EASTW : Annual Report 2008 EN (oct2007-sep2008)
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Transcript of EASTW : Annual Report 2008 EN (oct2007-sep2008)
Annual Report 2008 1
Table of water distribution capacity and water consumption during 2000-2007
Unit : Million cubic meter/year 2000 2001 2002 2003 2004 2005 2006 2007 2008
Total water consumption 103.97 116.10 140.03 156.52 177.65 190.10 199.36 211.20 227.69
Capacity of water distribution 263.00 263.00 328.00 328.00 343.00 423.00 423.00 473.00 473.00
Ratios of water distribution capacity
and water consumption 2.53 2.27 2.34 2.10 1.93 2.23 2.12 2.24 2.08
Table of financial ratio
Company Consolidated
2004 2005 2006 2007 2008 2006 2007 2008
Book value per share 3.55 3.16 3.31 3.35 3.47 3.33 3.50 3.51
Net profit per share 0.44 0.39 0.39 0.33 0.32 0.39 0.33 0.35
Dividend per share 0.20 0.25 0.25 0.25 - 0.25 0.25 -
Net profit to total revenue 31.79 35.40 33.00 22.98 25.30 21.50 18.13 23.45
Return on equity 12.55 12.41 12.04 9.58 10.09 11.92 9.36 7.23
Return on assets 6.78 6.99 5.96 4.86 5.87 5.48 4.49 5.47
Debt to equity ratios 0.85 0.88 1.01 0.97 0.51 1.20 1.09 0.56
Highlights
During the past 15 years, Eastern Water Resources Development and Management Public Company Limited, or East
Water, has invested over 6 billion Baht for the development of raw water transmission pipeline technology and networks
covering a distance of over 324 kilometers. The Company�s goal is to ensure that the pipeline system can deliver
water from the sources to the destinations with maximum efficiency to provide universal service, by using highly
qualified personnel who devote themselves to every step in the water pumping and delivery process to adequately
meet the demands of water users.
In 2008, the Company took several steps to enhance the Company�s performance. As a result, the Company�s net
profit increased, mainly from the increase in sales of water and the control of expenditures. The Company was also
able to resolve the problem of realized loss in non-performing affiliated companies. For example, Global Water
Systems Corporation was dissolved and Water Trades and Services Company Limited was incorporated to continue
to provide drinking water vending machine service to existing customers. In addition, selling the pipe production
business in Eartern Hobas pipes though the study from the financial advigor�s analysis. All of this was to make sure
that in addition to strengthening the Company�s core business, its other businesses were managed without risk
factors. The water transmission pipeline system was developed for maximum efficiency and efforts were made in the
development of water sources, e.g. diversion of water from the Bangpakong River to Bang Phra Reservoir, the
development of alternative water sources through cooperation with private companies having water sources of their
own, and the expansion of desalination of seawater by reversed osmosis technology. The objective was for the
Company to be able to rely on its own water sources and build more stability for its core business.
East Water has continued to provide communication channels to listen to customers� opinions and promote good
relations with customers and the communities. The Company places emphasis on providing support for activities for
the improvement of the quality of life and the environment. The ultimate goal is to maintain good relations with the
government and the communities in the Company�s operating areas. In 2008, East Water focused on youth development
activities in those areas, starting with the �East Water Young Leader Camp for Conservation of Water Resources and
Environment� Project which was chaired by the Governor of Rayong Province. The target group was 300 upper
elementary and lower secondary school students from 60 Schools in Rayong Province. Each participant received a
certificate of merit and a 10,000 Baht scholarship. This activity brought great pride to youths, their parents/guardians
and their teachers. Others included the Clean Water for the Community, Water Source Revival, and Quality of Life
Improvement projects.
2 Annual Report 2008
Message from the Chairman
Moreover, East Water recognizes the fact that its employees are its most precious asset and a key mechanism for the
Company�s business success. In view of this the Company has a personnel development policy that emphasizes
general working skills along with enhancement of knowledge, technological competency, and specialized skills required
for each facet of work. Employees are encouraged to develop conduct and competence that comply with the corporate
vision, mission and values to enable the Company to continually achieve its business goals.
The Company has taken necessary steps to be well prepared for the economic impact in 2009. Plans and policies
have been formulated to control expenditures and minimize financial risks in the best interests of all stakeholders, i.e.
shareholders, customers, communities and employees. The Company reaffirms that Board of Directors and the
Management are aware of eminent external factors and will operate the business by adhering to prudent management,
transparency and the principle of good governance.
On behalf of the Board of Directors of Eastern Water Resources Development and Management Public Company
Limited, I would like to extend my sincere thanks to all shareholders, customers and business partners in the public
and private sectors for their continued support. I would also like to express my sincere appreciation to the Management
and all employees for their hard work, dedication and sacrifice. The Company will strive to achieve its goals and
adhere to the principle of �appreciation of every drop of water� today and in the future. East Water is ready to further
develop its water management capacity to take every drop of water to nurture the sustainable growth of the community
and the Thai economy.
Mr. Utid Tamwatin
Chairman
Annual Report 2008 3
4 Annual Report 2008
Board of Directors and Advisor to the Board of Directors
1 Mr.Utid Tamwatin Age 59
Position Chairman (Independent Director)
Chairman of the Corporate
Governance Committee
Education Master of Law University of California,
Berkeley USA
DCP 3/2000
Work Experience
JAN 03 - Present Chairman
Eastern Water Resources Development and
Management PLC
OCT 08 - Present Director - General, of The Customs
Department
DEC 03 - Present Director,Sukhumvit Asset Management Co.,Ltd.
NOV 06 - SEP 08 Deputy Permanent Secretary ,Ministry Of
Finance
OCT 04 - OCT 06 Director - General, The Excise Department
2 Mr. Kanoksakdi Bhinsaeng Age 52
Position Director
Chairman of theExecutive and
Invesment Committee
Member of the Remuneration Committee
Education Master of Public Administration (Public Policy
and Human Resource Management )
Sripatum University
DCP 106/2008 DAP 73/2008
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development and
Management PLC
Present Director
Ekarat Engineering PLC
3 Pol.Gen.Ajiravid Subarnbhesaj Age 61
Position Director (Independent Director)
Chairman of the Audit Committee
Member of the Remuneration Committee
Education Master of Public Administration National Institute
of Development Administration (NIDA)
DCP 104/2008 DAP 72/2008 ACP 22/2008
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
OCT 06 - MAR 07 Deputy Commissioner General
(Administration)
OCT 05 - SEP 06 Assistant Commissioner-General
OCT 02 - SEP 05 Commissioner of Police Region 4
4 Pol.Lt.Gen.Somyot Poompanmoung Age 54
Position Director
Member of the Executive and
Invesment Committee
Member of the Risk Management Committee
Education Master of Political Science Puna Uinversity,
India
DCP 107/2008 FSD 2/2008
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
APR 08 - Present Director
Provincial Waterworks Authority
OCT 08 - Present Assistant Commissioner General
JUN 08 - SEP 08 Commissioner - Central Investigation Bureau
FEB 08 -MAY08 Commissioner of the Office of
Inspector - General
11 8 9 2 3 10 1 45
712
6
Annual Report 2008 5
5 Pol.Maj.Gen.Pimol Sinthunava Age 67
Position Director (Independent Director)
Chairman of the Nominating Committee
Member of the Audit Committee
Member of the Corporate Governance Committee
Education Master of Education in Education Program
Administration Naresuan University
DCP 104/2008 DAP 72/2008 ACP 22/2008
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
OCT 99 - NOV 01 Assistant Commissioner
Provincial Police Region 6
Phitsanulok Province
6 Mr.Nattachak Pattamasingh Na AyuthayaAge 55
Position Director
Chairman of the Remuneration Committee
Member of the Nominating Committee
Education Master of Law, University of Pennsylvania USA
Master of Comparative Law,
George Washington University USA
DCP 70/2006 ACP 13/2006
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
APR 08 - Present Director
Provincial Waterworks Authority
Present Director , Bangkok Aviation Fuel Services PLC
MAR 06 - Present Deputy Director - General
Department of Legal Counsel, Office of The
Attorney General
7 Mr. Chakarn Saengruksawong Age 58
Position Director
Member of the Risk Management Committee
Member of the Nominating Committee
Education Master of Science (Agricultural Extension),
Kasetsart University
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
APR 08 - Present Director
Provincial Waterworks Authority
OCT 05 - Present Deputy Permanent Secretary
Ministry of Agriculture and Cooperative
OCT 02 - SEP 05 Director - General, Depertment of Agriculture
Ministry of Agriculture and Cooperative
8 Mrs. Monta Pranootnorapal Age 54
Position Director (Independent Director)
Chairperson of the Risk Management Committee
Education Master of Public Administration, National Institute
of Development Administration (NIDA)
DCP 84/2007
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
MAY 08 - Present Director and Governor
Industrial Estate Authority of Thailand
OCT 04 - DEC 07 Deputy Governor 11 ( Industrial Port )
Industrial Estate Authority of Thailand
9 Mr. Rasda Pongpaew Age 58
Position Director
Member of the Corporate Governance Committee
Education Bachelor of Sience ( Mech. Eng ) Prince of
Songkla University
DCP 94/2007
Work Experience
MAY08 - Present Director
Eastern Water Resources Development
and Management PLC
MAR 06 - Present Managing Director
EGCO Engineering and Service Co.,Ltd
SEP 98 - MAR 06 Vice Managing Director
EGCO Engineering and Service Co.,Ltd
10 Mr. Chanchai Tontisirin Age 66
Position Director (Independent Director)
Member of the Audit Committee
Member of the Risk Management Committee
Education Master Degree in Economic, Middle Tennessee
State University USA
DCP 1/2008 (Refresher Course) ACP 22/2008
Work Experience
MAY 08 - Present Director
Eastern Water Resources Development
and Management PLC
JAN 05 - DEC 06 Deputy Chairman
The Marketing Organization
JAN 05 - DEC 06 Chairman
Bangpakong Water Supply Co.,Ltd.
JAN 88 - DEC 02 Reginal Manager
TMB Bank Public Company Limited
11 Mr.Praphant Asava-aree Age 52
Position Director
Member of the Executive and
Investment Committee
Member of the Risk Management Committee
Education Bachelor�s Degree (Political Science)
Ramkamhaeng University
DCP 101/2008 ACP 21/2007
Work Experience
May 08 - Present Director
Jan 07 - Jan 08 Eastern Water Resources Development
and Management PLC .
April 07 - Present Director, member of The Audit Committee
and Corporate Governance Committee
Seamico Securities Plc.
Jan 05 - June 06 President & CEO
Asia Pacific Potash Corporation
June 05 - Present Advisor to the Governor (China Market)
Tourism Authority of Thailand
12 Lt.Gen Chayuth Suwanamas Age 56
Position Advisor
Education M.A. Industrial Psychology
Tennesses State University USA
Work Experience
MAY 08 - Present Advisor
Eastern Water Resources Development
and Management PLC
APR 03 - Present Policy and Plan Attached to Deputy Supreme
Commander Office of Supreme Command
Present Advisor
CPB Equity Company Limited,
Crown Property Bureau
JAN 07 - APR 08 Director
Eastern Water Resources Development
and Management PLC
6 Annual Report 2008
Management Team
1 Mr. Praphant Asava-aree Age 52
Position President & CEO
Education B.A. Political Science Faculty
Ramkhamhaeng University
DCP 101/2008 ACP 21/2007
Work Experience
Jan 07 - Present President & CEO
Eastern Water Resources Development and
Management PLC .
April 07 - Present Director, member of The Audit Committee and
Corporate Governance Committee
Seamico Securities PLC .
Jan 05 - June 06 President & CEO
Asia Pacific Potash Corporation
June 05 - Present Advisor to the Governor (China Market)
Tourism Authority of Thailand
2 Mr. Pairoj Sattayasansakul Age 49
Position Executive Vice President
Planning & Operations
Education M.Eng. (Sanitary Engineering)
Chulalongkorn University
DCP 19/2002
Work Experience
Nov 2001- Present Executive Vice President
Eastern Water Resources Development &
Management PLC.
2001 - Jul 2008 Managing Director
Universal Utilities Co.,Ltd.
2001 - Jul 2008 Director Bangpakong Water Supply Co.,Ltd.
2001 - Jul 2008 Director Chachoengsao Water Supply Co.,Ltd.
2001 - Jul 2008 Director Nakornsawan Water Supply Co.,Ltd.
3 Mrs. Namphon Rassadanukul Age 48
Position Senior Vice President
( Dept. of CEO office and Corporate Secretary )
Education M.A. Glasgow College of Tecnology, U.K.
DCP 4/2000
Work Experience
June 07- Present Senior Vice President
( Dept. of CEO office and Corporate Secretary )
Eastern Water Resources Development &
Management PLC.
Feb 04 � June 07 Senior Vice President Internal Audit Department
Eastern Water Resources Development &
Management PLC.
Nov. 01 - Feb 04 Vice President Internal Audit Department
Eastern Water Resources Development &
Management PLC.
Mar.01 -Oct. 01 Vice President ( Dept. of CEO office and
Corporate Secretary ) Eastern Water Resources
Development & Management PLC.
4 Mrs. Thidarut Kraiprasit Age 45
Position Senior Vice President
(Finance and Accounting Department)
Education MBA. Kasetsart University / CPA
Work Experience
June 07- Present Senior Vice President Finance and Accounting
Department Eastern Water Resources
Development & Management PLC.
Oct 04 � May 07 Senior Vice President Finance and Human
Resources DepartmentEastern Water Resources
Development & Management PLC.
2001 - Oct. 2004 Vice President Finance and Human Resources
Department Eastern Water Resources
Development & Management PLC.
1997 - 2001 Vice President Finance and Procurement
Department Eastern Water Resources
Development & Management PLC.
510
76
142398
Annual Report 2008 7
5 Mr. Cherdchai Pitiwacharakul Age 44
Position Vice President - Special Project
Education MS (Information Technology), King Mongkut�s
Institute of Technology Ladkrabang
Work Experience
Aug 07 - Present Acting Managing Director
Universal Utilities Co., Ltd.
Mar 07- Present Director EgcomTara Co., Ltd.
Nov 07 - Present Vice President - Special Project
Eastern Water Resources Development &
Management PLC.
Aug. 07 - Nov 07 Vice President Chachoengsao Operation Center
Eastern Water Resources Development &
Management PLC.
Acting Vice President Rayong Operation Center
Nov 01-Oct 06 Vice President Chachoengsao Operation Center
Eastern Water Resources Development &
Management PLC.
6 Mr.Potjana Bunsiri Age 47
Position Vice President Operation Department
Education MBA. / Burapha University
Work Experience
Nov. 07 - Present Vice President Operation Center
Eastern Water Resources Development &
Management PLC.
Nov 01 - Nov.07 Vice President Chachoengsao Operation Center
Eastern Water Resources Development &
Management PLC.
Mar 01 - Oct 01 Manager Large Scale Project Office
Eastern Water Resources Development &
Management PLC.
1998 - 2001 Senior Engineering Eastern Water Resources
Development & Management PLC.
7 Ms. Fuangfa Nimcharoen Age 44
Position Vice President Information
Technology Department
Education Msc. (Resource Management)
Kasetsart University Bngkhen
Work Experience
Jun. 07 - Present Vice President Information Technology
Department Eastern Water Resources
Development & Management PLC.
Nov 02- May 07 Vice President Corporate Affairs Department
Eastern Water Resources Development &
Management PLC.
Nov 01- Oct 02 Acting Vice President Corporate Affairs
Department Eastern Water Resources
Development & Management PLC.
Mar. 01- Oct 01 Assistant Vice President Administration
Eastern Water Resources Development &
Management PLC.
8 Mr. Namsak Wannavisute Age 43
Position Vice President
General Affairs Department
Education MS. (Finance), University of Cololado, USA
Work Experience
June 07 - Present Vice President (General Affairs Department)
Eastern Water Resources Development &
Management PLC.
Nov 02 � May 07 Vice President (Business Development
Department)
Eastern Water Resources Development &
Management PLC.
Nov 01 - Oct 02 Acting Vice President (Business Development
Department)
Eastern Water Resources Development &
Management PLC.
Mar 01 - Oct 01 Business Development Section Manager
Eastern Water Resources Development &
Management PLC.
9 Mr. Jaroensuk Worapansopak Age 45
Position Vice President Project Planning Department
Education Msc. (Hydraulic Engineering), International
Institute for Hydraulic and Environmental
Engineering (IHE), Delft, The Nether-lands
Work Experience
Aug 08 - Present Director EgcomTara Co., Ltd
Nov 02 - Present Vice President (Project Planning Department)
Eastern Water Resources Development &
Management PLC.
Nov 01 - Oct 02 Acting Vice President Project Planning
Department
Eastern Water Resources Development &
Management PLC.
Mar 01- Oct 01 Project Planning Section Manager
Eastern Water Resources Development &
Management PLC.
10 Mrs. Wirawan Tharanont Age 50
Position Vice President
Internal Audit Department
Education MBA, Sasin Graduate Institute of Business
Administrator of Chulalongkorn University
Work Experience
June 07 Present Vice President Internal Audit Department
Eastern Water Resources Development &
Management PLC.
Oct 06 - May 07 Vice President (Department of CEO Office)
Eastern Water Resources Development &
Management PLC.
Oct 05 � Sep 06 Manager (Department of CEO Office)
Eastern Water Resources Development &
Management PLC.
2004 - 2005 Corporate Risk Manager
Eastern Water Resources Development &
Management PLC.
8 Annual Report 2008
Business Profile and Subsidiary Shareholding Structure
Core Business
Eastern Water Resources Development and Management
Public Company Limited was founded on October 15, 1992 to be
responsible for the development and management of main water
pipeline systems in the Eastern Seaboard. The Company supplies
raw water to industrial estates, factories and waterworks via four main
raw water pipeline systems in Chonburi, Rayong and Chachoengsao
Province, i.e. the Nong Plalai-Dokkrai-Map Ta Phut-Sattahip pipeline;
the Nong Kho-Laem Chabang-Pattaya-Bang Phra Pipeline; the Nong
Plalai-Nong Kho Pipeline; and the pipeline system in Chachoengsao.
At the time of this reporting the Company manages 318.7-km water
pipelines with the combined pumping capacity of 428 million cubic
meters per year.
Related Businesses
- Tap Water Business: Universal Utilities Co., Ltd is a concessionaire offering tap water services in nine areas: Sattahip
Waterworks, Bangpakong Waterworks, Chachoengsao Waterworks, Nakornsawan Waterworks, Sichang Waterworks,
Bo Win Waterworks, Ko Samui Waterworks, Ko Lan Waterworks, and Rayong Waterworks. In addition, it also produced
tap water for Egcom Tara Co., Ltd. for Ratchaburi-Samut Songkram Waterworks and managed water leakage reduction
systems for Service Area 2 of Om Noi - Samphran - Samut Songkhram Waterworks, Pathumthani - Rangsit Waterworks,
and Pattaya Waterworks.
Annual Report 2008 9
Major Development in 2008
1. Core Business
October 2006: Construction of the reserve raw water reservoir for the Bangpakong - Bang Phra - Chonburi
pipeline began. These 700 mm. diameter pipes, connected to the Bangpakong - Bang Phra -
Chonburi pipeline covering a distance of approximately 2.2 kms., were laid to be connected to
the reserved raw water reservoir of the Samnak bok Subdristrict Administration Organizatation.
The reservoir has the capacity of 7.4 million m.3. It will be used to channel water from the Bang
Pa Kong River during the rainy season to be stored for distribution to areas in Chachoengsao
and Chonburi Provinces during the dry season. During the time of this reporting, construction
has been completed on October 29, 2007.
May 2007: A consultancy company was hired to conduct a study on the main pipeline system improvement
project in the Eastern Seaboard Area. The objective was to formulate the master plan for the
main pipeline system improvement to have the capacity to accommodate the increase demand
for water in the next ten years. At present, the detail designed is operating and the procurement
process is expected to start in May 2009.
September 2007: The construction of the pipeline project connecting Prasae Reservoir and Klong Yai Reservoir
continued under the Royal Irrigation Department in accordance with a cabinet resolution of
August 2, 2005. These 1,600 mm.-diameter and 1,400 mm.-diameter pipes were laid covering
a distance of 31.8 kilometers. The objective was to channel water from Prasae Reservoir to
Khlong Yai Reservoir, at approximately 80 million cubic meters per year. About 98% of the
1,700 million Baht project was completed and the pumping system was expected to be ready
for operation in 2009.
- Drinking Water Vending
Machine Business:
Water Trades and Services
Company Limited carries out the
drinking water vending machine
for the community project as
well as manages the remaining
GWS�s vending machine.
10 Annual Report 2008
2. Related Business
February 2008: Universal Utilities Co., Ltd. signed an agreement with the Provincial Waterworks Authority on 18
February 2008. This was a two-year Water Loss Reduction Agreement for areas under the Om
Noi � Samphran -Samut Songkhram Waterworks, involving a budget of 98.38 million Baht.
June 2008: Universal Utilities Co., Ltd. signed an agreement with the Provincial Waterworks Authority. This
was a 14-month Water Loss Reduction Agreement for areas under the Pattaya Waterworks,
involving a budget of 11.20 million Baht.
September 2008: Universal Utilities Co., Ltd. signed an agreement with the Provincial Waterworks Authority. This
was a 5-year Non-Revenue Water Project for areas under the Pathumthani - Rangsit Waterworks.
Universal Utilities Co., Ltd. signed an agreement with the Provincial Waterworks Authority on 24
September 2008. This was an agreement to engage a private entity to manage tap water
production and waterworks system maintenance at the Bang Niaw Dam Water Treatment Plant,
Phuket Waterworks. The term of the agreement is three years and the required production
capacity is 12,000 m.3/day.
3. Administration and Management
March 2008: The Company sold all the shares held in EHP
(equivalent to 50% of EHP�s paid registered capital).
June 2008: The Company was rated �Very Good� in the
Evaluation of Quality in Organizing Annual Ordinary
General Shareholders Meetings as indicated in the
SEC�s letter, Reference Number Kor. Lor. Tor. Kor.
1028/2008, Re: Notification of the result of the 2007
Evaluation of Quality in Organizing Annual Ordinary
Shareholders Meeting Quality for companies not
closing accounts in December 2007 and its request
for cooperation in disclosure of the result. The project
was jointly implemented by the Securities and
Exchange Commission, the Thai Investors
Association, and the Thai Listed Companies
Association.
Annual Report 2008 11
Raw Water Business
In 2008 the volume of raw water sold was 227.69 million cubic meters, an increase of 7.9% from 2007. Water
was distributed mainly to the industrial sector through the Industrial Estate Authority of Thailand and their existing
customers, at 33.38%. Domestic consumption was supplied through Provincial Water works Authority, municipal
waterworks. These demand was increased at 35.71%
Industrial Situation and Competition
Other Businesses
Private industrial estates
Industrial Estate Authority of
Thailand and existing users
Domestic consumption
9.85%
21.07%
33.38%
35.71%
12 Annual Report 2008
On 18 March 2008, the Company announced 2008 - 2013 water tariff restructure in response to the investment for
increase water supply reliability in the Eastern Seaboard. The objective was to adjust water tariffs to be consistent
with the increased water supply include management cost while allowing the Company to maintain its operating
performance at an appropriate level.
Tap Water Business
The Company has incorporated its subsidiary, Universal Utilities Company Limited (UU), to be engaged in
the production and distribution of drinking water, wastewater collection and treatment systems, and chemicals and
related equipment. UU also offers consultancy service and services in survey, design, construction and supervision
of clean water production systems and wastewater treatment systems. In 2008, the volume of tap water sold was
68.83 million cubic meters, an increase of 12% from 2007.
Important events in 2008:
1. UU signed three water loss management agreements worth over 110 million Baht with the Provincial
Waterworks Authority for areas under:
1.1. Om Noi - Samphran � Samut Songkhram Waterworks
1.2. Pattaya Waterworks
1.3. Pathumthani � Rangsit Waterworks
2. UU signed a Tap Water Operation and Maintenance Agreement with the Provincial Waterworks Authority
for Bang Niaw Dam Plant, at Phuket.
At the time of this reporting UU managed 9 waterworks at Sattahip, Bangpakong, Chachoengsao,
Nakornsawan, Sichang, Bo Win, Ko Samui, Ko Lan, and Rayong. As of 30 June 2008, the Company�s combined
production capacity was 85 million cubic meters per year.
Annual Report 2008 13
Related Businesses
In 2006 Global Water Systems Corporation Company
Limited (GWS), which distributed drinking water vending
machines using the reversed osmosis system, was
operating at retained loss of 85.53 million Baht. The
Company�s Board of Directors then passed a resolution to
wind up the company and the liquidation process was to
be completed in September 2007 to reduce the Group�s
consolidated loss. However, on 6 June 2007 Water Trade
and Services Company Limited was established with fully
paid up capital of 5 million Baht to sort out the management
of GWS�s Coined Operated Drinking Water Vending
Machines for the Community Project and to continue to
provide service for the 1,100 drinking water vending
machines East Water had taken over from GWS. However,
due to intense competition and the looming slowdown in
this business, the Company was considering providing
service only to existing customers who had already
purchased the machines.
14 Annual Report 2008
The Board of Directors realizes the importance of and is committed to the development of good corporate
governance, which includes suitable risk management to mitigate the negative impact of incidents or uncertainty that
may be caused by circumstantial factors, including the economic recession that may impair the Company�s ability to
accomplish its objectives or goals. Thus, the Risk Management Committee was assigned to formulate policies and
monitor corporate risks. Improvement has been made on the framework and criteria based on the affecting factors.
A risk management guideline has been prepared and progress has been monitored based on the operational plans
for risk management prepared by the Company and responsible work units to ensure consistent control of risks, with
results to be reported to the Board of Directors on a quarterly basis.
Key risk factors that may significantly affect business operations include:
1. Business-related Risks
1.1 Investment in related businesses that failed to achieve their goals
Over the years, the Company has expanded its operation from
raw water to also include tap water, drinking water, and pipe & equipment
businesses. While the tap water business has enjoyed steady growth, the
performance of drinking water and pipe and equipment was still far from
satisfactory. In addition to intense competition in the market, revenues had
to rely on large government projects that lacked clear-cut policies and were
characterized by uncertainty.
In March 2008, recognizing that the CC-GRP pipe production
and distribution business was suffering from operating loss, the Company
decided to sell its ordinary shares in Eastern Hobas Pipes Company Limited
(EHP), one of its subsidiaries. The shares held represented 50% of EHP�s
paid up capital. Of EHP�s total 48,000,000 shares, the Company�s
24,000,000 shares were sold at 12,000,000 Baht (par value was 10 Baht/
share) to mitigate the loss that affected the Company�s performance.
In addition, in 2007 the Company founded Water Trade & Services to
manage the remaining drinking water vending machines and deliver them
to various agencies.
1.2 Conflicts with communities concerning the use of water resources
Most of the construction projects are major pipeline projects,
such as one from Prasae to Khlong Yai that would be one of the Company�s
main raw water resources. Their implementation and the use of water
resources in the Company�s projects may have led to conflicts with
communities in the area. However the Company has coordinated with local
communities and tried to have a dialogue to end the conflict in each
community.
Risk Factors 2008
Annual Report 2008 15
In 2008, the Company strengthened its relationship with water users and investors through various activities to develop
their positive attitude toward the company. The �East Water Family Day in Rayong� was organized to present certificates
and scholarships to upper elementary and lower secondary students who participated in the East Water Young
Leaders Camp Program. The objective of the program was to raise the conscience of these children regarding
conservation of natural resources. A total of 300 scholarships of 10,000 Baht each were given to participants and 57
tanks of water were given to 31 agencies to be used during water shortages. The Company also took part in the
activities to dredge up the Nakhon Nuang Khet Canal to clear out water hyacinth and weeds to nurture the natural
environment and to improve the quality of the water in the canal to be usable again. The Company demonstrated,
installed and donated reversed osmosis vending machines to various agencies on a continued basis.
1.3 Inadequacy of water resources to meet water consumption
demand
The projection of the volume of water in main water resources
indicated that there would be sufficient water for consumption throughout
2008. However, to mitigate this risk, the Company implemented a monitoring
system to be on the alert for droughts. Preventive measures were put in
place and the water situation was monitored on a weekly basis. A project
to increase raw water capacity was implemented, with the provision of
earth pits to reserve water to be used during the dry season. At the time of
this reporting, the water volume in the main reservoirs was 241.97 million
cubic meters, or at 103% of the total capacity (235.2 million cubic meters
as of 7 November 2008).
1.4 Policies of the government and related agencies
Uncertainty in policies of government agencies could affect the
Company�s operations. There was lack of clarity with regard to the request
for a budget for the Prasae-Khlong Yai pipeline project. The Irrigation
Department was in the process of coordinating with the Ministry of
Agriculture and Cooperatives for allotment of a budget of 1,008 million
Baht.
1.5 Damage to pipeline systems
The Company�s pipeline systems may face the problem of
corrosion, or construction of other infrastructure in the areas where the
pipelines are laid, that may lead to breaking or leaking. However, the
Company has prepared a plan to inspect and maintain the pipeline systems
on a continuous basis. The Company has also taken all risks insurance to
cover every pipeline as well as insurance to cover risks to its assets and
liabilities to third parties to ensure that water would be distributed efficiently
and without interruption.
16 Annual Report 2008
2. Financial Risks
Pumping water from newly developed water resources and the rising cost of energy due to a higher Ft rate
resulted in higher cost of energy used for water pumping than anticipated. Although the Company could not control
the cost of energy, which varied with the economy and price of oil in the global market; it was able to manage by
measures such as pumping water during the time that the cost was at the lowest and improving the pumps� efficiency.
The Company has also prepared an energy conservation plan, explored alternative energy sources such as hydro,
solar and wind energies.
