EASTW : Annual Report 2008 EN (oct2008-dec2008)

To be a leader in valued water management for

sustainable economic and social progress

under the concept of �Water Solution of All.

To implement harmonized strategies covering four main elements, i.e.

finance and investment, stakeholders, management, and knowledge and

organization and technology development.

1. Finance and investment

1.1 Increasing main income and developing downstream business

1.2 Implementing appropriate cost control

1.3 Performing financial management to accommodate investment

1.4 Developing related and other businesses

1.5 Developing overseas businesses and forming alliance with

overseas partners

1.6 Formulating a policy for raw water pricing to correspond with

the cost

2. Stakeholders

2.1 Giving stakeholders satisfaction

2.2 Promoting the Company�s image

• To maintain integrated business growth with transparency

• To serve as a regional water technology center

• To allocate water sources and manage raw water pipelines

networks for adequate consumption and industrial use

• To develop and manage waterworks systems, water reuse

systems, and waste water treatment systems by using

appropriate technology and at reasonable cost

• To operate business with corporate social responsibility

• To instill pride as a leader in water management among

employees

Strategies:3. Management

3.1 Allocating water sources and reserved water sources

3.2 Increasing volume of water sold

3.3 Adhering to good corporate governance

3.4 Managing assets with maximum efficiency and effectiveness

4. Knowledge and Organization and Technology Development

4.1 Developing knowledge and competency, promoting

employees� career advancement, and offering appropriate

compensation

4.2 Promoting quality of life and good workplace environment

4.3 Developing integrated enterprise system development

4.4 Maintaining stability and efficiency of computer systems and

networks

Vision Mission

Contents

Highlights 2

Message from the Chairman 3

Board of Directors and Advisor to the Board of Directors 4

Management Team 6

Organization Structure 8

Business Profile and Subsidiary Shareholding Structure 9

Industrial Situation and Competition 12

Risk Factors (October – December 2008) 14

Management Discussion and Analysis

Eastern Water Resources Development and Management PLC. 17

Good Corporate Governance 23

Definition of Independent Director 33

2008 Assessment of Adequacy of Internal Control Systems 34

Report of the Audit Committee for the Three-month Period

(1 October 2008 – 31 December 2008) 37

Good Corporate Governance 39

Report on the Board of Directors’ Responsibility towards the Financial Statements 40

Report of Independent Auditor 41

Balance Sheets 42

Notes to financial statements 50

Related Party Transactions / Auditor’s Fee 110

General Information 111

First 10 Major Shareholders as of 7 January 2009 113

Dividend Payment Policy 114

Connected Transactions 115

Activities in 2008 116

Comparison of Total Income and Net Profit (2006-2008)Million/Baht

2006 2007 2008 Oct-Dec 2008

Oct - Dec 2008

Total income = 634.31 Million Baht

Net profit = 146.19 Million Baht

Other Sources of income��

2003 2004 2005 2006 2007 2008 Oct-Dec 2008

Other revenues

Pipe business

Drinking waterbusiness

Revenue fromservices

Tap water business

Raw water business

Highlights

Water Distribution Capacity and Raw Water Consumption during 2001-2008

Unit : Million Cubic Meters/Year 2001 2002 2003 2004 2005 2006 2007 2008 Oct-Dec 08

Total water consumption 116.10 140.03 156.52 177.65 190.10 199.36 211.20 227.69 51.86

Water distribution capacity 263.00 328.00 328.00 343.00 423.00 423.00 473.00 473.00 473.00

Water distribution capacity to water

consumption ratio (Unit : Times) 2.27 2.34 2.10 1.93 2.23 2.12 2.24 2.08 2.28

Financial Ratios

Company Financial 3 Consolidated 3

Statement Months Financial Statement 3 Months

Description 2004 2005 2006 2007 2008 Oct-Dec 08 2006 2007 2008 Oct-Dec 08

Book value per share (Baht/share) 3.55 3.16 3.31 3.35 3.47 3.54 3.33 3.50 3.59 3.68

Net profit per share (Baht/share) 0.44 0.39 0.39 0.33 0.32 0.08 0.39 0.33 0.39 0.09

Dividend per share (Baht/share) 0.20 0.25 0.25 0.25 0.25 - 0.25 0.25 0.25 -

Net profit to total income (%) 31.79 35.40 33.00 22.98 25.30 25.10 21.50 18.13 22.02 23.05

Return on shareholders equity (%) 12.55 12.41 12.04 9.58 10.09 8.68 11.92 9.36 10.05 9.67

Return on assets (%) 6.78 6.99 5.96 4.86 6.09 6.24 5.48 4.49 5.60 6.26

Debt to equity ratios (Times) 0.85 0.88 1.01 0.97 0.52 0.48 1.20 1.09 0.56 0.53

2 Annual Report 2008 (October - December 2008)

Message from the Chairman

In the past two years several changes took place in the Company. These changes, with emphasis on

stabilizing and continuously enhancing the growth of the Company, include the creation of a comprehensive pipeline

network, the formulation of plans to acquire water sources to meet the increasing demand for water, and the support

for greater internal management efficiency. This is not to mention the activities to strengthen the relationships with

stakeholders, develop skills and competency of personnel, and revise the Company�s financial policy to be more

reliable and in conformity to international practice. Pursuing the said policy, in 2008 the Company changed its

accounting period to be based on the calendar year, commencing on 1 January 2009. The change was approved

by the 2007 Ordinary General Meeting of Shareholders held on 24 January 2008. The purpose of the new accounting

period was that the Company�s finance and performance would be easier to understand, could be compared with

other listed companies, and could be communicated to outsiders by using the same standard. As a result, the

Company is now presenting the annual reports for the period of 1 October � 31 December 2008, which is in the fiscal

year 2008 (1 October 2007 - 30 September 2008) and for the accounting year 2009 (1 January -31 December

2009).

Although the Company performance during the 1 October 2008 � 31 December 2008 accounting period

was satisfactory, the Company remains unconcerned with the looming economic problems and had been monitoring

and preparing for the likely impact. Action taken includes reduction of the selling and administrative expenses and

the operating cost. Precaution measures are also taken against upcoming investment, with due consideration given

to the interests of all stakeholders.

On behalf of the Board of Directors of Eastern Water Resources Development & Management PLC, I would

like to extend my sincere thanks to shareholders, customers, and business partners in the public and private sectors

for their continued support and confidence in East Water. I also would like to express my appreciation to the

management and all employees for their determination and concerted effort that enabled the Company to achieve

its goals and mission even in the face of global economic crisis. The Company will continue to operate its business

by relying on the principle of good governance for sustainable stability and growth in the future.

Mr. Utid Tamwatin

Chairman

Annual Report 2008 (October - December 2008) 3


Board of Directors and Advisor to the Board of Directors

1. Mr. Utid Tamwatin Age 59

Position Chairman (Independent Director)

Education Master of Law, University of California,

Berkeley, USA.

DCP 3/2000

Work Experience

MAY 08 - Present Chairman

MAY 07 - APR 08 Director

JAN 03 - JAN 07 Director

Eastern Water Resources Development

and Management PLC.

OCT 08 - Present Director - General

The Customs Department

DEC 03 - Present Director

Sukhumvit Asset Management Co., Ltd.

Feb 09 - Present Director

Airports of Thailand PLC.

Mar 08 - Jan 09 Deputy Permanent Secretary

NOV 06 - SEP 08 Ministry of Finance

OCT 04 - OCT 06 Director - General

The Excise Department

2. Mr. Kanoksakdi Bhinsaeng Age 52

Position Director

(1) Chairman of the Executive and

Invesment Committee

(2) Member of the Remuneration Committee

Education Master of Public Administration

(Public Policy and Human Resource

Management) Sripatum University

DCP 106/2008

DAP 73/2008

Work Experience

MAY 08 - Present Director


and Management PLC.

Present Director

Ekarat Engineering PLC.

3. Pol. Gen. Ajiravid Subarnbhesaj Age 62

Position Director (Independent Director)

(1) Chairman of the Audit Committee

(2) Member of the Remuneration

Committee


National Institute of Development

Administration (NIDA)

DCP 104/2008 DAP 72/2008 ACP 22/2008

Work Experience



and Management PLC.

OCT 06 - MAR 07 Deputy Commissioner General

(Administration)

OCT 05 - SEP 06 Assistant Commissioner-General

OCT 02 - SEP 05 Commissioner of Police Region 4

4. Pol.Lt. Gen. Somyot Poompanmoung Age 54

Position Director

(1) Chairman of the Evaluation Committee

(2) Member of the Executive and

Invesment Committee

(3) Member of the Risk Management Committee

Education Master of Political Science Puna University,

India

DCP 107/2008 FSD 2/2008

Work Experience



and Management PLC.

APR 08 - Present Director

The Provincial Waterworks Authority

OCT 08 - Present Assistant Commissioner General

JUN 08 - SEP 08 Commissioner, Central Investigation

Bureau

FEB 08 -MAY08 Commissioner of the Office of

Inspector, General

11 8 9 2 3 10 1 45

612

7


5. Pol. Maj. Gen. Pimol Sinthunava Age 67


(1) Chairman of the Nominating Committee

(2) Member of the Audit Committee

(3) Member of the Corporate Governance

Committee

Education Master of Education in Education Program

Administration, Naresuan University

DCP 104/2008 DAP 72/2008 ACP 22/2008

Work Experience



and Management PLC.

OCT 99 - NOV 01 Assistant Commissioner

Provincial Police Region 6, Phitsanulok Province

6. Mr. Chakarn Saengruksawong Age 58

Position Director


(2) Member of the Nominating Committee

Education Master of Science (Agricultural Extension),

Kasetsart University

Work Experience

MAY 08 - JAN 09 Director


and Management PLC.



OCT 05 - Present Deputy Permanent Secretary

Ministry of Agriculture and Cooperatives

OCT 02 - SEP 05 Director - General

Depertment of Agriculture Ministry of

Agriculture and Cooperatives

7. Mr. Nattachak Pattamasingh Na Ayuthaya Age 55

Position Director

(1) Chairman of the Remuneration Committee

(2) Member of the Nominating Committee

(3) Member of the Evaluation Committee

Education (1) Master of Comparative Law,

George Washington University, USA.

(2) Master of Law, University of Pennsylvania,

USA.

DCP 70/2006 ACP 13/2006

Work Experience



and Management PLC.



Present Director

Bangkok Aviation Fuel Services PLC.

MAR 06 - Present Deputy Director - General

Department of Legal Counsel,

Office of The Attorney General

8. Mrs. Monta Pranootnorapal Age 54

Position Director

(1) Chairperson of the Risk

Management Committee



National Institute of Development

Administration (NIDA)

DCP 84 / 2007

Work Experience



and Management PLC.

MAY 08 - Present Director and Governor

Industrial Estate Authority of Thailand

OCT 04 - DEC 07 Deputy Governor 11 ( Industrial Port )

Industrial Estate Authority of Thailand

9. Mr. Rasda Pongpaew Age 58

Position Director

(1) Member of the Corporate Governance Committee


Education Bachelor of Science ( Mech. Eng )

Prince of Songkla University

DCP 94/2007

Work Experience

MAY08 - Present Director


and Management PLC.

MAR 06 - Present Managing Director

EGCO Engineering and Service Co.,Ltd.

SEP 98 - MAR 06 Deputy Managing Director

EGCO Engineering and Service Co.,Ltd.

10. Mr. Chanchai Tontisirin Age 66


(1) Member of the Audit committee


Education Master Degree in Economic, Middle Tennessee State

University, USA.

DCP 1/2008 (Refresher Course)

ACP 22/2008

Work Experience



and Management PLC.

JAN 05 - DEC 06 Deputy Chairman

The Marketing Organization

JAN 05 - DEC 06 Chairman

Bangpakong Water Supply Co.,Ltd.

JAN 88 - DEC 02 Regional Manager

TMB Bank PLC.

11. Mr. Praphant Asava-aree Age 52

Position Director

(1) Member of the Executive and

Invesment Committee


Education Bachelor�s Degree (Political Science)

Ramkamhaeng University

DCP 101/2008 ACP 21/2007

Work Experience


JAN 07 - JAN 08 Director


and Management PLC.

APR 07 - Present President & CEO


and Management PLC .

MAR 07 - Present Director

Universal Utilities Co.,Ltd.

APR 07 - Present Director, member of the Audit Committee

and Corporate Governance Committee

Seamico Securities PLC.

12. Lt. Gen Chayuth Suwanamas Age 56

Position Advisor

Education M.A. Industrial Psychology

Tennesses State University, USA.

Work Experience

MAY 08 - Present Advisor


and Management PLC.

APR 03 - Present Policy and Plan Attached to Deputy

Supreme Commander

Office of Supreme Command

Present Advisor

CPB Equity Company Limited.,

Crown Property Bureau

JAN 07 - MAY 08 Director


and Management PLC.


Management Team

510

76

142398

1. Mr. Praphant Asava-aree Age 52

Position : Director, President & CEO

Education : B.A. in Political Science, Ramkhanhaeng

University

Directors Certification Program

(DCP 101/2008 ACP 21/2007)

Work Experience:

May 08 � Present Director

Jan 07 � Jan 08 Director

Eastern Water Resources Development&

Management PLC.

Apr 07 � Present President & CEO

Eastern Water Resources Development &

Management PLC.

Mar 07 � Present Director

Universal Utilities Co., Ltd.

Apr 07 � Present Director, Member of Audit and Good Corporate

Governance Committees

Seamico Securities PLC.

Jun 05 � Present Advisor to the Deputy Governor

The Tourism Authority of Thailand (China Market)

2. Mr. Pairoj Sattayasansakul Age 49

Position : Executive Vice President

(Dept. of CEO Office)

Education : M. Eng.(Sanitary Engineering), Chulalongkorn

University

Directors Certification Program (DCP 19/2002)

Work Experience :

Aug 08 � Present Executive Vice President (Dept. of CEO Office)


Management PLC.

Nov 01 � Jul 08 Executive Vice President, Planning & Operations


Management PLC.

2001 � Jul 08 Director/Managing Director


2001 � Jul 08 Director

Bangpakong Water Supply Co., Ltd.


Chachoengsao Water Supply Co., Ltd.


Nakornsawan Water Supply Co., Ltd.

3. Mrs. Namphon Rassadanukul Age 48

Position : Senior Vice President

(Dept. of CEO Office and Corporate Secretary)

Education : M.A. (Public Administration for Developing

Countries), Glasgow College of Technology, UK.

Directors Certification Program (DCP 4/2000)

Work Experience :

Jun 07 � Present Senior Vice President (Dept. of CEO Office and

Corporate Secretary)


Management PLC.

Feb 04 � Jun 07 Senior Vice President, Internal Audit Department

and Corporate Secretary


Management PLC.

Nov 01 � Feb 04 Vice President Internal Audit Department


Management PLC.

Mar 01 � Oct 01 Vice President (Dept. of CEO Office)


Management PLC.

4. Mrs. Thidarut Kraiprasit Age 45

Position : Senior Vice President (Finance and Accounting

Department)

Education : MBA, Kasetsart University

Work Experience :

Jun 07 � Present Senior Vice President, Finance and Accounting

Department


Management PLC.

Oct 04 � Jun 07 Senior Vice President, Finance and Human

Resources Department


Management PLC.

2001 � Oct 04 Vice President, Finance and Human Resources

Department


Management PLC.

2540 - 2544 Vice President, Finance and Procurement

Department


Management PLC.


5. Mr. Cherdchai Pitiwacharakul Age 44

Position : Vice President (Business Development

Department)

Education : MS (Information Technology), King Mongkut�s

Institute of Technology, Lat Krabang

Work Experience :

Dec 08 � Present Vice President, Business Development Department


Management PLC.

Aug 08 � Present Acting Managing Director


Jul 08 � Present Director



Egcom Tara Co., Ltd.

Nov 07 � Nov 08 Vice President, Special Project Department


Management PLC.


Bangpakong Water Supply Co., Ltd.

Director

Chachoengsao Water Supply Co., Ltd.

Director

Nakornsawan Water Supply Co., Ltd.

Nov 01 � Nov 07 Vice President, Chachoengsao Operation Center,

Acting Vice President, Rayong Operation Center


Management PLC.

Oct 00 � Oct 01 Vice President, Map Ta Phut Operation Center


Management PLC.

6. Mr. Potjana Bunsiri Age 47

Position : Vice President, (Operation Department)

Education : MBA, Burapha University

Work Experience :

Nov 07 � Present Vice President, Operations Department


Management PLC.

Nov 01 � Oct 07 Vice President, Chachoengsao Operation Center


Management PLC.

Mar 01 � Oct 01 Manager, Chachoengsao Construction Project Office


Management PLC.

Mar 01 � Oct 01 Manager, Large-scale Construction Project Office


Management PLC.

1998 � 2001 Senior Engineer


Management PLC.

7. Ms. Fuangfa Nimcharoen Age 44

Position : Vice President (Information Technology Department)

Education : M. Sc. in (Resource Economics), Kasetsart University

Work Experience :

Jun 07 � Present Vice President, Information Technology Department


Management PLC.

Nov 02 � Jun 07 Vice President, Corporate Affairs Department


Management PLC.

Nov 01 � Oct 02 Acting Vice President, Corporate Affairs Department


Management PLC.

Mar 01 � Oct 01 Assistant Vice President, Administration


Management PLC.

8. Mr. Namsak Wannavisute Age 43

Position : Vice President (General Affairs Department)

Education : MS. (Finance), University of Colorado, USA.

Work Experience :

Jun 07 � Present Vice President, General Affairs Department


Management PLC.

Nov 02 � Jun 07 Vice President, Business Development Department


Management PLC.

Nov 01 � Oct 01 Acting Vice President, Business Development

Department


Management PLC.

Mar 01 � Oct 01 Manager, Business Development Department


Management PLC.

9. Mr. Jaroensuk Worapansopak Age 45

Position : Vice President (Project Planning Department)

Education : M.Sc. (Hydraulic Engineering), International Institute

for Hydraulic and Environmental Engineering (IHE)

Delft, The Netherlands.

Work Experience :

Aug 08 � Present Director

Egcom Tara Co., Ltd.

Nov 02 � Present Vice President, Project Planning Department


Management PLC.

Nov 01 � Oct 02 Acting Vice President, Project Planning Department


Management PLC.

Mar 01 � Oct 01 Manager, Project Planning Department


Management PLC.

10. Mrs. Wirawan Tharanont Age 50

Position : Vice President (Internal Audit Department)

Education : MBA, Sasin Graduate Institute of Business

Administration of Chulalongkorn University

Work Experience :

Jun 07 � Present Vice President, Internal Audit Department


Management PLC.

Oct 06 � Jun 07 Vice President, Department of CEO Office


Management PLC.

Oct 05 � Sep 06 Manager, Department of CEO Office


Management PLC.

2004 � 2005 Corporate Risk Manager


Management PLC.


Organization StructureEastern Water Resources Development & Management PLC.

Approved by a resolution of the Board of Directors No. 20/2551 on 22 December 2008

ProjectPlanning

OperationsDepartment

Vice PresidentCorporate Affairs

Vice PresidentAdministration

MarketingCommunication

Department

BusinessDevelopmentDepartment

Finance andAccountingDepartment

Corporate AffairsDepartment

HumanResource

Department

Vice PresidentFinance

Vice PresidentPlanning &Operations

InformationTechnologyDepartment

Internal AuditDepartment

President & CEO

CEO Office

Performance Criteria andEvaluation Committee

RemunerationCommittee

NominationCommittee

Management andInvestmentCommittee

GoodGovernanceCommittee

Audit CommitteeRisk Management

Committee

Board of Directors


Business Profile and Subsidiary Shareholding Structure

Core Business

Eastern Water Resources Development and Management Public Company Limited was founded on October

15, 1992 to be responsible for the development and management of main water pipeline systems in the Eastern

Seaboard. The Company supplies raw water to industrial estates, factories and waterworks via four main raw water

pipeline systems in Chonburi, Rayong and Chachoengsao Province, i.e. the Nong Plalai-Dokkrai-Map Ta Phut-Sattahip

pipeline; the Nong Kho-Laem Chabang-Pattaya-Bang Phra Pipeline; the Nong Plalai-Nong Kho Pipeline; and the

pipeline system in Chachoengsao. At the time of this reporting the Company manages 324 km water pipelines with

the combined pumping capacity of 478 million cubic meters per year.

Major Development of Core Business

Core Business

October 2006: Began construction of the reserved raw water reservoir and associated pipeline for connecting

the reserved reservoir to the Bangpakong - Bang Phra - Chonburi pipeline. The new 700 mm.

diameter pipeline, covers a distance of approximately 2.2 kms., was laid to connect the reserved

raw water reservoir at the Samnak Bok Subdristrict Administration Organizatation. The reserved

reservoir has a holding capacity of 7.4 million m.3. It will be used to store water from the Bang

Pa Kong River during the rainy season and distribute to areas in Chachoengsao and Chonburi

Provinces during the dry season. The construction had been completed on October 29, 2007.

May 2007: A consulting company was hired to conduct a study on the improvement of main pipeline system

project in the Eastern Seaboard Area. The objective of the study was to formulate a master plan

for the main pipeline system improvement to ensure adequate capacity to accommodate the

increase in demand for water in the next ten years. At present, the detailed design is in progress

and the work procurement process is expected to start in May 2009.


September 2007: The construction of the pipeline connecting Prasae Reservoir and Klong Yai Reservoir under the

Royal Irrigation Department in accordance with a cabinet resolution of August 2, 2005 is in

progress. These 1,600 mm. diameter and 1,400 mm. diameter pipes were laid covering a

distance of 31.8 kilometers. The objective of the pipeline is to channel water approximately 80

million cubic meters per year from Prasae Reservoir to Khlong Yai Reservoir. About 98% of the

1,700 million Baht project had been completed and the remaining work of the pumping system

was expected to be ready for operation in 2009.

Related Businesses

Tap Water Business: Universal Utilities Co., Ltd. (UU) is a

concessionaire offering tap water services in nine areas;

including, Sattahip Waterworks, Bangpakong Waterworks,

Chachoengsao Waterworks, Nakornsawan Waterworks,

Sichang Waterworks, Bo Win Waterworks, Ko Samui

Waterworks, Ko Lan Waterworks, and Rayong Waterworks.

In addition, it produced tap water for Egcom Tara Co., Ltd.

and Ratchaburi-Samut Songkram Waterworks. UU also

managed water leakage reduction systems for Service Area

2 of Om Noi - Samphran - Samut Songkhram Waterworks,

Pathumthani - Rangsit Waterworks, and Pattaya Waterworks.

Important Developments in Tap Water Business

February 2008: Universal Utilities Co., Ltd. signed an

agreement with the Provincial

Waterworks Authority on 18 February

2008. This was a two-year Water Loss

Reduction Agreement for areas under

the Om Noi � Samphran -Samut

Songkhram Waterworks, involving a

budget of 98.38 million Baht.

June 2008: Universal Utilities Co., Ltd. signed an

agreement with the Provincial

Waterworks Authority. This was a 14-

month Water Loss Reduction

Agreement for areas under the Pattaya

Waterworks, involving a budget of 11.20

million Baht.


September 2008: Universal Utilities Co., Ltd. signed an agreement with the Provincial Waterworks Authority. This

was a 5-year Non-Revenue Water Project for areas under the Pathumthani - Rangsit Waterworks.

Universal Utilities Co., Ltd. signed an agreement with the Provincial Waterworks Authority on 24

September 2008. This is an agreement to engage a private entity to manage tap water production

and waterworks system maintenance at the Bang Niaw Dam Water Treatment Plant, Phuket

Waterworks. The term of the agreement is three years and the required production capacity

is12,000 m.3/day.

Drinking Water Vending Machine Business:

Water Trades and Services Co., Ltd.

took over the business from Global Water

Systems Corporation (GWS) to continue

providing support and service for the

community drinking water vending machine

and assisting in the service related to selling

existing vending machines that GWS had

transferred to East Water.

Administration and Management

June 2008: The Company was rated �Very Good� in the Evaluation of Quality in Organizing Annual Ordinary

General Shareholders Meetings as indicated in the SEC�s letter, Reference Number Kor. Lor.

Tor. Kor. 1028/2008, Re: Notification of the result of the 2007 Evaluation of Quality in Organizing

Annual Ordinary Shareholders Meeting Quality for companies not closing accounts in December

2007 and its request for cooperation in disclosure of the result. The project was jointly

implemented by the Securities and Exchange Commission, the Thai Investors Association,

and the Thai Listed Companies Association.

November 2008: The Company was rated �Very Good� in the category of Corporate Governance during the

2008 SET Awards Presentation on 21 November 2008. The event was jointly organized by the

Stock Exchange of Thailand and the Journal of Finance and Banking.


Industrial Situation and Competition

The Thai economy in 2008 showed a growth rate of 4.5% comparing 4.8% in 2007. The political conflicts

that were accelerated during the second half of the year had a negative impact on the market confidence in Thailand

and tourism industry. At the same time, the financial crisis in the United States intensified and spread to leading

industrial countries, all of which are Thailand�s main export markets. As a result, export during the last quarter

(October-December 2008) slowed down substantially.

The crises caused the cutback or production stoppage of some factories in automotive and petroleum

industries, and this led to lower water consumption. The iron and steel industry also reduced its production because

of the decrease in market demand. As a result, the raw water consumption of the industrial sector in major industrial

estates dropped accordingly. For examples, in Map Ta Phut Industrial Estate, Laem Chabang Industrial Estate and

the Hemaraj Group, which are the production base of petrochemicals and automotive parts, raw water consumption

dropped drastically. Nevertheless, the rate of household water consumption declined only slightly when compared

to the same period of the previous year. The overall decrease in raw water consumption was 6.88% when compared

to the previous year.

Although the anticipated global economic slowdown in 2009 caused by the demand decrease in the global

market last year, it is expected that the government economic stimulus policy will be favorable to the country�s tourist

industry. Tourism industry shows a sign of early recovery when compared to the petrochemical and other production

industries for export. Based on this trend together with the 2009 GDP forecast of 2.0 to 2.5%, the Company anticipates

that the total raw water consumption may be approximately the same or slightly higher than that of the previous year.

An important positive factor is the production capacity expansion of several waterworks, such as the Bang Chang

Waterworks and Pattaya Waterworks, to meet the increased demand in water for household consumption. Another

positive aspect is the commencement of Phase 3 of the petrochemical business.

To cope with the 2009 economy condition, the Company has a plan to closely monitor water consumption

situation in line with fluctuating economic conditions. The Company is confident that the government�s economic

stimulus package will create a clear direction of the country�s economy and the confidence in the global market. This

is turn with lead to a quick recovery of the production for export sector and eventually the demand for raw water will

increase accordingly

Plants and others

Private Industrial Estates

IEAT and existing users

Domestic consumption

8.17%

20.34%

38.77%

32.72%

Raw Water Consumption during October-December 2008


Tap Water Business

Revenue from the tap water business accounted for 23% of the total income. Revenue from sales and

service of tap water was only slightly affected by the economic conditions because most of the revenue was from

concession contracts with affiliated companies of the Provincial Waterworks Authority (PWA) or with local administration

organizations; and some of these contracts had a minimum purchase condition. Moreover, tap water is essential for

life. Thus, the volume of water consumption was not greatly affected by economic problems. Also, water for household

consumption continued to increase, both in the number of users and service areas. During October-December

2008, sales of tap water enjoyed an overall growth rate of 7.4% when compared to the same period in 2007.

Futhermore, the Company is in the process of negotiating with the Provincial Waterworks Authority (PWA) regarding

the investment in the tap water system of 24,000 cubic meters per day, supplied to PWA in Chon Buri Province, and

the increase in the volume sold to PWA on Samui Island from 2,500 cubic meters per day to 6,000 cubic meters per

day. This is not to mention other areas where water shortage still exists - the factor that will contribute to the increase

in the Company�s service areas and sales of tap water. In addition, the Company plans to conduct a study on

investment in tap water service for other potential groups of users, i.e. local administration organizations and users in

the industrial sector as well as on investment in water loss management and waste water treatment projects.

Comparison of Raw Water Consumption During October-December 2008

Water Volume

(million

cubic m

eters)

Oct-Dec 2007 Oct-Dec 2008


Risk Factors (October – December 2008)The Board of Directors realizes the importance of good governance and is committed to the development of

good corporate governance, which includes suitable risk management to mitigate the negative impact of incidents or

uncertainty that may be caused by circumstantial factors, including the economic recession that may impair the

Company�s ability to accomplish its objectives or goals. Thus, the Risk Management Committee was assigned to

formulate policies and monitor corporate risks. Improvement has been made on the framework and criteria based on

the affecting factors. A risk management guideline has been prepared and progress has been monitored based on

the operational plans for risk management prepared by the Company and responsible work units to ensure consistent

control of risks, with results to be reported to the Board of Directors on a quarterly basis.

Key risk factors that may significantly affect to business operations;

1. Business-related Risks

1.1 Conflicts with communities concerning the use of water resources

Most of the construction projects are major pipeline projects, such

as Prasae to Khlong Yai which will be one of the Company�s main raw water

resources. Their implementation and the use of water resources in the

Company�s projects may cause conflicts with communities in the area.

