PTT: Annual Report 2011

Annual Report 2011 PTT Public Company Limited

STABILITY

SUSTAINABILITY

PTT Public Company Limited

Annual Report 2011

Contents Financial Highlights ...... 012 PTT Information ...... 015 Message from the Board of Directors ...... 016 Report of the Audit Committee ...... 020 Report of the Corporate Governance Committee ...... 022 Report of the Remuneration Committee ...... 024 Report of the Nominating Committee ...... 025 Economic and Petroleum Overview ...... 026 Nature of Business and Business Performance ...... 036 Power for Sustainable Future ...... 072 Quality, Security, Safety, Health and ...... 084 Environmental (QSHE) Management for Organizational Excellence Financial Status and Performance ...... 090 PTT and its AfďŹ liates ...... 098 Structure of PTT Revenue and ...... 099 Subsidiaries by Product Line Connected Transactions ...... 101 Review of Business Assets ...... 104 Risk Factors ...... 105 Capital Structure ...... 111 Management Structure and ...... 118 Corporate Governance PTT Board of Directors ...... 170 PTT Executives ...... 178 Awards of Success ...... 188

PTT Public Company Limited

Annual Report 2011

Power for Sustainable Future means strengthening of the foundation for our country in all aspects-energy security, economic driving forces, human capability, inspiration for good deeds, and a careful balance of stepping onto the world stage while promoting community forums.

To achieve the robust growth for the kingdom toward true sustainability.

PTT Public Company Limited

Annual Report 2011

Security

PTT Public Company Limited

Annual Report 2011

Sustainability

At PTT, our bottom line is measured through business and public interests alike. While energy security does matter, it is also our mandate to create awareness of people’s rights and duties in striking a balance for energy and natural resource consumption, since energy security indeed leads to sustainable economic security. As the national energy company, therefore, we must generate not only revenue, but also smiles, for Thais.

#1

GLOBAL

PTT Public Company Limited

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

World- class means World- conscious.

BIG

To PTT, becoming a world-class business entity through conventional thinking is only a part of our aspiration. We must start thinking outside the box by also becoming a Technologically Advanced and Green National Oil Company (TAGNOC) that takes a 360degree view of the world. After all, we are convinced that a sustainable world today will materialize only with tech-savvy, skilled personnel.

#2

PTT Public Company Limited

Annual Report 2011

KNOWLEDGE

LO

PTT Public Company Limited

ONG

Annual Report 2011

Knowledge makes for a better future. There is a big difference between “tomorrow� and “future�. At PTT, knowledge and creativity keep PTT, Thais, and the world on a relentless march to security. At the crux, however, is how not to cling to past successes, but instead how to create dynamic innovations and new knowledge. That knowledge comes from one’s appreciation of one’s own way of life and surroundings-and then turning it into a leading to sustainable contentment.

#3

PTT Public Company Limited

Annual Report 2011

S SYNERGY

PTT Public Company Limited

Annual Report 2011

STRONG When the sum is greater than the individuals.

Synergy arises when people start thinking laterally-by supporting each other, optimizing strengths, and turning shortcomings into out, our capability grows by leaps and bounds. Likewise, for Thai energy strength and true synergy, we need only to open up to each other. As a result, it is PTT’s mandate to work with Thais in growing the awareness of conservation and conscientious resource use while striving for energy sustainability.

PTT Public Company Limited

PTT GROUP VISION

Annual Report 2011

THAI PREMIER MULTINATIONAL ENERGY COMPANY

PTT GROUP MISSION COUNTRY

SOCIETY

To conduct integrated energy and petrochemical business as the nation's energy company

SHARE HOLDERS

EMPLOYEES

whose mission is to equally respond to all stakeholders through the following aspects: PARTNERS

CUSTOMERS

To the country Ensuring long-term energy security by providing sufďŹ cient high-quality energy supply at fair prices to support economic growth.

To shareholders Operating profitable business that leads to sustainable growth while generating optimum returns.

To business partners Conducting fair business practice with all partners while promoting trust, relationship, and cooperation to expand business capability and increase efďŹ ciency in long-term business partnership.

To community and society Maintaining a good standing corporate status in Thai society by exercising environmental stewardship of internationally accepted standards and helping to improve the quality of life for community and society.

To customers Ensuring customer satisfaction and loyalty by delivering world-class quality products and services at fair prices.

To employees Promoting capability building professionally and ensuring employees' well-being is on the level with other leading companies in order to embolden organization/ employee bond.

PTT STRATEGIC FRAMEWORK High Performance Organization

Sustainable Growth Corporate Governance

Corporate Social Responsibility

PTT Public Company Limited

Annual Report 2011

BIG

LONG

BIG LONG STRONG

STRONG

A world class Company to be listed in Fortune 100 by 2020 A Company with sustainable growth to be listed in DJSI in 2013 Operational excellence to achieve Top Quartile Performance by 2020

PTT GROUP VALUES

S P I R I T Synergy

Performance Excellence

Innovation

Responsibility for Society

Integrity and Ethics

Trust & Respect

PTT Public Company Limited

Annual Report 2011

Financial Highlights

Statement of Income

2009

2010

2011

1,586,174 142,704

1,898,682 170,330

2,428,165 210,748

59,548

83,992

105,296

1,102,544 604,453 429,180 498,091

1,229,109 671,695 480,704 557,414

1,402,412 758,464 555,920 643,948

(Million Shares) (Baht) (Baht) (Baht) (%) (Baht)

2,833.78 151.82 21.06 8.50 40.36 246.00

2,849.04 169.31 29.58 10.25 34.65 320.00

(%) (%) (%) (Times) (Times) (Times) (Times)

3.68 14.65 5.99 1.21 0.50 1.74 10.07

4.35 18.46 7.20 1.21 0.41 1.35 12.30

(Million Baht)

Sales and Service Income Earnings before Finance Costs, Income Taxes, Depreciation, and Amortization including Other Non-operating Income and Expenses (EBITDA) Net Income (Loss) Statement of Financial Position

(Million Baht)

Total Assets Total Liabilities Total Equity Attributable to Equity Holders of the Company Total Shareholders’ Equity Shares or Information about Common Shares

Shares and Fully Paid-up Share Capital Book Value per Share 1/ Earnings per Share 1/ Dividend per Share Dividend Payout Ratio to Net Income Share Price at the End of Financial Period

2,856.30 194.85 36.91 13.00 2/ 35.22 318.00

Financial Ratios

Net Income to Total Revenues Return on Equity Return on Total Assets Debt to Equity Net Debt to Equity Net Debt to EBITDA Interest Coverage

4.26 20.32 8.00 1.18 0.44 1.33 13.24

Remarks : 1/ Based on the weighted common shares of 2,826.903 million (as of December 31st, 2009), 2,839.222 million (as of December 31st, 2010) and 2,853.013 million (as of December 31st, 2011). 2/ The Board of Directors, on February 17 th, 2012, approved the rate of dividend paid to the shareholders, which will be tabled for the 2012 AGM’s approval on April 10 th, 2012.

PTT Public Company Limited

Annual Report 2011

Sales and Service Income

Unit : Million Baht

Net Income

Unit : Million Baht

PTT Public Company Limited

Statement of Financial Position

Annual Report 2011

Unit : Million Baht

Financial Ratios Return on Equity (%)

Return on Total Assets (%)

Debt to Equity (Times)

Net Debt to Equity (Times)

Net Debt to EBITDA (Times)

Interest Coverage (Times)

PTT Public Company Limited

Annual Report 2011

PTT Information Name Initial Registered Number Type of Business

Registered Capital Paid-up Capital

Location

Corporate Communications Department Investor Relations Department

OfďŹ ce of the President and Corporate Secretary

References á 2G@QD 1DFHRSQ@Q

á TCHSNQ

á 1DFHRSQ@Q

PTT Public Company Limited PTT 0107544000108 Engage in petroleum business via investment through subsidiaries, joinly controlled entities, and associated (Group of companies) who operate upstream and downstream petroleum businesses and coal business. 28,572,457,250 baht, including 2,857,245,725 common shares, 10 baht per share (as of December 31st, 2011) 28,562,996,250 baht including 2,856,299,625 common shares, 10 baht per share (as of December 31st, 2011) 555 Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900, Thailand Telephone : 66 (0) 2537-2000 Telefax : 66 (0) 2537-3498-9 Website : http://www.pttplc.com Telephone : 66 (0) 2537-2150-1 Telefax : 66 (0) 2537-2169, 66 (0) 2537-2171 E-mail : corporate@pttplc.com Telephone : 66 (0) 2537-3518 Telefax : 66 (0) 2537-3948 E-mail : ir@pttplc.com Telephone : 66 (0) 2537-3885-6 Telefax : 66 (0) 2537-3883 E-mail : corporatesecretary@pttplc.com Thailand Securities Depository Company Limited 4th Floor, SET Building, 62 Ratchadapisek Road, Klongtoey, Bangkok 10500 Telephone : 66 (0) 2229-2888 Telefax : 66 (0) 2229-2800 Rama VI Road, Phayathai, Bangkok 10400 Telephone : 66 (0) 2271-8000 Telefax : 66 (0) 2618-5807 Siam Commercial Bank Plc. Registrar 1, Markets Operations Division 2nd Building, 3rd Floor, 1060 Petchaburi Road, Ratchatawee, Bangkok 10400 Telephone : 66 (0) 2256-2323-8 Telefax : 66 (0) 2256-2406 Corporate Trust Sales, Corporate Trust 9 Ratchadapisek Road, Chatuchak, Bangkok 10900 Telephone : 66 (0) 2544-3937, 66 (0) 2544-2923 Telefax : 66 (0) 2937-7662

PTT Public Company Limited

Annual Report 2011

Message from the Board of Directors

Dr. Norkun Sitthiphong Chairman of the Board

Dr. Pailin Chuchottaworn President & CEO

PTT Public Company Limited

Annual Report 2011

Dear Shareholders, In the auspicious year of 2011, in which His Majesty the King turned 84; PTT Group and alliance humbly presented to Her Royal Highness Princess Maha Chakri Sirindhorn ! (Tambon Withi Phaw Pheang),� an ongoing body of works collected from PTT’s own implementation of the “84 Tambons " " # $ & # presented in her gracious presence at the inauguration of the exhibition entitled “United Thais Pay Tribute to His Majesty ' * + $ "&& < August 31st this year. This collection of knowledge resulted = way of life to form a stronger, self-reliant community and society. This royal initiative has also been adopted by PTT Group in our striving for energy security - a key fundamental for the nation’s economy and society - in tandem with our stewardship of society, community, and the environment. The demonstration of our cause is evidenced in the project entitled the vetiver Development and Campaign Accorddig to the Royal Initiatives operated by PTT in its sixth year, which this year won “The King of Thailand Vetiver Award� for the second time. Another attestation is the Green Globe Award, an extended program from the “Reforestation Project in Honor of His Majesty the King on the occasion of the 50th Anniversary of the Accession to the Throne;� Dating back to 1999, which won this year’s “National Outstanding Project Award (conservation of natural resources and the environment)� from the National > ?

" " J Q Our performance this year is nothing short of incredible; despite numbers of detrimental factors, being it the domestic economic slowdown in line with the global economy, the natural disaster in Japan in March, and Thailand’s own Great Floods late in the year. PTT’s outstanding performance was

due to the business synergy of PTT Group under the directions, Y "&& &<Z [\ ][^ all PTT Group companies (at PTT’s prorated equity shares), &<Z _` {_{ "&& &<Z |{_ ]}^ &<Z ] []` |^_ million in sales revenue, and THB 210,748 million in EBITDA. PTT’s performance this year yielded THB 63,000 million in remittance to the state, of which THB 39,000 million in corporate income tax and THB 24,000 million in dividends - to be spent on national development and improvement of living standard for the public. To elaborate on our improved performance, this could be contributed by the higher product prices driven by world markets and the higher sales volumes almost across the board being it gas separation plant (GSP) products, the petrochemical For the Gas Business Unit, notable successes included greater ? ~ €  ‚ Q receiving terminal managed by PTT LNG Co., Ltd., to accommodate the rising national demand, the commercial start-up of GSP Unit 6, and successful debottlenecking at GSP Unit 5. Remarkable achievements of the Petrochemical and ƒ "&& Global Chemical Plc., (PTTGC), resulting from the merging of "&& ? " "&& ƒ " „ "&& Y the start-ups of several polymer plants under PTTGC, HMC Polymers Co., Ltd., the Bis-phenol A Project of PTT Phenol Co., Ltd., and the jetty and petrochemical tank farm managed by PTT Tank Terminal Co., Ltd. In addition, to strengthen

PTT Public Company Limited

Annual Report 2011

PTT Group’s competitiveness, PTT and other three subsidiaries set up PTT Energy Solutions Co., Ltd., to provide Group companies with engineering technical services in the company’s effort to become a Technical Center of Excellence.

For instances, our investment in the promising coal business by acquiring shares in Straits Resources Limited and our jointventure in a hydropower plant in Lao People’s Democratic Republic.

For the 19th consecutive year, we still maintained our Â…_ `† market share (a 1.3% rise from last year) and for lubricant products for the third consecutive year. We sold 8% more fuels and 1.3% more lubricant products than last year. Thanks to our growing number of service stations with integrated retail businesses, PTT service stations also won “Quality and Safe Service Stations Awards,â€? presented by the Department of Energy Business, together with a “Thailand’s Top Brand – Platinum Award,â€? presented by Reader’s Digest magazine. Also, the CafĂŠ Amazon was awarded a “Thailand Franchise Quality Award 2011,â€? presented by the Department of Business Development: And in an attempt to internationalize its service standard, PTT founded the CafĂŠ Amazon Coaching Academy to serve as a training facility to our operators.

Apart from managing these individual business entities, "&&

„ on the level with other leading multinational corporations. To this end, we have applied the Thailand Quality Award (TQA) standards and have been so impressively successful to win the second TQA through our own Natural Gas Transmission group. PTT was also one of seven state enterprises to have adopted the State Enterprise Performance Appraisal (SEPA), in total # = "

J ‰

strategic directions in response to public policies. As a result, this year PTT, again, won the “Best State Enterprise of the Year: Best of the Best� for three successive years, “Outstanding Innovation� for two consecutive years, and “Induction to the Hall of Fame� on the basis of our attaining the “Outstanding Leadership Award� for three consecutive years.

This year the International Trading Business Unit successfully sharpened its competitive edge by growing petrochemicals, thus paving the way for business capacity building. For instance, we signed a crude oil purchase agreement for Seria Light crude oil with Brunei Shell Petroleum Co. Sdn. Bhd., and a long-term Bis-phenol A sales agreement with Singapore Chemhub PTE LTD., together with initiation of out-out trading of Indonesian coal to China to grow our trade value in alternative-energy markets under PTT Group’s core strategy. For the expansion of our international investment, along with continued increasing in their productivity. Also as important is the consideration for more investment opportunities in related downstream businesses to build on

As a commitment to business-driven technical expertise through environmentally friendly technology, we are sparing no resource to explore other alternative-energy products that can be further developed to establish viable sustainableenergy businesses in the future. A notable example is bio-jet fuels, which lower aviation emissions under the Emission Trading Scheme (ETS) enacted in European countries: To a satisfying result, we conducted an experiment with Thai Airways International Plc’s planes. Another is PTT Bi-Fuel =?‹ on indigenous natural gas. To support the technology, in collaboration with Mitsubishi Chemical Corporation, we set up PTT MCC Biochem Co., Ltd., to develop a project

PTT Public Company Limited

Annual Report 2011

Z ~Z € ÂŒ plant to produce sugar-based Polybutylene Succinate (PBS) "&& Â? biodegradable cup for CafĂŠ Amazon, and developed other * For example, the “PTT Corrosion Inhibitorâ€? which is designed to prevent corrosion in gas pipelines; also, we came up with an electro-magnetic machine (EM machine) to eliminate grease found in oil pipelines and oil transportation compartments used in exploration and production work. Other than ensuring Thailand of energy security, PTT crisis management skills for uninterrupted business in all situations, to reassure stakeholders of the least impact in any event of crisis. For instances, the offshore gas pipeline leak and the Great Floods; thanks to our highly responsive crisis "&& ever in Thailand, Business Continuity Management (BCM) ~&> > ]]Â…{|Â?]__…€ J ? > ~& € ‘ "&&Q ability to overcome any crisis. During the Great Floods, our key missions, as the nation’s

security by providing undisrupted energy supply so businesses could continue to deliver their services to consumers as usual. PTT also took our part in supplying fuels to missions from public organizations, the military, the private sectors, and the mass media in relieving people’s plight. We also raised our capability by launching two key projects (“PTT Group Unites Thai Power to Relieve Flood Victims� and “PTT Group Unites Thai Power to Rehabilitate Flood Victims�) in an attempt to

„ three operational phases were being integrated - prevention, remedial and relief, and restoration.

PTT’s operational performance has gained extensive public acceptance as well as other recognitions; both domestic and international, namely management, product and service quality, corporate governance, and social responsibility. Probably, the most important of all was the “Thailand Corporate Excellence Award 2010,� bestowed by Her Royal Highness Princess Maha Chakri Sirindhorn, in conjunction with “The Best of the Best of the Prime Minister’s Export Awards 2011.� Then there was this year’s “Excellent� rating of the 2011 Corporate Governance Report of Thai Listed Companies, a “SET Award of Honor,� for winning three consecutive years (2009-2011) of “Top Corporate Governance Report Awards.� Other accolades include “Best Corporate Social Responsibility Awards� at the SET Awards 2011 and the “Thai Bond Market Association’s Deal of the Year Award for 2010.� On international front, we won an “Asian Excellence Recognition Award 2011� (Corporate Governance Asia magazine), the “Prestigious Platinum Award� for the third successive year (The Asset magazine), and a “Platts Global Energy Award 2011� at the Top 250 Energy Company Award ceremony. Finally, this year PTT was ranked 171st in 2011 Forbes Global 2000 magazine, and 128th in Fortune Global 500 magazine. On behalf of the Board of Directors, we sincerely appreciate all stakeholders’ continuing trust and support that enable PTT to consistently grow even more successful. As the nation’s leading energy company, PTT is ready to respond to your resolution to a stronger Thai society with business philosophy in accordance = > ’ years of knowledge as a problem-solving tool, thus, leading to a genuinely sustainable development path.

PTT Public Company Limited

Annual Report 2011

Report of the Audit Committee Dear Shareholders

(Mr. Chulasingh Vasantasingh) Chairman of the Audit Committee

The Audit Committee consists of three independent directors who are knowledgeable and experienced in law,

’ J Chulasingh Vasantasingh, with Mr. Arkhom Termpittayapaisith and Mr. Krairit Euchukanonchai as members. This year the committee underwent a series of composition changes during the year as a result of Board of Directors Orders No. 4/2011, 10/2011, and 14/2011, which appointed Mr. Vasantasingh in place of Mr. Ampon Kittiampon as Chairman, effective from April 29; Mr. Euchukanonchai in place of Mr. Bhusana Premanode, effective from November 10; and Mr. Termpittaya paisith in place of Mr. Sommai Khowkachaporn, effective from November 25. This year the committee carried out its Board-assigned duties while adhering to PTT’s criteria and guidelines for the Audit Committee, which align with the regulations of the Stock Exchange of Thailand (SET). Given PTT’s expanding businesses and more international investments in the midst of �

Q on conformance to good corporate governance as well as good internal controls by “ Focusing on preventive audit to promote systematic business conduct, with knowledge creation mechanisms for "&& accurate job performance and prevention of mistakes. “ Valuing risk management, particularly procedures for management tools. This year the committee held 14 meetings with the audit, as summarized below. 1. Review of ďŹ nancial reports. The committee ” = ” were examined, the external auditor was in attendance. The committee asked the external auditor about PTT’s complete and accurate presentation, adjustments for key accounting entries materially affecting the statements, adequacy of accounting entry methods, scope of audit, accuracy and adequacy of information disclosure, and the external auditor’s

PTT Public Company Limited

Annual Report 2011

and securities exchange, SET requirements, and other laws relevant to its business (particularly those concerning connected transactions among PTT Group) to ensure that PTT had conducted regular business under normal and sensible conditions. In addition, the committee carried out its own performance assessment, both as a whole and individually, against state

=& & were that its performance was of a ‘very good’ quality. 5. Oversight of internal audit. The committee annual and three-year audit plans, as well as their implementation. & to follow up the corrective actions of those items considered ” controls. The committee approved PTT’s amended regulations on the committee’s criteria and guidelines together with PTT’s requirements for internal audits and a related manual in line with international standards. Finally, it reviewed the annual budget recruitment, and rotation plans, training, assessment of resource adequacy and suitability, key performance measurement 3. Review of internal audit effectiveness. indicators (KPIs), as well as appointments and transfers, and the & annual merit consideration for its head. In addition, the committee corporate audit, the committee reviewed the internal control

system for each quarter with a focus on execution, resource principles: systematic and preventive work approach, modern application, stewardship of properties, and prevention or business acumen and continuous development of its personnel minimization of errors, losses, waste, and frauds. It also reviewed to accommodate PTT’s business directions and international Q and cabinet resolutions. The external auditor agreed that no responsibility (CSR) role. 6. Appointment of the external auditor for

& year, PTT also assessed its internal controls against the regulations 2012. &

of the auditor commission on internal control standards of 2001, of the auditor-general as PTT’s external auditor for 2012 to the with greater cooperation from executives in responding to such Board, which will in turn submit it for shareholders’ approval at ” ‰

their 2012 AGM. techniques for internal controls have been added along with In summary, the audit committee values internal control � & J corporate audit concluded that PTT’s internal control system was and continuous risk management so that PTT may command good corporate governance as well as management excellence, both adequate and effective for its business. 4. Review of good corporate governance. The adequate internal control compatible with its business, effective committee reviewed PTT’s performance against the designed risk management, together with accurate and reliable accounting processes and found that PTT’s business had been conducted with fairness, and PTT had complied with laws on securities laws and regulations.

independence. Satisfactory answers to these questions ensured

"&&Q legal and accounting standard requirements under generally accepted accounting principles, that the accounting reliable, and that adequate and timely information had been users of such statements. This year the committee and the external auditor held one meeting in the absence of the management to examine the external auditor’s scope, approaches, and annual audit plan. 2. Review of risk management. The committee scrutinized PTT’s risk management policy, plans and approaches

impacts of natural disasters, and other event risks. It also reviewed internal and external risk factor management practices, including those arising from public-sector supervision and policies. To this end, the committee held quarterly meetings with Â’ risk management processes and provide recommendations for improvement.

PTT Public Company Limited

Annual Report 2011

Report of the Corporate Governance Committee Dear Shareholders The PTT Board of Directors highly values the promotion and emphasis of PTT’s execution by the corporate governance principles, the code of conduct, and the CSR framework of PTT Group for this improves PTT’s corporate governance The Board has assigned the Corporate Governance Committee, consisting of three independent directors, to propose corporate governance guidelines to the Board, oversee the work of the Board and the management and ensure compliance with corporate governance principles and alignment with the Stock Exchange of Thailand’s (SET) corporate governance principles, and the international elements of The Organisation for Economic Cooperation and Development. The committee’s duties also encompass social, community, and environmental responsibility. This year the committee held two meetings to follow up work under the corporate governance plans, and social, community, environmental, and sustainable development plans, as summarized below: Disclosure of information and transparency (Mr. Surapon Nitikraipot) Chairman of the corporate governance committee February 10, 2012

“ – ‰ _^�| with disclosure of PTT’s performance in quarterly reports and material information for shareholders, investors, and the public, marked by essential completeness, adequacy, credibility, and timeliness, continually through various channels, including SET’s channels and PTT’s website (www.pttplc.com). Investor Relations Department and Corporate Communications Department are the core units for information distribution. “ – "&& Q ? ƒ ƒ ]{|| Reporting Initiative (GRI) Generation 3 (G3) and set a goal of A+ assessment, due for completion by March 2012. “ " ” !< $ # holders to communicate messages and foster positive relations between PTT and its debenture holders. “ "&&

& Rights of the shareholders

“ ’ ]{|| J

shareholders (AGM) and provided to the shareholders the date and time, venue, and agenda, as well as all other relevant data that are adequate and timely “ > J such information at PTT’s website ahead of the time the meeting

PTT Public Company Limited

Annual Report 2011

notices went out. This would ensure that the shareholders have enough time to examine supporting documents well ahead of the AGM. PTT also made it easy for shareholders to exercise their full rights of attendance and voting. Thanks to these actions, PTT received full 100 marks against the AGM checklist, scored by the Thai Investors Association. Equitable treatment of shareholders

“

and nominate directors ahead of the 2011 AGM from October ]` – …{ ]{|{ "&& “ ƒ ” information about their vested interests and those of their related persons for the year to enable the Board to examine "&&Q „ decide matters in the best interests of PTT as a whole. “ ƒ ”

„ & year, no essential item needed remedial action. “ ƒ ” their shareholding as required by law. The corporate secretary compiles these reports and reports to the Board every month. Board responsibility

“ ƒ ”

Z * assessment, self-assessment, and cross-assessment. The year saw “excellent� assessment all around. “ = ’ & > – ~> –€ the Successful Formulation & Execution of Strategy, and other courses organized by the Thailand Management Association = " “ ‹ ƒ Korea and acquired information for consideration of founding a PTT Group university in Rayong. “ <

a year. Valuing stakeholders

“ = "&& „ „ ]{|| the “PTT Group Unites Thai Power to Fight Floods� project to provide urgent, all-out, and continued relief. “ – community development work. “ – responsibility for supply and terminal operations and another for corporate social responsibility and corporate governance for PTT’s corporate units.

Social responsibility and sustainable development

“ = sustainable development work, with the goal of being ranked among the Dow Jones Sustainability Indexes (DJSI). “  –™ > through third-party assurance of CSR/SD framework. Also, "&& Q business management. “ & Z "&& Group university in Rayong. Awards of pride

Thanks to the earnest commitment to, and intention for, operating with transparency and fairness in the best interests of all stakeholders, this year saw worldwide recognition of PTT’s corporate governance and corporate social responsibility practices, including: “ = ]{|| ? Report of Thai Listed Companies, presented by IOD in cooperation with SET and Securities and Exchange Commission (SEC). “ =& <

(2009-2011) of Top Corporate Governance Report Awards and Best Corporate Social Responsibility Awards at the SET Awards 2011. “ ? ƒ for the sixth consecutive year by Corporate Governance Asia magazine. “ Z ? & FinanceAsia magazine. “ &

‚ Project for 2011 (natural resource and environmental € ‚ >

" " J Q “ & ' & š ]{|| promotion and technology transfer of the vetiver system (private operation). The award was bestowed by HRH Princess Maha Chakri Sirindhorn at the Fifth International Seminar on Vetiver, held in Lucknow, India. The Corporate Governance Committee will remain committed "&& community, society, the environment, and all stakeholders, &

PTT Public Company Limited

Annual Report 2011

Report of the Remuneration Committee Dear Shareholders

Under PTT Plc’s Articles of Association, the Remuneration Committee - chosen from and appointed by the Board of Directors - numbers at least three, one of whom must be an & ?

for the Board and the President & CEO through fair and sensible criteria of compensation procedures.

(Mr. Arkhom Termpittayapaisith) Chairman of the Remuneration Committee 10 February 2012

The Committee carried out its duties prudently, carefully, and sensibly. One meeting was held during the year to examine the compensation for the Board and the President & CEO by comparing their performance and accomplishments against ‰ the Board, the assessment methods consisted of overall assessment, self-assessment, and cross-assessment of directors. ‰ " › ?= ?

indicators at the beginning of the year to be assessed at the year-end, taking into consideration his corporate leadership leading to success. As for their compensation scrutiny, the Committee considered directors’ responsibilities, business size, economic situations, execution against performance, and a comparison with the rates of compensation at peer leading companies, both in and outside the Stock Exchange of Thailand. Directors’ compensation rates have remained constant since 2005. For transparency, the Committee has disclosed directors’ compensation, committee members, and management team members in this annual report.

PTT Public Company Limited

Annual Report 2011

Report of the Nominating Committee Dear Shareholders

Under PTT Plc’s Articles of Association, the Nominating Committee - chosen from and appointed by the Board of Directors - numbers at least three, one of whom must be an independent director. It recruits and nominates directors or " › ?= criteria for transparency, fairness, and goal accomplishment under the corporate direction. This year the Committee performed prudently, carefully, and sensibly. Six meetings were held during the year to ’ ” ” > with an opportunity to nominate directors. (Mr. Watcharakiti Watcharothai) Chairman of the Nominating Committee 10 February 2012

& completed his or her term, the Committee nominates candidates for the Board’s consideration before forwarding the names Q

& a given position vacated by a director resigning during the year, the Committee nominates candidates for the Board’s appointment. Details have been disclosed for transparency and scrutiny in this Annual Report.

PTT Public Company Limited

Economic and Petroleum Overview

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

2011 Review World Economic Review

The world economic growth this year ended up far below anticipated. Developing and emerging economies, led by China and India, were the main drivers of global economic growth as a result of their stringent monetary policies to curb rising prices of oil and commodities while the economic growth of developed economies was continuously weakening. The US economy remained sluggish following the continued high unemployment, a non-recoverable property market, and limited success of the US government’s economic stimulation > |[ … ‹ œ Standard & Poor’s (S&P) consequently lowered the credit rating on the US long-term debt securities from AAA to AA+, a historic credit rating cut for the US. EU member countries, on the other hand, failed to resolve the huge public debts. The debt crisis has escalated from Greece, Ireland, and Portugal to Italy and Spain, two major regional economies. Consequently, S&P and Moody’s Investors Service (Moody’s) slashed credit ratings which triggered a series of blows to the world monetary and capital markets. In addition, the Great Earthquake and Tsunami of Japan devastated the global industrial supply which caused 2009-2011 World Economic Growth Unit: % yoy

Source: IMF, January 2012

major shortages of parts and materials for manufacturing worldwide, thus compounding the world economic contraction. The International Monetary Fund (IMF), in its January 2012 report, announced a world economic growth record for 2011 at 3.8%, a big drop from the 2011 level of 5.2%. The average economic growth for developing and emerging economies was recorded at 6.2%, while the record for developed countries was only 1.6%.

PTT Public Company Limited

Petroleum and Petrochemical Review

The world economic growth continued to drive the oil demand higher from 2010 by 0.7 million barrels per day to an average of 89.0 million barrels a day in 2011, according to the International Energy Agency (IEA) 's January report in 2012. Developing and emerging economies, particularly China, India, and the Middle East were the main sources of higher demand. The actual oil demand this year was not much higher. However, the political unrest in Middle Eastern and Northern African countries (MENA) since 2009 had strained supply in the world oil market. IEA decided to call for its member countries to release 60 million barrels from the Strategic Petroleum Reserves to offset the 1.6 millionbarrel a day shortfall from Libya, following the escalating political unrest in that country. The depreciation of US dollar currency and oil forward speculations pushed the average – \` { ‹ œ ]{|{ |{^ … ‹ œ & „ &

& Œ ‰ & }_� # `` … ‹ œ ]{|{ ||} ` ‹ œ �" Z ’ An unusual cold weather early this year and the import levy reduction for diesel in China from 6% to 0% drove the average `} [ ‹ œ ]{|{ |][ ^ ‹ œ ]{|] ‰ \] … ‹ œ |{| ] ‹ œ for electricity in Japan as a result of nuclear power plants shutdown after the earthquake and tsunami tragedy in March. With rising oil prices and higher demand for natural gas in the petrochemical industry, the average contract price of ” ~ " ?"€ \|] ‹ œ ]{|{ `[^ ‹ œ & � ` ]\ ‹ œ [ _` ‹ œ barrel in 2010.

Global Oil Demand, 2009-2011 Unit: MBPD .8%

Growth 0

.1%

th 3

w Gro

Source: IEA, January 2012

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

Prices of Dubai crude and refined petroleum products, 2009-2011 *

*

Prices of Petrochemical Products in Asian Market, 2009-2011 *

Source: ICIS

*

This year, the overall prices of petrochemical products rose in parallel to the prices of crude oil and naphtha, as well as, the higher global demand and production constraints. The for plastic and a severe shortage of supply regareding the petrochemical plants damage caused by the tragedy in March. For high-density polyethylene products, an average price # | ]]] ‹ œ ]{|{ | …\… ‹ œ ton. Also, the average price of polypropylene products, went | …[{ ‹ œ ]{|{ | _`[ ‹ œ year. Likewise, for aromatics products, the average price of ’ }|… ‹ œ ]{|{ | |{… ‹ œ ton this year. The shift in demand for polyester in China and the economic sanctions on Iran (the world’s major paraxylene producer) caused the average paraxylene price to jump from | {[] ‹ œ ]{|{ | _[{ ‹ œ Nevertheless, the prices of petrochemical products slighty decrease in the latter half of the year as a result of the global economic downturn, and also, the regional petrochemical plant was reopened after being maintenance. Thailand Economic and Petroleum Overview Economic Review

Thailand economic expansion lost ground this year due to three main factors: global economic slowdown, Japanese

PTT Public Company Limited

Annual Report 2011

domestic auto production in Japan is directly impacted by the natural disaster (Earthquake and Tsunami) in the „ ~! ‰ $€ – „ seven industrial estates, particularly the automotives and electronics industries, which virtually came to a complete halt, thus affecting the entire industrial supply chain, including those in the agro-industry sector. The Bank of Thailand made a statement in its February 2012 report concluding a sizeable drop of GDP from 7.8% in 2010 to 0.1% in 2011. The average exchange rate stood at 30.5 baht ‹ œ …| \ ‹ œ 2010. This was due to the strength of the domestic economy as well as the Asian economy are better than those in the US and Europe. Speculations from rising interest markets had „ and capital markets. Petroleum Review

Despite the sluggish economic growth this year, an average of Thailand’s primary commercial energy consumption for || to 1.845 million barrels per day, an increase of 3.5% from 2010, as a result of the government’s subsidy policy on certain fuels. Consumption of natural gas, oil, and LPG rose by 3.3%, 3.3% and 10.3% respectively from last year. LPG consumption in the transportation sector rose by 35.3% and

PTT Public Company Limited

Annual Report 2011

Thailand’s Economic Expansion, 2009-2011 Unit: % yoy

‹ * Z ž‹ œ

Source* ‚ = – Z Z &

} |† # price of 18.13 baht per kilogram. On the contrary, with the government’s approval to raise the LPG price quarterly for industrial use by 3 baht per kilogram in July and October to reduce LPG usage in industries, its consumption in this sector shrank by 7.8%. Meanwhile, Thailand continued to import LPG: this year’s total imports totaled more than 1.4 ‰ ‚ š ` _{ per kilogram, NGV consumption jumped 27.4% to 231 million cubic feet per day, as consumers deserted the considerably high gasoline prices. Energy consumption this year by economic sector is summarized as follows. 1. The transportation sector consumed 577,130 barrels a day, up by 6% from 2010. Aviation jet fuel consumption went up by 7.7% due to the economic expansion in Asia. Consumption of LPG and NGV rose by 35.3% and 27.4% „ Consumption of gasoline dropped by 1.6% as a result of rising world market oil prices and a sudden drop in demand over two months in many provinces, including Bangkok, „ – diesel price gap of 30 baht a liter since December 2010, this

insulation from external rises in world oil prices had resulted in a jump in diesel consumption of 5.3%. The Great Flood „

Thailand’s Transport Energy Consumption, 2009-2011 Unit: bbl/day +9%

+6%

Source* – = Z = " "

and PTT

PTT Public Company Limited

Thailand’s Industrial Energy Consumption, 2009-2011 Unit: bbl/day +2%

% +10

Remark : Excluding renewable Source : Department of Energy Business, Energy Policy and Planning

"&&

Thailand’s Household and Commercial Energy Consumption, 2009-2011 Unit: bbl/day +5%

% +10

Remark : Excluding renewable energy Source : Department of Energy Business, Energy Policy and "

"&&

Annual Report 2011

recovery in terms of equipment and mitigate transportation. On the other hand, ethanol consumption this year dropped by 2%, following the change in government policy to reduce excise tax contribution to the Oil Fund from gasoline, resulting in a narrower price gap between gasoline (91 and 95) and gasohol (91 and 95) respectively. Also affected by the policy on a single commercial biodiesel grade with a 4% to 5% mixture of palm oil (B100), depending on the internal palm oil market, production and consumption of biodiesel jumped 9%. 2. The industrial sector consumed 433,959 barrels a day, an increase from 2010 of 4%, affected by the Great Earthquake and Tsunami of Japan early in the year and by the Great Flood in Thailand later in the year. The consumption pattern in this sector this year was similar to that of previous years, with the exception of a jump of 27.3% in the consumption of natural gas and a drop in LPG usage due to the government measure to gradually increase the price of LPG from July 19 this year by 3 baht per kilogram each quarter for four consecutive quarters, resulting in the substitution of LPG by natural gas. 3. Household and commercial energy consumption rose by 5% from 2010 to 207,509 barrels a day. The government continued to ease economic hardship with free buses and free passenger trains, free electricity use for household consuming power less than a given limit per month, and the capping of LPG prices for household cooking at 18.13 baht per kilogram. As a result, LPG consumption surged by 9.1% this year. This year, the overall procurement of petroleum registered 1,791.98 KBD, a drop of 1.06% from last year. This included 56.30% import and the remainder from indigenous sources. Total imports consisted of 789.45 KBD of crude oil and condensate, _… …{ 'Z– |^{ `| 'Z– ” of natural gas. Indigenous petroleum consisted of 140.94 KBD of crude oil, 75.43 KBD of condensate, and 567.24 KBD of oil equivalent of natural gas. Total sales of petroleum rose by 3.44% from the previous year to 1,457.36 KBD. This included \]` {| 'Z– \]` {| 'Z– equivalent of natural gas. Total exports dropped by 9.14%, || }]† |`| [} 'Z– and a 10.61% jump in crude oil to 33.14 KBD.