3. Legal Risks
Legal disputes that might affect the assets of the Company in the value exceeding 5% of shareholders� equity
as of 30 September 2008 are listed below.
1. On 28 March 2003, the Company was the 2nd
Defendant in a case involving the purchase of assets from the
Legal Execution Department. xxx Company Limited (Plaintiff) filed a case in the Court demanding revocation of a
legal act or pay them damages, at the claimed amount of 302.2 million Baht. On 26 January 2006, the Court of First
Instance dismissed the case. The Plaintiff lodged an appeal and proceedings were still ongoing at the Court of
Appeals at the time of this reporting.
The Company believed that such transaction was legitimate and protected by law. The Company followed the
procedures for sale by auction in good faith according to the Court�s order or the order of the Official Receiver. Full
payment was made and the transfer of ownership from the Legal Execution Department was duly registered. The
Company expects to win this case.
2. Tambon Bang But Administration Organization, 1st Plaintiff, Tambon Ban Khai Administration Organization 2
nd
Plaintiff, and Mr. Sayan Yangdee, 3rd Plaintiff filed a case against the Provincial Waterworks Authority (PWA) at the
Rayong Administrative Court on 14 March 2006. The case concerned an unlawful act committed by an administrative
agency or a state official. Afterwards the Rayong Administrative Court summoned the UU Group Consortium to be
the interpleader in its capacity as the 2nd
Defendant, because it was an interested party in this dispute. On 16 March
2007, the Rayong Administrative Court passed a decision to revoke the process to select a private entity to produce
tap water to sell to PWA in the area under the jurisdiction of the Rayong Waterworks Authority. The Agreement No.
Kor. For. Por. 1/2549 dated 14 March 2006, which resulted from an unlawful selection process, was also revoked.
However, PWA still instructed the UU Group Consortium to comply with the agreement for a private entity to produce
water to sell to PWA at the Rayong Waterworks Authority. PWA also upheld the rights and duties of the Parties to the
Agreement as stipulated in the said Agreement until the case would become final. If the Supreme Administrative
Court should confirm the decision of the Rayong Administrative Court, the UU Group Consortium would then have the
right to claim damages from PWA as stipulated in Item 13.2.4 of the Agreement. The damages would include the
construction cost, the system improvement cost and any other expenditure incurred to make the tap water systems
operable under this Agreement. At the time of this reporting, the appeal proceedings were in process at the Supreme
Administrative Court.
Although corporate risks are closely monitored by the Risk Management Committee, the Company has prepared
a risk management guidance and set risk management action plans to be implemented by departments to maintain
operational risks at an acceptable level. Risks are reviewed at the end of every year and not limited to those relating
to damage. The review also includes consideration of other parameters tat can indicate probable risks under changing
situations.
Annual Report 2008 17
Management Description and AnalysisEastern Water Resources Development and Management PCL.
1. Report and analysis of operating performance
In 2008, the total revenue of the Company and its subsidiaries was 2,437.25 million Baht, an increase of 7.12
million Baht, or 0.29%, from 2007. Details are given below.
Unit: Million Baht
Income 2008 2007 Difference Difference (%)
Raw water 1,672.60 1,537.89 134.71 8.76%
Tap water 541.15 471.93 69.22 14.67%
CC-GRP pipes 18.89 63.13 (44.24) (70.08%)
Revenue from services 143.22 308.37 (165.15) (53.56%)
Drinking water and other businesses 3.08 20.33 (17.25) (84.85%)
Interest income/dividend income 44.79 8.96 39.31 438.73%
Gain on disposal of investment in 3.48 - 3.48 100.00%
Subsidiaries
Others Income 10.06 19.53 (9.47) (48.49%)
Total income 2,437.25 2,430.13 7.12 0.29%
1.1 Income analysis
- Revenue from sales of raw water increased by 134.71 million Baht, or 8.76%, consistent with the increase
in the amount of raw water sold, which increased from 211.20 million cubic meters to 227.69 million
cubic meters, or 7.81%. The Company gradually adjusted its raw water charges, starting in May 2008.
Details of the amounts sold are given below.
Area 2008 2007 Difference Difference (%)
Rayong Province 147.08 142.86 4.22 2.95%
Chonburi Province 72.13 59.54 12.59 21.15%
Chachoengsao Province 8.48 8.80 (0.32) (3.64%)
Total 227.69 211.20 16.49 7.81%
- Income from tap water business was 541.15 million Baht, increasing by 69.22 million Baht, or 14.67%,
from the previous year, due to an increase in the number of new customers and in water consumption of
existing users under the Sattahip Waterworks and waterworks under concessions in three other areas.
The figures also include income from Koh Samui Waterworks, Koh Lan Waterworks and Rayong
Waterworks. The number of water users as of 30 September 2008 was 115,430, increasing by 12.03%
from the previous year.
18 Annual Report 2008
Combined Areas 2008 2007 Difference Difference (%)
Sales of tap water 47.53 31.65 15.88 50.17%
- Income from sales of CC-GRP pipes amounted to 18.89 million Baht, decreasing by 44.24 million Baht
from 2007 because the Company sold all of its shares in Eastern Hobas Pipes Company Limited (EHP),
which accounted for 50% of EHP�s total shares, in March 2008.
- Income from services was 143.22 million Baht, a drop of 165.15 million Baht, or 53.56%, from the previous
year. The decrease was due mainly to the decline in revenue from the water loss management
agreements, most of which expired in early 2008. These included water loss management agreements
with Bangpakong Waterworks, Chachoengsao Waterworks, and Sisaeng Karnyotha Co., Ltd. At the
time of this reporting the Company was providing service only in Service Area 2 of the Metropolitan
Waterworks Authority and for Phetchaburi Waterworks.
- Income from drinking water and other businesses totaled to 3.08 million Baht, decreasing by 17.25
million Baht, or 84.85% from 2007. This was because the Company had a policy to decelerate its
activities in such businesses, resulting in business downsizing and the decrease in revenue.
- Interest income, dividend income and gain on disposal of investment in subsidiaries amounted to 48.28
million Baht, increasing by 39.31 million Baht. This was attributed to the dividend from investment in
subsidiaries and the profit from disposal of investment in a subsidiary in the amount of 3.48 million Baht
- The operating expenses of the Company and its subsidiaries totaled 1,865.77 million Baht, an decrease
of 213.65 million Baht, or 12.91%, from 2007. Details are given below.
Unit : Million Baht
Expenses 2008 2007 Difference Difference (%)
Cost of sales-Raw water 712.60 604.79 107.81 17.82%
Cost of sales-Tap water 243.92 321.54 (123.96) (33.69%)
Cost of sales- CC-GRP 16.98 71.80 (54.82) (76.35%)
Cost of services 166.09 433.33 (267.24) (61.67%)
Cost of sales: Drinking water
and other businesses 3.01 94.84 (91.83) (96.83%)
Sales and administration 428.16 458.71 (30.55) (6.66%)
Interest expenses 165.94 192.77 (26.83) (13.91%)
Last on Sale Investment - 8.11 (8.11) (100.00%)
Annual Report 2008 19
1.2 Expense analysis
- Raw water selling cost was 712.60 million Baht, increasing by 107.81 million Baht or 17.82%. This was
attributed mainly to the increase in the electricity cost due to the production capacity increase in the
Dokkrai - Nong Pla Lai - Map Ta Phut -Sattahip area and Chachoengsao - Chonburi area; the increased
maintenance costs resulting from repair work at the Map Kha reserve pond in September, the pipeline
repair and maintenance costs, and the cost of depreciation that went up along with the increase in water
pumping activities.
- Tap water selling cost was 243.92 million Baht.
- Selling cost of the CC-GRP pipes totaled 16.98 million Baht, dropping by 54.75 million Baht or 76.33%
due to the selling of EHP�s shares in March 2008 mentioned earlier.
- Selling cost of the service totaled 166.09 million Baht.
- Selling cost of the drinking water and other businesses totaled 3.01 million Baht, a decline of 91.83
million Baht or 96.83% due the Company�s policy to decelerate these businesses.
- Selling and administrative expenses totaled 428.16 million Baht, dropping by 30.55 million Baht or
6.66%. This was due to the selling of EHP�s shares in March 2008. On the other hand, certain expenses
increased, such as expenditures from quality of life and environment development projects, administration
costs of the new office building, consultant�s fees, and personnel development expenditures.
- Lost on Sale Investment dropped because of the amortization of the investment of Global Water Systems
Company Limited which was dissolved in 2007.
1.3 Summary of consolidated operating performance
Unit : Million Baht
2008 2007 Difference Difference (%)
Total Income 2,437.25 2,430.13 7.12 0.29%
Total expenses before depreciation 1,216.79 1,366.39 (149.60) (10.95%)
EBITDA 1,220.46 1,063.74 156.72 14.73%
Depreciation and amortization 336.99 309.21 27.78 8.98%
EBIT 883.47 754.53 128.94 17.09%
Interest expense 165.94 192.77 (26.83) (13.92%)
Income tax 180.81 217.79 (36.98) (16.98%)
Net income of minority interests 34.76 96.71 (61.95) (64.06%)
Net income 571.49 440.68 130.81 29.68%
In 2008, consolidated EBITDA from operation of the Company and its subsidiaries went up by 14.73%. The
increase was from revenue from raw water and tap water businesses. At the same time there was depreciation from
the Rayong River raw water pipeline project and the Bangpakong - Chon Buri raw waters pipeline, and depreciation
of the office building, causing the consolidated depreciation to increase by 8.98%, resulting in the 17.09% EBIT
increase.
20 Annual Report 2008
Interest expense totaled 165.94 million Baht, decreasing by 26.83 million Baht or 13.92% because of the
Company�s gradual repayment of the principal amount of a long-term loan. In addition the interest rate dropped to
fixed rates of 4.5% and 4.8% when compared to the MLR previously applied.
In all, the net income of the Company and its subsidiaries was 571.49 million Baht, increasing by 29.68%
from the previous year.
Important Financial Ratios
Financial Ratio Unit 2008 2007
- Gross profit margin % 59.9 56.4
- Liquidity ratio time 0.9 0.2
- Net profit margin % 23.5 18.1
- Debt to shareholders equity ratio time 0.6 1.1
- Return on Shareholders� equity % 9.6 9.4
- Return on assets % 6.1 4.5
Company�s ratio analysis showed an overall positive trend, mainly from the increase in the Company�s net
income. The liquidity ratio increased from 0.2 time to 0.9 time because the Company repaid the debentures in the
amount of 2,500 million Baht before the maturity date on 11 October 2007. The debt to equity ratio dropped to 0.6
time, indicating that the Company had more liquidity as a result of the repayment of debentures before the maturity
date as mentioned above. Sales of EHP� shares resulted in the decrease in current liabilities and long term loans.
The profit margin and net profit was at 59.9% and 23.5% respectively. The return on shareholders equity at
9.6% indicated good operating results despite the increase in shareholders� equity due to the exercise of the warrants
that expired in December 2007. The return on assets was 6.1%
2. Report and financial analysis
Unit : Million Baht
Assets 30 Sep 2008 30 Sep 2007 Difference Difference (%)
Total assets 9,330.93 9,822.96 (492.03) (5.01%)
Total liabilities 3,354.46 5,113.11 (1,758.65) (290.74%)
Shareholders� equity 5,976.47 4,709.86 1,266.61 26.89%
2.1 Asset analysis
As of 30 September 2008, the total assets of the Company and its subsidiaries were 9,330.93 million Baht,
decreasing by 492.03 million Baht or 5.01% when compared to the end of fiscal year 2007. As shares in EHP were
sold, EHP�s fixed assets comprising land, buildings, plants and machinery were not accounted for.
Annual Report 2008 21
2.2 Debt analysis
As of 30 September 2008 the total liabilities of the company and its subsidiaries were 3,354.46 million Baht,
a decrease of 1,758.65 million Baht from the end of fiscal year 2007. Current liabilities were 846.45 million Baht,
dropping by 2,761 million Baht as a result of repayment of debentures before the maturity date. Long term debts
totaled 2,478.01, increasing by 1,002.49 million Baht due to long term borrowing.
2.3 Analysis of shareholders� equity
As of 30 September 2008, shareholders equity was 5,976.47 million Baht, including 2.13 million Baht of
minority interest. The shareholders equity increased by 1,266.61 million Baht from the end of fiscal year 2007 as a
result of the 2008 net profit in the amount of 571.49 million Baht and the exercise of the warrants that expired in
November 2007, thus increasing the registered capital to 1,663,725,149 shares.
3. Cash flow report and analysis
Cash and cash equivalents of the Company and its subsidiaries as of 30 September 2008 amounted to
170.19 million Baht, decreasing by 167.24 million Baht from the end of the fiscal year 2007. Details on sources and
uses of cash are given below.
- Cash flow from operating activities in the amount of 732.19 million Baht was from the 2007 net profit that
was adjusted for non-cash items such as depreciation and amortization, and taking into account changes
in operating assets and liabilities such as the decrease in accounts receivables, subsidiaries� inventories,
and the increase in accounts payables.
- The net cash flow used in investment activities was 310.11 million Baht. Cash flow used in ongoing projects
such as the Headquarters Construction Project and the Water Distribution Control System Improvement
Project accounted for 197.45 million Baht while cash flow was provided by disposal of investment in EHP
- Cash flow used in financing activities was 576.54 million Baht, mostly from payment of long term bank
loans, at 344.29 million Baht, and from dividend payment of 416.06 million Baht.
Annual Report 2008 21
22 Annual Report 2008
The Company believes that a
good corporate governance process is a
key element in achieving the Company�s
goal, which is to offer maximum value to
its shareholders. The Company�s
Principles of Good Corporate Governance
have been developed with the objective
of being used as guidelines for its
personnel at all levels, from the Company�s
directors to Management, employees,
associates, and contractor�s employees to
ensure �transparency, honesty,
accountability and competitiveness� in its
business operations
Good Corporate Governance
1. Corporate Governance Policy
The Board of Directors together with Management defines the Company�s vision, mission and policies with
consideration given to the business parameters and the Principles of Good Corporate Governance, to ensure the
continued development of the Company�s excellent business practices. These Principles of Good Corporate
Governance were last reviewed in October 2008 to be more appropriate and up to date. The Company�s personnel
must understand these principles and consistently comply with the policies. The Company also posts its codes of
conduct on the Company�s web site under the heading �Principles of Good Corporate Governance�.
2. Shareholders Rights
The 2007 Annual Ordinary General Meeting of Shareholders was held on 24 January 2008. Two Extraordinary
General Meetings of Shareholders were held. The Meeting No. 1/2008 was held on 12 May 2008 and the Meeting No.
2/2008 was convened on 25 August 2008. Invitations to attend the meeting were sent no fewer than 14 days in
advance, with complete and clear details on the registration time, the schedules of the meetings, and the agenda of
the meetings to help shareholders gain a thorough understanding of their rights and benefits, and to exercise
appropriate judgments in voting. Moreover, the Company has made a continued effort to offer more alternatives to
shareholders by allowing independent directors to be their proxies in the event that shareholders cannot attend the
meeting.
To comply with the Principles of Good Corporate Governance for Listed Companies in 2006, the Company
has granted the right to minority shareholders who hold fully paid up shares of 0.1 t0 5 % of shares of the total sold
shares to propose items to be included on the agenda and to nominate candidates for directorship in advance via the
Company�s website.
Annual Report 2008 23
3. Stakeholders� Rights
The Company�s business philosophy emphasizes accountability and equal treatment that hold confidence
of stakeholders. These include:
(1) Accountability towards shareholders, by giving consideration to investments that yield appropriate and
fair returns and maintaining stable financial status for the purpose of viability and growth.
(2) Accountability towards clients, by managing and developing water resources and products and providing
quality services that give clients maximum satisfaction.
(3) Accountability towards all employees by respecting their lawful rights, providing a good and safe working
environment, and fair employment conditions that truly reflect the market situation, and by promoting the
use of human resources to their full potential.
(4) Accountability towards parties having business relationships with the Company by developing
relationships that will enable mutual maximum benefits with contractors, suppliers, and joint-investors,
under the concept of good corporate governance.
(5) Accountability towards society and the environment, by carrying out business activities with social
responsibility. The Company respects and complies with relevant laws and regulations, to safeguard
against any impact that will lead to loss of life or property of personnel, as well as the community and the
environment.
4. Shareholders Meeting
In the fiscal year 2007 the Annual Ordinary General
Shareholders Meeting was held once on 24 January 2008. Eight
directors attended the meeting including the Chairman of the Board,
the Chairman of the Audit Committee, Chairman of the Risk
Management Committee, Chairman of the Investment Committee,
(Chairman of Executive Committee) and the Chairman of the
Nomination and Remuneration Committee. For each item on the
agenda, the Chairman of the Board, who chaired the Meeting, allowed
shareholders to equally exercise their rights to audit the Company�s
business operations, make inquiries, express their views and offer
suggestions. The result of the votes on each item on the agenda was
reported to the shareholders informally before the Meeting was over.
In the minutes of the Shareholders Meeting the resolutions passed
were clearly recorded and the official results on the votes officially
indicated, showing the votes for, against and abstentions for each
item.
At the 1/2008 Extraordinary Meetings of Shareholders on 12
May 2008 and 2/2008 Extraordinary Meetings of Shareholders on 25
August 2008, the procedures followed the framework of the
Shareholders Meeting Quality Evaluation Project. For shareholders�
convenience, the barcode system was used for registration and the
E-voting was used for vote counting through arrangements with
Thailand Securities Depository Co., Ltd. (TSD). At these two meetings,
24 Annual Report 2008
it was the Company�s policy that all shareholders received complete and adequate information for their decision
making. Opportunities were given to all shareholders to equally exercise their rights to make inquiries, express their
views and offer suggestions regarding the Company�s operations. Those who were not able to personally attend the
meetings were allowed to vote by proxies. Two independent directors who had no conflict of interest regarding items
on the agenda were also proposed to shareholders as the choices of their proxies who could vote on their behalf.
In the fiscal year 2007 (2008?). The Office of the Securities and Exchange Commission, the Thai Investors
Association and the Listed Companies Association jointly implemented the Annual Ordinary General Shareholders
Meetings Quality Evaluation Project. East Water was rated �very good�.
The Company was rated �Very Good� in the 2008 Corporate Finance Report of Thai Listed Companies
(CGR) prepared by the Thai Institute of Directors Association (IOD), the Office of Securities and Exchange Commission
(SEC) and the Stock Exchange of Thailand (SET).
5. Leadership and Vision
The Board of Directors plays a very important role in defining the Company�s vision, policies, and strategic
plans, by setting a long-term corporate plan every three years. For operations each year, the Company�s Management
proposes strategies and activities to the Directors and members of the Investment Committee and the Board of
Directors respectively for their consideration, comments and approval of action plans, including the annual expenditure
budget. In addition, Management reports on the progress of the annual action plans and significant obstacles during
monthly meetings of the Board of Directors as well as presenting for the Board�s consideration investment projects
with values of 200 million Baht or more to obtain approval.
6. Conflict of Interest
Connected transactions between the Company and other companies within the group or other interested
parties will go through approval procedures that are proper and clearly spelled out, by using the same price structure
and conditions as those applied to other trading partners of the Company. Details on connected transactions are
disclosed in the Annual Report and the Form 56-1.
Annual Report 2008 25
In addition, at every monthly Board Meeting, the Board of Directors and Management require regular reports
on the securities holding of members of the Board and the Management. In the fiscal year 2008 there were connected
transactions that had to be reported in the interest of the Company. The Company therefore followed the directive of
the Stock Exchange of Thailand under which the concerned director for each transaction was not allowed to approve
such transaction. The Company meticulously disclosed its connected transactions.
7. Corporate Ethics
In addition to the implementation of the �Principles of Good Corporate Governance of Eastern Management
and Development of Water Resources Company�, the Company has also prepared the �Board of Directors Manual�,
which was declared effective on 17 August 2006 and constantly updated to be timely and appropriate for the changing
rules, to be used by directors as the standard for compliance with the Principles of Good Corporate Governance. All
the Company�s directors are required to sign in acceptance of the said Manual. The employees� Code of Business
Ethics has also been made effective and training on good corporate governance has been provided for new employees.
A project to promote knowledge and understanding of good corporate governance has been organized for employees
on a continual basis.
8. Balance of Power by Independent Directors
As of 30 September 2008, there were 11 members on the Board of Directors comprising:
1 Executive director
5 Non-executive directors
5 Independent directors
9. Centralization and Decentralization of Power
The Board of Directors focuses on transparency in business operations, decentralization of decision making,
and division of authority in reviewing and approving various matters. The Company Chairman is not the same person
as the President & CEO. Members of the Audit Committee do not have the power to sign any document that will
legally bind the Company and do not have monetary oversight in the finance and management of the Company of its
affiliated companies.
10. Remunerations of Directors and Management
Remunerations of directors and executives follow the principles and policies defined by the Board of Directors.
The Remuneration Committee considers and proposes suitable remunerations to the Board of Directors and to
shareholders (on the part of Directors� remunerations) for consideration and approval. Remunerations of directors
and Management in 2008 are summarized below.
26 Annual Report 2008
2008 Directors and Management�s Remunerations
Directors� remunerations during 1 October 2007 � 30 September 2008
Meeting
Name of Director (1)
Allowance Remunerations Bonus
(Baht) (Baht) (Baht)
1 Mr. Utid Tamwatin Chairman 130,000 960,400 297,500
2 Pol. Lt. Gen. Jarax Sangtaweep Former Chairman 130,000 752,000 350,000
3 Mr. Anucha Mokkavesa Former Vice Chairman 84,000 541,200 455,000
4 Dr. Borwornsak Uwanno Former Director 60,000 630,400 420,000
5 Lt. Gen. Chayuth Suwanamas Former Director 180,000 530,400 280,000
6 Mr. Rangson Sriworasat Former Director 20,000 235,200 280,000
7 Mr. Chavalit Sarun Former Director 90,000 630,400 280,000
8 Mr. Uthai Juntima Former Director 30,000 295,200 420,000
9 Mr. Somchai Boonnamsiri Former Director 10,000 315,200 420,000
10 Mr. Somnuk Kyavatanakij Former Director 170,000 880,400 420,000
11 Mr. Siva Sangmanee Former Director 20,000 135,200 -
12 Gen. Suchet Watthanasuk Former Director 20,000 135,200 -
13 Mrs. Monta Pranootnorapal Director 100,000 255,200 -
14 Mr. Rasda Pongpaew (2)
Director - - -
15 Pol. Gen. Ajiravid Subarnbhesaj Director 120,000 150,000 -
16 Mr. Kanoksakdi Bhinsaeng Director 140,000 150,000 -
17 Pol. Maj. Gen. Pimol Sinthunava Director 120,000 150,000 -
18 Pol. Lt. Gen. Somyot Poompanmoung Director 110,000 150,000 -
19 Mr. Nattachak Pattamasingh Na Ayuthaya Director 80,000 150,000 -
20 Mr. Chakarn Saengruksawong Director 60,000 150,000 -
21 Mr. Chanchai Tontisirin Director 120,000 150,000 -
Executive Director and nine Executive Members 27,442,280
Notes: (1) Former Chairman, Former Vice Chairman and Former Directors refer to directors who vacated office before 30 September
2008.
(2) According to Electricity Generating Public Company Limited (EGCO), a director�s remunerations from directorship in other
companies are transferred to the account of the Thai Forest Conservation Foundation, a foundation established with the
objectives of raising awareness about and networking for conservation of forests and water resources.
10.1 Directors� Securities Holding
As of 30 September 2008, no director held the Company�s securities. Nine executive members held
1,570,580 ordinary shares.
10.2 Contributions to Provident Fund
In the fiscal year 2008 ending 30 September 2008, the Company�s contributions to the Provident Fund for 10
executive members totaled 1,574,521.20 Baht.
Annual Report 2008 27
11. Board of Directors Meetings
The Board of Directors� monthly meetings are scheduled during the third or fourth week of the month. The
President, serving as the Secretary to the Board of Directors, sends an invitation together with the Meeting Agenda
and relevant documents in advance to allow time for directors to review the information before attending the meeting.
In the fiscal year 2008 (1 October 2007-30 September 2008) 17 meetings were held and attended by members of the
Board. Details on individual director�s attendance are given below.
No. of Meetings
Names of Directors Attended/No. of Term of Office
Meetings Held
1 Mr. Utid Tamwatin Chairman 14/17 (24 Jan 03 - 26 Jan 07)
(22 May 07 � Present)
2 Pol. Lt. Gen. Jarax Sangtaweep Former Chairman 7/9 26 Jan 07 - 9 May 08
3 Mr. Anucha Mokkavesa Former Vice Chairman 9/9 15 Jun 05 - 9 May 08
4 Dr. Borwornsak Uwanno Former Director 8/9 11 Feb 99 - 10 May 08
5 Lt. Gen. Chayuth Suwanamas Former Director 9/9 26 Jan 07 - 9 May 08
6 Mr. Rungson Sriworasat Former Director 2/4 26 Jan 07 - 24 Jan 08
7 Mr. Chavalit Sarun Former Director 5/9 26 Jan 07 - 9 May 08
8 Mr. Uthai Jantima Former Director 3/3 16 May 05 - 2 Jan 08
9 Mr. Somchai Boonnamsiri Former Director 1/4 24 Jan 03 - 24 Jan 08
10 Mr. Somnuk Kyavatanakij Former Director 9/9 24 Jan 03 - 9 May 08
11 Mr. Siva Sangmanee Former Director 4/4 24 Jan 08 - 1 May 08
12 Gen. Suchet Watthanasuk Former Director 4/4 24 Jan 08 - 6 May 08
13 Mrs. Monta Pranootnorapal Director 13/13 24 Jan 08 - Present
14 Mr. Rasda Pongpaew Director 12/13 24 Jan 08 � Present
15 Pol. Gen. Ajiravid Subarnbhesaj Director 8/8 12 May 08 - Present
16 Mr. Kanoksakdi Bhinsaeng Director 7/8 12 May 08 - Present
17 Pol. Maj. Gen. Pimol Sinthunava Director 8/8 12 May 08 - Present
18 Pol. Lt. Gen. Somyot Poompanmoung Director 7/8 12 May.08 - Present
19 Mr. Nattachak Pattamasingh Na Ayuthaya Director 8/8 12 May 08 - Present
20 Mr. Chakarn Saengruksawong Director 7/8 12 May 08 - Present
21 Mr. Chanchai Tontisirin Director 7/8 12 May 08 - Present
22 Mr. Praphant Asava-aree Director 12/12 (26 Jan 07 - 24 Jan 08)
(12 May 08 - Present)
Notes: Former Chairman, Former Vice Chairman and Former Directors refer to directors who vacated office on 30 September 2008
12. Committees
The Board of Directors has established committees comprising members with appropriate expertise to
review and scrutinize the works assigned to them to initially ensure their accuracy, clarity and completeness before
referring them to the Board of Directors for approval or ratification, whichever the case may be. Details on the
committees established by the Board of Directors are listed below.
28 Annual Report 2008
12.1 As of 30 September 2008, the Audit Committee comprised 3 independent directors and 2 advisors
whose names are listed below.
No. Name-Surname Position
1. Pol. Gen. Ajiravid Subarnbhesaj Chairman
2. Pol. Maj. Gen. Pimol Sinthunava Member
3. Mr. Chanchai Tontisirin Member
4. Mrs. Leena Charoensri Advisor to the Audit Committee
5. Mr. Chakkrit Parapuntakul Advisor to the Audit Committee
The Audit Committee is responsible mainly for considering and verifying the accuracy and credibility of the
Company�s financial statements to ensure that they meet international standards before submitting them to the Board
of Directors. The Committee reviews and gives recommendations regarding evaluation of the efficiency and
effectiveness of the Company�s internal control system, compliance with laws, rules, and regulations, as well as
ensuring the effectiveness and independence of the Audit Committee�s administrative process. The Committee
places emphasis on transparent guidelines and clear distinction among the Board of Directors, the Internal Audit
Department, the Management, and the External Auditor. Other functions include giving initial approval to the
appointments of the External Auditors and determining his/her remunerations to be proposed to the Board of Directors
and shareholders. In the fiscal year 2008, the meetings of the Audit Committee were regularly held 7 times with 100%
attendance.
12.2 As of 30 September 2008, the Executive and Investment Committee comprised 3 directors whose
names are listed below.
No. Name-Surname Position
1. Mr. Kanoksakdi Bhinsaeng Chairman
2. Pol. Lt. Gen. Somyot Poompanmoung Member
3. Mr. Praphant Asava-aree Member
The Executive and Investment Committee is assigned by the Board of Directors to play a key role in supervising
the Company�s operations to have the efficiency and business strength in line with the policy of the Board of Directors.
The Committee reviews and screen the various matters before presenting them to the Board of Directors, supports
the work of the Management team to achieve the Company�s objectives and goals, and set policies, strategies, and
framework for the Company�s short-term and long-term investments in core and related businesses. Other functions
include reviewing matters requiring approval of the Board of Directors with respect to procurement in the amounts
exceeding the authority of the President & CEO. In addition, the Committee reviews projects involving capital investment
that call for the establishment of investment processes and criteria as well as project financial analysis in accordance
with the Company�s work plans before presenting the matters to the Board of Directors for consideration. In the fiscal
year 2008, the Committee held 7 meetings with 90% attendance.
Annual Report 2008 29
12.3 As of 30 September 2008, the Corporate Governance Committee comprised 3 directors whose
names are listed below.
No. Name-Surname Position
1. Mr. Utid Tamwatin Chairman
2. Pol. Maj. Gen. Pimol Sinthunava Member
3. Mr. Rasda Pongpaew Member
The Corporate Governance Committee has the duty to ensure that the Company has complied with important
elements of the corporate governance process that is effective and in line with requirements of the Stock Exchange
of Thailand. The Committee also makes sure that the Principles of Good Corporate Governance are implemented
with emphasis on continued development and best practice and that evaluations of compliance with the Company�s
policies are conducted periodically. In the fiscal year 2008, the Committee held 5 meetings with 92% attendance.