However, the Company has coordinated with the local communities and

tried to have dialogues to end the conflict in each community.

During October � December 2008, there were activities organized

jointly with the communities such the digging and cleaning up of canals,

and the presentation of reversed osmoses (RO) drinking the water vending

machines and clean water storage tanks to the communities. Other activities

included the Water and Environmental Conservation Camp for Young

Leaders and the award of scholarships to students. In addition the Company

also commissioned the Asian Institute of Technology (AIT) to conduct a

study to address of the impact of the Company�s water pumping activities

on the change in water levels in areas in Prachinburi Province. The study

also included other issues such as the problem and the cause of the collapse

of the Prachinburi River�s banks. It also explored the hydraulic and water

level aspect to determine, river�s flow rate that would maintain the salinity

level at the pumping station of no more than 200 ppm, the threshold value

where water pumping must stop. This was because at the end of 2007,

there was news that the method the Company had pumped water from the

Bang Pa Kong River was the cause of the collapse of the river banks in

Prachinburi Province and the unusual increase in the salinity level of the

Bang Pa Kong River.

Findings from the study conducted by AIT showed that the Company�s pumping activities were not the

cause of such salinity level or the collapse of the river banks. The study documents can serve as a scientific proof that

can be used as an explanation should there be any conflicts with these communities in the future.


1.2 Inadequacy of water resources to meet water consumption demand

The projection of the volume of water in main water resources indicated that there would be sufficient water

for consumption throughout 2008. However, to mitigate against this risk, the Company implemented a monitoring

system to be detect warning on the alert for droughts. Preventive measures were put in place and the water situation

was monitored on a weekly basis. A project to increase raw water capacity was implemented, with the provision of

earth pits to restore water to be used during the dry season. At the time of this reporting, the water volume in the main

reservoirs was 194.2 million cubic meters, or at 82.6% of the total capacity (235.2 million cubic meters as of 2

February 2009).

1.3 Policies of the government and relevant government agencies

With the increase in the private sector�s shareholding, the Company was no longer a state enterprise. Thus

the uncertainty in the policies of government agencies involved in the Company�s operations may have some

repercussion on the Company. For example, there might be a risk of not getting approval for allocation of 80 million

cubic meters/year from the Prasae Reservoir from the Royal Irrigation Department. The matter was under the

consideration of Office of Hydrology and Water Management, Royal Irrigation Department. Also, the Department of

Highways and local administration organizations might decide not to award

or renew permits for pipeline laying in areas under their jurisdiction.

Nevertheless, the Company has always received good cooperation from

relevant government agencies. Moreover, the Company was incorporated,

and has been operating its business, according to a cabinet resolution in

line with the government policy to promote investment in industry and

tourism in the Eastern Seaboard.

1.4 Damage to pipeline systems

The Company�s pipeline systems may face the problem of

corrosion, or construction of other infrastructure in the areas where the

pipelines are laid, that may lead to breaking or leaking. However, the

Company has prepared a plan to inspect and maintain the pipeline systems

on a continuous basis. The Company has also taken all risks insurance to

cover every pipeline as well as insurance to cover risks to its assets and

liabilities to third parties to ensure that water would be distributed efficiently

and without interruption.

2. Financial Risks

Pumping water from newly developed water resources and the

rising cost of energy due to a higher Ft rate resulted in higher cost of energy

used for water pumping than anticipated. Although the Company could

not control the cost of energy, which varied with the economy and price of

oil in the global market; but it was able to manage by such measures as

pumping water during the time that the cost was at the lowest and improving

the pumps� efficiency. The Company has also prepared an energy conservation plan, explored alternative energy

sources such as hydro, solar and wind energies.

At present the unstable economy has caused multiple problems, such as those related to foreign exchange

rates, economic crisis, and financial problems. This has changed water users� behavior, especially in the industrial

sector where water consumption has declined and investment has slowed down.


3. Legal Risks

Legal disputes that might affect the assets of the Company in the value exceeding 5% of shareholders�

equity as of 31 December 2008 are listed below.

1. On 28 March 2003, the Company was the 2nd

Defendant in a case involving the purchase of assets from

the Legal Execution Department, Black Case No. 1371/2546. Droitnes Associate Company Limited (Plaintiff) filed a

case in the Court demanding revocation of the legal act, i.e. the buying and selling of land, between the Legal

Execution Department and the Company, or that the Department and the Company jointly, or on behalf of the other

party, pay them damages, at the claimed amount of 302.2 million Baht. On 26 January 2006, the Court of First

Instance dismissed the case. The Plaintiff lodged an appeal on 21 March 2006. The Company filed the answer to the

appeal on 19 June 2006 and the proceedings are still ongoing at the Court of Appeals at the time of this reporting.

However, the Company believed that such transaction was legitimate and protected by law. The Company

followed the procedures for sale by auction in good faith according to the Court�s order or the order of the Official

Receiver. Full payment was made and the transfer of ownership from the Legal Execution Department was duly

registered. The Company expects to win this case.

2. Tambon Bang But Administration Organization, 1st Plaintiff, Tambon Ban Khai Administration Organization,

2nd

Plaintiff, and Mr. Sayan Yangdee, 3rd Plaintiff filed a case against the Provincial Waterworks Authority (PWA) at the

Rayong Administrative Court on 14 March 2006. The case concerned an unlawful act committed by an administrative

agency or a state official. Afterwards, on 30 May 2006, the Rayong Administrative Court summoned the UU Group

Consortium to be the interpleaded and prepare the statement in its capacity as the 2nd

Defendant, because it was an

interested party in this dispute. On 16 March 2007, the Rayong Administrative Court passed a decision to revoke the

process to select a private entity to produce tap water to sell to PWA in the area under the jurisdiction of the Rayong

Waterworks Authority. The Agreement No. For. Kor. Mor. 1/2549 dated 14 March 2006, which resulted from an

unlawful selection process, was also revoked. However, PWA still instructed the UU Group Consortium to comply

with the agreement for a private entity to produce water to sell to PWA at the Rayong Waterworks Authority. PWA also

upheld the rights and duties of the Parties to the Agreement as stipulated in the said Agreement until the case would

become final. If the Supreme Administrative Court should confirm the decision of the Rayong Administrative Court,

thus reinstating the parties to their original status, the UU Group Consortium would then have the right to claim

damages from PWA, which would include the construction cost, the system improvement cost and any other expenditure

incurred to make the tap water systems operable. At the time of this reporting, the appeal proceedings were in

process at the Supreme Administrative Court.

Although corporate risks are closely monitored by the Risk Management Committee, the Company has

prepared a risk management guidance and set risk management action plans to be implemented by departments to

maintain operational risks at an acceptable level. Risks are reviewed at the end of every quarters and not limited to

those relating to damage. The review also includes consideration of other parameters tat can indicate probable risks

under changing situations.


Management Discussion and AnalysisEastern Water Resources Development and Management PLC.

In the 2007 Ordinary General Meeting of Shareholders held on 24 January 2008, a resolution was passed to

change the Company�s accounting period from 1 October to 30 September of the following year to the period of to 1

January to 31 December of every year. This new accounting period took effect from the accounting year commencing

on 1 January 2009, in order to be based on the calendar year and consistent with the practice of other listed companies.

As a result, in 2008 the Company had to close its account twice, i.e. for the October 2007 - September 2008 and the

October 2008 - December 2008 periods.

In that respect the management prepare financial analysis for the period of 1 October - 31 December 2008

and compares the financial statements of the Company and its subsidiaries with the same period of the previous

year, i.e. 1 October 2007 - 31 December 2007. Details of the financial statement between 1 October 2007 - 31

December 2007 are given below.

1. Performance Report and Analysis

1.1 Income analysis

During the 1 October 2008 - 31 December 2008 accounting period, the total revenue of the Company and its

subsidiaries was 634.31 million Baht, an increase of 64.35 million Baht, or 11.29%, compared to the same period in

2007 (1 October 2007 - 31 December 2007). Important details are given below:

Unit: Million Baht

Revenue Oct-Dec 2008 Oct-Dec 2007 Difference Difference (%)

Raw water 393.11 407.78 (14.66) (3.60%)

Tap water 144.74 125.42 19.32 15.40%

Other revenues from sales 0.20 7.98 (7.79) (97.56%)

Revenue from services 73.44 24.69 48.75 197.46%

Interest income/dividend income 19.76 1.50 18.26 1,221.40%

Others 3.06 2.60 0.46 17.80%

Total income 634.31 569.96 64.35 11.29%

- Revenue from sales of raw water decreased from 407.78 million Baht to 393.11 million Baht or 3.60%, consistent

with the decrease in the amount of raw water sold in all areas, which dropped from 55.69 million cubic

meters to 51.86 million cubic meters, or 6.88% due to the production plan adjustment in the industrial sector

to correspond with the sluggish economy. Income from the tap water business increased by 19.32 million

Baht or 15.40%, due to an increase in the number of new customers and in water consumption of the existing

users under the Sattahip Waterworks and waterworks under concessions in three other areas. The figures

also include income from sales of tap water to Pattaya and revenue from waterworks under concession, i.e.,


Sichang Waterworks, Koh Samui Waterworks, Koh Lan Waterworks and Rayong Waterworks. The total

number of water users was 111,977, increasing by 9.39%.

Unit: Million Cubic meter (m3)

Area Oct-Dec 2008 Oct-Dec 2007 Difference Difference (%)

Rayong Province 31.20 36.98 (5.78) (15.63%)

Chon Buri Province 14.49 17.41 (2.92) (16.77%)

Chachoengsao Province 6.17 1.30 4.87 374.62%

Total Sales of raw water from 51.86 55.69 (3.83) (6.88%)

all areas

Unit: Million Cubic meter (m3)

Total Sales of tap water from Oct-Dec 2008 Oct-Dec 2007 Difference Difference (%)

all areas

12.81 11.47 1.34 11.67%

- The revenue from other businesses during the 1 October 2007 � 31 December 2007 accounting period

comprised revenue from sales of drinking water, chemicals, and CC-GRP pipes in the amount of 7.98 million

Baht. This was because the Company had a policy to decelerate its activities in the drinking water business

and only provided service to existing customers. Company sold all of its shares in the CC-GRP pipes

business (Eastern Hobas Pipes Company Limited - EHP) in March 2008. Thus, the revenue from this source

was not accounted for during the 1 October 2007 � 31 December 2007 accounting period, resulting in the

drop in other revenues by 7.79 million Baht or 97.56 %.

- The revenue from services went up 48.75 million Baht, or 197.46%, as a result of an increase in the service

engineering projects is and the water loss management activities, compared to the previous year. New

projects were gradually starting, i.e. water loss management contracts with Pathumthani � Rangsit Waterworks,

Om Noy � Sam Phran � Samut Sakhon Waterworks, and Pattaya Waterworks. Revenue from building rental

increased by 6.21 million Baht.

- Interest income and combined dividend income amounted to 19.76 increased by 18.26 million Baht. This

was attributed to the dividend from tap water business (UU and EGCOM TARA) in the amount of 16.2 million

Baht.

1.2 Expense analysis

The operating expenses of the Company and its subsidiaries totaled 400.12 million Baht, an increase of

30.61 million Baht or 8.28% from the same period of the previous year (1 October 2007 - 31 December

2007).


Unit: Million Baht

Expense Oct-Dec 2008 Oct-Dec 2007 Difference Difference (%)

Cost of sales-Raw water 177.14 176.25 0.89 0.50%

Cost of sales-Tap water 74.15 57.40 16.75 29.19%

Cost of sales-others 0.38 6.82 (6.44) (94.45%)

Cost of services 64.62 24.54 40.09 163.38%

Cost of sales and administration 83.83 104.50 (20.67) (19.78%)

Total expense 400.12 369.51 30.61 8.28%

- The raw water selling cost slightly increased by 0.89 million Baht or 0.50%. This was attributed mainly to the

increase in the electricity cost for water pumping that went up by 2.77% due to the increased capacity of the

Dokkrai - Nong Kho transmission line to meet the demand in Chon Buri and the electricity cost for pumping

raw water to be stored at the Bang Phra reservoir. Depreciation cost of the raw water pumping system

dropped by 0.34 million Baht or 0.60 % due to the more realistic adjustment of the useful life of the pipe

system, i.e. from 30 years to 40 years.

- The tap water selling cost increased by 16.75 million Baht, or 29.19 % due to the increase in the energy cost,

the unit cost of chemicals, and the cost of raw water at Sattahip and Bo Win Waterworks. The selling cost of

drinking water and chemicals and the revenue from sales of CC-GRP pipes dropped by 6.44 million Baht or

94.45 %, consistent with the decrease in revenue. The cost of the pipe business was not accounted for

during this accounting period because the Company had already sold all of its CC- GRP pipe business

(EHP�s shares). The cost of the service went up 40.09 million Baht or 163.38% in accordance with the

increase in the revenue from services.

- The sales and administration costs dropped by 20.67 million Baht or 19.78% due to the Management�s

control on expenditures in every aspect to be consistent with, and appropriate for, the current economic

condition by decreasing expenses for administration and business expansion and exercising prudence in

business operation. However, the Company still gives importance to CSR activities, which is an on-going

project.

The Company changed the accounting policy of accounting estimates for the 1 October 2008 to 31 December

2008 period by revising the useful life of assets. The estimated useful life of every raw water pipeline was changed

from 30 years to 40 years, and of every Nong Pla Lai - Map Ta Phut transmission pipeline from 25 years to 40 years,

to be consistent with the condition and useful life of the assets. The change resulted in the increase in the net income

in the consolidated and business-specific financial statements for the 1 October 2008 � 31 October 2008 by 3.7

million Baht.


1.3 Summary of consolidated performance

Unit: Million Baht

Oct-Dec 2008 Oct-Dec 2007 Difference Difference (%)

Total Income 634.31 569.96 64.35 11.29%

Total expenses before depreciation 314.92 282.04 32.88 11.66%

EBITDA 319.39 287.92 31.47 10.93%

Depreciation and amortization 85.21 87.47 (2.26) (2.59%)

EBIT 234.19 200.45 33.73 16.83%

Interest expense 34.46 49.58 (15.13) (30.50%)

Income tax 53.54 56.80 (3.27) (5.75%)

Net loss of minority interests 0.00 17.73 (17.73) (100.00%)

Net income 146.19 111.79 34.40 30.77%

During the 1 October 2008 � 31 December 2008 period, the consolidated EBITDA from operations of Company

and its subsidiaries went up from 287.92 million Baht to 319.39 million Baht, representing an increase of 31.47 million

Baht or 10.93% from that of the same period of the previous year. This came as a result of the tap water business

expansion and the increase in the services provided of the service engineering and water loss management projects

and from the adjustment of the useful file of the pipelines to be more accurate i.e. from 30 years to 40 years. This led

to the decrease in the depreciation. Control on the cost of sales and administration led to a drop by 19.78%, and an

increase of EBIT by 33.73 million Baht, or 16.83%.

The interest expense amounted to 34.46 million Baht, decreased by 15.13 million Baht, or 30.50% due to the

gradual repayment of a long-term loan of 775.00 million Baht and from the successful negotiation to reduce the

interest to fixed rates of 4.5% and 4.8%. Previously, the rate was based on MLR-2.00% or at approximately 5.50%.

Income tax decreased by 3.27 million Baht, or at 5.75% as a result of the government�s reduction of corporate income

tax to 25% of the net profit as an economic stimulus. Overall, the net profit of the Company and its subsidiaries

amounted to 146.19 million Baht, increasing by 34.40 million Baht or 30.77% when compared to the same period

(1October 2008 � 31 December 2008 ) of the previous year.


Important Financial Ratios

Financial Ratios Unit Oct-Dec 2008 Oct-Dec 2007

- Liquidity ratio Time 0.85 0.83

- Gross profit margin % 53.22 55.56

- Net profit margin % 23.05 19.61

- Return on assets % 6.26 4.53

- Return on shareholders� equity % 9.55 7.50

- Debt to shareholders equity ratio Time 0.53 0.66

The Company�s financial ratio analysis showed an overall normal trend. The liquidity ratio was at 0.85 time,

or approximate the same as that of the same period of the year before. The gross profit margin was at 53.23%,

dropping slightly compared to the same period of last year due to the decrease in sales. The net profit margin was at

27.17%, increasing by 6.15% from that of the same period of the year before, due to the increase in the total revenue

and the decrease in the cost of sales and administration expenses and the interest expense, and the fact that there

was no recognition of losses following the sale of EHP as mentioned above.

The return on assets went up from that of the same period of the previous year by 6.26%, reflecting the ability

to manage assets for the Company�s benefits. The debt to equity ratio was at 0.53 time, still meeting the condition

stipulated in the loan agreement to maintain the debt to equity ratio at no more than 2 times.

2. Report and financial analysis

Unit: Million Baht

Assets Oct-Dec 2008 30 Sep 2008 Difference Difference (%)

Total assets 9,342.14 9,330.55 11.60 0.12%

Total liabilities 3,220.34 3,354.08 (133.74) (3.99%)

Shareholders� equity 6,121.80 5,976.47 145.33 2.43%


2.1 Assets Analysis

As of 31 December 2008, the total assets of the Company and its subsidiaries were 9,342.14 million Baht,

increasing by 11.60 million Baht when compared to assets as of 31 September 2008. The increase was from the

normal business operations of the Company and its subsidiaries, such as the net investment in assets, i.e. short-term

investment in government Repo. Short-term investment in promissory notes increased by 116.07 million Baht and

assets under the concession contracts and deferred concession rights increased by 22.11 million Baht. Cash

decreased by 68.13 million Baht and the net value of property, plant and equipment dropped by 47.26 million Baht

due to the depreciation of the raw water pumping system and the Head Office building, as the depreciation of the

latter was computed from the period starting in March 2008.

2.2 Debt analysis

As of 31 December 2008 the total liabilities of the Company and its subsidiaries were 3,220.34 million Baht,

a decrease of 133.74 million Baht as of 31 September 2007. The 2,500 million Baht 7 � year loan from a commercial

bank accounted for most of the debt, which decreased after the 471.40 million Baht repayment on the due date.

Current liabilities were 928.32 million Baht, increased by 184.85 million Baht.

2.3 Analysis of shareholders� equity

As of 31 December 2008, shareholders equity was 6,121.80 million Baht, which included minority interests

of 2.22 million Baht. The shareholders equity increased by 145.33 million Baht from 31 September 2007 because the

inappropriate retained earnings increased by 146 million Baht from the net profit.

3. Cash flow report and analysis

Cash and cash equivalents of the Company and its subsidiaries as of 31 December 2008 amounted to

102.07 million Baht, decreased by 68.13 million Baht from the beginning of the fiscal year. Details on sources and

uses of cash are given below.

- Cash flow from operating activities in the amount of 260.49 million Baht was from the increase in the net

income from October 2008 to December 2008 that was adjusted for non-cash items such as depreciation

and amortization of about 85.21 million Baht, and taking into account changes in operating assets and

liabilities such as the decrease in other current assets.

- The net cash flow used in investment activities was 154.30 million Baht. Of this amount 25.10 million Baht

was spent in the transmission pipe laying project. The net short-term investment decreased by 116.07

million Baht.

- Cash flow used in financing activities was 174.31 million Baht, mostly from payment of a long term loan from

a commercial bank in the amount of 161.43 million Baht.


Good Corporate Governance

The Company recognizes and

realizes the importance of good corporate

governance as it is a mean to achieve the

Company goal, which is to offer maximum value

to its shareholders. The Company�s Principles

of Good Corporate Governance are meant to

be put into practice by its personnel at all levels,

from the Company�s directors to Management,

employees, associates, and contractor�s

employees to ensure �transparency, honesty,

accountability and competitiveness� in its

business operation.

1. Corporate Governance Policy

The Board of Directors together with Management defines the Company�s vision, mission and policies with

consideration given to the business parameters and the Principles of Good Corporate Governance, to ensure the

continued development of the Company�s excellent business practices. These Principles of Good Corporate

Governance were last reviewed on the parts of the Company�s vision and mission in October to be the most appropriate

and up to date. The Company�s personnel must understand these principles and consistently comply with the

policies. The Company also posts its codes of conduct on the Company�s website under the heading �Principles of

Good Corporate Governance�.

2. Shareholders Rights

The Company disclosed on the website of the Stock Exchange of Thailand a resolution of the Board of

Directors� meeting No. 20/2008 on 22 December 2008 to convene the 2008 Ordinary General Meeting of Shareholders

on 29 January 2008. Invitations to attend the meeting were sent more than 14 days in advance, with complete and

clear details on the registration time, the schedules of the meetings, and the agenda of the meetings to help shareholders

gain a thorough understanding of their rights and benefits, and to exercise appropriate judgments in voting. Moreover,

the Company has made a continued effort to offer more alternatives to shareholders by allowing independent directors

to be their proxies in the event that shareholders cannot attend the meeting.

To comply with the 2006 Principles of Good Corporate Governance for Listed Companies, the Company has

granted the right to the minority of shareholders who hold fully paid up shares of 0.1 to 5% of the total sold shares to

propose items to be included on the agenda and to nominate candidates for directorship in advance via the Company�s

website.


3. Stakeholders� Rights

The Company�s business philosophy emphasizes accountability and best practice that hold confidence of

stakeholders. These include:

(1) Accountability towards shareholders, by giving consideration to investments that yield appropriate and

fair returns and maintaining stable financial status for the purpose of viability and growth.

(2) Accountability towards clients, by managing and developing water resources and products and providing

quality services that give clients maximum satisfaction.

(3) Accountability towards all employees by respecting their lawful rights, providing a good and safe working

environment, and fair employment conditions that truly reflect the market situation, and by promoting

the use of human resources at their full potential.

(4) Accountability towards parties having business relationships with the Company by developing

relationships that will enable mutual maximum benefits with contractors, suppliers, and joint-investors,

under the concept of good corporate governance.

(5) Accountability towards society and the environment, by carrying out business activities with social

responsibility. The Company respects and complies with relevant laws and regulations, to avoid any

impacts that will lead to loss of life or property of personnel, as well as the community and the environment.

4. Shareholders Meeting

In the Annual Ordinary General Shareholders Meeting held

on 29 January 2009, nine directors attended the meeting including

the Chairman of the Board, the Chairman of the Good Corporate

Governance Committee, the Chairman of the Audit Committee, the

Chairman of the Management and Investment Committee, the

Chairman of the Nomination Committee and the Chairman of the

Remuneration Committee. For each item on the agenda, the Chairman

of the Board, who chaired the Meeting, allowed shareholders to equally

exercise their rights to audit the Company�s business operations, make

inquiries and express their views and offer suggestions. The result of

the votes on each item on the agenda was reported to the shareholders

before the Meeting was over. In the minutes of the Shareholders

Meeting the resolutions passed were clearly recorded and the official

results on the votes officially indicated, showing the votes for, against

and abstentions for each item.


The Company has followed the framework of the Shareholders Meeting Quality Assessment Project. For

shareholders� convenience, the barcode system has been used for registration and the E-voting Program was used

for vote counting through arrangements with Thailand Securities Depository Co., Ltd. (TSD). The bar code system for

vote counting was also used at the 2008 Annual Ordinary General Shareholders Meeting. In this meeting, it was the

Company�s policy that all shareholders received complete and adequate information for their decision making.

Opportunities were given to all shareholders to equally exercise their rights to make inquiries, express their views and

offer suggestions regarding the Company�s operations. Those who were not able to personally attend the meetings

were allowed to vote by proxies.

5. Leadership and Vision

The Board of Directors play very important role in defining the Company�s vision, policies, and strategic

plans, by setting a long-term corporate plan every three years. Each year, the Company�s Management proposes

operationstrategies and activities to the members of the Management and Investment Committee and the Board of

Directors respectively for their consideration, comments and approval of action plans, including the annual expenditure

budget. In addition, Management reports on the progress of the annual action plans and significant obstacles during

the quarterly meetings of the Audit Committee and monthly meetings of the Board of Directors as well as presenting

the Boards any investment projects of over 200 million Baht in capital.

6. Conflict of Interest

Connected transactions between the Company and other companies within the group or other interested

parties will go through approval procedures that are correct and accurate, by using the same pricing structure and

conditions as those applied to other trading partners of the Company. Details on connected transactions are disclosed

in the Annual Report and the Form 56-1.

In addition, at every monthly Board Meeting, the Board of Directors and Management regularly require

reports on the securities holding of members of the Board and the Management. In the fiscal year 2008 there were

connected transactions that had to be reported in the interest of the Company. The Company therefore followed the

direction of the Stock Exchange of Thailand under which concerned director for each transaction was not allowed to

approve such transaction. The Company meticulously disclosed its connected transactions.

7. Corporate Ethics

In addition to the implementation of the �Principles of Good Corporate Governance of Eastern Management

and Development of Water Resources Company�, the Company has also prepared the �Board of Directors Manual�,

which was declared effective on 17 August 2006 and constantly updated to be timely and appropriate for the changing

rules, to be used by directors as the standard for compliance with the Principles of Good Corporate Governance. All

the Company�s directors are required to sign in acceptance of the said Manual. The employees� Code of Business

Ethics has also been made effective and training on good corporate governance has been provided for new employees.

A project of knowledge and understanding of good corporate governance has been organized for employees on a

continual basis.


8. Balance of Power by Independent Directors

As of 31 December 2008, there were 11 members on the Board of Directors comprising:

1 Executive director 1 person

5 Non-executive directors 6 persons

5 Independent directors 4 person

9. Centralization and Decentralization of Power

The Board of Directors focuses on transparency in business operations, decentralization of decision making,

and division of authority in reviewing and approving various matters. The Company Chairman must not be the same

person as the President & CEO. Members of the Audit Committee do not have the rights to sign any document that

will legally bind the Company and do not have monetary oversight in the finance and management of the Company

and its affiliated companies.

10. Remunerations of Directors and Management

Remunerations of directors and executives follow the principles and policies defined by the Board of Directors.

The Remuneration Committee considers and proposes suitable remunerations to the Board of Directors and to

shareholders (on behalf of Directors� remunerations) for consideration and approval. Remunerations of directors and

Management in 2008 (October � December 2008) are summarized below.

2008 Directors and Management�s Remunerations (quarterly)

Directors� remunerations during 1 October 2008 � 31 December 2008

Director�s Committee Director�s

Names of Directors Allowance Member�s Remunerations

(Baht) Allowance (Baht) (Baht)

1 Mr. Utid Tamwatin Chairman of the Board 25,000 10,000 112,500

2 Mr. Kanoksakdi Bhinsaeng Director 20,000 30,000 90,000

3 Pol. Gen. Ajiravid Subarnbhesaj Director 30,000 50,000 90,000

4 Pol. Lt. Gen. Somyot Poompanmoung Director 30,000 50,000 90,000

5 Pol. Maj. Gen. Pimol Sinthunava Director 30,000 80,000 90,000

6 Mr. Chakarn Saengruksawong Director 20,000 20,000 90,000

7 Mr. Nattachak Pattamasingh Na Ayuthaya Director 30,000 40,000 90,000

8 Mrs. Monta Pranootnorapal Director 30,000 30,000 90,000

9 Mr. Rasda Pongpaew (1)

Director 30,000 40,000 90,000

10 Pongpaew Pongpaew Director 30,000 50,000 90,000

11 Pongpaew Pongpaew Director 30,000 30,000 90,000

Nine Executive Director and Executive Members 5,457,876

Notes: (1) The remunerations of a director, Mr. Rasda Pongpaew, in the amount of 160,000 Baht was based on the

regulations of Egcom Tara Company Limited (EGCO), whereby a director�s remunerations from directorship

in other companies are transferred to the account of the Thai Forest Conservation Foundation, a foundation

established with the objectives to raise awareness about and networking for conservation of forests and

water resources.


10.1 Management�s Remunerations

Ten members of the Management Executives received benefits for their 2008 performance (October

�December 2008) in the form of salaries and remunerations in the amount of 5,307,876 Baht.

10.2 Directors� Securities Holding

As of 31 December 2008, no director held the Company�s securities. Nine executive members held

1,534,580 ordinary shares.

10.3 Contributions to Provident Fund

In the fiscal year 2008 ending at 31 December 2008, the Company�s contributions to the Provident

Fund for 10 executive members in the total of 393,630.30 Baht.

11. Board of Directors Meetings

The Board of Directors� monthly meetings are scheduled during the third or fourth week of the month. The

President, serving as the Secretary to the Board of Directors, sends an invitation together with the Meeting Agenda

and relevant documents in advance for directors to review the information before attending the meeting. In the fiscal

year 2008 (October - December 2008) 3 meetings were held and attended by members of the Board. Details on

individual director�s attendance are given below.

