Bangkok Aviation Fuel Services : Anuual Report 2010 by Orapan Kokong

M.R. Supadis Diskul Managing Director

Message From Managing Director In the past year 2010, Thai economy continues to face many challenges from the domestic political uncertainties, Iceland volcano eruption and global financial crisis resulted the severe dropping of the Company’s revenue in the second quarter. However, on the second half of the year 2010, the recovery of air transport and tourism industry as well as the Company’s strategy of discontinuation promotion discount for storage fee at Suvarnabhumi Airport has helped to propel an increase of the Company income by 17% compare to last year. With strong earning and cash flow as well as moderate capex, which led to continued improvement in its financial leverage measured against cash flow, Fitch Ratings (Thailand) Limited has upgraded Bangkok Aviation Fuel Services Public Company Limited’s National Long-term rating from “A-(tha)” to “A+(tha)” and National Short-term rating from “F2(tha)” to “F1(tha)”. Simultaneously, the agency has revised the Outlook on long term rating from “Positive” to “Stable”. However, BAFS is confident that the development of sustainable organization not only involves the return on investment and suitable growth for shareholders but the Company needs to operate in connection to the sustainable business development and social and environment. Therefore, BAFS together with our subsidiary and related companies have encourages experience-based education by sponsoring field trips for local student in the surrounding area of Suvarnabhumi Depot in taking part in mangrove planting. Moreover, BAFS has been elected as a pilot organization for “Carbon Footprint for Organization” established by Thailand Greenhouse Gas Management Organization (TGO) and National Metal and Materials Technology Center (MTEC) of National Science and Technology Development Agency (NSTDA). As the result in our dedication to forging balance between business and society on a continual and earnest basis and always adhere to good corporate governance principles, BAFS has been awarded as Excellent Corporate Governance Scoring from Thai Institute of Directors and The National Award of Outstanding for Enterprise of Safety Operations, Occupational Health and Working Environment for the tenth year. I would like to express my gratitude to all our shareholders, customers, business partner and other related parties as well as the board, management and employees for all their trust and steadfast support.

(M.R. Supadis Diskul) Managing Director

Social Responsibility Policy

BAFS is fully committed to delivering high quality aviation refuelling 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 ;

Social Responsibility Policy

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. 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 highly dedicated to human resource from staff selection process with high 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 performance-based financial rewards 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 our shareholders, it is imperative that our business conducts are also to be beneficial and constructive to the society and has therefore been participating in various social activities.

Social Responsibility Policy

Activities on the Corporate Social Responsibility The following are the activities; Social and Community Development Projects Soldier Moral Improvement Program (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 these areas have been injured or disabled which consequently suffer from moral and psychological issues. 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” which is a program that provides moral support to injured soldiers in Phramonkutklao Hospital. BAFS joined the program every two months. 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 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. Firefighting is an area where BAFS has paid a special attention by providing mandatory firefighting training to every employee. Nonetheless, we have also identified local communities as important allies in safety promotion by providing introductorylevel firefighting courses to the local communities near 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. Donation Program/Project on Education and Sport Equipments BAFS has donated educational and sporting equipments along with scholarship to various schools around the country; namely, Wat 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.

Social Responsibility Policy

Teachers Volunteering Project BAFS has been arranging voluntary teaching project by sending volunteers from BAFS to teach basic electricity background for High School students in Wat Hua Kua School. Government Officer Supporting Project BAFS has supported the Honorable Government Officer by granting the reward through the Civil Service Association of Thailand every year in the hope that the Honorable with characters of faithful and dedicated will be model for all government officers. Relieving the painful of disaster victim Project BAFS concerned about natural disaster which occurs on the whole world. To relieve victim’s pain, BAFS has donated through the Thai Red Cross Society in most severe cases such as Earthquake in Haiti, Heavily Flood in Thailand. Religion 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 since 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. Environmental Conservation Project Mangrove Forest Field Trips BAFS encourages experience-based education by sponsoring field trips for local students in the “Pa Nong Rak Pa Chai Lane Project” or Mangrove Forest Field Trips. During the field trip, students, teachers from Wat Hua Koo school, Wat Srivareenoi School and Pak Klong Mol School andtogether with BAFS volunteers were taking part in mangrove trees planting and being taught to analyze, experience and to be conscious on the importance of environmental conservation. Effective Microorganisms for Environmental Treatment Project BAFS has supported by Electricity Generating Authority of Thailand (EGAT) to educate, train, and result follow-up with the students in many school namely, Wat Wiharn Deang School , Wat Hua Ku school on the use of Effective Microorganisms (EM) for environmental treatment.

Activities In 2010 Aviation Safety Week 2010 BAFS attended the aviation safety week at the main terminal building at Suvarnabhumi Airport between 2 August 2010 until 6 August 2010.

Senior Executives on Justice Administration batch 14 visits BAFS M.R. Supadis Diskul welcomed â&#x20AC;&#x153;The senior executives on justice administration batch 14â&#x20AC;? that visited BAFS aviation fuel depot at Suvarnabhumi Airport on 7 September 2010.

BAFS celebrates Chinse New Year to airlines customers. On the occasion of the Chinese Lunar New Year, Business Development and Marketing Department greets customer airlines with oranges for good luck and good fortune throughout the whole year.

Honorable Awards

BAFS won the national flag decoration in Don Mueang District The Don Mueang’s District Director granted the award of national flag decoration for private sector to Bangkok Aviation Fuel Services Plc on 17 September 2011. The Contest was held by the Don Mueang District Office in order to promote national flag decoration

BAFS won on enterprise of safety awards at two locations. Minister of Labour Protection and Welfare granted the Year 2010’s National Award of the Outstanding for Enterprise of Safety Operation, Occupational Health and Working Environment to Bangkok Aviation Fuel Services Plc., at Bangkok International Trade & Exhibition Centre (BITEC) on 10 July 2010. In this year, BAFS, Don Mueang Depot wons these awards for ten consecutive years while Intoplane Substation ofﬁce wons for two consecutive years.

General Information BANGKOK AVIATION FUEL SERVICES PUBLIC COMPANY LIMITED Head OfďŹ ce 171/2 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Telephone : 02 834 8900 Fax : 02 834 8999 Web Site : www.bafsthai.com Type of Business Storage and Aircraft Refuelling Services 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 : 02 229 2800 Fax : 02 654 5427 Auditor Dharmniti Auditing Co., Ltd. 267/1 Pracharaj Sai 1 Road, Bangsue, Bangkok 10800 Telephone : 02 587 8080 Fax : 02 586 0301

General Information

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

Type of Business

Type of Share

Paid-up Capital Shareholding (Mil. Baht) Percentage

Thai Aviation Refuelling Co., Ltd. Operating aviation fuel service 99 Moo 10, Srisa Jorakhanoi, using the Hydrant technology Bang Saothong, at Suvarnabhumi Airport Samut Prakarn 10540 Tel : 02 134 4021-6 Fax : 02 134 4020

Ordinary

530

90.00

JP-One Asset Co., Ltd. 171/2 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Tel : 02 834 8984-6 Fax : 02 834 8975

Transporting aviation fuel through pipeline system, from Makkasan to Suvarnabhumi Airport

Ordinary

600

92.50

Intoplane Services Co., Ltd 171/2 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Tel : 02 834 8982-3 Fax : 02 834 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

Fuel Pipeline Transportation Limited 424 Kamphaeng Phet 6 Rd., Don Mueang, Don Mueang, Bangkok 10210 Tel : 02 574 6180-3 Fax : 02 574 6101

Storing and transporting aviation fuel through pipeline system

Ordinary and Preferred

1,592

16.67

Organization Chart BOARD OF DIRECTORS

Audit Committee

Nomination Committee

Managing Director

Deputy Managing Director â&#x20AC;&#x201C; Administration Executive Assistant of Internal Audit

Internal Audit

Executive Assistant of Legal & Securities

Executive Assistant to Managing Director

Media Development & Community Affair

Safety

Public Relations

Corporate Affairs

Investor Relations

Legal

Finance & Accounting Department

Human Resources & Administration Department

Business Development & Marketing Department

Corporate Financial

Personnel

Business Development & Marketing

Accounting

Administration

Information Technology

Stock Control

Purchasing

IT System Engineering

Human Resources Development

Remuneration Committee

Risk Management Committee

Fuelling Operations Committee

Deputy Managing Director â&#x20AC;&#x201C; Operations Occupational Health And Safety Management Representative (OH&SMR) Safety, Occupational Health and Environment

Executive Assistant of Quality Management System

Risk Management & Strategic Plan

Technical Department

Depot Department

Aviation Refueling Department

Donmueang & Regional Airport Department

Electrical Engineer

Depot Operation

Aviation Refueling

Donmueang Airport

Mechanical Engineer

C/R & Maintenance

Aviation Information Service

Regional Airport -USM

Quality Control

Maintenance

Regional Airport -THS

is commanding line is reporting line

Board of Directors

Mr. Palakorn Suwanrath Chairman and Independent Director Age 62 years

(%) Share Holding t /P Education/Training t .BTUFS PG "SUT JO *OUFSOBUJPOBM "GGBJST . " * " 4PVUIFBTU "TJB 4UVEJFT 0IJP 6OJWFSTJUZ 64" t #BDIFMPS PG "SUT JO 1PMJUJDBM 4DJFODF $IVMBMPOHLPSO 6OJWFSTJUZ t $FSUJmDBUF /BUJPOBM %FGFODF $PMMFHF $MBTT t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 %JSFDUPS $FSUJmDBUJPO 1SPHSBN %$1 The Role of Chairman from Thai Institute of Directors (IOD) Other Current Position t 1SJWZ $PVODJMMPS Past Experience t $IBJSNBO .FUSPQPMJUBO &MFDUSJDJUZ "VUIPSJUZ t $IBJSNBO 1SPWJODJBM &MFDUSJDJUZ "VUIPSJUZ t %JSFDUPS &MFDUSJDJUZ (FOFSBUJOH "VUIPSJUZ PG 5IBJMBOE t %JSFDUPS &YQSFTTXBZ BOE 3BQJE 5SBOTJU "VUIPSJUZ PG 5IBJMBOE t %JSFDUPS (PWFSONFOU 4BWJOHT #BOL t %JSFDUPS 4$# 4FDVSJUJFT $P -UE

Board of Directors

M.R. Supadis Diskul Director and Managing Director Age 61 years

Flight Lieutenant Montree Jumrieng Director Age 53 years

(%) Share Holding t *O OBNF PG IJNTFMG BOE TQPVTF shares)

(%) Share Holding t /P

Education/Training t .BTUFS PG $PNNVOJUZ BOE 3FHJPOBM 1MBOOJOH North Dakota State University, USA t #BDIFMPS PG 4DJFODF .FEJDBM 5FDIOPMPHZ Mahidol University t $FSUJmDBUF /BUJPOBM %FGFODF $PMMFHF 5IF /BUJPOBM Defence Course for the Joint State-Private Sectors, Class 15 t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 %JSFDUPS CertiямБcation Program (DCP), Finance for NonFinance 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 t %JSFDUPS BOE .BOBHJOH %JSFDUPS Thai Aviation Refuelling Co., Ltd. t %JSFDUPS BOE .BOBHJOH %JSFDUPS JP-One Asset Co., Ltd. t $IBJSNBO *OUPQMBOF 4FSWJDFT $P -UE t $IBJSNBO 'VFM 1JQFMJOF 5SBOTQPSUBUJPO -UE

Education/Training t #BDIFMPS PG 4DJFODF .FDIBOJDBM &OHJOFFSJOH Royal Thai Air Force Academy Other Current Position t .BOBHJOH %JSFDUPS 5FDIOJDBM %FQBSUNFOU Thai Airways International Pcl. t %JSFDUPS %PO .VFBOH *OUFSOBUJPOBM "JSQPSU )PUFM Co., Ltd. Past Experience t &YFDVUJWF 7JDF 1SFTJEFOU )VNBO 3FTPVSDFT Development & Management, Thai Airways International Pcl. t 7JDF 1SFTJEFOU )VNBO 3FTPVSDFT .BOBHFNFOU Department, Thai Airways International Pcl. t %JSFDUPS $IJFG 1JMPU %FQBSUNFOU 5IBJ "JSXBZT International Pcl.

Past Experience t &YFDVUJWF 7JDF 1SFTJEFOU $PSQPSBUF %FWFMPQNFOU and Support Department, Thai Airways International Pcl. t .BOBHJOH %JSFDUPS 'VFM 1JQFMJOF 5SBOTQPSUBUJPO -UE

Board of Directors

Mr. Chokchai Panyayong Director Age 56 years

SQN. LDR. Asdavut Watanangura Director Age 51 years

(%) Share Holding t /P

Education/Training t .BTUFS PG &OHJOFFSJOH $JWJM &OHJOFFSJOH University of Detroit, USA t #BDIFMPS PG &OHJOFFSJOH $JWJM &OHJOFFSJOH University of Detroit, USA t #BDIFMPS PG 4DJFODF "SDIJUFDUVSF Mapua Institute of Technology, Philippines

Education/Training t .BTUFS PG $JWJM &OHJOFFSJOH )PDITDIVMF %FS Bundeswehr Muenchen Federal Republic of Germany

Other Current Position t &YFDVUJWF 7JDF 1SFTJEFOU 4USBUFHZ BOE #VTJOFTT Development Department, Thai Airways International Pcl. Past Experience t 7JDF 1SFTJEFOU #VTJOFTT %FWFMPQNFOU BOE 4QFDJBM Project Department, Thai Airways International Pcl. t 7JDF 1SFTJEFOU 4VWBSOBCIVNJ 1SPKFDU Thai Airways International Pcl. t 7JDF 1SFTJEFOU "TTFU .BOBHFNFOU %FQBSUNFOU Thai Airways International Pcl.

Other Current Position t &YFDVUJWF 7JDF 1SFTJEFOU 0QFSBUJPOT %FQBSUNFOU Thai Airways International Pcl. Past Experience t 7JDF 1SFTJEFOU "WJBUJPO 3FTPVSDFT %FWFMPQNFOU Department, Thai Airways International Pcl. t %JSFDUPS 'MJHIU %FDL $SFX 5SBJOJOH %FQBSUNFOU Thai Airways International Pcl.

Board of Directors

Mr. Serirat Prasutanond Director Age 59 years

Mr.Ath Hemvijitraphan Director Age 52 years

(%) Share Holding t /P

Education/Training

Education/Training t .BTUFS PG .BOBHFNFOU 4BTJO (SBEVBUF *OTUJUVUF PG Business Administration of Chulalongkorn University t #BDIFMPS PG #VTJOFTT "ENJOJTUSBUJPO "TTVNQUJPO University t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 GSPN 5IBJ Institute of Directors (IOD)

t .BTUFS PG 4DJFODF %FWFMPQNFOU &DPOPNJDT National Institute of Development Administration t .BTUFS PG 4DJFODF 5FDIOPMPHZ PG &OWJSPONFOUBM Management), Mahidol University t .#" ,BTFUTBSU 6OJWFSTJUZ t #BDIFMPS PG &DPOPNJDT 5IBNNBTBU 6OJWFSTJUZ t 4FOJPS &YFDVUJWF 1SPHSBN 4BTJO (SBEVBUF *OTUJUVUF Chulalongkorn University t %JQMPNB PG 1PMJUJDT BOE (PWFSOBODF JO %FNPDSBUJD Systems for Executive Course, Class 9 from The King Prajadhipokâ&#x20AC;&#x2122;s Institute Academic t 1VCMJD -BX BOE .BOBHFNFOU GPS &YFDVUJWFT $PVSTF Class 3 from The King Prajadhipokâ&#x20AC;&#x2122;s Institute Academic t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 %JSFDUPS $FSUJmDBUJPO Program (DCP) from Thai Institute of Directors (IOD) t "JSQPSU .BOBHFNFOU GSPN $JWJM "WJBUJPO "VUIPSJUZ PG Singapore (CAAS)

Other Current Position t 1SFTJEFOU "JSQPSUT PG 5IBJMBOE 1MD t %JSFDUPS BOE 4FDSFUBSZ PG UIF #PBSE "JSQPSUT PG 5IBJMBOE 1MD t 4UBUF &OUFSQSJTF %JSFDUPS 4UBUF &OUFSQSJTF 1PMJDZ 0GmDF Ministry of Finance

Other Current Position t 4FDPOEBSZ 5SBOTQPSU .BOBHFS 5IBJMBOE )POH ,POH and Philippines, The Shell Company of Thailand Limited Past Experience t (FOFSBM .BOBHFS %JTUSJCVUJPO .FLPOH $MVTUFS The Shell Company of Thailand Limited t (FOFSBM .BOBHFS 4VQQMZ .FLPOH $MVTUFS The Shell Company of Thailand Limited

Past Experience t "DUJOH 1SFTJEFOU "JSQPSUT PG 5IBJMBOE 1MD t 4FOJPS &YFDVUJWF 7JDF 1SFTJEFOU (FOFSBM .BOBHFS of Suvarnabhumi Airport, Airports of Thailand Plc. t &YFDVUJWF 7JDF 1SFTJEFOU %FQVUZ (FOFSBM .BOBHFS of Regional Airports, Airports of Thailand Plc. t &YFDVUJWF 7JDF 1SFTJEFOU 4QFDJBM "GGBJST Airports of Thailand Plc. t $IBJSNBO 5IBJ "WJBUJPO 3FGVFMMJOH $P -UE

Board of Directors

Mr. Nuttachat Charuchinda Director Age 56 years

Mr. Chakraphan Krachaiwong Director Age 39 years

(%) Share Holding t /P

Education/Training t .#" 5IBNNBTBU 6OJWFSTJUZ t # &OH $JWJM &OHJOFFSJOH $IJBOHNBJ 6OJWFSTJUZ t %JQMPNB 5IF +PJOU 4UBUF 1SJWBUF 4FDUPS $PVSTF National Defence College, Class 20

Education/Training t .#" 4FBUUMF 6OJWFSTJUZ 64" t #BDIFMPS PG #VTJOFTT "ENJOJTUSBUJPO Chulalongkorn University

Other Current Position t 4FOJPS &YFDVUJWF 7JDF 1SFTJEFOU $PSQPSBUF 4USBUFHZ PTT Plc. t %JSFDUPS #BOHDIBL 1FUSPMFVN 1MD t %JSFDUPS #BOHLPL 1PMZFUIZMFOF 1MD Past Experience t &YFDVUJWF 7JDF 1SFTJEFOU International Trading Business Unit, PTT Plc. t &YFDVUJWF 7JDF 1SFTJEFOU /BUVSBM (BT 7FIJDMF 155 1MD t &YFDVUJWF 7JDF 1SFTJEFOU 4VQQMZ BOE -PHJTUJDT 155 1MD t &YFDVUJWF 7JDF 1SFTJEFOU 5FSNJOBM 0QFSBUJPO 155 1MD t &YFDVUJWF 7JDF 1SFTJEFOU *OUFSOBUJPOBM #VTJOFTT Development and Marketing, PTT Plc.

Other Current Position t "SFB 5SBOTQPSUBUJPOT 0QFSBUJPOT .BOBHFS Chevron (Thailand) Ltd. t %JSFDUPS 4UBS )PMEJOH $P -UE

Past Experience t 1SPQFSUZ 'BDJMJUZ 0QUJNJ[BUJPO .BOBHFS Chevron (Thailand) Ltd. t 3FUBJM %JTUSJDU .BOBHFS $IFWSPO 5IBJMBOE -UE t 0QFSBUJPOBM &YDFMMFODF .BOBHFS $IFWSPO 5IBJMBOE -UE t /FUXPSLJOH 1MBOOJOH .BOBHFS $IFWSPO 5IBJMBOE -UE

Board of Directors

Mr. Navee Lertphanichkul Director Age 62 years

Mr. Vinai Chamlongrasdr Director Age 71 years

(%) Share Holding t *O OBNF PG TQPVTF TIBSFT

Education/Training t #BDIFMPS %FHSFF &MFDUSJDBM &OHJOFFSJOH Chulalongkorn University t $PTU 4DIFEVMF &OHJOFFS &YYPO 3FTFBSDI BOE Engineering, New Jersey t *OUFSOBUJPOBM .BOBHFNFOU 1SPHSBN *.% 4XJU[FSMBOE t .BSLFUJOH 4USBUFHZ .JDIJHBO 6OJWFSTJUZ t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 %JSFDUPS CertiямБcation Program (DCP), Finance for Non-Finance Director from Thai Institute of Directors (IOD)

Education/Training t #BDIFMPS %FHSFF $IFNJDBM &OHJOFFSJOH 4DJFODF Faculty, Chulalongkorn University t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 %JSFDUPS CertiямБcation Program (DCP), Finance for Non-Finance Director from Thai Institute of Directors (IOD)

Other Current Position -

Other Current Position t %JSFDUPS 5IBJ "WJBUJPO 3FGVFMMJOH $P -UE Past Experience t "EWJTPS "JS 5PUBM 5IBJMBOE $P -UE t .BOBHJOH %JSFDUPS "JS 5PUBM 5IBJMBOE $P -UE

Past Experience t 4FOJPS "EWJTPS 1VSBE 5IBJMBOE $P -UE t %JSFDUPS &440 5IBJMBOE 1MD t 4VQQMZ BOE %JTUSJCVUJPO .BOBHFS &440 5IBJMBOE 1MD t %JSFDUPS 5IBJ 1FUSPMFVN 1JQFMJOF $PNQBOZ -JNJUFE

Board of Directors

Mr. Aswin Kongsiri Independent Director, Nominating Committee Chairman, and Risk Management Committee Chairman Age 65 years

Mr. Pachara Yuthidhammadamrong Independent Director and Audit Committee Chairman Age 63 years

(%) Share Holding t /P

Education/Training t #BDIFMPS %FHSFF 1IJMPTPQIZ 1PMJUJDT BOE Economics, Oxford University, England t $FSUJmDBUF /BUJPOBM %FGFODF $PMMFHF 5IF /BUJPOBM Defence Course for the Joint State-Private Sectors, Class 6 t %JSFDUPS $FSUJmDBUJPO 1SPHSBN %$1 5IF 3PMF PG Chairman from Thai Institute of Directors (IOD)