12.4 As of 30 September 2008, the Risk Management Committee comprised 5 directors whose names
are listed below.
No. Name-Surname Position
1. Mrs. Monta Pranootnorapal Chairperson
2. Pol. Lt. Gen. Somyot Poompanmoung Member
3. Mr. Chakarn Saengruksawong Member
4. Mr. Chanchai Tontisirin Member
5. Mr. Praphant Asava-aree Member
The Risk Management Committee is responsible mainly for overseeing and reviewing the risk management
policy, standard practice, strategies, and overall risk assessment. It also reviews the adequacy of policy on the risk
management system, the system�s efficiency, and compliance with the policy, to ensure that the risk management
strategies are implemented appropriately. In the fiscal year 2008, three meetings were held with 80% attendance.
12.5 As of 30 September 2008, the Nominating Committee comprised 3 directors whose names are
listed below.
No. Name-Surname Position
1. Pol. Maj. Gen. Pimol Sinthunava Chairman
2. Mr. Nattachak Pattamasingh Na Ayuthaya Member
3. Mr. Chakarn Saengruksawong Member
The Nominating Committee consists of members appointed by the Board of Directors to find suitable persons
to be considered for appointments as directors of the Company and affiliated companies and the President & CEO.
The Committee also gives opinions regarding the work management structure of the Board of Directors and other
committees. In the fiscal year 2008 the Nominating Committee held 3 meetings with 100 % attendance.
30 Annual Report 2008
12.6 The Remuneration Committee comprised 3 directors whose names are listed below.
No. Name-Surname Position
1. Mr. Nattachak Pattamasingh Na Ayuthaya Chairman
2. Pol. Gen. Ajiravid Subarnbhesaj Member
3. Mr. Kanoksakdi Bhinsaeng Member
The Remuneration Committee�s main function is to formulate a policy concerning remunerations and other
fringe benefits and to set up a guideline for evaluation of the performance of the Board of Directors, affiliated companies,
and the Company�s executives. The Committee is also required to disclose the policies regarding remunerations and
relevant details and prepare reports in the required format. In the fiscal year 2008 the Remuneration Committee held
4 meetings with 100 % attendance.
The Board of Directors has regularly and continuously performed self-evaluation every year in order to
review the accomplishments as well as problems and obstacles experienced over the year. The results are used for
improvement of work efficiency, in accordance with the Principles of Good Corporate Governance. In 2008, the
average score of all directors was 4.69 out of 5. Risk Management and Internal Control received the highest average
scores of 5 as a result of the Company�s adequate and appropriate risk management system. The Board of Directors�
preparedness for Board meetings, the performance of the Chairman of the Board, the clarity in division of work
among the Board of Directors, the various Committees and the Management, and equitable treatment of shareholders
received the highest average scores in that order.
13. Selection of Directors and Management
The Board of Directors of the Company appoints representatives as Nominating Committee members to find
suitable persons to be appointed as directors and President & CEO on a case by case basis. The Board of Directors
has passed a resolution to grant the right to minority shareholders to nominate a person or persons to the Nominating
Committees for preliminary review before submitting the list of nominee(s) to the Board of Directors for consideration.
The Board proposes the candidates to be selected by the shareholders during the Annual General Shareholders
Meeting. According to the Company�s Articles of Association, the Company�s Board of Directors shall consist of at
least five but not more than eleven directors elected by the Shareholders. The directors shall then elect among
themselves the Chairman of the Board and may elect the Vice Chairman, the President & CEO, and holders of other
positions as they deem appropriate. No less than half of the Company directors shall be domiciled in the Kingdom of
Thailand. Election and appointment of directors shall be carried out by the Shareholders Meeting in accordance with
the following criteria and procedure.
1. Each shareholder shall have one vote for each share held.
2. Each shareholder shall cast all of his/her eligible votes as stipulated in Item 1 to elect one or several
persons as a director or directors but the votes may not be divided among candidates.
3. The candidates shall be elected in descending order of the votes received starting from the person
receiving the highest votes until all the positions of directors are filled, or until the number of directors
to be elected in that Meeting is fulfilled. In case of a tie vote that will result in the number of elected
candidates exceeding the total number of directors or the number of the vacant positions to be filled
in that Meeting, the Chairman shall have the deciding vote.
Annual Report 2008 31
4. Members of the Board of Directors shall have the required qualifications and do not have prohibited
characteristics under the law governing public limited companies.
5. Independent directors shall have all the qualifications as defined by the Company in accordance with
the regulations of the Securities and Exchange Commission (SEC).
A shareholders meeting may pass a resolution to remove any director before the end of the term by a vote of
no less than three fourths of all the shareholders eligible to vote who are present at the meeting, and the number of
shares represented shall be no less than half of the number of shares held by the eligible shareholders present.
In the fiscal year 2008, five members of the Board of Directors represented major shareholders: three from
the Provincial Waterworks Authority, one from Electricity Generating Public Company Limited, and one from the
Industrial Estate Authority of Thailand.
14. Internal Information Control
The Company�s guideline concerning the use of internal information by the Company�s directors, management
and employees are set in the Principles of Good Corporate Governance and can be summarized as follows:
1. Directors, Management, employees, supporting staff, and autsoureed employees have the duty to
accept legal and ethical obligations to safeguard and not to disclose, the Company�s information and
documents that are classified as confidential or trade secrets which will have critical impact on the
Company�s success and stability.
2. The confidential trade information shall be well protected and not leak to outsiders. Internal information
shall be shared and used solely under the designated duties and responsibilities.
3. The release of information to outsiders shall require the approval of the Company�s President & CEO. If
the information is related to joint-venture partners, their approval shall also be required. The functions
responsible for disseminating the information to the public are the Public Affairs section of the Marketing
and Public Affairs Communication Department, and the Investors Relations section of the Corporate
Affairs Department. The Public Affairs officers are also in charge of disseminating news and information
to other employees.
In addition, the Company has informed the Directors and Management of their responsibility to report the
acquisition or sales of the Company�s securities exceeding 5% of the total Company�s sold, and their securities
holding, to the Securities and Exchange Commission in accordance with the prescribed format and procedure.
Such information is also required to be reported to the Board of Directors in every meeting.
15. Relationships with Investors
The Company gives significance to disclosure of accurate, complete and transparent information. Information
is disseminated via various channels of the Stock Exchange of Thailand and the Company�s website. The �Investors
Relations Section� of the Corporate Affair Department, has been assigned to communicate with institutional investors,
shareholders, analysts, and the general public.
For any information and inquiries, investors and concerned parties are invited to use the Company website
(www.eastwater.com) or contact [email protected].
32 Annual Report 2008
The company gives importance to the internal control system, with
emphasis on adequate and appropriate control that contributes to business
efficiency in terms of finance, operations, risk management and monitoring.
The principles and the essence of the assessment of the adequacy of the
internal control system can be viewed from five aspects.
1. Organization and Environment
The Board of Directors plays an important role in defining the vision,
policy and strategies of the Company by setting long-term business plans,
offering opinions, and approving strategies, activities, and annual action
plans. In addition, the Board of Directors has also implemented the
application of Key Performance Indicators to assess the performance in all
functions of the organizations to ensure that performance monitoring and
assessment are carried out fairly, efficiently and systematically in line with
the organization�s goals and objectives.
The policy for internal management focuses on having the
mechanism for checks and balances among the Board of Directors, the
management and shareholders. Members of the Board of Directors include
at least three independent or external directors so that there will be a balance
between members who may have conflict to interest with the Company and
independent or external members. The Company communicates with
investors to regularly disseminate the Company�s information to the public
regularly. Committees have been set up to review and pass a decision on important issues to protect shareholders�
interest. In addition, the Company has implemented the corporate governance of Eastern Water Resources
Development and Management Public Company Limited, the Company Code of Conduct, and Employee�s Business
Ethics, to be observed by its personnel of all levels, with emphasis on honesty and business ethics.
2. Risk Management
The Enterprise Risk Management concept has been applied by conducting risk assessments for various
processes and risk factor analysis. Current control measures include participation of employees from every department
in the Company�s risk assessment and risk management processes on a continuous basis. Risk management action
plans have been drawn up to increase the efficiency of the company�s internal control systems. It is also used to
maintain the risks at an acceptable level that corresponds with the changes in the circumstances and the risk factors
themselves. A specific work unit has been assigned to monitor the implementation of the Risk Management Project,
evaluate the result, and prepare a report thereof to be presented to the Risk Management Committee and the Board
of Directors for review and decision making in order to ensure that the Company�s risk management process is
dynamic, consistent, and uninterrupted.
2008 Assessment of Adequacy of InternalControl Systems
Annual Report 2008 33
3. Control of the Management�s Performance
The scope of the authorities and the amount of money authorized to be spent by the Management have been
clearly defined to be consistent with the principles of good internal control regarding division of duties and verification
of work. Functions involving the authority to approve book-keeping and information are separated from property
management. Moreover, the Company has been granted ISO 9001:2001
and ISO 14001:2004 certification. Work Procedures and Work Instructions
have been developed to be used as references to ensure the standards
of work. Training has been organized so that employees could understand
and perform their work according to the said standards.
In the case of connected transactions between the Company and
its associated companies including companies and parties with common
interest, these items are scrutinized approved accurately, transparently
under the same conditions as those applied to other trade partners. Details
on such transactions are already presented in the Auditor�s Notes to the
Financial Statements.
The Company has continuously and regularly supervised the
operations of its associated companies. Their progress and business
performance has been reported to the Board of Directors by a specific
work unit which has been assigned to follow up on the operations to ensure
that they are consistent with the resolutions of the Board of Directors. In
addition, it coordinates the policies to ensure that every company within
the group is operating its business along the direction that is consistent
with the policies of the Board of Directors. A compliance unit has been
set up to ensure that the Company�s business activities comply with
relevant laws, rules and regulations.
4. Information and Communication System
The Company has provided adequate important information for the Board is decision making. The information
is presented to the Board members in advance to allow adequate time for preliminary review. On the agenda of every
Board meeting and the meeting of sub-committees are details on matters from previous meetings and the resolutions
passed to be used as references, together with related legal requirements (if any), so that the Board will have complete
and comprehensive information for their decision making and can provide recommendation that will lead to ongoing
improvement and development of the Company. Then facts regarding the progress of action taken by the Management
in accordance with comments of various committees will be presented. Such comments include reasons, business
sensitivity analysis, and anticipated obstacles or impact. Recommendations always includes issues for consideration
and/or proposals of options for discussion/consideration. In submitting every minutes of the meeting, the Company
informs individual directors that they can indicate their intention to make amendment to the Minutes within approximately
five days after receiving the minutes.
34 Annual Report 2008
Moreover, the Company has introduced and consistently developed the use of information system and
internal data base, so that employees at all level can have access to information related to their work at an appropriate
level. This is achieved through a well defined policy and the system that clearly spells out the level of accessibility in
order to use such data and information to perform their work.
5. Monitoring System
The Company follows up on the goals indicated in the long-term business plan and the annual action plans.
Measures implemented include the Key Performance Indicators (KPIs) with the progress and result of the performance
regularly reported to the meeting of the Board of Directors every quarter. The objective is to review the matters and
define guidelines for improvement and corrections of any inefficiency to be in line with the changing situations. The
emphasis is on taking timely corrective action.
The Company gives great importance to internal audit, emphasizing the value added for the organization.
Data on internal risk assessment has been used in the risk-based audit planning and a consultant has been employed
for co-sourcing with the Audit Office every year. This is to enable the Board of Directors and the Management to have
confidence in the efficiency and effectiveness of the Company�s internal control system. The accuracy and credibility
of data and information, i.e., accounting information and information used for business operation has been ensured
that they are is in compliance with the law, rules, and regulations relating to the Company. In addition, other performance
monitoring processes are implemented by means of the Company�s Internal Quality and Environment Monitoring
System in accordance with ISO 9001:2000 and ISO 14001:2004.
Based on the key elements of the Assessment of the Adequacy of the Internal Systems as mentioned above,
the Company is confident that its internal control systems are adequate and suitable for its business, contribute to
transparency in work execution and enhance the effectiveness of sustainable business operations.
Annual Report 2008 35
In the 2008 fiscal year, the Audit Committee held seven meetings with the Management of the Company
and its subsidiaries, the Company auditor, and the internal auditor. Inquiries were made and explanations were
satisfactorily given from the parties concerned. Significant details of the Audit Committee performance are given
below.
1. Verification of financial statements and connected transactions
The interim financial statements and the 2008 financial statements were reviewed and verified. Inquiries
were made to the External auditor and the internal auditor and explanations were given by Management. Emphasis
was placed on information disclosure and adequate provisioning for projects implemented in line with the
government policies and the Group�s own projects. In addition, connected transactions in the fiscal year 2008
were reviewed in consideration the price of water sold to the Provincial Waterworks Authority (PWA) and the
Industrial Estate of Thailand (IEAT). Such transactions were presented to the Extraordinary General Meeting of
Shareholders No. 2/2008 on 25 August 2008. The Audit Committee played a role in passing a decision and
giving initial approval as well as suggesting that an independent financial advisor be hired to review and give an
opinion, which would be presented to the Extraordinary General Meeting of Shareholders before entering into
such transactions.
2. Supervision of the internal control system and compliance with relevant law, rules, and regulations
The three-year risk-based internal audit plan (2008 � 2010) and the internal audit plan for the fiscal year 2008
were reviewed and approved. Such plans were applied to all work functions in the companies within the Group.
The result of the appraisal of the efficiency and the effectiveness of the Company�s internal control systems,
which was summarized and presented quarterly to the Audit Committee by the consultant company, was verified.
The Audit Committee also monitored actions taken by the Management to make adjustment and corrections in
line with the recommendations on a quarterly basis. Compliance with requirements, obligations to third parties,
and relevant laws was also monitored.
In addition, the Audit Committee resolved and provided recommendations for the following important matters:
2.1. The progress of important delayed investment projects has been monitored. Assets and inventory should be
managed to be at an appropriate level. The Committee consulted with the Auditor to estimate adequate
provisioning according to accounting standards.
2.2. The Company was advised to set a policy to prohibit entering into agreements that obstruct peace, orderliness
and good moral, or agreements that would lead to unfair trade and instruct every associated company to
follow the same practice.
2.3. The Company was advised to monitor the operations of associated companies to strictly comply with the
law, rules, and regulations. In the event of a violation report all the facts should be done systematically.
Criteria for evaluation should be improved to be transparent and can be dynamically evaluated.
Report of the Audit Committee for the Year 2008
36 Annual Report 2008
2.4. The Company was advised to closely supervise the monetary policy of associated companies with regard to
a policy that would lead to obligations or a decision to use appropriate financial tools. Risks that might affect
the overall capital structure of the Group should be assessed.
3. Supervision of the Internal Audit Department
The action plans, the annual budget, and the man power structure of the Internal Audit Department were
reviewed and approved. Support was given to the Internal Audit Department to be able to perform its work
independently and more efficiently through the restructure of the Audit Office. As a result, approval was granted
for the Internal Audit Department to be divided into two sections, Operational Auditing and Accounting and
Financial Auditing. In 2008, the Committee approved auditing co-sourcing partnership with Deloitte Touche
Tohmatsu Jaiyos Company Limited. This arrangement would enhance experience sharing and report issues
detected from the audit that add value to the Company.
4. Supervision of Company Auditor�s performance
The Audit Committee, in the Meeting No.9/2008, reviewed the selection of the Company Auditor and the
auditing fees. Qualifications of the auditors were checked to ensure compliance with the Notification of the
Office of the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand, and to ascertain
that the auditors do not have any relationship with the Company and its subsidiaries. The Committee then
proposed to the Board of Directors that Mrs. Saifon Inkaew, License No. 4434 or Ms. Rattana Jala, License No.
3734 or Miss Kamoltip Lertwitworathep, License No. 4377 of Ernst & Young Office Limited, the current Company
Auditor be reappointed the Company auditor for the fiscal year 2008. The proposal will be subsequently presented
to the General Shareholders� Meeting for approval.
As Mrs. Saifon Inkaew, License No. 4434, had audited and presented opinions on the Company�s financial
statements for five consecutive years, the Audit Committee proposed to the Board of Directors that in the fiscal
year 2009 (January 2009 � December 2009) the position of the Company Auditor be rotated to Ms. Rattana Jala,
License No. 3734 or Miss Kamoltip Lertwitworathep, License No. 4377, or Mr. Wichart Loketkrawee, License No.
4451.
Annual Report 2008 37
The Auditor�s fees of the Company and it subsidiaries for the fiscal year 2008 to 2009 following negotiations
with the Auditor since 2008 are summarized below.
• Auditor�s fee for the Group�s consolidated financial statements (October 2008 � December 2008) was
1,076,000 Baht. Of this amount, 348,000 Baht was for the fee for the Company (EW).
• Auditor�s fee for the Group�s consolidated financial statements for the fiscal year 2009 (January 2009 �
December 2009) was set as 3,310,000 Baht. Of this amount, 1,110,000 Baht was for the fee for the Company
(EW).
The Audit Committee also looked into the matter concerning the auditor who certifies the Company�s financial
statements, which must be rotated every fifth fiscal year. If reappointed for the fiscal year 2009, the current
Company Auditor will be serving the Company for the fifth consecutive year.
In summary, the Audit Committee has duly performed all of its duties as stated in the Audit Committee�s
Charter, which have been approved by the Board of Directors and comply with the SET�s regulations. The Audit
Committee agrees with the Company Auditor�s opinion that the Company�s financial statements are correct in
accordance with Thailand�s Generally Accepted Accounting Principles and that connected transactions have
been disclosed completely, accurately, and in details. Moreover, the Company has implemented an appropriate
and effective internal audit control system and throughout the fiscal year 2008 no significant issues regarding
failure to comply with relevant regulations, obligations and laws have been found. Improvement has also been
made to in the Company�s operations to ensure consistency and appropriateness to the changing business
environment.
(Pol. Gen. Ajiravid Subarnbhesaj)
Chairman of the Audit Committee
38 Annual Report 2008
The Eastern Water Resources Development and Management PLC gives great importance to good corporate
governance, believing that it is a key element in running the business for the maximum benefits of shareholders. The
Board of Directors recognizes that good corporate governance will contribute to the company�s sustainable growth
and will strengthen all stakeholders� confidence. Such principles are based on �transparency, honesty and
competitiveness� The Company has implemented the Principles of Good Corporate Governance, the Board of Director�
Manual, and the Employees Code of Business Ethics based on the 15 principles of good corporate governance of the
Stock Exchange of Thailand. These principles of good governance have been reviewed to be more appropriate, up
to date, and in compliance with relevant laws and regulations. Details are accessible on the Company�s website.
under the heading �Good Corporate Governance.�
The accomplishments of the Corporate Governance Committee in the fiscal year 2008 (October 2007-
September 2008) may be summarized as follows:
• Revision of the Principles of Good Corporate Governance, by revising the qualifications of independent
directors to be consistent with the change in the criteria stipulated by the Office of Securities and Exchange
Commission.
• Revision of the criteria to allow minority shareholders to propose items to be on the agenda of the meetings
and to nominate candidates for directorship in advance.
Mr. Utid Tamwatin
Chairman of the Corporate Governance Committee
Report from the Corporate Governance Committee
Annual Report 2008 39
The company and its subsidiaries have entered related party transactions with persons subject to conflicts
of interest (as of September 30, 2008) which include water sold to and services provided for major shareholders as
indicated in the Notes to Financial Statements. Details of other related party transactions.
Tab water production and water works system maintenance services for Egcom Tara Co.,Ltd.
(1) Details of related party transactions:
Between Universal Utilities Co., Ltd. (UU), a company�s subsidiary, and Egcom Tara Co., Ltd. The company
and Electricity Generating Public Company Limited (EGCOMP) held 15% shares respectively in Egcom
Tara Co., Ltd. EGCOMP held 17.89% shares in the company as of 14 November 2007.
(2) Nature of related party transactions:
UU provided services to Egcom Tara Co., Ltd., i.e., production of tap water and tap water production
system and pipeline maintenance for Lak Muang and Ratchaburi and Samut Songkhram Provinces.
Service fees were charged according to a contract awarded by open bidding.
(3) Value of related party transactions:
In 2007 UU received service fees of 29.75 million bath from Egcom Tara Co., Ltd.
Trend or Policy Regarding Future Connected Transactions:
As for future connected transactions, the company will ensure that transactions are at fair prices according
to normal market conditions. The company will abide by laws governing securities and securities exchange, regulations,
notifications, orders or requirements set forth by the Securities Exchange of Thailand, including those concerning
information disclosure of connections and acquisitions or sales of the company�s significant assets.
In the event future connected transactions with persons subject to conflicts of interests or with stakeholders,
the company will disclose the information in the Notes to Financial Statements that are audited by the company�s
auditor.
Related Party Transactions
40 Annual Report 2008
The Board of Directors had financial statements prepared to show the financial status and business
performance of the company in 2008 in accordance with the Public Limited Company Act, B.E. 2535 (1992). The
Company�s Directors acknowledge that in their capacity as directors of a listed company in the Stock Exchange of
Thailand, they have responsibility for the Company�s financial statements including the financial information appearing
in the 2008 Annual Report.
In this regard, the Board of Directors has appoints the Audit Committee consisting of independent, non-
executive directors to be in charge of the quality of financial statements and verification of the effectiveness of the
internal control systems of the Company and its subsidiaries, to be reasonably confident that financial and accounting
information is recorded accurately and completely and to ensure that assets have been maintained. The financial
statements also serve as guidelines for the Company and its subsidiaries, providing them with information that can
prevent dishonesty or significant irregularities. The Audit Committee�s opinions for the fiscal year 2008 are presented
in the Report of the Audit Committee in these Annual Report.
In this light, the Board of Directors is of the opinion that the Company has prudently and rationally exercised
its judgment and has used the best forecasting method in preparing the financial statements, under the accounting
policy that is appropriate, consistent, and in compliance with Thailand�s generally accepted accounting standards.
Important information has also been adequately disclosed in the Notes to Financial Statements.
(Utid Tamwatin) (Praphant Asava-Aree)
Chairman of the Board of Directors President and CEO
Report on the Board of Directors’ Responsibilitytowards the Financial Statements
Annual Report 2008 41
To The Shareholders of Eastern Water Resources Development and Management Public Company Limited
I have audited the accompanying consolidated balance sheets of Eastern Water Resources Development and
Management Public Company Limited and its subsidiaries as at 30 September 2008 and 2007, the related consolidated
statements of income, changes in shareholders� equity and cash flows for the years then ended, and the separate
financial statements of Eastern Water Resources Development and Management Public Company Limited for the
same periods. These financial statements are the responsibility of the management of the Company and its subsidiaries
as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. I believe that my audits
provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position
of Eastern Water Resources Development and Management Public Company Limited and its subsidiaries and of
Eastern Water Resources Development and Management Public Company Limited as at 30 September 2008 and
2007 and the results of their operations and cash flows for the years then ended in accordance with generally
accepted accounting principles.
Without qualifying my opinion on the aforementioned financial statements, I draw attention to the matter as described
in Note 16 to the financial statements regarding a pipeline connecting project, which is in compliance with resolution
of the Cabinet-Council that the Company has been assigned to operate for construction and make advance payments
on behalf of the relevant government unit, which have been accumulated up to 30 September 2008 totaling Baht 642
million and such relevant government unit will repay to the Company by gradually offsetting the charges on raw water
to be purchased by the Company from it every year, but presently such government unit has yet to determine the
amount to be withheld from the volumes of raw water purchased every year. However, the Company�s management
believes that there will be no loss to the Company by entering into such contracts and making such advance payments.
In addition, the Company�s management also believes that such project is beneficial and should the government
units have no intention to operate the project by themselves, the Company is able to invest in this project by itself as
the Company�s other projects in order to make them beneficial. The Company is in the process of negotiating with the
relevant units and the outcome of such negotiation and other related matters have yet been finalised on the authorisation
date of these financial statements under report.
Saifon Inkaew
Certified Public Accountant (Thailand) No. 4434
Ernst & Young Office Limited
Bangkok: 20 November 2008
Report of Independent Auditor
42 Annual Report 2008
Balance SheetsEastern Water Resources Development and Management Public Company Limited and its subsidiaries
As at 30 September 2008 and 2007
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2008 2007 2008 2007
Assets
Current assets
Cash and cash equivalents 8 170,193,618 337,436,339 128,549,012 224,235,214
Securities purchased under resale agreement 9 85,000,000 - 85,000,000 -
Current investments 10 143,521,703 3,250,336 143,521,703 3,250,336
Trade accounts receivable 11
Related parties 7.2 168,910,731 163,245,596 114,755,884 95,155,871
Unrelated parties - net 87,439,397 151,799,676 62,855,553 64,811,820
Trade accounts receivable - net 256,350,128 315,045,272 177,611,437 159,967,691
Service income receivable - related party 7.2
Billed 16,961,198 23,753,454 - -
Unbilled 10,263,074 3,043,935 - -
Total service income receivable - related party 27,224,272 26,797,389 - -
Short-term loan to an unrelated party - net 7.4.2 8,800,000 - 8,800,000 -
Inventories - net 12 18,200,035 55,196,602 8,228,361 30,740,795
Other current assets
Dividend receivable from a related party 7.2 - - 28,050,000 70,023,000
Other receivables - related parties 7.2 10,919 3,982,630 6,866,856 15,412,225
Input taxes awaiting refund 2,280,821 4,017,864 - -
others 43,094,130 63,667,171 33,475,872 36,654,210
Total other current assets 45,385,870 71,667,665 68,392,728 122,089,435
Total current assets 754,675,626 809,393,603 620,103,241 540,283,471
Non-current assets
Restricted bank deposits 13 9,076,000 9,076,000 9,076,000 9,076,000
Investments in subsidiaries and a joint venture - net 14 - 490,000 514,999,930 561,707,161
Long-term investments 10 85,477,500 95,387,500 85,387,500 95,387,500
Long-term loans to related parties 7.2, 7.3 - - 300,000,000 318,000,000
Other receivable 16 642,199,200 642,199,200 642,199,200 642,199,200
Property, plant and equipment - net 17 6,758,953,129 7,313,725,738 6,575,139,991 6,722,863,287
Assets under concession contracts - net 18 382,006,132 384,103,506 - -
Deferred concession rights acquisition costs - net 19 521,515,116 376,247,947 - -
Goodwill - net 20 162,700,919 171,049,657 - -
Other non-current assets
Advance payments for pipeline installation 4,544,127 11,703,806 4,544,127 11,703,806
Others 9,779,770 9,586,319 4,698,585 4,497,432
Total other non-current assets 14,323,897 21,290,125 9,242,712 16,201,238
Total non-current assets 8,576,251,893 9,013,569,673 8,136,045,333 8,365,434,386
Total assets 9,330,927,519 9,822,963,276 8,756,148,574 8,905,717,857
The accompanying notes are an integral part of the financial statements.
Annual Report 2008 43
Balance Sheets (Continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries
As at 30 September 2008 and 2007
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2008 2007 2008 2007
Liabilities and shareholders� equity
Current liabilities
Bank overdrafts and short-term loans from financial
institution 21 72,009,842 160,000,000 20,009,842 100,000,000
Trade accounts payable
Related parties 7.2 4,114,414 6,300,774 6,083,125 5,742,808
Unrelated parties 68,972,969 136,297,106 8,613,827 8,624,262
Total trade accounts payable 73,087,383 142,597,880 14,696,952 14,367,070
Current portion of long-term liabilities under finance lease
agreements 3,221,196 928,934 2,265,636 -
Current portion of long-term loans from financial institutions 22 420,716,000 421,287,000 375,000,000 150,000,000
Debentures 23 - 2,500,000,000 - 2,500,000,000
Other current liabilities
Accrued expenses 183,691,888 151,921,118 134,714,408 105,017,615
Payable for purchase of fixed assets 16,294,043 107,784,699 10,039,324 85,747,457
Advances received 8,592,927 10,361,210 - -
Accrued interest expenses 801,554 51,872,261 339,041 33,420,739
Corporate income tax payable 92,917,209 70,692,265 80,304,877 56,215,302
Others - related parties 7.2 5,114,994 20,135,612 44,571,522 26,978,863
Total other current liabilities 307,412,615 412,767,165 269,969,172 307,379,976
Total current liabilities 876,447,036 3,637,580,979 681,941,602 3,071,747,046
Non-current liabilities
Long-term loan from a related party 7.2, 7.3 - 12,000,000 - -
Long-term liabilities under finance lease agreements
- net of current portion 5,022,079 2,349,054 3,716,244 -
Long-term loans from financial institutions - net of
current portion 22 2,434,997,000 1,439,013,000 2,275,000,000 1,310,000,000
Retentions payable 37,990,511 22,163,005 24,495,928 8,199,595
Rental guarantees received from related parties 7.2 - - 761,238 -
Total non-current liabilities 2,478,009,590 1,475,525,059 2,303,973,410 1,318,199,595
Total liabilities 3,354,456,626 5,113,106,038 2,985,915,012 4,389,946,641
The accompanying notes are an integral part of the financial statements.
