bmcl 07

ANNUAL REPORT 2007 �

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Vision, Mission, Quality Policy, Safety Policyand Environmental Policy

Companyûs VisionTo be one of the world leading mass rapid transit operators with high quality of service.

Companyûs MissionWe will provide mass transit services to the public with a safe, convenient, fast, reliable and punctual

metro system to alleviate traffic congestion, maintain the environment and improve quality of life.

Quality PolicyThe Company is committed to improving the quality of service as part of our goal to become one of the

worldûs leading mass rapid transit operators. To succeed in the said vision, the Company pledges to developand implement quality management system in order to:1. Provide rail mass rapid transit service that satisfies customerûs expectations with safe, convenient, fast,

reliable and punctual metro system;2. Continually improve quality of service and business performance; and3. Encourage employees to have the knowledge, competency and commitment to their jobs needed to provide

safety and quality service.The satisfaction of customers is essential for our business. Our entire staff is committed to improving quality

so that we can better serve our customers and enhance our overall performance.

Safety PolicySafety is the heart of our mass transit railway service. To ensure the safety of our passengers, our

contractors, and our own personnel, we are committed to making continuous improvements in our safetymanagement system in order to:1. Keep all possible risks associated with the operation of the railway system as low as reasonably

practicable and comply with laws;2. Ensure that all preventive and corrective measures designed to minimize such risks are implemented

efficiently and effectively; and3. Raise safety knowledge and safety awareness among all those involved.

Safety is everyoneûs responsibility. It is imperative that all our employees do everything they can to maintainthe highest standards of safety for the sake of our passengers, our contractors and our own personnel.

Environmental PolicyThe Bangkok Metro Public Company Limited (BMCL) has provided the mass transit railway service by

holding in an environmentally responsible manner. Therefore BMCL have developed Environmental ManagementSystem (EMS) with continual improvement in order to avoid and keep impacts to the environment at acceptablelevel.

To meet these commitments, BMCL shall strive to:1. Prevent and control the environmental pollutions generated from our business activities to minimize the

environmental impacts as low as reasonably practicable and comply with all applicable law and regulation;2. Ensure that all preventive and control measures designed are implemented, reviewed and continually

improved as well as using resources efficiently throughout BMCL operations;3. Raise environmental knowledge and awareness among all our employees, contractors and all concerned

person to understand their responsibilities towards environmental protection.The implementation and effectiveness of this environmental policy is the responsibility of all BMCL

employees and contractors to have a good quality environmental for customers, employees, contractors andcommunities.

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Consolidated Financial StatementsBangkok Metro Public Company Limited and Its Subsidiaries

(Unit : Baht Million)

As at 31 December or For the years ended 31 December 2007 2006 2005

Total Assets 19,705 21,242 19,732

Total Liabilities 12,737 12,803 14,314

Paid-up Capital 11,950 11,950 7,350

Total Shareholdersû Equity 6,968 8,439 5,417

Shareholdersû Equity (excluding minority interest) 6,937 8,413 5,411

Fare Revenue 1,270 1,229 990

Total Revenues 1,446 1,399 1,046

EBITDA (310) (417) (715)

Net Profit (Loss) (1,475) (1,669) (1,716)

Net Profit (Loss) per share (Baht) (0.12) (0.19) (0.23)

Book Value per Share (1) (Baht) 0.58 0.70 0.74

Weighted average number of ordinary shares (million shares) 11,950 8,860 7,347

Number of ordinary shares at the end of period (million shares) 11,950 11,950 7,350

Net Profit Margin (%) (102) (119) (164)

Debt to Equity Ratio (times) 1.83 1.52 2.64

Debt to Equity Ratio (2) (times) 1.37 1.19 1.84

Number of Employees at the end of period (3) (persons) 1,006 941 928

Notes : (1) Calculated by excluding the minority interest;(2) Debt to Equity Ratio calculated pursuant to the conditions in the Onshore Facilities Agreement, based on the

figures from the Companyûs unconsolidated financial statements by using total liabilities and contingent

liabilities net of the sponsor support: subordinated loan divided by the total of paid-up capital, share

premium, retained earnings (loss), reserves and sponsor support subordinated loan, but excluding the any

amounts attributable to revaluation of assets;(3) For the Company only, excluding the Subsidiaries

Financial Highlights2


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2006 : The 3 highest number of trips 2007 : The 3 highest number of trips

1. June 9, 2006 : 292,241 trips 1. June 29, 2007 : 261,347 trips- The Sixtieth Anniversary Celebrations of His Majestyûs Accession to the Throne - The 11th Saha Group Export & Trade Exhibition 2007

2. June 30, 2006 : 255,970 trips 2. June 15, 2007 : 242,885 trips- Event : 10 th Saha Group Export & Trade Exhibition 2006 - Commart X-Gen 2007

3. March 31, 2006 : 238,097 trips 3. November 2, 2007 : 238,948 trips- Event : Bangkok International Book Fair 2006 - Commart Comtech Thailand 2007

2006 : The 3 lowest number of trips 2007 : The 3 lowest number of trips

1. April 14, 2006 : 39,263 trips 1. January 1, 2007 : 38,674 trips- Long Holidays : Songkran Festival - New Year Day

2. April 13, 2006 : 42,903 trips 2. April 13, 2007 : 41,934 trips- Long Holidays : Songkran Festival - Long Holidays : Songkran Festival

3. April 15, 2006 : 51,227 trips 3. April 14, 2007 : 45,358 trips- Long Holidays : Songkran Festival - Long Holidays : Songkran Festival

Ridership (The Highest and Lowest Number of Trips in the Year 2006 and 2007)

Average Trips per working day (2004-2007)

Average Trips per day (2004-2007)

Trips per working day

Trips per day

200,000

150,000

100,000

50,000

0

200,000

150,000

100,000

50,000

0

2004 2005 2006 2007

2004 2005 2006 2007

151,255179,145 179,563 188,643

147,458 163,403 158,396 164,507

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Average Fare Revenue per working day (2004-2007)

Average Fare Revenue per day (2004-2007)

Fare Revenue (Baht Million)

Fare Revenue (Baht Million)

4.00

3.00

2.00

1.00

0

4.00

3.00

2.00

1.00

0

2004 2005 2006 2007

2004 2005 2006 2007

2.533.02

3.653.92

2.432.83

3.37 3.48

Proportion : Stored Value Cards and Tokens (2004-2007)

100

80

60

40

20

0

100

80

60

40

20

0

Percentage of total trips Percentage of total trips

2004 2005 2006 2007 2004 2005 2006 2007

14%28% 39% 44%30%

49%62% 65%

70%51%

38% 35%

86%72% 61% 56%

Working Days Holidays

Stored Value Cards Tokens


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Message from the Chairmanof the Board of Directors

Dear shareholders,

2007 was a symbolic year not only for Bangkok Metro Public Company Limited (çBMCLé) but also

for the people of the Kingdom of Thailand. We were buoyed by the celebrations of the 80th birthday of

His Majesty the King, the parliamentary elections that took place in December 2007 as well as the one-

year anniversary of BMCLûs listing on the Stock Exchange of Thailand.

As for the results of our operations, although we have not yet derived an operating profit, there is a

good sign from the fact that our average ridership on working days increased approximately 5% from

179,000 trips in 2006 to 189,000 trips in 2007. In addition, the fare costs which are our direct expenses

decreased by 5% percent from Baht 1,454.84 million in 2006 to Baht 1,385.97 million in 2007. We will

continue to improve the efficiency of our services to generate more income and optimize our cost control.

We continued implementing global best practices and international railway standards. In March

2007, BMCL was privileged to be host to the 8th Annual UITP (International Association of Public Transport)

Assembly. With ten countries represented, it proved to be an excellent forum to share experiences,

exchange knowledge and network with each metro operator. We also were excited to have been granted

membership into NOVA, a consortium of fifteen of the worldûs medium sized metro systems, allowing us

to leverage the groupûs extensive understanding on metro benchmarking and sustainability.

In respect to our provision of services, BMCL continued to improve. We started the certification

process for the ISO 14001:2004 (Environmental Management System) standard and are happy to report

that TUV NORD (Thailand) Ltd (TUV NORD) audited and evaluated BMCL in December 2007 and it is

excepted that we will be certified in early 2008. In addition, we have signed a Memorandum of

Understanding to integrate our ticketing system with other public transport systems, such as, the BTS,

public trains, buses and ferries, allowing passengers to pay fares with a single ticket. Moreover, such

common ticketing system may be developed further for payment of other goods and services.

Mr. Plew TrivisvavetChairman of the Board of Directors

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In 2007, we are proud of our corporate social responsibility in the çReturn the Metro Card to Protect

Environment and Dedicate to the Communityé program. For every expired Metro Smart Card that is

returned, BMCL donates Baht 10 to a community that is situated along the Blue Line.

With respect to the corporate governance, BMCL received a rating of çExcellenté from the Office of

the Securities and Exchange Commission, in association with the Thai Investors Association and the

Listed Companies Association, in their assessment of our 2007 Annual General Meeting.

As we look forward to 2008, we continue to develop and improve the potentials of our organization

and staff so that the shareholders can rest assured that we are well prepared in no time at all to

accommodate the ridership numbers which continue to grow due to the investment in various metro

extension projects by the government and the changes to use the metro which is safe and convenient as

a result of high fuel prices.

On behalf of the Board of Directors of the Company, I would like to express our gratitude to the

shareholders, the financial institutions which provide support to this project, the relevant authorities for

their cooperation and all metro passengers in helping BMCL to grow to where we are today.

(Mr. Plew Trivisvavet)

Chairman of the Board of Directors

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The Board of Directors

Mr. Plew TrivisvavetChairman of the Board of Directors, Chairman of the Executive Committee,and Nomination and Remuneration Committee

As at 31 December 2007

General Chetta ThanajaroIndependent Director, Chairmanof the Audit Committee, and

Chairman of the Nomination andRemuneration Committee

Mr. Vitoon TejatussanasoontornIndependent Director,

Audit Committeeand Nomination

and Remuneration Committee

Lieutenant GeneralSurat Sumrith

Independent Director andAudit Committee

Mr. Supong ChayutsahakijDirector, Executive Committee

and Chairman of the RiskManagement Committee

Mr. Somchai SirilertpanichDirector

Dr. Anukool TuntimasDirector and Executive Committee

Dr. Sombat KitjalaksanaDirector, Executive Committee,Risk Management Committee

and Managing Director

Mrs. Nongnutch ThienpaitoonDirector

Mr. Kraisri KarnasutaDirector

Mr. Ronnachit YaemsaardDirector

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Management Team5

Dr. Sombat KitjalaksanaManaging Director

Mr. Witoon HatairatanaOperations Director and

Acting Marketing & CommercialDevelopment Director

Miss Pornpimol ChirtchoochaiAccounting & Finance Director

Mrs. Tanawon SrivardhanaHuman Resources & Administration

Director


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General Information

6.1 Company Profile

Bangkok Metro Public Company Limited

Company Registration No. : 0107547000451 (previously 0107574700459)

Head Office : 189 Rama IX Road, Huai Khwang, Bangkok 10310, Thailand

(As registered Tel. : 66 (0) 2354 2000

at Ministry of Commerce) FAX : 66 (0) 2354 2040

Customer Relations Center

Tel. : 66 (0) 2624 5200

E-mail : [email protected]

Investor Relations

Tel. : 66 (0) 2354 2000 ext. 3513 - 3516

FAX : 66 (0) 2354 2000 ext. 3518

E-mail : [email protected]

Homepage : http://www.bangkokmetro.co.th

Type of Business : Mass Rapid Transit System Operator

Concessionaire of the M.R.T. Chaloem Ratchamongkhon Line Project

Registered Capital : Baht 11,950 million, divided into 11,950 million ordinary shares,

at the par value of Baht 1.00 per share.

Issued and Paid-up Capital : Baht 11,950 million, divided into 11,950 million ordinary shares,

at the par value of Baht 1.00 per share.

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6.2 The Company invested in its Subsidiaries through a shareholding ratio of at least 10 % of the

number of shares sold in each Subsidiary as at 31 December 2007 as follows:

Shares heldby the Company

Company Name Business Category Type of Total Number Par Value Number of (%)

Shares of Shares Sold (Baht) Shares

1. Metro Mall Development Leasing of retail space Ordinary 10,000,000 10 6,400,000 64.00

Limited for shops in the

Head Office: stations and in the

587 Viriyathavorn Building, park and ride facility

12th Floor, Sutthisarnvinitchai at Lat Phrao Station

Road, Dindaeng Subdistrict,

Dindaeng District, Bangkok

10400

Tel: 66 (0) 2275 4559

FAX: 66 (0) 2275 4314

http//www.metromall.co.th

2. Triads Networks Procurement of Ordinary 250,000 100 139,996 56.00

Company Limited advertisement boards

Head Office: or media in the trains

587 Viriyathavorn Building, and stations

9th Floor, Sutthisarnvinitchai

Road, Dindaeng Subdistrict,


10400

Tel: 66 (0) 2690 8391-94

FAX: 66 (0) 2690 8395

http//www.triadsnetworks.co.th

3. BMCL Network Limited /1 Rendering services Ordinary 15,000,000 10 10,499,994 70.00

Head Office: and maintenance of

587 Viriyathavorn Building, telecommunications

12th Floor, Sutthisarnvinitchai system equipment in

Road, Dindaeng Subdistrict, the stations


10400

Tel: 66 (0) 2690 8200

FAX: 66 (0) 2690 8212

http//www.bmclnetwork.co.th

/1 BMCL Network Limited was previously named Radianz Communications Network Limited.


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6.3 Reference

Securities Registrar : Thailand Securities Depository Company Limited

2/7 Moo 4 Capital Market Academy Building

The Stock Exchange of Thailand, 2nd Floor

North Park Project, Vibhavadi Rangsit Road, Km. 27,

Tungsonghong Subdistrict, Laksi District, Bangkok 10210

Tel : 66 (0) 2596 9000, 66 (0) 2596 9302-11

or 62 The Stock Exchange of Thailand Building

4th and 7th Ratchadapisek Road, Klongtoey, Bangkok 10110, Thailand

Tel : 66 (0) 2229 2800 FAX : 66 (0) 2359 1259

Auditors : Miss Siraporn Ouaanunkun C.P.A. Registration No. 3844

Mr. Narong Puntawong C.P.A. Registration No. 3315

Mr. Supachai Panyawattano C.P.A. Registration No. 3930

Ernst & Young Office Limited

33rd Floor, Lake Rajada Office Complex

193/136-137 Rajadapisek Road, Klongtoey, Bangkok 10110, ThailandTel : 66 (0) 2264 0777 FAX : 66 (0) 2264 0789-90

Legal Advisor : The Legists Ltd.

9th Floor, 990 Abdulrahim Place, Rama IV Road,

Silom, Bangrak, Bangkok 10500, Thailand

Tel : 66 (0) 2636 1111 FAX : 66 (0) 2636 0000

Financial Institutions : Krung Thai Bank Public Company Limited

TMB Bank Public Company Limited

Bank of Ayudhya Public Company Limited

Siam City Bank Public Company Limited

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Nature of Business

7.1 Background and Major DevelopmentsBangkok Metro Public Company Limited (the çCompanyé) was established on 18 February

1998, with an initial registered capital of Baht 1,000,000, having CH. Karnchang Group as its majorshareholder, to participate in the bidding for the concession of the first underground mass rapidtransit system project in Thailand, to carry out the design, manufacture, supply, installation, testingand commissioning of the M&E Equipment for the operation and maintenance of the metro. In thisrespect, the Company was granted the exclusive concession for such project approved by the Councilof Ministers on 28 March 2000 and 25 July 2000, respectively.

On 1 August 2000, the Company entered into the Agreement for the MRTA Initial SystemProject - Chaloem Ratchamongkhon Line (the çConcession Agreementé) with the Mass Rapid TransitAuthority of Thailand (çMRTAé). The Company has the exclusive right to collect fares and undertakeactivities and commercial development, including advertising and leasing space in the project fora period of 25 years from the date of issuance by the MRTA of the Notice of No Objection tocommencement of revenue service, namely, on 2 July 2004, which would end on 1 July 2029. Theofficial commencement of operations is on 3 July 2004. Under the Concession Agreement, theCompany is obliged to make payment of remuneration from fares and commercial development tothe MRTA at the rates as mentioned in the Concession Agreement.

On 16 January 2003, the Company was granted investment promotion privileges for the M.R.T.Chaloem Ratchamongkhon Line (Blue Line) under Promotional Certificate No. 1029(1)/2546. Theprivileges include entitlement to 50% deduction of import duty on imported machinery according tospecified conditions and exemption from corporate income tax on net profit from promoted operationsfor a period of 8 years commencing from the date of first earning operating income (3 July 2004).

The Company was converted to a public limited company on 11 May 2004. Their Majestiesthe King and Queen and HRH Princess Maha Chakri Sirindhorn presided over the official openingceremony of the M.R.T. Chaloem Ratchamongkhon Line (Hua Lamphong - Bang Sue) on 3 July 2004.The Company was listed on the Stock Exchange of Thailand on 21 September 2006.

The Company obtained the ISO 9001:2000 Quality Management Systems on 10 November 2005,and the OHSAS 18001:1999 and TIS 18001:1999 Occupational Health and Safety ManagementSystems on 10 January 2007 and 7 February 2007, respectively. In addition, the Company alsoobtained the certification of the Safety Management System from Lloydûs Register Rail on 1 January2007. At present, the Company is in the application process for the ISO 14001:2004 EnvironmentalManagement System as previously audited and evaluated by TUV NORD since 17-18 December 2007.

In addition, the Company has participated as a member of several international federations ofpublic transport operators, with the objectives to receive and exchange updated information and newsin respect of technology, management, and best practices. The Company is a member of the followinginternational federations of public transport operators:(1) The International Association of Public Transport (UITP) - membership since February 2003;(2) American Public Transportation Association (APTA) - membership since August 2005;(3) The Asian Railway Operators Association (AROA) - membership since October 2005;(4) NOVA Group of Metros - membership since September 2007.

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7.2 Business OverviewThe Companyûs revenue can be divided into two categories comprising revenue from fares and

revenue from commercial development.ë Revenue from Fares

Revenue from fares is the Companyûs major revenue. The fare collection by the Companyis subject to the number of stations traveled by passengers. The fare rates of the metro as of thecommencement date would be in accordance with the basic reference fare rates in force at thetime of the revenue service commencement date. Under the Concession Agreement, the referencefare rates would be adjusted every 24 months based on the actual changes of the BangkokNon-Food Consumer Price Index compared to the basic reference fare rates as at 1 January2002. For its first year of service, the Company agreed to discount the fare rates by 15%.

The Company adjusted the fare rates under the terms of the Concession Agreementaccordingly. The current fare rates in force have been adjusted since the year 2006 and will bedue for adjustment again in the year 2008. However, the Company continues to grant discountto passengers who use Adult Pass and 30 Days Pass, as well as Student Pass, to encourageregular and continuous use of the metro.

ë Revenue from Commercial DevelopmentBesides revenue from fares, the Company also generates revenue from commercial

development, which can be divided into two groups as follows:1. The Company directly executed agreements with other companies by granting the

following rights:- ATM service in all 18 stations to 8 commercial banks;- Public telephone service to True Corporation Public Company Limited;- Procurement or production of advertising media on Platform Screen Doors in all 18

stations to How Come Media Co., Ltd.;In the year 2008, the Company will start generating revenue from advertising on

the hand grip media in 19 trains, by granting the rights to Ambient Media Co., Ltd.2. The Company granted the following rights to the Subsidiaries:

- Procurement of image advertisement signboards to Triads Networks Co., Ltd.;- Management of retail spaces to Metro Mall Development Limited;- Service and maintenance of telecommunications system equipment to BMCL

Network Limited.In return, the Company receives a revenue sharing before deduction of expenses,

as well as dividends from the Subsidiaries.

Business Operations of the Subsidiaries1. Triads Networks Co., Ltd.

Triads Networks Co., Ltd. was established on 22 March 2002, with an initial registered capitalof Baht 15 million, to conduct the business of procuring and/or making advertising boards or otherforms in all 18 stations and for all 19 trains. Triads Networks Co., Ltd. started to install advertisementsinside trains in June 2005 and in stations in July 2005.

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2. Metro Mall Development LimitedMetro Mall Development Limited was established on 9 February 2004, with an initial registered

capital of Baht 50 million, to conduct the business of leasing retail spaces in 11 stations and spacesin the basement level of the Lat Phrao park and ride facility, covering the total commercial leasespaces of approximately 14,236 square metres (spaces for retail shops and sale promotions), startingwith Sukhumvit Station on 9 September 2005, Phahon Yothin Station on 16 December 2005, andChatuchak Park Station on 23 February 2008.

3. BMCL Network LimitedBMCL Network Limited (formerly known as Radianz Communications Network Limited) was

established on 30 January 2004, with an initial registered capital of Baht 50 million, to conduct thebusiness of servicing and maintaining telecommunications system equipment in the stations. Thecompany started generating revenue in October 2007.

Revenue Structure of the Companyûs GroupThe Company had major revenue from fares since 3 July 2004. In June 2005, the Company started to

derive revenue from advertising services by Triads Networks Co., Ltd. Metro Mall Development Limitedstarted generating revenue from retail space leases and BMCL Network Limited started generating revenuefrom telecommunications services in the third quarter of 2005 and in the fourth quarter of 2007, respectively.

(Unit: Million Baht)

ShareholdingOperated by percentage of For the year 2007 For the year 2006

the Company Revenue % Revenue %Revenue from train operations The Company - 1,270.41 87.87 1,229.50 87.89Revenue from advertising services Triads Networks 56.00 103.86 7.18 101.62 7.26Revenue from telecommunications services BMCL Network 70.00 11.96 0.83 - -Revenue from retail space leases Metro Mall Development 64.00 17.32 1.20 23.02 1.65Revenue from ATM and public telephone services The Company - 20.29 1.40 20.41 1.46Other income /1 The Company and its - 21.99 1.52 24.39 1.74

SubsidiariesTotal 1,445.83 100.00 1,398.94 100.00

Note: /1 Other income in 2006 mostly comprised gain on sale of investment in the Subsidiaries in the amount of Baht 17.15 million and interest income.Other income in 2007 mostly comprised interest income in the amount of Baht 18.86 million.

Metro MallDevelopment Limited

(Registered capital of Baht 100 million

Paid-up capital of Baht 100 million)

Bangkok Metro Public Company Limited(Registered capital of Baht 11,950 million

Paid-up capital of Baht 11,950 million)

BMCL Network Limited(Registered capital of Baht 150 million


Triads NetworksCompany Limited

(Registered capital of Baht 25 million


64.00% 70.00% 56.00%

Shareholding StructureAs at 31 December 2007


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7.3 Procurement of Products and Services(1) Management of the Metro Project

The Company has engaged Joint Venture CKET as the project manager for the M.R.T.project to manage technical operations, such as, procurement of the M&E Equipment asordered from manufacturers and acting as agent for liaison with contractors and relevantauthorities regarding the installation of the M&E Equipment. Joint Venture CKET is a jointventure between CH. Karnchang Public Company Limited and Expert Transport CompanyLimited (an affiliate of CH. Karnchang Public Company Limited Group, the major shareholderof the Company).

(2) Procurement and Maintenance of the M&E EquipmentGiven the fact that the Company has the duties under the Agreement for the MRTA Initial

System Project - Chaloem Ratchamongkhon Line, to design, manufacture, supply, install, testand commission the M&E Equipment to ensure the readiness for the commencement of serviceto the public, the Company thus engaged third parties to manufacture and procure the M&EEquipment by way of turnkey contracts. In essence, the manufacturer is responsible for thedesign, manufacture and installation of the system ready for use, including training for everylevel of the Companyûs staff. The Company engaged Lincas and Siemens, one of the worldûslargest modern electric train manufacturers and developers of railway systems from Germany,to manufacture the M&E Equipment. Lincas and Siemens are responsible for the design,manufacture, supply, installation, testing and commissioning of the M&E Equipment, comprisingthe rolling stocks, power supply system, signaling and communication system, automatic farecollection, platform screen doors, maintenance equipment, signage and signals, as well asresponsible for proposing train operation plans, the Companyûs management structure,recruitment plan, and all requirements relating to train operations by way of training for everylevel of the Companyûs staff to be able to administer the train operations on their own. Toensure the confidence in the provision of service, the Company has also engaged Lincas andSiemens for maintaining the M&E Equipment for a period of 10 years.

(3) M&E Equipment and Components of the MetroThese can be divided into two parts: civil infrastructure operated by the MRTA, and the

M&E Equipment operated by the Company, as follows:Civil Infrastructure Operated by the MRTA(3.1) Stations

All stations of the metro are supported by reinforced concrete structures whichare 15-25 metres beneath the road surface. Each station has different levels and areasdepending on the depth of the station. There are three kinds of platforms, namely, centralplatform, side platform, and stack platform. Each station has a control room for thecontrol, observation and monitoring of any malfunctions within the station.

(3.2) TunnelsUnderground tunnels are supported by reinforced concrete structures designed

to be flexible and water-resistant. The inner diametre is 5.7 metres, thickness is 30centimetres and outer diametre is 6.3 metres. It is a two single tunnel system equippedwith running rails, power rails, maintenance walkways, tunnel ventilation system,underplatform exhaust and heat detector systems for the maximum safety for the trainoperations inside the tunnels.

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(3.3) Ventilation SystemStations and tunnels have a ventilation system installed with ventilation fans on

either side of the station and within the tunnel for the safety of passengers. Fans controlthe temperature and condition inside the stations and tunnels.

(3.4) Rails/TracksThere are two types of tracks, running rails and power rails or third rails, as follows:

- Running rails are double rails with 1.435 metres width (standard gauge) and railwaytracks are laid and directly fixed to the track base, which is made of a reinforcedconcrete structure between Hua Lamphong and Bang Sue; railway sleepers areused in the depot as is the case of the State Railway of Thailand.

- Power rails or third rails are laid parallel to either side of the running rails in orderto connect electricity from the source to the train, while the double running rails actas an electric conductor back to the source.

M&E Equipment Operated by the Company(3.5) Rolling Stocks

The Company has ordered 19 trains from Siemens, the worldûs leading electric trainmanufacturer and assembler. The rolling stocks are made of robust and durable stainlesssteel with modern style and would have a service life of approximately 30 years. Eachtrain consists of three carriages with a total of approximately 70-metres long, and cancarry up to 900 passengers with the transferring capacity of 40,000 passengers per hourper direction.

(3.6) Signaling and Communication SystemA good signaling and communication system is necessary for safe, fast, reliable

and punctual train operations and is as an important factor of train management. Thecontrol centre is located in the depot. Train operations are automatic computer systemsupervised by engineers. In the stations, a radio communication system with direct phonelines is used for officers to communicate so that passengers can immediately notify anemergency to the officers. In case of any emergency, the automatic broadcasting systemwill start to provide relevant information and direct the way out of the station.

(3.7) Supervisory Control and Data Acquisition System (SCADA) and Closed Circuit TelevisionMonitoring and supervision of the functions of the main equipment inside the stations

and tunnels, such as, the fire alarm system, cooling system, elevators and escalators,power supply system within the station and power supply system for the locomotivesystem, tunnel lighting system and ventilation system in the tunnels, are carried outby the SCADA installed at the operation control centre. In case of any malfunction, analarm will start immediately to notify the officers in charge to rapidly and promptly checksuch system.

Closed circuit televisions are installed in various important spots inside the stationsto monitor for safety and playback to identify any incident. The closed circuit televisions


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are also installed in the train operator cabin to monitor passengers entering and leavingtrains while docked at the stations to ensure safety before closing the doors.

(3.8) Automatic Fare Collection System (AFC)The AFC consists of tickets, token vending machines, ticketing offices and

automatic gates, with the following characteristics:1) Tickets are divided into two types: single journey tokens for a single trip, and stored

value cards, which are contactless smart cards for multiple journeys, suitable forregular passengers.

2) Token Vending Machines (TVM)TVMs are located on the concourse level and issue only single journey

tokens.3) Ticketing Offices

Ticketing offices are manned by officers and equipped with machines forissuing both tokens and stored value cards of all types.

4) Automatic GatesThe system is referred as a çcontactlessé system. Passengers enter or exit

the system by using the ticket (token or stored value card) across the card readerslocated on the top of the automatic gates within 10 centimetres, without anycontact required to open the gate.

(3.9) Platform Screen Doors (PSD)Glass PSDs spanning from the floor to the ceiling are installed along the length of

the platforms, between the platform and the train. This is for the safety of passengerswhile entering and leaving the train so as to prevent any accident from passengers fallingfrom the platforms or injury from the train docking at the stations, as well as helpingsaving energy in respect of the air-conditioning system and minimising noise pollution.

(3.10) Power SupplyThe power supply is designed in accordance with international standards for safety

and reliability in the supply of power to all electrical equipment, such as, sub-stations andtransformers, which are necessary for supplying power to the train and in the stations andthe tunnels. The system is designed based mainly on safety and continuity of services.

(3.11) Depot Building and Central Control CentreThe depot consists of the depot building, operation control centre building, rolling

stock parking area, training centre and administration building and is located on a totalarea of approximately 300 rai on Rama IX Road, close to the Thailand Cultural CentreStation, owned by the MRTA while the Company has the right to use the same throughoutthe Concession period.

