Bangkok Aviation Fuel Services : Annual Report 2009 by Orapan Kokong

BAFS . . .

goes green

รายงานประจำาป ๒๕๕๒ บริษัท บริการเชื้อเพลิงการบินกรุงเทพ จำากัด (มหาชน) BANGkOk AVIATION FuEL SERVICES PLC.

Annual Report

MESSAGE FROM MANAGING dIRECTOR

SOCIAL RESPONSIBILITy POLICy

ACTIVITIES 2009

hONORABLE AwARdS

kEy FINANCIAL hIGhLIGhTS

GENERAL INFORMATION

ORGANIZATION ChART

BOARd OF dIRECTORS

MANAGEMENT TEAM

NATuRE OF BuSINESS

RESuLTS OF OPERATIONS IN 2009

SuMMARy OF BuSINESS ChANGING

AVIATION REFuELLING OVERVIEw ANd COMPETITION

INNOVATING ANd dEVELOPING FOR ThE FuTuRE

RISk FACTORS

ShAREhOLdER ANd MANAGEMENT STRuCTuRE

GOOd CORPORATE GOVERNANCEี

MANAGEMENT dISCuSSION ANd ANALySIS FOR ThE OPERATING RESuLTS IN 2009

REPORT OF ThE BOARd OF dIRECTOR RESPONSIBILITIES FOR 2009 FINANCIAL STATEMENTS

FINANCIAL STATEMENTS REPORT

REPORT OF ThE AudIT COMMITTEE ON CORPORATE

BAFS To be a leader in

aviation fuelling services and other related businesses.

MISSION BAFS

Excellence in services performed to

international standards to maintain Competitive

GOVERNANCE FOR ThE yEAR 2009

advantage, encompassing all aspects of aviation

SuMMARy OF ThE OPINION CONCERNING AdEQuACy

fuelling, Integrating competent employees with

ANd APPROPRIATENESS OF ThE INTERNAL CONTROL

modern technologies to ensure that we can

SySTEM FOR ThE yEAR 2009 100

VISION

CONNECTEd TRANSACTIONS FOR 2009

Annual Report 2009

deliver beyond customer satisfaction and maximize shareholder returns while being socially and environmentally responsible.

Vision & Mission Vision & Mission Vision & Mission

Contents Contents Contents

Message From Managing Director MESSAGE FROM MANAGING DIRECTOR

In order to cope with the unfavorable situation BAFS has revised its 5 year strategic plan to be in corporate with risk management principle. The management and staff are dedicated their effort and hard working to ensure that all units using management tools to limit operation risk and engrain risk consciousness into the organization. BAFS also initiated the cost saving campaign such as reducing Management salaries from 5-20%, cut back the unnecessary investment, cost of living allowance, staff overtime and other privileges. This has enabled the company to reduce the operation cost below the strategic plan which in turn increased the operational performance above expectation.

(M.R. Supadis Diskul) Managing Director

BAFS emphasized on the organization effectiveness, viability and to create maximum customer satisfaction. We always adhere to good governance principles, business ethics, safety along with corporate social responsibility and the awareness of global environmental problem which has led to numerous awards specially Excellent Corporate Governance Scoring Award from Thai Institute of Directors, The National Award of Outstanding for Enterprise of Safety Operations, Occupational Health and Working Environment for the ninth year and received Certificate of ISO 9001 : 2009 from Bureau Veritas. I would like to express my gratitude to all our shareholders, customers, business partner and other related parties for all their trust and steadfast support and especially to the management and staff for their commitment and sacrifice during the critical time.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

SOCIAL RESPONSIBILITY POLICY BAFS

is highly concerned with the environmental

and social wellbeing of the surrounding communities and places a high priority on our contributions. BAFS delivers a very high standard of services to maximize satisfaction to our clients and stakeholders according to the good corporate governance practices.

Social Contribution Social Contribution Social Contribution

Throughout the year 2009, Bangkok Aviation Fuel Services Public Company Limited has faced the global economic downtown, political violence and the outbreak of H1N1 influenza 2009 pandemic which affected the airline and tourism business industry causing the declining of aviation fuel consumption and decreasing company growth.

Corporate

Social Responsibility The Activity and the Policy of Corporate Social Responsibility

1. Social and Community Development BAFS business is based upon the philosophy of supporting local communities through education. We believe that by providing supports on education and implanting ethical thoughts, it will strengthen the nation’s prospect ; thus, BAFS regards this as its responsibility to be fulfilled. 2. Cultural and Religious Promotion Undoubtedly, religions play an influential role in nation’s identity, culture, and people’s morality. Religions encourage people to embrace ethical thoughts and peace of which BAFS has been successively supporting those activities. Policy of Corporate Social Responsibility BAFS is fully committed to delivering high quality aviation refueling services that meet international standard of practices. Alongside its core business, the company has been actively engaging in social activities to promote social progress and development along with environmental and economical sustainability. We strive for being a socially-responsible firm to our stakeholders by conducting our business in fair and responsible manners. Our corporate social responsibility program covers the following aspects ;

Annual Report 2009

3. Environmental Sustainability Our business conducts and operational procedures are strictly adhered to the international environmental standard to prevent potential adverse impacts on to the environment and society. BAFS strongly believe that environmental aspects must be considered in a sustainable business model. The company has a policy to promote environmental awareness to employees, communities and stakeholders which is highly beneficial to the environment and society. 4. Human Resource Development The key to BAFS success lies upon its human resource. Human resource possesses a unique characteristic which is the capability to learn and develop. BAFS is strictly concerned on human resource from staff recruitment with right qualifications, experiences, and working attitude to meet with our corporate culture. Continuous training and development programs have been delivered to enhance human resource capability and efficiency. Our company introduced Key Performance Index scheme which is based upon individual’s responsibility and the nature of assigned tasks. BAFS’s human resource strategy aims to promote organizational working spirit and encourage our member of staff to be fully committed to their responsibilities. Apart from our commitment on financial returns to the organization, it is impressive that our business conducts are also to be beneficial, fair, and constructive to the society. Therefore, we have been participating in various social activities to be consistent with our CSR policy and for sustainable development of the society. Bangkok Aviation Fuel Services Plc.

Corporate

Social Responsibility

Activities on the Corporate Social Responsibility BAFS supports CSR activities continuously as follows : Social and Community Development Projects Mor-Ouam-Bam-Rung-Kwan-Ta-Harn Recent insurgencies in the three southernmost provinces resulted in adverse impacts to Thai economy and its image. A number of soldiers assigning to those areas have been injured or disabled which consequently suffer both physic and psychological. BAFS in the association with the Royal Thai Army Medical Department and Phramonkutklao Hospital have been supporting the “Mor-Ouam-Bam-Rung-Kwan-Ta-Harn” program for psycho therapy to injured soldiers in Phramonkutklao Hospital. The program’s objective is to help injured soldier to be fully integrated back to the society and being proud of their services to the nation. BAFS strongly hopes that such program will demonstrate our heartfelt appreciation to the sacrifices made by these soldiers and at the same time, promoting solidarity and compatriot among the participants. Fire Drill Training Safety is the prime concern in BAFS business as an aviation refueling service provider. Our company is strictly abided by the safety regulation and practices in compliance with international standard. BAFS has paid a special attention on safety measurement by providing mandatory firefighting training to every employee. Nonetheless, we have also identified local communities as important allies in safety promotion by providing introductory-level firefighting courses to the communities near our fuel storages. National Children Day Activities BAFS has long been supporting the National Children Day’s activities in the local communities such as Prem Prachakorn, Romsaingam Communities and Wat Hua Ku School, etc. Scholarship Programs BAFS provides scholarships through the Thai Muslim Women Foundation of Thailand for the welfare of Orphans for the under privileged children without the discriminations against racial backgrounds and religious beliefs.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Corporate

Activities 2009

Social Responsibility Donation Program/Project on Education and Sport Equipments

Activities 2009

BAFS has donated education and supplies equipments along with scholarship to various schools around the country; namely, Wat Hua Ku School, Pak Klong Mon School, Wat Sriwaree Noi School, Samut Prakarn, Wat Wiharn Deang Community School, Saraburi, Ban Pu Nam Ron, School, Karnchanaburi, etc.

Civil join Air Show 2009

Teachers Volunteering Project

BAFS together with the Department of Civil Aviation and Airports of Thailand Plc. organized an exhibition on airplanes at International Terminal Building Don Muang Airport, Bangkok from 24th - 26th, July 2009.

BAFS has been arranging voluntary teaching project by sending volunteers from BAFS to teach basic electricity background for High School students at Wat Hua Ku School. Religious Supporting Project Royal Kathin, Annual Kathin Offering Ceremonies and Buddhist Monk Scholarship Project BAFS has been actively involving in religious promotion which is an important part of Thai Culture. Our company has supported the construction of Dhamma School at Wat Monkonthep, Chachengsao and Wat Thep Prasit, Samut Songkram. We also grant scholarship for Buddhist Monks and Novices along with supporting Kantthet Mahachat Sermon Ceremony and the publication of the Tripitaka, the Buddist Sciptures.

Annual Emergency plan testing 2009 BAFS together with AOT has organized the Annual Emergency Plan Testing in three local areas in order to prepare all the staff members to be ready in the case of emergency. This was done from 26th - 28th October 2009.

Environmental Conservation Project Mangrove Forest Field Trips

SAFTY ACTIVITY

BAFS encourages experience-based education by sponsoring field trips for local students in the “Pa Nong Rak Pa Project” or Mangrove Forest Field Trips. During the field trip, students, teacher and BAFS volunteers were taking part in mangrove planting and being taught to analyze, experience and to be conscious on the importance of environmental conservation.

On Friday the 4th of December 2009, BAFS organized the activity called “Empowering safety Encouraging Organizational Culture Day”. This is the first year that Safety and Occupational Committees in three local areas collaborated together with the core value working group to strengthening the member of staffs on the awareness of safety, occupational health, and environment which was based on the Code of Conduct.

Effective Microorganisms for Environmental Treatment Project BAFS collaborated with Phramonkutklao Hospital and Electricity Generating Authority of Thailand (EGAT) to educate, train, and result follow-up with the students in many school namely, Wat Wiharn Deang School on the use of Effective Microorganisms (EM) for environmental treatment.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Honorable Awards HONORABLE AWARDS

Key Financial Highlights kEY FINANCIAL HIGHLIGHTS

(Unit : Million Baht) 2009

2008

2007

1,996.84 16.69 2,034.98 895.50 322.41 1,245.97 1,118.03 107.02 463.05 0.91 768.80 6,843.56 3,570.95 3,272.61

2,058.90 19.28 2,127.01 922.40 345.38 1,293.54 1,155.78 163.68 437.73 0.86 664.80 7,060.63 4,069.76 2,990.88

2,186.18 20.20 2,258.09 915.24 311.75 1,252.59 1,291.14 186.18 543.34 1.14 573.09 7,500.45 4,460.87 3,039.58

55.53% 22.75% 6.66% 14.79% 1.09 6.42 510 0.43 0.91

55.61% 20.58% 6.01% 14.52% 1.36 5.86 510 0.40 0.86

58.52% 24.06% 7.24% 19.04% 1.47 5.96 510 * 0.52 1.14

BAFS RECEIVED ISO 9001 : 2008

Key Financial Status and Performance

BAFS received the certification ISO 9001 : 2008 from Bureau Veritas Certification (BVC) on 28th Jan 2009

BAFS WON ENTERPRISE OF SAFETY AWARDS AT THREE lOCATIONS. Mr. Paithoon Kaewthong, Minister of Labour Protection and Welfare ganted the Year 2009’s National Award of the Outstanding for Enterprise of Safety Operation, Occupational Health and Working Environment to Bangkok Aviation Fuel Services Plc. at Bitec Bangna on 4th July 2009. In this year, BAFS won these awards for three locstions in following places : Don Mueang Depot, Into-Plane Service Substation and Suvarnabhumi Depot

Services Income Rental Income Total Revenue Cost of Services Administrative Expenses Total Expenses Gross Profit Finance Costs Net Profit EPS (Baht) Cash and Short Term Investment Total Assets Total Liabilities Shareholders’ Equity

Key Financial Ratios Gross Profit Margin Net Profit Margin Return to Assets Return to Equity Debt to Equity (Times) Book Value per Share (Baht) Number of Shares (Million Shares) Dividend per Shares (Baht) Earning per Shares (Baht)

HONORABlE AWARD Bangkok Aviation Fuel Services Plc. (BAFS) was awarded a Certificate of Operational Excellence by the Joint Inspection Group (JIG) during the 2009 JIG Inspection, in recognition of our very high standards in aviation refueling and continuous effort to implement best practices 8

Annual Report 2009

* Increased paid up capital from 425 million shares to 510 million shares since May 11, 2007

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

General Information

GENERAL INFORMATION Company Name

Bangkok Aviation Fuel Services Plc.

Head Offiffiice

171/2 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Telephone : 0-2834-8900 Fax : 0-2834-8999 Web Site : www.bafsthai.com

Type of Business

Storage and Aircraft Refuelling Services

BAFSâ&#x20AC;&#x2122;s Shareholdings in Subsidiary and Related Companies

Registration Number 0107538000487 Registered Capital 509.998 million shares, 1 Baht per share, total 509.998 million Baht Paid-up Capital

509.997 million shares, 1 Baht per share, total 509.997 million Baht

References

Share Registrar

Thailand Securities Depository Company Limited 62 Rachadapisek Road, Klongteoy, Bangkok 10110 Telephone : 0-2229-2800 Fax : 0-2359-1262-3

Auditor

Dharmniti Auditing Co., Ltd. 267/1 Pracharaj Sai 1 Road, Bangsue, Bangkok 10800 Telephone : 0-2587-8080 Fax : 0-2586-0301

Annual Report 2009

Bangkok Aviation Fuel Services Plc

BAFS Excellence in services, performed to international standards to maintain competitive advantage, encompassing all aspects of aviation refuelling.

Name Type of Business Type of share Paid-up Capital (Mil. Baht) Shareholding Percentage

Thai Aviation Refuelling Co., Ltd. 99 Moo 10, Srisa Jorakhanoi, Bang Saothong, Samut Prakran 10540 Tel 0-2134-4021-6 Fax 0-2134-4020 Operating aviation fuel service using the Hydrant technology at Suvarnabhumi Airport Ordinary 530 90.00

Name Type of Business Type of share Paid-up Capital (Mil. Baht) Shareholding Percentage

JP-One Asset Co., Ltd. 171/2 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Tel 0-2834-8984-6 Fax 0-2834-8975 Transporting aviation fuel through pipeline system, from Makkasan to Suvarnabhumi Airport Ordinary 600 92.50

Name Type of Business Type of share Paid-up Capital (Mil. Baht) Shareholding Percentage

Intoplane Services Co., Ltd. 171/2 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Tel 0-2834-8982-3 Fax 0-2834-8999 Conducting Into-plane fuelling service which is hired only for labor. Currently, it provides service at Samui and Sukothai Airports Ordinary 0.12 83.33

Name Type of Business Type of share Paid-up Capital (Mil. Baht) Shareholding Percentage

Fuel Pipeline Transportation Limited 424 Vibhavadi Rangsit Rd., Don Mueang, Bangkok 10210 Tel 0-2574-6180-3 Fax 0-2574-6101 Storing and transporting aviation fuel through pipeline system Ordinary and Preferred 1,592 16.67 Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Organization Chart

BOARD OF DIRECTORS

AUDIT COMMITTEE

NOMINATION COMMITTEE

MANAGING DIRECTOR

REMUNERATION COMMITTEE

RISK MANAGEMENT COMMITTEE

FUELLING OPERATIONS COMMITTEE

DEPUTY MANAGING DIRECTOR-OPERATIONS

DEPUTY MANAGING DIRECTOR-ADMINISTRATION EXECUTIVE ASSISTANT OF LEGAL & SECURITIES

EXECUTIVE ASSISTANT OF INTERNAL AUDIT

INTERNAL AUDIT

SAFETY

EXECUTIVE ASSISTANT TO MANAGING DIRECTOR

MEDIA DEVELOPMENT & COMMUNITY AFFAIR

OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT REPRESENTATIVE (OH & SMR)

EXECUTIVE ASSISTANT OF QUALITY MANAGEMENT SYSTEM RISK MANAGEMENT & STRATEGIC PLAN

SAFETY, OCCUPATIONAL HEALTH AND ENVIRONMENT

PUBLIC RELATIONS

CORPORATE AFFAIRS

INVESTOR RELATIONS

LEGAL

FINANCE & ACCOUNTING DEPARTMENT

HUMAN RESOURCES & ADMINISTRATION DEPARTMENT

TECHNICAL DEPARTMENT

DEPOT DEPARTMENT

AVIATION REFUELING DEPARTMENT

DONMUEANG & REGIONAL AIRPORT DEPARTMENT

CORPORATE FINANCIAL

PERSONNEL

BUSINESS DEVELOPMENT & MARKETING

ELECTRICAL ENGINEER

DEPOT OPERATION

AVIATION REFUELING

DONMUEANG AIRPORT

ACCOUNTING

ADMINISTRATION

INFORMATION TECHNOLOGY

MECHANICAL ENGINEER

C/R & MAINTENANCE

AVIATION INFORMATION SERVICE

REGIONAL AIRPORT - USM

STOCK CONTROL

PURCHASING

IT SYSTEM ENGINEERING

QUALITY CONTROL

HUMAN RESOURCES DEVELOPMENT

BUSINESS DEVELOPMENT & MARKETING DEPARTMENT

Annual Report 2009

is commanding line is reporting line

REGIONAL AIRPORT - THS

MAINTENANCE

Annual Report 2009

Board of Directors

Annual Report 2009

Board of Directors

BOARD OF DIRECTORS

Board of Directors BOARD OF DIRECTORS

Mr. Palakorn Suwanrath Chairman and Independent Director

M.R. Supadis Diskul Managing Director

Flying Officer Norahuch Ployyai Director

(%) Share Holding • No

(%) Share Holding • 0.62 (In name of himself and spouse 3,150,000 shares)

(%) Share Holding • No

Education/Training • Master of Arts in International Affairs (M.A.I.A) Southeast Asia Studies, Ohio University, USA. • Bachelor of Arts in Political Science, Chulalongkorn University • Certificate, National Defence College, Class 37 • Director Accreditation Program (DAP), Director Certification Program (DCP), The Role of Chairman from Thai Institute of Directors (IOD)

Education/Training • Master of Community and Regional Planning, North Dakota State University, USA. • Bachelor of Science, Medical Technology, Mahidol University • Certificate, National Defence College, The National Defence Course for the Joint State-Private Sectors, Class 15 • Director Accreditation Program (DAP), Director Certification Program (DCP), Finance for Non-Finance Director, The Role of Chairman, Role of the Compensation Committee, Successful Formulation and Execution of Strategy (SFE) from Thai Institute of Directors (IOD)

Education/Training • Bachelor of Science, Royal Thai Air Force Academy • Director Accreditation Program (DAP) from Thai Institute of Directors (IOD)

Other Current Position • Privy Councillor Past Experience • Chairman, Metropolitan Electricity Authority • Chairman, Provincial Electricity Authority • Director, Electricity Generating Authority of Thailand • Director, Expressway and Rapid Transit Authority of Thailand • Director, Government Savings Bank • Director, SCB Securities Co. Ltd.

Other Current Position • Director and Managing Director, Thai Aviation Refuelling Co., Ltd. • Director and Managing Director, JP-One Asset Co., Ltd. • Chairman, Intoplane Services Co., Ltd. • Director, Fuel Pipeline Transportation Ltd. Past Experience • Executive Vice President, Corporate Development and Support Department, Thai Airways International Plc. • Managing Director, Fuel Pipeline Transportation Ltd.

Bangkok Aviation Fuel Services Plc.

Other Current Position • Executive Vice President, Operations Department, Thai Airways International Plc. • Director, Aeronautical Radio of Thailand Ltd. Past Experience • Acting Vice President, Thai Airways International Plc. • Executive Vice President, Standards Assurance and Risk Management Department, Thai Airways International Plc. • Acting Executive Vice President, Human Resources Development and Management Department, Thai Airways International Plc. • Acting Vice President, General Management Department, Thai Airways International Plc. • Vice President, Special Project Department, Thai Airways International Plc.

Annual Report 2009

Board of Directors BOARD OF DIRECTORS

Mr. sERIRAT PRASUTANOND Director

Mr. Tevin Vongvanich Director

Mr. Tanachai Vienravee Director

Mr. Ath Hemvijitraphan Director

(%) Share Holding • No Education/Training • Master of Science (Development Economics), National Institute of Development Administration • Master of Science (Technology of Environmental Management), Mahidol University • MBA, Kasetsart University • Bachelor of Economics, Thammasat University • Senior Executive Program, Sasin Graduate Institute, Chulalongkorn University • Diploma of Politics and Governance in Democratic Systems for Executive Course, Class 9 from The King Prajadhipok’s Institute Academic • Public Law and Management for Executives Course, Class 3 from The King Prajadhipok’s Institute Academic • Director Accreditation Program (DAP), Director Certification Program (DCP) from Thai Institute of Directors (IOD) • Airport Management from Civil Aviation Authority of Singapore (CAAS) Other Current Position • President, Airports of Thailand Plc. • Director and Secretary of the Board, Airports of Thailand Plc. • State Enterprise Director, State Enterprise Policy Office Ministry of Finance Past Experience • Acting President, Airports of Thailand Plc. • Senior Executive Vice President, General Manager of Suvarnabhumi Airport, Airports of Thailand Plc. • Executive Vice President, Deputy General Manager of Regional Airports, Airports of Thailand Plc. • Executive Vice President (Special Affairs), Airports of Thailand Plc. • Chairman, Thai Aviation Refuelling Co., Ltd.

(%) Share Holding • No Education/Training • M.S. (Petroleum Engineering), University of Houston, Texas, USA. • M.S. (Chemical Engineering), Rice University, USA. • Bachelor of Engineering (Chemical Engineering), Chulalongkorn University • Senior Executive Program, Sasin Graduate Institute, Chulalongkorn University • Program for Global Leadership, Harvard Business School, USA. • Director Certification Program (DCP), Financial Statements for Director (FSD) from Thai Institute of Directors (IOD) Other Current Position • Chief Financial Office (CFO), PTT Plc • Director, PTT International Co., Ltd. • Director and Risk Management Committee Member, Bangchak Petroluem Plc. • Chairman, PTT ICT Solutions Co., Ltd. • Director and Risk Management Committee Member, PTT Aromatics and Refining Plc. • Director and Remuneration Committee Member, PTT Chemical Plc. • Director, PTTEP Plc. Past Experience • CFO and Acting Senior Executive Vice President, Corporate Strategy & Development, PTT Plc. • Senior Executive Vice President, Corporate Strategy & Development, PTT Plc. • Executive Vice President, Corporate Business Development, PTT Plc. • Senior Vice President, Regional Assets Division, PTTEP Plc. • Senior Vice President, Operations Division, PTTEP Plc.

(%) Share Holding • No

Education/Training • MSc (Chemical Engineering), University of Wyoming, USA. • MBA, University of Arkansas, USA. • BS (Chemistry), Chiengmai University

Education/Training • Master of Management, Sasin Graduate Institute of Business Administration of Chulalongkorn University • Bachelor of Business Administration, Assumption University • Director Accreditation Program (DAP) from Thai Institute of Directors (IOD)

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Other Current Position • Area Logistics Manager Asia Pacific Thailand & Laos, Chevron (Thailand) Limited • Director, Fuel Pipeline Transportation Limited Past Experience • Commercial and Industry Area Sales Manager, Chevron (Thailand) Limited • Program Management Office Manager, Chevron (Thailand) Limited • Marketing Planning and Pricing Manager, Chevron (Thailand) Limited • Retail System Support Manager, Chevron (Thailand) Limited

Other Current Position • General Manager-Distribution : Mekong Cluster, The Shell Company of Thailand Limited Past Experience • • •

General Manager-Supply : Mekong Cluster, The Shell Company of Thailand Limited Mekong Cluster Industry Lubs. Business Manager, Lubricant Business, The Shell Company of Thailand Limited Industry and Transport Lubricants Manager, The Shell Company of Thailand Limited

Annual Report 2009

Board of Directors BOARD OF DIRECTORS

BOARD OF DIRECTORS

Mr. Navee Lertphanichkul Director

Mr. Vinai Chamlongrasdr Director

Mr. Aswin Kongsiri INDEPENDENT Director

Mr. Pachara Yutidhammadamrong INDEPENDENT Director AND AUDIT COMMITTEE CHAIRMAN

(%) Share Holding • 0.20 (In name of spouse 1,000,000 shares)

%) Share Holding • 0.08 (In name of spouse 420,000 shares)

(%) Share Holding • No

Education/Training • Bachelor Degree, Electrical Engineering, Chulalongkorn University • Cost/Schedule Engineer, Exxon Research and Engineering, New Jersey • International Management Program, IMD, Switzerland • Marketing Strategy, Michigan University • Director Accreditation Program (DAP), Director Certification Program (DCP), Finance for Non-Finance Director from Thai Institute of Directors (IOD)

Education/Training • Bachelor Degree, Chemical Engineering, Science Faculty, Chulalongkorn University • Director Accreditation Program (DAP), Director Certification Program (DCP), Finance for Non-Finance Director from Thai Institute of Directors (IOD)

(%) Share Holding • No

Other Current Position Past Experience • Senior Advisor, Purad (Thailand) Co., Ltd. • Director, ESSO (Thailand) Plc. • Supply and Distribution Manager, ESSO (Thailand) Plc. • Director, Thai Petroluem Pipeline Company Limited

Board of Directors

Annual Report 2009

Other Current Position • Director, Thai Aviation Refuelling Co., Ltd. Past Experience • Advisor, Air Total (Thailand) Co., Ltd. • Managing Director, Air Total (Thailand) Co., Ltd.

Bangkok Aviation Fuel Services Plc.

Education/Training • Bachelor Degree, Philosophy, Politics and Economics, Oxford University, England • Certificate, National Defence College, The National Defence Course for the Joint State-Private Sectors, Class 6 • Director Certification Program (DCP), The Role of Chairman from Thai Institute of Directors (IOD)

Education/Training • Honorary Degree of Doctor of Laws, Ramkhamhaeng University • Class 399 National Defence Course for the Joint State-Private Sectors, National Defence College • Barrister at Law, Institute of Legal Education of The Thai Bar • LL.B., Thammasat University • Certificate from Naval College • Director Accreditation Program (DAP), Other Current Position • Independent Director and Audit Committee Member, Audit Committee Program (ACP) Thoresen Thai Agencies Plc. from Thai Institute of Directors (IOD) • Vice Chairman, Nomination and Remuneration Committee • Public Director Certification Program Member, Electricity Generating Plc. from Public Director Institute • Director, Chairman of Risk Management Committee, Other Current Position and Executive Director, Krung Thai Bank Plc. • Audit Committee Chairman and Independent Director, • Chairman, Ch.Karnchang Plc. Krung Thai Bank Plc. Past Experience • Director, Office of the Council of State • Chairman of Executive Committee, • Sub-committee, Sukhumvit Asset Management Co., Ltd. Electricity Generating Plc. • Director, Thai Aviation Refuelling Co., Ltd. • Director and Executive Director, Past Experience Siam Commercial Bank Plc. • President, The Industrial Finance Corporation of Thailand • Attorney General, Office of the Attorney General • Deputy Attorney General, Office of the Attorney General • National Legislative Assemble Member • Director, Thai Airways International Plc. • Director, IRPC Plc. • Director, Provincial Electricity Authority

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Board of Directors BOARD OF DIRECTORS

(%) Share Holding • No

Education/Training • MBA, Northern Illinois University, USA. • Bachelor of Commerce, Chulalongkorn University • Certificate, National Defence College, Class 38 • Director Certification Program (DCP), Audit Committee Program, Role of the Compensation Committee, Monitoring the System of Internal Control and Risk Management (MIR), Corporate Fraud, Monitoring the Quality of Financial Reporting (MFR) from Thai Institute of Directors (IOD) Other Current Position • Director, Thai Aviaition Refuelling Co., Ltd. • Independent Director and Audit Committee, Krung Thai Bank Plc. • Director, Paiboon Insurance Co., Ltd. Past Experience • Deputy Permanent Secretary, Ministry of Finance • Inspector-General, Ministry of Finance • Comptroller-General, Ministry of Finance • Director-General, The Treasury Department, Ministry of Finance

Annual Report 2009

Education/Training • Master Degree in Economics, Florida Institute of Technology, USA. • Bachelor Degree in Economics, Asia University, Japan • Director Accreditation Program (DAP), Financial Statement for Directors from Thai Institute of Directors (IOD) Other Current Position - Past Experience • Chairman, Krung Thai Asset Management Plc. • Vice Chairman, Krung Thai Asset Management Plc. • Acting Management Director, Krung Thai Asset Management Plc. • Chairman of Audit Committee, Krung Thai Asset Management Plc. • Assistant Director, The Bereau of the Budget, The Prime Minister Office

(%) Share Holding • 0.62 (In name of himself and spouse 3,150,000 shares) Education/Training • Master of Community and Regional Planning, North Dakota State University, USA. • Bachelor of Science, Medical Technology, Mahidol University • Certificate, National Defence College, The National Defence Course for the Joint State-Private Sectors, Class 15 • Director Accreditation Program (DAP), Director Certification Program (DCP), Finance for Non-Finance Director, The Role of Chairman, Role of the Compensation Committee, Successful Formulation and Execution of Strategy (SFE) from Thai Institute of Directors (IOD) Other Current Position • Director and Managing Director, Thai Aviation Refuelling Co., Ltd. • Director and Managing Director, JP-One Asset Co., Ltd. • Chairman, Intoplane Services Co., Ltd. • Director, Fuel Pipeline Transportation Ltd. Past Experience • Executive Vice President, Corporate Development and Support Department, Thai Airways International Plc. • Managing Director, Fuel Pipeline Transportation Ltd.

Bangkok Aviation Fuel Services Plc.

Management Team

(%) Share Holding • No

M.R. Supadis Diskul Managing Director

Management Team

Mr. Sumon Surathin Independent Director and Audit Committee Director

MANAGEMENT TEAM

Management Team

Mr. Visut Montriwat Independent Director and Audit Committee Director

Management Team

Annual Report 2009

Management Team MANAGEMENT TEAM

MANAGEMENT TEAM

Mr. Jarern Pavarojkit Deputy Managing Director - Operations

Dr. Pugdee Manaves Deputy Managing Director – Administration

Mr. Amnuay Pahuvanich Senior Technical Manager

Mr. Ditsapong Prithaveepong Senior Depot Manager

Mr. Chathaya Bandhaya Senior Finance & Accounting Manager

Mr. Tawin Saiwaew Senior Aviation Refuelling Manager

(%) Share Holding • No

Education/Training • Bachelor Degree, Electrical Engineering, Krasetsart University • Director Certification Program (DCP), Financial Statement for Directors (FSD) from Thai Institute of Directors (IOD) • Economics in Public Administration for High-Level Administrators-King Prajadhipok’s Institute

Education/Training • MBA, Commerce and Accountancy Faculty, Chulalongkorn University • Bachelor of Engineering, Chulalongkorn University • Director Certification Program (DCP) from Thai Institute of Directors (IOD)

Education/Training • MBA, Personnel Management, NIDA • Bachelor of Economics, Chulalongkorn University • Director Certification Program (DCP) from Thai Institute of Directors (IOD)

Education/Training • Master of Management, Mahidol University • Bachelor of Arts, General Management, Dhonburi Rajabhat University

Other Current Position • Director, Intoplane Services Co., Ltd.

Past Experience • Airfield Manager, Bangkok Aviation Fuel Services Plc. • Director, Intoplane Services Co., Ltd.

Education/Training • Postdoctoral Degree, University of Vaasa, Finland • D.Eng., Kasetsart and Case Western Reserve University, USA. • Ph.D., American University, USA. • MSc., University of London, UK. • B.Eng., Chulalongkorn University • Certificate in Executive Development Other Current Position • Director and Managing Director, Program, University of California, Los Angeles, USA. Intoplane Services Co., Ltd. • Director, Thai Aviaition Refuelling Co., Ltd. • Director Certification Program (DCP), Finance for Non-Finance Director • Director, JP-One Asset Co., Ltd. from Thai Institute of Directors (IOD) Past Experience • Deputy Managing Director, Other Current Position Bangkok Aviation Fuel Services Plc. • Director, Intoplane Services Co., Ltd. Past Experience • Chief Executive Officer, Castrol Chemicals Limited Education/Training • Bachelor Degree, Mechanical Engineering, Krasetsart University • Director Certification Program (DCP) from Thai Institute of Directors (IOD) • Economics in Public Administration for High-Level Administrators-King Prajadhipok’s Institute

Management Team

Annual Report 2009

Past Experience • Technical Manager, Bangkok Aviation Fuel Services Plc.

