4 continents, i.e. America, Europe, Africa and Asia, further broadens and diversifies its

marketing and production arena in reaching every region globally, with greater overall

strengths.

3. TUF is the world’s largest tuna canner. One of every five tuna cans on the shelves worldwide is manufactured by TUF. TUF is also the leader

in global frozen seafood industry.

4. TUF is one of a few seafood manufacturers that manage the entire value chain processes.

5. TUF’s cold storage for raw materials and finished products with overall capacity of

99,000 tons enables the company to effectively fulfill customer needs in terms of product

choice and order volume.

6. Thai Union Group products are marketed in many countries around the world, thus

outspreading global customer base, and, at the same time lowering economic impacts in any certain country on TUF.

7. Thai Union Group has strong international competitiveness. High quality standard products

at competitive price, experienced and capable marketing teams, as well as our enduring, exceptional customer relationship, play roles

in securing us such a strong competitiveness in global market.

8. Management members carry with them long experience in, and insight into, frozen seafood

business and they are well respected in the industry. Our operational personnel are fully

professional capable for their role. These combined strengths are among the drives that

propel our continuing growth.


FINANCIALHIGHLIGHTS

Sales Total RevenuesGross ProfitTotal AssetsTotal LiabilitiesShareholders’ Equity

Basic Earnings per ShareDiluted Earnings per ShareDividendPar ValueBook Value per Average Share

98,67099,58916,41783,27756,16127,117

106,698107,67916,36294,75954,41540,344

5.355.211.561.00

25.57

4.394.292.101.00

34.77

71,50772,8109,531

74,77751,54123,236

3.203.151.601.00

23.36

Unit: Million Baht

2012

2012

2011

2011

2010

2010Per Share (Baht)

Financial Highlights


AWARDS, CERTIFICATESAND RANKINGS

Our efficiency-focused policies and effective strategic management, coupled with a strong determination to strengthen our capabilities in all aspects; management, food innovation, quality standards and more, that would prepare us for the dynamic business challenges, has secured us a host of prestigious awards granted by different state and private certificationbodies and organizations, trade partners and the financial community in 2012 as follows:

1. Thiraphong Chansiri, the President of Thai Union Frozen Products, was the first Asian executive awarded IntraFish Media’s 2012 Person of

the Year for his leadership in building TUF a successful international seafood company. TUF’s strong growth together with their emphasis on enforcing sustainable seafood industry development, as well as the acquisition of leading European seafood business, contribute to the remarkable success.

2. Voted for 4 consecutive years the Most Favorite CEO for their outstanding business management and industrial expertise, and, the Most Favorite Investor Relations (IR) in the Food and Agribusiness sector, by the Securities Analysts Association (SAA) of Thailand’s annual awards.

3. Voted Thailand’s Best Mid-Cap Company in 2012 by Finance Asia Magazine’s annual Best Managed Companies Poll, the first Thai company

to be awarded for 3 consecutive years (2010-2012).

4. Awarded “The Southeast Asia Challengers 2010” by The Boston Consulting Group as one of the most successful Southeast Asian

companies, with outstanding management contributing to the continuing growth and profit,

and, successful international investment leading to global brand business.


5. Awarded “Beginner Award 2012” for company compliant with the Stand for Corporate Social Responsibility, by the Department of Industrial

Works, Ministry of Industry. The award is granted to the entrepreneurs that meet the Standard in environmental awareness, community involvement and development, and, their readiness for level 2 green industry or green operations.

6. Awarded the Quality Award 2012 for food processing entrepreneur, by the Food and

Drugs Administration, Ministry of Public Health, for continually maintaining product quality standards, applying quality system to develop or control the production processes for consistent quality products, as well as

attaining good social responsibility.

7. Accredited with “Thai Select” Certification by Department of International Trade Promotion, Ministry of Commerce, for Sardine in Spicy Dressing, and, Stir-fried Tuna Curry (Panaeng Tuna) as Thai recipes with preserved genuine Thai ingredients, spices and tastes. The certificate

also takes in consideration the internationally accepted preserved food packaging for unchanged premium quality food to insure customer and consumer confidence in international markets.

8. Upgraded to AA- from previously A+, corporate credit and bond ratings with a stable outlook by TRIS Rating Co., Ltd. reflects the company’s

capabilities in business operations and competitiveness as the seafood industry leader, with prominent global brands, and strong financial profile.


The Company will be manufacturer of qualityprocessed seafood for export with focus on producing products that are safe, hygienic, with up to standardquality, met with customer acceptance and satisfactionup to having continuous improvement.

Top quality products are always our first priority, which our domestic and international customers can be assured of. Our products are of internationalstandards and quality, are traceable, and areresponsive to the needs of our customers globally.

All TUF products pass our rigorous quality inspectionsystem in every stage of production; biological, chemical and physical. TUF’s own inspectionlaboratory is certified with ISO/IEC 17025 by the Bureau of Laboratory Quality Standards,Department of Medical Sciences, Ministry of Public Health. The lab was also awarded the best 2010

FOOD SAFETYAND QUALITY STANDARDS

agricultural product inspection laboratory from the National Bureau of Agricultural Commodity and Food Standards (ACFS), Ministry of Agricultural and Cooperatives.

With our continuous determination and attention on sanitation/ hygiene and food safety, we have been certified with various quality accreditations from both national and international organizations. The noteworthy include ISO 9001:2008 for quality management system; ISO 14001 for environmentalmanagement system; Best Aquaculture Practices– certification standard for shrimp production throughout the value chain processes; HACCP, GMP, BRC, IFS, Kosher, HALAL, etc. Thesenotations affirm the company’s concise and rigorousquality control and inspection system as weendeavor only the best quality food for ourcustomers.


SUSTAINABLEDEVELOPMENT


The results from aforementioned dialogues were deployed in shaping our sustainability direction, goals,strategies, and action plans in a more meaningful way to effectively address the sustainability journeyfor us and our stakeholders. Therefore, sustainabledevelopment for us is an integrated management of the business pursuit and the development of economic, social, and environment as opposed to a program or an activity in separation of our businessconduct. This is conceptualized by our sustainabilityphilosophy “We can, We care, We connect”.

These three basic elements of our philosophyindeed evolve from decades of our visionaryleadership, values and culture which have formed the success formula of our business growth and good corporate citizenship.

WE CAN

“We can” states our committed business propositionas a provider of safe foods and necessary nutritionto the world’s fast growing population, sourcing from well managed natural environment. In couplingwith visionary leadership and distinctive expertise,we are thus prime to take the leadership in the world seafood industry with operational excellence,product offerings and a global network.

We realize that, in order to be genuinely sustainable, every business activity across the entire value chain must be managed with an in depth understanding of their environmentaland social impacts both positive and negative. In 2012, we have thus focused on dialogingamong management, employees, and stakeholders (e.g. suppliers and customers) in making understanding of our sustainability concept.

WE CARE

Being aware of the dynamisms in economic, social,and environment that continuously drive contextualchange from the past till present and onto thefuture, we always conduct the business with great caution and being responsible to our stakeholders. We are committed to pursuit 4 principal sustainabilityobjectives: Respect for Environment, Excellence for Consumers, Be a Great Place to Work, and Care for Society respectively.

Respect for Environment

Sustainable Fisheries

Being dependent on the natural resources,particularly the products from the oceans such as tuna, we realize that our business activities can create an impact to the environment as much as the impact of environmental changes placing on our sustainability. We thus strive to protect themarine environment through best practice andsustainable fisheries management.

We cooperate with every Regional FisheriesManagement Organizations (RFMOs) in governing and managing marine ecosystems by provisions of our tuna procurement data for regulating the conservation measures and improving scientific research capabilities.


In addition, as a co-founder of the International Sustainable Seafood Foundation (ISSF) together with our subsidiaries, MW Brands and Chicken of the Sea International, we are dedicated to lending consistent supports both directly and indirectly to ISSF for its missions in delivering sound scientific advices and best practices to tuna industry. ISSF has placed their strategic focus in 6 areas namely;

• Control and reduce fishing capacity• Mitigate Bycatch• Eliminate illegal, unregulated and unreported

(IUU) fishing• Expand data support to Regional Fishery Management Organizations• Advance performance in monitoring, control

and surveillance• Improve overall tuna stock health

We are proud to be part of the conservation efforts and committed to be proactive in;

• Sourcing only from companies or fishing vessels that conform to the respective RFMOs,

• Regulating the documentation that enables traceability of our fish supplies for fishing vessel,

fishing ground, and fishing gear as to ensure that we refrain from transactions in tuna caught

by vessels known or listed for illegal, unregulated and unreported (IUU) or practices endangered

to mammal such as dolphin, and• Refraining from companies or fishing vessels

associated with shark finning.

Moving Towards Zero Waste

With dedication to preserve and enhance the quality of ecological services essential for current and future socio-economic development, we feel obliged to take an initiative beyond just strictly compliance with related environmental laws and regulations. As such, we adopt an internationally recognized management system, specifically ISO 14001.

In moving towards zero waste operation, weemphasize on the principle of pollution prevention from reducing the consumption of materials, energy,water, and packaging to waste utilization such as making use of fish wastes from our processingplants as feed meals and other value addedproducts.


We recognize the important role of our employeesin fulfilling our environmental commitment. Allemployees are engaged through necessary technicaltraining to be aware and understand how theenvironment can be impacted by our businessoperations across the entire value chain. They are also encouraged to take their own initiative inplanning and campaigning for minimizing wastes and improving energy efficiency.

Combating Climate Change

We are committed to take our responsibility incombating climate change. At present, our productionimports energy both electricity and fuels. Variety of engineering projects initiated and continued in the past has resulted in significant energy saving per unit product. Those include, for instance, the utilization of waste heat from refrigeration system. In 2012, we have spent 240 million Baht of capital investment to recover energy in the form of biogas from wastewater, hence lessening our dependencyon imported energy, reducing wastes and greenhousegas emissions from our production.

In collaboration with our major trade partner, the carbon footprint was conducted for the entire value chain of our shrimp industry, from hatchery to farming,

processing, transporting, and catering respectively.As a result, we are capable of identifying the patternand key sources of greenhouse gas releases and, hence, defining future strategies for improving our shrimp production chain in regards to greenhouse gas emission.

Excellence for Consumers

Quality Management and Food Safety

Product quality and food safety is central to how we operate our business and we strive to be a trustedprovider of safe and hygienic foods, products ofgood taste, nutritious and value.

We make sure that every step of our operation is subjected to rigorous quality control, from rawmaterial sourcing to product delivery. In doing so, weadhere to international quality management practicessuch as ISO 9001:2008, Good Manufacturing Practice (GMP), Hazard Analysis Critical Control Point (HACCP) and Best Aquaculture Practice (BAP). Furthermore, we apply certain standards to accommodate the specific requirements ofselected group of customers and consumers. They include, for instance, HALAL, British Retail Consortium (BRC), International Food Standard


(IFS), etc. All our laboratories are also ISO 17025 certified, and we take an effort to assure that every third party providing laboratory and quality testingservices strictly follow our standard code ofpractice for quality and food safety.

As part of total quality management, we ensure all employees in the production line proper knowledgeand awareness of good practices in regard to health, hygiene and food safety. We even take care of their personal health and hygiene. Every single one of them is subject to relevant medical examination prior to the commencement of work and annually thereafter. Not only promoting health and safety of our employees, we also encourage all employees to take a good care of the wellbeingof their family. Our commitment can be realizedthrough the welfare and benefit provided inadditional to basic wage and allowance, for example,sport facilities on-site, proper living quarters, health promotion campaigns including sport and recreation.

Product Traceability

Manufacturing and supplying products with integrityis of the greatest importance to us. We respect the rights of consumers and customers for productinformation in the areas of product quality, consumers’

health and food safety, including environmentaland social aspects associated with sourcing,processing and delivery. We thus make sure that the information flow is appropriately managed so thatthe traceability can be made for any finished productbackwards to the source of every key ingredient of interest. We also work proactively to strengthen and continually improve our management system per se in pursuing the standard practice in regard to product traceability generally accepted.

Be a Great Place to work

Equity and Human Rights

With highly respect of human rights and thedignity of individual, we endorse the governing principles addressed in the Universal Declaration of Human Rights, United Nations Global Compact,and International Labour Organisation (ILO). As suchwe are fully committed to equity (no discriminationagainst national origin, religion, gender, marital status,language, or workforce ranks), not associating withforced labor, child labor, and human trafficking, and not supporting bribery and corruption.


We are dedicated to maintain our good labormanagement practices by being strictly abided by the local laws at the minimum. We also workfurther to take appropriate action in addressingareas for improvement in reference to theinternationally recognized standards such as those issued by Ethical Trade Initiative (ETI) and BusinessSocial Compliance Initiative (BSCI). In doing so, we are opened for the dialogue and collaboration between the company and our business partners, and the company versus both local and internationalnon-governmental organization (NGO) to bring about mutual understanding and to seek proper solutions to all potential problems.

Occupational Health and Safety

As for the occupational safety and healthy workingenvironment for our employees, we place the highestpriority on prevention of incident and protectionof our people from risks and harms. On top ofbeing strictly in compliance with related laws andregulations, we adopt an internationally recognizedmanagement standard as mean to improve the standardization of our practice. Since 2011, we haveobtained the authorization from the Occupational Safety and Health Bureau, Department of Labour Protection and Welfare to perform in-house certifiedsafety trainings for safety officers in all levels and safety committee member. Various trainings have

been conducted so far such as basic fire fighting, safety supervisor for confined space work, and othersrelated to awareness raising and education ofsafe practices for our employees and contractors. At present, we are working towards OHSAS 18001 certification.

With safety accountability and leadership of our management, we have never encountered any fatalincident in our company’s history. We realizethough that the management of occupational health and safety must be sustained with continuousimprovement. Lessons learnt from the pastincidents such as the fire incident at our shrimp production line in Samutsakhon are valuable in preventing a recurrence through improving our standard safety practices concerning infrastructure and production line.

People Development

We believe in the utmost importance of human capitalas the key foundation for sustainable development. We have worked continuously on people developmentas well as organizational development. The focus is made on effective business and efficient work processes, constructive job assessment, competitivebenefit and salary structure, appropriate performanceevaluation and KPI deployment. Key programs that have been launched and implemented continuously


include but not limit to Individual Development Plan(IDP), Human Resource Information System (HRIS)and Star Program aiming at developing and providingfast-track career paths for current employees. The most recent program “TUF Management Associate Program” has been introduced to provide opportunitiesfor young talents from within and outside theorganization to experience working in our overseas operations.

Employee Engagement

We are aware of how significant the quality of life of our employees has on corporate sustainability. We thus thrive to create and maintain a happy work place through various programs and activities that focus on joyful working environment and spirit of teamwork. Many of these programs (such as New Year’s Party, Songkran Festival, Company-spon-sored Annual Trip Package, and Annual Mini-Half Marathon) involve the majority of workforce while some programs, such as Hometown Community Development, open up the opportunity for employeesto initiate and implement the ideas of their own.

Care for Society

Care for Our Neighbors

Apart from taking a great care of our employees, we also focus on working to promote a betterenvironment and society in collaboration with localgovernment agencies, private organizations, and neighborhood communities. Our main productionfacilities locate in Samutsakhon, one of theprovinces in Thailand highly populated with migrantworkers. For some of these migrant workers, takinga good care of their children while they work can be a great burden. We have worked to resolve thisissue in partnership with the Labour Rights PromotionNetwork Foundation (LPN) and pilot schools in Samutsakhon under “TUF Care Center” program. This program aims at providing opportunity formigrants’ preschool children to gain access to proper education and obtain appropriate nutrition for their dietary. At the early stage of the program, we make the commitment to provide funding for establishing basic infrastructures (e.g. a buildingfor classroom), expenses for teachers and staffs, and expenses for food and supplementary milk regularly provided equally among Thai andmigrants’ children.


We also aim at propelling a proactive developmentof the program under its 5 year implementingperiod (the beginning of 2013 till the end of 2017) and have the desire to leverage the success of this program to bring about more collaboration and partnership locally in addressing other social needs and tackling inadequacy in an efficient and sustainable manner.

Care for the Ones in Need

We consider that healthy society providesopportunities to a diverse range of its citizens in access of fundamental social services rather than being a society whose citizens exhibit healthy and wealthy living. Therefore, throughout decades of our business history, we continually lend our direct supports to disaster victims and underprivileged groups and indirect supports via various charitable organizations, public and private organizations. To name a few, our social servicing programs include

• “Hometown Community Development” program aiming at promoting employees’ sense of engagement with their hometown and care to initiate their own idea for community development,

• “Sealect See Love” volunteering camp recently launched to promote employees’ participation in community and social works,

• “Birthday with Rejoice in the Merit” as another monthly event bringing a group of employees whose birthdays are in the same month to

giving services,• “Blood Donation” organized for six consecutive years with over 3,000 units of accumulated

blood donated to Thai Red Cross Society.

Care for the Future Generation

“Ethically engaged and empowered youth today can make tomorrow a better and brighter world”reflects our belief in the importance of youth on sustainability. This belief also constitutes our policy on promoting the engagement of all concerned on youth development. We continuously collaborate with our partners in establishing and conducting programs that promote creativity and systematic thinking among youth group such as volunteering forrural area development camps organized by academicinstitutions, activities on National Children’s Day by public and private organizations.


WE CONNECT

With strong belief that genuine sustainability isresulted from collective initiatives and offerings byevery stakeholder, we take a participatory approachin propelling our sustainability strategy which is in alignment with our adherence to good corporatecitizenship and our long-standing company’s values,the constituents that govern the way our business is conducted and the way we work. As the way tovalidate our sustainability direction and goals against economic, social, and environmental settingand stakeholders’ expectations, we seek first to understand the context of sustainability within which we operate and the values to which each of our stakeholders adhere. We take every effort to make sure that every opinion and concern of our stakeholders is seriously taken into consideration in planning and taking proactive actions towards the solutions that emphasize on precaution and prevention of potential risks and future problems. Besides, we strive for being recognized as an active member of the society who contributes to the development of long-term sustainability for all through incubating the good deeds from within our organization, then amplifying their impacts locally, regionally, and globally respectively.

Sustainability Governance

To ensure that our sustainability governance and policy deployment are effective and transparent, the Sustainable Development Committee chaired by CEO and constituting with appointed membersfrom senior executives takes the leading rolein policy planning, providing framework forimplementation, and monitoring the progress and performance of sustainability initiatives.

In addition, 6 working teams have been appointedto take action efficiently and proactively in response to our apparent sustainability issues in the areas of

• Corporate Social Responsibility (CSR) and Environment

• Ethical Labor Practices• People Development for Sustainability• Climate Change Impacts on Shrimp Farming• Sustainable Fisheries• Energy and Greenhouse Gas Emission


INDUSTRY OUTLOOKAND COMPETITION

The overall Thailand’s food industry in 2012 demonstrated export value of 971,689 millionBaht expanding by 0.8% year-on-year. Shrimp and canned and valued-added tuna productsranked the third and fourth took a share of 9.9% and 8.4% respectively, based on overallThailand’s food export. As for the situation of seafood export in previous year, the global economy decelerated in the first half rooted in European financial crisis. The US economyalso was not yet fully recovered while national competitors put unabated efforts in their export products which leaded to severe pricing competitions and then impacted onnumerous industries of Thailand’s manufacturing and export sectors, including seafood industry.

Challenging factors to the business are increased each year. For this year, insufficiency and rising price of raw materials were critical. For instance, a priceof tuna increased by 22% from previous year and ashortage of shrimp caused by EMS (Early MortalitySyndrome) epidemic, resulted in inadequateproducts. Because of such epidemic, China, Vietnam,and Malaysia also generated less shrimp products causing continuous rise in shrimp prices. Other worth-mentioning factors were minimum wageincrease, fluctuated exchange rate, and rules,

regulations, and requirements in relation tosustainable resources and environment. Inconsequence of these, Thai entrepreneurs need to urgently adapt themselves, closely keep an eye on situations, and develop their work procedures to be efficient, fast, and ready for competition with high capacity.

Thailand’s seafood export in 2012 was categorized with details as follows:


FROZEN SEAFOOD PRODUCTS

Frozen Tuna Loin

The volume of Thai frozen tuna loin export during 2012 was Bt1,793 million, dropped by 70.7%. The whole year export volume reached 10,826 metrictons representing a 73.5% drop year-on-year. TheUS was the largest market for Thai frozen tuna loin exports with 2,541 metric tons in volume and Bt427 million in value and took 23.8% share of the total export value. The second largest export marketfor Thai frozen tuna loin was Algeria with export value of Bt310 million, followed by Spain withexport value of Bt251 million, accounting for 17.3% and 13.9% of the total export value, respectively.

Frozen and Value-added Shrimp

Thai frozen and value-added shrimp total export volume during 2012 was 326,485 metric tons,declining 13.9% year-on-year. In 2011, the volume was 379,346 metric tons. The total export value of the year was equivalent to Bt90,473 million, down by 15.2% year-on-year in comparison to the previousyear value of Bt106,716 million.

The US was ranked first as the most important market for Thai frozen and value-added shrimp products with 122,207 metric tons and the export value reached Bt33,520 million or 37.1% of the total export value. Ran second was Japan, the valuewas Bt24,497 million, followed by Canada whose itsvalue was Bt6,052 million and the United Kingdomwhose its value was Bt5,902 million, with 27.1%, 6.7% and 6.5% share of the total export value,respectively.

Frozen and Value-added Cephalopod

Thai frozen and value-added cephalopod totals exportvolume during 2012 was 69,388 metric tons, rising7.1%, compared with their 2011 counterparts. Meanwhile, export value obtained a 4.5% growth, from Bt12,859 million in 2011, reaching Bt14,391 million in 2012. The largest export market was Japan whose export value was Bt6,447 million. By ranking, Italy and the US are also importantexporters with value of Bt3,280 million and Bt1,140 million respectively. These top three exporters shared 44.8%, 22.8%, and 7.9% from the overall export value respectively.


CANNED SEAFOOD PRODUCTS

Canned Tuna

Thai canned tuna export during 2012 was equivalentto 548,667 metric tons, going up by 5.9%. Its exportvalue amounted to Bt80,805 million representinga 31.4% increase, with a year-on-year growth of 31.4%. The US took the lead in export market with export volume of 81,616 metric tons, or a value of Bt13,301 million. The second biggest export marketwas Australia with export volume of 34,148 metric tons or Bt5,765 million in value. The third market destination in rank was Japan with export volume of 26,790 metric tons or a value of Bt5,038 million.

Canned Sardine and Mackerel

The year-on-year growth of overall Thai export of sardine and mackerel in 2012 was registered both in terms of volume and value. The whole-year export totaled 138,422 metric tons with a jump of 35.3%, compared with 102,335 metric tons in previous year. Meanwhile, the annual export valuedBt10,551 million with a 52.9% year-on-year growth, from Bt6,900 million. The most significant export market of canned sardine and mackerel was South Africa with an export value of Bt3,180 million or 30%. The second ranked market belonged to the

US with a value of Bt868 million or 8.2%. The third in rank was Brazil with a value of Bt797 million or 7.6% of the total export value.

Canned Crab Meat

Thai canned crab meat export during 2012 reached export value of Bt1,689 million, with a 14.5% growth, and its total export volume for the entire year was 3,837 metric tons, with a growth of 21.6% year on year. The US, identified as the number-oneexport market, generated an export value of Bt1,348 million or 79.8%, followed by smallerexport markets in size where were Singapore, Canada, and the UK with 3.3%, 3%, and 2.8%respectively according to the total export value.

Canned Pet Food

Canned pet food this year generated total export of 346,275 metric tons going up from previous year by 13.5%, with its export value of Bt25,576 million,rising 19.2% year on year. Japan remained as the top market exporter with 134,380 metric tons or 38.8% of the total export volume, sharing market export value of Bt9,679 million or 37.8% of theentire export value. The US, by ranking, was the second with a value of Bt4,377 million or 17.1%. Italy was in the third with a value of Bt2,167 million or 8.5% of the total export value.


INDUSTRY TRENDS

Although Thailand’s export situation in 2012represented unremarkable growth because ofnumerous factors, such factors were anticipated to be eased up during 2013 which would result in a good direction of continual growth of Thai seafood industry. The factors from offshore market driven by sluggish global economy did not provide significant impacts as these products are essential to living and Thai entrepreneurs have adapted themselves to handle their situations. The growth of Thai seafoodindustry would be backed by participation in the coming ASEAN Economic Community (AEC) as a great push for trading expansion and productrepricing conducted by entrepreneurs in response to the soaring costs which the entrepreneurs had earlier carried the costs by themselves.

Nonetheless, many factors, such as raw materials,have called for a close monitoring from theentrepreneurs. In addition to competitiveness, procurement of raw materials, such as tuna, have more challenging because raw materials have to correspond with current demand in the production.Additionally, sustainability is regarded as an issue which will play an important role. The regulations andrequirements concerning the issue of conservationand preservation of natural resources in thefuture are likely to be stricter which would impact the amount of fishery and competitiveness ofentrepreneurs. A factor of industry, particularly a shortage of labors is a noteworthy one.

Besides, the issues of non-tariff trade barriers (NTBs), European Union (EU)’s GeneralizedPreference of System (GSP), and US shrimpantidumping duty (AD) have required a closeattention and preparation of entrepreneurs toencounter the situations.

Thai Union Frozen Products PCL. (TUF) hasformulated plans to be circumspectly and carefully implemented in every step to mitigate risks which possibly impact the Company. Our Company has consistently followed up information and situationstogether with continuously developing all jobfunctions which covers the areas of productionprocess, marketing strategy, product creation,inventory management, raw materials procurement,and technology development of machinery so as to reduce the labor shortage and get ourselvesprepared for global competition efficiently andsustainably.

Sources:• Customs Department • Ministry of Commerce • National Food Institute

35%35%30%10%5%


INDUSTRY TRENDS

Although Thailand’s export situation in 2012represented unremarkable growth because ofnumerous factors, such factors were anticipated to be eased up during 2013 which would result in a good direction of continual growth of Thai seafood industry. The factors from offshore market driven by

impacts as these products are essential to living and Thai entrepreneurs have adapted themselves to handle their situations. The growth of Thai seafoodindustry would be backed by participation in the coming ASEAN Economic Community (AEC) as a great push for trading expansion and productrepricing conducted by entrepreneurs in response to the soaring costs which the entrepreneurs had earlier carried the costs by themselves.

Nonetheless, many factors, such as raw materials,have called for a close monitoring from theentrepreneurs. In addition to competitiveness, procurement of raw materials, such as tuna, have more challenging because raw materials have to correspond with current demand in the production.Additionally, sustainability is regarded as an issue which will play an important role. The regulations andrequirements concerning the issue of conservationand preservation of natural resources in thefuture are likely to be stricter which would impact

entrepreneurs. A factor of industry, particularly a shortage of labors is a noteworthy one.