PTT Public Company Limited

Annual Report 2011

Supply Sale and Distribution of Thailand 2011 Sales & Distribution

Supply

Crude 930.39 (87%) -2.81%

Import (1) 789.45 (85%) -1.78%

Gasoline

Indigenous Export 126.35 16.69 -1.14% -27.81%

Indigenous 140.94 (15%) -8.20%

Kerosene/Jet

Indigenous Export 87.70 23.18 +7.67% -26.53%

Diesel Oil 1,063.92 (61%) -3.58%

Condensate 80.23 (8%) -13.32%

ReďŹ ned Products 53.30 (5%) -0.64%

Import 4.80 (6%) -61.65% Indigenous 75.43 (94%) -5.76%

Indigenous Export 330.72 81.09 +3.85% -14.53%

(3)

(2)

\ ƒ ? ƒ ? 1,099 KBD

Fuel Oil

Indigenous Export 42.32 60.02 -6.09% +7.70%

LPG

Indigenous Export 140.92 0.52 +7.79% -34.58%

Import (2) 53.30 (100%) -0.64%

Crude

Electricity Import 160.81 (22%) +8.10%

Natural Gas 728.05 (39%) +3.75%

Summary

Indigenous 567.24 (78%) +1.48%

Total Supply 1,791.98 -1.06%

Unit: KBD

Domestic consumption volume 728.01 +3.48% Export Volume 181.49 -11.92%

Export 33.14 +10.61%

440.19 -8.62%

Industry/Transportation 139.43 +27.29% 6 Gas Separation Plants (4) Combined Processing Capacity 2,730 MMCFD

Petrochemical

Local Supply 1,457.36 +3.44% ƒ " \]` {| Â&#x;Â… [`† Natural Gas 729.34 +3.41%

149.72 +31.67%

Oil Gas

Export 214.62 -9.14% ƒ " |`| [} �|| }]† Crude 33.14 +10.61%

Source* = " "

– = Z – J ‰ "&& ~ ™ ]{|]€ Remarks: (1) Crude import, including long residue, waxy distillate, Heavy Naphtha (2) Including LPG ~…€ Z = >ƒ"? "&& ? "ƒ? & " "&& ? ‰ (5) PTT’s GSP Units 1-6 (GSP included) and GSP of PTTEP Siam Data set excludes bitumen supply and distribution.

World Economic and Petroleum Outlook for 2012

PTT Public Company Limited

Annual Report 2011

Petroleum and Petrochemical Outlook

The 2012 global demand for oil is expected to increase by 1.0 million barrels a day to 90.0 million barrels a day, according World Economic Outlook to IEA’s report in January 2012. The additional demand will The 2012 world economy is expected to grow at a slower come from the developing and emerging economies, while pace from that of 2011. The IMF’s forecast set sight on a the demand from developed countries is likely to fall. The 3.3% growth rate in 2012, a drop from 3.8% in 2011. The ]{|] – „ economic growth for developing and emerging economies, ‹ œž|{{�||{ particularly that of China, is set to slow down. This was due depression in Europe is however caused recession which in to the global economic contraction in the governmental turn affects world economic growth. Other crucail aspects interventions to lower tension property market and also easing for instance the increased quota of oil production from OPEC bad debts in the commercial banking sector. Developed countries to 30 million barrels a day, and the restoration of Libya's oil will continue to be dominated by a sluggish and uncertain production after the political unrest, as well as the extra economy. The US will continue facing high unemployment supply from Non-OPEC countries, including the US, Canada, > „ China, Brazil, and the former Soviet Union, are the factors remain an issue due to differences in budget cut policies. „ Extreme public debts and loan payment failures in Europe supply disruption from Iran's boycott reaction to the Eastern will continue and could escalate to other larger economies, Bloc countries anc allies, the US troop withdrawal from Iraq, Q and the political unrest in MENA could push the global oil markets. Moreover, variouus European countries have to pace with severe buddget cuts which lead to economic contraction. & Nevertheless, US economic indicators have started to show ^�\ ‹ œ positive signs in early 2012. Meanwhile, the Chinese government 2012. It shows a slight drop from that of this year due to the has recently implemented an economic stimulation program „ & economic contraction. latest developments could steer global economic growth higher than expected.

PTT Public Company Limited

Annual Report 2011

Â

]{|] 30.5 and 31.5 to the US dollar. Other factors are negative products will likely drop because of the market glut and the impacts from natural disasters, a lack of clarity and details Eurozone debt crisis.The prices of high-density polyethylene � „ | ……_ ‹ œ political uncertainty-all of which dictate foreign investors’ | [{… ‹ œ > Z & ‰ ’ | {}^ ‹ œ 2012 report, issued a forecast of Thailand’s economic expansion | _{[ ‹ œ > in 2012 at between 5.5-6.5%. prices of value-added chemical specialty products will rise with the higher demand along with the growing of worldwide Petroleum Outlook automotive industry, the Asian electronics and construction The 2012 domestic demand for petroleum is set to rise industries. Also the rapid rise in energy conservation for at 4.5%. The main drivers are the higher oil and natural gas

Â?„ focus on bioplastics businesses, in which Thailand is highly by the government, and domestic economic expansion supported competitive. by the Asian regional growth. On the other hand, factors affecting an uncertainty in energy demand include economic Thailand Economic and Petroleum expansion in Asia, rising global oil price, natural disasters, Outlook for 2012 and the success of the government’s intervention program on LPG and NGV prices to lower energy consumption and ease the public burdens through oil subsidies. Economic Outlook Thailand is expected to record an economic recovery in 2012 due to higher domestic consumption and investment to restore the economic system ravaged by the Great Flood of 2011. Business revival by the private sector-including repairs of machinery and installation of new equipment, public investment in basic infrastructure, economic stimulation package such as the minimum wage-raise policy, an adjustment  Â? ÂŒ examption are the key drivers. However, the economic factors that should be focused are global economic contraction especially Chinese economic-proplably affecting the domestic export sector, and the money market volatility. The exchange ]{|] „

Nature of Business

PTT Public Company Limited

Annual Report 2011

and Business Performance

PTT Public Company Limited

Annual Report 2011

Nature of Business PTT is a fully-integrated national petroleum and petrochemical company with a philosophy of equitable business growth, environmental stewardship, and powering Thailand’s society to strive for sustainable social development and economic growth. PTT’s operations cover an entire business value chain from upstream through to downstream with a focus on incremental value addition to promote national energy security and economic prosperity. The overall operations of PTT, including those conducted by both PTT directly and through PTT Group companies, are summarized below.

1. PTT-Operated Businesses á 4ORSQD@L !TRHMDRR

1.1 Gas Unit : The PTT Gas Business Unit conducts natural gas supply procurement, transmission, distribution, and processing, and invests in NGV service stations and sales, as well as gas-related value-added businesses through Group companies. Supply includes indigenous gas and imports from neighboring countries via natural gas transmission pipelines system, ” ~ ‚ €

The distribution network includes major power producers through PTT’s gas transmission pipelines, industrial users through PTT-invested gas distribution pipelines, and NGV distribution through NGV service stations. NGV is an alternative fuel for vehicles, in addition to gasoline and diesel. PTT also invests in gas separation plants to create additional business value by separating a variety of valuable chemical components from natural gas to provide petrochemical industry feedstock, which in turn represents essential elements of all other subsequent industries driving Thailand’s economic growth. One of ” ~ " € industry and transportation.

J "&&  ‚ ?  � of PTT under the supervision of the Gas Business Unit,  ‚ �  ‚  ‚ � "&&  ‚ � business, and conducts generation and distribution of power, steam and water for industrial uses as part of the value creation business and optimal energy utilization, under the ? < " " ?  another wholly-owned subsidiary of PTT. Natural gas supply procurement, transmission, and distribution businesses are operated under the Energy Industry Z = ]__{ ~]{{\€ = ƒ ? ~=ƒ?€ & structure to power producers and piped gas management fees are strictly controlled with a constant rate of return, while the „ with the world bunker oil price to ensure competitiveness with the domestic retail bunker oil price. The earning of the ~ " € the petrochemical industry which the price is determined

<  " Â’ by the government policy as a mitigation measure to the &  " is currently capped at 333 US$ per ton, which is lower than  " ‰

 " to 12 baht per kilogram beginning July 19 this year every quarterly at 3 baht per kilogram for four consecutive quarters. & =ƒ? ]\ ‰  " { \_ baht per kilogram per month beginning January 16, 2012, } =ƒ?  " Â…{ this year. Similar to the NGV, the price will rise to 0.50 baht per kilogram per month from January 16, 2012, to December 31, 2012. Additional support in the form of discounted price credit cards is provided for all public transport vehicles. \{† production, and the remaining consists of piped gas from J  Â‚

PTT Public Company Limited

Annual Report 2011

á #NVMRSQD@L !TRHMDRR

1.2 Oil Unit : The PTT Oil Business Unit is in charge of distribution of quality petroleum products, including

 " via two major distribution channels: retail and export. The retail channels are PTT service stations, which have been upgraded and modernized with supplementary services and facilities to meet a variety of consumer demand, including ? ¢ Â’

and food shops, lube oil services, and car washes, as well as banking services and commercial markets. Establishments include civil servant groups, state enterprises’ workers, � plants, and gas supply stores. The export channel includes

\ > to utmost customer satisfaction, PTT is committed to continuously introducing newly developed gasoline and

all customer groups. As a national energy company, PTT is directly tasked with energy security for the nation and acts as a tool to drive and ‰ "&& services and storage of petroleum products in addition to its main responsibility of procurement and distribution. Under the policy of alternative energy for environmental stewardship, PTT consistently maintains its leadership in biofuel research and development. Moreover, the Oil Business Unit manages

PTT Public Company Limited

Annual Report 2011

investments through PTT Group companies, most of which are wholly owned by PTT, and are engaged in domestic and overseas oil businesses, such as retail sales and service stations, lubricating oil blending and bottling, and aviation fuel services. The oil business has become more liberalized and highly ‰ & Z = ]_[… ~]{{{€ ‰ ? Z = ]_[] ~|}}}€ – "&& [] fuel oil traders registered with the Department of Energy Business. Moreover, the oil business is heavy regulated by various authorities, including the Energy Policy and Planning

– = Z – > &

? " Z ‰

business, PTT International Trading has implemented an international risk management system covering all aspects of risk exposure equivalent to those systems adopted by leading international companies. Major risks affecting PTT’s business are oil price volatility, reliability and integrity of trading partners, safety of delivery and shipment, and potential natural disasters. As world oil price volatility is the biggest risk, PTT’s mitigation measures include not only closely monitoring movements of all contributing factors, but also

swaps, and derivatives trading. State-of-the-art information technology to verify details of trading partners and deals has been used for business transactional risk control. Similar practices have been adopted to control and alleviate possible impacts from shipment and transport of petroleum and

petrochemical products on the environment and the community. Procurement and logistics of all products are strictly managed and controlled by international standards and regulations. To overcome possible cross-boundary legal barriers 1.3 International Trading Unit : The PTT International Trading Business Unit operates fully-integrated international trading and to augment competitiveness in international trading businesses, ranging from procurement, import and export of of petroleum and petrochemicals, PTT International Trading crude oil, condensate, petroleum products, petrochemical has founded and appointed subsidiaries and agencies in many ~ € & "&& > & "  business unit is also in charge of providing shipment and ~"&&&€

"&& > & –J?? logistics support, domestically and internationally, for PTT in Dubai, United Arab Emirates, and PTT International Group companies and generates revenues from overseas & ’ ƒ " Q ƒ operations, with the main focus on providing energy security ? ? "&& > & business transactions in more than 50 countries covering all to the Kingdom and adding business value to PTT Group. To cope with the changing nature of international regions of the world. margins in retail stores and partly on other supplementary � ~ €

2. Businesses Invested through PTT Group "NLO@MHDR á 4ORSQD@L !TRHMDRR

2.1 Petroleum exploration and production business : PTT = " " ~"&&="€ and international petroleum exploration and production ~=›"€ "&& The bottom-line business objective is to seek and secure competitively priced crude oil and natural gas to ensure Thailand’s energy security. PTTEP demonstrates this responsibility through its petroleum sales agreement with PTT on all produced petroleum locally and in neighboring countries, mostly natural gas, for consumption in Thailand. J "&&=" =›" ? ''– # ‚ ‰  ‚ # in Australia. Petroleum production from these overseas projects is destined for distribution in Thailand, although it is sold „ national economic growth. "&&="Q

=›" projects, investment opportunities, and organizational =›" pricing structures are subject to the Petroleum Act, B.E. 2514 ~|}\|€ " ?

PTT Public Company Limited

Annual Report 2011

á #NVMRSQD@L !TRHMDRR

2.2 Petrochemical business : PTT invests in the petrochemical business to add value to its domestic natural export-substituting feedstock to support the development of local petrochemical industries and other industries using petrochemical products as raw materials, such as the packaging industry, automotive industry, and construction industry. PTT operates its petrochemical business and integrated associated companies through its investment in 10 Group "&& ? " ~"&& ?€ <J? " ?  ~<J?€ "&& " ?  ~""? Â€ "&& ? ?  ~"&& ?€ "&& "  ?  ~"&&" Â€ "&& " J ?  ~"&&"J€ "&& & & ?  ~"&& & ‚'€ "&& J =

?  ~"&&J=€ "&& = ?  ~"&&>?&€ "&& J?? Z ?  ~"JZ?€ & businesses from the processing and distribution of upstream, midstream, and plastic products, and marketing and distribution in both domestic and international markets, to integrated logistical services and the supply of related public utilities, integrated maintenance and engineering projects, and engineering technical solution services to PTT Group and other industrial plants. The main feedstock in petrochemical production comes from PTT’s GSPs, including ethane, propane, ‚  ” ~‚  € "

PTT Public Company Limited

Annual Report 2011

primarily subject to world petrochemical prices, moving up and down in a cycle of supply and demand, and the year-end ~ €

á (MSDQM@SHNM@K (MUDRSLDMS !TRHMDRR

PTT intends to secure energy supply for the nation with overseas energy and new alternative energy sources. In these efforts, PTT integrates its entire organizational capability of knowledge, skills, personal experiences, and cooperation among the Group. All international investments are made through PTT’s wholly-owned subsidiaries, PTT International ?  ~"&&>€ "&&

= ?  ~"&& =€ ? "&&>Q mining businesses in Indonesia, a hydro-power plant in the  " Q – ƒ ƒ = sion from Egypt to Israel. PTT International also plans to 2.3 ReďŹ ning business * "&&  Â‚ "&&=" # PTT Green Energy has also invested in the development of security to the country and substituting locally produced palm plantations in Indonesia. "&& !TRHMDRR /DQENQL@MBD ~

€ & " ~& "€ >ƒ"? " The year was one of great achievements for PTT, with a ~>ƒ"?€ " ƒ ?  ~ "ƒ?€ # `… {`` ]{|{ |{_ ]}^ Z " ~Z?"€ & "&& ~]\†€ & provide crude oil as feedstock for these Group companies „

" them to market and distribute domestically, and export to " ^ ~ƒ € international markets. production capacity of the GSPs, PTTEP’s production increase " # � ~ ''– # ? € production capacity expansion in the petrochemical group, ~ €� implementation of portfolio risk management, investment the world-market supply and demand, the world oil price and development programs under Operational Excellence, � ~ € and pricing risk management for PTT and PTT Group, as well as the synergy development among downstream businesses to add business value and reduce operating costs. Details of each business unit are summarized below.

"1$ 3$ 5 +4$

Through business chain

PTT Public Company Limited

Annual Report 2011

INDUSTRIAL PLANTS

INDUSTRIAL PLANTS

PTT-operated Businesses á 4ORSQD@L !TRHMDRR

Gas Business Unit This year’s operational success of the Gas Business Unit resulted from the success in natural gas procurement from

?  ‚

the industrial and transportation sectors, the gas separation " ‹ ^ ~ƒ € " ‹ _ ~ƒ € ' operational performance results in 2011 for the Gas Business Unit are summarized as follows:

Natural gas procurement [ |\_ JJ ž ||\ JJ ž ~…†€ [ {_` JJ ž ]{|{ & … ]_… JJ ž }]] JJ ž ” ž \`*]]

PTT Public Company Limited

Annual Report 2011

Sales volumes rose as a result of the expansion of the gas distribution pipeline network, including a 24-inch pipeline # ƒ " >ƒ"?Q project to Glow Energy Plc located in the Map Ta Phut > = ƒ # J&" <" ™š ?  > =

ƒ Note that natural gas sold to industrial users is used for power and steam generation to raise power generation

‰

Z Q ^ JJ ž ] JJ ž ~_{†€ steam generation. PTT has continuously been expanding its gas distribution pipeline network. In 2011, a new network totaling 30 kilometers was installed and commenced operations for commercial use. As of this year-end, PTT ``… covering 10 provinces.

Gas sales to the transportation sector Gas sales to the power sector ] _{{ JJ ž ^{† ]^] JJ ž ~}†€ 2010, due to lower electricity demand following the cold ‰ year. Sales were completed to the Electricity Generating & ~= &€ | |[` JJ ž [^† Y ~>"" € `^^ JJ ž …_† Y ]{ ~ "" € [`^ JJ ž |}† sales.

Gas sales to the industrial sector _^} JJ ž ” |[† ||` JJ ž ~]^†€ …{` & included 305 industrial users and three commercial ones.

]…| JJ ž ~^†€ _{ JJ ž ~]`†€ from last year, due to the continuously growing number of ? [^} "&& ‚ š …`_ "&& `[ _… & of natural gas in the transportation sector to replace gasoline ` _† ]{|{ } ]† year-end, the number of vehicles using natural gas increased \[ }|… ~…… ]†€ …{{ _`| < "&& ‚ š # 0.50 baht per kilogram per month from January 16, 2012, till December 31, 2012, and provided discount credit cards to all =ƒ?Q 30, 2011. If this NGV price adjustment scheme is successful, "&&Q ‚ š

PTT Public Company Limited

Annual Report 2011

Sales of products from GSPs " `^\ JJ ž ]|† ]|_ JJ ž ~……†€ ]{|{ The increase resulted from the commissioning of GSP Unit ^ ™ `{{ JJ ž debottlenecking project completion of GSP Unit 5 in July

this year, which has since increased its capacity from 545 JJ ž _\{ JJ ž & # …^† ]{|{ _ `]\ |…| & | \}\ \^[

_[| _`[

] `_Â… [{\  " ^Â…[ Â…\^ ‚ Â

-@STQ@K F@R R@KDR ‹ * JJ ž | {{{ Z&‹ž

+3.0% +13.4%

/QNCTBSR EQNL &@R 2DO@Q@SHNM /K@MSR Unit : thousand tons .2%

+36 +1.8%

&@R !TRHMDRR 4MHS ,HKDRSNMDR January

“ "&& " ‹ ^ ~ƒ € & commercial commissioning. With a separation capacity of `{{ JJ ž " ^…{ {{{

| {…{ {{{  " |^{ {{{ ‚  | `]{ {{{ per year of products. All production serves growing local demand and enhances the indigenous petrochemical industry development. “ & ][� ]{ _� ƒ " >ƒ"? ? „

>ƒ"? ^[ {{{ Z&‹ delivery obligation.

PTT Public Company Limited

Annual Report 2011

“ "&& following awards: � &"J = ? * | ? Z ? ] ƒ | – ? Z … ƒ ] – [ ƒ … – ƒ _ ƒ [ – ' ' - TPM 1st ? = Y | ƒ ^ – Z ] ƒ \ – 3. Offshore Gas Operations Division. February

“ the pipeline to Glow Energy Plc in Map Ta Phut Industrial = ƒ & _^ \|{ BTU a day of gas delivery.

“ ' " &> |`{{| > }{{| > |[{{| J ? > ~& € ~J ?>€ “ "&& < &> |`{{|*]_[] Z < |`{{|*]{{\ J ?> |[ ‚ š “ "&&Q ]{|{ & £ ~&£ € & £ & highest achievement to an organization with an outstanding integrated management system and the potential to compete internationally.

PTT Public Company Limited

,@QBG

Annual Report 2011

,@X

“ "&& � ‚ ‚ = ?  ~‚‚= € …{† ” share in the development of combined-cycle power generation in Nava Nakorn Industrial Estate. Other partners are Nava ‚ " ~…{†€ ƒ = < " ~[{†€ ‚‚= � "" |]\ ~J+€

|_ ‰ }{ J+ = & \ J+ “ " ‹ [ ~' € ¤ ‹ used at the facilities, and the remaining 30 MW plus 15 tons Shutdown Award for its outstanding operation without per hour of steam will be sold to clients in the estate. "&& = Award. “ " ƒ J ?> > J ~>J € ~ < |`{{|ž &> |`{{|€ ” ~> }{{|€ ~> |[{{|€ OQHK

“ & ? – ? ‹ ? ? Z – >& J > ž>=? ]\{{|*]{{_ Z š "&& June

“ & Â…^Â? #  Â‚ – ‰ ƒ " []Â? "  Â‚ “ "&& ‹ ? " 25.565 km, were fully installed. Gas delivery from the entered into a sales agreement on compressed biomethane  Â‚ & " ~?Z € transmission via the onshore pipeline network commenced. farms and compressed for quality improvement. Under the This new pipeline system is capable of delivering 1,200 15-year sales agreement, PTT is committed to purchasing JJ ž ^ ?Z “ =ƒ? substitute for NGV in remote areas. Once the project is fully ƒ [ ~? € ] _^_} commercial, it will save more than 21 million baht a year in Z&‹ ~ š &€ foreign exchange for the substitution of import of diesel up ] [`__ Z&‹ ] ] | ^  " { {`{[ Z&‹ & become effective from June 2011.

“ ƒ " & `{{|*]__… &  –  " +

J  “ ƒ " – > + ~–>+€ " Strip project, a safety zone protecting the community from ’ ƒ " was also selected as one of the 16 pilot plants in Thailand for such a project, and as a model for tree-planting within <J ' –>+ in charge of inspection and award presentation.

PTT Public Company Limited

Annual Report 2011

August

“ ? J&" <" ™š ?  > =

ƒ |{ \\_ Z&‹ “ & ‚ & ? Z ? & `{{| ~ ~ € € –  + 2DOSDLADQ

)TKX

“ =ƒ? ” ~ ‚ € …| ^`_} | \{_{ baht both per million BTU. This pricing structure became effective from July 2011 onward. “ =ƒ? # | |_\_ Z&‹ effective from July this year onward. This new variable cost ~ƒ |€ ' ~ƒ ]€ ~ƒ …€

“ & ‚ & 2011 Outstanding Business award for its national level safety, occupational health and environment from the Permanent J  ]_th National +

™ \ ]{|| &

to PTT nine years in a row.

“ "&&  ‚ ?  _ ~J& €  ‚ ƒ & J & " &

” \{{ JJ ž _ |{ J& ” | [{{ JJ ž “ ƒ " ' " ? ƒ� –>+ ? – > + ~–>+€ J ?> social responsibility. “ ƒ " "&& "&& ? ƒ ‰ & model for other PTT facilities. -NUDLADQ

“ ? []� [`� ? " >> "&& &  ¼ …

PTT Public Company Limited

Annual Report 2011

returns for the Oil Business Unit and retailers who own service stations. Because of the higher world oil price early Q Â? gain were recorded at 5,449 million baht. – ]{|| "&& | |`{ ^† # ||  "  " Â? }Â…^ Â?= ^Â…[ ? ¢ Â’ |Â…\ " Â? ?

Biofuel Sales PTT continued to promote biofuel energy as an alternative option, with gasohol to replace gasoline and biodiesel to replace diesel. The distribution and sales of Gasohol E10, =]{ =`_

Oil Business Unit PTT continued to maintain its leading position in the The market shares in 2011 for PTT Gasohol E10, Gasohol domestic fuel retail market for 19 consecutive years, with =]{ =`_ …| |† [… \† [| ^† | …† ‰ ‰ ’ PTT also succeeded in maintaining its leading position for Z[ "&&Q Z[ …] ^† three years in a row. Sales of gasoline and lubricants grew year. To ensure biofuel supply security, PTT has signed `† | …† & long-term contracts for ethanol and methyl ester with domestic of expansion of fully-integrated service stations. This year’s producers. business performance of the Oil Business Unit is summarized Lubricating Oil Sales below: This year, through its long-term commitment in research ~ƒ›–€ "&& Fuel Sales > ]{|| "&& |_ {…` "> ‚ " > ~ ">€ | {`^ ~`†€ & >  ’ …_ `† ?

~> ?€ ‰�_ included 2,310 million liters of gasoline, 6,163 million liters year, PTT launched a series of new products. Performa Super | ^`… #

| \]` < |{{† � … |_[  " with the world’s premium lubricating API SN standard

"&& ƒ J ‹& J & ?š& ~? ?  ~"&&ƒJ€ |^ ]_| ” š & € …` \†

…_ |† „ ?š&

= & ~= &€ system. PTT continued to expand its lubricating oil business in Indochina this year. The overall sales this year totaled 139 is discounted. & | ]} ž ] | …† | [… ž ]{|{ }† & last year, of which 130 million liters were sold domestically, | _{�] {{ ž …\ _†

PTT Public Company Limited

#NLDRSHB /DSQNKDTL /QNCTBS 2@KDR Unit : million liters

+7.8% +7.3%

* #NLDRSHB ,@QJDS 2G@QD

#NLDRSHB +TAQHB@SHMF .HK 2@KDR Unit : million liters +10.5%

Note * = Â "

Source : Department of Energy Business, Ministry of Energy

+3.2%

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

.HK !TRHMDRR 4MHS ,HKDRSNMDR February

!£ $ "&& received 5-star gold awards for 201 stations, silver awards |_} ’ `| “ "&& ]{|| & Q J Brand from BrandAge Magazine for running the most reliable gas service stations for eight years in a row, and for its most reliable motor lubricant for two years in a row. ,@QBG

“ & !^Â… J & ™ J + <J ' $ by the Ministry of Energy to raise the awareness of energy conservation and global warming, PTT kicked off the PTT Engine Tune Up 2011 project with free engine tune-ups at `[ ‰ April 4-13 this year. The campaign was extended to the year }\ " ? “ & – < J " < "&& < ~< € ,@X recognition for clean service stations under the “Nation " ÂŚ ? & $ & – < in service stations along eight main highways nationwide. ||| ”

\[ "&&  all these service stations will be downloaded onto the 2012 < J " ‚ “ "&& ƒ Q – & " reputation for PTT service stations. given to PTT for its gas service stations for 11 years in a row and for its lubricant products for two years in a row. OQHK “ "&& – = Z with the highest gold medals, three years in a row, under the

June

PTT Public Company Limited

Annual Report 2011

international service standards at all shops. The academy ƒ›– �” of raw materials and selection processes, as well as to continually develop new formulas for beverages to serve diverse lifestyles of consumers. 2DOSDLADQ

“ + & " ?  "&& !" " $ and recreation. The park is located in each service station & "&&  & & " < ” ? + ƒ to be completed around the end of 2012.

“ ‹ !

= = $ ? ¢ Â’ "&& Â’ Z ? |{{† the campaign to protect the environment. The introduction was ? ¢ Â’ = ? “ "&& !"&&  $ for consumers using iPhones and iPads to access the database to check gas prices and information on service | |`{ more than 450 NGV stations nationwide. “ ? ¢ Â’ & ‰ ÂŁ ]{|| ~&‰£ € != ‰ Z " $ from the Department of Business Development. -NUDLADQ

“ ' }` ~ €  ? the east coast. With this new station, PTT also installed its 2nd !ƒ ]{$ education for children nationwide. “ "&& "> ‚ |{{† � to provide better engine performance and protection in all conditions.

“ "&& ? ¢ Â’ ? „ " '

training, skill development, and as a knowledge center for ? ¢ Â’

PTT Public Company Limited

Annual Report 2011

“ ‹ „ "&& ! ? $ ‚ š ƒ # > = | & Â?  "  "  "  " Â’Â’

“ „ "&& launched cleaning service for cooking gas food shops and houses with high-pressure water pumps at its Phra Khanong ? & # ’ "&& "&&  " ? ” ~ …€ „

of a premium coffee shop aimed to serve and expand the market segment to consumers in the business sector. “ "&& „ ‹& J ?š& ~? š & € „ ?š&

provide a smooth driving experience and reduce gasoline consumption.

“ "&& J " Z in the TAQA Awards 2011, organized by the Thailand Productivity Institute, Ministry of Industry, in cooperation > �J ? ?  ? ?  J J ?  & “ + J = to businesses recognized by public consensus in different š = ? ~š=?€ "&& categories. PTT won in two categories for fuels and service launched the PTT Engine Tune Up campaign to serve the stations. public for vehicle checks of engines, lighting systems, brake systems, power steering systems and other systems at ‹ „ lubricating oil products were sold at a big discount. The campaign was launched at all PTT service stations and 100 " ? ]| „ #DBDLADQ

“ "&& & > " ƒ & & " & &

* & ‰ ‰ Y # ™ �| in the portion of 50:50. Eight ton of bio jet worth an amount of 2.5 million baht was provided by PTT to promote this Asia’s

“ "&& !& ’ Q = $ „ ? " ’ ƒ } &

PTT Public Company Limited

International Trading Business Unit During 2011, the International Trading Business Unit successfully increased its competitiveness and physical trading of crude oil, fuel oil, and petrochemical products. Another success was the use of risk management tools, including the ‰ = J reduce the price volatility for crude oil that PTT procured "&& > "&& jointly worked with downstream group companies to form the > ? › ’ ~ > J €

Q competitive advantage through group synergy, expand the group’s business overseas, and to cooperate on managing the logistics for petroleum and petrochemical products of PTT Group.

Annual Report 2011

& …} ^`… _ [† Y

\ []] | _† Y || …_` { }† Y [ ]]| []† > of crude oil and domestic crude oil plummeted due to the „ < the physical trading of petrochemical products soared as a result of Out-Out Trading transactions with business partners J = ? > � tion, physical trading of coal, crude palm oil, and alternative energy under the PTT’s strategic business option commenced in 2011.

Price risk management

Price risk management this year amounted to 34,439 Crude oil, petroleum product, and petrochemical trading … [† ]{|{ In 2011, PTT International Trading Unit’s physical world oil price volatility, which demanded more price risk ^] ^`[ ~ | {` management. JJZ =–€ | ^† }}| ]{|{ (MSDQM@SHNM@K 3Q@CHMF 5NKTLDR Unit : million liters

+5.6%

(MSDQM@SHNM@K 3Q@CHMF 4MHS ,HKDRSNMDR February

“

 Z " ? Z Z company. The trading volume amounted to 2.4 million barrels, with a total value of more than 6,000 million baht. The

companies, a stepping stone not only for additional business

-1.6%

PTT Public Company Limited

transactions in the future, but also for national cooperation on strategic energy reserves. OQHK

Annual Report 2011

“ > � "&& > & "  _{ {{{ > ? Z |…_ million. A similar agreement is scheduled for 2011 with the |`_ {{{ [`{ baht respectively. The agreement serves PTT’s strategic business in increasing the use of alternative energy. August

“ & Airways International Plc for 1.35 million barrels of Jet A-1 & “ �

management to the state-owned enterprise and was a stepping ? " Â Z Â? &

stone for PTT to expand into a similar line of service to other valued at more than 2,000 million baht, marked PTT Group’s domestic and international airlines. ? ? "  ‚ ? #DBDLADQ ›  ?  “ ~? € " Q ƒ ? ?  ? “

= shipment of 140,000 tons a year of benzene from domestic "  ~]\{ {{{ € \ }_{ ' & ? million baht during April - December 2011. The agreement for the largest shipment and farthest destination PTT has increased both physical and paper trading and involved vessel achieved. allocation, which generated more revenue for PTT. (MUDRSLDMS !TRHMDRR SGQNTFG &QNTO "NLO@MHDR June

á 4ORSQD@L !TRHMDRR

Exploration and Production Z ” "&&=" # ‹ new accounting standard, including the equivalent in Baht currency shown in parallel. This year PTTEP and its subsidiaries _ ^`_ ‹ œ ” |\… …\_ ]_† | |_… ‹ œ the 2010 level of 4,532 million US$, equivalent to 143,506 “

 " –= million baht. The rise was mainly due to the rise in the world =| ? #  "

[[ `… ‹ œžZ = trading arm from South Korea. The total trading volume and ]{|{ __ [} ‹ œžZ = ]{|| & [`[ {{{ Z |[ _{{ ]^[ _\_ Z =– ]{|{ ]^_ {[\ Z =– million. The agreement was to expire in December this year Z Z�|\ J �& and can be considered another success of PTT in the effort to ™ – ? ''– # and Block 16-1 of Vietnam. provide energy security to meet the domestic demand.

& Q "&&=" ’ | [^` ‹ œ

” [[ \[` ^† ]{|{ | …`{ ‹ œ [… \\[ & due to the accounting impacts from the higher business income tax resulting from asset exchange from US$ into Baht during the Baht depreciation, and the foreign-exchange loss incurred during the lending transaction between PTTEP "&&=" ? ? dollar depreciation versus the US$ currency. Both losses were accounting losses and had no impact on its actual liquidity „ "&&=" Below is a list of 41 successful projects in 13 countries of PTTEP during 2011:

PTT Public Company Limited

Annual Report 2011

out between PTTEP and relevant authorities. Meanwhile, J = ~J =€ agreed to a one-year exploration period extension so "&&=" exploration and appraisal drilling, and thus prove the potential for commercial development.

ǰ ǰ ĝǰ*OUFSOBUJPOBMǰ1SPKFDUT ǰ ǰ ǰ ǰ155&1ǰ"VTUSBMBTJBǰ1SPKFDUǰJOǰ"VTUSBMJBǰ : PTTEP

? Â?J ? Â?] & success is vital to the feasibility study for the development „ ” ~‰ Â‚ € Timor Sea, a stepping stone to the possible development "&&=" ]{|] # Ç° Ç° Ç° Ç°0NBOÇ° Ç°1SPKFDUÇ°JOÇ°UIFÇ°4VMUBOBUFÇ°PGÇ°0NBO : The Exploration PTTEP has continuously conducted exploration activities Munhamir-3 exploration well was drilled to identify additional in Thailand and overseas to assess petroleum potential of J ‹ interested blocks and increase petroleum reserves. This year no petroleum was found. Nevertheless, PTTEP plans to PTTEP drilled a number of exploration and appraisal wells increase condensate production from Munhamir-2 in 2012. With this production increase, when combined with natural in many projects including: "&&=" Ç° Ç° ĝǰ%PNFTUJDÇ°BOEÇ°4PVUIFBTUÇ°"TJBOÇ°3FHJPOÇ°1SPKFDUT Ç° Ç° Ç° Ç°"SUIJUÇ°1SPKFDUÇ°JOÇ°5IBJMBOE * ? can increase its overall output from the Oman 44 Project. Â?|[Â?|}Â? › Z 1SPKFDUÇ°%FWFMPQNFOUÇ° is soon to be proposed. "&&="Q Ç° Ç° Ç° Ç°4&."*Ç°**Ç°1SPKFDUÇ°JOÇ°*OEPOFTJBÇ°* "&&=" ]` ……†

” J ?  & development projects are as follows:  Â?| Ç° Ç° ĝǰ%PNFTUJDÇ°BOEÇ°4PVUIFBTUÇ°"TJBOÇ°3FHJPOÇ°1SPKFDUT targeted reservoir, though not in a commercial quantity. The Ç° Ç° Ç° Ç°#POHLPUÇ° 1SPKFDUÇ° JOÇ° 5IBJMBOE * ? well result is extremely valuable to the petroleum potential Z ? assessment of the block and the adjacent area, which will be ~+" € ” the key to future exploration and investment plans in this area. been completed. Production of natural gas is scheduled for Ç° Ç° Ç° Ç°.5+%" # Ç°1SPKFDUÇ°JOÇ°5IBJMBOE * ‰ ]{|] Ç° Ç° Ç° Ç°;BXUJLBÇ° 1SPKFDUÇ° JOÇ° .ZBONBS * ? the main production platform, the bridge connecting to the the block’s potential. Ç° Ç° Ç° Ç°Ç°. Ç°1SPKFDUÇ°JOÇ°.ZBONBSÇ°: With the natural gas discovery wellhead platform and an interconnecting pipeline network, from the Aung Sinkha-2 exploration well, PTTEP decided offshore and onshore trunk lines, and associated onshore to accelerate the exploration work program by moving the production facilities, is ongoing. Production of natural gas 1,000 sq. km. 3D seismic acquisition from earlier scheduled is anticipated in 2013. ” ]{|] ” Ç° Ç° ĝǰ*OUFSOBUJPOBMÇ°1SPKFDUT that appraisal wells to determine petroleum potential of the Ç° Ç° Ç° Ç°155&1Ç°"VTUSBMBTJBÇ°1SPKFDUÇ°JOÇ°"VTUSBMJB : PTTEP ” ]{|] successfully completed the installation of a new production this moment, seismic acquisition preparation is being carried platform at Montara and has scheduled to commence produc-

PTT Public Company Limited

Annual Report 2011

tion in the second half of 2012. PTTEP has won a permit to continue exploring and producing petroleum in Australia from ƒ compensation from the Montara incident, PTTEP has received 119.5 million US$ as of December this year. ƒ > Government from the Montara incident, PTTEP has been constantly engaged in communication with the Indonesian ’ impacts. ǰ ǰ ǰ ǰ"MHFSJBǰ Bǰ ǰ Cǰ1SPKFDUǰJOǰ"MHFSJB : The project is at the detailed engineering design stage for the production process and the transport pipeline, while fabrication of the living quarters and utility facilities is ongoing. Development drilling has commenced since late 2011. Production is set to be on stream within 2014.

Production The overall average production of PTTEP this year was …{| …^\ Z =– "&&=" this production capability and increase production from new projects, some of which are as follows:

ǰ ǰ ĝǰ%PNFTUJDǰBOEǰ4PVUIFBTUǰ"TJBOǰ3FHJPOǰ1SPKFDUT ǰ ǰ ǰ ǰ7JFUOBNǰ ǰ1SPKFDUǰJOǰ7JFUOBN : Initial production

expansion, as well as to appropriately assign skilled human resources and technology experts for project handling.

Ç° Ç° ĝǰ%PNFTUJDÇ°BOEÇ°4PVUIFBTUÇ°"TJBOÇ°3FHJPOÇ°1SPKFDUT Ç° Ç° Ç° Ç°. Ç°1SPKFDUÇ°JOÇ°.ZBONBS : PTTEP ended the explora ” ‹ J & effective relinquishment date was in May this year.