Bangkok Aviation Fuel Services Plc.

Other Current Position • Director, JP-One Asset Co., Ltd.

Other Current Position • Director, JP-One Asset Co., Ltd. • Director, Intoplane Services Co., Ltd. • Director, Fuel Pipeline Transportation Ltd.

Other Current Position Past Experience • Depot Manager, Bangkok Aviation Fuel Services Plc.

Past Experience • Finance & Accounting Manager, Bangkok Aviation Fuel Services Plc.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Management Team

Nature of Business MANAGEMENT TEAM

NATURE OF BUSINESS Bangkok Aviation Fuel Services Public Company Limited (BAFS) provides aviation fuel services including aviation fuel depot and aircraft refuelling service at Suvarnabhumi Airport and Don Mueang Airport. Currently, the Company consists of major shareholders namely Thai Airways International Plc., Chevron (Thailand) Ltd., PTT Plc., ESSO (Thailand) Plc., The Shell Company of Thailand Ltd., Airports of Thailand Plc., and Air Total (Thailand) Co., Ltd.

Miss Raweewan Mantasatian Human Resources and Administration Manager

Mr. Pichai Pathravutigul Don Mueang and Regional Airport Manager

Mr. Charoen Charusalaipong Business Development and Marketing Manager

(%) Share Holding • 0.01 (In name of herself 30,000 shares)

(%) Share Holding • No

Education/Training • MBA, Sripratum University • Bachelor of Science, Chulalongkorn University

Education/Training • MBA, Sripratum University • Bachelor of Science, Mahidol University

Other Current Position - Past Experience • Deputy Airfield Manager, Bangkok Aviation Fuel Services Plc.

Other Current Position - Past Experience • Executive Assistant of Quality Management, Bangkok Aviation Fuel Services Plc.

Education/Training • Master of Public Administration, Human Resources Management, NIDA • Bachelor of Public Administration, Ramkhamhaeng University Other Current Position Past Experience • Deputy Human Resources & Administration Manager, Bangkok Aviation Fuel Services Plc

Besides the service at Suvarnabhumi Airport and Don Mueang Airport, the Company services two regional airports in Sukhothai Airport, Sukhothai Province, and Samui Airport, Suratthani Province. Furthermore, the Company conducts its business through subsidiary and related companies i.e. Thai Aviation Refuelling Company Limited (TARCO), JP-One Asset Co., Ltd. (JP-One), Intoplane Services Company Limited (IPS), and Fuel Pipeline Transportation Limited (FPT) as per details in the topic of “General Information - BAFS’s Shareholdings in Subsidiary and Related Companies” Operation Policy of the Group The Company has a clear operation policy within the group. For aviation fuel service business, the Company is a sole operator at Don Mueang Airport and regional airports, providing a comprehensive aviation fuel service including hydrant pipeline system, depot, and into-plane service. For Suvarnabhumi Airport, the Company provides aviation depot and into-plane service, while Thai Aviation Refuelling Company Limited (TARCO) provides only hydrant pipeline system. For pipeline transportation business, Fuel Pipeline Transportation Limited (FPT) provides service in this business, while JP-One Asset Co., Ltd. (JP-One) provides pipeline transportation service only from Makkasan to Suvarnabhumi Airport. As for Intoplane Services Company Limited (IPS), it conducts into-plane fuelling service, by engaged from the Company. Currently, it provides service only at Samui and Sukothai Airports. In the future, the operation policy within the group may change according to the changing in economics, political, and competition factors. However, any change would be for the best interest of the whole group of the Company.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Nature of Business

Results of

RESULTS OF OPERATIONS IN 2009

Revenue Structure

The Company has three sources of revenue as follows : 1. Services Income from providing aviation fuel services including fuel depot, transporting aviation fuel through pipeline and aviation refuelling services 2. Rental Income 3. Other Income (Unit : Million Baht) Type of Revenue

Operate % of Investment by by BAFS

Year 2009 Amount

Percent

Year 2008 Amount

Percent

Year 2007 Amount

2,034.98

100.0 2,127.01

100.0 2,258.09

1. Depot Operations At Suvarnabhumi Airport In 2009, the Company provided aviation fuel intermediate storage services with 3 main storage tanks, with a combined capacity of 45 million liters1, equivalent to 3 days of operating stock.

The total volume of Jet A-1 received from the oil companies was 4,000.3 million liters, with JP-One Assets Co., Ltd. (JP-One) and Thai Petroleum Pipeline Co., Ltd. (Thappline) providing 859.9 million liters and 3,140.4 million liters respectively ; a ratio of 21 : 79.

Percent

1. Services Income BAFS 1,343.81 66.0 1,404.33 66.0 1,488.06 65.9 TARCO 90% 555.79 27.3 571.58 26.9 610.29 27.0 JP-One 92.5% 97.25 4.8 82.99 3.9 87.83 3.9 2. Rental Income BAFS 16.69 0.8 19.28 0.9 20.20 0.9 TARCO 90% - - - JP-One 92.5% - - - 3. Others Income * 21.44 1.1 48.83 2.3 51.71 2.3 Total

Operation in 2009

100.0

Remarks: * Other income comprises of Defuel fee, Gain (Loss) form Foreign Exchange, other income such as interest received, guarantee fee income and Gain-Loss sharing from equity method.

Summary of Suvarnabhumi Airport Depot Operations

Total volume of Jet A-1 received Daily average volume of Jet A-1 received Daily average volume of Jet A-1 received from JP-One Daily average volume of Jet A-1 received from Thappline

2009 Million liters

2008 Million liters

Increase (decrease) %

4,000.3 11.0 2.4 8.6

4,131.2 11.3 2.1 9.2

(3.2) (2.7) 14.3 (6.5)

Note 1) Total number of storage tanks at Suvarnabhumi Airport Depot is 7 tanks with a total capacity of 90 million liters. JP-One, a Companyâ&#x20AC;&#x2122;s subsidiary, has rented 4 of the 7 tanks.

At Don Mueang Airport In 2009, the Company provided aviation fuel intermediate storage services with 2 main storage tanks, with a combined capacity of 14 million liters, and a daily average volume received of 233,523 liters. The Company decreased 1 main storage tank to correspond with the single airport policy of the government and the flffllight relocation of Thai Airways International Plc. from Don Mueang Airport to Suvarnabhumi Airport since March 29, 2009. This decrease enhanced the effiffiificiency of aviation storage as well as reduced expenses in operation and maintenance. The total volume of Jet A-1 received was 85.2 million liters (a daily average of 0.23 million liters).

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Summary of Don Mueang Airport Depot Operations

2009 Million liters

2008 Million liters

Increase (decrease) %

Total volume of Jet A-1 received

85.2

169.7

(49.8)

Daily average volume of Jet A-1 received

0.23

0.46

(50.0)

Flights

At Suvarnabhumi Airport

2009

2008

Increase (decrease) %

Domestic Flights Number of ffllflights 37,961 29,505 Volume of fuel uplifted (million liters) 334.1 233.3

28.7 43.2

At Suvarnabhumi Airport

International Flights Number of ffllflights Volume of fuel uplifted (million liters)

(3.5) (5.4)

JET A-1

At Don Mueang Airport

2. Into-plane Operations 2.1 Refuelling Operations

Total volume of Jet A-1 uplifted during 2009 was 3,612.2 million liters, or 301 million liters per month, supplying 122,235 total annual flffllflights (average of 10,186 flffllflights per month). At Don Mueang Airport JET A-1 Total volume of Jet A-1 uplifted during 2009 was 95 million liters, or 7.9 million liters per month, supplying 12,518 total annual flffllflights (average of 1,043 flffllflights per month). AVGAS Total volume of Avgas uplifted during the same period was 189,912 liters or 15,826 liters per month, supplying 2,463 total annual ffl lfl ights (average of 205 ffllflights per month).

84,274 3,278.1

87,290 3,466.9

Domestic Flights Number of ffllflights 11,767 20,478 Volume of fuel uplifted (million liters) 89.4 162.8

(42.5) (45.1)

International Flights Number of ffllflights Volume of fuel uplifted (million liters)

(41.2) (60.3)

751 5.6

1,278 14.1

Totals Total number of ffllflights Total volume of fuel uplifted (million liters)

134,753 3,707.2

138,551 3,877.1

(2.7) (4.4)

2.2 Defuelling Operations At Suvarnabhumi Airport The Company supplied Jet A-1 defuelling services to 77 flffllights (6 ffllflights per month), with a total combined volume of 1.2 million liters or 0.1 million liters per month. At Don Mueang Airport The Company supplied Jet A-1 defuelling services to 129 ffllflights (11 ffllflights per month), with a total combined volume of 2.5 million liters or 0.2 million liters per month. 2.3 Number of Flights Serviced The Company provided aviation refuelling services to 134,753 ffllflights at Suvarnabhumi Airport and Don Mueang Airport, during 2009, a decrease of 3,798 ffllflights or 2.7% from 2008. Total volume of fuel uplifted at both airports in 2009 was 3,707.2 million liters, a decrease of 170 million liters or 4.4% from 2008. 28

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Summary of SUMMARY OF BUSINESS CHANGING In 2009, Thai Government wanted to endorse Suvarnabhumi Airport to be one of the major hubs in the South Eastern Region and to operate Suvarnabhumi Airport as a single airport in the country. On March 29, 2009, Thai Airways International migrated all of their domestic flights from Don Mueang Airport to Suvarnabhumi Airport. As a result of this relocation, the flight frequency and the consumption of fuel dropped drastically at Don Mueang Airport. During 2009, the aircraft refuelling business was massively affected by many negative factors. Due to these consequences, fuel consumption was minus 5 percent compared with the figures from the previous year.

Operations at Suvarnabhumi Airport After Thai Airways International migrated all of their domestic flights from Don Mueang Airport to Suvarnabhumi Airport, the total amount of domestic flights that the Company provided aircraft refuelling at Suvarnabhumi Airport in 2009 was 37,961 flights in total. The amount of flights compared to the previous year increased about 29 percent, causing the Company to transfer 2 aviation hydrant dispenser trucks from Don Mueang Airport to Suvarnabhumi Airport, in order to accommodate and service the additional domestic flights from Thai Airways International at Suvarnabhumi Airport. Currently, in total, the Company has 40 aviation hydrant dispenser trucks and 3 refueller tank trucks. However, the business aviation industry was extremely affected with many negative factors, global economic recessions, pandemic of the Influenza A (H1N1) Virus, and also the political government disorder. Due to the outcome of these negative factors, many carriers canceled their flights substantially, the amount of international flights was reduced to 84,274 flights, compared to last year the flights reduced 3 percent. Even though in the last quarter, the global economic recession gradually recovered and Emirates promoted their brand new Airbus 380 from Dubai to Bangkok, which consumed a massive amount of fuel. This did not have any affect on the volume of international flights that the Company provided service to, the volume reduced 5 percent from the previous year. Outlining the amount of flights in 2009, the Company provided aircraft refuelling services at Suvarnabhumi Airport, at a total of 122,235 flights, which was divided into 2 categories. For domestic flights a total of 37,961 flights and for international flights 84,274 flights or an average of 335 flights per day, increased 5 percent from the previous year. The main factor of the percentage increase was from the migration of Thai Airways International domestic flights from Don Mueang Airport to Suvarnabhumi Airport. The Company services 95 percent of the total number of flights landing at Suvarnabhumi Airport. 30

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Business Changing In the coming future, Suvarnabhumi Airport will be evolving a policy for a â&#x20AC;&#x153;Green and Clean Airportâ&#x20AC;?. In order to reduce air pollution in the Suvarnabhumi Airport area, Airports of Thailand (AOT) will emphasize on reducing power consumption and also promote all of the vehicles that will operate at the ramp side to be mainly electrical vehicles. The Company has always realized the importance and problems of global warming climates and in conjunction with the policy of the AOT to reduce carbon dioxide discharge seriously and to demonstrate responsibility towards society and the environment. The Company has invested in feasibility studies for changing the current aviation hydrant dispenser trucks that are currently using Euro 3 diesel engines to be electrical vehicle dispenser trucks. Within 2010, the Company plans to be experimenting with 2 electrical vehicle dispenser trucks.

Operations at Don Mueang Airport After migrating domestic flights of Thai Airways International to Suvarnabhumi Airport, only a few carriers were still operating at Don Mueang Airport. The major airlines that are still using the airport are One-Two-Go, Nok Air, and charter flights. Due to this diminution, fuel consumption at the airport decreased significantly. During 2009, Don Mueang Airport accommodated 12,518 flights, decreased from last year 42 percent with fuel consumption of 95 million liters or 260,000 liters per day, decreased from last year 46 percent. The major cost of refuelling by hydrant dispenser trucks was from the pipeline rental charge which paid to AOT and because of this dramatic decrease of flights the Company had high operation expenditures. The management team decided to stop using the aviation hydrant dispenser trucks that were using the pipeline system under the apron or the hydrant system. Instead the Company was using the remaining 8 refueller tank trucks for servicing approximately 30 flights per day. The Company still provides fast and punctual services with high international standards and also represents optimized cost management. Due to the reduced amount of flights, affecting fuel consumption and storage of jet fuel, the financial bottom line of the Company was also affected. Therefore, the Company sought for additional revenue by reducing the amount of jet fuel in the storage tanks in order to match with the decreased fuel consumption. For the remaining tanks that were not reserved for jet fuel, the Company used these particular tanks for diesel storage. For transporting diesel, the Company was still using the pipeline, which is a closed system that was also used for transporting jet fuel. Then diesel will be transported back via FPT pipeline to Bangpa-In. This project is expected to be completed by mid 2010. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Aviation Refuelling Overview and Competition AVIATION REFUELLING OVERVIEW AND COMPETITION

INNOVATING AND DEVELOPING FOR THE FUTURE

Thailand’s aviation refuelling business in 2009 was in contraction conditions.

In addition, the aviation industry was affected negatively by the global economic recession continuing from the previous year. Other problems included the political unrest in Thailand during April, when Thailand was the host of the ASEAN summit held at Pattaya and the pandemic of the Influenza A (H1N1) Virus. The consequences of these problems caused many carriers to cancel their flights to Bangkok. The fuel consumption for the first 3 quarters of the year was in contraction, causing fuel consumption to be minus 10 percent compared to the previous year during the same period. However, in the last quarter of 2009, stimulate economic measures of foreign governments began to see that the economy of other countries improved gradually and reflected the dynamic aviation industry to be agile again. During the high season, flights started to steadily increase and the fuel consumption returned to growth at 16 percent compared to the fourth quarter of the previous year prior to the event of closing of both airports, causing the base calculation to be low. Therefore, the total amount of fuel consumption in 2009 was down by 5 percent prior to the previous year. The total amount of fuel consumption was at 4,117 million liters, the fuel consumption at Don Mueang Airport was at 95 million liters or averaged at 0.2 million liters per day. For the fuel consumption at Suvarnabhumi Airport was at 4,021 million liters or averaged at 11 million liters per day. The Company has a 90 percent market share for the into-plane service business at Suvarnabhumi Airport. For 2010, the Company forecasts that fuel consumption at Suvarnabhumi Airport will be able to grow and expects the fuel consumption to be 4,122 million liters, based on the economic recovery and carriers will not be canceling flights like in 2009. While the situation at Don Mueang Airport will still be the home base for low cost carriers, such as Nok Air and One-Two-Go. Increase of flights and new destinations are expected, such as Sakon Nakhon, Nakhon Phanom, Buriram, and Udon Thani. Due to these new destinations, fuel consumption in 2010 is expected to be at 60 million liters per year or 0.5 million liters per day. So the overall fuel consumption for both airports is expected to be at 4,182 million liters, representing 2 percent growth increase. If there are any uncertainties of the following factors, such as peace, security, political stability, and global economic conditions, they may affect the Thai economy and also the tourism industry. As a result of all of the above factors, growth of the fuel consumption may not proceed as expected. The Company aims to maintain 80 percent of the market share at Suvarnabhumi Airport by focusing on satisfying and fulfilling the demands of the customers, which are the oil companies. The Company will maintain service quality under the motto “Service with our hearts” and emphasizes highest priority in safety via modern technology. This will create highest satisfaction to indirect customers, which are the airlines. The Company also focuses on cost conscious and fortifies good relationship with all customers. 32

Annual Report 2009

Innovating and Developing for the Future

Bangkok Aviation Fuel Services Plc.

The Company will continue to fulfill its Vision and Mission by enhancing the aviation refuelling and storage capabilities in line with the growth of air traffic and planned airport expansion. The Company is also looking into various business opportunities as a way to increase revenue. 1. Projects at Suvarnabhumi Airport 1.1 Additional Main Hydrant Pump Project In 2008, the Company finished the installation of an additional main hydrant pump which increased the maximum fuel delivery capability into the hydrant network to 3,640m3/hr. The data shows a trend of increasing fuel uplifts, especially from 10:00 pm to 1:00 am, which coincides with the peak period for intercontinental flights to and from Europe. To ensure sufficient supply of fuel to the airport, during all periods of operation, the Company will install an additional main hydrant pump, which will be completed at the end of 2011. 1.2 Digital Register for Bulk Meter Study The Company is preparing to implement a digital bulk meter solution for the hydrant dispenser vehicles by replacing the existing mechanical registers with digital units. The expected benefits include significant reduction in maintenance, and seamless integration with On-Truck Computer System. 2. Projects at Don Mueang Airport Don Mueang Depot Diesel Storage Project The Company will construct a pipeline between Fuel Pipeline Transportation Limited (FPT)’s Don Mueang pipeline receipt facility and the Company’s main storage tanks, thus providing the Company with capacity to store diesel fuel, then the Company will has additional income from diesel storage. 3. Environmental and Energy Conservation Projects 3.1 Eco-Friendly Hydrant Dispenser Study The Company will study the feasibility and benefits of deploying alternative energy, or low-emission hydrant dispenser vehicles at Suvarnabhumi Airport, in line with Airports of Thailand Plc.’s “Green and Clean Airport Initiative”, and to promote the Company’s corporate image as an environmentally responsible corporate entity. 3.2 Fight against Global Warming Initiative The Company will progressively introduce the use of clean technologies in the operations, and conduct a feasibility study regarding the sales of Certified Emission Reductions (CERs) or Carbon Credits, via the United Nations Clean Development Mechanism, to countries that have ratified the United Nations Framework Convention on Climate Change.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Risk Factors

Risk factors Bangkok Aviation Fuel Services Plc. has continuously and systematically managed its relevant risks, which enables the Company to mitigate risk to the acceptable level in preceding year. The risk points and controlled plans have been annually adjusted to align with the corporate strategic target, concerning the sustainable growth of the Company and increasing value to shareholders in the long run. The risk factors of the Company which may occur and could affect shareholders and stakeholders are as follows.

1. Business risks 1.1 Risk from decelerating growth of the flights Due to the Company’s major revenue is from aircraft refuelling services at Don Muaeng, Samui, Sukhothai, and especially at Suvarnabhumi Airport; therefore, the Company places high priority and closely monitor on any events which may affect the number of flights coming into Suvarnabhumi Airport. For example, the airport closures at Suvarnabhumi and Don Muaeng Airports in 2008 and the protest in April 2009, has led to the declining of foreign tourists which has directly affected the Company’s revenue. Although the tourism industry in 2010 is tending to grow up, the Company may still confront with this risk as the political uncertainty exists and those incidents are uncontrollable factors. To manage the aforementioned risks which caused the revenue declining in 2008 and 2009, the Company controlled expenses in every department as well as reduced welfare of its employee which helped the Company generate profit as targeted and be able to pay dividend to shareholders. Even though the aircraft fuel uplift volume is tending to increase in 2010, the Company still controls its expenses to underlie the impact if such risk happens. Furthermore, the Company plans to exercise the unutilized asset at Don Muaeng Airport by renovating a pipeline between Fuel Pipeline Transportation Limited (FPT)’s Don Mueang pipeline receipt facility and the Company’s main storage tanks, thus providing the Company with capacity to store diesel fuel, which is another method to increase the revenue of the Company. 1.2 Risks relating to the uncertainty in usage of Don Muaeng Airport At Don Muaeng Airport, BAFS provides aircraft refuelling service to 2 airlines i.e. Nok Air and One-Two Go, with approximately 33 flights per day, chartered flights, training flights, government flights and maintenance aircrafts. The Company has provided adequate equipment and manpower to accommodate all flights at Don Muaeng Airport. Anyway, the Company is still facing a risk about the uncertainty of government decision regarding single or dual airports.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

However, the Company has prepared the flexible operation plan so that it can relocate resources between the two airports to anticipate the uncertainty in Don Muaeng Airport usage and to maximize efficiency and effectiveness of the service. 1.3 Risks relating to the re-routing and aircraft modification for energy saving Due to the fluctuation and higher fuel price, the airlines incline to re-route their airways for less fuel consumption and turn their current aircraft into a saving energy type, while the Company’s service cost remains the same, thus the Company’s revenue tends to decrease. To manage this risk, the Company has performed the Activity Base Management system to enhance the service rate adjustment to reflect its actual cost by activity in order to retain revenue in sustainable level.

2. Risk from operations 2.1 Risks relating to inadequate fuel reserve for service at Suvarnabhumi Airport The Company currently receives jet fuel from JP-One Asset Co., Ltd. and Thai Petroleum Pipeline Co., Ltd. The Company reserves jet fuel enough for 3 days usage at Suvarnabhumi Airport in order to cope with any disruption or incident which interrupt the transportation of jet fuel to the airport. However, the Company mitigates the risk of fuel reserve by using two fuel pipeline companies, whereby one company can back up another in case of an accident or damage disrupting to one of fuel pipelines. In addition, the Company has set up a Fuelling Operations Committee (FOC), comprising the Company’s managements and representatives from oil companies with experiences in aviation fuel to attend the meeting for exchanging their opinions in order to improve the utmost efficiency of refuelling services. Furthermore, the oil companies as the Company’s shareholders also monitor and inspect the operations of the Company once a year by assigning the inspectors from the group of oil companies, as the Joint Inspection Group - JIG, to ensure that the Company’s operation meet with the international standards. 2.2 Risk relating to conflagration or terrorism As the Company’s business relates to aviation fuel, the fuel storage tank is situated in vicinity of Don Muaeng and Suvarnabhumi Airports. There may be a risk of conflagration or other hazards such as leakage, oil vapor diffusion or terrorism, which could lead to serious damage to lives, properties, environment and the Company’s operation. Therefore, the Company realizes in the importance of safety, by strictly complies with the Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Risk Factors Occupational Health and Safety Assessment Series : OHSAS 18001 : 2001. Every employee is well-aware of their individual responsibilities and strictly conforms to the health, safety and environment policies. Moreover, the Company has conducted the risk transfer by possessing the insurance policies with Bangkok Insurance Plc. and Dhipaya Insurance Plc. The policies cover the followings. 1. All-risks insurance policy which covers business interruption. The policy valued Baht 5,167.2 million. 2. Aviation Third Party Legal Liability Insurance Policy, valued of 750.0 millions USD, and Terrorism and Disaster Insurance, valued of 5,288.2 millions Baht. 3. Accidental Damage (property) Insurance Policy coverage for the Company’s property, valued of 120.9 million Baht. 2.3 Risk from the drive in global warming mitigation policy The negative repercussions of global warming have indeed become more accelerated and amplified, which have clearly seen from the unpredictable changes in meteorological conditions such as snow storm in Europe. Thus, all countries over the world are seriously taking these matters into account including the Airport of Thailand Plc. (AOT) which release the “Green and Clean Airport” policy. In a couple of years, the companies operated in Suvarnabhumi Airport will have to mitigate the carbon dioxide emission according to the above policy. As the Company concerns the aforementioned issue, Global Warming Mitigation Committee has been set up. This committee would follow all the relevant policy and regulation as well as conduct feasibility study of turning the hydrant dispenser which used diesel fuel to an electrical energy in order to reduce the carbon dioxide emission and for environmental friendly purpose.

3. Financial risks 3.1 Risks relating to US Dollar Exchange Rate Fluctuation The Company is exposed to exchange rate risk due to 20% of Into-plane service fee is in US Dollar. The Company’s earnings could be adversely affected when the US Dollar depreciates against Thai Baht However, the Company hedges the fluctuation of exchange rate risk by using the forward contract on such revenue at the specified proportion and period as appointed in the risk management policies. 3.2 Risks relating to Financial Obligations on Long- Term Loans Currently, the Company has three loans which use for the expansion of aviation refuelling service business. 3.2.1 Loan for the investment of main depot and into-plane services systems projects. The Company obtained 10-year with 2,000 million Baht loan from Bangkok Bank Plc., paying back loan started in 2008. At 36

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Risk Factors December 31, 2009, the Company has outstanding loan of 1,600 million Baht, which has to pay interest throughout the loan installments. The rate of interest equivalent to 3 months current account interest rate plus 1.25%. Other financial covenants (considering from consolidated financial statement) included Debt-to-Equity ratio not exceeding 1.50 : 1, Debt Service Coverage Ratio (DSCR) not lower than 1.10 : 1, and cumulative DSCR not lower than 1.25 : 1. At present, the Company is able to maintain the financial ratios to comply with all financial covenants mentioned above. 3.2.2 10-year loan contract for buying shares of Thai Aviation Refuelling Co., Ltd. amounts 800 million Baht, paying back loan started in 2007. The outstanding loan at December 31, 2009 is 457.1 million Baht, with interest rate at THBFIX 6 MTH +1% per annum. The Company has hedged interest rate at 5.6% fixed rate throughout the loan installments. Other financial covenants (using separate financial statement) include Debt-to-Equity ratio of not exceeding 2.25 : 1, and Debt Service Coverage Ratio (DSCR) of not lower than 1.20 : 1. The Company is able to maintain the financial ratios to comply with all financial covenants mentioned above. 3.2.3 7-year loan contract for buying shares of JP-One Assets Co., Ltd. amounts 220 million Baht, paying back loan will start in 2011. The Company pays interest rate of MLR – 2% throughout the loan installments. Other financial covenants include Debt-to-Equity ratio of not exceeding 2.0 : 1, in which the Company can still to comply with the financial covenant mentioned above Therefore, the risk of being taken over by the creditors (the Bank) due to failing to comply with the financial covenant, leading to liquidity problem and the effect on the Company’s performance, still remains However, the Company has postponed all investment plan in 2010, thus the Company believes to some extent that it is able to comply with all financial covenants specified in the long - term loan contract. 3.3 Risk from guaranteeing debt obligation of subsidiary Currently, the Company is a guarantor to the loan obligations for its subsidiaries including Thai Aviation Refuelling Co., Ltd. and JP-One Asset Co., Ltd. The Company is exposed to the risks of its subsidiaries operating at loss and not be able to comply with the conditions in the loan contracts with the creditors, which will impact the Company due to the liability to financial obligations to the subsidiaries’ loans. However, the Company has a measure to continuously control its subsidiaries’ operations and acquire monthly report of its subsidiaries’ performance by consolidating into the Company’s financial statement through Cost Method Accounting. The Company has established the system to monitor it’s subsidiaries’ operation and the direction for its subsidiaries. Furthermore, the Company has Internal Audit department to inspect its subsidiaries’ performance, and regularly reports to the Company’s Audit Committee. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Shareholder and Management Structure SHAREHOLDER AND MANAGEMENT STRUCTURE

Directors Authorized to Sign on Behalf of the Company The directors whose signatures are recognized as binding on the Company are M.R. Supadis Diskul, Mr. Vinai Chamlongrasdr, Mr. Navee Lertphanichkul, Mr. Serirat Prasutanond, Mr. Tanachai Vienravee, Mr. Ath Hemvijitraphan, Mr. Tevin Vongvanich, Flying Officer Norahuch Ployyai, two out of eight directors sign and affix the Company’s seal.

1. Shareholding Structure Top ten shareholders as of Aug 28, 2009 (latest shareholding’s book closing date) : 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Names

Number of shares

Thai Airways International Plc. PTT Plc. Chevron (Thailand) Limited Esso (Thailand) Plc. The Shell Company of Thailand Ltd. Airports of Thailand Plc. Air Total (Thailand) Co., Ltd. Singapore Petroluem (Thailand) Company Limited Petronas Retail (Thailand) Co., Ltd. BP Oil (Thailand) Limited

115,186,150 36,000,000 36,000,000 36,000,000 36,000,000 25,200,000 18,000,000 10,200,000 10,200,000 10,200,000

Shareholding % 22.59 7.06 7.06 7.06 7.06 4.94 3.53 2.00 2.00 2.00

2. Management Structure

Names

The composition, appointment, removal and termination of the Directors have been prescribed in the Company’s rules, which can be summarized as follows : The Board of Directors shall consist of al least 11 persons but not exceeding 15 persons elected and removed at the Shareholders’ Meeting. At least half of the directors shall reside in Thailand and shall have the qualifications as specified by laws. The directors shall be elected by the Shareholders’ meeting under the specified rules and regulations. At every Annual General Meeting, one-third of the directors who have longest directorship term shall retire from the positions. Anyway, those directors may be reappointed to be the directors. The Shareholders’ meeting may resolve to remove the Board of Directors prior to their retirement, with a three-quarter vote of the shareholders, who present in the meeting and have voting rights, and with an aggregate number of up to half of all shares held by such shareholders.

