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Good Corporate Governance of PTT Group

Mr. Wisarn ChawalitanonActing President, PTT Philippines Corporation

At the 1st Philippine International Corporate Governance Forum 2012August 15, 2012

Marriott Hotel, Resort World, Pasay City, Metro Manila, Philippines

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Agenda

Good Corporate Governance of PTT

Overview of PTT Group

PTT is a fully-integrated oil and gas company and SOE

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Vietnam

Cambodia

Thailand

Myanmar

Southern China

Laos

Philippines

• Houakhong Trading 27 oil Stations 6 oil depots Sales volume: 4 MML/Mo. (8.24 % mkt share)

• Border trade: Mogas, Gasoil,Lube, Fuel Oil, Bitumen

• PTT Cambodia - 6 oil stations (PTT Cambodia) - 3 oil depots - 2 into-plane service (60% share)• Oil marketing: 15 MML/Mo. (15% Mkt .

Share)• Border trade: Mogas, Gasoil, Lube

• Border trade to Southern Yunnan: Mogas, Gasoil, Jet• FST office (JV): jet fuel supply at HK airport

• Rep. office at Guangzhou (PTT Group)

• Border trade: Mogas, Gasoil• Sell Jet A-1 via vessel• Lube sales via dealer• E&P: rep. office & operation • VLPG

- fill & sell LPG (45%) - 1 LPG Depot• Lube Sales via agent• Solvent business (ThaiOil)• PTTPM rep. office• E&P operation

• Port Klang depot: 216 KT• K1 floating: capacity = 283 KT• Share in Asian Petroleum Hub (APH)• KPL depot: 300 Tons• Oleochemical business (PTTCH’s JV)

• PTTT office• PTTCH Inter office

Malaysia

Singapore

• PTT Philippines Corporation 51 Retail Gas Stations 3 Oil Depots (Subic, Clark and Cebu) Engage in Retail, Commercial, Distributor & Aviation business Sales volume : 60 MML/Mo. (3% Mkt. share)

Data as of April 2010

PTT GROUP ALREADY HAS SIGNIFICANTMARKET PRESENCE IN INDOCHINA

Indonesia

• Trading Gasoil• PTTGE• Coal business

4

11,596

9,129

2,194993

PTT Group is a driving force of Thailand’s economy

Highest market cap in SET

Ministry of Finance(51%)

Vayupak Fund 1

(15%)Thai

(16%)

Total state shareholding

67%

State remittance

GDP contributionShareholding

structureunit : billion baht

GDP ’2011*

*GDP estimated by NESDB as of 21 Nov. 2011

SET PTT Group PTT

Market Cap (million baht) %

SET

PTT Group

PTT

PTTEP

PTTGC

TOP

IRPC

BCP

อื่��นๆ

9,239,435

2,183,268

982,567

585,977

328,985

146,882

96,450

30,017

12,390

100.0

23.6

10.6

6.4

3.6

1.6

1.0

0.3

0.1

As of 16 Feb 2012

Others76%

PTT Group13%

PTT11%

(78% of GDP)

(18% of GDP)

(8% of GDP)

foreign(17%)

Public shareholders

5

Social security(1%)

CGCorporate

Governance

CSRCorporate Social

Responsibility

HPOHigh Performance Organization

PTT Group Mission“Thai Premier Multinational Energy Company”

Economic

Environ-mental

Social

Sustainable Growth Strategy

Synergy Innovation Trust & respectPerformanc

eExcellence

Responsibilityfor Society

Integrity& ethics“sm

art”“good”

To conduct integrated energy and petrochemical business as the nation's energy company whose mission is to equally respond to all stakeholders through the following aspects:

PTT Corporate Values

PTT Group Vision

Dow JonesSustainabilityIndexes

“Top quartile performance”

Big

Strong

Long

Aspiration : Becoming a Global Fortune 100 Company by 2020 With Top Quartile Performance and on DJSI by 2013

Shareholders

Partners

People &Society

Employees

Customers

Nation

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To the Country Ensuring long-term energy security by providing sufficient high quality energy supply at fair prices to support economic growth.

To Society and Community

Being a good corporate citizen to protect environment and improve quality of life of the communities

To Shareholders Conducting a profitable business leading to sustainable growth while providing optimum returns to stakeholders

To Customers Ensuring customer satisfaction by delivering high quality products and services at fair prices

To Business partners

Conducting business with partners at fair and arm’s length basis promoting synergy and coordination, creating capability and efficiency in long-term business partnership

To Employees Providing supporting capability building in professional conduct, ensuring employee’s wellbeing to be comparable to other leading companies

Sustainable Growth Strategy

Economic

Social Environmental

Sustainable growth strategy

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HPOHigh

Performance Organization

CSRCorporate

SocialResponsibility

CGCorporate

Governance

“Stakeholders are ensured that directors can independently perform their duties with appropriate balance.”

