EASTW: Annual Report 2011 EN by Piyanat Kimhamanon

2011 ANNUAL REPORT

Bang Khla

Mueang

CHACHOENGSAO

Bangpagong River

Ban Pho

Bang Sao Thong Pan Tong Panat Nikom

Mueang

Ban Bueng

Reservoir Bang Phra

CHON BURI

Reservoir Nong Kho

Ko Sichang

Nong Yai

Siracha Reservoir Khlong Yai

Reservoir Pra Sae

Reservoir Nong Pra Lai

Bang Lamung

Reservoir Dok Krai

Pluak Daeng

Wang Chan

Ban Khai

RAYONG Sattahip

Ban Chang Mueang

Raw Water Pipe Line (EW) Existing Pipe Network Constructing Pipe Network

Raw Water Pipe Line (RID) Pump Station Head Tank Emergency Pond

Main Water Resource Reserve Water Resource Regulating Well/Recieving Well

Existing Pipe Network Constructing Pipe Network

“ SUSTAINABLE GROWTH OF BROADER VISION ”

THE FIRM OF

PRODUCTIVE WATER SOLUTION DEVELOPMENT Water is infinitely invaluable because it is a natural resource which provides countless benefits to all lives of living creatures on Earth. Awareness about resource management is critical in fulfillment of the needs of all sides. This is especially important at present, since there has been an increased demand for water for various activities, spanning industries, agriculture, residentail consumptiom, and tourism. Hence, efficient water resource management has an important role in driving and developing the economy, society, and environment in a sustainable manner.

Khlong Khuean Bang Khla Mueang

CHACHOENGSAO

Bangpagong River

Ban Pho

Bang Sao Thong

The process of water distribution Head Tank

Factory

Pumping station

Pan Tong

Industrial Estate

Panat Nikom

Mueang

Consumption

Ban Bueng

Reservoir Bang Phra

Ko Sichang

CHON BURI

Reservoir Nong Kho

Nong Yai

Siracha Reservoir Khlong Yai

Reservoir Pra Sae

Reservoir Nong Pra Lai

Bang Lamung

Reservoir Dok Krai

Pluak Daeng

Wang Chan

Ban Khai

RAYONG Sattahip

Ban Chang Mueang

Raw Water Pipe Line (EW) Existing Pipe Network Constructing Pipe Network

Raw Water Pipe Line (RID) Pump Station Head Tank Emergency Pond

Main Water Resource Reserve Water Resource Regulating Well/Recieving Well

Existing Pipe Network Constructing Pipe Network

PROACTIVE DETERMINATION TO BE SUCCESSFUL CORPORATE

In addition to the success in water management, we are also committed to successful financial results to develop and encourage growth for the corporation and its employees. This vision extends to build confidence for investors who can join in our endeavors in driving the corporation to become experts in water resource management in Eastern Thailand as well as further projects in the future.

PROMOTING

EQUITY TOWARDS HIGH INTEGRITY

The corporation consists of employees and management committed to the principles of working with honesty and integrity to establish confidence for stakeholders in our finances and investment. We attach importance to good corporate governance and aim to create benefits for shareholders while providing equity of treatment to all stakeholders. We also hold activities to promote good corporate governance for our subsidiaries, to motivate our employees and management of all levels to uphold the principles of transparency, honesty, accountability, and competitiveness in their careers.

ENDLESS SPIRIT OF TEAMWORK

Since we believe that human resources are the root of the corporationâ&#x20AC;&#x2122;s sustainable and stable growth, East Waterâ&#x20AC;&#x2122;s business conduct is committed to the development of our employees coupled. We have a strategy to promote learning in expertise and holistic knowledge about water resources. We encourage innovation in application of business and actively promote innovation beyond the corporation. We regularly support activities to enhance the relationship between employees of all levels in order to create the exchange of ideas, teamwork, and unity.

10TO DOTHINGS TO SAVE WATER

• Would it be better to use the shower faucet?

• Use of the Flush

• Laundry

Each flush uses 8-12 liters of water. To save Allowing water to run continuously during laundry Using the bath tub wastes 110-200 liters of water, separate installation of urinals and toilets wastes water at a rate of 9 liters per minute water each time, compared to 30 liters is recommended. when using a shower faucet. • Frequent Inspection of Faucets Water that leaks from the faucet results in • Doing the Dishes • Would it be better to use cups? Clearing leftovers and scraping off dirty residues unnecessary waste. If repairs are not made, Did you know? Using a cup to hold water while before doing the dishes is better than directly the leaked water should be saved in a container brushing one’s teeth requires only 0.5 to 1 liter washing it by letting water flow from the faucet, for further use. of water, but letting water continuously flow at a rate of 9 liters per minute. • Sprinklers Can Help without a cup would waste 20-30 liters of water. Using sprinklers to water plants instead of a • Cleaning Vegetable, Fruits, and Various Tools • Shaving hose can save water. Using a towel to wipe during a shave saves Using a container to hold the required amount water and paper. Cleaning can be done after of water is better than allowing the water to run • Water Saved from Laundry Can be Reused the shave. freely during the cleaning process. Used water froming laundry con be reused for water plants, which is a way of saving water.

Contents Highlights of the year........................................................................................................11 Vision Mission Strategy......................................................................................................13 Message from Chairman..................................................................................................14 Board of Directors and Advisors. ..................................................................................16 Corporate Executives.........................................................................................................22 Organization Structure......................................................................................................27 Industry and Competition................................................................................................28 Business Profile and Subsidiary Shareholding Ratio...............................................30 Risk Factors.............................................................................................................................32 Management Discussion and Analysis........................................................................35 Good Corporate Governance.......................................................................................40 Definition of Independent Directors..............................................................................51 Sufficiency Assessment of Internal Control System................................................52 Corporate Governance Report of the Audit Committee.....................................54 Report of the Corporate Governance and Nominating Committee..............57 Report of the Board of Directorsâ&#x20AC;&#x2122; Responsibility toward Financial Statement Report..............................................................................58 Auditorâ&#x20AC;&#x2122;s Report...................................................................................................................59 Balance Sheets.....................................................................................................................60 Notes to Consolidated and Company Financial Statements.............................68 Related Parties Transactions.........................................................................................123 The Remuneration of Auditors......................................................................................124 General Information.........................................................................................................125 The List of Top 10 Major Shareholders....................................................................127 Dividend Payment Policy ..............................................................................................128

Highlights of the year Water distribution capacity and raw water consumption volume during 2004-2011 Unit : Million Cubic Meters/Year Total water consumption Water distribution capacity Water distribution capacity to water consumption ratio (Unit : Times)

2004 177.65 343

2005 190.10 423

2006 199.36 423

1.93

2.23

2.12

2007 2008 211.20 227.69 473 473 2.24

2009 221.27 473

2010 2011* 244.88 261.51 473 473

2.28

2.08

1.93

1.81

The raw water pipeline construction project of Nong Pla Lai - Map Ta Phut, line 3, which under construction and scheduled for completion in 2012 in order to increase of water distribution capacity of 105.00 million cubic metres per year.

Financial Ratio Description

2007 Book value (per share) 3.50 Net profit (per share) 0.33 ** Dividend (per share) 0.25 Net profit to total income (%) 18.13 Return on shareholders equity (ROE) (time) 9.36 Return on assets (ROA) (time) 4.46 Debt to equity ratios (D/E) (time) 1.09

Consolidated Financial Statement 2008 3.59 0.34 0.25 23.45 10.70 5.97 0.56

2009 3.18 0.49 0.35 28.04 12.96 8.73 0.44

2010 3.98 0.55 0.38 27.87 13.41 9.46 0.49

2011 4.17 0.61 0.12 30.45 14.88 9.76 0.551,008

867

808

571

441

Company Financial Statement

2007 3.55 0.33 0.25 22.98 9.58 4.86 0.97

2008 3.47 0.31 0.25 25.30 10.09 5.87 0.52

2009 3.63 0.44 0.35 30.92 12.96 8.63 0.35

2010* 3.74 0.50 0.38 30.20 12.83 9.66 0.41

2011 3.91 0.55 0.12 32.75 14.25 9.84 0.49

3,310 Remarks * Excluding the revenue,2,430 cost, profit and2,437 tax effects 2,878 related to the3,107 project construction of pipeline connecting Prasae reservoir to Klong Yai reservoir in Rayong Province from the calculation in order to compare in part of the Company’s operating results ** The interim dividend payment announced in accordance with the resolution of the Board of Directors’ Meeting on September 20, 2011.

Income and Net Profit in past 5 years* 28

308 555

Comparison of total revenue and net profit in 2007 - 2011 (million Baht)

1,538

636

541

รายไดอื่นๆ (ลานบาท)

766

716

รายไดจากคาเชาเเละบร�การ (ลานบาท) รายไดจากการขายน�ำประปา (ลานบาท)

1,673

2,261

2,118

1,904

867

Net Profit

1,008

441

571

808

2,430

2,437

2,878

3,107

3,310

2007

2008

2009

2010

2011

28 308 555

Source of income (million Baht)

282

143

60 224

42 232

1,538

2007

80 143 541

56 282 636

42 232 716

60 224 766

รายไดจากการขายน�ำดิบ (ลานบาท)

Total Income

Miscellaneous (MB) Rent and Service (MB) Sale of Tap Water (MB)

1,673

1,904

2,118

2,261

2008

2009

2010

2011

Sale of Raw Water (MB)

Remarks * In 2010, exclusion from income capital profit and tax impact relating to pipe line construction project, from Pra Sae reservoir to Khlong Yai reservoir in Rayong, to compare the analizysis of specific Company’s.

Eastern Water Resources Development and Management PLC. |

| Annual Report 2011

Vision Mission Strategy

Mission Vision To be the valued leader of water management for economic • To expand the investment in tap water and waste water development and longevity of society

Strategy To be in accordance with vision and mission, the

Company has stipulated 4 conforming strategies covering 4 important aspects 1) finance and 2)investment growth, 3) stakeholders management, and 4) corporate learning and development as well as information technology with the details as follows:

business for sustainable growth of the Company. • To continuously maintain the growth of raw water business • To maintain the Good Corporate Governance and social responsibility toward local communities, society and environment • To encourage leadership and the center of water technology knowledge.

Stakeholders 4. Good Corporate Governance to continuously maintain confidence and satisfaction of all stakeholders 4.1 Good Corporate Governance 4.2 Social and environmental support/development 4.3 Quality of life and work environment development

Corporate learning and development and information technology 5. Creation of learning organization culture to provide business skills and knowledge and know how on water business and new technology to staff 5.1 personnel development and recruitment to support the development of one-stop-service water business. 5.2 Building knowledge centers in the organization 6. Information technology development to create data Management 2. Adjustment of internal procedures to provide better system for efficient management purpose 6.1 Information technology development for efficient services to customers continuously integrated management within the Company’s 2.1 Water distribution service enchantment group. 2.2 Work procedure efficiency enchantment 6.2 Maintenance of data protection stability and 3. Management of water pumping efficiency to be keeping up to date with changes in technologies. consistent and sufficient to customers 3.1 Enchantment of water piping system capacity 3.2 Building of raw water resource stability Finance and Investment Growth 1. Expansion of the investment in raw water, tap water and waste water business 1.1 Expansion of water business investment and development of business and alliances 1.2 Management of finance and capital to support investment

Eastern Water Resources Development and Management PLC. |

Message from Chairman

| Annual Report 2011

Message from Chairman In 2011, the Company committed to develop its business based on social responsibility. In this connection, the Company adjusted the scope of strategies for operation to be more challenging in order to support future business expansion and more focus on the sufficient provision of water resources and the development of new water resources. Furthermore, the Company, together with its efficient alliances, had considered the opportunity to expand the business in environment, waste water management, environmental management and alternate energy areas. Moreover, the Company improved the efficiency of organizational structure and group’s management from policy level in order that the directions and goals of the group of companies are under single business supervision and that the management and personnel development systems are mutually developed to support the group’s business expansion. To achieve the utmost benefit of the group’s strategic business management, the Company adopted a new Enterprise Resources Planning to reduce operational procedures and costs, leading to the Company’s high-quality work system and readiness for global competition. In the meantime, the Company has maintained the increasing operating results consistently which led to the announcement of the interim dividend payment of 2011 fiscal year. This achievement was resulted from the adoption of investment and finance strategies for fund procurement, the increase of fund procurement’s capacity

with low financial cost and the expenditure control. The last year outstanding operating result has well proved the Company’s potentiality.

growth among the Company’s business, environment, society and communities for their coexistence in a long and sustainable term.

The Company has committed to emphasize on continuous sustainable growth of the business with environmental, social and community cares. In 2011, the Company continued to run social and environmental projects from previous years and launched additional projects beneficial to the communities to help such communities to be able to permanently grow by themselves; for example, providing a training on repair, maintenance and management of community tap water etc. In 2011, many provinces in Thailand were severely affected from the flood crisis. The Company was well aware about the difficulties of the victims and all related parties and allocated some of CSR budgets to assist and relieve such difficulties; for example, donating bottled drinking water and providing drinking water mobile service and free installation of drinking water machines for many affected community areas. Additionally, the Company provided its water pumping machines to pump the water from Klong Keon pumping station at Bangpakong River and turn into the estuary at the bridge of motorway in assistance to government sectors and moved its water pumping machines to be installed at Phraya Wisut and Nang Hong pumping stations in Samut Prakarn Province to help the Royal Irrigation Department draining water. All these distributions reflect the Company’s commitment of simultaneous

The Company’s Board of Directors was well aware that the successes of the Company were achieved by all parties’ cooperation, especially that of executives and staff of the Company who dedicated their full effort and played important roles in driving the organization to achieve a higher goal and move forward to establish global company in the future. On behalf of the Company’s Board of Directors, I would like to thank the shareholders, all stakeholders, including all related government and private sectors for continuous reliability and support to the Company’s operation and business. The Company would like to assure you that the Company will commit to the vision and mission by operating the business on the basis of the Good Corporate Governance Policy with transparency and verifiable manner to achieve the utmost benefit to the shareholders, stakeholders and all other related parties in order to add value to the business, society and environment for their shared sustainable growth.

Mr. Chanchai Sunthonmat Chairman

Eastern Water Resources Development and Management PLC. |

Board of Directors and Advisors

12 5

| Annual Report 2011

1. Mr.Charnchai 2. Mr.Somchai 3. Mr.Poonsak 4. Mr. RungsonÂ 5. Mr.Vichian

Soontharamut Choomrat Pranootnaraparn Sriworasat Udomratanasilpa

6. Mrs. Monta

Pranootnorapal

7. Mr.PermsakÂ 8. Mrs.Arunee

Rattana-ubon Arkaraprasertkul

9. Pol.Gen.Wutthi Phuawade 10. MissNarinee Talomsin 11. Mr.Praphant Asava-aree 12. Mr.Surapol 13. Mr.Nakorn

Pongtadsirikul Jirasavetakul

Mr.Charnchai Soontharamut

Position

• Chairman

Age 64

(Independent Director) Education • M.P.A. (Political Science) Middle Tennessee State University U.S.A. • B.A. (Political Science) Thammasat University M.P.A. Work Experience Oct 11 - Present • Chairman Eastern Water Resources Development and Management PLC. 2010 - Present • Board of Directors Director Government Savings Bank 2005 - 2007 • Government Savings Bank • Director-General • Department of Provincial Administration Ministry of Interior EW Shareholding -None-

Mr.Somchai

Position

Choomrat

Age 61

• Board of Director • Chairman of the Executive and

Investment Committee • Director of Risk Management Committee Education • B.A. (Political Science) Faculty of Political Science Thammasat University • Master of Public Administration (M.P.A.) National Institute in Development Administration (NIDA) Special Courses • DCP 97/2008 • RCP 15/2007 • NDC 2542 Work Experience Oct 11 - Present • Board of Director Eastern Water Resources Development and Management PLC. 2009 - 2010 • Board of Director, A.C.T.Mobile Ltd. 2008 -2010 • Permanent Secretary for Labour Ministry for Labour 2007 - 2008 • Director - General Department of Public Works and Town & country Planning, Ministry of Interior 2006 - 2007 • Deputy Permanent Secretary for Interior Ministry of Interior 2005 - 2007 • Phra Nakhon Si Ayutthaya Governor Ministy of Interior 2000 - 2005 • Sa Kaeo Governor, Ministy of interior EW Shareholding -None-

Mr.Poonsak Pranootnaraparn Age 61

Position

• Board of Director

(Independent Director)

• Chairman of the Evaluation Committee

and the Renumeration Committee of the Audit Committee Education • B.A. (Political Science) Chiangmai University • M.A. (Political Science) Utah State University , U.S.A. Special Courses • NDC 2546 Work Experience Oct 11 - Present • Board of Directors Eastern Water Resources Development and Management PLC. 1 Nov 10 - Present • Vice President for Business Development, Acting Dean of the Faculty of Public Administration Dhurakij Pundit University 20 Oct 08 - 30 Sep 10 • Chanthaburi Governor Ministry of Interior Oct 08 - Sep 10 • Chairman of the Eastern Coastal Basin 13 Nov 06 - 19 Oct 08 • Surin Governor, Ministry of Interior Oct 04 - Nov 06 • Nakhonnayok Vice Governor, Ministry of Interior Oct 00 - Sep 04 • Nonthaburi Vice Governor, Ministry of Interior EW Shareholding -None• Director

Eastern Water Resources Development and Management PLC. |

Mr. Rungson Sriworasat

Age 56

Position • Board of Director (Independent Director) • Director of the Audit Committee • Director of the Corporate Governance Committee and the Nominating Committee Education • B.S.(Accounting) Ramkhamhaeng University • B.A.(Law) Sukhothaithammathirat University • MBA. Prince of Songkla University Special Courses • OCSC 42 • BYS 10 • NDC 2549 • KPI 13 • ICMA10 • DCP 81/2006 • ACP 26/2009 • SFE 2/2008 Work Experience Feb 2011 - Present • Board of Director Eastern Water Resources Development and Management PLC. 2010 - Present • Director, General The Corptroller General’s Department • Director, Bank for Agriculture and Agricultural Co-operatives • Director, Government Pension Fund • Director and Secretary, Thailand’s Student Loan Fund • Director, Malaysia-Thailand Scint Authority EW Shareholding -None18

| Annual Report 2011

Mr.Vichian Udomratanasilpa

Mrs. Monta Pranootnorapal

Age 59

Age 57

Position Board of Director Chairman of the Risk Management Education Committee • B.Sc.(Sanitary Science) • Director of the Evaluation Mahidol University Committee and the Renumeration • M.Sc.(Environmental Engineering) Asian Institue of Technology (AIT) Committee Education Special Courses • Master of Public Administration • DCP 94/2007 (M.P.A.) Work Experience National Institute of Development Dec 11 - Present Administration (NIDA) • Board of Directors • LL.B (honour) Thammasat University Eastern Water Resources Development and Management PLC. Special Courses • DCP 84/2007 2010 - Present • Deputy Governer (Technical Affairs) • NDC 4818 Work Experience Provincial Waterworks Authority JAN 08 - Present (PWA) • Board of Director 2008 - Present Eastern Water Resources • Board of Directors Wastewater Management Authority Development and Management PLC. MAY 08 - Present (WMA) • Director and Governor Industrial EW Shareholding Estate Authority of Thailand -NoneOCT 04 - DEC 07 • Deputy Governor 11 ( Industrial Port ) Industrial Estate Authority of Thailand EW Shareholding -NonePosition

• Board of Directors

• •

Mr. Permsak Rattana-ubon

Mrs. Arunee Arkaraprasertkul

Age 58

Position • Board of Director • Director of the Evaluation Committee and the Renumeration Committee Education • B.E. (Mechanical) Chulalongkorn University Special Courses • DCP 124/2009 Work Experience 24 Mar 11 - Present • Board of Director Eastern Water Resources Development and Management PLC. Mar 11 - Present • Deputy Managing Director - Operation EGCO Engineering and Service Co.,Ltd 2001 - 2011 • Engineering & Energy Business Division Manager EGCO Engineering and Service Co.,Ltd 1994 - 2000 • Vice President of all M&E Construction for Industrial Plant & Building • Project Manager,for example of Fabrication and Erection of Steam Methane Reformer Furnace for ABB (LUMMUS) Italthai Engineering Co.,Ltd. EW Shareholding -None-

Age 62

Position Board of Director (Independent Director) • President of the Audit Committee • Director of the Corporate Governance Committee and the Nominating Committee Education • B.A. (HONS) Economics Thammasat University • MBA. for Executive Thammasat University Work Experience Oct 11 - Present • Board of Director Eastern Water Resources Development and Management PLC. 2007 • Executive Vice President SEABC (thailand) Co.Ltd. 1994 - 2006 • Senior Vice Presdent Thai Military Bank PCL. 1991 - 1994 • Vice President & Manager Bank of Asia PCL. 1987 - 1991 • Vice President and Deputy Manager Krung Thai Bank PCL. EW Shareholding -None•

Pol.Gen.Wutthi Phuawade

Age 60

Position • Borad of Directors (Independent Director) • Director of Risk Management Committee Education • BPA.(Police Science) Police Cadet Academy • Master of Political Science Chulalongkorn University Special Courses • NDC 2545 Work Experience Oct 11 - Present • Board of Director Eastern Water Resources Development and Management PLC. 2009 - 2011 • Deputy Commissioner General Royal Thai Police 2006 - 2009 • Assistant Commissioner General Royal Thai Police EW Shareholding -None-

Eastern Water Resources Development and Management PLC. |

Miss Narinee Talomsin

Position • Board of Director • Director of the Executive and Invesment Committee Education • Management Information System Golden Gate University USA Work Experience Oct 11 - Present • Board of Director Eastern Water Resources Development and Management PLC. 2010 - 2011 • Deputy Secretary to the Minister of Education Ministry of Education 2009 - 2010 • Advisor to Deputy Minister of Finance Ministry of Finance EW Shareholding -None-

| Annual Report 2011

Mr.Praphant Asava-aree

Age 45

Age 55

Position Board of Director Education • B.A. (Political Science) Ramkamhaeng University Special Courses • Executive Coaching University of Califormia (Berkeley) ,USA • Orchestrating Wining Program (OWP) IMD International, Lausanne, Switzerland • DCP 101/2008 • ACP 21/2007 Work Experience MAY 08 - Present JAN 07 - JAN 08 • Board of Director Eastern Water Resources Development and Management PLC. APR 07 - Present • President & CEO, Eastern Water Resources Development and Management PLC. MAR 07 - Present • Board of Director Universal Utilities Co.,Ltd APR 09 - Present • Board of Director Thai Listed Companies Association MAY 07 - FEB 12 • Board of Director Seamico Securities Plc. EW Shareholding -None•

Remarks * DCP : RCP : ACP : SFE :

Director Certification Program Role of the Chairman Program Audit Committee Program Successful Formulation & Execution the Strategy NDC : National Defence College OCSC. : Office of the Civi Service Commission BYS (บยส.) : Judicail Training Institue ICMA. : Capital Market Academy IFFT : International Financial Fraud Training Program from International Revenue Service (IRS.) GEORGIA,USA.

Mr.Surapol Pongtadsirikul Age 59

Position

• Advisory to the board

Education • B.A. (Political Science) Thammasat University • Master of Public Administration (M.P.A.) National Institute in Development Administration (NIDA) Special Courses • OCSC 29 • NDC 2547 Work Experience Nov 11 - Present • Advisory to the board Eastern Water Resources Development and Management PLC. 1 Oct10 - Present • Deputy Permanent Secretary for Interior 2009 • Chachoengsao Governor 2008 • Chonburi Governor 2006 • Sakaeo Govenor 2005 • Amnajchareon Govenor EW Shareholding -None-

Mr.Nakorn Jirasavetakul

Age 64

Position

• Advisory to the board

Education • B.E. (Civil Engineering) Chulalongkorn University • Post Graduate Diploma Branch Hydrological • Engineering (Dip.H.Delft) Netherlands Work Experience APR 10 - Present • Advisory to the board Eastern Water Resources Development and Management PLC. MAR 09 - Present • Director Universal Utilities Co., Ltd. FEB 07 - SEP 07 • Deputy Governor (Planning and Technical) JAN 07 - FEB 07 • Deputy Governor (Operation 4) AUG 06 - DEC 06 • Deputy Governor (Operation 4) And acting Governor The Provincial Waterworks Authority EW Shareholding -None-

Eastern Water Resources Development and Management PLC. |

Corporate Executives

10 9

4 2 3

| Annual Report 2011

1. Mr. Praphant 2. Mr. Jaroensuk 3. Mr. Namsak 4. Mrs. Namphon 5. Mrs.Thidarut 6. Mr. Cherdchai

Asava-aree Worapansopak Wannavisute Rassadanukul Kraiprasit Pitiwacharakul

7. Mr. Potjana Bunsiri 8. Mrs. Wirawan Tharanont 9. Duangkaew Ungsrithong 10. Mr. Sombat Yusamart 11. Ms.Kanyanart Viraphandu

Mr. Praphant

Asava-aree

Age 55

Position • President & CEO Education • B.A. (Political Science) Ramkamhaeng University Special Courses • Executive Coaching University of Califormia (Berkeley) ,USA • Orchestrating Winning Program (OWP) IMD International, Lausanne, Switzerland • DCP 101/2008 • ACP 21/2007 Work Experience MAY 08 - Present JAN 07 - JAN 08 • Board of Director Eastern Water Resources Development and Management PLC APR 07 - Present • President & CEO, Eastern Water Resources Development and Management PLC. MAR 07 - Present • Board of Director Universal Utilities Co.,Ltd APR 09 - Present • Board of Director Thai Listed Companies Association MAY 07 - FEB 12 • Board of Director Seamico Securities Plc.