Position

1. Mr. Palakorn Suwanrath 2. M.R. Supadis Diskul 3. Flying Officer Norahuch Ployyai 4. Mr. Serirat Prasutanond 5. Mr. Ath Hemvijitraphan 6. Mr. Tanachai Vienravee 7. Mr. Navee Lertphanichkul 8. Mr. Vinai Chamlongrasdr 9. Mr. Tevin Vongvanich 10. Mr. Aswin Kongsiri 11. Mr. Pachara Yutidhammadamrong 12. Mr. Visut Montriwat 13. Mr. Sumon Surathin Mr. Tarnthong Chandrangsu

Composition and Appointment of the Board of Directors

The Retirement of the Board of Directors

The Board of Directors (as of Dec 31, 2009) :

Shareholder and Management Structure

Chairman and Independent Director Managing Director Director Director Director Director Director Director Director Independent director Independent director Independent director Independent director Company’s secretary

The Board of Directors specified the retirement age of the director as follows.

the person whom appointed as the director shall not exceed 72 years old at the date that the Nominating Committee propose the name to the Board of Directors the director shall be retired at the age of 75 years old Managing Director shall be retired at the age of 65 years old. The Board of Directors’ Scope of Authorities The Board of Directors shall perform their duties in accordance with Laws, the Company’s objectives and rules, as well as shareholders’ resolutions with honesty while preserving the Company’s interest. The Board of Directors may appoint other persons to act on behalf of the Company under the supervision of the Board of Directors, or Managing Director, or assign them the authorities in accordance with the proper specified scope and within the certain time period. The Board of Directors may terminate, remove, change or revise such scope of authority as deemed appropriate. Managing Director’s Scope of Authority The Board of Directors has authorized Managing Director to engage in various activities on behalf of the Company as specified in the Company’s Power of Attorney document, which can be summarized as follows :

Manage or operate normal business within the limit of Baht 10 million except

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Shareholder and Management Structure

for investment in treasury bill, government bond and for the operating expense as determined by the Company shall be followed the condition set by the Company. Engage any legal transaction, agreement or obligation on behalf of the Company after the Board of Directors have approved Recruit, pay salary or wages, dismiss or deal with other matters relating to any staffs or employees, as deemed appropriate Appoint lawyers and legal counselors Act of behalf of, or in the name of the Company in any activities involving government agencies, state enterprises, or other legal entities. Appoint and transfer of a sub-recipient of power of attorney, or a representative However, such authority does not include the authority, which Managing Director can approve the transaction that Managing Director or connected persons have done with the Company or its subsidiaries. Committees The Board of Directors has set up various committees to help the Board in studying various issues in details and screen workload to improve work efficiency of the Board. The committees consist of Audit Committee, Remuneration Committee, Nominating Committee and Risk Management Committee whose compositions and responsibilities have been prescribed in details in the topic of “Good Corporate Governance.” The Management Team As per details in the topic of “Management Team” 3. Nomination of Directors and Managements 3.1 Nomination of Directors Selection of the Directors and Managing Directors has to be carried out via Nominating Committee to consider and nominate name lists to the Board of Directors and/or the shareholders for their approval. For selecting directors in place of directors who expires form their terms, which has to be carried out via the Shareholders’ Meeting, shall base on majority votes under the specified rules and regulations as follows : 1. Each shareholder shall have has one vote for each share of which he/she is the holder. 2. Each shareholder shall exercise all votes he/she has as per no. 1 to elect one person or many persons as director (s) as such he/she shall not allot his/her votes to any person in any number. 3. The person who receives the most votes according to ranking will be elected as a director according to the position available at that time. The Chairman of the Board will cast the deciding vote in the case where a voting ties between two persons competing for one available position at that time. As such, shareholder shall not spilt votes in electing directors (Cumulative Voting), according to Section 70 of Public Limited Companies Act. The Company has specified the qualification of the directors, and also the qualification of independent director more strictly than Regulations of the Securities and Exchange Commission (SEC) regarding shareholding qualification to enhance the Company’s independent directors to have real independency, by specifying that “Independent Director” must have the qualifications as follows :

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Shareholder and Management Structure

1. holding shares not exceeding 0.5 per cent of the total number of voting rights of the company, its parent company, subsidiary, affiliate, major shareholder or controlling person of the company, including the shares held by related persons of the independent director; 2. neither being nor having been an executive director, employee, staff, or advisor who receives salary, or a controlling person of the company, its parent company, subsidiary, affiliate, same-level subsidiary, major shareholder or controlling person of the company unless the foregoing status has ended not less than two years. This qualification is not include the case that the independent director has been the government officer or advisor of government agency that is major shareholder or controlling person of the company ; 3. not being a person related by blood or registration under laws, such as father, mother, spouse, sibling, and child, including spouse of the children, of executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling persons of the company or its subsidiary ; 4. not having a business relationship with the company, its parent company, subsidiary, affiliate, major shareholder or controlling person of the company, in the manner which may interfere with his independent judgement, and neither being nor having been a major shareholder or controlling person of any person having business relationship with the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest unless the foregoing relationship has ended not less than two years ; 5. neither being nor having been an auditor of the company, its parent company, subsidiary, affiliate, major shareholder or controlling person of the company, and not being a major shareholder, controlling person or partner of an audit firm which employs auditors of the company, its parent company, subsidiary, affiliate major shareholder or controlling person of the company unless the foregoing relationship has ended not less than two years ; 6. neither being nor having been any professional advisor including legal advisor or financial advisor who receives an annual service fee exceeding two million Baht from the company, its parent company, subsidiary, affiliate, major shareholder or controlling person of the company, and neither being nor having been a major shareholder, controlling person or partner of the professional advisor, in case that professional advisor is juristic person, unless the foregoing relationship has ended not less than two years ; 7. not being a director who has been appointed as a representative of the company’s director, major shareholder or shareholders who are related to the company’s major shareholder ; 8. neither doing business that similar to or competitive with business of the company or its subsidiary, nor being a major partner, or executive director, employee, officer, advisor who regularly receives salary, or holding shares not exceeding 1 per cent of the total number of voting rights of other company that doing business that similar to or competitive with business of the company or its subsidiary ; 9. not being a director assigned by the board of directors to take part in the business decision of the company, its parent company, subsidiary, affiliate, same-level subsidiary, major shareholder or controlling person of the company ; 10. not being a director of other listed companies, which are the parent company, subsidiary or same-level subsidiary ; 11. not having any characteristics which make him incapable of expressing independent opinions with regard to the company’s business affairs. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Shareholder and Management Structure

3.2 Selection of Managements

The remuneration in detail is as follows :

Managing Director has been provided with the authority to make recruitment decision of qualified, competent and experienced personnel in accordance with Staff Policies and Procedures Manual, Re : Terms and Conditions of Service Employment. If the selection is from outside persons, the candidates have to be interviewed by the interview committee. 4. REMuNERATION FOR THE DIRECTORS AND MANAgEMENTS 4.1 Monetary Remuneration 4.1.1 The remuneration of the Board of Directors shall be screened by the Remuneration Committee to the Board of Directors, and approved by the Shareholders’ Meeting as follows : Monthly remuneration : Chairman receives 22,000 Baht/month, director receives 19,000 Baht/month Meeting Allowance : Chairman receives 19,000 Baht/time, director receives 16,000 Baht/time Remuneration for Performance (Bonus) : shall be aligned with the policy and condition that screened by the Remuneration committee and propose to the Shareholders’ Meeting annually.

Position

Director Remuneration

Audit Other Bonus year Committee Committees 2008 paid Renuneration Remuneration in 2009

Total

Remuneration in Subsidiary Companies

1. Mr. Palakorn Suwanrath

Chairman

378,000

635,000

1,013,000

2. M.R. Supadis Diskul

Director

324,000

66,000

508,000

898,000

604,580

3. Flying Officer Norahuch Ployyai่

Director

213,933.33

4. Mr. Serirat Prasutanond

Director

324,000

120,500

444,500

456,980

270,614.05

508,000

778,614.05

324,000

421,500

745,500

5. The Shell Company of Thailand Ltd. * (Shell’s Executive has been the Company’s director : Mr. Thepparit Vesurai until February 1, 2009 and Mr. Ath Hemvijitraphan since March 6, 2009) 6. Chevron (Thailand) Limited * (Mr. Tanachai Vienravee,Chevron’s Executive has been the Company’s director) 7. Mr. Navee Lertpanichkul

Director

324,000

12,000

508,000

844,000

8. Mr. Vinai Chamlongrasdr

Director

324,000

36,000

508,000

868,000

455,580

9. Mr. Tevin Vongvanich

Director

229,933.33

10. Mr. Aswin Kongsiri

Director

308,000

60,000

508,000

876,000

11. Mr. Pachara Yutidhammadamrong

Director

229,933.33

205,483.92

435,417.25

90,000

12. Mr. Visut Montrivat

Director

324,000

308,000

22,500

508,000

1,162,500

353,800

4.1.3 The remuneration of the Risk Management Committee, the Remuneration Committee, and the Nominating Committee shall be screened by the Remuneration Committee, and approved by the Board of Directors as follows :

13. Mr. Sumon Surathin

Director

324,000

308,000

18,000

356,500

1,006,500

Mr. Chanchai Singtoroj

Ex-director

94,066.67

508,000

602,066.67

Meeting Allowance : Chairman receives 7,500 Baht/time, director receives 6,000 Baht/time

Mr. Nattachak Pattamasingh Na Ayutthaya

Ex-director

94,066.67

6,000

508,000

608,066.67

Flight Lieutenant Udom Krisnampok

Ex-director

94,066.67

109,866.67

508,000

711,933.34

365,580

Remuneration for the Board of Directors

Mr. Tummasak Chutiwong

Ex-director

255,900

356,500

612,400

Ex-Vice Chairman

289,000

6,000

571,500

866,500

455,580

4.1.2 The remuneration of the Audit Committee shall be screened by the Remuneration Committee, and approved by the Board of Directors as follows : Monthly remuneration : Chairman receives 22,000 Baht/month, director receives 19,000 Baht/month Meeting Allowance : Chairman receives 19,000 Baht/time, director receives 16,000 Baht/time

Number of Directors

15 persons

Total Directors’ remuneration in the positions of Board of Directors, Audit Committee and other committees i.e. Risk Management Committee, Remuneration Committee, and Nominating Committee Year 2009 Year 2008

Names

Unit : Baht

Annual Report 2009

13,483,364.64 Baht 13,495,282.30 Baht

Bangkok Aviation Fuel Services Plc.

ACM Narongsak Sangapong Mrs. Kulya Pakakrong

Ex-director

41,500

Air Marshal Chana U-sathaporn

Ex-director

225,000

Flight Lieutenant Pisal Chayakula

Ex-director

150,000

Mr. Manas Leeviraphan

Ex-director

150,000

6,420

Remarks : * The Company didn’t directly pay the remuneration to that director, but paid to the shareholder of the Company of which that director has been the executive.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Shareholder and Management Structure

Remuneration for the Managements Number of Managements

Dividend Paid (Mil.Baht)

Dividend per shard (Baht)

% of Net Profit*

Year 2009

219.30

0.43

Year 2008

204.00

0.40

Year 2007

265.20

0.52

10 persons

Types of remuneration Total Managements’ remuneration Year 2009 Year 2008

Salary, Bonus, Welfare 52,716,538.55 Baht* 55,120,400.79 Baht*

* including Retirement Benefit Program ; Prior to the establishment of the provident fund, each employee is entitled to benefits based on the employee’s salary level and the number of years employed by the Company. For employees and managements who have been worked with the Company prior to the establishment of the provident fund, they may choose to join the provident fund program, or remain with the retirement benefit program which the employee will receive after retiring. If they choose to join the provident fund program, the Company will guarantee that provident fund benefits will not be less than that of the retirement benefit. 4.2 Other Remunerations Another form of remuneration that the Company provides for the managements is as same as that of the employees, which is monthly contribution to the provident fund ; Employees who start working with the Company after the Company provides provident fund can choose to join the program. The contribution rate will be a progressive percentage rate of the employees’ salary as specified in the Company’s rules. Provident Fund Contribution for the Managements Number of Managements

Remarks : * Calculated from the Company Financial Statement. The Company paid interim dividend to the shareholders at the rate of Baht 0.13 per share on September 7, 2009 and on February 18, 2010, the Board of the Directors’ Meeting approved the dividend payment for last six month of the year 2009 to the shareholders at the rate of Baht 0.30, totaling Baht 0.43 per share for the year 2009, or 59% of net profit. This rate follows the Company’s dividend policy and will propose to the Annual General Meeting for the year 2010. The dividend policy of the Company’s Subsidiaries and Related Company is as follows : TARCO, the Company’s Subsidiary, has dividend policy at the ratio of not less than 60% of Net Profit after Tax, Legal Reserve and Other Reserves, except in the year that TARCO has investment project, it shall pay at the ratio of not less than 30%. JP-One Asset, the Company’s Subsidiary, has dividend policy at the ratio of 100% of Net Profit after Tax, Retained Loss and Legal Reserve. IPS, the Company’s Subsidiary, and FPT, the Company’s Related Company, still have no dividend policy

10 persons

Provident Fund Contribution Year 2009 Year 2008

3,624,644.01 Baht 3,631,054.20 Baht

5. Corporate governance, Internal Information Controlling and Internal Audit As per details in “Good Corporate Governance” 6. Dividend Policy of the Company, its Subsidiary and Related Companies The Company has dividend policy at the ratio of not less than 50% of Net Profit after Tax, Legal Reserve and Other Reserves, of not less than 10%, calculating from the net profit of Company’s financial statement only, such ratio of dividend declaration is subject to the Company’s liquidity and business expansion plan. In the past, the Company has paid dividend by aligning with such policy continually as follows :

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Good

Corporate Governance

GOOD CORPORATE GOVERNANCE 1. SHAREHOlDERS’ RIgHTS The Company recognizes the importance of good corporate governance, by concerning the shareholder’s rights and has provided the Corporate Governance Policy as a guideline for the Board of Directors, managements and employees of the Company to demonstrate its respect to basic shareholders’ rights that are rights to share in profit of the Company, obtain relevant and adequate information of the Company, participate and vote in shareholders’ meeting to elect or remove directors, appoint external auditor and make any decisions on any transactions that affect the Company. The Company has done through the following actions. 1.1 The Board of Directors approved Corporate Governance Policy which can be summarized as follows : Bangkok Aviation Fuel Services Plc. recognizes the importance of good corporate governance including the paramount role that it plays in the sustainable growth and the effective operation of the Company. The Company is therefore committed to do business in compliance with Securities and Exchange Law, Rules and Regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission, Related Business Laws, Articles of Association of the Company, Code of Best Practice for Directors of Listed Companies and the Principles of Good Corporate Governance of the Stock Exchange of Thailand. The Company takes responsibility for its stakeholders, the environment and contributes to society. As such, the Company specifies the governance policy for the Board of Directors, managements and employees to follow by adhering to the following 5 principles : 1. Accountability 2. Transparency 3. Equitable Treatment 4. Long-Term Value-Added Creation to Shareholders 5. Promotion of Best Practices And also adhere to Code of Conduct to ensure that the Company can operate with transparency. The Company has announced “Corporate Governance Policy” to the Board of Directors, managements and employees. 1.2 To evaluate its corporate governance, the Company has policy to attend governance rating by external institution or conduct self-assessment constantly and specified such matter as one of Key Risk Indicator of the Company that has to be monitored quarterly. From the past evaluation, the Company received “very good” corporate governance rating. 1.3 The Company recognizes the importance of shareholders’ rights by facilitating shareholders more than the prescribed laws i.e. provide current important information via the Company’s website, provide Management Discussion and Analysis (MD&A) on a quarterly basis and Newsletter semiannually for etc. 1.4 The Company recognizes the importance of shareholders’ rights, enhances rights using and does not infringe or curtail rights. In the shareholders’ meeting, various important issues, covering the issues as prescribed by Laws, the Regulations of the SET and the articles of association of the Company have been proposed for the approval of shareholders. 1.5 The shareholders will receive in advance the meeting invitation letter together with meeting documents for various agendas, where information regarding date, time, place, agendas, enclosures of each agenda, the directors’ opinion, articles of association relating to the meeting, map of meeting place, documents or evidences required to be presented on the meeting date, meeting attendance procedure are given. The Company has sent the meeting invitation letter to shareholders 14 days in advance and posted such information, which is the same information as sent to shareholders, in the Company’s web site 30 days before the meeting date to facilitate shareholders to have time in considering such information in advance. The Company has also advertised in daily newspaper 3 days consecutively and 3 days in advance about the shareholders’ Meeting. 46

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

1.6 The Company does not curtail rights of shareholders who came late, facilitates shareholders to use their meeting rights, and allows registration of shareholders at least 1 hour before the meeting, for which a barcode system detailing each shareholder is printed in the registration form. This is to facilitate the registration for time saving and accuracy. 1.7 Important agendas in the shareholders’ meeting are - Appointing Directors : The Company opens chance to shareholders to appoint director by person while providing information on nominating method, details of director background, position in other organizations, service years and meeting attendance in case of proposing previous director, which is screened by the Nominating Committee. - Director Remuneration : The Company provides details of proposed remuneration payment that align with the director remuneration policy and condition, which is screened by the Remuneration Committee. - Appointing External Auditors : The Company provides details of external auditor’s name and company, independency, selecting criteria, fee, service years for the Company (in case of proposing existing external auditors), reason in changing external auditors (in case of proposing new external auditors), consideration method, which is screened by the Audit Committee. - Allocating Profit and Dividend Payment : The Company provides details of profit allocation and reserve fund, dividend amount that align with the Company’s dividend policy, and book register date for right of receiving dividend, which is screened by the Remuneration Committee. 1.8 The Company allows shareholders to send questions related to the agenda to the Board of Directors in advance via Investor Relations Section. 1.9 The Company informs shareholders the rules in the meeting and the voting procedures. The Company also asks shareholders volunteers together with legal advisors to witness ballot count for transparency. 1.10 The Company provides enough time for the meeting, encourages equal opportunities for shareholders to express their opinions and raise any questions in the meeting where relevant directors especially Chairman of the Board of Directors, Chairman of various committees and Managing Director shall attend the meeting to respond to questions. 2. EQuITABlE TREATMENT TO SHAREHOlDERS The Company recognizes the importance of rights and equitable treatment of shareholders through the following actions. 2.1 The Company provides channel for shareholders to propose in advance additional meeting agenda and director nominee, by having clear rules, which is disclosed via the SET and the Company’s website. One or several shareholders, holding minimum share in the amount of 0.05 percent can propose meeting agenda and director nominee for 3 months, during October 15 - January 15 of each year. This proportion facilitates the shareholders more than that specified by the law, which specifies that one or several shareholders, holding minimum share in the amount of 5 percent can propose meeting agenda. 2.2 In case that the shareholders cannot attend the meeting, the Company provides the proxy document, so that the shareholders can make the proxy vote to other persons, independent director or Managing Director. The Company provides the proxy in the format that the shareholders can specify the voting direction, and also clearly indicates the evidence for proxy. 2.3 The Company conducts the shareholders’ meeting in sequence of agendas as informed in the meeting invitation letter. There would be no additional material information given in the shareholders’ meeting instantly and no additional agenda in the shareholders’ meeting. 2.4 The Company provides voting cards for every agenda to make it transparency if there is any argument in the future and in director appointing agenda, the Company opens chance to shareholders to appoint director by person. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Good

Corporate Governance

2.5 The minutes of meeting are correct, complete and can be verified by shareholders. The minutes covers the name of directors who attend or absent in the meeting, voting method, shareholders’ opinions, the director’s clarification and clear resolution, classifying into agree, disagree or abstain votes. The minutes is sent to the SET within 14 days after each meeting as well as posted, together with the web cast recording the meeting proceeding, in the Company’s website. 2.6 The Company protects internal information and has procedures to prevent the use of inside information for abusive self-dealing such as insider trading or related party transactions. The Company has prescribed about confidential information in “Staff Policies and Procedures Manual” and in “Code of Conduct” and has penalties for employees who violate such rules. Moreover, the Company violates the directors, managements and employees to trade the Company’s shares 7 days prior to the disclosure date of quarterly financial results. As for the trading of Company’s shares by the Board of Directors and the managements, the Company has notified the Board of Directors and the managements to report changes in any shareholding status to the SEC, as specified in Section 59 of Securities and Exchange Act B.E. 2535. The shareholding agenda of the Board of Directors and the managements is also included in each Board of Directors’ Meeting. In addition, for the trading of Company’s shares by the employees who are close to the Company’s information, the Company has set the procedures that they shall report changes in any shareholding status to Corporate Affairs Section within 3 working days and Corporate Affairs Section shall report to the management meeting monthly. 2.7 The Company has procedures regarding conflict of interests in its Code of Conduct for the directors, managements and employees to comply with. 2.8 The Company’s directors and managements shall disclose the interests of themselves and their related parties to the Company. Such disclosure complies with the business of the Company, related law and regulations. Also, the directors and managements have to report the changing in their interests every time when it occurs. The Company Secretary is responsible in gathering such information. The Board of Directors has established procedure to prohibit the directors or managements who may have conflicts of interests to involve in the consideration process. Before the Board of Directors’ meeting begins, Chairman shall inform that in case of the particular director who has interests in certain issues, he shall inform to the meeting and not be allowed to vote in approving such agenda. 3. ROlES OF STAKEHOlDERS The Company has written procedures in its Corporate Governance Policy and Code of Conduct to treat with each group of stakeholder i.e. shareholders, customers, trade partners, creditors, competitors, employees. social and environment, which are disclosed in the Company’s website. The Company has done through the following actions. 3.1 Shareholders : The Company is constantly responsible to shareholders, adheres to loyalty and fairness, aims to achieve business growth, as well as to create appropriate return to shareholders, discloses information to shareholders equitably, constantly and completely. 3.2 Customers : The Company is attentive to customers’ needs and responsible to obligations to customers, establishes customer satisfaction survey system. The Company concerns of the importance of customers as can be seen from the Company’s Quality Policy as follows : “Management team and all BAFS employees have a strong determination to provide quality and safety aviation fuel services including continually improve the effectiveness of the quality management system to enhance customer satisfaction. We are working to accomplish 3 main objectives. 48

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

1. Provide quality aviation fuelling service. 2. Provide on time and supreme safety service. 3. Operations in compliance with ISO. The Company provides complain channel for customers, and protects customers’ confidential information. And if there is any crucial case e.g. financial report incorrectness, deficient internal control system, the Audit Committee or the managements shall report such finding to the Board of Directors for acknowledgement so that the Company can find the solution in timely manner. 3.3 Trade partners : The Company complies with all agreements made with trade partners, treats every trading partner equally and fairly, bases on the fair return for both parties, and also not asks for, receives, and gives benefit that dishonest to trade partners. 3.4 Creditors : The Company complies with all agreements made with creditors, provides complete financial information, and also makes on time payment. 3.5 Competitors : The Company follows the good framework of competition, and does not acquire the confidential information of competitor in dishonest or inappropriate way. 3.6 Employees : The Company realizes the importance of taking care of and developing the employees and provides reasonable compensation and fringe benefits to the employee as well as supports the employees’ participation as follows: - Provide courses to develop and enhance work skills. - Establish annual employee training and development plans by adopting Competency Model as the fundamental in personnel training plans. - Establish Individual Development Plan, Career Development Plan and Succession Plan for important positions. - Provide education support programs e.g. scholarships for employees. - Support employees’ participation e.g. compliance quality system and various activity clubs. - Provide reasonable compensation and fringe benefit e.g. salary, bonus, retirement fund, life insurance, accident insurance and health insurance. - Provide safety work environment for employee’s life, health and property. The Company also provides assistance to employees’ families, such as scholarships, medical benefits, life insurance, accident insurance and health insurance. 3.7 Social and Environment : The Company realizes the importance of Corporate Social Responsibility-CSR, by providing Social Responsibility Policy, which is disclosed in the Company’s website and is attentive to social constantly, such as Soldier Moral Improvement Program (Mor-Ouam-Bam-Rung-Kwan-Ta-Harn), Fire Drill Training, National Children Day Activities, Scholarship Programs, Teachers Volunteering Project, Royal Kathin, Annual Kathin Offering Ceremonies and Buddhist Monk Scholarship Project, Mangrove Forest Field Trips, for etc. The Company has established Safety, Occupational Health and Environmental Policy and Social Responsibility and Work Force Policy and in its operation, the Company has concerned about the environmental factor by surveying and protecting the environmental impact. 3.8 The Company has mechanism for stakeholders’ participation, by providing them to send recommendation, opinion or question via Investor Relations Section, and disclosing the sufficient information to enhance the efficiency of stakeholders’ participation. 3.9 The Company provides channel for complaining and reporting about the violation in code of conduct of the directors, managements and employees, and has investigation process after acknowledging such matters. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Good

Corporate Governance

4. INFORMATION DISClOSuRES AND TRANSPARENCY The Company realizes the importance of disclosing both financial and non-financial information correctly, completely, in a timely manner, transparency via accessible, equal, and reliable channel as follows : 4.1 The Company discloses the information in accordance with the Regulations of the SEC and the SET, under the responsibility of Corporate Affairs Section. In the year 2009, the Company has no incompliance matter from the information disclosure. 4.2 The material information consists of financial and non-financial information. The financial information, particularly the reviewed/audited financial statements according to the external auditor, is essentially accurate under generally accepted accounting principles, and has been reviewed/audited by the Audit Committee/the Board of Directors before discloses to shareholders. The non-financial information that the Company constantly discloses is Management Discussion and Analysis (MD&A) on a quarterly basis and Newsletter semiannually. 4.3 To perform responsibilities in providing the financial reports that they are accurate, complete and transparency enough to protect the Company’s assets against fraud, or abnormalities, and in line with the generally accepted accounting standards and using appropriate and consistent accounting policy, and with reasonable and circumspect considering to enhance the stakeholders’ confidence to the financial reports, the Board of Directors has appointed the Audit Committee to assume key duties and responsibilities of reviewing the Company’s financial statements and operation reports to ensure its correctness and completeness. In addition, the Board of Directors provides Report of the Board of Directors’ Responsibilities for Financial Statements, signed by Chairman and Managing Director that covers important topics of Code of Best Practices for Directors of Listed Companies as prescribed by the SET together with Report of Auditor in annual report. 4.4 Investors Relations Section (Tel. 02-834-8913, e-mail: pitsapong@bafs.co.th) has been established to represent the Company in communication with investors, shareholders, stock analysts and other related organizations. In the year 2009, the activities included the Company’s performance disclosure at the SET quarterly and Company Visit by fund managers and analysts constantly. 4.5 The Company provides channel to access to the Company’s information via www.bafsthai.com in Thai and English. The information includes vision, mission, various policies e.g. Corporate Governance Policy, Risk Management Policy, Social Responsibility Policy and the implementation, Code of Conduct, shareholding structure, the Board of Directors, financial information, Annual Report (Form 56-2), Annual Registration Statement (Form 56-1), report to the SET, risk management for etc., where the information is consistently updated. 4.6 The Company has disclosed information in Annual Report such as Corporate Governance Policy, Social Responsibility Policy and the implementation, Code of Conduct, background of the directors and managements, their shareholding in the Company, duties of the Board of Directors and various committees e.g. number of meeting, number of attendance of each director, training record, and also disclosed the remuneration policy, type and detail for directors and top managements as well as the remuneration received from the Company and its subsidiaries for etc. 5. RESPONSIBIlITIES OF THE BOARD OF DIRECTORS The Board of Directors plays an important role in corporate governance for the best interest of the Company, and is accountable to shareholders and independent of the managements. 5.1 Board Structure 5.1.1 The Board of Directors considers the appropriateness of board structure, and sets the structure to consist of at least 11 directors, but not more than 15 directors. At present, the Board of Directors consists of 15 directors as follows : - Executive Director 1 person - Non-Executive Director 14 persons, comprises of 9 outside directors 9 persons and 5 independent directors, one third of the total directors. 50

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

5.1.2 The Board of Directors has specified the qualification of director for example shall not be more than 75 years old, has various knowledge and capabilities that is beneficial to the Company’s business for etc., and has specified the qualification of independent director more strictly than Regulations of the SEC regarding shareholding to enhance the Company’s independent directors to have real independency. 5.1.3 Chairman of the Board of Directors is independent director, not the same person as Managing Director, and has no relationship with the managements. As such it is better enhance the balance of power within the Board of Directors. 5.1.4 The Company has clearly separated and defined in written the power and authorities among the Board of Directors and the managements. 5.1.5 The Board of Directors is responsible for overseeing the Company’s operations to comply with laws, objectives and articles of association of the Company, as well as shareholders’ resolutions, with honesty while preserving the Company’s interests. 5.1.6 The directorship term of the Board of Directors has been definitely prescribed in articles of association of the Company and Corporate Governance Policy, which states that one third of the directors who has longest term, has to terminate its directorship. 5.1.7 Referring to the Principles of Good Corporate Governance which suggests that each director should serve not more than 5 boards of listed firms ; however, Mr. Aswin Kongsiri, the Company’s director, serves more than 5 boards of listed firms. Nevertheless, from his past performance, he has attended the Board of Directors’ meetings constantly and other committees every time, and also used his knowledge, competent, and dedicated time to perform the responsibility competently. 5.1.8 The Company has Executive Assistant of Legal and Securities to serve as Company Secretary to advise about law and regulations that the directors shall know, take care of the directors’ activities, and coordinate in informing related persons to comply with the Board of Directors’ resolutions. 5.1.9 The Company has established the system to monitor the operation of its subsidiaries, the direction for its subsidiaries, the direction to the person that the Company assigned to be the director or management and the reporting to the Board of Directors to ensure that the Company could monitor the operation of its subsidiaries efficiently. 5.2 Committees The Board of Directors has set up various committees to help the Board in studying various issues in details and screen workload to improve work efficiency of the Board. In addition, the Chairman of each committee is independent. And to ensure that the performance of every committee has real independency, the Chairman of the Board of Directors is not the chairman and member in such various committees. The Company has specified compositions and responsibilities of various committees have been clearly prescribed as follows : 5.2.1 Audit Committee The Audit Committee consists of 3 independent directors, who qualified according to the Regulations of the SEC, with a directorship term of 3 years. In 2009, the Committee held 5 meetings, with the attendance of each director as follows : Meeting Attendance / Total Meeting (times) 1. Mr. Pachara Yutidhammadamrong 1/ Flight Lieutenant Udom Krisnamapok 2. Mr. Visut Montriwat 3. Mr. Sumon Surathin

Bangkok Aviation Fuel Services Plc.

Chairman Chairman Director Director Annual Report 2009

2/2 2/2 5/5 5/5 51

Good

Corporate Governance

Remarks : 1/ Assume director since May 13, 2009. Therefore, the number of total meeting is 2 times. 2/ Expiry from term of Board of Director and Audit Committee Chairman on April 8, 2009. Therefore, the number of total meeting is 2 times.

with Mrs. Mayuree Nalinwong, Executive Assistant of Internal Audit serves as the secretary of the Committee. Mr. Visut Montriwat and Mr. Sumon Surathin are Audit Committee directors who have knowledge and experience in reviewing the Company’s financial statements, as per details in the topic of “the Board of Directors”. The Audit Committee has always reported the resolutions to the Board of Directors and had fulfilled the responsibility of the Audit Committee Charter as follows : “Reviewing the correction and sufficiency of the financial reporting, reviewing the correction, completeness and reliability of the operational information reporting, reviewing the internal audit and control system to ensure its suitability and effectiveness, considering the independency of Internal Audit, appointment, transfer, and dismissal of chief of Internal Audit, reviewing compliance with the Securities and Exchange Acts, Regulations of the SET, relevant laws, and given commitments with outside parties, reviewing the adequacy for the safeguarding of assets, reviewing risk management and internal control systems independently, considering and recommending the appointment and the remuneration of the external auditor, attending a non-management meeting with an external auditor at least once a year, reviewing the Connected Transactions to ensure that the compliance with the laws and Regulations of the SET, revising the Charter of the Audit Committee at least once a year, performing the Audit Committee’s assessment and self-assessment annually, considering approving the audit plan, budget and man-power of Internal Audit that approved from Managing Director, preparing and disclosing the Audit Committee’s report in the Company’s annual report, having the power to employ independent professional advisors, inviting the managements and concerned persons, and performing any other functions assigned by the Board of Directors.” In addition, the Audit Committee gives opinion in performing its duties as specified in the Audit Committee Charter for example opinion in reviewing the financial statements, risk management, and internal control, for etc. The Audit Committee has self assessment and the overall assessment to evaluate the effectiveness of its performance annually, which is an important mechanism in good corporate governance. The Audit Committee has considered the assessment result together and seeks for the improvement. The assessment result in the year 2009 reveals that the Audit Committee performs its duties completely as specified in the Audit Committee Charter and has “Good-to-Excellent” effectiveness in performing the roles of the Audit Committee. 5.2.2 Remuneration Committee The Remuneration Committee consists of at least 3 but not more than 4 directors, with a directorship term of 2 years, where the chairman is independent director and Managing Director is the director ex officio. In 2009, the Committee held 3 meetings, with the attendance of each director as follows : Meeting Attendance / Total Meeting (times) 1. 2. 3. 4.

Mr. Visut Montriwat Mr. Sumon Surathin Mr. Nattachak Pattamasingh Na Ayutthaya1/ M.R. Supadis Diskul

Chairman Director Director Director

3/3 3/3 1/1 3/3

Remarks : 1/ Assume Remuneration Committee director until April 8, 2009. Therefore, the number of total meeting is 1 time.

with Mr. Chattaya Bhandhaya, Senior Finance and Accounting Manager serves as the secretary of the Committee. 52

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

The Remuneration Committee has fulfilled the responsibility that was approved by the Board of Directors as follows : “Considering remuneration for the Board of Directors, the Audit Committee, the Nominating Committee, the Fuelling Operation Committee, Managing Director, Committees and Other Sub-Committees for further proposal to the Board of Directors and/or the shareholders for consideration” In addition, the Remuneration Committee considers the interim and annual dividend payment for shareholders, proposing to the Board of Directors or the shareholder’s meeting. Furthermore, the Remuneration Committee gives opinion in performing its duties as specified in the prescribed responsibility for example opinion in directors’ remuneration and dividend paid to shareholders, for etc. The Remuneration Committee has established its assessment to evaluate the effectiveness of its performance since 2009. 5.2.3 Nominating Committee The Nominating Committee consists of at least 3 directors, with a directorship term of 2 years, where the chairman is independent director. In 2009, the Committee held 2 meetings, with the attendance of each director as follows : Meeting Attendance / Total Meeting (times) 1. 2. 3. 4.

