Becl 06

Financial Summary 2Message from the Chairman of the Board of Directors 4Report of the Audit Committee 5The Board of Directors 6Management Team 9Organization Chart 10Expressway System Map 12Social Activities 14First Class Services 16Executive Summary 18Risk Factors 19Nature of Business Operations 25Business Operations of the Company 30Research and Development 34Property Used in Business Operations 35Future Projects 38Legal Disputes 39Capital Structure 44Management 46Internal Control 62Connected Transactions 63Financial Status and Operational Results 65Other Related Information 79Report on Responsibilities of the Board of Directors towards

the Financial Report 80Information of Company Executives 81Financial Statements 86

Contents

ANNUAL REPORT 20062

Financial Summary Consolidated Financial Statement of BECL & its Subsidiary Company

Financial HighlightsUNIT : MILLION BAHT

Consolidated financial statements For the years ended December 312006 2005

Total assets 45,739 46,784Total liabilities 30,212 31,869Shareholders' equity 15,527 14,915

Toll revenue 6,944 6,715Total revenue 7,012 6,734Gross profit 4,828 4,680

Net profit 1,543 1,488

Financial Ratio

Items 2006 2005

Net profit margin (%) 22.01 22.20Return on shareholdersû equity (%) 10.14 10.15Return on total assets (%) 3.34 3.15

Book value per share (baht) 20.17 19.37Share issued and fully paid up 770 770 (million shares)

Financial Summary

BANGKOK EXPRESSWAY PUBLIC COMPANY LIMITED 3

Average Daily Toll Revenue : Chalerm Mahanakorn & Si Rat Expressway

Average Daily Traffic : Chalerm Mahanakorn & Si Rat Expressway

Financial Summary

ANNUAL REPORT 20064

As the year 2006 marked the auspicious occasion of60th Anniversary Celebrations of His Majesty the KingBhumibol Adulyadejûs Accession to the Throne, BangkokExpressway Public Company Limited (BECL) andExpressway and Rapid Transit Authority of Thailand (ETA)joined all Thai people to participate in the celebrationsand to pay tribute to the revered king. To express ourdeepest gratitude for HM the Kingûs invaluable mercy,BECL and ETA donated a total of 60 million Baht toChai Pattana Foundation, an organization under the royalpatronage of HM the King undertaking myriaddevelopment projects to improve quality of life of Thaipeople nationwide. Moreover, we hosted a special projectentitled çExpressway Invites 60 Million Hearts to PayTribute to the Beloved Monarché, which allowed allmotorists to sign a well-wishing cards for their belovedking.

As the service provider of Si Rat and Udon RatthayaExpressways, BECL was committed to achieve theultimate goal of helping minimize the traffic congestion inthe capital of Thailand. Moreover, to maximize themotoristsû satisfaction, BECL always prioritize theimprovement of service quality. Good governance wasthe paramount principle to ensure the maximum benefitsof all related parties. Great importance was alsoattached to the following components of efficient admin-istration: correct data exposure, accessibility, equality andtransparency. Emphasis on these componentscontributed to BECLûs reception of the Best CorporateGovernance Report in SET Awards 2006. The awardeven highlighted the social recognition of BECL as alisted company achieving the most outstanding practiceof good governance. Moreover, the corporate governancewere voted to be çVery Goodé by Thai Institute ofDirectors (IOD) and Stock Exchange of Thailand (SET),which brought one of the greatest prides to the companyin 2006.

In terms of service, BECL was always determined tomaintain the high quality of service management to meetthe standards of ISO 9001: 2000. In 2006, to furtherimprove the service, BECL increased the convenience ofthe motorists by installing more toll collecting boothscitywide. Moreover, some booths were modified andchanged into special toll collecting channels, which

contribute to the reduction of traffic congestion duringrush hours in both in-bound and out-bound circulations.The improvement at Rama IX to Srinagarindra Roads,which was a part of Si Rat Expressway, was to serveBangkok commuters bound for Suvarnabhumi Airportparticularly. Opened on September 28, 2006, theinternational airport was believed to play an importantrole in promoting the national economic, social andtourism growth. To improve the infrastructure leading tothe new airport was, therefore, a testimonial of BECLûsstrong determination in fulfilling the commitment ofstimulating the countryûs development.

The operational results of Bangkok ExpresswayPublic Company Limited and its subsidiary for 2006 showeda net profit of Baht 1,543.26 Million. The Board ofDirectors resolved to seek a Meeting of Shareholdersûapproval to pay dividends for the period from July toDecember 2006 at the rate of Baht 0.50 per share.During the year, the Board of Directors resolved to payinterim dividends for the operational results of the firstsix months, from January 1 to June 30, 2006, to theshareholders at the rate of Baht 0.50 per share. As aresult, the total dividend payment for 2006 is Baht1 per share.

We would like to extend our deepest gratitude to allshareholders, patrons, public and private agencies,financial institutions as well as to express our mostsincere appreciation to all BECL personnel for theirconsistent dedication. We do hope that the similarcoordination and support will be sustained forever.

(Dr. Virabongsa Ramangkura)Chairman of Board of Directors

Message from the Chairmanof the Board of Directors


The Audit Committee, as appointed by the CompanyûsBoard of Directors, comprises three independentdirectors, namely Prof. Suphachai Phisitvanich, as theAudit Committee Chairman, Gen. Sampao Choosri andProf. Dr. Kanok Wongtrangan, as Audit CommitteeMembers, with the Deputy General Manager of theInternal Audit Office as secretary to the Audit Committee.

The Audit Committee thoroughly performed theduties under the scope of duties and responsibilitiesassigned by the Companyûs Board of Directors based onits knowledge, ability and independence without anyrestriction on access to information, as well as providedadvice on various relevant matters, with goodcooperation from the Companyûs executives, internalauditors and the Companyûs auditor. In addition, theAudit Committee pursued the Companyûs operationunder the scope of duties and responsibilities. In theyear 2006, the Audit Committee held 7 meetings forconsideration of various matters as follows:

1. The Audit Committee reviewed annual andquarterly financial statements, whereby the auditor, theinternal auditors and the Companyûs executivesresponsible for preparation of financial report discussedand shared opinions on preparation of the financialstatements in compliance with generally acceptedaccounting principles and sufficient disclosure of the same.The financial report thus fairly presents accurate andreliable in material aspects.

2. The Audit Committee approved the internal auditplan and reviewed the results of such internal audit, aswell as assigned the Companyûs executives to considerand review the appropriateness and sufficiency of theinternal control system and to properly proceed withsuch matters for the benefit of all interested parties ofthe Company. The Audit Committee regularlymonitored and evaluated the internal control to ensure

that the specified system was efficiently implementedand could be reviewed that the Companyûs internalcontrol system was fully complied, covering managementcontrol, operation control and financial control, includingreview of the Companyûs compliance with the applicablelaws, regulations and articles. Authorization and approvalwere granted in accordance with the specifiedprocedures and criteria in line with the sufficient andproper internal control system without any materialerror, subject to transparent corporate governance.Moreover, the system was efficiently adjusted incompliance with the changing circumstances.

3.The Companyûs risk management was suitable forits business and the Company had the risk preventionsystem as necessary to minimize impacts which mightbe on the Companyûs business operation. Moreover,the Company duly and completely complied with laws,requirements of the Stock Exchange of Thailand andother relevant laws.

4. The Audit Committee sufficiently reviewed theexecution and disclosure of information on connectedtransactions or transactions which might give rise toconflict of interest in the year 2006 to ensure that thetransactions were justifiably executed for the optimumbenefit of the Company, which the Company hasadhered to the policy on the good corporate governance.

5. The Audit Committee proposed the CompanyûsBoard of Directors to consider nominating either Mr.Sophon Permsiriwallop or Miss Rungnapa Lertsuwankulor Miss Sumalee Reewarabandith or Miss VissutaJariyathanakorn or Mrs. Nonglak Pumnoi of Ernst &Young Office Limited for appointment as the Companyûsauditor for the year 2007, taking into account thereliability, ability to provide service and advice onaccounting standards, audit and certification of financialstatements in a timely manner, with the auditing fee inthe amount of not exceeding Baht 785,000, so as topropose such nomination to the meeting of shareholdersfor approval.

(Professor Suphachai Phisitvanich)Chairman of the Audit Committee

Report of the Audit Committee

ANNUAL REPORT 20066

Dr. Virabongsa RamangkuraChairman of the Board of DirectorsChairman of the Nomination CommitteeChairman of the Remuneration CommitteeAcademic Achievement- Doctor of Law (Honorary), Webster UniversitySt. Louis, USA

- Ph.D. (Economics), University of Pennsylvania, USA- M.A. (Economics), University of Pennsylvania, USA- B.A. (Political Science), Chulalongkorn University- Directors Certification Program (DCP),Thai Institute of Directors Association

Prof. Suphachai PhisitvanichDirector, Chairman of the Audit CommitteeNomination Committee MemberRemuneration Committee MemberAcademic Achievement- Honorary Ph.D. (Accounting) Thammasat University- Certificate, National Defence College (Class 32)- M.B.A. (Finance), Ohio State University, USA- B.A. (Accounting), Thammasat University- B.A. (Commerce), Thammasat University- Directors Certification Program (DCP),The Role of Chairman, Board Performance Evaluation,Thai Institute of Directors Association

Mr. Plew TrivisvavetDirector, Chairman of the Executive BoardNomination Committee MemberRemuneration Committee MemberAcademic Achievement- M.Sc. (Electrical Engineering), Osaka University, Japan- B.Sc. (Electrical Engineering), Osaka University, Japan- Directors Certification Program (DCP),Thai Institute of Directors Association

General Sampao ChoosriDirector and Audit Committee MemberAcademic Achievement- Chulachomklao Royal Military Academy- Royal Military Academy (Saint Cyr), France- Directors Accreditation Program (DAP),Thai Institute of Directors Association

The Board of Directors


Mr. Supong ChayutsahakijDirector and Vice Chairman of the Executive BoardAcademic Achievement- Honorary Ph.D. (Management Science)Phranakhon Rajabhat University

- Master of Management, Sasin Graduate Institute ofBusiness Administration of Chulalongkorn University

- Master of Engineering (Electrical),University of Tokyo, Japan

- Bachelor of Engineering (Electrical),University of Tokyo, Japan

- Directors Certification Program (DCP),Thai Institute of Directors Association

Prof. Dr. Kanok Wongtrangan- Director and Audit Committee MemberAcademic Achievement- Ph.D. (Political Science), The Johns HopkinsUniversity, USA

- M.A. (Political Science), University of California,USA- B.S. (Medical Science), Chulalongkorn University- Directors Certification Program (DCP),Thai Institute of Directors Association

M.L. Prasobchai KasemsantDirector and Executive DirectorAcademic Achievement- M.S. (Civil Engineering), Stanford University, USA- M.S. (Operations Research), Stanford University, USA- B.S. (Civil Engineering, Mathematics),Virginia Military Institute, Virginia, USA


Mr. Panit DunnvatanachitDirector and Executive DirectorAcademic Achievement- M.B.A. (Finance), Washington University, St. Louis, USA- Bachelor of Arts & Science, Washington University,St. Louis, USA



Eng 01-16_M5 3/12/07, 19:367

ANNUAL REPORT 20068

Miss Arisara DharamadhajDirector and Executive DirectorAcademic Achievement- M.B.A., Roosevelt University, USA- Bachelor of Economics University of theThai Chamber of Commerce


Mrs. Payao MarittanapornManaging DirectorAcademic Achievement- Master of Business Administration,Chulalongkorn University

- Higher Diploma in Auditing,Thammasat University

- Bachelor of Accountancy,Chulalongkorn University


As at February 27, 2007


Mrs. Vallapa PosyanondDirector and Executive DirectorAcademic Achievement- Bachelor of Business Administration,American University, Washington,DC, USA

Mr. Sintop SirisinghaDirectorAcademic Achievement- Bachelor of Engineering (Civil),Kasetsart University

- Master of Engineering (Transportation)Asian Institute of Technology

- Royal Thai Army War College (Class 49)


Mrs. Payao MarittanapornManaging Director


Management Team

Mr. Sanguan KunatinunAssistant Managing Director

Mrs. Sudruthai PrommartAssistant Managing Director

Miss Vasana WattananukulchaiGeneral Manager of

Toll Revenue Division

Mrs. Ngamnit KanokgarnjanarGeneral Manager of

Administration Division

Mr. Phaisan LertsalaluckGeneral Manager ofMaintenance Division

Mr. Phakpoom ThaweewittayarutGeneral Manager of

Managing Director Office

Mrs. Wattana SittiwaitayapornDeputy General Manager of

Internal Audit Office

Miss Panan TosuwanthawornGeneral Manager ofFinance Division

ANNUAL REPORT 200610

Organization Chart




Organization Chart


Expressway System Map



Over the past business operations, other than ourmanagement aiming for good operational results andcreating value added to shareholders, the Company hasalso been focusing on the significance of activities show-ing our responsibilities towards society, by drawing upplans for activities for public interests and providing sup-port to various social activities and projects, such as,youth encouragement, public charity, other public activi-ties and participation in energy saving and environmentpreservation. Throughout the year 2006, the Companyhas been engaging in activities contributing to societyand sponsoring various projects as follows:

1. Public Charity ActivitiesçExpressway Invites 60 Million Hearts to Pay

Tribute to the Beloved Monarché

On the auspicious occasion of the 60th AnniversaryCelebrations of His Majesty the Kingûs Accession to theThrone, the Company, in association with theExpressway and Rapid Transit Authority of Thailand,organize the çExpressway Invites 60 Million Hearts toPay Tribute to the Beloved Monarché Project to presentBaht 60 Million to His Majesty the King, through theChaipattana Foundation, in support of the Royally-Initi-ated Projects, and invited the Expressway users to jointlysign the cards for blessing His Majesty the King.

çThe Expressway Joins for Helping Flood VictimséProject

In the year 2006, several provinces in all regions ofThailand were struck by heavy floods. To help thosesuffering from such disastrous events, the Companytherefore cooperated with the Expressway and RapidTransit Authority of Thailand to organize the çExpresswayJoins for Helping Flood Victimsé to donate items, driedfoods as well as Baht 1,000,000 (One Million Baht)donation and receive donations of funds and necessaryitems from the Expressway users, which were thengathered and delivered through the Supreme CommandHeadquarters. In addition, the Company also contributedfunds to the Ministry of Defense and the Royal ThaiPolice Wivesû Association to help and provide relief forthose suffering from floods in various provinces.

2. Activities for the Youth

The Company realizes the significance of encouragingthe youth to learn and gain out-of-class experiencesthrough their participating in special activities, and there-fore sponsored various projects as follows:

çThis Life is for Thailand and His Majesty the KingéProject

The Company joined in sponsoring the çThis Life is forThailand and His Majesty the Kingé Project, which brought500 students in the junior high schools throughout thecountry to join a camp and take part in activities forbuilding up loyalty to the nation, religion and the King,and raising awareness of discipline and unity, as well aslearning to live together in society, at the Thanarat Camp,Prachuap Khiri Khan Province, hosted by the Royal ThaiArmy, the State Railway of Thailand and JorSor. 100Radio Station.

New Generation of Investors Project

The Company jointly sponsored training program forjuniors and seniors in Bachelorûs degrees from highereducational institutes throughout the country, held by theThai Investors Association and the Stock Exchange ofThailand to develop and extend knowledge to the youthto have proper basic understanding of roles, duties andrelation of capital market towards the economic systemof the country.

3. Sponsoring Environment Preservation Activity

The Company sponsored the Conservation andRestoration of Coral Reefs and Beaches Foundation andthe Thai Industrial Estate Foundation to implement theproject for construction of offshore breakwater toconserve çWat Khao Taoé, an old temple in PrachuapKhiri Khan Province, as sand around the shore has beeneroded away by waves and currents, which wouldpossibly impact trees, beach and structures in the temple.Furthermore, the Company also provided support forresearch in the çResearch Project for Analysis ofProblems on Application of Legal Procedures andManagement of Pollution and Environment Problems in

çExpressway Invites 60 Million Hearts to PayTribute to the Beloved Monarché

çThe Expressway Joins for Helping Flood Victimsé

Social Activities


Thai Societyé conducted by the Anti-Air Pollution andEnvironmental Protection Foundation so as to run acampaign and encourage awareness among members ofsociety to have more responsibilities towards theenvironment.

4. Other Social Activities

Drive Safely with the Expressway Project

The Company, in association with FM 91 Traffic Radioand the Metropolitan Police Bureau, arranged for trainingin the çDrive Safely with the Expresswayé Project forthose interested to learn and practice their skills fordriving safely on the Expressways, resulting in a largenumber of training participants.

Expressway Photo Contest Project

The Company, in association with the RoyalPhotographic Society of Thailand under the RoyalPatronage of H.M. the King, held the Expressway photocontest project named çExpressway Lift Up Your Lifeé towidespreadly promote the art of photography and openup an opportunity for students and the general peoplewho love photography to participate in and express theirtalents and works. The winner would receive a prize,together with Expressway coupons, an honorable shieldand a certificate from the Royal Photographic Society ofThailand under the Royal Patronage of H.M. the King.

There were a number of people interested in thisactivity and a total of 495 photographs were submitted toattend the contest. Each photograph expressed creativeideas reflecting the life quality of city people who enjoythe convenience, rapidity and safety of the Expressway,

which corresponded to the Companyûs main concept ofachieving the aspiration towards alleviation of trafficcongestion.

Thai Property Safeguard Project

This Project was held by JorSor. 100 Radio Station forhelping motorists whose cars were stolen. In this regard,JorSor. 100 coordinated with the relevant organizationsto prevent cars from being stolen and sold at the border.It is the eighth year that the Company has beensponsoring this Project.

Support of Traffic Policeûs Operations

The Company offered motorcycles to the ExpresswayPolice Station 2 and the Expressway and Rapid TransitAuthority of Thailand for use during their operations toensure the convenient and safe traveling for theExpressway users. Moreover, the Company also pro-vided financial aid to support families of the policeofficers in the Expressway Police Station 2, who diedfrom accidents during their operations.

Run for the One We Love Project and Contribution tothe Bone Marrow Transplantation Project

The Company took part in supporting the Run for theOne We Love Project by sending our staff to participatein the Bangkok-Doi Tung charity marathon, so as to helpbone marrow cancer patients who are underprivilegedand create awareness of exercise. In addition theCompany also offered financial contribution to the BoneMarrow Transplantation Project organized by the KingChulalongkorn Memorial Hospital, the Thai Red CrossSociety.

çThis Life is for Thailand andHis Majesty the King é

çThe Expressway Joins for Helping Flood Victimsé

çExpressway Photo ContestéçDrive Safely with the Expressway é

Social Activities


Services on the Expressway are the core of BECLûsmanagement, therefore, over the past period, BECLhas been determined to develop and enhance theefficiency of its services so as to ensure thatmotorists will be impressed by the convenience,rapidity and cost-efficiency of the services.

In regards to the first class services, BECLprovides various services as follows:

1.Communications and FacilitiesBECL established the expressway system control

centers by having communications staff to coordinatewith the rescue operation units as well as policeofficers on the expressway and at the ground levelroads so as to service the motorists 24 hours a day.The communications facilities comprise:

- Closed-circuit Television (CCTV)Closed-circuit televisions are installed atintervals throughout the Expressway to monitortraff ic f low and various events on theExpressway, hence, motorists can be assured ofprompt assistance should there be anyemergency.

- Emergency Telephones (ETS)Emergency telephones are installed at intervalsof every 1 kilometer on the Expressway so as toenable motorists to contact communications staffat the control centers by pressing the metalshaft or green button to call the center, then thecommunications staff pans the closed-circuittelevision which is nearest to such SOS

First Class Services

telephone to the location of such telephone. Thisenables the communications staff to monitor thecalling site and simultaneously, sound and videorecorders record the conversation between themotorist and the communications staff.

- Variable Message Sign (VMS)BECL publicizes various information on trafficflow and significant events to motorists by VMSwhich are installed prior to various intersectionson the Expressway.

2.Traffic ManagementTraffic management is a routine operation BECL

coordinates with the Traffic Division, ETA and thepolice officers at the Si Rat Expressway PoliceStation so as to ensure rapid and safe passage formotorists, especially at on-off ramps or at any areaswith heavi ly congested traf f ic . The traf f icmanagement facilities comprise:

- Traffic SignsBECL has installed traffic signs to ensure themotoristsû safe and careful use of theExpressway, namely, speed limits on theExpressway when it is raining or traffic directionindicators.

- Weighing StationsBECL takes into account the safety of motoristsby providing weighing station so as to controlthe weight limits in accordance with the legalstandards. Any truck loaded in excess of theweight limit will not be allowed to enter theExpressway.