ǰ ǰ ǰ ǰ4PVUIǰ .BOEBS ǰ 4BEBOH ǰ BOEǰ 4PVUIǰ 4BHFSJǰ 1SPKects in Indonesia : PTTEP achieved successful reduction of investment and equity in three Makassar Strait blocks, which are South Mandar, Sadong, and South Sageri, to & =›" > of the strategic portfolio adjustment of PTTEP. Moreover, Total, PTTEP’s strategic alliance, is known worldwide in deepwater exploration and drilling, which are directly applicable to these three blocks.

Ç° Ç° ĝǰ*OUFSOBUJPOBMÇ°1SPKFDUT Ç° Ç° Ç° Ç°155&1Ç° "VTUSBMBTJBÇ° 1SPKFDUÇ° JOÇ° "VTUSBMJB : PTTEP ~ ? € "  ~"&&=" € "&&=" ” Z ?ž "_[ & ” "&&=" ~ ? € "  |{{† ” "&&=" "  Â? "&&=" Z ?ž "Â…^ Â

"&&=" " Â Â? owned subsidiary of PTTEP, ended the investment in Block + Â…\`"

commenced in August 2011 at 15,000 barrels a day. The current production stands at 32,000 barrels a day. ǰ ǰ ǰ ǰ"SUIJUǰ 1SPKFDUǰ JOǰ 5IBJMBOE : PTTEP successfully negotiated a supplementary gas sales agreement with PTT, the buyer, with the adjustment of the daily contract quantity ~–?£€ ……{ JJ ž " # ]]{ JJ ž & accordingly adjusted while other terms in the contract had little change.

Ç° Ç° Ç° Ç°4JEJÇ°"CEÇ°&MÇ°3BINBOÇ°0GGTIPSFÇ°1SPKFDUÇ°JOÇ°UIFÇ°"SBCÇ° 3FQVCMJDÇ°PGÇ°&HZQU : After a thorough petroleum assessment

Ç° Ç° *OWFTUNFOUÇ°1PSUGPMJPÇ°.BOBHFNFOU

Ç° Ç° $PSQPSBUFÇ°$BQBCJMJUZÇ°%FWFMPQNFOUÇ°

PTTEP continued its investment portfolio management to manage risks associated with the portfolio and properly allocate funds to various projects in support of business

To cope with world oil price volatility and an unstable world economy, PTTEP has closely monitored the world economy in relation to energy demand and continuously

study of the block, PTTEP decided to notify joint investors in the block in January this year of its intention to cease its Â…{† = ƒ # Ç° Ç° ĝǰ*OUFSOBUJPOBMÇ°1SPKFDUT Ç° Ç° Ç° Ç°$BOBEBÇ°0JMÇ°4BOETÇ°,,%Ç°1SPKFDUÇ°JOÇ°$BOBEB : PTTEP com- Ç° Ç° Ç° Ç°(SFBUÇ°4PVUIÇ°1SPKFDUÇ°JOÇ°/FXÇ°;FBMBOE : PTTEP ended  Â” Z The output in November was up to 3 million barrels, which "=" _{|]| ‚ ¤ & ” Q |[ Â…{{ approval was granted in August 2011 for this low petroleumpotential block. & – |` |}{

PTT Public Company Limited

Annual Report 2011

adjusted its strategic direction to duly respond to these external changes in order to maintain its capability to provide energy to meet the country’s need, continuously ’ management, expand its overseas investments, properly manage and select investment projects, handle risk management in accordance with the volatility of the oil price and manage human resources.

<J? " ?  ~<J?€ __` `[\ |^] |]^ ]{|{ & # "–< ‰ |^ year and the higher average product-to-feed margins of all petrochemical products following the tight polypropylene ~""€ & year’s performance was therefore better than last.

á #NVMRSQD@L !TRHMDRRDR

"&& " ?  ~""? Â€ [Â…] }[^ # |{_ \}| year. The higher product-to-feed margins for products due to the very tight supply following the Great Tsunami in Japan J < |_{ {{{ Â? Â? Z ~Z" € 16 this year resulted in lower depreciation and higher interest ? Â? ""? Q performance this year was therefore not as good as last year’s. "&& " J ?  ~"&&"J€ distribution arm of petrochemical products for PTT, achieved | [Â…} ]}_ [\` \^\ <–"=  Â–"= "&& ? PTTPM’s performance this year outdid last year’s. "&& "  ?  ~"&&" Â€ Â? integrated logistics arm of PTT Group for plastic production, \ [{\ ]{_ Â… [[[ {`Â… "&& ? <–"=  Â–"= "&&" Q ]{|| over last year’s. ‰ "&& "&& ? `|Â… ž |Â… ž ? ” "&& ]`† "&& ÂŒ | ]Â…} ž & Â’ "&& \`† \}† ]{|{ >ƒ"? ‚ ]{|| Â…{ & ~ ƒJ€ ~ >J€ "&& ‹ Âœ` }_ ‹ Âœ^ }Â…

Petrochemicals and ReďŹ ning " expanded their investments to add product lines and trade channels to increase the competitive edge for PTT Group in managing its business and creating additional business value from the synergy among members of the Group as > ? J › Â’ ~ > J € " > ? J ~">J€ ? > J ~ >J€ program. Also as a group, PTT Group companies jointly drove the overall organizational development toward PTT Group Operational Excellence, with its performance of the *

Petrochemical and reďŹ ning performance & "&& ? " ~"&& ?€ Â… which were petroleum and utility products at 55.09 million ] ^` ]{|{ [\Â? ” ]{||Y [ ]`] }\| ]Â…\ ]_{ Y ] ][` {{_ _Â…[ ||[ <–"= production capacity expansion to 250,000 tons per year and  Â–"= Â…{{ {{{ ™ | ‰ 1, this year. With higher product-to-feed margins resulting "&& ?Q ]{|| proved better than the 2010 performance of non-amalgamated companies.

PTT Public Company Limited

Annual Report 2011

2@KDR 5NKTLD NE NUDQ@KK /DSQNBGDLHB@KR .KDĹą MR QNL@SHBR /K@RSHBR '&ž§

.9%

+17

-0.4%

3NS@K 1DŹ MHMF "@O@BHSX (LONQSDC "QTCD ' ž

+4.7%

last year as a result of the rising market GIM, the difference between the product price and the oil price, and an increase in risk management and stock gains at the year-end enhanced /DSQNBGDLHB@K @MC 1DĹąMHMF 4MHS ,HKDRSNMDR

-1.6%

_{ {{{ ž &– = “ "&& ? # J & > ƒ›– ‹ jointly develop green chemicals to pave the way for PTT to become a bio-based chemical company. February

“ "&& ? _{ {{{ ž <–"= > "&& " ?  & = ?  January “ Z " ?  ~Z"=€ …{{ {{{ ž  –"= "&& ? " ~"&& ?€ _{ {{{ ž = “ <J? …|{ {{{ ]_{ {{{ ž <–"= “ & " ~& "€ ž "–<

PTT Public Company Limited

,@QBG

Annual Report 2011

] ž “ "&& ? ?  ~"&& ?€ ]{{ {{{� ž ‚ \{ {{{ ž JJ plant. Plant commissioning was successfully completed with commercial production set to begin in 2012. “ >ƒ"? >ƒ"? > " the name of iPort, an on-line electronic system accessed by smart phone and PDA, which provides real-time information services to customers. June

“ "&& "&& = ?  Â“ "&& # "&& J?? provide engineering consultancy services to PTT Group Z ?  J ? ? and become a technical center of excellence for the Group. ~J??€ It is a joint investment of four PTT Group companies: PTT, of Japan. The joint venture aims to develop and eventually & "&& ? >ƒ"? Z ~Z € " ~"Z € Â…^ {{{ ž )TKX ]{ {{{ ž “ "&&"J Q “ & J > ?  " Q ƒ ? & " ?  # for all plastic products of PTT Group. With cooperation # ‚ § ' ~‚§'€ Z Z " "&&"J ? ]`{ {{{ –+& ~š ??€ “ & " Z " " ?  ~Z?"€ # ‹ Z Â?= ?  Â? & [{{ {{{Â? ž ethanol plant is being constructed, with the use of fresh ? ]{|] ? “ >ƒ"? !" $ ? customers to manage its business with solid liquidity, business cost reduction, and effective time management. OQHK “ ""? |_{ {{{ ž Z ~Z" € 2DOSDLADQ “ "&& & & “ "&&"J # "&& J?? Z with a total capacity to provide storage of petrochemical "&& ? ¢ Â’ & |{{† within a year and was created under the new concept of “Go

= = $

.BSNADQ

PTT Public Company Limited

Annual Report 2011

ǰ ǰ *OUFSOBUJPOBMǰ*OWFTUNFOUǰ#VTJOFTTǰ With very high potential in coal mining and the continued ƒ  ~ ƒ€ PTTI made a move this year to acquire outstanding shares of ƒ  ~ ƒ € "&&>Q ” ƒ > "&&> #  " Q – ƒ & Q below:

Coal Business

“ & " =‹ƒ >š & The launch came earlier than the enforcement date by the Thai government of January 1, 2012. “ ? "&& ? "&& ? " "&& ƒ " „ "&& "&& ? � & > registered and listed on the Stock Exchange of Thailand ~ =&€ October 21 this year. “ "&& ? # ? ? ‹ # ‚ +   ? Q ~" " € & for the PTT Group.

"&&> "&& J  ~"&&J € |{{† ” ƒ  ~ > ? <  € [{† ” "&& " J ~"&& "J€ _[_ œ |^ `…| ~ …{ `` œ€ & ” ”

#DBDLADQ "&&> |{{† "&& "J [_ [† “ >ƒ"? # ' " ƒ > ]{|| ƒQ !>ƒ"? = > $ |{ \ ™ |{{† < ' ' > & of product value and insurance claim period at half of the existing insurance, but twice as fast. Not only can this Natural Gas and LiqueďŹ ed Natural Gas (Gas/LNG) innovative insurance reduce risk exposure, but it can also "&&‰ Â‚ "&&> "&&=" provide more distribution channels and opportunities for „ new customers.

PTT Public Company Limited

Annual Report 2011

~‰ ‚ € & # �

› ~ �‰==–€ ? ]{|\ The previous investment in a gas transmission pipeline # ƒ = = J = ~=J € within the country this year. A number of explosions of the supplier’s pipeline were reported, which resulted in a series of production halts. Although none of these explosions caused serious damage or losses of property to EMG, the ^\ JJ ž

based on the fact that Indonesia had the most suitable geography and climate for palm oil plantations, and that the world’s largest palm oil plantations were in Indonesia. The > ~ ‰‰Z€ is 65,306 tons. PTTGE has also conducted a feasibility study for palm oil plantation investment in nearby countries, J ? > "&& = ? – J ~?–J€ # ?" J & ? has also paid special attention to look after the community Power Business ? ƒ ’ � "&&> ‚

? for this project, as well as the production of biogas from a ~‚ ?€ ” ¨ " ? palm oil extraction unit for use in power generation for the  ~¨"? Â€ # plant and the community.  & ” ]{{ {{{ {|{ ‚ ? ]_† ” # commercial power production in 2019.

Ç° Ç° 1BMNÇ°0JMÇ°1MBOUBUJPOÇ°BOEÇ°%FWFMPQNFOUÇ° & "&&

= ?  ~"&& =€ | {`_ }`} &

? |…` \`` ~ "&& =€ &

"&& = \\ _^†

In addition to improving the performance of its business ? "  ~? € }_† units, PTT and the PTT Group of companies were also "& ‰ Z " ~"& ‰Z"€ involved in the following business activities: |{` {{{ ~< € ^_\ {{{ oil plantation in western Kalimantan. Z ~?" € |[ {{{ < " ' \ {{{ < " > [_ ž Â…{ ž & |Â… {{{ ƒ "&&Q growth for existing projects, and on consistently seeking value-adding business development opportunities with á 2SQ@SDFHB /K@MMHMF ,@M@FDLDMS optimal use of existing manpower. PTT Group, with the consent of the PTT Board of Directors, held its annual Top Executive Thinking Session

PTT Public Company Limited

Annual Report 2011

businesses can move in the same direction, create maximum added value, promote synergy, and maximize resources. The of the corporate plan and the operating plan of each business unit and supporting line, both long-term and short-term. This year the direction and strategies toward enabling execution focused on high-return business expansion and operational excellence to enhance Group competitiveness, in parallel with environmental conservation, and community and á /DQENQL@MBD ,@M@FDLDMS @MC $EĹąBHDMBX social development. The monitoring process for reporting ,@M@FDLDMS performance progress was established to adjust the strategies, PTT pays extraordinary attention to the development business plans, and operating plans to suit changing situations of organizational capability toward becoming a highto optimize value for the Group. performance organization through continuous improvement Â’ /33 &QNTOĂ°R %HM@MBH@K ,@M@FDLDMS achieve the benchmark of world-class management. With PTT is the largest company on SET with a market & ÂŁ ~&ÂŁ € Â’ }{` {{{ |{ `† of total market capitalization as of the year-end. If all listed the GSP in 2002, success became real with the TQA award companies under the Group are included, the market capi- in 2006. PTT subsequently applied the same principles to Â’ | }`] {{{ Natural Gas Transmission, which achieved the TQA award in ]Â… ^† =&Q Â’ "&& 2010. In addition, PTT has prepared itself to adopt the State Group continues to grow steadily. In order to ensure a strong = " ~ =" € &ÂŁ ]{{` & "&&

J ‰ Q and well-disciplined, and disclosure of information to all = " Q investors must be equitable and transparent. To this end, PTT SEPA. PTT has established a PTT Organization Excellence has applied its treasury and credit policy as a guideline in ƒ Â’ "&& "&& improvement plan, including the cascading plan to all units of & "&& the organization to ensure alignment between business plans cash liquidity, risk management on exchange rates and interest and targets, and organizational strategic direction to ensure its ž taking the following actions: “ > ]{|] &ÂŁ? Z its long-term loans, which resulted in a reduction of the loan Unit, Oil Business Unit, and PTT International Trading Â…[` Business Unit. “ J Â? This year PTT won the Best of the Best Award, the highest transactions in the import, export, international sales, and Â’ J ‰ "&& enterprises with high standards in all areas of operations for valued at 31,150 million US$, and added value to the Group three consecutive years. PTT was also granted an innova | \{{ ?=

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This year PTT successfully developed several innovative lubricating oil products, including Performa Super Synthetic < " ‚ š ~_+�[{€ – >> " – " ? [�& ? & products were aimed to provide customers of all segments access to lubricating oil under the new standards. To cope with the EU’s newly regulated emission trading scheme ~=& € "&& Z �™ a new jet fuel for aircraft to reduce the release of pollution & & Airways aircraft in December this year. Also this year, "&& "&& Z �‰ =?‹ designed for gasoline vehicles but later changed to use NGV as engine fuel. In the petrochemical sector, PTT reached an " ž"Z |{{† In other areas, PTT has implemented the use of the "&& ? > which will in turn extend the pipeline’s life and increase ~=J J € transmission pipelines and oil storage tanks to support the =›"

PTT Public Company Limited

Annual Report 2011

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Gas Pipeline Leak in the Gulf of Thailand A gas pipeline leak was reported on June 25 this year. The location of the leak was at the 24-inch T-bar connection of the Platong gas pipeline with the 34-inch main trunk ~ ÂĽ|€ & ]`Â? connecting the Platong Gas II facilities to the third main trunk line and associated subsea structures under the supplementary Third Gas Transmission Pipeline Master Plan, Z = ]_[[Â?]__[ ~]{{|Â?]{||€ ? support increasing gas demand in the fourth quarter of this year, with the procurement of additional natural gas from " Â…Â…{ JJ ž > construction and laying of this pipeline was conducted by  ? "  ~ ?€ ~J+ € stipulated in the construction insurance for the work during the monsoon season. PTT immediately activated an emergency response system after the accident, including an emergency announcement and setting up of an emergency center. All operating units involved in the delivery of the gas supply chain convened to develop possible solutions and mitigation measures to reduce impacts on all users along the entire supply chain. The emergency plan also included procurement of alternative fuel sources for power producers to avoid disruption in the capacity. Details of the operations plan are as follows: “ ? Â…[Â? []Â?

the gas supply in the system to compensate for the loss by 3 million liters of fuel oil equivalent per day. “ J power producers in compensation for the loss incurred by the incident, through cooperation with EGAT. All efforts were made to ensure there would be no disruption to the power generation and supply to the national grid. “ >  ‚  ‚ tanks into the piped natural gas system. Also, began to

PTT Public Company Limited

Annual Report 2011

 Â‚ energy supply. “ J # " system to ensure alignment with the sudden increase in  "  " production. “ ? their operations and make sure no additional incidents occur during the crisis. ? "&&

reconstruction work. The offshore pipeline system was fully resumed on August 15 this year. The activities in response to the incident includes; |€ "

” risk management and policy at all times. ]€ ? reviews and emergency drills annually. …€ " PTT has conducted a lesson-learned program to improve relevant standard procedures to prevent similar incidents from recurring, and to share knowledge with all relevant stakeholders ? monitoring of the repairs and solutions was carried out to assess

Ç° Ç° ĝǰ&OFSHZÇ°4FDVSJUZ With its direct responsibility for national energy security, PTT and all of its business units activated the emergency plans on energy procurement, product distribution and storage, delivery and shipment, and the disaster management plan if the situation escalated to impact PTT operations directly, as well as cooperation and communication with business partners and customers to be aware of PTT’s plans.

Ç° Ç° ĝǰ1SFDBVUJPOÇ°.FBTVSFTÇ°BOEÇ°$SJTJTÇ°3FTQPOTFÇ° PTT executed its precaution measures in response to potential crisis as follows: Â? "&& ~=J?€ „ of PTT and the Group. The center also provided 24-hour assistance to the public and injured people. Â? ? Â? emergency center and conducted a periodic assessment of the situation - Adopted the use of a tracking system to support rescue operations and monitoring of daily operations. - Executed facility protection with strips of sandbags and „ „

ǰ ǰ ĝǰ#VTJOFTTǰ$POUJOVJUZǰ.BOBHFNFOUǰ #$.

"&&ÂŒ Z?J * - Made adjustments to ensure no disruption of fuel supply The Great Floods  " PTT fully recognized the severe and widespread damage  " „ &  " ‚ PTT exerted all efforts to provide assistance and ease negative provinces when the rail system was disconnected due to the impacts on the public, including its staff, and to continue or „ }|Â? resume its operations using the measures summarized below. the northern and northeastern terminals to Thaioil and

PTT Public Company Limited

Annual Report 2011

communities with general assistance, including renovation, and inspection and repair services for electrical appliances, cooking gas tanks and accessories, agricultural machinery, haircuts, physical health and environment-related care, vocational training, EM Ball production, and multipurpose cleansing solutions. Additional free services were provided for vehicles used „ "ƒ? J "&&

 " and lubricating oil were sold at special discounts. - Set up evacuation plans and evacuation centers such as - In addition to the social programs, PTT Group, Ministry of " ' ? ƒ " & Energy, and EGAT jointly launched an emergency restoration developed as a backup to ensure business continuity with all „ operations and customers. „ Ç° Ç° ĝǰ'MPPEÇ°3FMJFGÇ°%JTBTUFSÇ°.BOBHFNFOUÇ°1MBO „ ” As the national energy company, PTT recognized the "&& ‰ ƒ It should be noted that PTT bravely went through this crisis Project to provide help to the public and injured parties. The

project was executed in three phases: preventive, remedial cooperation among all members and supporters of PTT Group. and relief, and restoration.

ǰ ǰ 4USBUFHJFTǰBOEǰ#VTJOFTTǰ%JSFDUJPOTǰPGǰ155ǰ(SPVQ - Preventive phase activities included distribution of „ emergency kits � ƒ rescue operations, setting up emergency assistance centers in Ayutthaya, Ang Thong, Nakhon Sawan, Phitsanulok, Z & ‹ ƒ ? ! � $ � device for the public and especially for rescue workers to protect themselves from electrocution. � ƒ „ �

& "&& consistent, sustainable growth in order to become a Thai Premier Multinational Energy company under strategic sustainable growth in 3 principles: continuous organizational performance ’ ~< � " ’ * <" € ~? €

~? ƒ * ? ƒ€ > addition, PTT operations are strategically executed to create and continuously build competitiveness. Details of these efforts are summarized below.

PTT Public Company Limited

Annual Report 2011

business unit during the PTT Top Executive Thinking Session ~&& € "&& & ~ & € & and strategic objectives, and to use them as a framework and guideline for all business units, including supporting lines and other companies within the Group, in preparing their � & && ]{|| future business direction of PTT Group as follows: | !Z> $ * * & achieved through business expansion in various geographical areas simultaneously with business development in other

ǰ ǰ ĝǰ4USBUFHJFTǰUPǰSFEVDFǰDPTUT ǰJODSFBTFǰQSPųUT ǰBOEǰ relevant to the supply chain, and proper risk management ǰ ǰ ǰ DPOUJOVPVTMZǰCVJMEǰDPNQFUJUJWFOFTT � " * Z � �? � and investment priority. Under the new approach, PTT has

ƒ š ? ’

ž - Synergy: Deeper and broader collaboration to forge and the Green Energy group. synergy and cooperation among PTT Group in a broader and ] ! Â‚ $ * deeper dimension, to reduce costs and increase competitive Green Growth: Given the sizes and nature of PTT businesses, edges, to ensure that investments and operations enjoy an which are prone to environmental concerns, PTT has been facing advantage in economies of scale, to share resources, to jointly |€ carry out research and technological development, to ensure ]€ the adequacy of business data management, and to promote public outcry toward global warming and its call for increasing

…€ knowledge management and knowledge sharing. "&& [€ Ç° Ç° ĝǰ4USBUFHJFTÇ°SFHBSEJOHÇ°TVTUBJOBCMFÇ°HSPXUIÇ°BOEÇ°WBMVFÇ°  " ‚ š creation - Growth: Sustainability and innovation to promote directly affects PTT’s business performance. sustainable business growth and innovations in products, Â… ! &ƒ ‚ $ * ‰ processes, and the business model to accelerate growth. The Excellence: This will drive PTT Group toward recognition of "&& ƒ & > being a company in the top quartile of world’s leading energy ƒ›– "&& ]{]{ "&& - Stakeholder Excellence: Multi-stakeholder balance strategies to drive the organization with operational excellence to was to create excellence in managing stakeholders and build and maintain its capability to compete in the international providing equitable balance among all parties. With the arena. nature and sizes of PTT’s businesses, impacts on stakeholders Both TTS and STS outcomes are reviewed, and directions are inevitable. In order to drive the organization and the business to achieve their visionary targets, strategic directions „ # "&&

economic conditions, energy situations, and petrochemical industry situations, as well as internal factors that might of all stakeholders. To achieve its vision and strategic objectives, PTT Group affect its business in the future. #

Power

PTT Public Company Limited

for Sustainable Future

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

Sustainability through sufďŹ ciency ways, supported by a united spirit to jointly restore Thailand Throughout its existence, PTT Group has been committed to its missions toward each of its stakeholders, recognizing its role as the national energy company, which have responsibility to create sustainable energy security and prosperity for the nation with three aspects of management balance: being a high performance organization committing to good corporate governance, and having social responsibility. To this end, PTT has focused on good practices in compliance with international standards as framework and with a goal of becoming a Thai Premier Multinational Energy Company. Early in 2012 PTT has achieved one of its goals by being ranked 17th on Dow Jones Sustainability Indexes (DJSI). This year, PTT Group consistently accomplished its missions to take care of the Thai people and participated in highly auspicious national events on the grand occasion of HM the King’s 84th birthday anniversary. PTT and its alliance network humbly presented their accomplishments based on = <J the King’s initiative so as to turn it into community ways that strengthened communities to self-reliance. When several re & „ history, PTT Group forged synergy among Thai energy companies to show its determination to work alongside Thais, in good times and bad, by confronting the crisis together with them, relieve hardship and restore livelihoods, and provide moral support to victims. This move is a proof of the power of unity and Thai hearts, which enabled us all to make great strides toward our future. Sustainability through sufďŹ ciency ways

Under the Reforestation in Honor of HM the King Project on the 50th Anniversary of the Accession to the Throne, involving 1 million rai of land, in which PTT and Thais applied a royal initiative to the preservation of national forests, massive reforestation began in 1994. PTT completed the targeted areas and humbly presented the achievement to HM the King in 2002. Such was a page in history that illustrated Thais’ unity and allegiance as a tribute to the monarchy. PTT then

extended this success to various environmental projects to produce manpower and communities that can continuously look after their forests and create natural prosperity and balance for Thailand’s sustainability. > `[ & " Project, PTT applied HM the King’s initiative by transfering knowledge to nine pilot communities in 2007 and expanded it to 87 communities in 58 provinces throughout the country this year. Each community now appreciates the true meaning ! $ Q mindset. What resulted were stronger communities, able to defend themselves, and their true contentment. In view of "&& ! $ knowledge to the urban community through the “Mindset ? < $ and establishment of a website called www.84tambonsforking. com to urge all Thais to learn and practice together the true ! $ � Q Q � J ! $ # � ! $ <J the King on his 84th birthday anniversary. These activities attracted over 900,000 persons. "&& ! & $ of knowledge derived from the project to HRH Princess Maha Chakri Sirindhorn on her gracious inauguration of an exhibition called “United Thais Pay Tribute to HM the King: + $ "&& < 31st this year. For wider publicity and sustainable happiness, PTT staged the exhibition at the Bangkok Convention Hall, CentralPlaza Ladprao, from August 31st to September 4th this year.

PTT Public Company Limited

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

and canned food along with more than 1 million bottles of drinking water, and setting up 11 assistance centers in eight provinces, namely Nakhon Sawan, Phitsanulok, Ayutthaya, Lop Buri, Sara Buri, Ang Thong, Pathum Thani, and Samut Prakan. Employee teams took turns visiting these centers to serve the public every day by providing boxed meals, drinking water, mobile toilets, mobile phone charging, physical examinations, haircuts, and lessons on EM ball molding. An average of 2,000 people per day eased their hardship at such centers.

SufďŹ ciency ways, supported by a united spirit to jointly restore Thailand

Thailand’s Great Floods, spanning September to December 2011, ravaged 26 provinces of the North to the Central Region, affecting about 700,000 households or 2 million people. Devastated were lives, properties, productivity, industrial plants and factories, domestic investment, and national economic security. To deal with this emergency, PTT Group activated its business preparedness by safeguarding vital sites from impacts or minimizing impacts. While some PTT facilities and some employees were affected, PTT Group, as the national energy company, persisted in performing duties of securing energy supply—not only to ensure that Thailand would have access to energy supply, but to ensure that the mission of “the power $ ~ agencies, the military, the private sector, and the mass media) was duly supported. Meanwhile, an ad hoc plan was devised by PTT Group to coordinate help under the “PTT Group Unites Thai Power ƒ ‰ š $ # ~ " | " ]€ Besides these, a program was launched to supply PTT fuels and the “PTT Group Unites Thai Power to Rehabilitate Flood „ Q ~ ‰ š $ # ~ " …€ Love Engagement Project), in which a caravan of tank trucks Phase 1 (prevention): Emphasis was on helping those in carrying more than 400,000 liters of gasoline and high-speed „ diesel, along with 30,000 liters of lubricants for boat enginesbags, drinking water, and preparedness & response manuals for totaling Baht 25 million in value-was dispatched to PTT service distribution to the target groups and funding them through the Z Z |_� public sector. tanks used in relief efforts by disaster mitigation units in various Phase 2 (remedial and relief): Emphasis was on providing areas. Then there was support to a project called “Government urgent essential items, including more than 100,000 survival bags ‹ ƒ š & $

PTT Public Company Limited

Annual Report 2011

13,200 liters of 91- octane gasoline was put into 18 -liter tanks to facilitate the public sector’s relief missions. PTT mobilized a mobile energy service unit by modifying oil trucks into caravans selling low-priced fuels (91-octane �

€ „ levels around Bangkok and its perimeter, especially those with demand for boat fuels or with large water pumps and – � |`� were possible. PTT also dispatched two 5,000-liter oil trucks to serve communities that stayed put, including those on Rama II Road, Rom Klao Road, and the Eastern Ring Road of Bangkok, and secured two 15,000-liter oil trucks to serve in place of „ � ƒ > ƒ Nakhon In – Rama V Road, also in Bangkok. It launched boats selling household LPG at discounted prices for those living on Buddhamonthon 5 Road and launched sales outlets at 14 PTT service stations in Bangkok and its perimeter, where 15-kilogram LPG tanks could be exchanged.

Stage 3 (restoration): PTT Group speeded up a project to revive properties and mental health of affected people by setting up rehabilitation centers of two types (main centers and mobile centers) in six provinces and joined external volunteer clubs and PTT employees from PTT Volunteers Club in cleaning public places, temples, educational institutions, and communities for a prompt return to their working conditions. It launched other assistance programs, including the complimentary PTT Engine Tune-Up program at 100 PTT service stations in 21 affected provinces, lubricating oil and LPG at special discounts, distribution of 2 million =J ’ „ join in EM ball molding and EM ball distribution to affected areas. In addition, PTT Group provided help in other forms, including the PTT Group Seal program, designed for safe evacuation mission of employees and the public from their homes, and the Little Duck – „ excretion bags, an emergency light program (in which a light bulb was connected to the cooking gas tank to provide makeshift €  " „ victims by using high-pressure water jets/sprays to ease dealers’ rehabilitation efforts. Thanks to PTT’s background of contributing to community and social development based on their own potential in a sustainable way, PTT encouraged its alliance network to

earnestly and continually join its social responsibility activities under six frameworks, namely education and youths, community development, biodiversity management, town environmental development, network development to make a name for Thailand, and cultivation of volunteering spirit among employees. Education and youths

PTT produces smart and conscientious youths in science cational development, ranging from laying down infrastructure, developing schools’ quality, giving educational opportunities, skill training, to cultivating virtue and ethics to develop the country. Below are PTT Group’s efforts this year:

“ "&& * & ] {{{ ~ ^ _ million baht) were given to primary-level to college education students, provided that needy youths from schools near PTT’s operation sites across the country commanded decent academic records.

“ []nd > " * This contest gave Thai youths an international forum for showcasing their talents.

PTT Public Company Limited

Annual Report 2011

“ "&& § ? ]{||* > “ "&& Q ” ~ _ Schools Project): This program has educated students on 5S camp enriched 120 college students’ knowledge of science and energy. since 1997. To date, 42 schools have joined. “ >

< * & developed Rayong’s primary educational system for sustainable development.

“ * & "&& was engaged in two schools: Ban Cho Krathin Patthana School in Nakhon Sawan and Ban Krok Yai Cha School in Rayong. “ "&& ? ? * & of alternative energy and energy-conscious consumption by youths. Community development

& of life with a view to self-reliance. Since 2007, PTT Group `[ & " " # expanding from nine pilot communities to 87 tambon in 58 “ & &  * ]` provinces this year in line with the project goal that aspired was dedicated to Ban Huai Kood School of Phrae, and library for each community’s self-realization and discovery of their books were donated to 78 Group network schools across the potential, ready to propagate communities’ concepts so as to produce mutual learning. country, worth some Baht 1.8 million.

PTT Public Company Limited

Annual Report 2011

Biodiversity

Participation by all society sectors is a key factor for the collective success of conserving and restoring biodiversity resources. PTT Group is continuing the project, involving communities and society in a sustainable manner.

ĝǰ&OWJSPONFOU: From the origin (The Reforestation in Honor of HM the King Project on the 50th Anniversary of the Accession to the Throne), PTT expanded the success to the cultivation of

awareness for environmental conservation and created a network of forest stewards through the PTT Youths to Conserve Forest " + š

# People Volunteer for Forest Protection training project-all these to serve as a key force for forest stewardship from one generation to another. In addition, PTT this year staged the Green Globe Award contest in its 13th successive year to promote its network ! + ? + ‰ $ which employees engaged themselves was mangrove reforestation at the Khlong Khone Mangrove Forest Conservation Center in Samut Songkhram to enrich the fertility of mangrove forests and maintain ecological balance.

PTT Public Company Limited

Annual Report 2011

ĝǰ3FTFBSDIÇ°XPSLT: PTT joined a project on development ĝǰ$POTFSWBUJPOÇ°PGÇ°TPJMÇ°BOEÇ°XBUFS: Designed to promote vetiver planting, the contest on the development and campaign for vetiver application in line with HM the King’s initiative was continued by the PTT Group for six successive years. The Group developed vetiver into a value adder while encouraging communities to successfully develop their product designs and production to generate income for communities. The community vetiver products have become regular sales items of Pat Pat shop. the realization making use of vetiver to protect soil and water. PTT’s consistent development work on vetiver application has earned it The King of Thailand Vetiver Award bestowed by HRH Princess Maha Chakri Sirindhorn, for outstanding promotion and technology transfer by a private entity in the 5th International Vetiver Seminar held in India. ĝǰ1SPNPUJPOÇ°PGÇ°MFBSOJOH: PTT Group developed the Sirinath Rajini Center for Mangrove Forest Studies on 786 rai at Amphoe Pran Buri, Prachuap Khiri Khan province, into a virtual archive of the redemption of forests from a crisis and a narrative of the lessons learned from yesteryears. The center will serve as a base for further cultivation and restoration of mangrove forests, as well as future integrated management of natural resources. In 2011, there were 55,669 visitors to the center.

of knowledge and investigation of Thailand’s policy on biological � ecological research from the coast to the mountain peak. This “Project on Biological Resource Management from the Coast to " ~' � ' ‚ €$ cloud forest of Khao Nan National Park, Nakhon Si Thammarat. This area, sensitive to global temperature change, is also a main watershed. The project created a body of fundamental knowledge, developed personnel and researchers, and supported research and dissertations numbering 23 pieces through team expeditions. Such information yielded information on 1,587 species that represented the discovery of new organisms of the world and Thailand, and that of rare species and near-extinct ones. Equally important, these species have played a key role in explaining the impacts of global warming on biodiversity changes.

Also, in 2011, PTT was a second place winner of Asean Champions of Biodiversity, from Asean Centre for Biodiversity in the Philippines, for its continuous works on biodiversity preservation in Thailand.

PTT Public Company Limited

Annual Report 2011

Town environmental development

Fully recognizing its good citizen role, particularly that in Map Ta Phut, Rayong province-both a home and a vital production hub-PTT Group takes very seriously operation with social responsibility, earnest and consistent participation with communities, and looking after and developing the quality of life for the local community to be truly satisfactory and contented. To this end, the Group executed its development plan in three aspects: promotion of the quality of life, addition of green areas, and support to education.

ĝǰ1SPNPUJPOǰPGǰUIFǰRVBMJUZǰPGǰMJGF: The Group has long run a program called Community Sharing and Mobile Clinic to provide complimentary basic medical care, and another on promotion of community enterprises to strengthen community livelihoods, and analyze and develop their capability to match community needs.

ĝǰ4VQQPSUǰUPǰFEVDBUJPO: The Petro Camp to Petro Champ Q of the petrochemical industry and support scholarships for selected youths to pursue their college study. The target group was schools in areas where PTT units were located.

Besides looking after society and communities on behalf of PTT Group, PTT joined other companies located in Map Ta Phut in setting up a Community Partnerships to establish standard systems for running safety, health, and environmental operation even better than legally required, to develop model environmentally friendly plants, and to promote the ĝǰ"EEJUJPOÇ°PGÇ°HSFFOÇ°BSFBT: This year the Green Rayong quality of life for communities through health and education program has expanded its green areas by planting a 42-rai “forest so that Rayong can serve as a model of livable towns. This $ <J ' `[ year the initiative presented 200 nursing scholarships, worth 12 at Wat Krok Yai Cha while looking after trees in communities and million baht, to students who were interested in pursuing various Group-operated areas, including a 780-rai area around the the nursing profession and wished to work in the area. BeRayong Child Welfare Home, with continual monitoring since sides easing the shortage of local medical professionals, this 2008. The Princess Maha Chakri Sirindhorn Herb Garden continued move will upgrade public health service for Rayong residents. to serve communities and public visitors to the garden and its Finally, the initiative has launched a program to tutor youths activities. This year it welcomed more than 300,000 visitors, for university entrance examinations to raise their chances of generating more than 20 million baht in income for communities. gaining admission to universities.

PTT Public Company Limited

Annual Report 2011

Network development to make a name for Thailand

2011), a youth tennis tournament (PTT Junior Championships 2011), a world-class female golf tournament (Honda LPGA PTT Group is committed to making a name for Thailand Thailand 2011), the 8th Khon Kaen International Marathon race, and a Thai boxing competition (the 2nd Thai Fight). Thailand’s stability among the world community. To achieve this, PTT has continually sponsored national and international activities-whether sports, arts, or cultural.

ĝǰ4QPSUT: Besides sponsoring various sports associations to raise standards of Thai athletes at the local and national levels, PTT has carved national sports development opportunities through the PTT Invitational 2011 soccer competition to prepare and upgrade the PTT Rayong team, formed in 1983, to step up to the professional level, whether that of Thai Premier League or international premier leagues.

The Company also sponsored a polo horse race (Asian Beach Polo Championship B. Grimm-Intercontinental) to raise !' ? ~J €$ project under the initiative of HRH Princess Bhachara Kittiyabha, designed to help the underprivileged in Thai society. This year PTT organized a third PTT Sports Lovers activity to enlist youths nationwide to gain experience and improve their sports skills with professional athletes in the PTT & ]{|| & youths’ capability while educating them on the rules and etiquettes of world sports. To grow volunteering spirit in Thai This year PTT hosted and co-hosted world-class tournaments, youths, PTT engaged them in coral breeding at the Air and &" ~"&& & Coastal Defence Command in Amphoe Sattahip in Chon Buri. ]{||€ +& ~"&& "

PTT Public Company Limited

Annual Report 2011

ĝǰ"SUT: PTT staged an arts exhibition on its 25th anniversary,

! * & " > $ of 19 drawings by national artists, half (3.16 million baht) of the proceeds of which was humbly presented to HM the King. PTT and Silpakorn University organized the 26th PTT Arts Contest under the !`[ ÂŚ ' Z $ contests at regional levels-for the 12th year in the North with Chiang Mai University, the 8th year in the South with Thaksin University, and the 6th year in the Northeast with Khon Kaen University.

