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WATER

ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

CONTENTS
10 12 14 15 Message from Chairman of the Board of Directors Audit Committee Report for Shareholders Vision, Mission and Corporate Value Special Articles Workforce focus to organizational Sustainability Tap Water Management : Key principle for development of sustainable city 18 21 25 32 38 40 42 43 44 45 56 57 60 62 75 76 79 81 82 83 Financial Highlights Operation Result Analysis and Report Good Corporate Governance Report Social, Community and Environmental Activites General Information of the Company Nature of Business Characteristics TTW and Its Subsidiaries Structure List of Subsidiaries Shareholding Structure Management Structure Divend Policy Risk Factors Internal Audit Board of Director and Management Profile Number of Shareholding by Directors and Mangement Compensation Paid to Directors, Management and All Employees Related Transactions Report on the Board of Directors Responsibility on the Financial Report Independent Auditors Report Financial Statements

THAI TAP WATER SUPPLY COMPANY LIMITED

WATER
We provide full service of water management and wastewater treatment which could balance water life cycle and lead to the most benefit and equality to everyone in the society.

WATER

MANAGEMENT

Water Water is the vital natural resource to humanity. To obtain suitable clean water for consumption and Industrys production, Thai Tap Water Supply Plc. has committed on water quality improvement which we complied with International standard by following 3 main principles : Cleanness, Sufficiency and Continuousness . Everyone could trusts in our tap water and use water with the most maximum benefit.

Cleanness:

Sufficient:

Continuousness:

We have implemented computer system to control the waters production and transmission so that we could control our waters quality at all times, and also have been tested and verified the quality by Department of Health, Ministry of Public Health. So we are confident that our distributed tap water is clean and drinkable quality grade.

We established the tap waters production system with maximum capacity of 440,000 cubic meters per day together with five water storage tanks to contain water of total 150,000 cubic meter, spread into different locations to ensure that each supplied area has sufficiency of tap water quantity and water compression at all times.

We have designed and installed production units and water pumps as reserved units in case of emergency, and implemented computer system in administration and maintenance to continuously support water distribution to consumers for 24 hrs.

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QUALITY OF LIFE

WATER
ENERGY RENEWABLE ENVIRONMENT RESPONSIBILITY

MANAGEMENT

Equation for Sustainability

THAI TAP WATER SUPPLY COMPANY LIMITED

RENEWAL ENERGY
We have studied the alternative energy and solar energy projects in order to expand our business to all alternative energies, such as wind farm energy and renewable energy in various types which could bring balance to the environment.

At the present, the air pollution and global warming are mainly caused by exhausted emission from fuel combusted. As a consequence, these problems could be solved by energy sector, have to take considered on future sufficient energy factor in to account. Thai Tap Water Supply Plc. has aware of the problem thus we have studied, invested in innovation and prepared ourselves to use renewal energy properly.

ENERGY

RENEWABLE

Solar energy Thailand is located in tropical zone, with high potential to produce solar power electricity. Currently, the solar power electricity can be generated by solar cell technology which is eco-friendly technology and also reduces carbon dioxide emission in the atmosphere. The company, therefore, focuses to invest in this business for the first priority and believe it could enhance Energy Security in the country.

Wind Energy

Other kinds of Energy

Wind energy comes from natural source which could be used unlimited. The company is interested in and also conducts the feasibility studies. Although wind farm has been operated in several countries but, its only in the beginning state in Thailand. As the result, the company would like to be the first pioneer of wind energy producer in Thailand.

Besides solar energy and wind energy, the company also pay attention and would like to develop other kinds of energy, especially Biomass. As Thailand is the agricultural country with abundance of natural raw materials such as husk, bagasse, coconut palm, corncob, firewood, grass and others. This is a good opportunity for the company to study and collect data for investment in related business including waste to energy. As the expansion of the urban area and consumption increasing, these factors lead to the rise in communitys waste in every year. Additionally, the company is aware of the environmental problem from waste, so the company has studied and looked for opportunity to build waste to energy electricity , not only to reduce waste amount but also to feed electricity into the system without importing the fossil fuel .

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ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

SUSTAINABILITY

ENERGY
WATER MANAGEMENT ENVIRONMENT RESPONSIBILITY

RENEWABLE

Equation for Sustainability

THAI TAP WATER SUPPLY COMPANY LIMITED

ENVIRONMENT
We walk together with environmental consciousness and awareness. Meanwhile we support in all environmental problem solving for better living society and our organization sustainable growth.

ENVIRONMENT

RESPONSIBILITY

Thai Tap Water Supply Plc.is committed to operate business with environmental protection, pollution control and environmental improvement to enhance the well- being of everyone in the society and sustainable growth simultaneously by following these guidelines:

1
Strictly be complying with Environmental Law and Regulations and be having business policy to encourse the effective consumption on natural resources, raw materials, and energy. Meanwhile be cooperating in environmental protection.

2
Be supporting our cooperation on environmental activities to all communities.

3
Be applying eco-friendly businesss policy in the companys business plan, such as communities waste water treatment and waste to energy.

WATER

ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

HAPPINESS

ENVIRONMENT
WATER MANAGEMENT ENERGY RENEWABLE

RESPONSIBILITY

Equation for Sustainability

THAI TAP WATER SUPPLY COMPANY LIMITED

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MESSAGE FROM CHAIRMAN OF THE BOARD OF DIRECTORS

Dr. Thanong Bidaya

Chairman of the Board of Directors

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IN 2012
Thai Tap Water Plc. has been engaging in tap water production and distribution business for almost a decade. We are committed to become Thailands leading company in water supply, energy and environment businesses. Our successful performance and continuing growth during the past years have proved our best effort in conducting business for the benefit of both the company and the Thai society.

To ensure peoples access to clean and high quality water, we have planned to expand the production capacity in our existing service areas of Nakhonpathom, Samutsakhon and Pathumthani. In addition, we set our new goal by shifting from tap water-oriented business to be Thailands leading public utility company. In this regard, the company has firstly entered into energy business by investing in CK Power Co.,Ltd., a shareholder of a hydroelectric company generating power from Nam Ngum 2 Dam in Lao PDR. Furthermore, we have conducted a number of feasibility studies for the investment in other businesses. In 2013, in order to ensure our secured presence in the SET50, together with high quality growth and good corporate governance, we continue to improve our service quality to reach international standards with the goal to meet the most satisfaction of our stakeholders. By doing so, we place high priority to the proactive teamwork approach, professionalism, and consistent self-improvement. Besides, we are well aware of our mission in building up good value to the Thai society. With the collaboration of the Wildlife and Plant Conservation Department, Ministry of Natural Resources and Environment, we have initiated the-five-year-One-Million Trees Planting Project with the objective to afforest trees in Thong Pha Phum National Park, Kanchanaburi Province. The area is water sources of Mae Klong River and Tha Chin River. On behalf of the Board of Directors, the management and the staff of Thai Tap Water Plc., I would like to take this opportunity to sincerely thank all of you for your confidence and support. Let me repeat that we are ready to the steady, consistent and sustainable growth during the year to come.

Dr. Thanong Bidaya

Chairman of the Board of Directors

THAI TAP WATER SUPPLY COMPANY LIMITED

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AUDIT COMMITTEE REPORT FOR SHAREHOLDERS

Techapit Sangsingkeo

Chairman of Audit Committee

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The Audit Committee has performed the duties independently within scopes and responsibilities as assigned by the Board of Directors. The Audit Committee has given opinions and advices to ensure equal benefits of all stakeholders in line with good principles and guidelines for the Audit Committee. The Audit Charter of the Audit Committee has been determined and approved by the Chairman of the Board of Directors, provided that the scopes of responsibilities have been stipulated to notifications of the Stock Exchange of Thailand.
The Audit Committee of Thai Tap Water Supply Company Limited (the Company) has been assigned by the Board of Directors. The Audit committee comprises 3 independent directors having various experiences such as management, finance, accounting, economic, and law. The Chairman of the Audit Committee is Mr. Techapit Sangsingkeo, and 2 members of the Audit Committee are Mr. Phairuch Mekarporn and Mr. Somnuk Chaidejsuriya. The Head of Internal Audit Division acts as the secretary of the Audit Committee. In the year 2012, four meetings of the Audit Committee were held, including the meetings with the management, internal audit offers and auditors of the Company. The Audit Committee reported the meeting results and performance to the meeting of the Board of Director quarterly. Accordingly, the Audit Committee performed all of the duties as set in the Audit Charter. Key performances are summarized as follows. Review the accuracy, completeness, reliability, transparency and sufficient disclosure of the quarterly financial statements and 2012 financial statements of the Company and its subsidiaries before submission to the Board of Directors.

Review the sufficiency of the internal audit systems of the Company whether it is able to efficiently and effectively prevent or reduce faults, damages or frauds. Review the compliance with securities and stock exchange laws, regulations of the Stock Exchange of Thailand, and other relevant laws. Review an internal audit function and give opinions on annual audit plans. Acknowledge audit results and give advices on monitoring reports and amendment to ensure the proper and effective operation of the internal audit. Select and appoint an auditor, and propose an audit fee to the Board of Directors. The Audit Committee proposed the Board of Directors to appoint Miss Siraporn Ouaanunkun, the Certified Public Accountant No. 3844 and/ or Mr. Supachai Phanyawattano, the Certified Public Accountant No. 3930 and/ or Mr. Khitsada Lerdwana, the Certified Public Accountant No. 4958 of Ernst & Young Office Ltd., to be the auditor of the Company in 2012. The aforementioned persons have reliable qualifications and conduct duties in line with auditing professional standards. The audit fee of, not exceeding, 1,235,000 Baht is proposed to the meeting of the Board of Directors for consideration, and to the meeting of the shareholders for approval. In summary, in the opinions of the Audit Committee, the 2012 financial statements of the Company and subsidiaries are prepared in line with the generally accepted accounting principles. The information is disclosed sufficiently, accurately, completely and reliably. The internal audit systems are set efficiently and effectively. The operation of the Company and subsidiaries are in compliance with securities and stock exchange laws, regulations of the Stock Exchange of Thailand, and other related laws.

Techapit Sangsingkeo

Chairman of Audit Committee

THAI TAP WATER SUPPLY COMPANY LIMITED

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VISION
TO BE THAILANDS LEADING COMPANY IN WATER, ENERGY AND ECO-FRIENDLY BUSINESSES.
MISSION
TO GROW ON A FIRM, CONTINUOUS AND SUSTAINABLE BASIS IN ORDER TO ACCOMPLISH OUR VISION THROUGH THE BALANCE OF INTERESTS AMONG CUSTOMERS, EMPLOYEES, BUSINESS PARTNERS, SHAREHOLDERS, COMMUNITIES AND ENVIRONMENTS. CONTINUOUS IMPROVEMENT PROACTIVE & INITIATIVE AND TEAMWORK

CORPORATE VALUES
RUNNING BUSINESS TO FULFILL OUR VISION AND MISSION ON THE BASIS OF SHARING HIGHEST SATISFACTION AND BENEFITS AMONG STAKEHOLDERS BY MEANS OF:

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SPECIAL ARTICLES
Workforce focus to organizational Sustainability
Thailands Leading Company in Water, Energy and Eco-Friendly Businesses.
TTW has created properly human resource management system in line with leadership system. The below picture shows the human resource management system of TTW.

With a vision to be

The human resource management system of TTW

Vision

Strategy Formulation

Strategy Implementation

Mission

Business Target
Review and Follow - up and Evaluation

Business Strategy

Revision

TTW believes that the success of the organization obviously depends on the knowledge, skills, ability, creativity and motivation of the employees. Therefore, TTW intend to build Employee Satisfaction, which play a significant role in defining organizational success, by various methods such as providing the employees with career development opportunities, providing the employees appropriate training and development programs, providing the employees a safe and pleasant working environment and also providing the employees the creative activities to foster positive employee relation etc. At the present, the human resource management system of TTW can be divided into two main following aspects.

THAI TAP WATER SUPPLY COMPANY LIMITED

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1. Employees ability management, consists of 1.1 Identifying the skills, knowledge and behavior necessary to perform the job effectively in the job description (JD) and the job specification (JS) clearly. 1.2 Defining and developing a competency framework by linking individual competencies to TTW core competencies. 2. Developing human resource management system 2.1 The recruitment and selection process TTW believes that Putting the right man on the right job at the right time is the key factor for organizational success. Thus, TTW pay special attention on conducting the recruitment process carefully from start to finish in order to ensure that the organization get the best, qualified candidate most closely matched the qualifications specified in the job description and job specification. According to the TTW recruitment policy, the vacancy at chief level or above is filled by promoting an appropriate candidate from the organization and subsidiaries first. This because the company trusts in the employees capabilities. If there is no qualified candidate, the external sources of recruitment (such as campus recruitment, advertising, internet etc.) are then a channel used for attracting and selecting a qualified candidate for a vacant position. 2.2 Employee training and development It is critical to the success of the organization to create a culture that encourages, supports, and invests in the short- and long-term organizational development of their employees. TTW has implemented the Individual Development Plan (IDP) as a significant instrument for enhancement the employees performances and capabilities. In this regard, each employee has the primary responsibility or working closely with their supervisor to develop and monitor their IDP. At the same time, supervisors are responsible for assisting each of their employees in the development of their IDP and supporting developmental activities outlined in the IDP. It can be concluded that the IDPs can be a win/win strategy because they benefit both the employee and the organization. Employees benefit, because implementing an IDP helps

them improve their knowledge, skills, and experiences. Improved competencies help them achieve personal and career goals. The organization benefits by developing improved employee capabilities can make the organization more effective. 2.3 Performance appraisal Performance appraisal of TTW is linked with company vision and company target. In the others word, the employees at all level have to work to meet the standards set by the organization. Job performance of the organization is evaluated twice a month through management meeting in order to share the division performance. Moreover, executive committee is conducted quarterly for reporting and evaluating the organization performance. 2.4 Compensation and benefit management Its seem reasonable to believe that a well-designed compensation and benefits plan assists to attract, motivate and retain talent in the organization. With the belief, TTW provides the employees a comprehensive, competitive, remuneration package that include both finance (e.g. a competitive and fair base salary and an annual bonus based on employee and company performance targets etc.) and non-finance rewards (e.g. praise or recognition, job promotion, job rotation etc.) At TTW, there are several awards provided the employees for employee recognition such awards as, Thai Tap Award, Rooky Award, Thai Tap Innovation Award etc. The employee recognition method was performed and reviewed by Human Resource & Administration Division.

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Tap Water Management: Key principle for development of sustainable city

we should incite the government to concentrate on the proper way to manage water in each area in order to gain the maximum benefit because water is an important part of city development.
the amount of the water in The Tha Chin River is sufficient to produce tap water each year.
the amount of the water in The Tha Chin River

As both local and foreign institutional Investors frequently ask the company during the meeting regarding cleanness and sufficiency of raw water to produce tap water covering the duration of Water Sales Agreement with PWA indicating Investors concern about the feasible risk of the companys performance. The Company therefore provides Investors additional information for the purpose of improving their confidence. The Tha Chin River, an important branch of the Chao Phraya River, is separated at Singh District, Chainat Province. It flows through Suphanburi, Nakhonpathom and drains to the Gulf of Thailand at Bangyaprek Sub-District, Muang District, Samuthsakorn Province. The total length is about 325 kilometers. The Tha Chin River has many regional names. After it is split from Chao Phraya River at Chainat, its called Makham Thao River; while passing Suphan Buri, its called the Suphan River; while passing Nakhon Pathom, it becomes the Nakhon Chai Si River. Also its called the Tha Chin River while passing Samut Sakhon. Normally, the river water level is higher in the fourth quarter but lower from March to May. The fluctuation is based on normal seasonal changes such as rainfall in the third quarter and hot weather from March to May. Although waters level in the Tha Chin River from March to May 2553, 2554 and 2555 is the the lowest level comparing with other period of time in the same year, It still remains at approximate 7 mil. cubic meters per day for the least amount in 2553 and about 20 mil. cubic meters per day for the most amount in 2554. Its evident that the amount of the water in The Tha Chin River is sufficient to produce tap water each year. However, the improper water management by draining the huge amount to the Gulf of Thailand may cause the drought or the mega flood sometime occurred in Thailand. Therefore, we should incite the government to concentrate on the proper way to manage water in each area in order to gain the maximum benefit because water is an important part of city development. Water is also considered as basic utilities for life. If we dont realize that water management is as important as transportation and electrical power systems improvements, the water will not be adequate for daily life as recently occurred in some areas.

about 20 mil. remains at approximate cubic meters 7 mil. cubic meters per day for the per day for the least most amount amount

THAI TAP WATER SUPPLY COMPANY LIMITED

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FINANCIAL HIGHLIGHTS

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ANNUAL REPORT 2012

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THAI TAP WATER SUPPLY COMPANY LIMITED

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Significant Financial Information


Description Total assets Total liabilities Shareholders equity Sales and services Total revenues Cost of sales and services Administrative expenses and management expenses Gross margin Net income Book value per share (Bt./share) Basic earnings per share (Bt./share) Consolidated Financial Statements For the year ended December 31 2012 2011 2010 24,670 13,927 10,743 4,925 5,273 1,495 262 3,430 2,421 2.69 0.61 21,728 11,537 10,192 4,546 4,635 1,323 222 3,223 2,113 2.55 0.53 21,488 12,005 9,484 4,395 4,420 1,294 197 3,101 2,063 2.38 0.52

(Unit : Million Baht) Separate Financial Statements For the year ended December 31 2012 2011 2010 23,994 13,792 10,202 3,245 4,141 870 190 2,375 2,124 2.56 0.53 21,348 11,395 9,954 3,017 3,746 748 167 2,269 2,063 2.49 0.52 21,167 11,876 9,291 2,968 3,554 762 135 2,206 1,959 2.33 0.49

Financial Ratio
Description Profitability ratios Gross profit margin (%) Net profit margin (%) Return on equity (%) Efficiency Ratios Return on assets (%) Return on fixed assets (%) Debt service coverage ratio Debt / Equity (times) Dividend Yield (%) Consolidated Financial Statements For the year ended December 31 2012 2011 2010 69.64 45.92 23.21 10.44 19.47 1.30 77.45 70.90 45.59 21.54 9.78 19.22 1.14 66.07 70.56 46.67 22.77 9.70 18.59 1.27 61.84 Separate Financial Statements For the year ended December 31 2012 2011 2010 72.20 51.30 22.40 10.10 16.23 1.35 88.29 74.97 55.06 21.40 9.70 15.62 1.14 67.67 73.11 55.11 21.89 9.32 16.54 1.28 64.21

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OPERATION RESULT ANALYSIS AND REPORT

come analysis of tap water sales


Incomes Tap water - Company Tap water - Pathum Thani Water Company Limited Total 2012 3,219.0 1,618.9 4,837.9 2011 2,988.0 1,473.1 4,461.1 Change 231.0 145.8 376.8

(Unit: Million Baht) Percentage 7.7 9.9 8.4

Income from Tap Water Sales


In 2011 and 2012, the company (TTW) and its subsidiaries had income from tap water sales of 4,461.1 Million Baht and 4,837.9 Million Baht respectively, an increase of 376.8 Million Baht or 8.4 % from the last year figure. The reasons are as follows: 1) The increase on tap water income was at 231.0 Million Baht or 7.7% due to an increase of sales volume of 11.1 Million m3 or 9.2% and also higher sales price. 2) Tap water income of Pathum Thani Water Company Limited (PTW) rose 145.8 Million Baht or 9.9% due to an increase of sales volume of 7.3 Million m3 or 5.6% and also higher sales prices. 5-year Sales price of tap water sold to Provincial Waterworks Authority (PWA) by TTW and PTW are summarized as follows. Sales Price of the company Period Jan - Dec 2008 Jan - Dec 2009 Jan - Dec 2010 Jan - Dec 2011 Jan - Dec 2012 1-300,000 m3 early (Baht / m3) 22.751945 23.552023 24.461331 25.110952 26.016170 From 300,001 m3 up (Baht / m3) 14.676799/10.75* 11.02 11.49 Sales Price of PTW (Baht / m3) 10.52 11.49 10.99 11.37 11.83

* Since 1 September 2010 - 31 December 2010

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Expense analysis
Expenses Cost of sales and services Administrative expenses Financial expenses Corporate income tax Total 2012 1,495.4 262.3 608.2 259.5 2,625.4 2011 1,323.0 222.0 518.0 210.9 2,273.9 Change 172.4 40.3 90.2 48.6 351.5

(Unit: Million Baht) Percentage 13.0 18.1 17.4 23.0 15.5

Costs of sales and services


Cost of sales and services of the company and its subsidiaries mainly comprised asset depreciation, electricity, and chemical substance, piping land lease, labor cost and consumables. In 2011 and 2012, the company and its subsidiaries recorded costs of sales and services at 1,323.0 Million Baht and 1,495.4 Million Baht respectively, increase of 172.4 Million Baht or 13.0%. The reasons are summarized as follows: 1) Higher sales volume of tap water of TTW and PTW 2) Increase of FT rate

Administrative Expenses
In 2011 and 2012, the company and its subsidiaries had administrative expenses of 222.00 Million Bah and 262.3 Million Baht respectively, a growth rate of 40.3 Million Baht or 18.1% due to higher insurance expenses, legal and advisory service fee.