Besides, the issues of non-tariff trade barriers (NTBs), European Union (EU)’s GeneralizedPreference of System (GSP), and US shrimpantidumping duty (AD) have required a closeattention and preparation of entrepreneurs toencounter the situations.

Thai Union Frozen Products PCL. (TUF) hasformulated plans to be circumspectly and carefully implemented in every step to mitigate risks which possibly impact the Company. Our Company has consistently followed up information and situationstogether with continuously developing all jobfunctions which covers the areas of productionprocess, marketing strategy, product creation,inventory management, raw materials procurement,and technology development of machinery so as to reduce the labor shortage and get ourselves

sustainably.

Sources:• Customs Department • Ministry of Commerce • National Food Institute

TUNA

SARDINE/MACKEREL

PET FOOD

FROZEN SHRIMP

FROZEN CEPHALOPOD

MARKET SHARE OF THAI UNION GROUP AMONG THAI EXPORTERS


RISK FACTORS AND OTHER RELATED

FACTORS FOR INVESTMENTCONSIDERATIONS

BUSINESS RISKS

Trade Barriers

Thailand seafood industry has grown significantlyto become one of the world’s leading players, bothin terms of production potential and competitivenessas 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 strongreputation and unwavering trust in global marketplaceas one of the world’s top seafood processing and exporting countries. Thailand seafood export’s revenue of the year 2012 was worth THB 264,766 million, a 1.89% increase from the previous year, helping to develop a strong economy for the country.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 stringent each year.

Sustainability in fishery resources has currentlybecome a challenging issue due to stricter rules and regulations of fishing methods and the amount of fishing as well as limited maximizing the numberof fish caught toward recovered and sustainable fisheries. Realization of sustainability requiresa serious attention and collaboration from allentrepreneurs.

All mentioned issues reflect a challenging in doingbusiness in the world today; therefore entrepreneursmust closely monitor and adapt quickly to a current in order to stay competitive in the world.

The Company’s Policies and Actions Taken

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 inorder to stay compliant with any upcoming non-tariff barriers. With our company policy and commitment to be the world best seafood manufacturer andexporter, our customers and trade partners have confidence and trust in the company and widelyaccepted our products. In addition, the company also pays attention to safety standard management,sanitary and environmental standard and business continuity management for business sustainability.Our policy framework of business consists of:

• Resources protection for future sustainability by being one of founders of the International Sustainable Seafood Foundation (ISSF) for the long-term conservation and sustainable use of marine resources in order to create a balanced exploitation of marine ecosystems.

• Environmental management by focusing on resources efficiency for example, energy, raw material and water usage.

• Safety management, sanitary and workplace environmental standard under Thai labor law and related regulations in order to create equality on all employees.

• Social and community sustainable development by applying from Corporate Social Responsibility principle.


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 constructingmanufacturing facilities in 10 countries, including Thailand, Indonesia, Vietnam, India, Papua New 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

Procurement and Raw Material Risk

The cost of raw materials accounts for about 70 to 80 percent of our overall product cost. Raw materialprocurement is therefore a major driver of theCompany’s costs and profits. Prices of in accordancewith world market situations. Therefore, it is our policyto set our prices based on the prevailing markettrend which could occasionally result in costdifferential between raw material inventory and products sold owing to their variances in purchase costs and selling prices. In addition, the fluctuationin world market energy prices has been identified as another influential risk factors that have constantimpacts on several cost items, such as prices of fish raw materials packaging materials, seasoningand other ingredients, which have also variedaccordingly.

The Company’s Policy and Actions Taken

TunaTo minimize the cost difference between the timeof raw material purchase and when the finished products are sold, and to allow the shortestperiod of variance possible, our sales of finished products and purchase of tuna are made between30-45 days in advance, while maintaining inventoryturnover at an appropriate level.

ShrimpWe source our shrimp directly from shrimp farmers in various farming regions throughout the country to ensure sufficient flow of supply. This process also enables us to match costs and selling prices to maintain initial profit margin at the time of higher shrimp price.

CephalopodWith continually growing demand for cephalopod raw materials, we pursue both local and overseasprocurement, which in turn protects us fromthe risk of the raw material shortage. We haveresponded effectively to price increases bymaximizing production efficiency and developinga diversified portfolio of value-added products,a strategy that has allowed us to maintain areasonable profit margin 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 our production efficiency to become even more resilientin times of fluctuating energy prices.

Human ResourcesThe seafood industry requires a number of laborerswho must be trained to have a skill of seafood production, so it is different from other kinds ofindustry. In addition, the workplace environment of


the industry is probably not pleasing as compared with that of other industry types, such as textures or electronics. In the light of smell and temperature,seafood production causes fishy smell and requiresno air-conditioners at a workplace, so a labor shortageis always problematic. Recently, the minimum wage in Thailand was increased to 300 baht per day in April 2012 (especially in SamutsakhonProvince); therefore the entrepreneurs’ labor cost has also increased unquestioningly. The Company’s Policies and Actions Taken

TUF has invested in automation since 2011 preparingfor a future labor shortage. This investment is also a solution on the minimum wage increase by asubstitution of machinery to some part of daily workers that not directly related to a production. With the combination of automation and convertingsupport workers into direct production workersshould lead to cost savings and cost levelstabilization allowing us to stay competitive with higher production capacity utilization and efficiency regardless of any potential impact from the minimumdaily wage hike pursued by the government.

NATURAL DISASTER RISKS

Dramatic changes in environmental and climatic conditions worldwide have been evident through the past several years and unprecedentedlyresulted in unusually frequent occurrence of severe natural disasters in each region across the globe, causing enormous loss of life and property as well as significant impacts on trading and economy. Flooding has been identified as the most frequent natural disasters in Thailand. Fortunately, in 2012 Thailand has no flood crisis in Bangkok and itsperipheral areas like the worst of all in the country’s flood records in the year 2011, helping business to operate normally.


Although there was no flood crisis in 2012, the company has had in place a set of well-planned preventive measures to be deployed in emergenciesand difficult situations as consequences of natural

disaster. It is intended that all these availableestablished measures will help cushion the severityof the impacts of future natural disaster threats. The measures are developed into corporateemergency preparedness plan, which encompassesvarious aspects of emergency during naturaldisaster period, including training session, emergencyresponse rehearsal and evacuation drill. The purposeof the emergency preparedness plan is to equip all employees with necessary survival skills and allow them to learn how to react properly and effectivelywith minimum panic whenever natural disaster strikes.

FIRE INCIDENT RISKS

In February 2012, our shrimp production plant in Samutsakhon Province faced a fire outbreak.Fortunately, damages were limited only at the shrimp plant area. Due to our effective safetymanagement system, we were able to evacuate our 2,100 workers safely. In regards to manufacturingand product delivery processes, the companyproperly informed our customers who understood and helped us. We relocated our manufacturing base to one of our subsidiary in Songkla Province, Thai Union Seafood Company Limited and were able to process some of our shrimp products within seven days. We have also leased some productionarea from K.L. Cold Storage Company Limited in Samutsakhon Province. Within two months, our shrimp production was returned. The incidentcaused a very small damage to the companybecause we have a fire insurance covering assets, products and business interruption. Therefore, we were compensated from all damages.


TUF places a great emphasis on safety managementsystem. We have a strict fire prevention and controlby supervision and using the Work Permit/Hot Work Permit system. This system is to controloperations which can create overheating and frictionsparks in working areas including the contractor’s working areas. We have assigned our specialistteams, such as security guards and fire watch men. We have set up an emergency team under


the Emergency Team Potential DevelopmentProgram. This consists of more than 100 people from every department’s representatives who have already passed the Fire Extinguisher Advanced Level Training Course including Fire Rescue from institutions accredited by the government. And we have regularly trained on monthly basis. We have also provided availability on emergency control equipments, such as Fire Suit NOMAX, SCBA and fire extinguishing system with more than two-hour fire-resistance. We have set a training/simulation with local institutes to build the fire-extinguishing network and appointed the safety committee for the company to test whether all safety systems have been complied with the safety standard.

With continuity on our safety system, the companycan quickly control the fire incident including our workers’ safety. Meanwhile, the company isdetermined to increase the company’s safety standard to meet the global standard through the following measures:

1. Increase stringent rules and regulations including controlling an external party working

in the company

2. Continue to set up a Firefighters’ Potential Development Program which all employees

must pass the training: • Fire Extinguishing Basic Training • Fire Technique • Fire Advanced • Fire Command • Fire Training • First Aid and CPR

Currently, our emergency rescue team is ready to control and suppress an incident if it happens.

3. Provide training on an emergency preventive plan and fire extinguishing annually with the government institution.

4. Provide the Fire Water System consisting of a 2,500 GPM of fire pump, the fire water in the drainage system covered all areas in the plants and the fire water reserve for more than 2,000 CM3.

5. Provide an automatic fire alarm system covered all areas and connected with the Fire Control

Panel.

ADMINISTRATIVE AND MANAGEMENT RISKS

Operational System

Our strategy of investment expansion has currently resulted in 28 subsidiaries and associated companieswith each being active in different business areas. Such diverse collection of business operations, while beneficial for the mitigation of risks arising from business fluctuations in any given industry, poses a risk associated with ensuring that all entitiesoperate under harmonized policies aim at generatingsatisfactory returns on investments.


TUF places great emphasis on businessadministration and operational management. We have developed comprehensive corporate policiesproviding strategic directions to our subsidiariesand 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 based at 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, ourInternal Audit Department ensures that the highest efficiency and transparency in the group’s overall operations are preserved and that full compliance with the Board’s policy is achieved.


FINANCIAL RISKS

Volatility of Foreign Exchange rates

In 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 Groupis generated from shipping products to overseas markets, such as the US, the EU, and Japan.Because of this, a majority of our revenues arerecognized in foreign currencies, mostly in U.S. dollar. Therefore, our revenue are subject to the risk of foreign exchange volatility.


We have maintained a close watch on movements of currency exchange rates as well as considered all appropriate measures in managing our exposureto exchange rate risks. Our revenue and expense streams have provided an effective natural hedge, as we import most of our raw materials and exportmost of our products, using US dollar as thetransactional currency. Other measures taken includethe utilization of forward contracts and currency options to minimize our exposure to currencyfluctuations, to allow efficient use of our financial resources and to continue closely monitor trends in financial markets and capital movements.

Interest Rate Risks

Globalization 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 to carefully implementa sound financial policy to address risks associatedwith shifting interest rates.


As 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 giveninterest rate situations and trends, with appropriate proportion of fixed and floating-rate loans. The debt structure can be also adjusted to match changing circumstances via various financial instruments,including Interest Rate Swap, Cross Currency Swap.

OTHER RELATED FACTORS FOR INVESTMENT CONSIDERATION

Lawsuits

TUF and the subsidiary companies are notinvolved in any lawsuits, so their assets with a higher 5% of shareholders will be impacted.


REPORT ON THE PRACTICE OF

GOOD CORPORATEGOVERNANCE

The Board of Directors of Thai Union Frozen ProductsPCL. perceives the importance of good corporate governance within the Company in order to promotesustainable operational growth and to gain publicacceptance of the Company both locally andinternationally. 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 ethics, confidence, trust and high level of working standards in accordance with the Code of Best Practices of listed company. This principle adoption is intended to enhance the Company’s competitiveness, which in turn will furtherboost the confidence in the Company’s operations among shareholders, investors and all stakeholders,thereby creating effective, prosperous and sustainablegrowth in the Company’s business, as well as addingvalue to shareholders while also taking into accountall 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 Shareholders 2. Equitable Treatment of Shareholders 3. Roles of Stakeholders 4. Information Disclosure and Transparency 5. Board of Directors’ Responsibilities

1. RIGHT OF SHAREHOLDERS

The Company follows good corporate governance principles and sets clear business policy perceivingequitable treatment of shareholders andstakeholders. This can be evident from the fact that the Board and the management cooperate their efforts to efficiently deliver work performance,

prudent and careful administration for the bestinterests of the Company and shareholders.Operations are transparent and can be verified. Information disclosure is made in the complete, accurate, punctual, and equitable manner to all parties concerned. The Company has appropriate controlling system and risk management adequate for 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, fairnessand timeliness in order to secure investor confidence.

The Company’s information disclosures toshareholders are made on the basis of equityregardless of share volume owned, individuals or juristic person and being local or overseas. In each shareholders’ meeting, the Company places emphasis on, and respects, the right of shareholdersby strictly carrying out the meeting pursuant to the Public Limited Companies Act. And also, the Company recognizes that the shareholders have the rights to decide, to obtain easily accessible,adequate, complete and timely information includingthe encouragement for the use and non-violation of the rights of shareholders as follows:

Shareholders’ Meeting

• Set the schedules of the Annual General Meeting of Shareholders (AGM) within 4 months of the

annual closing date of its accounting books. That is within 30 April of each year. For the urgent matters of shareholders’ interest or requiring shareholders’ approval, the Board will call the Extraordinary General Meeting

of Shareholders (EGM). For year 2012, the Company’s following arrangements for the

hosting of the Annual General Meeting of Shareholders (AGM) on March 26, 2012 and the

Extraordinary General Meeting of Shareholders (EGM) No.1/2012 on April 10, 2012.


Meeting Preparation Procedure and Delivery of Meeting Invitation

• The Board began to allow shareholders to propose name list of potential director candidates and meeting agenda for 2012 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 44 days prior

to the date of meeting invitation delivery in order to allocate appropriate time for their proposals.• The Company publicized meeting invitation along with sufficiently-detailed relevant documentation, objectives and reasons as well

as opinions of the Board given in each agenda and the proxy forms as stipulated by the Ministry

of Commerce on www.thaiuniongroup.com since February 28, 2012 and such information dissemination was available for 27 days prior to the date of AGM and March 21, 2012 for 20 days prior to the date of EGM.

• The Company authorized Thailand Securities 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 10 days prior to the date of AGM and 8 days prior to the date of EGM No.1/2012

• The Company publicized meeting invitation in 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

• The Company facilitated all shareholders including institution investors in a fair manner by arranging the officers to welcome and provide the sufficient information on document checking and registration. The Company was open for

AGM registration between 11:00 a.m. - 13:00 p.m. of March 26, 2012 at the well-known Thai Army Club, Viphavadi-Rangsit Road, Bangkok to

provide convenient access to shareholders. In the past year, there were totally 586 shareholders

in attendance with aggregate share volume of 652,001,574 units, equivalent to 68.18%

of the total issued and paid-up shares and EGM on April 10, 2012 at InterContinental Hotel, Ploenchit Road, Bangkok, there were totally 571 shareholders in attendance with aggregate share volume of 705,090,370 units, equivalent to 73.73% of the total issued and paid-up shares.

• Chairman of the Board chaired 2012 Annual General Meeting of Shareholders, in which there were 10 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, CFO, Independent Director 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.

Moreover, there were Finance controller, Corporate account manager, Legal advisor

and Independent auditors from Ernst & Young Co., Ltd. to attend the AGM and Chairman of the board chaired 1/2012 Extraordinary General

Meeting of Shareholders, in which there were 11 board members, including the Chairman,

in attendance out of the whole board of 15 members. The board members in attendance

comprised President, Managing Director, CFO, Independent Director and Audit Committee members, who are Independent directors including Finance controller, Corporate account manager, Finance advisor, Legal advisor and Independent auditors from Ernst & Young Co., Ltd.• Chairman of the meeting assigned the MC to

clearly explain vote-casting and vote-counting procedures for each agenda to eligible shareholders as well as the procedure of one

vote per one share according to the Company’s Articles of Association No.35. The Company’s

auditors from Ernst & Young and 2-volunteer from shareholders were the witness for the vote counting. 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. There were 8 shareholders who made queries and presented

opinions for AGM and 9 shareholders who did for EGM No.1/2012.

• In order to preserve voting transparency, the 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

whole board of candidates. Vote counts were 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 on

the Company’s website for further dissemination afterwards. Interested shareholders may request copy of the videotape from Stock Information

Department, Office of President.

Post-meeting Procedure

• The Company publicized the resolutions of all agenda considered in 2012 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 March 30, 2012, or 4 days following the date of AGM and April 23, 2012, or 13 days following the date of EGM No.1/2012

Hosting of shareholders’ meeting with greatemphasis on equitable voting right has earnedthe Company excellent performance in the 2012 annual evaluation of Annual General Meeting ofShareholders conducted by Thai InvestorsAssociation.

2. EQUITABLE TREATMENT OF SHAREHOLDERS

The Company perceives the importance of right of shareholders, is well aware of its responsibilityto ensure equitable treatment of shareholders and therefore have put the following initiatives intoaction.

• The Board assigned company secretary 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 2012 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

44 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 except the Extraordinary General Meeting of Shareholders No.1/2012. Due to there are shareholders

holding 377,914,509 shares or equivalent to 39.52% or not less than one-third of the total

issued and paid-up capital of the Company would like to propose to the Meeting to add the issue other than those outlined in the meeting invitation notice. This proposal is in accordance with section 105; clause 2 of the Public Limited Companies Act B.E. 2535 (and its subsequent

amendments). The additional of 4 commercial objectives of the Company from 47 to 51 objectives were proposed for the Company’s

benefits. • The Board facilitated shareholders who cannot attend the meeting by assigning any independent directors and proposed the name list of at

least 2 independent directors who were to act as proxies to vote in each meeting agenda on behalf of shareholders. In 2012 Annual General Meeting of Shareholders, there were 17 shareholders who authorized Mr. Sakdi Kiewkarnkha, Chairman of Audit Committee, to act as proxy and vote on his/her behalf, there were 1 shareholders who authorized Mr. Kiti Piluntanadilok, a member of Audit Committee,

All of them have been serving as independent directors and the Extraordinary General Meeting of Shareholders No. 1/2012, there were 23 shareholders who authorized Mr. Sakdi Kiewkarnkha, Chairman of Audit Committee, 3 shareholder who authorized Mr. Kiti Piluntanadilok, a member of Audit Committee,

2 shareholder who authorized Dr. Thamnoon Ananthothai and 1 shareholder who authorized

Mr. Kirati Assakul for the same purpose. All of them have been serving as independent directors.• The Board provided voting cards for the shareholders for each agenda separately so

that they can vote as appropriate. The voting cards are then collected and calculated together

with the votes cast before in the proxy form. The votes are then announced in the meeting room and filed the cards for inspection.

• The Board assigned company secretary to document and file the meeting resolutions

in a correct and complete manner and to


publicize the resolutions of all agenda considered in 2012 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.

• 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 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 of financial statements or any 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. However, this prohibition is exempted in the case of continued fluctuation

of securities 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.

• The Board assigns company secretary to oversee and follow up items with potential conflict of interests and connected transactions. 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 sensitive to

conflict of interests or vested interests. • The Board assigns company secretary to

maintain the filing of report of vested interests as disclosed to the Company by the Board and management members pursuant to the

Notification No. Tor.Jor.2/2552 of Capital Market Committee Governing Required Vested 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

conflict of interests from leading to possible 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 cansecure long-term business wealth, employment and financial stability. Therefore, the Company adheres to equitable treatment of all stakeholdersas well as ensures that effective administration of internal controls and compliance controls areestablished and maintained, as summarized below;

Shareholder:The Company is determined to represent allshareholders efficiently through generating maximumlong-term returns on investment with regular and sustainable strong operational performance and continued growth while simultaneously payingattention to accurate, complete and punctualdisclosure of material information to all shareholdersin response to their unwavering trust and support given to the Company and provide the investment returns that satisfy the shareholders the most.


Employee:The Company treats employees equitably and fairly with no discrimination against national origin,religion, gender, marital status, language, or workforceranks, not associating with forced labor, child labor, and human trafficking, and not supporting bribery and corruption. The Company sets the appropriate compensation comparable to compensation paid in the same industry. Provision of fringe benefits to employees not only complies with but alsoexceeds relevant standard mandatory requirements.Among those benefits available to employees are provident fund, annual health check-up and adoption of Kaizen principle, 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 employeeswill not do before, but they will try to practicesuccessfully. Besides, much emphasis is also placed on long-term personnel development, amplelearning and self-development opportunity forcareer advancement and improved life quality. In order to put these implementations in actions, the Company introduces organization-wide professionalhuman resources management systems tomaximize personnel potentiality and capabilitythroughout the entire business group. Employeesof all levels are encouraged to acquire new knowledgeand skills through company-subsidized scholarship program along with seminar/training attendanceat leading educational institutions. The Companyprovides employee manual, which equips employeeswith necessary information on corporate policy and entitled fringe benefits. 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 commongoals. Therefore, the Company is committed to promoting greater professional capability among employees in parallel with continued improvements in their quality of life. Concerning learning anddevelopment paths made available to employees, appropriate practical learning programs are developedand applied to employees from their first dayof employment within the Company until theirretirement. In this regard, the Company has providedcontinued support to facilitate their greater learningexperiences through time allocation, financialcontribution and career progression as detailed below:

Human Capital Development:The Company’s human capital development isintended to encourage employees to performrespective functions at their optimum efficiency. In order to achieve this goal, the Company develops,and capitalizes on, tailored individual developmentplan on a continued basis. The individualdevelopment plan is implemented in conjunction withsystematic follow-up and performance evaluation conducted to personnel training and development programs. Employees of all levels throughout the business gain benefits from organization-wide adoption of knowledge-based approach. In addition,the availability of Human Resource InformationSystem (HRIS) within the Company not onlyenhances efficiency and accuracy of HR datamanagement 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 levelsof employees, the Company has been makingregular investment in the area of organizationaldevelopment since 2004 with the intention offurther strengthening organizational performance. In this regard, the Company has hired qualifiedadvisors and experts in different disciplines to work in advisory capacity on the organizational andhuman capital development initiatives. Thoseprofessional 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 personnelmanagement system (PMS), which centers on competency development. Such competency is composed of 3 major elements; Core Competency,Management Competency and FunctionalCompetency. Moreover, as the Company foresees the importance of specific functional, management and soft skills development among each position level as one of job enhancement factors, otherpersonnel development efforts have also been made. These efforts encompass a wide range of personnel development aspects; for example,prerequisite knowledge for industrial establishmentpersonnel, development of specific functional skills, development of management and soft skills, Leadership Program, Coaching Program,cross-functional rotation system, inter-departmentalpersonnel realignment system, trial functionperformance in superior position, Star Program and the most recent program “TUF Management Associate Program” has been introduced to provide


opportunities for young talents from within andoutside the organization to experience working in our overseas operations.

Moreover, the Company stresses the importance of communicating information concerning itsbusiness to all employees, such as CEO meets employees every 6 months for announcement the annual targets, the results including as the spirit andmorale in the operating in the event of circumstances,such as when the shrimp factory fire in the early of year 2012.

Customer:The Company builds customer satisfaction and isresponsible for customers through offering developinghigh-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 much attention to customer confide entiality. The Company also sets aside special unit or appoints persons in charge of handling customer complaints and responding to those complaints without delay. In February 2012, our shrimp production plant in Samutsakhon Province faced a fire outbreak. Due to our effective safety management system, the Company were able to evacuate our workers safely. In regards to manufacturing and productdelivery processes, the Company properlyinformed our customers who understood and helped us and relocated our manufacturing base to one of our subsidiary and also leased someproduction area from other plant. Within two months,our shrimp production was returned to normal.

Business Partner: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 commercial confidentiality.

Creditor:The Company honestly and strictly adheres to loan agreement commitments given to respectivecreditors and financial institutions so as to ensure the availability of proper and fair returns on their loan investments. Furthermore, the Company takes best efforts to minimize its exposure to potential conflict of interests with creditors and not omitting information or facts that may damage creditors. If the Company cannot respect the conditions of the contracts, it must notify its creditors in advance to jointly solve the problems.

Competitor:The Company competes with competitor under fair commercial competition, with business ethicsand in compliance with applicable legislation. The Company does not seek information that is itscompetitors’ trade secret by dishonest means, thereby having no trading disputes with anycompetitor.

Corporate Social Responsibility:The Company perceives the corporate responsibilityfor the environment in the society and community and for natural resources conservation. In turning its nature-care spirit into actions, extensive corporatesupport 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, “Sealect See Love” volunteering camp recently launched to promote employees’ participation in community andsocial works, 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, and “Blood Donation” organized forsix consecutive years with over 3,000 units ofaccumulated blood donated to Thai Red Cross Society Other company-sponsored CSR initiatives in actions through the entire 2012 are furtherdescribed under Sustainable Development headingon page 55 - 63 of this annual report.

Respect of Copyrights and IntellectualProperty RightsThe Company respects copyrights and intellectual property rights of others by forbidding the employeesto use illegal programs or software and strictly comply with the Copyright Act B.E.1994

Whistle-Blowing and ComplaintsThe Company provided the channel forwhistle-blowing or complaint-making thatstakeholders are or may be affected by thedamage caused by the Company’s operation, or the employees are involved in unlawful, dishonest acts or corruption by directly submitting the case or via post to;

Chairman of the Audit Committee,or General Manager, Audit UnitThai Union Frozen Products Public Company Limited23rd floor, S.M.Tower, Samsennai,Phyathai, Bangkok 10400Telephone 02 298-0024 ext 695-6Facsimile 02 298-0024 ext 697


4. INFORMATION DISCLOSURE AND TRANSPARENCY

The Board devises policy on correct, complete and punctual disclosure of material financial and non-financial information through dissemination channels of the Stock Exchange of Thailand and investor relations section on corporate website in both English and Thai languages so as to provideequitable and credible access opportunity for shareholders, institution investors and any persons interested in obtaining such information.

The Board stands behind the Company and its subsidiaries’ consolidated financial statements and financial information presented in the Company’s annual report. The said financial statements are prepared in accordance with generally accepted accounting standards by applying appropriateaccounting policy on a regular and carefullyconsidered basis. Material information is sufficientlydisclosed in the notes to the financial statements.

The Board has provided report indicating itsresponsibilities to prepare financial statements. Such report is exhibited alongside the auditor’sreport in the Company’s annual report to ensure true and fair presentation of the financial statementsregularly following the generally accepted accountingstandards and accounting policy.

The Board opinions that there is effectiveadministration of internal controls in the Company and that the reasonable fairness is assured for the financial statements for period ending December 31, 2012, for which the Company’s auditors have conducted the audits on a generally acceptedauditing standards.

Remuneration for Directors and Management

• Directors are remunerated in the form of 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.

• Executive directors are remunerated in the 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 management team is remunerated in

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.

