Thai Union Germany GmbH

Thai Union Germany GmbH

München

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

Thai Union Group Public Company Limited
Samut Sakhon / Thailand

Company Profile

Company Profile

Thai Union Group

Public Company Limited

Registration No.0107537000891

Type of Business

Processor and exporter of frozen and canned seafood

Head Office

72/1 Moo 7, Sethakit 1 Road, Tarsrai Sub-District, Mueang Samut Sakhon District, Samut Sakhon Province 74000

Tel.: +66 (0) 3481-6500 (Automatic 7 lines)

Fax: +66 (0) 3481-6886

Bangkok Office

979/12 M Floor, S.M. Tower, Phaholyothin Road, Phaya Thai, Phaya Thai, Bangkok 10400

Tel.: +66 (0) 2298-0024, 2298-0537-41

Fax: +66 (0) 2298-0548, 2298-0550

Investor Relations Department

Tel.: +66 (0) 2298-0024

Fax: +66 (0) 2298-0342

E-mail: ir@thaiunion.com

Corporate Communications Department

Tel.: +66 (0) 2298-0024

Fax: +66 (0) 2298-0024 ext. 4449

E-mail: tu_corporate@thaiunion.com

Website

www.thaiunion.com

Listed on the Stock Exchange of Thailand Since 22 November 1994

As of 31 December 2023

Registered capital

THB 1,463,783,174 (5,855,132,696 shares)

Paid-up capital

THB 1,163,783,174 (4,655,132,696 shares)

Par value THB 0.25 per share

Message from Our Chairman

The past year presented global economic challenges that tested the resilience and adaptability of organizations worldwide. At Thai Union Group, amidst inflationary pressures and a shifting economic landscape, we navigated these challenges with a steadfast commitment to our mission and values. This period of adversity did not deter us; instead, it sharpened our focus on innovation, sustainability, and strategic growth.

As we look toward the future, I am excited to introduce Strategy 2030, a visionary blueprint designed to propel Thai Union into a new era of industry leadership and sustainable growth. Strategy 2030 articulates our ambition to redefine the seafood industry, emphasizing innovation, sustainability, and global expansion while remaining committed to our core values of integrity, responsibility, and excellence.

Our commitment to "Healthy Living, Healthy Oceans" encapsulates our dedication to nourishing the planet and its people. It guides our operations, product development, and community engagements, ensuring that we contribute positively to the global ecosystem and society at large.

In 2023, we laid the foundation for this transformative journey with the launch of SeaChange® 2030, our comprehensive sustainability strategy. This initiative marks a significant milestone in our commitment to environmental stewardship and social responsibility, aiming to set new industry standards in human and labor rights, health and wellness, climate action, biodiversity, and circularity.

Our efforts have not gone unnoticed, as evidenced by our continued presence on the Dow Jones Sustainability Indices and our top ranking on the Seafood Stewardship Index. These accolades reflect our unwavering commitment to sustainable practices and our leadership in the global seafood industry.

The decision to exit our investment in Red Lobster, though difficult, was a strategic move aligned with our focus on core categories and long-term success. It underscores our resolve to make tough choices for the greater good of our stakeholders and the future of Thai Union.

At the heart of our achievements are our people-our greatest asset. From Asia to North America, our teams demonstrate an unparalleled dedication to excellence, community service, and innovation. Their efforts ensure that we continue to deliver healthy, nutritious products while making a positive impact on the communities we serve.

As we embark on our Strategy 2030 journey, I am filled with gratitude for the unwavering support of our customers, consumers, shareholders, and all stakeholders. Your trust and collaboration fuel our ambition to achieve greater heights.

The challenges of 2023 have prepared us for the opportunities that lie ahead. With resilience, innovation, and a shared vision, we are poised to navigate the future with confidence and purpose.

Thank you for being an integral part of our journey toward "Healthy Living, Healthy Oceans."

Kirati Assakul

Chairman

Message from Our President and CEO

As we reflect on 2023, it's clear that we've navigated through a period marked by challenges, including high inflation and rising interest rates that impacted consumer spending globally.

Despite these headwinds, it's crucial to highlight the strides we've made towards building a resilient and forward-looking business. Our journey last year wasn't just about facing difficulties; it was about laying a stronger foundation for the future, guided by our ambitious Strategy 2030.

In 2023, while we encountered a softening in sales and a 37 percent fall in full year normalized net profit to THB 4.5 billion, it is important to note that Thai Union's financials remain strong. This was reinforced by TRIS Rating, which affirmed our company rating and the ratings of our senior unsecured debentures at A+.

It is also essential to recognize the positive developments that occurred in 2023. We saw signs of improvement in demand for our healthy and nutritious products as the year progressed, aided by easing pressures from key material prices and the strategic rationalization of our portfolio. This resilience is a testament to our robust business model and our team's unwavering commitment to excellence.

Our operational achievements last year were significant. We expanded our manufacturing footprint with the commercialization of two new factories in Thailand, marking a strategic step in enhancing our production capabilities. In the first half of 2024 we will commercialize two factories in Thailand, one for Halal culinary products and another to produce protein hydrolysate, along with a tuna cold storage facility in Ghana. This expansion is not just about growth; it's about strengthening our position to serve the evolving needs of our consumers more effectively.

Sustainability remained at the heart of our operations. The launch of SeaChange® 2030, an ambitious expansion of our sustainability strategy, underscores our dedication to responsible business practices. Achieving milestones such as a 42 percent reduction in our greenhouse gas emissions by 2030 and our commitment to source 100 percent of wild-caught seafood responsibly are pivotal to our purpose of "Healthy Living, Healthy Oceans".

As we pivot towards the future, Strategy 2030 is our compass, redefining our vision "To become the world's leading marine health and nutrition company". This vision is not just aspirational; it is anchored in a robust strategic framework that outlines our path to industry leadership, superior shareholder returns, and a diversified marine-focused portfolio.

Our strategy is built on three pillars:

These pillars are not mere focus areas; they are the blueprint for our evolution, guiding our journey towards sustainable profitability and long-term growth. Crucially, our strategy encompasses critical must-dos that address efficiency improvements across Thai Union. This holistic approach ensures we are not just setting goals but are also equipping ourselves with the means to achieve them.

As we look forward, our departure from investments that no longer fit our strategic vision, such as Red Lobster, is a move towards sharpening our focus on core businesses and areas of future growth. These decisions, though tough, are essential steps towards aligning our resources with our long-term objectives.

Our commitment to "Healthy Living, Healthy Oceans" is unwavering. It is a promise not just to our stakeholders but to future generations. As we move forward, our focus remains on delivering growth, innovation, and sustainability in harmony with our strategic vision.

Thiraphong Chansiri

President and CEO

Business Operations and Performance

01 Group Structure and Operations

Business Overview

Our Purpose

Healthy Living, Healthy Oceans

Our Vision

To become the world's leading marine health & nutrition company

Thai Union Strategy

A renewed purpose and vision

In response to evolving market dynamics, consumer trends, strategic shifts and to realize Thai Union's full potential, our Company kicked off a significant journey to define our core purpose and vision, which in turn will drive our strategy towards 2030 and beyond.

Our Purpose

Our purpose, "Healthy Living, Healthy Oceans'', embodies the commitment to forging a sustainable, healthier future for people, pets, and our planet. We believe in leveraging our resources to facilitate robust and healthier lives for our consumers and a thriving ocean ecosystem, setting new benchmarks for sustainability in the seafood and marine industry.

Our Vision

Simultaneously, we have unveiled our new vision "To become the world's leading marine health & nutrition company". This vision guides our aspirations to be the leading agent of change in the global marine industry, while achieving market-leading shareholder returns, building a diverse marine-focused portfolio beyond seafood, e.g. collagen, algae, calcium, etc., and keeping our commitment to shape a better future of nutrition for humans and pets alike.

Thai Union Strategy 2030

In 2023, we defined a new strategic pivot to guide us towards the next phase of growth towards 2030. Strategy 2030 is an evolution of previous strategies with increased focus on the core, however it enables us to dynamically adapt to new opportunities while placing an increased focus on execution. Pursuant to our emphasis on our core and given Red Lobster's prolonged negative financial contribution to Thai Union, we exited our minority investment in Red Lobster to re-allocate capital towards long-term strategic priorities.

Underlining our commitment to our vision to become the world's leading marine health & nutrition company, the strategy aims to help us reach Thai Union's full potential while future-proofing our businesses to navigate the opportunities and disruptions that lie ahead. Strategy 2030 is built on three growth pillars - (1) Defend the core, (2) Next wave of growth, and (3) New frontiers, all underpinned by a foundation of (4) Strategic enablers.

(1) Defend the Core

Our first growth pillar revolves around bolstering, revitalizing, and strengthening our leading position in our primary business sectors (ambient Chilled, and feed). These are the engines that will continue to sustain Thai Union and generate the cash to support our other endeavors into emerging growth sectors. Key initiatives under this pillar include re-igniting category growth, driving commercial excellence and rejuvenating our brand strategies for our core businesses. Furthermore, we will continue to expand our presence across other temperature regimes such as chilled, and strategically increase our value-chain participation in the seafood and feed space.

(2) Next wave of growth

Our second growth pillar aims to double down in higher margin categories where we believe that profitable growth can be sustained through 2030 and beyond. We are focused on accelerating our Pet business through 'i-Tail Corporation (ITC)', which was spun-off and listed on the Stock Exchange of Thailand in December 2022, and continues to exhibit strong potential for long-term growth and margins. Alongside investing in the promising PetCare category, we aim to broaden our frozen business, especially in the value-added segment. Additionally, we continue to scale up our Culinary business and aim to transform the Ingredients business to a build a comprehensive marine health & nutrition product portfolio.

(3) New frontiers

Beyond our next wave of growth, it is essential for us to continue exploring more progressive ventures to diversify our portfolio and guarantee Thai Union's sustained growth far into the future. Among these emerging concepts are end-to-end Aquaculture Ecosystem, other innovative opportunities in PetCare, and continue investing and scaling our ventures in Alternative Proteins.

(4) Strategic enablers

Underscoring all our growth pillars, we are committed to advancing a set of crucial enablers to fundamentally strengthen our company from within.

These include: operating model and talent development, efficiencies and automation in our operations, digital transformation, innovation as well as sustainability, which includes our industry leading SeaChange® 2030 strategy launched in 2023.

Corporate History and Development

1977

1994

1997-2006

1997-2006

2008

2009

2010-2014

2016

2017

2018

2018

2019

2020

2021

2022

2023 Year of Fit for Growth

Our Brand Portfolio

Thai Union's vast selection of shelf-stable, chilled, frozen, and related food products makes mealtimes delicious, dynamic, easy, and healthy for millions of families worldwide. Our portfolio of consumer-favored brands across North America, Europe, Asia, and the Pacific has a global reach, with product development informed by local insights and market preferences.

Through strategic mergers and acquisitions, our family of brands is expanding its market share around the world. Our commitment to innovation, sustainable growth, quality, and consistency facilitates our competitive advantages.

North America

Chicken of the Sea® and Chicken of the Sea Frozen Foods

In 1914, Chicken of the Sea® began as a California-based fish processing and canning company. Throughout the decades, the brand's iconic mermaid, Catalina, and its image and reputation for quality have made it a household name. More than a century later, Chicken of the Sea® is synonymous with health, nutrition, and convenience; with a variety of products including tuna, salmon, sardines, oysters, clams, mackerel, frozen shrimp and refrigerated and canned crab. Ensuring a healthy supply of seafood for future generations is imperative to Chicken of the Sea®. The company has pioneered responsible sourcing initiatives including strong relationships with the Marine Stewardship Council (MSC), Aquaculture Stewardship Council (ASC), and the International Seafood Sustainability Foundation (ISSF). Chicken of the Sea® uses responsible fishing practices to procure its seafood products from around the world and processes them in facilities across multiple continents, including a state-of-the-art cannery in Lyons, Georgia.

GENOVA

In 1992, Thai Union's Genova® Premium Tuna brand was launched for customers seeking a high-quality, great tasting product. Genova® uses wild-caught, hand-selected, premium yellowfin and albacore tuna in pure olive oil and water for a mouthwatering taste of Mediterranean flavor. Genova Yellowfin in Calabrian Chili Infused Olive oil was selected by PEOPLE's Food Awards 2023 as the Best Tinned Seafood and the publication commended the product's delicate and decadent taste. Genova® is also proud to have the #1 selling premium tuna in olive oil item in the U.S. in 2023. The premium tuna market is growing faster than the mainstream canned tuna segment, and Genova® is building awareness and expanding its distribution channels to take advantage of consumer trends.

Europe

JOHN WEST

John West is one of the UK's most trusted food brands, with a heritage built on high quality and trust. John West have been providing natural protein since 1857 and continue to feed the natural strengths in everyone, everyday with passion, nutrition, and protein. The brand offers a range of differentiated products to delight and support healthy lifestyles and is focused on positive nutrition, fuelling body and mind. John West is committed to the most progressive and rigorous sustainability and biodiversity efforts, designed to deliver genuine impact to our business, our customers, our consumers, and our planet.

PETIT NAVIRE

Founded in 1932, PETIT NAVIRE has established itself as the most famous French tuna brand. In 1982, its first television campaign etched the brand in French consumers' minds with the slogan 'Le bon goût du large' (The good taste of the sea). PETIT NAVIRE has seen continuous operational growth throughout its history, and is a model of modernity for the entire industry. Over the years, PETIT NAVIRE has extended its portfolio and offerings beyond tuna, mackerels, salads & spreadables, to also include chilled smoked salmon and trout.

PARMENTIER

Since 1883, PARMENTIER has perfected the craft of canning to offer real moments of pleasure. PARMENTIER's sardines are carefully selected and prepared with quality ingredients, creating tasty recipes that stand the test of time. Preserving its heritage of quality, PARMENTIER sardines are only fished during the ideal season; typically between June and December. PARMENTIER selects only the best fish, carefully controls its curing process and steam cooking, and prepares them by hand. Our little sardines, the brand's best ambassadors, encourage consumers to enjoy simple pleasures every day.

KING OSCAR

In 1902, King Oscar II, ruler of Norway and Sweden, tasted the sardines from one of Stavanger's preeminent canneries, the Christian Bjelland Company. He was impressed. So impressed that he bestowed upon the company the most precious gift. His name. From that moment on, we have carried King Oscar's title with pride.

Now, we sell seafood products all over the world, always true to what His Majesty saw in us from the beginning: craft, heritage, and quality. Honoring tradition while leading with innovation, we're still on our mission to bring you the best quality, best tasting seafood possible-and to do it in a sustainable way. Because when you are lucky enough to have been given a name like ours, the seafood you offer must be fit for a king. King Oscar is the number one premium sardine brand in the U.S., Norway, and Australia.

Mareblu

Mareblu, founded in the 1990s, has developed as a strong, profitable, and attractive alternative to leading competitors in Italy. Thanks to its focus on quality and innovation, Mareblu is known as the only tuna brand in Italy that markets a complete range of NoDrain products where most of the oil has been removed to offer a lighter, healthier, and more eco-friendly product, still delivering all taste and tenderness. This fully integrated process results in a product of the highest standards in taste, quality, and nutrition. Mareblu's mission is to guarantee everybody access to innovative, sustainable, and healthy protein meals, a challenge fit for a passionate team of seafood experts.

RÜGEN FISCH

Since 1949, RÜGEN FISCH has grown its business to become the leading seafood company in Germany, representing a powerful line of ambient and chilled seafood brands. These include brands for shelf-stable canned seafood products such as RÜGEN FISCH and Hawesta, a historic brand founded in 1909, along with brands for chilled products such as Ostsee Fisch (smoked salmon products) and Lysell (canned premium seafood).

Asia-Pacific

SEALECT

In 1992, Thai Union established the SEALECT brand to introduce Thailand to canned tuna produced at a global standard. SEALECT has established itself as the leading tuna brand in Thailand, while also exporting to some surrounding countries. SEALECT continues to diversify its line of products, all of which represent quality and value for money. SEALECT's mission is to help consumers get the most out of seafood through new varieties, nutritional information, and recipes. We are open to new product development opportunities through local or global strategic partnerships, to fulfil and meet market demand. We want to ensure that our consumers can enjoy their favorite tuna menu, that comes with both nutritional health benefits and delicious taste, in order to drive future growth of the overall tuna consumption.

Pet Food Brands

Our pet food brands offer a wide array of products for both cats and dogs. Our products come in a variety of formats and flavors and are made with high quality ingredients selected from i-Tail's own supply chain, as well as our strategic suppliers. Recognizing the growing trend of humanization and diverse demand from consumers, we are constantly developing products with health benefits and customized diets suited to the preference and needs of your furry friends. Our brand portfolio consists of domestic brands, such as Bellotta (premium quality cat food, comprising both wet and dry cat food, and cat treats), Marvo (premium quality dog food, comprising both wet and dry dog food, made from quality ingredients that offer essential nutrients for dogs of all life stages) and ChangeTer (kidney-friendly cat and dog foods for a healthier and better life of our beloved pets). We also have a branded footprint in the U.S., offering pet food products under Calico Bay (wet cat food products largely made from fresh meat and seafood such as tuna, shrimp, and salmon, and formulated based on island-inspired recipes using healthy ingredients that are free of preservatives) and Paramount (premium wet dog food products produced from wholesome ingredients, which offer a quality source of protein that is highly digestible). Our brands also support our business partners as a platform to pilot new innovation and product formulation.

FiSHO

Created in 1996, FISHO was Thai Union's first snack brand for the Thai market, created from a perfect blend of premium-quality fish meat with an in-house developed recipe. FISHO's mission is to provide fish-based snacks in a wide variety. It's a favorite among teens and young adults who enjoy non-fried snacks.

Qfresh

Qfresh offers 'Fresh Quality' frozen seafood products through a wide range of culinary products that are ready-to-cook and ready-to-eat, available in both offline and online channels. Qfresh products are sustainably sourced, in combination with innovative processing and storage technology to ensure that freshness and nutritional content are maintained. Qfresh consumers enjoy seafood that is affordable, convenient, and nutritious. Qfresh also focuses on modern delivery methods, to ensure it delivers to the highest standards of freshness, original flavor, and safety. In 2019, Qfresh was rebranded, with a new brand logo and product packaging design, to establish brand uniqueness and increase consumer's awareness.

MONORI

MONORI sea snack products are one of Thai Union's seafood snacks. They're fun, flavorful, and nutritious- made from real seafood ingredients, and cooked until perfectly crunchy. MONORI snacks are a healthier alternative to many other snacks offering nutritional benefits from premium seafood ingredients, and available in a variety of flavors, including Japanese-style crispy shrimp cheek snack, crispy salmon skin snack, and crispy squid snack. MONORI snacks offer real seafood taste and a new unique snacking experience.

OMG Meat

In 2021 Thai Union launched OMG Meat, a plant-based protein brand, in the Thai market, to support our Group's commitment to 'Healthy Living, Healthy Oceans,' as well as to meet surging demand in Asia for healthy, environmentally conscious, and innovative alternative protein products. OMG Meat's products not only have zero cholesterol, but they come with a delicious taste and a high protein content. OMG Meat offers a variety of plant-based seafood, e.g., crab cake, crab shumai, fish nugget, hoi jor, and the world's first shrimp wonton. OMG Meat is available nationwide at leading Thai supermarkets and online.

Asia-Pacific

ZEAVITA

To support Thai Union's commitment to 'Healthy Living, Healthy Oceans' and the growing popularity in consumer healthy living trend, Thai Union Lifescience, a subsidiary of Thai Union Group, was established in 2021. Leveraging Thai Union's strengths in the sourcing of tuna raw materials and the Global Innovation Center (GIC), Thai Union Lifescience focuses on the manufacturing, trade, distribution and development of supplements, health care and biotechnology products, commercialized under the ZEAVITA brand. ZEAVITA's core supplement products consist of collagen, vitamin C+, calcium, and fish oil. ZEAVITA's products are available at Watsons, pharmacies, 7-Eleven, Shopee, Lazada, and TikTok.

Strategic Partnerships

thammachart seafood

Thammachart Seafood manages more than 190 seafood counters in Thailand. In 2018, Thai Union entered a strategic partnership with Thammachart Seafood, and increased its stake to 65 percent in 2019. This partnership has expanded Thai Union's business portfolio into seafood counter service, food service, and F&B concepts totaling 18 outlets, which include 80'Below, The Dock Seafood Bar, The Lobster Lab, the management of Ocean Bar, and Charbon at Emsphere. In addition to our retail presence, our food service division is trusted by Michelin-starred restaurants and high-end hotels countrywide, providing them with quality imported seafood from all over the world.

Interpharma-ZEAVITA

In 2021, Inter Pharma and Thai Union Ingredients, a subsidiary of Thai Union Group, set up Interpharma-ZEAvita, a new joint venture focusing on research and development, as well as the manufacturing and distribution of healthy products that promote wellbeing. Thai Union Ingredients currently holds a 49 percent stake in the new joint venture. The investment combines Thai Union's strength in R&D and marine ingredients with Inter Pharma's strength in supplement sales and distribution, particularly in the medical channel. The products already launched under this joint venture include Lisa DHA Shot, TruBo Calcium Hydroxyapatite, and Fish Pro Low Sodium Snack.

Food and Beverage United

In 2020, Thai Union Ingredients established Food and Beverage United, a new joint venture with BevTech Company, a subsidiary of Thai Beverage to produce and distribute functional food and beverage products. The joint venture combines Thai Union's strength in R&D and marine ingredients, with Thai Beverage's strength in beverage marketing, sales, and distribution. The first product, ZEA Tuna Essence, was launched in Thailand across modern trade channels in 2021. ZEA Tuna Essence is a functional beverage enriched with Vitamin B, Zinc, Selenium, and Omega-3. The product comes in two flavors, Original and Passion Fruit.

Selected Brand Share in 2023

Thailand

57.0%

Market Share (Value) of 'SEALECT Tuna' in Thailand (Canned Tuna Market)

USA

13.1%

Market Share (Value) of 'Chicken of the Sea ^® ' in the U.S. ¹

66.1%

Market Share (Value) of 'KING OSCAR' in the U.S. (Premium Sardines)

Europe

25.3%

Market Share (Value) of 'JOHN WEST' in the UK ¹

^"* Change of data provider in 2023 versus 2022. Market share now includes discounters, to give more holistic understanding of the market. Market share would be 30.0% is compared with same methodology as last year"

3.2%

Market Share (Value) of 'PARMENTIER' in France ¹

13.5%

Market Share (Value) of 'KING OSCAR' in Norway ¹

¹ of total canned seafood market

Source: AC Nielsen and IRI

26.2%

Market Share (Value) of 'PETIT NAVIRE' in France ¹

24.4%

Market Share (Value) of 'JOHN WEST' in the Netherlands ¹

6.3%

Market Share (Value) of 'Mareblu' in Italy ¹

33.7%

Market Share (Value) of 'JOHN WEST' in Ireland ¹

^"* Change of data provider in 2023 versus 2022. Market share now includes discounters, to give more holistic understanding of the market."

21.0%

Market Share (Value) of 'RUGEN FISCH' and 'Hawesta'in Germany ¹

¹ of total canned seafood market

Source: AC Nielsen and IRI

Financial Highlights

Amount (Billion Baht)

Sales

EBITDA

Net Profit Attributable to Owners of the Parent

Total Assets

Total Liabilities

Shareholders' Equity

Net Interest-bearing Debt

(Net of cash and cash equivalents)

Net Cash from Operating Activities

Annual Dividends

Financial Ratio

Total Liabilities to Equity (Times)

Gross Profit Margin (%)

Return on Capital Employed (%)

Return on Average Equity (%)

Per Share Data (Baht)

Basic Earnings Per Share

Diluted Earnings Per Share

Dividend Per Share

Par Value

Remark: ^* Reported numbers included THB 18.4 billion one-time non-cash impairment of Red Lobster and IFRS 5 reclassification. If excluded, normalized numbers in 2023 would be as follows

Awards & Recognition

EXECUTIVES

1. Multiple awards at the 2023 Global Banking & Finance Awards® by Global Banking & Finance Review® magazine

The Global Banking & Finance Awards® recognize companies which demonstrate excellence in financial performance, strategy, innovation, achievements, and progressive and inspirational changes within their sectors. The awards were hosted by Global Banking & Finance Review®, a leading, regional financial portal and online/print magazine for institutional investors, financial analysts, and senior management across Asia and in Fortune 500 companies.

2. Best Corporate Innovation CEO at the Krungsri Digital Innovation Awards by Krungsri

Mr. Thiraphong Chansiri, President & CEO of Thai Union PCL, was named Best Corporate Innovation CEO in the corporate sector for being instrumental in fostering innovation within the company. The awards celebrate organizations, entrepreneurs, startups, business partners, and exceptional individuals for their outstanding contributions to successful innovation. The recipients of these awards serve as exemplars for other businesses and aspiring entrepreneurs, highlighting the importance of digital technology and innovation as a means to sustainable growth.

3. Best Sustainable Treasury Solution by Adam Smith Awards Asia 2023 by Treasury Today

Thai Union Group was named as a highly commended winner (second overall winner) in the "Best Sustainable Treasury Solution" category by Adam Smith Awards Asia 2023. Thai Union's treasury and financing strategy have been recognized by a number of institutions, especially for its sustainability-linked "Blue Finance" program that has targets to benefit the oceans - where interest rates are linked to key performance indicators and sustainability performance targets.

CORPORATE

4. Winner of - The Next 100 Global Awards 2023 - Seafood Innovation at Global Banking & Finance Awards® by Global Banking & Finance Review®

The Next 100 Global Companies to watch highlights some of the most exciting, innovative, and promising businesses from around the world. The list recognizes companies at the forefront whose strategy, achievements, dedication, and leadership of those who demonstrate outstanding achievements and are committed to delivering the products clients need and the results clients want, acting as a catalyst for the industry.

5. Best CSR Company (Food Industry) Thailand 2023 by Finance Derivative

Thai Union was named Best CSR Company (Food Industry) Thailand 2023 in the 2023 Finance Derivatives Magazine, which is a global finance and business analysis magazine, providing broad coverage and analysis of the finance industry, international business and the global economy empowering businesses and corporate companies around the world.

6. Universum's Most Attractive Employers in Thailand in 2023 by Universum

Thai Union was named as one of Universum's Most Attractive Employers in Thailand in 2023. An annual global talent survey by Universum revealed that of over 8,400 students surveyed, Thai Union was among the top 50 organizations in Thailand to attract new recruits in engineering and natural science and was also among the top 100 for students in other disciplines such as business/commerce, humanities/liberal arts/education.

7. Winner of Environmental & Social Risk Management (ESRM) at ASEAN Risk Awards 2023

Thai Union Group was recognized for its excellence in integrating environmental and social considerations into its risk management strategies at the ASEAN Risk Awards 2023. The Company was awarded 'Environmental & Social Risk Management (ESRM) Pioneer Award' for demonstrating exceptional proficiency in integrating environmental and social considerations into its risk management strategies.