Education/Training t )POPSBSZ %FHSFF PG %PDUPS PG -BXT Ramkhamhaeng University t $MBTT /BUJPOBM %FGFODF $PVSTF GPS UIF +PJOU State-Private Sectors, National Defence College t #BSSJTUFS BU -BX *OTUJUVUF PG -FHBM &EVDBUJPO of The Thai Bar t -- # 5IBNNBTBU 6OJWFSTJUZ t $FSUJmDBUF GSPN /BWBM $PMMFHF t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 "VEJU Committee Program (ACP) from Thai Institute of Directors (IOD) t 1VCMJD %JSFDUPS $FSUJmDBUJPO 1SPHSBN GSPN Public Director Institute

Other Current Position t $IBJSNBO 5IPSFTFO 5IBJ "HFODJFT 1MD t $IBJSNBO $I ,BSODIBOH 1MD t 7JDF $IBJSNBO &MFDUSJDJUZ (FOFSBUJOH 1MD t (PWFSOPS 5IF 4UPDL &YDIBOHF PG 5IBJMBOE Past Experience t %JSFDUPS BOE &YFDVUJWF %JSFDUPS ,SVOH 5IBJ #BOL 1MD t $IBJSNBO PG &YFDVUJWF $PNNJUUFF &MFDUSJDJUZ Generating Plc. t %JSFDUPS BOE &YFDVUJWF %JSFDUPS 4JBN $PNNFSDJBM Bank Plc. t 1SFTJEFOU 5IF *OEVTUSJBM 'JOBODF $PSQPSBUJPO PG Thailand

Other Current Position t %JSFDUPS 0GmDF PG UIF $PVODJM PG 4UBUF t 4VC DPNNJUUFF 4VLIVNWJU "TTFU .BOBHFNFOU $P -UE t %JSFDUPS 5IBJ "WJBUJPO 3FGVFMMJOH $P -UE Past Experience t "VEJU $PNNJUUFF $IBJSNBO BOE *OEFQFOEFOU Director, Krung Thai Bank Plc. t "UUPSOFZ (FOFSBM 0GmDF PG UIF "UUPSOFZ (FOFSBM t %FQVUZ "UUPSOFZ (FOFSBM 0GmDF PG UIF "UUPSOFZ General t /BUJPOBM -FHJTMBUJWF "TTFNCMF .FNCFS t %JSFDUPS 5IBJ "JSXBZT *OUFSOBUJPOBM 1MD t %JSFDUPS *31$ 1MD t %JSFDUPS 1SPWJODJBM &MFDUSJDJUZ "VUIPSJUZ

Board of Directors

Mr. Visut Montriwat Independent Director, Audit Committee Director, and Remuneration Committee Chairman Age 64 years

Mr. Sumon Surathin Independent Director and Audit Committee Director Age 69 years

(%) Share Holding t /P

Education/Training t .#" /PSUIFSO *MMJOPJT 6OJWFSTJUZ 64" t #BDIFMPS PG $PNNFSDF $IVMBMPOHLPSO 6OJWFSTJUZ t $FSUJmDBUF /BUJPOBM %FGFODF $PMMFHF $MBTT t %JSFDUPS $FSUJmDBUJPO 1SPHSBN %$1 "VEJU Committee Program (ACP), 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)

Education/Training t .BTUFS %FHSFF JO &DPOPNJDT Florida Institute of Technology, USA t #BDIFMPS %FHSFF JO &DPOPNJDT "TJB 6OJWFSTJUZ Japan t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 'JOBODJBM Statement for Directors (FSD) from Thai Institute of Directors (IOD)

Other Current Position t %JSFDUPS 5IBJ "WJBJUJPO 3FGVFMMJOH $P -UE t "VEJU $PNNJUUFF $IBJSNBO BOE *OEFQFOEFOU Director, Krung Thai Bank Plc. t %JSFDUPS 5IBJ 1BJCPPO *OTVSBODF $P -UE Past Experience t %FQVUZ 1FSNBOFOU 4FDSFUBSZ .JOJTUSZ PG 'JOBODF t *OTQFDUPS (FOFSBM .JOJTUSZ PG 'JOBODF t $PNQUSPMMFS (FOFSBM .JOJTUSZ PG 'JOBODF t %JSFDUPS (FOFSBM 5IF 5SFBTVSZ %FQBSUNFOU Ministry of Finance

Other Current Position t $IBJSNBO +1 0OF "TTFU $P -UE Past Experience t $IBJSNBO ,SVOH 5IBJ "TTFU .BOBHFNFOU 1MD t 7JDF $IBJSNBO ,SVOH 5IBJ "TTFU .BOBHFNFOU 1MD t "DUJOH .BOBHFNFOU %JSFDUPS Krung Thai Asset Management Plc. t $IBJSNBO PG "VEJU $PNNJUUFF Krung Thai Asset Management Plc. t "TTJTUBOU %JSFDUPS 5IF #VSFBV PG UIF #VEHFU The Prime Minister OfямБce

Management Team

M.R. Supadis Diskul Managing Director Age 61 years

(%) Share Holding t *O OBNF PG IJNTFMG BOE TQPVTF TIBSFT

Education/Training t .BTUFS PG $PNNVOJUZ BOE 3FHJPOBM 1MBOOJOH /PSUI %BLPUB 4UBUF University, USA t #BDIFMPS PG 4DJFODF .FEJDBM 5FDIOPMPHZ .BIJEPM 6OJWFSTJUZ t $FSUJmDBUF /BUJPOBM %FGFODF $PMMFHF 5IF /BUJPOBM %FGFODF $PVSTF GPS the Joint State-Private Sectors, Class 15 t %JSFDUPS "DDSFEJUBUJPO 1SPHSBN %"1 %JSFDUPS $FSUJmDBUJPO 1SPHSBN (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 t %JSFDUPS BOE .BOBHJOH %JSFDUPS 5IBJ "WJBUJPO 3FGVFMMJOH $P -UE t %JSFDUPS BOE .BOBHJOH %JSFDUPS +1 0OF "TTFU $P -UE t $IBJSNBO *OUPQMBOF 4FSWJDFT $P -UE t $IBJSNBO 'VFM 1JQFMJOF 5SBOTQPSUBUJPO -UE Past Experience t &YFDVUJWF 7JDF 1SFTJEFOU $PSQPSBUF %FWFMPQNFOU BOE 4VQQPSU Department, Thai Airways International Pcl. t .BOBHJOH %JSFDUPS 'VFM 1JQFMJOF 5SBOTQPSUBUJPO -UE

Management Team

Mr. Jarern Pavarojkit Deputy Managing Director Operations Age 58 years

Dr. Pugdee Manaves Deputy Managing Director â&#x20AC;&#x201C; Administration Age 47 years

Mr. Amnuay Pahuvanich Senior Technical Manager Age 51 years

(%) Share Holding t /P

(%) Share Holding t 0.01 (In name of himself 3,000 shares)

(%) Share Holding t /P

Education/Training t #BDIFMPS %FHSFF .FDIBOJDBM Engineering, Krasetsart University t %JSFDUPS $FSUJmDBUJPO 1SPHSBN (DCP) from Thai Institute of Directors (IOD) t &DPOPNJDT JO 1VCMJD Administration for HighLevel Administrators - King Prajadhipokâ&#x20AC;&#x2122;s Institute Other Current Position t %JSFDUPS BOE .BOBHJOH %JSFDUPS Intoplane Services Co., Ltd. t %JSFDUPS 5IBJ "WJBJUJPO 3FGVFMMJOH Co., Ltd. t %JSFDUPS +1 0OF "TTFU $P -UE Past Experience t %FQVUZ .BOBHJOH %JSFDUPS Bangkok Aviation Fuel Services Plc.

Education/Training t % &OH ,BTFUTBSU BOE $BTF Western Reserve University, USA t 1I % "NFSJDBO 6OJWFSTJUZ 64" t .4D 6OJWFSTJUZ PG -POEPO 6, t # &OH $IVMBMPOHLPSO 6OJWFSTJUZ t $FSUJmDBUF /BUJPOBM %FGFODF College, The National Defence Course for the Joint State-Private Sectors, Class 22 t $FSUJmDBUF JO &YFDVUJWF Development Program, University of California, Los Angeles, USA t %JSFDUPS $FSUJmDBUJPO 1SPHSBN %$1 Finance for Non-Finance Director, Successful Formulation and Execution of Strategy (SFE) from Thai Institute of Directors (IOD) Other Current Position t %JSFDUPS *OUPQMBOF 4FSWJDFT $P -UE t %JSFDUPS 'VFM 1JQFMJOF Transportation Ltd.

Education/Training t #BDIFMPS %FHSFF Electrical Engineering, Krasetsart University t %JSFDUPS $FSUJmDBUJPO 1SPHSBN %$1 Financial Statement for Directors (FSD), Successful Formulation and Execution of Strategy (SFE) from Thai Institute of Directors (IOD) t &DPOPNJDT JO 1VCMJD Administration for HighLevel Administrators - King Prajadhipokâ&#x20AC;&#x2122;s Institute Other Current Position t %JSFDUPS 5IBJ "WJBUJPO Refuelling Co., Ltd. t %JSFDUPS *OUPQMBOF 4FSWJDFT Co., Ltd. Past Experience t 5FDIOJDBM .BOBHFS Bangkok Aviation Fuel Services Plc.

Past Experience t $IJFG &YFDVUJWF 0GmDFS Castrol Chemicals Limited

Management Team

Mr. Ditsapong Prithaveepong Senior Depot Manager Age 53 years

Mr. Chathaya Bandhaya Senior Finance & Accounting Manager Age 55 years

Mr. Tawin Saiwaew Senior Aviation Refuelling Manager Age 54 years

(%) Share Holding t /P

Education/Training t .#" $PNNFSDF BOE Accountancy Faculty, Chulalongkorn University t #BDIFMPS PG &OHJOFFSJOH Chulalongkorn University t %JSFDUPS $FSUJmDBUJPO 1SPHSBN (DCP), Financial Statement for Director (FSD), Successful Formulation and Execution of Strategy (SFE) from Thai Institute of Director (IOD)

Education/Training t .#" 1FSTPOOFM .BOBHFNFOU NIDA t #BDIFMPS PG &DPOPNJDT Chulalongkorn University t %JSFDUPS $FSUJmDBUJPO 1SPHSBN (DCP), Successful Formulation and Execution of Strategy (SFE) from Thai Institute of Director (IOD)

Education/Training t .BTUFS PG .BOBHFNFOU Mahidol University t #BDIFMPS PG "SUT (FOFSBM Management, Dhonburi Rajabhat University t %JSFDUPS $FSUJmDBUJPO 1SPHSBN %$1 Financial Statement for Directors (FSD) from Thai Institute of Directors (IOD)

Other Current Position t %JSFDUPS +1 0OF "TTFU $P -UE t %JSFDUPS *OUPQMBOF 4FSWJDFT $P -UE t %JSFDUPS 'VFM 1JQFMJOF Transportation Ltd.

Other Current Position t %JSFDUPS 5IBJ "WJBUJPO 3FGVFMMJOH Co., Ltd.

Other Current Position t %JSFDUPS +1 0OF "TTFU $P -UE Past Experience t "JSmFME .BOBHFS Bangkok Aviation Fuel Services Plc. t %JSFDUPS *OUPQMBOF 4FSWJDFT $P Ltd.

Past Experience t 'JOBODF "DDPVOUJOH .BOBHFS Bangkok Aviation Fuel Services Plc.

Past Experience t %FQPU .BOBHFS #BOHLPL Aviation Fuel Services Plc.

Management Team

Ms. Raweewan Mantasatian Human Resources and Administration Manager Age 52 years

Mr. Pichai Pathravutigul Don Mueang and Regional Airport Manager Age 56 years

Mr. Charoen Charusalaipong Business Development and Marketing Manager Age 48 years

(%) Share Holding t *O OBNF PG IFSTFMG shares)

(%) Share Holding t /P

Education/Training t .#" 4SJQSBUVN 6OJWFSTJUZ t #BDIFMPS PG 4DJFODF Chulalongkorn University

Education/Training t .#" 4SJQSBUVN 6OJWFSTJUZ t #BDIFMPS PG 4DJFODF Mahidol University

Other Current Position -

Past Experience t %FQVUZ "JSmFME .BOBHFS Bangkok Aviation Fuel Services Plc.

Past Experience t &YFDVUJWF "TTJTUBOU PG 2VBMJUZ Management, Bangkok Aviation Fuel Services Plc.

Education/Training t .BTUFS PG 1VCMJD "ENJOJTUSBUJPO Human Resources Management, NIDA t #BDIFMPS PG 1VCMJD "ENJOJTUSBUJPO Ramkhamhaeng University Other Current Position Past Experience t %FQVUZ )VNBO 3FTPVSDFT & Administration Manager, Bangkok Aviation Fuel Services Plc.

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 Pcl., Chevron (Thailand) Ltd., PTT Plc., ESSO (Thailand) Plc., The Shell Company of Thailand Ltd., Airports of Thailand Plc., and Air Total (Thailand) Co., Ltd. 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.

Nature of Business

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. 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

Rental Income

Other Income (Unit : Million Baht)

Type of Revenue

1. Services Income

2. Rental Income

3. Others income* Total

Operate by

% of Investment by BAFS

BAFS

Year 2010 Amount Percent 1,480.37

Year 2009 Amount Percent

Year 2008 Amount Percent

66.7 1,343.81

66.0 1,404.33

66.0

TARCO

90%

582.30

26.2

555.79

27.3

571.58

26.9

JP-One

92.5%

109.56

4.9

97.25

4.8

82.99

3.9

19.19

0.9

16.69

0.8

19.28

0.9

BAFS TARCO

90%

JP-One

92.5%

28.44 2,219.86

1.3

21.44

100.0 2,034.98

1.1

48.83

2.3

100.0 2,127.01

100.0

Remark: * Other income comprises of income form other service, Gain (Loss) form Foreign Exchange, other investing income such as interest received, and guarantee fee income.

Results of Operations in 2010

Depot Operations Suvarnabhumi Airport In 2010, 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 4,205.5 million liters, with JP-One Assets Co., Ltd. (JP-One) and Thai Petroleum Pipeline Co., Ltd. (Thappline) providing 1,053.9 million liters and 3,151.6 million liters respectively; a ratio of 25 : 75. Summary of Suvarnabhumi Airport Depot Operations

2010 Million liters

2009 Million liters

Increase (decrease) %

4,205.5

4,000.3

5.1

Daily average volume of Jet A-1 received

11.5

11.0

4.5

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

2.9

2.4

20.8

Daily average volume of Jet A-1 received from Thappline

8.6

Total volume of Jet A-1 received

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.

Results of Operations in 2010

Don Mueang Airport In 2010, 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 285,132 liters. The total volume of Jet A-1 received was 104.1 million liters (a daily average of 0.29 million liters). Summary of Don Mueang Airport Depot Operations

2010 Million liters

2009 Million liters

Increase (decrease) %

Total volume of Jet A-1 received

104.1

85.2

22.2

Daily average volume of Jet A-1 received

0.29

0.23

26.1

Into-plane Operations 2.1 Refuelling Operations

Suvarnabhumi Airport JET A-1

Total volume of Jet A-1 uplifted during 2010 was 3,726.9 million liters, or 311 million liters per month, supplying 127,736 total annual ﬂights (average of 10,645 ﬂights per month).

Don Mueang Airport JET A-1

Total volume of Jet A-1 uplifted during 2010 was 103.2 million liters, or 8.6 million liters per month, supplying 15,236 total annual ﬂights (average of 1,270 ﬂights per month).

AVGAS

Total volume of Avgas uplifted during the same period was 191,050 liters or 15,921 liters per month, supplying 2,564 total annual ﬂights (average of 214 ﬂights per month). 2.2 Defuelling Operations

Airport

Operation

Suvarnabhumi Airportิ

The Company supplied Jet A-1 defuelling services to 105 ﬂights (9 ﬂights per month), with a total combined volume of 1.7 million liters or 0.1 million liters per month.

Don Mueang Airport

The Company supplied Jet A-1 defuelling services to 152 flights (13 flights per month), with a total combined volume of 2.7 million liters or 0.2 million liters per month. 2.3 Number of Flights Serviced The Company provided aviation refuelling services to 142,972 flights at Suvarnabhumi

Airport and Don Mueang Airport, during 2010, a increase of 8,219 ﬂights or 6.1% from 2009. Total volume of fuel uplifted at both airports in 2010 was 3,830.1 million liters, a increase of 123 million liters or 3.3% from 2009.

Results of Operations in 2010

Flights

2010

2009

Increase (decrease)%

Number of ﬂights

38,618

37,961

1.7

Volume of fuel uplifted (million liters)

333.2

334.1

(0.3)

Number of ﬂights

89,118

84,274

5.7

Volume of fuel uplifted (million liters)

3,393.7

3,278.1

3.5

14,445

11,767

22.8

98.1

89.4

9.7

Number of ﬂights

791

751

5.3

Volume of fuel uplifted (million liters)

5.1

5.6

(8.9)

Total number of ﬂights

142,972

134,753

6.1

Total volume of fuel uplifted (million liters)

3,830.1

3,707.2

3.3

Suvarnabhumi Airport Domestic Flights

International Flights

Don Mueang Airport Domestic Flights Number of ﬂights Volume of fuel uplifted (million liters) International Flights

Totals

Summary of Business Changing

In 2010, the Company was negatively affected by political factors, resulting in the performance of the Company, the second and third quarters were lower than expected; however, in the last quarter of 2010 fuel consumption was back to normal. Compared to last year, total fuel consumption grew 4.9 percent. In addition, to maximize the utilization of asset, the Company improved one of the unused aviation fuel storage tanks at Don Mueang Airport to store diesel; the project was completed in September 2010. Operations at Suvarnabhumi Airport In 2010, the Company transferred 2 aviation hydrant dispenser trucks from Don Mueang Airport to Suvarnabhumi Airport; this is to allocate appropriate resources to service at each airport. Currently, in total the Company has 40 aviation hydrant dispenser trucks and 3 refueller tank trucks at Suvarnabhumi Airport. Regarding the operational changes in 2010, other than transferring the aviation hydrant dispenser trucks to Suvarnabhumi Airport, the Company is currently improving 2 out of 8 aviation hydrant dispenser trucks from using EURO 2 diesel engines to be EURO 3 diesel engines. Furthermore, in order to support the expansion of Suvarnabhumi Airport, the Company plans to increase hydrant pumps form 9 to 11 hydrant pumps, which is expected to be complete within December 2011. Outlining the amount of flights in 2010, the Company provided aviation refuelling services at Suvarnabhumi Airport, at a total of 127,736 flights, divided into 38,618 domestic flights and 89,118 international flights, or an average of 371 flights per day, increased 4.5 percent from last year. The number of flights that the Company provided service was accounted for 94 percent of the total number of flights landing at Suvarnabhumi Airport. Operations at Don Mueang Airport Certainly, the major scheduled flights airline at Don Mueang Airport is Nok Air and One Two Go, with some other charter flights. During 2010, Don Mueang Airport accommodated 15,236 flights, estimated at 42 flights per day, increased 21.7 percent from last year, with fuel consumption of 103 million liters or 283,000 liters per day, increased 10 percent from last year. With 8 refuellers at Don Mueang Airport and the flights accommodated at this airport, the Company is more than capable to provide the service. Besides the aviation refuelling and storage service at Don Mueang Airport, with maximum reserved capacity at 20 million liters, the Company has another additional service to reserve diesel since September 2010. To provide this service, the Company has modified the unused aviation fuel storage tank to receive and store diesel via pipeline before transporting diesel to Bang Pa In depot. However, in the future, if the flights and the demand of aviation fuel increases at Don Mueang Airport, the Company can restore the tank back to reserve aviation fuel as usual.

Aviation Refuelling Overview and Competition

Thailand’s aviation refuelling business in 2010 was somewhat similar as in 2009. From March to May 2010, the government declared a state of emergency under the executive degree for administration in emergency situations in many provinces throughout the country. But the airline industry benefited from the global recovery factors, and passenger figures at Suvarnabhumi Airport in total was 10.3 million, increased 6.8 percent compared to last year. In 2010, the total number of flights that the Company provided aircraft refuelling at Suvarnabhumi Airport was 135,403 flights, divided into 38,618 domestic flights, and 96,785 international flights, or an average of 371 flights per day, increased 5.1 percent from last year. Fuel consumption at Suvarnabhumi Airport in 2010 was 4,213 million liters, or an average of 11.5 million liters per day. The Company has an 88.5 percent market share for the into-plane service at Suvarnabhumi Airport. For Don Mueang Airport, the fuel consumption was 103 million liters, servicing 15,236 flights. The overall fuel consumption for both Suvarnabhumi Airport and Don Mueang Airport was 4,317 million liters, increased 4.9 percent compared to last year. For 2011, the Company forecasts that fuel consumption for both airports will be able to grow and expects the fuel consumption to be 4,392 million liters, representing a 2 percent growth. The Company predicts by the hypothesis that the major airlines at Don Mueang Airport will remain the same and no other negative factors that will affect the tourism industry seriously, causing unexpected growth of fuel consumption. The Company aims to maintain market share at Suvarnabhumi Airport for not less than 85 percent. Focusing on satisfying and fulfilling the demand of the customer, which are the oil companies. The Company will maintain service quality under the motto “Service with our hearts” and emphasizes highest priority in safety, with 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 customers.

Innovating and Developing for the Future The Company will continue to fulﬁll its Vision and Mission by developing the capabilities of the aviation refuelling system to ensure a reliable supply of aviation fuel is available to support the growth of Suvarnabhumi airport. The Company is also studying various business opportunities as alternative means to increase its revenue. The following is a summary of these activities.

Main Hydrant Pump Project The Company has already started the installation of an additional main hydrant pump, which

is to be completed in 2011. However, due to higher than expected passenger and air trafﬁc growth, and despite the negative impact of the political and economic situation, this extra pumping capacity will be fully utilized by the time the system comes online, leaving no pumps on stand-by. In light of this, and to ensure that the Company maintains its world-class standards of operational excellence, it will be installing an additional main hydrant pump in early 2011, and will be completed during the same period as the abovementioned pump. The addition of pump will increase our maximum pumping capacity to 4,540 cubic meters per hour, while having one main hydrant pump always on stand-by, which greatly reduces system down-time, and enhances the overall availability of the pumping facility.

Hydrant Dispenser Vehicle Chassis Replacement Project (2 vehicles) The Company’s hydrant dispenser vehicles have been fully utilized for providing aviation

refuelling services at Suvarnabhumi Airport since 2006. Some of the older vehicles require an amount of vehicle chassis maintenance that is increasingly disproportionate to the amount of fuel they uplift, which results in increased costs in providing service for the Company. Each year, the Company plans on replacing 2 of these older vehicle chassis with newer units that are more efﬁcient and more environmentally friendly.

