Innovative Tech Pack Ltd Management Discussions

Thai economy for year 2020 is expected to grow about 2.5 - 3.5%. However, there are supporting factors from:

1) Trends of economic recovery and world trade volumes

2) Driving force from government spending

3) The return of domestic private demand expansion

4) Adaptation to an unusually low expansion in 2020

It is expected that the export value of goods in US dollars will grow by 5.8 percent. Private consumption. And total investment grew by 2.0 percent and 5.7 percent, respectively, the average headline inflation was in the range of 1.0 - 2.0 percent and the current account registered a surplus of 2.3 percent of GDP.

GDP at annual prices (Right Axis)

GDP (Left Axis)

GDP (QOQ season adjusted (Left Axis)

L Total assets as at 31 December 202 0 increased from prior year about Baht 10 million due to the followings:

O Assets relevant to the government project decreased about Baht 51 million which are cash and cash equivalent increase about Baht 134 million due to the cash received from to the government project nearly the ended of 2020, The reduction of contract assets of 149 million baht due to the issuance of invoices to collect money from the government according to the phase of the project completed during the year. There was a decrease in advance payment for government projects in the amount of 5 million baht. There was an increase in fiber optic network equipment in the amount of 25 million baht. A decrease in non- current financial assets, Which is the part of the pledge deposits which is used as collateral for loans in the project operation of 56 million baht.

. I Total liabilities as at 31 December2020 decreased approximately Baht 30 million or 3% from prior year due to the followings:

Thailands economy in 2020 has slowed significantly due to the COVID-19 epidemic affecting all businesses in Thailand, including the Companys various business groups. The businesses in IT group, Label Group and Broadband business decrease profit and income according to economic conditions. Regarding the business with profit growth, the silkscreen printing business is still able to maintain sales and control costs, resulting in higher profits than the previous year. In the part of the government project business, a project to provide high-speed internet service in remote areas (Zone C), Group 4, Northeastern Region 2, project value of 2,248 million baht. A 5- year contract in 2020, there is a decrease in revenue and profit from the previous year. This is because most of the income of Phase

2 for a full year, which is expected to have revenue and profit growth in the following year.

The Companys strategic goals

a. Expand business to the business market, including providing internet services for small and medium-sized real estate projects. In the form of a long-term service contract of 3 years or more and is the only service provider. In the nature of providing a full range of services From hardware system design, installation and maintenance such as hotels and serviced apartments. And shopping centers, etc.

b. Expand the market of the broadband business in the consumer market. In the provinces where the business operates government projects in order to increase the current customer base of the business.

c. Expand business to government projects The company aims to bid more in government projects.

2) Adjust the business structure of the organization as follows:

a. Including label and silkscreen printing businesses, the Company has sold shares of Simat Label Company to Hinsitsu (Thailand) to combine business as both companies have a customer base of electrical appliances and electronic equipment. After combining the business, the Company plans to continue listing Hinsitsu on the stock exchange. In which the company has registered Hinsiitsu Company is a public company since February 25, 2021.

b. Sales of business and customer base are not profitable. In 2020, the company has sold products and customer base in the IT business group to RG Tech Simat Co., Ltd.

Summary

The consolidated net profit/(loss) of the Company (portion of the parent company) for the year 2020 and 2019 were Baht 40.78 million and Baht 69.03 million, respectively. The profit decreased from the previous year. Due to the government project business. There was a loss from which it used to have a large profit in the previous year. This was due to the delay in the delivery of the 1st phase and the increase in construction costs from the previous year forecast. Although the silkscreen and label printing business showed better performance from the increased sales. Thus causing the overall picture of the operating result to decrease. With details as follows.

The operating results of 2020 have dropped significantly from that of 2019. With the following main reason;

Broadband business had net loss from operation for the year 2020 and 2019 for Baht 9.99 million and Baht

IT business had loss from operation for the year 2020 and 2019 for Baht 4.21 million and Baht 18.01 million, respectively. The loss improved from prior year. The management has restructured this business by set up the new subsidiary company and the Company has transferred the IT business to this subsidiary and the Company invested about 49%. The business partner who will joint-invest in this subsidiary is an expert in IT business. The IT business after restructuring will improve their operating performance within the next year.

Silkscreen Printing business had profit from operation for the year 2020 and 2019 for Baht 63.59 million and Baht 54.25 , respectively. The company has improved operating results despite being impacted by the COVID situation, but still maintain the growth rate. The sales from electrical appliance manufacturers increased by 7.5 percent due to the cheaper cost and quality better than competitors from China and Japan. The gross profit margin has improved. The company also has sales from new products with high gross margin.

Government Project had profit (loss) from operation for the year 2020 and 2019 for Baht (3.65) million and Baht 91.47, respectively. Government projects showed a significant decline in performance, due to the delay in the delivery and acceptance of work for the 1 st, 2 nd and 3 rd installments due to force majeure caused by Tropical Storm Podul and Kajiki. This caused severe storms and flooding in the Northeast, affecting the 1st phase of work from late August until the end of 2020. Including the impact of measures to prevent the spread of the COVID-19 virus from declaring a state of emergency in early 2020. The Company previously reported the impact to the SET on May 15, 2020. In addition, it caused the Company to recognize revenue for services in the said work delayed. While there are still some fixed costs that must be had. To support the service and construction and installation expenses for the said period, which increased from the original estimate of 29 million baht or an increase of 5% from the original cost estimate. In addition, the allocated interest on services increased from the delay in receiving payments for the 1st phase of the 2nd installment that had been delivered and received. However, this effect is only temporary as the Company has completed all work for Phase 1 and the Company is able to open most of the services. For the 2 nd phase work from December 1,2020 onwards.