The Opinion of Independent Financial Advisor - listed...

The Opinion of Independent Financial Advisor

CH. Karnchang Public Company Limited

On the Disposition of Assets Transaction

Regarding the Disposal of the Ordinary Shares in Thai Tap Water Supply Public Company Limited

By

Trinity Advisory 2001 Company Limited

January 21, 2013

Attachment 3



Table of Content Page

Executive Summary 3

Section 1 General Characteristics of the Transaction

1.1 Objective of the Transaction 1.2 Transaction Period 1.3 Involved Parties and Relationship with Listed Company 1.4 Total Value of the Transaction 1.5 Type and Size of the Transaction

6

Section 2 Details of Disposed Assets

2.1 Thai Tap Water Supply Public Company Limited

10

Section 3 General information of the Seller and the Buyer

3.1 CH. Karnchang Public Company Limited – the Company / Seller 3.2 Bangkok Expressway Public Company Limited – Buyer

40

Section 4 Reasonableness of the Transaction

4.1 Objective of the Transaction 4.2 Advantages and Disadvantages from Entering into the Transaction 4.3 Advantages and Disadvantages from Not Entering into the Transaction

57

Section 5 Appropriateness of the Transaction’s Price and Conditions

5.1 Book Value Approach 5.2 Adjusted Book Value Approach 5.3 Volume Weighted Average Market Price Approach 5.4 Market Comparable Approach

5.4.1 Price to Book Ratio Approach 5.4.2 Price to Earnings Approach 5.4.3 EV/EBITDA Approach

5.5 Discounted Cash Flow Approach- DCF 5.6 Summary of Share Valuation 5.7 Appropriateness of the Transaction’s Price 5.8 Appropriateness of the Transaction’s Conditions

61

Section 6 Opinion of the Independent Financial Advisor 98



Abbreviations

The Company or CK CH. Karnchang Public Company Limited TTW Thai Tap Water Supply Public Company Limited PTW Pathum Thani Water Company Limited TWO Thai Water Operations Company Limited CKP CK Power Limited SEAN SouthEast Asia Energy Limited NN2 Nam Ngum 2 Power Company Limited BKC Bangkhenchai Company Limited NRS Nakhon Ratchasima Solar Company Limited CRS Changrai Solar Company Limited BIC Bangpa-in Cogeneration Limited BECL Bangkok Expressway Public Company Limited BLDC Bangpa-in Land Development Company Limited EDL Electricite du Laos RATCH Ratchaburi Electricity Generating Holding Public Company Limited PTT PTT Public Company Limited PWA Provincial Waterworks Authority EGAT Electricity Generating Authority of Thailand PEA Provincial Electricity Authority IEAT Industrial Estate Authority of Thailand Trinity or the IFA Trinity Advisory 2001 Company Limited SET The Stock Exchange of Thailand SEC The Securities and Exchange Commission The Notification of Acquisition or Disposal of Assets The Notification of the Capital Market Supervisory Board No.

Tor Chor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets B.E. 2547 (2004)


CH. Karnchang Public Company Limited Page 1

-TRANSLATION-

The English Translation of the Independent Financial Advisor’s Opinion has been prepared solely for the convenience of foreign shareholders of CH. Karnchang Public Company Limited and should not be relied upon as the definitive and official document. The Thai language version of the Independent Financial Advisor’s Opinion is the definitive and official document and shall prevail in all aspects in the event of any inconsistency with this English Translation

January 21, 2013

Re: Opinion of the Independent Financial Advisor on disposition of assets regarding to the disposal of

ordinary shares of Thai Tap Water Supply Public Company Limited To: Shareholders of CH. Karnchang Public Company Limited

With regards to the Board of Directors’ Meeting of CH. Karnchang Public Company Limited (the “Company” or “CK”) No. 6/2012 on December 19, 2012, the Board of Directors of the Company passed a resolution to approve the transaction regarding the disposition of 438,900,000 ordinary shares of Thai Tap Water Supply Public Company Limited (“TTW”) , representing 11.00% of registered and paid-up capital, at THB 7.55 per share, total value of THB 3,313,695,000 to Bangkok Expressway Public Company Limited (“BECL”) and proposed to have the Transaction considered for approval by the Company’s shareholders’ meeting in the Extraordinary General Meeting of Shareholders (“EGM”) No. 1/2013, which will be held on February 5, 2013. However, by entering into the Transaction, the Company will decrease in shareholding in TTW shares from 30.04% to 19.04% of registered and paid-up capital.

Moreover, this Transaction shall be deemed as a disposition of assets transaction as prescribed in The Notification of the Capital Market Supervisory Board No. Tor Chor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets B.E. 2547 (2004) (the “Notification of Acquisition” or “Disposal of Assets”). Total value of the Transaction is THB 3,313,695,000 is equal to 976.37%, obtained the maximum value from the calculation of the transaction size via net profit basis in accordance with the Notification of Acquisition or Disposal of Assets. Such transaction is classified as Type 1 Transaction. The Company is required to disclose details of the Transaction to the Stock Exchange of Thailand (the “SET”) and seek approval from shareholders’ meeting with affirmative votes of not less than three-fourths of the total number of votes of the shareholders attending the meeting and having the rights to vote, excluding the votes of the shareholders with conflict of interest. Moreover, an independent financial advisor shall be appointed in order to provide an opinion to the Company’s shareholders regarding the reasonableness of the Transaction, the appropriateness of the Transaction’s price and conditions as well as



a recommendation as to whether the shareholders resolve to agree or disagree with the Transaction with supporting rationales.

According to the Notification of Resolutions of the Board of Directors’ Meeting No. 6/2012 on December 19, 2012, the Board of Directors of the Company has approved the appointment of Trinity Advisory 2001 Company Limited (“Trinity” or the “IFA”) to be the independent financial advisor of the Company in rendering opinion regarding the disposition of assets transaction. And Trinity is approved as a financial advisor by the Office of the Securities and Exchange Commission (“SEC”) and does not have a relationship with the Company, its subsidiaries, its related companies as well as a related counterparty of the Transaction, who affect to the independence in rendering opinions to the shareholders.

The IFA has rendered its opinion with reference to the following sources of information: 1) Notification of Resolution of the Board of Directors’ Meeting No. 6/2012, which was he ld on

December 19, 2012 and Information Memorandum on Disposition of Shares in Thai Tap Water Supply Public Company Limited;

2) Information and documents obtained from the Company and its related companies including from interviews with the management and its assigned working team;

3) Information and documents obtained from various advisors of the Company and related companies;

4) Information of the Company and its related companies that are publicly disclosed such as annual reports, financial statements, annual disclosure forms and information in the SET;

The IFA’s opinion is based on the assumptions that all documents and information including the information obtained from interviews with the management of the Company and related companies, their assigned working teams and the publicly disclosed information that are used in the analysis in rendering the opinion in this report are accurately correct and currently perceivable on the date of this report. In case there are any changes or material events that may significantly affect the business operations and share valuation of TTW, which may affect the shareholders’ discretions to approve the Transaction. Shareholders may consider information, rationale and opinions on various issues stated herein this IFA report in consideration to cast the vote for approval of the Transaction. However, shareholders should use their own judgements with their discretion over the decisions regarding this approval.

The IFA renders opinion for the disposition of assets transaction of the Company on January 21, 2013. With respect to interests of the Company’s minority shareholders, the IFA shall affirm that all information as mentioned above has been thoroughly studied and cautiously analyzed with the prudent discretion of general accepted standards of practices.



Executive Summary

CH. Karnchang Public Company Limited (The “Company” or “CK”) intends to sell partially of its investment in Thai Tap Water Supple Public Company Limited (“TTW”) to Bangkok Expressway Public Company Limited (the “Transaction”). The proposed amount shall be 438,900,000 of ordinary shares in TTW, accounting for 11.00% of registered and paid-up capital at THB 7.55 per share. Total value of the Transaction shall be amounted to THB 3,313,695,000. The selling price is determined from discount of 5% from the average price for the past 60 business days up to December 17, 2012 on which both the contractual parties concluded their negotiation. BECL (buyer) shall make payment by cashier’s cheque or transfer cash via banking system on the Transaction date in the amount of THB 2,200,000,000. BECL shall make the remaining payment of THB 1,113,695,000 by April 2015. The payment shall be made into 5 installments, with semiannual basis of THB 200,000,000 each. The first payment shall be made within April 2013, whereas the last one shall be made within April 2015.

This Transaction on disposal of TTW shares shall be deemed as a disposition of assets transaction as prescribed in Notification of Acquisition or Disposal of Assets. With the reference to consolidated financial statements of the Company and TTW for the period ended September 30, 2012. The transaction size is equal to 976.37%, obtained the maximum value from the calculation via net profit basis in accordance with the Notification of Acquisition or Disposal of Assets. Such transaction is classified as Type 1 Transaction. The Company is required to disclose details of the transaction to the SET and seek approval from shareholders’ meeting with affirmative votes of not less than three-fourths of the total number of votes of the shareholders attending the meeting and having the rights to vote, excluding the votes of the shareholders with conflict of interest, according to the Notification of Acquisition or Disposal of Assets.

For consideration of the reasonableness of the Transaction’s Price of THB 7.55 per share, the IFA uses 2 approaches including the DCF and the volume weighted average market price. The DCF approach is derived from the DCF-based share value of each business unit (Sum of the Parts). The volume weighted average market price approach is conducted by the weighted averages of the close prices for the past 6 months to reflect TTW’s current fundamentals.

The IFA views that the proposed Transaction’s Price of 7.55 per share is reasonable. The fair value of TTW based on the DCF approach is THB 7.45 per share and the fair values of TTW based on the volume weighted average market price are range between THB 7.33 to 8.64 per share. It is higher than the fair value of THB 7.45 per share by THB 0.10, or 1.34% higher. In addition, the Transaction’s Price of THB 7.55 per share is higher than the fair value of THB 7.33 per share by THB 0.22, or 3.00% higher, and lower than the fair value of THB 8.64 per share by THB 1.09, or 12.62% lower.

The IFA performs the sensitivity analysis using key factors that significantly affect the equity values of TTW PTW and NN2. The result shows that the equity values of TTW are range between THB 7.26 to 7.63 per share; therefore, the Transaction’s Price of THB 7.55 per share is in the range based on the sensitivity analysis.



In addition, the IFA conducts sensitivity analysis in order to evaluate share price. The result shows that the equity values of TTW are range between THB 7.26 to 7.63 per share; therefore, the Transaction’s Price of THB 7.55 per share is in the range of the sensitivity analysis.

However, the Transaction’s Price of THB 7.55 per share is lower than the volume weighted average market price of THB 8.64 per share by THB 1.09, or 12.62% lower. The disposition of shares in TTW may lower profits compared with sales of the shares through the SET. The IFA considers average daily trading volumes of TTW, traded on the SET over the past one year until December 19, 2012, is 3,978,411.61 shares. The disposition of 438,900,000 shares in TTW may take long time, approximately 110 days. As a result, the sales of the shares through the SET may potentially be affected by the degree of uncertainty in terms of future share prices and trading volumes.

The IFA preferably uses the values obtained from the DCF approach for consideration of appropriateness of the Transaction’s Price; since, cash inflows and cash outflows of TTW and its subsidiaries and associated companies can be precisely projected among contracts including purchasing agreements, operation and maintenance agreements, concessions and loan agreements. As a result, the equity values of TTW using the DCF approach are range between THB 7.26 to 7.63 per share. The Transaction’s Price of THB 7.55 per share is higher than the equity value of THB 7.26 per share by THB 0.29, or 3.99% higher, and lower than the equity value of THB 7.63 per share by THB 0.08, or 1.05% lower.

The IFA considers Transaction’s conditions for an apropriateness of the payment condition in accordance with Draft of the Share Pruchase Agreement. The Company shall receive the payment on the Transaction date in the amount of THB 2,200,000,000 or 66.39% of the total amount. It shall make the remaining payment of THB 1,113,695,000 or 33.61% of the total amount by April 2015. The payment shall be made into 5 installments, THB 200,000,000 each as mentioned. This condition shall support the Company to sell all of proposed amount at once. As a result of the transaction on disposition of TTW shares, the Company will enhance liquidity and strengthen its capital structure. The Company shall lower its debt to equity ratio (“D/E ratio”) and net debt to equity ratio to an appropriate level in order to support new business opportunity with the competitive financial cost. By selling 11.00% of TTW shares, the Company shall realize gain on sale of the investment in TTW, amounting to approximately THB 2,221,000,000, whilst the value of remaining portion of 19.04% in TTW shall be booked by fair value and realized as accounting profit, estimating at approximately THB 4,795,000,000. Moreover, the Company shall use cash, received from sale of TTW, for repaying some debt and working capital in the business.The Company shall repay some debts with the amount of THB 1,723,000,000 (net from tax on gain in the investment from THB 2,200,000,000). Moreover, the Company shall use the remaining amount of THB 1,113,695,000 as its working capital in the business. In this respect, the liabilities are decreased, whereas the shareholders’ equity is increased. The Company shall obtain the ultimate objectives from selling all of proposed amount at once, where the capital structure is strengthen. The Company shall reduce current D/E ratio of 5.33x to an estimated D/E of 2.80x and the net debt to equity ratio of 2.64x to an estimated net debt to equity ratio of 1.33x.



With reference to the installment period between the Contractual Parties, the IFA considers an opportunity the Company may gain an interest income of the remaining payment of THB 1,113,695,000 from bank deposits, The Transaction will take place in 2013 after the Transaction is approved from the Shareholders’ Extraordinary General Meeting of the Company and BECL on February 5 and February 6, 2013, respectively. The IFA conducts an average interest rate of 3.22% based on the maximum fixed deposit interest rates of 3 months, 6 months and 12 months from the BOT. The result gives that the Company may lose an opportunity to gain the interest income from the remaining payment by THB 48,000,000 or 1.45% of the total transaction value of THB 3,313,695,000 or THB 0.10 per share. The equity value of TTW after subtracting the opportunity cost of THB 0.10 per share is THB 7.45 per share, equal to the fair value of TTW using the DCF approach and in the range between THB 7.26 to 7.63 per share using the sensitivity analysis.

The Contractual Parties concluded their negotiation that the seller has to transfer equity right in TTW to BECL (buyer) at the date of agreement or the date that the seller receives THB 2,200,000,000. Based on Transaction Conditions, if BECL could not make the payment, the Company shall sue BECL under law. However, BECL is a listed company and performs a strong financial position. TRIS Rating affirmed the company rating of BECL at A as of September 26, 2012. Moreover, when considering the BECL’s Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) in 2012 from annualized 9-month-financial-statement ended September 30, 2012, BECL’s EBITDA was THB 7,000,000,000 roughly with debt due within a year at THB 5,000,000,000 BECL has potential to meet the term of payment.

The IFA considers the fairness of the Transaction’s Price, Transaction’s Conditions and benefits for the Company. The IFA gives that the Transaction’s Conditions are reasonable.

With the reason regarding previously, the IFA recommends that the shareholders approve the Company to enter into the Transaction. Notwithstanding, the decision to vote in the shareholders’ meeting is solely dependable on the consideration and at the discretion of the shareholders. Shareholders should take the advantages, disadvantages and risks of the transaction as well as to carefully consider the documents attached herewith into consideration so as to make the most appropriate decision. The IFA renders opinion for the disposition of assets transaction of the Company. With respect to interests of the Company’s minority shareholders, the IFA shall affirm that all information as mentioned above has been thoroughly studied and cautiously analyzed with the prudent discretion of general accepted standards of practices.



Section 1 General Characteristics of the Transaction

CH. Karnchang Public Company Limited (the “Company” or “CK”), as a seller, mainly engages in construction business. The Company intends to sell an investment in Thai Tap Water Supply Public Company Limited (“TTW”) which engages in water production and distribution to the Provincial Waterworks Authority (“PWA”). TTW has expanded to engage in energy and environment businesses, namely waste water treatment and waste disposal.

Regarding energy business, TTW holds 30.00% of registered capital in CK Power Limited (“CKP”), established to operate as a holding company with the objective to restructure the investment portfolios in energy sector. CKP has an investment in SouthEast Asia Energy Limited (“SEAN”) who holds 75.00% of total shares of Nam Ngum 2 Power Company Limited (“NN2”). NN2 engages in generate and distribute electricity from hydro energy under concession, granted by The Lao People's Democratic Republic (“Lao PDR”). Moreover, CKP has an investment in Bangkhenchai Company Limited (“BKC”) Nakhon Ratchasima Solar Company Limited (“NRS”) and Changrai Solar Company Limited (“CRS”) who engage in operating power plant to generate electricity from solar energy and distribute to Provincial Electricity Authority (“PEA”) at the shareholding of 100.00%, 30.00% and 30.00% of total shares, respectively. Furthermore, CKP holds of 46.00% of total shares in Bangpa-in Cogeneration Limited (“BIC”), a small power producer from co-generation power system. Its electricity will be distributed to Electricity Generating Authority of Thailand (“EGAT”) 1.1 Objectives of the Transaction

The Company intends to sell 438,900,000 of ordinary shares in TTW, with a par value of THB 1 each, at THB 7.55 per share. Total value of the Transaction shall be amounted to THB 3,313,695,000. As a result of the transaction on disposition of TTW shares, the Company shall increase liquidity. Received cash from sale of TTW shares can be used as working capital in the business, to repay debts and to support the future investment. Moreover, the Company shall realize gain on sale of investment in TTW shares. In addition, since shareholding in TTW will be decreased by 11.00% of registered and paid-up capital to 19.04%, the Company shall reclassify the investments in TTW from an investment in associate to available-for-sale investments, and the Company has changed the value of investment method from the equity method to the fair value. In this respect, such fair value shall be calculated based, on the latest buying price as at the end of the period of the Stock Exchange of Thailand (the “SET”). Thus, the Company’s financial statements shall reflect the actual value of its investment.

With the reference to the Company’s management interviews together with its audited financial statements, the Company purpose to use proceeds from the disposition of the assets in TTW to repay debts, support its investments in construction projects in the future and strengthen its working capital structure. The Transaction shall benefit the Company to realize a profit on sale of investment in TTW shares for the period in Statements of Profit and Loss. The Company shall change the value of investment method from the equity method to the fair value due to the decrease in shareholding in TTW by 11.00% of



registered and paid-up capital from 30.04% to 19.04%. As a result, the Company shall decrease net debt and increase shareholder’s equity. 1.2 Transaction Period

The Company, as a seller, will proceed with the Transaction after receiving an approval from the Shareholders’ Extraordinary General Meeting No. 1/2013 which will be held on February 5, 2013 and BECL, as a buyer, receives an approval from the Shareholders’ Extraordinary General Meeting of BECL No. 1/2013 which will be held on February 6, 2013.

1.3 Involved parties and relationship with Listed Company

Buyer : Bangkok Expressway Public Company Limited (“BECL”)

Seller : CH. Karnchang Public Company Limited (“CK”)

Securities : The ordinary shares of Thai Tap Water Supply Public Company Limited (“TTW”), accounting for 11.00% of registered and paid-up capital

Relationship : ● The Company holds 116,669,550 shares in BECL, representing 15.15% of the registered and paid-up capital.

● Mr. Plew Trivisvavet holds the position of Chief Executive Officer of the Company and concurrently holds the position of Chairman of the Executive Board of BECL, whom the Company as a shareholder has delegated to oversee such juristic person.

● Mr. Plew Trivisvavet is not a controlling person in BECL.

1.4 Total value of the Transaction

Total value of the Transaction regarding disposition of TTW shares is equal to THB 3,313,695,000, determining from 438,900,000 shares, or equaling to 11.00% of registered and paid-up capital, at THB 7.55 per share, whereby BECL (buyer) shall make payment by cashier’s cheque or transfer cash via banking system on the Transaction date in the amount of THB 2,200,000,000. BECL shall make the remaining payment of THB 1,113,695,000 by April 2015, It shall make installments of 1) THB 200,000,000 by April 2013, 2) THB 200,000,000 by October 2013, 3) THB 200,000,000 by April 2014, 4) THB 200,000,000 by October 2014, and 5) the remaining installment by April 2015.

1.5 Type and size of the Transaction

With reference to the Notification of Resolution of Board of Directors’ Meeting of the Company No. 6/2012 on December 19, 2012, the Board of Directors of the Company passed a resolution to propose disposition transaction to the Company’s shareholders’ meeting for considering an approval to sell 438,900,000 shares of TTW, representing 11.00% of registered and paid-up capital, at THB 7.55 per share. Total value of the Transaction shall be amounted to THB 3,313,695,000. This Transaction shall



be deemed as a disposition of assets transaction as prescribed in the Notification of Acquisition or Disposal of Assets. The transaction size shall be calculated from the consolidated financial statements of the Company and TTW for the period ended September 30, 2012, reviewed by the certified public accountant (CPA). The details are as follows:

Basis of Calculation Size of Disposition Transaction (The Disposal of TTW Shares Transaction)1

Calculation Basis Calculation Transaction Size

1. Net Tangible Assets2 (NTA) Basis

% decrease in TTW shareholding x NTA of TTW x 100

NTA of the Company 14.75%

2. Net Profit Basis % decrease in TTW shareholding x Normalized net profit of TTW x 100

Normalized net profit of the Company 976.37%

3. Consideration Value Basis

Total value of consideration paid x 100

Value of assets of the Company 6.62%

4. Equity Share Value Basis

No. of shares issued for payment x 100

Total issued and paid-up shares of the Company

Not applicable because the Company does not

issue shares for payment

Remark: 1 The information used in the calculation of the transaction size regarding the disposition of assets transaction is derived from the consolidated financial statements of the Company and TTW for the period ended September 30, 2012, reviewed by the certified public accountant (CPA)

2 Net Tangible Assets (NTA) = Total assets – Intangible assets – Total liabilities – Minority shareholders The transaction size is equal to 976.37%, obtained the maximum value from the calculation via net

profit basis in accordance with the Notification of Acquisition or Disposal of Assets. Such transaction is classified as Type 1 Transaction. The Company is required to disclose details of the transaction to the SET and seek approval from shareholders’ meeting with affirmative votes of not less than three-fourths of the total number of votes of the shareholders attending the meeting and having the rights to vote, excluding the votes of the shareholders with conflict of interest, according to the Notification of Acquisition or Disposal of Assets.

In addition, the disposition transactions which are taken place during 6-month period prior to the transaction are considered for calculation of the transaction size in accordance with the Notification of Acquisition or Disposal of Assets. With reference to the Notification of Resolution of the Board of Directors' Meeting No. 5/2012 on November 14, 2012, the Board of Directors passed a resolution to approve the Company to sell all 63,019,999 ordinary shares in Bangpa-in Cogeneration Limited (“BIC”) to CK Power Limited (“CKP”), representing 46.00% of the registered capital, at THB 12.43 per share and sell all 875,250 ordinary shares in Changrai Solar Company Limited (“CRS”) to CKP, representing 30.00% of the registered capital, at THB 122.88 per share. Total value of disposition of shares in BIC and CRS are amounted to THB 783,338,588 and THB 107,550,720, respectively. The transaction size can be calculated as follows:



Basis of Calculation Size of Disposition Transaction (Disposition Transactions which Taken Place During 6-month Period prior to the Disposal of TTW Shares Transaction)1

Calculation Basis Calculation Transaction Size

1. Net Tangible Assets2 (NTA) Basis

% decrease in BIC/CRS shareholding x NTA of BIC/CRS x 100

NTA of the Company N/A

2. Net Profit Basis % decrease in BIC/CRS shareholding x Normalized net profit of BIC/CRS x 100

Normalized net profit of the Company N/A

3. Consideration Value Basis

Total value of consideration paid x 100

Value of assets of the Company 6.13%

4. Equity Share Value Basis

No. of shares issued for payment x 100

Total issued and paid-up shares of the Company

Not applicable because the

Company does not issue shares

for payment

Remark: 1 The information used in the calculation of the transaction size regarding the disposition of assets transaction is derived from the consolidated financial statements of the Company for the period ended June 30, 2012, reviewed by the certified public accountant (CPA) and the internal financial statements of BIC and CRS for the period ended June 30, 2012.

2 Net Tangible Assets (NTA) = Total assets – Intangible assets – Total liabilities – Minority shareholders The transaction size shall include transaction on disposition of shares in BIC and CRS. Transaction

size under the consideration value basis for transaction on BIC and CRS shares disposition is equal to 5.37% and 0.76% of total assets of the Company and its subsidiaries, respectively. When a 6-month accumulated transaction size is taken into consideration, the transaction size under the value for consideration shall be amounted to 12.75% of total assets of the Company and its subsidiaries, given that the Company will sell TTW shares at THB 7.55 each. However, calculation of transaction size by net tangible assets (NTA) basis and net profit basis could not be calculated, because of the restriction of financial data.



Current Shareholding Structure of the Company and Related Companies

Shareholding Structure of the Company and Related Companies after Entering into the Transaction

EDLSEAN

NN2

56.00%

75.00% 25.00%

30.00% 2.00%

33.33%

38.00%30.00%

30.04%

9.24%

15.15%CK BECL BLDCTTW

CKP RATCH Others

10.67%

BKCNRS

100.00%30.00%

PTWTWO

68.50% 98.00%

31.50%

PWA

2.00%

SonnedixThailand II

Limited

70.00%

BIC CRS

SonnedixThailand I

Limited

70.00%

30.00%46.00%

PTT IEAT

8.00%

19.00%

25.00%

Others

2.00%

Mitsui Water Holdings (Thailand) Company

Limited

25.98%

Others 34.74%

EDLSEAN

NN2

56.00%

75.00% 25.00%

30.00% 2.00%

33.33%

38.00%30.00%

15.15%CK BECL BLDCTTW

CKP RATCH Others

10.67%

BKCNRS

100.00%30.00%

PTWTWO

68.50% 98.00%

31.50%

PWA

2.00%

SonnedixThailand II

Limited

70.00%

BIC CRS

SonnedixThailand I

Limited

70.00%

30.00%46.00%

PTT IEAT

8.00%

19.00%

25.00%

Others

2.00%

Mitsui Water Holdings (Thailand) Company

Limited

25.98%

Others 34.74% 19.04%

20.24%



Section 2 Details of Disposed Assets

Details of disposed Assets

The Company intends to dispose 438,900,000 shares of TTW, equaling to 11.00% of TTW registered and paid-up capital, at THB 7.55 per share. Total value of this transaction is THB 3,313,695,000.

2.1 Thai Tap Water Supply Public Company Limited

2.1.1 Company Overview and Nature of the Business

Thai Tap Water Supply Public Company Limited (“TTW”) was established on September 11, 2000 with paid-up capital of THB 100,000, engaging in business of production and distribution of tap water to the Provincial Waterworks Authority (“PWA”) in the Samutsakorn Province including Krathumban District and Meuang District and the Nakhon Pathom Province including Sampran District, Nakhon Chaisri District. In the production process, fresh water from the Ta Chin River is used as the raw material. Tap water from Bang Len Water Treatment Plant is distributed via bulk transmission main (“BTM”) to Phutthamonthon Pumping Station and Mahachai Pumping Station. Tap water is then distributed via local distribution network (“LDN”) in Sampran office, Om Noi office and Samutsakorn office to consumers.