Mr. Jaroensuk Worapansopak Age 48

Mr. Namsak Wannavisute Age 46

Position • Executive Vice President, Operation Education • M.Sc.Hydraulic Engineering, International Institute for Hydraulic and Environmental Engineering (IHE), Delft, the Netherlands. • B.E. in Water Resources , Kasetsart University Special Courses • DCP 146/2011* • Senior Executive Program - SEP 2010 • Executive Development Program (EDP) 3 Work experience Eastern Water Resources Development and Management Plc. Feb 11 – present • Executive Vice President, Operation Mar 10 – Jan 11 • Acting Executive Vice President, Operation Jan 09 – Feb 10 • Vice President , Customer Service Department and Acting Executive Vice President Project Planning and Customer Service Nov 02 - Dec 08 • Vice President, Project Planning Department Aug 08 - May 09

Position • Executive Vice President, Finance and Accounting Education • MS.(Finance) University of Colorado, USA • B.B.A. (Accounting and Finance), Thammasat University. Special Courses • Advance Senior Executive Program ASEP 2010 Work experience Eastern Water Resources Development and Management Plc. Jan 11 – present • Executive Vice President, Finance and Accounting Jan 09 – Dec 10 • Vice President, Finance and Accounting Jun 07 - Dec 08 • Vice President, General Affairs Department and Acting Vice President, Human Resources Department Nov 02 - Jun 07 • Vice President, Business Development Department Nov 01 - Oct 02 • Acting Vice President, Business Development Department Mar 01 - Oct 01 • Manager, Business Development Division

Eastern Water Resources Development and Management PLC. |

Mrs. Namphon Rassadanukul Age 49

Position • Senior Vice President, President & CEO Office and Corporate Secretary Education • M.A. in Public Administration, Glasgow College of Technology, UK • M.A. in Political Science (Politics and Governments), Sukhothai Thammathirat Open University • B.A. in Public Administration, the Faculty of Political Science, Thammasat University • Certificate in Computer Programming and Information Processing, UK Special Courses • Senior Executive Program - SEP 2011 • Director Certification Program DCP 4/2000 • Advanced Certificate, Public Administration and Law for Executives. (1), KPI • Advanced Certificate, Politics and Governance in Democratics systems for Executives. (11), KPI Work experience Eastern Water Resources Development and Management Plc. Jun 07 - Present • Senior Vice President, President and CEO Office and Corporate Secretary Feb 04 - Jun 07 • Senior Vice President, Internal Audit Department and Corporate Secretary Nov 01 - Feb 04 • Vice President Internal Audit Department Mar 01 - Oct 01 • Vice President, President and CEO Office 24

| Annual Report 2011

Mrs.Thidarut Kraiprasit

Age 48

Position • Senior Vice President, Internal Audit Department Education • MBA. Kasetsart University • BBA. (Accounting), Thammasat University Special courses • Audit Committee Program - ACP 26/2009 • Executive Development Program (EDP) 4 • Certificate, Management of Public Economy 5 Work experience Eastern Water Resources Development and Management Plc. Jan 09 – Present • Senior Vice President, Internal Audit Department Jun 07 - Dec 08 • Senior Vice President, Finance and Accounting Department Oct 04 - Jun 07 • Senior Vice President, Finance and Human Resources Department 2001 - Oct 04 • Vice President, Finance and Human Resources Department 1997 – 2001 • Vice President, Finance and Procurement Department

Mr. Cherdchai Pitiwacharakul Age 47

Position • Vice President, Operation and Customer Service Department Education • M.S. (Information Technology), King Mongkut’s Institute of Technology, LatKrabang • B.E. Khon Kaen University Special courses • Executive Development Program (EDP) 3 Work experience Eastern Water Resources Development and Management Plc. Mar 10 – Present • Vice President, Operation and Customer Service Department Jan 09 - Mar 10 • Vice President, Business Development Department Aug 08 - Jan 09 • Acting Managing Director, Universal Utilities Co.,Ltd. Nov 07 - Nov 08 • Vice President, Special Project Department Nov 01- Nov 07 • Vice President, Chachoengsao Operation Center, Acting Vice President, Rayong Operation Center

Mr. Potjana

Bunsiri

Age 51

Mrs. Wirawan

Tharanont

Age 53

Position Position • Vice President, Operation • Vice President, Corporate Affairs Department Department Education Education • MBA. Burapha University • MBA. Sasin Graduate Institute • BS. in Technical Education, of Business Administration of Rajamangala University of Technology Chulalongkorn University Special courses • B.Acc. Chulalongkorn University • Executive Development Program Work experience (EDP) 4 Eastern Water Resources Work experience Development and Management Plc. Eastern Water Resources Jan 09 - Present Development and Management Plc. • Vice President, Corporate Affairs Jan 09 - Present Department • Vice President, Project Planning Jun 07 - Dec 08 Department • Vice President, Internal Audit Nov 07 - Dec 08 Department • Vice President, Operation Department Oct 06 - Jun 07 Nov 03 - Oct. 07 • Vice President, Department of • Vice President, Chachoengsao President and CEO Office Operation Center Oct 05 - Sep 06 Mar 01 - Oct 03 • Managers, Department of President • Manager, Large-scale Construction and CEO Office Project Office 2004 - 2005 1998 - 2001 • Corporate Risk Manager • Senior Engineers

Ms.Duangkaew Ungsrithong Age 50

Position • Vice President, Human Resources Department Education • Ed.D.Human Resources Development , Western Michigan University, USA • M.A. Industrial Psychology, WesternMichigan University, USA • B.A. Industrial Psychology, Thammasat University Work experience Jan 09 - Present • Vice President, Human Resources Department, Eastern Water Resources Development and Management Aug 07 - Mar 08 • Director, Human Resources Division, Challenge Hospitality Co.,Ltd. Feb 06 - Apr 07 • Vice President, Human Resources Division T.C.C. Capital Land Limited May 00 - Dec 05 • Human Resources Manager, HMC Polymers Co.,Ltd.

Eastern Water Resources Development and Management PLC. |

Mr. Sombat

Yusamart

Age 41

Position • Vice President, Finance and Accounting Department Education • MBA., Kasetsart University • BBA. (Accounting), Kasetsart University Special courses • Executive Development Program (EDP) 5 Work experience Eastern Water Resources Development and Management Plc. Feb 11 – present • Vice President, Finance and Accounting Department Oct 09 – Jan 11 • Assistant Vice President, Finance and Accounting Department Apr 09 – Sep 09 • Acting Assistant Vice President, Finance and Accounting Department Apr 09 – Sep 09 • Finance and Accounting Manager (Secondment - UU) Mar 07 – Mar 09 • Accounting Manager, Finance and Accounting Department Apr 05 – Feb 07 • Administrative and Finance Manager, (Secondment - GWS) Nov 03 – Mar 05 • Budget and Finance Manager, Finance and Accounting Department Apr 03 – Oct 03 • Acting Budget and Finance Manager, Finance and Accounting Department Jul 01 – Mar 03 • Senior Accountant 26

| Annual Report 2011

Ms.Kanyanart

Viraphandu Age 43

Position • Vice President, Corporate Communication Department Education • BBA., Assumption University Special courses • Executive Development Program (EDP) 5 Work experience Eastern Water Resources Development and Management Plc. Feb 11 – present • Vice President, Corporate Communication Department Aug 07 – Jan 11 • Assistant Vice President, Corporate Communication Department Oct 06 – July 07 • Public Relations Manager, CEO Office Oct 02 – Sep 06 • Administrative and General Cooperation Manager, (Secondment – EHP) Dec 01 – Sep 02 • Corporate Relations Manager, General Affairs Department Mar 01 – Nov 01 • Corporate Relations Manager, CEO Office Jan 96 – Feb 01 • Public Relations Specialist, General Affairs Department

Eastern Water Resources Development and Management Public Company Limited| 26

Organization Structure

Board of Directors

Eastern Water Resources Development and Management Plc.

Audit Committee

Management and Investment Committee

Corporate Governance and Nomination Committee

Risk Management Committee

Regulation Enforcement and Operating Result Assessment and Renumeration Committee

President & CEO President & CEO office and Corporate Secretary

Audit Department

Executive Vice President , Operations

Project Planning Department

Operation and Customer Services Department

Executive Vice President , Finance and Accounting

Corporate Communications Department

Business Development Department

Human Resources Department

Corporate Affairs Department

Finance and Accounting Department

Information Technology Department

Eastern Water Resources Development and Management PLC. |

Industry and Competition Although the overall economic expansion in 2011 softened from the previous year since the production sector was affected from the disaster in Japan and Thailand flooding crisis, which was severe and expanding to cover Central area of the nation, causing damages to industrial sector and the shrink in exports, consumptions and private investments during the last quarter of the year, the demand of raw water from both industrial and consumer sectors in Eastern area continued to grow.

Currently, the Companyâ&#x20AC;&#x2122;s total water for sale in 2011 was at 261.55 Million Cubic Meters with 6.57% growth, compared to that in 2010. The increase was mainly due to the increase in industrial activities from the petrochemical industry in Rayong area, especially MapTa Phut area such as MapTa Phut Industrial Estate, Eastern

Hemaraj Industrial Estate and Asia Industrial Estate, operating in an commercial aspect and the start up of the receipt of water from two water treatment plants, namely, Bang Lamung water treatment plant at Pattaya and Map Kha water treatment plant at Ban Chang to support the expansion of local consumption.

Picture 1: Accumulated water volume for sale From 2007 - 2011 300 (Water volume for sale (Milion 250 Cubic Meters))

223.91

In the meantime, the severe flood crisis 214.99 200 had impacted on industrial production sector, especially manufactures in 150 Industrial Estate area in Ayudhya and 100 Pathumthani provinces, which are 50 automobile, electronic and electrical 0 appliance production sources, leading 2007 2008 foreign companies in Thailand, including Japanese companies, which were considering to move their production base as a result of Tsunami Table 1 Accumulated water volume for incident, to be more interested in the sale from 2010 - 2011 (quarterly) Eastern area of the nation, i.e. Chonburi Year 2010 and Rayong. Q1 60,925,627 As for raw water competition, the overall competition was considered not high. There were few enterprisers and many obstructions for accessing into the market by new investors because the construction of pipelines for raw water needed high investment and approvals by the government sectors as water resources are limited.

| Annual Report 2011

Q2 Q3 Q4 Total

64,651,397 58,952,482 60,906,048 245,435,534

220.71

2009

245.44

2010

Year 2011 65,718,626 65,721,514 63,555,630 66,558,676 261,554,446

261.55

2011

Consumers of the Company can be • Governmental Industrial Estate divided into 4 groups and each group group Namely, MapTa Phut Industrial Estate had water usage ratio as follows: and Leam Chabang Industrial Estate of Industrial Estate Authority of • Consumer group Namely, Provincial Waterworks Thailand, consuming raw water at Authority, including private tap water 32.78% businesses, governmental sectors as well as communities in need of clean • Private Industrial Estate and water, consuming raw water at Industrial Parks group Such as Hemaraj Industrial Estate, RIL 31.65%. 35

1996 Industrial Estate and Asia Industrial Estate, consuming raw water at 28.46%. • Factories group and other business, consuming raw water at 7.11%

32.78% 31.65% 28.46%

30 25 20

Governmental Industrial Estate group Private Industrial Estate and Industrial Parks group Factories group and other business Consumer group

15 7.11%

10 5 0

Governmental Industrial Estate group

Private Industrial Estate and Industrial Parks group

Factories group and other business

Consumer group

Eastern Water Resources Development and Management PLC. |

Nature of business and subsidiary shareholding ratio

Core Business

Raw water Business Eastern Water Resources Development and Management Plc.

Related business Tap Water Business Egcom Tara Co.,Ltd. 15.88%

Universal Utilities 100%

Sattahip Waterworks kholan Waterworks Si Chang Waterworks Bowin Waterworks Samui Waterworks Rayong Waterworks

Nakornsawan Water Suppy Co.,Ltd 100%

Bangpakong Water Suppy Co.,Ltd 100%

Chachoengsao Water Suppy Co.,Ltd 100%

Core Business Eastern Water Resources Development and Management Plc. or East Water was founded on October 15, 1992 and has been taking responsible for the development and management of main water pipeline systems in the Eastern Seaboard by supplying raw water to industrial estates, factories

| Annual Report 2011

and water works via four main raw water pipeline systems in Chonburi, Rayong and Chachoengsao Province, with the length of about 340 km water pipelines and pumping capacity of 473 million cubic Meters per year.

The four pipelines are shown as follows : 1) Nong Plalai - Dokkrai - Map Ta Phut -Sattahip pipeline 2) Nong Kho - Laem Chabang Pattaya - Bang Phra Pipeline 3) Nong Plalai - Nong Kho Pipeline 4) pipeline system in Chachoengsao

Core Development of Raw Water Business

November 2010 The Company was granted approval to be additionally allocated of water from Dok-krai reservoir, from 96.2 Million Cubic Meters per year to 126 Million Cubic Meters per year since as the water inflow volume in the past was found to be more than the capacity of the reservoir, the Royal Irrigation Department considered to increase the allocation.

Related Business Tap Water Business

Universal Utilities Ltd. (UU) is an operator of tap water business under the concessions granted by governmental sectors such as Provincial Waterworks Authority and Local Administrations. The management can be divided into tap water management, including Sattaheab, Bangpakong, Chacoengsao, Nakon Sawan, Rayong, Chonburi and Bo Win; November 2011 • Management on tap water The Company was granted approval production system from sea water, to be additionally allocated of water including Sichang Island, Samui from Nong Pla Lai reservoir, from 66 Island and Lan Island. Million Cubic Meters per year to 120 Million Cubic Meters per year. • Management on production system and area maintenance, including Ratchaburi - Samut Songkram area; Wastewater management, including Pathumthani - Rangsit area.

March 2011 UU started to officially operate its activities on 4 January 2011 to produce and sell tap water to Nong Kham District Administrative Organization at Sri Racha District, Chonburi under tap water concession for an operating duration of 25 years.

Management

August 2011 The Company received an evaluation rated “Very Good” from the Annual General Meeting Quality Evaluation 2010 from Thai Investors Association. December 2011 The Company received an evaluation rated “Excellent” from the Annual General Meeting Quality Evaluation 2011 from Thai Institute of Directors (IOD).

Eastern Water Resources Development and Management PLC. |

Risk Factors

Eastern Water Resources Development and Management Pcl. has realized the risk factors which may arise and affect the Company’s business operation. The Company then considered and determined the guideline to manage possible risks. Previously, the Company analyzed on the important risk factors which may affect the management of water resources and performed the review and adjustment of organizational structure and risk management procedure in various aspects, continuously in order to enhance risk management system to be equivalent to international standards and to be ready for the risk management under COSO guideline. Risk Management Committee plays an important role in determining policies, reviewing the sufficiency of policies and supervising important corporate risks. The aim of the risk management is to manage various risks to be under the determined 32

| Annual Report 2011

scope, to operate the business with appropriate returns and to monitor the work performance in accordance with risk management plans, including consideration toward risk management operating results quarterly to continuously control the risks. In 2011, there were significant implication on risks, as summarized below:

1. Risk from demand - supply management

The Company was affected from the risk from demand – supply management due to 2 main risk factors as follows: 1.1 Sensibility of demand forecast which is difficult to be predicted arising out of global economic fluctuation, especially European debt and domestic flood crisis which has caused the reduction of production capacity and consumers’ water usage volume. In this regard, the Company has enforced a measure to handle with such crisis by closely focusing on

CRM activities and improving the efficiency of water distribution system to support consumers’ needs in various forms at prompt 1.2 Climate fluctuation and drought Uncertainty and difficulty on forecasting of rainy season and drought have significantly affected the customers’ water usage, especially those who own raw water resources. The Company developed measures on contract management, clear determination of minimum guarantee for customers and regular meeting with customers to inquire about their production plans or upcoming projects which enable the Company to participate in planning and reviewing of usage volume with the customers quarterly.

2. Risk from adjustment of raw water cost The Company’s raw water cost was affected by 3 main risk factors as follows:

2.1 Adjustment of the Provincial Electricity Authority’s Ft which is the main factor driving the increase of sale operating cost. In this regard, the Company has put in place the energy saving plan and implemented the plan consistently. In addition, the Company has prepared the water pumping plan monthly to monitor its work performance closely. 2.2 Turning water to reserve as raw water for drought period To get ready for the drought period during February – May of each year, the Company needs to turn water from the water resources far away from usual ones for storage. Such water turning directly affects electricity cost. In this regard, the Company had put in place annual drought surveillance and prevention plan to reduce the risk from climate fluctuation and launched War Room activity to closely discuss with customers and report water situation. 2.3 Raw water quality and pollution around water resources With environment and pollution in Eastern area, water quality in the water resources may be affected. The effect

also increases due to the dense communities living around main reservoirs, soil pollution and air pollution from industries. As the result, from the beginning of the Company’s business until 2011, the Company has cooperated with communities in monitoring and protecting the environment around the upstream of raw water resources.

the emergency has a capacity of 116,300 cubic meters which provides the reserved water of approximately 6.30 hours. However, the Company has an operational plan for any emergency to provide continuous water distribution. Moreover, the Company has a plan to increase its reserved water volume with the construction of an additional reserved pond with the capacity of 220,000 3. Risk from business operation cubic meters in Map Kha area which Risk from internal operation was will provide the reserved water of 24 affected by 2 main risk factors as hours, as many emergency arises. follows: 3.2 Risk from damages to water 3.1 Risk from electrical disruption pipeline system There were possible The Company operates to distribute problems of corrosion or other water to customers 24 hours a day. constructions of infrastructure along Reserved water resource is then a the pipeline area which might affect necessary thing in an emergency the Company’s water pipeline system period such as when light goes off or to break or leak. However, the a repair or pipeline joint is needed. Company had set up preventive Due to the existence of the Company’s maintenance plan and continuous agreement with the Provincial examination and maintenance of Electricity Authority concerning the water pipeline system as planned. In halt of electricity distribution, the addition, the Company had risk water reserve from the reserved ponds insurance with the insurance company is necessary to continuously distribute which would be responsible for any raw water to its customers when there damages with the pipeline system is an emergency. At present, the caused by any incidents, covering Company’s water resources reserves for every pipeline as well as the

Eastern Water Resources Development and Management PLC. |

Company’s asset insurance and third party insurance, including damages from the operation halt, to help the Company to continuously distribute water with efficiency.

4. Risk from conflicts with community

The usage of water resources may affect the Company’s image. The Company had allocated budget for quality of life and environmental development by creating relationship with the communities in the areas as well as providing accurate understanding and consistently providing local communities’ development project encouragement to reduce conflicts and increase good attitude toward the Company. The activities consisted of canal digging, drinking water mobile service, young leader camp for conservation of water resources and environment with scholarship, mangrove forestation for environmental conservation, as well as supporting activities for quality of life and environmental development for communities such as temples, schools, government agencies, and public charities.

| Annual Report 2011

5. Risk from policy of the government cause damages but other surrounded and related government agencies factors which identify the likelihoods

The instability of the policy of the of the risks of the Company under government agencies relating to the various circumstances which may Company’s operation may affect the change from time to time. Company such as the delay of certificate issuance from related government agencies, clarity of water pipeline leasing fee of Nong Pla Lai – Nong Kho. However, the Company still received good cooperation from the related government agencies. Moreover, the establishment and business operation of the Company followed the cabinet’s resolution to promote the industrial investment and tourism in the area of the Southern Seaboard. In addition to the main corporate risks supervised by Risk Management Committee, the Company has provided a risk management handbook and risk operational plan to its work divisions for their adherence in keeping the risks to be at an acceptable level. The risks are reviewed quarterly by taking into account all events which may arise, not only the risks that are capable to

Management Discussion and Analysis Management Discussion and Overall operating result and increasing by 140.96 million baht or Analysis of the Operating Result analysis on consolidated financial an increase of 16.26% YoY. The overall result was at a good level. The details for the Year 2011 statement (** To effect clear and normal comparative operating results, this analysis on the operating result for the year 2011 excluded the extra-ordinary items of the Prasae project in 2010, because such items caused the significant increase in revenue and profit.)

1. 2. 3. 4. 5. 6. 7. 8. 9.

For the consolidated EASTW’s performance in the year 2011, the Company and its subsidiaries had total revenue of 3,310.04 million baht, increasing by 202.53 million baht or an increase of 6.52% YoY. Net profit was reported 1,008.02 million baht,

Raw Water Sales Volume (Million Cubic Meters-MCM) Tap Water Sales Volume (Million Cubic Meters-MCM) Revenue from Raw Water Revenue from Tap Water Revenue from Rental & Services and Other** Total Revenue** Total COGS and Expense** Profit(Loss) Before Interest and Tax** Net Profit(Loss)**

of the performance are as follow:

1. Analysis on consolidated financial statements

Comparative table of the Company and its subsidiaries’ operating results for the year 2011 and 2010

2011

2010**

261.55 62.67 2,261.02 765.85 283.17 3,310.04 1,798.84 1,511.19 1,008.02

244.88 58.91 2,117.50 716.23 273.77 3,107.51 1,786.85 1,230.85 867.06

(Unit: million Bath) Increased(Decreased) Million Baht % 16.67 6.81 3.76 6.38 143.52 6.78 49.62 6.93 9.40 3.43 202.53 6.52 11.99 0.67 280.34 22.77 140.96 16.26

** The report of the year 2010 excluded the extra-ordinary items of Prasae project, including revenue from sale of the project’s assets of 1,567.29 million baht, cost of the project’s sale of assets of 1,507.46 million baht, EBIT of 59.83 million baht, and net profit of 41.88 million baht (after 30% tax deduction).

1.1 Comprehensive income statement industrial activities from the petrochemical industry in Rayong 1.1.1 Revenue In 2011, raw water area. Tap water sales volume was sale volume achieved 261.51 million 62.67 MCM, up 3.76 MCM or 6.38% cubic meters (MCM), increasing by YoY with an increasing sale proportion 16.67 MCM or an increase of 6.81% in Chonburi area, starting in April YoY mainly from customers in Nong 2010. Therefore, revenues from raw Pla Lai - MapTa Phut area, who water and tap water increased consumed the largest portion of 86.17 accordingly. Revenues from rental MCM, increasing by 13.96 MCM or and services included rental and 16.20% YoY due to the increase in services revenue from East Water

building with 100% occupancy rate currently and the rental rate would gradually increase for the due contracts. However, the service income from subsidiaries reduced from the expiration of water management contracts and some projects were postponed to 2012 as a result of Thailand flooding in late 2011.

Eastern Water Resources Development and Management PLC. |

1.1.2 Cost of Sales 1. 2. 3. 4. 5. 6. 7. 8. 9.

Total Revenue** Cost of Goods Sold** Gross Profit** Selling and Administrative Expenses** EBIT** Finance Cost EBT** Income Tax** Net Profit**

2011 3,310.04 1,397.22 1,912.81 401.62 1,511.19 78.48 1,432.72 424.69 1,008.02

% 100 42 58 12 46 2 44 13 31

2010** 3,107.51 1,422.30 1,685.21 364.55 1,320.66 89.81 1,230.85 363.79 867.06

(Unit: million Bath) % 100 46 54 12 43 3 40 12 28

** The report for the year 2010 excluded the extra-ordinary items of Prasae project, including revenue from sale of the project’s assets of 1,567.29 million baht, cost of the project’s sale of assets of 1,507.46 million baht, EBIT of 59.83 million baht, and net profit of 41.88 million baht (after 30% tax deduction).

The table above shows the structure of cost of sales as a percentage of total revenues in 2011 compared to those of the year 2010. Cost of Goods Sold to total revenue decreased from 46% in 2010 to 42% in 2011. The main reasons are as follows:

useful lives of assets related to water pumping machines, in accordance with new accounting standards. The extension of useful lives based on actual functions resulted in that a depreciation expense decreased by 48.3 million baht.

1) Electrical expenses (representing 36 % of the total cost) reduced from more-than-expected water supply in the reservoir. This can reduce the electrical power required to pump water from the Bangplakong River to Bang-pra reservoir.

1.1.3 SG&A Expenses In 2011, the Company and its subsidiaries’ SG&A to total revenue was around 12%. During the year, the Company had spent approximately 17.45 million baht for a feasibility study on new business, waste water and environment business and the corporate public relation expense on the event “109th anniversary of the Royal Irrigation Department” was around 10 million baht. The Company has focused on the Corporate Social Responsibility-CSR and held the budget for these activities, including Community Development, Water and Environment, Youth and Sports

2) Raw water cost (representing 19% of the total cost) decreased from lower water supply from private company in Chonburi area due to more-than-expected water supply in the reservoirs. 3) Depreciation (representing 28% of total cost) reduced from the extended 36

| Annual Report 2011

activities, and Religion and Culture approximately 1 % of total revenue. The activities for the year 2011 are as follows: • Exhibitions celebrating “The 84th Birthday anniversary of His Majesty the King, a philosopher of water” project • The drinking water mobile car serving the water for public of approximately 97,770 liters • Developing 89 wastewater treatments for small schools in the serviced area • Supporting The Royal Rain Making Project, for the Bureau of Royal Rainmaking and Agricultural Aviation • The “Student in Free Enterprise (SIFE)” • “East Water Young Leader Program” to encourage young people to promote conserving water, with the 1,200 students and 320 schools participating in this program

• Innovative water management projects, the 3R (Reduce Reuse Recycle) for students to win awards from the Minister of Natural Resources and Environment • For the flood recue project, the Company supported fund through government agencies and Stock Exchange of Thailand to help flood victims together with 3 mobile drinking water cars in the flood area

and support the submergible pumps to the Royal Irrigation, by removing them from Bangplakong pumping station to divert flood water in Klong Khuen pumping station to the sea.

cost included interest expenses from three financial institutions that the Company had outstanding in an amount of 2,946.02 million baht comprising long term loan 2,325.02 million baht and current portion of 1.1.4 Finance costs long term loan 621.00 million baht In 2011, the Company reported 78.48 with average interest expenses of million baht finance costs, decreasing 4.04%. by 11.33 million baht or down 12.62% compared to the previous year. The

1.2 Statements of Financial Positions 2011 (million Bath) 2010(million Bath) 1. 2. 3. 4.

Net Cash from Operating Activities** Total Asset Total Liabilities Total Equity

1,252.77 10,784.47 3,848.27 6,936.20

1,431.65 9,884.57 3,296.96 6,616.92

(Unit: million Bath) Increased(Decreased) million Bath % (178.88) (12.50) 899.90 9.10 580.28 17.83 319.28 4.82

** In 2010, excluding the extra-ordinary cash received from the sale of assets of Prasae project in an amount of 646.49 million baht.

1.2.1 As of 31 December 2011, the Company and its subsidiaries’ total assets were 10,784.47 million baht, increasing by 899.90 million baht or up by 9.10% YoY, primarily from the delivery of the construction in progress of the Nong Pla Lai - Map Ta Phut, the third pipeline totaling 739.68 million baht, which the progress is more than 89.73% as of 31 December 2011. In addition, the Company had invested in the projects for improving capacity and reducing costs including Dok-krai electric distributing and water pumping station in Rayong area of 74 million baht, the exploration and construction of Map-ka pipeline in Rayong area of 101.74 million baht as

well as SCADA system development of 18.93 million baht. Moreover, the Company has invested 44.24 million baht for ERP system to enhance Company’s information technology. For these reasons, the total land, building and equipment increased by 1,119.49 million, net off depreciation 284.57 million baht; therefore, rose 834.89 million baht. Non-current assets in 2011 were recorded 178.94 million baht, up by 149.69 million baht from the advance payment for construction of Bang-pra pumping station in an amount of 143.62 million baht which would increase capacity to the Chacoengsao area which is currently supplied water by Rayong

area with higher cost. The project would be started in 2012 and completed in late 2013. 1.2.2 As for total liabilities as of 31 December 2011, overall, the company has better procured sources of fund fit for its use and finance cost. Its longterm loans from financial institutions were recorded at 2,325.02 million baht, increasing 692.62 million baht or 42.43%. The Company used longterm loan to finance the construction of Nong Pla Lai - Map Ta Phut, the third pipeline. In 2011, the Company and its subsidiaries had drawn down a long-term loan of 1,488 million baht, net off loan repayment, both

Eastern Water Resources Development and Management PLC. |

short and long terms of 795.38 million baht and the remaining drawdown available was at 1,449 million baht as at the end of the year. 1.2.3 As of 31 December 2011, the Company reported total equity 6,936.20 million baht, including shareholder’s equity of 6,933.08 million baht and Minority Interest amount of 3.12 million baht, increasing by 348.59 million baht or 5.29% resulted from net off between net profit for the year 2011 amounting to 1,008.02 million baht and dividend payment of total 615.42 million baht and asset amortization due to assets transferred from customers of 3.40 million baht. In 2011, the Company paid the dividend 2 times as following: 1) For the year 2010, 0.25 baht per share on 12 April 2010 and 2) Interim dividend for 6-month performance, ending 30 June 2011, amounting to 0.12 baht per share on 20 September 2011.

2. Analysis of consolidated cash flow statement

For the year 2011, the Company and its subsidiaries had cash and cash equivalents of beginning balance of 442.88 million baht. During the period, net cash decreased by 314.19 million baht consisting of the following: • Net cash inflow from operating activities of 1,252.77 million baht, mainly from:

| Annual Report 2011

- Improved performance of the of water pipelines, Nong Pla Lai Company’s earnings before tax in Map Ta Phut, the third pipeline. 2011 which amounted to 1,432.72 million baht, adjusted with non-cash - Investment in tap water assets items including depreciation and such as concession rights and the amortization expenses amounting purchase of assets under concession to 320.65 million baht net off dividend contracts of tap water business in income, interest income, interest an amount of 86.82 million baht. expenses, and amortization of deferred interest under finance lease agreement - Deposit in fixed accounts with of 35.37 million baht. Allowance financial institutions for short-term for loss from decline in value and management of 95.00 million baht other receivables changed were cash with interest rate at 2.30% to mainly derived from the delivery of 4.00% per annum. the construction of Nong Pla Lai Map Ta Phut, the third pipeline. • Net cash used in financing activities of 309.09 million baht derived from - Change in assets and liabilities the two main items as follows: from operating activities which caused the increase of net cash of 227.42 - Net cash inflow of 1,521.00 million million baht, as a result of the change baht from both short and long-term in other non-current assets which loans, net off with loans repayment, increased by 143.62 million baht due both short and long terms, of to advance payment for Bang-pra 1,100.38 million baht, together pumping station construction. with interest payment of 76.80 million baht. - The Company had cash for payment of accumulated income tax until - Dividend payment of 615.43 the end of 2011 as high as 363.51 million baht whereby the Company million baht. made dividend payment 2 times per the detail in clause 1.2.3. • Net cash used in investing activities were 1,257.87 million. The main reasons are as follows: - The CAPEX in fixed assets valued 1,058.00 million baht which was mainly invested in the construction

3. Key Financial Ratios 1. 2. 3. 4. 5. 6. 7. 8.

Raw water - gross profit margin (%) Tap water - gross profit margin (%) Total gross profit margin to total revenue (%) Net profit margin to total revenue (%) Return on equity (ROE) (%) Return on assets (ROA) (%) Debt to equity ratio (x) DSCR (x)

2011 65.91% 43.40% 57.79% 30.45% 14.88% 9.76% 0.55 1.94

Profitability Ratio of Group of was that new contract in Chonburi Company area, starting in April 2010, had higher cost of sale. However, it has Gross profit margin of Raw Water not affected to tap water’s gross Gross profit margin was at 65.91%, profit in overall. increasing by 4.2% YoY due to lower cost of sale as a result of the Return on equity (ROE) and Return decrease in depreciation cost from on Assets (ROA) the extended useful lives of water The ROE and ROA were at 14.88% pumping machines, in accordance and 9.76%, respectively, whereby with new accounting standards and ROE increased by 1.17% YoY. This is the better management on cost of because the Company had net profit raw water pumping. for the year 2011 in an amount of 1,008.02 million baht and net off with Gross profit margin of Tap Water dividend payment of 615.56 million Gross profit margin was at 43.40%, baht. ROA increased by 0.14% from down by 0.12% YoY. The main reason the previous year.