Additional 15 million liter Main Storage Tank Construction Project At the current rate of air trafﬁc growth, it is forecasted that the aviation fuel requirements at

Suvarnabhumi Airport will reach 14.5 million liters per day by 2012. To ensure that the Company is able to provide the airport with a reliable supply of aviation fuel, the 5 year strategic plan calls for the construction of an additional 15 million liter main storage tank in 2012, with completion due in 2013. The increase in buffer stock capacity will also enhance the Company’s ability to handle ﬂuctuation in fuel demand.

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 of the preceding year. The risk points and controlled plan 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:

Business Risk Risk associated with the Growth Rate of Thai Tourism Industry The Company’s major revenue is from aircraft refuelling services at Don Mueang, Samui,

Sukhothai, and especially at Suvarnabhumi Airport; therefore, an increase of income depends largely on the number of flight services provided which is directly related to Thai tourism industry growth rate. Additional factors which can negatively impact the Company’s revenue are political turmoil and natural disasters. The closures of Suvarnabhumi and Don Mueang Airports due to political demonstrations and unrest in 2008 and the cancellation of flights from Europe to Thailand due to the eruption of a volcano in Iceland in 2010 are examples of these severe incidents which are uncontrollable factors. However, the Company’s financial operating result is carefully monitored every month because the management team has set it as a main priority, as well as has set up the trigger point for some financial factors such as EBITDA and cash flow to be early warning points. In the case that revenues are going to falls below the budget, the controlling expenses plan will be conducted on every department to cover the decrease in revenue and able to pay dividends to the shareholder. Furthermore, Business Development and Marketing Department is currently conducting studies on investment in other related businesses that can create future additional revenue.

Risk from Operations 2.1 Risk Relating to Inadequate Refuelling Service Devices to Cope with the Growth of Flight at Suvarnabhumi Airport The Company is facing the risk of inadequate refuelling services devices due to Airports of

Thailand Plc. (AOT)’s marketing activity and the project of enlargement at Suvarnabhumi Airport to push up the volume of ﬂights coming to Thailand. In order to increase the Company’s capability on providing service at the peak hours, 2 additional hydrant pumps will be installed, which can provide 4,540 cubic meters per hour on pumping the aircraft fuel to the system. This project will ﬁnish in 2011. Furthermore, the Company’s Fuelling Operations Committee, which composes of the representatives from the Company’s management and oil companies, has regularly meeting for improvement services purpose. Moreover, there is the inspection from Joint Inspection Group (JIG) once a year to make sure that the Company’s operating systems meets the international standard.

Risk Factors

2.2 Risk Relating to Conflagration or Terrorism As the Company’s business is related to aviation fuel, the fuel storage tanks situated in vicinity of Don Mueang and Suvarnabhumi Airports may be a risk of conflagration or other hazards such as terrorism. This could effect a variety of unwanted events such as personal health and safety issues, properties damage, environmental degradation, as well as the Company’s operations. The Company has highly concerned about the importance of safety, by strictly complies with the 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. Furthermore, noise barrier is set up on Utrapimook Tollway in front of the Company’s depot at Don Mueang area as well as the tank protection nets are going to be installed over the oil tanks in order to avoid the risk of sabotage. 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 5,311.2 million. 2. Aviation Third Party Legal Liability Insurance Policy, valued of USD 750 millions, and Terrorism and Disaster Insurance, valued of Baht 5,440 millions. 3. Accidental Damage (property) Insurance Policy coverage for the Company’s property, valued of Baht 128.8 million. 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, deluge in Europe and Asia. Thus, all countries over the world are seriously taking these matters into account including Airports of Thailand Plc. (AOT), which released the “Green and Clean Airport” policy. In couple of years, the operators in Suvarnabhumi Airport will have to mitigate the carbon dioxide emission according to the above policy. As the Company concerns about global warming, “Carbon Footprint for Organization” project has been manipulated. This project is set up by National Metal and Material Technology Center (MTEC) and Thailand Greenhouse Gas Management Organization (TGO) in order to calculate the amount of carbon dioxide that the Company releases per year bases on the Company’s activities and operation. This project is 7- month long from December 2010 to June 2011, and then the Company will receive the certificate of carbon footprint emission volume as references to find the way of reduction.

Risk Factors

Financial Risk Risks related to Financial Obligations on Long-Term Loans The Company has three loans for the expansion of aviation refuelling service business. In 2011

the Company has negotiated with the banks for the loan restructuring according to the conservative financial plan and investment plan of the Company, which is already approved, by extending the loan pay back period for 3-4 years, or ended in 2018. The loans are as follows: 3.1 Loan for the investment of main depot and into-plane services systems projects. The Company obtained 10-year with Baht 2,000 million loan from Bangkok Bank Plc., which is extend to be 14-year loan, paying back loan started in 2008. As at December 31, 2010, the Company has outstanding loan of 1,340 million Baht. From 2011, the Company has to pay interest throughout the loan installments, at 3-month current account interest rate + 1.5%. Other financial covenants (considering from consolidated financial statement) included Debt-to-Equity ratio of not exceeding 1.50:1, Debt Service Coverage Ratio (DSCR) of not lower than 1.10:1, and cumulative DSCR of not lower than 1.25:1. At present, the Company is able to maintain all financial ratios to comply with all financial covenants mentioned above. 3.2 10-year loan contract for buying shares of Thai Aviation Refuelling Co., Ltd. amounts Baht 800 million, which is extend to be 14.5-year loan, paying back loan started in 2007. The outstanding loan at December 31, 2010 is Baht 355.6 million. From 2011, the Company has to pay interest rate at THBFIX 6 MTH +1.15% per annum, which has been hedged at 5.8% fixed rate. Other financial covenants (considering from separate financial statement) included 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 all financial ratios to comply with all financial covenants mentioned above. 3.3 7-year loan contract for buying shares of JP-One Assets Co., Ltd. amounts 220 million Baht, which is extend to be 10-year loan, paying back loan will start in 2011. The Company has to pay interest rate at MLR – 2.5% for 3 years (February 2011 – January 2014) and at MLR-2.0% after that. Other financial covenants include Debt-to-Equity ratio of not exceeding 2.0:1, in which the Company can still comply with the financial covenant mentioned above Even though, the Company faces the risk of failing to comply with the above financial covenants, the overall operation result shows that the Company has been able to follow all financial covenant and the creditors are confident as the Company’s operations are better than the contract conditions. Moreover, from the aforementioned negotiation of loan restructuring, the Company is confident that it can follow all the loan’s conditions at lower risk as well as all the Company’s operations will be as planed.

Shareholder and Management Structure 1. Shareholding Structure Top ten shareholders as of Aug 26, 2010 (latest shareholdingâ&#x20AC;&#x2122;s book closing date): Names

Number of shares Shareholding %

1. Thai Airways International Pcl.

115,186,150

22.59

2. PTT Plc.

36,000,000

7.06

3. Chevron (Thailand) Limited

36,000,000

7.06

4. Esso (Thailand) Plc.

36,000,000

7.06

5. The Shell Company of Thailand Ltd.

36,000,000

7.06

6. Airports of Thailand Plc.

25,200,000

4.94

7. Air Total (Thailand) Co., Ltd.

18,000,000

3.53

8. Singapore Petroluem (Thailand) Company Limited

10,200,000

2.00

9. Petronas Retail (Thailand) Co., Ltd.

10,200,000

2.00

10. BP Oil (Thailand) Limited

10,200,000

2.00

2. Management Structure The Board of Directors (as of Feb 23, 2011): Names

Position

Mr. Palakorn Suwanrath

Chairman and Independent Director

M.R. Supadis Diskul

Flight Lieutenant Montree Jumrieng

Director

Mr. Chokchai Panyayong

Director

SQN.LDR. Asdavut Watanangura

Director

Mr. Serirat Prasutanond

Director

Mr. Ath Hemvijitraphan

Director

Mr. Chakraphan Krachaiwong

Director

Mr. Navee Lertphanichkul

Director

Managing Director

10. Mr. Vinai Chamlongrasdr

Director

11. Mr. Nuttachat Charuchinda

Director

12. Mr. Aswin Kongsiri

Independent Director

13. Mr. Pachara Yutidhammadamrong

Independent Director

14. Mr. Visut Montriwat

Independent Director

15. Mr. Sumon Surathin

Independent Director

Mr. Tarnthong Chandrangsu

Companyâ&#x20AC;&#x2122;s Secretary

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. Chakraphan Krachaiwong, Mr.Ath Hemvijitraphan, Mr.Chokchai Panyayong, Flight Lieutenant Montree Jumrieng, Mr. Nuttachat Charuchinda, SQN.LDR.Asdavut Watanangura, two out of ten directors sign and affix the Company’s seal. Composition and Appointment of the Board of Directors 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. The Retirement of the Board of Directors 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 end of the last day of the month that 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:

Shareholder and Management Structure

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

Shareholder and Management Structure

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: 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;

Shareholder and Management Structure

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. 3.2 Selection of Management 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 Management 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. 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 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: Meeting Allowance: Chairman receives 7,500 Baht/time, director receives 6,000 Baht/ time Remuneration for the Board of Directors 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 2010

13,576,058.76 Baht

Year 2009

13,483,364.64 Baht

Shareholder and Management Structure

The remuneration in detail is as follows: Unit: Baht Names

Position

Director

Audit

Remuneration Committee

Other

Bonus year

Committees

2009 paid

in Subsidiary

in 2010

Companies

Remuneration Remuneration 1. Mr. Palakorn Suwanrath

Total

Remuneration

Chairman 359,000.00

785,000.00

1,144,000.00

2. M.R. Supadis Diskul

Director 308,000.00

66,000.00

523,500.00

897,500.00

604,900.00

3. Flight Lieutenant Montree Jumrieng

Director 261,464.29

261,464.29

4. Mr. Chokchai Panyayong

Director 277,464.29

277,464.29

5. SQN.LDR. Asdavut Watanangura

Director

9,806.45

6. Mr. Serirat Prasutanond

Director 260,000.00

523,500.00

783,500.00

260,100.00

308,000.00

477,600.00

785,600.00

308,000.00

523,500.00

831,500.00

9. Mr. Navee Lertpanichkul

Director 292,000.00

24,000.00

523,500.00

839,500.00

10. Mr. Vinai Chamlongrasdr

Director 308,000.00

24,000.00

523,500.00

855,500.00

459,000.00

11. Mr. Nuttachat Charuchinda

Director 192,645.16

192,645.16

12. Mr. Aswin Kongsiri

Director 308,000.00

60,000.00

523,500.00

891,500.00

13. Mr. Pachara Yutidhammadamrong

Director 308,000.00

359,000.00

382,900.00

1,049,900.00

270,500.00

14. Mr. Visut Montriwat

Director 308,000.00

308,000.00

22,500.00

523,500.00

1,162,000.00

459,000.00

15. Mr. Sumon Surathin

Director 308,000.00

308,000.00

18,000.00

523,500.00

1,157,500.00

7. The Shell Company of Thailand Ltd. * (Mr. Ath Hemvijitraphan, Shell’s Executive is the Company’s director) 8. Chevron (Thailand) Limited * (Mr. Tanachai Vienravee, Chevron’s Executive has been the Company’s director, ended Dec 31,2010)

Mr. Chanchai Singtoroj

Ex-director

140,500.00

Mr. Nattachak Pattamasingh

Ex-director

140,500.00

Flight Lieutenant Udom Krisnampok

Ex-director

140,500.00

Mr. Tummasak Chutiwong

Ex-director

440,300.00

Ex-Vice

538,900.00

310,250

Na Ayutthaya

ACM Narongsak Sangapong

Chairman Mr. Tevin Vongvanich

Ex-director

29,178.57

382,900.00

412,078.57

Flying Ofﬁcer Norahuch Ployyai

Ex-director 241,000.00

382,900.00

623,900.00

Remark: *

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.

Shareholder and Management Structure

Remuneration for the Management Number of Management

10 persons

Types of remuneration

Salary, Bonus, Welfare *

Total Management’s remuneration Year 2010

59,820,570.08 Baht

Year 2009

52,716,538.55 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 management 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 management 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 Management Number of Management

10 persons

Provident Fund Contribution Year 2010

4,389,980.88 Baht

Year 2009

3,624,644.01 Baht

Shareholder and Management Structure

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: Dividend Paid

Dividend per share

% of

(Mil.Baht)

(Baht)

Net Proﬁt *

Year 2010

275.40

0.54

Year 2009

219.30

0.43

Year 2008

204.00

0.40

Remark: * Calculated from the Company Financial Statement.

The Company paid interim dividend to the shareholders at the rate of Baht 0.18 per share on September 7, 2010 and on February 23, 2011, the Board of the Directors’ Meeting assented to pay the dividend for last six month of the year 2010 to the shareholders at the rate of Baht 0.36, totaling Baht 0.54 per share for the year 2010, or 63% of net proﬁt. This rate follows the Company’s dividend policy and will propose to the Annual General Meeting for the year 2011.

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.

Good Corporate Governance

Bangkok Aviation Fuel Service Plc. recognizes the importance of good corporate governance, by adhering to the Principles of Good Corporate Governance for listed companies of the Stock Exchange of Thailand as guideline for corporate governance and enhancing the Company to operate with efďŹ ciency, and with code of conduct. In addition, the Company places great importance on Corporate Social Responsibility, by taking care of society, environmental conservation, and giving back to the communities. The Company realizes that its business is mutually coexistence with community and environment, which leads to its sustainability in the long run. The Corporate Governance Policy of the Company was approved by the Board of Directors since 2002, and was been later improved to align with the Principles of Good Corporate Governance for listed companies of the Stock Exchange of Thailand and Guideline in Preparing Corporate Governance Policy of Thai Institute of Directors, as well as to be more suitable with the current environment. The Corporate Governance Policy 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 speciďŹ es the governance policy for the Board of Directors, management 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, management and employees. Furthermore, the Company has provided Code of Conduct for the Board of Directors, the management and the employees to use as a guideline in performing their duties with transparency and conforming to good corporate governance. Also, Code of Conduct Working Group has been set up to ensure the compliance of Code of Conduct and to establish the testing system as well as to improve Code of Conduct and testing system to be updated on a regular basis.

Good Corporate Governance

The Company has complied with the Principles of Good Corporate Governance of the Stock Exchange of Thailand as follows:

Shareholders’ Rights 1. Shareholders’ Rights Protection 1.1 The Company attaches importance to protection of shareholders’ rights and promotion of exercising the basic legal rights i.e. the rights to share profit /receive dividend, to obtain relevant and adequate information of the Company, to participate and vote in the shareholders’ meeting to elect and remove members of the board, appoint the external auditor, and make decisions on any transactions that affect the Company such as amendment to the Company’s articles of association and the Company’s by laws, for etc. 1.2 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. 1.3 The shareholding structure of the Company comprises of numerous minority shareholders to balance with the majority shareholders, not contributing to any person or group to control vote or control of the Company, while enhancing the good corporate governance to shareholders. Currently, the Company has free float more than 40 percent. 2. The Shareholders’ Meeting 2.1 The Company held the Shareholders’ Meeting once a year within 4 months after the end of the accounting period. In 2010, the meeting was held on April 19, 2010, where relevant directors especially Chairman of the Board of Directors, Chairman of various committees, Managing Director, management, external auditor, and legal advisor attended the meeting to respond to questions. 2.2 The Company has provided legal advisor responsible for checking registration documents and counting of votes in the shareholders’ meeting. 3. Delivering the Meeting Invitation Letter 3.1 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. 3.2 The meeting invitation letter has sufficient and complete information, regarding date, time, place, agendas, enclosures of each agenda, purpose and reason, 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, and meeting attendance procedure. The Company has also provided meeting invitation letter in English to facilitate foreign shareholders. 3.3 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.

Good Corporate Governance

3.4

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 criteria and method, details of director background, working experience, number of companies served, types of director that is proposed to be appointed, 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, experience and competence, independency, audit 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 of appropriateness of audit fee, 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.

4. Facilitating Shareholders 4.1 The Company allows shareholders to send questions related to the agenda to the Board of Directors in advance via Investor Relations Section. 4.2 In the shareholders’ meeting, the Company facilitates all shareholders in a fair manner by arranging ofﬁcers to taking care of them. 4.3 The Company allows registration of shareholders at least 1 hour before the meeting, does not curtail rights of shareholders who came late, and facilitates shareholders to use their meeting rights. 4.4 The Company use a barcode system detailing each shareholder in the registration form. This is to facilitate the registration for time saving and accuracy. 5. Conduct of the Shareholders’ Meeting 5.1 Before the meeting, Chairman shall introduce the directors, Chairman of various committees, management, external auditor, and legal advisor, as well as informs the rules in the meeting and the voting procedures. The Company also asks shareholders volunteers together with legal advisor to witness ballot count for transparency. 5.2 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 Chairman, directors, and management address and answer all questions clearly and precisely. 5.3 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. 5.4 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.

Good Corporate Governance

6. After the Shareholders’ Meeting The minutes of meeting are correct, complete and can be veriﬁed by shareholders. The minutes covers the name and position 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.

Equitable Treatment To Shareholders The Company recognizes the importance of rights and equitable treatment of shareholders through the following actions. 1. Proposing Additional Meeting Agenda and Nominating Director 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. Appointing Proxies 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 (Form B.), and also clearly indicates the evidence for proxy. 3. Preventive Measures for Misuse of Inside Information 3.1 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, management 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 management, the Company has notified the Board of Directors and the management 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 management 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 shareholding within 3 working days and their shareholding agenda shall be report to the management meeting monthly. Last year, there was no misuse of inside information.

Good Corporate Governance

3.2 The Companyâ&#x20AC;&#x2122;s directors and management 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 management have to report the changing in their interests every time when it occurs. The Company Secretary is responsible in gathering such information. 3.3 The Board of Directors has established procedure to prohibit the directors or management who may have conďŹ&#x201A;icts of interests to involve in the consideration process. Before the Board of Directorsâ&#x20AC;&#x2122; 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.

Roles Of Stakeholders 1. Treatment 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 Companyâ&#x20AC;&#x2122;s website. The Company has done through the following actions. 1.1 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. 1.2 Customers: t 5IF $PNQBOZ JT BUUFOUJWF BOE SFTQPOTJCMF UP DVTUPNFST DPNQMJFT XJUI BMM BHSFFNFOUT made with customers, treats every customer equally and fairly, commits to satisfaction and conďŹ dence to customers in order to get quality service. t 5IF $PNQBOZ QSPWJEFT BWJBUJPO SFGVFMMJOH TFSWJDF DPOGPSNJOH UP JOUFSOBUJPOBM TUBOEBSE on time, with highest safety, which receives the certiďŹ cation ISO 9001 and OHSAS 18001. t 5IF $PNQBOZ IBT DVTUPNFS TBUJTGBDUJPO TVSWFZ TZTUFN XIJDI JT POF PG ,FZ 1FSGPSNBODF Indicators (KPIs) of the Company. t 5IF $PNQBOZ IBT BDUJWJUJFT UP QSPNPUF HPPE SFMBUJPOTIJQT PVUTJEF UIF $PNQBOZ 5IF activities in 2010 are such as meeting with customers in each festival, designating service signature, for etc. 1.3 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, not asks for, receives, and gives beneďŹ t that dishonest to trade partners. In 2010, the Company sets JV Core Principle Policy as a tool to prevent the disclosure of sensitive information. 1.4 Creditors: The Company complies with all agreements made with creditors, provides complete ďŹ nancial information, not asks for, receives, and gives beneďŹ t that dishonest to creditors. 1.5 Competitors: The Company conducts within the framework of good competition,

Good Corporate Governance

does not acquire the conďŹ dential information of competitors in dishonest or inappropriate way, and not ruin the reputation of competitors by accusation without truth information. 1.6 Employees: All employee are important part of business, therefore the Company realizes the importance of developing the employees, provides reasonable compensation and fringe beneďŹ ts to the employee as well as supports the employeesâ&#x20AC;&#x2122; participation as follows: t )BWF SFHVMBUJPO SFHBSEJOH DPNQFOTBUJPO BOE FNQMPZFF CFOFmUT t 1SPWJEF SFBTPOBCMF DPNQFOTBUJPO BOE GSJOHF CFOFmU F H TBMBSZ CPOVT SFUJSFNFOU GVOE life insurance, accident insurance and health insurance. t 1SPWJEF PSJFOUBUJPO UP OFX FNQMPZFFT FEVDBUF UIFN BCPVU DPEF PG DPOEVDU DPSF value, safety, quality system, fundamental knowledge, as well as giving them on the job training. t )BWF QPMJDZ UP QSPNPUF FNQMPZFF EFWFMPQNFOU JO TZTUFNBUJD XBZ CZ BEPQUJOH Competency Model as the standard in personnel training plans, such as Competency and Potential Assessment, Training Roadmap, Individual Development Plan, Career Development Plan, Succession Plan, for etc. t 1SPWJEF FEVDBUJPO TVQQPSU QSPHSBNT F H TDIPMBSTIJQT GPS FNQMPZFFT t 5IF $PNQBOZ IBT BDUJWJUJFT UP QSPNPUF HPPE SFMBUJPOTIJQT JOTJEF UIF $PNQBOZ 5IF activities in 2010 are such as happy hours activity, dissemination of the Compnayâ&#x20AC;&#x2122;s information through social networks: facebook, for etc. t 1SPNPUF FNQMPZFFT UP VTF SFTPVSDFT FGmDJFOUMZ XJUI NBYJNVN CFOFmU BOE OPU CF used for personal gain. t 1SPWJEF TBGFUZ XPSL FOWJSPONFOU GPS FNQMPZFF T MJGF IFBMUI BOE QSPQFSUZ BT XFMM BT educate and train them about environment regularly. 1.7 Social and Environment: t 5IF $PNQBOZ SFBMJ[FT UIF JNQPSUBODF PG $PSQPSBUF 4PDJBM 3FTQPOTJCJMJUZ $43 CZ providing Social Responsibility Policy, and conducts activities that support CSR and community development such as Soldier Moral Improvement Program (MorOuam-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, Environmental Project with Effective Microorganisms, for etc, which is disclosed in the Companyâ&#x20AC;&#x2122;s website. t 5IF $PNQBOZ IBT FTUBCMJTIFE 4BGFUZ 0DDVQBUJPOBM )FBMUI BOE &OWJSPONFOUBM 1PMJDZ and Social Responsibility and Work Force Policy. t 5IF $PNQBOZ DPODFSOT BCPVU FOWJSPONFOUBM GBDUPS JO JUT PQFSBUJPO *O UIF Company has set up Global Warming Mitigation Committee, establishing plan, objectives, and campaign on renewable energy, for etc. Moreover, the Company was chosen from Thailand Greenhouse Gas Management Organization (TGO) and National Metal and Materials Technology Center (MTEC) as a pilot organization in â&#x20AC;&#x153;Organizational Carbon Footprintâ&#x20AC;? Project.