No. of Meetings

Names of Directors Attended/No. of

Meetings Held

1 Mr. Utid Tamwatin Chairman 2/3

2 Mr. Kanoksakdi Bhinsaeng Director 2/3

3 Pol. Gen. Ajiravid Subarnbhesaj Director 3/3

4 Pol. Lt. Gen. Somyot Poompanmoung Director 3/3

5 Pol. Maj. Gen. Pimol Sinthunava Director 3/3

6 Mr. Chakarn Saengruksawong Director 2/3

7 Mr. Nattachak Pattamasingh Na Ayuthaya Director 3/3

8 Mrs. Monta Pranootnorapal Director 3/3

9 Mr. Rasda Pongpaew Director 3/3

10 Mr. Chanchai Tontisirin Director 3/3

11 Mr. Praphant Asava-aree Director 3/3

12. Committees

The Board of Directors has established committees comprising members with appropriate expertise to

review and scrutinize the works assigned to them to initially ensure their accuracy and clarity in line with the Company�s

mission and policies before presenting them to the Board of Directors for approval, or ratification, or further

recommendations, whichever the case may be. Details on the committees established by the Board of Directors and

their meeting attendance records during the fiscal year 2008 (October � December 2008 accounting period) are

listed below.


12.1 As of 31 December 2008, the Audit Committee comprised 3 independent directors and 2 advisors whose

names are listed below.

No. Name-Surname Position No. of Meetings Attended/No. of Meetings Held

1. Pol. Gen. Ajiravid Subarnbhesaj Chairman 4/4

2. Pol. Maj. Gen. Pimol Sinthunava Member 4/4

3. Mr. Chanchai Tontisirin Member 4/4

4. Mrs. Leena Charoensri Advisor to the Audit Committee 4/4

5 Mr. Chakkrit Parapuntakul Advisor to the Audit Committee 3/4

The Audit Committee is responsible mainly for revising and verifying the accuracy and credibility of the

Company�s financial statements to ensure that they meet international standards before submitting them to the Board

of Directors. The Committee reviews and gives recommendations regarding evaluation of the efficiency and

effectiveness of the Company�s internal control system, compliance with laws, rules, and regulations, as well as

ensuring the effectiveness and independence of the Audit Committee�s administrative process. The Committee

places emphasis on transparent guidelines and clear distinction among the Board of Directors, the Internal Audit

Department, the Management, and the External Auditor. Other functions include giving initial approval to the

appointments of the External Auditors and determining his/her remunerations to be proposed to the Board of Directors

and shareholders.

12.2 As of 31 December 2008, the Executive and Investment Committee comprised 3 directors whose



1. Mr. Kanoksakdi Bhinsaeng Chairman 2/2

2. Pol. Lt. Gen. Somyot Poompanmoung Member 2/2

3. Mr. Praphant Asava-aree Member 2/2

The Executive and Investment Committee are assigned by the Board of Directors to play the key role in

supervising the Company�s operations to have the efficiency and business strength in line with the policy of the Board

of Directors. The Committee reviews and screen the various matters before presenting them to the Board of Directors,

supports the work of the Management team to achieve the Company�s objectives, policies, strategies, and framework

for the Company�s short-term and long-term investments in core and related businesses. Other functions include reviewing

matters requiring approval of the Board of Directors with respect to procurement in the amounts exceeding the

authority of the President & CEO. In addition, the Committee reviews projects� capital that call for the establishment

of processes and criteria as well as project financial analysis in accordance with the Company�s work plans before

presenting the matters to the Board of Directors for consideration.

12.3 As of 31 December 2008, the Corporate Governance Committee comprised 3 directors whose



1. Mr. Utid Tamwatin Chairman 1/1

2. Pol. Maj. Gen. Pimol Sinthunava Member 1/1

3. Mr. Rasda Pongpaew Member 1/1

Note: (1) Mr. Utid Tamwatin resigned from the Corporate Governance Committee on 29 January 2009.


The Corporate Governance Committee has duty to ensure that the Company has complied with important

elements of the corporate governance process that is effective and in line with the requirements of the Stock Exchange

of Thailand. The Committee also ensure that the Principles of Good Corporate Governance are implemented with

emphasis on continuous development and best practice and that evaluation of compliance with the Company�s

policies are to be conducted periodically.

12.4 As of 31 December 2008, the Risk Management Committee comprised 5 directors whose names

are listed below.


1 Mrs. Monta Pranootnorapal Chairman 1/1

2. Pol. Lt. Gen. Somyot Poompanmoung Member 1/1

3. Mr. Chakarn Saengruksawong Member 1/1

4. Mr. Chanchai Tontisirin Member 1/1

5. Mr. Praphant Asava-aree Member 1/1

The Risk Management Committee is responsible mainly for overseeing and reviewing risk management

policy, standard practice, strategies, and overall risk assessment. It also reviews adequacy of policy of the risk

management system, the system�s efficiency, and compliance with the policy, to ensure that the risk management

strategies are implemented appropriately.

12.5 As of 31 December 2008, the Nominating Committee comprised 3 directors whose names are

listed below.


1. Pol. Maj. Gen. Pimol Sinthunava Chairman 2/2

2. Mr. Nattachak Pattamasingh Na Ayuthaya Member 1/2

3. Mr. Chakarn Saengruksawong Member 1/2

The Nominating Committee consists of members appointed by the Board of Directors as the most suitable

persons to be considered for appointments as directors of the Company and affiliated companies and the President

& CEO. The Committee also gives opinions regarding to the management structure of the Board of Directors and

other committees.

12.6 As of 31 December 2008, the Remuneration Committee comprised 3 directors whose names are

listed below.


1. Mr. Nattachak Pattamasingh Na Ayuthaya Chairman 1/1

2. Pol. Gen. Ajiravid Subarnbhesaj Member 1/1

3. Mr. Kanoksakdi Bhinsaeng Member 1/1

The Remuneration Committee�s main function is to formulate policy concerning remunerations, other fringe

benefits and to set up an evaluation guideline of the performance of the Board of Directors, affiliated companies, and

the Company�s executives. The Committee is also required to disclose the policies regarding remunerations and

relevant details and prepare reports in the required format.


12.7 As of 31 December 2008, the Performance Criteria and Evaluation Committee comprised 4 directors

whose names are listed below.


1. Pol. Lt. Gen. Somyot Poompanmoung Chairman 2/2

2. Mr. Nattachak Pattamasingh Na Ayuthaya Director 1/2

3. Mrs. Monta Pranootnorapal Director 2/2

4 Mr. Rasda Pongpaew Director 2/2

The Board of Directors has established the Performance Criteria and Evaluation Committee to formulate

performance criteria and evaluate the Company�s annual Corporate KPIs, which requires quarterly follow�ups.

The Board of Directors has regularly and continuously performed self-evaluation every year in order to

review the accomplishments as well as problems and obstacle experience over the year. The results are used for

improvement of work efficiency, in accordance with the Principles of Good Corporate Governance. In 2008, the

average score of all directors was 4.69 out of 5. Risk Management and Internal Control received the highest average

scores of 5 as a result of the Company�s adequate and appropriate risk management system. Performance of duties

was concerned by the Chairman of the Board, the clarity in the separation of the role of the Board of Directors and the

Management as well as the equity of shareholders was rated 4.89 as the second place. The Company was ranked

third with the score of 4.81, gained on time management for performance of duties and their ability to voice their views

openly and straightforward without being dominated by anyone.

During the meetings, when connected transactions� are considered, interested directors will abstain from

comments and votes.

The Board of Directors evaluated the performance of the CEO, using the KPIs of the consortium and the

CEO evaluation form developed by the Company�s Manual for Competency Evaluation of the Management and

Employees and guidelines from other listed companies. The two-dimensional evaluation criteria comprised Core

Competency and Managerial Competency.

13. Selection of Directors and Management

The Board of Directors of the Company appoints representatives as Nominating Committee members to find

the most suitable persons to be appointed as directors and President & CEO on a case by case basis. The Board of

Directors has passed a resolution to grant the right to minority shareholders to nominate a person or persons to the

Nominating Committees for preliminary review before submitting the list of nominee(s) to the Board of Directors for

consideration. The Board proposes the candidates to be selected by the shareholders during the Annual General

Shareholders Meeting. According to the Company�s Articles of Association, the Company�s Board of Directors shall

consist of at least five but not more than eleven directors elected by the Shareholders. The directors shall then elect

among themselves the Chairman of the Board and may elect the Vice Chairman, the President & CEO, and holders of

other positions as they deem appropriate. No less than half of the Company directors shall be domiciled in the

Kingdom of Thailand. Election and appointment of directors shall be carried out by the Shareholders Meeting in

accordance with the following criteria and procedure.


1. Each shareholder shall have one vote for each share held.

2. Each shareholder shall cast all of his/her eligible votes as stipulated in Item 1 to elect one or several persons

as a director or directors but the votes may not be divided among candidates.

3. The candidates shall be elected in descending order of the votes received starting from the person receiving

the highest votes until all the positions of directors are filled, or until the number of directors to be elected in

that Meeting is fulfilled. In case of a tie vote that will result in the number of elected candidates exceeding

the total number of directors or the number of the vacant positions to be filled in that Meeting, the Chairman

shall have the deciding vote.

4. Members of the Board of Directors shall have the required qualifications and do not have prohibited

characteristics under the law governing public limited companies and the Securities and Exchange Act.

5. Independent directors shall have all the qualifications as defined by the Company in accordance with the

regulations of the Securities and Exchange Commission (SEC).

A shareholders meeting may pass a resolution to remove any director before the end of the term by a vote of

no less than three fourths of all the shareholders eligible to vote who are present at the meeting, and the number of

shares represented shall be no less than half of the number of shares held by the eligible shareholders.

In the fiscal year 2008 (October � December 2008) , five members of the Board of Directors represented

major shareholders: three from the Provincial Waterworks Authority, one from Electricity Generating Public Company

Limited, and one from the Industrial Estate Authority of Thailand.

14. Internal Information Control

The Company�s guideline concerning the use of internal information by the Company�s directors, management

and employees are set in the Principles of Good Corporate Governance and can be summarized as follows:

1. Directors, Management, employees, supporting staff, and outsourced employees have the duty to accept

legal and ethical obligations to safeguard and not to disclose, the Company�s information and documents

that are classified as confidential or trade secrets which will have critical impact on the Company�s success

and stability.

2. The confidential trade information shall be well protected and not leak to outsiders. Internal information shall

be shared and used solely under the designated duties and responsibilities.

3. The release of information to outsiders shall require the approval of the Company�s President & CEO. If the

information is related to joint-venture partners, their approval shall also be required. The functions for

disseminating the information to the public are the Marketing and Public Affairs Communication Department

and the Investors Relations section. The Public Affairs officers are also in charge of disseminating news and

information to other employees.

In addition, the Company must inform the Directors and Management of their responsibility to report the

acquisition or sales of the Company�s securities exceeding 5% of the total Company�s sold, and their securities

holding, to the Securities and Exchange Commission in accordance with the prescribed format and procedure.

Such information is also required to be reported to the Board of Directors in every meeting.


15. Relationships with Investors

The Company realizes that the internal information is vital to the decisions of investors, analysts, and interest

groups. Thus it gives significance to accurate, complete, transparent and timely disclosure of information in line with

the criteria set by the Office of Securities and Exchange Commission and the Stock Exchange of Thailand. Moreover,

the information, both in Thai and English, has been disseminated. The information, must be regularly updated,

includes the financial statements, the report on the Company�s performance, the Management Discussion and Analysis,

the report on information disclosed to the SET via the SET�s website (www.set.or.th) and the information posted on the

Company�s website (www.eastwater.com).

The Investor Relations Unit (02-272-1600, Extension 2525 or [email protected]) has been established to

represent the Company in communicating and providing information on the affairs and activities of the Company to

investors, shareholders, analysts, and the general public. The functions of this unit follow the annual investor relations

plans to present the accomplishments of the Company in the following formats:

• Analyst meetings

• Investor Quarterly meetings

• Teleconference and conference calls for investors overseas

• Meet the Investors activities organized jointly with the Stock Exchange on the �Opportunity Day�.

• Company visits to meet with executives and inquire about the management practice and the progress

of various projects.

• Site Visits

Moreover, interested parties may subscribe to the Company�s newsletter (E-Newsletters) via the Company�s

website. The Investor Relations staff gather comments and recommendations from investors, analysts and relevant

parties which will be presented to the Management for consideration and appropriate improvement in line with the

Company�s policies.


Definition of Independent Director

1. An independent director must hold less than 1 percent of all of the shares with voting rights in the Company, any

of its subsidiaries, an affiliated company, or anyone who may have a conflict of interest with the Company (including

the persons listed under Section 258 of the Securities and Exchange Act, No. 4, B.E. 2535).

2. An independent director is not related by blood or by law as a parent, a spouse, a sibling, a child, or a spouse of

a child of a Company executive member, a major shareholder, a person in control, or a person to be nominated

as an executive member of a person in control of the Company or its subsidiaries.

3. An independent director does not take part in the management of the Company, a subsidiary, an affiliated

company, a subsidiary of the same tier or a juristic person who may have a conflict of interest with the Company,

at present and during the two years period prior to the appointment as an independent director.

4. An independent director does not have any business relationship with the Company. An auditor may not be

nominated an independent director. For other professional service providers such a as a legal advisor, a financial

advisor, an asset appraiser, the value involved must not exceed 2 million Baht per year. Details of relationship

must be as defined by the SEC as follows:

A. Nature of relationship

Professional Service Relationship

1. Auditors and other professional service providers such as legal advisors, financial advisors, asset

appraisers.

2. Significant level of non-independence

- Auditor: Prohibited under any circumstance

- Others: value not exceeding 2 million Baht per year.

Trade/Business Relationship (Use the same SET�s guideline for connected transaction)

- Nature of relationship: Covering all types of business items, i.e. normal transactions; renting/renting

out immovable property; items relating to service assets; and items about providing or receiving

financial assistance.

- Significant level of non-independence: Items value exceeding or equal to 20 million Baht, or

exceeding or equal to 3% of net tangible assets, whichever is lower.

B. In the case of the relationship under A. with a juristic person, major shareholders and directors (except

independent directors/ audit committee members) are deemed non-independent.

C. Relationship under A and B is prohibited at present and two years prior to the appointment.


The company gives importance to the internal control system, with

emphasis on adequate and appropriate control that contributes to business

efficiency in terms of finance, operations, risk management and monitoring.

The principles and the essence of the assessment of the adequacy of the

internal control system can be viewed from five aspects.

1. Organization and Environment

The Board of Directors plays an important role in defining the vision,

policy and strategies of the Company by setting long-term business plans,

offering opinions, and approving strategies, activities, and annual action plans.

In addition, the Board of Directors has also implemented the application of

Key Performance Indicators to assess the performance in all functions of the

organizations to ensure that performance monitoring and assessment are

carried out fairly, efficiently and systematically in line with the organization�s

goals and objectives.

The policy for internal management focuses on having the power

balancing mechanism among the Board of Directors, the management and

shareholders. Members of the Board of Directors include at least three

independent or external directors so that there will be a balance between

members who may have conflict to interest with the Company and independent

or external members. The Company communicates with investors regularly

disseminate the Company�s information to the public. Committees have been prepared review and pass a decision

on important issues to protect shareholders� interest. In addition, the Company has implemented the corporate

governance of Eastern Water Resources Development and Management Public Company Limited, the Company

Code of Conduct, and Employee�s Business Ethics, to be observed by its personnel of all levels, with emphasis on

honesty and business ethics.

2. Risk Management

The Enterprise Risk Management concept has been applied by conducting risk assessments by various

processes and risk factor analysis. The current control measures and the additional control will be continuously

supported employees from every department in risk assessment and risk management. Risk management action

plans have been drawn up to increase the efficiency of the company�s internal control systems. It is also used for

controlling the risks at an acceptable level that corresponds with the changes in the circumstances and the risk

factors themselves. A specific work unit has been assigned to monitor the implementation of the Risk Management

Project, evaluate the result, and prepare a report thereof to be presented to the Risk Management Committee and the

Board of Directors for reviews and decision making in order to ensure that the Company�s risk management process

is dynamic, consistent, and uninterrupted.

2008 Assessment of Adequacy of InternalControl Systems


3. Control of the Management�s Performance

The scope of the authorities and the amount of money allowed to be

spent by the Management have been clearly defined to be consistent with

the principles of good internal control regarding division of duties and

verification of procedure. Functions involve the authority to approve book-

keeping and information, which are separated from property management.

Moreover, the Company has been granted ISO 9001:2001 and ISO

14001:2004 certification. Work Procedures and Work Instructions have been

developed to be used as reference to ensure the standards of work. Training

has been organized so that employees could understand and perform their

work according to the standards.

In the case of connected transactions between the Company and

its associated companies including companies and parties with common

interest, these items are scrutinized approved accurately, transparently under

the same conditions as those applied to other trade partners. Details on such

transactions are already presented in the Auditor�s Notes to the Financial

Statements.

The Company has continuously and regularly supervised the

operations of its associated companies. Their progress and business

performance have been reported to the Board of Directors by a specific work

unit which has been assigned, as well as following up on feedbacks to ensure

that they are consistent with the resolutions of the Board of Directors. In addition, it coordinates the policies to ensure

that every company within the group is operating its business along the direction that is consistent with the policies of

the Board of Directors. A compliance unit has been set up to assure that the Company�s business activities comply

with relevant laws, rules and regulations.

4. Information and Communication System

The Company has provided adequate amount of important information for the Board�s decision making. The

information is presented to the Board�s members in advance for their preliminary review. On the agenda of every

Board meeting and the meeting of sub-committees are on matters from the previous meetings and the resolutions to

be used as references, together with related legal requirements (if any), so that the Board will acknowledge the

comprehensive information for their decision making so they can provide recommendation that will lead to an

on-going improvement and development of the Company. The facts will be specified in regards to the progress of

action taken by the Management in accordance with comments from the committees. Such comments include

reasons, business sensitivity analysis, and anticipated obstacles or impact. Recommendations often include issues

for consideration and/or proposals of options for discussion/consideration. In submitting every minutes of the meeting,

the Company will inform individual director that they can indicate their intention to make an amendment to the Minutes

within approximately five days after receiving the minutes.


Moreover, the Company has been continuously applied and developed the use of information system and

internal data base, so that employees at all level can have access to information related to their work at an appropriate

level. This can be achieved through the policy and the system that clearly spells out the level of accessibility in order

to use such data and information to perform their work.

5. Monitoring System

The Company follows up on the goals indicated in the long-term business plan and the annual action plans.

Key Performance Indicators (KPIs) of the progress and result of the performance have been regularly reported to the

meeting of the Board of Directors every quarter. The objective is to review on matters and define guidelines for

improvement and corrections of any inefficiency in accordance with the changing situations. The emphasis is on

taking timely corrective action.

The Company gives great importance to internal audit, emphasizing the value added for the organization.

Internal risk assessment data has been used in the risk-based audit planning and a consultant has been employed

for co-sourcing with the Audit Office every year. This is to convince the Board of Directors and the Management in the

efficiency and effectiveness of the Company�s internal control system. The accuracy and credibility of data and

information, i.e., accounting information and information used for business operation has been ensured that they are

is in compliance with the law, rules, and regulations relating to the Company. In addition, other performance monitoring

processes are implemented by means of the Company�s Internal Quality and Environment Monitoring System in

accordance with ISO 9001:2000 and ISO 14001:2004.

Based on the key elements of the Assessment of the Adequacy of the Internal Systems as mentioned above,

the Company is confident that its internal control systems are adequate and suitable for its business, contribute to

transparency in work execution and enhance the effectiveness of sustainable business operations.


In the three-month period (1 October 2008 � 31 December 2008), the Audit Committee held four meetings with

the Management of the Company and its subsidiaries, the external auditor, and the internal auditor. Inquiries were

made and explanations were satisfactorily given from the parties concerned. Significant details of the Company�s

performance are given below.

1. Verification of financial statements and connected transactions

The financial statements of the 3-month period (from 1 October 2008 to 31 December 2008) were reviewed

and verified. Inquiries were made to the external auditor and the internal auditor and explanations were given by

Management. Emphasis was placed on information disclosure and adequate provisioning for projects implemented

in line with the government policies and the Group�s owned projects.

During this period, there was no significant connected transactions other than those normal transactions with major

shareholders or associated companies. Information on these transactions was sufficiently disclosed in the financial

statements and notes to the financial statements.

2. Supervision of the internal control system and compliance with relevant law, rules, and regulations

The three-year risk-based internal audit plan (2008 � 2010) and the internal audit plan for the fiscal year 2009

were reviewed and approved. Such plans apply to all work functions in the companies within the Group, with

consideration given to additional information from four sources as follows:

• Result of the 2009 Risk Assessment from the Management

• Additional interviews of members of the Management on the needs or issues of concern

• Comments from the Auditor

• Analysis of the Company�s financial statements.

The Committee acknowledged on the progress of the evaluation of the efficiency and effectiveness of the

internal control during this three-month period, which was being implemented jointly by the Internal Audit Department

and an internal audit consultancy company. Compliance with regulations and obligations with third party and relevant

law was verified, both for the Company and its subsidiaries. Action taken by the Management for recommended

improvement/rectification was also monitored on a continuous basis.

3. Supervision of the Internal Audit Department

The action plans, the annual budget, the human resource development plans, and the man power structure

of the Internal Audit Department will be reviewed and approved. Support is given to the Internal Audit Department to

perform its work independently and more efficiently through the restructure of the Internal Audit Department. As a

result, approval will be granted for the Internal Audit Department and divided into two sections; Operational Auditing

and Accounting and Financial Auditing. In 2008, the Committee approved auditing co-sourcing partnership with

Deloitte Touche Tohmatsu Jaiyos Company Limited. This arrangement would enhance experience sharing and

issues detected from the audit would be addressed to constantly add value to the Company.

Report of the Audit Committee for the Three-monthPeriod (1 October 2008– 31 December 2008)


4. Supervision of Company Auditor�s performance

The Audit Committee, in the Meeting No.9/2008, reviewed the selection of the Company Auditor and the

auditing fees. Qualifications of the auditors had been checked to ensure compliancy with the Notification of the

Office of the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand, and to ascertain that

the auditors do not have any relationship with the Company and its subsidiaries. The Committee then proposed to the

Board of Directors that Mrs. Saifon Inkaew, License No. 4434 or Ms. Rattana Jala, License No. 3734 or Miss Kamoltip

Lertwitworathep, License No. 4377 of Ernst & Young Office Limited, the current Company�s Auditor be reappointed

the Company auditor for the fiscal year 2008. The proposal will be subsequently presented to the General Shareholders�

Meeting for approval.

As Mrs. Saifon Inkaew, License No. 4434, had audited and presented opinions on the Company�s financial

statements for five consecutive years, the Audit Committee proposed to the Board of Directors that in the fiscal year

2009 (January 2009 � December 2009) the position of the Company Auditor be rotated to Ms. Rattana Jala, License

No. 3734 or Miss Kamoltip Lertwitworathep, License No. 4377, or Mr. Wichart Loketkrawee, License No. 4451.

The Auditor�s fees of the Company and it subsidiaries for the fiscal year 2008 to 2009 following negotiations

with the Auditor since 2008 are summarized below.

• Auditor�s fee for the Group�s consolidated financial statements for the 3-month period (October 2008 �

December 2008) was 1,076,000 Baht. Of this amount, 348,000 Baht was the fee for the Company (EW).

• Auditor�s fee for the Group�s consolidated financial statements for the fiscal year 2009 (January 2009 �

December 2009) was set as 3,310,000 Baht. Of this amount, 1,110,000 Baht was for the fee for the

Company (EW).

In summary, the Audit Committee has duly performed all of its duties as stated in the Audit Committee�s

Charter, which have been approved by the Board of Directors and comply with the SET�s regulations. The Audit

Committee agrees with the Company Auditor�s opinion that the Company�s financial statements are correct in

accordance with Thailand�s Generally Accepted Accounting Principles and that connected transactions have been

disclosed completely, accurately, and in details. Moreover, the Company has implemented an appropriate and

effective internal audit control system and throughout the 3-month period (1 October � 31 December 2008) no significant

issues regarding failure to comply with relevant regulations, obligations and laws have been found. Improvement has

also been made to in the Company�s operations to ensure consistency and appropriateness to the changing business

environment.

(Pol. Gen. Ajiravid Subarnbhesaj)

Chairman of the Audit Committee


Good Corporate GovernanceReport from the Corporate Governance Committee

(1 October 2008 � 31 December 2008)

The Eastern Water Resources Development and Management PLC has always given great importance to

good corporate governance, believing that it is a key element in running the business for the maximum benefits of

shareholders. The Board of Directors recognizes the significance of good corporate governance that will contribute

to the company�s sustainable growth and strengthen all stakeholders� confidence by adhering to the principle of

�transparency, honesty and competitiveness� in business operations. The Company has implemented the Principles

of Good Corporate Governance, the Board of Director� Manual, and the Employees Code of Business Ethics based

on the 15 principles of good corporate governance of the Stock Exchange of Thailand. These principles of good

governance have been reviewed to be more appropriate, up to date, and in compliance with relevant laws and

regulations. Details are accessible on the Company�s website under the heading �Good Corporate Governance.�

The Corporate Governance Committee during the fiscal year 2008 (October-December 2008) has continuously

given importance to the rights of minority shareholders to propose matters to be considered and to nominate candidates

for directorship in advance of the shareholders� meeting. The Committee has accepted the shareholders comments

on the qualifications of sub-committee members and would revise the criteria as appropriate. Other recommendations,

such as that on the formulation of the policy on remunerations of directors, have been accepted for considerations

and further action will be taken in 2009.

The Corporate Governance Committee reaffirms its intention to oversee the Company�s affairs in

order to maintain its value in a sustainable manner.

Mr. Utid Tamwatin

Chairman of the Corporate Governance Committee


Report on the Board of Directors’ Responsibility

towards the Financial Statements

The Board of Directors had financial statements prepared to show the financial status and business

performance of the Company for the period from 1 October 2008 to 31 December 2008 in accordance with the Public

Limited Company Act, B.E. 2535 (1992). The Company�s Directors acknowledge that in their capacity as directors of

a listed company in the Stock Exchange of Thailand, they have responsibility for the Company�s financial statements

including the financial information appearing in the Annual Report for the period from 1 October 2008 to 31 December

2008.

In this regard, the Board of Directors has appointed the Audit Committee consisting of independent, non-

executive directors to be in charge of the quality of financial statements and verification of the effectiveness of the

internal control systems of the Company and its subsidiaries, to be reasonably confident that financial and accounting

information is recorded accurately and completely and to ensure that assets have been maintained. The financial

statements also serve as guidelines for the Company and its subsidiaries, providing them with information that can

prevent dishonesty or significant irregularities. The Audit Committee�s opinions for the period from 1 October 2008 to

31 December 2008 are presented in the Report of the Audit Committee in the Annual Report.

In this light, the Board of Directors is of the opinion that the Company has prudently and rationally exercised

its judgment and has used the best forecasting method in preparing the financial statements, under the accounting

policy that is appropriate, consistent, and in compliance with Thailand�s generally accepted accounting standards.

Important information has also been adequately disclosed in the Notes to Financial Statements.

(Mr. Utid Tamwatin) (Mr. Praphant Asava-Aree)

Chairman of the Board of Directors President and CEO


Report of Independent Auditor

To The Shareholders of Eastern Water Resources Development and Management Public Company Limited

I have audited the accompanying consolidated balance sheets of Eastern Water Resources Development and

Management Public Company Limited and its subsidiaries as of 31 December 2008 and 30 September 2008, the

consolidated statements of income, changes in shareholders� equity and cash flows for the period as from 1 October

2008 to 31 December 2008 and for the year ended 30 September 2008, and the separate financial statements of

Eastern Water Resources Development and Management Public Company Limited for the same periods. These

financial statements are the responsibility of the management of the Company and its subsidiaries as to their

correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial

statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used and significant estimates

made by management, as well as evaluating the overall financial statement presentation. I believe that my audits

provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position

of Eastern Water Resources Development and Management Public Company Limited and its subsidiaries and of

Eastern Water Resources Development and Management Public Company Limited as at 31 December 2008 and 30

September 2008 and the results of their operations and cash flows for the period as from 1 October 2008 to 31

December 2008 and for the year ended 30 September 2008 in accordance with generally accepted accounting

principles.

Without qualifying my opinion on the aforementioned financial statements, I draw attention to the matter described in

Note 18 to the financial statements regarding a pipeline connecting project, which is in compliance with a Cabinet

resolution that assigned for the Company to undertake construction and make advance payment on behalf of a

government agency. Cumulative payments up to 31 December 2008 total Baht 642 million and the relevant government

unit is to pay to the Company by gradually offsetting the charges on raw water that the Company will purchase from

that agency each year. The government agency has not yet determined the amount to be withheld from the volumes

of raw water purchased every year. However, the Company�s management believes that the Company will not incur

any loss as a result of entering into this contract and making the advance payments. In addition, the Company�s

management believes that the project would be beneficial and should the government agency decide not to operate

the project itself, the Company would be able to invest in this project by itself, as it would with its other projects, in

order to generate benefits. The Company is in the process of negotiating with the relevant agencies and the outcome

of such negotiations and other related matters had not yet been finalised on the authorisation date of the financial

statements under report.