8. Two awards from HR Excellence Awards Thailand 2023 by Human Resources Online

Thai Union was honored to be recognized for excellence in two categories:

9. Human Rights Awards 2023 in the large business sector by the Rights and Liberties Protection Department, the Ministry of Justice

Thai Union and its subsidiaries, Thai Union Feedmill, Pakfood and Thai Union Seafood received Outstanding Awards and Okeanos received an honorable mention award. The Human Rights Awards recognize companies in Thailand for excellence and outstanding contribution in the area of human rights that impact all stakeholders across all dimensions.

CORPORATE

10. Winner of Thailand Labour Management Excellence Award 2023 by Thai Ministry of Labour

Thai Union Group and six of its subsidiaries including Thai Union Manufacturing (TUM), Okeanos Food (OKF), Thai Union Feedmill (TFM), PakFood, i-Tail Corporation (ITC), and Thai Union Seafood (TUS) were honored to receive accolades for labor management excellence in 2023. The Company and subsidiaries were recognized for outstanding business operations in the areas of employee relations and labor management at an event organized by the Ministry of Labor.

11. Rated "Excellent" with a score 100 points (5 medals) from the quality assessment of the 2023 Annual General Meeting of Shareholders by the Thai Investors Association (TIA) and Securities and Exchange Commission (SEC)

Thai Union has been evaluated at the level "Excellent", worthy of being an example with a full score of 100 points (5 medals) from the results of the quality assessment of the 2023 Annual General Meeting of Shareholders (AGM).

The assessment is organized by the Thai Investors Association and the Securities and Exchange Commission (SEC) to raise awareness among companies about the importance of holding AGM meetings and encourage them to hold an AGM by taking into account the rights of shareholders according to good corporate governance guidelines.

SUSTAINABILITY

12. Top 1% S&P Global ESG Score of the S&P Global Sustainability Yearbook 2023

Thai Union was listed in top 1% S&P Global ESG Score in the Food Product Industry of the S&P Global Sustainability Yearbook 2023. The Sustainability Yearbook 2023 considered over 7,800 companies assessed in the 2022 Corporate Sustainability Assessment (CSA).

13. Leading Company in Building Community Resilience in Thailand 2023

Global Banking & Finance Award® by Global Banking & Finance Review® magazine

Thai Union was honored to be recognized as a Leading Company in Building Community Resilience in Thailand 2023 in the Corporate Social Responsibility category, which is proof positive that the continual efforts to strengthen our approach to sustainability is leading to increased business value.

14. Inclusion in the FTSE4Good Emerging

Index for the 8th consecutive year

The FTSE4Good Emerging Index, which is an extension of the FTSE4Good Index Series, helps investors integrate environmental, social and governance (ESG) factors into their investment decisions and serves as a framework for corporate engagement and stewardship.

15. Multiple awards from the CSR-DIW Continuous Award 2023 by the Department of Industry Works, Ministry of Industry

Thai Union and its subsidiaries, Pakfood, Thai Union Seafood, Okeanos, and Thai Union Feedmill, received five awards at the CSR-DIW Continuous Award 2023, marking the 4 ^th consecutive year that Thai Union has received this award, underscoring our unwavering commitment to upholding business standards with a focus on sustainability.

SUSTAINABILITY

16. Ranked No. 1 Company in the Seafood Stewardship Index (SSI) by the World Benchmarking Alliance (WBA) for the third consecutive time

Thai Union topped the benchmark in the areas of governance and strategy, ecosystems, traceability, and social responsibility. Thai Union was ranked number one for the third consecutive time after being on top of the inaugural index in 2019 and again in 2021. The recognition from the World Benchmarking Alliance follows the recent launch of SeaChange® 2030, the next stage of Thai Union's sustainability strategy that will help reshape the seafood industry. The SSI assessed the contribution of the world's 30 largest seafood companies to the sustainable management of the oceans and coastal ecosystems and the United Nations Sustainable Development Goals (SDGs).

17. MSCI 'A' Rating

MSCI ESG Ratings are designed to help institutional investors understand ESG risks and opportunities. Thai Union received an 'A' rating for its Environmental, Social, and Governance (ESG) Performance in the Food Products Industry.

18. Listed on the AMCHAM Silver recognition for the third consecutive year by The American Chamber of Commerce in Thailand (AMCHAM)

Thai Union was listed on the AMCHAM recognition list for the third consecutive year for its continued efforts to deliver on its commitment to 'Healthy Living, Healthy Oceans.' Through its SeaChange® sustainability strategy, the Company has created long-term economic and social value.

19. Thai Union listed on the Dow Jones Sustainability Indices (DJSI) for the 10th consecutive year in the Food Products Industry

Thai Union achieved a 100 ^th percentile ranking for total sustainability score. The 2023 ranking showed the best industry performance in two sustainability pillars - environmental and social - while the Company received a 100 ^th percentile score in six criteria, driven by Thai Union's global sustainability strategy, SeaChange®.

20. Top sustainability advocates in Asia 2023

Thai Union won the Top Sustainability Advocates in Asia award at the Asia Corporate Excellence & Sustainability Awards (ACES) 2023 in recognition of its dedication to innovation and unwavering commitment to sustainability. The award is one of the most prestigious accolades that recognizes inspiring leaders and sustainability advocates across industry and across Asia.

INNOVATION

21. Outstanding Organization in Innovation at the Nation Innovation Awards 2023 by the National Innovation Agency (NIA)

Thai Union Group was recognized in the categories for innovative private organizations with outstanding product research and development. The awards have been held since 2004 to honor those who advance innovations that enhance the Thai economy and society while also strengthening an innovation culture.

INVESTOR RELATIONS

22. Best Investor Relations Company Asia 2023 at the 2023 Global Banking & Finance Awards® by Global Banking & Finance Review® magazine

Thai Union won for Best Investor Relations Company Asia 2023 in the categories of Investor Relations Awards. The Global Banking & Finance Awards® recognize companies which demonstrate excellence in financial performance, strategy, innovation, achievements, and progressive and inspirational changes within their sectors. The awards were hosted by Global Banking & Finance Review®, a leading, regional financial portal and online/print magazine for institutional investors, financial analysts, and senior management across Asia and in Fortune 500 companies.

Innovation at Thai Union

Strengthening our leadership in sustainability and marine nutrition innovation

Contemporary consumers prioritize both physical and mental health, as well as fostering robust family well-being. The family, though small in size, holds pivotal significance in nurturing a wholesome and high-quality society. Recognizing consumer insights rooted in familial dynamics is therefore a crucial element in crafting successful innovations that cater to consumer needs. This understanding extends beyond diversified product demands to encompass the burgeoning importance of sustainability. Consumer, entrepreneurial, governmental, and private sectors alike acknowledge the pressing necessity to collaboratively safeguard and sustainably manage the world's resources. This imperative is to ensure their preservation for future generations and to foster innovation. At Thai Union, our unwavering commitment to our corporate ethos of 'Healthy Living, Healthy Oceans' remains resolute. Our pursuit involves fostering health and well-being across our product spectrum. Our mission entails pioneering novel innovations in product development, packaging, and manufacturing technologies. This journey aims not only to elevate consumer satisfaction but also to create enduring value and sustainability, contributing to a more prosperous society and world.

Marine Ingredients

At Thai Union Ingredients, our commitment to 'Healthy Living, Healthy Oceans' aligns seamlessly with our dedication to unlocking the remarkable potential of fish. In 2023, we proudly unveiled our cutting-edge Protein Factory, a hub of innovation for our ground-breaking products: Tuna Collagen Peptide and Fish Protein Hydrolysate.

At the heart of our innovative offerings lies our Tuna Collagen Peptide, enriched with functional ingredients celebrated for their prowess in enhancing skin beauty and joint health. Complementing this is our Fish Protein Hydrolysate, meticulously crafted to serve as an exceptional protein source for pet food and diverse nutritional applications.

Integral to our commitment to excellence is a meticulous biotechnological process extracting collagen from carefully controlled fresh tuna skin. This refined process includes specialized purification and advanced drying techniques, resulting in the creation of high-quality bioactive collagen peptides. These peptides not only possess outstanding properties like good appearance and easy dissolution in liquids but also boast excellent sensory evaluations. Their versatility allows for application across a wide spectrum of uses, including supplements, food, and beverages, owing to their well-established and significant functional benefits.

High-quality bioactive collagen peptides are known for their proven and significant functional benefits. Tuna collagen peptide, showcased through in vitro studies, has demonstrated a compelling bioactive function in stimulating collagen synthesis in human dermal fibroblasts. Through in vitro studies, our Tuna Collagen Peptide has exhibited a compelling bioactive function in stimulating collagen synthesis in human dermal fibroblasts. Substantiated by outcomes from two internal small-scale human trials, these trials demonstrate positive outcomes and notable enhancements in skin moisture elasticity, and intensity.

Supplements

To strengthen our support for skin performance testing for our functional ingredients and supplements businesses, we have established our own laboratory facility at the Global Innovation Center for skin testing with best-in-class instruments that meet scientific research standards. Our capability covers designing and conducting studies to investigate the safety and efficacy of new ingredients or final products on human skin elasticity, skin moisture and skin density after consumption. A randomized controlled trial on marine collagen efficacy has been successfully conducted. We also completed several products' efficacy testing to ensure that our supplement formula was effective to consumers as expected. This new capability enables us to innovate consumer products in a competitive marketplace with proven substantiation data to support claims.

In 2023, ZEAvita maintained strong momentum in the Watsons channel as the No. 1 market leader in the collagen supplement category, while business has expanded into online channels such as Shopee, Lazada, and TikTok. The skin testing laboratory has served as a key instrumental tool, with collagen product reviews from more than 75 ZEAvita influencers, key opinion leaders (KOL), or content creators for marketing communication campaigns with a lot of positive feedback to help endorse ZEAvita's brand image for collagen.

Alternative Protein

For plant-based food products, consumers have begun taking a hard look at products in the market, not only on the aspects of product quality in terms of health benefits and environmental impact but also on the price point. All of these came into play when the first Thai Union-branded alternative seafood was launched directly under our power brand John West. In the first quarter of 2023, Fish-free Tuna in Oil and Fish-Free Tuna in Tomato and Basil variants, were launched in the Netherlands. This was followed in the second quarter 2023 by the launch of two salad variants: namely; Tuna Style Plant Based Salad Harissa with Couscous and Lentils and Tuna Style Plant Based Salad Indian with Couscous and Lentils both under the John West Plant Power brand, this time for the UK market. Aware of the cost concern of consumers, the plan is to line price and introduce the vegan variants as just another regular variant. Meanwhile, application of the protected technology developed for creating frozen Thai Union plant-based shrimp is also being expanded to deliver added value products in both ambient and frozen categories.

Digital Manufacturing

At the Thai Union Global Innovation Center, we are constantly aware of the significance of digital manufacturing. It is imperative to accelerate the development of digital production systems noticeably, aiming to enhance our operational efficiency and ensure continuity with reduced human dependency. We have embarked on creating future prototype factories to develop machinery ready for future deployment. Key successes in 2023 include: 1) The invention and advancement of new technology for automatically separating white meat from other parts of tuna using a fusion of mixed reality systems, artificial intelligence, and robotics for automated white meat separation (patent pending). 2) The development of a new automated canning machine to accommodate the new cutting methods mentioned earlier. 3) Expanding the utility of our Thai Union proprietary inventory software program, aiding in the selection of raw materials for production planning, utilized in both our factories in Thailand and international facilities. We are actively monitoring many more new innovations on our journey towards our digital manufacturing system.

Sustainable Packaging

Sustainable packaging continues to be a key commitment in the recently launched SeaChange ^® 2030 strategy. In order to ensure Circularity, Thai Union has committed that 100 percent of our branded products will be in sustainable packaging by 2025, while advocating for at least 60 percent of private label products to be in sustainable packaging by 2030. The path to achieving these commitments is not without its challenges, and learnings from projects initiated in 2021 have been instrumental in addressing some of the challenges experienced. Particular to recyclable packaging solutions for retort products, GIC has been working closely with suppliers in order to develop materials with sealing characteristics similar to current packaging that can be used in our manufacturing facilities without any machine modification and pass factory standards. And while the stability study of tuna products packed in pouches is still ongoing, 2023 marked the shelf-life study completion of OMG Alternative Protein products packed in recyclable pouches for frozen applications. Consumers will be delighted to see packaging that also cares for the environment not just the products. GIC's developments on recyclable packaging solutions will help conserve resources and divert waste from landfills. Alternatively, compostable packaging can decompose or breakdown into natural elements in a particular environment and thus also reduce waste. Compostable packaging with 12 months of pet treat shelf-life was developed for i-Tail Corporation in 2023.

SPACE-F

SPACE-F, Thailand's first dedicated food-tech startup incubator and accelerator program, is a cornerstone of Thai Union's open innovation activities. SPACE-F was established in 2019 to grow a startup ecosystem dedicated to deep foodtech through the cooperation of Thai Union, the National Innovation Agency and Mahidol University's Faculty of Science. Support for the program has expanded to include Thai Beverage PCL, Deloitte Thailand, and Innovate360 of Singapore. SPACE-F's reputation has grown significantly and is recognized as a key contributor to the region's foodtech ecosystem. SPACE-F welcomed Lotte Fine Chemicals of South Korea as the newest international partner, growing the footprint of the program.

The startups in SPACE-F's 4 ^th cohort successfully conducted proof of concept trials, launched products into the market and received investment in 2023. The 4 ^th cohort consisted of 18 startups in total, with eight participating in the accelerator track and 10 in the incubator track. Startups joined from around the world, including 12 startups joining from ASEAN and six startups from North America, Europe and MEMA. The accelerator demo day was held on June 22, 2023 at SITE 2023 expo, with eight startups pitching to an audience of over 200 participants. The incubator demo day was held on August 16, 2023 at TechSauce Global Summit with over 300 participants. SPACE-F's Batch 4 cohort successfully raised USD 3.6 million during the program and locked in lucrative collaborations.

We continued our collaboration with Innovate 360 through a cross-border immersion program. Eleven SPACE F startups had the opportunity to visit Singapore to explore the local ecosystem and showcase their companies at Singapore's International Agrifood Week (SIAW) with great success. Following SIAW, SPACE F welcomed a Korean delegation of 12 startups to Thailand as part of the cross-border immersion program with Innovate 360. The Korean delegation had the opportunity to meet with key industry leaders in Thailand and visit local factories.

SPACE-F continues to prosper from the support of ThaiBev (a leading beverage producer in ASEAN) Deloitte (one of the largest professional services networks in the world) and Lotte Fine Chemicals, who are committed to continuing their support of the SPACE-F program as partners respectively in 2024. To date, alumni of the program have gone on to raise over USD 64 million and expand their global presence with operations in over 16 countries. We will continue to grow SPACE-F through additional collaborations in 2024 and will launch the 5th cohort in April 2024 with high expectations.

Thai Union Ingredients

Combining the importance of utilizing everything we harvest from nature with the growing demand for natural, marine derived ingredients, resulted in the creation of a new global Business Unit: Thai Union Ingredients (TUI). TUI valorizes the co-products out of seafood processing, transforming them into healthy and nutritious products. Currently, the focus is on expanding production and the commercialization of Omega3-DHA oils and proteins, including marine and fish collagen peptides.

TUI started with a crude tuna oil extraction plant in Thailand, near Thai Union's main tuna processing plants. The location ensures the extraction plant is supplied with fresh raw materials, which are passed through a low temperature extraction process, preserving functionality, and resulting in high quality crude tuna oil. TUI oils have the highest DHA content available in the market. DHA is a critical component for infant brain development and human health in general. Most of this pure high-quality crude oil is refined in TUI's refinery, which is based in Germany. In addition to the extraction plant in Thailand, TUI is now also sourcing high quality crude tuna oils out of Thai Union operations in the Seychelles and Ghana to further strengthen the supply chain and increase volumes.

TUI's oil refinery in Germany is fully operational and complies with the highest regulatory and customer requirements, also to fulfil the high standards applied by infant formula customers. TUI supplies refined tuna oil under the UniQ ^® DHA brand and also has the ability to winterize its products to increase the application range. Besides refined tuna DHA oil, TUI started to process other high value Omega3 oils, like algal oils and cod liver oils. The expansion of the product range also means a wider range of potential markets can be addressed, including infant formula, dietary supplements, clinical nutrition and functional foods. Customers can technically be supported by TUI's Omega3Center, which is based in Thailand.

TUI also has a tuna bone powder facility operational in southern Thailand. The powders are produced from fresh, food-grade, raw materials, without adding any additives, using a gentle manufacturing process to retain all-natural nutrients. The fine powders, which are neutral in taste and smell, are supplied under the UniQ ^® BONE brand. Products contain calcium and phosphorus in a ratio of 2:1, in its natural hydroxyapatite form, which is the same structure as in human bones and teeth. It also typically contains 17 percent naturally occurring collagen. It can be incorporated in various customer products without changing sensory attributes and mouthfeel, delivering a range of nutrients for bone health for application in human and pet nutrition.

The year 2023 marked an important milestone for the young TUI Business Unit. In quarter four, the new protein plant was commercially launched, capable of offering marine-tuna collagen peptides, freshwater fish-tilapia collagen peptides and fish protein hydrolysates. After a period of successful trials, the facility and team are ready for scale up in 2024. Core products will be the marine-tuna collagen peptides and the freshwater fish-tilapia collagen peptides, branded under UniQ ^® COL. The powders all have an excellent neutral sensory profile, great dissolving properties and are highly versatile, allowing for diverse applications in foods, drinks and supplements. TUI is targeting a) 'beauty from within' to support healthy skin, hair and nails, and b) consumers with a focus on improving bone and joint health. The fish protein hydrolysates are a high-quality protein source for application in pet food and pet nutrition supplements, available in both liquid and powder forms.

By valorizing the full potential out of seafood processing and utilizing as much as possible what we harvest out of the oceans, TUI contributes to Thai Union's vision to be the world's most trusted seafood leader, caring for our resources to nurture generations to come. TUI is fully committed to "Healthy Living, Healthy Oceans" and aims to become the leader in marine health and nutrition solutions.

Quality and Food Safety

THAI UNION QUALITY POLICY

Thai Union's top management recognizes the importance of food safety and product authenticity throughout the food supply chain. Thai Union is committed to taking responsible steps to continuously improve positive product quality and food safety culture and an authenticity of products throughout our businesses. The Company regularly develops and strives to continually improve our processes to ensure the delivery of safe food products through an efficient, effective, and suitable food safety management system. To ensure best practices, Thai Union has been certified on the internationally recognized Hazard Analysis Critical Control Point (HACCP) system and Global Food Safety Initiative (GFSI) certification food safety management system. The Company has defined the relevant regulatory requirements and the agreed customer requirements to ensure consistent compliance. Thai Union also focuses on creating a strong product quality and food safety culture through open communication with its employees at all levels irrespective of the size and complexity of the sites worldwide and also pays attention to assess attitudes and behaviors that relate to the product quality and food safety culture of Thai Union.

QUALITY MANAGEMENT SYSTEM: FOOD SAFETY AND HYGIENE

Our Quality Management System is the platform that we use globally to ensure consistent food safety, compliance with quality standards and to create value for consumers. Our internal Quality Management System is audited and verified by independent certification bodies to prove conformity to internal standards, international standards, laws, and regulatory requirements. The Quality Management System begins with the control of processes for externally provided materials. We work with our suppliers to help them improve the quality of their products. The system reflects key global food safety demands and addresses quality, integrity, environmental and social issues.

Thai Union's appreciation of the demands of consumers regarding quality and safety means we work with suppliers to help them create a quality product that can be delivered to market with little or no alteration.

To ensure the safety, quality and integrity of products through every stage of the supply chain, Thai Union regularly sends its representatives to conduct on-site audits, scrutinizing production line practices and standards. Our oversight of supplier standards involves the delivery of regular reports, as well as audits upon request or at specified times throughout the term of the contract. These risk management and auditing tools greatly increase the likelihood of suppliers meeting Thai Union's standards and initiatives on food safety.

The Company operates its own food testing laboratory with ISO/IEC 17025 accreditation from the Department of Medical Science, Ministry of Public Health, Thailand. The laboratory was recognized as the most outstanding laboratory in 2010 by the Ministry of Agriculture and Cooperatives' National Bureau of Agricultural Commodity and Food Standards.

We continuously strive for excellence in food safety, food integrity, environmental protection, and energy management systems, which are reflected in numerous national and international accreditations including: GHPs, HACCP, BRCGS, ISO 9001: Quality Management System, ISO 14001: Environmental Management System, Kosher, Halal, and Best Aquaculture Practices (BAP).

Our products include information for consumers to ensure that they are consumed safely. The products meet the highest level of quality as we have implemented a Combating Food Fraud and Food Defense Strategy to protect our food supply chains from any risk of intentional and unintentional contaminations.

THAI UNION'S FOOD QUALITY & SAFETY ACCREDITATIONS

OUR COMMITMENT TO CONSUMERS

PRODUCT QUALITY AND SAFETY FOR OUR CONSUMERS IS THAI UNION'S TOP PRIORITY, FORMING THE FOUNDATION OF ALL WE DO.

Our Business

OUR CORE PRODUCT CATEGORIES

"FOOD HAS BECOME A KEY PART OF OVERALL HEALTH AND WELL-BEING. IT'S NOT JUST ABOUT GETTING ENOUGH CALORIES"

IT'S ABOUT FOOD RELATED TO A BALANCED DIET INCLUDING GOOD NUTRITION AND A VARIETY OF NUTRIENT REQUIREMENTS.

AT THAI UNION, FOOD AND HEALTH ARE BEING PRIORITIZED. WE STRIVE FOR MORE INNOVATION AND ALWAYS COMMIT TO

"HEALTHY LIVING, HEALTHY OCEANS".

Ambient Seafood Business

The ambient seafood category is mainly composed of shelf-stable items that are primarily sold to consumers through retail channels and wholesalers. The key seafood species include tuna, sardine, salmon, mackerel, and herring. The business dynamics and margin trends of these items have some similarities. The key factor influencing consumers' purchasing decisions is brand reputation. A product with a well-known brand can increase its value, due to the brand's trust and differentiation from its competitors. Thus, consumer brands in this category generally command a price premium over their market price as well as the private label, so many alternatives are available. The level of the price premium will depend on the brand's market position, the competitiveness of the product category, the uniqueness of the brand, customers' experiences, and consumers' engagement with the brand.

In 2023, sales of this category amounted to THB 63.9bn, representing 47 percent of the Group's total sales, and were led by tuna products, which remain the largest product category for Thai Union Group. About 57 percent of these sales came from our own brands, while the remainder came from the private label or contract manufacturing sales and food services. Key customers in this category are wholesalers and modern trade, such as supermarket chains, convenience stores, and pharmacies. The typical packagings are sealed can, pouch, and tray with lid. Most products are ready-to-eat with a shelf-life of around up to 5 years and can deliver nutrient levels equivalent to freshly cooked foods.

Frozen and Chilled Seafood and Related Business

The frozen and chilled seafood and related business category are mainly composed of shrimp and salmon, which are normally sold directly to retailers, restaurants, hotels, and food catering as ingredients for additional processing to create completed dishes for consumers. However, these items are also sold directly to consumers through retail channels. The products generally need to be stored in refrigerators or freezers to preserve their quality and shelf-life. Moreover, the aquafeed business, which is operated by Thai Union Feedmill Public Company Limited, is categorized in this category as a related business because aquafeed (for shrimp and fish) is part of the aquaculture industry's upstream supply chain. This business will create a foundation and strengthen the food industry in Asia for its sustainable aquaculture business, as Thailand is one of the world's leaders in the fisheries industry.

In 2023, sales of this category amounted to THB 47.3bn, representing 35 percent of the Group's total. Shrimp contributed to the largest portion in this category, followed by salmon, other seafood and feed. Sales from our own brands (including industrial or non-consumer brands) accounted for about 35 percent of this category, while the remainder came from private labels and food services. However, most products are not ready to eat and the typical shelf life is less than a year, which is much shorter than ambient seafood.

PetCare Business

The PetCare category is now operated under Thai Union's subsidiary, i-Tail Corporation Public Company Limited. PetCare products are mainly composed of wet-based food and treats, which are normally sold under private labels or clients' own brands. However, these products are also provided under our own brands to test end customer response to new innovative products on behalf of our customers. The business dynamics and per-capita spending growth is higher than human food. The key factor is constant dialogue with customers to provide support on product strategy and co-creation of new products, that suit the changing needs of customers and align with global trends in the pet food market.

In 2023, sales of this category amounted to THB 15.1bn, representing 11 percent of the Group's total. Sales from our own brands only accounted for about 0.3 percent of this category. In other words, most products are produced for our clients' own brands or distributed through their own channels. Key customers in this category are pet food brand businesses, modern trade & specialty stores (including online), and brokers and exporters. The typical packagings are a sealed can, sachet, pouch, and tray with lid.

Value-Added and Other Businesses

The value-added and other business categories combined a variety of various product categories. Due to the diversity, there is no common pattern demonstrated among these items in terms of sourcing, distribution, or consumption. Key items in this business segment include packagings such as cans for processed food, printing labels, and others, as well as high value-added products, mainly ready-to-cook and ready-to-eat products such as Chinese dim sum and bakery (namely, pies, cake, or bread), and other products. The value-added business also includes two subsidiary companies and one business unit, namely Thai Union Ingredients Co., Ltd, Thai Union Lifescience Co., Ltd., and Thai Union Alternative Protein. The details are as follows:

Thai Union Ingredients Co., Ltd. was set up in 2017. The main purpose of this business unit is to maximize coproduct utilization in our processing facilities, particularly fish skin, fish head, and fish bone. The valuable nutrients derived from these coproducts include omega-3 fatty acids from tuna oil, calcium from fish bone, and collagen from fish skin. These products will be marketed in a business-to-business or B2B format. For protein hydrolysate and collagen peptide plant, collagen peptide line has been completed in the third quarter of 2023 and protein hydrolysate line is expected to be commercialized in the second quarter of 2024.

Thai Union Lifescience Co., Ltd. (Supplement) was set up in 2021. It aims to serve the demands of customers, who are becoming more health-conscious and place a higher importance on their overall well-being. Thai Union Lifescience launched its owned brand "ZEAVITA" with a wide range of products serving various consumers' needs like Collagen, Calcium, Fish Oil and Multi-Vitamins, which is available at Watsons, 7-Eleven, E-Commerce, and top pharmacies.

Thai Union Alternative Protein is another business set up in 2021, aiming to meet the growing consumer demand for healthy, environmentally friendly, and sustainable products. This business unit integrates Thai Union's expertise in seafood processing with new innovative technologies, focusing on developing a plant-based seafood category. Plant-based protein is a healthy choice as it is cholesterol-free, low-saturated fat, and high-fiber content. Most of the Alternative Protein products are private label. Additionally, they are also sold under Thai Union's own brand "OMG Meat", which has now delivered a wide range of plant-based seafood products such as hoi jor, crab shumai, crab meat, and shrimp wontons.