TTW’s first operation date is January 5, 2004. TTW has changed its status to a public company limited on July 6, 2006 and has been listed on the SET on May 30, 2008, classifying in resources industry energy & utilities sector. As of September 30, 2012, TTW’s registered and paid-up capital is THB 3,990,000,000, dividing into the amount of 3,990,000,000 shares, with a par value of THB 1 each.

TTW operates business under the Concession to operate treated water granted by the Ministry of Natural Resources and Environment for a period of 25 years, commencing on March 11, 2005. Moreover, TTW has signed Water Purchase Agreement with the PWA dated September 21, 2000, which covers a period of 30 years from July 21, 2004 to July 20, 2034. TTW shall operate on Build-Own–Operate (“BOO”) basis. As per the Agreement, TTW obligates to distribute tap water to the PWA at least at minimum off-take quantity (“MOQ”) as describe as follows:

Period Minimum Off-take Quantity (m3 /day) From July 21, 2004 to July 20, 2006 200,000.00 From July 21, 2006 to July 20, 2008 250,000.00 From July 21, 2008 to July 20, 2034 300,000.00

In addition, TTW sign an amendment agreement dated December 29, 2008. Under the amendment agreement, the PWA will increase its minimum off-take quantity (“MOQ”) as describe as follows.

Period Additional Portion of Minimum Off-take

Quantity (m3 /day) Within 660 days after the amendment agreement is signed or no later than October 19, 2010 to October 18, 2011

9,000.00

October 19, 2011 to October 18, 2012 18,000.00



Period Additional Portion of Minimum Off-take

Quantity (m3 /day) October 19, 2012 to October 18, 2013 27,000.00 October 19, 2013 to October 18, 2014 36,000.00 October 19, 2014 to October 18, 2015 45,000.00 October 19, 2015 to July 20, 2034 54,000.00

In 2007, in order to reduce the conflict from operating the same type of business, TTW acquired

11,759,735 shares, accounting for 98.00% of registered and paid-up capital in Pathum Thani Water Company Limited (“PTW”) from its major shareholders who are also TTW’s major shareholders. As a result, PTW was TTW’s subsidiary thereafter.

In 2009, TTW bought the rights to production, distribution and service in Bangpa-In Industrial Estate for a period of 30 years, from August 7, 2009 to August 8, 2039. Total value of the transaction was THB 1,400 million. In 2010, Thai Water Operations Company Limited (“TWO”) was established from merging between WaterFlow Company Limited, the subsidiary of TTW, and BJT Water Company Limited, the subsidiary of PTW. Currently, TTW holds 68.50% of registered and paid-up capital.

Shareholding structure of TTW

Remark : *2.00% of registered and paid-up capital holds by the PWA

Details of TTW, entities that TTW holds shares more than 10.00% as well as their core business operations are presented as follows:

Name of Companies Registered Capital

(THB million) % of Shareholding

of TTW Nature of the Business

30.00%

Pathum Thani Water Company Limited Registered capital THB 1,200.00 million

Paid-up capital THB 1,200.00 million

Thai Tap Water Supply Public Company Limited Registered capital THB 3,990.00 million


98.00%*

31.50%

68.50%

Thai Water Operations Company Limited Registered capital THB 60.00 million

Paid-up capital THB 60.00 million

CK Power Limited Registered capital THB 9,200.00 million






of TTW Nature of the Business

Pathum Thani Water Company Limited

1,200.00 98.00 Production and sale of tap water to PWA

Thai Water Operations Company Limited

60.00 68.50 Management of maintenance and testing the quality of tap water in accordance with the standards of production and distribution of tap water to PWA

CK Power Limited 9,200.00 30.00 Holding company, mainly investing in power business

In 2010, TTW has expanded the production capacity from 320,000 m3 per day to 440,000 m3 per day.

As of September 30, 2012, TTW’s minimum off-take quantity of tap water in accordance with the Water Purchase Agreement and its amendment agreement with PWA is 318,000 m3 per day.

In September 2011, TTW purchased 1,100,000 shares of CK Power Limited (“CKP”) from the Company, 1,200,000 shares from BECL, and 699,999 shares from Bangpa-In Land Development Company Limited. Therefore, TTW holds 30.00% of registered capitals in CKP, equaling to 3,000,000 shares. However, later in November, CKP increased its registered capital from THB 100,000,000 to THB 9,200,000,000. As for maintaining the shareholding in CKP at 30.00%, TTW acquired increased capital, accounting for 273,000,000 shares. Hence, TTW currently holds 276,000,000 shares in CKP. CKP operates as a holding company with the objective to restructure the investment portfolios in energy sector.

Summary of agreements and concessions of TTW are as follows:

Summary of Details of Agreement and Concession Thai Tap Water Supply Public Company Limited

1. Contract Party Contract Date Contract Duration Contract Type Terms of Contract

: : : : : :

Tap Water Purchase Contract Provincial Waterworks Authority (“PWA”) September 21, 2000 30 years (21 July 2004 – 20 July 2034) Build-Own-Operate (“BOO”) PWA will purchase tap water produced by the Company to distribute to consumers. The servicing area covers the whole Samutsakorn Province (including Krathumban District and Meuang District) and the area in Sampran District, Nakhon Chaisri District, Nakhon Pathom Province.

2. Contract Party Contract Date Terms of Contract

: : : :

Amendment in Tap water Purchase Contract Provincial Waterworks Authority (“PWA”) December 29, 2008 The Company’s total minimum of quantity purchased by PWA increases from 300,000 m3 per day to 354,000 m3 per day.

3. Concession Concession provider Concession Period

: : :

Tap Water Operating Concession Ministry of Natural Resources and Environment 25 years (March 11, 2005 – March 10, 2030)



Summary of Details of Agreement and Concession Rights under Concession

: To operate and distribute tap water in 5 districts, 2 provinces including: 1. Nakhon Pathom Province: Sampran District, Nakhon

Chaisri District, and Buddhamonthon District 2. Samutsakorn Province: Krathumban District and

Meuang District 4. Contract

Party Contract Date Terms of Contract

: : : :

Permission in Using Water from the Tha Chin River National Water Resources Board April 24, 2001 To pump water from the Tha Chin river (former name, Nakhon Chai Si river) to produce tap water of 320,000 m3 per day and distribute to consumers in Nakhon Pathom Province and Samutsakorn Province

5. Contract Party Contract Date Contract Duration Terms of Contract

: : : : :

Management and Maintenance Contract Thai Water Operations Company Limited January 26, 2007 Since the date of agreement to 2023 The party serves the maintenance unit.

6. Contract Party Contract Date Contract Duration Terms of Contract

: : : : :

Operation rights to Manage Water and Wastewater Bangpa-in Land Development Company Limited August 7, 2009 30 years (from first operation date to August 8, 2039) BIE transfers the exclusivity right to produce and sell tap water and wastewater treatment.

The subsidiaries and the associated companies of TTW

As of September 30, 2012, shareholding structure of TTW in its subsidiaries and the associated companies are presented as follows:

Remark : with reference to the Notification of Resolution of Board of Directors’ Meeting of the Company No. 5/2012 on November 14, 2012, the Board of Directors passed the resolution to sell all shares in BIC and CRS to CKP, representing 46.00% and 30.00% of registered capital, respectively.

SEAN

NN2

56.00%

75.00%

30.00%

TTW

CKP

BKCNRS

100.00%30.00%

PTWTWO

68.50% 98.00%

31.50%

BIC CRS

30.00%46.00%



Details of TTW’s subsidiaries

Pathum Thani Water Company Limited

- Company Overview and Nature of the Business

Pathum Thani Water Company Limited (“PTW”) was established on May 29, 1995 namely PCKT (Thailand) Company Limited, engaging in tap water production and distribution to PWA. The registered capital is THB 200,000,000 with par of THB 100 each. It was jointly founded with shareholding of the Company, Berli Jucker Public Company Limited, Capital Rice Company Limited, Bovis Limited and PWA at 30.00%, 30.00%, 15.00%, 15.00%, 5.00% and 5.00%, respectively.

In 2007, TTW acquired 10,698,283 and 1,061,452 shares of PTW in June and December, respectively. As a result, TTW become a 98.00% shareholder in its subsidiary, PTW.

As of September 30, 2012, PTW’s registered and paid-up capital is THB 1,200,000,000, dividing into the amount of 12,000,000 shares, with a par value of THB 100 each.

PTW engages in business of production and distribution of tap water to the PWA in Pathumthani - Rangsit areas. PTW has signed Water Purchase Agreement with the PWA dated August 31, 1995, which covers a period of 25 years from October 15, 1998 to October 16, 2023. PTW operates business under the Concession to operate treated water granted by the Ministry of Interior for a period of 25 years, commencing on January 13, 2000. In the production process, fresh water from the Chao Phraya River is used as the raw material. Tap water from Water Treatment Plant in Sam Khok is distributed via bulk transmission main (“BTM”) to Rangsit Pumping Station, Thammasat Pumping Station and Pathumthani Pumping Station. Tap water is then distributed via local distribution network (“LDN”) in Pathumthani office and Rangsit office to consumers.

Thank to the growth in demand of tap water in serviced area, PTW has signed Water Purchase Agreement with the PWA dated September 15, 2006 which covers a period until October 16, 2023. According to the Water Purchase Agreement, PWA agreed to purchase treated water at the minimum off-take quantity of 70,000 m3 per day in Rangsit area.

As of September 30, 2012, PTW has maximum capacity of 388,000 m3 per day. PWA has purchased treated water from PTW at the minimum off-take quantity of 330,000 m3 per day since August 1 2010.

Summary of agreements and concessions of PTW are as follows:

Name of Companies

Summary of Details of agreement and concession

Pathum Thani Water Company LImited


: : : : : :

Production and Distribution of Tap Water Contract Provincial Waterworks Authority (“PWA”) August 31,1995 25 years (October 15, 1998 – October 14, 2023) Build-Own-Operate-Transfer (“BOOT”) To distribute tap water not exceeding 288,000 m3



Name of Companies

Summary of Details of agreement and concession


: : : : : :

Sale and Purchase of Tap Water Contract Provincial Waterworks Authority (“PWA”) September 15, 2005 Since the date of agreement to October 14, 2023 Build-Own-Operate-Transfer (“BOOT”) Additional purchase of tap water at 70,000 m3 per day

3. Concession Concession provider Concession Period Rights under Concession

: : : :

Tap Water Operating Concession Ministry of Interior 25 years (January 13, 2000 – January 12, 2025) To operate and distribute tap water Pathumthani – Rangsit District, Pathumthani Province


: : : :

Permission in Using Water from the Chao Phraya River National Water Resources Board January 24, 1996 To pump water from the Chao Phraya river at 300,000 m3

per day 5. Contract

Party Contract Date Contract Duration Contract Type

: : : : :

Management and Maintenance Contract Thai Water Operations Company Limited January 26, 2007 Since the date of agreement to 2023 The party serves the maintenance unit.

- Board of Directors and Shareholding Structure

As of December 20, 2012, PTW’s Board of Directors is as follows:

No. Name Position 1 Mr. Sompodh Sripoom Chairman of the Boards of Directors 2 Mr. Somkiat Pattamamongkolchai Director 3 Ms. Oraphin Assawanik Director 4 Mr. Techapit Sangsingkeo Director 5 Mr. Phairuch Mekarporn Director 6 Mr. Hidekuni Nakayama Director

Source : BOL

PTW’s shareholders as of March 6, 2012 are as follows:

No. Name No. of Shares % 1 Thai Tap Water Supply Public Company

Limited 11,759,733 97.99

2 Provincial Waterworks Authority 240,262 2.00 Total 11,999,995 99.99

Source : BOL



Thai Water Operations Company Limited


Thai Water Operations Company Limited (“TWO”) was established from merging between WaterFlow Company Limited, the subsidiary of TTW, and BJT Water Company Limited, the subsidiary of PTW in January 8, 2010. TWO engages in management and maintenance of production and supply of treated water system and management of waste water system to TTW, PTW and Bangpa-in Industrial Estate. Moreover, TWO also provides a service to Amata City Industrial Estate, Rayong and Amata Nakhon Industrial Estate, Chonburi.

As of September 30, 2012, TWO’s registered and paid-up capital is THB 60,000,000, dividing into the amount of 600,000 shares, with a par value of THB 100 each.


As of December 20, 2012, TWO’s Board of Directors is as follows:

No. Name Position 1 Mr. Ratn Santaannop Director 2 Mr. Sompodh Sripoom Director 3 Mr. Tanat Siricharoen Director 4 Mr. Somkiat Pattamamongkolchai Director

Source : BOL

TWO’s shareholders as of March 8, 2012 are as follows:

No. Name No. of Shares % 1 Thai Tap Water Supply Public Company

Limited 411,000 68.50%

2 Pathum Thani Water Company Limited 188,999 31.49% Total 599,999 99.99%

Source : BOL

Details of TTW’s Related Companies

CK Power Limited


CK Power Limited (“CKP”) was established on June 8, 2011, to operate as a holding company with the objective to restructure the investment portfolios in energy sector. As of September 30, 2012, CKP’s shareholding in SEAN is 56.00%.

CKP was established on June 8, 2011 to operate as a holding company with the objective to restructure the energy business under CH. Karnchang Public Company Limited (“CK”) to be under one holding company in order to support the future expansion. As of September 30, 2012, CKP invests 56% of SEAN’ shares.



Pursuant to the Annual General Shareholder Meeting of CKP which was held on November 1, 2011, the shareholders have approved CKP to increase the capital from THB 100,000,000 to THB 9,200,000,000 by issuing 910,000,000 more common shares at the par value of THB 10 each. The objective is to settle the loan payment and arrears with the Company and to support the purchase of SEAN’s common shares from other shareholders at the price of THB 25 each.

With regards to Notification of Resolution of the Board of Directors of the Company on June 12, 2012, the Board of Directors passed an approval to sell all common shares in Bangkhenchai Company Limited (“BKC”) and Nakhon Ratchasima Solar Company Limited (“NRS”) to CKP. Later on September 12, 2012, the Board of Directors of the Company passed an approval to sell all common shares in Bangpa-in Cogeneration Limited (“BIC”) and Changrai Solar Company Limited (“CRS”) to CKP.

As of September 30, 2012, CKP’s registered and paid-up capital is THB 9,200,000,000, dividing into the amount of 920,000,000 shares, with a par value of THB 10 each.

Details of CKP, entities that CKP holds shares more than 10.00% as well as their core business operations are presented as follows:

Name of Companies Registered

Capital (THB million)

% of Shareholding of CKP

Nature of the Business

CK Power Limited 9,200.00 - Holding Company, mainly investing in power business

SouthEast Asia Energy Limited

6,606.75 56.00* A business of construction, design, control, advice provision, operation, installation, repair, maintenance, inspection, test, analysis and research on all types of power plants

Bangkhenchai Company Limited

234.25 100.00** A business of construction and operation of the project for electricity generation by solar energy, with a production capacity of 8 MW, to generate and distribute electricity to PEA. BKC has started to the operation since August 10, 2012.

Nakhon Ratchasima Solar Company Limited

221.50 30.00** A business of construction and operation of the project for electricity generation by solar energy, with a production capacity of 6 MW, to generate and distribute electricity to PEA. NRS has started to the operation since March 8, 2012.

Changrai Solar Company Limited

291.75 30.00*** A business of construction and operation of the project for electricity generation by solar energy, with a production capacity of 8 MW, to generate and distribute electricity to PEA. CRS has started to the operation since December 2012.



Name of Companies Registered

Capital (THB million)

% of Shareholding of CKP

Nature of the Business

Bangpa-in Cogeneration Limited

1,370.00 46.00*** A business of operation of the Small Power Producers (SPP) construction and management, with the production capacity of 120 MW, by the cogeneration system within Bangpa-in Industrial Estate to generate and distribute electricity to EGAT and industrial operators in Bangpa-in Industrial Estate. BIC is expected to start the operation in June 2013.

Remark : * CKP acquired more share of SEAN in August 2012 and become a 56.00% shareholder ** With the reference to the Notification of Resolution of the Board of Directors of the Company No. 2/2012 on June 12,

2012, the Board of Directors passed the approval to sell all common shares in BKC, representing to 100.00% of the registered company and sell all common shares in NRS, representing 30.00% of the registered capital to CKP

*** With the reference to the Notification of Resolution of the Board of Directors of the Company No. 5/2012 on September 14, 2012, the Board of Directors passed the approval to sell all common shares in BIC, representing to 46.00% of the registered company and sell all common shares in CRS, representing 30.00% of the registered capital to CKP


As of December 20, 2012, CKP’s Board of Directors is as follows:

No. Name Position 1 Mr. Plew Trivisvavet Director 2 Mr. Supong Chayutsahakij Director 3 Mr. Narong Sangsuriya Director 4 Mr. Prasert Marittanaporn Director 5 Mr. Sompodh Sripoom Director 6 Mr. Somkiat Pattamamongkolchai Director 7 Mr.Thanawat Trivisvavet Director 8 Mr. Thanong Bidaya Director 9 Mr. Techapit Sangsingkeo Director 10 Mr. Vicharn Aramvareekul Director 11 Mr. Kamphui Jeerararuensak Director 12 Ms. Supamas Trivisvavet Director

Source : BOL

CKP’s shareholders as of May 10, 2012 are as follows:

No. Name No. of Shares % 1 CH. Karnchang Public Company Limited 349,600,000 38.00 2 Thai Tap Water Supple Public Company Limited 276,000,000 30.00 3 Bangkok Expressway Public Company Limited 276,000,000 30.00 4 Bangpa-in Land Development Company Limited 18,400,000 2.00 Total 920,000,000 100.00

Source : BOL





SouthEast Asia Energy Limited (“SEAN”) has registered its incorporation on May 10, 2004 as a concessionaire of a 615 MW hydro power plant from the Nam Ngum 2 Dam. On March 14, 2006, the Concession Agreement for the Nam Ngum 2 Hydroelectric Power Project was executed with the Government of the Lao People’s Democratic Republic (“Lao PDR”), on a BOOT (Build-Own-Operate-Transfer) basis, under the concession period of 25 years from the Commercial Operation Date (“COD”). Upon expiration of the concession period, SEAN shall have the right under the Agreement to extend the period of time under the Agreement, subject to the terms and conditions to be agreed upon.

Subsequently, on April 21, 2006, SEAN established Nam Ngum 2 Power Company Limited (“NN2”) as a legal entity incorporated under the laws of the Lao PDR; and in January 2008, NN2 accepted the transfer of all rights in benefits and obligations under the main Agreement of the Nam Ngum 2 Hydroelectric Power Project from SEAN, and later, SEAN sold 25.00% of shares in NN2 to the Electricite du Laos. Therefore, SEAN and Electricite du Laos holds 75.00% and 25.00% of stake in NN2, respectively.

Details of SEAN, entities that SEAN holds shares more than 10.00% as well as their core business operations are presented as follows:



of SEAN Nature of the Business


6,606.75 - A business of construction, design, control, advice provision, operation, installation, repair, maintenance, inspection, test, analysis and research on all types of power plants

Nam Ngum 2 Power Company Limited

8,809.001 75.00 A concessionaire in electricity generation of Nam Ngum 2 dam

Remark : 1 Source from Financial Statement of SEAN for the period ended September 30, 2012, reviewed by the certified public accountant


As of December 20, 2012, SEAN’s Board of Directors is as follows: No. Name Position

1 Dr.Virabongsa Ramangkura Chairman of the Board of Director 2 Mr. Plew Trivisvavet Chairman of the Executive Committee 3 Mr. Narong Sangsuriya Director 4 Mr. Kamphui Jeerararuensak Director 5 Mr. Prasert Marittanaporn Director 6 Mr. Noppol Milinthanggoon Director 7 Mr. Milton William Shlapak Director 8 Mr. Van Huang Dao Director 9 Mr. Supong Chayutsahakij Director 10 Mr. Pheerawat Phumthong Director

Source : BOL



SEAN’s shareholders as of September 21, 2012 are as follows:

No. Name No. of Shares % 1 CK Power Limited 369.977,999 56.00 2 Ratchaburi Electricity Generating Holding Public

Company Limited 220,225,000 33.33

3 P.T. Construction & Irrigation Company Limited 35,236,000 5.33 4 Shlapak Development Company 35,236,000 5.33 5 Mr. Noppadol Intralib 1 0.01 Total 660,675,000 100.00

Source : A copy of list of shareholders of SEAN

Nam Ngum 2 Power Company Limited


Nam Ngum 2 Power Company Limited (“NN2”) was established on April 21, 2006 as a legal entity incorporated under the laws of the Lao People’s Democratic Republic (“Lao PDR”). All of the generated electricity will be distributed to the Electricity Generating Authority of Thailand (“EGAT”) under the 25-year purchase contract.

In January 2008, NN2 accepted the transfer of all rights in benefits and obligations under the main agreement of the Nam Ngum 2 Hydroelectric Power Project from SEAN. Under the agreement, NN2 would operate as a concessionaire of a 615 MW hydro power plant from the Nam Ngum 2 Dam under 25 years of power purchase agreement period from the Commercial Operation Date (“COD”).

The Nam Ngum 2 Dam is located in Baan Huay Mor in Vientiane, and approximately 35 kilometers upstream of the existing Nam Ngum 1 Dam. This concrete-faced rockfill dam has the crest length of 485 meters and dam height of 182 meters. The Nam Ngum 2 Dam is able to generate an annual electricity of 2,218 GWh. On the process of electricity generation, the generated electricity is sent through the transmission line of 230 KW to Na Bong substation, located 68 kilometers away, and then raised to 500 KW before transferred to the center of electricity distribution at Khong River. Eventually, within 27 kilometers, the electricity will reach at the Thai-Lao border area in Baan Jom Jang located in Nhong Kye before connecting to the electricity line of EGAT at the high voltage station in Udontani.

The Nam Ngum 2 Dam project is one of many dam projects, such as Nam Tern or Xayaburi, since Lao PDR aims to support its domestic investment and achieve its strategic plan in positioning its country as the Battery of Asia within 2020. However, there is the Nam Ngum 1 Dam, which has been generating electricity for more than 30 years, located in the same river.

As of September 30, 2012, NN2’s registered and paid-up capital is THB 8,809,000,000, dividing into the amount of 880,900,000 shares, with a par value of THB 10 each.




As of September 30, 2012, NN2’s Board of Directors is as follows: No. Name Position 1 Dr. Virabongsa Ramangkura Chairman of the Board of Director 2 Mr. Plew Trivisvavet Chairman of the Executive Board 3 Mr. Narong Sangsuriya Director 4 Mr. Prasert Marittanaporn Director 5 Mr. Thanawat Trivisvavet Director 6 Mr. Kamphui Jeerararuensak Director 7 Mr. Noppol Milinthanggoon Director 8 Mr. Peerawat Pumthong Director 9 Mr. Supong Chayutsahakij Director 10 Mr. Van Hoang Dau Director 11 Mr. Milton William Shlapak Director 12 Dr. Bounleua Sinxayvolavong Director 13 Than Sisavath Thiravong Director

Source : the Company

NN2’s shareholders as of September 30, 2012 are as follows:

No. Name No. of Shares % 1 SouthEast Asia Energy Limited 660,675,000 75.00 2 Electricite du Laos 220,225,000 25.00 Total 880,900,000 100.00

Source : the Company

Bangkhenchai Company Limited


Bangkhenchai Company Limited (“BKC”) is a power producer from solar energy for Provincial Electricity Authority (“PEA”) through the Power Purchase Agreement, dated July 28, 2009. With the accordance to the resolution of Energy Policy and Planning Office, dated March 9, 2009, BCK as a Very Small Power Producer (“VSPP”) for the generation using renewable energy shall receive adder at THB 8.00 per kWh, for the period of 10 years from commercial operation date (“COD”). BKC has started the operation since August 10, 2012.

With accordance with the Power Purchase Agreement, BKC agrees to sell electricity output at the maximum level of 8.00 MW, 22 kilovolt. The contract period is 5 years and automatically extended for 5 years and remains effective unless the termination.

As of July 4, 2012, BKC’s registered and paid-up capital is THB 234,250,000, dividing into the amount of 2,342,500 shares, with a par value of THB 100 each.

BKC’s power plant is located in Moo 8, Khok Thai, Pakthongchai District, Nakorn Ratchasima Province on area of approximately 180 rai or 79,000 m2. BKC’s solar power plant using thin film



solar module technology with the production capacity of 9 MW direct current (“DC”) or 8 MW alternate current (“AC”).

Moreover, BKC solar power plant production process accordingly operates to clean development mechanism (“CDM”). Thus, BKC appointed Carbon Partners Asiatica (Thailand) Company Limited in order to manage the sale of carbon credit. BKC has already requested from Certificate Emission Reduction. The Certificate shall be obtained soon.


As of June 22, 2012, BKC’s Board of Directors is as follows:

No. Name Position

1 Mr. Viboon Mongkolpiyathana Director 2 Mr. Vorapote Uchupaiboonvong Director 3 Ms. Supamas Trivisvavet Director 4 Mr. Sombat Trivisvavet Director

Source : NRS Affidavit

BKC’s shareholders as of July 4, 2012 are as follows:

No. Name No. of Shares % 1 CK Power Limited 2,342,498 100.00 2 Mr. Narong Sangsuriya 1 00.00 3 Mr. Vorapote Uchupaiboonvong 1 00.00 Total 2,342,500 100.00

Source : A copy of list of shareholders of BKC

Nakhon Ratchasima Solar Company Limited


Nakhon Ratchasima Solar Company Limited (“NRS”) is a power producer from solar energy for Provincial Electricity Authority (“PEA”) through the Power Purchase Agreement, dated December 15, 2009. On March, 2011, NRS accepted the transfer of all rights in benefits and obligations under the Power Purchase Agreement of Very Small Power Producer from Pacific Solar Company Limited. With the accordance to the resolution of Energy Policy and Planning Office, dated March 9, 2009, BCK as a Very Small Power Producer (“VSPP”) for the generation using renewable energy shall receive adder at THB 8.00 per kWh, for the period of 10 years from commercial operation date (“COD”). NRS has started the operation since March 8, 2012.

With accordance with the Power Purchase Agreement, NRS agrees to sell electricity output at the maximum level of 6.00 MW. The contract period is 5 years and automatically extended for 5 years and remains effective unless the termination.



NRS’s power plant is located in Dat Kun Tod District, Nakorn Ratchasima Province on area of approximately 300 rai. NRS’s solar power plant using thin film solar module technology with the production capacity of 7.5 MW direct current (“DC”) or 6 MW alternate current (“AC”).

Moreover, NRS solar power plant production process accordingly operates to clean development mechanism (“CDM”). Thus, NRS appointed Carbon Partners Asiatica (Thailand) Company Limited for managing the sale of carbon credit. NRS has already requested from Certificate Emission Reduction. The Certificate shall be obtained soon.

As of July 4, 2012, BKC’s registered and paid-up capital is THB 221,500,000, dividing into the amount of 2,215,000 shares, with a par value of THB 100 each.


