REPORTS ON UTILISATION OF CAPITAL INCREASE

06 February 1997
Haad Thip Plc (HTC) would like to report on the utilisation of proceeds totalling to Bt66,405,000 received from offering capital increase shares amounting 3,320,250 units, Bt20 each, ended December 31, 1996 as follow: 1.The second plant construction at Amphur Punpin, Surajthani Province : Recently the sum of money valued Bt8 million was spent on filling the 40- rai plot of land around plant site, office and warehouse, paving roads, fencing, exploration and excavation for undergroud well from which water would be supplied as material of carbonated beverage production and lastly, plant and office design. 2.HTC spent Bt45 million on purchase plot of land for expansion the second plant at Punpin, Surajthani Province in order to enhance a moderate- prolonged expansion in the future. 3.As a result the rest of proceeds stood at Bt45 million which was paid for following projects: 3.1 Amount of Bt25 million; To construct its own warehouse instead of leased one, not much spacious, in order to distribute by itseft, independent of agents and moreover, to equip warehouse located at Krabi, Phuket, Yala and Amphur Langsuan as well as to repair another warehouses. 3.2 Amount of Bt22 million; To purchase vehicles for product distribution. The spending along Clause 3.1 and 3.2 which excluded from prior objectives are one of investment in the second plant construction because it must be ready to boost efficiency in stocking and distrebuting due to growing market. This accounts for high revenues and profits to be used as company's working capital for the next time. As the economic circumstance in 1996 was not nourishing, the company's sales were far lower then the target. The situation in 1997 will expectedly not improve much, so the comapany predicted that its sales would increase at a lower ratio than in 1992 and 1993. If the company insisted to constuct its 2nd plant, following the old plan, it would need at least Bt300 million for the initial investment and about Bt500 more in the second stage. The company considered this huge investment during the economic recession, particularly in part of people's income, not riskworthy. It therefore postponed the construction project from the end of 1997 to 1999. The company will however continue to construct its 2nd warehouse in Surat Thani so as to help improve its product distribution in the province. The warehouse construction is presently under way.