Mr. Aswin Kongsiri ACM Narongsak Sangapong Mr. Navee Lertphanichkul M.R. Supadis Diskul

Chairman Director Director Director

2/2 1/2 2/2 2/2

Remarks : 1/ Resigned from director since December 1, 2009

with Dr. Pugdee Manaves, Deputy Managing Director in Administration serves as the secretary of the Committee. The Nominating Committee has fulfilled the responsibility that was approved by the Board of Directors as follows : “Reviewing the appropriateness in respect of number and composition of the Board of Directors, preparing the specifications and conditions for Managing Director’s contract, and also nominating when there is a vacancy in the position of director and Managing Director for further proposal to the Board of Directors and/or the shareholders for consideration” In addition, the Nominating Committee gives opinion in performing its duties as specified in the prescribed responsibility for example opinion in nominating directors. The Nominating Committee is in the process of establishing its assessment to evaluate the effectiveness of its performance. 5.2.4 Risk Management Committee The Risk Management Committee consists of 4 directors, with a directorship term of 3 years, where the chairman is independent director. In 2009, the Committee held 6 meetings, with the attendance of each director as follows : Meeting Attendance / Total Meeting (times) 1. 2. 3. 4.

Mr. Aswin Kongsiri Mr. Vinai Chamlongrasdr M.R. Supadis Diskul Mr. Ditsapong Prithaveepong Bangkok Aviation Fuel Services Plc.

Chairman Director Director Director and Secretary Annual Report 2009

6/6 6/6 6/6 6/6 53

Good

Corporate Governance

The Risk Management Committee has constantly reported the resolutions to the Board of Directors and had fulfilled the responsibility of the Risk Management Committee Charter as follows : “Supporting the Board of Directors in setting Risk Management Policy and acceptable risk level, establishing risk management profile to align with the Risk Management Policy, following the compliance, reviewing the effectiveness of risk management profile, presenting the Company’s overall risks, measures and results to the Board of Directors as well as considering and reviewing Risk Management Report and performing to ensure that the Company’s risk management is adequate and appropriate, can be managed in acceptable level and is performed continually.” In addition, the Risk Management Committee gives opinion in performing its duties as specified in the Risk Management Committee Charter for example opinion in risk management. The Risk Management Committee has established its assessment to evaluate the effectiveness of its performance since 2009. 5.3 Roles, Duties and Responsibilities of the Board of Directors 5.3.1 The Board of Directors considers and approves the important matter regarding the Company’s operation e.g. vision, mission, strategies, financial goal, budget, Committee Charter for etc., supervises the managements’ performance to comply with the specified policy and plans, efficiently and effectively, and also provides systems to monitor, improve and evaluate operation results comparing with the work plans and approved budget. This is to achieve maximum values to the Company. 5.3.2 The Company clearly segregates the structures, roles, duties and responsibilities of the Board of directors and the managements. Power of attorney is issued to specify the scope and level of authority for the managements engaging in certain business transactions on behalf of the Company. Moreover, the Company regularly communicates the roles, duties and responsibilities to such related persons. 5.3.3 The Company has provided “Code of Conduct” for the Board of Directors, the managements and the employees of the Company and its subsidiaries to use as a guideline in performing their duties to accomplish the mission of the Company and its subsidiaries. Code of Conduct covers ethics for business conduct, practices towards various stakeholders such as shareholders, employees, customers, trade partners, creditors, competitors, social and environment, ethics for the Directors and for the employees such as conflict of interests, confidential information, provision, inside information for etc., monitoring procedures and penalties. 5.3.4 The Company has established, distributed, and communicated its “Code of Conduct” to the directors, managements and employees, and has frequently monitored to ensure the compliance with the conduct e.g. conducting on line self assessment annually. Moreover, the Company has continually arranged training course about good corporate governance annually, and has also educated the managements and employees via monthly internal journal more than 6 years, since the year 2003. 5.3.5 The Company has clear procedures to oversee transactions that may have conflict of interests and set up the regulation regarding connected transactions that in line with the Regulations of the SEC. In case that the transaction must be approved by the Board of Directors and/or the shareholder’s meeting, it shall be screened by the Audit Committee. The Audit Committee would give opinion in entering such transaction. If the Board of Directors has different opinion with the Audit Committee, the Company shall also disclose the different opinion. In addition, in case that particular director has interests in certain issues, he shall not be allowed to vote in approving such connected transaction agenda. 5.3.6 The information, necessities and rationale about transactions that may have conflict of interests in the year 2009 are disclosed by complying with Regulations of the SEC as per details in the topic of “Connected Transactions”. 5.3.7 The Company has internal control system and system to monitor the operation of its subsidiaries, appropriately and effectively, regarding operation, financial reporting, and compliance. In addition, the Company has internal control system and risk management regarding risk management framework, based on the International Standard of COSO-ERM (The Committee of Sponsoring Organizations of the Treadway Commission-Enterprise Risk Management), which relates to the operations and management procedures as per details in the topic of “Summary of the Opinion concerning Adequacy and Appropriateness of the Internal Control System for the Year 2009”. 54

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

5.3.8 The Board of Directors has specified the risk management policy by emphasizing the usage of risk management throughout the Company, to enhance the Company to achieve the strategic objectives. Risk Management and Strategic Plan Section has responsibility to monitor the risk management process and evaluate the achievement of strategic annually, set up early warning indicators to prompt the Company in finding measures to amend and improve its performance before the crisis arises, as well as report to Risk Management Committee, which has been reviewed by Audit Committee and reported to the Board of Directors quarterly. 5.3.9 To evaluate the efficiency of the Company’s internal control system, the Company has Internal Audit division as a separate unit, which is responsible to audit, evaluate, recommend and support the effectiveness improvement in risk management, control and corporate governance in accordance with International Standard for the Professional Process of Internal Auditing, reports the audit results to the Audit Committee and administration matter to Managing Director. The Board of Directors and the Audit Committee has reviewed the Assessment Form of Adequacy of Internal Control System annually. 5.3.10 For the assessment of risk management effectiveness, Internal Audit Division has reviewed the indicators or risk factors that may affect the objective and risk management process, to ensure that the risk indication and assessment are correct and appropriate, the risk management is in a systematic manner, the risk reporting to related persons is complete and in timely manner, and also continually monitored the risk review every quarter. 5.4 The Board of Directors’ Meetings 5.4.1 The Company has set the Board of Directors’ meeting schedule in advance and informs each director for acknowledgement so that the director can allocate the time and attend the meetings. The Board of Directors shall held at least 5 regular meetings in a year, which is suitable with the responsibility of the directors and the Company’s business nature, and may held a special meeting if necessary. The Chairman of the Board of Directors and Managing Director shall consider the agenda together and each director can independently propose matter for agenda. 5.4.2 The Company has clear agendas for the meeting and send meeting invitation letter together with meeting document to the directors at least 7 days prior to the meeting date. As such the directors would have time to study the document before attending the meeting. In 2009, the Board of Directors held 6 regular meetings. The attendance of each director is as follows : Meeting Attendance / Total Meeting (times)

Names 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Mr. Palakorn Suwanrath M.R. Supadis Diskul Flying Officer Norahuch Ployyai 1/ Mr. Serirat Prasutanond Mr. Ath Hemvijitraphan 2/ Mr. Tanachai Vienravee Mr. Navee Lertphanichkul Mr. Vinai Chamlongrasdr Mr. Tevin Vongvanich 1/ Mr. Aswin Kongsiri Mr. Pachara Yutidhammadamrong Mr. Visut Montriwat Mr. Sumon Surathin

Bangkok Aviation Fuel Services Plc.

6/6 6/6 3/4 6/6 4/4 6/6 6/6 6/6 4/4 5/6 4/4 6/6 6/6 Annual Report 2009

Good

Corporate Governance Meeting Attendance / Total Meeting (times)

Names * * * * * *

Mr. Thepparit Vesurai 3/ Mr. Chanchai Singtoroj 4/ Mr. Nattachak Pattamasingh Na Ayutthaya Flight Lieutenant Udom Krisnamapok 4/ Mr. Tummasak Chutiwong 5/ ACM Narongsak Sangapong 6/

0/0 2/2 2/2 2/2 4/4 5/5

Remarks : 1/ Assume director since April 8, 2009. Therefore, the number of total meeting is 4 times. 2/ Assume director since March 6, 2009. Therefore, the number of total meeting is 4 times. 3/ Resigned from director since February 2, 2009. Therefore, there is no number of meetings. 4/ Expiry of term since April 8, 2009. Therefore, the number of total meeting is 2 times. 5/ Resigned from director since November 4, 2009. Therefore, the number of total meeting is 4 times. 6/ Resigned from director since December 1,2009. Therefore, the number of total meeting is 5 times.

5.4.3 In the Board of Directors’ meetings, the Chairman allocates sufficient time for the managements to present adequate issues and for the directors to broadly discuss important matters with care. The Chairman promotes the directors to have prudent consideration. In addition, the Board of Directors supports Managing Director to invite top managements to attend the meeting to provide explanation and additional information as they involves in the proposed agenda directly. The directors can also request for additional information from the Company Secretary. 5.4.4 The Company Secretary has prepared the minutes of meeting, correctly and completely, which covers details such as name of directors who attended or absent in the meeting, important content, discussion issues, opinions of each director and resolutions. The minutes can be verified by shareholders according to the prescribed law. The minutes are kept safely and carefully. 5.4.5 The non-executive directors have opportunity to meet the managements below Managing Director 5-6 times per year. 5.5 The Board of Directors’ Self Assessment Even though the Board of Directors has completely performed its responsibility, it realizes in continually improving the effectiveness of its performance. Therefore, it has approved Form of the director’s Self Assessment and the Board of Directors’ Assessment. The directors would have done such assessments annually. The Board of Directors has considered the assessment result together and seeks for the improvement. The overall assessment result in the year 2009 reveals “Good-to-Excellent” effectiveness in performing the roles of director and the Board of Directors. Furthermore, the Board of Directors has assessed the efficiency of the meeting every time and the result would be reported in the next meeting. The overall assessment result reveals “Good-to-Best”. 5.6 Remuneration Remuneration for the Board of Directors : the Remuneration Committee has responsibility to consider remuneration for the Board of Directors. The remuneration is clearly defined in a transparent manner and is approved by the shareholders. The remuneration is comparable to the industry and is appealing enough to attract and retain quality directors. The directors who are assigned additional responsibilities are paid appropriately more. 56

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Remuneration for Managing Director : the remuneration of Managing Directors is screened by Remuneration Committee and approved by the Board of Directors, in accordance with the employment contract and uses Key Performance Indicators (KPIs) that covers the performances of the Company as well as the Company’s strategies, comprising of aspects in finance, customers and stakeholders, internal process, learning and development. Remuneration for the Managements : the remuneration is determined in accordance with the principles and policy set by the Board of Directors, which corresponds to the performances of the Company as well as that of each management by using Key Performance Indicators (KPIs) The Company also discloses the remuneration of the Board of Directors and the managements as per details in the topic of “Shareholder and Management Structure - Remuneration for the Board of Directors and Managements.” 5.7 Development for the Directors and Managements The Company supports and facilitates training and educating the Boards of Directors, the managements and all employees thus continually improving the performance. Furthermore, the Board of Directors has establish “CG Policy” and “Code of Conduct” to distribute to the directors, which the policy has been frequently updated. This is to acknowledge the directors about the important practices of each committee as well as important policies and information of the Company, and also to enhance the directors to perform the role of corporate governance more effectively. For the new director, the Company arranges orientation for new director and support the directors to attend the director courses arranged by Thai Institute of Directors (IOD) e.g. DCP, DAP, The Role of Chairman Program, Role of the Compensation Committee, Audit Committee Program, Finance for Non-Finance Director, Monitoring the System of Internal Control and Risk Management and Monitoring the Internal Audit Function etc. The Company also enhances knowledge of the managements and related persons in Corporate Governance of the Company e.g. Company Secretary and Internal Audit for etc. The Company has Succession Plan for important positions, by specifying in the Company’s strategic plan to be the benefit for the management’s work succession and development, and to work in place of Managing Director and the managements when they can not perform their duties. In personnel development, the Company has Competency Model as the fundamental in personnel training plans e.g. Competency Assessment, Individual Development Plan, Career Development Plan. Also, Human Resource Development Section has improved and developed plans continually to align with the changing organization chart. From the commitment to Good Corporate Governance, in the year 2009, the Company received Excellent Corporate Governance Scoring from Thai Institute of Directors (IOD). Such rating was better than that of previous year that the Company received Very Good Corporate Governance Rating. Moreover, the Company received honorable awards such as National Award of the Outstanding for Enterprise of Safety Operations, Occupational Health and Working Environment in 2009 for 3 areas i.e. Don Mueng Airport, Suvarnabhumi Depot and Into-plane areas.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Management Discussion and Analysis for the One Year Period Operating Results Ended December 31, 2009 MANAGEMENT DISCUSSION AND ANALYSIS FOR THE OPERATING RESULTS IN 2009 1. Report and Analysis of the Operating Results Although total revenues of BAFS and subsidiaries was affected from global recession, political turmoil in the country and the Pandemic (H1N1) 2009 flu, but from the exertion of Cost Reduction Program of management team and every level of employee such as volunteer cutting salary 5% - 20% of management, reduction in cost of living and fringe benefit of staffs, lessen overtime rate etc. brought net profit in 2009 increased by Baht 25.3 million to Baht 463.0 or 5.8% from last year at Baht 437.7 million or 2009’s earning per share of Baht 0.91 increased from Baht 0.86 per share. Despite volume of fuel serviced was dropped by 4.6% (y-o-y) to 4,116.6 million litres from 4,312.8 million litres. For Fourth Quarter of 2009, net profit of BAFS and its subsidiaries amounted to Baht 97.0 million, a increase of Baht 53.7 million or 124.3% from the same quarter’s of last year net profit of Baht 43.2 million or Baht 0.19 per share from Baht 0.09 per share. However, reason for sharply rose in Fourth Quarter of 2009’s net profit was Thailand was face up with political tension in the country, leading to 10 days operating suspension of Suvarnabhumi and Don Mueang Airport in Nov. 25 - Dec. 4,2008. Which the main reasons for operation changes are as follows : 1.1 Revenue For 2009, total revenues of BAFS and its subsidiaries amounted to Baht 2,035.0 million, a decrease of Baht 92.0 million or 4.3% when compared with last year. And for the fourth quarter of 2009, total revenues was amounted to Baht 544.4 million, a increase of Baht 56.2 million or 11.5% from the same quarter’s of last year. 1.1.1 Services Income Services income of BAFS and its subsidiaries amounted to Baht 1,996.8 million, an decrease of Baht 62.0 million or 3.0% when compared with that of last year consistency with reduction in volume of fuel serviced by 4.6% from last year. And for the fourth quarter of 2009, services income was amounted to Baht 532.4 million, a increase of Baht 74.8 million or 16.0% from the same quarter’s of last year. 1.1.2 Other Income 1.1.2.1 Rental Income The rental income in 2009 was Baht 16.7 million, decreasing by Baht 2.6 million or 13.4% compared to that of the last year. And for the fourth quarter of 2009, rental income was amounted to Baht 4.1 million, a decrease of Baht 0.6 million or 12.0% from the same quarter’s of last year 1.1.2.2 Other Income Other income was Baht 21.4 million, decreasing by Baht 27.4 million or 56.1% compared to that of the last year. Major items which decreased other income are 1) in 2008, BAFS and its subsidiaries has an extraordinary item gain on disposable assets of Baht 16.3 million which 90% came from gain on sold the land in Lad Krabang of Baht 14.6 million 2) decreasing in interest income from short term investment in T-Bill of Baht 8.7 million 3) decreasing guarantee fee of its subsidiaries’ liabilities of Baht 2.0 million as outstanding liabilities was decreasing 58

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

by debts payment schedule. Besides, the company has decreasing in unrealized FX loss by Baht 0.6 million when compared to unrealized FX gain of last year of Baht 2.6 million as result of Thai Baht depreciated against US$ from 33.36 Bt./US$ in 2008 to 34.34 Bt./US$. And for the fourth quarter of 2009, Other income was amounted to Baht 8.0 million, a decrease of Baht 18.0 million or 69.4% from the same quarter’s of last year 1.2 Expenses 1.2.1 Cost of Services In 2009, Cost of services was Baht 895.5 million, decreased by Baht 26.9 million or 2.9% compared to that of the last year. Major items which decreased cost of services are 1) decreasing in salaries and other employee’s expense of Baht 17.6 million 2) decreasing in insurance premium by Baht 2.3 million 3) decreasing in Air port Concession Fee by Baht 5.3 million that was in line with dropping of volume. But depreciation and amortization expense was increased by Baht 7.2 million. However, For the fourth quarter of 2009, Cost of services was amounted to Baht 253.4 million, a increase of Baht 10.2 million or 4.2% from the same quarter’s of last year due to volume of fuel serviced was increased by 16.0%. 1.2.2 Administrative Expenses Administrative expenses for 2009, was Baht 322.4 million, decreasing by Baht 23.0 million or 6.6% when compared to that of the last year which mainly came from the success in Cost Reduction Program of company. Major items which decreased administrative expenses are 1) decreasing in salaries and other employee’s expense of Baht 2.3 million, however, depreciation and amortization expense was increased by Baht 0.7 million. For the fourth quarter of 2009, administrative expenses was amounted to Baht 113.8 million, a decrease of Baht 5.9 million or 4.9% from the same quarter’s of last year 1.2.3 Finance Costs Finance Costs for 2009 was Baht 107.0 million which decreasing by Baht 56.7 million or 34.6% when compared to that of the last year as decreasing in market rate. Mainly comprised of interest payment for long term loan and interest payment for financial lease of BAFS at amounted of Baht 76.4 million. Besides that of these items was TARCO’s and JP-One’s Finance Costs. And for the fourth quarter of 2009, Finance Costs was amounted to Baht 24.0 million, a decrease of Baht 16.2 million or 40.2% from the same quarter’s of last year. 1.3 Operating Results For 2009, Net profit of BAFS and its subsidiaries amounted to Baht 463.0 million, a increase of Baht 25.3 million or 5.8% which is equivalent an earning per share of Baht 0.91 when compared with last year. And for the fourth quarter of 2009, Net profit was amounted to Baht 97.0 million, a increase of Baht 53.7 million or 124.3% from the same quarter’s of last year, which is equivalent an earning per share of Baht 0.19, as a result of various factors as discussed above. The Board of Directors’ Meeting No.1/2010 held on February 18, 2010 resolved to pay dividend for 2009’s performance at the rate of Baht 0.43 per share which accounted to be the total amount of Baht 219.3 million or accounted for payout ratio of 59% of net profit before reserve of the company only. Interim dividend was paid at Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Management Discussion and Analysis for the One Year Period Operating Results Ended December 31, 2009 the rate of Baht 0.13 per share and the rest of dividend would be paid at Baht 0.30 per share. The Company fixed the share registration book closing date for the right to receive dividend on April 28, 2010 and fixed the dividend payment date to be May 14, 2010. 2. Report and Analysis of Financial Status

2.2.3 Other current liabilities of Baht 128.3 million which comprised of major items such as accrued corporate income tax of Baht 55.4 million and others of current liabilities of Baht 72.9 million. 2.2.4 Long term loan from bank of Baht 2,447.5 million decreased by Baht 654.9 million or 21.1% when compared December 31, 2008 which comprised of : - The first portion of Baht 355.6 million was long term loan from KBANK which was semi-annual, principle

2.1 Assets As at December 31, 2009 the Company’s group had total assets in the amount of Baht 6,843.6 million, decreased by Baht 217.1 million or 3.1% from December 31, 2008. The important details are as follows : 2.1.1 Cash, cash equivalent and short term investment of the Company’s group is Baht 768.8 million. The details of important sources and uses of cash and short term investment are as follows : - The Company’s group had cash flow from operations of Baht 948.7 million from consolidated net profit before minority interest of 2009 of Baht 490.4 million adjusted with cash inflow items such as depreciation and amortization of Baht 365.0 million, amortization of concession of subsidiary of Baht 28.1 million, decreased in allowance for retirement benefit of Baht 9.2 million. And increased in other current liabilities of Baht 4.7 million. - Cash outflow items comprised of reversal allowance for bad debts of Baht 17.7 million and increased in other current asset by Baht 50.7 million. - Cash flow used in investment was Baht 2.0 million which was decreased in short term investments and loan to related company by Baht 17.7 million, interest received of Baht 11.7 million, purchased in other asset and equipment at amount of Baht 23.7 million.

repayment : Baht 50.8 million/period and will be due in 2014. - The second portion of Baht 1,340.0 million was long term loan from BBL which was quarterly, principle repayment : Baht 50.0 million/period and will be due in 2014. - The third portion of Baht 220.0 million was long term loan from NFS which was quarterly, principle repayment : Baht 6.3 million/period and the rest principle will be paid in last period which will be due in 2015. That first principle payment will be on March, 2011. - The forth portion was TARCO’s loan of Baht 483.9 million from BBL which comprised of USD loan that TARCO already swap to Baht 108.9 million and THB baht loan of 375.0 million which was quarterly principle repayment and will be due in 2012. - The remaining portion was JP-One loan at amount of Baht 48.0 million from BBL which was monthly principle repayment and will be due in 2012. 2.3. Shareholders’s Equity

- Cash flow used in financing was Baht 848.2 million which was long term loan principle payment and financial lease at the amount of Baht 530.6 million, interest payment was of Baht 109.0 million and dividend payment for 2H/2008 and 1H/2009 of the company at the amount of Baht 193.8 million respectively.

As at December 31, 2009, shareholders’ equity of the Company’s group was Baht 3,272.6 million, increasing from December 31, 2008 by Baht 281.7 million or 9.4%.

2.1.2 Property, leasehold improvement and equipment at December 31, 2009 was Baht 5,065.8 million decreased by Baht 335.6 million or 6.2% from December 31, 2008.

The Company’s group has contingent liability from providing a bank guarantee to TARCO for outstanding amount from total long term loan of Baht 753.3 million. (including portion to be paid in one year)

2.1.3 Concession of subsidiary was incurred from the acquisition of TARCO’s shares at the price higher than its book value up to present this concession was Baht 684.5 million. 2.2 liabilities

3. Major factors that may affect operating performance or financial status

Moreover, the Company has contingent liability from providing a bank guarantee to JP-One for a proportion of 50.0% of outstanding amount from total long term loan since established which up to present the amount is Baht 36.0 million (including portion to be paid in one year)

As at December 31, 2009, the Company’s group had total liabilities of Baht 3,570.9 million, decreased by Baht 498.8 million or 12.3% compared from December 31, 2008 and resulted in debt to equity ratio improved to 1.09 : 1 time from 1.36 : 1 time. Liabilities comprised of major items as follows : 2.2.1 Account payable of Baht 62.1 million which comprised of account payable - related company’s group of Baht 41.1 million and others account payable of Baht 21.0 million. 2.2.2 Portion of long term loan which to be paid of Baht 655.0 million which are comprised of long term loan which to be paid for BAFS of Baht 361.6 million, TARCO’s long term loan which to be paid of Baht 269.4 million and JP-One’s long term loan which to be paid of Baht 24.0 million. Besides that the financial lease which to be paid in one year was Baht 12.6 million which was belonging to BAFS Baht 9.8 million, TARCO’s Baht 2.0 million and JP-One’s Baht 0.8 million 60

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Financial Statement Report

Report of the Board of Director Responsibilities for 2009 Financial Statements Report of the Board of Director Responsibilities for 2009 Financial Statements

AUDITOR OF REPORT

The Board of Directors is aware of the duties and responsibilities in ensuring that the Company’s financial reports are accurate, complete and transparent enough to protect the Company’s assets against fraud, and abnormalities, in line with the generally accepted accounting principles, as well as using appropriate and consistent accounting policy. In addition, the Board of Directors considers the reasonability and prudence in preparing the Company’s financial reports. This is for the benefit of the shareholders and general investors who are entitled to acknowledge the financial and operation information that is complete, accurate, on time and reasonable. To accomplish the above task, the Board of Directors has appointed the Audit Committee, which consists of qualified independent directors as prescribed by the Securities and Exchange Commission and the Stock Exchange of Thailand, to assume key duties and responsibilities of reviewing the Company’s financial statements and operation reports to ensure its correctness and adequacy, the internal control and audit system, and the risk management to ensure its suitability and efficiency, the compliance with the laws, regulations, and commitment, the compliance with the connected transaction regulation, the alignment with Good Corporate Governance Principles to ensure its adequacy, transparency, and reliability; considering and proposing the appointment and the remuneration of the Company’s external auditor. The Board of Directors agreed with the opinions of the Audit Committee that the consolidated and separate financial statements ended 31 December 2009 and 2008, and the operation information and cash flow in the same period of the Company and Subsidiaries are accurate, in line with the generally accepted accounting principles, disclosing correct and complete connected or conflict of interest transactions, and having good internal control.

(Mr. Palakorn Suwanrath) Chairman

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

(M.R. Supadis Diskul) Managing Director

To The Shareholders and Board of Directors of Bangkok Aviation Fuel Services Public Company Limited I have audited the consolidated balance sheet of Bangkok Aviation Fuel Services Public Company Limited and subsidiaries as at December 31, 2009, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the year then ended and the balance sheet of Bangkok Aviation Fuel Services Public Company Limited as at December 31, 2009, the related statements of income, changes in shareholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit. The consolidated financial statements and the separate financial statements for the year ended December 31, 2008 of Bangkok Aviation Fuel Services Public Company Limited, as presented herein for comparative purpose, were audited by another auditor who expressed an unqualified opinion on those financial statements in her report dated February 18, 2009. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bangkok Aviation Fuel Services Public Company Limited and subsidiaries as at December 31, 2009, the consolidated results of their operations, the consolidated changes in their shareholders’ equity and their consolidated cash flows for the year then ended and the financial position of Bangkok Aviation Fuel Services Public Company Limited as at December 31, 2009, the results of its operations, the changes in its shareholders’ equity and its cash flows for the year then ended in conformity with generally accepted accounting principles.

(Mr. Pichai Dachanapirom) Certified Public Accountant Registration No. 2421

Dharmniti Auditing Company Limited Bangkok, Thailand February 18, 2010 2010/089/9541 Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Balance Sheets

BALANCE ShEETS

BALANCE ShEETS (CONT.)

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008 In Baht

In Baht

Consolidated Financial Statement Separate Financial Statement

Consolidated Financial Statement Separate Financial Statement ASSETS

CURRENT ASSETS Cash and cash equivalents Short-term investments Trade accounts receivable - net Related companies Others Amounts due from and advance to related companies Inventory of spare parts Other current assets Prepaid insurance Input tax refundable Others TOTAL CURRENT ASSETS NON-CURRENT ASSETS Restricted fixed deposits with finance institutions Investments in subsidiary companies 2, Other investments in related company - net Loan to and long-term receivable from related company - net Property, leasehold improvement and equipment - net Right of use of land leased by a subsidiary - net Consession of a subsidiary - net Computer softwares - net Other non-current assets Others TOTAL NON-CURRENT ASSETS TOTAL ASSETS

2008 (Restated)

2009

Notes

5 6.1 7 4 4

2009

676,264,250 92,539,705

573,796,489 91,000,000

413,988,494 91,000,000

297,310,146 91,000,000

199,122,424 4,329,436 329,795 12,787,054

151,078,662 1,780,419 392,547 13,918,147

184,921,823 4,329,436 3,929,655 9,482,841

144,028,474 1,780,419 4,240,726 10,347,684

21,471,021 7,016,838 7,139,782 1,021,000,305

20,763,243 6,032,988 10,759,346 869,521,841

14,879,839 5,756,368 5,529,949 733,818,405

13,962,262 5,015,321 9,876,792 577,561,824

6.2 3, 8 3, 9

5,588,827 -

5,462,258 -

1,836,000,000 -

4 10 2.3 2.4 11

5,065,769,983 41,224,803 684,543,068 16,563,825

5,401,412,109 43,686,288 710,143,296 20,583,273

2,871,382,779 14,525,918

3,129,210,117 18,694,628

8,870,878 5,822,561,384 6,843,561,689

9,824,988 6,191,112,212 7,060,634,053

8,666,378 4,730,575,075 5,464,393,480

9,716,489 4,993,621,234 5,571,183,058

Annual Report 2009

LIABILITIES AND SHAREHOLDERS’ EQUITY

Notes

CURRENT LIABILITIES Trade accounts payable Related Companies Others Current portion of liabilities under finance lease agreement Current portion of long-term loans from banks Other current liabilities Corporate income tax payable Accounts payable - other Others TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Liabilities under finance lease agreementsnet off current portion Long-term loans from banks - net Reserve for employee’s benefit Other non-current liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES

2009

2008 (Restated)

2009

2008 (Restated)

41,105,665 21,008,422

32,118,409 17,624,961

78,750,873 13,720,215

59,151,620 12,600,641

12 13

12,560,470 655,035,462

11,897,787 519,995,942

9,817,590 361,587,302

8,898,890 301,587,302

55,408,514 7,227,134 65,635,705 857,981,372

35,064,342 17,285,593 64,833,908 698,820,942

6,591,376 5,134,552 57,748,658 533,350,566

15,991,803 58,475,523 456,705,779

6,724,534 2,447,451,874 253,634,038 5,158,000 2,712,968,446 3,570,949,818

18,574,317 3,102,368,776 244,391,160 5,601,500 3,370,935,753 4,069,756,695

3,671,144 1,915,555,554 247,950,272 302,875 2,167,479,845 2,700,830,411

12,778,048 2,277,142,856 239,909,953 741,746 2,530,572,603 2,987,278,382

12 13 14

Notes to financial statements form an integral part of these statements.

Notes to financial statements form an integral part of these statements. 64

2008 (Restated)

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Balance Sheets

Statements of Income

BALANCE ShEETS (CONT.)

STATEMENTS OF INCOME

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008 In Baht

In Baht

Consolidated Financial Statement Separate Financial Statement

Consolidated Financial Statement Separate Financial Statement LIABILITIES AND SHAREHOLDERS’ EQUITY (CONT.)

Notes

SHAREHOLDERS’ EQUITY Share capital - Par value Baht 1 each Authorized share capital ordinary share 509,998,044 shares Issued and fully paid ordinary share 509,997,325 shares Share premium Retained earnings Appropriated - legal reserve Appropriated - other reserve Unappropriated TOTAL EQUITY ATTRIBUTABLE TO COMPANY’S SHAREHOLDERS MINORITY INTEREST - EQUITY ATTRIBUTABLE TO MINORITY SHAREHOLDERS OF SUBSIDIARIES TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

18 27

2008 (Restated)

2009

509,998,044

509,997,325 434,975,000

50,999,804 807,908,477 1,321,328,907

76,392,502 773,294,182 1,061,302,622

50,999,804 807,908,477 959,682,463

50,999,804 736,671,178 851,261,369

3,125,209,513

2,855,961,631

2,763,563,069

2,583,904,676

147,402,358 3,272,611,871 6,843,561,689

134,915,727 2,990,877,358 7,060,634,053

2,763,563,069 5,464,393,480

2,583,904,676 5,571,183,058

Notes to financial statements form an integral part of these statements. 66

Annual Report 2009

2008 (Restated)

Notes REVENUES Service income Other income Rental income Dividend receive from subsidiaries Other TOTAL REVENUES EXPENSES Cost of services 15 Administrative expenses 15 Management benefit expenses 19 Amortization of concession of subsidiaries TOTAL EXPENSES PROFIT (LOSS) BEFORE FINANCE COST AND INCOME TAX EXPENSES FINANCE COSTS PROFIT (LOSS) BEFORE INCOME TAX EXPENSES CORPORATE INCOME TAX EXPENSES 16 NET PROFIT PROFIT (LOSS) ATTRIBUTABLE TO Equity holders of the parent Minority interest BASIC EARNINGS PER SHARE Net profit (Baht per share) Weighted average number of ordinary shares (Shares)

2009

2008 (Restated)

2009

2008 (Restated)

1,996,842,988

2,058,898,397

1,343,811,274

1,404,334,086

16,689,694 21,443,659 2,034,976,341

19,277,243 48,831,527 2,127,007,167

32,885,958 133,723,659 53,964,700 1,564,385,591

32,381,994 134,967,154 71,043,673 1,642,726,907

895,498,984 249,067,372 73,346,466 28,061,713 1,245,974,535

922,403,493 271,164,373 74,211,343 25,762,078 1,293,541,287

745,955,511 219,737,409 70,324,547 1,036,017,467

779,112,708 240,813,257 72,085,737 1,092,011,702

789,001,806 107,015,475 681,986,331 191,630,444 490,355,887

833,465,880 163,682,971 669,782,909 203,330,834 466,452,075

528,368,124 76,374,742 451,993,382 78,536,955 373,456,427

550,715,205 108,384,766 442,330,439 86,143,945 356,186,494

463,045,916 27,309,971

437,728,114 28,723,961

373,456,427 -

356,186,494 -

0.91 509,997,325

0.86 509,997,325

0.73 509,997,325

0.70 509,997,325

Notes to financial statements form an integral part of these statements. Bangkok Aviation Fuel Services Plc.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

68 Annual Report 2009 Bangkok Aviation Fuel Services Plc. Bangkok Aviation Fuel Services Plc. Annual Report 2009 69

17 17 8

17, 27 27

17, 27 17 8, 27

509,997,325 509,997,325 509,997,325 509,997,325

434,975,000 434,975,000 434,975,000 434,975,000

Share premium

Notes to financial statements form an integral part of these statements.