As of May 11, 2012, NRS’s Board of Directors is as follows:

No. Name Position 1 Mr. Franck Bernard Constant Director 2 Mr. Andreas Haavel Mustas Director 3 Mrs. Aneesha Krishna Constant Director 4 Mr. Viboon Mongkolpiyathana Director 5 Mr. Vorapote Uchupaiboonvong Director

Source : NRS Affidavit

NRS’s shareholders as of July 2, 2012 are as follows:

No. Name No. of Shares % 1 Sonnedix Thailand I Limited 1,550,499 70.00 2 CK Power Limited 664,500 30.00 3 Mr. Franck Bernard Constant 1 00.00 Total 2,215,000 100.00

Source : A copy of list of shareholders of NRS

2.1.2 Revenue structure

The revenue structure of TTW and its subsidiaries for the year ended December 31, 2009 - 2011 and for the period ended September 30, 2012 is as follows:

Revenue Structure of TTW and its subsidiaries(1) (unit: THB million)

2009 2010 2011 9 m 2012 Amount % Amount % Amount % Amount %

Sales of treated water 3,993.85 98.20 4,309.97 97.52 4,461.10 96.25 3,605.45 91.11 Service income (2) 54.61 1.34 84.95 1.92 85.06 1.84 68.35 1.73 Other revenue(3) 18.62 0.46 24.86 0.56 88.94 1.92 283.59 7.17 Total revenue 4,067.08 100.00 4,419.78 100.00 4,635.09 100.00 3,957.39 100.00

Source : annual disclosure forms 56-1, 2011 of TTW and consolidated financial statements for the period ended at September 30, 2012



Remark : (1) Information of revenue structure is referred to the financial statements of TTW and its subsidiaries audited/reviewed by CPA. However, the financial status and operating of TTW and its subsidiaries can be viewed in their financial statements.

(2) Service income from the tap water production servicing of Thai Water Operations Company Limted for Amata Nakorn industrial estate

(3) Consisting of interest income and others

2.1.3 Board of Directors and Shareholding Structure

As of September 15, 2012, TTW’s Board of Directors is as follows:

No. Name Position 1 Mr. Thanong Bidaya Chairman of the Board of Directors and Independent director 2 Mr. Plew Trivisvavet Vice-Chairman of the Board of Directors 3 Mr. Narong Sangsuriya Director and Chairman of Executive Committee 4 Mr. Techapit Sangsingkeo Independent director and Chairman of the Audit Committee

5 Mr. Phairuch Mekarporn Independent director and Audit Committee

6 Mr. Somnuk Chaidejsuriya Independent director and Audit Committee

7 Mr. Suvich Pungcharoen Director 8 Mr. Prasert Marittanaporn Director 9 Mr. Sombat Kitjalaksana Director 10 Mr. Tomonori Suzuki Director 11 Mr. Ryotaro Sumi Director 12 Mr. Sompodh Sripoom Director and Managing Director

Source : TTW

TTW’s shareholders as of September 30, 2012 are as follows:

No. Name No. of Shares % 1 CH. Karnchang Public Company Limited 1,198,777,400 30.04 2 Mitsui Water Holdings (Thailand) Limited* 1,036,500,000 25.98 3 Bangkok Expressway Public Company Limited 368,750,000 9.24 4 Thai NVDR Company Limited 180,404,936 4.52 5 Bangkok Life Assurance Public Company Limited 167,361,200 4.19 6 HSBC (Singapore) Nominees Pte Ltd 81,044,855 2.03 7 Bangkok Bank Public Company Limited 73,895,000 1.85 8 Mr. Min Tienworn 66,900,000 1.68 9 The Bank of New York (Nominees) Limited 43,576,924 1.09

10 American International Assurance Company, Limited-Tiger 40,500,000 1.02

Total 3,257,710,315 81.65 Remark : * The shareholders of Mitsui Water Holdings (Thailand) Limited includes Mitsui & Co. (Asia Pacific) PTE Ltd. holding

8,999,998 shares or 100.00% , Mitsui & Co., (Thailand) LTD. holding 1 shares or 0.00% and Mitsiam International Limited holding 1 shares or 0.00%.

Source : A copy of list of shareholders of TTW



2.1.4 TTW’s financial status and operating performance

Summarized financial statements of TTW for the year ended December 31, 2009 – 2011 and for the nine-month period ended September 30, 2012, based on the consolidated financial statements audited and reviewed by CPA are presented in the following tables.

Summary of financial status of TTW as at December 31, 2008 – 2010 and September 30, 2011

(unit: THB million) Balance Sheet 2009 2010 2011 9 m 2012

Items Amount % Amount % Amount % Amount % Assets

Current assets Cash and cash equivalents 2,285.59 10.85 2,073.89 9.65 1,967.11 9.05 2,165.35 8.98

Current investments 1,084.84 5.15 1,909.34 8.89 2,965.96 13.65 2,754.97 11.43 Trade and other receivables 384.04 1.82 401.45 1.87 431.24 1.98 446.10 1.85 Raw materials and supplies 22.50 0.11 23.67 0.11 24.87 0.11 22.00 0.09 Advance payment for construction 90.18 0.43 - - - - - - Other current assets 80.30 0.38 63.46 0.30 45.77 0.21 133.63 0.55

Total current assets 3,947.45 18.74 4,471.82 20.81 5,434.95 25.01 5,522.05 22.90 Non-current assets

Other long-term investment - - - - - - 200.00 0.83 Investment in associate - - - - 24.81 0.11 2,769.15 11.48 Property, plant and equipment 9,125.40 43.32 9,504.07 44.23 9,232.03 42.49 8,963.95 37.18 Assets for production of treated water that must be transferred at end of concession 3,884.25 18.44 3,620.89 16.85 3,367.42 15.50 3,163.13 13.12 Rights to produce and sell treated water and treat waste water 1,400.32 6.65 1,364.21 6.35 1,333.83 6.14 1,312.09 5.44 Rights to produce and sell treated water 2,689.19 12.77 2,494.25 11.61 2,299.30 10.58 2,153.44 8.93 Intangible assets - - 2.49 0.01 13.01 0.06 11.77 0.05 Other non-current assets 17.65 0.08 30.55 0.14 22.95 0.11 15.52 0.06

Total non-current assets 17,116.81 81.26 17,016.46 79.19 16,293.35 74.99 18,589.05 77.10 Total assets 21,064.26 100.00 21,488.28 100.00 21,728.30 100.00 24,111.09 100.00



(unit: THB million) Balance Sheet 2009 2010 2011 9 m 2012

Items Amount % Amount % Amount % Amount %

Liabilities Current liabilities

Trade and other payables 320.16 1.52 368.70 1.72 108.55 0.50 95.20 0.39

Current portion of long-term loans from financial institutions 420.00 1.99 450.00 2.09 470.00 2.16 485.00 2.01

Current portion of debentures - - - - 3,500.00 16.11 - -

Income tax payable 64.15 0.30 86.80 0.40 91.04 0.42 99.79 0.41

Accrued interest 112.09 0.53 112.14 0.52 112.38 0.52 81.72 0.34

Other current liabilities 88.63 0.42 68.79 0.32 76.39 0.35 102.95 0.43

Total current liabilities 1,005.04 4.77 1,086.42 5.06 4,358.35 20.06 864.66 3.59

Non-current liabilities Long-term other payable - related party 214.00 1.02 - - - - - -

Long-term loans from financial institutions, net of current portion 4,162.00 19.76 3,926.00 18.27 3,670.00 16.89 6,062.50 25.14

Debentures, net of current portion 6,988.48 33.18 6,992.26 32.54 3,496.21 16.09 6,989.96 28.99

Provision for long-term employee benefits - - - - 12.07 0.06 14.50 0.06

Total non-current liabilities 11,364.48 53.95 10,918.26 50.81 7,178.27 33.04 13,066.95 54.19

Total liabilities 12,369.52 58.72 12,004.68 55.87 11,536.63 53.09 13,931.61 57.78



(unit: THB million)

Balance Sheet 2009 2010 2011 9 m 2012


Shareholders' equity Share capital Registered 3,990,000,000 ordinary shares of THB 1 each 3,990.00 18.94 3,990.00 18.57 3,990.00 18.36 3,990.00 16.55

Issued and fully paid up 3,990,000,000 ordinary shares of THB 1 each 3,990.00 18.94 3,990.00 18.57 3,990.00 18.36 3,990.00 16.55

Share premium 2,637.77 12.52 2,637.77 12.28 2,637.77 12.14 2,637.77 10.94

Retained earnings Appropriated - statutory reserve 399.00 1.89 399.00 1.86 399.00 1.84 399.00 1.65

Appropriated - other reserve 172.45 0.82 320.98 1.49 516.86 2.38 723.13 3.00

Unappropriated 2,067.97 9.82 2,706.58 12.60 3,217.95 14.81 2,997.88 12.43

Difference on reorganization of business of group companies -600.36 -2.85 -600.36 -2.79 -600.36 -2.76 -600.36 -2.49

Equity attributable to owners of the Company 8,666.83 41.14 9,453.97 44.00 10,161.21 46.76 10,147.42 42.09

Non-controlling interests of the subsidiaries 27.91 0.13 29.63 0.14 30.46 0.14 32.07 0.13

Total shareholders' equity 8,694.74 41.28 9,483.60 44.13 10,191.67 46.91 10,179.49 42.22

Total liabilities and shareholders' equity 21,064.26 100.00 21,488.28 100.00 21,728.30 100.00 24,111.09 100.00



Summary of operating results of TTW for the year ended 31 December 2009 – 2011 and for the nine-month period ended September 30, 2012

(unit: THB million)

Statement of Profit and Loss 2009 2010 2011 9 m 2012


Revenues Sales of treated water 4,048.46 99.54 4,394.92 99.44 4,546.15 98.08 3,673.80 92.83

Interest income 14.97 0.37 18.49 0.42 42.72 0.92 59.43 1.50

Other income 3.65 0.09 6.38 0.14 46.21 1.00 224.15 5.66

Total revenues 4,067.08 100.00 4,419.78 100.00 4,635.09 100.00 3,957.39 100.00

Expenses Cost of sales of treated water and service 1,198.56 29.47 1,293.97 29.28 1,323.00 28.54 1,096.25 27.70

Administrative expenses 207.58 5.10 196.94 4.46 221.95 4.79 197.75 5.00

Other expenses 204.71 5.03 231.06 5.23 225.33 4.86 167.60 4.24

Total expenses 1,610.85 39.61 1,721.97 38.96 1,770.27 38.19 1,461.61 36.93

Share of income (loss) from investment in associate - - - - -11.29 -0.24 14.35 0.36

Profit before finance cost and corporate income tax 2,456.23 60.39 2,697.81 61.04 2,853.53 61.56 2,510.13 63.43

Finance cost -667.00 -16.40 -442.12 -10.00 -517.96 -11.17 -447.24 -11.30

Profit before corporate income tax 1,789.23 43.99 2,255.69 51.04 2,335.56 50.39 2,062.88 52.13

Corporate income tax -187.98 -4.62 -181.72 -4.11 -210.94 -4.55 -187.39 -4.74

Profit for the period 1,601.25 39.37 2,073.96 46.92 2,124.62 45.84 1,875.49 47.39



Summary of cash flow statement of TTW for the year ended 31 December 2009 – 2011 and for the nine-month period ended September 30, 2012

(unit: THB million)

Statement of Cash Flow Items

2009 2010 2011 9 m 2012

Net cash from (used in) operating activities 2,439.46 2,787.91 2,731.00 2,419.57

Net cash from (used in) investing activities -2,037.08 -1,508.50 -1,194.86 -2,734.25

Net cash from (used in) financing activities 1,014.27 -1,491.11 -1,642.93 512.93

Net increase (decrease) in cash and cash equivalents 1,416.65 -211.70 -106.79 198.25

Cash and cash equivalents at beginning of period 868.94 2,285.59 2,073.89 1,967.11

Cash and cash equivalents at end of period 2,285.59 2,073.89 1,967.11 2,165.35 Key financial ratios for the year ended 31 December 2009 – 2011 and for the nine-month period ended September 30, 2012

Key Financial Ratio Items

2009 2010 2011 9 m 2012

Current Ratio (x) 3.93 4.12 1.25 6.39

Net Profit Margin (%) 39.37 46.92 45.84 47.39

Return on Assets (%) 8.22 9.75 9.83 10.91*

Debt to Equity Ratio (x) 1.42 1.27 1.13 1.37 Remark : * Profit of the period is annualized.



Financial Status

Assets

The assets of TTW and its subsidiaries include cash and cash equivalents, current investment, property, plant and equipments, the subsidiaries’ assets for the production of tap water, rights to produce and sell treated water and treated waste water and rights to produce and sell treated water.

As of December 31, 2010, TTW and its subsidiaries had the total assets of THB 21,488.3 million, increased by THB 424.1 million from 2009, since TTW increased THB 824.5 million of short term investment during this year.

As of December 31, 2011, TTW and its subsidiaries had the total assets of THB 21,728.3 million, increased by THB 240.0 million from the total assets as of December 31, 2010, since TTW had the increasing short term investment including available-for-sale investment and 6-12 month cash deposit at the amount of THB 1,056.6 million or 55.3% of increasing.

As of September 30, 2012, TTW and its subsidiaries had the total assets of THB 24,111.1 million, increased by THB 2,382.8 million from the total assets as of December 31, 2011, since TTW had the increasing investment in CKP in the amount of THB 2,769.2 million.

Liabilities

The liabilities of the Company and its subsidiaries consist of debentures and loans from financial institutions.

As of December 31, 2010, TTW and its subsidiaries had the total liabilities of THB 12,004.7 million, decreased by THB 364.8 million from 2009, due to long-term loan repayment of THB 450 million.

As of December 31, 2011, TTW and its subsidiaries had the total liabilities of THB 11,536.6 million, decreased by THB 468.1 million from the total liabilities as of December 31, 2010 because of the repayment of long-term loans and the decrease of account liabilities together with other liability of THB 470.0 million and THB 260.2 million, respectively.

As of September 30, 2012, TTW and its subsidiaries had the total liabilities of THB 13,931.6 million, increased by THB 2,395.0 million from the total liabilities as of December 31, 2011 because of the increasing in long-term loans borrowed from financial institution by THB 2,760 million to increase investment in CKP and the issuance of THB 3,500 million of debenture to repay THB 3,500 million of debenture which matured in February 2012.

Shareholders’ equity

As of December 31, 2010, the shareholders’ equity of TTW was at THB 9,483.6 million, rose by THB 788.9 million from 2009 due to the change in shareholders’ equity caused by the net profit of THB 2,062.9 million and the dividend payout of THB 1,275.7 million.

As of December 31, 2011, the shareholders’ equity of TTW was at THB 10,191.7 million, rose by THB 708.1 million from the shareholders’ equity as of December 31, 2010 due to the change in



shareholders’ equity caused by the net profit of THB 2,112.9 million and the dividend payout of THB 1,396.5 million.

As of September 30, 2012, the shareholders’ equity of TTW was at THB 10,179.5 million, decrease by THB 12.2 million from the shareholders’ equity as of December 31, 2011. Operating Results

a. Total revenue

In 2010, TTW and its subsidiaries had the total revenue of THB 4,419.8 million, increased by THB 352.7 million from the total revenue of 2009, because of the increase in TTW and its subsidiaries’ sale of treated water of 19.6 million m3 and increasing in selling price pursuant to the agreement. Besides, TTW earned the income from the rights to produce and sell treated water and treated waste water over Bangpa-In industrial estate increased by THB 93 million from 2009.

In 2011, TTW and its subsidiaries had the total revenue of THB 4,635.1 million, increased by THB 215.3 million from the total revenue of 2010, because of the increase in selling price according to the contract and the increase in interest income and other income in the amount of THB 88.9 million which THB 64 million increased from 2010.

During the first 9 months of 2012, from January to September 2012 revenue from tap water sales increased by THB 92.4 million or 8.1% from the same period in 2011, because revenue from tap water sales of the company increased by THB 61.1 million or 8.0% because its sale volume in our service area rose by 3.2 million m3 or 10.6% along with the increase in selling price from the previous year. Revenue from tap water sales of PTW increased by THB 31.3 million or representing by 8.3% because its sale volume rose by 1.4 million m3 or 4.1% in line with the rise in it selling price from the previous year. Moreover, other incomes increased by THB 72.9 million or 538.5% because PTW obtained 2008 income tax refund by THB 61.6 million.

b. Cost of sales of treated water

In 2010, TTW and its subsidiaries had the total cost of sales of treated water and service of THB 1,294 million, increased by THB 95.4 million from that in 2009, due to the increasing cost of pipe demolishment and relocation of THB 6 million and also the increase of sale of tap water.

In 2011, TTW and its subsidiaries had the total cost of sales of treated water and service of THB 1,323 million, increased by THB 30.0 million from that in 2010 due to the increase in cost of electricity and chemical substance in the amount of THB 25.5 million.

During the first 9 months of 2012, from January to September 2012, the cost of sales and services increased by THB 52.3 million or representing an increase of 15.9% from the same period in 2011 because the main production cost of the company and PTW like chemical and electricity cost, increased by THB 38.9 million. This resulted from the increasing sale volume and the rise in electricity rate as compared to the 2011 third quarter.



c. Administrative expenses

In 2010, TTW and its subsidiaries had the total administrative expenses of THB 196.9 million, decreased by THB 10.7 million from that in 2009 because of the decreasing legal expense and financial institutions fees of THB 8.2 million.

In 2011, TTW and its subsidiaries had the total administrative expenses of THB 221.9 million, increased by THB 25.0 million from that in 2010 because of the increasing cost of advertising and marketing activities of THB 3.4 million and also the increasing employee and director expenses of THB 19.2 million.

During the first 9 months of 2012, from January to September 2012, selling and administrative expenses increased by THB 14.5 million or representing an increase of 31.1% from the same period in 2011 due to the increase in legal and loan fees from the bank by THB 7.4 million as well as the rise in employee-related expenses and insurance expenses by THB 4.3 million and THB 2.5 million, respectively.

d. Finance cost

In 2010, TTW and its subsidiaries had the finance cost of THB 442.1 million, decreased by THB 224.9 million from that in 2009 because of TTW and its subsidiaries’ prepayment fee of THB 177.5 million (None in 2010)

In 2011, TTW and its subsidiaries had the finance cost of THB 517.9 million, increased by THB 75.8 million from that in 2010 because of the increase of 0.5% of MLR.

During the first 9 months of 2012, from January to September 2012, financial expenses increased by THB 30.0 million or representing an increase of 22.7% from the same period in 2011 due to the interest expenses by THB 29.0 million from the loan of THB 2,760 million to invest in CKP.

e. Corporate income tax

In 2011, TTW and its subsidiaries had the corporate tax of THB 210.9 million, increased by THB 29.2 million from that in 2010 because of the increase of net profit in 2011 from the net profit in 2010.

During the first 9 months of 2012, from January to September 2012, the corporate income tax rose by THB 40.3 million or 60.2% from the same period in 2011 due to the expiration of tax privilege of TTW on July 20, 2012. Therefore, TTW has its corporate income tax burden since 21 July 2012 hereafter.

Cash Flows

In 2010, TTW and its subsidiaries had the cash flow from operating activities of THB 2,787.9 million, cash flow from investing activities of THB (1,508.5) million and cash flow from financing activities of THB (1,491.1) million. And the activities of TTW and its subsidiaries in 2010 are as follows:

1. TTW booked the cost of capacity and distribution of treated water increasing to THB 568.1 million. 2. TTW’s long-term loan repayment was totaling THB 420 million. 3. TTW paid for the royalty fees of THB 214 million by loan from financial institution. 4. TTW paid the dividend of THB 1,275.7 million to the shareholders.



In 2011, TTW and its subsidiaries had the cash flow from operating activities of THB 2,731.0 million, cash flow from investing activities of THB (1,194.1) million and cash flow from financing activities of THB (1,642.9) million. And the activities of TTW and its subsidiaries in 2011 are as follows:

1. TTW’s long-term loan repayment was totaling THB 450 million. 2. TTW paid for the royalty fees of THB 214 million by loan from financial institution 3. TTW invested in CKP of THB 36.1 million and realized CKP’s loss THB 11.3 million 4. TTW booked intangible asset of THB 11.6 million 5. TTW paid the dividend of THB 1,396.1 million to the shareholders.

For the first nine months of 2012, TTW and its subsidiaries had the cash flow from operating activities of THB 2,419.6 million, cash flow from investing activities of THB (2,734.3) million and cash flow from financing activities of THB 512.9 million. And the activities of TTW and its subsidiaries for the first nine months of 2012 are as follows:

1. TTW issued debenture of THB 3,500 million on February 22, 2012. 2. TTW redeemed THB 3,500 million of debenture maturing on February 26, 2012. 3. TTW borrowed THB 2,760 million from financial institution in order to invest in CKP. 4. TTW repaid long-term loan in the amount of THB 485 million. 5. TTW paid the dividend of THB 1,874 million to the shareholders.

Key Financial Ratios

Liquidity ratio

The liquidity ratio of TTW and its subsidiaries in 2010 was 4.12x improving from 3.93x in 2009, because of the continuously increasing cash of TTW and its subsidiaries. However, the liquidity ratio as of December 31, 2011 dropped to 1.25x, due to the repayment of TTW debentures, amounting to THB 3,500 million in February 2012.

Profitability ratio

The net profit margin of TTW and its subsidiaries in 2009 2010 and 2011 is 39.37%, 46.92% and 45.84% respectively. The net profit margin in 2010 has been improving from the net profit margin in 2009, since the cost of TTW and its subsidiaries is increased in smaller amount than its total revenue total revenue. However, the net profit margin in 2011 is slightly decreased from the net profit margin in 2010 due to the loss from the investment in associated company and the increase in financial cost.

Efficiency ratio

The return on assets of TTW and its subsidiaries has been gradually rising since the net profit of TTW and its subsidiaries is continuously growing, resulting from the net profit growth is greater than the asset growth. The return on assets in 2009 2010 and 2011 are 8.22%, 9.75% and 9.83 respectively.



Financial policy ratio

The debt-to-equity ratio of TTW and its subsidiaries as of December 31, 2009 was higher than those of other years, since in 2009, TTW borrowed THB 1,500 million from the financial institution so as to purchase the rights to produce and sell treated water and manage waste water in Bangpa-In industrial estate and also issued the debentures of THB 7,000 million to expand the capacity of tap water production from 320,000 m3 per day to 440,000 m3 per day. However, after 2009, the debt-to-equity ratio of TTW and its subsidiaries has been decreasing gradually because of the repayment of long-term loan in accordance with the loan agreement.

2.1.5 Industry Overview

Electricity generating Industry

According to report of Kasikorn Research Center, electricity usage is expected to be constantly increased. In addition, Energy Policy and Planning Office, Ministry of Energy, states net peak generation requirement (on EGAT system) on 26 April 2012 that it has rose from 23,900.2 MW in 2011 to 26,121.1 MW in 2012, increasing by 2,220.9 MW or 9.24%. The tariff is raised in accordance with the surging price of key fuels. As a result, production cost of business sector shall surge. Amid limited energy supply, efforts to forestall demand should be the best solution. Although electricity generation is supplied by various sources of energy, the energy production is limited.

According to Thailand Power Development Plan 2012 - 2030 (“PDP2010 Revision 3”), power demand forecast in terms of 2030 net peak demand is stand at approximately 52,256 Megawatt MW lower than that of the previous prediction by approximately 3,494 MW, or equaling to 6.27%. The total generating capacities from 2012 to 2030 can be summarized as follows:

- Total capacity as of December 2011 32,395 MW

- Total added capacity from 2012 to 2030 55,130 MW

- Total retired capacity from 2012 to 2030 -16,839 MW

Total capital at the end of 2030 70,686 MW

The added capacity from 2012 to 2030 of 55,130 MW can be classified by power plant types as follows:

1) Renewable energy power plants 14,580 MW

- Power purchase from domestic 9,481 MW

- Power purchase from international 5,099 MW 2) Cogeneration power plants 6,476 MW

3) Combined cycle power plants 25,451 MW 4) Thermal power plants 8,623 MW

- Coal-fired power plants 4,400 MW

- Nuclear power plants 2,000 MW - Gas turbine power plants 750 MW

- Power purchase from international 1,473 MW

Total 55,130 MW



With reference to the government policy, renewable energy and alternative energy usage is targeted to increase by 25.00% within the next 10 years, in order to compensate fossil fuels usage. Thus, new projects of renewable energy development are initiated in PDP2010 Revision 3. Total capacity of renewable energy will be approximately 20,546.3 MW at the end of 2030, accounting for 29% of total generating capacity in the power system. Total capacity of renewable energy at the end of 2030 shall comprise of total existing capacity of 6,340.2 MW, addition of new capacity of renewable energy of 14,580.4 MW and deduction of the retired capacity of renewable energy of 374.3 MW. The 20,546.3 MW capacity of renewable energy can be classified into domestic renewable energy of 13,688 MW and renewable energy from international of 6,858 MW. Capacity of renewable energy which classified by fuel type is described as follows:

Fuel Type Capacity as of 2011 Total New Capacity 2012-2030 Increased (Decreased)

Capacity

MW % MW % % Solar 138.00 2.18 3,802.00 26.08 23.90 Wind 3.00 0.05 1,973.70 13.54 13.49 Hydro 5,322.50 83.95 5,804.00 39.81 (44.14) Biomass 747.30 11.79 2,602.20 17.85 6.06 Biogas 106.00 1.67 46.20 0.32 (1.36) Municipal Solid Waste 21.40 0.34 352.30 2.42 2.08 New Energy Form 2.00 0.03 - 0.00 (0.03) Total 6,340.20 100.00 14,580.40 100.00 0.00

Advantages and Limitations of Renewable Energy

Renewable Energy Advantages Limitation Hydro Power

No fuel cost apart from the cost of construction

No Carbon Dioxide gas emission from electricity generation

A large hydropower plant has high potentiality in securing the electricity system in case of the peak in electricity demand

Electricity generation’s dependence on the amount of water

Floods in the housing area caused by the construction of large-sized dams in the area

Wind Power

No fuel cost apart from the cost of construction

Clean energy and economical space for installation

One-time investment Potential for hybrid system in order to

maximize benefits by generating electricity from wind power at nighttime and generating electricity from solar power at daytime

Low wind speed in Thailand Limited proper location Climate dependence and inconsistency of wind Expensive battery for power storage Lack of experts and suitable technology for the

potentials of the country’s wind



Renewable Energy Advantages Limitation Solar Power

The largest and unlimited natural energy source in terms of availability

No fuel cost Applicable in areas with no electricity

system or far from the electricity line Basic application and simple

maintenance Clean energy and no pollution effect

from generating process

Not ready for commercial run because of expensive solar cell and other equipments

Short useful life of night-time battery Inconsistency of light intensity due to the

climate and seasonal effects

Tap water industry

Thailand has an approximated area of 511,361 km2 and an annual rainfall volume of 700,000 million m3 Rainfall moves continually through the hydrological cycle of evaporation, condensation, and precipitation by 75%. The remaining 25% of rainfall or about 175,000 million m3 runoffs into rivers called surface water, used as a raw material in the production of tap water. During drought season, in contrast, the surface water is scare and opposed to the sea water level. The result negatively affects surface water quality and continues to be severe issues.