48 ANNUAL REPORT 2006

The Board of Directorsû Authority and Duties

1. Supervising the Companyûs operations to ensurecompliance with laws, detailed objectives and theArticles of Association, as well as resolutions ofshareholders meetings, and protecting the Companyûsinterest based on the good corporate governanceprinciples.

2. Determining policies and directions of the Companyûsoperations and supervising the management to takeactions to ensure compliance with the policy withefficiency and effectiveness so as to result in theoptimum economic value to the business and greatprosperity to shareholders.

3. Convening the annual ordinary general meeting ofshareholders by no later than four months from theCompanyûs year end account closing date andconvening extraordinary general meeting ofshareholders as required.

4. Convening the Board of Directors meetings on aquarterly basis, and each meeting requires at least60 percent of all directors. Decisions of the meetingshall be made by a majority of votes. In the case ofan equality of votes, the chairman of the meetingshall have an additional casting vote.

5. Considering approval for budget for investment andthe Companyûs annual business operations, includingmonitoring use of the Companyûs resources.

6. Providing complete, correct and sufficient reports onfinancial information, data and general information whichare important for shareholders, and affirming thecertification of the reported information.

7. Introducing to the Company an internal controlsystem, internal audit and efficient measures tomanage risks, as well as following up on suchmatters on a regular basis.

8. Considering clearly determining and separating roles,duties and responsibilities among the Board ofDirectors, subcommittees and the management, withregular communication regarding such roles, dutiesand responsibilities to directors, subcommittee members,the management and staff of the Company.

9. Supervising the Executive Board to comply with thespecified policies and the Executive Board isauthorized to approve any transaction binding uponthe Company in an amount of not exceeding Baht 50Million per transaction, excluding those transactionsgiving rise to conflict or interest, including suchtransactions requiring approval from shareholders asper the regulations of the SEC and the StockExchange.

(2) Executive BoardThe Board of Directors appointed an Executive Board

to assist in providing advice and suggestions to themanagement and make other arrangements as assignedby the Board of Directors. As at 31 December 2006,the Executive Board comprises seven executive directorsas listed below:1. Mr. Plew Trivisvavet Chairman of the Executive Board2. Mr. Supong Chayutsahakij Vice Chairman of the

Executive Board3. M.L. Prasobchai Kasemsant Executive Director4. Mr. Panit Dunnvatanachit Executive Director5. Miss Arisara Dharamadhaj Executive Director6. Mr. Akadej Bijaphala(1) Executive Director7. Mr. Suvich Pungchareon(2) Executive Director

Remarks: (1) Mr. Akadej Bijaphala resigned from his office,

effective since 31 December 2006.(2) Mr. Suvich Pungchareon retired on 31 December 2006,

and was replaced by Mrs. Payao Marittanaporn since

1 January 2007.

The Executive Board schedules to meet monthly toconsider various matters within the scope of itsauthority and duties as assigned by the Board ofDirectors and to consider screening such matters to beproposed to the Board of Directors for considerationand approval.

The Executive Boardûs Authority and Duties1. Delivering guidelines for policy, supervising, providing

suggestions and advice for the Managing Director andthe management.

2. Conducting feasibility studies on new projects, such as,project granted by ETA or under the Second StageExpressway Agreement.

3. Having power to approve any juristic act binding upon theCompany in an amount of not exceeding Baht 50,000,000(Fifty Million Baht Only) per act.

4. Having power to approve, appoint, remove, and determinesalary and other remunerations, including expensesand facilities of the Companyûs officers or staff in theposition of General Manager or higher, but not includingthe Managing Director.

5. The Executive Board or the Chairman of the ExecutiveBoard shall have power to convene the Executive Boardmeetings and/or determine rules and regulations of themeetings as it deems appropriate.

6. Proceeding with other matters as assigned by the Boardof Directors from time to time.

59BANGKOK EXPRESSWAY PUBLIC COMPANY LIMITED

and Exchange Commission, including the Companyûswebsite at http://www.becl.co.th, which is providedin two languages (Thai and English languages). TheCompany regularly updates the information on the10th day of every month to be generally available toall investors.

The Company also arranges an Investor Relationsunit to communicate and provide services of newsand information to investors and analysts to equallyobtain information. In this regard, investors may contactat 0-2641-4611 Ext. 630 and 632. Investors, who mayfind it inconvenient to visit may also contact for conferencecall or submit questions via email at [email protected].

Other than the disclosure of information in accordancewith provisions of laws, the Company provides informationto local and foreign investors. In the year 2006, inaddition to providing reception for 98 company visitsof investors and 5 meetings of analysts, the Companyalso participated in 2 meetings in Singapore andHong Kong. Moreover, the Company realizes thesignificance of the domestic institutional investors byarranging the Road Show in Bangkok to publicize theCompanyûs information to seven domestic fundmanagement companies.

5) Personnel

(1) As at 31 December 2006, the Company has a totalof 613 staff. The staff in the operation line is themain line of business of the Company, representing79 percent of all staff, while the remaining staffwould be reporting to the Office of the ManagingDirector and the Internal Audit Office, representing5 percent, and the Support Line, representing 16percent.

(2) Human resource development policy

The Company realizes the significance of continuousdevelopment of personnel, which is deemed asthe main work plans each year, so as to achievecertain objectives in provision of development of

quality of work performance and quality of life of staffto ensure the excellence of management in provisionof satisfaction and impression to service users. TheCompany then set out work plans and proceededwith personnel development by focusing on thefollowing main aspects:

1. Improvement of competency of work operationin both primary line and support line, particularlyin respect of such main line, training courseon knowledge of work operation has beenprovided, in order for staff to have competencyand skills in using equipment, tools with specificcharacteristics for the respective aspects inrescue operation, traffic management, tollcollection and maintenance of system androute, to ensure the excellence of service inline with the policy of the Company.

2. Development of potential of all staff at everylevel, based on the belief that every personhas potential which could be used withoutlimitation if they were provided support andopportunity. The Company thus allows staff toshow their potential through various qualityactivities, such as, 5S, Suggestion Systemand Work Improvement. In addition, staff whowill become executives of the Company inthe future will be encouraged to develop theirmanagerial skills by taking Mini MBA coursefrom leading educational institutes, as well assupport them to further study in a level higherthan bachelor degree in the fields relating totheir assigned duties or long term trainingcourse in specific fields, including continuedstudy visits in Thailand and overseas.

3. Determination of the succession plan, particularlysuch work positions in the primary line, showingthat the Company focuses on rather internalthan outside recruitment, and significantly takesinto account the performance and potentials.In this regard, the Company makes preparationsfor those potential successors in the developmentof their knowledge, competency and skills asrequired for their work positions.

4. Maintenance of good personnel who have highability and work potential, whereby the Company


System and Work Improvement, as well asthe QCC Day/Quality Day event, which areheld every year since the year 2000. Theseactivities encourage staff to demonstrate theirperformance of tasks in such activities in thepresence of the high level executives, andalso encourage their participation in presentationof achievements with external organizationsto share knowledge and experience, and toserve as encouragement and positive attitudefor their group quality activities in the future.

In regard to the labor relations, the Companyencourages and supports budget for leisureactivities by allowing staff who are interestedin useful activities to form activity group in theform of various clubs, such as, sports club, whichwould arrange for activities throughout the year,e.g., jogging for good health, as well asparticipation in running for charity in associationwith the government sector on various occasions;arrangement of the annual internal sportsactivity, so as to encourage staff to work outand then select the Companyûs athletes toparticipate in sports competition with externalorganizations to gain more experience.Furthermore, there are also clubs for recreationand society, such as, musical club and voluntarycommunity development club. In this regard,such activities are well supported by theCompany and interested staff, thereby allowingthe said activities to proceed in accordancewith the objectives of establishment.

7. The Company emphasizes on the significanceof quality of life, not only for staff but alsomotorists and the communities surroundingthe Expressway routes, and therefore, hasapproved the budget in the operation ofenvironmental management system inaccordance with ISO 14001 standard bypreparing the operational plan for the year2007.

8. The Company and staff, as Thai people,realize the national energy problems anddeem it as a duty to jointly conserve energy.On 1 March 2006, the Company appointed

would allow for advancement in their careerpaths by setting out clear criteria to be regularlyimplemented every year. Moreover, the Companyarranges for the individual development plan,especially such personnel at the supervisor levelor higher.

5. Given the fact that the Company realizes safetyin life and assets of its customers, the Companythus also realizes work safety accordingly,whereby each department shall set out measuresrelating to proper use of safety equipment asappropriate for each task, as well as providingbudget in support of improvement of theefficiency of such equipment to be ready foreffective and sufficient use. Moreover, theCompany also provides training to its staffon the awareness of safety at work anddaily life.

6. The Company realizes the significance of thequality of life of staff, which is deemed as oneof the primary objectives of the quality policyby ensuring that the Company complies withsuch policy. The Company also encouragesthe roles of the staff welfare committee, beginningwith the arrangement for the legitimate electionas required by law, so as to ensure thatacceptable staff representatives would beelected to perform the duty of inspection ofthe Companyûs treatment of staff under thelegal requirements; as well as provision ofother benefits than those prescribed by lawin a widespread and fair treatment manner,including advice on welfare improvement asappropriate for the changing circumstances.

Moreover, the Company is still determinedto improving the efficiency and quality of workperformance, by way of maintenance of thequality of its service provision through theCompanyûs quality management certification,ISO 9001:2000, which has been certified bySGS (Thailand) Limited in accordance withUKAS Standard of England and NAC Standardof Thailand since the year 2001 up to the presenttime. Furthermore, the Company continuesto focus on the significance and support ofgroup quality activities, such as, 5S, Suggestion


a work group for energy conservation,comprising staff in the supervisory level fromevery unit to perform the duties as follows:

To arrange the activities and training forstaffûs awareness of energy conservation;To study and analyze factors affectingthe use of energy;To study the energy saving methods withoutany effect on the efficiency in the Companyûsbusiness operation nor reducing the staffûsquality of life;To propose the concept of energyconservation and prepare the operationalplan;To adapt the achieved practical guidelinesas part of routine operation.

In such arrangements, the Companyconducted training for staff to become awareof the energy problems and guidelines toconserve energy in both staff and organizationlevels. Training for staff were already conductedon four occasions, with a total of 309 staffattending the training, representing 50 percentof all staff. In addition, the Company tookstaff to visit the energy conservation exhibitionsheld by two external agencies obtaining theoutstanding energy conservation awards. TheCompanyûs staff then contributed to initiatemore than 30 energy saving measures, whichwere improved as appropriate and continuouslypracticed until present. In this regard, suchinitial measures may not result in monetaryreturn, but aim to promote awareness amongthe staff on energy conservation which wouldlead to change in lifestyle and thought ofenergy conservation guidelines. Regardingsuch arrangements, the Company participatedin Value Engineering - Energy ConservationProject of the Department of AlternativeEnergy Development and Efficiency, theMinistry of Energy.

9. The Company encourages staff to live bythe Royal Speech of His Majesty the King in

respect of Sufficiency Economy, by joiningwith the Bangkok Metropolitan Administrationin the Sufficient Life Project in accordancewith the Royal Initiatives Project, which wouldcause staff to have discipline in money spendingso as to properly and cost-effectively spendand save money by keeping records of incomeand expenditure. In this regard, the Companyarranged for training for staff, whereby therewere 162 staff attending the training. Theexpected result would be that staff can applyknowledge to practice and further extend totheir colleagues and families.

(3) Benefits

In order to determine the appropriate and competitiveremuneration, to maintain the good and competent staffto work with the organization, the Company participatedin the survey of wages and remuneration with the instituteconducting wage survey every year. Therefore, it canbe assured that the Company determines the fair andappropriate remuneration to the staff. In addition tosuch remuneration for work performance, includingvarious benefits as provided by law, the Company alsorealizes the significance of the quality of life of staff,therefore, the Company provides additional benefitsin relation to health for staff by way of provision ofbenefits relating to medical and dental treatment fees asan option and facilitate staff to receive medical treatmentother than hospitals as specified in their social securitycard, as well as giving Engerix-B vaccination to staffwho have no immunity from such disease, includingthe yearly general medical examination and cancerexamination to the staff.

Furthermore, the Company also provides security tostaff in case of leaving employment or retirement, byestablishing a provident fund, whereby the Companyalso remits contributions to the fund at the rate of 5percent of wages, as well as group life insurance forstaff, so as to ensure security for staff family accordingly.


The Company realizes the significance of its internalcontrol system which is sufficiently efficient to prevent orminimize risks which might arise to the Company. TheBoard of Directors has formed the Internal Audit Officeto audit the work operation system in various departmentsof the Company as per the annual audit plan approvedby the Audit Committee to ensure each department’sefficient and effective performance of work and optimizeduse of the Companyûs resources. This also includes thecontrol of the performance of work, the timely preparationof accurate and reliable financial reports, as well as thecompliance with the policy in accordance with the lawand regulations of the government agencies. Furthermore,the Company regularly reviews the efficiency of the controlsystem to ensure the optimum benefit to the shareholdersfrom the business operation based on the fairness interms of benefits to all interested persons. In addition, toensure the Internal Audit Officeûs independence in theaudit and counterbalancing, the Company requires theInternal Audit Office to directly report the audit results tothe Audit Committee.

In regard to risk management, the Company hasmajor concern on this matter by taking into accountvarious risk factors currently sustained or threatened tobe sustained in the future by the Company to analyzeimpact and possibility of such risks and to determinemeasures to prevent and deal with such risks. Theefficiency of the risk management system are reviewedand evaluated once a year, and for every time when the

risk level is changed, the results are regularly monitored.The significant risk factors are described in Risk Factorson pages 19 to 24.

In the year 2006, the Audit Committee convenedseven meetings, whereby the executives of the Companyattended all such meetings. The Board of Directors andthe Audit Committee have evaluated the internal controlsystem as per the internal control adequacy evaluationform in the Board of Directors meeting on 27 February2007 and concluded that the Companyûs internal controlsystem was considered adequate and appropriate to thebusiness operation without material fault in the internalcontrol system; and it could prevent improper or unauthorizeduse by executives of the property of the Company andthe Subsidiary. The financial report of the Company wasmade in accordance with the generally accepted accountingprinciples. Disclosure of information in the financial reportwas accurate and reliable. The Companyûs businessoperation was in accordance with the law on securitiesand exchange and other applicable laws. Furthermore,the Board of Directors emphasizes that the Companyshould develop its good corporate governance system inaccordance with the 15 Clauses of the Good CorporateGovernance of the Stock Exchange of Thailand.

Internal Control


(1) Transactions with persons who may have conflictof interest are subject to the conditions and criteriain the ordinary course of business. The executionof connected transactions and transactions withconflict of interest are in accordance with the regulationsof the Stock Exchange of Thailand.

In the consideration and approval of any connectedtransaction, the Company shall propose such matterto the Board of Directors meeting, in which thedirectors having any involvement which may giverise to a conflict of interest shall not be entitled toattend and vote on such matter. Furthermore, theAudit Committee, as assigned by the Board ofDirectors, shall consider the disclosure of the Companyûsinformation in respect of the connected transactionor the transaction which may have conflict of interest,to ensure accuracy and completeness.

(2) During the year 2006, the Company executed connectedtransactions with parties who may have conflict ofinterest, as per the nature of connected transactionsas follows:

2.1) CH. Karnchang Public Company Limited wasa connected person, as a major shareholderof the Company with the common chairmanof the executive boards of both companies,and one executive in CH. Karnchang PublicCompany Limited is the spouse of an executiveof the Company, and had connectedtransactions as follows:

1.Purchase of Ordinary Shares in Thai TapWater Supply Public Company Limited The2006 Annual Ordinary General Meeting ofShareholders resolved to grant approval forthe Company to purchase 1.68 millionordinary shares in Thai Tap Water SupplyPublic Company Limited from CH. KarnchangPublic Company Limited, representing anincrease in investment proportion by 5.16percent of the registered and paid up capital,at the price of Baht 320 per share, totalingBaht 536.4 Million, and the Company alreadypaid for such shares. On 6 July 2006,

Thai Tap Water Supply Co., Ltd. registeredfor conversion to be a public limited companyand changed the par value of its ordinaryshares from Baht 100 per share to Baht 1per share.

On 24 July 2006, the Company purchasedadditional 81.25 million ordinary shares inThai Tap Water Supply Public CompanyLimited from CH. Karnchang Public CompanyLimited, or representing 2.5 percent of theregistered capital, at the price of Baht 3.20per share, totaling Baht 260 Million, andthe Company already paid for such shares.

2. Inspection and Repair of the Structure ofthe Udon Ratthaya Expressway

On 29 September 2006, the Subsidiaryexecuted a contract engaging CH. KarnchangPublic Company Limited for repair andimprovement of the structure of the BangUdon Ratthaya Expressway, The contracthad a term of 3 months from theexecution date with the total value of Baht7.34 Million.

In the year 2006, the Subsidiary madepayment for the work in full.

3. Inspection, Repair and Improvement of theSi Rat Expressway

On 29 September 2006, the Companyexecuted a contract engaging CH. KarnchangPublic Company Limited for repair andimprovement of the structure of the Si RatExpressway. The contract had a termof 12 months from the execution datewith the total value of Baht 58.30 Million.

In the year 2006, the Company madepayment for the work in the amount of Baht7.75 Million.

Connected Transactions


4.Repair of At-Grade Road and Improvementof Drainage System of the Udon RatthayaExpressway

On 1 November 2005, the Subsidiaryexecuted a contract engaging CH. KarnchangPublic Company Limited for repair of anat-grade road and improvement of thedrainage system of the Udon RatthayaExpressway. The contract had a term of3 months from the execution date with thetotal value of Baht 20.82 Million.

In the year 2005, the Subsidiary madepayment for the work in the amount ofBaht 11.60 Million and made the remainingpayment in the amount of Baht 9.22 Millionin the year 2006.

2.2) SouthEast Asia Energy Limited was aconnected person, namely, the Companyand SouthEast Asia Energy Limited hadCH. Karnchang Public Company Limitedas major shareholder with common executives.The connected transaction was that on 26May 2006, the Company executed the EquityContribution Agreement with SouthEast AsiaEnergy Limited and Nam Ngum 2 PowerCo., Ltd. (Co-Borrower), other shareholdersand lender of SouthEast Asia Energy Limited,pursuant to which the Company agreed toprovide financial support to SouthEast AsiaEnergy Limited as per the shareholdingproportion (12.5 percent), totaling in theamount of not exceeding Baht 494 Million,divided into 3 cases as follows:

1. Equity contribution for corporate incometax burden from the profit of business inLaos, in case SouthEast Asia EnergyLimited is not granted an exemption inaccordance with the Double Tax Treatybetween Laos and Thailand, in theamount of not exceeding Baht 156 Million.

2. Equity contribution for corporate incometax burden in case such company is notgranted an investment promotion by theBoard of Investment, in the amount ofnot exceeding Baht 244 Million.

3. Equity contribution for the deficient revenuein case of construction of Nam Ngum 3Hydroelectric Plant which affects thepower generation of SouthEast AsiaEnergy Limited rendering SouthEast AsiaEnergy Limited unable to comply withthe conditions relating to the loan, inthe amount of not exceeding Baht 94Million.

Moreover, the Company agreed to sponsoradditional funds to SouthEast Asia EnergyLimited in the amount of not exceedingBaht 63 Million in case the Co-Borrower ofSouthEast Asia Energy Limited defaults onrepayment of the loan or is unable to complywith the conditions relating to the loan.

The information on connected transactionsfor the year ended 31 December 2006has been disclosed in Note 7 to theFinancial Statements. The Board of Directorsand the Audit Committee have reviewedsuch connected transactions entered intoby the Company and found the same justified.


Financial Status and Operational Results

Summary of the Report of the Auditor

Ernst & Young Office Limited, as the auditor for the

Company and the Subsidiary, has audited the consolidated

balance sheets of Bangkok Expressway Public Company

Limited and the Subsidiary as at 31 December 2006 and

2005, and the related consolidated statements of income,

changes in shareholdersû equity, and cash flows for the

years then ended, and the individual financial statements

of Bangkok Expressway Public Company Limited for the

same years, and is of the opinion that the financial

statements and the consolidated financial statements as

referred to above present fairly, in all material aspects,

the financial status of Bangkok Expressway Public

Company Limited and the Subsidiary, and of Bangkok

Expressway Public Company Limited, as at 31 December

2006 and 2005, their operational results and cash flows

for the years then ended in accordance with generally

accepted accounting principles.