Saifon Inkaew

Certified Public Accountant (Thailand) No. 4434

Ernst & Young Office Limited

Bangkok: 27 February 2009


Balance SheetsEastern Water Resources Development and Management Public Company Limited and its subsidiaries

As at 31 December 2008 and 30 September 2008

(Unit: Baht)

Consolidated financial statements Separate financial statements

Note 31 December 2008 30 September 2008 31 December 2008 30 September 2008

Assets

Current assets

Cash and cash equivalents 9 102,065,552 170,193,618 55,117,722 128,549,012

Securities purchased under resale agreements 10 261,010,051 85,000,000 261,010,051 85,000,000

Current investments 11 83,584,275 143,521,703 83,584,275 143,521,703

Trade accounts receivable 12

Related parties 8.2 112,615,968 108,763,502 115,881,111 114,755,884

Unrelated parties - net 61,467,355 87,439,397 59,712,159 62,855,553

Trade accounts receivable - net 174,083,323 196,202,899 175,593,270 177,611,437

Unbilled receivables

Related parties 8.2 62,129,014 60,147,229 - -

Unrelated parties 3,843,161 - - -

Total unbilled receivables 65,972,175 60,147,229 - -

Service income receivable - related party 8.2

Billed 27,477,545 16,961,198 - -

Unbilled 22,704,707 10,263,074 - -

Total service income receivable - related party 50,182,252 27,224,272 - -

Short-term loan to an unrelated party - net 13 - 8,800,000 - 8,800,000

Inventories - net 14 10,468,991 18,200,035 167,188 8,228,361

Other current assets

Dividend receivable from related parties 8.2 8,087,954 - 22,112,954 28,050,000

Other receivables - related parties 8.2 6,489 10,919 4,768,602 6,866,856

Input taxes awaiting refund 2,615,779 2,280,821 - -

others 35,072,463 42,712,685 27,252,206 33,094,427

Total other current assets 45,782,685 45,004,425 54,133,762 68,011,283

Total current assets 793,149,304 754,294,181 629,606,268 619,721,796

Non-current assets

Restricted bank deposits 15 9,076,000 9,076,000 9,076,000 9,076,000

Investments in subsidiaries - net 16 - - 514,999,930 514,999,930

Long-term investments 11 85,477,500 85,477,500 85,387,500 85,387,500

Long-term loan to related party 8.2, 8.3 - - 300,000,000 300,000,000

Other receivable 18 642,199,200 642,199,200 642,199,200 642,199,200

Property, plant and equipment - net 19 6,712,684,455 6,759,953,129 6,528,333,204 6,575,139,991

Assets under concession contracts - net 20 390,382,036 381,006,132 - -

Deferred concession rights acquisition costs - net 21 534,246,859 521,515,116 - -

Intangible asset - net 22 160,596,580 162,700,919 - -

Other non-current assets 14,331,386 14,323,897 9,251,303 9,242,712

Total non-current assets 8,548,994,016 8,576,251,893 8,089,247,137 8,136,045,333

Total assets 9,342,143,320 9,330,546,074 8,718,853,405 8,755,767,129

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


Balance Sheets (Continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries


(Unit: Baht)



Liabilities and shareholders� equity

Current liabilities

Bank overdrafts and short-term loans from financial

institutions 23 7,500,000 72,009,842 - 20,009,842

Trade accounts payable

Related parties 8.2 6,997,992 4,114,414 5,999,054 6,083,125

Unrelated parties 60,524,893 68,972,969 8,788,054 8,613,827

Total trade accounts payable 67,522,885 73,087,383 14,787,108 14,696,952

Current portion of long-term liabilities under

finance lease agreements 24 3,559,376 2,964,012 2,039,439 2,008,452

Current portion of long-term loans from

financial institutions 25 495,716,000 420,716,000 450,000,000 375,000,000

Other current liabilities

Accrued expenses 154,154,630 183,691,888 106,529,699 134,714,408

Payable for purchase of fixed assets 25,668,900 16,294,043 7,666,927 10,039,324

Advances received 25,530,754 8,592,927 - -

Accrued interest expenses 10,251,282 801,554 10,168,988 339,041

Corporate income tax payable 138,418,282 92,917,209 119,966,741 80,304,877

Others - related parties 8.2 - 5,114,994 32,316,490 44,571,522

Total other current liabilities 354,023,848 307,412,615 276,648,845 269,969,172

Total current liabilities 928,322,109 876,189,852 743,475,392 681,684,418

Non-current liabilities

Long-term liabilities under finance lease agreements

- net of current portion 24 3,547,744 4,897,818 3,072,577 3,591,983

Long-term loans from financial institutions

- net of current portion 25 2,251,068,000 2,434,997,000 2,050,000,000 2,275,000,000

Retentions payable 37,401,263 37,990,511 25,600,165 24,495,928

Rental guarantees received from related parties 8.2 - - 761,238 761,238

Total non-current liabilities 2,292,017,007 2,477,885,329 2,079,433,980 2,303,849,149

Total liabilities 3,220,339,116 3,354,075,181 2,822,909,372 2,985,533,567


.........................................Chairman ........................................President & CEO

(Mr. Utid Tamwatin) (Mr. Praphant Asava-aree)

Balance Sheets (Continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries


(Unit: Baht)



Shareholders� equity

Share capital

Registered, issued and fully paid-up

1,663,725,149 ordinary shares of Baht 1 each 26 1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149

Share premium 26 2,138,522,279 2,138,522,279 2,138,522,279 2,138,522,279

Assets transferred from customers 28 45,344,716 46,201,078 45,344,716 46,201,078

Retained earnings

Appropriated - statutory reserve 29 166,500,000 166,500,000 166,500,000 166,500,000

Unappropriated 2,105,495,759 1,959,392,299 1,881,851,889 1,755,285,056

Equity attributable to the Company�s shareholders 6,119,587,903 5,974,340,805 5,895,944,033 5,770,233,562

Minority interests - equity attributable to minority

shareholders of subsidiaries 2,216,301 2,130,088 - -

Total shareholders� equity 6,121,804,204 5,976,470,893 5,895,944,033 5,770,233,562

Total liabilities and shareholders� equity 9,342,143,320 9,330,546,074 8,718,853,405 8,755,767,129



Statements of incomeEastern Water Resources Development and Management Public Company Limited and its subsidiaries

For the period as from 1 October 2008 to 31 December 2008 and

for the year ended 30 September 2008

(Unit: Baht)


For the period For the period

as from as from

1 October 2008 to For the year ended 1 October 2008 to For the year ended


Revenues

Sales - raw water 8.1 393,113,532 1,672,600,765 418,924,267 1,752,720,341

Sales - tap water 8.1 144,744,079 541,146,087 50,769,761 185,922,203

Sales - others 8.1 195,389 21,964,344 207,748 2,092,004

Total sales 538,053,000 2,235,711,196 469,901,776 1,940,734,548

Service income 8.1 73,443,136 143,215,424 8,500,634 17,120,727

Interest and dividend income 8.1 19,754,990 44,788,510 23,618,865 88,769,730

Gain on disposal of investment in a subsidiary 17 - 3,478,650 - -

Other income 8.1 3,058,518 10,059,514 2,296,492 3,847,012

Total revenues 634,309,644 2,437,253,294 504,317,767 2,050,472,017

Expenses

Costs of sales - raw water 177,140,624 712,598,816 177,624,681 714,482,327

Costs of sales - tap water 74,154,594 243,919,959 50,512,612 183,946,145

Costs of sales - others 379,566 19,985,349 375,407 2,321,827

Total costs of sales 8.1 251,674,784 976,504,124 228,512,700 900,750,299

Costs of services 64,620,400 152,938,780 5,999,400 18,036,144

Selling and servicing expenses 6,953,276 44,563,351 6,457,226 42,105,226

Administrative expenses 50,350,234 290,549,347 40,190,669 191,061,605

Expenses for development of life quality and environment 3,609,457 17,309,812 2,310,050 16,669,405

Directors� remuneration 32 5,750,291 36,142,884 3,450,500 23,050,080

Losses on impairment and diminution in value of

assets and provision for doubtful accounts 17,167,141 35,770,685 16,894,136 34,344,932

Loss on disposal of investment in a subsidiary 17 - - - 16,707,231

Loss on impairment of investment in a subsidiary - - - 18,000,000

Total expenses 400,125,583 1,553,778,983 303,814,681 1,260,724,922

Earnings before finance cost and income tax 234,184,061 883,474,311 200,503,086 789,747,095

Finance cost 8.1 (34,459,101) (165,935,810) (30,879,849) (135,437,159)

Earnings before income tax 199,724,960 717,538,501 169,623,237 654,309,936

Income tax 34 (53,535,287) (180,812,542) (43,056,404) (135,632,286)

Net income 146,189,673 536,725,959 126,566,833 518,677,650

Net income attributable to

Equity holders of the parent 146,103,460 571,491,170 126,566,833 518,677,650

Minority shareholders of the subsidiaries 86,213 (34,765,211)

146,189,673 536,725,959

Earnings per share 35

Basic earnings per share

Net income attributable to equity holders of the parent 0.09 0.35 0.08 0.32



Statements of changes in shareholders’ equityEastern Water Resources Development and Management Public Company Limited and its subsidiaries



(Unit: Baht)

Consolidated financial statements

Equity attributable to the Company�s shareholders

Total equity Minority interests-

Issued and Share subscription Assets Retained earnings

atributable to equity attributable to

fully paid-up received in Share transferred Appropriated - the Company�s minority shareholders

Note share capital advance premium from customers statutory reserve Unappropriated shareholders of subsidiaries Total

Balance as at 30 September 2007 1,346,394,130 113,395,120 1,187,358,422 49,598,601 166,500,000 1,803,818,666 4,667,064,939 42,792,299 4,709,857,238

Amortisation of assets transferred from customers - - - (3,397,523) - - (3,397,523) - (3,397,523)

Increase in share capital from exercised warrants 317,331,019 - 951,163,857 - - - 1,268,494,876 - 1,268,494,876

Share subscription received in advance

as a result of warrant exercises - (113,395,120) - - - - (113,395,120) - (113,395,120)

Dividends paid 30 - - - - - (415,917,537) (415,917,537) (140,015) (416,057,552)

Net income - - - - - 571,491,170 571,491,170 (34,765,211) 536,725,959

Decrease in minority interest of a subsidiary - - - - - - - (5,756,985) (5,756,985)

Balance as at 30 September 2008 1,663,725,149 - 2,138,522,279 46,201,078 166,500,000 1,959,392,299 5,974,340,805 2,130,088 5,976,470,893

Amortisation of assets transferred from customers - - - (856,362) - - (856,362) - (856,362)

Net income - - - - - 146,103,460 146,103,460 86,213 146,189,673

Balance as at 31 December 2008 1,663,725,149 - 2,138,522,279 45,344,716 166,500,000 2,105,495,759 6,119,587,903 2,216,301 6,121,804,204



Statements of changes in shareholders’ equity (continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries



(Unit: Baht)

Separate financial statements

Issued and Share subscription Assets Retained earnings

fully paid-up received in Share transferred Appropriated -

Note share capital advance premium from customers statutory reserve Unappropriated Total

Balance as at 30 September 2007 1,346,394,130 113,395,120 1,187,358,422 49,598,601 166,500,000 1,652,524,943 4,515,771,216

Amortisation of assets transferred from customers - - - (3,397,523) - - (3,397,523)

Increase in share capital from exercised warrants 317,331,019 - 951,163,857 - - - 1,268,494,876

Share subscription received in advance

as a result of warrant exercises - (113,395,120) - - - - (113,395,120)

Dividends paid 30 - - - - - (415,917,537) (415,917,537)

Net income - - - - - 518,677,650 518,677,650

Balance as at 30 September 2008 1,663,725,149 - 2,138,522,279 46,201,078 166,500,000 1,755,285,056 5,770,233,562

Amortisation of assets transferred from customers - - - (856,362) - - (856,362)

Net income - - - - - 126,566,833 126,566,833

Balance as at 31 December 2008 1,663,725,149 - 2,138,522,279 45,344,716 166,500,000 1,881,851,889 5,895,944,033



Statements of cash flowsEastern Water Resources Development and Management Public Company Limited and its subsidiaries



(Unit: Baht)



as from as from


31 December 2008 30 September 2008 31 December 2008 30 September 2008

Cash flows from operating activities

Earnings before tax 199,724,960 717,538,501 169,623,237 654,309,936

Adjustments to reconcile earnings before income tax to

net cash provided by (paid from) operating activities:

Loss on impairment of investment in a subsidiary - - - 18,000,000

(Gain) loss on disposal of investment in a subsidiary - (3,478,650) - 16,707,231

Losses on impairment of fixed assets 274,018 236,021 - -

Losses on impairment of other assets 715,585 1,592,215 715,585 1,192,148

Losses on diminution in value of inventories 7,722,208 20,980,272 7,678,551 20,190,607

Provision for doubtful accounts 8,455,330 14,277,653 8,500,000 12,962,177

Depreciation 72,541,714 292,951,074 67,594,543 246,770,158

Amortisation of assets under concession contracts 6,218,328 24,574,830 - -

Amortisation of deferred concession rights acquisition costs 5,078,715 14,509,565 - -

Amortisation of assets transferred from customers (856,362) (3,397,523) (856,362) (3,397,523)

(Gains) losses on disposals of fixed assets - 1,982,528 - -

Losses on fixed assets written off 1,904 11,488,487 - 11,077,943

Amortisation of deferred interest under finance lease

agreements 119,385 470,863 77,990 256,712

Amortisation of rights 2,104,339 8,348,738 - -

Dividend income (16,175,909) (40,171,592) (16,175,909) (68,221,592)

Interest income (3,579,082) (4,616,922) (7,442,957) (20,548,138)

Interest expenses 34,396,182 165,935,810 30,816,930 135,632,286

Income from operating activities before changes in

operating assets and liabilities 316,741,315 1,223,221,870 260,531,608 1,024,931,945

(Increase) decrease in operating assets

Trade accounts receivable 22,164,246 5,640,404 2,018,167 (17,643,746)

Unbilled receivables (5,824,946) (1,446,200) - -

Service income receivable - related party (22,957,980) (426,883) - -

Inventories 8,836 602,744 382,622 2,321,827

Input taxes awaiting refund (334,958) 1,737,043 - -

Other current assets 7,808,120 5,331,559 6,010,568 (9,110,404)

Other receivables - related parties 4,430 (14,241,010) 2,098,254 8,545,369

Other non-current assets (272,916) 762,187 - 641,590

Increase (decrease) in operating liabilities

Trade accounts payable (5,564,498) (27,723,905) 90,156 329,882

Accrued expenses (29,537,258) 47,412,741 (28,184,709) 37,004,619

Advances received 16,937,827 (1,768,283) - -

Other current liabilities - related parties (5,114,994) 6,107,865 (12,255,032) 17,592,659

Other non-current liabilities (589,248) 15,827,506 1,104,237 17,057,570

Cash provided by operating activities 293,467,976 1,261,037,638 231,795,871 1,081,671,311

Cash paid for interest expenses (24,946,454) (176,670,193) (20,986,983) (168,713,984)

Cash paid for income tax (8,034,214) (158,721,094) (3,394,540) (111,542,710)

Net cash provided by operating activities 260,487,308 925,646,351 207,414,348 801,414,617


Cash flows from investing activities


Statements of cash flows (continued)Eastern Water Resources Development and Management Public Company Limited and its subsidiaries



(Unit: Baht)



as from as from


31 December 2008 30 September 2008 31 December 2008 30 September 2008

Securities purchased under resale agreement (176,010,051) (85,000,000) (176,010,051) (85,000,000)

Increase in current investments 59,937,428 (130,271,367) 59,937,428 (130,271,367)

Cash receipt from repayment of long term loan to an

unrelated party 300,000 200,000 300,000 200,000

Proceeds from disposal of investment in a subsidiary - 12,000,000 - 12,000,000

Dividend received from a subsidiary - - 14,025,000 70,023,000

Dividend received from a related party 8,087,955 40,171,592 8,087,955 40,171,592

Decrease in advance payments for pipeline installation - 81,427 - 81,427

Capital returned from a joint venture - 400,000 - -

Increase in assets under concession contracts (3,779,762) (22,477,457) - -

Increase in deferred concession rights acquisition costs (20,260,737) (155,512,898) - -

Interest income 2,523,672 4,617,528 6,387,098 20,548,744

Proceeds from disposals of fixed assets - 12,322,234 - -

Proceeds from disposals of other assets - 156,000 - 156,000

Cash paid for purchases of fixed assets (25,100,942) (197,446,449) (22,996,817) (172,619,618)

Net cash used in investing activities (154,302,437) (520,759,390) (110,269,387) (244,710,222)

Cash flows from financing activities

Increase (decrease) in bank overdrafts (20,009,842) 20,009,842 (20,009,842) 20,009,842

Repayment of short-term loans from financial institutions (52,000,000) (2,600,000,000) - (2,600,000,000)

Cash receipt from short-term loans from financial institutions 7,500,000 2,552,000,000 - 2,500,000,000

Repayment made on debentures - (2,500,000,000) - (2,500,000,000)

Cash receipt from long-term loans from financial institutions 52,500,000 1,576,700,000 - 1,500,000,000

Repayment made on long-term loans from financial institutions (161,429,000) (344,287,000) (150,000,000) (310,000,000)

Repayment made on liabilities under finance lease agreements (874,095) (2,813,402) (566,409) (1,582,658)

Increase in share capital from excercised warrants - 1,155,099,756 - 1,155,099,756

Dividends paid - (416,057,551) - (415,917,537)

Net cash used in financing activities (174,312,937) (559,348,355) (170,576,251) (652,390,597)

Net decrease in cash and cash equivalents (68,128,066) (154,461,394) (73,431,290) (95,686,202)

Cash and cash equivalents at beginning of the periods 170,193,618 337,436,339 128,549,012 224,235,214

Less: Cash and cash equivalents of the disposed subsidiary

on the disposal date - (12,781,327) - -

Cash and cash equivalents at ending of the periods 102,065,552 170,193,618 55,117,722 128,549,012

Supplemental cash flow information

Non-cash related transactions:

Net increase (decrease) in acquisition assets on credit 9,374,857 (91,490,656) (2,372,397) 75,708,133

Reclassification from long-term investments to shot-term

investments - 10,000,000 - 10,000,000

Net increase in acquisitions of assets under finance

lease agreements - 8,243,275 - 5,981,880



Eastern Water Resources Development and Management Public Company Limited and its subsidiaries



Notes to financial statements

1. General information

1.1 The Company information

Eastern Water Resources Development and Management Public Company Limited (�the Company�) is a public

limited company incorporated and domiciled in Thailand. The major shareholder of the Company is the Provincial

Waterworks Authority. The Company is principally engaged in the businesses of (a) development and

management of the major water distribution pipeline systems in the eastern seaboard areas of Thailand and

(b) procurement of raw water from government agency sources for commercial distribution to end users.

According to the contract dated 26 December 1993 between the Company and the Ministry of Finance, the

Company is privileged to manage the major water distribution pipeline systems in such areas for the period of

30 years. Whereby, the Company, in return, is required to provide the Ministry of Finance with the benefits

specified in the agreement. The registered address of the Company is located at 23rd - 26th Floors, East Water

Building, No. 1 Soi Vipavadeerangsit 5, Vipavadeerangsit Road, Jomphol Sub-district, Chatujak District, Bangkok.

1.2 The subsidiaries� information

As at 31 December 2008 and 30 September 2008, the Company had 5 subsidiaries, which are under held

directly and indirectly by the Company as follow:

Universal Utilities Company Limited

Universal Utilities Company Limited (�the subsidiary�) was incorporated as a limited company under Thai laws

and is a wholly-owned subsidiary of Eastern Water Resources Development and Management Public Company

Limited, a public company listed on the Stock Exchange of Thailand. The subsidiary operates its business in

Thailand and its principle activity is operating an integrated water-related business, which comprises (a)

waterworks management including production and supply of tap water, (b) providing customer services such

as meter reading and billing, and (c) providing engineering services such as design, installation, maintenance,

tap water business-related technology development and wastewater & water quality testing laboratory. The

subsidiary�s registered address is located at No. 1, the 23rd to 25th Floors of East Water Building, Soi

Vipavadeerangsit 5, Vipavadeerangsit Road, Jomphol Sub-district, Jatujak District, Bangkok.

Chachoengsao Water Supply Company Limited

Chachoengsao Water Supply Company Limited (�the subsidiary�) was incorporated as a limited company

under Thai laws on 19 October 2000. Its parent company is Universal Utilities Company Limited, a limited

company under Thai laws and its ultimate parent company is Eastern Water Resources Development and

Management Public Company Limited, a public company listed on the Stock Exchange of Thailand. The

subsidiary is domiciled in Thailand and its principal activity is the production and supply of tap water to Provincial


Waterworks Authority. According to the concession contract dated 9 November 2000, the subsidiary is privileged

to produce and supply tap water to the Provincial Waterworks Authority at Chachoengsao Office in

Chachoengsao province. The concession period is 25 years from the first date that income is derived from

selling tap water under the condition specified in the contract, which is on 1 April 2003. The subsidiary�s

registered address is located at No. 1, the 23rd to the 25th floors of East Water Building, Soi Vipavadeerangsit

5, Vipavadeerangsit Road, Jomphol Sub-district, Jatujak District, Bangkok.

Bangpakong Water Supply Company Limited

Bangpakong Water Supply Company Limited (�the subsidiary�) was incorporated as a limited company under

Thai laws on 19 October 2000. Its parent company is Universal Utilities Company Limited, a limited company

under Thai laws and its ultimate parent company is Eastern Water Resources Development and Management

Public Company Limited, a public company listed on the Stock Exchange of Thailand. The subsidiary is domiciled

in Thailand and its principal activity is the production and supply of tap water to Provincial Waterworks Authority.

According to the concession contract dated 9 November 2000, the subsidiary is privileged to produce and

supply tap water to the Provincial Waterworks Authority at Bangpakong Office in Chachoengsao province.

The concession period is 25 years from the first date that income is derived from selling tap water under the

condition specified in the contract, which is on 1 April 2003. The subsidiary�s registered address is located at

No. 1, the 23rd to the 25th Floors of East Water Building, Soi Vipavadeerangsit 5, Vipavadeerangsit Road,

Jomphol Sub-district, Jatujak District, Bangkok.

Nakornsawan Water Supply Company Limited

Nakornsawan Water Supply Company Limited (�the subsidiary�) was incorporated as a limited company under

Thai laws on 19 October 2000. Its parent company is Universal Utilities Company Limited, a limited company

under Thai laws and its ultimate parent company is Eastern Water Resources Development and Management

Public Company Limited, a public company listed on the Stock Exchange of Thailand. The subsidiary is domiciled

in Thailand and its principal activity is the production and supply of tap water to Provincial Waterworks Authority.

According to the concession contract dated 7 November 2000, the subsidiary is privileged to produce and

supply tap water to the Provincial Waterworks Authority at Nakornsawan Aok Office in Nakornsawan province.

The concession period is 25 years from the first date that income is derived from selling tap water under the

condition specified in the contract, which is on 1 March 2003. The subsidiary�s registered address is located

at No. 1, the 23rd to the 25th Floors of East Water Building, Soi Vipavadeerangsit 5, Vipavadeerangsit Road,

Jomphol Sub-district, Jatujak District, Bangkok.

Water Trades and Services Company Limited

Water Trades and Services Company Limited (�the subsidiary�) was incorporated as a limited company under

Thai laws on 6 June 2007. Its parent company is Eastern Water Resources Development and Management

Public Company Limited, a Thai incorporated public company listed on the Stock Exchange of Thailand. The

subsidiary operates its business in Thailand and is principally engaged in (a) sales of water vending machines

(b) sales of chemicals used in tap water production process and (c) management service of water vending

machines. Its registered address is at 24th Floor, East Water Building, No. 1, Soi Vipavadeerangsit 5,

Vipavadeerangsit Road, Jomphol Sub-district, Chatujak District, Bangkok.


2. Basis for preparation of the financial statements

The financial statements have been prepared in accordance with accounting standards enunciated under the

Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations

of the Notification of the Department of Business Development dated 14 September 2001, issued under the

Accounting Act B.E. 2543.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in

Note 6 to the financial statements regarding significant accounting policies.

The separate financial statements, which present investments in subsidiaries under the cost method, have

been prepared solely for the benefit of the public.

The financial statements in Thai language are the official statutory financial statements of the Company. The

financial statements in English language have been translated from such financial statements in Thai language.

On 6 March 2008, the Company was approved by the Chief Accounts Inspector of Department of Business

Development with respect to the change in its fiscal year end from 30 September to 31 December, and on 9

June 2008, it was also approved by the Revenue Department with the effect from the fiscal period ending 31

December 2008 onwards. Therefore, the financial statements for the current period presented financial

information for the three-month period as from 1 October 2008 to 31 December 2008.

3. Basis of consolidation

(a) These consolidated financial statements include the financial statements for the period as from 1 October

2008 to 31 December 2008 and for the year ended 30 September 2008 of Eastern Water Resources

Development and Management Public Company Limited (�the Company�) and the following subsidiaries,

except for the exclusion of balance sheet as at 30 September 2008 of Eastern Hobas Pipes Company

Limited from the consolidated balance sheet and the inclusion of the statement of income of such

company for the period ended only up to 31 March 2008 in the consolidated statement of income for the

year ended 30 September 2008, since the Company disposed investment in that company on 31 March

2008, as described in Note 17 to the financial statements.

Percentage of shares

heldby the Company

Paid up share capital or its subsidiary

31 30 31 30

Country of December September December September

Subsidiaries incorporation Nature of business 2008 2008 2008 2008

Million Baht Million Baht Percent Percent

Subsidiaries held directly by

the Company

Universal Utilities Thailand Production and supply of tap 510 510 100 100

Company Limited water, waste water treatment

and sale of related tools,

equipment and chemical products,

and investment in three tap water

supply companies

Water Trades and Services Thailand Sale of water vending 5 5 100 100

Company Limited machines and chemical for

producing tap water


Percentage of shares

heldby the Company

Paid up share capital or its subsidiary

31 30 31 30

Country of December September December September

Subsidiaries incorporation Nature of business 2008 2008 2008 2008

Million Baht Million Baht Percent Percent

Subsidiaries held by Universal Utilities Company Limited

Chachoengsao Water Supply Thailand Production and supply of 100 100 99 99

Company Limited tap water

Bangpakong Water Supply Thailand Production and supply of 40 40 99 99

Company Limited tap water

Nakornsawan Water Thailand Production and supply of tap water 40 40 100 100

Supply Company Limited

b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company

obtains control, and continue to be consolidated until the date when such control ceases.

c) The financial statements of the subsidiaries are prepared for the same reporting period as the parent

company, using consistent significant accounting policies.

d) Material balances and transactions between the Company and its subsidiaries, have been eliminated

from the consolidated financial statements. Investments in the subsidiaries as recorded in the Company�s

books of account are eliminated against the equity of the subsidiaries. The resultant differences are

rights, which will be amortised over a period of 27 years, being the remaining concession period awarded

to subsidiaries, commencing as from the date of acquisition of shares in the subsidiaries.

e) Minority interests represent the portion of the net income or loss and net assets of the subsidiaries that

are not held by the Company and are presented separately in the consolidated statements of income

and within equity in the consolidated balance sheet, separately from shareholders� equity of the parent

company.

4. Adoption of new accounting standards

The Federation of Accounting Professions has issued Notifications No. 9/2550, 38/2550, 62/2550 and 86/2551

regarding Thai Accounting Standards (�TAS�). The Notifications mandate the use of the following new accounting

standards.

4.1 Accounting standards which are effective for the current period

TAS 25 (revised 2007) Cash Flow Statements

TAS 29 (revised 2007) Leases

TAS 31 (revised 2007) Inventories

TAS 33 (revised 2007) Borrowing Costs

TAS 35 (revised 2007) Presentation of Financial Statements

TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors

TAS 41 (revised 2007) Interim Financial Reporting

TAS 43 (revised 2007) Business Combinations

TAS 49 (revised 2007) Construction Contracts

TAS 51 Intangible Assets


These accounting standards became effective for the financial statements for fiscal years beginning on

or after 1 January 2008. The Company�s management has assessed the effect of these standards and

believes that they will not have any significant impact on the financial statements for the year in which

they are initially applied.

4.2 Accounting standards which are not effective for the current period

TAS 36 (revised 2007) Impairment of Assets

TAS 54 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations

These accounting standards will become effective for the financial statements for fiscal years beginning

on or after 1 January 2009. The management has assessed the effect of these accounting standards

and believes that TAS 36 (revised 2007) does not have any significant impact on the financial statements

for the year in which it is initially applied, while TAS 54 (revised 2007) is not relevant to the business of

the Company and its subsidiaries since the Company and its subsidiaries do not have non-current

assets held for sale and there is no plan to discontinue any of their operations.