ĝǰ$VMUVSBM: PTT joined in the restoration and conservation of the Poo-cha drum-beating tradition by organizing in Lampang province the 10th Poo-cha Drum-beating Festival in honor of HM the King. It also organized the ninth PTT youth camp for Poo-cha drum-beating conservation, engaging more than 100 youths from schools in 13 districts of the province to attend the camp to master drumming from drum experts at Sao Lang Pagoda.

Cultivation of volunteering spirit among employees

PTT Group’s policy is to grow a value for the awareness of social responsibility participation by allowing employees to spend at least four hours a year each in undertaking CSR activities through the Power of Thai Volunteers club, including mangrove reforestation, packing survival bags, or other public service activities and social projects. This represents participation in activities over and above their professions. Employees are free to bring their family members to participate as part of PTT Group’s volunteer families-a nice way to boost morale among the Group from one generation to another, and to foster volunteering spirit in Thai families. PTT Group’s social responsibility role today implies not only the total dedication of its employees, but also a brimming collective force of the network of all Thais who joined one another in bringing out the best in Thai society with their common spirit and aspiration: sustainable happiness and strength of Thailand and Thai society under the moral authority of our beloved monarch.

PTT Public Company Limited

Quality, Security, Safety, Health and Environmental (QSHE) Management for Organizational Excellence

Annual Report 2011

PTT Public Company Limited

Annual Report 2011

Quality, Security, Safety, Health and Environmental (QSHE) Management for Organizational Excellence On its stride toward becoming a sustainable organization with

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

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> ]{|| "&& Q ]{|| "&& <= " – ~+ € � ”

Â? Â?

"&& & "&& > "&&Q & "&&

"&& Q

>

PTT Public Company Limited

Annual Report 2011

Financial Status and Performance PTT and its subsidiaries’ performance ‹ * J Z

=Z>&– ª ~ €

= ~=Z>&€ > Net income

2010

2011

Inc. (Dec.)

| `}` ^`] |\{ Â…Â…{ |` `|^ ^ Â…^] |]Â… ^]_ Â…Â… }^|

] []` |^_ ]|{ \[` ]} [^Â… | ]^^ |__ [Â…{ [Â… ]Â…|

]\ }† ]… \† _^ ^† ~`{ |†€ ]_ \† ]\ …†

83,992

105,296

25.4%

Note * ÂŞ= Â’ Â?

"&& ]{|| ] []` |^_ ]{|{ _]} [`… ]\ }† & ~& – \` { ‹ œ ]{|{ |{^ ] ‹ œ ]{||€ &

= " ~= "€ ^ ~ " ^€ ™ ]{|{ ™ ]{|| ’ �

~=Z>&– € ]{|{ |\{ ……{ [{ [|` ]… \† ]|{ \[` ]{|| > ]{|| ]} [^… ]{|{ |{ ^[\ _^ ^† = ? < – " ~<–"=€  – " ~ –"=€ "&& " ?  ~"&&"=€ ~ "&& ? " ?  € – |st ]{|{

™ | st ]{|| ‰ | ]{|| ‰

J ~J= € ]{|{ J= J= & > " > ]{|| " & ™ " " < ‰ ” & ]{|| ]{|{ ƒJ

& ™ < ]{|| "&& | ]^^ _ {}^ ]{|{ "&& ]| …{[ ]_ [† `… }}] ~ ]} _` € ]{|{ |{_ ]}^ ]{|| ~ …^ }| €

PTT Public Company Limited

Annual Report 2011

PTT and its subsidiaries’ ďŹ nancial performance comparison by business group ‹ * J Z 2010

2011

Inc. (Dec.)

| `}` ^`] |[{ ^_^ …_\ {|` [`{ \{{ | {^| ^}[ [^ [_} ][ ^_] ] {|[ ~]|[ _||€

] []` |^_ |^} ^[^ [|] `{| __` _][ | []\ __] \_ |\| …{ `_| ] }{} ~][} ]`}€

]\ }† ]{ ^† |_ ^† |^ ]† …[ _† ^| `† ]_ ]† [[ [† ~|^ ]†€

|\{ Â…Â…{ |{| `Â…} [\ ]|] |] |]^ ] Â…_Â… | |}} _ Â…^] [} |}{

]|{ \[` ||` {|] ^] |}_ |Â… ]][ Â… ]}{ Â… \\` } ]\_ ^[^ Â…]`

]… \† |_ }† …| \† } |† …} `† n.m. \… {† n.m. \] ^†

|]… ^]_ ^} _…^ …\ }__ } \|\ ] …[] `…| … }…^ ~``[€ |}]

|__ […{ `[ [`{ [^ }}] |{ \`| … ]\\ ] `}[ \ ]{[ ~_]`€ ……{

]_ \† ]| _† ]… `† |{ }† …} }† n.m. `… {† [{ …† \| }†

– ’

[^ \{_

__ Â…|`

|` [†

‰

|^ `{Â…

|` {[]

\ [†

^ Â…^]

| ]^^

~`{ |†€

>

Â…Â… }^|

[Â… ]Â…|

]\ …†

Net income

83,992

105,296

25.4%

29.58

36.91

24.8%

› “ = › " “ ‚ |ž “ ]ž “ > & …ž “ " [ž “ ? _ž “ ^ž “ = =Z>&– “ = › " “ ‚ |ž “ ]ž “ > & …ž “ " [ž “ ? _ž “ ^ž “ = =Z>& “ = › " “ ‚ |ž “ ]ž “ > & …ž “ " [ž “ ? _ž “ ^ž “ =

~ €

Earnings per share (Baht/share) 7/

Notes * |ž > "&& ‚ – ?  ~"&&‚ –€ "&&  Â‚ ?  ~"&& Â‚ € ? < " " ?  ~?<""€ & & Â?J ~& € ?  ~&&J ~&€€ & & Â?J ~J € Z ~&&J ~J€€ – ? " " ?  ~–? "€ ]ž > "&& ~? € ?  ~"&&? Â€ Z = ?  ~ Z=? Â€ "&&

= "  ~"&& =€ "&& ƒ Z ?  ~"&&ƒZ€ &  Z ?  ~& Z?€ |{{† & Z?Q ” "&&ƒZ "&&

PTT Public Company Limited

Annual Report 2011

…ž > "&& > & "  ~"&&&€ [ž > "&& " J ?  ~"&&"J€ "&& "  ?  ~"&&" € "&& & & ?  ~"&& & ‚'€ "&& ? ?  ~"&& ?€ <J? " ?  ~<J?€ "&& J?? Z ? ?  ~"&&J??€ ~_{† # J ? ? ~J??€€ _ž > "&& " J "  ~"&& "J€ "&& J  ~"&&J € "&&> |{{† ^{† ” > ? <  ~>?<€ [{† "&& "J ^ž > = ? ?  ~= ? € Z ?  ~Z € "&& > ?  ~"&&>€ \ž Z

Upstream Business á /DSQNKDTL $WOKNQ@SHNM @MC /QNCTBSHNM !TRHMDRR : PTT Exploration and Production Public Co., Ltd. (PTTEP)

> ]{|| "&&=" |^} ^[^ baht, ]` }}{ baht ]{ ^† ]{|{ due to; |€ & ‹ Âœ ]Â… `† [[ ` ‹ Âœ Z = ]{|{ __ _ ‹ Âœ Z = ]{|| ]€ ]^[ _\_ Z =– ]{|{ ]^_ {[\ Z =– ]{|| & J&™– Â?Z|\ # – Z ~– € ? ''– # š |^Â?| # < # Z`ž…] } # ]{|{ =Z>&– ]{|| ||` {|] baht which increased |^ |\Â… baht |_ }† ]{|{ < Â… `}[ million baht ]{|{ Â? > =J > >> "&&=" J JÂ… J\ J|| Z # > ]{|{ Â? J ¤ # < Z ƒ Â’ ? ''–

> J # > ]{|| Â… {[Â… baht due to =Z>& ]{|| `[ [`{ baht |[ }[[ million baht ]| _† =Z>&– < Â’ | |]} baht mainly due | ? [ # ? ''– š |^Â?| # # ]{|| á -@STQ@K &@R !TRHMDRR 4MHS

]{|| [|] `{| baht which __ \`… baht |_ ^† ]{|{ * Natural Gas sales & > " ~ "€ " ^ ™ ]{|| natural gas demand. GSPs’ product sales & " Q ]{|{ > ]{|| " Q "Q

PTT Public Company Limited

Annual Report 2011

The details of reference products prices are as follows: ย * ย ย & 2010

2011

Inc. (Dec.)

\|ย

`_{

|} ]ย

= ]ย

| {\[

| |`ย

|{ |ย

" ]ย

| |ย {

| ย `|

]] ]ย

< ย " ]ย

| ]]]

| ย ^`

|| }ย

" ]ย

| ย [{

| _`{

|\ }ย

^^{

`_ย

]} ]ย

ย " |ย

ย ย ย Note :

|ย ? " ~?"ย ]ย = " ย ย J " ~J "Q ย

=Z>&ย ]{|| ^] |}_ ]{|{ |[ }`ย ย | \ย " = " " ^ ย ]{|{ ย ]{|| ย

< ย ย & ] Z ย ย Q J ^ ]{|{ ย |_ ]{|] ย ย |st ]{|| "&& _ }^} =Z>& ]{|| [^ }}] =Z>&ย = " " ^

=Z>&ย ]{|| |ย ]][ Y | {}` ]{|{ =Z>& |{ \`| | {^[ =Z>&ย รท (MSDQM@SHNM@K 3Q@CHMF !TRHMDRR 4MHS

]{|| | []\ __] ย ^_ `_` ย [ _ย ย ^ |ย ย =Z>&ย ]{|| ย ]}{ }ย \ รท /DSQNBGDLHB@K !TRHMDRR &QNTO

Downstream Business รท .HK !TRHMDRR 4MHS

]{|| __` _][ \\ `][ |^ ]ย J ย "

]{|| ]{|{ ]` \|] ^| `ย "&& " J ? ย [} }ย \ \ย ]{|{ =Z>&ย ย \\` =Z>& ] `}[ =Z>&ย ] _\} =Z>& ] {^ย ]{|{

รท (MSDQM@SHNM@K (MUDRSLDMS !TRHMDRR

Coal Business ]{|| ^ |}} ]_ ]ย ]{|{ & ]\ ^ย \] ` ย ย ]{|{ }] } ย ย ]{|| ย ย =Z>&ย ย }|ย _ ย ^] ]{|{ } ]\_ ]{|| =Z>& ]{|| \ ]{[ ย ]^` ]{|{ =Z>&ย -DS HMBNLD V@R LHKKHNM A@GS HM 2011, increased by 21,304 million baht NQ EQNL ย "&& ]{|| |{_ ]}^ ]{|{ ]| ย {[ ]_ [ย Z "&& "&&=" > "&&Q

= " " ^ ย ]{|{ ย ]{|| # * * > ]{|| |{ ^[\ _^ ^ย |` `|^ ]{|{ ]} [^ย ]{|| mainly due to; ย &

PTT Public Company Limited

Annual Report 2011

"&&"=Q = ? <ย "= ย ย "= ย |st, ]{|{ ย |st ]{|| ย |st ]{|| ]{|| ]{|{ J=

J= & ย &

]{|{ ย & " > " ย ย * > ]{|| "&&

| ]^^ _ {}^ ^ ย ^] ]{|{ * > ]{|| "&& Q | ]ย } \ [ย |^ `{ย ]{|{ |` {[] ]{|| * & ]{|| [ย ]ย | } ]\{ ย ย }^| ]{|{ "&&=" ย

"&&="Q ~ ย ย ` ย [|

Details of net income from investments in associates are as follows; ย * J Z 2010

2011

Inc. (Dec.)

ย

} ย \\

|ย [[_

[ย [ย

Petrochemical associates

} |\}

|_ \}[

\] |ย

[|{

_{\

]ย \ย

Oil associates

PTT Public Company Limited

Annual Report 2011

‹ * J Z 2010

2011

Inc. (Dec.)

~||_€

~…{]€

~|^] ^†€

Other associates

~…_€

|}

|_[ …†

18,816

29,463

56.6%

Total

The Analysis of PTT and its subsidiaries’ consolidated Financial status as of December 31st, 2011, compared with December 31st, 2010. ‹ * J Z Consolidated ďŹ nancial statements

Assets ? > Â? " ” ‚ Â? Total assets Liabilities ?  Â? ~ € ‚ Â? Total liabilities Equity & ” ” ? ‚ Â? Total shareholders’ equity Total liabilities and equity á RRDSR st

– …| ]{|| "&& Q | [{] [|] |\… …{… |[ |† ]{|{ * * ? |\ ]][ [ \†

� …| {|… |… `]{ Z [ \|_ ” � …{ [`|

Dec 31, 2011

Dec 31, 2010

Inc. (Dec.)

Â…`| |_\ ][| |^Â… ^{| Â…[| |\` \_| 1,402,412

Â…^Â… }Â…Â… ]]{ `Â…Â… [}^ ^^| |[\ ^`] 1,229,109

[ \† } ]† ]| |† ]| {† 14.1%

]`{ _Â…\ Â…}] [{Â… `_ _][ 758,464

][| |{] Â…\| {]} _} _^[ 671,695

|^ [† _ `† [… ^† 12.9%

___ }]{ `` {]` 643,948 1,402,412

[`{ \{[ \^ \|{ 557,414 1,229,109

|_ ^† |[ `† 15.5% 14.1%

* � � � ]{ ……{ } ]† ]{|| ]} [^… |{ }]] * " ” |{[ ^`| ]| |† ~|€

`} `}{ "&&="Q # * [{† ?

PTT Public Company Limited

Annual Report 2011

รท +H@AHKHSHDR

''ย # ~]ย "&& # # \ `]} ~ย ย & # ย ย # "&&ย ย ? ย `ย _ * ย ย | {^` ]| {ย ย | }{] |{ |__ "&&="Q ? ''ย # ย [ ย }{

ย ย |st ]{|| "&& Q \_` [^[ `^ \^` |] }ย ]{|{ ย } [ย _ |^ [ย ]\ {\} |[ [\[ ย ย ~ ย ย }] [{ย ]| ย \[ _ `ย ย "&&=" \{{ ย ย ^]_ ย ย ย [| \{| < "&&Q || ย _\ ` {{{ & * ย * J Z

Maturity (since December 31, 2011)

PTT

ย { ย {\ ^{ + | st ~ย ย | ]{|]ย

PTTEP /33-&#

TTM(T) TTM(M)

DCAP

PTTAC

HMC

PTTPL

total

|{{ `{

[_{ {{

ย ย

\|^ ]]

_] ย {

_` [|

^\` |]

[]] ]`

]{{ {{ _[ \`] {[

|{{ `{

[_{ {{ | ]^\ ^^

\|^ ]]

_\ {_ |ย { `|

^\` |ย

_^_ ]|

]]_ {{ ย ` ย _ย {|

|\^ [{ | ย _{ {{ ^ ^|^ [^ | }`\ {{ ||{ }[ ย }] [[ ] {ย [ ย \ | ^}_ ^]

`]_ {{ |^[ ^ย | `_

]} |]` }}

_ {ย ย |_

] _

}^ |ย } }}

_ย ย {ย ^]

_

`\ _\^ \{

ย ] ^|] |ย

Note:

PTTI

]| \}^ ย ]

| ]

Total

EnCo

243,153.28 112,745.22

ย ย ] ย {{ {{

ย ย _ _`} }^ |}{ |` ]\{ _} ] \{_ _[ ] ^`[ \ย

ย ย |ย ย }]} `ย

378.00 4,550.00 7,884.12 9,009.40 410.47 852.25 6,096.16 5,367.84 1,250.00 391,696.74

ย

The loans outstanding (including long-term loans, debentures and bonds due within one year and later than one year) as of December 31st, 2011 consisted of loans in Baht currency and foreign currencies, details of which are as follows: ย * J Z Long-term loans

Baht currency ย Total " ย ย ~ย ย

PTT

PTTEP

|\{ `|_ }^ [} {|[ {} \] ย ย \ ย ] ^ย \ย | |ย ][ย |_ย ]` ||] \[_ ]] ]} \_ย

_^ _ย ย

/33-&#

EnCo

PTTI

ย \` {{ [ __{ {{

ย ย

ย ย

TTM(T) TTM(M) DCAP

ย ย

ย ย \ ``[ |] } {{} [{

ย \` {{ [ __{ {{ \ ``[ |] } {{} [{ { {{ย

ย ย `_] ]_ [|{ [\

PTTAC

HMC

PTTPL

total

ย ย ] \[^ {\ | ]_{ {{ ]]} ^{^ ย `

ย ย ^ {}^ |^ ] ^]| \\

ย ย |^] {}{ ย ^

[|{ [\ `_] ]_ ^ {}^ |^ _ ย ^\ `[ | ]_{ {{ ย }| ^}^ \[

{ {{ย |{{ {{ย |{{ {{ย |{{ {{ย { {{ย |{{ {{ย [` `[ย

{ {{ย

[| ย `ย

PTT Public Company Limited

Annual Report 2011

ย ย |st ]{|| |{ ]{^

J ย ย ]_ }^{ [ย ^ย ]ย ย ]ย ? ''ย # "&&=" รท 2G@QDGNKCDQRรฐ $PTHSX

ย ย |st ]{|| "&& Q Q ย ^[ย }[` ]{|{ `^ _ย [ |_ _ย \[ |_[ ]{|| "&& Q |{_ ]}^ ]{|{ ย ]{|| ย ] \}ย "&&Q ย "&& = " "

"&&ย "&& J ย ย \] _` ~\ ]_\ ^{{ ย | ^]_ \{ ย ย |st ]{|| "&& |st ]{{_ ]} ]{{^ & ย { _} { ย _ รท +HPTHCHSX

ย ย ย |st ]{|| "&& ย |} ^^} ย |ย _ `{| ย ||^ |ย ] ย ย *

ย * J Z

ย ย ย = ย ?

|\\ __{ ~|^{ [_[ย ~[_ []ย ย | [`} \ |^}

ย ย ? ย

~|} ^^}ย |ย _ `{|

Cash and cash equivalents at the end of the period

116,132

> "&& Q ย ย on equity.

PTT Public Company Limited

Annual Report 2011

PTT and Its AfďŹ liates E&P Business Group

"&& = " " Gas Business Group

Percentage "&&=" ^_ ]} Percentage &&J ~&€ _{ {{

& & Â?J ~& € ?  & & Â?J ~J € &&J ~J€ _{ {{ Z "&& ‚ – ?  "&&‚ – _` {{ "&& ‹ ?  PTTUT [{ {{ – ? " –? " Â…_ {{ " ?  & " ?  TP ]^ {{ > " ~& € ?  >"& ]{ {{ ƒ " ?  Âƒ"? |_ {{ "&&  Â‚ ?  "&& Â‚ |{{ {{ ? < " " ?<"" |{{ {{ ?  Z Z>" "  Z Z>" ]Â… {{ ‚ ‚ = ?  Â‚‚= Â…{ {{ Z Â? ? ?  Z>? ]_ {{ Oil Business Group

"&& ~? € ?  Z = ?  "&& ƒ Z ?  š  " ?  &  Z ?  '= > Â?"&&  " Z " ~& € ?  " ~< Â’ € ?  " ~J € ?  " ~ € ?  & " " ?  > ?  Z ‰ " ‰ " & ? Â

Percentage |{{ {{ |{{ {{ |{{ {{ [_ {{ [` }_

"&&? Z=? PTTRB š " & Z? '" " ~& € " ~< Â’ € " ~J € " ~ € &< "" >‚= >" Z ‰ ‰"&

Â…_ {{ ]_ {{ ]{ {{ ]_ {{ Â…Â… |} |^ ^\ \ {^ ] \^

International Investment Business Group

"&& > ? Â "&&

= " Â International Trading Business Group

"&& > & " Â

Percentage "&&> |{{ {{ "&& = |{{ {{ Percentage PTTT |{{ {{

Petrochemical Business Group

"&& ? " "&& " ?  "&& " J ?  "&& ? ?  <J? " ?  "&& "  ?  "&& J › =

?  "&& & & ?  "&& J?? Z ?  ReďŹ ning Business Group

Thai Oil Plc. >ƒ"? " " ƒ ?  Z " " Other Business Group

Z ?  = ? ?  "&& >?& ?  – > " "&& = ? Â

"&& ? ""? PTTPM "&& ? <J? "&&" "&&J= "&& & ‚' "&&J??

Percentage [` }] [{ {{ _{ {{ [` _{ [| [[ |{{ {{ [{ {{ |{{ {{ _{ {{

Percentage TOP [} |{ >ƒ"? …` _| "ƒ? …^ {{ Z?" ]\ ]] Percentage Z ]_ {{ =‚? _{ {{ "&&>?& ]{ {{ &>" |… …… "&&= [{ {{

PTT Public Company Limited

Annual Report 2011

Structure of PTT Revenue and Subsidiaries by Product Line

Product / Service

| ‚ Products

Operated by

TCHSDC 2010 (Revised) 2011 (Audited) Shareholding of the Million Baht Million Baht Million Baht company

"&& " ~ Z ‹ € "&& " ~ Z ‹ > & Z ‹ € "&& = " " ~"&&="€ "&& ‚ – ?  ~"&&‚ –€ ? < " " ?  ~?<""€  "&&="Q PTT Plc.

]`_ }Â…\ Â…_ |\ ^Â… [^ _`[ [|

] `\

^` [{} |Â…

Â… _Â…

^{ {`_ \{

] [Â…

|ž

^] _Â…} ]]

Â… `^

\] |Â…` Â…`

Â… \Â…

\[ `^_ _{

Â… {]

_` {{

[ |}_ \_

{ ]^

_ \Â…} Â…`

{ Â…{

\ []] `Â…

{ Â…{

|{{ {{

Â?

Â?

|[} _`

{ {|

|_\ [}

{ {|

Total Revenue from Natural Gas Products

] Oil Products

"&& " ~ Z ‹ > & Z ‹ € "&& = " " ~"&&="€  "&&="Q by PTT Plc. "&& > & "  ~"&&&€ "&& ~? € ?  ~"&&? Â€ ƒ Z ?  ~ƒZ € Z = ?  ~ Z=? Â€ "&& ƒ Z ?  ~"&&ƒZ€

~_` |\[ }_€ ~… _}€

~\| }_{ |_€ ~… \|€ ~\] \\` …{€ ~] }[€

341,081.78 21.03

402,943.77 20.82

449,525.56 18.18

| {][ …\} }^ ^… |_ | ]|] {|\ _… ^] _` | _\[ ^}^ \| ^… ^| |ž

_Â… {{` Â…{

Â… ]\

~…} |{^ `_€ ~] [|€ |{{ {{

_| `[] \[

Â… ]{

|{{ {{ ]ž

Â… {\} _` { ]`

{ |} Â?

|{{ {{ |{{ {{

|^ Â…^[ Â…[ ]\ }_| ]_

| {| | \]

Total Revenue from Oil Products

… Petrochemical "&& " ~ Z ‹ Products > & Z ‹ € "&& " J ?  ~"&&"J€ <J? " ?  ~<J?€

Â…]` [_\ [[ |^ }^ Â…\} \\] Â…[ |_ Â…[

^_ {|{ {^

Â… Â…^

}| {{{ |[

Â… ^`

~_{ {…[ ]_€ ~] _`€ ~^^ _`^ ^]€ ~] ^}€ \\ {`[ [\

Â… }` |][ }^_ |\

[ ][^ `Â… { ]] Â? Â? ]] `_Â… {| Â…] [|` `[

| |\ | ^\

_ {_

^ \\{ Â…` { ]\ Â? Â? |} _Â…| `| Â…^ _]\ \]

{ \} | [\

1,137,519.60 70.13 1,363,596.49 70.40 1,786,905.31 72.18

[Â… ]]^ {\

] ^^

[` ^\[ |`

] _|

\| \_] ^\

] }{

_{ {{ž

]^ {^` {]

| ^|

Â…} ]}_ [|

] {Â…

^Â… [_` ||

] _^

[| [[

^ ]Â…] ]|

{ Â…`

^ \^{ _`

{ Â…_

|{ [|\ |[

{ []

Total Revenue from Petrochemical Products [ Mining Products "&& > ?  ~"&&>€

|{{ {{

75,526.30 ]{ ]{{ ]_

4.66 | ]_

94,730.17 ][ ^_] |_

4.89 | ]\

145,627.92 Â…{ `_{ _{

5.88 | ]_

_ Other Products "&&

= "  ~"&& =€ = ? ?  ~=‚? €

|{{ {{ _{ {{

|{^ ]] { {| Â? Â?

|_| ]` { {| Â? Â?

Â…_^ `[ | {}^ }\

{ {| { {_

106.22

151.28

1,453.81

0.06

Total Revenue from Other Products

0.01

0.01

PTT Public Company Limited

Product / Service

^ Utilities Products

Operated by

– ? " " ?  ~–? "€ = ? ?  ~=‚? € ? < " " ?  ~?<""€

TCHSDC 2010 (Revised) 2011 (Audited) Shareholding of the Million Baht Million Baht Million Baht company

Â…_ {{

_^^ `_

{ {Â…

_`^ ^`

{ {Â…

_{ {{ |{{ {{

{ _} Â? ||[ [\ { {|

]\ Â…_ Â?

Â? Â?

Total Revenue from Utilities Products

\ ƒ "&& " ~ Z ‹ ‚ �? > & Z ‹ € Business "&& ƒ Z ?  ~"&&ƒZ€

Total Revenue from Services Total Revenue from Products and Services

} Others } | ƒ

} ] ž ‰ =

_`[ |}

{ {]

[{ [\ { {| Â? Â?

681.91

0.04

614.03

0.03

624.66

0.03

| |^| \`

{ {`

| [}{ \`

{ {`

| }{Â… Â…{

{ {`

Â… }_] [Â…

{ ][

[ |]_ `\

{ ]|

[ {}} ]_

{ |^

5,114.21

0.32

5,616.65

0.29

6,002.55

0.24

|ž

Â… \^] ^{

{ ]Â…

Â… _{\ ]}

{ |`

Â… \`{ |`

{ |_

_{ {{

| ^{Â… \[

{ |{

| [[} ^\

{ {\

| ^Â…` Â…}

{ {\

_{ {{

`` [\

{ {|

`^ |^

Â?

|[\ ^_

{ {|

_` {{

Â?

Â?

Â?

Â?

Â?

Â?

|{{ {{

|]| ^_

{ {|

Â…}} __

{ {]

}]^ Â…^

{ {[

]ž

__ ][

Â?

Â?

Â?

Â?

Â?

_{ {{ ]_ {{

| _Â… |{} ^}

Â? { {|

Â…_] _` Â…[\ |\

{ {] { {]

Â? Â? |{\ Â…| { {|

|{{ {{

]{| ]^

{ {|

]Â…_ ]|

{ {|

]|Â… `{

{ {|

|{{ {{

Â?

Â?

Â?

Â?

Â…^{ ^`

{ {|

|{{ {{

Total Revenue from Non-Core Business

` ƒ "&& = " " ~"&&="€ & & �J ~& € ?  ~&&J ~&€€ & & �J ~J € Z ~&&J ~J€€ "&& ‚ – ?  ~"&&‚ –€ "&& "  ?  ~"&&" € ƒ Z ?  ~ƒZ € = ? ?  ~=‚? € Z ?  ~Z € "&& ƒ Z ?  ~"&&ƒZ€ "&& & & ?  ~"&& & €

Annual Report 2011

5,944.18 0.37 6,377.63 0.32 7,174.37 0.30 1,586,174.45 97.79 1,898,682.17 98.03 2,428,164.68 98.09

|] [_[ {_

{ \\

[ ^`] \] { ]}

|Â… {]_ `}

{ ^\

^ Â…^| }Â… { Â…Â…

|^ ^{| [^

{ ^\

| ]^_ `| { {_

Total Other Revenue

17,136.77

1.06

19,387.82

1.00

17,867.27

0.72

|{ ž under equity method

|` \^^ `Â…

| |^

|` `|_ }^

{ }\

]} [^] ^]

| |}

Grand Total

1,622,078.05 100.00 1,936,885.95 100.00 2,475,494.57 100.00

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PTT Public Company Limited

Annual Report 2011

Connected Transactions

PTT’s connected transactions resulted from the following contractual agreements: Transactions between PTT and state enterprises á 3Q@MR@BSHNM

Z ? ‚ ]^ ]{{] |{ {{{ "&& " Z " " "&& * = & Z J & ƒ & "&& "&& Transactions between PTT and subsidiary PTT Exploration and Production Plc. (PTTEP) á 3Q@MR@BSHNM

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

Review of Business Assets

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PTT Public Company Limited

Annual Report 2011

Risk Factors

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PTT Public Company Limited

Annual Report 2011

Z ensure that PTT will consistently command an adequate ”

2. Business Risks 2.1 Risks from gas supply sourcing

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PTT Public Company Limited

Annual Report 2011

&

has exceeded minimum contract quantities, thus enabling "&& ! $ ! $ § § "&& Y 2.2 Risks from PTT’s feedstock and product price volatility

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PTT Public Company Limited

Annual Report 2011

3. Operation Risks 3.1 Risks from operations

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PTT Public Company Limited

Annual Report 2011

3.2 Risks from environmental and safety regulations

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PTT Public Company Limited

Annual Report 2011

& "&&Q Â?

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PTT Public Company Limited

Annual Report 2011

Capital Structure PTT’s Securities Common shares

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PTT Public Company Limited

Annual Report 2011

Domestic, unsecured, unsubordinated debentures (Unit: Million Baht)

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PTT Public Company Limited

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Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

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PTT Public Company Limited

Annual Report 2011

Shareholders "&&Q }th ]{|| ]{|| * Shares (in million)

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PTT Public Company Limited

‚

Annual Report 2011

* | ‚ _ ^ `

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PTT Public Company Limited

Management Structure

Annual Report 2011

and Corporate Governance

PTT Public Company Limited

Annual Report 2011

In conducting business, PTT constantly recognizes that all shareholders + investment with PTT is the Company’s policy and operation that preserves the

and most effective management that is consistently acceptable to investors and relevant parties. Ever since the privatization into PTT Plc. and distribution of Company’s shares on the Stock Exchange of Thailand (SET) in late 2001, it has valued corporate governance as its guiding principles. PTT regulations state: “The Company must have and implement a policy on its business ethics, including the ethics of its Board of Directors, the senior management, the administration and employees in compliance with good corporate governance practices as its code of conduct for the proper conduct of the organization with high standard.� So, PTT subsequently issued its rules on good corporate governance in 2001 and published them as the handbook for each director, the management, and the

employees to sign, acknowledge and comply with. The 2001 handbook was the Z – in 2005 and 2009 in line with the changing business and social environment, so as to align with the SET principles of good corporate governance, 2006 version, for listed companies as well as the Organisation for Economic Co-Operation – ~ =?–€ " ? namely the rights of shareholders, equitable treatment of shareholders, roles of stakeholders, information disclosure and transparency and the responsibilities of the Board. New topics-respect for human rights, for consumers’ rights and for intellectual property-were added to suit business circumstances and laws. Such handbooks were regarded as a code of ethics under the Thai Constitution of B.E. 2550 (2007). The revised 2009 Handbook and the Code of Conduct were disseminated on PTT’s intranet and website. Below are the essences of PTT’s corporate governance practices:

1. Rights of Shareholders

PTT Public Company Limited

Annual Report 2011

1.2 Delivering Meeting Notices

When the Board decides on calling a shareholders’ meeting, As the owners, the shareholders are entitled to dictate it will disclose its decision, meeting date, and meeting agendas ? Q in details ahead of time by announcing on SET’s website to impacts on the Company. Shareholders’ meetings therefore alert the shareholders before sending meeting notices. PTT assigned Thailand Securities Depository Co., Ltd. serve as their key forums for the expression of views, asking of questions, and voting, apart from election of directors to (TSD), its securities registrar, to mail meeting notices together supervise Company operation on behalf of the shareholders. with details of the agenda and accompanying documents, Shareholders are entitled to attend shareholders’ meetings, take supplementary and supporting information for decisionadequate deliberation time, and acknowledge meeting minutes. making, opinions of the Board, complete minutes of the past meeting, the annual report, meeting documents, proxy forms with complete instruction, to the shareholders more than 14 days ahead of each meeting date. Similarly, at least three days ahead of each meeting, the invitation was announced through one Thai and one English newspaper, each for three days, to allow the shareholders enough time to prepare themselves for the meeting. The AGM meeting notices were made available at PTT’s website (http://www.pttplc.com) at least 30 days ahead of the meeting date. 1.3 On the Meeting Date

1.1 Shareholders’ Meetings

As a rule, PTT schedules an annual general meeting of shareholders (AGM) within four months of the annual closing date of its accounting books. For urgent matters that affect or involve the shareholders’ interests or involve conditions, regulations and laws that require the shareholders’ approval, it calls an extraordinary meeting of the shareholders. In 2011, the AGM fell on April 20 with the venue being Queen Sirikit National Convention Center (Plenary Halls 1-3) in Bangkok. No extraordinary meeting was held this year.

Before each meeting, the chairman introduces directors, management team members, the external auditor and the legal adviser who acts as a moderator. After explaining the Company’s rules on voting and vote counting for individual agenda items, the chairman of the meeting must clearly address how to vote on each agenda item. Once information

„ to all attendants to express opinions or recommendations and ask questions, giving adequate time for debate. The chairman and the management are to address and answer all questions clearly and precisely, treating all questions with due respect. For the election of directors, individual votes are required. The chairman ensures that the meeting proceeds according to the order of the agenda and does not add an item without notifying shareholders in advance. If the meeting decided to change the order of the agenda, it would need at least two-thirds of the vote of the shareholders in attendance. Alternatively, the shareholders with at least one-third of

PTT Public Company Limited

Annual Report 2011

all the sold shares may ask the meeting to consider other matters not mentioned in the meeting notice. At the 2011 AGM, the order of the agenda was not changed and there was no request to consider any other matter. The minutes of the meeting must be completely and

accurately recorded. Voting completes each applicable agenda item. As a rule, shareholders’ meetings last 3-4 hours. The AGM of 2011 began at 9.30 a.m., with registration beginning at 7.30 a.m., and was adjourned at 1.33 p.m., with the following attendees:

Board of Directors

1. Mr. Naris Chaiyasoot 2. Dr. Norkun Sitthiphong 3. Mr. Chaikasem Nitisiri 4. Mr. Watcharakiti Watcharothai 5. Mr. Nontigorn Kanchanachitra 6. Mr. Krairit Nilkuha 7. Dr. Surapon Nitikraipot 8. Mr. Anuwat Maytheewibulwut 9. Mr. Bhusana Premanode 10. Mr. Sommai Khowkachaporn 11. Mr. Pichai Chunhavajira 12. Ms. Benja Louichareon 13. Mr. Prasert Bunsumpun

Acting Chairman Director Independent director / Acting Chairman, Audit Committee, Chairman, Corporate Governance Committee Independent director /Acting Chairman, Nominating Committee, Member, Corporate Governance Committee Independent director / Chairman, Remuneration Committee Director/ Member, Remuneration Committee Independent director / Member, Corporate Governance Committee Independent director Independent director Independent director Director Director Director & Secretary to the Board/ President & CEO

PTT Public Company Limited

Annual Report 2011

Executives

1. Mr. Tevin Vongvanich 2. Dr. Prajya Phinyawat

CFO COO, Downstream Petroleum Business Group

Also in attendance were several senior executive vice presidents and executive vice presidents of business units to address queries. External Auditors

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Legal Advisers (to proctor balloting in case of disputes during the meeting)

1. Ms. Pheangphanaw Boonklam 2. Mr. Akraphol Phichedvanitchok 3. Ms. Manunya Thitinunthawan 4. Mr. Sarayut Jitprasertngam

Weerawong, Shinawatra & Pheangphanaw Co., Ltd. Allen & Overy (Thailand) Co., Ltd Allen & Overy (Thailand) Co., Ltd. Allen & Overy (Thailand) Co., Ltd.

Number of Shareholders (at meeting’s end)

6,785 shareholders registered, of whom 3,071 were shareholders and 3,714 were proxy holders, holding a total of 2,162,521,091 shares, accounting for 75.90% of the total issued and outstanding shares.

1.4 Practical Guidelines for Reporting Conicts of Interest

? < directors, management team members, and the employees „ � annual reporting forms and a new annual format in case of changes during the year. At a given meeting, people with „ "&& the meeting to excuse themselves and abstain from voting on each connected matter. Similarly, at shareholders’ meetings, directors are supposed to behave likewise in case they are connected with any agenda item.

1.5 Disclosure of Shareholders’ Meeting Outcomes

After each meeting, PTT duly submits the minutes, with voting records and every question raised by shareholders to SET and the SET board within one day after the meeting. It also duly submits the report of the shareholders’ meeting with minutes, voting records and every question raised by shareholders to SET and the SET board within 14 days after the meeting. Meeting information, videotapes and audiotapes are accessible through PTT’s website.