Summary of the Report of the Audit Committee

The Audit Committee is of the view that the financial

statements of Bangkok Expressway Public Company Limited

were prepared in accordance with generally accepted

accounting principles. The disclosure of information in

the financial report is accurate and reliable. The Companyûs

internal control system was adequate and proper to the

nature of its business without substantial fault.

Summary of the Report on Responsibilities of the

Board of Directors towards the Financial Report

The Board of Directors of Bangkok Expressway Public

Company Limited is of the opinion that the financial

statements for the year 2006 of the Company and the

Subsidiary, which have been reviewed by the Audit

Committee in conjunction with the management, and

audited by the Companyûs auditor, present fairly, in all

material aspects, the financial status and operational

results in accordance with generally accepted accounting

principles.


Bangkok Expressway Public Company Limited and the SubsidiaryAs at 31 December 2006, 2005 and 2004

2006 2005 2004

Amount Percent Amount Percent Amount Percent

Assets

Current assets

Cash and cash equivalents 236,233,362 0.52 214,207,371 0.46 165,212,982 0.34

Current investments 312,515,124 0.68 63,250,951 0.14 652,857,032 1.35

Other current assets

Advance payments under 6,528,944 0.01 1,381,613 0.00 12,111,453 0.03

service contract

Prepaid expenses 3,760,287 0.01 6,294,167 0.01 2,708,685 0.01

Withholding tax deducted

at sources 541,730 0.00 18,050 0.00 1,013 0.00

Others 6,076,566 0.01 7,510,272 0.02 5,817,837 0.01

Total current assets 565,656,013 1.24 292,662,424 0.63 838,709,002 1.73

Non-current assets

Long-term investments - net 3,025,817,347 6.62 2,230,452,821 4.77 1,295,121,315 2.68

Property, plant and

equipment - net 249,247,973 0.54 257,134,417 0.55 274,612,907 0.57

Construction in progress - - - - 22,109,138 0.05

Right to operate completed

expressway sectors - net 41,877,901,172 91.56 43,984,810,790 94.02 45,908,191,098 94.94

Intangible assets - net 3,890,788 0.01 2,131,093 0.00 1,269,716 0.00

Other non-current assets

Deposits 16,088,123 0.04 16,098,078 0.03 16,071,918 0.03

Others 382,074 0.00 527,527 0.00 496,653 0.00

Total non-current assets 45,173,327,477 98.76 46,491,154,726 99.37 47,517,872,745 98.27

Total assets 45,738,983,490 100.00 46,783,817,150 100.00 48,356,581,747 100.00

(Unit: Baht)

12.1 Financial Statements of Bangkok Expressway Public Company Limited and the Subsidiary

Balance Sheets


(Unit: Baht)


2006 2005 2004


Liabilities and

shareholdersû equity

Current liabilities

Bank overdrafts - - 6,749,483 0.01 3,943,421 0.01

Trade accounts payable 30,871,546 0.07 27,468,027 0.06 26,942,753 0.06

Current portion of Long-Term

loans 2,646,720,000 5.79 2,580,000,000 5.51 2,193,000,000 4.54

Value added tax payable 36,993,095 0.08 36,634,250 0.08 36,439,496 0.08

Other payables 8,529,974 0.02 3,503,737 0.01 10,655,982 0.02

Other liabilities

Corporate income tax

payable 298,642,184 0.65 307,600,462 0.66 86,626,020 0.18

Retentions guarantees 19,130,331 0.04 24,396,258 0.05 15,446,436 0.03

Others 52,237,563 0.11 38,622,908 0.08 37,784,066 0.08

Total current liabilities 3,093,124,693 6.76 3,024,975,125 6.47 2,410,838,174 4.99

Non - Current liabilities

Provision for

compensation for site

acquisition cost 1,382,090,000 3.02 1,460,870,000 3.12 1,401,070,000 2.90

Long-term loans - net 25,736,297,600 56.27 27,383,017,600 58.53 29,963,017,600 61.96

Total non-current liabilities 27,118,387,600 59.29 28,843,887,600 61.65 31,364,087,600 64.86

Total liabilities 30,211,512,293 66.05 31,868,862,725 68.12 33,774,925,774 69.85

Balance Sheets (Continued)


(Unit: Baht)


2006 2005 2004


Shareholdersû equityShare capital

Registered800,000,000 ordinaryshares of Baht 10 each 8,000,000,000 17.49 8,000,000,000 17.10 8,000,000,000 16.54

Issued and paid up770,000,000 ordinaryshares of Baht 10 each 7,700,000,000 16.83 7,700,000,000 16.46 7,700,000,000 15.92

Premium on ordinary shares 4,848,492,969 10.60 4,848,492,969 10.36 4,848,492,969 10.03Unrealised loss on changes

in value of investment (160,690,327) (0.35) - - - -Retained earnings

Appropriated - statutoryreserve 473,087,511 1.03 395,927,156 0.85 321,512,234 0.66

Unappropriated 2,666,581,044 5.83 1,970,534,300 4.21 1,711,650,770 3.54Total shareholdersû equity 15,527,471,197 33.95 14,914,954,425 31.88 14,581,655,973 30.15Total liabilities and

shareholdersû equity 45,738,983,490 100.00 46,783,817,150 100.00 48,356,581,747 100.00

Balance Sheets (Continued)


Bangkok Expressway Public Company Limited and the SubsidiaryFor the years ended 31 December 2006, 2005 and 2004

(Unit: Baht)

Income Statements

2006 2005 2004


Revenues

Toll revenue 6,943,815,622 99.02 6,714,904,053 99.71 6,549,954,762 99.23

Other income

Gain on sale of investment

in a subsidiary company - - - - 27,144,000 0.41

Gain on sale of investment in

other companies 10,222,677 0.15 - - - -

Interest income 16,472,439 0.23 8,987,076 0.13 9,699,633 0.15

Dividend income 24,880,000 0.35 - - - -

Others 17,465,727 0.25 10,214,589 0.15 13,828,209 0.21

Total revenues 7,012,856,465 100.00 6,734,105,718 100.00 6,600,626,604 100.00

Expenses

Amortisation of rights to operate

completed expressway sectors 2,116,192,189 30.18 2,034,956,986 30.22 1,987,577,871 30.11

Provision for compensation

for site acquisition cost 421,220,000 6.01 359,800,000 5.34 305,940,000 4.64

Operating and administration

expenses 1,002,520,445 14.30 927,710,351 13.78 926,256,351 14.03

Loss on impairment

of investment 13,282,309 0.19 - - - -

Total expenses 3,553,214,943 50.67 3,322,467,337 49.34 3,219,774,222 48.78

Income before interest

expenses and income tax 3,459,641,522 49.33 3,411,638,381 50.66 3,380,852,382 51.22

Interest expenses 1,243,361,179 17.73 1,239,746,197 18.41 1,325,593,781 20.08

Corporate income tax 673,073,244 9.60 683,593,732 10.15 207,913,583 3.15

Income before minority interest 1,543,207,099 22.01 1,488,298,452 22.10 1,847,345,018 27.99

Net loss in minority interest - - - - 68,539,868 1.04

Net income for the year 1,543,207,099 22.01 1,488,298,452 22.10 1,915,884,886 29.03


(Unit: Baht)


2006 2005 2004

Cash flows from

operating activities:-

Net income for the year 1,543,207,099 1,488,298,452 1,915,884,886

Adjustments to reconcile net income to net

cash provided by (paid from) operating

activities:-

Minority interest in loss in a subsidiary

company - - (68,539,868)

Gain on sale of investment in a subsidiary

company - - (27,144,000)

Gain on sale of investment (10,222,677) - -

Depreciation and amortisation 2,148,534,011 2,065,326,429 2,015,183,066

Provision for withholding tax dedueted

at source - - 21,052,859

Gain on sale of equipment (2,257,032) (393,986) (2,028,125)

Provision for compensation for site

acquisition 421,220,000 359,800,000 305,940,000

Loss on impairment of investment 13,282,309 - -

Income from operating activities before changes

in operating assets and liabilities 4,113,763,710 3,913,030,895 4,160,348,818

Decrease (increase) in operating assets

Other current assets (1,721,475) 5,434,886 26,424,136

Other non-current assets 173,458 (57,034) 31,628

Increase (decrease) in operating liabilities

Trade accounts payable 3,403,519 525,274 6,113,100

Value added tax payable 358,845 194,754 (1,685,153)

Other payables 5,026,237 (7,152,245) (34,386,192)

Other current liabilities (13,891,861) 230,763,106 104,961,131

Cash paid for compensation for

site acquisition (500,000,000) (300,000,000) (100,000,000)

Net cash flows from operating activities 3,607,112,433 3,842,739,636 4,161,807,468

Statements of Cash Flows



(Unit: Baht)

2006 2005 2004

Cash flows from investing activities:-

Decrease (increase) in current investments (249,264,173) 589,606,081 (264,463,640)

Cash received from sale of investment in

a subsidiary company - - 36,000,000

Cash received from sale of long-term

investments 320,222,678 - -

Increase in other long-term investments (1,266,054,853) (935,331,506) (275,121,315)

Purchase of equipment (27,285,236) (13,211,454) (37,744,534)

Cash received from sale of equipment 5,337,527 864,100 4,513,338

Construction in progress - - (22,109,138)

Additional construction of Second StageExpressway and Bang Pa-in - Pak Kret

Expressway (9,282,571) (89,467,540) (22,843,003)

Increase in intangible assets (2,010,331) (1,010,990) (1,307,500)

Net cash flows used in investing activities (1,228,336,959) (448,551,309) (583,075,792)

Cash flows from financing activities:-

Increase (decrease) in bank overdraft (6,749,483) 2,806,062 2,368,205

Cash payment for long-term loans (2,580,000,000) (2,193,000,000) (2,579,000,000)

Cash received from long-term loans 1,000,000,000 - 1,000,000,000

Dividend paid (770,000,000) (1,155,000,000) (1,925,000,000)

Net cash flow used in financing activities (2,356,749,483) (3,345,193,938) (3,501,631,795)

Net increase in cash and cash equivalents 22,025,991 48,994,389 77,099,881

Cash and cash equivalents at beginning of year 214,207,371 165,212,982 88,113,101

Cash and cash equivalents at end of year 236,233,362 214,207,371 165,212,982

Statements of Cash Flows (Continued)


12.2 Financial Ratios of Consolidated Financial Statements

Bangkok Expressway Public Company Limited and the SubsidiarySignificant Financial Ratios

Unit 2006 2005 2004

LIQUIDITY RATIO1. Liquidity Ratio Times 0.18 0.10 0.35

2. Quick Ratio Times 0.18 0.09 0.34

3. Cash Flow Ratio Times 1.18 1.41 1.83

4. Accounts Payable Turnover Times N.A. N.A. N.A.

5. Average Debt Servicing Period Day N.A. N.A. N.A.

PROFITABILITY RATIO6. Gross Margin Ratio % 69.52 69.69 69.66

7. Cash to Profitability Ratio % 233.74 258.20 217.23

8. Net Profit Ratio % 22.01 22.20 29.13

9. Return on Equity % 10.14 10.15 13.20

EFFICIENCY RATIO10.Return on Assets % 3.34 3.15 3.93

11.Return on Fixed Assets % 8.52 7.86 8.35

12.Assets Turnover Times 0.15 0.14 0.13

FINANCIAL POLICY RATIO13.Debt to Equity Ratio Times 1.95 2.14 2.32

14.Interest Coverage Ratio Times 4.44 4.65 4.30

15.Obligation Serviceability Ratio Times 1.07 0.88 1.08

Per Share DATA16.Book Value per Share Baht 20.17 19.37 18.94

17.Net Earnings per Share Baht 2.00 1.93 2.49

18.Dividend per Share Baht N.A. 1.00 2.00


Remark: 1) Items 1 - 3:Toll revenue is received daily in cash

while the loan would be repaid on a monthly basis

out of the net cash receipts, there fore, the liquidity

ratio would not affect the Companyûs debt

serviceability.

2) Items 4 - 5: Most of accounts payable of the

Company and the Subsidiary were incurred by the

costs of repair and maintenance and the operation

costs while the costs of goods sold represented

the amortisation of the right to operate the complete

Expressway sectors. Therefore, it is not possible to

calculate the accounts payable turnover and the

average debt servicing period which contain

analytical connotation.

3) Payment of dividends in the year 2006 is at the

discretion of the Ordinary General Meeting of

Shareholders in April 2007. However, the Company

made payment of interim dividends at the rate of

Baht 0.50 per share in September 2006.

12.3 Description and Analysis of Financial Status

and Operational Results

1. Operational Results

The operational results in the year 2006 of the

Company and the Subsidiary showed the net earnings

from operations in the amount of Baht 1,543 Million,

as compared to the net earnings of Baht 1,488

Million in the previous year, representing an increase

by Baht 55 Million or 3.70 percent. Such increase

was due to an increase in the toll revenue resulting

from continuous growth of the volume of vehicles

using the Expressways, together with the opening

of Suvarnabhumi Airport which increased in the

number of motorists using the Expressway heading

for the Airport throughout the day. Moreover, in the

year 2006, the Company earned additional income

from dividend received from investment in Thai

Tap Water Supply Public Company Limited and

gain on sale of investment in Bangkok Metro Public

Company Limited.

Summary of Significant Operational Results

(Unit: Million Baht)

2006 2005 Changes

Amount %

Toll revenue 6,944 6,715 229 3.41

Total revenue 7,012 6,734 278 4.13

EBITDA 5,608 5,477 131 2.40

Net earnings 1,543 1,488 55 3.70

Net earnings per

share (Baht) 2.00 1.93 0.07 3.70

1.1 Revenue

In the year 2006, the Company and the Subsidiary

had total revenue in the amount of Baht 7,012 Million,

representing an increase by Baht 278 Million or 4.13

percent from that of the previous year, with material

particulars as follows:

(1) In respect of toll revenue, even though the economic

slow down due to the fluctuation of the oil price

and the political issues during the previous year,

such factor slightly affected the toll revenue of

the Company and the Subsidiary. The toll revenue

in this year amounted to Baht 6,944 Million,

representing an increase by Baht 229 Million or

3.41 percent, as compared to Baht 6,715 Million

in the previous year, as per the details divided

into routes as follows:


of the flyover crossing Prachachuen Road and

addition of toll booths, including the fact that

motorists used this route as shortcut to Vibhavadi

- Rangsit Road. In respect of Sector A and

Sector B of the Si Rat Expressway as part of

the urban network, the revenue growth rate

slightly increased.

- Udon Ratthaya Expressway: Toll revenue continued

to grow with an increase by 6.55 percent, as

compared to the previous year, due to the

expansion of such communities around Bang

Phun area and more motorists using the

Expressway to avoid traffic congestion from the

construction of the flyover on Chaeng Wattana

Road around Muang Thong Thani area.

(2) Other income amounted to Baht 68 Million, representing

an increase by Baht 49 Million or 72.06 percent from

that of the previous year, whereby the major item

was dividend received from Thai Tap Water Supply

Public Company Limited in the amount of Baht 25

Million and gain on sale of investment in Bangkok

Metro Public Company Limited in the amount of

Baht 10 Million.


2006 2005 Changes

Amount %

Chalern Mahanakorn Expressway 2,800 2,752 48 1.74

Si Rat Expressway

Sector A (Rama IX -

Ratchadapisek) 1,336 1,326 10 0.75

Sector B (Phayathai - Bang Khlo) 650 645 5 0.78

Sector C (Ratchadapisek

Chaeng Wattana) 660 624 36 5.77

Sector D (Rama IX - Srinagarindra) 929 834 95 11.39

Total Si Rat Expressway 3,575 3,429 146 4.26

Udon Ratthaya Expressway 569 534 35 6.55

Total 6,944 6,715 22 3.41

- Chalerm Mahanakorn Expressway: Toll revenue

represented growth by 1.74 percent in September

of the previous year due to the opening for

service of Industrial Ring Road, thereby causing

decrease in the volume of vehicles at Suksawat

Toll Plaza and Sathu Pradit Toll Plaza while the

number of motorists using other toll plazas continued

to increase. As a result, in 2006, total revenue

continued to grow, as compared to the overall

in the previous year.

- Si Rat Expressway: Based on overview, toll revenue

continued to grow, particularly, in the outbound

Expressway to which the Company was entitled

to all revenue. Sector D of the Si Rat Expressway

had a revenue growth rate representing 11.39

percent, resulting from the increased volume of

vehicles heading for Suvarnabhumi Airport since

its opening in late September 2006, together

with the expansion of urban communities adjacent

to Suvarnabhumi Airport. Sector C of the Si Rat

Expressway had a revenue growth rate representing

5.77 percent, as compared to the previous year.

This was because of improvement and enhancement

of efficiency in provision of service, by construction


1.2 Expenses


incurred expenses in the total amount of Baht 3,553

Million, representing an increase by Baht 231 Million

or 6.95 percent from that of the previous year, with

material particulars as follows:

(1) The amortization of rights to operate the complete

Expressway sectors amounted to Baht 2,116 Million,

representing an increase by Baht 81 Million or

3.98 percent, due to the increased volume of

vehicles using the Expressways.

(2) The provision for compensation for site acquisition

cost amounted to Baht 421 Million, representing

an increase by Baht 61 Million or 16.94 percent.

Such provision was recorded to cut the cost of the

present value of the compensation to be paid to

the Expressway and Rapid Transit Authority of

Thailand, while the actual payment of the first

installment under the Agreement was made in the

year 2004. As for this year, such payment was

made in the amount of Baht 500 Million.

(3) The operating and administrative expenses amounted

to Baht 1,003 Million, representing an increase by

Baht 76 Million or 8.20 percent, mainly comprising

expenses for toll collection and traffic management

as well as costs of repair and maintenance of the

Expressways.

(4) Loss from devaluation of investment in the

Subsidiary amounted to Baht 13 Million. Given

the continued loss on the Subsidiaryûs operational

results, the Company thus estimated devaluation

of such investment.

1.3 Interest Expenses


incurred interest expenses equal to Baht 1,243 Million,

representing an increase by Baht 3 Million or 0.24

percent from that of the previous year. The Company

paid interest and repaid the loans on a monthly basis

with cost of borrowing at the fixed rate of 4 percent

per annum which was increased to 5 percent per annum

since October 2006. During the year 2006, the Company

made an additional loan drawdown in the amount of

Baht 1,000 Million.

1.4 Corporate Income Tax

In the year 2006, the corporate income tax of the

Company amounted to Baht 673 Million, representing

a decrease by Baht 11 Million or 1.61 percent.

2. Financial Status

2.1 Assets

The total assets of the Company and the Subsidiary

as at 31 December 2006 amounted to Baht 45,739

Million, with the details of significant increases and

decreases as compared to those as at the previous

year end as follows:

2.1.1 Cash and cash equivalents as well as short-term

investments amounted to Baht 548 Million,

representing an increase by Baht 271 Million

or 97.84 percent. The Company deposited

the cash with banks and made short-term

investments with good rate of return.


2.1.2 Other long-term investments amounted to Baht

3,026 Million, representing an increase by Baht

796 Million or 35.70 percent, comprising:

- Investment in Bangkok Metro Public Company

Limited (BMCL), which is the company obtaining

concession from the Mass Rapid Transit

Authority of Thailand, as at 31 December

2006 amounted to Baht 1,610.53 Million,

whereby in September, the Company, as an

existing shareholder of BMCL, sold 250 million

ordinary shares held in BMCL as per its

shareholding ratio to the general public, to

enable BMCL to be qualified in accordance

with the rules of the Stock Exchange of

Thailand. In this regard, the Company

generated profit amounting to Baht 10 Million

from such sale of shares. In addition, after

the Stock Exchange of Thailand had

considered accepting ordinary shares of

BMCL to be listed on the Stock Exchange

of Thailand, the Companyûs Board of Directors

passed a resolution approving a repurchase

of such shares in the amount and at the

price not exceeding the previous sale. As at

the end of the year 2006, the Company held

shares representing 11.93 percent of the

registered capital in BMCL.

- Investment in SouthEast Asia Energy Limited

(SEAN), which is the company obtaining

concession from the Lao PDR Government

for construction and operation of Nam Ngum

2-Hydroelectric Power Project, as at 31

December 2006 amounted to Baht 162.50

Million. During the year, SEAN called for

additional payment for shares and increased

its registered capital from Baht 400 Million

to Baht 4,000 Million, whereby the Company

exercised the right to purchase additional

shares as per its existing shareholding ratio,

i.e., representing 12.50 percent, constituting

an additional investment of Baht 140.63

Million in the year 2006. At present, SEAN

is currently carrying out construction in

progress beyond schedule.