5. Change in accounting estimation

During the period as from 1 October 2008 to 31 December 2008, the Company reviewed useful lives of assets

and changed the estimated useful lives from 30 years previously estimated for every raw water distribution

pipelines and from 25 years previously estimated for Nong Pla Lai - Map Ta Pud water distritbution pipeline to

40 years for all those pipelines in order to reflect its current condition and useful lives. The change has the

effect of increasing net income in the Company�s consolidated and separate statements of income for the

period as from 1 October 2008 to 31 December 2008 by Baht 3.7 million.

6. Significant accounting policies

Significant accounting policies adopted by the Company and its subsidiaries are summarised below.

6.1 Revenue recognition

(a) Sales

Sales of goods are recognised as revenue when significant risks and reward of ownership of goods

have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied

after deducting goods returns and discounts.

(b) Service income

Service income is recognised by the amount excluding value added tax when service has been rendered

with reference to the stage of completion.

(c) Revenue from pipeline installation project and water loss reduction project

Revenue from water pipeline installation project and water loss reduction project are recognised as

revenue under the percentage of completion method. The expected loss on unprofitable contracts is

recognised as soon as such loss can be foreseen.


(d) Interest and dividend income

Interest income is recognised on an accrual basis. Dividend income is recognised when rights to receive

dividends are established.

(e) Other income

Other income is recognised on an accrual basis.

6.2 Cash and cash equivalents

Cash and cash equivalents consist of cash in hand, cash at banks, and all highly liquid investments with an

original maturity of three months or less and not subject to withdrawal restrictions.

6.3 Securities purchased under resale agreement

The Company enters into agreements to purchase securities under condition to resell at certain dates in the

future at fixed prices. Amounts paid for securities purchased subject to a resale commitment are presented as

assets under the caption of �Securities purchased under resale agreements� in the balance sheets. The

differences between the purchase and sale considerations is recognised as interest income on an accrual

basis over the agreement periods.

6.4 Trade accounts receivable and allowance for doubtful accounts

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided

for the estimated losses that may be incurred in collection of receivables, which is generally based on collection

experience and analysis of debt aging.

6.5 Unbilled receivables/unbilled service income receivable

The Company and its subsidiaries record revenue from sales of tap water and service income that has been

recognised as revenue but not yet billed to the customers under the caption of �Unbilled receivables� and

�Unbilled service income receivable - related party�, which have been shown as current assets in the balance

sheets

6.6 Inventories

Inventories are valued at the lower of cost (specific identification method for water vending machines and first-

in, first out method for other inventories) and net realisable value.

Allowance for diminution in value of inventories is set up for obsolete, slow-moving or deteriorated inventories.

6.7 Investments

Investments in subsidiaries in the separate financial statements are accounted for under the cost method and

less allowance for impairment (if any).

Investments in held-to-maturity debt securities, classified as current investments or long-term investment in

accordance with their remaining periods to maturity, are stated at amortised cost less allowance for impairment

(if any). The premium/discount on debt securities is amortised using the straight-line method with the amortised

amount included in statements of income.


Investments in non-marketable equity securities held as general investments are determined at costs less

allowance for impairment (if any).

Loss on impairment (if any) of investments is included in the statements of income.

6.8 Property, plant and equipment and depreciation

Land is stated at cost less allowance for impairment (if any). Plant and equipment are stated at cost less

accumulated depreciation and allowance for impairment (if any).

Depreciation of plant and equipment are computed using the straight-line method over their estimated useful

lives (except for water distribution pipelines in Chachoengsao, Bangpakong-Chonburi, Sriracha, Bangpra,

Rayong-Mabkha and Nakhornnuengkhet which are depreciated by the units of production method). Estimated

useful lives are as follows:

Pumping plant 33 years

Other buildings 15, 20, 25 years

Land, building and leasehold improvements 5, 10, 15, 20 years

Machinery and equipment (Except for pipelines in Chachoengsao,

Bangpakong-Chonburi, Sriracha, Bangpra, Rayong-Mabkha

and Nakhornnuengkhet, which are depreciated by the units of

production method based on projected sales volume in unit

but not exceeding the capacity of assets

over a 40-year period) 5, 10, 20, 25, 40 years

Office equipment 3, 5, 10 years

Vehicles 5 years

No depreciation is provided for land and construction in progress.

Depreciation is included in statements of income.

6.9 Assets under concession contracts and amortisation

Assets under concession contracts are stated at cost less accumulated amortisation and allowance for

impairment (if any). Amortisation of assets under concession contracts, which has been computed using the

straight-line method over the concession period of 15, 20 and 25 years, has been included in statements of

income.

6.10 Deferred concession rights acquisition costs and amortisation

Concession rights acquisition costs consist of expenses incurred directly in relation to obtaining the concession

contracts from the Provincial Waterworks Authority. Deferred concession rights acquisition costs are stated at

cost less accumulated amortisation and allowance for impairment (if any). Amortisation of deferred concession

rights acquisition costs, which has been computed using the straight-line method over the concession periods

of 27 and 30 years, has been included in statements of income.


6.11 Borrowing costs

Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a

substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the

respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs

consist of interest and other costs that the Company and its subsidiaries incur in connection with the borrowing

of funds.

6.12 Intangible assets and amortisation

Intangible assets presented as an asset in the consolidated balance sheets are rights to operate the subsidiaries�

businesses under concession awarded to the subsidiaries by the government unit or entity over a limited a

concession period. Rights are stated at cost less accumulated amortisation and allowance for impairment (if

any) and are amortised using the straight-line method over a period of 27 years, being the concession period

awarded to the subsidiaries to carry out their business operation. The carrying amounts of intangible assets

are reviewed annually and written down when there is an impairment.

6.13 Impairment of assets

The Company and its subsidiaries assess at each reporting date whether there is an indication that an asset

may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the

Company and its subsidiaries estimate the asset�s recoverable amount. An asset�s recoverable amount is the

higher of an asset�s fair value less costs to sell and its value in use. Where the carrying amount of an asset

exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable

amount. In assessing value in use, the estimated future cash flows are discounted to their present value using

a pre-tax discount rate that reflects current market assessments of the time value of money and the risks

specific to the asset. In determining fair value less costs to sell, the Company and its subsidiaries assess the

value that reflects the amount that the Company could obtain at the balance sheet date, from the disposal of

the asset in an arm�s length transaction between knowledgeable and willing parties, after deducting the costs

of disposal.

6.14 Provisions

Provisions are recognised when the Company and its subsidiaries have a present obligation as a result of a

part event, it is probable that an outflow of resources embodying economic benefits will be required to settle

the obligation, and a reliable estimate of such obligation can be made.

6.15 Long-term leases

Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership to

the leasee are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the

leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of

finance charges, are recorded as long-term liabilities while the interest element is charged to the statements of

income over the lease periods. The assets acquired under finance lease is depreciated over the shorter of the

useful life of the asset or the lease period.


6.16 Employee benefits

The Company, its subsidiaries and their employees have jointly established a provident fund. The fund is

monthly contributed to by employees and by the Company and its subsidiaries. The contributions made by the

Company and its subsidiaries are recognised as expenses when incurred.

The Company issued to its directors and employees the warrants to purchase the Company�s ordinary shares.

Such transactions are recorded in the financial statements when the warrants are exercised.

6.17 Foreign currencies

Transactions in foreign currency are translated into Baht at the exchange rates ruling on the dates of transaction.

Monetary assets and liabilities denominated in foreign currencies outstanding on the balance sheet dates are

translated into Baht at the exchange rates ruling on the balance sheet dates.

Gains and losses on exchange are included in statements of income.

6.18 Income tax

Income tax is provided in the accounts based on the taxable profits determined in accordance with tax legislation.

6.19 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the Company and its

subsidiaries, whether directly or indirectly, or which are under common control with the Company and its

subsidiaries.

They also include associated companies and individuals which directly or indirectly own a voting interest in the

Company and its subsidiaries that gives them significant influence over them, key management personnel,

directors and officers with authority in the planning and direction of the Company�s and its subsidiaries�

operations, together with close family members of such persons and companies which are controlled or

influenced by them, whether directly or indirectly.

7. Significant accounting judgments and estimates

The preparation of financial statements in conformity with generally accepted accounting principles at times

requires management to make subjective judgments and estimates regarding matters that are inherently

uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could

differ. Significant accounting judgments and estimates are as follows:

7.1 Value in use

Value in use is the present value of the future cash flows expected to be derived from assets, discounted by

discount rates, determined by the management of the Company and its subsidiaries. The cash flow projections

based on financial forecasts for the remaining useful lives of assets or concession periods and approved by

the management of the Company and its subsidiaries are calculated based on estimated growth rates, which

do not exceed their capacity and customers� usage demand. Key assumptions used for value-in-use calculations

are growth rates, expense to revenue ratios and gross margin rate. Management determines such rates based


on their past performance, their expectations for market development, and business plan. The discount rates

used are pre-tax and reflect specific risks relating to the business. The value derived from the afore-mentioned

method may vary due to changes in revenue structure, cost structure, discount rate, industrial conditions and

economic conditions.

7.2 Leases

In determining whether a lease is to be classified as an operating lease or finance lease, the management is

required to use judgement regarding whether significant risk and rewards of ownership of the leased asset has

been transferred, taking into consideration terms and conditions of the arrangement.

7.3 Allowance for doubtful accounts

In determining an allowance for doubtful accounts, the management needs to make judgement and estimates

based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing

economic condition.

7.4 Property plant and equipment/Depreciation

In determining depreciation of plant and equipment, the management is required to make estimates of the

useful lives and salvage values of the plant and equipment and to review estimate useful lives and salvage

values when there are any changes.

7.5 Intangible assets

The initial recognition and measurement of intangible asset, and subsequent impairment testing, require

management to make estimates of cash flows to be generated by the asset or the cash generating units and to

choose a suitable discount rate in order to calculate the present value of those cash flows.

7.6 Litigation

The Company and its subsidiary have contingent liabilities as a result of litigation. Their management has used

judgment to assess of the results of the litigation and believe that no loss will result. Therefore no contingent

liabilities are recorded as at the balance sheet dates. However, actual results could differ from the estimates.

7.7 Fair value of financial instruments

In determining the fair value of financial instruments that are not actively traded and for which quoted market

prices are not readily available, the management exercises judgment in estimating fair value as follows:

The fair value of long-term loan to a related party is estimated by discounting the cash flows expected to be

received by the Company from repayments of that loan by the current market interest rates.

The fair value of long-term loans from financial institutions are estimated by discounting the cash flows expected

to be used to repay principal and interest to the lenders by the Company and its subsidiaries by the current

market interest rates.


8. Related party transactions

8.1 Transactions incurred during the period

During the periods, the Company and its subsidiaries had significant business transactions with related parties.

Such transactions, which are summarised below, arose in the ordinary course of business and were concluded

on commercial terms and bases agreed upon between the Company and those related parties.

(Unit: Thousand Baht)

Consolidated Separate Transfer

financial statements financial statements pricing policy

For the period For the period For the period

as from as from as from

1 October For the year 1 October For the year 1 October For the year

2008 to ended 2008 to ended 2008 to ended

Type of 31 December 30 September 31 December 30 September 31 December 31 December

relationship 2008 2008 2008 2008 2008 2008

Sales - raw water

Industrial Estate Authority Major shareholder 141,132 611,659 141,132 611,659 Similar to market Similar to market

of Thailand prices and prices and

adjusted for rate adjusted for rate

reduced in reduced in

accordance with accordance with

a resolution of a resolution of

the Extraordinary the Extraordinary

General Meeting General Meeting

No. 2/2551 No. 2/2551

Provincial Waterworks Major shareholder 121,953 463,452 121,953 463,452 Similar to market Similar to market

Authority prices and prices and

adjusted for rate adjusted for rate

reduced in reduced in

accordance with accordance with

a resolution of a resolution of

the Extraordinary the Extraordinary

General Meeting General Meeting

No. 2/2551 No. 2/2551

Universal Utilities Subsidiary - - 25,811 80,120 Similar to market Similar to market

Company Limited prices prices

263,085 1,075,111 288,896 1,155,231

Sales - tap water

Provincial Waterworks Major shareholder 93,974 355,224 - - Mutually agreed Mutually agreed

Authority price as stipulated price as stipulated

in the contracts in the contracts

Sales - others

Water Trades and Services Subsidiary - - - 1,293 - Similar to market

Company Limited prices

Universal Utilities Subsidiary - - 27 75 Similar to market Similar to market

Company Limited prices prices

- - 27 1,368

Service income

Provincial Waterworks Major shareholder 49,690 74,501 - - Mutually agreed Mutually agreed

Authority price as price as

stipulated in stipulated in

the contracts the contracts

Egcom Tara Company Having a common 9,345 31,442 - - Mutually agreed Mutually agreed

Limited shareholder price as price as



59,035 105,943 - -



Consolidated Separate Transfer

financial statements financial statements pricing policy

For the period For the period For the period

as from as from as from

1 October For the year 1 October For the year 1 October For the year

2008 to ended 2008 to ended 2008 to ended

Type of 31 December 30 September 31 December 30 September 31 December 31 December

relationship 2008 2008 2008 2008 2008 2008

Rental and service

income (included

in service income)

Universal Utilities Subsidiary - - 662 2,434 Mutually agreed Mutually agreed

Company Limited price as price as



Water Trades and Services Subsidiary - - 99 362 Mutually agreed

Company Limited price as price as



- - 761 2,796

Interest and dividend income

Universal Utilities Subsidiary - - 3,969 43,843 5.25% per annum 5.25% per annum

Company Limited on loans to on loans to

subsidiary subsidiary and

dividend of Baht

0.55 per share as

declared by the

subsidiary

Eastern Hobas Pipes Subsidiary - - - 587 - 6.50% per annum

Company Limited

Egcom Tara Company Having a common 16,176 40,172 16,176 40,172 Baht 3.12 per share Baht 7.76 per share

Limited shareholder as declared by as declared by

such company such company

16,176 40,172 20,145 84,602

Other income

Universal Utilities Subsidiary - - 1,289 1,086 Mutually agreed Mutually agreed

Company Limited price as stipulated price as stipulated


Eastern Hobas Pipes Subsidiary - - - 221 - Mutually agreed

Company Limited price as stipulated

in the contracts

- - 1,289 1,307

Service expenses

(included in cost

of sales)

Universal Utilities Subsidiary - - 51,439 199,191 Mutually agreed Mutually agreed



Water Trades and Services Subsidiary - - 78 2,992 Mutually agreed Mutually agreed



- - 51,517 202,183

Interest expense

Hobas Engineering GmbH Shareholder - 391 - - - 6.5% per annum

of a subsidiary


8.2 Outstanding balances at end of the years

The outstanding balances the Company and its subsidiaries have with their related parties and/or persons as

at 31 December 2008 and 30 September 2008 are detailed as follow:

(Unit: Baht)

Consolidated Separate financial

financial statements statements

31 December 30 September 31 December 30 September

2008 2008 2008 2008

Trade accounts receivable - related parties

Major shareholders

Provincial Waterworks Authority 55,852,553 52,981,303 55,852,553 52,973,439

Industrial Estate Authority of Thailand 50,415,307 52,739,145 50,415,307 52,739,145

Subsidiary

(Eliminated from the consolidated financial statements)

Universal Utilities Company Limited - - 9,613,251 9,043,300

Related company

Egcom Tara Company Limited 6,348,108 3,043,054 - -

Total trade accounts receivable - related parties 112,615,968 108,763,502 115,881,111 114,755,884

Unbilled receivables - related parties

Major shareholders

Provincial Waterworks Authority 61,061,349 60,147,229 - -

Related company

Egcom Tara Company Limited 1,067,665 - - -

Total unbilled receivables - related parties 62,129,014 60,147,229 - -

Service income receivables - related party

Major shareholder


Dividend receivable from related parties

Subsidiary



Related company

Egcom Tara Company Limited 8,087,954 - 8,087,954 -

Total dividend receivable from related parties 8,087,954 - 22,112,954 28,050,000


(Unit: Baht)




2008 2008 2008 2008

Other receivable - related parties

Major shareholder

Provincial Waterworks Authority 6,489 10,919 - -

Subsidiaries



Water Trades and Services Company Limited - - 2,000,700 4,503,741

Nakornsawan Water Supply Company Limited - - 1,700 -

Bangpakong Water Supply Company Limited - - 1,500 -

Total other receivable - related parties 6,489 10,919 4,768,602 6,866,856

Long-term loan to related party

Subsidiary



Total long-term loans to related parties - - 300,000,000 300,000,000

Trade accounts payable - related parties

Major shareholder


Subsidiary



Related company

Egcom Tara Company Limited 1,610,222 1,054,913 - -

Total trade accounts payable - related parties 6,997,992 4,114,414 5,999,054 6,083,125

Other current liabilities - related parties

Major shareholder

Industrial Estate Authority of Thailand - 5,114,994 - 5,114,994

Subsidiaries



Water Trades and Services Company Limited - - 10,700 30,495

Total other current liabilities - related parties - 5,114,994 32,316,490 44,571,522

Rental guarantees received from related parties

Subsidiary


Universal Utilities Company Limited - - 662,485 662,485

Water Trades and Services Company Limited - - 98,753 98,753

Total rental guarantees received from related parties - - 761,238 761,238


8.3 Movements of inter-company loan

Movements of inter-company loan during the period were summarised below.

(Unit: Baht)


During the periodBalance as at Balance as at

30 September 31 December

2008 Increase Repayments 2008

Long-term loan to subsidiary

Universal Utilities Company Limited 300,000,000 - - 300,000,000

8.4 Details of agreement of loan to Universal Utilities Company Limited

On 3 October 2002, the Company entered into a loan agreement with Universal Utilities Company Limited, a

subsidiary, whereby the Company agreed to provide to the subsidiary a loan facility of Baht 300 million, of

which the subsidiary is to make full or partial repayment at any time, but within ten years as from the agreement

date. The loan bears interest at a fixed rate of 5.5 percent per annum for the first five years from the agreement

date and at the minimum lending rate (MLR) per annum thereafter, with such interest payable on a quarterly

basis. In order to secure payments under this loan agreement, the Company arranged to have all of three

subsidiaries of the subsidiary (i.e. Chachoengsao Water Supply Company Limited, Bangpakong Water Supply

Company Limited and Nakornsawan Water Supply Company Limited) allowed the transfer to the Company of

all collection rights under the concessions to produce water.

On 19 June 2007, the Company amended the loan agreement to change the interest rate to be fixed rate of

5.25 percent per annum throughout the remaining term of the loan agreement. The effective date was 1 July

2007.

As at 31 December 2008, the Company had an outstanding balance of long-term loan to this subsidiary

amounting to approximately Baht 300 million (30 September 2008: Baht 300 million).

8.5 Directors and management�s remuneration

For the period as from 1 October 2008 to 31 December 2008 and for the year ended 30 September 2008, the

Company and its subsidiaries paid salaries, meeting allowances and gratuities to their directors and management

totaling Baht 13.0 million and Baht 65.3 million, respectively (The Company only: Baht 8.7 million and Baht 43.3

million, respectively).

8.6 Guarantee obligations with related parties

A subsidiary has obligations as a result of guarantees provided for its related parties, as described in Note

36.4.2 to the financial statements.

9. Cash and cash equivalents

Cash and cash equivalents in the statements of cash flows consisted of cash, cash at banks and all highly

liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.


(Unit: Baht)




2008 2008 2008 2008

Cash 726,231 763,225 199,595 328,195

Cash at banks - demand deposits 101,339,321 79,430,393 54,918,127 38,220,817

Current investment with an original maturity of - 90,000,000 - 90,000,000

3 months or less

Cash and cash equivalents 102,065,552 170,193,618 55,117,722 128,549,012

10. Securities purchased under resale agreement

As at 31 December 2008, the Company had Bank of Thailand bond of Baht 261 million purchased under

resale agreement made with a securities company. The reselling date is on 30 January 2009 and interest rate

is 2.6 percent per annum (30 September 2008: Baht 85 million, having the reselling date on 22 October 2008

and interest rate of 3.7 percent per annum).

11. Investments

As at 31 December 2008 and 30 September 2008, the investments consisted of the following:

(Unit: Baht)




2008 2008 2008 2008

Current investments

Held-to-maturity debt securities

Fixed deposits with banks 3,584,275 3,521,703 3,584,275 3,521,703

Promissory notes 80,000,000 140,000,000 80,000,000 140,000,000

Total held-to-maturity debt securities 83,584,275 143,521,703 83,584,275 143,521,703

Total current investments 83,584,275 143,521,703 83,584,275 143,521,703

Long-term investments

General investments

Non-marketable equity securities 85,477,500 85,477,500 85,387,500 85,387,500

Total general investments 85,477,500 85,477,500 85,387,500 85,387,500

Total long-term investments 85,477,500 85,477,500 85,387,500 85,387,500

Total investments 169,061,775 228,999,203 168,971,775 228,909,203

11.1 As at 31 December 2008 and 30 September 2008, the Company had a long-term investment in equity securities

of Egcom Tara Company Limited, a related company. The investment is classified as general investment and

stated at cost of Baht 85.4 million and represents 15 percent of the paid-up share capital of that company.


Egcom Tara Company Limited has been incorporated as a limited company in Thailand to engage in the

business of supplying water produced in accordance with the Thai Industrial Standard to the Provincial

Waterworks Authority of Thailand for distribution at Lak Muang Water Station in Ratchaburi Province, Damnoen

Saduak Water Station in Ratchaburi Province and Samut Songkhram Water Station in Samut Songkhram Province.

On 30 April 2008, the Annual General Meeting of the Shareholders of Egcom Tara Company Limited passed a

resolution approving the payment of dividends to its shareholders, approximately Baht 40.2 million of which

was for the Company. The Company already received dividends in May and July 2008.

On 27 November 2008, the Board of Directors� Meeting of Egcom Tara Company Limited passed a resolution

approving the payment of dividends to its shareholders, approximately Baht 16.2 million of which was for the

Company. The Company already received Baht 8.1 million in December 2008 and the remaining balance will

be received in February 2009.

11.2 As at 31 December 2008 and 30 September 2008, a subsidiary had an investment in Joint Venture UUEEI,

which is engaged in the maintenance and management of waste water treatment systems. Such investment is

classified as general investment and stated at cost of Baht 90,000 which represents 15 percent of paid-up

capital of that joint venture.

12. Trade Accounts Receivable

The balances of trade accounts receivable as at 31 December 2008 and 30 September 2008, aged on the

basis of due dates, are summarised below.

(Unit: Baht)




2008 2008 2008 2008

Trade accounts receivable � related parties

Not yet due 103,598,627 108,683,252 109,832,206 114,675,634

Past due

Up to 3 months 9,017,341 80,250 6,048,905 80,250

Total trade accounts receivable � related parties 112,615,968 108,763,502 115,881,111 114,755,884

Trade accounts receivable - unrelated parties

Not yet due 59,731,583 83,935,545 57,976,883 59,441,040

Past due

Up to 3 months 1,497,600 2,618,260 1,497,599 2,545,818

3 - 6 months 98,552 359,357 98,551 266,457

6 - 12 months 93,530 415,182 93,530 358,982

Over 12 months 7,715,439 7,825,072 45,596 243,256

Total trade accounts receivable - unrelated parties 69,136,704 95,153,416 59,712,159 62,855,553

Less: Allowance for doubtful accounts (7,669,349) (7,714,019) - -

Trade accounts receivable - unrelated parties, net 61,467,355 87,439,397 59,712,159 62,855,553

Trade accounts receivable - net 174,083,323 196,202,899 175,593,270 177,611,437


13. Short-term loan to an unrelated party

(Unit: Baht)


31 December 2008 30 September 2008

Short-term loan to an unrelated party (including accrued interest income) 21,440,649 21,762,177

Less: Allowance for doubtful accounts (21,440,649) (12,962,177)

Short-term loan to an unrelated party - net - 8,800,000

On 13 March 2007, the Company entered into a loan agreement, to provide a credit line of Baht 18 million to

Eastern Hobas Pipes Company Limited (former subsidiary) for use as working capital. The Company charges

interest to that company at the fixed rate of 6.5 percent per annum, payable on a monthly basis. The loan is

repayable within 24 months commencing from the drawn-down date but such company defaulted payments

and in the fourth quarter of 2008, the Company sent letter to such company informing it to pay a monthly

installment of Baht 100,000 each over the first 6 months and will then restructure such debt. However, such

company is sued by a bank, its major creditor and the Company is in the process of suing that company. The

Company�s management considered setting up an allowance for doubtful accounts in full amount.

14. Inventories

(Unit: Baht)


Allowance of diminution in value of inventory

Reduction cost to

Cost net realisable value Stock obsolescence Inventory-net

31 December 30 September 31 December 30 September 31 December 30 September 31 December 30 September

2008 2008 2008 2008 2008 2008 2008 2008

Finished goods 46,939,272 53,457,755 (46,772,084) (44,846,801) - - 167,188 8,610,954

Raw materials and supplies 10,389,215 9,632,835 - - (87,412) (43,754) 10,301,803 9,589,081

Total 57,328,487 63,090,590 (46,772,084) (44,846,801) (87,412) (43,754) 10,468,991 18,200,035

(Unit: Baht)


Allowance of diminution in value of inventory

Reduction cost to

Cost net realisable value Stock obsolescence Inventory-net

31 December 30 September 31 December 30 September 31 December 30 September 31 December 30 September

2008 2008 2008 2008 2008 2008 2008 2008

Finished goods 46,193,358 52,329,251 (46,026,170) (44,100,890) - - 167,188 8,228,361

Raw materials and supplies - - - - - - - -

Total 46,193,358 52,329,251 (46,026,170) (44,100,890) - - 167,188 8,228,361


15. Restricted bank deposits

As at 31 December 2008 and 30 September 2008, the Company has pledged fixed deposit accounts with

banks amounting to Baht 9.1 million and Baht 9.1 million, respectively to secure bank guarantees obtained

from local commercial banks on behalf of the Company and its subsidiaries as described in Note 36.4.1 to the

financial statements.

16. Investments in subsidiaries

As at 31 December 2008 and 30 September 2008, the Company recorded its investments in subsidiaries

under the cost method, which consisted of investments in ordinary shares in the following subsidiaries:


Investments value

Paid-up share capital Equity interest under cost method Dividends

For the

period as

from 1

October

2008 to For the year

31 30 31 30 31 30 31 ended 30

December September December September December September December September

Name of subsidiaries 2008 2008 2008 2008 2008 2008 2008 2008

Million Million % % Thousand Thousand Thousand Thousand

Baht Baht Baht Baht Baht Baht

Water Trades and Services

Company Limited 5 5 100 100 5,000 5,000 - -

Universal Utilities

Company Limited 510 510 100 100 510,000 510,000 - 28,050

Total investment in subsidiaries 515,000 515,000 - 28,050

Less: Allowance for impairment of

investments in subsidiaries - -

Investment in subsidiaries - net 515,000 515,000

17. Disposal of investment in a subsidiary

On 31 March 2008, the Company entered into a share sale and purchase agreement with a local company

(�the buyer�) to sell ordinary shares in Eastern Hobas Pipes Company Limited, a subsidiary engaging in the

business of manufacture and sale of water distribution pipes whereby the Company agreed to sell 24,000,000

ordinary shares for Baht 0.50 per share, or a total of Baht 12 million (�the selling price�). The buyer paid Baht 2

million on the agreement date and the remainder of Baht 10 million was received on 30 April 2008. In addition,

the agreement stipulates that if the subsidiary is successful in reaching a debt restructuring compromise with

the local financial institution, the Company will receive additional payment of Baht 12 million. The Company

also has an option to buy shares back from the buyer within 18 months from the agreement date, but with the

number of shares to be bought back shall not exceed 24 percent of the total issued and paid-up share capital

of Eastern Hobas Pipes Company Limited, including any additional share capital registered during the buy-

back period. The price at which shares are to be bought back is the selling price or the selling price plus the

amount that the buyer must additionally pay as a result of an increase in share capital, plus interest at the

Minimum Loan Rate (MLR) of Krung Thai Bank applicable on the date the Company applies to buy back the

shares.


The net asset value of Eastern Hobas Pipes Company Limited on the selling date (31 March 2008), was as

follow:

(Unit: Baht)

31 March 2008

Asset

Cash and cash equivalents 12,781,327

Trade accounts receivable - net 53,232,466

Other receivables - related parties 18,212,721

Inventories - net 15,413,548

Property, plant and equipment - net 380,750,112

Other assets 3,310,232

Total assets 483,700,406

Liabilities

Loans from financial institution 297,000,000

Loans from shareholders 30,000,000

Other liabilities 114,349,906

Total liabilities 441,349,906

Net asset value 42,350,500

Add (less): Adjusting transactions of intercompany sales in prior year (30,836,530)

Over-recognition of prior year�s profit sharing 2,764,364

Minority interest - equity attributable to minority shareholders

of subsidiaries (5,756,985)

Equity of the subsidiary attributable to the Company per the consolidated

financial statements 8,521,349

Selling price 12,000,000

Less: Equity of the subsidiary attributable to the Company per the

consolidated financial statements (8,521,349)

Gain on disposal of investment in a subsidiary recognised in the

consolidated financial statements 3,478,651

Selling price 12,000,000

Less: Investment in a subsidiary under cost method on the selling date (28,707,000)

Loss on disposal of investment in a subsidiary recognised in

the separate financial statements 16,707,000

The Company already received full payment on disposal of such shares on 30 April 2008 and recognised gain

of Baht 3.5 million on disposal of investment in a subsidiary in the consolidated financial statements for the year

ended 30 September 2008 and loss of Baht 16.7 million on disposal of investment in a subsidiary in the

separate financial statements for the year ended 30 September 2008.