According to the study of Hydro and Agro Informatics Institute, Ministry of Science and Technology, the average of rainfall is increase from 1,499 mm. in 2002 to 1,543 mm. in 2008, accounting for 1.46% per annum. Annually accumulated rainfall in 2008 is 0.62% higher than in 2006. However, the amount of water in the storage in 2009 is 12.44% less than in 2006. The details are as follows:

Details 2002 2006 2008

Average Amount Deviation

(%) Amount Deviation

(%) Amount Deviation

(%) Average Rainfall (mm.) 1,374 1,499 9.10 1,534 11.64 1,543 12.30 Amount of Water from Rainfall (million m3) 702,610 766,535 9.10 784,274 11.62 789,148 12.32 Water Storage (million m3)

Reservation 60,195 61,230 1.72 61,426 2.05 55,610 (7.62) Inflow 48,102 48,399 0.62 52,531 9.21 45,995 (4.38) Release 42,050 39,654 (5.70) 43,206 2.75 43,137 2.59 Difference between Inflow and Release 8,745 9,325 2,858

Source: Hydro and Agro Informatics Institute

The variety of tap water demand in each area is dependent on the types of consumer in the area,

and there are 3 PWA areas to which TTW distributes tap water as follows:

(1) Sampran Tap Water Office: Covering the water distribution area in Sampran District, Nakhon Chaisri District, and some parts of Meuang District, Nakhon Pathom Province.



(2) Om Noi Tap Water Office: Covering the tap water service area in some parts of Krathumban District, Samutsakorn Province, and Buddhamonthon District, Nakhon Pathom Province.

(3) Samutsakorn Tap Water Office: Covering the tap water service area in Meuang District, Samutsakorn Province, and some parts of Krathumban District, Samutsakorn Province.

And PTW engages in distributing tap water in 2 areas as follows:

(1) Pathumtani Tap Water Office: Covering the tap water service area in the western part of Chaophraya River in Pathumtani Province such as Meuang District, Sam Khok District, and Lat Lum Kaeo District.

(2) Rangsit Tap Water Office: Covering the tap water service in the eastern part of the Chaophraya River in Pathumtani Province such as Khlong Luang District, Thanyaburi District, and Lam Luk Ka District.

According to PWA’s criterions, the Tap Water Office divides the tap water consumers into 3 groups as follows:

(1) Household consumer: housing, religious places, non-profit organizations and commercial sectors.

(2) Commercial consumer: government, hospitals, public health service centers, government schools, SMEs, private hospitals and private schools.

(3) Industrial consumer: state enterprises, food industry, agricultural industry, clothing industry, chemical industry, construction materials industry, printing industry, hotels and clubs, large commercial business and industrial parks.

In addition, supply of the water in the area depends on production activity of industrial consumer and consumption of commercial and household consumer. The comparison of tap water usage by types of consumer is as follows:

The Usage of Tap Water by Types of Consumer from 2009 to 2011 of TTW

Source : annual disclosure forms 56-1, 2011 of TTW

ลบ.ม.

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

2009 2010 2011

m3

Industrial Sector Commercial Sector Household Sector



It can be seen from the comparison of the tap water usage by types of consumer from 2009 to 2011 that tap water consumer is mainly the industrial consumer in the serviced area. In 2011, tap water usage by industrial consumer is accounted for 51.95% of total sale quantity of TTW. There is slight growth of usage quantity in the area. Whilst, the usage quantity by commercial and household consumer represents quite similar amount, with only little change in growth of quantity.

The Usage of Tap Water by Types of Consumer from 2009 to 2011 of PTW

Source : annual disclosure forms 56-1, 2011 of TTW

It can be seen from the comparison of the tap water usage by types of consumer from 2009 to 2011

that the key customer for PTW is household type, following by industrial customer and commercial customer. However, trend in the growth of usage quantity in the area either decrease or remain unchange.

In sum, according to tap water usage, PTW relies more on household customer than industrial customer in its serviced area, while key demand in TTW serviced area is industrial customer.

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2009 2010 2011

m3

Industrial Sector Commerical Sector Household Sector



Section 3 General Information of the Seller and the Buyer

3.1 CH. Karnchang Public Company Limited – The Company / Seller

3.1.1 Business description

CH. Karnchang Public Company Limited (“the Company” or “CK”) was incorporated as a limited company with the initial registered capital of THB 1.40 million on November 27, 1972 to engage in a general construction business. Initially, the Company’s scope of work covered construction of buildings and general civil works.

The Company realized the needs to enlarge the scope of its business operations for long-term prosperity. In this respect, in 1981, the Company entered into a joint venture with Tokyu Construction Co., Ltd., one of Japan’s top ten construction contractors, for the purpose of acceptance of technology transfer in the fields of construction and management, as well as potential business alliance.

The Company expanded its scope of business operations and increased the registered capital to accommodate the continued business expansion. On October 10, 1994, the Company was converted into a public company, resulting in an increase in its registered capital to THB 700 million, and then became a listed company on the Stock Exchange of Thailand on August 3, 1995.

On April 19, 1996, the Company registered the increase of its registered capital from THB 700 million to THB 1,050 million. As of September 30, 2012, the Company’s registered capital and paid-up was THB 1,652,585,336.

Details of business operations of the Company, subsidiaries, associated companies and joint ventures

Company/Joint Venture Shareholding Ratio (%) Nature of Work Construction Business 1. CH. Karnchang (Lao) Company Limited 100.00 The Nam Ngum 2 Hydroelectric Power

Project and the Xayaburi Hydroelectric Power Project Construction Contractor

2. Joint Venture BBCT

99.97 (Sectors D and C1A) Construction of the Second Stage Expressway, Sector C+, Chaeng Watthana - Bang Phun - Bang Sai, Sector D, Asoke - Srinagarindra, and Sector C1A, Ngam Wong Wan - Chaeng Watthana

3. CH. Karnchang Real Estate Company Limited

99.00 Trading of Land, Allocation of Land and Residential Buildings

4. Prasertvit Construction Limited Partnership

99.00% of shares held by CH. Karnchang Real Estate Company Limited

Construction Contractor

5. Phrompratharn Construction Limited Partnership

99.00% of shares held by CH. Karnchang Real Estate Company Limited

Construction Contractor



Company/Joint Venture Shareholding Ratio (%) Nature of Work 6. CKAE Consortium

98.00 Design and Construction of the

Development Project for Enhancement of the Capacities of the Bangkok International Airport

7. Joint Venture CKET

80.00 Project Operation and Management under the Agreement for Concession for Design, Manufacture, Delivery, Installation, Testing and Commissioning of M&E Equipment and for Operation and Maintenance of the MRTA Initial System, Chaloem Ratchamongkhon Line

8. Joint Venture CKLX 75.00 Construction of the toll and safety controling system for the traffic on the express way covering Bang plee –Suksawad and outer ring road of Bangkok (Bangplee-Bangkhuntain section)

9. Joint Venture CKTC

70.00 Operations for Construction Project of the Purple Line, Bang Yai - Rat Burana, Bang Yai - Bang Sue Section; Contract 1: Elevated Structures (East)

10. Joint Venture CH. Karnchang- Krung Thon Engineers

60.00 Operations for Construction of Phra Ong Chao Chaiyanuchit Canal Conduit System - Bang Phra Reservoir and Appurtenant Structures Contract 1 Project, Project for Diversion of Water from Eastern Chao Phraya River Basin - Bang Phra Reservoir, Chon Buri Province

11. CH. Karnchang-Tokyu Construction Company Limited

55.00 Construction Contractor of all kinds

12. CH. Karnchang (Qatar) Contracting Company Limited

49.00 Construction Contractor

13. Joint Venture BBCD

35.00 Construction of the (Bang Na - Bang Pli - Bang Pakong) Expressway

14. Joint Venture BCKT

25.00 Design and Construction of the Underground Structures - South, MRTA Initial System Project (Hua Lamphong - Huai Khwang)

Concession Project 1. Bangkhenchai Company Limited 99.99% of shares held

by CK Power Limited** Construction and Operation of the Project for Electricity Generation by Solar Energy, with a production capacity of 8 MW, to generate and distribute electricity to EGAT

2. Pathum Thani Water Company Limited. 98.00% of shares held by Thai Tap Water Supply Public Company Limited

Production and Distribution of All Tap Water to the Provincial Waterworks Authority



Company/Joint Venture Shareholding Ratio (%) Nature of Work 3. Nam Ngum 2 Power Company Limited 75.00% of shares held by


Assumption of Rights and Benefits under the Concession Agreement and Power Purchase Agreement

4. Xayaburi Power Company Limited 50.00 Concession for Electricity Generation from the Lao People’s Democratic Republic

5. Bangpa-in Cogeneration Limited 46.00% of shares hold by CKP***

Operation of the Small Power Producers (SPP) Construction and Management, with the production capacity of 120 MW, by the cogeneration system within Bang Pa-in Industrial Estate to generate and distribute electricity to EGAT and industrial operators in Bang Pa-in Industrial Estate

6. SouthEast Asia Energy Limited 56.00% of shares held by CK Power Limited*

Design, Development, Construction and Operation of the Nam Ngum 2 Hydroelectric Power Plant Project for Electricity Generation and Distribution for the Electricity Generating Authority of Thailand

7. CK Power Limited 38.00 Holding Company 8. Thai Tap Water Supply Public Company

Limited 30.04 Tap Water Production and Distribution for

the Provincial Waterworks Authority in Nakhon Pathom Province and Samut Sakhon Province

9. Chiangrai Solar Company Limited 30.00 of shares hold by CKP***

Construction and Operation of the Project for Electricity Generation by Solar Energy, with a production capacity of 8 MW, to generate and distribute electricity to EGAT

10. Nakhon Ratchasima Solar Company Limited

30.00% of shares held by CK Power Limited**

Construction and Operation of the Project for Electricity Generation by Solar Energy, with a production capacity of 8 MW, to generate and distribute electricity to EGAT

11. Bangkok Metro Public Company Limited 24.61 Construction, Operation and Maintenance of Railway System, Train, Electric Train System or Other Powered Carriage System

12. Bangkok Expressway Public Company Limited

15.15 Construction and Operation of the Second Stage Expressway Project and Various Extensions, including Related Businesses

Production Industry 1. Construction Material Supply Company

Limited 99.99 Trading of Construction Materials

Source: Prospectus for debenture public offering # 1/2012 maturing in 2017. Remark : * In August 2012, CKP acquired SEAN’s shares resulting CKP has 56.00% of stake holding in SEAN



** With the reference to the Notification of Resolution of the Board of Directors of the Company No. 2/2012 on June 12, 2012, the Board of Directors passed the approval to sell all common shares in BKC, representing to 100.00% of the registered company and sell all common shares in NRS, representing 30.00% of the registered capital to CKP

*** With the reference to the Notification of Resolution of the Board of Directors of the Company No. 5/2012 on September 14, 2012, the Board of Directors passed the approval to sell all common shares in BIC, representing to 46.00% of the registered company and sell all common shares in CRS, representing 30.00% of the registered capital to CKP

3.1.2 Revenue Structure of the Company and Its Subsidiaries

Revenues of the Company and its subsidiaries for the fiscal year ended 2009, 2010, 2011 and the first nine-month period of 2012(1) are as follows:

(unit: THB million) 2009 2010 2011 9M 2012

Amount % Amount % Amount % Amount % Construction Service 12,708.39 91.20 8,486.53 85.78 10,812.79 78.13 13,825.74 93.34 Sale of Construction Material 37.08 0.27 32.95 0.33 77.38 0.56 64.80 0.44 Interest Income 264.02 1.89 253.79 2.57 310.89 2.25 308.52 2.08 Dividends & Profit Sharing 262.08 1.88 160.53 1.62 171.99 1.24 166.77 1.13 Other Income(2) 663.59 4.76 960.04 9.70 2,466.67 17.82 445.68 3.01 Total Revenue 13,935.16 100.00 9,893.84 100.00 13,839.72 100.00 14,811.51 100.00

Source: The Company’s form of 56-1 in 2011 and the audited financial statements for 3M ended March 31, 2012 and 9M ended September 30, 2012

Remark: 1) Retrieved from the audited financial statements of the Company and its subsidiaries. 2) Other income comprises gain on project management, rental, transportation, disposal of property, disposal of

investment, exchange rate, reversal of provision for doubtful debts, reversal of provision for impairment of assets, reversal of interest payable, miscellaneous income and etc.


The Company’s Board of Directors as of November 28, 2012 are shown as follows:

No. Name Position

1 Mr. Aswin Kongsiri Chairman of the Board of Directors

2 Mr. Plew Trivisvavet Director, Chairman of the Executive Board and Chief Executive Officer

3 Mr. Vitoon Tejatussanasoontorn Director and Chairman of the Audit Committee

4 Mr. Don Pramudwinai Director and Audit Committee

5 Mr. Thawansak Sukhawun Director, Audit Committee

6 Mr. Pavich Tongroach Director

7 Mr. Narong Sangsuriya Director

8 Mr. Kamthorn Trivisvavet Director

9 Mr. Prasert Marittanaporn Director

10 Mr. Ratn Santaannop Director

11 Mr. Sombat Kitjalaksana Director

12 Mr. Anukool Tuntimas Director

Source: SET



The first 7 major shareholders of the Company as of October 30, 2012 are shown as follows:

No. Name No. of shares % 1 Mahasirisiam Company Limited 303,109,625 19.98 2 CH. Karnchang Holding Company Limited 171,216,127 10.36 3 CK Office Tower Company Limited 91,071,427 5.51 4 Mrs. Pranee Thongkittikul 50,045,202 3.03 5 Mr. Charnarong Wongseenin 30,857,142 1.87

6 Bangpa-in Land Development Company Limited 17,692,500 1.07

7 Mr. Plew Trivisvavet 15,298,000 0.93 Total 679,290,023 42.75

Source: The list of the Company’s shareholders



3.1.4 The Company’s Financial Status and Operating Performance

Summarized financial statements of the Company for the year ended December 31, 2009 – 2011 and for the nine-month period ended September 30, 2012, based on the consolidated financial statements audited and reviewed by CPA are presented in the following tables.

Summary of financial status of the Company and its subsidiaries as of December 31, 2009 – 2012 and the nine-month period ended September 30, 2012

(Unit: THB million) Balance Sheet 2009 2010 2011 9 months 2012

Amount % Amount % Amount % Amount %

ASSETS CURRENT ASSETS Cash and bank deposits 3,519.43 11.94 1,524.50 5.00 4,018.78 10.97 6,231.72 12.46 Current investments 2,669.02 9.06 3,041.53 9.98 940.31 2.57 1,250.20 2.50 Trade and other receivables 1,080.91 3.67 2,088.74 6.86 4,452.88 12.15 4,368.76 8.73 Short-term loans to related parties and interest receivable 168.57 0.57 1.20 0.00 1.20 0.00 1.20 0.00 Unbilled receivables 3,840.53 13.03 5,261.25 17.27 8,066.04 22.01 10,094.74 20.18 Inventories and construction supplies - net 343.27 1.16 349.77 1.15 1,026.80 2.80 1,382.65 2.76 Advance payment to subcontractors - net 1,050.32 3.56 931.46 3.06 2,712.11 7.40 6,485.31 12.96 Current portion of long-term loans to associated companies and interest receivable - - 187.99 0.62 200.62 0.55 210.43 0.42 Current portion of loans to subcontractors 177.54 0.60 41.99 0.14 - - - - Current portion of long-term loans to other companies 155.75 0.53 251.18 0.82 354.01 0.97 144.42 0.29 Other current assets 585.36 1.98 309.19 1.01 336.59 0.92 478.40 0.96

TOTAL CURRENT ASSETS 13,590.69 46.10 13,988.79 45.91 22,109.34 60.34 30,647.83 61.26





NON-CURRENT ASSETS Restricted bank deposits 408.28 1.39 519.34 1.70 291.37 0.80 288.73 0.58

Long-term loans to jointly controlled entities and interest receivable 244.87 0.83 220.20 0.72 174.37 0.48 160.53 0.32 Long-term loans to associated companies and interest receivable 2,728.38 9.26 3,163.78 10.38 3,728.86 10.18 3,922.07 7.84 Long-term loans to related companies and interest receivable - - - - - - 20.75 0.04 Long-term loans to other companies - net of current portion 1,276.23 4.33 1,088.23 3.57 712.23 1.94 580.23 1.16 Investments in associated companies 4,692.44 15.92 5,602.08 18.39 3,239.36 8.84 5,431.07 10.86 Other investments 2,620.18 8.89 2,493.96 8.18 2,304.63 6.29 3,699.37 7.39 Long-term trade accounts receivable 380.26 1.29 265.81 0.87 138.20 0.38 139.08 0.28 Investment properties 281.89 0.96 475.41 1.56 421.57 1.15 401.67 0.80 Property, plant and equipment - net 2,202.34 7.47 2,096.90 6.88 2,911.36 7.95 4,185.82 8.37 Intangible assets - net 59.08 0.20 64.29 0.21 66.17 0.18 77.88 0.16 Accounts receivable - claims for additional costs 2,515.62 8.54 2,515.62 8.26 2,515.62 6.87 2,515.62 5.03 Less: Allowance for doubtful accounts -2,515.62 -8.54 -2,515.62 -8.26 -2,515.62 -6.87 -2,515.62 -5.03 Advances for future projects 941.83 3.20 228.33 0.75 382.16 1.04 219.02 0.44 Withholding tax deducted at source 5.20 0.02 133.88 0.44 79.04 0.22 41.41 0.08 Other non-current assets 38.19 0.13 129.00 0.42 80.86 0.22 217.09 0.43

TOTAL NON-CURRENT ASSETS 15,879.17 53.89 16,481.20 54.07 14,530.18 39.67 19,384.70 38.74

TOTAL ASSETS 29,469.86 100.00 30,469.99 100.00 36,639.52 100.00 50,032.53 100.00





LIABILITIES CURRENT LIABILITIES Bank overdrafts and loans from banks 2,659.72 9.03 3,378.67 11.09 1,972.16 5.38 2,244.54 4.49 Trade and other payables 1,644.88 5.58 1,626.67 5.34 2,513.02 6.86 4,298.61 8.59 Current portion of hire purchase creditors 98.14 0.33 40.98 0.13 93.74 0.26 135.38 0.27 Current portion of long-term loans 624.42 2.12 820.75 2.69 2,214.16 6.04 4,243.53 8.48 Current portion of secured debentures 3,100.00 10.52 3,000.00 9.85 3,016.20 8.23 1,000.00 2.00 Advances received from employers and construction revenue received in advance 1,613.00 5.47 1,650.78 5.42 3,827.93 10.45 8,436.41 16.86 Retention for construction 525.85 1.78 371.07 1.22 253.35 0.69 316.75 0.63 Corporate income tax payable 26.96 0.09 18.58 0.06 356.17 0.97 9.27 0.02 Unbilled output tax 107.56 0.36 97.96 0.32 145.57 0.40 144.74 0.29 Others 46.60 0.16 98.84 0.32 68.04 0.19 126.80 0.25

TOTAL CURRENT LIABILITIES 10,447.13 35.45 11,104.28 36.44 14,460.33 39.47 20,956.03 41.88

NON-CURRENT LIABILITIES Hire purchase creditors - net of current portion 14.40 0.05 - - 0.35 0.00 292.72 0.59 Long-term loans - net of current portion 3,348.01 11.36 4,098.25 13.45 4,543.20 12.40 8,764.36 17.52 Debentures 8,877.76 30.12 8,975.72 29.46 10,958.32 29.91 11,962.01 23.91 Long-term accrued interest 324.35 1.10 - - - - - - Provision for long-term employee benefits - - - - 82.31 0.22 147.29 0.29 Provision for loss on investments in joint ventures 758.96 2.58 80.00 0.26 - - - -

TOTAL NON-CURRENT LIABILITIES 13,323.48 45.21 13,153.97 43.17 15,584.19 42.53 21,166.38 42.31

TOTAL LIABILITIES 23,770.61 79.15 24,258.25 79.61 30,044.52 82.00 42,122.41 84.19





SHAREHOLDERS’ EQUITY Share capital 1,652,585,336 ordinary shares of THB 1 each (2009: 1,446,012,169 ordinary shares) 1,450.00 4.92 1,652.59 5.42 1,652.59 4.51 1,652.59 3.30 Issued and paid up 1,652,585,336 ordinary shares of THB 1 each (2009: 1,446,012,169 ordinary shares) 1,446.01 4.91 1,652.59 5.42 1,652.59 4.51 1,652.59 3.30 Share premium 3,972.88 13.48 4,869.41 15.98 4,869.41 13.29 4,869.41 9.73 Retained earnings (Deficit) Appropriated - statutory reserve 45.67 0.15 64.39 0.21 170.76 0.47 170.76 0.34 Unappropriated (Deficit) 169.30 0.57 -349.74 -1.15 140.79 0.38 43.12 0.09 Other components of shareholders’ equity -152.82 -0.52 -266.75 -0.88 -449.47 -1.23 900.28 1.80 Equity attributable to owners of the Company 5,481.04 18.60 5,969.91 19.58 6,384.08 17.42 7,636.15 15.26 Minority interests of the subsidiaries 218.21 0.74 241.83 0.79 210.93 0.58 273.96 0.55

TOTAL SHAREHOLDERS’ EQUITY 5,699.26 19.34 6,211.74 20.37 6,595.01 18.00 7,910.11 15.81 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 29,469.86 100.00 30,469.99 100.00 36,639.52 100.00 50,032.53 100.00



Summary of operating performance of the Company and its subsidiaries for the year ended December 31, 2009 – 2011 and for the nine-month period ended September 30, 2012

(Unit: THB million) Statement of Profit and Loss 2009 2010 2011 9 months 2012

Amount % Amount % Amount % Amount % REVENUES Revenues from construction services 12,708.40 91.20 8,486.53 85.78 10,812.79 78.13 13,825.74 93.34 Sales of construction materials 37.08 0.27 32.95 0.33 77.38 0.56 64.80 0.44 Project management income 35.13 0.25 66.89 0.68 69.86 0.50 45.44 0.31 Rental income 74.33 0.53 49.04 0.50 40.34 0.29 35.43 0.24 Transportation income 1.13 0.01 4.16 0.04 11.83 0.09 16.69 0.11 Other incomes Interest income 264.03 1.89 253.79 2.57 310.89 2.25 308.52 2.08 Dividend income 262.08 1.88 160.53 1.62 171.99 1.24 166.77 1.13 Gain on exchange rate - - - - - - 30.10 0.20 Gain on sales of investments in associated companies 343.07 2.46 175.88 1.78 2,282.76 16.49 231.75 1.56 Revenue from reversal of provision for loss on investment in jointly controlled entities - - 446.29 4.51 - - - - Revenue from forgiveness of accrued interests - - 144.21 1.46 - - - - Others 209.92 1.51 73.57 0.74 61.88 0.45 86.28 0.58

TOTAL REVENUES 13,935.16 100.00 9,893.84 100.00 13,839.72 100.00 14,811.51 100.00 EXPENSES Cost of construction services, sales of construction materials and services 11,859.74 85.11 8,338.48 84.28 10,368.47 74.92 12,282.76 82.93 Selling and administrative expenses 1,121.19 8.04 1,259.08 12.73 1,461.10 10.56 1,160.84 7.84

TOTAL EXPENSES 12,980.93 93.15 9,597.56 97.01 11,829.57 85.48 13,443.60 90.76 Profit before share of income (loss) from investments in associated companies, finance cost and corporate income tax

954.23 6.85 296.28 2.99 2,010.15 14.52 1,367.91 9.24

Share of profit (loss) from the Company, associated companies and joint ventures 81.89 0.59 384.10 3.88 570.37 4.12 205.00 1.38 Earnings before interest and corporate income tax 1,036.12 7.44 680.37 6.88 2,580.52 18.65 1,572.91 10.62 Finance cost -882.30 -6.33 -943.09 -9.53 -1,079.08 -7.80 -1,022.60 -6.90



Statement of Profit and Loss 2009 2010 2011 9 months 2012 Amount % Amount % Amount % Amount % Income before corporate income tax 153.82 1.10 -262.72 -2.66 1,501.44 10.85 550.31 3.72 Corporate income tax -56.25 -0.40 -56.56 -0.57 -563.93 -4.07 -205.81 -1.39

NET PROFIT (LOSS) FROM OPERATIONS 97.57 0.70 -319.27 -3.23 937.51 6.77 344.50 2.33 Net profit attributable to: Equity holders of the parent company 89.73 0.64 -335.06 -3.39 927.40 6.70 315.46 2.13 Minority interests of the subsidiaries 7.84 0.06 15.78 0.16 10.11 0.07 29.04 0.20

Summary of cash flow statement of the Company and its subsidiaries for the year ended December 31, 2009 – 2011 and for the nine-month period ended September 30, 2012

(Unit: THB million) Statement of Cash Flow 2009 2010 2011 9 months 2012

Net cash flows from (used in) operating activities 250.75 -3,047.73 -4,393.47 -1,930.48 Net cash flows from (used in) investing activities -2,952.73 -1,339.97 4,121.87 -1,614.74 Net cash flows from (used in) financing activities 3,666.86 2,395.08 2,759.42 5,769.06 Net increase (decrease) in foreign exchange affecting cash and cash equivalents -2.10 -2.31 6.45 -10.91 Net increase (decrease) in cash and cash equivalents 962.77 -1,994.94 2,494.28 2,212.94 Cash and cash equivalents at beginning of year 2,556.66 3,519.43 1,524.50 4,018.78 Cash and cash equivalents at end of year 3,519.43 1,524.50 4,018.78 6,231.72



Financial Position

Total assets

The significant items in total assets of the Company and its subsidiaries comprise of cash and cash equivalents, unbilled receivables, and investments in associated companies.

On December 31, 2010, total assets of the Company and its subsidiaries amounted to THB 30,469.99 million, which increased by THB 1,000.13 million or 3.39% from that as of December 31, 2009, mainly from the increases of trade and other receivables due to the progress in the construction of the projects, of which most payments did not yet fall due, the increases of income pending collection due to the fact that the subsidiaries partially operated the Xayaburi Project, and the increases of long-term loan to associated companies and subsidiaries, and accrued interest.

On December 31, 2011, total assets of the Company and its subsidiaries amounted to THB 36,639.52 million, which increased by THB 6,169.53 million or 20.25% from that as of December 31, 2010, mainly from the increases of cash and cash equivalents, the increases of receivables from the Company’s sales of ordinary shares in SouthEast Asia Energy Limited, and the increases of income pending collection due to the fact that CH. Karnchang (Lao) Co., Ltd., the subsidiary, had income pending collection from construction of the Xayaburi Run-of-River Project.

On September 30, 2012, total assets of the Company and its subsidiaries amounted to THB 50,032.53 million, which increased by THB 13,393.01 million or 36.55% from that as of December 31, 2011, mainly from the increases of income pending collection, advances to subcontractors, and investments in associated companies.

Total liabilities

The significant items in total liabilities of the Company and its subsidiaries are debentures and long term loan from financial institutions.

On December 31, 2010, total liabilities of the Company and its subsidiaries amounted of THB 24,258.25 million, which increased by THB 487.64 million or 2.05% from that as of December 31, 2009, mainly from the increases of bank overdrafts and short-term loans from financial institutions, and long term loans.