Good Corporate Governance

t 5IF $PNQBOZ JT JO UIF QSPDFTT PG EFmOJOH "OUJ #SJCFSZ BOE $PSSVQUJPO 1PMJDZ UP CF more explicit as the Board of Directors realizes that it is serious issue for economy and social. In addition, the Company is in the process of establishing the Policy of not violate human rights and not violate any intellectual property or copyright. 2. Stakeholdersâ&#x20AC;&#x2122; Participation 2.1 The Company provides stakeholders with opportunities to participate in various activities such as encouraging shareholders to express their opinions, give recommendation, propose meeting agenda and director nominee in the shareholdersâ&#x20AC;&#x2122; meeting, inviting customers and trade partners to participate in the Companyâ&#x20AC;&#x2122;s activities e.g. Jet Fuel Talk activity, 9 oil companies bowling tradition for etc. Furthermore, the Company has supported the management, employees of the Company and subsidiaries, teachers, instructors, students, and general public to participate in CSR activities such as â&#x20AC;&#x153;Love our Kingâ&#x20AC;? Project to sign blessing to His Majesty the King while staying at Siriraj Hospital, which is held every monthly, Soldier Moral Improvement Program (Mor-OuamBam-Rung-Kwan-Ta-Harn), which is held every 2 months, for etc. 2.2 The Company provides channel for stakeholders to send recommendation, opinion or question to the Company via Investor Relations Section, and also discloses the sufďŹ cient information to enhance the efďŹ ciency of stakeholdersâ&#x20AC;&#x2122; participation. 3. Filing of Complaints 3.1 The Company provides channel for ďŹ ling complaints and reporting about the violation in code of conduct of the directors, management and employees, and has investigation process after acknowledging such matters. 3.2 Stakeholders can contact or complain via Investor Relations Section, which is under the responsibility of the Company Secretary and Managing Director Department. The question and recommendation shall be passed to the related department and in case that there is any important issue; the Company Secretary shall propose it to the Board of Directors.

Information Disclosures And Transparency The Company realizes the importance of disclosing both ďŹ nancial and non-ďŹ nancial information correctly, completely, in a timely manner, transparency via accessible, equal, and reliable channel as follows: 1.1 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 2010, the Company has no history of late submission of ďŹ nancial statements or has been ordered to amend the ďŹ nancial statements. 1.2 The material information consists of ďŹ nancial and non-ďŹ nancial information. The ďŹ nancial information, particularly the ďŹ nancial statements, was reviewed/audited by the external auditor, was unconditionally accepted, and shown that the Statements of ďŹ nancial position, operation, change in shareholdersâ&#x20AC;&#x2122; equity, and cash ďŹ&#x201A;ow were accurate, in line with the generally accepted accounting principles, and was assented by the Audit Committee/the Board of Directors before disclosing to shareholders.

Good Corporate Governance

The non-financial information that the Company constantly discloses is Management Discussion and Analysis (MD&A) on a quarterly basis and Newsletter semiannually. 1.3 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. 1.4 Investors Relations Section (Tel. 02 834 8914, 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 2010, the main activities were as follows: 2010 Activities Analyst Meeting

Times 6

Credit Rating Review E-mail / Phone Call

1 1-2 times/day

Participate activities of the SET and other parties to meet investors

Arrange institutional and retail investors to meet the management and visit the Company

1.5 The Company provides channel to access to the Company’s information via www.bafsthai.com in Thai and English. The information includes vision, mission, nature of business of the Company and subsidiaries, shareholding structure, organization chart, the Board of Directors, the Management, Investor Relations, various policies e.g. Corporate Governance Policy, Risk Management Policy, Social Responsibility Policy and the implementation, Code of Conduct, financial information, Annual Report (Form 56-2), Annual Registration Statement (Form 56-1), notification to the SET, the invitation letter and minutes of shareholders’ meeting, risk management for etc., where the information is consistently updated. 1.6 The Company has disclosed information in Annual Report such as financial and operation information, nature of business and competition, risk factors, various policies e.g. Corporate Governance Policy, Social Responsibility Policy and the implementation, Code of Conduct, background and shareholding of the directors and management, type of director, duties of the Board of Directors and various committees in previous year 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 management as well as the remuneration received from the Company and its subsidiaries for etc.

Good Corporate Governance

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 management. 5.1 Composition of the Board of Directors 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. 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 management. 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 management. 5.1.5 The directorship term of the Board of Directors has been definitely prescribed in articles of association of the Company that one third of the directors who has longest term, has to terminate its directorship. 5.1.6 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 and other committees every time, and also used his knowledge, competent, and dedicated time to perform the responsibility competently. 5.1.7 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. 5.1.8 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.

Good Corporate Governance

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 2010, the Committee held 5 meetings, with the attendance of each director as follows: Meeting Attendance/ Total Meeting (times) 1. Mr. Pachara Yutidhammadamrong

Chairman

5/5

2. Mr. Visut Montriwat

Director

5/5

3. Mr. Sumon Surathin

Director

5/5

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 management and concerned persons, and performing any other functions assigned by the Board of Directors.”

Good Corporate Governance

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 2010 reveals that the Audit Committee performs its duties completely as specified in the Audit Committee Charter and has Good-to-Very Good” 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 2010, the Committee held 3 meetings, with the attendance of each director as follows: Meeting Attendance/ Total Meeting (times) 1. Mr. Visut Montriwat

Chairman

3/3

2. Mr. Sumon Surathin

Director

3/3

3. M.R. Supadis Diskul

Director

3/3

with Mr. Chattaya Bhandhaya, Senior Finance and Account Manager serves as the secretary of the Committee. 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 the overall assessment to evaluate the effectiveness of its performance annually, The assessment result in the year 2010 reveals that the Remuneration Committee performs its duties in Very Good-to-Excellent Level. 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 2010, the Committee held 4 meetings, with the attendance of each director as follows:

Good Corporate Governance

Meeting Attendance/ Total Meeting (times) 1. Mr. Aswin Kongsiri

Chairman

4/4

2. Mr. Navee Lertphanichkul

Director

4/4

3. M.R. Supadis Diskul

Director

4/4

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 has the overall assessment to evaluate the effectiveness of its performance annually, The assessment result in the year 2010 reveals that the Nominating Committee performs its duties in Very Good-to-Excellent Level. 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 2010, the Committee held 4 meetings, with the attendance of each director as follows: Meeting Attendance/ Total Meeting (times) 1. Mr. Aswin Kongsiri 2. Mr. Vinai Chamlongrasdr 3. M.R. Supadis Diskul 4. Mr. Ditsapong Prithaveepong

Chairman

4/4

Director

4/4

Director

4/4

Director and Secretary

4/4

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.”

Good Corporate Governance

In addition, in every meeting the Risk Management Committee has considered Key Risk Indicators e.g. EBITDA, cash ﬂow, expenditure control, market share etc., in order to ensure the performance of the Company shall meet its objective. In case that the performance is likely to be lower than targeted, the Risk management Committee shall direct the management to have controlling measures such as cost reduction, asset management to push the performance in the speciﬁed target, thus the dividend can be paid to the shareholders in line with the dividend policy. The Risk Management Committee has the overall assessment to evaluate the effectiveness of its performance annually. The assessment result in the year 2010 reveals that the Risk Management Committee performs its duties in Very Good-to-Excellent Level. 5.3

Roles, Duties and Responsibilities of the Board of Directors 5.3.1 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. In 2010, the Company has no history of any incompliance matter. 5.3.2 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 management’ 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. 5.3.3 The Company clearly segregates the structures, roles, duties and responsibilities of the Board of directors and the management. Power of attorney is issued to specify the scope and level of authority for the management engaging in certain business transactions on behalf of the Company. Moreover, the Company regularly communicates the roles, duties and responsibilities to such related persons. 5.3.4 The Company has provided Corporate Governance Policy and Code of Conduct to the directors, management and employees to use as a guideline in performing their duties to accomplish the mission of the Company, which is communicated throughout the Company. 5.3.5 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. The Company has encourage the compliance of Code of Conduct, and also has the system to monitor i.e. conducting on line self assessment annually. 5.3.6 The Company has continually arranged training course about good corporate governance and Code of Conduct annually, and has also educated the management and employees via monthly internal journal since the year 2003.

Good Corporate Governance

5.3.7 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 such agenda. 5.3.8 The information, necessities and rationale about transactions that may have conflict of interests in the year 2010 are disclosed by complying with Regulations of the SEC as per details in the topic of “Connected Transactions”. 5.3.9 The Company has internal control system and system to monitor the operation of its subsidiaries, appropriately and effectively. 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 CommissionEnterprise 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 2010”. 5.3.10 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. 5.3.11 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. 5.3.12 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.

Good Corporate Governance

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 2010, the Board of Directors held 5 regular meetings. The attendance of each director is as follows: Names

Meeting Attendance/ Total Meeting (# of times)

1. Mr. Palakorn Suwanrath

5/5

2. M.R. Supadis Diskul

5/5

3. Flight Lieutenant Montree Jumrieng

4/5

4. Mr. Chokchai Panyayong

5/5

5. SQN.LDR.Asdavut Watanangura

0/1

6. Mr. Serirat Prasutanond

2/5

7. Mr. Ath Hemvijitraphan

5/5

8. Mr. Tanachai Vienravee

5/5

9. Mr. Navee Lertphanichkul

4/5

10. Mr. Vinai Chamlongrasdr 11. Mr. Nuttachat Charuchinda

5/5 2/

3/4

12. Mr. Aswin Kongsiri

5/5

13. Mr.Pachara Yutidhammadamrong

5/5

14. Mr.Visut Montriwat

5/5

15. Mr.Sumon Surathin

5/5

* Mr. Tevin Vongvanich 3/

0/0

* Flying Ofﬁcer Norahuch Ployyai 4/

2/4

Remarks: 1/

Assume director since Dec 16, 2010. Therefore, the number of total meeting is 1 time.

Assume director since May 13, 2010. Therefore, the number of total meeting is 4 times.

Resigned from director since February 16, 2010. Therefore, there is no number of meetings.

Resigned from director since Dec 1, 2010. Therefore, the number of total meeting is 4 times.

Good Corporate Governance

5.4.3

In the Board of Directors’ meetings, the Chairman allocates sufﬁcient time for the

management 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 management 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. 5.5

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 2010 reveals that the Board of Directors performed duties in Good-to-Best level. 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. 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.

Good Corporate Governance

Remuneration for the Management: 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 management as per details in the topic of “Shareholder and Management Structure - Remuneration for the Board of Directors and Management.” 5.7

Development for the Directors and Management 5.7.1 The Company supports and facilitates training and educating the Boards of Directors, the management and all employees thus continually improving the performance. 5.7.2 The Board of Directors has establish “CG Policy” manual 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. 5.7.3 The Company arranges orientation for new director, whereby Managing Director, relevant management, company secretary shall present the information regarding shareholding structure, organization chart, nature of business, performance of the Company, subsidiaries, the Board of Directors’ meeting and other relevant information. 5.7.4 The Company supports 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, Successful Formulation and Execution of Strategy, Monitoring the System of Internal Control and Risk Management and Monitoring the Internal Audit Function etc. The Company also enhances knowledge of the management and related persons in Corporate Governance of the Company e.g. Company Secretary and Internal Audit for etc. 5.7.5 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 management when they can not perform their duties. From the commitment to Good Corporate Governance, in the year 2010, the Company received Excellent Corporate Governance Scoring from Thai Institute of Directors (IOD) as same as last year. Moreover, the Company received honorable awards such as National Award of the Outstanding for Enterprise of Safety Operations, Occupational Health and Working Environment in 2010 in 2 areas i.e. Don Mueang Depot and Suvarnbhumi Intoplane.

Management Discussion and Analysis for the Operating Results in 2010 1. Report and Analysis of the Operating Results In 2010, volume of fuel serviced was increased by 4.9% (y-o-y) to 4,317 million liters from last year at 4,117 million litres where as the number of flights services was increased by 6.6% (y-o-y) to 150,639 from 141,336. Besides, volume increased, the major factors influent Company’s services income and net profit was Storage fee discounting period are expired since Mar. 31, 2010 and this project was succeed on plan. However, average market share of refuelling business would slightly dropped to 88% but still higher than our target market share at 85%. Company’s operation can summarized are as follows: 1.1 Revenue For 2010, total revenues of BAFS and its subsidiaries amounted to Baht 2,219.9 million which increased of Baht 184.9 million or 9.1%. The Company revenue was comprised of 1.1.1 Services Income Services income of BAFS and its subsidiaries amounted to Baht 2,172.3 million, an increase of Baht 175.4 million or 8.8% when compared with that of last year. 1.1.2 Other Income 1.1.2.1 Rental Income The rental income was Baht 19.2 million, increasing by Baht 2.5 million or 15.0% compared to that of the last year. And in this year, BAFS received new rental income item from the receiving diesel pipeline system at the amount of Baht 2.0 million. 1.1.2.2 Other Income Other income was Baht 28.4 million, increasing by Baht 7.0 million or 32.6% compared to that of the last year. Major items were (1) loan repayment from Fuel Pipeline Transportation Limited (FPT) which is the related company by Baht 17.7 million (2) interest income from short term investment in T-Bill of Baht 12.7 million and (3) guarantee fee of BAFS subsidiaries’s liabilities of Baht 6.8 million. In 2010, BAFS and its subsidiaries have unrealized FX loss by Baht 0.4 million when compared to unrealized FX loss of last year of Baht 0.6 million as result of Thai Baht appreciated against US$ from 34.34 Bt./US$ in 2009 to 31.70 Bt./US$. 1.2 Expenses 1.2.1 Cost of Services In 2010, Cost of services was Baht 930.4 million, increased by Baht 34.9 million or 3.9% compared to that of the last year which major items are (1) Airport concession fees of Baht 235.4 million, increased by Baht 7.4 million or 3.3% which conform with increased in volume (2) maintenance expense at amount of Baht 64.5 million which increased by Baht 10.6 million (3) insurance premium at amount of Baht 32.3 million which increased by Baht 5.6 million etc.

Management Discussion and Analysis for the Operating Results in 2010

1.2.2 Administrative Expenses Administrative expenses for 2010, was Baht 367.5 million, increasing by Baht 45.1 million or 14.0% when compared to that of the last year which mainly items are (1) management benefit expenses of Baht 81.5 million which increased by Baht 8.2 million or 11.2% (2) damageable expense in JP-One Assets Company Limited’s pipeline that was not yet compensated from Insurance and relevant parties of Baht 18.2 million which we anticipated that will receive in 2011 and (3) Public Relations and Corporate social responsibility expense of Baht 8.1 million which increased by Baht 2.9 million etc. In 2010, Company have depreciation and amortization of Baht 357.1 million, decreased by Baht 7.9 million or 2.2%, employees benefit expenses of Baht 410.0 million which increased by Baht 39.6 million or 10.7% and the impairment loss from assets not used in operation of Baht 19.9 million which are land, design fee and underground pipeline for the main depot facilities project at Chiangmai Airport. 1.2.3 Finance Costs Finance Costs for 2010 was Baht 86.2 million which decreasing by Baht 20.8 million or 19.5% when compared to that of the last year as decreasing in the principal of long term loan which decreased by loan payment schedule. Mainly comprised of interest payment for long term loan and interest payment for financial lease of BAFS at amounted of Baht 64.0 million. Besides that of these items was TARCO’s and JP-One’s Finance Costs at Baht 22.2 million. 1.3 Operating Results For 2010, Net profit of BAFS and its subsidiaries amounted to Baht 521.7 million, an increased of Baht 58.7 million or 12.7% which is equivalent an earning per share of Baht 1.02 when compared with last year, as result of various factors as discussed above. The Board of Directors’ Meeting No.1/2011 held on February 23, 2011 resolved to pay dividend for 2010’s performance at the rate of Baht 0.54 per share which accounted to be the total amount of Baht 275.4 million or accounted for payout ratio of 63.2% of net profit before reserve of the company only. Interim dividend was paid at the rate of Baht 0.18 per share and the rest of dividend would be paid at Baht 0.36 per share. The Company fixed the share registration book closing date for the right to receive dividend on May 4, 2011 and fixed the dividend payment date to be May 16, 2011.

2. Report and Analysis of Financial Status 2.1

Assets As at December 31, 2010 the Company’s group had total assets in the amount of Baht 6,684.9 million, decreased by Baht 158.7 million or 2.3% from December 31, 2009. The important details are as follows:

Management Discussion and Analysis for the Operating Results in 2010

2.1.1

Cash, Cash equivalent and short term investment of the Company’s group is Baht

936.3 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 1,139.0 million from consolidated net profit before minority interest and adjusted with items such as depreciation and amortization of Baht 357.1 million, amortization of right to use of land and concession of subsidiary at Baht 28.1 million, impairment loss from asset at Baht 19.9 million and unrealized loss from FX at Baht 0.4 million. - Net Cash flow used in investment was Baht 20.4 million which was purchased in other asset and equipment at amount of Baht 50.0 million, receiving loan from Fuel Pipeline Transportation Limited (FPT) which is the related company by Baht 17.7 million and interest received of Baht 12.7 million. - Net Cash flow used in financing was Baht 951.7 million which was long term loan principal payment and financial lease at the amount of Baht 602.6 million, interest payment was of Baht 88.1 million and dividend payment for 2H/2009 and 1H/2010 of the company at the amount of Baht 244.8 million respectively. 2.1.2

Property, leasehold improvement and equipment at December 31, 2010 was Baht

4,692.0 million decreased by Baht 373.7 million or 7.4% from December 31, 2009. 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 658.9 million. 2.2

Liabilities As at December 31, 2010, the Company’s group had total liabilities of Baht 3,122.5

million, decreased by Baht 448.4 million or 12.6% compared from December 31, 2009 and resulted in debt to equity ratio improved to 0.88 : 1 time from 1.09 : 1 time. Liabilities comprised of major items as follows: 2.2.1

Account payable of Baht 143.8 million which comprised of account payable –

relatedcompany’s group of Baht 125.9 million and others account payable of Baht 17.9 million. 2.2.2

Portion of long term loan which to be paid of Baht 479.9 million which are

comprised of long term loan which to be paid for BAFS of Baht 294.2 million, TARCO’s long term loan which to be paid of Baht 161.7 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 5.4 million which was belonging to BAFS Baht 2.4 million, TARCO’s Baht 2.0 million and JP-One’s Baht 1.0 million. 2.2.3

Other current liabilities of Baht 179.1 million which comprised of major items

such as accrued corporate income tax of Baht 83.1 million and others of current liabilities of Baht 96.0 million.

Management Discussion and Analysis for the Operating Results in 2010

2.2.4 Long term loan from bank of Baht 2,021.4 million decreased by Baht 426.1 million or 17.4% when compared December 31, 2009 which BAFS and subsidiaries were extended in loan agreement that details are - The first portion of Baht 254.0 million was long term loan from KBANK due at Aug. 31, 2018 which was semi-annual, principal repayment : Baht 22.2 million/period, the rest principal will be paid in the last, at rate of THBFIX 6-month + 1.15% and Company entered into an interest rate swap agreement to swap the above interest rate to a fixed rate at 5.8% and effective from February 2011 onward. - The second portion of Baht 1,172.4 million was long term loan from BBL due at Dec. 31, 2018 which was quarterly, principal repayment: Baht 41.9 million/period, the rest principal will be paid in the last, at rate of 3-month fixed deposit rate +1.5% and effective from March 2011 onward. - The third portion of Baht 195.0 million was long term loan from NBANK due at Nov. 31, 2018 which was quarterly, principal repayment : Baht 6.25 million/period and the rest principal will be paid in the last. In addition, interest rate of this loan was reduced from MLR-2.0% to MLR-2.5% for the first 3 years and then back away to MLR-2.0% in the 4th year. - The forth portion was TARCO’s loan of Baht 376.0 million from BBL which comprised of (1) USD loan that TARCO already swap to Thai Baht at Baht 54.4 million, due at Dec. 31, 2012 which was quarterly, principal repayment : Baht 13.6 million/period and the rest principal will be paid in the last, at fixed rate 6.56% (2) THB baht loan of 233.3 million, due at Dec. 31, 2014 which was quarterly, principal repayment : Baht 19.45 million/period and the rest principal will be paid in the last, at rate of 3-month fixed deposit rate +1.75% and (3) THB baht loan of 88.3 million, due at Dec. 31, 2014 which was quarterly, principal repayment : Baht 7.37 million/period and the rest principal will be paid in the last, at rate of MLR-2.25%. - The remaining portion was JP-One loan at amount of Baht 24.0 million from BBL, due at Dec. 31, 2012 which was monthly principal repayment: Baht 2.0 million/ period at rate of MLR-1.0%. 2.3 Shareholders’ Equity As at December 31, 2010, shareholders’ equity of the Company’s group was Baht 3,562.3 million, increasing from December 31, 2009 by Baht 289.7 million or 8.9%.

3. Major factors that may affect operating performance or ﬁnancial status The Company’s group has contingent liability from providing a bank guarantee to TARCO for outstanding amount from total long term loan of Baht 537.7 million (including portion to be paid in one year). Moreover, the Company has contingent liability from providing a bank guarantee to JPOne for a proportion of 50.0% of outstanding amount from total long term loan since established which up to present the amount is Baht 24.0 million (including portion to be paid in one year).