PTT Public Company Limited

Annual Report 2011

2. Equitable Treatment of Shareholders

documents. On the meeting day, registration opens two hours ahead of the meeting and extends until the period before the Different shareholding proportions and thus different last meeting agenda. A barcode system quickens registration. voting proportions do not necessarily mean different treatment Finally, the shareholders have access to a reception. Since most of the shareholders attending the AGM are of shareholders. PTT treats all shareholders fairly without regard for their gender, age, origin, nationality, religious Thais, the meetings are conducted in Thai. However, for the belief, physical impairment, or political inclinations. Should "&& shareholders be unable to take part in their meetings, they translation of shareholders’ meeting supplementary documents and other relevant documents in English. Its website is always have their proxy rights. > = on hand at meetings to facilitate foreign shareholders. If 2.1 Proposing Additional Meeting Agenda shareholders cannot communicate in Thai but want to pose Items and Nominating Directors To enable minor shareholders to earnestly take part in queries or discuss in the meetings, PTT arranges for suitable "&& communication and provides translation into Thai for both for entitling them to propose meeting agenda items and/or the queries and the answers for other shareholders in order nominate directors in advance to deliberate agenda items to preserve their interests and ease communication needs for that could be useful to PTT, including the selection of foreign shareholders. ” 2.3 Appointing Proxies best interests of PTT and all stakeholders alike. In practice, To maintain the rights of those shareholders who cannot shareholders with a combined holding of at least 100,000 ” attend in person, they can appoint proxies or delegate their directors before the AGM during the last quarter of the votes to any PTT’s independent director in attendance. To "&& Q previous year. For the AGM held in 2011, PTT posted such criteria on J ? its website from October 28, 2010, to December 31, 2010, for voting on behalf of shareholders without conditions. and posted an announcement on the website of SET. For the PTT treats proxies as if they were shareholders. Thirty days AGM held in 1012, PTT posted such criteria on its website ahead of each meeting, PTT discloses the proxy form which and the website of SET from October 31 to December 31, is attached along with details and procedures on its website. 2011. However, it attracted no recommendation of such Shareholders may inquire about this by phone or other channels. agenda items and no nomination of directors. 3. Roles toward Stakeholder 2.2 Facilitating Shareholders at the Meeting

At shareholders’ meetings, PTT facilitates all shareholders provides adequate convenience. Meeting venues are well chosen to facilitate the elderly and those on wheelchairs. Back-up meeting rooms are in place, as is a signal relay system between meeting rooms. Security precautions and emergency contingency plans are in hand. Examination of registration credentials one day ahead of the meeting is

PTT accounts for stakeholders’ rights and interests by establishing guidelines for addressing the needs of each group inside and outside the Company, as well as its own responsibility to society and the environment. These spell out PTT Group’s missions for each of the six following groups: To the country Ensuring long-term energy security by

�” supply at fair prices to support economic growth.

PTT Public Company Limited

Annual Report 2011

in the future to satisfy demand. PTT secures more natural gas from indigenous sources to sustain demand posed by the ronmental stewardship of internationally power sector, industrial sector, and transportation sector. Efaccepted standards and helping to improve

the quality of life for community and the total capacity for gas processing into assorted products for value addition and for downstream applications. society. PTT distributes its petroleum products (fuels, LPG, To shareholders to sustainable growth while generating lubricating oil, and other products) through two main channels. First, retail marketing, conducted through PTT service optimum returns. To customers Ensuring customers’ satisfaction and loyalty stations, now developed into sophisticated and integrated by delivering world-class quality products ‘life stations’. Second, commercial marketing, conducted through government agencies, state enterprises, industries, and services at fair prices. To business Conducting fair practice with all partners �  " partners while promoting trust, relationship, and outlets, and exports. PTT also constantly promoted bio-fuelscooperation to extend business capability namely gasohol to replace gasoline, and biodiesel to replace � diesel. In addition, PTT invests in the exploration and production partnership. To employees Promoting capability building professionally and ensuring employees’ well-being is on > the level with other leading companies in ’ order to embolden organization/ employee vital element of national economic development. For community Maintaining a good standing corporate and society status in Thai society by exercising envi-

bond. 3.1.2 Society, Communities

3.1 Treatment of Six Main Stakeholder Groups 3.1.1 Thailand

As a state enterprise serving as the national energy company, PTT secures natural resources to address the needs of the country while accommodating public policy on research, development, production, and distribution of alternative energy and clean energy to lower import dependence. Also, PTT generates income for the public sector (which is its major shareholder) for use in national development and is the leader in alternative energy. PTT’s businesses consist of procurement and supply, transportation, distribution, gas processing, and investment in NGV service stations, in addition to businesses that exploit and add value to natural gas through PTT Group companies. To achieve this, it secures gas supply from indigenous sources, imports from neighboring countries, and imports LNG

PTT strictly obeys laws and regulations enforced by regulatory agencies; institutes professional petroleum management; makes the best use of natural resources; commands emergency response and crisis management systems; applies international quality, safety, health, and environmental standards to its management; and promotes the quality of life for community residents under sustainable development principles. Responsible units have been clearly designated, and PTT Group companies have been encouraged to strictly conform. The Company has appointed a PTT Group steering committee on social responsibility, chaired by the executive vice president, corporate communications and social responsibility, and the corporate social responsibility department is the responsible agency. The Company has also appointed a PTT Group quality, safety, health, and environmental

PTT Public Company Limited

Annual Report 2011

steering committee, chaired by the senior executive vice president, corporate management, and the security, safety, health, and environmental department is the responsible &

throughout PTT Group. PTT has prepared an approach for executing PTT Group’s social responsibility and implemented it in pilot volunteering areas, and then assessed the alignment of actual execution against the CSR framework, the so-called Gap Assessment. & action plans. And to illustrate its responsibility to stakeholders apart from getting ready to move into international standards, "&& "&& for Corporate Social Responsibility–Department of Industrial Works (CSR-DIW) from 2009 onward are PTT Plc.: Rayong Gas Separation Plant (GSP) and Khanom GSP; PTT Chemical " * Y & " * Y " ƒ ?  * Y &  Z " Y >ƒ"? " * polypropylene plant and polyethylene plant; Thai Paraxylene ?  Y "&& ƒ " * ƒ| ƒ] complexes; PTT Phenol Co., Ltd.; and HMC Polymers Co., Ltd. These companies joined CSR-DIW Network to promote CSR activities of the industrial companies which received

private and public sectors as well as among the private sectors themselves. This year the Department of Industrial Works organized a ” CSR-DIW for 2011 by the permanent secretary of industry and the director-general of the Department of Industrial Works. Such awards consisted of: 1. CSR-DIW Awards 2011: 117 awardees, with three coming from PTT Group, namely IRPC (HDPE plant), IRPC (BTX plant), and PTT Polymer Logistics. 2. CSR-DIW Continuous Awards 2011: 139 awardees, with 11 coming from PTT Group, namely PTT Plc. (Rayong and Khanom GSPs), IRPC Plc. (polypropylene plant and ethylene plant), PTT Chemical Plc., Thai Oil Plc., Thai Lube Base

Plc., Thai Paraxylene Co., Ltd., Independent Power (Thailand) Co., Ltd., PTT Phenol Co., Ltd., and HMC Polymers Co., Ltd. 3. CSR-DIW Network Awards 2011: 34 awardees, with one coming from PTT Group, namely HMC Polymers Co., Ltd. In addition, PTT has appointed a PTT Group steering committee for CSR and communication in Rayong, consisting of senior PTT Group management in Rayong from 11 companies to ensure that such work of the Group in Rayong is uniformly executed. PTT remains committed to continually proceeding with social and community development work, encompassing educational, social, environmental, arts and cultural, and sports aspects with a focus on participation of all stakeholders to bring about understanding and joint thinking for “Power for Sustainable Future�. For details of 2011 activities, please refer to the “Power for Sustainable Future� and the “corporate citizenship� in coporate sustainability report 2011. 3.1.3 Shareholders

& PTT management to achieve a high-performance organization (HPO) that is based on corporate governance in tandem with corporate social responsibility to ensure investors that PTT provides sound investment returns and is sustainable, apart from being a part of Thai society in years to come.

Investors’ Activities PTT has continually arranged trips for minor investors to visit our operations, update information and meet the management as well as participating in PTT’s CSR activities in Rayong areas since 2006. This year the trip was planned for November 15-17. However, due to the Great Floods, the trip was postponed to February 14-16 to visit Rayong GSP and the HRH Princess Maha Chakri Sirindhorn Herb Garden for 480 shareholders in three groups, each of 160 persons. PTT mailed invitations and reply letters to the shareholders whose names appeared on the roster at the registration book closing for interim dividend of 2011 on

September 9, 2011. With an overwhelming response from more than 3,000 investors, PTT management drew lots to decide the actual visitors’ names on October 26 and > "&& Those interested in visiting PTT’s operations can follow project updates and details on PTT’s website. PTT reserves the rights to invite only those that have never taken part in this activity.

PTT Public Company Limited

Annual Report 2011

Activities for Institutional Investors In 2011, PTT organized regular Company visits and meetings with its executives for institutional investors and securities analysts in January and organized a visit to Rayong GSP Unit 6. There such visitors learned about PTT’s business � to be involved in PTT’s social responsibility activities. 3.1.4 Customers

PTT takes customers’ satisfaction seriously, since they buy our products and services. It offers fair prices, quality, and Activities for Debunture Holders Relations activities with debenture holders for 2011 accountability to customers and consumers, and is committed included the Everlasting Concert at the Impact Arena, Muang to consistently developing its products and provides safe, Thong Thani for about 14,500 debenture holders and their integrated, prompt, and quality services in response to their company. CSR activities held at the concert consisted of needs. PTT has implemented quality, security, safety, occupational PTT’s booth on ‘Open Heart for Sustainable Happiness’ in honor of His Majesty the King on the 84th birthday and health, and environmental management systems (QSHE) in other fun booths. Proceeds from the activities were donated its operations to focus on quality management through to the families of the soldiers lost in helicopters crashes at the Kaeng Krachan National Park, Phetchaburi. Other activities please customers. At the heart of its operation is the continual held to keep good contact and faith with our debenture holders implementation of assorted systems, including ISO 9001, TIS who invested in our debentures included sermon activities 18001, and ISO 14001. PTT’s retail oil business is based on free competition with Wor Wachiramethi (a respected Thai monk and philoso € # " ‚ J # = … under market mechanisms and the public sector’s supervision. Retail fuel price differences are the key to consumers’ and 4, and a seminar on ‘Investment Happiness Style’.

PTT Public Company Limited

Annual Report 2011

decisions, which is why prices among operators have been very close, since no one wants to lose market shares. Yet, PTT is always the last company that raises domestic retail prices so as to ease consumers’ burdens. PTT takes consumers’ demand seriously by providing diverse services and amenities at service stations, including convenience stores, CafĂŠ Amazon coffee shops, food outlets, lubricating oil services, car wash services, and banking services under the “PTT Life Stationâ€? concept to cater to consumers’ diverse needs. New products were introduced, including PTT Blue Innovation products of novel formulas, which offer complete combustion, and four new grades of lubricating oil. PTT has instituted a call center system for diverse channels of taking in views, comments, and complaints from customers and consumers. Complaints are promptly ? after service uses to improve services; opinion surveys are also taken. 3.1.5 Business Partners

PTT values its business partners because they are the key to business success through mutual support. PTT treats business partners fairly and on the basis of fair competition and mutual respect and in good cooperation. PTT values procurement processes, as they are vital to the determination of expenses and the quality of PTT products and services. For transparency, a clear procedure is therefore essential for PTT requires price bidders to strictly conform to the rules about work safety and handling of tools, as well as other regulations, particularly in the type of work affecting health and surroundings. PTT visits business partners’ operations to assess their capabilities, particularly on the QSHE side. In addition, business partners’ employees must undergo the do’s and don’ts in PTT’s operated areas in addition to conforming to the requirements for entering sites to work, as described for each site.

PTT implemented the Total Cost of Ownership (TCO), a method to calculate the costs of delivering materials and communication convenience, as the criterion in selecting business partners to enable those with production bases & & support of locally produced materials, resulting in a higher number of domestic business partners for certain materials where they have no procurement limitations.

3.1.6 Employees

All PTT employees are the most crucial components of our business success. All employees - wherever they work must be treated without prejudice. Unity, trust, impartiality, polite manners, and respect for human dignity are stressed. A good and safe work environment, with suitable compensation, welfare, and innovations, is essential. Sexual harassment is not tolerated. Besides, PTT promotes the exercising of wage earners’ rights under laws governing labor unions and state enterprise relations. Convinced that the quality of its people is the key to its high performance, PTT is committed to the development of human resource management systems compatible with technological advancement and international standards. It not only promotes both conscientious merit and business competence for its employees, but also encourages them to actively take part in public service activities. It is indeed through employees that PTT focuses on its development toward a high-performance organization to increase competitiveness and respond to the changes in the organization.

PTT Public Company Limited

Annual Report 2011

Headcount of Personnel and Compensation

supplementation is likely or where continuing investment is As of December 31 this year, the PTT employee headcount needed. PTT formulates human resource plans and earnestly ~ "&&Q € develop the potential of its employees at all levels, as well at 4,046. PTT has continued to set its manpower plan to align as streamlining its business procedures to enhance work with its operation under uncertain economic conditions, with The headcounts for each business unit from 2008 to 2011 are as follows: Unit: Persons 2008

2009

2010

2011

Business Unit PTT

PTT Group

PTT

PTT Group

PTT

PTT Group

PTT

PTT Group

1. Gas

1,162

-

1,196

-

1,206

-

1,270

-

2. Oil

1,234

-

1,199

-

1,182

-

1,387

-

… " ƒ

70

-

72

-

61

-

68

-

4. Support staff/ secondees to "&&

8991/

2712/

9381/

2762/

1,0771/

2742/

1,045/

2762/

-

7,718

-

7,676

-

8,743

-

17,964

3,365

7,989

3,405

7,952

3,526

9,015

3,770

18,240

5. Subsidiaries and jointlycontrolled entities Total Notes

: 1/ Excludes PTT secondees 2/ PTT secondees

Compensation for Personnel (excluding the President & CEO and Senior Management) Unit: Baht Compensation

2008

2009

2010

2011

Salary

2,775,721,471

2,900,872,989

2,976,806,620

3,044,018,589

Bonus

1,258,216,945

1,336,855,751

1,482,437,324

1,465,345,881

Provident fund contribution

274,276,975

280,726,154

284,638,508

293,871,121

Others (if applicable)

1,376,170,707

1,346,214,160

1,592,691,853

2,076,671,038

Total

5,684,386,099

5,864,669,055

6,336,574,305

6,879,906,629

PTT Public Company Limited

Annual Report 2011

Other Compensation PTT has instituted employee welfare and other compensation apart from salary, bonus, and provident fund contribution for management and all employees in keeping with economic conditions, cost of living and other standards for peer companies, such as housing allowance, upcountry allowance, and overtime payment. In 2005 and 2006, PTT approved two tranches of 60 million units of warrants for the President, the management,

PTT to boost motivation and at the same time reward the management and employees for their total and consistent dedication. This incentive was designed to create a sense of ownership and encourage participation in the management "&& business operations. Details were reported under “PTT’s Warrants�.

ǰ ǰ ĝǰ*NQMFNFOUJOHǰ-FBSOJOHǰ0SHBOJ[BUJPOǰ.FDIBOJTNǰGPSǰ ǰ ǰ ǰ 4VTUBJOBCMFǰ0SHBOJ[BUJPO PTT evolved its knowledge management system for essential, relevant information while encouraging the management and all to do the same and update this regularly. It made this system available to all to facilitate learning and

Â?

Q own development of their potential, since this is a cornerstone to a high-performance organization, that is “To become a Learning Organization, we rely on human intelligence. Learning is an ongoing, lifelong process�. PTT provided training and development programs to its management and employees from their recruitment to retirement to enable them and enhance their competence toward corporate directions and needs.

Ç° Ç° ĝǰ#VJMEJOHÇ°$PNQFUFOUÇ°BOEÇ°3JHIUFPVTÇ°.FNCFSTÇ°PGÇ°155Ç° and Society Besides a human resource management system focusing on making employees both smart and responsive to the Human Resource System Development and Improvement Company’s expectations, PTT valued its role of turning out To become a high-performance organization, PTT has conscientious people ready to participate in Corporate Social improved the process and mechanism for human resource Responsibility (CSR) while observing corporate governance Â’ principles. PTT is convinced that achievement of competence potential of its employees. PTT employees are able to fully and righteousness will foster steady and sustainable growth demonstrate their competence, advance in their career, and for itself. continue to grow with PTT. The elements of PTT’s success included:

ǰ ǰ ĝǰ1BSUJDJQBUJOHǰJOǰ%FDJTJPO NBLJOHǰPOǰ$PSQPSBUFǰ(PBMTǰ and Directions PTT has focused on participation across the board in designing business plans to suit its direction and targets, since ? To this end, it has instituted a process whereby the senior "&& #

strategies and business plans and to come up with budget plans in broad alignment. & "&&

# and Key Performance Indicators (KPIs) cascaded through the ranks from the corporate, department, to the individual #

then serve as framework for performance and performance assessment standards. PTT improved the assessment of the employees’ performance through the competency system, including the topics and the assessment methods. PTT also set up and reviewed the COACH assessment system, a program used to assess the employees’ potential. It also improved its handbook and introduced various systems to the competency assessment system for employees, the Career Management System, a career path system for employees, and the Employee Self Service System, an individual management system on the Company’s computer network.

ǰ ǰ ĝǰ%FWFMPQJOHǰ&NQMPZFFTĴǰ$BSFFSǰ1BUITǰJOǰ-JOFǰXJUIǰ ǰ ǰ ǰ $PSQPSBUFǰ#VTJOFTT Career management is a management tool to prepare and promote the management and all employees to be equipped "&& in coping with the missions and creating values for the organization. PTT has applied the career management in developing its

(senior management and staff) with a system on recruitment, assessment and individual development plan in place.

PTT Public Company Limited

Annual Report 2011

- Senior management (equivalent to vice presidents upward) are subject to staff development in the form of Group Leader Development, which sustains the needs of high-level executives in both quantity and quality. Management of this group is supervised by a panel of CEO’s in PTT Group called the PTT Group Management Committee (PTTGMC) with development plan for senior management, and a PTT careercounseling team called PTT Group Executive Counseling Team (ECT) with the responsibilities to support the designing the development plans for senior management. - Staff (Division Manager or equivalent downward): & "&& "&& company in developing employees to suit operation needs. The Corporate Human Resources Committee (HRC) is established to promote and monitor the development plan of each individual staff member. A Career Counseling Teams (CCT) for |[ and developing individuals, and providing counseling and guidance to them. The development plan is a tool for employees to set their goals and development of their career paths and put value in their work in line with PTT’s direction and goals. Such staff development can be done through proper training # line with their career path, which will enable them to develop skills in their new positions, as do suitable appointments and promotions for their responsibilities and potential. Finally, development of staff to suit their competency and needs of both staff and the organization would in time lead PTT to its goals.

PTT Public Company Limited

Annual Report 2011

Ç° Ç° ĝǰ'PTUFSJOHÇ°1PTJUJWFÇ°3FMBUJPOTÇ°CFUXFFOÇ°UIFÇ°.BOBHFNFOUÇ° Ç° Ç° ĝǰ155Ç°(SPVQÇ°$PSFÇ°7BMVFT PTT’s management and employees believe that the PTT Ç° Ç° Ç° BOEÇ°4UBGGÇ°JOÇ°4FBSDIÇ°PGÇ°UIFÇ°4BNFÇ°(PBM Communication between the management and staff at PTT comes in various forms. Needing to be aware of corporate business, obstacles, and potential repercussions, all employees should be allowed to share their views and take part in business

& relations committee meetings, PTT held joint consultation committee (JCC) meetings between its management team > President &CEO not only continually held regular meetings with employees and attended meetings among management and staff (both in and outside PTT), but also surveyed employees’ satisfaction for views and suggestions for improvement. PTT is convinced that proper communication and information exchange among all will spur the smooth relationship cooperation, thus moving the organization forward to its goals. Moreover, PTT surveyed the basic human resource needs of the management and staff through the operation of numerous committees, such as the human resource management committee, PTT labor relations committee, and career path management committee. The survey of staff opinions was undertaken once by an external human resource management adviser. There was also cooperation with PTT Group to jointly develop a database of the management as well as development plans of the senior management.

Group Core Values known as SPIRIT will assist PTT group and the executives and staff in creating a common working path, direction, belief that align with the vision of PTT Group to be a sustainable high-performance organization. These core values serve as guidelines in formulating ideas and „ & SPIRIT is a key element to strengthen PTT cultures, decisionmaking and sense of belonging and inspire the employees to be both smart and conscientious. SPIRIT consists of:

S P I R I T

= = = = = =

Synergy Performance excellence Innovation Responsibility for society Integrity & ethics Trust & respect.

ǰ ǰ 4VDDFTTJPOǰ1MBOOJOH Because PTT is a state enterprise, the nomination and appointment of the President & CEO must follow the £ – = – ” ` in Article 8 quarter. The Board is to appoint a Nominating ?

” to nominate persons with appropriate knowledge, capability, "&& & ” "&& except for the management who are directors by title. They must not be older than 58 years old on the day they submitted the application form. When the Nominating Committee selects appropriate candidates, it submits the results to the authorized person to consider the appointment. The appointment must be done within one year from the day the previous management team member vacated the position. Each employment contract had a timeframe of up to four years for each term. If the Board wishes to hire a previous management team member after it does not have to go through the nominating process, but it cannot hire such person for more than two consecutive terms. This year, the Board recruited a new President & CEO to replace Mr. Prasert Bunsumpun, who completed his term

PTT Public Company Limited

Annual Report 2011

under his employment contract on September 9, 2011. A New President & CEO Selection Committee was appointed £ – Enterprise Act. A total of four candidates, three from PTT executives and one non-PTT person applied for the position. The selection process was conducted transparently under the guidelines on senior executive position selection under section ` … £ – State Enterprise Act (No. 6) B.E. 2550 (2007). This committee proposed a candidate, Mr. Pailin Chuchottaworn, to the Board for consideration. The Board, on May 27, 2011, approved Mr. Chuchottaworn as the new President & CEO, replacing the outgoing Mr. Prasert Bunsumpun, with effect from September 2011 for a four-year term. PTT has continually taken steps to nominate the next President & CEO and to prepare for the retirement of senior management team members in 2012-2017 under succession planning under PTT Group’s policy/guidelines. A management pool has been developed, consisting of 312 management executives, and another potential pool for key areas. In 2009 and 2010, PTT assigned the formulation of a Group Leader Development Project (GLDP) to lay down a succession plan for personnel when the time comes for assuming higher positions that become vacant, namely:

PTT Public Company Limited

Annual Report 2011

“ " “ = š " ~ =š"€ ” “ = š " ~=š"€ ” “ š " ~š"€ ”

Core responsible management parties and units are as follows: “ "&& J ?

~"&& J?€ “ "&& = ? & ~=?&€ “ ? < ƒ ?

~<ƒ?€ “ =š" ? J ” PTT Group “ =š" ? < ƒ “ < ƒ " – “ = " ? J Department “ < ƒ J – business group “ ' – " –

Performance in 2011 “ =š" =š" - 73 pool members (as of December 31, 2011) - 12 pool members already promoted (2007-2011) “ =š" š" - 107 pool members (as of December 31, 2011) - 13 pool members already promoted (2008-2011) “ š" "&& managers - 132 pool members (as of December 31, 2011) - 26 pool members already promoted (2009- 2011) “ " =š" ?

" "&& 3.2 Respect for International Human Rights Principles

PTT requires that all its directors, the management, and employees observe laws, customs, and culture which differ in each country that PTT invests in and strictly respect international human rights principles under the Universal Declaration of Human Rights, and nor does it condone its

violation. Details on its 2011 actions on this matter appear including these aspects: in the Corporate Sustainability Report 2011. “ " “ " 3.3 SigniďŹ cant Disputes with Stakeholders “ Details appear under ‘Legal Dispute’. “ ƒ “

ǰ ǰ .BJOǰ1SPDFEVSFT | – 2. Selection of pool members … > of promoted positions, resulting in aspects needing development 4. Individual development planning and implementation, with a mentoring system designed to enable the plans to achieve targets.

PTT Public Company Limited

Annual Report 2011

4. Disclosure of Information and Transparency Disclosure of information is a key index of transparency, and stakeholders. PTT values correct, accurate disclosure of information and creates numerous channels of disclosure of information so that all stakeholders can gain easy access to information. PTT promotes awareness among directors, the management team and employees of the importance of good corporate governance and transparency in their work, and creates appropriate mechanism to receive complaints those who have been complained against. 4.1 Financial and Non-ďŹ nancial Reports

"&& (Form 56-1) and the annual report form (form 56-2) to report � The information disclosed is, at a minimum, what the Capital Market Supervisory Board requires. Such information is delivered to the shareholders along with the AGM meeting notice. PTT has prepared the Corporate Sustainability Report 2011 to communicate its policy, management approach, and outcomes of its economic, social, and environmental performance by relying on the Global Reporting Initiative (GRI) approach, with completeness assessed at the A level. In addition, to show its transparency of information disclosure and its information, PTT has commissioned an external party for Q ” completeness. This report, containing economic, social, and environmental information for the year, will be delivered along with the annual report to the shareholders and will be accessible to those interested via www.pttplc.com. 4.2 Investor Relations

Ever since PTT’s privatization and share trading on SET in October 2001, the Investor Relations Department has been established as a clearing house for disclosing

and information reported to SET, together with quarterly Management Discussion and Analysis (MD&A) reports with updated performance and corporate directions. These are disclosed to domestic and international shareholders fairly, regularly, and thoroughly. A quarterly investors’ magazine under the name “happiness� has also been prepared to communicate business information and data, as well as PTT’s performance, aimed at debenture holders. Investors may contact the department directly or through the PTT website, which is regularly updated, for information in Thai and English, which includes: “ ž‰ _^�| “ J # # “ " “ " “ > “ ' “ ? “ ‰

“ ‚ ‘ “ < Through the years, PTT has valued the disclosure of information that is accurate, complete, transparent, and comprehensive, as well as direct and indirect presentation of performance and keeping investors, shareholders, and relevant parties informed of its information. A summary of our activities appears below:

PTT Public Company Limited

Annual Report 2011

ǰ ǰ Ļǰ%JSFDUǰ: PTT regularly presents information to analysts, investors, and employees at analysts’ meetings, roadshows, conference calls and conferences. PTT also holds joint activities with SET to meet minor investors. Analysts, investors and interested parties also join company visits to meet our management and inquire about our updates at all times. In 2010 and 2011, these key activities took place: 2010 (times)

2011 (times)

International roadshows

13

11

Domestic roadshows

4

4

Analyst meetings

4

4

Credit rating reviews

5

3

178

148

6-8 times daily

8-10 times daily

Joint activities with SET and other agencies to meet investors

3

2

Trip for institutional investors to visit and meet management team members

1

2

Trip for minor investors to visit and meet management team members

1 (3 trips)

The planned visit (three batches) in November 2011 was moved to February 2012 because of the Great Floods

3

15

Activity

Company visits / conference calls E-mail /phone calls

Relations activities with debenture holders

PTT Public Company Limited

Annual Report 2011

ǰ ǰ ĝǰ*OEJSFDU * > ?

=& at www.set.or.th, the Company’s website, and the “happiness� magazine for debenture holders. Investors and interested parties can also post inquiries to the Investor Relations Department at Tel. 0 2537 3518-9 or through e-mail at ir@pttplc.com, or through PTT website at www.pttplc.com. In addition, PTT has constantly publicized news, business activities, and project updates, apart from addressing questions and facilitating contacts for the media and the public. The activities this year appear below: Activities

2009

2010

2011

E-mails

165

224

216

News/photo releases

165

224

216

Press conferences

36

51

55

6 per year

8 per year

8 per year

121 groups, 5,753 persons

37 groups, 2,284 persons*

49 groups 2,181 persons*

Media visits to operations (domestic and international) Welcoming and information provision to visiting agencies for assorted purposes ª ‰ "&& <

4.3 Complaint-Filing and Access to Information

steps, come up with proper responses to all, and report back. All groups of stakeholders have equal access to its public Follow-up on the action is done through e-mail every three information, including reporting of news and leads, whether > inside the Company through the intranet web board or outside to another level of supervisors for action. When completed, the Company through its website, by phone, letter, or e-mail. responsible units will notify the contact person(s), with " > ƒ " � and Corporate Secretary, Corporate Communications, or the Ordering & Customer Relations Center through these information system management. The management tracks all information every month to detect trends and apply them channels: “ & * ? ? |…^_ { ]_…\ ]{{{ services to respond to all stakeholders. “ + * *žž "&& - Ordering & Customer Relations Center : on improper behavior of directors, the management, and staff orc@pttplc.com "&&Q - Corporate Communication Department : ? " ? corporate@pttplc.com Secretary, and Human Resources Department. PTT treats all � " ? * complaints on the basis of equality, transparency, and fairness corporatesecretary@pttplc.com to all concerned. An appropriate timeframe to consider the - Investor Relations: ir@pttplc.com The queries, comments and recommendations will be complaints is set and the secrecy and the protection of those forwarded to relevant agencies to address these, take corrective

PTT Public Company Limited

Annual Report 2011

5. Responsibility of the Board of Directors The organization structure of PTT Plc as of December 31, 2011:

Auditors

Shareholders

Board of Directors Audit Committee Corporate Governance Committee

Nominating Committee Remuneration Committee

President & Chief Executive OfďŹ cer (Managed through 15 committees) EVP, Corporate Communications & Social Responsibility =š" ? SEVP, Corporate Strategy & Organization Development

EVP, Strategic Planning & Investment Management

EVP, PTT Research & Technology Institute š" " and Corporate Secretary Chief Financial OfďŹ cer

EVP, Energy Policy & Economics

EVP, Corporate Finance

EVP, Corporate Treasury

SEVP, Human Resources & Organization Exellence

EVP, Corporate Human Resources

EVP, Organization Effectiveness

Corporate Legal

Chief Operating OfďŹ cer, Upstream Petroleum & Gas Business Group

Chief Operating OfďŹ cer, Downstream Petroleum Business Group

EVP, Downstream Business Group Alignment

SEVP, Gas Business Unit

1. EVP, Strategic Planning 2. EVP, Engineering & Project Management 3. EVP, Natural Gas Supply & Trading 4. EVP, Natural Gas Transmission 5. EVP, Natural Gas Processing 6. EVP, Natural Gas Vehicles 7. EVP, Natural Gas Distribution

SEVP, Oil Business Unit

1. EVP, Planning 2. EVP, Retail Marketing 3. EVP, Commercial & International Marketing 4. EVP, Supply and Terminal Operations 5. EVP, Lubricants Business

SEVP, Petrochemicals & ReďŹ ning Business Unit

1. EVP, Business Development & Project Management 2. EVP, Subsidiary Planning & Management

SEVP, International Trading Business Unit

1. EVP, International Trading Operations

Notes : SEVP = Senior Executive Vice President EVP = Executive Vice President VP = Vice President

PTT Public Company Limited

5.1 Composition of the Board of Directors

According to PTT Plc. regulations, the Board consists of: “

|_ “

(PTT’s Good Corporate Governance requires that independent directors account for no less than half of the Board.)

Annual Report 2011

“ & Z "&& " of the Ministry of Commerce, dated January 4, 2012, consists of 15 directors: “ |[ � ~ directors, which exceeded half of the Board) “

As of February 1, 2012, the Board of Directors consisted of: No.

Name

Position

Appointed date

1.

Dr. Norkun Sitthiphong

Chairman (from January 18, 2008, to December 24, 2010, and from April 29, 2011-present)

April 10, 2009

2.

Mr. Surapon Nitikraipot

Independent Director

April 10, 2009

3.

Mr. Watcharakiti Watcharothai

Independent Director

April 10, 2009

4.

Mr. Chulasingh Vasantasingh

Independent Director

April 20, 2011

5.

Mr. Krairit Nilkuha

Director

April 9, 2010

6.

Mrs. Benja Louichareon

Director

April 9, 2010

7.

Mr. Arkhom Termpittayapaisith

Independent Director

October 11, 2011

8.

Mr. Waroonthep Watcharaporn

Independent Director

October 11, 2011

9.

Mr. Krairit Euchukanonchai

Independent Director

October 11, 2011

10.

Dr. Chitrapongse Kwangsukstith

Director

October 25, 2011

11.

Mr. Montri Sotangkur

Independent Director

November 4, 2011

12.

Gen. Warawat Indradat

Independent Director

November 4, 2011

13.

Gen. Prin Suwannathat

Independent Director

November 25, 2011

14.

Mr. Sihasak Phuangketkeow

Independent Director

December 23, 2011

15.

Dr. Pailin Chuchottaworn

Director and Secretary (President & CEO)

September 10, 2011

Note : No. 7 replaced Mr. Surachai Phuprasert, who resigned on March 24 th, 2011 No. 8 replaced Mr. Pichai Chunhavajira, who resigned of October 4 th, 2011 No. 9 replaced Mr. Nontigorn Kanchanachitra, who resigned on October 10 th, 2011 No. 10 replaced Dr. Naris Chaiyasoot, who resigned on October 10 th, 2011 No. 11 replaced Dr. Bhusana Premanode, who resigned on November 1st, 2011 No. 12 replaced Mr. Anuwat Mayteewibulwut, who resigned on November 3 rd, 2011 No. 13 replaced Mr. Sommai Khowkachaporn, who resigned on November 21st, 2011 No. 14 replaced Mr. Surapit Kiratibutr, who resigned on December 1st, 2011 No. 15 replaced Mr. Prasert Bunsumpun, whose term ended on September 9 th, 2011

PTT Public Company Limited

Annual Report 2011

“ = for senior management to induce short-term and long-term motivation. “ " suitable compensation. “ = group of shareholders and stakeholders. “ =

� quality disclosure of information. “ 5.3 Directors Authorized to Sign and Bind for the Company

According to the Company’s regulations, the Directors 5.2 Authority and Responsibilities of the Board whose signatures are recognized as binding PTT consist of either (1) Mr. Pailin Chuchottaworn, President & CEO, ǰ ǰ "VUIPSJUZǰPGǰUIFǰ#PBSE “ & Z ’ ’ ? Q ~]€ J Company under applicable laws, objectives, regulations and Norkun Sittiphong, Mr. Surapon Nitikraipot, Mr. Krairit Nilkuha, Mr. Chitrapongse Kwangsukstith, Mr. Watcharakiti resolutions of shareholders’ meetings. “ & Z – ? + & – ’ # ? Q If suitable, one Vice Chairman or more may be elected. “ & Z – " 5.4 Appointment and Dismissal of Directors and Secretary to the Board, if suitable. | & Z

15 persons, elected at shareholders’ meetings. It consists of a ǰ ǰ %VUJFTǰBOEǰ3FTQPOTJCJMJUJFTǰPGǰUIFǰ#PBSE “ ? "&&Q minimum of three Independent Directors, and at least half of ensuring management of the Company under applicable the Directors are to reside in the Kingdom, and at least one laws, objectives, regulations and resolutions of shareholders’ ” – ” ? Q meetings. “ – ? Q Since 2004, the Board decided that Independent Directors “ = ? Q # are to make up at least half of the Board, a requirement # which remains in effect today. As of January 4, 2012, it had budget; monitor and ensure plan implementation and budgeting. 10 Independent Directors, all of whom were domiciled in “ > & – * Y Mrs. Benja Louichareon, Mr. Arkhom Termpittayapaisith, Mr. Krairit Euchukanonchai, Mr. Montri Sotangkur, Mr. effective internal control and internal audit systems. “ „ Chulasingh Vasantasingh, and Mr. Pailin Chuchottaworn. ] & Q

” of interest and connected transactions. “ – directors who have previously been nominated by the Nominating Committee under the following criteria:

(1) Each shareholder has one vote per share held. (2) Each shareholder exercises all votes applicable under (1) in electing one or more persons as Directors but cannot allocate only part of the votes to any candidate. (3) Candidates with the most votes are to be appointed Directors up to the number open at a given meeting. (4) If more candidates receive equal votes than the number of Directors required, the Chairman of the meeting must cast a deciding vote. 3. At every AGM, one-third of the Directors, or if this number is not a multiple of three, then the number nearest to one-third, must retire. The names of the Directors to retire "&& drawn by lots. For subsequent years, those with the longest terms must retire. 4. If a post is vacated because of reasons other than term Z ” "&&Q Z

except when the vacated director position has less than two months left. A new director must get at least three-quarters of the votes by the remaining directors and must remain in 5. Any Director wishing to resign may submit a resignation letter to PTT. The resignation is to be effective on the date that PTT receives the letter. ^ > – before the expiry of their terms, a three-quarter vote of eligible shareholders present at the meeting is required, provided that the number of shares represented by the threequarter votes is at least half of the total number of shares represented by the total number of eligible shareholders present at the meeting. 5.5 QualiďŹ cations of Directors

PTT Public Company Limited

Annual Report 2011

“ J

including appointments due to their positions and those due to acting assignments “ > ” announcement of SET governing the characteristics and scope of operation of audit committees “ < #

of the law by negligence or petty crimes “ – position required by law “ –

“ <

a position because of malfeasance “ – ” a shareholder of a juristic person where the state enterprise in question holds shares. Exceptions apply to directors of employees, or wage earners with positions or position salaries for centralized governments, provincial governments, local governments or other government units. Also, such stateenterprise directors hold no more than 0.5% of the paid-up capital of the state enterprise in which they serve as directors or juristic persons where the state enterprise in question holds shares “ # state enterprise in question holds shares. Exceptions apply when the board of directors of that state enterprise appoints them as directors or other positions in the juristic person “ authorized managers or hold vested interests in a juristic person that serves as a concessionaire, a joint venture or ones with vested interests in the affairs of the state enterprise in question. Exceptions apply for the board chairman, director, or manager assigned by that state enterprise.

” ” characteristics under the Public Company Limited Act and 5.6 QualiďŹ cations of Independent Directors ÂŁ – = As recommended by the Corporate Governance Committee, ~‚ ^€ ]{{\ ? Z resolutions, including: directors in line with, and more stringent than, the criteria “ ^_ of SEC and SET as follows:

PTT Public Company Limited

Annual Report 2011

“ < { _† "&& � diaries, associates, or related companies (including the shares held by connected parties under Section 258 of Securities and Exchange laws) “ <

wage earners – including audit advisors, legal or other advisors – on the payroll of PTT, or have control over PTT, its subsidiaries, associates or juristic persons that could pose „ “ < management of PTT, its subsidiaries, associates or related # „ interest hampering independent exercise of discretion including customers, business partners, trade or lenders / debtors “ could deprive independence with the management, major shareholders of PTT, PTT Group companies, associated # „ interest; this includes not being appointed as an agent to preserve the interests of directors or major shareholders. 5.7 Segregation of the Chairman and the President & CEO Positions

To segregate policy-making duties from those of dayto-day management and to enable directors to oversee, look after, and assess performance effectively, PTT has required that the Chairman and the President & CEO are always two distinct persons. This is because the Chairman needs to oversee the management’s performance, guide and assist, but not to take part in or interfere with day-to-day management, which is the duty of the President & CEO under the frame of authority delegated by the Board. In addition, the Chairman must exercise leadership „ of the management, partly by chairing Board meetings Q

encouraging participants to exercise their voting rights and strictly comply with good corporate governance principles.