On December 31, 2011, total liabilities of the Company and its subsidiaries amounted of THB 30,044.52 million, which increased by THB 5,786 million or 23.85% from that as of December 31, 2010, mainly from the increases of trade account payable due to the Company’s acceleration of the construction of the Purple Line Project, Contract 1, the Blue Line Project, Contract 2 and Contract 5, the Xayaburi Run-of-River Project, and the Small Power Plant Construction Project in Bang Pa-in Industrial Estate, the increases of advances received from employers and construction revenue received in advance due to the receipt of the advances from the Blue Line Project, Contract 2 and Contract 5, and the Construction of the New Tobacco Production Plant Project, the increase from corporate income tax payable due to the Company’s operating profit and gain on sales of investments, and the issuances of debentures.



On September 30, 2012, total liabilities of the Company and its subsidiaries amounted of THB 42,122.41 million, which increased by THB 12,077.89 million or 28.67% from that as of December 31, 2011, mainly from the increases of advances received from employers and construction revenue received in advance, and long-term loan.

Shareholders’ equity

On December 31, 2010, total shareholders’ equity of the Company and its subsidiaries amounted of THB 6,211.74 million, which increased by THB 512.48 million from that as of December 31, 2009, mainly from the capital increase which resulted in the increases in share premium and paid-up capital.

On December 31, 2011, total shareholders’ equity of the Company and its subsidiaries amounted of THB 6,595.01 million, which increased by THB 383.27 million or 6.17% from that as of December 31, 2010, mainly from the increases of retained earnings.

On September 30, 2012, total shareholders’ equity of the Company and its subsidiaries amounted of THB 7,910.11 million, which increased by THB 1,315.10 million from that as of December 31, 2011, mainly from the increases of other components of shareholders’ equity.

Operating Performance

Revenue

In 2010, total revenue of the Company and its subsidiaries amounted of THB 9,893.84 million, which decreased by THB 4,041.32 million or 29% from that in 2009. The revenue from construction project decreased due to the fact that the Nam Ngum 2 Hydroelectric Power Project in the Lao People’s Democratic Republic is nearly completed, thereby causing a slight progress in construction, including impact of the political unrest, which caused the volume of investments in new projects from government sector and private sector to delay.

In 2011, total revenue of the Company and its subsidiaries amounted of THB13,839.72 million, which increased by THB 3,945.88 million or 39.88% from that in 2010. Total revenue increased due to the increases of core revenue, which include the revenue from construction, the revenue from the sales of construction materials for the Purple Line Project, Contract 1, and the Blue Line Project, Contract 2, etc, as well as the revenue from project management.

Cost of construction services, sales of construction materials and services

In 2010, total cost of construction, sales of construction materials and services of the Company and its subsidiaries amounted of THB 8,338.48 million, which decreased by THB 3,521.26 million or 29.69% from that in 2009, mainly from the decreases of the revenue from construction and sales of construction materials.

In 2011, total cost of construction, sales of construction materials and services of the Company and its subsidiaries amounted of THB 10,368.47 million, which increased by THB 2,029.99 million or 24.34% from that in 2010, mainly from the increases of the revenue from construction and sales of construction materials.



Selling and administrative expenses

In 2010, total administration expenses of the Company and its subsidiaries amounted of THB 1,259.08 million, which increased by THB 137.90 million from that in 2009.

In 2011, total administration expenses of the Company and its subsidiaries amounted of THB 1,461.10 million, which increased by THB 202.02 million or 16.04% from that in 2010, mainly from the more construction projects of the Company being in progress.

Share of profit from investments in associated companies

In 2010, the Company and its subsidiaries recognized the share of profit from investment in associated companies, amounted to THB 384.09 million, which increased by THB 302.20 million or 369.03% from that in 2009, mainly from net profit of TTW and SEAN.

In 2011, the Company and its subsidiaries recognized the share of profit from investment in associated companies, amounted to THB 570.37 million, which increased by THB 186.28 million or 48.50% from that in 2010, mainly from TTW.

Financial cost

In 2010, total financial cost of the Company and its subsidiaries amounted to THB 943.09 million, which increased by THB 60.79 million or 6.89% from that in 2009, mainly from the increases of the Company’s borrowing of additional loans for construction of the Purple Line Project, Contract 1, and for use as working capital.

In 2011, total financial cost of the Company and its subsidiaries amounted to THB 1,079.08 million, which increased by THB 135.99 million or 14.42% from that in 2010, mainly from the Company’s borrowing of additional loans for construction of the Purple Line Project, Contract 1, the Blue Line Project, Contract 2 and Contract 5, the preparations for the Xayaburi Run-of-River Project, including investments in Xayaburi Power Company Limited, NRS, and BIC.

Corporate income tax

In 2010, total corporate income tax of the Company and its subsidiaries amounted to THB 56.56 million, which increased by THB 0.31 million or 0.54% from that in 2009, due to the increases in operating incomes of subsidiaries and jointly controlled entities.

In 2011, total corporate income tax of the Company and its subsidiaries amounted to THB 563.93 million, which increased by THB 507.37 million or 897.10% from that in 2010, due to the Company’s operating income. Cash Flows

In year 2010, the Company and subsidiaries’ cash decreased during the period in the amount of THB 1,994.94 million, and when combined with cash brought forward from 2009 in the amount of THB 3,519.43 million, the cash balance carried forward as at December 31, 2010 amounted to THB 1,524.50 million, with the details as follows.



Net cash flows used in operating activities after interest expenses and corporate income tax amounted to THB 3,047.73 million, due to the fact that the Company carried out the construction of the Nam Ngum 2 Dam Project in the Lao PDR, the cost of which was adjusted to be considerably higher than revenue from such project, and the subsidiaries partially operated the Xayaburi Project, which accounted for revenue pending collection. In addition, the Company’s interest payment was increased due to the Company’s borrowing of additional loans for construction of the Purple Line Project, Contract 1, and for use as working capital.

Net cash flows used in investing activities amounted to THB 1,339.97 million, due to the fact that the Company used cash for payment of provisional investments with interest rate higher than deposits at bank, and the Company invested in Xayaburi Power Company Limited and SEAN, as well as the increases in construction cost of power plants.

Net cash flows from financing activities amounted to THB 2,395.08 million, as a result of the Company’s additional drawdown of long-term loan.

In year 2011, the Company and subsidiaries’ cash increased during the period in the amount of THB 2,494 million, and when combined with cash brought forward from the end of year 2010 in the amount of THB 1,525 million, the cash balance carried forward as at December 31, 2011 amounted to THB 4,019 million, with the details as follows.

Net cash flows used in operating activities after interest expenses and corporate income tax amounted to THB 4,393.47 million, due to the fact that the Company carried out the construction of the Purple Line Project, Contract 1, and the Xayaburi Run-of-River Construction Project in Lao PDR, as revenue pending collection.

Net cash flows from investing activities amounted to THB 4,121.87 million, due to the fact that the Company received the proceeds from the sales of current investments for deposit at bank as working capital, and the sales of ordinary shares in Xayaburi Power Company Limited, SEAN, NRS, and BIC.

Net cash flows from financing activities amounted to THB 2,759.42 million, as a result of the Company’s progress in construction and drawdown of long-term loans for the projects, including repayment of short-term bills by way of issuance of debentures.

For the first 9 months of year 2012, the Company and subsidiaries’ cash increased during the period in the amount of THB 2,212.94 million, and when combined with cash brought forward from the end of year 2011 in the amount of THB 4,018.78 million, the cash balance carried forward as at September 30, 2012 amounted to THB 6,231.72 million, with the details as follows.

Net cash flows used in operating activities after interest expenses and corporate income tax amounted to THB 1,930.48 million, due to the fact that the Company carried out the construction of the large-sized construction projects such as Contract for the Xayaburi Hydroelectric Power Project in The Lao People’s Democratic Republic, the Bang Yai – Rat Burana MRT Purple Line Construction Project : Bang Yai – Bang Sue Section; Contract 1 : Elevated Structure Work, as



well as the Construction of Small Power Plant Project (SPP) : 120 MW Gas Combined Cycle Cogeneration Power Plant etc.

Net cash flows from investing activities amounted to THB 1,614.74 million, due to the investments in associated companies, including the payments for additional share purchase in Xayaburi Power Company Limited, CRS, and BIC, as well as the payments for additional share purchase by proportion in CKP

Net cash flows from financing activities amounted to THB 5,769.06 million, as a result of the additional drawdown of long-term loans.

3.1.5 Industry Overview

With respect to the overview of the construction industry in 2012, the Fiscal Policy Office forecasted that Thailand’s economy in 2012 would grow at 5.5% (ranging between 5.3-5.8%), representing an increase from 2011 since the private sector investments could recover and return to normal after the flood crisis. Moreover, the government’s policies, such as, increase in daily wages for workers and salaries for civil servants, rice-pledging scheme, first-car scheme, first-house scheme, and gradual reduction of corporate income tax, also have in part promoted the domestic spending, while the public sector consumption and investments play an important role to support the economic recovery, by starting to invest more in many large-scale projects of the government, such as, the Red Line Project, the Green Line Project, Contract 1, the Si Rat - Outer Ring Road Expressway Project, etc. The private sector has also started to invest in many large-scale projects in other countries which have given rise to construction works for Thai construction companies, e.g., the Xayaburi Hydroelectric Power Project in the Lao PDR and the Dawei Development Project in Myanmar.

As for Thailand’s economy in 2013, the Fiscal Policy Office has expected a continued growth at 5.2% (ranging between 4.7-5.7%), mainly propelled by the growing public sector and overseas demand, due to the contributory factors of disbursements under the long-term water management plan of the government in the total amount of THB 3.5 hundred thousand million, expected to gradually invest more in 2013, and the world economic situation, despite potential risk, is likely to gradually recover; the domestic purchasing power will be boosted by people’s spending and investments, with acceleration in investments in more infrastructure to be seen. According to the Council of Ministers’ Meeting on January 10, 2012, the Strategic Committee for Reconstruction and Future Development (SCRF) proposed the budget on investments in infrastructure during 2012-2016 in the amount of THB 2.27 trillion, and the government is making preparations for ASEAN Economic Community (AEC), which is expected to come into force on January 1, 2015, under the concept that ASEAN will become the single market and production base, meaning that the freedom of movement of production factors is required; the production process can be made anywhere, by utilizing local resources from any country, both raw materials and labor, subject to the same standard of goods, common rules and regulations, and as such, the government policies must involve construction of the transportation systems to be interconnected with the neighboring countries, such as, railway, hi-speed train, road network, in accordance with the government’s strategy to ensure Thailand will gain the utmost benefits from ASEAN Economic Community (AEC). These investment projects will multiply the value of



works in Thai construction industry up to five times and should reach Baht One Trillion in the next five years. There are also several real estate development projects and the Dawei Development Project in Myanmar, including construction of many residences along the roads and railways, which would enable Thai construction industry to expand, particularly the government’s construction projects, such as, several railway projects. The government projects under the 2013 annual budget and the flood recovery budget in the total amount of over Baht Seventy Thousand Million include the infrastructure investment plans of the Department of Highways, the Department of Local Roads, and the State Railway of Thailand (SRT). Moreover, many of the government’s large-scale infrastructure projects which are under study have also progressed to some extent, such as, two Green Line Projects, the Pink Line Project, the new Parliament Building Project, Phase 2 of the Suvarnabhumi Airport Project, the Mono Rail Project, including five double track railway project, and hi-speed train project, etc., reflecting a positive sign to the potential construction volume in the future, which would revive the construction business market. In addition, we are expanding investment to other countries; whereby with regard to the foreign investment policy, we would focus on bidding for infrastructure development projects in various forms, whether single contractor or joint venture, subject to the conditions of each such project. The Company’s main focus shall be those countries in Asia.

Construction business can be classified into 3 groups as follows.

1. Small and medium sized contractors: they have a moderate capability in the execution of works. Most of their revenues are dependent on small private and public projects. The intensity of rivalry is high. Construction industry in Thailand is composed of a large number of small and medium-sized companies across the nation. The contractors complete on prices and market shares against their rivals. The result would lower profits. 2. Large sized contractors: they focus on large scale construction projects including local and international markets, which require sophisticated construction skills and high construction technologies. Some of these contractors own high technology machines, heavy equipment and construction material businesses. The intensity of rivalry is moderate. Three major players include Ch. Karnchang Public Company Limited, Italian-Thai Development Public Company Limited, and Sino-Thai Engineering and Construction Public Company Limited. They completes on a high capability and potential in the execution of works.

No. Company’s Name Total Assets THB. Million

Total Revenue

THB.Million 1 Italian-Thai Public Co.,Ltd. 58,628.25 33,922.44 2 CH.Karnchang Public Co.,Ltd. 50,032.53 15,016.51 3 Sino-Thai Engineering and Construction Public Co.,Ltd. 19,168.18 14,660.32

Source: Setsmart Remark: Consolidate Financial Statements for three months and nine months ending September 30, 2012

3. Foreign contractors: they are multinational companies that have advanced construction technologies. Most of these companies are from Japan, China and Europe including Nakajima, Obayashi Corporation, Kumagai, Siemens, Bilfinger and China State. They focus on large scale projects within term of joint venture with the local large sized contractors.



3.2 BANGKOK EXPRESSWAY PCL. – Buyer

3.2.1 Business description

Bangkok Expressway Public Company Limited (“BECL”) was founded on December 23, 1987 with registered capital of THB 100,000 since the Thai government wished to have the private sector to jointly invest in the development of the national transportation system, including the expansion of expressway network.

The Company has the registered capital of THB 8,000 million and the paid-up capital of THB 7,700 million, divided into 770 million ordinary shares at the par value of THB 10 per share.


Board of Directors of BECL as of November 28, 2012 are shown as follows:

No. Directors’ name Position 1 Dr. Virabongsa Ramangkura Chairman of the Board of Director 2 Mr. Plew Trivisvavet Chairman of Executive Board 3 Mrs. Payao Marittanaporn Managing Director 4 Mr. Supong Chayutsahakij Director 5 M.L. Prasobchai Kasemsant Director 6 Mr. Panit Dunnvatanachit Director 7 Miss Arisara Dharamadhaj Director 8 Mrs. Vallapa Assakul Director 9 Mr.Lertsak Chingharanon Director 10 Prof. Suphachai Phisitvanich Audit Committee Chairman and Independent Director 11 Gen. Sampao Choosri Audit Committee member 12 Dr. Annop Tanlamai Audit Committee member

Source: the SET

The first 10 major shareholders of BECL as on December 26, 2012 are shown as follows.

No. Name No. of shares

%

1 Ch. Karnchang Public Company Limited 116,669,550 15.15 2 Thai NVDR Co. Ltd. 96,623,100 12.55 3 Bangkok Bank Public Company Limited 55,295,390 7.18 4 BNY Mellon Nominees Limited 40,272,800 5.23 5 Kroung Thai Bank Public Company Limited 38,500,550 5.00 6 Bangkok Life Assurance Public Company Limited 37,017,300 4.81 7 The Bank of New York (Nominees) Limited. 18,919,741 2.46 8 State Street Bank and Trust Company 16,725,031 2.17 9 HSBC (Singapore) Nominees Pte Ltd. 16,531,600 2.15 10 Chase C.S. Cebtral Nominees Limited 24 16,117,500 2.09 Total 452,672,562 58.79

Source: the SET



Section 4 Reasonableness of the Transaction

4.1 Objectives of the Transaction

The Company intends to sell 438,900,000 of ordinary shares in TTW, with a par value of THB 1 each, at THB 7.55 per share. Total value of the Transaction shall be amounted to THB 3,313,695,000. The selling price is determined from discount of 5% from the average price for the past 60 business days up to December 17, 2012 on which both the Company and BECL (“contractual parties”) concluded their negotiation. As a result of the transaction on disposition of TTW shares, the Company will enhance liquidity and strengthen its capital structure. The Company shall lower its debt to equity ratio (“D/E ratio”) and net debt to equity ratio to an appropriate level in order to support new business opportunity with the competitive financial cost. By selling 11.00% of TTW shares, the Company shall realize gain on sale of the investment in TTW, whilst the value of remaining portion of 19.04% in TTW shall be booked by fair value and realized as accounting profit. Moreover, the Company shall use cash, received from sale of TTW, for repaying some debt and working capital in the business. In this respect, the liabilities are decreased, whereas the shareholders’ equity is increased. The Company shall obtain the ultimate objectives from selling all of proposed amount at once.

In addition, the Company shall realize gain on sale of investment in TTW shares, amounting to approximately THB 2,221,000,000*, which shall be realized as profit for the period in Statements of Profit and Loss after proceeding with the Transaction. Due to the decrease in shareholding in TTW by 11.00% of registered and paid-up capital from 30.04% to 19.04%, the Company shall reclassify the investments in TTW from an investment in associate to available-for-sale investments, and the Company will change the investment booking policy from the equity method to the fair value method. Thus, the Company’s financial statements shall reflect the actual value of its investment. The Company shall realize accounting profit from remaining portion in every accounting period.

Remark : * Calculation is derived from selling amount of 438,900,000 shares times the difference between selling price at THB 7.55 each and book value per share of TTW, based on equity method as of end of 1st quarter, 2013, on which expected to enter into the Transaction (book value per share is estimated by the management of the Company)

4.2 Advantages and Disadvantages from Entering into the Transaction

Advantages from entering into the Transaction

1. The Company shall realize gain on sale of investment in TTW shares as the profit for the period in Statements of Profit and Loss, accounting for approximately THB 2,221,000,000, after the disposal of TTW shares at 11.00% of registered and paid-up capital or 438,900,000 shares at THB 7.55 each. The Transaction will take place in 2013 after receiving an approval from the Shareholders’ Extraordinary General Meeting of the Company and BECL on February 5 and February 6, 2013, respectively. However, gain on sale of investment in TTW is accounted for corporate income tax computation. Thus, the Company is required to pay tax for such item, amounting to approximately THB 477,000,000. Corporate income tax rate in 2013, on which the Company expects to proceed to the Transaction, is 20.00%.



2. The Company shall use cash, received from sale of TTW, for repaying debt, working capital in business and enhancing liquidity. Total value of the Transaction is amounted to THB 3,313,695,000. However, the Company shall repay some debt with the amount of THB 1,723,000,000, which is net of tax on gain in the investment of approximately THB 477,000,000 from THB 2,200,000,000, payment which will immediately receive after Transaction is proceeded (considering 20.00% of corporate income tax rate in 2013). Moreover, the Company shall use the remaining amount of THB 1,113,695,000 as its working capital in the business.

3. Actual value of the investment shall be reflected in the Company’s financial statements. Due to the decrease in shareholding in TTW by 11.00% of registered and paid-up capital from 30.04% to 19.04%, the Company shall reclassify the investments in TTW from an investment in associate to available-for-sale investments, and the Company shall change the investment booking policy from the equity method to the fair value method.

4. The Transaction enables the Company to strengthen capital structure and lowers D/E ratio. With reference to the Company’s management interviews and its consolidated financial statements as of September 30, 2012, the Company has D/E ratio of 5.33x and net debt to equity ratio of 2.64x closer to the Company’s financial covenant of net debt to equity ratio of 3.00x and higher than the management’s financial policy of net debt to equity ratio of 2.5x. By one-time selling 11.00% of TTW shares , the Company shall realize gain on sale of the investment in TTW, whilst the value of remaining portion of 19.04% in TTW shall be booked by fair value and realized as accounting profit. Moreover, the Company shall use cash, received from sale of TTW amounted to 1,723,000,000, for repaying some debt and the remaining amount of THB 1,113,695,000 as its working capital in the business. In this respect, the liabilities are decreased, whereas the shareholders’ equity is increased. The Company shall reduce current D/E ratio of 5.33x to an estimated D/E of 2.80x and the net debt to equity ratio of 2.64x to an estimated net debt to equity ratio of 1.33x. The estimated of D/E ratio and net debt to equity ratio can be summarized as follows:

(unit: THB million)

Items As of September 30, 2012 (Prior to the Transaction)

Effect from Entering into

the Transaction

After Entering into the Transaction

Total Liabilities 42,122.41 (1,723.00)* 40,399.41 Net Debt 20,871.90 (1,723.00)* 19,148.90 Shareholders’ Equity 7,910.11 7,016.00** 14,926.11 Debt to Equity 5.33x 2.80x Net Debt to Equity 2.64x 1.33x

Remark : * The calculation is derived from an estimated cash on investment in TTW of approximately THB 2,200 million less an estimated tax of THB 477 in million.

** The calculation is derived from an estimated gain on investment in TTW of approximately THB 2,221 million and profit from reclassification of the investment in TTW into available-for-sale investments of approximately THB 4,795 million.



In addition, the IFA considers that the Company may rely on cash of THB 2,200,000,000 It sells 291,270,000 shares in TTW to BECL, representing 7.30% of the registered capital, the remaining 22.74% shall not change the investment booking policy from the equity method to the fair value method. The result shall decrease the D/E ratio of 5.33x to an estimated D/E ratio of 4.54x and the net debt to equity ratio of 2.64x to an estimated net debt to equity ratio of 2.15x. Therefore, the Company sells its 438,900,000 shares, representing 11.00% of the registered capital, may preferably benefit the Company compared with selling 291,270,000 shares in TTW, representing 7.30% of the registered capital.

Disadvantages from entering into the Transaction

1. The Company may lose seats in the Board of Directors of TTW for representatives of shareholders, who take part in formulating of policies and directions of the business, as for the decrease in portion of shareholding in TTW. Prior to the Transaction, the Company has 4 representatives in the Board of Directors of TTW, with shareholding of 30.04% of registered and paid-up capital. However, the number of the representatives may decrease, since the shareholding in TTW is decreased to 19.04%.

2. The Company shall lose an opportunity to receive future dividend in term of cash from TTW. Basing on dividend per share of TTW at THB 0.35 in 2011 and THB 0.47 in 2012, the Company will lose opportunity to receive dividend of THB 153,620,000 – 206,280,000, considering the selling amount of 438,900,000 shares.

3. The Company shall lose an opportunity to share of profit from TTW’s operation by equity method. Since the Company will decrease the proportion of shareholding in TTW from 30.04% to 19.04% of registered and paid-up capital, the Company has changed the investment booking policy from the equity method to the fair value method. In this respect, such fair value shall be calculated based on the latest buying price as at the end of the period of the SET.

4.3 Advantages and Disadvantages from Not Entering into the Transaction

Advantages from not entering into the Transaction

1. The Company shall remain number of shareholders’ representatives in the Board of Directors of TTW, as for it maintains proportion of shareholding in TTW. The Company currently has 4 shareholders’ representatives, who take part in formulating of policies and directions of the business.

2. The Company shall retain level of return in term of cash dividend payment from the investment in TTW, given that TTW payout the dividend at the similar amount to the past years. Basing on the amount of 438,900,000 shares and dividend per share of THB 0.35 in 2011 and THB 0.47 in 2012, the Company shall receive dividend of THB 153,620,000 – 206,280,000.



3. The Company has an opportunity to share of profit from TTW’s operation in its Statements of Profit and Loss by equity method. Due to the decrease the proportion of shareholding in TTW from 30.04% to 19.04% of registered and paid-up capital, the Company has to change the investment booking policy from the equity method to the fair value method which price is referred to latest buying price in the SET. By not entering into the Transaction, however, the Company will share of profit from its investment in TTW, if TTW has profit from its business operation. As a result, the Company shall increase its profit for the period.

4. The Company is required to pay corporate income tax on gain on sale of the investment in TTW, referring to 438,900,000 shares or equal to 11.00% of registered and paid-up capital at THB 7.55 per share. Tax payment shall be amounted to approximately THB 477,000,000, deriving from gain on sale of approximately THB 2,221,000,000, whereas corporate income tax rate is 20.00%.

Disadvantages from not entering into the Transaction

1. By not entering into the Transaction, the Company could not realize gain on sale of investment in TTW. Gain on sale of TTW shall be amounted to approximately THB 2,221,000,000, computing from selling amount of 438,900,000 shares or equal to 11.00% of registered and paid-up capital at THB 7.55 per share.

2. The Company may lose opportunity to employ received cash to partially repay debt, to use as working capital and to enhance its liquidity. It also includes opportunity to enhance business expansion and key business operation. By entering into the Transaction, the Company shall immediately receive cash at amount of THB 2,200,000,000, equaling to amount after tax on gain on sale of the investment of approximately THB 1,723,000,000 (considering corporate income tax rate at 20.00%). Moreover, the Company shall lose the opportunity to receive total value of the Transaction is THB 3,313,695,000, equaling to total value after tax of approximately THB 2,836,695,000 (computing tax on gain on sale of investment in TTW, with 20.00% of corporate income tax rate).

3. Financial statements of the Company may not reflect actual value of its investment. By not entering into the Transaction, the Company shall remain proportion of shareholding in TTW at 30.04% of registered and paid-up capital. Thus, the Company shall book the value of investment method by the equity method, instead of booking with the fair value which price is referred to latest buying price in the SET.

4. The Company may lose an opportunity to strengthen its working capital structure to support its investments in large scale construction projects stimulated by government’s policies. The Company currently has the net debt to equity ratio of 2.64x closer to its financial covenant net debt to equity ratio of 3.00x. From not entering into the Transaction, the Company shall lose an opportunity to lower its financial cost to enhance the investment opportunities.



Section 5 Appropriateness of the Transaction’s Price and Conditions

The Company intends to sell its 438,900,000 shares in TTW to BECL, representing 11% of the registered capital, at the price of THB 7.55 per share (“Transaction’s Price”), amounting to THB 3,313,695,000, with the discount of 5% from the average price for the past 60 business days up to December 17, 2012 on which both the Company and BECL (“Contractual Parties”) concluded their negotiation. BECL shall make payment by cashier's cheque or money transfer via banking system on the transaction date in the amount of THB 2,200,000,000, and BECL shall make the remaining payment in full by April 2015.

To evaluate appropriateness of the Transaction’s Price, the IFA has valued TTW by using 5 approaches as follows:

(1) Book Value Approach (BV) (2) Adjusted Book Value Approach (ABV) (3) Volume Weighted Average Market Price Approach (MP) (4) Market Comparable Approach

- Price to Book Value Approach (P/BV) - Price to Earnings Approach (P/E) - Enterprise Value to Earnings before Interest, Income Tax, Depreciation, and

Amortization Expenses Approach (EV/EBITDA) (5) Discounted Cash Flow Approach (DCF)

5.1 Book Value Approach (BV)

The valuation of TTW calculated by using the book value approach represents the book value of TTW shown in its latest audited or reviewed financial statements, which does not take into the consideration of future operating performance as well as overall economic and industry conditions.

Based on reviewed consolidated financial statements of TTW as of September 30, 2012, the book value of TTW per share is as follows.

Book value per share as of September 30, 2012 unit: THB million Total Assets 24,111.09

Less : Total Liabilities 13,931.61

Less : Non-Controlling Interests 32.07

Owners’ (Shareholders’) Equity 10,147.41

Issued and Paid-up Shares (million shares) 3,990.00

Book Value per Share (THB) 2.54 * Par value is equal to THB 1 per share

Based on the book value approach, the valuation of TTW is THB 2.54 per share. The Transaction’s Price of THB 7.55 per share is higher than the book value of THB 2.54 per share by THB 5.01, or 197.24% higher.