The consolidated statements of income and cash flows for the year ended 30 September 2008, categorised by

continuing operations and discontinued operations due to disposal of investment in the subsidiary as mentioned

above, are shown below.



For the year end 30 September 2008

Continuing Discontinued

operations operations (1)

Total

Revenue

Sales 2,216,825 18,886 2,235,711

Service income 143,215 - 143,215

Interest and dividend income 44,694 95 44,789

Gain on disposal of investment in a subsidiary 3,479 - 3,479

Other income 7,619 2,440 10,059

Total revenue 2,415,832 21,421 2,437,253

Expenses

Costs of sales 959,524 16,980 976,504

Costs of services 152,939 - 152,939

Selling, servicing and administrative expenses 373,990 50,346 424,336

Total expenses 1,486,453 67,326 1,553,779

Earning (loss) before interest expense

and income tax 929,379 (45,905) 883,474

Interest expense (141,964) (23,972) (165,936)

Income tax (180,812) - (180,812)

Earnings (loss) before minority interests 606,603 (69,877) 536,726

(Earnings) loss in respect of minority

shareholders of subsidiaries (173) 34,938 34,765

Net income (loss) 606,430 (34,939) 571,491

(1)The amounts shown in the �Discontinued operations� were presented by the amounts recognised until the date the

Company sold its subsidiary (31 March 2008).







Total

Cash flows from operating activities

Net income (loss) 606,430 (34,939) 571,491

Adjustments to reconcile net income (loss) to net

cash provided by (paid from) operating activities:

Earnings (loss) in respect of minority

shareholders of subsidiaries 173 (34,938) (34,765)

Gain on disposal of investment in a subsidiary (3,479) - (3,479)

Losses on impairment of fixed assets - 236 236

Losses on impairment of other assets 1,592 - 1,592

Losses on diminution in value of inventories 20,980 - 20,980

Provision for doubtful accounts 14,277 - 14,277

Depreciation 265,505 27,446 292,951

Amortisation of assets under concession contracts 24,575 - 24,575

Amortisation of deferred concession rights

acquisition costs 14,510 - 14,510

Amortisation of assets transferred from customers (3,397) - (3,397)

Losses on disposal of fixed assets 307 1,675 1,982

Losses on fixed assets written off 11,489 - 11,489

Amortisation of goodwill 8,349 - 8,349

Dividend income (40,172) - (40,172)

Income (loss) from operating activities before

changes in operating assets and liabilities 921,139 (40,520) 880,619

(Increase) decrease in operating assets

Trade accounts receivable (1,190) 5,384 4,194

Service income receivable - related party (427) - (427)

Inventories 3,603 (3,000) 603

Input taxes awaiting refund 1,737 - 1,737

Other current assets 4,103 1,096 5,199

Other receivables - related parties (11) (14,230) (14,241)

Other non-current assets 732 30 762

Increase (decrease) in operating liabilities

Trade accounts payable (24,880) (2,844) (27,724)

Accrued expenses 48,405 (5,103) 43,302

Accrued interest expenses (32,969) 22,234 (10,735)

Corporate income tax payable 22,225 - 22,225

Other current liabilities - related parties 5,115 993 6,108

Other non-current liabilities 15,828 - 15,828

Net cash provided by (used in) operating activities 963,410 (35,960) 927,450

(1)The amounts shown in the �Discontinued operations� were presented by the amounts recognised until the date the

Company sold its subsidiary (31 March 2008).







Total

Cash flows from investing activities

Securities purchased under resale agreement (85,000) - (85,000)

Increase in current investments (130,271) - (130,271)

Proceeds from long-term loan to an unrelated party 200 - 200

Proceeds from disposal of investment in a subsidiary 12,000 - 12,000

Dividend received from a related party 40,172 40,172

Decrease in advance payment for pipeline installation 81 - 81

Capital returned from a joint venture 400 - 400

Increase in assets under concession contracts (22,477) - (22,477)

Increase in deferred concession rights acquisition costs (155,513) - (155,513)

Proceeds from disposal of fixed assets 147 12,175 12,322

Proceeds from sales of property foreclose 156 - 156

Acquisition of fixed assets (197,090) (356) (197,446)

Net cash provided by (used in) investing activities (537,195) 11,819 (525,376)

Cash flows from financing activities

Increase in bank overdrafts 20,010 - 20,010

Repayments of short-term loans from financial

institutions (2,600,000) - (2,600,000)

Cash receipt from short-term loans from financial

institutions 2,552,000 - 2,552,000

Repayments made on debentures (2,500,000) - (2,500,000)

Cash receipt from long-term loans from financial

institutions 1,576,700 - 1,576,700

Repayments of long-term loans from financial

institutions (344,287) - (344,287)

Increase in share capital from exercised warrants 1,155,100 - 1,155,100

Dividends paid (416,058) - (416,058)

Net cash used in financing activities (556,535) - (556,535)

Net increase (decrease) in cash and cash equivalents (130,320) (24,141) (154,461)

Cash and cash equivalents at beginning of the year 300,514 36,922 337,436

Less: cash and cash equivalents of the disposed

subsidiary on the disposal date (12,781) - (12,781)

Cash and cash equivalents at end of the year 157,413 12,781 170,194

(1)The amounts shown in the �Discontinued operations� were presented by the amounts recognised until the

date the Company sold its subsidiary (31 March 2008).


18. Other receivable

By resolution of the Cabinet-Council on 2 August 2005, it is resolved to approve projects to solve urgently a

drought crisis in the eastern area, which include a project to install water distribution pipeline connecting the

Pra-Sae reservoir to the Klong Yai reservoir in the Rayong Province (�the pipeline connecting project�), the

Company is then assigned to operate for construction of such project in the limit of Baht 1,680 million, separated

as below:

(a) A limit of Baht 1,008 million is to be supported by the government and under which the Company is

assigned to enter into contracts for pipeline connecting and annexed building construction and contracts

to procure and install water pumping machines and electricity system with total contract value of baht

919 million. The Company has entered into such contracts on behalf the government under the resolution

as mentioned above.

(b) For the remaining limit of Baht 672 million, the Company is assigned to make advance payments and the

Royal Irrigation Department (�the RID�) will repay to the Company by gradually offsetting the charges on

raw water that the company will purchase from the RID each year. Up to 31 December 2008 and 30

September 2008, the Company already made advance payments for a total of approximately Baht 642

million, which is presented in the line item of �Other receivable� in the non-current assets in the balance

sheets.

Presently, the relevant government unit is requesting for the budget but this has yet been allotted from the

government for re-imbursement to the Company with respect to the above part (a). Furthermore, the government

agency has not yet determined the amount to be withheld from the volumes of raw water purchased every year

with respect to the above part (b). However, the Company�s management believes that the Company will not

incur any loss as a result of entering into this contract and making the advance payments. In addition, the

Company�s management believes that the project would be beneficial and should the government agency

decide not to operate the project itself, the Company would be able to invest in this project by itself, as it would

with its other projects, in order to generate benefits. The Company is in the process of negotiating with the

relevant agencies and the outcome of such negotiations and other related matters had not yet been finalised

on the authorisation date of the financial statements.


19. Property, plants and equipment

(Unit: Baht)


Land,

leasehold and Machinery

Pumping building and Office Construction

Land plants Buildings improvements equipment equipment Vehicles in progress Total

Cost:

30 September 2008 359,566,907 519,601,338 720,688,042 107,961,798 6,046,742,832 334,744,089 8,333,820 19,141,722 8,116,780,548

Acquisitions - - - 1,585,890 3,416,421 6,165,457 - 14,115,768 25,283,536

Transfer in/(transfer out) - - - - 5,276,751 - - (5,276,751) -

Disposal/write off - - - - - (4,235) - - (4,235)

Decrease from transferring

to �unused assets�

accounts - - - (52,000) - (263,151) - - (315,151)

31 December 2008 359,566,907 519,601,338 720,688,042 109,495,688 6,055,436,004 340,642,160 8,333,820 27,980,739 8,141,744,698

Accumulated depreciation:

30 September 2008 - 96,257,892 62,081,457 36,492,711 978,457,590 180,747,413 2,790,356 - 1,356,827,419

Accumulated depreciation

on disposed/written-off

assets - - - - - (2,329) - - (2,329)



accounts - - - (47,906) - (258,655) - - (306,561)

Depreciation for the year - 4,125,608 7,548,012 2,950,423 45,169,086 12,287,917 460,668 - 72,541,714

31 December 2008 - 100,383,500 69,629,469 39,395,228 1,023,626,676 192,774,346 3,251,024 - 1,429,060,243

Net book value:

30 September 2008 359,566,907 423,343,446 658,606,585 71,469,087 5,068,285,242 153,996,676 5,543,464 19,141,722 6,759,953,129

31 December 2008 359,566,907 419,217,838 651,058,573 70,100,460 5,031,809,328 147,867,814 5,082,796 27,980,739 6,712,684,455

Depreciation included in consolidated statements of income

For the years ended 30 September 2008 (Baht 269 million included in manufacturing cost, and the balance in administrative expenses) 292,951,074

For the period as from 1 October 2008 to 31 December 2008 (Baht 63.2 million included in manufacturing cost, and the balance in administrative expenses) 72,541,714

(Unit: Baht)


Land,

leasehold and Machinery

Pumping building and Office Construction

Land plants Buildings improvements equipment equipment Vehicles in progress Total

Cost:

30 September 2008 317,197,440 499,594,743 720,688,043 101,833,778 5,894,835,937 312,588,488 3,882,009 18,141,724 7,868,762,162

Acquisitions - - - 1,585,890 940,082 5,154,609 - 13,115,766 20,796,347

Transfer in/(transfer out) - - - - 3,276,751 - - (3,276,751) -

Disposal/write off - - - - - - - - -



accounts - - - (52,000) - (263,151) - - (315,151)

31 December 2008 317,197,440 499,594,743 720,688,043 103,367,668 5,899,052,770 317,479,946 3,882,009 27,980,739 7,889,243,358

Accumulated depreciation:

30 September 2008 - 91,850,940 62,081,456 34,670,056 937,029,436 167,285,425 704,858 - 1,293,622,171

Disposal/write off - - - - - - - - -



accounts - - - (47,906) - (258,654) - - (306,560)

Depreciation for the year - 3,777,758 7,548,012 2,795,964 41,906,981 11,370,132 195,696 - 67,594,543

31 December 2008 - 95,628,698 69,629,468 37,418,114 978,936,417 178,396,903 900,554 - 1,360,910,154

Net book value:

30 September 2008 317,197,440 407,743,803 658,606,587 67,163,722 4,957,806,501 145,303,063 3,177,151 18,141,724 6,575,139,991

31 December 2008 317,197,440 403,966,045 651,058,575 65,949,554 4,920,116,353 139,083,043 2,981,455 27,980,739 6,528,333,204

Depreciation included in the separate statements of income

For the years ended 30 September 2008 (Baht 224 million included in manufacturing cost, and the balance in administrative expenses) 246,770,158

For the period as from 1 October 2008 to 31 December 2008 (Baht 58.5 million included in manufacturing cost, and the balance in administrative expenses) 67,594,543


As at 30 September 2008, the Company and its subsidiaries transferred certain fixed assets, which are not

currently in use and had net book value on the transfer date of approximately Baht 1.4 million, from �Property,

plant and equipment� accounts to �Unused assets� accounts, which were presented as a part of �Other

non-current assets� in the balance sheets.

As at 31 December 2008 and 30 September 2008, the Company and its subsidiaries had certain equipment

and fixtures, which were fully depreciated but are still in use. The original costs, before deducting accumulated

depreciation, of those assets amounted to approximately Baht 200.8 million and Baht 195.7 million, respectively

(The Company only: Baht 184.2 million and Baht 180.3 million respectively).

For the years ended 30 September 2008, the Company capitalised borrowing costs amounting to Baht 3.3

million, which were directly attributable to the construction of water distribution pipeline networks and new

office buildings, as a part of �Construction in progress� under the caption �Property, plant and equipment�.

Borrowing costs incurred from the Company�s long-term loans from financial institutions and debentures were

capitalized at the rate of 4.55 percent per annum, which is determined by dividing interest on long-term loans

and debentures, the principal amount of which not exceeding the capital expenditures, by the average capital

expenditures.

As at 30 December 2008 and 30 September 2008, the Company and it subsidiary had motor vehicles and

equipment under finance lease agreements with net book values amounting to Bath 7.1 million and Baht 7.7

million, respectively (the Company only: Baht 5.0 million and Baht 5.4 million, respectively).

20. Assets under concession contracts

(Unit: Baht)


Assets under

concession Construction

contracts in progress Total

Cost:

30 September 2008 455,547,790 6,927,645 462,475,435

Purchases 11,961,732 3,632,500 15,594,232

Transfer in (Transfer out) 2,625,000 (2,625,000) -

31 December 2008 470,134,522 7,935,145 478,069,667

Accumulated amortisation:

30 September 2008 81,469,303 - 81,469,303

Amortisation for the period 6,218,328 - 6,218,328

31 December 2008 87,687,631 - 87,687,631

Net book value:

30 September 2008 374,078,487 6,927,645 381,006,132

31 December 2008 382,446,891 7,935,145 390,382,036

Amortisation included in consolidated statements of income:

For the years ended 30 September 2008 24,574,830

For the period as from 1 October 2008 to 31 December 2008 6,218,328


For the period as from 1 October 2008 to 31 December 2008 and for the year 30 September 2008, amortisation

of assets under concession contracts amounting to Baht 6.2 million and Baht 24.6 million, respectively, were

included in �Costs of sales � tap water� and �Costs of services� in the statements of income.

The subsidiaries have committed to transfer assets under concession contracts to the Provincial Waterworks

Authority at the end of concession periods.

21. Deferred concession rights acquisition costs

(Unit: Baht)


Deferred

concession rights Construction

acquisition costs in progress Total

Cost:

30 September 2008 234,835,194 333,085,743 567,920,937

Acquisition - 17,810,458 17,810,458

31 December 2008 234,835,194 350,896,201 585,731,395


30 September 2008 46,405,821 - 46,405,821

Amortisation for the year 5,078,715 - 5,078,715

31 December 2008 51,484,536 - 51,484,536

Net book value:

30 September 2008 188,429,373 333,085,743 521,515,116

31 December 2008 183,350,658 350,896,201 534,246,859

Amortisation included in consolidated statements of income:

For the years ended 30 September 2008 14,509,566


There was no borrowing cost capitalised as asset by a subsidiary during the period as from 1 October 2008 to

31 December 2008 (For the year ended 30 September 2008: a subsidiary capitalised borrowing costs amounting

to Baht 4.4 million, incurred directly in respect of the concession rights acquisition costs as assets, under the

caption of �Construction in progress� in the �Deferred concession rights acquisition costs� account).

For the period as from 1 October 2008 to 31 December 2008 and for the year ended 30 September 2008,

amortisation of deferred concession rights acquisition costs amounting to Baht 5.1 million and Baht 14.5 million,

respectively, were included in �Costs of sales � tap water� and �Costs of services� in the statements of income.


22. Intangible asset

(Unit: Baht)

Consolidated

financial statements

Right - cost:

30 September 2007 201,205,413

31 December 2008 201,205,413


30 September 2007 38,504,494

Amortisation for the period 2,104,339

31 December 2008 40,608,833

Net book value:

30 September 2008 162,700,919

31 December 2008 160,596,580

Amortisation included in statements of income:

For the year ended 30 September 2008 8,348,738


Remaining amortisation periods:

30 September 2008 19 years 6 months

31 December 2008 19 years 3 months


amortisation of right amounting to Baht 2.1 million and Baht 8.3 million, respectively were included in

administrative expenses in the statements of income.

23. Bank overdraft and short-term loan from financial institutions

(Unit: Baht)




2008 2008 2008 2008

Bank overdrafts - 20,009,842 - 20,009,842

Short-term loans 7,500,000 52,000,000 - -

Total 7,500,000 72,009,842 - 20,009,842

As at 31 December 2008 and 30 September 2008, a subsidiary�s short-term loan of Baht 7.5 million and Baht

52 million from a financial institution carried interest at the rate of 4.95 and 5 percent per annum, respectively.


24. Liabilities under finance lease agreements

(Unit: Baht)




2008 2008 2008 2008

Liabilities under finance lease agreements 7,531,913 8,406,008 5,415,471 5,981,880

Less: Deferred interest expenses (424,793) (544,178) (303,455) (381,445)

Total 7,107,120 7,861,830 5,112,016 5,600,435

Less: Portion due within one year (3,559,376) (2,964,012) (2,039,439) (2,008,452)

Liabilities under finance lease agreements -

net of current portion 3,547,744 4,897,818 3,072,577 3,591,983

The Company and its subsidiary has entered into the finance lease agreements with leasing companies for

rental of motor vehicles and equipment for use in their operation, whereby it is committed to pay rental on a

monthly basis. The terms of the agreements are generally between 3 and 4 years. Finance lease agreements

can not be cancelled.

As at 31 December 2008, Future minimum lease payments required under the finance lease agreements were

as follows:

(Unit: Baht)


Less than 1 year 1-5 years Over 5 years Total

Future minimum lease payments 3,880,954 3,650,959 - 7,531,913

Deferred interest expenses (321,578) (103,215) - (424,793)

Present value of future minimum lease payments 3,559,376 3,547,744 - 7,107,120

(Unit: Baht)


Less than 1 year 1-5 years Over 5 years Total

Future minimum lease payments 2,265,636 3,149,835 - 5,415,471

Deferred interest expenses (226,197) (77,258) - (303,455)

Present value of future minimum lease payments 2,039,439 3,072,577 - 5,112,016


25. Long-term loans from financial institutions

(Unit: Baht)




2008 2008 2008 2008

Long-term loans from financial institutions 2,746,784,000 2,855,713,000 2,500,000,000 2,650,000,000

Less: Current portion (495,716,000) (420,716,000) (450,000,000) (375,000,000)

Long-term loans from financial institutions -

net of current portion 2,251,068,000 2,434,997,000 2,050,000,000 2,275,000,000

25.1 Long-term loans of the Company

(a) Loans from a financial institution - credit limit of Baht 2,000 million.

On 9 November 2005, the Company entered into a credit facility agreement with a local financial institution

for the credit limit of Baht 2,000 million, which is detailed as follows:

Credit facility : Baht 2,000 million consisting of- Tranche A amounting to Baht 1,500 million-

Tranche B amounting to Baht 500 million

Type of loan : Unsecured, with status equivalent to unsecured and unsubordinated debts

Period : 7 years

Interest rate : - Tranche A, interest is payable on a monthly basis at the following ratesYear

1-3 Fixed rate at 6.00 percent per annumYear 4-5 Minimum Loan Rate (MLR)

minus 1.50 percent per annum Year 6-7 Minimum Loan Rate (MLR) minus

0.75 percent per annum

- Tranche B, interest is payable on a monthly basis at the following ratesYear

1-5 Minimum Loan Rate (MLR) minus 1.50 percent per annumYear 6-7

Minimum Loan Rate (MLR) minus 0.75 percent per annum

Repayment Schedule : Principal is repayable in semi-annual installments, beginning after the grace

period of 18 months from the date of the first draw down (17 November 2005),

with installments to be allocated proportionally to Tranche A and Tranche B

loans.

During 2007, the Company received a letter from a financial institution informing it of an adjustment of the

interest rate for Tranche A and Tranche B (only the drawn-down portion) of the loans to be 4.50 percent

per annum, effective from July 2007 until the 5th year of the loan agreement (October 2010) whereby the

interest rate on the Tranch A and Tranch B (only the drawn-down portion) loans in the 6th-7th years and

the Tranche B (not-yet draw down) loans remains unchanged.


Under the loan agreements, the significant conditions that the Company is required to comply with are the

maintenance of a net debt to EBITDA ratio of not exceeding 4.5 times and the aggregate amount of

defaulted debts not exceeding 5% of shareholders� equity as shown in the annual consolidated financial

statements, etc. Furthermore, on 13 November 2007, the Company amended the credit facility agreement

with the financial institution whereby the financial institution agreed to modify the covenants in the agreement

by cancellation the event of default relating to the subsidiary and changed the maintenance of financial

ratio from maintaining the net debt to EBITDA ratio of not exceeding 4.5 times, calculated from the

consolidated financial statements, to maintaining the debt to equity ratio not exceeding 2 times and not

lower than 0 time, and a debt service coverage ratio (�DSCR�) of not lower than 1.10 times, etc., which are

to be calculated at the fiscal year-end from the latest audited consolidated financial statements.

The Company already drew down a total of Baht 1,775 million loan which comprised Tranche A loan

amounting to Baht 1,500 million and Tranche B loan amounting to Baht 275 million and as at 31 December

2008 and 30 September 2008, the Company has outstanding loans from the financial institution according

to such agreement amounting to Baht 1,050 million and Baht 1,150 million, respectively.

(b) Loans from a financial institution - credit limit of Baht 1,500 million

On 6 December 2007, the Company entered into a credit facility agreement with a local financial institution,

granting a credit limit of Baht 1,500 million to repay a bridging loan to the same financial institution, as

detailed below.

Credit facility : Baht 1,500 million


Period : 7 years

Interest rate : Interest is payable on a monthly basis and calculated based on the amount of

principal drawn down and yet to be repaid from the draw down date to the

repayment date, as follow:

- The 1st - 36th months Fixed rate at 4.80 percent per annum

- The 37th - 60th months Minimum Loan Rate (MLR) minus 1.75 percent per annum

- The 61st month onwards Minimum Loan Rate (MLR) minus 1.50 percent per annum

Repayment Schedule : Principal is repayable in 12 semi-annual installments, beginning after a grace

period of 12 months from the agreement date as scheduled below.

- The 1st - 6th installments Baht 50 million each

- The 7th - 12th installments Baht 200 million each

Under the above loan agreement, the financial institution requires the Company to comply with certain

covenants, such as maintaining a debt to equity ratio of not exceeding 2 times and a debt service coverage

ratio (�DSCR�) of not lower than 1.1 times, etc., which are to be calculated at the fiscal year-end from the

latest audited consolidated financial statements.

During 2008, the Company already drew down a full amount under such loan agreement and as at 31

December 2008 and 30 September 2008, the Company had outstanding loans from the financial institution

according to such loan agreement amounting to Baht 1,450 million and Baht 1,500 million, respectively.


(c) Loan from a financial institution - credit limit of Baht 1,000 million

On 3 December 2007, the Company entered into a credit facility agreement with a local financial institution,

granting a credit limit of Baht 1,000 million to finance the issuance of and underwriting the debentures and

the Company�s investing activities as detailed below.

Credit facility : Baht 1,000 million, draw down in installments as required.


Period : 7 years

Interest rate : Interest is payable on a monthly basis and calculated based on the amount of

principal drawn down and yet to be repaid from the draw down date to the

repayment date as follows

- The 1st - 12th months Minimum Loan Rate (MLR) minus 2.0 percent per annum

- The 13th - 48th months Minimum Loan Rate (MLR) minus 1.75 percent per annum

- The 49th month onwards Minimum Loan Rate (MLR) minus 1.50 percent per annum

Repayment Schedule : Principal is repayable equally in 12 semi-annual installments, beginning after

the grace period of 18 months from the first draw down date and to be completed

within 84 months from the first draw down date.

Under the above loan agreement, the financial institution required the Company to comply with certain

covenants, such as maintaining a debt to equity ratio of not exceeding 2 times and not lower than 0 time,

and a debt service coverage ratio (�DSCR�) of not lower than 1.1 times, etc., which are to be calculated at

the fiscal year-end from the latest audited consolidated financial statements.

As at 31 December 2008 and 30 September 2008, the Company has not drawn down under this loan

facility.

25.2 Long-term loans of subsidiary - Universal Utilities Company Limited

(a) On 24 April 2006, Universal Utilities Company Limited, a subsidiary, entered into a credit facility agreement

with a local financial institution for a credit limit of Baht 240 million. The loan carries interest at the Minimum

Loan Rate (MLR) minus 1.5% per annum for the first forty eighth months, and thereafter at MLR minus

0.75% per annum until maturity. Interest is payable on a monthly basis. The principal is to be repaid in 22

quarterly installments of Baht 10.9 million each, commencing the eighteenth month after the agreement

date. Subsequently on 9 May 2007, the subsidiary amended the credit facility agreement with the

financial institution that principal repayments are rescheduled to be made in 21 quarterly installments of

Baht 11.4 million each.

As at 31 December 2008 and 30 September 2008, the subsidiary had outstanding loans according to

such agreements totalling approximately Baht 194.3 million and Baht 205.7 million, respectively.

(b) On 15 December 2008, the subsidiary entered into a credit facility agreement with a local financial institution

for a credit limit of Baht 200 million. Up to 31 December 2008, the subsidiary had already drawn down of

Baht 52.5 million under such loan agreement. The loan carries interest at the Minimum Loan Rate (MLR)

minus 1.75% per annum for the first fourth year, and thereafter at MLR minus 1.5% per annum until maturity.

Interest is payable on a monthly basis. The principal is to be repaid in 23 quarterly installments of Baht


8.75 million each, except for the twenty third installment of Baht 7.5 million commencing the eighteenth

month after the agreement date.

As at 31 December 2008, the subsidiary had outstanding loans according to such agreements totalling

approximately Baht 52.5 million.

26. Share capital

On 24 January 2008, the Annual General Meeting of the shareholders of the Company approved the reduction

of the Company�s registered share capital from 1,665,000,000 ordinary shares at a par value of Baht 1 each to

be 1,663,725,149 ordinary shares at a par value of Baht 1 each through the cancellation of 1,274,851 unissued

ordinary shares with a par value of Baht 1 each, previously reserved to accomodate the exercise of warrants,

which expired.

During the year ended 30 September 2008, the Company registered the increases in its issued and paid-up

share capital totaling Baht 317.3 million as a result of the shares offered and the rights exercised by warrant

holders. This resulted in an increase of Baht 951.2 million in share premium. As at 30 September 2008, the

Company�s issued and paid-up share capital is therefore Baht 1,663.7 million.

Reconciliation of ordinary share capital and share premium

Ordinary share capital

Number of shares Amount Share premium

Baht Baht

Balance as at 30 September 2007 1,346,394,130 1,346,394,130 1,187,358,422

Increased share capital during the year 317,331,019 317,331,019 951,163,857

Balance as at 30 September 2008 1,663,725,149 1,663,725,149 2,138,522,279

Increased share capital during the period - - -

Balance as at 31 December 2008 1,663,725,149 1,663,725,149 2,138,522,279

27. Warrants

The warrants issued to the Company�s employees, directors and advisors to the Company�s Board of Director

(EASTW-WA) and the warrants issued to the Company�s existing shareholders and general public (EASTW-

W1) were expired in December 2007. Movements in the number of warrants during the year ended 30 September

2008 were as follows:

(Unit: Units)

Warrant issued to

the Company�s Warrant issued to

employees, the Company�s

directors and existing shareholder

advisors and general public Total

Number of warrants as at 30 September 2007 251,400 289,986,940 290,238,340

Less: Exercised during the year (251,400) (288,712,089) (288,963,489)

Expired during the year - (1,274,851) (1,274,851)

Number of warrants as at 30 September 2008 - - -


28. Assets transferred from customers

Assets transferred from customers represent water distribution pipeline systems and water measured equipment

transferred to the Company by customers in accordance with the water supply agreement.

29. Statutory reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside

a statutory reserve at least 5 percent of its net income for the year after deducting accumulated deficit brought

forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not

available for dividend distribution.

30. Dividends

The Company

On 24 January 2008, the Annual General Meeting of the Company�s shareholders approved a dividend payment

of Baht 0.25 per share for 2007 fiscal year, totalling Baht 416 million, to the Company�s shareholders. The

Company paid such dividend on 20 February 2008.

Subsidiary

On 30 September 2008, the Extraordinary General Meeting of the Shareholders No. 4/2551 of Universal Utilities

Company Limited, a subsidiary, approved the payment of a dividend of Baht 0.55 per share to its shareholders,

or a total of Baht 28 million. The dividend is to be paid in a monthly basis of Baht 4.675 million each from

October 2008 to March 2009.

On 2 August 2007, the Extraordinary General Meeting of the Shareholder No. 5/2550 of Universal Utilities

Company Limited, a subsidiary, approved the payment of a dividend of Baht 1.373 per share to its shareholders,

or a total of Baht 70 million. The dividend payments were made in two quarters, on 31 October 2007 and 31

January 2008.