2010 61.69% 43.51% 54.23% 27.90% 13.70% 9.62% 0.49 2.26

increased(Decreased) 4.22% -0.12% 3.56% 2.55% 1.17% 0.14% 0.06 -0.32

Debt-to-equity ratio (D/E Ratio) and Debt Service Coverage Ratio (DSCR) D/E ratio and DSCR was at 0.55x and 1.94x respectively, whereby D/E increased by 0.06x from the previous year and DSCR decreased by 0.32x, as the Company’s long term loan increased and the effect from the adoption of the new accounting standards causing the increase in non-current liabilities and the decrease in depreciation cost. The Company’s D/E ratio and DSCR are maintained in line with those of the loan covenants, i.e. 2.0x D/E ratio and 1.1x DSCR.

Eastern Water Resources Development and Management PLC. |

Good Corporate Governance The Company’s Board of Directors always values the operations under the Good Corporate Governance principles and focuses on the utmost benefits of the shareholders by taking into consideration of all stakeholders as well as places an emphasis upon responsibility toward society, community, and the environment. Last year, the Company focused on applying the Corporate Governance Report of Thai Listed Companies 2006 of the Stock Exchange of Thailand’s principles and guidelines on business operation and to enhance the Good Corporate Governance principles of the Company’s group by practicing the most out of them. Also, the Company had organized activities to promote the Good Corporate Governance principles among the Company’s group, which led to the

| Annual Report 2011

Company’s personnel from every level receive business ethics documents on to work with “transparency, honesty, the orientation day for future practice. responsibility, and competitiveness.” Likewise, the Company’s Directors had to sign as an acknowledgement Corporate Governance Policy to receive the Board of Directors’ The Company’s Board of Directors manual on the orientation day of the has stipulated the Company’s Vision, new Director. Mission, and the written Good Corporate Governance Policy since Rights of Shareholders August 1, 2003. The Corporate The Company has realized the rights Governance Committee is assigned of all shareholders by focusing on to propose to the Company’s Board basic rights of the shareholders as of Directors to consider and revise the stipulated by laws and Articles of policy for the purpose of continuous Association, and by treating the development and keeping updated shareholders with equality such with the present situation. as the stipulation of policy and guidelines of the Good Corporate To create awareness of business ethics Governance, on time disclosure with practice, one of the subjects in the principles accuracy and transparency, etc. to of the Good Corporate Governance, create the Company’s operating the new staff of the Company’s group growth with value and sustainability. signed as an acknowledgment to

The Rights of Stakeholders

and joint investors under the Good The Company’s philosophy focuses on Corporate Governance. responsibility and equality treatment with credibility toward all stakeholders 5. The Company is responsible to society and environment by operating as follows: the social responsibility business, 1. The Company is responsible to its respecting and conforming to related shareholders by providing appropriate laws and regulations in order to prevent and fair return of investment to the against any impact which may cause the shareholders as well as maintaining loss to life or properties of an individual, stable financial situation which community, and the environment. benefits to the existence and growth Complaint Notification of the Company. Channels are established for notification 2. The Company is responsible to of clue or complaint on any act against customers by providing quality water law or morality, inaccurate financial resources and products management reports, or defective internal control and development and other services system. The more efficient protection to create the utmost satisfaction to mechanism for the informant who cooperates with the Company in customers. taking care of the Company’s benefit 3. The Company is responsible to its is also established. All complaints can employees by treating them with respect be submitted to the Audit Committee to their lawful rights and providing safe through the following channels: workplace environment, good benefit, Email: The Audit Committee and fair employment condition truly AC_EW@eastwater.com reflecting the market situation, including Postal Service : The Audit Committee, promoting the value of human resources at Eastern Water Resources Development and Management Public Company their full potential. Limited 4. The Company is responsible to business Eastwater Building, Floor 25, partners by building the relationship 1 Vipavadeerangsit Soi 5, that creates the greatest mutual Vipavadeerangsit Road, benefit to contractors, suppliers, Jomphol, Jatujak, Bangkok 10900

The policy is disclosed in the Annual Report (56-2) and the complaints shall be notified via the channels on the Company’s website: www.eastwater.com

The Shareholders’ meeting

Prior to the meeting date - The meeting date and the agenda items of 2010 Annual General Shareholders’ Meeting were informed to the shareholders at least 30 days prior to the meeting date via the information system of the Stock Exchange of Thailand and the Company’s website. - Invitation to the meeting and details on meeting agenda, comprising objectives, reasons, opinions of the Board of Directors, and a proxy both in Thai and in English were sent to the shareholders. Also, the document dissemination was informed to the shareholders at least 14 days prior to the meeting date and publicly announced in the newspapers for 3 consecutive days at least 3 days prior to the meeting date. In addition, the Company had posted the information of the shareholders’ meeting invitation and meeting documents on the Company’s website 14 days in advance before the meeting date. - In the case that the shareholders cannot attend the meeting by

Eastern Water Resources Development and Management PLC. |

themselves, they can exercise their voting rights by using the proxy form A or B or C stipulated by the Department of Business Development of the Ministry of Commerce. Also, two independent directors were proposed for being proxies of the shareholders to attend the meeting and exercise their vote. - The minority shareholders are provided an opportunity to propose the AGM’s agenda items and candidates to be appointed in the position of the Directors through the Company’s website in advance. In 2010, the Company provided an opportunity to the minority shareholders to nominate the candidates from October 1 - December 31, 2010 and it had been informed in advance from September 30, 2010 via the information system of the Stock Exchange of Thailand and the Company’s website. Meeting Date - The 2010 Annual General Shareholders’ Meeting was held at 13.30 hours on Thursday, March 24, 2011 at Jupiter, 3rd floor, Miracle Grand Convention Hotel, Vibhavadi-rangsit Road, Laksi, Don Muang, Bangkok. The Company had utilized the E-Voting program with barcode system for vote counting

| Annual Report 2011

provided by Thailand Securities the shareholders to vote each candidate Depository Co. Ltd. which facilitated as an individual in voting card. the registration and vote counting for the shareholders at the meeting. - Chairman of the meeting informed the voting results in each meeting agenda - There were 8 Directors of the Company for the meeting’s acknowledgement (72.72% of the total Directors) attending prior to the end of the meeting. the meeting of whom included Chairman Chairman of the meeting proceeded of the Board, Chairman of Management the meeting in accordance with the and Investment Committee, Chairman Company’s Articles of Association by of Audit Committee, Chairman of performing the meeting following the Nominating Committee and Chairman of agenda items stipulated in the meeting Remuneration Committee. invitation, unless the meeting had a resolution to change the order of the - Senior executives of the Company’s agenda items with the vote of not less group, auditors and legal consultants than 2/3 of the shareholders attending attended the meeting to answer questions the meeting. After the meeting had and acknowledge the shareholders’ completely considered every agenda, opinions. Chairman informed the shareholders that the shareholders with the total of - Before the meeting started, Chairman of not less than 1/3 of the total shares the meeting informed the voting method sold might ask the meeting to consider and vote counting at each agenda. other matters. However, in 2010, Also, prior to the voting of every agenda, there was no change of the order of Chairman of the meeting provided an the meeting’s agenda items as indicated opportunity for all shareholders to in the meeting invitation and there equally examine the Company’s operation was no additional agenda proposed. with inquiries, opinions, and suggestions under the informed appropriate time. After the meeting The voting was performed after the - The Company prepared the minute Directors and Executives clearly provided of the Annual General Shareholders’ answers to every question. However, Meeting and submitted to the Stock the agenda of the election of Directors, Exchange of Thailand and the Office of Chairman of the meeting informed the Securities and Exchange Commission

within 14 days from the meeting date. All information is included in the minute as well as the clear meeting’s resolution with voting results of agreement, disagreement, and abstention. - The Company disclosed the minute of the Annual General Shareholders’ Meeting to the shareholders through the information system of the Stock Exchange of Thailand and the Company’s website within 14 days. - The Thai Investors Association had organized the Annual General Meeting Quality Evaluation 2010 of which the Company was rated “Excellent”.

Leadership and Vision

The Company’s Board of Directors plays an important role in defining of vision, policy, and strategy of the Company by setting a long-term Corporate Plan every three years and assigning the management team to study and analyze 10-year Corporate Plan since related factors such as geography, economics and technology have rapidly changed. Each year, the Company’s management team proposes strategies and activities to the Management and Investment Committee and the Board of Directors of the Company, respectively, for further consideration, comments, and approval of the operating plan and annual budget. Apart from this, the management team reports the progress of the annual operating plan and important problems to the Audit Committee’s meeting and to the Board of Directors for further acknowledgement. In addition, the management team proposes to the

Board of Directors to consider approving - All level of personnel is obliged to important investment project procurement avoid any conflict of interest which may worth more than Baht 200 million. adversely affect the group of companies’ benefit or which may create conflict at The Company’s Board of Directors has work. closely followed the performance of the management team by requesting - All staff has a duty to disclose any matter, for the report of the targeted which may lead to a conflict of interest, operating results in comparison with to the supervisor. The details of the matter the operating results of the Company. shall be attached for further consulting This is one of the Board of Directors’ with the President & CEO. meeting agenda items RE: the report of quarterly financial status of the Company. - The power in the position of the In addition, the Board of Directors Directors of the Company or the has realized the compliance of laws Company’s subsidiaries shall not be and regulations by requesting the used to directly or indirectly seek management team to report any for benefit of individual or intimate change of laws and regulations persons or close relatives. prescribed by the Office of the Securities and Exchange Commission and the The Board of Directors and Executives Stock Exchange of Thailand are obliged to the following duty of report: Conflict of Interest - The conflict of interest of individual The Company’s Board of Directors has and related persons shall be reported established the policy concerning conflict to the Company for acknowledgement of interest in the Good Corporate Governance and the Corporate Secretary shall submit principles and the manual of the Board the copy of the report to Chairman of of Directors as follows: the Board and Chairman of the Audit Committee for acknowledgement. - In the case when the Board of Directors assigns the Company’s personnel to - The shareholding of the Board perform duty on behalf of the Board of of Directors and Executives as Directors, the assignment must be in well as related persons shall be written form or reported as the Board reported which is stipulated to be an of Directors’ resolution in the minute agenda item of every meeting of of the Board of Directors’ meeting, the Board of Directors. and the scope of the authorization is clearly stated. The authorization shall In the case that the Company enters exclude the approval of the authorized into a connected transaction, it shall person to perform any duty which the strictly follow the practice guidelines authorized person may have conflict of the Notification of the Office of of interest or have interest therein. the SEC and the SET. At the meeting of the Board of Directors, the management Eastern Water Resources Development and Management PLC. |

related party transaction between the Company and its affiliates, including the Company and all stakeholders will go through clear and accurate approval procedures by following pricing structure and trading condition as applied to other trading partners As for contractors and trading partners, of the Company. The related party the Company has prescribed that the transaction will be disclosed in the report of the conflict of interest with Annual Report and the 56-1 Form. connected person shall be prepared in accordance with the Office of the Business Ethics SEC’ s regulations. The report serves To express the business operating as important information for the determination under the Good Corporate management team to approve any Governance principles, the Board of transaction which may have conflict Directors has stipulated the notification of of interest with carefulness. Any “the Good Corporate Governance of shall inform the meeting about the transaction and the Directors having an interest concerning the matter shall be abstained from voting and shall leave the meeting of the Board of Directors.

the Company’s Group”, “the Board of Directors Manual”, and the Code of Business Ethics which were effectively announced on August 17, 2006. All of which have been constantly improved to be updated and appropriate with any changing principles in order to be standards for practicing following the Good Corporate Governance principles. All of Company’s Directors are to sign in acceptance of the Manual. For the staff of the Company’s group, the Company has continuously organized several projects to promote knowledge and understanding of the Good Governance.

The Company’s Summary Information as of the fiscal year 2011 Power check and balance of Non-Executive Directors 11 members of the Board of Directors, as ended December 31, 2011 consisted of Executive Director people Non-Executive Directors

people

Independent Directors

people

Centralization and Decentralization and no conflict of interest of finance dividend payment, and operating results of of Power and management of the Company and the Company’s Directors. However, the The Board of Directors places an importance upon transparency of business operation, decentralization of decision making, clear separation power of screening and consideration of approval. Chairman of the Board shall not be the same person as President & CEO. The members of the Audit Committee shall be Independent Directors with no authority to sign approval legal binding to the Company

| Annual Report 2011

its affiliated companies.

Remunerations of Directors and Executives Remunerations of the Board of Directors

and Executives are in accordance with the principles and policies which were stipulated by the Board of Directors. The Remuneration Committee shall consider the remunerations following the period in the position based on the net profit,

monthly remuneration shall be reduced in accordance with the economic situation which shall be annually reconsidered. The appropriate remuneration shall be proposed to the Board of Directors and shareholders (in the part of the Board of Directors). In the fiscal year 2011, the Company’s remunerations paid to the Board of Directors and Executives as follows:

Chairman 3 1 Former Chairman 9 Former Director1 9 1 Former Director 9 1 Former Director 9 1 Former Director 9 1 Former Director 9 1 Former Director 10 Former Director1 1 1 Former Director 3 Director 12 Director 9 Director 11 Director - Director 3 Director 3 Director 3 Director 3 Director 3 Director 12

37,500 112,500 80,000 80,000 80,000 80,000 80,000 90,000 - 30,000 120,000 90,000 100,000 - 30,000 30,000 20,000 20,000 20,000 120,000

140,000 170,000 200,000 200,000 240,000 40,000 10,000 50,000 100,000 40,000 40,000 - 50,000 60,000 60,000 10,000 30,000 160,000

112,500 337,500 270,000 270,000 270,000 270,000 270,000 300,000 30,000 90,000 360,000 270,000 330,000 - 90,000 90,000 90,000 90,000 90,000 360,000

Bonus year 2010 After Tax Holding

Soontharamut Tamwatin Bhinsaeng Poompanmoung Juntaravong Tadthiemrom Sinthunava Chamnarnwong Charernsri Pongpaew Pranootnorapal Rattana-ubon Sriworasat Udamratanasil Choomrat Pranootnaraparn Arkaraprasertkul Phuawade Talomsin Asava-aree

Unit: Baht

Period in position in 2011 (Jan-Dec 2011)(For Bonus Consideration)

1. Mr.Charnchai 2. Mr.Utid 3. Mr.Kanoksakdi 4. Pol.Gen.Somyot 5. Mr.Boonmee 6. Mr.Niskorn 7. Pol.Maj.Gen. Pimol 8. Mr.Wiset 9. Mrs.Leena 10. Mr.Rasda2 11. Mrs. Monta 12. Mr.Permsak2 13. Mr. Rungson 14. Mr.Vichian3 15. Mr.Somchai 16. Mr.Poonsak 17. Mrs.Arunee 18. Pol.Gen.Wutthi 19. Miss Narinee 20. Mr.Praphant

Meeting Allowance of the Company’s Board of Directors (Baht)4 Meeting Allowance Of the Sub-Committee (Baht) Director’ Remuneration (Baht)

Names of Directors

Period in position in 2011(months)

Report of the Remunerations of the Directors and Executives for the fiscal year 2011 The remunerations of the Directors from January 1 - December 31, 2011

- 12 12 12 12 12 12 12 12 12 12 - - - - - - - - 12

420,000 378,000 378,000 378,000 378,000 378,000 378,000 378,000 420,000 378,000 420,0005

Remarks : 1 Former Chairman and former Director mean The Company’s Director, whose post was annulled before 31 December 2011. 2 The Baht 990,000 remunerations of Mr. Permsak Rattana-ubon and Mr. Rasda Pongpaew was based on the regulations of Electricity Generating Pcl. (EGCO), which was directly transferred as director’s remuneration of directorship in other companies to the account of the the Thai Rakpa Foundation 3 Mr. Vichian Udomratanasin has just received an approval of appointment from the Board of Directors to be the Company’s Director on December 19, 2011, hence, he had not joined the Board of Directors’ meeting in 2011 4 The numbers of the meeting attendances are summarized on page 47 5 The deduction of the withholding tax is calculated in the Directors’ remunerations.

Eastern Water Resources Development and Management PLC. |

• Remunerations of Management Eleven members of the Company’s Executives Directors and Executives received benefits for 2011 operating results in the form of salaries and remunerations, totaling Baht 43,567,986.24. • Securities Holding As of December 31, 2011, none of 11 members of the Board of Directors held the Company’s securities as appeared in the summary in responsibility … Therefore, eleven members of the Executives Directors and Executives of the Company held 1,454,580 ordinary shares (as of Oct 30, 2011) • Contributions to Provident Funds In the fiscal year 2011 as ending December 31, 2011, the Company’s contributions to the Provident Funds for 11 Executive Directors and Executives accounted for Baht 1,969,576.70. 46

| Annual Report 2011

The Board of Directors Meetings

The Board of Directors’ monthly meetings are normally scheduled on the fourth week of the month. The meetings are planned in advance for the whole year to facilitate the Directors’ time to attend for every meeting. The President & CEO, serving as the Secretary to the Board of Directors, shall coordinately include the scopes, importance orders, and subjects into meeting agendas. The important matters will be included in meeting agendas for consideration and other subjects will be ordered in certain agendas by their importance and urgency. The letter of meeting invitation with meeting agendas and relevant documents will be sent in advance to the Board of Directors to review the

information before attending every meeting. During the meeting, after the completion of the management’s presentation, Chairman shall ask the Directors to raise questions or express their opinion and mutually discuss problems. Hence, the conclusion is received, Chairman shall provide conclusion as the resolution of the meeting for clarification and accuracy and mutual acknowledgement, leading to careful consideration as well as providing sufficient time for the Directors to mutually discuss the problems. If there is no objection of the meeting’s resolution, Chairman shall lead to the consideration of the following agenda.

In the fiscal year 2011, there were 14 meetings of the Board of Directors. Details on individual director’s attendance are summarized as follows: Name of Directors

Meeting attended/ No.of Meetings

Period Effective

1. Mr.Charnchai Soontharamut Chairman 3/3 Effective on Sep 22, 2011 2. Mr.Utid Tamwatin Former Chairman 11/11 Jan 24, 2003- Jan 26, 2007 May 26, 2007-Sep 30, 2011 3. Mr.kanoksakdi Bhinsaeng Former Director 10/10 May 12, 2008-Sep 16, 2011 4. Pol.Gen. Somyot Poompanmoung Former Director 10/10 May 12, 2008-Sep 16, 2011 5. Mr.Boonmee Juntaravong Former Director 10/10 May 22, 2009-Sep 16, 2011 6. Mr.Niskorn Tadthiemrom Former Director 11/11 May 22, 2009-Sep 30, 2011 7. Pol.Maj.Gen. Pimol Sinthunava Former Director 10/11 May 12, 2008-Sep 30, 2011 8. Mr.Wiset Chamnarnwong Former Director 11/12 May 22, 2009-Nov 7, 2011 9. Mrs.Leena* Charernsri Former Director - Nov 18, 1996-Feb 6, 2001 Feb 27,2009-Jan 24, 2011 10. Mr.Rasda Pongpaew Former Director 3/3 May 12, 2008-Mar 24, 2011 11. Mrs. Monta Pranootnorapal Director 12/12 Jan 24, 2008-Present 12. Mr. Permsak Rattana-ubon Director 8/9 Effective on-Mar 24, 2011 13. Mr. Rungson Sriworasat Director 12/13 Effective on-Jan 31, 2011 14. Mr.Vichian Udamratanasil Director - Effective on-Dec 19, 2011 15. Mr.Somchai Choomrat Director 3/3 Effective on-Sep 22, 2011 16. Mr.Poonsak Pranootnaraparn Director 3/3 Effective on- Sep 22, 2011 17. Mrs.Arunee Arkaraprasertkul Director 2/2 Effective on-Oct 11, 2011 18. Pol.Gen.Wutthi Phuawade Director 2/2 Effective on- Sep 22,2011 19. Miss Narinee Talomsin Director 2/2 Effective on- Sep 22,2011 20. Mr.Praphant Asava-aree Director 12/12 Jan 26, 2007-Jan 24,2008 May 12, 2008- Present Remarks :

* Mrs. Leena Charernsri asked for the resignation from the position of the Company’s Directors which was effective on January 24, 2011, hence, she had not joined the Board of Directors’ meeting in 2011

The Board of Directors had a policy to set up meetings with Independent Directors in January and June 2010 and Directors meeting which excluded Executive Directors in January 2011.

Eastern Water Resources Development and Management PLC. |

The Committees

The Board of Directors has appointed the Sub-Committees consisting of members with appropriate expertise to review and examine the works assigned to them to initially ensure their accuracy and clarity following the Company’s missions and policy prior to proposing them to the Board of Directors for approval, or ratification, or further providing additional recommendations, depending upon the case. Details on the committees appointed by the Board of Directors and their meeting attendance during the fiscal year 2011 are as follows: Audit Committee as of December 31, 2011 comprised three Independent Directors, and one advisor, namely Name-Surname Position 1. Mrs.Arunee Arkaraprasertkul Chairman 2. Mr.Poonsak Pranootnaraparn Director 3. Mr. Rungson Sriworasat Director 4. Mr. Chakkrit Parapuntakul Advisor of the Audit Committee The Audit Committee is responsible for ensuring the accuracy and credibility of the Company’s financial statement following the generally accepted international standard prior to proposing it to the Board of Directors. The Committee’s management procedures shall perform with effectiveness, independency, and focus on transparent and clear guidelines between the Board, 48

| Annual Report 2011

the Internal Audit Department, the Management, and the External Auditor in order to revise and provide recommendation in terms of efficiency and effectiveness assessment of the Company’s internal control system and the compliance with the law and regulations. Also, the consideration of connected transaction or conflict of interest transaction shall be performed with lawful and reasonable implementation and shall maintain the utmost benefit of the Company. The disclosure of information shall be included into the Auditing Report in the Company’s annual report. In addition, the Committee is initially responsible for appointment and remuneration of the external auditors to further proposing to the Board of Directors and the shareholders. As of December 31, 2011, the Management and Investment Committee comprised three Directors, namely Name-Surname Position 1. Mr.Somchai Choomrat Chairman 2. Miss Narinee Talomsin Director 3. Mr.Praphant Asava-aree Director The Management and Investment Committee is assigned by the Board of Directors to be responsible for ensuring the efficiency and strength of the Company’s business operation following the policy of the Board. The Committee is to screen and consider revision of business plans, operating

plans and annual budgets, and other matters, particularly, concerning procurement of investment project which is over the assigned authorization before proposing to the Board. In addition, the Management and Investment Committee is responsible for determination of procedures and principles for investment of projects and supporting management of the management in order to achieve the Company’s objectives and targets. As of December 31, 2011, the Corporate Governance Committee and the Nominating Committee comprised three Directors, namely Name-Surname Position 1. Mr. Rungson Sriworasat Chairman 2. Mr.Vichian Udamratanasil Director 3. Mrs.Arunee Arkaraprasertkul Director Corporate Governance is responsible for supporting the operation of the Board of Directors with accuracy, transparency,and benefit maintaining of the Company’s shareholders and stakeholders by screening the manual of the Board of Directors, Business Ethics, Staff Ethics, and ensuring the practical result of development and best practices of the Good Corporate Governance principles. Moreover, the Committee is to ensure that the Company follows important practice guidelines of the effective corporate governance procedures which are

the objectives by proposing to the CEO based on their roles, responsibility, Board of Directors in every 6 months. assignments, and the shareholders’ equity. As of December 31, 2011, the Regulation Enforcement and Operating Results Assessment Committee and the Remuneration Committee consisted Nomination The Committee is appointed by the of 3 Directors, namely Board of Directors to select and Name-Surname nominate suitable persons to be Position members of the Board of Directors of the Company and its affiliated 1. Mr.Poonsak Pranootnaraparn companies, representative directors Chairman of the Company, the Sub-Committees of the Company, and President & 2. Mrs. Monta Pranootnorapal Director CEO, including to opine the management structure of the Board of Directors 3. Mr.Permsak Rattana-ubon Director and the Sub-Committees. suitable and in accordance with notifications of the Stock Exchange of Thailand. The assessment shall be performed periodically in accordance with the policy.

As of December 31, 2011, the Risk Regulation Enforcement and Operating Management Committee comprised Results Assessment Committee four Directors, namely appointed by the Board of Directors, is responsible for annual regulations enforcement and Corporate KPIs Name-Surname revision following the Company’s Position business operation policy, including 1. Mrs. Monta Pranootnorapal quarterly assessment of the Company’s Chairman performance and providing suggestion 2. Mr.Somchai Choomrat to the management in terms of Director operation and report the results to the 3. Pol.Gen.Wutthi Phuawade Board of Directors. Director 4. Mr.Praphant Asava-aree Nomination Director The Committee’s main responsibility is to provide suggestion of remuneration The Risk Management Committee’s policy and all of other benefits in any major role is to oversee and review forms of all level of personnel to the the risk management policy and plan, Board of Directors. In addition, the standard practices, and strategies and Committee is to provide suggestion risk assessment, including providing to the Board of Directors concerning suggestion to the management to annual remuneration of the Board ensure the appropriate implementation of Directors of the Company and its of the risk management policy following affiliated companies, and President & Eastern Water Resources Development and Management PLC. |

Director Orientation

In 2011, the Company stipulated to hold an orientation for new directors to inform business policy and other related internal information such as the shareholder structure, the Company structure, business operation,elated law and regulations, including the past Board of Directors’ resolutions, etc. President & CEO and Corporate Secretary and the Executives will present the aforementioned information and send the Board of Directors Manual and information for the directors to the new Directors which consist of : • The Company Profile • Result of operation and activities of the Company • Annual report (Thai edition) • Manual of the Board of Directors • Good Corporate Governance Principles • The Board of Directors’ meeting reports • Risk Management Manual • The Company’s Article of Association, certificates, rules and regulations In addition, every year, the Company has a policy for new Directors to visit the Company’s operation areas to promote their understanding of the business.

Training of the Board of Directors The Company places an emphasis upon training courses relating to development of knowledge, skill, understanding of the Good Corporate Governance principles, rules and regulations, including management roles and responsibility of the 50

| Annual Report 2011

Company’s Directors in order to promote efficiency and morality. Thus, the Company has continuously supported additional education and training for the Board of Directors. Moreover, the Company has applied for IOD members for Directors to receive beneficial information and additional knowledge. Apart from this, when the Company receives training invitation letters or training documents concerning Directors, the Company will pass the information to Directors for further studies.

Corporate Secretary

The Company has appointed Mrs. Namphon Rassadanukul, Senior Vice President Department of CEO office to be Corporate Secretary who directly reports to President & CEO. Also, the position is a secretary to the Board of Directors of the Company with the responsibility for the meeting of the Board of Directors and the shareholders’ meeting, including the Company’s document preparation and storing, and supervision of compliance to law and regulations of the Company, concerning the public company. Moreover, the corporate secretary acts as the center of information or rules and regulations of the Securities Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) with the supervision of compliance to the law and regulations relating the Company’s business operation. Corporate Secretary shall stipulate work satisfaction assessment of the secretary to the Board of Directors for further improvement.

