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Message from the Chairman
20
AOT Board of Directors
22 25
AOT Senior Executives
Summary of AOT’s Financial Business Information Characters
28
Organization Chart
Content
118
Air Traffic Statistics
94 96 Airport One Stop Service 98 AOT Personnel Development 100 Increase in the Efficiency of Security in Passenger Terminal at Suvarnabhumi Airport 101 Occupational Health, Safety and Working Environment Management 102 The Development Plan of Suvarnabhumi Airport Phase 2 (The Fiscal Year 2009-2014) 104 The Use of Don Mueang International Airport
110 Promotion of Border Patrol Police School 112 Support of United Nations 113 Community Relations 116 Environment Operation
Financial Statements
46
92
Connected Transactions
106
34
56
Shareholding and Management Structure
AOT’s Corporate Social Responsibility (CSR)
40
52
Risk Management
The Ongoing Development of AOT
30
Operating Results Regarding Service
Thirty years of demonstrable commitment toward becoming a world-class airport. For over 30 years, Airports of Thailand has served as a gateway to Thailand, welcoming and connecting passengers from across the world to their destinations with smiles and a heartfelt service backed by international safety standards. Today, we continue to make great strides toward ongoing development to bring Thai airports to the ranks of world-class airports in the years to come.
The Path to Achievement 1980
AAT began the development of Bangkok International Airport so it would be able to accommodate future increases
in air traffic.
1979
The Airports Authority of Thailand (AAT) was established and assumed the responsibility transferred from
the Directorate of Civil Aviation, the Royal Thai Air Force.
1988
Three regional airports including Chiang Mai International Airport, Hat Yai International Airport, and Phuket International Airport were transferred to be under the responsibility of AAT.
1985
The air cargo warehouse was established to accommodate the growth in air cargo volume.
1997
The National Visitors’ Lounge Project was launched to promote
the Amazing Thailand Year and to demonstrate
AAT’s excellent service.
1992
Common use X-Ray systems were used to check passenger baggage for enhancing passengers safety and convenience.
Striding toward
the 30 th year of operating 1998
Chiang Rai International Airport was transferred to be under the responsibility of AAT.
1999
AAT provided financial support for the construction of the first AAT Border Patrol Police School at Aijadar Village, Rue Soh District, Narathiwat Province in line with its commitment to social responsibility.
2006
Suvarnabhumi Airport,
the pride of the Thai people and the nation, officially opened.
2002
AAT Registered to be
a public company limited to develop its capabilities.
Future
Striding toward one of the world’s best airports.
2008
Suvarnabhumi Airport received numerous awards such as the 4th Best Airport Worldwide by Smarttravelasia and the World’s 3rd Best Airport by Wanderlust magazine.
SAFETY SECURITY AND EFFICIENCY The international standard security system
ensures peace of mind
PLANING AND GROWTH Connecting business
to ensure a sustainable growth
OPERATION AND SERVICE Experience a heartfelt service in every step
CUSTOMERS AND RETAIL Enjoy shopping for scores of
world-famous brand-name merchandise
SOCIAL
AND ENVIRONMENTAL
CONTRIBUTION Providing world-class services
with concern for society
and the environment
ADHERING TO THE PRINCIPLES
OF GOOD CORPORATE
GOVERNANCE Quality and morality are the hallmarks
of our business philosophy
Safety and service are our prime priorities.
General Information Company Name : Airports of Thailand Public Company Limited Acronym : AOT Registration Number : PLC 0107545000292 Business : Airport operator and other services related to aviation and transport Accounting Period : October 1 - September 30 Head Office : 333 Cherdwutagard Road, Srikan, Don Mueang, Bangkok 10210 Tel : 0 2535 1111 Fax : 0 2535 4061 Website : http://www.airportthai.co.th Investor Relations Center : Tel: 0 2535 5900, Fax: 0 2535 5909, E-mail : aotir@airportthai.co.th Registered Capital : 14,285,700,000 Baht No. of Common Stock : 1,428,570,000 shares, par value at 10 Baht per share Shareholders : The Ministry of Finance is the major shareholder with 70% stake, with the other 30% held by institutes and retail investors Listed Date : March 11, 2004 Registrar : Thailand Security Depository Company Limited Office : 2/7 Moo 4 (North Park Housing Project) Vibhavadi-Rangsit Road, Thungsonghong, Laksi, Bangkok 10210 Tel : 0 2596 9307 Fax : 0 2832 4994-6 Auditor : Office of the Auditor General of Thailand Office : Rama 6 Road, Samsen Nai, Bangkok 10400 Tel : 0 2273 9674-91 Fax : 0 2618 5883
Message from the Chairman 28 September 2008 marked the second anniversary of the opening of Suvarnabhumi Airport. Over the years, Airports of Thailand Public Company Limited (AOT) has been committed to the continual development of quality in airport service delivery and airport management to reach the highest international standards of safety and facilities. Thanks to this demonstrable commitment, Suvarnabhumi, for the fiscal year 2008 (October 2007 - September 2008), efficiently handled more than 41,180,456 million passengers with a total of 256,118 flights. In addition, over 1,259,685 tons of cargo and postal parcels (excluding through cargo) passed through the airport. With confidence and readiness in delivering quality airport service, AOT entered Suvarnabhumi Airport into the Airport Service Quality Program (ASQ) rankings organized by Airports Council International (ACI). The objective was to enhance AOT’s competitiveness in providing improved services in passenger check-in and check-out service as well as security, facilities, and services provided within the terminal and the airport area. The efforts underpinned AOT’s determination to pursue a world - class service objective to ensure that Suvarnabhumi can rise to the ranks of world - class or best in class airports. Moreover, five other airports operated by Airports of Thailand Public Company including Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport, and Chiang Rai International Airport have witnessed a steady growth in air traffic volume as a result of the rapidly - growing low cost carriers. To address the anticipated rising passenger volume, AOT has devised development plans for Suvarnabhumi and the provincial airports especially Phuket International Airport, which will reach its full capacity in the near future. This is to ensure that AOT can retain its high levels of service quality and standards as well as excellent operational prowess, enabling AOT to materialize its vision of becoming the aviation hub in Southeast Asia. For 2008, total air traffic volume of AOT (including Suvarnabhumi Airport, Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport, and Chiang Rai International Airport) amounted to 58,304,267 passengers, an increase of 4.08% over the previous year. The volume
of cargo and postal parcels passed through the airport (excluding through cargo) totaled 1,345,845 million tons, a rise of 6.65%, whereas the traffic volume grew 0.96% year-on-year to 394,057 flights.
As a result of the growth in air traffic volume and an increase in passenger service charge encompassing landing and parking charges and aircraft storage fees, the operating revenues of AOT for the fiscal year 2008 (October 2007 - September 2008) totaled 22,010.87 million Baht. The operating expenses amounted to 18,515.89 million Baht. Despite higher expenses under depreciation, the implementation of the policy to enhance operating efficiency and to strictly control
the operating expenses resulted in AOT achieving operating profit of 3,494.98 million Baht, an increase of 133.51%, and net profit of 7,321.05 million Baht, a rise of 571.80% from the previous year.
The growth could be partly attributed to the realization of revenues from the sales of duty-free goods and other commercial activities totaling 8,331.54 million Baht following the Civil Court’s temporary protection orders on 31 January 2008 and 25 April 2008.
This enormous achievement is the culmination of collaboration and total commitment of AOT’s Board of Directors,
the Management, and employees at all levels to the development of Suvarnabhumi and the five airports under
the responsibility of AOT into world-class airports. AOT attaches significance to conducting business in line with the principles
of good corporate governance and pledges to create confidence among all stakeholders. The Company continues
to develop the efficiency and effectiveness of its operations while increasing competitiveness in world-class service. AOT’s unwavering commitment also extends to developing information technology and enhancing the potential of its employees so they can rise to any challenge that may affect the aviation industry and air transport in the years to come. (Vudhibhandhu Vichairatana) Chairman
AOT Board of Directors 02
Mr. Surachai Tansitpong Director
Chaisak Angkasuwan 04 Mr. Director
04
02
03
01
05
Chief Marshal Raden Puengpak 03 Air Director
01
022 annual report 2008
Mr. Vudhibhandhu Vichairatana Chairman
Utid Tamwatin 05 Mr. Director
07
Mr. Pongsak Semson Director
Air Chief Marshal Sumet Pohmanee 09 Director
12
Mr. Thaworn Phanichpan Director
12
09
14
Mr. Apichart Sayasit Director
14
07
06
10
08
Vinai Vithawaskarnwej 06 Mr. Director
10
15
11
Mr. Arkhom Termpittayapaisith Director
Police General Sombat Amornvivat
11
13
Mr. Chulasing Wasansing Director
15 13
08 Director
023 annual report 2008
Mr. Serirat Prasutanond Director and Secretary
to the Board of Director
Flight Lieutenant Usar Borisuth Director
024 annual report 2008
AOT Senior Executives Mr. Surajit Surapolchai
Mrs. Supaporn Burapakusolsri
(Engineering and Information Technology)
06
05
Flight Lieutenant Viwat Smarnrug Senior Executive Vice President (Regional Airports)
07
Flying Officer Narongchai Tanadchangsaeng Executive Vice President (Administration)
Mr. Suratas Suthammanas
15
09 Executive Vice President (Business Development)
08
06
Mr. Permsak Pattanapong Senior Specialist 10
16
14
09
07
04
Mr. Adeethep Nakavisute Senior Specialist 10
Mr. Saneh Chausurin
02 Senior Executive Vice President (Administration)
Mr. Serirat Prasutanond Senior Executive Vice President, General Manager of Suvarnabhumi Airports (Acting President)
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annual report 2008
17
18
15
17
13
10
12
11
Mr. Nirandra Theeranartsin
04 Senior Executive Vice President (Business Development)
10
18
16
03
01
Miss Suwannee Sumrongwatana Executive Vice President, Duputy General Manager of Suvarnabhumi Airport (Administration) Flying Officer Passakorn Surapipith Senior Specialist 10
Mrs. Sombat Khoonprasert Senior Specialist 10
(Planning and Finance)
02
01
14
08 Executive Vice President
05 Senior Executive Vice President
Mr. Pornbanchob Sombatpium Executive Vice President (Engineering and Information Technology)
Mrs. Kulya Pakakrong
03 Senior Executive Vice President
11
(Planning and Finance)
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annual report 2008
12
Flying Officer Pearl Rugsamruad Corporate Secretary
Mr. Jayakorn Aksharamat Executive Vice President (Regional Airports)
13
Mr. Somchai Sawasdeepon Senior Specialist 11
24
Wing Commander Wicha Nurnlop Executive Vice President, General Manager of Phuket International Airport
Wing Commander Nutt Homasavin
26 Vice President, General Manager
of Hat Yai International Airport
Flying Officer Chaturongkapon Sodmanee
27
25 Executive Vice President, General Manager of Chiang Mai International Airport
24
26
25
27
22
20 19
23
21
Flying Officer Wisit Eiwprapha Mr. Chatra Harnpatananan Executive Vice President, Deputy General Executive Vice President, Deputy General Manager Manager of Suvarnabhumi Airport of Don Mueang International Airport (Administration) (Maintenance and Information Technology) Flying Officer Anirut Thanomkulbutra Wing Commander Prateep Wichitto Pilot Officer Anant Kongyuen Senior Executive Vice President, Executive Vice President,
Executive Vice President, Deputy General Deputy General Manager Manager of Don Mueang
General Manager International Airport (Operations) of Suvarnabhumi Airport (Operations) of Don Mueang International Airport
22
20
19
Mr. Prathuang Sornkhom Vice President, General Manager of Chiang Rai International Airport
21
23
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annual report 2008
BOARD OF DIRECTORS
Audit Committee
Airports of Thailand Public Company Limited (AOT) Audit Office Special Projects Office
Administration
• Administration Department • Legal Department • Human Resources Department • Human Resources Development Department • Occupational Health and Safety Department • Supply Department • Medical Department
Regional Airports
Planning and Finance • Corporate Strategy Department • Budgeting Department • Finance Department • Accounting Department
• Investor Relation Center
• Phuket International Airport • Chiang Mai International Airport • Hat Yai International Airport • Chiang Rai International Airport
Suvarnabhumi Airport Business Unit
• Central Administration Division
Administration Line
• Suvarnabhumi Airport Administration Department • Planning and Finance Department • Special Affairs Department • Medical Division
Operations Line
• Landside Operations Department • Airside Operations Department • Baggage Handling System Department • Security Department • Rescue and Fire Fighting Department
ORGANIZATION CHART Nomination Committee Remuneration Committee Corporate Governance Committee
Corporate Secretary Office
Corporate Secretary Airport Safety and Standardization Office
Business Development • Business Development Department • Business Management Department
Corporate Communications Office
Engineering and Information Technology
• Airport Development Planning Department • Engineering and Architecture Department • Information Technology Department • Environmental Department
Don Mueang International Airport Business Unit
• Don Mueang International Airport Administration Department • Airport Operations Department • Airport Security Department • Maintenance Department
Airport Safety and Standards Division
Maintenance and Information Technology Line
• Electrical and Mechanical Department • Airfield and Building Department • Airport Information Technology Department • Communications and Electronics Department
Commercial Operation Line
• Commercial Operations Department • Transportation Administration Department
• Medical Division • Commercial and Finance Division • Airport Safety and Standards Division
Business Characters Airports of Thailand Public Company Limited, or “AOT” operates main airports of Thailand. AOT’s main activities comprise management, operations and development of 6 airports under its responsibility, namely Suvarnabhumi Airport, Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport and Chiang Rai International Airport providing services for both domestic and international flights. Suvarnabhumi Airport is the country’s main airport opened for service on September 28th, 2006 to handle
the successive increases in the number of passengers. The airport is capable of serving 45 million passengers per annum, handling 3 million tons of cargo freight per annum and providing service for 76 flights per hour. AOT also operates an airport hotel at Suvarnabhumi Airport under the name of Novotel Suvarnabhumi Airport Hotel containing 600 rooms. The airport hotel is a joint venture project among 3 parties: Airports of Thailand Public Company Limited (AOT), Thai Airways International Public Company Limited and Krung Thai Bank Public Company Limited which aims at serving and facilitating Suvarnabhumi Airport passengers. The increasing volume of air traffic and passengers resulted from a few reasons. The first one was the government’s policy to emphasize development of airports, particularly Suvarnabhumi Airport, to become an aerotropolis, a hub for the cargo freight and tourism of Asia and the world. The second one was the Tourism Authority of Thailand’s proactive tourism policy which aimed at expanding new tourist markets. The last is when the ASEAN countries mutually agreed upon freedom of the air policy, along with increasing more and more flexibility of rules and regulations concerning air transportation.
The freedom of the air policy and expansion of economy as well as international trade allowed low cost carriers to have access to the domestic and international markets. Thus, low cost carriers grew rapidly both in terms of airline quantity and flight frequency. It was estimated that the increase of Chinese and Indian populations with moderate incomes would enable the low cost carriers of Asia - Pacific to expand greatly in the future. In addition, technical innovation of new aircraft, such as the A380, will help the overall air transport system to increase its efficiency, to reduce its capital and to decrease flight time because an aircraft can fly directly to destination without stopping. This in turn leads to new flight routes and more competition to increase volume of flights and passengers for regional hubs, instead of giving a chance to other destinations. As ticket price is reduced, people can gain more access to air transport service. Furthermore, communication technology has developed at a fast pace, allowing passengers to easily search information on tourist attractions and business resource just as they need. Especially air passengers can also make a quick reservations by themselves at cheaper prices. Nonetheless, domestic factors such as insurgency in the Southern part of Thailand, the protest to close down AOT airports, political turmoil and the declaration of a state of emergency had all affected foreign tourists traveling to Thailand. Moreover, the continuous increase of oil price, credit market crisis, insecurity of financial institutes in
the United States of America and worldwide economic going downhill problem were very much related to growth of
air traffic volume and caused psychological influence resulting in global consumption and investment slowdown, which had both direct and indirect impact on airport and aviation industries.
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annual report 2008
As regards the future progress of AOT, Airports Council International (ACI) predicts growth in the number of worldwide passengers by the year 2010 would be over 5 billion, and would increase to 9 billion by the year 2020.
The latter number can be divided as approximately 5.1 billion domestic passengers and 4 billion international passengers. However, the growth rate of worldwide passengers in the next 20 years (2006-2025) will be 4% per annum on average. The growth rate of the number of Asia-Pacific passengers at around 5.8% per annum will be higher than that in every region in the world. This is because many countries in this region started to develop their air transportation and also because of rapid growth of the Chinese and Indian economies.
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annual report 2008
Summary of AOT’s Financial Information
Summary of the Company’s Financial Information
2008 2007 2006 Operating Results (Million Baht) 19,501.41 16,240.86 Operating revenues 22,010.87 18,004.68 9,420.07 Operating expenses 18,515.89 1,496.73 6,820.79 Operating profit 3,494.98 Net profit 7,321.05 1,089.76 10,473.99 Financial Status (Million Baht) 143,466.98 150,505.06 Total assets 146,455.97 73,789.75 79,341.54 Total liabilities 70,147.58 69,677.23 71,163.52 Shareholders’ equity 76,308.39 Financial Ratio 1.74 1.68 Liquidity ratio (X) 2.38 5.59 64.49 Net profit to operating revenue ratio (%) 33.26 1.55 15.44 Return on equity (%) 10.03 0.74 7.35 Return on assets (%) 5.05 1.06 1.11 Debt / equity ratio (X) 0.92 48.57 49.81 Book value per share 53.24 Net profit per share (Baht) 5.12 0.76 7.33
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annual report 2008
Classification of Operating Revenues for Fiscal Year 2008 Breakdown by Sources of Revenue Landing and Parking Charge Passenger Service Charge Facilities Service Charge Office and Property Rents Service Revenue Concession Revenue
Unit : Million Baht
Breakdown by Airports Head office Don Mueang International Airport Suvarnabhumi Airport Regional Airports Suvarnabhumi Airport Hotel
Unit : Million Baht
%
4,216.35 19 10,417.01 47 431.75 2 1,480.64 7 3,164.29 14 2,300.81 11 22,010.87 100 %
0 900.52 4 17,902.39 82 2,451.28 11 756.68 3 22,010.87 100
Classification of Operating Expenses for Fiscal Year 2008 Breakdown by Sources of Expenses Staff costs Operating expenses Repairs State property use Depreciation
Unit : Million Baht
%
3,909.00 5,100.31 683.96 955.73 7,866.89 18,515.89
21 28 4 5 42 100
Breakdown by Airports Unit : Million Baht Head office 1,342.77 Don Mueang International Airport 1,818.24 Suvarnabhumi Airport 13,433.93 Regional Airports 1,241.03 New Bangkok International Airport Co.,Ltd. 0.09 Suvarnabhumi Airport Hotel 679.83 18,515.89
%
7 10 72 7 0 4 100
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annual report 2008
Analysis of Operating Results
(Consolidated Financial Statements)
Comparative Financial Overview 2008/2007
AOT and its subsidiaries recorded operating revenues of 22,010.87 million Baht for the fiscal year 2008
(October 1st, 2007 - September 30th, 2008), an increase of 2,509.46 million Baht, or 12.87% over the previous year
(October 1st, 2006-September 30th, 2007). Operating expenses totaled 18,515.89 million Baht, a rise of 511.21 million Baht, or 2.84% compared to the previous year while operating profit rose to 3,494.98 million Baht, a growth of 1,998.24 million Baht, or 133.51%. Net profit amounted to 7,321.05 million Baht, an increase of 6,231.29 million Baht, or 571.80%. Details are as follows: Operating Revenues Aeronautical Revenues AOT’s aeronautical revenues totaled 15,065.12 million Baht, accounting for 68.44% of total operating revenues. They increased 1,919.14 million Baht, or 14.60% over the previous year as a result of
the rising air traffic volume with an increase in air traffic volume, passengers, and cargo of 1.0, 4.1, and 5.7%, respectively. The aeronautical revenues included: - landing & parking charge of 4,216.35 million Baht, an increase of 278.95%, or 7.08% over the previous year. - passenger service charge of 10,417.01 million Baht, an increase of 1,635.54 million Baht, or 18.62% over
the previous year. - facilities service charge of 431.75 million Baht, an increase of 4.65 million Baht, or 1.09% from the previous year. Non - Aeronautical Revenues AOT’s non-aeronautical revenues amounted to 6,945.75 million Baht, accounting for 31.56% of the total operating revenues. They increased 590.32 million Baht, or 9.29% compared to the preceding year. The rise could be attributed to the growth in service-related revenues from limousine service, electricity,
apron parking service as well as revenues from Suvarnabhumi Airport Hotel. Other contributing factors included increased sharing revenues from sales of food and beverages, telecommunications, and other services. Operating Expenses Operating expenses grew 511.21 million Baht, or 2.84% from 18,004.68 million Baht in the 2007 fiscal year to 18,515.89 million Baht in 2008. The growth could be attributed to the following factors: - Personnel expenses totaled 3,909.00 million Baht, a rise of 981.16 million Baht, or 33.51%, a result of
the recruitment of new employees, the adjustment of salary and bonus, and compensation for the employees joining the early retirement program. - Operating expenses amounted to 5,100.31 million Baht, a drop of 629.82 million Baht, or 10.99%. The decrease could be partly attributed to the efficient collection of outstanding accounts, resulting in a decrease in suspected bad debt. Another contributing factor was a fall in outsourcing and advertising expenditures. - Maintenance expenses amounted to 683.96 million Baht, a decrease of 48.42 million Baht, or 6.61% due to
a drop in the repair expenses for luggage conveyor belts as well as runways and taxiways.
038 annual report 2008
- Payment for the use of state property totaled 955.73 million Baht, a rise of 109.41 million Baht, or 12.93%, which was proportional to AOT’s increased operating revenues. - Depreciation and assets amortization amounted to 7,866.89 million Baht, an increase of 98.88 million Baht, or 1.27% due to an increase of investment in assets. Other Revenues Other revenues grew 8,180.81 million Baht, chiefly attributable to the realized gain on compensation of 8,331.54 million Baht following the Civil Court’s orders despite a decrease of 150.73 million Baht in interest receivable. Other Expenses Other expenses were up 4,091.40 million Baht due to a loss on foreign exchange of 928.72 million Baht in 2008 compared to a gain of 2,804.54 million Baht in the year-ago period. Other expenses also included the realization of possible expenses on compensation pursuant to the Civil Court’s orders. Interest Payment Interest payment amounted to 2,569.80 million Baht, an increase of 172.63 million Baht, or 7.20% from the previous year, as a result of the additional foreign exchange contracts entered into with the financial institute on July 12th, 2007.
Analysis of Financial Status in 2007 and 2008
As at September 30th, 2008, the total assets of AOT and its subsidiaries amounted to 146,455.97 million Baht,
an increase of 2,988.99 million Baht, or 2.08% from the previous year. This could be attributed mainly to the receipt of the compensation pursuant to the Civil Court’s orders. Liabilities as at September 30th, 2008 totaled 70,147.58 million Baht, a decrease of 3,642.17 million Baht, or 4.94% due mainly to the transfer of advance concession revenues of 4,460.00 million Baht into compensation revenues following the Civil Court’s orders. Shareholders’ equity as at September 30th, 2008 totaled 76,308.39 million Baht, a rise of 6,631.16 million Baht, or 9.52% due to the improved operating results.
Liquidity
As at September 30th, 2008, AOT and its subsidiaries’ cash and cash equivalents amounted to 8,437.37 million Baht, a decrease of 1,794.02 million Baht, or 17.53% from the start of the fiscal year 2008 (October 1st, 2007).
Net cash from operating activities totaled 11,837.95 million while net cash used in investment activities amounted to 13,740.96 million Baht. Of which included investment in land, buildings, and equipment accounted for 5,666.37 million Baht and short-term and long-term investment accounted for 7,746.52 million Baht. Net cash from financing activities totaled 108.99 million Baht. 2,256.30 million of which was proceeds from long-term debts deducted debt repayment of 1,565.88 million Baht and dividend payment of 571.43 million Baht.
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annual report 2008
Operating Results Regarding Service AOT operates 6 airports in Thailand, namely Suvarnabhumi Airport, Don Mueang International Airport,
Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport and Chiang Rai International Airport. In the fiscal year 2008, AOT’s airports provided service for 108 scheduled airlines including 98 mixed passenger-cargo carriers and 10 cargo carriers. Air traffic volume at six AOT airports totals 394,057 flights, or a 0.96% increase. This was comprised of 220,673 international flights, or a 2.52% increase and 173,384 domestic flights, or a 0.96% decrease. AOT airports handled 58,304,267 passengers, or an increase of 4.08%, 36,836,936 of which were international passengers and 21,467,331 of which were domestic passengers, an increase of 4.65% and 3.11% respectively. The total volume of cargo and postal parcels was 1,345,845 tons, or an increase of 6.65%. This consisted of 1,243,762 tons of international freight, or an increase of 7.54% and 102,083 tons of domestic freight, or a decrease of 3.18%. AOT’s overall volume of air traffic in the fiscal year 2008 has increased from that in the fiscal year 2007. The reason was
the increase in the number of inbound and outbound tourists, together with Thai people who traveled within the country. In addition, the air traffic volume of low cost carriers was rising. Nonetheless, there was still the presence of negative factors from the global financial situation affecting businesses and industries on
a grand scale, as well as the unresolved political crisis in the country resulting in the volume of air traffic not achieving its fullest potential.
Fiscal Year
Aircraft Movements (No. of Flights) Passenger Volume (No. of Persons) 2007 2008 % 2007 2008 % Suvarnabhumi + Don Mueang 307,244 311,435 1.36 45,123,945 46,932,118 4.01 267,555 256,118 - Suvarnabhumi -4.27 41,934,995 41,180,456 -1.80 39,689 - Don Mueang 55,317 39.38 3,188,950 5,751,662 80.36 38,368 Phuket 40,218 4.82 5,478,137 5,943,468 8.49 26,708 Chiang Mai 25,400 -4.90 3,370,690 3,276,309 -2.80 11,748 Hat Yai 10,270 -12.58 1,335,679 1,380,086 3.32 6,232 Chiang Rai 6,734 8.06 711,662 772,286 8.52 Total 390,300 394,057 0.96 56,020,113 58,304,267 4.08 Cargo and Postal Parcels Volume (Tons) 2007 2008 % Suvarnabhumi + Don Mueang 1,207,970 1,291,931 6.95 1,191,858 - Suvarnabhumi 1,259,685 5.69 16,112 - Don Mueang 32,246 100.14 17,498 Phuket 18,542 5.97 23,429 Chiang Mai 22,438 -4.23 10,141 Hat Yai 10,407 2.62 2,909 Chiang Rai 2,527 -13.13 Total 1,261,947 1,345,845 6.65
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annual report 2008
Suvarnabhumi Airport and Don Mueang International Airport
In the fiscal year 2008, Suvarnabhumi Airport and Don Mueang International Airport provided service for a total number of 311,435 flights, or an increase of 1.36% from that in the fiscal year 2007. The airports handled 46,932,118 passengers, an increase of 4.01%. The total volume of cargo and postal parcels was 1,291,931 tons, an increase of 6.95%. Suvarnabhumi Airport served 101 scheduled airlines including 91 mixed passenger-cargo carriers and 10
all-cargo carriers. The total number was 256,118 flights, 196,979 of which were international flights and 59,139 of which were domestic flights. The airport also handled 41,180,456 passengers, 34,025,340 of which were international passengers and 7,155,116 of which were domestic passengers. The total volume of cargo and postal parcels was 1,259,685 tons. This consisted of 1,234,413 tons of international freight and 25,272 tons of domestic freight.
Don Mueang International Airport provided service for 4 domestic scheduled airlines. The total volume of
flights was 55,317, consisting of 2,526 international flights and 52,791 domestic flights. The airport handled 5,751,662 passengers, 28,661 of which were international passengers and 5,723,001 of which were domestic passengers.
The total volume of cargo and postal parcels was 32,246 tons comprising 4,040 tons of international freight and 28,206 tons of domestic freight.
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annual report 2008
Phuket International Airport
In the fiscal year 2008, Phuket International Airport served 28 scheduled airlines. The total volume of flights was 40,218, or an increase of 4.82%. This included 17,317 international flights, both scheduled and chartered, or
an increase of 6.64%. There were 22,901 domestic flights, or a 3.49% increase. The airport handled the total number of 5,943,468 passengers, or an increase of 8.49%. This was comprised of 2,411,625 international passengers and 3,531,843 domestic passengers or an increase of 17.36% and 3.18% respectively, both Thai and foreigners. The total volume of cargo and postal parcels was 18,542 tons, or an increase of 5.99%. This consisted of 4,932 tons of international freight, or an increase of 18.67% and 13,610 tons of domestic freight, or a slight increase of 2.04%.
Chiang Mai International Airport
In the fiscal year 2008, Chiang Mai International Airport provided service for 15 scheduled airlines. The total volume of flights was 25,400, or a 4.90% decrease. This was comprised of 3,621 international flights, or a 28.41% decrease and 21,779 domestic flights, or a 0.60% increase. The airport served 3,276,309 passengers, or a 2.80% decrease, 347,419 of which were international passengers and 2,928,890 of which were domestic passengers, or
a decrease of 0.99% and 3.01% respectively. The considerable drop in the volume of international air traffic was resulted from the reduction of scheduled flights operated by Bangkok Airways and China Airlines, together with
the cancellation of all flights operated by Tiger Airways. The total volume of cargo freight including goods and postal parcels was 22,438 tons, or a decrease of 4.23%. This was consisted of 337 tons of international freight, or an increase of 22.80% and 22,061 tons of domestic freight, or a decrease of 4.59%.
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annual report 2008
Hat Yai International Airport
In the fiscal year 2008, Hat Yai International Airport handled 10,270 flights, or a 12.58% decrease and served 4 scheduled airlines. There were 215 international flights and 10,055 domestic flights, or a decrease of 78.39% and 6.49% respectively. The airport served 1,380,086 passengers, or a 3.32% increase, 23,667 of which were international passengers, a decrease of 74.99%. The decline in the number of tourists was attributed to the southern insurgency in Thailand. As regards domestic passengers, the number was 1,356,419, or a 9.29% increase. The total volume of cargo and postal parcels was 10,407 tons, or an increase of 2.62%, all of which were domestic freight.
Chiang Rai International Airport
In the fiscal year 2008, Chiang Rai International Airport provided service for 5 domestic scheduled airlines.
There were 6,734 flights, or an 8.06% increase, 15 non-scheduled international flights and 6,719 domestic flights,
an increase of 8.20%. The airport handled a total number of 772,286 passengers, an increase of 8.52%. This was comprised of 224 international passengers and 772,062 domestic passengers, or an increase of 8.50%. The majority of passengers traveled with low cost carriers between Bangkok and Chiang Rai. The total volume of cargo and postal parcels was 2,527 tons, or a decrease of 13.13%, all of which were domestic freight.
045
annual report 2008
Tonnes 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
046
annual report 2008
1999
2000 2001 International 2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers 1,585,236 12,874,283
1,702,173 12,422,370
46,932,118
45,123,945
32,472,599
30,999,402
29,276,672 42,360,678
26,622,474 38,889,229
1,824,206 11,259,800
1,766,191 10,500,564
25,086,445 1,763,794 36,364,006 9,513,767
2007
53,478
Cargo Volumes
1,238,453 1,291,931
1,152,044 1,207,970
1,137,605 1,198,120
1,061,744 1,119,433
978,336 1,029,568
20,999,349 1,518,052 29,674,852 7,157,451
22,284,375 1,676,669 31,205,692 7,244,648
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
55,926
60,515
57,689
51,232
47,361
2000 2001 International
894,315 941,676
881,858 930,770
21,067,561 30,985,938 1,886,113 7,492,264
20,101,314 29,054,259 1,770,184 7,182,761
2000 2001 International
48,912
48,739
1999
801,076 849,815
811,389 856,200
1999
44,811
41,531
Passengers 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 18,446,838 26,847,924 1,590,177 6,810,909 166,029
111,930
114,315
98,547
199,505
311,435
307,244
280,704
265,122
232,760
192,929
182,157
175,540
159,160
195,530
193,314
187,133
135,808
135,309
131,874
122,497 176,895
89,582
73,600
59,722
58,005
55,259
54,398
49,190
116,839
Movements 360,000 320,000 280,000 240,000 200,000 160,000 120,000 80,000 40,000 0
737,114 778,645
Air Traffic Statistics
Suvarnabhumi Airport and Don Mueang International Airport Aircraft Movements
2008 Fiscal Year
Number of Passengers
2008 Fiscal Year
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
Tonnes 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
1999
2000 2001 International
13,610
2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
18,542 13,460
16,733
3,529,165
2,400,843
3,422,439
2,038,965
5,943,468
5,478,137
1,519,959 4,467,982 25,890 2,922,133
1,065,607 3,472,652 49,387 2,357,658
2007
4,932
17,498 13,338
16,274 13,584
16,822 12,135
1,832,505 4,522,098 77,201 2,612,392
1,359,380 3,461,710 51,408 2,050,922
1,311,594 3,558,908 38,894 2,208,420
1,371,115 3,679,310 63,095 2,245,100
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
4,160
2,690
4,687
12,841
19,907
15,942 11,042
7,066
4,900
2000 2001 International
10,341
15,592
13,746
1,242,359 3,455,233 87,592 2,125,282
2000 2001 International
5,251
8,669
5,077
1999
16,433 11,215
1999
5,218
9,771
1,080,787 3,200,534 82,803 2,036,944
Passengers 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0
15,142
22,901
22,129 17,317
16,239
28,991
26,803
29,817
24,301
22,911
25,370
22,824
20,619
16,304
12,687
15,335
11,468
14,995
14,822
12,456
11,845
10,883
12,028
12,842
12,528
11,309
11,515
8,910
11,709
40,218
38,368
Movements 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
5,371
Phuket International Airport Aircraft Movements
2008 Fiscal Year
Number of Passengers
2008 Fiscal Year
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
annual report 2008
047
Tonnes 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
048
annual report 2008
1999
2000 2001 International 2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
22,438 22,061
329,149 18,376
323,438 27,565
295,672 34,407
195,613 59,049
186,980 68,258
149,025 43,666
3,276,309 2,928,784
3,370,690 3,019,687
3,078,156 2,748,077
3,011,917 2,757,255
2,663,990 2,408,752
2,001,541 1,808,850
2,078,923 1,938,948
2,248,786 2,123,198
2007
377
23,429 23,122
26,009 25,714
24,376 23,707
24,758 24,051
24,917 24,236
107,539 32,436
102,751 22,837
2,208,129 2,084,524
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
307
295
669
707
681
2000 2001 International
24,336 23,960
24,129 23,751
91,069 32,536
2000 2001 International
376
378
1999
21,945 21,598
2,111,595 2,019,510
1999
347
68,685 23,400
Passengers 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0
17,440 17,318
3,621
5,058
5,690
4,884
20,214
25,400 21,779
26,708
24,469
21,650
18,779
22,362 17,478
14,727
15,774
16,183 13,694
15,357 13,589
15,864 13,996
16,196 14,658
11,779 5,487
3,995
2,489
1,768
1,868
1,538
Movements 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
122
Chiang Mai International Airport Aircraft Movements
2008 Fiscal Year
Number of Passengers
2008 Fiscal Year
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
Hat Yai International Airport
1999
2000 2001 International
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
2007
10,270 10,055 215
11,748 10,753 995
9,350
10,532 9,272 1,260
1,252
1,782
7,784 6,532
5,590 3,976 1,614
4,413
4,513
8,926
10,815 4,748
6,067
9,982 4,798
5,184
8,492 4,176
4,316
Movements 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
11,132
Aircraft Movements
2008 Fiscal Year
1999
2000 2001 International
2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
1,380,086 1,356,068 22,162 1,856
1,335,679 1,240,569 94,454 656
1,293,268 1,157,247 134,180 1,841
1,287,477 1,137,544 147,046 2,887
1,009,640 907,820 93,723 8,097
97,162 5,720
718,621 615,739
761,499 627,605 128,387 5,507
824,186 668,635 147,853 7,698
873,649 665,094 200,729 7,826
215,262 6,262
Passengers 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
820,151 598,627
Number of Passengers
2008 Fiscal Year
1999
2000 2001 International
10,407 10,407 0
10,141 10,141 0
10,338 10,335 3
10,957 10,931 26
9,385 9,240 145
9,351 9,170 181
11,973 11,752 221
14,435 14,172 263
11,865 11,543 322
448
Tonnes 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
12,653 12,205
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
049
annual report 2008
Chiang Rai International Airport
1999
2000 2001 International
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
2007
6,734 6,719 15
6,232 6,210 22
5,659 5,646 13
4,927 4,913 14
4,869 4,845 24
3,710 3,695 15
4,852 4,844 8
4,800 4,798 2
5,343 5,008 0
0
Movements 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
4,311 3,885
Aircraft Movements
2008 Fiscal Year
2000 2001 International
2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
772,286 771,947 224 115
711,662 711,468 31 163
696,492 696,395 22 75
677,407 676,532 431 444
554,364 552,330 1,748 0
417,345 414,966
476,524 476,315
2,118 0
6
0
0
1999
209 0
556,677 556,671
575,565 560,152 13,250
19,186 0
Passengers 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
540,389 519,423
Number of Passengers
2008 Fiscal Year
1999
050 annual report 2008
2000 2001 International
2,527 2,527 0
0
0
0
2,909 2,909
4,698 4,698
5,070 5,070
4,879 4,879 0
4,238 4,238 0
5,075 5,075 0
4,097 4,097 0
4,264 4,231 0
0
Tonnes 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
2,920 2,913
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
AOT’s Air Traffic Statistics
Total Number of Passengers (No. of Passengers) Suvarnabhumi Don Mueang Phuket Chiang Mai Hat Yai Chiang Rai
Total Aircraft Movements Suvarnabhumi Don Mueang Phuket Chiang Mai Hat Yai Chiang Rai
256,118 55,317 40,218 25,400 10,270 6,734 394,057 (No. of Movements) 41,180,456 5,751,662 5,943,468 3,276,309 1,380,086 772,286 58,304,267
Cargo Volumes (Freight & Mail) Excluding Transit Suvarnabhumi Don Mueang Phuket Chiang Mai Hat Yai Chiang Rai
(Tonnes) 1,259,685 32,246 18,542 22,438 10,407 2,527 1,345,845
051
annual report 2008
Risk Management AOT Risk Management
AOT implemented a risk management system in the fiscal year 2003 and set up the AOT Risk Management Committee to specify AOT risk management policy and framework, analyze possible risks and their influence on AOT in order to manage risks properly, minimize damage to the organization as well as to follow changes in new risks likely to happen in the future in the changing environment. As for the fiscal year 2008, AOT’s risk factors can be briefly outlined as follows:
1. Risk from Impact of Noise Exposure
Compensation for those affected by noise exposure from airport operations through the purchasing of properties or the renovation of affected buildings was a new matter for the related parties since there were sensitive issues regarding techniques, finance and society. However, AOT has handled this matter with the utmost fairness to those involved according to the law and regulations. AOT realized that operations at Suvarnabhumi Airport may have set
a compensation standard regarding impact of noise exposure caused by the operations of other AOT airports.
AOT’s measures in the prevention and reduction of risk arising from the impact of noise exposure included rapid compensation by purchasing properties or renovating affected buildings, the establishment of understanding among the communities in the vicinity of the airports, the alteration of flight routes, etc. AOT would sell the purchased properties at a reasonable price within an appropriate time.
052 annual report 2008
2. Risk from Air Navigation Act, B.E. 2497, amended and added by Air Navigation Act (No.11) B.E. 2551
At present, it is required that the rate of airport maintenance costs be approved or specified by the Civil Aviation Board. Such rate comprises take-off and landing charges, parking charges and passenger service charge. The Air Navigation Act, B.E. 2497, amended and added by the Air Navigation Act (No.11) B.E. 2551, states that charges, compensation and other service charges (not only take-off and landing charges, parking charge and passenger service charge) be approved by the Civil Aviation Board. This Act may affect the flexibility in operation of AOT. AOT has closely followed and coordinated with the Department of Civil Aviation, which acts as the secretary of the Civil Aviation Board, to ensure that AOT operation is in compliance with the Act in order to reduce any possible impacts.
3. Risk from adjustment of compensation rate caused by the use of Don Mueang International Airport and regional airports on state property
The Treasury Department requires payment from AOT arising from the use of state property to operate
Don Mueang International Airport and Suvarnabhumi Airport at the rate of 5% of operating revenues including all expenses, and regional airports at the rate of 2% of operating revenues including all expenses. The Regulations of
the Ministry of Finance and the Royal Thai Air Force on the subject of the use of Crown Lands under the supervision of the Royal Thai Air Force and the Department of Aviation, B.E. 2545 states that the rate of compensation for
the use of Don Mueang International Airport and regional airports be adjusted according to the results of a study to be conducted by an advisor assigned by the Treasury Department after the opening of Suvarnabhumi Airport. The specification of the compensation rate is currently under negotiation with the Treasury Department for reasons of fairness towards AOT as regards its business operations, financial status and operating results.
4. Income and Income Structure Risk
Over half of AOT’s income derives from airport charges and passenger service charge, both of which depend heavily on the growth of airline and tourism business. If tourism is affected by any notable incidents, airport operations will be adversely affected. Moreover, considering the competitive environment, an increase in future income through adjustment of maintenance cost is far from possible.
053
annual report 2008
AOT reduced the impact caused by depending on aeronautical revenues by increasing income from
non-aeronautical revenues. Thus, AOT created money from the land occupied by the organization, such as
the approximately 1,000 Rai in Suvarnabhumi Airport which is reserved for commercial activities as well as any
other new services to be added for the airport.
5. Risk from the Continuous Impact of Oil Prices
The consecutive rises in the price of aircraft fuel affected airline business greatly, especially low cost carriers.
The soaring price of oil affected business as a whole, resulting in a decrease of passenger volume.
6. Risk from the Combined use of Don Mueang International Airport and Suvarnabhumi Airport
At present, Don Mueang International Airport serves low cost carriers operating point - to - point domestic flights. Nonetheless, with a rapid increase in the volume of both international and domestic air traffic, it is necessary to use Don Mueang International Airport to provide services for more airlines in a long term. This can be considered as making greater use of existing property. The combined use of Don Mueang International Airport and Suvarnabhumi Airport should be developed and operated in a collaborative manner, otherwise it may affect AOT’s ability to be a regional hub. AOT, hence, assigned the International Civil Aviation Organization (ICAO) to conduct a study of using both airports in terms of Bangkok Airport System and the development and management to be conducted should be concerned of all related parties interest. This can be explained in details as these: the nation’s interest to maintain Thailand as a leading regional hub; passengers convenience in using airport facilities, in traveling by domestic flights and in connecting to all destinations in the world; airlines interest; including benefits to AOT and its shareholders. The result of the study is scheduled to be completed around February 2009.
7. Risk from the Dispute with Bangkok Metropolitan Administration regarding the Calculation of House and Land Tax
The Bangkok Metropolitan Administration (BMA) has estimated the house and land tax by including the service providers interest as the base of the annual house and land calculation. However, AOT did not agreed and appealed to Office of the Attorney General every year since 1995. Office of the Attorney General sent a document stating the final ruling of the Ruling Committee to End Civil Cases against the Government Sections and Related Sectors regarding the estimation of tax from 1995 to 2004.
If the BMA accepts this final decision, AOT will receive a tax refund worth 570 million baht from the BMA.
054
annual report 2008
The BMA, however, did not approve the criteria used in estimating the tax as specified by the Ruling Committee appropriate. On October 2nd, 2006, the Treasury Department, as the landowner, sent a letter notifying AOT that
a letter had been sent to Office of the Attorney General to be passed on to the Cabinet to instruct the BMA to act accordingly. On May 28th, 2008, the BMA issued a letter requesting the Office of the Council of State to reconsider
the matter. The Office of the Council of State considered the facts. However, Office of the Attorney General had already sent the Ruling Committee’s final decision as well as the Cabinet resolution concerning the guidelines of
the proceeding of criminal, civil and administrative cases. The matter is considered settled. The Office of the Council of State, therefore, cannot take the matter into consideration. Nonetheless, if the BMA does not accept the decision, the issue can be taken to court.
055
annual report 2008
Shareholding and Management Structure
Shareholding Structure AOT has registered capital of 14,285,700,000 Baht, or a total of 1,428,570,000 ordinary shares, fully paid up and with a par value of 10 Baht each. Major Shareholders as of 27/02/2008 Airports of Thailand Public Company Limited (AOT) Total Number of Shares Percentage ofShares
No.