Report of the Board of Director Responsibilities for 2010 Financial Statements 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 provide stakeholders with the confidence that the Company’s financial statements is prepared in accordance with the above objectives, the Board of Directors has appointed the Audit Committee, which consists of qualified independent directors as prescribed by the Securities and Exchange Commission and performs duties as prescribed by 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 law on Securities and Exchange Commission, the regulations of the Stock Exchange of Thailand, laws related to the Company’s business, and commitments, as well as the compliance with the connected transaction regulation, considering and proposing the appointment and the remuneration of the Company’s external auditors. The Board of Directors agreed with the opinions of the Audit Committee that the consolidated and separate financial statements ended 31 December 2010 and 2009, and the operation information, change in shareholders’ equity, 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

M.R. Supadis Diskul Managing Director

Auditor Of Report

The Shareholders and Board of Directors of Bangkok Aviation Fuel Services Public Company Limited

I have audited the consolidated balance sheets of Bangkok Aviation Fuel Services Public Company Limited and subsidiaries as at December 31, 2010 and 2009, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended and the balance sheet of Bangkok Aviation Fuel Services Public Company Limited as at December 31, 2010 and 2009, the related statements of income, changes in shareholders’ equity and cash flows for the years 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 audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bangkok Aviation Fuel Services Public Company Limited and subsidiaries as at December 31, 2010 and 2009, the consolidated results of their operations, the consolidated changes in their shareholders’ equity and their consolidated cash flows for the years then ended and the financial position of Bangkok Aviation Fuel Services Public Company Limited as at December 31, 2010 and 2009, the results of its operations, the changes in its shareholders’ equity and its cash flows for the years 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 23, 2011

Balance Sheets As At December 31, 2010 and 2009

In Baht Consolidated

Separate

Financial Statement

2010

2009

2010

2009

5 6.1 7 4

843,154,030 93,185,184

676,264,250 92,539,705

595,431,694 91,000,000

413,988,494 91,000,000

217,288,457 1,904,953

199,122,424 4,329,436

204,456,731 1,904,953

184,921,823 4,329,436

1,013,129 14,813,690

329,795 12,787,054

3,645,226 10,875,121

3,929,655 9,482,841

24,943,905 14,266,639 11,260,565

21,471,021 7,016,838 7,139,782

16,910,159 11,444,628 4,972,267

14,879,839 5,756,368 5,529,949

1,221,830,552

1,021,000,305

940,640,779

733,818,405

5,616,518 -

5,588,827 -

1,836,000,000 -

4,692,047,809 38,763,318 658,942,840 12,875,328 47,953,340

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

2,579,228,008 10,676,104 47,953,340

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

6,847,533

8,870,878

6,606,033

8,666,378

TOTAL NON-CURRENT ASSETS

5,463,046,686

5,822,561,384

4,480,463,485

4,730,575,075

TOTAL ASSETS

6,684,877,238

6,843,561,689

5,421,104,264

5,464,393,480

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

Notes

TOTAL CURRENT ASSETS NON-CURRENT ASSETS Restricted ﬁxed deposits with ﬁnance institutions Investments in subsidiary companies 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 Assets not used in operation - net Other non-current assets Others

6.2 8 9 4 10 2.3 2.4 11 12

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

Balance Sheets As At December 31, 2010 and 2009

In Baht Consolidated

Separate

Financial Statement

2010

2009

2010

2009

125,901,776

41,105,665

166,795,003

78,750,873

17,926,735

21,008,422

13,811,452

13,720,215

5,412,387

12,560,470

2,388,146

9,817,590

479,905,702

655,035,462

294,187,302

361,587,302

Corporate income tax payable

83,079,617

55,408,514

26,747,621

6,591,376

Accounts payable - other

23,582,758

7,227,134

13,711,975

5,134,552

Others

72,455,058

65,635,705

57,708,770

57,748,658

808,264,033

857,981,372

575,350,269

533,350,566

8,136,947

6,724,534

1,588,128

3,671,144

Long-term loans from banks - net

2,021,386,652

2,447,451,874

1,621,368,252

1,915,555,554

Reserve for employee’s beneﬁt

274,743,367

253,634,038

267,675,386

247,950,272

10,017,633

5,158,000

739,992

302,875

TOTAL NON-CURRENT LIABILITIES

2,314,284,599

2,712,968,446

1,891,371,758

2,167,479,845

TOTAL LIABILITIES

3,122,548,632

3,570,949,818

2,466,722,027

2,700,830,411

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

TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Liabilities under ﬁnance lease agreementsnet off current portion

Other non-current liabilities

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

Balance Sheets As At December 31, 2010 and 2009

In Baht Consolidated

Separate

Financial Statement

2010

2009

2010

2009

509,998,044

509,997,325

434,975,000

50,999,804

882,599,762

807,908,477

882,599,762

807,908,477

1,523,539,165

1,321,328,907

1,075,810,346

959,682,463

3,402,111,056

3,125,209,513

2,954,382,237

2,763,563,069

160,217,550

147,402,358

3,562,328,606

3,272,611,871

2,954,382,237

2,763,563,069

6,684,877,238

6,843,561,689

5,421,104,264

5,464,393,480

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

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

Statements of Income For The Years Ended December 31, 2010 and 2009

In Baht

Notes

Consolidated

Separate

Financial Statement

2010

2009

REVENUES Service income

2,172,236,264 1,996,842,988 1,480,372,795 1,343,811,274

Other income Rental income Dividend receive from subsidiaries

19,187,947

16,689,694

34,794,752

32,885,958

148,751,608

133,723,659

28,439,293

21,443,659

57,607,067

53,964,700

Other TOTAL REVENUES

2,219,863,504 2,034,976,341 1,721,526,222 1,564,385,591

EXPENSES Cost of services

930,443,456

895,498,984

777,064,918

745,955,511

Administrative expenses

285,993,799

249,067,372

234,426,236

219,737,409

Management beneﬁt expenses

16,21

Amortization of concession of subsidiaries Loss on impairment of assets

TOTAL EXPENSES

81,538,372

73,346,466

77,874,610

70,324,547

28,061,713

19,938,000

1,345,975,340 1,245,974,535 1,109,303,764 1,036,017,467

PROFIT (LOSS) BEFORE FINANCE COST AND INCOME TAX EXPENSES FINANCE COSTS PROFIT (LOSS) BEFORE INCOME

873,888,164

789,001,806

612,222,458

528,368,124

86,199,157

107,015,475

63,992,390

76,374,742

787,689,007

681,986,331

548,230,068

451,993,382

237,008,351

191,630,444

112,613,372

78,536,955

550,680,656

490,355,887

435,616,696

373,456,427

521,699,071

463,045,916

435,616,696

373,456,427

28,981,585

27,309,971

1.02

0.91

0.85

0.73

509,997,325

TAX EXPENSES CORPORATE INCOME TAX EXPENSES 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)

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

74 509,997,325

Appropriated

434,975,000

50,999,804

(25,392,698)

76,392,502

882,599,762

74,691,285

807,908,477

(36,623,004)

71,237,299

773,294,182

1,523,539,165

(91,799,051)

521,699,071

(74,691,285)

(152,998,477)

1,321,328,907

(66,299,327)

463,045,916

62,015,702

(71,237,299)

(127,498,707)

1,061,302,622

Unappropriated

Retained earnings premium Legal reserve Other reserve

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

Balance as at December 31, 2010

Net proﬁt of minority interest

Dividend payment by subsidiary

Interim dividend

Net proﬁt for the year

18 -

509,997,325 18

Dividend payment by subsidiary

Other reserve

Dividend payment

Balance as at December 31, 2009

Interim dividend payment

Net proﬁt of minority interest

509,997,325

Net proﬁt for the year

reserve in subsidiary account

Reversal of legal reserve and other

Other reserve

Dividend payment by subsidiary

Dividend payment

Balance as at January 1, 2009

Notes share capital

paid-up

Issued and

Shareholder’s equity of the parent company

Consolidated Financial Statement

3,402,111,056

(91,799,051)

521,699,071

(152,998,477)

3,125,209,513

(66,299,327)

463,045,916

(127,498,707)

2,855,961,631

Total

27,309,971

(66,299,327)

463,045,916

(14,823,340)

(127,498,707)

28,981,585

(7,170,941)

(91,799,051)

521,699,071

(8,995,452)

(152,998,477)

160,217,550 3,562,328,606

28,981,585

(7,170,941)

(8,995,452)

147,402,358 3,272,611,871

27,309,971

(14,823,340)

134,915,727 2,990,877,358

interest

Minority

In Baht

Statements of Changes

In Shareholders’ Equity For The Years Ended December 31, 2010 and 2009

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

Balance as at December 31, 2010

509,997,325

Interim dividend payment

Other reserve

509,997,325

Net proﬁt for the year

18 -

509,997,325

share capital

Dividend payment

Balance as at December 31, 2009

Interim dividend payment

Net proﬁt for the year

Other reserve

Dividend payment

Balance as at January 1, 2009

Notes

paid-up

Issued and

434,975,000

50,999,804

882,599,762

74,691,285

807,908,477

373,456,427

71,237,299

736,671,178

Total

(66,299,327)

(127,498,707)

(91,799,051)

435,616,696

(152,998,477)

1,075,810,346 2,954,382,237

(91,799,051)

435,616,696

(74,691,285)

(152,998,477)

959,682,463 2,763,563,069

(66,299,327)

373,456,427

(71,237,299)

(127,498,707)

851,261,369 2,583,904,676

Unappropriated

Retained earnings Appropriated

premium Legal reserve Other reserve

Separate Financial Statement

In Baht

Statements of Changes In Shareholders’ Equity For The Years Ended December 31, 2010 and 2009

Statements of Cash Flows For The Years Ended December 31, 2010 and 2009

In Baht Consolidated

Separate

Financial Statement

2010

2009

2010

2009

550,680,656

490,355,887

435,616,696

373,456,427

357,079,615

364,993,300

263,308,325

273,225,116

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 right to use of land 28,061,713

28,061,713

Reversal of allowance for doubtful accounts

and concession of subsidiary

(17,659,400)

Increase in reserve for employees’ beneﬁt

21,109,329

9,242,878

19,725,114

8,040,319

(661,410)

911,409

(501,395)

895,925

381,836

550,397

321,937

414,857

19,938,000

(148,751,608)

(133,723,659)

(12,760,037)

(10,987,957)

(11,192,042)

(9,080,603)

992,559

1,684,206

609,376

1,117,132

85,206,598

105,331,269

63,383,014

75,257,610

237,008,351

191,630,444

112,613,372

78,536,955

1,269,377,810 1,164,114,146

737,411,389

650,480,679

Loss (gain) on diposal and written-off fixed assets Unrealized (gain) loss Loss on impairment of assets 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

(16,059,884)

(51,002,812)

(17,428,759)

(43,852,399)

(686,938)

57,928

280,825

306,247

Amounts due from and advances to related companies Inventory of spare parts

(2,026,636)

1,131,093

(1,392,280)

864,843

(13,512,653)

(814,155)

(6,018,676)

(291,403)

(38,271)

(104,185)

(1,271)

(8,184)

Trade accounts payable

81,712,137

12,383,666

88,135,367

20,718,827

Other current liabilities

25,097,809

(7,257,970)

10,454,614

(9,581,315)

4,859,633

(443,500)

437,117

(438,871)

1,348,723,007 1,118,064,211

Other current assets Other non-current assets Operating liabilities increase (decrease)

Other non-current liabilities Cash generated from operations Receipt of refunded income tax Payment for income tax Net cash from (used in) operating activities

811,878,326

618,198,424

2,080,715

(209,719,493)

(171,395,049)

(92,457,127)

(71,945,579)

1,139,003,514

948,749,877

719,421,199

548,333,560

Statements of Cash Flows For The Years Ended December 31, 2010 and 2009

In Baht Consolidated

Separate

Financial Statement

2010

2009

2010

2009

(668,565)

(1,500,000)

(27,691)

(126,569)

17,659,400

148,751,608

133,723,659

12,727,773

11,702,921

11,053,140

9,979,510

(50,036,559)

(23,726,944)

(36,854,452)

(10,009,412)

(2,187,713)

(2,601,718)

(1,597,498)

(2,216,592)

2,169,147

584,145

515,000

584,145

(20,364,208)

1,991,235

139,527,198

149,720,710

(1,434,109)

(10,611,939)

(5,210,899)

(7,613,043)

(601,168,262)

(519,995,942)

(361,587,302)

(301,587,302)

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES 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 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

(16,166,393)

(14,823,340)

(244,797,528)

(193,798,034)

(244,797,528)

(193,798,034)

(88,121,988)

(109,014,167)

(65,909,468)

(78,377,543)

(951,688,280)

(848,243,422)

(677,505,197)

(581,375,922)

166,951,026

102,497,690

181,443,200

116,678,348

(61,246)

(29,929)

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 166,889,780

102,467,761

181,443,200

116,678,348

Cash and cash equivalents at beginning of year

equivalents

676,264,250

573,796,489

413,988,494

297,310,146

Cash and cash equivalents at end of year

843,154,030

676,264,250

595,431,694

413,988,494

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

GENERAL INFORMATION 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 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 include 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 As at As at December December 31, 2010 31, 2009

Nature of

in country

Business

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

As at As at December December 31, 2010 31, 2009

For the years ended December 31 2010 2009

Intoplane Services Company Limited

83.33

Thailand

Intoplane services

0.05

0.04

Thai Aviation Refuelling Company Limited

90.00

Thailand

Hydrant network services

26.60

27.04

26.01

26.97

JP-One Assets Company Limited

92.50

Thailand

Aviation Fuel Pipeline Transportation

10.33

10.25

5.05

4.82

2.3

Incorporated

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

The Company has invested in JP-One Assets 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. The excess of cost over book value at the acquisition date has been 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.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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. The resultant difference at the acquisition date has been presented as “Concession of a subsidiary” in the consolidated balance sheets and amortized on a straight-line basis over a period of thirty years since the date of September 28, 2006 until the expiration of the rental agreement. The amortization period has been stipulated based on the period that the subsidiary has been granted the concession to operate an aviation refuelling.

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.

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, at banks, deposit with ﬁnance institutions and short-term investment with an original maturity of 3 months 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 Office furniture, equipment and computer Main depot facilities Hydrant equipment Intoplane substation Vehicle fleet and motor vehicle Motor vehicle under finance lease agreements

10 years, lease period 3 - 5 years 5 - 28 years 5 - 30 years 5 - 20 years 5 years lease period

No depreciation is provided for land, land improvement, building under construction and equipment under installation.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

3.6

Computers softwares Computers softwares are stated at cost less amortization. Amortization of intangible assets is calculated by the straight-line method over the estimated useful lives of 3 - 5 years.

3.7

Leasehold rights Leasehold rights are stated at cost less amortization. Amortization of leasehold is calculated by the straightline 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 asset’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. 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.

3.10 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. 3.11 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. 3.12 Reserve for employees’ 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.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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 Company’s contributions and their related benefits, together with obligations to employees who are still members of the previous scheme. The employees of the Company started working after provident fund foundation will obtain benefit only from provident fund scheme. A subsidiary provided retirement benefit scheme for its employees retirement or resignation as the parent company until provident fund establishment. The employees started working after January 2007 will obtain benefit from provident fund scheme afterwards. The employees in another two subsidiaries will obtain benefit from provident fund scheme which the company and its employees joined to establish together. 3.13 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. 3.14 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. 3.15 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. 3.16 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.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

3.17

Adoption of new accounting standards 3.17.1 Adoption of new accounting standards during the year 2009 a) 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. b) 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: 1. Framework for the Preparation and Presentation of Financial Statements (revised 2007) 2. TAS 20 Accounting for Government Grants and Disclosure of Government Assistance (effective on January 1, 2012) 3. TAS 24 Related Party Disclosures (revised 2007) (effective on January 1, 2011) 4. TAS 36 Impairment of Assets (revised 2007) 5. TAS 40 Investment Property (effective on January 1, 2011) 6. TFRS 5 Non-current Assets Held for Sale and Discontinued Operations (revised 2007) 7. Accounting Treatment Guidance for Leasehold Right 8. Accounting Treatment Guidance for Business Combination under Common Control These accounting standards, financial reporting standards and accounting treatment guidance are effective for the fiscal year beginning on or after January 1, 2009, except for TAS 24 and TAS 40, they are effective for the fiscal year beginning on or after January 1, 2011, and TAS 20 is effective for the fiscal year beginning on or after January 1, 2012.

3.17.2 Adoption of new accounting standards during the year 2010 During the year 2010, the Federation of Accounting Professions (FAP) has issued Notifications to mandate the use of the revised 2009, new issued of accounting standards and financial reporting standards and the interpretation, totalling 32 standards, as follows. Framework for the Preparation and Presentation of Financial Statements (revised 2009) TAS 1 (revised 2009) Presentation of Financial Statements TAS 2 (revised 2009) Inventories TAS 7 (revised 2009) Statement of Cash Flows TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors TAS 10 (revised 2009) Events after the Reporting Period TAS 11 (revised 2009) Construction Contracts TAS 12 Income Taxes TAS 16 (revised 2009) Property, Plant and Equipment TAS 17 (revised 2009) Leases TAS 18 (revised 2009) Revenue TAS 19 Employee Benefits TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates TAS 23 (revised 2009) Borrowing Costs TAS 24 (revised 2009) Related Party Disclosures TAS 26 Accounting and Reporting by Retirement Benefit Plans TAS 27 (revised 2009) Consolidated and Separate Financial Statements TAS 28 (revised 2009) Investments in Associates TAS 29 Financial Reporting in Hyperinflationary Economies TAS 31 (revised 2009) Interests in Joint Ventures TAS 33 (revised 2009) Earnings per Share

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

TAS 34 TAS 36 TAS 37 TAS 38 TAS 40 TFRS 2 TFRS 3 TFRS 5 TFRS 6 TFRIC 15

(revised 2009) Interim Financial Reporting (revised 2009) Impairment of Assets (revised 2009) Provisions, Contingent Liabilities and Contingent Assets (revised 2009) Intangible Assets (revised 2009) Investment Property Share-based Payment (revised 2009) Business Combinations (revised 2009) Non-current Assets Held for sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Agreements for the Construction of Real Estate

These accounting standards and financial reporting standards are effective for the fiscal year beginning on or after January 1, 2011, except for TAS 12, TAS 20 and TAS 21, they are effective for the fiscal year beginning on or after January 1, 2013. The management of the Company is in the process of reviewing the impact of such accounting standards to the financial statements for the year in which they are initially applied, for TAS 12 Income Taxes, TAS 16 (revised 2009) Property, Plant and Equipment and TAS 19 Employee Benefits and other accounting standards and financial reporting standards will not have any significant impact on 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 lessors’ 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 receiving diesel pipeline system to a related company is based on the contract price between the parties. 8. 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. 9. Rental charges for land is based on rental expense paid to Treasury Department and plus a rate of 5 percent of annual rental. 10. 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. 11. 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.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

Signiﬁcant transactions between the Company and its related parties are summarized below :(Unit : Million Baht)

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 receiving diesel pipeline system Rental charges for ofﬁce building and land Rental charges for land & building Interest income

Consolidated Financial Statement

Separate Financial Statement

For the years ended December 31 2010 2009

Pricing policy

6.5 1.3 13.8 6.8 19.8

5.4 1.1 15.0 9.2 17.7

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

1,453.3 2.9

1,320.3 1.8

1,453.3 2.9

1,320.3 1.8

(5) (6)

2.0 6.8 7.6 3.9

6.4 8.6 4.1

2.0 6.8 7.6 3.9

6.4 8.6 4.1

(7) (8),(9) (11) (10)

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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

Relationship

Consolidated

Separate

Financial Statement

As at December 31 2010 2009

TRADE ACCOUNTS RECEIVABLE RELATED COMPANIES Thai Airways International Public Company Limited

Shareholder and

37,150,780

37,101,583

37,150,780

37,101,583

45,921,518

40,654,269

45,921,518

40,654,269

a representative director

Chevron (Thailand) Company Limited

Shareholder and

Esso (Thailand) Public Company Limited

Shareholder

26,374,864

27,529,042

26,374,864

27,529,042

PTT Public Company Limited

Shareholder and

57,795,666

47,782,094

57,795,666

46,874,421

31,176,478

29,097,012

31,176,478

28,742,627

a representative director

a representative director The Shell Company of Thailand Limited

Shareholder and a representative director

Air Total (Thailand) Limited

Shareholder

1,206,236

Singapore Petroleum (Thailand) Limited

Shareholder

2,292,384

1,678,867

2,292,384

1,678,867

Petronas Retail (Thailand) Company Limited

Shareholder

Bangchak Petroleum Public Company Limited

Co-Shareholder

Fuel Pipeline Transportation Limited

Common shareholders and

3,745,041

1,134,778

3,745,041

1,134,778

11,192,702

12,268,447

1,639,024

670,096

217,288,457

199,122,424

204,456,731

184,921,823

Thai Aviation Refuelling Company Limited

1,586,842

2,438,320

JP-One Asset Company Limited

1,045,255

1,161,540

a representative director

892,123

214,333

892,123

214,333

Co-Shareholder

121,006

115,462

121,006

115,462

1,013,129

329,795

3,645,226

3,929,655

a representative director Total AMOUNTS DUE FROM AND ADVANCE TO RELATED COMPANIES SUBSIDIARIES

RELATED COMPANIES Fuel Pipeline Transportation Limited Thai Petroleum Pipeline Company Limited

Common shareholders and

Total 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

382,686,467

400,345,867

382,686,467

400,345,867

(382,686,467)

(400,345,867)

(382,686,467)

(400,345,867)

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

(Unit : Baht) Consolidated Financial Statement

Separate Financial Statement

As at December 31 2010 2009

Relationship

As at December 31 2010 2009

TRADE ACCOUNTS PAYABLE RELATED COMPANY SUBSIDIARIES Thai Aviation Refuelling Company Limited

57,804,993

55,473,427

JP - One Asset Company Limited

866,786

120,609,475

34,883,545

107,549,358

22,952,793

29,649

20,330

4,532

5,800

4,532

5,800

20,330

333,363

278,193

333,363

278,193

4,904,427

5,897,467

195,311

125,901,776

41,105,665

166,795,003

RELATED COMPANIES Airports of Thailand Public Company Limited

Shareholder and

The Shell Company of Thailand Limited

Shareholder and

a representative director a representative director Thai Airways International Public Company Limited

Shareholder and a representative director

Chevron (Thailand) Company Limited

Shareholder and a representative director

PTT Public Company Limited

Shareholder and a representative director

Fuel Pipeline Transportation Limited

Common shareholders and a representative director

Total

78,750,873

Movement of loan to and long-term receivable from related company during the year ended December 31, 2010, is as follows:(Unit : Baht) Balance as at

Movement during the period

Balance as at

Jan 1, 2010

Increase

Decrease

Dec 31, 2010

Fuel Pipeline Transportation Limited

400,345,867

17,659,400

382,686,467

LESS : Allowance for doubtful accounts

(400,345,867)

(17,659,400)

(382,686,467)

LOAN TO AND LONG-TERM RECEIVABLE FROM RELATED COMPANY

Total

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

In addition, the Company had transactions by entering into agreements 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 23.1.5 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.