5.8 Independence of the Chairman

PTT highly values the independence of the Board; however, since it is a listed company on SET while remaining a state enterprise under the Ministry of Energy, with the Ministry of Finance serving as the major shareholder, most of the elected Chairmen to date have come from the management of either ministry. Yet, they have consistently displayed strong independence. 5.9 Corporate Secretary

To comply with the good corporate governance principles of listed companies under the category of directors’ responsibility and the terms of the Securities and Exchange Act, PTT has appointed Mrs. Sumon Rungkasiri as Corporate Secretary to provide the Board with legal advice and remind them of assorted regulations that they need to know and comply with; hold meetings; supervise assorted Board "&&Y critical documents including Directors’ registration, Board meeting notices and minutes, annual reports; shareholders’ meeting notices and minutes and keep reports on connected transactions reported by Directors or the management. 5.10 Committees

The Board values corporate governance by initially appointing three committees: the Audit Committee, the Nominating Committee, and the Remuneration Committee. For a period, the Audit Committee also looked after corporate governance and risk management for the Board. In 2004, the Board set up the Corporate Governance Committee, charged with promotion and screening of corporate governance and promotion of excellence in such areas. PTT today therefore has four committees investigating critical matters under the corporate governance principles to create stakeholders’ concerns and interests, business ethics, transparency and accountability. Each of these committees ” � ” SET, with clearly written roles and responsibilities in a charter.

PTT Public Company Limited

Annual Report 2011

Since 2009, the duties of the Corporate Governance Committee have been expanded to cover additional policy, implementation and monitoring of the operations on the responsibilities toward society, community, and the environment, so that the Committee may be responsible for the stakeholders

(‘Report on the Board’s Responsibility to Financial Reports’) & prepared under generally accepted accounting principles, � =

completely and consistently disclosed. The Board approved the appointment of the Audit 5.10.1 The Audit Committee Committee on October 1, 2001, which consisted of Directors Each quarter, together with Accounting unit(s) and the ” � ?

laws and the SET. The Committee must consist of at least "&&Q Z three Members. As of December 31, 2011, it consisted of The Board is accountable for PTT Group’s consolidated three Independent Directors as follows: Name

Position

Remarks

1. Mr. Chulasingh Vasantasingh

Chairman

Independent Director

2. Mr. Krairit Euchukanonchai

Member

Independent Director

3. Mr. Arkhom Termpittayapaisith

Member

Independent Director

& = š " ? ?

Q

Duties and Responsibilities of the Audit Committee (effective January 1, 2012) “ = control and internal audit procedures and consider the adequacy of the budget and personnel, as well as the independence of ? “ ƒ "&&Q accuracy and adequacy. “ ? „ SET’s laws and regulations. “ ƒ SET regulations, policies, regulations, rules, stipulations, cabinet resolutions, and laws relevant to PTT’s business. “ ƒ ensuring that the management has a mechanism to receive

complaints and supervise the system of complaints. “

auditor. “ ’ "&&Q „ of interest. “ ƒ "&&Q recommend improvements. “ = > & controls. “ " on a par with international standards. “ ƒ "&&Q „ may affect PTT’s operation.

PTT Public Company Limited

Annual Report 2011

“ " “ +

PTT’s assorted operations, may seek independent opinions from or hire advisers or specialists, to be paid for by PTT, provided that reasonable fees are paid as applicable. “ & ? ?

must attend the meetings of shareholders. “

of the management at least once a year. “ <

once a year.

“ ƒ ?

Q “ " Z � and responsibilities of the Committee. This year the Committee held 14 meetings and duly Z > ” and Accounting unit(s). 5.10.2 The Nominating Committee

The Board appointed the Nominating Committee on October 1, 2011, made up of three of its Directors. As of December 31, 2011, it consisted of three Directors as follows:

Name

Position

Remarks

1. Mr. Watcharakit Watcharothai

Chairman

Independent Director

2. Mr. Krairit Nilkuha

Member

Director

3. Dr. Pailin Chuchottaworn

Member

Director & Secretary to the Board

Ç° Ç° %VUJFTÇ°BOEÇ°3FTQPOTJCJMJUJFTÇ°PGÇ°UIFÇ°/PNJOBUJOHÇ°$PNNJUUFF

“ ” – " 2. The Committee summarizes its recruitment results “ – Z � ” Directors or the President to ensure transparency. along with supporting rationale. The recruitment procedure for Directors is as follows: … & Z ” | & ?

”

list prepared by the Committee and submits their names to the replacement to ensure that the new Directors meet the the shareholders’ meeting for approval. ” ” This year the Committee held six meetings. ” -

PTT Public Company Limited

Annual Report 2011

5.10.3 The Remuneration Committee

The Board appointed the Remuneration Committee on October 1, 2011, by appointing three Directors. As of December 31, 2011, it consisted of three directors as follows: Name

Position

Remarks

1. Mr. Arkhom Termpittayapaisith

Chairman

Independent Director

2. Mr. Krairit Nilkuha

Member

Director

3. Mrs. Benja Louichareon

Member

Director

Duties and Responsibilities of the Remuneration Committee “ – – " “ – – " Board’s or shareholders’ meetings. This year the Committee held one meeting. 5.10.4 The Corporate Governance Committee

The Board appointed the Corporate Governance Committee on June 24, 2004, consisting of three Directors. As of December 31, 2011, the names of these Independent Directors were as follows: Name

Position

Remarks

1. Dr. Surapon Nitikraipot

Chairman

Independent Director

2. Mr. Watcharakiti Watcharothai

Member

Independent Director

3. Mr. Waroonthep Watcharaporn

Member

Independent Director

& š " " ? ?

PTT Public Company Limited

Annual Report 2011

ǰ ǰ %VUJFTǰBOEǰSFTQPOTJCJMJUJFTǰPGǰUIFǰ$PSQPSBUFǰ(PWFSOBODFǰ Committee “ " Z “ Z “ = – the management conform to corporate governance principles. “ ƒ "&&Q against those of international organizations and present its recommendations to the Board. “ – ? Governance Task Force. “ – ? Social Responsibility (CSR) “ J ? ƒ Z This year the Committee held two meetings.

5.11 Board Meetings

Board meetings are planned for the entire year-this year, the fourth Friday of each month-with additional meetings called to discuss special agenda items as necessary. Seven

" Corporate Secretary issues a meeting notice along with the meeting agenda and relevant supplementary documents contained in a compact disc (CD) to each director. Since April 2004, Board meetings have been made electronic (paperless) to provide speed and convenience in information access and management, while considerably reducing accompanying documents. At each meeting, directors openly and freely express their " „ of interest with PTT, they are required to abstain or refrain from attending that portion of the meeting. The minutes of each meeting are properly documented and, after adoption Z reference by directors and related persons. By and large, each Board meeting lasts three hours. Details about directors’ meetings are summarized below.

PTT Public Company Limited

Annual Report 2011

1/2554 Special 1/2554 Special 2/2554 2/2554 Special 3/2554 3/2554 4/2554 5/2554 6/2554 7/2554 Special 4/2554 8/2554 Special 5/2554 9/2554 Special 6/2554 10/2554 11/2554 12/2554

Summary of PTT Board of Meeting Attendance (2011)

1. Dr. Norkun Sittiphong 2. Dr. Naris Chaiyasoot 3. Dr. Surapon Nitikraipot 4. Mr. Watcharakiti Watcharothai 5. Mr. Surachai Phuprasert 6. Mr. Nontigorn Kanchanachitra 7. Mr. Piyawat Niyomrerks 8. Mr. Sommai Khowkachaporn

/

/

/

/

/

/

/

/

/

/

/

/

/

/

/

/

/

/

/ / / / /

/ / / / /

/ / / / /

/ x / / /

/ x / / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

/ / /

x Resigned, Oct. 10, 2011 / / / / / / x / / /

Resigned, Mar. 24, 2011 /

/

/

/

/

/

/

/

/ Resigned, Oct. 10, 2011

Resigned, Jan. 1, 2011 Appointed / Feb. 14, 2011

/

/

/

/

/

/

/

/

x

x

/

x Resigned, Nov. 21, 2011

/

/

/

/

/

/

/

/

/

Resigned, Nov. 3, 2011

/

x

/

9. Mr. Anuwat Maytheewibulwut

/

/

/

/

/

/

10. Mr. Chaikasem Nitisiri 11. Mr. Chulasingh Vasantasingh 12. Dr. Ampon Kittiampon 13. Mr. Surapit Kiratibutr

/

/

/

/

/

/

Appointed Apr. 20, 2011

x

/

/

/

/

/

x

/

/

14. Dr. Bhusana Premanode

x

/

/

/

/

/

/

/

/

/

/

x

x

/

x

15. Mr. Krairit Nilkuha 16. Mrs. Benja Louichareon 17. Mr. Pichai Chunhavajira 18. Mr. Prasert Bunsumpun

/ / x /

/ / / /

/ x / /

/ / / /

/ / / /

/ / / /

/ / / /

/ / / /

/ / / /

/ / / /

/ / / /

/ / / /

/ / x /

/ / / / / / / / / / / Resigned, Oct. 4, 2011

Appointed Apr. 20, 2011 /

/

/

/

/

Retired, Apr. 20, 2011 (AGM)

/

/

/

/

/

/

/

/

/

/

x

/

Resigned, Dec. 21, 2011

Resigned, Mar. 29, 2011

Resigned, Nov. 1, 2011

Employment contract expired, Sep. 9, 2011

/ / 19. Mr. Arkhom Termpittayapaisith Appointed, Oct. 11, 2011 / / 20. Mr. Waroonthep Watcharaporn Appointed, Oct. 11, 2011 / / 21. Mr. Krairit Euchukanonchai Appointed, Oct. 11, 2011 / / 22. Dr. Chitrapongse Kwangsukstith Appointed Oct. 25, 2011 / 23. Mr. Montri Sotangkur Appointed Nov. 4, 2011 / 24. Gen. Warawat Indradat Appointed Nov. 4, 2011 25. Gen. Prin Suvanadat Appointed Nov. 25, 2011 26. Mr. Sihasak Phuangketkeow – ]… ]{|| ~

‚ |ž]___€ / / / / 27. Dr. Pailin Chuchottaworn Appointed Sep. 10, 2011 Total attendance 12 14 13 14 14 14 13 13 14 14 14 13 10 12 9 11 14 Total directors 14 14 14 15 15 14 14 14 14 14 14 14 14 14 11 13 14

x / / / / / / /

13 14

PTT Public Company Limited

Annual Report 2011

Attendance Record of the Board and the Committee Meetings (2011) Unit: Times Meeting Attendance in 2011 Name

Board of Directors (Total 18)

Corporate Nominating Audit Comm. Governance Comm. (Total 14) Comm. (Total 6) (Total 2)

Remuneration Comm. (Total 1)

Appointment during the Year

1. Dr. Norkun Sittiphong

18/18

–

–

3/3

–

–

2. Dr. Surapon Nitikraipot

16/18

–

2/2

–

–

–

3. Mr. Watcharakiti Watcharothai

17/18

–

2/2

5/6

–

–

4. Mrs. Benja Louichareon

17/18

–

–

–

–

–

5. Mr. Krairit Nilkuha

18/18

–

–

1/1

1/1

–

6. Mr. Chulasingh Vasantasingh

11/12

11/11

–

–

–

Appointed Apr. 20 (replacing Mr. Chaikasem Nitisiri)

7. Mr. Arkhom Termpittayapaisith

2/3

1/2

–

–

–

Appointed, Oct. 11 (replacing Mr. Surachai Phuprasert)

8. Mr. Waroonthep Watcharaporn

3/3

–

1/1

–

–

Appointed, Oct. 11 (replacing Mr. Pichai Chunhavajira)

9. Mr. Krairit Euchukanonchai

3/3

4/4

–

–

–

Appointed, Oct. 11 (replacing Mr. Nontigorn Kanchanachitra)

10. Dr. Chitrapongse Kwangsukstith

3/3

–

–

–

–

Appointed Oct. 25 (replacing Mr. Naris Chaiyasoot)

11. Mr. Montri Sotangkur

2/2

–

–

–

–

Appointed Nov. 4 (replacing Mr. Bhusana Premanode)

12. Gen. Warawat Indradat

2/2

–

–

–

–

Appointed Nov. 4 (replacing Mr. Anuwat Mayteewibulwut)

13. Gen. Prin Suvanadat

1/1

–

–

–

–

Appointed Nov. 25 (replacing Mr. Sommai Khowkachaporn)

14. Mr. Sihasak Phuangketkeow

New

–

–

–

–

Appointed Dec. 23 (replacing Mr. Surapit Kiratibutr)

15. Dr. Pailin Chuchottaworn

5/5

–

–

2/2

–

Appointed Sep. 10 (replacing Mr. Prasert Bunsumpun)

PTT Public Company Limited

Annual Report 2011

Twelve Directors who completed their terms or resigned (2011) Meeting Attendance in 2011 Name

Board of DiAudit rectors (Total Committee 18) (Total 14)

CG Committee (Total 2)

Nominating Remuneration Committee Committee (Total 6) (Total 1)

Movement during the Year

1. Mr. Piyawat Niyomrerks

0/0

–

–

–

–

Resigned on January 1

2. Mr. Surachai Phuprasert

5/5

2/3

–

1/1

1/1

Resigned on March 24

3. Dr. Ampon Kittiampon

6/6

3/3

–

1/1

–

Resigned on March 29

4. Mr. Chaikasem Nitisiri

6/6

3/3

–

–

–

Completed his term on April 20

5. Mr. Prasert Bunsumpun

13/13

–

–

–

–

Employment contract expired on September 9

6. Mr. Pichai Chunhavajira

12/14

–

–

–

–

Resigned on October 4

7. Dr. Naris Chaiyasoot

13/14

–

–

–

–

Resigned on October 10

8. Mr. Nontigorn Kanchanachitra

14/14

–

–

–

1/1

Resigned on October 10

9. Dr. Bhusana Premanode

11/15

5/7

–

–

–

Resigned on November 1

10. Mr. Anuwat Mayteewibulwut

15/15

–

1/1

–

–

Resigned on November 3

11. Mr. Sommai Khowkachaporn 10/13

7/8

–

–

–

Resigned on November 21

12. Mr. Surapit Kiratibutr

–

–

3/4

–

Resigned on December 1

8/11

Note : A total of 18 Board of Directors meetings took place during the year: 12 regular meetings and 6 extraordinary meetings. 5.12 Self-assessment of the Board

By the resolution of Board meeting No. 10/2011 of October 28, 2011, the Board approved the self-assessment forms used last year for use again this year. The form is aligned with PTT’s good corporate governance principles. The form was to be used to conduct self-assessment of the Board’s performance, and serves as a vital tool for improving Board performance and providing reference data for the corporate governance rating. Three types of self-assessments were applied, whereby the percentages corresponded to the following levels of performance achieved in each of the areas detailed below. These are the assessment criteria for the entire board, individual self-assessment forms, and cross self-assessments:

Over Over Over Over Below

85% 75% 65% 50% 50%

= = = = =

Excellent Very good Good Fair Needs improvement

& Â? *

Ç° 4FMG BTTFTTNFOUÇ°PGÇ°UIFÇ°#PBSEÇ°DPOTJTUFEÇ°PGÇ°GPVSÇ° DBUFHPSJFTÇ° : Board policy, composition, practices, and meetings. The results indicated excellent/most suitable overall performance, with an average score of 93.4%.

PTT Public Company Limited

Annual Report 2011

ǰ ǰ ǰ 4FMG BTTFTTNFOUǰPGǰ*OEJWJEVBMǰ%JSFDUPSTǰDPOTJTUFEǰ “ = PGǰTJYǰDBUFHPSJFT : accountability for decisions and actions; budget approved by the Board. responsibility in performing the job with full ability and

Y ” Y in job performance and information disclosure; vision to create long-term value; and business ethics. Overall results were excellent for most directors, with an average score at 95.34%.

The Board authorizes the President & CEO to manage the Company’s business under the following scope of authority: “ J # the Board or shareholders’ meetings, or both. “ # acts, agreement, orders, announcements or any correspondence 3. Individual Assessment of Other Directors (Cross- with government agencies, state enterprises, or other parties assessments) consisted of six identical categories as listed and engage in any necessary and suitable action to facilitate above for direct comparison. this duty. Cross-assessment results in these six categories indicated “ ?

excellent conformance by most Directors, with an average hiring, appointing, removing, promoting, demoting, cutting score of 96.83%. the salary or wages, taking disciplinary action, and dismissing any employee or contractor under the rules, regulations and 5.13 Corporate Management directives of the Board. For employees or contractors serving 5.13.1 Duties and Responsibilities of the President as advisers, senior executive vice presidents or equivalent & CEO (President) upward, prior approval of the Board is required. The President Under PTT’s regulations, the President & CEO has the & CEO is also authorized to specify the employment conditions authority and rersponsibility to manage the Company’s for employees and contractors and issue rules governing the business as assigned by the Board. The business is to be ? Q „ managed strictly, prudently, and with integrity under the the rules, regulations and directives of the Board. plans or budget approved by the Board, and must be in the “ best interests of PTT and its shareholders. The President & or both, to other persons, provided that the action complies CEO’s authority and responsibility include the following with the document concerning the power of attorney or rules, duties: regulations or directives of the Board and/or the Company, “ ž � � or both. “ <

The authority and duties of the President & CEO are reduce the salary or wages, take disciplinary action against „ "&& employees and contractors as well as dismissing employees resulting from the President & CEO’s exercise of the authority. or contractors under the Board’s regulations. “ = policies, including operating plans and budget estimates, to the Board for approval, and report performance against them to the Board every three months.

PTT Public Company Limited

Annual Report 2011

5.13.2 The Management Committee

The Management Committee was appointed on October 1, 2001, with the duties of operating PTT’s business. As of year-end 2011, it consisted of 10 members as follows: Name

Position

1. President & CEO

Chairman

] ? ‰

Member

… ? ‹ " › Z

Member

[ ? – " Z

Member

5. Senior Executive Vice President, Corporate Management

Member

6. Senior Executive Vice President, Gas Business Unit

Member

7. Senior Executive Vice President, Oil Business Unit

Member

` = š " " ƒ Z ‹

Member

9. Senior Executive Vice President, International Trading Business Unit

Member

10. Senior Executive Vice President, Corporate Strategy and Organization Development

Member and Secretary

& š " " › ?

The Management Committee meets at least once a month. This year there were altogether 28 meetings.

ǰ ǰ %VUJFTǰBOEǰ3FTQPOTJCJMJUJFTǰPGǰUIFǰ.BOBHFNFOU Committee “ " " › ?= directions, investment plans, budgets, allocation of resources "&& "&& “ ƒ Z implementation. “

Board. “ ƒ "&& “ ™ "&&

Z

“ = � nistration, human resources and information, as well as the ’ "&& “ = In addition, the Company appointed 14 committees to

* 1. Enterprise Plan Committee 2. Corporate Finance and Accounting Committee 3. PTT Plc Credit Committee 4. Risk Management & Internal Control Committee 5. Corporate Human Resource Committee 6. Quality, Security, Safety, Health, and Environment Committee 7. Corporate Social Responsibility Committee 8. Petroleum Procurement Committee 9. Upstream Petroleum and Gas Business Group Synergy Management Committee

PTT Public Company Limited

Annual Report 2011

10. Downstream Petroleum Business Group Synergy Management Committee 11. Oil Business Strategic Plan Committee 12. Gas Business Strategic Plan Committee

|… " ƒ " ?

14. International Trading Business Unit Risk Management Committee

5.13.3 Current Management Team Members Name

Position

1.

Dr. Pailin Chuchottaworn1

President & CEO

2.

Mr. Tevin Vongvanich

? ‰

3.

Mr. Vichai Pornkeratiwat2

? ‹ " › Z ‹

4.

Mr. Nuttachat Charuchinda2

? – " Z

5.

Mr. Supattanapong Punmeechao2

Senior Executive Vice President, Corporate Strategy

6.

Mr. Pitipan Tepartimargorn*

Senior Executive Vice President, Human Resources & Organization Excellence

7.

Mr. Peerapong Achariyacheevin2

Senior Executive Vice President, Gas Business Unit

8.

Mr. Sarun Rungkasiri3

Senior Executive Vice President, Oil Business Unit

9.

Mr. Sukrit Surabotsopon

= š " " › ƒ Z ‹

10.

Mr. Sarakorn Kulatham

Senior Executive Vice President, International Trading Business Unit

11.

Mr. Anon Sirisaengtaksin

Senior Executive Vice President, seconded to President & CEO, PTT Exploration and Production Plc

12.

Mr. Veerasak Kositpaisal4

Senior Executive Vice President, seconded to CEO, PTT Global Chemical Plc

13.

Mr. Bowon Vongsinudom4

Senior Executive Vice President, seconded to President, PTT Global Chemical Plc

14.

Mr. Surong Bulakul

Senior Executive Vice President, seconded to CEO, Thai Oil Plc

15.

Mr. Suwanunt Chatiudompunth3

Senior Executive Vice President, seconded to President, PTT Phenol Co., Ltd.

16.

Mr. Atikom Terbsiri

Senior Executive Vice President, seconded to President, IRPC Plc

17.

Mr. Wirat Uanarumit5

Executive Vice President, Corporate Finance

18.

Mrs. Prisana Prahankhasuek

Executive Vice President, Corporate Accounting

Note : 1 Appointed on September 10, 2011, replacing Mr. Prasert Bunsumpun, who completed his employment contract. 2 Appointed on October 1, 2011. 3 Appointed on May 16, 2011. 4 Appointed on October 19, 2011. 5 Appointed on November 1, 2011, replacing Mr. Chatchawal Eimsiri, who was seconded to PTT International Co., Ltd.

PTT Public Company Limited

5.14 Compensation Paid to Directors and the Management

Annual Report 2011

those in attendance only). Compensation for meetings of Committees consisted of:

Audit Committee With the oversight of the Remuneration Committee, - Monthly allowance of 15,000 baht each "&& - Meeting allowance of 15,000 baht for each meeting (for directors, taking into account each director’s responsibility, those in attendance only), and the Secretary received a

monthly allowance of 7,500 baht. peers. Compensation consists of meeting allowances and Compensation for the Nominating, Remuneration, and –

additional allowances for additional responsibilities. Directors’ Corporate Governance Committees consisted of: - Meeting allowance of 24,000 baht for each meeting (for compensation rates have been approved by shareholders as those in attendance only). follows: Compensation for the Chairman of each committee was 25% higher than for others. 5.14.1 Directors’ Compensation Ç° Ç° ĝǰ.FFUJOHÇ°"MMPXBODFT The following compensation structure for the Board was approved at the AGM of April 20, 2011: #PBSEÇ°.FFUJOHÇ°DPNQFOTBUJPO remained the same as in 2010, and consisted of: - Retainer allowance of 30,000 baht per month - Meeting allowance of 20,000 baht for each meeting (for

Ç° Ç° ĝǰ%JSFDUPSTÄ´Ç°#POVTFTÇ°JOÇ° (no change from 2010): Bonus payouts to each director, at 0.05% of the net income for 2010, corresponded to PTT’s performance and net income and up to 2,000,000 baht per person were completed. The bonus was prorated to each director’s term, with the Chairman receiving 25% more than individual Directors.

Compensation Paid to Individual Directors (2011) Unit : Baht Days of Service

Bonus

Board Meeting Allowance

1. Dr. Norkun Sittiphong

365

2,223,287.67

439,919.35

90,000.00

529,919.35

2,753,207.02

2. Dr. Surapon Nitikraipot

365

2,000,000.00

680,000.00

54,000.00

734,000.00

2,734,000.00

3. Mr. Watcharakiti Watcharothai

365

2,000,000.00

700,000.00 186,000.00

886,000.00

2,886,000.00

4. Mrs. Benja Louichareon

365

2,000,000.00

700,000.00

–

700,000.00

2,700,000.00

5. Mr. Krairit Nilkuha

365

2,000,000.00

720,000.00

57,500.00

777,500.00

2,777,500.00

6. Mr. Chulasingh Vasantasingh

256

1,402,739.73

621,000.00 206,250.00

827,250.00

2,229,989.73

7. Mr. Arkhom Termpittayapaisith

82

449,315.07

135,322.58

15,000.00

150,322.58

599,637.65

8. Mr. Waroonthep Watcharaporn

82

449,315.07

140,322.58

24,000.00

164,322.58

613,637.65

9. Mr. Krairit Euchukanonchai

82

449,315.07

170,322.58

60,000.00

230,322.58

679,637.65

No. Name

Committee Meeting Allowance

Total Meeting Allowance

Total Compensation

PTT Public Company Limited

Annual Report 2011

Unit : Baht Days of Service

Bonus

Board Meeting Allowance

10. Dr. Chitrapongse Kwangsukstith

68

372,602.74

126,774.19

11. Mr. Montri Sotangkur

58

317,808.22

12. Gen. Warawat Indradat

58

13. Gen. Prin Suvanadat

No. Name

14. Mr. Sihasak Phuangketkeow 15. Dr. Pailin Chuchottaworn

Committee Meeting Allowance

Total Meeting Allowance

Total Compensation

–

126,774.19

499,376.93

97,000.00

–

97,000.00

414,808.22

317,808.22

97,000.00

–

97,000.00

414,808.22

37

202,739.72

56,000.00

–

56,000.00

258,739.72

9

49,315.07

8,709.68

–

8,709.68

58,024.75

113

619,178.08

211,000.00

259,000.00

878,178.08

48,000.00

14,853,424.66 4,903,370.96 740,750.00 5,644,120.96 20,497,545.62

Total

Note : No. 1: The Chairman has been in his position from July 22, 2011 (no meeting allowance was received from January to June 2011). No. 6: Appointed on April 20, 2011. /P Ç° : Appointed on October 11, 2011. No. 10: Appointed on October 25, 2011. /P Ç° : Appointed on November 4, 2011. No. 13: Appointed on November 25, 2011. No. 14: Appointed on December 23, 2011. No. 14: Appointed on September 10, 2011, replacing Mr. Prasert Bunsumpun, who completed his employment contract. Retired and Resigned Directors (2011) Unit : Baht No. Name

Days of Service

Bonus

1. Mr. Piyawat Niyomrerks

0

-

2. Mr. Surachai Phuprasert

83

454,794.52

3. Dr. Ampon Kittiampon

88

4. Mr. Chaikasem Nitisiri

Board Meeting Allowance

Committee Meeting Allowance

Total Total Meeting Compensation Allowance

-

-

-

223,387.09

78,000.00

301,387.09

756,181.61

482,191.78

261,532.25

86,250.00

347,782.25

829,974.03

110

602,739.73

293,750.00

45,000.00

338,750.00

941,489.73

5. Mr. Pichai Chunhavajira

277

1,517,808.22

512,903.23

-

6. Dr. Naris Chaiyasoot

283

1,828,767.12

639,032.26

6,000.00

645,032.26 2,473,799.38

7. Mr. Nontigorn Kanchanachitra

283

1,550,684.93

558,709.68

38,500.00

597,209.68 2,147,894.61

8. Dr. Bhusana Premanode

305

1,671,232.88

610,000.00

75,000.00

685,000.00 2,356,232.88

9. Mr. Anuwat Mayteewibulwut

307

1,682,191.78

602,000.00

36,000.00

638,000.00 2,320,191.78

10. Mr. Sommai Khowkachaporn

281

1,539,726.03

578,214.29

105,000.00

683,214.29 2,222,940.32

512,903.23 2,030,711.45

PTT Public Company Limited

Annual Report 2011

Unit : Baht No. Name

Days of Service

Bonus

Board Meeting Allowance

Committee Meeting Allowance

Total Total Meeting Compensation Allowance

11. Mr. Surapit Kiratibutr

226

1,238,356.16

381,000.00

72,000.00

453,000.00

1,691,356.16

12. Mr. Prasert Bunsumpun

252

1,380,821.92

509,000.00

-

509,000.00

1,889,821.92

Total

13,949,315.07 5,169,528.80 541,750.00 5,711,278.80 19,660,593.87

Note : No. 1 resigned on January 1, 2011. No. 2 resigned on March 24, 2011. No. 3 resigned on March 29, 2011. No. 4 completed his term on April 20, 2011. No. 5 resigned on October 4, 2011. No. 6 served as Chairman from December 24, 2010, to July 22, 2011, and resigned on October 10, 2011. No. 7 resigned on October 10, 2011. No. 8 resigned on November 1, 2011. No. 9 resigned on November 3, 2011. No. 10 resigned on November 21, 2011. No. 11 resigned on December 1, 2011. No. 12 resigned on September 9, 2011, because of employment contract completion

$PNQFOTBUJPOǰUPǰ*OEFQFOEFOUǰ%JSFDUPSTǰ4FSWJOHǰBTǰBOǰ*OEFQFOEFOUǰ%JSFDUPSǰJOǰ4VCTJEJBSJFT This year the PTT Board of Directors has four independent directors on the board of PTT Exploration and Production Plc (PTTEP), a PTT subsidiary company. They received compensation for their services to that company for this year as follows: No. Name

Service on PTTEP Board

Total compensation

Remarks

(Baht)

1. Dr. Bhusana Premanode

Independent Director and Corporate Governance Committee member

525,000

Resigned from the Board on November 1, 2011.

2. Mr. Sommai Khowkachaporn Independent Director, Chairman of Nominating Committee, and Risk Management Committee member

743,750

Resigned from the Board on November 21, 2011.

3. Dr. Ampon Kittiampon

Independent Director, Chairman of Audit Committee

875,000

Resigned from the Board on March 29, 2011.

4. Mr. Chaikasem Nitisiri

Independent Director, Audit Committee member, and Nominating Committee member

840,000

Resigned from the Board on April 20, 2011.

PTT Public Company Limited

Annual Report 2011

Directors’ Compensation ProďŹ le of 2008-2011 Unit: Baht 2008

2009

2010

2011

Compensation Persons

Baht

Persons

Baht

Persons

Baht

Persons

Baht

Meeting Allowance

15

10,470,258.07

15

10,863,879.03

15

11,398,213.71

15

11,355,399.76

Total Bonus

15

25,852,400.09

15

29,173,972.62

15

29,657,534.24

15

28,802,739.73

Total

36,322,658.16

40,037,851.65

40,158,139.49

41,055,747.95

leading industry peers’ according to their practices and PTT’s compensation paid to the management team standards. The Remuneration Committee then proposes the members conforms to the policies and principles of the compensation, along with compensation guidelines to the Board and is connected to PTT’s performance according Board for consideration and approval. The President & CEO and his management team members, to the Performance Agreement (PA) of state enterprises as J ‰ & " › ?= eight persons in all, received compensation from PTT # ' " (excluding the senior executives seconded to and paid by PTT Indicators (KPI) for framing PTT’s business each year and the performance of the President & CEO and his team is were responsible for paying the compensation as well as the assessed. Each person’s compensation is measured against "&&Q "&&€ their performance management and the performance of as detailed below: 5.14.2 Compensation Paid to the Management

Total Compensation Paid to the Management

Unit: Baht 2008

2009

2010

2011

Compensation Persons

Baht

Persons

Baht

Persons

Baht

Persons

Baht

Salary

8

53,415,360

8

52,677,119

7

50,470,620

10

62,091,720.00

Bonus

8

24,624,681

8

24,143,679

7

22,183,379

6

24,581,820.00

Total

78,040,041

76,820,798

86,673,540.90

72,653,999

Provident Fund Contribution to the Management

Unit: Baht 2008

2009

2010

2011

Compensation

Provident Fund

Persons

Baht

Persons

Baht

Persons

Baht

Persons

Baht

7

3,629,844

7

3,384,852

7

2,925,340

8

3,980,468.00

Additional Information on the Board and the Management Records have shown no violation of the law within the past 10 years regarding: 1) Being sentenced for criminal charges except for 2) Being sentenced to bankruptcy or having assets controlled. 3) Serving as an executive or a person with authority in a company or partnership sentenced to bankruptcy or whose assets are controlled.

PTT Public Company Limited

Annual Report 2011

PTT ensures its consideration of executives or outsiders from the Ministry of Finance’s Director’s Pool for appointment within the PTT Group, which are state enterprises according ”

? make up no less than one-third of other Directors of a given state enterprise. It also ensures that PTT executives and such – "&&

"&&Q & „ 5.15 Policy on Serving as Directors of Other applicable laws. Companies In conformance to a Cabinet resolution of January "&& [} 24, 2011, concerning fraud prevention measures at state listed on the SET in which it invested and held shares. About enterprises, entitled “The appointment of senior government 60% of its current net income is derived from these companies. $ Thus, PTT has adopted the PTT group management structure as proposed by the National Anti-Corruption Commission, for synergy and alignment of policies. To achieve this, it PTT will table the appointment of directors to serve in more appoints directors or management team members to serve than three boards of directors or juristic persons where PTT as directors in these companies to supervise policies and holds shares on the date the Cabinet decides on their serving business management which align with PTT’s policies for on more than three such boards of directors. & objectives for such appointments are as follows: 5.16 Directors’ Development 1) To ensure that the management of a given company The Board and the management value regular participation aligns with the policy of PTT Group companies; to monitor in development training relevant to their performance, as its overall business performance to align with PTT’s policy

J and institute comparable standards. undergone training with the Thai Institute of Directors (IOD) 2) To forge synergy for the business of PTT Group Association. PTT supports and encourages Directors to companies and supplement value to all related parties, undergo such training with IOD as well as other institutions including Thailand as a whole. in all relevant courses throughout the year. In addition, it …€ & stages study trips to other agencies and organizations as seen � appropriate to promote helpful initiatives for application to PTT’s business. This year, the following directors underwent robustly. This includes assistance to companies outside the training and seminars. PTT group and the resulting application of the knowledge and expertise gained from serving in such leading companies "&& and business alliances for PTT. 4) This is part and parcel of the responsibility of directors and the management of PTT.

PTT Public Company Limited

Annual Report 2011

Name

Course

1. Mr. Surapit Kiratibutr

Successful Formulation & Execution of Strategy (SFE), Class 13/2011, IOD

2. Mr. Nontigorn Kanchanachitra

“How state enterprises must adjust in the ASEAN Economic Community� and “Personnel readiness to accommodate AEC� seminars under an education project for state-enterprise board of directors, representatives of the Ministry of Finance on state-enterprise boards, or entities where the public sector holds less than 50% shares, and those in the Director’s Pool

PTT’s policy is to organize periodic visits and study trips to actual work sites, both domestic and overseas, for Directors to foster their understanding of the business and apply their expertise and experience to their consideration of matters related to energy concerning PTT and Thailand. To this end, this year PTT organized the following overseas trips: 1. A study visit of PTT’s investment in Australia, where the PTT Group (through PTTEP) has long been engaged in petroleum exploration and where the Group had initiated the coal business through PTT International 2. A study visit to Kenya and South Africa, populous countries rich in natural resources, with an interesting format of energy management. They are also very attractive areas where leading energy companies worldwide have been investigating possible investments in assorted forms of energy. The policy is to promote directors’ education about various countries’ energy usage and directions so that the Board may compare practices with Thailand’s energy policy formulation, while enabling directors to monitor data and progress in the energy business and directly share views with experts in world-class energy companies. This broadens their views on PTT Group’s overseas investment expansion, which is in line with future Group business directions. The data,

� contribute to knowledge and understanding of the global energy business and help in the deliberation of suitable businesses for PTT and Thailand. This year the Corporate Governance Committee also visited a Korean university’s operation to use the information in establishing a university by PTT Group in Rayong.

5.17 Directors’ Orientation

For new directors, PTT arranges an orientation program to inform them of its business policies, capital structure, shareholding structure, business performance, information systems, as well as related laws and regulations. Moreover, each director receives a Director’s Handbook, which includes the following topics: Director’s Handbook

1. The Public Company Act 2. Securities and Exchange Act Â… ÂŁ – = [ ? ƒ ?

_ ? ?

6. Company Objectives 7. Company Regulations 8. Company Rules (14 Rules) 9. PTT Good Corporate Governance Handbook 10. Guidelines for Directors of Listed Companies. Information kit for the directors

1. Overview business presentation of PTT by the President & CEO 2. List of directors, subcommittees, and management structure 3. Information on the roles of the Board [ "&& " ? " ~ € 5. Annual Report and Financial Report (Thai Version) in hard copy and CD 6. Annual Sustainability Report 7. “PTT: The S-Curve Story�

8. Director Fiduciary Duty Check List 9. Good corporate governance principles for listed companies 10. Connected transactions of listed companies 11. Guidance on providing information for listed company management 12. Governance 13. PTT Spirit publication. The President & CEO presents information about PTT relevant information so that they may have an overview of the business operation and performance. At the same time, the above-mentioned documents and handbook for new directors are handed over. 5.18 Succession Planning

Because PTT is a state enterprise, the nomination and appointment of the President & CEO must follow the Standard £ – = & ” ` Article 8 quarter. The Board is to appoint a Nominating ?

” to nominate persons with appropriate knowledge, capability "&& & ” "&& except for the management who are directors by title. They must not be older than 58 years old on the day they submitted the application form. When the Nominating Committee selects appropriate candidates, it submits the results to the authorized person to consider the appointment. The appointment must be done within one year from the day the previous management team member left the position. The hiring contract has a timeframe of up to four years for each term. If the Board wishes to hire the previous management team member after it does not have to go through the nominating process, but it cannot hire such a person for more than two consecutive terms.

PTT Public Company Limited

Annual Report 2011

5.19 Internal Control System

PTT consistently values the internal control system, particularly a system that is comprehensive in scope of activities and dimensions, as well as adequate and suitable business, resource utilization, and stewardship of properties, this system consists of an accurate and reliable accounting > conformance to laws and regulations related to PTT’s business. The Board has assigned the Audit Committee to review the ? Q year. Besides such assessment by the Audit Committee, the President & CEO in recognition of the value of internal controls, has authorized the Risk Management Committee ? Q control standards, together with assessing the outcomes and reporting the overview of PTT’s internal control. Also, the ? control work. PTT has conducted an internal control assessment by � formulation of internal control standards, B.E. 2544 (2001). & ?

control assessment, annually conducted by the management ? 5.19.1 Control Environment

PTT commands a sound overall control environment that ” - Leadership: Executives possess a work philosophy and style characterized by good attitudes and support of a corporate culture, with a focus on integrity and ethics. They are role models and support performance in accounting, information management and human resource management systems, monitoring and assessment, internal audits, and external audits, apart from risk management for key business operation and internal and external audits.