Balance as at January 1, 2008 Dividend payment Reversal of legal reserve and other reserve in subsidiary account Net profit for the year Interim dividend payment Balance as at December 31, 2008 Dividend payment Reversal of legal reserve and other reserve in subsidiary account Net profit for the year Interim dividend payment Balance as at December 31, 2009

17 17

Notes

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

(In Baht)

63,190,531 63,190,531 171,880 6,332,987 6,697,104 76,392,502 (25,392,698) 50,999,804

509,997,325 509,997,325 509,997,325

Issued and paid-up share capital

434,975,000 434,975,000 434,975,000

Share premium

677,226,109 677,226,109 83,806,524 12,261,549 773,294,182 71,237,299 (36,623,004) 807,908,477

2,645,525,128 12,402,117 2,657,927,245 (163,194,504) 437,728,114 (76,499,224) 2,855,961,631 (127,498,707) 463,045,916 (66,299,327) 3,125,209,513

Total (Restated)

394,055,589 (12,402,117) 381,653,472 (10,820,175) (257,051,860) (7,589,671) 28,723,961 134,915,727 (14,823,340) 27,309,971 147,402,358

Minority interest (Restated)

50,999,804 50,999,804 50,999,804

652,864,654 83,806,524 736,671,178 71,237,299 807,908,477

818,575,127 (163,194,504) (83,806,524) 356,186,494 (76,499,224) 851,261,369 (127,498,707) (71,237,299) 373,456,427 (66,299,327) 959,682,463

Separate Financial Statement Retained earnings Appropriated Unappropriated Legal reserve Other reserve

(In Baht)

960,136,163 12,402,117 972,538,280 (163,194,504) (83,806,524) (171,880) (18,594,536) 437,728,114 (76,499,224) (6,697,104) 1,061,302,622 (127,498,707) (71,237,299) 62,015,702 463,045,916 (66,299,327) 1,321,328,907

Shareholder’s equity of the parent company Retained earnings Appropriated Unappropriated Legal reserve Other reserve (Restated)

Consolidated Financial Statement

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (CON’T.)

Notes to financial statements form an integral part of these statements.

Reversal legal reserve in subsidiary account Net profit for the year Interim dividend Dividend payment by subsidiary after adjustment Legal reserve and other reserve of the subsidiary Net profit of minority interest Balance as at December 31, 2008 Dividend payment Other reserve Dividend payment by subsidiary Reversal of legal reserve and other reserve in subsidiary account Net profit for the year Interim dividend payment Net profit of minority interest Balance as at December 31, 2009

Balance as at January 1, 2008 Cumulative effect from error correction Ending balance after adjustment Dividend payment Other reserve Dividend payment by subsidiary after adjustment

Notes

Issued and paid-up share capital

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

2,467,411,910 (163,194,504) 356,186,494 (76,499,224) 2,583,904,676 (127,498,707) 373,456,427 (66,299,327) 2,763,563,069

Total

3,039,580,717 3,039,580,717 (163,194,504) (10,820,175) (257,051,860) 437,728,114 (76,499,224) (7,589,671) 28,723,961 2,990,877,358 (127,498,707) (14,823,340) 463,045,916 (66,299,327) 27,309,971 3,272,611,871

Total

Statements of Cash Flows

STATEMENTS OF CASh FLOwS

STATEMENTS OF CASh FLOwS (CONT.)

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008

BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008 In Baht

In Baht

Consolidated Financial Statement Separate Financial Statement

Consolidated Financial Statement Separate Financial Statement Notes Cash flows from operating activities Net profit Adjustments to reconcile net profit to net cash provided by (used in) Operating activities Depreciation and amortization Amortization of concession and right of use of land leased by subsidiary Reversal of allowance for doubtful accounts Increase in reserve for employeesâ&#x20AC;&#x2122; benefit Loss (gain) on diposal and written-off fixed assets Unrealized (gain) loss on exchange rate Dividend received from subsidiaries Interest income Amortization of deferred interest under finance lease agreements Interest expenses Corporate income tax expenses Net profit from operations before changes in operating asset and liabilities Operating assets decrease (increase) Trade accounts receivable Amounts due from and advances to related companies Inventory of spare parts Other current assets Other non-current assets Operating liabilities increase (decrease) Trade accounts payable Other current liabilities Other non-current liabilities Cash generated from operations Receipt of refunded income tax Payment for income tax Net cash from (used in) operating activities

2008 (Restated)

2009

490,355,887

466,452,075

373,456,427

356,186,494

364,993,300

357,093,337

273,225,116

268,039,654

28,061,713 (17,659,400) 9,242,878 911,409 550,397 (10,987,957)

25,762,078 (19,746,420) 47,181,668 (16,309,518) (2,635,022) (18,758,769)

(17,659,400) 8,040,319 895,925 414,857 (133,723,659) (9,080,603)

(19,746,420) 46,550,047 (16,324,608) (201,013) (134,967,154) (13,784,139)

1,684,206 105,331,269 191,630,444

2,395,410 161,287,561 203,330,834

1,117,132 75,257,610 78,536,955

1,635,717 106,749,049 86,143,945

1,164,114,146

1,206,053,234

650,480,679

680,281,572

(51,002,812) 57,928 1,131,093 (814,155) (104,185)

58,607,613 442,631 (5,447,569) 3,767,238 39,362

(43,852,399) 306,247 864,843 (291,403) (8,184)

55,646,174 41,514 (1,890,320) 2,926,255 56,262

12,383,666 (7,257,970) (443,500) 1,118,064,211 2,080,715 (171,395,049) 948,749,877

(10,627,737) (26,355,842) 5,000,000 1,231,478,930 (235,338,743) 996,140,187

20,718,827 (9,581,315) (438,871) 618,198,424 2,080,715 (71,945,579) 548,333,560

(29,466,666) (11,614,492) 695,980,299 (103,973,440) 592,006,859

Notes to financial statements form an integral part of these statements. 70

Annual Report 2009

2008 (Restated)

Notes Cash flows from (used in) investing activities Decrease (increase) in short-term investments Increase in restricted fixed deposits with finance institutions Decrease in loan to and long-term receivable from related company Dividend received from subsidiary Received interest Cash advance for investment Cash paid for property, leasehold improvement and equipment Cash paid for computer softwares Construction paid in advance Cash received from disposal of property, leasehold improvement and equipment Net cash from (used in) investing activities Cash flows from (used in) financing activities Payment of liabilities under finance lease agreements Payment for long-term loans from banks Dividend payment from subsidiary to minority interest Dividend payment Payment for interest expenses Net cash from (used in) financing activities Net increase (decrease) in cash and cash equivalents Unrealized gain (loss) on exchange rate, deposit in foreign currency Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

2009

2008 (Restated)

2009

(1,500,000)

139,046,435

(10,000,000)

(126,569)

(2,162,258)

17,659,400 11,702,921 -

19,746,420 18,984,554 (300,900,000)

17,659,400 133,723,659 9,979,510 -

19,746,420 134,967,154 13,814,338 (300,900,000)

(23,726,944) (2,601,718) -

(183,912,263) 5,030,401

(10,009,412) (2,216,592) -

(91,205,874) 1,751,401

584,145 1,991,235

100,833,947 (203,332,764)

584,145 149,720,710

100,882,142 (130,944,419)

(10,611,939) (519,995,942) (14,823,340) (193,798,034) (109,014,167) (848,243,422) 102,497,690

(8,159,138) (299,961,502) (18,409,846) (239,693,728) (166,166,838) (732,391,052) 60,416,371

(7,613,043) (301,587,302) (193,798,034) (78,377,543) (581,375,922) 116,678,348

(6,170,366) (81,587,302) (239,693,728) (110,216,120) (437,667,516) 23,394,924

(29,929) 102,467,761 573,796,489 676,264,250

(22,031) 60,394,340 513,402,149 573,796,489

116,678,348 297,310,146 413,988,494

23,394,924 273,915,222 297,310,146

Notes to financial statements form an integral part of these statements. Bangkok Aviation Fuel Services Plc.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

Statements of Cash Flows

For The Years Ended December 31, 2009 and 2008

STATEMENTS OF CASh FLOwS (CONT.) BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2009 AND 2008

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 1. gENERAl INFORMATION

In Baht Consolidated Financial Statement Separate Financial Statement Notes

2008 (Restated)

2009

Supplemental cash flows information :Non cash transactions Transferred advance payment for construction to property, leasehold improvement and equipment Acquiring leasehold improvement and equipment through creation of liabilities

2008 (Restated)

2009

34,130,401

30,851,401

(57,169,377)

(700,050)

Bangkok Aviation Fuel Services Public Company Limited was incorporated as a limited company under Thai laws on 30 December 1983, later on the company was registered itself as the public company under the Public Company Law on 28 September 1995 with the registered address at 171/2 Kampaengphet 6 Road, Donmuang, Bangkok. The Company operates in Thailand and its principal activity is aviation fuel service. 2. BASIS FOR PREPARATION OF THE FINANCIAl STATEMENTS 2.1 Basis for preparation of financial statements The financial statements have been prepared in accordance with the accounting standards prescribed by Thai Accounts Act enunciated under the Accounting Profession Act B.E. 2547. The presentation of the financial statements has been made in compliance with the Notification of the Department of Business Development, the Ministry of Commerce, re : the financial statements presentation for public limited company, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from such financial statements in Thai language. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 The consolidated financial statements included the financial statements of Bangkok Aviation Fuel Services Public Company Limited and a group of subsidiaries that the Company has a direct control as the following :Percentage owned by the Company

Incorporated in country

Nature of Business

As at Dec. As at Dec. 31, 2009 31, 2008 Intoplane Service Company Limited Thai Aviation Refuelling Company Limited JP-One Assets Company Limited

Annual Report 2009

83.3 90.00

Thailand Thailand

92.50

Thailand

Intoplane services Hydrant network services Aviation Fule Pipline Transportation

Subsidiaries’s total revenues as a percentage to the consolidated total

As at Dec 31, 2009

As at Dec 31, 2008

For the years ended Dec. 31, 2009 2008

0.04 27.04

0.03 27.11

26.97

27.03

10.25

10.05

4.82

3.96

2.3 In 2007 the Company has acquired a 50 percent equity interest in JP-One Assets Company Limited (JP-One). On December 8, 2008 the Company increased the investment in JP-One Assets Company Limited by acquiring 42.5% of its registered share capital from existing shareholders for Baht 300.90 million, resulted in the increase of the proportion of investment of the Company in JP-One from 50% to 92.5% while the net book value of JP-One was Baht 257.05 million. The excess of cost over book value of Baht 43.85 million is presented as asset under “Right of use of land leased by a subsidiary” in consolidated balance sheet and is to be amortized by the straight-line method for 17 years and 10 months, stipulated by the remaining of the rental period that the subsidiary has been granted approval by Airports of Thailand Public Company Limited to rented the land outside of the fence of the Suvarnabhumi Airport for the aviation fuel hydrant network from the refinery plant to the Company’s storage. The amortization of the “Right of use of land leased by a subsidiary” commenced from December 8, 2008 until the expiration of the rental agreement. 2.4 The Company has invested in Thai Aviation Refuelling Company Limited. The investments in the subsidiary, as recorded in the Company’s book of accounts were eliminated against the shareholders’ equity of the subsidiary as at the acquisition date. The resultant difference has been presented as “Goodwill” in the consolidated balance sheets and amortized on a straight-line basis over a period of thirty years. The amortization period has been stipulated based on the period that the subsidiary has been granted the concession to operate an aviation refuelling. In 2008, the Company has considered changing the name of the transaction to “Concession of a subsidiary” in order to present it appropriately and carries on the amortization according to the period of the concession. 2.5 Material inter-company balances and transactions are eliminated from the consolidated financial statements. The book value of investments in subsidiaries in the Company’s financial statements and the shareholders’ equity of the subsidiaries are eliminated from the consolidated financial statements.

Notes to financial statements form an integral part of these statements. 72

83.33 90.00

Subsidiaries’s total assets as a percentage to the consolidated total

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008

3. SIgNIFICANT ACCOuNTINg POlICIES Significant accounting policies adopted by the Company and its subsidiaries are summarized below. 3.1 Income recognition and expenses a) Services incomes Services incomes are recognised when services are rendered. Services incomes present the invoiced value, excluding value added tax. b) Rental and interest incomes Rental and interest incomes are recognised as incomes on an accrual basis. c) Expenses Expenses are recorded on an accrual basis. 3.2 Cash and cash equivalents Cash and cash equivalents include cash on hand and at banks and deposit with finance institutions with an original maturity of 3 months or less and free from restriction. 3.3 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realizable value. Allowance for doubtful accounts is provided for the estimated collection losses that may incur in collection of receivables. The allowance is based on collection experience and current status of receivables outstanding at the balance sheet date. 3.4 Inventory of spare parts Spare parts are stated at cost and are expended whenever consumed. 3.5 Property, leasehold improvement and equipment and depreciation Land and land improvement are stated at cost. Leasehold improvement and equipment are stated at cost less accumulated depreciation. Assets under finance lease are stated at fair value, on begin agreement date less accumulated depreciation. Depreciation of leasehold improvement and equipment are calculated by reference to costs or fair value on begin agreement date as the case may be, on a straight-line method over their estimated useful lives as follows :Leasehold improvement 10 years, lease period Office furniture, equipment and computer 3 - 5 years Main depot facilities 5 - 28 years Hydrant equipment 5 - 30 years Intoplane substation 5 - 20 years Vehicle fleet and motor vehicle 5 years Motor vehicle under finance lease agreements lease period No depreciation is provided for land, land improvement, building under construction and equipment under installation. 3.6 Computers softwares Computers softwares are stated at cost less amortization. Amortization of intangible assets is calculated by the straightline method over the estimated useful lives of 5 years. 3.7 Leasehold rights Leasehold rights are stated at cost less amortization. Amortization of leasehold is calculated by the straight-line method over the lease period of 3 years and 17 years. 3.8 Impairment of assets The Company and the subsidiaries review the impairment of assets whenever events indicate that the carrying value of an asset exceeds its realizable value. Realizable value is determined the value of an assetâ&#x20AC;&#x2122;s net selling price and its value in use whichever is higher. The Company and the subsidiaries recognize an impairment loss in the statements of income whenever the carrying value of an asset exceeds its realizable value. The Company and the subsidiaries will reverse the impairment loss when there are indications that the value of the asset is no longer impaired or the amount of impairment has decreased. 3.9 Investments in subsidiary and related companies Investments in subsidiary (in the Separate financial statements) are stated under cost method. 74

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

3.10 3.11

3.12

3.13

3.14

3.15 3.16

3.17

The Company estimate impairment of investment in subsidiaries by consideration its net book value and other related factor. Other investment in related company is stated at cost. An allowance for impairment loss will be made when the net realizable value is lower than the cost of the investments. Borrowing cost The interest cost and commitment fee of borrowings for construction of project is capitalized as part of the cost of project which is ended when the project is transferred to be fixed-assets in the register. Foreign currencies Foreign currency transactions incurred during the years are translated into Baht at the rates ruling on the transaction dates. Assets and liabilities denominated in foreign currency outstanding on the balance sheet dates are translated into Baht at the rates ruling on the balance sheet dates. Exchange gains and losses are included in determining earnings. Reserve for employeesâ&#x20AC;&#x2122; benefit/provident fund The Company has a benefit scheme for its employees whereby an employee is entitled to receive, upon retirement or resignation, a sum computed in accordance with his length of service, and is also entitled to receive part of such amount in advance, in accordance with conditions stipulated by the Company, In 1997, the Company and its employees jointly established a provident fund as approved by the Ministry of Finance in accordance with the Provident Fund Act (B.E. 2530), to replace the old benefit scheme. Most employees chose to joint the provident fund and the Company transferred a total of the reserve for employee benefits set aside under the old scheme to the provident fund. The provident fund is contributed to by both employees and Company and the fund will be paid to employees upon termination of employment in accordance with the rules of the fund. However the Company has to set reserve for its obligations in respect of employees who had joined the old employee benefit scheme and transferred to the provident fund, equal to the excess of the amount that would have been payable upon termination if the employee had stayed with the old employee benefit scheme over the amount payable upon termination under the provident fund, in respect of the Companyâ&#x20AC;&#x2122;s contributions and their related benefits, together with obligations to employees who are still members of the previous scheme. Finance leases The Company and its subsidiaries regarded leases that transfer substantially all the risks and rewards of ownership as finance leases whereby the fair value of the leased properties are recorded as assets and commitment of the future rental (deducted interest portion) as liabilities. Interest expenses or finance charge are included in determining earnings according to the remaining balance of the liabilities. Financial instruments The Company and its subsidiaries have no policy to speculate in or engage in the trading of any financial derivative instruments. The Company records the derivative instruments for interest rate swaps on an accrual basis. A subsidiary records the derivative instruments for USD/THB cross currency swaps on an accrual basis. Financial instruments carried in the balance sheets include cash and bank balances, trade accounts receivable, trade accounts payable, loan to related company and loans. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. Basic earnings per share Basic earnings per share are determined by dividing net earnings for the year by the weighted average number of ordinary shares in issue during the year. Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles in certain circumstances requires management to make estimates and assumptions that affect amounts reported in the accompanying financial statements and notes thereto. Actual results could differ from these estimates. Adoption of new accounting standards during the year 3.17.1 The Federation of Accounting Professions (FAP) has issued Notification No. 12/2552 dated May 15, 2009, regarding the renumbering of Thai Accounting Standards to be the same as International Accounting Standards. 3.17.2 The Federation of Accounting Professions (FAP) has issued Notification No. 86/2551 and 16/2552, mandating the use of new accounting standards, financial reporting standards and accounting treatment guidance as follows. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008

a) Accounting standards, financial reporting standards and accounting treatment guidance which are effective for the fiscal year beginning on or after January 1, 2009. Framework for the Preparation and Presentation of Financial Statements (revised 2007) TAS 36 Impairment of Assets (revised 2007) TFRS 5 Non-current Assets Held for Sale and Discontinued Operations (revised 2007) Accounting Treatment Guidance for Leasehold Right Accounting Treatment Guidance for Business Combination under Common Control The management of the Company has assessed the effect of these accounting standards, financial reporting standards and accounting treatment guidance and believes that they will not have any significant impact on the financial statements for the current year. b) Accounting standards which are not effective for the current year. TAS 20 Accounting for Government Grants and Disclosure of Government Assistance (effective on January 1, 2012) TAS 24 Related Party Disclosures (revised 2007) (effective on January 1, 2011) TAS 40 Investment Property (effective on January 1, 2011) The management of the Company is still evaluating the effect of these accounting standards to the financial statements for the year in which they are initially applied. 4. RElATED PARTY TRANSACTIONS 4.1 Transaction related to subsidiaries and related companies During the years, the Company had significant trading transaction with its subsidiaries (eliminated from the consolidated financial statements) and related companies (related by shareholder and/or way of common shareholders and/or common directors) in connection with service income, loan, rental and other income. The Company has the following policy on pricing for its related transactions :1. Cost of service from the subsidiaries based on the serviced and expenses occurred. 2. Rental charge for an office building to subsidiaries is based on the every year increase in the average rate of CPI by the minimum rate of 5 percent but not exceeding 7 percent from the prior year rental. 3. Rental charge for receiving pipeline system to subsidiaries is based on the contract price between the parties. 4. Guarantee fee income is charged at the rate of 1 percent per annum of the outstanding balance of the guarantee obligation. 5. Service income is based on the contract price between the parties. 6. Rental charge for receiving pipeline system to a related company is charged the rate of 21.5 percent of the lessorsâ&#x20AC;&#x2122; annual income received from the transportation of the fuel, JET A-1, via the pipeline system (before discounts and relevant tax). 7. Rental charge for an office building to a related company is based on the every-3-year increase in the average rate of CPI but not exceeding 5 percent of the latest rent charge. 8. Rental charges for land is based on rental expense paid to Treasury Department and plus a rate of 5 percent of annual rental. 9. Interest on loan to related company is charged at the rate of 1 percent per annum according to the Amendment Agreement (No. 2 and 3) relating to the Debt Restructuring Agreement of its related company. 10. Rental charge for land and building include utilities to a related company is based on the every year increase in the average rate of CPI but not exceeding 7 percent of the latest rent charge. Significant transactions between the Company and its related parties are summarized below :(Unit : million Baht) For the Yrars ended December 31, Pricing Consolidated Financial Statement Separate Financial Statement. policy 2009 2008 2009 2008

Transactions with subsidiary companies : Cost of service Rental charges for office building Rental charge for receiving pipeline system Guarantee fee income Other income Transactions with related companies Service income Rental charges for receiving pipeline system Rental charges for office building and land Rental charge for land & Building Interest income Other income

Annual Report 2009

5.4 1.1 15.0 9.2 17.7

4.7 1.0 11.8 11.2 15.7

(1) (2) (3) (4) (5)

1,320.3 1.8 6.4 8.4 4.1 0.2

1,390.3 3.7 6.3 9.2 3.7 0.7

1,320.3 1.8 6.4 8.4 4.1 0.2

1,390.3 3.7 6.3 9.2 3.7 0.4

(5) (6) (7), (8) (10) (9) (5)

Bangkok Aviation Fuel Services Plc.

The outstanding balance of the above transactions have been separately presented in the balance sheets under the caption as follows :(Unit : million Baht) Relationship

Consolidated Financial Statement 2009 2008

Separate Financial Statement. 2009 2008

37,101,583 40,654,269 27,529,042 47,782,094 29,097,012 1,206,236 1,678,867 1,134,778 12,268,447 670,096

31,667,177 30,582,075 17,696,167 36,556,535 22,025,859 3,073,030 2,689,636 850,541 5,150,925 786,717

37,101,583 40,654,269 27,529,042 46,874,421 28,742,627 1,206,236 1,678,867 1,134,778 -

199,122,424

151,078,662

2,438,320 1,161,540

2,830,944 1,017,235

214,333 115,462

239,639 152,908

214,333 115,462

239,639 152,908

329,795

392,547

3,929,655

4,240,726

400,345,867

418,005,267

400,345,867 418,005,267

(400,345,867) (418,005,267) -

Trade accounts receivable - related companies Thai Airways International Plc. Chevron (Thailand) Ltd. Esso (Thailand) Plc. PTT Plc. The Shell Company of Thailand Limited Air Total (Thailand) Limited Singapore Petroleum (Thailand) Limited Petronas Retail (Thailand) Ltd. BP Oil (Thailand) Ltd. Bangchak Petroleum Plc. Fuel Pipeline Transportation Limited

Shareholder and a representative director Shareholder and a representative director Shareholder Shareholder and a representative director Shareholder and a representative director Shareholder Shareholder Shareholder Shareholder Co-Shareholder Common shareholders and a representative director

Total Amounts due from and advance to related companies Subsidiaries Thai Aviation Refuelling Ltd. JP-One Assets Ltd. Related Companies Fuel Pipeline Transportation Limited Common shareholders a representative Thai Petroleum Pipeline Ltd. Co-Shareholder Total

27,296,259 30,282,475 17,696,167 35,285,990 21,703,451 3,073,030 2,689,636 850,541 5,150,925 -

184,921,823 144,028,474

loan to and long-term receivable from related company Fuel Pipeline Transportation Limited

Common shareholders and a representative director

Less : Allowance for doubtful accounts Total Trade accounts payable - related company Subsidiary Thai Aviation Refuelling Company Limited

55,473,427

41,698,25

34,883,545 20,330 5,800 20,330 278,193 5,897,467

29,350,627 20,330 2,158,084 20,330 332,989 236,049

22,952,793 20,330 5,800 20,330 278,193 -

17,079,713 20,330 20,33 332,989 -

41,105,665

32,118,409

78,750,873

59,151,620

Related Companies Airport of Thailand Plc. The Shell Company of Thailand Limited Thai Airways International Plc. Chevron (Thailand) Company Limited PTT Public Company Limited Fuel Pipeline Transportation Limited

Shareholder and a representative director Shareholder and a representative director Shareholder and a representative director Shareholder and a representative director Shareholder and a representative director Shareholder and a representative director

Total

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008 (Unit : Baht)

Movement of loan to and long-term receivable from related company during the year ended December 31, 2009 is as follows :Consolidated Financial Statement 2009 22008

Unit : Million Baht

Balance as at January 1, 2009 loan to and long-term receivable from related company Fuel Pipeline Transportation Limited Less : Allowance for doubtful accounts Total

418,005,267 (418,005,267) -

Movement during the year Increase Decrease

Balance as at December 31, 2009

(17,659,400) 17,659,400 -

400,345,867 (400,345,867) -

In addition, the Company had transactions with entered into an agreement with the local bank to guarantee the credit facilities provided to Thai Aviation Refuelling Company Limited and JP-ONE Assets Co., Ltd (subsidiaries) as discussed in note 21.1.3 to the financial statements. On April 29, 1999, the Company entered into the agreement to guarantee the debt payment with a group of creditors of Fuel Pipeline Transportation Limited (FPT), under its debt restructuring agreement. The outstanding balance of guarantee obligation, as of December 31, 2001, was approximately Baht 415 million, and the Company had already recorded provision in full amount of the guarantee expenses for such obligation. On March 28, 2002, the above company entered into the Amendment Agreement (No. 2) relating to the Debt Restructuring Agreement with the group of creditors, and on the same day the Company entered into the Assignment Agreement (relating to Tranche 2 Debts under the Debt Restructuring Agreement) of Fuel Pipeline Transportation Limited with that company’s creditors to purchase the rights of claim over debt amounting to Baht 415 million from that company’s group of creditors. In this regard, the Company agreed to accept all rights and debt under the agreement, including commitments of the group of creditors with respect to the agreement but excluding interest accrued up to the date of the purchase. As to the above activities, cause the commitment on guarantee agreement revoked. On December 29, 2009, FPT entered into the Amendment Agreement (No.3) relating to the Debt Restructuring Agreement with the group of creditors again, for running a business straight forward. The creditors approved to waive the accrued interest and reschedule the loan payment as the terms and conditions of the Amendment Agreement (No.3). This restructuring has no effect to debt between BAFS and FPT. The BAFS has recorded FPT as a debtor amounting of Baht 415 million under the category of “Loan to and long term receivable from the related company”. The Company has also transferred the reserve of guarantee expenses totaling of Baht 415 million to “Allowance for doubtful debt for loan to and long term receivable from related company”. Under the agreement to purchase the right of claim amounting of Baht 415 million, the Company had recorded this transaction as “Liability under agreement to purchase the right of claim” in the balance sheets. The terms of payment as follows ; 1. Payment of 50% of the debt, or in amount of Baht 207.5 million is made on the date of signing agreement. 2. The remaining debt is to be paid in 12 quarterly installments of approximately Baht 17.3 million each. The Company repaid all of the particular debt on March 31, 2005. 4.2 Transaction related to government entities that may conflict interest The Company has entered into a contract with The Ministry of Finance which is the Company’s indirect major shareholder (The Ministry of Finance is the major shareholder of Thai Airways International Public Company Limited and Airport of Thailand Public Company Limited, including Thai Airways International Public Company Limited is the major shareholder of the Company) for leasing of land and building of Treasury Department at Don Muang Airport, rental incurred for the years ended December 31, 2009 and 2008 in amount of Baht 7 million and Baht 6 million, respectively. 5. CASH AND CASH EQuIVAlENTS Cash and cash equivalents as at December 31, 2009 and 2008 are comprised of the followings :78

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Cash on hand Deposit with banks and finance institutions Total Less Short-term investments Cash and cash equivalents

159,940 768,644,015 768,803,955 (92,539,705) 676,264,250

Separate Financial Statement 2009 2008

171,975 664,624,514 664,796,489 (91,000,000) 573,796,489

112,398 504,876,096 504,988,494 (91,000,000) 413,988,494

132,641 388,177,505 388,310,146 (91,000,000) 297,310,146

As at December 31, 2009 and 2008, a subsidiary’s cash at banks with a financial institutions amount of Baht 185 million and Baht 210 million, respectively are under the financial facility agreement. Under the term of agreement, the subsidiary has to transfer the right on the said cash to the financial institution but it is not effective unless the subsidiary fail to comply with the agreement. 6. SHORT-TERM INVESTMENTS / RESTRICTED FIxED DEPOSITS WITH FINANCE INSTITuTIONS 6.1 As of December 31, 2009 and 2008, the Company has fixed deposit of Baht 90 million with a bank to use for support of “The employee housing loan project” which the Company’s employees who participate with the project will be privilege on the interest rate at below the market rate. However, the Company is able to withdraw the deposit to use in its normal business operations, then the interest rate of the employees’ loans will be adjusted to the market rate. 6.2 As of December 31, 2009 and 2008 a subsidiary has deposits of Baht 5.5 million with finance institutions. The deposits have been placed as collaterals for issuance of letters of guarantee for the company’s subsidiary and related company. 7. TRADE ACCOuNTS RECEIVABlE As at December 31, 2009 and 2008, the outstanding balances of trade accounts receivable are not yet due 8. INVESTMENTS IN SuBSIDIARIES These represent investments in ordinary shares of the following companies :Company Subsidiary companies Intoplane Service Co., Ltd. Thai Aviation Refuelling Co., Ltd. JP-One Assets Co., Ltd. Total

Percentage Million Baht owned by Nature of Paid-up capital The Company Business 2009 2008 2009 2008 Service Service Service

0.12 530 600

83.33 90 92.50

(Unit : Baht}

Cost method 2009 2008 100,000 1,235,000,000 600,900,000 1,836,000,000

100,000 1,235,000,000 600,900,000 1,836,000,000

Book value of the subsidiaries base on equity method 2009 2008 2,346,512 1,760,962 907,821,296 804,695,978 568,126,561 556,616,253 1,478,294,369 1,363,073,193

On March 17, 2008, the annual general meeting of a subsidiary has approved a resolution to declare a cash dividend payment from its 2007 operations at the rate of Baht 1.28 per share amounting to Baht 7.68 million. The payment was made on April 30, 2008. On August 8, 2008, the board of directors of the Company has approved a purchase of 2.55 million ordinary shares of the subsidiary from Finansa Group which increase the share holding of the Company in the subsidiary from 50% to 92.5% for an amount of Baht 300.9 million. The Company has paid for the shares and the shares have been transferred to the Company on December 8, 2008. The book value of the purchased assets and liabilities are as follows :

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

357,313,839

353,984,165

For the year ended December 31, 2009

For the year ended December 31, 2008

5,401,412,109 54,408,134 30,579,794 182,762,195 377,649,575 2,890,087,458 1,581,206,078 75,794,120 208,759,242 December 31, 2008

Depreciation charge in statements of income

39,883,423 19,254,345 132,817,350 348,844,351 2,729,974,782 1,527,886,621 58,306,196 43,673 208,759,242 December 31, 2009

Net book value

December 31, 2009

Annual Report 2009

165,513

5,065,769,983

2,459,078,010 24,927,749 593,187,968 149,723,292 205,548,318 1,351,539,645 122,452,438

Depreciation for the year

11,698,600

357,313,839 10,750,286 52,582,746 29,551,223 57,459,402 179,316,249 27,532,095

Disposal

121,838

(11,540,128) (5,090,942) (1,189,818) (10,447) (28,371) (5,220,550)

Transfer out

(32,459,698) -

19,268,405 541,795,040 120,182,516 148,088,916 1,172,251,767 100,140,893 44,036,460 January 1, 2009

Accumulated depreciation

(32,459,698)

2,145,763,997

7,524,847,993 39,883,423 44,182,094 726,005,318 498,567,643 4,081,514,427 1,733,434,939 180,758,634 11,742,273 208,759,242 December 31, 2009

(13,595,357) (5,666,105) (2,220,593) (10,448) (426,960) (5,271,251) -

(67,922,658) (35,462,958) (32,459,700)

35,462,958 3,401,076 700,000 4,139,945 19,367,534 7,854,403 -

23,726,944 20,938,247 267,600 46,000 234,628 2,240,469

7,547,176,106 54,408,134 49,848,199 724,557,235 497,832,091 4,062,339,225 1,729,294,994 175,935,013 44,201,973

Disposal

According to the un-reviewed accounts of Fuel Pipeline Transportation Limited as of December 31, 2009, that company has a capital deficit of Baht 408 million (December 31, 2008 : Baht 789 million). However, the Company has already set aside provision against impairment loss of investment in full amount.