Name/Last Name
1 2 3 4 5 6 7 8 9
MINISTRY OF FINANCE 1,000,000,000 70.000 CHASE NOMINEES LIMITED 1 65,534,500 4.587 NORTRUST NOMINEES LTD. 60,272,590 4.219 STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA, 37,015,076 2.591 STATE STREET BANK AND TRUST COMPANY 33,062,686 2.314 HSBC (SINGAPORE) NOMINEES PTE LTD. 32,976,615 2.308 GOLDMAN SACHS INTERNATIONAL 18,557,800 1.299 THAI NVDR COMPANY LIMITED 13,497,677 0.945 DEUTSCHE BANK AG, LONDON PRIME BROKERAGE 10,706,100 0.749 THE BANK OF NY NOMINEES LTD SUB A/C MACQUARIE GBL 9,525,612 0.667 INFRASTRUCTURE FD 1,281,148,656 89.679
10
Number of of % Number % Shareholders Shares Thai shareholders Foreign shareholders Total
058 annual report 2008
10,717 101 10,818
99.07 1,085,691,544 0.93 342,878,456 100.00 1,428,570,000
76.00 24.00 100.00
The AOT Board of Directors as of September 30th, 2008
Consist of 14 directors as follow :
1. Mr. Vudhibhandhu Vichairatana (Age 60) Chairman and Independent Director Position Director-General, Bureau of the Budget Education • Master of Economics, University of Arkansas, U.S.A. • Bachelor of Economics, Stephen F. Austin State University, Texas, U.S.A. Training • National Defence College Class 38 • Director Accreditation Program Class 49/2005, Thai Institute of Directors (IOD) • The Role of Chairman Program Class 3/2001, Thai Institute of Directors (IOD) Work Experience 2004 - 2007 Director, TMB Bank Public Company Limited 2004 - 2006 Director, Thai Airways International Public Company Limited 2002 - Present Director-General, Bureau of the Budget 2001 - 2002 Deputy Director-General, Bureau of the Budget (Executive 10) 1999 - Present Director, PTT Exploration and Production Public Company Limited Experience Relevant to AOT Business • Expertise in economics, finance, and monetary • Expertise in development planning and strategies
2. Mr. Surachai Tansitpong (Age 59) Director Position Deputy Permanent Secretary,
Ministry of Transport Education • Master of Public Administration in Public and Private Management, National Institute of Development Administration (NIDA) • Bachelor of Business Administration (Construction Management), Sukhothai Thammathirat Open University • Bachelor of Engineering (Civil Engineering), Chulalongkorn University Training • National Defence Course,
National Defence College Class 15 • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) Work Experience 2006 - Present Deputy Permanent Secretary, Ministry of Transport 2006 - 2007 Chairman, the Transport Co.,Ltd 2002 - 2006 Director-General, Department of Rural Roads, Ministry of Transport (Executive 10) 2001 - 2002 Deputy Director-General, Department of Public Works, Ministry of Interior (Executive 9)
059 annual report 2008
Experience Relevant to AOT Business • Expertise in transport • Expertise in development planning and strategies • Expertise in engineering 3. Air Chief Marshal Raden Puengpak (Age 61) Independent Director Position Retired civil servant Education • Master of Management Business Administration
(Ex-MBA) Class 7, Kasetsart University • Bachelor of Science, Royal Thai Air Force Academy Training • National Defence College Class 39 • Royal Thai Air Force Air War College Class 26 • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) • Director Certification Program Class 107/2008, Thai Institute of Directors (IOD) Work Experience 2005 - 2007 Deputy Supreme Commander 2002 - 2005 Assistant Commander-in-Chief 2000 - 2001 Commander, Air Combat Command Experience Relevant to AOT Business • Expertise in aviation • Expertise in management and business administration
060 annual report 2008
4. Mr. Chaisak Angkasuwan (Age 58) Director Position Director-General, Department of Civil Aviation Education • Master of Public Administration in Public and Private Management, National Institute of Development Administration (NIDA) • Bachelor of Law, Thammasat University Training • National Defence Course,
National Defence College Class 4414 • Director Accreditation Program Class 51/2006, Thai Institute of Directors (IOD) • The Role of Chairman Program Class 13/2006, Thai Institute of Directors (IOD) Work Experience 2005 - Present Chairman, the Board of Directors, Aeronautical Radio of Thailand Ltd. 2004 - Present Director-General, Department of
Civil Aviation 2003 - 2004 Deputy Director (for Economics), Department of Civil Aviation 2002 - 2003 Deputy Director (for Academics), Department of Civil Aviation Experience Relevant to AOT Business • Expertise in air transport and aviation-related legislation • Expertise in airport management
5. Mr. Utid Tamwatin (Age 58) Director Position Deputy Permanent Secretary, Ministry of Finance Education • LL.M, University of California, Berkeley, U.S.A. • Barrister at Law, The Thai Bar Association • Bachelor’s of Law (Hons), Thammasat University Training • National Defence Course, National Defence College Class 399 • Director Certification Program Class 3/2000, Thai Institute of Directors (IOD) Work Experience 2008 - Present Chairman, Eastern Water Resources Management and Development Public Company Limited 2006 - Present Deputy Permanent Secretary for Expenditure and Liability, Office of the Permanent Secretary, Ministry of Finance 2004 - 2006 Director-General, the Excise Department, Ministry of Finance 2003 - Present Director, Sukhumvit Asset Management Co.,Ltd 2002 - 2006 Deputy Permanent Secretary for Revenue, Office of the Permanent Secretary, Ministry of Finance Experience Relevant to AOT Business • Expertise in law • Expertise in monetary and finance
6. Mr. Vinai Vittavasgarnvej (Age 58) Director Position Inspector-General, Ministry of Finance Education • Master of Political Science (Public Administration), Thammasat University • Bachelor of Accounting (Accounting), Thammasat University Training • National Defence College Class 47 • Director Certification Program Class 77/2006, Thai Institute of Directors (IOD) Work Experience 2008 - Present Inspector-General, Ministry of finance 2005 - Present Director, Erawan Hotel Public Company Limited 2005 - 2008 Principal Advisor on Tax Base Management, The Revenue Department 2003 - 2005 Deputy Director-General, The Revenue Department Experience Relevant to AOT Business • Expertise in excise
061
annual report 2008
7. Mr. Pongsak Semson (Age 57) Independent Director Position Permanent Secretary for Bangkok Metropolitan Administration Education • Ph.D. in Political Science (Majoring in Political Theory and Thai Government, International Relations, Administrative Laws, Public Policy, and Public Administration), Chulalongkorn University • Master of Management Business Administration, Nation Institute of Development Administration (NIDA) • Master of Political Science, Thammasat University • Bachelor of Political Science, Chiang Mai University Training • National Defence Course, National Defence College Class 4212 • Audit committee Program Class 22/2008, Thai Institute of Directors (IOD) Work Experience 2006 - Present Permanent Secretary, the Bangkok Metropolitan Administration 2002 - 2006 Director-General, Department of
Civil Aviation 2000 - 2002 Director, Department of Policy and Planning, Bangkok Metropolitan Administration 1998 - 2000 Chief Inspector-General, Office of the Permanent Secretary for the Bangkok Metropolitan Administration
062 annual report 2008
Experience Relevant to AOT Business • Expertise in management and business administration 8. Police General Sombat Amornvivat (Age 62) Independent Director Position Advisor to Minister of Justice Education • Master of Public Administration, National Institute of Development Administration (NIDA) Training • National Defence College Class 34 • Federal Bureau of Investigation (FBI), U.S.A. • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) • Director Certification Program Class 107/2008, Thai Institute of Directors (IOD) Work Experience 2008 - Present Advisor to Minister of Justice 2007 - 2008 Deputy Director-General (Security), the National Police Bureau 2004 - 2006 Director-General, Department of Special Investigation, Ministry of Justice 2001 - 2004 Deputy Director-General,
the National Police Bureau Experience Relevant to AOT Business • Expertise in security
9. Air Chief Marshal Sumet Photimanee (Age 59) Independent Director Position Chief, Executive Staff Officers to Minister of Defence Education • Bachelor of Science, Royal Thai Air Force Academy Training • National Defence Course,
National Defence College Class 48 • Air Command and General Staff College (Class 30) • Training on RADAR Equipment, U.K. Work Experience 2008 - Present Chief, Executive Staff Officers to Minister of Defence 2006 - 2007 Director, RTAF Education 2005 - 2006 Commander, RTAF Security Forces Command 2002 - 2005 Commander, Don Mueang RTAF Base Experience Relevant to AOT Business • Expertise in aviation • Expertise in management
10. Mr. Arkhom Termpittayapaisith (Age 52) Director Position Deputy Secretary-General, National Economic and Social Development Board Education • Master of Economics, Williams College, U.S.A. • Bachelor of Economics, Thammasat University Training • National Defence College Class 46
• Senior Executive Program Class 35, Office of the Civil Service Commission • Director Accreditation Program Class 51/2005, Thai Institute of Directors (IOD) • Director Certification Program Class 97/2007, Thai Institute of Directors (IOD) • Audit Committee Program Class 22/2008, Thai Institute of Directors (IOD) Work Experience 2008 - Present Director, CAT Telecom Public Company Limited 2005- 2006 Director, TOT Public Company Limited 2004 - Present Deputy Secretary-General, National Economic and Social Development Board 2003 - 2004 Advisor in Policy and Plan Experience Relevant to AOT Business • Expertise in economics, monetary, and finance • Expertise in transport and communications • Expertise in development planning and strategies
063
annual report 2008
Work Experience 11. Mr. Chulasingh Vasantasingh (Age 58) 2005 - Present Deputy Attorney General,
Independent Director Office of the Attorney General Position Deputy Attorney General,
2005 Inspector-General,
Office of the Attorney General Office of the Attorney General Education 2004 - Present Director, Ratchaburi Electricity • Master of Comparative Law (MCL),
Generating Holding Public Company University of Illinois, U.S.A. Limited • Barrister at Law, the Institution of Legal Education 2004 - 2005 Director-General, Department of the of Thai Bar Association Legal Counsel, Office of the Attorney • Bachelor of Law (Hons), Chulalongkorn University General Training 1998 - Present Director, Petroleum Exploration and • National Defence College Class 388 Production Public Company Limited • Director Certification Program Class 35/2003,
Experience Relevant to AOT Business Thai Institute of Directors (IOD) • Expertise in law • Audit Committee Program Class 17/2007,
• Expertise in transport and communications Thai Institute of Directors (IOD) • Expertise in management and business administration
064
annual report 2008
12. Mr. Thaworn Phanichaphan (Age 58) Independent Director Position Deputy Attorney General,
Office of the Attorney General Education • Master of Law, Chulalongkorn University • Barrister at Law, the Institution of Legal Education of Thai Bar Association • Bachelor of Law (Hons), Chulalongkorn University Training • National Defence Course,
National Defence College Class 4313 • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) • Audit Committee Program Class 22/2008,
Thai Institute of Directors (IOD) • Director Certification Program Class 108/2008, Thai Institute of Directors (IOD) Work Experience 2007 - Present Deputy Attorney General,
Office of the Attorney General 2006 - 2008 Director, Thailand Post Co.,Ltd 2005 - 2006 Director-General, Department of Legal Counsel, Office of the Attorney General 2003 - 2005 Director-General, Department of Narcotics Litigation, Office of
the Attorney General
Experience Relevant to AOT Business • Expertise in Law • Expertise in management and business administration 13. Flight Lieutenant Usar Borisuth (Age 63) Independent Director Position President, Tubusa Resort & Dragon Fruit Garden Education • Master of Political Science (Public Administration), Thammasat University • Bachelor of Science, Royal Thai Air Force Academy Training • Director Accreditation Program Class 59/2006, Thai Institute of Directors (IOD) Work Experience 2005 - 2006 Director, Airports of Thailand Public Company Limited 2004 - 2005 Director, Mass Rapid Transit Authority of Thailand 1999 - 2001 Deputy Managing Director (Administration)
Airports Authority of Thailand Experience Relevant to AOT Business • Expertise in airport management
065 annual report 2008
14. Mr. Apichart Sayasit (Age 42) Independent Director Position Managing Director, Baker Tilly Audit and Advisory Services (Thailand) Ltd. Education • Master of Business Administration (Finance), Thammasat University • Bachelor of Accounting, Thammasat University Training • Director Accreditation Program Class 72/2008, Thai Institute of Directors (IOD) • Audit Committee Program Class 22/2008,
Thai Institute of Directors (IOD) • Director Certification Program Class 108/2008, Thai Institute of Directors (IOD)
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annual report 2008
Work Experience 2007 - Present Managing Director, Baker Tilly Audit and Advisory Services (Thailand) Ltd. 2006 - 2007 Executive Director, M.R. & Associate Company Limited 2004 - 2005 Vice President, Horwath (Thailand) Limited Experience Relevant to AOT Business • Expertise in accounting and finance • Expertise in management and business administration
AOT Management Team as of 30 September, 2008
1. Mr. Serirat Prasutanond (Age 57) 2. Mrs. Kulya Pakakrong (Age 58) Position General manager of Suvarnabhumi Airport Position Senior Executive Vice President
and Acting President (Planning and Finance) Education Education • Master of Business Administration,
• Master of Development Administration, National Kasetsart University Institute of Development Administration (NIDA) • Master of Science, Mahidol University • Bachelor of Accouunting, Thammasat University • Master of Development Administration, National Training Institute of Development Administration (NIDA) • Investor Relations Program, the Stock Exchange
• Bachelor of Economics, Thammasat University of Thailand Training • Chief Financial Officer Certification Program • Information System for Senior Executives • Competitiveness: Challenges and Opportunities for • Development of Good Corporate Governance Asian Countries • IT for Management of a Modern Airport • Foreign Exchange, Derivatives, and Equity Market • Public Administration and Law • Director Accreditation Program Class 64/2007, • Politics and Government in the Democratic System Thai Institute of Directors (IOD) for Senior Executives Work Experience Work Experience 2006 - Present Senior Executive Vice President, 2008 - Present General Manager of Suvarnabhumi Planning and Finance Airport and Acting President and Acting President 2007 - 2008 General Manager of Suvarnabhumi (2 February - 7 October 2008) Airport 2002 - 2006 Executive Vice President, Planning 2005 - 2007 Senior Executive Vice President, and Finance (Regional Operations) 2001 - 2002 Assistant Managing Director 2002 - 2005 Executive Vice President
(Planning and Finance) (Special Affairs) 1996 - 2001 Vice president, Planning and Finance Department
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3. Mr. Saneh Chausurin (Age 55) Position Senior Executive Vice President (Administration) Education • Master of Business Administration, National Institute of Development Administration (NIDA) • Bachelor of Political Science,
Chulalongkorn University Training • IT for Management of a Modern Airport • Politics and Government in the Democratic System for Senior Executives, King Prajadhipok’s Institute • Information System for Senior Executives • Development of Good Corporate Governance
068 annual report 2008
Work Experience 2006 - Present Senior Executive Vice President (Administration) 2005 - 2006 Senior Executive Vice President and Acting Deputy General Manager of Suvarnabhumi Airport (Business Development) 2002 - 2005 Senior Specialist 11 and Acting Deputy General Manager of Suvarnabhumi Airport (Business Development) 2002 - 2005 Executive Vice President (Administration)
4. Mr. Niranda Theeranartsin (Age 57) 5. Mr. Surajit Surapolchai (Age 60) Position Senior Executive Vice President
Position Senior Executive Vice President (Business Development) (Engineering and Information Technology) Education Education • Diploma in Human Resource Management, Sasin • Bachelor of Business Administration, Sukhothai Graduate Institute of Business Administration of Thammathirat Open University Chulalongkorn University • Bachelor of Engineering, Chulalongkorn University • Bachelor of Political Science (Personnel Training Management), Chulalongkorn University • Knowledge Development on Business Training Administration and Business Law • Corporate Plan for AOT Senior Executives • The Zuyder Zee Project • Leadership/Team Development Seminar • Aerial Photography • Maintenance and Troubleshooting of Airfield • Design and Coust on Soft Clay Lighting System Training program, Belgium Work Experience Work Experience 2008 - Present Senior Executive Vice President 2008 - Present Senior Executive Vice President (Engineering and Information (Business Development) Technology) 2004- 2008 Executive Vice President 2007 - 2008 Senior Specialist 11 (Administration) 2004 - 2007 Deputy Project Director for Project 1998 - 2004 Vice President, Administration Director, New Bangkok International Department Airport Co.,Ltd
069 annual report 2008
6. Flight Lieutenant Viwat Smarnrug (Age 60) 7. Mrs. Supaporn Burapakusolsri (Age 55) Position Senior Executive Vice President
Position Executive Vice President
(Regional Airports) (Planning and Finance) Education Education • Bachelor of Science, Royal Thai Air Force Academy • Master of Accounting, Thammasat University • Bachelor of Accounting (Hons.),
Training Thammasat University • Development of Good Corporate Governance • Media Training Program Training • IT for Management of a Modern Airport • Financial and Budget Management • Knowledge Development on Business • Mini MBA Class 1 Administration and Business Law • Airport Management Commercial, Singapore • Strategic Airport Development, Germany Work Experience 2007 - Present Senior Executive Vice President Work Experience (Regional Airports) 2006 - Present Executive Vice President 2004 - 2007 Deputy General Manager of (Planning and Finance) Don Mueang International Airport 2005 - 2006 Senior Specialist 10 (Administration) 1994 - 2005 Vice President, Finance Department 2001 - 2004 Vice President, Electrical and Mechanical Department 1997 - 2001 General Manager of Chiang Mai International Airport
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Management
The Structure of the AOT Board of Directors
The AOT Board of Directors comprises 15 directors which is of an appropriate number to the company’s business. The Board established sub-committees, namely the Audit Committee, the Nomination Committee, the Remuneration Committee, the Good Governance Committee, and the Risk Management Committee to be responsible for specific areas in accordance with AOT’s Regulations. with the President being the company’s top executive.
The AOT Board of Directors
For the fiscal year 2008, the AOT Board of Directors comprises 15 directors which include the Chairman, who is an independent director, and the other 9 independent directors which exceeds the minimum number of 3 required by AOT regulations. The Board’s members must be experienced in diverse fields suitable for AOT business and at least one of this number must be expert in accounting and finance. They are as follows: No. 1 2 3 4 5 6 7 8 9
Name
Position Directorship Commencement Date th Mr. Vudhibhandhu Vichairatana Chairman (Independent Director) March 14 , 2008 March 14th, 2008 Mr. Surachai Tansitpong Director (replacing General Saprang Kalayanamitra) 14th, 2008 Air Chief Marshal Raden Puengpak Independent Director March (replacing Air Chief Marshal Ittaporn Subhawong) March 14th, 2008
Mr. Chaisak Angkasuwan Director (replacing Mr. Maitree Srinarawat) March 14th, 2008
Mr. Utid Tamwatin Director (replacing Mrs. Danucha Yindeepit) March 14th, 2008 14th, 2008
Mr. Pongsak Semson Independent Director March (replacing Mr. Chirmsak Pinthong) 14th, 2008
Police General Sombat Amornvivat Independent Director March (replacing Mr. Supot Sublom) 14th, 2008
Air Chief Marshal Sumet Photimanee Independent Director March (replacing Air Chief Marshal Narongsak Sangapong) Mr. Vinai Vittavasgarnvej
Director
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No.
Name
Position
10
Mr. Arkhom Termpittayapaisith
Director
11
Mr. Chulasingh Vasantasingh
Independent Director
12
Mr. Thaworn Phanichphan
Independent Director
13
Flight Lieutenant Usar Borisuth
Independent Director
14
Mr. Apichart Sayasit
Independent Director and Secretary 15 Air Marshal Chana U-Sathaporn Director (President)
Directorship Commencement Date March 14th, 2008 March 14th, 2008 (replacing Mr. Kampree Kaocharern) January 25th, 2008 March 14th, 2008 (replacing Mr. Yodyiam Teptaranon) March 14th, 2008 (replacing Mr. Nonthaphon Nimsomboon Commenced directorship on November 5th, 2007 and resigned on August 5th, 2008
Remarks - No.1-11 were elected by the resolution of the Annual Extraordinary Meeting of Shareholders 1/2008 on March 14th, 2008. - No.11 resigned the AOT directorship on September 19th, 2008. - No.12 was elected by the Annual Ordinary Meeting of Shareholders 2007 on January 25th, 2008. - No.14 was appointed to the Audit Committee as an accounting and financial expert.
All new directors will be provided with important information essential for the directors’ performance of duty as well as briefing on the overview of AOT business character. The AOT Board performs their duties responsibly and independently. There is a clear division of the roles and
a healthy balance of authority between the Chairman of AOT Board and the President of AOT as follows:
1. Authority of the AOT Board
The AOT Board has the authority and duty to conduct AOT business in compliance with the law, objectives, regulations, and the shareholders’ resolutions in an honest, moral and ethical manner as well as to safeguard the best interests of AOT and its shareholders.
2. Authority of the AOT President
The President shall manage AOT as assigned by the Board and in accordance with the corporate plan and budget approved by the Board. The President shall perform with honesty and integrity along with ensuring the best interests of AOT and shareholders. The President’s authority shall include the matters as follows:
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annual report 2008
(1) Operate and/or manage day-to-day business. (2) Employ, appoint, remove, transfer, promote, demote, dock pay or wages, impose disciplinary action, and dismiss employees according to AOT regulations except for employees at executive level or equivalent which requires a prior approval from the Board of Directors. (3) Work out and submit AOT’s business policy, plan, and budget for the Board’s approval as well as keeping the Board informed of the progress in implementing the approved plan and budget on a regular basis.
3. The Board of Directors has appointed sub-committees in accordance with AOT’s Regulations to assist in their work as follows: 3.1 The Audit Committee The Audit Committee consists of a minimum of 3 directors with at least 1 director who possesses financial and accounting knowledge and held 10 meetings during the year. The members are as follows: Name (1) Mr. Thaworn Phanichaphan (2) Mr. Pongsak Semson (3) Mr. Arkhom Termpittayapaisith (4) Mr. Apichart Sayasit
Position Chairman (Independent Director) Member (Independent Director) Member Member (Independent Director)
Remarks: - No.3 has been re-elected to AOT Board for another term and previously served as a member of the Audit Committee. He was re-appointed for an additional term to continue the work of good auditing and monitoring. - No.4 possesses financial and accounting knowledge with experience in auditing financial statements of many leading companies such as Unique Real Estate and Development Co.,Ltd, United Flour Mill Public Company Limited, Thai Setakij Insurance Public Company Limited, etc.
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annual report 2008
Scope of Duties and Responsibilities
(1) Ensure that the financial report contains accurate and sufficient information. (2) Ensure that AOT has an appropriate and efficient internal control system, risk management system, and internal audit system. (3) Review and ensure that AOT is in full compliance with the Securities and Exchange Act B.E. 2535 and the amendment to the Regulations of the Stock Exchange of Thailand and other laws relating to
the company’s business. (4) Consider, select, and propose the appointment and remuneration of an AOT auditor if necessary apart from the auditor from the Auditor General Office. (5) Consider the disclosure of AOT information in case there is a connected transaction or item that may lead to conflicts of interest to ensure accuracy and completeness. (6) Prepare reports on the Audit Committee’s supervision and disclose them in the AOT annual report which shall be duly signed by the Chairman of the Audit Committee. (7) Perform any other duties as assigned by the Board of Directors with consent from the Audit Committee. To that effect, the Audit Committee Charter shall be drawn up and submitted to the Board of Directors for approval. 3.2 The Nomination Committee The Nomination Committee consists of a minimum of 3 directors with at least 1 being an independent director and held 3 meetings during the year. The members are as follows: Name (1) Air Chief Marshal Raden Puengpak (2) Mr. Chaisak Angkasuwan (3) Mr. Utid Tamwatin (4) Flight Lieutenant Usar Borisuth
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annual report 2008
Position Chairman (Independent Director) Member Member Member (Independent Director)
Scope of Duties and Responsibilities
The Nomination Committee is responsible for selecting and proposing suitable persons to be nominated as new directors to the Board of Directors and at the shareholder’s meeting for ultimate approval. Selection method of Committee’s members must be performed under transparent criteria as stipulated by
the relevant law and the Announcement of the Ministry of Finance.
3.3 The Remuneration Committee The Remuneration Committee consists of a minimum of 3 directors with at least 1 being an independent director and held 2 meetings during the year. The members are as follows: Name (1) Mr. Utid Tamwatin (2) Air Chief Marshal Sumet Photimanee (3) Mr. Arkhom Termpittayapaisith (4) Mr. Thaworn Phanichaphan
Position Chairman Member (Independent Director) Member Member (Independent Director)
Scope of Duties and Responsibilities
(1) Consider the guidelines for determining the appropriate remuneration for the Board of Directors and the President of AOT. (2) Consider the criteria or procedures for determining the fair and reasonable remuneration and benefits for the Board of Directors and the President of AOT and submit to the Board for proposing at
the shareholdermeetings for approval. (3) Consider criteria or procedures for determining the remuneration for the outsiders who are appointed to be members of committees, sub-committees, and working groups and propose them to the Board for approval.
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annual report 2008
3.4 The Good Governance Committee The Corporate Governance Committee consists of a minimum of 3 directors with at least 1 being an independent director and held 6 meetings during the year. The members are as follows: Name (1) Police General Sombat Amornvivat (2) Mr. Pongsak Semson (3) Air Chief Marshal Sumet Photimanee (4) Mr. Thaworn Phanichaphan Scope of Duties and Responsibilities
Position Chairman (Independent Director) Member (Independent Director) Member (Independent Director) Member (Independent Director)
(1) Set out guidelines and direction on AOT’s corporate governance affairs and ensure that all departments implement and practice them accordingly. (2) Improve AOT’s Code of Conduct to encompass the Stock Exchange of Thailand’s Best Practices in Corporate Governance. (3) Oversee the Board and the Management to ensure they perform their duties in accordance with
the best practices in corporate governance. (4) Recommend approaches to good governance to the Board of Directors.
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annual report 2008
3.5 The Risk Management Committee The Risk Management Committee consists of a minimum of 3 directors, with 1 meeting held during the year.
The members are as follows: Name (1) Mr. Surachai Tansitpong (2) Mr. Chaisak Angkasuwan (3) Mr. Vinai Vittavasgarnvej (4) Mr. Arkhom Termpittayapaisith
Position Chairman Member Member Member
Scope of Duties and Responsibilities
(1) Set out AOT’s risk management policy and framework. (2) Oversee and support to ensure the success of the risk management at the corporate level. (3) Propose measures to effectively prevent and limit risks at an acceptable level. (4) Follow up, evaluate, and improve the operation plans to mitigate risks continuously and appropriately to the business circumstances.
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annual report 2008
4. Selection Criteria for Independent Directors and Nomination Procedures
4.1 Selection Criteria for Independent Directors AOT prescribes that the company’s Board of Directors shall consist of at least one third of independent directors. The company imposes a stricter qualification requirement for independent directors than those stipulated by
the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) as follows: (1) Independent directors must not hold more than 1% of the total voting shares of AOT, affiliated or associated companies or legal entities which may have conflicts of interest. (2) Independent directors must not be involved in any management and not be an employee or an advisor with a monthly salary, auditing consultant, legal consultant or other type of advisor. Nor are they the persons with controlling authority over AOT, affiliated and associated companies or legal entities with conflicts of interest. They must not have benefits or stakes in such manner for at least 2 years. (3) Independent directors must not have any business relationships with the company as customers, trading partners, trade creditors/debtors, and financial creditors/debtors. They must not have direct or indirect benefits in
the finance and management of AOT, affiliated and associated companies, or legal entities with conflicts of interest that may impair their independence in performance of their duties. 4) Independent directors should not be relatives or have a relationship, which may impede the independency of the management and major shareholders of AOT, affiliated and associated companies or legal entities, which may have conflicts of interest. Nor should they be appointed to represent or protect the benefits of any director or major shareholder. 4.2 Nomination Procedures for Independent Directors In nominating a new director, AOT gives first priority to selecting a qualified candidate to fill the position of
an independent director so that the structure of the Board is in tune with the good governance principles. This will facilitate the performance of the Board, ensuring the effectiveness of the management and balancing the power in safeguarding the benefits of shareholders and stakeholders. AOT ensures that the Board shall consist at least
3 independent directors as stipulated in AOT’s Regulations. The qualification of each director will be checked during
the year. If his/her qualification matches the requirement for an independent director, he/she will be considered
an independent director.
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annual report 2008
4.3 Self-assessment of the Board of Directors The Board shall conduct self - assessment, which allows the directors to review their performance and problems. The results of the review shall be analyzed for further improvement. 4.4 Enhancement of Committee Members and Managements The Board of Directors encourages and facilitates the development for committee members. The Audit Committee members and top executives were encouraged to attend the course for directors of listed companies and the course for auditors organized by the Thai Institute of Directors Association. AOT also encouraged the corporate secretary to attend the training course for corporate secretaries so he/she is fully aware of his/her roles and duties as stipulated by the law. Moreover, AOT invited a legal expert from Baker & Mckenzie Co.,Ltd. to brief the Board and
the Managements on the new Securities and Exchange Act (No.4) B.E. 2551, which defines the roles and responsibilities of directors and managements of listed companies. 4.5 Corporate Secretary The Securities and Exchange Act (No.4) B.E. 2551, Section 89/15 stipulates that the Board of Directors shall appoint a corporate secretary to coordinate tasks on behalf of the company or the Board. For the fiscal year 2008 from August 1st, 2007 to August 7th, 2008, the Board of Directors appointed Miss Suwannee Sumrongwatana
the Corporate Secretary. From August 8th, 2008 onwards, Flying Officer Pearl Rugsamruad was appointed
the Corporate Secretary in place of Miss Suwannee Sumrongwatana, who was promoted to Deputy General Manager of Suvarnabhumi Airport (Administration).
5. The Number of AOT Shares Held by the Board of Directors and the Board Meeting Attendance Record 2008
The Board of Directors holds a scheduled meeting once a month on every third Thursday except when there are urgent matters. Prior to each meeting, AOT will send supporting documents to the directors well in advance to allow sufficient time for proper review. The minutes of each meeting will be recorded in writing and the approved minutes signed by the Board will be filed for reference. As of September 30th, 2008, the number of AOT shares held by
the Board of Directors and the Board meeting attendance record are as follows:
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annual report 2008
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Name
Position
Mr. Vudhibhandhu Vichairatana Mr. Surachai Tansitpong Air Chief Marshal Raden Puengpak Mr. Chaisak Angkasuwan Mr. Utid Tamwatin Mr. Vinai Vittavasgarnvej Mr. Pongsak Semson Police General Sombat Amornvivat Air Chief Marshal Sumet Photimanee Mr. Arkhom Termpittayapaisith Mr. Chulasingh Vasantasingh Mr. Thaworn Phanichaphan Flight Lieutenant Usar Borisuth Mr. Apichart Sayasit Air Marshal Chana U-Sathaporn
Chairman (Independent Director) Director Independent Director Director Director Director Independent Director Independent Director Independent Director Director Independent Director Independent Director Independent Director Independent Director Director and Secretary (President)
Number of Meeting Shares Held Asthof Attendance Record September 30 , Total 14 Times 2008
Remarks - Number 11 resigned his directorship on September 19th, 2008. - Number 15 resigned his directorship and the position of secretary as well as President on August 5th, 2008.
080 annual report 2008
- - - - - - - - - - - - - - -
14/14 8/14 13/14 10/14 9/14 11/14 8/14 9/14 13/14 12/14 12/14 11/14 14/14 10/14 9/9
6. Remuneration for Directors and AOT Executives
The Remuneration Committee is responsible for reviewing AOT’s policy for the directors and special committee members to ensure it is both appropriate and comparable to other companies in the same industries. The Ordinary General Shareholders’ Meeting of 2007 on January 25th, 2008 approved of the remuneration for the directors and special committee members for the fiscal year 2008 as follows: 6.1 Remuneration for the Directors (1) A monthly remuneration of 20,000 Baht per person. Where the director was appointed during the month, the remuneration shall be paid in proportion to the number of days worked in that month. (2) An attendance fee of 15,000 Baht per meeting. Should there be more than one meeting in a certain month, the attendance fee shall be paid only once. (3) Each Audit Committee member receives 20,000 Baht per month despite no meeting in that month. The Audit Committee member who was appointed during the month shall receive the pay in proportion to the number of days worked. (4) The directors appointed by the Board to be a member of committee, sub-committee, or working group shall receive 10,000 Baht per meeting. However, the total pay received by each member shall not exceed 20,000 Baht per month excluding the remuneration for the Audit Committee members. (5) Chairman and Deputy Chairman of each committee shall receive an additional remuneration of 25% and 12.5%, respectively. (6) The remuneration and attendance fees for AOT Board of Directors for the fiscal year 2008 were set at no more than 15,000,000 Baht. According to AOT’s Regulations, only the details of remuneration for the directors and special committee members of the Audit Committee, the Nomination Committee, the Remuneration Committee, the Good Governance Committee, and the Risk Management Committee shall be reported.
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annual report 2008
6.2 Remuneration for the Board of Directors and Special Committees in 2008 Unit : Baht
No
Name
Good Risk Board of Audit Nomination Remuneration Governance Management Directors Committee Committee Committee Committee Committee
Total
2
Mr. Vudhibhandhu Vichairatana 293,669.36 293,669.36 Mr. Surachai Tansitpong 221,612.90 12,500.00 234,112.90
3
Air Chief Marshal Raden Puengpak 236,612.90
4
7
Mr. Chaisak Angkasuwan Mr. Utid Tamwatin Mr. Vinai Vittavasgarnvej Mr. Pongsak Semson
221,612.90 113,333.33
10,000.00
344,946.23
8
Police General Sombat Amornvivat 236,612.90
12,500.00
249,112.90
9
Air Chief Marshal Sumet Photimanee 236,612.90
236,612.90
10
Mr. Arkhom Termpittayapaisith Mr. Chulasingh Vasantasingh Mr. Thaworn Phanichaphan Flight Lieutenant Usar Borisuth Mr. Apichart Sayasit Air Marshal Chana U-Sathaporn
236,612.90 202,298.85
438,911.75
213,612.90
213,612.90
269,516.13 141,666.67
10,000.00
421,182.80
236,612.90
236,612.90
221,612.90 113,333.33
334,946.23
329,913.98
329,913.98
1
5 6
11 12 13 14 15
236,612.90 221,612.90 250,094.55
Remarks: - No.11 resigned his directorship on September 19th, 2008. - No.15 resigned his directorship and the positions of Secretary and President on August 5th, 2008.
082 annual report 2008
236,612.90 10,000.00 246,612.90 221,612.90 10,000.00 260,094.55
6.3 Remuneration for Directors Resigning During the Year (October 2007 – January 2008) Unit : Baht
No
Name
Good Risk Board of Audit Nomination Remuneration Governance Management Directors Committee Committee Committee Committee Committee
Total
1
General Saprang Kalayanamitra 229,956.90
235,200.00 465,156.90
2
Air Chief Marshal Narongsak Sangapong 206,961.21
238,500.00 465,461.21
3
7
Mr. Chavalit Sethameteekul 156,838.71 25,000.00 210,825.00 392,663.71 Mr. Kampree Kaocharem 183,965.52 88,965.52 25,000.00 22,500.00 189,000.00 509,431.04 Mr. Vudhibhandhu Vichairatana 153,965.52 216,000.00 369,965.52 Mr. Chaisak Angkasuwan 145,483.87 216,000.00 361,483.87 Mr. Arkhom Termpittayapaisith 156,724.14 30,000.00 216,000.00 402,724.14
8
Air Chief Marshal Ittapom Subhawong 153,965.52
4 5 6
Mr. Nonthaphon Nimsomboon 10 Mr. Tortrakul Yomnak 11 Mr. Yodyiam Teptaranon 12 Mr. Chirmsak Pinthong 9
20,000.00
30,000.00
189,000.00 372,965.52
183,965.52 111,206.90 20,000.00
189,000.00 504,172.42
155,483.87 75,483.87
50,000.00 189,000.00 469,967.74
183,965.22 88,965.52
189,000.00 461,930.74
186,724.14
10,000.00 20,000.00
147,483.87 364,208.01
13
Police General Sereepisuth Temeeyaves 81,483.87
68,400.00 149,883.87
14
Mrs. Danucha Yindeepit
18,000.00 231,965.52
183,965.52
30,000.00
Remarks: - The bonus for the fiscal year 2007 for the previous Board of Directors was paid in 2008 according to the resolution of the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008.
083 annual report 2008
7. Corporate Governance
In 2008, the Board of Directors carried out business in conformance with the Stock Exchange of Thailand’s 2006 Corporate Governance of Listed Companies. It can be summarized as follows: 7.1 Corporate Governance Policy of AOT The Board of Directors deemed it appropriate to revise AOT’s corporate governance policy, keeping it in line with the Stock Exchange of Thailand’s 2006 Corporate Governance of Listed Companies. It was widely announced to AOT units on January 29th, 2008 and disclosed on AOT’s website.
7.2 Rights of Shareholders Realizing the importance of the rights of shareholders, AOT has clearly stated in its corporate governance policy that the company shall ensure that the shareholders are entitled to all basic rights including the right to receive adequate information, the right to attend the shareholders’ meetings and vote at the meetings according to
the number of shares owned, the right to vote on the company’s important matters, and the right to share in the profits of the company. The details are as follows: (1) AOT will send a notice of the meeting to shareholders in advance along with a clearly stated agenda with the Board’s opinions on each proposed item, the minutes of the previous shareholders’ meeting, all proxy forms stipulated by the Ministry of Commerce, and the names of the independent directors who can be appointed proxies. Also included are the map of the meeting venue as well as the meeting rules and voting procedures. Moreover, shareholders can look for information about the notice of the meeting, the agenda, documents related to the agenda items, and all proxy forms on the Company’s website at least 20 days prior to the date of the meeting. (2) AOT will fix the date, time, and place of the meeting to facilitate all shareholders on an equitable basis. In addition to ensuring maximum security, the company provides appropriate and ample registration points. For shareholders’ convenience, AOT will open for advance registration at least 2 hours prior to the meeting, using
a barcode system for the registration and vote counting to speed up the processes. The Company also provides appropriate gifts and reception for shareholders attending the meeting. (3) Every shareholders’ meeting will be chaired by the Chairman of the Board of Directors. Before every meeting, the chairman will explain the voting method, vote counting procedures, and the use of ballots with
the results of the voting on each agenda item subsequently announced at the meeting. In counting the votes,
the Company invites volunteer shareholders to witness the procedures. AOT ensures that the voting and
the announcement of the voting results on each item will be clear and transparent to protect the rights of shareholders.
084 annual report 2008
At the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008, the Chairman of the Board of Directors as the Chairman of the Meeting, the Chairman of the Audit Committee, the Chairman of the Nomination Committee, the Chairman of the Remuneration Committee, the Corporate Governance Committee members as well as the AOT President and the top executives were in attendance to explain the details on each agenda item and to answer shareholders’ queries. AOT’s Auditor and legal consultant also attended the meeting in case there were any disputes. They also checked the proxy forms and witnessed the ballot counts which the Chairman of the Board carried out in conformity with the law. (4) The Chairman will arrange sufficient time and manage the meeting appropriately and transparently. During the meeting, the Chairman will offer shareholders opportunities to express opinions and ask questions before voting and concluding the meeting resolution for each agenda. Shareholders may also express opinions and raise questions about the company’s operations during the meeting. (5) The shareholders who arrive after the commencement of the meeting have the right to vote on the agenda being discussed and whose resolution not yet passed. (6) The Company will disclose information to shareholders regularly through the Stock Exchange of Thailand’s channels and the Company’s website. (7) Company visits are organized to enable the shareholders to have a better understanding about
the Company’s business. (8) The Company provides minor shareholders with a channel where they can obtain information directly through the E-mail addresses of the Good Governance Committee members, the Corporate Secretary, and
the Company’s Investor Relation Department. (9) The Company will operate with efficiency to ensure appropriate returns for the shareholders. 7.3 Equitable Treatment of Shareholders AOT emphasizes and provides equitable and fair treatment to every shareholder. To that effect, the Company has taken many efforts as follows: (1) The shareholders had the right to propose annual general meeting items and nominate a qualified person for directorship prior to the Ordinary General Meeting of Shareholders, which was announced to the shareholders through the Stock Exchange of Thailand’s channels 3 months before the end of the fiscal year (30 September 2008), or at least 6 months prior to the Ordinary General Meeting. The shareholders were informed of the criteria in considering
the shareholders’ proposed agenda or candidate. The information of which was informed through AOT’s website.
085 annual report 2008
Three months before the Ordinary General Meeting of Shareholders (before the end of the fiscal year on September 30th, 2008) or at least 6 months prior to the Ordinary General Meeting of Shareholders, the shareholders had the right to propose the nominee for the director. The information on this is informed through the websites of
the Stock Exchange of Thailand and AOT. The Nomination Committee examined whether the nominee was qualified and then submitted the name to the Board for approval before proposing it for consideration at the Shareholders’ Meeting. The Company requested the shareholders to elect each candidate for the director individually. 2) AOT will arrange the shareholders’ meeting following the agendas notified in the notice of shareholders’ meeting. The Company has no policy to add more agendas without informing shareholders in advance so that
the shareholders have sufficient time to study details and information pertinent to each item before making decisions. However, at the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008, major shareholders added an item during the meeting, proposing a nominee for the director position. Therefore, the Company was unable to notify the shareholders in advance. (3) The Company provides proxy forms for shareholders to encourage them to exercise their voting rights and propose a nominee for independent director. The shareholders are entitled to appoint an independent director as their representative, using the proxy form. (4) The Company encourages shareholders to use separate ballots for each agenda so they can cast their votes as deemed appropriate. During the meeting, the ballots for each agenda are collected and merged with the advance voting via proxy. The results of the vote counts and the resolutions are subsequently announced at the meeting. To ensure transparency, the ballots counted in the presence of volunteer shareholders who verify the results will be kept for future checks. (5) The minutes of the meeting shall be made accurately and completely and submitted to the Stock Exchange of Thailand and the Securities and Exchange Commission within 14 days from the meeting date. The company also broadcasts the shareholders’ meeting via Webcast on AOT’s website. (6) In compliance with the Securities and Exchange Act B.E. 2535, the directors, high-ranking executives as well as Vice President of Finance Department and Accounting Department must report their shareholdings of AOT stocks when they are first appointed to the position. They must also report on any buying, selling, or transferring of the stocks regardless of value to the Securities and Exchange Commission within 3 working days. (7) AOT has established measures to control the usage and prevent the misuse of internal information, especially information which may cause a major change in AOT’s stock price, as part of the Company’s corporate governance policy. They shall be disseminated and firmly adhered to by the Board of Directors and employees at all levels.
086 annual report 2008
7.4 The Role of Stakeholders AOT realizes the significance of the rights of stakeholders both internal and external, namely shareholders, customers, employees, the government, joint venture partners, business partners, creditors, society, and community. The Company has clearly defined the guidelines in its corporate governance policy which are disclosed on AOT’s website. The Company operates with respect to the rights of all stakeholders everywhere it carries out business. The Treatment of Stakeholders AOT is committed to promoting cooperation between the Company and the stakeholders to create financial stability and business sustainability as follows: Shareholders
AOT pledges to be a good representative of shareholders in conducting business transparently with emphasis on creating long-term economic value and good returns for shareholders. Employees
AOT regards employees as one of the key factors for AOT’s success. The company is committed to enhancing the capability of employees at all levels on an ongoing basis throughout the year. Moreover, the Company provides complaint channels for employees where there is a conflict between employees or between
an employee and his/her supervisor. The employee submitting a complaint according to the procedures set out by AOT in good faith shall be protected, and the complaint shall not cause dismissal or any disciplinary action on
the part of the complain or witnesses. Furthermore, the Management encourages employees at all levels to suggest ideas that are beneficial to the Company, for example, measures to reduce power consumption. The Company ensures good working environment as well as appropriate and fair remuneration for every employee equitably. Government
To be accountable for the government sector, AOT is committed to conducting business in full compliance with the laws and all applicable regulations of the overseeing agencies. The Company has provided constant support for the government projects to ensure maximum benefits for society as a whole and to retain good relationships with the government agencies. The Company deals with government agencies transparently and is ready to provide accurate and complete information to the government agencies upon request so as to ensure transparency and create mutual trust and confidence.
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Society, Community, and the Environment
AOT has dedicated units to oversee the Company’s social, community, and environmental affairs including
the Corporate Communications Office, the Special Affairs Department, and the Environmental Department. Over the years, AOT has carried out business with demonstrable commitment to contributing to society, community, and the environment. The Company has provided constant support to socially-beneficial activities in the areas of education, sports, culture, and career development for a better quality of life for people in the community. Additionally, the Company attaches significance to living in harmony with society and the communities where AOT operates. The Company strives to foster good relationships with the communities, collaborating in solving problems to create confidence in the communities and society as a whole. Details on the solutions to environmental problems can be found on AOT’s website. Business Partners
AOT was a policy to treat all business partners equitably based on fair and transparent competition to ensure maximum benefits for all concerned parties. The Company shall never prevent other companies from competing with AOT. Creditors
AOT shall strictly commit to and honor the obligations agreed with the creditors.
Channels for Reporting Improprieties and Safeguarding Whistleblowers
AOT pledges its relentless commitment to achieving business excellence, creating greater economic value and earning the trust and confidence of its shareholders. As part of its corporate governance policy, the Company provides a channel for employees and external parties to make complaints, disclose concerns, give suggestions, or report any misdeeds or improprieties of persons in the Company. AOT stresses the importance of maintaining the confidentiality of the details of the complaints. Disclosures of matters will be made only to the designated or involved persons to ensure protection for the complainants. The Company has established complaint filing and investigatory procedures in which a complaint can be made through the following channels: (1) E-mail at goodgovernance@airportthai.co.th (2) PO. Box 1001 Don Mueang, Bangkok 10210 (3) Suggestion Boxes at the Headquarters Office and the Offices at the 6 airports under AOT’s supervision. 7.5 Information Disclosure and Transparency Full disclosure of information is a vital part of good corporate governance principles. AOT attaches enormous significance to disclosing information to the Stock Exchange of Thailand and shareholders in accurate sufficient, timely, and equitable manners. The Office of Corporate Secretary and the Investor Relations Center are responsible for preparing information, responding to inquiries, and disclosing information to the Stock Exchange of Thailand.
088 annual report 2008
(1) AOT’s essential information consists of both financial and non-financial information. For 2008,
the Company’s financial statements were duly reviewed/audited by the auditor and deemed to be accurate in all material respects and in conformity with the generally-accepted accounting standards. They were approved by
the Audit Committee/the Board of Directors before disclosure to shareholders. The Board of Directors was required to report on the Board’s responsibilities along with the financial statements in the Company’s annual report. Moreover, the Company disclosed the unreviewed quarterly financial statement and the unaudited financial statements although they were not required by the Stock Exchange of Thailand. This was to ensure the shareholders and investors receive the financial information more promptly. No material discrepancies were found in the audited/reviewed financial statements. Other information including a report on the connected transactions, Management Discussion and Analysis (MD&A), risk management, and corporate governance policy were provided in both the Annual Report 2008 and
a Form 56-1. (2) All the information disclosed to the public as well as the shareholders and investors will be published on AOT’s website in both Thai and English. Examples include the annual report, Form 56-1, notice to shareholders, and minutes of the shareholders’ meetings. For the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008, the Company featured a live webcast of the Chairman of the meeting. To ensure easy, timely access to the useful information, AOT constantly updates its web pages and information. Throughout the year 2008, AOT arranged
a number of company visits, allowing the shareholders and securities analysts to observe its operations at
the Suvarnabhumi Airport and Chiang Mai International Airport with the objectives of creating confidence and better understanding about the operations of AOT on a first-hand basis. (3) AOT disclosed the role and responsibilities of the Board of Directors and special committees as well as their attendance record and the remuneration for the Directors as approved at the shareholders’ meeting and by the top executives in the annual report and Form 56-1. See details under no. 3.1-3.4, 5 and 6.2 (4) AOT established the Investor Relations Center responsible for communicating information that reflects
the true value of the Company to analysts, the shareholders and investors in conformity with the regulations of
the Stock Exchange of Thailand. The Center is also in charge of creating analyst and investor confidence along with fostering a good corporate image and favorable attitude of investors toward the Company. Added to this are
the coordination and provision of consultancy on investor relations affairs to AOT’s Management. Investors or interested persons can acquire information about AOT such as financial statements, annual reports, and news submitted to the Stock Exchange of Thailand from AOT’s IR officials through the following channels: - Telephone : 0 2535 5900 - Fax : 0 2535 5909 - E-mail : aotir@airportthai.co.th - Mail : 333 Cherdwutagard Road, Don Mueang, Bangkok 10210
089 annual report 2008
Realizing the importance of information disclosure in accurate, complete, timely, and transparent manners, AOT established the Investor Relations Center to communicate with the shareholders, investors, securities analysts and other involved agencies. Throughout the fiscal year 2007, the Center carried out a wide range of activities dedicated to publicizing and disseminating information of AOT to investors, shareholders and other involved persons. They can be summarized as follows: Fiscal Year 2007 - Overseas Roadshow 0 Time/Year - Analyst Briefing 2 Times/Year - Company Visit 240 Times/Year - Conference Call 22 Times/Year - Shareholders’ visit 1 Time/Year (5) AOT disclosed financial, non-financial and other material information accurately and completely in conformity with the regulations of the Stock Exchange Commission (SEC) and the Stock Exchange of Thailand. Furthermore, in 2007, AOT prepared Management Discussion and Analysis (MD&A) for every quarterly financial statement. (6) The Company prepared financial statements in accordance with generally accepted accounting standards. They were audited by independent auditors to ensure that all the information was accurate. (7) AOT, in cooperation with the Thai Investors Association and the Stock Exchange of Thailand, organized Company Visit, which allowed the shareholders, investors, and securities analysts to meet with the Company’s top executives to discuss the operations as well as the problems and solutions of AOT before visiting Suvarnabhumi Airport in order to create confidence among the shareholders, analysts and investors in AOT Business.
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Internal Control
AOT considers the internal control system vital. AOT, therefore, places the stress on internal control sufficient and appropriate to the business in accordance with the Regulations of the State Audit Commission on the subject of the Specification of Standards of Internal Control, B.E. 2544. These regulations require AOT to implement internal control, follow and assess compliance to the internal controls regularly in order to assure the efficiency of the system. Audit Office’s task is to audit and make sure that main operations and crucial financial activities of AOT are efficiently carried out according to the method specified. The Audit Office is also responsible in checking if laws and regulations relevant to AOT are carried out (Compliance Controls). Then Audit Committee is to re-examine that internal control of AOT is appropriate and effective.  AOT proposed internal control report to the Audit Committee through the Committee Secretary in order to evaluate the sufficiency and appropriateness of the internal control, to prevent and fix damage that may occur to AOT asset, as well as to find out methods and suggestions to reduce or eliminate risk factors. The internal control report has been approved by senior officers and presented to the President and AOT Board of Directors for acknowledgement. The Board of Directors has approved the internal control system as sufficient and appropriate.
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Connected Transactions AOT holds stakes in a number of companies including the Suvarnabhumi Airport Hotel Co., Ltd., Thai Airport Ground Services Co., Ltd., the Don Mueang International Airport Hotel Co., Ltd., Airport Duty Free Co., Ltd., Krua Kan Bin Phuket Co., Ltd., King Power Duty Free Co., Ltd., Airport Associate Co., Ltd., Bangkok Aviation Fuel Services Plc., and Thai Aviation Fuel Co., Ltd. The company also entered into contracts with the companies granted permission to carry out airport-related activities such as duty free shops at the warehouse, hotels, and aviation refueling service. In return, AOT receives financial benefits in the forms of profit sharing on minimum payment fixed by AOT (whichever is higher). Moreover, AOT leases spaces at the airports to a number of companies granted permission to conduct airport-related activities. Chief among them include: 1. Suvarnabhumi Airport Hotel Co., Ltd. 2. King Power Duty Free Co., Ltd. 3. Thai Airport Ground Services Co., Ltd. 4. Bangkok Aviation Fuel Services, Plc. 5. Thai Aviation Fuel Co., Ltd.
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Connected Transactions with Affiliated Companies or Joint Ventures Affiliated Company
Shareholding Percentage
1. Suvarnabhumi Airport Hotel Co., Ltd.
60
2. Thai Airport Ground Services Co., Ltd.
28.50
3. Don Mueang Internatioanl Airport Hotel Co., Ltd.
9
4. Krua Kan Bin Phuket Co., Ltd.
10
5. King Power Duty Free Co., Ltd. 6. Airport Associate Co., Ltd.
5 10
7. Thai Aviation Fuel Co., Ltd.
10
8. Bangkok Aviation Fuel Services Plc.
4.9
AOT Representative AOT Executive (Mrs. Kulya Pakakrong), serving as
the Company’s director and Acting Manager AOT Executive (Flying Officer Anirut Thanomkulbutra,
Mr. Suratas Suthammanas, and Flying Officer Passakorn Surapipit) serving as the Company’s directors. AOT Executive (Mr. Nirandra Theeranartsin), serving as
the Company’s director. AOT Executive (Flying Officer Anirut Thanomkubutra), serving as the Company’s director. - - AOT Executive (Mr. Serirat Prasutanond),
serving as the Company’s Chairman AOT Executive (Flight Lieutenant Viwat Smarnrug)
serving as the Company’s director. -
(As at September 30th, 2008)
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The Ongoing Development of AOT
Airport One Stop Service
One main practice of airports is offering aviation related services to public and private sectors as well as airlines, passengers and customers. AOT, as the operator of six international airports: Suvarnabhumi Airport, Don Mueang International Airport, Chiang Mai International Airport, Chiang Rai International Airport, Hat Yai International Airport and Phuket International Airport, urges every airport to put every effort into service and detail to impress those who work alongside the airports as well as the general public by emphasizing standards, safety, convenience and promptness. Airport One Stop Service has been set up with the objective to improve service efficiency by combining the services required by customers into a 24-hour one stop service. Airport One Stop Service is currently operating at two airports: Suvarnabhumi Airport and Chiang Mai International Airport. At Suvarnabhumi Airport, the “Suvarnabhumi Airport One Stop Service (SOS)” is located on the 4th floor, Departure Lounge, tel. 0 2132 9111-2. As for the one at Chiang Mai International Airport, it is located at Domestic Arrivals and called “Chiang Mai Airport One Stop Service Center”, tel. 0 5392 4444. Not only is the information service regarding operations and facilitations at “Suvarnabhumi Airport One Stop Service (SOS)” for reporting inconveniences, problems and other complaints as well as customers’ needs, it is also
the information center for the Standard Operation Procedure (SOP) of Suvarnabhumi Airport providing airlines and workers with information upon request. This center is also established to coordinate with sections within Suvarnabhumi Airport and other related sectors, to follow up the progress of operations, and to report results to customers for acknowledgement. This helps create good relations with airlines, the public sector and service providers, improving the overall management together with the services offered by Suvarnabhumi Airport.
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As regards service results, the Airline Operation Committee Bangkok (AOC) indicated that SOS has been a good effort on the part of AOT and that it could be made even more efficient since it can solve several problems. AOT’s executives realize the importance of the matter, and urge and observe improved operation results. Moreover,
the resources significant and necessary for operations are allocated such as staff, budget, parcels, durable articles, especially information technology equipment in order for management to achieve its set objectives. The responsible parties and staff are committed to provide customer satisfaction in Suvarnabhumi Airport by continually developing services. In so doing, AOT accentuates its commitment to giving the best quality to customers with the future aim of Thai airports being ranked on an international level in terms of service.
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annual report 2008
AOT Personnel Development
Constituting a significant resource, the personnel can drive an organization forward in successfully reaching its objectives. AOT, therefore, encourages its staff to improve their learning and training in all aspects in order to strengthen their ability to perform their tasks professionally according to international standards. In 2008, AOT emphasized personnel development by organizing training projects/programs and promoting postgraduate scholarships beneficial to AOT staff to perform their duties, in the meantime this is in compliance with the strategies of AOT Human Resource Development Plan. Major operating results are as follows:
1. Airport Principles Programs
These programs have provided airport knowledge to 482 employees; they are Airport Operation Program and Airport Management at basic, intermediate and advanced levels.
2. Professional Expertise Programs
These programs developed 3,231 professional experts out of all staff; for example, they are Safety Management System, Airport Safety, and Aviation Knowledge for Aviation Staff and Aerodrome Apron, etc.