In sum, the IFA does not use the value obtained from the valuation of TTW calculated by using the book value approach for consideration of appropriateness of the Transaction’s Price, since it does not reflect the value of TTW by being able to make a profit and does not take into account the capabilities and competitiveness of TTW in the future.

5.2 Adjusted Book Value Approach (ABV)

The valuation of TTW is carried out by adjustments of the book value of TTW presented in financial statements of TTW with the market or fair value of assets and liabilities including post-financial statement events as well as an increase/decrease in any contingent liability (if any). The IFA refers to the reviewed consolidated financial statements of TTW as of September 30, 2012 and considers important items which may affect the book value of TTW.

By reference to details disclosed in the notes of the financial statements of PTW as of September 30, 2012, PTW has requested a corporate income tax refund it paid between 2008 and 2010, amounting to THB 386 million, which is currently under review by the revenue department. In September 2012, PTW receipt the corporate income tax refund it paid in 2008, amounting to THB 62 million recorded as other incomes in an income statement of PTW as of September 30, 2012. The IFA interviews TTW’s management that the remaining refunds of THB 324 million is expected to receive in 2013.

Details of Adjustment of Book Value

Amount (THB million)

Shareholders’ Equity of TTW as of September 30, 2012 10,147.41 Adjustment Add: Corporate Income Tax of PTW 324.00 Net Book Value, Post-Adjustment 10,471.41 Issued and Paid-up Shares (million shares) 3,990.00 Adjusted Book Value per Share (THB) 2.62 * Par value is equal to THB 1 per share

The IFA does not adjust an increase/decrease of fixed assets of TTW and its subsidiaries including PTW and TWO. TTW and its subsidiaries do not have a valuation report of their fixed assets for the past one year. The IFA interviews TTW’s management that TTW and its subsidiaries do not plan to sell their fixed assets. The fixed assets of TTW and its subsidiaries including assets under concession agreements, property, plant and equipments are used for water production and distribution to the Provincial Waterworks Authority (“PWA”). In addition, assets under concession agreements of PTW will be transferred to PWA by the end of the contract as specified in the BOOT contract made between PTW and PWA.

Based on the adjusted book value approach, the valuation of TTW is THB 2.62 per share. The Transaction’s Price of THB 7.55 per share is higher than the adjusted book value of THB 2.62 per share by THB 4.93, or 188.17% higher.



In sum, the IFA does not use the value obtained from the valuation of TTW calculated by using the adjusted book value approach for consideration of appropriateness of the Transaction’s Price, since it does not reflect the value of TTW in the future operating performance. 5.3 Volume Weighted Average Market Price Approach (MP)

The valuation of TTW is based on volume weighted average market prices of TTW traded on the SET. The IFA observes the weighted average of the close prices and the average daily trading volumes for the past one year, July 7, 2011 to December 19, 2012, the last business day before the SET is notified on the disposition of shares in TTW at the Transaction’s Price of THB 7.55 per share on December 20, 2012. The IFA considers that the share prices of TTW traded on the SET over the past one year until December 19, 2012, may not be affected by the announcement of the Transaction’s Price. As a result, the valuation of TTW based on volume weighted average close prices approach can be summarized as follows.

Interval Weighted Average Close

Price (THB per share)

Average Daily Trading Volume (shares)

% of Average Daily Trading Volume to Total Paid-up

Shares*

Retroactive 1 month 8.64 5,937,668.80 0.15 Retroactive 3 months 8.04 4,261,377.14 0.11 Retroactive 6 months 7.33 4,260,976.28 0.11 Retroactive 9 months 6.85 3,903,470.85 0.10 Retroactive 12 months 6.43 3,978,411.61 0.10

Source: Setsmart * Average Daily Trading Volume to Total Paid-up Shares (Turnover Ratio)

Historistical Trading of TTW from July 7, 2011 to December 19, 2012.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

7 Jul

11

7 Aug

11

7 Sep

11

7 Oct

11

7 Nov

11

7 Dec

11

7 Jan

12

7 Feb

12

7 Mar

12

7 Apr

12

7 May

12

7 Jun

12

7 Jul

12

7 Aug

12

7 Sep

12

7 Oct

12

7 Nov

12

7 Dec

12

Daily Trading Volume ('000shares)Cl

osin

g Pric

e (TH

B pe

r sha

re

Daily Trading Volume Close Price



The IFA also observes the liquidity of TTW’s securities. The average daily trading volumes of TTW (retroactive 1 to 12 months) are range from 3,903,471 to 5,937,669 shares. The turnover ratio of TTW are range from 0.10% to 0.15%, compared to the 3 largest companies (PTT, PTTEP, and ADVANC) by market capitalization as of December 19, 2012, they have turnover ratios as follows.

Interval PTT PTTEP ADVANC Average Retroactive 1 month 0.12 0.22 0.25 0.20 Retroactive 3 months 0.13 0.15 0.20 0.16 Retroactive 6 months 0.14 0.13 0.19 0.15 Retroactive 9 months 0.14 0.13 0.19 0.15 Retroactive 12 months 0.17 0.14 0.21 0.17 Maximum 0.17 0.22 0.25 0.20 Minimum 0.12 0.13 0.19 0.15 Source: Setsmart

As can be seen, the turnover ratios of the 3 largest companies are range from 0.12% to 0.25%

compared with the turnover ratio of TTW ranging from 0.10% to 0.15%. The turnover ratios of TTW can be comparable to those of the 3 largest companies.

The IFA considers that the market price of TTW is liquidity determined by demand and supply of investors. Thus, it should reflect the fair value of TTW. The valuations of TTW based on the volume weighted average market price approach are range from 6.43 to 8.64 per share.

In sum, the IFA uses the values obtained from the valuation of TTW by using the volume weighted average market price approach for consideration of appropriateness of the Transaction’s Price. In addition, the IFA considers that the weighted averages of the close prices for the past 6 months are appropriate and reflect the fair value of TTW. Therefore, the valuations of TTW are range from THB 7.33 to 8.64 per share. The Transaction’s Price of THB 7.55 per share is higher than the fair value of THB 7.33 per share by THB 0.22, or 3.00% higher, and lower than the fair value of THB 8.64 per share by THB 1.09, or 12.62% lower. 5.4 Market Comparable Approach

For market comparable approach, the IFA refers to the latest consolidated financial statements of market comparable company ended on September 30, 2012 and its market prices based on historical 1 month, 3 months, 6 months, 9 months, and 12 months retroactive from December 19, 2012, the last business day before the SET is notified on the disposition of shares in TTW at the Transaction’s Price of THB 7.55 per share on December 20, 2012. The market comparable approaches that are employed in the valuation of TTW include.

Price to Book Value Approach (P/BV) Price to Earnings Approach (P/E) Enterprise Value to Earnings before Interest, Income Tax, Depreciation, and Amortization

Expenses Approach (EV/EBITDA)



TTW is in an energy and utilities sector from which the IFA selects Eastern Water Resources Development and Management Public Company Limited (“the Comparable” or “EASTW”), a listed company whose products and services are relatively similar to those of TTW.

Comparable Thicker Main Business

Eastern Water Resources Development and

Management Public Company Limited EASTW

Water Producer & Distributor

5.4.1 Price to Book Value Approach (P/BV)

The price to book value approach is calculated by multiplying the book value of TTW per share with the average price to book value ratio (“P/BV”) of the comparable operating in energy and utilities business. Using the price to book value approach, the IFA assesses the share value of TTW by multiplying the book value of TTW derived from the audited consolidated financial statements as of September 30, 2012 with the average P/BV multiples of the Comparable. Average P/BV multiples are based on historical 1 month, 3 months, 6 months, 9 months, and 12 months retroactive from December 19, 2012 (“the Last Business Day”). Average P/BV multiples of the Comparable during the different period intervals can be shown as follows.

Interval Average P/BV of Comparable* (X)

Book Value of TTW (THB per Share)

Share Value of TTW (THB)

Retroactive 1 month 3.00 2.54 7.62 Retroactive 3 months 2.94 2.54 7.47 Retroactive 6 months 2.64 2.54 6.70 Retroactive 9 months 2.30 2.54 5.84 Retroactive 12 months 2.10 2.54 5.34 * Source: Setsmart **Source: Consolidated financial statement as of September 30, 2012

With reference to the financial statements of TTW ended September 30, 2012, the book value of TTW is THB 2.54 per share. By applying the P/BV multiples of the Comparable, the valuations of TTW are range from THB 5.34 to 7.62 per share. The Transaction’s Price of THB 7.55 per share is higher than the fair value of THB 5.34 per share by THB 2.21, or 41.39% higher, and lower than the fair value of THB 7.62 per share by THB 0.07, or 0.92% lower. 5.4.2 Price to Earnings Approach (P/E)

The price to earnings ratio approach is calculated by multiplying earnings per share of TTW of the last 4 trailing quarters of THB 0.59 per share (from October 1, 2011 to September 30, 2012) with the average price to earnings per share ratio (“P/E”) of the Comparable. The average P/E ratios of the Comparable are based on historical 1 month, 3 months, 6 months, 9 months, and 12 months values retroactive from December 19, 2012 (the Last Business Day). The P/E multiples during difference period interval can be shown as follows.



Interval Average P/E of

Comparable* (X) Earnings per Share of TTW**

(THB per Share) Share Value of TTW

(THB per Share)

Retroactive 1 month 16.91 0.59 10.02

Retroactive 3 months 17.03 0.59 10.09




* Source: Bloomberg ** Calculated using the last 4 trailing quarter data (from October 1, 2011 to September 30, 2012)

As can be seen, the valuations of TTW derived by the P/E ratio approach are range from THB 8.12 to 10.09 per share. The Transaction’s Price of THB 7.55 per share is lower than the fair value by THB 0.57 to 2.54 per share or 7.02% and 25.17% respectively.

5.4.3 Enterprise Value to Earnings before Interest, Taxes, Depreciation and Amortization (EV/EBITDA)

For the EV/EBITDA approach, the valuation of TTW is based on an enterprise value (“EV”) that are derived by multiplying the earnings before interest, tax, depreciation, and amortization expenses (“EBITDA”) of the last 4 trailing quarters (from October 1, 2011 to September 30, 2012) with the EV/EBITDA multiples of the Comparable.

The calculation of equity value of TTW is as follows.

The equity value of TTW = (The average EV/EBITDA of the comparable x EBITDA of TTW) – (Market value of TTW’s interest bearing debt – TTW’s cash + TTW’s non-controlling interest)

With reference to the consolidated financial statements of TTW as of September 30, 2012, TTW had a trailing 12-month EBITDA (from October 1, 2011 to September 30, 2012) of THB 5,337.43 million, interest bearing debts of THB 13,537.46 million, unrestricted cash and cash equivalents of THB 2,165.35 million, non-controlling interests of THB 32.07 million and paid-up shares of 3,990 million.

The IFA considers the average EV/EBITDA ratios of the Comparable based on historical 1 month, 3 months, 6 months, 9 months, and 12 months retroactive from December 19, 2012 (the Last Business Day). The EV/EBITDA rations during different period interval and calculations are shown as follows.

Interval Average EV/EBITDA of

Comparable* (X) EBITDA of TTW

(THB per Share)** Share Value of TTW

(THB per Share)

Retroactive 1 month 12.48 1.34 13.84



Retroactive 9 months 9.25 1.34 9.51 Retroactive 12 months 8.79 1.34 8.89

* Source: Bloomberg ** Calculated using the last 4 trailing quarter data (from October 1, 2011 to September 30, 2012)



As can be seen, the average EV/EBITDA multiples are range from 8.79x to 12.48x, while the EBITDA of TTW is THB 5,337.43 million, equaling to THB 1.34 per share. Thus, the share values of TTW are range from THB 8.89 to 13.84 per share. The Transaction’s Price of THB 7.55 per share is lower than the fair value by THB 1.34 to 6.29 per share or 15.07% and 45.45% respectively.

In sum, the IFA does not use the values calculated from the market comparable approach, including the price to book value, price to earnings and EV/EBITDA approach. EASTW is solely one comparable company whose main business is similar to those of TTW. The market multiples of EASTW alone may be insufficient to determine the market multiples of the industry. In addition, the market prices of EASTW are relatively low liquidity. The turnover ratios of EASTW for the past 12 months are range from 0.03% to 0.05%, which are relatively low liquidity compared with the turnover ratio of TTW ranging from 0.10% to 0.15%.

5.5 Discounted Cash Flow Approach (DCF)

In this case, Discounted Cash Flow Approach (“DCF”) is an estimation of a net present value of free cash flows to shareholder’s equity (Free Cash Flow to Equity (“FCFE”) that can be generated in the future. It uses future free cash flow projections and discounts them to arrive at a present value. The IFA refers to the financial projections and the financial statements of TTW and its subsidiaries as of September 30, 2012. The IFA assumes that TTW and its subsidiaries pursue their business on a going concern basis. Should there be any change in economic conditions and external factors that may adversely affect the business operation of those companies and the assumptions stated herein this valuation exercise, the equity value of TTW may differ accordingly. The equity value of TTW may not be references for purposes other than for consideration of the appropriateness of the Transaction’s Price. In addition, the IFA gives opinions on the assumptions that any information provided by the Company, TTW and subsidiaries is full, complete and correct for which the IFA does not warrant the accuracy and completeness of the information.

The IFA considers that the share value of TTW based on the DCF approach is appropriate. It is derived from the DCF-based share value of each business unit including TTW, PTW and NN2 (“Sum of the Parts”). The IFA projects the DCF-based share value of TTW, PTW and NN2 from October 1, 2012 to fiscal year ended 2039, 2023 and 2038 respectively.

The equity value of TTW based on the Sum of the Parts principle includes. 1. The equity value of TWO, the equity value of CKP (excluding SEAN, BKC and NRS) and the

equity value of SEAN (excluding NN2) by the adjusted book value approach 2. The equity value of BKC and NRS by the market price approach 3. The equity value of TTW (excluding TWO PTW and CKP), the equity value of PTW (excluding

TWO) and the equity value of NN2 by the DCF approach

Reference is made to the fact that the Company has held the board of directors' meeting no. 5/2012 on November 14, 2012. The board of directors' meeting has passed the resolution granting approval for the Company to sell its ordinary shares in CRS to CKP, representing 30 percent of the registered capital and sell its ordinary shares in BIC to CKP, representing 46 percent of the registered capital. The acquisition of shares of CRS and BIC by CKP occurred after September 30, 2012. It does not affect the share value of CKP in the consolidated financial statements as of September 30, 2012. Since CKP recorded its investments in CRS and BIC at the cost of investments while it paid cash by the same amount. Therefore, the IFA does not value shareholder’s equity of CRS and BIC.



1. The equity value of TWO, the equity value of CKP (excluding SEAN, BKC and NRS) and the equity value of SEAN (excluding NN2) is carried out by the adjusted book value approach (“ABV”), presented in their financial statements as of September 30, 2012 with the market or fair value of assets and liabilities including post-financial statement events as well as an increase/decrease in any contingent liability (if any). The equity values by shareholding portion of TTW are summarized as follows.

( Unit: THB million) Financial Statements (Company) as of

September 30, 2012. Equity Value of

TWO Equity Value of

CKP Equity Value of

SEAN

Total Asset 132.54 9,930.45 6,980.71 (-) Total Liability (23.31) (912.09) (384.07) Total Shareholder’s Equity 109.23 9,018.36 6,596.65 +/(-) Increase/ (Decrease) in Fixed Assets - - - (-) Commitments and Contingent Liabilities - - - Total Shareholder’s Equity, Post-Adjustment 109.23 9,018.36 6,596.65 (-) Investments in Subsidiaries and Associates - (9,249.45) SEAN (6,606.75) NN2 (527.06) BKC (87.88) NRS Adjusted Equity Value (Sum of the Parts) 109.23 (846.03) (10.11) Shareholding Portion of TTW (%) Direct

68.50 Indirect PTW 30.872

30.00 16.801

Equity Value by Shareholding Portion of TTW 74.823 33.724 (253.81) (1.70) หมายเหตุ : 1 TTW has ordinary shares in CKP by 30.00% and CKP has ordinary shares in SEAN by 56.00% 2 TTW has ordinary shares in PTW by 98.00% and PTW has ordinary shares in TWO by 31.50%. 3 Equity value of TWO held by TTW 4 Equity value of TWO held by TTW and PTW has ordinary shares in TWO by 30.87%.

TTWDCF

TWOABV

PTWDCF

CKPABV

68.50%

100.00% (ex TWO, PTW, CKP)

68.50% 98.00% 30.00%

30.00% of 56.00% (ex NN2) 30.00% of MP of 100.00% 30.00% of MP of 30.00%

30.00% (ex SEAN, BKC, NRS)

NN2DCF

SEANABV

BKCMP

NRSMP

98.00% (ex TWO)

98.00% of 31.50%

30.00% of 56.00% of 75.00%

75.00%

56.00% 30.00%100.00%

31.50%

Remark: ex – Exclude DCF – Discount Cash Flow Approach ABV – Adjusted Book Value Approach

MP – Market Price Approach



For the equity value of CKP and SEAN, the IFA does not adjust an increase/decrease of the fixed assets. Since CKP and SEAN do not have a valuation report of their fixed assets for the past one year. However, the IFA and management of the Company consider that CKP and SEAN are a holding company whose assets including BKC NRS and NN2 are mainly in the form of investing capitals. In addition, NN2 was established in 2011. NRS and BKC were established in March 2012 and August 2012 respectively. The fixed assets are sufficient to reflect the market value.

For the equity value of TWO, the IFA does not adjust an increase/decrease of the fixed assets. TWO does not have a valuation report of its fixed assets for the past one year. The IFA considers that the fixed assets of TWO include property, plant and equipments, accounting to 58.15% of its total assets. However, TWO do not plan to sell their fixed assets because the fixed assets are used in business operation basis.

In summary of the equity value by shareholding portion of TTW, the equity value of TWO is THB 108.54 million, the equity value of CKP (excluding SEAN, BKC and NRS) is THB (253.81) million and the equity value of SEAN (excluding NN2) is THB (1.70) million.

2. The equity value of BKC and NRS is conducted by the market price approach (“MP”). Regarding to the Notification on Disposition Shares in BKC and NRS on June 2012, the board of directors' meeting has passed the resolution granting approval for the Company to sell all 2,342,498 ordinary shares in BKC to CKP at the price of THB 225 per share, totaling THB 527.06 million. TTW has ordinary shares in BKC by 30.00% (TTW has ordinary shares in CKP by 30.00% and CKP has ordinary shares in BKC by 100.00%). Thus, the equity value of BKC is THB 158.12 million.

Next, the Company sells all 664,500 ordinary shares in NRS to CKP at the price of THB 128.50 per share, totaling THB 85.39 million. TTW has ordinary shares in CKP by 30.00%. As a result, the equity value of NRS is THB 25.62 million.

In addition, the IFA considers appropriateness of the Transaction’s Price regarding to the Disposition Shares in BKC and NRS. The IFA interviews management of the Company and evaluate the valuation report conducted by financial advisor of the Company. The share values of BKC and NRS are established by using the discount cash flow approach (DCF). The IFA considers that the share values of BKC and NRS are close to the share values conducted by the financial advisor of the Company.

In summary of the equity value by shareholding portion of TTW, the equity value of BKC is THB 158.12 million and the equity value of NRS is THB 25.62 million.

3. The equity value of TTW (excluding TWO PTW and CKP), the equity value of PTW (excluding TWO) and the equity value of NN2 are conducted by using the DCF approach. In this case, the DCF approach is an estimation of a net present value of free cash flows to shareholder’s equity (Free Cash Flow to Equity (“FCFE”) that can be generated in the future. Cash inflows and cash outflows of TTW, PTW and NN2 can be precisely projected through contracts including purchasing agreements, operation and maintenance agreements, concessions, and loan agreements.



5.5.1 Key Assumptions for the Financial Projections of TTW and PTW

The key assumptions used to prepare the financial projections based on 5 contracts

- Tap water purchase contract between TTW and PWA - Amendment in tap water purchase contract between TTW and PWA - Tap water operating contract between TTW and BIE - Production and distribution of tap water contract between PTW and PWA - Sale and purchase of tap water contract between PTW and PWA

and any information disclosed to the public as well as interviews of TTW’s management and its subsidiaries.

(A) Key Contracts

Name of Companies Summary of Agreements and Concessions TTW 1. Contract

Party Contract Date Contract Duration Contact Type Terms of Contract

: : : : : :

Tap Water Purchase Contract Provincial Waterworks Authority (“PWA”) September 21, 2000 30 years (July 21, 2004 – July 20, 2034) Build-Own-Operate (“BOO”) PWA will purchase tap water produced by TTW to distribute to consumers. The servicing area covers the whole Samutsakorn Province (including Krathumban District and Meuang District) and the area in Sampran District, Nakhon Chaisri District, Nakhon Pathom Province.


: : : :

Amendment in Tap water Purchase Contract Provincial Waterworks Authority (“PWA”) December 29, 2008 TTW’s total minimum of quantity purchased by PWA increases from 300,000 m3 per day to 354,000 m3 per day.

3. Concession Concession Provider Concession Period Terms of Right

: : : :

Tap Water Operating Concession Ministry of Natural Resources and Environment 25 years (March 11, 2005 – March 10, 2030) To operate and distribute tap water in 5 districts, 2 provinces including: 3. Nakhon Pathom Province: Sampran District, Nakhon

Chaisri District, and Buddhamonthon District 4. Samutsakorn Province: Krathumban District and

Meuang District 4. Contract

Party Contract Date Terms of Contract

: : : :

Permission in Using Water from the Tha Chin River National Water Resources Board April 24, 2001 To pump water from the Tha Chin river (former name, Nakhon Chai Si river) to produce tap water of 320,000 m3 per day and distribute to consumers in Nakhon Pathom Province and Samutsakorn Province



Name of Companies Summary of Agreements and Concessions 5. Contract

Party Contract Duration Terms of Right

: : : :

Operating Right Contract Bangpa-In Land Company Limited 30 years (August 7, 2009 to August 8, 2039) Right to operate and distribute tap water and treat waste water in Bangpa-In Industrial Estate

PTW 1. Contract Party Contract Date Contract Duration Contact Type Terms of Contract

: : : : : :

Production and Distribution of Tap Water Contract Provincial Waterworks Authority (“PWA”) August 31,1995 25 years (October 15, 1998 – October 14, 2023) Build-Own-Operate-Transfer (“BOOT”) To distribute tap water not exceeding 288,000 m3

2. Contract Party Contract Date Contract Duration Contact Type Terms of Contract

: : : : : :

Sale and Purchase of Tap Water Contract Provincial Waterworks Authority (“PWA”) September 15, 2005 Since the date of agreement to October 14, 2023 Build-Own-Operate-Transfer (“BOOT”) Additional purchase of tap water at 70,000 m3 per day

3. Concession Concession Provider Concession Period Terms of Right

: : : :

Tap Water Operating Concession Ministry of Interior 25 years (January 13, 2000 – January 12, 2025) To operate and distribute tap water Pathum Thani – Rangsit District, Pathum Thani Province


: : : :

Permission in Using Water from the Chaao Phraya River National Water Resources Board January 24, 1996 To pump water from the Chao Phraya river at 300,000 m3

per day (B) Assumptions on the Financial Projection Period

TTW: 27 years and 3 months (October 1, 2012 to 2039) with the reference to the tap water purchase contract between TTW and PWA ended in 2034 and the tap water operating contract between TTW and BIE ended in 2039.

PTW: 11 years and 3 months (October 1, 2012 to 2023) with the reference to 2 contracts between PTW and PWA ended in 2023, which are the production and distribution of tap water contract and the sale and purchase of tap water contract.

(C) Assumptions on Sale Revenue

TTW

1. The tap water purchase contract with PWA

Production capacity - The maximum production capacity of tap water is 440,000 cu.m. per day.



- The number of operating days is 365 or 366 days per year, except the number of operating days in fiscal year 2034 is 201 days, the water purchase contract will be terminated on July 20, 2034.

- The maximum production volume of tap water is 160.6 cu.m. per year, 365 days or 161.0 million cu.m. per year, 366 days.

- No extension of the production capacity throughout the financial projection period.

Sale volume - For fiscal year ended 2012, an estimated sale volume of tap water is projected by

annualizing actual sale volumes of the tap water for the past 9 months. - For fiscal year ended 2013, the estimated sale volume of tap water in 2012 is

added by 9.7 million cu.m. - For fiscal year ended 2014 to 2034, the estimated sale volume of tap water is

annually added by 8.0 million cu.m., up to the maximum production volume of tap water, which is 160.6 cu.m. per year, 365 days or 161.0 million cu.m. per year, 366 days.

Selling price per unit - With reference to the tap water purchase contract, selling price 1 (“minimum off

take”) is charge for the volume of tap water purchased up to 300,000 cu.m. per day. With reference to the Amendment in tap water purchase contract, selling price 2 (“excess”) is charge for the volume of tap water purchased in an excess of 300,000 cu.m. per day.

- For year ended 2012, the selling price 1 and 2 are an actual selling price in 2012. For year ended 2013 to 2034, the selling price 1 is expected to increase by 3% annually, a consumer price index (“CPI”) of the central province in December. The selling price 2 is forecasted to increase by 3% annually, a consumer price index (“CPI”) of the central province in September.

The summary of maximum capacity, sale volume, selling price and revenue from 2009 to 2034 is shown as follows.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2033E 2034E Maximum Capacity (cu.m. in millions) 160.6 160.6 160.6 120.6 161.0 160.6 160.6 160.6 160.6-161.0 88.4 Sale Volume (cu.m. in millions) 108.7 120.2 119.9 97.5 130.0 139.7 147.7 155.7 160.6-161.0 88.4

Selling Price per Unit (THB per unit) Selling Price 1 (minimum off take) 23.6 24.5 25.1 26.0 26.0 27.1 27.9 28.7 29.6-48.9 50.3 Selling Price 2 (excess) - 10.8 11.0 11.5 11.5 11.8 12.2 12.6 12.9-21.4 22.0 Revenue of Tap Water (THB in millions) 2,578.9 2,793.5 2,864.7 2,314.1 3,088.4 3,320.7 3,517.9 3,723.8 3,909.9-6,444.8 3,655.5



2. Operating Right Contract with BIE

Production capacity - The maximum production capacity of tap water is 48,000 cu.m. per day. - The number of operating days is 365 or 366 days per year, except the number of

operating days in fiscal year 2039 is 218 days, the operating right contract will be terminated on August 8, 2039.

- The maximum production volume of tap water is 17.5 cu.m. per year, 365 days or 17.6 million cu.m. per year, 366 days.

- No extension of the production capacity throughout the financial projection period.

Sale volume - For fiscal year ended 2012, an estimated sale volume of tap water is projected by

annualizing actual sale volumes of the tap water for the past 9 months. - For fiscal year ended 2013, the estimated sale volume of tap water in 2012 is

added by 1.7 million cu.m., including existing customer demands of 1.3 million cu.m. per year and new customer demands of 0.4 million cu.m. per year initiating on June 2013.