* Director and Secretary to the Board : President &CEO

Board of Directors is comprised of more than half of independent directors

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A total of 15 directors(as of August 2012)

14 non-executive directors 1 executive director*

10 independent directors 5 directors

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Good corporate governance structure

SOE roles Listed company roles Observe government policies Relieve energy price burden for

consumers

Create benefits for shareholders Grow business

From balancing between a state-owned enterprise and a listed company

Challenges of PTT’s Board of Directors in supervising PTT as a state-owned enterprise and a listed company

shareholders

suppliersemployees

customers

country

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VS

To equitable balance among all groups of stakeholders

Public/society/

community

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Supervising AgenciesBusiness operation Management

More supervision after PTT privatization

Energy operator Listed co.

Analyst

shareholders

ตลท.

ปปช.

สตง.

SOE

Energy Operation Act

Energy Regulatory Commission

สศช.

Corporate Governance Handbook of PTT

1st CG Handbook in 2003

Revised CG Handbook in 2005

คู่��มื�อื่ CG ฉบั�บัปรั�บัปรั�ง ป� 2010

• Compliance with Laws and Regulations and Human Rights Principles

• Political Support

• Stakeholding and Conflicts of Interest

• Confidentiality, Safeguarding and Use of Inside Information

• Practices with Customers and Consumers

• Practices with Trade Competitors

• Procurement and Practices with Trade Partners

Corporate Governance Principles of PTT

Code of Business Ethics

Adhere to Good Corporate Governance Principles for transparency enhancement

• CG Handbook in line with standards of SET and OECD

• Equivalent to Code of Ethics of Thai constitution

• Community and Social Responsibilities

• Treatment of Employees

• Internal Audits and Internal Audits

• Receiving and Offering Customary Gifts, Assets or other Benefits

• Safety, Health and the Environment

• Intellectual Properties and Use of the Information Technology and Communication System 13

CG in ActionCommunication channels

www.pttplc.com

corporate@pttplc.comContact PTT

corporatesecretary@pttplc.comContact Corporate Secretary

Web site

E-mail

Call Center

ir@pttplc.comcontact Investor Relations Department

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1365

SET Awards• Top Corporate Governance Report

Award 2010 & 2011• Best Corporate Social Responsibility

Awards 2011

TQA 2010 (Natural Gas Transmission Pipeline) TQC 2011 (Oil BU, Gas BU, Trading BU)

Trusted Brand 2010 & 2011

• Thailand’s Top Brand -Platinum Award for Service Station

• Thailand’s Top Brand - Gold Award for Lubricant products

Board of the year Award 2010/11

Best CEO 2010 & Best CEO for Energy Sector 2011

Outstanding State Enterprise Award 2010 & 2011• Best State Enterprise of

the Year, Best of the Best

• Outstanding Leadership

• Outstanding Innovation

2010-2012 Awards of AchievementsPTT is widely recognized among business communities both international and local

Best CEO 2011 & 2012Best CFO 2011 & 2012Best Managed Company 2011 & 2012Best Corporate Governance 2011 & 2012Best Investor Relations 2011 & 2012Best Corporate Social Responsibility 2011 & 2012Best Commitment to Strong Dividend Policy 2011 & 2012

Asian Corporate Director Recognition Awards 2010 & 2011 & 2012• Asia’s Best CEO• Asia’s Best CFO• Best IR Website/Promotion • Best Environmental Responsibility

• Best Investor Relations• Best Investor Relations Professional

Thai BMA Best Bond Awards 2010 (Deal of the Year, Most Creative Issue, Best Investor Relations Issuer) & 2011 • The Leading Corporations in Thailand

• The Leadership Achievement Award for the Asia Pacific region

The winners of The Asset’s Platinum Awards in 2010 & 2011

The Asian Banker Annual Achievement Awards 2012 • The Leadership

Achievement Award for the Asia Pacific region

• The Leading Corporations in Thailand

Asia Talent Management10th Asia Business Leaders Award 2011

8th Top Asia Overall Performance of 2011 (7th Top Asia Energy in 2010)3rd Top Asia Integrated Oil&Gas of 2011 (35th Top Global Energy in 2010)

95th Fortune Global 500 of 2012- 128th in 2011 - 155th in 2010 - 118th in 2009

167th The Biggest Listed Companies in the World 2012-171th in 2011-196th in 2010 -244th in 2009

Dow Jones SustainabilityIndex # 17 in 2012

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Key Success factors of PTT’s CG

Strong support by executives CG is part of

corporate culture, not just a regulationAssigned as one

of KPIs for all departments Continuous campaigns on

CG’s importanceTrust in CG, daily practices, and

beliefs

Continuously improve and update CG to

align with business and environment

changes

Balance All Stakeholders’ Interests

SocietyEnvironment

Shareholders

Partners

People &Society

Employees

Customers

Nation

People &

Society

Partners

Shareholders

Nation

Customers

Employees