3. General Knowledge Programs
This program improved general knowledge for 7,776 employees; for example: - Foreign Languages Training such as English, Korean, Chinese, Japanese, etc. - Special lectures such as global warming, effects of New Provident Fund Act, creating happy work and creating colourful life, creating tomorrow from today, etc. Overall personnel development according to AOT Human Resource Development Plan for fiscal year 2008 can be summarized as follows:
AOT In-house training (S.1) AOT In-house training (S.2) Training Abroad (S.3)
098 annual report 2008
Number of Training Projects (Projects) 212 505 38
Number of Participants (Persons) 10,226 1,161 102
Apart from AOT human resource development in compliance with AOT annual Human Resource Development Plan, AOT also committed to offer basic knowledge regarding firefighting and rescue to offices
in airports and to communities in the vicinity of Suvarnabhumi Airport. AOT emphasized knowledge about airport firefighting and rescue to these communities so that they would be prepared to help themselves in case of emergency in or around the airport. The lecturers were experts in firefighting and rescue from the Rescue and Firefighting Department, Suvarnabhumi Airport, which is registered as a Basic Fire Training Unit, Fire Drill and Evacuation Unit by the Department of Labour Protection and Welfare No. F.500903016. Three programs are provided: 1. Basic Firefighting Training Course 1 day, 3 hours theory and 3 ½ hours practice 2. Fire Drill and Evacuation Course 1 day, 3 hours theory and 3 ½ hours practice 3. Training and Revision of Firefighting for Crew 3 hours, 2 hours theory and 1 hour practice In the fiscal year 2008, AOT sent firefighting and rescue lecturers to several outside resources such as Technical Department and Catering of Thai Airways International Public Company Limited, Bangkok Airways, Air Asia Airlines, Bangkok Aviation Fuel Services Public Company Limited and District Cooling System and Power Plant Company Limited. AOT’s current personnel resource development not only aims at strengthening the ability of AOT staff in
the workplace, it is also a tool to create good relations between related parties and communities around the airport by providing the same standards of knowledge and practice. This can also be considered as another channel for
the organization to earn non-aeronautical revenue.
099 annual report 2008
Increase in the Efficiency of Security in Passenger Terminal at Suvarnabhumi Airport
AOT has launched a policy changing the passenger and baggage checking systems for departing passengers at Suvarnabhumi Airport from “gate screening” for departing domestic passengers and “concourse screening” for departing international passengers to centralized security screening. This is not only to strengthen the efficiency of security to meet the standards of leading airports but also to expand the sterile area within the passenger terminal and reduce any problems relating to the internal structure of the passenger terminal which are likely to violate security measures. Centralized security screening increases the efficiency of security and facilitates the checking process by establishing passenger and baggage checkpoints in the area behind check-in counters where X-ray machines and walk-through metal detectors are installed. Liquid, gel, spray or other similar materials and substances will also be checked. All checking is conducted within the same area before passing through the sterile area. Apart from the thorough check of passengers and baggage, every person who performs their work in the sterile area, whether it be AOT officers, airline staff, officers from related government sectors, or retail operators, and everything including carry-on baggage, every type of product to be sold in the sterile area as well as any sharp objects necessary in the sterile area must all be checked. The sharp objects must be registered and regularly checked. After passing the centralized security screening, sharp objects and dangerous items must not be sold and prohibited items must not be carried
on board. AOT has implemented centralized security screening since October 1st, 2008 for departing domestic passengers. As for departing international passengers and transit passengers, the system and
the specifications of the checkpoint area are currently under preparation. The system is set to be ready by the beginning of 2009 so that the security at Suvarnabhumi Airport can be at its highest efficiency for all concerned.
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Occupational Health, Safety and Working Environment Management
AOT has carried out activities regarding safety at work and acted in accordance with Safety at Work Law according to
the Labour Protection Act, B.E. 2541 and other related safety laws. In addition, AOT complies with the Cabinet resolution declaring the policy on “Occupational Health and Safety” as
part of the national agenda on December 11th, 2007 in order to promote safety in the workplace among AOT staff and workers in all departments, and to reduce labour, economic and social losses. AOT administration and management in relation to safety at work is systematic, complete and concordant with the law as well as other international standards. The Department of Labour Protection and Welfare, the Ministry of Labour launched the Outstanding Organization Contest regarding safety, occupational health and working environment at Thailand’s Safety at Work Fair to promote organizations to attain such attributes which meet international standards and comply with the law, in addition to publicly honour and praise employers’ and organizations’ safety, occupational health and working environment Committee, and occupational health and safety officers. AOT, therefore, chose the AOT Headquarters to enter Thailand’s Outstanding Organization Contest for the years 2007 and 2008, winning the award for two consecutive years. The awards received reflect the commitment of AOT’s Occupational Health and Safety Department to safety in the workplace through its emphasis on training, campaigning, public relations and safety examination. Moreover,
the staff and employees are encouraged to become safety-conscious, perform their tasks safely in accordance to
the law and regulations while also maintaining good health. This can be seen to be morale boosting among the staff and workers. Ongoing activities regarding safety in the workplace according to Safety Law ensure a safe and positive working environment without illness or disease caused by work. This also consolidates the organization’s image of safety organization as viewed externally. AOT will continue to maintain its status as one of the country’s outstanding organizations in order to prepare for the organization’s development in becoming a leading international institution and an example to other organizations.
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The Development Plan of Suvarnabhumi Airport Phase 2 (The Fiscal Year 2009-2014) Suvarnabhumi Airport is currently in the initial phase of development with the airport handling an estimated total of 45 million passengers per annum (33 million international passengers per annum and 12 million domestic passengers per annum). During the initial phase, it is also expected to have two runways accommodating 76 flights per hour, as well as 124 gates comprising 51 contact gates and 73 remote gates. After Suvarnabhumi Airport was opened for service on September 28th, 2006, the government released a policy requiring the entire volume of commercial air traffic be transferred from Bangkok International Airport to Suvarnabhumi Airport. Bangkok International Airport was renamed Don Mueang International Airport providing service for only non-scheduled flights, charter flights and general aviation. Since Suvarnabhumi Airport began its operations, the air traffic volume increased rapidly. The major factor behind this was the availability of the services provided by low cost carriers. For the year 2007, the total number of passengers reached 46 million per annum. This was beyond the designed capacity and caused air traffic congestion subsequently affecting the quality of service and the ability to become the aerotropolis of the region. In order to ease the congestion at the airport, the Cabinet passed a resolution on February 20th, 2007 approving the issue proposed by the Policy Committee for Operation of Suvarnabhumi Airport and Don Mueang International Airport. The content of the resolution was that domestic airlines with no international transit connections could choose, in the first stage, to use Don Mueang International Airport voluntarily, and that a feasibility study into using Don Mueang International Airport should be conducted in order to alleviate the congestion at Suvarnabhumi Airport. In response to the Cabinet resolution, AOT, in the first stage, initiated aviation services at Don Mueang International Airport provided by 3 domestic airlines, namely Thai Airways International, Nok Air and One-Two-Go Airlines. Although the 3 domestic airlines have been transferred to Don Mueang International Airport, the congestion has been alleviated among only a certain amount of domestic flights at Suvarnabhumi Airport. All scheduled international flights operating at Suvarnabhumi Airport are still suffering from congestion. The AOT Board of Directors, therefore, passed a resolution on December 1st, 2007 requiring AOT to expand
the airport’s capacity in order to handle this issue of air traffic volume urgently. Moreover, the airlines could operate more flights, both international and domestic, voluntarily at Don Mueang International Airport. This could be considered as making greater use of the country’s existing property.
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Recognizing the current situation, AOT designed the Development Plan of Suvarnabhumi Airport Phase 2 commencing from the fiscal year 2009 until 2014. The objectives are to expand the airport’s capacity to handle
60 million passengers per annum (52 million international passengers per annum and 8 million domestic passengers per annum) and to accommodate 90 to 95 flights per hour. This will enable the airport to cope with a certain number of passengers and air traffic volume until 2018. The Cabinet approved in principle the Development Plan of Suvarnabhumi Airport Phase 2 on April 29th, 2008. The major projects consist of construction of Satellite Building 1 and the third runway. AOT is required to propose these projects to the Ministry of Transport, other relevant sectors and the Cabinet for further consideration and approval. The Cabinet also approved in principle that AOT provide service for low cost carriers and volunteer operations of point-to-point international flights at Don Mueang International Airport. The Department of Civil Aviation was assigned to take the issues of obligations of international aviation into consideration for prudent operations. In addition, AOT is required to conduct an additional study on the development approach and the use of Don Mueang International Airport as regards related activities. The investment budget of the Development Plan of Suvarnabhumi Airport Phase 2 was estimated to be 77,885.777 million baht (including 10% contingency and 7% VAT). The Plan covers: 1. Compensation for noise pollution from Development Plan of Suvarnabhumi Airport Phase 2 2. Airfield Pavement - Construction of the third runway 3. Satellite Building 1 3.1 Design and construction of Satellite Building 1 3.2 Construction of aircraft contact stands at Satellite Building 1 3.3 Design and construction of southern linking tunnel 3.4 Design and installation of Automated People Mover (APM) system 4. Passenger Terminal Building 4.1 Design and construction of eastern passenger terminal building 4.2 Design and construction of airlines office building and eastern car park building (Car Park Building 1) 5. Utilities Work - Design and construction of utilities system 6. Hiring of Project Management Consultant group (PMC)
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The Use of Don Mueang International Airport
The Cabinet resolution on February 6th, 2007 approved the use of Don Mueang as another international airport together with Suvarnabhumi Airport. On February 20th, 2007, the Cabinet added another resolution stating that during the first stage, domestic airlines that do not operate international transit can choose to use Don Mueang International Airport voluntarily. On March 25th, 2007, 3 domestic scheduled airlines transferred their operations from Suvarnabhumi Airport to Don Mueang International Airport, namely Thai Airways, Nok Air and One-Two-Go Airlines. At present, AOT has opened International Passenger Terminal 1 and Domestic Passenger Terminal to provide aviation services in the areas of: 1. General Aviation 2. Commercial Aviation 3. Aviation Training 4. Non-scheduled Charter Flights 5. Domestic Scheduled and Non-scheduled Flights According to current situation, Suvarnabhumi Airport has handled a rapid expansion of escalating air traffic volume. Total number of passengers came to 46 million in 2007 and the airport has started to be so congested since then. As the Development Plan Phase 2 of Suvarnabhumi Airport is running behind schedule, the government has announced a policy stating that domestic airlines with no transit connections can use Don Mueang International Airport voluntarily. In addition, a feasibility study to use Don Mueang International Airport has been conducted in order to alleviate the air traffic congestion at Suvarnabhumi Airport. This policy of using Don Mueang International Airport to its fullest capacity in the future is reflected in the airport’s projects currently under consideration which are relevant to the aviation industry. The projects are listed below:
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1. The “Stimulator Training Center” Project requires the use of Building 4A (Formerly the Catering building of Thai Airways International), covering 2,258 square meters. Its parking lot covers 465 square meters. 2. The “Passenger Building for Private Aircrafts” Project takes up the VIP Building, housing 9 VIP rooms and covering 2,888 square meters in total. 3. The “Express Cargo Service and Airmail Parcels” Project requires Cargo Terminal 1, containing the storage space of 21,104 square meters and housing cargo of 211,040 tons per annum. 4. The “Perishables Center and Cool Cargo” Project requires Cargo Terminal 2, holding a storage space of 31,475 square meters and accommodating cargo of 314,750 tons per annum. 5. The “Aircraft Maintenance Center in Customs Free Zone” Project takes up Cargo Terminal 3 and 4 containing an adjoining space of 59,790 square meters.
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AOT’s Corporate Social Responsibility (CSR) AOT’s Commitment to Sustainable Communities by CSR
It has been 30 years since AOT became a state enterprise under the supervision of the Ministry of Transport and was listed as a public limited company on the Stock Exchange of Thailand. AOT is an organization operating 6 international airports, namely Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, Hat Yai and Chiang Rai. AOT is closely involved with Thai people who travel by air and, at the same time, continuously promotes the successive development of the country. The expansion of a large-size business generally brings prosperity as well as new problems to the society and surrounding communities. The business operation of each AOT airport is accountable to the expectations from society and neighborhood communities. AOT, therefore, is determined to solve any rising problems such as noise pollution resulting from the operation of Suvarnabhumi Airport along with being considerate of how to show responsibility to society and the environment. “Corporate Social Responsibility (CSR)” emanates from
Idea 1: Public Responsibility which emphasizes that AOT must be careful and pay every attention to outcomes arising from
the Company’s business operation both within the area of the airport and the surrounding area. This can be regarded as a social issue. Idea 2: Stakeholder Theory is the management of the organization’s stakeholders including customers, staff, shareholders, trading partners, competitors, government agencies and the communities where AOT’s airports are located. Lastly, Idea 3: Corporate Citizenship is the idea that the organization must act in
a humanitarian way in order to help facilitate the successive development of society. Such contributions should be made voluntarily in order to achieve the sustainable improvement of society.
AOT used these CSR viewpoints as a guideline to design CSR patterns, divided into 4 patterns. The first pattern is Cause-related Marketing whereby a part of operation income or profit to be contributed to charities. The second pattern is Corporate Philanthropy and the third is Volunteering. These patterns emphasize on a good relationship between the organization and stakeholders in society. This can be achieved through the participation of AOT executives, staff, and trading partners in social activities within the area. AOT also takes the quality development of the younger generations in terms of living conditions and mental health into consideration in order to establish
a good relationship with the communities around the airports. Furthermore, AOT is committed to encouraging
the youth to become good adults in the future. This is reflected in the support of the construction of 3 AOT Border Patrol Police Schools in Narathiwat, Mukdahan and Chiang Rai Provinces together with the provision of annual financial subsidies for the 3 schools for over 10 consecutive years. This is considered an integral part of AOT’s policy on the increased provision of educational opportunities to students in remote areas. AOT also provided playground equipment and outdoor exercise machines to 22 schools around Suvarnabhumi Airport that have been affected by the noise exposure caused by the airport’s operation. The fourth pattern is Social Responsibility Business Practice which is the development of the business operations of the organization in order to avoid negative impacts on society and environment or to minimize them as much as possible. For example, since AOT’s operations can cause environmental pollution, AOT has employed PC AIR and the 400 Hertz system to serve airlines in order to reduce pollution discharged from the combustion of aircraft fuel in the parking stands for over 10 years. AOT allows staff to be able to express their opinions concerning Corporate Social Responsibility (CSR) so they can be proud of the organization. It is also a part of sustainable development and growth. Moreover, it enables AOT
to gain trust from communities and society.
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Promotion of Border Patrol Police School
AOT supports the construction of three AOT Border Patrol Police Schools in Narathiwat Province, Mukdahan Province and Chiang Rai Province as well as granting annual subsidies of 150,000 Baht to each school for 10 consecutive years since the fiscal year 1999 until the present in order to help facilitate the schools’ operations. Every year the AOT Executives visit each school to follow up their operations and give educational tools to their students and instructors as well as organize regular recreational activities. The mentioned operation and activities comply with AOT’s policy towards the educational development of Thailand, especially in terms of the expansion of educational opportunities to remote areas. This is also a response to the royal idea of HRH Princess Maha Chakri Sirindhorn and a show of respect to the royal institution. AOT maintains three Border Patrol Police Schools as follows:
1. AOT Border Patrol Police School in Celebration of the Sixth-Cycle (72 years) Birthday Anniversary of His Majesty King Bhumibol Adulyadej on December 5th, 1999
The school is situated in Baan Ai-Jada, RueSor District, Narathiwat Province. HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on February 2nd, 2000. It is a primary school offering classes from Prathom 1 to 6. The construction budget is 4,000,000 Baht. In 2006, AOT gave financial support worth 2,530,000 Baht for the additional construction project of a building with six classrooms.
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2. AOT Border Patrol Police School to Commemorate the Centenary of Her Royal Highness Princess Srinagarindra
The school is located in Baan Taworn Pana, Tambon Koktoom, Dong Luang District, Mukdahan Province.
HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on September 26th, 2001. It is a primary school offering classes from Prathom 1 to 6. The construction budget is 4,000,000 Baht. HRH Princess Maha Chakri Sirindhorn paid a royal visit to the school and observed the royal project on February 1st, 2006.
3. AOT Border Patrol Police School in Celebration of the Fourth-Cycle (48 years) Birthday Anniversary of Her Royal Highness Princess Maha Chakri Sirindhorn on April 2nd, 2003
The school is situated in Baan Na-toh, Tambon Mae Salong Nai, Mae Fah Luang District, Chiang Rai Province. HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on March 25th, 2003. It is the first border patrol police secondary school of the country providing classes from Mathayom 1 to 3. The construction budget is 11,000,000 Baht. In 2004, AOT granted 1,100,000 Baht for the additional construction of a building with three classrooms. HRH Princess Maha Chakri Sirindhorn paid a royal visit to the school to see its progress in the royal project on March 1st, 2006 and February 18th, 2008.
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Support of United Nations
The United Nations World Food Programme (WFP) requested the use of the Thai airport as the UN’s Staging Area (UNSA) to deliver relief packages to the victims of Cyclone Nargis in Myanmar. Considering the issue of humanitarian and international cooperation, AOT allowed WFP to use Cargo Terminal 3 of Don Mueang International Airport as the UN’s Staging Area to deliver relief packages to Myanmar for 3 months from May 24th, 2008 until August 23rd, 2008 whereby AOT provided the ground service and Cargo Marketing International Company Limited (CMI) dealt with customs. AOT did not collect any rent for the use of the building. On May 24th, 2008, there was the inauguration ceremony of the UN’s flight to deliver the relief packages to the victims of Cyclone Nargis in Myanmar taking off from the UN’s Staging Area at Don Mueang International Airport. Present at the inauguration was the Secretary-General of United Nations Mr. Ban Ki-moon, the Prime Minister of Thailand Mr.Samak Sundaravej, ASEAN Secretary General Mr. Surin Pissuwan, the Minister of Foreign Affairs
Mr. Noppadol Patama, and AOT’s Senior Executive Vice President, Mrs. Kalaya Pakakrong, representing AOT.
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Community Relations
AOT puts special emphasis on activities which establish good relationship with surrounding communities at each AOT airport. AOT has always promoted, supported and crated educational, religious, cultural, youngish and environmental activities and projects useful to communities around these airports.
Suvarnabhumi Airport Community Relations
Since its official opening on September 28th, 2006, Suvarnabhumi Airport has promoted community relation activities as follows: Annually National Children Day to show that AOT realizes the importance of children who are growing to be essential strength of our country, educational support for childcare centers in the communities, “Imparting Knowledge to the Communities, Creating Good Relation with Suvarnabhumi” project which provided 40 bookshelves to organize books in different categories, Suvarnabhumi Airport also supports local traditional ceremonies regardless of ethnicity and religion, for example, the “Yon Bua” (Lotus Throwing) tradition and Albazrah, an Islamic tradition. Assistance in case of emergency is always provided.
Don Mueang International Airport Community Relations
Don Mueang International Airport, operating chartered international flights and some domestic flights, is committed
to contribute continually to the surrounding community.
The followings are some examples: Financial support to improve and repair traffic light control system at Don Mueang Police Station Junction, to facilitate the traffic police in performing their tasks within the community, Providing raincoats to
the Prevention and Suppression Division of Don Mueang Police Station to be worn during the raining season, Children’s Day activities are organized every year, AOT also participates in surrounding community activities regularly, such as those activities with temples and schools, etc.
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Phuket International Airport Community Relations
Phuket International Airport realizes the importance of children and youth who are going to be an essential strength of our country in the future; therefore, the National Children’s Day activities are organized every year in order to entertain, educate and gain more skills these children and younger generations. Another major activity of Phuket International Airport is the provision of services for passengers going to and returning from the Haj pilgrimage in Mecca, Saudi Arabia. Each year, a great number of passengers participate in this event. Phuket International Airport, therefore, needs to ask for cooperation from several sectors and coordinates with the surrounding community around the airport in order to operate successfully.
Chiang Mai International Airport Community Relations
In order to proudly become a golden gateway to Lanna, Chiang Mai International Airport realizes
the significance of promoting good relations with its surrounding community. The followings are some examples:
The annual ceremony of presenting yellow robes to the Buddhist monks at the end of the Buddhist Lent is one of
the main activities jointly organized by Chiang Mai International Airport and the surrounding community.
The ceremony is held at different temples each year and is regarded as helping preserve Buddhism and promoting
a good relationship between Chiang Mai International Airport staff and local people. Chiang Mai International Airport also organizes and supports activities held by the surrounding community, such as Children’s Day activities, offering Buddhist Lent candles, granting scholarship and educational equipment to students, dredging up water-distribution ditches and canals, etc.
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Hat Yai International Airport Community Relations
Community relation is one of the major obligations of Hat Yai International Airport. Last year, the airport organized several activities such as a marathon walk to mark the King’s 80th Birthday Anniversary on December 5th, 2007 as part of the project called “AOT Ruam Jai Pak Rak Nai Luang” (Loving the King in Unity). The airport has always facilitated passengers participating in the Haj ceremony in Mecca, Saudi Arabia. Other activities include Children’s Day activities, providing lunch for children with intellectual disabilities living in Baan Songkhla, and financial subsidies for schools, etc.
Chiang Rai International Airport Community Relations
Chiang Rai International Airport organizes annual community relation activities regarding education, religions, culture, sports, etc. Chiang Rai International Airport organizes Children’s Day activities every year, allows educational institutes to visit the airport to gain more knowledge about aviation, encourages airport staff and those who live in the surrounding community to exercise for their own good. Furthermore, blood donation activity is held within
the airport on important occasions, such as King Bhumipol Adulyadej’s Birthday and HRH Queen Sirikit’s Birthday, etc. The airport also provides assistance to society in case of emergency.
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Environment Operation
AOT always operates its airports with concern towards environment and realizes the importance of preservation, solution and reduction of impacts on the environment and communities around the airports. Six airports employ good Environmental Management System such as efficient wastewater treatment, waste treatment as specified according to the sanitation conditions, particularly at Suvarnabhumi Airport where water supply system and water pumping system are certified with ISOs 14001, 18001, and 9001. In addition, drinking water at Suvarnabhumi Airport is guaranteed to be drinkable by the Metropolitan Waterworks Authority on June 14th, 2007. Each airport operates in compliance with measures for prevention, solution and reduction of impacts on the environment and measures for the complete monitoring and examination of environmental quality, resulting in Chiang Rai International Airport receiving the EIA Monitoring Award for the years 2006 and 2007 from the Ministry of Natural Resources and Environment. As for those houses, religious sites, schools or hospitals who suffer from noise impact as a result of Suvarnabhumi Airport operation, AOT has given compensation according to the measures clearly specified in the study of the environmental impacts of the additional Suvarnabhumi Airport Project (due to the increase in the number of passengers in the first year of operation) approved by the National Environment Board on March 10th, 2005 and according to the Cabinet resolution on May 29th, 2007. A summary of the progress on the operations up until
September 30th, 2008 is presented below:
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1. In the affected zone NEF 40, there are 503 buildings constructed before 2001 and 153 landlords in the area want to sell their lands and buildings. AOT has already estimated the price of 54 plots of land and buildings.
16 buildings were sold out and transferred the ownership. As for the other 99 buildings, AOT will give price estimates according to the guidelines for compensation of the owners of expropriated real estate according to the Act on
the Expropriation of Immovable Property, B.E. 2530. Regarding 342 property owners who wish to have them renovated, AOT has already granted compensation to 231 owners. AOT is currently contacting 8 property owners who have not declared their intentions regarding compensation.
2. In the affected zone NEF 30-40, there are 8,966 buildings constructed before 2001. AOT will support renovation of buildings by inspecting noise level in each problem building. In case the result turned out that Suvarnabhumi Airport did produce over ten decibels (A), AOT will surely offer financial assistance to assist
the building owners to renovate their buildings using renovation criteria to reduce sound impact which stated in
a study conducted by the National Institute of Development Administration (NIDA). In the fiscal year 2008, AOT has carried out inspections of noise levels inside the buildings and estimated the renovation costs for approximately 1,000 buildings where the noise level is over 10 decibels (A). As regards the rest of the buildings, inspections will be performed in the next fiscal year. 3. AOT provided a renovation budget of 190.5 million Baht for locations sensitive to noise exposure. These locations comprise 11 schools, hospitals and religious sites.
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Financial Statements
Report of the AOT Board of Director’s Responsibility for Financial Reports The AOT Board of Directors Responsible for the AOT’s Financial Statement, whose accounting method meets
the standard requirement generally accepted in Thailand. The Board has chosen the most appropriate accounting policy to which they consistently conform. With regard to information disclosure, the Board has revealed sufficient vital information attached with the remarks of the AOT Financial Statement. To ensure accuracy, completeness and timeliness of the AOT Financial Statement and Internal Audit and to prevent potential misconduct and error, AOT has nominated an Audit Committee consisting of independent members to supervise and evaluate the internal control system for efficiency. The opinion of the Audit Committee is included in the Audit Committee Report which is attached with the AOT Annual Report. The AOT Board of Directors is unanimous in its opinion that AOT’s Internal Control System can foster confidence that the AOT Financial Statement has demonstrated accurate financial status, significant operational performance and positive cash flow of the company.
(Signed) Vudhibhandhu Vichairatana
(Vudhibhandhu Vichairatana) Chairman
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
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Audit Committee’s Report For Fiscal Year 2008 The Audit Committee of Airport of Thailand Public Company Limited (AOT) was appointed by the AOT Board of Directors at the Ordinary General Shareholders’ Meeting 6/2008 on 10th April, 2008. The Committee consists of
the following members: Mr. Thaworn Phanichaphan Chairman Mr. Pongsak Semson Member Mr. Arkhom Termpittayapaisith Member Mr. Apichart Sayasit Member Mr. Kamol Daengpun, Vice President, Audit Office Secretary During the fiscal year 2008 (October 2007 - September 2008), the Audit Committee convened 9 meetings to function as the efficient mechanism of the Board of Directors in overseeing good corporate governance, risk management, as well as internal control and internal audit. This ensured AOT Management could efficiently manage and oversee the operations of AOT to achieve its goals. In the past year, the Audit Committee together with AOT’s finance and accounting executives and auditor from the Office of Auditor-General examined AOT’s financial statements. The auditor found that AOT’s financial statements were properly prepared in compliance with accepted accounting standards and with adequate disclosure of
the financial information and connected transactions in an accurate and complete manner. The financial statements were prepared and submitted to the Stock Exchange of Thailand within the deadline set. The Audit Committee reviewed the internal control system for AOT’s finance and operations and gave suggestions to the Board and Management on the improvement of AOT’s risk management and internal control, bringing them to acceptable levels. Moreover, the Audit Committee made recommendations on the progress report on setting up internal control system in conformance with the Auditor General Regulations on Internal Control Standards B.E. 2544. In performing their duties, the Audit Committee made use of the AOT Audit Office report on internal audit as a major tool in providing suggestions and improving the operations of AOT. The Audit Committee performed their duties with prudence, independence, transparency, and verification in line with the principles of good corporate governance. Based on the review and examination of various matters over 2008, the Audit Committee was of the view that AOT’s procedures for preparing financial statements, the internal control report, risk management, and internal audit were efficient and appropriate in compliance with the criteria and guidelines of the State Enterprise Audit Committee stipulated by the Ministry of Finance. In addition, AOT strictly adhered to the relevant laws, regulations, the Cabinet’s resolutions, and policies set forth by the AOT Board of Directors. (Signed) Thaworn Phanichaphan (Thaworn Phanichaphan) Chairman of the Audit Committee 29 October 2008
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AUDITOR’S REPORT TO: THE SHAREHOLDERS OF THE AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED The Office of the Auditor General of Thailand has audited the accompanying consolidated and the Company’s balance sheets as at September 30, 2008 and 2007, and the related consolidated and the Company’s statements of income, changes in shareholders’ equity, and cash flows for the years then ended of the Airports of Thailand Public Company Limited and its subsidiaries and of the Airports of Thailand Public Company Limited, respectively. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. The responsibility of the Office of the Auditor General of Thailand is to express an opinion on these financial statements based on the audits. The Office of the Auditor General of Thailand conducted the audits in accordance with generally accepted auditing standards. Those standards require that the Office of the Auditor General of Thailand 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 statements presentation. The Office of the Auditor General of Thailand believes that the audits provide a reasonable basis for the opinion. In the opinion of the Office of the Auditor General of Thailand, the consolidated and the Company’s financial statements referred to above present fairly, in all material respects, the financial position as at September 30, 2008 and 2007, and the results of operations, the changes in shareholders’ equity, and the cash flows for the years then ended of the Airports of Thailand Public Company Limited and its subsidiaries and of the Airports of Thailand Public Company Limited, respectively, in accordance with generally accepted accounting principles. Without qualifying opinion, the Office of the Auditor General of Thailand draws attention to the following matters: 1. Note to the financial statements No. 4.1, the Company has changed the accounting policy for investments in subsidiaries and associates presented in the company’s financial statements from the equity method to the cost method in accordance with the Thai Accounting Standard No. 44 (revised 2007). 2. Note to the financial statements No. 6.31.2, Dispute with private companies. (Signed) Jaruvan Maintaka (Khunying Jaruvan Maintaka) Auditor General
Office of the Auditor General November 21, 2008
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(Signed) Dawan Wongphayak (Dawan Wongphayak) Senior Audit Specialist Level 9
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Assets Current assets Cash and cash equivalents 6.1 8,437,365,623.51 10,231,387,965.24 8,338,266,634.60 10,208,038,131.42 Current investments 6.2 11,557,828,924.58 4,503,250,658.11 11,557,828,924.58 4,503,250,658.11 Trade accounts receivable - net 6.3 1,654,325,763.81 1,789,511,118.90 1,582,781,489.87 1,720,916,200.99 Other receivables 6.4 1,269,139,769.25 1,271,179,754.84 1,255,384,381.92 1,263,010,384.13 Inventories and supplies - net 6.5 209,706,665.33 130,979,381.95 201,740,621.84 122,950,562.76 Accrued income 1,367,353,328.17 989,891,553.77 1,374,666,257.50 1,013,055,710.77 Other current assets 6.6 190,399,417.96 226,295,352.50 175,833,767.76 213,621,854.81 Total current assets 24,686,119,492.61 19,142,495,785.31 24,486,502,078.07 19,044,843,502.99 Non - current assets Investments in Subsidiaries and 6.7 191,740,321.88 174,653,058.38 39,789,293,000.00 39,789,293,000.00 Associates Other long - term investments 6.8 989,758,437.98 379,710,000.00 989,758,437.98 379,710,000.00 Property, plant and equipment - net 6.10 108,182,166,353.72 111,805,660,295.60 105,995,565,167.80 109,398,661,834.03 Assets under construction 6.11 6,154,117,881.81 5,855,330,700.22 6,154,117,881.81 5,855,330,700.22 Intangible assets 6.12 1,029,199,964.25 1,045,450,652.88 1,029,199,964.25 1,045,450,652.88 Other non - current assets 6.13 5,222,870,555.28 5,063,684,401.25 5,222,870,555.28 5,063,684,401.25 Total non - current assets 121,769,853,514.92 124,324,489,108.33 159,180,805,007.12 161,532,130,588.38 Total assets 146,455,973,007.53 143,466,984,893.64 183,667,307,085.19 180,576,974,091.37
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
Notes
2007
(Adjusted)
2007
(Adjusted)
Liabilities and shareholders’ equity Current liabilities Trade accounts payables 505,069,868.31 924,055,458.52 339,166,054.60 788,151,810.72 Work in process payables 108,098,250.14 1,229,233,331.48 108,098,250.14 1,229,233,331.48 Corporate income tax payable 339,782,446.97 624,190,821.57 339,782,446.97 624,190,821.57 Accrued expenses 2,709,446,981.87 2,987,646,211.43 2,773,925,424.65 3,034,849,686.02 Current portion of long - term loans 6.16 1,861,573,394.89 1,418,392,233.29 1,713,173,394.89 1,307,092,233.29 Promissory notes 6.14 - 10,000,000.00 38,483,807,107.71 38,483,807,107.71 Refundable and guarantee deposits 182,244,749.68 175,048,679.63 182,239,216.68 175,043,146.63 Other current liabilities 6.15 4,682,376,761.49 3,629,822,651.51 4,665,799,674.95 3,609,462,008.69 Total current liabilities 10,388,592,453.35 10,998,389,387.43 48,605,991,570.59 49,251,830,146.11 Non - current liabilities Long - term loans 6.16 58,564,516,506.32 52,840,027,292.30 57,193,456,506.32 51,421,327,292.30 AAT staff pension fund 6.17 38,941,079.00 45,007,712.48 38,941,079.00 45,007,712.48 Advance received from concession - 4,460,000,000.00 - 4,460,000,000.00 revenue Other non - current liabilities 6.18 1,155,528,960.03 5,446,328,880.53 1,153,144,231.06 5,428,609,747.59 Total non - current liabilities 59,758,986,545.35 62,791,363,885.31 58,385,541,816.38 61,354,944,752.37 Total liabilities 70,147,578,998.70 73,789,753,272.74 106,991,533,386.97 110,606,774,898.48
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Shareholders’ equity Share capital 6.19 Authorized share capital 1,428,570,000 ordinary shares of Baht 10 each 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 Issued and fully paid - up 1,428,570,000 ordinary shares of Baht 10 each 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 Premium on common stocks 12,567,669,242.63 12,567,669,242.63 12,567,669,242.63 12,567,669,242.63 Unrealized gain on change in 169,260,000.00 251,160,000.00 169,260,000.00 251,160,000.00 value of investment Retained earnings Appropriated - Legal reserve 1,428,570,000.00 1,428,570,000.00 1,428,570,000.00 1,428,570,000.00 Unappropriated 47,599,934,819.22 40,850,307,728.53 48,224,574,455.59 41,437,099,950.26 Total parent shareholders’ equity 76,051,134,061.85 69,383,406,971.16 76,675,773,698.22 69,970,199,192.89 Minority interest 257,259,946.98 293,824,649.74 - - Total shareholders’ equity 76,308,394,008.83 69,677,231,620.90 76,675,773,698.22 69,970,199,192.89 Total liabilities and shareholders’ equity 146,455,973,007.53 143,466,984,893.64 183,667,307,085.19 180,576,974,091.37
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF INCOME FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Operating revenues Landing and parking charges 4,216,347,087.06 3,937,398,190.24 4,216,347,087.06 3,937,398,190.24 Passenger service charges 10,417,014,355.44 8,781,477,837.24 10,417,014,355.44 8,781,477,837.24 Aircraft service charges 431,753,772.00 427,099,436.29 431,753,772.00 427,099,436.29 Office and state property rents 1,480,644,986.59 1,524,609,856.42 1,503,324,986.59 1,547,289,856.42 Service revenues 3,164,293,042.18 2,818,541,249.62 2,445,224,332.21 2,175,992,917.24 Concession revenues 2,300,812,726.57 2,012,283,931.37 2,315,855,925.67 2,025,900,262.19 Total operating revenues 22,010,865,969.84 19,501,410,501.18 21,329,520,458.97 18,895,158,499.62 Operating expenses Personnel expenses 3,909,003,249.71 2,927,842,273.10 3,904,204,764.43 2,924,344,143.71 Operating expenses 5,100,310,429.64 5,730,128,875.22 4,650,568,876.43 5,323,710,883.58 Repair and maintenance 683,958,088.13 732,378,685.46 683,958,088.13 732,378,685.46 State property rental 6.22 955,728,995.98 846,318,824.62 955,728,995.98 846,318,824.62 Depreciation and amortization 7,866,887,359.25 7,768,007,172.49 7,642,077,350.08 7,552,525,786.23 Total operating expenses 18,515,888,122.71 18,004,675,830.89 17,836,538,075.05 17,379,278,323.60 Operating income 3,494,977,847.13 1,496,734,670.29 3,492,982,383.92 1,515,880,176.02 Other incomes Law Compensation Revenues 6.25 8,331,532,705.39 - 8,331,532,705.39 - Interest income 566,650,671.58 693,302,924.11 564,437,627.49 692,633,882.99 Gain on sales of assets 5,898,714.25 1,293,714.83 5,898,714.25 1,293,714.83 Other income 262,475,207.16 291,145,659.45 262,472,785.49 286,717,225.12 Total other incomes 9,166,557,298.38 985,742,298.39 9,164,341,832.62 980,644,822.94
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF INCOME FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Other expenses Loss (gain) on foreign exchange 6.26 928,721,631.36 (2,804,543,423.41) 928,721,631.36 (2,804,543,423.41) Other expenses 425,408,676.18 67,308,497.86 425,408,676.18 67,308,497.86 Other expenses 1,354,130,307.54 (2,737,234,925.55) 1,354,130,307.54 (2,737,234,925.55) Share of profit (loss) from - - investments under equity method 17,087,263.50 (48,092,932.74) Profit before interest and income tax expenses 11,324,492,101.47 5,171,618,961.49 11,303,193,909.00 5,233,759,924.51 Interest expenses 2,569,798,136.56 2,397,166,007.14 2,474,087,826.69 2,316,045,622.44 Income tax expenses 1,470,205,064.18 1,722,755,472.46 1,470,205,064.18 1,722,755,472.46 Net profit before minority interest 7,284,488,900.73 1,051,697,481.89 7,358,901,018.13 1,194,958,829.61 Net loss of minority interest 36,564,702.76 38,061,365.99 - - Net profit 7,321,053,603.49 1,089,758,847.88 7,358,901,018.13 1,194,958,829.61 Basic earnings per share 5.12 0.76 5.15 0.84
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
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Unit : Baht
Consolidated
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
Issued and fully Unrealized gain on paid - up Premium on change in value Retained share capital common stocks of investment Legal reserve earnings Minority interest Total Notes Balance as at October 1, 2006 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,332,825,975.36 332,453,412.20 71,163,518,630.19 Effect of change in accounting 4.2 - - - - (851,094.71) (567,396.47) (1,418,491.18) policy : subsidiary Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,331,974,880.65 331,886,015.73 71,162,100,139.01 Unrealized gain on change in value - - 34,860,000.00 - - - 34,860,000.00 of investment Net profit - - - - 1,089,758,847.88 - 1,089,758,847.88 Dividend - - - - (2,571,426,000.00) - (2,571,426,000.00) - - - - - (38,061,365.99) (38,061,365.99) Minority interest Balance as at September 30, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,850,307,728.53 293,824,649.74 69,677,231,620.90 Balance as at October 1, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,856,265,393.15 297,796,426.14 69,687,161,061.92 Effect of change in accounting 4.2 - - - - (5,957,664.62) (3,971,776.40) (9,929,441.02) policy : subsidiary Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,850,307,728.53 293,824,649.74 69,677,231,620.90 Unrealized gain on change in value - - (81,900,000.00) - - - (81,900,000.00) of investment Net profit - - - - 7,321,053,603.49 - 7,321,053,603.49 Dividend 6.21 - - - - (571,426,512.80) - (571,426,512.80) Minority interest - - - - - (36,564,702.76) (36,564,702.76) Balance as at September 30, 2008 14,285,700,000.00 12,567,669,242.63 169,260,000.00 1,428,570,000.00 47,599,934,819.22 257,259,946.98 76,308,394,008.83
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
annual report 2008
129
Unit : Baht
The Company
The accompanying notes are an integral part of these financial statements. (Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
Issued and fully Unrealized gain on paid - up Premium on change in value Retained Notes Legal reserve Total share capital common stocks of investment earnings Balance as at October 1, 2006 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,332,825,975.36 70,831,065,217.99 Effect of the change of investment policy 4.1 - - - - 480,741,145.29 480,741,145.29 Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,813,567,120.65 71,311,806,363.28 Unrealized gain on change in value of investment - - 34,860,000.00 - - 34,860,000.00 Net profit - - - - 1,194,958,829.61 1,194,958,829.61 - - - - (2,571,426,000.00) (2,571,426,000.00) Dividend Balance as at September 30, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 41,437,099,950.26 69,970,199,192.89 Balance as at October 1, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,856,265,393.15 69,389,364,635.78 Effect of the change of investment policy 4.1 - - - - 580,834,557.11 580,834,557.11 Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 41,437,099,950.26 69,970,199,192.89 Unrealized gain on change in value of investment - - (81,900,000.00) - - (81,900,000.00) Net profit - - - - 7,358,901,018.13 7,358,901,018.13 Dividend 6.21 - - - - (571,426,512.80) (571,426,512.80) Balance as at September 30, 2008 14,285,700,000.00 12,567,669,242.63 169,260,000.00 1,428,570,000.00 48,224,574,455.59 76,675,773,698.22
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Cash flows from operating activities Net profit 7,321,053,603.49 1,089,758,847.88 7,358,901,018.13 1,194,958,829.61 Adjustment to reconcile net profit to net cash provided by (paid from) operating activities : Doubtful account (42,357,111.64) 255,152,860.76 (43,963,774.64) 255,005,221.76 Allowance for damaged and obsolete supplies (22,392,913.86) 4,142,265.99 (22,392,913.86) 4,142,265.99 Depreciation and amortization 7,866,887,359.25 7,768,007,172.49 7,642,077,350.08 7,552,525,786.23 Loss (gain) on foreign exchange 1,048,525,912.12 (2,523,217,361.02) 1,048,525,912.12 (2,523,217,361.02) Gain on disposal property, plant and (5,203,514.43) (939,135.38) (5,203,514.43) (939,135.38) equipment Share of (profit) loss from investments (17,087,263.50) 48,092,932.74 - - under equity method Deferred (income) expense (4,458,233,333.35) 9,971,942.15 (4,458,233,333.35) 9,971,942.15 Provision for contigent liabilties 425,330,761.18 30,219,374.00 425,330,761.18 30,219,374.00 Dividend income (29,413,700.00) (24,602,000.00) (29,413,700.00) (24,602,000.00) Net loss of minority interest (36,564,702.76) (38,061,365.99) - - Operating profit before changes in operating assets and liabilities 12,050,545,096.50 6,618,525,533.62 11,915,627,805.23 6,498,064,923.34
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Decrease (increase) in operating assets Trade account receivables 177,542,466.73 (1,290,997,186.03) 182,098,485.76 (1,230,605,778.07) Other receivables (77,565,298.53) 188,201,367.11 (71,904,281.91) 159,224,174.93 Supplies (56,334,369.52) (55,561,175.65) (56,397,145.22) (52,598,615.65) Accrued income (377,461,774.40) (815,626,520.40) (361,610,546.73) (830,325,612.87) Other current assets 35,895,934.54 150,671.76 37,788,087.05 (199,434.15) Increase (decrease) in operating liabilities Trade account payables (395,193,501.61) 737,180,954.64 (425,193,667.52) 679,831,823.62 Corporate income tax payable (284,408,374.60) 70,522,046.93 (284,408,374.60) 70,522,046.93 Accrued expenses (277,492,029.74) 765,378,577.58 (260,292,061.55) 709,752,410.58 Refundable and guaranteed deposits 7,196,070.05 27,136,794.58 7,196,070.05 27,459,078.58 AAT staff pension fund (6,066,633.48) (362,321.75) (6,066,633.48) (362,321.75) Other current liabilities 1,041,292,470.89 (938,941,022.10) 1,045,076,027.17 (957,767,753.12) Net cash from operating activities 11,837,950,056.83 5,305,607,720.29 11,721,913,764.25 5,072,994,942.37
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Cash flows from investing activities Increase in current investments (7,054,578,266.47) (3,282,336,753.10) (7,054,578,266.47) (3,282,336,753.10) Cash received from sale of assets 5,246,634.09 964,212.53 5,246,634.09 964,212.53 Dividend received from investments 29,413,700.00 24,602,000.00 29,413,700.00 24,602,000.00 Invested in property, plant and (5,666,365,718.58) (7,473,282,306.63) (5,661,952,985.06) (7,269,968,798.33) equipment and work in progress Invested in intangible assets (100,183,630.73) (183,956,335.63) (100,183,630.73) (183,956,335.63) Increase in long - term investments (691,948,437.98) - (691,948,437.98) - Increase in other non - current assets (1,541,590,304.16) (1,341,027,631.06) (1,541,590,304.16) (1,342,402,964.42) Increase in other non - current liabilities 1,279,041,039.70 556,539,704.27 1,294,375,443.67 772,025,314.96 Net cash used in investing activities (13,740,964,984.13) (11,698,497,109.62) (13,721,217,846.64) (11,281,073,323.99) Cash flows from financing activities Cash paid from bank overdrafts (10,000,000.00) (28,978,147.16) - - Cash paid for repayment of long - term loan (1,565,884,650.65) (1,087,942,662.42) (1,454,584,650.65) (1,087,942,662.42) Increase in long - term loan 2,256,303,749.02 1,910,099,910.31 2,155,543,749.02 1,680,099,910.31 Dividend payment (571,426,512.80) (3,928,567,500.00) (571,426,512.80) (3,928,567,500.00) Net cash from (used in) financing activities 108,992,585.57 (3,135,388,399.27) 129,532,585.57 (3,336,410,252.11)
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Net decrease in cash and cash equivalents (1,794,022,341.73) (9,528,277,788.60) (1,869,771,496.82) (9,544,488,633.73) Cash and cash equivalents at the 10,231,387,965.24 19,759,665,753.84 10,208,038,131.42 19,752,526,765.15 beginning of the periods Cash and cash equivalents at the end of the periods 8,437,365,623.51 10,231,387,965.24 8,338,266,634.60 10,208,038,131.42 Supplementary cash flows information Cash paid during the periods Interest expenses 2,694,945,424.74 2,231,486,459.06 2,599,235,114.87 2,150,366,074.36 Corporate Income tax 1,754,602,653.89 1,771,929,737.83 1,754,407,927.71 1,771,781,887.50
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
1. General Information
The Airports of Thailand Public Company Limited (AOT), which was registered as a public limited company on September 30, 2002 and whose head office is located at No. 333, Cherdwutagard Road, Don Mueang, Bangkok 10210, performs and promotes the business operation of international airports as well as related businesses.
At present, the Company operates six international airports: Suvarnabhumi Airport, Don Mueang Airport, and four Regional International Airports (Chiang Mai, Hat Yai, Phuket and Chiang Rai). As at September 30, 2008, there were 4,057 staff and employees in AOT.
2. Basis for the Presentation of Financial Statements
The financial statements of the AOT comprise its consolidated financial statements and the company financial statements. 2.1 The consolidated financial statements present financial position and results of AOT and its subsidiaries’ operations. The subsidiaries are New Bangkok International Airport Co., Ltd.-under liquidation (NBIA) and Suvarnabhumi Airport Hotel (SAH). AOT holds 100% and 60% of shares, respectively. 2.2 The company financial statements present the financial position and results of operations of Suvarnabhumi Airport which was transferred from NBIA since January 1, 2006, Don Mueang Airport, 4 Regional International Airports, and the Airports Authority of Thailand Pension Fund. Material intercompany related transactions and balances have been eliminated.
3. Summary of Significant Accounting Policies
These financial statements have been prepared in conformity with the Accounting Professions Act , B.E. 2547 (2004) The significant accounting policies are: 3.1 Revenue recognition 3.1.1 Landing and parking charges, passenger service charges, use of utilities charges, and service charges are recognized as revenues in the accounting period in which services are provided. 3.1.2 Rent for offices and real estate properties, and concession revenues are recognized as revenues according to the period of time and commission rates specified in the contract. 3.1.3 Revenues from hotel business and restaurant are recognized as revenues in accordance with the price in invoice (excluding VAT) for goods and services after discount and added service charges. 3.1.4 Interest income is recognized according to the period of time to which it applies, taking into account the actual rate of return. 3.1.5 Dividends are recognized when the dividend payment is announced. 3.1.6 Expenses are recorded by accrual basis.
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3.2 Allowance for doubtful accounts Allowance for doubtful accounts is set up by considering the estimated losses expected to be incurred as a result of non-payment by accounts receivable, based on past collection experience and the current status of accounts receivable as of the balance sheet date. Bad debts are written off as they are identified during the year. 3.3 Inventories and supplies Inventories are stated at cost or net realizable value whichever is lower. The cost of inventories is calculated by weighted average method. Inventories cost is comprised of purchasing cost and other direct expenses related to that purchasing. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of that sale. Supplies are recorded at weighted average cost. For those with no movement for over 5 years, provision for obsolescence is made at a full amount. 3.4 Investments 3.4.1 Long-term investment Investments in non-marketable equity securities are recognized as general investments and stated at cost adjusted for impairment. 3.4.2 Investment in equity securities Investments in marketable equity securities available for sale are stated at fair value. Unrealized gains or losses on changes in valuation are shown as separate items under shareholders equity. 3.4.3 Investments in subsidiaries and associates are recorded according to the equity method and presented in the company’s financial statements by cost method. 3.5 Property, plant and equipment Property, plant and equipment are recorded at cost as of the date of acquisition or at the completion date. All AOT buildings are constructed on state properties leased from the Treasury Department, Ministry of Finance. According to the regulations of the Ministry of Finance and the Royal Thai Air Force, all constructions become
the property of the Ministry of Finance upon completion. However, the AOT records such properties as assets since the AOT accepts all risks and benefits of such properties, and pays compensation for the use of state properties to
the Treasury Department. After AOT was converted to a limited public company, the Ministry of Finance and
the Royal Thai Air Force issued a new regulation. Moreover, the Ministry of Finance and the Department of Commercial Aviation issued 2 new regulations. These new regulations came into effect on September 30, 2002. Clause 8 of three new regulations stated that the ownership of the buildings and constructions will belong to
the Ministry of Finance when the contract to use the state property land made under these regulations is terminated. The total period of time shall not exceed 50 years from the effective date of utilization agreement. AOT had committed to 4 utilization agreements since September 30, 2002 and amended 1 utilization agreement on September 28, 2004. The use of state property land lasts for 30 years (September 30, 2032). AOT is allowed to extend the period for using state property land 2 times, 10 years each extension (September 30, 2052). AOT has paid compensation for using state property to the Treasury Department as Note 6.22. Depreciation expense for operating equipment for hotel business is recorded in accordace with the estimated useful life of assets.
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Calculation of depreciation is made by straight -line method according to the estimated useful life of each type of assets as follows: Building, construction, and landscape architecture Electricity, water, fuel and communication systems Machinery, tools & appliances, and equipment Vehicles Furniture, fixture and office equipment
Useful life of acquired assets (years) Before September 28, 2002 Since September 28, 2002 10 - 30 10 - 20 5 - 10 5 - 8 5
20 - 50 10 - 20 5 - 10 5 - 8 3 - 10
3.6 Foreign currency transactions Foreign currency transactions are translated into Baht at the rate ruling on the transactions date. Assets and liabilities dominated in foreign currency remaining at the balance sheet date are translated into Baht at the exchange rate as referred to the reference of the date notified by the Bank of Thailand. Gains or losses on currency exchange are recognized as incomes or expenses in the statement of income. 3.7 Interest on loans Interest on loans arises from loans for the projects under construction which is a part of construction cost and will be recognized as an expense upon completion. 3.8 Employee benefits AOT has established a provident fund for staff and employees who voluntarily participate in the fund, since March 28, 1994, in accordance with the Provident Fund Act, B.E. 2530 (1987). Staff and employees themselves are required to contribute at the rates ranging from 2-10% of their salaries and shall not exceed AOT contribution rates. According to AOT board of directors’ resolution at the meeting No. 9/2005 dated June 30, 2005, the AOT contribution rates are adjusted as follows: Years of employment
AOT contribution rates
Not over 10 years Over 10 years Over 20 years Over 25 years
9 10 12 15
Members can change the rate of contribution from 2-15% according to their employment periods. Such change will be effective in October each year. AOT contributions are recognized as expenses in the statement of income in which they incurred. The provident fund is separated from AOT and managed by provident fund management company.