In 2023, sales of Value-added and other businesses amounted to THB 9.9bn, representing 7 percent of the Group's total. Sales from our own brands only accounted for about 17 percent of this category. The value-added and packaging business represents the largest portion of this category, and the majority are produced for our Thai Union Group. Despite these products don't have any common pattern, they generally command higher margins due to integrated innovation and new technology, which enhance the value of the product and enable Thai Union to expand into new market segments.

Sales Breakdown

Group Business Structure

Company policy on the management of the operations of the Group

Thai Union Group manages the operations of the Group by dividing reporting lines by region i.e. Asia, Europe & Africa, and North America. The structure of the companies within the Group is illustrated below:

Details of the Company, Its Subsidiaries and Associated Companies and Joint Ventures

Shareholding Structure

Remark : Closing the registration book on the 31 December 2023 and based on total number of shares of 4,655,132,696 at the par value of THB 0.25 and including their associates and persons who are under controlling persons.

Sales Structure of Thai Union and Subsidiaries

Unit: THB Billion

Remarks:

The above data refers to sales structure after exclusion of intercompany transactions.

^* Owned by Subsidiaries of TU

Investment Promotion Act

Benefits from Invesment Promotion Certificate (BOI)

Industry Overview

The seafood industry continues to play a significant role in global food production. In 2023, fisheries and aquaculture production are estimated to have experienced a slight increase of 0.6 percent compared to 2022. This growth was primarily driven by the ongoing expansion in aquaculture, offsetting a decline in fisheries production. Challenging weather conditions (i.e., El Niño) and reduced fishing quotas led to an approximate 2 percent decline in capture fisheries production in 2023. Despite rising feed costs, the aquaculture sector continues to experience steady growth due to technological improvements, currently growing at about 3 percent, and is estimated to achieve a production volume of 96 million tonnes of aquatic animals in 2023. With sustained growth, especially in Asia, Europe, Latin America, and Oceania, the total production of aquatic animals is expected to surpass 202 million tonnes in 2030.

While concerns of an economic downturn eased somewhat, various global economic factors are still threatening the growth of the seafood industry, including inflation, energy prices, and global conflicts. Throughout 2023, domestic food price inflation maintained its high trajectory, with many countries experiencing double-digit inflation rates. This trend restricted overall consumer spending, including seafood consumption. Moreover, there was a shift in customer preferences towards more affordable farmed fish, as opposed to increasingly expensive wild-caught fish. The Russia-Ukraine war intensified the global energy crisis, resulting in a rise in energy prices. This surge in energy costs hindered economic growth, diminishing the overall returns of seafood processors due to increased expenses in production, transportation, and distribution.

Seafood prices were on an upward trend throughout 2023, with the value of global trade in aquatic products surpassing the previous year. The FAO Fish Price Index rose from 122 points at the beginning of 2023 to 130 points in April. Corresponding to the price rise, total exports in 2023 went up by approximately 1 percent compared to the previous year, reaching USD 192 billion, while volumes remained relatively unchanged with an increase of around 0.3 percent in the same period.

KEY SEGMENTS AND REGIONS

The processed seafood market is divided into three primary segments: chilled, frozen and shelf-stable. In 2023, this market demonstrated mid-single-digit growth. Chilled and shelf-stable seafoods dominated the global processed seafood market. While chilled seafood held the largest market share, it exhibited the weakest growth with low single-digit expansion. Conversely, shelf-stable seafood exhibited the most rapid growth with a high single-digit increase, followed by frozen processed seafood with mid-single-digit growth.

In 2023, major seafood markets, including Japan, China, and the EU experienced a noticeable slowdown in growth. In contrast, the U.S. market maintained a steady mid-single-digit growth rate, primarily due to weakened consumer spending power. Japan retained its position as the largest market for chilled processed seafood, commanding roughly half of the market share, while the U.S. took the lead in frozen and shelf-stable seafood products. Despite the industry's deceleration, Russia and Brazil maintained strong growth with a double-digit growth rate.

COMPETITIVE LANDSCAPE AND PRICING TRENDS OF OUR MAIN RAW MATERIALS: TUNA, SHRIMP AND SALMON

TUNA

In the first half of 2023, the tuna catch rate in major fishing grounds saw a marginal decline compared to Q1 2022. This decrease had a ripple effect, leading to an increase in frozen raw material prices. Rising raw material costs have coincided with the reduction in global demand for frozen tuna raw material and end products.

Frozen tuna prices started the year at an elevated level and remained so throughout the year, continuing the upward trend since October 2022. The delivery price of frozen skipjack to Thailand reached a five-year peak, hitting USD 2,000-2,030 per ton during April to July 2023, driven by a decrease in supply. Moreover, prices of pre-cooked skipjack loins also soared, reaching high levels at USD 6,670 and USD 8,800 per ton. Faced with these elevated costs, tuna canners worldwide became cautious, limiting raw material imports. The overall supply of tuna is anticipated to be weak due to reduced fishing operations, creating the way for potential price increases.

NON-CANNED TUNA TRADE

The largest markets for non-canned tuna were in Japan, the U.S., and the EU. The post COVID-19 reopening restored the demand for premium-quality fresh and frozen tuna, as seen in Japan, where imports of fresh and frozen tuna imports surged by 20 percent in Q1 2023.

On the other hand, there was limited consumer demand from both the U.S. and the EU. In Q1, European frozen tuna fillet imports fell by 25 percent, and the U.S. also saw about a 40 percent decline in frozen tuna fillet and steak imports due to weak retail demand. Additionally, Thailand frozen raw tuna import volumes dropped by 14 percent between Q1 and Q3 2023 compared to the previous year. While frozen tuna imports slowed down, fresh tuna gained popularity with increased import volumes in both the U.S. and the EU.

CANNED TUNA TRADE

International processed and semi-processed tuna trade started weakening in the last quarter of 2022 due to escalating tuna raw material prices, and this trend persisted into 2023, driven by the slowdown in Western markets. Rising end product prices led to flat demand in the U.S. and Europe. The U.S., the largest market for ready-to-eat tuna, experienced an approximate 5 percent increase in processed and canned tuna imports, while the EU imported nearly 3 percent less during Q1 2023 compared to the previous year.

During the first half of 2023, canned tuna exports from Thailand, Ecuador, and China saw a decline. Krungsri reported that while domestic canned tuna consumption in Thailand surged by nearly 60 percent year over year in the first five months of 2023, production declined by roughly 12 percent year over year. Additionally, demand for canned tuna in Southeast Asia remained consistently low.

SHRIMP

The weakening global economy and rising inflation brought substantial challenges to the shrimp industry. International shrimp trade remained weak, despite lower prices compared to 2022, reflecting reduced consumer demand. Imports declined in most countries, except China, which saw a significant 33 percent increase in Q1 2023 compared to 2022. Despite rising production costs affecting shrimp farmers throughout H1 2023, Ecuador, a leading producer, increased its production by 43 percent year over year in the first quarter.

As a result of excess inventories since 2022, the U.S. experienced a continuous decline in imports, with an 18 percent drop during H1 2023, before a recovery in August. Affected by high inflation, consumer demand for shrimp throughout Europe was weak in the retail and restaurant sectors. Consequently, there was a 15 percent reduction in import value and a 10 percent decrease in volume during H1 2023. On the other hand, Japan saw a five-year low in total shrimp imports in the first quarter of 2023, especially in value-added shrimp products.

Asian shrimp farmers reacted to falling farm gate prices and weak demand from Japan, Australia, and major Western markets by reducing production volumes. The drop in shrimp prices can be linked to Ecuador's significant production expansion over the past few years, aimed to achieve 1.5 million tons in production by 2023. This response was compounded by a significant increase in production costs, which escalated by approximately 15-20 percent since 2022. Additionally, consumers became more financially conscious, tackling surging fuel prices, inflationary pressure, and increased logistics expenses. These situations have left a degree of uncertainty in the market, with the possibility of prices falling even further.

SALMON

The salmon market experienced healthy growth, propelled by consumer health considerations, availability, the strength of the U.S. dollar, and supply constraints. However, tight government regulations on overproduction and fish escapes, and increased taxes in Norway and the Faroe Islands, pose potential threats to the future of Atlantic salmon supply. Export values were notably elevated, primarily due to higher salmon prices. The U.S. saw a 5 percent increase in volume and an 8 percent increase in value in Q1 2023 compared to the previous year.

Despite consistently high salmon prices throughout the year, consumer demand remains strong. The NASDAQ salmon index peaked at over NOK 125 per kg, followed by a decline in Q2 and Q3. Prices for fresh Chilean Atlantic salmon fillets exports to the U.S. market reached nearly USD 6 per kg, beginning an upward trend from July. According to the FAO, global salmon production is projected to grow by approximately 4 percent in 2024, exceeding 3 million tons. However, the lack of growth in supply for farmed salmon will continue to drive high prices until at least 2025.

SOURCES: FAO, GLOBEFISH, WORLD BANK, World Economic Forum, NOAA, International Trade Administration, U.S. Department of Commerce, Krungsri, TTIA

COMPETITION AND INDUSTRY TRENDS

Billions of people worldwide depend on seafood as their primary protein source. There is a growing need to boost seafood production to tackle global food insecurity. Despite projected 15 percent growth in aquatic food production between 2020 and 2030, the world is still falling short of achieving its goal to end hunger and malnutrition.

The seafood industry is known for being highly challenging and constantly evolving. Thai Union, as one of the world's largest seafood producers, continues to face macro-economic uncertainty and competition in our core businesses of tuna, shrimp, and salmon. Volatility in raw material pricing, inflation, foreign exchange rates, shifting consumer demands, geopolitical tensions and sustainability concerns present as key challenges faced by seafood players. Moreover, alternative protein is expected to become an increasing part of consumer diets. The seafood processing industry in our key markets (U.S., EU, Thailand, Japan and other emerging nations) continues to be fragmented (see brand share section on page 30-31).

The industry's long-term growth depends significantly on aquaculture production. Substantial changes in policy, management, innovation, and investment are required to facilitate the expansion of the seafood industry. Additionally, there is also an expanding market for by-products of seafood processing which includes applications in nutraceuticals, pharmaceuticals, biomedicals, fertilizers, animal feed, pet food, and more. Thai Union has also ventured into the innovative utilization of tuna byproducts through tuna oil and nutritional supplements. Furthermore, the bond between people and their pets is strengthening through the trend of pet humanization, leading to increased demand for premium pet products and services, presenting an attractive opportunity for Thai Union, which also plays a significant role in the global pet industry.

Sustainability remains one of the focus areas for the seafood industry, responding to growing concerns from consumers, customers and governments. Consumers are becoming increasingly aware of the environmental impact of their food, including their seafood choices, and are showing a preference toward sustainably sourced products. This shift in consumer demand has encouraged many seafood companies to strive for sustainability certifications from organizations such as the Marine Stewardship Council and Aquaculture Stewardship Council to build trust and confidence among customers. However, there continues to be a need for seafood companies to be more transparent in their supply chains. Governments worldwide are recognizing the need for sustainability in seafood production, supporting sustainable fisheries and aquaculture operations while combating illegal, unreported, and unregulated (IUU) fishing. As the seafood industry continues to embrace sustainability, it is contributing to the long-term health of our oceans and marine ecosystems.

Factories and Capacity

Thai Union and its major affiliates worldwide are seafood processors with combined production capacity (metric ton of raw material) of over 800,000 tons per year. The production capacity for tuna, frozen shrimp, sardine and salmon are roughly 570,000, 60,000, 150,000 and 20,000 tons respectively, while PetCare are roughly 195,000 tons of finished products.

In this regard, Thai Union Group has 24 entities with operating factories which can be divided by region as follows:

List of entities with operating factories under Thai Union Group

Asia
12 Companies

Europe & Africa
11 Companies

North America
1 Company

Pending for Delivery Note

Given the nature of Thai Union Group's business, it does not operate a high value project.

Dividend Policy

Thai Union Group PCL's dividend policy is to pay at a rate of not less than 50 percent of net profit each year. The Company has been dividing dividends twice a year, due to careful management and the ability to adapt to the changing business environment. The Company had paid out the interim dividend payment for the first-half operational period equivalent to THB 0.30 per share on 4 September 2023 and will pay final dividend equivalent to THB 0.24 per share on 26 April 2024. Therefore, the total dividend for 2023 will be THB 0.54 per share.

Details of Dividend Payment

^* Net profit after interest paid on perpetual debentures

^** Normalized operation excluded THB 18,433 million one-time non-cash impairment of Red Lobster and IFRS 5 reclassification.

Subsidiary Policy

As for the subsidiary, the dividend payment will depend on the operating results and the need to use capital to expand the business in the future. However, if the subsidiary has profits and there is no need to reserve capital for business expansion in that year, it will pay dividends at a rate of not less than 50 percent of net profit each year.

In all cases, dividend payments shall depend on cash flow, investment plans including any other future obligations of the Company and/or subsidiaries. Such dividends shall not exceed the retained earnings of the Company financial statements nor significantly affect the Company and subsidiaries' ongoing operations.

Debentures of Thai Union Group Public Company Limited

^* Debentures that have been redeemed

^** Coupon rate details:

For the first five years: fixed interest rate of 5.00 percent per annum

For Year 6 to Year 25, at an interest rate equal to the sum of (a) Reference Rate (b) Initial Credit Spread; and (c) a rate of 0.25 percent per annum

For Year 26 to Year 50, at an interest rate equal to the sum of (a) Reference Rate (b) Initial Credit Spread; and (c) a rate of 1.00 percent per annum

For Year 51 onwards, at an interest rate equal to the sum of (a) Reference Rate (b) Initial Credit Spread; and (c) a rate of 2.00 percent per annum

The interest rate shall be adjusted to reflect the Reference Rate being adjusted every five years by reference to an Interpolated 5-year Government Bond Yield curve.

^*** Coupon rate details:

^**** Coupon rate details:

^***** Coupon rate details:

02 Risk Management

Risk Management Policy and Governance

Thai Union Group was listed on the Dow Jones Sustainability Indices (DJSI) for the 10th straight year in 2023. Additionally, the Company was awarded the 'Environmental & Social Management (ESRM) Pioneer Award, hosted by ERMA (Enterprise Risk Management Academy), for demonstrating exceptional proficiency in integrating environmental and social considerations into its risk management strategies and emphasizing our Sea Change ^® 2030 commitment.

The Company is aware of the importance of risk management and is committed to systematic and consistent risk management throughout the Company and its subsidiaries with an aim to promote good corporate governance, bolstering confidence among investors, and facilitating the achievement of the Company's commitments to 'Healthy Living, Healthy Oceans' and making progress towards it. With the difficult headwinds from global challenges, the Company has continued to demonstrate the desire to embed risk culture through all business levels.

Risk management structure, roles and responsibilities are clearly established. The Board of Director (BoD) provides important oversight to enterprise risk management, and is aware of and concurs with the Company's risk appetite level. The BoD appointed the Risk Management Committee (RMC) to oversee risk management implementation and regularly reports risks and mitigations. The RMC is diverse, composed of independent directors and top executives, while the chairman of the RMC is an independent director. They possess the expertise and knowledge in the Company's business and risk management. The President and CEO is to ensure the appropriate and effective implementation of risk management throughout the organization. The Group Risk Management and Internal Control function, directly reports to the RMC and dotted reports to the President and CEO and plays an important role in implementing the risk management program at a Group level, while providing advice and guidance on the risk management framework and process to risk enabling function. Risk owners implement risk management according to Thai Union's guidance. Management and employees are responsible for managing risks in their areas of responsibility.

Throughout many years, the Company has been continuously improving the risk management program to respond with business desires by embedding risk management in different areas:

1. Governance and Reputational risk: The Company formulates the Nomination Remuneration and Corporate Governance Committee. The majority of members of the Committee are independent directors and have the qualifications required by the Office of Securities and Exchange Commission. They are knowledgeable, competent, and experienced and thoroughly understand their duties and responsibilities to oversee the Company's nomination remuneration matters, corporate governance standards, securities trading policy and corporate governance best practices.

2. Strategic risk: The Company integrates risk management in the business planning process, formulates mitigation plans during the business planning process from different scenarios. As such, macroeconomic and supply chain challenges are assessed by the Global Leadership Team (GLT) and reported to the Nomination Remuneration and Corporate Governance Committee.

3. Sustainability - related risk: The Company has appointed a Sustainable Development (SD) Committee. The SD Committee is chaired by the CEO and co-chaired by the Group Director of Sustainability, and brings together key senior executives to review progress towards sustainability commitments, consider and assess emerging issues, and make strategic decisions to drive Thai Union's sustainability initiatives. Through the Company's global sustainability strategy, SeaChange ^® , the Company is working to implement programs that deliver long-term and sustainable change. In 2023, the Company announced a major update to SeaChange ^® with new goals and new commitments through to 2030.

4. Financial risk: The Company manages financial risk according to the Company's Financial Risk Management and Treasury Policy and the policy is reviewed annually and approved by the Executive Committee (EXCOM). As such, a hedging program is in place to manage the volatility of foreign exchange rates, interest rates and seafood raw materials.

5. Cybersecurity: The Company has appointed an IT Security Committee, chaired by the CEO & President, to oversee IT security policy, practices and ensure that those are aligned with business directions and can effectively prevent cyberthreats to business operations.

6. Investment risk: The Company implements a clear investment playbook for how Thai Union Group should pursue investments going forward to ensure alignment with the growth strategy, systematic screening, and rigorous due diligence/ decision-making process and, monitoring investment which is steered by the Executive Committee (EXCOM) and the risk management process is embedded to strategic investment.

Risk Management Culture

To cultivate a risk management culture, the BoD promotes risk management as part of the organizational culture and is aware of existing risks and mitigation plans. The Company promotes and enforces the consistent and effective risk management to become a part of the organizational culture. The policy, framework, guidelines, and structure on risk management demonstrate formal communication systematically and consistently. Management personnel embed risk management in business decisions, with no compromise even if it presents higher costs or more operational challenges Employees are encouraged to have a positive attitude towards proper risk management from their first day and throughout the employee's lifecycle; for example, new joiner program, regular risk management training, activities, and internal news updates.

In 2023, training programs were conducted regularly to uplift perspectives towards risk management; for example; training to BoD by "Directors Accreditation Program organized by Thai Institute of Directors Association" and "Insider Dealing and Relevant Disclosure Obligations by Allen & Overy (Thailand) Co., Ltd.".

Incentives
Providing the right motivations

Awareness of risks is emphasized from the very first day and throughout the employee's lifecycle

Risk Framework
Taking the right risks

Risk appetite is cascaded throughout the firm where risks are communicated with openness

Leadership
Communicating the right messages

Risk management is top of mind for top and middle management, who set desired behavioral standards

Organization
Establishing the right environment

Clear accountabilities around risk management with quality of risk governance structure

Risk Management Framework

The Company's risk management framework is in accordance with the international standards of COSO ERM. It is a guideline for management and employees to operate consistently. The framework is designed to identify, assess, manage, monitor, and communicate systematically and consistently in order to minimize the probability of risks occurring and limit their potential impact on Company business. Thai Union Group processes risk management at a Group level, business segment level, and entity level. The quarterly risk exposure review is conducted with the entity risk coordinator, risk owner and Risk Management Committee (RMC). In the meantime, the RMC presents quarterly reports about significant risks, mitigations, and improvements to the BoD.

In addition, the Company commits to continuous improvement in risk management practices, thus self-evaluation of RMC and employee risk management feedback on the risk management process is regularly conducted for further improvement.

Risk Appetite Statement

Risk appetite is an important factor to consider when Thai Union Group sets strategies and determines the direction of risk management. High and Medium-High are considered to exceed the acceptable level and require the immediate actions or mitigation plans. Below are the examples of Thai Union Group's risk appetite:

Health & Safety:

We are not willing to accept any permanent disability or death from work-related injuries. We will ensure the safety of everyone at our sites around the world.

Business Interruption (Plant):

We are not willing to accept any incidents causing unplanned plant shutdowns or impacting daily plant capacity. We will strive to reduce the likelihood and impact of the incidents impact more than 1 day.

Anti-Bribery and Corruption:

We have zero-tolerance towards bribery and corruption and comply with the anti-bribery and corruption laws everywhere Thai Union Group does business.

Key Risk Indicators (KRIs)

For materiality risks, Key Risk Indicators, or KRIs, are set up and closely monitor movement. KRIs provide an early signal of increasing risk exposures in various areas of the enterprise and combine of lagging and leading indicators. For example, the Company monitors FX ratetrends, changes in laws and regulations, and global incident cyberthreat trends.

Risk Factors on Business Operations

Thai Union Group is a global seafood processing company, and its operating and financial results are subject to a variety of risks inherent in the seafood industry. The Company can prepare for many of the risks to mitigate any impact and/or minimize the likelihood, however many of them are not within our control and could impact the Company's operations, financial position, reputation, and commitment to stakeholders. Thus, the Company defines the risk management framework and manual to cover the impact in seven (7) perspectives.

The above risk radar provides an overview of key business risk factors and emerging risks to Thai Union Group at the end of 2023 and risk level evolution compared to 2022. To ensure the emerging risk is within the Company's radar, Thai Union Group conducts the annual risk assessment workshop with the Global Leadership Team (GLT). The inside-out and outside-in environment from the global risk survey was incorporated in the workshop assumption to illustrate long-term risks that can implead the Company's strategy and business objectives.

In addition to the risk radar, Thai Union Group is aware of the most severe emerging risks on a global scale over the long-term such as biodiversity loss, employment crises, social cohesion erosion, livelihood crises, infectious diseases, human environmental damage, natural resource crises, debt crises, and geoeconomic confrontation. Those emerging risks are incorporated in the annual risk assessment workshop with the GLT in order to ensure the emerging risks are assessed and captured at the early stage.

The following pages provide descriptions of key risks and their potential impact, management and mitigation linked to ESG aspects, which management and the Company's mitigation plan aim to improve ESG-related factors.

Improves ESG-related factors below

Economic and Global Supply Chain Challenges

Description and Impact

In 2023, Thai Union Group's business front faced global challenges from an economic downturn, tightening monetary policy leading to inflation and financial market volatility, geopolitical tensions and climate change especially El Niño La Niña. These factors had a direct and indirect impact to Thai Union Group through stagnating demand in some regions and product categories, higher cost of funds and higher material and conversion costs.

Management and Mitigation Plan

The Company is fully aware of the unfolding headwinds of global challenges that could continue to pressure the Company's strategic objectives. Thus, the Company, led by the Global Leadership Team (GLT) have ideated a three year (2024-2026) mitigation plan for coping with economic and supply chain challenges for both business-as-usual and worst-case scenario. The following mitigations are provided to minimize the risks with the aim of seizing opportunities.

Improves ESG-related factors below

Cybersecurity

Description and Impact

Predicting future cyber threats is challenging due to the evolving nature of cybersecurity and digital landscape. However, it is anticipated that threats like sophisticated ransomware attacks, supply chain vulnerabilities, and AI-driven cyber threats will persist. The overall impact extends to the loss of reputation and law enforcement, trust from stakeholders due to compromised data integrity and security breaches. Vigilant cybersecurity measures are crucial to mitigate these risks and safeguard from regulatory compliance, operational continuity, and stakeholder confidence.

Management and Mitigation Plan

Improves ESG-related factors below

Investment Risk

Description and Impact

Our strategy aims to create long term value, continuously growing our core businesses, while also seeking opportunities to diversify our Group portfolio by expanding into attractive businesses along our value chains, with a focus on PetCare, the feed business and alternative protein. We also explore new businesses that tap into the large opportunity to valorize our co-products and create high-margin and high-growth businesses, focusing on ingredients, supplements, and alternative protein businesses as well as innovative food-tech startups.

Doing so not only brings us numerous opportunities but also exposes us to risks of lower-than-targeted returns on investment, laws and regulations, technology selection, resource management, and other sustainability related issues.

Management and Mitigation Plan

We have enhanced the investment process to minimize risks as well as provide a balance with business opportunities:

Improves ESG-related factors below

Uncertainties in Financial Markets, Currency, and Interest Rates

Description and Impact

With a presence in a large number of countries, the Company is exposed to a variety of financial risks coming from foreign exchange, interest rates, liquidity, trade receivables, counterparty risk, theft and fraud risk, geopolitical risk, investment and borrowing activities, etc.

The risks are primarily:

1. Foreign exchange risk on commercial flows, financing/investing activities, net investments in foreign subsidiaries and raw materials or ingredients purchasing in foreign currencies and selling of products in different currencies.

2. Interest rate risk on borrowings

3. Credit risk and counterparty risk on financial and commercial activities

In 2023, there were significant uncertainties from geopolitical conflicts, the U.S. financial sector and banking system risks in both European countries and the U.S., commodity price fluctuations, the global transformation in monetary policy from quantitative easing to quantitative tightening to deal with rising inflationary pressure globally, and anticipation of a global recession at the same time. Higher for longer interest rates in most of the counties around the world also create greater pressure to the business performance from much higher finance cost. These events also created financial risks, especially foreign exchange to key currencies that the Company has businesses in i.e., USD, EUR, GBP, JPY, CNY, and THB.

Apart from the above-mentioned factors, the replacement of benchmark interest rates, namely the London Inter-Bank Offered Rate (LIBOR) and other impacted interbank-offered rates (together with LIBOR, the 'IBORs') has become a priority for global regulators, financial institutions, and corporates. The IBORs are being replaced by Risk Free Rates (RFRs) which provide robust and credible overnight reference rates and are well suited for many purposes and market needs. Instead of using cash, loans, bonds and derivatives, the market transitioned to RFRs in 2022. The UK Financial Conduct Authority (FCA) confirmed on March 5, 2021 that all LIBOR settings will either cease to be provided by any administrator or no longer be representative. In the case of all Pound Sterling, Euro, Swiss Franc and Japanese Yen settings, and the 1-week and 2-month USD settings, the replacements ended on December 31, 2021. However, in the case of remaining USD settings, namely USD Overnight, 1-month, 3-month, 6-month and 12-month tenors, the replacement was completed in June 30, 2023.

After 30 June 2023, the market participants can no longer to enter new contracts that reference overnight, 1-month, 3-month, 6-month and 12-month USD LIBOR and any existing legacy contracts that mature after June 30 should be amended to reference SOFR or include relevant fallback provisions. In order to avoid any operational issues or market disruptions, the Company and relevant parties have to ensure that they are operationally ready to trade/execute on a Secured Overnight Financing Rate (SOFR) and should not delay remediating existing contracts.