44 Annual Report 2008
Eastern Water Resources Development and Management Public Company Limited and its subsidiaries
As at 30 September 2008 and 2007
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2008 2007 2008 2007
Shareholders� equity
Share capital
Registered
1,663,725,149 ordinary shares of Baht 1 each
(2007: 1,665,000,000 ordinary shares of Baht 1 each 24 1,663,725,149 1,665,000,000 1,663,725,149 1,665,000,000
Issued and fully paid-up
1,663,725,149 ordinary shares of Baht 1 each
(2007: 1,346,394,130 ordinary shares of Baht 1 each) 24 1,663,725,149 1,346,394,130 1,663,725,149 1,346,394,130
Share subscription received in advance - 113,395,120 - 113,395,120
Share premium 24 2,138,522,279 1,187,358,422 2,138,522,279 1,187,358,422
Assets transferred from customers 26 46,201,078 49,598,601 46,201,078 49,598,601
Retained earnings
Appropriated - statutory reserve 27 166,500,000 166,500,000 166,500,000 166,500,000
Unappropriated 1,959,392,299 1,803,818,666 1,755,285,056 1,652,524,943
Equity attributable to the Company�s shareholders 5,974,340,805 4,667,064,939 5,770,233,562 4,515,771,216
Minority interests - equity attributable to minority
shareholders of subsidiaries 2,130,088 42,792,299 - -
Total shareholders� equity 5,976,470,893 4,709,857,238 5,770,233,562 4,515,771,216
Total liabilities and shareholders� equity 9,330,927,519 9,822,963,276 8,756,148,574 8,905,717,857
The accompanying notes are an integral part of the financial statements.
Balance Sheets (Continued)
.........................................Chairman ............................................President and CEO
(Utid Tamwatin) (Praphant Asava-Aree)
Annual Report 2008 45
Statements of incomeEastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2008 2007 2008 2007
Revenues
Sales - raw water 7.1 1,672,600,765 1,537,888,213 1,752,720,341 1,603,237,410
Sales - others 7.1 563,110,431 555,391,770 188,014,207 172,384,776
Total sales 2,235,711,196 2,093,279,983 1,940,734,548 1,775,622,186
Service income 7.1 143,215,424 308,368,889 17,120,727 4,901,714
Interest and dividend income 7.1 44,788,510 8,956,474 88,769,730 97,888,571
Gain on disposal of investment in a subsidiary 15 3,478,650 - - -
Other income 7.1 10,059,514 19,527,134 3,847,012 4,207,957
Total revenues 2,437,253,294 2,430,132,480 2,050,472,017 1,882,620,428
Expenses
Costs of sales - raw water 712,598,816 597,441,132 714,482,327 604,786,925
Costs of sales - others 263,905,308 315,798,791 186,267,972 168,431,747
Total costs of sales 7.1 976,504,124 913,239,923 900,750,299 773,218,672
Costs of services 152,938,780 295,306,454 18,036,144 4,840,252
Selling, servicing and administrative expenses 7.1 335,112,698 346,151,757 233,166,831 158,353,556
Expenses for development of life quality and environment 17,309,812 10,959,526 16,669,405 8,819,948
Directors� remuneration 29 36,142,884 38,261,183 23,050,080 24,878,488
Losses on impairment and diminution in value of
assets and provision for doubtful accounts 35,770,685 63,573,411 34,344,932 48,130,844
Loss on disposals of investments 15 - 8,112,348 16,707,231 8,112,348
Losses on impairment of investments in subsidiaries - - 18,000,000 91,000,000
Total expenses 1,553,778,983 1,675,604,602 1,260,724,922 1,117,354,108
Earnings before interest expenses and income tax 883,474,311 754,527,878 789,747,095 765,266,320
Interest expenses 7.1 (165,935,810) (192,769,317) (135,437,159) (156,251,316)
Income tax 32 (180,812,542) (217,792,379) (135,632,286) (176,286,013)
Earnings before minority interests 536,725,959 343,966,182 518,677,650 432,728,991
Loss in respect of minority shareholders of subsidiaries 34,765,211 96,714,961 - -
Net income 571,491,170 440,681,143 518,677,650 432,728,991
Earnings per share 33
Basic earnings per share
Net income 0.35 0.33 0.32 0.33
Diluted earnings per share
Net income 0.35 0.31 0.32 0.31
The accompanying notes are an integral part of the financial statements.
46 Annual Report 2008
(Unit: Baht)
Consolidated financial statements
Minority interests-
Share Assets equity attributable
Issued and subscription transferred Retained earnings to minority
fully paid-up received in Share from Appropriated - shareholders
Note share capital advance premium customers statutory reserve Unappropriated of subsidiaries Total
Balance as at 30 September 2006 1,323,503,380 590,780 1,123,429,772 53,043,276 166,500,000 1,694,438,196 24,651,278 4,386,156,682
Amortisation of assets transferred from customers - - - (3,444,675) - - - (3,444,675)
Increase in share capital from exercised warrants 22,890,750 - 63,928,650 - - - - 86,819,400
Share subscription received in advance
as a result of warrant exercise - 112,804,340 - - - - - 112,804,340
Increased share capital in respect of
minority shareholders of a subsidiary - - - - - - 115,000,070 115,000,070
Dividends paid 24 - - - - - (331,300,673) (144,088) (331,444,761)
Net income - - - - - 440,681,143 (96,714,961) 343,966,182
Balance as at 30 September 2007 1,346,394,130 113,395,120 1,187,358,422 49,598,601 166,500,000 1,803,818,666 42,792,299 4,709,857,238
Amortisation of assets transferred from customers - - - (3,397,523) - - - (3,397,523)
Increase in share capital from exercised warrants 317,331,019 - 951,163,857 - - - - 1,268,494,876
Share subscription received in advance
as a result of warrant exercise - (113,395,120) - - - - - (113,395,120)
Dividends paid 24 - - - - - (415,917,537) (140,015) (416,057,552)
Net income - - - - - 571,491,170 (34,765,211) 536,725,959
Decrease in minority interest of a subsidiary - - - - - - (5,756,985) (5,756,985)
Balance as at 30 September 2008 1,663,725,149 - 2,138,522,279 46,201,078 166,500,000 1,959,392,299 2,130,088 5,976,470,893
The accompanying notes are an integral part of the financial statements.
Statements of changes in shareholders’ equityEastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
Annual Report 2008 47
(Unit: Baht)
Separate financial statements
Issued and Share subscription Assets Retained earnings
fully paid-up received in Share transferred Appropriated -
Note share capital advance premium from customers statutory reserve Unappropriated Total
Balance as at 30 September 2006 1,323,503,380 590,780 1,123,429,772 53,043,276 166,500,000 1,551,096,625 4,218,163,833
Amortisation of assets transferred from customers - - - (3,444,675) - - (3,444,675)
Increase in share capital from exercised warrants 22,890,750 - 63,928,650 - - - 86,819,400
Share subscription received in advance
as a result of warrant exercise - 112,804,340 - - - - 112,804,340
Dividends paid 24 - - - - - (331,300,673) (331,300,673)
Net income - - - - - 432,728,991 432,728,991
Balance as at 30 September 2007 1,346,394,130 113,395,120 1,187,358,422 49,598,601 166,500,000 1,652,524,943 4,515,771,216
Amortisation of assets transferred from customers - - - (3,397,523) - - (3,397,523)
Increase in share capital from exercised warrants 317,331,019 - 951,163,857 - - - 1,268,494,876
Share subscription received in advance
as a result of warrant exercise - (113,395,120) - - - - (113,395,120)
Dividends paid 24 - - - - - (415,917,537) (415,917,537)
Net income - - - - - 518,677,650 518,677,650
Balance as at 30 September 2008 1,663,725,149 - 2,138,522,279 46,201,078 166,500,000 1,755,285,056 5,770,233,562
The accompanying notes are an integral part of the financial statements.
Statements of changes in shareholders’ equity (continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
48 Annual Report 2008
(Unit: Baht)
Consolidated financial statements Separate financial statements
2008 2007 2008 2007
Cash flows from operating activities
Net income 571,491,170 440,681,143 518,677,650 432,728,991
Adjustments to reconcile net income to
net cash provided by (paid from) operating activitie:
Loss in respect of minority shareholders of subsidiaries (34,765,211) (96,714,961) - -
Loss on impairment of investment in a subsidiary - - 18,000,000 91,000,000
(Gain) loss on disposal of investment in a subsidiary (3,478,650) - 16,707,231 -
Losses on impairment of fixed assets 236,021 26,000,000 - -
Losses on impairment of other assets 1,592,215 - 1,192,148 -
Losses on diminution in value of inventories 20,980,272 63,573,412 20,190,607 48,130,844
Provision for doubtful accounts 14,277,653 4,845,409 12,962,177 -
Depreciation 292,951,074 270,338,378 246,770,158 194,495,171
Amortisation of assets under concession contracts 24,574,830 20,306,829 - -
Amortisation of deferred concession rights acquisition costs 14,509,565 9,062,343 - -
Amortisation of deferred debenture underwriting expenses - 4,598,951 - 4,598,951
Amortisation of assets transferred from customers (3,397,523) (3,444,675) (3,397,523) (3,444,675)
(Gains) losses on disposals of fixed assets 1,982,528 2,745,118 - (73,959)
Losses on fixed assets written off 11,488,487 21,427,616 11,077,943 20,928,019
Losses on assets under concession contracts written off - 19,354,178 - -
Losses on liquidation of a subsidiary - - - 8,112,348
Amortisation of goodwill 8,348,738 8,348,776 - -
Dividend income (40,171,592) - (68,221,592) -
Income from operating activities before changes in
operating assets and liabilities 880,619,577 791,122,517 773,958,799 796,475,690
(Increase) decrease in operating assets
Trade accounts receivable 4,194,204 129,384,429 (17,643,746) (14,716,645)
Service income receivable - related party (426,883) 1,123,648 - -
Short-term loans to related parties - - - 35,219,159
Inventories 602,744 5,877,740 2,321,827 (119,583)
Input taxes awaiting refund 1,737,043 17,597,663 - 9,295,614
Other current assets 5,198,669 (16,670,357) (9,109,798) (64,261,169)
Other receivables - related parties (14,241,010) (57,340,800) 8,545,369 (57,340,800)
Other non-current assets 762,187 18,982,714 641,590 (1,080,861)
Increase (decrease) in operating liabilities
Trade accounts payable (27,723,905) (102,001,145) 329,882 (3,303,012)
Accrued expenses 43,301,919 13,279,971 35,678,673 28,393,598
Accrued interest expenses (10,734,383) 15,226,878 (33,081,698) (1,469,795)
Corporate income tax payable 22,224,944 (38,256,471) 24,089,575 (42,221,912)
Other current liabilities - related parties 6,107,865 7,538,657 17,592,659 11,560,353
Other non-current liabilities 15,827,506 (2,980,388) 17,057,571 (5,791,579)
Net cash provided by operating activities 927,450,477 782,885,056 820,380,703 690,639,058
The accompanying notes are an integral part of the financial statements.
Statements of cash flowsEastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
Annual Report 2008 49
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2008 2007 2008 2007
Cash flows from investing activities
Securities purchased under resale agreement (85,000,000) - (85,000,000) -
Increase in current investments (130,271,367) (264,391) (130,271,367) (412,708)
Decrease in restricted bank deposits - 2,533,624 - 80,000
Increase in long-term loan to related parties - - - (55,110,000)
Proceeds from repayment of long-term loans to related parties - - - 100,000,000
Proceeds from repayment of long term loan to an unrelated party 200,000 - 200,000 -
Proceeds from disposal of investment in a subsidiary 12,000,000 - 12,000,000 -
Cash paid for investment in subsidiaries 14.2 - - - (149,999,930)
Dividend received from a subsidiary - - 70,023,000 -
Dividend received from a related party 40,171,592 - 40,171,592 -
Decrease in advance payments for pipeline installation 81,427 45,736,004 81,427 45,736,004
Increase in investment in a joint venture - (490,000) - -
Capital returned form a joint venture 400,000 - - -
Increase in assets under concession contracts (22,477,457) (83,420,625) - -
Increase in deferred concession rights acquisition costs (155,512,898) (88,801,508) - -
Cash received from liquidation of a subsidiary - - - 1,500,000
Proceeds from disposals of fixed assets 12,322,234 4,788,505 - 383,182
Proceeds from disposals of other assets 156,000 - 156,000 -
Purchases of fixed assets (197,446,449) (616,533,506) (172,619,618) (517,319,666)
Net cash used in investing activities (525,376,918) (736,451,897) (265,258,966) (575,143,118)
Cash flows from financing activities
Increase in bank overdrafts 20,009,842 - 20,009,842 -
Repayment of short-term loans from financial institutions (2,600,000,000) (120,000,000) (2,600,000,000) (120,000,000)
Cash receipt from short-term loans from financial institutions 2,552,000,000 220,000,000 2,500,000,000 220,000,000
Repayment made on debentures (2,500,000,000) - (2,500,000,000) -
Cash receipt from long-term loans from financial institutions 1,576,700,000 371,300,000 1,500,000,000 250,000,000
Repayment of long-term loans from financial institutions (344,287,000) (332,000,000) (310,000,000) (315,000,000)
Cash receipt from long-term loan from a related party - 12,000,000 - -
Cash receipt for increased capital in respect of
minority shareholders of a subsidiary - 70 - -
Share subscription received in advance - 113,395,120 - 113,395,120
Increase in share capital from excercised warrants 23 1,155,099,756 86,228,620 1,155,099,756 86,228,620
Dividends paid 27 (416,057,551) (331,444,761) (415,917,537) (331,300,673)
Net cash provided by (used in) financing activities (556,534,953) 19,479,049 (650,807,939) (96,676,933)
Net increase (decrease) in cash and cash equivalents (154,461,394) 65,912,208 (95,686,202) 18,819,007
Cash and cash equivalents at beginning of the years 337,436,339 271,524,131 224,235,214 205,416,207
Less: Cash and cash equivalents of the disposed subsidiary
on the disposal date (12,781,327) - - -
Cash and cash equivalents at ending of the years 170,193,618 337,436,339 128,549,012 224,235,214
The accompanying notes are an integral part of the financial statements.
Statements of cash flows (continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
50 Annual Report 2008
(Unit: Baht)
Consolidated financial statements Separate financial statements
2008 2007 2008 2007
Supplemental cash flow information
Cash paid during the years for:
Interest expenses 190,228,081 248,392,410 175,104,098 217,934,049
Income tax 158,721,094 256,051,868 111,542,710 218,507,926
Non-cash related transactions:
Purchases of fixed assets on credit 16,294,043 107,784,699 10,039,324 85,747,457
Reclassification from long-term investments to
shot-term investments 10,000,000 - 10,000,000 -
Purchases of fixed assets under financial lease agreements 8,243,275 249,129 5,981,880 -
Assets received in settlement of short-term loans to
a related party - - - 78,130,841
Convertion of debt to equity for capital increased in respect of
minoirty shareholders of a subsidiary - 115,000,000 - -
The accompanying notes are an integral part of the financial statements.
Statements of cash flows (continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
Annual Report 2008 51
1. General information
Eastern Water Resources Development and Management Public Company Limited (�the Company�) is a public
limited company incorporated and domiciled in Thailand. The major shareholder of the Company is the Provincial
Waterworks Authority. The Company is principally engaged in the businesses of (a) development and
management of the major water distribution pipeline systems in the eastern seaboard areas of Thailand and
(b) procurement of raw water from government agency sources for commercial distribution to end users.
According to the contract dated 26 December 1993 between the Company and the Ministry of Finance, the
Company is privileged to manage the major water distribution pipeline systems in such areas for the period of
30 years. Whereby, the Company, in return, is required to provide the Ministry of Finance with the benefits
specified in the agreement. The registered address of the Company is located at 23rd - 26th Floors, East Water
Building, No. 1 Soi Vipavadeerangsit 5, Vipavadeerangsit Road, Jomphol Sub-district, Chatujak District, Bangkok.
On 6 March 2008, the Company was approved by the Chief Accounts Inspector of Department of Business
Development with respect to the change in its fiscal year end from 30 September to 31 December, and on 9
June 2008 it was also approved by the Revenue Department with the effect from the fiscal period ending 31
December 2008 onwards.
2. Basis for preparation of the financial statements
The financial statements in Thai language have been prepared in accordance with accounting standards
enunciated under the Accounting Profession Act B.E. 2547. The presentation of the financial statements has
been made in compliance with the stipulations of the Notification of the Department of Business Development
dated 14 September 2001, issued under the Accounting Act B.E. 2543.
The financial statements in Thai language are the official statutory financial statements of the Company. The
financial statements in English language have been translated from the official statutory financial statements.
The financial statements have been prepared on a historical cost basis except where otherwise disclosed in
Note 6 to the financial statements regarding significant accounting policies.
3. Basis of consolidation
These consolidated financial statements include the financial statements for the years ended 30 September
2008 and 2007 of Eastern Water Resources Development and Management Public Company Limited and the
following subsidiaries, except for the exclusion of balance sheet as at 30 September 2008 of Eastern Hobas
Pipes Company Limited from the consolidated balance sheet and the inclusion of the statement of income of
such company for the period ended only up to 31 March 2008 in the consolidated statement of income, since
the Company disposed investment in that company on 31 March 2008, as described in Note 15 to the financial
statements.
Notes to financial statementsEastern Water Resources Development and Management Public Company Limited and its subsidiaries
For the years ended 30 September 2008 and 2007
52 Annual Report 2008
Percentage of shares
held by the Company
Country of Paid up share capital or its subsidiary
Subsidiaries incorporation Nature of business 2008 2007 2008 2007
Million Million Percent Percent
Baht Baht
Subsidiaries held directly by the Company
Universal Utilities Thailand Production and supply of tap 510 510 100 100
Company Limited water, waste water treatment
and sale of related tools,
equipment and chemical
products, and investment in
three tap water supply
companies
Eastern Hobas Pipes Thailand Manufacture and sale of water - 480 - 50
Company Limited distribution pipes
Water Trades and Thailand Sale of water vending machines 5 5 100 100
Services Company Limited and chemical for producing tap
water
Subsidiaries held by Universal Utilities Company Limited
Chachoengsao Water Thailand Production and supply of tap water 100 100 99 99
Supply Company Limited
Bangpakong Water Thailand Production and supply of tap water 40 40 99 99
Supply Company Limited
Nakornsawan Water Thailand Production and supply of tap water 40 40 100 100
Supply Company Limited
Material balances and transactions between the Company and its subsidiaries, have been eliminated from the
consolidated financial statements. Investments in the subsidiaries as recorded in the Company�s books of
account are eliminated against the equity of the subsidiaries. The resultant differences are amortised over a
period of 27 years commencing as from the date of acquisition of shares in the subsidiaries.
4. Adoption of new accounting standards
The Federation of Accounting Professions has issued Notifications No. 9/2550, 38/2550 and 62/2550 regarding
Thai Accounting Standards (�TAS�). The Notifications mandate the use of the following new Accounting
standards.
4.1 Thai Accounting Standards which are effective for the current year
TAS 44 (revised 2007) Consolidated Financial Statements and Separate Financial Statements
TAS 45 (revised 2007) Investments in Associates
TAS 46 (revised 2007) Interests in Joint Ventures
These accounting standards become effective for the financial statements for fiscal years beginning on or
after 1 January 2007. However, during the first quarter 2007, the Company changed its accounting policy for
recording investments in subsidiaries in the separate financial statements in order to comply with the revised
Thai Accounting Standards No. 44 as described in Note 5 to the financial statements.
Annual Report 2008 53
4.2 Thai Accounting Standards which are not effective for the current year
TAS 25 (revised 2007) Cash Flow Statements
TAS 29 (revised 2007) Leases
TAS 31 (revised 2007) Inventories
TAS 33 (revised 2007) Borrowing Costs
TAS 35 (revised 2007) Presentation of Financial Statements
TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors
TAS 41 (revised 2007) Interim Financial Reporting
TAS 43 (revised 2007) Business Combinations
TAS 49 (revised 2007) Construction Contracts
TAS 51 Intangible Assets
These accounting standards will become effective for the financial statements for fiscal years beginning on or
after 1 January 2008. The Company�s management has assessed the effect of these revised accounting
standards and believes that they will not have any significant impact on the financial statements for the year in
which they are initially applied.
5. Change in accounting policy for recording investments in subsidiaries in the separate financial statements
In 2007, the Company changed its accounting policy for recording investments in subsidiaries in the separate
financial statements from the equity method to the cost method, in compliance with Accounting Standard No.
44 (Revised 2007) regarding �Consolidated Financial Statements and Separate Financial Statements�, under
which investments in subsidiaries, jointly controlled entities and associates are to be presented in the separate
financial statements under the cost method. In this regard, the Company has restated the previous period�s
separate financial statements as though the investments in the subsidiaries had originally been recorded
using the cost method. The change had the effect on net income in the separate statement of income for the
year ended 30 September 2007 by a decrease in net income of Baht 8 million or Baht 0.01 per share. The
cumulative effect of the change in accounting policy was presented under the heading of �Cumulative effect of
the change in accounting policy for investments in subsidiaries� in the separate statement of changes in
shareholders� equity. Such change in accounting policy affects only the accounts related to investments in
subsidiaries in the Company�s separate financial statements, with no effect to the consolidated financial
statements.
6. Significant accounting policies
Significant accounting policies adopted by the Company and its subsidiaries are summarised below.
6.1 Revenue recognition
(a) Sales
Sales of goods are recognised as revenue when significant risks and reward of ownership of goods
have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied
after deducting goods returns and discounts.
54 Annual Report 2008
(b) Service income
Service income is recognised by the amount excluding value added tax when service has been rendered
with reference to the stage of completion.
(c) Income from pipeline installation project and water loss reduction project
Income from water pipeline installation project and water loss reduction project are recognised as
revenue under the percentage of completion method. The expected loss on unprofitable contracts is
recognised as soon as such loss can be foreseen.
(d) Interest and dividend income
Interest income is recognised on an accrual basis. Dividend income is recognised when rights to receive
dividends are established.
6.2 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, cash at banks, and all highly liquid investments with an
original maturity of three months or less and not subject to withdrawal restrictions.
6.3 Securities purchased under resale agreement
The Company enters into agreements to purchase securities under condition to resell at certain dates in the
future at fixed prices. Amounts paid for securities purchased subject to a resale commitment are presented as
assets under the caption of �Securities purchased under resale agreements� in the balance sheet. The
differences between the purchase and sale considerations is recognised as interest income on an accrual
basis over the agreement periods.
6.4 Trade accounts receivable and allowance for doubtful accounts
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided
for the estimated losses that may be incurred in collection of receivables, which is generally based on collection
experience and analysis of debtor aging.
6.5 Service income receivable - unbilled
The Company and its subsidiaries record revenue from pipeline installation project and water loss reduction
project that has been recognised but not yet billed to the customers, being the difference between the amount
of service income recognised under a percentage of completion method and the amount of service income for
which customers have already been invoiced, under the caption of �Service income receivable � unbilled�,
which has been shown as current assets in the balance sheets
6.6 Inventories
Inventories are valued at the lower of cost and net realisable value. Inventory costs for each category and
product type are determined as follows:
Annual Report 2008 55
Product types
Inventory categories Water vending machines Water distribution pipelines
Finished goods Specific identification method Weighted average method
Raw material and supplies First-in, first-out method Weighted average method
Provision for diminution in value of inventories is set up for obsolete, slow-moving or deteriorated inventories.
6.7 Investments
Investments in subsidiaries in the separate financial statements are accounted for under the cost method and
less allowance for impairment (if any).
Investments in held-to-maturity debt securities, classified as current investments or long-term investment in
accordance with their remaining periods to maturity, are determined at amortised cost less allowance for
impairment (if any). The premium/discount on debt securities is amortised using the straight-line method with
the amortised amount included in statements of income.
Investments in non-marketable equity securities held as general investments are determined at costs less
allowance for impairment (if any).
Loss on impairment (if any) of investments is included in the statements of income.
6.8 Property, plant and equipment and depreciation
Land is stated at cost less allowance for impairment (if any). Plant and equipment are stated at cost less
accumulated depreciation and allowance for impairment (if any).
Depreciation of plant and equipment are computed using the straight-line method over their estimated useful
lives (except for water distribution pipelines in Chachoengsao, Bangpakong-Chonburi, Sriracha, Bangpra,
Rayong-Mabkha and Nakhornnuengkhet which are depreciated by the units of production method). Estimated
useful lives are as follows:
Pumping plant 33 years
Other buildings 15, 20, 25 years
Land, building and leasehold improvements 5, 10, 15, 20 years
Machinery and equipment (Except for pipelines in Chachoengsao,
Bangpakong-Chonburi, Sriracha, Bangpra, Rayong-Mabkha
and Nakhornnuengkhet, which are depreciated by the units of
production method based on the capacity of assets
over a 30-year period) 5, 10, 20, 25 years
Office equipment 3, 5, 10 years
Vehicles 5 years
No depreciation is provided for land and construction in progress.
Depreciation is included in statements of income.
56 Annual Report 2008
6.9 Assets under concession contracts and amortisation
Assets under concession contracts are stated at cost less accumulated amortisation and allowance for
impairment (if any). Amortisation of assets under concession contracts, which has been computed using the
straight-line method over the concession period of 15, 20 and 25 years, has been included in statements of
income.
6.10 Deferred concession rights acquisition costs and amortisation
Concession rights acquisition costs consist of expenses incurred directly in relation to obtaining the concession
contracts from the Provincial Waterworks Authority. Deferred concession rights acquisition costs are stated at
cost less accumulated amortization and allowance for impairment (if any). Amortisation of deferred concession
rights acquisition costs, which has been computed using the straight-line method over the concession periods
of 27 and 30 years as the case may be, has been included in statements of income.
6.11 Capitalisation of borrowing as cost of assets
Borrowing costs directly related to the acquisition of fixed assets are capitalised as part of the cost of the fixed
assets, until the assets are ready for use.
6.12 Goodwill and amortisation
Goodwill presented as an asset in the consolidated balance sheets is the excess of the acquisition cost over
the fair value of the attributable portion of the net asset value of the acquired subsidiary as at the acquisition
date. Goodwill is stated at cost less accumulated amortisation and allowance for impairment (if any) and is
amortised using the straight-line method over a period of 27 years, being the concession period awarded to
the subsidiaries to carry out their business operation. The carrying amount of goodwill is reviewed annually
and written down when there is an impairment.
6.13 Impairment of assets
The Company and its subsidiaries assess at each reporting date whether there is an indication that an asset
may be impaired. If any such indication exists, the Company and its subsidiaries makes an estimate of the
asset�s recoverable amount. Where the carrying amount of the asset exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised
in the statements of income. An asset�s recoverable amount is the higher of its fair value less costs to sell and
value in use.
6.14 Provisions
Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a
part event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, and a reliable estimate of such obligation can be made.
6.15 Long-term leases
Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership to
the leasee are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the
Annual Report 2008 57
leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of
finance charges, are recorded as long-term liabilities while the interest element is charged to the statements of
income over the lease periods. The assets acquired under finance lease is depreciated over the shorter of the
useful life of the asset or the lease period.
6.16 Employee benefits
The Company, its subsidiaries and their employees have jointly established a provident fund. The fund is
monthly contributed to by employees and by the Company and its subsidiaries. The contributions made by the
Company and its subsidiaries are recognised as expenses when incurred.
The Company issued to its directors and employees the warrants to purchase the Company�s ordinary shares.
Such transactions are recorded in the financial statements when the warrants are exercised.
6.17 Foreign currencies
Foreign currency transactions occurring during the years are translated into Baht at the exchange rates ruling
on the transaction dates. Assets and liabilities denominated in foreign currencies outstanding on the balance
sheet dates are translated into Baht at the exchange rates ruling on the balance sheet dates.
Gains and losses on exchange are included in the statements of income.
6.18 Income tax
Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax
legislation.
6.19 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by, the Company and its
subsidiaries, whether directly or indirectly, or which are under common control with the Company and its
subsidiaries.
They also include associated companies and individuals which directly or indirectly own a voting interest in the
Company and its subsidiaries that gives them significant influence over them, key management personnel,
directors and officers with authority in the planning and direction of the Company�s and its subsidiaries�
operations, together with close family members of such persons and companies which are controlled or
influenced by them, whether directly or indirectly.
6.20 Use of accounting estimates
Preparation of financial statements in conformity with generally accepted accounting principles requires the
Company�s and its subsidiaries� management to make estimates and assumptions in certain circumstances,
affecting amounts reported in the financial statements and related notes. Actual results could differ from these
estimates.
58 Annual Report 2008
7. Related party transactions
7.1 Transactions incurred during the years
During the years, the Company and its subsidiaries had significant business transactions with their related
parties. These transactions, which have been concluded on commercial terms and bases agreed upon in the
ordinary course of businesses between the Company, its subsidiaries and those related parties. Below is a
summary of those transactions.