- Investment in Thai Tap Water Supply Public

Company Limited (TTW), which is the company

operating the business of production and

distribution of tap water to the Provincial

Waterworks Authority, as at 31 December

2006 amounted to Baht 1,252.78 Million. In

this year, the Company made an additional

investment in the amount of Baht 832.28

Million, thereby resulting in the Companyûs

shareholding ratio in TTW representing 12.50

percent of the registered capital. In the

year 2006, the Company received dividend

of Baht 24.88 Million from its investment in

TTW.

2.1.3 Right to operate the completed Expressway

sectors decreased by Baht 2,107 Million, due

to amortization as expenses in the income

statement based on the volume of vehicles

using the Expressways.

2.2 Liabilities

The total liabilities of the Company and the

Subsidiary as at 31 December 2006 amounted to

Baht 30,212 Million, representing a decrease by

Baht 1,657 Million or 5.20 percent from that as at

the previous year end, with the details of significant

increases and decreases, as compared to those as

at the previous year end, as follows:


2.2.1 Provision for compensation for site acquisition

cost had a net decrease by Baht 79 Million,

due to decrease in provision for compensation

from actual payment in the amount of Baht

500 Million and setting up additional provision

during the year in the amount of Baht 421

Million.

2.2.2 Long-term loans had a net decrease by Baht

1,580 Million, due to the repayment of loans

in the ordinary course under the agreement in

the amount of Baht 2,580 Million and

additional loan drawdown in the amount of

Baht 1,000 Million.

2.3 Shareholdersû Equity

The total shareholdersû equity of the Company and

the Subsidiary as at 31 December 2006 amounted

to Baht 15,527 Million, representing an increase by

Baht 612 Million or 4.11 percent from that as at the

previous year end, with the details of significant

increases and decreases, as compared to those as

at the previous year end, as follows:

2.3.1 Increase in net earnings from operations for

the year 2006 amounted to Baht 1,543 Million.

2.3.2 Decrease due to the Companyûs dividend of

Baht 770 Million, divided into dividend payment

in the amount of Baht 385 Million or Baht

0.50 per share for the operational results of

the last six months of the year 2005 on 4 May

2006 in accordance with the resolution passed

by the 2006 Annual Ordinary General Meeting

of Shareholders, and interim dividend payment

in the amount of Baht 385 Million or Baht

0.50 per share for the operational results of

the first six months of the year 2006 on 6

October 2006 in accordance with the resolution

passed by the Companyûs Board of Directors

Meeting No. 3/2006.

2.3.3 Decrease due to adjustment of value of

investment in BMCL in compliance with market

price in the amount of Baht 161 Million.

The Companyûs registered capital amounts to Baht

8,000 Million, with the authorized and paid-up capital

of Baht 7,700 Million, the premium on ordinary shares

of Baht 4,848 Million, the appropriated retained earnings

of Baht 473 Million, and the unappropriated retained

earnings of Baht 2,666 Million.

3. Cash Flow


had cash flow from operating activities in the amount

of Baht 3,607 Million, whereby the Company used such

cash in investing activities in the amount of Baht 1,228

Million, mainly in Thai Tap Water Supply Public Company

Limited in the amount of Baht 832 Million, SouthEast

Asia Energy Limited in the amount of Baht 141 Million,

and Bangkok Metro Public Company Limited in the amount

of Baht 293 Million. In addition, cash received from

sale of investment in Bangkok Metro Public Company

Limited amounted to Baht 320 Million. In respect of

financing activities, the Company used such cash in

the total amount of Baht 2,357 Million for repayment

of long-term loans in the net amount of Baht 1,580 Million,

dividend payment in the amount of Baht 770 Million.

In the year 2006, the Company had increased cash

in the net amount of Baht 22 Million, when combined

with cash brought forward in the amount of Baht 214

Million, the cash balance as at the end of December

2006 amounted to Baht 236 Million.


4. Financial Ratios

2006 2005

Net Profit Margin 22.01% 22.20%

Return on Equity 10.14% 10.15%

Return on Assets 3.34% 3.15%

Interest Coverage (times) 4.44 4.65

Debt to Equity (times) 1.95 2.14

12.4 Remuneration of Auditor

In the year 2006, the Company engaged Ernst & Young

Office Limited as the Companyûs auditor in accordance

with the resolution of the 2006 Annual Ordinary General

Meeting of Shareholders, which was held on 5 April

2006. The remuneration to be received by the auditor

from the Company and the Subsidiary are as follows:

(1) Auditing remuneration

Bangkok Expressway

Public Company Limited Baht 750,000

Northern Bangkok

Expressway Company

Limited Baht 240,000

Total Baht 990,000


Other Related Information

Reference

Securities Registrar : Thailand Securities Depository Company Limited62 The Stock Exchange of Thailand Building4th and 7th Floors, Ratchadapisek RoadKhlong Toei SubdistrictKhlong Toei District, Bangkok 10110Telephone 0-2229-2800 Fax 0-2359-1262-3Capital Market Academy Building2/7 Moo 4 (Northpark Project) Vibhavadirangsit RoadTungsonghong Subdistrict, Laksi District, Bangkok 10210Telphone 0-2596-9000 Fax 0-2832-4994-6

Auditor : Ernst & Young Office Limited33rd Floor, Lake Rajada Office Complex193/136-137 New Ratchadapisek RoadBangkok 10110Telephone 0- 2264-0777 / 0-2661-9190Fax 0-2264-0789-90 / 0-2661-9192

Legal Consultant : The Legists Ltd.990 Abdulrahim Place, 9th FloorRama IV Road, Silom SubdistrictBangrak District, Bangkok 10500Telephone 0-2636-1111Fax 0-2636-0000

Financial Advisor : Advisory Plus Company Limited10th Floor, Thanapoom Tower,1550 New Petchburi Road,Makasan, Ratthewi, Bangkok 10400Telephone 0-2652-7858-64Fax 0-2652-7867

Regular Financial Institution Contact

Krung Thai Bank Public Company Limited, Bangkok Bank Public Company Limited, Siam Commercial BankPublic Company Limited, TMB Bank Public Company Limited and Siam City Bank Public Company Limited extendedcredit facilities to the Company as at 31 December 2006 in the total amount of Baht 28,383,017,600 while theCompany had total deposits as at 31 December 2006 in the total amount of Baht 110,824,877.


Report on Responsibilities of the Board of Directorstowards the Financial Report

The Companyûs Board of Directors realizes the significance of its duties and responsibilities in supervising theCompanyûs business to ensure good management in accordance with laws, detailed objectives and the CompanyûsArticles of Association, as well as resolutions of the shareholders meetings with integrity and prudence. The Boardof Directors protects the benefits of the Company, shareholders and general investors by ensuring that theCompanyûs financial report contains accurate and full accounting records that reflect the Companyûs actual financialstatus and operational results.

The Companyûs Board of Directors establishes the Audit Committee comprising independent directors fullyqualified in accordance with the requirements of the Stock Exchange of Thailand to review and ensure accuracy andsufficiency of the financial report, including accurate and complete disclosure of connected transactions or transactionswith possible conflict of interest, in compliance with the requirements of the Stock Exchange of Thailand andrelevant rules and regulations. In this regard, the Audit Committee has already reported their performance to theCompanyûs Board of Directors.

The Companyûs Board of Directors is of the opinion that the financial statements for the year 2006 of theCompany and the Subsidiary, which have been reviewed by the Audit Committee in conjunction with the management,and audited by the Companyûs auditor, reflect accurate financial status and operational results as appropriate inmaterial aspects in accordance with generally accepted accounting standards.

(Dr. Virabongsa Ramangkura) (Mrs. Payao Marittanaporn)

Chairman of the Board of Directors Managing Director


Information of Company Executives(As at 31 December 2006)

Name-Surname / Position Age Education / Training Share- Family Work Experience for the Past 5 Years(Years) holding Relationship Time Position OrganizationRatio Among

(%) Executives

1.Dr. Virabongsa Ramangkura 63 - Doctor of Law (Honorary) - - Oct. 2006 - present - Member of the National The National Legislative AssemblyChairman of the Board Webster University St. Louis, Legislative Assemblyof Directors, USA Feb. 2006 - present - Chairman of the Board SouthEast Asia Energy LimitedChairman of the Nomination - Ph.D. (Economics) of DirectorsCommittee, University of Pennsylvania, USA Apr. 2006 - present - Director IRPC Public Company LimitedChairman of the - M.A. (Economics) 2005 - present - Chairman of the Board Export-Import Bank of ThailandRemuneration Committee University of Pennsylvania, USA of Directorsand Authorized Signatory - B.A. Political Science - Chairman of the Board Finansa Public Company LimitedDirector (First Class Honors) of Directors

Chulalongkorn University - Director Bangkok Airways Co., Ltd.- Director Certification Program - Advisor, Board of Wang Kanai Group(DCP 43/2004) Directors and ChairmanThai Institute of Directors of the Executive BoardAssociation 2004 - present - Audit Committee Polyplex (Thailand) Public Company

Member Limited- President Thai-Lao Association

Ministry of Foreign Affairs1995 - present - Chairman of the Advance Agro Public Company

Executive Board Limited

2.Prof. Suphachai 66 - Honorary Ph.D. (Accounting) - - Feb. 2006 - present - Chairman of the Sena Saithong Company LimitedPhisitvanich Thammasat University Board of DirectorsDirector, - Certificate, National Defence 2005 - present - Chairman of the CPPC Public Company LimitedChairman of the Audit College (Class 32) Audit CommitteeCommittee, - M.B.A. (Finance) - Chairman of the Audit Business Development BankNomination Committee Ohio State University, USA Committee (Shanghai-China)Member and Remuneration - B.A. (Accounting) 2004 - present - Chairman of the Board Merit Land Company LimitedCommittee Member Thammasat University of Directors

- B.A. (Commerce) - Chairman of the Board Samart I-Mobile Public CompanyThammasat University of Directors Limited

- Director Certification Program - Appellate Committee Office of the Securities and(DCP 38/2003) Member Exchange Commission (SEC)Thai Institute of Directors 2003 - present - Chairman of the Board Matching Studio Public CompanyAssociation of Directors and Limited

Chairman of the AuditCommittee

2004 - Sept. 2006 - Police Commission The Royal Thai PoliceMember

2001 - 2003 - Chairman of the Board Krung Thai Bank Public Companyof Directors Limited

3 General Sampao Choosri 65 - Chulachomklao Royal Military - - 2001 - present - Chairman of the Dhospaak Company Limited-Director and Audit Academy Executive BoardCommittee Member - Royal Military Academy 2000 - present - Chairman of the Thai Agro Exchange Company

(Saint Cyr), France Executive Board Limited- Directors Accreditation Program 2000 - 2001 - Supreme Commander Ministry of Defence(DAP)Thai Institute of DirectorsAssociation

4 Prof. Dr. Kanok 54 - Ph.D. (Political Science) 0.0013 - Present - Chairman of the Board Bangkok MetropolitanWongtrangan The Johns Hopkins University, Advisors to Bangkok AdministrationDirector and Audit USA GovernorCommittee Member - M.A. (Political Science), 2004 - Oct. 2006 - Chairman of the Board The Krungthep Thanakom Co., Ltd.

University of California, USA of Directors- B.S. (Medical Science) 2003 - Sept. 2006 - Chief Executive Officer Siam FamilyMart Company LimitedChulalongkorn University 1997 - 2003 - Chief Executive Officer Robinson Department Store

- Director Certification Program for Operation and Public Company Limited(DCP 50/2004) Managing DirectorThai Institute of DirectorsAssociation


5.Mr. Plew Trivisvavet 61 - M.Sc. (Electrical Engineering) - - 1998 - present -Chairman of the Board of Bangkok Metro Public CompanyDirector, Chairman of the Osaka University, Japan Directors and Chairman LimitedExecutive Board, - B.Sc. (Electrical Engineering) of the Executive BoardNomination Committee Osaka University, Japan 1994 - present -Chairman of the CH. Karnchang Public CompanyMember, - Director Certification Program Executive Board and LimitedRemuneration Committee (DCP 50/2004) Chief Executive OfficerMember and Authorized Thai Institute of Directors May 2004 - present -Director SouthEast Asia Energy LimitedSignatory Director Association Jul. 2006 - present -Director Thai Tap Water Supply Public

Company Limited

6.Mr. Supong Chayutsahakij 65 - Honorary Ph.D. - - Nov. 2006 - present -Director and Audit Siam Steel International PublicDirector, Vice Chairman of (Management Science) Committee Member Company Limitedthe Executive Board and Phranakhon Rajabhat University 2004 - present -Chairman of the Board BMCL Network LimitedAuthorized Signatory - Master of Management of DirectorsDirector Sasin Graduate Institute of -Chairman of the Board Metro Mall Development Ltd.

Business Administration of Directors of Chulalongkorn University -Chairman of the Board Triads Networks Co., Ltd.- Master of Engineering (Electrical) of DirectorsUniversity of Tokyo, Japan 2002 - present -Director Bangkok Metro Public Company

- Bachelor of Engineering Limited(Electrical) 1994 - 2003 -Managing Director Bangkok Expressway PublicUniversity of Tokyo, Japan Company Limited

- Director Certification Program 1968 - 1994 -Deputy Director of Teijin Polyester (Thailand) Limited(DCP 8/2001) AdministrationThai Institute of Directors DepartmentAssociation

7.M.L. Prasobchai 51 - M.S. (Civil Engineering) - - Present -Chief of the Office of Ministry of DefenceKasemsant Stanford University, USA Inspector GeneralDirector, Executive Director - M.S. (Operations Research) 2005 - 2006 -Chief of Staff Officer to Office of Supreme Commanderand Authorized Signatory Stanford University, USA the Chief of Joint Staff Ministry of DefenceDirector - B.S. (Civil Engineering , 2004 - 2005 -Staff Officer to the Ministry of Defence

Mathematics) Virginia Military Minister of DefenceInstitute, Virginia, USA 2001 - 2004 -Deputy Commanding The Royal Thai Army

- Director Certification Program General Intelligence(DCP 33/2003) SchoolThai Institute of Directors 2003 - 2005 -Director SouthEast Asia Energy LimitedAssociation 1999 - 2003 -Director Bangkok Metro Public Company

Limited1995 - 2001 -Director, Directorate of Intelligence,

Foreign Liaison Division The Royal Thai Army

8.Mr. Panit Dunnvatanachit 50 - M.B.A. (Finance) 0.0035 - 2000 - present -Assistant General Bangkok Bank Public CompanyDirector and Executive Washington University, St. Louis, Manager LimitedDirector USA -Director and Member of CBNP (Thailand) Limited

- Bachelor of Arts & Science the Executive CommitteeWashington University, St. Louis, 2002 - Jan. 2006 -Director and Member of Advance Agro Public CompanyUSA the Executive Committee Limited

- Director Certification Program 1998 - 2005 -Director and Member of Asia Credit Public Company(DCP 10/2001) the Executive Committee LimitedThai Institute of Directors 1999 - 2005 -Director Asia Credit Securities CompanyAssociation 2000 - 2004 -Chairman of the Asia Credit Public Company

Executive Board Limited


(%) Executives



(%) Executives

9.Mr. Akadej Bijaphala(1) 60 - M.B.A. (Marketing) - - Jul. 2003 - -Advisor to President TMB Bank Public CompanyDirector and Executive The National Institute of 30 Dec. 2006 LimitedDirector Development Administration 1997 - 2003 -Senior Deputy General é

- Bachelor of Engineering Manager(Electrical) ChulalongkornUniversity

- Advance Management Program,Harvard University, USA

- Director Certification Program(DCP 56/2005)Thai Institute of DirectorsAssociation

10. Miss Arisara 49 - M.B.A 0.000038 - 2005 - present -Assistant Managing Krung Thai Bank Public CompanyDharamadhaj Roosevelt University, USA Director LimitedDirector and Executive - Bachelor of Economics 2000 - 2005 -Department Director éDirector University of the Thai Chamber and Project Financing

of Commerce Analysis Department- Director Certification Program Manager(DCP 75/2006)Thai Institute of DirectorsAssociation

11. Mr. Sutas Sutanchainont 58 - M.S.C.E. 0.0005 - Jan. 2005 - present -Deputy Governor for The Expressway and Rapid Director University of Houston, USA Administration Transit Authority of Thailand

- Bachelor of Engineering (Civil) 2001 - 2005 -Director of Maintenance éChulalongkorn University Department

- Directors Accreditation Program 1993 - 2001 -Director of Expressway é(DAP) ProjectThai Institute of DirectorsAssociation

12. Mr. Suvich 60 - Bachelor of Engineering - - Apr. 2003 - present -Managing Director Bangkok Expressway Public Pungchareon(2) (Electrical) Company Limited

Director, Tohoku University, Japan 1996 - 2003 -Managing Director Northern Bangkok Expressway Executive Director, - Mini MBA Program, Company Limited Managing Director - Birkley University, USA and Authorized - Director Certification Program Signatory Director (DCP 37/2003)

Thai Institute of DirectorsAssociation

13. Mrs. Payao 49 - M.B.A. - - 20 Dec. 2004 - -Managing Director Northern Bangkok Expressway Marittanaporn(3) Chulalongkorn University present Company Limited Deputy Managing Director - Higher Diploma in Auditing Apr. 2003 - present -Deputy Managing Bangkok Expressway Public

Thammasat University Director Company Limited- Bachelor of Accountancy 1997 - 2003 -Assistant Managing éChulalongkorn University Director,

- Director Certification Program Administration Line(DCP 48/2004)Thai Institute of DirectorsAssociation

Remark (1) Resigned with effect as of 31 December 2006.

(2) Retired on 31 December 2006.

(3) Held the positions of Director, Executive Board Member, Managing Director and Authorized Signatory Director

of the Company in replacement of Mr. Suvich Pungchareon since 1 January 2007.


14. Mr. Sanguan Kunatinun 46 - M.B.A. - - 2006 - present -Assistant Managing Bangkok Expressway Public Deputy Managing Director Thammasat University Director and Acting Company Limited and Acting General - Bachelor of Engineering General Manager

Manager of Project Chulalongkorn University of Project Division Division 2003 - 2006 -General Manager of é

Project Division2002 -Deputy General é

Manager of ProjectDivision

2001 -Deputy General Manager éof BusinessDevelopment Division

15. Mrs. Sudruthai Prommart 43 - M.B.A. (Financial Accounting) - - 2003 - present -General Manager of Bangkok Expressway Public General Manager of Northrop University, Inglewood, Traffic Control Division Company Limited Traffic Control Division California, USA 2002 -Deputy General Manager

- Bachelor of Business of Operation 2 DivisionAdministration 1997 - 2001 -Deputy General Manager éAssumption University of Operation Division

16. Mrs. Ngamnit 51 - M.B.A. - - 2003 - present -General Manager of Bangkok Expressway Public Kanokgarnjanar National Institute of Development Administration Division Company Limited General Manager of Administration 1998 - 2002 -Deputy General Manager Administration Division - B.A. (Economics) of Administration Division

Thammasat University

17. Mr. Phaisan Lertsalaluck 43 - Master's Degree in Energy - - 2004 - present -General Manager of Bangkok Expressway PublicGeneral Manager of Technology Maintenance Division Company Limited

Maintenance Division King Mongkut's University of Sept. 2003 - 2003 -Deputy General Manager éTechnology Thonburi of Maintenance Division

- Bachelor of Engineering, 2000 - 2003 -Manager of Engineering Triple Horse Limited PartnershipKing Mongkut's Institute of DepartmentTechnology Thonburi

18. Mr. Phakpoom 40 - M.B.A. - - 2005 - present -General Manager of Bangkok Expressway Public Thaweewittayarut Thammasat University Managing Director Company Limited General Manager of - Bachelor of Laws Office Managing Director Office Chulalongkorn University Jan. - Mar. 2005 -Deputy General Manager é

- Bachelor of Accountancy of Managing DirectorChulalongkorn University Office

- Certified Public Accountant (CPA) 2002 - 2004 -Deputy General Manager é- Certified Internal Auditor (CIA) of Internal Audit Office

Apr. 1999 - 2001 -Senior Manager of é Internal Audit Office

19. Miss Vasana 45 - Master of Business Administration - - 2006 - present -General Manager of Bangkok Expressway Public Wattananukulchai The National Institute of Toll Revenue Division Company Limited General Manager of Development Administration 2003 - 2005 -Deputy General Manager é Toll Revenue Division - Bachelor of Accountancy of Toll Revenue Division

Bangkok University 1998 - 2002 -Senior Manager of é

Finance OperationDepartment

20. Miss Panan 39 - Master of Accountancy - - 2006 - present -General Manager of Bangkok Expressway Public Tosuwanthaworn Thammasat University Finance Division Company Limited General Manager - Bachelor of Accountancy Jan. 2004 - 2005 -Deputy General Manager é of Finance Division Thammasat University of Finance Division

2001 - 2003 -Senior Manager of éAccounting Department

2000 - 2001 -Manager of Accounting éDepartment

21. Mrs. Wattana 43 - M.B.A. - - 2005 - present -Deputy General Manager Bangkok Expressway Public Sittiwaitayaporn Thammasat University of Internal Audit Office Company Limited. Duputy General Manager - Bachelor of Accountancy 2004 -Toll Revenue Division é

of Internal Audit Office Thammasat University 2003 -Senior Manager of Toll éCollection Department

2001 -Senior Manager of éProcurement Department


(%) Executives


Executives Holding Positions in the Subsidiary and Ralated Company

Name of Directors Company Subsidiary Related CompanyBangkok Metro Thai Tap Water SouthEast AsiaPublic Company Supply Public Energy Limited

Limited Company Limited

1. Dr. Virabongsa Ramangkura X - - - X

2. Mr. Plew Trivisvavet /, // X, // X, // X /2. Mr. Supong Chayutsahakij /, // /, // /, // - -3. M.L. Prasobchai Kasemsant /, // /, // - - -

4. Mr. Panit Dunnvatanachit /, // /, // - - -5 Miss Arisara Dharamadhaj /, // / - - -6. Mr. Akadej Bijaphala(3) /, // / - - -7. Mr. Sutas Sutanchainont / / - - -8. Mr. Suvich Pungchareon /, // / - /, // -

Remark1. / = Director; X = Chairman of the Board of Directors; // = Executive Director2. Related company shall refer to the definition of a legal entity of parties who may have conflict of interest as per the notification of the Office of the Securities and Exchange Commission and Stock Exchange of Thailand.