31. Expenses by nature

Significant expenses by nature are as follow:

(Unit: Baht)

Consolidated financial Separate financial

statements statements

For the period as For the period as

from 1 October For the year from 1 October For the year

2008 to 31 ended 30 2008 to 31 ended 30

December 2008 September 2008 December 2008 September 2008

Electricity expenses 91,743,210 343,368,633 68,919,619 264,137,419

Depreciation and amortisation expenses 85,943,096 340,384,207 67,594,543 246,770,158

Hiring and service expenses 73,120,541 168,554,022 6,954,026 28,451,485

Salary and wages and other employee benefits 38,101,084 159,689,292 26,878,118 100,711,348

Purchases of raw water 28,621,451 120,382,928 26,321,767 113,375,270

Repair and maintenance expenses 11,988,366 50,531,074 6,651,092 35,481,712

Rental expenses 11,571,584 43,983,115 9,378,413 36,768,458

Raw materials and consumables used 8,232,701 23,557,374 - -

Losses on impairment and diminution in value of

assets and provision for doubtful accounts 17,167,141 35,770,685 16,894,136 34,344,932

Waterworks management expense - - 39,379,797 141,890,882

32. Directors� remuneration

Directors� remuneration represents the benefits paid to the Company�s directors in accordance with Section

90 of the Public Limited Companies Act, exclusive of salaries, bonus and related benefits payable to

management.

33. Provident fund

The Company and its subsidiary, which is Universal Utilities Company Limited, and employees have established

a provident fund in accordance with the Provident Fund Act B.E. 2530. The employees are required to contribute

to the fund at the rates of 3% to 10% of their basic salaries while the Company and its subsidiaries are required

to contribute at the rates of 5% to 10% of the employees� basic salaries. This provident fund, which is managed

by Kasikorn Asset Management Company Limited, will be paid to employees upon termination in accordance

with the fund rules.


approximately Baht 1.9 million and Baht 7.2 million, respectively, were contributed to the fund by the Company

and its subsidiaries (The Company only: Baht 1.2 million and Baht 4.3 million, respectively).

34. Income tax

Corporate income tax was calculated on net income before income tax after adding back non-tax deductible

expenses and deducting tax-exempted income.


35. Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted average number of ordinary

shares in issue during the period.

36. Commitments and contingent liabilities

The Company and its subsidiaries had the following commitments and contingent liabilities.

36.1 Capital commitments

As at 31 December 2008 and 30 September 2008, the Company and its subsidiaries had commitments in

respect of in-progress construction of Baht 323.5 million and Baht 331.6 million, respectively (The Company

only: Baht 265.2 million and Baht 252.2 million, respectively).

36.2 Operating lease commitments

The Company and its subsidiaries have entered into several lease agreements in respect of the lease of motor

vehicles and equipment. The terms of the agreements are generally between 1 and 3 years. Operating lease

agreements are non-cancelable.

As at 31 December 2008 and 30 September 2008, future minimum lease payments required under these non-

cancellable operating leases contracts were as follows.

(Unit: Million Baht)




2008 2008 2008 2008

Payable within:

Less than 1 year 6.3 13.0 5.2 12.1

1 to 5 years 2.9 2.1 2.4 1.7

36.3 Raw materials purchase agreement and long-term service commitments

36.3.1 As at 31 December 2008 and 30 September 2008, the Company had a raw water purchase agreement

with the Royal Irrigation Department whereby it is to purchase raw water at the price specified in a

Ministerial Regulation.

36.3.2 As at 31 December 2008 and 30 and 30 September 2008, the Company had a raw water purchase

agreement with Siam Water Resource Company Limited as described in Notes 37.6 to the financial

statements.

36.3.3 As at 31 December 2008 and 30 September 2008, the Company and its subsidiaries had commitments

in respect of service agreements payable in the future of approximately Baht 355.5 million and Baht

114.8 million, respectively (The Company only: Baht 53.8 million and Baht 28.0 million, respectively).


36.4 Guarantees

36.4.1 As at 31 December 2008 and 30 September 2008, the Company and its subsidiaries had letters of

guarantee totaling Baht 260.9 million and Baht 268.2 million, respectively (The Company only: Baht

55.9 million and Baht 59.0 million, respectively) issued by banks to the Provincial Electricity Authority

for electricity consumption, to the Ministry of Finance for management and operation of the major water

distribution pipeline systems in the Eastern Seaboard area, and to counterparties for bid bonds and

performance bonds.

36.4.2 As at 31 December 2008 and 30 September 2008, a subsidiary had contingent liabilities in respect of

being a guarantor to its three subsidiaries in a credit limit of Baht 200 million for letters of guarantee

issued by local commercial banks to those subsidiaries for compliance to agreements with respect to

their electricity consumption guarantee, tap water production and distribution and water consumers

information records.

36.5 Litigation

As at 31 December 2008 and 30 September 2008, the Company and its subsidiary were sued as defendants

in litigation cases with significant claim as follow.

36.5.1 On 28 March 2003, the Company was sued as a defendant in a litigation case in connection with the

purchase of assets from the Legal Execution Department. The plaintiff petitioned the civil court to void

the sales transaction or order the payment of compensatory damages amounting to Baht 302.2 million

to the plaintiff. However, on 26 January 2006, the Court of First Instance issued an order dismissing the

lawsuit and later the plaintiff lodged an appeal with the Court of Appeal on 22 March 2006. The Company

has already made its plea contesting the plaintiff�s appeal and as at 31 December 2008 and 30

September 2008, the case is currently being heard by the Appeal Court. The Company�s management

believes that should the outcome of the case be finalised, there would be no significant loss to the

Company. Therefore, the Company has not yet provided for any loss in the accounts.

36.5.2 Universal Utilities Company Limited, a subsidiary was sued as a co-defendant together with the Provincial

Waterworks Authority (�PWA�) in a case brought in connection with illegal acts performed by

administrative agencies or state officials. The plaintiff petitioned the administrative court to void the

selection process by which a private operator was selected to produce tap water for distribution to the

PWA in the area belonging to the Rayong Waterworks. On 16 March 2007, the Rayong Administrative

Court ordered the selection process voided in accordance with the plaintiff�s petition, and also declared

void the agreement appointing a private firm to produce water for sale to the Rayong Waterworks,

which had resulted from an illegal selection process. However, the PWA and the subsidiary lodged

appeals with the Rayong Administrative Court on 12 April 2007 and the Rayong Administrative Court

has issued a court receipt for such appeal and then passed it to the Supreme Court. The case is

currently being heard by the Supreme Court under the court receipt No. Aor. 278/50. Since PWA and

the subsidiary have to comply with conditions in the agreement and are further obliged to each other

as stipulated in the agreement until the case is finalised, in accordance with Section 70 of the Royal


Decree on Establishment of and Procedures for Administrative Court Act B.E. 2542, the Company�s

management therefore believes that the subsidiary will incur no losses as a result of the termination of

the agreement because, if such a termination occurs the PWA will have to compensate the subsidiary

for costs of construction and improvements made to the waterworks, and for other expenses incurred

by the subsidiary. Therefore, no provision has yet been made in the accounts.

36.5.3 On 20 October 2008, the Company was sued by a company in a lawsuit with a black case number

5930/2551 regarding a breach of a construction agreement. The litigation filed with the Civil Court by

the plaintiff requested that the Company pay damages totaling Baht 40.2 million.

On 29 December 2008, the Company filed a lawsuit with a black case number 6848/2551 regarding a

breach of a construction contract, suing the aforementioned company and a local commercial bank as

the work guarantor of that company. The litigation filed with the Civil Court by the Company requested

that the defendants pay damages totaling Baht 37.4 million.

On 26 January 2009, the Civil Court set a date for the settlement of issues under the lawsuit with the

black case number 5930/2551. However, the attorney of the Company has petitioned the Court to

merge the settlement of issues of the lawsuit with the black case number 6848/2551 to be in one case

since both cases are based on the same factual information. The Court has considered the request

and has set a date for the settlement of issues of these two lawsuits on 23 March 2009.

37. Significant agreements

Beside the lending and borrowing agreements as discussed in relevant notes to financial statements, the

Company and its subsidiaries have the following significant agreements.

The Company

37.1 The Company entered into an agreement dated 26 December 1993 with the Ministry of Finance to manage

and operate the major water distribution pipeline systems in the Eastern Seaboard area. The contract term is

30 years, from 1 January 1994 to 30 September 2023 and the Company is required to pay a minimum of Baht

2 million per annum to the Ministry of Finance. In any years when the Company�s revenues from the sales of

raw water exceed Baht 200 million, it is required to pay the Ministry of Finance with a sharing benefit at a rate

of 1 percent of sales of raw water from the Nong Khor and Dok Krai reservoirs. In addition, when the Company�s

annual rate of return on equity exceeds 20 percent, an additional sharing benefit at the rate of 15 percent of the

return in excess of the paid 20 percent is to be paid to the Ministry of Finance. Nevertheless, the total sharing

benefit is not to exceed 6 percent of the real value of the assets leased from the Ministry of Finance, as

assessed according to the agreed time frame.

37.2 On 15 November 2000, the Company entered into an agreement with Universal Utilities Company Limited, a

subsidiary, to receive waterworks management services for Sattahip Waterworks of the Provincial Waterworks

Authority for the period of 10 years. The Company will pay the management fee from revenue after deducting

license fee and related expenses as specified in the agreement. Moreover, the Company will receive the profit

sharing from the subsidiary under the conditions specified in the agreement. Under the agreement, the subsidiary

is to invest a total of Baht 16 million for the expansion of the water distribution area, a total of Baht 12 million for


installation of centralised Supervisory Control and Data Acquisition (SCADA) and Geographic Information

System (GIS) in order to improve the management system. Subsequently on 18 October 2004, the Company

amended the above-mentioned agreement to extend to the Pattaya Waterworks. Consequently, the subsidiary

is entitled to manage water system of Sattahip Waterworks for a period of 30 years from 1 March 2001 but not

exceeding the period the Provincial Waterworks Authority has granted the Company the rights to operate and

manage the Sattahip Waterworks System.

37.3 On 28 November 2000, the Company entered into an agreement with Universal Utilities Company Limited

whereby it grants the subsidiary the rights to operate the waterworks of the Municipality of Si Chang Island

Sub-district for a period of 15 years. The subsidiary is to pay in return to both the Municipality of Si Chang

Island Sub-district and the Company at the rates as specified in the agreement.

37.4 On 11 May 2004, the Company entered into a waterworks management agreement with Universal Utilities

Company Limited (the subsidiary) whereby the subsidiary is to provide water works management services in

Bo Win Municipal area for a period of 25 years from the date the subsidiary completed the construction works

of tap water production system and the Company agreed for commercial distribution of tap water (11 March

2005). Under the agreement, the subsidiary is to procure land and construct tap water production system

sufficient to supply tap water throughout the agreement period. The subsidiary is to transfer all the invested

assets to the Company and/or the Municipality on the earlier expiry date of the waterworks operation agreement

or the waterworks management agreement. The Company is to pay an annual waterworks management fee at

the rates specified in the agreement, determined on the monthly tap water sales and service fees, which can

be collected from the users.

Since later on 5 August 2005 the Company entered into a waterworks system operation and management

agreement with the Bo Win Sub-district Administration Organization (�SAO�), it therefore revised the

aforementioned agreement with the subsidiary to cover Bo Win SAO area. As a result the aforementioned

agreement was superseded and the new agreement dated 14 July 2006, having the same conditions with an

additional area of Bo Win SAO, is replaced.

37.5 On 7 July 2004, the Company entered into a water supply agreement for the Koh Samui Waterworks with

Universal Utilities Company Limited for a 15-year period from the first water distribution date (12 May 2005)

whereby the subsidiary agreed to construct the reverse osmosis water production system with the water pipeline

connected to both the water distribution pipeline of the purchasers in the specified area and the Provincial

Waterworks Authority, and sell the tap water produced under such system for a return determined at the rates

as specified in the agreement of the volume actually received by the purchasers. The rates will be adjusted

annually.

37.6 On 13 December 2007, the Company has entered into the raw water procurement agreements with Siam

Water Resource Company Limited whereby the Company is required to purchase a minimum of 10 million

cubic meters per annum for a price of 6 Baht per cubic meter over a 10-year period. The price shall be

adjusted based on the change of electricity price in accordance with the fuel adjustment charge (Ft) rate,

announced by Provincial Electricity Authority.


The Subsidiaries

37.7 Chachoengsao Water Supply Company Limited entered into the concession agreement dated 9 November

2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the

Provincial Waterworks Authority at Chachoengsao office, Chachoengsao province. The concession period is

25 years from the date that first income is derived from selling tap water (1 April 2003).

37.8 Bangpakong Water Supply Company Limited entered into the concession agreement dated 9 November 2000

with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the

Provincial Waterworks Authority at Bangpakong office, Chachoengsao province. The concession period is 25

years from the date that first income is derived from selling tap water (1 April 2003).

37.9 Nakornsawan Water Supply Company Limited entered into the concession agreement dated 7 November

2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the

Provincial Waterworks Authority at Nakornsawan office, Nakornsawan province. The concession period is 25

years from the date that first income is derived from selling tap water (1 March 2003).

37.10Chachoengsao Water Supply Company Limited and Bangpakong Water Supply Company Limited entered into

a know-how agreement dated 1 December 2000 with Australian Water Technologies PTY Limited of Australia,

which transferred its entitlements under this agreement to AWT International (Thailand) Limited on 15 October

2002, whereby the latter agreed to permit the use of its name for reference purposes and provide the know-

how to enable the said subsidiaries to perform their obligations under concession agreements for a period of

25 years from the first date of sales of tap water under the concession agreements. In consideration thereof,

the subsidiary companies agree to pay fees at the rate stipulated in the agreement.

37.11 On 27 September 2002, Eastern Hobas Pipes Company Limited entered into a License and Know-How Transfer

Agreement with a related company in Austria, whereby the latter grants the subsidiary the exclusive right to

manufacture products in accordance with know-how and patents rights as well as the non-exclusive right to

market and sell the products within the territory specified in the agreement. In consideration thereof, the

subsidiary is committed to pay a royalty fee at a certain percentage based on the net sales value of the

products manufactured, by the subsidiary�s plant, based on the ex-works price as invoiced to customers, as

specified in the agreement. The term of the agreement is 10 years and it is renewable for another term of 5

years. However, the Company disposed investment in such company on 31 March 2008 as described in

Notes 17 to the financial statements.

37.12 On 24 March 2004, Universal Utilities Company Limited entered into an agreement with Egcom Tara Company

Limited, a related company, to produce tap water and to provide maintenance services for the tap water

production system and tap water distribution pipeline of the production plants situated in Lak Muang, Ratchaburi

province and Pangpuoy, Samut Songkram province. The agreement period is 6 years and stipulates an annual

fee, with payment to be made on a monthly basis and adjusted to the actual amount at the end of each year in

accordance with the guidelines and conditions stipulated in the agreement.


37.13 On 14 March 2006, Universal Utilities Company Limited and its subsidiaries entered into an agreement with a

private company allowing the private company to produce tap water for sales to Rayong Waterworks, Rayong

province and the Provincial Waterworks Authority for a 25-year period commencing from the first tap water

selling date (12 July 2006). Under the agreement, the subsidiaries are required to construct tap water production

system, water delivery system and water distribution system, and to expand the production capacity of the

existing tap water distribution system of Rayong Waterworks. The subsidiaries are also required to provide

maintenance services and to act on behalf of the Provincial Waterworks Authority in any related matters.

Ownership of assets, which have been constructed, repaired and expanded by the subsidiaries, is to be

transferred to the Provincial Waterworks Authority immediately upon completion of these activities, with the

subsidiaries having the rights to occupy the assets in order to produce and supply tap water to the Provincial

Waterworks Authority over the agreement period. The subsidiaries will receive income at the rates prescribed

in the agreement and the rates will be adjusted annually.

38. Financial information by segment

The Company and its subsidiaries have been operating the businesses of producing water for sales, managing

water distribution networks in the Eastern Seaboard areas of Thailand, doing waste water treatment and related

businesses, producing water distribution pipeline for sales, selling drinking water through water vending

machines, and producing and providing installation services of water vending machines. These business

operations are conducted only in one geographical area, which is Thailand. Although the Company and its

subsidiaries have been operating in a variety of business relating to producing and selling water. Their

managements consider the Group�s core businesses are raw water distribution business, tap water distribution

business, water pipeline distribution business, waterworks management and water loss reduction project. The

financial information of the Company and its subsidiaries is therefore presented by such business segments.

The segment information for the years ended 31 December 2008 and 30 September 2008 is summarised as

follows:


38.1 Operating results by business segment



For the period as from 1 October 2008 to 31 December 2008

Sales - other Service income

Raw water Tap water Waterworks Water loss

distribution distribution management reduction

business business Others business project Others Elimination Total

Revenue

Revenue from external customers 393,114 144,744 195 10,725 47,995 14,723 - 611,496

Inter-segment revenue 25,810 - 27 50,955 - 1,245 (78,037) -

Total revenue 418,924 144,744 222 61,680 47,995 15,968 (78,037) 611,496

Cost of sales/services (177,625) (99,992) (379) (56,025) (48,599) (10,952) 77,277 (316,295)

Operating profit

Segment operating profit (loss) 241,299 44,752 (157) 5,655 (604) 5,016 (760) 295,201

Unallocated revenue/expenses

Interest income and dividend income 19,755

Other income 3,058

Selling and servicing expenses (6,953)

Administrative expenses (76,877)

Finance cost (34,459)

Income tax (53,535)

Net income 146,190



For the year ended 30 September 2008

Sales - other Service income

Raw water Tap water Water pipeline Waterworks Water loss

distribution distribution distribution management reduction

business business business(1)

Others business project Others Elimination Total

Revenue

Revenue from external customers 1,672,600 541,146 18,886 3,079 28,708 73,609 40,898 - 2,378,926

Inter-segment revenue 80,120 - - 1,376 197,307 - 7,663 (286,466) -

Total revenue 1,752,720 541,146 18,886 4,455 226,015 73,609 48,561 (286,466) 2,378,926

Cost of sales/services (714,482) (367,883) (16,980) (4,299) (184,937) (72,028) (49,513) 280,679 (1,129,443)

Operating profit

Segment operating profit (loss) 1,038,238 173,263 1,906 156 41,078 1,581 (952) (5,787) 1,249,483



Other income 13,538




Income tax (180,812)

Net income 536,726

(1)This business segment is operated by Eastern Hobas Pipes Company Limited, in which the Company disposed its investment to an unrelated company on

31 March 2008.




For the period as from 1 October 2008 to 31 December 2008

Sales

Raw water water Tap

distribution distribution Service

business business Others income Total

Revenue

Revenue from external customers 393,113 50,770 181 7,740 451,804

Inter-segment revenue 25,811 - 27 761 26,599

Total revenue 418,924 50,770 208 8,501 478,403

Cost of sales/services (177,625) (50,513) (375) (5,999) (234,512)

Operating profit

Segment operating profit (loss) 241,299 257 (167) 2,502 243,891



Other income 2,296




Income tax (43,056)

Net income 126,567



For the year ended 30 September 2008

Sales

Raw water water Tap

distribution distribution Service

business business Others income Total

Revenue

Revenue from external customers 1,672,600 185,922 716 14,325 1,873,563

Inter-segment revenue 80,120 - 1,376 2,796 84,292

Total revenue 1,752,720 185,922 2,092 17,121 1,957,855

Cost of sales/services (714,482) (183,946) (2,322) (18,036) (918,786)

Operating profit

Segment operating profit (loss) 1,038,238 1,976 (230) (915) 1,039,069



Other income 3,847




Income tax (135,632)

Net income 518,678


38.2 Asset information by business segment



As at 31 December 2008

Raw water Tap water Waterworks

distribution distribution management Unallocated

business business business assets(1)

Elimination Total

Property, plant and equipment - net 5,831,897 10,523 171,455 698,809 - 6,712,684

Assets under concession

contracts - net - 266,600 123,782 - - 390,382

Deferred concession rights

acquisition costs - net - 410,109 124,138 - - 534,247

Inventories - net - 9,516 - 953 - 10,469

Trade accounts receivable - net 150,436 33,259 38,904 11 (48,527) 174,083

Unbilled receivable - 65,972 - - - 65,972

Service income receivable - - 50,182 - - 50,182

Unallocated assets (1)

- - - 2,462,915 (1,058,791) 1,404,124

Total assets 5,892,333 795,979 508,461 3,162,688 (1,107,318) 9,342,143

(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the Company and its subsidiaries

cannot allocate them to each business segment.



As at 30 September 2008

Raw water Tap water Waterworks

distribution distribution management Unallocated

business business business assets(1)

Elimination Total

Property, plant and equipment - net 5,870,376 12,304 170,145 707,128 - 6,759,953

Assets under concession

contracts - net - 264,900 116,106 - - 381,006

Deferred concession rights

acquisition costs - net - 392,945 128,570 - - 521,515

Inventories - net - 9,140 - 9,060 - 18,200

Trade accounts receivable - net 155,834 49,442 45,175 - (54,248) 196,203

Unbilled receivable - 60,147 - - - 60,147

Service income receivable - - 27,224 - - 27,224


- - - 2,217,310 (851,012) 1,366,298

Total assets 6,026,210 788,878 487,220 2,933,498 (905,260) 9,330,546

(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the Company

and its subsidiaries cannot allocate them to each business segment.





Raw water Tap water

distribution distribution Unallocated

business business assets (1)

Total

Property, plant and equipment - net 5,831,897 1,656 694,780 6,528,333

Inventories - net - - 167 167

Trade accounts receivable - net 150,436 25,157 - 175,593


- - 2,014,760 2,014,760

Total assets 5,982,333 26,813 2,709,707 8,718,853

(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the

Company cannot allocate them to each business segment.




Raw water Tap water

distribution distribution Unallocated

business business assets (1)

Total

Property, plant and equipment - net 5,870,376 1,792 702,972 6,575,140

Inventories - net - - 8,228 8,228

Trade accounts receivable - net 155,834 21,777 - 177,611


- - 1,994,788 1,994,788

Total assets 6,026,210 23,569 2,705,988 8,755,767

(1)Such assets are current assets and/or assets, which have been commonly used in every business segments, and thus the

Company cannot allocate them to each business segment.

39. Sale of raw water and tap water by distribution networks/areas

39.1 Sales of raw water

(a) Sales volume of raw water classified by water distribution networks

(Unit: Million Litres)


For the period as from

1 October 2008 to For the year ended


Nong Pla Lai - Map Ta Pud Network 15,659 70,000

Dok Krai - Map Ta Pud Network 13,592 58,869

Chachoengsao - Chonburi Network 18,454 80,605

Nong Pla Lai - Nong Khor Network 4,155 18,211

Total 51,860 227,685


(b) Sales, costs of sales and gross profit of raw water



For the period as from 1 October 2008 For the year ended

to 31 December 2008 30 September 2008

Costs of Gross Costs Gross

Sales sales profit Sales of sales profit

Nong Pla Lai - Map Ta Pud Network 127,132 (31,079) 96,053 595,001 (148,724) 446,277

Dok Krai - Map Ta Pud Network 119,587 (30,279) 89,308 469,142 (129,551) 339,591

Chachoengsao - Chonburi Network 139,296 (100,677) 38,619 545,429 (374,847) 170,582

Nong Pla Lai - Nong Khor Network 32,909 (15,589) 17,320 143,148 (61,360) 81,788

Total 418,924 (177,624) 241,300 1,752,720 (714,482) 1,038,238

Sales of raw water from Chachoengsao - Chonburi Network consisted of:






Nong Khor - Laem Chabang Network 1 88,148 371,909

Nong Khor - Laem Chabang Network 2 30,313 95,474

Chachoengsao Network 20,835 78,046

Total 139,296 545,429

(c) Property, plant and equipment, classified by raw water distribution network



Net book value 31 December 2008 30 September 2008

Nong Pla Lai - Map Ta Pud Network 883,367 873,554

Dok Krai - Map Ta Pud Network 91,464 93,901

Chachoengsao -Cholburi Network 4,729,594 4,753,666

Nong Pla Lai - Nong Khor Network 127,472 129,255

Total 5,831,897 5,850,376


(d) Proportion of raw water sold to end users

(Unit: Percentage)





Industrial Estate 47 52

Waterworks Authority 38 31

Factories 15 17

Total 100 100

39.2 Sales of tap water

(a) Sales volume of tap water by area

(Unit: Million Litres)

Consolidated financial Separate financial

statements statements


as from For the year as from For the year

1 October 2008 ended 1 October 2008 ended

to 31 December 30 September to 31 December 30 September

2008 2008 2008 2008

Chachoengsao waterwork 2,649 9,723 - -

Bangpakong waterwork 2,985 10,410 - -

Nakornsawan waterwork 620 2,403 - -

Sattahip waterwork 2,593 9,657 2,593 9,657

Koh Samui waterwork 232 875 232 875

Koh Sichang waterwork 6 36 6 36

Borwin waterwork 215 798 215 798

Koh Lan waterwork 13 60 13 60

Rayong waterwork 3,497 13,571 - -

Total 12,810 47,533 3,059 11,426


(b) Sales, costs of sales and gross profit of tap water



For the period as from 1 October For the year ended

2008 to 31 December 2008 30 September 2008

Costs o Gross Costs of Gross

Sales f sales profit Sales sales profit

Chachoengsao waterwork 26,780 (11,752) 15,028 99,940 (45,457) 54,483

Bangpakong waterwork 26,325 (11,528) 14,797 100,011 (41,232) 58,779

Nakornsawan waterwork 7,023 (3,963) 3,060 27,164 (15,781) 11,383

Sattahip waterwork 35,041 (34,811) 230 124,234 (122,849) 1,385

Koh Samui waterwork 11,692 (11,575) 117 2,634 (2,656) (22)

Koh Sichang waterwork 421 (421) - 44,209 (43,768) 441

Borwin waterwork 2,852 (2,950) (98) 11,265 (11,106) 159

Koh Lan waterwork 763 (755) 8 3,580 (3,567) 13

Rayong waterwork 33,847 (22,255) 11,592 128,109 (81,467) 46,642

Eliminated - 25,855 25,855 - 123,963 123,963

Total 144,744 (74,155) 70,589 541,146 (243,920) 297,226



For the period as from 1 October For the year ended

2008 to 31 December 2008 30 September 2008

Costs o Gross Costs of Gross

Sales f sales profit Sales sales profit

Chachoengsao waterwork - - - - - -

Bangpakong waterwork - - - - - -

Nakornsawan waterwork - - - - - -

Sattahip waterwork 35,041 (34,811) 230 124,234 (122,849) 1,385

Koh Samui waterwork 11,692 (11,575) 117 44,209 (43,768) 441

Koh Sichang waterwork 421 (421) - 2,634 (2,656) (22)

Borwin waterwork 2,852 (2,950) (98) 11,265 (11,106) 159

Koh Lan waterwork 763 (755) 8 3,580 (3,567) 13

Rayong waterwork - - - - - -

Total 50,769 (50,512) 257 185,922 (183,946) 1,976


(c) Property, plant and equipment, assets under concession contracts and deferred concession rights

acquisition costs classified by tap water area

(Unit: Thounsand Baht)




Net book value 2008 2008 2008 2008

Chachoengsao waterwork 129,849 130,520 - -

Bangpakong waterwork 137,252 135,001 - -

Nakornsawan waterwork 66,455 68,751 - -

Sattahip waterwork 156,733 161,242 1,656 1,792

Koh Samui waterwork 164,496 162,316 - -

Koh Sichang waterwork 25,949 26,713 - -

Borwin waterwork 37,353 29,198 - -

Koh Lan waterwork 35,345 35,099 - -

Rayong waterwork 353,175 336,130 - -

Total 1,106,607 1,084,970 1,656 1,792

40. Financial instruments

Financial risk management

The Company�s and its subsidiaries�s financial instruments, as defined under Thai Accounting Standard No.

48 �Financial Instruments: Disclosure and Presentations�, principally comprise cash and cash equivalents,

securities purchased under resale agreement, trade accounts receivable, short-term and long-term lendings,

investments, bank overdrafts, short-term and long-term loans, retentions payable, liabilities under finance

lease agreements. The financial risks associated with these financial instruments and how they are managed

is discussed below.

40.1 Credit risk

The Company and its subsidiaries are exposed to credit risk primarily with respect to securities purchased

under resale agreement, trade accounts receivable, short-term and long-term lendings, and other receivable.

The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and

procedures and therefore does not expect to incur material financial losses. Although the Company and its

subsidiaries may expose to concentration risk due to their having a few large customers, those customers are

in government sector. The management believes that such risk is therefore low. The maximum exposure to

credit risk is limited to the carrying amounts of securities purchased under resale agreement, trade accounts

receivables, short-term and long-term loans and other receivable as stated in the balance sheets.

40.2 Interest rate risk

The Company�s and its subsidiaries�s exposure to interest rate risk relate primarily to their deposits with financial

institutions, securities purchased under resale agreement, short-term and long-term lendings, investments,

short-term and long-term borrowings and liabilities under finance lease agreements. Although most of the


Company�s and its subsidiaries�s financial assets bear fixed interest rates, they have repricing periods of less

than 1 year. Their liabilities are also charged with fixed rates of interest but those rates are lower than current

market rate. Hence, the interest rate risk is expected to be minimal.

