29th February, 2008 The President The Stock Exchange of Thailand Dear Sir, Clarification on Operating Results for 2007 The Company's operating results for 2007, which has been certified by the external auditors,showed a net profit of THB 3.31 million, a decrease of THB 47.65 million, which exceeded a 20% decline from the same period of last year. However, the poor performance of last year is seen as a one-off incident during a period of stagnant economy. The political instability and the continuing violence in the 4 southernmost provinces did have a strong negative impact on our overall performance. In 2008 and beyond, we are expecting much improved results due to important measures that we had taken last year, for example, our right-sizing program, our stringent cost control measures, our more cost - effective distribution system, and our revenue growth strategy. The reduction in net profit was due to the following main reasons; 1. Price competition has further heightened and the trend continues to intensify. A rapid branch expansion of modern trade customers has helped to increase their bargaining power and adversely impacted the Company's margins. Although the Company has increased its selling price during mid-2006, net selling price in 2007 has fallen back to the same level as prior to the price increase. This was due to the higher rate of increase of production costs. Moreover, the Company was required to sell its products to customers at reduced margins in order to maintain market share and prevent competitors' penetration. 2. A significant increase in cost of raw materials since 2006, such as concentrate, sugar and preforms. In addition to this, higher excise tax and cost of finished products have caused a reduction in the Company's gross margin. 3. Rising oil prices has negatively impacted the Company's cost of distribution. 4. The continuous decline in sales volume of the Returnable Glass Bottle (RGB), which yields higher margin than the PET products, as a result of changing consumers' behavior who currently prefer to purchase the PET products from modern trade outlets. 5. An increase in selling, general and administrative expenses by THB 105.54 million or 15.65%. This was largely due to extra costs associated with sales effort to the modern trade customers, which included rebates and other forms of sales promotion. There was also a salary increase during 2007. 6. As for the above reasons, and in order to ensure survival, the Company has initiated a down-sizing program in 2007, via the Voluntary Early Retirement Program, which the Company has compensated its staff at a rate higher than required by the law. As a result, the Company has incurred extra expenses from the said program for year 2007. The above are the main reasons for the decline in the Company's net profit in 2007. As mentioned above, with course correction measures that had been implemented at the end of last year and current marketing and market-execution plans in place, we will be expecting better results in 2008 and beyond. Yours faithfully, For Haad Thip Public Company Limited Sec. Lt. (Phairoch Rattakul) President & CEO Office of the Managing Director Tel. 0-2391-4488 Ext.103