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3.9 Cash and cash equivalents Cash and cash equivalents include cash on hand and at bank maturing within 3 months. 3.10 Corporate income tax Since AOT securities have been registered in the Stock Exchange of Thailand (SET) on March 11, 2004, its corporate income tax rate was reduced from 30% to 25% of net profit after adjusting certain provisions and expenses not complying with the principles of the Revenue Department, starting from the accounting period of October 1, 2004 to September 30, 2009. 3.11 Intangible assets Intangible assets are presented at cost deducted by accumulated amortization expense. Intangible assets comprise of: - Software licenses which can be detached from the related equipment are amortized on a straight line basis according to the 5-10 years estimated useful life of assets. - Compensation for noise impact is paid to entities / owners for reengineering building and construction in order to prevent noise impact incurred from the operations of Suvarnabhumi Airport. The compensation is amortized by straight - line method for 20 years 3.12 Basic earnings per share Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares issued during the year. 3.13 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates for certain accounts that affect the amount reported in the financial statements and notes related thereto. Subsequent actual results may differ from these estimates. 3.14 Cross currency and interest rate swap contracts The financial derivative was made with an objective to prevent the risk under accrual basis. Gains and losses from Baht conversion were recognized in the statement of income. Interest was applied to accounting policy as stated in item 3.7
4. Changes in Accounting Policies
4.1 Since October 1, 2007, AOT has changed the method to account for investments in subsidiaries and associates presented in the company’s financial statements from the equity method to the cost method in accordance with the Thai Accounting Standard No. 44 “Consolidated and Separate Financial Statements” (revised 2007), which states that investments in subsidiaries, associates, and jointly controlled entities must be presented by the cost method in the company’s financial statements. These changes in accounting policy resulted in applying retrospective method to the company’s financial statements for the prior period that presented comparatively as if AOT always used the cost method for investments in subsidiaries, joint venture, and associates. As a result, net income for 2007 increased by Baht 100.09 million.
The retained earnings as at October 1, 2006 and 2007 increased by Baht 480.74 million and Baht 580.83 million, respectively.
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4.2 Subsidiary (Suvarnabhumi Airport Hotel Co., Ltd.: SAH) has changed accounting policy related to record of operating equipment expense from recording as expense when used to recording as depreciation expense in accordance with expected useful life of asset. This change in accounting policy resulted in applying retrospective method to SAH’s financial statements for the prior period that presented comparatively as if SAH always recorded depreciation expense of operating equipment. According to this change, net income for 2007 decreased Baht 5.11 million. As a result, the retained earnings as at October 1, 2006 and 2007 decreased Baht 0.85 million and Baht 5.96 million, respectively.
5. Segmented Financial Information
AOT and subsidiary have 2 main segments, which are airport business and hotel business. In 2008 and 2007, AOT and its subsidiary have no substantial activities in segments. AOT, therefore, has neither presented financial information by business segments nor geographical segments.
6. Supplementary Information 6.1 Cash and cash equivalents Unit : Million Baht
Consolidated 2008
The Company 2008
2007
2007
Cash 618.15 176.30 617.09 175.24 Bank deposits (95.63) (115.38) (82.63) Current account (95.18) Savings deposits 1,622.90 2,599.89 1,511.86 2,557.40 Fixed deposits 4,500.00 7,500.00 4,500.00 7,500.00 Bonds 1,718.77 - 1,718.77 - Savings deposit at the AAT Savings and 73.18 70.58 73.18 70.58 Credit Cooperative Limited Total 8,437.37 10,231.39 8,338.27 10,208.04
As at September 30, 2008 and 2007, the bank deposits include the deposit of the AAT Staff Pension Fund in the savings deposits of Baht 8.0 million and Baht 7.98 million, respectively. The savings deposits at the AAT Savings and Credit Cooperatives Limited, amounting to Baht 73.18 million and Baht 70.58 million, respectively, are the deposits of
the AAT Staff Pension Fund, received an approval from the Ministry of Finance (the letter of the Ministry of Finance No.MF 0511/59136, dated December 9, 1992).
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6.2 Current investments Consolidated and The Company Unit : Million Baht
2008 2007 Fixed deposits Bonds Total
6,903.35 4,654.48 11,557.83
4,503.25 - 4,503.25
Fixed deposits and Bonds are over 3 months but not over 1 year . As at September 30, 2008 and September 30, 2007, fixed deposits include the deposits of the AAT Staff Pension Fund in the amount of Baht 3.35 million and Baht 3.25 million, respectively. 6.3 Trade accounts receivable - net Unit : Million Baht
Consolidated 2008
The Company 2008
Third parties Related parties Total Less : Allowance for doubtful accounts Trade accounts receivable - net
2,104.76 42.57 2,147.33 493.00 1,654.33
2007
2,252.22 72.65 2,324.87 535.36 1,789.51
2,027.50 46.53 2,074.03 491.25 1,582.78
2007
2,180.98 75.15 2,256.13 535.21 1,720.92
The allowance for doubtful accounts of Baht 493.00 million consists of 7 on going legal cases accounted for
Baht 9.41 million, 8 cases under process of gathering evidence for further legal action accounting for Baht 17.53 million, 3 cases under consideration of the State attorney for Baht 191.71 million, 1 case under installment payment for
Baht 47.86 million and 128 cases in the process of negotiation and pursuing totaling Baht 226.49 million.
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Trade accounts receivable are classified as follows: Unit : Million Baht
Consolidated 2008
The Company 2008
Not overdue Not over 6 months Over 6 months - 1 year Over 1 year - 2 years Over 2 years Total
1,289.21 259.85 86.79 188.73 322.75 2,147.33
2007
801.65 752.47 427.83 56.77 286.15 2,324.87
1,264.75 235.44 79.28 171.81 322.75 2,074.03
2007
771.12 729.13 412.96 56.77 286.15 2,256.13
6.4 Other receivables Unit : Million Baht
Consolidated 2008
The Company 2008
Receivables from the Revenue Department Receivables from extended credit Other receivables Total
1,246.83 8.00 14.31 1,269.14
2007
1,247.43 5.74 18.01 1,271.18
1,246.68 8.00 0.70 1,255.38
2007
1,246.68 5.74 10.59 1,263.01
Receivables from the Revenue Department amounting to Baht 1,246.83 million in the consolidated financial statements as at September 30, 2008, include Baht 0.15 million of SAH input tax refund and Baht 1,246.68 million of AOT input tax refund. AOT input tax refund was the input tax incurred from the construction of Suvarnabhumi Airport during June 1996 - December 2005 and transferred from NBIA on January 1, 2006. Referring to the input tax refund process, the Council of State considered that AOT, as the one that NBIA was transferred to in accordance with
the cabinet’s resolution and business transferring contract, is entitle to the right and responsibility transferred from NBIA to apply for the VAT refund (input tax). However, AOT must act in accordance with criteria stated in the Revenue Code and other related law.
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AOT acted according to the criteria set by the Revenue Department. AOT filed the estimation of use of building space to the Revenue Department and requested an extension to file details of building construction and use to the Director General of the Revenue Department. At present, it is under the consideration of the Revenue Department. 6.5 Inventories and supplies - net Unit : Million Baht
Consolidated 2008
The Company 2008
Inventories and supplies Less: Allowance for damaged and obsolete supplies Inventories and supplies - net
2007
2007
210.33
153.99
202.36
145.96
0.62
23.01
0.62
23.01
209.71
130.98
201.74
122.95
6.6 Other current assets Unit : Million Baht
Consolidated 2008
The Company 2008
Accrued input tax Other Current assets Total
144.47 45.93 190.40
2007
177.58 48.72 226.30
133.80 42.03 175.83
2007
168.21 45.41 213.62
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6.7 Investments in Subsidiaries and Associates Consolidated Unit : Million Baht
Name of Company
Percentage of shareholding (%) 2008
2007
Investments Cost method Equity method 2008 2007 2008 2007
Associated Company Thai Airport Ground Services Co.,Ltd. 28.50 28.50 149.62 149.62 191.74 174.65 Total 149.62 149.62 191.74 174.65
The unaudited financial statements were used for the recording of investments in associates under equity method. Associates adjusted transactions in order to disclose investments with the same accounting policy as AOT. The Company Unit : Million Baht
Name of Company
Percentage of shareholding (%) 2008
2007
Investments Cost method 2008 2007
Subsidiaries New Bangkok International Airport Co.,Ltd. (NBIA) - under 100.00 100.00 39,029.00 39,029.00 liquidation Suvarnabhumi Airport Hotel Co., Ltd. (SAH) 60.00 60.00 610.67 610.67 Associated Company Thai Airport Ground Services Co., Ltd. 28.50 28.50 149.62 149.62 Total 39,789.29 39,789.29
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6.8 Other long-term investments Consolidated and The Company Name of Company
Percentage of shareholding (%)
Unit : Million Baht
At Cost
Fair Value
Book Value
2008 2007 2008 2007 2008 2007 2008 2007
1. Investments stated at cost Airport Duty Free Co., Ltd. 10.00 10.00 20.00 20.00 - - 20.00 20.00 Phuket Air Catering Co., Ltd. 10.00 10.00 10.00 10.00 - - 10.00 10.00 Airport Associated Co., Ltd. 10.00 10.00 3.00 3.00 - - 3.00 3.00 Don Mueang International Airport Hotel Co.,Ltd. 9.00 9.00 10.80 10.80 - - 10.80 10.80 King Power Duty Free Co., Ltd. 5.00 5.00 10.00 10.00 - - 10.00 10.00 Fuel Pipeline Transportation Co., Ltd. 1.38 1.38 22.00 22.00 - - 22.00 22.00 Trade Siam Co., Ltd. 1.50 1.50 0.75 0.75 - - 0.75 0.75 Thai Aviation Fuel service Co., Ltd. 10.00 10.00 53.00 53.00 - - 53.00 53.00 Less: Allowance for impairment in value of investments : Thai Aviation Fuel Service Co.,Ltd. (22.00) (22.00) - - (22.00) (22.00) Total 107.55 107.55 - - 107.55 107.55 2. Investment stated at Fair Value Bangkok Aviation Fuel Service 4.94 4.94 21.00 21.00 190.26 272.16 190.26 272.16 Public Company Limited (BAFS) 3. Bonds 691.95 - - - 691.95 - Grand Total 820.50 128.55 190.26 272.16 989.76 379.71
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6.9 Related party transactions The related party transactions are included in the financial statements based on normal business as follows: Unit : Million Baht
Consolidated 2008 2007
The Company 2008 2007
6.9.1 Trade accounts receivable Thai Airport Ground Services Co., Ltd. 14.74 50.36 14.74 50.36 Phuket Air Catering Co., Ltd. 0.37 0.33 0.37 0.33 Suvarnabhumi Airport Hotel Co.,Ltd. - - 3.96 2.50 King Power Duty Free Co., Ltd. 8.12 - 8.12 - Bangkok Aviation Fuel Service Plc. 19.34 21.96 19.34 21.96 Total 42.57 72.65 46.53 75.15 6.9.2 Accrued income Thai Aviation Fuel Service Co.,Ltd. 9.53 9.72 9.53 9.72 King Power Duty Free Co., Ltd. 620.91 - 620.91 - Suvarnabhumi Airport Hotel Co.,Ltd. - - - 15.18 Total 630.44 9.72 630.44 24.90 6.9.3 Trade accounts payable Thai Airport Ground Services Co., Ltd. 10.91 51.42 10.91 51.42 Suvarnabhumi Airport Hotel Co.Ltd. - - - 0.08 Total 10.91 51.42 10.91 51.50 6.9.4 Accrued expenses Thai Airport Ground Services Co., Ltd. 34.03 9.92 34.03 9.92 Suvarnabhumi Airport Hotel Co.,Ltd. - - 0.01 0.75 Total 34.03 9.92 34.04 10.67 6.9.5 Revenue received in advance Suvarnabhumi Airport Hotel Co.,Ltd. - - 1.89 1.89
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Unit : Million Baht
Consolidated 2008 2007
The Company 2008 2007
6.9.6 Other accounts payable Suvarnabhumi Airport Hotel Co.,Ltd. - - 0.03 - 6.9.7 Revenues and expenses Operating revenues Thai Airport Ground Services Co., Ltd. 56.09 93.69 56.09 93.69 Phuket Air Catering Co., Ltd. 16.84 10.86 16.84 10.86 Don Mueang International Airport Hotel Co., Ltd. 5.53 5.53 5.53 5.53 Bangkok Aviation Fuel Service Plc. 278.65 274.63 278.65 274.63 Thai Aviation Fuel Service Co.,Ltd. 10.55 9.08 10.55 9.08 Suvarnabhumi Airport Hotel Co.,Ltd. - - 75.33 71.51 Total 367.66 393.79 442.99 465.30 Operating expenses Thai Airport Ground Services Co., Ltd. 360.98 364.04 360.98 364.04 Suvarnabhumi Airport Hotel Co.,Ltd. - - 0.57 2.44 Total 360.98 364.04 361.55 366.48 Other revenues King Power Duty Free Co., Ltd. 4,758.25 29.41 4,758.25 29.41 Other expenses Thai Airport Ground Services Co., Ltd. 4.37 4.37 4.37 4.37
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6.10 Property, plant and equipment - net Unit : Million Baht
Consolidated
The Company
Building & Building &
Construction Equipment Total Construction Equipment Total Cost As at October 1, 2007 98,063.65 37,355.86 135,419.51 95,958.67 36,799.08 132,757.75 Additions 2,652.54 1,493.23 4,145.77 2,632.76 1,489.83 4,122.59 Reclassification (14.66) 14.66 - (14.66) 14.66 - Disposals - (60.96) (60.96) - (42.20) (42.20) As at September 30, 2008 100,701.53 38,802.79 139,504.32 98,576.77 38,261.37 136,838.14 Accumulated Depreciation As at October 1, 2007 12,548.37 11,065.48 23,613.85 12,412.78 10,946.31 23,359.09 Depreciation for the Period 2,660.80 5,089.65 7,750.45 2,543.37 4,982.26 7,525.63 Disposals - (42.15) (42.15) - (42.15) (42.15) As at September 30, 2008 15,209.17 16,112.98 31,322.15 14,956.15 15,886.42 30,842.57 Book Value - net As at October 1, 2007 85,515.28 26,290.38 111,805.66 83,545.89 25,852.77 109,398.66 As at September 30, 2008 85,492.36 22,689.81 108,182.17 83,620.62 22,374.95 105,995.57
6.11 Assets under construction Consolidated and The Company Unit : Million Baht
Suvarnabhumi Airport Regional Airport Don Mueang Airport Total As at October 1, 2007 5,745.11 108.89 1.33 5,855.33 Addition 4,028.08 203.26 16.88 4,248.22 Transfer to property, plant and (3,676.44) (260.55) (12.44) (3,949.43) equipment As at September 30, 2008 6,096.75 51.60 5.77 6,154.12
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6.12 Intangible assets Consolidated and The Company Unit : Million Baht
At Cost Written off Book Value As at October 1, 2007 Addition/(Disposal) during the Period As at September 30, 2008
1,240.07 100.18 1,340.25
194.62 116.43 311.05
1,045.45 (16.25) 1,029.20
6.13 Other non-current assets Consolidated and The Company Unit : Million Baht
2008 2007 Unused land and Construction Less : Allowance for impairment of unused land Unused land and construction - net Advance payment Guaranteed money Receivables-The State Railway of Thailand Cross Currency Swap Account in arrears Total
1,834.53 971.66 862.87 18.94 0.69 4,075.69 264.68 - 5,222.87
1,730.67 971.66 759.01 75.31 0.67 3,996.16 - 232.53 5,063.68
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6.13.1 Unused Land and Construction
As at September 30, 2008, AOT has net unused land and construction amounting to Baht 862.87 million as follows : - There is 692 Rai, 2 Ngan, and 22 Square Wa of unused land at Suvarnabhumi Airport. The book value is Baht 1,730.67 million, less allowance for impairment of unused land of Baht 971.66 million, the unused land - net is amounting to Baht 759.01 million. AOT has policy to conduct a feasibility study for employees’ residence project. With reference to the Board of Directors’ resolution No. 22/2007 dated July 19, 2007, the International Civil Aviation Organization (ICAO) will be employed to study and revise the master plan for the development of Suvarnabhumi and Don Mueang airports. Part of the objectives is to fully utilize and develop the land at Suvarnabhumi Airport. Therefore, AOT slows down the feasibility study and waits for the study of ICAO. - AOT repurchased land and construction amounting to Baht 103.86 million from people who are affected by noise impact. AOT’s policy is to hire an assets management company to manage the sales and auctions for such assets. 6.13.2 Receivables-The State Railway of Thailand
The cabinet approved the Airport Rail Link Project (Payathai-Makkasan-Suvarnabhumi Airport) which has been operated by the State Railway of Thailand (SRT). However, some parts of the construction were under SAH building, therefore, investment for those parts of construction was paid by NBIA in accordance with the cabinet’s resolution on June 1, 2004. AOT (by NBIA) committed to a construction contract valued of Baht 4,362.19 million (VAT included). The Ministry of Transport proposed the budget of Baht 4,082.94 million to construct the tunnel. As at September 30, 2008, AOT (NBIA) has paid Baht 4,075.69 million (VAT included) for construction and recorded SRT as debtor. The unpaid balance was Baht 286.50 million. On December 18, 2007, the cabinet approved the State Railway of Thailand (SRT) to borrow Baht 9,940.322 million of loan which guaranteed by the Ministry of Finance. SRT must pay AOT for the construction of the station building and tunnel (including interest) as proposed by the Ministry of Transport. The Ministry of Finance and the Bureau of Budget will consider the method and condition of loan. 6.14 Promissory Notes The Company
AOT has issued promissory note to NBIA amounting to Baht 38,483.81 million on January 1, 2006 for discrepancy between the assets and liabilities transferred from NBIA, 0.5 % of interest rate per annum. AOT has not to pay interest since the dissolution date of NBIA. The maturity date of this note will be the last working day prior to the date that
the remaining of share value will be returned to AOT, (if any)
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6.15 Other current liabilities Unit : Million Baht
Consolidated 2008 2007
The Company 2008 2007
Employees’ bonus payable Accrued output tax Accrued property tax Value added tax payable Revenue received in advance Withholding tax payable Other liabilities Pension payable (AAT Staff Pension Fund) Total
1,094.13 447.25 2,202.89 45.73 417.49 46.44 417.82 10.63 4,682.38
504.76 396.91 2,193.15 37.67 357.03 16.59 119.41 4.30 3,629.82
1,094.13 441.49 2,202.89 45.73 419.37 45.13 406.43 10.63 4,665.80
504.76 392.84 2,193.15 37.67 358.39 14.76 103.59 4.30 3,609.46
6.16 Long - term loans
Consolidated 2008
The Company 2007
2008
2007
Million Yen Million Baht Million Yen Million Baht Million Yen Million Baht Million Yen Million Baht Foreign Loans 178,576.91 58,906.63 175,812.38 52,728.42 178,576.91 58,906.63 175,812.38 52,728.42 Less : Current portion of Long - term loan 5,193.53 1,713.17 4,358.24 1,307.09 5,193.53 1,713.17 4,358.24 1,307.09 173,383.38 57,193.46 171,454.14 51,421.33 173,383.38 57,193.46 171,454.14 51,421.33 Domestic Loans - 1,519.46 - 1,530.00 - - - - Less : Current portion - 148.40 - 111.30 - - - of Long - term loan - 1,371.06 - 1,418.70 - - - - Total 173,383.38 58,564.52 171,454.14 52,840.03 173,383.38 57,193.46 171,454.14 51,421.33
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AOT foreign loans were borrowed in Japanese yen from oversea financial institutes, guaranteed by the Ministry of Finance with fixed annual interest rate at 0.75-2.70 % and 2003-2042 payment due (As at September 30, 2008, exchange rate was Yen 100 = Baht 32.9867). Domestic loans were borrowed from local financial institutes for the construction of Suvarnabhumi Airport Hotel amounting to Baht 1,630.76 Million with interest rate as follows: - Contract signed date-September 30, 2007 annual interest rate is MLR-2.0% - From October 1, 2007 onwards annual interest rate is MLR-1.0% The payment is due quarterly for 44 installments, amounting to Baht 37.10 million for each installment. The first payment will be due in February, 2008 and the last payment will be paid within November 30, 2018. As at September 30, 2008. Suvarnabhumi Airport Hotel made a loan payment of Baht 111.30 million. The remainting loan was Baht 1,519.46 million. 6.17 AOT Staff Pension Fund AOT has set up a pension fund of Airports Authority of Thailand by contributing 10 % of the employees’ salaries to the fund. As at September 30, 2008, the balances of fund are shown as follows: Unit : Million Baht
2008 2007 Assets Bank and cooperatives deposits 84.52 81.81 Loan accounts receivable 0.03 0.31 Accrued income 1.13 1.13 Total 85.68 83.25 Liabilities and pension fund Accrued pension payments 10.63 4.30 AOT payable 36.11 33.94 Pension fund 38.94 45.01 Total 85.68 83.25 Payment obligations to staff 38.94 45.01
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6.18 Other non-current liabilities Unit : Million Baht
Consolidated 2008
The Company 2008
Work performance guarantees Reserve for contingent liabilities Deferred revenue Cross Currency Swap Unearned revenue Other non-current liabilitie Total
455.17 629.53 49.45 - - 21.38 1,155.53
2007
672.57 204.19 51.22 4,167.99 328.97 21.39 5,446.33
452.78 629.53 49.45 - - 21.38 1,153.14
2007
654.85 204.19 51.22 4,167.99 328.97 21.39 5,428.61
AOT hedged against the risk caused by fluctuation of foreign currency exchange rate by applying financial instruments of Cross Currency Swap with local and foreign financial institutes. 6.19 Share Capital AOT had authorized share capital of 1,428,570,000 ordinary shares with a par value of Baht 10 per share. The shares were issued and fully paid-up totally Baht 14,285.70 million. 6.20 Legal reserve According to Article 116 of the Public Limited Companies B.E.2535 AOT is required to appropriate not less than
5 percent of its annual net income as a reserve until the reserve fund reaches 10 percent of the authorized share capital. The AOT reserve fund was already appropriated to 10% of the issued and fully paid-up share capital. 6.21 Dividend On January 25, 2008, the Annual Shareholders’ meeting of AOT approved the dividend payment for the year 2007 of Baht 0.40 per share, amounting to Baht 571.43 million. AOT paid the dividends on February 22, 2008.
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6.22 State property rental The Treasury Department collected the compensation for using the state property from AOT at the rate of
5 percent of the operating income of Don Mueang International Airport and Suvarnabhumi Airport and 2 percent for the other 4 regional international airports without any expense deduction. After the opening of Suvarnabhumi Airport, the compensation rates for Don Muang International Airport and regional international airports will be adjusted according to the study of the consultant provided by the Treasury Department. In this accounting period, AOT and the Treasury Department are negotiating for the new compensation rates, therefore, state property rental amounting to Baht 952.97 million has been recorded at the former rates since the opening of Suvarnabhumi Airport. The rental fees of state property amounting to Baht 2.76 million which AOT received from Don Mueang International Airport Hotel Co., Ltd. has been remitted to the Treasury Department, Ministry of Finance at the rate of 50 percent without any expense deduction. The total amount of fees was Baht 955.73 million. 6.23 Remuneration to the Board of Directors Unit : Million Baht
Consolidated 2008
The Company 2008
Remuneration Bonus Other premium for senior executives Total
6.96 5.68 8.80 21.44
2007
8.35 9.52 8.06 25.93
6.08 5.68 7.50 19.26
2007
7.73 9.52 5.42 22.67
6.24 Remuneration to Auditors Unit : Million Baht
Consolidated 2008
The Company 2008
Audit fee Other expenses Total
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2.65 0.41 3.06
2007 2.65 0.34 2.99
2.25 0.41 2.66
2007 2.25 0.34 2.59
6.25 Law Compensation Revenues Baht 8,331.53 million of law compensation revenues are paid by 2 private companies to AOT as compensation and some amount are additionally recorded according to the agreement, totaling to Baht 3,871.53 million. Moreover, Baht 4,460 million are transferred from advance received concession revenue in accordance with the orders of
the civil court No. 2440/2550 and No. 2441/2550 as stated in Note 6.31.2 6.26 Loss (gain) on foreign exchange Consolidated and The Company Unit: Million Baht
2008 2007 Realized Loss (Gain) Unrealized Loss (Gain) Total
(208.45) 1,137.17 928.72
(286.32) (2,518.22) (2,804.54)
6.27 Financial Instruments Interest rate risk
The risk from interest rate is caused by the variance of future interest rate in the market which will affect AOT operation performance and cash flow. AOT has short term and long term deposits in the banks and financial institutes. The AOT subsidiaries have liabilities from fixed and floated interest rate loans. Exchange rate risk
AOT had risk from the variance of currency exchange rate that affects liabilities, operating expenses and interest payment of its subsidiaries in foreign currency. AOT risk management policy is to set up the risk management working group on foreign debt. The working group hedged against partial liabilities of foreign currency by applying financial derivative of Cross Currency Interest Rate Swap with Thai and foreign financial institutes. Credit risk
Credit risk is arisen from the delayed payment of debt of the client. Setting the clear service payment, continually trace the client of outstanding debt, and ask for the guarantee from the client schedule, are the ways to hedge the said matter. The client’s fair value stated in the balance sheet is the net value of the debtor after deducting doubtful account.
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Liquidity risk
AOT and its subsidiaries manage liquidity risk by sufficiently maintaining the level of cash and cash equivalents as well as providing adequate amount of loan for spending. Actual interest rate analysis
The actual interest rates of the financial assets and liabilities with interest as at September 30, were as follows Consolidated
Unit : Million Baht
2008 Cash and current account Cash equivalents Current investments Long-term investments Loans (Baht) Loans (Japanese Yen)
Within More than More than More than Total 1 Year 1 Year 2 Years 5 Years - 522.52 - - - 522.52 3.32 7,914.85 - - - 7,914.85 3.75 11,557.83 - - - 11,557.83 3.73 - 691.95 - - 691.95 19,995.20 691.95 - - 20,687.15 6.31 148.40 148.40 296.80 925.86 1,519.46 1.69 1,713.17 4,160.95 12,598.14 40,434.37 58,906.63 1,861.57 4,309.35 12,894.94 41,360.23 60,426.09
Effective interest rate (%)
Unit : Million Baht
Within More than More than More than Total 1 Year 1 Year 2 Years 5 Years Cash and current account - 60.92 - - - 60.92 Cash equivalents 3.13 10,170.47 - - - 10,170.47 Current investments 3.76 4,503.25 - - - 4,503.25 14,734.64 - - - 14,734.64 Promissiory notes (Baht) 4.30 10.00 - - - 10.00 Loans (Baht) 4.93 111.30 148.40 445.20 825.10 1,530.00 Loans (Japanese Yen) 1.74 1,307.09 1,588.48 11,469.82 38,363.03 52,728.42 1,428.39 1,736.88 11,915.02 39,188.13 54,268.42
2007
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Effective interest rate (%)
The Company
Unit : Million Baht
Within More than More than More than Total 1 Year 1 Year 2 Years 5 Years Cash and current account - 534.46 - - - 534.46 Cash equivalents 3.34 7,803.81 - - - 7,803.81 Current investments 3.75 11,557.83 - - - 11,557.83 Long-term investments 3.73 - 691.95 - - 691.95 691.95 - 19,896.10 - - 20,588.05 Loans (Japanese Yen) 1.69 1,713.17 4,160.95 12,598.14 40,434.37 58,906.63
2008
Effective interest rate (%)
Unit : Million Baht
Within More than More than More than 1 Year 1 Year 2 Years 5 Years Total Cash and current account - 80.06 - - - 80.06 Cash equivalents 3.14 10,127.98 - - - 10,127.98 Current investments 3.76 4,503.25 - - - 4,503.25 - 14,711.29 - - - 14,711.29 Loans (Japanese Yen) 1.74 1,307.09 1,588.48 11,469.82 38,363.03 52,728.42
2007
Effective interest rate (%)
Fair value of Financial Instrument
Most of the financial assets and liabilities were in short-term category including the loan which its interest rate close to the rate applied in the market. The management believed that the fair value of financial assets and liabilities did not have significant difference from the book value. The fair value of Cross Currency and Interest Rate Swap, which was the liability, as at September 30, 2008 amounting to Baht 3,387.53 million , was calculated by decreasing rate fixed by the contractor and deemed to be cancellation of contract on the date stated in the Balance Sheet.
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6.28 Commitment Consolidated and The Company
AOT’s commitments are as follows: Capital expense commitment as at September 30, 2008 AOT has been obligated to the contract of development projects for its regional airports and others amounting to Baht 451.13 million (VAT included) and for Suvarnabhumi Airport’s construction project amounting to Baht 3,223.17 million (VAT excluded). Operating expense commitment (VAT included), as at September 30, 2008 comprises: Contracts with private sector Repair and maintenance contracts Properties leasing contracts Total
Unit : Million Baht
5,739.68 248.81 132.33 6,120.82
The Suvarnabhumi Airport Hotel has entered into 20 year - contract of hotel management (February 1, 2005January 31, 2025). SAH has obligation for the logo fee amounting to Baht 21.40 million (VAT included) which was recorded as expense for Baht 4.28 million. The remaining obligation was Baht 17.12 million. SAH also has an obligation for hotel management fee (wages and personnel expenses) amounting to Baht 1,995.24 million. The amount of Baht 177.62 million was recorded as expense and Baht 1,817.62 million was remained. Total remaining obligations were Baht 1,834.74 million. 6.29 Contingent liabilities 6.29.1 Assessment of property tax
AOT property tax has been assessed by Bangkok Metropolitan Administration (BMA) since 1995 by using remunerations for the space that AOT granted to operators as a calculation base. AOT appealed to BMA and submitted the matter to Office of the Attorney General on July 29, 1999 for the determination of the committee on the assessment of property tax. As a result, the board of directors (meeting No. 6/1999 dated June 29, 1999) resolved that AOT would pay property tax at the reasonable rate. BMA has informed the Treasury Department, the owner of property, about
the assessment of property tax every year by using the same criteria since 1995 AOT has disagreed and appealed every year as since 1995. Later, AOT was informed by the Office of the Attorney General (letter No. 0015/5219 dated Mar 24, 2005) for
the final determination of the committee on the assessment of property tax. If BMA accepts the final determination of the committee, AOT will get the property tax (1995-2003) of Baht 570.69 million from BMA (the letter requesting for the repayment of the said tax amount has already been sent to BMA). The Office of the Attorney General informed
the Treasury Department that, in 2004, the committee had the same determination as in 2003.
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Referring to BMA letter dated September 11, 2006, BMA informed the Treasury Department that BMA disagreed with the determination of the committee on the assessment of property tax. AOT was informed by the Treasury Department on October 2, 2006 that the Office of the Attorney General will submit the matter to the cabinet for ordering BMA to act in accordance with the determination of the committee. In this accounting period, AOT was informed by BMA on the assessment of property tax for the spaces that AOT granted to operators at Don Muang International Airport for the year 2006 (additional) and 2007 amounting to Baht 386.90 million by adhering to the previous criteria since 1995. AOT, therefore, paid the tax of Baht 134.45 million by offsetting debt of BMA according to the tax assessment criteria for the year 2004 specified by the committee on
the assessment of property tax. For the remaining amount of Baht 252.45 million, AOT appealed to BMA according to
the determination of the committee. As at September 30, 2008, AOT has Baht 2,353.11 million of appealing tax payable (BMA has assessed the property tax amounted to Baht 3,799.88 million, less the paid tax of Baht 1,446.77 million). Moreover, AOT recorded penalties of Baht 23.78 million in this accounting period, totaling of Baht 226.98 million according to Section 43(4) of the Property Tax Act, B.E.2475 (1932), amended by the Property Tax Act (No.4), B.E.2534 (1991) in case the result of the appeal complied with the assessment of BMA. 6.29.2 Lawsuits
AOT was prosecuted with 27 cases and the plaintiff filed a lawsuit against AOT to compensate for the damage in an approximate amount of Baht 5,894.37 million (excluding interest). The cases are in the courts consideration and insurance company. AOT was prosecuted with 2 cases at Civil Court by 2 private companies as stated in Note 6.31.2 In addition, AOT was prosecuted with 13 cases of impact from the noise pollution. The plaintiff filed a lawsuit against AOT to compensate for the damage in an approximate amount of Baht 601.39 million. Presently, the cases are under the consideration of the Administrative Court. The attorney-at-law of the Office of the Attorney General represents AOT. 6.29.3 Noise Impact
AOT’s Board of Directors approved on May 15, 2008, the compensation payments to people who are affected by noise pollution arisen from the operations of Suvarnabhumi Airport in accordance with the cabinet resolution on May 29, 2007. The compensation payments base on actual air traffic and are for buildings that were constructed before 2001as follows: - Areas with NEF over 40: To negotiate and purchase buildings and constructions by comparing with the compensation guideline for expropriated immovable property as stated in the Act on Expropriation of Immovable Property B.E.2530 (1987). If owners do not want to sell the property, they will receive money for building improvement
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- Areas with NEF 30-40: To support building and construction improvement by evaluating noise level. If the noise level is over 10 decibel (a), an owner will receive money for buildings and constructions improvement according to the criteria of the study of National Institute of Development Administration (NIDA) Number of buildings and areas which are affected by the actual air traffic as stated in the cabinet resolution is higher than the one estimated in environmental examination report. Therefore, it may result in increasing expenses of AOT and may affect performance of AOT. However, AOT established noise charge working group on November 15, 2007. 6.29.4 Compensation for Termination of All Employees
With reference to the Announcement of the State Enterprise Labour Relations Committee (Minimum Standards of Conditions of Employment) dated June 28, 2006, if state enterprise terminates all employees without any guilty, employees are entitles to receive compensation at the rate stated in the law. As at September 30, 2008,
the compensation was Baht 1,346.63 million which AOT did not recorded in the financial statements. 6.30 Acquisition and dissolution of NBIA According to the cabinet’s resolution dated September 10, 2002, the cabinet agreed to transfer all activities, rights, liabilities, commitment, assets, as well as employees of NBIA to AOT when Suvarnabhumi Airport has completely been constructed. This would take place before the airport start its operation. Besides, NBIA should be dissolved and all its activities transfer to AOT as a business unit. This arrangement has already occurred on January 1, 2006 and acknowledged by the cabinet’s resolution dated February 28, 2006 in accordance with the resolutions of the Ministry of Finance and the Ministry of Social Development and Human Security. On December 8, 2004, all personnel from NBIA have already been transferred to AOT. After that, business, assets, rights, and commitment of that have also been transferred to AOT on January 1, 2006. All properties and liabilities have been transferred from NBIA under book value recorded in NBIA account as at December 31, 2005 at the amount of Baht 100,913.28 million (including Baht 91,820.25 million of assets under construction, Baht 149.35 million of land, plant and equipment and Baht 8,943.68 million of other items) and Baht 62,429.47 million, respectively. Thus, the amount of the promissory note that AOT issued to NBIA was Baht 38,483.81 million with interest rate of 0.5% per annum. The maturity date of this note will be the last working day prior to the date that the remaining of share value, (if any), will be returned to AOT. NBIA was registered for dissolution on July 31, 2006 in accordance with the resolutions of the AOT Extraordinary Shareholders Meeting No. 1 on July 12, 2006 and No.2 on July 28, 2006. At present, it is under the liquidation process. AOT has not to pay interest since the dissolution date of NBIA. 6.31 Dispute with Private Companies 6.31.1 Airport Duty Free Co., Ltd.
AOT and the Airport Duty Free Co., Ltd. had a dispute over AOT demand that the Airport Duty Free Co., Ltd. made the minimum guarantee payment according to the contract in 1998-2001 in an amount of Baht 442.17 million.
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However, the Airport Duty Free Co., Ltd. snubbed AOT request. AOT tried to reach an agreement with B.A.D.F. Co., Ltd. which is the joint venture party of AOT under the joint venture contract for establishment of the Airport Duty Free
Co., Ltd., but the matter was unsuccessful. At present, it is under the process of appointing the arbitrator of B.A.D.F.
Co., Ltd. The compensation has not yet been recorded in the account. 6.31.2 Two Private Companies
AOT committed to 2 contracts with 2 private companies to operate the duty free shops and commercial activities management projects and the private companies paid advance concession revenue in an amount of Baht 4,460 million. According to the Board of Directors Meeting No.10/ 2007 dated March 22, 2007, the committee considered the projects in conjunction with the opinion and recommendation from the Council of State (special committee) and information of the project value calculation method and found that AOT did not conduct the projects in accordance with the Act on Private Participation in State Undertaking, B.E. 2535 (1992), therefore, contracts between AOT and private companies were invalid and nonbinding. AOT issued letters to both private companies to inform them about the Board of Directors’ resolutions. The private companies prosecuted AOT on June 4, 2007, with the cases No. 2440/2550 and 2441/2550.
The plaintiffs filed lawsuits against AOT to act in compliance with the contracts. If AOT fails to do so, AOT must pay compensation to the plaintiffs in an amount of Baht 20,878.51 million and Baht 48,074.15 million, respectively, with
the interest rate at 7.5 % p/a since the filing date until the last date of payment. In addition, AOT proposed to
the Office of the Attorney General to defend AOT against the private companies according to the Board of Directors resolution No. 17/2007 dated May 17, 2007. The attorney-at-law submitted the defense statement for AOT. The Civil Court considered the case No. 2441/2550 on January 31, 2008, and issued the temporary injunction. AOT must allow private companies to continue their operations in the space they have occupied before the issue of
the temporary injunction. The privates companies have to pay AOT as stipulated in the contracts. If the court rules that the contracts are not binding, those payments would count as compensation for damages. On April 25, 2008, the Civil Court issued the temporary injunction of the case No. 2440/2550. AOT and
the private company agreed that AOT will allow the private company and minor operators to use the space of 25,827.67 square meters. The private company has to pay compensation to AOT as stated in the conctract or on the date informed by AOT. The compensation will be considered as minimum compensation for damages if the court rules that the contract is not binding. Therefore, AOT could not estimate any liabilities incurred from the lawsuits filed by both private companies. (if any). 6.32 Approval of Financial Statement The Audit committee, who was delegated authority by the AOT’s Board of Directors, has approved these financial statements on November 21, 2008.
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Thirty years of demonstrable commitment toward becoming a world-class airport. For over 30 years, Airports of Thailand has served as a gateway to Thailand, welcoming and connecting passengers from across the world to their destinations with smiles and a heartfelt service backed by international safety standards. Today, we continue to make great strides toward ongoing development to bring Thai airports to the ranks of world-class airports in the years to come.
The Path to Achievement 1980
AAT began the development of Bangkok International Airport so it would be able to accommodate future increases
in air traffic.
1979
The Airports Authority of Thailand (AAT) was established and assumed the responsibility transferred from
the Directorate of Civil Aviation, the Royal Thai Air Force.
1988
Three regional airports including Chiang Mai International Airport, Hat Yai International Airport, and Phuket International Airport were transferred to be under the responsibility of AAT.
1985
The air cargo warehouse was established to accommodate the growth in air cargo volume.
1997
The National Visitors’ Lounge Project was launched to promote
the Amazing Thailand Year and to demonstrate
AAT’s excellent service.
1992
Common use X-Ray systems were used to check passenger baggage for enhancing passengers safety and convenience.
Striding toward
the 30 th year of operating 1998
Chiang Rai International Airport was transferred to be under the responsibility of AAT.
1999
AAT provided financial support for the construction of the first AAT Border Patrol Police School at Aijadar Village, Rue Soh District, Narathiwat Province in line with its commitment to social responsibility.
Future
2006
Suvarnabhumi Airport,
the pride of the Thai people and the nation, officially opened.
2002
AAT Registered to be
a public company limited to develop its capabilities.
Striding toward one of the world’s best airports.
2008
Suvarnabhumi Airport received numerous awards such as the 4th Best Airport Worldwide by Smarttravelasia and the World’s 3rd Best Airport by Wanderlust magazine.
SAFETY SECURITY AND EFFICIENCY The international standard security system
ensures peace of mind
PLANING AND GROWTH Connecting business
to ensure a sustainable growth
OPERATION AND SERVICE Experience a heartfelt service in every step
CUSTOMERS AND RETAIL Enjoy shopping for scores of
world-famous brand-name merchandise
SOCIAL
AND ENVIRONMENTAL
CONTRIBUTION Providing world-class services
with concern for society
and the environment
ADHERING TO THE PRINCIPLES
OF GOOD CORPORATE
GOVERNANCE Quality and morality are the hallmarks
of our business philosophy
Safety and service are our prime priorities.
General Information Company Name : Airports of Thailand Public Company Limited Acronym : AOT Registration Number : PLC 0107545000292 Business : Airport operator and other services related to aviation and transport Accounting Period : October 1 - September 30 Head Office : 333 Cherdwutagard Road, Srikan, Don Mueang, Bangkok 10210 Tel : 0 2535 1111 Fax : 0 2535 4061 Website : http://www.airportthai.co.th Investor Relations Center : Tel: 0 2535 5900, Fax: 0 2535 5909, E-mail : aotir@airportthai.co.th Registered Capital : 14,285,700,000 Baht No. of Common Stock : 1,428,570,000 shares, par value at 10 Baht per share Shareholders : The Ministry of Finance is the major shareholder with 70% stake, with the other 30% held by institutes and retail investors Listed Date : March 11, 2004 Registrar : Thailand Security Depository Company Limited Office : 2/7 Moo 4 (North Park Housing Project) Vibhavadi-Rangsit Road, Thungsonghong, Laksi, Bangkok 10210 Tel : 0 2596 9307 Fax : 0 2832 4994-6 Auditor : Office of the Auditor General of Thailand Office : Rama 6 Road, Samsen Nai, Bangkok 10400 Tel : 0 2273 9674-91 Fax : 0 2618 5883
Message from the Chairman 28 September 2008 marked the second anniversary of the opening of Suvarnabhumi Airport. Over the years, Airports of Thailand Public Company Limited (AOT) has been committed to the continual development of quality in airport service delivery and airport management to reach the highest international standards of safety and facilities. Thanks to this demonstrable commitment, Suvarnabhumi, for the fiscal year 2008 (October 2007 - September 2008), efficiently handled more than 41,180,456 million passengers with a total of 256,118 flights. In addition, over 1,259,685 tons of cargo and postal parcels (excluding through cargo) passed through the airport. With confidence and readiness in delivering quality airport service, AOT entered Suvarnabhumi Airport into the Airport Service Quality Program (ASQ) rankings organized by Airports Council International (ACI). The objective was to enhance AOT’s competitiveness in providing improved services in passenger check-in and check-out service as well as security, facilities, and services provided within the terminal and the airport area. The efforts underpinned AOT’s determination to pursue a world - class service objective to ensure that Suvarnabhumi can rise to the ranks of world - class or best in class airports. Moreover, five other airports operated by Airports of Thailand Public Company including Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport, and Chiang Rai International Airport have witnessed a steady growth in air traffic volume as a result of the rapidly - growing low cost carriers. To address the anticipated rising passenger volume, AOT has devised development plans for Suvarnabhumi and the provincial airports especially Phuket International Airport, which will reach its full capacity in the near future. This is to ensure that AOT can retain its high levels of service quality and standards as well as excellent operational prowess, enabling AOT to materialize its vision of becoming the aviation hub in Southeast Asia. For 2008, total air traffic volume of AOT (including Suvarnabhumi Airport, Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport, and Chiang Rai International Airport) amounted to 58,304,267 passengers, an increase of 4.08% over the previous year. The volume
of cargo and postal parcels passed through the airport (excluding through cargo) totaled 1,345,845 million tons, a rise of 6.65%, whereas the traffic volume grew 0.96% year-on-year to 394,057 flights.
As a result of the growth in air traffic volume and an increase in passenger service charge encompassing landing and parking charges and aircraft storage fees, the operating revenues of AOT for the fiscal year 2008 (October 2007 - September 2008) totaled 22,010.87 million Baht. The operating expenses amounted to 18,515.89 million Baht. Despite higher expenses under depreciation, the implementation of the policy to enhance operating efficiency and to strictly control
the operating expenses resulted in AOT achieving operating profit of 3,494.98 million Baht, an increase of 133.51%, and net profit of 7,321.05 million Baht, a rise of 571.80% from the previous year.
The growth could be partly attributed to the realization of revenues from the sales of duty-free goods and other commercial activities totaling 8,331.54 million Baht following the Civil Court’s temporary protection orders on 31 January 2008 and 25 April 2008.
This enormous achievement is the culmination of collaboration and total commitment of AOT’s Board of Directors,
the Management, and employees at all levels to the development of Suvarnabhumi and the five airports under
the responsibility of AOT into world-class airports. AOT attaches significance to conducting business in line with the principles
of good corporate governance and pledges to create confidence among all stakeholders. The Company continues
to develop the efficiency and effectiveness of its operations while increasing competitiveness in world-class service. AOT’s unwavering commitment also extends to developing information technology and enhancing the potential of its employees so they can rise to any challenge that may affect the aviation industry and air transport in the years to come. (Vudhibhandhu Vichairatana) Chairman
AOT Board of Directors 02
Mr. Surachai Tansitpong Director
Chaisak Angkasuwan 04 Mr. Director
04
02
03
01
05
Chief Marshal Raden Puengpak 03 Air Director
01
022 annual report 2008
Mr. Vudhibhandhu Vichairatana Chairman
Utid Tamwatin 05 Mr. Director
07
Mr. Pongsak Semson Director
Air Chief Marshal Sumet Pohmanee 09 Director
12
Mr. Thaworn Phanichpan Director
12
09
14
Mr. Apichart Sayasit Director
14
07
06
10
08
Vinai Vithawaskarnwej 06 Mr. Director
10
15
11
Mr. Arkhom Termpittayapaisith Director
Police General Sombat Amornvivat
11
13
Mr. Chulasing Wasansing Director
15 13
08 Director
023 annual report 2008
Mr. Serirat Prasutanond Director and Secretary
to the Board of Director
Flight Lieutenant Usar Borisuth Director
024 annual report 2008
AOT Senior Executives Mr. Surajit Surapolchai
Mrs. Supaporn Burapakusolsri
(Engineering and Information Technology)
06
05
Flight Lieutenant Viwat Smarnrug Senior Executive Vice President (Regional Airports)
07
Flying Officer Narongchai Tanadchangsaeng Executive Vice President (Administration)
Mr. Suratas Suthammanas
15
09 Executive Vice President (Business Development)
08
06
Mr. Permsak Pattanapong Senior Specialist 10
16
14
09
07
04
Mr. Adeethep Nakavisute Senior Specialist 10
Mr. Saneh Chausurin
02 Senior Executive Vice President (Administration)
Mr. Serirat Prasutanond Senior Executive Vice President, General Manager of Suvarnabhumi Airports (Acting President)
025
annual report 2008
17
18
15
17
13
10
12
11
Mr. Nirandra Theeranartsin
04 Senior Executive Vice President (Business Development)
10
18
16
03
01
Miss Suwannee Sumrongwatana Executive Vice President, Duputy General Manager of Suvarnabhumi Airport (Administration) Flying Officer Passakorn Surapipith Senior Specialist 10
Mrs. Sombat Khoonprasert Senior Specialist 10
(Planning and Finance)
02
01
14
08 Executive Vice President
05 Senior Executive Vice President
Mr. Pornbanchob Sombatpium Executive Vice President (Engineering and Information Technology)
Mrs. Kulya Pakakrong
03 Senior Executive Vice President
11
(Planning and Finance)
026
annual report 2008
12
Flying Officer Pearl Rugsamruad Corporate Secretary
Mr. Jayakorn Aksharamat Executive Vice President (Regional Airports)
13
Mr. Somchai Sawasdeepon Senior Specialist 11
24
Wing Commander Wicha Nurnlop Executive Vice President, General Manager of Phuket International Airport
Wing Commander Nutt Homasavin
26 Vice President, General Manager
of Hat Yai International Airport
Flying Officer Chaturongkapon Sodmanee
27
25 Executive Vice President, General Manager of Chiang Mai International Airport
24
26
25
27
22
20 19
23
21
Flying Officer Wisit Eiwprapha Mr. Chatra Harnpatananan Executive Vice President, Deputy General Executive Vice President, Deputy General Manager Manager of Suvarnabhumi Airport of Don Mueang International Airport (Administration) (Maintenance and Information Technology) Flying Officer Anirut Thanomkulbutra Wing Commander Prateep Wichitto Pilot Officer Anant Kongyuen Senior Executive Vice President, Executive Vice President,
Executive Vice President, Deputy General Deputy General Manager Manager of Don Mueang
General Manager International Airport (Operations) of Suvarnabhumi Airport (Operations) of Don Mueang International Airport
22
20
19
Mr. Prathuang Sornkhom Vice President, General Manager of Chiang Rai International Airport
21
23
027
annual report 2008
BOARD OF DIRECTORS
Audit Committee
Airports of Thailand Public Company Limited (AOT) Audit Office Special Projects Office
Administration
• Administration Department • Legal Department • Human Resources Department • Human Resources Development Department • Occupational Health and Safety Department • Supply Department • Medical Department
Regional Airports
Planning and Finance • Corporate Strategy Department • Budgeting Department • Finance Department • Accounting Department
• Investor Relation Center
• Phuket International Airport • Chiang Mai International Airport • Hat Yai International Airport • Chiang Rai International Airport
Suvarnabhumi Airport Business Unit
• Central Administration Division
Administration Line
• Suvarnabhumi Airport Administration Department • Planning and Finance Department • Special Affairs Department • Medical Division
Operations Line
• Landside Operations Department • Airside Operations Department • Baggage Handling System Department • Security Department • Rescue and Fire Fighting Department
ORGANIZATION CHART Nomination Committee Remuneration Committee Corporate Governance Committee
Corporate Secretary Office
Corporate Secretary Airport Safety and Standardization Office
Business Development • Business Development Department • Business Management Department
Corporate Communications Office
Engineering and Information Technology
• Airport Development Planning Department • Engineering and Architecture Department • Information Technology Department • Environmental Department
Don Mueang International Airport Business Unit
• Don Mueang International Airport Administration Department • Airport Operations Department • Airport Security Department • Maintenance Department
Airport Safety and Standards Division
Maintenance and Information Technology Line
• Electrical and Mechanical Department • Airfield and Building Department • Airport Information Technology Department • Communications and Electronics Department
Commercial Operation Line
• Commercial Operations Department • Transportation Administration Department
• Medical Division • Commercial and Finance Division • Airport Safety and Standards Division
Business Characters Airports of Thailand Public Company Limited, or “AOT” operates main airports of Thailand. AOT’s main activities comprise management, operations and development of 6 airports under its responsibility, namely Suvarnabhumi Airport, Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport and Chiang Rai International Airport providing services for both domestic and international flights. Suvarnabhumi Airport is the country’s main airport opened for service on September 28th, 2006 to handle
the successive increases in the number of passengers. The airport is capable of serving 45 million passengers per annum, handling 3 million tons of cargo freight per annum and providing service for 76 flights per hour. AOT also operates an airport hotel at Suvarnabhumi Airport under the name of Novotel Suvarnabhumi Airport Hotel containing 600 rooms. The airport hotel is a joint venture project among 3 parties: Airports of Thailand Public Company Limited (AOT), Thai Airways International Public Company Limited and Krung Thai Bank Public Company Limited which aims at serving and facilitating Suvarnabhumi Airport passengers. The increasing volume of air traffic and passengers resulted from a few reasons. The first one was the government’s policy to emphasize development of airports, particularly Suvarnabhumi Airport, to become an aerotropolis, a hub for the cargo freight and tourism of Asia and the world. The second one was the Tourism Authority of Thailand’s proactive tourism policy which aimed at expanding new tourist markets. The last is when the ASEAN countries mutually agreed upon freedom of the air policy, along with increasing more and more flexibility of rules and regulations concerning air transportation.