3. Mr. Akadej Bijaphala resigned as director of the Company and the Subsidiary, effective as of 31 December 2006.

Information of Directors in the Subsidiary

Name of Directors Northern Bangkok Expressway Company Limited

1. Mr. Plew Trivisvavet X, //

2. Mr. Supong Chayutsahakij /, //3. M.L. Prasobchai Kasemsant /, //4. Mr. Panit Dunnvatanachit /, //5. Miss Arisara Dharamadhaj /6. Mr. Akadej Bijaphala /7. Mr. Sutas Sutanchainont /8. Mr. Suvich Pungchareon /9. Mrs. Payao Marittanaporn /, //

Remark1. / = Director; X = Chairman of the Board of Directors; // = Executive Director2. Subsidiary shall refer to material subsidiary, namely, having revenue exceeding 10 percent of total revenue as per

the consolidated income statement of the most recent accounting year.3. Mr. Akadej Bijaphala resigned as director of the Company and the Subsidiary, effective as of 31 December 2006.


To The Board of Directors and Shareholders ofBangkok Expressway Public Company Limited

I have audited the accompanying consolidatedbalance sheets of Bangkok Expressway Public CompanyLimited and its subsidiary as at 31 December 2006 and2005, and the related consolidated statements ofincome, changes in shareholdersû equity and cash flowsfor the years then ended, and the separate financialstatements of Bangkok Expressway Public CompanyLimited for the same years. These financial statementsare the responsibility of the management of theCompany and its subsidiary as to their correctness andthe completeness of the presentation. My responsibilityis to express an opinion on these financial statementsbased on my audits.

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards requirethat I plan and perform the audits to obtain reasonableassurance about whether the financial statements arefree of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement presentation. Ibelieve that my audits provide a reasonable basis for myopinion.

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financialposition of Bangkok Expressway Public CompanyLimited and its subsidiary and of Bangkok ExpresswayPublic Company Limited as at 31 December 2006 and2005, the results of their operations and cash flows forthe years then ended, in accordance with generallyaccepted accounting principles.

Without qualifying my opinion on the aforementionedfinancial statements, I draw attention to Note 1.2 to thefinancial statements. The subsidiary company hasconsistently suffered from operation losses over a numberof years, and as at 31 December 2006 has a deficit ofBaht 4,337 million (2005: Baht 4,054 million), and theCompany has substantial loans to this subsidiary companyas described in Note 7 to the financial statements. Theseconditions indicate the existance of a material uncertaintywhich could give rise to doubt as to the ability of thesubsidiary to continue as a going concern and couldhave an impact on the operations of the Company.

Sophon PermsirivallopCertified Public Accountant (Thailand) No. 3182Ernst & Young Office LimitedBangkok: 27 February 2007

Report of Independent Auditor


BANGKOK EXPRESSWAY PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANYAS AT 31 DECEMBER 2006 AND 2005

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

Note 2006 2005 2006 2005

ASSETS

Current assets

Cash and cash equivalents 7 236,233,362 214,207,371 226,237,826 205,833,672

Current investments 6 312,515,124 63,250,951 312,393,687 57,182,402

Amounts due from

subsidiary company 7 - - 2,140,000 1,605,000

Other current assets

Advance payments under

service contract 7 6,528,944 1,381,613 6,528,944 -

Prepaid expenses 3,760,287 6,294,167 3,162,619 4,804,186

Withholding tax deducted at source 541,730 18,050 - -

Others 6,076,566 7,510,272 5,745,054 7,147,031

Total current assets 565,656,013 292,662,424 556,208,130 276,572,291

Non-current assets

Investment in subsidiary company

accounted for under equity method 8 - - - 146,123,362

Long-term loans to and interest receivable from subsidiary company 7 - - 11,016,496,436 11,217,496,436

Other long-term investments, net 7, 9 3,025,817,347 2,230,452,821 3,025,817,347 2,230,452,821

Property, plant and equipment, net 10 249,247,973 257,134,417 247,273,876 254,635,088

Rights to operate completed expressway

sectors, net 11 41,877,901,172 43,984,810,790 30,850,426,248 32,627,753,223

Intangible assets, net 12 3,890,788 2,131,093 3,890,788 2,131,093

Other non-current assets

Deposits 16,088,123 16,098,078 12,895,580 11,905,580

Others 382,074 527,527 363,011 526,469

Total non-current assets 45,173,327,477 46,491,154,726 45,157,163,286 46,491,024,072

TOTAL ASSETS 45,738,983,490 46,783,817,150 45,713,371,416 46,767,596,363

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

BALANCE SHEETS



(Unit: Baht)

BALANCE SHEETS (Continued)


Note 2006 2005 2006 2005

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilitiesBank overdraft - 6,749,483 - 6,677,739Trade accounts payable 7 30,871,546 27,468,027 27,901,109 20,825,620Current portion of long-term loans 7, 13 2,646,720,000 2,580,000,000 2,646,720,000 2,580,000,000Other current liabilities

Corporate income tax payable 298,642,184 307,600,462 298,642,184 307,600,462Value added tax payable 36,993,095 36,634,250 34,416,840 34,422,442Other payables 8,529,974 3,503,737 6,803,893 2,428,346Retention guarantees 7 19,130,331 24,396,258 17,677,362 24,101,592Others 7 52,237,563 38,622,908 35,351,231 32,698,137

Total current liabilities 3,093,124,693 3,024,975,125 3,067,512,619 3,008,754,338Non-current liabilities

Provision for compensation for site acquisition cost 22.1 1,382,090,000 1,460,870,000 1,382,090,000 1,460,870,000Long-term loans, net of current portion 7, 13 25,736,297,600 27,383,017,600 25,736,297,600 27,383,017,600

Total non-current liabilities 27,118,387,600 28,843,887,600 27,118,387,600 28,843,887,600Total liabilities 30,211,512,293 31,868,862,725 30,185,900,219 31,852,641,938Shareholders' equity

Share capitalRegistered

800,000,000 ordinary shares of Baht 10 each 8,000,000,000 8,000,000,000 8,000,000,000 8,000,000,000

Issued and paid-up770,000,000 ordinary shares of Baht 10 each 7,700,000,000 7,700,000,000 7,700,000,000 7,700,000,000

Premium on ordinary shares 4,848,492,969 4,848,492,969 4,848,492,969 4,848,492,969 Unrealised loss on changes in value

of investment (160,690,327) - (160,690,327) - Retained earnings

Appropriated - statutory reserve 14 473,087,511 395,927,156 473,087,511 395,927,156Unappropriated 2,666,581,044 1,970,534,300 2,666,581,044 1,970,534,300

Total shareholders' equity 15,527,471,197 14,914,954,425 15,527,471,197 14,914,954,425Total liabilities and shareholders' equity 45,738,983,490 46,783,817,150 45,713,371,416 46,767,596,363



(Unit: Baht)

BANGKOK EXPRESSWAY PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANYFOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005

INCOME STATEMENTS


Note 2006 2005 2006 2005

Revenues

Toll revenue 16 6,943,815,622 6,714,904,053 6,374,844,496 6,180,904,414

Other income

Interest income 16,472,439 8,987,076 393,247,152 323,636,525

Dividend income 7 24,880,000 - 24,880,000 -

Gain on sale of investment 9 10,222,677 - 10,222,677 -

Others 17,465,727 10,214,589 41,502,987 28,250,542

Total revenues 7,012,856,465 6,734,105,718 6,844,697,312 6,532,791,481

Expenses

Amortisation of rights to operate

completed expressway sectors 11 2,116,192,189 2,034,956,986 1,786,016,296 1,725,604,962

Provision for compensation for site

acquisition cost 22.1 421,220,000 359,800,000 421,220,000 359,800,000

Operating and administration expenses 1,002,520,445 927,710,351 881,696,137 820,396,591

Share of loss from investment

accounted for under equity method - - 282,841,048 215,351,546

Loss on impairment of investment 13,282,309 - 13,282,309 -

Total expenses 3,553,214,943 3,322,467,337 3,385,055,790 3,121,153,099

Income before interest expenses

and income tax 3,459,641,522 3,411,638,381 3,459,641,522 3,411,638,382

Interest expenses (1,243,361,179) (1,239,746,197) (1,243,361,179) (1,239,746,198)

Corporate income tax (673,073,244) (683,593,732) (673,073,244) (683,593,732)

Net income for the year 1,543,207,099 1,488,298,452 1,543,207,099 1,488,298,452

Basic earnings per share 18

Net income 2.00 1.93 2.00 1.93



(Unit: Baht)

CONSOLIDATED AND THE COMPANY ONLYUnrealised Retained earningsloss on

Issued and Premium on changes Appropriatedpaid-up ordinary in value of statutory Un-

share capital shares investment reserve appropriated Total

Balance - beginning

of year 2005 7,700,000,000 4,848,492,969 - 321,512,234 1,711,650,770 14,581,655,973

Dividend paid (Note 21) - - - - (1,155,000,000) (1,155,000,000)

Net income for the year 2005 - - - - 1,488,298,452 1,488,298,452

Statutory reserve (Note 14) - - - 74,414,922 (74,414,922) -

Balance - end of year 2005 7,700,000,000 4,848,492,969 - 395,927,156 1,970,534,300 14,914,954,425

Dividend paid (Note 21) - - - - (770,000,000) (770,000,000)

Net income for the year 2006 - - - - 1,543,207,099 1,543,207,099

Statutory reserve (Note 14) - - - 77,160,355 (77,160,355) -

Changes in value of investment - - (160,690,327) - - (160,690,327)

Balance - end of year 2006 7,700,000,000 4,848,492,969 (160,690,327) 473,087,511 2,666,581,044 15,527,471,197



STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY



(Unit: Baht)


2006 2005 2006 2005

Cash flows from operating activitiesNet income 1,543,207,099 1,488,298,452 1,543,207,099 1,488,298,452Adjustments to reconcile net income to net cash provided by (paid from)

operating activities:Gain on sale of investment (10,222,677) - (10,222,677) -Depreciation and amortisation 2,148,534,011 2,065,326,429 1,817,494,096 1,755,108,467Gain on sale of equipment (2,257,032) (393,986) (2,294,292) (429,939)Provision for compensation for

site acquisition 421,220,000 359,800,000 421,220,000 359,800,000Share of loss from investment

accounted for under equity method - - 282,841,048 215,351,546Loss on impairment of investment 13,282,309 - 13,282,309 -

Income from operating activitiesbefore changes in operating assetsand liabilities 4,113,763,710 3,913,030,895 4,065,527,583 3,818,128,526

Decrease (increase) in operating assets Amounts due from

subsidiary company - - (535,000) (535,000)Other current assets (1,721,475) 5,434,886 (3,485,400) 7,150,376Other non-current assets 173,458 (57,034) (826,542) (56,022)

Increase (decrease) in operating liabilities

Trade accounts payable 3,403,519 525,274 7,075,489 (5,350,280)Value added tax payable 358,845 194,754 (5,602) 1,154,983Other payables 5,026,237 (7,152,245) 4,375,547 (4,756,264)Corporate income tax payable (8,958,278) 220,974,442 (8,958,278) 220,974,442Other current liabilities (4,933,583) 9,788,664 (3,771,137) 8,246,163Cash paid for compensation for site acquisition (500,000,000) (300,000,000) (500,000,000) (300,000,000)

Net cash flows from operating activities 3,607,112,433 3,842,739,636 3,559,396,660 3,744,956,924


STATEMENTS OF CASH FLOWS



2006 2005 2006 2005

Cash flows from investing activitiesDecrease (increase) in current investments (249,264,173) 589,606,081 (255,211,285) 595,145,817Purchase of investment in subsidiary company - - (149,999,995) (449,999,985)Cash received from sale of investments 320,222,678 - 320,222,678 -Increase in other long-term investments (1,266,054,853) (935,331,506) (1,266,054,853) (935,331,506)Increase in interest receivable from subsidiary company - - (377,710,173) (314,944,211)Cash received from long-term loans to and interest receivable from subsidiary company - - 578,710,173 856,500,000Purchase of equipment (27,285,236) (13,211,454) (26,881,617) (12,602,154)Cash received from sale of equipment 5,337,527 864,100 5,309,957 842,231

Additional construction of Second Stage Expressway and Bang Pa-In - Pakkret

Expressway (9,282,571) (89,467,540) (8,689,321) (89,196,990)Increase in intangible assets (2,010,331) (1,010,990) (2,010,331) (1,010,990)

Net cash flows used in investing activities (1,228,336,959) (448,551,309) (1,182,314,767) (350,597,788)

Cash flows from financing activitiesIncrease in bank overdraft (6,749,483) 2,806,062 (6,677,739) 2,956,011

Cash payment for long-term loans (2,580,000,000) (2,193,000,000) (2,580,000,000) (2,193,000,000) Cash received from long-term loans 1,000,000,000 - 1,000,000,000 - Dividend paid (770,000,000) (1,155,000,000) (770,000,000) (1,155,000,000) Net cash flows used in financing

activities (2,356,749,483) (3,345,193,938) (2,356,677,739) (3,345,043,989)Net increase in cash and cash equivalents 22,025,991 48,994,389 20,404,154 49,315,147Cash and cash equivalents at beginning of year 214,207,371 165,212,982 205,833,672 156,518,525Cash and cash equivalents at end of year 236,233,362 214,207,371 226,237,826 205,833,672Supplemental cash flows information

Cash paid during the year for:Interest expenses 1,243,361,179 1,239,746,198 1,243,361,179 1,239,746,198Corporate income tax 682,573,251 462,637,341 682,031,522 462,619,291

Non-cash items consist of: -Transfer construction in progress to rights to operate completed expressway sectors - 22,109,138 - 22,109,138Unrealised loss on changes in value of investment 160,690,327 - 160,690,327 -


(Unit: Baht)

STATEMENTS OF CASH FLOWS (Continued)



1. GENERAL INFORMATION

1.1 Bangkok Expressway Public Company Limited(çThe Companyé) is a public company incorporatedand domiciled in Thailand. It is principally engagedin the construction and management of theSecond Stage Expressway System (SES) andother extensions, including other related business,under the SES agreement with the Expresswayand Rapid Transit Authority of Thailand (ETA),for a period of 30 years commencing on 1 March1990 and expiring on 28 February 2020. TheCompany has the right to extend the contractperiod for two further periods of 10 year eachupon such terms and conditions as may thenbe agreed by the parties. The SES consists ofSectors A, B, C and D.

The Companyûs registered address is 238/7Asoke-Dindaeng Road, Bangkapi, Huaykwang,Bangkok.

1.2 The subsidiary company has consistently facedoperating losses over a number of years and asat 31 December 2006 has a deficit of Baht4,337 million (2005: Baht 4,054 million). Althoughthese conditions raise substantial doubt aboutthe subsidiaryûs ability to continue as a goingconcern, the management is considering measuresto restructure the operations of the subsidiaryand believe that these will resolve the problemsbeing faced. For this reason, the financial statementsof the subsidiary company as incorporated in theaccompanying consolidated financial statementswere prepared on the going concern basis, andhence do not include any of the adjustmentsthat might result should the subsidiary companybe unable to continue as a going concern.

1.3 On 28 November 2006, the meeting of theCompanyûs Board of Directors passed a reso-

lution to appoint Mrs. PayaoMarittanaporn as directorand managing director to replace Mr. Suvich

Pungchareon, who has reached retirement age.The appointment is effective from 1 January

2007.

2. BASIS OF PREPARATION

The financial statements have been prepared in accordancewith accounting standards enunciated under theAccounting Profession Act B.E. 2547. The presentationof the financial statements has been made in compliancewith the stipulations of the Notification of the Departmentof Business Development dated 14 September 2001,issued under the Accounting Act B.E. 2543.

The financial statements have been prepared on ahistorical cost basis except where otherwise disclosedin the accounting policies.

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS



3. BASIS OF CONSOLIDATION

3.1 The consolidated financial statements includethe financial statements of the Company and its

subsidiary company, Northern Bangkok ExpresswayCompany Limited. The details are as follows: -

The financial statements of Northern BangkokExpressway Company Limited are included in theconsolidated financial statements since theCompany is able to exercise management controlover this company.

In August 2006, Northern Bangkok ExpresswayCompany Limited called up an additional 5% ofthe value of the 300 million shares held by theCompany (par value of Baht 10 each), a total ofBaht 150 million. The Company made payment ofthis share subscription on 22 August 2006. As aresult, the Companyûs proportion of investmentincreased from 33.33 percent to 35.63 percent.

3.2 Material balances and transactions between theCompany and the subsidiary company have beeneliminated from the consolidated financialstatements.

3.3 Investments in the subsidiary company as recordedin the Companyûs books of account are eliminatedagainst the equity of the subsidiary company.

4. ADOPTION OF NEW ACCOUNTING STANDARD

In October 2006, the Federation of AccountingProfessions issued Notification No. 26/2006 regardingAccounting Standard No. 44 çConsolidated FinancialStatementsand Accounting for Investments in Subsidiariesé (Amendment No. 1), under which investments in subsidiaries, jointly controlled entitiesand associates are to be presented in the separatefinancial statements under the cost method rather thanthe equity method. Entities which are not ready toadopt the cost method in 2006 can continue to usethe equity method through the end of 2006 and adoptthe cost method as from 1 January 2007.

In this regard, the Company has elected to adopt thechange in 2007. Adoption of the change in 2007 willnecessitate the restatement of the Companyûs 2006separate financial statements to be presented forcomparative purposes along with the financialstatements for 2007. The restatement will have nomaterial effect to the net income in the separateincome statement for 2006 and net worth in thebalance sheet at 31 December 2006.

(Unit: Percentage)

Assets as a Revenues as apercentage to the percentage to the

In- Proportion of consolidated consolidated totalcorporated investment total assets revenues for the

years endedCompanyûs name Nature of business country as at 31 December as at 31 December 31 December

2006 2005 2006 2005 2006 2005

Northern Bangkok Operation and Thailand 35.63 33.33 24 24 8 8Expressway management ofCompanyLimited Bang Pa-In -

Pakkret Expressway


The above change in accounting policy was approvedby the meeting of the Board of Directors on 27 February2007.

5. SIGNIFICANT ACCOUNTING POLICIES

5.1 Revenue and expense recognitionToll revenue represent the invoiced value, excluding

value added tax, of service rendered.

Interest income from a subsidiary company isrecognised as interest accrues based on the effectiverate method.

Dividends are recognised when the right to receivethe dividends is established.

Expenses are recognised on an accrual basis.

5.2 Cash and cash equivalentsCash and cash equivalents consist of cash in

hand, cash at banks, and all highly liquid investmentswith an original maturity of three months or lessand not subject to withdrawal restrictions.