PTT Public Company Limited

Annual Report 2011

Â? "&& writing on integrity and a code of conduct. The Corporate ?

policy in line with international standards. Disclosures are „ „ & handbook are revised each year. Each director, management team member, and employee signs on it to acknowledge and conform to such policy and handbook as part of their work, illustrating the commitment to apply the good corporate governance policy and code of conduct to bring tangible results, as detailed below: “ $PSQPSBUFǰ(PWFSOBODFǰ1PMJDZ PTT duly reviewed its policy and handbook for good corporate governance to suit prevailing economic and social circumstances and requires all Directors, management, and employees to acknowledge in writing and observe all policies at work to illustrate the commitment to concrete application of such policy and business code of conduct to their jobs. The Board’s policy on corporate governance is as follows: 1. The Board, management, and all employees are committed to the elements of corporate governance: Accountability, Responsibility, Equitable Treatment, Transparency, Vision to Create Long-Term Value, and Ethics. An organization structure fairly balances the roles of the Board, the management, and the shareholders. 2. Directors must perform their duties independently with full commitment, responsibility and independence. There is a clear division of responsibilities between the Chairman and the President & CEO. 3. Playing a key role in the formulation of corporate vision, strategies, policies and critical plans with due regard for risk factors and suitable risk management, the Board must statements and accounting audits. 4. Leading the rest of the Company on ethics and corporate governance, the Board must supervise the management and „

5. The Board may appoint committees to help it screen and scrutinize critical issues. 6. The Board must undergo annual self-assessment to obtain a framework for its performance assessment. 7. The Board must establish a code of conduct for itself, the management, employees and all contract employees to observe in addition to PTT’s rules and regulations. ` – � must be carried out adequately, credibly, promptly, and fairly for all shareholders and stakeholders. To investors and the general public, the Investor Relations Department is responsible for such disclosure. 9. For fair treatment, PTT shareholders have the right to access information through suitable communication channels with PTT. 10. A proper selection procedure must be in place for the appointment of key management personnel under a fair and transparent nomination process. “ Code of Conduct PTT’s written policy and a code of conduct are in place for integrity and ethics. In the handbook, the Corporate international standards. Violators of the code of conduct are subject to disciplinary action. The essential aspects of the code are included below: 1. Respect the law and the Universal Declaration of Human Rights principles 2. Stay politically neutral …

„ [ J information for self-gains 5. Respond to customers’ needs and show responsibility to consumers 6. Compete freely and fairly 7. Use a transparent procurement system and treat business partners fairly 8. Show responsibility to communities and society

PTT Public Company Limited

9. Support employees’ rights and forge employee engagement |{ < internal audit system 11. Have a guideline for accepting and giving gifts, 12. Maintain safety, promote health, and preserve the environment 13. Respect intellectual property and properly apply information technology.

Annual Report 2011

Ç° Ç° ĝǰ3FQPSUJOHÇ°7FTUFEÇ°*OUFSFTUTÇ°PGÇ°%JSFDUPST Ç° Ç° Ç° Ç° UIFÇ°.BOBHFNFOUÇ°BOEÇ°3FMBUFEÇ°1BSUJFT > ” "&& ” of the vested interests of directors, the management, and related parties as basic information to manage vested interests at the levels of directors and the senior management. The directors and the management are to report such matters every year and whenever there is any change. The Corporate Secretary is to keep, compile, and submit the copy to the Chairman of the Board and the Chairman of the Audit ?

„

Ç° Ç° ĝǰ$POĹ´JDUTÇ°PGÇ°*OUFSFTUÇ° "&& ” „ of interest and illegal, improper activities. Under the Board’s „ management and employees must be solely for PTT’s best and other relationships with external parties that would lead "&& „ operation. Those staff with interests or related businesses which may require PTT’s review and decisions must report „ of interest. PTT is to disallow such connected persons from exercising their authority for and involvement in such transactions.

ǰ ǰ ĝǰ3FQPSUJOHǰ$POOFDUFEǰ5SBOTBDUJPOTǰXJUIǰ155 PTT has required directors, the management, and all

„ a disclosure form. In addition, any approval of such items out of the ordinary, a part of PTT’s internal controls. PTT’s ? ?

been entrusted with the monitoring and resolution of issues „ & cases have arisen.

ǰ ǰ ĝǰ3FQPSUJOHǰ$IBOHFTǰJOǰ4IBSFǰ0XOFSTIJQTǰ 1PSUGPMJPT

As part of the oversight of inside-information measures, all PTT directors and management, including their spouses and children not yet of legal age, must report any changes in their PTT share ownership to the SEC under Article 59 of the Securities and Exchange Act B.E. 2535 (1992) within three days from the date of sale, purchase, disposal or receipt of such shares, including at the end of each quarter and each & " ? issues a letter forbidding directors, executives, or internal units with inside information to disclose such information to external parties or unrelated parties, and to buy or sell PTT shares within 45 days of the last effective date of the statements to SET, ahead of the public dissemination of the statements-to prevent abuse of such inside information. During the past year, all directors and management have strictly observed this policy. PTT has instituted an organizational structure that ’ „ with prevailing circumstances, as well as clear and suitable – ' " > ~'"> € early in the year as guidelines for employee performance, and performance is regularly monitored against goals and measured at the year-end. Goals are revised each year. All employees are aware of their roles, authority, duties, and responsibility.

PTT Public Company Limited

Annual Report 2011

PTT constantly revises and amends its values and corporate culture to suit and align with its vision and context of business. Senior leaders show their commitment to the values and communicate with all staff across the Company through & activities for such values and culture, together with indicators used in monitoring and tangible assessment to lend effectiveness to internal communication, personnel skill sharing, and innovation in the workplace. "&& for human resources in writing, including selection, training, promotion, and compensation procedures. A policy is in

place to constantly develop competencies so that employees’ capability matches business needs and accommodates work expansion. PTT has set up a complaint management center, with Corporate Communications as the main responsible unit, charged with management of external complaints and responses to queries, together with internal complaints.

> are compiled and managed, and then regularly submitted to the management for comprehensive improvement and development of the corporation.

Report on Directors’ Securities Portfolios (as of year-end 2011)

Dec. 31, 2010

Dec. 31, 2011

Change during the Year

Shares No. Name

Remarks

1.

Dr. Norkun Sittiphong

–

–

–

2.

Dr. Surapon Nitikraipot

–

–

–

3.

Mr. Watcharakiti Watcharothai

–

–

–

4.

Mr. Chulasingh Vasantasingh

–

–

–

5.

Mr. Krairit Nilkuha

–

–

–

6.

Mrs. Benja Louichareon

–

–

–

7.

Mr. Arkhom Termpittayapaisith

N/A

–

–

Appointed, Oct. 11, 2011

8.

Mr. Waroonthep Watcharaporn

N/A

–

–

Appointed, Oct. 11, 2011

9.

Mr. Krairit Euchukanonchai & spouse

N/A

80,000

N/A

Appointed, Oct. 11, 2011

10. Dr. Chitrapongse Kwangsukstith & spouse

N/A

258,690

N/A

Appointed Oct. 25, 2011

11. Mr. Montri Sotangkur

N/A

–

–

Appointed Nov. 4, 2011

12. Gen. Warawat Indradat

N/A

–

–

Appointed Nov. 4, 2011

13. Gen. Prin Suvanadat

N/A

–

–

Appointed Nov. 25, 2011

14. Mr. Sihasak Phuangketkeow

N/A

–

–

Appointed Dec. 23, 2011

–

–

–

A report appears in the management section

15. Mr. Pailin Chuchottaworn

PTT Public Company Limited

Annual Report 2011

Securities Portfolio for Directors Who Completed Their Terms and Resigned during the year (as of year-end 2011) Shares No. Name Dec. 31, 2010

Dec. 31, 2011

Change during the Year

Remarks

1.

Mr. Piyawat Niyomrerks

–

–

–

Resigned on January 1

2.

Mr. Surachai Phuprasert

–

–

–

Resigned on March 24

3.

Dr. Ampon Kittiampon

–

–

–

Resigned on March 29

4.

Mr. Chaikasem Nitisiri

–

–

–

Completed his term on April 20

5.

Mr. Pichai Chunhavajira

34,400

N/A

N/A

6.

Dr. Naris Chaiyasoot

–

–

–

Resigned on October 10

7.

Mr. Nontigorn Kanchanachitra

–

–

–

Resigned on October 10

8.

Dr. Bhusana Premanode

–

–

–

Resigned on November 1

9.

Mr. Anuwat Mayteewibulwut

–

–

–

Resigned on November 3

10. Mr. Sommai Khowkachaporn

–

–

–

Resigned on November 21

11. Mr. Surapit Kiratibutr

–

–

–

Resigned on December 1

121,500

N/A

N/A

12. Mr. Prasert Bunsumpun

Resigned on October 4

Employment contract expired on September 9, 2011

Management’s Ownership of Shares (as of year-end 2011) Shares No. Name

Dec. 31, 2010

Dec. 31, 2011

Warrant # 1

Warrant # 2

Change Allocated in Allocated during the Remaining Remaining 2005 in 2006 year

1.

Dr. Pailin Chuchottaworn & spouse

41,300 62,000 20,700 52,600

0

27,600

0

2.

Mr. Tevin Vongvanich

40,200 56,000 15,800 40,300

0

21,000

0

3.

Mr. Nuttachat Charuchinda

28,863 17,563 (11,300) 60,800

0

31,800

0

4.

Mr. Pitipan Tepartimargorn 13,334

5.

Mr. Vichai Pornkeratiwat

6.

Mr. Sarun Rungkasiri & spouse

8,334

(5,000) 38,500

0

20,400

0

46,659 55,559

8,900 46,900

0

25,200

0

0

30,000

0

N/A 43,579

N/A

56,900

Remarks

Appointed on May 16 this year

PTT Public Company Limited

Annual Report 2011

Shares No. Name

7.

Mr. Sukrit Surabotsopon

8.

Mr. Sarakorn Kulatham & spouse

9.

Mr. Anon Sirisaengtaksin

Warrant # 1

Warrant # 2

Dec. 31, 2011

2,000

2,000

0

0

0

0

0

60,800 63,900

3,100

54,200

0

28,300

0

125,200 141,700 16,500 79,800

0

41,900

0

10. Mr. Veerasak Kositpaisal

31,400 31,400

0

0

0

26,400

0

11. Mr. Bowon Vongsinudom

0 12,100

0

0

0

12,100

0

77,683 118,183 40,500 63,300

0

33,000

0

12. Mr. Surong Bulakul

Remarks

Change Allocated in Allocated during the Remaining Remaining 2005 in 2006 year

Dec. 31, 2010

13. Mr. Suwanunt Chatiudompunth

N/A 22,900

N/A 60,300

0

31,600

0

Seconded to PTT Phenol on May 16, 2011

14. Mr. Peerapong Achariyacheevin

N/A 107,363

0 40,300

0

21,200

0

Appointed on October 1, 2011

15. Mr. Supattanapong Punmeechao

N/A

0 (10,000)

–

–

–

–

Appointed on October 1, 2011

16. Mr. Atikom Terbsiri

N/A

0

0

–

–

–

–

Appointed on October 19, 2011

17. Mr. Wirat Uanarumit

N/A 25,500

0

–

–

–

–

Appointed on November 1, 2011

4,600 35,100

0

18,400

0

-

18. Mrs. Prisana Prahankhasuek 78,263 82,863

Note : No. 17 Replaced Mr. Chatchawal Eimsiri, effective from November 1, 2011. Note : No. 1 resigned on January 1, 2011.

PTT Public Company Limited

Annual Report 2011

Securities Portfolios of Executives Transferred, Resigned, and Retired (2011) Shares No. Name

Dec. 31, 2010

Dec. 31, 2011

Warrant # 1

Warrant # 2

Change Allocated in Allocated during the Remaining Remaining 2005 in 2006 year

Remarks

1.

Mr. Prasert Bunsumpun

121,500

N/A

N/A 243,000

0

119,000

0 Employment contract expired on September 9, 2011

2.

Dr. Prajya Phinyawat

107,980

N/A

N/A 88,300

0

45,900

0 Retired on September 30, 2011

3.

Mr. Chatchawal Eimsiri

N/A

-

-

-

4.

Mr. Penchun Jarikasem

N/A 34,000

0

18,300

N/A 10,000

12,000

N/A

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Under Article 39 of the Anti-Corruption Act B.E. 2542 (1999), PTT’s directors and senior management, including directors and senior management in the companies that PTT holds more than 50% of shares, are required to submit a list of their own assets and debts, including that of their spouses and children not yet of legal age, to the NACC Board every time they take up a position, and every three years during their terms, and when they no longer hold their positions.

- Seconded to PTT International on November 1, 2011 0 Seconded to PTTEP on February 1,2011

Ç° Ç° ĝǰ3FWJFXÇ°PGÇ°$POOFDUFEÇ°5SBOTBDUJPOT The Audit Committee presents these transactions to the Z „ been scrutinized for conformance to SET’s criteria. Such transactions are strictly disclosed in the reports and disclosed every quarter of the year.

ǰ ǰ ĝǰ$PSQPSBUFǰ(PWFSOBODFǰ1SPNPUJPOBMǰ"DUJWJUJFT

The Corporate Governance Committee is assigned to promote and screen corporate governance matters so that the Company may actively campaign for compliance with corporate governance principles. A working group on Ç° Ç° ĝǰ%FDMBSJOHÇ°7FTUFEÇ°*OUFSFTUTÇ°BUÇ°.FFUJOHT At every Board of Directors meeting, the Chairman corporate governance, headed by an Executive Vice President, – „ has implemented assorted matters under the policy and interest on all agenda items, which requires that Directors conducted campaigns to cultivate awareness in directors, with vested interests must declare such interests to the meeting the management, and employees as follows: to abstain from voting or giving any views.

PTT Public Company Limited

Annual Report 2011

“ " R-E-A-C-T through various media within the Company, including R = Responsibility exhibitions, a CG Website packed with information, and twoE = Equitable Treatment way communication channels. Internal news broadcast, video A = Accountability shows, a CG column in the “PTT Spirit� magazine, and a C = Creation of Long Term Value CG-Digest via email-newsletters are among the publicity and T = Transparency awareness tools, with positive responses from all. In addition, the Corporate Governance Committee distributed the Thai “ and English versions of the Good Corporate Governance governance for the PTT Group are listed below: Handbook (2nd Revision) to investors, international interested - Establishing a committee to oversee corporate parties and stakeholders for their reference. This will also be governance policies for PTT Group posted on PTT’s website. - Organizing seminars to foster awareness of corporate “ = � – governance and social, community, and environment and employees have been transformed into articles, radio responsibilities, with experts as guest speakers, scripts, and video scripts to cultivate discretion or sound to encourage the sharing of experience. The target judgment in their decision-making to ensure prudence and audience was the staff of PTT and PTT Group with righteousness. For instance, one can examine one’s own corporate governance roles. action by asking whether it is the right thing to do, whether - Organizing the ‘PTT CG Group Day’ to disseminate it is well-accepted and can be disclosed to the public, and PTT Group’s corporate governance activities. In 2010, whether it discredits PTT as an organization of ethics. the ‘PTT Group CG Day 2010’ was held at the Energy Continuous monitoring of such conformance is to be Complex, Vibhavadi Rangsit Road, Bangkok. Each conducted. company set up its own exhibition and presented its “ > "&& own principles of good corporate governance and among PTT Group to align with PTT’s corporate governance business ethics under the theme “CG: The Code to management standards. To this end, they agreed to jointly Growth� and organized a seminar among the senior study and develop corporate governance guidelines based on management of PTT Group. Outside honorary guests international best practices to establish a standard suitable for were also invited, including over 1,000 guests from the PTT Group as a step toward future ranking. ImplementaSET, SEC, Thai Listed Companies Association, tion plans and proactive promotional strategies for corporate State Enterprise Policy Committee, PTT executives, governance were also established as follows: employees, the mass media, and honorable guests. (This event had been scheduled this year for December 15, but due to the Great Floods in Thailand, it has been moved to the middle of 2012.)

- Coordinating to jointly deliberate, consult, and share views within the PTT Group on each company’s CG handbook against international standards. - PTT has instituted a clear and suitable organizational structure and lines of command. Delegation of authority and responsibilities is done in writing. Key Performance Indicators (KPIs) are set at the beginning of the year as a working guideline for employees and assessed at the end of the year. Annual targets are also reviewed. All employees recognize their roles, authority, duties and responsibility. � "&& resource management in writing, including recruitment, training, promotion and compensation procedures. � "&& and assigned the Corporate Communications Department as the main unit responsible. The Department acts as a focal point to respond to complaints within a suitable period. Issues are regularly compiled, managed, and presented to the management for organizational improvement and future development in all areas. 5.19.2 Risk Management

Corporate risk management is vital to business execution, a fact PTT has always recognized as a priority by implementing the approach of The Committee of Sponsoring Organizations (COSO) and ISO 31000, an international standard recognized by organizations worldwide. Cultivating risk management as a corporate culture, PTT has instituted a corporate risk management policy, with a Risk Management and Control Committee-consisting of executive vice presidents and vice presidents from all business units-overseeing and framing risk management and internal ? Corporate risks are managed systematically through various management committees of PTT, and are reported to the PTT Management Committee and the Audit Committee every quarter. Operation risks fall under the oversight of respective

PTT Public Company Limited

Annual Report 2011

operations, and are the responsibility of all units to manage and control at manageable levels, as is clearly stated in the functional job descriptions of all units. The risk management process at PTT is linked to the strategic planning processes. A Strategic Thinking Session ~ & € corporate direction, goals, and strategies. External and internal factors are assessed for potential impacts on the success of the Company’s goals. Also, risks of losing opportunities for creating value added are assessed. Corporate risks are ranked ƒ managers are assigned under the risk management process, with the Committee monitoring resolution to applicable risk areas, together with event risks for the year that affect PTT. This year key corporate risks consisted of the management of procurement and competition in the natural gas business,  " ‚ š business during the petrochemical business down-cycle, operation risks of the Oil Business Unit and Gas Business Unit, international business expansion, and management of personnel in PTT Group. PTT ensured that these risks were manageable. The Audit Committee reviewed risk management actions every quarter to ensure alignment with PTT’s policy. Details about risk management appear under “Risk Factors�. 5.19.3 Control Activities

PTT requires that the Management Committee is Â’

all business groups and corporate overviews, and regularly review all reports to ensure conformance to regulations and job manuals. "&& & in the existence of inspection systems and checks and balances, a systematic separation of duties is in place for groups of personnel for authorization, data processing, recording of

PTT Public Company Limited

Annual Report 2011

items or accounting entries, cash receipts and disbursement, review of inspection, and stewardship of properties. This of control mechanisms to prevent and minimize errors. Executives regularly review outcomes of such performance. Also, performance indices are required for all employees to lend management activity control suitability and adequacy. If PTT enters into transactions with major shareholders, directors, the management or related persons, PTT uses strict measures to ensure that the transaction goes through the required approval procedures every time and for every item. The stakeholders will not take part in the approval of such an item. PTT also closely monitors any subsequent actions. The Board looks after, monitors, and provides policies and recommendations on QSHE standards applied as part of the control activities through the Management Committee headed by the President & CEO, together with the PTT Group QSHE Policy Committee and PTT’s own QSHE Committee. The responsible corporate units are the QSHE and Corporate Quality Management Departments. "&& operation, including QSHE management by applying international basic management systems (ISO 9001, ISO 14001, ISO/IEC 17025, and TIS/OHSAS 18001) in all operating sites and core business processes under the framework of the PTT Group QSHE policy. PTT also subscribes to the PTT Group SSHE Management Standard (PTT Group SSHE MS), designed to "&& & "&& extending management of assorted aspects for greater clarity & in this regard:

PTT also added a framework for implementation of key aspects of the oil and gas industry, including biodiversity and greenhouse gas emission management. PTT still focused on total quality management by leveraging quality management “ > " ƒ Z Unit in conjunction with QSHE units of PTT Group companies with plants located in Map Ta Phut and in Rayong province, a total of nine companies, to cover issue management about environmental and social impacts on Map Ta Phut. “ = ÂŁ J ~ÂŁJ € & ÂŁ ~&ÂŁ € criteria with QMS management from the beginning. “ = "&& Group SSHE MS in supporting units and all business units. PTT also developed key standards and work procedures, trained personnel, and communicated to relevant PTT Group executives and employees to make them aware of the various methods and channels for extending the basic management “ = Â’ management system, namely the business continuity management ~Z?J€ & "&& < Z?J ~&> ]]Â…{|Â? ]__…€ J ?> ~J ? (Thailand)) in Thailand, as well as the energy management system (ISO 50001). Rayong GSP has applied this system

|Y is expected in 2012. This year PTT began assessment of its carbon footprint in a pilot product, namely PTT Performa Super Synthetic API-SN 0W-30, and plans to extend its investigation to other PTT products. “ > <= “ ƒ operation data storage and reporting system by working on an information system to improve the PTT Group SSHE thus illustrating more clearly PTT’s commitment, particularly Performance Database (Web Application) for convenience that of product responsibility with a focus on green products. in data recording using a uniform format throughout the

PTT Public Company Limited

Annual Report 2011

leading business organization with the Thailand Quality for compilation and benchmarking with QSHE performance Award (TQA) throughout the Company. of business peers within a given business unit. Finally, we can benchmark our operation with best-in-class performance 5.19.5 Monitoring & Evaluation Internal Audit System # "&& "&& & ? the Company, which directly reports to the Audit Committee. 5.19.4 Information & Communication Thanks to the vision of the Board, PTT and its group It fosters assurance and provides consultation to ensure that companies have jointly established PTT ICT Solutions Co., business processes are properly equipped with good corporate Ltd. (PTTICT), to centralize IT services for the PTT Group, governance, risk management, and sound internal controls a cost-saving idea that reduces infrastructural spending and to support PTT’s objectives. IT redundancies for each company, while adding bargaining & � power for the PTT Group. To date, PTTICT has performed advanced audit plans of three years in line with business its role consistently well and has become the PTT Group’s strategic directions and the so-called risk-based approach (key corporate risks), encompassing PTT Group’s businesses. major force in IT operations. Through the Audit Committee, the Board gave priority to > ?

IT system security and the safety of electronic information and reporting to the Board for acknowledgment every quarter. storage. The management information systems and internal Regular monitoring is undertaken for actions in response to controls were constantly reviewed. This year, computer Q >

systems vital to PTT’s business have achieved the ISO 27001, ‚ „

an international standard universally accepted worldwide.

"&& & distinction. ǰ ǰ ĝǰ$POUSPMǰ4FMG "TTFTTNFOUǰ $4"

PTT has consistently implemented and developed ICT In addition, PTT monitors internal controls and assesses systems in its business execution by developing an information master plan that addresses business needs while supporting routine procedures of executives, supervisors, and relevant executive decisions. This year PTT improved its enterprise parties. It also instituted Control Self-Assessment (CSA) resource planning (ERP) and business intelligence (BI), within the Company in a blended mode: due for completion in 2012, to support preparation of - Questionnaires for internal controls at corporate and key business reports, meeting the needs of executives for departmental levels business operation, performance monitoring, and business - Control Self-Assessment Workshops to assess internal outlook projections. controls at the activity level, with a focus on process control, As for performance measurement and comparison of assessment outcomes and plans to improve internal controls performance against goals, PTT has improved its information which must have the buy-in of work processes. system to accommodate future policies and organization The Risk Management Department compiles data structures-including the COACH, the Balanced Scorecard, and summarizes the analyses of those data in reports of and KPIs to promote the progress towards becoming a self-assessment covering the entire company for the Risk

PTT Public Company Limited

Annual Report 2011

Management Committee to screen, provides their views, defects, a view shared by the external auditor. In other words, and issues approaches for responsible units to proceed with PTT’s internal control system is adequate and effective in > line with its objectives. Corporate Audit conducts reviews to ensure that the existing internal controls are adequate for handling risk management and are consistently conformed to. The Audit Committee > areas needing improvement are found, PTT has instituted procedures to ensure that such areas receive due attention and immediate corrective actions. As for internal control

� Audit Committee for consideration quarterly and annually. In monitoring and assessing internal controls, PTT conforms to the guidelines for report preparation issued by the Auditing Commission Regulation (Clause 6). It was concluded that the latest assessment was at a ‘good’ level. All business groups also report their performance every month and have their performance regularly measured against KPIs. The regular review of the assessment outcomes conducted ? ?

PTT Public Company Limited

PTT

Annual Report 2011

Board of Directors

Dr. Norkun Sittiphong Chairman Age 58

Mr. Chulasingh Vasantasingh Independent Director, Chairman of the Audit Committee Age 61

(%) Share Possession / None Educations ย Z = ~J =

ย ? ย & ย J ~J =

ย ย ย ย " ย ~J =

ย ย ย Certi๏ฌ cations ย & ย ย ?

ย ย ?

~? [\ ย & ย ? J ย " ~? [ ย & ย & > ย ~> ย ย ย ?" ]|ย ]{{} Work Experiences |}}` ย ]{{{ * ย " ย ? J ย ]{{| ย ]{{ย * ย " ? J ย ]{{ย ย ]{|{ * ย " J = ]{|{ ย " * " J = Relevant Important Positions ย ? "&& = " " ? ย ย ย & " ? ย

(%) Share Possession / None Educations ย Z ย ~ย ย Z ย ~< ย ? ย & ย J ? ย ~J?ย ย ย > ย ย Z ย & > ย = & ย < ย ย

ย ย ย & ย < ย ย

ย ? ย & ย < ย ย

ย ยง ย & Certi๏ฌ cations ย & ย ย ?

ย ย ?

~? ย `` ย & ย " ย = ?

& ย ? J ย " ~? _ ย & ย & > ย ~> ย ย ย ?" ย _ย ]{{ย ย ย ย \ย ]{{ย ย ย |ย ]{{^ ?" |\ย ]{{\ ย ? ย ?" |ย ]{{` Work Experiences ]{{_ ย ]{{} * ย & ]{{} ย " * & Relevant Important Position / None

PTT Public Company Limited

Mr. Watcharakiti Watcharothai Independent Director, Chairman of the Nominating Committee, Member of the Corporate Governance Committee

Annual Report 2011

(%) Share Possession / None Educations “ Z ~" € ' ‹ & “ J " ƒ ‹ > Â‹ CertiďŹ cations “ & Â?" › " ?

‚ – ?

~? [ € & “ ? J  " ~? } € & “ " – ? " " – > ~"–>€ ~? _ € & “ = ™ Z ‚ ™ ~? |_ € & “ & > – ~> –€ –?" |]|ž]{{} Work Experiences ]{{| Â? ]{{\ *  ? ]{{\ Â? " * ? Relevant Important Position “ – >ƒ"? " ? Â

Age 51

Mr. Arkhom Tempittayapaisith Independent Director, Chairman of the Remuneration Committee, Member of the Audit Committee Age 55

(%) Share Possession / None Educations “ Z = & ‹ & “ J – = + ?

‹ CertiďŹ cations “ =

? ? ~? …_ € & “ & ‚ – ?

‚ – ?

~? [^ € & “ & > – ~> –€ – " _|ž]{{^ –?" }\ž]{{\ ?" ]]ž]{{` Work Experiences ]{{{ � ]{{… * � ‚= –Z ]{{… � ]{{[ * " " ‚= –Z ]{{[ � ]{|{ * – � ‚= –Z ]{|{ � " * � ‚= –Z Relevant Important Position / None

PTT Public Company Limited

Dr. Surapon Nitikraipot Independent Director, Chairman of the Corporate Governance Committee Age 51

Mr. Krairit Euchukanonchai Independent Director, Member of the Audit Committee Age 56

Annual Report 2011

(%) Share Possession / None Educations “ Z  ~ ? < € & ‹ & “ Z  ~? Â…_ € >  & Z & “ – ÂŽ Q ¢ ~– = € ~ >>>€ ‰

“ – Q ‹ ¢ ƒ ~ ÂŻ € ‰

CertiďŹ cations “ ? –  > > " " ‰

“ & ™ � " ?

‚ – ?

~? ]Â… € & “ & > – ~> –€ –?" |{]ž]{{` ƒ?" ]_ž]{|| Work Experiences |}}} Â? ]{{| * < "  – ‰ Â

& ‹ ]{{| Â? ]{{[ * – "  – ‰ Â

& ‹ ]{{^ � ]{{` * J ‚  ]{{[ � ]{|{ * ƒ & ‹ ]{|{ � " *  ‰  & ‹ Relevant Important Positions / None

(%) Share Possession / None Educations “ Z

? ‹ & “ J Z ~Z ‰ € ‚ & ‹ ‹ CertiďŹ cations “ & > – ~> –€ –?" _}ž]{{_ ƒ?" |^ž]{{\ Work Experiences ]{{Â… Â? ]{{_ * – " + ]{{[ Â? ]{{_ * – = + ƒ – J " ?  ]{{_ Â? ]{{^ * – ? & & " ?  ]{{_ Â? ]{|| * – ? ‚ §  >

" ?  ]{{` � ]{|| * – J = " ?

" * ? Z š < ? ?  ƒ Relevant Important Position / None

PTT Public Company Limited

Mrs. Benja Louichareon Director, Member of the Remuneration Committee Age 58

Mr. Krairit Nilkuha Director, Member of the Remuneration Committee, Member of the Nominating Committee Age 60

Annual Report 2011

(%) Share Possession / None Educations “ Z ~ € & ‹ & “   Z & ‹ & “ J " ? ‹ & CertiďŹ cations “ J J " – ƒ ? “ =–> & & J J ƒ – ~ ‚ ¤ € “ & = ' J ‹ “ & ™ Â? " ?

‚ – ?

~? [^|^€ & “ ? " – ? " " – > ~"–>€ & “ ? J  " ~? ` € & “ & > – ~> –€ –?" \_ž]{{^ ?" ]\ž]{{} ‰= \ž]{|{ ƒ?" ]…ž]{|{ Work Experiences ]{{… � ]{{[ * – – � ƒ – ]{{[ � ]{{_ * " & Z J ƒ – ]{{_ � ]{{` * > " ‰

]{{` � ]{|| * – " J ‰

]{|| � " * – = – J ‰

Relevant Important Positions / None

(%) Share Possession / None Educations “ Z J =

' ‹ & “ J ~" =

€ ‚ J > J & ‹ CertiďŹ cations “ & ‚ – ?

‚ – ?

~? [` € & “ ? J  " ~? ` € & “ & > – ~> –€ ‹‰ ^ž]{{^ – " _…ž]{{^ ?" ][ž]{{` ƒ� |ž]{{} Work Experiences ]{{… � ]{{_ * – – � – J ‰ ]{{_ � ]{{` * – � – J ‰ ]{{` � ]{{} * – " J = ]{{} � " * – – = – = J =

Relevant Important Positions “ ? Z " " ? Â

PTT Public Company Limited

Mr. Waroonthep Watcharaporn Independent Director, Member of the Corporate Governance Committee Age 43

Mr. Montri Sotangkur Independent Director Age 49

Annual Report 2011

(%) Share Possession / None Educations “ Z –

Z J # J & ‹ & ? ?

& “ J > ~J> € =

+ ‹ ‹ CertiďŹ cations “ ‚

Work Experiences ]{{^ Â? ]{{\ * š " J Â?]Â?? > " ]{{\ Â? ]{{` * J – " § ?  ]{{` Â? ]{|{ * š " ? Z > " ]{|{ Â? ]{|| * š " ? > " ]{|| Â? " * š " š ? Z =

> " Relevant Important Positions / None

(%) Share Possession / None Educations “ Z ~‰ ? € ? ‹ & “ J Z ‚ ‹  ? ‹ CertiďŹ cations “ ? J  " ~? } € & Work Experiences ]{{` Â? ]{{} * – > &– Â? Â?> & – ~" Â’ € ]{{` Â? ]{|{ * – ‚ > ]{{` Â? ]{|| * – " + ]{{` Â? ]{|| * – ‚ < ]{{} Â? " * – J " = " ?  ]{|| Â? " * – ? & & " ?  |}}] Â? " * J – " – J ?  Relevant Important Positions / None

PTT Public Company Limited

Annual Report 2011

Age 62

(%) Share Possession / None Educations “ Z ~ € ? ƒ J & “ J Z & ? J JZ " ' ‹ & CertiďŹ cations “ ? ? ~‰  Â€ ‹ “ – ƒ J ? ‚ " Â? ~J ? ‹ € Work Experiences ]{{] * J –

]{{[ * – ? ? ƒ J ]{{_ * ? J –

]{{` * = ƒ & ]{{` * J –

Relevant Important Positions / None

Gen.Prin Suwannathat Independent Director

(%) Share Possession / None Educations “ Z ~ € ? ƒ J & CertiďŹ cations “ & ‚ – ?

‚ – ?

~]{{[€ & “ & > – ~> –€ –?" ||{ž]{{` Work Experiences ]{{{ � ]{{| * ? | > ƒ ' Q ]{{] � ]{{[ * ? || J ?

]{{[ � ]{{^ * ? | – ' Q " * ? & J –

Relevant Important Positions / None

Gen.Warawat Indradat Independent Director

Age 59

PTT Public Company Limited

Dr. Chitrapongse Kwangsukstith Director Age 62

Annual Report 2011

(%) Share Possession / 0.000906 Educations “ Z = ~J € ? ‹ & “ J = ~> =

€  ‹ & ‹ “ – =

>  Â‹ & ‹ CertiďŹ cations “ = " ‹ ‹ “ & ‚ – ?

‚ – ?

~? []|]€ & “ & > – ~> –€ –?" []ž]{{[ ‰‚– }ž]{{[

ƒ?? |{ž]{|{ Work Experiences ]{{{ � ]{{… * = š " "&& + "

"&& = › " " ?  ]{{… � ]{{\ * = š " Z ‹ "&& ]{{` � ]{{} * ? ‹ " Z "&& "

* ? Z "&& > ? Â

Relevant Important Positions “ ? "&& > ? Â

Mr. Sihasak Phuangketkeow Independent Director Age 54

(%) Share Possession / None Educations “ Z " ~> ƒ € ? ‹

& “ J ~> " " € ™ < ‹ ‹ CertiďŹ cations “ ‚

Work Experiences ]{{] * – – > J ‰ ]{{^ * – " J ‰ ]{{\ * " ƒ & ‹ ‚ > ’ ]{|| � " * " J ‰ Relevant Important Positions / None

PTT Public Company Limited

Dr. Pailin Chuchottaworn Director, Secretary to the Board Age 55

Annual Report 2011

(%) Share Possession / 0.000217 Educations “ Z = ~? =

€ ~< € ? ‹ & “ J =

? =

& > & ™ “ – =

? =

& > & ™ CertiďŹ cations “ "&& =  " ž = ?

‹ “ ‚>– �+ =  " & + ‹ " ‹ “ >  " ~> "€ ]{{_ ž J > & ‹ “ & ™ � " ?

‚ – ?

~? ]] € & “ & > – ~> –€ – " ][ž]{{[ –?" _|ž]{{[ ‰‚– |[ž]{{[ Work Experiences ]{{^ � ]{{` * = š " " › ƒ Z ‹ "&& " "&& ? ?  ]{{` � ]{{} * = š " " › ƒ Z ‹ "&& " "&& " J ?  "&& ? ?  ]{{} � ™ ]{|| * = š " "&& " >ƒ"? " ?  ™ ]{|| � ]{|| * ?

‹ " Z "&& ]{|| Â? " * " › ? = "&& Relevant Important Positions – >ƒ"? " ?  – "&& = " " ? Â

PTT

PTT Public Company Limited

Annual Report 2011

Executives

Mr. Prasert Bunsumpun

< } ]{|| Age 59

Dr. Pailin Chuchottaworn

< |{ ]{|| Age 55

(%) Share Possession / 0.000426 Educations “ Z = ~? =

€ ? ‹ & “ J Z ‹ ‹ ‹ “ < – =

? ‹ & “ < – J ‚ > – ~‚>– € & “ < – J

" ƒ # ‹ & “ < – J J ‹ & “ < – "  > J

“ ƒ # ‹ & CertiďŹ cations “ & ™ Â?" ?

‚ – ?

~? |{ € & “ J " < Z ‹ “ < ? – " = " ~? ^ € ' " # > & “ ? J  " ~? Â… € & “ & > – ~> –€ – " ]^ž]{{[ Work Experiences ]{{| Â? ]{{Â… * = š " Z "&& ]{{Â… Â? ]{{` * " "&& ]{{` Â? ]{|| * " ? = "&& ]{{^ Â? ]{{` * J ‚ ]{{` Â? ]{|| * ? "&& = " " ?  Relevant Important Positions “ ? "&& ? " ?  “ ? >ƒ"? " ?  “ – ' & Z " ?  “ – ? " ? Â

(%) Share Possession / 0.000217 Educations “ Z = ~? =

€ ~< € ? ‹ & “ J =

? =

& > & ™ “ – =

? =

& > & ™ CertiďŹ cations “ "&& =  " ž = ?

‹ “ ‚>– �+ =  " & + ‹ " ‹ “ >  " ~> "€ ]{{_ ž J > & ‹ “ & ™ � " ?

‚ – ?

~? ]] € & “ & > – ~> –€ – " ][ž]{{[ –?" _|ž]{{[ ‰‚– |[ž]{{[ Work Experiences ]{{^ Â? ]{{` * = š " " › ƒ Z ‹ "&& " "&& ? ?  ]{{` Â? ]{{} * = š " " › ƒ Z ‹ "&& " "&& " J ?  "&& ? ?  ]{{} Â? ™ ]{|| * = š " "&& " >ƒ"? " ?  ™ ]{|| Â? ]{|| * ? ‹ " Z "&& ]{|| Â? " * " › ? = "&& Relevant Important Positions “ – Z "&& " ?  “ – >ƒ"? " ?  “ – "&& = " " ? Â

PTT Public Company Limited

Mr. Tevin Vongvanich

Age 53

Mr. Wichai Pornkeratiwat

Upstream Petroleum and Gas Business Group Age 58

Annual Report 2011

(%) Share Possession / 0.000196 Educations “ Z = ~? =

€ ~< € ? ‹ & “ J ~? =

€ ƒ ‹ ‹ “ J ~" =

€ ‹ < ‹ CertiďŹ cations “ "  ~"  Â€ < Z ‹ “ – " < Â? " ~? |{ € ' " # Q >

& “ = " ~ ="€ ~? \ € > Z ? ‹ & “ ? J  " ~? ^ € & “ & ™ " ?