• Aside from the preceding monetary remuneration, 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 averageamount paid by other listed companies in the Stock Exchange of Thailand due to the Company’sattention to the best interests of shareholders. The remuneration paid to the Board and management members in the year 2012 in comparison with its counterparts in the year 2011 is set forth below:

Number (Person)Retainer/Meeting AllowanceSalary/Annual BonusProvident Fund Matching Contribution

Total

Board ofDirectors

Board ofDirectors

2012Unit : Million baht

2011Management

TeamManagement

Team

155.84

- -

5.84

155.55

- -

5.55

10-

66.31 4.19

70.50

12-

72.83 3.58

76.41


The Board perceives the importance of correct, complete and transparent information disclosure to all shareholders, investors and all parties concerned on equitable treatment basis. Information on operations and financial status is communicated 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. Moreover, the InvestorRelations Unit is officially set up, 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 Head of Investor Relations & Corporate Investment3. Ms. Suthipa Vacharotayangul Investor Relations Manager

The past continued communications of operational performance, financial and non-financial informationto stock analysts, investors and shareholders during2012 were as follows:

• Approximately 92 company visits by investors and stock analysts

• 3 analysts meetings following the announcement of operating results• 2 plant visits by stock analysts• 2 plant visits by minor shareholders• 19 overseas investor conferences• 4 times of Opportunity Day by SET

In addition, the Company provides the public with written information dissemination through corporatewebsite http://www.thaiuniongroup.com and printedmedia as follows:

• Investor note, a press release giving information on operational results issued to investors and

stock analysts on a quarterly basis• TUF E-Newsletter, a bimonthly corporate

newsletter delivered to shareholders and investors to regularly report new information

and updates on the Company’s operations• Annual report for shareholders, investors and

other interested general public• Report or notification of any corporate changes in need of public disclosure pursuant to the

Notifications of the Securities and Stock Exchange Commission and the Stock Exchange of Thailand Due to continued strong adherence to transparentinformation disclosure, Securities AnalystsAssociation grants to the Company its annual

SAA’s Picked Award for being the most-admired listed company’s top executive. The Company wins totally 2 awards in Agro & Food category; The Most-admired CEO Award, The Most-admired IR Award, The grant of the awards is based on favorablevotes cast by stock analysts and fund managerswho identify the Company’s regular provision of complete and accurate in-depth information,including facilitating convenient availability andaccessibility 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 efficiencyand to preserve the best interests of the Company.The Board follows up and ensures that themanagement’s work performance is in line with the work plans. The Board also clearly defines roles, duties and responsibilities of the Board members, the management, staff and other parties concerned.The Board assigns the Audit Committee to overseethe Internal Audit Department, to evaluate thedepartment’s work performance, to ensure anadequacy of internal controls and to promoteappropriate 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, the directorsof the Company have attended the training coursesorganized by the Thai Institute of DirectorsAssociation (IOD) and others as follows;


Although some members of the Board andthe management team are shareholders, themanagement policy is based mainly on the best interests of the Company, particularly decision on issues sensitive to conflict of interests or vestedinterests. Those members are not eligible for votingfor issues that may cause conflict of interests in orderto preserve independence in decision making.Furthermore, the information regarding suchconsideration is immediately disclosed to the publicfor 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

10/2001

47/2004

10/2002

13/2001

2/2006

70/2006

27/2003

86/2010

84/2010

33/2005

36/2005

48/2005

15/2007

4/2001

14/2006

9/2009

5/2007

10/2005 7/2007

2/2012

4/2008

2/2009

1/2009

12/2011

DCPNames DAP RCP RCC ACP UFSHRP andHCI

TLCA LeaderProgram

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. Takehiko Kakiuchi

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

DCP : Director Certification ProgramDAP : Director Accreditation ProgramRCP : The Role of Chairman ProgramRCC : The Role of Compensation CommitteeACP : Audit Committee Program

UFS : Understanding the Fundamental of Financial StatementHRP : How to Develop a Risk Management Plan HCI : Handling Conflicts of Interest TLCA : TLCA Executive Development Program Leader Program : Capital Market Academy

their awareness, understanding and compliance. The Company believes that such practice wouldimprove the standards of good corporategovernance and promote investor confidence in 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 directorsfrom business partners (in support of business strategies), 1 director from Bondholders and 5independent directors (3 of which also serve asAudit Committee members). Such proportion of the Board members allows effective considerations for the best interests of the Company. For the year 2012, there were totally 5 independent directors to be at one-third of the total number of Board membersor the proportion accounts for 33.33%.


Definition and Qualifications of Independent Director

An independent director is a qualified andindependent person of the same qualificationcriteria described in the Notification GoverningQualifications and Responsibilities of AuditCommittee established by the Stock Exchange of Thailand. In addition, a person qualified to serve as independent director must be able to perform dutiesto preserve the best interests of all shareholders in equitable manner without conflict of interests and be available in Board meetings to give independentand 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 a juristic person who may have conflict of 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.

The afore-mentioned definition of independentdirector 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 Commissionin term of stock holding ratio.

Although the title Chairman of the Board andManaging Director are not combined into oneposition, both represent the same group of major shareholders. However, consideration of importantmatters 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 quarterlybasis following clearly defined and scheduled agendas mutually agreed and decided by Chairmanand President. Follow-up agenda is regularlyincluded in the meeting. Company secretary sends meeting agendas and meeting invitation to the Board members not less than 10 days in advance to allocate appropriate time for data analysis.The agendas and meeting invitation may be sent to the Board members less than 10 days inadvance in the case of urgency or preservation of theCompany’s interests. Each meeting session lasts about 2 hours. There were totally 6 ordinary meetingsessions during the year 2012, with each director’s attendance summarized below:

5/63/66/66/66/61/61/6

1/63/6---

5/65/6

Times of Attendance/Total Sessions Held

Board Meeting (Times)

Prior Notice viaElectronics Media

Directors

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. Takehiko Kakiuchi

Unit: Time


Subcommittee

The Board has appointed committees to assist in governing the Company. (1) Audit Committee The Audit Committee has 3 years of tenure and is composed of 3 independent directors professionally

competent in financial and 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:

1. Mr. Sakdi Kiewkarnkha Chairman of Audit Committee 2. Pol.Maj.Gen. Pracha Anucrokdilok Audit Committee 3. Mr. Kiti Pilunthanadiloke Audit Committee

The Audit Committee met regularly in 21 meeting sessions during the year 2012 to implement assigned tasks and report performance results directly to the Board. The details of those implemented tasks aredescribed under “Report of Audit Committee” heading on page 102 of this annual report.

(2) Nomination and Remuneration Committee The Nomination and Remuneration Committee includes a Chairman and two other members. Majority members must be independent directors possessing qualifications required by the Securities and Exchange Commission and the Stock Exchange of Thailand, and must have the appropriate level and

scope of experience and expertise. TUF Nomination and Remuneration Committee composition is as set forth below:

1. Dr. Thamnoon Ananthothai Chairman of Nomination and Remuneration Committee 2. Mr. Sakdi Kiewkarnkha Member of Nomination and Remuneration Committee 3. Mr. Chan Tin King Member of Nomination and Remuneration Committee

6/66/66/66/66/65/64/66/6

-----

1/62/6-

Times of Attendance/Total Sessions Held

Board Meeting (Times)

Prior Notice viaElectronics Media

Directors

8. Mr. Ravinder Singh Grewal Sarbjit S 9. Mr. Chan Tin King10. Mr. Chan Shue Chung11. Mr. Sakdi Kiewkarnkha*12. Pol.Maj.Gen. Pracha Anucrokdilok*13. Mr. Kiti Pilunthanadiloke*14. Dr. Thamnoon Ananthothai*15. Mr. Kirati Assakul*

Unit: Time

* Independent Director

Remarks:1. Mr. Yasuo Goto and Mr. Takehiko Kakiuchi are directors, who reside outside the Kingdom of Thailand.2. The company secretary is assigned to oversee and facilitate the Board meeting including documenting the meeting resolutions

and filing in a complete, correct and verifiable manner.

(3) Risk Management Committee The Risk management Committee includes a Chairman and four other members. Majority members

must be independent directors possessing qualifications required by the 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:

1. Dr. Thamnoon Ananthothai Chairman of Risk Management Committee 2. Mr. Sakdi Kiewkarnkha Member of Risk Management Committee 3. Pol.Maj.Gen Pracha Anucrokdilok Member of Risk Management Committee 4. Mr. Thiraphong Chansiri Member of Risk Management Committee 5. Mr. Chan Tin King Member of Risk Management Committee

Controlling System, Internal Audit and RiskManagement

Controlling System and Internal Audit: The Companyhas its own Internal Audit Unit to regularly oversee internal controls system, to inspect significant items and to ensure the effectiveness of controlling systemfor greater credibility of financial statements. A committee has also been set up to be in charge of reviewing the efficiency of the internal controls, in which operations, compliance controls, riskmanagement and extraordinary items areincorporated. The past internal audit reportsindicated that the Company’s operations have been in line with the planned systems, possessed efficient internal controls, risk assessment, risk management and prevention measures, compliancecontrol and shown no significant non-compliance in its operations.

Risk Management: The Risk Management Committeeassigns the management team to regularly identify internal and external risk factors as well as to conductassessment of their impacts on the Company’s business. Risk management team is diversely composed of management members and topexecutives who are directly responsible for the work areas where risk factors are identified. The risk management team analyzes target risk factorsin order to determine root causes and createcountermeasures. The countermeasures are turnedinto practical guidance to either prevent or minimizepotential impacts of those risks. In addition, the risk management team also follows up and ensures that taken corrective and preventive actions are in line with its directed countermeasures and reports the performance of countermeasure implementationto Audit Committee for subsequent address in Board meeting.

Conflict of Interests and Use of Internal Information

The Board determines handling procedures and monitoring measures against potential conflict of 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 bestinterests of the Company. Those items with natureof potential conflict of interests and connected transactions are treated in the same manner as transactions made to outsiders. Quarterly summary 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 managementmembers report to the Company their vested interestsin the Company’s and its subsidiaries’ operations and management, or those of their connectedpersons. This requirement is aimed to furnishnecessary information to the Company and to enablethe Company to comply with its own connectedtransaction handling procedures, which areestablished to prevent such items with potential conflict of interests from possible siphoning ofcorporate 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 managementmembers by communicating their mandatoryduties to report any changes made to the securitiesownership 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, transferor receipt of such securities. The Board ormanagement members or sections with access to, or acknowledgement of, internal information are not allowed to leak the information to the outsidersor other unauthorized persons. In addition, nosecurities trading by those management is allowed within the period of one month prior to the disclosureof financial statements or any other materialinformation 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, whosequalifications are deemed appropriate and qualifiedpursuant to the Public Companies Limited Act. Such appointment can be made only in the event thatdirectorship either expires by normal office term or prematurely falls vacant in consequence of whatevercauses during the office term. A substitute directorappointed to fill interim vacancy shall be in the office only for the remaining tenure. One third of directors shall retire and new directors shall be elected in anannual 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

maximum votes is first entitled to directorship 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.

APPOINTMENT OFDIRECTORS

Shareholders, if necessary, may pass resolutions toremove any director prior to statutory expiration of office term provided (a) three fourth of majorityvotes 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 case shall be effective only when the qualifications 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 Governingthe Rules, Conditions and Procedures for theSecurities Offer and Permission dated May 18, 1992.

Board of Directors shall appoint any person deemed professionally recognized and qualified to act asindependent 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 minorityshareholders. Board of Directors shall consider and vote to appoint qualified candidate and seek further approval during meeting of shareholders.


Authority of Board of Directors

Board of Directors is authorized to manage the company in conformity with objectives, regulations and 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 policy effectively and efficiently.

Legal binding of the company requires a countersignof two directors in minimum and the seal of the company affixed. Alternatively, Board of Directors may authorize certain directors to deal with such legal binding.

Board members are required to disclose any materialinterest in transactions or contracts which thecompany enters into and increase/decrease in share/debenture ownership in the company or its subsidiaries during any fiscal year. Board of Directorsis authorized to implement and direct the company’sactivities except for the following issues, whichrequire 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.(5) Approve credit facility requests made to financial 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.

AUTHORITY OF BOARDOF DIRECTORSAND AUDIT COMMITTEE


(1) Financial Policy • Annual budget; • Investment in other companies; • Loan application; • Property lease agreement;

(2) Business and Marketing Policy • Business and Marketing Policy;

(3) Management Policy • Organizational restructuring; • Management realignment; • Changes in work regulations or fringe benefits;

(4) Employee Policy • Salary/bonus increment; • Recruitment, performance evaluation, punishment or resignation of the management;

(5) Budgeted Purchase of Fixed Assets • Budgeted Purchase of Fixed Assets;

(6) Unbudgeted Purchase of Fixed Assets • Unbudgeted Purchase of Fixed Assets;

approved by Board of Directorsapproved by Board of Directorsapproved by Executive Directorsapproved by President

approved by Managing Director

approved by Executive Directorsapproved by Managing Directorapproved by Managing Director

approved by Executive Directorsapproved by Managing Director

approved by Managing Director

approved by Board of Directors

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 for transactions having their conflicts of interest, vest interest, or any other forms of conflicts of interest (according to the company’s articles of association and pursuant to the Notifications of the Office of the Stock Exchange Commission and the Stock Exchange of Thailand) with the company or its subsidiaries except that the said approval isgiven 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 necessaryor appropriate.

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


Authority of Audit Committee

The company requires that Audit Committee consistin minimum of 3 independent members with assignedduties in accordance with those stipulated in the Office of the Stock Exchange Commission’s and the Stock Exchange of Thailand’s regulations. AuditCommittee is sufficiently equipped with solid knowledge and competent experience to review the fairness of the Company’s financial statements, including 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 potential conflicts of interest; (f) ensure full

compliance with applicable requirements, laws and regulations; and (g) give opinions and assess

an adequacy of internal controls and report to 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’ meeting with clearly defined scope, authority 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 or conflicts of interest in other forms with the company or its subsidiaries.

(2) Review significant information in financial 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. independent auditor, the Office of the Stock Exchange

Commission, the Stock Exchange of Thailand, for opinions on the company’s internal controls and review of relevant regulations.


1. CHANSIRI FAMILY 2. MITSUBISHI CORPORATION 3. NIRUTTINANON FAMILY 4. THAI NVDR CO., LTD. 5. SOCIAL SECURITY OFFICE 6. STATE STREET BANK EUROPE LIMITED 7. THE BANK OF NEW YORK MELLON-CGT TAXABLE 8. BOONMECHOTE FAMILY 9. STATE STREET BANK AND TRUST COMPANY10. HAGOROMO FOODS CORPORATION

Juristic PersonsThaiForeignTotal

Private IndividualsThaiForeignTotal

Grand Total

18.7033.5552.25

43.194.56

47.75

100.00

33.8433.6367.47

32.210.32

32.53

100.00

278,375,12486,936,28085,907,31746,879,91334,043,06232,283,98531,531,20029,893,74519,897,15719,278,000

24.627.587.494.092.972.812.752.601.731.68

Remark: On the closing date of register book (January 3, 2013) and based on total number of shares of 1,147,593,829 at the par value of Bt1 with regard to Thai NVDR Co., Ltd., as shareholders will not be eligible for exercising their right to vote in shareholder meeting 4.09% of total votes will be excluded.

Shareholder

Types

Shareholding Structure as of January 3, 2013

Shares

% HoldingJanuary 3, 2013 2011

%

SHAREHOLDING STRUCTUREAND MANAGEMENT


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. Takehiko Kakiuchi 8. Mr. Chan Tin King 9. Mr. Chan Shue Chung10. Mr. Ravinder Singh Grewal Sarbjit S11. Mr. Sakdi Kiewkarnkha12. Pol.Maj.Gen. Pracha Anucrokdilok13. Mr. Kiti Pilunthanadiloke14. Dr. Thamnoon Ananthothai15. Mr. Kirati Assakul

Total

117,783,68070,595,9349,967,000

114,711,94315,860,745

--

7,463,3313,273,818

--

7,572--

13,312

339,677,335

122,282,01660,716,6059,400,000

82,422,78213,100,000

--

18,553,3272,878,182

--

6,310--

21,000

309,380,222

Board of Directors

Change in Shareholdings of The Board of Directoras of January 3, 2013 and 2011

As of January 3, 2013* As of December 31, 2011 *

Remark: Shareholders of TUF that included spouse and children


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. Takehiko Kakiuchi 8. Mr. Chan Tin King 9. Mr. Chan Shue Chung10. Mr. Ravinder Singh Grewal Sarbjit S11. Mr. Sakdi Kiewkarnkha12. Pol.Maj.Gen. Pracha Anucrokdilok13. Mr. Kiti Pilunthanadiloke14. Dr. Thamnoon Ananthothai15. Mr. Kirati Assakul

360,000180,000180,000180,000180,000180,000180,000180,000180,000180,000240,000240,000240,000240,000240,000

100,00045,00090,00090,00090,00015,00015,00090,00090,00090,00090,00090,00075,00060,00090,000

540,000240,000240,000

30,000

60,000

140,00090,000

200,000

10 members of the management team 70.50 Million Baht

Board of Directors

Remuneration 2012 (Baht) Salary & Bonus and Provident Fund

Remuneration 2012 (Baht)

Retainer Meetingallowance

AuditCommittee

Fees

SubCommittee

Fees

Other Forms of Remuneration: None

REMUNERATION FORDIRECTORS ANDMANAGEMENT


1. Thai Union Feedmill Co., Ltd.

2. Thai Union Seafood Co., Ltd.


Mr. Prasert Boonmechote

(Mr. Rittirong’s father)

Mr. Wattana Boonmechote

(Mr. Rittirong’s brother)

Ms. Rungtiwa Boonmechote

(Mr. Rittirong’s sister)








Director

Relative of

Director

Relative of

Director

Relative of

Director

Director

Relative of

Director

Relative of

Director

Relative of

Director

Connected Company First & Last Name Position Heldin TUF

No. of Shares Ownedin Connected Company

5,974,975

2,500,000

1,750,000

1,750,000

11.9%

5.0%

3.5%

3.5%

3,974,850

3,000,000

900,000

900,000

13.2%

10.0%

3.0%

3.0%

CONNECTED TRANSACTIONS OF LISTED COMPANY


Market Price

Market Price

Commercial Transactions:

• Purchase of raw materials from TUF at the total amount of Bt19,578,550.

• Purchase of raw materials from TUS at the total amount of Bt14,220,938.

• Purchase of finished goods from THD at the total amount of Bt305,451.

Supporting Commercial Transactions:

• Payment for marketing service and lab service charge to TUF

at the total amount of Bt780,000.



• Purchase of raw materials from TCM at the total amount of Bt28,884,613.

• Purchase of packages from TUG at the total amount of Bt651,300.

• Sale of finished goods to COSF at the total amount of Bt2,361,252,882.

• Sale of raw materials and finished goods to TUF at the total amount of Bt560,916,171.

• Sale of finished goods to PPC at the total amount of Bt17,194,321.

• Sale of raw materials to TFM at the total amount of Bt14,220,938.

• Sale of raw materials to SC at the total amount of Bt131,600.

• Sale of raw materials to TUH at the total amount of Bt85,800.


• Payment for marketing service charge to TUF at the total amount of Bt11,082,197.

• Payment for marketing service charge to TUM at the total amount of Bt6,348,000.

• Payment for claim and transportation charge to TUF at the total amount of Bt5,603,169.

• Payment for transportation charge to COSF at the total amount of Bt5,107,723.

• Receive the penalty charge due to delay payment from COSF at the total amount

of Bt18,366.

CONNECTED TRANSACTIONS OF LISTED COMPANY

Policy of Price Connected Transactions for year 2012

The company has transactions with individuals / parties who might have conflict of interests based on the shareholding structure of the company, or as a result of the materiality and significance of such transactions.Nevertheless, those transactions do not cause any conflict of interests with the minority shareholders of the company.

With regards to business transactions with the parties that might have conflict of interests, the company has provided the details of such transactions in the Note (Item 9) for reference.

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


4. Chansiri Real Estate Co., Ltd.

6. Jana Industry Co., Ltd.

7. TC Union Agrotech Co., Ltd.

5. Thai Union Securities Co., Ltd.

Mr. Thiraphong Chansiri

Mr. Dejphon Chansiri

(Mr. Kraisorn’s son)

Mr. Disaphol Chansiri


Mr. Kraisorn Chansiri

Ms. Bussakorn Chansiri

(Mr. Kraisorn’s wife)

Mr. Chuan Tangchansiri






Director

Relative of

Director

Relative of

Director

Director

Relative of

Director

Director

Director

Director

Director

Director

Director



19,680,000

15,260,000

15,260,000

7,800,000

2,000,000

-

50,000

496,000

2,200

2,000

1,000

32.8%

25.4%

25.4%

13.0%

3.4%

-

25.0%

49.6%

22.0%

20.0%

10.0%

3. Lucky Union Foods Co., Ltd. Mr.Cheng Niruttinanon Director 102,000 11.3%


Compare to

neighbor areas

Market Price

Market Price

Short-term Rent of Immovable Property Transactions:

TUF, TUM and SC paid the rent and service charge for its Bangkok office in at the total

amount of Bt21,459,313. With their needs to run Bangkok office 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.


• Purchase of raw materials from SC at the total amount of Bt108,970,090.



• Purchase of raw materials from TUM at the total amount of Bt290,838,645.



• Purchase of sticker printing from TUG at the total amount of Bt10,319.


• Sale of raw materials to TUM at the total amount of Bt433,630.

Asset or Service Transactions:

• Payment for Sola oil and moving fish cooking tank charge to TUF at the total amount

of Bt369,404.

Commercial Transactions: -None-


Market Price Commercial Transactions:


• Purchase of printing package from TUG at the total amount of Bt311,986.


• Sale of raw materials to TUM at the total amount of Bt8,867,111.

• Sale of finished goods to SC at the total amount of Bt1,491,200.

• Sale of finished goods to TUF at the total amount of Bt184,350.

Supporting Commercial Transactions: -None-


9. Ekawat Products Co., Ltd.

12. Geminai & Associate Co., Ltd.

13. Waithai Co., Ltd.

10. Pae Rungtiwa (Natural Person)

11. Pae Parichart (Natural Person)










Mr. Kraisorn Chansii





Ms. Parichart Boonmechote


Relative of

Director

Relative of

Director

Relative of

Director

Relative of

Director

Director

Director

Director

Director

Relative of

Director

Relative of

Director



100,000

137,500

50,000

459,870

100,000

59,200

20,000

20,000

Owner 100.0%

Owner 100.0%

20.0%

27.5%

10.0%

92.0%

31.3%

18.5%

6.3%

6.3%

8. Lucky Surimi Products Co., Ltd. Mr. Cheng Niruttinanon Director 1 0.0%


Market Price

Market Price

Market Price

Market Price

Market Price


• Sale of raw materials to TUF at the total amount of Bt2,441,231,412.

• Sale of raw materials to TUS at the total amount of Bt521,486,900.



• Purchase of brochure printing from TUG at the total amount of Bt51,978.


• Receive for cold storage construction (add from 2011) from TUF at the total amount

of Bt313,233.


• Receive for Haulage charge from TUM at the total amount of Bt36,741,002.

• Receive for Haulage charge from TUF at the total amount of Bt6,661,455.

• Receive for Haulage charge from APC at the total amount of Bt4,837,500.

• Receive for Haulage charge from SC at the total amount of Bt97,608.

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

per year not exceeding Bt100 million.


• Purchase of finished goods from TUF at the total amount of Bt60,875.

• Sale of raw materials to TUF at the total amount of Bt24,060,374.


• Purchase of finished goods from TUF at the total amount of Bt981.

• Sale of raw materials to TUF at the total amount of Bt336,775,232.


Compare to

neighbor areas

Short-term of Immovable Property Transaction:

TUF paid the rent, service charge and utility charge at the total amount of Bt6,111,210

for office and plant area including machinery, equipment and contracted 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, at Bt549,070 per month (the said amount is only for the rent and

service charge, excluding expenses on utilities.) and utilities service charge at the total

amount of Bt22,415,611. The contract will expire in December 2014.


15. Thaipatana

Stainless Steel Co., Ltd.

16. Yueh Chyang

Canned Food Co., Ltd.

17. Biz Dimension Co., Ltd.





Mr. Chan Tin King


Director

Director

Director

Director

Director

Director



20,000

5,000

120,181USD*

2,850,000

749,997

49,995

40.0%

10.0%

6.2%

9.5%

2.5%

0.2%

14. Ahead Way International

Co., Ltd.

Mr. Cheng Niruttinanon Director 6,998 70.0%


Market Price

Market Price

Market Price


• Sale of equipments to TUM at the total amount of Bt77,271,012.

• Receive for repair charge from TUM at the total amount of Bt25,523,818.

• Sale of equipments to TUF at the total amount of Bt22,594,498.

• Sale of equipments to SC at the total amount of Bt3,586,952.

• Receive for repair charge from TUF at the total amount of Bt2,038,380.

• Receive for service charge from APC at the total amount of Bt1,762,400.

• Receive for repair charge from SC at the total amount of Bt102,300.

• Payment for the penalty charge due to delay delivery to SC

at the total amount of Bt2,776.

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

per year not exceeding Bt150 million.


• Purchase of raw materials from TUM at the total amount of Bt40,600,369.


• Purchase of finished goods from COSF at the total amount of Bt1,868,216.

• Purchase of finished goods from COSI at the total amount of Bt194,669.

• Sale of finished goods to COSI at the total amount of Bt813,658,566.

• Sale of finished goods to TUM at the total amount of Bt495,019,976.

• Sale of finished goods to COSF at the total amount of Bt308,943,241.

Supporting commercial transactions consist of:

• Receive the consultant charge for Vietnamese market from TUF at the total amount

of Bt709,004.


• Receive for professional service charge for “Fisho.com” web content update and

web-based activities from THD at the total amount of Bt879,076.

• Receive for professional service charge for e-Procurement and e-Auction consulting

service from TUF at the total amount of Bt490,000.

• Receive for professional service charge for e-Procurement and e-Auction consulting

service from TUM at the total amount of Bt220,000.



• Purchase of finished goods from JIF at the total amount of Bt454,285,128.


• Sale of finished goods to COSI at the total amount of Bt124,586,349.


19. TN Fine Chemicals Co., Ltd.

20. Thai Union Properties Co., Ltd.

21. Geminai Water Craft Co., Ltd.

Mr.Thiraphong Chansiri


Ms. Bussakorn Chansiri

(Mr. Kraisorn’s wife)




Mr. Disaphol Chansiri





Director

Director

Relative of

Director

Director

Relative of

Director

Relative of

Director

Director

Relative of

Director



1

16,300

7,700

2,400

1,800

1,800

-0-

400,000

0.0%

54.3%

25.7%

8.0%

6.0%

6.0%

-

80.0%

Remarks:

• Commercial transaction refers to purchase or sale of raw materials in the normal course of business and under general trading conditions under the Board of Directors’ Meeting No. 5/2008 resolution passed on August 20, 2008.

• For item 4, 8, 13 and 17-20 Mr. Kraisorn Chansiri, Mr. Cheng Niruttinanon, Mr. Chuan Tangchansiri, Mr. Thiraphong Chansiri and Mr. Chan Tin King are TUF directors with share ownership in the connected company less than 10% of its registered capital but also hold director titles in the said connected company.

• For items 16, Yueh Chyang Canned Food Co., Ltd. located in Vietnam with investment value that no number of shares.