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, 2010 and 2009 in amount of Baht 6 million and Baht 7 million, respectively.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2010 and 2009 are comprised of the followings:(Unit : Baht)

Cash on hand

Consolidated

Separate

Financial Statement

2010

2009

2010

2009

132,031

159,940

99,328

112,398

Deposit with banks and ﬁnance institutions

168,543,845

165,664,475

60,532,013

43,245,734

Bond and promissory note

674,478,154

510,439,835

534,800,353

370,630,362

Total cash and cash equivalents

843,154,030

676,264,250

595,431,694

413,988,494

As at December 31, 2010 and 2009, a subsidiary’s cash at banks with a financial institutions amount of Baht 165 million and Baht 185 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, 2010 and 2009, 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, 2010 and 2009 a subsidiary has deposits of Baht 5.6 million and Baht 5.5 million, respectively with ﬁnance institutions. The deposits have been placed as collaterals for issuance of letters of guarantee for the company’s subsidiary and related company.

TRADE ACCOUNTS RECEIVABLE As at December 31, 2010 and 2009, the outstanding balances of trade accounts receivable are not yet due.

INVESTMENTS IN SUBSIDIARIES These represent investments in ordinary shares of the following companies :-

Company

Million Baht

Percentage

Paid-up capital

owned by

Unit : Baht Cost method

Book value of the subsidiaries

The Company

Dividend

base on equity method

2010

2009

2010

2009

2010

2009

2010

2009

2010

2009

Intoplane Services Co., Ltd.

0.12

83.33

100,000

2,880,395

2,346,512

Thai Aviation Refuelling Co., Ltd.

530

1,235,000,000

1,027,041,337

907,821,296

136,708,114

132,558,161

JP-One Assets Co., Ltd.

600

92.50

600,900,000

561,488,902

568,126,561

12,043,494

1,165,498

1,836,000,000

1,591,410,634

1,478,294,369

148,751,608

133,723,659

SUBSIDIARY COMPANIES

Total

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

On March 23, 2009, the annual general meeting of a 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 at the rate of Baht 14.32 per share amounting to Baht 75.90 million in August 2008. The subsidiary would pay the remaining of Baht 15.62 per share amounting to Baht 82.79 million. The payment was made on April 10, 2009. On July 23, 2009, the board of directors of the such 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. On March 22, 2010, the annual general meeting of the such subsidiary approved a resolution to declare a cash dividend payment from its 2009 operations at the rate of Baht 27.30 per share for an amount of Baht 144.69 million of which the interim dividend payment had been paid as mentioned above. The dividend balance at last six-month period of 2009 operation at Baht 15.13 per share amounting to Baht 80.19 million. The payment was made on April 9, 2010. On July 19, 2010, the Board of Director Meeting No. 2/2010 of the such subsidiary approved to declare a cash dividend payment from its half year 2010 operations at the rate of Baht 13.53 per share for an amount to Baht 71.71 million. The payment was made on August 11, 2010. On March 30, 2009, the annual general meeting of another 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. On March 26, 2010, the annual general meeting of the such subsidiary approved a resolution to declare a cash dividend payment from its 2009 operations at the rate of Baht 2.17 per share for an amount of Baht 13.02 million payment in March 31, 2010. 9.

OTHER INVESTMENTS IN RELATED COMPANY These represent investments in shares of the following company:Unit : Baht Company

Nature of

Million Baht

Business

Paid-up capital

Percentage owned by the Company

Cost

2010

2009

2010

2009

2010

2009

Ordinary shares

796

16.71

133,000,000

Preference shares

796

16.65

132,521,700

265,521,700

RELATED COMPANY Fuel Pipeline Transportation Limited

Services

Total LESS : Allowance for impairment loss of investment Total investment in related company - net

(265,521,700) (265,521,700) -

According to the un-audited accounts of Fuel Pipeline Transportation Limited as of December 31, 2010, that company has a capital deﬁcit of Baht 449 million (As at December 31, 2009, audited ﬁnancial statement : Baht 408 million). However, the Company has already set aside provision against impairment loss of investment in full amount.

90 -

Disposal

Depreciation for the period

December 31, 2010

208,759,242

December 31, 2009

For the year ended

December 31, 2010

For the year ended

OF INCOME

IN STATEMENTS

DEPRECIATION CHARGE

160,805,902

December 31, 2010

NET BOOK VALUE

Transfer out

160,805,902

January 1, 2010

DEPRECIATION

ACCUMULATED

December 31, 2010

Disposal

(47,953,340)

Transfer in

Transfer out

208,759,242

43,673

13,115

11,729,158

30,558

11,698,600

11,742,273

improvement

Purchase

January 1, 2010

Leasehold improvement

Land and land

59,561,919

44,264,414

146,932,641

24,524,060

(251,749)

122,660,330

191,197,055

(317,777)

5,183,184

4,109,399

182,222,249

computer

equipment/

Ofﬁce furniture/

2,729,974,782

2,572,737,868

1,530,044,594

178,504,949

1,351,539,645

4,102,782,462

21,067,870

200,165

4,081,514,427

facilities

Main depot

1,526,630,898

1,469,121,023

262,878,581

57,509,875

205,368,706

1,731,999,604

equipment

Hydrant

348,844,351

320,437,686

179,258,242

29,534,950

149,723,292

499,695,928

1,128,285

498,567,643

substation

Intoplane

Consolidated Financial Statement

PROPERTY, LEASEHOLD IMPROVEMENT AND EQUIPMENT - NET

COST

10.

132,817,350

98,090,280

640,189,264

51,018,713

(4,017,417)

593,187,968

738,279,544

(4,571,645)

16,205,298

640,573

726,005,318

Vehicle ﬂeet

19,254,345

13,015,591

8,165,216

9,022,004

(25,784,537)

24,927,749

21,180,807

(30,886,565)

(719,439)

8,604,717

44,182,094

39,883,423

13,561,930

(62,803,198)

36,481,705

39,883,423

installation

under construction/

agreement

equipment

Building and

ﬁnancial lease

under

Motor vehicle

357,313,839

350,145,109

5,065,769,983

4,692,047,809

2,779,197,696

350,145,109

(30,053,703)

2,459,106,290

7,471,245,505

(35,775,987)

(111,475,977)

43,584,637

50,036,559

7,524,876,273

Total

(Unit : Baht)

Notes To The Financial Statements

For The Years Ended December 31, 2010 and 2009

Disposal

Depreciation for the period

December 31, 2010

208,759,242

December 31, 2009

For the year ended

December 31, 2010

For the year ended

OF INCOME

IN STATEMENTS

DEPRECIATION CHARGE

160,805,902

December 31, 2010

NET BOOK VALUE

Transfer out

160,805,902

January 1, 2010

DEPRECIATION

ACCUMULATED

December 31, 2010

Disposal

(47,953,340)

Transfer in

Transfer out

208,759,242

43,673

13,115

11,729,158

30,558

11,698,600

11,742,273

improvement

Purchase

January 1, 2010

COST

Leasehold

Land and land

52,397,290

35,179,534

140,227,596

21,191,946

(45,155)

119,080,805

175,407,130

(58,700)

1,334,384

2,653,351

171,478,095

computer

equipment/

Ofﬁce furniture/

2,111,083,793

1,979,996,115

1,421,685,403

152,451,319

1,269,234,084

3,401,681,518

21,349,141

14,500

3,380,317,877

facilities

Main depot

5,113,342

4,510,158

20,288,699

603,184

19,685,515

24,798,857

equipment

Hydrant

Separate Financial Statement

327,720,261

300,440,346

176,720,582

28,408,200

148,312,382

477,160,928

1,128,285

476,032,643

substation

Intoplane

127,319,973

85,788,345

631,854,186

48,332,977

(2,526,692)

586,047,901

717,642,531

(2,526,753)

6,789,810

11,600

713,367,874

Vehicle ﬂeet

13,303,095

3,929,196

2,983,387

5,784,533

(18,209,584)

15,408,438

6,912,583

(22,511,144)

712,194

28,711,533

25,642,110

8,565,297

(50,539,620)

33,462,807

25,642,110

installation

under construction/

agreement

equipment

Building and

ﬁnancial lease

under

Motor vehicle

265,781,519

256,802,717

2,871,382,779

2,579,228,008

2,405,489,011

256,802,717

(20,781,431)

2,169,467,725

4,984,717,019

(25,096,597)

(98,492,960)

30,601,620

36,854,452

5,040,850,504

Total

(Unit : Baht)

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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 land rental agreement between the Airport of Thailand Public Company Limited and a subsidiary, the Subsidiary shall transfer the ownership of all buildings and construction to the Ministry of Finance when 3 years since the date of completion of the construction (September 30, 2008). 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, 2010 the right transferring as to the above 2 agreements are in its process. As December 31, 2010 and 2009 the initial cost of the ﬁxed assets that have been fully depreciated but still in use are as follows : (Unit : Baht)

Leasehold improvement

Consolidated

Separate

Financial Statement

2010

2009

2010

2009

11,589,252

11,165,653

11,589,252

11,165,653

Ofﬁce furniture / equipment / computer

102,912,097

91,245,098

102,058,155

90,766,060

Main depot facilities

769,255,880

747,796,971

769,255,880

747,796,971

Hydrant equipment

16,697,044

Intoplane substation Vehicle ﬂeet Total

11.

55,058,967

54,219,762

55,058,967

54,219,762

474,901,361

477,228,722

474,901,361

477,228,722

1,430,414,601

1,398,353,250

1,429,560,659

1,397,874,212

COMPUTER SOFTWARES - NET Computer softwares, net consisted of:(Unit : Baht) Consolidated Financial Statement Balance per

Increase

Decrease

Balance per

book as at

Jan 1, 2010

Dec 31, 2010

At cost

46,560,137

2,187,713

48,747,850

Less Accumulated amortization

(29,996,312)

(5,876,210)

(35,872,522)

Computer softwares, net

16,563,825

12,875,328

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

(Unit : Baht)

Separate Financial Statement Balance per

Increase

Decrease

Balance per

book as at

Jan 1, 2010

Dec 31, 2010

At cost

44,170,924

1,597,498

45,768,422

Less Accumulated amortization

(29,645,006)

(5,447,312)

(35,092,318)

Computer softwares, net

14,525,918

10,676,104

(Unit : Baht)

Amortization

12.

Consolidated

Separate

Financial Statement

For the year ended December 31,

2010

2009

2010

2009

5,876,210

6,621,166

5,447,312

6,385,302

ASSETS NOT USED IN OPERATION- NET Consisted of:(Unit : Baht)

Consolidated Financial Statement/ Separate Financial Statement 2010

2009

Land

47,953,340

Design and construction

19,938,000

At cost

Total Less Allowance for impairment of assets Net

67,891,340

(19,938,000)

47,953,340

Assets not used in operation are land, design fee and underground pipeline for the main depot facilities project at Chiangmai Airport. This portion had been transferred from property, leasehold improvement and equipment.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

13.

LIABILITIES UNDER FINANCIAL LEASE AGREEMENT As at December 31, 2010 and 2009, the Company and its subsidiaries have liabilities under ﬁnancial lease agreement, leasing of vehicles. The payment details are follows :Consolidated Financial Statement (Baht) As at December 31, 2010 Principal

Interest

As at December 31, 2009

Payments

Principal

Interest

Payments

Within one year

5,412,387

590,047

6,002,434

12,560,470

909,239

13,469,709

After one year but within ﬁve years

8,136,947

632,023

8,768,970

6,724,534

169,738

6,894,272

13,549,334

1,222,070

14,771,404

19,285,004

1,078,977

20,363,981

Total

Separate Financial Statement (Baht) As at December 31, 2010 Principal

Interest

As at December 31, 2009

Payments

Principal

Interest

Payments

Within one year

2,388,146

164,697

2,552,843

9,817,590

594,824

10,412,414

After one year but within ﬁve years

1,588,128

60,539

1,648,667

3,671,144

127,224

3,798,368

Total

3,976,274

225,236

4,201,510

13,488,734

722,048

14,210,782

As at December 31, 2010 and 2009, the Company and its subsidiaries have 33 outstanding financial lease agreements and 41 outstanding financial lease agreements, respectively with 5 local leasing companies. The lease term will end in 2014, 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. 14.

LONG-TERM LOANS FROM BANKS

Credit line no.

Credit facility

Consolidated Financial Statement 2010 2009 (Million (Million (Million (Million USD) Baht) USD) Baht)

Separate Financial Statement 2010 2009 (Million (Million USD) Baht)

Interest Rate / Condition term payment loan and interest

The Company 1

Baht 800 million

355

457

355

457

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.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

Consolidated Financial Statement Credit line no.

Credit facility

2010 (Million (Million USD) Baht)

Part 1 - Baht 1,700 million

1,139

1,360

1,139

1,360

Part 2 - Baht

201

240

201

240

1,600

1,340

1,600

300 million

The Subsidiaries 4

2009 (Million (Million USD) Baht)

Separate Financial Statement 2010 2009 (Million (Million USD) Baht)

1,340

Baht 220 million

220

Baht 700 million

311

420

Consolidated Financial Statement

Separate

Interest Rate / Condition term payment loan and interest

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. On December 28, 2010, the Company was approved by the bank to extend the due date of principal payment for 4 years, from December 31, 2014 to December 31, 2018. Part 1, Baht 1,700 million will be paid in 31 quarterly installments, and each installment in Baht 35.60 million. The last installments is the rest and Part 2, Baht 300 million will be paid in 31 quarterly installments, and each installment in Baht 6.30 million. The last installments is the rest too. These payments will be effective from March 2011. 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 February 2011 onward.

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. Interest Rate /

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

Consolidated Financial Statement Credit line no.

Credit facility

2010 (Million (Million USD) Baht)

2009 (Million (Million USD) Baht)

Separate Financial Statement 2010 2009 (Million (Million USD) Baht)

Interest Rate / Condition term payment loan and interest

On August 31, 2010, the subsidiary was approved by the bank to extend the due date of principal payment for 2 years, from December 31, 2012 to December 31, 2014. The principal will be paid in 18 quarterly installments, and each installment is Baht 19.45 million. The last installment is the rest. These payments will be effective from September 2010.

USD 8 million

3.2

109

4.8

163

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.

Baht 170 million

118

170

MLR minus a percentage speciďŹ ed 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. On August 31, 2010, the subsidiary was approved by the bank to adjust the interest rate decrease and extend the due date of principal payment for years, from December 31, 2013 to December 31, 2014. The principal will be paid in 18 quarterly installments, and each installment is Baht 7.37 million. The last installment is the rest. These payments will be effective from September 2010.

Baht 120 million

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

Total long-term loans LESS Current portion

2,501 (480)

3,102 (655)

1,915 (294)

2,277 (362)

Long-term loans from banks - net

2,021

2,447

1,621

1,915

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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. 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; On each monthly maturity date the subsidiary will pay the fixed interest rate to the bank and the bank pays USD-LIBOR plus spread. 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. On August 31, 2010, the subsidiary has received a written approval by the bank for a waiver of conditions in the financial facility agreement about extending the due date of principal and adjusting the interest rate per said in the credit line no 4 and 6 above. The subsidiary can use deposit accounts with any financial institutions. The subsidiary must conditionally transfer of the rights of the such financial instruments or such deposit accounts to the bank for guarantee. 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. 15.

RESERVE FOR EMPLOYEE’S BENEFIT / PROVIDENT FUND Reserve for employee’s beneﬁt, net consisted of :(Unit : Baht)

Beginning balance

Consolidated

Separate

Financial Statement

2010

2009

2010

2009

253,634,038

244,391,160

247,950,272

239,909,953

INCREASE reserve during period

34,162,217

19,121,766

32,778,002

17,919,207

DECREASE paid during period

(13,052,888)

(9,878,888)

(13,052,888)

(9,878,888)

274,743,367

253,634,038

267,675,386

247,950,272

Ending balance

The Company and subsidiaries’s contribution for the years ended December 31, 2010 and 2009, amounted to Baht 24 million and Baht 22 million, respectively. The Company’s contributions for the years ended December 31, 2010 and 2009, amounted to Baht 23 million and Baht 21 million, respectively.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

16.

EXPENSES BY NATURE Signiﬁcant expenses by nature are as follow : (Unit : Baht)

Consolidated

Separate

Financial Statement

For the years ended

December 31,

2010

2009

2010

2009

410,040,864

370,427,250

382,145,300

346,631,063

16,048,259

15,857,105

13,664,059

13,983,365

Depreciation and amortization expenses

357,079,615

364,993,300

263,308,325

273,225,116

Airport concession fees

235,363,431

227,920,370

223,717,488

216,804,630

28,085,358

30,326,713

24,425,908

27,447,088

Employees beneﬁt expenses Directors’ remuneration

Rental expenses

17.

CORPORATE INCOME TAX 17.1 Corporate income tax for the Company is calculated on net income for the nine-month periods 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. For the years ended December 31, 2010 and 2009, the Company’s significant adding back expenses which disallowable for tax calculation are reserve for employee’s benefit expenses amounted to Baht 20 million and Baht 8 million, respectively, and loss on impairment of assets amounted to Baht 20 million (year 2010) and deducting certain exempted income are dividend income amounted to Baht 149 million and Baht 134 million, respectively, and reversal debt amounted equal to Baht 18 million in both years. 17.2 Corporate income tax for a subsidiary is calculated on net income for the period 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. 17.3 Corporate income tax for another subsidiary is calculated on net income for the period 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. For the years ended December 31, 2010 and 2009, the such subsidiary does not have income tax expenses due to investment promotional privileges for a period of 8 years from 2006 to 2014 and deficit carried forward from the previous years. 17.4 Corporate income tax for another subsidiary is calculated on net income for the period 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

Rate Exempted 15 % 25 % 30 %

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

18.

DIVIDEND PAID On August 11, 2010, the board of directors of the Company approved a payment of Interim dividend from 2010 results at Baht 0.18 per share amounting to Baht 91.80 million. The dividend was paid in September 2010. On April 19, 2010, the annual general meeting 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 per share amounting to Baht 66.30 million. The rest of dividend paid by cash at Baht 0.30 per share amounting to Baht 153.00 million on May 14, 2010. 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 per share 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. 19.

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. 20.

CAPITAL MANAGEMENT The primary objective of the Company’s capital management is to ensure that it has an appropriate ﬁnancial structure and preserves the ability to continue its business as a going concern. According to the consolidated balance sheet as at December 31, 2010 and 2009, the Company and subsidiaries’s debtto-equity ratio was 0.88 : 1 and 1.09 : 1, respectively. According to the separate balance sheet as at December 31, 2010 and 2009, the Company’s debt-to-equity ratio was 0.83 : 1 and 0.98 : 1, respectively. 21.

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. 22.

BANK GUARANTEES As at December 31, 2010, there were outstanding bank guarantees of the Company and its subsidiaries amounting to approximately Baht 55 million (As at December 31, 2009 : Baht 56 million), with the Company only has outstanding guarantees amounting to approximately Baht 43 million (As at December 31, 2009 : Baht 45 million), The guarantees were in respect of certain performance bonds as required in the ordinary course of business of the Company and its subsidiaries.

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

23.

COMMITMENT AND CONTINGENT LIABILITIES 23.1 Commitment 23.1.1 As at December 31, 2010, the Company and its subsidiaries have the commitments from long-term contracts which have the minimum amount to pay in the future as follows;

Company

Minimum amount to be paid in the future (Million Baht) Period Not over

Over 1 year

1 year

Not over

Over 5 years

Total

5 years Bangkok Aviation Fuel Services Public Company Limited Thai Aviation Refuelling Company Limited

35.34

64.93

70.52

170.79

2.22

1.13

JP-One Assets Company Limited

14.44

62.24

282.39

359.07

3.35

Total

52.00

128.30

352.91

533.21

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 ďŹ&#x201A;ight 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 three years from September 28, 2007 to September 27, 2010. The renewed contract for three years period during September 28, 2010 to September 27, 2013 is under processed. c) Rental agreement for space at Don Mueang Airport for a period of three years from September 19, 2007, to September 27, 2010. The renewed contract for three years period during September 28, 2010 to September 27, 2013 is under processed. 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 ofďŹ ce 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. 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.

100

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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.

A subsidiary has entered into the land sublease agreement with The Fuel Pipeline Transportation Limited and the memorandum for FPT maintenance services the aviation fuel pipeline transportation system for a period of 30 years from August 10, 2004 to August 9, 2034. However, the such agreement and memorandum have right to cancel if the such subsidiary enter into land lease agreement directly with The State Railway of Thailand. On June 1, 2010, the such subsidiary has entered into land lease agreement directly with The State Railway of Thailand for remaining period of 24 years, 2 months and 9 days ending on August 9, 2034, and the such agreement and memorandum with FPT cancelled already.

A subsidiary has entered online and management the aviation fuel pipeline transportation system service agreements with The Fuel Pipeline Transportation Limited for a period of 30 years from October 1, 2006 to September 30, 2036.

23.1.2

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 (On September 28, 2006). 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.

23.1.3

A subsidiary has been granted approval by Airports of Thailand Public 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 (on September 28, 2006). 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 (AOT) 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.

23.1.4

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 33 million (As at December 31, 2009 : Baht 22 million) with the commitments of the Company amounting to approximately Baht 29 million (As at December 31, 2009 : Baht 14 million).

23.1.5 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.