(Unit: Thousand Baht)
Consolidated Separate
financial statements financial statements
For the years ended For the years ended
Type of 30 September 30 September Transfer Pricing Policy
relationship 2008 2007 2008 2007 2008 2007
Sales - raw water
Industrial Estate Authority Major shareholder 611,659 607,648 611,659 607,648 Similar to market Similar to market
of Thailand prices and adjusted prices
for rate reduced in
accordance with
a resolution of
the Extraordinary
General Meeting
No. 2
Provincial Waterworks Major shareholder 463,452 383,488 463,452 383,488 Similar to market Similar to market
Authority prices and adjusted prices
for rate reduced
in accordance
with a resolution
of the Extraordinary
General Meeting
No. 2
Universal Utilities Subsidiary - - 80,120 65,349 Similar to market Similar to market
Company Limited prices prices
1,075,111 991,136 1,155,231 1,056,485
Sales - others
Water Trades and Services Subsidiary - - 1,293 - Similar to market -
Company Limited prices
Universal Utilities Subsidiary - - 75 152 Similar to market Similar to market
Company Limited prices prices
- - 1,368 152
Service income
Provincial Waterworks Major shareholder 74,501 72,249 - - Mutually agreed price Mutually agreed
Authority as stipulated in price as
the contracts stipulated in
the contracts
Egcom Tara Having a common 31,442 29,753 - - Mutually agreed price Mutually agreed
Company Limited shareholder as stipulated in the price as
contracts stipulated in
the contracts
105,943 102,002 - -
Rental income (included in service income)
Universal Utilities Subsidiary - - 2,434 - Mutually agreed price -
Company Limited as stipulated in the
contracts
Water Trades and Subsidiary - - 362 - Mutually agreed price -
Services Company as stipulated in the
Limited contracts
- - 2,796 -
Annual Report 2008 59
(Unit: Thousand Baht)
Consolidated Separate
financial statements financial statements
For the years ended For the years ended
Type of 30 September 30 September Transfer Pricing Policy
relationship 2008 2007 2008 2007 2008 2007
Interest and dividend income
Universal Utilities Subsidiary - - 43,843 86,126 5.25% per annum on 5.25% per annum
Company Limited loans to subsidiary on loans to
and dividend of subsidiary and
Baht 0.55 per share dividend of
as declared by the Baht 1.373 per
subsidiary share as
declared by
the subsidiary
Eastern Hobas Pipes Subsidiary - - 587 3,081 6.50% per annum 6.50% per annum
Company Limited
Global Water Systems Subsidiary - - - 1,930 - 3.50% per annum
Corporation Limited
Egcom Tara Having a common 40,172 - 40,172 5,175 As declared by such As declared by
Company Limited shareholder company such company
40,172 - 84,602 96,312
Other income
Universal Utilities Subsidiary - - 1,086 1,635 Mutually agreed price Mutually agreed price
Company Limited as stipulated in the as stipulated in
contracts the contracts
Eastern Hobas Pipes Subsidiary - - 221 694 Mutually agreed price Mutually agreed price
Company Limited as stipulated in the as stipulated in
contracts the contracts
Global Water Systems Subsidiary - - - 37 - Mutually agreed price
Corporation Limited as stipulated in
the contracts
- - 1,307 2,366
Service expenses
(included in cost of
sales - raw water and
costs of sales - others)
Universal Utilities Subsidiary - - 199,191 170,459 Mutually agreed price Mutually agreed price
Company Limited as stipulated in the as stipulated in
contracts the contracts
Water Trades and Services Subsidiary - - 2,992 - Mutually agreed price -
Company Limited as stipulated in the
contracts
Global Water Systems Subsidiary - - - 5,501 - Mutually agreed price
Corporation Limited as stipulated in
the contracts
- - 202,183 175,960
Interest expense
Hobas Engineering Shareholder of 391 29,753 - - 6.50% per annum 6.50% per annum
GmbH a subsidiary
Assets received in
settlement of
short-term loans
Global Water Systems Subsidiary - - - 78,131 - Appraisal value by
Corporation Limited independent
appraiser
60 Annual Report 2008
7.2 Outstanding balances at end of the years
The outstanding balances the Company and its subsidiaries have with their related parties and/or persons as
at 30 September 2008 and 2007 are detailed as follow:
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Trade accounts receivable - related parties
Major shareholders
Provincial Waterworks Authority 113,128,532 101,527,957 52,973,439 36,495,553
Industrial Estate Authority of Thailand 52,739,145 53,097,022 52,739,145 53,097,021
Subsidiaries
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 9,043,300 5,563,297
Related companies
Egcom Tara Company Limited 3,043,054 2,905,176 - -
Hobas Pipe Systems SRL - 5,715,441 - -
Total trade accounts receivable - related parties 168,910,731 163,245,596 114,755,884 95,155,871
Service income receivables - related party
Major shareholder
Provincial Waterworks Authority 27,224,272 26,797,389 - -
Dividend receivable from a related party
Subsidiary
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 28,050,000 70,023,000
Total dividend receivable from a related party - - 28,050,000 70,023,000
Other receivable - related parties
Major shareholders
Provincial Waterworks Authority 10,919 - - -
Subsidiaries
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 2,363,115 2,904,862
Water Trades and Services Company Limited - - 4,503,741 7,050,627
Eastern Hobas Pipes Company Limited - - -(1)
5,456,736
Related companies
Hobas Engineering GmbH - 1,491,114 - -
Hobas Pipe Systems SRL - 2,491,516 - -
Total other receivable - related parties 10,919 3,982,630 6,866,856 15,412,225
(1)As at 30 September 2008, the Company had outstanding balances due from Eastern Hobas Pipes Company Limited totaling
Baht 4.0 million and already made provision for doubtful account in full.
Annual Report 2008 61
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Long-term loans to related parties
Subsidiaries
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 300,000,000 300,000,000
Eastern Hobas Pipes Company Limited - - -(1)
18,000,000
Total long-term loans to related parties - - 300,000,000 318,000,000
(1) As at 30 September 2008, the Company had outstanding balances due from Eastern Hobas Pipes Company Limited totaling
Baht 17.8 million and already made provision of Baht 9 million. The Company presented net balance of Baht 8.8 million
under the caption of �Short-term loan to an unrelated party - net� in the balance sheet because the Company sold the
investment in such company to an unrelated company on 31 March 2008.
Trade accounts payable - related parties
Major shareholder
Provincial Waterworks Authority 3,059,501 5,242,467 - -
Subsidiary
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 6,083,125 5,742,808
Related company
Egcom Tara Company Limited 1,054,913 1,058,307 - -
Total trade accounts payable - related parties 4,114,414 6,300,774 6,083,125 5,742,808
Other current liabilities - related parties
Major shareholder
Industrial Estate Authority of Thailand 5,114,994 - 5,114,994 -
Subsidiaries
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 39,426,033 25,971,244
Water Trades and Services Corporation Limited - - 30,495 1,007,619
Related companies
Hobas Engineering GmbH - 12,600,140 - -
Hobas Pipe Systems SRL - 7,436,846 - -
Hobas Rohre GmbH - 98,626 - -
Total other current liabilities - related parties 5,114,994 20,135,612 44,571,522 26,978,863
Long-term loan from a related party
Related company
Hobas Engineering GmbH - 12,000,000 - -
Total long-term loan from a related party - 12,000,000 - -
62 Annual Report 2008
(Unit: Baht)
Consolidatedfinancial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Rental guarantees received from related parties
Subsidiary
(Eliminated from the consolidated financial statements)
Universal Utilities Company Limited - - 662,485 -
Water Trades and Services Corporation Limited - - 98,753 -
Total rental guarantees received from related parties - - 761,238 -
7.3 Movements of inter-company loans
(Unit: Baht)
Consolidated financial statements
Balance as at Balance as at
30 September During the year 30 September
2007 Increase Decrease 2008
Long-term loans from a related company
Hobas Engineering GmbH 12,000,000 (1)
- (12,000,000) (1)
-
(1)Such loan belongs to Eastern Hobas Pipes Company Limited, which was sold by the Company to an unrelated party on 31 March
2008.
(Unit: Baht)
Separate financial statements
During the year
Decrease due
Balance as at to transfer to Balance as at
30 September present in 30 September
2007 Increase Repayments other account 2008
Long-term loans to subsidiaries
Universal Utilities Company Limited 300,000,000 - - - 300,000,000
Eastern Hobas Pipes Company Limited 18,000,000 - (200,000) (17,800,000)(1)
-
318,000,000 - (200,000) (17,800,000) 300,000,000
(1)As at 30 September 2008, the Company has outstanding balances due from Eastern Hobas Pipes Company Limited totaling Baht
17.8 million, which was presented under the caption of �Short-term loan to an unrelated party - net� in the balance sheet since the
Company sold the investment in such company to an unrelated company on 31 March 2008.
Annual Report 2008 63
7.4 Details of related party loan agreements
7.4.1 Loan to Universal Utilities Company Limited
On 3 October 2002, the Company entered into a loan agreement with Universal Utilities Company
Limited, a subsidiary, whereby the Company agreed to provide to the subsidiary a loan facility of Baht
300 million, of which the subsidiary is to make full or partial repayment at any time, but within ten years
as from the agreement date. The loan bears interest at a fixed rate of 5.5 percent per annum for the first
five years from the agreement date and at the minimum lending rate per annum thereafter, with such
interest payable on a quarterly basis. In order to secure payments under this loan agreement, the
Company arranged to have all of three subsidiaries of the subsidiary (i.e. Chachoengsao Water Supply
Company Limited, Bangpakong Water Supply Company Limited and Nakornsawan Water Supply
Company Limited) allowed the transfer to the Company of all collection rights under the concessions to
produce water.
On 19 June 2007, the Company amended the loan agreement to change the interest rate to be fixed
rate of 5.25 percent per annum throughout the term of the loan agreement. The effective date was 1 July
2007.
As at 30 September 2008, the Company had an outstanding balance of long-term loan to this subsidiary
amounting to approximately Baht 300 million (30 September 2007: Baht 300 million).
7.4.2 Loan to Eastern Hobas Pipes Company Limited
On 13 March 2007, the Company entered into a loan agreement, to provide a credit line of Baht 18
million to Eastern Hobas Pipes Company Limited for use as working capital. The Company charges
interest to the subsidiary at the fixed rate of 6.5 percent per annum, payable on a monthly basis. The
loan is repayable within 24 months commencing from the drawn-down date but such company defaulted
payments and in the fourth quarter of 2008, the Company sent letter to such company informing it to pay
a monthly installment of Baht 100,000 each over the first 6 months and will then restructure such debt.
Up to the balance sheet date the borrower had paid the Company a total of Baht 0.2 million. However,
the Company estimates for loss that might be incurred as a result of not being able to collect them in full
and already set up allowance for doubtful account of Baht 9 million.
As at 30 September 2008, the Company had an outstanding balance of loan to this subsidiary amounting
to approximately Baht 8.8 million, net of allowance for doubtful account of Baht 9 million (30 September
2007: Baht 18 million), which was presented under the caption of �Short-term loan to unrelated party -
net� in the balance sheets because the Company sold the investment in such company to an unrelated
company on 31 March 2008 as described in Note 15 to the financial statements.
7.4.3 Loan from Hobas Engineering GmbH
On 13 March 2007, Eastern Hobas Pipes Company Limited, a used-to-be subsidiary of the Company
until 31 March 2008, entered into a loan agreement to borrow Baht 12 million from Hobas Engineering
GmbH for its working capital. The loan is repayable within 24 months commencing from the first drawn-
64 Annual Report 2008
down date and carries interest at the fixed rate of 6.5 percent per annum. Interest is payable on a
monthly basis.
As at 30 September 2008, there is no outstanding balance of long-term loan from such related party in
the consolidated financial statements since the Company disposed investment in such subsidiary to an
unrelated company on 31 March 2008 (30 September 2007: Baht 12 million).
7.5 Directors and management�s remuneration
For the years ended 30 September 2008 and 2007, the Company and its subsidiaries paid salaries, meeting
allowances and gratuities to their directors and management totaling Baht 65.3 million and Baht 63.5 million,
respectively (The Company only: Baht 43.3 million and Baht 42.5 million, respectively).
7.6 Guarantee obligations with related parties
A subsidiary has obligations as a result of guarantees provided for its related parties, as described in Note
34.5 to the financial statement.
8. Cash and cash equivalents
Cash and cash equivalents in the statements of cash flows consisted of cash, cash at banks and all highly
liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Cash 763,225 617,835 328,195 167,203
Cash at banks - demand deposits 79,430,393 336,818,504 38,220,817 224,068,011
Current investment with an original
maturity of 3 months or less 90,000,000 - 90,000,000 -
Cash and cash equivalents 170,193,618 337,436,339 128,549,012 224,235,214
9. Securities purchased under resale agreement
As at 30 September 2008, the Company has Bank of Thailand bond of Baht 85 million purchased under resale
agreement made with a securities company. The resell date is on 22 October 2008 and interest rate is 3.7
percent per annum.
Annual Report 2008 65
10. Investments
As at 30 September 2008 and 2007, the investments consisted of the following:
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Current investments
Held-to-maturity debt securities
Fixed deposits with banks 3,521,703 3,250,336 3,521,703 3,250,336
Promissory notes 140,000,000 - 140,000,000 -
Total held-to-maturity debt securities 143,521,703 3,250,336 143,521,703 3,250,336
Total current investments 143,521,703 3,250,336 143,521,703 3,250,336
Long-term investments
Held-to-maturity debt securities
Promissory notes - 10,000,000 - 10,000,000
Total held-to-maturity debt securities - 10,000,000 - 10,000,000
General investments
Non-marketable equity securities 85,477,500 85,387,500 85,387,500 85,387,500
Total general investments 85,477,500 85,387,500 85,387,500 85,387,500
Total long-term investments 85,477,500 95,387,500 85,387,500 95,387,500
Total investments 228,999,203 98,637,836 228,909,203 98,637,836
10.1 As at 30 September 2008 and 2007, the Company has a long-term investment in equity securities of Egcom
Tara Company Limited, a related company. The investment is stated at cost of Baht 85.4 million and represents
15 percent of the paid-up share capital of that company.
Egcom Tara Company Limited has been incorporated as a limited company in Thailand to engage in the
business of supplying water produced in accordance with the Thai Industrial Standard to the Provincial
Waterworks Authority of Thailand for distribution at Lak Muang Water Station in Ratchaburi Province, Damnoen
Saduak Water Station in Ratchaburi Province and Samut Songkhram Water Station in Samut Songkhram Province.
On 30 April 2008, the Annual General Meeting of the Shareholders of Egcom Tara Company Limited passed a
resolution approving the payment of dividends to its shareholders, approximately Baht 40.2 million of which
was for the Company. The Company already received dividends in May and July 2008.
10.2 As at 30 September 2008, the Company had an investment in Joint Venture UUEEI, which is engaged in the
maintenance and management of waste water treatment systems. Such investment is stated at cost of Baht
90,000, which represents 15 percent of paid-up capital of that joint venture (30 September 2007: It was an
investment of 49 percent of paid-up capital and thus presented as a part of �investment in subsidiaries and a
joint venture� in the balance sheet as at 30 September 2007.).
66 Annual Report 2008
11. Trade Accounts Receivable
The outstanding balances of trade accounts receivable as at 30 September 2008 and 2007 categorised by
their overdue aging, counting from due dates, are as follows:
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Trade accounts receivable - related parties
Not yet due 168,830,481 157,530,155 114,675,634 95,155,871
Past due
Up to 3 months 80,250 5,715,441 80,250 -
Total trade accounts receivable � related parties 168,910,731 163,245,596 114,755,884 95,155,871
Trade accounts receivable - unrelated parties
Not yet due 83,935,545 99,418,680 59,441,040 59,577,762
Past due
Up to 3 months 2,618,260 8,992,767 2,545,818 3,055,359
3 - 6 months 359,357 22,603,868 266,457 583,739
6 - 12 months 415,182 11,201,166 358,982 507,708
Over 12 months 7,825,072 18,242,892 243,256 1,087,252
Total trade accounts receivable - unrelated parties 95,153,416 160,459,373 62,855,553 64,811,820
Less: Allowance for doubtful accounts (7,714,019) (8,659,697) - -
Trade accounts receivable - unrelated parties, net 87,439,397 151,799,676 62,855,553 64,811,820
Trade accounts receivable - net 256,350,128 315,045,272 177,611,437 159,967,691
12. Inventories
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Finished goods 53,457,755 106,730,730 52,329,251 78,871,639
Raw materials and supplies 9,632,835 20,144,680 - -
Goods in transit - 774,001 - -
Total 63,090,590 127,649,411 52,329,251 78,871,639
Less: Allowance for diminution in value
of inventories (44,890,555) (72,452,809) (44,100,890) (48,130,844)
Inventories - net 18,200,035 55,196,602 8,228,361 30,740,795
13. Restricted bank deposits
As at 30 September 2008 and 2007, the Company and its subsidiaries have pledged fixed deposit accounts
with banks amounting to Baht 9.1 million and Baht 9.1 million, respectively (The Company only: Baht 9.1 million
and Baht 9.1 million, respectively) to secure bank guarantees obtained from local commercial banks on behalf
of the Company and its subsidiaries as described in Note 34.1 to the financial statements.
Annual Report 2008 67
14. Investments in subsidiaries and a joint venture
14.1 As at 30 September 2008 and 2007, a subsidiary has the following investment in a joint venture:
Consolidated financial statements
Paid-up Dividends
share capital Equity interest Investments value For the years
30 September 30 September 30 September ended 30 September
Name of Joint Venture 2008 2007 2008 2007 2008 2007 2008 2007
Million Million % % Thousand Thousand Thousand Thousand
Baht Baht Baht Baht Baht Baht
Joint Venture held by subsidiary
Joint Venture UUEEI 1 1 15 49 - (1)
490 - -
Total investment in Joint Venture - 490
(1) The balance was presented as �General investments� in Note 10 to the financial statements.
On 22 December 2006, a subsidiary invested Baht 0.5 million in Joint Venture UUEEI, which is engaged in the
maintenance and management of waste water treatment systems. During the year ended 30 September 2008,
such subsidiary entered in to an amendment of the joint venture agreement to reduce its shareholding portion
from 49 percent to 15 percent of the paid-up share capital of that joint venture. As at 30 September 2008, the
subsidiary had the investment in that Joint Venture at cost of Baht 90,000 and was included a part of �General
investments� in Note 10 to the financial statements.
14.2 As at 30 September 2008 and 2007, the Company recorded its investments in subsidiaries under the cost
method, which consisted of investments in ordinary shares in the following subsidiaries:
Separate financial statements
Paid-up Dividends
share capital Equity interest Investments value For the years
30 September 30 September 30 September ended 30 September
Name of Joint Venture 2008 2007 2008 2007 2008 2007 2008 2007
Million Million % % Thousand Thousand Thousand Thousand
Baht Baht Baht Baht Baht Baht
Water Trades and Services 5 5 100 100 5,000 5,000 - -
Company Limited
Universal Utilities 510 510 100 100 510,000 510,000 28,050 70,023
Company Limited
Eastern Hobas Pipes 480 480 - 50 - 240,000 - -
Company Limited(1)
Total investment in subsidiaries 515,000 755,000 28,050 70,023
Less: Allowance for impairment of investments
in subsidiaries - (193,293)
Investment in subsidiaries - net 515,000 561,707
(1)The Company sold investment in Eastern Hobas Pipes Company Limited on 31 March 2008 as described in Note 15 to the financial
statements.
68 Annual Report 2008
15. Disposal of investment in a subsidiary
On 31 March 2008, the Company entered into a share sale and purchase agreement with a local company
(�the buyer�) to sell ordinary shares in Eastern Hobas Pipes Company Limited, a subsidiary engaging in the
business of manufacture and sale of water distribution pipes whereby the Company agreed to sell 24,000,000
ordinary shares for Baht 0.50 per share, or a total of Baht 12 million (�the selling price�). The buyer paid Baht 2
million on the agreement date and the remainder of Baht 10 million was received on 30 April 2008. In addition,
the agreement stipulates that if the subsidiary is successful in reaching a debt restructuring compromise with
the local financial institution, the Company will receive additional payment of Baht 12 million. The Company
also has an option to buy shares back from the buyer within 18 months from the agreement date, but with the
number of shares to be bought back shall not exceed 24 percent of the total issued and paid-up share capital
of Eastern Hobas Pipes Company Limited, including any additional share capital registered during the
buy-back period. The price at which shares are to be bought back is the selling price or the selling price plus
the amount that the buyer must additionally pay as a result of an increase in share capital, plus interest at the
Minimum Loan Rate (MLR) of Krung Thai Bank applicable on the date the Company applies to buy back the
shares.
The net asset value of Eastern Hobas Pipes Company Limited on the selling date (31 March 2008), was as
follow:
(Unit: Baht)
31 March 2008
Asset
Cash and cash equivalents 12,781,327
Trade accounts receivable - net 53,232,466
Other receivables - related parties 18,212,721
Inventories - net 15,413,548
Property, plant and equipment - net 380,750,112
Other assets 3,310,232
Total assets 483,700,406
Liabilities
Loans from financial institution 297,000,000
Loans from shareholders 30,000,000
Other liabilities 114,349,906
Total liabilities 441,349,906
Net asset value 42,350,500
Add (less): Adjusting transactions of intercompany sales in prior year (30,836,530)
Over-recognition of prior year�s profit sharing 2,764,364
Minority interest - equity attributable to minority shareholders
of subsidiaries (5,756,985)
Equity of the subsidiary attributable to the Company per the consolidated
financial statements 8,521,349
Annual Report 2008 69
(Unit: Baht)
Selling price 12,000,000
Less: Equity of the subsidiary attributable to the Company per the
consolidated financial statements (8,521,349)
Gain on disposal of investment in a subsidiary recognised in
the consolidated financial statements 3,478,651
Selling price 12,000,000
Less: Investment in a subsidiary under cost method on the selling date (28,707,000)
Loss on disposal of investment in a subsidiary recognised in
the separate financial statements 16,707,000
The Company already received full payment on disposal of such shares on 30 April 2008 and recognised gain
of Baht 3.5 million on disposal of investment in a subsidiary in the consolidated financial statements for the year
ended 30 September 2008 and loss of Baht 16.7 million on disposal of investment in a subsidiary in the
separate financial statements for the year ended 30 September 2008.
The consolidated statements of income and cash flows for the year ended 30 September 2008, categorised by
continuing operations and discontinued operations due to disposal of investment in the subsidiary as mentioned
above, are shown below.
(Unit: Thousand Baht)
Consolidated financial statements
For the year end 30 September 2008
Continuing Discontinued
operations operations (1)
Total
Revenue
Sales 2,216,825 18,886 2,235,711
Service income 143,215 - 143,215
Interest and dividend income 44,694 95 44,789
Gain on disposal of investment in a subsidiary 3,479 - 3,479
Other income 7,619 2,440 10,059
Total revenue 2,415,832 21,421 2,437,253
Expenses
Costs of sales 959,524 16,980 976,504
Costs of services 152,939 - 152,939
Selling, servicing and administrative expenses 373,990 50,346 424,336
Total expenses 1,486,453 67,326 1,553,779
Earning (loss) before interest expense and income tax 929,379 (45,905) 883,474
Interest expense (141,964) (23,972) (165,936)
Income tax (180,812) - (180,812)
Earnings (loss) before minority interests 606,603 (69,877) 536,726
(Earnings) loss in respect of minority shareholders of subsidiaries (173) 34,938 34,765
Net income (loss) 606,430 (34,939) 571,491
(1)The amounts shown in the �Discontinued operations� were presented by the amounts recognised until the date the Company
sold its subsidiary (31 March 2008).
70 Annual Report 2008
(Unit: Thousand Baht)
Consolidated financial statements
For the year end 30 September 2008
Continuing Discontinued
operations operations (1)
Total
Cash flows from operating activities
Net income (loss) 606,430 (34,939) 571,491
Adjustments to reconcile net income (loss) to net cash
provided by (paid from) operating activities:
Earnings (loss) in respect of minority shareholders of
subsidiaries 173 (34,938) (34,765)
Gain on disposal of investment in a subsidiary (3,479) - (3,479)
Losses on impairment of fixed assets - 236 236
Losses on impairment of other assets 1,592 - 1,592
Losses on diminution in value of inventories 20,980 - 20,980
Provision for doubtful accounts 14,277 - 14,277
Depreciation 265,505 27,446 292,951
Amortisation of assets under concession contracts 24,575 - 24,575
Amortisation of deferred concession rights acquisition costs 14,510 - 14,510
Amortisation of assets transferred from customers (3,397) - (3,397)
Losses on disposal of fixed assets 307 1,675 1,982
Losses on fixed assets written off 11,489 - 11,489
Amortisation of goodwill 8,349 - 8,349
Dividend income (40,172) - (40,172)
Income (loss) from operating activities before
changes in operating assets and liabilities 921,139 (40,520) 880,619
(Increase) decrease in operating assets
Trade accounts receivable (1,190) 5,384 4,194
Service income receivable - related party (427) - (427)
Inventories 3,603 (3,000) 603
Input taxes awaiting refund 1,737 - 1,737
Other current assets 4,103 1,096 5,199
Other receivables - related parties (11) (14,230) (14,241)
Other non-current assets 732 30 762
Increase (decrease) in operating liabilities
Trade accounts payable (24,880) (2,844) (27,724)
Accrued expenses 48,405 (5,103) 43,302
Accrued interest expenses (32,969) 22,234 (10,735)
Corporate income tax payable 22,225 - 22,225
Other current liabilities - related parties 5,115 993 6,108
Other non-current liabilities 15,828 - 15,828
Net cash provided by (used in) operating activities 963,410 (35,960) 927,450
(1)The amounts shown in the �Discontinued operations� were presented by the amounts recognised until the date the Company
sold its subsidiary (31 March 2008).
Annual Report 2008 71
(Unit: Thousand Baht)
Consolidated financial statements
For the year end 30 September 2008
Continuing Discontinued
operations operations (1)
Total
Cash flows from investing activities
Securities purchased under resale agreement (85,000) - (85,000)
Increase in current investments (130,271) - (130,271)
Proceeds from long-term loan to an unrelated party 200 - 200
Proceeds from disposal of investment in a subsidiary 12,000 - 12,000
Dividend received from a related party 40,172 40,172
Decrease in advance payment for pipeline installation 81 - 81
Capital returned from a joint venture 400 - 400
Increase in assets under concession contracts (22,477) - (22,477)
Increase in deferred concession rights acquisition costs (155,513) - (155,513)
Proceeds from disposal of fixed assets 147 12,175 12,322
Proceeds from sales of property foreclose 156 - 156
Acquisition of fixed assets (197,090) (356) (197,446)
Net cash provided by (used in) investing activities (537,196) 11,819 (525,377)
Cash flows from financing activities
Increase in bank overdrafts 20,010 - 20,010
Repayments of short-term loans from financial
institutions (2,600,000) - (2,600,000)
Cash receipt from short-term loans from financial
institutions 2,552,000 - 2,552,000
Repayments made on debentures (2,500,000) - (2,500,000)
Cash receipt from long-term loans from financial
institutions 1,576,700 - 1,576,700
Repayments of long-term loans from financial
institutions (344,287) - (344,287)
Increase in share capital from exercised warrants 1,155,100 - 1,155,100
Dividends paid (416,058) - (416,058)
Net cash used in financing activities (556,535) - (556,535)
Net increase (decrease) in cash and cash
equivalents 130,320 (24,141) (154,461)
Cash and cash equivalents at beginning of the year 300,514 36,922 337,436
Less: cash and cash equivalents of the disposed
subsidiary on the disposal date (12,781) - (12,781)
Cash and cash equivalents at end of the year 157,413 12,781 170,194
(1)The amounts shown in the �Discontinued operations� were presented by the amounts recognised until the date the Company
sold its subsidiary (31 March 2008).
72 Annual Report 2008
16. Other receivable
By resolution of the Cabinet-Council on 2 August 2005, it is resolved to approve projects to solve urgently a
drought crisis in the eastern area, which include a project to install water distribution pipeline connecting the
Pra-Sae reservoir to the Klong Yai reservoir in the Rayong Province (�the pipeline connecting project�), the
Company is then assigned to operate for construction of such project in the limit of Baht 1,680 million, separated
as below:
(a) A limit of Baht 1,008 million is to be supported by the government and under which the Company is
assigned to enter into contracts for pipeline connecting and annexed building construction and contracts
to procure and install water pumping machines and electricity system with total contract value of baht
919 million. The Company has entered into such contracts on behalf the government under the resolution
as mentioned above.
(b) For the remaining limit of Baht 672 million, the Company is assigned to make advance payments and
the Royal Irrigation Department (�the RID�) will repay to the Company by gradually offsetting the charges
on raw water to be purchased by the Company every year from the RID. Up to 30 September 2008 and
2007, the Company already made advance payments for a total of approximately Baht 642 million,
which is presented in the line item of �Other receivable� in the non-current assets in the balance sheets.
Presently, the relevant government unit is requesting for the budget but this has yet been allotted from the
government for re-imbursement to the Company with respect to the above part (a). Furthermore, it has not yet
determined the amount to be withheld from the volumes of raw water purchased every year with respect to the
above part (b). However, the Company�s management believes that there will be no loss to the Company by
entering into such contracts and making such advance payments. In addition, the Company�s management
also believes that such project is beneficial and should the government units have no intention to operate the
project by themselves, the Company is able to invest in this project by itself as its other projects in order to
make it beneficial. The Company is in the process of negotiating with the relevant government units and the
outcome of such negotiation and other related matters have yet been finalised on the authorisation date of
these financial statements.