The operation control centre is located in the same area as the depot. This centreis the most important component of the operation control system, namely, to control anddirect every station and every train to ensure safe, rapid and punctual operations. In caseof any force majeure preventing the functioning of this operation control centre, anotherback-up operation control centre located at the depot would control and direct theoperation as normal.

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(4) Types of Tickets, Ticketing Channels and Fare Rates

Types Forms Types of Customers Minimum Valueat First Issue

1. Single Journey Token Adults and with discount for Distance-based

children and elderly for one journey

2. Adult Pass General public Baht 200

3. Child/Elder Pass - Children with a height of 90-120 cm. Baht 200

- Elderly aged 60 years or older

4. Student Pass Students aged not more than Baht 200

23 years old

5. 1 Day Pass Unlimited number of journeys and Baht 120

distance within one day

6. 3 Days Pass Unlimited number of journeys and Baht 230

distance within three days

7. 30 Days Pass Unlimited number of journeys Baht 900

within 30 days from first use.

Ticketing Channels1. Token Vending Machine (TVM) issues single journey tokens for adults for single trip.

2. Ticketing Office (TO) issues single journey tokens for adults, single journey tokens for children/elderly

for single trip and also issues stored value cards for multiple journeys, e.g., Adult Pass, Child/Elder

Pass, Student Pass, 1 Day Pass, 3 Days Pass and 30 Days Pass.


19

As from 1 September 2007, the Company allowed the metro passengers to pay fares via credit cards

at the Ticketing Office of each station in order to add more channels of fare payment and to facilitate

passengers without using cash. The minimum payment via credit card is Baht 300.

Fare Rates based on the number of stations and the type of ticketEffective until 2 July 2008

Fare Rates (Baht)

Number of Single Journey Token Stored Value Cards

Station(s) General Public Children and General Public Students Children and

(Full Price) Elderly (15% Discount) (30% Discount) Elderly

(50% Discount) (50% Discount)

1 15 8 13 10 8

2 17 9 14 12 9

3 20 10 17 14 10

4 22 11 19 15 11

5 24 12 20 17 12

6 26 13 22 18 13

7 28 14 24 20 14

8 31 16 26 22 16

9 33 17 28 23 17

10 35 18 30 24 18

11 37 19 31 26 19

12 39 20 33 27 20

13 39 20 33 27 20

14 39 20 33 27 20

15 39 20 33 27 20

16 39 20 33 27 20

17 39 20 33 27 20

According to the Agreement for the MRTA Initial System Project - Chaloem Ratchamongkhon Line, the

Company is able to adjust the fare rates every two years based on the Bangkok Non-Food Consumer

Price Index, whereby the next fare rates to be adjusted shall start from 3 July 2008. In this regard, the

MRTA and the Company shall announce such rates to the public 30 days in advance.

20


(5) Full Passenger Capacity of the M.R.T. Chaloem Ratchamongkhon Line

Table Indicating Full Passenger Capacity on the Metroand Number of Passengers in the years 2006 - 2007

2006 2007

1 January - 23-31 1 January - 1 September -

22 December/1 December/1 31 August/1 31 December/1

Number of Days of Service (Days) 356 9 243 122

Number of Trains in Service (Trains) 17 18 18 19

Full Passenger Capacity Per Day (Persons) 301,240 318,960 318,960 336,680

Full Passenger Capacity of the Metro (Persons) 107,241,440 2,870,640 77,507,280 41,074,960

110,112,080 118,582,240

Number of Actual Passengers of Service (Persons) 57,814,401 60,045,076

Utilization Rate Per Full Passenger Capacity 52.51% 50.64%

Note : /1 After the train collision accident on 17 January 2005, two trains were damaged, the repair of the first train was completed and

resumed the service on 23 December 2006 while the other train resumed the service on 1 September 2007.

7.4 Industrial Conditions and CompetitionThe transport system directly affecting the Companyûs business includes personal cars,

passenger buses, microbuses and taxis. The fares of such transport system will vary based on fuelcosts, e.g., oil, liquefied petroleum gas (LPG) and natural gas for vehicle (NGV). In the past severalyears, the fare rates for public transport, especially, normal buses and air-conditioned buses, havechanged slightly. However, after the government cancelled its subsidy for benzene and diesel prices inthe years 2004 and 2005, respectively, the fare rates for public transports increased accordingly, andafter the government decreased its energy subsidy, the domestic retail oil prices were floating in linewith the global market oil prices. In the year 2007, the retail oil prices were continuously increasing inline with the global market oil prices accordingly, whereby at the end of the year 2007, the highestrecord was Baht 32.89/litre for benzene 95 and Baht 29.34/litre for diesel, and the oil prices tend toremain at a high level. Although the government arranged for the gasohol campaigns with price lowerthan that of benzene, more than 90 percent of the gasohol was mainly consisted of oil, therefore, thegasohol price was thus fluctuating in line with the oil prices. Such factor resulted in the increase intraveling expenses for personal cars and affected the growth rate of personal cars as evidenced bythe decreased number of newly registered personal cars in comparison to the previous year.

In addition, in December 2007, the government announced to float the price of liquefiedpetroleum gas (LPG) which is another form of fuel for cars as well as most taxis. The floating LPGprice may result in request for increase of taxi fares by taxi service providers and affect the serviceusers due to higher costs. Therefore, traveling by the metro system is likely an appropriate optionfor the public in Bangkok amidst the high fuel costs, especially for those residing or workingaround the route. Moreover, should the airport link be opened for service and more building andresidential development projects around the route be completed, more users will use the metro serviceaccordingly.


21

Development of Common Ticketing SystemThe Company, in association with relevant agencies, both government and private sectors,

namely, the Bank of Thailand, Ministry of Finance, Bangkok Metropolitan Administration, State Railwayof Thailand, Mass Rapid Transit Authority of Thailand, Bangkok Mass Transit Authority and BangkokMass Transit System Public Company Limited, are in the process of developing a common ticketingsystem in order to enable the public to conveniently, rapidly and safely travel through the connectedpublic transport system by way of rail, public bus and water transportation systems, as well as solvingthe traffic problems and saving energy by using a single ticketing system.

Government Policy towards the Expansion of the Mass Transit SystemThe government by the Office of Transport and Traffic Policy and Planning (OTP) completed the

Urban Rail Transportation Master Plan (URMAP) in 2000 and conducted further study in the practicalimplementation in Bangkok and surrounding areas in 2004, referred to as URMAP2. The purpose ofthis study was to develop a plan to alleviate the existing traffic problems, which would help improvingthe countryûs economic and social conditions, as well as minimize the environmental problems, via thegovernment policy to expand urban rail transportation in Bangkok and surrounding areas.

Mass Transit Projectsë In 2005 and early 2006, the Council of Ministers (under Pol.Lt.Col. Thaksin Shinawatraûs

administration) passed resolutions to approve in principle the implementation of 10 routes ofthe Mass Transit Projects as per the details below:

Mass Transit Projects Distance

(Kilometres)

1. Purple Line (Bang Yai - Bang Sue and Bang Sue - Rat Burana) 43.00

2. Blue Line (Hua Lamphong - Bang Khae and Bang Sue - Tha Phra) 27.00

3. Orange Line (Bang Kapi - Bang Bamru) 24.00

4. Dark Red Line (Rangsit - Maha Chai) 65.00

5. Light Red Line (Taling Chan - Suvarnabhumi) 50.00

6. Dark Green Line (Taksin Bridge - Bang Wa and Mo Chit - Saphan Mai) 19.00

7. Light Green Line (National Stadium - Phran Nok and On Nut - Samut Prakan) 24.00

8. Yellow Line (Lat Phrao - Samrong) 32.00

9. Pink Line (Min Buri - Pak Kret - Khae Rai) 33.00

10. Brown Line (Bang Kapi - Min Buri) 9.50

ë In late 2006, after the administrative reform, the new Council of Ministers passed a resolution in

its meeting on 7 November 2006, granting approval in principle for development of the mass

rapid transit system in Bangkok and the outer areas in the order of priority, necessity and

urgency, totaling 4 projects, 5 routes, with a total distance of 118 kilometres, as follows:

22


Projects Distance Amount(Kilometres) (Million Baht)

1. Blue Line (Hua Lamphong - Bang Khae and Bang Sue - Tha Phra) 27.00 52,5812. Purple Line (Bang Yai - Bang Sue Section) 23.00 29,1603. Red Line (Bang Sue - Rangsit Section and Bang Sue - 41.00 53,985

Taling Chan Section)4. Light Green Line (On Nut - Samut Prakan) 14.00 14,9395. Dark Green Line (Mo Chit - Saphan Mai) 13.00 14,737

Total 118.00 165,402

ë On 6 February 2007, in order to facilitate public commute, the Council of Ministers passed a

resolution to approve the framework to establish two transit centres in Bangkok, namely, Phahon

Yothin Transportation Centre (Bang Sue) and Makkasan Transportation Centre (Makkasan) to

serve as transit centres from the outer areas and vicinities by the commuter train system and

train operation on the same railway system from suburban areas in the region to connect the rail

mass rapid transit system which provides such service as the transit system network in Bangkok,

as well as changed the name of the 5 Rail Projects to be the Project of the Public Rail System

in Bangkok and the Outer Areas, with the elements of the operations and status of the projects,

as follows:

1. Commuter Train System (Red Line)

Project Routes Distance Current Status of Project

(Kilometres)

1. Red Line Bang Sue - Taling Chan 15 The Council of Ministers passed a resolution on

(Rang Sit - Bang Sue - 22 May 2007 granting approval for the State

Taling Chan) Railway of Thailand (SRT) to manage the commuter

train system project, by opening an e-auction.

Bid documents were submitted in December 2007.

Bang Sue - Rang Sit 26 The Council of Ministers passed a resolution on

16 October 2007 granting approval for the SRT to

manage the commuter train project, Bang Sue -

Rang Sit Section, for a period of 4 years (years

2008 - 2012) and also granted approval for

construction of an extension from Rangsit - Rangsit

Campus of Thammasat University, with a distance

of 10 kilometres.

Bang Sue - Makkasan - 19 The SRT executed the Contract for Detailed

Hua Mak Design to be performed during August 2007 -

January 2008.


23

2. Rail Mass Rapid Transit System

Project Routes Distance Current Status of Project

(Kilometres)

1. Purple Line Bang Yai - Bang Sue 23 ë The Council of Ministers passed a resolution on2 October 2007 granting approval for the MassRapid Transit Authority of Thailand (MRTA) tooperate the civil construction in the amount ofBaht 31,217 million, and fees for civil work andproject management consultants in the amountof Baht 1,248 million, whereby the Ministry ofFinance shall consider the appropriate source offunds for project; and granting approval for theprivate entity to jointly invest in the form of PublicPrivate Partnership (PPP), whereby the MRTAshall conduct a study on additional details andclearly ascertain proper form of private entityûsparticipation in the investment prior to furthersubmission in accordance with the proceduresunder the Act on Private Participation in StateUndertaking B.E. 2535 (1992).

ë The Council of Ministers passed a resolution on18 December 2007 approving the land acquisitioncosts of the M.R.T. Purple Line Project, Bang Yai- Bang Sue Section, in the amount of Baht9,209 million.

2. Blue Line Bang Sue - Tha Phra and 27 The MRTA has completed the project study andHua Lamphong - analysis in accordance with the Act on Private

Bang Khae Participation in State Undertaking B.E. 2535 (1992)which shall be further submitted to the Ministry ofTransport and the Council of Ministers for approval.

3. Green Line Mo Chit - Saphan Mai 13 Bangkok Metropolitan Administration and the Office

Bae Ring - Samut Prakan 14 of Transport and Traffic Policy and Planning arepreparing the detailed design and conducting a studypursuant to the Act on Private Participation in StateUndertaking B.E. 2535 (1992).

Thereafter, the government under H.E. Samak Sundaravejûs administration amended and

adjusted former rail routes previously approved by the former government to be 9 routes, in order to

transport people from the suburban areas of Pathum Thani, Samut Prakan, Samut Sakhon and Nakhon

Pathom, into the city of Bangkok, as well as expanding the growth to the outer areas. The proposed

9 rail routes cover a distance of approximately 311 kilometres, and are listed as follows:

24


Rail Routes Distance

(Kilometres)

1. Bang Yai - Sai Noi - Dao Kanong 35.00

2. Samrong - Muang Boran 17.00

3. Mo Chit - Saphan Mai - Lam Luk Ka - Future Park Rangsit 36.60

4. Taksin - Maha Chai 20.00

5. Bang Sue - Khlong Toei (Loop 1) 29.00

6. Min Buri - Salaya 51.00

7. Taksin - Phutthamonthon 4 21.70

8. Wat Yai - Pom Phra Chun 6.00

9. Bang Kapi (Loop 2) 95.00

Note : As of the printing of this Annual Report, the above 9 rail routes are in the preliminary planning stages and

had not been approved by the Council of Ministers.

The M.R.T. Projects currently under construction are as follows:

Projects Construction Section Responsible Distance Current Status

Agency (Kilometres)

1. Light Red Line Makkasan - Suvarnabhumi SRT 28 Under construction2. Dark Green Line Section 1 : Taksin Bridge -

Taksin Road BMA 2.2 Nearly completed

Section 2 : Taksin Road -

Bang Wa BMA 5.3 Under construction

3. Light Green Line On Nut - Bae Ring BMA 5.25 Civil work construction

The Companyûs policy on the provision of service for the extensions

The Company, as the only service provider of the metro in Thailand, intends to bid for the operation

of the metro extensions in accordance with the governmentûs policy, especially the provision of service of

the Blue Line Extension which extends from the Blue Line (Chaloem Ratchamongkhon Line) currently

being operated by the Company. Since the Company has experience in this business both in terms of

administration of train operations and signaling system, and has the skilled team and personnel, facilities

and public utilities, including the Depot Building, Central Control Centre, Administrative Building, to

accommodate the future extension projects, therefore, the Company has the advantage of preparation

period, costs of investment and costs of administration relatively lower than other operators, which will

optimize the administration of the countryûs resources.


25

8.1 Risks relating to businesses of the Company and its Subsidiaries8.1.1 Risks relating to fare revenue

ë Passenger volume of the metroThe underground mass transit is a new form of the mass transit system in Thailand.

In the early stage of the service, people would need some time to become familiar withsuch new service, whereby this also necessitates good feeder systems and businessexpansions surrounding the routes. The volume of passengers of the metro dependsupon several factors including those beyond the Companyûs control, such as, fare rates ofother available alternative transit systems, road traffic congestion, oil prices, and businessexpansions surrounding the routes, which would serve the peopleûs destinations. Despitethe independent expertûs forecast passenger volume, the Company may not guaranteethat the volume of passengers would meet the forecast. Continuing failure to meet theforecast would give rise to negative impact on the volume of passengers of the metro aswell as the Companyûs revenue.

ë Increase in revenue may not be in line with expensesUnder the Concession Agreement, the maximum fare rate to be charged by the

Company is determined in pursuance of a formula based on the Bangkok Non-FoodConsumer Price Index, whereby the adjustment shall be made once every two years whilethe Companyûs costs may increase at any time during the operations.

8.1.2 Risks relating to commercial development revenueCommercial development revenue, which represents approximately 6% of the Companyûs

total revenue, throughout the Concession period of 25 years, may vary subject to the spendingbehavior of customers and advertisers depending on several factors beyond the Companyûscontrol, such as, economic fluctuations, competition in the advertising media and retail spacelease business, changes and amendment of laws and regulations governing such businessoperations in the metro, as well as the progress in opening of retail shops in the stations.Therefore, commercial development revenue may not serve as an additional source of revenuefor the Company.

However, the Companyûs three Subsidiaries which operate businesses relating tocommercial development inside the stations are established through joint investment withbusiness partners having requisite experience and expertise in the areas they operatebusinesses. The Company believes that the Subsidiariesû operations by experienced executiveswill lead to a satisfactory operation of its business. Furthermore, commercial developmentcost each year remains lower than commercial development revenue.

8.1.3 Risks relating to fluctuation of cost of fareCost of fare is deemed to be the main expenditure of the Companyûs core business

operation which comprises maintenance costs for the metro (M&E contract and E&M contract),public utility cost, and staffûs salaries and welfare. In this regard, the maintenance costs underthe M&E contract for 10 years may be adjusted based on the German Consumer Price Index forEuro-denominated payments, and based on the Bangkok Consumer Price Index for Baht-denominated payments. In addition, the cost of electricity used at stations and for trainoperations, which are the main costs of the public utility cost, may be adjusted according to theelectricity rates of the Metropolitan Electricity Authority. Moreover, as these main costs are fixedcosts, the fluctuating volume of passengers would not cause these costs to vary accordingly.

Risk Factors8

26


8.1.4 The Company relies on Siemens and Lincas for manufacture and maintenance of its M&EEquipment

The Company entered into an agreement for procurement of the M&E Equipment and anagreement for maintenance of the M&E Equipment with Siemens and Lincas for a period of 10years ending in 2014. Thus, in the event where Siemens and Lincas are unable to provide suchservices to the Company or there is any change in the maintenance agreement, the Companyûsbusiness operation may be adversely affected.

In the future, the Company has a policy to operate its business in the same manner assuch overseas transit service providers in Singapore and Hong Kong, etc., namely to select andprocure the M&E Equipment from other manufacturers of the equipment compatible with itsexisting system. It is also the Companyûs policy to develop the quality of its personnel to havesufficient capabilities in working with local and overseas equipment manufacturers andcontractors in the maintenance and repair of the M&E Equipment and the rail system toimprove its efficiency without reliance on the existing manufacturer.

8.1.5 Risks from terrorismOver the past years, there have been terrorist attacks in many regions of the world, such

as, the terrorist attacks in the United States of America on 11 September 2001, the terroristattacks on the London mass transit system, and the various instances in the south of Thailand.It is thus possible that any one or several incidents stated above may lead to a terrorist attackon the mass transit system in Thailand, which could affect the Companyûs business operation.

However, as a precaution to mitigate possible impact, the Company has taken out insurancecoverage for such risk and implemented measures to prevent a variety of such incidents in thefuture by means of review of train operations and emergency drills, including administration insidethe stations, performance of train operators and control centre staff, joint training between trainoperators and control centre staff, review of control centerûs operating manuals and emergencymanuals. Moreover, the Company regularly performs drills to ensure its preparedness for theseevents or emergencies by way of simulation in the stations, such as bomb threats and bombblasts in the stations, trains malfunctioning and stopping inside the tunnel, fire in the rolling stock,evacuation of passengers off trains, fire in the stations and fire inside the tunnel. In addition, theCompany has also strictly implemented security measures by having security officers stand atthe escalator checkpoints prior to entering stations to check passengersû belongings, and havingadditional closed-circuit televisions installed at each station. Furthermore, the MRTA has alsoarranged for dedicated teams of security officers stationed at metro stations, at parking buildings,a K-9 search team, an explosive ordinance disposal team, as well as arranging for rescue teams tobe ready to conduct operations in these circumstances.

8.1.6 Risks relating to the Concession Agreement and the government supervisionGiven that the Company operates its businesses in accordance with the

Concession Agreement under the supervision of the MRTA, differences in the contractual partiesûinterpretations on terms and conditions of the Concession Agreement may arise. Should theCompany and the MRTA be unable to resolve any problem, the Company may require a certainperiod of time to come to a solution, which would impact the Companyûs business operation.

8.1.7 Risks relating to the government policy in the construction and operation of the masstransit railway system

Every government has had a policy to expand the mass transit railway system to coverthe Bangkok Metropolitan area and its vicinity. The Council of Ministers under General Surayud


27

Chulanontûs administration approved in principle, guidelines for the development of the masstransit systems in the order of priority, necessity and urgency, with a plan to accelerateconstruction of five rail projects. In this regard, the new government after the election also hasa policy to accelerate and continue investing in the railway system projects which will helpstimulate the economy and result in expansion of related businesses, such as, constructionand real property sectors, as well as solving problems on the mass transit system. However,the new government plans to add and change the rail routes to be nine lines, and provideextensions for the lines previously approved by the former government including construction ofnew lines. The procedures and period for implementation according to such government planremain uncertain. The Companyûs growth is directly affected by any increased volume ofpassengers from any extensions and the new lines of the mass transit system. Therefore, anydelay by the government would affect the Companyûs growth rate.

Furthermore, should the government have a policy requiring the Company to merge itsbusiness with other mass transit systems in the future under various terms and conditions, theCompanyûs business operation may be affected by such merger.

8.2 Other risks8.2.1 The Company is unable to pay dividend in the forthcoming period

Due to the fact that the MRTA Initial System Project requires quite a large amount ofinvestment and continued use of working capital at the early stage of its operation, theCompany continues to sustain an operating loss during such period. The Company anticipatesthat it would not be able to pay dividend in the forthcoming period.

8.2.2 Risks from the interest rate and foreign exchange rate fluctuationsAs at 31 December 2007, the Company had long-term loans amounting to Baht 10,740

million extended by domestic banks at the interest rates ranging from the minimum lending rate(MLR) to MLR plus 0.25% per annum. The Company also had a loan amounting to Baht1,003.09 million extended by CH. Karnchang Public Company Limited, which is the Companyûsmajor shareholder, at the interest rate of MLR plus 0.50% per annum. In this regard, if theinterest rates increase, the Companyûs interest expense obligation would be affected. Inaddition, the Company also incurred expenses in foreign currencies for the maintenance cost ofthe M&E Equipment, in the amount of approximately Euro 3.92 million per year and insurancepremiums of approximately US$ 2.88 million per year. Thus, should the Baht value depreciate,the Companyûs expenses would increase accordingly. However, the Company plans to enterinto negotiation on payment of the maintenance cost of the M&E Equipment with the serviceprovider company for Euro-denominated payments in the amount of Euro 3.92 million per yearto be in Thai Baht in order to minimize risk from exchange rate.

8.2.3 The Company relies on the financial support from its major shareholdersUnder the conditions stipulated in the sponsor support agreement, two major

shareholders, namely, CH. Karnchang Public Company Limited and Natural Park PublicCompany Limited, are required to provide financial support to the Company so as to maintainits liquidity in accordance with the loan agreement executed with the financial institutions. Inthe event where the Company does not receive the required financial support, the Companymay be in default on the conditions of its existing loan agreement, which would affect theCompanyûs financial condition and results of its operations.

28


9.1 Securities of the CompanyAs at 31 December 2007, the Company has the registered capital of Baht 11,950 million,

divided into 11,950 million ordinary shares, with par value of Baht 1.00, as well as issued and paid-up

capital of Baht 11,950 million.

9.2 Shareholders of the CompanyThe table below shows the top ten shareholders of the Company as at 20 March 2007 (the

latest closing period of share register).

Name Number of Shares Percentage

Held (shares)

1. Mass Rapid Transit Authority of Thailand 2,987,500,000 25.00

2. CH. Karnchang Public Company Limited 2,940,999,916 24.61

3. Bangkok Expressway Public Company Limited 1,425,250,307 11.93

4. Mahasiri Siam Company Limited 821,628,388 6.88

5. Natural Park Public Company Limited 820,260,000 6.86

6. Merrill Lynch International 473,850,000 3.97

7. Krung Thai Bank Public Company Limited 471,250,000 3.94

8. Syntec Construction Public Company Limited 367,830,858 3.08

9. TMB Bank Public Company Limited 275,349,651 2.30

10. Nomura Singapore Limited 100,000,000 0.84

9.3 Dividend PolicyThe Board of Directors of the Company has a policy to pay dividends at the rate of

approximately 40 % of its net profits after deduction of all reserves as required by law and as

required under the Onshore Facilities Agreement, in particular after reserving funds for the repayment

of the principal and interest for a period of six months. As the Company has incurred losses during

the initial years of revenue service and has had accumulated losses, it is thus not able to pay

dividends to its shareholders.

The Companyûs Subsidiaries have policy to pay dividends at the rate of approximately 40% of

net profits after deduction of all reserves as required by law and pursuant to the Loan Agreement.

The Board of Directors of the Company will consider and propose the dividend payments to the

Subsidiariesû boards of directors for consideration and further submission to their shareholdersû

meetings for approval, provided that this will depend on the Subsidiariesû investment plans,

requirements and other justifications which their boards of directors deem appropriate.

Capital Structure9


29

Management Structure

10.1 Management StructureThe management structure of the Company comprises five committees, namely, the Board

of Directors, the Executive Committee, the Audit Committee, the Nomination and RemunerationCommittee, and the Risk Management Committee, as follows:

A. Board of DirectorsAs at 31 December 2007, the Board of Directors of the Company comprised 11 directors

as follows:

Name Position1. Mr. Plew Trivisvavet Chairman of the Board of Directors2. General Chetta Thanajaro Chairman of the Audit Committee and Independent

Director3. Mr. Vitoon Tejatussanasoontorn Audit Committee Member and Independent Director4. Lieutenant General Surat Sumrith Audit Committee Member and Independent Director5. Mr. Supong Chayutsahakij Director6. Dr. Sombat Kitjalaksana Director7. Mr. Kraisi Karnasuta* Director8. Mrs. Nongnutch Thienpaitoon Director9. Mr. Ronnachit Yaemsaard Director10. Mr. Somchai Sirilertpanich Director11. Dr. Anukool Tuntimas Director

* Appointed as director since 18 December 2007.

Nomination & Remuneration Committee

Risk Management Committee

Board of Directors Audit Committee

Executive Committee

Managing Director Office of theInternal Audit

Accounting and

Finance Division

Human Resources and

Administration Division

Marketing andCommercial

Development DivisionOperations Division

Office of the ManagingDirector

Safety and Quality Department

01

30


Dr. Sombat Kitjalaksana, as the Managing Director, shall be the secretary to the Company, andthe Office of the Managing Director shall be a supporting agency by performing duties in taking careof the activities of the Board of Directors, recording the minutes of the meetings, and duly andcompletely keeping the documents relating to the meetings, including providing advice on relevantlegal issues and regulations.

Roles and Duties of the Board of Directors(1) to supervise, monitor and manage the Companyûs operations to ensure compliance with laws as

well as the objectives and the Articles of Association of the Company and resolutions of theCompanyûs meetings of shareholders and to protect the interests of the Company, based onprinciples of good corporate governance as well as the rules and notifications of the StockExchange of Thailand and the Office of the Securities and Exchange Commission;

(2) to set policies and strategies of the Company and to supervise, control and monitor to ensurethat the management performs in compliance with such policies in an efficient and effectivemanner to give rise to the maximum economic value to the business and wealth to theshareholders;

(3) to hold the Companyûs annual ordinary general meeting of shareholders within no later than fourmonths from the end of the Companyûs financial year and extraordinary general meetings ofshareholders when it deems necessary;

(4) to hold the Companyûs Board of Directors meetings quarterly, at which not less than 50% of thetotal number of directors must attend the meeting to form a quorum. A majority vote is requiredfor any decision made at such a meeting and in the case of a tied vote, the chairman of themeeting will have a casting vote;

(5) to consider and approve the budget for the Companyûs annual investment and operations,including monitoring the utilisation of the Companyûs resources;

(6) to arrange for the preparation of proper, accurate and adequate financial and general significantreports to the Companyûs shareholders, including confirming the review and certification of theinformation contained therein;

(7) to establish an efficient and effective internal control system, internal audit system and riskmanagement measures, including regularly auditing such systems and measures;

(8) to consider the appointment of any sub-committees or other persons to manage the Companyûsoperations under the control of the Board of Directors of the Company, or to grant suchauthority to such persons for such period of time as the Board of Directors of the Companydeems appropriate, provided that the Board of Directors of the Company may cancel, revoke,change or amend such authorities as appropriate;

(9) to consider the appointment of the authorised signatory directors of the Company, including theappointment of sub-committees as may be necessary and appropriate to operate the Company;

(10) to consider and clearly specify the division of roles, duties and responsibilities among theCompanyûs Board of Directors, sub-committees and the management, including specifying theprocedures and regularly communicating such roles, duties and responsibilities to directors,sub-committee members, the management and staff of the Company;

(11) to supervise and monitor the Executive Committee to ensure compliance with the policiesspecified by the Board of Directors. The Executive Committee is authorised to approve anytransaction that is binding on the Company worth up to Baht 50,000,000 (Baht fifty million),excluding transactions which give rise to a conflict of interest with the Company and itsSubsidiaries pursuant to the notification of the Securities and Exchange Commission, includingtransactions which require approval from the Companyûs shareholders in accordance with thenotifications of the Securities and Exchange Commission and the Stock Exchange of Thailand;


31

(12) to consider and specify the power, duties and responsibilities, procedures for the appointmentand removal, disciplinary actions, salary, welfare benefits, bonus, gratuities and other remuneration,including expenses and fringe benefits, of the Managing Director of the Company;

(13) to consider and approve interim dividend payments to the Companyûs shareholders from time totime as it deems appropriate and in accordance with the law;

(14) to approve the issuance of financial instruments and any other securities by the Company, tospecify the number, price, date, procedures and conditions in respect of the underwriting ofsuch securities under the law and/or as specified by the meeting of the shareholders of theCompany, including the appointment of underwriters of such securities and underwriting agents.