Financial Expenses
Financial expenses in 2011 and 2012 were at 222.0 and 262.3 Million Baht, an increase of 90.2 Million Baht or 17.4% due to interest payment of 74.4 Million Baht from long-term loan of 2,760 Million Baht for investment in CKP, representing 30 percent of the registered capital of CKP.

Corporate Income Tax


The corporate income tax increase by 48.6 Million Baht or 23.0% due to privilege of corporate income tax exemption ending 20 July 2012, hence, the company has to pay for the tax after such date.

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Profit and Loss of Investment in associated companies Analysis


Portion of profit of investment in associated companies increased by 28.1 Million Baht due to the return on loan from CKP of 2,556 Million Baht in May 2012 caused a decrease of interest payment. In addition, CKP increased its share in Southeast Asia Energy (SEAN) from 38% to 56% in 2012.

Net Profit
In 2011 and 2012, the company and its subsidiaries gained the net profit of 2113.0 Million Baht or 45.6% and 2,421.3 Million Baht or 45.9%, respectively, an increase of 308.3 Million Baht or 14.6%.

Financial status report and analysis


Incomes Total assets Total liabilities Shareholders equity 31 Dec 2012 24,670.4 13,927.3 10,743.1 31 Dec 2011 21,728.3 11,536.6 10,191.7 Change 2,942.1 2,390.7 551.4

(Unit: Million Baht) Change 13.5 20.7 5.4

Analysis of assets
Main assets of the company and its subsidiaries comprised land, buildings and equipment for tap water production, which rights shall be transferred by expiration of agreements, rights to produce and distribute tap water, right on waste water treatment (net) and rights to produce and distribute tap water (net). As of 31 December 2012, the company and its subsidiary have total assets of 24,670.39 Million Baht, increasing from the last year by 2,942.09 Million Baht, due to additional investment in the company and its subsidiaries of 2,746.50 Million Baht.

Analysis of liabilities
Major liabilities of the company and its subsidiaries included corporate bond, long-term loans and long-term loans due in 1 year. As of 31 December 2012, the company and its subsidiary have the total liabilities of 13,927.3 Million Baht, increasing from the last year by 2,390.7 Million Baht due to long-term loan of 2,760 Million Baht for investment in associated companies. However, the company has already paid back the capital of 470 Million Baht.

Analysis of shareholders equity


As of 31 December 2012, the shareholders equity was recorded at 10,743.1 Million Baht, rose by 551.4 Million Baht from the last year. In this year, the company gained the net profit of 2,421.3 Million Baht and paid dividend of (1,875.3) Million Baht.

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Analysis of cash flows


Cash Flows from Operating Activities In 2011, the net cash flow for operating activities of the company and its subsidiaries valued 2,731.0 Million Baht, dropped by 56.9 Million Baht, or 2.0%. In 2011, the company and its subsidiaries paid higher interest and corporate income taxes. In 2012, , the net cash flow for operating activities of the company and its subsidiaries valued 3,384.3 Million Baht, increased by 653.3 Million Baht, or 23.9% due to higher profit from operating activities of 363.0 Million Baht and decrease of trade accounts payable and other accounts payable. Cash Flows from Investment Activities In 2011, the company and its subsidiaries had the cash flow from investment activities of (1,194.8) Million Baht, decreased from the 2010 figure. In 2011, the company had temporary investment and investment in subsidiaries increased. In 2012, the company and its subsidiaries had the cash flow from investment activities of (3,067.2) Million Baht, increased from the 2011 figure. In 2012, the company had investment in CKP by (2,730.0) Million Baht and long-term investment by (200.0) Million Baht. Cash Flows from Financing Activities In 2011, the company and its subsidiaries had the cash flow from financing activities of (1,642.9) Million Baht due to decrease of long-term loan of 450.0 Million Baht and the dividend payment of 120.4 Million Baht. In 2012, the company and its subsidiaries had the cash flow from financing activities of (392.6) Million Baht due to bond redemption of (3,500) Million Baht and a new bond issue of 3,495.7 Million Baht., an increase of long-term loan from financial institution of 2,287.2 and dividend payment of (1,874.8) Million Baht.

Audit Fee

In 2012, according to the resolution of the 2012 Annual Meeting of Shareholders on 16 March 2012, Ernst and Young Co., Ltd., was selected as the companys auditor. The audit fee was 1,235,000 Baht.

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GOOD CORPORATE GOVERNANCE REPORT

Good Corporate Governance Report


TTW sees its corporate governance and code of conduct as essential guidelines for the organization; therefore, the emphasis is strongly laid upon principles and practices concerning responsibility and fairness towards all stakeholders.

The Board of Directors has assigned the Corporate Governance Committee to take charge of corporate governance matters as well as to consider trends and movements at the international level in order to find areas for improvement. The Board of Directors, moreover, specifies corporate governance as one of the main items on the agenda at the Board of Directors meeting. The company also publishes and distributes booklets of Code of Conduct to its employees to create the corporate governance guidelines to ensure effective practice, details shown on companys website, www.thaitap.com TTW sees its corporate governance and code of conduct as essential guidelines for the organization; therefore, the emphasis is strongly laid upon principles and practices concerning responsibility and fairness towards all stakeholders. The principles include a clear outline of the structure, components, duties, independence and the performance of the Board of Directors, transparency of information disclosure, a strict auditing system and risk management policies. These build trust and create additional value among the shareholders. TTW has disclosed related information through various media, for example, the annual report, 56-1 form, websites of the Stock Exchange of Thailand (SET) and of TTW. In addition, the stakeholders have the opportunity to participate in improving the companys operating results through communications with the Investor Relation via e-mail, ir@thaitap.com. All suggestions will be carefully considered prior to reporting to TTWs executives and the Board of Directors for acknowledgement and consideration.

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Guidelines to Corporate Governance

The Rights of Shareholders


Shareholders, both as investors and owners of the company, are entitled to all basic rights at acceptable standards, which include the right to freely trade or transfer their own shares, the right to receive dividends from the company, the right to propose the agenda of the meeting, the right to nominate a person to be a director, the right to express opinions independently, the right to make decisions on important affairs of the company e.g. the election of directors, approval of significant transactions influencing the direction of the company. Shareholders have the right to vote at meeting according to the number of shares owned by each shareholder, whereby one share is for one vote and no particular share allows them privilege to limit the rights of other shareholders. Apart from the above mentioned rights of the shareholders, TTW has carried out additional tasks to encourage and facilitate shareholders in the exercising of their rights. 1. Provide essential, clear and up-to-date information for shareholders regarding the companys business through TTWs website and SET. 2. All shareholders will receive significant and sufficient detailed information concerning the date and the agendas prior to the date of shareholders meeting. The shareholders right to attend the meetings and the right to vote on resolutions will be clearly stated in the notice of the meeting submitted by the company. 3. In a case where shareholders are unable to attend a meeting, they are entitled to appoint a representative e.g. an independent director of a person to act as their proxy, using any proxy form attached to the notice of the meeting. The company has prepared the proxy forms in compliance with the specifications defined by the Ministry of Commerce in which the shareholders can exercise their voting rights as wished. In addition, TTW provides to shareholders the duty stamp to be sealed on the proxy form for their convenience. Shareholders who arrive after the meeting has commenced are able to vote on the agenda item being considered provided that a resolution is not yet made. They shall constitute part of the quorum starting from the agenda item that they are in attendance and exercise their voting rights.

4. Prior to the 2012 Annual Ordinary General Meeting of Shareholders, one or several shareholders holding 1 year consecutive in aggregate at least 0.050 % of all issued shares of the Company have the right to suggest issues to be included in the agenda of the Annual Ordinary General Meeting of Shareholders for 2012. The Company provided the proposed form to shareholders and they were allowed to exercise

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this right three months in advance between 1 October - 31 December 2011, so that the Nomination and Remuneration Committee could screen the issues before presenting them to the Board of Directors for consideration. However, no shareholder proposed any agenda item or candidate prior to the Meeting. 5. On the date of the meetings, the company uses the barcode system for registration to ensure convenience of shareholders as each reference number is already included in the registration form. In addition, for each agenda, the company will collect the ballot paper from the shareholders who vote disapprove or abstain in order to deduct the votes from the total entitled voting rights. The company applies the e-voting system to perform the calculation in order to ensure immediate voting results prompt for announcement right after the end of each agenda. Shareholders are entitled to verity each voting result after the meeting. 6. At the meetings, shareholders are allowed to freely express their opinions, give suggestions, and raise questions on any agenda item before casting votes to ensure that shareholders have sufficient detailed information on the matters. Should shareholders have questions or inquiries, specialists in specific fields are available to answer queries under the responsibility of the Boards. 7. An agenda on the Boards remuneration is included to inform the shareholders of the amount and type of remuneration received by each director including meeting allowance and the Boards bonus. The detailed information can be found in the companys annual report on page 76. 8. The agenda of the 2012 Annual Ordinary General Meeting of Shareholders was considered chronologically as it appeared in the invitation letter submitted to shareholders prior to the Meeting, without any changes in order or request for the Meeting to consider any agenda item other than those specified in the invitation letter.

The Equitable Treatment of Shareholders


Internal Information Control The Board of Directors has established measures to control the usage and prevent the misuse of internal information (insider trading) for the personal benefit of the concerned person, namely the Board of Directors, executives and employees working in related departments (including their spouses and children who are minors). 1. All concerned persons are prohibited from trading the company shares for a 24-hour period after the release of the companys quarterly and annual financial statements. 2. Should they have knowledge of confidential information that could have any impact on the companys share price; they are prohibited from trading the company shares until after a 24-hour period from the public disclosure. Conflict of Interest Prevention. The Board has established policies and measures as follows : 1. TTW has a clear and transparent shareholder structure. There is no cross-holding of major shareholders, thereby, preventing any conflict of interests or transfer of benefits to one party or another. The shareholder structure of TTW and its subsidiaries is published in the companys annual report, also the Board members ordinary shares and debentures. 2. There is a clear separation of duties and responsibilities of the Board, the management, and shareholders, thereby, ensuring no overlapping of their duties and responsibilities. The directors or executives who may have interests in any agenda under consideration must not attend the meeting nor vote on such agenda. This is to ensure that the Board and executives make decisions in a fair manner for the benefits of shareholders. 3. The company has an established policy governing the use of internal information.

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The Role of Stakeholders in Corporate Governance


The Board of Directors oversees the management system to ensure that the company acknowledges the right of stakeholders, both a stated by law and as written in Corporate Governance and Code of Conduct. The company also ensures that those rights and the shareholders, employees, customers and business partners are treated equally. Besides the basic rights of shareholders and the rights stipulated by the law and the companys regulations, such as the right to attend the shareholders meetings, the right to vote at the meetings, the right to freely express opinions at the shareholders meetings, and the right to receive a fair return, TTW also gives shareholders the rights, as the owner of the company, to make suggestions and comments on the companys affairs. Each comment and suggestion will be carefully considered and presented to the Board of Directors. TTW truly believes that employees are the most valuable assets and is determined to ensure that every employee is proud of and confident in the organization. In the previous year, TTW organized activities to promote a collaborative working environment to enhance the competence of employees. Furthermore, the company focuses on promoting employees health, safety, as well as good working conditions and competitive remuneration. It is concern to TTW that customers be provided with the benefits in terms of cleanliness, sufficiency and availability, and the company is determined to develop and maintain sustainable relationships with customers. It has set supporting activities to provide product information, solve problems and receive complaints in order to ensure satisfaction for customers. TTW operates its business by upholds promises, Code of Conduct and commitments. TTW practices under the terms of loans and obligations of its creditors. The Company has complied with all conditions and obligations toward creditors, such as business creditor, financial account, etc. It also has a project to build a relationship with creditors, such as suppliers and partner visiting. TTW ensures that its business operation is fair to related parties. The company supports activities which develop the quality of life and create happiness to community and society in which TTW operates. Furthermore, TTW encourages its employees and related parties to partake in activities that are beneficial to the community and society. TTW sets the guidelines for development which are applied to the operations of its business, aiming to respect of the environmental management. The concept is integrated in the designs of the production process and technology to make them eco-friendly and to minimize the impact to the community. Additionally, the company constantly raises awareness regarding environmental conservation and encourages its employees and related parties to participate in saving the environment.

Shareholders :

Employees :

Customer : Business partners : Creditors :

Society :

Environment :

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Disclosure and Transparency


TTW realizes the importance of information disclosure as it greatly affects the decision-making of investors and stakeholders. TTW is committed to obeying the law, regulations and obligations mandated by the Securities and Exchange Commission (SEC), SET and other related government sectors. 1. Disclose accurate, complete and timely financial information and non-financial information. 2. Prepare the report of the Boards responsibility for financial statements and present it along with the Audit Committees report in an annual report. 3. Require the companys directors and executives report the interests of themselves and related person which are vested interests relating to management of the company or subsidiaries through the Company Secretary, who will gather, store and submit the documents to the Chairman of the Board of Directors and the Chairman of the Audit Committee for acknowledgement within 7 days the company receives the documents. 4. Announced a policy requiring all directors to disclose and/or report their securities trading and holdings to the Company. 5. Disclose the performance and attendance record of each member of the committee.

6. Disclose detailed information on the operation and investment structure in subsidiaries and associate companies. 7. Disclose information on the remuneration each director receives as a member of the committee. In addition, the Company has a policy not to support any violation of intellectual property rights or copyright. It represents the spirit of the Company to conduct business with fairness. The guidelines are as follows : 1. The work of the compliance function is an intellectual property of the Company. 2. Effect or a right of any third party information received or to be used within the Company must be checked to ensure that it will not infringe the copyright or intellectual property rights of others. Monitoring system from the procurement process, installation to use software and database of various computer programs active in the organization currently. To ensure compliance with the Computer Acts related offenses in 2007.

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A clear policy on how to deal with creditors

The Company intends to supply goods and services to the highest standards and ethics operates under the following principles. a) b) c) d) a competitive bidding and selection of an appropriate and fair, the criteria for evaluation and selection of suppliers and contractors, make a reasonable contract, to provide for management and monitoring to ensure that the operating conditions, of the contract in its entirety in order to prevent fraud, misconduct at all stages of the procurement process.

Policies and practicesto educate and train employees in environmental matters

The Companys operations depends on the natural environment, awareness of the business with commitment to engage with environmental responsibility. Reduce resource use and waste, added ability to use resources effectively. Cultivate participation in health care and environmental responsibility to the employees. The approach recognizes that all employees have a total impact on the environment. 1) Would comply with environmental laws and regulations, 2) Promote employee knowledge, understanding about the need to protect the environment both education and training. 3) Exchange of knowledge and experience with both internal and external agencies as well as the companies listed on the Stock Exchange. The goals is to prevent a negative impact on the environment. Employees to perform continuously and can track their progress regularly.

All stakeholders can contact/ report to the Board of Directors or the Audit Committee directly

The channel for all stakeholders have complained to the secretary of the Audit Committee. To report directly to the Audit committee by contacting the secretary of the Audit Committees website at ia@thaitap.com

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Information Dissemination Channels

The company has provided a communication channel for stakeholders to contact the Secretary to the Audit Committee who directly reports to the Audit Committee via website: ia@thaitap.com The company places great importance upon transparency and full disclosure of significant financial, operational, and other relevant information. In addition to fulfill legal and SET reporting requirement, the company has established its own broad infrastructure of dissemination channels to reach related parties. These communication channels include. 1. Availability of Investor Relation Department (IR) for direct communication with local and international investors, 2. Arrangement of Press Conferences on an annual basis to announce operating results and regularly press briefings to announce significant investment projects and activities, 3. Arrangement of analyst meeting to announce semi-annually operating results to investors and stakeholders, 4. Arrangement of activities to meet both local and international investors and other stakeholders, 5. Arrangement of company visit and plant tour for stakeholders, analysts, NGOs, communities, media and other stakeholders, 6. Distribution to the media of press releases, such as captioned photographs, news stories and advertisements, 7. Arrangement of publication and media, such as annual report, sustainability report, TTWs E-News Letter journal, 8. Distribution to employees of press releases via electronic media, such as intranet and e-mail, 9. Disclosure relevant information on companys website: www.thaitap.com.

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SOCIAL
COMMUNITY AND ENVIRONMENTAL ACTIVITIES

Social, Community and Environmental Activities

In 2012
the company had participated in various social, community and environmental activities as follows;

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Social Activites

Community Activities

Environmental Activities

Thai Tap Junior Water Prize (TTJWP) Robes Offering Ceremony (THOT KATHIN) Tapasa Foundation or Moonnithi Phradabos

Childrens Day Celebration Dredging of Madua canal (Klong Madua) Contribution for Water Conservative Conference

1 million Tree Planting

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Social Activites Thai Tap Junior Water Prize (TTJWP)


Its a 5-year project (2011 - 2015) in associated with the Institute for the Promotion of Teaching Science and Technology (IPST). In 2012, the competition was extended to the national level with participation of high-school students aged 14-19 years from all 77 provinces which presenting their water conservation innovation project. The winner for the year 2012 is from Mahidol Wittayanusorn School with the project name of A Novel Bio adsorption Instrument for Removal Heavy Metals in Wastewater. In addition, as the Company was appointed by Stockholm International Water Institute (SIWI) as Thailands representative sponsoring and hosting national competition on water conservation during 2013-2015, the Company has an official right to send the winner of TTJWP 2012 as Thailands representative team to participate in the Stockholm Junior Water Prize 2013 in Stockholm, Sweden.

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Robes Offering Ceremony (THOT KATHIN)

To inheritance good practice of Thai tradition and culture, TTW group annually oraganize TTWs Kathin ceremony which were participated by its management and employees presenting Kathin robes to scarce temples or which are under renovation. In 2012, TTW group presented the robes to Wat Thamaprasit, Klongkhon sub-district, Samutsakorn province in good cooperation with the communities surrounding the temple.

Tapasa Foundation of Moonnithi Phradabos

The companies granted the support to Phradabos School in the southern boarder province for renovation and expansion of the building and surrounding area due to the restoration and annually increase of students causing the insufficiency of school building and dormitory.

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Community Activities Childrens Day Celebration


To give good opportunities to all children in the area of Banglen Water Treatment plant, the company hosts this festive event for all children both in and out of area to participate. They had learnt business overall, enjoyed the game and received a various prizes prepared by the company.

Dredging of Madua canal (Klong Madua)


The Company granted the support to Bangrakhum local Administrative Office for dredging Madua canal which is shallow and density of water Hycinth causing the limitation of water consumption of people in the area. To reserve it as drainage way into Thachin river in order to avoid the waterlogging in agricultural area as well as to regularly cultivate.

Contribution for Water Conservative Conference


The Company granted the support for the conference Three Rivers watersheds; Thachin river, Maeklong river and Choapraya river for the purpose of learning and planning strategy in flood prevention on April 4-5, 2012 at Blue Sapphire Golf and Resort, Boploi sub-district, Karnchanaburi province.

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Environmental Activities 1 million Tree Planting


This project is a 5-year project (2011-2014) which aims to encourage the employees, related person and the communities for the responsibility and the prevention of the environment by plating forestry water resource of Maekhong. The company together with the Department of National Parks, Wildlife and Plant Conservation aim to plan one million trees at 5,000 rai which annually plant 200,000 trees at 1,000 rai at Thong Pha Phum National Park, E-tong village, Pi Lok sub-district, Thong Pha Phum District, Kanchanaburi province., the company has already plant 40,000 trees for the second year of the project and will reach 1 million tree in 2015.