18. Pakfood PCL. Mr. Thiraphong Chansiri


Dr. Thamnoon Ananthothai

Director

Director

Independent

Director

-

-

-

-

-

-


Market Price

Compare to

neighbor areas

Market Price


• Purchase of finished goods from TUF at the total amount of Bt7,747,210.

• Purchase of finished goods from TUM at the total amount of Bt518,730.


• Payment for utilities service charge to TUM at the total amount of Bt19,804,592.

• Payment for lab service charge to TUF at the total amount of Bt77,750.




• Purchase of brochure printing from TUG at the total amount of Bt11,620.


In addition, the Company and subsidiaries have entered into property insurance policy, withAsia-Pacific Risk Consultants (Thailand) Co., Ltd. and Asia-Pacific insurance Brokers Co., Ltd. asinsurer. The transaction is connected, as Mr. Chuan Tangchansiri, TUF Director, also has director


• Purchase of finished goods from TUS at the total amount of Bt17,194,321.

• Purchase of finished goods from TUF at the total amount of Bt6,201,623.

• Purchase of finished goods from APC at the total amount of Bt3,379,950.

• Sale of finished goods to TUF at the total amount of Bt177,954,890.


• Payment for claim to TUF at the total amount of Bt6,810.

title in the insurer., TUF and subsidiaries paidapproximately Bt83.13 million Asia-Pacific Risk Consultants (Thailand) Co., Ltd. and Asia-Pacific insurance Brokers Co., Ltd.. The insurer is entitled to commission only partially from total amount of the paid premium.


REPORT OFAUDIT COMMITTEES

To Our Directors and Shareholders,

TUF Audit Committee is composed of 3 independent directors who are professionally competent in finance, accounting, organizational management, law, internal controls and risk management. All Audit Committee members meet qualification criteria stipulated by the Office of the Stock Exchange Commission’s and the Stock Exchange of Thailand’s regulations. They neither hold any managerial position, nor perform employeeor consulting roles for the Company. The list of TUF Audit Committee Members who attended meetings in 2012 was shown as below:

During 2012, the Audit Committee conducted 21 sessions, discussing and sharing ideas with company management, the internal auditor and an independent auditor; 1 session, without the presence of company management, discussing and seeking advice from the independent auditor with regards to the performance and coordination of the responsible parties. The following is a summary of the tasks performed by the Audit Committee in 2012:

Mr. Sakdi KiewkarnkhaIndependent Director

Pol.Maj.Gen. Pracha AnucrokdilokIndependent Director

Mr. Kiti PilunthanadilokeIndependent Director

Ms. Sureenard SukhawanchaiGeneral Manager - Audit Unit

acting in capacity asAudit Committee Chairman;

acting in capacity asAudit Committee Member;

acting in capacity asAudit Committee Member;

acting in capacity asSecretary of the Audit Committee

attended 21 meetings




1. The Audit Committee examined the annual and quarterly financial statements for the year 2012, the crucial accounting policies, accounting

adjustments that significantly impacting financial statements, the adequacy of information disclosure and the preparation of financial

statements according to the updated accounting standards.

2. The Audit Committee considered and gave advice on the related transactions or the transactions

with potential conflicts of interest.

3. The Audit Committee examined the effectiveness of the internal control system to ensure that

the operations of the company is efficient and effective, based on the internal auditor and independent auditor’s reports.

4. The Audit Committee supervised the internal audit function to ensure that it would be effective

to protect the best interests of the company and its shareholders.

5. The Audit Committee visited 8 companies within the group in Thailand and attended meetings with management of each company. They examined the risk management system, the internal control system, the environment management system, problems related to

financial statements; and problems related to the internal and independent auditors. They also visited factories to observe the production processes, inventory management and the overall environment.

6. The Audit Committee Chairman visited 2 subsidiary companies in the USA. He attended

meetings with the directors of these companies in the same manner as he performed with

group subsidiaries within Thailand.

7. The Audit Committee considered and appraised the performance of the independent

auditors and found that they had performed their professional roles with independence, knowledge, ability and experience 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 in the aspect of the accounting systems, the internal

control measures 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 beneficial to shareholders’ and the Company’s interests,

the Audit Committee therefore proposed that Mr. Sophon Permsirivallop, Ms. Rungnapa Lertsuwankul, Mr. Chayapol Suppasedtanon, Ms. Pimjai Manitkajohnkit from Ernst & Young Office Limited should be re-appointed to act in the same capacity for the year 2013.

The Audit Committee conducted performanceappraisal of independent auditors and found that they had performed their professional roles withindependence and had full unconditional access to all data required.

The Audit Committee concluded that the Company’sdirectors and executives were committed to achieving their goals with quality, emphasizing the importance of their duties performed under a good management system with adequate and appropriateinternal controls, reporting financial information and preparing financial reports in accordance with generally accepted accounting standards, and fully observing relevant legislative and regulatoryrequirements.

(Mr. Sakdi Kiewkarnkha)Audit Committee Chairman

(Mr. Kiti Pilunthanadiloke)Audit Committee Member

(Pol.Maj.Gen. Pracha Anucrokdilok)Audit Committee Member


MANAGEMENT DISCUSSIONAND ANALYSIS (MD&A)

OVERVIEW

2012 was clearly a testing year for TUF when tough challenges disrupted our business in succession. However, we still managed to attain another recordlevel of sales in spite of lower earnings than that of a year ago. Consolidated sales increased by 8% from 2011 to THB 106,698 million while net income dropped by 8% to THB 4,694 million due to escalating costs. Higher sales value was driven primarily by upward price adjustments, coupled with moderate increase in volume. In sum, it was considered a satisfactory performance, given the host of challenges.

Indeed, the firm’s performance was resilient during the first 9 months of the year with sales, EBITDA and net profit all up by 11%, 8% and 14% YoYrespectively from a year ago. Moreover, thesuccessful capital increase (THB 9,563 million) thru a rights offering in May simply restored ourfinancial position to the pre-MW Brands level that consequently increased our capacity for future expansion or acquisition opportunities as well as reducing our interest burden going forward.Nevertheless, a sharp decline of tuna raw materialprices led by an unexpected increase in supply and fast rising shrimp raw material prices caused by the quick and extensive emergence of EarlyMortality Syndrome (EMS) that killed shrimpprematurely have sent the last quarter of the year into a rollercoaster spin. Both extreme situations, though in totally different directions, made matchingcost with prices such a formidable task thatprofitability during the fourth quarter fell dramaticallyas a consequence.

The following are some key events that shaped our performance of the year:

(1) A fire at our Samutsakhon shrimp plant

On February 11, 2012, one of our shrimp processingplants (located in Samutsakhon province,Thailand) was damaged by a fire. All staff and daily workers were safe and unhurt. The damage was limited to the building, inventories and somemachinery which were fully insured. The insurance policy also covered potential financial impacts from business interruptions. The operations successfullyresumed within 2 months in a rented facility, though with limited space that capped our capacity and productivity in the short term. The normal dailyprocessing capacity of the original plant was 120 tons of raw materials.

(2) 40% increase in the minimum wage by the Thai government

With the Thai government’s aim to drive the localeconomy by promoting domestic consumption through welfare policies, raising the minimum daily wage by 40% to THB 300 in one shot was by far the move with most far-reaching consequences to the local industries, particularly among SMEs. With less of than 10% of our cost of goods sold accountingfor labor wages, we have been able to cope with the new challenge thru price adjustments and streamlining our workforce using automation. Our first6 months’ performance since the implementationof this policy showed sustainable margins despite higher labor costs.


(3) Continual tuna raw material prices and sharp volatility in Q4

In 2012, the unprecedented continuous upward trend of tuna raw material prices (WPO/Bangkok landing) set a historic high in September at USD 2,350 per metric ton, followed by an abrupt fall in the final quarter to USD 1,900 per metric ton. This development sent processors, including TUF, into a rollercoaster spin that made maintainingprofitability a major challenge. In other words, a gradual change in raw material prices appeared to be more manageable than a volatile one seen in the last quarter.

(4) Thai baht appreciation upon capital inflows

Since early August, Thai baht revived its upwardtrend against US dollar. Thai baht suddenlyappreciated from the ranges of THB 31.5 / USD to THB 30.5 / USD within weeks due to the continuouscapital inflows into Thai capital markets. The negativeimpact of Thai baht strength has been largelyoffset by our currency hedging, at least in the short term. Except if Thai baht continues to rise against other regional currencies on a more permanentbasis, a stable Thai baht at the current rate should be manageable.

(5) Intensifying market competition between US canned tuna brands

In 2012, the price competition between the top brands of canned tuna in the US intensified. The consequence was significantly lower profitability at major players, including our US subsidiary Chicken of the Sea International (COSI). The situation only started to turn rational when leading players began adjusting prices upward to cope with historic high raw material costs from the third quarter onward. If the trend continues, COSI’s profitability should recover in 2013.

(6) Operating loss of US Pet Nutrition (USPN)’s first year of commercial run

2012 was USPN’s first year of commercial run which capacity utilization was still low andadjustments to the operations were still ongoing. The firm reported an operating loss as expected for a startup. We are nevertheless positive about the prospect of the US pet food business, particularly in the premium segment. We do look forward to this plant breaking even soon when administrative issues are organized and settled.

(7) Short shrimp supply and spiking prices after the EMS outbreak

In 2012, the new epidemic of Early MortalitySyndrome (EMS) struck a few major shrimpproduction countries in succession, namely China,Malaysia, Vietnam and Thailand. The epidemic indeed only became obvious in the third quarterof the year when a large percentage of farms on the Eastern Seaboard and the Central Region of Thailand were badly affected by the disease that made shrimp seeds die prematurely. It wasestimated that up to 20% of Thailand’s shrimp output in 2012 was reduced from a year ago as a result of this outbreak. The situation remained unclear as the true cause of this disease was not exactly known. The acute short supply, particularly in the fourth quarter of 2012 and the first quarter of 2013, however shot up the raw material pricessignificantly, causing most shrimp processorsunprofitable, given either their orders beingcommitted at lower prices before the outbreak or market resistance for price adjustments. In 2013, the industry will need to closely monitor thesituation to determine whether the harvest of the first crop of the year (due in June / July) will be poor or a return to normalcy.


TUNA BUSINESS

Total tuna sales were THB 52,147 million, up 7.5% from THB 48,491 million a year ago while volume (tonnage) increased by 4.1%. The factor behind the increase was driven by volume and priceadjustments to cope with the continual surge of raw material prices through most of the year. Our contract manufacturing (OEM) sales outpaced branded business (10.7% vs. 4.5%). Sales growth generally came from the US, Africa and the MiddleEast markets. Profitability was generally in lineduring the first three quarters, but dampened by the raw material price volatility in the last quarter.

The tuna raw material price through the year was generally high, reaching new highs and setting a new record at US$ 2,350 per metric ton in September(again), though fell abruptly in the last fourth quarterand hit a bottom in USD 1,900. On average, the skipjack price (WPO/Bangkok landing) during the year has increased by 20% to USD 2,127 per metric ton from USD 1,766 a year ago. The year started with prices at around USD 2,030 and rose continually and eventually set a historic high in September. However, the price suffered a deep drop into the fourth quarter, due to increased supplymade possible by better catching. Nevertheless, the fish price has already rebound recently and edging back to the previous high level. The higher raw material price was attributable to periodic poor catches (as a result of unpredictable and sometime extreme weather patterns) and increased fishing regulations supporting precautionary conservative causes.

SHRIMP AND RELATED BUSINESS(FROZEN SHRIMP AND FEED)

Total sales of shrimp and related business were THB 24,072 million, almost staying flat from a year ago while volume (tonnage) dropped by 1.5%. Selling prices were generally adjusted upward to cope with the higher shrimp raw material pricesin the second half of the year. Frozen shrimpexport sales were limited by the current constrained

production capacity after the February fire incidentand the adverse impact from the EMS outbreak in the fourth quarter. The dominant market remained the US, followed by Japan and the EU. The allianceand subsequent share acquisition of Pakfood, a leading shrimp processor and exporter in Thailand,during the year should help strengthen ourprocurement, processing and distribution in our main markets, particularly the US.

In 2012, the domestic shrimp raw material price has been very volatile, only dropping briefly upon the harvest of the first crop, followed by a sharp jump due to growing shortage caused by the EMS outbreak that greatly reduced output on the EasternSeaboard and the Central region of Thailand. In general, the average price (60 pieces/kg) was THB 136/kg, down 4% from a year ago. But this figure was far from a realistic picture that showed a sharp volatility through the year. The price indeed hit some low levels in the first half of the year, but moved sharply higher when the supply got really short by the year end. The most recent level was above THB 160 per kg.

FINANCING AND INVESTMENT

During 2012, we have carried out a few important financing and investment activities as follows:

(1) Successful equity capital increase through a rights offering (5 existing shares for a newly issued share @THB 50 each) to existing shareholders in May, 2012

That allowed us to raise as much as THB 9,563 million (the largest ever fund raising activity for TUF that was also considered a sizable amount among most Thai listed firms), thanks to the strong shareholders’ support. This whole amount was then used to repay all of our euro-denominated debts worth in excess of € 340 million incurred as aresult of the acquisition of MW Brands in 2010. This exercise helped send the group’s net debt / equity ratio to 0.8 time (well below our long term policy of 1 time or below), restoring our financial position to the


healthy level before the acquisition of MW Brands. In addition to lower financial risks, it also made us possible and ready again to consider any newinvestment opportunity. With an improved financial position and our extended market reach thanks to a successful integration with MW Brands, the leadinglocal credit rating agency TRIS has decided toupgrade our corporate and issue credit rating from A+/stable to AA-/stable in January, 2013.

(2) Successful strategic investment in a 54.46% stake of SET-listed Pakfood (PPC).

Pakfood is one of the leading Thai frozen seafoodprocessors and exporters with a strong focuson frozen shrimp, pasteurized crab meat andready-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-addedfood products, such as dim sum, in Thailand. In 2012, the firm generated sales of THB 6,507 million,though with a loss of THB 77 million due to achallenging shrimp market. As of December 31, 2012, its total assets were worth THB 3,573 million.

The share acquisition was made in 3 steps. First, it was through a tender offer by TUF (@ THB 51 per PPC share) in April when we can acquire up to 40% of its total 30 million outstanding shares. Then, in December, we managed to acquire another9.97% stake from its existing shareholders @ THB 54 per share. Most recently, we acquired more shares (c. 3 million) thru PPC’s rights offering (10 existing shares for 1 new share @ THB 50 per share). The total investment was worth THB 920 million. These transactions were funded by TUF’s internally generated cash flows.

We recognize the strategic value of cooperationbetween the two leading seafood companies which both share similar business in shrimp and value-added frozen seafood products. This alliance

would allow more efficient raw material sourcing, improved management of manufacturing capacitiesand more joint marketing efforts to expand our localand overseas markets, such as the US and the EU which have been offering plenty of growthopportunities. With PPC’s capability of value-addedfrozen 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 procurement by both firms will collectively amount to almost 20% of total Thai shrimp output per year, creating a crucial advantage for the alliance. Inaddition, as the local labor supply continues to tighten, this linkup should also lead to more optimal capacity utilization at both firms’ processing plants without unnecessary expansion.

(3) Increased investment in Avanti Feeds Limited to 25.12% from 14.99%.

The increase in the shareholding in Avanti Feeds was mainly a result of transferring our existing 49% stake in Avanti Thai Aqua Feed (a joint venturewith Avanti Feeds in producing shrimp feed for sale in Gujarat, India) to our Indian partner inexchange for new shares issued by them after an Indian court’s approval for such share acquisition with no requirement for a tender offer to existing shareholders. In other words, this was not a cash transaction. Avanti Feeds (listed on the Bombay Stock Exchange) has been a value-accretiveacquisition for us since our initial investment in late 2008. For the past two years, the firm has delivereda turnaround performance as it managed tocapitalize on the fast growing white shrimp farming business in India. Currently, the firm is among the two largest shrimp feed producers and distributors in the country. At the moment, it is also expanding its shrimp processing operations to take advantage of the growing demand for shrimp from overseas markets.


(4) A shrimp farming joint venture with Mitsubishi Corporation thru Thai Union Feedmill.

TUF’s 51% owned subsidiary Thai Union Feedmill(TFM) has entered into a joint venture withMitsubishi Corporation (MC), where TFM will hold 51% while MC the rest. This joint venture would provide an enhanced supply chain for both TUF and MC, allowing them to procure good quality shrimp raw materials from Thailand and offer theirrespective customers of reliable product traceability.In addition, this investment should help achieve both parties’ mutual objectives of secured sourcing and sustainability. This strategic initiative will also make use of TUF’s feeds and baby shrimps, which in turn helps develop its feed quality and hatcherybusiness, achieving an end-to-end integrated shrimp business. The initial investment amounted to THB 560 million and would eventually increase to THB 900 million in the future. This amount will include purchase of existing mid-scale shrimp farms and setting up new ones along the Thai coast. Initially, the new firm will acquire two existingshrimp farms in Satoon and Trang provinces,currently owned by TFM. The new venture targets a total annual production capacity of up to 10,000 metric tons by 2018. In order to achieve full product traceability and quality assurance, the new firm will also operate a shrimp hatchery business by acquiringTFM’s subsidiary Thai Union Hatchery (TUH).

Through this new venture, TUF will be able to offer an integrated shrimp supply chain network which starts from hatchery, farming, shrimp feed production,processing thru distribution. The ultimate goal is to secure safe and reliable raw materials in order to meet its worldwide customers’ growing need for products that provide traceability. It would also help to strengthen and expand the group’s global shrimp business in the future.

FUTURE PROSPECT AND ACTION PLAN

We expect consolidated sales to increase by around 15% in 2013 to achieve our USD 4 billion target. Key growth drivers will come from continual sales growth of the following products:

(1) tuna (on the back of rising tuna prices andcontinuous growth of OEM business);

(2) sardine & mackerel (strong demand from emerging markets such as Africa and AEC);

(3) pet food (improvement of USPN’s operations);

(4) recovery of shrimp processing and feedbusiness in Thailand with an expectation of the easing EMS epidemic in 2H13

In addition to expected higher sales, our mainobjective is also to maintain profit margins in light of tremendous cost pressure from higher rawmaterial prices, strengthening Thai baht and a higher minimum wage in Thailand. Financial costs should however decrease thanks to the successfulcapital increase last year that reduced a significantportion of our overseas debts. The US should still be our largest market, but emerging markets, namely the ASEAN Economic Community (AEC), the Middle East, Africa, and South America, areexpected to post continually higher growth rates from their small bases. We’ll spend approximately THB 6 billion per year on capital investment, which is higher than our typical annual budget of THB 3 billion, in this and next 2 years in order to strengthenour processing capacities and capabilities of the group.


Our main tasks in 2013 are therefore to:

(1) Increase our production capacities:

a) building a new modern shrimp processing plant near Samutsakhon province to replace the existing one (rented facility) that cannot cope with our customers’ growing demands;

b) renovating the shrimp plant that was damaged by the fire and turning it into a processing facility

for our salmon and cephalopod business in Thailand;

c) adding more cold storage facilities for raw materials and finished products as a result of

continual capacity expansion in Thailand and our overseas production plants;

(2) Implement further automation in Thai operationsin order to cope with the challenges of chroniclabor shortage and a higher minimum wage;

(3) Adjust selling prices and costs of our products in order to maintain profitability and stay competitivedespite the rising pressure of surging raw material prices;

(4) Implement the shrimp farming and hatchery joint venture with Mitsubishi Corporation thru Thai Union Feedmill;

(5) Ensure US Pet Nutrition to stay on track to ramp up its utilization rate with an objective to achieve profitability soon and capture the potential of the emerging premium segment of the US pet market;

(6) Implement further sustainability initiatives to meet the growing requirements and expectations from global customers and interest groups;

(7) Increase the proportion of value-added productsthrough more new product developments;

(8) Manage financial risks (FX and interest rate) and scrutinize cash flows and debt covenantsactively

Our dividend policy is to pay at least 50% of our net profit twice a year. We have followed this policyall along, only until 2011 when we had to limit the annual dividend to a fixed amount of THB1.2 billiondue to the covenants of the debts incurred for the acquisition of MW Brands. However, after we successfully repaid a substantial portion of those debts as a result of the successful capital increase in May, we have already returned to the original dividend policy since the second dividend payment in September last year.

Thanks to our prudent management and ability to adapt to changing business environments, we have managed to report consecutively profitable quarters and dividend payments since our listing in the Stock Exchange of Thailand in 1994.

RISKS

In addition to proper execution of our focused strategyand our staff’s determination to success, we believethe likelihood of meeting our goal this year will also be subject to the following critical factors:

Foreign exchange rate.As 90% of the group’s revenues are in foreigncurrencies, any extreme fluctuations of foreignexchange rates will have impact on our profitability. It is mainly because a portion of our Thai plants’ expenses are in Thai baht. In 2012, around 76% of our group (consolidated) operating expenses were in foreign currencies. As a dollar earner, we normally benefit from a strong dollar situation. But, thanks to our non-speculative and timely currency hedging policy, we have been successful in riding out most of the foreign exchange rate fluctuations, with consistent foreign exchange gains in the past few years as a proof.


Raw material price.Raw material price is the main factor for earnings volatility as it accounts for almost a majority of our typical product costs. The raw material pricevolatility from time to time could exert somepressure on margins as price adjustments might not be as timely as we wish, but we can generallyachieve that over a longer period of time. Our long term track record shows that non-speculativepurchase, careful inventory management of raw materials and timely adjustment of the selling price has helped us ride out most of the potential impact from such volatility. Our selling prices are normally set on (raw material) cost-plus (processing fees) basis.

The exception happened in 2012, particularly duringthe fourth quarter, the local shortage of farm-raised shrimp as a result of EMS epidemic and the suddenimproved catching of sea-captured skipjack tuna had caused a significant impact on our bottom line due to sharp price volatility (though moving inopposite directions). Dramatically lower or higher prices created market confusion and customerresistance to new purchases regardless of the price level. What made the matter worse was the fact that both extreme situations took place at the same time. We expect our operating performance to return to normalcy once raw material pricesrestore their typical patterns.

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

Food safety (and traceability) and sustainability continue to be very critical competitive factors for food exporting business going forward. They can serve as an advantage as well as a disadvantage (in form of trade barriers) to any food company. Given our on-going certification programs and frequent factory audits by global customers from

most food safety-stringent markets, we are confidentthat our high standards and track record will work to our advantage. Besides, our management also takes note of consumers and investors’ growingawareness of the impact of each business onthe environment in terms of preservation andsustainability. That intention led to our involvementin co-founding the International Seafood SustainabilityFoundation in early 2009, which performs scientificresearch and promote preservation of tunaresources. Furthermore, our four-star certification on our shrimp hatchery, shrimp feed mill, partner farms and processing facilities by AquacultureCertification Council (ACC) is another proof of this intention. We work closely with all stakeholders to ensure TUF as socially responsible.

We also uphold corporate governance, transparencyand professional management, in light of corporate social responsibility (CSR), as our guiding principles.We treat shareholders, whether major or minority,in the fairest and most responsible manner bycommitting to full and timely information disclosure and returning cash in form of dividend to them as much as possible. Investors’ confidence in our commitments has been consistently proved innumerous awards which we received over the years. Furthermore, consistent coverage by analystsfrom world and local leading investment banks and securities brokers and frequent visits by influential 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 various certification programs, social activities and with the Sustainability Department set upspecifically for the business under the group.


Liquidity Ratios

• Current Ratio (Times)• Quick Ratio (Times)

Leverage Ratios

• Total Liabilities to Equity (Times)• Debt to Equity (Times)*• Time Interest Earned (Times)

Efficiency Activity Ratios

• Assets Turnover (Times)• Inventory Turnover (Times)• Accounts Receivable Turnover (Times)• Accounts Payable Turnover (Times)

Profitability Ratios

• Gross Profit Margin (%)• Net Profit Margin (%)• Return on Average Equity (%)• Return on Assets (%)**

Per Share Data

• Earnings per Share (Baht)• Dividend per Share (Baht)• Book Value per Share (Baht)

1.590.48

2.071.473.76

1.253.469.72

13.29

16.645.14

22.7910.80

5.351.56

25.57

1.360.37

1.350.873.40

1.203.409.35

11.66

15.344.36

15.228.90

4.392.10

34.77

COMPARATIVEFINANCIAL RATIOS

Consolidated Figures 2012 2011(Restated)

Comparative Financial Ratios (2012-2011)

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


FINANCIAL ANALYSIS

AN OVERVIEW

2012 full year sales of THB 106,698 million were a new record with 8% growth YoY. Nevertheless, this was also a year full of challenges, namely the shrimp plant fire incident in February, the risingtuna raw materials prices with high volatility in 3Q & 4Q12, intense price competition in the US canned tuna market, the loss from USPN’s first year ofoperations, and the Early Mortality Syndrome (EMS) outbreak on the local shrimp supply and raw material prices. The business remained resilient for the first 9 months of the year and the performance was indeed considered satisfactory, particularly strong in 3Q12 when total sales and net profit set new quarterly highs. The negative impacts from the huge volatility of shrimp and tuna raw material prices just reversed the trend in the last quarter.

SALES

2012 consolidated sales hit a record level of THB 106,697 million with 8% growth YoY from THB 98,670 million due to higher sales of tuna (+8% YoY), sardine & mackerel (+30% YoY), value-added& other products (+24% YoY) and pet food (+11% YoY). However, sales of shrimp and related businessslightly declined by 0.4% YoY while sales of salmondecreased by 2% YoY. In US Dollar term, 2012 consolidated sales increased by 6.5% YoY from USD 3,232 million to USD 3,441 million. The averageexchange rate for the year was at THB31.00/USD in comparison with THB30.53/USD in 2011.

Tuna and shrimp were the major sources ofrevenues accounting for 49% and 23% of total sales, respectively. Pet food sales accounted for 7% of total sales, followed by sardine and mackerelat 6%, salmon at 4% and value-added & other products at 11%.

In terms of revenues breakdown by geography, the US remained the largest market (36% of total sales), followed by Europe (30%), Thailand (10%), Japan (9%) and Africa (5%). The African market showed the strongest growth (+84% YoY), followedby the Middle East (+24% YoY). The developed markets such as the US and Europe showed moderate growth of 8% and 2% YoY while Japan showed negative growth of 2% YoY. Sales to South America were lower than a year ago by 20%.

In terms of the main operating units, Chicken of the Sea International accounted for 14% of the totalgroup sales while Chicken of the Sea FrozenProducts for 17%. In other words, the US operating units added up to 31% of the total. MW Brands now became the single largest unit within the group,accounting for 24% when Thai and other operating units made up for the biggest portion (45%).

GROSS MARGIN

Gross margin for 9M12 was successfully sustained at 16.5%, but not until 4Q12 when quarterly gross margin fell to 11.6%. As a result, 2012 gross marginwas 15.3%, a plunge from 16.6% in 2011 due


mainly to the operating loss from USPN’s first year of operations, high volatility of tuna raw material prices in 4Q12 that pressured tuna OEM gross margin, intense price competition in the US canned tuna market, and a significant drop of shrimp feed margin (due to rising raw material prices and lowerdemand from shrimp farms as a result of EMSoutbreak in 2H12).