The SOFR is currently a benchmark interest rate for dollar-denominated derivatives and loans that completely replaced the LIBOR. The SOFR is also based on transactions in the treasury repurchase market and is preferable to LIBOR since it is based on data from observable transactions rather than estimated future borrowing rates. While SOFR became the benchmark rate for dollar-denominated derivatives and loans, other countries including Thailand have sought their own alternative rates, such as SONIA, EONIA, and THOR.

Management and Mitigation Plan

The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. The Company uses derivative financial instruments to hedge certain exposures to stabilize future earnings. The Financial Risk Management Policy is carried out by the Group Executive Committee. The Company's policy includes areas such as foreign exchange risk, interest rate risk, liquidity risk, counterparty credit risk, raw material risk and operational risk.

The framework parameters are approved as shown below:

1. For foreign exchange risk, the Company's policy, and strategy to manage risks are as follows:

2. For interest rate risk, the Company manages or caps portions of borrowing by using interest rate derivatives to achieve an acceptable targeted level of fixed/floating rate net borrowing. This could lower the impact of higher interest rates and at the same time, the Company also requires to keep this at the optimal level of fixed interest rate as fixed interest rate generally stay at a higher rate compared to floating basis interest rates. Additionally, the Company also focuses on inventory management and net working capital control.

3. For counterparty credit risk, the Company has policies, procedures, and controls to minimize the risks, while trade insurance, AR factoring program, and credit limit monitoring and control have been implemented for most of our third-party customers.

The Company had considered and managed all transactions regarding to the transition of IBORs. The changes are limited to the IBORs and may impact the Company depending on the reference rates used in the loan instruments, lease contracts, bonds, derivatives, and hedge accounting. As a result, the Company has considered transitioning the financial instruments and the hedging derivatives to the relevant replacement benchmark at the same time. In doing so, we believe that the Company's financial statements will be best reflected in the economic effects of the IBORs cessation.

Improves ESG-related factors below

Operation and Safety

Description and Impact

In every production facility, the Company faces various potential risks, starting from sourcing raw seafood materials to processing and manufacturing finished products. These risks involve, for instance, the health and safety of employees, major damage to a plant, food quality, cost control and inventory management. These risks could directly or indirectly affect production, sales targets, and ultimate corporate goals.

Key areas for continuous improvement include:

Management and Mitigation Plan

The Company focuses on operational excellence and recognizes the importance of Continuous Improvement discipline. Regarding safety risks, we regularly conduct a risk assessment for each production plant as risk profiles change over time (both man-made and natural disaster), as well as constantly assess the gap against our safety standards. Several management engineering and management mitigation programs were put in place, for example the development of a master plan which includes standardized practices (see the Company's SHE Management Framework) and needed investment, especially risk reduction programs for machine, fire and ammonia.

The Company has also strengthened our new-project investment and changes in plant design, construction, equipment, machinery, and others that could create Safety, Health, and Environment (SHE) risks, to ensure proper integration of SHE considerations before investment approval. Moreover, the Company has introduced the SHE skill and competency assurance with an aim to build a safety culture at Thai Union. In terms of cost productivity, we put in place well-structured programs and dedicated CAPEX to increase productivity across the Group. For example: automation process, Total Productive Maintenance program, Labor Optimization Continuous Improvement program, increasing the percentage of RFT (Right First Time) in our production.

For food safety and quality, the Company's Quality Management System is the platform which the Company deploys globally to ensure consistent food safety, compliance with quality standards and to create value for consumers. The Company's internal Quality Management System is constantly being audited and verified by independent certification bodies to strictly conform to internal, and international standards, laws, and regulatory requirements. Several of the food quality and safety accreditations or certifications the Company has obtained are, for example: ISO 9001, ISO 14001, TIS 18001, BRC, BAP, GMP, HACCP, Halal, Kosher

Improves ESG-related factors below

Climate Change

Description and Impact

Climate change presents a global risk as the planet continues to warm, including the threat of increasing extreme weather events. A warming planet is also impacting the world's oceans, which pose a risk to marine species and aquaculture production on which Thai Union depends. Severe weather and natural disasters which are associated with climate change include floods, droughts, and tsunamis, as well as ocean warming and acidification, which could all impact our production, raw material supply and human resources.

Management and Mitigation Plan

Thai Union operates with a strong commitment to respect and responsibility, showing a duty of care to our workers through responsible operations. We have a number of initiatives in place that contribute to water reduction, waste to landfill reduction, greenhouse gas emission reduction and monitoring natural disaster hazards and water risk management. We want everyone that works at Thai Union to play an active role in delivering against our environmental and safety goals. We see safety and environmental protection as everyone's business.

In 2023, Thai Union has committed and implemented a number of initiatives, including:

Improves ESG-related factors below

Raw Material - Tuna

Description and Impact

In 2023, the price of Skipjack tuna (Bangkok landings/ Western Pacific Ocean), which was sourced mainly for our tuna ambient OEM business, was volatile and required a higher budget of approximately 12 precent. The price of Skipjack tuna from other oceans was aligned with the budget, while the price of Yellowfin tuna was below budget by 15 precent in all oceans due to lower demand from the frozen market. Supply was just sufficient to serve demand due to lower than expected fishing.

Management and Mitigation Plan

The Company has a global fish procurement organization with a team of experts to enhance our strategic sourcing capability and supply chain management of fish. With centralized sourcing, the Company leverages our global scale and builds best-in-class sourcing capabilities. On the operational level, the team closely monitors and mitigates challenges around prices and supply that are common in our business today. This improvement has increased communication and information transparency throughout the supply chain of all Thai Union factories. The Company was able to diversify the supply sources and procured raw materials from various oceans to mitigate the challenges of supply. In response to specific area low fishing, we mitigated the risk by continuing to diversify sourcing from other oceans, while controlling price for delivered Tuna and expanded cold storage facilities of Pioneer Food Cannery (PFC) in Ghana.

Improves ESG-related factors below

Raw Material - Shrimp

Description and Impact

Global white shrimp raw material volume increased slightly in 2023, contributed mainly from Ecuador which had supply around one fourth of global supply. Many countries such as the U.S., EU and South Korea have high shrimp inventory carried from 2022 which made demand from shrimp processors weaker due to declining orders globally in 2023. For Thailand, farmers increased selling prices for business continuity, otherwise, some might produce less or stop farming and the supply could be less in a later period. As a result, Thailand shrimp prices were not competitive compared with Ecuador, India, Indonesia, and Vietnam. Thai shrimp supply was similar to 2022 with no significant improvement due to the economic and global market situation.

Management and Mitigation Plan

Value-added products, product innovation, an industry leading sustainability program (SeaChange ^® ) and global food safety standards are core competitiveness which build adhesive customer relationships on a global scale. Strengthening our supply chain, increasing flexibility, and developing more alternative suppliers and sourcing options will ensure a right fit to serve a particular customer and product customization requirement.

As one of the leading companies in the Thai shrimp industry, it is our goal and obligation to develop the Thai shrimp industry and supply chain, as well as ensure continuity of business to stakeholders. We launched the "Shrimp price insurance project" during the year to stimulate shrimp farming and ensure sufficient output during the next harvesting season. Thai Union also utilized a small portion of imported shrimp as safety stock during the off-season when certain sized shrimp raw material is not available (e.g., big size >40-50 count/kg). As a result, the implementations provide good balance of flexibility in our processing operations, supply-chain development and business continuity of stakeholders in the Thai shrimp industry. In terms of product innovation, we focus on improving consumer quality of life by adding nutrients, reducing cooking time or making cooking simple. We launched Red lobster-brand pre-fried stuffed shrimp product for U.S. retailers. It is simply cooked for several minutes in the oven or air-fryer, allowing consumers to enjoy restaurant quality fried shrimp at home. Also, four new pre-fried products were launched for the Thai domestic market under the "Qfresh Brand" to serve a new generation of consuming behavior. These value-added products will help improve our product portfolio and create a stronger competitive advantage for Thai shrimp.

Improves ESG-related factors below

Raw Material - Salmon

Description and Impact

The global 3-6 kg salmon price annual average in 2023 was once again unexpectedly very high, 15 percent above the annual average 83 nok to ~93 nok/kg and 60% in 2 years (58 nok/kg in 2021, Norwegian salmon 3-6 kg FCA Oslo) mainly due to tight supply during the first semester and strong demand overall. Several biological issues in Scotland led to major shortages during the second half of the year, and might affect fish availability in 2024. Going forward, the risk of El Niño in Chile might negatively impact impact global supply in 2024 and also be impacted by strong €/NOK volatility.

Management and Mitigation Plan

The Company has maintained the strategy which allows the Company to react faster according to the trends through hedging together with good flexibility. Moreover, the Company applies a tracking tool to follow the main drivers in order to adapt our strategy if needed. The Company also reviewed prices with customers when necessary.

Improves ESG-related factors below

Emerging Risk - Biodiversity Loss

Emerging Risk - Biodiversity Loss

Biodiversity loss can have significant implications to the Company, which is one of the world's largest seafood companies. As the Company is heavily reliant on the ocean's resources, biodiversity loss can directly impact Thai Union Group's business operations and supply chain in several ways:

1. Supply Chain Disruption: Biodiversity loss can lead to declines in fish populations and the degradation of marine ecosystems. This can disrupt the availability of certain seafood products, impacting Thai Union Group's ability to source key ingredients for its products.

2. Regulatory and Compliance Risks: Biodiversity loss often leads to increased regulatory scrutiny and tighter regulations aimed at protecting vulnerable species and ecosystems. This can result in stricter fishing quotas, environmental standards, and other regulations that may affect the Company's operations and require significant investments in compliance.

3. Reputational Risks: As awareness of environmental issues grows, consumers and investors are increasingly concerned about the environmental impact of the companies they support. Biodiversity loss can lead to reputational risks for Thai Union Group if it is perceived as contributing to or not doing enough to mitigate the problem.

4. Market Access and Certification: Biodiversity loss can affect market access, especially in regions where sustainable sourcing and environmental responsibility are highly valued. Certification programs such as Marine Stewardship Council (MSC) and Aquaculture Stewardship Council (ASC) may become more stringent, making it harder for companies to meet the criteria for sustainable and responsible sourcing.

Management and Mitigation Plan

In 2023, the Company launched SeaChange ^® 2030, its sustainability plan to reshape the seafood industry with unified solutions for People and Planet that better sustain a reciprocal relationship for all. Through SeaChange ^® 2030 commitments, the Company is dedicating resources for Group-wide commitments and strategies for biodiversity with aim to safeguard life and the ecosystem. The commitments cover Responsible Wild Caught Seafood, Responsible Aquaculture, Responsible Wild Caught Seafood, Responsible Aquaculture, Responsible Agriculture, Path to Net Zero Emissions, Ocean Plastics Reduction, and Ecosystem Restoration.

Please visit www.seachangesustainability.org for full details.

Improves ESG-related factors below

Emerging Risk - Employment Crises

Description and Impact

In the past, operating in a developing country was advantageous due to the availability of inexpensive labor. However, as production shifts towards technology-oriented processes, there has been a change in the type of labor required. Despite the COVID-19 pandemic accelerating the process of labor mobilization and remote working, which opened doors to accessing human resources from various locations, the Company still heavily relies on the supply of human resources from Thailand. Unfortunately, the country's education system is beyond control. Consequently, this poses a challenge for companies in finding qualified employees to keep up with the increasing consumer trend, coupled with advancements in technology and production methods. Thai Union Group is no exception, our employment trends are showing changes which can potentially have an impact on our operations and people. The scarcity of a skilled workforce can impede productivity, innovation, and overall growth for the Company.

Thai Union's people-related risks and employment crises impacts include:

Management and Mitigation Plan

We are aware of the changing work environment and are closely monitoring this change in the society. Our strategy will focus on talent development, strengthening our people capabilities and increasing employee engagement across all our businesses. Through the Thai Union Academy, we focus on upskilling and reskilling our workforce with high demand curriculums to ensure our workforce is skilled and talented. We will also continue to place priorities in understanding our employee demographics and drive employee engagement to keep our workforce happy including promoting a flexible working environment. Moreover, we have a policy to review critical positions and prepare a development plan of successors as well as succession in an unexpected situation to ensure the success of our employee and continuity of our business.

Improves ESG-related factors below

Investment risks imposed on the securities holders

Risks of uncertain share price and returns on investment for securities holders

Shareholders are subject to risk factors that expected return from their investments. The Company's share price and dividend payment is influenced by a variety of factors including business performance and factors beyond the Company's control, including:

Thus, these factors could depress return on investments of securities holders, whether in the form of dividend income or capital gains, might not materialize.

According to pursuing exit of minority investment in Red Lobster, the Company net income would be negative in 2023 due to the one-time impairment expense. In addition, the Company required a waiver from select related bondholders to consider and approve the waiving calculation interest cover ratio and relaxation of the criteria for calculating dividends. As of February 15, 2024, the result of the vote and the Debenture holders' Meeting resolutions were completed in waiving calculation interest cover ratio and relaxation of the criteria for calculating dividends. Therefore, the Company does not foresee any material risks adverse to the business.

Foreign Securities Investment Risk (in case the issuer is a foreign Company)

None of significant risk.

03 Sustainability at Thai Union

Sustainability at Thai Union

Thai Union recognizes that sustainability forms an integral part of our role as a responsible corporate citizen for our employees and the global community.

Since launching the Company's sustainability strategy, SeaChange®, in 2016, Thai Union has been widely acknowledged as a global leader in the seafood industry, driving positive change through the implementation of programs that deliver long-term, sustainable change.

With climate change becoming an increasing threat to our planet, threatening critical ecosystems, Thai Union took the next step in its sustainability journey with the launch of SeaChange® 2030, introducing new strategies to help reshape the seafood industry through solutions for people and planet.

SeaChange® 2030 incorporates 11 interconnected goals that will drive global impact and actively support the delivery of 10 of the United Nations' Sustainable Development Goals. To support this significant expansion of the Company's sustainability strategy, Thai Union has committed THB 7.2 billion (USD 200 million) - the equivalent of its entire 2022 net profit - to SeaChange® through 2030.

Importantly, Thai Union collaborated with five key partners to launch its next stage as the seafood industry's leading agent of change, engaging thousands of vessels and farms to meet the new goals. These partners include the Sustainable Fisheries Partnership, the Aquaculture Stewardship Council, The Nature Conservancy, IDH - the Sustainable Trade Initiative, and The Global Ghost Gear Initiative.

PATH TO NET ZERO EMISSIONS

42% reduction to Scope 1, 2 and 3 greenhouse gas emissions by 2030 and net zero by 2050

RESPONSIBLE WILD CAUGHT SEAFOOD

100% of wild-caught seafood will be sourced responsibly or from a fishery in an improvement program and with responsible labor practices, extending Thai Union's scope beyond tuna to other key species they source

RESPONSIBLE AQUACULTURE

100% of Thai Union's shrimp is produced minimizing ecosystem impact and meets current industry best practices in welfare and working conditions

ECOSYSTEM RESTORATION

Thai Union will contribute THB 250 million (more than USD 7 million) toward the protection and restoration of critical ecosystems

RESPONSIBLE AGRICULTURE

100% of soy and palm oil will be certified, ensuring zero deforestation across the supply chain, and 100% of chicken will be responsibly sourced

BEST-IN-CLASS MANUFACTURING

Thai Union will implement zero water discharge, zero waste to landfill and zero food loss at its five key global facilities

SAFE, DECENT, AND EQUITABLE WORK

Thai Union will continue to ensure a safe, decent, diverse and inclusive workplace for all employees while also expanding its efforts to include:

OCEAN PLASTICS REDUCTION

Thai Union will divert 1,500 tons of ocean-bound plastic from waterways and oceans

NUTRITION & HEALTH

100% of branded ambient products will meet nutritional guidelines and 100% of new ambient products will drive positive nutrition

SUSTAINABLE PACKAGING

100% of branded products will be in sustainable packaging by 2025 and Thai Union will advocate for at least 60% of private label products to be in sustainable packaging

CORPORATE CITIZENSHIP

Thai Union will contribute THB 250 million (more than USD 7 million) to give back to the communities in which it operates, in addition to ongoing support during times of crisis

Achieving these goals will help reduce carbon, minimize waste, safeguard and rebuild ecosystems, ensure safe, decent, and equitable work is a reality across the value chain, and advance a healthier world.

Impact Management to stakeholders in the Business Value Chain

Business Value Chain

Thai Union's core business is a processor, manufacturer and exporter of frozen and canned seafood and other related products. With a commitment to 'Healthy Living, Healthy Oceans,' Thai Union focuses on health and wellbeing across its portfolio. With a vast selection of shelf-stable, chilled, and frozen foods and related products, Thai Union's portfolio of consumer-favored brands extend across North America, Europe, Asia, and the Pacific. Through strategic mergers and acquisitions, our family of brands is expanding its market share around the world. Our commitment to innovation, sustainable growth, quality, and consistency facilitates our competitive advantages.

Stakeholder Analysis and Engagement in the Business Value Chain

The Company implemented Stakeholder Analysis in accordance with AA1000 Stakeholder Engagement Standard (AA1000SES) with three key principles of stakeholder inclusivity, materiality, and responsiveness. Each business unit is responsible for stakeholder analysis in areas relevant to its operation. The results will be gathered and reanalyzed at the organizational level under the supervision of the Sustainability Committee. Methods of communication and engagement vary according to each group of stakeholders, as detailed below:

Sustainability Management in the Environmental Dimension

Environmental Policy and Performance

Safety, Health, and Environment

As a responsible business, Safety, Occupational Health, and Environment are key pillars that have important roles and responsibilities in contributing to sustainable harmonization. Part of this responsibility is to communicate about the Company's environmental management policy and our environmental impacts both internally and externally, between our operations, our employees, ecosystems, and society.

Biodiversity

Biodiversity is necessary for continued life on earth, and in particular for the health of the oceans. To make progress on our commitment to Healthy Living, Healthy Oceans, we must focus on conserving biodiversity and nature-based solutions. As a seafood company, our focus is naturally on marine biodiversity and this work aligns with United Nations Sustainable Development Goal 13 on Climate Action and UN SDG 14 on Life Below Water.

Our Tuna Commitment, introduced in 2016, is one of Thai Union's key sustainability initiatives that contribute to marine biodiversity. We have also issued the Policy for the Responsible Sourcing of Tuna in 2020. Our commitment is to 100 percent sustainably sourced tuna, coming from fisheries and vessels that engage in Best Operational Practice. Key commitments are to ensure that the seafood originates from stocks which are not overexploited or overfished, full traceability is in place, bycatch is reduced or eliminated, the fishery has a rebuilding plan in place, and that they are managed based on the best available scientific information.

Our Group-wide commitments and strategies for biodiversity, among others, set pathways and targets working towards no net loss. This includes providing THB 250 million for the protection and restoration of critical ecosystems where Thai Union or our supply chain operates. Our commitments cover a broad and diverse range of issues that need to be addressed, including Responsible Sourcing, Responsible Wild Caught Seafood, Responsible Aquaculture, Responsible Agriculture, Ecosystem Restoration, Ocean Plastics Reduction, Sustainable Packaging and Best-in-class Manufacturing.

Climate Change

With the world currently on a trajectory that surpasses the critical climate target of limiting the temperature increase to 1.5°C above pre-industrial temperatures by 2030, climate change presents a "code red" threat to humanity. Food production, including supply chains, farms, crop production and land use is responsible for nearly 26 percent of global greenhouse gas emissions, and the seafood industry is a key part of this sector. As part of our SeaChange® 2030 strategy, Thai Union has committed to reducing Scopes 1, 2 and 3 GHG emissions by 42 percent by 2030 from a 2021 baseline and achieve net zero by 2050. As part of that commitment, Thai Union is aligning its net zero target with the Science Based Targets initiative (SBTi) and will drive the deployment of new environmental data collection tools to help deliver a net zero economy. Thai Union is the first global seafood company to set goals verified by SBTi.

Thai Union will work to reduce its emissions from owned activities, purchased goods and services, fuel and energy related activities, upstream and downstream transportation and distribution. From farms, factories and forests to open sea fishing and aquaculture, we will accelerate our path to a healthier and more sustainable world.

To achieve our goals, we will take action across our operations including working to ensure there is zero deforestation across the supply chain, reduce the amount of energy used in farm operations, utilize alternative farm ingredients, explore zero and low carbon fuel and technologies, phase out coal from our operations, install renewable energy at our facilities, increase energy efficiency, improve raw material utilization, drive recyclable packaging and reduce the demand on raw materials, and also support our customers in achieving their own GHG emission goals and targets.

In 2023, Thai Union imposed an internal carbon fee strategy to boost decarbonization effectively by putting a price on carbon emissions under our commitment with SBTi. In addition, we implemented low-carbon technology such as increasing solar energy by 7 percent, increasing biomass consumption by 24 percent, converted fossil fuel boilers to biomass and LPG, increased the number of electric vehicles, and changed the freezing system from carbon dioxide to nitrogen.

Water resources

We recognize the increasing risk of water scarcity as we work to pursue our best-in-class manufacturing goals. Reducing water consumption is a critical action if we are to achieve our commitments by 2030, including achieving zero water discharge from our facilities, while also maximizing treated wastewater recycling under strict adherence to food safety standards.

Zero Discharge Project

In 2023, we launched the Zero Discharge Project at our fish plant in Samut Sakhon, Thailand as part of a commitment to ensure no factory wastewater is released into the environment. The wastewater management system was started as a pilot project for five of Thai Union's factories in Thailand and Seychelles, as part of our commitment to best-in-class manufacturing. The fish plant in Samut Sakhon is the first of Thai Union's factories to achieve 100 percent wastewater treatment.

Eliminate food waste and waste to landfill.

We are committed to adopting advanced manufacturing techniques and technology to prevent waste from production and food loss in the production process from ending up in landfill. Key initiatives for these goals include machine design for raw material loss prevention, value-added product development, diverting wastewater sludge from landfill to be used as fertilizer, using boiler ash as input for cement, converting unusable forms of waste into alternative fuels, recycling plastic and recycling waste.

Three of Thai Union's five key global facilities were near the level of zero waste sent to landfill in 2023, in line with our commitment to eliminate food waste and waste sent to landfill by 2030.

Sustainability Management in the Social Dimension

Social Policy and Performance

Human Rights

Thai Union Group and its subsidiaries supports and respects the protection of internationally proclaimed Human Rights. We continue to advance our efforts to improve the lives and livelihoods of all workers by providing safe and decent work within our own operations and only sourcing from suppliers that are committed to improving working conditions in line with current industry standards. This incorporates changes to employment practices such as responsible recruitment, access to worker voice mechanisms, equal opportunity practices, occupational health and safety, and supply chain traceability. Although Thai Union does not own any vessels, it is our responsibility to ensure the vessels we source from are free from any exploitation or mistreatment. Thai Union continues to work with suppliers to understand the supply chain and implement effective and lasting improvements. Through our SeaChange® 2030 strategy, we are embarking on a profound commitment to drive forward labor rights advancements across our entire global operations, from upstream to downstream, working to ensure the well-being and dignity of our workers and our suppliers' workers at every stage.

Thai Union's Human Rights Policy embodies our commitment to conducting business with integrity, openness, and respect for universal human rights, as those expressed in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization's Declaration of Fundamental Principles and Rights at Work, namely Freedom of Association and the right to collective bargaining, elimination of all forms of forced labor, effective abolition of child labor, elimination of discrimination in respect of employment including through ensuring equal remuneration for equal work, and a safe and healthy working environment. Thai Union has also been committed to implementing the commitments in the UN Global Compact's Ten Principles since 2013.

In 2023, Thai Union continued to implement activities to enhance our due diligence on modern slavery and forced labor. This included the enforcement of the Company's Employer Pays Principle, for Thailand-based operations, under which Thai Union bears all recruitment-related fees and costs for all migrant workers, applicable to all new recruitment activities initiated by Thai Union.

Thai Union also continued to provide grievance and whistleblowing channels for reporting unethical treatment of workers in our operations and supply chains. Any Thai Union employees, contractors, suppliers and their employees may report actual or suspected breaches of the Company's Business Ethics and Labor Code of Conduct and do so both confidentially and anonymously. In 2023, we continued to conduct pilot training sessions to strengthen the Worker Welfare Committees in our Thailand facilities by developing a more comprehensive understanding of grievance and WWC roles and responsibilities among its management and worker members.

During 2023, Thai Union also conducted more Vessel Code of Conduct (VCoC) and Health & Safety Training for fishers on Thai vessels in our supply chain to help improve the labor and working conditions of the fishing sector. Thai Union expects that all of the fishing vessels we source from are continuously improving in their efforts to meet the clauses in our VCoC, which is available in multiple languages to facilities suppliers' understanding.

Thai Union uses its commercial leverage and leadership role in the seafood industry to address human rights issues not only in our value chain but also to inspire positive changes in the broader global seafood industry. As part of SeaChange® 2030, Thai Union has set a series of targets on human rights, including:

During the year, Thai Union also conducted more third-party social audits of Thai-flagged vessels in our supply chain, with the results helping to drive changes throughout the industry through the implementation of improvement projects. These audits also help to ensure no Illegal, Unreported and Unregulated (IUU) fishing and prevent labor rights abuses.

In 2023, Thai Union also participated in the Bali Process Government and Business Forum, which was established in 2002 to bring government and business together to eradicate human trafficking, forced labor, modern slavery, and the worst forms of child labor. Thai Union used the forum as an opportunity to share some examples of the interventions adopted by the Company, and made a commitment to continuously drive safe and decent work across its operations and supply chain, and to utilize all available tools, technologies, and partnerships to do so.

Safe, Decent, and Equitable Work

Building a Safety Culture is a key strategy to reduce work-related incidents in our organization. We pursue continuous improvement in all aspects of safety by promoting a positive safety culture, identifying, and mitigating risks and ensuring personal competence. In 2023, we continued to emphasize our Safety Management System, using a program called "RACE," a tool that we are implementing and adjusting to support our safety strategies to be best-in-class. A program of improvement in our approach to safety for all employees and contractors has been established and includes collaboration across functions.

We continue to improve our facilities and strengthen our risk administrative controls, such as installing a fire safety system, and conducted ceiling and electrical safety inspections that went beyond regulatory compliance. In 2023, we observed a 35 percent reduction in Lost Time Injury Frequency Rate (LTIFR).

We started a two-year program aimed at achieving zero high consequence injuries as a result of machine-related accidents in 2023. As part of this new approach, we focused on providing adequate guarding and other means of protection between the operators and the equipment following an equipment-focused risk assessment. We completed the assessment of more than 9,000 machines and very high hazard machines, which were completely improved in 2023 and will continue to be improved for other risk levels in 2024.

Employee engagement

Thai Union has a policy to develop employees to help unlock their potential and improve the value of the organization's resources. We believe that all personnel have their own specific ability or advantages. The Company will help every employee to maximize their strengths for the benefit of themselves and the organization, so that everyone has an opportunity for self-development and career advancement.