5.3 Investmentsa) Investments in securities held for trading are stated

at fair value. Gains or losses arising from changesin the carrying amounts of securities are includedin determining income.

b) Investments in available-for-sale securities arestated at fair value. Changes in the carryingamounts of securities are recorded as separateitems in shareholdersû equity until the securitiesare sold, when the changes are then includedin determining income.

c) Investments in debt securities, both due withinone year and expected to be held to maturity,are recorded at amortised cost. The premium/discount on debt securities is amortised by theeffective rate method with the amortised amountpresented as an adjustment to the interestincome.

d) Investment in non-marketable equity securities,which the Company classifies as other investments,are stated at cost net of allowance for loss ondiminution in value (if any).

e) Investment in subsidiary company in the financialstatements of the Company is accounted forunder the equity method.

The fair value of marketable securities is basedon the latest bid price of the last working day yearas quoted on the Stock Exchange of Thailand.The fair value of debt instruments is determinedbased on the required rate of return or the yield ratesquoted by the Thai Bond Market Association. Thefair value of unit trusts is determined from their netasset value.

The weighted average method is used for computationof the cost of investments.

5.4 Property, plant and equipment anddepreciationLand is stated at cost. Building and equipment

are stated at cost less accumulated depreciationand allowance for loss on impairment (if any).


Depreciation of the building and equipment is calculated by reference to their costs on the straight-linebasis over the following estimated useful lives: -

Building and construction improvement 5 yearsFurniture and fixture 5 yearsTools, instruments and equipment 3 and 5 yearsVehicles 5 and 10 yearsDepreciation is included in determining income.

No depreciation has been provided for land.

5.5 Amortisation of rights to operate completedexpressway sectors

The rights to operate completed expressway sectorsare amortised as expenses in income statements withthe number of actual vehicle volume. The amortisation

of rights to operate completed expressway sectorsis calculated as follows: -

Annual amortisation = Net rights to operate completed expressway sectors X

Percentage of the number of vehicle volume for the year

Percentage of the number of vehicle volume for the year = Current yearûs number of actual vehicle volume

(Current yearûs number of actual vehicle volume +

Projected vehicle volume after current year to the

remaining years of the agreement)

Net rights to operate completed expressway sectors = Total actual cost of rights to operate completed

expressway sectors - Accumulated amortisation

5.6 Intangible assets and amortisationIntangible assets are stated at cost less accumulated

amortisation. Amortisation of intangible assets iscalculated by reference to their costs on a straight-linebasis over estimated useful lives of 10 years.

The amortisation is included in determining income.

5.7 Related party transactionsRelated parties comprise enterprises and individuals

that control, or are controlled by, the Company,whether directly or indirectly, or which are undercommon control with the Company.

They also include associated companies andindividuals which directly or indirectly own a votinginterest in the Company that gives them significantinfluence over the Company, key managementpersonnel, directors and officers with authority inthe planning and direction of the Companyûs operations.


6. CURRENT INVESTMENTS

(Unit: Baht)

Consolidated The Company Only

2006 2005 2006 2005

Cost Fair value Cost Fair value Cost Fair value Cost Fair value

Unit trusts 62,919,596 63,020,562 23,252,736 23,265,170 62,798,392 62,899,125 17,184,258 17,196,621

Debt securities due

within one year 248,926,661 249,494,562 39,921,797 39,985,781 248,926,661 249,494,562 39,921,797 39,985,781

311,846,257 312,515,124 63,174,533 63,250,951 311,725,053 312,393,687 57,106,055 57,182,402

5.8 Impairment of assetsThe Company and its subsidiary assess at each

reporting date whether there is an indication thatan asset may be impaired. If any such indicationexists, the Company and its subsidiary makes anestimate of the assetûs recoverable amount. Wherethe carrying amount of the asset exceeds its recoverableamount, the asset is considered impaired and iswritten down to its recoverable amount. Impairmentlosses are recognised in the income statement.An assetûs recoverable amount is the higher of fairvalue less costs to sell and value in use.

5.9 Employee benefitsSalary, wages, bonuses and contributions to the

social security fund and provident fund arerecognised as expenses when incurred.

5.10 ProvisionsProvisions are recognised when the Company

has a present obligation as a result of a past event,it is probable that an outflow of resources embodyingeconomic benefits will be required to settle theobligation, and a reliable estimate can be made ofthe amount of the obligation. Where the Companyexpects some or all of a provision to be reimbursed,the reimbursement is recognised as a separateasset but only when the reimbursement is virtuallycertain. The expense relating to any provision ispresented in the income statement net of anyreimbursement. If the effect of the time value ofmoney is material, provisions are discounted usinga current pre-tax rate that reflects, where appropriate,the risks specific to the liability.

The Company has recorded its provision forcompensation for the cost of site acquisition to bepaid to the Expressway and Rapid Transit Authorityof Thailand as expenses in each year throughoutthe period of the contract.

5.11 Periodic maintenanceAll annual maintenance costs are charged

directly to the income statement in the year onwhich they are incurred. The independentspecialists have stated that if annual repairs arecarried out in accordance with the specifiedstandard, there will be no requirement for majormaintenance. As a result, no further amounts areset aside as provision for maintenance.

5.12 Income taxThe income tax is provided for in the accounts

based on the taxable profits determined in accordancewith tax legislation.

5.13 Use of accounting estimatesPreparation of financial statement in conformity

with generally accepted accounting principlesrequires management to make estimates andassumptions in certain circumstances, affectingamounts reported in the financial statements andrelated notes. Actual results could differ from theseestimates.


7. RELATED PARTY TRANSACTIONS

During the years, the Company and its subsidiaryhad significant business transactions with relatedparties, which have been concluded on commercial

terms and bases agreed upon in the ordinary courseof business between the Company and those companies.Below is a summary of those transactions.

(Unit: Thousand Baht)

Consolidated The Company Only Pricing policy

2006 2005 2006 2005

Transactions with subsidiary companyPayment for additional share subscriptionNorthern Bangkok Expressway Company Limited - - 150,000 450,000 300,000,000 shares of Baht

0.50 each (2005: 300,000,000shares of Baht 1.50 each)

Cash receipt from repayment of long-term loansNorthern Bangkok Expressway Company Limited - - 201,000 450,000

Interest receipt on long-term loansNorthern Bangkok Expressway Company Limited - - 377,710 314,944 At the rates of 2.5% to 5% per

annum (2005: 0.6875% to 4%per annum)

Management incomeNorthern Bangkok Expressway Company Limited - - 24,000 18,000 Baht 2,000,000 per month

(2005: Baht 1,500,000 permonth)

Rental expensesNorthern Bangkok Expressway Company Limited - - 420 350 Baht 35,000 per month

Transactions with related companiesDividend incomeThai Tap Water Supply Public Company Limited 24,880 - 24,880 - 1,450,000 shares of Baht 3.15

each and 406,250,000 sharesof Baht 0.05 each



Consolidated The Company Only Pricing policy

2006 2005 2006 2005

Other income

SouthEast Asia Energy Limited 4,539 - 4,539 - Cost plus margin

High Crete Products and

Technology Company Limited 302 102 302 102 Cost plus margin

Total 4,841 102 4,841 102

Cost incurred under construction

contracts for Second Stage Expressway

CH. Karnchang Public Company Limited - 64,953 - 64,953 Stated in the agreement

CH. Karnchang-Tokyu

Construction Company Limited - 4,391 - 4,391 Stated in the agreement

Total - 69,344 - 69,344

Second Stage Expressway maintenance Stated in the agreement and

expenses compared to the

CH. Karnchang Public Company Limited 31,327 94,547 14,773 82,943 amounts as estimated by

Rental expenses independent consultant

CH. Karnchang Public Company Limited 120 120 - - Baht 10,000 per month

Financial fee 7,126 6,000 4,626 3,000 Baht 2,500,000 to Baht 3,000,000

per annum, 0.25% of additional

credit facilities and 0.375% of

credit facilities which have not

yet been drawn down (2005: Baht

3,000,000 per annum)

Interest payment on long-term loans 749,232 746,857 749,232 746,857 At the rate of 4% and 5% per

annum

Additional payment for shares

Bangkok Metro Public Company Limited - 52,157 - 52,157 17,385,502 shares of Baht 3 each

SouthEast Asia Energy Limited 140,625 21,875 140,625 21,875 48,750,000 shares of Baht 2.50

each and 3,750,000 shares of Baht

5 each (2005: 3,750,000 shares

of Baht 2.50

each and 1,250,000 shares of

Baht 10 each)

Thai Tap Water Supply Public 832,284 420,500 832,284 420,500 123,850 shares of Baht 290 each

Company Limited 1,676,150 shares of Baht 320 each

and 81,250,000 shares of Baht

3.20 each (2005: 1,450,000 shares

of Baht 290 each)

Total 972,909 494,532 972,909 494,532


The balances of the accounts as at 31 December 2006 and 2005 between the Company and those related

companies are as follows:

(Unit: Baht)Consolidated The Company Only

Relationship 2006 2005 2006 2005

Cash and cash equivalentsKrungthai Bank Public Company

Limited* *The Companyûs 24,415,121 24,091,412 22,462,563 21,040,197Bangkok Bank Public Company director has 2,446 5,778 2,446 2,432

Limited* authority in bankTotal 24,417,567 24,097,190 22,465,009 21,042,629

Amounts due from subsidiary companyNorthern Bangkok Expressway Company Limited Subsidiary - - 2,140,000 1,605,000

Advance payment under service contract CH. Karnchang Public Company Limited Common directors 6,528,944 1,381,613 6,528,944 -

Long-term loans to and interest receivable from subsidiary companyNorthern Bangkok Expressway Company Limited Subsidiary - - 11,016,496,436 11,217,496,436

Other long-term investments, netBangkok Metro Public Company Limited Common directors 1,610,532,847 1,788,077,821 1,610,532,847 1,788,077,821SouthEast Asia Energy Limited Common directors 162,500,000 21,875,000 162,500,000 21,875,000Thai Tap Water Supply Public Management Company Limited relationship 1,252,784,500 420,500,000 1,252,784,500 420,500,000

Total 3,025,817,347 2,230,452,821 3,025,817,347 2,230,452,821Accounts payable and other current liabilitiesCH. Karnchang Public Company Limited Common directors 8,337,570 6,948,465 6,389,303 1,379,662Krungthai Bank Public Company *The Companyûs 194,900 5,308,871 - 2,075,000 Limited* director has

authority in bankTotal 8,523,470 12,257,336 6,389,303 3,454,662

Retention guaranteesCH. Karnchang Public Company Limited Common directors 14,985,739 20,576,302 13,577,820 20,301,686CH. Karnchang-Tokyu Construction Company Limited Common directors 297,513 506,291 297,513 506,291High Crete Products and Technology Company Limited Common directors 78,343 - 78,343 -Total 15,361,595 21,082,593 13,953,676 20,807,977

Long-term loans and current portion of long-term loansKrungthai Bank Public Company Limited* *The Companyûs 9,790,260,789 10,335,682,602 9,790,260,789 10,335,682,602Bangkok Bank Public Company director has 7,202,133,231 7,603,284,670 7,202,133,231 7,603,284,670 Limited* authority in bankTotal 16,992,394,020 17,938,967,272 16,992,394,020 17,938,967,272


Directors and managementûs remuneration

In 2006, the Company and its subsidiary paid salaries,meeting allowances and gratuities to their directors andmanagement totaling Baht 21 million (The Company only:Baht 19 million) (2005: Baht 23 million, the Companyonly: Baht 22 million).

Long-term loans and current portion of long-term loans (only principal) are summarised below.


Consolidated and

the Company Only Interest rate

Long-term loans and current portion of long-term loans

Balance as at 31 December 2005 17,938,967 4% and 5% per annum

Add: Additional borrowing during the year 598,700 MLR-1.5% per annum

Less: Payment during the year (1,545,273)

Balance as at 31 December 2006 16,992,394 4%, 5% and MLR-1.5%

per annum

During 2006, movements of long-term loans to and interest receivable from subsidiary company were as follow: -


The Company Only

31 Increase Decrease 31 Interest rate

December during during December

2005 the year the year 2006 2006 2005

Long-term loans 9,285,503 - (166,382) 9,119,121 2.5% to 5% 0.6875% to 4%

Interest receivable 1,931,993 377,710 (412,328) 1,897,375 per annum per annum

Long-term loans to and

interest receivable from

subsidiary company 11,217,496 377,710 (578,710) 11,016,496


The Company t reats Nor thern BangkokExpressway Company Limited as a subsidiarycompany since the Company has authority inrelation to the setting of the subsidiary companyûsfinancial and operational policies.

In August 2006, Northern Bangkok ExpresswayCompany Limited called up an additional 5% ofthe value of the 300 million shares held by theCompany (par value of Baht 10 each), a total ofBaht 150 million. The Company made payment ofthis share subscription on 22 August 2006. As aresult, the Companyûs proportion of investmentincreased from 33.33 percent to 35.63 percent.

The assets of the subsidiary company such asdeposits at banks, current investments, rights inthe Bang Pa-In - Pakkret Expressway System andrights in toll revenues and beneficiary rights underinsurance policies are secured against such loansfrom the Company. However, the subsidiary company is able to make withdrawals from deposit atbanks and trading of current investments for useas regular operating expenses.

8. INVESTMENT IN SUBSIDIARY COMPANY ACCOUNTED FOR UNDER EQUITY METHOD

These represent investments in the ordinary shares and preference shares of Northern Bangkok Expressway

Company Limited.


As at 31 December

Carrying amounts

Registered Paid-up Proportion of Cost based on

Companyûs name capital capital investment equity method

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

(Percent) (Percent)

Northern Bangkok

Expressway

Company Limited 6,000 6,000 4,350 4,200 35.63 33.33 1,550 1,400 - 146


Bangkok Metro Public Company Limited

In December 2005, Bangkok Metro Public CompanyLimited issued its 296,689,300 ordinary shares witha par value of Baht 1 each to its directors, managementand employees, and registered the increase in its paidup share capital to Baht 7,646.7 million with the Ministryof Commerce on 11 January 2006. As a result, theCompanyûs shareholdings in that company decreasedfrom 19.65 percent to 18.89 percent.

On 21 June 2006, a meeting of the Companyûs Boardof Directors approved the sale of 250 million ordinaryshares of Bangkok Metro Public Company Limited tothe public at the price fixed by that company for itsInitial Public Offering (çIPOé).

In September 2006, the Stock Exchange of Thailand(çSETé) approved a listing of the ordinary share ofBangkok Metro Public Company Limited. This companylaunched an IPO of 2,756.4 million ordinary shares,consisting of 1,315.8 million new ordinary shares and1,440.6 existing ordinary shares at Baht 1.31 per share.The Company sold 250 million ordinary shares atBaht 1.31 per share, a total of Baht 327.5 million. Asa result, there was a gain on the sale of the investmentof Baht 10.2 million and this was recorded as otherincome in the income statement. The shareholding ofthe Company in such company has decreased from18.89 percent to 13.32 percent. Following the listing

9. OTHER LONG-TERM INVESTMENTS


Companyûs name Nature In- Registered capital Paid-up capital Shareholding Cost Fair value

of corporated percentage

business country

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

(Percent) (Percent)

Investment in marketable

equity securities

Bangkok Metro Public

Company Limited MRT Thailand 11,950 11,950 11,950 7,350 11.93 19.65 1,771 1,788 1,610 1,788

concession

Unrealised loss on

changes in value

of investment (161) -

1,610 1,788

Other investments

SouthEast Asia Manufacture Thailand 4,000 400 1,300 175 12.50 12.50 163 22

Energy Limited and

distribution

of electricity

Thai Tap Water Supply Manufacture Thailand 3,990 3,000 3,250 3,000 12.50 4.83 1,253 420

Public Company Limited and

(Formerly distribution

known as çThai Tap of treated

Water Supply Company water

Limitedé)

Other long-term 1,416 442

investments, net 3,026 2,230


of the shares of Bangkok Metro Public Company Limited,a 3-year silent period was imposed on the 1,194,092,607shares held by the Company as from the initial tradingdate of the shares on the SET, although the Companymay gradually allocate the shares for sale beginningone year after the initial trading date.

In addition, Bangkok Metro Public Company Limitedissued 2,987.5 million ordinary shares with a parvalue of Baht 1 each to Mass Rapid Transit Authorityof Thailand (MRTA). As a result, the Companyûsshareholdings in that company decreased from 13.32percent to 9.99 percent.

Subsequently, the Company purchased 231.2 millionordinary shares in Bangkok Metro Public CompanyLimited on the Stock Exchange of Thailand for atotal of Baht 293.1 million. As a result, the Companyûsshareholdings in this company has increased from9.99 percent to 11.93 percent.

The 220 million ordinary shares of Bangkok MetroPublic Company Limited which were purchased froman existing shareholder have been pledged to secureof long-term loans of such company.

SouthEast Asia Energy Limited

On 3 November 2005, the Company entered intothe shareholders agreement with other shareholders ofSouthEast Asia Energy Limited. The significant contents ofthe shareholders agreement were as follows:

1) Each shareholder agreed to subscribe toadditional shares in proportion to its existingshareholding if SouthEast Asia Energy Limitedincreases its registered share capital from Baht400 million to Baht 9,400 million.

2) Each shareholder agreed not to sell, assign, transfer,pledge or in anyway dispose of or put underencumbrance any shares of that company, exceptwi th the pr ior wr i t ten consent of othershareholders.

3) Each shareholder agreed not to sell its shares ofSouthEast Asia Energy Limited, whether directlyor indirectly, unless and until that company is listedon the Stock Exchange of Thailand.

In January 2006, SouthEast Asia Energy Limited calledup an additional 25 percent of the value of the 3,750,000shares held by the Company which were not fully paid(par value of Baht 10 each), a total of Baht 9.4 million.The Company made payment of this share subscriptionin February 2006. Subsequently, in April 2006, SouthEastAsia Energy Limited called up an additional 50 percentof the value of the shares held by the Company, a totalof Baht 18.8 million. The Company made payment inApril 2006.

On 26 May 2006, the Company entered into an EquityContribution Agreement with SouthEast Asia EnergyLimited and Nam Ngum 2 Power Company Limited(co-borrower), other shareholders and lenders ofSouthEast Asia Energy Limited. Under the agreement,the Company agrees to provide equity contributions tosuch company in proportion to its shareholding (12.5percent), or in total not more than Baht 494 million, in3 cases, as follows: -

1) Equity contribution for tax liabilities of not more thanBaht 156 million which may arise if such companyfails to obtain the application of the Lao-Thai DoubleTax Treaty.

2) Equity contribution for BOI Indemnification Amountof not more than Baht 244 million which may ariseif such company fails to obtain the BOI PromotionCertificate from the Board of Investment.

3) Equity Contribution for Revenue Deficiency fromConstruction of the Nam Ngum 3 Hydropower plantof not more than Baht 94 million if the Nam Ngum3 project is likely to negatively impact the energyproduction level of that companyûs system andsubsequently results in that companyûs becomingunable to comply with its obligations under theFinancing Documents.


In addition, the Company agrees to provide additionalequity contributions to that company of not exceededBaht 63 million if the co-borrower of that companydefaults in payment of its loan or unable to comply withits obligation under the Financing Documents.

In June 2006, SouthEast Asia Energy Limited increasedits share capital from Baht 400 million to Baht 4,000million through the issuance of additional 360 millionshares with a par value of Baht 10 each and called up25 percent of the value of the shares. The Company exercisedits right to purchase 45 million shares, in proportion toits existing shareholdings, for a total of Baht 112.5 million.The Company paid for the shares in June 2006.

In December 2006, SouthEast Asia Energy Limitedcalled up an additional 7.5 percent of the value of the45 million shares held by the Company which were notfully paid (par value of Baht 10 each), a total of Baht33.8 million. The Company made payment of this sharein January 2007.

In January 2007, SouthEast Asia Energy Limitedcalled up an additional 4.5 percent of the value of 45million share held by the Company which were not fullypaid (par value of Baht 10 each), a total of Baht 20.3million. The Company made payment of this share inFebruary 2007.

The 50 million ordinary shares of SouthEast Asia En-ergy Limited have been pledged to secure of long-termloansof such company.

Thai Tap Water Supply Public Company Limited(Formerly known as çThai Tap Water SupplyCompany Limitedé)

In February 2006, Thai Tap Water Supply CompanyLimited increased its share capital from Baht 3,000million to Baht 3,250 million through the issuance of anadditional 2.5 million shares (par value of Baht 100each) at a price of Baht 290 per share. The Companypurchased 123,850 shares for a total of Baht 35.9million, by exercising its right to purchase shares inproportion to its existing shareholdings and also itsright to purchase a portion of the shares which othershareholders elected not to subscribe. The Companypaid for the shares in February 2006.

On 5 April 2006, the Annual General Meeting of theCompanyûs shareholders approved the purchase of1,676,150 ordinary shares of Thai Tap Water SupplyCompany Limited from CH. Karnchang Public CompanyLimited, representing an additional 5.16 percent of theregistered and called up share capital of that company,at a price of Baht 320 per share, or a total of Baht536.4 million. The Company paid for the shares inJune 2006.