SELLING AND ADMINISTRATIVE EXPENSES (SG&A)

2012 SG&A increased by 7% YoY from THB 8,882 million to THB 9,493 million mainly as a result of higher sales promotion, personnel and otheradministrative expenses. However, %SG&A to saleswas 8.9%, still below the expected range of 9% and lower than that of 2011.

OTHER INCOMES (INCLUDING SHARE OFINCOME FROM INVESTMENT IN ASSOCIATES)

Other incomes declined by 21% YoY from THB 698 million in 2011 to THB 555 million in 2012 due to a lower share of income from investment in associates(e.g. Pakfood), lower tax coupon received and lowerclaims from raw material damages.

FX GAIN/LOSS

2012 FX gain increased by 63% YoY from THB 305 million in 2011 to THB 497 million due to timely USD forward hedging upon THB appreciation. Any gain is meant to compensate for any lost profit in case of Thai baht appreciation.

FINANCE COST (INCLUDING INTERESTEXPENSES, BANK CHARGES & OTHERS)

Finance cost increased by 2.5% YoY from THB 2,272 million in 2011 to THB 2,329 million in 2012 due mainly to the one-time non-cash prepayment expense of MW Brands loan in 2Q12 (THB 407 million net-of-tax). The 2012 effective interest rate therefore temporarily rose to 6.2%. Going forward, the interest expense would decline after the loan repayment.

CORPORATE INCOME TAX

2012 corporate income tax decreased by 38% YoY from THB 192 million to THB 120 million mainly as a result of tax credits from operating losses of US subsidiaries in 2012. The effective tax rate in 2012 therefore dropped to 2.1% from 3.1% in 2011. NET PROFIT

2012 net profit were reported at THB 4,694 million, an 8% decline YoY from THB 5,117 million in 2011. The main reasons came from a lower gross margin,higher finance cost (due to 2Q12 prepayment of MWB loan) and lower tax expenses (from 4Q12 tax credit). Net profit margin therefore declined to 4.4% lower from 5.2% in 2011. Excluding the one-offextraordinary finance fee booked in 2Q12, thenormalized net profit should have only declined by 0.3%YoY to THB 5,101 million with the normalized net profit margin of 4.8%.


ASSETS

Total assets in 2012 amounted to THB 94,759 millionrepresenting an increase of THB11,482 million from THB 83,277 million in 2011.

• Trade receivables were THB 11,918 million, up 7% from THB 11,161 million in 2011 primarily due to higher selling prices to cope with

high raw material prices. Accounts receivable turnover decreased to 9.35 times from 9.72

times in 2011 thanks to higher growth of average accounts receivables in relation to growth

of sales (+12% YoY compared to 8% YoY). However, accounts receivable turnover days

were stable at 38 days compared to 37 days in 2011.

• Inventories increased by 27% to THB 33,291 million from THB 26,180 million a year ago due to higher raw material costs. Inventory turnover

declined to 3.04 times from 3.46 times in 2011 due to higher growth of average inventory

compared to growth of COGS (+25% YoY vs +10% YoY). 2012 inventory turnover days increased to 119 days from 104 days in 2011 mainly as a result of higher value of inventory balance from the higher raw material prices.

• Asset turnover fell to 1.20 times in 2012 from 1.25 times in 2011 due to higher growth of

average total assets compared to growth of sales (+13% YoY vs +8% YoY).

• Current ratio declined to 1.36 times in 2012 from 1.59 times in 2011. Quick ratio also dropped to 0.37 time from 0.48 time. The declining of these ratios resulted from the higher growth of total current liabilities (+41% YoY) compared to that of total current assets (+21% YoY). Total current liabilities were higher YoY due mainly to higher bank overdrafts and short-term loans from financial institutions and higher trade and other payables.

• Property plant and equipment totaled THB 17,923 million, up 14% compared to THB 15,655 million in 2011 due to capacity

expansion and improvement of existing plants (TUF, TUM, SCC and TFM) as well as new

equipment and machinery of MWB, USPN and COSI to increase efficiency of subsidiaries plants.

LIABILITIES

Total liabilities in 2012 amounted to THB 54,415 million representing a decrease of THB 1,746 millionfrom THB 56,161 million in 2011.

• Bank overdrafts and short-term loans increased by 55% to THB 22,511 million from THB 14,477

million due mainly to higher working capital need from higher inventory level.

• Trade payables were THB 10,545 million, up 33% from THB 7,919 million due to higher raw material costs. Accounts payable turnover dropped to 11.66 times from 13.29 times a year ago due to higher growth of average accounts payable compared to growth of COGS (+25% YoY vs +10% YoY). Trade payables days

consequently rose to 31 days from 27 days. • Long term loans significantly dropped by 82%

to THB 2,824 million from THB 15,599 million mainly as a result of MW Brands loan prepayment in 2Q12. • Interest bearing debts were THB 35,008 million, a 12% decrease from THB 39,766 million a year ago. Approximately 36% of the total interesting bearing debts were long term (including 3% of current portion). In addition,

around 75% of these debts were THB currency while 17% were in US dollar and 8% in Euro.


SHAREHOLDERS’ EQUITY

Total shareholders’ equity in 2012 amounted to THB 37,215 million representing an increase of THB 12,757 million from THB 24,458 million in 2011 mainly due to capital increase in 2Q12 and earnings incurred during the year.

• In May 2012, the firm increased the capital totaled THB 9,563 million by a rights offering at the ratio of 5 existing common shares to 1 newly issued share at the subscription price of THB 50 per share.

• The registered capital rose from THB 1,000 million in 2011 to THB 1,202 million in 2012 for the support of this capital increase and the previous issuance of a convertible debenture in 2010. Issued and paid-up common shares increased by 191,264,422 shares from 2011 to 1,147,593,829 shares in 2012.

• Total liabilities-to-equity ratio in 2012 declined to 1.35 times from 2.07 times in 2011 due mainly

to a boost of shareholders’ equity by 49% YoY (from capital increase in 2Q12) while total

liabilities slightly fell by 3% YoY. 2012 debt to equity ratio also dropped sharply to 0.87 time from 1.47 times in 2011 thanks to successful capital increase and the subsequent repayment

of MW Brands loan.• 2012 return on average equity decreased to

15.2% from 22.8% in 2011 mainly as a result of greater shareholders’ equity base but at a slower pace of earnings growth. Excluding the one-off extraordinary item in 2Q12, the

normalized return on average equity would be 16.5%.

CASH FLOWS

Net cash flows from operating activities in 2012 were THB 4,451 million, a decrease of THB 1,009 million from THB 5,460 million in 2011 mainly due to lower profit before tax. The annual depreciationand amortization expenses amounted to THB 1,902 million.

Net cash flows from investing activities amounted to THB 4,283 million representing an increase of THB 1,105 million from THB 3,178 million a year ago due mainly to new investment in associates (Pakfood).

Cash outflows from financing activities in 2012 were THB 168 million. The net outflows were main-ly a result of MW Brands loan prepayment despite the capital increase, higher bank overdrafts andshort-term loans and dividend payment of THB1,884 million during the year.

Net increase in cash and cash equivalents at the end of 2012 amounted to THB 497 million.


Common Share Register

Convertible DebenturesRegistrar

Independent Auditors

Independent AuditorRemuneration

Thailand Securities Depository Co., Ltd7th Floor, The Stock Exchange of Thailand Building, 62 Rachadapisek Road, Klongtoey Bangkok 10110Tel: 66 (0) 2229-2440

Stock Information DepartmentThai Union Frozen Products PCL. (TUF)25th Floor, S.M. Tower, Phaholyothin Road, Samsennai,Phayathai, Bangkok 10400 ThailandTel: 66 (0) 2298-0024Fax: 66 (0) 2298-0553

Mr. Sophon Permsirivallop or Ms. Rungnapa Lertsuwankul orMr. Chayapol Suppasedtanon or Ms. Pimjai Manitkajohnkit

Ernst & Young Office Limited193/136-137, 33rd Floor, Lake Rajada Office Complex,New Rachadapisek Road, Klongtoey, Bangkok 10110 Tel: 66 (0) 2264-0777, 2661-9190Fax: 66 (0) 2264-0709

1. Audit Fee The Company and subsidiaries paid audit fee to:• Auditing firm where independent auditors are attached to, individual or

entity related to independent auditors and auditing firm during 2012 fiscal year at Bt 7,645,400

2. Non-Audit Fee The Company and subsidiaries paid remuneration incurred by the following service:• Audit fee paid to Auditing firm where independent auditors are attached

to, individual or entity related to independent auditors and auditing firm during 2012 fiscal year amounts totally to Bt-.

• Audit fee for special items, pursuant to the Notification Por 4/2001 of the Board of Investment, paid to Auditing firm where independent auditors

are attached to, individual or entity related to independent auditors and auditing firm during 2012 fiscal year amounts totally to Bt 400,000

REFERENCES


As the Company is a listed company on the StockExchange of Thailand, the Board of Directors here by expresses its responsibility for ensuring that theCompany’s financial reports contained hereingenuinely reflect its actual financial status and operating results, based on accounting principles which require accurate, complete, and adequate recording of accounting items in every aspect. We affirm that all due care and attention have been taken in the reporting of the financial statements

STATEMENT OFTHE BOARD OF DIRECTOR’S RESPONSIBILITIES FORTHE FINANCIAL STATEMENTS

Mr. Kraisorn ChansiriChairman

Mr. Thiraphong ChansiriPresident

and that they strictly comply with the generallyaccepted accounting standards. We also wish to assure that adequate disclosure of all pertinent material data has been made in notes to financial statement in accordance with the updated AccountingStandards as applied to the past financial year.Independent auditors have unconditionally expressedtheir opinions on our financial statements in the Report of Independent Auditors.


Independent Auditor's Report To the Shareholders of Thai Union Frozen Products Public Company Limited

I have audited the accompanying consolidated financial statements of Thai Union Frozen

Products Public Company Limited and its subsidiaries, which comprise the consolidated

statement of financial position as at 31 December 2012, and the related consolidated

statements of income, comprehensive income, changes in shareholders’ equity and

cash flows for the year then ended, and a summary of significant accounting policies and

other explanatory information, and have also audited the separate financial statement of

Thai Union Frozen Products Public Company Limited for the same period.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial

statements in accordance with Thai Financial Reporting Standards, and for such internal

control as management determines is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my

audit. I conducted my audit in accordance with Thai Standards on Auditing. Those

standards require that I comply with ethical requirements and plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor's

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity's preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the entity's internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.


I believe that the audit evidence I have obtained is sufficient and appropriate to provide a

basis for my audit opinion.

Opinion

In my opinion, the financial statements referred to above present fairly, in all material

respects, the financial position of Thai Union Frozen Products Public Company Limited

and its subsidiaries and of Thai Union Frozen Products Public Company Limited as at

31 December 2012, and their financial performance and cash flows for the year then

ended, in accordance with Thai Financial Reporting Standards.

Emphasis of matter

I draw attention to Note 4 to the financial statements, regarding the changes made by the

Company and its subsidiaries to their accounting policies in 2012, whereby from

presenting land at cost to presented it on a revaluation basis, and on accounting for

raw material inventories from a first-in, first-out basis to an average cost basis. The

Company and its subsidiaries have restated the financial statements presented herein for

comparative purposes as if they had always presented raw materials on an average cost

basis. My opinion is not qualified in respect of this matter.

Sophon Permsirivallop

Certified Public Accountant (Thailand) No. 3182

Ernst & Young Office Limited

Bangkok: 1 March 2013


Thai Union Frozen Products Public Company Limited and its subsidiaries

Statement of financial position

As at 31 December 2012

(Unit: Baht)

As at As at As at As at As at As at

Note 31 December 2012 31 December 2011 1 January 2011 31 December 2012 31 December 2011 1 January 2011

(restated) (restated) (restated) (restated)

Assets

Current assets

Cash and cash equivalents 7 1,400,044,853 902,520,399 1,037,296,710 62,334,789 55,908,174 14,912,270

Trade and other receivables 8,9 11,918,157,723 11,160,791,416 9,261,819,663 4,196,393,140 4,088,187,150 3,066,632,071

Short-term loans to subsidiaries 9 - - - 1,417,041,200 80,000,000 625,824,650

Short-term loans to other companies 11,652,013 - - 5,465,000 - -

Current portion of long-term loans to subsidiaries 9 - - - - 440,335,000 2,691,738,000

Current portion of long-term loans to other companies 6,954,524 4,070,571 1,430,750 1,608,338 - -

Inventories 10 33,290,478,541 26,179,795,469 21,345,831,518 4,871,029,878 3,644,784,286 2,450,618,428

Other current assets

Prepaid income tax 127,239,879 106,600,895 286,323,491 60,357,391 28,162,734 28,162,734

Current portion of forward exchange contracts receivables 240,052,680 142,731,953 748,337,711 130,727,848 140,443,542 558,700,840

Value added tax refundable 461,043,103 664,015,221 538,929,720 68,340,536 42,214,924 60,726,120

Others 881,003,687 817,680,911 739,834,454 73,173,048 34,631,753 51,494,323

Total other current assets 1,709,339,349 1,731,028,980 2,313,425,376 332,598,823 245,452,953 699,084,017

Total current assets 48,336,627,003 39,978,206,835 33,959,804,017 10,886,471,168 8,554,667,563 9,548,809,436

Non-current assets

Restricted bank deposits 11 13,649,287 12,024,282 11,031,720 - - -

Investments in associates 12 1,806,273,171 923,968,413 837,717,064 929,033,585 66,231,008 66,231,008

Investments in subsidiaries 13 - - - 14,063,001,850 4,566,571,387 4,396,708,852

Other long-term investments 14 32,317,276 70,305,372 72,669,275 - 34,579,160 34,579,160

Long-term loans to subsidiaries - net of current portion 9 - - - 21,129,712,775 17,007,904,981 15,429,105,300

Long-term loans to other companies - net of

current portion 24,121,373 24,557,502 28,630,292 1,260,000 - -

Property, plant and equipment 15 17,923,268,913 15,654,960,315 14,190,173,390 3,849,580,950 3,204,693,088 3,004,741,748

Goodwill 11,536,447,404 11,674,495,827 11,396,141,526 - - -

Intangible assets 16 13,278,430,015 13,349,544,156 13,027,293,393 2,929,189 1,675,667 1,508,855

Other non-current assets

Forward exchange contracts receivables

- net of current portion 97,167,200 76,264,500 387,308,300 97,167,200 76,264,500 387,308,300

Leasehold rights 204,308,926 175,671,012 21,094,331 - - -

Advance payment for purchase of property,

plant and equipment 37,734,173 8,251,306 35,227,356 - - -

Deferred tax assets 23 1,163,761,179 1,062,569,162 498,561,829 50,086,434 35,156,604 18,609,334

Unamortised discount from forward exchange contracts 157,955,797 185,529,121 246,928,814 157,955,797 185,529,121 246,928,815

Others 146,586,104 81,058,709 64,055,054 40,165,074 16,195,821 10,773,125

Total non-current assets 46,422,020,818 43,299,199,677 40,816,832,344 40,320,892,854 25,194,801,337 23,596,494,497

Total assets 94,758,647,821 83,277,406,512 74,776,636,361 51,207,364,022 33,749,468,900 33,145,303,933

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

Consolidated financial statements Separate financial statements



Statement of financial position (continued)


(Unit: Baht)

As at As at As at As at As at As at

Note 31 December 2012 31 December 2011 1 January 2011 31 December 2012 31 December 2011 1 January 2011

(restated) (restated) (restated) (restated)

Liabilities and shareholders' equity

Current liabilities

Bank overdrafts and short-term loans from

financial institutions 17 22,511,200,366 14,477,174,817 8,363,776,804 9,787,924,156 3,553,985,552 1,992,669,842

Trade and other payables 9,18 10,544,727,744 7,919,074,759 7,194,757,157 1,928,711,772 1,372,242,118 1,297,504,736

Short-term loans from subsidiaries 9 - - - - - 245,840,000

Current portion of long-term loans 19 399,000,000 983,548,345 516,057,950 112,500,000 - -

Current portion of debentures 20 500,000,000 - 3,200,000,000 500,000,000 - 3,200,000,000

Income tax payable 116,397,844 202,584,061 187,665,033 - 36,862,821 25,084,196

Other current liabilities 1,477,549,180 1,559,477,746 1,479,031,528 201,891,448 343,641,837 265,745,009

Total current liabilities 35,548,875,134 25,141,859,728 20,941,288,472 12,531,027,376 5,306,732,328 7,026,843,783

Non-current liabilities

Long-term loans - net of current portion 19 2,424,826,880 14,615,040,023 22,500,817,529 2,137,500,000 2,250,000,000 8,896,807,865

Debentures - net of current portion 20 6,733,847,032 7,228,325,702 500,000,000 6,733,847,032 7,228,325,702 500,000,000

Convertible bond 21 2,439,562,712 2,462,169,097 2,390,745,712 2,439,562,712 2,462,169,097 2,390,745,712

Provision for long-term employee benefits 22 1,476,893,699 1,005,703,635 584,648,625 341,674,259 190,432,553 161,865,407

Deferred tax liabilities 23 4,925,039,153 4,918,293,992 4,641,052,228 49,902,896 626,052 -

Forward exchange contracts payable - net of

current portion 339,211,088 411,350,702 88,683,600 324,647,375 362,851,125 88,683,600

Other non-current liabilities 526,758,955 377,786,026 465,575,140 154,334,132 88,236,570 47,267,248

Total non-current liabilities 18,866,139,519 31,018,669,177 31,171,522,834 12,181,468,406 12,582,641,099 12,085,369,832

Total liabilities 54,415,014,653 56,160,528,905 52,112,811,306 24,712,495,782 17,889,373,427 19,112,213,615

Shareholders' equity

Share capital 24

Registered

1,202,000,000 ordinary shares of Baht 1 each

(31 December 2011 and 1 January 2011:

1,000,000,000 ordinary shares of Baht 1 each) 1,202,000,000 1,000,000,000 1,000,000,000 1,202,000,000 1,000,000,000 1,000,000,000

Issued and paid-up

1,147,593,829 ordinary shares of Baht 1 each

(31 December 2011 and 1 January 2011:

956,329,407 ordinary shares of Baht 1 each) 1,147,593,829 956,329,407 956,329,407 1,147,593,829 956,329,407 956,329,407

Share premium 17,500,508,871 8,158,890,230 8,158,890,230 17,500,508,871 8,158,890,230 8,158,890,230

Retained earnings

Appropriated - statutory reserve 25 120,200,000 100,000,000 89,000,000 120,200,000 100,000,000 89,000,000

Unappropriated 17,699,516,062 15,247,385,852 11,336,526,710 7,546,976,011 6,644,875,836 4,828,870,681

Other components of shareholders' equity 747,611,124 (4,663,468) (87,474,610) 179,589,529 - -

Equity attributable to owners of the Company 37,215,429,886 24,457,942,021 20,453,271,737 26,494,868,240 15,860,095,473 14,033,090,318

Non-controlling interests of the subsidiaries 3,128,203,282 2,658,935,586 2,210,553,318 - - -

Total shareholders' equity 40,343,633,168 27,116,877,607 22,663,825,055 26,494,868,240 15,860,095,473 14,033,090,318

Total liabilities and shareholders' equity 94,758,647,821 83,277,406,512 74,776,636,361 51,207,364,022 33,749,468,900 33,145,303,933

- - - - - -





Income statement

For the year ended 31 December 2012

(Unit: Baht)


Note 2012 2011 2012 2011

(restated) (restated)

Revenues

Sales 9 106,697,622,358 98,670,377,747 25,071,942,048 23,725,730,352

Other income

Dividend income 72,000 828,755 1,421,743,357 1,214,008,607

Interest income 11,796,393 9,813,442 987,553,868 1,049,605,168

Exchange gains 496,804,699 304,755,850 217,898,692 47,608,703

Others 472,831,214 603,149,130 222,018,667 203,671,429

Total other income 981,504,306 918,547,177 2,849,214,584 2,514,893,907

Total revenues 107,679,126,664 99,588,924,924 27,921,156,632 26,240,624,259

Expenses

Cost of sales 90,335,525,090 82,253,268,454 22,649,962,345 20,907,995,795

Selling expenses 4,826,874,163 4,943,658,813 878,763,235 793,262,577

Administrative expenses 4,666,036,936 3,938,537,211 720,930,137 731,729,179

Total expenses 99,828,436,189 91,135,464,478 24,249,655,717 22,432,987,551

Profit before share of profit from investments

in associates, finance cost and income tax expenses 7,850,690,475 8,453,460,446 3,671,500,915 3,807,636,708

Share of profit from investments in associates 69,830,149 83,729,560 - -

Profit before finance cost and income tax expenses 7,920,520,624 8,537,190,006 3,671,500,915 3,807,636,708

Finance cost (2,328,874,222) (2,272,152,444) (706,000,826) (675,156,144)

Profit before income tax expenses 5,591,646,402 6,265,037,562 2,965,500,089 3,132,480,564

Income tax expenses 23 (120,158,878) (192,158,813) (30,365,070) (110,110,413)

Profit for the year 5,471,487,524 6,072,878,749 2,935,135,019 3,022,370,151

Profit attributable to:Equity holders of the Company 4,693,736,006 5,117,224,138 2,935,135,019 3,022,370,151

Non-controlling interests of the subsidiaries 777,751,518 955,654,611

5,471,487,524 6,072,878,749

Earnings per share 28

Basic earnings per share

Profit attributable to equity holders of the Company 4.39 5.35 2.74 3.16

Diluted earnings per share

Profit attributable to equity holders of the Company 4.29 5.21 2.71 3.11




Statement of comprehensive income


(Unit: Baht)


2012 2011 2012 2011


Profit for the year 5,471,487,524 6,072,878,749 2,935,135,019 3,022,370,151

Other comprehensive income:

Exchange differences on translation of

financial statements in foreign currency 88,925,545 80,905,135 - -

Gain on change in value of available-for-sale investments,

net of income tax 5,373,974 1,168,445 - -

Gain (loss) on change in the value of pension fund 39,803,020 (28,937,425) - -

Gain on revaluation of land, net of income tax 725,773,616 - 179,589,529 -

Actuarial losses, net of income tax (391,975,886) - (128,882,502) -

Increase (decrease) in other reserves 7,369,252 (5,471,986) - -

Other comprehensive income for the year 475,269,521 47,664,169 50,707,027 -

Total comprehensive income for the year 5,946,757,045 6,120,542,918 2,985,842,046 3,022,370,151

Total comprehensive income attributable to:

Equity holders of the Company 5,108,557,144 5,200,035,280 2,985,842,046 3,022,370,151

Non-controlling interests of the subsidiaries 838,199,901 920,507,638

5,946,757,045 6,120,542,918




Cash flow statement


(Unit: Baht)


2012 2011 2012 2011


Cash flows from operating activities

Profit before tax 5,591,646,402 6,265,037,562 2,965,500,089 3,132,480,564

Adjustments to reconcile profit before tax to net cash provided by

(paid from) operating activities:

Depreciation and amortisation 1,902,394,522 1,616,173,839 335,581,784 273,012,582

Amortisation of premium/discount from forward foreign

exchange contracts 71,257,387 63,014,522 75,921,504 63,413,780

Amortisation of issue cost of convertible bond, debentures

and long-term loans from financial institutions 676,369,715 163,988,942 11,678,945 111,307,543

Loss on write-off of unclaimed prepaid income tax 7,981,413 - 7,981,413 -

Allowance for doubtful accounts 1,871,776 14,684,702 97,797 22,572,912

Decrease of inventory to net realisable value (Reversal) 308,412,675 84,431,465 (28,312,207) 34,941,812

Allowance for loss on impairment of assets (Reversal) (28,702,970) 17,938,239 (29,365,348) 29,772,627

Allowance for loss on impairment of goodwill - 16,743,910 - -

Reversal of allowance for impairment loss of

investments - - (26,136,437) -

Share of profit from investments in associates (69,830,149) (83,729,560) - -

Loss on sale of investments 1,277,548 1,401,327 - -

Provision for long-term employee benefits 190,278,148 146,852,225 25,755,163 24,739,652

Gain on dissolution of subsidiaries (24,209) (1,113) - -

Loss on sale / write-off of property, plant and equipment

and other intangible assets 167,823,203 30,275,050 155,811,526 5,076,340

Loss on write-off of leasehold right 4,189,487 1,504,070 - -

Unrealised exchange loss (gain) (168,914,350) 812,917,376 (29,795,259) 611,414,570

Gain on share swap of investments in associates (54,763,471) - (54,763,471) -

Dividend income (72,000) (828,755) (1,421,743,357) (1,214,008,607)

Interest income (11,796,393) (9,813,442) (987,553,868) (1,049,605,168)

Interest expense 2,247,595,457 2,063,502,112 687,393,166 558,153,628

Profit from operating activities before change in operating

assets and liabilities 10,836,994,191 11,204,092,471 1,688,051,440 2,603,272,235

Decrease (increase) in operating assets

Trade and other receivables (930,089,533) (1,617,843,008) (223,928,951) (950,398,721)

Inventories (7,805,934,416) (4,351,469,787) (1,201,128,853) (1,227,300,688)

Other current assets 59,827,190 (225,389,433) (63,592,655) 32,891,163

Other non-current assets (97,530,874) 10,984,622 (24,510,095) (16,194,681)

Increase (decrease) in operating liabilities

Trade and other payables 2,623,837,551 653,779,147 517,297,852 111,324,157

Other current liabilities 74,789,851 (1,828,977) (40,764,766) 15,797,820

Other non-current liabilities 94,249,717 115,970,729 61,468,027 49,125,541

Cash flows from operating activities 4,856,143,677 5,788,295,764 712,891,999 618,516,826

Cash paid for corporate income tax (405,330,451) (328,043,131) (121,493,013) (107,022,356)

Net cash from operating activities 4,450,813,226 5,460,252,633 591,398,986 511,494,470




Cash flow statement (continued)


(Unit: Baht)

Consolidated financial statements Separate financial statements2012 2011 2012 2011


Cash flows from investing activities

Increase in restricted deposits with financial institutions (1,742,870) (735,191) - -

Acquisitions of property, plant and equipment (3,615,104,967) (3,364,840,178) (859,456,519) (556,106,161)

Acquisitions of intangible assets (22,959,172) (37,306,973) (1,570,670) (640,038)

Acquisitions of leasehold rights (9,207,473) (2,365,337) - -

Decrease (increase) in short-term loans to subsidiaries - - (1,356,907,200) 545,824,650

Increase in short-term loans to other companies (11,652,013) - (5,465,000) -

Decrease (increase) in long-term loans to subsidiaries - - (3,845,397,970) 1,119,297,720

Decrease (increase) in long-term loans to other companies (2,478,533) 1,304,154 (1,674,840) -