The freedom of the air policy and expansion of economy as well as international trade allowed low cost carriers to have access to the domestic and international markets. Thus, low cost carriers grew rapidly both in terms of airline quantity and flight frequency. It was estimated that the increase of Chinese and Indian populations with moderate incomes would enable the low cost carriers of Asia - Pacific to expand greatly in the future. In addition, technical innovation of new aircraft, such as the A380, will help the overall air transport system to increase its efficiency, to reduce its capital and to decrease flight time because an aircraft can fly directly to destination without stopping. This in turn leads to new flight routes and more competition to increase volume of flights and passengers for regional hubs, instead of giving a chance to other destinations. As ticket price is reduced, people can gain more access to air transport service. Furthermore, communication technology has developed at a fast pace, allowing passengers to easily search information on tourist attractions and business resource just as they need. Especially air passengers can also make a quick reservations by themselves at cheaper prices. Nonetheless, domestic factors such as insurgency in the Southern part of Thailand, the protest to close down AOT airports, political turmoil and the declaration of a state of emergency had all affected foreign tourists traveling to Thailand. Moreover, the continuous increase of oil price, credit market crisis, insecurity of financial institutes in
the United States of America and worldwide economic going downhill problem were very much related to growth of
air traffic volume and caused psychological influence resulting in global consumption and investment slowdown, which had both direct and indirect impact on airport and aviation industries.
032
annual report 2008
As regards the future progress of AOT, Airports Council International (ACI) predicts growth in the number of worldwide passengers by the year 2010 would be over 5 billion, and would increase to 9 billion by the year 2020.
The latter number can be divided as approximately 5.1 billion domestic passengers and 4 billion international passengers. However, the growth rate of worldwide passengers in the next 20 years (2006-2025) will be 4% per annum on average. The growth rate of the number of Asia-Pacific passengers at around 5.8% per annum will be higher than that in every region in the world. This is because many countries in this region started to develop their air transportation and also because of rapid growth of the Chinese and Indian economies.
033
annual report 2008
Summary of AOT’s Financial Information
Summary of the Company’s Financial Information
Operating Results (Million Baht) Operating revenues Operating expenses Operating profit Net profit Financial Status (Million Baht) Total assets Total liabilities Shareholders’ equity Financial Ratio Liquidity ratio (X) Net profit to operating revenue ratio (%) Return on equity (%) Return on assets (%) Debt / equity ratio (X) Book value per share Net profit per share (Baht)
036
annual report 2008
2008
2007
2006
22,010.87 18,515.89 3,494.98 7,321.05
19,501.41 18,004.68 1,496.73 1,089.76
16,240.86 9,420.07 6,820.79 10,473.99
146,455.97 70,147.58 76,308.39
143,466.98 73,789.75 69,677.23
150,505.06 79,341.54 71,163.52
2.38 33.26 10.03 5.05 0.92 53.24 5.12
1.74 5.59 1.55 0.74 1.06 48.57 0.76
1.68 64.49 15.44 7.35 1.11 49.81 7.33
Classification of Operating Revenues for Fiscal Year 2008 Breakdown by Sources of Revenue Landing and Parking Charge Passenger Service Charge Facilities Service Charge Office and Property Rents Service Revenue Concession Revenue
Unit : Million Baht
Breakdown by Airports Head office Don Mueang International Airport Suvarnabhumi Airport Regional Airports Suvarnabhumi Airport Hotel
Unit : Million Baht
%
4,216.35 19 10,417.01 47 431.75 2 1,480.64 7 3,164.29 14 2,300.81 11 22,010.87 100 %
0 900.52 4 17,902.39 82 2,451.28 11 756.68 3 22,010.87 100
Classification of Operating Expenses for Fiscal Year 2008 Breakdown by Sources of Expenses Staff costs Operating expenses Repairs State property use Depreciation
Unit : Million Baht
%
3,909.00 5,100.31 683.96 955.73 7,866.89 18,515.89
21 28 4 5 42 100
Breakdown by Airports Unit : Million Baht Head office 1,342.77 Don Mueang International Airport 1,818.24 Suvarnabhumi Airport 13,433.93 Regional Airports 1,241.03 New Bangkok International Airport Co.,Ltd. 0.09 Suvarnabhumi Airport Hotel 679.83 18,515.89
%
7 10 72 7 0 4 100
037
annual report 2008
Analysis of Operating Results
(Consolidated Financial Statements)
Comparative Financial Overview 2008/2007
AOT and its subsidiaries recorded operating revenues of 22,010.87 million Baht for the fiscal year 2008
(October 1st, 2007 - September 30th, 2008), an increase of 2,509.46 million Baht, or 12.87% over the previous year
(October 1st, 2006-September 30th, 2007). Operating expenses totaled 18,515.89 million Baht, a rise of 511.21 million Baht, or 2.84% compared to the previous year while operating profit rose to 3,494.98 million Baht, a growth of 1,998.24 million Baht, or 133.51%. Net profit amounted to 7,321.05 million Baht, an increase of 6,231.29 million Baht, or 571.80%. Details are as follows: Operating Revenues Aeronautical Revenues AOT’s aeronautical revenues totaled 15,065.12 million Baht, accounting for 68.44% of total operating revenues. They increased 1,919.14 million Baht, or 14.60% over the previous year as a result of
the rising air traffic volume with an increase in air traffic volume, passengers, and cargo of 1.0, 4.1, and 5.7%, respectively. The aeronautical revenues included: - landing & parking charge of 4,216.35 million Baht, an increase of 278.95%, or 7.08% over the previous year. - passenger service charge of 10,417.01 million Baht, an increase of 1,635.54 million Baht, or 18.62% over
the previous year. - facilities service charge of 431.75 million Baht, an increase of 4.65 million Baht, or 1.09% from the previous year. Non - Aeronautical Revenues AOT’s non-aeronautical revenues amounted to 6,945.75 million Baht, accounting for 31.56% of the total operating revenues. They increased 590.32 million Baht, or 9.29% compared to the preceding year. The rise could be attributed to the growth in service-related revenues from limousine service, electricity,
apron parking service as well as revenues from Suvarnabhumi Airport Hotel. Other contributing factors included increased sharing revenues from sales of food and beverages, telecommunications, and other services. Operating Expenses Operating expenses grew 511.21 million Baht, or 2.84% from 18,004.68 million Baht in the 2007 fiscal year to 18,515.89 million Baht in 2008. The growth could be attributed to the following factors: - Personnel expenses totaled 3,909.00 million Baht, a rise of 981.16 million Baht, or 33.51%, a result of
the recruitment of new employees, the adjustment of salary and bonus, and compensation for the employees joining the early retirement program. - Operating expenses amounted to 5,100.31 million Baht, a drop of 629.82 million Baht, or 10.99%. The decrease could be partly attributed to the efficient collection of outstanding accounts, resulting in a decrease in suspected bad debt. Another contributing factor was a fall in outsourcing and advertising expenditures. - Maintenance expenses amounted to 683.96 million Baht, a decrease of 48.42 million Baht, or 6.61% due to
a drop in the repair expenses for luggage conveyor belts as well as runways and taxiways.
038 annual report 2008
- Payment for the use of state property totaled 955.73 million Baht, a rise of 109.41 million Baht, or 12.93%, which was proportional to AOT’s increased operating revenues. - Depreciation and assets amortization amounted to 7,866.89 million Baht, an increase of 98.88 million Baht, or 1.27% due to an increase of investment in assets. Other Revenues Other revenues grew 8,180.81 million Baht, chiefly attributable to the realized gain on compensation of 8,331.54 million Baht following the Civil Court’s orders despite a decrease of 150.73 million Baht in interest receivable. Other Expenses Other expenses were up 4,091.40 million Baht due to a loss on foreign exchange of 928.72 million Baht in 2008 compared to a gain of 2,804.54 million Baht in the year-ago period. Other expenses also included the realization of possible expenses on compensation pursuant to the Civil Court’s orders. Interest Payment Interest payment amounted to 2,569.80 million Baht, an increase of 172.63 million Baht, or 7.20% from the previous year, as a result of the additional foreign exchange contracts entered into with the financial institute on July 12th, 2007.
Analysis of Financial Status in 2007 and 2008
As at September 30th, 2008, the total assets of AOT and its subsidiaries amounted to 146,455.97 million Baht,
an increase of 2,988.99 million Baht, or 2.08% from the previous year. This could be attributed mainly to the receipt of the compensation pursuant to the Civil Court’s orders. Liabilities as at September 30th, 2008 totaled 70,147.58 million Baht, a decrease of 3,642.17 million Baht, or 4.94% due mainly to the transfer of advance concession revenues of 4,460.00 million Baht into compensation revenues following the Civil Court’s orders. Shareholders’ equity as at September 30th, 2008 totaled 76,308.39 million Baht, a rise of 6,631.16 million Baht, or 9.52% due to the improved operating results.
Liquidity
As at September 30th, 2008, AOT and its subsidiaries’ cash and cash equivalents amounted to 8,437.37 million Baht, a decrease of 1,794.02 million Baht, or 17.53% from the start of the fiscal year 2008 (October 1st, 2007).
Net cash from operating activities totaled 11,837.95 million while net cash used in investment activities amounted to 13,740.96 million Baht. Of which included investment in land, buildings, and equipment accounted for 5,666.37 million Baht and short-term and long-term investment accounted for 7,746.52 million Baht. Net cash from financing activities totaled 108.99 million Baht. 2,256.30 million of which was proceeds from long-term debts deducted debt repayment of 1,565.88 million Baht and dividend payment of 571.43 million Baht.
039
annual report 2008
Operating Results Regarding Service AOT operates 6 airports in Thailand, namely Suvarnabhumi Airport, Don Mueang International Airport,
Phuket International Airport, Chiang Mai International Airport, Hat Yai International Airport and Chiang Rai International Airport. In the fiscal year 2008, AOT’s airports provided service for 108 scheduled airlines including 98 mixed passenger-cargo carriers and 10 cargo carriers. Air traffic volume at six AOT airports totals 394,057 flights, or a 0.96% increase. This was comprised of 220,673 international flights, or a 2.52% increase and 173,384 domestic flights, or a 0.96% decrease. AOT airports handled 58,304,267 passengers, or an increase of 4.08%, 36,836,936 of which were international passengers and 21,467,331 of which were domestic passengers, an increase of 4.65% and 3.11% respectively. The total volume of cargo and postal parcels was 1,345,845 tons, or an increase of 6.65%. This consisted of 1,243,762 tons of international freight, or an increase of 7.54% and 102,083 tons of domestic freight, or a decrease of 3.18%. AOT’s overall volume of air traffic in the fiscal year 2008 has increased from that in the fiscal year 2007. The reason was
the increase in the number of inbound and outbound tourists, together with Thai people who traveled within the country. In addition, the air traffic volume of low cost carriers was rising. Nonetheless, there was still the presence of negative factors from the global financial situation affecting businesses and industries on
a grand scale, as well as the unresolved political crisis in the country resulting in the volume of air traffic not achieving its fullest potential.
Fiscal Year
Aircraft Movements (No. of Flights) Passenger Volume (No. of Persons) 2007 2008 % 2007 2008 % Suvarnabhumi + Don Mueang 307,244 311,435 1.36 45,123,945 46,932,118 4.01 267,555 256,118 - Suvarnabhumi -4.27 41,934,995 41,180,456 -1.80 39,689 - Don Mueang 55,317 39.38 3,188,950 5,751,662 80.36 38,368 Phuket 40,218 4.82 5,478,137 5,943,468 8.49 26,708 Chiang Mai 25,400 -4.90 3,370,690 3,276,309 -2.80 11,748 Hat Yai 10,270 -12.58 1,335,679 1,380,086 3.32 6,232 Chiang Rai 6,734 8.06 711,662 772,286 8.52 Total 390,300 394,057 0.96 56,020,113 58,304,267 4.08 Cargo and Postal Parcels Volume (Tons) 2007 2008 % Suvarnabhumi + Don Mueang 1,207,970 1,291,931 6.95 1,191,858 - Suvarnabhumi 1,259,685 5.69 16,112 - Don Mueang 32,246 100.14 17,498 Phuket 18,542 5.97 23,429 Chiang Mai 22,438 -4.23 10,141 Hat Yai 10,407 2.62 2,909 Chiang Rai 2,527 -13.13 Total 1,261,947 1,345,845 6.65
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annual report 2008
Suvarnabhumi Airport and Don Mueang International Airport
In the fiscal year 2008, Suvarnabhumi Airport and Don Mueang International Airport provided service for a total number of 311,435 flights, or an increase of 1.36% from that in the fiscal year 2007. The airports handled 46,932,118 passengers, an increase of 4.01%. The total volume of cargo and postal parcels was 1,291,931 tons, an increase of 6.95%. Suvarnabhumi Airport served 101 scheduled airlines including 91 mixed passenger-cargo carriers and 10
all-cargo carriers. The total number was 256,118 flights, 196,979 of which were international flights and 59,139 of which were domestic flights. The airport also handled 41,180,456 passengers, 34,025,340 of which were international passengers and 7,155,116 of which were domestic passengers. The total volume of cargo and postal parcels was 1,259,685 tons. This consisted of 1,234,413 tons of international freight and 25,272 tons of domestic freight.
Don Mueang International Airport provided service for 4 domestic scheduled airlines. The total volume of
flights was 55,317, consisting of 2,526 international flights and 52,791 domestic flights. The airport handled 5,751,662 passengers, 28,661 of which were international passengers and 5,723,001 of which were domestic passengers.
The total volume of cargo and postal parcels was 32,246 tons comprising 4,040 tons of international freight and 28,206 tons of domestic freight.
043
annual report 2008
Phuket International Airport
In the fiscal year 2008, Phuket International Airport served 28 scheduled airlines. The total volume of flights was 40,218, or an increase of 4.82%. This included 17,317 international flights, both scheduled and chartered, or
an increase of 6.64%. There were 22,901 domestic flights, or a 3.49% increase. The airport handled the total number of 5,943,468 passengers, or an increase of 8.49%. This was comprised of 2,411,625 international passengers and 3,531,843 domestic passengers or an increase of 17.36% and 3.18% respectively, both Thai and foreigners. The total volume of cargo and postal parcels was 18,542 tons, or an increase of 5.99%. This consisted of 4,932 tons of international freight, or an increase of 18.67% and 13,610 tons of domestic freight, or a slight increase of 2.04%.
Chiang Mai International Airport
In the fiscal year 2008, Chiang Mai International Airport provided service for 15 scheduled airlines. The total volume of flights was 25,400, or a 4.90% decrease. This was comprised of 3,621 international flights, or a 28.41% decrease and 21,779 domestic flights, or a 0.60% increase. The airport served 3,276,309 passengers, or a 2.80% decrease, 347,419 of which were international passengers and 2,928,890 of which were domestic passengers, or
a decrease of 0.99% and 3.01% respectively. The considerable drop in the volume of international air traffic was resulted from the reduction of scheduled flights operated by Bangkok Airways and China Airlines, together with
the cancellation of all flights operated by Tiger Airways. The total volume of cargo freight including goods and postal parcels was 22,438 tons, or a decrease of 4.23%. This was consisted of 337 tons of international freight, or an increase of 22.80% and 22,061 tons of domestic freight, or a decrease of 4.59%.
044
annual report 2008
Hat Yai International Airport
In the fiscal year 2008, Hat Yai International Airport handled 10,270 flights, or a 12.58% decrease and served 4 scheduled airlines. There were 215 international flights and 10,055 domestic flights, or a decrease of 78.39% and 6.49% respectively. The airport served 1,380,086 passengers, or a 3.32% increase, 23,667 of which were international passengers, a decrease of 74.99%. The decline in the number of tourists was attributed to the southern insurgency in Thailand. As regards domestic passengers, the number was 1,356,419, or a 9.29% increase. The total volume of cargo and postal parcels was 10,407 tons, or an increase of 2.62%, all of which were domestic freight.
Chiang Rai International Airport
In the fiscal year 2008, Chiang Rai International Airport provided service for 5 domestic scheduled airlines.
There were 6,734 flights, or an 8.06% increase, 15 non-scheduled international flights and 6,719 domestic flights,
an increase of 8.20%. The airport handled a total number of 772,286 passengers, an increase of 8.52%. This was comprised of 224 international passengers and 772,062 domestic passengers, or an increase of 8.50%. The majority of passengers traveled with low cost carriers between Bangkok and Chiang Rai. The total volume of cargo and postal parcels was 2,527 tons, or a decrease of 13.13%, all of which were domestic freight.
045
annual report 2008
Tonnes 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
046
annual report 2008
1999
2000 2001 International 2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers 1,585,236 12,874,283
1,702,173 12,422,370
46,932,118
45,123,945
32,472,599
30,999,402
29,276,672 42,360,678
26,622,474 38,889,229
1,824,206 11,259,800
1,766,191 10,500,564
25,086,445 1,763,794 36,364,006 9,513,767
2007
53,478
Cargo Volumes
1,238,453 1,291,931
1,152,044 1,207,970
1,137,605 1,198,120
1,061,744 1,119,433
978,336 1,029,568
20,999,349 1,518,052 29,674,852 7,157,451
22,284,375 1,676,669 31,205,692 7,244,648
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
55,926
60,515
57,689
51,232
47,361
2000 2001 International
894,315 941,676
881,858 930,770
21,067,561 30,985,938 1,886,113 7,492,264
20,101,314 29,054,259 1,770,184 7,182,761
2000 2001 International
48,912
48,739
1999
801,076 849,815
811,389 856,200
1999
44,811
41,531
Passengers 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 18,446,838 26,847,924 1,590,177 6,810,909 166,029
111,930
114,315
98,547
199,505
311,435
307,244
280,704
265,122
232,760
192,929
182,157
175,540
159,160
195,530
193,314
187,133
135,808
135,309
131,874
122,497 176,895
89,582
73,600
59,722
58,005
55,259
54,398
49,190
116,839
Movements 360,000 320,000 280,000 240,000 200,000 160,000 120,000 80,000 40,000 0
737,114 778,645
Air Traffic Statistics
Suvarnabhumi Airport and Don Mueang International Airport Aircraft Movements
2008 Fiscal Year
Number of Passengers
2008 Fiscal Year
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
Tonnes 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
1999
2000 2001 International
13,610
2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
18,542 13,460
16,733
3,529,165
2,400,843
3,422,439
2,038,965
5,943,468
5,478,137
1,519,959 4,467,982 25,890 2,922,133
1,065,607 3,472,652 49,387 2,357,658
2007
4,932
17,498 13,338
16,274 13,584
16,822 12,135
1,832,505 4,522,098 77,201 2,612,392
1,359,380 3,461,710 51,408 2,050,922
1,311,594 3,558,908 38,894 2,208,420
1,371,115 3,679,310 63,095 2,245,100
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
4,160
2,690
4,687
12,841
19,907
15,942 11,042
7,066
4,900
2000 2001 International
10,341
15,592
13,746
1,242,359 3,455,233 87,592 2,125,282
2000 2001 International
5,251
8,669
5,077
1999
16,433 11,215
1999
5,218
9,771
1,080,787 3,200,534 82,803 2,036,944
Passengers 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0
15,142
22,901
22,129 17,317
16,239
28,991
26,803
29,817
24,301
22,911
25,370
22,824
20,619
16,304
12,687
15,335
11,468
14,995
14,822
12,456
11,845
10,883
12,028
12,842
12,528
11,309
11,515
8,910
11,709
40,218
38,368
Movements 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
5,371
Phuket International Airport Aircraft Movements
2008 Fiscal Year
Number of Passengers
2008 Fiscal Year
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
annual report 2008
047
Tonnes 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
048
annual report 2008
1999
2000 2001 International 2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
22,438 22,061
329,149 18,376
323,438 27,565
295,672 34,407
195,613 59,049
186,980 68,258
149,025 43,666
3,276,309 2,928,784
3,370,690 3,019,687
3,078,156 2,748,077
3,011,917 2,757,255
2,663,990 2,408,752
2,001,541 1,808,850
2,078,923 1,938,948
2,248,786 2,123,198
2007
377
23,429 23,122
26,009 25,714
24,376 23,707
24,758 24,051
24,917 24,236
107,539 32,436
102,751 22,837
2,208,129 2,084,524
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
307
295
669
707
681
2000 2001 International
24,336 23,960
24,129 23,751
91,069 32,536
2000 2001 International
376
378
1999
21,945 21,598
2,111,595 2,019,510
1999
347
68,685 23,400
Passengers 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0
17,440 17,318
3,621
5,058
5,690
4,884
20,214
25,400 21,779
26,708
24,469
21,650
18,779
22,362 17,478
14,727
15,774
16,183 13,694
15,357 13,589
15,864 13,996
16,196 14,658
11,779 5,487
3,995
2,489
1,768
1,868
1,538
Movements 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
122
Chiang Mai International Airport Aircraft Movements
2008 Fiscal Year
Number of Passengers
2008 Fiscal Year
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
Hat Yai International Airport
1999
2000 2001 International
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
2007
10,270 10,055 215
11,748 10,753 995
9,350
10,532 9,272 1,260
1,252
1,782
7,784 6,532
5,590 3,976 1,614
4,413
4,513
8,926
10,815 4,748
6,067
9,982 4,798
5,184
8,492 4,176
4,316
Movements 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
11,132
Aircraft Movements
2008 Fiscal Year
1999
2000 2001 International
2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
1,380,086 1,356,068 22,162 1,856
1,335,679 1,240,569 94,454 656
1,293,268 1,157,247 134,180 1,841
1,287,477 1,137,544 147,046 2,887
1,009,640 907,820 93,723 8,097
97,162 5,720
718,621 615,739
761,499 627,605 128,387 5,507
824,186 668,635 147,853 7,698
873,649 665,094 200,729 7,826
215,262 6,262
Passengers 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
820,151 598,627
Number of Passengers
2008 Fiscal Year
1999
2000 2001 International
10,407 10,407 0
10,141 10,141 0
10,338 10,335 3
10,957 10,931 26
9,385 9,240 145
9,351 9,170 181
11,973 11,752 221
14,435 14,172 263
11,865 11,543 322
448
Tonnes 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
12,653 12,205
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
049
annual report 2008
Chiang Rai International Airport
1999
2000 2001 International
2002 2003 2004 2005 2006 Domestic Total Aircraft Movements
2007
6,734 6,719 15
6,232 6,210 22
5,659 5,646 13
4,927 4,913 14
4,869 4,845 24
3,710 3,695 15
4,852 4,844 8
4,800 4,798 2
5,343 5,008 0
0
Movements 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
4,311 3,885
Aircraft Movements
2008 Fiscal Year
2000 2001 International
2002 2003 2004 2005 2006 2007 Direct Transit Domestic Total Passengers
772,286 771,947 224 115
711,662 711,468 31 163
696,492 696,395 22 75
677,407 676,532 431 444
554,364 552,330 1,748 0
417,345 414,966
476,524 476,315
2,118 0
6
0
0
1999
209 0
556,677 556,671
575,565 560,152 13,250
19,186 0
Passengers 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
540,389 519,423
Number of Passengers
2008 Fiscal Year
1999
050 annual report 2008
2000 2001 International
2,527 2,527 0
0
0
0
2,909 2,909
4,698 4,698
5,070 5,070
4,879 4,879 0
4,238 4,238 0
5,075 5,075 0
4,097 4,097 0
4,264 4,231 0
0
Tonnes 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
2,920 2,913
Cargo Volumes
2002 2003 2004 2005 2006 2007 2008 Fiscal Year Domestic Cargo Volumes (Freight + Mail) Excluding Transit
AOT’s Air Traffic Statistics
Total Number of Passengers (No. of Passengers) Suvarnabhumi Don Mueang Phuket Chiang Mai Hat Yai Chiang Rai
Total Aircraft Movements Suvarnabhumi Don Mueang Phuket Chiang Mai Hat Yai Chiang Rai
256,118 55,317 40,218 25,400 10,270 6,734 394,057 (No. of Movements) 41,180,456 5,751,662 5,943,468 3,276,309 1,380,086 772,286 58,304,267
Cargo Volumes (Freight & Mail) Excluding Transit Suvarnabhumi Don Mueang Phuket Chiang Mai Hat Yai Chiang Rai
(Tonnes) 1,259,685 32,246 18,542 22,438 10,407 2,527 1,345,845
051
annual report 2008
Risk Management AOT Risk Management
AOT implemented a risk management system in the fiscal year 2003 and set up the AOT Risk Management Committee to specify AOT risk management policy and framework, analyze possible risks and their influence on AOT in order to manage risks properly, minimize damage to the organization as well as to follow changes in new risks likely to happen in the future in the changing environment. As for the fiscal year 2008, AOT’s risk factors can be briefly outlined as follows:
1. Risk from Impact of Noise Exposure
Compensation for those affected by noise exposure from airport operations through the purchasing of properties or the renovation of affected buildings was a new matter for the related parties since there were sensitive issues regarding techniques, finance and society. However, AOT has handled this matter with the utmost fairness to those involved according to the law and regulations. AOT realized that operations at Suvarnabhumi Airport may have set
a compensation standard regarding impact of noise exposure caused by the operations of other AOT airports.
AOT’s measures in the prevention and reduction of risk arising from the impact of noise exposure included rapid compensation by purchasing properties or renovating affected buildings, the establishment of understanding among the communities in the vicinity of the airports, the alteration of flight routes, etc. AOT would sell the purchased properties at a reasonable price within an appropriate time.
052 annual report 2008
2. Risk from Air Navigation Act, B.E. 2497, amended and added by Air Navigation Act (No.11) B.E. 2551
At present, it is required that the rate of airport maintenance costs be approved or specified by the Civil Aviation Board. Such rate comprises take-off and landing charges, parking charges and passenger service charge. The Air Navigation Act, B.E. 2497, amended and added by the Air Navigation Act (No.11) B.E. 2551, states that charges, compensation and other service charges (not only take-off and landing charges, parking charge and passenger service charge) be approved by the Civil Aviation Board. This Act may affect the flexibility in operation of AOT. AOT has closely followed and coordinated with the Department of Civil Aviation, which acts as the secretary of the Civil Aviation Board, to ensure that AOT operation is in compliance with the Act in order to reduce any possible impacts.
3. Risk from adjustment of compensation rate caused by the use of Don Mueang International Airport and regional airports on state property
The Treasury Department requires payment from AOT arising from the use of state property to operate
Don Mueang International Airport and Suvarnabhumi Airport at the rate of 5% of operating revenues including all expenses, and regional airports at the rate of 2% of operating revenues including all expenses. The Regulations of
the Ministry of Finance and the Royal Thai Air Force on the subject of the use of Crown Lands under the supervision of the Royal Thai Air Force and the Department of Aviation, B.E. 2545 states that the rate of compensation for
the use of Don Mueang International Airport and regional airports be adjusted according to the results of a study to be conducted by an advisor assigned by the Treasury Department after the opening of Suvarnabhumi Airport. The specification of the compensation rate is currently under negotiation with the Treasury Department for reasons of fairness towards AOT as regards its business operations, financial status and operating results.
4. Income and Income Structure Risk
Over half of AOT’s income derives from airport charges and passenger service charge, both of which depend heavily on the growth of airline and tourism business. If tourism is affected by any notable incidents, airport operations will be adversely affected. Moreover, considering the competitive environment, an increase in future income through adjustment of maintenance cost is far from possible.
053
annual report 2008
AOT reduced the impact caused by depending on aeronautical revenues by increasing income from
non-aeronautical revenues. Thus, AOT created money from the land occupied by the organization, such as
the approximately 1,000 Rai in Suvarnabhumi Airport which is reserved for commercial activities as well as any
other new services to be added for the airport.
5. Risk from the Continuous Impact of Oil Prices
The consecutive rises in the price of aircraft fuel affected airline business greatly, especially low cost carriers.
The soaring price of oil affected business as a whole, resulting in a decrease of passenger volume.
6. Risk from the Combined use of Don Mueang International Airport and Suvarnabhumi Airport
At present, Don Mueang International Airport serves low cost carriers operating point - to - point domestic flights. Nonetheless, with a rapid increase in the volume of both international and domestic air traffic, it is necessary to use Don Mueang International Airport to provide services for more airlines in a long term. This can be considered as making greater use of existing property. The combined use of Don Mueang International Airport and Suvarnabhumi Airport should be developed and operated in a collaborative manner, otherwise it may affect AOT’s ability to be a regional hub. AOT, hence, assigned the International Civil Aviation Organization (ICAO) to conduct a study of using both airports in terms of Bangkok Airport System and the development and management to be conducted should be concerned of all related parties interest. This can be explained in details as these: the nation’s interest to maintain Thailand as a leading regional hub; passengers convenience in using airport facilities, in traveling by domestic flights and in connecting to all destinations in the world; airlines interest; including benefits to AOT and its shareholders. The result of the study is scheduled to be completed around February 2009.
7. Risk from the Dispute with Bangkok Metropolitan Administration regarding the Calculation of House and Land Tax
The Bangkok Metropolitan Administration (BMA) has estimated the house and land tax by including the service providers interest as the base of the annual house and land calculation. However, AOT did not agreed and appealed to Office of the Attorney General every year since 1995. Office of the Attorney General sent a document stating the final ruling of the Ruling Committee to End Civil Cases against the Government Sections and Related Sectors regarding the estimation of tax from 1995 to 2004.
If the BMA accepts this final decision, AOT will receive a tax refund worth 570 million baht from the BMA.
054
annual report 2008
The BMA, however, did not approve the criteria used in estimating the tax as specified by the Ruling Committee appropriate. On October 2nd, 2006, the Treasury Department, as the landowner, sent a letter notifying AOT that
a letter had been sent to Office of the Attorney General to be passed on to the Cabinet to instruct the BMA to act accordingly. On May 28th, 2008, the BMA issued a letter requesting the Office of the Council of State to reconsider
the matter. The Office of the Council of State considered the facts. However, Office of the Attorney General had already sent the Ruling Committee’s final decision as well as the Cabinet resolution concerning the guidelines of
the proceeding of criminal, civil and administrative cases. The matter is considered settled. The Office of the Council of State, therefore, cannot take the matter into consideration. Nonetheless, if the BMA does not accept the decision, the issue can be taken to court.
055
annual report 2008
Shareholding and Management Structure
Shareholding Structure AOT has registered capital of 14,285,700,000 Baht, or a total of 1,428,570,000 ordinary shares, fully paid up and with a par value of 10 Baht each. Major Shareholders as of 27/02/2008 Airports of Thailand Public Company Limited (AOT) Total Number of Shares Percentage ofShares
No.
Name/Last Name
1 2 3 4 5 6 7 8 9
MINISTRY OF FINANCE 1,000,000,000 70.000 CHASE NOMINEES LIMITED 1 65,534,500 4.587 NORTRUST NOMINEES LTD. 60,272,590 4.219 STATE STREET BANK AND TRUST COMPANY FOR AUSTRALIA, 37,015,076 2.591 STATE STREET BANK AND TRUST COMPANY 33,062,686 2.314 HSBC (SINGAPORE) NOMINEES PTE LTD. 32,976,615 2.308 GOLDMAN SACHS INTERNATIONAL 18,557,800 1.299 THAI NVDR COMPANY LIMITED 13,497,677 0.945 DEUTSCHE BANK AG, LONDON PRIME BROKERAGE 10,706,100 0.749 THE BANK OF NY NOMINEES LTD SUB A/C MACQUARIE GBL 9,525,612 0.667 INFRASTRUCTURE FD 1,281,148,656 89.679
10
Number of of % Number % Shareholders Shares Thai shareholders Foreign shareholders Total
058 annual report 2008
10,717 101 10,818
99.07 1,085,691,544 0.93 342,878,456 100.00 1,428,570,000
76.00 24.00 100.00
The AOT Board of Directors as of September 30th, 2008
Consist of 14 directors as follow :
1. Mr. Vudhibhandhu Vichairatana (Age 60) Chairman and Independent Director Position Director-General, Bureau of the Budget Education • Master of Economics, University of Arkansas, U.S.A. • Bachelor of Economics, Stephen F. Austin State University, Texas, U.S.A. Training • National Defence College Class 38 • Director Accreditation Program Class 49/2005, Thai Institute of Directors (IOD) • The Role of Chairman Program Class 3/2001, Thai Institute of Directors (IOD) Work Experience 2004 - 2007 Director, TMB Bank Public Company Limited 2004 - 2006 Director, Thai Airways International Public Company Limited 2002 - Present Director-General, Bureau of the Budget 2001 - 2002 Deputy Director-General, Bureau of the Budget (Executive 10) 1999 - Present Director, PTT Exploration and Production Public Company Limited Experience Relevant to AOT Business • Expertise in economics, finance, and monetary • Expertise in development planning and strategies
2. Mr. Surachai Tansitpong (Age 59) Director Position Deputy Permanent Secretary,
Ministry of Transport Education • Master of Public Administration in Public and Private Management, National Institute of Development Administration (NIDA) • Bachelor of Business Administration (Construction Management), Sukhothai Thammathirat Open University • Bachelor of Engineering (Civil Engineering), Chulalongkorn University Training • National Defence Course,
National Defence College Class 15 • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) Work Experience 2006 - Present Deputy Permanent Secretary, Ministry of Transport 2006 - 2007 Chairman, the Transport Co.,Ltd 2002 - 2006 Director-General, Department of Rural Roads, Ministry of Transport (Executive 10) 2001 - 2002 Deputy Director-General, Department of Public Works, Ministry of Interior (Executive 9)
059 annual report 2008
Experience Relevant to AOT Business • Expertise in transport • Expertise in development planning and strategies • Expertise in engineering 3. Air Chief Marshal Raden Puengpak (Age 61) Independent Director Position Retired civil servant Education • Master of Management Business Administration
(Ex-MBA) Class 7, Kasetsart University • Bachelor of Science, Royal Thai Air Force Academy Training • National Defence College Class 39 • Royal Thai Air Force Air War College Class 26 • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) • Director Certification Program Class 107/2008, Thai Institute of Directors (IOD) Work Experience 2005 - 2007 Deputy Supreme Commander 2002 - 2005 Assistant Commander-in-Chief 2000 - 2001 Commander, Air Combat Command Experience Relevant to AOT Business • Expertise in aviation • Expertise in management and business administration
060 annual report 2008
4. Mr. Chaisak Angkasuwan (Age 58) Director Position Director-General, Department of Civil Aviation Education • Master of Public Administration in Public and Private Management, National Institute of Development Administration (NIDA) • Bachelor of Law, Thammasat University Training • National Defence Course,
National Defence College Class 4414 • Director Accreditation Program Class 51/2006, Thai Institute of Directors (IOD) • The Role of Chairman Program Class 13/2006, Thai Institute of Directors (IOD) Work Experience 2005 - Present Chairman, the Board of Directors, Aeronautical Radio of Thailand Ltd. 2004 - Present Director-General, Department of
Civil Aviation 2003 - 2004 Deputy Director (for Economics), Department of Civil Aviation 2002 - 2003 Deputy Director (for Academics), Department of Civil Aviation Experience Relevant to AOT Business • Expertise in air transport and aviation-related legislation • Expertise in airport management
5. Mr. Utid Tamwatin (Age 58) Director Position Deputy Permanent Secretary, Ministry of Finance Education • LL.M, University of California, Berkeley, U.S.A. • Barrister at Law, The Thai Bar Association • Bachelor’s of Law (Hons), Thammasat University Training • National Defence Course, National Defence College Class 399 • Director Certification Program Class 3/2000, Thai Institute of Directors (IOD) Work Experience 2008 - Present Chairman, Eastern Water Resources Management and Development Public Company Limited 2006 - Present Deputy Permanent Secretary for Expenditure and Liability, Office of the Permanent Secretary, Ministry of Finance 2004 - 2006 Director-General, the Excise Department, Ministry of Finance 2003 - Present Director, Sukhumvit Asset Management Co.,Ltd 2002 - 2006 Deputy Permanent Secretary for Revenue, Office of the Permanent Secretary, Ministry of Finance Experience Relevant to AOT Business • Expertise in law • Expertise in monetary and finance
6. Mr. Vinai Vittavasgarnvej (Age 58) Director Position Inspector-General, Ministry of Finance Education • Master of Political Science (Public Administration), Thammasat University • Bachelor of Accounting (Accounting), Thammasat University Training • National Defence College Class 47 • Director Certification Program Class 77/2006, Thai Institute of Directors (IOD) Work Experience 2008 - Present Inspector-General, Ministry of finance 2005 - Present Director, Erawan Hotel Public Company Limited 2005 - 2008 Principal Advisor on Tax Base Management, The Revenue Department 2003 - 2005 Deputy Director-General, The Revenue Department Experience Relevant to AOT Business • Expertise in excise
061
annual report 2008
7. Mr. Pongsak Semson (Age 57) Independent Director Position Permanent Secretary for Bangkok Metropolitan Administration Education • Ph.D. in Political Science (Majoring in Political Theory and Thai Government, International Relations, Administrative Laws, Public Policy, and Public Administration), Chulalongkorn University • Master of Management Business Administration, Nation Institute of Development Administration (NIDA) • Master of Political Science, Thammasat University • Bachelor of Political Science, Chiang Mai University Training • National Defence Course, National Defence College Class 4212 • Audit committee Program Class 22/2008, Thai Institute of Directors (IOD) Work Experience 2006 - Present Permanent Secretary, the Bangkok Metropolitan Administration 2002 - 2006 Director-General, Department of
Civil Aviation 2000 - 2002 Director, Department of Policy and Planning, Bangkok Metropolitan Administration 1998 - 2000 Chief Inspector-General, Office of the Permanent Secretary for the Bangkok Metropolitan Administration
062 annual report 2008
Experience Relevant to AOT Business • Expertise in management and business administration 8. Police General Sombat Amornvivat (Age 62) Independent Director Position Advisor to Minister of Justice Education • Master of Public Administration, National Institute of Development Administration (NIDA) Training • National Defence College Class 34 • Federal Bureau of Investigation (FBI), U.S.A. • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) • Director Certification Program Class 107/2008, Thai Institute of Directors (IOD) Work Experience 2008 - Present Advisor to Minister of Justice 2007 - 2008 Deputy Director-General (Security), the National Police Bureau 2004 - 2006 Director-General, Department of Special Investigation, Ministry of Justice 2001 - 2004 Deputy Director-General,
the National Police Bureau Experience Relevant to AOT Business • Expertise in security
9. Air Chief Marshal Sumet Photimanee (Age 59) Independent Director Position Chief, Executive Staff Officers to Minister of Defence Education • Bachelor of Science, Royal Thai Air Force Academy Training • National Defence Course,
National Defence College Class 48 • Air Command and General Staff College (Class 30) • Training on RADAR Equipment, U.K. Work Experience 2008 - Present Chief, Executive Staff Officers to Minister of Defence 2006 - 2007 Director, RTAF Education 2005 - 2006 Commander, RTAF Security Forces Command 2002 - 2005 Commander, Don Mueang RTAF Base Experience Relevant to AOT Business • Expertise in aviation • Expertise in management
10. Mr. Arkhom Termpittayapaisith (Age 52) Director Position Deputy Secretary-General, National Economic and Social Development Board Education • Master of Economics, Williams College, U.S.A. • Bachelor of Economics, Thammasat University Training • National Defence College Class 46
• Senior Executive Program Class 35, Office of the Civil Service Commission • Director Accreditation Program Class 51/2005, Thai Institute of Directors (IOD) • Director Certification Program Class 97/2007, Thai Institute of Directors (IOD) • Audit Committee Program Class 22/2008, Thai Institute of Directors (IOD) Work Experience 2008 - Present Director, CAT Telecom Public Company Limited 2005- 2006 Director, TOT Public Company Limited 2004 - Present Deputy Secretary-General, National Economic and Social Development Board 2003 - 2004 Advisor in Policy and Plan Experience Relevant to AOT Business • Expertise in economics, monetary, and finance • Expertise in transport and communications • Expertise in development planning and strategies
063
annual report 2008
Work Experience 11. Mr. Chulasingh Vasantasingh (Age 58) 2005 - Present Deputy Attorney General,
Independent Director Office of the Attorney General Position Deputy Attorney General,
2005 Inspector-General,
Office of the Attorney General Office of the Attorney General Education 2004 - Present Director, Ratchaburi Electricity • Master of Comparative Law (MCL),
Generating Holding Public Company University of Illinois, U.S.A. Limited • Barrister at Law, the Institution of Legal Education 2004 - 2005 Director-General, Department of the of Thai Bar Association Legal Counsel, Office of the Attorney • Bachelor of Law (Hons), Chulalongkorn University General Training 1998 - Present Director, Petroleum Exploration and • National Defence College Class 388 Production Public Company Limited • Director Certification Program Class 35/2003,
Experience Relevant to AOT Business Thai Institute of Directors (IOD) • Expertise in law • Audit Committee Program Class 17/2007,
• Expertise in transport and communications Thai Institute of Directors (IOD) • Expertise in management and business administration
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12. Mr. Thaworn Phanichaphan (Age 58) Independent Director Position Deputy Attorney General,
Office of the Attorney General Education • Master of Law, Chulalongkorn University • Barrister at Law, the Institution of Legal Education of Thai Bar Association • Bachelor of Law (Hons), Chulalongkorn University Training • National Defence Course,
National Defence College Class 4313 • Director Accreditation Program Class 73/2008, Thai Institute of Directors (IOD) • Audit Committee Program Class 22/2008,
Thai Institute of Directors (IOD) • Director Certification Program Class 108/2008, Thai Institute of Directors (IOD) Work Experience 2007 - Present Deputy Attorney General,
Office of the Attorney General 2006 - 2008 Director, Thailand Post Co.,Ltd 2005 - 2006 Director-General, Department of Legal Counsel, Office of the Attorney General 2003 - 2005 Director-General, Department of Narcotics Litigation, Office of
the Attorney General
Experience Relevant to AOT Business • Expertise in Law • Expertise in management and business administration 13. Flight Lieutenant Usar Borisuth (Age 63) Independent Director Position President, Tubusa Resort & Dragon Fruit Garden Education • Master of Political Science (Public Administration), Thammasat University • Bachelor of Science, Royal Thai Air Force Academy Training • Director Accreditation Program Class 59/2006, Thai Institute of Directors (IOD) Work Experience 2005 - 2006 Director, Airports of Thailand Public Company Limited 2004 - 2005 Director, Mass Rapid Transit Authority of Thailand 1999 - 2001 Deputy Managing Director (Administration)
Airports Authority of Thailand Experience Relevant to AOT Business • Expertise in airport management
065 annual report 2008
14. Mr. Apichart Sayasit (Age 42) Independent Director Position Managing Director, Baker Tilly Audit and Advisory Services (Thailand) Ltd. Education • Master of Business Administration (Finance), Thammasat University • Bachelor of Accounting, Thammasat University Training • Director Accreditation Program Class 72/2008, Thai Institute of Directors (IOD) • Audit Committee Program Class 22/2008,
Thai Institute of Directors (IOD) • Director Certification Program Class 108/2008, Thai Institute of Directors (IOD)
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annual report 2008
Work Experience 2007 - Present Managing Director, Baker Tilly Audit and Advisory Services (Thailand) Ltd. 2006 - 2007 Executive Director, M.R. & Associate Company Limited 2004 - 2005 Vice President, Horwath (Thailand) Limited Experience Relevant to AOT Business • Expertise in accounting and finance • Expertise in management and business administration
AOT Management Team as of 30 September, 2008
1. Mr. Serirat Prasutanond (Age 57) 2. Mrs. Kulya Pakakrong (Age 58) Position General manager of Suvarnabhumi Airport Position Senior Executive Vice President
and Acting President (Planning and Finance) Education Education • Master of Business Administration,
• Master of Development Administration, National Kasetsart University Institute of Development Administration (NIDA) • Master of Science, Mahidol University • Bachelor of Accouunting, Thammasat University • Master of Development Administration, National Training Institute of Development Administration (NIDA) • Investor Relations Program, the Stock Exchange
• Bachelor of Economics, Thammasat University of Thailand Training • Chief Financial Officer Certification Program • Information System for Senior Executives • Competitiveness: Challenges and Opportunities for • Development of Good Corporate Governance Asian Countries • IT for Management of a Modern Airport • Foreign Exchange, Derivatives, and Equity Market • Public Administration and Law • Director Accreditation Program Class 64/2007, • Politics and Government in the Democratic System Thai Institute of Directors (IOD) for Senior Executives Work Experience Work Experience 2006 - Present Senior Executive Vice President, 2008 - Present General Manager of Suvarnabhumi Planning and Finance Airport and Acting President and Acting President 2007 - 2008 General Manager of Suvarnabhumi (2 February - 7 October 2008) Airport 2002 - 2006 Executive Vice President, Planning 2005 - 2007 Senior Executive Vice President, and Finance (Regional Operations) 2001 - 2002 Assistant Managing Director 2002 - 2005 Executive Vice President
(Planning and Finance) (Special Affairs) 1996 - 2001 Vice president, Planning and Finance Department
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3. Mr. Saneh Chausurin (Age 55) Position Senior Executive Vice President (Administration) Education • Master of Business Administration, National Institute of Development Administration (NIDA) • Bachelor of Political Science,
Chulalongkorn University Training • IT for Management of a Modern Airport • Politics and Government in the Democratic System for Senior Executives, King Prajadhipok’s Institute • Information System for Senior Executives • Development of Good Corporate Governance
068 annual report 2008
Work Experience 2006 - Present Senior Executive Vice President (Administration) 2005 - 2006 Senior Executive Vice President and Acting Deputy General Manager of Suvarnabhumi Airport (Business Development) 2002 - 2005 Senior Specialist 11 and Acting Deputy General Manager of Suvarnabhumi Airport (Business Development) 2002 - 2005 Executive Vice President (Administration)
4. Mr. Niranda Theeranartsin (Age 57) 5. Mr. Surajit Surapolchai (Age 60) Position Senior Executive Vice President
Position Senior Executive Vice President (Business Development) (Engineering and Information Technology) Education Education • Diploma in Human Resource Management, Sasin • Bachelor of Business Administration, Sukhothai Graduate Institute of Business Administration of Thammathirat Open University Chulalongkorn University • Bachelor of Engineering, Chulalongkorn University • Bachelor of Political Science (Personnel Training Management), Chulalongkorn University • Knowledge Development on Business Training Administration and Business Law • Corporate Plan for AOT Senior Executives • The Zuyder Zee Project • Leadership/Team Development Seminar • Aerial Photography • Maintenance and Troubleshooting of Airfield • Design and Coust on Soft Clay Lighting System Training program, Belgium Work Experience Work Experience 2008 - Present Senior Executive Vice President 2008 - Present Senior Executive Vice President (Engineering and Information (Business Development) Technology) 2004- 2008 Executive Vice President 2007 - 2008 Senior Specialist 11 (Administration) 2004 - 2007 Deputy Project Director for Project 1998 - 2004 Vice President, Administration Director, New Bangkok International Department Airport Co.,Ltd
069 annual report 2008
6. Flight Lieutenant Viwat Smarnrug (Age 60) 7. Mrs. Supaporn Burapakusolsri (Age 55) Position Senior Executive Vice President
Position Executive Vice President
(Regional Airports) (Planning and Finance) Education Education • Bachelor of Science, Royal Thai Air Force Academy • Master of Accounting, Thammasat University • Bachelor of Accounting (Hons.),
Training Thammasat University • Development of Good Corporate Governance • Media Training Program Training • IT for Management of a Modern Airport • Financial and Budget Management • Knowledge Development on Business • Mini MBA Class 1 Administration and Business Law • Airport Management Commercial, Singapore • Strategic Airport Development, Germany Work Experience 2007 - Present Senior Executive Vice President Work Experience (Regional Airports) 2006 - Present Executive Vice President 2004 - 2007 Deputy General Manager of (Planning and Finance) Don Mueang International Airport 2005 - 2006 Senior Specialist 10 (Administration) 1994 - 2005 Vice President, Finance Department 2001 - 2004 Vice President, Electrical and Mechanical Department 1997 - 2001 General Manager of Chiang Mai International Airport
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Management
The Structure of the AOT Board of Directors
The AOT Board of Directors comprises 15 directors which is of an appropriate number to the company’s business. The Board established sub-committees, namely the Audit Committee, the Nomination Committee, the Remuneration Committee, the Good Governance Committee, and the Risk Management Committee to be responsible for specific areas in accordance with AOT’s Regulations. with the President being the company’s top executive.
The AOT Board of Directors
For the fiscal year 2008, the AOT Board of Directors comprises 15 directors which include the Chairman, who is an independent director, and the other 9 independent directors which exceeds the minimum number of 3 required by AOT regulations. The Board’s members must be experienced in diverse fields suitable for AOT business and at least one of this number must be expert in accounting and finance. They are as follows: No. 1 2 3 4 5 6 7 8 9
Name
Position Directorship Commencement Date th Mr. Vudhibhandhu Vichairatana Chairman (Independent Director) March 14 , 2008 March 14th, 2008 Mr. Surachai Tansitpong Director (replacing General Saprang Kalayanamitra) 14th, 2008 Air Chief Marshal Raden Puengpak Independent Director March (replacing Air Chief Marshal Ittaporn Subhawong) March 14th, 2008
Mr. Chaisak Angkasuwan Director (replacing Mr. Maitree Srinarawat) March 14th, 2008
Mr. Utid Tamwatin Director (replacing Mrs. Danucha Yindeepit) March 14th, 2008 14th, 2008
Mr. Pongsak Semson Independent Director March (replacing Mr. Chirmsak Pinthong) 14th, 2008
Police General Sombat Amornvivat Independent Director March (replacing Mr. Supot Sublom) 14th, 2008
Air Chief Marshal Sumet Photimanee Independent Director March (replacing Air Chief Marshal Narongsak Sangapong) Mr. Vinai Vittavasgarnvej
Director
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No.