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GENERAL INFORMATION OF THE COMPANY


Thai Tap Water Supply Public Company Limited

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GENERAL INFORMATION OF THE COMPANY


Thai Tap Water Supply Public Company Limited

General Information
Ticker TTW Registered No. 0107549000114 (The Original No. 1325/2543) Head Office 30/130 Moo 12 Buddhamonthon 5 Road, Tambol Rai Khing, Sam Phran, Nakhon Pathom Province 73210 Business Production and distribution of tap water for the Provincial Waterworks Authority Registered Capital Baht 3,990,000,000 Ordinary Shares 3,990,000,000 shares Par Value Baht 1 per share Paid-up Capital Baht 3,990,000,000 First Trade Date May 22, 2008 Homepage http://www.thaitap.com Contact Head Office Telephone (+662) 811-7526, (+662) 811-7528, (+662) 811-8369, (+662) 811-7685-6, (+662) 811-8100 Facsimile (+662) 420-6064 Office of Managing Director Corporate Governance and Secretary Telephone (+662) 811-7528 Ext. 1106 Investor Relations Telephone (+662) 811-7528 Ext. 1108 e-mail : ir@thaitap.com

Reference
Auditor : Ernst & Young Office Limited 193/136-137, 33rd Floor, Lake Rajada Office Complex, New Rajadapisek Road, Bangkok 10110 Telephone (+662) 264-0777, (+662) 661-9190 Facsimile (+662) 264-0789-90, (+662) 661-9192 The Legists Limited 990 Abdulrahim Place, 9th Floor Rama IV Road, Silom Subdistrict, Bangrak District, Bangkok 10500 Telephone (+662) 636-1111 Facsimile (+662) 636-0000

Legal Counsel :

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NATURE OF BUSINESS CHARACTERISTICS

Nature of Business Characteristics


Since 2004, Thai Tap Water Public Company Limited (TTW) has been the tap water producer and distributor to the Provincial Waterworks Authority (PWA) in West Bangkok covering 2 provinces; i.e., Nakhon Pathom Province (Nakhonchaisri District, Sampran District, and Phuttamonthon District) and Samutsakhon Province (Mueang District and Krathumbaen District). The company had the maximum production capacity of 440,000 m3/day and the minimum tap water purchase contract from PWA was at 318,000 m3/day or about70% of the maximum production capacity. In 2012, the company sold 131 million m3 of tap water to PWA and the total accumulated tap water sale volume was at 847 million m3. In the future, the company prepares Expansion of Plant II, to increase the production capacity of 100,000 m3/day, which for subsidiaries and associated companies including BIE right purchase. Business characteristic of each entity as below :

Pathum Thani Tap Water Company Limited


Pathum Thani Tap Water Company Limited (PTW) is the companys subsidiary. The companys investment was 98% of registered capital or accounting of 1,200 million baht, which engaging in tap water production and distribution to PWA in Pathum Thani-Rangsit areas since 1998. Currently, its maximum production capacity is at 388,000 m3/day and the minimum tap water purchase contract from PWA is at 330,000 m3/day, about 85% of the maximum production capacity. Throughout 2011, PTW sold 136 million m3 of tap water to PWA and the total accumulated sale volume was at 1,310 million m3.

Thai Water Operations Company Limited


Thai Water Operations Company Limited (TWO) is the companys subsidiary, 68% holding by TTW and 32% holding by PTW, which engaging in administration and management of tap water production and distribution system and waste water treatment system for PTW, Bang Pa-In Industrial Estate, Amata Nakorn Industrial Estate and Amata City Industrial Estate. TWO has culminated in its ISO 9001:2008 accreditation received from SGS Yarsley. This certifies that TWO has reliable service of operation, maintenance and management project in Pathum Thani, Thammasat and Rangsit area.

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Bang Pa-In Industrial Estate


The company purchased the rights to produce tap water and wastewater treatment in Bang Pa-In Industrial Estate (BIE), Phranakorn Sri Ayuttaya Province, from Bang Pa-In Land Co., Ltd. The right period is 30 years starting from August 2009. The production capacity of tap water is at 48,000 m 3/day and wastewater treatment capacity was at 18,000 m3/day. Throughout 2011, tap water sale volume was recorded at 5 million m3, the total accumulated sale volume of 19.8 million m3. The objective on the BIE right purchase is to reduce revenue reliance on PWA which is the companys sole customer. In addition, the new business will increase skill, knowledge, and experience of the companys personnel as a direct service provider. This is the first step to achieve the companys vision of Being the national leading company in water, energy, and environment businesses.

Investment in another company


In 2012, the company had invested in common shares of CK Power Co., Ltd. (CKP), the holding company owning other company engaging in production and distribution of electricity. Through, 5 subsidiaries and associated companies, i.e. 1 Hydro Power Plant, 3 Solar Power Plant and 1 Co-generation Power Plant. At present, the company holds 30% of CKPs registered capital or accounting of 9,200 million baht, the total amount invested was 2,760 million baht. In 2013, CKP has project to have the company registered in the Stock Exchange of Thailand.

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TTW AND ITS SUBSIDIARIES STRUCTURE


Thai Tap Water Supply Public Company Limited

C.K. POWER COMPANY LIMITED

30%

Registered Capital 9,200 mil.Bt. Paid-up Capital 9,200 mil.Bt.

THAI TAP WATER SUPPLY PUBLIC COMPANY LIMITED Registered Capital 3,990 mil.Bt. Paid-up Capital 3,990 mil.Bt.

98%*
PATHUM THANI WATER COMPANY LIMITED Registered Capital 1,200 mil.Bt. Paid-up Capital 1,200 mil.Bt.
Remarks : *2% holding by PWA

32%

68%

THAI TAP WATER SUPPLY PUBLIC COMPANY LIMITED PATHUM THANI WATER COMPANY LIMITED THAI WATER OPERATIONS COMPANY LIMITED C.K. POWER COMPANY LIMITED

THAI WATER OPERATIONS COMPANY LIMITED Registered Capital 60 mil.Bt. Paid-up Capital 60 mil.Bt.

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LIST OF SUBSIDIARIES

Pathum Thani Water Company Limited


Business Registered Capital Ordinary Shares Par Value Paid-up Capital Address Website Production and distribution of tap water for the Provincial Waterworks Authority Baht 1,200,000,000 12,000,000 shares Baht 100 per shares Baht 1,200,000,000 43 Moo 3, Chiang Rak Noi-Bang Sai Road, Ban Pathum, Sam Khok, Pathum Thani 12160 Telephone (+662) 979-8530-2 Facsimile (+662) 979-8533 www.ptw.co.th

Thai Water Operations Company Limited


Business Registered Capital Ordinary Shares Par Value Paid-up Capital Address Website Administration and management of tap water production and distribution system and wastewater treatment system Baht 60,000,000 600,000 shares Baht 100 per share Baht 60,000,000 30/10 Moo 12 Buddhamonthon 5 Road, Rai Khing, Sam Phran, Nakhon Pathom 73210 Telephone (+662) 811-9901, 0-2811-9904-8, Facsimile (+662) 811-9509 www.two.co.th

C.K. Power Company Limited


Business Registered Capital Ordinary Shares Par Value Paid-up Capital Address Holding Company Baht 9,200,000,000 920,000,000 shares Baht 100 per share Baht 9,200,000,000 587 Viriyathavorn Building, 19th Floor, Sutthisarnvinitchai Road, Dindaeng, Dindaeng, Bangkok 10400 Telephone (+662) 691-9720-2 Facsimile (+662) 691-9723

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SHAREHOLDING STRUCTURE
Thai Tap Water Supply Public Company Limited

Shareholding
CH. Karnchang Public Company Limited Mitsui Water Holdings (Thailand) Company Limited Bangkok Expressway Public Company Limited Bangkok Life Assurance Public Company Limited Thai NVDR Company Limited HSBC (SINGAPORE) NOMINEES PTE LTD Bangkok Bank Public Company Limited Mr. Min Tieanworn THE BANK OF NEW YORK (NOMINEES) LIMITED AMERICAN INTERNATIONAL ASSURANCE COMPANY LIMITED-TIGER

List of top ten shareholders as at December 31, 2012


List of Shareholders
1. CH. Karnchang Public Company Limited 2. Mitsui Water Holdings (Thailand) Company Limited 3. Bangkok Expressway Public Company Limited 4. Bangkok Life Assurance Public Company Limited 5. Thai NVDR Company Limited 6. HSBC (SINGAPORE) NOMINEES PTE LTD 7. Bangkok Bank Public Company Limited 8. Mr. Min Tieanworn 9. THE BANK OF NEW YORK (NOMINEES) LIMITED 10. AMERICAN INTERNATIONAL ASSURANCE COMPANY LIMITED-TIGER

Number of Shares
1,198,777,400 1,036,500,000 368,750,000 170,130,700 148,420,065 84,277,657 73,895,000 68,683,000 44,066,924 40,500,000

Shareholding (%)
30.04% 25.98% 9.24% 4.26% 3.72% 2.11% 1.85% 1.72% 1.10% 1.02%

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MANAGEMENT STRUCTURE
Thai Tap Water Supply Public Company Limited

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MANAGEMENT STRUCTURE

Organization Chart

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totaling at least five persons, but no more than 15 persons, provided that not less than one half of the total number of directors shall be non-executive directors, and at least three persons or one-third of the total number of directors shall be independent directors. The Companys management structure comprises six committees, namely, the Board of Directors, the Executive Committee, the Audit Committee, the Nomination and Remuneration Committee, the Corporate Governance Committee and the Risk Management Committee, as well as the executive management. The Board of Directors has four independent directors who have the following qualifications: The directors shall have such qualifications and have no prohibited characteristics as set forth in the Public Limited Companies Act, with a three-year term of office. The appointment of directors shall be transparent and comply with the Companys Articles of Association as well as the criteria and procedures as established by the Nomination and Remuneration Committee. Names and backgrounds of candidates nominated for appointment as directors shall be submitted through the Nomination and Remuneration Committee and the Board of Directors for consideration to seek approval from the shareholders meeting. The said nomination process shall also allow the minority shareholders to nominate candidates for consideration and selection.

Board of Directors
As at December 31, 2012, the Board of Directors comprises twelve directors as follows: 1. Dr. Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Techapit Sangsingkeo 4. Mr. Phairuch Mekarporn 5. Mr. Somnuk Chaidejsuriya 6. Mr. Narong Sangsuriya 7. Mr. Prasert Marittanaporn 8. Mr. Ryotaro Sumi 9. Mr. Suvich Pungchareon 10 Dr. Sombat Kitjalaksana 11. Mr. Tomonori Susuki 12. Mr. Sompodh Sripoom Chairman of the Board of Directors and Independent Director Vice-Chairman Independent Director, Chairman of Audit Committee, Chairman of Risk Management Committee and Corporate Governance Committee Independent Director, Chairman of Nomination and Remuneration Committee, Corporate Governance Committee and Audit Committee Independent Director, Chairman of Corporate Governance Committee and Audit Committee Director and Chairman of Executive Committee Director, Nomination and Remuneration Committee and Risk Management Committee Director and Nomination and Remuneration Committee Director and Executive Committee Director and Executive Committee Director, Executive Committee and Risk Management Committee Director, Executive Committee, Risk Management Committee, Corporate Governance Committee and Managing Director

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The term of office is three years each. At every Annual Ordinary General Meeting, one-third of the total number of directors shall retire, provided that those retiring directors for the first and second years after the Companys incorporation shall be drawn by lots, and for subsequent years, such directors with the longest term of office shall retire. Retiring directors may be re-elected for appointment as directors.

The Companys Authorized Signatory Directors


The Companys authorized signatory directors shall be: (1) any two of these five directors, namely, Mr.Plew Trivisvavet, Mr.Narong Sangsuriya, Mr.Sombat Kitjalaksana, Mr.Prasert Marittanaporn, Mr.Sompodh Sripoom and Mr.Suvich Pungcharoen, jointly sign and affix the Companys seal; or (2) either Mr.Plew Trivisvavet or Mr.Narong Sangsuriya or Mr.Sombat Kitjalaksana or Mr.Prasert Marittanaporn or Mr.Sompodh Sripoom or Mr.Suvich Pungcharoen, and either Mr.Ryotaro Sumi or Mr.Tomonori Susuki, totaling two directors, jointly sign and affix the Companys seal.

Powers and duties of the Board of Directors


The Board of Directors shall take responsibility towards the shareholders in respect of the Companys business operations, and supervision of the Companys operations to be in line with the guidelines and goals, which would give rise to the optimum benefits to the shareholders, subject to the code of ethics and taking into account the benefits of all interested parties: 1) Supervising the Companys operations to ensure compliance with laws, objectives and the Companys Articles of Association, as well as resolutions of the shareholders meetings, and protecting the Companys interest based on the good corporate governance principles. 2) Determining policies and directions of the Companys operations and supervising the management to take actions to ensure compliance with the policy with efficiency and effectiveness so as to result in the optimum economic value to the business and great prosperity to the shareholders. 3) Approving vision, mission, corporate value as anticipated by the Company, and the business ethics. 4) Arranging for and supervising the administration in compliance with the good corporate governance principles.

5) Considering approval for budget for investment and budget for the Companys annual business operations, including monitoring the use of the Companys resources. 6) Providing complete, correct and sufficient reports on financial information, data and general information which are important for shareholders, and affirming the certification of the reported information. 7) Arranging for the Company to have an efficient internal control and audit system as well as appropriate and adequate risk management measures, including following up on such matters on a regular basis. 8) Considering clearly determining and separating roles, duties and responsibilities among the Board of Directors, the Executive Committee, subcommittees and the management, with regular communication regarding such roles, duties and responsibilities to the Board of Directors, the Executive Committee, subcommittees, the management and staff of the Company. 9) Supervising the Executive Committee, subcommittees and the management to comply with the specified policies. 10) Considering performance evaluation, determination of salaries, wages, welfare, bonus, allowance and other remuneration, including expenses and facilities of the Managing Director, as well as determining backup plan for nominating personnel to hold major office of the management should the management become unable to perform the duties. 11) Considering revision of the scope of powers, duties, responsibilities and roles of the Executive Committee, subcommittees and the management as appropriate.

Executive Committee
As at December 31, 2012, the Executive Committee comprises five members as follows: 1. Mr. Narong Sangsuriya 2. Mr. Suvich Pungchareon 3. Dr. Sombat Kitjalaksana 4. Mr. Tomonori Susuki 5. Mr. Sompodh Sripoom Chairman of the Executive Committee Member Member Member Member

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Scope of powers and duties of the Executive Committee


1) Supervising the Managing Directors performance to ensure compliance with resolutions, policies and strategies as determined by the Board of Directors, as well as providing advice and suggestions to the Managing Director. 2) Supervising the conduct of feasibility studies on new projects, and approving implementation of projects as it deems appropriate within an amount under (3). 3) Having power to approve execution of any juristic acts which would have binding effect upon the Company within an amount of not exceeding Baht 50 (Fifty) Million, provided that such approval shall involve neither any transactions giving rise to conflict or interest against the Company or its subsidiaries. 4) Having power to consider, approve and/or determine policies on administration and business operation of the Company or any actions which would have binding effect upon the Company, subject to the scope of policies and strategies as determined by the Board of Directors. 5) Having power to employ, appoint, impose disciplinary action, terminate, dismiss, remove, determine salary, bonus, benefits, and other remunerations, including expenses and facilities of the Companys officers or staff in the position of Division Manager or equivalent and higher, but excluding the Managing Director. 6) Having power to appoint, determine authorities and duties, delegate direction of supervision policy, determine remunerations, allowances, expenses and facilities for special workgroups for carrying out specific works, including to approve proposals of special workgroups within an amount under (3). 7) Having power to appoint chairman of the advisors, advisors and/or advisory board to the Executive Committee as appropriate, whereby remunerations, allowances, expenses and facilities for the said chairman of the advisors, advisors and/or advisory board shall be determined by the Nomination and Remuneration Committee. 8) Performing other duties as delegated from time to time by the Board of Directors.

Audit Committee
As at December 31, 2012, the Audit Committee comprises three independent directors as follows: 1. Mr. Techapit Sangsingkeo Chairman of the Audit Committee 2. Mr. Somnuk Chaidejsuriya Member 3. Mr. Phairuch Mekarporn Member

Scope of powers and duties of the Audit Committee

1) Reviewing the Companys financial reports to ensure the correctness and adequate disclosure. 2) Reviewing the internal control and internal audit systems of the Company to ensure the suitability and efficiency. 3) Reviewing the Companys operation to ensure its compliance with the laws on securities and exchange, the regulations of the Stock Exchange, or such laws, rules and regulations and policies relating to the business of the Company. 4) Considering the Companys disclosure in respect of related party transactions or such transactions which may give rise to conflict of interest, to ensure the accuracy, completeness and timeliness. 5) Considering, selecting, nominating for appointment and proposing remuneration for the Companys auditor to the Board of Directors for further submission to seek approval of the shareholders. 6) Preparing the Audit Committees corporate governance report to be disclosed in the Companys annual report, whereby such report shall be signed by the Chairman of the Audit Committee. 7) Performing other duties as delegated by the Board of Directors and with approval of the Audit Committee.

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Nomination and Remuneration Committee


The Board of Directors appoints the Nomination and Remuneration Committee to help consider selecting qualified persons to take office as directors, the Managing Director as well as setting out criteria for consideration of remuneration. As at December 31, 2012, the Nomination and Remuneration Committee comprises three members as follows: 1. Mr. Phairuch Mekarporn 2. Mr. Prasert Marittanaporn 3. Mr. Ryotaro Sumi Chairman of the Nomination and Remuneration Committee Member Member

Scope of powers and duties of the Nomination and Remuneration Committee


1) Considering the criteria and procedures for recruiting persons qualified to take office as directors of the Company, including selecting persons in accordance with the specified nomination procedures for submission to the Board of Directors for consideration and appointment, or for submission to the shareholders meeting for consideration and appointment, as the case may be, provided that such procedures for consideration and selection of qualified persons as aforesaid shall also allow minority shareholders to nominate persons for such consideration and selection.

2) Considering the criteria and procedures for recruiting person qualified to take office as the Managing Director, including nominating and selecting such person in accordance with the specified nomination procedures for submission to the Board of Directors for consideration and appointment. 3) Arranging for Succession Plan for key positions in management or persons eligible to take office of high level executive, with regular review of such Plan. 4) Determining the criteria for consideration of remuneration for directors and the Managing Director. 5) Considering proposing remuneration of directors to the Board of Directors for approval and submission to the shareholders meeting for further consideration and approval. 6) Considering proposing salary and adjustment of salary rate, including other remuneration of the Managing Director to the Board of Directors for consideration and approval. 7) Performing other duties as delegated by the Board of Directors. In 2013, The Company has the policy to appoint an Independent Director in the group of the Nomination and Remuneration Committee. The Committee then has consisted of two Independent Directors, equivalent to fifty percent (50%) of the total committees.

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Corporate Governance Committee


The Board of Directors appoints the Corporate Governance Committee to help consider policies and practices on good corporate governance and business ethics. As at December 31, 2012, the Corporate Governance Committee comprises four members as follows: 1. Mr. Somnuk Chaidejsuriya 2. Mr. Techapit Sangsingkeo 3. Mr. Phairuch Mekarporn 4. Mr. Sompodh Sripoom Chairman of the Corporate Governance Committee Member Member Member

Risk Management Committee


The Board of Directors appoints the Risk Management Committee to help consider setting out policy on measures and plan for risk management in the Companys operations. As at December 31, 2012, the Risk Management Committee comprises four members as follows: 1. Mr. Techapit Sangsingkeo Chairman of the Risk Management Committee 2. Mr. Prasert Marittanaporn Member 3. Mr. Tomonori Susuki Member 4. Mr. Sompodh Sripoom Member

Scope of powers and duties of the Corporate Governance Committee


1) Proposing practical guidelines for good corporate governance to the Board of Directors. 2) Supervising the operation of the Board of Directors, the Executive Committee, various subcommittees and the management to ensure compliance with the good corporate governance principles. 3) Reviewing the practical guidelines for good corporate governance, by comparing with the good corporate governance principles based on international standard and of the Stock Exchange of Thailand, for submission to the Board of Directors for consideration and regular update. 4) Delegating policies on good corporate governance to the Companys good corporate governance workgroup and reporting the results of the good corporate governance to the Board of Directors. 5) Having authority to invite any external persons having knowledge and expertise to act as advisors and attend meetings at the Companys expenses. 6) Performing other duties as delegated by the Board of Directors.

Scope of powers and duties of the Risk Management Committee


1) Setting out the Risk Management Policy for the Company as a whole, and assigning the management to perform in compliance with such Policy, including reporting the performance results to the Risk Management Committee. 2) Developing and reviewing the Companys Risk Management System to ensure its continual efficiency and effectiveness, by way of regular evaluation and follow-up of the risk management procedures to be consistent with the specified policy. 3) Supporting and encouraging the mutual cooperation in risk management at every level of the Company. 4) Preparing reports on risks and suggestions to the Board of Directors. 5) Performing other duties as delegated by the Board of Directors.