Definition of Independent Directors Definition of Independent Directors (a) Relationship characteristics 1. Not holding shares in excess of 1 per Professional Service Relationship cent of the total voting right shares of 1) Auditor and other professional the Company, parent company, subsidiary services such as law consultant, company, associated company or juristic financial advisor, property appraiser, etc persons which shall be possible of any 2) Significant level of dependency conflict of interest Auditor: Prohibited - Other professional services: the transaction 2. Not being an executive director of the value of more than Baht 2 million per Company, parent company,subsidiary year Trading/ Business Relationship company, associated company or juristic (Following the SETâ&#x20AC;&#x2122;s connected transaction persons which shall be possible of any guideline) conflict of interest (inclusive of related Relationship: Cover all types of business persons under Section 258 of the such as normal business transaction, Securities and Exchange Act). real estate renting/ renting out transaction, property/service transaction and providing 3. Not being related by blood or legal or receiving financial aids. registration as father, mother, spouses, Significant level of dependency: sibling, children including spouses of Transaction value is over or equal to Baht the children of the executives,major 20 million or over or equal to 3% of shareholders, controlling persons, or the the Net Tangible Asset (NTA) of the candidates to be proposed as the Company, which is lower. When executives or controlling person of the considering the value of transaction, Company or subsidiary companies. transactions occurring during 6 months prior to the transaction date must be 4. Not having a business relationship aggregated. with the Company, parent company, subsidiary company, associated company (b) In the case of the relationship or juristic persons which shall be possible Following (a). with the juristic person, of any conflict of interest, in the manner personof dependency such as major which may interfere with his independent judgment.

shareholders, directors (except Independent Directors/ Audit Committee) (c) The relationship In (a). and (b). shall not be involved at present and 2 years prior to the appointment. 5. Not being the director appointed to be a representative of the directors of the Company, major shareholders, or shareholders who are related to the Companyâ&#x20AC;&#x2122;s major shareholders 6. Not possessing any characteristic which may prevent from expressing opinion with independency. 7. Independent directors who have qualifications under 1-6 may be authorized by the Companyâ&#x20AC;&#x2122;s Board of Directors to determine the business operation of the Company, parent company, subsidiary company, associated company, same-level subsidiary company or juristic persons which shall be possible of any conflict of interest under collective decision basis.

Eastern Water Resources Development and Management PLC. |

Sufficiency Assessment of Internal Control System 2011 The Company places an importance upon the internal control system by focusing on sufficient and appropriate internal control system as well as supportive to the business effectiveness in terms of finance, operation, risk management, and governance. The important principles and information of sufficiency assessment of the internal control system can be categorized into 5 areas as follows, 1. Corporation and Environment The Board of Directors has an important role to stipulate vision, policy, and strategy of the Company which cover the principle of the Balanced Scorecard by specifying long-term business plan, including providing opinion and approving strategy, activities, and annual operation plan. In addition, the Key Performance Indicators (KPIs) are applied with the corporate performance assessment which lead to the fair and effective performance record and assessment, following the Company’s targets and objectives. The corporate internal management policy focuses on the power checking and balancing of the Board of Directors, management, and shareholders. The Board of Directors consist of Independent Directors or external Directors of no less than 3 Directors in order to create the power checking and balancing with the Directors who may have conflicts of interest against the Company. 52

| Annual Report 2011

There are also communication channels for the investors to disseminate and communicate information of the Company for the public’s consistent acknowledgement. Moreover, the sets of committees are established to screen and provide decision of related important matter for the benefit maintenance of the shareholders. In addition, the Company has announced the compliance to the Good Corporate Governance of Eastern Water Resources Development and Management Pcl., the ethic of the Board of Directors, and the business ethic of the employees for every level of the Company’s employees to follow in order to create honesty and morality of the business operation. 2. Risk Management The Company follows the Enterprise Risk Management by assessing risks in each process and analyzing risk factors, present control measurement, and stipulating additional control measurements. All staffs from every department are continuously encouraged to participate in assessment process and risk management of the Company. The corporate risk management manual and annual risk management operation plan are established to increase and strengthen the efficiency of the Company’s internal control system which leads to the decrease of the risk to the acceptable level which is in accordance with the ever changing circumstances and risks. In addition,

the Company has set up special units to be responsible for the record of operating results, risk management project, assessment, and provide risk management report to the Risk Management Committee and the Board of Directors for consideration and providing decision which will lead to the dynamic, consistent, and continuous risk management process of the Company. 3. Operation Control of the Management The Company has stipulated the scope of power and the authorization of approved financial amount of the management following the good internal control principles: the separation of duty and intertransaction review by separating the duty of approving, recording accounting item and information, and the duty of asset supervision. In addition, the Company has received the quality certification of standard system of ISO9001:2000 and ISO14001:2004 which specify that the Company shall provide manual and Work Procedures and Work Instructions as standards for operating reference, as well as provide trainings for employees to stimulate understanding which leads to accuracy of operation, following the operational process and methods stipulated by the Company. When there is a transaction between the Company and its affiliated companies, including companies and persons with joint benefits,

the transaction shall go through the consideration of approval procedures with accuracy as stated in the conditions. They are treated in the same way as other trading partners of which the information is disclosed in the remark of the financial statements. The Company has closely followed the operation of the affiliated companies with continuity and consistent. The operating results of each affiliated company will be reported to the Board of Directors of the Company for acknowledgement. Also, the special unit will be assigned to closely record the operating results, following the resolute suggestion of the Board of Directors. In addition, the special unit will coordinate with every company to ensure the consistency of the operation direction with the policy of the Board of Directors. Moreover, the Compliance unit is established to supervised the Company’s operations to be in accordance with related laws, rules, and regulations. 4. Information System and Communication The Company provides enough important information to the Board of Directors for consideration. The information will be submitted to the Board in advance for revision and initial study of the information. Every detail of agenda of the meeting of the Board of Directors and the SubCommittee will be included in the summary of background as well as the detail of the previous meeting resolution, law indication relating

to the meeting agenda (if any) for the Board’s acknowledgement with completeness and comprehension to provide decision and suggestion, leading to continuous corporate improvement and development. Then, the fact of the management’s progress following the opinions of each SubCommittee will be indicated which covers reasons, business sensitivity analysis, and difficulties or possible impact. However, the proposing of the suggestion for consideration will always include consideration, or optional consultation,and consideration. At every submission of the meeting report, the Company will inform each Director to correct the meeting report within the due period after receiving the report around 7 days.

Board of Directors for consideration of improvement of delay or weaknesses to be in accordance with the ever changing situation with the emphasis on prompt solving. The Company greatly places an importance on internal auditing by focusing on increase value of the corporate internal auditing with the annual implementation of corporate risk assessment result, risk based audit, and hiring co-sourcing of internal auditing with the Audit Department. As a result, the Board of Directors and the management can be confident of the efficiency and effectiveness of the Company’s internal control system and the creditability of information such as finance and accounting information and operational information. All of the operations are performed in accordance with laws, rules, and regulations relating the Company. In addition, there is the operating results record process through the recording system, quality system, and the Company’s internal environment continuously following the international standard of ISO 9001:2000 and ISO 14001 : 2004.

In addition, the Company has continuously applied and developed the information system and internal database system to facilitate all levels of staff of the Company to access to the data and information concerning operation at appropriate level through the clear policy and system of the right to information. The aforementioned information and the data are for consideration and decision making of the operation. According to the consideration of the important information of 5. Recording System the sufficiency assessment of the The Company’s operational recording aforementioned internal control system aims to continuously follow system, the Board of Directors is the targeted operation as stipulated confident that the Company’s in the long-term business plan and internal control system is sufficient annual operation plan. The result of and appropriate with the business the operating progress and the KPIs operation, transparency of operation, will be quarterly presented to the and effectiveness support of the sustainability of the business operation. Eastern Water Resources Development and Management PLC. |

Corporate Governance Report of the Audit Committee for the Fiscal Year 2011

The Board of Directors of Eastern Water Resources Development and Management PCl. appoints the Audit Committee which consists of 3 Independent Directors whose qualifications are appropriated as stipulated by the Stock Exchange of Thailand. Moreover, the Board of Director has specified the qualification, position period, and responsibility of the Board of Directors written in the Charter of the Audit Committee. In 2011, there was a change within the Audit Committee i.e. Mrs. Arunee Arkaraprasertkul is positioned as Chairman of the Audit Committee, Mr. Poonsak Pranootnaraparn and Mr. Rungsorn Sriworasat are positioned as the Audit Committee. In 2011, the Audit Committee had altogether 10 meetings which included the meetings with the Internal Audit Department, the Companyâ&#x20AC;&#x2122;s Executives, and the Auditors. The Audit Committee reports the meeting resolution and operation of the Audit Committee 54

| Annual Report 2011

to the Board of Directors in every quarter. The Audit Committee had completely followed the stipulated Charter which can be summarized as follows:

guidelines and scopes of the auditing of the Auditors.

In addition, the Audit Committee had reviewed the list of possible conflicts of interest in order to ensure that the 1. Review the accuracy and creditability company operated under normal of the financial statements and the business condition ,full and adequate disclosure before present to Board of connected transaction The Audit Committee had considered Directors for further consideration. and provided opinion concerning the International Financial Reporting 2. Supervision of the internal control Standards (IFRS) and reviewed the system quarterly financial statement and the The Audit Committee had considered annual financial statement of 2011 the auditing plan of 2011 which of the Company with the auditors covered the scope of the examination and the internal auditors, as well as based on the Risk Based Internal received the explanation from the Audit Plan and all of the operation the management to ensure the accuracy, processes of the group of Companies, creditability, and sufficiency of the of which the information from the accounting budgeting estimation, Companyâ&#x20AC;&#x2122;s 2011 risks assessment sufficient and in time information results, interview with the Executives disclosure, and providing remark on their needs and concerns, financial of the important matter which was statement analysis, and remarks received from the auditors, covering beneficial to the Company. all of the Companyâ&#x20AC;&#x2122;s unit. The Audit Committee had a meeting with the Auditors without the presence The Audit Committee had considered of the management to acknowledge reviewing the results of the efficiency

and effectiveness assessment of the internal control system which were jointly tested by the Internal Audit Department and the consultant company in every quarter to ensure the compliance of the Company’s processes to the international standards. The Audit Committee had provided additional suggestion which was beneficial to the operational improvement with effectiveness and efficiency to the Company. The management of the Company was closely followed by the Committee to ensure its improvement following the suggestion. The management shall report to the meeting of the Audit Committee at least in every quarter. The result of the assessment of the internal control system reported that the Company’s internal control system was sufficient and there was no important problem or defect detected which was in accordance with the Company’s auditors’ opinion.

4. Supervision of the internal auditing The Audit Committee considers and approves the operational plan, annual budget, and manpower of the Internal Audit Department, as well as supports and encourages the independency of the operation of the Audit Department. In addition, to increase the efficiency of the operation, the Internal Audit Department directly reports to the Audit Committee.

3. Compliance to related laws and regulations The Audit Committee’s supervision is to ensure the transparent information disclosure and the compliance to the laws concerning the business operation and the laws of the securities and exchange, including the management’s summary report of compliance to related laws, rules, and regulations of the Company at least twice a year.

The Audit Committee had considered approval of the improvement of the manual and the Charter of the Audit Committee which would be in accordance with the ever-changing situation. received an approval from the Board of Directors.

In 2011, the Audit Committee had considered hiring a consultant company, KPMG Phoomchai Business Advisory Ltd. to join the internal auditing operation as co-sourcing with the Audit Department’s personnel in order to provide and exchange experience for better efficiency of the group of companies’ internal auditing. The findings from the auditing would continuously increase the value to the Company.

5. Review of the Auditors’ operation and appointment of the Auditors for 2012 The Audit Committee had special meetings with the Auditors to ensure

the independency of the Auditors and to understand the Auditors’ plan and scope of work. The Audit Committee has acknowledged the assessment result of the consideration of the appointment of the Auditors for 2011 from the management of the group of companies of the present Auditors from PricewaterhouseCoopers ABAS Ltd. (PWC). After receiving the assessment result and consideration of experience, qualification, and fee, the Audit Committee had presented the result to the Shareholders’ Annual General Meeting 2011 for approval of appointment auditors from PricewaterhouseCoopers ABAS Ltd. (PWC), to be the Company’s auditor in 2012. 6. Self-assessment of the Audit Committee and Review of the Charter manual of the Audit Committee The Audit Committee had performed self-assessment of the whole committee and performed cross individual assessment which followed the Good Corporate Governance and of which the results were reported to the Board of Directors for consideration. The self-assessment result of the whole committee and individual reported excellent. Moreover, the Audit Committee had reviewed the Charter and the manual of the Audit Committee as to ensure their accordance with the ever changing situation and could ensure the complete operation in the past year as

Eastern Water Resources Development and Management PLC. |

assigned and ensure the compliance with the Best Practice guidelines of the Stock Exchange of Thailand (SET). This will be proposed to the Board of Directorsâ&#x20AC;&#x2122; meeting for approval. In sum, the Audit Committee had completely performed its duty as stipulated in the Charter of the Audit Committee approved by the Board of Directors which was in accordance

with the stipulation of the SEC and the SET. The Audit Committee and the Auditors also had the same opinion toward the accuracy of the financial statements of the Company as they followed the general accepted accounting standards of Thailand. Also, the disclosure of the connected transaction was complete and accurate. Moreover, the Companyâ&#x20AC;&#x2122;s internal control system and auditing

system were appropriate and effective. The operation throughout the year 2011 showed no significant findings of the non-compliance to the regulations, obligations, and related laws. There were operational improvements to continuously adjust with the ever changing business environment.

Mrs. Arunee Arkaraprasertkul Chairman of the Audit Committee

| Annual Report 2011

Report of Corporate Governance and Nominating Committee

Eastern Water Resources Development and Management Pcl. has significantly emphasized on the Good Corporate Governance through the adoption of the Good Corporate Governance Principle and the rules and regulations of the Securities and Exchange Commission as organization’s main driving factors to achieve an efficient management system, transparency, honesty and responsibility in order to create the utmost benefit to the shareholders. The Board of Directors always realizes that the compliance with the Good Corporate Governance principle will enhance the sustainable growth of the organization and strengthen confidence to all stakeholders. The Board of Directors, executives and staff have strictly adhered with such principle in accordance with

the Board of Directors’ handbook and part of the Company’s achievement employee’s code of conduct. depended on many related parties such as stakeholders, staff, competitors, In 2011, the Corporate Governance communities and environment. and Nominating Committee had Therefore, the Committee would been reviewing the Good Corporate like to assure that the Company Governance Policy in accordance with will adopt 5 principles of the Good Good Corporate Governance survey Corporate Governance Principle of such as policy on non-involvement listed companies 2006 of the Stock of violation of human rights, policy Exchange of Thailand, namely, right and guideline on non-infringement of shareholders, equitable treatment of intellectual property or copyright of shareholders, role of stakeholders, and policy and guideline on anti-corruption disclosure and transparency and and anti-bribery for business purpose. responsibility of the Board as the The Company had cooperated with Company’s business management relevant divisions to make such guideline, continuously, and will policies clear and well-conceived update the same to be suitable with and truly beneficial. current circumstance and economic situation to create the ultimate Corporate Governance and Nominating benefit to the shareholders. Committee was well aware that

Mr. Rungson Sriworasat, Chairman of Corporate Governance and Nominating Committee Eastern Water Resources Development and Management PLC. |

Report of the Board of Directors’ Responsibility toward Financial Statement Report

The Board of Directors of the Company had initiated financial statement preparation to present the Company’s financial positions and operating results for the year ended December 31, 2011 under the Public Company Act B.E. 2535. The Company’s Board of Directors has realized its duties and responsibility as Directors of listed company in the Stock Exchange of Thailand to be responsible for financial statements and consolidated financial statements of the Company, including financial information appeared in the annual report for the year ended December 31, 2011.

Mr.Charnchai Soontharamut Chairman

| Annual Report 2011

Thus, the Company’s Board of Director appointed the Audit Committee which consists of independent Directors and Non-Executive Directors of the Company who are responsible for the quality of financial statements and reviewing the adequacy and effectiveness of the internal control system of the Company and its affiliated companies to reasonably ensure that the records of accounting information are accurate, complete, and adequate to protect the Company’s assets, including being guidelines for the Company and its affiliated companies to significantly prevent corruption or irregular activity. The opinion of the Audit Committee shall

appear in the Corporate Governance Report of the Audit Committee of the fiscal year 2011 as shown in this Annual Report. Therefore, the Board of Directors considered that the Company’s financial statements were carefully and reasonably prepared with the best estimations under the appropriate accounting policies and consistent conformity with Thai generally accepted accounting standards, including the sufficient important information is already disclosed in the Notes to financial statements.

Mr.Praphant Asava-aree President & CEO่

Auditor’s Report EASTERN WATER RESOURCES DEVELOPMENT AND MANAGEMENT PUBLIC COMPANY LIMITED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2011 AUDITOR’S REPORT To the Shareholders of Eastern Water Resources Development and Management Public Company Limited I have audited the accompanying consolidated and company statements of financial position as at 31 December 2011 and 2010, and the related consolidated and company statements of comprehensive income, changes in shareholders’ equity and cash flows for the years then ended of Eastern Water Resources Development and Management Public Company Limited and its subsidiaries and of Eastern Water Resources Development and Management Public Company Limited, respectively. The Company’s management is responsible for the correctness and completeness of information in these financial statements. 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 consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position as at 31 December 2011 and 2010, and the consolidated and company results of operations, and cash flows for the years then ended of Eastern Water Resources Development and Management Public Company Limited and its subsidiaries and of Eastern Water Resources Development and Management Public Company Limited, respectively, in accordance with generally accepted accounting principles. Without qualifying my opinion on the aforementioned financial statements, I draw attention to Note 38.5 to the financial statements regarding the compensation of the Company’s pipeline connecting project. The Company is paying the compensation at a preliminary rate because the government agency is considering a deal for the Company to rent/manage the connecting projects and the compensation rate that may change.

Vichien Khingmontri Certified Public Accountant (Thailand) No. 3977 PricewaterhouseCoopers ABAS Limited Bangkok 20 February 2012 Eastern Water Resources Development and Management PLC. |

Eastern Water Resources Development and Management Public Company Limited

Statements of Financial Position As at 31 December 2011 and 2010

(Unit: Baht)

Notes Assets Current Assets Cash and cash equivalents Temporary investments Trade and other receivables Water loss treatment service income receivable- related party Inventories Other current assets Non-current assets classified as held-for-sale

Company 2011

(Restated) 2010

6 7 8

128,689,638 95,000,000 417,582,586

442,884,324 375,055,098

73,442,207 50,000,000 297,473,794

328,370,034 240,582,754

37.2 9

10,133,259 7,878,538 39,834,265

16,612,643 9,558,954 20,106,804

34,390,428

14,383,680

34,657,502

733,775,788

864,217,823

455,306,429

583,336,468

Total current assets Non-current assets Restricted bank deposits Investments in subsidiaries Other long-term investments Investment property - net Property, plant and equipment - net Assets under concession contracts - net Deferred concession rights acquisition costs - net Intangible assets - net Deferred tax assets Other non-current assets

Consolidated (Restated) 2011 2010

11 12 13 14 15 16 17 18 19 20

2,076,000 2,076,000 510,000,000 510,000,000 91,470,300 91,470,300 91,470,300 91,470,300 217,160,139 230,465,799 230,846,400 244,736,753 8,372,710,879 7,537,824,244 8,188,715,686 7,337,371,495 456,005,518 429,079,297 541,773,752 169,572,866 23,062,603 178,940,192

542,317,810 143,899,104 13,972,904 29,248,983

34,022,500 12,882,077 155,688,272

7,875,945 6,495,557

Total non-current assets

10,050,696,249 9,020,354,441 9,223,625,235 8,200,026,050

Total assets

10,784,472,037 9,884,572,264 9,678,931,664 8,783,362,518

The accompanying notes on page 68 to 122 are an integral part of the financial statements. 60

| Annual Report 2011

Eastern Water Resources Development and Management Public Company Limited Statements of Financial Position (continued) As at 31 December 2011 and 2010

Notes Liabilities and shareholdersâ&#x20AC;&#x2122; equity Current liabilities Short-term loans from financial institutions 21 Trade accounts payable 22 Payable for purchase of fixed assets Current portion of long-term liabilities under finance lease agreements 23 Current portion of long-term loans from financial institutions 24 Corporate income tax payable Accrued expenses 25 Other current liabilities Total current liabilities Non-current liabilities Long-term liabilities under finance lease agreements Long-term loans from financial institutions Deferred tax liabilities Employee benefit obligations Other non-current liabilities

(Unit: Baht)

Consolidated (Restated) 2011 2010

Company 2011

(Restated) 2010

33,000,000 105,664,313 183,599,091

552,587,913 137,555,857 150,790,877

127,100,896 177,333,443

552,587,913 94,216,058 129,795,419

2,382,185

2,823,812

2,382,185

2,823,812

620,995,616 192,791,963 82,739,277 45,436,168

373,406,060 133,787,088 119,239,840 41,794,921

522,750,000 173,976,876 61,425,714 31,026,297

250,000,000 118,065,548 77,519,651 28,141,045

1,266,608,613 1,511,986,368 1,095,995,411 1,253,149,446 23 24 19 26 27

2,324,805

2,481,480

2,324,805

2,481,480

2,325,024,850 1,632,406,466 1,899,750,000 1,204,000,000 37,914,766 43,284,927 10,231,997 115,196 64,958,355 37,672,554 151,439,708 106,804,273 129,864,673 86,063,011

Total non-current liabilities

2,581,662,484 1,784,977,146 2,079,844,029 1,292,659,687

Total liabilities

3,848,271,097 3,296,963,514 3,175,839,440 2,545,809,133

The accompanying notes on page 68 to 122 are an integral part of the financial statements. Eastern Water Resources Development and Management PLC. |

Eastern Water Resources Development and Management Public Company Limited Statements of Financial Position (continued) As at 31 December 2011 and 2010

Notes

(Unit: Baht)

Consolidated (Restated) 2011 2010

Company (Restated) 2011 2010

Shareholders’ equity Share capital Registered share capital Ordinary shares, 1,663,725,149 shares of par Baht 1 each Issued and paid-up share capital Ordinary shares, 1,663,725,149 shares of par Baht 1 each Share premium Retained earnings Appropriated - legal reserve Unappropriated Other components of equity Equity attributable to owners of the parent Non-controlling interests Total shareholders’ equity Total liabilities and shareholders’ equity

(Mr. Charnchai Soontharamut) Chairman

28 1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149

28 29 30

1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149 2,138,522,279 2,138,522,279 2,138,522,279 2,138,522,279 166,500,000 166,500,000 166,500,000 166,500,000 2,929,182,087 2,577,526,555 2,499,192,649 2,230,256,287 35,152,147 38,549,670 35,152,147 38,549,670 6,933,081,662 6,584,823,653 6,503,092,224 6,237,553,385 3,119,278 2,785,097 6,936,200,940 6,587,608,750 6,503,092,224 6,237,553,385 10,784,472,037 9,884,572,264 9,678,931,664 8,783,362,518

(Mr.Praphant Asava-aree) President CEO

The accompanying notes on page 68 to 122 are an integral part of the financial statements. 62

| Annual Report 2011

Eastern Water Resources Development and Management Public Company Limited Statements of Comprehensive Income For the years ended 31 December 2011 and 2010 Notes Revenues Sales - raw water Sales - tap water Sales - project assets Total sales Rental and service income Other income Total revenues Expenses Costs of sales - raw water Costs of sales - tap water Costs of sales - project assets Total costs of sales Costs of rental and services Selling expenses Administrative expenses Expenses for development of life quality and environment Finance costs Total expenses Profit before income tax Income tax Net profit for the year Other comprehensive income (expense): Write off asset transferred from customer Other comprehensive expense for the year, net of tax Total comprehensive income for the year Profit attributable to: Owners of the parent Non-controlling interests Total comprehensive income attributable to: Owners of the parent Non-controlling interests

37 32 33 37 32

34 35

Consolidated (Restated) 2011 2010 2,261,015,945 765,848,850 3,026,864,795 223,518,568 59,652,205 3,310,035,568

(Unit: Baht)

Company (Restated) 2011 2010

2,117,502,225 2,381,767,736 2,228,405,523 716,233,258 245,187,905 243,463,695 1,567,289,720 1,567,289,720 4,401,025,203 2,626,955,641 4,039,158,938 232,265,416 66,594,519 58,203,129 41,508,271 81,526,518 66,391,675 4,674,798,890 2,775,076,678 4,163,753,742

770,788,806 811,216,783 811,953,544 853,713,922 433,504,674 404,591,735 243,070,169 240,578,081 1,507,455,010 1,507,455,010 1,204,293,480 2,723,263,528 1,055,023,713 2,601,747,013 192,931,533 210,957,683 59,488,988 55,075,432 49,512,541 49,641,874 47,168,083 46,690,899 318,549,341 275,839,405 236,441,454 207,621,836 33,555,350 34,604,368 32,230,547 32,095,002 78,476,072 89,807,641 52,417,171 67,652,245 1,877,318,317 3,384,114,499 1,482,769,956 3,010,882,427 1,432,717,251 1,290,684,391 1,292,306,722 1,152,871,315 (424,694,289) (378,550,820) (383,602,385) (325,420,588) 1,008,022,962 912,133,571 908,704,337 827,450,727 (3,397,523)

(3,397,523)

1,004,625,439 1,007,548,762 474,200 1,008,022,962

908,736,048 911,749,287 384,284 912,133,571

905,306,814 908,704,337 908,704,337

824,053,204 827,450,727 827,450,727

1,004,151,239 474,200 1,004,625,439

908,351,764 384,284 908,736,048

905,306,814 905,306,814

824,053,204 824,053,204

0.55

0.50

Earnings per share for profit attributable to owners of the 36 parent (Baht) Basic earnings per share 0.61 0.55 The accompanying notes on page 68 to 122 are an integral part of the financial statements.

Eastern Water Resources Development and Management PLC. |

| Annual Report 2011

assets Premium on transferred Appropriated share from capital -legal reserve Unappropriated customers-net 2,138,522,279 166,500,000 2,606,838,578 38,549,670 (29,312,023) 2,138,522,279 166,500,000 2,577,526,555 38,549,670 (40,333,795) 1,007,548,762 (3,397,523) (615,559,435) 2,138,522,279 166,500,000 2,929,182,087 35,152,147 2,138,522,279 166,500,000 2,330,480,390 41,947,193 (32,507,695) 2,138,522,279 166,500,000 2,297,972,695 41,947,193 908,553,615 (3,397,523) 3,195,672 911,749,287 (3,397,523) (632,195,427) 2,138,522,279 166,500,000 2,577,526,555 38,549,670

The accompanying notes on page 68 to 122 are an integral part of the financial statements.

Issued and paid-up Notes share capital Opening balance as at 31 December 2010 - as previously reported 1,663,725,149 Retrospective adjustment 2.2 b) Opening balance as at 31 December 2010 - as restated 1,663,725,149 Brought forward adjustment 2.2 b) Comprehensive income for the year Dividend paid 31 Closing balance as at 31 December 2011 1,663,725,149 Opening balance as at 31 December 2009 - as previously reported 1,663,725,149 Retrospective adjustment 2.2 b) Opening balance as at 31 December 2009 - as restated 1,663,725,149 Comprehensive income for the year - as previously reported 2.2 b) Retrospective adjustment Comprehensive income for the year - as restated 31 Dividend paid Closing balance as at 31 December 2010 1,663,725,149

Total other component of equity 38,549,670 38,549,670 (3,397,523) 35,152,147 41,947,193 41,947,193 (3,397,523) (3,397,523) 38,549,670

Consolidated Owners of the parent Other components of equity other comprehensive Retained earnings income

Statements of Changes in Shareholdersâ&#x20AC;&#x2122; Equity For the years ended 31 December 2011 and 2010

Eastern Water Resources Development and Management Public Company Limited

Total NonTotal owners of controlling Shareholdersâ&#x20AC;&#x2122; the parent interests equity 6,614,135,676 2,785,097 6,616,920,773 (29,312,023) (29,312,023) 6,584,823,653 2,785,097 6,587,608,750 (40,333,795) (40,333,795) 1,004,151,239 474,200 1,004,625,439 (615,559,435) (140,019) (615,699,454) 6,933,081,662 3,119,278 6,936,200,940 6,341,175,011 2,540,832 6,343,715,843 (32,507,695) (32,507,695) 6,308,667,316 2,540,832 6,311,208,148 905,156,092 384,284 905,540,376 3,195,672 3,195,672 908,351,764 384,284 908,736,048 (632,195,427) (140,019) (632,335,446) 6,584,823,653 2,785,097 6,587,608,750

(Unit: Baht)

Eastern Water Resources Development and Management PLC. |

Premium on share capital 2,138,522,279 2,138,522,279 2,138,522,279 2,138,522,279 2,138,522,279 2,138,522,279

The accompanying notes on page 68 to 122 are an integral part of the financial statements.