Name
Position
10
Mr. Arkhom Termpittayapaisith
Director
11
Mr. Chulasingh Vasantasingh
Independent Director
12
Mr. Thaworn Phanichphan
Independent Director
13
Flight Lieutenant Usar Borisuth
Independent Director
14
Mr. Apichart Sayasit
Independent Director and Secretary 15 Air Marshal Chana U-Sathaporn Director (President)
Directorship Commencement Date March 14th, 2008 March 14th, 2008 (replacing Mr. Kampree Kaocharern) January 25th, 2008 March 14th, 2008 (replacing Mr. Yodyiam Teptaranon) March 14th, 2008 (replacing Mr. Nonthaphon Nimsomboon Commenced directorship on November 5th, 2007 and resigned on August 5th, 2008
Remarks - No.1-11 were elected by the resolution of the Annual Extraordinary Meeting of Shareholders 1/2008 on March 14th, 2008. - No.11 resigned the AOT directorship on September 19th, 2008. - No.12 was elected by the Annual Ordinary Meeting of Shareholders 2007 on January 25th, 2008. - No.14 was appointed to the Audit Committee as an accounting and financial expert.
All new directors will be provided with important information essential for the directors’ performance of duty as well as briefing on the overview of AOT business character. The AOT Board performs their duties responsibly and independently. There is a clear division of the roles and
a healthy balance of authority between the Chairman of AOT Board and the President of AOT as follows:
1. Authority of the AOT Board
The AOT Board has the authority and duty to conduct AOT business in compliance with the law, objectives, regulations, and the shareholders’ resolutions in an honest, moral and ethical manner as well as to safeguard the best interests of AOT and its shareholders.
2. Authority of the AOT President
The President shall manage AOT as assigned by the Board and in accordance with the corporate plan and budget approved by the Board. The President shall perform with honesty and integrity along with ensuring the best interests of AOT and shareholders. The President’s authority shall include the matters as follows:
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(1) Operate and/or manage day-to-day business. (2) Employ, appoint, remove, transfer, promote, demote, dock pay or wages, impose disciplinary action, and dismiss employees according to AOT regulations except for employees at executive level or equivalent which requires a prior approval from the Board of Directors. (3) Work out and submit AOT’s business policy, plan, and budget for the Board’s approval as well as keeping the Board informed of the progress in implementing the approved plan and budget on a regular basis.
3. The Board of Directors has appointed sub-committees in accordance with AOT’s Regulations to assist in their work as follows: 3.1 The Audit Committee The Audit Committee consists of a minimum of 3 directors with at least 1 director who possesses financial and accounting knowledge and held 10 meetings during the year. The members are as follows: Name (1) Mr. Thaworn Phanichaphan (2) Mr. Pongsak Semson (3) Mr. Arkhom Termpittayapaisith (4) Mr. Apichart Sayasit
Position Chairman (Independent Director) Member (Independent Director) Member Member (Independent Director)
Remarks: - No.3 has been re-elected to AOT Board for another term and previously served as a member of the Audit Committee. He was re-appointed for an additional term to continue the work of good auditing and monitoring. - No.4 possesses financial and accounting knowledge with experience in auditing financial statements of many leading companies such as Unique Real Estate and Development Co.,Ltd, United Flour Mill Public Company Limited, Thai Setakij Insurance Public Company Limited, etc.
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Scope of Duties and Responsibilities
(1) Ensure that the financial report contains accurate and sufficient information. (2) Ensure that AOT has an appropriate and efficient internal control system, risk management system, and internal audit system. (3) Review and ensure that AOT is in full compliance with the Securities and Exchange Act B.E. 2535 and the amendment to the Regulations of the Stock Exchange of Thailand and other laws relating to
the company’s business. (4) Consider, select, and propose the appointment and remuneration of an AOT auditor if necessary apart from the auditor from the Auditor General Office. (5) Consider the disclosure of AOT information in case there is a connected transaction or item that may lead to conflicts of interest to ensure accuracy and completeness. (6) Prepare reports on the Audit Committee’s supervision and disclose them in the AOT annual report which shall be duly signed by the Chairman of the Audit Committee. (7) Perform any other duties as assigned by the Board of Directors with consent from the Audit Committee. To that effect, the Audit Committee Charter shall be drawn up and submitted to the Board of Directors for approval. 3.2 The Nomination Committee The Nomination Committee consists of a minimum of 3 directors with at least 1 being an independent director and held 3 meetings during the year. The members are as follows: Name (1) Air Chief Marshal Raden Puengpak (2) Mr. Chaisak Angkasuwan (3) Mr. Utid Tamwatin (4) Flight Lieutenant Usar Borisuth
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annual report 2008
Position Chairman (Independent Director) Member Member Member (Independent Director)
Scope of Duties and Responsibilities
The Nomination Committee is responsible for selecting and proposing suitable persons to be nominated as new directors to the Board of Directors and at the shareholder’s meeting for ultimate approval. Selection method of Committee’s members must be performed under transparent criteria as stipulated by
the relevant law and the Announcement of the Ministry of Finance.
3.3 The Remuneration Committee The Remuneration Committee consists of a minimum of 3 directors with at least 1 being an independent director and held 2 meetings during the year. The members are as follows: Name (1) Mr. Utid Tamwatin (2) Air Chief Marshal Sumet Photimanee (3) Mr. Arkhom Termpittayapaisith (4) Mr. Thaworn Phanichaphan
Position Chairman Member (Independent Director) Member Member (Independent Director)
Scope of Duties and Responsibilities
(1) Consider the guidelines for determining the appropriate remuneration for the Board of Directors and the President of AOT. (2) Consider the criteria or procedures for determining the fair and reasonable remuneration and benefits for the Board of Directors and the President of AOT and submit to the Board for proposing at
the shareholdermeetings for approval. (3) Consider criteria or procedures for determining the remuneration for the outsiders who are appointed to be members of committees, sub-committees, and working groups and propose them to the Board for approval.
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annual report 2008
3.4 The Good Governance Committee The Corporate Governance Committee consists of a minimum of 3 directors with at least 1 being an independent director and held 6 meetings during the year. The members are as follows: Name (1) Police General Sombat Amornvivat (2) Mr. Pongsak Semson (3) Air Chief Marshal Sumet Photimanee (4) Mr. Thaworn Phanichaphan Scope of Duties and Responsibilities
Position Chairman (Independent Director) Member (Independent Director) Member (Independent Director) Member (Independent Director)
(1) Set out guidelines and direction on AOT’s corporate governance affairs and ensure that all departments implement and practice them accordingly. (2) Improve AOT’s Code of Conduct to encompass the Stock Exchange of Thailand’s Best Practices in Corporate Governance. (3) Oversee the Board and the Management to ensure they perform their duties in accordance with
the best practices in corporate governance. (4) Recommend approaches to good governance to the Board of Directors.
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3.5 The Risk Management Committee The Risk Management Committee consists of a minimum of 3 directors, with 1 meeting held during the year.
The members are as follows: Name (1) Mr. Surachai Tansitpong (2) Mr. Chaisak Angkasuwan (3) Mr. Vinai Vittavasgarnvej (4) Mr. Arkhom Termpittayapaisith
Position Chairman Member Member Member
Scope of Duties and Responsibilities
(1) Set out AOT’s risk management policy and framework. (2) Oversee and support to ensure the success of the risk management at the corporate level. (3) Propose measures to effectively prevent and limit risks at an acceptable level. (4) Follow up, evaluate, and improve the operation plans to mitigate risks continuously and appropriately to the business circumstances.
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4. Selection Criteria for Independent Directors and Nomination Procedures
4.1 Selection Criteria for Independent Directors AOT prescribes that the company’s Board of Directors shall consist of at least one third of independent directors. The company imposes a stricter qualification requirement for independent directors than those stipulated by
the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) as follows: (1) Independent directors must not hold more than 1% of the total voting shares of AOT, affiliated or associated companies or legal entities which may have conflicts of interest. (2) Independent directors must not be involved in any management and not be an employee or an advisor with a monthly salary, auditing consultant, legal consultant or other type of advisor. Nor are they the persons with controlling authority over AOT, affiliated and associated companies or legal entities with conflicts of interest. They must not have benefits or stakes in such manner for at least 2 years. (3) Independent directors must not have any business relationships with the company as customers, trading partners, trade creditors/debtors, and financial creditors/debtors. They must not have direct or indirect benefits in
the finance and management of AOT, affiliated and associated companies, or legal entities with conflicts of interest that may impair their independence in performance of their duties. 4) Independent directors should not be relatives or have a relationship, which may impede the independency of the management and major shareholders of AOT, affiliated and associated companies or legal entities, which may have conflicts of interest. Nor should they be appointed to represent or protect the benefits of any director or major shareholder. 4.2 Nomination Procedures for Independent Directors In nominating a new director, AOT gives first priority to selecting a qualified candidate to fill the position of
an independent director so that the structure of the Board is in tune with the good governance principles. This will facilitate the performance of the Board, ensuring the effectiveness of the management and balancing the power in safeguarding the benefits of shareholders and stakeholders. AOT ensures that the Board shall consist at least
3 independent directors as stipulated in AOT’s Regulations. The qualification of each director will be checked during
the year. If his/her qualification matches the requirement for an independent director, he/she will be considered
an independent director.
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annual report 2008
4.3 Self-assessment of the Board of Directors The Board shall conduct self - assessment, which allows the directors to review their performance and problems. The results of the review shall be analyzed for further improvement. 4.4 Enhancement of Committee Members and Managements The Board of Directors encourages and facilitates the development for committee members. The Audit Committee members and top executives were encouraged to attend the course for directors of listed companies and the course for auditors organized by the Thai Institute of Directors Association. AOT also encouraged the corporate secretary to attend the training course for corporate secretaries so he/she is fully aware of his/her roles and duties as stipulated by the law. Moreover, AOT invited a legal expert from Baker & Mckenzie Co.,Ltd. to brief the Board and
the Managements on the new Securities and Exchange Act (No.4) B.E. 2551, which defines the roles and responsibilities of directors and managements of listed companies. 4.5 Corporate Secretary The Securities and Exchange Act (No.4) B.E. 2551, Section 89/15 stipulates that the Board of Directors shall appoint a corporate secretary to coordinate tasks on behalf of the company or the Board. For the fiscal year 2008 from August 1st, 2007 to August 7th, 2008, the Board of Directors appointed Miss Suwannee Sumrongwatana
the Corporate Secretary. From August 8th, 2008 onwards, Flying Officer Pearl Rugsamruad was appointed
the Corporate Secretary in place of Miss Suwannee Sumrongwatana, who was promoted to Deputy General Manager of Suvarnabhumi Airport (Administration).
5. The Number of AOT Shares Held by the Board of Directors and the Board Meeting Attendance Record 2008
The Board of Directors holds a scheduled meeting once a month on every third Thursday except when there are urgent matters. Prior to each meeting, AOT will send supporting documents to the directors well in advance to allow sufficient time for proper review. The minutes of each meeting will be recorded in writing and the approved minutes signed by the Board will be filed for reference. As of September 30th, 2008, the number of AOT shares held by
the Board of Directors and the Board meeting attendance record are as follows:
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annual report 2008
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Name
Position
Mr. Vudhibhandhu Vichairatana Mr. Surachai Tansitpong Air Chief Marshal Raden Puengpak Mr. Chaisak Angkasuwan Mr. Utid Tamwatin Mr. Vinai Vittavasgarnvej Mr. Pongsak Semson Police General Sombat Amornvivat Air Chief Marshal Sumet Photimanee Mr. Arkhom Termpittayapaisith Mr. Chulasingh Vasantasingh Mr. Thaworn Phanichaphan Flight Lieutenant Usar Borisuth Mr. Apichart Sayasit Air Marshal Chana U-Sathaporn
Chairman (Independent Director) Director Independent Director Director Director Director Independent Director Independent Director Independent Director Director Independent Director Independent Director Independent Director Independent Director Director and Secretary (President)
Number of Meeting Shares Held Asthof Attendance Record September 30 , Total 14 Times 2008
Remarks - Number 11 resigned his directorship on September 19th, 2008. - Number 15 resigned his directorship and the position of secretary as well as President on August 5th, 2008.
080 annual report 2008
- - - - - - - - - - - - - - -
14/14 8/14 13/14 10/14 9/14 11/14 8/14 9/14 13/14 12/14 12/14 11/14 14/14 10/14 9/9
6. Remuneration for Directors and AOT Executives
The Remuneration Committee is responsible for reviewing AOT’s policy for the directors and special committee members to ensure it is both appropriate and comparable to other companies in the same industries. The Ordinary General Shareholders’ Meeting of 2007 on January 25th, 2008 approved of the remuneration for the directors and special committee members for the fiscal year 2008 as follows: 6.1 Remuneration for the Directors (1) A monthly remuneration of 20,000 Baht per person. Where the director was appointed during the month, the remuneration shall be paid in proportion to the number of days worked in that month. (2) An attendance fee of 15,000 Baht per meeting. Should there be more than one meeting in a certain month, the attendance fee shall be paid only once. (3) Each Audit Committee member receives 20,000 Baht per month despite no meeting in that month. The Audit Committee member who was appointed during the month shall receive the pay in proportion to the number of days worked. (4) The directors appointed by the Board to be a member of committee, sub-committee, or working group shall receive 10,000 Baht per meeting. However, the total pay received by each member shall not exceed 20,000 Baht per month excluding the remuneration for the Audit Committee members. (5) Chairman and Deputy Chairman of each committee shall receive an additional remuneration of 25% and 12.5%, respectively. (6) The remuneration and attendance fees for AOT Board of Directors for the fiscal year 2008 were set at no more than 15,000,000 Baht. According to AOT’s Regulations, only the details of remuneration for the directors and special committee members of the Audit Committee, the Nomination Committee, the Remuneration Committee, the Good Governance Committee, and the Risk Management Committee shall be reported.
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annual report 2008
6.2 Remuneration for the Board of Directors and Special Committees in 2008 Unit : Baht
No
Name
Good Risk Board of Audit Nomination Remuneration Governance Management Directors Committee Committee Committee Committee Committee
Total
2
Mr. Vudhibhandhu Vichairatana 293,669.36 293,669.36 Mr. Surachai Tansitpong 221,612.90 12,500.00 234,112.90
3
Air Chief Marshal Raden Puengpak 236,612.90
4
7
Mr. Chaisak Angkasuwan Mr. Utid Tamwatin Mr. Vinai Vittavasgarnvej Mr. Pongsak Semson
221,612.90 113,333.33
10,000.00
344,946.23
8
Police General Sombat Amornvivat 236,612.90
12,500.00
249,112.90
9
Air Chief Marshal Sumet Photimanee 236,612.90
236,612.90
10
Mr. Arkhom Termpittayapaisith Mr. Chulasingh Vasantasingh Mr. Thaworn Phanichaphan Flight Lieutenant Usar Borisuth Mr. Apichart Sayasit Air Marshal Chana U-Sathaporn
236,612.90 202,298.85
438,911.75
213,612.90
213,612.90
269,516.13 141,666.67
10,000.00
421,182.80
236,612.90
236,612.90
221,612.90 113,333.33
334,946.23
329,913.98
329,913.98
1
5 6
11 12 13 14 15
236,612.90 221,612.90 250,094.55
Remarks: - No.11 resigned his directorship on September 19th, 2008. - No.15 resigned his directorship and the positions of Secretary and President on August 5th, 2008.
082 annual report 2008
236,612.90 10,000.00 246,612.90 221,612.90 10,000.00 260,094.55
6.3 Remuneration for Directors Resigning During the Year (October 2007 – January 2008) Unit : Baht
No
Name
Good Risk Board of Audit Nomination Remuneration Governance Management Directors Committee Committee Committee Committee Committee
Total
1
General Saprang Kalayanamitra 229,956.90
235,200.00 465,156.90
2
Air Chief Marshal Narongsak Sangapong 206,961.21
238,500.00 465,461.21
3
7
Mr. Chavalit Sethameteekul 156,838.71 25,000.00 210,825.00 392,663.71 Mr. Kampree Kaocharem 183,965.52 88,965.52 25,000.00 22,500.00 189,000.00 509,431.04 Mr. Vudhibhandhu Vichairatana 153,965.52 216,000.00 369,965.52 Mr. Chaisak Angkasuwan 145,483.87 216,000.00 361,483.87 Mr. Arkhom Termpittayapaisith 156,724.14 30,000.00 216,000.00 402,724.14
8
Air Chief Marshal Ittapom Subhawong 153,965.52
4 5 6
Mr. Nonthaphon Nimsomboon 10 Mr. Tortrakul Yomnak 11 Mr. Yodyiam Teptaranon 12 Mr. Chirmsak Pinthong 9
20,000.00
30,000.00
189,000.00 372,965.52
183,965.52 111,206.90 20,000.00
189,000.00 504,172.42
155,483.87 75,483.87
50,000.00 189,000.00 469,967.74
183,965.22 88,965.52
189,000.00 461,930.74
186,724.14
10,000.00 20,000.00
147,483.87 364,208.01
13
Police General Sereepisuth Temeeyaves 81,483.87
68,400.00 149,883.87
14
Mrs. Danucha Yindeepit
18,000.00 231,965.52
183,965.52
30,000.00
Remarks: - The bonus for the fiscal year 2007 for the previous Board of Directors was paid in 2008 according to the resolution of the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008.
083 annual report 2008
7. Corporate Governance
In 2008, the Board of Directors carried out business in conformance with the Stock Exchange of Thailand’s 2006 Corporate Governance of Listed Companies. It can be summarized as follows: 7.1 Corporate Governance Policy of AOT The Board of Directors deemed it appropriate to revise AOT’s corporate governance policy, keeping it in line with the Stock Exchange of Thailand’s 2006 Corporate Governance of Listed Companies. It was widely announced to AOT units on January 29th, 2008 and disclosed on AOT’s website.
7.2 Rights of Shareholders Realizing the importance of the rights of shareholders, AOT has clearly stated in its corporate governance policy that the company shall ensure that the shareholders are entitled to all basic rights including the right to receive adequate information, the right to attend the shareholders’ meetings and vote at the meetings according to
the number of shares owned, the right to vote on the company’s important matters, and the right to share in the profits of the company. The details are as follows: (1) AOT will send a notice of the meeting to shareholders in advance along with a clearly stated agenda with the Board’s opinions on each proposed item, the minutes of the previous shareholders’ meeting, all proxy forms stipulated by the Ministry of Commerce, and the names of the independent directors who can be appointed proxies. Also included are the map of the meeting venue as well as the meeting rules and voting procedures. Moreover, shareholders can look for information about the notice of the meeting, the agenda, documents related to the agenda items, and all proxy forms on the Company’s website at least 20 days prior to the date of the meeting. (2) AOT will fix the date, time, and place of the meeting to facilitate all shareholders on an equitable basis. In addition to ensuring maximum security, the company provides appropriate and ample registration points. For shareholders’ convenience, AOT will open for advance registration at least 2 hours prior to the meeting, using
a barcode system for the registration and vote counting to speed up the processes. The Company also provides appropriate gifts and reception for shareholders attending the meeting. (3) Every shareholders’ meeting will be chaired by the Chairman of the Board of Directors. Before every meeting, the chairman will explain the voting method, vote counting procedures, and the use of ballots with
the results of the voting on each agenda item subsequently announced at the meeting. In counting the votes,
the Company invites volunteer shareholders to witness the procedures. AOT ensures that the voting and
the announcement of the voting results on each item will be clear and transparent to protect the rights of shareholders.
084 annual report 2008
At the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008, the Chairman of the Board of Directors as the Chairman of the Meeting, the Chairman of the Audit Committee, the Chairman of the Nomination Committee, the Chairman of the Remuneration Committee, the Corporate Governance Committee members as well as the AOT President and the top executives were in attendance to explain the details on each agenda item and to answer shareholders’ queries. AOT’s Auditor and legal consultant also attended the meeting in case there were any disputes. They also checked the proxy forms and witnessed the ballot counts which the Chairman of the Board carried out in conformity with the law. (4) The Chairman will arrange sufficient time and manage the meeting appropriately and transparently. During the meeting, the Chairman will offer shareholders opportunities to express opinions and ask questions before voting and concluding the meeting resolution for each agenda. Shareholders may also express opinions and raise questions about the company’s operations during the meeting. (5) The shareholders who arrive after the commencement of the meeting have the right to vote on the agenda being discussed and whose resolution not yet passed. (6) The Company will disclose information to shareholders regularly through the Stock Exchange of Thailand’s channels and the Company’s website. (7) Company visits are organized to enable the shareholders to have a better understanding about
the Company’s business. (8) The Company provides minor shareholders with a channel where they can obtain information directly through the E-mail addresses of the Good Governance Committee members, the Corporate Secretary, and
the Company’s Investor Relation Department. (9) The Company will operate with efficiency to ensure appropriate returns for the shareholders. 7.3 Equitable Treatment of Shareholders AOT emphasizes and provides equitable and fair treatment to every shareholder. To that effect, the Company has taken many efforts as follows: (1) The shareholders had the right to propose annual general meeting items and nominate a qualified person for directorship prior to the Ordinary General Meeting of Shareholders, which was announced to the shareholders through the Stock Exchange of Thailand’s channels 3 months before the end of the fiscal year (30 September 2008), or at least 6 months prior to the Ordinary General Meeting. The shareholders were informed of the criteria in considering
the shareholders’ proposed agenda or candidate. The information of which was informed through AOT’s website.
085 annual report 2008
Three months before the Ordinary General Meeting of Shareholders (before the end of the fiscal year on September 30th, 2008) or at least 6 months prior to the Ordinary General Meeting of Shareholders, the shareholders had the right to propose the nominee for the director. The information on this is informed through the websites of
the Stock Exchange of Thailand and AOT. The Nomination Committee examined whether the nominee was qualified and then submitted the name to the Board for approval before proposing it for consideration at the Shareholders’ Meeting. The Company requested the shareholders to elect each candidate for the director individually. 2) AOT will arrange the shareholders’ meeting following the agendas notified in the notice of shareholders’ meeting. The Company has no policy to add more agendas without informing shareholders in advance so that
the shareholders have sufficient time to study details and information pertinent to each item before making decisions. However, at the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008, major shareholders added an item during the meeting, proposing a nominee for the director position. Therefore, the Company was unable to notify the shareholders in advance. (3) The Company provides proxy forms for shareholders to encourage them to exercise their voting rights and propose a nominee for independent director. The shareholders are entitled to appoint an independent director as their representative, using the proxy form. (4) The Company encourages shareholders to use separate ballots for each agenda so they can cast their votes as deemed appropriate. During the meeting, the ballots for each agenda are collected and merged with the advance voting via proxy. The results of the vote counts and the resolutions are subsequently announced at the meeting. To ensure transparency, the ballots counted in the presence of volunteer shareholders who verify the results will be kept for future checks. (5) The minutes of the meeting shall be made accurately and completely and submitted to the Stock Exchange of Thailand and the Securities and Exchange Commission within 14 days from the meeting date. The company also broadcasts the shareholders’ meeting via Webcast on AOT’s website. (6) In compliance with the Securities and Exchange Act B.E. 2535, the directors, high-ranking executives as well as Vice President of Finance Department and Accounting Department must report their shareholdings of AOT stocks when they are first appointed to the position. They must also report on any buying, selling, or transferring of the stocks regardless of value to the Securities and Exchange Commission within 3 working days. (7) AOT has established measures to control the usage and prevent the misuse of internal information, especially information which may cause a major change in AOT’s stock price, as part of the Company’s corporate governance policy. They shall be disseminated and firmly adhered to by the Board of Directors and employees at all levels.
086 annual report 2008
7.4 The Role of Stakeholders AOT realizes the significance of the rights of stakeholders both internal and external, namely shareholders, customers, employees, the government, joint venture partners, business partners, creditors, society, and community. The Company has clearly defined the guidelines in its corporate governance policy which are disclosed on AOT’s website. The Company operates with respect to the rights of all stakeholders everywhere it carries out business. The Treatment of Stakeholders AOT is committed to promoting cooperation between the Company and the stakeholders to create financial stability and business sustainability as follows: Shareholders
AOT pledges to be a good representative of shareholders in conducting business transparently with emphasis on creating long-term economic value and good returns for shareholders. Employees
AOT regards employees as one of the key factors for AOT’s success. The company is committed to enhancing the capability of employees at all levels on an ongoing basis throughout the year. Moreover, the Company provides complaint channels for employees where there is a conflict between employees or between
an employee and his/her supervisor. The employee submitting a complaint according to the procedures set out by AOT in good faith shall be protected, and the complaint shall not cause dismissal or any disciplinary action on
the part of the complain or witnesses. Furthermore, the Management encourages employees at all levels to suggest ideas that are beneficial to the Company, for example, measures to reduce power consumption. The Company ensures good working environment as well as appropriate and fair remuneration for every employee equitably. Government
To be accountable for the government sector, AOT is committed to conducting business in full compliance with the laws and all applicable regulations of the overseeing agencies. The Company has provided constant support for the government projects to ensure maximum benefits for society as a whole and to retain good relationships with the government agencies. The Company deals with government agencies transparently and is ready to provide accurate and complete information to the government agencies upon request so as to ensure transparency and create mutual trust and confidence.
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annual report 2008
Society, Community, and the Environment
AOT has dedicated units to oversee the Company’s social, community, and environmental affairs including
the Corporate Communications Office, the Special Affairs Department, and the Environmental Department. Over the years, AOT has carried out business with demonstrable commitment to contributing to society, community, and the environment. The Company has provided constant support to socially-beneficial activities in the areas of education, sports, culture, and career development for a better quality of life for people in the community. Additionally, the Company attaches significance to living in harmony with society and the communities where AOT operates. The Company strives to foster good relationships with the communities, collaborating in solving problems to create confidence in the communities and society as a whole. Details on the solutions to environmental problems can be found on AOT’s website. Business Partners
AOT was a policy to treat all business partners equitably based on fair and transparent competition to ensure maximum benefits for all concerned parties. The Company shall never prevent other companies from competing with AOT. Creditors
AOT shall strictly commit to and honor the obligations agreed with the creditors.
Channels for Reporting Improprieties and Safeguarding Whistleblowers
AOT pledges its relentless commitment to achieving business excellence, creating greater economic value and earning the trust and confidence of its shareholders. As part of its corporate governance policy, the Company provides a channel for employees and external parties to make complaints, disclose concerns, give suggestions, or report any misdeeds or improprieties of persons in the Company. AOT stresses the importance of maintaining the confidentiality of the details of the complaints. Disclosures of matters will be made only to the designated or involved persons to ensure protection for the complainants. The Company has established complaint filing and investigatory procedures in which a complaint can be made through the following channels: (1) E-mail at goodgovernance@airportthai.co.th (2) PO. Box 1001 Don Mueang, Bangkok 10210 (3) Suggestion Boxes at the Headquarters Office and the Offices at the 6 airports under AOT’s supervision. 7.5 Information Disclosure and Transparency Full disclosure of information is a vital part of good corporate governance principles. AOT attaches enormous significance to disclosing information to the Stock Exchange of Thailand and shareholders in accurate sufficient, timely, and equitable manners. The Office of Corporate Secretary and the Investor Relations Center are responsible for preparing information, responding to inquiries, and disclosing information to the Stock Exchange of Thailand.
088 annual report 2008
(1) AOT’s essential information consists of both financial and non-financial information. For 2008,
the Company’s financial statements were duly reviewed/audited by the auditor and deemed to be accurate in all material respects and in conformity with the generally-accepted accounting standards. They were approved by
the Audit Committee/the Board of Directors before disclosure to shareholders. The Board of Directors was required to report on the Board’s responsibilities along with the financial statements in the Company’s annual report. Moreover, the Company disclosed the unreviewed quarterly financial statement and the unaudited financial statements although they were not required by the Stock Exchange of Thailand. This was to ensure the shareholders and investors receive the financial information more promptly. No material discrepancies were found in the audited/reviewed financial statements. Other information including a report on the connected transactions, Management Discussion and Analysis (MD&A), risk management, and corporate governance policy were provided in both the Annual Report 2008 and
a Form 56-1. (2) All the information disclosed to the public as well as the shareholders and investors will be published on AOT’s website in both Thai and English. Examples include the annual report, Form 56-1, notice to shareholders, and minutes of the shareholders’ meetings. For the Ordinary General Shareholders’ Meeting 2007 on January 25th, 2008, the Company featured a live webcast of the Chairman of the meeting. To ensure easy, timely access to the useful information, AOT constantly updates its web pages and information. Throughout the year 2008, AOT arranged
a number of company visits, allowing the shareholders and securities analysts to observe its operations at
the Suvarnabhumi Airport and Chiang Mai International Airport with the objectives of creating confidence and better understanding about the operations of AOT on a first-hand basis. (3) AOT disclosed the role and responsibilities of the Board of Directors and special committees as well as their attendance record and the remuneration for the Directors as approved at the shareholders’ meeting and by the top executives in the annual report and Form 56-1. See details under no. 3.1-3.4, 5 and 6.2 (4) AOT established the Investor Relations Center responsible for communicating information that reflects
the true value of the Company to analysts, the shareholders and investors in conformity with the regulations of
the Stock Exchange of Thailand. The Center is also in charge of creating analyst and investor confidence along with fostering a good corporate image and favorable attitude of investors toward the Company. Added to this are
the coordination and provision of consultancy on investor relations affairs to AOT’s Management. Investors or interested persons can acquire information about AOT such as financial statements, annual reports, and news submitted to the Stock Exchange of Thailand from AOT’s IR officials through the following channels: - Telephone : 0 2535 5900 - Fax : 0 2535 5909 - E-mail : aotir@airportthai.co.th - Mail : 333 Cherdwutagard Road, Don Mueang, Bangkok 10210
089 annual report 2008
Realizing the importance of information disclosure in accurate, complete, timely, and transparent manners, AOT established the Investor Relations Center to communicate with the shareholders, investors, securities analysts and other involved agencies. Throughout the fiscal year 2007, the Center carried out a wide range of activities dedicated to publicizing and disseminating information of AOT to investors, shareholders and other involved persons. They can be summarized as follows: Fiscal Year 2007 - Overseas Roadshow 0 Time/Year - Analyst Briefing 2 Times/Year - Company Visit 240 Times/Year - Conference Call 22 Times/Year - Shareholders’ visit 1 Time/Year (5) AOT disclosed financial, non-financial and other material information accurately and completely in conformity with the regulations of the Stock Exchange Commission (SEC) and the Stock Exchange of Thailand. Furthermore, in 2007, AOT prepared Management Discussion and Analysis (MD&A) for every quarterly financial statement. (6) The Company prepared financial statements in accordance with generally accepted accounting standards. They were audited by independent auditors to ensure that all the information was accurate. (7) AOT, in cooperation with the Thai Investors Association and the Stock Exchange of Thailand, organized Company Visit, which allowed the shareholders, investors, and securities analysts to meet with the Company’s top executives to discuss the operations as well as the problems and solutions of AOT before visiting Suvarnabhumi Airport in order to create confidence among the shareholders, analysts and investors in AOT Business.
090 annual report 2008
Internal Control
AOT considers the internal control system vital. AOT, therefore, places the stress on internal control sufficient and appropriate to the business in accordance with the Regulations of the State Audit Commission on the subject of the Specification of Standards of Internal Control, B.E. 2544. These regulations require AOT to implement internal control, follow and assess compliance to the internal controls regularly in order to assure the efficiency of the system. Audit Office’s task is to audit and make sure that main operations and crucial financial activities of AOT are efficiently carried out according to the method specified. The Audit Office is also responsible in checking if laws and regulations relevant to AOT are carried out (Compliance Controls). Then Audit Committee is to re-examine that internal control of AOT is appropriate and effective.  AOT proposed internal control report to the Audit Committee through the Committee Secretary in order to evaluate the sufficiency and appropriateness of the internal control, to prevent and fix damage that may occur to AOT asset, as well as to find out methods and suggestions to reduce or eliminate risk factors. The internal control report has been approved by senior officers and presented to the President and AOT Board of Directors for acknowledgement. The Board of Directors has approved the internal control system as sufficient and appropriate.
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annual report 2008
Connected Transactions AOT holds stakes in a number of companies including the Suvarnabhumi Airport Hotel Co., Ltd., Thai Airport Ground Services Co., Ltd., the Don Mueang International Airport Hotel Co., Ltd., Airport Duty Free Co., Ltd., Krua Kan Bin Phuket Co., Ltd., King Power Duty Free Co., Ltd., Airport Associate Co., Ltd., Bangkok Aviation Fuel Services Plc., and Thai Aviation Fuel Co., Ltd. The company also entered into contracts with the companies granted permission to carry out airport-related activities such as duty free shops at the warehouse, hotels, and aviation refueling service. In return, AOT receives financial benefits in the forms of profit sharing on minimum payment fixed by AOT (whichever is higher). Moreover, AOT leases spaces at the airports to a number of companies granted permission to conduct airport-related activities. Chief among them include: 1. Suvarnabhumi Airport Hotel Co., Ltd. 2. King Power Duty Free Co., Ltd. 3. Thai Airport Ground Services Co., Ltd. 4. Bangkok Aviation Fuel Services, Plc. 5. Thai Aviation Fuel Co., Ltd.
092 annual report 2008
Connected Transactions with Affiliated Companies or Joint Ventures Affiliated Company
Shareholding Percentage
1. Suvarnabhumi Airport Hotel Co., Ltd.
60
2. Thai Airport Ground Services Co., Ltd.
28.50
3. Don Mueang Internatioanl Airport Hotel Co., Ltd.
9
4. Krua Kan Bin Phuket Co., Ltd.
10
5. King Power Duty Free Co., Ltd. 6. Airport Associate Co., Ltd.
5 10
7. Thai Aviation Fuel Co., Ltd.
10
8. Bangkok Aviation Fuel Services Plc.
4.9
AOT Representative AOT Executive (Mrs. Kulya Pakakrong), serving as
the Company’s director and Acting Manager AOT Executive (Flying Officer Anirut Thanomkulbutra,
Mr. Suratas Suthammanas, and Flying Officer Passakorn Surapipit) serving as the Company’s directors. AOT Executive (Mr. Nirandra Theeranartsin), serving as
the Company’s director. AOT Executive (Flying Officer Anirut Thanomkubutra), serving as the Company’s director. - - AOT Executive (Mr. Serirat Prasutanond),
serving as the Company’s Chairman AOT Executive (Flight Lieutenant Viwat Smarnrug)
serving as the Company’s director. -
(As at September 30th, 2008)
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annual report 2008
The Ongoing Development of AOT
Airport One Stop Service
One main practice of airports is offering aviation related services to public and private sectors as well as airlines, passengers and customers. AOT, as the operator of six international airports: Suvarnabhumi Airport, Don Mueang International Airport, Chiang Mai International Airport, Chiang Rai International Airport, Hat Yai International Airport and Phuket International Airport, urges every airport to put every effort into service and detail to impress those who work alongside the airports as well as the general public by emphasizing standards, safety, convenience and promptness. Airport One Stop Service has been set up with the objective to improve service efficiency by combining the services required by customers into a 24-hour one stop service. Airport One Stop Service is currently operating at two airports: Suvarnabhumi Airport and Chiang Mai International Airport. At Suvarnabhumi Airport, the “Suvarnabhumi Airport One Stop Service (SOS)” is located on the 4th floor, Departure Lounge, tel. 0 2132 9111-2. As for the one at Chiang Mai International Airport, it is located at Domestic Arrivals and called “Chiang Mai Airport One Stop Service Center”, tel. 0 5392 4444. Not only is the information service regarding operations and facilitations at “Suvarnabhumi Airport One Stop Service (SOS)” for reporting inconveniences, problems and other complaints as well as customers’ needs, it is also
the information center for the Standard Operation Procedure (SOP) of Suvarnabhumi Airport providing airlines and workers with information upon request. This center is also established to coordinate with sections within Suvarnabhumi Airport and other related sectors, to follow up the progress of operations, and to report results to customers for acknowledgement. This helps create good relations with airlines, the public sector and service providers, improving the overall management together with the services offered by Suvarnabhumi Airport.
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annual report 2008
As regards service results, the Airline Operation Committee Bangkok (AOC) indicated that SOS has been a good effort on the part of AOT and that it could be made even more efficient since it can solve several problems. AOT’s executives realize the importance of the matter, and urge and observe improved operation results. Moreover,
the resources significant and necessary for operations are allocated such as staff, budget, parcels, durable articles, especially information technology equipment in order for management to achieve its set objectives. The responsible parties and staff are committed to provide customer satisfaction in Suvarnabhumi Airport by continually developing services. In so doing, AOT accentuates its commitment to giving the best quality to customers with the future aim of Thai airports being ranked on an international level in terms of service.
097
annual report 2008
AOT Personnel Development
Constituting a significant resource, the personnel can drive an organization forward in successfully reaching its objectives. AOT, therefore, encourages its staff to improve their learning and training in all aspects in order to strengthen their ability to perform their tasks professionally according to international standards. In 2008, AOT emphasized personnel development by organizing training projects/programs and promoting postgraduate scholarships beneficial to AOT staff to perform their duties, in the meantime this is in compliance with the strategies of AOT Human Resource Development Plan. Major operating results are as follows:
1. Airport Principles Programs
These programs have provided airport knowledge to 482 employees; they are Airport Operation Program and Airport Management at basic, intermediate and advanced levels.
2. Professional Expertise Programs
These programs developed 3,231 professional experts out of all staff; for example, they are Safety Management System, Airport Safety, and Aviation Knowledge for Aviation Staff and Aerodrome Apron, etc.
3. General Knowledge Programs
This program improved general knowledge for 7,776 employees; for example: - Foreign Languages Training such as English, Korean, Chinese, Japanese, etc. - Special lectures such as global warming, effects of New Provident Fund Act, creating happy work and creating colourful life, creating tomorrow from today, etc. Overall personnel development according to AOT Human Resource Development Plan for fiscal year 2008 can be summarized as follows:
AOT In-house training (S.1) AOT In-house training (S.2) Training Abroad (S.3)
098 annual report 2008
Number of Training Projects (Projects) 212 505 38
Number of Participants (Persons) 10,226 1,161 102
Apart from AOT human resource development in compliance with AOT annual Human Resource Development Plan, AOT also committed to offer basic knowledge regarding firefighting and rescue to offices
in airports and to communities in the vicinity of Suvarnabhumi Airport. AOT emphasized knowledge about airport firefighting and rescue to these communities so that they would be prepared to help themselves in case of emergency in or around the airport. The lecturers were experts in firefighting and rescue from the Rescue and Firefighting Department, Suvarnabhumi Airport, which is registered as a Basic Fire Training Unit, Fire Drill and Evacuation Unit by the Department of Labour Protection and Welfare No. F.500903016. Three programs are provided: 1. Basic Firefighting Training Course 1 day, 3 hours theory and 3 ½ hours practice 2. Fire Drill and Evacuation Course 1 day, 3 hours theory and 3 ½ hours practice 3. Training and Revision of Firefighting for Crew 3 hours, 2 hours theory and 1 hour practice In the fiscal year 2008, AOT sent firefighting and rescue lecturers to several outside resources such as Technical Department and Catering of Thai Airways International Public Company Limited, Bangkok Airways, Air Asia Airlines, Bangkok Aviation Fuel Services Public Company Limited and District Cooling System and Power Plant Company Limited. AOT’s current personnel resource development not only aims at strengthening the ability of AOT staff in
the workplace, it is also a tool to create good relations between related parties and communities around the airport by providing the same standards of knowledge and practice. This can also be considered as another channel for
the organization to earn non-aeronautical revenue.
099 annual report 2008
Increase in the Efficiency of Security in Passenger Terminal at Suvarnabhumi Airport
AOT has launched a policy changing the passenger and baggage checking systems for departing passengers at Suvarnabhumi Airport from “gate screening” for departing domestic passengers and “concourse screening” for departing international passengers to centralized security screening. This is not only to strengthen the efficiency of security to meet the standards of leading airports but also to expand the sterile area within the passenger terminal and reduce any problems relating to the internal structure of the passenger terminal which are likely to violate security measures. Centralized security screening increases the efficiency of security and facilitates the checking process by establishing passenger and baggage checkpoints in the area behind check-in counters where X-ray machines and walk-through metal detectors are installed. Liquid, gel, spray or other similar materials and substances will also be checked. All checking is conducted within the same area before passing through the sterile area. Apart from the thorough check of passengers and baggage, every person who performs their work in the sterile area, whether it be AOT officers, airline staff, officers from related government sectors, or retail operators, and everything including carry-on baggage, every type of product to be sold in the sterile area as well as any sharp objects necessary in the sterile area must all be checked. The sharp objects must be registered and regularly checked. After passing the centralized security screening, sharp objects and dangerous items must not be sold and prohibited items must not be carried
on board. AOT has implemented centralized security screening since October 1st, 2008 for departing domestic passengers. As for departing international passengers and transit passengers, the system and
the specifications of the checkpoint area are currently under preparation. The system is set to be ready by the beginning of 2009 so that the security at Suvarnabhumi Airport can be at its highest efficiency for all concerned.
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annual report 2008
Occupational Health, Safety and Working Environment Management
AOT has carried out activities regarding safety at work and acted in accordance with Safety at Work Law according to
the Labour Protection Act, B.E. 2541 and other related safety laws. In addition, AOT complies with the Cabinet resolution declaring the policy on “Occupational Health and Safety” as
part of the national agenda on December 11th, 2007 in order to promote safety in the workplace among AOT staff and workers in all departments, and to reduce labour, economic and social losses. AOT administration and management in relation to safety at work is systematic, complete and concordant with the law as well as other international standards. The Department of Labour Protection and Welfare, the Ministry of Labour launched the Outstanding Organization Contest regarding safety, occupational health and working environment at Thailand’s Safety at Work Fair to promote organizations to attain such attributes which meet international standards and comply with the law, in addition to publicly honour and praise employers’ and organizations’ safety, occupational health and working environment Committee, and occupational health and safety officers. AOT, therefore, chose the AOT Headquarters to enter Thailand’s Outstanding Organization Contest for the years 2007 and 2008, winning the award for two consecutive years. The awards received reflect the commitment of AOT’s Occupational Health and Safety Department to safety in the workplace through its emphasis on training, campaigning, public relations and safety examination. Moreover,
the staff and employees are encouraged to become safety-conscious, perform their tasks safely in accordance to
the law and regulations while also maintaining good health. This can be seen to be morale boosting among the staff and workers. Ongoing activities regarding safety in the workplace according to Safety Law ensure a safe and positive working environment without illness or disease caused by work. This also consolidates the organization’s image of safety organization as viewed externally. AOT will continue to maintain its status as one of the country’s outstanding organizations in order to prepare for the organization’s development in becoming a leading international institution and an example to other organizations.
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annual report 2008
The Development Plan of Suvarnabhumi Airport Phase 2 (The Fiscal Year 2009-2014) Suvarnabhumi Airport is currently in the initial phase of development with the airport handling an estimated total of 45 million passengers per annum (33 million international passengers per annum and 12 million domestic passengers per annum). During the initial phase, it is also expected to have two runways accommodating 76 flights per hour, as well as 124 gates comprising 51 contact gates and 73 remote gates. After Suvarnabhumi Airport was opened for service on September 28th, 2006, the government released a policy requiring the entire volume of commercial air traffic be transferred from Bangkok International Airport to Suvarnabhumi Airport. Bangkok International Airport was renamed Don Mueang International Airport providing service for only non-scheduled flights, charter flights and general aviation. Since Suvarnabhumi Airport began its operations, the air traffic volume increased rapidly. The major factor behind this was the availability of the services provided by low cost carriers. For the year 2007, the total number of passengers reached 46 million per annum. This was beyond the designed capacity and caused air traffic congestion subsequently affecting the quality of service and the ability to become the aerotropolis of the region. In order to ease the congestion at the airport, the Cabinet passed a resolution on February 20th, 2007 approving the issue proposed by the Policy Committee for Operation of Suvarnabhumi Airport and Don Mueang International Airport. The content of the resolution was that domestic airlines with no international transit connections could choose, in the first stage, to use Don Mueang International Airport voluntarily, and that a feasibility study into using Don Mueang International Airport should be conducted in order to alleviate the congestion at Suvarnabhumi Airport. In response to the Cabinet resolution, AOT, in the first stage, initiated aviation services at Don Mueang International Airport provided by 3 domestic airlines, namely Thai Airways International, Nok Air and One-Two-Go Airlines. Although the 3 domestic airlines have been transferred to Don Mueang International Airport, the congestion has been alleviated among only a certain amount of domestic flights at Suvarnabhumi Airport. All scheduled international flights operating at Suvarnabhumi Airport are still suffering from congestion. The AOT Board of Directors, therefore, passed a resolution on December 1st, 2007 requiring AOT to expand
the airport’s capacity in order to handle this issue of air traffic volume urgently. Moreover, the airlines could operate more flights, both international and domestic, voluntarily at Don Mueang International Airport. This could be considered as making greater use of the country’s existing property.
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annual report 2008
Recognizing the current situation, AOT designed the Development Plan of Suvarnabhumi Airport Phase 2 commencing from the fiscal year 2009 until 2014. The objectives are to expand the airport’s capacity to handle
60 million passengers per annum (52 million international passengers per annum and 8 million domestic passengers per annum) and to accommodate 90 to 95 flights per hour. This will enable the airport to cope with a certain number of passengers and air traffic volume until 2018. The Cabinet approved in principle the Development Plan of Suvarnabhumi Airport Phase 2 on April 29th, 2008. The major projects consist of construction of Satellite Building 1 and the third runway. AOT is required to propose these projects to the Ministry of Transport, other relevant sectors and the Cabinet for further consideration and approval. The Cabinet also approved in principle that AOT provide service for low cost carriers and volunteer operations of point-to-point international flights at Don Mueang International Airport. The Department of Civil Aviation was assigned to take the issues of obligations of international aviation into consideration for prudent operations. In addition, AOT is required to conduct an additional study on the development approach and the use of Don Mueang International Airport as regards related activities. The investment budget of the Development Plan of Suvarnabhumi Airport Phase 2 was estimated to be 77,885.777 million baht (including 10% contingency and 7% VAT). The Plan covers: 1. Compensation for noise pollution from Development Plan of Suvarnabhumi Airport Phase 2 2. Airfield Pavement - Construction of the third runway 3. Satellite Building 1 3.1 Design and construction of Satellite Building 1 3.2 Construction of aircraft contact stands at Satellite Building 1 3.3 Design and construction of southern linking tunnel 3.4 Design and installation of Automated People Mover (APM) system 4. Passenger Terminal Building 4.1 Design and construction of eastern passenger terminal building 4.2 Design and construction of airlines office building and eastern car park building (Car Park Building 1) 5. Utilities Work - Design and construction of utilities system 6. Hiring of Project Management Consultant group (PMC)
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annual report 2008
The Use of Don Mueang International Airport
The Cabinet resolution on February 6th, 2007 approved the use of Don Mueang as another international airport together with Suvarnabhumi Airport. On February 20th, 2007, the Cabinet added another resolution stating that during the first stage, domestic airlines that do not operate international transit can choose to use Don Mueang International Airport voluntarily. On March 25th, 2007, 3 domestic scheduled airlines transferred their operations from Suvarnabhumi Airport to Don Mueang International Airport, namely Thai Airways, Nok Air and One-Two-Go Airlines. At present, AOT has opened International Passenger Terminal 1 and Domestic Passenger Terminal to provide aviation services in the areas of: 1. General Aviation 2. Commercial Aviation 3. Aviation Training 4. Non-scheduled Charter Flights 5. Domestic Scheduled and Non-scheduled Flights According to current situation, Suvarnabhumi Airport has handled a rapid expansion of escalating air traffic volume. Total number of passengers came to 46 million in 2007 and the airport has started to be so congested since then. As the Development Plan Phase 2 of Suvarnabhumi Airport is running behind schedule, the government has announced a policy stating that domestic airlines with no transit connections can use Don Mueang International Airport voluntarily. In addition, a feasibility study to use Don Mueang International Airport has been conducted in order to alleviate the air traffic congestion at Suvarnabhumi Airport. This policy of using Don Mueang International Airport to its fullest capacity in the future is reflected in the airport’s projects currently under consideration which are relevant to the aviation industry. The projects are listed below:
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annual report 2008
1. The “Stimulator Training Center” Project requires the use of Building 4A (Formerly the Catering building of Thai Airways International), covering 2,258 square meters. Its parking lot covers 465 square meters. 2. The “Passenger Building for Private Aircrafts” Project takes up the VIP Building, housing 9 VIP rooms and covering 2,888 square meters in total. 3. The “Express Cargo Service and Airmail Parcels” Project requires Cargo Terminal 1, containing the storage space of 21,104 square meters and housing cargo of 211,040 tons per annum. 4. The “Perishables Center and Cool Cargo” Project requires Cargo Terminal 2, holding a storage space of 31,475 square meters and accommodating cargo of 314,750 tons per annum. 5. The “Aircraft Maintenance Center in Customs Free Zone” Project takes up Cargo Terminal 3 and 4 containing an adjoining space of 59,790 square meters.
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annual report 2008
Airport One Stop Service
One main practice of airports is offering aviation related services to public and private sectors as well as airlines, passengers and customers. AOT, as the operator of six international airports: Suvarnabhumi Airport, Don Mueang International Airport, Chiang Mai International Airport, Chiang Rai International Airport, Hat Yai International Airport and Phuket International Airport, urges every airport to put every effort into service and detail to impress those who work alongside the airports as well as the general public by emphasizing standards, safety, convenience and promptness. Airport One Stop Service has been set up with the objective to improve service efficiency by combining the services required by customers into a 24-hour one stop service. Airport One Stop Service is currently operating at two airports: Suvarnabhumi Airport and Chiang Mai International Airport. At Suvarnabhumi Airport, the “Suvarnabhumi Airport One Stop Service (SOS)” is located on the 4th floor, Departure Lounge, tel. 0 2132 9111-2. As for the one at Chiang Mai International Airport, it is located at Domestic Arrivals and called “Chiang Mai Airport One Stop Service Center”, tel. 0 5392 4444. Not only is the information service regarding operations and facilitations at “Suvarnabhumi Airport One Stop Service (SOS)” for reporting inconveniences, problems and other complaints as well as customers’ needs, it is also
the information center for the Standard Operation Procedure (SOP) of Suvarnabhumi Airport providing airlines and workers with information upon request. This center is also established to coordinate with sections within Suvarnabhumi Airport and other related sectors, to follow up the progress of operations, and to report results to customers for acknowledgement. This helps create good relations with airlines, the public sector and service providers, improving the overall management together with the services offered by Suvarnabhumi Airport.
096
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As regards service results, the Airline Operation Committee Bangkok (AOC) indicated that SOS has been a good effort on the part of AOT and that it could be made even more efficient since it can solve several problems. AOT’s executives realize the importance of the matter, and urge and observe improved operation results. Moreover,
the resources significant and necessary for operations are allocated such as staff, budget, parcels, durable articles, especially information technology equipment in order for management to achieve its set objectives. The responsible parties and staff are committed to provide customer satisfaction in Suvarnabhumi Airport by continually developing services. In so doing, AOT accentuates its commitment to giving the best quality to customers with the future aim of Thai airports being ranked on an international level in terms of service.