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Executive Management
As at December 31, 2012, the Companys Executive Management comprises nine executives as follows: Name Position 1. Mr. Sompodh Sripoom Managing Director 2. Mr. Chutchawan Tienprasertkij Manangement Information System Director 3. Mr. Sompol Krisadasima Business Development Director 4. Mr. Somkiat Accounting and Finance Pattamamongkolchai Director 5. Miss Pathida Chaiyasen Accounting and Finance Director 6. Miss Sudarat Chiamchan Director, Office of Managing Director 7. Mr. Sivar Nagdhary Management Information System Director 8. Mr. Hongthong Artit Acting Customer Service Director 9. Mr. Nattapon Klinhawharn Acting Engineering and Constructions Director

Scope of powers and duties of the Managing Director


1) Having power to approve execution of any juristic acts which would have binding effect upon the Company within an amount of not exceeding Baht 5,000,000 (Five Million Baht Only). 2) Having power to issue, amend, adjust the Companys work rules, orders and regulations, e.g., employment, appointment, demotion, discipline of staff and employees, determination of salaries and other payments, including welfare and benefits. 3) Having power to delegate authority to the Companys executive staff, namely, Division Managers, to perform duties on behalf of the Managing Director in particular matters (such as, purchasing, employment, payment instruction) as deemed appropriate.

4) Having power to appoint any person or group of persons to operate the business of the Company under the supervision of the Managing Director, or authorizing such person to take actions as the Managing Director deems appropriate, and also having power to change, amend, cancel or revoke such authorization. 5) Having power for adjustment, transfer, closure and merger or expansion of the organization structure at such levels lower than the Divisional Level, as appropriate, as long as the Company still has six divisions and the total number of staff not exceeding 111 persons. 6) Having power to determine salary rates and other remunerations, including expenses and facilities of the Division Directors or equivalent and higher, to seek approval of the Executive Committee. 7) Having power to determine the structure of salary rates and other remunerations of staff at such levels lower than the Division Directors or equivalent, provided that the salary rates (excluding other remunerations and benefits), in both 6) and 7), shall altogether not exceed one percent of the Companys revenue. 8) Having power to employ, appoint, impose disciplinary action, terminate, dismiss, remove, determine salary, bonus, welfare, and other remunerations, including expenses and facilities of the Companys staff who receive salary at the rate (only the salary rate, excluding any other benefits received) of not exceeding Baht 150,000 per month, and/or the Companys staff in such positions lower than the Division Directors or equivalent. Apart from those mentioned, the Managing Director shall seek approval of the Executive Committee. In this regard, the authority to take the following actions may be delegated, either in whole or in part, to workgroups, the Board of Directors, the management, group of persons or any manager, as appropriate. 9) Having duty to supervise all businesses of the Company to ensure compliance with resolutions and policies of the Board of Directors. 10) Having duty to submit balance sheets, financial statements and income statements of the Company to the Board of Directors for approval. 11) Having duty to propose significant issues to the Board of Directors or the shareholders meeting for consideration and approval or for any other purposes as appropriate.

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12) Having duty to conduct feasibility studies on new projects and having power to approve such projects, as delegated by the Executive Committee. 13) In case the Managing Director is unable to perform duties, the Managing Director shall appoint a Division Director or another person to act for and on behalf of the Managing Director from time to time, whereby such person shall have the powers and duties equivalent to the Managing Director. 14) Performing other duties as delegated by the Board of Directors from time to time. However, the Managing Director or the person authorized by the Managing Director has no power to approve any matters or transactions in which the Managing Director or persons who may have conflict, have interest or may have conflict of interest in any other manner, would enter into with the Company or its subsidiaries, as defined by the Securities and Exchange Commission.

The definition of Independent Director


The company has set the definition of independent director is stricter than the standard rule of Stock Exchange of Thailand and Securities and Exchange Commission, Thailand as follows; 1. Shall hold shares not exceeding 1% of the total number of voting shares of the Company, subsidiary, associate or juristic person that may be conflict; 2. Shall not be related to the management of the company, its subsidiaries and its associated companies, Moreover, shall not be a major shareholder, a temporary or full-time employees and an advisor regularly earning salaries from the company, its subsidiaries, its associated companies and its major shareholders; 3. Shall not be a person related by blood or legal registration as father, mother, spouse, sibling, or child, including spouse of child, of an executive, major shareholder, controlling person, or person to be nominated as executive or controlling person of the Company or its subsidiary;

4. Shall not have any direct or indirect conflicts of interest against the management of the company and its subsidiaries, and its associated companies for the period of not less than one year prior to nomination except the Board of Director was attentively considered that such conflict of interest not affecting the operation and have independent decisionmaking of Independent directors; 5. Shall not be a director who has been appointed as representative of the companys director, major shareholder or shareholders who are related to the major shareholder; 6. Shall be independently perform the duties and give the opinion or report on the result of duties as assigned by the Board of Directors, uncontrolled by the management or major shareholders and related person or relative of such person; 7. Shall be able to attend meetings of the Board of Directors and make independent judgment; 8. Shall not operate any business which has the same nature as and is in significant competition with the business of the company or it subsidiaries, or not being a principal partner in any partnership, or not be an executive director, employee, staff, or advisor regularly earing the salaries; or holding shares not exceeding one percent of the total number of voting right of any other company operating business which has the same as and is in significant competition with the business of the company or its subsidiaries; 9. Shall not have any characteristics which make him/her incapable of expressing independent opinion with regard to the companys business affairs; 10. Shall be able to look after the interests of all shareholders equally; 11. Shall be able to prevent conflicts of interest; 12. Shall not have been convicted of violating security or stock exchange laws, financial institution laws, life insurance laws, general insurance laws, anti-money laundering laws or any other financial law of a similar nature, whether Thai or foreign, by an agency with authority under that certain law. Such wrongful acts include those involved with unfair trading in shares or perpetration of deception, fraud, or corruption;

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The attendance of the Board of Director


The Board of Directors schedule the ordinary meeting in every quarter and arrange an additional meeting as requirement which issue the agenda in advance and normally has agenda for consideration the companys performance. Office of Managing Directors send the invitation letter together with the agenda not less than 10 days and the material of meeting not less than 7 days before the date of meeting in order that the Board have sufficient time to prepare in advance. In 2012, the Board of Directors and subcommittees held a total of 24 meetings as follows:
Name Ordinary Nomination Corporate Risk General Board of Executive Audit and Governance Management Meeting of Directors Committee Committee Remuneration Committee Committee Shareholders Committee

1. Dr.Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Narong Sangsuriya 4. Mr. Prasert Marittanaporn 5. Dr. Sombat Kitjalaksana 6. Mr. Sompodh Sripoom 7. Mr. Jun Aketa * 8. Mr. Ryotaro Sumi ** 9. Mr. Tomonori Susuzi 10. Mr. Techapit Sangsingkeo 11. Mr. Phairuch Mekarporn 12. Mr. Somnuk Chaidejsuriya 13. Mr. Suvich Pungchareon Note:

1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1

5/5 4/5 5/5 5/5 4/5 5/5 1/4 0/1 5/5 5/5 5/5 4/5 5/5

6/6 5/6 6/6 6/6 6/6

4/4 4/4 4/4

2/2 1/2 2/2 -

2/2 2/2 2/2 2/2 -

4/4 4/4

4/4 4/4

* Mr. Jun Aketa resigned on 14 November 2012 ** Mr. Ryotaro Sumi was appointed on 15 November 2012

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Orientation for New Directors


All of new Directors are required to have an Orientation regarding principal information of the company by Executive Director and also obtain the Directors guide introducing the roles, the duties, the responsibilities, stock holding, stock buying and stock selling of Directors, report of Director benefits, meeting arrangement, suitable information disclosure, communication with Management division, remuneration and privilege and general information of the company. Companys business ethic guide will be provided as well. In addition to the orientation, the company encourages new Directors to enroll Directors training program organized by Thai Institute of Directors Association (IOD) or related institutes to increase knowledge of their role and companys mission under Good Corporate Governance campaign. All expenses will be paid by the company.

The Corporate Secretary


By the resolution of Board of Director meeting, Ms. Sudarat Chiamchan, Director, Office of Managing Director, was appointed as the corporate Secretary, responsible for organizing the meeting of the Board, committees and shareholders. The corporate secretary is also in charge of preparing the minutes of the Boards meeting and Annual report as well as filing documents as stipulated by law. She is deemed by the Board to be appropriate and she should have no character against the Securities and Exchange Commissions regulation. Moreover, Office of Director supports the corporate secretarial work compliance with law, rules, regulations and the Corporate Governance policy.

Self-Assessment of the Board


By the resolution of the Board meeting No. 4/2012 of 14 November 2012, it acknowledged the result of 2010 self-assessment. Self-Assessment of the Board consisted of five categories: Understanding of responsibility and company business, relationship with executives, supervision, meeting and performance. The results indicated very good/ most suitable overall performance with an average score of 91.3%

Nomination and Succession Plan for High-level Executive Positions


The company put in place a proper and transparent nomination process for key management positions at every level in order to ensure at that all of our executives are professional who perform their duties in dependently from the major shareholders and other shareholders. The succession plan for the president and high level executive is carried out by Nomination and Remuneration Committee and considered their knowledge, experience, ability, and ethic and leadership skill by the Board of Directors. The qualified employees will undergo a high potential assessment and pursue development plan through nomination and succession Plan called IDP (Individual Development Planning). These talents will assign challenging tasks and their position will be rotated periodically in order to further develop their leadership skills and all-round knowledge in every area of the companys business. The plan is implemented at every level of employment to ensure that staffs are ready to fill any positions that become vacant.

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DIVIDEND POLICY

Dividend
(Unit : Baht/Share)

0.40 0.35 0.30 0.25 0.20 0.15 0.10


(First Half)

2012

2011

2010

2009

2008

To maintain a consistent dividend payment, and the benefit of the shareholders, the Company has set dividend payment policy as follow: The Company will priorities the financial needs for the next five years and the maintenance of the appropriate level of the debt-equity ratio. In case of considering that it is possible to pay dividend, the Company will consider paying dividend to the shareholders as the highest rate as its available cash and cash flow allow. However, such rate shall not be less than 50% of its net profit after corporate income tax, statutory reserve, and other reserves required by terms of relevant agreements.
(unit : Baht/Share)
2012 (First Half) 2011 2010 2009 2008

Dividend

0.22

0.40

0.35

0.28

0.20

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RISK FACTORS

The Company has recognized the importance of the risk management on business operation. The risk management plays a key role in all of our business processes. Accordingly, the management is responsible for revising risks and risk management plans. Changing environments affecting the Companys operation are taken into consideration. To closely control risks, the management also monitors operating performance according to the risk management plans and report to the Risk Management Committee quarterly.

In 2012, the Company had two significant risks as stipulated in the organization risk list as follows:

Risk concerning current tap water business

risks concerning new business

(other businesses than tap water business).

Each risk is classified and summarized as the following.

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1. Risk concerning current tap water business 1.1 New tap water producers selling water in distribution areas of the Company The demand on tap water is estimated to increase approximately 10 million cubic meters. It is divided into the growth of the east of Tachin River, of approximately 8 million cubic meters supplied by Banglen Water Treatment Plant and the growth of the west Tachin River, of approximately 2 million cubic meters supplied by Photharam Water Filling Plant. Such growth has no affect on the Companys water supply growth to main distribution areas. However, Nakhon Samutsakhon Municipality is constructing its water treatment plant, a capacity of 48,000 cubic meters per day at Ban Paew District, Samutsakhon Province. The construction will finish in the second quarter of 2013. Provincial Waterworks Authority will lose distribution areas in Nakhon Samutsakhon Municipality, of approximately 2 million cubic meters per annum. To reduce an effect of Nakhon Samutsakhon Municipalitys water treatment plant, the Company will directly distribute water from our water distribution station to Nakhon Samutsakhon Municipality. The Company will gain benefit from 1) selling water reserve if Nakhon Samutsakhon Municipalitys water treatment plant fails to produce water from time to time; and 2) increasing water supply to Nakhon Samutsakhon Municipality, especially industrial customers located in Nakhon Samutsakhon Municipality.

1.3 Change in water charges for private-serviced areas by Provincial Waterworks Authority After Provincial Waterworks Authority increased water charges since August 2011, such change has no effect on the quantity of water sold of the Company. The demand of the 50 largest customers continues to increase. Customers of industrial sectors have high demand on water which is a key component of production process due to poor quality of groundwater. 1.4 Waste water treatment technology Presently, several entrepreneurs are interested in water treatment and quality adjustment technologies. Used water is recycled to reduce water quantity and production cost. The Company has revised costs of recycling used water and monitored a membrane technology in Thailand. Potential use of a membrane technology by large customers has been closely monitored. 1.5 Insufficient quality and quantity of raw water The Company has in place a monitoring process on the quantity of raw water at dams and water gates. Information of raw water quality is kept and raw water quality is checked before production process. Insecticide contamination has been checked as well. Further than by an internal laboratory, water quality is tested by an external laboratory. 1.6 Lack of production factors due to natural disasters The Company makes annual chemical purchase agreements. Key chemical substances used in production process are alum and chlorine. The same prices are offered to the Company and subsidiaries. In addition, other supplies are put in place in case of necessary.

1.2 Change in public policies regarding groundwater The Company has studied a long-term demand on tap water and collected information of enterprise users using both systems. The study covers an effect of decreased water demand or of proportion of water demand and ground water demand in case of reduction or cancellation of ground water conservation fee from 8.50 Baht per cubic meter to 4.50 Baht per cubic meter which came into force on 1 October 2012. The Company has been monitoring use of water from both sources whether the proportion of water demand and ground water demand changes. However, the proportion remains unchanged.

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1.7 Agreement termination or condition change The Company has maintained standards of water production to ensure quality, cleanliness and sufficiency, including consistent water pressure in line with standards as set in agreements. Agreements, made by and between the Company and Provincial Waterworks Authority, are set clearly and comprehensively in line with legal process. The Company has channels to communicate such agreements to external organizations. In a long term, the Company has planed to study and expand a second water filing plant to match with the water demand. The second water filing plant will be located in an area with high demand to save operating costs and unit costs, including selling prices. 2. Risks concerning new business (other businesses than tap water business) 2.1 Insufficient capability of personnel The Company has established a personnel development framework in line with our directions. As a personnel development tool, the Individual Development Plan (IDP) has been applied. Personnel development goals have been set. To achieve operational goals, the Company has class trainings and other development methods such as project assignment, job enrichment and consultancy, etc. 2.2 Incorrect selection of business partners To select business partners, the company will study their background and past performance, including their capabilities and ownership on key operating factors. Business partners should have qualifications as set. The Company sets communication channels to meet with business partners to ensure mutual understanding and collaboration, as well as to evaluate work relationship and operating culture. Accordingly, the Company has developed criteria on business partner selection more clearly. The criteria are based on international selection processes, past experiences and current market conditions.

2.3 Lack of resource and other key factors To submit project proposal, the Company has studied and gathered information on related businesses and technologies, cost and feasibility so that the Company will have adequate information for business operation. In addition to the key risks listed, the Company will take into consideration potential events, not limited to damages. Related factors identifying the Companys risks under changing circumstances will be considered. To achieve objectives reasonably and effectively, the risk management process will be designed to identify potential events affecting the organization; and to manage such risk within an acceptance level.

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INTERNAL AUDIT

The Board of Directors gives priority to the establishment of the internal audit system Control Risk and internal auditing. Environment Assessment The Board of Directors has assigned the Audit Committee, a total of 3 members, to supervise the Companys internal audit. This aims to ensure the efficiency, transparency, accuracy, reliability The Board of Directors plays an important To ensure efficiency of the internal audit and compliance with the good role in setting clear visions, missions, system, the Company has determined corporate governance policies and strategic plans as guidelines risk management officers to provide
The key principles and main points of evaluating the internal audit system cover 5 controls as follows. for the operations of the management and employees. Operating performance has been regularly reviewed to achieve the Companys goals. information and risk reports to the Risk Management Committee and the Board of Directors. Changing environmental factors are taken into consideration. Accordingly, the Company has prepared organization risk levels comprising risk factors, risk controls and risk management plans. The details are mentioned in Risk Factor.

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3
Control

4
Informationand Communication

5
Monitoring and Evaluation

The company has clearly set scopes of authorities and responsibilities of each function. Four sub-committees have been established i.e. the Audit Committee, the Corporate Governance Committee, the Risk Management Committee and the Nomination and Remuneration Committee. The sub-committees work efficiently to ensure check and balance. Separately from the management, the Audit Committee has set internal audit plans independently, and monitored performance of each function. The Audit Committee also provides advices to ensure sufficient and efficient internal control in line with the good internal control principles. Accordingly, the Company has supervised operations and performances in compliance with related laws, rules and regulations.

The Company has continued to develop an information system and an internal database system. Employees are able to use such systems as communication channels and to access operating information. In the same time, information is published on the Companys website so shareholders and investors are able to easily access the Companys information all the time. In addition, the Company discloses information on the Stock Exchange of Thailands system, holds analyst meetings in every 6 months as well as holds press conferences.

The Company has been monitoring operating performance as stipulated in annual operating plans continuously. Reports on operating progress are proposed to the Executive Board and, then, to Board of Directors meetings quarterly.

The Company has comprehensively emphasized on the internal audit. With regard to setting audit plans, information of risk assessment and financial statement analysis are taken into consideration. The sufficiency and effectiveness of the internal audit system have been focused. In addition, the Company has in place monitoring systems based on quality and environmental monitoring systems of international standards i.e. ISO 9001 : 2008 and ISO 14001 : 2004.