Annual Report 2008 73
17. Property, plants and equipment
(Unit: Baht)
Consolidated financial statements
Land,
leasehold and
Pumping building Machinery and Office Construction
Land plants Buildings improvements equipment equipment Vehicles in progress Total
Cost:
30 September 2007 405,033,914 519,601,338 232,364,856 69,468,692 6,501,673,577 312,370,652 6,096,970 586,538,708 8,633,148,707
Acquisitions - - 7,078,252 19,352,493 24,884,559 27,785,854 3,586,216 63,450,495 146,137,869
Transfer in/(transfer out) - - 573,457,152 24,047,944 6,307,752 16,824,649 - (620,637,497) -
Disposal/write off - - - (921,774) (17,996,309) (1,376,561) - (11,140,084) (31,434,728)
Decrease from transferring
to �unused assets�
accounts - - - - (436,297) (10,761,133) (239,390) - (11,436,820)
Decrease due to disposal
of investment in a
subsidiary (45,467,007) - (92,212,218) (3,985,557) (469,988,616) (7,801,206) (1,109,976) (69,900) (620,634,480)
30 September 2008 359,566,907 519,601,338 720,688,042 107,961,798 6,046,742,832 334,744,089 8,333,820 18,141,722 8,115,780,548
Accumulated depreciation:
30 September 2007 - 79,889,993 57,009,816 28,555,736 974,612,468 151,119,586 2,235,370 - 1,293,422,969
Decrease from transferring
to �unused assets�
accounts - - - - (3,342) (9,980,234) (83,919) - (10,067,495)
Depreciation for the year - 16,367,899 22,724,940 9,290,896 195,834,956 47,048,191 1,684,182 - 292,951,074
Accumulated depreciation
on disposed/written-off
assets - - - (594,709) (4,317,314) (918,759) - - (5,830,782)
Decrease due to disposal
of investment in a
subsidiary - - (17,653,299) (759,212) (187,669,188) (6,521,371) (1,045,277) - (213,648,347)
30 September 2008 - 96,257,892 62,081,457 36,492,711 978,457,590 180,747,413 2,790,356 - 1,356,827,419
Allowance for impairment:
30 September 2007 - - 26,000,000 - - - - - 26,000,000
Increase during the year - - 275,556 - - - - - 275,556
Decrease from transferring
categories - - (39,535) - - - - - (39,535)
Decrease due to disposal
of investment in a
subsidiary - - (26,236,021) - - - - - (26,236,021)
30 September 2008 - - - - - - - - -
Net book value:
30 September 2007 405,033,914 439,711,345 149,355,040 40,912,956 5,527,061,109 161,251,066 3,861,600 586,538,708 7,313,725,738
30 September 2008 359,566,907 423,343,446 658,606,585 71,469,087 5,068,285,242 153,996,676 5,543,464 18,141,722 6,758,953,129
Depreciation included in consolidated statements of income for the years ended
30 September 2007 (Baht 246 million included in manufacturing cost, and the balance in selling, servicing and administrative expenses) 270,338,378
30 September 2008 (Baht 269 million included in manufacturing cost, and the balance in selling, servicing and administrative expenses) 292,951,074
74 Annual Report 2008
(Unit: Baht)
Separate financial statements
Land,
leasehold and
Pumping building Machinery and Office Construction
Land plants Buildings improvements equipment equipment Vehicles in progress Total
Cost:
30 September 2007 317,197,440 499,594,743 140,152,640 59,199,843 5,870,898,733 280,662,180 535,183 611,513,242 7,779,754,004
Acquisitions - - 7,078,252 18,585,991 19,087,780 25,478,324 3,586,216 36,704,303 110,520,866
Transfer in/(transfer out) - - 573,457,151 24,047,944 4,849,424 16,643,359 - (618,997,878) -
Disposal/write off - - - - - - - (11,077,943) (11,077,943)
Decrease from transferring
to �unused assets�
accounts - - - - - (10,195,375) (239,390) - (10,434,765)
30 September 2008 317,197,440 499,594,743 720,688,043 101,833,778 5,894,835,937 312,588,488 3,882,009 18,141,724 7,868,762,162
Accumulated depreciation:
30 September 2007 - 76,863,098 41,661,821 26,263,596 777,490,684 134,400,126 211,392 - 1,056,890,717
Decrease from transferring
to �unused assets�
accounts - - - - - (9,954,785) (83,919) - (10,038,704)
Depreciation for the year - 14,987,842 20,419,635 8,406,460 159,538,752 42,840,084 577,385 - 246,770,158
30 September 2008 - 91,850,940 62,081,456 34,670,056 937,029,436 167,285,425 704,858 - 1,293,622,171
Net book value:
30 September 2007 317,197,440 422,731,645 98,490,819 32,936,247 5,093,408,049 146,262,054 323,791 611,513,242 6,722,863,287
30 September 2008 317,197,440 407,743,803 658,606,587 67,163,722 4,957,806,501 145,303,063 3,177,151 18,141,724 6,575,139,991
Depreciation included in the separate statements of income for the years ended
30 September 2007 (Baht 191 million included in manufacturing cost, and the balance in selling, servicing and administrative expenses) 194,495,171
30 September 2008 (Baht 224 million included in manufacturing cost, and the balance in selling, servicing and administrative expenses) 246,770,158
As at 30 September 2008, the Company and its subsidiaries transferred certain fixed assets, which are not
currently in use and had net book value on the transfer date of approximately Baht 1.4 million (The Company
only: Baht 0.4 million), from �Property, plant and equipment� accounts to �Unused assets� accounts, which
were presented as a part of �Other non-current assets� in the balance sheets.
As at 30 September 2008 and 2007, the Company and its subsidiaries had certain equipment and fixtures,
which were fully depreciated but are still in use. The original costs, before deducting accumulated depreciation,
of those assets amounted to approximately Baht 195.7 million and Baht 148.6 million, respectively (The Company
only: Baht 180.3 million and Baht 134.2 million respectively).
As at 30 September 2007, a subsidiary had its land, plant, machinery and equipment mortgaged/negatively
pledged, with an aggregate net book value Baht 178.5 million to secure its long-term loans and on 31 March
2008 the Company sold its investment in such subsidiary as described in Notes 15 to the financial statements.
For the years ended 30 September 2008 and 2007, the Company capitalised borrowing costs amounting to
Baht 3.3 million and Baht 60.2 million, respectively, which were directly attributable to the construction of water
distribution pipeline networks and new office buildings, as a part of �Construction in progress� under the
caption �Property, plant and equipment�.
Annual Report 2008 75
Borrowing costs incurred from the Company�s long-term loans from financial institutions and debentures were
capitalized at the rate of 4.55 percent per annum (2007: 5.33 percent per annum), which is determined by
dividing interest on long-term loans and debentures, the principal amount of which not exceeding the capital
expenditures, by the average capital expenditures.
18. Assets under concession contracts
(Unit: Baht)
Consolidated financial statements
Assets under
concession Construction
contracts in progress Total
Cost:
30 September 2007 287,599,739 153,398,240 440,997,979
Purchases 7,893,123 14,584,333 22,477,456
Transfer in (Transfer out) 160,054,928 (160,054,928) -
30 September 2008 455,547,790 7,927,645 463,475,435
Accumulated amortisation:
30 September 2007 56,894,473 - 56,894,473
Amortisation for the year 24,574,830 - 24,574,830
30 September 2008 81,469,303 - 81,469,303
Net book value:
30 September 2007 230,705,266 153,398,240 384,103,506
30 September 2008 374,078,487 7,927,645 382,006,132
Amortisation included in consolidated statements of income for the years ended:
30 September 2007 20,306,829
30 September 2008 24,574,530
A subsidiary capitalised borrowing costs for the year ended 30 September 2007 amounting to Baht 1.5 million,
incurred directly in relation to the construction of assets under the concession contracts, as assets under the
caption �Construction in progress� in the �Assets under concession contracts� account.
For the years ended 30 September 2008 and 2007, amortisation of assets under concession contracts amounting
to Baht 24.6 million and Baht 20.3 million, respectively, were included in �Costs of sales � others� in the statements
of income.
The subsidiaries have committed to transfer assets under concession contracts to the Provincial Waterworks
Authority at the end of concession periods.
76 Annual Report 2008
19. Deferred concession rights acquisition costs
(Unit: Baht)
Consolidated financial statements
Deferred
concession
rights Construction in
acquisition costs progress Total
Cost:
30 September 2007 234,835,194 173,309,008 408,144,202
Acquisition - 159,776,735 159,776,735
30 September 2008 234,835,194 333,085,743 567,920,937
Accumulated amortisation:
30 September 2007 31,896,255 - 31,896,255
Amortisation for the year 14,509,566 - 14,509,566
30 September 2008 46,405,821 - 46,405,821
Net book value:
30 September 2007 202,938,939 173,309,008 376,247,947
30 September 2008 188,429,373 333,085,743 521,515,116
Amortisation included in consolidated statements of income for the years ended:
30 September 2007 9,062,343
30 September 2008 14,509,566
A subsidiary capitalised borrowing costs for the years ended 30 September 2008 and 2007, amounting to
Baht 4.4 million and Baht 6.6 million respectively, incurred directly in respect of the concession rights acquisition
costs as assets, under the caption of �Construction in progress� in the �Deferred concession rights acquisition
costs� account.
For the years ended 30 September 2008 and 2007, amortisation of deferred concession rights acquisition
costs amounting to Baht 14.5 million and Baht 9.1 million, respectively, were included in �Costs of sales �
others� in the statements of income.
Annual Report 2008 77
20. Goodwill
(Unit: Baht)
Consolidated
financial
statements
Cost:
30 September 2007 201,205,413
30 September 2005 201,205,413
Accumulated amortisation:
30 September 2007 30,155,756
Amortisation for the year 8,348,738
30 September 2008 38,504,494
Net book value:
30 September 2007 171,049,657
30 September 2008 162,700,919
Amortisation included in statements of income for the years ended:
30 September 2007 8,348,738
30 September 2008 8,348,738
Remaining amortisation periods:
30 September 2007 21 years
30 September 2008 20 years
For the years ended 30 September 2008 and 2007, amortisation of goodwill amounting to Baht 8.3 million and
Baht 8.3 million, respectively were included in selling, servicing and administrative expenses in the statements
of income.
21. Bank overdraft and short-term loan from financial institutions
(Unit: Baht)
Consolidated Separate
financial statements financial statements
30 September 30 September
2008 2007 2008 2007
Bank overdrafts 20,009,842 - 20,009,842 -
Short-term loans 52,000,000 160,000,000 - 100,000,000
Total 72,009,842 160,000,000 20,009,842 100,000,000
As at 30 September 2008, a subsidiary�s short-term loan of Baht 52 million from a financial institution carries
interest at the rate of 5.00 percent per annum.
As of 30 September 2007, the Company�s short-term loan of Baht 100 million from a financial institution carried
interest at the rate of 3.9 percent per annum.
78 Annual Report 2008
As of 30 September 2007, Eastern Hobas Pipes Company Limited, a subsidiary, defaulted payment on short-
term loan of Baht 60 million from a financial institution and therefore it was subject to a default interest rate of
15.50 percent per annum.
22. Long-term loans from financial institutions
(Unit: Baht)
Consolidated financial statements Separate financial statements
30 September 30 September
2008 2007 2008 2007
Long-term loans from financial institutions 2,855,713,000 1,860,300,000 2,650,000,000 1,460,000,000
Less: Current portion (420,716,000) (421,287,000)(1)
(375,000,000) (150,000,000)
Long-term loans from financial institutions -
net of current portion 2,434,997,000 1,439,013,000 2,275,000,000 1,310,000,000
(1)Loans from a financial institution of a subsidiary amounting to Baht 237 million were presented as �current
portion� as the subsidiary received a letter from the financial institution demanding for repayment in full.
22.1 Long-term loans of the Company
(a) Loans from a financial institution - credit limit of Baht 2,000 million.
On 9 November 2005, the Company entered into a credit facility agreement with a local financial institution
for the credit limit of Baht 2,000 million, which is detailed as follows:
Credit facility : Baht 2,000 million consisting of
- Tranche A amounting to Baht 1,500 million
- Tranche B amounting to Baht 500 million
Type of loan : Unsecured, with status equivalent to unsecured and unsubordinated debts
Period : 7 years
Interest rate : - Tranche A, interest is payable on a monthly basis at the following rates
Year 1-3 Fixed rate at 6.00 percent per annum
Year 4-5 Minimum Loan Rate (MLR) minus 1.50 percent per annum
Year 6-7 Minimum Loan Rate (MLR) minus 0.75 percent per annum
- Tranche B, interest is payable on a monthly basis at the following rates
Year 1-5 Minimum Loan Rate (MLR) minus 1.50 percent per annum
Year 6-7 Minimum Loan Rate (MLR) minus 0.75 percent per annum
Repayment Schedule : Principal is repayable in semi-annual installments, beginning after the grace
period of 18 months from the date of the first draw down (17 November 2005),
with installments to be allocated proportionally to Tranche A and Tranche B
loans.
During 2007, the Company received a letter from a financial institution informing it of an adjustment of
the interest rate for Tranche A and Tranche B (only the drawn-down portion) of the loans to be 4.50
percent per annum, effective from July 2007 until the 5th year of the loan agreement (October 2010)
whereby the interest rate on the Tranch A and Tranch B (only the drawn-down portion) loans in the 6th-
7th years and the Tranche B (not-yet draw down) loans remains unchanged.
Annual Report 2008 79
The Company already drew down a total of Baht 1,775 million loan which comprised Tranche A loan
amounting to Baht 1,500 million and Tranche B loan amounting to Baht 275 million and as at 30 September
2008 and 2007, the Company has outstanding loans from the financial institution according to such
agreement amounting to Baht 1,150 million and Baht 1,460 million, respectively.
Under the loan agreements, the significant conditions that the Company is required to comply with are
the maintenance of a net debt to EBITDA ratio of not exceeding 4.5 times and the aggregate amount of
defaulted debts not exceeding 5% of shareholders� equity as shown in the annual consolidated financial
statements, etc.
During 2007, Eastern Hobas Pipes Company Limited, a subsidiary during such period, failed to meet a
scheduled repayment of long-term loans from a financial institution. The outstanding balance of this
loan and accrued interest payable as at 30 September 2007 was Baht 317 million, which was higher
than the limit stipulated in a loan agreement of the Company and thus constituted an event of default
under such loan agreement. Later on 3 October 2007, the Company received a letter from such financial
institution informing the amendment of the financial ratio covenant from maintaining the net debt to
EBITDA ratio of not exceeding 4.5 times to maintaining the debt service coverage ratio (�DSCR�) of not
lower than 1.25 times. The financial institution also requested the Company to rectify such event of
default within 180 days. Furthermore, on 13 November 2007, the Company amended the credit facility
agreement with the financial institution whereby the financial institution agreed to modify the covenants
in the agreement by cancellation the event of default relating to the subsidiary and reduction the minimum
DSCR to be 1.10 times. As a result of the amendment of covenants as mentioned above, there was no
reclassification of long-term loans to be presented as current liabilities in the balance sheet as at 30
September 2007 and on 31 March 2008 the Company sold its investment in such subsidiary as described
in Notes 15 to the financial statements.
(b) Loans from a financial institution - credit limit of Baht 1,500 million
On 6 December 2007, the Company entered into a credit facility agreement with a local financial institution,
granting a credit limit of Baht 1,500 million to repay a bridging loan to the same financial institution, as
detailed below.
Credit facility : Baht 1,500 million
Type of loan : Unsecured, with status equivalent to unsecured and unsubordinated debts
Period : 7 years
Interest rate : Interest is payable on a monthly basis and calculated based on the amount of
principal drawn down and yet to be repaid from the draw down date to the
repayment date, as follow:
- The 1st - 36th months Fixed rate at 4.80 percent per annum
- The 37th - 60th months Minimum Loan Rate (MLR)
minus 1.75 percent per annum
- The 61st month onwards Minimum Loan Rate (MLR)
minus 1.50 percent per annum
Repayment Schedule : Principal is repayable in 12 semi-annual installments, beginning after a grace
period of 12 months from the agreement date as scheduled below.
- The 1st - 6th installments Baht 50 million each
- The 7th - 12th installments Baht 200 million each
80 Annual Report 2008
Under the above loan agreement, the financial institution requires the Company to comply with certain
covenants, such as maintaining a debt to equity ratio of not exceeding 2 times and a debt service
coverage ratio (�DSCR�) of not lower than 1.1 times, etc., which are to be calculated at the fiscal year-
end from the latest audited consolidated financial statements.
The Company already drew down a full amount under such loan agreement and as at 30 September
2008, the Company has outstanding loans from the financial institution according to such loan agreement
amounting to Baht 1,500 million.
(c) Loan from a financial institution - credit limit of Baht 1,000 million
On 3 December 2007, the Company entered into a credit facility agreement with a local financial institution,
granting a credit limit of Baht 1,000 million to finance the issuance of and underwriting the debentures
and the Company�s investing activities as detailed below.
Credit facility : Baht 1,000 million, draw down in installments as required.
Type of loan : Unsecured, with status equivalent to unsecured and unsubordinated debts
Period : 7 years
Interest rate : Interest is payable on a monthly basis and calculated based on the amount of
principal drawn down and yet to be repaid from the draw down date to the
repayment date as follows
- The 1st - 12th months Minimum Loan Rate (MLR) minus
2.0 percent per annum
- The 13th - 48th months Minimum Loan Rate (MLR)
minus 1.75 percent per annum
- the 49th month onwards Minimum Loan Rate (MLR)
minus 1.50 percent per annum
Repayment Schedule : Principal is repayable equally in 12 semi-annual installments, beginning after
the grace period of 18 months from the first draw down date and to be
completed within 84 months from the first draw down date.
Under the above loan agreement, the financial institution required the Company to comply with certain
covenants, such as maintaining a debt to equity ratio of not exceeding 2 times and not lower than 0 time,
a debt service coverage ratio (�DSCR�) of not lower than 1.1 times, etc., which are to be calculated at
the fiscal year-end from the latest audited consolidated financial statements.
As at 30 September 2008, the Company has yet to draw down this loan facility.
22.2 Long-term loans of subsidiary - Universal Utilities Company Limited
On 24 April 2006, Universal Utilities Company Limited, a subsidiary, entered into a credit facility agreement
with a local financial institution for a credit limit of Baht 240 million. The loan carries interest at the Minimum
Loan Rate (MLR) minus 1.5% per annum for the first forty eighth months, and thereafter at MLR minus 0.75%
per annum until maturity. Interest is payable on a monthly basis. The principal is to be repaid in 22 quarterly
installments of Baht 10.9 million each, commencing the eighteenth month after the agreement date.
On 9 May 2007, the subsidiary amended the credit facility agreement with the financial institution that principal
repayments are rescheduled to be made in 21 quarterly installments of Baht 11.4 million each.
Annual Report 2008 81
As at 30 September 2008 and 2007, the subsidiary had outstanding loans according to such agreements
totalling approximately Baht 206 million and Baht 163 million, respectively.
23. Debentures
On 16 July 2004, the Company issued two series of debentures, totalling Baht 2,500 million, the details of
which are as follows:
First series of debentures Second series of debentures
Type of debenture : Registered, unsubordinated, Registered, unsubordinated,
unsecured with bondholder unsecured with bondholder
representative. representative.
Period (year) : 4 7
Number of units : 1,300,000 units 1,200,000 units
Face value (Baht per unit) : 1,000 Baht per unit 1,000 Baht per unit
Total Amount (Baht) : 1,300,000,000 1,200,000,000
Maturity date : 16 July 2008 16 July 2011
Interest rate (percent per
annum) : 4.6% 5.75%
Payment date of interest : 16 January and 16 July of 16 January and 16 July of each year,
each year, commencing from commencing from 16 January 2005.
16 January 2005.
The placement agreements for the debentures contained certain covenants pertaining to dividend payment,
disposal or transfer of assets, maintenance of certain financial ratios and the percentage of shares held by the
major shareholder.
During 2007, Eastern Hobas Pipes Company Limited, the subsidiary at that time, failed to meet scheduled
repayments of long-term loan from a financial institution. The outstanding balance of this loan and accrued
interest as at 30 September 2007 was Baht 317 million, which was higher than the amount stipulated in conditions
of the placement agreement of the debentures and thus constituted an event of default under the terms of both
the 4-year debenture series and the 7-year debenture series. Later, on 18 September 2007, a meeting of
Company�s debentureholders passed a resolution to have the Company repaid principal and interest thereon
by 11 October 2007. The Company already made principal and interest payments totaling Baht 2,529.4 million
to the debentureholders on such date.
24. Share capital
On 24 January 2008, the Annual General Meeting of the shareholders of the Company approved the reduction
of the Company�s registered share capital from 1,665,000,000 ordinary shares at a par value of Baht 1 each to
be 1,663,725,149 ordinary shares at a par value of Baht 1 each through the cancellation of 1,274,851 unissued
ordinary shares with a par value of Baht 1 each, previously reserved to accomodate the exercise of warrants,
which expired.
During the year ended 30 September 2008, the Company registered the increases in its issued and paid-up
share capital totaling Baht 317.3 million as a result of the shares offered and the rights exercised by warrant
82 Annual Report 2008
holders. This resulted in an increase of Baht 951.2 million in share premium. As at 30 September 2008, the
Company�s issued and paid-up share capital is therefore Baht 1,663.7 million.
Reconciliation of ordinary share capital and share premium
Ordinary share capital
Number of shares Amount Share premium
Baht Baht
Balance as at 30 September 2006 1,323,503,380 1,323,503,380 1,123,429,772
Increased share capital during the year 22,890,750 22,890,750 63,928,650
Balance as at 30 September 2007 1,346,394,130 1,346,394,130 1,187,358,422
Increased share capital during the year 317,331,019 317,331,019 951,163,857
Balance as at 30 September 2008 1,663,725,149 1,663,725,149 2,138,522,279
25. Warrants
The warrants issued to the Company�s employees, directors and advisors to the Company�s Board of Director
(EASTW-WA) and the warrants issued to the Company�s existing shareholders and general public (EASTW-
W1) were expired in December 2007. Movements in the number of warrants during the years were as follows:
(Unit: Units)
Warrant issued to
the Company�s Warrant issued to
employees, the Company�s
directors and existing shareholder
advisors and general public Total
Number of warrants as at 30 September 2006 1,299,500 339,630,850 340,930,350
Less: Exercised during the year (1,048,100) (49,643,910) (50,692,010)
Number of warrants as at 30 September 2007 251,400 289,986,940 290,238,340
Less: Exercised during the year (251,400) (288,712,089) (288,963,489)
Expired during the year - (1,274,851) (1,274,851)
Number of warrants as at 30 September 2008 - - -
26. Assets transferred from customers
Assets transferred from customers represent water distribution pipeline systems and water measured equipment
transferred to the Company by customers in accordance with the water supply agreement.
27. Statutory reserve
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside
a statutory reserve at least 5 percent of its net income for the year after deducting accumulated deficit brought
forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not
available for dividend distribution.
Annual Report 2008 83
28. Dividends
The Company
On 24 January 2008, the Annual General Meeting of the shareholders of the Company approved a dividend
payment of Baht 0.25 per share for 2007 fiscal year, totalling Baht 416 million, to the Company�s shareholders.
The Company paid such dividend on 20 February 2008.
The Annual General Meeting of the Company�s shareholders held on 26 January 2007 approved the dividend
payment of Baht 0.25 per share for 2006 fiscal year, totalling Baht 331 million, to the Company�s shareholders.
The Company paid the dividend on 26 February 2007.
Subsidiary
On 30 September 2008, the Extraordinary General Meeting of the Shareholders No. 4/2551 of Universal Utilities
Company Limited, a subsidiary, approved the payment of a dividend of Baht 0.55 per share to its shareholders,
or a total of Baht 28 million. The dividend is to be paid in a monthly basis of Baht 4.675 million each from
October 2008 to March 2009.
On 2 August 2007, the Extraordinary General Meeting of the Shareholder No. 5/2550 of Universal Utilities
Company Limited, a subsidiary, approved the payment of a dividend of Baht 1.373 per share to its shareholders,
or a total of Baht 70 million. The dividend payments were made in two quarters, on 31 October 2007 and 31
January 2008.
29. Directors� remuneration
Directors� remuneration represents the benefits paid to the Company�s directors in accordance with Section
90 of the Public Limited Companies Act, exclusive of salaries, bonus and related benefits payable to
management.
30. Provident fund
The Company and its subsidiaries, which are Universal Utilities Company Limited, Chachoengsao Water Supply
Company Limited, Bangpakong Water Supply Company Limited and Eastern Hobas Pipes Company Limited,
have established a provident fund in accordance with the Provident Fund Act B.E. 2530. The employees are
required to contribute to the fund at the rates of 3% to 10% of their basic salaries while the Company and its
subsidiaries are required to contribute at the rates of 5% to 10% of the employees� basic salaries. This provident
fund, which is managed by Kasikorn Asset Management Company Limited, will be paid to employees upon
termination in accordance with the fund rules.
For the years ended 30 September 2008 and 2007, approximately Baht 7.2 million and Baht 6.8 million,
respectively, were contributed to the fund by the Company and its subsidiaries (The Company only: Baht 4.3
million and Baht 3.7 million, respectively).
84 Annual Report 2008
31. Number of employees and related costs
Consolidated financial statements Separate financial statements
2008 2007 2008 2007
Number of employees at the end of the years (Persons) 264 275 137 100
Employee costs for the years (Million Baht) 163.9 155.5 100.7 81.4
32. Income tax
Corporate income tax was calculated on net income before income tax after adding back non-tax deductible
expenses and deducting tax-exempted income.
33. Earnings per share
Basic earnings per share is calculated by dividing net income by the weighted average number of ordinary
shares in issue during the years.
Diluted earnings per share is calculated by dividing net income by the weighted average number of ordinary
shares in issue during the years plus the weighted average number of ordinary shares which would need to be
issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the
conversion took place either at the beginning of the years or on the dates the potential ordinary shares were
issued.
Reconciliation between basic earnings per share and diluted earnings per share is presented below.
Consolidated financial statements
For the years ended 30 September
Weighted average number
Net income of ordinary shares Earnings per share
2008 2007 2008 2007 2008 2007
Thousand Thousand Thousand Thousand Baht Baht
Baht Baht shares shares
Basic earnings per share
Net income 571,491 440,681 1,615,565 1,330,369 0.35 0.33
Effect of dilutive potential ordinary shares
Warrants issued to employees, directors
and advisors to the Company�s Board
of Directors (EASTW-WA) - - - 550
Warrants issued to existing shareholders
and general public (EASTW-W1) - - - 81,705
Diluted earnings per share
Net income of ordinary
shareholders assuming the
conversion of dilutive
potential ordinary shares 571,491 440,681 1,615,565 1,412,624 0.35 0.31
Annual Report 2008 85
Separate financial statements
For the years ended 30 September
Weighted average number
Net income of ordinary shares Earnings per share
2008 2007 2008 2007 2008 2007
Thousand Thousand Thousand Thousand Baht Baht
Baht Baht shares shares
Basic earnings per share
Net income 518,678 432,729 1,615,565 1,330,369 0.32 0.33
Effect of dilutive potential ordinary shares
Warrants issued to employees, directors
and advisors to the Company�s Board
of Directors (EASTW-WA) - - - 550
Warrants issued to existing shareholders
and general public (EASTW-W1) - - - 81,705
Diluted earnings per share
Net income of ordinary
shareholders assuming the
conversion of dilutive
potential ordinary shares 518,678 432,729 1,615,565 1,412,624 0.32 0.31
There is no effect to diluted earnings per share for the year ended 30 September 2008 since there are no
outstanding warrants as a result of its being expired during the periods.
34. Commitments and contingent liabilities
The Company and its subsidiaries had the following commitments and contingent liabilities.
34.1 As at 30 September 2008 and 2007, the Company and its subsidiaries have letters of guarantee totaling Baht
268.2 million and Baht 215.3 million, respectively (The Company only: Baht 59 million and Baht 58 million,
respectively) issued by banks to the Provincial Electricity Authority for electricity consumption, to the Ministry of
Finance for management and operation of the major water distribution pipeline systems in the Eastern Seaboard
area, and to counterparties for bid bonds and performance bonds.
34.2 As at 30 September 2008 and 2007, the Company and its subsidiaries have commitments in respect of rental
and service contracts with a period of 1 to 5 years, for which the future minimum charges of approximately
Baht 129.9 million and Baht 41.7 million, respectively (The Company only: Baht 40.9 million and Baht 31.1
million, respectively) according to the agreements until the end of the agreement periods are payable by the
Company and its subsidiaries.
34.3 As at 30 September 2008 and 2007, the Company has a raw water purchase contract with the Royal Irrigation
Department whereby it is to purchase raw water at the price specified in a Ministerial Regulation.
34.4 As at 30 September 2008 and 2007, the Company and its subsidiaries have commitments of Baht 331.6 million
and Baht 333.3 million, respectively (The Company only: Baht 252.2 million and Baht 99.6 million, respectively)
for projects under construction.
86 Annual Report 2008
34.5 As at 30 September 2008 and 2007, a subsidiary had contingently liabilities in respect of being a guarantor to
its three subsidiaries in a credit limit of Baht 200 million for letters of guarantee issued by local commercial
banks to those subsidiaries for compliance to agreements with respect to their electricity consumption guarantee,
tap water production and distribution and water consumers information records.
34.6 On 28 March 2003, the Company was sued as a defendant in a litigation case in connection with the purchase
of assets from the Legal Execution Department. The plaintiff petitioned the civil court to void the sales transaction
or order the payment of compensatory damages amounting to Baht 302.2 million to the plaintiff. However, on
26 January 2006, the Court of First Instance issued an order dismissing the lawsuit and later the plaintiff lodged
an appeal with the Court of Appeal on 22 March 2006. The Company has already made its plea contesting the
plaintiff�s appeal and as at 30 September 2008 and 2007, the case is currently being heard by the Appeal
Court. The Company�s management believes that should the outcome of the case be finalised, there would be
no significant loss to the Company. Therefore, the Company has not yet provided for any loss in the accounts.
34.7 Universal Utilities Company Limited, a subsidiary was sued as a co-defendant together with the Provincial
Waterworks Authority (�PWA�) in a case brought in connection with illegal acts performed by administrative
agencies or state officials. The plaintiff petitioned the administrative court to void the selection process by
which a private operator was selected to produce tap water for distribution to the PWA in the area belonging to
the Rayong Waterworks and on 16 March 2007, the Rayong Administrative Court ordered the selection process
voided in accordance with the plaintiff�s petition, and also declared void the agreement appointing a private
firm to produce water for sale to the Rayong Waterworks, which had resulted from an illegal selection process.
However, the PWA and the subsidiary lodged appeals with the Rayong Administrative Court on 12 April 2007
and the case is currently being heard by the Supreme Court. Since PWA and the subsidiary have to comply
with conditions in the agreement and are further obliged to each other as stipulated in the agreement until the
case is finalised, in accordance with Section 70 of the Royal Decree on Establishment of and Procedures for
Administrative Court Act B.E. 2542, the Company�s management therefore believes that the subsidiary will
incur no losses as a result of the termination of the agreement because, if such a termination occurs the PWA
will have to compensate the subsidiary for costs of construction and improvements made to the waterworks,
and for other expenses incurred by the subsidiary. Therefore, no provision has yet been made in the accounts.
34.8 The Company has entered into raw water procurement agreements with Siam Water Resource Company
Limited as described in Notes 35.6 to the financial statements.
35. Significant agreements
Beside the lending and borrowing agreements as discussed in relevant notes to financial statements, the
Company and its subsidiaries have the following significant agreements.