On 6 July 2006, Thai Tap Water Supply CompanyLimited registered the change of its status to be apubliccompany and changed the par value of theordinary shares from Baht 100 each to Baht 1 each, bysplitting each ordinary share with a par value of 100into 100 shares with a par value of Baht 1 each. Thisresulted in an increase in the number of shares heldby the Company to 325 million shares of Baht 1 each,with its percentage of shareholding maintained.

On 24 July 2006, the Company entered into anagreement to purchase an additional 81,250,000 sharesof Thai Tap Water Supply Public Company Limitedfrom CH. Karnchang Public Company Limited at aprice of Baht 3.20 per share, or a total of Baht 260million. This represented a further 2.5 percent of theregistered share capital of this company. The Companymade payment for the shares in July 2006.

On 26 September 2006, the Extraordinary GeneralMeeting of the shareholders of Thai Tap Water SupplyPublic Company Limited passed a resolution to increaseits registered share capital from Baht 3,250 million toBaht 3,990 million through the issuance of 740 millionnew ordinary shares with a par value of Baht 1 each,consisting of 40 million shares for allocation to itsdirectors, management and employees, and 700 millionshares for allocation to the public. Thai Tap WaterSupply Public Company Limited brought the aboveresolution to register its registered share capital toBaht 3,990 million with the Ministry of Commerce on24 October 2006. At present, Thai Tap Water SupplyPublic Company Limited has not yet allocated the aboveshares.


On 28 November 2006, the meeting of the CompanyûsBoard of Directors approved the sale of 37.5 millionordinary shares of Thai Tap Water Supply Public CompanyLimited to the public at the price fixed by that companyfor its Initial Public Offering (çIPOé) but not less thanits average cost of investment. In addition, the meetingapproved the Companyûs acceptance of the SETûs

imposition of a 3-year silent period on the shares asfrom the initial trading date on the SET, subject to theconsent of the financial institution lenders.

The Company has pledged its 325 million ordinaryshares of Thai Tap Water Supply Public CompanyLimited with group of lenders to secure long-term loans.

10. PROPERTY, PLANT AND EQUIPMENT

(Unit: Baht)

Consolidated

Building and Furniture Tools,

construction and instrument Motor

Land improvement fixture and equipment vehicles Total

Cost

31 December 2005 169,288,000 123,022,096 8,666,954 39,798,874 216,228,048 557,003,972

Acquisitions - 436,537 237,648 3,588,747 23,022,304 27,285,236

Disposals - - - (91,266) (13,379,302) (13,470,568)

31 December 2006 169,288,000 123,458,633 8,904,602 43,296,355 225,871,050 570,818,640

Accumulated

depreciation

31 December 2005 - 118,811,695 7,617,496 30,197,806 143,242,558 299,869,555

Depreciation

for the year - 901,063 381,695 3,469,291 27,339,137 32,091,186

Accumulated depre-

ciation for disposals - - - (72,573) (10,317,501) (10,390,074)

31 December 2006 - 119,712,758 7,999,191 33,594,524 160,264,194 321,570,667

Net book value

31 December 2005 169,288,000 4,210,401 1,049,458 9,601,068 72,985,490 257,134,417

31 December 2006 169,288,000 3,745,875 905,411 9,701,831 65,606,856 249,247,973

Depreciation for the year (included in operating and administration expenses)

2005 30,219,830

2006 32,091,186


As at 31 December 2006, the Company and its subsidiaryhave certain of plant and equipment which have beenfully depreciated but are still in use. The original cost,before deducting accumulated depreciation, of thoseassets amounted to Baht 212 million (2005: Baht 188million) and the Company only amounted to Baht 205million (2005: Baht 181 million).

The Company has mortgaged land with structuresthereon with a net book value as at 31 December 2006of Baht 169 million as collateral for credit facilities grantedby group of lenders.

(Unit: Baht)

The Company Only

Building and Furniture Tools,

construction and instrument Motor

Land improvement fixture and equipment vehicles Total

Cost

31 December 2005 169,288,000 122,986,946 7,691,829 36,422,466 206,175,248 542,564,489

Acquisitions - 436,537 237,648 3,588,747 22,618,685 26,881,617

Disposals - - - (91,266) (13,097,303) (13,188,569)

31 December 2006 169,288,000 123,423,483 7,929,477 39,919,947 215,696,630 556,257,537

Accumulated

depreciation

31 December 2005 - 118,776,547 6,642,633 26,898,941 135,611,280 287,929,401

Depreciation

for the year - 901,063 381,695 3,430,997 26,513,409 31,227,164

Accumulated depre-

ciation for disposals - - - (72,573) (10,100,331) (10,172,904)

31 December 2006 - 119,677,610 7,024,328 30,257,365 152,024,358 308,983,661

Net book value

31 December 2005 169,288,000 4,210,399 1,049,196 9,523,525 70,563,968 254,635,088

31 December 2006 169,288,000 3,745,873 905,149 9,662,582 63,672,272 247,273,876

Depreciation for the year (included in operating and administration expenses)

2005 29,353,892

2006 31,227,164


Rights to operate completed expressway sectors representthe cost of construction of the Second Stage Expresswayand Bang Pa-In - Pakkret Expressway. It is stated atcost less accumulated amortisation.

The Company has transferred its rights in the SecondStage Expressway to secure long-term loans.

11. RIGHTS TO OPERATE COMPLETED EXPRESSWAY SECTORS

(Unit: Baht)


Cost

31 December 2005 60,688,922,579 47,894,204,608

Increase during the year 9,282,571 8,689,321

31 December 2006 60,698,205,150 47,902,893,929

Accumulated amortisation of rights to

operate completed expressway sectors

31 December 2005 16,704,111,789 15,266,451,385

Amortisation for the year 2,116,192,189 1,786,016,296

31 December 2006 18,820,303,978 17,052,467,681

Net book value

31 December 2005 43,984,810,790 32,627,753,223

31 December 2006 41,877,901,172 30,850,426,248

Amortisation expenses included in

income statements for the year

2005 2,034,956,986 1,725,604,962

2006 2,116,192,189 1,786,016,296

12. INTANGIBLE ASSETS

(Unit: Baht))

Consolidated and the Company Only

2006 2005

Software 2,318,490 1,307,500

Additions 2,010,331 1,010,990

4,328,821 2,318,490

Less: Amortisations (438,033) (187,397)

Net 3,890,788 2,131,093

Amortisation expenses included in the

income statements for the year 250,636 149,612


13. LONG-TERM LOANS

(Unit: Baht)Balance as at

Credit Period of 31 December

(Million Baht) Objective Interest rate repayment 2006 2005

Tranche Gor 29,888.40 Refinance remaining 4.0% p.a. for first Within September 22,798,270,836 24,946,270,836long-term loans three years 2016(Drew down on 30 5.0% p.a. for nextSeptember 2003) two years

MLR - 2% from thesixth year onward

Tranche Khor 4,997.63 Lending to subsidiary 4.0% p.a. for first Within September 3,808,922,776 4,168,922,776company to repay its three years 2016long-term loans from 5.0% p.a. for nextcommercial banks two years(Drew down on 30 MLR - 2% from theSeptember 2003) sixth year onward

Tranche Kor 1,000.00 Working capital 2.50% p.a. for Within September 775,823,988 847,823,988(Drew down on first year 20164 March 2004) 3.25% p.a. for next

two years5.00% p.a. for thefourth and fifth yearMLR - 2.00% from thesixth year onward

Tranche Ngor 120.00 Working capital MOR of commercial Within September - -bank granting 2016

Tranche Jor* 530.00 Purchase of shares MLR - 1.5% for first To be repaid 530,000,000 -of Thai Tap Water two years monthly fromSupply Public MLR - 1.0% for next May 2007 toCompany Limited two years April 2012(Drew down on 19 MLR - 0.5% for theJune and 31 August fourth and fifth year2006) MLR from the sixth

year onwardTranche Shor 470.00 Payment for land MLR - 1.5% for first To be repaid 470,000,000 -

expropriation to ETA two years monthly fromunder the concession MLR - 1.0% for next May 2007 toagreement (Drew two years April 2012down on 19 June MLR - 0.5% for theand 31 August 2006) fourth and fifth year

MLR from the sixthyear onward

Total 37,006.03 28,383,017,600 29,963,017,600Less: Current portion for long-term loans (2,646,720,000) (2,580,000,000)Long-term loans, net 25,736,297,600 27,383,017,600

* The agreement stipulated conditions for mandatory prepayment if the Company sells all or some of the shares of Thai Tap WaterSupply Public Company Limited which were pledged under the credit facilities agreement, whereby the Company is to use all cashreceived from sales of shares to make prepayment of debt to the group of lenders.


Movements in the long-term loans account during theyear ended 31 December 2006 are summarised below.

Under the loan agreement, the Company must complywith normal financial covenants relating to various matters,such as the maintenance of debt service coverageratio, debt to equity ratio, shareholding proportion insubsidiary company, and dividend payment. In thisrespect, the Company has the total financial expensesof Baht 2.4 million per year which they must pay to theagents of the lenders (31 December 2005: Baht 2.4million).

As at 31 December 2006 and 2005, the long-termcredit facilities of the Company which have not yetbeen drawn down amounted to Baht 120 million.

The long-term loans are secured by assets of theCompany such as land and structure thereon, rightsunder the Second Stage Expressway Agreement, rightsin toll revenues, beneficiary rights under insurance policiesand pledge of a part of shares of Thai Tap WaterSupply Public Company Limited.

14. STATUTORY RESERVE

Pursuant to Section 116 of the Public CompanyLimited Act B.E. 2535, the Company is required to setaside to a statutory reserve at least 5 percent of its netincome, after deducting accumulated deficit broughtforward (if any), until the reserve reaches 10 percentof the registered share capital. The statutory reserve isnot available for dividend distribution.

The MLR used in calculation of interest on loans isthe average of the rates of the commercial bankswhich grant credit line to the Company.


Consolidated and the Company Only

Balance as at 1 January 2006 29,963,018Add: Additional borrowings during the year 1,000,000Less: Repayment during the year (2,580,000)Balance as at 31 December 2006 28,383,018

15. NUMBER OF EMPLOYEES AND RELATED COSTS


2006 2005 2006 2005

Number of employees at

end of year (persons) 630 625 630 625

Employment costs for the year

(Thousand Baht) 229,224 208,813 229,224 208,813


16. TOLL REVENUES

Under the Construction and Management of theSecond Stage Expressway System (SES) Contract,the Company and its subsidiary company and ETAagreed to share toll revenues receive from the First

Stage Expressway System (FES), the Second StageExpressway System (SES) and the Bang Pa-In - PakkretExpressway as follows: -

Effective from 2 September 2002, the ratio for thesharing of toll revenue from urban expressways (theFirst Stage Expressway System and Sectors A and Bof the Second Stage Expressway System) betweenthe Company and the Expressway and Rapid TransitAuthority of Thailand was changed from 60 : 40 to50 : 50 in accordance with the Second StageExpressway System agreement.

As further share of toll revenues (derived from theFES only) is due to the Company for the period fromthe Priority Component Opening Date, as defined by

the contract with ETA, up to 2 September 1993. However,no such amount has been included in the financialstatements because the determination of the PriorityComponent Opening Date and the applicable rates oftoll are matters of dispute between the Company andETA as discussed in Note 23.2. Until such dispute issettled, it is not possible to make a reasonable estimateof the portion of such toll revenues which will be paidover to the Company by ETA.

The Company ETA

% %

Urban Network (FES and SES Sectors A and B)

(a) First 9 years from the çPriority Component

Opening Dateé (PCOD)(already expired) 60 40

(b) Last 9 years ending 28 February 2020 40 60

(c) Period between (a) and (b) above

(Commencing on 2 September 2002) 50 50

Suburban Network (SES Sector C)

(a) The earlier of the PCOD to the completion

of SES Sector B or 19 October 1996 60 40

(b) Period after (a) above until end of contract

period 100 Nil

Suburban Network (SES Sector D)

From the construction completion date of relevant

Sections until end of contract period (21 April 2027) 100 Nil

The Bang Pa-In - Pakkret Expressway

From the construction completion date of relevant

Sections until end of contract period (26 September 2026) 100 Nil


17. PROMOTIONAL PRIVILEGES

The subsidiary company has received promotionalprivileges from the Board of Investment for the operationand construction of the Bang Pa-In - Pakkret Expressway,pursuant to the Certificate No. 1422/2540, issued on 7July 1997. Such privileges include exemption fromcorporate income tax on net income from the promotedactivities for the periods of eight years from the dateincome is first derived from the promoted activity. Thesubsidiary company is required to comply with theconditions and restrictions specified in the promotioncertificate.

The promotional privileges under the above certificateexpired in the current year.

18. EARNINGS PER SHARE

Basic earnings per share is calculated by dividingthe net income for the year by the weighted averagenumber of ordinary shares in issue during the year.

19. SEGMENT INFORMATION

The Companyûs and its subsidiaryûs operations involvea single industry segment, the construction and operationof expressways, and are carried on only in Thailand.As a result, all of the revenues, operating income andassets as reflected in these financial statements pertainto the aforementioned industry segment and geographicarea.

20. PROVIDENT FUND

The Company and its employees have jointlyestablished a provident fund in accordance with theProvident Fund Act B.E. 2530. Both employees andthe Company contributed to the Fund monthly, at therate of 5 percent of basic salary. The fund which ismanaged by TISCO Securities Company Limited, willbe paid to employees upon termination in accordancewith the fund rules. During the year 2006, the Companycontributed Baht 6.6 million (2005: Baht 6.4 million) tothe fund.

21. DIVIDENDS

Total Dividend

Dividends Approved by dividends per share Paid on

(Million Baht) (Baht)

Final dividends for 2004 Annual General Meeting of the 770 1.00 4 May 2005

shareholders of 7 April 2005

Interim dividends for 2005 Meeting of the Board of 385 0.50 22 September 2005

Directors on 25 August 2005

Total dividends for the

year 2005 1,155 1.50

Final dividends for 2005 Annual General Meeting of the 385 0.50 4 May 2006

shareholders on 5 April 2006

Interim dividends for 2006 Meeting of the Board of 385 0.50 6 October 2006

Directors on 7 September 2006

Total dividends for the

year 2006 770 1.00


22. COMMITMENTS

22.1The Company is committed to make paymentstotaling Baht 16,816 million to compensate theExpressway and Rapid Transit Authority ofThailand for site acquisition costs through aseries of payment commencing from year 2004to year 2019 as stipulated in the Second StageExpressway Agreement.

As at 31 December 2006, the Company has acommitment of compensation for site acquisitioncost of Baht 15,916 million (2005: Baht 16,416million) and already set up reserve for suchprovision amounting to Baht 1,382 million (2005:Baht 1,461 million).

22.2 As at 31 December 2006, the Company hascommitment in respect of uncalled portion ofinvestment in Northern Bangkok ExpresswayCompany Limited of Baht 1,650 million (2005:Baht 1,800 million).

22.3 As at 31 December 2006, the Company hascommitment in respect of uncalled portion ofinvestment in SouthEast Asia Energy Limited ofBaht 337.5 million (2005: Baht 28 million).However, in January 2007 and February, theCompany made payment for an additional sharesubscription of SouthEast Asia Energy Limitedof Baht 54.1 million (as detailed in Note 9).

22.4 As at 31 December 2006, the Company hascommitments of up to Baht 557 million in respectof its undertaking to provide equity contributionsto SouthEast Asia Energy Limited (as detailedin Note 9).

22.5 As at 31 December 2006, the Company and itssubsidiary have commitment amounting toapproximately Baht 37 million (2005: Baht 8million) payable in respect of improvement,repairment and inspection the agreement forthe Second Stage Expressway System and BangPa-In - Pakret Expressway with CH. KarnchangPublic Company Limited (the Company only:Baht 37 million, 2005: Nil).

23. THE DISPUTES WITH EXPRESSWAY AND RAPIDTRANSIT AUTHORITY OF THAILAND (ETA)

23.1 The Company had a dispute with ETA sincethe Ministry of Interior issued the Ministry ofInterior Notification dated 23 October 1998regarding revision of toll rates, by repealing theNotification dated 27 August 1998 whichincreased toll rates commencing 1 September1998. The Company disagreed with the Notificationdated 23 October 1998, and therefore, referredthe dispute to arbitration. The arbitral awarddetermined that the revision of toll rates pursuantto the Notification dated 23 October 1998 conformedto the Agreement. Consequently, ETA referredanother dispute to arbitration demandingreimbursement of Baht 34 million received bythe Company as toll revenue sharing pursuantto the Notification dated 27 August 1998. Thereafter,the Company filed its statement of defense statingthat the Company was entitled to receive suchBaht 34 million because such toll revenues werereceived by the Company while the Notificationdated 27 August 1998 was in effect. In addition,the Company filed a counterclaim requestingthe arbitral tribunal to issue an award rulingthat the Notification dated 27 August 1998 waslegitimate, and requiring ETA to compensatethe Company for damages in an amount equalto the difference of tolls collected under the twoNotifications. The arbitral tribunal issued anarbitral award on 3 December 2001, as follows:

1) The Notification dated 27 August 1998was issued in compliance with the procedureof the Agreement in all respects. The issuanceof the Notification dated 23 October 1998repealing and replacing the Notification dated27 August 1998 to apply new toll rates wasnot in compliance with the criteria andprocedure as specified in the Agreement,thereby having no binding effect upon theparties;


2) The Company was entitled to receivecompensation from ETA in the amount equalto the difference of the toll rates as actuallycollected in accordance with the Notificationdated 27 August 1998 and the Notificationdated 23 October 1998, from 24 October1998 onwards, whereby such compensationfor damage might be calculated from thedifference of the toll rates under the twoMinistry of Interior Notifications for eachcategory of vehicles on a daily basis, until15 July 2000, amounting to Baht 360,898,617plus interest under the Agreement, as wellas compensation for damage in an amountequal to the difference of the toll ratesunder the two Notifications, as calculatedfrom the actual volume and categories ofvehicles using the Expressways from 16 July2000 onwards, until the toll rates have beenrevised in accordance with the Agreement.

ETA issued a letter refusing to comply with thearbitral award, therefore, on 5 June 2002, theCompany filed a petition with the Civil Court ofSouthern Bangkok requesting issuance ofjudgment to enforce compliance with the arbitralaward. ETA objected that the filing of saidcase with the Civil Court of Southern Bangkokwas not legitimate since the Civil Court of SouthernBangkok did not have jurisdiction over suchcase. ETA was of the opinion that the SecondStage Expressway Agreement was anadministrative contract, all disputes relatingthereto must be lodged with the AdministrativeCourt. In this regard, ETA requested a stay ofproceedings and objected that the arbitrationproceedings and such arbitral award were notlegitimate and not in compliance with thearbitration agreement, as well as the calculationof compensation for damages was not legitimate.At the same time, on 26 July 2002, ETA filed aclaim with the Administrative Court as CaseBlack No. 1297/2545 requesting the Court torevoke the arbitral award on the grounds thatthe arbitration proceedings were not properlyconducted. On 2 January 2003, the Companyfiled its answer and challenged the Administrative

Courtûs jurisdiction. Having considered theCompanyûs motion on the jurisdiction, theAdministrative Court was of the view that theCivil Court should have jurisdiction over thecase and thus transferred the case to the CivilCourt. The Civil Court, having reviewed the case,ordered disposal of the case on the groundsthat it was not filed within the period requiredby law. ETA then filed an appeal against suchorder and the Company filed its answer to ETAûsappeal. At present, the case is pending theconsideration of the Supreme Court. As for thecase filed by the Company to enforce thecompliance with the arbitral award, the CivilCourt determined the disputed issue as towhether the arbitral award was legitimate andenforceable. The examination of witnesses forthe Company and ETA was completed on 20July 2004. On 28 December 2004, the CivilCourt of Southern Bangkok issued a judgmentconfirming the arbitral award, thereby requiringETA to compensate the difference between thelegitimate toll rates in accordance with theNotification dated 27 August 1998 and thoseunder the Notification dated 23 October 1998,whereby such compensation for damage mightbe calculated from the difference of the tollrates under the two Ministry of InteriorNotifications for each category of vehicles on adaily basis, until 15 July 2000, amounting toBath 360,898,617 plus interest under theAgreement, as well as to compensate fordamage in an amount equal to the differenceof the toll rates under the two Notifications,as calculated from the actual volume andcategories of vehicles using the Expresswaysform 16 July 2000 onwards, until the toll rateshave been revised in accordance with theAgreement.