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BOARD OF DIRECTORS AND MANAGEMENT PROFILE


As at December 31, 2012 comprises:

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DR. THANONG BIDAYA


Age Education Doctors Degree Masters Degree Positions in the Company Other Current Positions Independent Director Chairman of the Board of Directors Chairman of the Board of Directors Chairman of the Board of Directors Chairman of the Board of Directors Chairman of the Advisory Board Chairman of Risk Management Committee 65 Years Ph.D. in Management, Northwestern University, U.S.A. Economics, Northwestern University, U.S.A. Independent Director Chairman of the Board of Directors Thai Tap Water Supply Public Company Limited CK Power Company Limited Srisawad Power 1979 Company Limited Xayaburi Power Company Limited MSIG Insurance (Thailand) Company Limited TMB Asset Management Company Limited

MR. PLEW TRIVISVAVET


Age Education Masters Degree Bachelors Degree Positions in the Company Other Current Positions Director Director Director Chairman of the Executive Committee Director Committee 67 Years Electrical Engineering, Osaka University, Japan Electrical Engineering, Osaka University, Japan Director and Vice-Chairman of the Board of Directors Thai Tap Water Supply Public Company Limited CK Power Company Limited Southeast Asia Energy Limited Nam Ngum 2 Power Company Limited

Previous Experience Minister of Finance Minister of Commerce Chairman National Economic and Social Development Board (NESDB) Chairman Thai Airways International Public Company Limited President TMB Bank Public Company Limited Seminar and Training 2004 Directors Accreditation Program (DAP) 25/2004 Thai Institute of Directors Association

Xayaburi Power Company Limited King Mongkuts Institute of Technology Ladkrabang Chairman of the Board of Directors Chairman of Executive Committee Chairman of Nomination and Remuneration Committee Bangkok Metro Public Company Limited Chairman of Executive Bangkok Expressway Public Company Committee Limited President and Chief CH. Karnchang Public Company Limited Executive Officer Previous Experience Chairman CK Power Company Limited Chairman of the Board of Directors Thai Tap Water Supply Public Company Limited Seminar and Training 2007 Senior Executive Program, 4/2007 Capital Market Academy 2004 Director Certificate Program (DCP) 50/2004 Thai Institute of Directors Association 1993 Diploma 366/2007 National Defence College

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MR. NARONG SANGSURIYA


Age Education Bachelors Degree 68 Years Civil Engineering, Chulalongkorn University

MR. TECHAPIT SANGSINGKEO


Age 68 Years Education Masters Degree Economics, KEIO University, Japan Bachelors Degree Economics, Hitotsubashi University, Japan Positions in the Company Independent Director, Chairman of Audit Committee, Chairman of Risk Management Committee and Corporate Governance Committee Thai Tap Water Supply Public Company Limited Other Current Positions Independent Director Thai Tap Water Supply Chairman of Audit Committee Public Company Limited Director Pathum Thani Water Company Limited Independent Director Star Sanitary Ware Chairman of Audit Committee Company Limited Executive Director Life Development Foundation, Under Patronage of Her Royal Highness, Princess Kalayanee Watana Deputy Governor Bank of Thailand Previous Experience Deputy Governor Bank of Thailand Chairman and Chief Executive Officer Nakornthon Bank Public Company Limited Executive Director Thai Asset Management Corporation (TAMC) Seminar and Training 2006 Audit Committee Program (ACP) 22/2006 2005 Directors Accreditation Program (DAP) 34/2005 Thai Institute of Directors Association - Executive Development Program Harvard University,Graduate School of Business, U.S.A. - Senior Executive Development Prapokklao Institute Class 3 - Senior Executive Program, Capital Market Academy Class 5

Positions in the Company Director Chairman of Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director CK Power Company Limited Director Bangpa-in Cogeneration Limited Director Nam Ngum 2 Power Company Limited Executive Director Director Southeast Asia Energy Limited Director CH. Karnchang Public Company Limited Executive Director Nomination and Remuneration Committee Senior Executive Vice President - Operations Group Previous Experience Deputy Project Manager Thai-Obayashi Corporation Project Manager Bang-On Construction Company Limited Seminar and Training 2005 Directors Certification Program (DCP) 54/2005 Thai Institute of Directors Association

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MR. PHAIRUCH MEKARPORN


Age Education Masters Degree Bachelors Degree Positions in the Company Other Current Positions Chairman of the Board of Director Director Director Director 67 Years Mechanical Engineering, California State University Long Beach, U.S.A. Mechanical Engineering, Chulalongkorn University Independent Director, Chairman of Nomination and Remuneration Committee, Audit Committee and Corporate Governance Committee Thai Tap Water Supply Public Company Limited Pathum Thani Water Company Limited Thai Optical Group Public Company Limited Dan Chang Bio-Energy Company Limited Phu Khieo Bio-Energy Company Limited

MR. SOMNUK CHAIDEJSURIYA


Age 61 Years Education Masters Degree Law, Chulalongkorn University Bachelors Degree Law, Chulalongkorn University Positions in the Company Independent Director, Chairman of Governance Corporate Committee Audit Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director Don Muang Tollway Audit Committee Public Company Limited Chairman of Risk Management Committee Chairman of Audit Cathay Leaseplan Committee Public Company Limited Director Thai Sri Insurance Company Limited Chairman of the Nomination and Remuneration Committee Vice President Navamindradhiraj University (University of Bangkok Metropolitan) Previous Experience Director The Marketing Organization for Farmers (MOF) Governor Deputy Governor for Operations Deputy Governor for Law and Acquisition Director of Land and Acquisition Department Director of Legal Department Expressway and Rapid Transit Authority of Thailand Seminar and Training 2005 Audit Committee Program (ACP) 9/2005 2004 Directors Accreditation Program (DAP) 9/2004 2004 Directors Certification Program (DCP) 46/2004 Thai Institute of Directors Association 1998 Diploma National Defense College 1975 Barrister-at-Law Institute of Legal Education of the Thai Bar

Previous Experience Managing Director Siam Kraft Industry Company Limited Managing Director Thai Kraft Paper Industry Company Limited Managing Director TIP Fibre-Cement Company Limited Seminar and Training 2007 Audit Committee Program (ACP) 17/2007 2006 Directors Certification Program (DCP) 81/2006 Thai Institute of Directors Association 1995 Advanced Management Program : The International Senior Managers Program Harvard University, Graduate School of Business Administration, U.S.A

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MR. PRASERT MARITTANAPORN


Age Education Masters Degree Bachelors Degree 56 Years Business Administration, Kasetsart University Accountancy, Chulalongkorn University

MR. SUVICH PUNGCHAREON


Age Education Masters Degree Bachelors Degree 66 Years Political Science, Sukhothai Thammathirat Open University Electrical Engineering, Tohoku University, Japan

Positions in the Company Director Risk Management Committee Nomination and Remuneration Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Director Director and Senior Executive Vice President Administration Group CK Power Company Limited Nam Ngum 2 Power Company Limited Southeast Asia Energy Limited Southeast Asia Energy Limited CH. Karnchang Public Company Limited

Positions in the Company Director Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Advisor Bangkok Expressway Public Company Limited

Previous Experience Accountant Pan Asia (1981) Company Limited Assistant Auditor Chaiyos Office Company Limited Seminar and Training 2005 Directors Certification Program (DCP) 54/2005 Thai Institute of Directors Association

Previous Experience Managing Director Bangkok Expressway Public Company Limited Managing Director Northern Bangkok Expressway Company Limited General Manager Bangkok Expressway Public Company Limited Thai Industrial Forging & Siam Nawaloha Foundry The Siam Cement Public Company Limited Seminar and Training 2004 Politics and Governance in Democratic Systems for Executives Course Class 8/2004 King Prajadhipok Institute 2003 Management of Public Economy for Executives Course Class 1/2003 King Prajadhipok Institute 2003 Director Certification Program (DCP) 37/2003 Thai Institute of Directors Association 1984 Mini MBA, Berkeley University, U.S.A.

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DR. SOMBAT KITJALAKSANA


Age Education Doctors Degree Masters Degree 55 Years Engineering (Soil Mechanic), University of Innsbruck, Austria Engineering (Soil Mechanic), Chulalongkorn University

MR. RYOTARO SUMI


Age 52 Years Education Bachelors Degree Commerce, WASEDA University, Japan Positions in the Company Director Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Divisional Operating Officer EVP EVP Infrastructure Projects Business Division Asia Pacific Business Unit, Mitsui & Co (Asia Pacific) PTE. Ltd. Mitsui & Co. (Thailand) Ltd., and Mitsiam International, Ltd., (Thailand)

Positions in the Company Director Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director Bangkok Metro Network Company Limited Bangkok Metro Public Company Limited

Director Vice Chairman of the Executive Committee Director CH.Karnchang Public Company Limited

Previous Experience Managing Director Bangkok Metro Public Company Limited Director Pathum Thani Water Company Limited Senior Director (Business Foreign Section) CH. Karnchang Public Company Limited Head of Division (Construction Standard) The Electricity Generating Authority of Thailand Seminar and Training 2006 Directors Certification Program (DCP) 81/2006 2005 Directors Accreditation Program (DAP) 36/2005 Thai Institute of Directors Association

Previous Experience SVP & Divisional Operating Officer, Infrastructure Projects Business Division Asia Pacific Business Unit, Mitsui & Co (Asia Pacific) PTE. Ltd. (Singapore) Project Director Second Power Project Development Div., Infrastructure Projects Business Unit Project Director First Projects Development Div. Infrastructure Projects Business Unit Director Mitsui Brasilaira IMP. E exp. S.a (Brasil) Seminar and Training -

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MR. TOMONORI SUZUKI


Age 44 Years Education Bachelors Degree Commerce, WASEDA University, Japan Positions in the Company Director Executive Committee Risk Management Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director Mitsui Water Holdings (Thailand) Limited Deputy General Manager First Power Project Development Division Mitsui & Co., Ltd. (Tokyo) Previous Experience Manager, Second Dept. First Power Project Development Division Mitsui & Co., Ltd. (Tokyo) Manager, First Project Development Dept. Power & Infrastructure Project Development Division Mitsui & Co., Ltd. (Tokyo) Project Coordinator, Paiton Project Dept. Project Development Division Mitsui & Co., Ltd. (Tokyo) Seminar and Training 2011 Directors Certification Program (DCP) 154/2011 Thai Institute of Directors Association

MR. SOMPODH SRIPOOM


Age Education Masters Degree Bachelors Degree 52 Years Resource Planning and Management Naval Postgraduate School, Monterey, California, U.S.A. Structural Engineering and Structural Mechanics (Civil Engineering) University of California at Berkeley, California, U.S.A. Civil Engineering Virginia Military Institute, Virginia, U.S.A.

Positions in the Company Director Executive Committee Corporate Governance Committee Risk Management Committee Managing Director Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Managing Director CK Power Company Limited Thai Water Operations Company Limited Pathum Thani Water Company Limited

Previous Experience Advisor Bangkok Metro Public Company Limited Deputy Managing Director Bangkok Metro Company Limited Seminar and Training 2011 Building New Business in Established Organizations, U.S.A 2006 Directors Certification Program (DCP) 73/2006 Thai Institute of Directors Association

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MANAGEMENT
As at December 31, 2012, the Companys management comprises nine executives as follows:

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MR. SOMPODH SRIPOOM


Age Education Masters Degree Bachelors Degree 52 Years Resource Planning and Management Naval Postgraduate School, Monterey, California, U.S.A. Structural Engineering and Structural Mechanics (Civil Engineering) University of California at Berkeley, California, U.S.A. Civil Engineering Virginia Military Institute, Virginia, U.S.A.

MR. CHUTCHAWAN TIENPRASERTKIJ


Age Education Masters Degree Bachelors Degree 46 Years Master of Business Administration (Management and Organization) Sripatum University Commerce and Accountancy (Statistics), Chulalongkorn University

Positions in the Company Management Information System Director Thai Tap Water Supply Public Company Limited Previous Experience Marketing Director Thai Tap Water Supply Public Company Limited Senior Business Development Manager Operation Support Manager Bangkok Metro Company Limited Management information Manager CKET Blue Line Project Manager IT department Manager Siam Kayaba Company Limited Seminar and Training 2011 what does it take to be an MD of a listed company?

Positions in the Company Director Executive Committee Corporate Governance Committee Risk Management Committee Managing Director Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Managing Director CK Power Company Limited Thai Water Operations Company Limited Pathum Thani Water Company Limited

Previous Experience Advisor Bangkok Metro Public Company Limited Deputy Managing Director Bangkok Metro Company Limited Seminar and Training 2011 Building New Business in Established Organizations, U.S.A 2006 Directors Certification Program (DCP) 73/2006 Thai Institute of Directors Association

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MR. SOMPOL KRISADASIMA


Age Education Masters Degree Bachelors Degree 55 Years Master of Business Administration (MBA) Chulalongkorn University Master of Economics (Business Economics) National Institute of Development Administration Engineering (Civil) Chiangmai University

MR. SIVAR NAGDHARY


Age Education Masters Degree Bachelors Degree 55 Years Public Policy and Project Management (Hons.) National Institute of Development Administration Science (Mathematic) Burapha University

Positions in the Company Business Development Director Thai Tap Water Supply Public Company Limited Previous Experience Director, Managing Director Thai Water Operations Company Limited Managing Director BJT Water Company Limited Director of Operations and Business Development Department Pathum Thani Water Company Limited Seminar and Training 2011 What does it take to be an MD of a listed company? 2008 Directors Certification Program (DCP) 110/2008 Thai Institute of Directors Association

Positions in the Company Investment Analysis Director Thai Tap Water Supply Public Company Limited Previous Experience Management Information System Director Thai Tap Water Supply Public Company Limited Executive Vice President, Funding Finance and Securities Group Apex Development Public Company Limited Executive Vice President, Finance & MIS Suntech Group Public Company Limited Seminar and Training 2011 What does it take to be an MD of a listed company? 2006 Directors Certification Program (DCP) 73/2006 Thai Institute of Directors Association

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MR. SOMKIAT PATTAMAMONGKOLCHAI


Age Education Masters Degree Bachelors Degree 40 Years Master of Accounting Thammasart University Commerce and Accountancy Chulalongkorn University

MS. PATHIDA CHAIYASEN


Age Education Masters Degree Bachelors Degree Positions in the Company 46 Years Master of Education (Education management) Chulalongkorn University Politics Science (Human Resource Management) Chulalongkorn University Human Resource and Administration Director Thai Tap Water Supply Public Company Limited

Positions in the Company Accounting and Finance Director Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Bangkhenchai Company Limited Thai Water Operations Company Limited Pathum Thani Water Company Limited

Previous Experience Director CK Power Company Limited Assistant Audit Manager Ernst & Young Office Limited Seminar and Training 2011 What does it take to be an MD of a listed company? 2009 Directors Certification Program (DCP) 121/2009 Thai Institute of Directors Association 2009 Directors Accreditation Program (DAP) 79/2009 Thai Institute of Directors Association

Previous Experience Human Resource Manager Bangkok Microbus Company Limited Senior Human Resource Officer Thanachart Capital Company Limited Seminar and Training 2011 What does it take to be an MD of a listed company?

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MS. SUDARAT CHIAMCHAN


Age Education Masters Degree Bachelors Degree Positions in the Company 47 Years Master of Management Mahidol University Business Administration (Accounting) Ramkhamhaeng University Director, Office of Managing Director and Company Secretary Thai Tap Water Supply Public Company Limited

MR. NATTAPON KINHAWHARN


Age Education Masters Degree Bachelors Degree 45 Years Master of Business Administration, Naresuan University Engineering ( Mechanical Engineering) Rajamangala University of Technology Phra Nakhon

Positions in the Company Engineering and Construction Director Thai Tap Water Supply Public Company Limited Previous Experience Project Operation Department Manager Thai Water Operations Company Limited Maintenance Chief Water Flow Company Limited Project Manager Tyco Earth Tech (Thailand) Company Limited Seminar and Training -

Previous Experience Accounting and Finance Manager Pathum Thani Water Company Limited Accounting and Finance Manager Index International Group Company Limited Seminar and Training 2012 Effective Minutes Taking (EMT) 24/2012 2011 What does it take to be an MD of a listed company? 2011 Company Secretary Program (CSP) 43/2011 2011 Company Reporting Program (CRP) 2/2011 Thai Institute of Directors Association

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MR. HONGTHONG ARTIT


Age Education Masters Degree Bachelors Degree 45 Years Infrastructure and Management Engineering, M.Eng Kasetsart University, Mechanical Engineering, B Eng. King Mongkuts Institute of Technology North Bangkok (KMITN), Bangkok

Positions in the Company Customer Service Director Thai Tap Water Supply Public Company Limited Previous Experience Operation Department Manager Pathum Thani Water Company Limited Engineering and Construction chief Thai Tap Water Supply Public Company Limited Pipeline Site Manager Joint Venture TWCK Engineering Manager Thai Crane International Company Limited / SVS Consultant Seminar and Training -

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NUMBER OF SHAREHOLDING BY DIRECTORS AND MANAGEMENT


Shareholding by Directors and Management as at December 31, 2012
Shareholding by Directors and Management 1. Dr. Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Narong Sangsuriya 4. Mr. Techapit Sangsingkeo 5. Mr. Phairuch Mekarporn 6. Mr. Somnuk Chaidejsuriya 7. Mr. Suvich Pungchareon 8. Mr. Prasert Marittanaporn 9. Dr. Sombat Kitjalaksana 10. Mr. Ryotaro Sumi 11. Mr. Tomonori Suzuki 12. Mr. Sompodh Sripoom 13. Mr. Chutchawan Tienprasertkij 14. Mr. Sompol Krisadasima 16. Mr. Sivar Nagdhary 17. Miss Sudarat Chiamchan 18. Miss Pathida Chaiyasen 19. Mr. Hongthong Artit 20. Mr. Nattapon klinhawharn Chairman of the Board of Directors Vice-Chairman Director Independent Director Independent Director Independent Director Director Director Director Director Director Director and Managing Director Information Technology Director Business Development Director Investment Analysis Director Director, Office of Managing Director Human Resource and Administration Director Acting Customer Service Director Acting Engineering and Constructions Director Number of Shares 342,500 2,100,000 2,000,100 1,000,000 1,058,000 100 2,400,100 2,160,100 222,200 900,000 400 535,050 TTW Shareholding (%) 0.009 0.053 0.050 0.025 None 0.027 None 0.0000025 0.060 None None 0.054 None None 0.006 None None 0.023 0.000010 0.0134

15. Mr. Somkiat Pattamamongkolchai Accounting and Finance Director

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COMPENSATION PAID TO DIRECTORS, MANAGEMENT AND ALL EMPLOYEES

The 2012 Annual Ordinary General Meeting held on 16 March 2012 passed resolution to approve of Directors Remuneration for the year 2012 in the amount of 6,436,500 Baht and Bonus for the 2011 in the amount of 12,129,600 Baht. Rule and Determination of Remuneration procedure details as follow : 1. The remuneration shall be proper and sufficient to persuade and retain qualified directors as required, in avoidance of unreasonably high payments. 2. The remuneration shall comprise three portions as follows a. Retainer Fee shall be taken into account the results of operation and the ability to meet the target. b. Meeting Allowance shall be paid to directors who attend the meeting. c. Bonus shall be paid to the directors once a year, based on value generated to the shareholders, such as, profits of the Company or dividend paid to the shareholders.

Compensation paid to directors in 2012


No. 1 2 3 4 Name-Surname Dr. Thanong Bidaya Mr. Plew Trivisvavet Mr. Narong Sangsuriya Mr. Techapit Sangsingkeo Position Director and Chairman of the Board Director Vice-Chairman Director and Chairman of Executive Committee Independent Director, Chairman of Audit Committee, Chairman of Risk Management Committee and Corporate Governance Committee Independent Director, Chairman of Nomination and Remuneration Committee, Corporate Governance Committee and Audit Committee Independent Director, Chairman of Corporate Governance Committee and Audit Committee Director, Executive Committee, Risk Management Committee and Corporate Governance Committee Director, Nomination and Remuneration Committee and Risk Management Committee Remu- Meeting neration Allowance 648,000 530,000 428,000 524,500 162,000 99,000 108,000 132,000 Total 810,000 629,000 536,000 656,500 Bonus (2009) Total

1,547,563 2,357,563 1,103,968 1,732,968 1,022,676 1,558,676 1,254,509 1,911,009

Mr. Phairuch Mekarporn

472,000

119,000

591,000

1,129,058 1,720,058

6 7 8

Mr. Somnuk Chaidejsuriya Mr. Sompodh Sripoom Mr. Prasert Marittanaporn

413,000 448,000 343,000

89,750 114,000 87,000

502,750 562,000 430,000

987,550

1,490,300

1,072,856 1,634,856 820,951 1,250,951

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No. 9

Name-Surname Mr. Tomonori Suzuki

Position Director, Executive Committee and Risk Management Committee Director and Executive Committee Director and Executive Committee Director and Nomination and Remuneration Committee Director and Nomination and Remuneration Committee Director and Nomination and Remuneration Committee

Remu- Meeting neration Allowance 389,000 330,000 330,000 28,125 226,375 99,000 63,000 84,000 7,375 43,875 -

Total 488,000 393,000 414,000 35,500 270,250 -

Bonus (2009) 931,348 789,839 789,840 283,101 396,341

Total 1,419,348 1,182,839 1,203,840 35,500 553,351 396,341

10 Dr. Sombat Kitjalaksana 11 Mr. Suvich Pungchareon 12 Mr. Ryotaro Sumi 13 Mr. Jun Aketa 14 Mr. Koichi Wakana

Total

5,110,000 1,208,000 6,318,000 12,129,600 18,447,600

Remarks Mr. Koichi Wakana resigned on 30 July 2011 Mr. Jun Aketa was appointed on 31 July 2011 and resigned on 14 November 2012 Mr. Ryotaro Sumi was appointed on 15 November 2012

Directors Compensation in 2010-2012


Description Remuneration Meeting Allowance Total Bonus Total 2012 Persons 12 12 12 Baht 5,110,000 1,208,000 12,129,600 18,447,600 Persons 12 12 12 2011 Baht 4,829,000 1,181,917 10,334,100 16,345,017 Persons 12 12 12 2010 Baht 4,313,817 1,299,250 8,279,000 13,892,067

Compensation Paid to Management


TTWs compensation paid to management team members complies with the policies and principles defined by the Company, which is jointly defined as key performance indicators by the Managing Director and his management team for framing TTWs business each year. Each persons compensation is measured against the performance. Detail of Remuneration, Bonus and Provident Fund of management team as follows :

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Compensation Paid to Management in 2010-2012


Description Remuneration Total Bonus Provident Fund 2012 Persons 10 9 10 Baht 18,338,167 6,573,400 1,266,193 Persons 9 9 9 2011 Baht 16,043,381 7,032,370 918,803 Persons 7 7 7 2010 Baht 13,485,562 5,052,808 631,979

Compensation Paid to all employees


The company has the policy to equally provide remuneration to the employees who have knowledge, ability and responsibility. Method of all employees remuneration fee compared to another utility company in SEC is considered from employee performance.

Other Compensation
TTW has instituted employee welfare and other compensation apart from salary, bonus and provident fund contribution for management and all employees to reflect domestic economic conditions, cost of living, and other standard for peer companies.