As at 31 December 2008 and 30 September 2008, financial assets and liabilities, classified by interest rate

types, are as follows:



Outstanding balances of financial instruments as at 31 December 2008

Floating Fixed Non-interest

interest rates interest rates bearing Total

Financial assets

Cash and cash equivalents 101,339 - 726 102,065

Securities purchased under resale agreement - 261,010 - 261,010

Current investments - 83,584 - 83,584

Trade accounts receivable - net - - 174,083 174,083

Service income receivable from related party

- billed - - 27,478 27,478

Dividend receivable from a related party - - 8,088 8,088

Other receivables - related parties - - 6 6

Restricted bank deposits - 9,076 - 9,076

Other receivable - - 642,199 642,199

101,339 353,670 852,580 1,307,589

Financial liabilities

Bank overdraft and short-term loan from

financial institutions - 7,500 - 7,500

Trade accounts payable - - 67,523 67,523

Liabilities under finance lease agreements - 7,107 - 7,107

Long-term loans from financial institutions 246,784 2,500,000 - 2,746,784

Retentions payable - - 37,401 37,401

246,784 2,514,607 104,924 2,866,315







Financial assets

Cash and cash equivalents 79,431 90,000 763 170,194




Service income receivable from related party

- billed - - 16,961 16,961

Short-term loan to an unrelated party - net - 8,800 - 8,800

Other receivables - related parties - - 11 11



79,431 336,398 856,137 1,271,966


Bank overdraft and short-term loan from

financial institutions 20,010 52,000 - 72,010



Long-term loans from financial institutions 205,713 2,650,000 - 2,855,713


225,723 2,709,862 111,078 3,046,663






Financial assets

Cash and cash equivalents 54,918 - 200 55,118




Dividend receivable from related parties - - 22,113 22,113

Other receivables - related parties - - 4,769 4,769


Investments in subsidiaries - net - - 515,000 515,000

Long-term investments - - 85,388 85,388

Long-term loan to a related party - 300,000 - 300,000


54,918 653,670 1,445,262 2,153,850









Payable for purchase of fixed assets - - 7,666 7,666


Long-term loans from financial institutions - 2,500,000 - 2,500,000


Rental guarantees received from related parties - - 761 761

- 2,505,112 48,814 2,553,926

Financial assets

Cash and cash equivalents 38,221 90,000 328 128,549




Short-term loan to an unrelated party - 8,800 - 8,800

Dividend receivable from a related party - - 28,050 28,050

Other receivables - related parties - - 6,867 6,867


Investments in subsidiaries - net - - 515,000 515,000

Long-term investments - - 85,388 85,388

Long-term loan to a related party - 300,000 - 300,000


38,221 636,398 1,455,443 2,130,062


Bank overdrafts and short-term loan from

financial institutions 20,010 - - 20,010


Payable for purchase of fixed assets - - 10,039 10,039


Long-term loans from financial institutions - 2,650,000 - 2,650,000


Rental guarantees received from related parties - - 761 761

20,010 2,655,600 49,993 2,725,603


The fixed interest rate financial instruments, which have new repricing dates or maturity dates (whichever are sooner) after the

balance sheet dates, are as follows:




Remaining periods to repricing dates or maturity dates

Less than 1 � 5 Over No

At call 1 year years 5 years maturity Total Interest rate

% p.a.

Financial assets

Securities purchased under

resale agreement - 261,010 - - - 261,010 2.60

Current investments - 83,584 - - - 83,584 1.50 - 4.00

Restricted bank deposits - 9,076 - - - 9,076 2.053 - 2.75

- 353,670 - - - 353,670


Bank overdrafts and short-term loans

from financial institutions - 7,500 - - - 7,500 4.95

Liabilities under finance lease agreements - 3,559 3,548 - - 7,107 2.17 - 16.19

Long-term loans from financial institutions - 450,000 2,050,000 - - 2,500,000 4.50 - 4.80

- 461,059 2,053,548 - - 2,514,607







% p.a.

Financial assets

Cash and cash equivalents - 90,000 - - - 90,000 3.71

Securities purchased under resale

agreement - 85,000 - - - 85,000 3.70


Short-term loan to an unrelated party - net - 8,800 - - - 8,800 - (1)


- 336,398 - - - 336,398



from financial institutions 52,000 - - - - 52,000 5.00



52,000 377,964 2,279,898 - - 2,709,862

(1) Default








% p.a.

Financial assets


agreement - 261,010 - - - 261,010 2.60



Long-term loan to a related parties - - 300,000 - - 300,000 5.25

- 353,670 300,000 - - 653,670


Liabilities under finance lease

agreements - 2,039 3,073 - - 5,112 2.17 - 16.19

Long-term loans from financial

institutions - 450,000 2,050,000 - - 2,500,000 4.50 - 4.80

- 452,039 2,053,073 - - 2,505,112







% p.a.

Financial assets

Cash and cash equivalents - 90,000 - - - 90,000 3.71


agreement - 85,000 - - - 85,000 3.70


Short-term loan to an unrelated party - net - 8,800 - - - 8,800 - (1)


Long-term loans to a related party - - 300,000 - - 300,000 5.25

- 336,398 300,000 - - 636,398




- 377,008 2,278,592 - - 2,655,600

(1) Default


40.3 Liquidity risk

Liquidity risk is the risk that the Company and its subsidiaries will be unable to liquidate financial assets and/or procure sufficient

funds to discharge obligations in a timely manner, resulting in a financial loss.

The periods to the maturity dates of financial instruments held as of 31 December 2008 and 30 September 2008, counting from

the balance sheet dates, are as follows:




Within 1 - 5 Over No

At call 1 year years 5 years maturity Total

Financial assets

Cash and cash equivalents 102,065 - - - - 102,065


agreement - 261,010 - - - 261,010

Current investments - 83,584 - - - 83,584

Trade accounts receivable - net 10,753 163,330 - - - 174,083

Service income receivable - related party - 27,478 - - - 27,478

Dividend receivable from a related party - 8,088 - - - 8,088

Other receivables - related parties - 6 - - - 6

Restricted bank deposits - - 5,000 - 4,076 9,076

Other receivable - - - 642,199 - 642,199

112,818 543,496 5,000 642,199 4,076 1,307,589



from financial institutions 7,500 - - - - 7,500

Trade accounts payable - 67,523 - - - 67,523

Liabilities under finance lease agreements - 3,559 3,548 - - 7,107

Long-term loans from financial institutions - 495,716 2,051,068 200,000 - 2,746,784

Retentions payable - - 37,401 - - 37,401

7,500 566,798 2,092,017 200,000 - 2,866,315







Financial assets

Cash and cash equivalents 80,194 90,000 - - - 170,194


agreement - 85,000 - - - 85,000



Service income receivable - related party - 16,961 - - - 16,961

Short-term loan to an unrelated party - net - 8,800 (1)

- - - 8,800

Other receivables - related parties - 11 - - - 11



83,778 536,913 5,000 642,199 4,076 1,271,966








72,010 496,767 2,077,886 400,000 - 3,046,663

(1) Default







Financial assets

Cash and cash equivalents 55,118 - - - - 55,118


agreement - 261,010 - - - 261,010



Dividend receivable from related party - 22,113 - - - 22,113

Other receivables - related parties - 4,769 - - - 4,769


Investment in subsidiaries - - - - 515,000 515,000

Long-term investments - - - - 85,388 85,388

Long-term loan to related party - - 300,000 - - 300,000


62,902 539,285 305,000 642,199 604,464 2,153,850



from financial institutions - - - - - -


Payable for purchase of fixed assets - 7,666 - - - 7,666




Rental guarantees received from

related parties - - 761 - - 761

- 474,492 1,879,434 200,000 - 2,553,926







Financial assets

Cash and cash equivalents 38,549 90,000 - - - 128,549


agreement - 85,000 - - - 85,000



Short-term loan to an unrelated party - 8,800 (1)

- - - 8,800

Dividend receivable from a related party - 28,050 - - - 28,050

Other receivables - related parties - 6,867 - - - 6,867


Investments in subsidiaries - - - - 515,000 515,000

Long-term investments - - - - 85,388 85,388

Long-term loan to related party - - 300,000 - - 300,000


42,044 536,355 305,000 642,199 604,464 2,130,062





Payable for purchase of fixed assets - 10,039 - - - 10,039




Rental guarantees received from

related parties - - 761 - - 761

20,010 401,744 1,903,849 400,000 - 2,725,603

(1) Default


40.4 Foreign currency risk

Subsidiaries have foreign currency-dominated assets and liabilities, giving rise to an exposure to changes in

foreign exchange rates. Management therefore considers the use of forward exchange contracts to hedge

such exchange risk from time to time, as appropriate. However, there is no outstanding forward exchange

contract at the balance sheet date since the management considers that such foreign currency-dominated

assets and liabilities are not material.

As at 31 December 2008 and 30 September 2008, the subsidiary�s foreign currency-denominated assets and

liabilities, which were not hedged by any derivative contracts, were as follows.

Foreign currency Outstanding balances Exchange rates

As at 31 As at 30 As at 31 As at 30

December 2008 September 2008 December 2008 September 2008

(Baht per one foreign currency unit)

Liabilities

Australian dollar 388,275 388,275 24.3809 27.5083

40.5 Fair value

Fair value represents the amount for which an asset could be exchanged or a liability settled between

knowledgeable and willing parties in an arm�s length transaction. The Company and its subsidiaries have

estimated the fair value of financial instruments as follows:

(a) Financial assets

Determination of the fair value is dependent upon the characteristics of the financial instruments. The fair

values of most financial assets, including cash and cash equivalents, securities purchased under resale

agreement, investments, trade accounts receivable, service income receivable, and short-term and long-

term lendings approximate their respective carrying values since the values of such financial instruments

are predominantly subject to market interest rates and/or have maturity periods of less than 1 year with the

exception of long-term loan to a related party, which bears fixed rate of interest and have repricing periods

longer than 1 year.

As at 31 December 2008 and 30 September 2008, there were no material differences between the carrying

value of financial assets of the Company and its subsidiaries and their respective fair value, except that

the fair values of the Company�s long-term loan to a related party amounting to approximately Baht 287

million and Baht 285 million, respectively.

The fair value of long-term loan to a related party is estimated by discounting the cash flows expected to

be received by the Company on repayments of that loan by the current market interest rates.

(b) Financial liabilities

The fair values of financial liabilities, including trade accounts payable, advance received, short-term and

long-term loans, liabilities under finance lease agreements and retentions payable, are the amounts as

stated in the balance sheets due to the same reasons as described for financial assets with the exception

of long-term loans from financial institutions bearing fixed rates of interest and having repricing periods of

longer than 1 year.


As at 31 December 2008 and 30 September 2008, there were no material differences between the carrying

value of financial liabilities of the Company and its subsidiaries and their respective fair value, except for

the Company�s and it subsidiaries� long-term loans from financial institutions having the fair values of

approximately Baht 2,612 million and Baht 2,750 million, respectively (the Company only: Baht 2,433

million and Baht 2,544 million, respectively).

The fair value of long-term loans from financial institutions is estimated by discounting the cash flows

expected to be used to repay principal and interest to the lenders by the Company and its subsidiaries by

the current market interest rates.

41. Capital management

The primary objectives of the Company and its subsidiaries� capital management are to ensure that they have

an appropriate capital structure and preserve the ability to continue their businesses as a going concern.

As at 31 December 2008, total liabilities to equity ratio, determined from the consolidated financial statements

is 0.53 (the separate financial statements: total liabilities to equity ratio is 0.48).

42. Subsequent event

On 29 January 2009, the Annual General Meeting of the Company�s shareholders approved a dividend payment

of Baht 0.25 per share for the period as from 1 october 2007 to 30 September 2008, totalling Baht 416 million,

to the Company�s shareholders. The Company paid such dividend on 20 February 2009.

43. Reclassification

Certain amounts in the financial statements for the year ended 30 September 2008 have been reclassified to

conform to the current year�s classification but with no effect to previously reported net income or shareholders�

equity. The reclassifications are as follows:

(Unit : Baht)


As previously As previously

As reclassified reported As reclassified reported

Trade accounts receivable 196,202,899 256,350,128 - -

Unbilled receivables 60,147,229 - - -

Other current assets 42,712,685 43,094,130 33,094,427 33,475,872

Property, plant and equipment - net 6,759,953,129 6,758,953,129 - -

Assets under concession contracts - net 381,006,132 382,006,132 - -

Liabilities under finance lease agreements 7,861,830 8,243,275 5,600,435 5,981,880

44. Approval of financial statements

These financial statements were authorised for issue by the Company�s Board of Directors on 27 February

2009.


Related Party TransactionsThe company and its subsidiaries have entered related party transactions with persons subject to conflicts

of interest (as of December 31, 2008) which include water sold to and services provided for major shareholders as

indicated in the Notes to Financial Statements. Details of other related party transactions.

Tab water production and water works system maintenance services for Egcom Tara Co., Ltd.

Details of related party transactions:

Between Universal Utilities Co., Ltd. (UU), a company�s subsidiary, and Egcom Tara Co., Ltd. The company

and Electricity Generating Public Company Limited (EGCOMP) held 15% shares respectively in Egcom Tara Co.,

Ltd. EGCOMP held 17.89% shares in the company as of 14 November 2007.

Nature of related party transactions:

UU provided services to Egcom Tara Co., Ltd., i.e., production of tap water and tap water production system

and pipeline maintenance for Lak Muang and Ratchaburi and Samut Songkhram Provinces. Service fees were charged

according to a contract awarded by open bidding.

Value of related party transactions:

During 1 October 2008 � 31 December 2008, UU received service fees from Egcom Tara Co., Ltd. in the

amount of 9.34 million Baht.

Trend or Policy Regarding Future Connected Transactions:

As for future connected transactions, the company will ensure that transactions are at fair prices according

to normal market conditions. The company will abide by laws governing securities and securities exchange, regulations,

notifications, orders or requirements set forth by the Securities Exchange of Thailand, including those concerning

information disclosure of connections and acquisitions or sales of the company�s significant assets.

In the event future connected transactions with persons subject to conflicts of interests or with stakeholders,

the company will disclose the information in the Notes to Financial Statements that are audited by the company�s

auditor.

Auditor’s FeeA resolution was passed by the ordinary general shareholders meeting on January 24, 2008 to appoint Mrs.

Saifon Inkaew, License No. 4434 or Ms. Rattana Jala, License No. 3734 or Mrs. Kamonthip Lertwitworathep, License

No. 4377 the Company�s Auditor. One of these three persons has audited Company�s financial statements for the 3-

month period starting on 1 October 2008 and ending on 31 December 2008 and provided opinions on behalf of Ernst

& young Office Limited. The Auditor�s fee exclusively for the Company was set at Baht 348,000 (the total Auditor�s fee

for both the Company�s financial statements and the consolidated financial statements was Baht 1,076,000).


Universal Utilities Company Limited (UU)

1 Eastwater Building, FL.23-25 Vibhavadi Rangsit

Soi 5, Jomphon, Jatujak, Bangkok 10900

Tel : 02-2721688Fax : 02-2721690 � 2

Water Trades and Services Co.,Ltd.

1 Soi Vibhavadi Rangsit 5, Vibhavadi Rangsit road,

Khwaeng Jomphon, Khet Jatujak, Bangkok 10900

Tel: (662) 272-1600

Fax: (662) 272-1602

Nakornsawan Water Supply Co.,Ltd.



Tel : (056) 355-789 and (662) 272-1688

Fax : (662) 272-1690 � 2

Waterworks management and

wastewater treatment management

in the form of concession contracts

management contract or

management lease contract

Drinking water-vending machine

business

Waterworks management including

tap water production and supply to

Nakhonsawan Waterworks and

water users services.

Common

Common

Common

510

5

40

100

100

UU Co.,Ltd.

holding

99.9999875

shares

Paid-up

Company Name Type of Business Type of Stock Registered Stock holding

Capital Ratio (%)

(Million Baht)

General Information

Eastern Water Resources Development and Management Public Company Limited

Core Business Develop and manage water resources through raw water pipeline distribution to

customers, provide consultancy services on clean water production and pipeline

distribution system in industrial estates or factories, repair and supply all kinds of

equipment and materials related to water distribution, provide consultancy services

on the maintenance of pipelines, equipment and machinery, and participate in joint-

venture projects with private sector.

Head Office�s Address 1 Vibhavadi Rangsit Soi 5, Vibhavadi Rangsit Road,

Jompphon, Jatuchak, Bangkok 10900

Company Registration 0107539000316 (instead of PCL.632)

Tel. (662) 272-1600

Fax. (662) 272-1601-3

Company�s common stock Company�s Registered and Paid-up Capital as of 31 December 2008:

Registered Capital: 1,663,725,149 shares, with par value of 1 baht/share and the

total value of 1,663,725,149.- Baht

Paid-Up Capital 1,663,725,149 shares, with par value of 1 baht/share and the total

value of 1,663,725,149.- Baht

List of companies with at least 10% stockholding


Bangpakong Water Supply Co.,Ltd.



Tel : (038) 840-786 and (662) 272-1688

Fax : (662) 272-1690 � 2

Chachoengsao Water Supply Co.,Ltd.



Tel : (038) 814-428 -9 and (66)272-1688

Fax : (038) 814-429 and (662) 272-1690 - 2

Egcom Tara Co.,Ltd.

EGCO Tower, 222 Moo5, Vipavadee Rangsit Road,

Tungsonghong, Laksi, Bangkok 10210

Tel: (662) 998-5000, (662) 998-5999

Fax: (662) 955-0945



Bangpakong Waterworks and water

users services.



Chachoengsao Waterworks and

water users services.

Production and supply of tap water

Common

Common

Common

40

100

345

UU Co.,Ltd.

holding

98.999925

shares

UU Co.,Ltd.

holding

98.99997

shares

15

Paid-up

Company Name Type of BusinessType of Registered Stock Holding

Stock Capital Ratio (%)

(Million Baht)

References

Securities Registrar (Common Stock) Securities Depository Co., Ltd. (Thailand)

62 The Stock Exchange of Thailand Building FL. 4,6,7

Ratchadapisek Road, Khlongtoey

Bangkok 10110

Tel: (662) 229-2800, 654-5599

Fax: (662) 359-1259

Accounting Auditor Ernst & Young Office Limited

193/136-137 Lake Rajada Office Complex, FL. 33 Rajadapisek Road,

Khwaeng Khlongtoey, Khet Khlongtoey , Bangkok 10110

Tel: (662) 264-0777

Fax: (662) 264-0789


No. Shareholder Number of Shares Percentage

1 The Provincial Waterworks Authority 668,800,000 40.20%

2 The Electricity Generating Public Company 311,443,190 18.72%

Limited (EGCO)

3 Norbax Inc.,13 168,372,100 10.12%

4 The Industrial Estate Authority of Thailand 76,000,000 4.57%

5 State Street Bank and Trust Company for London 39,347,300 2.37%

6 Thai NVDR Company Limited 31,098,350 1.87%

7 Morgan Stanley & Co. International Plc. 29,918,000 1.80%

8 Somers (U.K.) Limited 22,313,700 1.34%

9 Aberdeen Growth Fund (Open-end Fund) 22,124,800 1.33%

10 Aberdeen Long Term Equity Fund (Open-end Fund) 16,875,500 1.01%

11 others (2,286 shareholders) 277,432,209 16.67%

Total 1,663,725,149 100.00%

First 10 Major Shareholders as of 7 January 2009


Dividend Payment Policy

The Company has a policy to propose to the shareholders� meeting to consider paying dividend at no less

than 30% of the net profit of the consolidated financial statements after deduction of the reserve as required by the

law and of other necessary items as the Company deems appropriate.


Connected Transactions

Eastern Water Resources Development and Management Public Company Limited had one connected

transaction in 2008 to be disclosed as required of a listed company as follows:

The Company sold raw water to six waterworks under the Provincial Waterworks Authority, namely Laem

chabang, Pattaya-Na Klue, Sriracha, Banchang, and Chonburi Waterworks and Nong Klang Dong Purification Plant,

to be used for production of water, which is used for consumption and sold to the general public, the business sector,

and Laemchabang Industrial Estate operating for supplying to the Industrial Estate in Laemchabang area. The price

was adjusted to come down to 7 Baht per cubic meter from May to December 2008. Such transaction was a normal

business transactions without trading conditions. Details are as follows:

Date of Transaction and Parties Involved

1. Dates of Transaction: May-December 2008

2. Parties involved:

Seller: Eastern Water Resources Development and Management Public Company Limited

Buyers: Provincial Waterworks Authority and Industrial Estate Authority of Thailand

Value of Transactions and Valuation Criteria

The value of transactions in the Company�s sale of raw water to six waterworks and Laemchabang Industrial

Estate at 7 Baht/m.3 during May-December 2008 amounted to 329.84 million Baht or 5.95% of its net tangible assets

as of 31 March 2008.

Details of Connected Parties

1. PWA, a shareholder of the Company held 668,800,000 shares (40.20%) of the Company as of 30 June 2008.

2. The Industrial Estate held 76,000,000 shares (4.57%) of the Company as of 30 June 2008

3. Pol. Lt. Gen. Somyot Poompanmoung was holding the position of PWA director and Company director

4. Mr. Nattachak Pattamasingh Na Ayuthaya was holding the position PWA director and Company director

5. Mr. Chakarn Saengruksawong was holding the position PWA director and Company director

6. Mrs. Monta Pranootnorapal was holding the position of the Governor of IEAT

Nature of Transactions and Connected Parties� Interest

Such transactions are considered to be a transaction prescribed in the notification of SET regarding disclosure

the information and operation of the listed company in categories of connected transactions B.E. 2546 as normal

business transactions without trading conditions. The Company requested for and was granted shareholders� approval

of such transactions in the Extraordinary General Shareholder Meeting No. 2/2008 on 25 August 2008.


Activities in 2008Personnel

As of 31 December 2008, there were 138 employees with 136 being permanent employees, and 2 being

employed on contracts. Of the 128 permanent staff, 10 were executive members.

Human Resource Development Policy

The Company�s vision is �to be a leader in valued water management for sustainable economic and social

progress�. Moreover, one of the Company�s strategies is to be a learning organization that emphasizes continuous

development. The Company gives significant importance to human resource development which aims at developing

the employees to their full potential by enhancing their knowledge and competence, promoting their career

advancement, and offering them appropriate compensation. Other measures include improvement of quality of life

values and environment and integrated enterprise system development.

In addition to providing training, the Company�s personnel development scheme includes in-company learning

and overseas study trips to expand their knowledge and perception, and apply what they learned from the trips to

further develop their work. This is because the Company realizes that employees are valued assets and a key driving

force that helps the Company to achieve its business goals. The Company therefore has made it a policy to support

personnel development at all levels. This means general work skills as well as specialized knowledge and technology

required for different aspects of work. Emphasis is also placed on development of work behavior, which is a core

competency, to be consistent with the Company�s vision, mission, and corporate value.

The Company promoted and supported personnel development in various aspects as follows:

1. A budget has been allocated for internal training, external training by sending employees to attend

training programs organized by reputable institutions, and continued learning for work management

skills development for employees at all levels on a continuous basis.

2. Management Skills Development Program for the members of the Management and supervisors through

the Preventive Internal Control Course in support of the Principles of Good Corporate Governance.

3. On going English training programs for employees at the mid-management level, including Presentation

Skills development.

4. Information Technology Training Program has been organized for employees to be prepared for the

Internal Electronic Document System and the ERP System.

5. Engineering Technical Training Program, such as the training course on the application of mathematical

models (Epanet) as a skill development for operations personnel.

6. Training and dissemination of news on quality, environment, and occupational health and safety, Labor

Protection Act (No. 2) B.E. 2551 in compliance with the law and regulations and in line with its quality

standards.

7. Promotion and support are given to employees to learn and acquire knowledge on their own to increase

their competencies and work efficiency.

8. Activities to promote team working, such as the �Team Building� activity jointly organized with the

Chulachomklao Royal Military Academy in line with East Water�s values.


Water Management Capacity Increase

In 2008 the Company increased its water management capacity in various aspects to meet the increasing

demand for water in the Company�s service areas as follows:

Water Resource Capacity Increase:

The Company made application to the Royal Irrigation Department for permission to use more water from the

Dok Krai Reservoir and the Prasae Reservoir as its water resources. An alternative water resource plan was drawn up

to be used as a guideline for the development of alternative water resources in the future. Aiming at reducing the risk

of dependence on the government source of raw water (Royal Irrigation Department), the plan includes matters such

as the purchase of water from private earthen wells, construction of new storage reservoirs, and the construction of a

plant for the production of fresh water from seawater.

Pipeline System Capacity Increase:

The Company spent over 170 million Baht for the improvement of the main pipelines in Chon Buri, Rayong

and Chachoengsao Provinces to increase their water distribution and pumping capacity. In 2009 there is a plan for

the construction of the third Nong Pla Lai � Map Tha Phut pipeline to meet the increase in household water consumption

and the demand of the industrial sector in Sattahip and Map Tha Phut. The cost of investment is estimated to be over

1,700 million Baht.

Water Management Capacity Increase:

The Company planned to pump and distribute water in accordance with the water situation and the climatic

conditions by referring to the El Nino and La Nina phenomena. Information obtained from local and international

agencies was also used to make plans regarding water pumping from different sources. In 2009 the Company has

a plan to develop a mathematical model for water resource management and water demand management, to be

prepared for interconnections of water resources in the future.

Business Development

With the experiences of the Company and its subsidiaries in water management and tap water supply, the

Company has a policy to explore and develop businesses related to the concept of integrated water management.

The objective is to look for opportunities to expand the scope of business beyond the raw water and tap water

business to meet the diverse and comprehensive demand for water resources from the domestic and industrial

sectors. With the increase in the energy cost, the Company has also studied the feasibility of investment in the energy

business, with emphasis on alternative energy, to have more sources of income and minimize the reliance solely on

the revenue from water businesses. Moreover, the Company has also explored the opportunities for investment in

other countries such as Vietnam, China, India, Loas, and other countries with potential for the water and alternative

energy businesses.


Customer Relationship Management

Service Excellence

In 2008, East Water did not only change its corporate identity but also modified its management structure.

The Sales and Marketing Division was established under the Marketing Communications Department to focus on

reaching out to customers and strengthen the relationship with them, because the Company believed that

understanding and participation would result in good relationships, business strength, and customers� confidence in

the brand of East Water.

A Customer Service Team (CST) was established consisting of personnel from sales, operations and planning

departments. The CST will listen to, follow up, rectify and manage customers� problems systematically and efficiently.

Moreover, there were other activities to build up good relationships with customers and follows:

An annual event to thank water users

was held to allow the Company�s management to meet all water

users and keep them informed of the Company�s activities.

Social functions with executives

of water users

were organized to allow top

management of both sides to meet

and share their views and

recommendations. These events

provided opportunities for

business expansion and opened

up direct communication channels

between top management.


Anniversary celebration events of various agencies

such as the Irrigation Department, Provincial Waterworks Authority, Industrial Estate Authority of Thailand,

and Hemarat Land Development Public Company Limited

Joint activities with customers for improvement of quality of life values and the environment

� Beautiful Canal, Clean Water and Care for the

Environment Program to promote the use of

microorganisms for community wastewater

treatment in the Laem Chabang Municipality.

� The Green Hospital Project with Queen Sirikit

Hospital to promote planting of trees and

economical use of natural resources


Quality of Life Values and Environment

Community engagement high on agenda

Participation of the public sector and the community was the key factors behind the success of the Company�s quality

of life values and environment development program in 2008 (October-December 2008).

East Water Young Leaders� Camp and

Scholarships

East Water has a policy to place emphasis on

education of youths in its operating areas,

believing that they strengthen their local

communities in the future. In view of this, in 2008

(October � December) the �East Water Young

Leaders Camp for Conservation of Water

Resources and Environment� Project was

organized in Chachoengsao and Chon Buri

Provinces, a continuation of the first program in

Rayong Province. A total of 360 teachers and

students from 60 schools in Chachoengsao and

Chon Buri Provinces participated in the program.

Each of the students attending this camp received

a scholarship of 10,000 Baht.

Clean Water for the Community Project

Recognizing the value of the water resources with an effort to minimize the impacts to the community, East Water had

organized the following activities:

In addition to the above mentioned programs, East Water also provides support to quality of life values development

activities organized by government agencies, or charity organizations such as sponsorship for the Kathin (robe

presentation at the end of the Buddhist Lent) ceremony at Khao Pho Temple (Mab Kha community), the Pha Pa (off-

season robe presentation) ceremony with residents of Prasae community, the Buddha image casting ceremony with

the Nikhom Phattana District, the Luang Pho Sothon festival in Chachoengsao Province and participation in the

cleaning activities of the Map Kha community.

� Providing over 72,500 number of cupped water in

support of activities for public benefits organized

by various agencies/organizations.

� Drinking water mobile units to provide drinking

water to 40 areas in communities experiencing

shortages of clean water, including various

agencies in and outside the Company�s operating

areas.

EASTW : Annual Report 2008 EN (oct2008-dec2008)

Documents