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AOT Personnel Development
Constituting a significant resource, the personnel can drive an organization forward in successfully reaching its objectives. AOT, therefore, encourages its staff to improve their learning and training in all aspects in order to strengthen their ability to perform their tasks professionally according to international standards. In 2008, AOT emphasized personnel development by organizing training projects/programs and promoting postgraduate scholarships beneficial to AOT staff to perform their duties, in the meantime this is in compliance with the strategies of AOT Human Resource Development Plan. Major operating results are as follows:
1. Airport Principles Programs
These programs have provided airport knowledge to 482 employees; they are Airport Operation Program and Airport Management at basic, intermediate and advanced levels.
2. Professional Expertise Programs
These programs developed 3,231 professional experts out of all staff; for example, they are Safety Management System, Airport Safety, and Aviation Knowledge for Aviation Staff and Aerodrome Apron, etc.
3. General Knowledge Programs
This program improved general knowledge for 7,776 employees; for example: - Foreign Languages Training such as English, Korean, Chinese, Japanese, etc. - Special lectures such as global warming, effects of New Provident Fund Act, creating happy work and creating colourful life, creating tomorrow from today, etc. Overall personnel development according to AOT Human Resource Development Plan for fiscal year 2008 can be summarized as follows:
AOT In-house training (S.1) AOT In-house training (S.2) Training Abroad (S.3)
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Number of Training Projects (Projects) 212 505 38
Number of Participants (Persons) 10,226 1,161 102
Apart from AOT human resource development in compliance with AOT annual Human Resource Development Plan, AOT also committed to offer basic knowledge regarding firefighting and rescue to offices
in airports and to communities in the vicinity of Suvarnabhumi Airport. AOT emphasized knowledge about airport firefighting and rescue to these communities so that they would be prepared to help themselves in case of emergency in or around the airport. The lecturers were experts in firefighting and rescue from the Rescue and Firefighting Department, Suvarnabhumi Airport, which is registered as a Basic Fire Training Unit, Fire Drill and Evacuation Unit by the Department of Labour Protection and Welfare No. F.500903016. Three programs are provided: 1. Basic Firefighting Training Course 1 day, 3 hours theory and 3 ½ hours practice 2. Fire Drill and Evacuation Course 1 day, 3 hours theory and 3 ½ hours practice 3. Training and Revision of Firefighting for Crew 3 hours, 2 hours theory and 1 hour practice In the fiscal year 2008, AOT sent firefighting and rescue lecturers to several outside resources such as Technical Department and Catering of Thai Airways International Public Company Limited, Bangkok Airways, Air Asia Airlines, Bangkok Aviation Fuel Services Public Company Limited and District Cooling System and Power Plant Company Limited. AOT’s current personnel resource development not only aims at strengthening the ability of AOT staff in
the workplace, it is also a tool to create good relations between related parties and communities around the airport by providing the same standards of knowledge and practice. This can also be considered as another channel for
the organization to earn non-aeronautical revenue.
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Increase in the Efficiency of Security in Passenger Terminal at Suvarnabhumi Airport
AOT has launched a policy changing the passenger and baggage checking systems for departing passengers at Suvarnabhumi Airport from “gate screening” for departing domestic passengers and “concourse screening” for departing international passengers to centralized security screening. This is not only to strengthen the efficiency of security to meet the standards of leading airports but also to expand the sterile area within the passenger terminal and reduce any problems relating to the internal structure of the passenger terminal which are likely to violate security measures. Centralized security screening increases the efficiency of security and facilitates the checking process by establishing passenger and baggage checkpoints in the area behind check-in counters where X-ray machines and walk-through metal detectors are installed. Liquid, gel, spray or other similar materials and substances will also be checked. All checking is conducted within the same area before passing through the sterile area. Apart from the thorough check of passengers and baggage, every person who performs their work in the sterile area, whether it be AOT officers, airline staff, officers from related government sectors, or retail operators, and everything including carry-on baggage, every type of product to be sold in the sterile area as well as any sharp objects necessary in the sterile area must all be checked. The sharp objects must be registered and regularly checked. After passing the centralized security screening, sharp objects and dangerous items must not be sold and prohibited items must not be carried
on board. AOT has implemented centralized security screening since October 1st, 2008 for departing domestic passengers. As for departing international passengers and transit passengers, the system and
the specifications of the checkpoint area are currently under preparation. The system is set to be ready by the beginning of 2009 so that the security at Suvarnabhumi Airport can be at its highest efficiency for all concerned.
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Occupational Health, Safety and Working Environment Management
AOT has carried out activities regarding safety at work and acted in accordance with Safety at Work Law according to
the Labour Protection Act, B.E. 2541 and other related safety laws. In addition, AOT complies with the Cabinet resolution declaring the policy on “Occupational Health and Safety” as
part of the national agenda on December 11th, 2007 in order to promote safety in the workplace among AOT staff and workers in all departments, and to reduce labour, economic and social losses. AOT administration and management in relation to safety at work is systematic, complete and concordant with the law as well as other international standards. The Department of Labour Protection and Welfare, the Ministry of Labour launched the Outstanding Organization Contest regarding safety, occupational health and working environment at Thailand’s Safety at Work Fair to promote organizations to attain such attributes which meet international standards and comply with the law, in addition to publicly honour and praise employers’ and organizations’ safety, occupational health and working environment Committee, and occupational health and safety officers. AOT, therefore, chose the AOT Headquarters to enter Thailand’s Outstanding Organization Contest for the years 2007 and 2008, winning the award for two consecutive years. The awards received reflect the commitment of AOT’s Occupational Health and Safety Department to safety in the workplace through its emphasis on training, campaigning, public relations and safety examination. Moreover,
the staff and employees are encouraged to become safety-conscious, perform their tasks safely in accordance to
the law and regulations while also maintaining good health. This can be seen to be morale boosting among the staff and workers. Ongoing activities regarding safety in the workplace according to Safety Law ensure a safe and positive working environment without illness or disease caused by work. This also consolidates the organization’s image of safety organization as viewed externally. AOT will continue to maintain its status as one of the country’s outstanding organizations in order to prepare for the organization’s development in becoming a leading international institution and an example to other organizations.
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The Development Plan of Suvarnabhumi Airport Phase 2 (The Fiscal Year 2009-2014) Suvarnabhumi Airport is currently in the initial phase of development with the airport handling an estimated total of 45 million passengers per annum (33 million international passengers per annum and 12 million domestic passengers per annum). During the initial phase, it is also expected to have two runways accommodating 76 flights per hour, as well as 124 gates comprising 51 contact gates and 73 remote gates. After Suvarnabhumi Airport was opened for service on September 28th, 2006, the government released a policy requiring the entire volume of commercial air traffic be transferred from Bangkok International Airport to Suvarnabhumi Airport. Bangkok International Airport was renamed Don Mueang International Airport providing service for only non-scheduled flights, charter flights and general aviation. Since Suvarnabhumi Airport began its operations, the air traffic volume increased rapidly. The major factor behind this was the availability of the services provided by low cost carriers. For the year 2007, the total number of passengers reached 46 million per annum. This was beyond the designed capacity and caused air traffic congestion subsequently affecting the quality of service and the ability to become the aerotropolis of the region. In order to ease the congestion at the airport, the Cabinet passed a resolution on February 20th, 2007 approving the issue proposed by the Policy Committee for Operation of Suvarnabhumi Airport and Don Mueang International Airport. The content of the resolution was that domestic airlines with no international transit connections could choose, in the first stage, to use Don Mueang International Airport voluntarily, and that a feasibility study into using Don Mueang International Airport should be conducted in order to alleviate the congestion at Suvarnabhumi Airport. In response to the Cabinet resolution, AOT, in the first stage, initiated aviation services at Don Mueang International Airport provided by 3 domestic airlines, namely Thai Airways International, Nok Air and One-Two-Go Airlines. Although the 3 domestic airlines have been transferred to Don Mueang International Airport, the congestion has been alleviated among only a certain amount of domestic flights at Suvarnabhumi Airport. All scheduled international flights operating at Suvarnabhumi Airport are still suffering from congestion. The AOT Board of Directors, therefore, passed a resolution on December 1st, 2007 requiring AOT to expand
the airport’s capacity in order to handle this issue of air traffic volume urgently. Moreover, the airlines could operate more flights, both international and domestic, voluntarily at Don Mueang International Airport. This could be considered as making greater use of the country’s existing property.
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Recognizing the current situation, AOT designed the Development Plan of Suvarnabhumi Airport Phase 2 commencing from the fiscal year 2009 until 2014. The objectives are to expand the airport’s capacity to handle
60 million passengers per annum (52 million international passengers per annum and 8 million domestic passengers per annum) and to accommodate 90 to 95 flights per hour. This will enable the airport to cope with a certain number of passengers and air traffic volume until 2018. The Cabinet approved in principle the Development Plan of Suvarnabhumi Airport Phase 2 on April 29th, 2008. The major projects consist of construction of Satellite Building 1 and the third runway. AOT is required to propose these projects to the Ministry of Transport, other relevant sectors and the Cabinet for further consideration and approval. The Cabinet also approved in principle that AOT provide service for low cost carriers and volunteer operations of point-to-point international flights at Don Mueang International Airport. The Department of Civil Aviation was assigned to take the issues of obligations of international aviation into consideration for prudent operations. In addition, AOT is required to conduct an additional study on the development approach and the use of Don Mueang International Airport as regards related activities. The investment budget of the Development Plan of Suvarnabhumi Airport Phase 2 was estimated to be 77,885.777 million baht (including 10% contingency and 7% VAT). The Plan covers: 1. Compensation for noise pollution from Development Plan of Suvarnabhumi Airport Phase 2 2. Airfield Pavement - Construction of the third runway 3. Satellite Building 1 3.1 Design and construction of Satellite Building 1 3.2 Construction of aircraft contact stands at Satellite Building 1 3.3 Design and construction of southern linking tunnel 3.4 Design and installation of Automated People Mover (APM) system 4. Passenger Terminal Building 4.1 Design and construction of eastern passenger terminal building 4.2 Design and construction of airlines office building and eastern car park building (Car Park Building 1) 5. Utilities Work - Design and construction of utilities system 6. Hiring of Project Management Consultant group (PMC)
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The Use of Don Mueang International Airport
The Cabinet resolution on February 6th, 2007 approved the use of Don Mueang as another international airport together with Suvarnabhumi Airport. On February 20th, 2007, the Cabinet added another resolution stating that during the first stage, domestic airlines that do not operate international transit can choose to use Don Mueang International Airport voluntarily. On March 25th, 2007, 3 domestic scheduled airlines transferred their operations from Suvarnabhumi Airport to Don Mueang International Airport, namely Thai Airways, Nok Air and One-Two-Go Airlines. At present, AOT has opened International Passenger Terminal 1 and Domestic Passenger Terminal to provide aviation services in the areas of: 1. General Aviation 2. Commercial Aviation 3. Aviation Training 4. Non-scheduled Charter Flights 5. Domestic Scheduled and Non-scheduled Flights According to current situation, Suvarnabhumi Airport has handled a rapid expansion of escalating air traffic volume. Total number of passengers came to 46 million in 2007 and the airport has started to be so congested since then. As the Development Plan Phase 2 of Suvarnabhumi Airport is running behind schedule, the government has announced a policy stating that domestic airlines with no transit connections can use Don Mueang International Airport voluntarily. In addition, a feasibility study to use Don Mueang International Airport has been conducted in order to alleviate the air traffic congestion at Suvarnabhumi Airport. This policy of using Don Mueang International Airport to its fullest capacity in the future is reflected in the airport’s projects currently under consideration which are relevant to the aviation industry. The projects are listed below:
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1. The “Stimulator Training Center” Project requires the use of Building 4A (Formerly the Catering building of Thai Airways International), covering 2,258 square meters. Its parking lot covers 465 square meters. 2. The “Passenger Building for Private Aircrafts” Project takes up the VIP Building, housing 9 VIP rooms and covering 2,888 square meters in total. 3. The “Express Cargo Service and Airmail Parcels” Project requires Cargo Terminal 1, containing the storage space of 21,104 square meters and housing cargo of 211,040 tons per annum. 4. The “Perishables Center and Cool Cargo” Project requires Cargo Terminal 2, holding a storage space of 31,475 square meters and accommodating cargo of 314,750 tons per annum. 5. The “Aircraft Maintenance Center in Customs Free Zone” Project takes up Cargo Terminal 3 and 4 containing an adjoining space of 59,790 square meters.
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AOT’s Corporate Social Responsibility (CSR) AOT’s Commitment to Sustainable Communities by CSR
It has been 30 years since AOT became a state enterprise under the supervision of the Ministry of Transport and was listed as a public limited company on the Stock Exchange of Thailand. AOT is an organization operating 6 international airports, namely Suvarnabhumi, Don Mueang, Phuket, Chiang Mai, Hat Yai and Chiang Rai. AOT is closely involved with Thai people who travel by air and, at the same time, continuously promotes the successive development of the country. The expansion of a large-size business generally brings prosperity as well as new problems to the society and surrounding communities. The business operation of each AOT airport is accountable to the expectations from society and neighborhood communities. AOT, therefore, is determined to solve any rising problems such as noise pollution resulting from the operation of Suvarnabhumi Airport along with being considerate of how to show responsibility to society and the environment. “Corporate Social Responsibility (CSR)” emanates from
Idea 1: Public Responsibility which emphasizes that AOT must be careful and pay every attention to outcomes arising from
the Company’s business operation both within the area of the airport and the surrounding area. This can be regarded as a social issue. Idea 2: Stakeholder Theory is the management of the organization’s stakeholders including customers, staff, shareholders, trading partners, competitors, government agencies and the communities where AOT’s airports are located. Lastly, Idea 3: Corporate Citizenship is the idea that the organization must act in
a humanitarian way in order to help facilitate the successive development of society. Such contributions should be made voluntarily in order to achieve the sustainable improvement of society.
AOT used these CSR viewpoints as a guideline to design CSR patterns, divided into 4 patterns. The first pattern is Cause-related Marketing whereby a part of operation income or profit to be contributed to charities. The second pattern is Corporate Philanthropy and the third is Volunteering. These patterns emphasize on a good relationship between the organization and stakeholders in society. This can be achieved through the participation of AOT executives, staff, and trading partners in social activities within the area. AOT also takes the quality development of the younger generations in terms of living conditions and mental health into consideration in order to establish
a good relationship with the communities around the airports. Furthermore, AOT is committed to encouraging
the youth to become good adults in the future. This is reflected in the support of the construction of 3 AOT Border Patrol Police Schools in Narathiwat, Mukdahan and Chiang Rai Provinces together with the provision of annual financial subsidies for the 3 schools for over 10 consecutive years. This is considered an integral part of AOT’s policy on the increased provision of educational opportunities to students in remote areas. AOT also provided playground equipment and outdoor exercise machines to 22 schools around Suvarnabhumi Airport that have been affected by the noise exposure caused by the airport’s operation. The fourth pattern is Social Responsibility Business Practice which is the development of the business operations of the organization in order to avoid negative impacts on society and environment or to minimize them as much as possible. For example, since AOT’s operations can cause environmental pollution, AOT has employed PC AIR and the 400 Hertz system to serve airlines in order to reduce pollution discharged from the combustion of aircraft fuel in the parking stands for over 10 years. AOT allows staff to be able to express their opinions concerning Corporate Social Responsibility (CSR) so they can be proud of the organization. It is also a part of sustainable development and growth. Moreover, it enables AOT
to gain trust from communities and society.
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Promotion of Border Patrol Police School
AOT supports the construction of three AOT Border Patrol Police Schools in Narathiwat Province, Mukdahan Province and Chiang Rai Province as well as granting annual subsidies of 150,000 Baht to each school for 10 consecutive years since the fiscal year 1999 until the present in order to help facilitate the schools’ operations. Every year the AOT Executives visit each school to follow up their operations and give educational tools to their students and instructors as well as organize regular recreational activities. The mentioned operation and activities comply with AOT’s policy towards the educational development of Thailand, especially in terms of the expansion of educational opportunities to remote areas. This is also a response to the royal idea of HRH Princess Maha Chakri Sirindhorn and a show of respect to the royal institution. AOT maintains three Border Patrol Police Schools as follows:
1. AOT Border Patrol Police School in Celebration of the Sixth-Cycle (72 years) Birthday Anniversary of His Majesty King Bhumibol Adulyadej on December 5th, 1999
The school is situated in Baan Ai-Jada, RueSor District, Narathiwat Province. HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on February 2nd, 2000. It is a primary school offering classes from Prathom 1 to 6. The construction budget is 4,000,000 Baht. In 2006, AOT gave financial support worth 2,530,000 Baht for the additional construction project of a building with six classrooms.
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2. AOT Border Patrol Police School to Commemorate the Centenary of Her Royal Highness Princess Srinagarindra
The school is located in Baan Taworn Pana, Tambon Koktoom, Dong Luang District, Mukdahan Province.
HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on September 26th, 2001. It is a primary school offering classes from Prathom 1 to 6. The construction budget is 4,000,000 Baht. HRH Princess Maha Chakri Sirindhorn paid a royal visit to the school and observed the royal project on February 1st, 2006.
3. AOT Border Patrol Police School in Celebration of the Fourth-Cycle (48 years) Birthday Anniversary of Her Royal Highness Princess Maha Chakri Sirindhorn on April 2nd, 2003
The school is situated in Baan Na-toh, Tambon Mae Salong Nai, Mae Fah Luang District, Chiang Rai Province. HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on March 25th, 2003. It is the first border patrol police secondary school of the country providing classes from Mathayom 1 to 3. The construction budget is 11,000,000 Baht. In 2004, AOT granted 1,100,000 Baht for the additional construction of a building with three classrooms. HRH Princess Maha Chakri Sirindhorn paid a royal visit to the school to see its progress in the royal project on March 1st, 2006 and February 18th, 2008.
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Support of United Nations
The United Nations World Food Programme (WFP) requested the use of the Thai airport as the UN’s Staging Area (UNSA) to deliver relief packages to the victims of Cyclone Nargis in Myanmar. Considering the issue of humanitarian and international cooperation, AOT allowed WFP to use Cargo Terminal 3 of Don Mueang International Airport as the UN’s Staging Area to deliver relief packages to Myanmar for 3 months from May 24th, 2008 until August 23rd, 2008 whereby AOT provided the ground service and Cargo Marketing International Company Limited (CMI) dealt with customs. AOT did not collect any rent for the use of the building. On May 24th, 2008, there was the inauguration ceremony of the UN’s flight to deliver the relief packages to the victims of Cyclone Nargis in Myanmar taking off from the UN’s Staging Area at Don Mueang International Airport. Present at the inauguration was the Secretary-General of United Nations Mr. Ban Ki-moon, the Prime Minister of Thailand Mr.Samak Sundaravej, ASEAN Secretary General Mr. Surin Pissuwan, the Minister of Foreign Affairs
Mr. Noppadol Patama, and AOT’s Senior Executive Vice President, Mrs. Kalaya Pakakrong, representing AOT.
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Community Relations
AOT puts special emphasis on activities which establish good relationship with surrounding communities at each AOT airport. AOT has always promoted, supported and crated educational, religious, cultural, youngish and environmental activities and projects useful to communities around these airports.
Suvarnabhumi Airport Community Relations
Since its official opening on September 28th, 2006, Suvarnabhumi Airport has promoted community relation activities as follows: Annually National Children Day to show that AOT realizes the importance of children who are growing to be essential strength of our country, educational support for childcare centers in the communities, “Imparting Knowledge to the Communities, Creating Good Relation with Suvarnabhumi” project which provided 40 bookshelves to organize books in different categories, Suvarnabhumi Airport also supports local traditional ceremonies regardless of ethnicity and religion, for example, the “Yon Bua” (Lotus Throwing) tradition and Albazrah, an Islamic tradition. Assistance in case of emergency is always provided.
Don Mueang International Airport Community Relations
Don Mueang International Airport, operating chartered international flights and some domestic flights, is committed
to contribute continually to the surrounding community.
The followings are some examples: Financial support to improve and repair traffic light control system at Don Mueang Police Station Junction, to facilitate the traffic police in performing their tasks within the community, Providing raincoats to
the Prevention and Suppression Division of Don Mueang Police Station to be worn during the raining season, Children’s Day activities are organized every year, AOT also participates in surrounding community activities regularly, such as those activities with temples and schools, etc.
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Phuket International Airport Community Relations
Phuket International Airport realizes the importance of children and youth who are going to be an essential strength of our country in the future; therefore, the National Children’s Day activities are organized every year in order to entertain, educate and gain more skills these children and younger generations. Another major activity of Phuket International Airport is the provision of services for passengers going to and returning from the Haj pilgrimage in Mecca, Saudi Arabia. Each year, a great number of passengers participate in this event. Phuket International Airport, therefore, needs to ask for cooperation from several sectors and coordinates with the surrounding community around the airport in order to operate successfully.
Chiang Mai International Airport Community Relations
In order to proudly become a golden gateway to Lanna, Chiang Mai International Airport realizes
the significance of promoting good relations with its surrounding community. The followings are some examples:
The annual ceremony of presenting yellow robes to the Buddhist monks at the end of the Buddhist Lent is one of
the main activities jointly organized by Chiang Mai International Airport and the surrounding community.
The ceremony is held at different temples each year and is regarded as helping preserve Buddhism and promoting
a good relationship between Chiang Mai International Airport staff and local people. Chiang Mai International Airport also organizes and supports activities held by the surrounding community, such as Children’s Day activities, offering Buddhist Lent candles, granting scholarship and educational equipment to students, dredging up water-distribution ditches and canals, etc.
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Hat Yai International Airport Community Relations
Community relation is one of the major obligations of Hat Yai International Airport. Last year, the airport organized several activities such as a marathon walk to mark the King’s 80th Birthday Anniversary on December 5th, 2007 as part of the project called “AOT Ruam Jai Pak Rak Nai Luang” (Loving the King in Unity). The airport has always facilitated passengers participating in the Haj ceremony in Mecca, Saudi Arabia. Other activities include Children’s Day activities, providing lunch for children with intellectual disabilities living in Baan Songkhla, and financial subsidies for schools, etc.
Chiang Rai International Airport Community Relations
Chiang Rai International Airport organizes annual community relation activities regarding education, religions, culture, sports, etc. Chiang Rai International Airport organizes Children’s Day activities every year, allows educational institutes to visit the airport to gain more knowledge about aviation, encourages airport staff and those who live in the surrounding community to exercise for their own good. Furthermore, blood donation activity is held within
the airport on important occasions, such as King Bhumipol Adulyadej’s Birthday and HRH Queen Sirikit’s Birthday, etc. The airport also provides assistance to society in case of emergency.
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Environment Operation
AOT always operates its airports with concern towards environment and realizes the importance of preservation, solution and reduction of impacts on the environment and communities around the airports. Six airports employ good Environmental Management System such as efficient wastewater treatment, waste treatment as specified according to the sanitation conditions, particularly at Suvarnabhumi Airport where water supply system and water pumping system are certified with ISOs 14001, 18001, and 9001. In addition, drinking water at Suvarnabhumi Airport is guaranteed to be drinkable by the Metropolitan Waterworks Authority on June 14th, 2007. Each airport operates in compliance with measures for prevention, solution and reduction of impacts on the environment and measures for the complete monitoring and examination of environmental quality, resulting in Chiang Rai International Airport receiving the EIA Monitoring Award for the years 2006 and 2007 from the Ministry of Natural Resources and Environment. As for those houses, religious sites, schools or hospitals who suffer from noise impact as a result of Suvarnabhumi Airport operation, AOT has given compensation according to the measures clearly specified in the study of the environmental impacts of the additional Suvarnabhumi Airport Project (due to the increase in the number of passengers in the first year of operation) approved by the National Environment Board on March 10th, 2005 and according to the Cabinet resolution on May 29th, 2007. A summary of the progress on the operations up until
September 30th, 2008 is presented below:
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1. In the affected zone NEF 40, there are 503 buildings constructed before 2001 and 153 landlords in the area want to sell their lands and buildings. AOT has already estimated the price of 54 plots of land and buildings.
16 buildings were sold out and transferred the ownership. As for the other 99 buildings, AOT will give price estimates according to the guidelines for compensation of the owners of expropriated real estate according to the Act on
the Expropriation of Immovable Property, B.E. 2530. Regarding 342 property owners who wish to have them renovated, AOT has already granted compensation to 231 owners. AOT is currently contacting 8 property owners who have not declared their intentions regarding compensation.
2. In the affected zone NEF 30-40, there are 8,966 buildings constructed before 2001. AOT will support renovation of buildings by inspecting noise level in each problem building. In case the result turned out that Suvarnabhumi Airport did produce over ten decibels (A), AOT will surely offer financial assistance to assist
the building owners to renovate their buildings using renovation criteria to reduce sound impact which stated in
a study conducted by the National Institute of Development Administration (NIDA). In the fiscal year 2008, AOT has carried out inspections of noise levels inside the buildings and estimated the renovation costs for approximately 1,000 buildings where the noise level is over 10 decibels (A). As regards the rest of the buildings, inspections will be performed in the next fiscal year. 3. AOT provided a renovation budget of 190.5 million Baht for locations sensitive to noise exposure. These locations comprise 11 schools, hospitals and religious sites.
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Promotion of Border Patrol Police School
AOT supports the construction of three AOT Border Patrol Police Schools in Narathiwat Province, Mukdahan Province and Chiang Rai Province as well as granting annual subsidies of 150,000 Baht to each school for 10 consecutive years since the fiscal year 1999 until the present in order to help facilitate the schools’ operations. Every year the AOT Executives visit each school to follow up their operations and give educational tools to their students and instructors as well as organize regular recreational activities. The mentioned operation and activities comply with AOT’s policy towards the educational development of Thailand, especially in terms of the expansion of educational opportunities to remote areas. This is also a response to the royal idea of HRH Princess Maha Chakri Sirindhorn and a show of respect to the royal institution. AOT maintains three Border Patrol Police Schools as follows:
1. AOT Border Patrol Police School in Celebration of the Sixth-Cycle (72 years) Birthday Anniversary of His Majesty King Bhumibol Adulyadej on December 5th, 1999
The school is situated in Baan Ai-Jada, RueSor District, Narathiwat Province. HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on February 2nd, 2000. It is a primary school offering classes from Prathom 1 to 6. The construction budget is 4,000,000 Baht. In 2006, AOT gave financial support worth 2,530,000 Baht for the additional construction project of a building with six classrooms.
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2. AOT Border Patrol Police School to Commemorate the Centenary of Her Royal Highness Princess Srinagarindra
The school is located in Baan Taworn Pana, Tambon Koktoom, Dong Luang District, Mukdahan Province.
HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on September 26th, 2001. It is a primary school offering classes from Prathom 1 to 6. The construction budget is 4,000,000 Baht. HRH Princess Maha Chakri Sirindhorn paid a royal visit to the school and observed the royal project on February 1st, 2006.
3. AOT Border Patrol Police School in Celebration of the Fourth-Cycle (48 years) Birthday Anniversary of Her Royal Highness Princess Maha Chakri Sirindhorn on April 2nd, 2003
The school is situated in Baan Na-toh, Tambon Mae Salong Nai, Mae Fah Luang District, Chiang Rai Province. HRH Princess Maha Chakri Sirindhorn presided over the school’s opening ceremony on March 25th, 2003. It is the first border patrol police secondary school of the country providing classes from Mathayom 1 to 3. The construction budget is 11,000,000 Baht. In 2004, AOT granted 1,100,000 Baht for the additional construction of a building with three classrooms. HRH Princess Maha Chakri Sirindhorn paid a royal visit to the school to see its progress in the royal project on March 1st, 2006 and February 18th, 2008.
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Support of United Nations
The United Nations World Food Programme (WFP) requested the use of the Thai airport as the UN’s Staging Area (UNSA) to deliver relief packages to the victims of Cyclone Nargis in Myanmar. Considering the issue of humanitarian and international cooperation, AOT allowed WFP to use Cargo Terminal 3 of Don Mueang International Airport as the UN’s Staging Area to deliver relief packages to Myanmar for 3 months from May 24th, 2008 until August 23rd, 2008 whereby AOT provided the ground service and Cargo Marketing International Company Limited (CMI) dealt with customs. AOT did not collect any rent for the use of the building. On May 24th, 2008, there was the inauguration ceremony of the UN’s flight to deliver the relief packages to the victims of Cyclone Nargis in Myanmar taking off from the UN’s Staging Area at Don Mueang International Airport. Present at the inauguration was the Secretary-General of United Nations Mr. Ban Ki-moon, the Prime Minister of Thailand Mr.Samak Sundaravej, ASEAN Secretary General Mr. Surin Pissuwan, the Minister of Foreign Affairs
Mr. Noppadol Patama, and AOT’s Senior Executive Vice President, Mrs. Kalaya Pakakrong, representing AOT.
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Community Relations
AOT puts special emphasis on activities which establish good relationship with surrounding communities at each AOT airport. AOT has always promoted, supported and crated educational, religious, cultural, youngish and environmental activities and projects useful to communities around these airports.
Suvarnabhumi Airport Community Relations
Since its official opening on September 28th, 2006, Suvarnabhumi Airport has promoted community relation activities as follows: Annually National Children Day to show that AOT realizes the importance of children who are growing to be essential strength of our country, educational support for childcare centers in the communities, “Imparting Knowledge to the Communities, Creating Good Relation with Suvarnabhumi” project which provided 40 bookshelves to organize books in different categories, Suvarnabhumi Airport also supports local traditional ceremonies regardless of ethnicity and religion, for example, the “Yon Bua” (Lotus Throwing) tradition and Albazrah, an Islamic tradition. Assistance in case of emergency is always provided.
Don Mueang International Airport Community Relations
Don Mueang International Airport, operating chartered international flights and some domestic flights, is committed
to contribute continually to the surrounding community.
The followings are some examples: Financial support to improve and repair traffic light control system at Don Mueang Police Station Junction, to facilitate the traffic police in performing their tasks within the community, Providing raincoats to
the Prevention and Suppression Division of Don Mueang Police Station to be worn during the raining season, Children’s Day activities are organized every year, AOT also participates in surrounding community activities regularly, such as those activities with temples and schools, etc.
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Phuket International Airport Community Relations
Phuket International Airport realizes the importance of children and youth who are going to be an essential strength of our country in the future; therefore, the National Children’s Day activities are organized every year in order to entertain, educate and gain more skills these children and younger generations. Another major activity of Phuket International Airport is the provision of services for passengers going to and returning from the Haj pilgrimage in Mecca, Saudi Arabia. Each year, a great number of passengers participate in this event. Phuket International Airport, therefore, needs to ask for cooperation from several sectors and coordinates with the surrounding community around the airport in order to operate successfully.
Chiang Mai International Airport Community Relations
In order to proudly become a golden gateway to Lanna, Chiang Mai International Airport realizes
the significance of promoting good relations with its surrounding community. The followings are some examples:
The annual ceremony of presenting yellow robes to the Buddhist monks at the end of the Buddhist Lent is one of
the main activities jointly organized by Chiang Mai International Airport and the surrounding community.
The ceremony is held at different temples each year and is regarded as helping preserve Buddhism and promoting
a good relationship between Chiang Mai International Airport staff and local people. Chiang Mai International Airport also organizes and supports activities held by the surrounding community, such as Children’s Day activities, offering Buddhist Lent candles, granting scholarship and educational equipment to students, dredging up water-distribution ditches and canals, etc.
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Hat Yai International Airport Community Relations
Community relation is one of the major obligations of Hat Yai International Airport. Last year, the airport organized several activities such as a marathon walk to mark the King’s 80th Birthday Anniversary on December 5th, 2007 as part of the project called “AOT Ruam Jai Pak Rak Nai Luang” (Loving the King in Unity). The airport has always facilitated passengers participating in the Haj ceremony in Mecca, Saudi Arabia. Other activities include Children’s Day activities, providing lunch for children with intellectual disabilities living in Baan Songkhla, and financial subsidies for schools, etc.
Chiang Rai International Airport Community Relations
Chiang Rai International Airport organizes annual community relation activities regarding education, religions, culture, sports, etc. Chiang Rai International Airport organizes Children’s Day activities every year, allows educational institutes to visit the airport to gain more knowledge about aviation, encourages airport staff and those who live in the surrounding community to exercise for their own good. Furthermore, blood donation activity is held within
the airport on important occasions, such as King Bhumipol Adulyadej’s Birthday and HRH Queen Sirikit’s Birthday, etc. The airport also provides assistance to society in case of emergency.
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Environment Operation
AOT always operates its airports with concern towards environment and realizes the importance of preservation, solution and reduction of impacts on the environment and communities around the airports. Six airports employ good Environmental Management System such as efficient wastewater treatment, waste treatment as specified according to the sanitation conditions, particularly at Suvarnabhumi Airport where water supply system and water pumping system are certified with ISOs 14001, 18001, and 9001. In addition, drinking water at Suvarnabhumi Airport is guaranteed to be drinkable by the Metropolitan Waterworks Authority on June 14th, 2007. Each airport operates in compliance with measures for prevention, solution and reduction of impacts on the environment and measures for the complete monitoring and examination of environmental quality, resulting in Chiang Rai International Airport receiving the EIA Monitoring Award for the years 2006 and 2007 from the Ministry of Natural Resources and Environment. As for those houses, religious sites, schools or hospitals who suffer from noise impact as a result of Suvarnabhumi Airport operation, AOT has given compensation according to the measures clearly specified in the study of the environmental impacts of the additional Suvarnabhumi Airport Project (due to the increase in the number of passengers in the first year of operation) approved by the National Environment Board on March 10th, 2005 and according to the Cabinet resolution on May 29th, 2007. A summary of the progress on the operations up until
September 30th, 2008 is presented below:
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1. In the affected zone NEF 40, there are 503 buildings constructed before 2001 and 153 landlords in the area want to sell their lands and buildings. AOT has already estimated the price of 54 plots of land and buildings.
16 buildings were sold out and transferred the ownership. As for the other 99 buildings, AOT will give price estimates according to the guidelines for compensation of the owners of expropriated real estate according to the Act on
the Expropriation of Immovable Property, B.E. 2530. Regarding 342 property owners who wish to have them renovated, AOT has already granted compensation to 231 owners. AOT is currently contacting 8 property owners who have not declared their intentions regarding compensation. 2. In the affected zone NEF 30-40, there are 8,966 buildings constructed before 2001. AOT will support renovation of buildings by inspecting noise level in each problem building. In case the result turned out that Suvarnabhumi Airport did produce over ten decibels (A), AOT will surely offer financial assistance to assist
the building owners to renovate their buildings using renovation criteria to reduce sound impact which stated in
a study conducted by the National Institute of Development Administration (NIDA). In the fiscal year 2008, AOT has carried out inspections of noise levels inside the buildings and estimated the renovation costs for approximately 1,000 buildings where the noise level is over 10 decibels (A). As regards the rest of the buildings, inspections will be performed in the next fiscal year. 3. AOT provided a renovation budget of 190.5 million Baht for locations sensitive to noise exposure. These locations comprise 11 schools, hospitals and religious sites.
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Financial Statements
Report of the AOT Board of Director’s Responsibility for Financial Reports The AOT Board of Directors Responsible for the AOT’s Financial Statement, whose accounting method meets
the standard requirement generally accepted in Thailand. The Board has chosen the most appropriate accounting policy to which they consistently conform. With regard to information disclosure, the Board has revealed sufficient vital information attached with the remarks of the AOT Financial Statement. To ensure accuracy, completeness and timeliness of the AOT Financial Statement and Internal Audit and to prevent potential misconduct and error, AOT has nominated an Audit Committee consisting of independent members to supervise and evaluate the internal control system for efficiency. The opinion of the Audit Committee is included in the Audit Committee Report which is attached with the AOT Annual Report. The AOT Board of Directors is unanimous in its opinion that AOT’s Internal Control System can foster confidence that the AOT Financial Statement has demonstrated accurate financial status, significant operational performance and positive cash flow of the company.
(Signed) Vudhibhandhu Vichairatana
(Vudhibhandhu Vichairatana) Chairman
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
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Audit Committee’s Report For Fiscal Year 2008 The Audit Committee of Airport of Thailand Public Company Limited (AOT) was appointed by the AOT Board of Directors at the Ordinary General Shareholders’ Meeting 6/2008 on 10th April, 2008. The Committee consists of
the following members: Mr. Thaworn Phanichaphan Chairman Mr. Pongsak Semson Member Mr. Arkhom Termpittayapaisith Member Mr. Apichart Sayasit Member Mr. Kamol Daengpun, Vice President, Audit Office Secretary During the fiscal year 2008 (October 2007 - September 2008), the Audit Committee convened 9 meetings to function as the efficient mechanism of the Board of Directors in overseeing good corporate governance, risk management, as well as internal control and internal audit. This ensured AOT Management could efficiently manage and oversee the operations of AOT to achieve its goals. In the past year, the Audit Committee together with AOT’s finance and accounting executives and auditor from the Office of Auditor-General examined AOT’s financial statements. The auditor found that AOT’s financial statements were properly prepared in compliance with accepted accounting standards and with adequate disclosure of
the financial information and connected transactions in an accurate and complete manner. The financial statements were prepared and submitted to the Stock Exchange of Thailand within the deadline set. The Audit Committee reviewed the internal control system for AOT’s finance and operations and gave suggestions to the Board and Management on the improvement of AOT’s risk management and internal control, bringing them to acceptable levels. Moreover, the Audit Committee made recommendations on the progress report on setting up internal control system in conformance with the Auditor General Regulations on Internal Control Standards B.E. 2544. In performing their duties, the Audit Committee made use of the AOT Audit Office report on internal audit as a major tool in providing suggestions and improving the operations of AOT. The Audit Committee performed their duties with prudence, independence, transparency, and verification in line with the principles of good corporate governance. Based on the review and examination of various matters over 2008, the Audit Committee was of the view that AOT’s procedures for preparing financial statements, the internal control report, risk management, and internal audit were efficient and appropriate in compliance with the criteria and guidelines of the State Enterprise Audit Committee stipulated by the Ministry of Finance. In addition, AOT strictly adhered to the relevant laws, regulations, the Cabinet’s resolutions, and policies set forth by the AOT Board of Directors. (Signed) Thaworn Phanichaphan (Thaworn Phanichaphan) Chairman of the Audit Committee 29 October 2008
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AUDITOR’S REPORT TO: THE SHAREHOLDERS OF THE AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED The Office of the Auditor General of Thailand has audited the accompanying consolidated and the Company’s balance sheets as at September 30, 2008 and 2007, and the related consolidated and the Company’s statements of income, changes in shareholders’ equity, and cash flows for the years then ended of the Airports of Thailand Public Company Limited and its subsidiaries and of the Airports of Thailand Public Company Limited, respectively. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. The responsibility of the Office of the Auditor General of Thailand is to express an opinion on these financial statements based on the audits. The Office of the Auditor General of Thailand conducted the audits in accordance with generally accepted auditing standards. Those standards require that the Office of the Auditor General of Thailand 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 statements presentation. The Office of the Auditor General of Thailand believes that the audits provide a reasonable basis for the opinion. In the opinion of the Office of the Auditor General of Thailand, the consolidated and the Company’s financial statements referred to above present fairly, in all material respects, the financial position as at September 30, 2008 and 2007, and the results of operations, the changes in shareholders’ equity, and the cash flows for the years then ended of the Airports of Thailand Public Company Limited and its subsidiaries and of the Airports of Thailand Public Company Limited, respectively, in accordance with generally accepted accounting principles. Without qualifying opinion, the Office of the Auditor General of Thailand draws attention to the following matters: 1. Note to the financial statements No. 4.1, the Company has changed the accounting policy for investments in subsidiaries and associates presented in the company’s financial statements from the equity method to the cost method in accordance with the Thai Accounting Standard No. 44 (revised 2007). 2. Note to the financial statements No. 6.31.2, Dispute with private companies. (Signed) Jaruvan Maintaka (Khunying Jaruvan Maintaka) Auditor General
Office of the Auditor General November 21, 2008
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(Signed) Dawan Wongphayak (Dawan Wongphayak) Senior Audit Specialist Level 9
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Assets Current assets Cash and cash equivalents 6.1 8,437,365,623.51 10,231,387,965.24 8,338,266,634.60 10,208,038,131.42 Current investments 6.2 11,557,828,924.58 4,503,250,658.11 11,557,828,924.58 4,503,250,658.11 Trade accounts receivable - net 6.3 1,654,325,763.81 1,789,511,118.90 1,582,781,489.87 1,720,916,200.99 Other receivables 6.4 1,269,139,769.25 1,271,179,754.84 1,255,384,381.92 1,263,010,384.13 Inventories and supplies - net 6.5 209,706,665.33 130,979,381.95 201,740,621.84 122,950,562.76 Accrued income 1,367,353,328.17 989,891,553.77 1,374,666,257.50 1,013,055,710.77 Other current assets 6.6 190,399,417.96 226,295,352.50 175,833,767.76 213,621,854.81 Total current assets 24,686,119,492.61 19,142,495,785.31 24,486,502,078.07 19,044,843,502.99 Non - current assets Investments in Subsidiaries and 6.7 191,740,321.88 174,653,058.38 39,789,293,000.00 39,789,293,000.00 Associates Other long - term investments 6.8 989,758,437.98 379,710,000.00 989,758,437.98 379,710,000.00 Property, plant and equipment - net 6.10 108,182,166,353.72 111,805,660,295.60 105,995,565,167.80 109,398,661,834.03 Assets under construction 6.11 6,154,117,881.81 5,855,330,700.22 6,154,117,881.81 5,855,330,700.22 Intangible assets 6.12 1,029,199,964.25 1,045,450,652.88 1,029,199,964.25 1,045,450,652.88 Other non - current assets 6.13 5,222,870,555.28 5,063,684,401.25 5,222,870,555.28 5,063,684,401.25 Total non - current assets 121,769,853,514.92 124,324,489,108.33 159,180,805,007.12 161,532,130,588.38 Total assets 146,455,973,007.53 143,466,984,893.64 183,667,307,085.19 180,576,974,091.37
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
Notes
2007
(Adjusted)
2007
(Adjusted)
Liabilities and shareholders’ equity Current liabilities Trade accounts payables 505,069,868.31 924,055,458.52 339,166,054.60 788,151,810.72 Work in process payables 108,098,250.14 1,229,233,331.48 108,098,250.14 1,229,233,331.48 Corporate income tax payable 339,782,446.97 624,190,821.57 339,782,446.97 624,190,821.57 Accrued expenses 2,709,446,981.87 2,987,646,211.43 2,773,925,424.65 3,034,849,686.02 Current portion of long - term loans 6.16 1,861,573,394.89 1,418,392,233.29 1,713,173,394.89 1,307,092,233.29 Promissory notes 6.14 - 10,000,000.00 38,483,807,107.71 38,483,807,107.71 Refundable and guarantee deposits 182,244,749.68 175,048,679.63 182,239,216.68 175,043,146.63 Other current liabilities 6.15 4,682,376,761.49 3,629,822,651.51 4,665,799,674.95 3,609,462,008.69 Total current liabilities 10,388,592,453.35 10,998,389,387.43 48,605,991,570.59 49,251,830,146.11 Non - current liabilities Long - term loans 6.16 58,564,516,506.32 52,840,027,292.30 57,193,456,506.32 51,421,327,292.30 AAT staff pension fund 6.17 38,941,079.00 45,007,712.48 38,941,079.00 45,007,712.48 Advance received from concession - 4,460,000,000.00 - 4,460,000,000.00 revenue Other non - current liabilities 6.18 1,155,528,960.03 5,446,328,880.53 1,153,144,231.06 5,428,609,747.59 Total non - current liabilities 59,758,986,545.35 62,791,363,885.31 58,385,541,816.38 61,354,944,752.37 Total liabilities 70,147,578,998.70 73,789,753,272.74 106,991,533,386.97 110,606,774,898.48
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Shareholders’ equity Share capital 6.19 Authorized share capital 1,428,570,000 ordinary shares of Baht 10 each 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 Issued and fully paid - up 1,428,570,000 ordinary shares of Baht 10 each 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 14,285,700,000.00 Premium on common stocks 12,567,669,242.63 12,567,669,242.63 12,567,669,242.63 12,567,669,242.63 Unrealized gain on change in 169,260,000.00 251,160,000.00 169,260,000.00 251,160,000.00 value of investment Retained earnings Appropriated - Legal reserve 1,428,570,000.00 1,428,570,000.00 1,428,570,000.00 1,428,570,000.00 Unappropriated 47,599,934,819.22 40,850,307,728.53 48,224,574,455.59 41,437,099,950.26 Total parent shareholders’ equity 76,051,134,061.85 69,383,406,971.16 76,675,773,698.22 69,970,199,192.89 Minority interest 257,259,946.98 293,824,649.74 - - Total shareholders’ equity 76,308,394,008.83 69,677,231,620.90 76,675,773,698.22 69,970,199,192.89 Total liabilities and shareholders’ equity 146,455,973,007.53 143,466,984,893.64 183,667,307,085.19 180,576,974,091.37
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF INCOME FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Operating revenues Landing and parking charges 4,216,347,087.06 3,937,398,190.24 4,216,347,087.06 3,937,398,190.24 Passenger service charges 10,417,014,355.44 8,781,477,837.24 10,417,014,355.44 8,781,477,837.24 Aircraft service charges 431,753,772.00 427,099,436.29 431,753,772.00 427,099,436.29 Office and state property rents 1,480,644,986.59 1,524,609,856.42 1,503,324,986.59 1,547,289,856.42 Service revenues 3,164,293,042.18 2,818,541,249.62 2,445,224,332.21 2,175,992,917.24 Concession revenues 2,300,812,726.57 2,012,283,931.37 2,315,855,925.67 2,025,900,262.19 Total operating revenues 22,010,865,969.84 19,501,410,501.18 21,329,520,458.97 18,895,158,499.62 Operating expenses Personnel expenses 3,909,003,249.71 2,927,842,273.10 3,904,204,764.43 2,924,344,143.71 Operating expenses 5,100,310,429.64 5,730,128,875.22 4,650,568,876.43 5,323,710,883.58 Repair and maintenance 683,958,088.13 732,378,685.46 683,958,088.13 732,378,685.46 State property rental 6.22 955,728,995.98 846,318,824.62 955,728,995.98 846,318,824.62 Depreciation and amortization 7,866,887,359.25 7,768,007,172.49 7,642,077,350.08 7,552,525,786.23 Total operating expenses 18,515,888,122.71 18,004,675,830.89 17,836,538,075.05 17,379,278,323.60 Operating income 3,494,977,847.13 1,496,734,670.29 3,492,982,383.92 1,515,880,176.02 Other incomes Law Compensation Revenues 6.25 8,331,532,705.39 - 8,331,532,705.39 - Interest income 566,650,671.58 693,302,924.11 564,437,627.49 692,633,882.99 Gain on sales of assets 5,898,714.25 1,293,714.83 5,898,714.25 1,293,714.83 Other income 262,475,207.16 291,145,659.45 262,472,785.49 286,717,225.12 Total other incomes 9,166,557,298.38 985,742,298.39 9,164,341,832.62 980,644,822.94
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF INCOME FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated The Company Notes
2008
2007
(Adjusted)
2008
2007
(Adjusted)
Other expenses Loss (gain) on foreign exchange 6.26 928,721,631.36 (2,804,543,423.41) 928,721,631.36 (2,804,543,423.41) Other expenses 425,408,676.18 67,308,497.86 425,408,676.18 67,308,497.86 Other expenses 1,354,130,307.54 (2,737,234,925.55) 1,354,130,307.54 (2,737,234,925.55) Share of profit (loss) from - - investments under equity method 17,087,263.50 (48,092,932.74) Profit before interest and income tax expenses 11,324,492,101.47 5,171,618,961.49 11,303,193,909.00 5,233,759,924.51 Interest expenses 2,569,798,136.56 2,397,166,007.14 2,474,087,826.69 2,316,045,622.44 Income tax expenses 1,470,205,064.18 1,722,755,472.46 1,470,205,064.18 1,722,755,472.46 Net profit before minority interest 7,284,488,900.73 1,051,697,481.89 7,358,901,018.13 1,194,958,829.61 Net loss of minority interest 36,564,702.76 38,061,365.99 - - Net profit 7,321,053,603.49 1,089,758,847.88 7,358,901,018.13 1,194,958,829.61 Basic earnings per share 5.12 0.76 5.15 0.84
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
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annual report 2008
Unit : Baht
Consolidated
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
Issued and fully Unrealized gain on paid - up Premium on change in value Retained share capital common stocks of investment Legal reserve earnings Minority interest Total Notes Balance as at October 1, 2006 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,332,825,975.36 332,453,412.20 71,163,518,630.19 Effect of change in accounting 4.2 - - - - (851,094.71) (567,396.47) (1,418,491.18) policy : subsidiary Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,331,974,880.65 331,886,015.73 71,162,100,139.01 Unrealized gain on change in value - - 34,860,000.00 - - - 34,860,000.00 of investment Net profit - - - - 1,089,758,847.88 - 1,089,758,847.88 Dividend - - - - (2,571,426,000.00) - (2,571,426,000.00) - - - - - (38,061,365.99) (38,061,365.99) Minority interest Balance as at September 30, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,850,307,728.53 293,824,649.74 69,677,231,620.90 Balance as at October 1, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,856,265,393.15 297,796,426.14 69,687,161,061.92 Effect of change in accounting 4.2 - - - - (5,957,664.62) (3,971,776.40) (9,929,441.02) policy : subsidiary Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,850,307,728.53 293,824,649.74 69,677,231,620.90 Unrealized gain on change in value - - (81,900,000.00) - - - (81,900,000.00) of investment Net profit - - - - 7,321,053,603.49 - 7,321,053,603.49 Dividend 6.21 - - - - (571,426,512.80) - (571,426,512.80) Minority interest - - - - - (36,564,702.76) (36,564,702.76) Balance as at September 30, 2008 14,285,700,000.00 12,567,669,242.63 169,260,000.00 1,428,570,000.00 47,599,934,819.22 257,259,946.98 76,308,394,008.83
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
annual report 2008
129
Unit : Baht
The Company
The accompanying notes are an integral part of these financial statements. (Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
Issued and fully Unrealized gain on paid - up Premium on change in value Retained Notes Legal reserve Total share capital common stocks of investment earnings Balance as at October 1, 2006 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,332,825,975.36 70,831,065,217.99 Effect of the change of investment policy 4.1 - - - - 480,741,145.29 480,741,145.29 Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 216,300,000.00 1,428,570,000.00 42,813,567,120.65 71,311,806,363.28 Unrealized gain on change in value of investment - - 34,860,000.00 - - 34,860,000.00 Net profit - - - - 1,194,958,829.61 1,194,958,829.61 - - - - (2,571,426,000.00) (2,571,426,000.00) Dividend Balance as at September 30, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 41,437,099,950.26 69,970,199,192.89 Balance as at October 1, 2007 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 40,856,265,393.15 69,389,364,635.78 Effect of the change of investment policy 4.1 - - - - 580,834,557.11 580,834,557.11 Balance at the beginning - after adjustment 14,285,700,000.00 12,567,669,242.63 251,160,000.00 1,428,570,000.00 41,437,099,950.26 69,970,199,192.89 Unrealized gain on change in value of investment - - (81,900,000.00) - - (81,900,000.00) Net profit - - - - 7,358,901,018.13 7,358,901,018.13 Dividend 6.21 - - - - (571,426,512.80) (571,426,512.80) Balance as at September 30, 2008 14,285,700,000.00 12,567,669,242.63 169,260,000.00 1,428,570,000.00 48,224,574,455.59 76,675,773,698.22
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Cash flows from operating activities Net profit 7,321,053,603.49 1,089,758,847.88 7,358,901,018.13 1,194,958,829.61 Adjustment to reconcile net profit to net cash provided by (paid from) operating activities : Doubtful account (42,357,111.64) 255,152,860.76 (43,963,774.64) 255,005,221.76 Allowance for damaged and obsolete supplies (22,392,913.86) 4,142,265.99 (22,392,913.86) 4,142,265.99 Depreciation and amortization 7,866,887,359.25 7,768,007,172.49 7,642,077,350.08 7,552,525,786.23 Loss (gain) on foreign exchange 1,048,525,912.12 (2,523,217,361.02) 1,048,525,912.12 (2,523,217,361.02) Gain on disposal property, plant and (5,203,514.43) (939,135.38) (5,203,514.43) (939,135.38) equipment Share of (profit) loss from investments (17,087,263.50) 48,092,932.74 - - under equity method Deferred (income) expense (4,458,233,333.35) 9,971,942.15 (4,458,233,333.35) 9,971,942.15 Provision for contigent liabilties 425,330,761.18 30,219,374.00 425,330,761.18 30,219,374.00 Dividend income (29,413,700.00) (24,602,000.00) (29,413,700.00) (24,602,000.00) Net loss of minority interest (36,564,702.76) (38,061,365.99) - - Operating profit before changes in operating assets and liabilities 12,050,545,096.50 6,618,525,533.62 11,915,627,805.23 6,498,064,923.34
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Decrease (increase) in operating assets Trade account receivables 177,542,466.73 (1,290,997,186.03) 182,098,485.76 (1,230,605,778.07) Other receivables (77,565,298.53) 188,201,367.11 (71,904,281.91) 159,224,174.93 Supplies (56,334,369.52) (55,561,175.65) (56,397,145.22) (52,598,615.65) Accrued income (377,461,774.40) (815,626,520.40) (361,610,546.73) (830,325,612.87) Other current assets 35,895,934.54 150,671.76 37,788,087.05 (199,434.15) Increase (decrease) in operating liabilities Trade account payables (395,193,501.61) 737,180,954.64 (425,193,667.52) 679,831,823.62 Corporate income tax payable (284,408,374.60) 70,522,046.93 (284,408,374.60) 70,522,046.93 Accrued expenses (277,492,029.74) 765,378,577.58 (260,292,061.55) 709,752,410.58 Refundable and guaranteed deposits 7,196,070.05 27,136,794.58 7,196,070.05 27,459,078.58 AAT staff pension fund (6,066,633.48) (362,321.75) (6,066,633.48) (362,321.75) Other current liabilities 1,041,292,470.89 (938,941,022.10) 1,045,076,027.17 (957,767,753.12) Net cash from operating activities 11,837,950,056.83 5,305,607,720.29 11,721,913,764.25 5,072,994,942.37
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Cash flows from investing activities Increase in current investments (7,054,578,266.47) (3,282,336,753.10) (7,054,578,266.47) (3,282,336,753.10) Cash received from sale of assets 5,246,634.09 964,212.53 5,246,634.09 964,212.53 Dividend received from investments 29,413,700.00 24,602,000.00 29,413,700.00 24,602,000.00 Invested in property, plant and (5,666,365,718.58) (7,473,282,306.63) (5,661,952,985.06) (7,269,968,798.33) equipment and work in progress Invested in intangible assets (100,183,630.73) (183,956,335.63) (100,183,630.73) (183,956,335.63) Increase in long - term investments (691,948,437.98) - (691,948,437.98) - Increase in other non - current assets (1,541,590,304.16) (1,341,027,631.06) (1,541,590,304.16) (1,342,402,964.42) Increase in other non - current liabilities 1,279,041,039.70 556,539,704.27 1,294,375,443.67 772,025,314.96 Net cash used in investing activities (13,740,964,984.13) (11,698,497,109.62) (13,721,217,846.64) (11,281,073,323.99) Cash flows from financing activities Cash paid from bank overdrafts (10,000,000.00) (28,978,147.16) - - Cash paid for repayment of long - term loan (1,565,884,650.65) (1,087,942,662.42) (1,454,584,650.65) (1,087,942,662.42) Increase in long - term loan 2,256,303,749.02 1,910,099,910.31 2,155,543,749.02 1,680,099,910.31 Dividend payment (571,426,512.80) (3,928,567,500.00) (571,426,512.80) (3,928,567,500.00) Net cash from (used in) financing activities 108,992,585.57 (3,135,388,399.27) 129,532,585.57 (3,336,410,252.11)
The accompanying notes are an integral part of these financial statements.