101

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

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, 2009 : Baht 2 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. 23.2 Litigation On 8 May 2008, the Company and a subsidiary had been filed a lawsuit as co-defendants on a case which a group of 51 plaintiffs complained that they have been suffering from the evaporation of the JET A-1 from the Company’s storage tanks. Each plaintiff demanded a compensation in the amount of 300,000 Baht totaling approximately 15.3 Million Baht for the damages (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. Consequently, the court made appointment for investigation of witnesses of the Company and the subsidiary between November 2009 and February 2010. On 30 June 2008, there were 3 plaintiffs having withdrawn their cases filed against the Company; On 24 November 2009, all plaintiffs had withdrawn their cases filed against the subsidiary; On 4 December 2009, there was one more plaintiff having withdrawn his case filed against the Company; On 21 January 2010, the court had made an appointment for the mediation again, the plaintiff requested for period of time to seek for additional information, accordingly, the court had postponed the appointment date among all case’s parties to be on 1 April 2010; On 3 May and 14 June 2010, the plaintiffs and defendants had 2 more meetings but could not reach a mutual settlement. The Court therefore made another appointment on 30th July 2010 to schedule the hearing, where the court has set the dates for hearing of the plaintiff’s witnesses on 24-27 and 31 May and 1-3 and 7-8 June 2011 and the hearing of the defendant’s witnesses on 21-24 June and 28 June - 1 July 2011; On 24 November 2009, there were additional 4 plaintiffs jointly filing a lawsuit against the Company upon the same ground. Each plaintiff claimed the damages in the amount of 300,000 Baht totaling 1,200,000Baht. However, the 4 plaintiffs who had filed the lawsuit as the new lawsuit had withdrawn the lawsuit later, and the court had ordered to dispose the lawsuit from the case list on 5 February 2010. 24.

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 14 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.

102

Notes To The Financial Statements For The Years Ended December 31, 2010 and 2009

As at December 31, 2010 the 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 3,200,000 (As at December 31, 2009 : USD 4,800,000). As at December 31, 2010 the Company and a subsidiary had foreign currency-denominated assets which were un-hedged amounting to USD 839,299 (As at December 31, 2009 : USD 1,040,165) and liabilities were un-hedged amounting to GBP 10,000. 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. 25.

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.

26.

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 435,670,000.00 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.

27.

EVENTS AFTER THE BALANCE SHEET DATE 27.1 On January 21, 2011, the Company got a written approval from the bank for long term loan no. 1 Baht 800 million under condition of 4-year principal repayment extension from February 28, 2014 to August 31, 2018 and shift the interest rate since February 28, 2011 onwards. (Details as per notes to ﬁnancial statements no.14) 27.2 On February 17, 2011, the Company got a written approval from another bank for long term loan no.3 Baht 220 million under condition of 3-year principal repayment extension from November 2015 to November 2018 and decrease the interest rate since February 2011 onwards (Detail as per Notes to ﬁnancial statements no.14) 27.3 On February 23, 2011, the board of directors of the Company has approved the follwing transactions; 1) To allot the retained earnings to be reserved for investment expansion amounting to Baht 43.56 million. 2) To allot the retained earnings to be reserved for general reserve amounting to Baht 43.56 million. 3) To declare dividends from the Company’s 2010 result at Baht 0.54 per share amounting to Baht 275.40 million of which the Company has paid the interim dividend in September 2010 at Baht 0.18 amounting to Baht 91.80 million. The rest of dividend will be paid by cash at Baht 0.36 Per share amounting to Baht 183.60 million on May 16, 2011.

28.

APPROVAL OF FINANCIAL STATEMENTS These ﬁnancial statements were approved by the Company’s authorized of directors on February 23, 2011.

103

Auditorâ&#x20AC;&#x2122;s Fee

1. Audit Fee t -BTU ZFBS UIF $PNQBOZ BOE JUT TVCTJEJBSJFT QBJE BVEJU GFF UP %IBSNOJUJ "VEJUJOH $P -UE in the amount of Baht 1,220,726 (including out of pocket expenses for the ďŹ nancial year, ended December 31, 2010) as follows:

1. Bangkok Aviation Fuel Services Plc.

Baht

764,559

2. Thai Aviation Refuelling Co., Ltd.

Baht

248,062

3. JP-One Asset Co., Ltd.

Baht

142,635

4. Intoplane Services Co., Ltd

Baht

65,470

Baht

1,220,726

Total

t -BTU ZFBS UIF $PNQBOZ QBJE BVEJU GFF JO BVEJUJOH UIF FNQMPZFFT QSPWJEFOU GVOE UP Dharmniti Auditing Co., Ltd in the amount of Baht 60,000. 2. Non-audit fee t -BTU ZFBS UIF $PNQBOZ IBE OP OPO BVEJU GFF QBJE UP %IBSNOJUJ "VEJUJOH $P -UE

104

Report of the Audit Committee for the Year 2010 (Translation) To: The shareholders of Bangkok Aviation Fuel Services Public Company Limited The

Company’s

Audit

Committee

comprises

independent

directors

i.e.

Mr.Pachara Yutidhammadamrong as Audit Committee Chairman, Mr. Visut Montriwat and Mr. Sumon Surathin as Audit Committee Directors, 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 2010 and 2 Audit Committee meetings in 2011 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 2010, 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 accounting change, accounting policy change, risks, information disclosure, and audit problems, as well as acknowledging the audit plan of the external auditors for the year 2010, and the preparation in conducting the financial statements based on International Financial Reporting Standards (IFRS). The Audit Committee attended 3 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 generally accepted accounting principles, having disclosed information adequately and in timely manner. In additions, the Audit Committee had given opinions and made recommendations to the Board of directors quarterly. 2. Reviewed the operation information and the internal control system, to evaluate the sufficiency, appropriateness and effectiveness of the internal control system, by evaluating the adequacy of internal control system complying with the Practice of the Office of the SEC and considering the internal audit report for the year 2010 according to the approved internal audit plan that covered important workflows of the Company and found no weakness or

105

Report of the Audit Committee for the Year 2010 (Translation)

significant deficiency, 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 no deficiency in accounting internal control system that may significantly affected the financial statements, had a good internal control system, had the asset safeguarding and the system to monitor the operation of the Company and its subsidiaries that was appropriate and effective to prevent corruption, and had the internal control and risk management system under the Risk Management Framework, benchmarking with the international standard of COSOERM (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, control activities, information and communication, 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 2010 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 strategic 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 strategic plan and 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, and Strategic Plan and Risk Management Manual. The Audit Committee got reports from the Risk Management Committee quarterly. The Audit Committee had the opinion that the Company had risk management system that was appropriate, sufficient, and effective, had appropriate crisis management plan that fit with the situation, reviewed the corporate objectives, risk factors, Key Risk Indicators in corporate and

106

Report of the Audit Committee for the Year 2010 (Translation)

functional levels, Risk Appetite and Risk Tolerance that aligned with 2009-2012 strategic plan, which annually adjusted to be appropriate and fit with the business environment. In addition, the Company had measures in managing risk arising from politic, climate change, and foreign currency exchange fluctuation. 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. The Company set its rule and had Compliance Section to monitor the compliance of law and Regulation of the Office of the SEC and the Company’s rule. 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. 7. Reviewed the Audit Committee Charter to be appropriate and in line with the Regulations of the Office of the SEC and the SET, and proposed to the Board of Directors annually. 8. Considered the overall assessment and self-assessment of the Audit Committee for the year 2010. The evaluation result revealed that the Audit Committee’s performance completely fulfilled according to its Charter. The evaluation items were such as the Audit Committee’s composition, duties and responsibilities, meeting, working with the external auditors, and training. 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. 10. Considered Appointing the External Auditors and their audit fee for the Year 2011 and proposed to the Board of Directors to ask for the approval of the Annual Shareholder’s Meeting for the year 2011. The Audit Committee considered appointing the external auditors by evaluating their skill, knowledge, competence, audit team, quality of audit work in 2010, 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. The Audit Committee proposed appointing Mr.Pichai Dachanapirom, Certified Public Accountant Registration number 2421, or Mr. Pojana Asawasartichai, Certified Public Accountant Registration number 4891, or Ms.Chantra Wongsriudomporn, Certified Public Accountant Registration number 4996, or Ms. Wannisa Ngambuathong , Certified Public Accountant Registration number 6838 of Dharmniti

107

Report of the Audit Committee for the Year 2010 (Translation)

Auditing Co., Ltd. to serve as the Companyâ&#x20AC;&#x2122;s external auditors for the year 2011, with the audit fee of Baht 800,000. The Audit committee has the opinions regarding the appointment of external auditors as follows: t *O UIF QBTU mOBODJBM ZFBS UIF FYUFSOBM BVEJUPST QFSGPSNFE UIFJS EVUJFT XJUI LOPXMFEHF professional competence satisďŹ ed work quality as well as to have continuation in audit work. t 5IF QSPQPTFE BVEJU GFF PG #BIU JODSFBTJOH GSPN UIBU PG XIJDI XBT Baht 750,000, is appropriate as there are new accounting and ďŹ nancial reporting standards and most of them will be effective in 2011. Therefore, the audit time has to be increased. In addition, the fee in 2010 was at the same rate as that of 2009. t 5IFSF JT JO DPNQMJBODF XJUI 3FHVMBUJPO PG UIF 0GmDF PG UIF 4&$ XJUI SFHBSET UP UIF DIBOHJOH of the ďŹ nancial statements signatory external auditor every 5 years, while the Company has used the service of Dharmniti Auditing Co., Ltd. since 2009. t 5IF FYUFSOBM BVEJUPST IBT JOEFQFOEFODZ XJUI OP SFMBUJPO UP UIF $PNQBOZ BOE JUT subsidiaries. In summary, the Audit Committee had fulďŹ lled 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 ďŹ nancial 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, developed the operation systems to be more qualiďŹ ed and ďŹ t 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 11, 2011 On behalf of the Audit Committee Mr.Pachara Yutidhammadamrong Chairman of the Audit Committee

108

Summary of the Opinion Concerning Adequacy and Appropriateness of the Internal Control System for the Year 2010 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 23, 2011, 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 2010 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 COSOERM (The Committee of Sponsoring Organizations of the Treadway Commission-Enterprise Risk Management), which related to the operation and management procedure as follows.1. Internal Environment 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, JV Core Principle Policy, Quality Policy, Safety, Occupational Heath and Environmental Policy, Code of Conduct for etc. The Company has set up Code of Conduct Working Group. 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. The Company has educated Good Corporate Governance and Risk Management for new employees, and also 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 modified Code of Conduct on-line test annually to be more clarified and extend more coverage of its Code of Conduct. Furthermore, the Risk Appetite of the Company was modified to be in line with the changing internal and external environments. The Company amended the regulation in related transactions and had audit mechanism to be in line with the good internal control system. And to improve work efficiency, the followings had been adjusted; Regulation in sending employees to work in its subsidiaries, Regulation in bringing asset out of the Company, Regulation in using the Company’s car, Regulation on Service Awards, Strategic Planning and Risk Management Manual, Employee Performance Evaluation Criteria for etc.

109

Summary of the Opinion Concerning Adequacy and Appropriateness of the Internal Control System for the Year 2010

The Company recognized the importance of developing and training its employees to gain knowledge, skill, and competence to be suitable for them and their jobs. To prepare the work roadmap for its employees, the Company has Training Roadmap Manual, Individual Development Plan, English Language Development Plan, English Language E-Learning, as well as Successor Development Plan to reduce weakness and improve strength of successors in the right direction and systematically. In addition, from Corporate Governance Report Survey of Thai Listed Companies in 2010 conducted by Thai Institute of Directors (IOD), the Company received Excellent Corporate Governance Scoring as same as last year. The Company also received honorable awards such as National Award of the Outstanding for Enterprise of Safety Operations, Occupational Health and Working Environment in 2010 in 2 areas i.e. Don Mueang Depot and Suvarnbhumi Intoplane. Moreover, the Company was chosen from Thailand Greenhouse Gas Management Organization (TGO) and National Metal and Materials Technology Center (MTEC) as a pilot organization in “Carbon Footprint for Organization” Project. 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. The Company also set up Key Risk Indicators (KRIs) on corporate and functional levels, Risk Tolerance, ISO 9001 Objectives, and OHSAS 18001:2007 Objectives. The Company revised Key Performance Indicators (KPIs) and KPIs Objectives to be in line with its Strategic Goals, and amended the accident control objectives, causing by employees and the Company, for each areas. In addition, the Company had the monitoring and reporting system of strategic plan to the Board of Directors every 6 months, had the 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, administering and managing it costs to be more efficient. 3. Event Identification 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 risk factors, risk control plan, Key Risk Indicators (KRIs), risk tolerance, and trigger point (that was early warning system) to align with the Strategic Goals 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.

110

Summary of the Opinion Concerning Adequacy and Appropriateness of the Internal Control System for the Year 2010

4. Risk Assessment The Company has established and revised 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 Companyâ&#x20AC;&#x2122;s acceptable level. 5. Risk Response The Company has systematic risk management process, by designating the responsible person in risk management and completion date, 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 ďŹ t the changing risk continually and prioritize to manage the high risk. The Company has used the following risk management strategies i.e. Treat (to set measures to reduce risk), Take (to take risk that may occur), Transfer (to transfer risk to third parties) and Terminate (Not to do activity that may cause risk). Moreover, the Company has monitored the incidents that may affect its business and set the risk reducing measures, for example: t 5IF JODJEFOUT PG mSJOH HSFOBEFT BU UIF KFU GVFM UBOL PXOFE CZ 5IBJ 1FUSPMFVN 1JQFMJOF Co., Ltd. (Thappline) and the oil depot of the armyâ&#x20AC;&#x2122;s Quartermasters Department in Nonthaburi province, as well as bombs at other areas. The Company had measures to reduce its own risk such as increasing security guards, installing more CCTV, installing noise barrier at toll way in front of Don Mueang Depot, and following security measures of the Centre for the Resolution of Emergency Situations, for etc. t $MJNBUF DIBOHF UIF FOWJSPONFOUBM SJTL JO JOUFSOBM QSPDFTT BTQFDU PG UIF $PNQBOZ The Company had risk reducing measures such as establishing Global Warming Working Group as well as setting up plan, objectives, and measures in using of renewable energy campaign, for etc. t 5IBJ #BIU BQQSFDJBUJPO 5IF $PNQBOZ IBT SJTL SFEVDJOH NFBTVSFT TVDI BT FOUFSJOH into foreign exchange forward contract continually, for etc. 6. Control Activities The Companyâ&#x20AC;&#x2122;s Board of Directors has appointed sub-committees to oversee speciďŹ c 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.

111

Summary of the Opinion Concerning Adequacy and Appropriateness of the Internal Control System for the Year 2010

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 prepared its personnel and information management system to support for the adoption of International Financial Reporting Standard (IFRS) in 2011, by hiring consulting expertise, setting working group, implementing of the plan, and training the employees. The Company has follow up measure to ensure the compliance 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 revised the Regulations in monitoring, supervising and setting direction for the Company’s subsidiaries and direction for persons who are nominated as director or management, and assigned them to report the performance of such companies to the management monthly and to the Board of Directors every 6 months. 7. Information and Communication The Company has prepared and issued the meeting agendas with adequate information to the Board of Directors within the time as prescribed by law. The Company has arranged the assessment of the Board of Directors’ meeting efficiency for every meeting. The minutes of the Board of Directors has detail that the shareholders can review the appropriate activities of the Board of Directors. The Company has filed accounting records under various categories in compliance with applicable laws, and has the back up system. There were meetings between the Audit Committee, external auditor, and management regarding the external auditor report, performance of the Company and its subsidiaries, risk and risk managing measures, accounting policy, internal control and connected transactions disclosure, for etc. 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, such as the Company’s policies and regulations, manual of authorities, corporate governance, risk management and employee’s information. For external communication channel, the Company has an investor relations section to disseminate information to investors and external parties. Furthermore, The Company has internal and external activities, relating to Customer Relationship Management (CRM) such as Happy hours activity, information dissemination through Social Network: Facebook. The Company has improved the information reporting format via web-site for airline customers. The Company has also set up Service Signature, in line with the marketing strategy plan.

112

Summary of the Opinion Concerning Adequacy and Appropriateness of the Internal Control System for the Year 2010

8. Monitoring In 2010, the Company had 5 Board of Directors’ meetings to consider and monitor the performance of management to ensure achieving the specified goal. If the performance differed from the specified goal, the Board of Directors would assign the management to rectify and report the progress to the Board of Directors. Also, the Company had monthly management meeting to consider and monitor the performance to achieve the specified goal, and reported to the Board of Directors. The Company has implemented Key Performance Indicators (KPIs), and reported the implementation of the strategy to the Board of Directors every 6 months to ensure that the goal and objectives of the Company are reached. The Company has quarterly progress report of risk controlling plan and Key Risk Indicators status report, together with the report when Key Risk Indicators affect Trigger Point and not in the specified Risk Tolerance. Furthermore, to enhance work efficiency, the Board of Directors requires the sub-committees to evaluate their performance as well. In 2010, 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 and commitment, risk management process, asset safeguarding, 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, which is independent, has functional reported to the Audit Committee, while administrative reported to Managing Director. Internal Audit Division has examined internal control system, risk management system, connected transactions, the compliance with related rules and regulations of the Company and its subsidiaries, and also 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, 2010. The external auditor studied and evaluated the efficiency of the requisite internal control system in accounting 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.

113

Connected Transactions

1.Transactions between BAFS and connected persons who may have conﬂict of interests Name

1. Thai Airways International Pcl. (THAI)

Type of Transaction

1. Aviation fuel storage, fuel and defuel service at Don Mueang Airport and Suvarnabhumi Airport

Relationship

1. THAI is major shareholder of BAFS 2. -

Flying Ofﬁcer Norahuch Ployyai (ended Nov 30, 2010)

Flight Lieutenant Montree Jumrieng

Mr. Chokchai Panyayong

(since Feb 18, 2010) (since Feb 18, 2010) -

SQN.LDR.Asdavut Watanangura (since Dec 16, 2010)

BAFS’s directors are the executives of THAI 2. Collection of service fee for aviation fuel transport through agreed contract Hydrant System at Suvarnabhumi Airport 3. Customs Service Fee

2. Chevron (Thailand) Ltd.

1. Aviation fuel storage, fuel and defuel service at Don Mueang Airport and Suvarnabhumi Airport

Mr.Tanachai Vienravee, 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 3. Customs Service Fee

3. The Shell Company of Thailand Ltd.

1. Aviation fuel storage, fuel and defuel service at Don Mueang Airport and Suvarnabhumi Airport

Mr.Ath Hemvijitraphan, BAFS’s director is the executive of The Shell Company of Thailand Ltd

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

4. PTT Plc.

1. Aviation fuel storage, fuel and defuel service at Don Mueang Airport and Suvarnabhumi Airport

1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of PTT Plc.

2. Collection of service fee for aviation fuel transport

2. -

through Hydrant System at Suvarnabhumi Airport

Mr.Tevin Vongvanich (ended Feb 15, 2010) Mr. Nuttachat Charuchinda (since May 13, 2010), BAFS’s directors are the executive of PTT Plc.

3. Aviation fuel and defuel service at Samui and Sukothai Airports 4. Gas to refuel the vehicles

114

Connected Transactions

Unit Price

Amount ( Exclude VAT )

Outstanding Balance as of Dec 31, 2010

Continuation of Transaction

As speciﬁed in the agreed contract, with general

268. 88 Mil.Baht

25.49 Mil.Baht

Continue

95.61 Mil.Baht

8.82 Mil.Baht

Continue

332.12 Mil.Baht

30.69 Mil.Baht

Continue

134.39 Mil.Baht

12.30 Mil.Baht

Continue

239.25 Mil.Baht

20.69 Mil.Baht

Continue

95.95 Mil.Baht

8.28 Mil.Baht

Continue

357.44 Mil.Baht

37.38 Mil.Baht

Continue

146.79 Mil.Baht

15.15 Mil.Baht

Continue

17.35 Mil.Baht

1.56 Mil.Baht

Continue

3.70 Mil.Baht

0.31 Mil.Baht

Continue

business conditions

As specified in the agreed contract between BAFS, users, and Thai Aviation Refuelling Service Co., Ltd. and with general business conditions As specified in the agreed contract to full-service users, which is support normal business transactions, with general business conditions As specified in the agreed contract, with general business conditions As specified in the agreed contract between BAFS, users, and Thai Aviation Refuelling Service Co., Ltd. and with general business conditions As specified in the agreed contract to full-service users, which is support normal business transactions, with general business conditions As specified in the agreed contract, with general business conditions As specified in the agreed contract between BAFS, users, and Thai Aviation Refuelling Service Co., Ltd. and with general business conditions As specified in the agreed contract to full-service users, which is support normal business transactions, with general business conditions As specified in the agreed contract, with general business conditions As specified in the agreed contract between BAFS, users, and Thai Aviation Refuelling Service Co., Ltd. and with general business conditions As specified in the agreed contract, with general business conditions General business conditions, Actual use

115

Connected Transactions

Name

5. Airports of Thailand

Type of Transaction

1. Lease for Fuel Pipeline, Building and Area

Plc. (AOT)

Relationship

1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of AOT

t %PO .VFBOH "JSQPSU 1. Fuel Pipeline Lease

2. Mr.Serirat Prasutanond, BAFS’s director is the executive of AOT

(The lease payment was waived during Apr 1, 2009 – Dec 31, 2010) 2. Lease for ofﬁce building and area inside parking apron 3. Lease area outside parking apron t 4VWBSOBCIVNJ "JSQPSU 1. Concession fee for Into-plane Service 2. Lease area outside parking apron 3. Lease area inside passenger building 4. Lease area for parking dispensers and refuellers inside apron t $IJBOH .BJ "JSQPSU Lease area outside parking apron 2. Utility and other charges 6. Ministry of Finance

Lease for ofﬁce building and land at Don Mueang Airport

7. Thai Petroluem

1. Lease of Land, Building, Utility Service

Pipeline Co., Ltd.(THAPP)

Indirect major shareholder of BAFS Ministry of Finance is indirect major shareholder of BAFS and THAPP

t %PO .VFBOH %FQPU 1. Lease of Land and Building 2. Utility service

t 4VWBSOBCIVNJ %FQPU 1. Lease of Land and Building 2. Utility service

2. Water for ﬁre suppression system, water and electricity

8. Dhipaya Insurance Plc.

1. Property Insurance, Aviation Third Party Legal Liability Insurance and Terrorism Insurance 2. Car Insurance and Car Casualty Coverage

116

Ministry of Finance is indirect major shareholder of BAFS and Dhipaya

Connected Transactions

Unit Price

Amount ( Exclude VAT )

Outstanding Balance as of Dec 31, 2010

Continuation of Transaction

Continue

115 Baht/sqm /month

8.71 Mil.Baht

2.12 Mil.Baht

Continue

85 Baht/sqm /month

0.01 Mil.Baht

0.003 Mil.Baht

Continue

0.06 Baht/liter

223.72 Mil.Baht

93.06 Mil.Baht

Continue

60 Baht/sqm /month

5.53 Mil.Baht

1.35 Mil.Baht

Continue

450 Baht/sqm /month

0.69 Mil.Baht

0.16 Mil.Baht

Continue

150 Baht/sqm /month

3.05 Mil.Baht

0.74 Mil.Baht

Continue

7 Baht/sqm /month

0.02 Mil.Baht

Continue

General business conditions, Actual use

4.08 Mil.Baht

0.27 Mil.Baht

Continue

6.43 Mil.Baht

Continue

As speciﬁed in the agreed contract, with general business

0.45 Mil.Baht

Continue

conditions

0.66 Mil.Baht

Continue

As speciﬁed in the agreed contract, with general business

3.70 Mil.Baht

Continue

conditions

2.52 Mil.Baht

Continue

As speciﬁed in the agreed contract, with general business

0.30 Mil.Baht

0.11 Mil.Baht

Continue

8.68 Mil.Baht

Continue

1.16 Mil.Baht

0.25Mil.Baht

Continue

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

117

Connected Transactions

Name

9. Thai Aviation Refuelling

Type of Transaction

Relationship

1. Guarantee Fee

1. BAFS is major shareholder of TARCO

2. Connection of facilities with Hydrant system

2. M.R. Supadis Diskul, BAFS’s executive is

Co., Ltd. (TARCO)

the executive of TARCO 3. Lease for ofﬁce building -

Lease for canteen area at Suvarnabhumi Depot

Utility charges

4. Management service 5. Provision of stock account system and collection service

6. Audit on Hydrant System Operation 7. Quality Assurance and Technical Training 8. Hydrant Sampling Drain and Pit Cleaning 9. Safety and occupational heath consulting service 10. Legal consulting service 11. Computer system service 12. Consult service for application program 13. Training service in Quality Management 14. Training service in Writing course and English course for business communication 15. Granting of Karaoke set 10.Intoplane Services

1. Aviation refuelling service employment

1. BAFS is major shareholder of IPS

2. Management service

2. Mr. Jarern Pavarojkit, BAFS’s executive

Co., Ltd. (IPS)

is the executive of IPS 3. Telephone system service

118

Connected Transactions

Volume

870 Mil.Baht $ US 8 Mil.

Unit Price

1% of amount used each quarter by

Outstanding Balance as of Dec 31, 2010

Continuation of Transaction

6.48 Mil.Baht

1.42 Mil.Baht

Continue

582. 30 Mil.Baht

54. 02 Mil.Baht

Continue

0. 55 Mil.Baht

Continue

TARCO

82.22 sqm .