Developing people at every level is part of the Company's core strategy and an ongoing commitment from senior management. We focus on providing training and staff development by focusing on the changing attitude and practices, incorporating classroom training, coaching, and giving feedback. Thai Union also applies real on-the-job training through various methods, including:

Corporate Social Responsibility

Across Thai Union's global footprint, there are differing societal issues specific to the regions where we operate. Social impact initiatives provide an opportunity to give back to communities in ways they can benefit the most. Health, education, and childcare programs support fundamental societal issues, and bring much needed resources to the forefront. Through programs focused on education, climate awareness, mental health, disaster relief (food donations), and environmental issues impacting society (e.g., degradation, ocean bound plastics, pollution), Thai Union provides meaningful support for the communities in which we operate across our global business as part of SeaChange® 2030.

In 2023, Thai Union continued to make progress on its corporate social responsibility. Around the world, 690 employees volunteered their time to join the Coastal Cleanup activity as part of a global campaign by the Seafood Business for Ocean Stewardship (SeaBOS) and Ocean Conservancy to protect the marine environment. A total of 13,373 kilograms of trash was collected across 11 sites globally.

Thai Union also signed a Memorandum of Understanding (MoU) with the Earth Agenda Foundation and pledged THB 3 million over the next three years to support the "Love the Sea" project to restore coral reefs and marine ecosystems around Koh Racha Yai in Phuket province. Under the MoU, 210 pieces of artificial coral reefs covering 180 square meters will be installed around Koh Racha Yai over three years, with 70 pieces dropped in November 2023. The Love the Sea project is run by the Earth Agenda Foundation in collaboration with Thailand's Department of Marine and Coastal Resources under the Ministry of Natural Resources and Environment, the Faculty of Veterinary Science at Chulalongkorn University and SCG by CPAC Green Solution.

Thai Union also participated in a mangrove restoration project with Thailand's Department of Marine and Coastal Resources to restore 101.3 rai of mangrove area at Khoyisan Sub-district in Samut Songkharm province. In 2023, 31,500 mangrove seedlings were planted in the mangrove area. Thai Union will maintain and monitor the mangrove trees across an area of 101.3 rai for 10 years.

Thai Union collaborated with the Scholars of Sustenance Foundation (SOS) for the second year to encourage students to understand the impact of food waste and surplus food on the environment. Together, we conducted five workshops with a total of 210 students from six schools in Samut Sakhon, which also included educating them about the benefits of eating nutritionally-rich food.

04 Management Discussion 04 and Analysis

OVERVIEW

The 2023 global economy showed resilience amidst challenges, including geopolitical tensions and especially inflation persistence, which is easing but remains above pre-pandemic levels. Thai Union effectively navigated these challenges through strategic measures that minimized impacts and was able to deliver positive momentum in the second half of the year, ensuring Thai Union's strong positioning for sustainable growth. The Group's adaptability and strategic foresight have been crucial in maintaining its market leadership and setting the stage for future success in an ever-changing global landscape.

Thai Union Group PCL reported sales of THB 136.2 billion, decreasing by 12.5 percent compared to the previous year, mainly from exceptional performance of i-Tail in 2022, the U.S. Frozen rightsizing and Frozen price deflation, freight revenue normalization and Middle East USD shortage situation. Furthermore, overall sales volume decreased by 12.9 percent year-over-year, resulting from soft demand across all categories and the U.S. Frozen rightsizing strategy.

2023 gross profit marked at THB 23.2 billion, down by 14.6 percent year-over-year. Thai Union continued to deliver a healthy gross profit margin at 17.1 percent, but slightly lower than the previous year, mainly from high fish prices (+7.3% year-over-year).

Thai Union reported normalized net profit at THB 4.5 billion in 2023, declining by 37.0 percent year-over-year (-28.0 percent year-over-year, if excluded i-Tail dilution impact). Normalized operation excluded THB 18.4 billion one-time non-cash impairment of Red Lobster and IFRS 5 reclassification. The decrease was largely driven by lower operating profit and unfavorable items, namely FX losses, higher finance cost, and lower tax credit. Normalized net profit margin was at 3.3 percent. If included these one-time items, reported net profit in 2023 was a loss of THB 13.9 billion.

2023 free cash flow was strong at THB 7.3 billion and returned to pre-covid level, driven by effective net working capital management and lower CAPEX, despite pressured EBITDA. Thai Union's 2023 net debt to equity ratio was at 0.78 times, up from 0.54 times at the end of 2022 but still at a strong position.

The ambient seafood business remained the largest sales contributor for Thai Union with 46.9 percent of total sales in 2023. Frozen, chilled seafood and related business accounted for 34.7 percent of total sales, down from the U.S. Frozen rightsizing. PetCare business accounted for 11.1 percent, down from the exceptional performance in the previous year. Value-added and others business contributed 7.3 percent of total sales, relatively stable from the previous year.

The following are key factors which contributed to the Group's 2023 performance:

1. CUSTOMERS STOCKING VOLATILITY IN 2023

In the first half of 2023, Thai Union's performance was pressured mainly from high baseline last year and softer demand across all categories as customers managed their high inventory levels, especially in Ambient seafood and PetCare businesses. Additionally, tuna prices surged significantly in the first half of 2023 due to lower average catching rate; however, in the second half of 2023, we have seen sign of improvement from our customers starting restocking because of logistic normalization and lower raw material prices.

2. SEVERAL KEY DECISIONS HAVE BEEN MADE TO STRENGTHEN OUR CORE BUSINESS AND BE FIT GROWTH

Thai Union continued to divest loss-making business to optimize our manufacturing footprint and enhance competitiveness. Details are as follows:

1. Operational closed

2. Business downsizing

3. Rationalization

3. ANNOUCEMENT OF INTENTION TO PURSUE AN EXIT OF MINORITY INVESTMENT IN RED LOBSTER

Since 2016, Thai Union has been a strategic partner and minority investor in Red Lobster. In 2023, Thai Union conducted a review of Red Lobster to identify areas for operational and financial improvement. On January 16, 2024, after detailed analysis, the Group determined that Red Lobster's ongoing financial requirements no longer align with the Group's capital allocation priorities and therefore pursued an exit from the Group's minority investment.

Following the decision to exit, Thai Union recorded a one-time non-cash impairment of THB 18.4 billion in the fourth quarter of 2023. In addition, Red Lobster-related transactions in 2023, mostly share of loss from operation and lease accounting, were reclassified to present under discontinued operations line under IFRS 5 (assets held for sale/discontinued operations), together with one-time non-cash impairment of THB 18.4 billion, amounting to THB 19.6 billion.

4. CURRENCY FLUCTUATIONS

Thai Union has approximately 88.5 percent of sales occurring in foreign currencies, mostly in the U.S. dollar, Euro, and British Pound. Thai Baht appreciated against the U.S. dollar during the fourth quarter of 2023 to 35.0 in December 2023. However, the Group's policy is always conservative with systematic hedging, which covers more than 80 percent of anticipated sales to mitigate the risks from FX volatility.

AMBIENT SEAFOOD BUSINESS

The ambient seafood business recorded sales of THB 63.9 billion, down by 3.9 percent from THB 66.5 billion in 2022. Sales volume dropped by 12.7 percent from the previous year, mainly from soft demand and persisting high fish prices for nearly 3 quarters, partially offset by higher selling prices; however, OEM customers started restocking due to downtrend of tuna prices in the fourth quarter of 2023. Consequently, the gross profit margin stood at 19.0 percent in 2023, mainly impacted by high fish prices and lower sales volumes.

On average, the skipjack tuna price (WPO/Bangkok landing) during the year increased by 7.3 percent to USD 1,784 per metric ton from USD 1,663 per metric ton in 2022.

FROZEN, CHILLED SEAFOOD AND RELATED BUSINESS

Thai Union's frozen, chilled seafood and related business recorded sales of THB 47.3 billion, contracted by 17.0 percent from THB 57.0 billion from the previous year, primarily from the rightsizing of frozen business in the U.S. which vanished both sales value and volume, softer demand in the U.S. market, and price deflation. Nevertheless, Thai Union's strategy is to prioritize the U.S. Frozen on profitability rather than the size of revenue. In 2023, the gross profit margin improved impressively to double digit at 11.3 percent, thanks to favorable logistic costs and raw material prices, as well as portfolio rationalization.

The average shrimp price (60 pieces per kilogram) declined by 14.8 percent to THB 138 per kilogram in 2023 from the previous year at THB 162 per kilogram. The average salmon price in 2023 was at NOK 95 per kilogram, up 18.2 percent from the previous year at NOK 80 per kilogram.

PETCARE BUSINESS

PetCare business recorded sales of THB 15.1 billion, dropped by 30.6 percent from the previous year, due mainly to high baseline in 2022 and destocking issue, especially in the first half of the year; however, in the second half of the year sales and margin performance started to accelerate, and are anticipated to return to grow in the upcoming quarter (the first quarter of 2024). The gross profit margin of PetCare business in 2023 was at 20.5 percent, down from 26.3 percent in 2022, driven by lower sales volume, unfavorable product mix, and higher cost per unit.

VALUE-ADDED AND OTHER BUSINESSES

Value-added and other businesses recorded sales of THB 9.9 billion, down by 5.0 percent from the previous year, owing to high baseline in 2022 and soft performance of packaging, attributed to performance of its downstream canned business, partially offset by value-added and ingredient businesses growth. Nonetheless, the gross profit margin of Value-added and other businesses in 2023 remained healthy at 27.1%, thanks to lower raw material prices, especially steel and aluminum, production efficiency improvement, and new ranges of product, partly offset by lower sales volumes.

BUSINESS OVERVIEW BY REGION

In 2023, sales dropped across all regions, especially in the U.S. and Canada; however, the U.S. and Canada market remained the Group's largest market, contributing 40.7 percent of total sales, following by the European market which represented 29.6 percent of total sales. In Thailand, domestic sales accounted for 11.5 percent, posting soft sales led by lower demand across almost all categories, while Emerging Markets and the rest of the world contributed 18.2 percent of total sales.

Thai Baht depreciated against the Euro (up by 2.0 percent year-over-year) and Pound Sterling (relatively stable year-over-year), but contrastingly strengthened against the U.S. Dollar (down by 0.7 percent year-over-year).

Sales in the U.S. and Canada dropped significantly by 19.0 percent year-over-year in 2023, primarily from the rightsizing of the U.S. Frozen business as well as weak demand from destocking issue and economic slowdown.

Sales in Europe were almost flat compared to last year, as lower volume by 13.9 percent year-over-year, which was temporarily impacted by further price increases and soft demand from PetCare, was mitigated by rising demand for value-enhancing business.

Sales in Thailand contracted by 4.4 percent year-over-year, while sales in Emerging Markets and the rest of the world went down substantially by 16.5 percent year-over-year from high baseline last year, soft demand from destocking issue, and the U.S. Dollar shortage in the Middle East.

COMPARATIVE FINANCIAL RATIOS

^* Debt = Interest bearing debt only

^** Pre-tax ROA = EBIT/Average total assets

^*** BV = Total shareholders' equity / (outstanding shares - share repurchase)

^**** Profitability ratios are calculated on normalized number, excluding one-time non-cash impairment of Red Lobster (THB 18.4 billion) in the fourth quarter of 2023 and before IFRS 5 reclassification.

Financial Analysis

SALES

Thai Union reported sales of THB 136.2 billion in 2023 (down by 12.5 percent year-over-year), mainly from lower sales across all categories: PetCare (-30.6 percent year-over-year from an exceptional performance last year), Frozen and chilled seafood (-17.0 percent year-over-year), Value-added and others (-5.0 percent year-over-year), and Ambient seafood (-3.9 percent year-over-year). Furthermore, overall sales volumes decreased by 12.9 percent year-over-year, resulting from soft demand across all categories and the U.S. Frozen rightsizing strategy. The details are as follows:

GROSS PROFIT

Thai Union reported sales of THB 136.2 billion in 2023 (down by 12.5 percent year-over-year), mainly from lower sales across all categories: PetCare (-30.6 percent year-over-year from an exceptional performance last year), Frozen and chilled seafood (-17.0 percent year-over-year), Value-added and others (-5.0 percent year-over-year), and Ambient seafood (-3.9 percent year-over-year). Furthermore, overall sales volumes decreased by 12.9 percent year-over-year, resulting from soft demand across all categories and the U.S. Frozen rightsizing strategy. The details are as follows:

SELLING AND ADMINISTRATIVE EXPENSES (SG&A)

2023 SG&A expenses decreased sharply by 15.3 percent year-over-year, impacted from sales reduction, a fall in freight costs and profit protection plan. Additionally, SG&A to sales ratio during 2023 declined a bit over the whole year at 12.0 percent vs. 12.4 percent in 2022.

OPERATING PROFIT

The 2023 operating profit amounts to THB 6.9 billion, down by 14.1 percent year-over-year from THB 8.1 billion in 2022, mainly from lower sales across all categories, despite lower SG&A expenses. The operating profit margin in 2023 stood at 5.0 percent, marginally declining from 5.2 percent in 2022.

FX GAIN/LOSS

2023 FX losses of THB 236 million compared to FX gains of THB 800 million in 2022, mainly from USD/THB exposure.

SHARE OF INCOME/LOSS FROM INVESTMENT IN ASSOCIATES

2023 reported share of profit from investment in associates was THB 679 million, compared to share of loss from investment in associates of THB 1,030 million in 2022, mainly due to Red Lobster investment exit decision. If included share of loss from Red Lobster of THB 1,219 million in 2023, normalized share of loss from investment in associates would be THB 540 million in 2023.

OTHER INCOME

2023 other income was at THB 838 million, a decrease of 8.9 percent from THB 919 million in 2022, mostly from unclaimed withholding tax expense, partially offset by an increase in interest income and tax coupon.

FINANCE COSTS

Finance costs in 2023 were THB 2.3 billion, up 15.2 percent year-over-year. The increase was primarily from interest rate increases as the Group's average cost of debt has been increasing a bit from some float rate debt portion (~21% of total debt).

CORPORATE INCOME TAX

The income tax credit was THB 620 million in 2023, declining from tax credit of THB 840 million in 2022. The decrease was mostly explained by the lower share of loss from Red Lobster. The effective tax rate was at -13.4 percent in 2023, compared to -12.8 percent in 2022.

NORMALIZED NET PROFIT

Thai Union reported normalized net profit of THB 4.5 billion, declining by 37.0 percent year-over-year (-28.0 percent year-over-year, if excluded i-Tail dilution impact). The decrease in net profit was mainly from lower operating profit and unfavorable items as follows: (1) FX losses of THB 236 million, compared to FX gains of THB 800 million in 2022, (2) higher finance costs, largely driven by higher interest rate, and (3) lower tax credit. The 2023 net profit margin was 3.3 percent compared to 4.6 percent in 2022.

The normalized net profit referenced above excluded one-time non-cash impairment charge from Red Lobster investment exit of THB 18.4 billion and Red Lobster-related transactions in 2023, which were reclassified to present under discontinued operations line under IFRS 5 (assets held for sale/discontinued operations), amounting to THB 1.2 billion in the fourth quarter of 2023.

Reported net profit, including aforementioned items, was a loss of THB 13.9 billion for 2023.

FINANCIAL POSITION

As of December 31, 2023, Thai Union's total assets were at THB 165.5 billion, significantly declining by 9.4 percent from the end of 2022 at THB 182.6 billion, mostly driven by Red Lobster investment exit which the Group impaired the whole amount of investment in common shares and preferred shares.

Total liabilities stood at THB 99.4 billion, rising by 5.3 percent from THB 94.4 billion at the end of 2022, due mainly to higher current portion of long-term loans and long-term loans, partially offset by lower trade and other payables as well as short-term loans.

Total equity (including perpetual debentures of THB 6.0 billion) was at THB 66.0 billion, substantially decreasing from THB 88.1 billion at the end of 2022, due to Red Lobster investment exit and related one-time non-cash impairment charge recorded in the fourth quarter of 2023.

CASH FLOWS

In 2023, net cash receipts for operating activities amounted to THB 11.2 billion. Free cash flow improved massively to THB 7.3 billion, compared to THB 1.8 billion in 2022, thanks to well managed net working capital and less CAPEX spending, although EBITDA dropped from last year.

Net cash payments for investing activities were at THB 6.6 billion, increasing from THB 5.4 billion in the same period of last year, mainly from investments in corporate bonds and payments for short-term investments.

Thai Union recorded a net cash payment from financing activities of THB 2.4 billion in 2023, decreasing from cash receipts of THB 2.7 billion in the same period of last year. Financing activities generated cash outflow this year, due mainly to treasury buy back and i-Tail stock repurchase, while last year activities generated cash inflow due to net proceeds from i-Tail IPO.

Net decrease in cash and cash equivalents was at THB 2.3 billion in 2023, resulting in outstanding cash and cash equivalents of THB 14.2 billion as of the end of the year (including the impact from the use of Bank Overdraft).

FUTURE PROSPECTS AND ACTION PLAN

Thai Union's vision is to be the world's most trusted seafood leader, caring for our resources to nurture generations to come. We also seek to continue to deliver healthy and responsibly sourced nutrition to our consumers globally, while creating long-term value for our stakeholders. Thai Union has made a commitment through the SeaChange® sustainability strategy, as part of our "Healthy Living, Healthy Oceans". In July 2023, Thai Union announced a major update to SeaChange® with new goals and new commitments through to 2030, committing THB 7.2 billion (USD 200 million) to advance sustainability goals. This included actions across a wide range of topics to address such as the decline in biodiversity, tackling climate change, ensuring endangered species are protected, important ecosystems are restored, and that natural resources are managed sustainably.

In early 2024, Thai Union will launch its Corporate Strategy 2030, which will focus on its core business, centered around Ambient Seafood, Frozen, and PetCare. Through this, Thai Union's management will advance ongoing strategies that strengthen its overall profitability and deliver long-term enhanced value for the Group's shareholders.

As part of our guidance for 2024, Thai Union will focus on sales growth of 3.0 - 4.0 percent from a year earlier. We aim to reach the gross profit margin level at approximately 17.0 - 18.0 percent in 2024. The SG&A to sales ratio will be at approximately 11.0 - 12.0 percent. Additionally, we expect a slight increase in the effective interest rate at 0.0 - 0.5 percent in 2024.

In 2024, the total planned capital investment will be approximately at THB 4.0 - 4.5 billion as we focus on carrying out capital expenditure related to both existing and new business divisions and continue to improve and streamline our existing operations to achieve sustainable profitable growth.

Our key investment items during 2024 will be a culinary plant for ready-to-eat products, a protein hydrolysate and collagen peptide plant, and wet pet food in Thailand. Additionally, we will continue to invest in machinery and equipment, construction and improvements on buildings, as well as capacity expansion on our core businesses. Due to the ongoing continuous improvement in manufacturing and expansion of our existing business, Thai Union's general financial health should improve further as positive cash flows increase.

We continue our commitment to deliver a high dividend payout ratio, with a minimum of 50 percent payout of our net profit with semi-annual payments.

FY2023 Statement of Income

Remarks: Normalized operation excluded THB 18.4 billion one-time non-cash impairment of Red Lobster and IFRS 5 reclassification.

05 General and Important Information

References

Common Share Registrar

Thailand Securities Depository Co., Ltd. 14 ^th Floor, the Stock Exchange of Thailand, 93 Ratchadapisek Road, Dindaeng, Bangkok 10400

Tel : +66 (0) 2009-9000

Fax : +66 (0) 2009-9992

Debentures Registrar

Independent Auditors

PricewaterhouseCoopers ABAS Limited

15 ^th Floor Bangkok City Tower,

179/74-80 South Sathorn Road,

Thungmahamek, Sathorn, Bangkok 10120

Tel : +66 (0) 2344-1000

Fax : +66 (0) 2286-5050

Information Influencing Investors' Decisions

The Company has no further information to disclose that may materially impact investors' investment decisions. Should there be any other crucial information that could materially be useful or impact investors' investment decisions, or that could ensure equal access to information for all types of investors, the Company will immediately disclose the accurate and complete information on the Stock Exchange of Thailand's portal as well as on the Company's website, where investors can digest the information before making any investment decisions.

Litigation

At the present time, there is no significant pending legal disputes which may have material impacts for the operations of the Company and its subsidiaries.

06 Governance Policy

The Board of Directors has established a good corporate governance policy by adhering to the Corporate Governance Code for listed companies of 2017 (CG Code) of the Stock Exchange of Thailand, Corporate Government Recommendations for Thai listed companies (CGR), recommendations for listed companies at the ASEAN level (ASEAN CG Scorecard) and the Dow Jones Sustainability Indices (DJSI) and has consistently reviewed, adjusted and improved this for suitability to ensure that the duties of the Board of Directors are performed with effectiveness and constant good corporate governance. In addition, the Company reviewed the policy to comply with legal, economic and social change in 8 Principles as follows:

1) Awareness of the Board's leadership role and responsibilities for sustainable value creation

2) Defining key business objectives and goals for sustainability

3) Strengthening Board Effectiveness

4) Ensuring Effective CEO and People Management

5) Nurturing Innovation and Responsible Business

6) Strengthening Effective Risk Management and Internal Control

7) Ensuring Disclosure and Financial Integrity

8) Ensuring Engagement and Communication with Shareholders

To define these policies, there is an oversight process as follows:

Overall View of Policy and Principles of Good Corporate Governance

The Company's corporate governance policy adheres to legal compliance as a basis and is developed to be transparent, credible and acceptable according to guidelines of excellence in business operations with criteria, governance and sustainable growth both at the national and international level. The Board of Directors has approved the Company to define a policy to control operations in various areas to be according to the principles of good corporate governance. The Company's policies and operational guidelines cover the placing of directors and specify compensation, the independence of the Board of Directors from management, developing directors and evaluating their performance, the governance of subsidiary companies and joint ventures, as well as policies and guidelines concerned with shareholders' and stakeholders, looking after shareholders, equal treatment for all shareholders, promotion and exercise of shareholders' rights, protection and use of internal data, preventing conflict of interest, responsibility to stakeholders, being anti-corruption as well as other relevant policies and guidelines. In the case that the Company discovers that any criterion in any matter has not been defined as a policy or has not been carried out, management will propose that the Board of Directors consider reviewing this to be consistent with principles.

Policies and Principles Concerned with the Board of Directors, Shareholders and Stakeholders

The Company has determined policies and principles concerned with the Board of Directors, shareholders and stakeholders covering the eight principles of good corporate governance of the SEC as follows:

Principle 1

Awareness of the Board's Leadership Role and Responsibilities for Sustainable Value Creation

The 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 interests of the Company. Additionally, the Board of Directors is responsible for setting corporate policy and direction as well as ensuring that the management implements the policy effectively and efficiently.

Board members are required to disclose any material interests in transactions or contracts which the Company enters into and increase/decrease in share/debenture ownership in the Company or its subsidiaries during any fiscal year. The Board of Directors is authorized to implement and direct the Company's activities except for the following issues, which require prior shareholder approval:

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

2) Altering the Company's par value or registered capital;

3) Increasing the Company's Board members.; and

4) Any deed that yields the Board of Directors a gain or loss or any deed that is obliged, by SET regulations, to have shareholder's approval.

The Board of Directors is responsible to the shareholders in overseeing the Company's business operations and steering the Company towards the agreed targets and on a path that maximizes shareholders' long-term benefits, with consideration to business ethics and fairness to all relevant stakeholders, according to their duties and responsibilities under section "Duties and Responsibilities of the Board of Directors".

Principle 2

Defining Key Business Objectives and Goals for Sustainability

The Board together sets the objectives and main goals including running business policies of Company groups, taking into consideration situations in each environment relating to the Company's vision and mission. In addition, the Board has announced a sustainability strategy, SeaChange ^® , in order to determine the Company's key objectives on sustainability since 2016, and re-launched the next stage of its sustainability strategy, SeaChange ^® 2030, in 2023. SeaChange ^® 2030 aims to reshape the seafood industry with solutions for People and Planet that better sustain a future for all. Moreover, the Board analyzes the environment within the organization in order to know the strengths and weaknesses, understand the competitive positions and analyze the environment beyond the organization, for example economic, society and environment factors, legal issues and market competition. These help determine and understand the changes beyond the organization, and opportunities and obstacles for the organization, including the support of innovation and technology to add value and create sustainable growth.

An analysis of changes to all of these factors and the effect on the business and to stakeholders allows the Board to support the cultivation of values and good corporate governance, the cooperation of all employees to help develop the organization continuously and be ensure awareness of the importance of being a sustainable organization.

In addition, the Board formulates strategies, policies, plans and budgets of the organization by establishing a committee for sustainable development to control and verify operations according to the policy framework, and assigns and follows up the management to undertake the practices effectively.

Principle 3

Strengthening Board Effectiveness

The Board understands the roles and their own responsibility by dividing clearly between the Board and management to whom the Chairman of the Board of Directors and CEO are not the same persons. The Board defines the roles and control to supervise the operations of the management for ethical practices and according to effective policies, as well as not having conflicts of interest between stakeholders through the consistent disclosure of complete and accurate Company information.

Principle 4

Ensuring Effective CEO and People Management

The Board of Directors gives importance to personnel who will be in top executive positions, such as the Chief Executive Officer (CEO) and other positions equivalent to Managing Director of subsidiary companies by considering knowledge, ability, and experience that is consistent with the strategy and goals of the Company. Therefore, the Board of Directors must oversee the recruitment of such personnel appropriately, including preparation of succession planning and human capital development.

Succession Planning

The Board of Directors has recognized the importance of the succession planning for the top executives of the organization, particularly for organizing the leadership positions of President, and Chief Executive Officer and President of Global Frozen and Related Business. This also includes the top administration position of the Company in each region, which is an important part to be successful in the organization. By implementing a Human Resources Department coordinator to consider criteria and succession planning for both foreign and domestic executive positions, the Company can maintain high levels of confidence for stakeholders.

The Company has a policy to review the critical positions in the organization and their, direct effect on business profits and corporate goals. The procedure is to consider the positions systematically each year so that it can be used for both long-term and short-term succession.

The Human Resources Department will coordinate the succession plan by arranging a joint meeting between key management and top executives of HR management, both to strengthen business potential and continually reduce operation risks.

The succession planning for Thai Union is divided into two categories as follows:

1. Succession planning for critical positions to ensure the success of the business is to plan for a successor depending on the readiness of the position, which is divided into three groups as follows:

a. Short term: Ready now

b. Mid-term: Ready within 1 - 3 years

c. Long term: Ready in 3 - 5 years

2. Succession for Emergency Plan: Preparation of an emergency successor candidate only in a critical period. The Company encourages individual parties to name a successor in the event of an emergency. It can be divided into sections and each section has the name of the responsible appointee.

Succession planning in this category will have Group Corporate, Regional and Business Categories. In addition, the Company has a development readiness plan for an individual successor by analyzing their knowledge, abilities and skill development requirements. The successor should be ready to take over immediately whenever the Company needs. Such a development plan will be reviewed every year with the direct leadership of the successor and the committees who are selected by the Company in each position level.