- For fiscal year ended 2014, the estimated sale volume of tap water in 2013 is added by 0.5 million cu.m.

- For fiscal year ended 2015 to 2039, an estimated sale volume of tap water is annually added by 0.2 million cu.m. per year, up to the production volume of tap water of 8.8 million cu.m. per year in year ended 2022, accounting to 50.00% of its maximum production capacity.

Selling price per unit - For fiscal year ended 2012, an estimated selling price is equal the selling price

used in the 3rd quarter of the year 2012, according to the operating right contract with BIE.

- For fiscal year ended 2014 to 2039, the estimated selling price is expected to increase by 7.50% every five year based on an estimation of the management of TTW.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2038E 2039E Maximum Capacity (cu.m. in millions) 17.5 17.5 17.5 13.2 17.6 17.5 17.5 17.5 17.5-17.6 10.5 Sale Volume (cu.m. in millions) 2.6 6.5 5.5 3.8 5.1 6.8 7.3 7.5 7.7-8.8 8.5 Selling Price per Unit (THB per unit) 22.5 22.5 22.5 22.5 22.5 22.5 24.2 24.2 24.2-32.3 34.7 Revenue of Tap Water (THB in millions) 59.2 145.9 123.1 85.9 114.5 151.9 176.6 181.0 185.9-283.0 294.0



Wastewater Treatment - For existing consumers, the volume of waste water treatment represents 74.00%

of the sale volume of tap water. For new consumers, the volume of waste water treatment represents 30.00% of the sale volume of tap water.

- For fiscal year ended 2012, an estimated services fee is equal to the service fee used in the 3rd quarter of the year 2012, according to the operating right contract with BIE. For fiscal year ended 2013 to 2039, the estimated services fee is expected to increase by 7.50% every five year based on an estimation of the management of TTW.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2038E 2039E Volume (cu.m. in millions) 2.0 4.7 3.8 2.6 3.5 4.8 5.1 5.2 5.4-6.2 6.1 Services Fee per Unit (THB per unit) 7.0 7.0 7.0 7.0 7.0 7.0 7.5 7.5 7.5-10.0 10.8 Revenue of Wastewater Treatment (THB in millions)

13.7 33.2 26.8 18.1 24.7 35.0 40.7 41.7 42.8-65.2 67.7

PTW

Production capacity - The maximum production capacity of tap water is 388,000 cu.m. per day. - The number of operating days is 365 or 366 days per year, except the number of

operating days in fiscal year 2023 is 287 days, the production and distribution of tap water contract will be terminated on October 14, 2023.

- The maximum production volume of tap water is 141.6 cu.m. per year, 365 days or 142.0 million cu.m. per year, 366 days, and or 111.4 million cu.m. per year, 287 days.

- No extension of the production capacity throughout the financial projection period. Sale volume

- For fiscal year ended 2012, an estimated sale volume of tap water is projected by annualizing actual sale volumes of the tap water for the past 9 months.

- For fiscal year ended 2013 to 2023, the estimated sale volume of tap water is annually added by 4.0 million cu.m., up to the maximum production volume of tap water, which is 141.6 cu.m. per year, 365 days or 142.0 million cu.m. per year, 366 days.

Selling price per unit - For fiscal year ended 2012, an estimated selling price is equal the selling price

used in the 3rd quarter of the year 2012. For year ended 2013 to 2023, the selling price is expected to increase by 3% annually, a consumer price index (“CPI”) of Thailand in July.



2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2022E 2023E Maximum Capacity (cu.m. in millions) 141.6 141.6 141.6 106.3 142.0 141.6 141.6 141.6 141.6-142.0 111.4 Sale Volume (cu.m. in millions) 117.3 125.4 129.6 101.8 135.7 139.7 141.6 141.6 141.6-142.0 111.4 Selling Price per Unit (THB per unit) 11.5 11.0 11.4 11.8 11.8 12.2 12.6 12.9 13.3-15.9 16.4 Revenue of Tap Water (THB in millions) 1,347.2 1,377.7 1,473.1 1,204.3 1605.8 1,702.7 1,777.4 1,830.7 1,890.8-2,251.5 1,823.5

(D) Assumptions on Cost of Goods Sold (Excluding Depreciation)

TTW

Cost of goods sold to PWA

- Cost of goods sold (“COGS”) includes a fixed cost and variable cost. - For fiscal year ended 2012, a fixed cost is projected by annualizing an actual

fixed cost for the past 9 months. - For fiscal year ended 2013 to 2034, the fixed cost is expected to increase by an

inflation rate of 3.00% annually, except an employee expense is projected to rise by 5.00% annually, according to a growth rate of employee expenses in the notes to the consolidated financial statements of TTW as of fiscal year ended 2010 and 2011.

- A unit of variable costs correlates with an amount of sale volumes. - For fiscal year ended 2012, the variable cost is projected by annualizing an actual

variable cost for the past 9 months. - For fiscal year ended 2013 to 2034, the variable cost is expected to increase by

an inflation rate of 3.00% annually, except a cost of electricity is projected to rise by 7.61% annually, according to a compound annual growth rate (“CAGR”) of a actual cost of electricity between fiscal year ended 2007 and 2012.

Cost of goods sold to BIE - The COGS includes a fixed cost and variable cost. - For fiscal year ended 2012, the fixed cost is projected by annualizing an actual

fixed cost for the past 9 months. For fiscal year ended 2013 to 2039, the fixed cost is expected to increase by an inflation rate of 3.00% annually.



an inflation rate of 3.00% annually, except a cost of electricity is projected to rise by 6.08% annually, according to the CAGR of a cost of electricity between fiscal year ended 2007 and 2012.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2034E 2035-2039E COGS (THB in millions) 329.6 409.0 427.4 398.9 522.9 567.9 633.8 703.5 768.8-2,172.9 129.8-150.6



PTW

- The COGS includes a fixed cost and variable cost. - For fiscal year ended 2012, the fixed cost is projected by annualizing an actual

fixed cost for the past 9 months. - For fiscal year ended 2013 to 2023, the fixed cost is expected to increase by an

inflation rate of 3.00% annually, except an employee expense is projected to rise by 5.00% annually.



an inflation rate of 3.00% annually, except a cost of electricity is projected to rise by 7.76% annually, according to the CAGR of a cost of electricity between fiscal year ended 2007 and 2012.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2022E 2023E COGS (THB in millions) 239.5 235.7 250.8 223.0 297.4 324.8 349.8 372.3 397.3-581.2 487.7

(E) Assumptions on Selling, General and Administrative Expense (Excluding Depreciation)

TTW - For fiscal year ended 2012, a selling, general and administrative expense

(“SG&A”) is projected by annualizing an actual SG&A for the past 9 months. - For fiscal year ended 2013 to 2034, the SG&A is expected to increase by an

inflation rate of 3.00% annually, except an employee and director expense is projected to rise by 5.00% annually, according to a growth rate of an employee and director expense in the notes to the consolidated financial statements of TTW as of fiscal year ended 2010 and 2011.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2034E 2035-2039E SG&A (THB in millions) 136.0 122.2 149.2 135.7 180.9 187.5 194.3 201.5 208.9-398.2 4.7-7.6

PTW

- For fiscal year ended 2012, the SG&A is projected by annualizing an actual SG&A for the past 9 months.

- For fiscal year ended 2013 to 2023, the SG&A is expected to increase by an inflation rate of 3.00% annually, except an employee and director expense is projected to rise by 5.00% annually, according to a growth rate of an employee and director expense in the notes to the consolidated financial statements of TTW as of fiscal year ended 2010 and 2011.

2009A 2010A 2011A 9M2012A 2012E 2013E 2014E 2015E 2016-2022E 2023E SG&A (THB in millions) 41.9 31.2 32.2 28.9 38.5 39.8 41.1 42.5 43.9-53.9 53.6



(F) Assumptions on Depreciation TTW

Property, plant and equipment

The IFA assumes that depreciation of the TTW’s assets used for production of treated water is calculated using the units-of-production method. The depreciation for the period is equal to net assets for production of treated water at the beginning of period multiply by percentage of treated water produced in the period, where the percentage of treated water produced in the period is equal to current period’s actual production of treated water divided by actual production of treated water for the period plus projected total of treated water over the remaining term of the water purchase agreement.

For building and equipment, the IFA assumes that the depreciation is projected by annualizing an actual depreciation for the past 9 months, which is equal to THB 18.2 million per year.

Additional assets after the 3th quarter of the year 2012

For building and equipment, with reference to the interview of management of TTW, the IFA assumes that an expected depreciation is added by THB 12 million in 2018, 2023, 2028 and 2033, and THB 3 million in 2019, 2024, 2029 and 2034.

PTW

Property, plant and equipment

The IFA assumes that depreciation of the TTW’s assets used for production of treated water is calculated using the units-of-production method. The depreciation for the period is equal to net assets for production of treated water at the beginning of period multiply by percentage of treated water produced in the period, where the percentage of treated water produced in the period is equal to current period’s actual production of treated water divided by actual production of treated water for the period plus projected total of treated water over the remaining term of the sale and purchase of tap water contract.

For building and equipment, the IFA assumes that the depreciation is projected by annualizing an actual depreciation for the past 9 months, which is equal to THB 1.2 million per year.

Additional assets after the 3th quarter of the year 2012

For building and equipment, with reference to the interview of management of TTW, the IFA assumes that an expected depreciation is added by THB 0.9 million in 2016, 2017, 2018, 2019 and 2020. (G) Assumptions on Amortization

TTW The IFA assumes that the amortization of assets for production of treated water is calculated using

the units-of-production method. The amortization for the period is equal to net assets for production of treated water that must be transferred at end of concession as at the beginning of period multiply by



percentage of treated water produced in the period, where the percentage of treated water produced in the period is equal to current period’s actual production of treated water divided by an actual production of treated water for the period plus projected total production of treated water over the remaining term of concession for production and sale of treated water.

An amortization of investments in PTW that is generally calculated by reference to their costs on the straight-line basis within the tap water purchase contract is approximately THB 200 million per year.

An amortization of investments in TWO that is generally calculated by reference to their costs on the straight-line basis within the sale and purchase of tap water contract is approximately THB 21.5 million per year.

PTW An amortization of investments in TWO that is generally calculated by reference to their costs on the

straight-line basis within the sale and purchase of tap water contract is approximately THB 14.5 million per year. (H) Assumptions on Loans and Interest Expenses

TTW

According to existing loan agreements between TTW and financial institutions, long-term loans can be summarized as follows.

Loan 1 A total amount of THB 1,500 million on August 5, 2009 and bear interest per monthly, quarterly installments as from March 2010 to June 2019.

Loan 2 A total amount of THB 1,800 million on October 20, 2009 and bear interest per monthly, quarterly installments as from December 2009 to September 2019.


Loan 4 A total amount of THB 2,760 million on May 8, 2012 and bear interest per semi-annually, installments in full within May 9, 2020.

Repayment schedule can be summarized as follows.

Repayment Period (Quarterly) Loan 1 (THB in millions)

Loan 2 (THB in millions)


Q4-2012 27.50 45.00 45.00 Q1-2013 to Q4-2013 130.00 180.00 180.00 Q1-2014 to Q4-2014 150.00 180.00 180.00 Q1-2015 to Q4-2015 170.00 180.00 180.00 Q1-2016 to Q4-2016 190.00 180.00 180.00 Q1-2017 to Q4-2017 210.00 180.00 180.00 Q1-2018 to Q4-2018 250.00 180.00 180.00 Q1-2019 to Q3-2019 140.001 135.00 135.00

Total Amount 1,267.50 1,260.00 1,260.00 Remark: 1 Installments will completed in Q2-2019



The IFA refers to TTW’s existing loan agreements with its lenders and expects a minimum loan rate (“MLR”) and fixed deposit rate (“FDR”) obtained from the Bank of Thailand as of November 22, 2012.

Loans MLR - Stipulated Rates in Agreements Expected MLR & FDR

(% per Year)

Loan 1 Yr. 1 to Yr. 3 at MLR – 2.25% Yr. 4 to Yr. 6 at MLR – 2.125%

Yr. 7 onwards at MLR – 2.00%

MLR = 7.00%

Loan 2 Yr. 1 to Yr. 2 at MLR - 2.50%


MLR = 7.00%

Loan 3 Yr. 1 to Yr. 3 at MLR – 2.25%


MLR = 7.00%

Loan 41 Avg. FDR of 4 Banks2 + 1.80% Avg. FDR of 4 Banks = 2.4125%3 หมายเหตุ : 1 TTW plans to refinance the loan 4 with installments of 10 years at an estimated interest rate of 4.5, with reference to

interviews of management of TTW. 2 Semiannual-fixed deposit rate: Bangkok bank, Krungthai bank, Siam commercial bank and Kasikorn bank. 3 As of May 4, 2012

TTW does not plan to refinance loan 1, 2 and 3. In addition, the forecast of the interest rate is still difficult as it is affected from both domestic and global factors, and also has a significant effect on the financial projection and share valuation, respectively.

PTW

According to existing loan agreements between PTW and TTW, long-term loans can be summarized as follows.



Repayment schedule can be summarized as follows.

Repayment Period (Quarterly) Loan 1 (THB in millions)


Q4-2012 45.00 32.50 Q1-2013 to Q4-2013 180.00 130.00 Q1-2014 to Q4-2014 180.00 130.00 Q1-2015 to Q4-2015 180.00 130.00 Q1-2016 to Q4-2016 180.00 130.00 Q1-2017 to Q4-2017 180.00 130.00 Q1-2018 to Q4-2018 180.00 130.00 Q1-2019 to Q3-2019 135.00 97.50

Total Amount 1,260.00 910.00



The IFA refers to the existing loan agreements between TTW and PTW and expects a minimum loan rate (“MLR”) obtained from the Bank of Thailand as of November 22, 2012.

Loans MLR - Stipulated Rates in Agreements Expected MLR & FDR

(% per Year)

Loan 1 Yr. 1 to Yr. 3 at MLR – 2.125% Yr. 4 onwards at MLR – 1.875%

MLR = 7.00

Loan 2 Yr. 1 to Yr. 2 at MLR – 2.375% Yr. 3 onwards at MLR – 2.000%

MLR = 7.00

TTW does not plan to refinance loan 1 and 2. In addition, the forecast of the interest rate is still difficult as it is affected from both domestic and global factors, and also has a significant effect on the financial projection and share valuation, respectively. (I) Assumptions on Debentures and Interest Expenses

TTW

Details of the debentures are as follows.

No. 1/2009 series #2 A total amount of THB 1,700 million. The debentures mature on February 26, 2014 and bear interest at a fixed rate of 4.75% per annum.




TTW plans to roll over the debentures No. 1/2009 series#2 and series#3 with a projected bear interest at a fixed rate of 5.25% per annum. In addition, the forecast of the interest rate is still difficult as it is affected from both domestic and global factors, and also has a significant effect on the financial projection and share valuation, respectively.

PTW

No debenture

(J) Assumptions on Corporate Income Tax

Regarding to the reduction and exemption of taxable Act, No. 530/ 2011, the corporate income tax can be summarized as follows.



TTW and PTW

Period Corporate Income Tax (%)

Yr. 2012 23.00

Yr. 2013 to 2014 20.00

Yr. 2015 onwards 30.00

According to the certificate no. 1451(2)/2008 dated April 28, 2008, PTW was promoted by the Thailand’s Board of Investment in the production of tap water. It gained an exemption of income taxes on earnings before tax generated from promoted business not exceeding 100% of total investment excluding lands and working capitals for 8 years from the date when PTW starts to generate revenues. According to interview with the management of TTW and other related information, approximately 25% of the revenues and expenses of PTW will be exempt from the corporate income tax.

(K) Assumptions on Capital Expenditure (“CAPEX”)

TTW

With reference to management interviews of TTW, TTW does not plan to invest in its assets used to produce tap water. However, it plans to invest in buildings and equipment at the cost of THB 15 million per annum in 2017, 2022, 2027 and 2032.

PTW With reference to management interviews of TTW, PTW does not plan to invest in its assets used to

produce tap water. In contrast, it plans to invest in buildings and equipment at the cost of THB 4.7 million in 2016. (L) Assumptions on Working Capital

A working capital policy is obtained from management interviews of TTW as follows.

Collection Period

(Days)

Payment Period

(Days)

Inventory Turnover

(Days)

TTW 30 30 13

PTW 40 45 12

(M) Assumptions on Terminal Value

TTW

According to the concession structure as the BOO contract, the IFA assumes that a terminal value in the end of the financial projection period is equal to the book value of equity excluding cash and cash equivalents, investment in subsidiaries (PTW and TWO) and associates (CKP) and rights to operate and distribute tap water and treat waste water in Bangpa-In Industrial Estate.



PTW

According to the concession structure as the BOOT contract, the IFA assumes that a terminal value in the end of the financial projection period is equal to the book value of equity excluding cash and cash equivalents and all the assets of the PTW project that must be transferred to PWA at the end of the concession period. (N) Assumptions on Discount Rate

The equity value of TTW (excluding TWO PTW and CKP) and the equity value of PTW (excluding TWO) are conducted by using the DCF approach. In this case, the DCF approach is an estimation of a net present value of free cash flows to shareholder’s equity (Free Cash Flow to Equity (“FCFE”) that can be generated in the future. The Cost of Equity (Ke) is derived from the application of the Capital Asset Pricing Model (“CAPM”), where Ke = Rf + Beta * (Rm – Rf).

TTW PTW Ke (%) 6.55 – 9.68* 6.89 – 10.15*

Remark: * Reflect a capital structure throughout the financial projection period

where, Rf = Risk free rate of 3.52%, 10-year government bond yield retrieved from

Thai BMA as of December 7, 2012.

Beta = Leveraged Beta prepared by Unleveraged Bata adjusting with the ratio of debt to equity and corporate tax rate of TTW and PTW. The Leveraged Beta is 0.42 retrieved from weekly information for the past 2 years from December 10, 2010 to December 7, 2012.

TTW PTW Beta 0.20 – 0.40* 0.22 – 0.43*

Remark: * Reflect a capital structure throughout the financial projection period

Unleveraged Beta (ßu) = Leveraged Beta (ßl) / ((1 + (1-T)) * D/E)

Effective Tax Rate D/E ratio Leveraged Beta Unleveraged Beta TTW 17.86 1.41 0.42 0.20 PTW 23.00 1.22 0.42 0.22

Rm = Market return of 19.04%, retrieved from weekly information for the past 10 years from Bloomberg, which is based on the forecasts of industry growth, profitability, dividend payment, changes in stock price index and the current SET index.

Summary of DCF-based equity value (base case)

Based on the valuation using the FCFE, the equity value of TTW is THB 19,678.54 million, The equity value of PTW is THB 7,301.86 million and the equity value of PTW held by TTW is THB 7,155.83 million.



Projected Free Cash Flow to Equity (FCFE) of TTW from Q4-2012 to 2039 (Unit: THB million)

Q4-2012E 2013E 2014E 2015E 2016E 2017-2039E Earnings Before, Interest, Taxes, Depreciation and Amortization (EBITDA)

748.43 2,850.55 2,989.59 3,108.37 3,211.98 67,288.87

(-) Corporate Income Taxes 113.08 365.55 392.18 625.45 660.52 16,693.92

+/(-) Net Working Capital (73.73) 79.88 (1.13) 101.68 3.57 (38.82) +/(-) CAPEX - - - - - 60.00 (-) Loan repayment and Interest Expense

(266.00) (1,117.63) (1,121.53) (1,115.95) (1,108.47) (14,955.93)

Free Cash Flow to Equity (FCFE) 295.61 1,447.25 1,474.76 1,468.66 1,446.55 35,540.20 + Terminal Value 3,354.40 Present Value of FCFE 17,820.80

+ Beginning Cash 1,857.74 Equity Value of TTW (100.00%) as of

September 30, 2012 19,678.54

Projected Free Cash Flow to Equity (FCFE) of PTW from Q4-2012 to 2023

(Unit: THB million) Q4-2012E 2013E 2014E 2015E 2016E 2017-2023E Earnings Before, Interest, Taxes, Depreciation and Amortization (EBITDA)

317.47 1,662.72 1,386.46 1,415.98 1,449.59 10,564.66

(-) Corporate Income Taxes 39.30 194.39 154.79 242.63 253.36 2,510.59 +/(-) Net Working Capital 33.05 (44.69) 28.90 (4.35) (4.92) 16.22 +/(-) CAPEX - - - - 4.70 - (-) Loan repayment and Interest Expense

(104.54) (408.34) (392.60) (376.87) (361.14) (603.47)

Free Cash Flow to Equity (FCFE) 206.66 1,015.30 867.97 792.13 825.47 7,466.83 + Terminal Value 171.02 Present Value of FCFE 7,021.84

+ Beginning Cash 280.02 Equity Value of PTW (100.00%) as of

September 30, 2012 7,301.86

Equity Value of PTW held by TTW (98.00%) as of September 30, 2012

7,155.83



5.5.2 Key Assumptions for the Financial Projection of NN2

The IFA prepares the financial projections of NN2 based on the financial projection of NN2 that was conducted to give IFA’s opinions to TTW’s shareholder on the purchase of newly issued shares of CKP on November 18, 2011, the latest audited financial statements of NN2 as of September 30, 2012 and management interviews of SEAN, the Company and relevant parties. In addition, the IFA assumes that NN2 operates on a going concern basis starting from an Initial Operating Date (“IOD”) on October 1, 2012 to a Commercial Operating Date (“COD”) on March 26, 2012, to the end of 25-year concession period.

The IFA assumes that NN2 pursues its business on a going concern basis. Should there be any change in economic conditions and external factors that may adversely affect the business operation of those companies and the assumptions stated herein this valuation exercise, the equity value of NN2 may differ accordingly. Moreover, the equity value of NN2 may not be references for purposes other than for consideration of the appropriateness of the Transaction’s Price.

(A) Assumptions on Production Capacity

The installed capacity of NN2’s power plant is 615 MW. Whilst, the electricity to be produced and sold to EGAT is totaling 2,310 GWh per annum according to the Power Purchase Agreement (“PPA”), as detailed below:

– Primary Energy Production (PE), a total of 2,218 GWh per annum obtained from the electricity generated during Monday to Saturday 6:00 – 22:00 hr. (or 16 hours/day for 6 days/week).

– Secondary Energy Production (SE), a total of 92 GWh per annum obtained from the electricity generated during the rainy season (August to October) from Monday to Friday 24:00 – 6.00 hr and 22:00 – 24:00 hr, and 24 hours in Sunday.

Remarks: Refer to “Information Memorandum for Prospective Lenders”, the design of NN2 dam already considers the statistics of the past 54-year rainfall amount which is considered as adequate for the annual electricity generation according to the PPA

(B) Assumptions on Selling Price of Electricity

Below summarizes the selling price of electricity to EGAT according to the PPA.

Period Selling Price – PE Selling Price – SE (US Cents per KWh) Plus (THB per KWh) (THB per KWh)

IOD period* (up to the COD**) 2.475 0.963 1.253

Year 1-6 (after COD) 2.475 0.965 1.255

Year 7 onwards (after COD) 2.668 1.041 1.353

Remark: * Initial Operating Date (IOD), starting from March 26, 2011 ** Commercial Operating Date (COD), expected to start from March 26, 2013



(C) Assumptions on Excess Energy Production (EE)

Based on the interview with NN2’s management, there had been the electricity sales from EE totaling 101 GWh during September 2012 due to the higher rainfall amount than expected during such period. However, the IFA assumes no additional excess energy production for the remaining financial projection period due to the uncertainty and unreliability to appropriately estimate such revenues.

Remark: Excess Energy Production will occur when the water level in the dam is higher than 374.5 m ASL. The selling price of EE to EGAT is THB 1.060 per KWh (during IOD period), THB 1.062 per KWh (during year 1-6 after COD), and THB 1.145 per KWh (during year 7-25 after COD)

(D) Assumptions on Operating and Maintenance Expense

Refer to the relevant contracts/agreements, key operating expenses can be summarized below.

Type of Expenses Key Assumptions

O&M - Power House & Dam THB 9.58 million per month, with 3% growth per annum (as determined in the contract), effective from November 2011 to the end of PPA period

O&M - Transmission Systems USD 48,642 per month, with 1% growth per annum (as determined in the contract), effective from June 2010 to the end of PPA period

Turnkey Contractor for Implementation of EMP & RAP As determined in the contract, totaling THB 417.79 million for the whole period of business operation, from 2011 to 2037

Consulting Services for Supervision of EMP & RAP As determined in the contract, totaling THB 45.00 million from 2010 to 2020

Major Maintenance Agreement THB 5.00 million per month, with 3% growth per annum (as determined in the contract), effective from 2012 to 2018

Major Maintenance (Nabong Station) THB 0.17 million per month, with 3% growth per annum (as determined in the contract), effective from August 2012 to December 2016

In addition, there are additional expenses for maintenance and spare parts as estimated by NN2 as

follows.


Annual Maintenance and Spare Parts - 0.15% of EPC Contract Value per annum (for Year 1-10 starting from IOD)

- 0.20% of EPC Contract Value per annum (after Year 10)



(E) Assumptions on Selling, General and Administrative Expense (SG&A Expense)

Key SG&A expenses are referred to the management of NN2 as summarized below.


Operating & Administrative An annual expense of THB 75.00 million, with 3% growth per annum pursuant to the inflation rate

Management Service An annual expense of THB 19.00 million, with 3% growth per annum pursuant to the inflation rate

Environmental Improvement An annual expense of THB 20.00 million, from October 2012 to September 2017

Other SG&A Expenses An annual expense of THB 5.00 million, with 3% growth per annum pursuant to the inflation rate

(F) Assumptions on Insurance Expense

An annual insurance expense of THB 65.24 million is assumed based on NN2’s latest insurance policies engaged for “Property Damage, Machinery Breakdown & Business Interruption Insurance Policy” and “Combined General and Products Liability”, for the whole projection period with the objective of conservative basis. (G) Assumptions on Benefits to the Government of Lao PDR According to the Concession (Royalty

Fee)

The royalty fee is referred to the side agreement to the NN2 concession agreement dated March 21, 2006 as follows.

Period Percentage of Electricity Sales

For IOD period* and the next 8 years after COD** (IOD & Year 1-8 after COD) 3.40

For the next 6 years (Year 9-14 after COD) 3.50

For the next 2 years (Year 15-16 after COD) 7.50

Afterwards (Year 17 onwards) 13.50

Remark: * Initial Operating Date (IOD), starting from March 26, 2011 ** Commercial Operating Date (COD), expected to start from March 26, 2013



(H) Assumptions on Loan & Interest Expense

According to the existing loan agreements, the loan repayment can be summarized as follows.