133,000,000 133,000,000 132,521,700 132,521,700 265,521,700 265,521,700 (265,521,700) (265,521,700) -

Transfer out

16.71 16.65

2008

Transfer in

796 796

Cost

796 796

2009

208,759,242

the Company 2009 2008

Purchase

Related company Fuel Pipeline Transportation Limited Services Ordinary shares Preference shares Total Less : Allowance for impairment loss of investment Total investment in related company - net

Paid-up capital 2009 2008

Unit : Baht

January 1, 2009

Nature of Business

Percentage owned by

Cost

Company

Baht

10. PROPERTY, lEASEHOlD IMPROVEMENT AND EQuIPMENT

On July 23, 2009, the board of directors of a subsidiary approved an interim dividend payment from its first six-month period of 2009 operation at Baht 12.17 per share amounting to Baht 64.50 million. The dividend was paid on August 10, 2009.

Land and land Leasehold improvement improvement

Office furniture/ equipment/ computer

On March 23, 2009, the annual general meeting of the such subsidiary approved a resolution to declare a cash dividend payment from its 2008 operations at the rate of Baht 29.94 per share for an amount of Baht 158.68 million of which the interim dividend payment had been paid as mentioned above. The dividend balance at last six-month period of 2008 operation at Baht 15.62 per share amounting to Baht 82.79 million. The payment was made on April 10, 2009.

9. OTHER INVESTMENTS IN RElATED COMPANY These represent investments in shares of the following company :-

Vehicle fleet Main depot facilities

On April 21, 2008, the annual general meeting of another subsidiary approved a resolution to declare a cash dividend payment from its 2007 operations at the rate of Baht 28.27 per share for an amount of Baht 149.8 million of which the interim dividend payment had been paid at the rate of Baht 15.10 per share amounting to Baht 80 million in August 2007. The subsidiary paid the remaining of Baht 13.17 per share amounting to Baht 69.8 million on April 30, 2008. On July 25, 2008, a resolution of the board of directors of the subsidiary approved an interim dividend payment from its first six-month period of 2008 operation at Baht 14.32 per share amounting to Baht 75.90 million. The payment was made on August 13, 2008.

Intoplane substation

On March 30, 2009, the annual general meeting of the such subsidiary approved a resolution to declare a cash dividend payment from its 2008 operations at the rate of Baht 0.21 per share for an amount of Baht 1.26 million payment in April 3, 2009.

Hydrant equipment

Consolidated Financial Statement

(Unit : Baht) 44,814,245 665,061,690 5,955,441 (30,062,889) (80,940,578) 604,827,909 257,051,861 43,848,139 300,900,000

Cash and cash equivalents Other current assets Other non-current assets Other current liabilities Non-current liabilities Net assets Net assets received - in the proportion of the Company Add : Excess of cost over book value Amount paid for the shares

Total Building and Motor vehicle equipment under under financial lease construction/ agreement installation

For The Years Ended December 31, 2009 and 2008

(Unit : Baht)

Notes To Financial Statements

262,572,347

265,781,519

3,129,210,117 50,229,134 21,363,666 355,398,736 2,246,061,068 70,969,320

1,526,108

174,737,330

2,871,382,779 25,642,110 13,303,095 327,720,261 2,111,083,793

11,165,653 91,245,098 747,796,971 16,697,044 54,219,762 477,228,722 1,398,353,250

10,437,995 59,912,568 738,680,102 16,697,044 53,238,973 418,111,251 1,297,077,933

Separate Financial Statement 2009 2008 11,165,653 90,766,060 747,796,971 16,697,044 54,219,762 477,228,722 1,397,874,212

10,437,995 59,572,382 738,680,102 16,697,044 53,238,973 418,111,251 1,296,737,747

(Unit : Baht)

165,513

Consolidated Financial Statement Balance per book Balance per book Decrease as at Dec. 31, 2009 as at Jan. 1, 2009 Increase At cost Less Accumulated amortization Computer softwares, net

208,759,242

43,986,700 (23,403,427) 20,583,273

2,601,718 (6,621,166)

46,588,418 (30,024,593) 16,563,825

Bangkok Aviation Fuel Services Plc.

For the year ended December 31, 2008

For the year ended December 31, 2009

(Unit : Baht)

Depreciation charge in statements of income

December 31, 2008

43,673 December 31, 2009

Net book value

208,759,242

52,397,290

5,113,342

127,319,973

2,169,439,445 15,408,438 148,312,382 1,269,234,084 11,698,600 December 31, 2009

119,052,525

19,685,515

586,047,901

265,781,519 7,485,408 28,424,474 153,411,220 Depreciation for the year

121,838

25,730,610

552,711

50,055,258

(11,540,128) (5,090,942) (10,447) (28,371) Disposal

(5,220,550)

(1,189,818)

(32,459,698) (32,459,698) Transfer out

1,947,657,752 13,013,972 119,898,355 1,115,851,235 44,036,460 January 1, 2009

Accumulated depreciation

98,542,465

19,132,804

537,182,461

5,040,822,224 25,642,110 28,711,533 476,032,643 3,380,317,877 11,742,273 December 31, 2009

208,759,242

171,449,815

24,798,857

713,367,874

(13,595,357) (5,666,105) (10,448) (426,960) -

Annual Report 2009

Disposal

(5,271,251)

(2,220,593)

(65,212,555) (32,752,855) (32,459,700) Transfer out

32,752,855 700,000 18,817,534 Transfer in

5,694,300

4,139,945

3,401,076

10,009,412 8,165,831 46,000 15,000 Purchase

1,514,981

267,600

5,076,867,869 50,229,134 34,377,638 January 1, 2009

Cost

44,201,973

11. COMPuTER SOFTWARES - NET Computer softwares, net consisted of :-

208,759,242

Leasehold improvement Office furniture / equipment / computer Main depot facilities Hydrant equipment Intoplane substation Vehicle fleet Total

Land and land Leasehold improvement improvement

3,361,912,303

Consolidated Financial Statement 2009 2008

169,511,785

475,297,091

711,919,791

Total

20,658,912

(Unit : Baht)

Main depot facilities

Intoplane substation

Vehicle fleet

Building and equipment under construction/ installation Motor vehicle under financial lease agreement Hydrant equipment

As at December 31, 2009 and 2008, the initial cost of the fixed assets that have been fully depreciated but still in use are as follows :

Office furniture/ equipment/ computer

Separate Financial Statement

(Unit : Baht)

According to the rental agreement, the legal right of equipment and building constructed on the leased land shall be taken over by the lesser upon the completion of construction. However the Company remain the right to use the assets, which is continuing renew the agreement, and believe that the Company will able to continuing renew the agreement. Under the Into-plane Service Agreement and the Permission for Performance Agreement of the aviation fuel hydrant network at Suvarnabhumi Airport, between the Airport of Thailand Public Company Limited and the Company, and a subsidiary respectively, the Company shall transfer the ownership of all buildings and construction to the Ministry of Finance upon the completion of the construction, and the Subsidiary shall transfer the Hydrant system to the Airport of Thailand Public Company Limited within 60 days before operating the service. As of December 31, 2009 the right transferring as to the above 2 agreements are in its process. On August 8, 2008, the board of director of the Company approved to sell the land in Lad Krabang with a total area of 16 rai 3 ngarn and 70 square wah to Mon Transport Co., Ltd. for Baht 100 million. The transaction has been accomplished on December 18, 2008.

Balance per book as at Jan. 1, 2009 At cost Less Accumulated amortization Computer softwares, net

41,982,612 (23,287,984) 18,694,628

Separate Financial Statement Increase 2,216,592 (6,385,302)

Decrease -

Balance per book as at Dec. 31, 2009 44,199,204 (29,673,286) 14,525,918 (Unit : Baht)

Consolidated Financial Statement

Separate Financial Statement

For the years ended December 31, For the years ended December 31, 2009 2008 2009 2008 Amortization

6,621,166

Bangkok Aviation Fuel Services Plc.

3,096,227

Annual Report 2009

6,385,302

3,009,156

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008

12. lIABIlITIES uNDER FINANCIAl lEASE AgREEMENT As at December 31, 2009 and 2008, the Company and its subsidiaries have liabilities under financial lease agreement, leasing of vehicles. The payment details are follows :Consolidated Financial Statement (Baht)

Within one year After one year but within five years Total

As at December 31, 2009 Principal Interest Payments

As at December 31, 2008 Principal Interest Payments

12,560,470

909,239

13,469,709

11,897,787

1,668,145

13,565,932

6,724,534 19,285,004

169,738 1,078,977

6,894,272 20,363,981

18,574,317 30,472,104

1,013,686 2,681,831

19,588,003 33,153,935

Consolidated Financial Statement 2009 2008 Credit line no. 3

Credit facility Baht 220 million

(Million USD)

(Million Baht)

(Million (Million USD) Baht)

Separate Financial Statement 2009 2008 (Million Baht)

(Million Baht)

220

420

560

The higher of 3-month fixed deposit rate for individuals or corporations, plus a certain percentage. The interest is payable monthly. The loan is repayable in 20 quaterly installments of Baht 35 million from March 2008 to December 2012.

Within one year After one year but within five years Total

As at December 31, 2008 Principal Interest Payments

9,817,590

594,824

10,412,414

8,898,890

1,101,071

9,999,961

4.8

163

6.4

217

LIBOR plus a certain percentage. The interest is payable monthly. The loan is repayable in 20 quarterly installments of USD 0.4 million from March 2008 to December 2012

3,671,144 13,488,734

127,224 722,048

3,798,368 14,210,782

12,778,048 21,676,938

656,758 1,757,829

13,434,806 23,434,767

As at December 31, 2009 and 2008, the Company and its subsidiaries have 40 outstanding financial lease agreements with 4 local leasing companies and 42 outstanding financial lease agreements with 5 local leasing companies, respectively. The lease term will end in 2012, each agreement is repayable on equal monthly installments as specified in the lease agreement. Under the term of lease agreement referred to above, the Company and its subsidiaries shall have the right to purchase the assets upon the expiry of the lease agreement and shall have to comply with certain conditions and restrictions as specified in the lease agreement. Liabilities under financial lease agreement for the portion due within one year were shown under “current liabilities” in the balance sheet.

Baht 700 million

USD 8 million

Baht 170 million

170

MLR minus a percentage specified in the agreement. The interest is payable monthly. The loan is repayable in 16 quarterly installments of Baht 18.75 million from March 2010 onward.

Baht 120 million

MLR minus a percentage specified in the agreement. The loan is to be repaid in 60 monthly installments of Baht 2 million each, from January 2008 to December 2012.

3,102 (655)

3,622 (520)

2,277 (362)

2,579 (302)

2,447

3,102

1,915

2,277

13. lONg-TERM lOANS FROM BANKS Consolidated Financial Statement 2009 2008 Credit line no.

Credit facility

Separate Financial Statement 2009 2008

(Million USD)

(Million Baht)

(Million USD)

(Million Baht)

Interest Rate / Condition term payment loan and interest

The Company

Baht 800 million

457

559

457

559

6-month THBFIX plus a certain percentage per annum. Repays the principal and interest every 6-month period. The loan is repayable in 15, equal, installments of Baht 50.79 million from February 2007 to February 2014

Part 1 - Baht 1,700 million

1,360

1,530

1,360

1,530

Part 2 - Baht 300 million

240 1,600

270 1,800

240 1,600

270 1,800

3-month fixed deposit rate plus a certain percentage. The interest is payable monthly. Repayment of loan principal at the amount specified in the agreement is to be made by 28 quarterly installments from March 2008 to December 2014.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

MLR of the bank less a fixed percentage. The interest is payable monthly. The loan is repayable in 20 quaterly installments of Baht 6.25 million from March 2011 onward.

The Subsidiaries

Separate Financial Statement (Baht) As at December 31, 2009 Principal Interest Payments

Interest Rate / Condition term payment loan and interest

Total long-term loans Less Current portion Long-term loans from banks - net

Additions : The Company The Credit line no. 1, in order to hedge the interest rate risk associated with the above loan the Company entered into an interest rate swap agreement with a bank, terminating on February 28, 2014, to swap the above interest rate for a fixed interest rate. At each quarterly maturity date the Company pays interest at a fixed rate per annum to the bank and the bank pays interest to the Company at the 6-month Thai Baht Interest Rate Fixing (6-Month THBFIX) plus a certain percentage per annum, in accordance with the conditions stipulated in the agreement. Under the above agreement, the Company is required to comply with certain stipulated loan conditions relating to matters such as prohibit of creation of commitment to the Company’s assets or transfer of right except for certain conditions, the maintenance of a debt to equity ratio and payback ability ratio etc. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008

The Subsidiaries The Credit line no. 5, in order to hedge the interest rate and foreign currency exchange risk the subsidiary entered into the agreement of USD/THB Cross Currency Rate Swap transaction with the such bank, which will be terminated due on December 31, 2012 as the following condition ;

16. CORPORATE INCOME TAx

On each monthly maturity date the subsidiary will pay the fixed interest rate to the bank and the bank pays USD-LIBOR plus spread.

For the year 2009, the Company’s significant adding back expenses which disallowable for tax calculation are reserve for employee’s benefit expenses amounted to Baht 8 million and deducting certain exempted income are dividend income amounted to Baht 134 million and reversal debt amounted to Baht 18 million.

And, each party will exchange amount of USD and THB due from the quarterly principal installments and monthly interest as stated in the agreement. The Credit line no. 4, 5 and 6, these loans are guaranteed by the Company and secured by the rights over deposits, and the transfer of the rights under the Permission for Performance Agreement of the aviation fuel hydrant network. The Credit line no. 7, the Company is a guarantor of the loan, whereby it is responsible for 50 percent of principal, interest and any other expenses incurred by the bank in making collection of suing for recovery. Under the above agreement, the subsidiaries are required to comply with certain stipulated loan conditions, relating to matters such as the maintenance of a debt to equity ratio, dividend payment and compensation for losses suffered by the credit provider. 14. RESERVE FOR EMPlOYEE’S BENEFIT / PROVIDENT FuND Reserve for employee’s benefit, net consisted of :-

(Unit : Baht)

Consolidated Financial Statement 2009 2008 Beginning balance Increase reserve during year Decrease paid during year Ending balance

244,391,160 19,121,766 (9,878,888) 253,634,038

197,209,492 50,512,734 (3,331,066) 244,391,160

239,909,953 17,919,207 (9,878,888) 247,950,272

193,359,905 49,881,114 (3,331,066) 239,909,953

The Company’s contributions for the years ended December 31, 2009 and 2008, amounted to Baht 21 million. 15. ExPENSES BY NATuRE Significant expenses by nature are as follow :

Employees benefit expenses Directors’ remuneration Depreciation and amortization expenses Airport concession fees Rental expenses

(Unit : Baht)

370,427,250 15,857,105 364,993,300 227,920,370 30,326,713

390,313,348 14,836,282 357,093,337 233,527,071 36,641,588

For the year 2008, the significant adding back expenses which disallowable for tax calculation are reserve for employee’s benefit expenses amounted to Baht 47 million and deducting certain exempted income are dividend income amounted to Baht 135 million and reversal debt amounted to Baht 20 million. 16.2 Corporate income tax for a subsidiary is calculated on net income for the year after adding back certain expenses and deducting exempted income in compliance with the Revenue Code at the rate of 30 percent of net profit before income tax. 16.3 Corporate income tax for another subsidiary is calculated on net income for the year after adding back certain expenses and deducting exempted income in compliance with the Revenue Code at the rate of 30 percent of net profit before income tax. The such subsidiary does not have income tax expenses due to investment promotional privileges for a period of 8 years from 2005 to 2012. 16.3 Corporate income tax for another subsidiary is calculated on net income for the year after adding back certain expenses and deducting exempted in compliance with the Revenue Code at the rates as follow : Profit before income tax expenses (Baht) 1 - 150,000 150,001 - 1,000,000 1,000,001 - 3,000,000 Over 3,000,000

Separate Financial Statement 2009 2008

The Company and subsidiaries’s contribution for the years ended December 31, 2009, and 2008, amounted to Baht 22 million and Baht 21 million, respectively.

Consolidated Financial Statement For the years ended December 31, 2009 2008

16.1 Corporate income tax for the Company is calculated on net income for the year after adding back certain expenses and deducting exempted income in compliance with the Revenue Code at the rate of 25 percent for profit under Baht 300 million and at the rate of 30 percent for over Baht 300 million, for the period from 2008 to 2010.

Separate Financial Statement For the years ended December 31, 2009 2008 346,631,063 13,983,365 273,225,116 216,804,630 27,447,088

370,348,279 13,334,282 268,039,654 222,095,503 33,986,477

Rate Exempted 15 % 25 % 30 %

17. DIVIDEND PAID On August 13, 2009, the board of directors of the Company approved a payment of interim dividend from 2009 results at Baht 0.13 per share amounting to Baht 66.30 million. The dividend was paid in September 2009. On April 8, 2009, the annual general meeting of the Company has approved the following transactions ; 1) To allot the retained earnings to be reserve for investment expansion amounting to Baht 35.62 million. 2) To allot the retained earnings to be reserve for general reserve amounting to Baht 35.62 million. 3) To declare dividends from the Company’s 2008 result at Baht 0.40 per share amounting to Baht 204 million of which the Company has paid the interim dividend in September 2008 at Baht 0.15 amounting to Baht 76.50 million. The dividend paid by cash at Baht 0.25 per share amounting to Baht 127.50 million on May 4, 2009. On August 8, 2008, the board of directors of the Company approved a payment of interim dividend from 2008 result at Baht 0.15 per share amounting totally Baht 76.5 million. The dividend was paid in September 2008. On April 18, 2008, the annual general meeting of the Company has approved a resolution to approve a cash dividend payment from its 2007 operations to the shareholders at the rate of Baht 0.52 per share amounting to Baht 265.2 million of which the interim dividend payment had been paid at the rate of Baht 0.20 per share amounting to Baht 102 million in September 2007. The Company paid the additional dividend at the rate of Baht 0.32 per share in cash amounting to Baht 163.2 million in May 2008. 18. lEgAl RESERVE According to the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10 percent of the registered share capital. The statutory reserve cannot be used for dividend payment.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008

19. MANAgEMENT BENEFIT ExPENSES The Company has changed the presentation of “Directors’ remuneration” to “Management benefit expenses”. The management benefit expenses represents the benefits paid to the Company’s management such as salaries and related benefit including the benefit paid by other means. The Company’s management is the persons who are defined under the Securities and Exchange Act. 20. BANK guARANTEES As at December 31, 2009, there were outstanding bank guarantees of the Company and its subsidiaries amounting to approximately Baht 56 million (As at December 31, 2008 : Baht 50 million), with the Company only has outstanding guarantees amounting to approximately Baht 45 million (As at December 31, 2008 : Baht 44 million), The guarantees were in respect of certain performance bonds as required in the ordinary course of business of the Company and its subsidiaries. 21. COMMITMENT AND CONTINgENT lIABIlITIES 21.1 Commitment 21.1.1 As at December 31, 2009, the Company and its subsidiaries have the commitments from long-term contracts which have the minimum amount to pay in the future as follows ; Minimum amount to be paid in the future (Million Baht) Period Not over 1 year Bangkok Aviation Fuel Services Public Company Limited Thai Aviation Refuelling Company Limited JP-One Assets Company Limited Total

27.09 2.47 14.84 44.40

Over 1 year Over 5 years Not over 5 years 48.70 2.58 63.25 114.53

77.17 305.93 383.10

Total 152.96 5.05 384.02 542.03

The Company has the principal contracts as follows ; 1. The Company has entered into the following rental agreements with Airports of Thailand Public Company Limited (AOT) a) Three-year pipeline system rental agreement used for the refueling operation to the Don Mueang Airport, dated September 19, 1986, renewable every three years until the end of the life of the fuel pipeline system. Since March 29, 2009, almost flight services at Don Mueang Airport have been moved to Suvanabhumi Airport. So that the Company had requested AOT to waive the pipeline system rental fee. Later AOT approved to waive the pipeline system rental fee effective from April 1, 2009 to December 31, 2009. Later the Company requested AOT to extend the waiving of the pipeline system rental fee and AOT approved to waive the pipeline system rental fee from January 1, 2010 until the Company start to use the pipeline system. b) Land and building in apron rental agreement at Don Mueang Airport for a period of one year from September 28, 2006 to September 27, 2007. The Contract has been renewed for another three-year period starting from September 28, 2007 to September 27, 2010. c) Rental agreement for space at Don Mueang Airport for a period of three years from September 19, 2007, to September 27, 2010. d) Land rental agreement at Suvanabhumi Airport for a period of twenty years from September 28, 2006 to September 27, 2026. e) Land in apron rental agreement for parking the refueling truck, at Suvanabhumi Airport for a period of three years since from the date of utilization of the land since October 1, 2006 and November 1, 2006 to September 30, 2009 respectively. The contract has been renewed for another three - year period starting from October 1, 2009 to September 30, 2012. f) Rental agreement for space in passenger building at the edge of the aircraft building, concourse C and concourse F, to use for the Company office at Suvanabhumi Airport for a period of three years from September 28, 2006 to September 27, 2009. The contract has been renewed for another three - year period starting from September 28, 2009 to September 27, 2012. 88

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

The Company has to pay annual rental fees to Airports of Thailand Public Company Limited as indicated in the agreements, and the aforesaid rental agreements additionally stipulates the transfer of the ownership of construction on leased land to the landlord and various conditions which the lessee must comply with. 2. The Company has entered into an agreement with Airports of Thailand Public Company Limited (AOT) whereby it has been granted a permission to provide into-plane services at Suvanabhumi Airport for a period of 20 years from the date the airport officially opens for service. The Company is to compensate AOT at the rate stipulated in the agreement, and has to comply with certain obligations. These obligations include entering into an agreement to rent land, erect buildings and certain structures on the land and transfer ownership of such construction to the Ministry of Finance immediately upon completion, without charge. They also include the installation of equipment and systems to be used in implementing the project and, at its own expense, maintaining such equipment and systems in good and workable condition throughout the term of the agreement. 3. The Company has entered a land lease agreement with the Treasury Department for a period of three years, as from January 1, 2009 to December 31, 2011, whereby the Company will have to pay rental and comply with various conditions indicated in the agreement. 21.1.2 The Company and its subsidiaries have entered into agreements with local companies under which they have commitments relation to the cost of equipment, supplementary engineering and design and service charges amounting to approximately Baht 22 Baht million (As at December 31, 2008 : Baht 18 million) with the commitments of the Company amounting to approximately Baht 14 million (As at December 31, 2008 : Baht 15 million) . 21.1.3 The Company has entered into an agreement with a local bank to guarantee credit facilities of subsidiaries to Baht 990 million and USD 8 million, the subsidiaries have already drawn down. The Company is obligated to comply with the terms stipulated in the agreement. A subsidiary has entered into an agreement with a local bank to guarantee credit facilities of a related company amounting to Baht 2 million (As at December 31, 2008 : Baht 6 million). Generally, the Company and its subsidiary’s guarantees are binding for as long as the underlying obligations have not yet been discharged by the subsidiary. 21.1.4 A subsidiary has been granted approval by Airports of Thailand Public Company Limited (transferred business from “New Bangkok International Airport Company Limited”) to operate the aviation fuel hydrant network services at Suvarnabhumi Airport, for a period of 30 years from the date of first operation of that company. The subsidiary is obliged to comply with certain conditions including the obligation to transfer the ownership of the hydrant refueling network including related supplies and spare parts for free of charge, and to pay a concession fee to Airport of Thailand Public Company Limited at a rate stipulated in the agreement of the subsidiary’s income before deducting expenses from the year of first operation. On April 3, 2008, Airport of Thailand Public Company Limited (A.O.T.) informed the subsidiary about the change of the calculation method of concession fee on the operation of the aviation fuel hydrant network services at Suvarnabhumi Airport to be collected from the subsidiary and required the subsidiary to pay additional fee for the year 2006 and 2007 for an amount of Baht 42.96 million. The subsidiary submitted a disputed letter to Airports of Thailand Public Company Limited for its consideration to charge the subsidiary according to the agreement. However, the subsidiary has not received advice for the additional fee for 2008 and 2009 from A.O.T. 21.2 Litigation On May 8, 2008, the Company and a subsidiary have been filed a lawsuit as co-defendant on a case that a group of plaintiffs who complained that they have been suffering from the evaporation of the JET A-1 from the Company’s storage tanks. The plaintiffs demand a compensation amounting to approximately Baht 15.3 million for the damage (excluding interest). The court had settlement of issues and considered to place mediation between the plaintiffs and the defendants but could not reach an agreement. The court made appointments for investigation of witnesses of the Company and the subsidiary between November 2009 and February 2010. On November 24, 2009, the plaintiffs withdrew the case of subsidiary and the Court ordered to dismiss the case accordingly. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008 (Unit : Baht)

22. FINANCIAl INSTRuMENTS Financial risk management and policies The Company and its subsidiaries are exposed to risks from changes in market interest rates and currency exchange rates and from nonperformance of contractual obligations by counterparties. The Company and its subsidiaries use certain derivative instruments to manage such risks and do not hold or issue derivative instruments for speculative or trading purposes. Interest rate risk The interest rate risk is the risk that future movements in market interest rates will affect the results of the Company’s and its subsidiaries’ operations and their cash flow. The Company and its subsidiaries’ exposure to interest rate risk related primarily to their deposits with and loans from banks and financial institutions. Such financial assets and liabilities carry interest at rates which vary with reference to the market rates. However, the Company and a subsidiary had entered into the interest rate swap agreement and USD/THB Cross Currency Swap agreement as described in note 13 to the financial statements. Foreign currency risk The Company and its subsidiaries’ exposure to foreign currency risk relates primarily to their trade debtors, payables and loan which are dominated in foreign currencies. However, the Company’s trade debtors are to be settled in Baht in the near future and the subsidiary has foreign currency deposit accounts which it utilizes to pay its foreign currency-denominated liabilities. As at December 31, 2009 a subsidiary has entered into a loan foreign currency hedging agreement that will be due quarterly to December 31, 2012, as the conditions set in the agreement for USD 4,800,000 (As at December 31, 2008 : USD 6,400,000) As at December 31, 2009 the Company and a subsidiary had foreign currency-denominated assets which were un-hedged amounting to USD 1,040,165 (As at December 31, 2008 : USD 794,243) Credit risk The Company is exposed to credit risk primarily with respect to trade accounts since the majority of services are provided to a limited number of customers. However, due to those customers’ creditworthiness, the Company does not anticipate material losses from its debt collection. Fair value Since the majority of financial assets are short-term, and that loans carrying interest at rates close to current market rates, the management believes that fair values of these financial assets and liabilities do not materially differ from their carrying values. 23. FINANCIAl INFORMATION BY SEgMENT The Company’s and its subsidiaries’ operations involve a single industry segment in refueling service at the airport and are carried on in the single geographic area in Thailand. As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area. 24. PROMOTIONAl PRIVIlEAgES A subsidiary was granted various tax privileges by the Board of Investment January 4, 2005, for the transportation of petroleum products by pipeline system. Subject to certain imposed conditions, the privileges include equipment as approved by the Board and exemption from corporate income tax on profits from the promoted activity for a period of 8 years commencing from the date income is first earned from the promoted activity, capped at 100 percent of the amount invested by the subsidiary, excluding land costs and revolving funds. The value of the corporate income tax exemption according to the promotional privileged certificate thus amounts to not more than Baht 435,670,000. The subsidiary has adjusted the investment amount which excludes cost of land and working capital as at the date on which the operation of the promoted project commences, to not over Baht 704,498,240.24 as approved by the Board of Investment on May 8, 2008. 25. REClASSIFICATION 25.1 Certain amounts in the financial statements for the year ended December 31, 2008 have been reclassified to conform to the current classification but with no effect to previously reported net income or shareholders’ equity. The reclassifications are as follow: 90

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Consolidated financial statements

Balance sheet as at December 31, 2008 Cash and equivalents Trade accounts receivable - related companies Amounts due from and advance to related companies Other current assets - others Restricted fixed deposits with finance institutions Property, leasehold improvement and equipment - net Computer softwares - net Other non-current assets Retention Deffered income Other non-current liabilities

Separate financial statements

As reclassified่

As previously reported

As reclassified่

573,796,489 151,078,662 392,547 10,759,346 5,462,258 5,401,412,109 20,583,273 9,824,988 5,601,500

363,494,810 150,291,945 1,026,356 10,912,254 215,763,937 5,422,613,514 9,206,856 586,500 5,000,000 15,000

4,240,726 9,876,792 3,129,210,117 18,694,628 9,716,489 741,746

As previously reported 4,087,818 10,029,700 3,148,522,878 9,098,356 726,746 15,000 (Unit : Baht)

Consolidated financial statements

Statement of income for the years ended December 31, 2008 Cost of services Administrative expenses Directors’ remuneration Management benefit expenses

Separate financial statements

As reclassified่

As previously reported

As reclassified่

As previously reported

922,403,493 271,164,373 74,211,343

941,269,445 314,489,714 12,020,050 -

779,112,708 240,813,257 72,085,737

797,978,660 282,012,992 12,020,050 -

25.2 Certain transactions in the cash flows statements for the year ended December 31, 2008 have been reclassified to conform to the classifications in the year ended December 31, 2009. 26. glOBAl ECONOMIC CRISIS The U.S. financial crisis in mid 2008 has brought about many fluctuations in the money market, equity market and derivative market; the serious economic downturn and financial instability have spread across all regions of the world, as well as having an impact on Thailand’s finance and economy. The crisis above has a material effect on business operations and finances, including asset values that could substantially decline. It is not clear when the fluctuations of the world economy will return to normal state. These financial statements have been prepared on the basis of the estimates and assumptions that the Company sees as appropriate to the current circumstance. 27. CORRECTION OF ERROR In the first quarter 2009, the Company has corrected the error recording of Minority interest as shown in the consolidated financial statement. Due to the Company charged the dividend paid to minority shareholder by two subsidiaries in 2007 and 2008 directly to the Company’s “unappropriated retained earnings” instead of “Minority interest”. The Company has corrected the error by applying retrospective restatement as follows :-

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Notes To Financial Statements

For The Years Ended December 31, 2009 and 2008 (Unit : Baht)

AUDITOR’S FEE

Consolidated financial statements Before restated Balance sheet as at December 31, 2007 Retained earnings unappropriated Minority interest Balance sheet as at December 31, 2008 Retained earnings unappropriated Minority interest

Adjusted amount

After restated

960,136,163 394,055,589

12,402,117 (12,402,117)

972,538,280 381,653,472

1,030,490,659 165,727,690

30,811,963 (30,811,963)

1,061,302,622 134,915,727

1. Audit Fee Last year the Company and its subsidiaries paid audit fee to Dharmniti Auditing Co., Ltd., the Company’s auditor, in the amount of Baht 1,257,487 (including out of pocket expenses for the financial year, ended December 31, 2009). Last year the Company paid audit fee in auditing the employees’ provident fund to Dharmniti Auditing Co., Ltd in the amount of Baht 60,000.

28. EVENTS AFTER THE BAlANCE SHEET DATE On February 18, 2010, the board of directors of the Company has approved the following transactions ; 1) To allot the retained earnings to be reserved for investment expansion amounting to Baht 37.35 million. 2) To allot the retained earnings to be reserved for general reserve amounting to Baht 37.35 million. 3) To declare dividends from the Company’s 2009 result at Baht 0.43 per share amounting to Baht 219.30 million of which the Company has paid the interim dividend in September 2009 at Baht 0.13 amounting to Baht 66.30 million. The rest of dividend will be paid by cash at Baht 0.30 per share amounting to Baht 153.00 million on May 14, 2010.