Selection Procedures for the DirectorsThe Nomination and Remuneration Committee will consider selecting qualified persons to act as

directors and propose such persons to the Board of Directors for further submission to a meeting ofthe shareholders or to the Board of Directors for appointment in accordance with the Articles ofAssociation of the Company:

The Board of Directors of the Company must comprise at least five directors, of which not lessthan one-half must reside in Thailand. The directors must have the qualifications as specified by lawand be appointed by a meeting of shareholders of the Company in accordance with the following rulesand procedures:1. Each shareholder shall be entitled to one vote per share;2. Each shareholder must use all of the votes under paragraph 1 to appoint one or more directors

and may not divide such votes among candidates;3. The number of votes received is ranked from highest to lowest and the directors will be appointed

from the highest to lowest according to the number of directors to be appointed by the Companyat that time. Any tied votes for the final vacancy shall be decided by a drawing of lots.

Attendance at Meetings of the Board of Directors of the Company

Name 2007Number of Meetings Number of Meetings

Attended Held1. Mr. Plew Trivisvavet /1 4 52. General Chetta Thanajaro /2 3 53. Mr. Vitoon Tejatussanasoontorn /2 5 54. Lieutenant General Surat Sumrith /2 5 55. Mr. Supong Chayutsahakij /1 5 56. Dr. Sombat Kitjalaksana /1 5 57. Mrs. Vallapa Assakul /3 1 5

Mr. Pongpanu Svetarundra /4 3 5Mr. Kraisi Karnasuta /5 - 5

8. Mrs. Nongnutch Thienpaitoon /2 4 59. Mr. Ronnachit Yaemsaard /1 5 510. Mr. Somchai Sirilertpanich /6 5 511. Dr. Anukool Tuntimas /1 3 5

Notes: Term of Office/1 Appointed as director since 11 May 2004./2 Appointed as director since 26 May 2005./3 Resigned as director on 9 April 2007./4 Appointed as director since 9 April 2007 to 7 December 2007./5 Appointed as director (to replace Khun Pongpanu Svetarundra) since 18 December 2007./6 Appointed as director since 14 September 2004 until the Company received his resignation letter on 10 March 2005.

The Company registered such resignation with the Ministry of Commerce on 23 March 2005. He was re-elected asdirector on 26 May 2005.

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B. Audit CommitteeAs at 31 December 2007, the Companyûs Audit Committee comprised three members,

each of whom met the qualifications as specified by the Stock Exchange of Thailand, as follows:Name Position

1. General Chetta Thanajaro Chairman of the Audit Committee2. Mr. Vitoon Tejatussanasoontorn Audit Committee Member3. Lieutenant General Surat Sumrith Audit Committee Member

Roles and Duties of the Audit Committee(1) to ensure that the Companyûs financial reports are accurate and adequate;(2) to ensure that the Company has suitable and efficient systems of internal control and internal

audit;(3) to consider, select, nominate, appoint and recommend remuneration for the Companyûs external

auditors;(4) to ensure that the Companyûs operations are full, adequate and appropriate in compliance with

securities and exchange law and regulations of the Stock Exchange, or laws, regulations,articles and policies relating to the business of the Company;

(5) to consider the disclosure of information by the Company, in the case of connected transactionsor transactions that may give rise to a conflict of interest, to ensure accuracy and completeness;

(6) to prepare a report on the monitoring activities of the Audit Committee and disclose the samein the Companyûs annual report, and have such Audit Committeeûs report signed by theChairman of the Audit Committee;

(7) to do any other act as prescribed by law or assigned by the Companyûs Board of Directors withthe approval of the Audit Committee.

Selection Procedures for Independent Members of the Audit CommitteeThe Nomination and Remuneration Committee will select persons with suitable qualifications as

independent members of the Audit Committee and propose such persons to the Board of Directors ofthe Company for further submission to a meeting of the shareholders or the Board of Directors of theCompany for appointment. The Company shall have one Audit Committee, comprising at least threeindependent directors appointed for a period of three years each. The qualifications of the independentdirectors and Audit Committee members shall be in accordance with the minimum requirements asprescribed in the notifications of the SEC and the Stock Exchange of Thailand, as follows:

Definition of the Independent Director1. Holding shares in the Company of not exceeding five percent of the number of shares having

voting rights of the Company, parent company, subsidiaries, affiliated companies or juristicpersons which may have conflict;

2. Not being employee, staff nor advisor receiving regular salary or controlling person of theCompany, parent company, subsidiaries, affiliated companies or juristic persons which mayhave conflict;

3. Not being a person having relationship by blood or by registration under laws in the capacity asparent, spouse, sibling and offspring, including spouse of the offspring of any executive, majorshareholder, controlling person or nominated person to be an executive or controlling person ofthe Company or its subsidiaries;


33

4. Having no business relationship with the Company, parent company, or subsidiaries, affiliatedcompanies or juristic persons which may have conflict in the manner which may obstruct theexercise of his/her independent discretion and having no other characteristics which prevent theprovision of independent opinion regarding the Companyûs business operations.

Definition of the Audit Committee1. Holding shares of not exceeding five percent of the paid-up capital of the Company, subsidiaries,

affiliated companies or associated companies, including shares held by related persons;2. Being non-executive directors of the Company, subsidiaries, affiliated companies, associated

companies or major shareholders of the Company and being neither employee, staff nor advisorreceiving regular salary from the Company, subsidiaries, affiliated companies, associatedcompanies or major shareholders of the Company;

3. Being directors who neither have benefit nor interest, whether directly or indirectly, in both financeand management of the Company, subsidiaries, affiliated companies or major shareholders of theCompany, including neither have benefit nor interest in such manner within one year prior to theirappointment as Audit Committee members, except where the Board of Directors of the Companyhas thoroughly considered and deems that such previous benefit or interest shall not affect theindependence in the performance of duties and provision of opinions;

4. Being directors who are neither related persons nor close relatives of any executives or majorshareholders of the Company;

5. Being directors who are not appointed as representatives for protecting interest of the Companyûsdirectors, major shareholders or shareholders who are related persons of any major shareholdersof the Company; and

6. Being able to independently perform the duties and provide opinions or report the performanceof duties as assigned by the Board of Directors, without being under control of any executivesor major shareholders of the Company, including related persons or close relatives of suchpersons.

C. Executive CommitteeAs at 31 December 2007, the Companyûs Executive Committee comprised four members,

as follows:

Name Position

1. Mr. Plew Trivisvavet Chairman of the Executive Committee

2. Mr. Supong Chayutsahakij Member of the Executive Committee

3. Dr. Sombat Kitjalaksana Member of the Executive Committee

4. Dr. Anukool Tuntimas Member of the Executive Committee

Roles and Duties of the Executive Committee(1) to set policies, appoint, specify authorities and their duties, supervise, monitor and liaise with,

working groups or special working groups or management groups, including considering andapproving any proposal by such working groups or management groups or special workinggroups;

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(2) to approve any proposals by working groups or management groups or any working groupsfor the benefits of the Companyûs management and business operations under the objectivesof the Company;

(3) to enter into transactions binding the Company worth up to Baht 50,000,000 (Baht fifty million),but excluding transactions which give rise to a conflict of interests with the Company or itsSubsidiaries, pursuant to the notification of the Securities and Exchange Commission, includingtransactions which require approvals from the Companyûs shareholders in accordance with thenotifications of the Securities and Exchange Commission and the Stock Exchange of Thailand.Such transactions include the following:a. undertaking any juristic acts which bind the Company;b. withdrawing from any bank account of the Company and applying credit with the Companyûs

current banks or financial institutions, including the application to open accounts and/orother forms of credit with any banks or financial institutions, as well as using the Companyûssecurities as security for such debts, regardless of whether registered or not;

c. undertaking joint investments on behalf of the Company with individuals, juristic persons,other groups of persons under the law to proceed in accordance with the Companyûsobjectives, including other forms of investments, such as, share acquisitions and shareswaps with other juristic persons, as it deems appropriate;

d. undertaking feasibility studies of new projects as well as considering and approvingprojects as it deems appropriate;

(4) to specify, consider and approve articles, regulations, policies on the management and businessoperations of the Company or any operation binding on the Company;

(5) to give recommendations and advice and specify policies, powers and duties of the ManagingDirector, working groups, special working groups and management groups;

(6) to approve, appoint, employ, remove, impose disciplinary actions, fix salaries, welfare benefits,bonuses, gratuities and other remuneration, including expenses and fringe benefits of theofficers or staff of the Company holding positions of division heads or higher, includingthe Deputy Managing Director or equivalent or the working groups, special working groups ormanagement groups of the Company for specific purposes;

(7) to perform any act as authorised by the Companyûs Board of Directors from time to time;(8) to appoint persons or groups of persons to manage the Company under the control of the

Executive Committee or to grant authority to such persons or groups of persons to do any actsas the Executive Committee deems appropriate and to change, amend, cancel or revoke suchauthorities;

(9) to appoint the advisory chairperson or advisors or advisory committees to the ExecutiveCommittee as it deems appropriate and to fix the remuneration, allowance, welfare benefits,fringe benefits and other expenses of such appointees as appropriate;

(10) to call meetings of the Executive Committee and/or specify regulations and articles of suchmeetings as the Executive Committee or the Chairman of the Executive Committee deemsappropriate;

(11) when the Chairman of the Executive Committee cannot perform the duties, the Chairman shall


35

appoint an acting Chairman to perform such duties on a case by case basis and such actingChairman will have the same power and duties as the Chairman of the Executive Committee;

(12) to consider and approve the authorities of the management of the Company according to therules, regulations and articles of the Company.However, the Executive Committee does not have the power to approve any transactions or

matters in respect of which the Executive Committee or persons have a conflict, interest or conflict ofinterest with the Company or its Subsidiaries, pursuant to the notification of the Securities andExchange Commission.

Selection Procedures for the Executive CommitteeThe Board of Directors of the Company shall appoint the Executive Committee in accordance

with the Articles of Association of the Company, which provide that the Board of Directors of theCompany may appoint any other person to manage the Company under the control of the Board ofDirectors, provided that any such person who is to be a member of the Executive Committee shallhave the qualifications and capacity to perform their duties.

D. Nomination and Remuneration CommitteeAs at 31 December 2007, the Nomination and Remuneration Committee of the Company

comprised three members as follows:

Name Position

1. General Chetta Thanajaro Chairman of the Nomination and Remuneration Committee

2. Mr. Plew Trivisvavet Member of the Nomination and Remuneration Committee

3. Mr. Vitoon Tejatussanasoontorn Member of the Nomination and Remuneration Committee

Roles and Duties of the Nomination and Remuneration Committee(1) to consider the nomination of persons with suitable qualifications as directors and to propose

such persons to the Board of Directors for further submission to a meeting of the shareholdersof the Company or the Board of Directors of the Company for appointment;

(2) to select a person suitable for the Managing Director position and propose such person to theBoard of Director of the Company for appointment;

(3) to specify the rules for determination of remuneration of directors and the Managing Director;(4) to determine and to propose the directorsû remuneration to a meeting of the shareholders of the

Company for approval;(5) to propose the salary and adjustments and other remunerations of the Managing Director to the

Board of Directors of the Company for approval;(6) to undertake other matters as assigned by the Board of Directors of the Company.

Selection Procedures for the Nomination and Remuneration CommitteeThe Board of Directors of the Company shall appoint members of the Nomination and

Remuneration Committee who shall hold such office for a period of three years.

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E. Risk Management CommitteeAs at 31 December 2007, the Risk Management Committee of the Company comprised

four members as follows:

Name Position1. Mr. Supong Chayutsahakij Chairman of the Risk Management Committee2. Dr. Sombat Kitjalaksana Member of the Risk Management Committee3. Mr. Witoon Hatairatana Member of the Risk Management Committee4. Miss Pornpimol Chirtchoochai Member of the Risk Management Committee

Roles and Duties of the Risk Management Committee(1) to consider and set the policies on risk management measures and plans for the operations of

the business and Subsidiaries;(2) to monitor and assess the appropriateness of the overall risk management system of the

Company;(3) to prepare recommendations to the Board of Directors of the Company in respect of risk

management, standard practice, strategy, risk assessment in each matter and of the Companyas a whole to ensure efficient and effective risk management;

(4) to prepare risk reports for the Board of Directors of the Company;(5) to carry out other matters as assigned by the Board of Directors of the Company.

Selection Procedures for the Risk Management CommitteeThe Board of Directors of the Company shall appoint members of the Risk Management

Committee.

F. ManagementAs at 31 December 2007, the management of the Company comprised four members

as follows:

Name Position1. Dr. Sombat Kitjalaksana Managing Director2. Mr. Witoon Hatairatana Operation Director and acting Marketing and

Commercial Development Director /1

3. Miss Pornpimol Chirtchoochai Accounting and Finance Director4. Mrs. Tanawon Srivardhana Human Resources and Administration Director

Note: /1 The Company is currently in the process of nominating the Marketing and Commercial DevelopmentDirector.

Roles and Duties of the Managing Director(1) to control and monitor all businesses of the Company and to ensure compliance with resolutions

and policies of the Board of Directors and the Executive Committee of the Company;(2) to approve, appoint, remove, employ, impose disciplinary actions, fix salary, bonus, gratuities,

welfare benefits and other remuneration, including expenses and fringe benefits for managementor staff with salary (exclusive of other remuneration) of up to Baht 200,000 (Baht two hundredthousand) per month, holding positions below division heads (excluding the Deputy ManagingDirector and division heads or equivalent), and the Managing Director may delegate suchpower or duties to the working groups or the Board of Directors, management group, group ofpersons or the management, as he deems appropriate;


37

(3) to have the power to enter into any transaction, binding on the Company, worth up to Baht2,000,000 (Baht two million) for each transaction;

(4) to authorise the management of the Company, such as, the Deputy Managing Director,Assistant Managing Director, the division heads or equivalent, to perform certain duties onbehalf of the Managing Director (such as, procurement, hiring and ordering payments) ashe deems appropriate;

(5) to have the power to issue, amend, add, improve regulations, orders and work rules of theCompany, including employment, appointment, removal and disciplinary actions of staff andemployees, fixing of salaries and other remuneration, including gratuities and welfare benefits;

(6) to have the duty to submit the balance sheet, financial statements and profit and loss accountsto the Board of Directors of the Company for approval;

(7) to undertake feasibility studies of new projects as well as consider and approve such projectsas assigned by the Executive Committee;

(8) if the Managing Director cannot perform his duties, to appoint the Deputy Managing Director orany other person to perform his duties on his behalf and such appointee shall have the samepower and duties as the Managing Director;

(9) to appoint persons or groups of persons to manage the Company under the control of theManaging Director or to grant such authority to such persons or groups of persons to do anyacts as the Managing Director deems appropriate, and to change, amend, cancel or revoke suchauthority;

(10) to propose any matter to the Board of Directors, the Executive Committee, the Audit Committeeor meetings of the shareholders of the Company for consideration, approval or other purposesas he deems appropriate;

(11) to do other acts as assigned by the Board of Directors or the Executive Committee of theCompany from time to time.

However, the Managing Director does not have the power to approve any transactions ormatters in respect of which the Managing Director or other persons may have a conflict of interestwith the Company or its Subsidiaries, pursuant to the notification of the Securities and ExchangeCommission.

Selection Procedures for Management and Staff- The Managing Director will be appointed by the Board of Directors of the Company through the

nomination by the Nomination and Remuneration Committee;- Management at the level of division head or higher will be nominated, selected and appointed

by the Executive Committee;- Management whose salary does not exceed Baht 200,000 per month and holding a position

lower than division head will be nominated, selected and appointed by the Managing Director;- The selection, nomination and recruitment of positions lower than manager or equivalent shall

be carried out by the Human Resources and Administration Division which will make theselection jointly with the relevant division in accordance with the Companyûs operationregulations in relation to recruitment of personnel. They shall recruit and appoint persons withknowledge, capacity and experience suitable to carry out their duties for the Company.

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Selection of Directors and Management of SubsidiariesThe Subsidiaries of the Company, BMCL Network Limited, Metro Mall Development Limited,

and Triads Networks Co., Ltd., do not have their own nomination committees. The selection of theirdirectors is carried out by their shareholders and the selection of the management is carried out bytheir respective boards of directors, provided that their directors and management are suitablyqualified without any prohibited characteristics under Section 68 of the Public Limited CompaniesAct B.E. 2535 (1992).

10.2 Remuneration of Management10.2.1Cash Remuneration

Remuneration of Directors of the Company(Only remuneration as directors and members of the Audit Committee)

Name of Director 2007 Remuneration Amount (Baht)Meeting Monthly Total

Allowance1. Mr. Plew Trivisvavet /1 20,000 - 20,0002. Dr. Sombat Kitjalaksana /1 25,000 - 25,0003. Mr. Ronnachit Yaemsaard 25,000 240,000 265,0004. Mr. Supong Chayutsahakij /1 25,000 - 25,0005. Dr. Anukool Tuntimas /1 15,000 - 15,0006. Mr. Somchai Sirilertpanich 25,000 240,000 265,0007. Mrs. Nongnutch Thienpaitoon 20,000 240,000 260,0008. Mrs. Vallapa Assakul /2 (1 January - 9 April 2007) - 40,000 40,000

Mr. Pongpanu Svetarundra /3 (9 April -7 December 2007) 15,000 157,333 172,333Mr. Kraisi Karnasuta /4 (18 December 2007 -Present) - 8,667 8,667

9. General Chetta ThanajaroAs Director 15,000 - 15,000As Chairman of the Audit Committee 15,000 600,000 615,000

10. Mr. Vitoon TejatussanasoontornAs Director 25,000 - 25,000As Audit Committee Member 20,000 360,000 380,000

11. Lieutenant General Surat SumrithAs Director 25,000 - 25,000As Audit Committee Member 20,000 360,000 380,000TOTAL 290,000 2,246,000 2,536,000

Notes: /1 Remuneration was presented in the topic of Total Remuneration of the Executive Committeeand Management

/2 Resigned as director since 9 April 2007./3 Held the position since 9 April - 7 December 2007./4 Replaced Mr. Pongpanu Svetarundra since 18 December 2007 - Present.


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Total Remuneration of the Executive Committee and Management

Name 2007

Number of Amount Nature of Remuneration

Directors (Baht)

Total remuneration for Executive Committee 4 2,880,000 monthly

Total remuneration for Management 4 16,554,876 salary, bonus, contributions to

the provident fund and social

security fund

TOTAL 7 /1 19,434,876

Note: çManagementé means the managers, top 4 executive positions inclusive, directly below the ManagingDirector, excluding the accounting or finance manager./1 Dr. Sombat Kitjalaksana is both Executive Committee and Management.

10.2.2Other Remuneration

On 30 June 2005, the Extraordinary General Meeting of Shareholders No. 1/2005 resolved

to issue and offer 450,000,000 new capital increase shares to the directors, management and

staff of the Company (at the par value of Baht 1 each) and the Board of the Directors was

authorised to allocate these shares. During 26 - 28 December 2005, 296,689,300 shares were

allocated to the directors, management and staff of the Company. The shares so allocated to

the directors, management and staff will be subject to a silent period for 2 years from the date

the Companyûs shares start trading on the Stock Exchange of Thailand. The directors,

management and staff will be permitted to sell the shares at maximum of 50% of the locked-

up shares every 12 months and 24 months thereafter from the date the Companyûs shares

start trading on the Stock Exchange of Thailand (21 September 2006).

40


Number of Shares in Bangkok Metro Public Company Limited held by the Directors andManagement


Name of Directors and Management Number of Shares Held Percentage of Shareholding(shares) (%)

1. Mr. Plew Trivisvavet 31,589,500* 0.262. Dr. Sombat Kitjalaksana 15,000,000 0.133. Mr. Ronnachit Yaemsaard - -4. Mr. Supong Chayutsahakij 15,000,000 0.135. Dr. Anukool Tuntimas 15,000,000 0.136. Mr. Somchai Sirilertpanich 15,000,000 0.137. Mrs. Nongnutch Thienpaitoon 15,000,000 0.138. Mr. Kraisi Karnasuta - -9. General Chetta Thanajaro 10,000,000 0.0810. Mr. Vitoon Tejatussanasoontorn 15,000,000 0.1311. Lieutenant General Surat Sumrith 15,000,000 0.1312. Mr. Witoon Hatairatana 10,000,000 0.0813. Miss Pornpimol Chirtchoochai 10,000,000 0.0814. Mrs. Tanawon Srivardhana - -

* This represents 20,000,000 ESOP shares and 11,589,500 shares repurchased from staff who resigned duringDecember 2005 - December 2007.

10.3 Corporate GovernanceThe Board of Directors of the Company realises the significance of the corporate governance for

improving the transparency and responsibilities of the Board of Directors and management, andincreasing the confidence of shareholders, investors and other related parties. The Company thussets policies and guidelines for the good corporate governance in accordance with the current goodcorporate governance principles for listed companies, which contains the following significantprinciples and practices:1. Shareholdersû Rights

The Company realises the significance of the shareholdersû rights that the shareholdershold the ownership to control the Company by way of appointment of the Board of Directors torepresent them as well as their right to decide on any significant changes of the Company.Therefore, various guidelines are set to encourage the shareholders to exercise their rights, suchas, the shareholdersû fundamental rights, other than participation to vote in the shareholdersûmeeting, the shareholders shall also have the rights to purchase, sell or transfer shares on anequal basis, receive revenue sharing or dividend payment, including receipt of information andnews of the Company on a continual basis. In this regard, the Company would not take anyactions in violation of or depriving the shareholders of their rights. Proper treatments towardsshareholders are as follows:(1) The Company assigned Thailand Securities Depository Company Limited, as its share

registrar, to deliver notice of the shareholdersû meeting and supporting documents to allshareholders in advance at least 7 days prior to the meeting date, whereby the notice ofthe meeting shall contain full details and clearly specify objectives, reasons and opinionsof the Board of Directors on each item of the proposed agenda.


41

(2) The Company allowed the shareholders to propose items of the agenda of the shareholdersûmeeting and nominate directors, by way of announcement via the channels of the StockExchange of Thailand, together with detailed and clear criteria for consideration andacceptance of the proposed matters in the agenda.

(3) The Company efficiently prepared the minutes of the shareholdersû meeting coveringsignificant details on various matters, e.g., announcement of the voting method andcounting by using voting cards to the shareholders prior to the meeting, record ofquestions posed by the shareholders and answers on various items at the meeting,proper record of resolutions of the meeting, together with such votes to agree, disagreeand abstain on all items requiring voting, record of the list of attending directors, etc.

(4) The Chairman of the Board of Directors, chairmen of various committees, the ManagingDirector and auditor of the Company participated in every annual ordinary generalmeeting of shareholders to answer questions in relevant matters.

(5) The shareholding structure of the Company and its Subsidiaries is disclosed with clarity,transparency and open for review.

2. Equitable Treatment towards ShareholdersThe Company ensures its equal treatment towards all shareholders, including minority

and foreign shareholders, with the following guidelines for protection of the shareholdersû rights:(1) Minority shareholders are entitled to nominate persons to be appointed as directors prior

to the date of the shareholdersû meeting by way of announcement via the channels of theStock Exchange of Thailand as well as clearly specifying criteria for nomination andappointment of directors.

(2) Each shareholder is entitled to one vote per share.(3) Any shareholder unable to attend the meeting in person may exercise his/her right to vote

by appointing proxy to attend and vote on his/her behalf. In this regard, the proxy formis sent with the notice of the shareholdersû meeting, clearly indicating the requireddocuments and evidence for proxy appointment, along with instructions as to the proxyprocedures for the shareholders to make proper arrangements without any complication.

(4) The guidelines for confidentiality and insider information are set in writing anddisseminated to directors, executives and staff of the Company for information andcompliance in order that the shareholders feel confident that they would derive benefitson an equal basis. In the past, there has never been any occurrence of misuse of insiderinformation for personal interests or others by any directors or executives of the Company.In this respect, the Company discloses such matter in the Companyûs Code of Conduct.

(5) The Companyûs related party transactions and the Board of Directorsû opinions on suchtransactions are disclosed to shareholders. In addition, there have never been any relatedparty transactions executed in violation of or not in compliance with the rules of the StockExchange of Thailand and/or the Office of the Securities and Exchange Commission. Inthis regard, the Company discloses the related party transactions in the CompanyûsAnnual Report.

(6) The Company has no policy to provide any financial support, whether loan or guarantee,to any companies which are not the Companyûs Subsidiaries, except such loan orguarantee due to the Companyûs shareholding percentage in accordance with a jointventure agreement.

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3. Recognition of StakeholdersThe Company is aware that all groups of stakeholders of the Company should be

bestowed due care by the Company under their rights as stipulated by law or mutually agreed,taking into account good relationship and cooperation, to ensure a long-term and continuedstability and growth.

Therefore, the Company recognizes all groups of stakeholders, whether they be staff,shareholders, customers, traders and business counterparties, creditors, competitors, communities,society, environment and government sector. To this end, the Company prepares the Code ofConduct and Business Ethics containing such principles for distribution to all staff of theCompany. The guidelines for treatment towards the stakeholders of the Company are as follows:(1) Staff

To set out clear and concrete policies relating to guidelines for the Companyûspersonnel development, safety, staff benefits, provident fund for the benefit of staff, withinternal training to all levels of its staff on a continual basis.

The Company establishes a Safety, Occupational Health and Working EnvironmentCommittee to provide specific training to the Committee to perform the duties to monitor,advise, provide information and news relating to safety, occupational health and workingenvironment, including prevention of any work-related accidents, and health careinformation to staff for proper understanding and conduct. This demonstrates the Companyûsawareness of staff welfare for maximum safety and efficiency. In addition, variousactivities are held to promote the quality of life for staff, namely, arrangement of a libraryfor the Operations Division, Learning Zone room, fitness and recreation room, includingvarious activities promoting good physical and mental health for staff.

(2) ShareholdersTo set out concrete policies and practices expressing the Companyûs responsibility

towards the shareholders on an equal basis. The Companyûs treatment towardsshareholders complies with the good corporate governance principles in the Chapter:Shareholdersû Rights and Equitable Treatment towards Shareholders, as per the details inthe Code of Conduct and Business Ethics as mentioned above. In this regard, theCompanyûs website, www.bangkokmetro.co.th, is also available for shareholders orstakeholders to contact or submit complaints on any matters which may directly causedamage to the Company, to the Audit Committee via email: [email protected].

(3) CustomersTo set out clear and concrete policies relating to fair treatment and responsibility

towards customers and make public announcement in accordance with the Companyûsvision çTo be one of the world leading mass rapid transit operators with high quality ofserviceé.

To that effect, the Company obtained the ISO 9001:2000 Quality ManagementSystem on 10 November 2005 and the OHSAS 18001:1999 and the TIS 18001:1999Occupational Health and Safety Management Systems on 10 January 2007 and 7February 2007, respectively. The Company realises that due care for customers is the keyto the sustainable development. As such, the Companyûs staff would be well trained anddeveloped to meet international standard in respect of which the Company acquiresknowledge from its membership of various international public transport organisations,


43

namely, UITP, APTA, AROA and NOVA. The Company reviews and improves proceduresand regulations from experiences to provide services to all customers, whether they bechildren, adults or general people, as well as taking into account opinions andsuggestions of customers for review and improvement of the services to the customersûutmost satisfaction. In this respect, the Company has also established the CustomerRelations Center for customers to contact or make inquiries as well as expressingopinions and suggestions to the Company (Customer Relations Center: 66(0)2624-5200or e-mail: [email protected]).

Moreover, the Company has conducted satisfaction survey of regular customers,including study on various factors and behaviors of the metro use on key issues, namely,staff, safety, convenience, travel time, accountability, punctuality and cleanliness forimproved quality of the services in all respects to fulfill customersû requirements.

(4) TradersTo set out policies and practices for fair treatment towards traders of the Company,

by making decisions based on comparison of terms, prices, quality and services withtransparency and open for review for the purpose of development and maintenance ofsustainable relationship along with the clear objectives of the value of goods and service.

(5) CreditorsTo set out establish concrete policies and practices for fair treatment towards

creditors, by clearly demonstrating the Companyûs responsibility towards its creditors. Inthe past, the Company has always been fairly treating its creditors and never been inbreach of any agreements with the Companyûs creditors.

(6) CompetitorsThe Company focuses on operation of its business with ethics, transparency and

fair competition.(7) Society/Communities and Environment

To set out policy on business operation by taking into consideration society/communities and environment and complying with laws and requirements in various aspectswithout taking advantage of society. The Company takes into account its responsibilityand the value and significance of its corporate social responsibility and protection of theenvironment. In this regard, upon comparison with other transit systems, the metro isenvironment-friendly by helping reducing noise, air pollution and saving energy.

The Company is committed to the ISO 14001:2004 Environmental ManagementStandard and also implements various measures to reduce energy consumption ofequipment in the train operations as well as continuously undertaking projects and socialand environmental activities to promote the metro commute instead of personal vehicles,energy saving, reduction of fuel consumption and global warming.