Increase in investments in subsidiaries - - (9,470,294,026) (169,862,535)

Increase in investments in associates (773,459,946) (44,548,168) (773,459,946) -

Increase in other long-term investments (200,368) (1,040,989) - -

Dissolution of subsidiaries 24,209 (174,911) - -

Interest received 12,215,820 9,802,775 1,085,063,999 1,040,025,013

Dividend received 55,249,439 35,828,755 1,421,743,357 1,214,008,607

Proceeds from sale of investments 4,782,221 3,154,823 - -

Proceeds from sales of property, plant and equipment

and intangible assets 81,502,668 222,988,668 25,479,854 1,262,886

Net cash from (used in) investing activities (4,283,030,985) (3,177,932,572) (13,781,938,961) 3,193,810,142

Cash flows from financing activities

Increase in bank overdrafts and short-term loans

from financial institutions 8,248,147,433 5,838,799,223 6,233,938,604 1,561,315,710

Decrease in short-term loans from subsidiaries - - - (245,840,000)

Decrease in long-term loans from financial institutions (13,439,584,588) (7,964,450,950) - (6,750,000,000)

Increase in debentures - 3,550,000,000 - 3,550,000,000

Cash paid for interest expense (2,256,563,390) (2,059,765,423) (685,902,735) (560,455,101)

Cash paid for unamortised front end and deferred

debentures fees - (23,964,321) - (23,964,321)

Proceeds from issued additional share capital 9,532,883,063 - 9,532,883,063 -

Decrease in non-controlling interests of the subsidiaries (368,932,205) (511,604,091) - -

Dividend paid (1,883,952,342) (1,195,364,996) (1,883,952,342) (1,195,364,996)

Net cash from (used in) financing activities (168,002,029) (2,366,350,558) 13,196,966,590 (3,664,308,708)

Increase (decrease) in translation adjustment 497,744,242 (50,745,814) - -

Net increase (decrease) in cash and cash equivalents 497,524,454 (134,776,311) 6,426,615 40,995,904

Cash and cash equivalents at beginning of year 902,520,399 1,037,296,710 55,908,174 14,912,270

Cash and cash equivalents at end of year (Note 7) 1,400,044,853 902,520,399 62,334,789 55,908,174

-




Cash flow statement (continued)


(Unit: Baht)

Consolidated financial statements Separate financial statements2012 2011 2012 2011


Supplement cash flows information

Non-cash items:

Undue installment of acquisition of property, plant

and equipment 188,809,392 95,370,986 72,278,789 24,143,691

Unrealised gain on changes in the value of investments (5,373,974) (1,168,445) - -

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 41,360,857 152,767,975 - -

Transfer of property, plant and equipment

to intangible assets 210,456,642 - - -

An adjustment provision for long-term employee

benefits to the beginning balance of retained earnings - 511,329,935 - 161,865,408

Increase in revaluation surplus on land 725,773,616 - 179,589,529 -

Transfer of other long-term investment to

investment in associate 34,579,160 - 34,579,160 -

Increase in actuarial losses (391,975,886) - (128,882,502) -


Thai

Uni

on F

roze

n Pr

oduc

ts P

ublic

Com

pany

Lim

ited

and

its s

ubsi

diar

ies

Stat

emen

t of c

hang

es in

sha

reho

lder

s' e

quity

For t

he y

ear e

nded

31

Dec

embe

r 201

2

(Uni

t: Ba

ht)

Exch

ange

diffe

renc

es o

nSu

rplu

s (d

efic

it)

trans

latio

n of

on

cha

nges

Prov

isio

n fo

rTo

tal o

ther

Tota

l equ

ityEq

uity

attr

ibut

able

Issu

ed a

ndfin

anci

al in

val

ue o

f ch

ange

s in

com

pone

nts

ofat

tribu

tabl

e to

to n

on-c

ontro

lling

Tota

l

fully

pai

d-up

stat

emen

ts in

avai

labl

e-fo

r-sa

leth

e va

lue

ofR

eval

uatio

nO

ther

shar

ehol

ders

'ow

ners

of

inte

rest

s of

shar

ehol

ders

'

shar

e ca

pita

lSh

are

prem

ium

Appr

opria

ted

Una

ppro

pria

ted

fore

ign

curr

ency

inve

stm

ents

pens

ion

fund

surp

lus

on la

ndre

serv

eseq

uity

the

Com

pany

the

subs

idia

ries

equi

ty

Bal

ance

as

at 1

Jan

uary

201

195

6,32

9,40

7

8,

158,

890,

230

89,0

00,0

00

11

,338

,911

,966

(4

7,63

8,42

4)

(18,

112,

392)

(2

7,66

4,01

4)

-

5,94

0,22

0

(8

7,47

4,61

0)

20,4

55,6

56,9

93

2,20

8,45

4,28

5

22,6

64,1

11,2

78

Cum

ulat

ive

effe

ct o

f cha

nge

in

ac

coun

ting

polic

y fo

r inv

ento

ries

(Not

e 4)

-

-

-

(2

,385

,256

)

-

-

-

-

-

-

(2

,385

,256

)

2,

099,

033

(286

,223

)

Bal

ance

as

at 1

Jan

uary

201

1 - a

s re

stat

ed95

6,32

9,40

7

8,

158,

890,

230

89,0

00,0

00

11

,336

,526

,710

(4

7,63

8,42

4)

(18,

112,

392)

(2

7,66

4,01

4)

-

5,94

0,22

0

(8

7,47

4,61

0)

20,4

53,2

71,7

37

2,21

0,55

3,31

8

22,6

63,8

25,0

55

Div

iden

d pa

id (N

ote

32)

-

-

-

(1

,195

,364

,996

)

-

-

-

-

-

-

(1,1

95,3

64,9

96)

(4

55,8

41,0

67)

(1,6

51,2

06,0

63)

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r

- a

s re

stat

ed-

-

-

5,11

7,22

4,13

8

11

6,05

2,10

8

1,16

8,44

5

(2

8,93

7,42

5)

-

(5,4

71,9

86)

82,8

11,1

42

5,

200,

035,

280

920,

507,

638

6,12

0,54

2,91

8

Una

ppro

pria

ted

reta

ined

ear

ning

s tra

nsfe

rred

to

sta

tuto

ry re

serv

e (N

ote

25)

-

-

11

,000

,000

(11,

000,

000)

-

-

-

-

-

-

-

-

-

Incr

ease

in n

on-c

ontro

lling

inte

rest

s

of

the

subs

idia

ries

-

-

-

-

-

-

-

-

-

-

-

(1

6,28

4,30

3)

(16,

284,

303)

Bal

ance

as

at 3

1 D

ecem

ber 2

011

956,

329,

407

8,15

8,89

0,23

0

10

0,00

0,00

0

15,2

47,3

85,8

52

68,4

13,6

84

(1

6,94

3,94

7)

(56,

601,

439)

-

46

8,23

4

(4,6

63,4

68)

24,4

57,9

42,0

21

2,65

8,93

5,58

6

27,1

16,8

77,6

07

Bal

ance

as

at 1

Jan

uary

201

295

6,32

9,40

7

8,

158,

890,

230

100,

000,

000

15

,207

,087

,354

68

,413

,684

(16,

943,

947)

(5

6,60

1,43

9)

-

468,

234

(4

,663

,468

)

24

,417

,643

,523

2,

651,

393,

117

27

,069

,036

,640

Cum

ulat

ive

effe

ct o

f cha

nge

in

ac

coun

ting

polic

y fo

r inv

ento

ries

(Not

e 4)

-

-

-

40

,298

,498

-

-

-

-

-

-

40,2

98,4

98

7,

542,

469

47,8

40,9

67

Bal

ance

as

at 1

Jan

uary

201

2 - a

s re

stat

ed95

6,32

9,40

7

8,

158,

890,

230

100,

000,

000

15

,247

,385

,852

68

,413

,684

(16,

943,

947)

(5

6,60

1,43

9)

-

468,

234

(4

,663

,468

)

24

,457

,942

,021

2,

658,

935,

586

27

,116

,877

,607

Div

iden

d pa

id (N

ote

32)

-

-

-

(1

,883

,952

,342

)

-

-

-

-

-

-

(1,8

83,9

52,3

42)

(4

85,0

32,2

13)

(2,3

68,9

84,5

55)

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r-

-

-

4,35

6,28

2,55

2

95

,136

,852

5,37

3,97

4

39

,803

,020

604,

591,

494

7,

369,

252

752,

274,

592

5,

108,

557,

144

838,

199,

901

5,94

6,75

7,04

5

Issu

ed o

rdin

ary

shar

e ca

pita

l (N

ote

24)

191,

264,

422

9,34

1,61

8,64

1

-

-

-

-

-

-

-

-

9,

532,

883,

063

116,

100,

008

9,64

8,98

3,07

1

Una

ppro

pria

ted

reta

ined

ear

ning

s tra

nsfe

rred

to

sta

tuto

ry re

serv

e (N

ote

25)

-

-

20

,200

,000

(20,

200,

000)

-

-

-

-

-

-

-

-

-

Bal

ance

as

at 3

1 D

ecem

ber 2

012

1,14

7,59

3,82

9

17,5

00,5

08,8

71

120,

200,

000

17

,699

,516

,062

16

3,55

0,53

6

(11,

569,

973)

(1

6,79

8,41

9)

604,

591,

494

7,

837,

486

747,

611,

124

37

,215

,429

,886

3,

128,

203,

282

40

,343

,633

,168

-

-

-

-

-

-

-

-

The

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

fina

ncia

l sta

tem

ents

.

Ret

aine

d ea

rnin

gs

Con

solid

ated

fina

ncia

l sta

tem

ents

Equi

ty a

ttrib

utab

le to

ow

ners

of t

he C

ompa

ny

Oth

er c

ompo

nent

s of

sha

reho

lder

s' e

quity

Oth

er c

ompr

ehen

sive

inco

me

Thai

Uni

on F

roze

n Pr

oduc

ts P

ublic

Com

pany

Lim

ited

and

its s

ubsi

diar

ies

Stat

emen

t of c

hang

es in

sha

reho

lder

s' e

quity

For t

he y

ear e

nded

31

Dec

embe

r 201

2

(Uni

t: B

aht)

Tota

l oth

er

Issu

ed a

ndco

mpo

nent

s of

Tota

l

fully

pai

d-up

Rev

alua

tion

shar

ehol

ders

'sh

areh

olde

rs'

shar

e ca

pita

lS

hare

pre

miu

mA

ppro

pria

ted

Una

ppro

pria

ted

Sur

plus

on

land

equi

tyeq

uity

Bal

ance

as

at 1

Jan

uary

201

195

6,32

9,40

7

8,15

8,89

0,23

0

89

,000

,000

4,

801,

577,

895

-

-

14

,005

,797

,532

Cum

ulat

ive

effe

ct o

f cha

nge

in

ac

coun

ting

polic

y fo

r inv

ento

ries

(Not

e 4)

-

-

-

27,2

92,7

86

-

-

27

,292

,786

Bal

ance

as

at 1

Jan

uary

201

1 - a

s re

stat

ed95

6,32

9,40

7

8,15

8,89

0,23

0

89

,000

,000

4,

828,

870,

681

-

-

14

,033

,090

,318

Div

iden

d pa

id (N

ote

32)

-

-

-

(1,1

95,3

64,9

96)

-

-

(1,1

95,3

64,9

96)

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r-

-

-

3,

022,

370,

151

-

-

3,

022,

370,

151

Una

ppro

pria

ted

reta

ined

ear

ning

s tra

nsfe

rred

to

st

atut

ory

rese

rve

(Not

e 25

)-

-

11

,000

,000

(1

1,00

0,00

0)

-

-

-

Bal

ance

as

at 3

1 D

ecem

ber 2

011

956,

329,

407

8,

158,

890,

230

100,

000,

000

6,

644,

875,

836

-

-

15

,860

,095

,473

Bal

ance

as

at 1

Jan

uary

201

295

6,32

9,40

7

8,15

8,89

0,23

0

10

0,00

0,00

0

6,61

8,32

2,91

8

-

-

15,8

33,5

42,5

55

Cum

ulat

ive

effe

ct o

f cha

nge

in

ac

coun

ting

polic

y fo

r inv

ento

ries

(Not

e 4)

-

-

-

26,5

52,9

18

-

-

26

,552

,918

Bal

ance

as

at 1

Jan

uary

201

2 - a

s re

stat

ed95

6,32

9,40

7

8,15

8,89

0,23

0

10

0,00

0,00

0

6,64

4,87

5,83

6

-

-

15,8

60,0

95,4

73

Div

iden

d pa

id (N

ote

32)

-

-

-

(1,8

83,9

52,3

42)

-

-

(1,8

83,9

52,3

42)

Tota

l com

preh

ensi

ve in

com

e fo

r the

yea

r -

-

-

2,

806,

252,

517

179,

589,

529

179,

589,

529

2,

985,

842,

046

Issu

ed o

rdin

ary

shar

e ca

pita

l (N

ote

24)

191,

264,

422

9,

341,

618,

641

-

-

-

-

9,

532,

883,

063

Una

ppro

pria

ted

reta

ined

ear

ning

s tra

nsfe

rred

to

st

atut

ory

rese

rve

(Not

e 25

)-

-

20

,200

,000

(2

0,20

0,00

0)

-

-

-

Bal

ance

as

at 3

1 D

ecem

ber 2

012

1,14

7,59

3,82

9

17

,500

,508

,871

12

0,20

0,00

0

7,54

6,97

6,01

1

17

9,58

9,52

9

17

9,58

9,52

9

26,4

94,8

68,2

40

-

-

-

-

-

-

The

acco

mpa

nyin

g no

tes

are

an in

tegr

al p

art o

f the

fina

ncia

l sta

tem

ents

.

Sepa

rate

fina

ncia

l sta

tem

ents

shar

ehol

ders

' equ

ity

Ret

aine

d ea

rnin

gs

Oth

er c

ompo

nent

s of

Oth

er c

ompr

ehen

sive

inco

me


Thai Union Frozen Products Public Company Limited and its subsidiaries Notes to consolidated financial statements For the year ended 31 December 2012

1. General 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, printing and pet food businesses.

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, and

wholesaling, 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,

Amphur Muang, Samutsakorn. The Company has 7 branches in Bangkok and

Samutsakorn.

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

2012 2011

Percent Percent

Held by the Company

Thai Union Manufacturing Co., Ltd. Manufacturer & exporter of Thailand 90.08 90.08

canned tuna and pet food

Songkla Canning Pcl. Manufacturer & exporter of Thailand 90.44 90.44

canned seafood

Thai Union Seafood Co., Ltd. Manufacturer & exporter of Thailand 51.00 51.00

frozen shrimp

T-Holding Co., Ltd. Distributor Thailand 90.00 90.00

Thai Union Feedmill Co., Ltd. Manufacturer & distributor of Thailand 51.00 51.00

animal feeds

Thai Union Graphic Co., Ltd. Printing manufacturer Thailand 74.00 74.00

Thai Union International, Inc. (TUI) Holding company USA 100.00 100.00

PT Juifa International Foods Manufacturer & distributor of Indonesia 88.78 88.78

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

Tri-Union Frozen Products, Inc. (TUFP) Importer and distributor USA 82.00 82.00

(82% held by TUI) of 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)

Canadian Pet Nuttrition, ULC Distributer of pet food Canada 100.00 100.00

(100% held by USPN)




2012 2011

Percent Percent

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.)

TCM Fishery Co., Ltd. Shrimp breeding and rearing Thailand 38.25 -

(75% held by Thai Union Feedmill

Co., Ltd.)

TMK Farm Co., Ltd. Shrimp breeding and rearing Thailand 40.80 -


Co., Ltd.)

TMAC Co., Ltd. Shrimp breeding and rearing Thailand 26.01 -


Co., Ltd.)

Siam Fishing Pte. Ltd. General wholesale trade Singapore - 90.08

(100% held by Thai Union (including importers

Manufacturing Co., Ltd.) and exporters)

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% held by Thai Union

EU Seafood 1 SA)




2012 2011

Percent Percent

Thai Union France Holding 2 SAS Holding company France 100.00 100.00

(100% held by Thai Union

EU Seafood 1 SA)

MW Brands SAS Headquarter activity France 100.00 100.00

(100% held by Thai Union France

Holding 2 SAS)

MW Brands Seychelles Limited Exporter of canned Tuna Seychelles 100.00 100.00

(100% held by MW Brands SAS)

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 2 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 MW Brands SAS) canned tuna

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




2012 2011

Percent Percent

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)

During the year, Thai Union Feedmill Co., Ltd. established TCM Fishery Co., Ltd., TMK

Farm Co., Ltd. and TMAC Co., Ltd. to engage in the shrimp breeding and rearing, as

mentioned in Note 13.

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. New accounting standards 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

Financial Reporting Standard:

TFRS 8 Operating Segments

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 adopted TAS 12 and SIC 21 and SIC 25. For TAS 20 (revised 2009),

TAS 21 (revised 2009), TFRS 8 and SIC 10, 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.

In addition, the Federation of Accounting Professions has issued Notification No.

30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the

use of accounting treatment guidance and accounting standard interpretations as

follows.

Effective date Accounting Treatment Guidance for Transfers of Financial Assets 1 January 2013 Accounting Standard Interpretation: SIC 29 Service Concession Arrangements: Disclosures 1 January 2014

Financial Reporting Standard Interpretations: TFRIC 4 Determining whether an Arrangement

contains a Lease 1 January 2014

TFRIC 12 Service Concession Arrangements 1 January 2014 TFRIC 13 Customer Loyalty Programmes 1 January 2014


The management of the Company has assessed the effect of these standards and

believes that SIC 29 and TFRIC 12 are not relevant to the business of the Company.

Management is still evaluating the first-year impact to the financial statements of the

adoption of Accounting Treatment Guidance for Transfers of Financial Assets, TFRIC 4

and TFRIC 13 and has yet to reach a conclusion.

4. Change in accounting policies

4.1 In 2012, the Company and its subsidiaries have changed their accounting policy on

land, from presenting it at cost basis to presenting it under a revaluation method to

reflect the market value of such assets.

The amounts of adjustments affecting the financial statements as at 31 December 2012

resulted in property, plant and equipment increase of Baht 907 million (Separate financial

statements: Baht 224 million), deferred tax liabilities increase of Baht 181 million (Separate

financial statements: Baht 45 million) and other components of shareholders' equity

increase of Baht 726 million (Separate financial statements: Baht 179 million).

4.2 In 2012, the Company and its subsidiaries have changed their accounting policy on

inventories for raw material, from first-in, first-out to average cost method which is more

suitable for the businesses of the group. The change in the accounting policy on

inventories for raw material has been applied retrospectively as though the financial

statements had originally been prepared using the average cost. The cumulative effect

of the changes in the accounting policy has been separately presented in the

statements of changes in shareholders’ equity.

The amounts of adjustments affecting the statements of financial position as at

31 December 2011, and 1 January 2011 and the income statements for the year

ended 31 December 2011 are summarised below.

(Unit: Thousand Baht)

Consolidated

financial statements

31 December

2011

1 January

2011

Statements of financial position

Increase (decrease) in inventories 47,842 (286)

Increase (decrease) in unappropriated retained earnings 40,299 (2,385)

Increase in non-controlling interest of the subsidiaries 7,543 2,009



Separate financial statements

31 December

2011

1 January

2011

Statements of financial position

Increase in inventories 26,553 27,293

Increase in unappropriated retained earnings 26,553 27,293


Consolidated

financial

statements

Separate

financial

statements


Income and comprehensive income statements

Decrease (increase) in cost of sales 48,127 (740)

Increase (decrease) in basic earnings per share

(Baht) 0.05 (0.001)

5. Significant accounting policies

5.1 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.

5.2 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.

5.3 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.

5.4 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, ingredients and packaging are valued at cost (average method).

5.5 Investments

a) Investments in available-for-sale securities are stated at fair value. Changes in the

fair value of these securities are recorded in other comprehensive income, 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.


In the event the Company reclassifies investments from one type to another, such

investments will be readjusted to their fair value as at the reclassification date. The

difference between the carrying amount of the investments and the fair value on the

date of reclassification are recorded in profit or loss or recorded as other components

of shareholders’ equity, depending on the type of investment that is reclassified.

5.6 Property, plant and equipment and Depreciation

Land is stated at cost or revalued amount. Land improvement, plant and equipment are

stated at cost less accumulated depreciation and allowance for impairment of assets (if any).

Land is initially recorded at cost on the acquisition date, and subsequently revalued by

an independent professional appraiser to fair values of land. Revaluations are made

with sufficient regularity to ensure that the carrying amount does not differ materially

from fair value at the end of reporting period.

Differences arising from the revaluation are dealt with in the financial statements as

follows:

- When an asset’s carrying amount is increased as a result of a revaluation of the

Company’s assets, the increase is credited directly to the other comprehensive

income and the cumulative increase is recognised equity under the heading of

“Revaluation surplus”. However, a revaluation increase is recognised as income

to the extent that it reverses a revaluation decrease in respect of the same asset

previously recognised as an expense.

- When an asset’s carrying amount is decreased as a result of a revaluation of the

Company’s assets, the decrease is recognised in profit or loss. However, the

revaluation decrease is charged to the other comprehensive income to the extent

that it does not exceed an amount already held in “Revaluation surplus” in

respect of the same asset.

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 - 5 - 40 years

Machinery and equipment - 3 - 20 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 is included in profit or loss when the asset is derecognised.

5.7 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.

5.8 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, 40 years

Copyrights - 3, 5, 10 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. The

assessment of indefinite useful lives of the intangible assets is reviewed annually.

5.9 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.

5.10 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.


5.11 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.

5.12 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.

5.13 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.

Leases of property, plant or equipment which do not transfer substantially all the risks

and rewards of ownership are classified as operating leases. Operating lease

payments are recognised as an expense in profit or loss on a straight line basis over

the lease term.

5.14 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.


5.15 Impairment of assets

At the end of each reporting period, the Company and its subsidiaries perform

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 recognised an impairment loss in profit or loss.

5.16 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.


Actuarial gains and losses arising from post-employment benefits are recognised

immediately in other comprehensive income.

The defined benefits liability comprises the present value of the defined benefit

obligation less unrecognised past service cost and unrecognised actuarial gains or

losses.

For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company and its

subsidiaries elected to recognised 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 2011.

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.

5.17 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.

5.18 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. 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.

5.19 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.

6. Significant accounting judgments and estimates

The preparation of financial statements in conformity with financial reporting standards

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 from these estimates.

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 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 of the management.

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.

The Company and its subsidiaries measure land at revalued amounts. Such amounts are determined by the independent valuer using the market approach for land. The valuation involves certain assumptions and estimates.

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 for deductible temporary differences and unused

tax losses to the extent that it is probable that taxable profit will be available against

which the temporary differences and losses 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 taxable profits.

Post-employment benefit under defined benefit plans

The obligation under the defined benefit plan 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.

7. Cash and cash equivalents



2012 2011 2012 2011

Cash 4,410 3,398 1,282 1,572

Bank deposits 1,387,110 899,122 61,053 54,336

Bill of exchange 8,525 - - -

Total 1,400,045 902,520 62,335 55,908

As at 31 December 2012, bank deposits in saving accounts and bill of exchange

carried interests between 0.10% and 2.47% per annum (2011: between 0.17% and

1.93% per annum).


8. Trade and other receivables



2012 2011 2012 2011

Trade receivables - related parties

Aged on the basis of due dates

Not yet due 48,963 21,050 1,508,041 1,134,315

Past due

1 - 30 days 6,149 40,341 712,228 534,394

31 - 60 days - - 33,971 358,201

61 - 90 days - - - 447,824

Total trade receivables - related parties 55,112 61,391 2,254,240 2,474,734

Trade receivables - unrelated parties Aged on the basis of due dates

Not yet due 9,322,154 9,222,755 1,448,326 1,226,524

Past due 1 - 30 days 1,573,063 1,421,944 215,571 170,386

31 - 60 days 397,745 210,035 41,023 5,791

61 - 90 days 232,978 102,888 319 1,560

91 - 120 days 90,924 58,582 358 -

121 - 180 days 56,859 37,279 226 -

181 - 365 days 68,593 66,298 1,028 -

Over 365 days 174,903 164,281 24,719 20,915

Total trade receivables - unrelated

parties 11,917,219 11,284,062 1,731,570 1,425,176

Total trade receivables 11,972,331 11,345,453 3,985,810 3,899,910

Less: Allowance for doubtful accounts (251,190) (250,793) (25,616) (25,518)

Total trade receivables - net 11,721,141 11,094,660 3,960,194 3,874,392

Other receivables Interest receivables - related parties - - 87,115 184,652 Interest receivable 156 576 27 -

Accrued income 150,041 26,688 137,035 11,668

Advance payment 46,820 38,867 12,022 17,475

Total other receivables 197,017 66,131 236,199 213,795

Total trade and other receivables - net 11,918,158 11,160,791 4,196,393 4,088,187

As at 31 December 2012, certain trade accounts receivable of three overseas

subsidiaries have secured their credit facilities as mentioned in Note 17.

Insurance claim receivable

On 11 February 2012, there was a fire incident in shrimp section of the Company’s

plant located in Samutsakorn province, which has no effect to other production lines.

The Company assessed the damage caused by the fire incident and found damage to

inventories with costs amounting to Baht 261 million and damage to building and


machineries with total net book value of Baht 123 million. However, the Company has

insurance coverage for direct asset damage and filed a claim with the insurance

company. In February 2012, the insurer’s surveyor conducted an assessment for the

damage in order to quantify the indemnification. The Company received a

compensation payment of Baht 110 million and Baht 165 million and Baht 135 million

on 23 March 2012 and 28 June 2012, and 28 February 2013, respectively. The

Company recorded insurance recovery income amounting to Baht 410 million by

offsetting it with the loss from the fire incident in the income statement for the year

ended 31 December 2012.

9. Related party transactions

During the years, the Company and its subsidiaries had significant business

transactions with related parties. Such transactions are summarised below.

(Unit: Million Baht)

Consolidated Separate

financial statements financial statements Transfer Pricing Policy

2012 2011 2012 2011

Transactions with subsidiaries:

(Eliminated from consolidated financial statements)

Sales - - 10,061 10,348 Cost plus margin

Dividend income - - 1,404 1,178 As declared

Interest income - - 987 1,049 1.22 - 6.25% per annum

(2011: 2.55 - 6.40% per

annum)

Other income - - 62 41 Near market price

Purchases of goods - - 1,827 1,115 Cost plus margin

Interest expense - - - 3 2.85% per annum (2011:

2.50% per annum)

Management fee - - 54 52 Contract price

Other expenses - - 105 87 Near market price

Transactions with associates:

Sales 37 26 15 7 Cost plus margin

Dividend income 18 35 18 35 As declared

Other income 20 21 - - Near market price

Purchases of goods 193 9 182 - Cost plus margin

Transactions with related companies: Sales 1,099 1,064 244 238 Cost plus margin

Purchases of goods 3,794 4,775 2,802 3,910 Cost plus margin

Transportation expense 48 44 7 8 Near market price

Expenses relating to assets 133 132 25 54 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

shareholders and directors. During the year 2012, insurance premiums paid through

that company amounted to Baht 84 million (2011: Baht 52 million).