The Company
35.1 The Company entered into an agreement dated 26 December 1993 with the Ministry of Finance to manage
and operate the major water distribution pipeline systems in the Eastern Seaboard area. The contract term is
30 years, from 1 January 1994 to 30 September 2023 and the Company is required to pay a minimum of Baht
2 million per annum to the Ministry of Finance. In any years when the Company�s revenues from the sales of
Annual Report 2008 87
raw water exceed Baht 200 million, it is required to pay the Ministry of Finance with a sharing benefit at a rate
of 1 percent of sales of raw water from the Nong Khor and Dok Krai reservoirs. In addition, when the Company�s
annual rate of return on equity exceeds 20 percent, an additional sharing benefit at the rate of 15 percent of the
return in excess of the paid 20 percent is to be paid to the Ministry of Finance. Nevertheless, the total sharing
benefit is not to exceed 6 percent of the real value of the assets leased from the Ministry of Finance, as
assessed according to the agreed time frame.
35.2 On 15 November 2000, the Company entered into an agreement with Universal Utilities Company Limited, a
subsidiary, to receive waterworks management services for Sattahip Waterworks of the Provincial Waterworks
Authority for the period of 10 years. The Company will pay the management fee from revenue after deducting
license fee and related expenses as specified in the agreement. Moreover, the Company will receive the profit
sharing from the subsidiary under the conditions specified in the agreement. Under the agreement, the subsidiary
is to invest a total of Baht 16 million for the expansion of the water distribution area, a total of Baht 12 million for
installation of centralised Supervisory Control and Data Acquisition (SCADA) and Geographic Information
System (GIS) in order to improve the management system. Subsequently on 18 October 2004, the Company
amended the above-mentioned agreement to extend to the Pattaya Waterworks. Consequently, the subsidiary
is entitled to manage water system of Sattahip Waterworks for a period of 30 years from 1 March 2001 but not
exceeding the period the Provincial Waterworks Authority has granted the Company the rights to operate and
manage the Sattahip Waterworks System.
35.3 On 28 November 2000, the Company entered into an agreement with Universal Utilities Company Limited
whereby it grants the subsidiary the rights to operate the waterworks of the Municipality of Si Chang Island
Sub-district for a period of 15 years. The subsidiary is to pay in return to both the Municipality of Si Chang
Island Sub-district and the Company at the rates as specified in the agreement.
35.4 On 11 May 2004, the Company entered into a waterworks management agreement with Universal Utilities
Company Limited (the subsidiary) whereby the subsidiary is to provide water works management services in
Bo Win Municipal area for a period of 25 years from the date the subsidiary completed the construction works
of tap water production system and the Company agreed for commercial distribution of tap water (11 March
2005). Under the agreement, the subsidiary is to procure land and construct tap water production system
sufficient to supply tap water throughout the agreement period. The subsidiary is to transfer all the invested
assets to the Company and/or the Municipality on the earlier expiry date of the waterworks operation agreement
or the waterworks management agreement. The Company is to pay an annual waterworks management fee at
the rates specified in the agreement, determined on the monthly tap water sales and service fees, which can
be collected from the users.
Since later on 5 August 2005 the Company entered into a waterworks system operation and management
agreement with the Bo Win Sub-district Administration Organization (�SAO�), it therefore revised the
aforementioned agreement with the subsidiary to cover Bo Win SAO area. As a result the aforementioned
agreement was superseded and the new agreement dated 14 July 2006, having the same conditions with an
additional area of Bo Win SAO, is replaced.
88 Annual Report 2008
35.5 On 7 July 2004, the Company entered into a water supply agreement for the Koh Samui Waterworks with
Universal Utilities Company Limited for a 15-year period from the first water distribution date (12 May 2005)
whereby the subsidiary agreed to construct the reverse osmosis water production system with the water pipeline
connected to both the water distribution pipeline of the purchasers in the specified area and the Provincial
Waterworks Authority, and sell the tap water produced under such system for a return determined at the rates
as specified in the agreement of the volume actually received by the purchasers. The rates will by adjusted
annually.
35.6 On 13 December 2007, the Company has entered into the raw water procurement agreements with Siam
Water Resource Company Limited whereby the Company is required to purchase a minimum of 10 million
cubic meters per annum for a price of 6 Baht per cubic meter over a 10-year period. The price shall be
adjusted based on the change of electricity price in accordance with the fuel adjustment charge (Ft) rate,
announced by Provincial Electricity Authority.
The Subsidiaries
35.7 Chachoengsao Water Supply Company Limited entered into the concession agreement dated 9 November
2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the
Provincial Waterworks Authority at Chachoengsao office, Chachoengsao province. The concession period is
25 years from the date that first income is derived from selling tap water (1 April 2003).
35.8 Bangpakong Water Supply Company Limited entered into the concession agreement dated 9 November 2000
with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the
Provincial Waterworks Authority at Bangpakong office, Chachoengsao province. The concession period is 25
years from the date that first income is derived from selling tap water (1 April 2003).
35.9 Nakornsawan Water Supply Company Limited entered into the concession agreement dated 7 November
2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the
Provincial Waterworks Authority at Nakornsawan office, Nakornsawan province. The concession period is 25
years from the date that first income is derived from selling tap water (1 March 2003).
35.10 Chachoengsao Water Supply Company Limited and Bangpakong Water Supply Company Limited entered
into a know-how agreement dated 1 December 2000 with Australian Water Technologies PTY Limited of Australia,
which transferred its entitlements under this agreement to AWT International (Thailand) Limited on 15 October
2002, whereby the latter agreed to permit the use of its name for reference purposes and provide the know-
how to enable the said subsidiaries to perform their obligations under concession agreements for a period of
25 years from the first date of sales of tap water under the concession agreements. In consideration thereof,
the subsidiary companies agree to pay fees at the rate stipulated in the agreement.
35.11 On 27 September 2002, Eastern Hobas Pipes Company Limited entered into a License and Know-How Transfer
Agreement with a related company in Austria, whereby the latter grants the subsidiary the exclusive right to
manufacture products in accordance with know-how and patents rights as well as the non-exclusive right to
market and sell the products within the territory specified in the agreement. In consideration thereof, the
Annual Report 2008 89
subsidiary is committed to pay a royalty fee at a certain percentage based on the net sales value of the
products manufactured, by the subsidiary�s plant, based on the ex-works price as invoiced to customers, as
specified in the agreement. The term of the agreement is 10 years and it is renewable for another term of 5
years. However, the Company disposed investment in such company on 31 March 2008 as described in
Notes 15 to the financial statements.
35.12 On 24 March 2004, Universal Utilities Company Limited entered into an agreement with Eccomtara Company
Limited, a related company, to produce tap water and to provide maintenance services for the tap water
production system and tap water distribution pipeline of the production plants situated in Lak Muang, Ratchaburi
province and Pangpuoy, Samut Songkram province. The agreement period is 6 years and stipulates an annual
fee, with payment to be made on a monthly basis and adjusted to the actual amount at the end of each year in
accordance with the guidelines and conditions stipulated in the agreement.
35.13 On 14 March 2006, Universal Utilities Company Limited and its subsidiaries entered into an agreement with a
private company allowing the private company to produce tap water for sales to Rayong Waterworks, Rayong
province and the Provincial Waterworks Authority for a 25-year period commencing from the first tap water
selling date (12 July 2006). Under the agreement, the subsidiaries are required to construct tap water production
system, water delivery system and water distribution system, and to expand the production capacity of the
existing tap water distribution system of Rayong Waterworks. The subsidiaries are also required to provide
maintenance services and to act on behalf of the Provincial Waterworks Authority in any related matters.
Ownership of assets, which have been constructed, repaired and expanded by the subsidiaries, is to be
transferred to the Provincial Waterworks Authority immediately upon completion of these activities, with the
subsidiaries having the rights to occupy the assets in order to produce and supply tap water to the Provincial
Waterworks Authority over the agreement period. The subsidiaries will receive income at the rates prescribed
in the agreement and the rates will be adjusted annually.
36. Financial information by segment
The Company and its subsidiaries have been operating the businesses of producing water for sales, managing
water distribution networks in the Eastern Seaboard areas of Thailand, doing waste water treatment and related
businesses, producing water distribution pipeline for sales, selling drinking water through water vending
machines, and producing and providing installation services of water vending machines. These business
operations are conducted only in one geographical area, which is Thailand. Although the Company and its
subsidiaries have been operating in a variety of business relating to producing and selling water. Their
managements consider the Group�s core businesses are raw water distribution business, tap water distribution
business, water pipeline distribution business, waterworks management and water loss reduction project. The
financial information of the Company and its subsidiaries is therefore presented by such business segments.
The segment information for the years ended 30 September 2008 and 2007 is summarised as follows:
90 Annual Report 2008
36.1 Operating results by business segment
(Unit: Thousand Baht)
Consolidated financial statements
For the year ended 30 September 2008
Sales - other Service income
Water
Raw water Tap water pipeline Waterworks Water loss
distribution distribution distribution management reduction
business business business(1)
Others business project Others Elimination Total
Revenue
Revenue from external customers 1,672,600 541,146 18,886 3,079 28,708 73,609 40,898 - 2,378,926
Inter-segment revenue 80,120 - - 1,376 197,307 - 7,663 (286,466) -
Total revenue 1,752,720 541,146 18,886 4,455 226,015 73,609 48,561 (286,466) 2,378,926
Cost of sales/services (714,482) (367,883) (16,980) (4,299) (184,937) (72,028) (49,513) 280,679 (1,129,443)
Operating profit
Segment operating profit (loss) 1,038,238 173,263 1,906 155 41,078 1,581 (953) (5,787) 1,249,483
Unallocated revenue/expenses
Interest income and dividend income 44,789
Other income 13,538
Selling, servicing and administrative expenses (424,336)
Interest expenses (165,936)
Income tax (180,812)
Minority interests 34,765
Net income 571,491
(1)This business segment is operated by Eastern Hobas Pipes Company Limited, in which the Company disposed its investment to an unrelated company on 31
March 2008.
(Unit: Thousand Baht)
Consolidated financial statements
For the year ended 30 September 2007
Sales - other Service income
Water
Raw water Tap water pipeline Waterworks Water loss
distribution distribution distribution management reduction
business business business(1)
Others business project Others Elimination Total
Revenue
Revenue from external customers 1,537,888 471,933 63,131 20,327 22,762 193,543 92,064 - 2,401,648
Inter-segment revenue 65,349 - - 78,283 167,884 - 11,605 (323,121) -
Total revenue 1,603,237 471,933 63,131 98,610 190,646 193,543 103,669 (323,121) 2,401,648
Cost of sales/services (604,787) (321,542) (71,799) (94,844) (153,638) (201,752) (77,939) 317,755 (1,208,546)
Operating profit
Segment operating profit (loss) 998,450 150,391 (8,668) 3,766 37,008 (8,209) 25,730 (5,366) 1,193,102
Unallocated revenue/expenses
Interest income and dividend income 8,956
Other income 19,527
Selling, servicing and administrative expenses (467,058)
Interest expenses (192,769)
Income tax (217,792)
Minority interests 96,715
Net income 440,681
(1)This business segment is operated by Eastern Hobas Pipes Company Limited, in which the Company disposed its investment to an unrelated company on 31
March 2008.
Annual Report 2008 91
(Unit: Thousand Baht)
Separate financial statements
For the year ended 30 September 2008
Sales - other
Raw water Tap water
distribution distribution
business business Others Service income Total
Revenue
Revenue from external customers 1,672,600 185,922 716 14,325 1,873,563
Inter-segment revenue 80,120 - 1,376 2,796 84,292
Total revenue 1,752,720 185,922 2,092 17,121 1,957,855
Cost of sales/services (714,482) (183,946) (2,322) (18,036) (918,786)
Operating profit
Segment operating profit 1,038,238 1,976 (230) (915) 1,039,069
Unallocated revenue/expenses
Interest income and dividend income 88,770
Other income 3,847
Selling, servicing and administrative expenses (341,939)
Interest expenses (135,437)
Income tax (135,632)
Net income 518,678
(Unit: Thousand Baht)
Separate financial statements
For the year ended 30 September 2007
Sales - other
Raw water Tap water
distribution distribution
business business Others Service income Total
Revenue
Revenue from external customers 1,537,888 157,370 14,862 4,902 1,715,022
Inter-segment revenue 65,349 - 152 - 65,501
Total revenue 1,603,237 157,370 15,014 4,902 1,780,523
Cost of sales/services (604,787) (155,687) (12,745) (4,840) (778,059)
Operating profit
Segment operating profit 998,450 1,683 2,269 62 1,002,464
Unallocated revenue/expenses
Interest income and dividend income 97,889
Other income 4,208
Selling, servicing and administrative expenses (339,295)
Interest expenses (156,251)
Income tax (176,286)
Net income 432,729
92 Annual Report 2008
36.2 Asset information by business segment
(Unit: Thousand Baht)
Consolidated financial statements
As at 30 September 2008
Raw water Tap water Water pipeline Waterworks
distribution distribution distribution management Unallocated
business business business(2)
business Others assets(1)
Elimination Total
Property, plant and equipment - net 5,870,376 11,304 - 170,145 707,128 - - 6,758,953
Assets under concession contracts - net - 265,900 - 116,106 - - - 382,006
Deferred concession rights acquisition
costs - net - 392,945 - 128,570 - - - 521,515
Unallocated assets (1)
- - - - - 2,573,714 (905,260) 1,668,454
Total assets 5,870,376 670,149 - 414,821 707,128 2,573,714 (905,260) 9,330,928
(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the Company and its subsidiaries
cannot allocate them to each business segment.
(2)This business segment is operated by Eastern Hobas Pipes Company Limited, in which the Company disposed its investment to an unrelated company on 31
March 2008.
(Unit: Thousand Baht)
Consolidated financial statements
As at 30 September 2007
Raw water Tap water Water pipeline Waterworks
distribution distribution distribution management Unallocated
business business business(2)
business Others assets(1)
Elimination Total
Property, plant and equipment - net 6,036,348 11,122 421,927 183,024 692,141 - (30,836) 7,313,726
Assets under concession contracts - net - 267,311 - 116,793 - - - 384,104
Deferred concession rights acquisition
costs - net - 236,672 - 139,576 - - - 376,248
Unallocated assets (1)
- - - - - 2,752,337 (1,003,452) 1,748,885
Total assets 6,036,348 515,105 421,927 439,393 692,141 2,752,337 (1,034,288) 9,822,963
(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the Company and its subsidiaries
cannot allocate them to each business segment.
(2)This business segment is operated by Eastern Hobas Pipes Company Limited, in which the Company disposed its investment to an unrelated company on 31
March 2008.
Annual Report 2008 93
(Unit: Thousand Baht)
Separate financial statements
As at 30 September 2008
Raw water Tap water
distribution distribution Unallocated
business business assets (1)
Total
Property, plant and equipment - net 5,870,376 1,792 702,972 6,575,140
Unallocated assets (1)
- - 2,181,008 2,181,008
Total assets 5,870,376 1,792 2,883,980 8,756,148
(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the Company
cannot allocate them to each business segment.
(Unit: Thousand Baht)
Separate financial statements
As at 30 September 2007
Raw water Tap water
distribution distribution Unallocated
business business assets (1)
Total
Property, plant and equipment - net 6,036,348 463 686,052 6,722,863
Unallocated assets (1)
- - 2,182,855 2,182,855
Total assets 6,036,348 463 2,868,907 8,905,718
(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the Company
cannot allocate them to each business segment.
37. Sale of raw water and tap water by distribution networks/areas
37.1 Sales volume of raw water and tap water classified by water distribution networks
(a) Sales volume of raw water
(Unit: Million Litres)
Separate financial statements
For the years ended
30 September
2008 2007
Nong Pla Lai - Map Ta Pud Network 70,000 57,802
Dok Krai - Map Ta Pud Network 58,869 68,522
Chachoengsao - Chonburi Network 80,605 68,339
Nong Pla Lai - Nong Khor Network 18,211 16,536
Total 227,685 211,199
94 Annual Report 2008
(b) Sales volume of tap water
(Unit: Baht)
Consolidated financial statements Separate financial statements
For the Years ended For the Years ended
30 September 30 September
2008 2007 2008 2007
Chachoengsao waterwork 9,723 9,539 - -
Bangpakong waterwork 10,410 9,704 - -
Nakornsawan waterwork 2,403 2,361 - -
Sattahip waterwork 9,657 8,797 9,657 8,797
Koh Samui waterwork 875 841 875 841
Koh Seechang waterwork 36 29 36 29
Borwin waterwork 798 334 798 334
Koh Lan waterwork 60 33 60 33
Rayong waterwork 13,571 12 13,571 12
Total 47,533 31,650 24,997 10,046
37.2 Sales, costs of sales and gross profit of raw water, and property, plant and equipment, classified by water
distribution networks
(Unit: Thousand Baht)
Separate financial statements
For the year ended 30 September 2008
Nong Pla Lai - Dok Krai - Chachoengsao - Nong Pla Lai -
Map Ta Pud Map Ta Pud Cholburi Nong Khor
Network Network Network Network Total
Sales of raw water 595,001 469,142 545,429 143,148 1,752,720
Costs of sales (148,724) (129,551) (374,847) (61,360) (714,482)
Gross profit 446,277 339,591 170,582 81,788 1,038,238
Property, plant and equipment - net 873,554 93,901 4,753,666 129,255
(Unit: Thousand Baht)
Separate financial statements
For the year ended 30 September 2007
Nong Pla Lai - Dok Krai - Chachoengsao - Nong Pla Lai -
Map Ta Pud Map Ta Pud Cholburi Nong Khor
Network Network Network Network Total
Sales of raw water 474,195 572,363 436,275 120,404 1,603,237
Costs of sales (138,367) (133,669) (281,481) (51,270) (604,787)
Gross profit 335,828 438,694 154,794 69,134 998,450
Property, plant and equipment - net 945,040 102,016 4,852,359 136,933
Annual Report 2008 95
Sales of raw water from Chachoengsao-Cholburi Network consisted of:
(Unit: Thousand Baht)
Separate financial statements
For the years ended
30 September
2008 2007
Nong Khor - Laem Chabang Network 1 371,909 272,281
Nong Khor - Laem Chabang Network 2 95,474 84,006
Chachoengsao Network 78,046 79,988
Total 545,429 436,275
37.3 Sales, costs of sales and gross profit of tap water by area
(Unit: Thousand Baht)
Consolidated financial statements
For the year ended 30 September 2008
Chachoengsao Bangpakong Nakornsawan Sattahip Koh Seechang Koh Samui Borwin Koh Lan Rayong
waterwork waterwork waterwork waterwork waterwork waterwork waterwork waterwork waterwork Elimination Total
Sales of tap water 99,940 100,011 27,164 124,234 2,634 44,209 11,265 3,580 128,109 - 541,146
Costs of sales (45,457) (41,232) (15,781) (122,849) (2,656) (43,768) (11,106) (3,567) (81,467) 123,963 (243,920)
Gross profit 57,483 58,779 13,617 1,385 (22) 441 159 13 46,642 123,963 297,226
(Unit: Thousand Baht)
Consolidated financial statements
For the year ended 30 September 2007
Chachoengsao Bangpakong Nakornsawan Sattahip Koh Seechang Koh Samui Borwin Koh Lan Rayong
waterwork waterwork waterwork waterwork waterwork waterwork waterwork waterwork waterwork Elimination Total
Sales of tap water 94,037 88,651 25,477 106,288 1,904 42,482 4,894 1,802 106,398 - 471,933
Costs of sales (15,817) (55,453) (21,976) (105,178) (1,912) (42,058) (4,775) (1,764) (72,610) 98,463 (223,080)
Gross profit 78,220 33,198 3,501 1,110 (8) 424 119 38 33,788 98,463 248,853
37.4 Proportion of raw water sold to end users
(Unit: Thousand Baht)
Separate financial statements
For the years ended
30 September
2008 2007
Industrial Estate 52 57
Waterworks Authority 31 28
Factories 17 15
Total 100 100
96 Annual Report 2008
38. Financial instruments
Financial risk management
The Company�s and its subsidiaries�s financial instruments, as defined under Thai Accounting Standard No.
48 �Financial Instruments: Disclosure and Presentations�, principally comprise cash and cash equivalents,
trade accounts receivable, short-term and long-term lendings, investments, bank overdrafts, short-term and
long-term loans, retentions payable, liabilities under financial lease agreements and debentures. The financial
risks associated with these financial instruments and how they are managed is discussed below.
38.1 Credit risk
The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable,
short-term and long-term lendings, and other receivable. The Company and its subsidiaries manage the risk
by adopting appropriate credit control policies and procedures and therefore does not expect to incur material
financial losses. Although the Company and its subsidiaries may expose to concentration risk due to their
having a few large customers, those customers are in government sector. The management believes that such
risk is therefore low. The maximum exposure to credit risk is limited to the carrying amounts of securities
purchased under resale agreement, trade accounts receivables, short-term and long-term loans to both related
and unrelated parties and other receivable as stated in the balance sheets.
38.2 Interest rate risk
The Company�s and its subsidiaries�s exposure to interest rate risk relate primarily to their deposits with financial
institutions, securities purchased under resale agreement, short-term and long-term lendings, investments,
short-term and long-term borrowings, liabilities under finance lease agreements, and debentures. Although
most of the Company�s and its subsidiaries�s financial assets bear fixed interest rates, they have repricing
periods of less than 1 year. Their liabilities are also charged with fixed rates of interest but those rates are lower
than current market rate. Hence, the interest rate risk is expected to be minimal.
As at 30 September 2008 and 2007, financial assets and liabilities, classified by interest rate types, are as
follows:
Annual Report 2008 97
(Unit: Thousand Baht)
Consolidated financial statements
Outstanding balances of financial instruments as at 30 September 2008
Floating Fixed Non-interest
interest rates interest rates bearing Total
Financial assets
Cash and cash equivalents 79,431 90,000 763 170,194
Securities purchased under resale agreement - 85,000 - 85,000
Investment - 143,522 - 143,522
Trade accounts receivable - net - - 256,350 256,350
Service income receivable - related party - - 27,224 27,224
Short-term loan to an unrelated party - net - 8,800 - 8,800
Other receivables - related parties - - 11 11
Restricted bank deposits - 9,076 - 9,076
Other receivable - - 642,199 642,199
79,431 336,398 926,547 1,342,376
Financial liabilities
Bank overdraft and short-term loan from
financial institutions 20,010 52,000 - 72,010
Trade accounts payable - - 73,087 73,087
Liabilities under finance lease agreements - 8,243 - 8,243
Long-term loans from financial institutions 205,713 2,650,000 - 2,855,713
Retentions payable - - 37,991 37,991
225,723 2,710,243 111,078 3,047,044
(Unit: Thousand Baht)
Consolidated financial statements
Outstanding balances of financial instruments as at 30 September 2007
Floating Fixed Non-interest
interest rates interest rates bearing Total
Financial assets
Cash and cash equivalents 336,735 - 701 337,436
Current investments - 3,250 - 3,250
Trade accounts receivable - net - - 315,045 315,045
Service income receivable - related party - - 26,797 26,797
Other receivables - related parties - - 3,983 3,983
Restricted bank deposits - 9,076 - 9,076
Long-term investments - 10,000 - 10,000
Other receivable - - 642,199 642,199
336,735 22,326 988,725 1,337,786
Financial liabilities
Bank overdrafts and short-term loans from
financial institutions - 160,000 - 160,000
Trade accounts payable - - 142,598 142,598
Liabilities under finance lease agreements - 3,278 - 3,278
Debentures - 2,500,000 - 2,500,000
Long-term loans from a related party - 12,000 - 12,000
Long-term loans from financial institutions 163,300 1,697,000 - 1,860,300
Retentions payable - - 22,163 22,163
163,300 4,372,278 164,761 4,700,339
98 Annual Report 2008
(Unit: Thousand Baht)
Separate financial statements
Outstanding balances of financial instruments as at 30 September 2008
Floating Fixed Non-interest
interest rates interest rates bearing Total
Financial assets
Cash and cash equivalents 38,221 90,000 328 128,549
Securities purchased under resale agreement - 85,000 - 85,000
Current investments - 143,522 - 143,522
Trade accounts receivable - net - - 177,611 177,611
Short-term loan to unrelated party - 8,800 - 8,800
Dividend receivable from a related party - - 28,050 28,050
Other receivables - related parties - - 6,867 6,867
Restricted bank deposits - 9,076 - 9,076
Long-term loans to related parties - 300,000 - 300,000
Other receivable - - 642,199 642,199
38,221 636,398 855,055 1,529,674
Financial liabilities
Bank overdrafts and short-term loan from
financial institutions 20,010 - - 20,010
Trade accounts payable - - 14,697 14,697
Liabilities under finance lease agreementss - 5,982 - 5,982
Long-term loans from financial institutions - 2,650,000 - 2,650,000
Retentions payable - - 24,496 24,496
Rental guarantees received from related parties - - 761 761
20,010 2,655,982 39,954 2,715,946
(Unit: Thousand Baht)
Separate financial statements
Outstanding balances of financial instruments as at 30 September 2007
Floating Fixed Non-interest
interest rates interest rates bearing Total
Financial assets
Cash and cash equivalents 224,050 - 185 224,235
Current investments - 3,250 - 3,250
Trade accounts receivable � net - - 159,968 159,968
Dividend receivable from a related party - - 70,023 70,023
Other receivables - related parties - - 15,412 15,412
Restricted bank deposits - 9,076 - 9,076
Long-term investments - 10,000 - 19,000
Long-term loans to related parties - 318,000 - 318,000
Other receivable - - 642,199 642,199
224,050 340,326 973,175 1,452,163
Financial liabilities
Bank overdrafts and short-term loans from
financial institutions - 100,000 - 100,000
Trade accounts payable - - 14,367 14,367
Debentures - 2,500,000 - 2,500,000
Long-term loans from financial institutions - 1,460,000 - 1,460,000
Retentions payable - - 8,199 8,199
- 4,060,000 22,566 4,082,566
Annual Report 2008 99
The fixed interest rate financial instruments, which have new repricing dates or maturity dates (whichever are
sooner) after the balance sheet dates, are as follows:
(Unit: Thousand Baht)
Consolidated financial statements
As at 30 September 2008
Remaining periods to repricing dates or maturity dates
Less than 1 � 5 Over No
At call 1 year years 5 years maturity Total Interest rate
% p.a.
Financial assets
Cash and cash equivalents - 90,000 - - - 90,000 3.71
Securities purchased under
resale agreement - 85,000 - - - 85,000 3.70
Current investments - 143,522 - - - 143,522 2.38 - 4.25
Short-term loan to an
unrelated party - net - 8,800 - - - 8,800 - (1)
Restricted bank deposits - 9,076 - - - 9,076 2.38 - 2.75
- 336,398 - - - 636,398
Financial liabilities
Bank overdrafts and short-term
loans from financial
institutions 52,000 - - - - 52,000 5.00
Liabilities under finance lease
agreements - 3,221 5,022 - - 8,243 2.17 - 16.19
Long-term loans from
financial institutions - 375,000 2,275,000 - - 2,650,000 4.50 - 4.80
52,000 378,221 2,280,022 - - 2,710,243
(1) Default
(Unit: Thousand Baht)
Consolidated financial statements
As at 30 September 2007
Remaining periods to repricing dates or maturity dates
Less than 1 � 5 Over No
At call 1 year years 5 years maturity Total Interest rate
% p.a.
Financial assets
Current investments - 3,250 - - - 3,250 2.00 - 2.25
Restricted bank deposits - 9,076 - - - 9,076 2.00 - 2.25
Long-term investments - - 10,000 - - 10,000 4.25
- 12,326 10,000 - - 22,326
Financial liabilities
Bank overdrafts and short-term
loans from financial
institutions 160,000 - - - - 160,000 3.90, 15.50
Liabilities under finance lease
agreements - 929 2,349 - - 3,278 7.32, 8.12
Debentures 2,500,000 - - - - 2,500,000 4.60, 5.75
Long-term loans from a
related party - - 12,000 - - 12,000 6.50
Long-term loans from
financial institutions 237,000 150,000 1,267,310 42,690 - 1,697,000 4.50, 15.50
2,897,000 150,929 1,281,659 42,690 - 4,372,278
100 Annual Report 2008
(Unit: Thousand Baht)
Separate financial statements
As at 30 September 2008
Remaining periods to repricing dates or maturity dates
Less than 1 � 5 Over No
At call 1 year years 5 years maturity Total Interest rate
% p.a.
Financial assets
Cash and cash equivalents - 90,000 - - - 90,000 3.71
Securities purchased under
resale agreement - 85,000 - - - 85,000 3.70
Current investments - 143,522 - - - 143,522 2.38 - 4.25
Short-term loan to unrelated
party - net - 8,800 - - - 8,800 - (1)
Restricted bank deposits - 9,076 - - - 9,076 2.375 - 2.75
Long-term loans to related
parties - - 300,000 - - 300,000 5.25
- 336,398 300,000 - - 636,398
Financial liabilities
Liabilities under finance lease agreements - 2,266 3,716 - - 5,982 2.17 - 16.19
Long-term loans from financial institutions - 375,000 2,275,000 - - 2,650,000 4.50 - 4.80
- 377,266 2,278,716 - - 2,655,982
(1) Default
(Unit: Thousand Baht)
Separate financial statements
As at 30 September 2007
Remaining periods to repricing dates or maturity dates
Less than 1 � 5 Over No
At call 1 year years 5 years maturity Total Interest rate
% p.a.