4. Information Disclosure and TransparencyThe Company has the guidelines on disclosure of significant information relating to the

Company with accuracy, completeness, punctuality and transparency through an easy accessto information with reliability, such as, dissemination of information on websites of the StockExchange of Thailand, the Office of the Securities and Exchange Commission, including theCompanyûs website: www.bangkokmetro.co.th. Such significant information comprise the

44


Companyûs business operation, financial report, results of operations, newsletters, annualreport, shareholding structure, securities information, information for investors as well as thecorporate governance policy of the Company, etc. The Company has also established theOffice of the Managing Director responsible for works in respect of investor relations and thesecretary to the Company, whereby investors can conveniently contact and make inquiriesrelating to the Company at the telephone number 02-354-2000 ext. 3513-3517 and E-mailAddress : [email protected]. The contact channels are clearly indicated on the Companyûswebsite and the Companyûs Annual Report.

5. The Board of Directorsû ResponsibilitiesThe Company realises the significance of the role and duties of the Board of Directors

towards the Company and shareholders. The Board of Directors shall have leadership, vision,knowledge, abilities and experiences in various fields, honesty and integrity as well asindependency on decision making for the optimum benefits to the Company and shareholdersas a whole. The Board of Directors participates in determination of vision, missions, strategies,targets, business plan and budget of the Company, and supervises the management to takeactions to ensure compliance with the business plan and forecast budget with efficiency andeffectiveness, including the Code of Conduct and Business Ethics of the Company, togetherwith government rules and regulations, for sustainable growth of the organisation and forappropriate return to shareholders.

The Board of Directors of the Company shall have a three-year term of office and eachdirector should not hold the office of director of more than ten listed companies. In this regard,the role, duties and responsibilities of the Board of Directors and the management shall beclearly separated and there shall be the secretary to the Company to perform the duties asspecified by law, namely, preparation and collection of director registrations, notices of theBoard of Directorsû meetings, minutes of the Board of Directorsû meetings, notice of theshareholdersû meeting and minutes of the shareholdersû meeting, report on interested directorsand management, including advice on various laws and regulations as required by the Board ofDirectors as well as coordinating to ensure compliance with the Board of Directorsû resolutions.

10.4 Insider Information SupervisionThe Company has set the following guidelines to prevent the use of insider information as per

the resolution of the Board of Directors Meeting No. 3/2005 held on 10 March 2005.10.4.1General

As the Company is a public limited company incorporated under the Public LimitedCompanies Act B.E. 2535 (1992) and is intending to have an initial public offering of its shares,following the listing of its shares on the Stock Exchange of Thailand, any sale or purchase of theCompanyûs securities by its management or staff based on material facts that may affect themarket price of the shares or securities, which have not yet been disclosed to public, and whichhave been obtained by their duties or positions in the Company, would be considered as takingadvantage of third parties, and may be subject to a criminal penalty under the law.

Therefore, to prevent the Companyûs staff and directors, including the Company itself,from encountering any such illegal acts which may violate such law, as well as to comply withgood corporate governance guidelines of the Company, the Companyûs Board of Directors hasset guidelines to prevent the use of insider information. Such guidelines will be revised from time


45

to time as appropriate and all directors, management and staff of the Company will strictlyadhere to these guidelines with accountability as well as causes and effects on a case by casebasis. These guidelines and policies will be more strict than the provisions of law, and will applyto directors, management and staff, including related persons.

10.4.2Securities Sale and Purchase Using Insider InformationProhibited Persons

Persons who should not sell or purchase securities pursuant to the guidelines to preventthe use of insider information are as follows:(1) Directors and management of the Company;(2) Directors and management of the Companyûs Subsidiaries, including its affiliates;(3) All staff of the Company and of the Companyûs Subsidiaries;(4) Spouses and minor children of the directors and staff; and(5) Relatives who live with such persons above.

Prohibited SecuritiesSecurities refer to shares, share warrants, convertible debentures and transferable

subscription rights issued by the Company.

General Practice(1) Prohibited persons as described above should not sell or purchase the securities under

any circumstances if they are aware or should be aware of material information that mayaffect the market price of the Companyûs securities, which has not yet been disclosed tothe public.

(2) Prohibited persons who are in possession of such material information due to their dutiesand positions as the Companyûs staff shall not disclose such information to any otherperson while such information has not yet been disclosed to the public, unless it is donein the performance of their duties in the Company.

Specific GuidelinesIn addition to the general guidelines to prevent the use of insider information, Prohibited

Persons shall also follow the following guidelines:(1) Prohibited persons who are directly involved in the preparation of the Companyûs financial

statements and balance sheet, are prohibited from any purchase or sale from thecommencement of such preparation until the day immediately following the disclosuredate of such financial statements.

(2) Any directors, management or staff who have received the draft financial statements asreferred to above, are prohibited from selling or purchasing the Companyûs securitiesfrom the day that they receive the draft financial statements until the disclosure date ofthe financial statements.

(3) Prohibited persons, who know or should have known that the Company will disclosematerial information that may affect the market price of the Companyûs securities, areprohibited from selling or purchasing the Companyûs securities from the day that theyknow or should have known such information until the disclosure date of suchinformation.

46


10.4.3Report of Prohibited PersonsA. Duty to Prepare Reports

(1) Directors, managers or persons who hold management positions as specified in theSecurities and Exchange Act shall be required to prepare disclosure reports of theirinitial securities holdings, and changes in such holdings, pursuant to the relevantlaws and regulations, together with such reports to the Company.

(2) Officers in the Chief position or above shall report all acquisitions or disposals ofsecurities holdings equal to 5% or more of the total issued shares.

B. Reporting Procedures(1) Directors, managers or persons as specified in paragraph A. (1) above who have

the duty under law to disclose their securities holdings, their spouseûs securitiesholdings, and their minor childrenûs securities holdings to government agencies orregulators shall submit copies of such reports to the Company on the same day.

(2) Officers as specified in paragraph A. (2) shall disclose their securities holdings andchanges in their own securities holdings as per paragraph B. (1) as well as holdingsof their spouses and their minor children, to the Company within seven businessdays from the date of change in title to the Securities.

10.5 Internal ControlThe Company pays significant attention to its internal control system to prevent and minimize

the risk which may arise, through the estabilishment of the Office of the Internal Audit. The Office ofthe Internal Audit reviews the operation systems in various divisions of the Company in accordancewith the annual audit plan as approved by the Audit Committee. On 26 February 2008, the Board ofDirectors and the Audit Committee of the Company in the Meeting No. 1/2008, having all independentdirectors present at the Meeting, assessed the adequacy and suitability of the Companyûs and theSubsidiariesû internal control systems, including the internal control evaluation guidelines. Having queriedthe management, the Company concluded that the Companyûs internal control system is adequate andsuitable with respect to the following 5 areas: organisation and environment; risk management;operational control of management; information technology and communications system; andmonitoring system, which would prevent the Companyûs and the Subsidiariesû assets from unauthorizedusage by the management. To date, there has never been any material fault. The details are as follows:

Organisation and EnvironmentThe Company has an appropriate organisational structure that ensures efficiency in the operation

of management. In addition, it has in place business goals and operational policies and guidelineswhich are clear and assessible. These include written codes of conduct, to prevent potential damageto assets of the Company and its Subsidiaries, including prevention of any misconduct by the Companyûsmanagement and staff.

Risk ManagementThe Company has established a Risk Management Committee responsible for managing,

reviewing and maintaining the overall risk management system of the Company at an appropriatelevel. The Committee provides suggestions to the Board of Directors in relation to risk managementpolicies, standard practice and strategy, and risk assessment in each matter and of the Companyas a whole to ensure efficient and effective risk management, as well as preparing risk reports tothe Board of Directors for acknowledgement. In this respect, a working group comprising themanagement in the manager level from all departments of the organization has been established to set


47

out the risk management plans for the entire organization for submission to the Risk ManagementCommittee to ensure that the Company has an adequate and suitable internal control system.

Safety is the heart of our mass transit rail service. The Company has established the SafetyCommittee to ensure the preparation, utilization, adjustment and improvement of safety managementsystem with efficiency and continuity. Moreover, there are four safety sub-committees, namely,risk control sub-committee, operational rules and procedures sub-committee, contractors safetysub-committee and occupational health and safety sub-committee.

Operational Control of ManagementThe Company clearly sets the scope of duties, responsibilities and transaction limits for each

level of management in writing. In addition, for any transactions with major shareholders, directors,management or related parties, the Company has thorough guidelines in place to monitor and preventany conflicts of interests to optimise the Companyûs interests, including regularly monitoring theoperations of the Subsidiaries and establishing guidelines for the persons as nominated and appointedas directors or management in the Subsidiaries to adhere thereto.

Information Technology and Communications SystemThe Company pays significant attention to its information technology and communications

systems to ensure that the Companyûs information is accurate, complete and adequate for thedecision-making by the management and the Board of Directors. It maintains a system for storage ofaccounting records and all supporting documents in an organised manner, as well as uses generallyaccepted accounting principles as appropriate to the nature of the Companyûs business. In thisrespect, the Company has established a working group to supervise the security managementfor information technology, as well as prepare manuals on security management for informationtechnology to cover various important issues in accordance with IEC 17799 standard, such as,information technology property classification and protection, personnel standards for organizationalsecurity, physical and environmental security, as well as communications and network for computermanagement, rights to use information technology, systems development, and business continuitymanagement of information technology, etc.

Monitoring SystemThe Company regularly monitors the results of operations against the set targets. Any material

differences are reported to the Board of Directors/the Audit Committee for correction, which shall thenbe regularly reported on the progress of the correction. In addition, the Company also has policies inplace for the management to immediately report to the Board of Directors any fraud, violation of lawand other misconducts which may materially affect the Companyûs reputation and financial condition.

In addition, the Company has the Quality Management Committee to plan and manage thepreparation and development of the Companyûs quality management system to ensure the suitabilityand continued development of efficiency and effectiveness of the system. In this regard, the Companyhas received the standard quality management certifications as follows:1. The ISO 9001:2000 Quality Management System on 10 November 2005;2. The OHSAS 18001:1999 and the TIS 18001:1999 Occupational Health and Safety Management

Systems on 10 January 2007 and 7 February 2007, respectively;3. The Safety Management System from Lloydûs Register Rail on 1 January 2007; and4. At present, the Company is applying for certification of the ISO 14001:2004 Environmental

Management System as already audited and evaluated by TUV NORD since 17-18 December2007.

48


Details of Board of Directors, Executives and ControllingPersons of the Company as of 31 December 2007

Deta

ils o

f Boa

rd o

f Dire

ctor

s, Ex

ecut

ives

and

Cont

rollin

g Pe

rson

s of

the

Com

pany

as

of 3

1 De

cem

ber 20

07

Perc

entag

e of

Wor

k Ex

perie

nce

(Pas

t 5 Y

ears

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me

/ Pos

ition

Age

Educ

ation

Qua

lifica

tion

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holdi

ngRe

lation

ship

Perio

dPo

sition

Nam

e of

Dep

artm

ent/

(year

s)in

the

Com

pany

/Typ

e of

Bus

iness

Comp

any (

%)

1.Mr

. Plew

Trivi

svav

et (1)

62-

Maste

r deg

ree, M

.Sc. (

Electr

ical

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resen

tCo

rpor

ate G

overn

ance

and

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arnch

ang

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n of

the B

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saka

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upply

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man

of the

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socia

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ent

Chair

man

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ctors,

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kok

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xecu

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and

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ommi

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2004

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ork

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any

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of

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kok

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CH. K

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and

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neral

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jaro

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rts (P

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tor,

Chair

man

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it Co

mmitte

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ngko

k Me

tro P

ublic

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pany

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tor

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hamh

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rogr

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mune

ration

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mitte

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mmitte

e(D

CP),

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ublic

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pany

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airma

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ce fo

r Non

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ram, 7

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ject

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ommi

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ciatio

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f Com

merce

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2007

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ent

Chair

man

of Co

rpor

ate G

overn

ance

and

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arnch

ang

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ussa

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amma

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nivers

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sk M

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mitte

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rogr

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CP),

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tor,

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mitte

e, No

mina

tion

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kok

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lic C

ompa

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d-

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mitte

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and

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nerat

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ommi

ttee

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mina

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arter

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irecto

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man

of the

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it Co

mmitte

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chan

g Pu

blic

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any

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of Di

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credit

ation

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gram

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visor

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utsah

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docto

rate

of Bu

sines

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dit C

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nsit

Autho

rity o

f Tha

iland

-Di

recto

rs Ac

credit

ation

Pro

gram

2000

-200

3As

sistan

t Gov

ernor

Mass

Rap

id Tra

nsit

Autho

rity o

f Tha

iland

(DAP

), 35

/2005

Thai

Institu

te of

Direc

tors

Asso

ciatio

n10

.Mr

. Som

chai

Sirile

rtpan

ich (1)

45-

Maste

r of B

usine

ss A

dmini

strati

on,

0.13

-20

05-P

resen

tDi

recto

rBa

ngko

k Me

tro P

ublic

Com

pany

Lim

ited

-Di

recto

rOp

eratio

n Ma

nage

ment,

Univ

ersity

of

2004

-Pres

ent

Vice

Chair

man

of the

Boa

rd, a

ndSy

ntec

Cons

tructi

on P

ublic

Com

pany

Scran

ton,

Penn

sylva

nia, U

.S.A.

Mana

ging

Direc

tor

Limite

d-

Direc

tors

Accre

ditati

on P

rogr

am20

01-P

resen

tDi

recto

rNa

rai P

han

Comp

any

Limite

d(D

AP),

1/200

320

00-P

resen

tDi

recto

rSia

m Sy

ntec

Plann

er Co

mpan

y Lim

ited

Thai

Institu

te of

Direc

tors

Asso

ciatio

n

Note

: (1) is

an

autho

rized

dire

ctor,

toge

ther r

equir

ing tw

o dir

ecto

rs sig

ning

jointl

y an

d the

Com

pany

ûs se

al aff

ixed.


51

Perc

entag

e of

Wor

k Ex

perie

nce

(Pas

t 5 Y

ears

)Na

me

/ Pos

ition

Age

Educ

ation

Qua

lifica

tion

Shar

holdi

ngRe

lation

ship

Perio

dPo

sition

Nam

e of

Dep

artm

ent/

(year

s)in

the

Com

pany

/Typ

e of

Bus

iness

Comp

any (

%)

11.

Mr. A

nuko

ol Tu

ntima

s (1)40

-Do

ctor o

f Bus

iness

Adm

inistr

ation

,0.1

3-

2007

-Pres

ent

Direc

tor

Rung

porn

chai

Comp

any

Limite

d-

Direc

tor

Unive

rsity

of So

uth A

ustra

lia, A

ustra

lia20

06-P

resen

tDi

recto

rCH

. Karn

chan

g Pu

blic

Comp

any

Limite

d-

Exec

utive

Com

mitte

e-

Direc

tors

Certi

ficati

on P

rogr

am20

05-P

resen

tMa

nagin

g Pa

rtner

Sang

a Eq

uipme

nt Ltd

., Par

t.(D

CP),

43/20

0420

04-P

resen

tDi

recto

r, Ex

ecuti

ve C

ommi

ttee

Bang

kok

Metro

Pub

lic C

ompa

ny L

imite

dTh

ai Ins

titute

of Di

recto

rs As

socia

tion

2004

-Pres

ent

Direc

tor

Metro

Mall

Dev

elopm

ent L

imite

dDi

recto

rTri

ads

Netw

orks

Com

pany

Lim

ited

Direc

tor

Fah-

amor

n Ma

chine

ry Co

mpan

y Lim

ited

2001

-Pres

ent

Exec

utive

Vice

Pres

ident

of Hu

man

CH. K

arnch

ang

Publi

c Co

mpan

y Lim

ited

Reso

urce

and

Gen

eral A

dmini

strati

onDe

partm

ent

12.

Mr. W

itoon

Hata

iratan

a50

Maste

r of S

cienc

e (B

usine

ss A

dmini

strati

on),

0.08

-20

04-P

resen

tOp

eratio

ns D

irecto

rBa

ngko

k Me

tro P

ublic

Com

pany

Lim

ited

-Op

eratio

ns D

irecto

rCa

liforn

ia Un

iversi

ty of

Penn

sylva

nia, U

.S.A.

2002

-200

4Tra

ffic M

anag

erBa

ngko

k Me

tro P

ublic

Com

pany

Lim

ited

2000

-200

2Ma

nagin

g Di

recto

rGe

ar Ba

ntern

g Co

mpan

y Lim

ited

13.

Miss

Por

npim

ol Ch

irtch

ooch

ai42

Maste

r of A

ccou

nting

,0.0

8-

2004

-Pres

ent

Direc

tor

Metro

Mall

Dev

elopm

ent L

imite

d-

Acco

untin

g an

d Fin

ance

Tham

masa

t Univ

ersity

Direc

tor

BMCL

Netw

ork

Limite

dDi

recto

rDi

recto

rTri

ads

Netw

orks

Com

pany

Lim

ited

2002

-Pres

ent

Direc

tor

Trans

it Ex

pert

Comp

any

Limite

d20

00-P

resen

tAc

coun

ting

and

Finan

ce D

irecto

rBa

ngko

k Me

tro P

ublic

Com

pany

Lim

ited

14.

Mrs.

Tana

won

Sriva

rdha

na47

Bach

elor o

f Acc

ounti

ng,

--

2007

-Pres

ent

Huma

n Re

sour

ces

and

Bang

kok

Metro

Pub

lic C

ompa

ny L

imite

d-

Huma

n Re

sour

ces

and

Chula

longk

orn

Unive

rsity

Admi

nistra

tion

Direc

tor

Admi

nistra

tion

Direc

tor

2005

-200

7Br

anch

Man

ager

TMB

Bank

Pub

lic C

ompa

ny L

imite

d20

01-2

005

SMB

Cente

r Man

ager

TMB

Bank

Pub

lic C

ompa

ny L

imite

d(S

mall a

nd M

edium

Bus

iness

Ente

rpris

eMa

nage

r)

Note

: (1) is

an

autho

rized

dire

ctor,

toge

ther r

equir

ing tw

o dir

ecto

rs sig

ning

jointl

y an

d the

Com

pany

ûs se

al af f

ixed.

52


The Company policy supports and encourages the directors of the Company to attend the director

training courses. All Directors of the Company have attained the director training courses as arranged by the

Thai Institute of Directors Association (IOD), as follows:

Directors The director training courses attended

1. Mr. Plew Trivisvavet - DCP: Directors Certification Program # 50/2004

- DAP: Directors Accreditation Program # 18/2004

- FND: Finance for Non-Finance Director # 13/2004

2. General Chetta Thanajaro - DCP: Directors Certification Program # 33/2003


- Board & CEO Assessment # 2/2003

3. Mr. Vitoon Tejatussanasoontorn - DCP: Directors Certification Program # 2/2000

- IOD Chartered Director # 1/2007

4. Lieutenant General Surat Sumrith - DAP: Directors Accreditation Program # 40/2005


5. Mr. Supong Chayutsahakij - DCP: Directors Certification Program # 8/2001

- ACP: Audit Committee Program # 17/2007

6. Dr. Sombat Kitjalaksana - DCP: Directors Certification Program # 8/2006

- DAP: Directors Accreditation Program # 36/2005


7. Mrs. Nongnutch Thienpaitoon - DAP: Directors Accreditation Program # 41/2005

8. Mr. Kraisi Karnasuta - DCP: Directors Certification Program # 31/2003

- UFS: Understanding the Fundamental of Financial

Statements # 1/2006

9. Mr. Ronnachit Yaemsaard - DAP: Directors Accreditation Program # 35/2005

10. Mr. Somchai Sirilertpanich - DAP: Directors Accreditation Program # 1/2003

11. Dr. Anukool Tuntimas - DCP: Directors Certification Program # 43/2004

- ACP: Audit Committee Program # 20/2007

- UFS: Understanding the Fundamental of Financial

Statements # 12/2007



53

Significant Activities in the Year 2007

BMCL hosted the UITP Asia-Pacific Assembly No. 8/2007 on 21-23 March 2007, which was an internationalpublic transport assembly, with a total of 10 member countries, to share opinions and experiences in respect oftechnology utilization for provision of public transport service among various member countries. The Companyarranged for qualified staff to provide a warm reception to the participants.

Host of the UITP UITP Youth

BMCL convened the ç2007 Annual Ordinary General Meeting ofShareholdersé on 9 April 2007 at the Professor Sangvian IndaravijayaAuditorium, 3rd Floor of The Stock Exchange of Thailand Building.

The 2007 Annual Ordinary General Meeting of Shareholders

� �

�

BMCL convened the Quarter 3/2007 çMeeting of Securities Analystséon 22 November 2007 to provide the analysts with clarifications on thebusiness, operations and results of operations of the Company, as wellas traveling by the metro to visit the retail shop floor at the SukhumvitStation.

The Quarter 3/2007 Meeting of Analysts�

BMCL organized the çCompany Visité project on 30 November 2007in collaboration with the Stock Exchange of Thailand and the ThaiInvestors Association for investorsû visit to the Companyûs operations,luncheon as well as meeting and making inquires with the Companyûsexecutives.

Company Visit�

The Companyûs Significant Activities

21

54


BMCL organized the National Childrenûs Day Event on 14January 2007 at the Phahon Yothin Station, providinginformation on the mass rapid transit system and freejourneys on the metro for children not taller than 120centimeters.

National Childrenûs Day

Warm Reception to Childrenwith Physical Disabilities

BMCL organized the çElders Help Thai Society to Live in Peace andContentmenté for eldersû journeys on the metro and luncheon with the Companyûsexecutives, as well as attending the demonstration of the safety system of themetro stations. This represents a series of activities after the Elders on theMetro Project, on the Auspicious Occasion of His Majesty the Kingûs 80th

Birthday Anniversary, to promote the value and recognition of elders.

Elders Help Thai Society to Live in Peace and Contentment

�

�

�

BMCL organized the çLove Mom Love the World by Inviting Mom to Takethe Metro to Stop Global Warmingé event on the occasion of the NationalMotherûs Day during 12-21 August 2007 to minimize global warming andenergy saving by means of using the metro instead of driving personal cars.Mothers and their children boarding the metro would be entitled to 50%discount.

Love Mom Love the World�

BMCL organized the çReturn the Metro Cards to Protect Environmentécampaign to promote the metro users to return their expired metro cards inorder to reduce the quantity of cards in the system as part of the environmentalprotection. Every card returned at the drop boxes in stations represents Baht10 donation to be contributed monthly to organizations or communities asappropriate.

Return the Metro Cards to Protect Environment�

The Company arranged for a warm reception to childrenwith physical disabilities from Srisangwal School for theValentineûs Day Celebration on 14 February 2007 to attendthe celebration exhibition of çHis Majesty the Kingûs Photosé,including journeys on the metro.

Social and Environmental Activities


55

Route Map of the M.R.T. Chaloem RatchamongkhonLine Project31

56


Related Party TransactionsTr

ansa

ctio

ns w

ith p

erso

ns w

ho m

ay h

ave

conf

lict o

f int

eres

t in

the

year

s 20

06 a

nd 2

007.

Pers

ons/

Juris

ticpe

rson

s wh

o m

ayha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sOp

inion

of t

he A

udit

Com

mitt

eeint

eres

tTr

ansa

ctio

nYe

ar 2

006

Year

200

7

1.CH

. Kar

ncha

ng-

CH. K

arnc

hang

Pub

lic C

ompa

ny L

imite

dTh

e Co

mpa

ny

Publ

ic Co

mpa

nyis

a m

ajor s

hare

holde

r of t

he C

ompa

ny,

-Co

st of

fare

10,83

3,333

.3212

,249,9

99.96

-Th

e Co

mpa

ny h

ired

CH.

-CH

. Kar

ncha

ng P

ublic

Com

pany

Limite

dwi

th 2

4.61%

of s

hare

s in

the

Com

pany

Karn

chan

g Pu

blic

Com

pany

Limite

d is

an e

xper

ience

d an

d

as a

t 20

Mar

ch 2

007.

Limite

d fo

r a to

tal va

lue o

f Bah

tsp

ecial

ised

com

pany

in c

onstr

uctio

n,

-M

ahas

iri Si

am C

ompa

ny L

imite

d is

a85

milli

on, t

o m

aintai

n th

e ex

isting

and

was

also

resp

onsib

le fo

r the

civi

l

majo

r sha

reho

lder o

f the

Com

pany

, with

civil i

nfras

tructu

re w

ork

in th

einf

rastr

uctu

re w

ork

in re

lation

to th

is

6.88%

of s

hare

s in

the

Com

pany

as

atar

ea o

f the

dep

ot fo

r 7 y

ears

from

proje

ct fro

m H

ua L

amph

ong

Stati

on

20 M

arch

200

7, an

d wi

th 2

0.32%

of

1 Ma

rch 2

004

to 2

8 Fe

brua

ry 20

11.

to P

hra

Ram

9 S

tation

. The

hirin

g w a

s

share

s in

CH. K

arnch

ang

Publi

c Co

mpan

yPa

ymen

ts ar

e m

ade

quar

terly.

mad

e in

the

form

of c

ontra

ct an

d

Limite

d as

at 2

1 Se

ptem

ber 2

007.

The

Com

pany

reco

gnise

s th

ese

paym

ents

are

mad

e ac

cord

ing to

the

-M

r. Pl

ew Tr

ivisv

avet,

an

exec

utive

-Co

nstru

ction

and

3,923

,333.3

44,4

58,33

3.34

main

tenan

ce c

osts

as c

ost o

f far

eter

ms

of th

e co

ntra

ct.

direc

tor a

nd in

the

man

agem

ent o

f CH.

othe

r pay

ables

after

the

com

men

cem

ent o

f-

Bena

im (U

K) L

imite

d, an

eng

ineer

ing

Karn

chan

g Pu

blic

Com

pany

Lim

ited,

isop

erati

ons.

cons

ultan

t of t

he s

yndic

ated

lende

rs,

the

Chair

man

of t

he B

oard

of D

irecto

rsop

ined

that

the

cons

tructi

on a

nd

and

the

Chair

man

of t

he E

xecu

tive

main

tenan

ce c

osts

are

reas

onab

le.

Com

mitt

ee o

f the

Com

pany

.

-Dr

. Som

bat K

itjalak

sana

, a d

irecto

r,

exec

utive

Com

mitt

ee a

nd M

anag

ing

Direc

tor o

f the

Com

pany

, and

Dr.

Anuk

ool

Tunti

mas,

a dir

ecto

r and

exe

cutiv

e

Com

mitt

ee o

f the

Com

pany

, are

also

in

the

man

agem

ent o

f CH.

Kar

ncha

ng

Publi

c Co

mpa

ny L

imite

d.

41


57

Pers

ons/

Juris

ticpe

rson

s wh

o m

ayha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sOp

inion

of t

he A

udit

Com

mitt

eeint

eres

tTr

ansa

ctio

nYe

ar 2

006

Year

200

7

1.CH

. Kar

ncha

ng-

CH. K

arnc

hang

Pub

lic C

ompa

ny L

imite

dTh

e Co

mpa

ny

Publ

ic Co

mpa

nyis

a m

ajor s

hare

holde

r of t

he C

ompa

ny,

-Ad

mini

strati

ve27

,000.0

094

,250.0

0-

In th

e ye

ar 2

006,

the

Com

pany

-Th

ese

were

urg

ent w

orks

in re

spec

t of

Limite

dwi

th 2

4.61%

of s

hare

s in

the

Com

pany

expe

nses

paid

Baht

27,0

00 fo

r rep

air o

f the

which

CH.

Kar

ncha

ng P

ublic

Com

pany

(Con

tinue

d)as

at 2

0 M

arch

200

7.(o

ther

repa

ir an

dwa

ter p

ipes

unde

r the

buil

ding,

and

Limite

d be

cam

e fam

iliar w

ith th

e ar

eas

-M

ahas

iri Si

am C

ompa

ny L

imite

d is

am

ainten

ance

in th

e ye

ar 2

007,

the

Com

pany

and

was

capa

ble o

f coo

rdina

ting

and

majo

r sha

reho

lder o

f the

Com

pany

, with

costs

)pa

id Ba

ht 16

,500

for e

quipm

ent f

orco

mple

ting

the

work

s in

time.

6.88%

of s

hares

in th

e Co

mpan

y as

at 2

0ins

tallat

ion o

f wind

ows

on 3

rd F

loor

Mar

ch 2

007,

and

with

20.3

2% o

f sha

res

at De

pot,

Baht

70,9

50 fo

r rep

air o

f

in CH

. Kar

ncha

ng P

ublic

Com

pany

PVC

drain

age,

total

ing 7

poin

ts,

Limite

d as

at 2

1 Se

ptem

ber 2

007.

unde

r the

Dep

ot S

lab a

nd B

aht

-M

r. Pl

ew Tr

ivisv

avet,

an

exec

utive

dire

ctor

6,800

for m

ateria

ls to

geth

er w

ith

and

in the

man

agem

ent o

f CH.

Karn

chan

glab

or fo

r rep

air o

f net

fence

at

Publi

c Co

mpa

ny L

imite

d, is

the

Chair

man

Depo

t.

of th

e Bo

ard

of D

irecto

rs an

d th

e

Chair

man

of t

he E

xecu

tive

Com

mitt

ee o

f

the

Com

pany

.