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RELATED TRANSACTIONS

In order to undertake related transactions correctly and in accordance with good governance principles between TTW, its groups of companies and related parties, the company has a policy to disclose sufficient information to investors, shareholders and to abide by the rules and regulations of the Securities Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). Moreover, every related transactions between the company, its subsidiaries and related parties were examined scrupulously by the Audit Committee to ensureno conflict of interest. For the fiscal yearsas of December 31, 2012 and 2011, the company disclosed information regarding related transactions in the notes of the financial statements which inspected by the auditor of the company. The following list provides detailed information on related transactions in 2012. Value of related transactions for the year ended 31 December 2012 (Million Baht) Consolidated Separate financial financial statement statement 224

Related Companies

Relationship

Transactions with related parties

1. CH. Karnchang Public Company Limited (CK)

Major shareholder (30.04% holding by TTW) Joint Director with TTW : 1. Mr. Plew Trivisvavet 2. Mr. Narong Sangsuriya 3. Mr. Prasert Marittanaporn CK pay expense to TTW for any service.

Other receivables related parties

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Related Companies

Relationship

Transactions with related parties Other receivables related parties

2. Bangkok Expressway Public Company Limited (BECL) 3. Pathum Thani Water Company Limited (PTW)

Major shareholder (9.24% holding by TTW) Joint Director with TTW is Mr. Plew Trivisvavet BECL pay expense to TTW for any service. Subsidiaries companies (98% holding by TTW) Joint Director with TTW : 1. Mr. Phairuch Mekarporn 2. Mr. Techapit Sangsingkeo Director of TTW who take the position in PTW : 1. Mr. Sompodh Sripoom 2. Mr. Somkiat Pattamamongkolchai PTW pay expense to TTW for any service. Subsidiaries companies (68.50% holding by TTW) Director of TTW who take the position in TWO : 1. Mr. Sompodh Sripoom 2. Mr. Somkiat Pattamamongkolchai TWO pay expense to TTW for any service. Associated companies (30% holding by TTW) Joint Director with TTW : 1. Dr. Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Narong Sangsuriya 4. Mr. Prasert Marittanaporn 5. Mr. Techapit Sangsingkeo Director of TTW who take the position in CKP is Mr. Sompodh Sripoom

Value of related transactions for the year ended 31 December 2012 (Million Baht) Consolidated Separate financial financial statement statement 3 3

Dividend income Interest income Long-term loans to related party accrued interest

607,000 116,000 2,092,500 1,163

4. Thai Water Operations Company Limited (TWO)

Cost of sales and service Rental income Trade payable related parties Retention - subsidiary

28,000 1,000 2,658 5,000

5. C.K. Power Company Limited (CKP)

Investment in associate

2,730,000

2,730,000

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REPORT ON THE BOARD OF DIRECTORS RESPONSIBILITY ON THE FINANCIAL REPORT

The Board of Directors is responsible for the financial statements of Thai Tap Water Supply Company Limited and subsidiaries. The Board of Directors observes the provisions of the Public Limited Companies Act B.E. 2535 (1992), the Accounting Act B.E. 2543 (2000), the Securities and Exchange Act B.E. 2535 (1992) and notifications of the Securities and Exchange Commission on regulations, conditions and methods to disclose financial status and performance of companies issuing securities. The company prepares the financial statements to disclose financial status, performance and cash flow accurately, reasonably and transparently, to benefit to shareholders and general investors. In this regard, the Board of Directors has supervised and developed the good corporate governance. The risk management and internal audit system have been established and maintained to ensure accurate and comprehensive financial records on a timely basis to maintain assets and prevent fraud or significantly unusual operation. To ensure the efficiency and effectiveness, the Board of Directors has appointed the Audit Committee comprising independent directors to supervise the financial statements as well as assess internal control and internal audit. The opinions of the Audit Committee are presented in the Audit Committee Report Section of the Annual Report.

The Board of Directors believes that, with the internal control system and internal audit of the Company, the financial statements of Thai Tap Water Supply Company Limited and subsidiaries present fairly, in all material respects, the financial position, the performance and the cash flow. In addition, significant information is sufficiently disclosed in the notes to financial statements. Accordingly, Ernst & Young Office Ltd., as the Companys auditor, audited and examined the aforementioned financial statements and gave opinions without condition.

Chairman of the Board of Directors

(Dr. Thanong Bidaya)

(Sompodh Sripoom)
Managing Director

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INDEPENDENT AUDITORS REPORT

To the Shareholders of Thai Tap Water Supply Public Company Limited I have audited the accompanying consolidated financial statements of Thai Tap Water Supply Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2012, and the related consolidated statements of comprehensive income, changes in shareholders equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Thai Tap Water Supply Public Company Limited for the same period. Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Thai Tap Water Supply Public Company Limited and its subsidiaries and of Thai Tap Water Supply Public Company Limited as at 31 December 2012, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.

Khitsada Lerdwana
Certified Public Accountant (Thailand) No. 4958 Ernst & Young Office Limited Bangkok: 30 January 2013

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FINANCIAL STATEMENTS
Thai Tap Water Supply Public Company Limited

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Statement of financial position


Thai Tap Water Supply Public Company Limited and its subsidiaries As at 31 December 2012 (Unit: Baht) Note Assets Current assets Cash and cash equivalents Current investments Trade and other receivables Current portion of long-term loans to related party and interest receivable Raw materials and supplies Other current assets Total current assets Non-current assets Other long-term investment Long-term loans to related party, net of current portion Investments in subsidiaries Investment in associate Property, plant and equipment Assets for production of treated water that must be transferred at end of concession Rights to produce and sell treated water and treat waste water Rights to produce and sell treated water Intangible assets Other non-current assets Total non-current assets Total assets Consolidated financial statements 2012 2011 Separate financial statements 2012 2011

7 8 6, 9 6 11

2,676,865,367 3,096,567,482 452,063,407 23,643,137 57,362,109 6,306,501,502 200,000,000 2,771,312,856 8,869,866,014 3,088,456,680

1,967,105,263 2,965,962,319 431,237,544 24,869,016 45,773,968 5,434,948,110 24,807,925 9,232,032,753 3,367,419,936

2,098,390,696 3,096,567,482 295,968,223 311,163,219 15,007,441 49,046,961 5,866,144,022 1,782,500,000 3,466,752,588 2,766,100,000 8,800,099,977 -

1,405,182,127 2,965,962,319 290,594,552 310,681,575 15,562,833 38,704,463 5,026,687,869 2,092,500,000 3,688,853,569 36,100,000 9,161,560,146 -

10 6 12 13 14 15 16 17 18

1,304,160,808 1,333,829,201 1,304,160,808 1,333,829,201 2,104,305,081 2,299,299,214 11,346,387 13,009,775 14,443,749 22,951,997 8,493,321 8,672,654 18,363,891,575 16,293,350,801 18,128,106,694 16,321,515,570 24,670,393,077 21,728,298,911 23,994,250,716 21,348,203,439

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

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Statement of financial position (Continued)


Thai Tap Water Supply Public Company Limited and its subsidiaries As at 31 December 2012 (Unit: Baht) Note Liabilities and shareholders' equity Current liabilities Trade and other payables Current portion of long-term loans from financial institutions Current portion of debentures Income tax payable Accrued interest Other current liabilities Total current liabilities Non-current liabilities Retention - subsidiary Long-term loans from financial institutions, net of current portion Debentures, net of current portion Provision for long-term employee benefits Total non-current liabilities Total liabilities Consolidated financial statements 2012 2011 Separate financial statements 2012 2011

6,19 20 21

110,122,682 490,000,000 159,374,662 139,717,275 82,844,671 982,059,290 5,940,000,000 6,990,471,485 14,780,026 12,945,251,511 13,927,310,801

108,548,853 470,000,000 3,500,000,000

81,740,220 490,000,000 84,500,360 139,717,275 53,972,316 849,930,171

84,462,800 470,000,000 3,500,000,000 112,380,651 51,575,795 4,218,419,246

91,035,029
112,380,651 76,390,390 4,358,354,923 3,670,000,000 3,496,207,735 12,065,745 7,178,273,480 11,536,628,403

6 20 21 22

5,000,000
5,940,000,000 6,990,471,485 6,577,096 12,942,048,581

5,000,000
3,670,000,000 3,496,207,735 4,998,922 7,176,206,657

13,791,978,752 11,394,625,903

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

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Statement of financial position (Continued)


Thai Tap Water Supply Public Company Limited and its subsidiaries As at 31 December 2012 (Unit: Baht) Note Shareholders' equity Share capital Registered 3,990,000,000 ordinary shares of Baht 1 each Issued and fully paid up 3,990,000,000 ordinary shares of Baht 1 each Share premium Retained earnings Appropriated - statutory reserve Appropriated - other reserve Unappropriated Difference on reorganization of business of group companies Equity attributable to owners of the Company Non-controlling interests of the subsidiaries Total shareholders' equity Total liabilities and shareholders' equity Consolidated financial statements 2012 2011 Separate financial statements 2012 2011

3,990,000,000 3,990,000,000 2,637,769,601 23 24 399,000,000 723,128,286 3,557,698,495

3,990,000,000 3,990,000,000 2,637,769,601 399,000,000 516,859,790 3,217,946,278

3,990,000,000 3,990,000,000 2,637,769,601 399,000,000 723,128,286 2,452,374,077

3,990,000,000 3,990,000,000 2,637,769,601 399,000,000 516,859,790 2,409,948,145

(600,362,866) (600,362,866) 10,707,233,516 10,161,212,803 10,202,271,964 9,953,577,536 35,848,760 30,457,705 10,743,082,276 10,191,670,508 10,202,271,964 9,953,577,536 24,670,393,077 21,728,298,911 23,994,250,716 21,348,203,439

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

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Statement of comprehensive income


Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht) Note
Profit or loss: Revenues Sales of treated water Service income Interest income Dividend income Other income Total revenues Expenses Cost of sales of treated water and service Administrative expenses Amortisation of investments in subsidiaries Amortisation of rights to produce and sell treated water and treat waste water Amortisation of rights to produce and sell treated water Total expenses Profit before share of profit (loss) from investment in associate, finance cost and income tax expenses Share of profit (loss) from investment in associate Profit before finance cost and income tax expenses Finance cost Profit before income tax expenses Income tax expenses Profit for the year Other comprehensive income for the year Total comprehensive income for the year Profit attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries Earnings per share Basic earnings per share Profit attributable to equity holders of the Company 28

Consolidated financial statements 2012 2011


4,837,947,630 87,208,925 87,194,836 260,369,569 5,272,720,960 1,495,379,272 262,324,284 29,668,393 194,994,132 1,982,366,081 3,290,354,879 16,504,932 3,306,859,811 (608,241,233) 2,698,618,578 (259,526,810) 2,439,091,768 2,439,091,768 2,421,320,713 17,771,055 2,439,091,768 0.61 4,461,096,603 85,058,131 42,723,454 46,214,054 4,635,092,242 1,322,996,771 221,946,733 30,381,538 194,946,391 1,770,271,433 2,864,820,809 (11,292,075) 2,853,528,734 (517,964,066) 2,335,564,668 (210,943,525) 2,124,621,143 2,124,621,143 2,112,968,832 11,652,311 2,124,621,143 0.53

Separate financial statements 2012 2011


3,218,959,995 26,114,220 190,315,431 606,606,227 99,024,651 4,141,020,524 870,112,747 190,153,965 222,100,981 29,668,393 1,312,036,086 2,828,984,438 2,828,984,438 (607,319,337) 2,221,665,101 (97,670,673) 2,123,994,428 2,123,994,428 2,123,994,428 2,987,966,010 29,410,016 157,431,723 528,599,998 43,048,839 3,746,456,586 747,863,374 167,089,467 221,494,148 30,381,538 1,166,828,527 2,579,628,059 2,579,628,059 (516,943,094) 2,062,684,965 2,062,684,965 2,062,684,965 2,062,684,965

27 12 26

12 16 17

13

26, 27

0.53

0.52

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

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Cash flow statement


Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements 2012 2011
Cash flows from operating activities Profit before tax Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities: Depreciation and amortisation Amortisation of investments in subsidiaries Amortisation of rights to produce and sell treated water Amortisation of rights to produce and sell treated water and treat waste water Loss (gain) on sales of equipment Share of loss (profit) from investment in associate Dividend income from subsidiary Reversal of income tax payable Withholding tax deducted at source written off Provision for long-term employee benefits Amortisation of front end fee of long-term loan Interest expenses Profit from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade and other receivables Raw materials and supplies Other current assets Other non-current assets Operating liabilities increase (decrease) Trade and other payables Other current liabilities Cash paid for long-term employee benefit Cash from operating activities Cash paid for interest expenses Cash paid for corporate income tax Cash received from withholding tax receivable Net cash from operating activities 2,698,618,578 652,613,008 194,994,132 29,668,393 2,387,124 (16,504,932) (91,035,029) 13,784,593 3,242,221 230,000 607,343,917 4,095,342,005 (20,825,970) 1,225,879 (12,291,052) 294,667 (4,026,231) 6,029,641 (527,940) 4,065,220,999 (578,393,543) (102,480,809) 3,384,346,647 2,335,564,668 628,169,135 194,946,391 30,381,538 (2,170,291) 11,292,075 2,806,710 517,020,971 3,718,011,197 (29,783,934) (1,200,358) 18,273,560 43,667 (269,081,030) 7,235,343 3,443,498,445 (512,831,358) (212,276,186) 12,610,527 2,731,001,428

Separate financial statements 2012 2011


2,221,665,101 366,010,278 222,100,981 29,668,393 3,002,394 (606,606,227) 2,287,253 1,578,174 230,000 607,319,337 2,847,255,684 (5,373,671) 555,392 (10,687,395) 294,667 (8,322,643) 1,971,882 2,825,693,916 (578,368,963) (13,170,313) 2,234,154,640 2,062,684,965 339,020,889 221,494,148 30,381,538 (1,921) (528,599,998) 1,375,883 516,943,094 2,643,298,598 (17,869,200) (1,268,194) 14,692,006 43,667 (269,867,083) 5,755,369 2,374,785,163 (512,753,481) (2,402,587) 1,859,629,095

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

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Cash flow statement (continued)


Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht) Consolidated financial statements 2012 2011
Cash flows from investing activities Increase in current investments Increase in other long-term investment Decrease in long-term loans to related party Increase in investment in associate Increase in property, plant and equipment Increase in assets for production of treated water that must be transferred at end of concession Increase in intangible assets Proceeds from disposal of equipment Dividend received from subsidiary Net cash used in investing activities Cash flows from financing activities Increase in long-term loans from financial institutions Decrease in long-term loans from financial institutions Repayment of debentures Cash received from issuance of debentures Dividend payment Dividend payment for non-controlling interests of the subsidiary Net cash from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental cash flows information Non-cash transactions Increase in property, plant and equipment from constructions payable Dividend payable (125,824,143) (200,000,000) (2,730,000,000) (12,967,932) 1,570,893 (3,067,221,182) 2,757,240,000 (470,000,000) (3,500,000,000) 3,492,650,000 (1,874,875,361) (12,380,000) 392,634,639 709,760,104 1,967,105,263 2,676,865,367 809,710 424,639 (1,057,623,202) (36,100,000) (63,589,512) (28,807,883) (11,611,449) 2,876,790 (1,194,855,256) 214,000,000 (450,000,000) (1,396,143,947) (10,788,000) (1,642,931,947) (106,785,775) 2,073,891,038 1,967,105,263 9,875,241 356,053

Separate financial statements 2012 2011


(125,824,143) 310,000,000 (2,730,000,000) (6,962,887) 220,093 606,606,227 (1,945,960,710) 2,757,240,000 (470,000,000) (3,500,000,000) 3,492,650,000 (1,874,875,361) 405,014,639 693,208,569 1,405,182,127 2,098,390,696 809,710 424,639 (1,057,623,202) 310,000,000 (36,100,000) (53,707,688) 99,179 528,599,998 (308,731,713) 214,000,000 (450,000,000) (1,396,143,947) (1,632,143,947) (81,246,565) 1,486,428,692 1,405,182,127 9,875,241 356,053

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

Statement of changes in shareholders equity


90

Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht)
Consolidated financial statements Equity attributable to the parents shareholders Retained earnings

Issued and Appropriated paid-up Share statutory Appropriated share capital premium reserve other reserve 3,990,000,000 2,637,769,601 399,000,000 320,984,674 Unappropriated 2,697,352,562 (1,396,500,000) 2,112,968,832 (195,875,116) 3,217,946,278 (600,362,866) 2,637,769,601 2,637,769,601 399,000,000 2,637,769,601 206,268,496 723,128,286 399,000,000 516,859,790 3,217,946,278 - (1,875,300,000) - 2,421,320,713 (206,268,496) 3,557,698,495 399,000,000 516,859,790 195,875,116 10,161,212,803 (600,362,866) 10,161,212,803 - (1,875,300,000) - 2,421,320,713 (600,362,866) 10,707,233,516

Difference on reorganization of business of group companies (600,362,866) -

Equity Total attributable to equity non-controlling attributable to interests owners of of the the Company subsidiaries 9,444,743,971 29,593,394 (1,396,500,000) 2,112,968,832 11,652,311 (10,788,000) 30,457,705

Total shareholders equity 9,474,337,365 (1,396,500,000) 2,124,621,143 (10,788,000) 10,191,670,508 30,457,705 10,191,670,508 - (1,875,300,000) 17,771,055 2,439,091,768 (12,380,000) 35,848,760 (12,380,000) 10,743,082,276 -

Balance as at 1 January 2011 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Decrease in non-controlling interests of the subsidiary from dividend payment Balance as at 31 December 2011

3,990,000,000

3,990,000,000 -

Balance as at 1 January 2012 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Decrease in non-controlling interests of the subsidiary from dividend payment of the subsidiary Balance as at 31 December 2012

THAI TAP WATER SUPPLY COMPANY LIMITED

3,990,000,000

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

Statement of changes in shareholders equity (continued)


(Unit: Baht)
Separate financial statements Issued and paid-up share capital 3,990,000,000 3,990,000,000 3,990,000,000 3,990,000,000 2,637,769,601 399,000,000 2,637,769,601 399,000,000 2,637,769,601 399,000,000 195,875,116 516,859,790 516,859,790 206,268,496 723,128,286 (195,875,116) 2,409,948,145 2,409,948,145 (1,875,300,000) 2,123,994,428 (206,268,496) 2,452,374,077 Retained earnings Appropriated Appropriated Share premium statutory reserve other reserve Unappropriated 2,637,769,601 399,000,000 320,984,674 1,939,638,296 (1,396,500,000) 2,062,684,965 Total shareholders equity 9,287,392,571 (1,396,500,000) 2,062,684,965 9,953,577,536 9,953,577,536 (1,875,300,000) 2,123,994,428 10,202,271,964 -

WATER

Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012

ENERGY ENVIRONMENT

Balance as at 1 January 2011 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Balance as at 31 December 2011

ANNUAL REPORT 2012

Balance as at 1 January 2012 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Balance as at 31 December 2012

91

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

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92

Notes to consolidated financial statements


Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012

1. Corporate information
Thai Tap Water Supply Public Company Limited (the Company) was incorporated as a limited company under the Civil and Commercial Code on 11 September 2000 and registered the change of its status to a public company limited under the Public Limited Companies Act B.E. 2535 on 6 July 2006. The Company operates in Thailand and its major shareholder is CH. Karnchang Public Company Limited, which was also incorporated in Thailand. The Company is principally engaged in the production and sale of treated water to the Provincial Waterworks Authority (PWA) in the Amphur Nakorn Chaisri, Amphur Sam Pran, and Amphur Budha Monthon areas of Nakhon Pathom and the Amphur Muang and Amphur Kratumban areas of Samut Sakhon, under the Water Purchase Agreement made with the PWA dated 21 September 2000 (An amendment agreement dated 29 December 2008), which covers a period of 30 years as from the Actual Commencement Date (21 July 2004), and under the Concession to operate treated water granted by the Ministry of Natural Resources and Environment (the Concessionaire) for a period of 25 years commencing on 11 March 2005. The Company has to comply with certain conditions as stipulated in the Water Purchase Agreement and the Concession. The terms of the Concession include certain significant conditions, such as that when the Company has completed half of the concession period, if the government or the local government agency wish to purchase the water production business of the Company, the Concessionaire is entitled to cancel the concession in order to purchase it, or permit the relevant local government agency to purchase it, at market price. However, it must provide the Company with advance notice of six months of such action. The Companys registered address is 30/130 Moo 12, Budha Monthon 5 Road, RaiKhing, Sam Pran, Nakhon Pathom.