Notes Opening balance as at 31 December 2010 - as previously reported Retrospective adjustment 2.2 b) Opening balance as at 31 December 2010 - as restated Brought forward adjustment 2.2 b) Comprehensive income for the year Dividend paid 31 Closing balance as at 31 December 2011 Opening balance as at 31 December 2009 - as previously reported Retrospective adjustment 2.2 b) Opening balance as at 31 December 2009 - as restated Comprehensive income for the year - as previously reported 2.2 b) Retrospective adjustment Comprehensive income for the year - as restated Dividend paid 31 Closing balance as at 31 December 2010

Issued and paid-up share capital 1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149

Company Owners of the parent Other components of equity comprehensive income Retained earnings Assets transferred Total Appropriated from owners of -legal reserve Unappropriated customers-net the parent 166,500,000 2,222,495,538 38,549,670 38,549,670 7,760,749 166,500,000 2,230,256,287 38,549,670 38,549,670 (24,208,540) 908,704,337 (3,397,523) (3,397,523) (615,559,435) 166,500,000 2,499,192,649 35,152,147 35,152,147 166,500,000 2,027,591,046 41,947,193 41,947,193 7,409,941 166,500,000 2,035,000,987 41,947,193 41,947,193 827,099,919 (3,397,523) (3,397,523) 350,808 827,450,727 (3,397,523) (3,397,523) (632,195,427) 166,500,000 2,230,256,287 38,549,670 38,549,670

Statements of Changes in Shareholdersâ&#x20AC;&#x2122; Equity (continued) For the years ended 31 December 2011 and 2010

Eastern Water Resources Development and Management Public Company Limited

Total Shareholdersâ&#x20AC;&#x2122; equity 6,229,792,636 7,760,749 6,237,553,385 (24,208,540) 905,306,814 (615,559,435) 6,503,092,224 6,038,285,667 7,409,941 6,045,695,608 823,702,396 350,808 824,053,204 (632,195,427) 6,237,553,385

(Unit: Baht)

Eastern Water Resources Development and Management Public Company Limited Statements of Cash Flows For the years ended 31 December 2011 and 2010

Notes Cash flows from operating activities Profit before income tax Adjustments to reconcile profit before income tax to net cash provided by (paid from) operating activities Losses on impairment of investment in a subsidiary (reversal) Losses on impairment of assets Allowance for diminution in value of inventories (reversal) Written off of inventories Allowance for doubtful accounts (reversal) Depreciation Amortisation of deferred concession rights acquisition costs Amortisation of rights Income from amortisation of assets transferred from customers Losses on disposals/written off of fixed assets Losses on written off of assets under concession contracts Employee benefit obligations Dividend income Interest income Interest expenses and amortisation of deferred interest under finance lease agreements Income from operating activities before changes in operating assets and liabilities (Increase) decrease in operating assets Trade and other receivables Water loss treatment service income receivable-related party Inventories Project assets Other current assets Other non-current assets Increase (decrease)in operating liabilities Trade accounts payable Accrued expenses Other current liabilities Other non-current liabilities

(Unit: Baht)

Consolidated (Restated) 2011 2010

Company (Restated) 2011 2010

1,432,717,251 1,290,684,391 1,292,306,722 1,152,871,315

14, 15, 16 17 18

552,154 (2,198,695) 915,153 320,645,485 27,017,004 8,348,738 (3,397,523)

1,645,003 (54,643) 11,251 (21,528) 369,732,485 26,743,488 8,348,738 (3,397,523)

272,154 (2,198,695) 915,153 269,049,223 (3,397,523)

(172,166) 245,003 (54,643) 11,251 (21,528) 319,502,917 (3,397,523)

4,619,303 11,467,015 4,547,338 12,045,528 143,994 514,395 7,983,486 3,733,763 (18,245,535) (17,267,095) (43,388,533) (45,827,091) (12,352,781) (3,161,482) (8,733,888) (2,283,469) 76,951,308 88,472,875 51,036,155 66,441,971 1,843,699,342 1,773,717,370 1,564,141,869 1,499,361,565 (43,442,196) 509,066 (57,806,192) 6,479,385 10,011,995 1,680,416 (286,698) 646,486,465 (17,205,807) (51,503,996) (22,890,595) (154,501,889) (16,166,906) (149,192,713) (31,891,544) (36,500,563) 3,325,074 44,635,429

35,315,837 32,884,838 8,357,815 (16,093,937) (5,703,388) 2,614,079 65,619,342 43,801,663

9,788,481 646,486,465 (9,100,871) 493,320 (6,479,987) 8,701,816 2,708,060 59,656,556

Cash provided by operating activities Income tax paid

1,616,277,647 2,466,356,902 1,397,459,012 2,211,615,405 (363,508,201) (388,220,888) (312,850,139) (323,177,347)

Net cash provided by operating activities

1,252,769,446 2,078,136,014 1,084,608,873 1,888,438,058

The accompanying notes on page 68 to 122 are an integral part of the financial statements. 66

| Annual Report 2011

Eastern Water Resources Development and Management Public Company Limited Statements of cash flows (continued) For the years ended 31 December 2011 and 2010

Notes Cash flows from investing activities Purchase of short-term investments Purchase of non-current assets held for sale Restricted bank deposits Dividend received from a subsidiary and a related party Purchases of long-term investments Interest received Purchases of investment property Proceeds from disposals of property, plant and equipment Purchases of property, plant and equipment Purchase of assets under concession contracts Purchase of deferred concession rights acquisition costs Purchase of intangible assets

Net cash used in investing activities Cash flows from financing activities Proceeds from short-term loans from financial institutions Payment on short-term loans from financial institutions Proceeds from long-term loans from financial institutions Payment on long-term loans from financial institutions Payment on liabilities under finance lease agreements Interest paid Interest paid for fund borrowed specifically to acquire qualifying assets Dividends paid to Groupâ&#x20AC;&#x2122;s shareholders

(Unit: Baht) Company (Restated) 2011 2010

(95,000,000) (50,000,000) (122,090) 2,076,000 7,000,000 2,076,000 18,245,535 17,267,095 43,388,533 (6,082,800) 11,899,533 3,131,290 8,832,502 (317,849) (6,354,389) (346,110) 215,221 1,364,493 161,100 (1,058,003,556) (1,268,069,420) (1,036,628,687) (86,816,904) (39,741,703) (30,817,754) (7,115,986) (19,229,750) (19,229,750)

7,000,000 63,866,087 (6,082,800) 2,253,276 (6,793,265) 78,270 (1,218,916,196) -

(1,257,871,614) (1,298,601,420) (1,051,746,412)

(1,158,594,628)

24 24

33,000,000 (552,587,913) 1,488,000,000 (547,792,060) (2,418,545) (76,809,071)

183,587,913 278,000,000 (187,755,474) (3,253,743) (89,678,895)

(552,587,913) 1,235,000,000 (266,500,000) (2,418,545) (50,938,920)

552,587,913 (369,000,000) 204,000,000 (100,000,000) (2,752,620) (67,678,070)

(35,058,957) (615,425,972)

(9,783,916) (632,335,446)

(35,058,957) (615,285,953)

(9,783,916) (632,195,427)

Net cash used in financing activities

(309,092,518)

(461,219,561)

(287,790,288)

(424,822,120)

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year

(314,194,686) 442,884,324

318,315,033 124,569,291

(254,927,827) 328,370,034

305,021,310 23,348,724

128,689,638

442,884,324

73,442,207

328,370,034

32,808,214

79,421,371

47,538,024

72,801,447

Cash and cash equivalents at ending of the year Supplemental cash flow information Non-cash related transactions: Net increase in acquisition assets on credit Reclassification property, plant and equipment to assets held for sale Reclassification assets under concession contracts to assets held for sale

Consolidated (Restated) 2011 2010

1,267,938

33,547,474

The accompanying notes on page 68 to 122 are an integral part of the financial statements. Eastern Water Resources Development and Management PLC. |

Notes to consolidated and company financial statements

Eastern Water Resources Development and Management Public Company Limited Notes to consolidated and company financial statements For the years ended 31 December 2011 and 2010

General information

Eastern Water Resources Development and Management Public Company Limited (“the Company”) is a public limited company incorporated and resident in Thailand. The address of the Company’s registered officeis as follows: 23rd - 26th Floors, East Water Building, No. 1 Soi Vipavadeerangsit 5, Vipavadeerangsit Road, Jomphol Sub-district, Chatujak District, Bangkok. The Company is listed on the Stock Exchange of Thailand. For reporting purposes, the Company and its subsidiaries are referred to as the Group. The principal business operations of the Group are development and management of the major water distribution pipeline systems in the Eastern Seaboard area of Thailand, supply of raw water, produce and supply of tap water, waterworks management, and engineering services. These consolidated and company financial statements were authorised by the Board of Directors on 20 February 2012.

Accounting policies

2.1

The principal accounting policies adopted in the preparation of these financial statements are set out below.

Basis of preparation of financial statements The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Professions Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act. The consolidated and company financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3. Comparative figures have been adjusted to conform with the minimum requirements announced by the Department of Business Development Regulation in relation to the format of Financial Statements B.E. 2554. It effects for the periods beginning on or after 1 January 2012. An English version of the consolidated and company financial statements has been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail. | Annual Report 2011

The consolidated financial statements include the financial statements for the years ended 31 December 2011 and 2010 of the Company and the following subsidiaries: Companyâ&#x20AC;&#x2122;s name Subsidiaries held directly by the Company Universal Utilities Company Limite

Subsidiaries held by Universal Utilities Company Limited Chachoengsao Water Supply Company Limited Bangpakong Water Supply Company Limited Nakornsawan Water Supply Company Limited 2.2

Nature of business

Country of Percentage of incorporation Shareholding 2011 2010 % %

Production and supply of tap water, waste water treatment and sale of related tools,equipment and chemical products, and investment in three tap water supply companies

Thailand

100

Production and supply of tap water

Thailand Thailand Thailand

99 99 100

Production and supply of tap water Production and supply of tap water

New accounting standards, new financial reporting standards, new interpretation, amendments to accounting standards and accounting framework a) New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards Effective for the periods beginning on or after 1 January 2011 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 16 (Revised 2009) Property, Plant and Equipment TAS 17 (Revised 2009) Leases TAS 18 (Revised 2009) Revenue TAS 19 Employee Benefits 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 TAS 34 (Revised 2009) Interim Financial Reporting TAS 36 (Revised 2009) Impairment of Assets TAS 37 (Revised 2009) Provisions, Contingent Liabilities and Contingent Assets Eastern Water Resources Development and Management PLC. |

TAS 38 (Revised 2009) Intangible Assets TAS 40 (Revised 2009) Investment Property TFRS 2 Share-based Payment TFRS 3 (Revised 2009) Business Combinations TFRS 5 (Revised 2009) Non-current Assets Held for Sale and Discontinued Operations TFRS 6 Exploration for and Evaluation of Mineral Resources TFRIC 15 Agreements for the Construction of Real Estate TSIC 31 Revenue - Barter Transactions Involving Advertising Services Effective for the periods beginning on or after 1 January 2013 TAS 12 Income taxes 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 TSIC 10 Government Assistance - No Specific Relation to Operating Activities TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders The new accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards have impact on the financial statements as follows: TAS 1 (Revised 2009), the revised standard will prohibit the presentation of items of income and expenses in the statement of changes in equity, requiring â&#x20AC;&#x2DC;non-owner changes in equityâ&#x20AC;&#x2122; to be presented separately from owner changes in equity. Entities can choose to present the statement of comprehensive income in one statement (the statement of comprehensive income) or two statements (the statement of income and statement of comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated statement of financial position as at the beginning comparative period in addition to the current requirement to present statement of financial position at the end of the current period and comparative period. However, for the financial statements which period beginning on or after 1 January 2011 and are the first period apply this standard, an entity can choose to present statement of financial position only two periods without the statement of financial position as at the beginning comparative period. The Group has adopted this standard from 1 January 2011. The Group chooses to present a single statement of comprehensive income. TAS 12 deals with taxes on income, comprising current tax and deferred tax. Current tax assets and liabilities are measured at the amount expected to be recovered from or be paid to the taxation authorities, using tax rates and tax law that have been enacted or substantively enacted by the end of the reporting period. Deferred taxes are measured by based on the temporary difference between the tax base of an asset or liability and its carrying amount in the financial statements and using the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and tax law that have been enacted or substantively enacted by the end of the reporting period. This accounting standard is mandatory for the accounting periods beginning on or after 1 January 2013 but the Group early adopted this standard from 1 January 2011 retrospectively. The effect of adoption this accounting standard is mentioned in Note 2.2 (b) 70

| Annual Report 2011

TAS 16 (Revised 2009), the revised standard requires the entity to include in cost of PPE, an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, when the entity has obligation to do so. For an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item, an entity is required to depreciate the item separately. The revised standard also requires an entity to review useful life, residual value and depreciation method at least at each financial year-end. The Group has adopted this standard since 1 January 2011 which had impacted on component accounting of significant items and useful life reviewing. The Group applied prospective adjustment which resulted to a decrease in depreciation expenses for the year ended 31 December 2011 of Baht 48.3 million and Baht 50.7 million in consolidated financial statements and company financial statements respectively. The net profit was changed by the same amount. TAS 19 deal with accounting for employee benefit. The standard classifies employee benefit into 4 categories: a) short-term employee benefits b) post-employment benefits including defined contribution plan and defined benefit plan c) other long-term employee benefits and d) termination benefits. The standard requires the entity to measure the defined benefit plan and other long-term employee benefits by using the Projected Unit Credit method (PUC). An entity can choose to recognise any actuarial gain or loss for defined benefit plan either in other comprehensive income or profit and loss. Actuarial gain or loss for other long-term employee benefit shall be recognised in profit and loss. The Group has adopted this standard since 1 January 2011 by recognised employee benefit obligations against retained earnings at that date and chosen to recognise actuarial gain or loss for defined benefit plan in profit and loss by straight line method over average remaining service years of employees in the plan. The effect of adoption this accounting standard is mentioned in Note 2.2 (b). TAS 23 (Revised 2009), the revised standard requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. The Group has adopted this standard since 1 January 2011 but it is not expected to have any impact on the Groupâ&#x20AC;&#x2122;s financial statement because the Group already apply capitalised model. TAS 24 (Revised 2009), the definition of â&#x20AC;&#x2DC;related partyâ&#x20AC;&#x2122; has been expanded to include parties with joint control over the entity, joint venture in which the entity is a venturer and post-employment benefit plan for the benefit of employees of an entity. The Group has adopted the revised standard from 1 January 2011 which may impact only to the disclosure of related parties information in the notes to the financial statements. TAS 40 (Revised 2009), the standard has specific presentation and measurement requirements for investment property. The entity has to present an investment property separately in the statement of financial position. The entity can choose to measure it using either the cost model or the fair value model. Under the fair value model, any changes in fair value are recognised in profit or loss. The Group has adopted this accounting standard since 1 January 2011. The Group applied the cost model for the measurement and reclassification of investment property from property, plant and equipment category and discloses fair value in the note to financial statement. The effect of adoption this accounting standard is mentioned in Note 2.2 (b).

Eastern Water Resources Development and Management PLC. |

b) The effect of adoption new accounting standard and amendments to accounting standards The effects of the adoption of the above standards to the statement of financial position and the statement of comprehensive income previously presented are as following: (Unit : Baht)

Consolidated Statement of financial position as at 31 December 2010 Increase in investment property Decrease in property, plant and equipment Increase in deferred tax assets Increase in deferred tax liabilities Shareholders’ equity Increase (decrease) in unappropriated retained earnings as at 1 January 2010 Increase (decrease) in unappropriated retained earnings as at 31 December 2010 Statement of financial position as at 1 January 2011 Increase in employee benefit obligations Increase in deferred tax assets Shareholders’ equity Decrease in unappropriated retained earnings as at 1 January 2011 Statement of comprehensive income for the year ended 31 December 2010 Increase in income tax expense Increase in total comprehensive income Increase in basic earnings per share (Baht) 2.3 72

Company

230,465,799 244,736,753 (230,465,799) (244,736,753) 13,972,904 7,875,944 43,284,927 115,196 (32,507,695)

7,409,941

(29,312,023)

7,760,749

56,974,869 16,641,074

33,938,791 9,730,251

(40,333,795)

(24,208,540)

(3,195,672) 3,195,672 0.0017

(350,808) 350,808 0.0003

Group Accounting - Investment in subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment. | Annual Report 2011

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss. Intercompany transactions, balances and unrealised gains or loss on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. A list of the Group’s principal subsidiaries is set out in Note 12.

2.4

Foreign currency translation Items included in the financial statements of each entity in the Group are measured using Thai Baht. The consolidated financial statements are presented in Thai Baht. Foreign currency transactions are translated into Thai Baht using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated to Thai Baht at the exchange rate prevailing at the statement of financial position date. Gains and losses resulting from the settlement of foreign currency transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the profit or loss.

2.5

Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits held at call with banks and fixed deposit with are held to maturity three months or less, and other short-term highly liquid investments with maturities of three months or less from the date of acquisition.

2.6

Trade accounts receivable/water loss treatment service income receivable Trade accounts receivable and water loss treatment service income receivable are carried at the original invoice amount and subsequently measured at the remaining amount less any allowance for doubtful receivables based on a review of all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written off during the year in which they are identified and recognised in profit or loss within administrative expense. The Group record revenue that has been recognised as revenue but not yet billed to the customers under “Unbilled receivables” and “Unbilled water loss treatment service income receivable” which have been included in trade accounts receivable and water loss treatment service income receivable in the statement of financial position.

2.7

Inventories Inventories are stated at the lower of cost or net realisable value. Cost was previously determined by the first-in, first-out method and was changed to moving average basis from 1 September 2011. The comparative financial statements have not been restated because the impact of this change is not material. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charges, less all attributable discounts. Net realisable value is the estimate of the selling price in the ordinary course of business, less applicable variable selling expenses. Allowance is made, where necessary, for obsolete, slow moving and defective inventories. Eastern Water Resources Development and Management PLC. |

2.8

Investments Investments other than investments in subsidiaries, associates and interests in joint ventures are classified into the following four categories: (1) trading investments; (2) held-to-maturity investments; (3) available-for-sale investments; and (4) general investments. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis.

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

Investments that are acquired principally for the purpose of generating a profit from short-term fluctuations in price are classified as trading investments and included in current assets. Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity and are included in non-current assets, except for maturities within 12 months from the statement of financial position date which are classified as current assets. Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale; and are included in noncurrent assets unless management has expressed the intention of holding the investment for less than 12 months from the statement of financial position date or unless they will need to be sold to raise operating capital, in which case they are included in current assets. Investments in non-marketable equity securities are classified as general investments.

All categories of investment are initially recognised at cost, which is equal to the fair value of consideration paid plus transaction cost. Currently, the Group has investments with fixed maturity and investments in non-marketable equity. Held-to-maturity investments are carried at amortised cost using the effective yield method less impairment loss. Investment in non-marketable equity security held as other investment is determined at cost less allowance for impairment. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the profit or loss.

2.9

Non-current assets held-for-sale Non-current assets are classified as assets held-for-sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of the carrying amount and fair value less cost to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use.

2.10

Investment property Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property. Investment property is measured initially at its cost, including related transaction costs and borrowing costs. Borrowing costs are incurred for the purpose of acquiring, constructing or producing a qualifying investment

| Annual Report 2011

property are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is actively underway and cease once the asset is substantially complete, or suspended if the development of the asset is suspended. After initial recognition, investment property is carried at cost less any accumulated depreciation and any accumulated impairment losses. Land is not depreciated. Depreciation on other investment properties is calculated using the straight line method to allocate their cost to their residual values over their estimated useful lives, as follows: Building 20 and 35 years Building improvement 10 years Subsequent expenditure is capitalised to the assetâ&#x20AC;&#x2122;s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. 2.11

Property, plant and equipment Land is stated at cost less allowance for impairment (if any). Plant and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any) Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assetâ&#x20AC;&#x2122;s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost to their residual values over their estimated useful lives. Since 1 January 2011, the Group has depreciated the significant component of each item separately and changed accounting estimate by reviewing useful lives of property, plant and equipment as the following:

Pumping plants Building Leasehold and building improvements Machinery and equipment - Water pool, Pipeline and related equipment - Water pump - SCADA, Fiber Optic - Other machineries and equipment Office equipment Vehicles

Before 2011

Since 1 January 2011

33 years 10, 20, 25 years

20, 35 years 10, 20, 35 years

5, 10 years

5, 10 years but not more than leased term

10, 20 years 10 years 5, 10 years 5, 10 years 3, 5 years 5 years

40 years 30 years 5, 15 years 5, 10 years 3, 5 years 5 years

Eastern Water Resources Development and Management PLC. |

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset’s carrying amount is written-down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other (losses)/gains – net’ in profit or loss. Interest costs on borrowings to finance the construction of property, plant and equipment are capitalised as part of cost of the asset, during the period of time required to complete and prepare the property for its intended use. The borrowing costs include interest on short-term and long-term borrowings, related taxes and amortisation of discounts or premiums relating to borrowings. All other borrowing costs are recorded as expense in profit and loss.

2.12 Assets under concession contracts Assets under concession contracts are stated at cost less accumulated depreciation and allowance for impairment (if any). Depreciation of assets under concession contracts has been included in profit and loss which has been computed using the straight-line method over estimated useful life but not exceed the concession period of 15, 20 and 25 years, 2.13 Deferred concession rights acquisition costs Concession rights acquisition costs consist of expenses incurred directly in relation to obtaining the concession contracts from the Provincial Waterworks Authority. Deferred concession rights acquisition costs are stated at cost less accumulated amortisation and allowance for impairment (if any). Amortisation of deferred concession rights acquisition costs, which has been computed using the straight-line method over the concession periods of 27 and 30 years, has been included in profit and loss. 2.14 Intangible assets 2.14.1 Rights to operate the businesses under concession Right to operate the subsidiaries’ businesses under concession awarded to the subsidiaries by the government agency or entity over a limited a concession period. Rights are stated at cost less accumulated amortisation and allowance for impairment (if any) and are amortised using the straight line method over a period of 27 years, being the concession period awarded to the subsidiaries to carry out their business operation. The carrying amounts of intangible assets are written down when there is an impairment. 2.14.2 Computer software Expenditure on acquired computer software is capitalised on the basis of the costs incurred to acquire and amortised using the straight-line method over its estimated useful lives of 10 years. 2.15 76

Impairment of assets Assets that have an indefinite useful life, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount which is the higher of an asset’s

| Annual Report 2011

fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.16 Current and deferred income taxes The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of reporting period in the countries where the companyâ&#x20AC;&#x2122;s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised, using the liability method, on temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 2.17

Borrowings Borrowings are recognised initially at the fair value of proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between proceeds (net of transaction costs) and the redemption value is recognised in profit and loss over the period of the borrowings. Interest expenses is recognised as expenses on an accrual basis by using interest rate specified in the contracts. Borrowings are classified as current liabilities unless the Group has right to defer settlement of the liability for at least 12 months after the end of reporting date.

2.18 Leases

Where a Group company is the lessee Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease. Leases of property, plant or equipment which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other long-term Eastern Water Resources Development and Management PLC. |

payables. The interest element of the finance cost is charged to the statement of income over the lease period so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant or equipment acquired under finance leases is depreciated over the shorter period of the useful life of the asset or the lease term.

Where a Group company is the lessor Assets leased out under operating leases are included in property, plant and equipment and investment property in the statement of financial position. They are depreciated over their expected useful lives on a basis consistent with other similar property, plant and equipment owned by the Group. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term. 2.19 Employee Benefits The Group has post-employment benefits both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

• Defined contribution plan Provident fund The Group operates a provident fund, being a defined contribution plan, the assets for which are held in a separate trust fund. The provident fund is funded by payments from employees and by the Group. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

• Defined benefit plan Retirement benefit Under Labour Laws applicable in Thailand and Group’s employment policy, the severance pay will be at the rate according to salary and number of years of service which will happen in the future. The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets, together with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using government bond interest rate that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related liability. Gain and loss from actuarial estimation for employee benefit recognised in profit and loss by using straight line method over average of remaining service years of employees in the plan.

2.20 Provisions Provisions, excluding the provisions for employee benefits, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a 78

| Annual Report 2011

separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.

2.21 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and service after eliminating sales within the Group. The revenue recognition policy of each type of revenue, as follows:

(a) Sales Sales of goods are recognised as revenue when significant risks and reward of ownership of goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting goods returns and discounts. (b) Rental and service income Rental income is recognised as revenue over the rental period at the rate stipulated in the contracts. Service income is recognised as revenue by the amount excluding value added tax when services have been rendered with reference to the stage of completion. (c) Revenue from pipeline installation project and water loss reduction project Revenue from water pipeline installation project and water loss reduction project are recognised as revenue under the percentage of completion method. The expected loss on unprofitable contracts is recognised as soon as such loss can be foreseen. (d) Interest and dividend income Interest income is recognised on an accrual basis. Dividend income is recognised when rights to receive dividends are established. (e) Other income Other income is recognised on an accrual basis.

2.22 Dividends distribution Dividend distribution to the Company’s shareholders is recorded in the Group’s financial statements in the period in which they are approved by the Company’s shareholders or the Board of Directors in case of interim dividend. 2.23 Segment reporting Segment information is presented by business segment of the Group’s operations.

3. Critical accounting estimates, judgments and assumptions

Estimates, judgments and assumptions are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Significant accounting judgments and estimates are as follows:

3.1 Value in use Value in use is the present value of the future cash flows expected to be derived from assets, discounted by discount rates, determined by the management of the Group. The cash flow projections based on financial Eastern Water Resources Development and Management PLC. |

forecasts for the remaining useful lives of assets or concession periods and approved by the management of the Group are calculated based on estimated growth rates, which do not exceed their capacity and customersâ&#x20AC;&#x2122; usage demand. Key assumptions used for value-in-use calculations are growth rates, expense to revenue ratios and gross margin rate. Management determines such rates based on their past performance, their expectations for market development, and business plan. The discount rates used are pre-tax and reflect specific risks relating to the business after considered the remaining useful lives. The value derived from the afore-mentioned method may vary due to changes in revenue structure, cost structure, discount rate, industrial conditions and economic conditions.

3.2 Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. 3.3

Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

3.4 Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and salvage values of the plant and equipment and to review estimate useful lives and salvage values when there are any changes or at least at the end of each reporting period. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying cost. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. â&#x20AC;&#x192; 3.5 Employee Benefits - defined benefit plan The present value of defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for obligations include inflation rate, future salary increases and the discount rate. Any changes in these assumptions will have an impact on the carrying amount of defined benefit obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit obligations. In determining the appropriate discount rate, the Group considers the appropriated rate by using government bond interest rate that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related liability. The key assumptions for defined benefit obligations are based in part on current market conditions is disclosed in Note 26. 3.6 80

Provision and contingent liabilities The Group has contingent liabilities as a regarding of litigation. The Groupâ&#x20AC;&#x2122;s management has used judgment to assess of the results of the litigation and believes that no significant loss will result apart from provision for liabilities which already recorded at each reporting date.

| Annual Report 2011

In addition, the Group has an uncertainty regarding to a deal for the Company to rent/manage the 2 pipeline connecting projects which disclosed the information in Note 38.5. Based on the Groupâ&#x20AC;&#x2122;s management judgement, the projected compensation was recorded in financial statements using the best estimation of compensation rate computing from the current information.