-Dr

. Som

bat K

itjalak

sana

, a d

irecto

r,

exec

utive

Com

mitt

ee a

nd M

anag

ing

Direc

tor o

f the

Com

pany

, and

Dr.

Anuk

ool

Tunt

imas

, a d

irecto

r and

exe

cutiv

e

Com

mitt

ee o

f the

Com

pany

, are

also

in

the

man

agem

ent o

f CH.

Kar

ncha

ng

Publi

c Co

mpa

ny L

imite

d.

58


Pers

ons/

Juris

ticpe

rson

s wh

o m

ayha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sOp

inion

of t

he A

udit

Com

mitt

eeint

eres

tTr

ansa

ctio

nYe

ar 2

006

Year

200

7

1.CH

. Kar

ncha

ng-

CH. K

arnc

hang

Pub

lic C

ompa

ny L

imite

d-

Long

-term

loan

s1,0

03,09

0,793

.341,0

03,09

0,793

.34-

The

Com

pany

ent

ered

into

loan

-Th

e tra

nsac

tions

are

in a

ccor

danc

e

Publ

ic Co

mpa

nyis

a m

ajor s

hare

holde

r of t

he C

ompa

ny,

agre

emen

ts wi

th C

H. K

arnc

hang

with

the

Spon

sor S

uppo

rt Ag

reem

ent.

Limite

dwi

th 2

4.61%

of s

hare

s in

the

Com

pany

-Ac

crue

d int

eres

t62

,062,3

18.61

141,7

56,50

8.06

Publi

c Co

mpa

ny L

imite

d in

the

The

intere

st rat

e an

d ter

ms o

f pay

ment

(Con

tinue

d)as

at 2

0 M

arch

200

7.ye

ar 2

005

in th

e to

tal a

mou

nt o

far

e in

acco

rdan

ce w

ith th

e co

nditio

ns

-M

ahas

iri Si

am C

ompa

ny L

imite

d is

a-

Intere

st ex

pens

es11

5,290

,106.3

279

,694,1

89.45

Baht

1,40

3 m

illion

, and

in th

e 9-

as s

pecif

ied b

y th

e sy

ndica

ted le

nder

s.

majo

r sha

reho

lder o

f the

Com

pany

, with

(aris

ing fr

om th

em

onth

per

iod in

the

year

200

6 in

6.88%

of s

hare

s in

the

Com

pany

as

atCo

mpa

nyûs

the

total

am

ount

of B

aht 5

12

20 M

arch

200

7, an

d wi

th 2

0.32%

of

borro

wing

of

milli

on. T

hese

loan

s we

re

share

s in

CH. K

arnch

ang

Publi

c Co

mpan

yloa

ns fr

om C

H.su

bord

inated

and

inter

est w

as

Limite

d as

at 2

1 Se

ptem

ber 2

007.

Karn

chan

g Pu

blic

char

ged

at th

e ra

te of

MLR

+0.5%

-M

r. Pl

ew Tr

ivisv

avet,

an

exec

utive

dire

ctor

Comp

any

Limite

dpe

r ann

um, t

o fin

ance

the

w ork

ing

and

in the

man

agem

ent o

f CH.

Karn

chan

gas

spo

nsor

capit

al. T

he p

rincip

al an

d int

eres

t

Publi

c Co

mpa

ny L

imite

d, is

the

Chair

man

supp

ort)

are

due

and

paya

ble w

hen

the

of th

e Bo

ard

of D

irecto

rs an

d th

eCo

mpa

ny c

omple

tely

mak

es

Chair

man

of t

he E

xecu

tive

Com

mitt

eerep

ayme

nt of

loans

und

er the

main

of th

e Co

mpa

ny.

agre

emen

t or w

hen

the

Com

pany

-Dr

. Som

bat K

itjalak

sana

, a d

irecto

r,ha

s ex

cess

cas

h. Ho

weve

r, th

e

exec

utive

Com

mitt

ee a

nd M

anag

ingCo

mpa

ny m

ade

a pa

rtial

Direc

tor o

f the

Com

pany

, and

Dr.

Anuk

ool

repa

ymen

t of l

oans

in th

e am

ount

Tunti

mas,

a dir

ecto

r and

exe

cutiv

eof

Bah

t 911

.91 m

illion

and

the

Com

mitt

ee o

f the

Com

pany

, are

also

inac

crue

d int

eres

t in

the

amou

nt o

f

the

man

agem

ent o

f CH.

Kar

ncha

ngBa

ht 8

9.98

milli

on in

Sep

tembe

r

Publi

c Co

mpa

ny L

imite

d.20

06.


59

Pers

ons/

Juris

ticpe

rson

s wh

o m

ayha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sOp

inion

of t

he A

udit

Com

mitt

eeint

eres

tTr

ansa

ctio

nYe

ar 2

006

Year

200

71.

CH. K

arnc

hang

-CH

. Kar

ncha

ng P

ublic

Com

pany

Lim

ited

Metr

o M

allPu

blic

Com

pany

is a

majo

r sha

reho

lder o

f the

Com

pany

,De

velop

men

t

Limite

dwi

th 2

4.61%

of s

hare

s in

the

Com

pany

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d(C

ontin

ued)

as a

t 20

Mar

ch 2

007.

-W

ork

unde

r23

8,134

,690.5

627

7,553

,965.7

9-

Metr

o M

all D

evelo

pmen

t Lim

ited

-Th

e co

ntra

ct wa

s m

ade

with

clea

r-

Mah

asiri

Siam

Com

pany

Lim

ited

is a

cons

tructi

onhir

ed C

H. K

arnc

hang

Pub

licter

ms

of p

aym

ent.

majo

r sha

reho

lder o

f the

Com

pany

, with

(Pro

ject c

ost)

Com

pany

Lim

ited

for a

pro

ject

-CH

. Kar

ncha

ng P

ublic

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pany

6.88%

of s

hare

s in

the

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pany

as

at-

Cons

tructi

on24

2,038

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625

5,404

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3va

lue o

f Bah

t 292

.5 m

illion

toLim

ited

is an

exp

erien

ced

and

20 M

arch

200

7, an

d wi

th 2

0.32%

of

paya

bles

cons

truct

the

inter

ior o

f the

train

spec

ialise

d co

mpa

ny in

this

type

of

share

s in

CH. K

arnch

ang

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c Co

mpan

y-

Adva

nce

paym

ent

2,262

,045.7

0-

statio

ns to

sup

port

the

lease

of

work

and

was

also

resp

onsib

le fo

r the

Limite

d as

at 2

1 Se

ptem

ber 2

007.

for c

onstr

uctio

nre

tail s

hops

. How

ever

, sinc

e M

etro

civil i

nfras

tructu

re w

ork

in re

lation

to-

Mr.

Plew

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svav

et, a

n ex

ecut

ive d

irecto

r-

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tructi

on67

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80.92

12,36

5,489

.93M

all D

evelo

pmen

t Lim

ited

has

each

train

stat

ion. C

H. K

arnc

hang

and

in the

man

agem

ent o

f CH.

Karn

chan

gco

stins

uffici

ent r

even

ue fr

om c

omme

rcial

Publi

c Co

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ny L

imite

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sPu

blic

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pany

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ited,

is th

e Ch

airm

an-

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est

20,30

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deve

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ent,

it is

not y

et ab

le to

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mati

on o

f elec

tric

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ms

and

of th

e Bo

ard

of D

irecto

rs an

d th

eex

pens

espa

y th

e co

nstru

ction

cos

t. CH

.civ

il wor

k, wh

ich w

ould

enha

nce

the

Chair

man

of t

he E

xecu

tive

Com

mitt

ee-

Accr

ued

inter

est

37,50

5,203

.2958

,341,7

97.57

Karnc

hang

Pub

lic C

ompa

ny L

imite

def

ficien

cy in

con

struc

tion

of s

uch

of th

e Co

mpa

ny.

(aris

ing fr

omha

s ch

arged

inter

est t

o Me

tro M

allpr

oject

.-

Dr. S

omba

t Kitja

laksa

na, a

dire

ctor,

hiring

CH.

Deve

lopm

ent L

imite

d at

the

rate

-A

mem

oran

dum

of a

gree

men

t, da

ted 3

exec

utive

Com

mitt

ee a

nd M

anag

ingKa

rncha

ng P

ublic

of M

LR+1

% p

er a

nnum

.Ju

ne 2

005,

was

exec

uted

am

endin

gDi

recto

r of t

he C

ompa

ny, a

nd D

r. An

ukoo

lCo

mpan

y Lim

ited

-Ap

prov

al fro

m th

e M

RTA

isth

e or

igina

l con

tract

stipu

lating

cer

tain

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mas,

a dir

ecto

r and

exe

cutiv

eto

car

ry ou

tre

quire

d fo

r suc

h co

nstru

ction

, inco

nditio

ns a

nd th

e int

eres

t rate

aris

ingCo

mm

ittee

of t

he C

ompa

ny, a

re a

lso in

cons

tructi

on)

relat

ion to

safe

ty.fro

m th

e de

lay in

pay

men

t by

Metr

o

the

man

agem

ent o

f CH.

Kar

ncha

ngMa

ll Dev

elopm

ent L

imite

d. Th

e int

erest

Publi

c Co

mpa

ny L

imite

d.ra

te ch

arge

d by

CH.

Kar

ncha

ng P

ublic

Com

pany

Lim

ited

is in

line

with

the

rate

that

CH. K

arnc

hang

Pub

licCo

mpa

ny L

imite

d ch

arge

s ot

her

custo

mer

s an

d clo

se to

the

rate

that

Metr

o M

all D

evelo

pmen

t Lim

ited

may

borro

w fro

m c

omm

ercia

l ban

ks.

60


Pers

ons/

Juris

ticpe

rson

s wh

o m

ayha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sOp

inion

of t

he A

udit

Com

mitt

eeint

eres

tTr

ansa

ctio

nYe

ar 2

006

Year

200

71.

CH. K

arnc

hang

-CH

. Kar

ncha

ng P

ublic

Com

pany

Lim

ited

Metr

o M

allPu

blic

Com

pany

is a

majo

r sha

reho

lder o

f the

Com

pany

,De

velop

men

tLim

ited

with

24.6

1% o

f sha

res

in th

e Co

mpa

nyLim

ited

(Con

tinue

d)as

at 2

0 M

arch

200

7.-

Sellin

g an

d-

234,7

59.66

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rmerl

y, Me

tro M

all D

evelo

pmen

t Lim

ited

-Th

is re

ntal

rate

is co

mpa

rable

-M

ahas

iri Si

am C

ompa

ny L

imite

d is

aad

mini

strati

veen

tered

into

an o

ffice

spac

e lea

se a

ndto

the

rent

al ra

tes c

harg

ed b

ym

ajor s

hare

holde

r of t

he C

ompa

ny, w

ithex

pens

esse

rvice

agr

eem

ent o

n th

e 12

th F

loor,

the le

ssor

to th

ird p

arty

lesse

es,

6.88%

of s

hare

s in

the

Com

pany

as

at(a

rising

from

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Viriya

thav

orn

Build

ing, w

ith C

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ffice

which

ran

ge B

aht 2

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7020

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ch 2

007,

and

with

20.3

2% o

fre

ntal

of o

ffice

Towe

r Co.,

Ltd

., how

ever

, on

1 No

vem

ber

per s

quar

e m

etre.

share

s in

CH. K

arnch

ang

Publi

c Co

mpan

ysp

ace

and

publi

c20

07, C

H. K

arnc

hang

Pub

lic C

ompa

nyLim

ited

as a

t 21

Sept

embe

r 200

7.uti

lities

exp

ense

s)Lim

ited

purc

hase

d su

ch b

uildin

g fro

m-

Mr. P

lew Tr

ivisv

avet,

an

exec

utive

dire

ctor

CK. O

ffice

Towe

r Co.,

Ltd

., Metr

o M

allan

d in

the

man

agem

ent o

f CH.

Deve

lopm

ent L

imite

d th

en e

nter

ed in

to a

Karn

chan

g Pu

blic

Com

pany

Lim

ited,

isne

w lea

se a

gree

ment

with

CH. K

arnch

ang

the

Chair

man

of t

he B

oard

of D

irecto

rsPu

blic

Comp

any L

imite

d sin

ce 1

Nov

embe

ran

d th

e Ch

airm

an o

f the

Exe

cutiv

e20

07 -

9 Fe

brua

ry 20

10, c

over

ing a

total

Com

mitt

ee o

f the

Com

pany

.ar

ea o

f 321

.24 s

quar

e m

etres

. The

rent

al-

Dr. S

omba

t Kitja

laksa

na, a

dire

ctor,

and

servi

ce c

harg

e ra

te is

Baht

320

per

exec

utive

Com

mitt

ee a

nd M

anag

ingsq

uare

metr

e pe

r mon

th.

Direc

tor o

f the

Com

pany

, and

Dr.

Anuk

ool

BMCL

Netw

ork

Tunt

imas

, a d

irecto

r and

exe

cutiv

eLim

ited

Com

mitt

ee o

f the

Com

pany

, are

also

in-

Cons

tructi

on a

nd-

41,61

0.77

-Fo

rmer

ly, B

MCL

Netw

ork

Limite

d en

tered

-Th

is re

ntal

rate

is co

mpa

rable

the

man

agem

ent o

f CH.

Kar

ncha

ngot

her p

ayab

lesint

o an

offic

e sp

ace

lease

and

ser

vice

to th

e re

ntal

rates

cha

rged

by

Publi

c Co

mpa

ny L

imite

d.-

Sellin

g an

d-

261,4

63.54

agre

emen

t on

the

12th F

loor,

Viriya

thav

orn

the le

ssor

to th

ird p

arty

lesse

es,

adm

inistr

ative

Build

ing, w

ith C

K. Of

fice

Towe

r Co.,

Ltd

.,wh

ich ra

nge

Baht

270

-370

per

expe

nses

howe

ver,

on 1

Nov

embe

r 200

7, CH

.sq

uare

metr

e.(a

rising

from

the

Karnc

hang

Pub

lic C

ompa

ny L

imite

dre

ntal

of o

ffice

purc

hase

d su

ch b

uildin

g fro

m C

K. O

f fice

spac

e an

d pu

blic

Towe

r Co.,

Ltd

., BM

CL N

etwor

k Lim

ited

utilit

iesth

en e

nter

ed in

to a

new

leas

e ag

reem

ent

expe

nses

)wi

th C

H. K

arnch

ang

Publi

c Co

mpan

yLim

ited

since

1 N

ovem

ber 2

007

- 9Fe

brua

ry 20

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overi

ng a

total

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uare

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he re

ntal

and

servi

cech

arge

rate

is Ba

ht 3

20 p

er s

quar

e me

trepe

r mon

th.


61

Pers

ons/

Juris

ticpe

rson

s wh

o m

ayha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sOp

inion

of t

he A

udit

Com

mitt

eeint

eres

tTr

ansa

ctio

nYe

ar 2

006

Year

200

7

1.CH

. Kar

ncha

ng-

CH. K

arnc

hang

Pub

lic C

ompa

ny L

imite

dTri

ads

Netw

orks

Publ

ic Co

mpa

nyis

a m

ajor s

hare

holde

r of t

he C

ompa

ny,

Com

pany

Lim

ited

Limite

dwi

th 2

4.61%

of s

hare

s in

the

Com

pany

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nstru

ction

and

-92

,742.7

7-

Form

erly,

Triad

s Ne

twor

ks C

ompa

ny-

This

rent

al ra

te is

com

para

ble

(Con

tinue

d)as

at 2

0 M

arch

200

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her p

ayab

lesLim

ited

enter

ed in

to a

n off

ice s

pace

leas

eto

the

rent

al ra

tes c

harg

ed b

y

-M

ahas

iri Si

am C

ompa

ny L

imite

d is

a-

Sellin

g an

d-

358,3

16.94

and

servi

ce a

gree

men

t on

the

9th F

loor,

the le

ssor

to th

ird p

arty

lesse

es,

majo

r sha

reho

lder o

f the

Com

pany

, with

adm

inistr

ative

Viriya

thav

orn

Build

ing, w

ith C

K. O

ffice

which

rang

e Ba

ht 2

70-3

70 p

er

6.88%

of s

hares

in th

e Co

mpan

y as

at 2

0ex

pens

esTo

wer C

o., L

td., h

owev

er, o

n 1

Nove

mbe

rsq

uare

metr

e.

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ch 2

007,

and

with

20.3

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f sha

res

(aris

ing fr

om th

e20

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H. K

arnc

hang

Pub

lic C

ompa

ny

in CH

. Kar

ncha

ng P

ublic

Com

pany

rent

al of

offic

eLim

ited

purch

ased

suc

h bu

ilding

from

CK.

Limite

d as

at 2

1 Se

ptem

ber 2

007.

spac

e an

d pu

blic

Offic

e To

wer C

o., L

td., T

riads

Netw

orks

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. Plew

Trivi

svav

et, a

n ex

ecuti

ve d

irecto

ruti

lities

exp

ense

s)Co

mpan

y Lim

ited

then

enter

ed in

to a

new

and

in the

man

agem

ent o

f CH.

Karn

chan

glea

se a

gree

men

t with

CH.

Kar

ncha

ng

Publi

c Co

mpan

y Lim

ited,

is th

e Ch

airma

nPu

blic

Com

pany

Lim

ited

since

1

of th

e Bo

ard

of D

irecto

rs an

d th

eNo

vem

ber 2

007

- 31

May

201

0, co

v erin

g

Chair

man

of t

he E

xecu

tive

Com

mitt

eea

total

are

a of

461

.76 s

quar

e m

etres

. The

of th

e Co

mpa

ny.

rent

al an

d se

rvice

cha

rge

rate

is Ba

ht

-Dr

. Som

bat K

itjalak

sana

, a d

irecto

r,35

0 pe

r squ

are

metr

e pe

r mon

th.

exec

utive

Com

mitt

ee a

nd M

anag

ing

Direc

tor o

f the

Com

pany

, and

Dr.

Anuk

ool

Tunt

imas

, a d

irecto

r and

exe

cutiv

e

Com

mitt

ee o

f the

Com

pany

, are

also

in

the

man

agem

ent o

f CH.

Kar

ncha

ng

Publi

c Co

mpa

ny L

imite

d.

62


Pers

ons/

Juris

ticpe

rson

s wh

o m

ayOp

inion

of t

heha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sAu

dit C

omm

ittee

inter

est

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sact

ion

Year

200

6Ye

ar 2

007

2.CK

. Offi

ce-

CK. O

ffice

Towe

r Co.,

Ltd

. is a

nM

etro

Mall

Towe

r Co.

, Ltd

.as

socia

ted c

ompa

ny w

ith c

omm

onDe

velop

men

tdir

ecto

rs.Lim

ited

-CK

. Offic

e To

wer C

o., L

td. h

as in

teres

ts-

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tructi

on a

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ent L

imite

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tered

into

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is ren

tal ra

te is

in th

e Co

mpa

ny th

roug

h its

5.19

%ot

her p

ayab

lesan

offic

e sp

ace

lease

and

ser

vice

agre

emen

tco

mpara

ble to

the

rent

alho

lding

of s

hare

s in

CH. K

arnc

hang

on th

e 1st F

loor,

Viriya

thavo

rn B

uildin

g, co

verin

gra

tes c

harg

ed b

y th

ePu

blic

Com

pany

Lim

ited

as a

t 21

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lling

and

1,890

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11,3

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a to

tal a

rea

of 3

49.63

squ

are

metr

es, f

or a

lesso

r to

third

par

ty les

sees

,Se

ptem

ber 2

007.

adm

inistr

ative

perio

d of

3 y

ears,

from

1 F

ebru

ary

2004

unt

ilwh

ich ra

nge

Baht

270

-370

-Th

e m

ajor s

hare

holde

rs of

CK.

Offic

eex

pens

es31

Jan

uary

2007

. The

rent

al an

d se

rvice

per s

quar

e m

etre.

Towe

r Co.,

Ltd

. (as

at 3

1 De

cem

ber 2

007)

(aris

ing fr

om th

ech

arge

rate

is Ba

ht 3

40 p

er s

quar

e m

etre

per

are

Mah

asiri

Siam

Com

pany

Lim

ited

and

rent

al of

offic

em

onth

, and

mov

ed to

the

12th F

loor s

ince

10th

e Tri

visva

vet F

amily

, hold

ing 2

5% a

ndsp

ace

and

publi

cFe

brua

ry 20

07 -

9 Fe

brua

ry 20

10, c

overi

ng a

n75

% in

CK.

Offic

e To

wer C

o., L

td.,

utiliti

es e

xpen

ses)

area

of 32

1.24

squa

re me

tres.

The

rent

al an

dre

spec

tively

.se

rvice

cha

rge

rate

is Ba

ht 3

20 p

er s

quar

e-

Mr.

Plew

Trivi

svav

et, a

dire

ctor o

f CK.

metre

per

mon

th. A

fter 1

Nov

embe

r 200

7, CH

.Of

fice

Towe

r Co.,

Ltd

., is

the

Chair

man

of

Karn

chan

g Pu

blic

Comp

any

Limite

d pu

rchas

edth

e Bo

ard

of D

irecto

rs an

d th

e Ch

airm

ansu

ch b

uildin

g fro

m C

K. O

ffice

Towe

r Co.,

Ltd

.,of

the

Exec

utive

Com

mitt

ee o

f the

ther

eby

chan

ging

a co

ntra

ctual

par ty

to C

H.Co

mpa

ny.

Karn

chan

g Pu

blic

Com

pany

Lim

ited.

BMCL

Netw

ork

Limite

d-

Sellin

g an

d2,8

64,40

5.88

1,513

,935.6

4-

BMCL

Netw

ork

Limite

d en

tered

into

an

offic

e-

This

rental

rate

isad

mini

strati

vesp

ace

lease

and

serv

ice a

gree

ment

on th

e 12

thco

mpara

ble to

the

rent

alex

pens

esFlo

or, V

iriyath

avor

n Bu

ilding

, cov

ering

a to

talrat

es c

harg

ed b

y the

less

orar

ea o

f 651

.24 s

quar

e m

etres

, for

a p

eriod

of

to o

ther

less

ees.

-Ad

vanc

e re

ntal

208,6

36.50

-3

years

, fro

m 16

Jan

uary

2004

unti

l 15

Janu

arypa

ymen

t20

07. T

he re

ntal a

nd s

ervice

cha

rge

rate

isBa

ht 32

0 pe

r squ

are

metr

e pe

r mon

th. I

nad

dition

, in

the

year

200

7, th

e lea

sed

spac

ear

ea w

as re

duce

d to

330

squa

re me

tres,

for a

perio

d of

3 y

ears,

from

10

Febr

uary

2007

- 9

Febr

uary

2010

. The

rent

al an

d se

rvice

cha

rge

rate

is Ba

ht 3

20 p

er s

quar

e m

etre

per m

onth

.Af

ter 1

Nov

embe

r 200

7, CH

. Karn

chan

g P u

blic

Com

pany

Lim

ited

purc

hase

d su

ch b

uildin

gfro

m C

K. O

ffice

Towe

r Co.,

Ltd

., the

reby

chan

ging

a co

ntrac

tual p

arty

to C

H. K

arnch

ang

Publi

c Co

mpa

ny L

imite

d.


63

Pers

ons/

Juris

ticpe

rson

s wh

o m

ayOp

inion

of t

heha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sAu

dit C

omm

ittee

inter

est

Tran

sact

ion

Year

200

6Ye

ar 2

007

2.CK

. Offi

ce-

CK. O

ffice

Towe

r Co.,

Ltd

. is a

n as

socia

tedTri

ads

Netw

orks

Towe

r Co.

, Ltd

.co

mpa

ny w

ith c

omm

on d

irecto

rs.Co

mpa

ny L

imite

d

(Con

tinue

d)-

CK. O

ffice

Towe

r Co.,

Ltd

. has

inter

ests

in-

Sellin

g an

d1,9

02,08

8.29

1,786

,142.1

0-

Triad

s Ne

twor

ks C

ompa

ny L

imite

d en

tered

-Th

is re

ntal

rate

is

the

Com

pany

thro

ugh

its 5

.19%

hold

ingad

mini

strati

veint

o an

offic

e sp

ace

lease

and

ser

vice

com

para

ble to

the

rent

al

of s

hare

s in

CH. K

arnc

hang

Pub

licex

pens

esag

reem

ent o

n th

e 9t

h Flo

or, V

iriyath

avor

nra

tes c

harg

ed b

y th

e

Com

pany

Lim

ited

as a

t 21

Sept

embe

r-

Cons

tructi

on a

nd15

,311.3

7-

Build

ing, c

over

ing a

total

are

a of

461

.76les

sor t

o ot

her l

esse

es.

2007

.ot

her p

ayab

lessq

uare

metr

es, f

or a

per

iod o

f 3 y

ears,

from

-Th

e m

ajor s

hare

holde

rs of

CK.

Offic

e(a

rising

from

the

1 Ju

ne 2

004

until

31 M

ay 2

007.

The

rental

and

Towe

r Co.,

Ltd

. (as

at 3

1 De

cemb

er 2

007)

rent

al of

offic

ese

rvice

cha

rge

rate

is Ba

ht 3

00 p

er s

quar

e

are

Mah

asiri

Siam

Com

pany

Lim

ited

and

spac

e an

d pu

blic

metr

e pe

r mon

th. U

pon

expir

ation

of t

he

the

Trivis

vave

t Fam

ily, h

olding

25%

and

utiliti

es e

xpen

ses)

agre

emen

t, Tri

ads

Netw

orks

Com

pany

Lim

ited

75%

in C

K. O

ffice

Towe

r Co.,

Ltd

.,re

newe

d th

e ag

reem

ent,

for a

per

iod o

f 3

resp

ectiv

ely.

year

s, fro

m 1

Jun

e 20

07 -

31 M

ay 2

010.

The

-M

r. Pl

ew Tr

ivisv

avet,

a d

irecto

r of C

K.ren

tal a

nd s

ervice

cha

rge

rate

is Ba

ht 35

0 pe

r

Offic

e To

wer C

o., L

td., i

s th

e Ch

airm

an o

fsq

uare

metr

e pe

r mon

th. A

fter 1

Nov

embe

r

the

Boar

d of

Dire

ctors

and

the

Chair

man

2007

, CH.

Kar

ncha

ng P

ublic

Com

pany

Lim

ited

of th

e Ex

ecut

ive C

omm

ittee

of t

hepu

rcha

sed

such

buil

ding

from

CK.

Of fic

e

Com

pany

.To

wer C

o., L

td., t

hereb

y ch

angin

g a

contr

actua

l

party

to C

H. K

arnc

hang

Pub

lic C

ompa

ny

Limite

d.

64


Pers

ons/

Juris

ticpe

rson

s wh

o m

ayOp

inion

of t

heha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sAu

dit C

omm

ittee

inter

est

Tran

sact

ion

Year

200

6Ye

ar 2

007

3.Jo

int V

entu

re-

Joint

Ven

ture

CKE

T is

an a

ssoc

iated

The

Com

pany

CKET

com

pany

.-

Cost

of fa

re43

,000,0

00.00

36,00

0,000

.00-

The

Comp

any

hired

Join

t Ven

ture

CKET

,-Th

e tra

nsac

tions

are

in ac

cord

ance

-Jo

int V

entu

re C

KET

is a

joint

vent

ure

for a

total

value

of B

aht 2

,275.2

2 mi

llion,

with

the

cond

itions

of t

hebe

twee

n CH

. Kar

ncha

ng P

ublic

Com

pany

as p

rojec

t man

ager

to o

verse

e th

eCo

nces

sion

Agre

emen

t whic

hLim

ited

and

Expe

rt Tra

nspo

rt Co

mpa

nyde

sign,

supp

ly, in

stalla

tion

and

testin

gre

quire

s th

e Co

mpa

ny to

app

oint

Limite

d at

80%

and

20%

, res

pecti

vely.

of th

e M

&E E

quipm

ent a

nd th

e tra

inCH

. Kar

ncha

ng P

ublic

Com

pany

-CH

. Kar

ncha

ng P

ublic

Com

pany

Lim

ited

oper

ation

s, an

d to

con

tinua

lly o

verse

eLim

ited,

an a

ffiliat

ed c

ompa

ny, o

rho

lds 2

4.61%

of s

hare

s in

the

Com

pany

.su

ch a

ctivit

ies fo

r a p

eriod

of t

he fi

rstan

y ot

her p

arty,

as

proje

ct-

Mah

asiri

Siam

Com

pany

Lim

ited,

a m

ajor

5 ye

ars

after

the

comm

ence

ment

of t

hem

anag

er, s

ubjec

t to

appr

oval

shar

ehold

er o

f the

Com

pany

, hold

s 90

%tra

in se

rvice

s. Th

e co

ntra

ct ter

m w

illfro

m th

e M

RTA.

of s

hare

s in

Expe

rt Tra

nspo

rt Co

mpa

nyex

pire

in Ju

ly 20

09. P

aym

ents

are

due

-Th

e tra

nsac

tions

are

in th

eLim

ited.

and

paya

ble m

onth

ly. T

he C

ompa

nyor

dinary

cou

rse o

f bus

iness

with

-M

r. Pl

ew Tr

ivisv

avet,

a d

irecto

r of J

oint

reco

gnise

s th

ese

ongo

ing c

osts

as c

ost

paym

ents

mad

e pu

rsuan

t to

the

Vent

ure

CKET

, is th

e Ch

airm

an o

f the

of fa

re a

fter t

he c

omm

ence

men

t of t

heter

ms

of th

e re

levan

t con

tract.