Repayment Period (Semi-annually) Percentage to Principal

Period 1-2 (1Q2012, 3Q2012) 2.00%

Period 3-4 (1Q2013, 3Q2013) 2.50%

Period 5-6 (1Q2014, 3Q2014) 3.25%

Period 7-10 (1Q2015- 3Q2016) 3.50%

Period 11-12 (1Q2017, 3Q2017) 4.25%

Period 13-14 (1Q2018, 3Q2018) 4.75%

Period 15-16 (1Q2019, 3Q2019) 5.00%

Period 17-18 (1Q2020, 3Q2020) 6.25%

Period 19-20 (1Q2021, 3Q2021) 7.00%

Period 21-22 (1Q2022, 3Q2022) 8.00%

Total 100.00%

The interest expenses refer to the actual interest rate defined in NN2’s existing loan agreement. The

average interest rates of 3 lenders obtained from the Bank of Thailand as of November 5, 2012 as follows.

Borrowing Types Interest Rate

(Pre-IOD) Interest Rate (Post-IOD)

Implied Interest Rate (% p.a.)

Long-term loan of THB 15,003 million MLR+1.00% MLR+0.50% MLR = 7.25 Long-term loan of USD 180 million LIBOR+3.00% LIBOR+2.00% LIBOR = 0.39*

Remark: * 3-month LIBOR (I) Assumptions on Corporate Income Tax

The corporate income tax rates refer to the side agreement to the NN2 concession agreement dated March 21, 2006 can be summarized below.

Period Tax Rate (%) Year 1-5 after IOD* 0.00 For the next 5 years (Year 6-10) 3.00 For the next 5 years (Year 11-15) 4.00 For the next 4 years (Year 16-19) 5.00 For the next 7 years (Year 20-26) 10.00 Afterwards (Year 27 onwards) 14.00

Remark: * Initial Operating Date (IOD), starting from March 26, 2011



(J) Assumptions on Capital Expenditure (CAPEX)

The SEAN’s management estimates the capital expenditure budget in addition to those stated in Operation & Maintenance (O&M) contracts, for the whole projection period as follows.

(Unit: THB million) 2020 2031 2038 Total CAPEX (THB million) 269.00 361.00 222.00 – The 1st Major Overhaul 269.00 - -

– The 2nd Major Overhaul - 361.00 -

– The 3rd Major Overhaul - - 222.00 Remark: The above CAPEX is treated as fixed assets which will be depreciated on unit of electricity generated over the

remaining project period. (K) Assumptions on Working Capital

The working capital policy is obtained from the management interviews of NN2 and can be summarized as follows.

– Collection period (Q4-2012 to 2038) 30 days – Payment period (Q4-2012) 28 days – Payment period (2013 to 2038) 15 days Remark: The assumption on the payment period (Q4-2012) is 28 days differs from the assumption on the

payment period (2013-2038), which is 15 days. Since the payment period in Q4-2012 is projected by annualizing an actual collection for the past 9 months. However, the management of NN2 believes that the payment period will be close to 15 days.

(L) Assumptions on Terminal Value

According to the concession structure as the BOOT contract, all assets of NN2 project must be transferred to the Government of Lao PDR at the end of the concession period. The IFA assumes that a terminal value in the end of the financial projection period is equal to the book value of equity excluding cash and cash equivalents. (M) Assumptions on Foreign Exchange Rate

A foreign exchange rate is assumed at THB 31.44 per USD for the whole financial projection period. The implied exchange rate refers to the past average exchange rate from January 2009 to September 2012 fluctuating between THB 30 to 35 per USD, which is believed to reflect the current economic and financial conditions. Nonetheless, the forecast of exchange rate is still difficult as it is affected from both domestic and global factors, and also has a significant impact on the IFA’s financial projection and share valuation, respectively.



(N) Assumptions on Discount Rate

The cost of equity (Ke) is derived from the application of the Capital Asset Pricing Model (CAPM) as follows.

Ke = Rf + Beta * ( Rm – Rf ) = 5.86% - 10.46% which reflects the changes in a capital structure during

the financial projection period

where, Rf = Risk free rate of 3.52%, 10-year government bond yield retrieved from

Thai BMA as of December 7, 2012.

Beta = Leveraged beta ranging from 0.15 - 0.45 to reflect the changing capital structure over the financial projection. The implied beta is calculated from re-leveraging the average of unleveraged betas of the comparable companies (EGCO, RATCH), which have closest business to NN2 from their investment in hydroelectric power plant, by the NN2’s capital structure and corporate income tax rate. Betas of the comparable companies are obtained from Bloomberg, calculating the beta for the past 2 years from December 10, 2010 to December 7, 2012

Unleveraged Beta (ßu) = Leveraged Beta (ßl) / ((1+(1-T)) * D/E) Comparables Effective Tax Rate D/E Ratio Leveraged Beta Unleveraged Beta

EGCO 4.16 0.54* 0.17 0.11 RATCH 29.36 0.65* 0.27 0.19

Remarks: * Debt-to-Equity (D/E) ratio is calculated from dividing the interest-bearing debts by the shareholders’ equity as presented in the audit reviewed financial statements for the 3nd quarter of 2012.

Rm = Market return of 19.04%, retrieved from weekly information for the past

10 years from Bloomberg, which is based on the forecasts of industry growth, profitability, dividend payment, changes in stock price index and the current SET index.

Summary of DCF-based equity value (base case)

Based on the valuation using the FCFE, the equity value of NN2 is THB 22,671.10 million. The equity value of NN2 held by TTW is THB 2,856.56 million.



Projected Free Cash Flow to Equity (FCFE) of NN2 from Q4-2012 to 2023 (Unit: THB million)

Q4-2012E 2013E 2014E 2015E 2016E 2017-2038E Revenues from Electricity Sales 1,009.43 4,008.28 4,009.42 4,009.42 4,384.62 94,789.75 Earnings Before, Interest, Taxes, Depreciation and Amortization (EBITDA)

806.78 3,364.76 3,404.69 3,404.98 3,764.24 76,620.58

(-) Corporate Income Taxes - - - - (34.64) (3,262.73) +/(-) Net Working Capital 558.42 (30.19) (1.08) (0.18) - 360.91 (-) Investment Cost - - - - - (852.13) (-) Interest Expense (302.77) (1,155.91) (1,071.07) (959.15) (838.00) (1,988.81) (-) Principle Repayment (456.90) (1551.29) (1,692.80) (1,861.41) (1,983.98) (12,523.17) + Terminal Value - - - - - 336.81 Free Cash Flow to Equity (FCFE) 605.54 627.37 639.75 584.23 907.62 58,691.43 Present Value of FCFE 22,316.17 + Beginning Cash 354.93 Equity Value of NN2 (100.00%) as of September 30, 2012

22,671.10

Equity Value of NN2 held by TTW (12.60%) as of September 30, 2012

2,856.56

Additional Information for Consideration

For the consideration of the Transaction’s Price, the IFA does not take the hydropower plant of Nam Bak 1-2 projects into the financial projection. Due to management interviews of SEAN, the hydropower plant of Nam Bak 1-2 are still in the process of memorandum of understanding (“MOU”) with Lao PDR. The IFA considers that both projects have uncertain information of refinancing terms and conditions. In addition, the IFA was informed that NN2 plans to refinance its existing loans after COD, which is expected in March 2013. As NN2 currently has no construction and commencement risks from the current project, the terms and conditions of refinancing loan is expected to be in favor to NN2, expectedly resulting in higher investment returns and share value accordingly. Nevertheless, the financial projection is prepared based on the conservative basis; thus, the uncertain information of refinancing terms and conditions has not been factored into the financial projection.

Apart from the prospected refinancing, the higher revenues and investment return from excess electricity sales, which may arise if the water level in the dam exceeds the forecast, is also not taken into the financial projection due to its uncertainty. Please be noted that the IFA was informed that there had been the electricity sales more than expected during September 2012 due to the higher rainfall amount than expected during such period.

Based on the valuation using the FCFE approach in the form of Sum of the Parts basis, the equity value of TTW is THB 19,678.54 million, the equity value of PTW held by TTW is THB 7,155.83 million and the equity value of NN2 held by TTW is THB 2,856.56 million.



5.5.3 Summary of the Equity Values of TTW, PTW, and NN2 held by TTW based on Discounted Cash Flow Approach, Sum of the Parts basis

(Unit: THB million)

Valuations by Using DCF Approach

Equity Value

(THB in millions)

% Held by TTW

Equity Value held by TTW

(THB in millions)

Weight (%)

1. TTW 19,678.54 - 19,678.54 66.18 2. PTW 7,301.86 98.00 7,155.83 24.06 3. NN2 22,671.10 30.00 x 56.16 x 75.00 = 12.64 2,864.72 9.63

Valuations by Using Adjusted Book Value

Equity Value

(THB in millions)

% Held by TTW


(THB in millions)

Weight (%)

4. TWO 109.23

68.50 + (98.00 x 31.50) = 99.37

108.54 0.37

5. CKP -846.03 30 -253.81 -0.85 6. SEAN -10.10 30 x 56.16 = 16.85 -1.70 -0.01

Valuations by Using Market Value

Equity Value

(THB in millions)

% Held by TTW


(THB in millions)

Weight (%)

7. BKC 527.06 30 x 100 = 30 158.12 0.53 8. NRS 85.39* 30 25.62 0.09

Remark: * Equity value of THB 85.39 million traded 664,500 shares, representing 30.00% of the paid-up capital.

Equity value of TTW, Sum of the Parts Numbers of Shares of TTW Equity Value of TTW (THB per share)

1+2+3+4+5+6+7+8 3,990,000,000 shares

THB 29,735.85 million THB 7.45 per share

Calculation of equity value of TTW is summarized as follows. Equity Value of TTW = [(Equity Value of TTW using DCF) + (68.50% of Equity Value of TWO using ABV) + (98.00% of Equity Value of PTW using DCF) + (30.00% of Equity Value of CKP using ABV) + (98.00% of 31.50% of Equity Value of TWO using ABV) + (30.00% of 56.16% of Equity Value of SEAN using ABV) + (30.00% of 56.16% of 75.00% of Equity Value of NN2 using DCF) + (30.00% of 100.00% of BKC using MP) + (30.00% of NRS using MP)]/ Paid up Shares of TTW



5.5.4 Sensitivity Analysis

For the consideration of the appropriateness of the Transaction’s Price, the IFA also performs the sensitivity analysis using key factors that significantly affect the equity values of TTW PTW and NN2.

For tap water business, the cost of electricity is a key factor affecting projected cash flows of TTW and PTW. The IFA increases and decreases the cost of electricity by 1.00% throughout the financial projection period. The result shows that the equity values of TTW are range between THB 19,066.96 to 20,216.03 million, the base case of THB 19,678.54 million. The equity values of PTW are range between THB 7,215.22 to 7,383.55 million, the base case of THB 7,301.86 million. The summary of the sensitivity analysis is shown as follows.

Worst Case Base Case Best Case TTW PTW BIE* TTW PTW BIE* TTW PTW BIE*

Cost of Electricity (%)

8.61 8.76 7.08 7.61 7.76 6.08 6.61 6.76 5.08

Equity Value of TTW (THB in millions)

19,066.96 19,678.54 20,216.03

Equity Value of PTW (THB in millions)

7,215.22 7,301.86 7,383.55

Remark: *Right to operate and distribute tap water and treat waste water in Bangpa-In Industrial Estate

The foreign exchange rate is considered as a key factor affecting the equity value of NN2. The IFA performs the sensitivity analysis. The result shows that the equity values of NN2 are range between THB 22,090.19 million - THB 23,317.23 million, while the equity value of NN2 obtained from the base case is THB 22,671.10 million. The sensitivity analysis is carried out on the foreign exchange rate as presented below.

Foreign Exchange Rate (THB/USD)

Equity Value of NN2 (THB in millions)

31.00 22,090.19 31.50 22,398.02 31.94 22,671.10 32.50 23,011.88 33.00 23,317.23



Summary of Equity Value of TTW using Discounted Cash Flow Approach (DCF), Sum of the Parts and Sensitivity Analysis of TTW PTW and NN2

Equity Values Held by TTW (THB in millions) Worst Case Base Case Best Case

TTW 19,066.96 19,678.54 20,216.03 PTW 7,070.92 7,155.83 7,235.88 NN2 2,791.32 2,864.72 2,946.37 TWO 108.54 CKP -253.81 SEAN -1.70 BKC 158.12 NRS 25.62

Equity Value of TTW (Sum of the Parts) (THB in millions)

28,965.96 29,735.85 30,435.04

Numbers of Shares of TTW (Shares in millions)

3,990.00

Equity Value of TTW (THB per Share)

7.26 7.45 7.63

In sum, the IFA uses the values obtained from the valuation of TTW by using the DCF approach for

consideration of appropriateness of the Transaction’s Price. The cash inflows and cash outflows of TTW, PTW and NN2 can be precisely projected among contracts including purchasing agreements, operation and maintenance agreements, concessions, and loan agreements. Therefore, the fair value of TTW is THB 7.45 per share. Transaction’s Price of THB 7.55 per share is higher than the fair value of THB 7.45 per share by THB 0.10, or 1.34% higher. In addition, the equity values of TTW are range between THB 7.26 to 7.63 per share. The Transaction’s Price of THB 7.55 per share is higher than the equity value of THB 7.26 per share by THB 0.29, or 3.99% higher, and lower than the equity value of THB 7.63 per share by THB 0.08, or 1.05% lower.

After the period of the reduction and exemption of taxable Act , the IFA assumes that the corporate income tax will be adjusted to 30% onwards . However, the IFA also provides the financial projection based on an assumption that the corporate income tax is 20% onwards. The result shows that the equity values of TTW are THB 21,759.35 million; base case, THB 21,069.66 million; worst case, and THB 22,365.47 million; best case. The equity values of PTW are THB 7,874.98 million; base case, THB 7,776.34 million; worst case, and THB 7,967.88 million; best case. The equity value of TTW is THB 8.11 per share; base case, THB 7.92 per share; worst case, and THB 8.29 per share; best case.



5.6 Summary of the TTW’s Share Valuation as Determined by the IFA using Each Approach

(Unit: THB per Share) Valuation Approaches Share Value per

Share as Determined by the

IFA

Transaction’s Price

The Estimated Value is Higher

(Lower) than the Transaction

Price by

Reasonableness of the

Approaches

1. Book Value Approach 2.54 7.55 197.24 X

2. Adjusted Book Value Approach 2.62 7.55 188.17 X

3. Market Value Approach 7.33 – 8.64 7.55 3.00 – (12.62) √ 4. Market Comparable Approach

P/BV Approach P/E Approach EV/EBITDA Approach

5.34 – 7.62 8.12 – 10.09 8.89 – 13.84

7.55

41.39 – (0.92) (7.02) – (25.17) (15.07) – (45.45)

X X X

5. DCF Approach (Base Case)

7.26 -7.63 7.45

7.55 7.55

3.99 – (1.05) 1.34

√

5.7 Reasonableness of the Transaction’s Price

For consideration of the reasonableness of the Transaction’s Price of THB 7.55 per share, the IFA uses 2 approaches including the DCF and the volume weighted average market price. The DCF approach is derived from the DCF-based share value of each business unit (Sum of the Parts). The volume weighted average market price approach is conducted by the weighted averages of the close prices for the past 6 months to reflect TTW’s current fundamentals.

The IFA gives an opinion that the fair value of TTW based on the DCF approach is THB 7.45 per share and the fair values of TTW based on the volume weighted average market price are range between THB 7.33 to 8.64 per share. Therefore, the Transaction’s Price of 7.55 per share is reasonable. It is higher than the fair value of THB 7.45 per share by THB 0.10, or 1.34% higher. In addition, the Transaction’s Price of THB 7.55 per share is higher than the fair value of THB 7.33 per share by THB 0.22, or 3.00% higher, and lower than the fair value of THB 8.64 per share by THB 1.09, or 12.62% lower.

The IFA performs the sensitivity analysis using key factors that significantly affect the equity values of TTW PTW and NN2. The result shows that the equity values of TTW are range between THB 7.26 to 7.63 per share; therefore, the Transaction’s Price of THB 7.55 per share is in the range based on the sensitivity analysis.

The IFA preferably uses the values obtained from the DCF approach for consideration of appropriateness of the Transaction’s Price; since, cash inflows and cash outflows of TTW and its subsidiaries and associated companies can be precisely projected among contracts including purchasing agreements, operation and maintenance agreements, concessions and loan agreements. As a result, the equity values of TTW using the DCF approach are range between THB 7.26 to 7.63 per share. The



Transaction’s Price of THB 7.55 per share is higher than the equity value of THB 7.26 per share by THB 0.29, or 3.99% higher, and lower than the equity value of THB 7.63 per share by THB 0.08, or 1.05% lower.

However, the Transaction’s Price of THB 7.55 per share is lower than the volume weighted average market price of THB 8.64 per share by THB 1.09, or 12.62% lower. The disposition of shares in TTW may lower profits compared with sales of the shares through the SET. The IFA considers average daily trading volumes of TTW, traded on the SET over the past one year until December 19, 2012, is 3,978,411.61 shares. The disposition of 438,900,000 shares in TTW may take long time, approximately 110 days. As a result, the sales of the shares through the SET may potentially be affected by the degree of uncertainty in terms of future share prices and trading volumes 5.8 Reasonableness of the Transaction’s Conditions

The IFA give an opinion on the reasonableness of the Transaction’s Conditions based on interviews with the Company’s management. The Contractual Parties concluded their negotiation that the Buyer shall make payment by cashier's cheque via banking system on the Transaction date in the amount of THB 2,200,000,000 or 66.39% of the total amount. It shall make the remaining payment of THB 1,113,695,000 or 33.61% of the total amount by April 2015, the Buyer shall make installments of 1) THB 200,000,000 by April 2013, 2) THB 200,000,000 by October 2013, 3) THB 200,000,000 by April 2014, 4) THB 200,000,000 by October 2014, and 5) the remaining installment by April 2015. The installments are purposed to facilitate the disposition of shares in full amount at once. The result benefits the Company to realize a profit on sale of investment in TTW shares for the period in Statements of Profit and Loss after proceeding with the Transaction. Moreover, the net debt to equity ratio shall decrease from 2.64x to 1.33x.

With reference to the main purpose of selling shares which is to increase liquidity to the company, the IFA considers an opportunity cost from installment method that the Company may gain an interest income of the remaining payment of THB 1,113,695,000 from bank deposits. (The Transaction will take place in 2013 after the Transaction is approved from the Shareholders’ Extraordinary General Meeting of the Company and BECL on February 5 and February 6, 2013, respectively) The IFA conducts an average interest rate of 3.22% based on the maximum fixed deposit interest rates of 3 months, 6 months and 12 months from the BOT. The result gives that the Company may lose an opportunity to gain the interest income from the remaining payment by THB 48,000,000 or 1.45% of the total transaction value of THB 3,313,695,000 or THB 0.10 per share. The transaction price of TTW after subtracting the opportunity cost of THB 0.10 per share is THB 7.45 per share, equal to the fair value of TTW using the DCF approach and in the range between THB 7.26 to 7.63 per share using the sensitivity analysis.

The Contractual Parties concluded their negotiation that the seller has to transfer equity right in TTW to buyer (BECL) at the date of agreement or the date that the seller receives THB 2,200,000,000. Based on Transaction Conditions, if BECL could not make the payment, the Company shall sue BECL under law. However, BECL is a listed company and performs a strong financial position. TRIS Rating affirmed the company rating of BECL at A as of September 26, 2012. Moreover, when considering the BECL’s Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) in 2012 from annualized 9-month-financial-



statement ended September 30, 2012, BECL’s EBITDA was THB 7,000,000,000 roughly with debt due within a year at THB 5,000,000,000 BECL has potential to meet the term of payment.

According to the Transaction’s Conditions, the Company shall have a stronger financial standing. Transaction enables the Company to increase its liquidity and restructure its capital to decrease debt to equity ratio, which increases its business expansion opportunities with competitive cost of capital. Furthermore, the Company shall change the investment booking policy from the equity method to the fair value method resulting from decrease in shareholding in TTW by 11.00% of registered and paid-up capital from 30.04% to 19.04%. The Company shall realize gain on the disposition of assets in TTW, whilst the value of remaining portion of 19.04% in TTW shall be booked by fair value and realized as accounting profit. Moreover, the Company shall use cash, received from sale of TTW amounted to THB 1,723,000,000, for repaying some debt and the remaining amount of THB 1,113,695,000 as its working capital in the business. Next, the Transaction shall lower net debt to shareholder’s equity benefiting the Company to reach its purpose of selling TTW at once. Thus, the IFA gives an opinion that the Transaction’s Conditions are reasonable.



Section 6 Opinion of the Independent Financial Advisor

The Company purposes to sell its 438,900,000 shares in TTW to BECL, representing 11% of the registered capital, at the Transaction Price of THB 7.55 per share. BECL shall make the payment on the Transaction date in the amount of THB 2,200,000,000 or 66.39% of the total amount and the remaining payment of THB 1,113,695,000, or 33.61% of the total amount, shall be paid in term of installments from April 2013 to 2015. The Transaction enables the Company to improve liquidity and strengthen its capital structure. The Company shall lower its debt to equity ratio (“D/E”) and net debt to equity ratio to an appropriate level in order to support a new business opportunity with a competitive financial cost.

For consideration of the reasonableness of the Transaction’s Price of THB 7.55 per share, the IFA uses 2 approaches including the DCF and the volume weighted average market price. The DCF approach is derived from the DCF-based share value of each business unit (Sum of the Parts). The volume weighted average market price approach is conducted by the weighted averages of the close prices for the past 6 months to reflect TTW’s current fundamentals. The IFA gives an opinion that the fair value of TTW based on the DCF approach is THB 7.45 per share and the fair values of TTW based on the volume weighted average market price are range between THB 7.33 to 8.64 per share. Therefore, the Transaction’s Price of 7.55 per share is reasonable. It is higher than the fair value of THB 7.45 per share by THB 0.10, or 1.34% higher. In addition, the Transaction’s Price of THB 7.55 per share is higher than the fair value of THB 7 .33 per share by THB 0.22, or 3.00% higher, and lower than the fair value of THB 8.64 per share by THB 1.09, or 12.62% lower. In addition, The IFA further performs the sensitivity analysis using key factors that significantly affect the equity values of TTW. The result shows that the equity values of TTW are range between THB 7.26 to 7.63 per share; therefore, the Transaction’s Price of THB 7.55 per share is in the range based on the sensitivity analysis.

The IFA preferably uses the fair value obtained from the DCF approach for consideration of appropriateness of the Transaction’s Price; because, cash inflows and cash outflows of TTW and its subsidiaries and associated companies can be precisely projected due to the contracts including purchasing agreements, operation and maintenance agreements, concessions and loan agreements. The equity values of TTW using the DCF approach are range between THB 7.26 to 7.63 per share. The Transaction’s Price of THB 7.55 per share is higher than the equity value of THB 7.26 per share by THB 0.29, or 3.99% higher, and lower than the equity value of THB 7.63 per share by THB 0.08, or 1.05% lower.

The Transaction’s Price of THB 7.55 per share is lower than the volume weighted average market price of THB 8.64 per share by THB 1.09, or 12.62% lower. The disposition of shares in TTW may lower profits compared with sales of the shares through the SET. In contrast, the IFA considers average daily trading volumes of TTW, traded on the SET over the past one year until December 19, 2012, is 3,978,411.61 shares. The disposition of 438,900,000 shares in TTW may take long time, approximately 110 days. As a result, the sales of the shares through the SET may potentially be affected by the degree of uncertainty in terms of future share prices and trading volumes



With the reference on the Transaction’s Conditions and the Draft of Share Purchase Agreement, BECL shall make the payment on the Transaction date in the amount of THB 2,200,000,000 or 66.39% of the total amount and the remaining payment of THB 1,113,695,000, or 33.61% of the total amount, shall be paid in term of installments from April 2013 to 2015.

The Company purposes to sell its 438,900,000 shares in TTW to BECL, representing 11% of the registered capital, at the price of THB 7.55 per share. BECL shall make the payment on the Transaction Date in the amount of THB 2,200,000,000 or 66.39% of the total amount and the remaining payment of THB 1,113,695,000, or 33.61% of the total amount, shall be paid in term of installments from April 2013 to 2015. By one-time selling 11.00% of TTW shares, the Company shall realize gain on the disposition of assets in TTW, whilst the value of remaining portion of 19.04% in TTW shall be booked by fair value and realized as accounting profit. Moreover, the Company shall use cash, received from sale of TTW amounted to THB 1,723,000,000, for repaying some debt and the remaining amount of THB 1,113,695,000 as its working capital in the business. In this respect, the liabilities are decreased, whereas the shareholders’ equity is increased.

With reference to the Term of Installments, the IFA considers an opportunity the Company may gain an interest income of the remaining payment of THB 1,113,695,000 from bank deposits. The Transaction will take place in 2013 after the Transaction is approved from the Shareholders’ Extraordinary General Meeting of the Company and BECL on February 5 and February 6, 2013, respectively. The IFA conducts an average interest rate of 3.22% based on the maximum fixed deposit interest rates of 3 months, 6 months and 12 months from the BOT. The result gives that the Company may lose an opportunity to gain the interest income from the remaining payment by THB 48,000,000 or 1.45% of the total transaction value of THB 3,313,695,000 or THB 0.10 per share. The equity value of TTW after subtracting the opportunity cost of THB 0.10 per share is THB 7.45 per share, equal to the fair value of TTW using the DCF approach and in the range between THB 7.26 to 7.63 per share using the sensitivity analysis.

According to the Draft of the Share Purchase Agreement, the Contractual Parties concluded their negotiation that BECL shall make payment on the Transaction Date in the amount of THB 2,200,000,000. If BECL could not make the payment based on the Transaction Conditions, BECL shall be sued under law by the Company. BECL is a listed company and performs a strong financial position. TRIS Rating affirmed the company rating of BECL at as of September 26, 2012. BECL is a listed company and performs a strong financial position. As of September 26, 2012, TRIS Rating affirmed the company rating of BECL at A. As of September 30, 2012; moreover, BECL’s Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") was approximately THB 7,000,000,000 compared by estimated EBITDA by THB 5,000,000,000. The result shows that BECL has potential to make installments of THB 200,000,000, based on the Transaction’s Conditions.

According to the Transaction’s Conditions, the Company shall have a stronger financial standing. The Transaction enables the Company to repay debts, support its investments in construction projects in the future and strengthen its working capital structure. Furthermore, the Company shall change the investment booking policy from the equity method to the fair value method due to the decrease in



shareholding in TTW by 11.00% of registered and paid-up capital from 30.04% to 19.04%. In this respect, an actual value of the investment shall be reflected in the Company’s financial statements. Next, the Transaction shall lower net debt to shareholder’s equity benefiting the Company to bid new projects, due to the government’s investment policy. Thus, the IFA gives an opinion that the Transaction’s Conditions are reasonable.

With the reason regarding previously, the IFA recommends that the shareholders approve the Company to enter into the Transaction. Notwithstanding, the decision to vote in the shareholders’ meeting is solely dependable on the consideration and at the discretion of the shareholders. Shareholders should take the advantages, disadvantages and risks of the transaction as well as to carefully consider the documents attached herewith into consideration so as to make the most appropriate decision.

Best Regards, Trinity Securities Company Limited Suthang Khonsilpa Suthang Khonsilpa Deputy Managing Director

Pimwi-on Jangjamjitt Pimwi-on Jangjamjitt Operation Controller

The Opinion of Independent Financial Advisor - listed...

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