The relationships between the Company and the related parties are summarised below.

List of related companies Relationship

Songkla Canning Pcl. Subsidiary Thai 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) US Pet Nutrition, LLC (USPN) Subsidiary (Held by subsidiary) Canadian Pet Nutrition, ULC 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) TCM Fishery Co., Ltd. Subsidiary (Held by subsidiary) TMK Farm Co., Ltd. Subsidiary (Held by subsidiary) TMAC 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) Thai Union France Holding 2 SAS Subsidiary (Held by subsidiary) Etablissements Paul Paulet SAS Subsidiary (Held by subsidiary) Irish Seafood Investments Limited Subsidiary (Held by subsidiary)


List of related companies Relationship

John West Holland BV Subsidiary (Held by subsidiary) Lucky Union Foods Co., Ltd. Associated company Biz Dimension Co., Ltd. Associated company Pakfood Pcl. (PPC) Associated company Avanti Feeds 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. Shareholders/ Director related to director

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

Thai Union Properties 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. Common major shareholders/ Director related

to director

Geminai Watercrafts Co., Ltd. Shareholders/ Director related to director

Miss Rungtiwa Boonmechote Relative of director

Pae Parichart Boonmechote Relative of director


The balances of the accounts as at 31 December 2012 and 2011 between the Company and those related parties are as follows:



financial statements financial statements

2012 2011 2012 2011

Trade and other receivables - related parties (Note 8)

Subsidiaries - - 2,326,986 2,650,176

Associated companies 22,496 4,622 1,051 1,056

Related companies 32,616 56,769 13,318 8,154

Total trade and other receivables - related parties 55,112 61,391 2,341,355 2,659,386

Trade and other payables - related parties (Note 18)

Subsidiaries - - 337,790 220,906

Associated companies 12,305 1,584 11,367 48

Related companies 177,071 64,724 84,067 28,636

Total trade and other payables - related parties 189,376 66,308 433,224 249,590

Short-term loans to subsidiaries


Thai Union Graphic Co., Ltd. - - 80,000 80,000

Thai Union International, Inc. - - 1,337,041 -

Total - - 1,417,041 80,000

Long-term loans to subsidiaries


Thai Union Investment Holding Co., Ltd. - - 20,453,595 15,207,249

Thai Union International, Inc. - - 676,118 2,240,991

Total - - 21,129,713 17,448,240

Less: Current portion

Thai Union International, Inc. - - - (440,335)

Net - - 21,129,713 17,007,905

During 2012, movements of loans to/from related parties were as follows:



Balance as at During the year Balance as at

1 January 2012 Increase Decrease Revaluation 31 December 2012

Short-term loans to subsidiaries

Thai Union Manufacturing Co., Ltd. - 70,000 (70,000) - -

Songkla Canning Pcl. - 66,450 (66,450) - -

Thai Union Graphic Co., Ltd. 80,000 - - - 80,000

Thai Union International, Inc. - 1,515,507 (158,200) (19,866) 1,337,041

Thai Union Investment Holding Co., Ltd. - 756,200 (756,200) - -

80,000 2,407,757 (1,050,850) (19,866) 1,417,041




Balance as at During the year Balance as at

1 January 2012 Increase Decrease Revaluation 31 December 2012

Long-term loans to subsidiaries

Thai Union Investment Holding Co., Ltd. 15,207,249 5,386,570 - (140,224) 20,453,595

Thai Union International, Inc. 2,240,991 284,760 (1,825,932) (23,701) 676,118

17,448,240 5,671,330 (1,825,932) (163,925) 21,129,713

Short-term loans from subsidiaries

Thai Union Manufacturing Co., Ltd. - 76,290 (76,290) - -

Songkla Canning Pcl. - 45,150 (45,150) - -

- 121,440 (121,440) - -

Directors and management’s benefits

During the years ended 31 December 2012 and 2011, the Company and its

subsidiaries had employee benefits expenses payable to their directors and

management as follows:


Consolidated financial

statements

Separate financial

statements

2012 2011 2012 2011

Short-term employee benefits 725 614 73 78

Post-employment benefits 33 17 4 4

Other long-term benefits 4 5 - -

Termination benefits 18 45 - -

Total 780 681 77 82


10. Inventories


Consolidated financial statements

Reduce cost to net

Cost realisable value Inventories - net

2012 2011 2012 2011 2012 2011

(Restated) (Restated)

Finished goods 16,449,282 13,932,395 (473,601) (251,014) 15,975,681 13,681,381

Work in process 137,864 66,796 (328) (328) 137,536 66,468

Raw materials 10,752,836 7,095,832 (172,720) (112,276) 10,580,116 6,983,556

Ingredient and

packaging 1,638,343 1,477,321 (90,815) (70,225) 1,547,528 1,407,096

Goods in transit 617,779 542,705 (12,995) (9,206) 604,784 533,499

Spare parts 4,445,837 3,507,796 (1,003) - 4,444,834 3,507,796

Total 34,041,941 26,622,845 (751,462) (443,049) 33,290,479 26,179,796



Reduce cost to net

Cost realisable value Inventories - net

2012 2011 2012 2011 2012 2011

(Restated) (Restated)

Finished goods 1,690,448 1,248,738 (58,080) (45,032) 1,632,368 1,203,706

Work in process 18,553 21,529 - - 18,553 21,529

Raw materials 2,525,137 1,771,557 (4,051) (43,817) 2,521,086 1,727,740

Ingredient and

packaging 309,401 260,433 (10,866) (13,463) 298,535 246,970

Goods in transit 377,517 421,724 (1,003) - 376,514 421,724

Spare parts 23,974 23,115 - - 23,974 23,115

Total 4,945,030 3,747,096 (74,000) (102,312) 4,871,030 3,644,784

Three overseas subsidiaries have mortgaged the certain inventories of that company to

financial institutions to secure its credit facilities as mentioned in Note 17.

During the current year, the Company has written off damaged inventories for the net

book values amounting to Baht 261 million from a fire incident in one section of the

Company's plant located in Samutsakorn province, as mentioned in Note 8.


During the current year, the Company and its subsidiaries have changed its accounting

policy on inventories for raw material, from first-in, first-out to average cost as


11. Restricted bank deposits

These represent fixed deposits pledged with financial institution to secure credit

facilities.

12. Investments in associates 12.1 Details of associates:



Nature Country of Carrying amounts

Company's name of business incorporation Shareholding percentage Cost based on equity method

2012 2011 2012 2011 2012 2011

(%) (%)

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 37,500 329,523 298,386

Biz Dimension Co., Ltd. E-Commerce under website Thailand 20.00 20.00 1,010 1,010 21,934 19,711

Avanti Thai Aqua Feeds Private Manufacturer & distributor India - 50.00 - 27,721 - 27,721

Limited of animal feeds

Avanti Feeds Limited Manufacturer & exporter of India 25.12 - 117,064 - 120,816 -

animal feeds and shrimp

products

Pakfood Pcl. Manufacturer & distributed of Thailand 49.97 - 773,460 - 734,987 -

frozen foods and aquatie

animals

Investments in associates, directly held by subsidiaries

Century Trading (Shanghai) Co., Ltd. Importer & exporter of food The People's 45.04 45.04 75,900 75,900 34,916 25,265

(50% held by Thai Union products Republic of China

Manufacturing Co., Ltd.)

TN Fine Chemical Co., Ltd. Manufacturer & exporter Thailand 44.14 44.14 44,070 44,070 51,256 44,894

(49% held by Thai Union of by-products from

Manufacturing Co., Ltd.) seafoods

Moresby International Holdings Inc. Holding in fishing British Virgin 30.03 30.03 96,981 96,981 96,981 96,981

(33% held by Thai Union company Island

Manufacturing Co., Ltd.)

LDH (La Doria) Limited Distributor of food products United 20.00 20.00 95,940 95,940 415,860 411,010

(20% held by MW Brands) Kingdom

1,241,925 379,122 1,806,273 923,968



Country of Shareholding

Company's name Nature of business incorporation percentage Cost

2012 2011 2012 2011

(%) (%)

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 - 27,721

Avanti Feeds Limited Manufacturer & exporter of animal India 25.12 - 117,064 -

feeds and shrimp products

Pakfood Pcl. Manufacturer & distributed of frozen foods and Thailand 49.97 - 773,460 -

aquatie animals animals

929,034 66,231


12.2 Share of profit/loss and dividend received

During the years, the Company and its subsidiaries have recognised its share of

profit/loss from investments in associates in the consolidated financial statements and

dividend income in the separate financial statements as follows:


Consolidated


Separate


Company’s name

Share of profit/loss from

investments in associates

during the year

Dividend received

during the year

2012 2011 2012 2011

Lucky Union Foods Co., Ltd. 38,637 38,287 7,500 35,000

Biz Dimension Co., Ltd. 4,623 1,801 2,400 -

Century Trading (Shanghai)

Co., Ltd. 9,651 6,927 - -

TN Fine Chemicals Co., Ltd. 6,362 6,894 - -

LDH (La Doria) Limited 37,185 29,821 - -

Avanti Feeds Limited 11,844 - 8,092 777

Pakfood Pcl. (38,473) - - -

Total 69,830 83,730 17,992 35,777

12.3 Fair value investments in listed associated company

In respect of investment in associated company that is listed company on the Stock

Exchange of Thailand, its fair value is as follows:

(Unit: Million Baht) Company’s name Fair values as at 31 December 2012

Pakfood Pcl. 749.5


12.4 Summarised financial information of associates

Financial information of associates is summarised below.


Company’s name

Paid-up capital as at

31 December

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

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

Lucky Union Foods Co., Ltd. Baht 150

million

Baht 150

million

2,619 1,726 1,002 560 1,822 1,297 155 153

Biz Dimension Co., Ltd. Baht 25

million

Baht 25

million

61 49 11 6 103 74 23 9

Avanti Thai Aqua Feeds - Rupee - 71 - 24 - 1 - 1

Private Limited 76.9

million

Avanti Feeds Limited Rupee - 1,242 - 470 - 3,280 - 158 -

90.8

million

Pakfood Pcl. Baht 300

million

Baht 300

million

3,550 3,817 1,905 2,099 6,642 7,244 (77) 190

Century Trading (Shanghai) USD 4 USD 4 94 55 25 4 217 225 19 14

Co., Ltd. million million

TN Fine Chemicals Co., Ltd. Baht 90

million

Baht 90

million

110 99 6 8 91 100 13 14

Moresby International Holdings USD 9.4 USD 9.4 295 295 - - - - - -

Inc. million million

LDH (La Doria) Limited GBP 1 GBP 1 3,949 3,758 2,857 2,796 12,422 11,567 450 363

million million

On 20 April 2012, the Company purchased 12 million ordinary shares of Pakfood

Public Company Limited (PPC) (or 40% of the total 30 million issued and paid up

shares of PPC) at a purchase price of Baht 51 per share, or a total of Baht 612 million.

On 18 December 2012, the Company purchased 3 million ordinary shares of Pakfood

Public Company Limited (PPC) at a purchase price of Baht 54 per share, or a total of

Baht 161 million. As at 31 December 2012, the Company hold 15 million ordinary

shares of PPC or 49.97% of the total issued and paid up shares of PPC. The Company

has no control in PPC, therefore the Company does not included the financial

statements of PPC in the Company's consolidated financial statements.


During the third quarter of the current year, the Company sold investment in Avanti

Thai Aqua Feeds Private Limited by swapping ordinary shares of Avanti Feeds Limited,

and thus the investment proportion in Avanti Feeds Limited increased from 14.99% to

25.12%. The Company changed the recording of the investment in Avanti Feeds

Limited from other long-term investment to investment in associated company. Gain on

ordinary share swap, totaling Baht 54.8 million, is included in the income statement for

the year ended 31 December 2012.

Investments in some associates were determined on the basis of financial information

provided by those companies’ managements. These were unaudited by their external

auditors due to time constraints. However, the values of the investments in associates

are immaterial.

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

2012 2011 2012 2011 2012 2011 2012 2011

% %

Songkla Canning Pcl. Baht 360 million Baht 360 million 90.44 90.44 1,379,791 1,379,791 219,759 569,744

Thai Union Manufacturing Baht 300 million Baht 300 million 90.08 90.08 1,212,172 1,212,172 837,786 270,254

Co., Ltd.

Thai Union Seafood Co., Ltd. Baht 300 million Baht 300 million 51.00 51.00 189,316 189,316 140,760 -

T-Holding Co., Ltd. Baht 70 million Baht 70 million 90.00 90.00 20,699 20,699 19,530 3,150

Thai Union Feedmill Co., Ltd. Baht 500 million Baht 500 million 51.00 51.00 255,000 255,000 137,700 307,020

Thai Union Graphic Co., Ltd. Baht 40 million Baht 40 million 74.00 74.00 45,331 45,331 7,400 5,180

Thai Union International, Inc. USD 61.6 million USD 13.1 million 100.00 100.00 1,977,465 482,170 - -

(TUI)

PT Juifa International Foods USD 2.7 million USD 2.7 million 88.78 88.78 82,972 82,972 40,817 22,884

Thai Union Investment Holding

Co., Ltd. (TUIH) EUR 222 million EUR 22 million 100.00 100.00 8,900,256 925,256 - -

Total 14,063,002 4,592,707 1,403,752 1,178,232

Less: Allowance for impairment of investments - (26,136)

Net 14,063,002 4,566,571

On 8 May 2012, Thai Union Seafood Co., Ltd. registered the decrease of its registered

share capital from Baht 400 million (40 million ordinary shares of Baht 10 each) to

Baht 300 million (30 million ordinary shares of Baht 10 each) with the Ministry of

Commerce, by canceling 10 million registered shares that had yet to be allocated.


During the current year, the Company additionally invested EUR 200 million or

Baht 7,975 million in Thai Union Investment Holding Co., Ltd.

During the current year, Thai Union France Holding 2 SAS additionally invested

EUR 61 million or Baht 2,363 million in MW Brands SAS (par value of Baht 473 million

and share premium of Baht 1,890 million).

During the current year, Thai Union Investment Holding Co., Ltd. additionally invested

EUR 210 million in Thai Union EU Seafood 1 S.A. through the conversion of a part of

the inter-company loan.

During the current year, the Company additionally invested USD 48.5 million or

Baht 1,495.3 million in Thai Union International, Inc.

During the current year, Thai Union Feedmill Co., Ltd. formed TCM Fishery Co., Ltd., in

which it holds 5.25 million ordinary shares (or 75% of the 7 million issued and paid-up

shares of such company) with a par value of Baht 10 per share, fully paid-up, for a total

payment of Baht 52.5 million.

During the current year, Thai Union Feedmill Co., Ltd. formed TMK Farm Co., Ltd., in

which it holds 12 million ordinary shares (or 80% of the 15 million issued and paid-up

shares of such company) with a par value of Baht 10 per share, fully paid-up, for a total

payment of Baht 120 million.

During the current year, Thai Union Feedmill Co., Ltd. formed TMAC Co., Ltd., in which

it holds 28.56 million ordinary shares (or 51% of the 56 million issued and paid-up

shares of such company) with a par value of Baht 10 per share, 25% paid up, for a

total payment of Baht 71.4 million.

On 20 February 2012, Siam Fishing Pte Ltd., a subsidiary of Thai Union Manufacturing

Co., Ltd. was liquidated.

On 24 December 2012, Thai Union Eu Seafood 2 S.A., a subsidiary of Thai Union Eu

Seafood 1 S.A. was liquidated and merged with Thai Union Eu Seafood 1 S.A., the

common subsidiary of Thai Union Investment Holding Co., Ltd.

On 28 December 2012, Board of Directors meeting No. 1/2013 of Thai Union

Manufacturing Co., Ltd. passed resolution on forming New Frontier Foods Co., Ltd., in

which it holds 1 million ordinary shares (100% of the 1 million issued and paid-up

shares of such company) with a par value of Baht 10 per share, 25% paid up, for a

total payment of Baht 2.5 million. The said company registered in forming with the

Ministry of Commerce on 21 January 2013.

During the current year, the Company has reversed allowance for impairment loss of

investment in subsidiary in full amount.


14. Other long-term investments (Unit: Thousand Baht)


2012 2011

Cost Fair value Cost Fair value

Other long-term investments

Available-for-sale securities - Unit trusts 46,104 31,653 50,646 33,677

Unrealised loss on changes in the

value of investments value of investments (14,451) (16,969)

Total available-for-sale securities 31,653 33,677

Other investments

- Ordinary shares 664 36,628

Total other long-term investments 32,317 70,305



2012 2011 Other long-term investments Other investments - ordinary shares - 34,579

During the current year, the Company swapped ordinary shares of Avanti Thai Aqua Feeds

Private Limited with those of Avanti Feeds Limited, and thus the investment proportion in

Avanti Feeds Limited increased from 14.99% to 25.12%. The Company also changed the

recording of the investment in Avanti Feeds Limited from other long-term investment to

investment in associated company, as mentioned in Note 12.

15. Property, plant and equipment (Unit: Thousand Baht)


Revaluation

basis Cost basis

Buildings Assets under

Land and and Machinery Furniture installation and

land building and and Motor under

improvement improvement equipment fixtures vehicles construction Total

Cost/Revalued amount

1 January 2011 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




Revaluation

basis Cost basis


Land and and Machinery Furniture installation and

land building and and Motor under


Additions 180,895 16,807 457,234 70,393 55,859 2,927,354 3,708,542

Disposals/write off (29) (326,196) (246,835) (32,213) (123,452) (60,502) (789,227)

Transfer to other assets - - - - - (251,817) (251,817)

Revaluation 907,217 - - - - - 907,217

Transfer in (out) 35,385 896,941 1,419,151 16,902 74,667 (2,443,046) -

Translation adjustment (2,956) (38,582) (161,528) (5,565) (4,579) (15,575) (228,785)

31 December 2012 2,791,812 7,745,933 17,984,435 776,351 717,222 2,071,719 32,087,472

Accumulated depreciation

1 January 2011 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

Depreciation for the year 4,964 310,046 1,334,920 35,735 60,833 - 1,746,498


write off - (182,419) (213,269) (31,383) (117,972) - (545,043)

Translation adjustment (74) (15,741) (69,786) (3,920) (3,676) - (93,197)

31 December 2012 32,408 2,923,381 10,262,056 482,157 424,198 - 14,124,200

Allowance for loss on impairment of assets

1 January 2011 - 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

Decrease during the year - (28,703) - - - - (28,703)

Translation adjustment - - (1,934) - - - (1,934)

31 December 2012 - 36,923 3,080 - - - 40,003

Net book value

31 December 2011 1,643,782 4,319,842 7,301,208 245,109 229,714 1,915,305 15,654,960

31 December 2012 2,759,404 4,785,629 7,719,299 294,194 293,024 2,071,719 17,923,269

Depreciation for the years

2011 (Baht 1,446 million include in manufacturing cost and the balances in selling and administrative expenses) 1,551,699

2012 (Baht 1,671 million include in manufacturing cost and the balances in selling and administrative expenses) 1,746,498




Revaluation

basis Cost basis


and Machinery Furniture installation and

Land building and and Motor under


Cost /Revalued amount

1 January 2011 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

Additions - - 289,024 5,681 26,647 586,240 907,592

Disposals/write off - (302,120) (48,371) (13) (29,242) (37,577) (417,323)

Revaluation 224,487 - - - - - 224,487

Transfer in (out) 13,470 309,553 128,842 25,827 17,359 (495,051) -

31 December 2012 980,327 2,021,427 2,475,199 94,636 160,026 494,462 6,226,077

Accumulated depreciation

1 January 2011 - 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


write off - - (7,022) (227) (7,851) - (15,100)

31 December 2011 - 705,513 1,393,301 42,126 100,062 - 2,241,002

Depreciation for the year - 85,317 228,450 11,667 9,830 - 335,264


write off - (166,403) (41,717) (12) (27,899) - (236,031)

31 December 2012 - 624,427 1,580,034 53,781 81,993 - 2,340,235

Allowance for loss on impairment of assets

1 January 2011 - 32,371 - - 3,483 - 35,854

Increase - 33,255 - - - - 33,255

(Decrease) - - - - (3,483) - (3,483)

31 December 2011 - 65,626 - - - - 65,626

Decrease during the year - (29,365) - - - - (29,365)

31 December 2012 - 36,261 - - - - 36,261

Net book value

31 December 2011 742,370 1,242,855 712,403 21,015 45,200 440,850 3,204,693

31 December 2012 980,327 1,360,739 895,165 40,855 78,033 494,462 3,849,581

Depreciation for the years

2011 (Baht 255 million include in manufacturing cost and the balances in selling and administrative expenses) 272,539

2012 (Baht 302 million include in manufacturing cost and the balances in selling and administrative expenses) 335,264


As breakdown of the land carried on the revaluation basis as at 31 December 2012 is as follows:

(Unit: Thousand Baht) Consolidated

financial statement Separate

financial statement Historical cost 1,509,815 742,370 Surplus from revaluation 907,217 224,487 Revaluated amount 2,417,032 966,857

As at 31 December 2012, the Company and its subsidiaries had equipment under

finance lease agreements with net book values amounting to Baht 520 million (2011:

Baht 373 million).

As at 31 December 2012, 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

Baht 5,767 million (2011: Baht 5,189 million).

During the current year, the Company has written off damaged assets by Baht 123 million

for the net book values of damaged assets from a fire incident in one section of the

Company’s plant located in Samutsakorn province, as mentioned in Note 8.

In 2012, the Company and its subsidiaries have changed their accounting policy for

land, from presenting in at a cost basis to presenting it under a revaluation method to

reflect the market value, as mentioned in Note 4.

As at 31 December 2012, an overseas subsidiary mortgaged some buildings and

equipment of that company to financial institution to secure its credit facility, as


16. Intangible assets (Unit: Million Baht)


Covenant

Customer not to Computer Distributor

Licences Trademark Patents relationships complete software relationships Others Total

Cost

At 1 January 2011 252 12,837 36 127 13 249 225 2 13,741

Additions - 1 - - - 37 - 1 39

Disposal/write off - - (36) - - - - - (36)

Translation adjustment 12 376 - 7 - 3 7 - 405

At 31 December 2011 264 13,214 - 134 13 289 232 3 14,149

Addition - 1 - - - 233 - - 234

Disposal/write off - - - - - (5) - - (5)

Translation adjustment 3 (164) - (5) - (4) (3) - (173)

31 December 2012 267 13,051 - 129 13 513 229 3 14,205




Covenant

Customer not to Computer Distributor

Licences Trademark Patents relationships complete software relationships Others Total

Amortisation

At 1 January 2011 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

Amortisation 12 2 - 13 - 101 16 - 144

Translation adjustment - (9) - (4) - (1) - - (14)

At 31 December 2012 39 274 - 122 13 277 25 - 750

Impairment

At 1 January 2011 - 174 - - - - - - 174

Translation adjustment - 5 - - - - - - 5

At 31 December 2011 - 179 - - - - - - 179

Translation adjustment - (2) - - - - - - (2)

At 31 December 2012 - 177 - - - - - - 177

Net book value

At 31 December 2011 237 12,754 - 21 - 112 223 3 13,350

At 31 December 2012 228 12,600 - 7 - 236 204 3 13,278

(Unit: Million Baht) Separate financial

statements

Computer software

Cost At 1 January 2011 9.0

Additions 0.7

At 31 December 2011 9.7

Additions 1.5


Amortisation At 1 January 2011 7.5

Amortisation 0.5


Amortisation 0.3


Net book value



As at 31 December 2012, some trademark “Children of the sea” was used as collateral

of credit facilities of an overseas subsidiary as mentioned in Note 17.


17. 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 34.1.

Tri-Union Frozen Products, Inc. (TUFP) entered into an amended and restated credit

facilities agreement with Bank of America N.A. (BOA). The TUFP credit facility

provides for a USD 85 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 USD 15 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 USD 115 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 USD 140 million through the

15 October 2013 expiration date, with other terms remaining unchanged from the initial

TUFP Credit Agreement. On 28 September 2012, TUFP amended the TUFP Credit

Agreement No. 6 with BOA to increase the credit line to USD 160 million through

October 2012 to February 2013. The Additional Revolving Loans shall bear interest at

LIBOR plus 3% per annum.

As at 31 December 2012, the balance under the credit facility was USD 100 million

(2011: USD 126 million) at interest rate between 2.21% to 4.25% per annum and

(2011: between 2.28% to 4.25% per annum) actual unused availability, which is based

upon substantially all of the collateralized assets, was approximately USD 36 million.


TUFP is subject to certain financial covenants including interest coverage ratio and

leverage coverage ratio and others. As at 31 December 2012, TUFP determined it was

in compliance with these covenants.

On 11 March 2011, Tri-Union Seafoods, LLC (Tri-U) entered into an amended revolving

credit facility agreement with BOA. The credit facility, which expires on 11 March 2014,

provides for borrowings and the issuance of letters of credit up to USD 95 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% or 2.25% per annum, the

bank's prime rate, or the bank’s prime rate plus 1.00% 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 BOA to incorporate the "Chicken of the Sea" trademark as

eligible collateral with USD 10 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 USD 95 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. On 23 March 2012, Tri-U entered into the second amendment revolving credit

facility agreement to increase the credit line to USD 110 million through 11 March 2014.

On 22 August 2012, Tri-U entered into the third amendment of its credit facility with BOA,

which has a "Keep-well" provision allowing Tri-U to utilise equity contributions from its

member funded within a 45-day grace period when calculating the leverage ratio for

purposes of assessing compliance with covenants. Tri-U agreed to a 0.25% increase in

the annual interest rate in consideration of this provision. As at 31 December 2012, the

balance under the credit facility was USD 96 million (2011: USD 87 million), with interest

rate at 3.00% to 6.50% per annum (2011: interest rate at 2.63% to 6.00% per annum) and

actual unused availability was approximately USD 10 million (2011: USD 5 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 obtained USD

2 million of additional equity contributions from the member in order to maintain

compliance with the covenants as of 31 December 2012.


As at 31 December 2012, Yueh Chyang Canned Food Co., Ltd. (YCC) obtained credit

facilities from four financial institutions amounting to USD 14 million (2011: USD 7 million).

The credit facilities bears interest rate at 2.8% per annum and cost of fund plus 1% and

2.25% per annum (2011: cost of fund plus 1% per annum). As at 31 December 2012, the

balance under the credit facilities was USD 7 million (2011: USD 2 million). The unused

available was approximately USD 7 million (2011: USD 5 million). The credit facilities were

secured by accounts receivable, inventory, plant and equipment of YCC.