Boar

d of

Dire

ctors

and

the

Chair

man

of

train

servi

ces.

-Jo

int V

entur

e CK

ET h

as b

oth

Thai

the E

xecu

tive

Comm

ittee

of the

Com

pany

.an

d for

eign

teams

with

exp

erien

cean

d ex

perti

se in

eng

ineer

ingwo

rks, c

ontra

ct do

cume

nts, w

hich

ensu

re th

at all

con

tracto

rs of

the

Com

pany

sha

ll com

ply w

ith th

eco

ntra

ct.4.

Expe

rt Tr

ansp

ort

-Ex

pert

Trans

port

Com

pany

Lim

ited

is an

The

Com

pany

Com

pany

asso

ciated

com

pany

with

com

mon

-Ad

mini

strati

ve75

,700.9

350

,000.0

0-

The

Com

pany

paid

acc

omm

odati

on-

This

acco

mm

odati

on ra

te is

Limite

ddir

ecto

rs.ex

pens

esfee

for t

he m

ass

med

ia se

mina

r for

com

para

ble to

the

-Ma

hasir

i Siam

Com

pany

Lim

ited,

as m

ajor

the

year

200

6 in

the

amou

nt o

f Bah

tac

com

mod

ation

rate

char

ged

shar

ehold

er o

f the

Com

pany

and

CH.

75,70

0.93.

In th

e ye

ar 2

007,

the

to o

ther

trad

ers.

Karn

chan

g Pu

blic

Com

pany

Lim

ited

(as

Com

pany

also

con

tribu

ted B

aht 5

0,000

at 31

Dec

embe

r 200

7), h

olds

90%

of

via E

xper

t Tra

nspo

rt Co

mpa

ny L

imite

dsh

ares

in E

xper

t Tra

nspo

rt Co

mpa

nyto

sch

ools

in ne

ed in

Ray

ong

Prov

ince.

Limite

d, wh

ile th

e re

main

ing 8

.02%

ishe

ld by

the

Trivis

vave

t Fam

ily.

-M

r. Pl

ew Tr

ivisv

avet,

a d

irecto

r of E

xper

tTra

nspo

rt Co

mpa

ny L

imite

d, is

the

Chair

man

of t

he B

oard

of D

irecto

rs an

dth

e Ch

airma

n of

the

Exec

utiv e

Com

mitte

eof

the

Com

pany

.


65

Pers

ons/

Juris

ticpe

rson

s wh

o m

ayOp

inion

of t

heha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sAu

dit C

omm

ittee

inter

est

Tran

sact

ion

Year

200

6Ye

ar 2

007

5.Kr

ung

Thai

Bank

-Kr

ung

Thai

Bank

Pub

lic C

ompa

nyTh

e Co

mpa

ny

Publ

ic Co

mpa

nyLim

ited

holds

3.94

% o

f sha

res

in th

e-

Acco

unts

541,7

51.70

--

In th

e ye

ar 2

006,

this

repr

esen

ts a

colle

ction

-Th

is is

a tra

nsac

tion

in th

e

Limite

dCo

mpa

ny a

s at

20 M

arch

200

7.re

ceiva

ble a

ndof

fee

for i

nstal

lation

of t

he c

over

s fo

r the

ordin

ary c

ourse

of b

usine

ss

-M

rs. N

ongn

utch

Thie

npait

oon,

anac

crue

d inc

ome

auto

mati

c tel

ler m

achin

es.

and

the

price

was

at t

he

exec

utive

of K

rung

Tha

i Ban

k Pu

blic

same

rate

as ap

plied

to ot

her

Com

pany

Lim

ited,

is a

direc

tor o

f the

custo

mer

s.

Com

pany

.-

Fixed

dep

osit

400,0

00,00

0.00

--

In th

e ye

ar 2

006

- thr

ee-m

onth

fixe

d de

posit

-Th

e ter

ms

are

in th

e

of Ba

ht 20

0 mi

llion,

with

intere

st rat

e of

4.75%

;or

dinary

cou

rse o

f bus

iness

-Int

eres

t inc

ome

896,5

75.34

8,852

,944.2

8six

-mon

th fi

xed

depo

sit o

f Bah

t 100

milli

on,

unde

r whic

h co

mm

ercia

l

with

inter

est r

ate o

f 4.75

%; a

nd tw

elve-

month

bank

s ap

ply to

gen

eral

fixed

dep

osit

of Ba

ht 10

0 mi

llion,

with

intere

stcu

stom

ers.

rate

of 5%

; and

in th

e ye

ar 20

07 -

six-m

onth

fixed

dep

osit

of B

aht 1

00 m

illion

, with

inter

est

rate

of 4.7

5%; a

nd tw

elve-

month

fixe

d de

posit

of B

aht 1

00 m

illion

, with

inter

est r

ate o

f 5%

.

-Lo

ng-te

rm4,2

57,00

0,000

.004,1

98,36

3,636

.35-

The

Com

pany

ent

ered

into

the

Onsh

ore

-Th

e ter

ms

are

in th

e

loans

Facil

ities

Agree

ment

with

four T

hai c

omme

rcial

ordin

ary c

ourse

of b

usine

ss

bank

s, Kr

ung

Thai

Bank

Pub

lic C

ompa

nyun

der w

hich

com

mer

cial

Limite

d, TM

B Ba

nk P

ublic

Com

pany

Lim

ited,

bank

s len

d to

gen

eral

-Int

erest

expe

nses

361,5

25,25

9.64

325,2

22,70

5.23

Bank

of A

yudh

ya P

ublic

Com

pany

Lim

ited

and

large

-size

d bu

sines

ses.

Siam

City

Ban

k Pu

blic

Com

pany

Lim

ited,

for

the to

tal a

moun

t of B

aht 1

2,150

milli

on to

pay

for t

he re

levan

t pro

ject c

osts

and

the

proc

urem

ent o

f the

M&E

Equ

ipmen

t und

er the

Conc

essio

n Ag

reem

ent.

66


Pers

ons/

Juris

ticpe

rson

s wh

o m

ayOp

inion

of t

heha

ve c

onflic

t of

Relat

ions

hipNa

ture

of

Tran

sact

ion

Value

(Bah

t)Ne

cess

ity/D

etail

sAu

dit C

omm

ittee

inter

est

Tran

sact

ion

Year

200

6Ye

ar 2

007

5.Kr

ung

Thai

Bank

-Kr

ung

Thai

Bank

Pub

lic C

ompa

ny L

imite

dTh

e Co

mpa

ny

Publ

ic Co

mpa

nyho

lds 3

.94%

of s

hare

s in

the

Com

pany

-Le

tter o

f21

6,825

.0021

5,700

.00-

The

Com

pany

has

lette

rs of

gua

rant

ee is

sued

-Th

e ter

ms

are

in th

e

Limite

das

at 2

0 M

arch

200

7.gu

aran

tee fe

esby

Kru

ng T

hai B

ank

Publi

c Co

mpa

ny L

imite

dor

dinary

cou

rse o

f bus

iness

(Con

tinue

d)-

Mrs.

Non

gnut

ch T

hienp

aitoo

n, an

rem

aining

in th

e na

me

of th

e Co

mpa

ny a

sfo

r the

sam

e na

ture

of

exec

utive

of K

rung

Tha

i Ban

k Pu

blic

secu

rity, in

favo

r of t

he M

etrop

olitan

Elec

tricity

trans

actio

ns.

Com

pany

Lim

ited,

is a

direc

tor o

f the

Auth

ority

for t

he in

stalla

tion

of e

lectri

c m

eters

Com

pany

.at

the

electr

icity

sub-

statio

ns a

roun

d th

e

depo

t and

the

Adm

inistr

ation

Buil

ding.

The

bank

fees

are

at t

he ra

te of

1.5%

per

ann

um.

-Ba

nk fe

es4,4

58,33

3.34

4,101

,666.6

6-

The

Com

pany

app

ointed

Kru

ng T

hai B

ank

-Th

e fee

s ar

e ba

sed

on th

e

Publi

c Co

mpa

ny L

imite

d as

the

Facil

ity A

gent

ordin

ary

term

s ap

plied

by

acco

rding

to th

e ter

ms

of th

e On

shor

eth

e co

mm

ercia

l ban

ks in

Facil

ities

Agre

emen

t. Th

e Co

mpa

ny is

requ

ired

resp

ect o

f majo

r clie

nts.

to p

ay fe

es a

t the

rate

spec

ified

in th

e fee

letter

as

exec

uted

on

the

sam

e da

te of

the

Onsh

ore

Facil

ities

Agre

emen

t with

the

four

finan

cial in

stitu

tions

.

-Co

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f far

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mbe

r 200

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nt o

f Bah

t 874

,730.

68


Necessity and Justification of the Related Party TransactionsAt the Meetings of the Board of Directors No. 2/2007 on 11 May 2007; No. 3/2007 on 8 August

2007; No. 4/2007 on 12 November 2007; and No. 1/2008 on 26 February 2008, the Audit Committee jointlyconsidered and reviewed the related party transactions, with the Companyûs management, and opined thatthe transactions between the Company and persons and/or juristic persons who may have a conflict ofinterest were justified and necessary for the Companyûs business operations. In this regard, all relatedparty transactions during the year 2007 were material and executed under the conditions of the agreementsrelating to this project from the beginning, rather than executing new transactions. As for minor transactions,they were executed in accordance with the measures for the approval of related party transactions asdescribed below.

Measures or Steps for the Approval of Related Party TransactionsThe Company complied with the rules and regulations of the Securities and Exchange Commission

and the Stock Exchange of Thailand. In the case where the Company is entering into a related partytransaction that may give rise to a conflict of interest, such a transaction must be approved by the Board ofDirectors and the Audit Committee would consider the justification of the transaction whilst taking intoaccount the best interests of the Company. The pricing and terms of the transaction must be based on theordinary course of business and must be a fair price or be comparable to the market price. Furthermore,any person who has any interest or who may have a conflict of interest in connection with such transactionshall not be allowed to participate in the consideration and approval of such transaction.

A related party transaction that is necessary and urgent with a transaction value of not exceedingBaht 100,000 or, if more than one transaction, in aggregate of not exceeding Baht 2,000,000 within a12-month period, may be carried out, provided that a report on each transaction must be made to the AuditCommittee, indicating its necessity and justification of the transaction.

Policy or Future Trend of Related Party TransactionsThe Company shall comply with the rules and regulations of the Securities and Exchange Commission

and the Stock Exchange of Thailand, including the rules on the disclosure of related party transactionsas well as acquisition and disposition of significant assets of the Company or its Subsidiaries andthe accounting standards as prescribed by the Federation of the Accounting Professions. If there aretransactions which may give rise to conflict of interest in the future, such as, hiring a group of persons whomay have conflict of interest to carry out construction, project management, project maintenance, theBoard of Directors, with the Audit Committee, shall consider the necessity and justification of suchtransactions, including the pricing and terms of the transactions, which must be based on the ordinarycourse of business. The price must also be compared with the price applicable to third parties or themarket price. A person who has any interest shall not be allowed to participate in the consideration andapproval of the transactions. The Company has no policy to extend or guarantee a loan for a person whomay have a conflict of interest under the definition of the SEC.

In case that the Audit Committee does not have expertise to consider any particular related partytransaction which may take place, the Company shall arrange for an independent expert or the Companyûsauditor to opine on such related party transaction to support the decision-making of the Board of Directorsand/or the Audit Committee or the shareholders, as the case may be. The Company will disclose the relatedparty transactions in the notes to the financial statements that have been reviewed or audited by theCompanyûs auditor.


69

Management Discussion and Analysis of FinancialPosition and Results of Operations

15.1 Analysis of Results of OperationsBangkok Metro Public Company has commenced its service for train operations for a period

of 3 years and 6 months since 3 July 2004. The Company and its Subsidiaries presently generated

the major revenue from provision of the metro service, or representing 88% of total revenue, and

the Company also generated revenue from commercial development and other revenue, representing

12% of total revenue.

Total revenue for the year 2007 of the Company and its Subsidiaries amounted to Baht

1,445.83 million, representing an increase of 3.35% as compared to that of the year 2006, namely,

fare revenue increased due to the increase in volume of passengers on working days from the growth

of real estate businesses surrounding the stations and the increased use of the metro system

instead of other modes of transport system. Revenue from commercial development was increased

mainly due to such revenue generated by BMCL Network Limited since October 2007.

The average daily volume of passengers in the year 2007 amounted to 165,000 trips,

representing an increase of approximately 4% as compared to 158,000 trips in the year 2006, mainly

due to the increase in volume of passengers on working days of approximately 5%. In this regard,

the average daily volume of passengers on working days of the year 2007 increased to 189,000 trips

per day. In addition, the usage of 30 Days Pass on working days had a tendency to substantially

increase from 5% in the year 2006 to 20% in the year 2007, which showed the increased volume of

regular customers.

Total expenses of the Company and its Subsidiaries mainly comprise cost of fare, commercial

development cost, amortisation of project costs and selling and administrative expenses. In the year

2007, the total expenses (excluding interest expenses) amounted to Baht 1,994.68 million, which

was similar to that of the previous year. In addition, the Company was able to reduce expenses in

respect of cost of fare by Baht 68.87 million which was mainly due to the Companyûs ability to

minimize electricity cost in the metro system, including the decrease in insurance premiums caused

by Baht appreciation. However, the Companyûs commercial development cost increased by Baht

25.13 million which was mainly due to the increase in expenses of BMCL Network Limited which

corresponded to its revenue.

Interest expenses for the year 2007 of the Company and its Subsidiaries amounted to Baht

933.25 million, representing a decrease of Baht 127.71 million or 12.04%, (which was mainly incurred

from the long-term loans of the Company), due to the utilization of the proceeds from the capital

increase in September 2006 for loan repayment in the amount of Baht 2,115 million in late 2006

and the Companyûs repayment of the principal of the long-term loan in the year 2007 in the amount

of Baht 150 million, thereby causing a decrease in the Companyûs interest expenses.

51

70


The results of operations of the Company and its Subsidiaries over the past three years during

the years 2005 - 2007 showed net losses which, however, gradually decreased, i.e., from the net loss

of Baht 1,715.99 million in the year 2005 to Baht 1,669.38 million in the year 2006 and Baht 1,475.43

million in the year 2007, respectively. In this regard, the net loss of the year 2007 represented a

decrease of 11.62% as compared to that of the year 2006 because of the continued increase in

fare revenue. At present, the Companyûs fare box ratio (fare revenue divided by the cost of fare)

represented 0.92 times or its fare revenue was at the similar level to the cost of fare. The metro

extension projects and the growth of real estate businesses surrounding the route would encourage

increase in the metro passengers in the future.

15.2 Analysis of Financial PositionAs at 31 December 2007, the Company and its Subsidiaries had total assets of Baht 19,705.25

million, representing a decrease of Baht 1,536.44 million or 7% from that of the year 2006. This was

due to the decrease in such significant current assets as cash and cash equivalents in the amount

of Baht 1,192.85 million which was utilized to repay the principal of the long-term loan in the amount

of Baht 150 million and the interest expenses in the amount of Baht 933.25.

As at 31 December 2007, the Company and its Subsidiaries had total liabilities of Baht 12,737.43

million, representing a slight decrease of Baht 65.40 million or 1% from that of the year 2006.

As at 31 December 2007, shareholdersû equity of the Company and its Subsidiaries amountedto Baht 6,967.82 million, representing a decrease of Baht 1,471.04 million or 17% from that as at

the end of the year 2006 due to the operating loss in the year 2007.

Liquidity

As at 31 December 2007, the Company had cash and cash equivalents of Baht 341.92

million, representing a decrease of Baht 1,192.85 million as compared to that as at the end of the

year 2006. The net cash flow from operating activities decreased by Baht 1,197.12 million arising

from the operating loss and the utilization of the cash flow in financing activities in the amount of

Baht 150 million for repayment of the long-term loan.

As at 31 December 2007, the Company had its debt to equity ratio at 1.83 times, representing

an increase from 1.52 times in the year 2006 and had its debt to equity ratio /1, which was calculated

pursuant to the conditions in the long-term loan agreement as at the end of the year 2007, at 1.37

times, representing an increase from 1.19 times in the year 2006.

Remark : /1 Debt to equity ratio calculated pursuant to the conditions in the Onshore Facilities Agreement,based on the figures from the Companyûs unconsolidated financial statements by using totalliabilities and contingent liabilities net of the sponsor support: subordinated loan, divided by thetotal of paid-up capital, share premium, retained earnings (loss), reserves and the sponsor support:subordinated loan, but excluding any amounts attributable to revaluation of assets.


71

Auditorûs Fee

For the fiscal year ended 31 December 2007, the audit fees paid to the Companyûs auditor,

namely, Ernst and Young Office Limited, totaled Baht 1,870,000 which included the audit fees of the

Company and the three Subsidiaries as detailed below:

Summary of the Company and the Subsidiariesû Audit Fees in 2007

Company Auditor Audit Fee (Baht)

Bangkok Metro Public Company Limited Siraporn Ouaanunkun 1,000,000

BMCL Network Limited Siraporn Ouaanunkun 220,000

Triads Networks Company Limited Siraporn Ouaanunkun 350,000

Metro Mall Development Limited Siraporn Ouaanunkun 300,000

Total Audit Fees 1,870,000

The Company and such Subsidiaries had no other non-audit fees payable to the auditor, the

auditing firm of which the auditor is a member, and any person or business relating to the auditor

and the auditing firm of which the auditor is a member.

72


Report on Responsibilities of the Board ofDirectors towards the Financial Report

The Board of Directors realizes the significance of its duties and responsibilities in supervising the

Companyûs business to ensure good management in accordance with laws, detailed objectives and the

Companyûs Articles of Association, as well as resolutions of the shareholders meetings with integrity and

prudence. The Board of Directors protects the benefits of the Company and shareholders by ensuring that

the Companyûs financial report contains accurate and full accounting records that reflect the Companyûs

actual financial position and results of its operations.

The Board of Directors established the Audit Committee comprising independent directors fully

qualified in accordance with the requirements of The Stock Exchange of Thailand to review and ensure

accuracy and sufficiency of the financial report, including accurate and complete disclosure of related

party transactions or transactions with conflict of interest, in compliance with the requirements of The Stock

Exchange of Thailand and relevant rules and regulations. In this regard, the Audit Committee has already

reported their performance to the Board of Directors.

The Board of Directors is of the opinion that the financial statements for the year 2007 of the

Company and its Subsidiaries, which have been reviewed by the Audit Committee in conjunction with the

management, and audited by the Companyûs auditor, present fairly, in all material aspects, the financial

position and the results of operations of the Company and its Subsidiaries in accordance with generally

accepted accounting principles.

(Mr. Plew Trivisvavet) (Dr. Sombat Kitjalaksana)

Chairman of the Board of Directors Managing Director

61


73

The Ordinary General Meeting of Shareholders resolved to appoint the Audit Committee of BangkokMetro Public Company Limited, comprising three independent directors, namely, General Chetta Thanajaro, asthe Chairman of the Audit Committee, Lieutenant General Surat Sumrith and Mr. Vitoon Tejatussanasoontorn,as the Audit Committee members. In the year 2007, the Audit Committee had four meetings with the highlevel executives and the management of the Company to independently consider the issues as assigned bythe Companyûs Board of Directors, in accordance with the regulations of Bangkok Metro Public CompanyLimited on the rules and guidelines for practice of the Audit Committee in line with the requirements of theStock Exchange of Thailand, as may be summarized as follows:1. The Audit Committee reviewed the quarterly and 2007 annual financial statements in compliance

with generally accepted accounting standards so as to ensure the correctness and reliability of theaccounting system and its financial reports, as well as the sufficient disclosure of information in thefinancial statements, including review of related party transactions between the Company, and itssubsidiaries and associated companies to ensure that the Company has executed the transactions inthe ordinary course of business and in accordance with the rules as set forth by the Stock Exchangeof Thailand, with sufficient information disclosure, for the benefits of investors.

In review of the financial statements and compliance with applicable regulations and laws, theAudit Committee is of the opinion that the Company has complied with the applicable laws, and itsaccounting system and financial reports are correct and reliable.

2. The Audit Committee reviewed the evaluation of the Companyûs internal control system and themonitoring of correction of material faults in the system by Office of the Internal Audit, and thenconfirmed that the Company has the internal control system which is sufficient for the businessoperations and achieves the objectives of the internal control in respect of effectiveness and efficiencyof its operation, resource utilization, reliability of the financial reports and results of operations,compliance with laws, rules and regulations.

3. The Audit Committee supervised the internal audit to be in line with the approved plan by reviewingthe audit report for the year 2007 so as to ensure efficient and effective operation with good internalcontrol system and compliance with the law on securities and exchange or the law relating to thebusiness of the Company, and follow up the correction in accordance with the audit report in materialissues for the good corporate governance.In addition, the Audit Committee has considered the audit plan for the year 2008 which was prepared

based on the Companyûs internal control evaluation and potential risk factors. The scope of the audit plancovers all material issues, accommodates the prevention from possible risks, provides appropriate internalcontrol for the corporate risk management and brings optimum benefits to the Company and its shareholders.

Furthermore, the Audit Committee provided the opinion and proposed to the Board of Directors to seekapproval of the 2008 Ordinary General Meeting of Shareholders for appointment of either Miss SirapornOuaanunkun, Certified Public Accountant No. 3844, and/or Mr. Narong Puntawong, Certified Public AccountantNo. 3315, and/or Mr. Supachai Phanyawattano, Certified Public Accountant No. 3930, of Ernst & Young OfficeLimited as the Companyûs auditor for the year 2008, with the auditing fee in the total amount of not exceedingBaht 1,080,000.

(General Chetta Thanajaro)Chairman of the Audit Committee

Audit Committeeûs Report for the Year 200771

74


REPORT AND CONSOLIDATED FINANCIAL STATEMENTS31 DECEMBER 2007 AND 2006

BANGKOK METRO PUBLIC COMPANY LIMITEDAND ITS SUBSIDIARIES

81


75

Report of Independent Auditor

To The Shareholders of Bangkok Metro Public Company Limited

I have audited the accompanying consolidated balance sheets of Bangkok Metro Public Company

Limited and its subsidiaries as at 31 December 2007 and 2006, the related consolidated statements of

income, changes in shareholdersû equity and cash flows for the years then ended, and the separate financial

statements of Bangkok Metro Public Company Limited for the same years. These financial statements are

the responsibility of the management of the Company and its subsidiaries as to their correctness and the

completeness of the presentation. My responsibility is to express an opinion on these financial statements

based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards

require that I plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement. An audit includes examining on a test basis, evidence

supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the

overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

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

financial position of Bangkok Metro Public Company Limited and its subsidiaries, and of Bangkok Metro

Public Company Limited as at 31 December 2007 and 2006, the results of their operations, and cash

flows for the years then ended in accordance with generally accepted accounting principles.

Without qualifying my opinion on the above financial statements, I draw attention to the matter as

discussed in Note 4 to the financial statements whereby, effective 1 January 2007, the Company changed

its accounting policy for recording investments in subsidiaries in the separate financial statements from

the equity method to the cost method. The Company has thus restated the separate financial statements

as at 31 December 2006 and for the year then ended to reflect this accounting change.

Siraporn Ouaanunkun

Certified Public Accountant (Thailand) No. 3844

Ernst & Young Office Limited

Bangkok: 26 February 2008

76


BANGKOK METRO PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

AS AT 31 DECEMBER 2007 AND 2006

The accompanying notes are an integral part of the financial statements.

(Unit : Baht)

Consolidated Separate

financial statements financial statements

Note 2007 2006 2007 2006

(Restated)ASSETSCURRENT ASSETS

Cash and cash equivalents 7 341,919,650 1,534,774,542 324,752,674 1,519,074,796Current investments 8 - 200,000,000 - 200,000,000Trade accounts receivable, net 9 38,527,769 16,633,259 - -Amounts due from related parties 6 1,374,805 5,249,106 27,158,329 5,232,876Loan to a subsidiary 6 - - - 17,847,681Other current assets

Prepaid expenses 65,164,801 74,788,791 64,648,049 74,288,015Value added tax refundable 1,616,657 6,794,761 - -Other receivable 4,702,541 4,642,874 4,684,993 4,484,780Unbilled input tax 10,391,331 9,751,693 - -Accrued income 4,770,611 18,244,962 4,770,611 18,244,962Inventory - tickets 3,459,525 9,212,778 3,459,525 9,212,778Others 2,843,389 7,967,699 4,482 -

TOTAL CURRENT ASSETS 474,771,079 1,888,060,465 429,478,663 1,848,385,888NON-CURRENT ASSETS

Investments in subsidiaries, net 10 - - 118,999,980 110,176,322Project costs, net 11 18,750,609,295 18,530,355,061 18,750,609,295 18,530,355,061Non operating telecommunication equipment 11 - 380,157,445 - 334,209,389Equipment, net 12 444,751,373 394,483,679 45,744,649 53,261,497Advance payment for construction

Related company 6 - 2,262,046 - -Other companies 5,136,323 4,505,356 571,943 2,392,477

Other non-current assetsGoodwill, net 6,033,738 7,340,866 - -Others 23,948,956 34,530,126 22,798,928 33,037,250

TOTAL NON-CURRENT ASSETS 19,230,479,685 19,353,634,579 18,938,724,795 19,063,431,996TOTAL ASSETS 19,705,250,764 21,241,695,044 19,368,203,458 20,911,817,884

BALANCE SHEETS


77

BALANCE SHEETS (Continued)




(Unit : Baht)



Note 2007 2006 2007 2006

(Restated)LIABILITIES AND SHAREHOLDERSû EQUITYCURRENT LIABILITIES

Bank overdraft and short-term loan fromfinancial institution 13 12,261,297 1,581,672 - -

Construction and other payableRelated parties 6 7,434,290 7,086,596 7,176,182 6,290,368Other companies 358,740,908 409,810,525 344,304,372 382,470,599

Current portion of long-term loans 6, 14 550,000,000 330,000,000 550,000,000 330,000,000Unearned fare box revenue 47,794,360 40,609,737 47,794,360 40,609,737Deposits on stored value ticket 30,860,392 25,372,042 30,860,392 25,372,042Other current liabilities

Withholding tax payable 6,157,608 5,474,916 5,378,585 4,050,858Retention for construction 4,078,743 5,009,442 1,954,894 3,649,184Accrued expense 32,467,588 31,414,409 26,726,059 28,497,538Others 8,588,254 6,923,176 3,856,657 2,638,406

TOTAL CURRENT LIABILITIES 1,058,383,440 863,282,515 1,018,051,501 823,578,732NON-CURRENT LIABILITIES

Construction payable and accrued interestto related party 6 313,746,247 279,543,942 - -

Long-term loans, net of current portion 6, 14 10,190,000,000 10,560,000,000 10,190,000,000 10,560,000,000Long-term loans from shareholder and

accrued interest 6, 15 1,144,847,301 1,065,153,112 1,144,847,301 1,065,153,112Deferred leasehold right revenue 12,511,772 16,952,838 - -Guarantee on rental and service agreement 14,734,486 14,764,424 - -Other non-current liabilities 3,205,296 3,135,472 - -

TOTAL NON-CURRENT LIABILITIES 11,679,045,102 11,939,549,788 11,334,847,301 11,625,153,112TOTAL LIABILITIES 12,737,428,542 12,802,832,303 12,352,898,802 12,448,731,844

78


BALANCE SHEETS (Continued)




(Unit : Baht)



Note 2007 2006 2007 2006

(Restated)SHAREHOLDERSû EQUITY

Share capital 16Registered

11,950,000,000 ordinary shares of Baht 1 each 11,950,000,000 11,950,000,000 11,950,000,000 11,950,000,000Issued and paid up

11,950,000,000 ordinary shares of Baht 1 each 11,950,000,000 11,950,000,000 11,950,000,000 11,950,000,000Share premium 968,445,115 968,445,115 968,445,115 968,445,115Deficit (5,981,012,632) (4,505,584,223) (5,903,140,459) (4,455,359,075)

EQUITY ATTRIBUTABLE TO THE COMPANYûSSHAREHOLDERS 6,937,432,483 8,412,860,892 7,015,304,656 8,463,086,040

MINORITY INTEREST - equity attributable to minorityshareholders of subsidiaries 30,389,739 26,001,849 - -

TOTAL SHAREHOLDERSû EQUITY 6,967,822,222 8,438,862,741 7,015,304,656 8,463,086,040TOTAL LIABILITIES AND SHAREHOLDERSû EQUITY 19,705,250,764 21,241,695,044 19,368,203,458 20,911,817,884


79

INCOME STATEMENTS



FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006

(Unit : Baht)



Note 2007 2006 2007 2006

(Restated)REVENUES

Fare box revenue 17 1,270,412,785 1,229,498,758 1,270,412,785 1,229,498,758Commercial development revenue 17 153,430,083 145,049,613 63,399,856 58,240,273Gain on sales of investment in a subsidiary - 17,146,500 - -Other income