2. Non-audit fee Last year the Company had no non-audit fee paid to Dharmniti Auditing Co., Ltd., the Company’s auditor.

29. APPROVAl OF FINANCIAl STATEMENTS These financial statements were approved by the Company’s authorized of directors on February 18, 2010.

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Report of the Audit Committee

on Corporate Governance for the year 2009

REPORT OF THE AUDIT COMMITTEE ON CORPORATE GOVERNANCE FOR THE YEAR 2009 (TRANSLATION) To : The shareholders of Bangkok Aviation Fuel Services Public Company Limited The Board of Directors’ meeting No.4/2009, on August 13, 2009 appointed the existing Audit Committee comprised of 3 independent directors i.e. Mr. Pachara Yutidhammadamrong as Audit Committee Chairman, Mr. Visut Montriwat and Mr. Sumon Surathin as Audit Committee Directors, for another 3 years term, effective from September 27, 2009, with Mrs. Mayuree Nalinwong served as the secretary of the Audit Committee. Every Audit Committee Directors are qualified according to the Audit Committee Charter and in line with the Regulations of the Office of the Securities and Exchange Commission (SEC). The Audit Committee fulfilled the responsibility according to the scope, duties and responsibilities assigned by the Board of Directors that complied with the Regulation of the Stock Exchange of Thailand. There were 5 Audit Committee meetings in the year 2009 and 2 Audit Committee meetings in 2010 until the reporting date, totally 7 Audit Committee meetings. Each Audit Committee Director attended every meeting with management executives, internal auditors, lawyer, compliance officer, and external auditors in relating issues, which could be summarized as follows : 1. Reviewed the interim and annual financial statements of 2009, which reviewed and audited by external auditors and by questioning and listening to the management and the external auditor’s clarifications, concerning the correctness and completeness of the financial statements, material changing accounting items, risks and information disclosure, acknowledging the financial audit plan of the external auditors for the year 2009, and attended 2 meetings with the external auditors with no management attended. The Audit Committee agreed with the external auditors that the financial statements were correct adhering to the general accepted accounting principles. 2. Reviewed the operation information and the internal control system, to evaluate the sufficiency, appropriateness and effective ness of the internal control system, by evaluating the adequacy of internal control system complying with the Practice of the Office of the SEC and considered the internal audit report for the year 2009 according to the approved internal audit plan that covered important workflows of the Company and found no weakness or significant deficiency, appropriate asset safeguarding, correct information disclosure. Furthermore, the Audit Committee listened to the external auditors about the internal control system and had opinion in line with the external auditors that the Company had good internal control system and the system to monitor the operation of its subsidiaries that was appropriate and effective. In addition, the Company had the internal control and risk management system under the Risk Management Framework, benchmarking with the international standard of COSO-ERM (The Committee of Sponsoring Organizations of the Treadway Commission-Enterprise Risk Management), which related to the operation and management procedure about internal environment, objective setting, event identification, risk assessment, risk response, management control activities, information and communication measure, and monitoring system 3. Reviewed the internal audit, by considered the mission, scope of work, duties and responsibilities, manpower, training plan, budget and independency of the Internal Audit Division. The Audit Committee also annually reviewed and approved the amendment of the Internal Audit Charter to be appropriate and up to date, as well as approved internal audit plan for the year 2009 that linked to corporate risk and evaluated the performance of the Head of Internal Audit Division by using Key Performance Indicators (KPIs). The Audit Committee had opinion that the Company had the internal control that was appropriate, effective, in line with the objectives and risks of the Company, independent, and also had developed the audit quality in personnel training and audit work. 4. Reviewed compliance with the Securities and Exchange Acts, Regulations of the Stock Exchange of Thailand (SET), and any other relevant laws, including the compliance with the Company’s requirement and obligations to external parties. The Audit Committee did not find any significant incompliance to the law, Regulations and the Company’s obligations to external parties. 5. Reviewed the risk management process, to be link with the internal control system to manage the overall risks of the Company, by reviewed the risk management process to be in line with Risk Management Policy, as well as Strategic Plan and Risk Management Manual. The Audit Committee also got reports from the Risk Management Committee quarterly. The Audit Committee had the opinion that the Company had risk management process that was appropriate, sufficient, and effective, had appropriate 94

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

crisis management plan that fit with the situation, reviewed the corporate objectives, risk factors, Key Risk Indicators in corporate and functional levels, and Risk Tolerance that aligned with 2009-2012 strategic plan, which adjusted to be appropriate and fitted with the business environment. In addition, the Company had measures in managing risk arising from economy and politic continually since 2008 i.e. revenue increasing, cost reduction, and asset management measures. Also, the Audit Committee gave opinions and recommendations to the Board of Directors quarterly. 6. Considered the connected transactions or transactions that may have conflict of interests to comply with the law and Regulation of the Office of the SEC. The Audit Committee had opinion that every transactions were reasonable and the most beneficial to the business of the Company and were disclosed correctly and completely. In addition, the Company set its connected transaction rule and trained such matter by Compliance Section continuously. 7. Reviewed the Audit Committee Charter annually to comply with the Regulations of the Office of the SEC and the SET. 8. Considered the overall assessment and self-assessment of the Audit Committee. The evaluation result revealed that the Audit Committee’s performance completely fulfilled according to its Charter and complied with the good principles, enhancing the good corporate governance effectively. 9. Conducted the Report of the Audit Committee’s Activities and proposed to the Chairman of the Board of Directors for every Audit Committee meetings to comply with Best Practice Guideline for Audit Committee. 10. Considered Appointing the External Auditors and their audit fee for the Year 2010 and proposed to the Board of Directors to ask for the approval of the Annual Shareholder’s Meeting for the year 2010. The Audit Committee considered appointing the external auditors by evaluating their skill, knowledge, competence, audit team, quality of audit work in 2009, fee, and independency in compliance with the Practice of the Office of the SEC. Also, the Audit Committee required them to submit independency certification letter. According to the selection criteria, the Audit Committee proposed appointing Mr. Pichai Dachanapirom, Certified Public Accountant Registration number 2421, or Ms. Chantra Wongsri - Udomporn, Certified Public Accountant Registration number 4996, or Ms. Wannisa Ngambuatong, Certified Public Accountant Registration number 6838, or Mr. Thanawut Piboonsawat, Certified Public Accountant Registration number 6699 of Dharmniti Auditing Co., Ltd. to serve as the Company’s external auditors for the year 2010, with the audit fee of 750,000 Baht. The Audit committee has the opinions regarding the external auditors as follows : • In the past financial year, the external auditors performed their duties with knowledge, professional competence satisfied work quality as well as to have continuation in audit work. • The proposed audit fee, excluding out of pocket expenses, was the same rate as that of 2009. • There was in compliance with Regulation of the Office of the SEC with regards to the changing of the financial statements signatory external auditor every 5 years, while the Company used the service of Dharmniti Auditing Co., Ltd. since 2009. • The external auditors had independency, with no relation to the Company and its subsidiaries. In summary, the Audit Committee had fulfilled the responsibility of the Audit Committee Charter that was approved by the Board of Directors, by using their knowledge, competence, and having independency, as well as giving opinions and recommendations to the management and the Board of Directors continually. Furthermore, the Audit Committee had opinion that the Company disclosed financial and operation information correctly, completely, had appropriate and effective internal control, internal audit, and risk management, complied with laws, regulations and obligations, conducted the connected transactions correctly, performed duties in compliance with the Good Corporate Governance principles, developed the operation systems to be more qualified and fit with the changing business environment on a continuing basis, and also had selection criteria to propose the independent persons to serve as the external auditors and considered their audit fee. February 12, 2010 On behalf of the Audit Committee

Mr. Pachara Yutidhammadamrong Mr. Pachara Yutidhammadamrong Chairman of the Audit Committee Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Summary of the Opinion Concerning Adequacy and Appropriateness Internal Control System for the Year 2009 SUMMARY OF THE OPINION CONCERNING ADEQUACY AND APPROPRIATENESS OF THE INTERNAL CONTROL SYSTEM FOR THE YEAR 2009 The Company’s Board of Directors has appointed the independent Audit Committee to review the Company’s internal control system to ensure the system’s appropriateness and effectiveness in protecting the assets of the Company and its subsidiaries.

On February 18, 2010, the Company’s Board of Directors and Audit Committee had a meeting and agreed with the opinions of the Audit Committee as indicated by the evaluation checklist of the internal control system for the year 2009 that the Company’s internal control system and monitoring system for the Company’s subsidiary companies were appropriate and effective. In addition, the Company had the internal control and risk management system under the Risk Management Framework, benchmarking with the international standard of COSO-ERM (The Committee of Sponsoring Organizations of the Treadway Commission-Enterprise Risk Management) regarding Internal Environment, Objective Setting, Event Identification, Risk Assessment, Risk Response, Management Control Activities, Information and Communication Measure, and Monitoring system, which related to the operation and management procedure as follows :1. INTERNAl ENVIRONMENT

The Company has training courses for its employees about Corporate Governance and Risk Management annually. The Company has regulation prohibiting its management and employees to act with conflict of interests with the Company which specifying in Code of Conduct and Employees’ regulation Manual. The Company set up its core values in line with the Company’s vision, mission, core competencies and objectives to ensure that the employees realized in it and conduct their good behavior to alloy into the organizational culture behavior, enhancing work efficiency. The Company has also used Following Best Practice, one of its core values, as the criteria in annual performance evaluation of its management and employees. The Company amended its Corporate Governance Policy regarding Regulations of Nominating Committee and Remuneration Committee to comply with the Regulation of the Office of the Securities and Exchange Commission (SEC) and to enhance work efficiency. The Company also amended Risk Management Committee Charter to be clearer. Furthermore, on - line code of conduct test was modified to extend more coverage of the Company’s Code of Conduct. The Company amended the regulation in related transactions and had audit mechanism to be in line with the related regulations and good internal control system. And to improve work efficiency, the followings had been adjusted ; Regulations Annual Report 2009

In addition, from Corporate Governance Report Survey of Thai Listed Companies in 2009 conducted by Thai Institute of Directors (IOD), the Company received Excellent Corporate Governance Scoring. Moreover, the Company received honorable awards such as National Award of the Outstanding for Enterprise of Safety Operations, Occupational Health and Working Environment in 2009. 2. OBJECTIVE SETTINg The Company set up the Company’s strategic plan, with clear and measurable goals, established Key Performance Indicators (KPIs), and the Company Objectives to be in line with Strategic Goals and risk appetite, using the “Balanced Scorecard” concept which covered various business aspects such as finance, customer, Internal process, learning and development. And the Company also set up Key Risk Indicators (KRIs) on corporate and functional levaels, Risk Tolerance, and Quality Objective. In addition, the Company revised the strategic plan, year 2009 - 2012, to be more appropriate and align with changing internal and external business environment, revised its objectives to align with its goals according to the strategic plan, year 2009 - 2012, established the monitoring and reporting system of strategic plan to the Board of Directors every 6 months, established budget system as the operation indicator and control, as well as used Activity Based Costing (ABC) and Activity Based Management (ABM) to assist in analyzing and managing it costs to be more efficient. 3. EVENT IDENTIFICATION

The Company had arranged organization chart, by emphasizing on functional segregation, and given importance on Good Corporate Governance, by having policies and manual in important matters i.e. Corporate Governance Policy, Risk Management Policy, Social Responsibility Policy, Quality Policy, Safety, Occupational Heath and Environmental Policy, Code of Conduct for etc. The Company’s Code of Conduct is the discipline that the directors and employees must adhere to, and to ensure such compliance, the Company requires every management and employees to conduct on - line test, which they have to pass 80% within the specified testing time.

for the Admission of New User, Regulations for the Fuelling Operations Committee, Employee’s regulation Manual, Manual of Authorities, Strategic Planning and Risk Management Manual, Emergency Operation Manual, Employee Self Service Manual, Computer Network Usage Regulation, Competency Model Manual, Employee Performance Evaluation Criteria, Lost Asset Procedure Guideline for etc.

Bangkok Aviation Fuel Services Plc.

The Company used the updated corporate and functional levels objectives and procedures to identify the events or risk factors that may occur, suitably and continually, by doing workshop with the management and related employees and considering internal and external risks of the Company i.e. financial risk, risk from operation, politic, and economy. Furthermore, the Company revised Key Risk Indicators (KRIs) in corporate and functional levels, trigger point and risk tolerance, which were early warning system to align with the Company’s goals, according to the strategic plan, year 2009 - 2012, and to promptly tackle problems at an early stage. The Company also has contingency plans in normal situations and crisis management, has monitoring and reporting system of risk management work plan to the management, Risk Management Committee, Audit Committee and the Board of Directors for their acknowledgement continually. 4. RISK ASSESSMENT The Company has risk assessment through qualitative and quantitative risk indicators/risk factors, by dividing into corporate and functional risks. Furthermore, the Company assesses the likelihood and impact of each risk and prioritized the risk importance by classifying into high, medium and low risk. In addition, the Company has assessed its residual risk, which is the current risk before having additional risk control plan, and decreased the target risk to make the risk control plan be appropriate with the Company’s acceptable level. 5. RISK RESPONSE The Company has systematic risk management process to reduce the chance in occurring risk and impact to be in an acceptable level. The Company also has continual risk management together with internal control measure to fit the changing risk continually and managed the high risk first. The Company has used the following risk management strategies. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Summary of the Opinion Concerning Adequacy and Appropriateness Internal Control System for the Year 2009 1. Treat - to set additional measures to reduce the risk to an acceptable level. 2. Take - to take risk that may occur without having any measures as the Company considers that it would have high operation cost if setting, so it should take the risk. 3. Transfer - by transferring risk to others for example : arrange insurances, outsource employees, for etc. 4. Terminate - by not doing activity that may cause risk for example : discontinuing some activities that do not generate revenue, for etc. The Company has risk management procedure, by clearly setting the responsible person and timeline, for example control measures of the risk arising from economic and political factors, which the Company has continually acted and evaluated since 2008, comprising of : • Revenue increasing measures such as selling non - in use assets and providing additional services to its subsidiaries. • Cost reduction measures such as reducing the management’s salary and welfare of the management and employees. • Asset Management measures such as aborting golf member and E - Commerce Procurement System. Furthermore, to ensure that each department follows the risk management measures as planned, the Risk Management Champion Project has been set up.

8. MONITORINg SYSTEM In 2009, the Company had 6 Board of Directors’ meetings and monthly management meeting to consider and monitor operation results to ensure achieving the specified goal. The Company has system report to the Board of Directors quarterly, the risk management report and Key Risk Indicators status report, has system to report when Key Risk Indicators affect Trigger Point and not in the specified Risk Tolerance. If the performance of the Company differed from the specified goal, the Board of Directors would assign the management to rectify and follow up continuously via Key Performance Indicators. In addition, the Company has system to follow up and report its performance comparing to the strategic plan every 3 months by Company Strategic Project Committee and to the Board of Directors every 6 months to ensure that the goal and objectives of the Company are reached. Furthermore, to enhance work efficiency, the Board of Directors requires the sub - committees to evaluate their performance. In 2009, the Company had 5 Audit Committees’ meetings. The Audit Committee fulfilled the responsibility according to the Audit Committee Charter i.e. review the financial statements reporting, operation information, internal control and internal audit, compliance with the law, commitment and connected transaction regulation, risk management process, asset safeguarding,

6. MANAgEMENT CONTROl ACTIVITIES The Company’s Board of Directors has appointed sub - committees to oversee specific areas of management as assigned. Such committees have fully performed their duties within the scope, authority and responsibilities as assigned by the Board of Directors. The Company has issued manual of authorities in each level, operation manuals, and job descriptions, which clearly specified and are in written manner. The manuals are updated regularly to ensure efficiency. The duties and responsibilities segregation about approved authority, accounting records and information, and asset safeguarding are clearly segregated. The Company has regulation on connected transaction, in line with the Regulations of the Office of the SEC, has follow up measure to ensure that the Company comply with its regulation and related law, by Legal and Securities Division, Internal Audit Division and Quality Management System Division for etc. In addition, the Company has set up the Regulations in monitoring, supervising and setting direction for the Company’s subsidiaries and direction for persons who are nominated as director or management, by assigning them to report the performance of such companies to the management and the Board of Directors continually. The Company also realizes the importance of its subsidies regarding internal control and risk management by auditing their performance and giving them consultation on risk management for etc. 7. INFORMATION AND COMMuNICATION MEASuRE The Company has prepared and issued the meeting agendas with adequate information to the Board of Directors 7 days prior to Board of Directors’ meeting. The Company has regularly arranged the assessment of the Board of Directors’ meeting efficiency. The minutes of the Board of Directors has detail that the shareholders can review the appropriate activities of the Board of Directors. The accounting records are filed under various categories in compliance with applicable laws, and also has back up system. There were meetings between the Audit Committee, external auditor, and management regarding the external auditor report, material events of the Company and its subsidiaries, internal control and connected transactions disclosure.

appoint external auditors, consider connected transactions, review Audit Committee Charter, conduct overall assessment and self assessment, evaluate the performance of Head of Internal Audit Division, consider the independency of Internal Audit Division, approve budget and man power of Internal Audit Division, and approve internal audit plan, by using risk - based approach to ensure that the Company has suitable internal control for risk management. Internal Audit Division has assessed internal control system and risk management system of the Company and its subsidiaries, and made recommendations in various aspects to ensure that the operation of the Company and its subsidiaries would reach the specified objectives. The Company’s external auditor is Mr.Pichai Dachanapirom of Dharmniti Auditing Co., Ltd. who is approved by the Office of the SEC and is the external auditor for the consolidated financial statements of the Company and its subsidiaries and the separate financial statements of the Company for the year ended December 31, 2009. The external auditor studied and evaluated the efficiency of the internal control system for the benefit of setting scope, testing method and audit period, and found no significant weakness in the internal control system in accounting that may have material effect on financial statements. However, the external auditor did not audit every accounting item, but used only testing method for the audit objective, not for giving opinion on the efficiency of the internal control system of the Company.

Furthermore, the Company has efficient and effective communication channel which can communicate throughout the Company and its subsidiaries. The important information would pass from the management to employees and from employees to the management. For external communication channel, the Company has an investor relations section to disseminate information to investors and external parties. 98

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Connected Transactions CONNECTED TRANSACTIONS FOR 2009 1. Transactions between BAFS and connected persons who may have conflict of interests

Name

Type of Transactions

Relationship

Amount ( Exclude VAT)

1. Thai Airways 1. Aviation fuel storage, fuel and defuel service 1. THAI is major shareholder of BAFS International Plc. at Don Mueang Airport and Suvarnabhumi Airport 2. ACM Narongsak Sangapong (THAI) (ended Nov 30, 2009), Mr. Tummasak Chitiwong (ended Nov 3, 2009), Mr.Chanchai Singtoroj (ended Apr 8, 2009), Flying Officer Norahuch Ployyai (since Apr 8, 2009), BAFS’s directors are the executives of THAI

As specified in the agreed contract and general business conditions 257.0 Mil.Baht

2. Collection of service fee for aviation fuel transport through Hydrant System at Suvarnabhumi Airport 3. Customs Service Fee

As specified in the agreed contract and general business between BAFS, users, and Thai Aviation Refuelling Service Co., Ltd.

97.7 Mil.Baht

As specified in the agreed contract to full-service users, which is normal business and support normal business transactions that have general business condition

2. Chevron (Thailand) Ltd. 1. Aviation fuel storage, fuel and defuel service at Mr.Tanachai Vienravee Don Mueang Airport and Suvarnabhumi Airport BAFS’s director is the executive of Chevron (Thailand) Ltd. 2. Collection of service fee for aviation fuel transport through Hydrant System at Suvarnabhumi Airport

As specified in the agreed contract and general business conditions 287.0 Mil.Baht

As specified in the agreed contract to full-service users, which is normal business and support normal business transactions that have general business condition

3. Customs Service Fee

3. The Shell Company 1. Aviation fuel storage, fuel and defuel service at Mr. Thepparit Vesurai of Thailand Ltd. Don Mueang Airport and Suvarnabhumi Airport (ended Feb 1, 2009), Mr.Ath Hemvijitraphan 2. Collection of service fee for aviation fuel transport (since Mar 6, 2009), through Hydrant System at Suvarnabhumi Airport BAFS’s directors are the executives of The Shell Company of Thailand Ltd. 3. Customs Service Fee 4. PTT Plc. 1. Aviation fuel storage, fuel and defuel service at 1. Ministry of Finance is indirect Don Mueang Airport and Suvarnabhumi Airport major shareholder of BAFS and major shareholder of PTT Plc. 2. Mr.Tevin Vongvanich (since Apr 8, 2009), BAFS’s director is the executive of PTT Plc. 2. Collection of service fee for aviation fuel transport through Hydrant System at Suvarnabhumi Airport 3. Aviation fuel and defuel service at Samui and Sukothai Airports 4. Other expense (gas to refuel the Company’s vehicles)

100

Unit Price

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

Outstanding Balance as of Dec 31, 2009

Continuation of Transaction

24.7 Mil.Baht

9.7 Mil.Baht -

26.6 Mil.Baht

As specified in the agreed contract and general business between 124.0 Mil.Baht BAFS, users, and Thai Aviation Refuelling Service Co., Ltd.

11.4 Mil.Baht -

As specified in the agreed contract and general business conditions 186.43 Mil.Baht

19.0 Mil.Baht

As specified in the agreed contract and general business between BAFS, users, and Thai Aviation Refuelling Service Co., Ltd.

7.7 Mil.Baht

76.4 Mil.Baht

As specified in the agreed contract to full-service users, which is normal business and support normal business transactions that have general business condition As specified in the agreed contract and general business conditions 315.3 Mil.Baht

As specified in the agreed contract and general business between 136.1 Mil.Baht BAFS, users, and Thai Aviation Refuelling Service Co., Ltd. As specified in the agreed contract and general business conditions 17.1 Mil.Baht General business condition, Actual use

Bangkok Aviation Fuel Services Plc.

2.9 Mil.Baht

29.4 Mil.Baht

12.8 Mil.Baht

1.7 Mil.Baht 0.3 Mil.Baht

Annual Report 2009

101

Connected Transactions

Name

Type of Transactions

Volume

Relationship

5. Airports of Thailand Plc. 1. Lease for Fuel Pipeline, Building and Area 1. Ministry of Finance is indirect (AOT) Don Mueang Airport major shareholder of BAFS and 1. Fuel Pipeline Lease major shareholder of AOT (The lease payment was waived during Apr 1, 2009 - Dec 31, 2009) 2. Lease for office building and inside parking apron 2. Mr.Serirat Prasutanond 3. Lease outside parking apron BAFS’s director is the executive of AOT Suvarnabhumi Airport 1. Concession fee for Into-plane Service 2. Lease outside parking apron 3. Lease for area inside passenger building 4. Lease for area for parking dispensers and refuellers inside apron Chiang Mai Airport 1. Lease outside parking apron 2. Utility and other charges of AOT 3. Donation for building Buddha image and pavilion at Suvarnabhumi Airport

6. Ministry of Finance Lease for office building and land at Don Mueang Airport Indirect major shareholder of BAFS 7. Thai Petroluem Pipeline 1. Lease of Land, Building, Utility Service Ministry of Finance is indirect Co., Ltd. (THAPP) Don Mueang Airport major shareholder of BAFS and THAPP 1. Lease of Land and Building 2. Utility Service Suvarnabhumi Airport 1. Lease of Land and Building 2. Utility Service 2. Water for fire suppression system, water and electricity

Outstanding Balance as of Dec 31, 2009

2.5 Mil.Baht

Continue

8.7 Mil.Baht 0.01 Mil.Baht

Continue Continue

20.5 Mil.Baht 0.5 Mil.Baht -

0.3 Mil.Baht -

Continue Continue -

Continue

115 Baht / sqm / month 85 Baht / sqm / month

0.06 Baht / litre 60 Baht / sqm / month 450 Baht / sqm / month 150 Baht / sqm / month

216.8 5.3 0.7 3.1

Mil.Baht Mil.Baht Mil.Baht Mil.Baht

0.01 Mil.Baht 4.0 Mil.Baht 0.1 Mil.Baht

7.0 Mil.Baht

As specified in the agreed contract and general business conditions As specified in the agreed contract and general business conditions, Actual Use

0.9 Mil.Baht 1.3 Mil.Baht

3.7 Mil.Baht 2.5 Mil.Baht 0.2 Mil.Baht

0.1 Mil.Baht

8. Dhipaya Insurance Plc. 1. Insurance on Company Assets Ministry of Finance is indirect and Third-Party Liabilities major shareholder of BAFS and Dhipaya

As specified in the agreed contract and general business conditions

11.6 Mil.Baht

As specified in the agreed contract and general business conditions

0.9 Mil.Baht

1% of amount used each quarter by TARCO

8.8 Mil.Baht

555.8 Mil.Baht 0.5 Mil.Baht

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

As specified in the agreed contract and general business conditions

2. Car Insurance and Car Casualty Civerage

2. Connection of facilities with Hydrant system 2. M.R. Supadis Diskul, BAFS’s executive is the executive of TARCO 3. Lease for office building - Lease for canteen area at Suvarnabhumi’s Depot - Utility charges

870 Mil.Baht $ US 8 Mil.

82.22 sqm

450 Baht / sqm / month (not include property and land tax) 30,000 Baht / month

Bangkok Aviation Fuel Services Plc.

Continuation of Transaction

7 Baht / sqm / month General business condition, Actual use

9. Thai Aviation Refuelling 1. Guarantee Fee 1. BAFS is major shareholder Co., Ltd. (TARCO) of TARCO

102

Amount ( Exclude VAT)

Unit Price

0.4 Mil.Baht

Continue Continue Continue Continue

Continue Continue

Continue Continue Continue

0.1 Mil.Baht

Continue

2.0 Mil.Baht

Continue

51.8 Mil.Baht

Continue

Annual Report 2009

103

Connected Transactions

Name

Type of Transactions

4. 5. 6.

Computer network service Consult service for application program Provision of stock account system and collection service

Amount ( Exclude VAT)

Unit Price

Outstanding Balance as of Dec 31, 2009

Continuation of Transaction

11,000 Baht / month 52,000 Baht / month 464,200 Baht / month (May 1, 2008 - Apr 30, 2009) 478,146.60 Baht /month (May 1, 2009-Apr 30, 2010) As agreed fee + 12.5% As agreed price As agreed rate As agreed rate As agreed rate As agreed rate As agreed rate As agreed rate As agreed rate

At cost + 12.5%

5.4 Mil.Baht

2. Telephone system service 2. Mr. Jarern Pavarojkit, BAFSâ&#x20AC;&#x2122;s executive is the executive of IPS

Actual Use

As agreed rate

0.005 Mil.Baht

3. Management service

As agreed fee + 12.5% As agreed rate

2.1 Mil.Baht

4. Legal consulting service

0.01 Mil.Baht

1% of amount used each quarter Long - Term by JP-One Loan 120 Mil. Baht

0.4 Mil.Baht

0.1 Mil.Baht

Continue

0.01 Baht / liter / month

8.6 Mil.Baht

1.1 Mil.Baht

Continue

530,000 Baht / month

6.4 Mil.Baht

Continue

266.70 Baht / sqm / month (not include property and land tax)

0.4 Mil.Baht

Continue

0.03 Mil.Baht

0.01 Mil.Baht

Continue

10. Intoplane Services Co., Ltd. 1. Aviation refuelling service employment 1. BAFS is major shareholder of IPS (IPS)

11. JP-One Asset Co., Ltd 1. Guarantee Fee 1. BAFS is major shareholder of JP-One (JP-One) 2. Lease for receiving pipeline system 2. M.R. Supadis Diskul, at Suvarnabhumi Airport BAFSâ&#x20AC;&#x2122;s executive is the executive of JP-One 3. Lease for Jet-A1 Depot at Suvarnabhumi Depot Area 4. Lease for office building Don Mueang Airport 1. Lease of Office Building 2. Utility Service

Annual Report 2009

7. Management service 8. Standard design for organization and website service 9. Legal consulting service 10. Web hosting services and website maintenance 11. IT performance appraisal service 12. Public relations service 13. Safety and occupational heath consulting service 14. Training service 15. Quality assurance and technical training in aviation fuel transporting service

104

Volume

Relationship

Bangkok Aviation Fuel Services Plc.

JET A-1 volume transporting through pipeline system

0.1 Mil.Baht 0.6 Mil.Baht 1.9 Mil.Baht

0.01 Mil.Baht -

3.8 Mil.Baht

3.8 Mil.Baht 0.1 Mil.Baht

0.1 Mil.Baht

0.1 Mil.Baht 0.1 Mil.Baht 0.1 Mil.Baht 0.06 Mil.Baht 0.06 Mil.Baht 0.03 Mil.Baht 0.03 Mil.Baht

0.02 Mil.Baht 0.1 Mil.Baht 0.1 Mil.Baht 0.05 Mil.Baht 0.03 Mil.Baht 0.02 Mil.Baht

Continue

94 sqm

Actual Use

As agreed rate

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Continue Continue Continue

Continue Continue Continue Continue Continue Continue Continue Continue Continue Continue

105

Connected Transactions

Name

Type of Transactions

Volume

Relationship

Suvarnabhumi Airport 1. Lease of Office Building

Amount ( Exclude VAT)

Unit Price

Outstanding Balance as of Dec 31, 2009

39.2 sqm

450 Baht / sqm / month (not include property and land tax )

0.3 Mil.Baht

2. Utility Service 5. Guarantee for Office Rental Fee 6. Management service 7. Legal consulting service 8. Safety and occupational heath consulting service 9. Marketing consulting service 10. ISO 9001 : 2000 consulting service 11. Risk management service

Actual Use

As agreed rate

3 times of monthly rental fee As agreed rate + 12.5% As agreed rate As agreed rate As agreed rate As agreed rate As agreed rate

0.04 Mil.Baht 0.1 Mil.Baht 3.8 Mil.Baht 0.2 Mil.Baht 0.02 Mil.Baht 0.2 Mil.Baht 0.02 Mil.Baht 0.02 Mil.Baht

0.02 Mil.Baht 0.02 Mil.Baht 0.002 Mil.Baht 0.1 Mil.Baht 0.02 Mil.Baht

12. Fuel Pipeline 1. Lease for aviation fuel receiving pipeline system Ministry of Finance is indirect Transportation Ltd. (FPT) major shareholder of BAFS and FPT 2. Lease for land and office - Lease for land - Lease for office building

21.5% of FPT’s revenue from JET A-1 transporting (before discount and tax)

1.8 Mil.Baht

8,144 sqm 1,458 sqm

Rental charges for Department of Treasury for plus 5% 300 Baht / sqm / month.

1.2 Mil.Baht

Continuation of Transaction

Continue

Continue Continue Continue Continue

0.2 Mil.Baht

Continue

5.2 Mil.Baht

Continue

405.0 Mil.Baht

Continue

4.1 Mil.Baht

Continue

3. Assistance in debt restructuring 1% per annum according to the second agreement of debt restructuring

- Long term loan and long term receivable - Interest income

2. Transactions between Thai Aviation Refuelling Co., Ltd. (Subsidiary) and connected persons who may have conflict of interests

Name

Type of Transactions

1. Airports of Thailand Plc. 1. Permission for Operation of the 1. Ministry of Finance is indirect (AOT) Hydrant Pipeline Network major shareholder of BAFS and major shareholder of AOT 2. Mr. Nirand Teeranatsin Mr. Chayakorn Aksharamat (since Oct 12,2009). 2. Lease for land at Suvarnabhumi Airport for TARCO’s directors are the laying equipments and hydrant pipeline controlling persons of AOT 3. Lease for room inside passenger building at Suvarnabhumi Airport for office building

106

Annual Report 2009

Volume

Relationship

Bangkok Aviation Fuel Services Plc.