Amount ( Exclude VAT )

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

33,115.95 Baht /month

0.40 Mil.Baht

Continue

As agreed fee + 12.5%

4.15 Mil.Baht

Continue

478,146.60 Baht /month

1.91 Mil.Baht

Continue

3.94 Mil.Baht

Continue

(May 1, 2009 – Apr 30, 2010) 492,491 Baht /month (May 1, 2010 –Apr 30, 2011) -

As agreed rate

0.06 Mil.Baht

0.02 Mil.Baht

As agreed rate

0.83 Mil.Baht

0.10 Mil.Baht

Continue

As agreed rate

0.02 Mil.Baht

As agreed rate

0.006 Mil.Baht

Continue

As agreed rate

0.09 Mil.Baht

0.01 Mil.Baht

Continue

8,000 Baht /month

0.008 Mil.Baht

Continue

52,500 Baht /month

0.63 Mil.Baht

Continue

As agreed rate

0.004 Mil.Baht

Continue

As agreed rate

0.05 Mil.Baht

0.02 Mil.Baht

0.03 Mil.Baht

At cost + 12.5%

6.49 Mil.Baht

Continue

As agreed fee + 12.5%

2.21 Mil.Baht

Continue

As agreed rate

0.004 Mil.Baht

Continue

Actual Use

119

Connected Transactions

Name

11.JP-One Asset Co.,

Type of Transaction

1. Guarantee Fee

Relationship

1. BAFS is major shareholder of JP-One

Ltd (JP-One) 2. Lease for receiving pipeline system at Suvarnabhumi Airport 2. M.R. Supadis Diskul, BAFS’s executive is the executive of JP-One 3. Lease for Jet-A1 Depot at Suvarnabhumi Depot Area 4. Purchase of pipeline and pipeline joint 5. Lease for office building t %PO .VFBOH %FQPU 1. Lease of Office Building 2. Utility service t 4VWBSOBCIVNJ %FQPU 1. Lease of Office Building 2. Utility service 3. Telephone system service 6.

Management service

7. Safety and occupational heath consulting service 8. Quality management consulting service 9. Information technology network service 10. Legal consulting service 11. Marketing consulting service 12. Risk management service 13. Training service in Quality Management 14. Training service in Writing course for business communication 12.Fuel Pipeline

1. Lease/Service for aviation fuel receiving pipeline system

Transportation Ltd. (FPT)

of BAFS and FPT 2. Lease for land and ofﬁce building -

Lease for land

Lease for ofﬁce building

3. Lease for diesel receiving pipeline system 4. Commissioning for aviation fuel receiving pipeline system 5. Commissioning for diesel receiving pipeline system 6. Assistance in debt restructuring

120

Ministry of Finance is indirect major shareholder

Long term loan and receivable

Interest income

Connected Transactions

Volume

Unit Price

Amount ( Exclude VAT )

Outstanding Balance as of Dec 31, 2010

Continuation of Transaction

0.30 Mil.Baht

0.07 Mil.Baht

Continue

0.77 Mil.Baht

Continue

Long - Term Loan

1% of amount used each quarter by

120 Mil. Baht

JP-One

JET A-1 volume

0.01 Baht/liter/month

10.60 Mil.Baht

transporting through pipeline system 530,000 Baht /month

3.18 Mil.Baht

Continue

0.81 Mil.Baht

100 sqm

295.35 Baht/ sqm/month

0.39 Mil.Baht

Continue

(not include property and land tax ) Actual Use

As agreed rate

0.03 Mil.Baht

0.01 Mil.Baht

Continue

54 sqm

450 Baht/sqm/month (not include

0.36 Mil.Baht

Continue

property and land tax ) 11,000 Baht /month

0.10 Mil.Baht

Continue

Actual Use

As agreed rate

0.01 Mil.Baht

Continue

As agreed fee + 12.5%

4.15 Mil.Baht

Continue

As agreed rate

0.09 Mil.Baht

Continue

As agreed rate

0.01 Mil.Baht

Continue

As agreed rate

0.58 Mil.Baht

Continue

As agreed rate

0.09 Mil.Baht

0.02 Mil.Baht

Continue

As agreed rate

0.31 Mil.Baht

0. 1 Mil.Baht

Continue

As agreed rate

0.03 Mil.Baht

Continue

As agreed rate

0.006 Mil.Baht

Continue

As agreed rate

0.003 Mil.Baht

Continue

21.5 % of FPTâ&#x20AC;&#x2122;s revenue from

2.91 Mil.Baht

0.32 Mil.Baht

Continue

1.20 Mil.Baht

Continue

JET A-1 transporting (before discount and tax) 8,144 sqm

Rental charges paid to Department of Treasury plus 5%

1,458 sqm

320 Baht/sqm/month

5.60 Mil.Baht

Continue

As agreed rate

2 .04 Mil.Baht

0.51 Mil.Baht

Continue

0.003 Mil.Baht

0.18 Mil.Baht

382 .69 Mil.Baht

Continue

3.93 Mil.Baht

Continue

1% per annum

121

Connected Transactions

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

1. Airports of Thailand

Type of Transaction

1. Permission for Operation of the Hydrant Pipeline Network

Plc. (AOT)

Relationship

1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of AOT

2. Lease for land at Suvarnabhumi Airport for laying equipments and hydrant pipeline

2. -

Mr.Nirandra Theeranartsin

Mr.Chayakorn Aksharamat (ended Oct 31, 2010)

Flying Ofﬁcer Anirut Thanomkulbutra (since Nov 29, 2010), TARCO’s directors are the controlling persons of AOT

3. Lease for room inside passenger building at Suvarnabhumi Airport for ofﬁce building 4. Lease for area behind domestic cargo at Suvarnabhumi Airport to construct for parking the service vehicles and other facilitators 5. Lease for area inside parking apron at Suvarnabhumi Airport for parking the service vehicles and storing ground support equipments 6. Utility and other charges of AOT 2. PTT Plc.

Gas to refuel the vehicles

1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of PTT Plc. 2. -

Mr.Tevin Vongvanich (ended Feb 15, 2010) Mr. Nuttachat Charuchinda (since May 13, 2010), BAFS’s directors are the executive of PTT Plc.

3. The Shell Company

Gas to refuel the vehicles

of Thailand Ltd. 4. Dhipaya Insurance Plc.

122

Mr.Ath Hemvijitraphan, BAFS’s director is the executive of The Shell Company of Thailand Ltd.

Property Insurance, Aviation Third Party Legal

Ministry of Finance is indirect major shareholder

Liability Insurance and Terrorism Insurance

of BAFS and Dhipaya

Connected Transactions

Volume

Unit Price

2% per annum of TARCOâ&#x20AC;&#x2122;s revenue

Amount ( Exclude VAT )

Outstanding Balance as of Dec 31, 2010

Continuation of Transaction

11.65 Mil.Baht

Continue

before deduct any expenses 121.20 sqm

60 Baht/sqm/month

0.09 Mil.Baht

Continue

136.58 sqm

450 Baht/sqm/month

0.09 Mil.Baht

Continue

1,600 sqm

60 Baht/sqm/month

1.24 Mil.Baht

Continue

150 Baht /sqm/month

0.06 Mil.Baht

Continue

General business condition, Actual use

0.55 Mil.Baht

0.04 Mil.Baht

Continue

General business condition, Actual use

0.48 Mil.Baht

0.01 Mil.Baht

Continue

General business condition, Actual use

0.13 Mil.Baht

0.01 Mil.Baht

Continue

As speciďŹ ed in the agreed contract,

2.32 Mil.Baht

Continue

39 sqm

with general business conditions

123

Connected Transactions

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 Transaction

1. Land sublease for laying pipeline and constructing control station (ended May 31, 10)

Relationship

Ministry of Finance is indirect major shareholder of BAFS and FPT

2. Guarantee for compliance of land lasing agreement for laying pipeline and constructing control station (ended May 31, 10) 3. Pipeline route monitoring (ended May 31, 10) 4. Connection of common facility with Makkasan -Suvarnabhumi pipeline system 5. Employment for operation, repair and maintenance of Makkasan-Suvarnabhumi pipeline system 6. Throughput fee from Bangchak Reﬁnery and fuel depot at Chong Nonsi to Makkasan control station 2. 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. 2. -

Mr.Tevin Vongvanich (ended Feb 15, 2010) Mr. Nuttachat Charuchinda (since May 13, 2010), BAFS’s directors are the executive of PTT Plc.

3. Chevron (Thailand) Ltd.

Service charge for pipeline system to Suvarnabhumi Depot

Mr.Tanachai Vienravee, BAFS’s director is the executive of Chevron (Thailand) Ltd.

4. The Shell Company

Service charge for pipeline system to Suvarnabhumi Depot

of Thailand Ltd. 5. The Bangchak

Mr.Ath Hemvijitraphan, BAFS’s director is the executive of The Shell Company of Thailand Ltd.

Service charge for pipeline system to Suvarnabhumi Depot

Petroleum Plc.

Ministry of Finance is indirect major shareholder of BAFS and The Bangchak Petroleum Plc.

6. Airports of Thailand Plc. (AOT)

Land lease outside airport ground within Suvarnabhumi Airport to lay aviation fuel pipeline

1. Ministry of Finance is indirect major shareholder of BAFS and major shareholder of AOT 2. Mr.Serirat Prasutanond, BAFS’s director is the executive of AOT

124

Connected Transactions

Volume

Amount ( Exclude VAT )

Outstanding Balance as of Dec 31, 2010

Continuation of Transaction

1.03 Mil.Baht

2 Mil.Baht

755,200 Baht/month

3.78 Mil.Baht

0.51% of revenue but not less than

0.57 Mil.Baht

0.04 Mil.Baht

Continue

5.56 Mil.Baht

0.41 Mil.Baht

Continue

6.50 Satang/liter

68.87 Mil.Baht

5.02 Mil.Baht

Continue

36.43 Mil.liters

As agreed conditions

6.19 Mil.Baht

Continue

210.31 Mil.liters

As agreed conditions

35.75 Mil.Baht

0.29 Mil.Baht

Continue

83.13 Mil.liters

As agreed conditions

14.13 Mil.Baht

2.38 Mil.Baht

Continue

729.70 Mil.liters

As agreed conditions

124.05 Mil.Baht

10.45 Mil.Baht

Continue

2,209.88 sqm

60 Baht/sqm/month

1.47 Mil.Baht

Continue

10,672 sqm

Unit Price

232 Baht/ sqm/year

23,680 m

15,000 Baht /month 5% of revenue but not less than 100,000 Baht/month 1,059.56 Mil.liters

125

Opinion on Connected Transactions for the Year 2010 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 2010, 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, 2010. Furthermore, in the Board of Directors’ meeting held on February 23, 2011 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 Pcl. 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 external parties except for new oil 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 business conditions. This service should benefit the Company’s operation in both Don Mueang and Suvarnabhumi Airports.

126

Opinion on Connected Transactions for the Year 2010

1.4 PTT Plc. Rationale and Necessity The Company provides the aviation fuel storage, transport and refuelling services, as well as collection of service fee for aviation transport through Hydrant System to PTT Plc. (PTT) as same as to 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 supply fuel through aviation refuelling system. PTT 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 transactions, 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 general business 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 t %PO .VFBOH "JSQPSU 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 aviation fuel through Hydrant 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 Company has 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 the most beneficial to the Company’s operation since they are part of normal business operation of the aviation refuelling service at Don Mueang Airport. Since 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 requested for the exemption of fuel pipeline charge. Subsequently, AOT exempted the charge for the year 2010 . t

4VWBSOBCIVNJ "JSQPSU 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 and defuel service at Suvarnabhumi Airport 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.

127

Opinion on Connected Transactions for the Year 2010

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 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. In the early 2010, AOT concerned of the effect of political conflict situation in the country, as such AOT had measures to alleviate such effect to the airlines and operators at Don Mueang and Suvarnabhumi Airports, by decreasing the rental charge and/or building service charge by 10% for 9 months, since April – December 2010. Therefore, the Company received the discount for the rental charge of office building and area inside and outside parking apron. t

$IJBOH .BJ "JSQPSU 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. This is to support the original expansion plan of service to Chiang Mai Airport. The lease rate equals to the rate for external parties. However, this plan has no potential to arise; the Company will further cancel the agreement with AOT. The Audit Committee has the opinion that such transaction is connected transaction, but is beneficial to the Company’s operation according to the original plan. 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 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 they are parts of normal aviation refuelling operation in airports. 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 land relating to the Company’s building and fuel depot. The agreement also circumvents the lease for Fuel Pipeline Transportation Ltd. and JP-One Asset Co., Ltd. The rented buildings and land are used for aviation refuelling and related services of the Company and its subsidiaries. The Company agreed to pay the rent and comply with the terms specified in the agreement. 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.

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Opinion on Connected Transactions for the Year 2010

1.7 Thai Petroleum Pipeline Co., Ltd.(THAPP) Rationale and Necessity The Company entered contract with Thai Petroleum Pipeline Co., Ltd. (THAPP) as lessor of land and building at fuel depot in Don Mueang and Suvarnabhumi airports, as well as a provider of 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. 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 the airport. 1.8 Dhipaya Insurance Plc. Rationale and Necessity The Company made Property Insurance, Aviation Third Party Legal Liability Insurance, and Terrorism Insurance, as well as Car Insurance and Car Casualty Coverage with Dhipaya Insurance Plc. (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 transactions are connected transactions, but are necessary and the most beneficial to the Company’s operation as they cover risk and reduce 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 shareholder agreement that shareholders shall transfer 10% of the shares to New Bangkok International Airport Co., Ltd. (NBIA) at no cost. After that Airports of Thailand Plc. (AOT) received business, rights, debts, liabilities, obligations and asset of NBIA. Currently, AOT shall have full ownership to those shares. The Company has entered into the agreemant with Bangkok Bank Plc. to guarantee credit facilities of TARCO, a subsidiary, 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.

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Opinion on Connected Transactions for the Year 2010

The Company has entered into the agreement 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 and provided utility service according to the lease contract. The rental and service charge is at market price. 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. 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. The Company has enter into the agreements / memorandums with TARCO regarding the services of audit on Hydrant System operation, quality assurance and technical training, Hydrant Sampling Drain and Pit Cleaning, safety and occupational heath consulting, legal consulting, computer system, consult for application program, as well as training in quality management, writing course and English course for business communication. The service fees are 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. Moreover, the Company was granted a karaoke set from TARCO. The Audit Committee has the opinion that such transaction is connected transaction, but is transparent as TARCO give it to thank you the Company as TARCO’ customer. 1.10 Intoplane 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 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 companies.

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Opinion on Connected Transactions for the Year 2010

In addition, the Company provides telephone service to IPS at the rate equals to the rate for external parties and according to the actual usage. 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 JPOne, 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 transaction 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 oil companies to the Company’s aviation fuel system at Suvarnabhumi Airport which is the most beneficial to the Company. The Company purchased pipeline and pipeline joint to use for diesel storage system. The Company had memorandum in entering this transaction, with the purchase price was at market price. The Audit Committee has the opinion that such transaction is connected transaction, but is beneficial to the Company’s operation that supported the Company to construct and use the diesel storage system before the projected plan. 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. 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 other companies. The Company has enter into the agreements / memorandums with JP-One regarding the services of safety and occupational heath consulting, quality management consulting, information technology network, legal consulting, marketing consulting, risk management consulting, as well as training in quality management, and writing course for business communication. The service fees are 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.

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Opinion on Connected Transactions for the Year 2010

1.12 Fuel Pipeline Transportation Ltd. (FPT) 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 had agreement with FPT to lease out / service aviation fuel pipeline receiving system, as well as leased out land and office building. The charge for the pipeline receiving system is 21.5% of FPT’s revenue from aviation fuel transporting. (before discount and tax). For the rent on land and offices, it is 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 oil companies and dispenses fuel to pipeline receiving system before reaching the aviation refuelling service of the Company through the underground pipeline at Don Mueang Airport. This is the most beneficial to the Company’s operation. The Company had agreement with FPT to lease out diesel pipeline receiving system, with agreed rental rate. The Audit Committee has the opinion that such transaction is connected transaction, but is the most beneficial to the Company’s operation as FPT is the sole pipeline transportation operator, which can transport diesel via pipeline to the Company. Moreover, FPT has oil companies as customer base that used fuel transportation service of FPT. Therefore, the Company can save operation cost and use existing customers of FPT to create certain revenue together, while maximize the utilization of asset. The Company hired FPT for commissioning of aviation fuel and diesel receiving pipeline system. The Audit Committee has the opinion that such transactions are connected transactions, but are the most beneficial to the Company’s operation to ensure that the receiving pipeline system can operate without any problem. 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 transaction is connected transaction, but is beneficial to the Company’s operation as the Company will benefit from receiving back more principle. 2. The transactions between Thai Aviation Refuelling Co., Ltd. (a subsidiary) and the connected persons who may have conflict of interests 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.

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Opinion on Connected Transactions for the Year 2010

Furthermore, TARCO signed the contract on renting land and room inside passenger building at Suvarnabhumi Airport. The land is for stacking equipments and Hydrant for maintenance and the room inside passenger building is for the office for service staffs. The rental fee is as similar rate as the rate that AOT made with external parties. TARCO has entered into the lease agreement for area behind domestic cargo to construct for parking the service vehicles and other facilitators. TARCO has also entered into the lease agreement for area inside parking apron at Suvarnabhumi Airport for parking the service vehicles and storing ground support equipments. The rental fee is as similar rate as the rate that AOT made with external parties. The Audit Committee has the opinion that such transactions are connected transactions, but are 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 AOT made with external parties. 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. 2.2 PTT Plc. 2.3 The Shell Company of Thailand Ltd. Rationale and Necessity TARCO bought fuel from PTT Plc. (PTT) and The Shell Company of Thailand Ltd. (Shell) gas stations to refuel TARCO’s vehicles. PTT and Shell charged TARCO according to the market price with general business conditions. The Audit Committee has the opinion that such transactions are connected transactions, but are beneficial to TARCO’s operation. 2.4 Dhipaya Insurance Plc. Rationale and Necessity TARCO made Property Insurance, Aviation Third Party Legal Liability Insurance, and Terrorism Insurance with Dhipaya Insurance Plc. (Dhipaya Insurance). The insurance premium is charged at the market rate. The Audit Committee has the opinion that such transactions are connected transactions, but are necessary and beneficial to TARCO’s operation as they cover risk and reduce damage that may result from 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) Rationale and Necessity JP-One has entered into a 30-years land sublease agreement with FPT for laying pipeline and constructing control station for Makkasan-Suvarnabhumi route. 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 FPT’s compliance with the land lease

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Opinion on Connected Transactions for the Year 2010

contract obligations. In additions, JP-One employed FPT to monitor pipeline route, by having a memorandum, which the employment rate was based on the cost of personnel and monitoring equipment for 24 hours a day. However, since June 1, 2010, JP-One was transferred the rights from FPT for leasing land for Makkasan-Suvarnabhumi route, therefore JP-One canceled the aforementioned land sublease agreement, bank guarantee and memorandum. 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 with common facility of FPT and employed FPT to operate, repair and maintenance the above pipeline system. 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. The agreements 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 on time fuel transportation, with qualified standard in areas of marketing, security and reporting, etc. 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 PTT Plc. 3.3 Chevron (Thailand) Ltd. 3.4 The Shell Company of Thailand Ltd. 3.5 The Bangchak Petroleum Plc. Rationale and Necessity JP-One has entered into the agreements / memorandums on aviation fuel pipeline system from Bangchak Refinery to Chong Nonsi fuel depot through pipeline system of FPT and JP-One to fuel depot at Suvarnabhumi Airport. The service rate was at the same rate as charged to the external parties. 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 are the most beneficial to JP-One since they are part of normal business operation. 3.6 Airports of Thailand Plc. (AOT) Rationale and Necessity JP-One signed land lease contract with AOT outside the airport ground but within the operating area of Suvarnabhumi Airport to lay aviation fuel pipeline from fuel refinery to the Company’s fuel depot. The rental fee is as similar rate as the rate that AOT made with external 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.

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