3.7

Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments. The critical fair value estimation of financial instruments is long-term loans from financial institutions. The Group estimates the fair value by calculating the present value of future principal and interest payment using the market interest rate for discounting

4. Capital risk management

The Groupâ&#x20AC;&#x2122;s objectives when managing capital are to safeguard the Groupâ&#x20AC;&#x2122;s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

5. Segment information

The principal business operations of the Group are supply of raw water, produce and supply of tap water, waterworks management, and engineering services. These business operations are conducted only in one geographical area, which is Thailand. The business segment information for the years ended31 December 2011 and 2010 are summarised as follows:

Eastern Water Resources Development and Management PLC. |

5.1 Operating results by business segment

Revenue Revenue from third parties Revenue from inter-segment Total revenue Cost of sales and services Operating profit Segment operating profit Unallocated revenue and expenses Other income Selling expenses

(Unit: Bahtâ&#x20AC;&#x2122;000)

Consolidated 2011 Sales Service income Supply of Supply of Waterworks Engineering raw water tap water management services business business business

Others

Elimination

Total

2,261,016 120,752 2,381,768 (811,953)

765,849 765,849 (521,256)

58,834 245,482 304,316 (282,691)

102,180 102,180 (91,673)

62,504 4,090 66,594 (59,488)

(370,324) (370,324) 369,836

3,250,383 3,250,383 (1,397,225)

1,569,815

244,593

21,625

10,507

7,106

(488)

1,853,158 59,652 (49,513) (352,104) (78,476) (424,694) 1,008,023

Administrative expenses and other expenses

Finance costs Income tax Net profit

Sales Supply of raw Supply of tap water water business business Revenue Revenue from third parties Revenue from inter-segment

2,117,502 110,903

Total revenue Cost of sales and services

2,228,405 (853,714)

Operating profit Segment operating profit Unallocated revenue and expenses Other income Selling expenses Administrative expenses and other expenses Finance costs Income tax Net profit 82

| Annual Report 2011

1,374,691

716,233 -

Other

Consolidated 2010 Service income Waterworks management Engineering business services Others

1,567,290 -

44,867 242,768

107,689 -

79,709 4,389

716,233 1,567,290 (497,259) (1,507,455)

287,635 (254,502)

107,689 (94,094)

84,098 (80,878)

33,133

13,595

3,220

218,974

59,835

(Unit: Bahtâ&#x20AC;&#x2122;000) (Restated)

Elimination

Total

(358,060)

4,633,290 -

(358,060) 4,633,290 353,681 (2,934,221) (4,379)

1,699,069 41,508 (49,642) (310,444) (89,807) (378,551) 912,133

5.2 Asset information by business segment

Raw water distribution business Trade and other receivables Water loss treatment service income receivable Inventories Non-current assets classified as held-for-sale, net Investment property - net Property, plant and equipment - net Assets under concession contracts - net Deferred concession rights acquisition costs - net Intangible asset - net Unallocated assets and others Total assets

216,849

Consolidated 2011 Tap water Waterworks Unallocated distribution management Engineering assets and business business services others Elimination

Total

187,465

63,226

6,147

20,129

3,212

2,454

10,133 2,212

10,133 7,878

7,872,135 -

6,861 241,859

34,658 161,215 214,147

298 -

217,160 332,202 -

34,658 217,160 8,372,711 456,006

426,681 135,550 -

115,093 -

34,023 1,067,807

(510,810)

541,774 169,573 556,997

8,088,984

1,001,628

590,793

18,790

1,671,321

(587,044) 10,784,472

(76,234)

(Unit: Bahtâ&#x20AC;&#x2122;000)

417,582

(Unit: Bahtâ&#x20AC;&#x2122;000) (Restated) Raw water distribution business Trade and other receivables Water loss treatment service income receivable Inventories Investment property - net Property, plant and equipment - net Assets under concession contracts - net Deferred concession rights acquisition costs - net Intangible asset - net Unallocated assets and others Total assets

Consolidated 2010 Tap water Waterworks Engineering Unallocated distribution management services assets and Elimination business business others

Total

212,342

144,338

44,167

6,535

22,444

(54,771)

375,055

6,973,326 -

3,019 5,957 249,248

4,785 210,523 179,831

16,613 1,755 529 -

230,466 347,489 -

16,613 9,559 230,466 7,537,824 429,079

421,222 143,899 -

121,095 -

1,114,431

(514,671)

542,317 143,899 599,760

967,683

560,401

25,432

1,714,830

(569,442)

9,884,572

7,185,668

Eastern Water Resources Development and Management PLC. |

5.3 Sales of raw water by distribution networks 5.3.1 Sales volume of raw water classified by distribution networks 2011 Sales Volume Cubic Meters’000 Nong Pla Lai - Map Ta Pud Network Dok Krai - Map Ta Pud Network Chachoengsao - Chonburi Network Nong Pla Lai - Nong Khor Network Total

86,171 85,058 69,742 20,583 261,554

Company Sales Baht’000

2010 Sales Volume Cubic Meters’000

791,915 782,024 620,812 187,017 2,381,768

72,212 85,712 64,428 22,530 244,882

Sales Baht’000 663,627 787,341 573,725 203,713 2,228,406

Sales of raw water from Chachoengsao - Chonburi Network consisted of: (Unit: Baht’000)

2011 461,752 138,234 20,826 620,812

Nong Khor - Laem Chabang Network 1 Nong Khor - Laem Chabang Network 2 Chachoengsao Network Total

2011 416,820 109,850 47,055 573,725

5.3.2 Proportion of raw water sold to end users 2011 % 52 31 17 100

Industrial Estates Waterworks Authority Factories Total

6. Cash and cash equivalents Cash on hand Deposits with banks - current accounts - saving accounts - fixed accounts Securities under repurchase agreement

Company

| Annual Report 2011

Consolidated 2011 2010 625,000 525,000 64,154 7,000 72,998,798 145,300,055 1,686 2,052,269 55,000,000 295,000,000 128,689,638 442,884,324

Company

2011 % 51 32 17 100

(Unit: Baht) Company 2011 2010 180,000 80,000 34,000 4,000 18,226,521 31,233,765 1,686 2,052,269 55,000,000 295,000,000 73,442,207 328,370,034

As at 31 December 2011, the interest rate on saving deposits with banks was 0.50% - 0.875% per annum (2010: 0.50% per annum). The fixed deposits with banks have maturity date within 3 months and interest rate at 1.75% per annum (2010: 0.75% per annum). The securities under repurchase agreement have maturity date within 1 months and interest rate at 3.20 - 3.21% per annum (2010: 1.87-1.90% per annum).

7. Temporary investments Opening net book amount Additions Closing net book amount

Consolidated 2011 2010 95,000,000 95,000,000 -

(Unit: Baht) Company 2011 2010 50,000,000 50,000,000 -

As at 31 December 2011, the Company and subsidiary have temporary investments from fixed deposits with financial institutions that have maturity date more than 3 months but within 1 year and interest rate of 2.30% - 4.0% per annum.

8. Trade and other receivables

The detail of trade and other receivables as at 31 December 2011 and 2010 is as follows:

Trade receivables Receivables from others Prepayments Others

Consolidated 2011 2010 363,707,415 310,761,108 35,922,071 45,722,408 13,685,237 17,850,948 4,267,863 720,634 417,582,586 375,055,098

(Unit: Baht)

Company 2011 2010 279,939,061 226,877,314 2,326,093 2,200,408 10,941,223 10,784,398 4,267,417 720,634 297,473,794 240,582,754

As at 31 December 2011, receivable from other in the consolidated financial statements included accounts receivable between a subsidiary and a private company totaling Baht 35.3 million (2010: Baht 41.9 million), which related to the compensation and fine for the delayed construction of a tap water production system and the supply of water to the Provincial Waterworks Authority below the minimum requirement in accordance with sale and purchase agreement for tap water for Chonburi Province with the Provincial Waterworks Authority. This balance also included any support of the subsidiary to help the private company to produce tap water to meet the minimum requirement for Provincial Waterworks Authority. However, the subsidiary could off-set this accounts receivable balance with tap water cost that the subsidiary purchased on a monthly basis from the private company.

Eastern Water Resources Development and Management PLC. |

The detail of trade account receivables as at 31 December 2011 and 2010 is as follows: Consolidated 2011 2010

Trade accounts receivable - billed - Third parties - Related parties (Note 37.2) Total trade account receivable - billed Unbilled receivables - Third parties - Related parties (Note 37.2) Total unbilled receivables

2011

Company

87,351,659 156,930,257 244,281,916

95,338,834 184,600,227 279,939,061

87,231,819 139,645,495 226,877,314

257,227 75,629,651 75,886,878 363,707,415

66,479,192 66,479,192 310,761,108

279,939,061

226,877,314

Consolidated 2011 2010

Less provision for impairment of trade receivables

268,141,915 19,583,669 523,634 486,472 288,735,690 (915,153) 287,820,537

222,062,902 21,192,632 688,631 337,751 244,281,916 244,281,916

2011

Company

260,691,661 19,182,150 493,931 486,472 280,854,214 (915,153) 279,939,061

Consolidated 2011 2010 7,878,538 7,878,538

9,558,954 9,558,954

2011 -

(Unit: Baht) 2010

224,648,014 1,202,918 688,631 337,751 226,877,314 226,877,314

9. Inventories

Raw materials and supplies

2010

95,793,479 192,027,058 287,820,537

The age analysis of the trade accounts receivable-billed is as follows:

Within credit term Overdue below 3 months Overdue 3 - 6 months Overdue 6 - 12 months

(Unit: Baht)

Company

(Unit: Baht) 2010 -

10. Non-current assets held for sale 86

On 23 June 2011, the Groupâ&#x20AC;&#x2122;s management approved the sale of property, plant and equipment and assets under concession contracts for Kho Lan and Kho Srichang tap water projects of the subsidiary to two private companies totalling Baht 35.0 million. As a result, the subsidiary presented those assets which had a net book value of Baht 34.7 million as non-current assets held for sale. Currently, the transfer of the concession contract for Koh Lan is under consideration from Pattaya City Council and will then be submitted | Annual Report 2011

to the Ministry of Natural Resources and Environment for approval. The transfer of the concession contract for Koh Srichang was approved by Srichang City Council, but it is under consideration for approval by the Ministry of Natural Resources and Environment. The completion date for the transaction of both projects is expected by 2012.

Details of non-current assets held for sale are as follows:

Cost Less Accumulate depreciation Less Allowance for impairment Net book value

(Unit: Baht) Consolidated 2011 79,716,435 (26,588,933) (18,470,000) 34,657,502

11. Restricted bank deposits

As at 31 December 2010, the Company has pledged fixed deposit accounts with banks amounting to Baht 2.1million to secure bank guarantees obtained from local commercial banks on behalf of the Group as described in Note 38.4.

12. Investments in subsidiaries

As at 31 December 2011 and 2010, investments in subsidiaries which present in the separate financial statements are as follows:

Companyâ&#x20AC;&#x2122;s name Universal Utilities Company Limited

Total investment in subsidiaries

Company Paid-up share capital Ownership interest Investment value Dividends income 2011 2010 2011 2010 2011 2010 2011 2010 Million Nature of Country of Million Baht % % Baht Baht Baht Baht business incorporation Baht Produce and Supply of tap Thailand 510 510 100 100 510,000,000 510,000,000 25,142,998 28,560,000 water 510,000,000 510,000,000 25,142,998 28,560,000

Eastern Water Resources Development and Management PLC. |

Universal Utilities Company Limited have approved dividend payments as follows:

2011

Approved by

Dividend for the year 2010

Annual Generalmeeting of the shareholders on 30 March 2011

Interim dividend on operating results for six-month period ended 30 June 2011

Board of Directorâ&#x20AC;&#x2122;s meeting on 27 September 2011

2010 Interim dividend on operating results for the period as from 1 September 2009 to 31 December 2009 Interim dividend on operating results for the period as from 1 January 2010 to 30 June 2010

Total dividends Million Baht

Dividend per share Baht

12.90

0.253

30 September 2011

12.24 25.14

0.24

31 December 2011

Total dividends Baht

Approved by The 2009 Annual General Meeting of shareholders on 19 April 2010

Dividend per share Baht

Paid on

Paid on 30 April 2010

8.26

0.162

Board of Directorâ&#x20AC;&#x2122;s meeting on 28 September 2010 20.30

0.398

Since October 2010 to December 2010

28.56

13. Other long-term investments Number of shares 2011 2010 Shares Shares Opening net book amount Additions Closing net book amount

| Annual Report 2011

Consolidated and Company Ownership interest 2011 2010 % %

5,479,140 5,175,000 304,140 5,479,140 5,479,140

15.88 15.88

15.00 0.88 15.88

Investment value 2011 2010 Baht Baht 91,470,300 85,387,500 6,082,800 91,470,300 91,470,300

As at 31 December 2011 and 2010, the Company has long-term general investments which are investments in non-marketable equity security as follows: (Unit: Baht) Consolidated Company 2011 2010 2011 2010

Long-term investments General investments - Egcom Tara Company Limited Total long-term investments

91,470,300 91,470,300

Egcom Tara Company Limited

The Company had a long-term investment in equity securities of Egcom Tara Company Limited, a related company, which operation is to generate tap water for sale solely to the Provincial Waterworks Authority. In 2011, Egcom Tara Company Limited paid dividend to the Company amount of Baht 18.2 million (2010: Baht 17.2 million).

Eastern Water Resources Development and Management PLC. |

14. Investment property - net

Land

Consolidated Building and building improvement

Total

At 1 January 2010 Cost Less Accumulated depreciation Net book amount

23,840,000 23,840,000

228,368,666 (17,677,139) 210,691,527

252,208,666 (17,677,139) 234,531,527

For the year ended 31 December 2010 Opening net book amount Additions Depreciation charge Closing net book amount

23,840,000 23,840,000

210,691,527 6,354,389 (10,420,117) 206,625,799

234,531,527 6,354,389 (10,420,117) 230,465,799

At 31 December 2010 Cost Less Accumulated depreciation Net book amount

23,840,000 23,840,000

234,723,055 (28,097,256) 206,625,799

258,563,055 (28,097,256) 230,465,799

For the year ended 31 December 2011 Opening net book amount Additions Reclassification Write-off , net Depreciation charge Closing net book amount

23,840,000 (4,840,000) 19,000,000

206,625,799 379,688 (61,839) (8,783,509) 198,160,139

230,465,799 379,688 (4,840,000) (61,839) (8,783,509) 217,160,139

At 31 December 2011 Cost Less Accumulated depreciation Net book amount Fair value

19,000,000 19,000,000 15,200,000

235,040,904 (36,880,765) 198,160,139 207,555,000

254,040,904 (36,880,765) 217,160,139 222,755,000

(Unit: Baht)

Depreciation expense of Baht 8.8 million (2010: Baht 10.4 million) was included in administrative expenses.

| Annual Report 2011

(Unit: Baht) Company Land

Building and building improvement

Total

At 1 January 2010 Cost Less Accumulated depreciation Net book amount

23,840,000 23,840,000

244,141,329 (18,898,041) 225,243,288

267,981,329 (18,898,041) 249,083,288

For the year ended 31 December 2010 Opening net book amount Additions Depreciation charge Closing net book amount

23,840,000 23,840,000

225,243,288 6,793,265 (11,139,800) 220,896,753

249,083,288 6,793,265 (11,139,800) 244,736,753

At 31 December 2010 Cost Less Accumulated depreciation Net book amount

23,840,000 23,840,000

250,934,594 (30,037,841) 220,896,753

274,774,594 (30,037,841) 244,736,753

For the year ended 31 December 2011 Opening net book amount Additions Reclassification Write-off, net Depreciation charge Closing net book amount

23,840,000 (4,840,000) 19,000,000

220,896,753 405,911 (66,108) (9,390,156) 211,846,400

244,736,753 405,911 (4,840,000) (66,108) (9,390,156) 230,846,400

At 31 December 2011 Cost Less Accumulated depreciation Net book amount Fair value

19,000,000 19,000,000 15,200,000

251,274,397 (39,427,997) 211,846,400 221,890,132

270,274,397 (39,427,997) 230,846,400 237,090,132

Depreciation expense of Baht 9.4 million (2010: Baht 11.1 million) was included in administrative expenses.

Eastern Water Resources Development and Management PLC. |

The fair value was determined by independent professionally qualified valuer who hold a recognised relevant professional qualification and have recent experience in the locations and categories of the investment properties valued. Amounts recognised in profit and loss that are related to investment property are as follows: (Unit: Baht) Consolidated Company 2011 2010 2011 2010

Rental income Direct operating expense arise from investment property that generated rental income (Building and building improvement) Direct operating expense arise from investment property that did not generate rental income (Land)

57,221,146

50,250,714

62,030,710

55,298,233

(50,346,959)

(46,848,575)

(50,346,959)

(46,848,575)

(112,595) 6,761,592

(1,569,870) 1,832,269

(112,595) 11,571,156

(1,569,870) 6,879,788

15. Property, plant and equipment - net Land

(Unit: Baht) Vehicles

Construction in progress

Total

At 1 January 2010 Cost Less Accumulated depreciation Net book amount

343,816,281 533,004,672 (114,289,590) 343,816,281 418,715,082

503,526,116 (83,759,880) 419,766,236

161,874,768 6,153,279,590 300,589,278 (52,462,472) (1,148,495,208) (192,711,163) 109,412,296 5,004,784,382 107,878,115

8,333,819 (5,035,653) 3,298,166

For the year ended 31 December 2010 Opening net book amount Additions Transfer Disposal/write-off, net Depreciation charge Closing net book amount

343,816,281 21,380 5,537,491 349,375,152

419,766,236 8,309,328 2,308,483 (114,966) (22,479,455) 407,789,626

109,412,296 2,629,200 47,531,584 (17,538,359) 142,034,721

3,298,166 144,549,039 1,301,360,976 (166,156,409) (297,180) (3,370,152) (1,282,132) 1,718,854 1,276,383,454

At 31 December 2010 Cost Less Accumulated depreciation Net book amount

349,375,152 547,964,882 514,143,927 (131,104,175) (106,354,301) 349,375,152 416,860,707 407,789,626

212,035,552 6,236,803,845 316,200,208 (70,000,831) (1,374,596,639) (234,745,684) 142,034,721 4,862,207,206 81,454,524

349,375,152 53,998,810 191,312 4,840,000 -

416,860,707 632,000 10,774,749 -

407,789,626 49,000 145,649 (82,684)

142,034,721 2,017,233 15,530,970 (9,471)

4,862,207,206 14,348,147 102,935,336 (1,083,149) (3,416,951)

81,454,524 6,442,633 570,187 (16,376) (70,820)

1,718,854 1,276,383,454 1,043,951,652 (130,148,203) (874,053)

7,537,824,244 1,121,439,475 3,740,475 (4,453,979)

408,405,274

(15,968,822) 412,298,634

(19,787,827) 388,113,764

(200,712) (18,992,031) 140,380,710

(965,259) (182,984,159) 4,791,041,171

(101,965) (45,231,297) 43,046,886

(2) (1,607,262) 111,590 2,189,312,850

(1,267,938) (284,571,398) 8,372,710,879

For the year ended 31 December 2011 Opening net book amount Additions Transfer Reclassification Disposal/write-off, net Reclassify to non-current assets held for sale (Note 10) Depreciation charge Closing net book amount At 31 December 2011 Cost Less Accumulated depreciation Net book amount

Pumping plants

Consolidated Leasehold and building Machinery and Office Buildings improvements equipment equipment

| Annual Report 2011

418,715,082 14,960,210 (16,814,585) 416,860,707

408,405,274 559,371,631 514,255,892 (147,072,997) (126,142,128) 408,405,274 412,298,634 388,113,764

5,004,784,382 10,452,605 89,814,506 (14,597,074) (228,247,213) 4,862,207,206

107,878,115 14,240,779 6,004,135 (1,906,570) (44,761,935) 81,454,524

230,123,308 6,340,820,669 318,538,088 (89,742,598) (1,549,779,498) (275,491,202) 140,380,710 4,791,041,171 43,046,886

144,549,039 8,148,973,563 (1,596,753,966) 144,549,039 6,552,219,597 6,552,219,597 1,337,014,268 (20,285,942) (331,123,679) 7,537,824,244

5,494,263 1,276,383,454 9,458,401,283 (3,775,409) (1,920,577,039) 1,718,854 1,276,383,454 7,537,824,244

5,426,213 2,189,312,850 10,566,253,925 (5,314,623) (2,193,543,046) 111,590 2,189,312,850 8,372,710,879

Depreciation expense total of Baht 284.6 million (2010: Baht 331.1 million) has been charged in cost of goods sold, Baht 254.2 million (2010: Baht 300.6 million) and in administrative expense, Baht 30.4 million (2010: Baht 30.5 million). Land

At 1 January 2010 Cost Less Accumulated depreciation Net book amount

Pumping plant

Buildings

Company Machinery and Building improvements equipment

(Unit: Baht)

Office equipment

Vehicles

Construction in progress

Total

3,882,009 (1,668,340) 2,213,669

137,917,523 137,917,523

7,857,024,654 (1,507,042,272) 6,349,982,382

100,517,167 12,170,301 5,318,180 (1,835,450) (41,309,130) 74,861,068

2,213,669 137,917,523 1,285,116,084 (143,706,903) (3,370,152) (741,745) 1,471,924 1,275,956,552

6,349,982,382 1,315,669,141 (19,916,911) (308,363,117) 7,337,371,495 9,151,417,500 (1,814,046,005) 7,337,371,495

293,357,440 522,166,218 (110,935,018) 293,357,440 411,231,200

488,469,742 (82,650,132) 405,819,610

154,366,523 5,980,974,957 275,890,242 (49,616,635) (1,086,799,072) (175,373,075) 104,749,888 4,894,175,885 100,517,167

Opening net book amount Additions Transfer Disposal/write-off, net Depreciation charge Closing net book amount

293,357,440 21,380 5,537,491 298,916,311

405,819,610 7,972,929 2,308,483 (114,966) (21,838,827) 394,147,229

104,749,888 2,370,423 47,511,584 (16,639,807) 137,992,088

At 31 December 2010 Cost Less Accumulated depreciation Net book amount

298,916,311 537,126,428 498,751,154 (127,026,678) (104,603,925) 298,916,311 410,099,750 394,147,229

204,248,530 6,040,559,728 291,976,788 (66,256,442) (1,296,633,155) (217,115,720) 137,992,088 4,743,926,573 74,861,068

3,882,009 1,275,956,552 (2,410,085) 1,471,924 1,275,956,552

298,916,311 53,998,810

137,992,088 1,400,739 12,923,933 (9,471) (17,988,416) 134,318,873

1,471,924 (1,360,338) 111,586

For the year ended 31 December 2010

For the year ended 31 December 2011 Opening net book amount Additions Transfer Reclassification Disposal/write-off, net Depreciation charge Closing net book amount At 31 December 2011 Cost Less Accumulated depreciation Net book amount

4,840,000 357,755,121

411,231,200 14,960,210 (16,091,660) 410,099,750

410,099,750 632,000 10,774,749 (15,739,034) 405,767,465

394,147,229 49,000 145,649 (78,414) (19,263,869) 374,999,595

357,755,121 548,533,177 498,855,181 (142,765,712) (123,855,586) 357,755,121 405,767,465 374,999,595

4,894,175,885 8,018,024 68,070,955 (14,596,343) (211,741,948) 4,743,926,573

4,743,926,573 8,793,872 101,865,570 (3,412,079) (163,195,019) 4,687,978,917

74,861,068 5,740,495 14,400 (32,293) (42,112,391) 38,471,279

218,523,702 6,146,017,756 294,115,051 (84,204,829) (1,458,038,839) (255,643,772) 134,318,873 4,687,978,917 38,471,279

1,275,956,552 1,039,954,652 (125,724,301) (874,053) 2,189,312,850

7,337,371,495 1,110,569,568 4,840,000 (4,406,310) (259,659,067) 8,188,715,686

3,882,009 2,189,312,850 (3,770,423) 111,586 2,189,312,850

10,256,994,847 (2,068,279,161) 8,188,715,686

Depreciation expense total of Baht 259.7 million (2010: Baht 308.4 million) has been charged in cost of goods sold, Baht 231.2 million (2010: Baht 279.6 million) and in administrative expense, Baht 28.5 million (2010: Baht 28.8 million).

As at 31 December 2011, the costs of fully depreciation plant and equipment that are still in use of the Group and the Company amounted to Baht 459.3 million and Baht 431.8 million, respectively (2010: Baht 442.9 million and Baht 416.2 million, respectively). As at 31 December 2011, the Group and the Company had motor vehicles and computer under financial lease agreements with net book value amounting to Baht 4.7 million and Baht 4.7 million, respectively (2010: Baht 6.0 million and Baht 5.8 million, respectively). Borrowing costs of Baht 35.1 million (2010: Baht 9.8 million) arresting from financing specifically entered into a pipeline constructing project were capitalised during the year and are included in â&#x20AC;&#x153;Additionsâ&#x20AC;?.

Eastern Water Resources Development and Management PLC. |

16. Assets under concession contracts - net Consolidated

At 1 January 2010 Cost Less Accumulated depreciation Less Accumulated impairment Net book amount For the year ended 31 December 2010 Opening net book amount Additions Transfer Write-off, net Depreciation charge Impairment charge Closing net book amount At 31 December 2010 Cost Less Accumulated depreciation Less Accumulated impairment Net book amount

Assets under concession contracts

Construction in progress

501,652,886 (113,629,965) (16,790,000) 371,232,921

19,285,497 19,285,497

520,938,383 (113,629,965) (16,790,000) 390,518,418

371,232,921 10,692,140 35,396,159 (329,395) (28,188,689) (1,400,000) 387,403,136

19,285,497 57,971,823 (35,396,159) (185,000) 41,676,161

390,518,418 68,663,963 (514,395) (28,188,689) (1,400,000) 429,079,297

547,240,021 (141,646,885) (18,190,000) 387,403,136

41,676,161 41,676,161

588,916,182 (141,646,885) (18,190,000) 429,079,297

Consolidated

For the year ended 31 December 2011 Opening net book amount Additions Transfer Reclassify Write-off, net Reclassify to non-current assets held for sale (Note 10) Depreciation charge Closing net book amount At 31 December 2011 Cost Less Accumulated depreciation Net book amount 94

| Annual Report 2011

(Unit: Baht)

Total

(Unit: Baht)

Assets under concession contracts

Construction in progress

Total

387,403,136 11,560,330 76,562,000 1,099,525 (143,994) (33,547,474) (27,290,578) 415,642,945

41,676,161 75,248,412 (76,562,000) 40,362,573

429,079,297 86,808,742 1,099,525 (143,994) (33,547,474) (27,290,578) 456,005,518

562,783,636 (147,140,691) 415,642,945

40,362,573 40,362,573

603,146,209 (147,140,691) 456,005,518

The subsidiaries have committed to transfer assets under concession contracts to the Provincial waterworks authority at the end of concession periods.

Amortisation of Baht 27.3 million (2010: Baht 28.2 million) was included in the cost of sales-tap water and cost of services.

17. Deferred concession rights acquisition costs - net Consolidated

At 1 January 2010 Cost Less Accumulated amortisation Net book amount For the year ended 31 December 2010 Opening net book amount Additions Transfer Amortisation charge Closing net book amount At 31 December 2010 Cost Less Accumulated amortisation Net book amount For the year ended 31 December 2011 Opening net book amount Additions Amortisation charge Closing net book amount At 31 December 2011 Cost Less Accumulated amortisation Net book amount

Deferred concession rights Construction in acquisition costs progress

(Unit: Baht)

Total

503,107,942 (77,390,322) 425,717,620

131,034,653 131,034,653

634,142,595 (77,390,322) 556,752,273

425,717,620 132,486,334 (26,743,488) 531,460,466

131,034,653 12,309,025 (132,486,334) 10,857,344

556,752,273 12,309,025 (26,743,488) 542,317,810

635,594,276 (104,133,810) 531,460,466

10,857,344 10,857,344

646,451,620 (104,133,810) 542,317,810

531,460,466 (27,017,004) 504,443,462

10,857,344 26,472,946 37,330,290

542,317,810 26,472,946 (27,017,004) 541,773,752

635,594,276 (131,150,814) 504,443,462

37,330,290 37,330,290

672,924,566 (131,150,814) 541,773,752

Amortisation of Baht 27.0 million (2010: Baht 26.7 million) was included in the cost of sales-tap water and cost of services.