Amount ( Exclude VAT)

Unit Price

2% per annum of TARCO’s revenue before deduct any expenses

11.12 Mil.Baht

Outstanding Balance as of Dec 31, 2009

11.12 Mil.Baht

Continuation of Transaction

Continue

121.20 sqm

60 Baht / sqm / month

0.10 Mil.Baht

0.008 Mil.Baht

Continue

136.58 sqm

450 Baht / sqm / month

0.94 Mil.Baht

0.08 Mil.Baht

Continue

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

107

Connected Transactions

Name

Type of Transactions

Volume

Relationship

4. Lease for area behind domestic cargo at Suvarnabhumi Airport to construct for parking the service vehicles and other facilitators

1,600 sqm

Amount ( Exclude VAT)

Unit Price

Outstanding Balance as of Dec 31, 2009

Continuation of Transaction

1.30 Mil.Baht

0.11 Mil.Baht

Continue

0.34 Mil.Baht

0.04 Mil.Baht

Continue

General business condition, Actual use -

0.10 Mil.Baht

0.02 Mil.Baht

2. PTT Plc. Gas to refuel the vehicles 1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of PTT Plc.

0.52 Mil.Baht

0.05 Mil.Baht

Continue

2. Mr. Tevin vongvanich (since Apr 8, 2009), BAFSâ&#x20AC;&#x2122;s director is the executive of PTT Plc.

5. Utility and other charges of AOT 6. Donation for building Buddha image and pavilion at Suvarnabhumi Airport 7. Purchase of Phra Buddha Mongkhol Suvarnabhumi

60 Baht / sqm / month

General business condition, Actual use

3. The Shell Company Gas to refuel the vehicles Mr. Thepparit Vesurai of Thailand Ltd. (ended Feb 1, 2009), Mr.Ath Hemvijitraphan (since Mar 6, 2009), BAFSâ&#x20AC;&#x2122;s directors are the executives of The Shell Company of Thailand Ltd.

4. Dhipaya Insurance Plc. Insurance on Company Assets and Third-Party Liabilities Ministry of Finance is indirect major shareholder of BAFS and Dhipaya

General business condition, Actual use

0.02 Mil.Baht

0.003 Mil.Baht

Continue

2.63 Mil.Baht

Amount ( Exclude VAT)

3. Transactions between JP-One Asset Co., Ltd. (Subsidiary) and connected persons who may have conflict of interests

Name

1. Fuel Pipeline Transportation Ltd. (FPT)

Type of Transactions

Relationship

1. Guarantee for compliance of land lasing agreement for laying pipeline and constructing control station

Ministry of Finance is indirect major shareholder of BAFS and FPT

Unit Price -

2 Mil.Baht

Outstanding Balance as of Dec 31, 2009

Continuation of Transaction

2. Connection of common facility with Makkasan - Suvarnabhumi pipeline system

0.51% of revenue but not less than 15,000 Baht / month

0.46 Mil.Baht

0.04 Mil.Baht

3. Employment for operation, repair and maintenance of Makkasan - Suvarnabhumi pipeline system

5% of revenue but not less than 100,000 Baht / month

4.52 Mil.Baht

0.40 Mil.Baht

Continue

50.93 Mil.Baht

4.57 Mil.Baht

Continue

4. Throughput fee from Bangchak Refinery and fuel depot at Chong Nonsi to Makkasan control station

108

Volume

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

783.50 Mil.litre

6.50 Satang / liter

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

Continue Continue

109

Connected Transactions

Name

5. 6. 7.

Type of Transactions Land sublease for laying pipeline and constructing control station Pipeline route monitoring charge Employment for managing and supervising the repairing of Makkasan - Suvarnabhum pipeline route

Continuation of Transaction

232 Baht / sqm / year

2.48 Mil.Baht

Continue

23,680 m -

755,200 Baht / month 750,000 Baht

9.06 Mil.Baht 750,000 Baht

Continue -

As agreed conditions

24.89 Mil.Baht

Continue

As agreed conditions

11.09 Mil.Baht

0.85 Mil.Baht

Continue

146.44 Mil.Litre

3. PTT Plc. Service charge for pipeline system to Suvarnabhumi Depot 1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of PTT Plc.

65.24 Mil.Litre

4. Chevron (Thailand) Ltd. 1. Service charge for pipeline system Mr. Tanachai Vienravee to Suvarnabhumi Depot BAFS’s director is the executive of Chevron (Thailand) Ltd. 2. Fuel Reserve Fee

64.71 Mil.Litre

5. The Shell Company 1. Service charge for pipeline system Mr. Thepparit Vesurai of Thailand Ltd. to Suvarnabhumi Depot (ended Feb 1, 2009), Mr. Ath Hemvijitraphan (since Mar 6, 2009), BAFS’s directors are the executives of The Shell Company of Thailand Ltd. 2. Fuel Reserve Fee 6. The Bangchak Petroleum Plc. 1. Service charge for pipeline system Ministry of Finance is indirect to Suvarnabhumi Depot major shareholder of BAFS and The Bangchak Petroleum Plc. 2. Fuel Reserve Fee

7. Airports of Thailand Plc. Land lease outside airport ground within 1. Ministry of Finance is indirect (AOT) Suvarnabhumi Airport to lay aviation fuel pipeline major shareholder of BAFS and major shareholder of AOT 2. Mr. Serirat Prasutanond, BAFS’s director is the executive of AOT

Bangkok Aviation Fuel Services Plc.

Outstanding Balance as of Dec 31, 2009

10,672 sqm

2. Thai Airways International Plc. Service charge for pipeline system to Suvarnabhumi Depot 1. THAI is major shareholder of BAFS (THAI) 2. ACM Narongsak Sangapong (ended Nov 30, 2009), Mr. Tummasak Chitiwong (ended Nov 3, 2009), Mr. Chanchai Singtoroj (ended Apr 8, 2009), Flying Officer Norahuch Ployyai (since Apr 8, 2009), BAFS’s directors are the executives of THAI

Annual Report 2009

Amount ( Exclude VAT)

Unit Price

่ 2. Mr. Tevin Vongvanich (since Apr 8, 2009), BAFS’s director is the executive of PTT Plc.

110

Volume

Relationship

As agreed conditions

11.00 Mil.Baht

0.85 Mil.Baht

Continue

7.00 Mil.Litre

As agreed conditions

1.12 Mil.Baht

10.64 Mil.Litre

As agreed conditions

1.81 Mil.Baht

0.17 Mil.Baht

Continue

As agreed conditions

3.76 Mil.Baht

0.33 Mil.Baht

573.31 Mil.Litre

As agreed conditions

97.46 Mil.Baht

11.15 Mil.Baht

7.00 Mil.Litre

As agreed conditions

2.00 Mil.Baht

0.29 Mil.Baht

2,209.88 sqm

60 Baht / sqm / year. not include 12.5% property tax

1.51 Mil.Baht

Continue

8.00 Mil.Litre

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

111

Opinion on Connected Transactions for the Year 2009 OPINION ON CONNECTED TRANSACTIONS FOR ThE yEAR 2009

“

The Company’s Board of Directors has appointed the independent Audit Committee to consider the connected transactions of the Company in compliance with the Regulations of the Stock Exchange of Thailand and Office of the Securities Exchange Commission (SEC)

In 2009, the Company engaged in transactions with connected persons in various normal business conditions. The disclosure of pricing policy of such transactions appeared in the notes of the Company’s consolidated financial statement as of December 31, 2009. Furthermore, in the Board of Directors’ meeting held on February 18, 2010 attended by the Audit Committee, the Board of Directors agreed with the opinions of the Audit Committee that these transactions are reasonable and the most beneficial to the business of Company, in accordance to the Regulations of the SEC as follows.

“

1. The transactions between the Company and the connected persons who may have conflict of interests 1.1 Thai Airways International Plc. 1.2 Chevron (Thailand) ltd. 1.3 The Shell Company of Thailand ltd. Rationale and Necessity The Company provides the aviation fuel storage, transport and refuelling services at Don Mueang and Suvarnabhumi Airports. The Company and the users have established an agreement to clearly set the terms and service rate which equals to the rate charged on the external parties except for new fuel trading companies that are not the Company’s shareholders to be charged as the terms specified, in accordance with the policies approved by the Board of Directors. However, for the fuel transportation through the Hydrant Pipeline System at Suvarnabhumi Airport, the Company, the users, and Thai Aviation Refuelling Co., Ltd. who receives the concession in operating the Hydrant System, have jointly agreed upon the terms and service fees in aviation fuel transportation at the same rate as the external parties. The Company represents Thai Aviation Refuelling Co., Ltd. in charging the representative service fee to the users with the pre-specified contracts. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and the most beneficial to the Company’s operation since they are part of normal business operation of the aviation refuelling service at Don Mueang and Suvarnabhumi Airports. Moreover, the Company provides free custom clearance service for the users who has a full-service contract. The Audit Committee has the opinion that such transaction is connected transaction, but is offered to facilitate users, which is the supporting normal business transaction with general trading conditions. This service should benefit the Company’s operation in both Don Mueang and Suvarnabhumi Airports. 112

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

1.4 PTT Plc. Rationale and Necessity The Company has transactions with PTT similar to those with Thai Airways International Plc., Chevron (Thailand) Ltd. and The Shell Company of Thailand Ltd. Moreover, the Company provides the aviation refuelling service at Samui and Sukhothai Airports, whereby PTT is the fuel and other refuelling service related products provider through aviation refuelling system. PTT Plc. has agreed on the aviation fuel service charge to the Company in accordance with the pre-specified terms and the service rate. The Audit Committee has the opinion that such transactions are connected transaction, but are beneficial to the Company’s operation. The Company bought fuel from PTT gas station to refuel the Company’s vehicles. PTT charges the Company according to the market price with other general trading conditions. The Audit Committee has the opinion that such transaction is connected transaction, but is beneficial to the Company’s operation. 1.5 Airports of Thailand Plc. (AOT) Rationale and Necessity • Don Mueang Airport The Company has entered into the Fuel Pipeline Lease Agreement with AOT since it is part of the normal business operations of aviation refuelling service in transporting the aviation fuel through the Pipeline System at Don Mueang Airport. The Company has to compensate AOT at the rate stipulated in the agreement which 16% of fuel pipeline investment and the rate would be adjusted annually according to the Consumer Price Index. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and the most beneficial to the Company’s operation since they are part of normal business operation of the aviation refuelling service at Don Mueang and Suvarnabhumi Airports. The Company has also signed the lease contract for offices and the areas inside and outside parking apron at Don Mueang Airport for operating the aviation refuelling service on the same rental rate as the external parties. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and beneficial to the Company’s operation. Since March 25, 2007, AOT has re-opened Don Mueang Airport for domestic flights ; as such the Company has provided aviation refueling services. Later, in January 2009, Thai Government has policy to operate Suvarnabhumi Airport as a single airport for international and domestic flights with certain flight schedule, while operate Don Mueang Airport for chartered flights, private flights, and maintenance aircrafts. Therefore, the Company has submitted the request document for returning and reduction of the rental area inside the parking apron at Don Mueang Airport as well as requested for the exemption of the rental charges on areas and fuel pipelines. Subsequently, AOT exempted the charges to be in line with aviation refuelling service during April 1, 2009 - December 31, 2009. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

113

Opinion on Connected Transactions for the Year 2009 • Suvarnabhumi Airport The Company has entered the Into-Plane Service contract with AOT at Suvarnabhumi Airport to provide the aviation refuelling service. AOT has granted the concession to the Company in Into-Plane Service and transporting the aviation fuel out of the airport business for 20 years, starting from the date of formal opening of the airport on September 28, 2006. The Company is to compensate AOT at the rate stipulated in the agreement which equals to the rate for external parties and has to comply with certain obligations. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and the most beneficial to the Company’s operation since they are parts of normal aviation refuelling operation at Suvarnabhumi Airport. The Company has also entered into the lease agreement outside the parking apron at Suvarnabhumi Airport to construct the office buildings and the amenities for aviation refuelling service for 20 years, starting from the date of formal opening of the airport at the same rate as charged on the external parties. In addition, the Company has entered into the lease agreements inside the passenger building and necessary area for parking dispensers and refuellers inside apron at Suvarnabhumi Airport for the Into-Plane operation, on the same rental rate as the external parties. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and the most beneficial to the Company’s operation since it is a part of normal aviation refuelling operation at Suvarnabhumi Airport. • Chiang Mai Airport The Company rents the land outside the parking apron at Chiang Mai Airport from AOT between the Company’s aviation fuel depot and the roads inside Chiang Mai Airport. The Company has planned to expand service to Chiang Mai Airport, and AOT has approved in policy to permit the Company to be aviation refuelling service provider at Chiang Mai Airport. The lease rate equals to the rate for external parties. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and beneficial to the Company’s operation. Moreover, the Company uses infrastructure and facilities of AOT in various airports. These are services AOT provides to facilitate the Company’s operation to refuel aircraft in the airport. The Company must pay service fees and comply to AOT’s conditions, which are the same standard as if made with other third-party. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and the most beneficial to the Company’s operation since they are parts of normal aviation refuelling operation in airports. The Company donated for building Buddha image and pavilion at Suvarnabhumi Airport to a fortune and worship in the occasion of third anniversary of Suvarnabhumi Airport The Audit Committee has the opinion that such transaction is connected transaction, but considers necessary as the Company is one of the operators at Suvarnabhumi Airport and for long term business partnership. 114

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

1.6 Ministry of Finance Rationale and Necessity The Company has entered the lease agreement with the Ministry of Finance in renting the building and the land relating to the Company’s building and the fuel depot from governmental property. The contract also circumvents the leases of the land for Fuel Pipeline Transportation Ltd. and JP-One Asset Co., Ltd. The rented buildings and lands are used for aviation refuelling and related services of both the Company and its subsidiaries. The Company agreed to pay the rent and comply with the terms specified in the contract. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and the most beneficial to the Company’s operation since it is a part of normal business operation of the aviation refuelling service at Don Mueang Airport. 1.7 Thai Petroleum Pipeline Co., ltd. (THAPP) Rationale and Necessity The Company entered contract with Thai Petroleum Pipeline Company Limited (THAPP) as lessor of land and building at fuel depot in Don Mueang and Suvarnabhumi airports as well as utility service. According to contract, THAPP must pay rent and comply with conditions in the contract. The service fees will be adjusted according to consumer price index, but shall not exceed 7%. The utilities service here does not include water for fire suppression system, water and electricity, which is charged according to actual usage. The Audit Committee has the opinion that such transactions are connected transactions, but enable THAPP to construct facilities and the aviation fuel pipeline receiving system. These transactions are necessary and the most beneficial to the Company’s operation since it is a part of normal business operation of the aviation refuelling service at Don Mueang and Suvarnabhumi Airports. 1.8 Dhipaya Insurance Plc. Rationale and Necessity The Company made insurance on the company assets and third-party liabilities, as well as car insurance and car casualty coverage with Dhipaya Insurance Public Company Limited (Dhipaya Insurance). The Company must pay insurance premium and comply with the conditions Dhipaya Insurance stated in insurance policies. The insurance premium is charged at the market rate. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and the most beneficial to the Company’s operation as it covers risk and reduces damage that may result from the Company’s aviation refuelling operation in airports. 1.9 Thai Aviation Refuelling Co., ltd. (TARCO) Rationale and Necessity The Company has 90% of the total shareholding in TARCO which provides underground pipeline service to distribute aviation fuel (Hydrant System) at Suvarnabhumi Airport. To compensate for the rights to operate the aviation fuel distribution service via Hydrant System at Suvarnabhumi Airport, it was specified in TARCO’s Bangkok Aviation Fuel Services Plc.

Annual Report 2009

115

Opinion on Connected Transactions for the Year 2009 shareholder agreement that shareholders shall transfer 10% of the shares to New Bangkok International Airport Company Limited (NBIA) at no cost. After that Airports of Thailand Plc. (AOT) received business, rights, debts, liabilities, obligations and asset of NBIA’s. Currently, AOT shall have full ownership to those shares. The Company has entered into the agreement with Bangkok Bank Plc. to guarantee credit facilities of a subsidiary, TARCO amounting to Baht 870 million and US$ 8 million. The Company will be liable to fulfill the loan payment obligations if TARCO fails to fulfill the terms of the loan contracts. The Company charges the guarantee fee of 1% of the outstanding balance of credit. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary to TARCO’s operation so that it is able to connect to the aviation fuel depot and provide the aviation refuelling service at Suvarnabhumi Airport, leading to the most beneficial to the Company. The Company has entered into a memorandum with TARCO to permit the Company to access in Hydrant System. The connection between the Company’s equipments and Hydrant System is for transporting fuel for aviation refuelling service at Suvarnabhumi Airport. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary to the Company’s aviation refuelling service at Suvarnabhumi Airport. The Company also leased out the office building, provided utility service and computer network system according to the office lease contract and memorandum for computer network system. The rent and computer service fee is at market price and the utility service fee is according to actual usage. The Company provides the consultancy service in using the application program for business analysis and coordinates between TARCO and the program developers. The service fee is based on the scope of the work and adjusted with the consumer price index at 3-5%. The Company has enter into the agreement with TARCO to provide the stock account system and collection service to accommodate TARCO to report fuel through Hydrant System to AOT and collect hydrant service fee from oil companies. The service fee is based on the scope of works and adjusted with the consumer price index at 3-5%. The Company has signed a memorandum with TARCO in appointing the Company’ staffs to participate in TARCO’s management with the service charge based on the rate approved by Company’s management and adjusted with the processing fee of 12.5% which is the same rate as charged on other companies. In addition, the Company provides services regarding standard design for organization and website, legal consulting, web hosting services and website maintenance, IT performance appraisal, public relations, safety and occupational heath consulting, training, quality assurance and technical training in aviation fuel transporting. The service fee is based on the conditions and scope of works. The Audit Committee has the opinion that such transactions are connected transactions, but are beneficial to the Company’s operation.

116

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

1.10 Into-Plane Service Co., ltd. (IPS) Rationale and Necessity Prior to listing in the Stock Exchange of Thailand, the Company has 83.3% stake in IPS, which provides aviation refuelling service by subcontracted for labor aspect only, while PTT holds only 16.7% of the total shares. The Company employs IPS to provide the aviation refuelling service at Samui and Sukhothai Airports, according to the aviation refuelling service employment agreement. The service fee is based on the incurred cost adjusted by processing fee of 12.5%. The Audit Committee has the opinion that such transaction is connected transaction, but is the most beneficial to the Company’s operation. The Company provides telephone service to IPS at the rate equals to the rate for external parties and according to the actual usage. The Company has signed a memorandum with IPS to appoint the Company’s staffs to participate in the management of IPS based on the rate approved by the Company’s management and adjusting for the processing fee of 12.5% which is the same rate as charged on other external parties. In addition, the Company provides legal consulting service. The service fee is based on the conditions and scope of works. The Audit Committee has the opinion that such transactions are connected transactions, but are beneficial to the Company’s operation. 1.11 JP-One Asset Co., ltd. (JP-One) Rationale and Necessity The Company has 92.5% of the total shareholding in JP-One which transports aviation fuel through underground pipelines system, from Makkasan to Suvarnabhumi Airport. The Company has entered into an agreement with Bangkok Bank Plc. to guarantee JP-One, a subsidiary, long-term credit facilities with the amount of Baht 120 million. The guarantee fee is charged at 1% of the outstanding facilities per year. The Company leased out receiving pipeline system composed of receiving pipeline system, receiving fuel tank and facilities at Suvarnabhumi Airport. The Company has entered into a lease agreement with clear terms and rental charge based on investment and minimum fuel through pipeline. The Audit Committee has the opinion that such transactions is connected transaction, but is necessary to JP-One’s operation since it is a part of normal business operation to lay underground aviation fuel pipeline to transport fuel from the oil trading companies to the Company aviation fuel system at Suvarnabhumi Airport which is the most beneficial to the Company. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

117

Opinion on Connected Transactions for the Year 2009 The Company also leased out the office building and provided utility service according to the office lease contract. The rent and service fee is at market price and the utility service fee is according to the actual usage and the Company required JP-One to pledge collateral 3 times of monthly rental fee. The Company has signed the Memorandum of Understanding with JP-One in charging for appointing the Company’s staffs to participate in the management of JP-One. The service fee is based on the rate approved by the Company’s management and adjusted with the processing fee of 12.5% which is the same rate as charged on external parties. The Audit Committee has the opinion that such transaction is connected transaction, but is beneficial to the Company’s operation. Furthermore, the Company provides legal consulting, safety and occupational heath consulting, marketing consulting, ISO 9001 : 2000 consulting and risk management consulting. The service fee is based on the conditions and scope of works. The Audit Committee has the opinion that such transactions are connected transactions, but are beneficial to the Company’s operation.

Rationale and Necessity The Company has 16.7% of the total shareholding in FPT which stores and transports aviation fuel through underground pipelines system. The Company leased out the aviation fuel pipeline receiving system, land and office building according to the leases contract. The rent for the pipeline receiving system is 21.5% of FPT’s revenue for the whole year from aviation fuel transporting. The contract also specifies the rent on land and offices based on the market price. The Audit Committee has the opinion that such transactions are connected transactions, but it is to facilitate construction of amenities and the use of pipeline receiving system from the oil trading companies and dispenses the fuel to the leased pipeline receiving system before reaching the aviation refuelling service of the Company through the underground pipeline at Don Mueang Airport. This will optimize beneficial to the Company’s operation. Furthermore, the Company has assisted FPT in debt restructuring. The Company has set aside allowance for doubtful debt for loan and long-term receivable from related company in full to comply with the 2nd amendment to debt restructuring agreement and claim selling agreement (the 2nd group debt under debt restructuring agreement). In 2009, there was the 3rd amendment to debt restructuring, which the financial institutions waived accrued interest for FPT. However, the Company signed in the 3rd debt restructuring agreement only as one of the creditors. The Audit Committee has the opinion that such transactions is connected transaction, but is beneficial to the Company’s operation as the Company will benefit from receiving back more principle.

Annual Report 2009

2.1 Airports of Thailand Plc. (AOT) Rationale and Necessity TARCO was authorized by AOT to operate the aviation fuel transport system via underground pipeline (Hydrant System) at Suvaranbhumi Airport for 30 years as of September 28, 2006, the first day the Company commenced operations at the airport. According to the terms of Permission for Operation of the Hydrant Pipeline Network Contract at Suvarnabhumi Airport, TARCO pays 2% of the total income before deducting expenses per year in exchange for the operations rights. Furthermore, TARCO signed the contract on renting the land and the area underneath the terminal at Suvarnabhumi Airport. The land is for stacking the equipments and Hydrant for maintenance and the ground floor of the terminal is for the office of the service staff. The rent fee is the rent similar rate to the outside parties. In addition, TARCO has entered into the lease agreement for area behind domestic cargo at Suvarnabhumi Airport to construct for parking the service vehicles and other facilitators. The rent fee is the rent similar rate to the outside parties.

1.12 Fuel Pipeline Transportation ltd. (FPT)

118

2. The transactions between Thai Aviation Refuelling Co., ltd. (a subsidiary) and the connected persons who may have conflict of interests

Bangkok Aviation Fuel Services Plc.

The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and the most beneficial to TARCO’s operation since it is part of normal business operations for transporting aviation fuel via Hydrant System. Moreover, TARCO uses infrastructure and facilities of AOT in Suvarnabhumi Airport area. These are services AOT provides to facilitate TARCO’s operation to transport aviation fuel in the airport. TARCO must pay service fees and comply to AOT’s conditions, which are the same standard as if made with other third-party. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and the most beneficial to TARCO’s operation since they are parts of normal aviation transporting in Suvarnbhumi Airport. TARCO donated for building Buddha image and pavilion at Suvarnabhumi Airport an purchase of Phra Buddha Mongkhol Suvarnabhumi to a fortune and worship in the occasion of third anniversary of Suvarnabhumi Airport The Audit Committee has the opinion that such transactions are connected transactions, but considers necessary as TARCO is one of the operators at Suvarnabhumi Airport and for long term business partnership. 2.2 PTT Plc. 2.3 The Shell Company of Thailand ltd Rationale and Necessity TARCO bought fuel from gas to refuel its vehicles from PTT and The Shell Company of Thailand Ltd. PTT and Shell charge TARCO according to the market price with other general trading conditions. The Audit Committee has the opinion that such transactions are connected transactions, but are beneficial to TARCO’s operation. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

119

Opinion on Connected Transactions for the Year 2009 2.4 Dhipaya Insurance Plc. Rationale and Necessity TARCO made insurance with Dhipaya Insurance Public Company Limited (Dhipaya Insurance) on third-party liabilities, all-coverage insurance, and terrorism coverage policies. TARCO must pay insurance premium and comply with the conditions Dhipaya Insurance stated in insurance policies. The insurance premium is charged at the market rate. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and beneficial to TARCO’s operation as it covers property damage and damage that affect TARCO’s operation. 3. The transactions between JP-One Asset Co, ltd. (a subsidiary) and the connected persons who may have conflict of interests 3.1 Fuel Pipeline Transportation ltd. (FPT) JP-One requested National Finance Bank Plc. to issue Baht 2 million guarantee as collateral for FPT’s debts obligation with the State Railway of Thailand. The bank guarantee is to ensure compliance with the land lease contract obligations pertaining to the laying of underground fuel pipeline and construction of a control station to direct the oil flow along the fuel pipeline system. JP-One, the operator of Aviation Fuel Pipeline Project, “Makkasan-Suvarnabhumi route to the Company’s aviation depot at Suvarnabhumi Airport,” connected aviation fuel pipeline, Makkasan-Suvarnabhumi route with pipeline and common facility of FPT and employed FPT to operate and manage the service of aviation fuel pipeline system from Makkasan to the Company’s aviation fuel depot. JP-One would pay FPT throughput fee from Bangchak Refinery and fuel depot at Chong Nonsi to Makkasan control station, which will be reimbursed such fee from users at the same rate. An agreement between JP-One and FPT had established for the above transactions, by specifying the rate for facility connection, maintenance and repair of FPT’s facility at the connection point to ensure its effective operation. For the operation and management employment of FPT, the management fee was based on the cost of fuel transportation that would be on time and have qualified standard in areas of marketing, security and reporting, etc. JP-One has entered into a 30-year land sublease agreement with FPT for laying pipeline and constructing control station between Bangchak-Don Mueang route with Makkasan to Suvarnabhumi route. JP-One also employed FPT to monitor pipeline route from Makkasan train station to Suvarnabhumi Airport entrance, by having a memorandum which the employment rate was based on the cost of personnel and monitoring equipment for 24 hours a day to prevent the invasion of external person and accident, including giving knowledge and public relations to neighboring community. Annual Report 2009

Such transactions are necessary and the most beneficial to the business operation of JP-One since it is a part of the normal business operations relating to the laying of underground fuel pipeline to transport aviation fuel from the oil companies to the Company’s aviation fuel depot at Survarnabhumi Airport. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and the most beneficial to JP-One’s operation since they are part of normal business operation to receive and disburse fuel to the Company’s depot at Suvarnabhumi Airports. 3.2 Thai Airways International Plc. 3.3 PTT Plc.

Rationale and Necessity

120

Furthermore, JP-One employed FPT to manage and supervise the repairing of Makkasan - Suvarnabhum pipeline route, Rom Klao area, which was damaged from the construction of one company. Therefore, JP-One employed FPT that specialized in pipeline route to be advisor in repairing such pipeline. The employment contract was made and the service fee was charged from the employee cost that supervised this work.

Bangkok Aviation Fuel Services Plc.

Rationale and Necessity JP-One has signed the memorandum to users to inform transportation rate for pipeline system from Bangchak Refinery to fuel depot at Chong Nonsi through pipeline system of FPT and JP-One to fuel depot at Suvarnabhumi Airport. However, the throughput fee through FPT’s pipeline would reimburse to FPT. The Audit Committee has the opinion that such transactions are connected transactions, but have specified the service rate at the same rate as changed on the outside parties, and are the most beneficial to JP-One since they are part of normal business operation. 3.4 Chevron (Thailand) ltd. 3.5 The Shell Company of Thailand ltd. 3.6 The Bangchak Petroleum Plc. Rationale and Necessity JP-One enters transaction on aviation fuel pipeline system to the company’s depot at Survarnabhumi Airport with Chevron (Thailand) Ltd., The Shell Company of Thailand Ltd., and The Bangchak Petroleum Plc. similar to the contract made with Thai Airways International Plc. and PTT Plc. The Audit Committee has the opinion that such transactions are connected transactions, but are the most beneficial to JP-One since they are part of normal business operation. Moreover, JP-One has operated reserve fuel business at Suvarnabhumi fuel depot by making short-term contract with clear duration, conditions and service fees. The service fee will be re - negotiated upon every contract extension. The Audit Committee has the opinion that such transactions are connected transactions, but are the supporting normal business transactions that are the most beneficial to JP-One. Bangkok Aviation Fuel Services Plc.

Annual Report 2009

121

Opinion on Connected Transactions for the Year 2009 Policy or Trend regarding Future Connected Transactions

3.7 Airports of Thailand Plc. (AOT) Rationale and Necessity JP-One signed land lease contract with AOT on the outside of the airport’s ground but within the operating area of Suvarnabhumi Airport to lay aviation fuel pipeline from fuel Refinery to company’s fuel depot. The rent fee is the rent similar rate to the outside parties. The Audit Committee has the opinion that such transaction is connected transaction, but is necessary and the most beneficial to JP-One as its core business require underground aviation fuel pipeline from users and feed those fuel into the Company’s fuel depot system at Suvarnabhumi Airport.

Measure or Procedures regarding Connected Transactions The procedures in conducting connected transactions between the Company and the person who may have conflict of interests and the disclosure of connected transaction of the Company comply with the Regulation of the Securities and Exchange Commission and the Stock Exchange of Thailand. In case that the transaction must be approved by the Board of Directors and/or the shareholder’s meeting, it shall be screened by the Audit Committee. The Audit Committee would give opinion in entering such transaction. If the Board of Directors has different opinion with the Audit Committee, the Company shall also disclose the different opinion. In entering the connected transactions, the Company concerns that such transactions would be the most beneficial to the Company’s business, fair, reasonable, in market price and have normal business condition. In addition, according to the Company’s rules, in case that particular director has interests in certain issues, he shall not be allowed to vote in approving such connected transaction agenda.

122

Annual Report 2009

Bangkok Aviation Fuel Services Plc.

The Company has the policy regarding connected transactions to be in compliance with the regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand. In entering the connected transactions, the Company would specify the agreement and conditions to enhance the fair price and conditions that do not cause the misappropriation of benefit. And due to the nature of the Company’s business that provides the full range aviation service, combined with the Company’s shareholding structure that comprises of Thai Airways Plc., AOT Plc. and oil companies, there will be future connected transactions continually. However, such connected transactions would be the transactions that are reasonable, necessary and benefit to the Company and are the normal business of providing aviation refuelling service at Don Mueang and Suvarnabhumi Airports. The Company would disclose the detail of connected transactions in Notes to Financial Statements that audited by the External Auditor of the Company. The Company has provided service at Don Mueang Airport continually according to the Government policy that specified the usage of Don Mueang Airport for domestic flights, chartered flights, personal flights and aircraft maintenance hub since March 2007, and also has policy to provide consulting service and office lease for Thai Aviation Refuelling Co., Ltd and JP-One Asset Co., Ltd to enhance the efficiency in providing aviation refuelling service at Don Mueang and Suvarnabhumi Airports. Therefore, the Company has additional connected transactions i.e. office building lease contract, consulting serve contract. In addition, the Company has customs service contract with the oil companies, which is normal business transaction. In the future, the Company will still have connected transactions with Thai Aviation Refuelling Co., Ltd and JP-One Asset Co., Ltd. continually for providing services in training, risk management as well as other consulting services that shall be benefit to the business of the Company and its subsidiary companies.

Bangkok Aviation Fuel Services Plc.

Annual Report 2009

123

Bangkok Aviation Fuel Services Public Company Limited.

บริษัท บริการเชื้อเพลิงการบินกรุงเทพ จำากัด (มหาชน) BANGkOk AVIATION FuEL SERVICES PLC.

B A F S

BANGkOk AVIATION FUEL SERVICES PLC. Head oﬃce 171/2 kamphaeng Phet 6 Rd., Don Mueang, Bangkok 10210 Telephone 0-2384-8900 Fax 0-2834-8999 Suvarnabhumi Branch 99 Sriwareenoi Road, Tambon Srisajorrakhenoi, Amper Bangshotong, Samutprakarn 10540 Telephone 0-2326-3800 Fax 0-2326-3888

บริษัท บริการเชื้อเพลิงการบินกรุงเทพ จำ�กัด (มหาชน) BANGKOK AVIATION FUEL SERVICES PLC.