2. Basis of preparation
2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of Thai Tap Water Supply Public Company Limited (the Company) and the following subsidiary companies (the subsidiaries):

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Companys name Pathum Thani Water Company Limited

Nature of business

Country of incorporation Thailand Thailand

Percentage of shareholding 2012 2011 Percent Percent 98 68.5 98 68.5

Production and sale of treated water in Pathumthani Thai Water Operations Company Limited Operating and maintenance of (31.5 percent held by Pathum Thani Water water supply project Company Limited)

b) Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company. d) Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements. e) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. 2.3 The separate financial statements, which present investments in subsidiaries and associate under the cost method, have been prepared solely for the benefit of the public.

3. New accounting standards issued during the years not yet effective
The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) Financial Reporting Standard: TFRS 8 SIC 10 SIC 21 SIC 25 Operating Segments Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders Accounting Standard Interpretations: Income Taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates

The Companys management believes that these accounting standards will not have any significant impact on the financial

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statements for the year when they are initially applied, except for the following accounting standards. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines. The effect of the adoption to the financial statements of the Company and its subsidiary will be to decrease profit for the year 2012 by Baht 81 million (0.0203 Baht per share) and increase brought-forward retained earnings of the year 2012 by Baht 1 million (0.0003 Baht per share) (separate financial statements: decrease profit for the year 2012 by Baht 80 million (0.0202 Baht per share) and increase brought-forward retained earnings of the year 2012 by Baht 17 million (0.0042 Baht per share)). In addition, the Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows. Effective date Accounting Treatment Guidance for Transfers of Financial Assets Accounting Standard Interpretation: SIC 29 TFRIC 4 TFRIC 12 TFRIC 13 Service Concession Arrangements: Disclosures Determining whether an Arrangement contains a Lease Service Concession Arrangements Customer Loyalty Programmes 1 January 2014 1 January 2014 1 January 2014 1 January 2014 Financial Reporting Standard Interpretations: 1 January 2013

The management of the Company is evaluating the first-year impact to the financial statements of the accounting treatment guidance and accounting standard interpretations and has yet to reach a conclusion.

4. Significant accounting policies


4.1 Revenues recognition Sales of treated water Service income Interest income Dividends Other income and expenses 4.2 Cash and cash equivalents Sales of treated water are recognised when the Company and a subsidiary supply the water to the Provincial Waterworks Authority, and comprise the invoiced value, excluding value added tax, of the treated water supplied, after deducting discounts and allowances. Service income presents the invoiced value, excluding value added tax, of services rendered. Interest income is recognised on an accrual basis based on the effective interest rate. Dividends are recognised when the right to receive the dividends is established. Other income and expenses are recognised on an accrual basis

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Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

4.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging. 4.4 Raw materials and supplies Raw materials and supplies are valued at the lower of cost (first - in, first - out method) and net realisable value and are charged to treated water production costs whenever consumed. 4.5 Investments a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss. b) Investment in associate is accounted for in the consolidated financial statements using the equity method. c) Investment in associate is accounted for in the separate financial statements using the cost method. The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of debt instruments is determined based on yield rates quoted by the Thai Bond Market Association. The fair value of unit trusts is determined from their net asset value.

4.6 Investments in subsidiaries Investments in subsidiaries are accounted for in the separate financial statements using the cost method. Investment costs of subsidiaries are the values paid for their acquisition. The subsidiary is engaged in business under the agreement for the production and sale of treated water with the Provincial Waterworks Authority and concessions granted by state enterprises or government agencies, which have defined fixed periods of operation, as stipulated in the agreement and concessions; and the subsidiary has committed to transfer most of its assets used in the operation to the Provincial Waterworks Authority. Hence, parts of the investment cost are deemed to be investments in the acquisition of rights to operate business under the agreement and concessions, and are amortised on a straight-line basis over the remaining periods of the agreements, commencing from the date of investment in the subsidiary. This amortised amount is presented as amortisation of investments in subsidiary, and recognised as an expense in profit or loss. In addition, parts of the investment cost in the subsidiary to which the Company transferred most of its operations after investment, in order to reduce future operating costs, was amounts paid for acquisition of such operations. These are amortised on a straight-line basis over the remaining period of the Water Purchase Agreement made between the Company and the Provincial Waterworks Authority, commencing from the date of investing in the subsidiary, and presented as amortisation of investments in subsidiary. The amortised amount is recognised as expense in profit or loss.

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4.7 Property, plant and equipment/Depreciation Land is stated at cost. Building and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation for assets is generally calculated by reference to their costs on the straight-line basis over estimated useful lives of 3, 5 and 10 years. However depreciation of the Companys assets used for production of treated water is calculated using the unitsof-production method, based on the following formula: Depreciation for the period Percentage of treated water produced in the period = = Net assets for production of treated water at the beginning of period x Percentage of treated water produced in the period Current periods actual production of treated water (Actual production of treated water for the period + Projected total production of treated water over the remaining term of the Water Purchase Agreement) Total assets for production of treated water - Accumulated depreciationas at the beginning of the period

Net assets for production of treated water as at the beginning of the period

Assets for production of treated water consist of costs of construction of a water treatment plant and distribution system, and related interest expenses and financial costs. Depreciation is included in determining income. No depreciation is charged for land and construction in progress. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognised.

4.8 Assets for production of treated water that must be transferred at end of concession and amortisation Assets for production of treated water of Pathum Thani Water Company Limited that must be transferred to the Provincial Waterworks Authority at the end of the concession to produce and sell treated water (land, water treatment plant and distribution system) are stated at cost less accumulated amortisation and any impairment losses. Amortisation of assets for production of treated water is calculated using the units-of-production method, based on the following formula: Amortisation for the period Percentage of treated water produced in the period = = Net assets for production of treated water that must be transferred at end of concession as at the beginning of period x Percentage of treated water produced in the period Current periods actual production of treated water (Actual production of treated water for the period + Projected total production of treated water over the remaining term of concession for production and sale of treated water) Total assets for production of treated water that must be transferred at end of concession - Accumulated amortisation as at the beginning of the period

Net assets for production of treated water that must = be transferred at end of concession as at the beginning of the period

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Amortisation is included in determining income. Construction in progress is stated at cost and is not amortised.

4.9 Rights to produce and sell treated water and treat waste water and amortisation The Company recorded cost of rights to produce and sell treated water and treat waste water (Operation rights) at cost as at the acquisition date, and allocated such cost in line with forecasted revenues calculated as at the acquisition date. a) Rights to produce and sell treated water Rights to produce and sell treated water are stated at cost less accumulated amortisation and any impairment losses. Amortisation of the rights is calculated using the units-of-production method, based on the following formula: Amortisation for the period Percentage of treated water produced in the period = = Net rights to produce and sell treated water as at the beginning of period x Percentage of treated water produced in the period Current periods actual production of treated water (Actual production of treated water for the period + Projected total production of treated water over the remaining term of operation rights) Net rights to produce and sell treated water as at beginning of the period Amortisation is included in determining income. b) Rights to treat waste water Rights to treat waste water are stated at cost less accumulated amortisation and any impairment losses. Amortisation of the rights is calculated using the units-of-production method, based on the following formula: Amortisation for the period Percentage of waste water treated in the period = = Net rights to treat waste water as at the beginning of period x Percentage of waste water treated in the period Current periods actual treatment of waste water (Actual treatment of wasted water for the period + Projected total treatment of waste water over the remaining term of operation rights) Net rights to treat waste water as at beginning of the period Amortisation is included in determining income. = Total rights to treat waste water - Accumulated amortisation as at the beginning of the period = Total rights to treated water - Accumulated amortisation as at the beginning of the period

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4.10 Rights to produce and sell treated water and amortisation Rights to produce and sell treated water, which arose as a result of the acquisition of ordinary shares in Pathum Thani Water Company Limited being made at a cost higher than the fair value of this subsidiary, is regarded as an intangible asset with a definite life. It is carried at cost less any accumulated amortisation and any impairment losses. The Company amortises it on a straight-line basis over the remaining period of the subsidiarys agreement for the production and sale of treated water, starting from the acquisition date, (approximately 16 years) and tested for impairment whenever there is an indication that it may be impaired. The amortisation period and the amortisation method for rights to produce and sell treated water are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss.

4.11 Intangible assets The intangible assets (assets from which the subsidiary obtained the maintenance and management project) of the subsidiary are carried at cost less any accumulated amortisation and any accumulated impairment losses. Intangible assets with finite lives are amortised on a systematic basis over the economic useful life (5 years) and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss.

4.12 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 Companys operations.

4.13 Long-term leases Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 4.14 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Company also carries out annual impairment reviews in respect of rights to produce and sell treated water. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assets fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss.

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4.15 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The funds assets are held in a separate trust fund and the Company and its subsidiaries contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiaries have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from other long-term benefits are recognised immediately in profit or loss. The defined benefits liability comprises the present value of the defined benefit obligation less unrecognised past service cost and unrecognised actuarial gains or losses. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.

4.16 Income tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation.

5. Use of accounting estimates


The preparation 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 could differ from these estimates.

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6. Related party transactions


During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarized below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Million Baht) Consolidated Separate financial statements financial statements Transfer Pricing Policy 2012 2011 2012 2011 Transactions with subsidiary companies (eliminated from the consolidated financial statements) Cost of sales and services Interest income Rental income Dividend income Transactions with related parties Cost of sales and services Purchase of investment in associate

2,730

2 36

28 116 1 607 2,730

28 Contract price 121 Minimum Loan Rate minus stipulated margin per annum - Contract price 529 As declared 2 Agreed between the parties 36 Contract price

As at 31 December 2012 and 2011, the balances of the accounts between the Company and those related companies are as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011 Other receivables - related parties (Note 9) (related by shareholders or committees) Trade and other payables - related parties (Note 19) Subsidiary Related companies (related by shareholders or committees) Total trade and other payables - related parties Retention - subsidiary 238 238 100 100 62 62 1,205 1,205 238 238 2,658 100 2,758 5,000 5,000 62 62 3,346 1,205 4,551 5,000 5,000

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Long-term loans to related party As at 31 December 2012 and 2011, the balance of long-term loans between the Company and a related party and the movement are as follows: (Unit: Thousand Baht) Separate financial statements Increase Decrease Balance as at Balance as at during the during the 31 December Loans to related party Related by 1 January 2012 year year 2012 Pathum Thani Water Company Limited Loan Interest Total Subsidiary 2,402,500 682 2,403,182 116,061 116,061 Consolidated financial statements 2012 2011 Long-term loans to related party and accrued interest Pathum Thani Water Company Limited Loan Interest Total Less Current portion and accrued interest Long-term loans to related party, net of current portion (310,000) (115,580) (425,580) 2,092,500 1,163 2,093,663

(Unit: Thousand Baht) Separate financial statements 2012 2011

2,092,500 1,163 2,093,663 (311,163) 1,782,500

2,402,500 682 2,403,182 (310,682) 2,092,500

Long-term loans to related party were subject to interest at the Minimum Loan Rate minus a stipulated margin per annum. Repayment is to be made in quarterly installments and due in full within September 2019. Directors and managements benefits During the years ended 31 December 2012 and 2011, the Company and its subsidiaries had employee benefit expenses payable to their directors and management as below. (Unit: Million Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011 66 59 45 39 Short-term employee benefits Post-employment benefits Total 1 67 1 60 1 46 1 40

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7. Cash and cash equivalents


Consolidated financial statements 2012 2011 Cash Bank deposits Total 515 2,676,350 2,676,865 475 1,966,630 1,967,105

(Unit: Thousand Baht) Separate financial statements 2012 2011 105 2,098,286 2,098,391 65 1,405,117 1,405,182

interests between 0.1 and 3.50 percent per annum (2011: between 0.25 and 2.50 percent per annum).

8. Current investments
The balances of current investments represent investments in trading securities and the six-month period to twelve-month period fixed deposits, carrying interest between 2.28 and 5.25 percent per annum (2011: between 2.50 and 5.25 percent per annum). (Unit: Thousand Baht) Consolidated / Separate financial statements 2012 2011 Fixed Deposit Investments in trading securities at fair value Government and state enterprise bonds State enterprise securities Private sector debt securities Marketable equity securities Total current investments 1,769,990 1,769,990 682,762 514,678 129,137 1,326,577 3,096,567 1,633,827 1,633,827 724,445 30,063 502,938 74,689 1,332,135 2,965,962

9. Trade and other receivables


As at 31 December 2012 and 2011, the outstanding balances of trade and other receivables were overdue less than 3 months.

10. Other long-term investment


The balance of other long-term investment represents 22-month fixed deposit, carrying interest at 4.00 percent per annum.

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11. Raw materials and supplies


Consolidated financial statements 2012 2011 Raw materials Spare parts Total 7,453 16,190 23,643 8,066 16,803 24,869

(Unit: Thousand Baht) Separate financial statements 2012 2011 5,016 9,991 15,007 5,303 10,260 15,563

12. Investments in subsidiaries


Details of investments in subsidiaries as presented in separate financial statements are as follows:
Companys name Paid-up capital 2012 2011 Shareholding percentage 2012 2011 (%) Thai Water Operations Company Limited Pathum Thani Water Company Limited Less Accumulated amortisation of investments in subsidiaries Less Dividend received from income before purchase of shares 60,000 60,000 68.5 98 (%) 68.5 700,000 700,000 606,606 606,606 528,600 528,600 Cost 2012 2011

(Unit: Thousand Baht)


Dividend received during the year 2012 2011

1,200,000 1,200,000

98 3,998,310 3,998,310 4,698,310 4,698,310

(1,211,557)

(989,456)

606,606

528,600

(20,000) (20,000) 3,466,753 3,688,854

During the first quarter of the year 2012, the Company received dividend from Pathum Thani Water Company Limited amounting to Baht 303 million, in accordance with a resolution of the Annual General Meeting of Pathum Thani Water Company Limited held on 6 March 2012. During the third quarter of the year 2012, the Company received dividend from Pathum Thani Water Company Limited amounting to Baht 304 million, in accordance with a resolution of Board of Directors meeting of Pathum Thani Water Company Limited held on 26 July 2012. Thai Water Operations Company Limited did not pay dividend during the year ended 31 December 2012.

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104

13. Investment in associate


13.1 Detail of associate: (Unit: Thousand Baht)
Companys name Nature of business Country of incorporation Consolidated financial statements Carrying amounts Shareholding Cost based on equity percentage method 2012 (%) CK Power Limited Making investment in other companies Thailand 30 30 2,766,100 2,766,100 36,100 2,771,313 36,100 2,771,313 24,808 24,808 2011 (%) 2012 2011 2012 2011

Total

(Unit: Thousand Baht) Separate financial statements


Companys name Nature of business Country of incorporation Shareholding percentage 2012 (%) CK Power Limited Making investment in other companies Thailand 30 30 2,766,100 2,766,100 36,100 2,766,100 36,100 2,766,100 36,100 36,100 2011 (%) 2012 Cost 2011 Carrying amounts based on equity method 2012 2011

Total

WATER

ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

105

13.2 Share of profit / loss and dividend received During the years, the Company has recognised its share of profit / loss from investment in the associate in the consolidated financial statements as follows: (Unit: Thousand Baht) Consolidated financial statements Share of profit / loss from investment Companys name in associate during the year 2012 2011 CK Power Limited 16,505 (11,292) Total 16,505 (11,292) During the year 2012, such associated company did not pay dividend.

13.3 Summarised financial information of associate Financial information of the associated company is summarised below.
Paid-up capital as at 31 December 2012 2011 9,200 100 Total assets as at 31 December 2012 2011 45,154 6,499 Total liabilities as at 31 December 2012 2011 22,881 6,437 Total revenues for the year ended 31 December 2012 2011 2,578 1

(Unit: Million Baht)


Profit (loss) for the year ended 31 December 2012 2011 55 (38)

Companys name

CK Power Limited

In May 2012, CK Power Limited increased its registered share capital from Baht 100 million to Baht 9,200 million through the issuance of 910 million new ordinary shares of Baht 10 each, with such new shares to be allocated to the existing shareholders in proportion to their shareholding and the Company has already made payment for the shares of such company in proportion to its shareholding, amounting to Baht 2,730 million. In May 2012, the Company agreed to provide sponsor support to CK Power Limited whereby it will provide financial support to a subsidiary of CK Power Limited in the proportion to its shareholding (30 percent), or a total of not more than Baht 154 million, should the subsidiary be unable to comply with its obligations under the Financing Documents or default on loan repayment.

14. Property, plant and equipment


(Unit: Thousand Baht)
106

Consolidated financial statements

Land 88,090 10,277 (229) 966 99,104 6,882 (821) 2,919 108,084 58,258 11,207 (178) 69,287 12,938 (802) 81,423 29,817 26,661 22,592 8,416 (5,172) 25,836 8,308 (1,702) 32,442 27,496 20,493 17,329 1,899 19,228 946 20,174 2,556 1,946 47,410 11,749 (5,827) 53,332 2,040 (2,437) 52,935 20,615 1,169 21,784 336 22,120

Assets for production of treated water Construction in progress Tools Total 11,455,059 73,465 (6,056) 11,522,468 13,778 (6,462) 11,529,784 1,950,985 344,800 (5,350) 2,290,435 371,987 (2,504) 2,659,918 9,232,033 8,869,866 344,800 371,987 Motor vehicles

Building and building improvement

Furniture and office equipment

Cost: 1 January 2011 480,681 10,798,002 9,202 11,059 Additions 1,221 49,049 Disposals Transfer in (out) (42,466) 41,500 31 December 2011 480,681 10,799,223 15,785 52,559 Additions 4,027 493 Disposals (3,204) Transfer in (out) (2,919) 31 December 2012 480,681 10,799,223 13,689 53,052 Accumulated depreciation: 1 January 2011 1,847,642 2,621 Depreciation for the year 320,657 3,186 Depreciation on disposals 31 December 2011 2,168,299 7,785 Depreciation for the year 346,609 3,186 Depreciation on disposals 31 December 2012 2,514,908 10,971 Net book value: 31 December 2011 480,681 8,630,924 15,785 44,774 31 December 2012 480,681 8,284,315 13,689 42,081 Depreciation for the year 2011 (Baht 332 million included in cost of sales of treated water and service, and the balance in administrative expenses) 2012 (Baht 357 million included in cost of sales of treated water and service, and the balance in administrative expenses)

THAI TAP WATER SUPPLY COMPANY LIMITED

WATER

(Unit: Thousand Baht)

Separate financial statements

Land

Assets for production of treated water Construction in progress Tools Total Motor vehicles

Building and building improvement

Furniture and office equipment

ENERGY ENVIRONMENT

46,574 8,102 (26) 966 55,616 2,562 (821) 2,919 60,276

26,249 4,718 (74) 30,893 685 (1,313) 30,265

9,339 492 9,831 6 9,837

11,326,374 63,582 (100) 11,389,856 7,773 (5,338) 11,392,291

ANNUAL REPORT 2012

20,976 9,245 (1) 30,220 10,402 (802) 39,820 25,396 20,456

8,631 4,979 (2) 13,608 5,279 (1,313) 17,574 17,285 12,691

6,866 1,518 8,384 534 8,918 1,447 919

1,889,279 339,020 (3) 2,228,296 366,010 (2,115) 2,592,191 9,161,560 8,800,100 339,020 366,010

Cost: 1 January 2011 425,949 10,798,002 9,202 11,059 Additions 1,221 49,049 Disposals Transfer in (out) (42,466) 41,500 31 December 2011 425,949 10,799,223 15,785 52,559 Additions 4,027 493 Disposals (3,204) Transfer in (out) (2,919) 31 December 2012 425,949 10,799,223 13,689 53,052 Accumulated depreciation: 1 January 2011 1,847,642 5,164 Depreciation for the year 320,657 2,621 Depreciation on disposals 31 December 2011 2,168,299 7,785 Depreciation for the year 346,609 3,186 Depreciation on disposals 31 December 2012 2,514,908 10,971 Net book value: 31 December 2011 425,949 8,630,924 15,785 44,774 31 December 2012 425,949 8,284,315 13,689 42,081 Depreciation for the year 2011 (Baht 329 million included in cost of sales of treated water and service, and the balance in administrative expenses) 2012 (Baht 354 million included in cost of sales of treated water and service, and the balance in administrative expenses)

As at 31 December 2012, certain plant and equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounted to approximately Baht 77 million (2011: Baht 68 million) (The Company only: Baht 24 million, 2011: Baht 20 million).