Eastern Water Resources Development and Management PLC. |

18. Intangible assets â&#x20AC;&#x201C; net

(Unit: Baht) Consolidated Rights to operate the business under concession

Computer software

At 1 January 2010 Cost Less Accumulated amortisation Net book amount

201,205,413 (48,957,571) 152,247,842

For the year ended 31 December 2010 Opening net book amount Amortisation charge Closing net book amount

152,247,842 (8,348,738) 143,899,104

At 31 December 2010 Cost Less Accumulated amortisation Net book amount

201,205,413 (57,306,309) 143,899,104

For the year ended 31 December 2011 Opening net book amount Additions Amortisation charge Closing net book amount

143,899,104 (8,348,738) 135,550,366

34,022,500 34,022,500

143,899,104 34,022,500 (8,348,738) 169,572,866

At 31 December 2011 Cost Less Accumulated amortisation Net book amount

201,205,413 (65,655,047) 135,550,366

34,022,500 34,022,500

235,227,913 (65,655,047) 169,572,866

Remaining amortisation periods 31 December 2010 31 December 2011

17 years 3 months 16 years 3 months

Amortisation of Baht 8.3 million (2553: Baht 8.3 million) was included in the cost of goods sold.

| Annual Report 2011

Total

(Unit: Baht) Company Computer software At 1 January 2010 Cost Less Accumulated amortisation Net book amount

For the year ended 31 December 2010 Opening net book amount Amortisation charge Closing net book amount

At 31 December 2010 Cost Less Accumulated amortisation Net book amount

For the year ended 31 December 2011 Opening net book amount Additions Amortisation charge Closing net book amount

34,022,500 34,022,500

At 31 December 2011 Cost Less Accumulated amortisation Net book amount

34,022,500 34,022,500

The Group has not amortised the computer software which was purchased during the year 2011. The computer software will be amortised in January 2012.

Eastern Water Resources Development and Management PLC. |

19. Deferred income tax

The analysis of deferred tax assets and deferred tax liability is as follows:

Deferred tax assets: Deferred tax asset to be recovered within 12 months Deferred tax asset to be recovered after more than 12 months Deferred tax liabilities: Deferred tax liabilities to be settled within 12 months Deferred tax liability to be settled after more than 12 months

Company 2011

3,996,503

858

327,950

858

19,066,100 23,062,603

13,972,046 13,972,904

12,554,127 12,882,077

7,875,085 7,875,943

1,381

16,059,658

37,913,385

27,225,269

10,231,997

115,196

37,914,766

43,284,927

10,231,997

115,196

The movement in deferred tax asset and liability are the following; Allowance Depreciation for doubtful - plant and Impairment Employee benefit accounts equipment - assets

| Annual Report 2011

(Restated) 2010

(Unit: Baht) (Restated)

Consolidated

Deferred tax assets As at 1 January 2010 Transaction recorded in statements of comprehensive income As at 31 December 2010 Adjustment of employee benefit liability at beginning balance As at 1 January 2011 Transaction recorded in statements of comprehensive income As at 31 December 2011

(Unit: Baht)

Consolidated (Restated) 2011 2010

Others

Total

6,693,527

145,908

5,037,000

1,361,727 13,238,162

324,258 7,017,785

480,076 625,984

420,000 5,457,000

(489,592) 734,742 872,135 13,972,904

7,017,785

625,984

16,641,074 5,457,000 16,641,074

(1,712,995) 5,304,790

16,641,074 872,135 30,613,978

(157,013) (1,208,900) (3,600,332) (872,135) (7,551,375) 468,971 4,248,100 13,040,742 23,062,603

Amortisation - intangible asset Deferred tax liabilities As at 1 January 2010 Transaction recorded in statements of comprehensive income As at 31 December 2010 Transaction recorded in statements of comprehensive income As at 31 December 2011

Deferred tax liabilities As at 1 January 2010 Transaction recorded in statements of comprehensive income As at 31 December 2010 Transaction recorded in statements of comprehensive income As at 31 December 2011

Total

45,674,353

88,249

45,762,602

(2,504,622) 43,169,731

26,947 115,196

(2,477,675) 43,284,927

(16,059,658) 27,110,073

(9,563) 105,633

Allowance for doubtful accounts Deferred tax asset As at 1 January 2010 Transaction recorded in statements of comprehensive income As at 31 December 2010 Adjustment of employee benefit liability at beginning balance As at 1 January 2011 Transaction recorded in statements of comprehensive income As at 31 December 2011

Consolidated DepreciationLiabilities under plant and finance lease andequipment agreements

(Unit: Baht) (Restated)

10,699,060 10,699,060

(Unit: Baht) (Restated)

Company Employee benefit

(5,370,161) 37,914,766

Others

Total

6,693,527

787,918

7,481,445

324,258 7,017,785

70,242 858,160

394,500 7,875,945

7,017,785

9,730,251 9,730,251

858,160

9,730,251 17,606,196

(1,712,995) 5,304,790

(2,152,964) 7,577,287

(858,160) -

(4,724,119) 12,882,077

Company Liabilities under Depreciation finance lease -plant and agreements equipment

(Unit: Baht) (Restated) Total

71,504

43,692 115,196

(9,563) 105,633

10,126,364 10,126,364

10,116,801 10,231,997

Eastern Water Resources Development and Management PLC. |

20. Other non-current assets Consolidated 2011 2010 Advance construction payment and prepaid expenses Deposit and Retention Other

170,805,810 1,947,873 6,186,509 178,940,192

19,153,998 6,568,464 3,526,521 29,248,983

2011

Company

154,810,550 877,722 155,688,272

(Unit: Baht) 2010

2,174,414 3,513,312 807,831 6,495,557

21. Short-term loans from financial institutions

The detail of short-term loans from financial institutions is as follows: Consolidated 2011 2010 Bills of exchange Promissory note

33,000,000 33,000,000

552,587,913 552,587,913

2011 -

Company

Face value Less Deferred interest Bills of exchange - net

555,000,000 (2,412,087) 552,587,913

2011 -

Company

2010

As at 31 December 2010, the Company issued unsecured bills of exchange to financial institutions as a borrowing to invest in property, plant and equipment. These bills of exchanges have maturity date about 6 months and bear interest at the rates of 1.51% - 2.14% per annum. It has been repaid in 2011. Consolidated 2011 2010 Promissory note

100

(Unit: Baht)

555,000,000 (2,412,087) 552,587,913

21.2 Promissory note

2010

552,587,913 552,587,913

21.1 Bills of exchange Consolidated 2011 2010

(Unit: Baht)

33,000,000 33,000,000

2011 -

Company

(Unit: Baht) 2010 -

As at 31 December 2011, a subsidiary has a short-term loan from promissory note with a financial institution which is due of call with an interest rate of 3.40% per annum. | Annual Report 2011

22. Trade accounts payable Consolidated 2011 2010 Third parties Related parties (Note 37.2)

98,750,997 6,913,316 105,664,313

113,132,316 24,423,541 137,555,857

(Unit: Baht) Company 2011 2010 68,118,175 58,982,721 127,100,896

50,343,012 43,873,046 94,216,058

23. Finance lease liabilities

Finance lease liabilities - minimum lease payments: Consolidated 2011 2010

Not later than 1 year Later than 1 year but not later than 5 years Less Future finance charges on finance leases Present value of finance lease liabilities

2011

Company

2010

2,427,990 2,324,805 4,752,795

2,897,522 2,493,627 5,391,149

2,427,990 2,324,805 4,752,795

2,897,522 2,493,627 5,391,149

(45,805) 4,706,990

(85,857) 5,305,292

(45,805) 4,706,990

(85,857) 5,305,292

The present value of finance lease liabilities is as follows: Consolidated 2011 2010

Not later than 1 year (short-term portion) Later than 1 year but not later than 5 years (long-term portion)

(Unit: Baht)

Company 2011 2010

2,382,185

2,823,812

2,382,185

2,823,812

2,324,805 4,706,990

2,481,480 5,305,292

2,324,805 4,706,990

2,481,480 5,305,292

24. Long-term loans from financial institutions

Movements in the long-term loans from financial institutions during the year are summarised below. (Unit: Baht) Consolidated Company 2011 2010 2011 2010

Balances as at 1 January Add Additional borrowings Less Repayments Balances as at 31 December

2,005,812,526 1,488,000,000 (547,792,060) 2,946,020,466

1,915,568,000 278,000,000 (187,755,474) 2,005,812,526

1,454,000,000 1,235,000,000 (266,500,000) 2,422,500,000

1,350,000,000 204,000,000 (100,000,000) 1,454,000,000

Eastern Water Resources Development and Management PLC. |

101

Outstanding credit facilities Credit limit 2011 2010 Million Baht Million Baht Million Baht

Consolidated 2011 2010 Million Baht Million Baht

Company 2011 Million Baht

2010 Million Baht

The Company a)

1,500

1,000

967.0

16,500,000

1,700

294.0

1,529.0

1,406,000,000

240

102,852,000

200

38.0

135,750,000

300

252,631,578

284,210,526

200

118.0

171.0

70,888,888

29,000,000

e) Total

270 5,410

70.0 1,449.0

2,705.0

200,000,000 2,946,020,466 2,005,812,526 2,422,500,000 1,454,000,000

Less Current portion Long-term loans from financial institutions net of current portion

(620,995,616) (373,406,060) (522,750,000) (250,000,000)

c) The subsidiary a)

102

| Annual Report 2011

1,000,000,000 1,250,000,000 1,000,000,000 1,250,000,000 33,000,000

16,500,000

33,000,000

171,000,000 1,406,000,000

171,000,000

2,325,024,850 1,632,406,466 1,899,750,000 1,204,000,000

Long-term loans of the Company and its subsidiaries from financial institutions are shown below.

Long-term loans of the Company Credit facility Date of (Million Baht) agreement

Objective

Type of loan

period

Interest rate

Repayment schedule

Debt covenant

1,500

6 December 2007

To repay a bridging loan

Unsecured, 7 with status years equivalent to unsecured and unsubordinated debts

- The 1st - 36th months Fixed rate at 4.80 percent per annum - The 37th - 60th months Minimum Loan Rate (MLR) minus 1.75 percent per annum - The 61st month onwards Minimum Loan Rate (MLR) minus 1.50 percent per annum On 1 February 2011, the interest rate has been changed to be THBFIX (3 months) + 1.50 per annum for the 37th month onwards.

Principal is repayable in semiannual installments, beginning after a grace period of 12 months from the agreement date as scheduled below. -The 1st - 6th installments Baht 50 million each -The 7th - 12th installments Baht 200 million each

The Company is required to comply with certain conditions including the maintenance of a debt to equity ratio of not exceeding 2 times and not lower than 0 time, a debt service coverage ratio (DSCR) of not lower than 1.10 times, etc.

1,000

22 May 2009

To invest in pipeline maintenance project

Unsecured, with status equivalent to unsecured and unsubordinated debts

- The 1st - 12th months Money Market Rate (MMR) for loans with maturities of no more than 1 year from drawdown date - The 13th - 48th months Minimum Loan Rate (MLR) minus 1.75 percent per annum - The 49th month onwards Minimum Loan Rate (MLR) minus 1.50 percent per annum On 13 September 2010, the interest rate has been changed to be fixed at 3.45% per annum for the first year; THBFIX+1.75% per annum for the second to the third years; and THBFIX+2% per annum for the fourth to the sixth years.

Principal with accrued interest (if any) is to be fully paid within 12 months from the agreement date. On 13 September 2010, the condition for the repayment of the principal has been changed to semi-annual installments, total 10 installments at Baht 100 million each start from the end of November 2011. On 29 November 2011, the condition for the repayment of principle has been changed by installment payment for amount Baht 33 million which total 2 installments at Baht 16.5 million each start from the end of November 2011 and the end of May 2012. The remaining balance will be repaid by semiannual installments, total 8 installments each start from the end of November 2012

1,700

10 years - The 1st - 4th years Fixed rate at 3.50 percent per annum - The 5th - 7th years Minimum Loan Rate (MLR) minus 2.25 percent per annum - The 8th - 10th years Minimum Loan Rate (MLR) minus 2.00 percent per annum

Principal is repayable in 16 semi-annual installments, beginning after a grace period of 30 months from the first draw down date.

None

25 August Use in the 2009 Companyâ&#x20AC;&#x2122;s pipeline construction

Unsecured

7 year

Eastern Water Resources Development and Management PLC. |

103

Long-term loans of subsidiary - Universal Utilities Company Limited Credit facility Date of (Million Baht) agreement

Objective

Type of loan

Period

Interest rate

Repayment schedule

Debt covenant The subsidiary is required to comply with certain conditions including the maintenance of a debt service coverage ratio (DSCR) of not lower than 1.25 times, etc.

240

24 April 2006

To use in the subsidiary’s water tap production project

Unsecured

7 years

- The 1th – 48th months Minimum Loan Rate (MLR) minus 1.50 percent per annum - The 49th months onwards Minimum Loan Rate (MLR) minus 0.75 percent per annum On 11 December 2009, the subsidiary and a financial institution agreed to adjust the interest rate of the loans to be Minimum Loan Rate (MLR) minus 1.50 percent per annum, effective from the 49th months until the end of the loan agreement.

Principal is repayable equally in 21 quarterly installments, beginning after a grace period of 18 months from the agreement date.

200

15 December 2008

To use in the subsidiary’s water tap projects

Unsecured

7 years

-The 1th - 4th years Minimum Loan Rate (MLR) minus 1.75 percent per annum -The 5th years onwards Minimum Loan Rate (MLR) minus 1.50 percent per annum

Principal is repayable equally in 23 quarterly installments, beginning after a grace period of 18 months from the agreement date.

300

16 September 2009

To settle an existing loan from the Company

Unsecured

10 years

- The 1st - 5th years Minimum Loan Rate (MLR) minus 2.25 percent per annum - The 6th year onwards Minimum Loan Rate (MLR) minus 2.00 percent per annum

200

11 December 2009

To use in the subsidiary’s water tap project

Unsecured

10 years

- The 1st - 5th years Minimum Loan Rate (MLR) minus 2.25 percent per annum - The 6th year onwards Minimum Loan Rate (MLR) minus 2.00 percent per annum

Principal is repayable in 18 semi-annual installments, beginning after a grace period of 18 months from the first draw down date and to be completed within 10 years from the first draw down date.

The subsidiary is required to comply with certain conditions including the maintenance of a debt service coverage ratio (DSCR) of not lower than 1.10 times, etc

270

28 July 2010

To settle an existing loan from the Company

Unsecured

5 years

- The 1st - 18th months Minimum Loan Rate (MLR) minus 2.35 percent per annum - The 19th month onwards Minimum Loan Rate (MLR) minus 2.25 percent per annum

Principal is repayable in 9 semi-annual installments, beginning after a grace period of a fully withdraw or 31 May 2012 which depend on earlier date.

The subsidiary is required to comply with certain conditions including the maintenance of a debt service coverage ratio (DSCR) of not lower than 1.10 times, etc

104

| Annual Report 2011

The subsidiary is required to comply with certain conditions including the maintenance of D/E ratio of not over than 2 times, and DSCR ratio of not lower than 1.25 times, etc. Principal is repayable in 19 The subsidiary semi-annual installments, is required to beginning after a grace period comply with of 12 months from the first draw certain conditions down date and to be completed including the within 10 years from the first maintenance of draw down date. a debt service coverage ratio (DSCR) of not lower than 1.25 times, etc.

25. Accrued expenses Consolidated 2011 2011 Accrued bonus Accrued project compensation Accrued know-how services fee Accrued utilities expenses Others

41,050,693 27,736,012 3,559,835 10,392,737 82,739,277

43,026,825 26,848,190 18,634,463 9,557,140 21,173,222 119,239,840

(Unit: Baht) Company 2011 2011 31,385,374 27,736,012 2,304,328 61,425,714

32,606,700 26,848,190 5,766,486 12,298,275 77,519,651

26. Employee Benefit Obligations - defined benefit plan

The amounts recognised in the statement of financial position are determined as follows:

Present value of funded obligations Liability in the statement of financial position

(Unit: Baht) Company 2011 2010 37,672,554 37,672,554 -

The movement in the defined benefit obligation over the year is as follows:

At 1 January Adjustment at beginning balance Current service cost Interest cost Benefits paid At 31 December

Consolidated 2011 2010 64,958,355 64,958,355 -

Consolidated 2011 56,974,869 13,637,024 2,634,899 (8,288,437) 64,958,355

2010 -

(Unit: Baht)

Company 2011 2010 33,938,791 8,029,214 1,562,066 (5,857,517) 37,672,554 -

The amounts recognised in the income statement are as follows: Consolidated 2011 2010

Current service cost Interest cost Total, included in staff costs

13,637,024 2,634,899 16,271,923

(Unit: Baht)

Company 2011 2010 8,029,214 1,562,066 9,591,280

Eastern Water Resources Development and Management PLC. |

105

Of the total charge in consolidated financial statements, Baht 4.4 million (2010: nil) and Baht 11.9 million (2010: nil) were included in ‘cost of goods sold’ and ‘administrative expenses’ respectively.

Of the total charge in company financial statements, Baht 1.3 million (2010: nil) and Baht 8.3 million (2010: nil) were included in ‘cost of goods sold’ and ‘administrative expenses’ respectively.

The principal actuarial assumptions used were as follows: Discount rate 4.7% Inflation rate 3.5% Salary increment rate 5.0-7.0%

27. Other non-current liabilities Consolidated 2011 2010 Retentions payable Rental guarantees received from related party (Note 37.2)

28. Share capital

At 1 January 2010 Issue of shares At 31 December 2010 Issue of shares At 31 December 2011

(Unit: Baht)

Company 2011 2010

151,439,708

106,804,273

129,058,798

85,257,246

151,439,708

106,804,273

805,875 129,864,673

805,765 86,063,011

(Unit: Baht) Number of Ordinary Share shares shares premium Total 1,663,725,149 1,663,725,149 2,138,522,279 3,802,247,428 1,663,725,149 1,663,725,149 2,138,522,279 3,802,247,428 1,663,725,149 1,663,725,149 2,138,522,279 3,802,247,428

The total registered of ordinary shares has a par value of Baht 1 per share (2010: Baht 1 per share). All issued shares are fully paid.

29. Legal reserve 106

Pursuant to section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a legal reserve equal to at least 5 percent of its net profit for the year after deducting accumulated deficit brought forward (if any), until such reserve reaches 10 percent of the Company’s registered share capital. The legal reserve is non-distributable. As at 31 December 2011 and 2010, the Company’s legal reserve has been fully reached. | Annual Report 2011

30. Other component of equity

(Unit: Baht) Consolidated and Company Assets transferred Total From customers

At 1 January 2010 Amortisation of assets transferred from customers At 31 December 2010

41,947,193 (3,397,523) 38,549,670

At 1 January 2011 Amortisation of assets transferred from customers At 31 December 2011

38,549,670 (3,397,523) 35,152,147

Assets transferred from customers represent water distribution pipeline systems and water measured equipment transferred to the Company by customers in accordance with the water supply agreement. The Company recorded as property, plant and equipment against assets transferred from customers account which include in equity and recognise to revenue over the useful life of asset.

31. Dividends

Dividends declared during the year consist of the following. Approved by

Year 2011 Dividend for the year 2010 Interim dividends on operating results for the six-month period ended 30 June 2011 Year 2010 Dividend for the year 2009 Interim dividends on operating results for the six-month period ended 30 June 2010

Annual General Meeting of the shareholders on 24 March 2011 Board of Directorâ&#x20AC;&#x2122;s meeting on 22 August 2011

Total Dividend dividends Baht per share Baht

Paid on

415,918,537

0.25

12 April 2011

199,640,898

0.12

20 September 2011

415,917,787

0.25

5 April 2010

216,277,640

0.13

21 September 2010

615,559,435 Annual General Meeting of the shareholders on 19 March 2010 Board of Directorâ&#x20AC;&#x2122;s meeting on 23 August 2010

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32. Sales - Project assets

By resolution of the Cabinet on 2 August 2005, it was resolved to approve projects to solve urgently a drought crisis in the Eastern region, which included a project to install a water distribution pipeline connecting the Pra-Sae reservoir to the Klong Yai reservoir in the Rayong Province (“the pipeline connecting project”), the Company was then assigned to construct such project under a budget of Baht 1,680 million, separated as below:

a) b)

The budget was to be supported by the government of Baht 1,008 million, with the Company assigned to enter into contracts for pipeline connecting and annex building construction and contracts to procure and install water pumping machines and electricity system, with total contract values of Baht 919 million. The Company entered into such contracts on behalf of the government under the resolution as mentioned above. The Company will accept the assets and make payment to the sub-contractors when the assets are inspected for acceptance and received payment from the Royal Irrigation Department (“the RID”). For the remaining budget of Baht 672 million, the Company was to make advance payments and the RID is to reimburse the Company by gradual offsetting of the charges for raw water that the Company will purchase from the RID each year. The Company had made advance payments totalling approximately Baht 646.5 million (comprising pipeline amounting to Baht 642 million and related fixtures amounting to Baht 4.5 million). These are presented as “Project assets”.

Thereafter, the RID issued a letter to the Company, notifying the intention to purchase the assets constructed under the pipeline connecting project by special method. In addition, on 15 January 2010, the Company and the RID signed an agreement to sell and purchase assets constructed under the pipeline connecting project. The contract value amounts to Baht 1,677 million (value added tax included). On 2 April 2010, the Company delivered project assets to the RID and fully received payment on 8 April 2010. The Company recognised sale-project assets as revenues amounting to Baht 1,567 million and cost of sale-project assets amounting to Baht 1,507 million.

33. Other income Consolidated 2011 2010 Interest income Dividend income (Note 37.1) Others

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12,352,781 18,245,535 29,053,889 59,652,205

3,161,482 17,267,095 21,079,694 41,508,271

(Unit: Baht)

Company 2011 2010 8,733,888 43,388,533 29,404,097 81,526,518

2,283,469 45,827,091 18,281,115 66,391,675

34. Expenses by nature

Significant expenses by nature are as follow: Consolidated 2011 2010

Salary and wages and other employee benefits Depreciation and amortisation expenses Rental expenses Raw materials and consumables used Electricity expenses Purchases of raw water Hiring and service expenses Repair and maintenance expenses Losses on impairment and diminution in value of assets and provision for doubtful accounts Waterworks management expense Expenses for development of life quality and environment Cost of project asset Finance costs Others

270,302,985 356,011,227 57,591,466 6,924,470 348,380,367 159,418,906 255,507,206 84,550,228

214,663,075 428,824,710 54,565,240 7,448,193 340,714,338 161,602,664 291,015,290 53,537,093

(Unit: Baht) Company 2011 2010 149,470,630 269,049,223 45,489,477 303,094,511 149,256,719 39,388,962 42,786,379

131,893,649 319,502,917 44,219,891 301,887,499 151,582,267 36,020,876 33,483,876

1,195,153 1,645,003 915,153 245,003 196,389,513 186,605,005 33,555,350 34,604,368 32,230,547 32,095,002 1,507,455,010 1,507,455,010 78,476,072 89,807,641 52,417,171 67,652,245 225,404,887 198,231,874 202,281,671 198,239,187 1,877,318,317 3,384,114,499 1,482,769,956 3,010,882,427

35. Income tax Consolidated 2011 2010

(Unit: Baht) (Restated)

Company 2011 2010

Current tax: Current tax on profits for the year Adjustments in respect of prior year Total current tax

422,562,165 (49,088) 422,513,077

379,327,111 2,419,381 381,746,492

368,175,254 586,213 368,761,467

323,352,015 2,419,381 325,771,396

Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Total deferred tax Total tax expense

10,388,948 (8,207,736) 2,181,212 424,694,289

(3,195,672) (3,195,672) 378,550,820

13,580,042 1,260,876 14,840,918 383,602,385

(350,808) (350,808) 325,420,588

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The tax on the Groupâ&#x20AC;&#x2122;s profit before tax differs from the theoretical amount that would arise using the basic tax rate of the home country of the company as follows: (Unit: Baht) (Restated) Consolidated Company 2011 2010 2011 2010

Profit before tax Tax calculated at a tax rate of 30% (20 10 - 25, 30%) Tax effect of: Income not subject to tax Expenses not deductible for tax purpose Adjustment in respect of prior year Re-measurement of deferred tax change in tax rate Tax charge

1,432,717,251 1,290,684,391 1,292,306,722 1,152,871,315 429,815,175

372,205,318

387,692,016

330,861,395

(17,173,511) 20,309,449 (49,088)

(18,571,686) 22,497,807 2,419,381

(17,173,511) 11,236,791 586,213

(18,571,686) 10,711,498 2,419,381

(8,207,736) 424,694,289

378,550,820

1,260,876 383,602,385

325,420,588

The actual tax rate was 28.49% (2010: 28.05%).

There was the announcement of the Royal Decree Regarding the Reduction of Corporate Income Tax Rate in the Government Gazette on 21 December 2011. The Group has, consequently, re-measured the relevant deferred tax balance by using the tax rate of 23% of net profit for the 2012 fiscal year ending on or after 31 December 2012, and to further reduce their corporate income tax to 20% of net profit in subsequent fiscal years beginning on or after 1 January 2013 onward.

36. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year. (Unit: Baht) (Restated) Consolidated Company 2011 2010 2011 2010

Net profit attributable to ordinary shareholders (Baht) Weighted average number of ordinary shares in issue (Share) Basic earnings per share (Baht)

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1,007,548,762

911,749,287

908,704,337

1,663,725,149 1,663,725,149 1,663,725,149 1,663,725,149 0.61 0.55 0.55 0.50

There are no potential dilutive ordinary shares in issue for the years ended 2011 and 2010.

| Annual Report 2011

827,450,727

37. Related parties transactions

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the company. Associates and individuals owning an, indirectly or directly, interest in the voting power of the company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.

The Company is a public listed company. The major shareholder is the Provincial Waterworks Authority which owns 40.2% of the companyâ&#x20AC;&#x2122;s share. The following transactions were carried out with related parties:

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37.1 Transactions incurred during the year Consolidated 2011 2010 Sales - raw water Major shareholders Industrial Estate Authority of Thailand Provincial Waterworks Authority Electricity Generating Public Company Limited Subsidiary Universal Utilities Company Limited Sales - tap water Major shareholders Provincial Waterworks Authority Rental and service income Major shareholder Provincial Waterworks Authority Subsidiary Universal Utilities Company Limited Other related company Egcom Tara Company Limited Dividend income Subsidiary Universal Utilities Company Limited Other related company Egcom Tara Company Limited

112

793,062,227 589,744,162 26,548,758

767,885,161 577,137,564 55,654,932

(Unit: Baht)

Company 2011 2010 793,062,227 589,744,162 26,548,758

767,885,161 577,137,564 55,654,932

120,952,791 110,903,298 1,409,355,147 1,400,677,657 1,530,106,938 1,511,580,955 567,060,865

529,499,097

49,699,921

56,729,534

79,070,204

107,985,628

4,089,917

3,359,006

56,089,553 135,159,757

51,331,152 159,316,780

4,089,917

3,359,006

25,142,998

28,559,996

18,245,535 43,388,533

17,267,095 45,827,091

18,245,535 18,245,535

17,267,095 17,267,095

Other income Subsidiary Universal Utilities Company Limited

5,271,386

4,986,614

Costs of sales and costs of services Subsidiary Universal Utilities Company Limited

245,482,066

242,777,960

Sales of raw water are charged similar to market prices. Sales of tap water, rental and service income and other income are charged at mutually - agreed prices as stipulated in the contracts. Costs of sales and services are charged at mutually - agreed prices as stipulated in the contracts.

| Annual Report 2011

37.2 Outstanding balances at end of the years Consolidated 2011 2010

Trade accounts receivable - billed Major shareholders Provincial Waterworks Authority Industrial Estate Authority of Thailand Electricity Generating Public Company Limited Subsidiary Universal Utilities Company Limited Other related company Egcom Tara Company Limited Unbilled receivables Major shareholder Provincial Waterworks Authority Other related company Egcom Tara Company Limited Water loss treatment service income receivables Major shareholder Provincial Waterworks Authority - billed - unbilled

(Unit: Baht)

Company 2011 2010

111,553,288 70,856,311

80,648,034 67,939,271

94,093,335 70,856,311

54,226,827 67,939,271

4,211,149

3,604,828

4,211,149

3,604,828

15,439,432

13,874,569

5,406,310 192,027,058

4,738,124 156,930,257

184,600,227

139,645,495

70,742,521

61,846,408

4,887,130 75,629,651

4,632,784 66,479,192

962,415 9,170,844 10,133,259

5,002,892 11,609,751 16,612,643

The age analysis of the water loss treatment service income receivable-billed is as follows:

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Consolidated 2011 2010 Within credit term Past due less than 3 months Total water loss treatment service income - receivable - billed Other receivable Major shareholder Provincial Waterworks Authority Subsidiary Universal Utilities Company Limited Trade accounts payable Major shareholders Provincial Waterworks Authority Industrial Estate Authority of Thailand Subsidiary Universal Utilities Company Limited Other related company Egcom Tara Company Limited

(Unit: Baht)

Company 2011 2010

816,567 145,848

3,865,064 1,137,828

962,415

5,002,892

10,172

11,780

10,172

11,780

2,104,595 2,104,595

1,077,248 1,077,248

6,895,291 1,333

24,423,541 -

645,681 1,333

3,461,711 -

58,335,707

40,411,335

24,423,541

58,982,721

43,873,046

2,792,261

16,692 6,913,316

Other current liabilities (include in other current liabilities) Subsidiaries Universal Utilities Company Limited

Rental guarantees Subsidiaries Universal Utilities Company Limited

805,875

805,765

37.3 Key management compensation

Key management compensation composed of salaries, meeting allowances grauities and post employee benefits can be categorised as follows: (Unit: Baht) Consolidated Company 2011 2010 2011 2010

Short-term employee benefits Post-employment benefits 114

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75,340,678 2,744,942 78,085,620

71,589,357 71,589,357

53,364,596 1,703,127 55,067,723

49,535,013 49,535,013

38. Commitments and contingent liabilities

38.1 Capital commitments

As at 31 December 2011, the Group and the Company had commitments in respect of in-progress construction and installation of the water distribution pipeline in the consolidated and company financial statements totaling Baht 1,305.6 million and Baht1,094.5 million, respectively (2010: Baht 1,177.0 million and Baht 1,094.5 million, respectively).