Financial assets
Current investments - 3,250 - - - 3,250 2.00 - 2.25
Restricted bank deposits - 9,076 - - - 9,076 2.00 - 2.25
Long-term investment - - 10,000 - - 10,000 4.25
Long-term loans to related
parties - - 318,000 - - 318,000 5.25, 6.50
- 12,326 328,000 - - 340,326
Financial liabilities
Bank overdrafts and short-term
loans from financial
institutions 100,000 - - - - 100,000 3.90
Debentures 2,500,000 - - - - 2,500,000 4.60, 5.75
Long-term loans from
financial institutions - 150,000 1,267,310 42,690 - 1,460,000 4.50
2,600,000 150,000 1,267,310 42,690 - 4,060,000
38.3 Liquidity risk
Liquidity risk is the risk that the Company and its subsidiaries will be unable to liquidate financial assets and/or
procure sufficient funds to discharge obligations in a timely manner, resulting in a financial loss.
The periods to the maturity dates of financial instruments held as of 30 September 2008 and 2007, counting
from the balance sheet dates, are as follows:
Annual Report 2008 101
(Unit: Thousand Baht)
Consolidated financial statements
As at 30 September 2008
Within 1 - 5 Over No
At call 1 year years 5 years maturity Total
Financial assets
Cash and cash equivalents 80,194 90,000 - - - 170,194
Securities purchased under resale agreement - 85,000 - - - 85,000
Current investments - 143,522 - - - 143,522
Trade accounts receivable - net 3,581 252,769 - - - 256,350
Service income receivable - related party - 27,224 - - - 27,224
Short-term loan to an unrelated party - net - 8,800 - - - 8,800
Other receivables - related parties - 11 - - - 11
Restricted bank deposits - - 5,000 - 4,076 9,076
Other receivable - - - 642,199 - 642,199
83,775 607,326 5,000 642,199 4,076 1,342,376
Financial liabilities
Bank overdrafts and short-term loans from
financial institutions 72,010 - - - - 72,010
Trade accounts payable - 73,087 - - - 73,087
Liabilities under finance lease agreements - 3,221 5,022 - - 8,243
Long-term loans from financial institutions - 420,716 2,034,997 400,000 - 2,855,713
Retentions payable - - 37,991 - - 37,991
72,010 497,024 2,078,010 400,000 - 3,047,044
(Unit: Thousand Baht)
Consolidated financial statements
As at 30 September 2007
Within 1 - 5 Over No
At call 1 year years 5 years maturity Total
Financial assets
Cash and cash equivalents 337,436 - - - - 337,436
Current investments - 3,250 - - - 3,250
Trade accounts receivable - net 58,096 256,949 - - - 315,045
Service income receivable - related party - 26,797 - - - 26,797
Other receivables � related parties - 3,983 - - - 3,983
Restricted bank deposits - - 5,000 - 4,076 9,076
Long-term investments - - 10,000 - - -
Other receivable - - - 642,199 - 642,199
395,532 290,979 15,000 642,199 4,076 1,337,786
Financial liabilities
Bank overdraft and short-term loans from
financial institutions 160,000 - - - - 160,000
Trade accounts payable - 142,598 - - - 142,598
Liabilities under finance lease agreements - 929 2,349 - - 3,278
Debentures 2,500,000 - - - - 2,500,000
Long-term loans from a related party - - 12,000 - - 12,000
Long-term loans from financial institutions 237,000 184,287 1,267,310 171,703 - 1,860,300
Retentions payable - - 22,163 - - 22,163
2,897,000 327,814 1,303,822 171,703 - 4,700,339
102 Annual Report 2008
(Unit: Thousand Baht)
Separate financial statements
As at 30 September 2008
Within 1 - 5 Over No
At call 1 year years 5 years maturity Total
Financial assets
Cash and cash equivalents 38,549 90,000 - - - 128,549
Securities purchased under resale agreement - 85,000 - - - 85,000
Current investments - 143,522 - - - 143,522
Trade accounts receivable - net 3,495 174,116 - - - 177,611
Short-term loan to unrelated party - 8,800 - - - 8,800
Dividend receivable from a related party - 28,050 - - - 28,050
Other receivables - related parties - 6,867 - - - 6,867
Restricted bank deposits - - 5,000 - 4,076 9,076
Long-term loans to related parties - - 300,000 - - 300,000
Other receivable - - - 642,199 - 642,199
42,044 536,355 305,000 642,199 4,076 1,529,674
Financial liabilities
Bank overdrafts and short-term loans from
financial institutions 20,010 - - - - 20,010
Trade accounts payable - 14,697 - - - 14,697
Liabilities under finance lease agreements - 2,266 3,716 - - 5,982
Long-term loans from financial institutions - 375,000 1,875,000 400,000 - 2,650,000
Retentions payable - - 24,496 - - 24,496
Rental guarantees received from related parties - - 761 - - 761
- 411,973 1,903,973 400,000 - 2,715,946
(Unit: Thousand Baht)
Separate financial statements
As at 30 September 2007
Within 1 - 5 Over No
At call 1 year years 5 years maturity Total
Financial assets
Cash and cash equivalents 224,235 - - - - 224,235
Current investments - 3,250 - - - 3,250
Trade accounts receivable - net - 159,968 - - - 159,968
Dividend receivable from a related party - 70,023 - - - 70,023
Other receivables - related parties - 15,412 - - - 15,412
Restricted bank deposits - - 5,000 - 4,076 9,076
Long-term investments - - 10,000 - - 10,000
Long-term loans to related parties - - 318,000 - - 318,000
Other receivable - - - 642,199 - 642,199
224,235 248,653 333,000 642,199 4,076 1,452,163
Financial liabilities
Short-term loans from a financial institution 100,000 - - - - 100,000
Trade accounts payable - 14,367 - - - 14,367
Long-term loans from financial institutions - 150,000 1,267,310 42,690 - 1,460,000
Debentures 2,500,000 - - - - 2,500,000
Retentions payable - - 8,199 - - 8,199
2,600,000 164,367 1,275,509 42,690 - 4,082,566
Annual Report 2008 103
38.4 Foreign currency risk
Subsidiaries have foreign currency-dominated assets and liabilities, giving rise to an exposure to changes in
foreign exchange rates. Management therefore considers the use of forward exchange contracts to hedge
such exchange risk from time to time, as appropriate. However, there is no outstanding forward exchange
contract at the balance sheet date since the management considers that such foreign currency-dominated
assets and liabilities are not material.
As at 30 September 2008 and 2007, the subsidiary�s foreign currency-denominated assets and liabilities,
which were not hedged by any derivative contracts, were as follows.
Outstanding balances
Foreign currency as at 30 September Exchange rates as at 30 September
2008 2007 2008 2007
Assets
EURO - 209,329 - 48.2470 Baht per Euro
USD - 105 - 34.1418 Baht per USD
Liabilities
EURO - 375,859 - 48.8301 Baht per Euro
USD - 139,990 - 34.3851 Baht per USD
AUD 388,275 - 27.5083 Baht per AUD -
38.5 Fair value
Fair value represents the amount for which an asset could be exchanged or a liability settled between
knowledgeable and willing parties in an arm�s length transaction. The Company and its subsidiaries have
estimated the fair value of financial instruments as follows:
(a) Financial assets
Determination of the fair value is dependent upon the characteristics of the financial instruments. The
fair values of most financial assets, including cash and cash equivalents, investments, trade accounts
receivable, project/service income receivables, and short-term lendings approximate their respective
carrying values since the values of such financial instruments are predominantly subject to market
interest rates and/or have maturity periods of less than 1 year with the exception of long-term loans to
related parties, which bear fixed rates of interest and have repricing periods longer than 1 year. Financial
instruments with standard terms and conditions which are traded on an active and liquid market, such
as investments, have their fair value determined by the quoted market prices.
As at 30 September 2008, there were no material differences between the carrying value of financial
assets of the Company and its subsidiaries and their respective fair value, except that the fair values of
the Company�s long-term loans to related parties amounting to approximately Baht 285 million.
As at 30 September 2007, there were no material difference between the carrying value of financial
assets of the Company and its subsidiaries and their respective fair value.
104 Annual Report 2008
The fair value of long-term loans to related parties is estimated by discounting the cash flows expected
to be received by the Company on those loans by the current market interest rates.
(b) Financial liabilities
The fair values of financial liabilities, including trade accounts payable, advance received, short-term
and long-term loans, liabilities under finance lease agreements, debentures and retentions payable,
are the amounts as stated in the balance sheets due to the same reasons as described for financial
assets with the exception of long-term loans from financial institutions, long-term loans from a related
party and debentures bearing fixed rates of interest and having repricing periods of longer than 1 year.
As at 30 September 2008, there were no material differences between the carrying value of financial
liabilities of the Company and its subsidiaries and their respective fair value, except for the Company�s
and it subsidiaries� long-term loans from financial institutions having the fair values of approximately
Baht 2,750 million (the Company only: Baht 2,544 million).
As at 30 September 2007, there were no material differences between the carrying value of financial
liabilities of the Company and its subsidiaries and their respective fair value, except for long-term loans
from financial institutions having fair value of approximately Baht 1,827 million (The Company only: Baht
1,426 million).
The fair value of long-term loans from financial institutions is estimated by discounting the cash flows
expected to be used to repay principal and interest to the lenders by the Company and its subsidiaries
by the current market interest rates.
39. Reclassification
The Company have reclassified certain amounts in the financial statements for the year ended 30 September
2007 to conform to the current year�s classification with no effect on previously reported net income or
shareholders� equity.
40. Subsequent event
On 20 October 2008, the Company was sued as a defendant in a litigation case for the breach of hire of work
contract for construction, whereas the plaintiff has caimed damages of Baht 40.2 million with the Civil Court.
Currently, the Company is being under the preparation of answer to the allegation as made in the court and the
court has designated the settlement of issues as well as the proceedings for taking of the plaintiff�s evidence
on 26 January 2009.
41. Approval of financial statements
These financial statements were authorised for issue by the Company�s Board of Directors on 20 November
2008.
Annual Report 2008 105
A resolution was passed by the ordinary general shareholders meeting on January 24, 2008 to appoint Mrs. Saifon
Inkaew, License No. 4434 or Ms. Rattana Jala, License No. 3734 or Mrs. Kamonthip Lertwitworathep, License No.
4377 the Company�s Auditor. One of these three persons will audit the Company�s financial statements for the 12-
month period starting on 1 October 2007 and ending on 30 September 2008 and provides opinions thereon on behalf
of Ernst & young Office Limited. The Auditor�s fee exclusively for the Company was set at Baht 870,000 (the total
Auditor�s fee for both the Company�s financial statements and the consolidated financial statements was Baht
3,000,000).
Auditor’s Fee
106 Annual Report 2008
Eastern Water Resources Development and management Public Company Limited
Head Office�s Address 1 Vipavadeerangsit Soi 5, Vipavadeerangsit Road, Jompol, Jatuchak,
Bangkok 10900
Company Registration PLC. 623
Tel. (662) 272-1600
Fax. (662) 272-1601-3
Core Business Develop and manage water resources through raw water pipeline distribution
to customers, provide consultancy services on clean water production and
pipeline distribution system in industrial estates or factories, repair and supply
all kinds of equipment and materials related to water distribution, provide
consultancy services on the maintenance of pipelines, equipment and
machinery, and participate in joint-venture projects with private sector.
Number of Employees As of 30 September 2008, the company had 137 employees in total. This
consisted of 101 head office�s staffs, 23 Rayong Operation center�s staffs and
17 Chachoengsao Operation center�s staffs.
Date of listing in the June-July 1997 with an initial offering in the Stock Exchange of Thailand on
Stock Exchange of Thailand 28th July 1997
Type and Volume of Shared Offered 1,663,725,149 ordinary shares with a par value of 1 bath/share
Registered and Paid-up Capital 1,663,725,149 bath registered capital consisting of 1,663,725,149 ordinary
shares with a par value of 1 bath.
Subsidiaries
Water Trades and Services Co., Ltd.
Head Office�s Address 1 Vipavadeerangsit Soi 5, Vipavadeerangsit Road, Jompol, Jatuchak,
Bangkok 10900
Company Registration No. 0105550058714
Date 6 June 2007
Tel. (662) 272-1600
Fax. (662) 272-1602
Core Business Sort out the management of coined operated water-vending machine
Number of Employees As of 30 September 2008, the company had 3 employees in total.
Type and Volume of Shared Offered 500,000 ordinary shares with a par value of 10 bath/share
Registered and Paid-up Capital 5 million bath registered capital all of which is paid-up capital
General Information
Annual Report 2008 107
Universal Untilities Company Limited.
Head Office�s Address 23-25 floor, Eastwater Building, 1 Vipavadeerangsit Soi 5,
Vipavadeerangsit Road, Jompol, Jatuchak, Bangkok 10900
Company Registration No. 0105541077817 dated 15th December 1998
Tel. (662) 272-1688
Fax. (662) 272-1690-2
Core Business Manage waterworks business and wastewater treatment system in the form of
concession, hiring contract or leasing contract, provide engineering services
related to core business with the mission to be a leader of Thai-owned
waterworks business in terms of production capacity, quality of services
focusing on personnel expertise and technological development that enhances
the organization�s efficiency and international competitiveness under the
principle of clean and environment-friendly technological development
Number of Employees As of 30 September 2008, the company had 125 employees in total. This
consisted of 37 head office�s staffs and 88 staffs in operational areas.
Type and Volume of Shared Offered 51,000,000 ordinary shares with a par value of 10 bath/share
Registered and Paid-up Capital 510 million bath registered capital all of which is paid up
Nakornsawan Water Supply Co., Ltd.
Head Office�s Address 23-25 floor, Eastwater Building, 1 Vipavadeerangsit Soi 5,
Vipavadeerangsit Road, Jompol, Jatuchak, Bangkok 10900
Company Registration No. 01005543098421 dated 19th October 2000
Tel./Fax (056) 355-789, (662) 272-1688, (662) 272-1690-2
Core Business Waterworks management including tap water production and supply to
Nakornsawan Waterworks and water uses services such as meter reading,
engineering services like pipeline maintenance
Number of Employees Included in Universal Utilities� employee number.
Type and Volume of Shared Offered 8,000,000 ordinary shares with a par value of 5 bath/share
Registered and Paid-up Capital 40 million bath registered capital all of which is paid up
Chachoengsao Water Supply Co., Ltd.
Head Office�s Address 23-25 floor, Eastwater Building, 1 Vipavadeerangsit Soi 5,
Vipavadeerangsit Road, Jompol, Jatuchak, Bangkok 10900
Company Registration No. 0105543098412 dated 19th October 2000
Tel. (038) 814-428-9, (662) 272-1690-2
Fax. (038) 814-728, (662) 272-1690-2
Core Business Waterworks management including tap water production and supply to
Chachoengsao Waterworks and water uses services such as meter reading,
engineering services like pipeline maintenance
Number of Employees As of 30 September 2008, Included in Universal Utilities� employee number.
Type and Volume of Shared Offered 10,000,000 ordinary shares with a par value of 10 bath/share
Registered and Paid-up Capital 100 million bath registered capital all of which is paid up
108 Annual Report 2008
Bangpakong Water Supply Co., Ltd.
Head Office�s Address 23-25 floor, Eastwater Building, 1 Vipavadeerangsit Soi 5,
Vipavadeerangsit Road, Jompol, Jatuchak, Bangkok 10900
Company Registration No. 0105543098439 dated 19th October 2000
Tel./Fax (038) 840-786, (662) 272-1688, (662) 272-1690-2
Core Business Waterworks management including tap water production and supply to
Bangpakong Waterworks and water uses services such as meter reading,
engineering services like pipeline maintenance
Number of Employees As of 30th September 2007, Included in Universal Utilities� employee number.
Type and Volume of Shared Offered 4,000,000 ordinary shares with a par value of 10 bath/share
Registered and Paid-up Capital 40 million bath registered capital all of which is paid up
Eastern Hobas Pipes Co., Ltd. As of 31 March 2008 East Water sold ordinary shares, 50% of EHP�s paid up
capital 2 to Cisco Products Group Co., Ltd.
Head Office�s Address 9/9 Vipavadeerangsit Road, Talad Bangkhen, Laksi, Bangkok 10210
Company Registration No. 10254500592 dated 18th June 2002
Tel. (662) 940-8351, 940-8358
Fax. (662) 272-8744
Core Business Produce and supply CC-GRP pipes for raw water, tap water and wastewater
businesses
Other Company
Egcom Tara Company Limited
Head Office�s Address EGCO Tower, 222 Vipavadeerangsit Rd. , Tungsong hong, Laksi, Bangkok
10210
Company Registration 0105942029417
Tel. (662) 998-5000, 998-5999
Fax. (662) 955-0945
Core Business Produce and supply tap water
Registered and Paid-up Capital 345 million bath registered capital consisting of 34.5 million ordinary shares
with a par value of 10 bath/share all of which is paid up
Annual Report 2008 109
Auditor
Mrs. Saifon Inkaew CPA Registration No.4434
East & Young Office Limited
Head Office�s Address 33rd
Floor, Lake Rajada Office Complex, 193/136-137 Rajadapisek Rd.,
Klongtoey, Bangkok 10110 (PO Box 1047, Bangkok 10501)
Tel. (662) 264-0777, 661-9190
Fax. (662) 264-0789, (662) 661-9192
Other Reference
Thailand Securities Depository Co., Ltd.
Head Office�s Address 4th and 6
th-7
th Floor, 62 Stock Exchange of Thailand Building, Rachadapisek
Rd., Klongtoey, Bangkok 10110 (PO Box 1047, Bangkok 10501)
Tel. (662) 229-2800, 654-5599
Fax. (662) 359-1259
110 Annual Report 2008
No. Shareholder Number of Shares Percentage
1 The Provincial Waterworks Authority 668,800,000 40.20%
2 The Electricity Generating Public Company 311,443,190 18.72%
Limited (EGCO)
3 Norbax Inc.,13 168,372,100 10.12%
4 The Industrial Estate Authority of Thailand 76,000,000 4.57%
5 State Street Bank and Trust Company for 39,347,300 2.37%
London
6 Morgan Stanley & Co. International Plc. 32,954,900 1.98%
7 Thai NVDR Company Limited 30,405,350 1.83%
8 Somers (U.K.) Limited 22,313,700 1.34%
9 Aberdeen Growth Fund (Open-end Fund) 22,124,800 1.33%
10 Aberdeen Long Term Equity Fund (Open-end Fund) 16,216,400 0.97%
Total 1,663,725,149 100.00%
First 10 Major Shareholders
Annual Report 2008 111
Dividend Payment Policy
The Company has a policy to propose to the shareholders� meeting to consider paying dividend at no less
than 30% of the net profit of the consolidated financial statements after deduction of the reserve as required by the
law and of other necessary items as the Company deems appropriate.
112 Annual Report 2008
Eastern Water Resources Development and Management Public Company Limited had one connected
transaction in 2008 to be disclosed as required of a listed company as follows:
The Company sold raw water to six waterworks under the Provincial Waterworks Authority, namely Laem
chabang, Pattaya-Na Klue, Sriracha, Banchang, and Chonburi Waterworks and Nong Klang Dong Purification Plant,
to be used for production of water, which is used for consumption and sold to the general public, the business sector,
and Laemchabang Industrial Estate operating for supplying to the Industrial Estate in Laemchabang area . The price
was adjusted to come down to 7 Baht per cubic meter from May to December 2008. Such transaction was a normal
business transactions without trading conditions. Details are as follows:
Date of Transaction and Parties Involved
1. Dates of Transaction: May-December 2008
2. Parties involved:
Seller: Eastern Water Resources Development and Management Public Company Limited
Buyers: Provincial Waterworks Authority and Industrial Estate Authority of Thailand
Value of Transactions and Valuation Criteria
The value of transactions in the Company�s sale of raw water to six waterworks and Laemchabang Industrial
Estate at 7 Baht/m.3 during May-December 2008 amounted to 329.84 million Baht or 5.95% of its net tangible assets
as of 31 March 2008.
Details of Connected Parties
1. PWA, a shareholder of the Company held 668,800,000 shares (40.20%) of the Company as of 30 June 2008.
2. The Industrial Estate held 76,000,000 shares (4.57%) of the Company as of 30 June 2008
3. Pol. Lt. Gen. Somyot Poompanmoung was holding the position of PWA director and Company director
4. Mr. Nattachak Pattamasingh Na Ayuthaya was holding the position PWA director and Company director
5. Mr. Chakarn Saengruksawong was holding the position PWA director and Company director
6. Mrs. Monta Pranootnorapal was holding the position of the Governor of IEAT
Nature of Transactions and Connected Parties� Interest
Such transactions are considered to be a transaction prescribed in the notification of SET regarding disclosure
the information and operation of the listed company in categories of connected transactions B.E. 2546 as normal
business transactions without trading conditions. The Company requested for and was granted shareholders� approval
of such transactions in the Extraordinary General Shareholder Meeting No. 2/2008 on 25 August 2008.
Connected Transactions
Annual Report 2008 113
1. An independent director holds less than 1 percent of all of the shares with voting rights in the Company, any of its
subsidiaries, an affiliated company, or anyone who may have a conflict of interest with the Company (including
the persons listed under Section 258 of the Securities and Exchange Act, No. 4, B.E. 2535).
2. An independent director is not related by blood or by law as a parent, a spouse, a sibling, a child, or a spouse of
a child of a Company executive member, a major shareholder, a person in control, or a person to be nominated
as an executive member of a person in control of the Company or its subsidiaries.
3. An independent director does not take part in the management of the Company, a subsidiary, an affiliated
company, a subsidiary of the same tier or a juristic person who may have a conflict of interest with the Company,
at present and during the two years period prior to the appointment as an independent director.
4. An independent director does not have any business relationship with the Company. An auditor may not be
nominated an independent director. For other professional service providers such a as a legal advisor, a financial
advisor, an asset appraiser, the value involved must not exceed 2 million Baht per year. Details of relationship
must be as defined by the SEC as follows:
A. Nature of relationship
Professional Service Relationship
1. Auditors and other professional service providers such as legal advisors, financial advisors, asset
appraisers.
2. Significant level of non-independence
- Auditor: Prohibited under any circumstance
- Others: value not exceeding 2 million Baht per year.
Trade/Business Relationship (Use the same SET�s guideline for connected transaction)
- Nature of relationship: Covering all types of business items, i.e. normal transactions; renting/renting
out immovable property; items relating to service assets; and items about providing or receiving
financial assistance.
- Significant level of non-independence: Items value exceeding or equal to 20 million Baht, or
exceeding or equal to 3% of net tangible assets, whichever is lower.
B. In the case of the relationship under A. with a juristic person, major shareholders and directors (except
independent directors/ audit committee members) are deemed non-independent.
C. Relationship under A and B is prohibited at present and two years prior to the appointment.
Definition of Independent Director
114 Annual Report 2008
Activities in 2008
Personnel
As of 30 September 2008, there were 137 employees with 135 being permanent employees, and 2 being
employees on contracts. Of the 135 permanent staff, 10 were executive members.
Human Resource Development Policy
The Company�s vision is �to be a leader in valued water management for sustainable economic and social
progress�. Moreover, one of the Company�s strategies is to be a learning organization that emphasizes continuous
development. It is apparent that the Company gives significance to human resource development and aims at
developing its employees to their full potential by enhancing their knowledge and competence, promoting their
career advancement, and offering them appropriate compensation. Other measures include improvement of quality
of life and environment and integrated enterprise system development.
In addition to providing training, the Company�s personnel development scheme includes in-company learning
and overseas study trips to expand their world view and apply what they learn from the trips to further develop their
work. This is because the Company realizes that employees are valued assets and a key driving force that helps the
Company to achieve its business goals. The Company therefore has made it a policy to support personnel development
at all levels. This means general work skills as well as specialized knowledge and technology required for different
aspects of work. Emphasis is also placed on development of work behavior, which is a core competency, to be
consistent with the Company�s vision, mission, and corporate value.
The Company has spent 14.70 million Baht, or 0.7% of the Company�s total revenue, on promotion and
support of personnel development in various aspects as follows:
1. A budget has been allocated for internal training, external training by sending employees to attend
training programs of reputable institutions, and continued learning for work skills/management skills
development for employees at all levels on a continuous basis.
2. Management Development Program, organized jointly with Sasin Graduate Institute of Business
Administration of Chulalongkorn University, for executive members� competency development with
respect to business, finance, marketing, and organization management to ensure their management
professionalism to cope with the growth of the Company.
3. On going English training programs for employees at the mid-management level, including Presentation
Skills development.
Annual Report 2008 115
4. �The 7 Habits of Highly Effective People� Program has been organized for employees at all levels so that
they will have understanding and effective work behavior, and achieve their work goals.
5. Information Technology Training Program has been organized for employees to be prepared for
information systems and technological advancement.
6. Training and dissemination of news on quality, environment, and occupational health and safety, Labor
Protection Act (No. 2) B.E. 2551 in compliance with the law and regulations and in line with its quality
standards.
7. Promotion and support are given to employees to learn and acquire knowledge on their own to increase
their competencies and work efficiency.
8. Training and other activities are organized to promote internal team work in line with East Water�s corporate
value.
Water Management Capacity Increase
Water management must continue to respond to the increase in water users in all sectors. Water consumption
in 2009 is expected to increase by more than 5%. Water distribution in Rayong Province has been already at a high
efficiency level due to the Dokkrai, Nong Plalai, and Khlong Yai reservoirs contained water to their full capacity.
However, in Chonburi Province, water management capacity was increased by pumping about 10 million cubic
meters water from the Bangpakong River to Bang Phra Reservoir to be used during the dry season. Another 3 million
cubic meters of water was pumped to Company�s water reserve pond at Phanatnikhom District in Chonburi Province
to be used in Chachoengsao Province during the drought. Moreover, agreements were made to buy 6 million cubic
meters of water from other private entities to be distributed in Chonburi and Chachoengsao Provinces. Such capacity
increase also benefited Rayong Province as it was possible to decrease the volume of water pumped and diverted to
Chonburi Province by 30% when compared to the previous year.
116 Annual Report 2008
Special Projects
With its extensive experience in water management and a team of engineering experts, the Company had
an integrated water management business development plan that could respond to the diverse and comprehensive
demands of customers in the household and industrial sectors. Foreseeing an imminent energy cost increase, the
Company conducted a feasibility study on investment in the energy business, in particular, the alternative energy
business, to increase sources of revenue and reduce the dependence on sales of water as the main source of
income. Studies were also conducted on investment opportunities in other countries such as Vietnam, China,
India, Laos and other countries with potential for water and alternative energy businesses.
Customer Relationship Management
Service Excellence
In 2008, East Water did not only change its corporate identity but also modified its management structure.
The Sales and Marketing Division was established under the Marketing Communications Department to focus on
reaching out to customers and strengthen the relationship with them, because the Company believed that
understanding and participation would result in good relationships, business strength, and customers� confidence
in the brand East Water.
A Customer Service Team (CST) was established consisting of personnel from sales, operations and
planning departments. The CST will listen to, follow up, rectify and manage customers� problems systematically
and efficiently. Moreover, there were other activities to build up good relationships with customers and follows:
An annual event to thank water users
was held to allow the Company�s management to meet
all water users and keep them informed of the
Company�s activities.
Annual Report 2008 117
Anniversary celebration events of various agencies
such as the Irrigation Department, Provincial
Waterworks Authority, Industrial Estate Authority of
Thailand, and Hemarat Land Development Public
Company Limited
Joint activities with customers for improvement of quality of life and the environment
Social functions with executives of
water users
were organized to allow top
management of both sides to meet
and share their views and
recommendations. These events
provided opportunities for
business expansion and opened
up direct communication
channels between top
management.
• Beautiful Canal, Clean Water and Care for the
Environment Program to promote the use of
microorganisms for community wastewater treatment
in the Laem Chabang Municipality.
• The Green Hospital Project with Queen Sirikit Hospital
to promote planting of trees and economical use of
natural resources
118 Annual Report 2008
Quality of Life and Environment
Community engagement high on agenda
Participation of the public sector and the community was the key factors behind the success of the Company�s
quality of life and environment development program.
Clean Water for the Community Project
In recognition of value of water resources and in an effort to mitigate the difficulty faced by the community, East Water
has organized the following activities:
• Digging the Dokkrai community weir in Rayong Province. The objective of this project was to increase its
storage capacity. This activity allows more than 150 households or 700 people to in the community to
benefit from the weir.
Young Leaders� Camp and Scholarships
East Water has a policy to place emphasis on education of youths in its operating areas, believing that they strengthen
their local communities in the future. In view of this, in 2008 the �Young Leaders Camp for Conservation of Water
Resources and Environment� Project was initiated, starting with Rayong Province. Mr. Chitpong Rittiprasat, the
Governor of Rayong Province was invited to be the Chairman of the project. A total of 360 teachers and students
from 60 schools in Education Area 1 and Area 2 participated in the program. Each of the students attending this
camp received a scholarship of 10,000 Baht, presented to them on the EWG Family Day in Rayong Province. The
event was attended by over 800 guests including chiefs of government agencies, teachers and parents/guardians
who extended their best wishes for the success of the program.
Annual Report 2008 119
• Providing over 120,000 cups of
water
in support of activities for public
benefits organized by various
agencies/organizations.
• Drinking water mobile units
to provide drinking water to communities
experiencing shortages of clean water.
• Offering 333 reversed osmosis water dispensing
machines to government agencies and foundations.
This is an ongoing program.
• Offering water containers to the community.
One hundred 2,000-liter tanks were given to schools,
temples, and communities in 54 locations to alleviate
the problem of shortage of clean water for
consumption and to store water for the dry season.
In addition to the above mentioned programs, East Water also provides support to quality of life development activities
organized by customers, government agencies, or charity organizations such as the landscape improvement project
�Rak Thang � Rak Thin� of the Rural Highway Department in Rayong province. We also support sports and traditional
activities organized by local communities in Rayong, Chonburi and Chachoengsao Provinces.
• Digging out hyacinth in the Nakhon Nuang Khet Canal
in Chachoengsao Province.
This was a program to revive the water condition and
lessen the problem of wastewater flowing to Tha Khai
Watergate and eventually to the Bangpakong River.
The project also allows local residents to make full
use of water transport.