107

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108

15. Assets for production of treated water that must be transferred at end of concession
(Unit: Thousand Baht) Consolidated financial statements Water treatment plant andlocal distribution Construction treated water system in progress 5,940,786 177 30,698 5,971,661 5,971,661 2,541,641 265,229 2,806,870 261,776 3,068,646 3,164,791 2,903,015 2,067 28,631 (30,698) -

Land Cost: 1 January 2011 Additions Transfer in (out) 31 December 2011 31 December 2012 Accumulated amortisation: 1 January 2011 Amortisation for the year 31 December 2011 Amortisation for the year 31 December 2012 Net book value: 31 December 2011 31 December 2012 Amortisation for the year 2011 2012 418,088 418,088 418,088 198,414 17,045 215,459 17,187 232,646 202,629 185,442

Total 6,360,941 28,808 6,389,749 6,389,749 2,740,055 282,274 3,022,329 278,963 3,301,292 3,367,420 3,088,457 282,274 278,963

Assets for production of treated water of Pathum Thani Water Company Limited will be transferred to the Provincial Waterworks Authority after the end of the 25-year concession to produce and sell treated water.

16. Rights to produce and sell treated water and treat waste water

(Unit: Thousand Baht) Consolidated / Separate financial statements 2012 2011 1,410,075 (105,914) 1,304,161 1,410,075 (76,246) 1,333,829

Rights to produce and sell treated water and treat waste water Less Accumulated amortisation of rights to produce and sell treated water and treat waste water Rights to produce and sell treated water and treat waste water, net

WATER

ENERGY

ENVIRONMENT

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109

17. Rights to produce and sell treated water

(Unit: Thousand Baht) Consolidated financial statements 2012 2011 3,169,109 (1,064,804) 2,104,305 3,169,109 (869,810) 2,299,299

Rights to produce and sell treated water Less Accumulated amortisation of rights to produce and sell treated water Rights to produce and sell treated water, net

18. Intangible assets


The net book value of intangible assets as at 31 December 2012 and 2011 is presented below.

(Unit: Thousand Baht) Consolidated financial statements 2,493 11,611 14,104 14,104 1,095 1,095 1,663 2,758 13,009 11,346

Cost: 1 January 2011 Additions 31 December 2011 31 December 2012 Accumulated amortisation: 1 January 2011 Amortisation for the year 31 December 2011 Amortisation for the year 31 December 2012 Net book value: 31 December 2011 31 December 2012

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110

19. Trade and other payables


Consolidated financial statements 2012 2011 Trade payables - related party Trade payables - unrelated parties Amounts due to related parties Amounts due to unrelated parties Other payable - unrelated parties (construction payable) Retention payable for contract work - unrelated parties Accounts payable from securities trading Accrued expenses Total trade and other payables 40,378 100 1,889 819 3,652 10,775 52,510 110,123 41,493 1,205 1,675 9,885 5,086 5,993 43,212 108,549

(Unit: Thousand Baht Separate financial statements 2012 2011 2,577 33,270 181 819 3,090 10,775 31,028 81,740 2,612 33,883 1,939 9,885 3,542 5,993 26,609 84,463

20. Long-term loans from financial institutions


Loan 1. 2. 3. Interest rate (%) MLR - stipulated rate in agreement between 2.00% - 2.25% MLR - stipulated rate in agreement between 2.00% - 2.25% The 6-month fixed deposit rate plus a stipulated margin per annum Repayment schedule Quarterly installments as from March 2010 to June 2019 Quarterly installments as from December 2009 to September 2019 Repayment in full by 9 May 2020 Consolidated financial statements 2012 2011

(Unit: Thousand Baht) Separate financial statements 2012 2011

1,240,000 2,430,000

1,350,000 2,790,000

1,240,000 2,430,000

1,350,000 2,790,000

Total Less Current portion Long-term loans, net of current portion

2,760,000 6,430,000 (490,000) 5,940,000

4,140,000 (470,000) 3,670,000

2,760,000 6,430,000 (490,000) 5,940,000

4,140,000 (470,000) 3,670,000

Long-term loan in No.2 and No.3 requires the Company to follow certain financial terms such as to maintain financial ratios.

WATER

ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

111

21. Debentures
Debentures 1 2 3 4 5 Life 3 years 5 years 7 years 7 years 10 years Date of issue 26 February 2009 26 February 2009 26 February 2009 22 February 2012 22 February 2012 Maturity date 26 February 2012 26 February 2014 26 February 2016 22 February 2019 22 February 2022 Interest rate (% per annum) 4.00 4.75 5.35 4.40 4.60

(Unit: Thousand Baht) Consolidated / separate financial statements 2012 2011 1,700,000 1,800,000 1,500,000 2,000,000 7,000,000 (9,529) 6,990,471 3,500,000 1,700,000 1,800,000 7,000,000 (3,500,000) (3,792) 3,496,208

Total Less Current portion of debentures Less Deferred debenture issuing costs Debentures, net of current portion

All debentures of the Company are unsecured, senior debentures with trustees and with a par value of Baht 1,000 each. The interest is payable every 6 months throughout the life of the debentures. The Company is required to maintain certain financial ratios.

22. Provision for long-term employee benefits


Provision for long-term employee benefits, which is compensations on employees retirement, was as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011 Defined benefit obligationat beginning of year Current service cost Interest cost Benefits paid during the year Provisions for long-term employee benefits at end of year 12,065 2,760 483 (528) 14,780 9,259 2,436 370 12,065 4,999 1,378 200 6,577 3,623 1,231 145 4,999

THAI TAP WATER SUPPLY COMPANY LIMITED

112

Long-term employee benefit expenses included in the profit or loss was as follows: Consolidated financial statements 2012 2011 Current service cost Interest cost Total expense recognized in profit or loss Line items under which such expenses are included in profit or loss Cost of sales and service Administrative expenses 2,760 483 3,243 2,436 370 2,806

(Unit: Thousand Baht) Separate financial statements 2012 2011 1,378 200 1,578 1,231 145 1,376

1,266 1,977

1,088 1,718

148 1,430

125 1,251

Principal actuarial assumptions at the valuation date were as follows: Consolidated financial statements 2012 2011 Discount rate Future salary increase rate (depending on work performance) Staff turnover rate 4.0 1.5 - 7.0 0 - 14.0 4.0 1.5 - 7.0 0 - 14.0 Separate financial statements 2012 2011 4.0 5.0 0 - 14.0 4.0 5.0 0 - 14.0

(% per annum) (% per annum) (% per annum) (% per annum)

Amounts of defined benefit obligation for the current and previous three periods are as follows: (Unit: Thousand Baht) Defined benefit obligation Consolidated Separate financial statements financial statements Year 2012 Year 2011 Year 2010 Year 2009 14,780 12,065 9,259 6,501 6,577 4,999 3,623 2,408

WATER

ENERGY

ENVIRONMENT

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113

23. Statutory reserve


Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. At present, the statutory reserve has fully been set aside.

24. Other reserve


According to the amendment of the concession to operate treated water dated 20 March 2008, prior to paying a dividend the Company is required to set aside 10 percent of its annual net profit to other reserve.

25. Expenses by nature


Significant expenses by nature are as follows: Consolidated financial statements 2012 2011 Salary and wages and other employee benefits Depreciation and amortisation Amortisation of assets for production of treated water that must be transferred at end of concession Amortisation of investments in subsidiaries Operate and maintenance expenses Production and maintenance cost 145,359 373,650 278,963 730,454 147,471 345,895 282,274 2,075 571,502 (Unit: Thousand Baht) Separate financial statements 2012 2011 69,164 366,010 222,101 28,366 444,626 64,471 339,020 221,494 29,925 339,305

26. Income tax


Corporate income tax of the Company has been calculated on profit of the non-promoted operations for the year ended 31 December 2012, after adding back certain expenses and deducting income which are disallowable for tax computation purposes. During the second quarter of the year 2009, the subsidiary received a notice regarding a change in its net operating loss brought forward from the Area Revenue Office, Pathum Thani 1. Based on the assessment made by the Area Revenue Office, the subsidiary has had corporate income tax obligations since the year 2008. To reduce the risk of future loss, the subsidiary recorded corporate income tax expenses for the year 2008 to 2011 of totaling Baht 580 million. However, the subsidiary disputes this assessment and therefore appealed to the Board of Appeals of the Revenue Department since the second quarter of the year 2009.

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114

During the first quarter of the current year, the subsidiary receives a letter concerning appeal decision from the Board of Appeals of the Revenue Department which states that the subsidiary can use for tax loss brought forward as previously submitted. According to the letter of appeal decision, the subsidiary has had corporate income tax obligations since the third quarter of the year 2011 totaling Baht 86 million. In this regard, the subsidiary has right to receive refund from the corporate income tax paid from the year 2008 to 2010. The subsidiary is in a process of refunding the corporate income tax for 2008 to 2010 that was paid totaling Baht 386 million. Currently, the refund is being considered by Area Revenue Office, Pathum Thani 1. However, the subsidiary already reversed Baht 91 million overrecorded income tax payable for 2011 to other income in the statement of comprehensive income of the first quarter of the current year. In addition, in September 2012, the subsidiary received a notification letter from the Area Revenue Office regarding the refund of corporate income tax for 2008 amounting to Baht 62 million. The subsidiary recorded such transaction as other income in the statement of comprehensive income in the current period.

27. Promotional privileges


The Company has received promotional privileges from the Board of Investment for production of treated water, pursuant to the promotion certificate No. 1382(2)/2545 issued on 19 June 2002. Subject to certain imposed conditions, the main privileges include the following: Exemption of import duty on imported machinery under specified condition. Exemption from corporate income tax on net profit from promoted operations for a period of eight years from the date the promoted operations commenced generating revenues (21 July 2004). Such privilege expired in July 2012. During the year 2010, the Company had received promotional privileges from the Board of Investment for production of treated water, pursuant to the promotion certificate No. 2437(2)/ 2553 issued on 13 September 2010. Subject to certain imposed conditions, the main privileges include the following: Exemption of import duty on imported machinery under specified condition. Exemption from corporate income tax on net profit from promoted operations for a period of eight years from the date the promoted operations commenced generating revenues (30 September 2010) The Companys operating revenues for the years are below shown divided according to promoted and non-promoted operations. (Unit: Thousand Baht)
Promoted operations 2012 2011 Sales of treated water Non-promoted operations 2012 2011 Total 2012 2011

1,782,494 2,864,698 1,436,466

123,268 3,218,960 2,987,966

WATER

ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

115

28. Earnings per share


Basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. The following table sets forth the computation of basic earnings per share: Consolidated financial statements 2012 2011 Basic earnings per share Profit for the year (Thousand Baht) Weighted average number of ordinary shares (Thousand shares) Profit attributable to equity holders of the Company (Baht per share) 2,421,321 3,990,000 0.61 2,112,969 3,990,000 0.53 Separate financial statements 2012 2011 2,123,994 3,990,000 0.53 2,062,685 3,990,000 0.52

29. Segment information


The Companys and its subsidiaries business operations involve a single industry segment, the production and sell of treated water and are carried on in the single geographic area of Thailand. As a result, all of the revenues, operating profits and assets reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

30. Provident fund


The Company and its subsidiaries have established provident funds jointly with their employees in accordance with the Provident Fund Act B.E. 2530. The Company, the subsidiaries and their employees contribute to the funds monthly at a rate of 5 percent of basic salary. The funds, which are managed by TMB Asset Management Company Limited and Kasikorn Asset Management Company Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2012, the Company and the subsidiaries contributed Baht 6 million (Separate financial statement: Baht 3 million) (2011: Baht 5 million, Separate financial statement: Baht 2 million) to the funds.

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31. Dividends
Dividends Approved by Total dividends (Thousand Baht) Dividend per share (Baht)

Dividends from the earnings of the promoted Annual General Meeting of the operations for July to December 2010 to the Companys shareholders for shareholders listed in the share register book the year 2011 on 7 March as at 16 February 2011 2011 Interim dividends from the earnings of the Board of Directors Meeting promoted operations for January to June 2011 No.3/2011 on 29 July 2011 to the shareholders listed in the share register book as at 16 August 2011 Total dividends for 2011 Dividends from the earnings of the promoted Annual General Meeting of the operations for July to December 2011 to the Companys shareholders for shareholders listed in the share register book the year 2012 on 16 March as at 14 February 2012 2012 Interim dividends from the earnings of the Board of Directors Meeting promoted operations for January to June 2012 No.3/2012 on 26 July 2012 to the shareholders listed in the share register book as at 10 August 2012 Total dividends for 2012

798,000

0.20

598,500 1,396,500

0.15 0.35

997,500

0.25

877,800 1,875,300

0.22 0.47

WATER

ENERGY

ENVIRONMENT

ANNUAL REPORT 2012

117

32. Commitments and contingent liabilities


32.1 Capital commitments As at 31 December 2012, the Company had capital commitments of Baht 1 million (2011: Baht 2 million) relating to the construction and furnishing of the office. 32.2 Service commitments and other commitments a) The Company has entered into an operation and maintenance agreement with Thai Water Operations Company Limited, whereby the subsidiary is to manage and maintenance of production and supply of treated water system and to manage the waste water system. Under the conditions of the agreement, the Company is to pay service fees at a rate stipulated in the agreement. b) Pathum Thani Water Company Limited has entered into a maintenance agreement with Thai Water Operations Company Limited, whereby such company is to maintenance. Under the conditions of the agreement, Pathum Thani Water Company Limited is to pay service fees at a rate stipulated in the agreement. c) As at 31 December 2012, the subsidiaries had commitments totaling Baht 8 million (2011: Baht 6 million) under other service agreements. 32.3 Operating lease commitments The Company has entered into a land lease agreement for office building. The terms of the agreement is between 1 March 2010 and 28 February 2035. Future minimum lease payments required under these non-cancellable operating lease contract were as follows. (Unit: Million Baht) As at 31 December Payable: 2012 2011 in over 1 and up to 5 years 3 3 in over 5 years 9 9 During the year 2012, the Company recognised rental expenses of Baht 1 million (2011: Baht 1 million).

32.4 Bank guarantees As at 31 December 2012, there were outstanding bank guarantees of approximately Baht 265 million (2011: Baht 262 million) issued by banks on behalf of the Company and its subsidiaries in the normal course of business. These included letters of guarantee amounting to Baht 210 million (2011: Baht 212 million) required under the Water Purchase Agreement with the Provincial Waterworks Authority and Baht 55 million (2011: Baht 50 million) to guarantee electricity use (Separate financial statement: Baht 50 million (2011: Baht 52 million) under the Water Purchase Agreement with the Provincial Waterworks Authority and Baht 37 million (2011: Baht 31 million) to guarantee electricity use).

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32.5 Litigation Pathum Thani Water Company Limited In August 2004, a person filed submitted a dispute to the Thai Justice Arbitration Institute for a decision in relation to a complaint against Pathum Thani Water Company Limited (second defendant) and the Provincial Water Authority (first defendant), claiming compensation totaling approximately Baht 64.5 million for a tort against this person in the course of the construction of a water treatment plant. On 24 October 2006, the Arbitral Tribunal ordered the dismissal of the dispute. Subsequently, on 20 December 2006, the person filed suit with the Administrative Court seeking to overturn the order of the Arbitral Tribunal dismissing the dispute. However, no provision for loss from that dispute was set aside in the account since the management of Pathum Thani Water Company Limited believes that there is no material financial damage that will be arise as a result of this dispute.

33. Financial instruments


33.1 Financial risk management The Companys and its subsidiaries financial instruments, as defined under Thai Accounting Standard No. 107 Financial Instruments: Disclosure and Presentations, principally comprise cash and cash equivalents, current investments, trade and other receivables, other long-term investment, long-term loans to related party, trade and other payables, debentures and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiary are exposed to credit risk primarily with respect to trade accounts receivable and there is a high concentration of risk since the Company and its subsidiary have only one major customer, the Provincial Waterworks Authority. However, because the Provincial Waterworks Authority is a government agency, the Company and its subsidiary do not expect to incur material financial losses. The maximum exposure to credit risk is limited to the carrying amounts of receivables as stated in the statement of financial position. Interest rate risk The Companys and its subsidiaries exposures to interest rate risk relate primarily to their cash at banks, current investments other long-term investment, long-term loans to related party, debentures and long-term loans. However, since most of the Companys and the subsidiaries financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal. Significant financial assets and liabilities classified by type of interest rates are summarized in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.

WATER

ENERGY

ENVIRONMENT

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119

(Unit: Million Baht) As at 31 December 2012 Consolidated financial statements Fixed interest rates Floating NonWithin 1-5 Over interest interest 1 year years 5 years rate bearing Total Financial assets Cash and cash equivalents Current investments Trade and other receivables Other long-term investment Financial liabilities Trade and other payables Long-term loans Debentures 1,264 2,967 4,231 200 200 3,497 3,497 3,493 3,493 1,399 1,399 6,430 6,430 14 129 452 595 110 110 2,677 3,096 452 200 6,425 110 6,430 6,990 13,530

Effective interest rate (% per annum) 0.10 - 3.50 2.28 - 5.25 4.00 3.9813 - 5.125 4.00 - 5.35

(Unit: Million Baht) As at 31 December 2011 Consolidated financial statements Fixed interest rates Floating NonWithin 1-5 interest interest 1 year years rate bearing Total Financial assets Cash and cash equivalents Current investments Trade and other receivables Financial liabilities Trade and other payables Long-term loans Debentures 603 2,891 3,494 3,500 3,500 3,496 3,496 1,084 1,084 4,140 4,140 280 75 431 786 109 109 1,967 2,966 431 5,364 109 4,140 6,996 11,245

Effective interest rate (% per annum) 0.25 - 2.50 2.50 - 5.25 3.625 - 5.125 4.00 - 5.35

THAI TAP WATER SUPPLY COMPANY LIMITED

120

(Unit: Million Baht) As at 31 December 2012 Separate financial statements Fixed interest rates Within 1 year Financial assets Cash and cash equivalents Current investments Trade and other receivables Long-term loans to related party Financial liabilities Trade and other payables Long-term loans Debentures 1,089 2,967 4,056 1-5 years 3,497 3,497 Over 5 years 3,493 3,493 Floating interest rate 1,003 2,094 3,097 6,430 6,430 Noninterest bearing 6 129 296 431 82 82 Effective interest rate (% per annum) 0.375 - 3.50 2.28 - 5.25 5.00 - 5.25 3.9813 - 5.125 4.00 - 5.35 (Unit: Million Baht) As at 31 December 2011 Separate financial statements Fixed interest rates Within 1 year Financial assets Cash and cash equivalents Current investments Trade and other receivables Long-term loans to related party Financial liabilities Trade and other payables Long-term loans Debentures 164 2,891 3,055 3,500 3,500 1-5 years 3,496 3,496 Floating interest rate 967 2,403 3,370 4,140 4,140 Noninterest bearing 274 75 291 640 84 84 Effective interest rate (% per annum) 0.25 - 2.50 2.50 - 5.25 3.75 - 5.125 3.625 - 5.125 4.00 - 5.35

Total 2,098 3,096 296 2,094 7,584 82 6,430 6,990 13,502

Total 1,405 2,966 291 2,403 7,065 84 4,140 6,996 11,220

WATER

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Foreign currency risk The Company and its subsidiaries do not consider themselves exposed to foreign currency risk because they have no significant foreign currency transactions.

33.2 Fair values of financial instruments A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arms length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument. The methods and assumptions used by the Company and its subsidiaries in estimating the fair value of financial instruments are as follows: a) For financial assets and liabilities which have short-term maturity, including cash and cash equivalents, current investments, trade and other receivables, trade and other payables, their carrying amounts in the statements of financial position approximate their fair value. b) For other long-term investment, long-term loans to related party and long-term loans carrying interest approximate to the market rate, their carrying amounts in the statements of financial position approximates their fair value. c) For fixed rate debentures, their fair value is estimated by discounting expected future cash flow by the current market interest rate of the loans with similar terms and conditions. The approximate fair value is estimated to be close to the carrying amounts in the statements of financial position. As at 31 December 2012, fair value of significant financial instruments are estimated to be close to the carrying amounts in the statements of financial position, with no material differences.

34. Capital management


The primary objective of the Companys capital management is to ensure that it has an appropriate financial structure and preserves the ability to continue its business as a going concern. According to the statements of financial position as at 31 December 2012, the Groups debt-to-equity ratio was 1.3:1 (2011: 1.13:1) and the Companys was 1.35:1 (2011: 1.14:1).

35. Approval of financial statements


These financial statements were authorised for issue by the Companys Board of Directors on 30 January 2013.