Human Capital Development

The policy of development of employees is to help unlock the potential in people and improve the value of the organization's resources. We believe that all personnel have their own specific ability or advantages. The Company will help every employee to maximize their strengths for the benefit of themselves and the organization, so that everyone has an opportunity for self-development and career advancement.

Developing people at every level is part of the Company's core strategy and an ongoing commitment from senior management. We focus on providing training and staff development by focusing on the changing attitude and practices in order to provide organizations with international standards by incorporating the classroom training, coaching, giving feedback and applying real on-the-job training (OJT): On-the-job training through training and development is done through these various methods:

Details of staff and management training of the entire Group in 2023 compared to 2022 are as follows:

Moreover, the Company stresses the importance of communicating information concerning its business to all employees, such as a meeting of management with employees every six months to announce the annual targets, and performances which have been achieved, to ensure there is consistency in working towards the same plan, which helps motivation and morale in different situations.

Principle 5

Nurturing Innovation and Responsible Business

The Board of Directors places great importance on and supports innovation, as the Company has a mission to become a change leader in the seafood industry. Hence, innovation is Thai Union's main strategy to drive sustainable business growth and plays a major role in determining our business direction. In addition, the Board focuses on sustainable growth, which creates standards for our corporate social responsibility, according to the United Nations' Sustainable Development Goals.

5.1) Promote innovation and responsibility for the stakeholders

The Board perceives the importance of promoting innovation. The Company is committed to being the seafood industry's leading agent of change. Innovation is a strategic cornerstone of Thai Union. This will help drive sustainable growth and play an important role in shaping the future of the Company. The Global Innovation Center (GIC) is a world-class R&D facility to develop new products, packaging and processing, and thus add more value to the Company's seafood business. The GIC conducts research related to fundamental studies of raw materials, new processing technology, and utilization of leftover raw materials to create added value. The main focus is on:

1) Enhancing product quality, nutritional value and consumer satisfaction; and accelerating sustainability through cost-effective utilization of fishery resources

2) Optimization of processes and technology, and value creation from by-products and

3) Creating new corporate revenue streams from research and development.

The GIC leverages public and private partnerships with industrial entrepreneurs, government, and academia by innovating together and coordinating knowledge between academia and industrial entrepreneurs for the goal of the innovation to benefit the public.

As a global seafood leader, we have a responsibility to set the standard for social, environmental and economic performance across our operations and into our supply chains. Recognizing this responsibility to show leadership, we heeded the calls of our stakeholders with the launch of our global sustainability strategy, SeaChange ^® in 2016, and which underwent a major refresh in 2023 with new goals and commitments through to 2030. to help reshape the seafood industry with solutions across people and planet that better sustain a future for all.

5.2) Responsible operations for society and the environment

In 2023, the Company announced the launch of SeaChange ^® 2030, which marks a significant expansion of the Company's sustainability strategy due to its 11 interconnected goals that will drive global impact. SeaChange ^® 2030 incorporates five future outcomes across people and planet as follows:

1. Human and Labor Rights - Ensuring fair wages and benefits as well as safe and healthy working conditions.

2. Health and Wellness - Advancing a healthier world and delivering critical resources to those most in need.

3. Climate Action - Deploying actions that reduce GHG emissions.

4. Biodiversity - Safeguarding life and ecosystems.

5. Circularity - Designing and operating systems that minimize waste.

The Board recognizes the importance of the rights of all stakeholders and equitable treatment. The Company foresees the importance of their support and the mutual cooperation between the Company and the various groups of stakeholders, in securing long-term business wealth, employment, financial stability and implementation to further the Company's objectives, goals, and strategies in support of sustainable value creation. Therefore, the Board urges management to adopt responsible operations with high ethical, environment and society standards. Also, it is important to adhere to the equitable treatment of all stakeholders as well as ensure that effective administration of internal controls and compliance controls are established and maintained, according to the following policies:

Responsibilities to Shareholders

The Company is determined to represent all shareholders by conducting business with transparency, putting in place credible financial and accounting systems, and to deliver optimum shareholder satisfaction with regular and sustainable strong long-term operational performance, with consistent and sustainable operating results and continuous growth. The executive board and all employees shall perform duties with integrity and make decisions in good faith and in fairness to major and minor shareholders alike, as well as for the good of relevant parties to the best of their abilities. They shall refrain from any activities that could cause conflicts of interest and serve self-interest. Confidential information shall not be divulged to outside parties while simultaneously paying attention to accurate, complete and punctual disclosure of material information to all shareholders in response to their unwavering trust and support given to the Company and provide the investment returns that satisfy the shareholders the most.

Responsibilities to Employees, Staffs, and Workers and Compensation

The Company recognizes that employees are our most valuable resource. Therefore, the Company is committed to providing fair and appropriate responsibility, in consistence with international standards, to employees in terms of compensation and benefits, rights and freedom, health and safety, as well as employee capacity building.

The Company treats all employees equally and fairly, emphasizing everyone's rights and freedom. We adhere to principles of international human rights. All employees have the right to be treated equally regardless of race, religion, gender, age, marital status, sexual status, social status, health status or any other status. The Company has a policy against all forms of harassment, discrimination, and corruption. In addition, the Company emphasizes employees' health and safety by providing a safe and healthy work environment. We have a strict policy to prevent and control health and safety risks. All employees are provided with regular safety training. Our health and safety management systems are certified with international standards.

The Company has a clear employee compensation management policy for executives and every employee consistent with the Company's performance in consideration of fairness within the organization, throughout the competitiveness in the labor market, as well as legal, cultural and regulatory considerations to be consistent with the mission and values of the organization. The Company sets the appropriate compensation comparable to compensation paid in the same industry by considering knowledge, responsibility and performance of individual employees, combined with parity within the Company's evaluation based on responsibility, task complexity and skills. In addition, the Company has set the compensation management policy based on the employee's performance and operation's performance as motivation for performances.

Also, the Company has provided fringe benefits which exceed the legal requirements such as provident fund, annual health check, health insurance plans, life insurance, accident insurance, gym and recreational activities so that employees can relax from work. The Company has allocated significant long-term benefits that help employees and their families with their livelihood after retirement from the job in the form of a retirement pension. Each year the Company sets aside funds to ensure that the Company can pay compensation to employees in accordance with their rights in the future to encourage employees to prepare before retirement.

The Company coordinated with the Social Security Office for training on the sufficiency economy and saving for retirement for interested employees to make activities for employees before retirement. There has been training with Samut Sakhon community college, for occupational curricula according to the expertise and interests of the employees, such as Thai culinary arts including making soy milk, breakfast donuts with custard, or pork noodles. There are also souvenirs to reward long service dedication with the Company.

In 2023, the compensation for the group's employees for 2023 is as follows.

1. Total compensation of employees for THB 10,262 million was came from THB 5,271 million of male employees and THB 4,991 million of female employees, consists of compensation according to job position, employee performance, and the Company's performance, including salary, which is adjusted annually based on the Company's operating results and annual survey of compensation of various companies, annual bonus based on the Company's performance, provident fund or equivalent fund for overseas employees, overtime payment, diligence allowance, and legal contributions. A contribution to the provident fund or equivalent fund in Asia and North America is THB 197.57 million. The Company has a proportion of employees who participate in the provident fund or equivalent fund of 86.12 percent of the total number of full-time employees in Asia and North America. The Company has determined criteria and guidelines for selecting fund managers so that they can manage the funds in accordance with principles of transparent investment governance to be safe and most beneficial to the fund members. Compensation to ensure that retired employees have enough income for their living, including retirement money paid according to the conditions specified in the employee welfare manual, is also managed.

2. The Company provided welfare and compensation other than salary, bonus, and provident fund, overtime payment, diligence allowance, and legal contributions to executives and employees as suitable to economic conditions, comparable to the standards of leading companies in the same industry. We promoted and supported welfare for employees holistically in various forms, such as marriage allowance, financial aid for employees who have had an accident, money for patient visit, funeral assistance, financial assistance during natural disasters, health examination and medical treatment, etc.

Responsibilities to Customers

The Company's policy is to treat customers with the following responsibilities:

1) The Company has produced quality food under Food Safety and traceability under standardized manufacturing process technology and appropriate technology, including the development of new products and processes to ensure customer benefit and satisfaction.

2) The Company determines the price of goods and services at an appropriate level of detail and quality of products and services as customers demand.

3) The Company ensures its costs are as reasonable as possible while maintaining quality of service standards, according to the Company's customer requirements.

4) The Company delivers high quality products and services to meet or exceed customer expectations and on-time delivery adhering to commitments given to customers.

5) The Company treats customers politely, hospitably and with honesty, pays attention to every customer with fairness, equality without bias.

6) The Company complies with the contract terms or conditions, and if not viable, will inform customers in advance and find a solution to prevent irreversible damage to stakeholders.

7) The Company provides information regarding the instructions on the product features and specifications of goods and services, as well as how to use. The Company also keeps customers informed about the products and other services in a timely manner for customers to have adequate information, with no overstating, so there is no misunderstanding about the quality or condition of any products or services, to maintain good relations with customers sustainably.

8) The Company focuses on maintaining the confidentiality of customer information, not disclose customer's information for their own or related parties' benefit for whatever reason.

9) The Company also sets aside a special unit or appoints persons in charge of handling customer complaints and responds to those complaints without delay.

10) The Company will not receive bribes from customers.

Responsibilities to Business Partners

The Company has adopted a Suppliers' Business Ethics and Labor Code of Conduct to ensure suppliers are treated equitably and fairly in line with commercial conditions. The Company is also open to hearing their opinions and suggestions to forge stronger business relations and gives priority to commercial confidentiality by not disclosing information to third parties. The Company has a policy to select partners by considering the use of labor laws at all times, including communications, acknowledged awareness of the Labor Code of Conduct, including of safety, occupational health, environment and energy conservation policies in the selection of partners and the price comparison or tender which must be approved by authorized personnel to ensure transparency in the procurement function.

Besides routine engagements channeled to various business functions such as marketing teams jointly with customers, procurement teams jointly with trading partners and suppliers, human resources jointly with employees, government relations and administrative functions jointly with government and local communities, finance teams jointly with financial markets and institutions, investor relations jointly with capital markets and investors, corporate communications jointly with media and the public sector, there are additional new key initiatives which have been launched during the year, namely, creating new experiences for customers by deploying sustainability features and capabilities to innovate products, investing in resource sustainability in partnership with international NGO(s), collaborating with academic institutions and government for deep research and development into the basic knowledge and science of seafood products, and participating together with customers, trade associations, and business partners in various taskforces in order to tackle the challenges in natural resource and labor protection, and exchanging views and experiences about sustainable development with private institutions and regulators.

Responsibilities to Creditors

The Company honestly and strictly adheres to loan agreement commitments given to respective creditors and financial institutions so as to ensure the availability of proper and fair returns on their loan investments. Furthermore, the Company works to minimize its exposure to potential conflicts of interest with creditors by 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.

Responsibilities to Competitors

The Company competes with competitors under fair commercial competition, with business ethics and in compliance with applicable legislation. The Company does not seek information such as its competitors' trade secrets by dishonest means and does not destroy the reputation of a competitor in a wrong way or find false information, or pursue cooperation with competitors that is not beneficial to consumers. The Company supports and promotes free trade which is fair and not monopolistic, which would be damaging to consumers. As a result, the Company has not recently had any trading disputes with any competitor.

Responsibilities to the Community and Society

The Company is aware of its responsibility to its community and society, especially for improving the lives of those living and working in the regions where it operates. The Company has worked together with private sector partners, local government, international organizations and civil society on initiatives such as educating children of migrant workers, participating in the CONNEXT ED project that supported 40 schools in Samut Sakhon, Samut Songkhram, Phetchaburi, and Prachuap Khiri Khan provinces, including working with Pracharath Rak Samakkhi, Social Enterprises - Thailand and Samut Sakhon to support local communities in agriculture, agricultural processing, tourism, and providing disaster and famine relief yearly, as part of our commitment to support United Nations Sustainable Development Goal (SDG) to Zero Hunger.

Operational activities:

Responsibilities to the Environment

The Company is aware of its responsibilities to the environment and the need to manage any negative impact on the environment from all aspects of the Company's operations. Sustainable objectives are goals of the Company and as the world's most trusted seafood leader, it has a responsibility to set the standards for environmental protection across its operations into our supply chains. Sea Change ^® is the Company's sustainability strategy aiming to drive a positive transformation throughout the global seafood industry. It covers every aspect of the seafood business including how to care for the health of the oceans and how to manage its waste. The core of the sustainability strategy the ability to fully trace its seafood from catch to consumption, enabling the Company to identify, investigate, and improve its performance on key issue such as labor and responsible sourcing. In 2023, the Company announced SeaChange ^® 2030, a significant expansion of the sustainability strategy, which aims to reshape the seafood industry with solutions for People and Planet that better sustain a future for all through 11 interconnected commitments. This includes committing the equivalent of the Company's entire 2022 net profit of THB 7.2 billion (USD 200 million) through 2030 with aggressive new goals that will impact the entire seafood value chain on a global scale. The commitments actively support the delivery of 10 of the United Nations' Sustainable Development Goals. Please see additional details under the heading "Driving the business to sustainability" in part 1.

Operational activities:

In addition, Thai Union must comply with the legal requirements and other commitments relating to the Group. The Company has prioritized developing the foundation of an environmental, occupational health and safety management system and systematically integrating environmental, occupational health and safety and energy conservation considerations into our business processes. The action plan can be summarized as follows:

1. The Environmental Policy Occupational Health and Safety with a focus on capacity development, as well as the involvement of employees in preventing negative effects on the environment.(https://www.thaiunion.com/ en/about/safety-health-and-environment) 2. The establishment of the Excellence in Environmental, Health and Safety Center, which has equipment at international standards for the collection of knowledge about the environment, health and safety and a training center for employees.

3. Training before starting work and during operations. This training is organized to suit the attributes of the staff, to ensure that employees have a better understanding of how to protect themselves from danger and reduce the environmental impacts of their work.

4. Assessment of compliance with the law continued to ensure that employees have been trained or qualified by law in the environment, health and safety in their business units; evaluating employees' potential as appropriately and effectively and to be comparable to international standards.

Respect of Copyrights and Intellectual Property Rights

The Company promotes executives and employees to strictly comply with and respect property rights, intellectual property, copyrights, patents and ethical rights. There is a policy forbidding employees from any action in violation of any category of intellectual property forbidding any employee from using illegal programs or software and ensuring they strictly comply with the Copyright Act B.E. 2537 (1994), and according to policy to respect intellectual property rights determined by the Company.

Principle 6

Strengthen Effective Risk Management and Internal Control

Controlling System and Internal Audit

The Company has established an audit unit that functions as an independent unit. The current head of this unit is Pongpol Plipuch, General Manager of the Internal audit unit. (for details about the head of the Internal Audit Unit please see attachment 3) The Internal Audit Unit regularly oversees the internal controls system, to inspect significant items including operations, compliance controls, risk management and extraordinary items, to ensure the effectiveness of the controlling system for greater credibility of the financial statements. They report directly to the Audit Committee and administratively to the CEO. The internal audit unit has adopted a risk-based approach in the annual audit plan which focuses on key business risks of the Company and subsidiaries that might have an impact on business goals and the accuracy of financial reports. The Audit Committee reviews the annual audit plan and the audit results and progress reports continuously.

The past internal audit reports indicated that the Company's operations have been in line with the planned systems, possessed efficient internal controls, risk assessment, risk management and prevention measures, compliance control and shown no significant non-compliance in its operations.

Beside the aforementioned internal controls, the Company also set up the internal compliance controls to ensure that the social accountability management is carried out efficiently and in accordance with its business principles, labor practices, ethical recruitment policies, customers' and international standards in labor and related laws. These control systems are overseen by the internal audit unit, consisting of employees from various departments.

Risk Management

The Board of Directors has overall responsibility to ensure risk management is appropriately and effectively implemented. The Risk Management Committee was assigned by the Board to oversee and develop the risk management process and to regularly report on the Company's significant risks to the Board. The Risk Management Committee gave the management team the responsibility to regularly identify internal and external risk factors as well as to conduct an assessment of their impacts on the Company's business. The risk management team is diversely composed of management members and top executives who are directly responsible for the work areas where risk factors are identified. The risk management team analyzes target risk factors in order to determine root causes and create countermeasures. The countermeasures are turned into practical guidance to either prevent or minimize potential impacts of those risks. In addition, the risk management team also follows up and ensures that taken corrective and preventive actions are in line with its directed countermeasures, and coordinates with the Audit Committee at least once per quarter for subsequent submission to the Board. For more details, see Part 1 in Section 2 "Risk Management."

Use of Inside Information and Trading of the Company's Securities

The Company imposes preventive measures to guard against the use of inside information for personal gains among the Board and management members by requiring the directors and the management to inform the Company Secretary at least one day in advance whenever they intend to trade the Company's own stock. All of them have been informed that they have a mandatory duty to report any changes made to their own securities ownership and 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 an immediate basis and not later than three business days following the date of purchase, sale, transfer or receipt of such securities. The Board or management members or sections with access to, or knowledge of, internal information are not allowed to leak the information to outsiders or other unauthorized persons. In addition, no securities trading by those in management is allowed within the Silent 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 shares on the Stock Exchange of Thailand.

In addition, the Company secretary reports every change in the Company's securities held by directors and management to the Chairman of the Board of Directors and Chairman of the Audit Committee, and also provides the report of any changes made to the securities held by directors and management for the year to the Board at the annual board meeting.

In 2023, the Office of the Company Secretary circulated the trading policy and guidelines of the Company's securities through various communication channels, such as training, email communication, and the internal communication platform, Ocean Connect, which is reachable by all executives and employees of the Company and its worldwide subsidiaries in order to raise awareness among executives and employees. The Office of the Company Secretary also composed a letter to notify directors, executives, and other related persons to acknowledge the period of company's securities trading by signing. In 2023, no directors, executives, or employees of the Company were found to have used inside information to buy or sell the Company's securities. Details of the policy and guidelines for inside information is disclosed on the Company website www.thaiunion.com

In compliance with Section 89/14 of the Securities and Exchange Act B.E. 2551 as amended by the Securities and Exchange Act (No.4) B.E. 2551 and the Notification of the Capital Market Supervisory Board No. TorChor. 2/2552 Re: Report on Interest of Directors, Executives and Related Persons, the Company requires every Director and Executive to report to the Company his or her interest and those of related persons. Also, the Company Secretary is required to give a copy of the report on interest to the Chairman of the Board of Directors and the Chairman of Audit Committee within seven business days from the date of receiving the report. The Board of Directors is responsible for setting principles and procedures for such reports.

Criminal Record of the Company and its Directors and Executives

In the past five years, the Company has no case of violation against rules, regulations and laws e.g. regulations of the Securities and Exchange Act, Public Limited Companies Act B.E.2535 or any other laws such as the submission of financial statements within a given timeframe, provision of financial assistance to related companies or other companies that are not subsidiaries. There have been no cases of violation of labor laws or employment laws. In addition, the Directors and Executives, currently holding positions, in the Company and its subsidiaries did not violate any rules, regulations and laws e.g. the Public Limited Companies Act B.E.2535, the Securities and Exchange Act, or the Derivatives Act of B.E.2546.

Principle 7

Insure Disclosure and Financial Integrity

The Board of Directors is aware of its role to maintain financial credibility to shareholders and stakeholders such as investors, analysts, and financial institutions, including the equitable disclosure of such information to the public. The details are as follows:

Information Disclosure and Transparency

The Board maintains a policy of correct, complete and punctual disclosure of material financial and non-financial information about the Company through dissemination channels of the Stock Exchange of Thailand and the investor relations section on the corporate website in both English and Thai languages so as to provide equitable and credible access for shareholders, institutional 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 appropriate accounting policy on a regular and carefully considered basis. Material information is sufficiently disclosed in the notes to the financial statements.

The Board has provided a report indicating its responsibilities to prepare financial statements. Such a report is exhibited alongside the auditor's report in the Company's Annual Report to ensure a true and fair presentation of the financial statements regularly following the generally accepted accounting standards and accounting policy.

The Board's opinion is that there is effective administration of internal controls in the Company and that reasonable fairness is assured for the reliability of the financial statements for the period ending December 31, 2023, for which the Company's auditors have conducted the audits on generally accepted auditing standards.

Information Disclosure to the Public

The Board perceives the importance of correct, complete and transparent information disclosure to all shareholders, investors and all parties concerned on an equitable treatment basis. Information on operations and financial status is communicated clearly and on time under relevant laws to provide target groups with a correct understanding of the Company, thereby creating acceptance and investment sentiment among investors. The communication also allows the Company to gain insight into the public's view on the Company's operations, which will be a part of considerations for future goal and strategy setting. An Investor Relations Unit has been officially set up, consisting of management and other personnel assigned to take responsibility for clearly communicating with the public as follows:

In 2023, the Company regularly communicated information on its operational performance, financial and non-financial information to stock analysts, investors and shareholders as follows:

1. The Company's executives have provided an overview of the operations and answered questions of the analysts and investors in the following events:

In addition, the Board promoted the effective use by the Company of information technology in disseminating information to provide the public with written information in both Thai and English disseminated through its corporate website, https://investor.thaiunion.com/home.html and print media as follows:

2. Media briefings were given and press conferences were organized 46 times.

3. Information provided to the Stock Exchange of Thailand and Securities and Exchange Commission i.e. 56-1 One Report, the Company's quarterly and annual financial statements, quarterly and annual financial analysis reports, letters informing the resolutions of the Board of Directors, the Annual General Meeting of Shareholders and others, Report or notification of any corporate changes in need of public disclosure pursuant to the Notifications of the Securities and Exchange Commission and the Stock Exchange of Thailand.

Investors or analysts are invited to contact the Company's investor relations personnel directly at any time by telephoning 02-2298-0024 ext. 4260 or sending e-mail to ir@thaiunion.com.

Principle 8

Ensure Engagement and Communication with Shareholders

The Board follows good corporate governance principles and sets clear business policy by perceiving equitable treatment of shareholders and stakeholders. This can be evident from the fact that the Board and the management cooperate to efficiently deliver work performance while prudently and carefully carrying out their administrative duties for the best interests of the Company and shareholders. Operations are transparent and can be verified. Information disclosures are made in a complete, accurate, punctual, and equitable manner to all parties concerned. The Company has appropriate and adequate control systems and risk management plans to facilitate 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 disclosures of all material information to ensure its accuracy, fairness and timeliness in order to secure investor confidence.

In addition, the Board realizes the importance of insuring the rights of every group of stakeholders to receive equal treatment and values the support of all stakeholders and their mutual cooperation that enables the Company to continue creating wealth, creating jobs, and insuring the long-term financial wellbeing of the business in a sustainable way, according to the goals that have been set. The Board works to closely oversee the management and insure that they are doing business in an ethical way with full regard for social responsibility and the environment, as well as strictly adhering to a policy of equity. The Company's practices regarding shareholders and stakeholders encompass upholding equal treatment for all shareholders, promoting shareholders' freedom to utilize their rights, protecting against insider trading and conflict of interest, acting responsibly towards stakeholders, and opposing corruption or any action that does not uphold the above-stated policies and practices.

The Company's information disclosures to shareholders are made on the basis of equity regardless of share volume owned, status as an individual or juristic person - local or overseas. In each meeting of the shareholders, the Company places emphasis on and respects the rights of the shareholders by strictly carrying out the meetings pursuant to the Public Limited Companies Act to promote shareholders' rights and to avoid infringing upon the rights of others, including their basic rights to receive adequate, complete and timely information, as well as to ensure their participation in any of the Company's votes and to allow them to voice their opinions, shareholders can access the Company's information via

Shareholders' Meeting

The Annual General Meeting of Shareholders (AGM) has been set annually within four months counting from the annual closing date of its accounting books. For urgent matters regarding the shareholders' interest or those requiring shareholders' approval, the Board shall call for an Extraordinary General Meeting of Shareholders (EGM) as appropriate if necessary. For 2023, the Company arranged an Electronic Annual General Meeting of Shareholders (E-AGM) on April 10, 2023 at 14:00 hrs. via electronic means according to the Emergency Decree on Electronic Meetings, B.E. 2563 (2020) controlling and arranging from Thai Union Group Public Company Limited, S.M. Tower, Phaholyothin Road, Phayathai Sub-District, Phayathai District, Bangkok. The selection of venue and time of the meeting takes into account the convenience, health and safety of shareholders with preparations as follows:

Preparation for the Meeting and Delivery of the Invitation to the Meeting

On-site Meeting Procedures

^* The number of ordinary shares used as the basis for opening the meeting that can be voted on the meeting was 4,655,132,696 shares due to the number of treasury stock under the share repurchase program, totaling 116,682,800 shares, which are not counted as a quorum and has no right to vote.

Post-meeting Procedure and Meeting Minutes

The Company publicized the resolutions of all agenda considered in the 2023 Annual General Meeting of Shareholders through SETLINK immediately on the date of the meeting. In addition, the Board of Directors has assigned the Company Secretary to complete the minutes of the meeting and submit to relevant authorities including publicize on the Company's website at https://investor.thaiunion.com /shareholder_meeting.html and announce to the shareholders via the Stock Exchange of Thailand on April 21, 2023, or 14 days following the date of the AGM. The details and significant matters are completely recorded in accordance with the principles of good corporate governance of the Stock Exchange of Thailand, such as the list of directors and executives who attended, meeting resolutions, questions and suggestions of shareholders, and explanations of the shareholders from the shareholders' meeting that promotes equal rights of all shareholders. As a result, the quality of the 2023 Annual General Meeting of Shareholders was assessed by the Thai Investors Association rated the 2023 Annual General Meeting of Shareholders as "excellent."

The Company allows all stakeholders to ask questions, give opinions or submit complaints regarding the Board of Directors via;

The Office of the Company Secretary shall collect and forward any complaints/questions/opinions to the relevant departments and submit reports to the management department of the Board. The results shall then be sent to the stakeholders concerned. If the result concerns corruption or professional misconducts, it will then be further investigated, and the stakeholders who submit such complaints be protected under the corruption, offender's information, investigation and information provider's protection policy.

Business Code of Conduct

The Board of Directors has created a code of ethics or statement of business conduct for all directors, the management team and employees. The code serves as guidelines for their honest, trustworthy and equitable work operations and is made known to all directors, the management team and employees to ensure their awareness, understanding and compliance. The Company believes that such practice will improve the standards of good corporate governance and promote investor confidence in the Company's management as well as preserve justice and credibility in the capital market. The code of conduct covers the following areas:

1) Responsibility to shareholders

2) Responsibility to customers

3) Responsibility to employees

4) Responsibility to business partner and creditors

5) Responsibility to trade competition

6) Responsibility to society and the environment

7) Compliance with laws, rules and regulations

8) Anti-corruption

9) Safeguarding the Company's assets

10) Intellectual property, data and information technology

11) Conflicts of interest

12) Use of inside information and trading of the Company's securities

13) Distribution of information to the public including interviews

The Board set this code of conduct based on the Company's vision, objectives, and organizational goals to make sure that every administrator and every employee should understand the ethical standards and business guidelines that the Company expects of them. These are the organizational values that should be sincerely followed and practiced.