ETA filed an appeal against the order of theCourt of First Instance and requested a stay ofexecution on 31 January 2005. The Companythen filed its answer to the appeal and thepetition objecting to the request for stay ofexecution on 28 March 2005. This case ispresently pending the consideration of theSupreme Court.


Given that this case was not yet final, the Companytherefore did not record such transaction in thefinancial statements.

23.2 The Company had a dispute with ETA regardingthe Priority Component Opening Date. The SecondStage Expressway Agreement (the çAgreementé)required ETA to deliver the site of the çPriorityComponenté as specified in the Agreement onor before 1 March 1990 to enable the Companyto proceed with the construction. After completionof the construction of such component, ETAhad to adjust the toll rates to be in accordancewith the Agreement, and such date shall bedeemed as the Priority Component Opening Date.The Company would then be entitled to receivethe toll revenue sharing of the whole Expresswaysystem from ETA in accordance with the ratioas agreed upon pursuant to the Agreement. Inpractice, ETA was unable to deliver suchcomponent in whole pursuant to the Agreement,only partial delivery of the site was made. On30 September 1990, ETA remained unable tocomplete the delivery of the remaining site ofthe çPriority Componenté to the Company inaccordance with the Agreement. Therefore, theCompany was of the view that under the provisionsof the Agreement, the Priority Component OpeningDate is the date on which the construction inrespect of the Priority Component was completed.The Company completed the construction ofthe Expressway on the Priority Componentdelivered by ETA by 1 March 1990, and theIndependent Certification Engineer certified suchcompletion on 13 November 1992. Therefore,the Company was entitled to receive the tollrevenue sharing of the whole Expressway systemcommencing from said date onwards, but ETAcommenced sharing the toll revenue on 2September 1993. The Company filed such disputeto arbitration requesting toll revenue sharing thatthe Company should have received from 13November 1992 to 1 September 1993, togetherwith interest.

ETA filed its statement of defense indicatingthat the arbitral tribunal had no power to considerand give its arbitral award in respect of thisdispute since ETA was of the opinion that suchdispute was related to an administrativecontract, therefore, such case was under thejurisdiction of the Administrative Court, andfurther objected that the Priority ComponentOpening Date was not the date as asserted bythe Company. Moreover, ETA argued that theCompany had no right to receive the tollrevenue sharing for such period from 2September 1993 to 29 June 1996, during whichETA did not yet open Sector B of the SecondStage Expressway for service. It was deemedthat the urban network did not exist during thatperiod, therefore, it was not possible to sharetoll revenue in accordance with the criteriaspecified in the Agreement. In this respect,ETA demanded full reimbursement of tollrevenue sharing received by the Company forsuch period from 2 September 1993 to 29 June1996, together with interest. The Company filedits answer to the counterclaim indicating thatETA had no right to demand such reimbursementsince such revenue sharing had been remittedto the Company out of the toll revenue inaccordance with the Agreement. Therefore, theCompany was entitled to receive such toll.

The chairman of the arbitral tribunal in respectof this dispute had been properly selected inaccordance with the procedures and law.Subsequently, ETA filed a challenge to thechairman of the arbitral tribunal. The Companytherefore filed its objection indicating that ETAûsaction was not in accordance with the law.Thereafter, the chairman withdrew himself fromthe case, the Thai Arbitration Institute thusrequested both disputing parties to nominatepersons to be selected as chairman of the


arbitral tribunal. On 1 December 2004, thearbitrators nominated and appointed Mr. KiangBoonpoem as chairman of the arbitral tribunaland scheduled for both parties to submit theirlists of witnesses on 1 February 2005 and tofile statements of witnesses and questions forsubpoenaed witnesses on 1 April 2005.

The Thai Arbitration Institute scheduled thehearings for examination of witnesses in 2005but said hearings were postponed since ETArequested to negotiate for settlement of thedispute with the Company. On the hearingdate for the disputing parties on 24 April 2006,the arbitral tribunal thus rescheduled thehearings for examination of witnesses, wherebywitnesses for the Company were first examinedon 9 October 2006 and two witnesses werebrought to testify and answer cross-examinationand re-examination questions until completionon 20 November 2006. At present, it is pendingthe examination of witnesses for ETA whichhas brought three witnesses to testify.

23.3 The Company and its subsidiary had a disputewith ETA regarding competing road which gaverise to financial impact on the Company and itssubsidiary. The Independent Certification Engineercertified that such road was a competing road.The Company and its subsidiary referred suchdispute to arbitration. Since there were factspertaining to the Expressway routes which wereadditionally opened for full service, the Companyand its subsidiary withdrew the statement ofclaim for amendment of facts. In this respect,the subsidiary submitted the dispute to the Panelin compliance with the procedures under theAgreement, and could not settle such dispute atthis stage. The subsidiary then referred suchdispute to arbitration on 20 December 2004,and ETA filed its statement of defense on 27May 2005. On the scheduled date, 7 July 2005,

for both parties to negotiate the dispute anddetermine the proceedings, the subsidiary andETA could not reach an amicable agreement.The dispute resolution by arbitration thencontinued. On 19 August 2005, the subsidiarythus submitted a letter of appointment ofAssociate Professor Viraphong Boonyobhas asits arbitrator and ETA submitted a letter ofappointment of Mr. Jira Phannarai as itsarbitrator.

The Thai Arbitration Institute held a meeting ofboth disputing parties on 31 August 2006 forappointment of chairman of the arbitral tribunaland determination of disputed issues. Thearbitrators selected and appointed Capt. UsahThumma as chairman of the arbitral tribunal,and determined the disputed issues. The Companywould be required to cite witnesses forexamination first, whereby the hearings forexamination of witnesses were scheduled to beheld in December 2006 and January 2007, andexamination of witnesses for ETA would beheld in February and March 2007.

On 3 January 2007, ETA filed its petition forextension of time for submission of statementsof witnesses and questions for subpoenaedwitnesses until 5 February 2007. In addition, toprevent causing any advantage and disadvantage,the Company thus also filed its petition forextension of time for the same purpose, as wellas requested the chairman to give an ordercanceling the hearing dates for examination ofwitnesses in January and February 2007. Thechairman of the arbitral tribunal then gave anorder granting permission accordingly.


23.4 ETA issued variation orders requiring theCompany to undertake additional work andnotified the Company that ETA would be liablefor costs as actually incurred. The IndependentCertification Engineer issued a letter certifyingthe additional costs. Thereafter, ETA refusedto make payment as certified by the IndependentCertification Engineer. The Company, therefore,referred such dispute to arbitration. However,since there were additional new facts, theCompany withdrew the dispute for amendmentof facts and filed the dispute with the Panel on13 January 2005. ETA then submitted itsanswer in respect of such dispute to the Panelon 5 July 2005, whereby the Thai ArbitrationInstitute scheduled 3 May 2006 for a meetingbetween the Panel and both disputing parties.As the result of the negotiation between thedisputing parties, it could be summarized thatboth parties could not reach an agreement, thePanel thus stopped the consideration andsuggested that the disputing parties refer suchdispute to the arbitration proceedings pursuantto the Agreement.

23.5 The Company and its subsidiary had disputeswith ETA due to delayed opening of Sector Dof the Second Stage Expressway and the BangPa-in - Pakkret Expressway for service, givingrise to financial impact upon the Company andits subsidiary. The Company and its subsidiary,therefore, referred such disputes to arbitration.However, since there were additional factspertaining to said Expressway routes, theCompany and its subsidiary withdrew thestatements of claim for amendment of facts.

23.6 The Company had an obligation to constructcollection and distribution road (CD Road), forwhich ETA should have delivered the site forsuch construction to the Company by 18 October2000. Given the fact that ETA was unable todeliver the site to the Company by the specifiedtime, the Companyûs obligation to carry out such

construction ceased accordingly. However, theCompany remained entitled to claim forcompensation for damages from ETA due to itsfailure to deliver the site to the Company ontime, including compensation for loss of tollrevenue had the construction been completedas scheduled. On 5 February 2001, ETAsubmitted the matter to the Panel to force theCompany to admit that the Company still hadobligation to construct the CD Road. TheCompany filed its objection, on 25 June 2001,that it had no such obligation and in additionfiled a counterclaim for loss of benefit fromETAûs failure to deliver the construction site tothe Company. The Panel could not mediatethe dispute and therefore asked the parties tofurther submit the matter to arbitration. Atpresent, this issue has not yet been referred toarbitration.

23.7 ETA referred a dispute to the Panel regardingliability for costs incurred by such actions toremedy problems resulting from the operation ofthe Second Stage Expressway. The Companywas of the view that such issue was not withinthe scope of responsibility of the Companyunder the Agreement and said issue could notbe settled by the Panel. Therefore, on 4 February2003, ETA referred the dispute to arbitration soas to force the Company to resolve the issueand reimburse ETA for costs already paid for byETA. The Company filed its statement ofdefense with the Thai Arbitration Institute on 13May 2003. It was scheduled for the disputingparties to meet on 2 December 2004. Bothparties mutually made a statement that anagreement could not be reached, the ThaiArbitration Institute then required both parties tonominate their respective arbitrators. In thisrespect, the Company appointed AssociateProfessor Viraphong Boonyobhas while ETAappointed Mr. Udom Chinwong as arbitrators. Inthis regard, the Company objected to theappointment of the arbitrator by ETA as such


person also acted as lawyer for ETA in otherdisputes between ETA and the Company. TheCompany and ETA thus agreed that suchobjection should be filed with the court ofcompetent jurisdiction for adjudication. TheCompany thus submitted such motion ofobjection to the court on 14 February 2005.The court then scheduled a hearing forexamination of the objection to be held on 16May 2005. However, thereafter, the objectedarbitrator withdrew himself from such capacity.In this regard, the Company withdrew its motionof objection and the court issued an orderdisposing of the case from the docket. ETAthen appointed Mr. Lertchai Charoensombatamornas its arbitrator instead. The Thai ArbitrationInstitute scheduled a meeting for appointmentof chairman of the arbitral tribunal and on5 October 2006, the arbitrators affixed theirsignatures appointing Associate ProfessorKamolchai Rattanasakalwong as chairman of thearbitral tribunal, and also determined the disputed issues and scheduled hearings for examination of witnesses for ETA to be held on 19,26 March and 2 April 2007.

23.8ETA referred a dispute to the Panel regardingliability for costs incurred by the execution of theworks under the Second Stage ExpresswayAgreement. The Company was of the view thatsaid costs demanded by ETA were not withinthe scope of responsibility of the Companyunder the Agreement and said issue could notbe settled by the Panel. Therefore, on 30 April2004, ETA referred the dispute to the arbitrationso as to force the Company to reimburse suchcosts. In this respect, the Company filed itsstatement of defense with the Thai ArbitrationInstitute on 23 July 2004. The Thai ArbitrationInstitute scheduled a meeting for negotiation forthe disputed issues or determination of

arbitration proceedings on 29 October 2004. Inthis regard, both parties mutually made astatement that an agreement could not be reachedand they did not wish to enter into mediation tobe conducted by the Thai Arbitration Institute.The Company then appointed Associate ProfessorViraphong Boonyobhas as its arbitrator whileETA appointed Mr. Virapon Panabut as itsarbitrator. The arbitrator whom both disputingparties mutually preferred the most and electedto be the chairman of the arbitral tribunal wasMr.Boonsri Kobboon.

The Thai Arbitration Institute thus held a meetingof both disputing parties on 30 August 2006 forappointment of chairman of the arbitral tribunaland determination of disputed issues, wherebythe arbitrators of both disputing parties haveaffixed their signatures appointing Mr. BoonsriKobboon as chairman of the arbitral tribunal.This case is currently pending the Thai ArbitrationInstituteûs rescheduling of witness examinationhearings.

23.9 The Second Stage Expressway Agreementstipulates that the toll rates of the First and theSecond Stage Expressway Systems shall berevised every five year interval, namely withinsix months from the first toll review date on 1March 1998, and each fifth anniversary thereof.Under the Agreement for the Extension of theSecond Stage Expressway System (Sector D),the first toll review date for Sector D shall be 1March 2003. Accordingly, the next toll reviewdate for the First and the Second StageExpressway Systems and the first toll reviewdate for Sector D shall be 1 March 2003. Therevised toll rates shall become effective as from1 September 2003. On 24 February 2003, theCompany submitted a letter requesting revisionof toll rates to the Expressway and RapidTransit Authority of Thailand, based on the


principles and procedures set out in therelevant Agreements.

Subsequently on 29 August 2003, the Ministryof Transport issued the Ministry of TransportNotifications regarding the toll rates for the Firstand the Second Stage Expressway Systemsand the Second Stage Expressway System(Sector D), to become effective from 1 September2003. The Company disagreed with theseNotifications since it believed that the adjustmentof the toll rates under these Notifications wascontrary to the Agreements.

On 29 June 2004, the Company referred adispute to the Panel regarding the revision oftoll rates for the First and the Second StageExpressway Systems, both urban and suburbannetworks, which was not in compliance with theAgreements. In the meeting with the Panel on29 November 2004, the disputing parties couldnot reach an agreement, the Company wouldthen refer such dispute to arbitration.

As for the toll rates for Sector D, the Companyfiled the dispute with the Panel on 18 November2004. ETA then submitted its answer on 28February 2005 and the next meeting of allparties for consideration of the dispute wasscheduled to be held on 20 May 2005. Thedisputing parties could not reach an agreement,the Company would then refer such dispute toarbitration.

23.10 The Bang Pa-in - Pakkret Expressway Agreementstipulates that the toll rates of the Bang Pa-in -Pakkret Expressway shall be revised every fiveyear interval, namely within six months from thetoll review date on 1 May 2003, and each fifth

anniversary thereof. The revised toll rates shallbecome effective within six months from the tollreview date, currently on 1 November 2003.On 25 April 2003, the subsidiary submitted aletter requesting revision of toll rates to theExpressway and Rapid Transit Authority ofThailand, based on the foregoing principles.

Subsequently on 29 August 2003, the Ministryof Transport issued the Ministry of TransportNotification regarding the toll rates for the BangPa-in - Pakkret Expressway, to become effectivefrom 1 November 2003. The subsidiary disagreedwith this Notification since it believed that theadjustment of the toll rates under this Notificationwas contrary to the Agreement. On 29 October2004, the subsidiary referred a dispute to thePanel, and ETA, on 9 February 2005, submittedits statement of defense to the Panel. A meetingwas held on 20 May 2005 for both parties toresolve the dispute. ETA and the subsidiarycould not reach an amicable settlement. ThePanel thus stopped the consideration andsuggested that such dispute be referred toarbitration.

24. LAWSUIT

In May 2006, the Expressway and Rapid TransitAuthority of Thailand and the Company were suedby Expressway users on grounds of wrongful act inrelation to traffic management and safety on the SiRat Expressway System, whereby the Expresswayand Rapid Transit Authority of Thailand was the firstdefendant and the Company was the second defendant.However, the Companyûs management believed thatthere would be no material impact to the Company,the Company therefore did not make any provisionfor contingent liabilities in the account.


25. SUBSEQUENT EVENT

On 27 February 2007, the meeting of the Board ofDirectors passed a resolution to propose a dividendpayment for the year 2006 of Baht 1.00 per share to theAnnual General Meeting of the Companyûs shareholdersfor their approval. The Company paid an interimdividend of Baht 0.50 per share on 6 October 2006and will pay a final dividend of Baht 0.50 per sharewithin May 2007. The payment of the final dividend isdependent on an approval being granted by theshareholders.

26. FINANCIAL INSTRUMENTS

26.1 Financial risk management and policiesThe Companyûs financial instruments, as

defined under Thai Accounting Standard No. 48çFinancial Instruments: Disclosure and Presentationsé,

principally comprise cash and cash equivalents,investments, trade accounts payable and long-term loansfrom financial institutions. The Company and itssubsidiary have no policy to hold or issue derivativesfor speculative or trading purposes.

Interest rate riskInterest rate risk is the risk that future fluctuations in

market interest rates will affect the operating resultsand cash flows of the Company and its subsidiary.

The Company and its subsidiaryûs exposure to interestrate risk relates primarily to its cash at banks andlong-term borrowings which are subject to interest. TheCompany and its subsidiary do not use derivatives tomanage its interest rate risk. Details of long-term loansfrom financial institutions are set out in Notes 13.

Fixed interest rates

Floating Non-

Within Over interest rate interest

1 year 1-5 years 5 years bearing Total Interest rate

(Million Baht) (% p.a.)

Financial assets

Cash and cash

equivalents - - - 232 4 236 0.5%-4.25%

Current investments 249 - - 64 - 313 3.91%-4.68%

Other long-term

investments, net - - - - 3,025 3,025 -

- - - 296 3,029 3,574

Financial liabilities

Trade accounts payable - - - - 31 31 -

Long-term loans 2,580 2,709 - 23,094 - 28,383 4%, 5% and

MLR - 1.5%

2,580 2,709 - 23,094 31 28,414


As at 31 December 2006, the significant financialassets and liabilities classified by type of interest rateand, for those financial assets and liabilities carryinginterest at fixed rates, by the contractual repricing ormaturity date (whichever is earlier) are as follows: -

Foreign currency riskForeign currency risk is the risk that the value of a

financial instrument will fluctuate because of changesin foreign exchange rates.

As at 31 December 2006, the Company and itssubsidiary do not have any financial assets andliabilities in foreign currencies.

Credit riskCredit risk refers to the risk that counterparty will

default on its contractual obligations, resulting in afinancial loss to the Company and its subsidiary.

As at 31 December 2006, the Company and itssubsidiary are not exposed to credit risk in relation tothe provision of service as they receive payment fromcustomers in cash.

26.2Fair values of financial instrumentsFair value represents the amount for which an

asset could be exchanged or a liability settledbetween knowledgeable, willing parties in an armûslength transaction.

The methodology of fair value measurementdepends upon the characteristics of the financialinstrument. For those financial instruments whichare regarded as being traded in an active market,fair value has been determined based on the latest

quoted market price. If however the appropriate quotedmarket price cannot be determined, the fair value isdetermined using an appropriate valuation techniquesuch as discounted cash flow.

Set out below is a comparison, by category ofcarrying amount and fair value, of the financial assetsand liabilities as of 31 December 2006.

The Company and its subsidiary establish fair valueof their financial instruments by adopting thefollowing methods and assumptions:

a) For financial assets and liabilities which haveshort-term maturity, including cash and cash atbanks, and trade accounts payable, the carryingamounts at the balance sheet date are consideredto be a reasonable approximation of their fairvalue.

b) For marketable debts and equity securities, fairvalue is based on the latest bid price as quotedin the market.

c) For non-marketable debt and equity securities,fair value is estimated based on the carryingamount in the balance sheet, net asset value ofthe securities or a discounted cash flow, as the

case may be.d) For long-term loans with fixed interest rate, fair

value is estimated by discounting expectedfuture cash flow by the current market interestrate of the loans with similar terms and conditions.

e) For long-term loans carrying interest at the rateapproximate to the market rate, the carryingamount in the balance sheet approximate fairvalue.


Carrying amount Fair value

Financial assets

Cash and cash equivalents 236 236Current investments 313 312Other long-term investments, net 3,026 2,247Financial liabilities

Trade accounts payable 31 31 Long-term loans 28,383 26,351


27. APPROVAL OF FINANCIAL STATEMENTS

These financial statements were authorised forissue by the Companyûs Board of Directors on 27February 2007.

Company Issuing Securities

Company Issuing Securities : Bangkok Expressway Public Company Limited (having initial as çBECLé)

Business Operation : Construction and management of the Si Rat Expressway and its

extensions, including related businesses as described in the Second

Stage Expressway Agreement entered into between Bangkok

Expressway Public Company Limited and the Expressway and Rapid

Transit Authority of Thailand.

Head Office : No. 238/7 Asoke-Dindaeng Road, Bang Kapi Subdistrict, Huai Khwang

District, Bangkok 10310

Companyûs Registration No. : 0107537002320 (Former No. BorMorJor.479)

Registered Capital : Baht 8,000 Million, Baht 7,700 Million of which is paid up.

Telephone No. : 0-2641-4611

Fax No. : 0-2641-4610

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

E-mail : [email protected]

238/7 ∂ππÕ‚»°-¥‘π·¥ß ·¢«ß∫“ß°–ªî ‡¢µÀâ«¬¢«“ß °√ÿß‡∑æœ 10310, ‚∑√»—æ∑å (66) 2641-4611 ‚∑√ “√ (66) 2641-4610

238/7 Asoke - Dindaeng Road, Bangkapi, Huaykwang, Bangkok 10310, Thailand Tel. (66) 2641-4611 Fax. (66) 2641-4610

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64-6400

www.becl.co.th

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