38.2 Operating lease commitments

The future aggregate minimum lease payments in respect of the lease of motor vehicles and computer under non-cancellable operating leases contracts are as follows. (Unit: Million Baht) Consolidated Company 2011 2010 2011 2010

Within 1 year 1 to 5 years

11.3 13.8 25.1

4.8 2.7 7.5

4.5 4.2 8.7

38.3 Raw water and tap water purchase agreements and long-term service commitments

38.3.1 38.3.2 38.3.3

11.8 5.4 17.2

As at 31 December 2011 and 2010, the Company had commitment in respect of a raw water purchase agreement with the Royal Irrigation Department whereby it is to purchase raw water at the price specified in a Ministerial Regulation. As at 31 December 2011 and 2010, the Company and its subsidiary had commitments in respect of raw water and tap water purchase agreements with private companies at the condition and price as described in Notes 40.6, 40.7 and 40.14 to the financial statements. As at 31 December 2011, the Group and the Company had commitments in respect of service agreements payable in the future of approximately Baht 159.5 million and Baht 7.2 million, respectively (2010: Baht 189.9 million and Baht 8.2 million, respectively).

38.4 Guarantees

38.4.1 38.4.2

As at 31 December 2011, the Group and the Company had contingent liabilities from letters of guarantee issued by local commercial banks to the Provincial Electricity Authority for electricity consumption, to the Ministry of Finance for management and operation of the major water distribution pipeline systems in the Eastern Seaboard area, to the Provincial Electricity Authority and the Royal Irrigation Department for compliance to agreements, and to counterparty for bid bonds and performance bonds totalling Baht 281.1 million and Baht 153.1 million, respectively. (2010: Baht 266.1 million and Baht 138.1 million, respectively). As at 31 December 2011 and 2010, the Group had contingent liabilities in respect of being a guarantor to its three subsidiaries for letters of guarantee issued by local commercial banks to those subsidiaries in a credit limit of Baht 200 million for compliance to agreements Eastern Water Resources Development and Management PLC. |

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38.5

with respect to their electricity consumption guarantee, tap water production and distribution and water consumers information records.

Project compensation A government agency is considering a deal for the Company to rent/manage the 2 pipeline connecting projects (â&#x20AC;&#x153;projectsâ&#x20AC;?) and adjust the compensation. A letter issued by this government agency stipulated that the Company was to initially pay compensation for the projects at a percentage of the raw water sales from the projects from the year operation commenced. In addition, if it is decided that a fair rate is more than the rate at which the Company already paid, the Company is to make additional payment, in full, as a lump sum; while if the fair rate is lower, the government agency agrees to pay back the surplus paid by offsetting it against the remuneration of the following years. The government agency as mentioned in first paragraph informed the Company that a deal for the Company to rent/manage the projects and the adjusting of compensation must be processed in accordance with the Act on Private Participation in a State Undertaking B.E. 2535, whereby a committee has, under Section 13, authority to set the compensation rate and negotiate benefits with the Company, in order to reach a preliminary conclusion. The conclusion will then be proposed to the Cabinet for a resolution in accordance with Section 21 of that Act.

39. Litigation

As at 31 December 2011 and 2010, the Company and its subsidiary were sued as defendants in litigation cases with significant claim as follows:

39.1 On 28 March 2003, the Company was sued as a defendant in a litigation case in connection with the purchase of assets from the Legal Execution Department. The plaintiff petitioned the civil court to void the sales transaction or order the payment of compensatory damages amounting to Baht 302.2 million to the plaintiff. However, on 26 January 2006, the Court of First Instance issued an order dismissing the lawsuit and later the plaintiff lodged an appeal with the Court of Appeal on 22 March 2006. On 8 February 2011, the Appeal Court upheld the judgment of the Court of First Instance. At currently, the plaintiff did not submit a petition within the deadline, so this case has been finished. 39.2 116

On 20 October 2008, the Company was sued by a company in a lawsuit with a black case number 5930/2551 regarding a breach of a construction agreement. The litigation filed with the Civil Court by the plaintiff requested that the Company pay damages totaling Baht 40.2 million. On 29 December 2008, the Company filed a lawsuit with a black case number 6848/2551 regarding a breach of a construction contract, suing the aforementioned company and a local commercial bank as the work guarantor of that company. The litigation filed with the Civil Court by the Company requested that the defendants pay damages totaling Baht 37.4 million. On 26 January 2009, the Civil Court set a date for the settlement of issues under the lawsuit with the black case number 5930/2551. However, the attorney of the Company has petitioned the Court to merge the settlement of issues of the lawsuit with the black case number 6848/2551 to be in one case since both cases

| Annual Report 2011

are based on the same factual information. The Court considered the request and set a date for the settlement of issues of these two lawsuits on 23 March 2009. On 23 March 2009, the Civil Court set a date for investigation of plaintiff’s witnesses during 17 - 19 February 2011 and a date for investigation of defendant’s witnesses during 23 - 24 February 2010. On 30 July 2010, The Civil Court delivered its judgement of the red case number 3169/2553 and 3170/2553 which can be summarised as follows:

1. The litigant is required to pay a fine of Baht 8.8 million, return the advance payment of Baht 2.1 million and pay for wage supervisors during late work period of Baht 0.2 million, totalling a payment of Baht 11.1 million.

2. The Company is required to pay the 30th and 31st installment of construction cost according to the agreement of Baht 13.0 million together with the additional costs of Baht 7.0 million and the return of retention costs of Baht 3.8 million, totalling Baht 23.8 million. Moreover, the Company is required to return all eight bank guarantees to the litigant. However, for the benefit of the Company, a lawyer was appointed to lodge an appeal with the court on 29 October 2010 regarding the fine and the additional costs. The Company has recorded liabilities of the construction costs and the retention costs of Baht 16.8 million; still, not recorded Baht 7.0 million of the additional costs. Nevertheless, this case has not yet been finalised. 39.3

On 13 June 2011, the company was sued as a defendant by a former employee under labor law with a black case no.1887/2554 regarding the termination of the employment. The plaintiff lodged the lawsuit with the Central Labor Court, seeking compensation amounting to Baht 32.5 million. The management believes that the outcome of this case will not give rise to any significant loss.

39.4

On 27 June 2011, the Company was sued as a co-defendant together with a private company by the State Railway of Thailand in relation to a claim for damages for soil erosion on its land caused by the excavation of a raw water pit at the water pumping project in Chonburi. The plaintiff lodged the lawsuit with the Civil Court, black case no.722/2554, seeking compensation amounting to Baht 12.9 million. The Company defended plaintiff that the Company was not include in this operation and was only a purchaser of raw water from the private company.

39.5

On 14 March 2006, Universal Utilities Company Limited, a subsidiary, was sued as a co-defendant together with the Provincial Waterworks Authority (“PWA”) in a case brought in connection with illegal acts performed by administrative agencies or state officials. The plaintiff petitioned the administrative court to void the selection process by which a private operator was selected to produce tap water for distribution to the PWA in the area belonging to the Rayong Waterworks. On 16 March 2007, the Rayong Administrative Court ordered the selection process voided in accordance with the plaintiff’s petition, and also declared void the agreement appointing a private firm to produce water for sale to the Rayong Waterworks, which had resulted from an illegal selection process. However, the PWA and the subsidiary lodged appeals with the Rayong Administrative Court on 12 April 2007 and the Rayong Administrative Court has issued a court Eastern Water Resources Development and Management PLC. |

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receipt for such appeal and then passed it to the Supreme Administrative Court. The case is currently at the stage of concluding the facts of the ownerâ&#x20AC;&#x2122;s arbitrator at the appeals level of the Supreme Administrative Court under the court receipt No. Aor. 278/50. Since PWA and the subsidiary have to comply with conditions in the agreement and are further obliged to each other as stipulated in the agreement until the case is finalised, in accordance with Section 70 of the Royal Decree on Establishment of and Procedures for Administrative Court Act B.E. 2542, the subsidiary management believes that the subsidiary will incur no loss as a result of the termination of the agreement. In case that such termination occurs, the PWA will have to compensate the subsidiary for costs of construction and improvements made to the waterworks, and for other expenses incurred by the subsidiary. Therefore, no provision has yet been made in the accounts.

40. Significant agreements

The Company and its subsidiaries have the following significant agreements, besides other agreements as discussed in relevant notes to financial statements.

The Company

40.1

On 26 December 1993, the Company entered into an agreement with the Ministry of Finance to manage and operate the major water distribution pipeline systems in the Eastern Seaboard area. The contract term is 30 years, from 1 January 1994 to 30 September 2023 and the Company is required to pay a minimum of Baht 2 million per annum to the Ministry of Finance. In any years when the Companyâ&#x20AC;&#x2122;s revenues from the sales of raw water exceed Baht 200 million, it is required to pay the Ministry of Finance with a sharing benefit at a rate of 1 percent of sales of raw water from the Nong Khor and Dok Krai reservoirs. In addition, when the Companyâ&#x20AC;&#x2122;s annual rate of return on equity exceeds 20 percent, an additional sharing benefit at the rate of 15 percent of the return in excess of the paid 20 percent is to be paid to the Ministry of Finance. Nevertheless, the total sharing benefit is not to exceed 6 percent of the real value of the assets leased from the Ministry of Finance, as assessed according to the agreed time frame.

40.2

On 15 November 2000, the Company entered into an agreement with Universal Utilities Company Limited, a subsidiary, to receive waterworks management services for Sattahip Waterworks of the Provincial Waterworks Authority for the period of 10 years. The Company will pay the management fee from revenue after deducting license fee and related expenses as specified in the agreement. Moreover, the Company will receive the profit sharing from the subsidiary under the conditions specified in the agreement. Subsequently on 18 October 2004, the Company amended the above-mentioned agreement to entitle the subsidiary to the Pattaya Waterworks and extend the manage watersystem of Sattahip Waterworks period for 30 years from 1 March 2001 but not exceeding the period the Provincial Waterworks Authority has granted the Company the rights to operate and manage the SattahipWaterworks System.

40.3 On 28 November 2000, the Company entered into an agreement with Universal Utilities Company Limited whereby it grants the subsidiary the rights to operate the waterworks of the Municipality of Si ChangIsland Sub-district for a period of 15 years commencing from the first tap water selling date. Under the agreement, the subsidiary is required to construct tap water production system and 118

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also required to provide maintenance services at least 5 years after termination of agreement. Moreover, the subsidiary is to transfer all the invested assets to the Company and/or the Si Chang Municipality on the earlier expiry date of the waterworks agreement operation or the waterworks management agreement. The subsidiary is to pay in return to both the Municipality of Si Chang Island Sub-district and the Company at the rates as specified in the agreement.

40.4

On 11 May 2004, the Company entered into a waterworks management agreement with Universal Utilities Company Limited (the subsidiary) whereby the subsidiary is to provide water works management services in Bo Win Municipal area for a period of 25 years from the date the subsidiary completed the construction works of tap water production system and the Company agreed for commercial distribution of tap water (11 March 2005). Under the agreement, the subsidiary is to procure land and construct tap water production system sufficient to supply tap water throughout the agreement period. The subsidiary is to transfer all the invested assets to the Company and/or the Municipality on the earlier expiry date of the waterworks operation agreement or the waterworks management agreement. The Company is to pay an annual waterworks management fee at the rates specified in the agreement, determined on the monthly tap water sales and service fees, which can be collected from the users. Since later on 5 August 2005, the Company entered into a waterworks system operation and management agreement with the Bo Win Sub-district Administrative Organisation (â&#x20AC;&#x153;SAOâ&#x20AC;?), the Company, entered into new agreement with the subsidiary dated 14 July 2006, which replaced aforementioned agreement dated 11 May 2004.

40.5 On 7 July 2004, the Company entered into a water supply agreement for the Koh Samui Waterworks with Universal Utilities Company Limited for a 15-year period from the first water distribution date (12 May 2005) whereby the subsidiary agreed to construct the reverse osmosis water production system with the water pipeline connected to both the water distribution pipeline of the purchasers in the specified area and the Provincial Waterworks Authority, and sell the tap water produced under such system. 40.6 On 13 December 2007, the Company entered into the raw water procurement agreements with a private company whereby the Company is required to purchase a minimum of 10 million cubic meters per annum over a 10-year period. 40.7 On 30 September 2009, the Company entered into raw water procurement agreements with a private company, whereby the Company is required to purchase a minimum of 6 million cubic meters for the first years, 8 million cubic meters for the second years and 10 million cubic meters for the third years or later over a 10-year period. The Subsidiaries 40.8

Chachoengsao Water Supply Company Limited entered into the concession agreement dated 9 November 2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the Provincial Waterworks Authority at Chachoengsao office, Chachoengsao province. The concession period is 25 years from the date that first income is derived from selling tap water (1 April 2003). Eastern Water Resources Development and Management PLC. |

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40.9

Bangpakong Water Supply Company Limited entered into the concession agreement dated 9 November 2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the Provincial Waterworks Authority at Bangpakong office, Chachoengsao province. The concession period is 25 years from the date that first income is derived from selling tap water (1 April 2003).

40.10 Nakornsawan Water Supply Company Limited entered into the concession agreement dated 7 November 2000 with the Provincial Waterworks Authority. The subsidiary is privileged to produce and sell tap water to the Provincial Waterworks Authority at Nakornsawan office, Nakornsawan province. The concession period is 25 years from the date that first income is derived from selling tap water (1 March 2003). 40.11 Chachoengsao Water Supply Company Limited (CWS) and Bangpakong Water Supply Company Limited (BWS) entered into a know-how agreement dated 1 December 2000 with Australian Water Technologies PTY Limited of Australia which transferred its entitlements under this agreement to its subsidiary, named AWT International (Thailand) Limited (“AWT”) on 15 October 2002. Whereby AWT agreed to permit the use of its name for reference purposes and provide the know-how to enable both subsidiaries to perform their obligations. In consideration thereof, the subsidiaries agreed to pay fees at the rate stipulated in the agreement. Then, Sydney Water Corporation, the parent company of AWT, declared its intention to liquidate AWT and issued comfort letters to both subsidiaries to confirm that it will take on all AWT’s duties and obligations under the know-how agreement. The subsidiaries’ Board of Directors considered to accept this proposal and negotiated to reduce their service fee. The service fee paid to AWT reduced from the present value of future estimated payment amounting to Baht 52.4 million to a one-time advance payment not exceeding Baht 18.0 million, which is a saving of the said service fee over the remaining contract. Consequently, the subsidiaries’ Board of Directors, on 18 January 2011, passed the resolution to terminate this contract. The subsidiaries recorded the advance service fee as a prepaid expense included in other non-current assets in the consolidated financial statements. 40.12

On 15 March 2010, Universal Utilities Company Limited entered into an agreement with Egcom Tara Company Limited, a related company, to produce tap water and to provide maintenance services for the tap water production system and tap water distribution pipeline of the production plants situated in Lak Muang, Ratchaburi province and Pangpuoy, Samut Songkram province. The agreement period is 3 years, from 7 April 2010 to 7 April 2013.

40.13

On 14 March 2006, Universal Utilities Company Limited and its subsidiaries entered into an agreement to produce tap water for sales to Rayong Waterworks, Rayong province with the Provincial Waterworks Authority for a 25-year period commencing from the first tap water selling date (12 July 2006). Under the agreement, the subsidiaries are required to construct tap water production system, water delivery system and water distribution system, and to expand the production capacity of the existing tap water distribution system of Rayong Waterworks. The subsidiaries are also required to provide maintenance services and to act on behalf of the Provincial Waterworks Authority in any related matters. Ownership of assets, which have been invested by the subsidiaries, is to be transferred to the Provincial Waterworks Authority immediately upon completion of these activities, with the

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subsidiaries having the rights to occupy the assets in order to produce and supply tap water to the Provincial Waterworks Authority over the agreement period. The subsidiaries will receive income at the rates prescribed in the agreement.

40.14

On 25 May 2009, Universal Utilities Company Limited entered into a tap water purchase agreement for the Chonburi Waterworks, Chonburi Province with a private company. The agreement is effective from the date it is signed by both parties and will be terminated upon termination of the tap water purchase and sale agreement for the Chonburi Waterworks, Chonburi Province made with Provincial Waterworks Authority (“PWA”). The agreement requires a private company to construct a tap water production facility, of which ownership is not required to be transferred to the subsidiary. Prices are to be at the rates stipulated in the agreement.

40.15

On 3 June 2009, Universal Utilities Company Limited entered into the tap water purchase and sale agreement for the Chonburi Waterworks, Chonburi Province with PWA. The term of the agreement is 20 years from the date of tap water purchases commence. The agreement requires the subsidiary to construct a tap water production facility, of which ownership is not required to be transferred to the PWA. Prices are to be at the rates stipulated in the agreement.

40.16 On 29 December 2011, Universal Utilities Company Limited entered into a waterworks system operation and management agreement with the Sub-district Administrative Organisation (“SAO”) Nong Khaem for a 25-year period commencing from the beginning date of producing and selling tap water. The subsidiary has to transfer ownership of all invested and expanded assets in the waterworks system to SAO Nong Khaem free-of- charge at the end of agreement.

41. Financial instruments 41.1

Financial risk factors The Group’s financial instruments principally comprise cash and cash equivalents, trade and other receivables, trade accounts payable, tempolary and long-term loans and some items in other current liabilities. The Group’s activities expose it to a variety of financial risks, including the credit risk and interest rates risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The financial risk management is discussed below.

41.1.1 Credit risk The Group are exposed to credit risk primarily with respect to, trade accounts receivable, and other receivable. The Group manage the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. Although the Group may expose to concentration risk due to their having a few large customers, those customers are in government sector. The management believes that such risk is therefore low. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivables, and other receivable as stated in the statement of financial position. Eastern Water Resources Development and Management PLC. |

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41.1.2 Interest rate risk The Group’s exposure to interest rate risk relate primarily to their deposits with financial institutions and short-term and long-term loans. However, since most of the Group’s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the current market rate, the interest rate risk is expected to be minimal. Significant financial assets and liabilities as at 31 December 2011 classified by type of interest rates are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date. 41.2

Fair values of financial instruments Since the majority of the Group’s financial instruments are short-term. The Group expect that their fair values are not materially different from the amounts presented in the balance sheets except for long-term loans from financial institutions which as at 31 December 2011 having the net book values and fair values of Baht 1,523.52 million and Baht 1,473.55 million, respectively (Company: Baht 1,000.0 million and Baht 997.18 million respectively). A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

42. Post balance sheet event

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On 20 February 2012, a meeting of the Company’s Board of Directors passed a resolution to propose that the Annual General Meeting of shareholders to be held on 29 March 2012 adopt a resolution to pay a dividend of Baht 0.42 per share, or a total of Baht 698.77 million, from net profit for the year 2011. A 2011 interim dividend payment of Baht 0.12 per share, or a total of Baht 199.65 million, was paid to shareholders, from the earnings of the six months ended 30 June 2011, on 20 September 2011 according to the resolution of the Board of Directors no.10/2011 on 22 August 2011. The final dividend payment of Baht 0.30 per share, or a total of Baht 499.12 million, is to be paid and recorded after approved by the 2011 Annual General Meeting of shareholders.

| Annual Report 2011

Related Parties Transactions The Company and its affiliates engaged in the related parties transactions with the major shareholders; comprising the Provincial Waterworks Authority (PWA), the Industrial Estate Authority of Thailand (IEAT), Electricity Generating Public Company Limited (EGCO) and EGCOM Tara Co., Ltd. of which held 74.19% of shares by EGCO Engineering Service Co., Ltd., a subsidiary of EGCO. In this regard, the related parties

transactions are presented in the Notes regulations, notifications, orders, to the financial statements item 37. or the regulations of the Stock Exchange of Thailand, including Policy and Direction of the Future following Procedures of the Disclosure, Related Parties Transactions Related Parties Transactions, and the The Company shall perform the future Acquisition or Disposal of significant related parties transactions with Assets. fairness and follow the market situation Additionally, the related parties as in general business characteristic. transactions shall be disclosed in Notes The Company shall conform with of the financial statements which are the Securities and Exchange law, examined by the Companyâ&#x20AC;&#x2122;s auditors.

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The Remuneration of Auditors At the 2010 Annual General Meeting of Shareholders was held on 24 March 2010 has resolved to approve the appointment of Mr. Vichien Khingmontree Certified Public Accountant (Thailand) No. 3977 or Mr. Prasit Yuengsrikul Certified Public Accountant (Thailand) No. 4174 or Mr. Sudwin Panyawongkhanti Certified

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Public Accountant (Thailand) No. 3534 of PricewaterhouseCoopers ABAS Limited as the Company’s auditors. Any one of the auditors shall be authorized to conduct the audit and express an opinion on the Company’s financial statement for the fiscal year 2011, beginning January 1, 2011 through ending December 31,

2011. The Auditors’ remuneration for the Company in the number of Baht 940,000 (Nine hundred and forty thousand baht only) and its group Companies in the number of Baht 2,300,000 (Two million three hundred thousand baht only)

General Information Name Eastern Water Resources Development and Management Public Company Limited Type of Business The Company is responsible for water resource development and management through main water pipeline systems for distribution to customers. In addition, the Company provides clean water production system consultancy service, including water pipeline systems consultancy service in industrial estates or factories, maintenance services, supply-purchase all types of water pipelining material and machinery, as well as consultancy service for maintenance of water pipeline and machinery and equipment, and participates in joint venture projects with private sectors. Head Office Eastwater Building, Floor 23-26, 1 Vipavadeerangsit Soi 5, Vipavadeerangsit Road, Jomphol, Jatujak, Bangkok 10900 Registered No 0107539000316 (Form Registered No.was Bor Mor Jor .632) Website www.eastwater.com Telephone (662) 272-1600 Fax (662) 272-1601 to 3 The Companyâ&#x20AC;&#x2122;s common Shares As of December 31, 2011, the Companyâ&#x20AC;&#x2122;s registered and paid-up capital are as follows: Registered capital of 1,663,725,149 shares with a par value of Baht 1 per share, totaling Baht 1,663,725,149. Paid-up capital of1,663,725,149 shares with a par value of Baht 1 per share, totaling Baht 1,663,725,149 Reference Firm Securities Registrar Securities Depository Co., Ltd. (Thailand) (Common Stock), 62 The Stock Exchange of Thailand Building, Ratchadapisek Road, Khlongtoey, Bangkok 10110. Telephone (662) 229-2800 Fax (662) 654-5427 Accouting Auditor PricewaterhouseCoopers ABAS Limited 179/74-80 62 15th Floor,Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Telephone (662) 286-9999 Fax (662) 286-5050

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Lists of companies in which the Company holds more than 10% of shares name Type of business Type of share Registered and No. of paid-up capital Shares (%) (million Baht) Manage waterworks Common 510 100 Univer Utilities Company Limited (uu) business and wastewater Share Eastwater Building Fl.23-25,1 Vipavadeerangsit treatment system in the Soi 5, Jomphol, Jatujak Bangkok10900 form of concession, hiring Telephone: (662)272-1688 contract and leasing Fax: (662)272-1690 to 2 contract Manage tap water business, Nakornsawan Water Supply Company Limited 40 UU holds including produce and Common (WTS) 99.9999875 supply tap water to the Share Eastwater Building Fl.23-25,1 Vipavadeerangsit Provincial Waterworks Soi 5, Jomphol, Jatujak Bangkok10900 Authority at Nakornsawan Telephone:(056)256-690 and (662)272-1688 Office and to consumers Fax:(056)256-526 and (662)272-1690 to 2 Bangpakong Water Supply Company Limited Eastwater Building Fl.23-25,1 Vipavadeerangsit Soi 5, Jomphol, Jatujak Bangkok10900 Telephone:(038)539-365 and (662)272-1688 Fax:(038)539-368 and (662)272-1690 to 2

Manage tap water business, including produce and Common supply tap water to the Share Provincial Waterworks Authority at Bangpakong Office and to consumer

Chachoengsao Water Supply Company Limited Eastwater Building Fl.23-25,1 Vipavadeerangsit Soi 5, Jomphol, Jatujak Bangkok10900 Telephone:(038)814-427 and (662)272-1688 Fax:(038)814-427 and (662)272-1690 to 2

Manage tap water business, including produce and supply tap water to the Provincial Waterworks Authority at Bangpakong Office and to consumer

Egcom Tara Company Limited, EGCO Tower, 222 Moo 5, Vipavadeerangsit Road, Tungsonghong, Laksi, Bangkok 10210 Telephone: (662)998-5710 Fax : (662) 955-0937

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Produce and supply tap water

UU holds 99.9999875

Common Share

100

UU holds 99.9999875

Common Share

345

15.88

The List of Top 10 Major shareholders As of 30 December 2011 No.

Shareholder

Number of Shares

Percentage

Provincial Waterworks Authority

668,800,000

40.20%

Electricity Generating Public Company Limited

311,443,190

18.72%

3 NORBAX INC.,13 4 The Industrial Estate Authority of Thailand 5 Thai NVDR company Limited 6 BNP PARIBAS (securities services, London branch) 7 Aberdeen Long Term Equity 8 Aberdeen Growth 9 American International Assurance company, limited-TIGER

169,324,700

10.18%

10 HSBC (Singapore) nominees PTE LTD 11 Other (2,489 Shareholders)

Total

76,000,000

4.57%

40,716,050

2.45%

38,912,100

2.34%

22,584,300

1.36%

18,356,700

1.10%

16,778,000

1.01%

16,670,800

1.00%

284,139,309

17.08%

1,663,725,149

100.00%

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Dividend Payment Policy

The Company’s Board of Directors has the policy to propose to the shareholder’s meeting for consideration of dividend payment to shareholders of no less than 30% of parent shareholder’s equity of its consolidated net profit of each year after deduction of legal reserves. It is also subjected to the justifications and considerations that the Company deems appropriate.

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Eastern Water Resources Development and Management PLC. Eastwater Building, Floor 23-26, 1 Vipavadeerangsit Soi 5, Vipavadeerangsit Road, Jomphol, Jatujak, Bangkok 10900 Tel : 02-272-1600 Fax : 02-272-1601 www.eastwater.com