Shareholders may learn more about good corporate governance, ethical standards and the Company's full Code of Conduct in more detail at https://investor.thaiunion.com/business_ethics.html

Changes and Significant Developments in Policy, Practice and Governance in the Past Year

The Board of Directors of Thai Union Group Public Company Limited has realized the importance of good corporate governance, which should be provided by the Company to support its operations for sustainable growth and wider acceptance in both the domestic and international markets. For this reason, the Board of Directors has been committed to running operations under a good corporate governance framework, which comprises directors and executives who are leaders with visions and responsibilities, and a management structure which controls, monitors, provides checks and balances for fairness, morality and transparency concerning the equity of the shareholders and the stakeholders in order to increase the competitive advantage, which will build confidence among shareholders, investors and stakeholders, to make the Company operate with efficiency, stability, and sustainable growth along with added value in the investments for the shareholders in the long term. In the past year the Board of Directors approved and reviewed the following substantial adjustments to policy and practice for good corporate governance:

Moreover, the Company has been evaluated at the level "Excellent, worthy of being an example" with a full score of 100 points (5 medals) from the results of the quality assessment of the 2023 Annual General Meeting of Shareholders (AGM), which is the outcome of the business's continuing efforts to develop corporate governance.

Explanation in cases where the Company has not been able to fulfill Good Corporate Governance Practices

The Company has strived to follow the guidelines of Corporate Governance Code (CG Code) for listed companies issued by the Securities Exchange Commission with some adjustments as appropriate for the business situation. In 2023 there were some cases in which the Company has not been able to follow or implement some of the good corporate governance recommendations, but has substituted alternative practices that are deemed suitable. These are always recorded and presented to the Board of Directors for consideration, review, and monitoring for further action each year. The results that cannot be implemented are as follows:

07 Corporate Governance Structure and Key Information Concerning the Board of Directors, Sub-committees, Executives and Employees, etc.

7.2 About the Board of Directors

The Board of Directors comprises the Chairman of the Board, the Chairman of the Executive Committee, the Chief Executive Officer, Executive Directors, Non-Executive Directors and independent directors in a proportion and number this is appropriate to the size of the business. The total Board comprises 11 individuals, the independent directors have true independence from management with no relationship to the business or any other relationship which might have an influence on their independent judgment. Independent directors currently consist of five individuals with the qualifications to be an independent director according to the definition of the office of the Securities Exchange Commission. Independent directors possess sufficient knowledge and experience to review the credibility of financial statements.

It is the duty of the Board of Directors to supervise the Company's operations to be conducted in accordance with the laws, the objectives and the regulations of the Company, the corporate governance policy and the resolutions of the Board of Directors' meetings, the Company's vision, the goals, the business policy, and the direction of the Company's operations. The Board of Directors also monitors the performances of the directors to ensure they are carried out with morality and effectiveness pursuant to the stipulated policy, and to make certain that conflicts of interest shall not be made between the stakeholders of the Company by disclosing the Company's information in a complete, accurate and constant manner.

Authorized Directors to Sign Contracts: Cheng Niruttinanon or Thiraphong Chansiri or Rittirong Boonmechote or Shue Chung Chan, two of the aforementioned directors jointly sign with the Company's seal affixed.

Length of Directors' tenure

This is according to the Articles of Association of Thai Union Group PCL, Section 5, Directors, as follows:

17. At every Annual General Meeting, one-third of the directors shall retire from their directorships. In case the number of directors is not a multiple of three, the number nearest to one-third shall retire from their directorships.

During the first and second years following the Company's registration, the termination of members of Board of Directors shall be determined by drawing lots. The director with the longest period of directorship is required to leave in the subsequent years. 20. In the case that any directorship falls vacant for reasons other than by rotation, the Board of Directors shall elect a substitute director during the next meeting of the Board of Directors, provided that such substitute director must be qualified pursuant to the law governing a public limited company. With exception, in the case that the remaining term of office of the directorship is less than two months, the substitute director shall hold the position only for the remaining term of office of the director whom he or she replaced.

The resolution of the Board of Directors under the foregoing paragraph must contain no less than three-fourth of votes by directors remaining at that time.

The Articles of Association may be found at the website https://investor.thaiunion.com/misc/aoa/20200921-tu-aoa-en.pdf under the heading of "Investor Relations".

Thai Union Board Skill Matrix 2023

Accounting, Finance & Economics:

Management:

Industry Knowledge:

Consumer Staples / Food & Fish Industry

Diversity

Geographie Resident:

10 Thailand

1 Japan

Nationality:

Age (Year Old):

Gender

9 Male

2 Female

7.2.1 The Composition of the Board of Directors

The Board of Directors is comprised of 11 directors, of which four are Executive Directors, two are Non-Executive Directors and five are Independent Directors. With the proportion of Executive Directors and Non-Executive Directors at 4:7, that is a higher proportion of Non-Executive Directors than Executive Directors. (representing at 63.64 percent of the total directors). The Board committee is able to perform its duties in controlling and supervising the management's work appropriately, with the Directors knowledgeable in their roles and duties and responsibilities to shareholders and may carry out their duties independently for the benefit of the Company and its shareholders. The Board of Directors is also diverse in terms of work experience, age, education, gender, race, ethnicity, country of origin, nationality and cultural background.

Directorships in other listed companies

It is specified but directors may not hold more than four directorships in other listed companies, for the directors to fully execute their duties efficiently. This does not include subsidiaries, associated companies and joint ventures, which the Company must oversee and manage to maintain the Company's interests.

7.2.2 Information about Directors and Authorized Persons

The Board of Directors consists of experienced and knowledgeable directors in various fields e.g. marketing, accounting and finance, business management and Information Technology.

The Board of Directors were as follows:

^* Tenure only calculated up to December 31, 2023

Separation of roles and duties of the Board of Directors

The Company clearly specifies and separates the power of the Board of Directors from the management in each level. The consideration of any important issues must be approved by the Board of Directors and subcommittee so as to balance the power and ensure transparency and fairness to all stakeholders. Important matters must be considered and approved by the Board of Directors and its subcommittees on every occasion.

Separation between Chairman of the Board of Directors and Chief Executive Officer

The Chairman and Chief Executive Officer of the Company is not the same person, clearly separating between policy and management.

Role and Responsibilities of the Chairman of the Board of Directors

The Chairman of the Board is Kirati Assakul, who is also an independent director and has been appointed in this position since 8 August 2022. The Board of Directors, mindful of appropriate measures to balance power, appointed additional independent directors in a proportion of 45.45 percent (five directors) out of the total Board of Directors (11 directors). With the proportion of executive directors and non-executive directors at 4:7, that is a higher proportion of non-executive directors than executive directors. (representing at 63.64 percent of the total directors), which is considered an appropriate balance. The Chairman of the Board of Directors, an independent director, has the duties to oversee policy advocacy and the strategic performance of the Company's management but shall not practice in the daily operations, monitors the meeting effectively according to Company policy and encourages all directors to express their opinions independently, supports and encourages the Board of Directors' duties, responsibilities and the principles of good corporate governance, and oversees and monitors the management of the Board of Directors and other subcommittees to achieve their specified objectives.

Role and Responsibilities of the Chief Executive Officer (CEO)

The Chief Executive Officer is designated by the Board of Directors as an authorized person to manage, including policy-making, decision-making and corporate decision making, including the following:

1. Administering the Company's business and day-to-day operations to be in line with the objectives, articles of association, policies, rules, regulations, instructions and resolutions of the Board of Directors Meeting and/or resolutions of the Shareholders' Meeting.

2. Arrange to prepare the Company's business policies, business plans and budget to be proposed to the Board of Directors for approval and has a duty to report the progress on such approved business plans and budget to the Board of Directors.

3. Ensure the Company's overall business growth in accordance with the Company's objectives and business plans.

4. Authorize to act on the Company's behalf to enter into contractual arrangements as prescribed in the Company's policy and procedures regarding the operational approval authority.

5. Ensure good governance, compliance with the law, ethical standards, anti-corruption policy and corporate governance policy 6. Maintain a good relationship with the stakeholders.

7. Communicate effectively in a positive image with the public, shareholders, customers and stakeholders.

8. Manage the Company's HR operation to issue/ amend/ add/ update rules and regulations and personnel policies and procedures.

9. Be authorized to sub-authorize and/or delegate other persons to perform specific duties on his behalf. Such sub-authorization and/or delegation shall be within the scope of authorization or delegation in accordance with the power of attorney granted and/or shall be in accordance with the internal regulations, rules or instructions given by the Board of Directors and/or the Company. The authorization of duties and responsibilities of the CEO shall not constitute an authorization or sub-authorization which may cause the CEO or his authorized person(s) to be able to approve any transaction in which they, or any person who may have a conflict of interest, may have an interest or may gain benefit in any manner, or in which they may have any other conflict of interest with the Company or its subsidiaries, unless the approvals of such transactions are consistent with the policies and criteria approved by the Shareholders Meeting or the Board of Directors Meeting.

Policy on the CEO holding positions in other companies

The Chief Executive Officer is also required to hold a position of executive director of no more than three listed companies in non-affiliated companies, and holding such positions must not affect the performance of the CEO duties. The Chief Executive Officer must not serve as a Chief Executive Officer in other listed companies, for the maximum benefit of the Company that the CEO is able to dedicate his time to his duties efficiently.

7.2.3 Roles and responsibilities of the Board of Directors

The 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 interests of the Company. Additionally, the Board of Directors is responsible for setting corporate policy and direction as well as ensuring that the management implements the policy effectively and efficiently.

Board members are required to disclose any material interests in transactions or contracts which the Company enters into and increase/decrease in share/debenture ownership in the Company or its subsidiaries during any fiscal year. The Board of Directors is authorized to implement and direct the Company's activities except for the following issues, which require prior shareholder approval:

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

2) Altering the Company's par value or registered capital;

3) Increasing the Company's Board members.

4) Any deed that yields the Board of Directors a gain or loss or any deed that is obliged, by SET regulations, to have shareholder's approval.

Roles and responsibilities

The Board of Directors is responsible to the shareholders in overseeing the Company's business operations and steering the Company towards the agreed targets and on a path that maximizes shareholders' long-term benefits, with consideration to business ethics and fairness to all relevant stakeholders. Duties and Responsibilities are as follows:

1) Manage the Company in accordance with the objectives, regulations, and decisions set by the shareholders' meetings, and oversees the Company's business operations.

2) Set the Company's vision, mission and goals.

3) Review and approve vision and mission every five years.

4) Set targets and business policies to be implemented by the management.

5) Monitor the implementation of the strategy, goals and policies to comply with the Company's objectives.

6) Oversee the management's performance to ensure effectiveness.

7) Hold at least five Board of Directors Meetings per year.

8) Hold at least one general shareholders' meeting to report the Company's operating results and request approval on management matters that are beyond the scope of the directors' authorization.

9) Monitor operating results and the financial status of the Company and its subsidiaries.

10) Approve quarterly and annual financial reports, information disclosure reports (Form 56-1), in accordance with the regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission.

11) Prepare a report on the Board of Directors' accountability for financial reporting, to be shown in conjunction with the auditor's report in the Company's Annual Report, to give assurance that the Company's financial reports are accurate and have been prepared based on standard accounting principles and consistent accounting policy.

12) Set up the Company's internal control system, internal audit system, and an effective risk management system.

13) Propose the appointment of an auditor and set the level of compensation as proposed by the Audit Committee.

14) Propose the list of directors to be replaced and their replacement to the general shareholders' meeting.

15) Propose the rate of meeting allowances, compensation to directors and members of subcommittees to the general shareholders' meeting.

16) Examine and approve matters proposed by the management committee and related to connected transactions, potential conflict of interests, purchase and sales of assets and other matters as specified in the rules and regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand.

17) Examine and approve the Company's transactions involving legally-binding contractual obligations, debts obligations, and guarantees.

18) Approve the appointment and set the scope of work and compensation for the Company's sub-committees.

19) Set the number of other companies in which the President & CEO may hold the position of Director.

20) Set and approve a written corporate governance policy for the Company and review the policy and compliance to the policy regularly, at least annually.

21) Set and monitor a written code of business conduct and anti-corruption policy so that all directors, executives and employees understand the business ethical standards and guidelines of the Company.

22) Approve the appointment of the Company's secretary.

To prepare or store documents:

Other duties concerned with good governance pursuant to regulations and announcements of the the Stock Exchange of Thailand and the Securities and Exchange Commission

23) Adhere to the Principle of Good Corporate Governance for Listed Companies, and other requirements on this subject by the Stock Exchange of Thailand and the Securities and Exchange Commission.

Independent directors

Under the Corporate Governance Policy, at least one-third of Board members and not less than three persons, must be independent directors with a 3-year term of office. These directors should be qualified and independent in line with the same qualification criteria described in the Notification Governing Qualifications and Responsibilities of the Audit Committee established by the Stock Exchange of Thailand. In addition, a person qualified to serve as an independent director must be able to perform duties to preserve the best interests of all shareholders in an equitable manner without conflicts of interest and be available in Board meetings to give independent and unbiased opinions and judgments.

Qualification of independent directors

1) Not hold shares of more than 0.05 percent of total voting stocks of TU including stocks held by connected persons of the independent director, as well as nominees.

2) Not be nor have been a major shareholder.

3) Not be nor have been a Board member of its parent company or an executive director, employee, staff, advisor who receives the salary of a controlling person of TU, its parent company, its subsidiaries or its associated companies.

4) Not be a professional advisor.

5) Not have nor have had a business relationship with the Company, its parent Company, its subsidiaries, its associated companies or a juristic person who may have conflicts of interest, in the manner that may interfere with his independent judgment.

6) Not be appointed as a representative of the Company's or its major shareholder's Board members or a shareholder who is related to the Company's major shareholders.

7) Not have any characteristics which make him or her incapable of expressing independent opinions with regard to the Company's business affairs.

The aforementioned definition of an independent director is based on the Company's Corporate Governance Policy established by the Board. Moreover, the Company's criteria are stricter than "the criteria" required by the Stock Exchange of Thailand and the Securities and Exchange Commission in terms of stock holding ratio.

Meetings of Non-Executive Directors

The Board of Directors supports Non-Executive Directors to hold meetings with no executive directors present for the Non-Executive Directors to discuss matters concerned with management independently as they see fit. In 2023, the Non-Executive Directors' Meeting was held once on 6 November 2023 with five Non-Executive Directors in attendance, which discussed many important issues related to the management of the Company and the Company's business operations, including suggestions for management improvement. After the meeting, the result of the meeting was reported to the Chief Executive Officer for further consideration and action.

Meeting Attendance

The Directors of the Company are committed and always prepared to attend meetings, including the Board of Directors' Meetings, the Sub-Committees' Meetings, and the Annual General Meeting of Shareholders. Also, the Board of Directors has set the quorum with a minimum of at least two-thirds of the total members of directors in order to make a quorum who shall vote in the meeting. Every director should attend not less than 80 percent of all meetings in one fiscal year. Meeting attendance in 2023 can be seen in detail under heading 8.1.2. Attendance at meeting and payment of remuneration for individual directors.

The Board of Directors' Meeting

The Board of Directors has set regular meetings at least five times a year in February, May, August, November and December of every year so that the directors can attend all meetings and may set an additional schedule, if necessary.

The Company Secretary will send out the tentative schedule of meetings in November 2022 and in advance every year so that the directors are informed and are able to plan for the meeting. In 2023, there were eight meetings held as follows:

The Chairman of the Board of the Directors and the CEO collaborate to set the agenda for the meeting while other directors may also present an agenda for consideration. The Company secretary may also present an agenda which relates to the rules and regulations to complete the list.

It is the duty of the Company Secretary to distribute the invitation letter and supporting documents to the meeting along with the agenda and the documents to the directors no less than seven days in advance, except for matters which need urgent consideration.

The Board of the Directors has set the quorum with minimum of at least two-thirds of the total members of the directors in order to make a quorum who shall vote in the meeting. The Chairman of the Board of the Directors shall be in charge and allocate sufficient time for each agenda so that the directors may express their opinions while the executives who are involved with that particular agenda present the data and information for an particular agenda present the data and information for an exchange of views. Each meeting shall last 2-3 hours.

It is the duty of the Company Secretary to provide the minutes and present them to the Chairman of the Board of the Directors and to verify and deliver them to each director for comment. A meeting report shall consist of minutes of the resolutions of the meeting along with sufficient and accurate data and information.

Use of Internal Information

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 three 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 knowledge 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 the 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 the 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.

Controlling System, Internal Audit and Risk Management

The Board of Directors has established an audit unit that functions as an independent unit to ensure the effectiveness of the controlling system for greater credibility of the financial statements, and an efficient system of internal control specifying evaluation of risks to the business and determining measures to protect against and manage risk, ensure there is oversight of compliance with the law and other specifications with an audit committee to investigate the efficiency of internal control systems which cover operations, compliance control, risk management and giving priority to extraordinary items.

In risk management, the executive committee has assigned a group of responsible executives to evaluate risk factors both internally and externally consistently, and this group includes executives and high ranking executives in the departments relevant to that risk. Analysis is performed on the cause of the risk to determine measures to manage the risk as guidelines for implementation to prevent that risk, or reduce its impact including follow up of compliance with the measures specified and coordinating with the audit committee to propose to a meeting of the Board of Directors.

Disclosure of Information

The Board perceives the importance of correct, complete and transparent information disclosure to all shareholders, investors and all parties concerned on an equitable treatment basis. Information on operations and financial status is communicated clearly and timely under relevant laws to provide target groups with a correct understanding of the Company, thereby creating acceptance and positive investment sentiment among investors. The communication also allows the Company to gain insight into the public's view on the Company's operations, which will be a part of considerations for future goal and strategy setting. The Investor Relations Unit is officially set up to communicate with investors and provide convenience to investors and securities analysts equally with continuous meetings to be apprised of Company information and to exchange opinions including disseminating information on the Company's website.

Conflicts of Interest

Shareholding structure and proportions of shares held by directors including spouses and children who are minors

^* New appointed director on May 3, 2023

^** As of September 1, 2023, the registered paid-up capital of the Company has been decreased by 116,682,800 shares by write-off of the repurchased shares.

The remaining amount of the Company's registered paid-up capital was equivalent to 4,655,132,696 shares.

Board Orientation and Continuous Development of Directors

The Company has supplied a manual for the orientation of new directors to be informed of and understand the Company's business and its operations, which are necessary to facilitate the new directors to perform their duties as a director immediately and express their opinions on the Company's policies in meetings, and for good corporate governance. The Company Secretary coordinated the orientations as follows: 1. Things to know: organizational structure and Board structure, scope of powers and pertinent laws 2. General information about the business and its operational methods.

In 2023, the Company appointed one new director, and therefore organized orientation through an online system as well as sending to the new directors the manual for new directors, various rules pertaining to the law, regulations, articles of association and key policies such as policies of good corporate governance, reporting to stakeholders and anti-corruption policy.

Besides this, every director participated in self-development to assist the Board in conducting its obligations of oversight efficiently. In 2023, directors underwent additional training as follows:

1. Kirati Assakul attended the 55/2023 Role of the Chairman Program (RCP) / Institute of Thai Directors (IOD).

2. Pakapun Leevutinun attended the 335/2023 Director Certification Program (DCP) / Institute of Thai Directors (IOD).

3. All Directors and executives have participated in courses concerning the guidelines and practices of good corporate governance, guidelines on internal information usage, reporting of securities holding, disclosure of listed company and conflict of interest that the Company has organized for the Directors and executives, which in the past year the Company has invited Allen & Overy to serve as instructor to organize the courses.

Beside the mentioned training courses, in the past year, the Company's Directors have also participated and shared their expertise and knowledge to the Directors in other listed companies as follows:

1. Thiraphong Chansiri was invited to participate in providing knowledge to directors and outsiders as follows:

1.1 Gave an interview about the Company's sustainability operations to the Thai Institute of Directors Association (IOD) for creating a video for an ESG course for Board of Directors, as an organization leader who plays a key role in driving sustainability strategies. As a result, the Company is recognized internationally as a leader in conducting business for sustainability.

1.2 Participated in a special discussion on the topic of "Preventing Corruption in Organizations: Whose role is it?" at the Thai IOD Independent Director Forum 2023 hosted by Thai Institute of Directors Association (IOD).

2. Thamnoon Ananthothai was invited to participate as a lecturer for the Thai Institute of Directors Association (IOD) in several courses as follows:

2.1 Director Certification Program (DCP) course on the topic of Assessing Company Performance

2.2 Board Nomination & Compensation Program (BNCP) course on the topic of Director Compensation

2.3 Risk Management Program for Corporate Leaders (RCL) course on the topic of Managing Opportunities

Directors residing in Thailand took various courses by the Institute of Directors and other institutions as follows:

DCP: Director Certification Program

RCC: The Role of Compensation Committee

EDP: Executive Development Program

ELP: Ethical Leadership Program

JTI: Senior Justice Executive Program / Judicial Training Institute

AMM: Advance Master of Management Program / National Institute Development Administration (NIDA)

DAP: Director Accreditation Program

ACP: Audit Committee Program

AACP: Advance Audit Committee Program

ACF: Audit Committee Forum

BNCP: Broad Nomination & Compensation Program

RCP: The Role of Chairman Program

UFS: Understanding the Fundamental of Financial Statement

CMA: Capital Market Academy

TEA: Senior Executive Program in Energy Science / Thailand Energy Academy

Performance Evaluation of Directors

The Board has determined the performance evaluation of the Board, and every sub-committee at least once a year since 2013. These include the Board of Directors, the Executive Committee, the Audit Committee, the Risk Management Committee, the Nomination, Remuneration and Corporate Governance Committee and the Sustainable Development Committee. The evaluation form of the Board of Directors is divided into individual evaluations and of the whole Board as a self-evaluation every year.

Evaluation process

1. The Company Secretary has sent evaluation forms by email to the directors for annual self-evaluation 2. Summarized and presented the evaluation results which is divided into 4 levels: 1. Excellent 2. Good 3. Fair and 4.should be improved then reported to the Chairman of the Board and the chairman of each subcommittee to study and analyze the evaluation results together and determine practical methods of development of the director's work with the objective to help directors consider reviewing their performance, various issues and hindrances over the past year to formulate methods of improvement for the Board to carry out its duties more efficiently.

Board of Directors Performance Assessment

1) Structure and Qualification of the Directors

2) Role, Duty and Responsibility of the Directors

3) The Board of Directors' Meetings

4) Performance of the Directors

5) The Relationship with the Management team

6) Self-development of the Directors and the development of the Executives

Individual performance assessment of each director

1) Core competency, Structure and Qualification of the Directors

2) The Board of Directors' Meetings

3) Role, Duty and Responsibility of the Directors

Performance assessment of sub-committees for each individual sub-committees member

1) Structure and Qualification of the sub-committee

2) Sub-committee meetings

3) Role, Duty and Responsibility of the sub-committee

4) Performance of the member

5) The Relationship with the Management team

6) Self-development of the members

Performance assessment of sub-committee as a whole

1) Structure and Qualification of the sub-committee

2) Sub-committee meetings

3) Role, Duty and Responsibility of the sub-committee

The Board of Directors has also determined a performance assessment of the Chief Executive Officer (CEO) which is considered according to targets and success of that achievement under the following headings:

1. Leadership and Managerial Qualities

2. Strategie Direction Setting

3. Strategie monitoring

4. Planning and Performance

5. Board Relations

6. Community Relations

7. Management and Relationship with employees

8. Succession Plan

9. Knowledge and Skills

10. Personal Qualification

The Company secretary has sent the evaluation forms of the Board of Directors to the directors, which summarized and presented the evaluation results to the Board of Directors in order to achieve the above-mentioned objectives. The evaluation of the performance was as follows:

In 2023, the Company conducted a performance assessment of the Board of Directors and every sub-committee, both individually and as a group. The result was that the Board and every sub-committee had satisfactorily fulfilled their obligations under the scope of their authority, and in accordance with the good corporate governance principles. The Company's Secretariat also used the result of this assessment to enhance the performance of the Board.

7.3 Sub-Committees

The structure of the Board of Directors comprises five sub-committees: the Executive Committee (ExCom), the Audit Committee (AC), the Nomination, Remuneration and Corporate Governance Committee (NRCG), the Risk Management Committee (RMC) and the Sustainable Development Committee (SDC), which together screen important issues for the consideration of the Board. The details of the sub-committees are as follows.

1) Executive Committee: ExCom

In 2019, the Board of Directors approved the setting up of the Executive Committee ("ExCom") to act on behalf of the Board for greater fluidity. They shall approve the acquisition or disposal of the assets without the submission of the Board of Directors within the limit of not more than 15 percent of Net Tangible Asset of the Company or the Consolidated Company but no more than USD 50 million. Therefore, the ExCom limit must be changed annually and automatically as per the annual financial statement to reflect the growing size of the Company. The office of the Company Secretary will inform the ExCom of how much the present limit is each year, once the Company's annual accounts are made public.

There are four members of the ExCom:

Role and Responsibilities

1) Follow the policies set by the Board of Directors, under the laws, rules, regulations and corporate regulations. The Executive Committee also represents the Board in approving the operations that involve no more than 15 percent of the net tangible assets of the Company or of the consolidated company, but the total amount must not exceed USD 50 million.

2) Consider the investment projects, mergers and acquisitions, establishment of subsidiaries, joint ventures and joint investment companies, as well as deciding whether to stop or renegotiate any investments or carry out other undertakings that are required for a project's completion

3) Set, advise, direct and submit policies involving business directions and strategies to be considered by the Board

4) Make business plans, set management priorities, annual operations budget and annual expenses for the Board's approval, and proceed with the mentioned business plans and strategies in accordance with the policies as announced to the Board

5) Undertake operations that concern the Company's general administration, approval of projects, investment expenditures, and set up organizational and administrative structures 6) Consider and approve any requests for loans or grants from financial institutions, as well as open bank accounts, sign as a guarantor and make payments concerning the Company's normal transactions such as investment payments, expansion of branches and other operations. However, the amount of money involved may be changed subject to the discretion of the Board.