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
Unit : Baht
Consolidated 2008
The Company 2008
2007
(Adjusted)
2007
(Adjusted)
Net decrease in cash and cash equivalents (1,794,022,341.73) (9,528,277,788.60) (1,869,771,496.82) (9,544,488,633.73) Cash and cash equivalents at the 10,231,387,965.24 19,759,665,753.84 10,208,038,131.42 19,752,526,765.15 beginning of the periods Cash and cash equivalents at the end of the periods 8,437,365,623.51 10,231,387,965.24 8,338,266,634.60 10,208,038,131.42 Supplementary cash flows information Cash paid during the periods Interest expenses 2,694,945,424.74 2,231,486,459.06 2,599,235,114.87 2,150,366,074.36 Corporate Income tax 1,754,602,653.89 1,771,929,737.83 1,754,407,927.71 1,771,781,887.50
The accompanying notes are an integral part of these financial statements.
(Signed) Serirat Prasutanond (Serirat Prasutanond) Acting President
(Signed) Supaporn Burapakusolsri (Supaporn Burapakusolsri) Senior Executive Vice President
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AIRPORTS OF THAILAND PUBLIC COMPANY LIMITED AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
1. General Information
The Airports of Thailand Public Company Limited (AOT), which was registered as a public limited company on September 30, 2002 and whose head office is located at No. 333, Cherdwutagard Road, Don Mueang, Bangkok 10210, performs and promotes the business operation of international airports as well as related businesses.
At present, the Company operates six international airports: Suvarnabhumi Airport, Don Mueang Airport, and four Regional International Airports (Chiang Mai, Hat Yai, Phuket and Chiang Rai). As at September 30, 2008, there were 4,057 staff and employees in AOT.
2. Basis for the Presentation of Financial Statements
The financial statements of the AOT comprise its consolidated financial statements and the company financial statements. 2.1 The consolidated financial statements present financial position and results of AOT and its subsidiaries’ operations. The subsidiaries are New Bangkok International Airport Co., Ltd.-under liquidation (NBIA) and Suvarnabhumi Airport Hotel (SAH). AOT holds 100% and 60% of shares, respectively. 2.2 The company financial statements present the financial position and results of operations of Suvarnabhumi Airport which was transferred from NBIA since January 1, 2006, Don Mueang Airport, 4 Regional International Airports, and the Airports Authority of Thailand Pension Fund. Material intercompany related transactions and balances have been eliminated.
3. Summary of Significant Accounting Policies
These financial statements have been prepared in conformity with the Accounting Professions Act , B.E. 2547 (2004) The significant accounting policies are: 3.1 Revenue recognition 3.1.1 Landing and parking charges, passenger service charges, use of utilities charges, and service charges are recognized as revenues in the accounting period in which services are provided. 3.1.2 Rent for offices and real estate properties, and concession revenues are recognized as revenues according to the period of time and commission rates specified in the contract. 3.1.3 Revenues from hotel business and restaurant are recognized as revenues in accordance with the price in invoice (excluding VAT) for goods and services after discount and added service charges. 3.1.4 Interest income is recognized according to the period of time to which it applies, taking into account the actual rate of return. 3.1.5 Dividends are recognized when the dividend payment is announced. 3.1.6 Expenses are recorded by accrual basis.
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3.2 Allowance for doubtful accounts Allowance for doubtful accounts is set up by considering the estimated losses expected to be incurred as a result of non-payment by accounts receivable, based on past collection experience and the current status of accounts receivable as of the balance sheet date. Bad debts are written off as they are identified during the year. 3.3 Inventories and supplies Inventories are stated at cost or net realizable value whichever is lower. The cost of inventories is calculated by weighted average method. Inventories cost is comprised of purchasing cost and other direct expenses related to that purchasing. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of that sale. Supplies are recorded at weighted average cost. For those with no movement for over 5 years, provision for obsolescence is made at a full amount. 3.4 Investments 3.4.1 Long-term investment Investments in non-marketable equity securities are recognized as general investments and stated at cost adjusted for impairment. 3.4.2 Investment in equity securities Investments in marketable equity securities available for sale are stated at fair value. Unrealized gains or losses on changes in valuation are shown as separate items under shareholders equity. 3.4.3 Investments in subsidiaries and associates are recorded according to the equity method and presented in the company’s financial statements by cost method. 3.5 Property, plant and equipment Property, plant and equipment are recorded at cost as of the date of acquisition or at the completion date. All AOT buildings are constructed on state properties leased from the Treasury Department, Ministry of Finance. According to the regulations of the Ministry of Finance and the Royal Thai Air Force, all constructions become
the property of the Ministry of Finance upon completion. However, the AOT records such properties as assets since the AOT accepts all risks and benefits of such properties, and pays compensation for the use of state properties to
the Treasury Department. After AOT was converted to a limited public company, the Ministry of Finance and
the Royal Thai Air Force issued a new regulation. Moreover, the Ministry of Finance and the Department of Commercial Aviation issued 2 new regulations. These new regulations came into effect on September 30, 2002. Clause 8 of three new regulations stated that the ownership of the buildings and constructions will belong to
the Ministry of Finance when the contract to use the state property land made under these regulations is terminated. The total period of time shall not exceed 50 years from the effective date of utilization agreement. AOT had committed to 4 utilization agreements since September 30, 2002 and amended 1 utilization agreement on September 28, 2004. The use of state property land lasts for 30 years (September 30, 2032). AOT is allowed to extend the period for using state property land 2 times, 10 years each extension (September 30, 2052). AOT has paid compensation for using state property to the Treasury Department as Note 6.22. Depreciation expense for operating equipment for hotel business is recorded in accordace with the estimated useful life of assets.
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Calculation of depreciation is made by straight -line method according to the estimated useful life of each type of assets as follows: Building, construction, and landscape architecture Electricity, water, fuel and communication systems Machinery, tools & appliances, and equipment Vehicles Furniture, fixture and office equipment
Useful life of acquired assets (years) Before September 28, 2002 Since September 28, 2002 10 - 30 10 - 20 5 - 10 5 - 8 5
20 - 50 10 - 20 5 - 10 5 - 8 3 - 10
3.6 Foreign currency transactions Foreign currency transactions are translated into Baht at the rate ruling on the transactions date. Assets and liabilities dominated in foreign currency remaining at the balance sheet date are translated into Baht at the exchange rate as referred to the reference of the date notified by the Bank of Thailand. Gains or losses on currency exchange are recognized as incomes or expenses in the statement of income. 3.7 Interest on loans Interest on loans arises from loans for the projects under construction which is a part of construction cost and will be recognized as an expense upon completion. 3.8 Employee benefits AOT has established a provident fund for staff and employees who voluntarily participate in the fund, since March 28, 1994, in accordance with the Provident Fund Act, B.E. 2530 (1987). Staff and employees themselves are required to contribute at the rates ranging from 2-10% of their salaries and shall not exceed AOT contribution rates. According to AOT board of directors’ resolution at the meeting No. 9/2005 dated June 30, 2005, the AOT contribution rates are adjusted as follows: Years of employment
AOT contribution rates
Not over 10 years Over 10 years Over 20 years Over 25 years
9 10 12 15
Members can change the rate of contribution from 2-15% according to their employment periods. Such change will be effective in October each year. AOT contributions are recognized as expenses in the statement of income in which they incurred. The provident fund is separated from AOT and managed by provident fund management company.
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3.9 Cash and cash equivalents Cash and cash equivalents include cash on hand and at bank maturing within 3 months. 3.10 Corporate income tax Since AOT securities have been registered in the Stock Exchange of Thailand (SET) on March 11, 2004, its corporate income tax rate was reduced from 30% to 25% of net profit after adjusting certain provisions and expenses not complying with the principles of the Revenue Department, starting from the accounting period of October 1, 2004 to September 30, 2009. 3.11 Intangible assets Intangible assets are presented at cost deducted by accumulated amortization expense. Intangible assets comprise of: - Software licenses which can be detached from the related equipment are amortized on a straight line basis according to the 5-10 years estimated useful life of assets. - Compensation for noise impact is paid to entities / owners for reengineering building and construction in order to prevent noise impact incurred from the operations of Suvarnabhumi Airport. The compensation is amortized by straight - line method for 20 years 3.12 Basic earnings per share Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares issued during the year. 3.13 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates for certain accounts that affect the amount reported in the financial statements and notes related thereto. Subsequent actual results may differ from these estimates. 3.14 Cross currency and interest rate swap contracts The financial derivative was made with an objective to prevent the risk under accrual basis. Gains and losses from Baht conversion were recognized in the statement of income. Interest was applied to accounting policy as stated in item 3.7
4. Changes in Accounting Policies
4.1 Since October 1, 2007, AOT has changed the method to account for investments in subsidiaries and associates presented in the company’s financial statements from the equity method to the cost method in accordance with the Thai Accounting Standard No. 44 “Consolidated and Separate Financial Statements” (revised 2007), which states that investments in subsidiaries, associates, and jointly controlled entities must be presented by the cost method in the company’s financial statements. These changes in accounting policy resulted in applying retrospective method to the company’s financial statements for the prior period that presented comparatively as if AOT always used the cost method for investments in subsidiaries, joint venture, and associates. As a result, net income for 2007 increased by Baht 100.09 million.
The retained earnings as at October 1, 2006 and 2007 increased by Baht 480.74 million and Baht 580.83 million, respectively.
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4.2 Subsidiary (Suvarnabhumi Airport Hotel Co., Ltd.: SAH) has changed accounting policy related to record of operating equipment expense from recording as expense when used to recording as depreciation expense in accordance with expected useful life of asset. This change in accounting policy resulted in applying retrospective method to SAH’s financial statements for the prior period that presented comparatively as if SAH always recorded depreciation expense of operating equipment. According to this change, net income for 2007 decreased Baht 5.11 million. As a result, the retained earnings as at October 1, 2006 and 2007 decreased Baht 0.85 million and Baht 5.96 million, respectively.
5. Segmented Financial Information
AOT and subsidiary have 2 main segments, which are airport business and hotel business. In 2008 and 2007, AOT and its subsidiary have no substantial activities in segments. AOT, therefore, has neither presented financial information by business segments nor geographical segments.
6. Supplementary Information 6.1 Cash and cash equivalents Unit : Million Baht
Consolidated 2008
The Company 2008
2007
2007
Cash 618.15 176.30 617.09 175.24 Bank deposits (95.63) (115.38) (82.63) Current account (95.18) Savings deposits 1,622.90 2,599.89 1,511.86 2,557.40 Fixed deposits 4,500.00 7,500.00 4,500.00 7,500.00 Bonds 1,718.77 - 1,718.77 - Savings deposit at the AAT Savings and 73.18 70.58 73.18 70.58 Credit Cooperative Limited Total 8,437.37 10,231.39 8,338.27 10,208.04
As at September 30, 2008 and 2007, the bank deposits include the deposit of the AAT Staff Pension Fund in the savings deposits of Baht 8.0 million and Baht 7.98 million, respectively. The savings deposits at the AAT Savings and Credit Cooperatives Limited, amounting to Baht 73.18 million and Baht 70.58 million, respectively, are the deposits of
the AAT Staff Pension Fund, received an approval from the Ministry of Finance (the letter of the Ministry of Finance No.MF 0511/59136, dated December 9, 1992).
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6.2 Current investments Consolidated and The Company Unit : Million Baht
2008 2007 Fixed deposits Bonds Total
6,903.35 4,654.48 11,557.83
4,503.25 - 4,503.25
Fixed deposits and Bonds are over 3 months but not over 1 year . As at September 30, 2008 and September 30, 2007, fixed deposits include the deposits of the AAT Staff Pension Fund in the amount of Baht 3.35 million and Baht 3.25 million, respectively. 6.3 Trade accounts receivable - net Unit : Million Baht
Consolidated 2008
The Company 2008
Third parties Related parties Total Less : Allowance for doubtful accounts Trade accounts receivable - net
2,104.76 42.57 2,147.33 493.00 1,654.33
2007
2,252.22 72.65 2,324.87 535.36 1,789.51
2,027.50 46.53 2,074.03 491.25 1,582.78
2007
2,180.98 75.15 2,256.13 535.21 1,720.92
The allowance for doubtful accounts of Baht 493.00 million consists of 7 on going legal cases accounted for
Baht 9.41 million, 8 cases under process of gathering evidence for further legal action accounting for Baht 17.53 million, 3 cases under consideration of the State attorney for Baht 191.71 million, 1 case under installment payment for
Baht 47.86 million and 128 cases in the process of negotiation and pursuing totaling Baht 226.49 million.
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Trade accounts receivable are classified as follows: Unit : Million Baht
Consolidated 2008
The Company 2008
Not overdue Not over 6 months Over 6 months - 1 year Over 1 year - 2 years Over 2 years Total
1,289.21 259.85 86.79 188.73 322.75 2,147.33
2007
801.65 752.47 427.83 56.77 286.15 2,324.87
1,264.75 235.44 79.28 171.81 322.75 2,074.03
2007
771.12 729.13 412.96 56.77 286.15 2,256.13
6.4 Other receivables Unit : Million Baht
Consolidated 2008
The Company 2008
Receivables from the Revenue Department Receivables from extended credit Other receivables Total
1,246.83 8.00 14.31 1,269.14
2007
1,247.43 5.74 18.01 1,271.18
1,246.68 8.00 0.70 1,255.38
2007
1,246.68 5.74 10.59 1,263.01
Receivables from the Revenue Department amounting to Baht 1,246.83 million in the consolidated financial statements as at September 30, 2008, include Baht 0.15 million of SAH input tax refund and Baht 1,246.68 million of AOT input tax refund. AOT input tax refund was the input tax incurred from the construction of Suvarnabhumi Airport during June 1996 - December 2005 and transferred from NBIA on January 1, 2006. Referring to the input tax refund process, the Council of State considered that AOT, as the one that NBIA was transferred to in accordance with
the cabinet’s resolution and business transferring contract, is entitle to the right and responsibility transferred from NBIA to apply for the VAT refund (input tax). However, AOT must act in accordance with criteria stated in the Revenue Code and other related law.
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AOT acted according to the criteria set by the Revenue Department. AOT filed the estimation of use of building space to the Revenue Department and requested an extension to file details of building construction and use to the Director General of the Revenue Department. At present, it is under the consideration of the Revenue Department. 6.5 Inventories and supplies - net Unit : Million Baht
Consolidated 2008
The Company 2008
Inventories and supplies Less: Allowance for damaged and obsolete supplies Inventories and supplies - net
2007
2007
210.33
153.99
202.36
145.96
0.62
23.01
0.62
23.01
209.71
130.98
201.74
122.95
6.6 Other current assets Unit : Million Baht
Consolidated 2008
The Company 2008
Accrued input tax Other Current assets Total
144.47 45.93 190.40
2007
177.58 48.72 226.30
133.80 42.03 175.83
2007
168.21 45.41 213.62
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6.7 Investments in Subsidiaries and Associates Consolidated Unit : Million Baht
Name of Company
Percentage of shareholding (%) 2008
2007
Investments Cost method Equity method 2008 2007 2008 2007
Associated Company Thai Airport Ground Services Co.,Ltd. 28.50 28.50 149.62 149.62 191.74 174.65 Total 149.62 149.62 191.74 174.65
The unaudited financial statements were used for the recording of investments in associates under equity method. Associates adjusted transactions in order to disclose investments with the same accounting policy as AOT. The Company Unit : Million Baht
Name of Company
Percentage of shareholding (%) 2008
2007
Investments Cost method 2008 2007
Subsidiaries New Bangkok International Airport Co.,Ltd. (NBIA) - under 100.00 100.00 39,029.00 39,029.00 liquidation Suvarnabhumi Airport Hotel Co., Ltd. (SAH) 60.00 60.00 610.67 610.67 Associated Company Thai Airport Ground Services Co., Ltd. 28.50 28.50 149.62 149.62 Total 39,789.29 39,789.29
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6.8 Other long-term investments Consolidated and The Company Name of Company
Percentage of shareholding (%)
Unit : Million Baht
At Cost
Fair Value
Book Value
2008 2007 2008 2007 2008 2007 2008 2007
1. Investments stated at cost Airport Duty Free Co., Ltd. 10.00 10.00 20.00 20.00 - - 20.00 20.00 Phuket Air Catering Co., Ltd. 10.00 10.00 10.00 10.00 - - 10.00 10.00 Airport Associated Co., Ltd. 10.00 10.00 3.00 3.00 - - 3.00 3.00 Don Mueang International Airport Hotel Co.,Ltd. 9.00 9.00 10.80 10.80 - - 10.80 10.80 King Power Duty Free Co., Ltd. 5.00 5.00 10.00 10.00 - - 10.00 10.00 Fuel Pipeline Transportation Co., Ltd. 1.38 1.38 22.00 22.00 - - 22.00 22.00 Trade Siam Co., Ltd. 1.50 1.50 0.75 0.75 - - 0.75 0.75 Thai Aviation Fuel service Co., Ltd. 10.00 10.00 53.00 53.00 - - 53.00 53.00 Less: Allowance for impairment in value of investments : Thai Aviation Fuel Service Co.,Ltd. (22.00) (22.00) - - (22.00) (22.00) Total 107.55 107.55 - - 107.55 107.55 2. Investment stated at Fair Value Bangkok Aviation Fuel Service 4.94 4.94 21.00 21.00 190.26 272.16 190.26 272.16 Public Company Limited (BAFS) 3. Bonds 691.95 - - - 691.95 - Grand Total 820.50 128.55 190.26 272.16 989.76 379.71
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6.9 Related party transactions The related party transactions are included in the financial statements based on normal business as follows: Unit : Million Baht
Consolidated 2008 2007
The Company 2008 2007
6.9.1 Trade accounts receivable Thai Airport Ground Services Co., Ltd. 14.74 50.36 14.74 50.36 Phuket Air Catering Co., Ltd. 0.37 0.33 0.37 0.33 Suvarnabhumi Airport Hotel Co.,Ltd. - - 3.96 2.50 King Power Duty Free Co., Ltd. 8.12 - 8.12 - Bangkok Aviation Fuel Service Plc. 19.34 21.96 19.34 21.96 Total 42.57 72.65 46.53 75.15 6.9.2 Accrued income Thai Aviation Fuel Service Co.,Ltd. 9.53 9.72 9.53 9.72 King Power Duty Free Co., Ltd. 620.91 - 620.91 - Suvarnabhumi Airport Hotel Co.,Ltd. - - - 15.18 Total 630.44 9.72 630.44 24.90 6.9.3 Trade accounts payable Thai Airport Ground Services Co., Ltd. 10.91 51.42 10.91 51.42 Suvarnabhumi Airport Hotel Co.Ltd. - - - 0.08 Total 10.91 51.42 10.91 51.50 6.9.4 Accrued expenses Thai Airport Ground Services Co., Ltd. 34.03 9.92 34.03 9.92 Suvarnabhumi Airport Hotel Co.,Ltd. - - 0.01 0.75 Total 34.03 9.92 34.04 10.67 6.9.5 Revenue received in advance Suvarnabhumi Airport Hotel Co.,Ltd. - - 1.89 1.89
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Unit : Million Baht
Consolidated 2008 2007
The Company 2008 2007
6.9.6 Other accounts payable Suvarnabhumi Airport Hotel Co.,Ltd. - - 0.03 - 6.9.7 Revenues and expenses Operating revenues Thai Airport Ground Services Co., Ltd. 56.09 93.69 56.09 93.69 Phuket Air Catering Co., Ltd. 16.84 10.86 16.84 10.86 Don Mueang International Airport Hotel Co., Ltd. 5.53 5.53 5.53 5.53 Bangkok Aviation Fuel Service Plc. 278.65 274.63 278.65 274.63 Thai Aviation Fuel Service Co.,Ltd. 10.55 9.08 10.55 9.08 Suvarnabhumi Airport Hotel Co.,Ltd. - - 75.33 71.51 Total 367.66 393.79 442.99 465.30 Operating expenses Thai Airport Ground Services Co., Ltd. 360.98 364.04 360.98 364.04 Suvarnabhumi Airport Hotel Co.,Ltd. - - 0.57 2.44 Total 360.98 364.04 361.55 366.48 Other revenues King Power Duty Free Co., Ltd. 4,758.25 29.41 4,758.25 29.41 Other expenses Thai Airport Ground Services Co., Ltd. 4.37 4.37 4.37 4.37
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6.10 Property, plant and equipment - net Unit : Million Baht
Consolidated
The Company
Building & Building &
Construction Equipment Total Construction Equipment Total Cost As at October 1, 2007 98,063.65 37,355.86 135,419.51 95,958.67 36,799.08 132,757.75 Additions 2,652.54 1,493.23 4,145.77 2,632.76 1,489.83 4,122.59 Reclassification (14.66) 14.66 - (14.66) 14.66 - Disposals - (60.96) (60.96) - (42.20) (42.20) As at September 30, 2008 100,701.53 38,802.79 139,504.32 98,576.77 38,261.37 136,838.14 Accumulated Depreciation As at October 1, 2007 12,548.37 11,065.48 23,613.85 12,412.78 10,946.31 23,359.09 Depreciation for the Period 2,660.80 5,089.65 7,750.45 2,543.37 4,982.26 7,525.63 Disposals - (42.15) (42.15) - (42.15) (42.15) As at September 30, 2008 15,209.17 16,112.98 31,322.15 14,956.15 15,886.42 30,842.57 Book Value - net As at October 1, 2007 85,515.28 26,290.38 111,805.66 83,545.89 25,852.77 109,398.66 As at September 30, 2008 85,492.36 22,689.81 108,182.17 83,620.62 22,374.95 105,995.57
6.11 Assets under construction Consolidated and The Company Unit : Million Baht
Suvarnabhumi Airport Regional Airport Don Mueang Airport Total As at October 1, 2007 5,745.11 108.89 1.33 5,855.33 Addition 4,028.08 203.26 16.88 4,248.22 Transfer to property, plant and (3,676.44) (260.55) (12.44) (3,949.43) equipment As at September 30, 2008 6,096.75 51.60 5.77 6,154.12
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6.12 Intangible assets Consolidated and The Company Unit : Million Baht
At Cost Written off Book Value As at October 1, 2007 Addition/(Disposal) during the Period As at September 30, 2008
1,240.07 100.18 1,340.25
194.62 116.43 311.05
1,045.45 (16.25) 1,029.20
6.13 Other non-current assets Consolidated and The Company Unit : Million Baht
2008 2007 Unused land and Construction Less : Allowance for impairment of unused land Unused land and construction - net Advance payment Guaranteed money Receivables-The State Railway of Thailand Cross Currency Swap Account in arrears Total
1,834.53 971.66 862.87 18.94 0.69 4,075.69 264.68 - 5,222.87
1,730.67 971.66 759.01 75.31 0.67 3,996.16 - 232.53 5,063.68
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6.13.1 Unused Land and Construction
As at September 30, 2008, AOT has net unused land and construction amounting to Baht 862.87 million as follows : - There is 692 Rai, 2 Ngan, and 22 Square Wa of unused land at Suvarnabhumi Airport. The book value is Baht 1,730.67 million, less allowance for impairment of unused land of Baht 971.66 million, the unused land - net is amounting to Baht 759.01 million. AOT has policy to conduct a feasibility study for employees’ residence project. With reference to the Board of Directors’ resolution No. 22/2007 dated July 19, 2007, the International Civil Aviation Organization (ICAO) will be employed to study and revise the master plan for the development of Suvarnabhumi and Don Mueang airports. Part of the objectives is to fully utilize and develop the land at Suvarnabhumi Airport. Therefore, AOT slows down the feasibility study and waits for the study of ICAO. - AOT repurchased land and construction amounting to Baht 103.86 million from people who are affected by noise impact. AOT’s policy is to hire an assets management company to manage the sales and auctions for such assets. 6.13.2 Receivables-The State Railway of Thailand
The cabinet approved the Airport Rail Link Project (Payathai-Makkasan-Suvarnabhumi Airport) which has been operated by the State Railway of Thailand (SRT). However, some parts of the construction were under SAH building, therefore, investment for those parts of construction was paid by NBIA in accordance with the cabinet’s resolution on June 1, 2004. AOT (by NBIA) committed to a construction contract valued of Baht 4,362.19 million (VAT included). The Ministry of Transport proposed the budget of Baht 4,082.94 million to construct the tunnel. As at September 30, 2008, AOT (NBIA) has paid Baht 4,075.69 million (VAT included) for construction and recorded SRT as debtor. The unpaid balance was Baht 286.50 million. On December 18, 2007, the cabinet approved the State Railway of Thailand (SRT) to borrow Baht 9,940.322 million of loan which guaranteed by the Ministry of Finance. SRT must pay AOT for the construction of the station building and tunnel (including interest) as proposed by the Ministry of Transport. The Ministry of Finance and the Bureau of Budget will consider the method and condition of loan. 6.14 Promissory Notes The Company
AOT has issued promissory note to NBIA amounting to Baht 38,483.81 million on January 1, 2006 for discrepancy between the assets and liabilities transferred from NBIA, 0.5 % of interest rate per annum. AOT has not to pay interest since the dissolution date of NBIA. The maturity date of this note will be the last working day prior to the date that
the remaining of share value will be returned to AOT, (if any)
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6.15 Other current liabilities Unit : Million Baht
Consolidated 2008 2007
The Company 2008 2007
Employees’ bonus payable Accrued output tax Accrued property tax Value added tax payable Revenue received in advance Withholding tax payable Other liabilities Pension payable (AAT Staff Pension Fund) Total
1,094.13 447.25 2,202.89 45.73 417.49 46.44 417.82 10.63 4,682.38
504.76 396.91 2,193.15 37.67 357.03 16.59 119.41 4.30 3,629.82
1,094.13 441.49 2,202.89 45.73 419.37 45.13 406.43 10.63 4,665.80
504.76 392.84 2,193.15 37.67 358.39 14.76 103.59 4.30 3,609.46
6.16 Long - term loans
Consolidated 2008
The Company 2007
2008
2007
Million Yen Million Baht Million Yen Million Baht Million Yen Million Baht Million Yen Million Baht Foreign Loans 178,576.91 58,906.63 175,812.38 52,728.42 178,576.91 58,906.63 175,812.38 52,728.42 Less : Current portion of Long - term loan 5,193.53 1,713.17 4,358.24 1,307.09 5,193.53 1,713.17 4,358.24 1,307.09 173,383.38 57,193.46 171,454.14 51,421.33 173,383.38 57,193.46 171,454.14 51,421.33 Domestic Loans - 1,519.46 - 1,530.00 - - - - Less : Current portion - 148.40 - 111.30 - - - of Long - term loan - 1,371.06 - 1,418.70 - - - - Total 173,383.38 58,564.52 171,454.14 52,840.03 173,383.38 57,193.46 171,454.14 51,421.33
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AOT foreign loans were borrowed in Japanese yen from oversea financial institutes, guaranteed by the Ministry of Finance with fixed annual interest rate at 0.75-2.70 % and 2003-2042 payment due (As at September 30, 2008, exchange rate was Yen 100 = Baht 32.9867). Domestic loans were borrowed from local financial institutes for the construction of Suvarnabhumi Airport Hotel amounting to Baht 1,630.76 Million with interest rate as follows: - Contract signed date-September 30, 2007 annual interest rate is MLR-2.0% - From October 1, 2007 onwards annual interest rate is MLR-1.0% The payment is due quarterly for 44 installments, amounting to Baht 37.10 million for each installment. The first payment will be due in February, 2008 and the last payment will be paid within November 30, 2018. As at September 30, 2008. Suvarnabhumi Airport Hotel made a loan payment of Baht 111.30 million. The remainting loan was Baht 1,519.46 million. 6.17 AOT Staff Pension Fund AOT has set up a pension fund of Airports Authority of Thailand by contributing 10 % of the employees’ salaries to the fund. As at September 30, 2008, the balances of fund are shown as follows: Unit : Million Baht
2008 2007 Assets Bank and cooperatives deposits 84.52 81.81 Loan accounts receivable 0.03 0.31 Accrued income 1.13 1.13 Total 85.68 83.25 Liabilities and pension fund Accrued pension payments 10.63 4.30 AOT payable 36.11 33.94 Pension fund 38.94 45.01 Total 85.68 83.25 Payment obligations to staff 38.94 45.01
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6.18 Other non-current liabilities Unit : Million Baht
Consolidated 2008
The Company 2008
Work performance guarantees Reserve for contingent liabilities Deferred revenue Cross Currency Swap Unearned revenue Other non-current liabilitie Total
455.17 629.53 49.45 - - 21.38 1,155.53
2007
672.57 204.19 51.22 4,167.99 328.97 21.39 5,446.33
452.78 629.53 49.45 - - 21.38 1,153.14
2007
654.85 204.19 51.22 4,167.99 328.97 21.39 5,428.61
AOT hedged against the risk caused by fluctuation of foreign currency exchange rate by applying financial instruments of Cross Currency Swap with local and foreign financial institutes. 6.19 Share Capital AOT had authorized share capital of 1,428,570,000 ordinary shares with a par value of Baht 10 per share. The shares were issued and fully paid-up totally Baht 14,285.70 million. 6.20 Legal reserve According to Article 116 of the Public Limited Companies B.E.2535 AOT is required to appropriate not less than
5 percent of its annual net income as a reserve until the reserve fund reaches 10 percent of the authorized share capital. The AOT reserve fund was already appropriated to 10% of the issued and fully paid-up share capital. 6.21 Dividend On January 25, 2008, the Annual Shareholders’ meeting of AOT approved the dividend payment for the year 2007 of Baht 0.40 per share, amounting to Baht 571.43 million. AOT paid the dividends on February 22, 2008.
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6.22 State property rental The Treasury Department collected the compensation for using the state property from AOT at the rate of
5 percent of the operating income of Don Mueang International Airport and Suvarnabhumi Airport and 2 percent for the other 4 regional international airports without any expense deduction. After the opening of Suvarnabhumi Airport, the compensation rates for Don Muang International Airport and regional international airports will be adjusted according to the study of the consultant provided by the Treasury Department. In this accounting period, AOT and the Treasury Department are negotiating for the new compensation rates, therefore, state property rental amounting to Baht 952.97 million has been recorded at the former rates since the opening of Suvarnabhumi Airport. The rental fees of state property amounting to Baht 2.76 million which AOT received from Don Mueang International Airport Hotel Co., Ltd. has been remitted to the Treasury Department, Ministry of Finance at the rate of 50 percent without any expense deduction. The total amount of fees was Baht 955.73 million. 6.23 Remuneration to the Board of Directors Unit : Million Baht
Consolidated 2008
The Company 2008
Remuneration Bonus Other premium for senior executives Total
6.96 5.68 8.80 21.44
2007
8.35 9.52 8.06 25.93
6.08 5.68 7.50 19.26
2007
7.73 9.52 5.42 22.67
6.24 Remuneration to Auditors Unit : Million Baht
Consolidated 2008
The Company 2008
Audit fee Other expenses Total
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2.65 0.41 3.06
2007 2.65 0.34 2.99
2.25 0.41 2.66
2007 2.25 0.34 2.59
6.25 Law Compensation Revenues Baht 8,331.53 million of law compensation revenues are paid by 2 private companies to AOT as compensation and some amount are additionally recorded according to the agreement, totaling to Baht 3,871.53 million. Moreover, Baht 4,460 million are transferred from advance received concession revenue in accordance with the orders of
the civil court No. 2440/2550 and No. 2441/2550 as stated in Note 6.31.2 6.26 Loss (gain) on foreign exchange Consolidated and The Company Unit: Million Baht
2008 2007 Realized Loss (Gain) Unrealized Loss (Gain) Total
(208.45) 1,137.17 928.72
(286.32) (2,518.22) (2,804.54)
6.27 Financial Instruments Interest rate risk
The risk from interest rate is caused by the variance of future interest rate in the market which will affect AOT operation performance and cash flow. AOT has short term and long term deposits in the banks and financial institutes. The AOT subsidiaries have liabilities from fixed and floated interest rate loans. Exchange rate risk
AOT had risk from the variance of currency exchange rate that affects liabilities, operating expenses and interest payment of its subsidiaries in foreign currency. AOT risk management policy is to set up the risk management working group on foreign debt. The working group hedged against partial liabilities of foreign currency by applying financial derivative of Cross Currency Interest Rate Swap with Thai and foreign financial institutes. Credit risk
Credit risk is arisen from the delayed payment of debt of the client. Setting the clear service payment, continually trace the client of outstanding debt, and ask for the guarantee from the client schedule, are the ways to hedge the said matter. The client’s fair value stated in the balance sheet is the net value of the debtor after deducting doubtful account.
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Liquidity risk
AOT and its subsidiaries manage liquidity risk by sufficiently maintaining the level of cash and cash equivalents as well as providing adequate amount of loan for spending. Actual interest rate analysis
The actual interest rates of the financial assets and liabilities with interest as at September 30, were as follows Consolidated
Unit : Million Baht
2008 Cash and current account Cash equivalents Current investments Long-term investments Loans (Baht) Loans (Japanese Yen)
Within More than More than More than Total 1 Year 1 Year 2 Years 5 Years - 522.52 - - - 522.52 3.32 7,914.85 - - - 7,914.85 3.75 11,557.83 - - - 11,557.83 3.73 - 691.95 - - 691.95 19,995.20 691.95 - - 20,687.15 6.31 148.40 148.40 296.80 925.86 1,519.46 1.69 1,713.17 4,160.95 12,598.14 40,434.37 58,906.63 1,861.57 4,309.35 12,894.94 41,360.23 60,426.09
Effective interest rate (%)
Unit : Million Baht
Within More than More than More than Total 1 Year 1 Year 2 Years 5 Years Cash and current account - 60.92 - - - 60.92 Cash equivalents 3.13 10,170.47 - - - 10,170.47 Current investments 3.76 4,503.25 - - - 4,503.25 14,734.64 - - - 14,734.64 Promissiory notes (Baht) 4.30 10.00 - - - 10.00 Loans (Baht) 4.93 111.30 148.40 445.20 825.10 1,530.00 Loans (Japanese Yen) 1.74 1,307.09 1,588.48 11,469.82 38,363.03 52,728.42 1,428.39 1,736.88 11,915.02 39,188.13 54,268.42
2007
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Effective interest rate (%)
The Company
Unit : Million Baht
Within More than More than More than Total 1 Year 1 Year 2 Years 5 Years Cash and current account - 534.46 - - - 534.46 Cash equivalents 3.34 7,803.81 - - - 7,803.81 Current investments 3.75 11,557.83 - - - 11,557.83 Long-term investments 3.73 - 691.95 - - 691.95 691.95 - 19,896.10 - - 20,588.05 Loans (Japanese Yen) 1.69 1,713.17 4,160.95 12,598.14 40,434.37 58,906.63
2008
Effective interest rate (%)
Unit : Million Baht
Within More than More than More than 1 Year 1 Year 2 Years 5 Years Total Cash and current account - 80.06 - - - 80.06 Cash equivalents 3.14 10,127.98 - - - 10,127.98 Current investments 3.76 4,503.25 - - - 4,503.25 - 14,711.29 - - - 14,711.29 Loans (Japanese Yen) 1.74 1,307.09 1,588.48 11,469.82 38,363.03 52,728.42
2007
Effective interest rate (%)
Fair value of Financial Instrument
Most of the financial assets and liabilities were in short-term category including the loan which its interest rate close to the rate applied in the market. The management believed that the fair value of financial assets and liabilities did not have significant difference from the book value. The fair value of Cross Currency and Interest Rate Swap, which was the liability, as at September 30, 2008 amounting to Baht 3,387.53 million , was calculated by decreasing rate fixed by the contractor and deemed to be cancellation of contract on the date stated in the Balance Sheet.
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6.28 Commitment Consolidated and The Company
AOT’s commitments are as follows: Capital expense commitment as at September 30, 2008 AOT has been obligated to the contract of development projects for its regional airports and others amounting to Baht 451.13 million (VAT included) and for Suvarnabhumi Airport’s construction project amounting to Baht 3,223.17 million (VAT excluded). Operating expense commitment (VAT included), as at September 30, 2008 comprises: Contracts with private sector Repair and maintenance contracts Properties leasing contracts Total
Unit : Million Baht
5,739.68 248.81 132.33 6,120.82
The Suvarnabhumi Airport Hotel has entered into 20 year - contract of hotel management (February 1, 2005January 31, 2025). SAH has obligation for the logo fee amounting to Baht 21.40 million (VAT included) which was recorded as expense for Baht 4.28 million. The remaining obligation was Baht 17.12 million. SAH also has an obligation for hotel management fee (wages and personnel expenses) amounting to Baht 1,995.24 million. The amount of Baht 177.62 million was recorded as expense and Baht 1,817.62 million was remained. Total remaining obligations were Baht 1,834.74 million. 6.29 Contingent liabilities 6.29.1 Assessment of property tax
AOT property tax has been assessed by Bangkok Metropolitan Administration (BMA) since 1995 by using remunerations for the space that AOT granted to operators as a calculation base. AOT appealed to BMA and submitted the matter to Office of the Attorney General on July 29, 1999 for the determination of the committee on the assessment of property tax. As a result, the board of directors (meeting No. 6/1999 dated June 29, 1999) resolved that AOT would pay property tax at the reasonable rate. BMA has informed the Treasury Department, the owner of property, about
the assessment of property tax every year by using the same criteria since 1995 AOT has disagreed and appealed every year as since 1995. Later, AOT was informed by the Office of the Attorney General (letter No. 0015/5219 dated Mar 24, 2005) for
the final determination of the committee on the assessment of property tax. If BMA accepts the final determination of the committee, AOT will get the property tax (1995-2003) of Baht 570.69 million from BMA (the letter requesting for the repayment of the said tax amount has already been sent to BMA). The Office of the Attorney General informed
the Treasury Department that, in 2004, the committee had the same determination as in 2003.
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Referring to BMA letter dated September 11, 2006, BMA informed the Treasury Department that BMA disagreed with the determination of the committee on the assessment of property tax. AOT was informed by the Treasury Department on October 2, 2006 that the Office of the Attorney General will submit the matter to the cabinet for ordering BMA to act in accordance with the determination of the committee. In this accounting period, AOT was informed by BMA on the assessment of property tax for the spaces that AOT granted to operators at Don Muang International Airport for the year 2006 (additional) and 2007 amounting to Baht 386.90 million by adhering to the previous criteria since 1995. AOT, therefore, paid the tax of Baht 134.45 million by offsetting debt of BMA according to the tax assessment criteria for the year 2004 specified by the committee on
the assessment of property tax. For the remaining amount of Baht 252.45 million, AOT appealed to BMA according to
the determination of the committee. As at September 30, 2008, AOT has Baht 2,353.11 million of appealing tax payable (BMA has assessed the property tax amounted to Baht 3,799.88 million, less the paid tax of Baht 1,446.77 million). Moreover, AOT recorded penalties of Baht 23.78 million in this accounting period, totaling of Baht 226.98 million according to Section 43(4) of the Property Tax Act, B.E.2475 (1932), amended by the Property Tax Act (No.4), B.E.2534 (1991) in case the result of the appeal complied with the assessment of BMA. 6.29.2 Lawsuits
AOT was prosecuted with 27 cases and the plaintiff filed a lawsuit against AOT to compensate for the damage in an approximate amount of Baht 5,894.37 million (excluding interest). The cases are in the courts consideration and insurance company. AOT was prosecuted with 2 cases at Civil Court by 2 private companies as stated in Note 6.31.2 In addition, AOT was prosecuted with 13 cases of impact from the noise pollution. The plaintiff filed a lawsuit against AOT to compensate for the damage in an approximate amount of Baht 601.39 million. Presently, the cases are under the consideration of the Administrative Court. The attorney-at-law of the Office of the Attorney General represents AOT. 6.29.3 Noise Impact
AOT’s Board of Directors approved on May 15, 2008, the compensation payments to people who are affected by noise pollution arisen from the operations of Suvarnabhumi Airport in accordance with the cabinet resolution on May 29, 2007. The compensation payments base on actual air traffic and are for buildings that were constructed before 2001as follows: - Areas with NEF over 40: To negotiate and purchase buildings and constructions by comparing with the compensation guideline for expropriated immovable property as stated in the Act on Expropriation of Immovable Property B.E.2530 (1987). If owners do not want to sell the property, they will receive money for building improvement
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- Areas with NEF 30-40: To support building and construction improvement by evaluating noise level. If the noise level is over 10 decibel (a), an owner will receive money for buildings and constructions improvement according to the criteria of the study of National Institute of Development Administration (NIDA) Number of buildings and areas which are affected by the actual air traffic as stated in the cabinet resolution is higher than the one estimated in environmental examination report. Therefore, it may result in increasing expenses of AOT and may affect performance of AOT. However, AOT established noise charge working group on November 15, 2007. 6.29.4 Compensation for Termination of All Employees
With reference to the Announcement of the State Enterprise Labour Relations Committee (Minimum Standards of Conditions of Employment) dated June 28, 2006, if state enterprise terminates all employees without any guilty, employees are entitles to receive compensation at the rate stated in the law. As at September 30, 2008,
the compensation was Baht 1,346.63 million which AOT did not recorded in the financial statements. 6.30 Acquisition and dissolution of NBIA According to the cabinet’s resolution dated September 10, 2002, the cabinet agreed to transfer all activities, rights, liabilities, commitment, assets, as well as employees of NBIA to AOT when Suvarnabhumi Airport has completely been constructed. This would take place before the airport start its operation. Besides, NBIA should be dissolved and all its activities transfer to AOT as a business unit. This arrangement has already occurred on January 1, 2006 and acknowledged by the cabinet’s resolution dated February 28, 2006 in accordance with the resolutions of the Ministry of Finance and the Ministry of Social Development and Human Security. On December 8, 2004, all personnel from NBIA have already been transferred to AOT. After that, business, assets, rights, and commitment of that have also been transferred to AOT on January 1, 2006. All properties and liabilities have been transferred from NBIA under book value recorded in NBIA account as at December 31, 2005 at the amount of Baht 100,913.28 million (including Baht 91,820.25 million of assets under construction, Baht 149.35 million of land, plant and equipment and Baht 8,943.68 million of other items) and Baht 62,429.47 million, respectively. Thus, the amount of the promissory note that AOT issued to NBIA was Baht 38,483.81 million with interest rate of 0.5% per annum. The maturity date of this note will be the last working day prior to the date that the remaining of share value, (if any), will be returned to AOT. NBIA was registered for dissolution on July 31, 2006 in accordance with the resolutions of the AOT Extraordinary Shareholders Meeting No. 1 on July 12, 2006 and No.2 on July 28, 2006. At present, it is under the liquidation process. AOT has not to pay interest since the dissolution date of NBIA. 6.31 Dispute with Private Companies 6.31.1 Airport Duty Free Co., Ltd.
AOT and the Airport Duty Free Co., Ltd. had a dispute over AOT demand that the Airport Duty Free Co., Ltd. made the minimum guarantee payment according to the contract in 1998-2001 in an amount of Baht 442.17 million.
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However, the Airport Duty Free Co., Ltd. snubbed AOT request. AOT tried to reach an agreement with B.A.D.F. Co., Ltd. which is the joint venture party of AOT under the joint venture contract for establishment of the Airport Duty Free
Co., Ltd., but the matter was unsuccessful. At present, it is under the process of appointing the arbitrator of B.A.D.F.
Co., Ltd. The compensation has not yet been recorded in the account. 6.31.2 Two Private Companies
AOT committed to 2 contracts with 2 private companies to operate the duty free shops and commercial activities management projects and the private companies paid advance concession revenue in an amount of Baht 4,460 million. According to the Board of Directors Meeting No.10/ 2007 dated March 22, 2007, the committee considered the projects in conjunction with the opinion and recommendation from the Council of State (special committee) and information of the project value calculation method and found that AOT did not conduct the projects in accordance with the Act on Private Participation in State Undertaking, B.E. 2535 (1992), therefore, contracts between AOT and private companies were invalid and nonbinding. AOT issued letters to both private companies to inform them about the Board of Directors’ resolutions. The private companies prosecuted AOT on June 4, 2007, with the cases No. 2440/2550 and 2441/2550.
The plaintiffs filed lawsuits against AOT to act in compliance with the contracts. If AOT fails to do so, AOT must pay compensation to the plaintiffs in an amount of Baht 20,878.51 million and Baht 48,074.15 million, respectively, with
the interest rate at 7.5 % p/a since the filing date until the last date of payment. In addition, AOT proposed to
the Office of the Attorney General to defend AOT against the private companies according to the Board of Directors resolution No. 17/2007 dated May 17, 2007. The attorney-at-law submitted the defense statement for AOT. The Civil Court considered the case No. 2441/2550 on January 31, 2008, and issued the temporary injunction. AOT must allow private companies to continue their operations in the space they have occupied before the issue of
the temporary injunction. The privates companies have to pay AOT as stipulated in the contracts. If the court rules that the contracts are not binding, those payments would count as compensation for damages. On April 25, 2008, the Civil Court issued the temporary injunction of the case No. 2440/2550. AOT and
the private company agreed that AOT will allow the private company and minor operators to use the space of 25,827.67 square meters. The private company has to pay compensation to AOT as stated in the conctract or on the date informed by AOT. The compensation will be considered as minimum compensation for damages if the court rules that the contract is not binding. Therefore, AOT could not estimate any liabilities incurred from the lawsuits filed by both private companies. (if any). 6.32 Approval of Financial Statement The Audit committee, who was delegated authority by the AOT’s Board of Directors, has approved these financial statements on November 21, 2008.
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