Interest income 18,857,033 4,863,112 18,918,805 5,892,332Others 3,134,159 2,382,590 5,335,104 863,271

TOTAL REVENUES 1,445,834,060 1,398,940,573 1,358,066,550 1,294,494,634EXPENSES

Costs of fare box 1,385,966,223 1,454,838,804 1,385,966,223 1,454,838,804Cost of commercial development 119,242,862 94,110,407 70,049,513 59,629,623Amortisation of project costs 194,306,675 156,605,134 194,306,675 156,605,134Selling and administrative expenses 295,167,744 306,821,869 236,939,931 232,028,133Allowance for loss on diminution of investments

in subsidiary - - 6,926,342 23,348,546TOTAL EXPENSES 1,994,683,504 2,012,376,214 1,894,188,684 1,926,450,240LOSS BEFORE INTEREST EXPENSES

AND CORPORATE INCOME TAX (548,849,444) (613,435,641) (536,122,134) (631,955,606)INTEREST EXPENSES (933,252,341) (1,060,962,637) (911,659,250) (1,040,123,654)CORPORATE INCOME TAX OF A SUBSIDIARY (2,928,670) (2,931,285) - -LOSS AFTER CORPORATE INCOME TAX (1,485,030,455) (1,677,329,563) (1,447,781,384) (1,672,079,260)NET LOSS ATTRIBUTABLE TO MINORITY INTEREST 9,602,046 7,945,838 - -NET LOSS FOR THE YEAR (1,475,428,409) (1,669,383,725) (1,447,781,384) (1,672,079,260)

BASIC LOSS PER SHARE 20Net loss (0.12) (0.19) (0.12) (0.19)Weighted average number of ordinary shares (shares) 11,950,000,000 8,860,073,200 11,950,000,000 8,860,073,200

80


(Unit : Baht)

Consolidated financial statements

Minority interest-

Issued and Share subscription equity attributable to

paid-up Share received minority shareholders

share capital premium in advance Deficit of subsidiaries Total

Balance as at 31 December 2005 7,350,000,000 600,051,778 296,689,300 (2,836,200,498) 6,723,225 5,417,263,805

Issuance of additional ordinary

shares (Note 16) 4,303,310,700 368,393,337 - - - 4,671,704,037

Transfer share subscription received

in advance to issued and paid up

share capital (Note 16) 296,689,300 - (296,689,300) - - -

Net loss for the year - - - (1,669,383,725) - (1,669,383,725)

Minority interest - equity attributable to

minority shareholders of subsidiaries - - - - 19,278,624 19,278,624

Balance as at 31 December 2006 11,950,000,000 968,445,115 - (4,505,584,223) 26,001,849 8,438,862,741


Net loss for the year - - - (1,475,428,409) - (1,475,428,409)

Minority interest - equity attributable to

minority shareholders of subsidiaries - - - - 4,387,890 4,387,890


STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY





81

(Unit : Baht)

Separate financial statements

Issued and Share subscription

paid-up Share received

share capital premium in advance Deficit Total

Balance as at 31 December 2005 -

as previously reported 7,350,000,000 600,051,778 296,689,300 (2,836,200,498) 5,410,540,580

Cumulative effect of the change in accounting policy

for investments in subsidiaries (Note 4) - - - 52,920,683 52,920,683

Balance as at 31 December 2005 - as restated 7,350,000,000 600,051,778 296,689,300 (2,783,279,815) 5,463,461,263

Issuance of additional ordinary shares (Note 16) 4,303,310,700 368,393,337 - - 4,671,704,037

Transfer share subscription received in advance

to issued and paid up share capital (Note 16) 296,689,300 - (296,689,300) - -

Net loss for the year (restated) - - - (1,672,079,260) (1,672,079,260)

Balance as at 31 December 2006 - as restated 11,950,000,000 968,445,115 - (4,455,359,075) 8,463,086,040

Balance as at 31 December 2006 - as previously

reported 11,950,000,000 968,445,115 - (4,505,584,223) 8,412,860,892

Cumulative effect of the change in accounting policy

for investments in subsidiaries (Note 4) - - - 50,225,148 50,225,148

Balance as at 31 December 2006 - as restated 11,950,000,000 968,445,115 - (4,455,359,075) 8,463,086,040

Net loss for the year - - - (1,447,781,384) (1,447,781,384)

Balance as at 31 December 2007 11,950,000,000 968,445,115 - (5,903,140,459) 7,015,304,656

STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY




82


CASH FLOW STATEMENTS




(Unit : Baht)



2007 2006 2007 2006

(Restated)Cash flows from (used in) operating activities

Net loss (1,475,428,409) (1,669,383,725) (1,447,781,384) (1,672,079,260)Adjustments to reconcile net loss to net cash provided by

(paid from) operating activities :-Depreciation and other amortisation 44,709,113 40,166,625 25,332,197 24,657,488Amortisation on project costs 194,306,675 156,605,134 194,306,675 156,605,134Allowace for doubtful account 2,546,901 - - -Amortisation of prepaid expenses 147,114,404 156,965,761 144,492,510 155,341,535Withholding tax deducted at source written off 2,810,531 3,380,993 2,810,531 3,380,993Loss (gain) on disposal of equipment (87,210) 3,467 (87,823) 5,822Unrealised loss (gain) on exchange 5,073,869 (280,732) 5,073,869 (280,732)Gain on sales of investment in a subsidiary - (17,146,500) - -Allowance for loss on diminution of investments

in subsidiary - - 6,926,342 23,348,546Amortisation of goodwill 1,307,128 1,307,128 - -Net loss attributable to minority interest (9,602,046) (7,945,838) - -

Loss from operating activities before changes in operatingassets and liabilities (1,087,249,044) (1,336,327,687) (1,068,927,083) (1,309,020,474)

Decrease (increase) in operating assetsTrade accounts receivable (24,441,411) 1,382,090 - -Amounts due from related parties 3,874,301 (1,554,244) (21,925,453) 4,156,893Withholding tax deducted at source (3,500,641) (83,385) (2,810,531) (2,043,498)Prepaid expenses (131,658,213) (154,162,377) (129,020,343) (152,423,413)Other current assets 11,637,712 16,876,935 1,139,798 19,354,591Other non-current assets (425,690) (19,917,577) (768,538) (19,907,412)

Increase (decrease) in operating liabilitiesConstruction and other payable - related parties 347,694 (115,761,286) 885,814 (79,713,770)Construction and other payable - other companies (56,143,486) 87,951,134 (43,240,096) 73,712,655Unearned fare box revenue 7,184,623 7,415,208 7,184,623 7,415,208Deposits on stored value ticket 5,488,350 7,659,900 5,488,350 7,659,900Other current liabilities 82,164,439 52,068,540 78,774,398 26,807,387Deferred leasehold right revenue (4,441,066) (9,702,197) - -Other non-current liabilities 39,886 3,042,460 - -

Net cash flows used in operating activities (1,197,122,546) (1,461,112,486) (1,173,219,061) (1,424,001,933)


83

CASH FLOW STATEMENTS (Continued)




(Unit : Baht)



2007 2006 2007 2006

(Restated)Cash flows from (used in) investing activities

Decrease (increase) in current investments 200,000,000 (200,000,000) 200,000,000 (200,000,000)Increase in construction payable and accrued interest

to related party 19,125,305 - - -Decrease in loans to other company - 2,500,000 - -Decrease (increase) in loans to a subsidiary - - 17,847,681 (17,847,681)Increase in investment in subsidiaries - - (15,750,000) (47,750,000)Acquisition of equipment (28,901,471) (40,145,040) (12,764,082) (8,455,019)Proceed from disposal of equipment 211,589 7,834 211,215 -Decrease (increase) in advance payment for project 1,631,079 10,257,185 1,820,534 (1,591,261)Increase in project costs (62,468,409) (252,173,368) (62,468,409) (252,173,368)Increase in non operating telecommunication equipment - (47,115,302) - (47,115,302)Cash received from minority shareholders 15,750,000 47,250,000 - 31,500,000Dividend paid to minority shareholders (1,760,064) - - -

Net cash flows from (used in) investing activities 143,588,029 (479,418,691) 128,896,939 (543,432,631)Cash flows from (used in) financing activities

Increase (decrease) in bank overdraft and short-term loansfrom financial institution 10,679,625 (14,668,868) - -

Decrease in long-term loans (150,000,000) (1,224,500,000) (150,000,000) (1,224,500,000)Decrease in long-term loans from shareholder - (399,909,207) - (399,909,207)Cash received from issuance of additional ordinary shares - 4,671,704,037 - 4,671,704,037

Net cash flows from (used in) financing activities (139,320,375) 3,032,625,962 (150,000,000) 3,047,294,830Net increase (decrease) in cash and cash equivalents (1,192,854,892) 1,092,094,785 (1,194,322,122) 1,079,860,266Cash and cash equivalents at beginning of year 1,534,774,542 442,679,757 1,519,074,796 439,214,530Cash and cash equivalents at end of year 341,919,650 1,534,774,542 324,752,674 1,519,074,796

84


CASH FLOW STATEMENTS (Continued)




(Unit : Baht)



2007 2006 2007 2006

(Restated)Supplemental cash flows information

Cash paid during the year for :Interest expenses 832,779,014 1,014,239,357 831,965,060 1,013,814,147Corporate income tax and withholding tax

deducted at source 6,104,956 5,267,001 2,810,531 2,043,498

Non-cash transactions :Transfer share subscription received in advance

to issued and paid up share capital - 296,689,300 - 296,689,300Consolidation Goodwill decrease from sales of

investment in subsidiary - 2,879,038 - -Purchase of equipment on credit 15,077,000 70,988,231 - -Purchase of non operating telecommunication

equipment on credit - 24,291,570 - 24,291,570Transfer non operating telecommunication equipment

to project costs and equipment 380,157,445 - 334,209,389 -


85

NOTES TO FINANCIAL STATEMENTS

1. GENERAL INFORMATIONBangkok Metro Public Company Limited (çThe Companyé) is a public company incorporated

and domiciled in Thailand. Its major shareholders are Mass Rapid Transit Authority of Thailand (MRTA)and CH. Karnchang group of companies, which were incorporated in Thailand. The Company isprincipally engaged in the operation of the MRTA Initial System Project - Chaloem RatchamongkhonLine (çthe Projecté) and commercial development and its registered address is 189 Rama IX Road,Huai Khwang, Bangkok.a) On 1 August 2000, the Company entered into çAgreement for the MRTA Initial System Project

- Chaloem Ratchamongkhon Lineé (çthe Concession Agreementé) with the Mass Rapid TransitAuthority of Thailand (çthe MRTAé) to design, manufacture, supply, install, test and commissionthe M&E Equipment, and for the operation and maintenance of the MRTA Initial System. TheAgreement is for 25 years from the date that MRTA issues a Notice of No Objection toCommencement of Revenue Service. The MRTA Initial System was officially opened on 3 July2004.

Under the Agreement, the Company has commitments to make certain payments to theMRTA, which consist of remuneration from fares, remuneration from commercial development,apportionment of profit calculated from the Return on Equity (ROE) and any benefit derivedfrom the interest rate on a credit agreement being lower than a specified rate, at rates as inthe Agreement. Furthermore, the Agreement includes a covenants relating to the maintenanceof the stipulated proportion of shareholding of the main shareholders.

b) On 19 December 2001, the Company entered into a long-term loan agreement with a group ofdomestic lenders, comprising by 4 commercial banks (Onshore Facilities Agreement). The loanagreement, which was amended by the first, the second, the third and the forth supplementalagreements dated 27 January 2003, 18 June 2003, 2 April 2004 and 30 July 2004, respectively,provides the following 5 credit facilities :1) Tranche A : A long-term loan facility of Baht 11,000 million for the payment of project

costs.2) Tranche B : A performance guarantee facility of Baht 150 million provided to guarantee

the Companyûs obligations to the MRTA under the Concession Agreement.3) Tranche C: A performance guarantee facility of Baht 60 million provided to guarantee

the Companyûs obligations to the relevant authorities in relation to the Project.4) Tranche D: A long-term loan facility of Baht 500 million for the payment of additional

costs incurred as a result of the program to accelerate the procurement of M&Eequipment and the depot modification. However, the Company had fully repaid suchloan in September 2006.

5) Tranche E: A long-term loan facility of Baht 790 million for the payment of additionalexpenses incurred under the M&E Equipment Contracts, additional fees incurred underthe Project Management Agreement, basic infrastructure works for the retail areas in



86


relation to the commercial development, additional equipment in stations, mobilizationfees for the Civil Infrastructure Maintenance Contracts and investment in the CommercialDevelopment Subsidiaries. Subsequently, the Company and the lenders agreed to reducethe loan facility to Baht 650 million. However, the Company had fully repaid Baht 614.5million of the loan balance in September 2006.

2. BASIS OF PREPARATION2.1 The financial statements have been prepared in accordance with accounting standards

enunciated under the Accounting Profession Act B.E. 2547. The presentation of the financialstatements has been made in compliance with the stipulations of the Notification of theDepartment of Business Development dated 14 September 2001, issued under the AccountingAct B.E. 2543.

The financial statements have been prepared on a historical cost basis except whereotherwise disclosed in the accounting policies.

2.2 Basis of consolidationa) The consolidated financial statements include the financial statements of Bangkok Metro

Public Company Limited and following subsidiary companies:

Assets as a Revenues as apercentage to the percentage to theconsolidated total consolidated total

Percentage of Country of assets as at revenues for the yearCompanyûs name Nature of business shareholding incorporation 31 December ended 31 December

2007 2006 2007 2006 2007 2006Percent Percent Percent Percent Percent Percent

Metro Mall Development Rental of retail space in 64.00 64.00 Thailand 1.71 1.58 1.20 1.78Limited underground stations

BMCL Network Limited Telecommunications services 70.00 70.00 Thailand 0.35 0.32 0.83 -in underground stations

Triads Networks Company Provision of advertising 56.00 56.00 Thailand 0.36 0.24 7.01 7.01Limited services in underground

stations

b) Material balances and transactions between the Company and its subsidiary companieshave been eliminated from the consolidated financial statements.

c) Investments in the subsidiary companies as recorded in the Companyûs books of accountare eliminated against the equity of the subsidiary companies. The resultant differencesare amortised over a period of 10 years commencing as from the date of acquisition ofthe investment.

2.3 The separate financial statements, which present investments in subsidiaries under the costmethod, have been prepared solely for the benefit of the public.


87

3. ADOPTION OF NEW ACCOUNTING STANDARDSThe Federation of Accounting Professions (FAP) has issued Notifications No. 9/2550, 38/2550

and 62/2550 regarding Accounting Standards. The Notifications mandate the use of the following new

Accounting Standards.

a) Thai Accounting Standards which are effective for the current year

TAS 44 (revised 2007) Consolidated Financial Statements and Separate Financial Statements

TAS 45 (revised 2007) Investments in Associates

TAS 46 (revised 2007) Interests in Joint Ventures

These accounting standards become effective for the financial statements for fiscal yearsbeginning on or after 1 January 2007. During the first quarter of the current year, the Companychanged its accounting policy for recording investments in subsidiaries in the separate financialstatements in order to comply with the revised Thai Accounting Standards No. 44, as discussedin Note 4.

Thai Accounting Standards No. 45 and 46 are not relevant to the business of theCompany.

b) Thai Accounting Standards which are not effective for the current yearTAS 25 (revised 2007) Cash Flow StatementsTAS 29 (revised 2007) LeasesTAS 31 (revised 2007) InventoriesTAS 33 (revised 2007) Borrowing CostsTAS 35 (revised 2007) Presentation of Financial StatementsTAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and ErrorsTAS 41 (revised 2007) Interim Financial ReportingTAS 43 (revised 2007) Business combinationsTAS 49 (revised 2007) Construction ContractsTAS 51 Intangible Assets

These accounting standards will become effective for the financial statements for fiscalyears beginning on or after 1 January 2008. The management has assessed the effect ofthese revised accounting standards and believes that they will not have any significant impacton the financial statements for the year in which they are initially applied, except for TAS 43(revise 2007).

Thai Accounting Standards No. 49 is not relevant to the business of the Company.TAS 43 (revised 2007), does not require the Company to amortise goodwill acquired in a

business combination. Such goodwill is instead to be tested for impairment, and measured atcost less accumulated impairment losses. This accounting standard applies to goodwill arisingfrom business combinations for which the agreement date is on or after 1 January 2008.Previously recognised goodwill can be accounted for prospectively, with the Company

88


discontinuing the amortization of the goodwill and instead testing for impairment, as from thebeginning of the first fiscal year starting on or after 1 January 2008.

4. CHANGE IN ACCOUNTING POLICY FOR RECORDING INVESTMENTS IN SUBSIDIARIESIN THE SEPARATE FINANCIAL STATEMENTS

During the first quarter of the current year, the Company changed its accounting policy for

recording investments in subsidiaries in the separate financial statements from the equity method

to the cost method, in compliance with Accounting Standard No. 44 (Revised 2007) regarding

çConsolidated Financial Statements and Separate Financial Statementsé, under which investments in

subsidiaries, jointly controlled entities and associates are to be presented in the separate financial

statements under the cost method.

In this regard, the Company has restated the previous periodûs separate financial statements

as though the investments in the subsidiaries had originally been recorded using the cost method.

The change has the effect of decreasing net loss in the separate income statements for the year

ended 31 December 2007 by Baht 32.3 million (Baht 0.0027 per share) and increasing in net loss for

the year ended 31 December 2006 by Baht 2.7 million (Baht 0.0002 per share). The cumulative effect

of the change in accounting policy has been presented under the heading of çCumulative effect of

the change in accounting policy for investments in subsidiariesé in the separate statements of

changes in shareholdersû equity.Such change in accounting policy affects only the accounts related to investments in

subsidiaries in the Companyûs separate financial statements, with no effect to the consolidatedfinancial statements.

5. SIGNIFICANT ACCOUNTING POLICIES5.1 Revenues and expenses recognition

a) Fare box revenue recognitionSmart card and smart token sales are recognised as revenue when the services are

rendered. Prepaid value in stored value smart cards is recorded as unearned fare boxrevenue in current liabilities in the balance sheet.

b) Commercial development revenueCommercial development revenue is recognised as income when service has been

rendered.c) Other revenues and expenses recognition

An accrual basis of accounting is adopted in recognition of other revenues and expenses.

5.2 Cash and cash equivalentsCash and cash equivalents consist of cash in hand, cash at bank, and all highly liquid

investments with an original maturity of three months or less and not subject to withdrawalrestrictions.


89

5.3 Trade accounts receivable

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful

accounts of a subsidiary is provided for the estimated losses that may be incurred in collection

of receivables. The allowance is generally based on collection experiences and analysis of

debtor aging.

5.4 Investments in subsidiaries

Investments in subsidiaries are accounted for in the separate financial statements using

the cost method.

5.5 Goodwill

Goodwill presented as an asset in the consolidated financial statements is the excess of

the purchase price over the net book value of investment in subsidiaries as of the acquisition

date and is recognised as an expense in the statements of income over 10 years, by the

straight-line basis.

5.6 Project costs and Unit of Throughput Amortisation Method (Unit of Throughput/Unit of

Production)

All expenditures and other related expenses which are incurred to construct the System

and to enable it to become operational (çProject costsé) are capitalised as assets and will bedepreciated over the Concession Period upon the commencement of operation of the System.

Such project costs include management and consultant fees, design costs, electrical and

mechanical works and rolling stock purchased during the Concession Period, interest and

other financing expenses. The Company has been adopting the unit of throughput method of

amortisation to amortise such project costs to be costs of fare box in the income statement

based on the following unit of throughput amortisation formula:

Amortisation for the period = Net project costs at the beginning of period x Percentage of

passengers for the period

Percentage of Passengers = Current periodûs actual passengers

for the period (Actual passengers for the current period +

Projected passengers during the remaining Concession Period)

Net project costs at the = Total project costs - Accumulated amortisation as at beginning

beginning of period of period

5.7 Equipment and depreciation

Equipment is stated at cost less accumulated depreciation and allowance for loss on

impairment of assets (if any).

90


Depreciation of equipment is calculated by reference to its cost on the straight-line basis

over the following estimated useful lives:

Leasehold improvement Concession period of subsidiary

Communication equipment 5 years and Concession period of subsidiary

Advertising equipment 5 years

Furniture and office equipment 3 - 5 years

Motor vehicles 5 years

Depreciation is included in determining income.

No depreciation is provided on assets under installation.

5.8 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the

Company, whether directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own

a voting interest in the Company that gives them significant influence over the Company, key

management personnel, directors and officers with authority in the planning and direction of

the Companyûs operations.

5.9 Foreign currenciesForeign currency transactions are translated into Baht at the exchange rates ruling on

the transaction dates. Assets and liabilities denominated in foreign currencies outstanding atthe balance sheet date are translated into Baht at the exchange rates ruling on the balancesheet date. Gains and losses on exchange rate are included in determining income.

5.10 Impairment of assetsThe Company and its subsidiaries assess at each reporting date whether there is an

indication that an asset may be impaired. If any such indication exists, the Company and itssubsidiaries make an estimate of the assetûs recoverable amount. Where the carrying amountof the asset exceeds its recoverable amount, the asset is considered impaired and is writtendown to its recoverable amount. Impairment losses are recognised in the income statement.(An assetûs recoverable amount is the higher of fair value less costs to sell and value in use.)

5.11 Employee benefitsSalaries, wages, bonuses and contributions to the social security fund and provident

fund are recognised as expenses when incurred.

5.12 Income TaxTax income is provided for in the accounts based on the taxable profits determined in

accordance with tax legislation.


91

5.13 Use of accounting estimatesPreparation of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions in certain circumstances,affecting amounts reported in these financial statements and related notes. Actual results coulddiffer from these estimates.

6. RELATED PARTY TRANSACTIONSDuring the years, the Company and its subsidiaries had significant business transactions with

related parties, which have been concluded on commercial terms and bases agreed upon in theordinary course of businesses between the Company and those companies. Below is a summaryof those transactions.

(Unit : Million Baht)Consolidated Separate Pricing policy

financial statements financial statements2007 2006 2007 2006

Transactions with subsidiary companies(eliminated from the consolidated financialstatements)Commercial development revenue - - 40.6 34.1 Contract pricesInterest income - - 0.1 1.2 MLR + 0.5% per annumDividend income - - 2.2 - Resolution of the Annual General

Meeting of the shareholders ofsubsidiary

Transactions with related companiesFare box compensation revenue 4.2 - 4.2 - Agreed between partyCommercial development revenue 2.7 19.3 2.4 2.4 Contract pricesInterest income 8.8 - 8.8 - 4.75 - 5.00% per annumProject construction costs

(included as part of costs of equipment) 14.5 71.0 - - Contract pricesCost of fare box

Project maintenance costs 12.2 10.8 12.2 10.8 Contract pricesProject management fees 36.0 43.0 36.0 43.0 Contract pricesRemuneration from fare box revenue 11.9 3.0 11.9 3.0 Concession agreementElectricity 0.1 - 0.1 - Agreed between party

Cost of commercial developmentRemuneration from commercial

development revenue 13.6 3.1 13.6 3.1 Concession agreementElectricity 0.1 - 0.1 - Agreed between party

Selling and administrative expensesBank charge 4.5 4.7 4.5 4.7 Contract pricesOffice rental and service 5.5 6.7 - - Contract prices

Interest expense 425.8 497.1 404.9 476.8 Contract prices (Notes 14 and 15)Sales of investment in a subsidiary - 31.5 - 31.5 Agreed between party

92


The balances of the accounts between the Company and those related companies as at 31

December 2007 and 2006 are as follows:(Unit : Baht)



2007 2006 2007 2006Amounts due from related partiesSubsidiaries- Triads Networks Company Limited - - 8,273,353 2,805,731- Metro Mall Development Limited - - 9,527,171 988,817- BMCL Network Limited - - 8,132,535 -

- - 25,933,059 3,794,548Related parties- Tripple A Informedia Company Limited 149,535 3,602,142 - -- Others 1,225,270 1,646,964 1,225,270 1,438,328

1,374,805 5,249,106 1,225,270 1,438,3281,374,805 5,249,106 27,158,329 5,232,876

Loan to a subsidiary- BMCL Network Limited - - - 17,847,681

- - - 17,847,681Advance payment for construction - related company- CH. Karnchang Public Company Limited - 2,262,046 - -

- 2,262,046 - -Construction and other payable - related partiesSubsidiary- Triads Networks Company Limited - - 43,854 -

- - 43,854 -Related parties- CH. Karnchang Public Company Limited 4,592,687 3,923,333 4,458,334 3,923,333- Others 2,841,603 3,163,263 2,673,994 2,367,035

7,434,290 7,086,596 7,132,328 6,290,3687,434,290 7,086,596 7,176,182 6,290,368

Construction payable and accrued interestto related party

- CH. Karnchang Public Company Limited 313,746,247 279,543,942 - -313,746,247 279,543,942 - -

Long-term loans from shareholder and accrued interest- CH. Karnchang Public Company Limited

Loans 1,003,090,793 1,003,090,793 1,003,090,793 1,003,090,793Accrued interest 141,756,508 62,062,319 141,756,508 62,062,319

1,144,847,301 1,065,153,112 1,144,847,301 1,065,153,112Part of çLong-term loansé- Krungthai Bank Public Company Limited

Current portion 215,000,000 129,000,000 215,000,000 129,000,000Long-term portion 3,983,363,636 4,128,000,000 3,983,363,636 4,128,000,000

4,198,363,636 4,257,000,000 4,198,363,636 4,257,000,000


93

As at 31 December 2006, the Company had loans to its subsidiary amounting to Baht 17.8

million, carrying the interest rate at MLR plus 0.5 percent per annum and were repaid in February 2007.

During the year, the movements of loan to a subsidiary, long-term loans from shareholder and

accrued interest and long-term loans were as follows:(Unit : Baht)


Balance Balance

as at During the year as at 31

1 January 2007 Increase Decrease December 2007Long-term loans from shareholder and accrued interest- CH. Karnchang Public Company Limited

Loans 1,003,090,793 - - 1,003,090,793Accrued interest 62,062,319 79,694,189 - 141,756,508

1,065,153,112 79,694,189 - 1,144,847,301Part of çLong-term loansé- Krungthai Bank Public Company Limited

Long-term loans 4,257,000,000 - (58,636,364) 4,198,363,636

(Unit : Baht)Separate financial statements

Balance Balance

as at During the year as at 31

1 January 2007 Increase Decrease December 2007Loan to a subsidiary and interest receivable- BMCL Network Limited

Loans 17,847,681 - (17,847,681) -Interest receivable - 124,689 (124,689) -

17,847,681 124,689 (17,972,370) -Long-term loans from shareholder and accrued interest- CH. Karnchang Public Company Limited

Loans 1,003,090,793 - - 1,003,090,793Accrued interest 62,062,319 79,694,189 - 141,756,508

1,065,153,112 79,694,189 - 1,144,847,301Part of çLong-term loansé- Krungthai Bank Public Company Limited

Long-term loans 4,257,000,000 - (58,636,364) 4,198,363,636

Directors and managementûs remuneration

In 2007, the Company and its subsidiaries recorded salaries, meeting allowances and gratuities

for their directors and management totaling Baht 26 million (Separate financial statements: Baht 22

million) (2006: Baht 28 million, Separate financial statements: Baht 18 million).

94


7. CASH AND CASH EQUIVALENTSThe Company has pledged its rights to receive deposits from bank accounts, with outstanding

balances as at 31 December 2007 of approximately Baht 310.0 million (2006: Baht 1,504.9 million) toa group of lenders to secure the Companyûs long-term loans from the group of lenders. The Companyis able to withdraw these deposits for the use of regular operation.

8. CURRENT INVESTMENTSThe balance as at 31 December 2006 represent fixed deposits with banks with maturities of

more than 3 months. The Company has pledged its rights to receive deposits from bank accounts toa group of lenders to secure the Companyûs long-term loans from the group of lenders.

9. TRADE ACCOUNTS RECEIVABLEThe outstanding balances of trade accounts receivable of subsidiaries as at 31 December 2007

and 2006 are aged, based on due date, as follows:(Unit : Baht)

Consolidated

financial statements

2007 2006Age of receivables

Not yet due 22,515,220 9,838,145Past due

Up to 3 months 15,091,006 2,266,9713 - 6 months 474,264 1,149,7976 - 12 months - 2,129,538Over 12 months 2,994,180 1,248,808

Trade accounts receivable 41,074,670 16,633,259Less: Allowance for doubtful accounts (2,546,901) -Trade accounts receivable, net 38,527,769 16,633,259

10. INVESTMENTS IN SUBSIDIARIES(Unit : Baht)

Separate financial statementsDividend received for the

Companyûs name Paid-up capital Shareholding percentage Cost year ended 31 December2007 2006 2007 2006 2007 2006 2007 2006

(Million (Million (Percent) (Percent) (Restated)Baht) Baht)

Metro Mall Development Limited 100.0 91.0 64.00 64.00 64,000,000 64,000,000 - -BMCL Network Limited 150.0 127.5 70.00 70.00 104,999,980 89,249,980 - -Triads Networks Company Limited 25.0 25.0 56.00 56.00 14,000,000 14,000,000 2,239,936 -Total 182,999,980 167,249,980 2,239,936 -Less : Allowance for loss on diminution of investments in subsidiary (64,000,000) (57,073,658) - -Investments in subsidiaries, net 118,999,980 110,176,322 2,239,936 -


95

Metro Mall Development LimitedOn 10 November 2006, an extraordinary general meeting of the shareholders of a subsidiary,

Metro Mall Development Limited, approved the increase of its registered capital by Baht 50 million(5 million ordinary shares of Baht 10 each) to Baht 100 million (10 million ordinary shares of Baht 10each). The subsidiary registered the increase in its capital with the Ministry of Commerce on 29December 2006. The subsidiary initially called up Baht 5 per share of the price of the new shares.