7) Consider and specify the sources of the budget or support funds for subsidiaries

8) Consider customers' credit limits

9) Consider acquiring essential insurances

10) Perform other duties as deemed appropriate by the Board of Directors

Also, the approval of these items must not have the attribute of being approved as an item making the Board of Directors or the authorized persons from the Executive Committee be approving an item which themselves, or an individual who may be in conflict or have an interest, or any other conflict of interest (pursuant to the Company's Articles of Association and announcements of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand) with the Company or its subsidiaries, except in the case of approving items which are according to policy and criteria approved by the Board of Directors. Regarding this, if the Board of Directors has an interest in the matter it is not entitled to vote on that matter, in which the Board of Directors is authorized to amend the scope of powers and obligations of the Executive Committee, as necessary or appropriate.

Composition and Qualifications

1. The Executive Board consists of experienced and qualified directors who are approved by the Board of Directors.

2. Chairman of the Executive Committee must be approved by the Board of Directors.

3. The Executive Committee appoints the secretary as it deems appropriate.

In the case of the Board of Directors authorizing other individuals to act on their behalf in a matter related to normal operations, this authorization is according to the resolution of a meeting of the Board of Directors and has clearly specified scope, powers, obligations and responsibilities. It is not considered to be an authorization enabling the authorized party to approve items, switch back persons or a person who may have a conflict of interest in any other way with the Company authorizing or a subsidiary.

Term of Duty

The Executive Committee is incumbent by their positions as members of the Board or the Company's executives. Additionally, directors and executives whose term of office has elapsed may be reappointed if deemed necessary and appropriate.

2) Audit Committee

The Audit Committee was established by the approval of the Board of the Directors on November 15, 1999 for the purpose of supporting and acting on behalf of the Board of Directors to review the financial information to be presented to the shareholders and other stakeholders, and to review the risk management systems, the internal control systems, the internal audits and good corporate governance, and to control the anti-corruption measures as well as to review the financial reports' preparation for the Company's transparent and trustworthy operations and disclosure of information. On February 20, 2023, the Board of Directors' meeting resolved the approval of the amendment and announcement of the Audit Committee Charter. This revision of Audit Committee Charter is to update and improve the Audit Committee Charter based on the Company's Code of Ethics as well as the relevant rules and regulations. The Audit Committee must be directors of the Company who are qualified as independent directors and consist of not less than three members who will serve for three years, comprised of one Chairman of the Audit Committee and two Audit Committee members and at least one of them must possess sufficient knowledge and experience in order to perform his/ her/ their duties of reviewing the credibility of the financial statements. All three are independent directors who have the qualifications required by the Office of Securities and Exchange Commission and have been appointed by the Board of Directors then the Audit Committee select one of members to be the Chairman of the Audit Committee.

The Audit Committee shall hold at least 12 meetings per year and report their performance to the Board of Directors at least once a year. At present the Audit Committee consists of:

1. Nart Liucharoen

Chairman of the Audit Committee, with knowledge and experience in information technology

(Master of Science (Business Administration), University of Southern California, USA)

(MBA University of Southern California, USA)

(Bachelor of Engineering (Computer), Chulalongkorn University)

2. Thamnoon Ananthothai

Member of the Audit Committee, with knowledge and experience in accounting

(Ph.D. International Management, Walden University, USA)

(MBA (Management) University of Sarasota, USA)

(BBA (Accountancy & Management) Eckerd College-St. Petersburg, USA)

3. Parnsiree Amatayakul

Member of the Audit Committee, with knowledge and experience in accounting

(MBA University of California, Los Angeles, USA)

(BBA, Faculty of Commerce and Accountancy, Chulalongkorn University)

Extent of the Duties of the Audit Committee

The Company stipulated that the Audit Committee must consist of one in three of the total number of directors who are independent, or as the Office of the Securities Exchange Commission and the Securities Exchange of Thailand require. They must possess sufficient credible knowledge and experience in finance to be able to inspect the Company's accounts. The Audit Committee shall make all its decisions based on the benefit of shareholders and will be responsible for other duties, summarized below.

1. Review the appropriateness of the financial reporting system and disclosure of information in its financial statements in accordance with the legally defined Financial Reporting Standards, with transparency, correctness, and adequacy.

2. Review the consistency of the information in the Company's financial reports against other information in relation to the Company's financial positions and operational results that being communicated to the investors or relevant parties.

3. Encourage the development of a financial reporting system equivalent to International Financial Reporting Standards.

4. Review the compliance of the Company's Internal Control System with the Internal Control Framework (COSO 2013) and the appropriateness and the effectiveness of the Company's Internal Audit System in accordance with internationally accepted approaches and standards.

5. Review "The Assessment Form of the Adequacy of the Internal Control System" as audited and assessed by the Internal Audit Team to ensure that the Company has sufficient internal control systems.

6. Review the presence of a proactive preventive system to enhance the operating effectiveness and efficiency and review the preventive measures in the organization and review the internal processes of the whistleblower system.

7. Review the internal audit process and the corporate risk management system.

8. Review the Company's Compliance Procedure in accordance with the Securities and Exchange Act, rules, regulations and other laws relevant to the Company's business and the resolution of the Board's meeting.

9. Review the correctness and effectiveness of the information technology system relating to internal controls, financial reports, risk management and data & network security together with suggested updates and improvements as needed.

10. Consider connected transactions or those having possible conflict of interest to ensure compliance with all pertinent laws and requirements of the Stock Exchange of Thailand.

11. Review the execution of the Audit Committee members' performance assessment, both as a whole and self-assessment, of the Audit Committee annually.

12. Review and give the opinion toward the audit practices of the Internal Audit Team and coordinate with external auditors.

13. Prepare the Audit Committee's report to be disclosed in the Company's Annual Report and duly signed by the Chairman of the Audit Committee and containing opinions on various matters as required by the SET.

14. Consider, select and propose the appointment, or discharge an independent person to perform the duties of the Company's auditor and also propose the remuneration of the Company's external auditor and evaluate the effectiveness of the external auditor's performance and organize meetings with the Company's external auditor, without the attendance of management, at least once a year.

15. Approve the internal audit plan, budget and manpower of the Internal Audit Team.

16. Review the execution of the Internal Audit Team for the performance assessment according to international standards.

17. Provide recommendations in respect of the appointment, removal, transfer, or dismissal of the General Manager - Audit Unit.

18. Consider the independence of the Internal Audit Team based upon the execution of work, reports, and line of command.

19. Review the adequacy of the good corporate governance systems both of the domestic and foreign subsidiary companies.

20. Consider the external consultants to provide the suggestions or assistance in the operations of internal audit.

21. Review the Audit Committee Charter and Internal Audit Charter to be the proper charter at least once a year.

22. Visit the business units of the Company and the domestic and foreign subsidiary companies to review operations, the risk management and internal control systems, the environmental management system, information systems including cyber security, the important operational systems and regulations as well as problems and comments of the external auditors and the internal audit team.

23. Review the Company's anti-corruption procedures to ensure the effective compliance with the governance bodies' guidelines starting from assessing the risks, strengthening the internal control system, auditing, as well as reviewing the self-assessment form on anti-corruption measures which have been verified and assessed by the Internal Audit Team to ensure that there are anti-corruption systems according to the report made in accordance with the Thai Institute of Directors (IOD) self-assessment form.

24. Perform other actions as required by law or as assigned by the Board of Directors under the consent of the Audit Committee.

25. In the case that the subsidiary is a SET-listed company or the subsidiary has its own audit committee, the implementation of Clauses 1 - 23 in the subsidiary and any other companies within its group shall be supervised by the subsidiary's own Audit Committee.

To fulfill its duties under its scope of responsibilities, the Audit Committee is authorized to call for and order management, heads of offices, or employees concerned to present opinions, attend meetings, or submit necessary documents. In addition, the Committee may seek independent opinion from professional consultants as deemed appropriate, at the Company's expense.

The Audit Committee performs duties within its responsibilities under the order of the Board of Directors. The Board of Directors is responsible for the Company's operations and is directly accountable to shareholders, stakeholders, and the public.

Responsibilities of the Audit Committee

1. In case the Audit Committee is informed by the auditor about suspicious behavior of directors, managers or persons responsible for the business operations of the Company, which may violate paragraph 2 of Section 281/2, Section 305, 306, 308, 309, 310, 311, 312 or 313 of the Securities and Exchange Act, the Audit Committee is to investigate the case and submit a preliminary report to the Securities and Exchange Commission (SEC), as well as to the auditor, within 30 days of the date it is informed.

2. Upon finding or having doubt about the following actions or transactions, which may significantly affect the financial position and performance of the Company, the Audit Committee is to report such events to the Board of Directors in order to find a remedy within a period deemed appropriate by the Audit Committee:

2.1 A transaction which may cause conflicts of interest.

2.2 Fraud or irregular events or material flaws in the internal control system.

2.3 Violations of laws pertaining to Securities and the Stock Exchange of Thailand, the regulations of the Stock Exchange of Thailand, or laws pertaining to the Company's business.

Should the Board of Directors or management fail to remedy the issues within the timeline specified by the Audit Committee, a member of the Audit Committee may report the issue to the SEC or the SET. The Audit Committee is directly responsible to the Board of Directors, and the Board of Directors is responsible to the general public and external persons.

In 2023, the Audit Committee met regularly to fulfill its duties, with a total of nine meetings, and reported on its work to the Board of Directors. Details of the operations of the Audit Committee have been disclosed in the Audit Committee Report.

Powers and Responsibilities

1. The Audit Committee may ask directors, managers, or employees to consult or answer questions

2. The Audit Committee may ask for advice or consultation from the Company's experts or may hire external experts or consultants if necessary

Term of Duty

The members of the Audit Committee shall each serve for three years unless the Board of Directors decides otherwise. When there is a vacancy for some other reason besides the end of a member's term, the Board of Directors shall appoint another Audit Committee member who is qualified for the position to make sure that there are three members. The person replacing the member will serve only as long as the remaining term of three full years of the member they are replacing.

3) Nomination, Remuneration and Corporate Governance Committee

The Board of Directors has set up the Nomination and Remuneration Committee since November 1, 2010 for a period of three years for each term. The Board of Directors Meeting No. 1/2022 held on February 23, 2022 resolved to approve the additional roles and responsibilities of the Nomination and Remuneration Committee to cover corporate governance. Thus, changing the name of this sub-committee from "Nomination and Remuneration Committee" to "Nomination, Remuneration and Corporate Governance Committee". The Committee is comprised of one Chairman of the Nomination, Remuneration and Corporate Governance Committee and one member of the Nomination and Remuneration Committee. Both members are independent directors and have the qualifications required by the Office of Securities and Exchange Commission. They are knowledgeable, competent and experienced and thoroughly understand their duties and responsibilities.

The Chairman and member of the Nomination, Remuneration and Corporate Governance Committee at present are:

1. Thamnoon Ananthothai

Chairman of the Nomination, Remuneration and Corporate Governance Committee

2. Nart Liuchareon

Member of the Nomination, Remuneration and Corporate Governance Committee

Role and Responsibilities

Nomination

1. Consider the criteria with respect to the executive succession plan of the Company.

2. Set the Company's policy and criteria on the nomination and selection of candidates for the membership on the Board of Directors and sub-committees, and propose a list of candidates to the Board of Directors for approval.

3. Perform other duties related to the nomination as assigned by the Board of Directors.

Remuneration

1. Consider remuneration both monetary and nonmonetary for the Board of Directors and sub-committees members.

2. Propose policy to designate appropriate remuneration of the Company's directors to the Board of Directors and the shareholders' meetings for consideration and approval respectively.

3. Propose remuneration for members of the sub-committees to the Board of Directors for approval.

4. Propose remuneration for the Company's President and Managing Directors to the Board of Directors for their approval.

5. Review proposals from the Company's management about remuneration policy for staff, as well as nonmonetary rewards, and recommend the matters to the Board of Directors for approval.

6. Review proposals from the Company's management about financial compensation and other benefits for the Company's executives, and recommend the matters to the Board of Directors for approval.

7. Carry out any other tasks related to the consideration of remuneration assigned by the Board of Directors.

Corporate Governance

1. Define the scope and policy of the corporate governance policy, code of business ethics, anti-corruption policy and propose to the Board of Directors for their approval.

2. Make recommendations on the practice related to the Company's corporate governance and anti-corruption, give advice in relation therein to the Board of Directors.

3. Annually review the corporate governance policy including recommendation of any revision thereof so as to ensure it is appropriate for the Company's business operations.

4. Perform other tasks related to corporate governance as designated by the Board of Directors.

Others

1. Prepare a report on the Committee's performance to be submitted to the Board of Directors at least twice a year.

2. Review the performance appraisal of the Nomination, Remuneration and Corporate Governance Committee and report the performance to the Board on an annual basis as a whole and as self-assessment.

Composition and Qualifications

1. The Nomination, Remuneration and Corporate Governance Committee is appointed by the Board of Directors and consists of at least two directors and the majority of the committee shall be independent directors.

2. The Chairman of the Nomination, Remuneration and Corporate Governance Committee should be an independent director.

3. Nomination, Remuneration and Corporate Governance Committee members shall possess appropriate knowledge, abilities and experience with proper understanding of their qualifications, duties and responsibilities.

4. The Nomination, Remuneration and Corporate Governance Committee shall appoint a secretary as it deems appropriate.

Term of Duty

The members of the Nomination, Remuneration and Corporate Governance Committee shall each serve for three years unless the Board of Directors decides otherwise. When there is a vacancy for some other reason besides the end of a member's term, the Board of Directors shall appoint another Nomination, Remuneration and Corporate Governance Committee member who is qualified for the position to make sure that there are two members. The person replacing the member will serve only as long as the remaining term of three full years of the member they are replacing. Please see the report on the work of the Nomination, Remuneration and Corporate Governance Committee.

4) Risk Management Committee

The Board of Directors has set up the Risk Management Committee since November 1, 2010 for a period of three years for each term. The Committee is comprised of four Independent Directors, two Executive Directors and two Executive Management of the main business while most of the Directors are Independent Directors whose qualifications meet the standards required by the Office of Securities and Exchange Commission. They are also knowledgeable, competent and experienced and thoroughly understand their duties and responsibilities. The current Risk Management Committee consists of:

1. Parnsiree Amatayakul

Chairman of the Risk Management Committee

2. Kirati Assakul

Member of the Risk Management Committee

3. Thamnoon Ananthothai

Member of the Risk Management Committee

4. Pakapan Leevutinun

Member of the Risk Management Committee

5. Thiraphong Chansiri

Member of the Risk Management Committee

6. Shue Chung Chan

Member of the Risk Management Committee

7. Ludovic Garnier

Member of the Risk Management Committee

8. Adam Brennan

Member of the Risk Management Committee

Role and Responsibilities

1. Establish an appropriate risk management policy and framework.

2. Continuously monitor and develop the risk management framework and risk management process of the Company and its subsidiaries, aligned with international guidelines.

3. Oversee the continuous activities of assessment, analysis and review of the Company and its subsidiaries' significant risks, under normal and crisis conditions.

4. Consider and provide comment on the Company's risk appetite and risk assessment criteria.

5. Acknowledge and provide comment on the adequacy and appropriateness of risk assessment results and mitigations.

6. Oversee the implementation of risk management, aligned with the risk management framework.

7. Regularly report the Company's significant risks, mitigations and improvement to the Board of Directors.

8. Encourage a risk management culture and cooperation in the Company and its subsidiaries.

9. Oversee and support the risk management function to be aligned with the Company's policies and objectives.

10. Communicate and share the information of significant risks and mitigations with the Audit Committee at least yearly.

11. Provide comments and recommendations on the use of external advisors regarding the risk management framework, scope and implementation.

12. In case of workload over resources of the Risk Management Department, provide comments and recommendations on the use of external service providers in assisting the risk management function.

Composition and Qualifications

The Risk Management Committee is appointed by the Board of Directors. Members of the RMC shall be the Company's directors and management and includes a President/CEO. The Chairperson shall be a director of the Company who is an independent director. The Risk Management Committee consists of one chairman and three members, who are Independent Directors and have the qualifications required by the Office of the Securities Exchange Commission with appropriate knowledge, experience and abilities as well as understanding of their roles and responsibilities. The Risk Management Committee shall appoint a secretary as they see fit.

Term of Duty

The members of the Risk Management Committee shall each serve for three years unless the Board of Directors decides otherwise. When there is a vacancy for some other reason besides the end of a member's term, the Board of Directors shall appoint another Risk Management Committee member who is qualified for the position to make sure that there are four members. The person replacing the member will serve only as long as the remaining term of three full years of the member they are replacing.

Please see the report on the work of the Risk Management Committee.

5) Sustainable Development Committee

The Board of Directors appointed a Sustainable Development Committee on August 13, 2014, and its composition was adjusted more recently on August 9, 2021. The Sustainable Development Committee consists of two directors and three executives:

1. Thiraphong Chansiri

Chairman of the Sustainable Development Committee

2. Adam Russell Brennan

Co - Chairman of the Sustainable Development Committee

3. Shue Chung Chan

Member of the Sustainable Development Committee

4. Kulshaan Singh

Member of the Sustainable Development Committee

5. Ludovic Garnier

Member of the Sustainable Development Committee

Role and Responsibilities

1. Provide guidance and set approaches for the Company regarding strategies leading to the development of sustainability, making operational plans and policies to support the Company's sustainability goals.

2. Set major policies and procedures concerned with sustainability that will help the Group of companies achieve its goals and meet related standards such as the UN Sustainable Development Goals (SDGs), Dow Jones Sustainability Indices (DJSI) and Corporate Sustainability Assessment (CSA).

3. Inspect and control the Company's operations to meet its set goals and obligations, including but not limited to tuna sourcing, packaging, climate change and human rights-related policies.

4. Set up sub-committees as appropriate to fulfill the Company's sustainability policies.

Composition and Qualifications

It consists of a Sustainable Development Chairman and members with experience and qualifications. This must be approved by the Board of Directors and the Sustainable Development Committee appoints the secretary as it deems appropriate.

Term of Duty

The members of the Sustainable Development Committee shall each serve for the same as that position in the Company.

7.4 Information of Executives

As of December 31, 2023, the Company's management team, as defined by the Securities and Exchange Commission, consisted of the following persons:

Thama Wongkanasin, Manager, Accounting and Controlling Factory is a qualified person in charge of the Company's accounts in compliance with the regulations of the Secretary of the Department of Business Development in the 2014 announcement on qualifications and conditions for accountants. Thama Wongkanasin is registered with the Federation of Accounting Professions in compliance with the 2004 Accounting Professions Act. She received continuing knowledge development training in accordance with the Department of Business Development's announcement and SEC announcement TorJor. 39/2559 17 (6) (no less than 12 hours a year). See Attachment 1

7.4.2 Policy for Paying Remuneration to Directors and Executives

Director's remuneration

Directors' remuneration is to be approved at the Annual General Meeting of shareholders after being considered and submitted by the Nomination, Remuneration and Corporate Governance Committee. The remuneration for directors is to be comparable to the level of practice in similar organizations in the same type of industry and commensurate to the roles, responsibilities, and work performance of each director. Directors who are appointed as members in sub-committees will also receive remuneration for their performance in that sub-committee.

In addition, according to the compensation policy and the Company's regulations, Article 28, "The Board of Directors has the right to receive compensation for performing their duties, such as salary, meeting allowances, allowances, gratuities, bonuses, etc., in addition to the aforementioned compensation. The Board of Directors has the right to receive or be reimbursed for all expenses incurred as a result of performing their duties as directors of the Company."

Directors' Remuneration Policy for the Year 2023, total monetary remuneration for the Board of Directors in the amount of THB 30.23 million (including the amount paid to directors who resigned in 2023), with the following details;

1. Remunerations for Executive Directors (THB 10.91 million)

2. Remunerations for Independent Directors and Non-Executive Directors (THB 19.33 million)

The remuneration was paid from the director's individual performance results and approved by the general meeting of shareholders on April 10, 2023, which comprised a monthly retainer, meeting allowances and bonus payments.

In addition to the above remuneration, the Board of Directors are eligible for health insurance in the amount not exceeding 700,000 baht per year. (for Directors who are younger than 70 years old and have permanent residency in Thailand only).

Management's Remuneration

The remuneration policy for management shall be proposed to the Board of Directors meeting. The Board of Directors review and approve this on an annual basis, which consists of a salary, contribution to provident fund, and annual bonus, the amount of which is considered based on the Company's financial performance and the annual work performance of each executive. Compensation should be similar to that paid in the same industry. If work results are according to target for the employees and the Company, then management will receive an annual bonus of 25 percent - 30 percent of their salary for that year.

Evaluating Work Performance

Appraisal of work results and management of compensation for high-level executives (and also for general employees at every level) is as follows:

1. Acknowledge and agree on the annual operational goals so that all can work towards the same shared enterprise objectives each year

2. When the enterprise objectives are set and written down in each manager's personal annual work goals, there is follow up to see what progress has been made, because many different activities may be involved in reaching the set objectives.

3. The level of success in reaching the goals is evaluated on a range of 1-5. The evaluation scores for each area evaluated are combined and considered for setting the level of different kinds of remuneration, such as the annual bonus and annual raise, also taking into consideration other components like the level of participation in achieving business goals and Thai Union's 6 values.

Progress towards the shared enterprise objectives of the Company each year is driven by the participation of people in many departments and business units, each of which has also set their individual annual targets that make up part of the success. The manager of each department or business unit will contribute ideas or innovations that must be compatible with the overall goals and be able to contribute to the Company's success. Ideas that are jointly considered and deemed both valuable and also necessary or urgent will be selected as annual personal goals. This includes value-based objectives that might be appreciated and approved by the supervisor to become part of the work performance management process, or PMP, that happens every January.

Evaluation of goal achievements and work results for both high-level executives and general employees includes a self-evaluation in which individuals are asked to score themselves for their success and achievement. After that, the Group Director HR or HR business partner will combine the data and compare it to get an accurate and verifiable guideline to be forwarded to the CEO or supervisor for scoring and evaluating work results.

Management Compensation Structure

The Board of Directors annually reviews and approves the CEO and Executives' Compensation Policy with respect to the following principles:

Base Salary

The level of base compensation reflects each associate key responsibilities, job characteristics, experience and skill sets. The Company pays the salary by transferring it into an account monthly. Base compensation is reviewed annually, and any increase reflects merit based on performance, as well as market movements.

CEO & Management Compensation in 2023 compared to the previous year

Remark :

^* The total remuneration for management listed in the above table is actually paid by the company in 2023.

Monetary Compensation

Long-term Compensation

Long-term compensation is a type of remuneration that promotes sustainable growth in the business and creates value for shareholders. It encourages management to stay with the Company and to consider the long-term prosperity of the organization and the best interests of shareholders as a priority when making any decision. The compensation rate will be considered based on the Company's performance together with returns to shareholders, assessed in terms of Absolute Total Shareholder Return. The reward is based on a three-year performance period and time-vested over three years.

7.5 Information Related to Employees

The Company's employees are divided according to the main line of work. These are as follows:

Group of company's employees are divided according to the main line of work. There are as follows:

Human Rights and Equitable Treatment of Employees

The Company has a policy and determination to promote human rights practices throughout the supply chain and its use of labor. For the past three years, the Company has not had any conflicts with its employees and has always promoted worker rights and full social welfare for its workers. The Company has strictly followed all laws and regulations related to the hiring and use of labor. To remain loyal to its organizational ethics and mission statement, the Company follows a policy of fair and equitable compensation and distribution of benefits for workers with the aim of satisfying and retaining good quality employees and attracting more capable people. The Company strives to reward good work performance and to remain aware of the importance of fairness, the Company's ability to compete in the labor market, cultural values, and laws and regulations.

Remuneration Structure

The preparation process for succession planning of the position will be in parallel with the Talent Review Process and Individual Development Plan. The Human Resources Department in cooperation with the management of each department, will jointly evaluate an employee's potential. They will develop a clear development plan, especially for the successor. Moreover, for any employees who have high potential, the Company will provide analysis of capabilities in order to advance them in the step-wise development plan, including discussing possible career goals and employees' expectations, along with regular monitoring and evaluation of their development.

Development plans will be adjusted as necessary according to organizational needs and employees' expectations so that the Company can be sure both employees and the enterprise will benefit as much as possible and that succession plans will meet their objectives, resulting in sustainable prosperity and thriving on all sides.

The payouts policy for both short and long term is consistent with the results of the Company's operations by targets and measures each year in accordance with the Company's long-term strategic plan, called Enterprise Objective. The measurement has four elements as follows:

1. Drive Superior Financial Performance - driving excellence in financial management and capital efficiency usage.

2. Accelerate Growth focused on innovation and premiumization of product portfolio, acceleration of reputational benefits and commercialization of sustainability initiatives, and developing new business in Tuna Oil and beyond

3. Improve Productivity through a culture of continuous improvement, SG&A optimization and cash management

4. Work on Business Fundamentals - supporting and promoting personnel who are role models in upholding Thai Union's 6 core values, developing and retaining valuable human resources, sustaining and increasing employee engagement with the enterprise, and emphasizing a compelling long-term strategy in order to allocate resources towards strategic and high-value opportunities.

Total Employees Compensation (only TU)

THB Million

The provident fund was jointly established by the Company, its subsidiaries and its employees following the stipulations of the Provident Fund Act B.E. 2530. It consists of money that comes from monthly contributions equivalent to 2-5 percent of each employee's wages (when they have been working for the Company more than 10 years, employees may opt to increase their contributions up to 15 percent) and additional money that the Company and its subsidiaries may contribute at the rate of 2-10 percent of each employee's wages, depending on how long the employee has been with the firm. The provident fund is administered by One Asset Management Co., Ltd. as the fund manager and Bangkok Bank is a member registration service provider and a custodian (Bualuang i Funds system). The provident funds of the Company's subsidiaries are managed by MFC Asset Management Public Company Limited and Tisco Asset Management Company Limited.

Performance-based bonus

It is a reward that varies according to the success of the work in the short term compared to the annual plan, compared with the remuneration in the labor market in the relevant business. Performance bonuses tie annual key performance indicators (KPIs) that determine overall Company and individual employee performance.

Other compensation or benefits

The main purpose of providing other benefits and the special benefit is to create security for employees, and help in the case of elderly employees, health problems, disability or death by provident fund, health insurance plan, and various welfare in line with the practice in the labor market and as required by law.

As for worker benefits after they have ceased to be an employee of the Company, or the Benefit Project, the Company and its subsidiaries calculate what is owed according to the Benefit Project using the Projected Unit Credit Method. An independent expert estimates the financial obligation using insurance mathematics principles as stipulated in labor laws. Money for this purpose is set aside in reserve each year in the debit section following IAS19 accounting standards. That way the Company is sure it will be able to pay any retirement benefits in full when each employee reaches retirement.

In addition, the Company has also considered the need to maintain reserves for paying employee wages and benefits in the event that the business temporarily halts for any reason. The Company thus expanded the coverage in its business impact insurance policy to cover payment of wages in the case of temporary stoppage.

The Company arranges many fringe benefits and activities to benefit its employees to give them a good quality of life and make sure they are in good health, which will be beneficial for all.

1) Group life insurance and health insurance

2) Accident insurance