18. Trade and other payables

(Unit: Thousand Baht) Consolidated financial

statements

Separate financial

statements

2012 2011 2012 2011

Trade payables - related parties 85,302 28,047 381,475 231,330

Trade payables - unrelated parties 8,940,811 6,444,194 1,179,377 833,626

Accrued interest expenses to related

parties

- - 1 8

Accrued expenses - related parties 92,465 24,328 41,763 11,904

Accrued expenses 1,237,340 1,327,135 253,817 271,230

Other payables - construction and equipment purchase - related party 11,609 13,933 9,985 6,348

Other payables - construction and

equipment purchase - unrelated

parties

177,201 81,438 62,294 17,796

Total trade and other payables 10,544,728 7,919,075 1,928,712 1,372,242

19. Long-term loans

Long-term loans as at 31 December 2012 and 2011 consist of:



statements

Separate financial

statements

2012 2011 2012 2011

USD loans 9 9 - -

Baht loans 2,815 3,092 2,250 2,250

EUR loans - 13,162 - -

Less: Deferred financial fees - (664) - -

Total 2,824 15,599 2,250 2,250

Less: Current portion (399) (984) (112) -

Net 2,425 14,615 2,138 2,250


During the second quarter of 2007, a local subsidiary drew Baht 380 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 repaid during the current year.

During the third quarter of 2007, a local subsidiary entered into a 7-year loan agreement

amounting to Baht 1,190 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. As at 31 December 2012, the balance of this loan was

Baht 545 million (2011: Baht 818 million).

In 2010, an overseas subsidiary has entered into loan agreements with four overseas

financial institutions to acquire EUR 340 million loans. The loans carry interest at the

LIBOR plus 4.5 to 5.0% per annum. These loans repaid in full amount during the

current year.

During the third quarter of 2011, the Company has entered into a 7-year loan

agreement amounting to Baht 2,250 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 2012, the balance of

this loan was Baht 2,250 million (2011: Baht 2,250 million).

During the fourth quarter of 2012, a local subsidiary entered into a 2-year loan

agreement amounting to Baht 20 million with a local financial institution. The loan

carries interest at MLR less 3% per annum and is to be repaid in quarterly installment.

As at 31 December 2012, the balance of this loan was Baht 20 million.

20. 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 Baht 8,500 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 12 November 2008, the Company issued the 2-year debentures of Baht 1,500 million

(1,500,000 units of debentures of Baht 1,000 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 Baht 500 million

(500,000 units of debentures of Baht 1,000 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 Baht 15,000 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

Baht 6,750 million (6,750,000 units of debentures of Baht 1,000 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.

21. 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. On 6 March 2012,

the meeting of the Company's Board of Directors approved the change of conversion

price to Baht 52.91 per share.

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.


22. 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.



statements

Separate financial

statements

2012 2011 2012 2011

Current service cost 80,338 85,501 17,175 16,958

Interest cost 57,465 54,491 8,580 7,782

Long-term employee benefit

expenses for the years

137,803

139,992 25,755

24,740

Line items under which such expenses are included in profit or loss

Cost of sales 90,437 85,449 19,473 15,662

Selling and administrative

expenses 47,366 54,543 6,282 9,078

The changes in the present value of the defined benefit obligation are as follow:



statements

Separate financial

statements

2012 2011 2012 2011

Defined benefit obligation

at beginning of year 966,024 251,337 190,433

-

Cumulative effect of change

in accounting policy for

employee benefits

adjusted against beginning

balance of retained

earnings

-

603,395

-

169,096

Current service cost 80,338 85,501 17,175 16,958

Interest cost 57,465 54,491 8,580 7,782

Benefits paid during the year (29,756) (37,855) (5,919) (3,403)

Actuarial losses 407,786 599 131,405 -

Translation adjustment (7,196) 8,556 - -


at end of year 1,474,661 966,024 341,674 190,433


Principal actuarial assumptions at the valuation date were as follows:


2012 2011 2012 2011

(% per annum) (% per annum) (% per annum) (% per annum)

Discount rate 2.8 - 20.0 4.2 - 12.4 3.7 4.7

Future salary increase rate

(depending on age of

employee)

3.0 - 15.0

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

Amounts of defined benefit obligation for the current and previous two years are as

follows:



Experience adjustments

arising on the plan liabilities

Consolidated

financial

statements

Separate

financial

statements

Consolidated

financial

statements

Separate

financial

statements

Year 2012 1,474,661 341,674 323,133 112,228

Year 2011 966,024 190,433 6,459 -

Year 2010 540,345 - (3,064) -

The oversea subsidiary has a define benefit plan as mentioned in Note 5.16. The

amount related to such defined benefit plan recognised in profit or loss and the

statement of financial position are summarised below.


statements 2012 2011 Interest cost 2,265 8,331 Expected return on plan asset (1,334) (2,818) Amortisation of net loss 745 1,347 Expenses recognition due to settlements 50,762 - Long-term employee benefit expenses for the years 52,438 6,860

Defined benefit obligation 29,421 110,146 Fair value of plan assets (27,188) (70,467)

Provisions for long-term employee benefits 2,233 39,679


The changes in the present value of the defined benefit obligation are as follow:



statements

2012 2011

Defined benefit obligation at beginning of year 110,146 159,602 Interest cost 2,265 8,331 Benefits paid during the year (1,427) (87,471) Actuarial losses 8,874 23,368 Translation adjustment (2,565) 6,316 Settlement gain (9,960) - Curtailments and settlements (77,912) -

Defined benefit obligation at end of year 29,421 110,146

The change in the fair value of plan assets is as follows:


statements 2012 2011

Fair value of plan assets at beginning of year 70,467 115,292 Expected return on plan assets 124 (3,369) Contributions 35,031 41,745 Benefits paid during the year (1,241) (87,471) Settlements (75,430) - Translation adjustments (1,763) 4,270

Fair value of plan assets at end of year 27,188 70,467

The major categories of plan assets as a percentage of total plan assets are as follows:

Consolidated financial statements 2012 2011

% % Equity securities - 64 Debt securities 100 36


Principal actuarial assumptions at the valuation date were as follows:


2012 2011

(% per annum) (% per annum)

Discount rate 4.1 5.5

Expected long-term rate of return on plan assets 8.0 8.0

Amounts of defined benefit obligation for the current and previous two years are as

follows:



Experience adjustments arising on the plan

liabilities Consolidated

financial statements Consolidated

financial statements Year 2012 2,233 4,951 Year 2011 39,679 998 Year 2010 44,304 (3,342)

23. Income tax

Income tax expenses for the years ended 31 December 2012 and 2011 are made up

as follows:




2012 2011 2012 2011

Current income tax:

Current income tax charge 350 586 38 119

Translation adjustment (1) 11 - -

Income in deferred income tax (229) (405) (8) (9)

Income tax expense reported in profit or loss 120 192 30 110


Reconciliation between income tax expenses and the product of accounting profit

multiplied by the applicable tax rates for the years ended 31 December 2012 and 2011.




2012 2011 2012 2011


Accounting profit before income tax 5,592 6,265 2,966 3,133

Applicable tax rate 10-35% 10-35% 23% 30%

Accounting profit before tax multiplied by

applicable tax rate 984 2,075 682 940

Tax adjust for prior year (12) (2) (16) -

Tax effect of intercompany transactions 1 (345) - -

Tax effect for:

investment promotion (Note 27) (713) (1,310) (264) (481)

tax-exempt incomes and non-deductible

expenses (88) (168) (380) (341)

Decrease (increase) in deferred tax assets 87 (155) 12 (9)

Increase (decrease) in deferred tax

liabilities (139) 97 (4) 1

Income tax expenses in income statements 120 192 30 110

The components of deferred tax assets and deferred tax liabilities are as follows:




2012 2011 2012 2011

Deferred tax assets

Tax losses brought forward 503 566 - -

Tax effect of non-deductible expenses

Allowance for diminution in value of

Accounts receivable 20 20 5 5

Inventories 135 118 1 4

Assets value 7 13 7 13

Others 12 21 - -

Provision for long-term employee

benefits 51 49 10 5





2012 2011 2012 2011

Accrued liabilities 168 125 - -

Inventory cost capitalisation 212 142 - -

Others 56 9 27 8

Total 1,164 1,063 50 35

Deferred tax liabilities

Depreciation and amortisation 603 472 2 1

Intangible assets 3,784 3,853 - -

Prepaid expense 16 19 - -

Others reserves 213 207 - -

Surplus on revaluation of land 181 - 45 -

Others 128 367 3 -

Total 4,925 4,918 50 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.

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.

24. Share capital

On 10 April 2012, the Extraordinary General Meeting of the Company’s Shareholders

no. 1/2012 passed resolutions on the following matters.

- Approval was given to decrease the Company’s registered share capital from

Baht 1,000 million (1,000 million ordinary shares of Baht 1 each) to Baht 999 million

(999 million ordinary shares of Baht 1 each), by canceling 813,450 registered

shares that had yet to be allocated. The Company registered the decrease of its

share capital with the Ministry of Commerce on 23 April 2012.


- Approval was given to increase the Company’s registered share capital from

Baht 999 million (999 million ordinary shares of Baht 1 each) to Baht 1,202 million

(1,202 million ordinary shares of Baht 1 each) for the support of the issuance of

new shares to existing shareholders (Rights Offering) according to Pro rata basis of

shares and/or to the private placement and for the support of the conversion of

debentures which were allocated to the private placement on 27 October 2010. The

Company registered the increase of its share capital with the Ministry of Commerce

on 24 April 2012.

Reconciliation of the number of issued and paid-up shares capital

(Unit: Share)

Consolidated financial statements /


31 December

2012 2011

Number of ordinary shares at the beginning of year 956,329,407 956,329,407

Increase in the number of ordinary shares due to

share capital increase* 191,264,422 -

Number of ordinary shares at the end of year 1,147,593,829 956,329,407

* The Company allocated the new 191,264,422 shares to the existing shareholders at

the ratio of 5 existing common shares to 1 newly issued shares at the subscription

price of Baht 50 per share. The Company registered its additional shares with the

Ministry of Commerce on 28 May 2012 and the shares were first traded on the Stock

Exchange of Thailand on 30 May 2012.

25. 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.

At present, the statutory reserve has fully been set a side.


26. Expenses by nature

Significant expenses by nature are as follow:



2012 2011 2012 2011

Salary and wages and other employee

benefits 9,978,011 8,620,366 2,343,165 1,944,049

Depreciation 1,746,498 1,551,699 335,265 272,539

Amortisation expenses 155,897 64,475 317 473

Loss on impairment (reversal) (28,703) 34,681 (29,365) 29,772

Rental expenses under operating lease

agreements 1,184,108 737,568 357,570 184,220

Raw materials, consumables used

and finished goods purchased 66,383,009 59,485,850 18,322,331 17,867,630

Changes in inventories of finished goods

and work in progress (2,587,955) (2,056,615) (438,734) (409,086)

27. 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 10 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.


Promoted operations Non-promoted operations Total

2012 2011 2012 2011 2012 2011

Sales

Domestic sales 2,412,520 2,784,983 1,623,981 775,403 4,036,501 3,560,386

Export sales 19,843,900 19,735,527 1,191,541 429,818 21,035,441 20,165,345

Other income 276,101 126,051 2,573,114 2,388,842 2,849,215 2,514,893

Total revenues 22,532,521 22,646,561 5,388,636 3,594,063 27,921,157 26,240,624

28. 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.


Weighted

Profit for the year average Earnings per share

Consolidated Separate number of Consolidated Separate

financial financial ordinary financial financial

statement statement shares statement statement

Million Baht Million Baht Million share Baht Baht


Profit attributable to equity holders of

the parent 4,694 2,935 1,070.3 4.39 2.74

Add: Interest expense from convertible bond

recognised during the year 93 93

Effect of dilutive potential ordinary shares - - 45.3

Diluted earning per share

Profit of ordinary shareholders assuming

the conversion of warrants to ordinary shares 4,787 3,028 1,115.6 4.29 2.71


Profit for the year Weighted Earnings per share

(restated) average (restated)

Consolidated Separate number of Consolidated Separate

financial financial ordinary financial financial

statement statement shares statement statement

Million Baht Million Baht Million share Baht Baht


Profit attributable to equity holders of

the parent 5,117 3,022 956.3 5.35 3.16

Add: Interest expense from convertible bond

recognised during the year 90 90

Effect of dilutive potential ordinary shares - - 42.9

Diluted earning per share

Profit of ordinary shareholders assuming

the conversion of warrants to ordinary shares 5,207 3,112 999.2 5.21 3.11


29. 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 2012 and 2011 (Restated) of the Company and its subsidiaries by

segment.


Frozen and canned

food products Other businesses Total Elimination Grand total

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

(Restated) (Restated) (Restated) (Restated) (Restated)

Sales

- Local 5,469 4,571 11,963 11,221 17,432 15,792 (6,896) (6,129) 10,536 9,663

- Export 110,166 102,509 977 898 111,143 103,407 (14,981) (14,400) 96,162 89,007

Total sales 115,635 107,080 12,940 12,119 128,575 119,199 (21,877) (20,529) 106,698 98,670

Segment operating income 6,017 7,820 1,340 1,323 7,357 9,143 455 (646) 7,812 8,497

Unallocated income (expenses):

Interest income 12 10

Administrative expenses 27 (54)

Share of profit from investment in associates 70 84

Finance cost (2,329) (2,272)

Income tax expenses (120) (192)

Profit attributable to non-controlling interests of the subsidiaries (778) (956)

Profit attributable to equity holders of the company 4,694 5,117

Financial information of the Company and its subsidiaries presented by geographical

segment for the years ended 31 December 2012 and 2011 (Restated) is as follows:


Thailand Overseas Total Elimination Grand total

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

(Restated)

Sales

- Frozen and canned

food products 55,525 51,330 60,110 55,750 115,635 107,080 (18,383) (18,433) 97,252 88,647

- Other businesses 12,940 12,119 - - 12,940 12,119 (3,494) (2,096) 9,446 10,023

Total sales 68,645 63,449 60,110 55,750 128,575 119,199 (21,877) (20,529) 106,698 98,670

Segment operating income 7,812 8,497

Property, plant and

equipment 11,425 9,248 6,325 6,219 17,750 15,467 173 188 17,923 15,655

Unallocated assets 76,836 67,622

Total assets 94,759 83,277

Transfer prices between the Company and its subsidiaries are as set out in Note 9.


30. 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 2012, the Company and its local subsidiaries contributed approximately

Baht 52 million (2011: Baht 45 million) to the fund.

31. 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 USD 0.5 million to the fund in the year 2012 (2011: USD 0.4

million).

32. Dividends

Dividends declared in 2012 and 2011 consist of the following:

Dividend

Approved by Total dividends per share

(Million Baht) (Baht)

Dividends on income for Annual General Meeting

the period 1 July 2011 to of the shareholders on

31 December 2011 26 March 2012 622 0.65

Interim dividends for 2012 Board of Directors’

meeting on 8 August

2012 1,262 1.10

Total for 2012 1,884

Dividends on income for Annual General Meeting

the period 1 October 2010 of the shareholders on

to 31 December 2010 25 April 2011 325 0.34

Interim dividends for 2011 Board of Directors’

meeting on 5 August

2011 870 0.91

Total for 2011 1,195


33. Commitments and contingent liabilities

33.1 Commitments

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 119 million Baht 53 million Baht 6 million Baht 178 million

EUR 2 million EUR 3 million - EUR 5 million

Land lease agreements Baht 2 million Baht 2 million Baht 2 million Baht 6 million

USD 3 million USD 12 million USD 2 million USD 17 million

- EUR 2 million EUR 1 million EUR 3 million

Vehicle lease agreements Baht 33 million Baht 42 million - Baht 75 million


Machine lease agreements Baht 2 million Baht 2 million - Baht 4 million

- USD 1 million - USD 1 million

Computer & copy machine lease

agreements Baht 17 million Baht 8 million - Baht 25 million

Warehouse and factory

construction agreements Baht 388 million - - Baht 388 million

Purchase machinery, equipment

and vehicle agreements Baht 54 million - - Baht 54 million

USD 3 million - - USD 3 million

Communication agreements Baht 1 million - - Baht 1 million

Advisory agreements Baht 11 million - - Baht 11 million

Internet network service agreements Baht 4 million Baht 2 million - Baht 6 million

Security service agreements Baht 3 million - - Baht 3 million


Payable within


Office rental and service agreements Baht 52 million Baht 57 million Baht 9 million Baht 118 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 and copy machine lease

Agreements Baht 39 million Baht 66 million - Baht 105 million

Warehouse and factory

construction agreements Baht 65 million - - Baht 65 million



Payable within


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:

As at 31 December

2012 2011

The local subsidiary Baht 214.2 million Baht 51.0 million The overseas subsidiary USD 1.9 million USD 1.9 million The overseas associates USD 0.3 million 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 2012 amounting to USD 1 million (2011:

USD 1 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 2012.


33.2 Guarantees

a) As at 31 December 2012, there were outstanding bank guarantees of approximately

Baht 61 million and USD 2 million (2011: Baht 54 million and USD 4 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 2012, there were outstanding bank guarantees of approximately

Baht 156 million (2011: Baht 92 million) issued by banks on behalf of the subsidiaries

in respect of certain performance bonds as required in the normal course of business.

34. Financial instruments

34.1 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 bank deposits, 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. 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.


Significant financial assets and liabilities 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 statement as at 31 December 2012

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 9 - - 1,310 81 1,400 0.10 - 2.47

Trade and other receivables - - - - 11,918 11,918 -

Restricted bank deposits 2 - - 12 - 14 1.20 - 3.00

Short-term loans to other companies 12 - - - - 12 3.05 - 7.50

Long-term loans to other companies 7 21 - - 3 31 3.00 - 7.50

30 21 - 1,322 12,002 13,375

Financial liabilities

Bank overdrafts and short-term loans

from financial institutions 16 - - 7 - 23 1.11 - 4.01

Trade and other payables - - - - 10,545 10,545 -

Long-term loans - 9 - 2,815 - 2,824 3.05 - 3.39

Debentures 500 5,239 1,495 - - 7,234 4.68

Convertible bond - 2,440 - - - 2,440 5.00

516 7,688 1,495 2,822 10,545 23,066

Consolidated financial statement as at 31 December 2011





Financial assets

Cash and cash equivalents - - - 543 360 903 0.17 - 1.93


Restricted bank deposits - - - 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



from financial institutions 7,673 - - 6,804 - 14,477 2.43 - 4.70


Long-term loans 10 - 9 15,580 - 15,599 3.69 - 5.00

Debentures - 5,733 1,495 - - 7,228 4.69


7,683 8,195 1,504 22,384 7,919 47,685


Separate financial statement as at 31 December 2012





Financial assets

Cash and cash equivalents - - - 14 48 62 0.10 - 2.50


Short-term loans to subsidiaries 80 - - 1,337 - 1,417 3.10 - 3.40

Short-term loans to other companies 5 - - - - 5 7.50

Long-term loans to subsidiaries - - 15,798 5,332 - 21,130 1.11 - 5.50

Long-term loans to other companies 2 1 - - - 3 7.50

87 1 15,798 6,683 4,245 26,814



from financial institutions 9,788 - - - - 9,788 1.28


Long-term loans - - - 2,250 - 2,250 2.60

Debentures 500 5,239 1,495 - - 7,234 4.68


10,288 7,679 1,495 2,250 1,929 23,641

Separate financial statement as at 31 December 2011





Financial assets

Cash and cash equivalents - - - 30 26 56 0.17


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



from financial institutions 3,554 - - - - 3,554 3.24


Long-term loans - - - 2,250 - 2,250 3.91

Debentures - 5,733 1,495 - - 7,228 4.69


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 17 and 19. The details of the interest rate swap agreements outstanding as at

31 December 2012 and 2011 is as follows:


The Company


Principal amount Interest Revenue Rate

Swap agreements Interest Expense Rate

Swap agreements Termination date

1 Baht 2,040 million (first 2 years) Baht 170 - 1,700 million (remaining 4 years)

Floating rate 3-month THBFIX plus 1.50% (first 2 years)

Floating rate 3-month THBFIX plus 1.75% (remaining 4 years)

Fixed rate 4.522% October 2016

2 Baht 510 million (first 2 years) Baht 42.5 - 425 million (remaining 4 years)

Floating rate 3-month THBFIX plus 1.50% (first 2 years)

Floating rate 3-month THBFIX plus 1.75% (remaining 4 years)


3 Baht 500 million Floating rate 6-month THBFIX

Fixed rate 3.50% August 2015


Principal amount Interest Revenue Rate

Swap agreements Interest Expense Rate

Swap agreements Termination date

1 Baht 2,040 million (first 2 years) Baht 170-1,700 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)


2 Baht 510 million (first 2 years) Baht 42.5-425 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)


3 Baht 500 million Float rate 3-month THBFIX-Reuters


4 Baht 500 million Float rate 6-month THBFIX



Subsidiaries


Principal amount

Interest Revenue Rate Swap agreements

Interest Expense Rate Swap agreements

Termination date

1 EUR 88 million Float rate 3-month EURIBOR

Fixed rate 2.70 % October 2017



3 USD 40 million Float rate 3-month LIBOR

Fixed rate 1.85 - 2.55% February 2016




Principal amount

Interest Revenue Rate Swap agreements

Interest Expense Rate Swap agreements

Termination date









Cross currency and interest rate swap agreements

The Company

As at 31 December 2012 Currency and Interest Revenue Rate

Swap agreements Currency and Interest Expense Rate

Swap agreements Termination date Principal amount Interest rate Principal amount Interest rate

1 Baht 1,134 million Floating rate 3-month THBFIX

USD 35 million Floating rate 3-month LIBOR-BBA plus 0.665%

July 2013

2 Baht 674 million Floating rate 3-month THBFIX plus 2.31%

USD 22 million Floating rate 3-month LIBOR plus 3.00%

June 2014

3 Baht 2,640 million Fixed rate 1.78% EUR 66 million - June 2015 4 Baht 1,997 million Floating rate 6-

month THBFIX minus 1.75%

EUR 50 million - June 2017

5 Baht 285 million Floating rate 3-month THBFIX

USD 9 million Floating rate LIBOR plus 0.42%

July 2013



Currency and Interest Revenue Rate Swap agreements

Currency and Interest Expense Rate Swap agreements Termination date

Principal amount Interest rate Principal amount Interest rate 1* Baht 397.8 million Float rate 3-month

THBFIX USD 12 million Fixed rate 4.4086% July 2012

2 Baht 1,134 million Float rate 3-month THBFIX

USD 35 million Float rate 3-month LIBOR-BBA plus 0.665%

July 2013

3 Baht 674 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

Subsidiary

As at 31 December 2012 and 2011 Currency and Interest Revenue Rate

Swap agreements Currency and Interest Expense Rate

Swap agreements Termination date Principal amount Interest rate Principal amount Interest rate

1 Baht 976 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 are summarised below.

Foreign Financial assets Financial liabilities Average exchange rate

currency as at 31 December as at 31 December as at 31 December

2012 2011 2012 2011 2012 2011

(Million) (Million) (Million) (Million) (Baht per 1 foreign currency unit)

USD 311 308 31 17 30.58 31.64

JPY 149 83 239 91 0.35 0.41

EUR 513 376 61 60 40.50 40.97

VND 6,515 - 2,062 - 0.0015 -


Foreign exchange contracts outstanding are summarised below.


Bought Sold Contractual exchange rate

Foreign currency amount amount Bought Sold Contractual maturity date

(Million) (Million)

The Company

USD against Baht - 198 - 30.30 - 32.40 January 2013 - June 2014

JPY against Baht - 143 - 0.36 - 0.41 January 2013 - June 2013

EUR against Baht - 448 - 39.10 - 42.96 March 2013 - June 2017

Subsidiaries

USD against Baht - 209 - 30.73 - 32.48 May 2013 - December 2014

USD against GBP 16 - 1.61 - May 2013

EUR against GBP 3 - 0.81 - June 2013


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 2012 - March 2012

EUR against GBP 9 - 0.84 - January 2012 - December 2012

As at 31 December 2012, 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 USD 28 million up to USD 67 million

(2011: between USD 30 million up to USD 76 million), depending on conditions

stipulated in the agreements, at rates of Baht 30.85 to Baht 32.30 per USD 1 (2011: at

rates of Baht 30.25 to Baht 31.70 per USD 1). These agreements will terminate within

December 2013 (2011: September 2012) and the Company has outstanding option

agreements with two local banks under which the Company has obligations to sell a

total of EUR 200 million at rates of Baht 42.00 and Baht 42.50 per EUR 1. These

agreements will terminate within May 2017. At the same time, the two local banks have


obligations to buy a total of EUR 200 million at rates of Baht 42.00 and Baht 42.50 per

EUR 1. These agreements will terminate within May 2017.

Moreover 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 42.0 33.5 1.33 1.38 December 2013

GBP against USD 23.0 15.4 16.40 16.40 December 2013

EUR against GBP 38.1 30.1 0.79 0.79 June 2013 - December 2013


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

34.2 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.

35. 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 2012, the Group’s debt to equity ratio was

1.35:1 (2011: 2.07:1) and the Company’s was 0.93:1 (2011: 1.13:1).


36. Events after the reporting period

On 4 January 2013, the Extraordinary General Meeting of the Shareholders of Thai Union

Hatchery Co., Ltd., a subsidiary of Thai Union Feedmill Co., Ltd. no 1/2013 passed

resolution on the increase its share capital from Baht 300 million (30 million ordinary

shares of Baht 10 each) to Baht 420 million (42 million ordinary shares of Baht 10 each).

The said company registered the increase of its share capital with the Ministry of

Commerce on 9 January 2013.

On 28 January 2013, the Extraordinary General Meeting of the Shareholders of the

Company no. 1/2013 passed resolution on additional purchase in ordinary shares of

Pakfood Public Company Limited (PPC) from 49.97% to exceed 50% and up to 100%

holding of the issued and paid-up share of PPC which it resulted in changing of the PPC’s

status from the associated company to subsidiary. On 21 February 2013, the Company

purchased ordinary shares of PPC of 2,984,787 shares at a purchase price of Baht 50 per

share, or a total of Baht 149 million. This purchase made the investment proportion in PPC

increase from 49.97% to 54.46%.

On 1 March 2013, the meeting of the Company’s Board of Directors No. 1/2013 passed

resolution to approve dividend payment of Baht 2.10 per share from its net operating profit

of the year 2012, to the Company’s shareholders. However, by the resolution of the

meeting of the Company's Board of Directors No. 4/2012 held on 8 August 2012, the

Company had paid out the interim dividend payment of Baht 1.10 per share from the

six-month operating profit ended 30 June 2012, to the Company's shareholders totaling

Baht 1,262 million on 31 August 2012. The remaining dividend is Baht 1.00 per share or

totaling Baht 1,148 million. The dividend will be paid on 22 April 2013.

37. Approval of financial statements

These financial statements were authorised for issue by the Audit Committee and the

Company’s management on 1 March 2013.


NOTE

Documents

Annual Report 2012 EN