A meeting of the Board Directors of the Company passed a resolution approving the purchaseof 3.2 million of the additional ordinary shares of the subsidiary, such that the Company wouldcontinue to hold a 64 percent interest in the equity of this subsidiary. In December 2006, the Companypaid in the called up capital of Baht 5 per share, or a total of Baht 16 million. However, it also paid inthe remaining uncalled portion of the shares, amounting to Baht 16 million, at the same time.

BMCL Network LimitedDuring the second quarter of the year 2006, the Company sold 3,150,000 ordinary shares in

BMCL Network Limited, equivalent to 30 percent of its share capital, to a director of that company ata price of Baht 10 per share, or for a total of Baht 31,500,000. The Companyûs interest in the equity ofBMCL Network Limited thus decreased to 70 percent.

A meeting of the Board Directors held on 10 November 2006 passed a resolution to purchase3.15 million additional ordinary shares of Baht 10 each of BMCL Network Limited (a subsidiary), or atotal of Baht 31.5 million. The Company continues to hold a 70 percent interest in the equity of thisCompany. In December 2006, the Company paid in called up capital of Baht 5 per share, or a total ofBaht 15.75 million, and it paid in the remaining Baht 15.75 million, in proportion to its shareholding, inJanuary 2007.

The Company has pledged certain share certificates of investments in these three subsidiarieswith a group of lenders to secure the Companyûs long-term loans from the group of lenders.

11. PROJECT COSTS(Unit : Baht)

Consolidated Separatefinancial statements financial statements2007 2006 2007 2006

M&E Equipment 12,454,173,275 12,380,567,755 12,454,173,275 12,380,567,755Project management fees per agreement 2,464,094,957 2,464,094,957 2,464,094,957 2,464,094,957Consultant fees 607,009,297 607,009,297 607,009,297 607,009,297Depot building and administration building 1,256,549,307 1,255,892,166 1,256,549,307 1,255,892,166Interest expenses 1,264,616,711 1,264,616,711 1,264,616,711 1,264,616,711Others 1,351,780,778 1,011,482,530 1,351,780,778 1,011,482,530Total 19,398,224,325 18,983,663,416 19,398,224,325 18,983,663,416Less : Accumulated amortisation of Project costs (647,615,030) (453,308,355) (647,615,030) (453,308,355)Project costs, net 18,750,609,295 18,530,355,061 18,750,609,295 18,530,355,061Amortised expenses included in the income

statements for the year 194,306,675 156,605,134 194,306,675 156,605,134

96


M&E Equipment, Depot building and Administration building will be transferred to the Mass

Rapid Transit Authority of Thailand at the end of the concession agreement period of 25 years, on an

Acquire, Operate and Transfer basis.

The Company has assigned the Projectûs M&E equipment, depot building and administration

building to a group of lenders to secure the Companyûs long-term loans from the group of lenders.

During the year 2007, the Company transferred non operating telecommunication equipment to

project costs.

12. EQUIPMENT(Unit: Baht)


Equipment

and rental area

at station Telecommunication Advertising Office Office Motor Assets under

improvement Equipment equipment equipment furniture vehicles construction Total

Cost:

31 December 2006 44,316,725 2,942,036 33,805,145 75,760,245 32,476,309 22,188,977 263,068,510 474,557,947

Additions 2,162,409 21,700 10,607,763 9,645,980 1,487,280 3,711,743 16,341,596 43,978,471

Disposals/write off - (2,312) - (2,754,632) (624,000) (267,500) - (3,648,444)

Transfers from non operating

telecommunication

equipment - 45,948,056 - - - - - 45,948,056

31 December 2007 46,479,134 48,909,480 44,412,908 82,651,593 33,339,589 25,633,220 279,410,106 560,836,030

Accumulated depreciation:

31 December 2006 6,748,327 1,469,162 7,321,362 41,874,765 11,997,457 10,663,195 - 80,074,268

Depreciation for the year 5,209,958 2,499,061 7,436,564 14,535,932 5,370,018 4,482,921 - 39,534,454

Depreciation on disposal

/write off - (1,325) - (2,631,248) (623,993) (267,499) - (3,524,065)

31 December 2007 11,958,285 3,966,898 14,757,926 53,779,449 16,743,482 14,878,617 - 116,084,657

Net book value:

31 December 2006 37,568,398 1,472,874 26,483,783 33,885,480 20,478,852 11,525,782 263,068,510 394,483,679

31 December 2007 34,520,849 44,942,582 29,654,982 28,872,144 16,596,107 10,754,603 279,410,106 444,751,373

Depreciation for the year:

2006 35,315,108

2007 39,534,454


97

(Unit : Baht)


Office Office Motor

equipment furniture vehicles TotalCost:31 December 2006 66,643,503 27,621,564 16,660,295 110,925,362Additions 8,848,890 1,336,192 2,579,000 12,764,082Disposals/write off (2,754,632) (624,000) (267,500) (3,646,132)31 December 2007 72,737,761 28,333,756 18,971,795 120,043,312Accumulated depreciation:31 December 2006 38,051,864 9,356,332 10,255,669 57,663,865Depreciation for the year 12,581,403 4,374,293 3,201,842 20,157,538Depreciation on disposal/write off (2,631,248) (623,993) (267,499) (3,522,740)31 December 2007 48,002,019 13,106,632 13,190,012 74,298,663Net book value:31 December 2006 28,591,639 18,265,232 6,404,626 53,261,49731 December 2007 24,735,742 15,227,124 5,781,783 45,744,649Depreciation for the year:2006 19,805,9712007 20,157,538

As at 31 December 2007, certain furniture and office equipment and motor vehicles items have

been fully depreciated but are still in use. The original cost of those assets amounted to approximately

Baht 18.8 million (2006: Baht 11.7 million) (Separate financial statements: Baht 17.6 million, 2006: Baht

11.7 million).

13. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTION

(Unit: Baht)

Interest rate Consolidated Separate

(percent per financial statements financial statements

annum) 2007 2006 2007 2006Bank overdrafts MOR+0.5% 7,261,297 1,581,672 - -Short-term loans from financial institutions 7.375% 5,000,000 - - -Total 12,261,297 1,581,672 - -

Bank overdrafts of a subsidiary are guaranteed by a related company.

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14. LONG-TERM LOANSOn 19 December 2001, the Company entered into a long-term loan agreement with a group of

domestic lenders (Onshore Facilities Agreement), comprising by 4 commercial banks, as follows:(Unit: Baht)

Consolidated SeparateInterest rate financial statements financial statements

Loan (percent per annum) Repayment schedule 2007 2006 2007 2006Tranche A - 7.75 for the first 2 years from Repayment in quarterly 10,740,000,000 10,890,000,000 10,740,000,000 10,890,000,000

the date of the agreement installments commencing- MLR+0.25 for the third year until March 2006, with the final

the Project Completion Date installment due in- MLR after the Project December 2016

Completion DateLong-term loans 10,740,000,000 10,890,000,000 10,740,000,000 10,890,000,000Less: Current portion (550,000,000) (330,000,000) (550,000,000) (330,000,000)Long-term loans, net of current portion 10,190,000,000 10,560,000,000 10,190,000,000 10,560,000,000

Movements in the long-term loans account during the year ended 31 December 2007 aresummarised below.

(Unit: Baht)Consolidated Separate

financial statements financial statementsBalance as at 1 January 2007 10,890,000,000 10,890,000,000Less: Repayment (150,000,000) (150,000,000)Balance as at 31 December 2007 10,740,000,000 10,740,000,000

On 22 August 2007, the Company entered into the çSupplemental Agreement to the OnshoreFacilities Agreement (No. 4)é with a group of domestic lenders in order to reschedule the Trenche AFacility.

The loans are secured by the mortgages of the Projectûs M&E equipment, depot building andadministration building, pledges of the Companyûs share certificates, share certificates of investmentsin subsidiaries, sponsors support, and the assignment of rights and obligations under the ConcessionAgreement and the rights to receive deposits in bank accounts.

The loan agreement includes covenants imposed by the lenders concerning, among otherthings, the proportion of shareholding of the principal shareholders, changes of the Companyûsmanagement, entering into other loan agreements, entering into any new business or activity whichis not related to the Project and the maintenance of certain financial ratios.

As at 31 December 2007, the Company was unable to maintain certain financial ratios stipulatedin the loan agreement. Under the agreement, the lender therefore have the right to call for immediaterepayment in full, to not allow the Company to withdraw or make any payments from bank accountsthat are pledged with the lenders together with certain other rights that are stipulated in the loanagreement. The Company has negotiated with its lenders and, on 26 February 2008, received a letterfrom its lenders approving a waiver from compliance with the above conditions. In practice, thecompany continues to pay principal and interest in accordance with the conditions stipulated in theoriginal loan agreement and classify the loans accordingly to the repayment schedule stipulated in thesuch loan agreement.


99

15. LONG-TERM LOANS FROM SHAREHOLDER AND ACCRUED INTEREST(Unit: Baht)

Consolidated Separatefinancial statements financial statements

Loan Subordinated Loan Agreement date 2007 2006 2007 2006CH. Karnchang Public Company Limited1 25 August 2005 28,090,793 28,090,793 28,090,793 28,090,7932 28 October 2005 80,000,000 80,000,000 80,000,000 80,000,0003 30 November 2005 50,000,000 50,000,000 50,000,000 50,000,0004 23 December 2005 100,000,000 100,000,000 100,000,000 100,000,0005 30 December 2005 233,000,000 233,000,000 233,000,000 233,000,0006 17 April 2006 100,000,000 100,000,000 100,000,000 100,000,0007 30 May 2006 60,000,000 60,000,000 60,000,000 60,000,0008 16 June 2006 52,000,000 52,000,000 52,000,000 52,000,0009 29 June 2006 100,000,000 100,000,000 100,000,000 100,000,00010 28 July 2006 100,000,000 100,000,000 100,000,000 100,000,00011 18 August 2006 100,000,000 100,000,000 100,000,000 100,000,000Long-term loans form shareholder 1,003,090,793 1,003,090,793 1,003,090,793 1,003,090,793Accrued interest 141,756,508 62,062,319 141,756,508 62,062,319

1,144,847,301 1,065,153,112 1,144,847,301 1,065,153,112

Movements in the long-term loans from shareholder account during the year ended 31 December2007 are summarized below.

(Unit: Baht)Consolidated Separate

financial statements financial statementsBalance as at 1 January 2007 1,065,153,112 1,065,153,112Add: Increase in accrued interest 79,694,189 79,694,189Balance as at 31 December 2007 1,144,847,301 1,144,847,301

The loans carry interest at a rate closing to MLR plus 0.5 percent per annum, and principal andinterest are to be paid after the Company has settled all indebtedness under the Onshore FacilitiesAgreement (as discussed in Note 14) or when the Company has excess cash.

16. SHARE CAPITAL/SHARE SUBSCRIPTION RECEIVED IN ADVANCEOn 30 June 2005, an extraordinary general meeting of the Companyûs shareholders passed

resolutions regarding the Companyûs registered share capital. These can be summarised as follows:a) Approved reductions of 300 million in the number of additional ordinary shares to be allotted

and offered to directors, management, and employees of the Company and 2,750 million in thenumber of ordinary shares to be allotted and offered by the way of public offering, in order tocomply with the allocation of the Companyûs share capital to the Mass Rapid Transit Authorityof Thailand.

100


b) Approved an increase of Baht 4,600 million in the Companyûs registered share capital, from Baht7,350 million to Baht 11,950 million, through the issuance of 4,600 million ordinary shares with apar value of Baht 1 each. The allocation of the additional ordinary shares is to be as follows.1) 2,600 million ordinary shares are to be allocated and offered to the Mass Rapid Transit

Authority of Thailand at the price equivalent to par value of Baht 1 each.2) 450 million ordinary shares are to be allocated and offered, in whole or in part, to

directors, management, and employees of the Company at a price equivalent to par value.These may be offered on one or several occasions. Any ordinary shares remaining afterthe allocation are to be allocated by means of public offerings, which may be made inThailand and/or abroad and on one or several occasions.

In this regard, the Executive Board or any persons assigned by the CompanyûsExecutive Board are granted the authority to determine the allocation of offering rights,and all details and conditions in respect of the number of ordinary shares to be offered oneach occasion, the offer period, the payment of the share price and the offer price.

3) 1,550 million ordinary shares are to be allocated and offered to the public. Any sharesremaining after this allocation are to be allocated, in whole or in part, by means of privateplacement and/or to institutional investors, in accordance with the relevant notifications ofthe Securities and Exchange Commission, on one or several occasions.

In this regard, the Executive Board or any persons assigned by the CompanyûsExecutive Board are granted the authority to determine the allocation of offering rights,and all details and conditions in respect of the number of ordinary shares to be offered oneach occasion, the offer period, the payment of the share price and the offer price.On 1 July 2005, the Company registered the reduction in its registered share capital to

Baht 7,350 million, comprising 7,350 million ordinary shares of Baht 1 each, with the Ministry ofCommerce, as discussed in a) above.

On 4 July 2005, the Company registered the increase in its registered share capital toBaht 11,950 million, comprising 11,950 million ordinary shares of Baht 1 each, with the Ministryof Commerce, as discussed in b) above.

During December 2005, the Companyûs directors, management and employees exercisedtheir rights to purchase 296,689,300 ordinary shares, as discussed in b) 2), at a price of Baht 1per share, for a total of Baht 296,689,300. The remaining 153,310,700 ordinary shares will beallocated by means of public offerings, as approved by a resolution of an extraordinary generalmeeting of the Companyûs shareholders. On 11 January 2006, the Company registered theincrease in its paid up share capital to Baht 7,646,689,300 comprising 7,646,689,300 ordinaryshares with a par value of Baht 1 each, with the Ministry of Commerce.

The Company recorded proceeds of Baht 296,689,300 from the offering of the Companyûsordinary shares to its directors, management and employee as çShare subscription received inadvanceé in the balance sheet as at 31 December 2005.

Subsequent to 1 February 2006, an extraordinary general meeting of the Companyûsshareholders passed resolutions regarding the Companyûs registered share capital. These canbe summarised as follows:1) Approved the cancellation of the resolution alloting 2,600 million additional ordinary shares

for offer to the Mass Rapid Transit Authority of Thailand.


101

2) Approved the cancellation of the allocation of the 153,310,700 remaining additionalordinary shares to be offered to directors, management, and employees of the Company,and their allocation through a public offering.

3) Approved a reduction of 1,550 million in the number of additional ordinary shares to beallotted and offered by the way of public offering.

4) Approved the allocation and offer of 1,315,810,700 ordinary shares by way of publicoffering. Any shares remaining after this allocation are to be allocated, in whole or in part,by means of private placement and/or to institutional investors, in accordance with therelevant notifications of the Securities and Exchange Commission, on one or severaloccasions.

In this regard, the Executive Board or any persons assigned by the CompanyûsExecutive Board are granted the authority to determine the allocation of offering rights,and all details and conditions in respect of the number of ordinary shares to be offered oneach occasion, the offer period, the payment of the share price and the offer price.

5) Approved the allocation and offer of 2,987,500,000 ordinary shares to the Mass RapidTransit Authority of Thailand at a price equivalent to par value of Baht 1 each.

Subsequent to 8 September and from 11 - 13 September 2006, the Company made apublic offering of 1,315,810,700 additional shares at a price of Baht 1.31 per share, or for a totalof Baht 1,723,712,017, and on 18 September 2006 received payment of this share capitalincrement. All expenses related to the share offering are presented as a deduction from theshare premium. In addition, on 21 September 2006, the Company received payment of a sharecapital increment from the Mass Rapid Transit Authority of Thailand amounting to Baht2,987,500,000. The Company registered the increase in its paid-up capital with the Ministry ofCommerce on 21 September 2006.

17. FARE BOX REVENUE AND COMMERCIAL DEVELOPMENT REVENUEUnder the Concession Agreement, the Company has agreed to pay a fee to the MRTA based on

the apportionment of revenue from fares and revenue from commercial development, as follows:17.1 Remuneration from fares

- Annual remunerationThe Company agrees to apportion revenue from fares to the MRTA on an annual

basis, commencing from the 11th year after commencement of the revenue-generatingservice until the end of the contract period. Total commitments amount to Baht 43,567million (inclusive of VAT), with annual commitments in the amounts stipulated in theagreement.

- Percentage remunerationThe Company agrees to apportion fares revenue to the MRTA in the form of

monthly payments, at a percentage of total revenue from fares (inclusive of VAT) from theyear it commences the revenue-generating service. The rates are 1 percent for the 1st -14th years, 2 percent for the 15th year, 5 percent for the 16th - 18th years and 15 percent forthe 19th - 25th years.

102


17.2 Remuneration from commercial development- Annual remuneration

The Company agrees to apportion revenue from commercial development to theMRTA on an annual basis from the year it commences the revenue-generating serviceuntil the end of the contract period. Total commitments amount to Baht 930 million(inclusive of VAT) with annual payments to be made in the amounts stipulated in theagreement.

- Percentage remunerationThe Company agrees to apportion 7 percent of annual revenue from commercial

development (inclusive of VAT) to the MRTA in the form of monthly payments, from theyear it commences the revenue-generating service until the end of the contract period.

18. NUMBER OF EMPLOYEES AND RELATED COSTSConsolidated Separate

financial statements financial statements2007 2006 2007 2006

Number of employees at end of year (persons) 1,090 1,040 1,006 941Employee costs for the year (Thousand Baht) 334,274 312,638 311,095 281,416

19. PROMOTIONAL PRIVILEGESThe Company was granted promotional privileges approved by the Board of Investment under

the Thai Investment Promotion Act B.E. 2520, for the MRTA Initial System Project - Chaloem

Ratchamongkhon Line (the blue line), under certificate No. 1029 (1)/2546, dated 16 January 2003.

Subject to certain imposed conditions, the main privileges include the following:

a) Exemption from import duty on imported machinery that is imported in accordance with

specified condition.

b) Exemption from corporate income tax on net income from the promoted operations for a period

of 8 years from the date the promoted operations commenced generating revenues (3 July

2004) and exemption from income tax on dividends paid from the profit of the operations

throughout the period in which the corporate income tax is exempted.

If losses are incurred during the corporate income tax exemption period, the Company is

allowed to utilise the losses as a deduction against net income for up to five years after the

expiry of the tax exemption period.

The Companyûs operating revenues for the years are below shown divided between the

promoted and non-promoted operations.


103

(Unit : Baht)Separate financial statements

Promoted operations Non-promoted operations Total2007 2006 2007 2006 2007 2006

(Restated) (Restated)Revenues

Fare box revenue 1,270,412,785 1,229,498,758 - - 1,270,412,785 1,229,498,758 Commercial development revenue - - 63,399,856 58,240,273 63,399,856 58,240,273 Other income - - 24,253,909 6,755,603 24,253,909 6,755,603

Total revenue 1,270,412,785 1,229,498,758 87,653,765 64,995,876 1,358,066,550 1,294,494,634

20. BASIC LOSS PER SHAREBasic loss per share is calculated by dividing the net loss for the year by the weighted average

number of ordinary shares in issue during the year.

21. SEGMENT INFORMATIONThe Company and its subsidiariesû business operations involve two principal segments: (1) the

operation of the MRTA Initial System Project - Chaloem Ratchamongkhon Line and (2) commercialdevelopment, which includes the rental of retail space, provision of advertising services andtelecommunications services in underground train stations. These operations are mainly carried on inThailand. The various activities that comprise the commercial development seqment are presented asa single segment since the percentage of the total revenues from these activities to the consolidatedtotal is not material (i.e. less than 10 percent). As a result, financial information by segment ispresented as belonging only to the MRTA Initial System Project segment and to the commercialdevelopment segment.

Below is the consolidated financial information of the Company and its subsidiaries for theyears ended 31 December 2007 and 2006 by segment.

(Unit : Million Baht)Consolidated financial statements for the year ended 31 December

The MRTA CommercialInitial System development Elimination of

Project business Other inter-segmentsegment segment segments revenues Consolidation

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006Revenue from external customers 1,271 1,229 153 145 22 24 - - 1,446 1,398Inter-segment revenues - - 41 34 - 2 (41) (36) - -Total revenues 1,271 1,229 194 179 22 26 (41) (36) 1,446 1,398Segment income (loss) (306) (380) (27) (25) 22 26 (1) (2) (312) (381)Unallocated income and expenses:

Selling and administrative expenses (237) (232)Interest expenses (933) (1,061)Corporate income tax (3) (3)

Minority interest 10 8Net loss (1,475) (1,669)

104


(Unit : Million Baht)Consolidated financial statements as at 31 December

The MRTA CommercialInitial System development

Project businesssegment segment Total Elimination Consolidation

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006Project Costs net 18,124 18,336 627 194 18,751 18,530 - - 18,751 18,530Non operating

telecommunication equipment - - - 380 - 380 - - - 380Equipment, net 46 53 399 341 445 394 - - 445 394Unallocated assets 509 1,938Total assets 19,705 21,242

Transfer prices between business segments are as set out in Note 6 to the financial statements.

22. PROVIDENT FUNDThe Company and its subsidiary and employees have participated in TISCO Ruamtun 2

Registered Provident Fund as approved by Ministry of Finance in accordance with the Provident FundAct B.E. 2530. Both employees and the Company and its subsidiary contributed to the fund monthlyat the rate of 3 percent of basic salary. The fund, which is managed by TISCO Asset ManagementCompany Limited, will be paid to employees upon termination in accordance with the fund rules.During the year 2007, the Company and its subsidiary contributed Baht 7.3 million (Separate financialstatements: Baht 7.1 million) to the fund.

23. COMMITMENTS AND CONTINGENT LIABILITIES23.1 Capital commitments

As at 31 December 2007, the subsidiary had capital commitments of approximately Baht3 million, relating to the construction and design of the infrastructure system for retail space inthe underground stations.

23.2 Long-term service commitmentsThe Company has commitments in respect of the Procurement of M&E Equipment and

Maintenance of M&E Equipment and Trackwork contracts for periods of 10 years commencingfrom the Commercial Operation date.

As at 31 December 2007, future minimum service fees payable under these contracts,excluding escalation in accordance with the general consumer price index are as follows:

Million Baht Million EuroPayable within :

1 year 147 42 to 5 years 587 15Thereafter 220 6


105

23.3 Project management commitmentsThe Company has commitments from 2008 to 2009 under a project management

agreement with a joint venture dated 15 August 2000 and a supplemental agreement dated 18March 2004.

As at 31 December 2007, future minimum project management fees payables underthese contracts, excluding escalation in accordance with the general consumer price indexare as follows:

Million BahtPayable within :

1 year 312 years 17

23.4 Commitments under contracts to repair and maintain of infrastructure and civil works ofthe MRTA Initial System Project

The Company has commitments under 5 contracts with a related company and othercompanies to repair and maintain infrastructure and civil works of the MRTA Initial SystemProject - Chaloem Ratchamongkhon Line, dated 6 November 2003 and 1 June 2004, with twoaddition contracts dated 1 December 2006 and 1 March 2007. These contracts expire in 2011.

Future minimum maintenance fees payable under these contracts as at 31 December2007 are as follows:


1 year 1982 to 4 years 495

23.5 Commitments under contracts to repair and maintain of retail areas of the MRTA InitialSystem Project

The Company has commitments, under contracts with two companies to repair andmaintain of retail areas of the MRTA Initial System Project - Chaloem Ratchamongkhon Line,dated 1 September 2005 and 14 October 2005. These contracts will expire in 2011.

Future minimum maintenance fees payable under these contracts as at 31 December2007 are as follows:



23.6 Commitments under various services agreements

The Company and its subsidiaries have commitments under various services agreements

whereby as at 31 December 2007, future minimum service fees payable are as follows:Million Baht

Payable within :1 year 222 to 5 years 34

106


23.7 Operating lease commitmentThe Company and its subsidiaries had entered into several lease agreements in respect

of the lease of office building space and equipment. Future minimum rentals payable underthese leases as at 31 December 2007 are as follows:



23.8 Bank guaranteesAs at 31 December 2007, there were the following outstanding bank guarantees issued by

banks on behalf of the Company.ë A bank guarantee of Baht 150 million was issued to the MRTA in respect of certain

performance bonds required under the Concession Agreement.ë Bank guarantees totalling Baht 32.4 million were issued to the Metropolitan Electricity

Authority as performance bonds in respect of electricity meter installation at the powersubstations in the Depot area, Administration Building, and retail space in undergroundstations.

24. FINANCIAL INSTRUMENTS24.1 Financial risk management

The Companyûs and its subsidiariesû financial instruments, as defined under ThaiAccounting Standard No. 48 çFinancial Instruments: Disclosure and Presentationsé, principallycomprises cash and cash equivalents, trade accounts receivable, amounts due from relatedparties, loans, investments, and short-term and long-term loans. The financial risks associatedwith these financial instruments and how they are managed are described below.Credit risk

The Company and its subsidiaries are exposed to credit risk primarily with respect to tradeaccounts receivable, amounts due from related parties, loans and other receivable. The Companyand its subsidiaries manage the risk by adopting appropriate credit control policies and proceduresand therefore do not expect to incur material financial losses. In addition, the Company and itssubsidiaries do not have high concentrations of credit risk since they have a large customer base.The maximum exposure to credit risk is limited to the carrying amounts of receivables, amountsdue from related parties, loans and other receivables as stated in the balance sheet.

Interest rate riskThe Companyûs and its subsidiariesû exposure to interest rate risk relates primarily to cash

at banks, bank overdraft and short-term loan from financial institution and long-term borrowings.However, since most of the financial assets and liabilities bear floating interest rates or fixedinterest rates which are closed to the market rate, the interest rate risk is expected to beminimal.

Significant financial assets and liabilities as at 31 December 2007 classified by type ofinterest rate are summarised in the table below, with those financial assets and liabilities thatcarry fixed interest rates further classified based on the maturity date, or the repricing date ifthis occurs before the maturity date.


107


Fixedinterest rates Floating Non-interestwithin 1 year interest rate bearing Total Interest rate

(Million Baht) (percent perannum)

Financial Assets- Cash and cash equivalents 111 216 15 342 0.500 - 3.000- Trade accounts receivable, net - - 39 39 -- Amounts due from related parties - - 1 1 -- Other receivable - - 5 5 -

111 216 60 387Financial liabilities- Bank overdraft and short-term

loan from financial institutions 5 7 - 12 7.375 - 7.625- Construction and other payable

Related parties - - 7 7 -Other company - - 359 359 -

- Construction payable and accruedinterest to related party - 314 - 314 8.120

- Long-term loans - 10,740 - 10,740 7.375- Long-term loans from shareholder

and accrued interest - 1,145 - 1,145 7.6255 12,206 366 12,577


Fixedinterest rates Floating Non-interestwithin 1 year interest rate bearing Total Interest rate

(Million Baht) (percent perannum)

Financial Assets- Cash and cash equivalents 111 199 15 325 0.500 - 3.000- Amounts due from related parties - - 27 27 -- Other receivable - - 5 5 -

111 199 47 357Financial liabilities- Construction and other payable

Related parties - - 7 7 -Other company - - 344 344 -

- Long-term loans - 10,740 - 10,740 7.375- Long-term loans from shareholder

and accrued interest - 1,145 - 1,145 7.625- 11,885 351 12,236

108


Foreign currency risk

The Company has a significant foreign currency risk in respect of construction payable.

As at 31 December 2007, the Company has outstanding financial liabilities denominated in

euro amounting to EUR 3.18 million which have not yet been hedged against foreign exchange

risk (the majority of these liabilities are repayable within 1 year)

24.2 Fair values of financial instruments

Since the majority of the Companyûs and its subsidiariesû financial instruments are short-

term in nature or bear floating interest rates, their fair value is not expected to be materially

different from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled

between knowledgeable, willing parties in an armûs length transaction. The fair value is deter-

mined by reference to the market price of the financial instrument or by using an appropriate

valuation technique, depending on the nature of the instrument.

25. RECLASSIFICATIONIn addition to the change in accounting policy as mentioned in Note 4, which affects the

previously reported net loss and shareholdersû equity, certain other amounts in the financial

statements for the year ended 31 December 2006 have been reclassified to conform to the currentyearûs classification, but with no effect to previously reported net loss or shareholdersû equity other

than from the change in accounting policy.

26. APPROVAL OF FINANCIAL STATEMENTSThese financial statements were authorised for issue by the Companyûs Board of Directors on

26 February 2008.

bmcl 07

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