‚ – ?

~? ]] € & “ & > – ~> –€ –?" ]|ž]{{] ‰ – ^ž]{{} ƒ?? |…ž]{|| Work Experiences ]{{` Â? ]{{} * š " "&& = › " " ?  ~"&&="€ = š " ? › – "&& ]{{} Â? ]{|{ * ? ‰ = š " ? "&& ]{|{ Â? " * ? ‰ "&& Relevant Important Positions “ – "&& = " " ?  “ – & " ? Â

(%) Share Possession / 0.000195 Educations “ Z = ~= =

€ ' ' ‹ & “ J " ‚ > – ~‚>– € & CertiďŹ cations “ = " ~ ="€ = J – >

“ = " ~ ="€ > Z ? ‹ & “ ‚>– �+ =  " & + ‹ " ‹ “ & > – ~> –€ –?" |||ž]{{` Work Experiences ]{{] � ]{{` * = š " " # J =

" Z "&& ]{{` � ]{{} * = š " "&& " "&&  ‚ ?  ]{{} � ]{|{ * = š " ‚ š

"&& ]{|{ � ]{|| * = š " Z ‹ "&& ]{|| � " * ? ‹ " Z "&& Relevant Important Positions “ ? "&&  ‚ ?  “ ? "&&

= "  “ – >ƒ"? " ? Â

PTT Public Company Limited

Mr. Nuttachat Charuchinda

Downstream Petroleum Business Group Age 56

Mr. Supattanapong Punmeechaow Senior Executive Vice President, Corporate Strategy Age 52

Annual Report 2011

(%) Share Possession / 0.000061 Educations “ Z = ~? =

€ ? J ‹ & “ J Z & ‹ & CertiďŹ cations “ "  ~"  Â€ < Z ‹ “ = ‹' “ Z & " = ~Z" =€ >J– >

’ “ & ™ �" ?

‚ – ?

~? ]{ € & “ & > – ~> –€ –?" |]}ž]{|{ Work Experiences ]{{[ � ]{{_ * = š "  "&& ]{{_ � ]{{} * = š " ‚ š

"&& ]{{} Â? ]{|{ * = š " > & Z ‹ "&& ]{|{ Â? ]{|| * = š " ? "&& ]{|| Â? " * ? – " Z "&& Relevant Important Positions “ – Z " " ?  “ – Z ‰ " ?  “ – "&& ? " ? Â

(%) Share Possession / 0.000035 Educations “ Z –

? =

? ‹ & “ J –

Z

? ‹ & CertiďŹ cations “ J " >‚ = – ‹ ‰

“ & ™ �" ?

‚ – ?

~? _{]{€ & “ & > – ~> –€ –?" |Â…|ž]{|{ Work Experiences |}}` Â? ]{{_ * J – ?Z ?  ]{{^ Â? ]{{` * J – ?Z ?  ]{{} Â? ]{|| * = š " Z – "&& > ?  = š " ? "&& ]{||Â?" * = š " ? "&& Relevant Important Positions “ – "&& > ? Â

PTT Public Company Limited

Mr. Pitipan Tepartimargorn Senior Executive Vice President, Human Resources & Organization Excellence Age 55

Mr. Peerapong Achariyacheevin Senior Executive Vice President, Gas Business Unit Age 59

Annual Report 2011

(%) Share Possession / 0.000029 Educations “ Z = ' J Q > &  & “ J " ~" € & ‹ & CertiďŹ cations “ < ƒ J " < ‹ ‹ “ ‚>– Â?+ =  " & + ‹ " ‹ “ = " ~ ="€ > Z ? ‹ & “ & > – ~> –€ –?" |Â…`ž]{|{ Work Experiences ]{{| Â? ]{{Â… * š " ? – "&& ]{{Â… Â? ]{{[ * š " < ƒ " "&& ]{{[ Â? ]{|{ * = š " < ƒ "&& ]{|{ Â? " * = š " < ƒ › Â’ =

"&& Relevant Important Positions “ – Z " " ?  “ ? = ? ?  “ – "&& >?& ? Â

(%) Share Possession / 0.000376 Educations “ Z > =

' J Q ‹ & & & “ J Z Z ‹ & CertiďŹ cations “ = " ~ ="€ > Z ? ‹ & “ "  = ' " # Q >

& “ & > – ~> –€ –?" `{ž]{{^ ‹‰ ]ž]{{^ Work Experiences ]{{| Â? ]{{Â… * š " ‚ – – ]{{Â… Â? ]{{} * = š " ‚ & ]{{} Â? ]{|| * = š " ‚ " ]{|| Â? " * = š " Z ‹ Relevant Important Positions “ ? "&& ‹ ?  “ – "&& > ? Â

PTT Public Company Limited

Mr. Sarun Rungkasiri Senior Executive Vice President, Oil Business Unit Age 54

Mr. Sukrit Surabotsopon Senior Executive Vice President,

Business Unit Age 53

Annual Report 2011

(%) Share Possession / 0.000153 Educations ย Z = ~> =

ย ? ย & ย J J " > ย ยง ย Certi๏ฌ cations ย ย >ย ย + = ย " ]{{} & + ย " ย ย & ย ย " ?

ย ย ?

~? ]ย ย & ย & > ย ~> ย ย ? " `ย ]{{[ ย ?" ^|ย ]{{_ ย ย ย |}ย ]{{_ Work Experiences ]{{ย ย ]{{_ * ย " " ]{{^ ย ]{{\ * ย " ? " ย ]{{` ย ]{{} * = ย " ? ? ย ย ]{{} ย ]{|{ * = ย " ? ย > J ]{|{ ย ]{|| * = ย " ย J ]{|| ย " * = ย " Z ย Relevant Important Positions ย ย & Z ? ย ย ย "&& ย J ? ย ย ย & " " ? ย

(%) Share Possession / 0.000007 Educations ย ? =

? ย & Certi๏ฌ cations ย & ย ? &ย ? = ย " ~=ย "ย ย & > ย ~> ย ย ย ?" |ย ]ย ]{|{ Work Experiences ]{{\ ย ]{{` * J ย ย Z & " ? ย ~& "ย ]{{` ย ]{{} * J ย ย " ย Z ย & " ]{{} ย ]{|{ * = ย " " ย J " ย ย Z ย "&& ]{|{ ย " * = ย " ย " ย ย Z ย "&& Relevant Important Positions ย ย "&& ? " ? ย ย ย " ย ? ย ย ย "&& > ? ย

PTT Public Company Limited

Mr. Sarakorn Kulatham Senior Executive Vice President, International Trading Business Unit Age 57

Mr. Anon Sirisaengtaksin

PTT Exploration and Production Public Company Limited Age 59

Annual Report 2011

(%) Share Possession / 0.000236 Educations “ Z = ? ‹ & “ J ~ € ? =

‹ J ‹ CertiďŹ cations “  " >J– >

“ ‚>– Â?+ =  " & + ‹ " ‹ Work Experiences ]{{_ Â? ]{{^ * = š " "&& " J ƒ ?  ]{{^ Â? ]{{\ * = š " "&& – ?= Â? " " ƒ ?  ]{{\ Â? ]{{` * = š " > & Z ‹ "&& ]{{` Â? " * = š " > & Z ‹ "&& Relevant Important Positions “ – Z " " ?  “ ? "&& > & " “ – " ƒ ? Â

(%) Share Possession / 0.000496 Educations “ Z ~ € ? ‹ & “ J Z & ‹ & “ < – " Z & ‹ & CertiďŹ cations “ " # > J  < ‹ ‹ “ ? J  " ~? | € & “ & > – ~> –€ – " _]ž]{{^  Z" |ž]{|| ƒÂ?? ? |ž]{|| Work Experiences ]{{] Â? ]{{` * = š " ? – "&& ]{{` Â? ]{|{ * = š " "&& ? = "&& = " " ?  ]{|{ Â? " * = š " "&& " › ?= "&& = " " ?  Relevant Important Positions “ – Z "&& = " " ?  Â“ – "&& ‰ Â‚ Â

PTT Public Company Limited

Mr. Veerasak Kositpaisal

PTT Global Chemical Public Company Limited Age 57

Mr. Bowon Vongsinudom President, PTT Global Chemical Public Company Limited Age 57

Annual Report 2011

(%) Share Possession / 0.000110 Educations “ Z = ~J € ? ‹ & “ J ~J =

€ & ›> ‹ ‹ CertiďŹ cations “ & = " ? & ~&="? &€ ]ž]{{} “ ? J  " ~? || € “ & > – ~> –€ –?" `]ž]{{^ ‰‚– Â…{ž]{{^ Work Experience ]{{^ Â? ]{{` * = š " "&& = š " & Z "&& ? " ?  ~"&&?<€ J – Z " " ?  ]{{` Â? ]{{` * = š " "&& = š " " " Z ‹ "&&?< ]{{` Â? ]{{} * = š " "&& " "&&?< ]{{} Â? ]{|| * = š " "&& " "&&?< ]{|| Â? " * = š " "&& ? = "&& ? " ?  Relevant Important Positions “ – Z "&& ? " ?  Â“ ? "&& " ?  Â“ – "&& " J ? Â

(%) Share Possession / 0.000042 Educations “ Z = ~? =

€ ? ‹ & “ J =

? =

? ‹ & “ J Z ~J € > Z & CertiďŹ cations “ & ™ Â? " ?

‚ – ?

~? |\ € & “ & > – ~> –€ – " \^ž]{{` Work Experience ]{{_ Â? ]{{^ * š " " ÂŁ & " ?  ]{{^ Â? ]{{\ * = š " "&& " ƒ ƒ " ?  ]{{\ Â? ]{{} * " ƒ ?  ~ ƒ?€ ]{{} Â? ]{|{ * = š " "&& ƒ " ?  ~"&& ƒ€ ]{|{ Â? ]{|| * = š " "&& " › ?= "&& ƒ ]{|| Â? " * = š " "&& " "&& ? " ?  Relevant Important Positions “ – "&& ? " ?  “ – "&& " ? Â

PTT Public Company Limited

Mr. Surong Bulakul

Thaioil Public Company Limited Age 55

Mr. Suwanunt Chatiudompunth President, PTT Phenol Company Limited Age 59

Annual Report 2011

(%) Share Possession / 0.000414 Educations ย Z > =

ย ย ย ยง ย ย J =

ย > =

? ย ย ยง ย ย J Z ? ย ย ยง ย Certi๏ฌ cations ย "Jย < ย Z ย ย ย " < ย ย " ~? ` ย ' " # Q >

& ย & ย ย " ?

ย ย ?

~? [}|}ย & ย ? J ย " ~? |{ ย & ย & > ย ~> ย ย ย ? " |]|ย ]{{} ย ย |ย ]{|| Work Experiences ]{{_ ย ]{{` * = ย " > & "&& ]{{` ย ]{{} * = ย " > & "&& ]{{} ย " * = ย " "&& ? = & " ? ย Relevant Important Positions ย ย Z & " ? ย ย ? > " ~& ย ? ย ย ? & " ? ย

(%) Share Possession / 0.000112 Educations ย Z = ~? =

ย ' ' ย & ย J ~J ย " =

ย J > J & ~Jย >ย &ย ย Certi๏ฌ cations ย &

> * ย " ย = " ~ ="ย ~? |[ ย > Z ย ? ย & ย " ย = ' " # Q >

& Work Experiences ]{{| ย ]{{] * ย " ย & ]{{] ย ]{{} * = ย " ย " ]{{} ย ]{|| * = ย " "&& + " "&& " ? ย ]{|| ย " * = ย " "&& + " "&& " ? ย Relevant Important Positions ย ย "&& " ? ย ย ย <J? " ? ย ย ย "&& J =

? ย

PTT Public Company Limited

Mr. Atikom Terbsiri President, IRPC Public Company Limited Age 49

Annual Report 2011

(%) Share Possession / None Educations “ Z Z ‹ & “ J Z ~‰ › > Z € < – ‹ Z ? ‹ CertiďŹ cations “ – ? < ƒ J J =

‹ ‰ ? ‹ “ = = " < Z < ‹ ‹ “ "&& =š"  – " � "&& " ?  – – > ~––>€ “ & > – ~> –€ –?" |]_ž]{{} Work Experiences ]{{] � ]{{\ * = š " Z › ‰

& ~& € " ?  ]{{\ � ]{{} * = š " ? › ?

"&& ƒ " ?  ~"&& ƒ€ ]{{} � ]{|| * = š " ? › "

= š " " › J Z ‹ >ƒ"? " ?  " * = š " "&& " >ƒ"? " ?  Relevant Important Positions “ – Z >ƒ"? " ? Â

PTT Public Company Limited

Annual Report 2011

Positions held by the Management and Authorized Controllers of PTT Plc., Subsidiaries, Associates, and Related Companies As of December 31, 2011

PTT Executive

Company

"&& "

Associated and Related Companies

Subsidiaries

E&P

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"&& = " " "&& ‚ – ?  "&&  ‚ ?  ? < " " ?  "&& ~? € ?  "&& ƒ Z ?  Z = ?  "&&

= "  Z ?  &  Z ?  "&& " J ?  "&& "  ?  "&& & & ?  "&& > & " = ? ?  "&& > ?  "&& ‹ ?  & " ?  > " ~& € ?  & & �J ~& € ?  & & �J ~J € ?  – ? " " ?  ƒ " ?  Z "  ‚ ‚ = ?  Z � ? ?  & " " ?  " ~& € ?  Z ‰ " > ?  ‰ " & ?  š  " ?  ' �"&&  " Z " ~< ’ € ?  " ~J € ?  " ~ € ?  "&& ? " "&& " ?  " ƒ ?  & " Z " " >ƒ"? " <J? " ?  "&& ? ?  "&& J =

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

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Awards

PTT Public Company Limited

Annual Report 2011

of Success

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PTT Public Company Limited

Annual Report 2011

Award/ Ranking/ Criteria

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PTT Public Company Limited

Award/ Ranking/ Criteria

Annual Report 2011

Presented by

& Z – ]{|| " > ?  & …] Z > J Date ]{|| ]{|| “ "&&Q !&  > $

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PTT Public Company Limited

Annual Report 2011

Award/ Ranking/ Criteria

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J " Z J Â…^{Âą J Â’

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PTT Public Company Limited

Award/ Ranking/ Criteria

Annual Report 2011

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& Z ]{|| ย Q ย ย & Q & Z ย " Date J ย | ]{|| ย & Q & Z ย -NSDR 1DEDQDMBD "QHSDQH@

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ย ย Z < + = * ย & " & ~"&ย |_ ย ย "& |] ย " & ~ &ย || ย " ' & ? J & " " & ย "& ย ย ' & " & |{ ย ย & & } ย ย ย & ' ' "& ` ย ' Z ยง & Z ย " ย " & "& \

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PTT Public Company Limited

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PTT Public Company Limited 555 Vibhavadi Rangsit Rd., Chatuchak, Bangkok 10900, Thailand Tel. 66 (0) 2537-2000 www.pttplc.com

PTT Public Company Limited

STABILITY = SUSTAINABILITY

Annual Report 2011 ( Financial Report )

Annual Report 2011 ( Financial Report )

PTT Public Company Limited

STABILITY

SUSTAINABILITY

CONTENTS 002

049

Report of Board of Directors’ Responsibilities for the Financial Reporting

050

STATEMENTS OF COMPREHENSIVE INCOME

009

098

015

143

109

048

Other Accounts Receivable

115

Advance Payments for Gas Purchases

116

Other Non-current Assets

Effect from Floods

Other Income

146

109

Income Taxes and Deferred Taxes

171

145

Goodwill

Cash and Cash Equivalents

047

Sales and Service Income

Mining Properties

046

Proceeding regarding the Offshore Natural Gas Pipeline Leakage Incident

144

108

016

171

Share-based Payment

106

Accounting Policies

138

Earnings per Share

Basis of Financial Statements Intangible Assets Preparation

Trade Accounts Receivable

138

Property, Plant and Equipment

015

170

Proceeding regarding the Central Administrative Court’s Ordering the Temporary Suspension of Projects in the Map Ta Phut Area

Reserves

103

Expenses by Nature

147

Petroleum Royalties and Remuneration

147

Shares of Net Income from Investments in Associates

167

Reclassification

167

137

Investment Properties

163

Business Acquisition

Promotional Privileges

Share Capital

101

General Information

Current Investments

136

Other Non-current Liabilities

Other Long-term Investments

NOTES TO FINANCIAL STATEMENTS

046

Provision for Decommissioning Costs

Available-for-sale Investments

011

162

Dividend Payment

135

095

STATEMENTS OF CHANGES IN EQUITY STATEMENTS OF CASH FLOWS

133

Employee Benefit Obligations

060

Investments in ubsidiaries, Jointly Controlled Entities and Associates

008

Disclosure of Financial Instruments

Long-term Loans

Materials and Supplies

STATEMENTS OF INCOME

155

118

059

007

148

Segment Information

117

Inventories

STATEMENTS OF FINANCIAL POSITION

Finance Costs

Other Current Liabilities

059

004

148

Bank Overdrafts and Short-term Loans from Financial Institutions

Related Party Transactions

003

AUDITOR’S REPORT

117

Loans

172

Commitments and Contingent Liabilities

175

Events after the Financial Statement Date

176

Audit Fee of the Auditors

Financial Report PTT Public Company Limited

002

PTT Public Company Limited   Financial Report

Report of Board of Directors’

Responsibilities for the Financial Reporting

To Shareholders, The Board of Directors is responsible for the financial statements of PTT Public Company Limited and its subsidiaries. The aforementioned financial statements are prepared in accordance with generally accepted accounting principles. The financial statements are prepared under appropriated accounting policies and applied consistently by using careful judgment and the best estimation. Important information is adequately and transparently disclosed in the notes to financial statements for the Company’s shareholders and investors. The Board of Directors provides good corporate governance and maintains the risk management system and internal controls to ensure that accounting records are accurate, reliable, timely and adequate to protect the Company’s assets as well as to prevent fraud and significant irregular operations. The Board of Directors has appointed an Audit Committee comprising independent directors to be responsible for reviewing the reliability and correctness of financial reports as well as evaluating the effectiveness of internal control system and internal audit. The audit committee’s comments on these issues are presented in the audit committee report included in this annual report. The Board of Directors considers that the internal control system and the internal audit of the Company provide credibility and reliability to the financial statements of PTT Public Company Limited and its subsidiaries for the year ended December 31, 2011. The Board of Directors also believes that the financial position, financial results and cash flows, audited by the independent auditors (The Office of Auditor General of Thailand), are fairly presented in all material respects with generally accepted principles. The auditors’ opinion is presented in the auditors’ report as part of this annual report.

Mr. Norkun Sitthiphong Chairman of the Board

Mr. Pailin Chuchottaworn President & CEO

003

PTT Public Company Limited   Financial Report

AUDITOR’S

REPORT

TO: THE SHAREHOLDERS OF PTT PUBLIC COMPANY LIMITED The Office of the Auditor General of Thailand has audited the accompanying consolidated statements of financial position of PTT Public Company Limited and its subsidiaries and the separate statements of financial position of PTT Public Company Limited as at December 31, 2011 and 2010, the related consolidated and the separate statements of income, comprehensive income, changes in equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. The responsibility of the Office of the Auditor General of Thailand is to express an opinion on these financial statements based on the audits. The Office of the Auditor General of Thailand does not audited the financial statements of some subsidiaries, some jointly controlled entities arising from joint investing between PTT Public Company Limited and other companies, and some jointly controlled entities arising from joint investing between subsidiaries and other companies, included in the consolidated financial statements. As at December 31, 2011, assets and liabilities of the above subsidiaries and jointly controlled entities included in the consolidated financial statements constitute 28.86% and 13.78% and as at December 31, 2010 constitute 34.64% and 33.80%, respectively. The financial statements of those subsidiaries and jointly controlled entities were audited by other auditors whose reports have been furnished to the Auditor General of Thailand and the report of the Auditor General of Thailand, insofar as it relates to the amounts included for those subsidiaries and jointly controlled entities, is based solely on the reports of the other auditors. The Office of the Auditor General of Thailand conducted the audits in accordance with generally accepted auditing standards. Those standards require the Office of the Auditor General of Thailand to 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. The audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. The Office of the Auditor General of Thailand believes that the audits together with other auditors’ reports as aforementioned provide a reasonable basis for the opinion. In the opinion of the Office of the Auditor General of Thailand based on the audits and the other auditors’ reports, the consolidated and the separate financial statements referred to above present fairly, in all material respects, the consolidated and the separate financial position of PTT Public Company Limited and its subsidiaries and of PTT Public Company Limited as at December 31, 2011 and 2010, and the results of operations, and the cash flows for the years then ended in accordance with generally accepted accounting principles.

Office of the Auditor General February 17, 2012

Poungchomnad Jariyajinda Inspector General 1

Doungporn Muennuch Director of Audit Office

004

PTT Public Company Limited   Financial Report

STATEMENTS OF FINANCIAL POSITION

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

Notes

2011

2010

Separate financial statements 2011

(Restated) Assets Current assets Cash and cash equivalents Current investments Trade accounts receivable Other accounts receivable Short-term loans Inventories Materials and supplies Other current assets Total current assets Non-current assets Available-for-sale investments Investments in associates Investments in subsidiaries Investments in jointly controlled entities Other long-term investments Long-term loans Investment properties Property, plant and equipment Intangible assets Mining properties Goodwill Deferred tax assets Advance payments for gas purchases Other non-current assets Total non-current assets Total assets

2010

(Restated)

4 5 6 7 8.1 10 11

116,132,054,671 10,961,666,994 171,361,544,041 32,624,731,771 4,999,170,504 26,000,290,599 13,201,578,538 5,876,128,182 381,157,165,300

135,801,048,833 21,783,590,159 140,348,479,080 18,804,908,690 284,032,738 31,230,659,162 11,102,529,042 4,578,233,175 363,933,480,879

51,340,612,291 9,758,576,305 157,057,537,383 16,744,092,815 5,540,512,739 18,862,996,073 4,111,583,529 1,484,676,958 264,900,588,093

61,311,017,827 20,891,870,129 148,173,632,772 12,009,417,091 674,885,032 8,607,545,552 3,494,039,418 1,174,673,374 256,337,081,195

13 12.3, 12.4 12.4 12.4 14 8.2 15 16 17 18 19 20 21 22

11,680,416,176 227,732,639,043 1,749,852,705 145,763,221 8,345,289,339 601,341,407,271 52,613,777,875 33,914,479,701 28,347,704,751 19,318,398,602 7,346,227,917 28,718,969,821 1,021,254,926,422 1,402,412,091,722

13,590,595,650 205,062,693,918 2,179,358,395 5,878,369,498 8,731,933,121 496,660,664,858 20,712,453,922 32,699,297,892 17,541,828,888 16,446,488,959 8,304,595,071 37,367,434,624 865,175,714,796 1,229,109,195,675

11,421,510,900 120,212,474,472 73,278,181,513 22,739,274,827 1,106,117,996 52,837,646,611 5,099,303,532 219,160,024,975 13,865,968,171 1,807,794,853 8,495,573,306 20,763,637,935 550,787,509,091 815,688,097,184

13,223,299,213 115,259,730,449 45,045,196,213 22,067,622,412 1,106,117,996 55,426,744,308 5,139,507,150 212,981,478,144 13,996,271,502 1,974,175,624 9,743,471,589 19,957,960,064 515,921,574,664 772,258,655,859

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

005

PTT Public Company Limited   Financial Report

STATEMENTS OF FINANCIAL POSITION

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

Notes

2011

2010

Separate financial statements 2011

(Restated) Liabilities and Shareholders’ Equity Current liabilities Bank overdrafts and short-term loans from financial institutions Trade accounts payable Other accounts payable Current portion of long-term loans Short-term loans Income tax payable Accrued expenses Short-term provision for decommissioning costs Other current liabilities Total current liabilities Non-current liabilities Other long-term accounts payable Long-term loans Deferred tax liabilities Employee benefit obligations Long-term provision for decom missioning costs Deposits on LPG cylinders Other non-current liabilities Total non-current liabilities Total liabilities

23

2010

(Restated)

15,520,544,127 164,300,728,974 13,392,300,878 54,978,794,837 26,355,835,574 54,062,657,595

8,593,725,864 137,222,313,887 12,027,384,223 28,562,271,813 7,944,914,750 27,038,394,342 39,589,099,070

162,392,716,091 8,553,489,060 30,472,118,302 6,094,303,584 16,058,355,234

136,189,250,949 8,526,872,277 27,195,263,165 2,564,782,400 4,097,666,956 17,194,328,688

27 24

2,312,666,525 4,592,374,625 335,515,903,135

3,753,368,515 4,932,573,049 269,664,045,513

3,510,666,798 227,081,649,069

3,178,600,890 198,946,765,325

9.6 25 20 26

671,712,624 337,423,813,560 43,174,141,915 5,500,054,851

705,231,528 342,466,775,251 19,850,537,675 5,147,726,740

685,031,224 213,299,643,983 4,961,286,309 2,387,397,715

719,431,654 239,630,439,808 6,319,413,316 2,314,495,558

27

22,628,852,001 6,567,504,468 6,981,535,136 422,947,614,555 758,463,517,690

22,151,780,423 6,038,460,073 5,670,773,882 402,031,285,572 671,695,331,085

6,567,504,468 5,022,246,647 232,923,110,346 460,004,759,415

6,038,460,073 4,522,605,533 259,544,845,942 458,491,611,267

25

28

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

006

PTT Public Company Limited   Financial Report

STATEMENTS OF FINANCIAL POSITION

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AS AT DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

Notes

2011

2010

Separate financial statements 2011

(Restated) Liabilities and Shareholders’ Equity (Continued) Shareholders’ equity Share capital Authorized share capital 2,857,245,725 ordinary shares of Baht 10 each Issued and paid-up share capital 2,856,299,625 ordinary shares of Baht 10 each 2,849,042,025 ordinary shares of Baht 10 each Premium on ordinary shares Retained earnings Appropriated Legal reserve Reserve for self-insurance fund Unappropriated Other components of equity Total equity attributable to equity holders of the Company Non-controlling interests Total shareholders’ equity Total liabilities and shareholders’ equity

Pailin Chuchottaworn President & Chief Executive Officer

2010

(Restated)

29.1

28,572,457,250

28,572,457,250

28,572,457,250

28,572,457,250

29.2

28,562,996,250

-

28,562,996,250

-

29.2 29.2

29,211,131,966

28,490,420,250 27,585,429,566

29,211,131,966

28,490,420,250 27,585,429,566

30.1 30.2

2,857,245,725 1,034,861,938 500,929,192,499 (6,675,214,432)

2,857,245,725 1,005,090,857 428,455,273,592 (7,689,623,648)

2,857,245,725 1,034,861,938 290,592,601,966 3,424,499,924

2,857,245,725 1,005,090,857 249,981,088,941 3,847,769,253

555,920,213,946 88,028,360,086 643,948,574,032 1,402,412,091,722

480,703,836,342 76,710,028,248 557,413,864,590 1,229,109,195,675

355,683,337,769 355,683,337,769 815,688,097,184

313,767,044,592 313,767,044,592 772,258,655,859

Tevin Vongvanich Chief Financial Officer

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

007

PTT Public Company Limited   Financial Report

STATEMENTS OF INCOME

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

Sales and service income Cost of sales and services Gross margin Other income Income before expenses Selling expenses Administrative expenses Executive remunerations Petroleum exploration expenses Petroleum royalties and remuneration Other expenses (Gain) Loss on foreign exchange Operating income Share of income from investments in associates Income before finance costs & income taxes Finance costs Income before income taxes Income taxes Income for the years

Notes

33 35 34 35 35 9.10 36

37 38 20

Attributable to: Equity holders of the Company Non-controlling interests

2011

2010

Separate financial statements 2011

2010

2,428,164,676,896 2,208,895,705,623 219,268,971,273 16,601,460,342 235,870,431,615 10,439,160,482 33,911,360,845 655,802,601 6,615,168,228 22,029,599,601 6,449,546,687 (1,265,813,247) 157,035,606,418 29,462,624,212 186,498,230,630 18,041,630,293 168,456,600,337 43,230,615,079 125,225,985,258

(Restated) 1,898,682,172,970 1,724,780,052,269 173,902,120,701 13,025,889,809 186,928,010,510 11,267,895,665 24,670,338,542 709,394,643 2,721,147,164 18,540,069,013 1,929,057,976 (6,361,927,258) 133,452,034,765 18,815,955,242 152,267,990,007 16,803,230,182 135,464,759,825 33,960,537,180 101,504,222,645

2,197,555,053,912 2,118,188,516,700 79,366,537,212 38,950,511,050 118,317,048,262 9,187,616,934 19,743,394,464 125,084,349 46,342,898 (1,289,377,071) 90,503,986,688 90,503,986,688 12,742,469,877 77,761,516,811 4,327,513,869 73,434,002,942

(Restated) 1,758,750,604,497 1,693,959,981,330 64,790,623,167 31,041,296,773 95,831,919,940 10,165,329,770 15,408,631,266 123,124,356 (9,234,428,110) 79,369,262,658 79,369,262,658 12,243,203,492 67,126,059,166 12,668,784,343 54,457,274,823

105,296,408,824 19,929,576,434 125,225,985,258

83,992,053,512 17,512,169,133 101,504,222,645

73,434,002,942 73,434,002,942

54,457,274,823 54,457,274,823

Basic earnings per share

31

36.91

29.58

25.74

19.18

Diluted earnings per share

31

36.89

29.50

25.73

19.16

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

008

PTT Public Company Limited   Financial Report

STATEMENTS OF

COMPREHENSIVE INCOME

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

Income for the years Other comprehensive income (loss): Unrealized gain (loss) on available-for-sale investments Income taxes related to unrealized gain (loss) on available-for-sale investments Currency translation differences Share of other comprehensive gain (loss) of associates Other comprehensive income (loss), net of income taxes Total comprehensive income for the years Attributable to: Equity holders of the Company Non-controlling interests

2011

2010

Separate financial statements 2011

2010

125,225,985,258

(Restated) 101,504,222,645

73,434,002,942

(Restated) 54,457,274,823

(1,282,620,467)

3,895,745,465

(1,216,188,313)

3,849,126,090

792,918,984 9,467,735,552 6,085,576,668 15,063,610,737 140,289,595,995

(1,154,737,827) (17,416,127,502) (211,636,280) (14,886,756,144) 86,617,466,501

792,918,984 (423,269,329) 73,010,733,613

(1,154,737,827) 2,694,388,263 57,151,663,086

117,259,091,650 23,030,504,345 140,289,595,995

75,743,268,526 10,874,197,975 86,617,466,501

73,010,733,613 73,010,733,613

57,151,663,086 57,151,663,086

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

29.2 30.2 41

3.2.1

30.2

3.2.1

Notes

Premium on share capital Legal reserve

-

-

(10,948,273,610) (10,090,941,546)

29,771,081 (29,771,081) - (32,792,718,836)

- 105,296,408,824 6,370,840,313 (493,734,155) 6,085,576,668 28,562,996,250 29,211,131,966 2,857,245,725 1,034,861,938 500,929,192,499 (9,418,416,748) 3,400,641,676 9,433,502,186

-

(6,462,080) 857,332,064

863,794,144

-

1,625,702,400 -

(17,376,845) 3,347,925,518

3,365,302,363

253,182,209 857,332,064

-

604,149,855

604,149,855

-

72,576,000 -

- 3,014,081,662 (13,211,458,675) 28,490,420,250 27,585,429,566 2,857,245,725 1,005,090,857 428,455,273,592 (15,789,257,061) 3,894,375,831

28,490,420,250 27,585,429,566 2,857,245,725 1,005,090,857 425,441,191,930 (2,577,798,386) 3,894,375,831

(211,636,280) 3,347,925,518

16,477,753 (16,477,753) - (26,251,394,179)

3,559,561,798

- 83,992,053,512 (10,778,156,344) 2,741,007,638 28,490,420,250 27,585,429,566 2,857,245,725 1,005,090,857 428,455,273,592 (15,789,257,061) 3,894,375,831

-

- 2,109,747,451 (3,516,237,638) 988,613,104 370,731,092,012 (5,011,100,717) 1,153,368,193

3,559,561,798

-

3,032,756,600 -

Availablefor-sale investments

-

152,572,000 -

28,337,848,250 24,552,672,966 2,857,245,725

Currency translation differences

Share of other comprehensive gain (loss) in associates

Surplus (Deficit) from the change in the ownership interests in subsidiaries

Other components of equity Other comprehensive income (loss)

988,613,104 368,621,344,561 (1,494,863,079) 1,153,368,193

Reserve for self-insurance fund Unappropriated

Retained earnings

Total equity attributable to equity holders of the Company

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

28,337,848,250 24,552,672,966 2,857,245,725

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

Balance as at January 1, 2011 Cumulative effect of the changes in accounting policies Balance after adjustment Changes in equity for the year 2011 Increase in share capital Reserve for self-insurance fund Dividend Surplus (Deficit) from the change in the ownership interests in subsidiaries Business acquisitions Total comprehensive net income (loss) for the year Balance as at December 31, 2011

Balance as at January 1, 2010 Cumulative effect of the changes in accounting policies Balance after adjustment Changes in equity for the year 2010 Increase in share capital Reserve for self-insurance fund Dividend Surplus (Deficit) from the change in the ownership interests in subsidiaries Business acquisitions Total comprehensive income (loss) for the year Balance as at December 31, 2010

Unit: Baht

Issued and paid-up share capital

STATEMENTS OF CHANGES IN EQUITY

Total equity

68,910,650,673 498,090,592,046

Non-controlling interests

80,387,522,064 571,312,574,344

(674,209) 252,508,000 328,654,803 328,654,803 10,874,197,975 86,617,466,501 76,710,028,248 557,413,864,590

403,150,400 3,588,479,000 (4,599,680,415) (30,851,074,594)

317,046,472 2,015,324,872 (7,835,089,926) (40,627,808,762) (10,948,273,610) (10,948,273,610) 120,275,706 (10,827,997,904) - (4,314,404,759) (4,314,404,759) 11,962,682,826 117,259,091,650 23,030,504,345 140,289,595,995 (6,675,214,432) 555,920,213,946 88,028,360,086 643,948,574,032

1,698,278,400 - (32,792,718,836)

(13,235,297,600) (10,221,215,938) (3,677,493,816) (13,898,709,754) (7,689,623,648) 480,703,836,342 76,710,028,248 557,413,864,590

5,545,673,952 490,925,052,280

253,182,209 253,182,209 (8,248,784,986) 75,743,268,526 (7,689,623,648) 480,703,836,342

3,185,328,600 - (26,251,394,179)

(3,516,237,638) (1,406,490,187) 793,729,021 (612,761,166) 305,979,129 427,773,451,186 69,704,379,694 497,477,830,880

3,822,216,767 429,179,941,373

Total equity Total other attributable to components of equity holders of equity the Company

CONSOLIDATED FINANCIAL STATEMENTS

PTT Public Company Limited   Financial Report 009

29.2 30.2 41

3.2.1

30.2

3.2.1

Notes

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

Balance as at January 1, 2011 Cumulative effect of the changes in accounting policies Balance after adjustment Changes in equity for the year 2011 Increase in share capital Reserve for self-insurance fund Dividend paid Total comprehensive income (loss) for the year Balance as at December 31, 2011

Balance as at January 1, 2010 Cumulative effect of the changes in accounting policies Balance after adjustment Changes in equity for the year 2010 Increase in share capital Reserve for self-insurance fund Dividend Total comprehensive income (loss) for the year Balance as at December 31, 2010

Unit: Baht

STATEMENTS OF CHANGES IN EQUITY

72,576,000 28,562,996,250

1,625,702,400 29,211,131,966

27,585,429,566 27,585,429,566

3,032,756,600 27,585,429,566

152,572,000 28,490,420,250 28,490,420,250 28,490,420,250

24,552,672,966 24,552,672,966

Premium on share capital

28,337,848,250 28,337,848,250

Issued and paid-up share capital

2,857,245,725

2,857,245,725 2,857,245,725

2,857,245,725

2,857,245,725 2,857,245,725

Legal reserve

29,771,081 1,034,861,938

1,005,090,857 1,005,090,857

16,477,753 1,005,090,857

988,613,104 988,613,104

Reserve for selfinsurance fund

Retained earnings

Total equity attributable to equity holders of the Company

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

(29,771,081) (32,792,718,836) 73,434,002,942 290,592,601,966

251,597,216,474 (1,616,127,533) 249,981,088,941

(16,477,753) (26,251,394,179) 54,457,274,823 249,981,088,941

223,288,146,422 (1,496,460,372) 221,791,686,050

Unappropriated

(423,269,329) 3,424,499,924

3,847,769,253 3,847,769,253

2,694,388,263 3,847,769,253

1,153,380,990 1,153,380,990

Available-for-sale investments

Other comprehensive income (loss)

Other components of equity

1,698,278,400 (32,792,718,836) 73,010,733,613 355,683,337,769

315,383,172,125 (1,616,127,533) 313,767,044,592

3,185,328,600 (26,251,394,179) 57,151,663,086 313,767,044,592

281,177,907,457 (1,496,460,372) 279,681,447,085

Total equity

SEPARATE FINANCIAL STATEMENTS

010

PTT Public Company Limited   Financial Report

011

PTT Public Company Limited   Financial Report

STATEMENTS OF CASH FLOWS

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

2011

2010

Separate financial statements 2011

(Restated) Cash flows from operating activities Income attributable to the equity holders of the Company Adjustment of net income to net cash provided by (used in) operating activities: Depreciation, depletion and amortization (Reversal of) Loss on impairment of assets (Gain) Loss on disposal of assets (Gain) Loss on disposal of investments Write-off property, plant and equipment Share of income from investments in associates Income attributable to non-controlling interests Provision for employee benefit obligations Unrealized (Gain) Loss on foreign exchange (Reversal of) Doubtful accounts Amortization of exploration costs Amortization of debenture discounts Amortization of deferred interest from finance leases Allowance for loss on decline in value of inventories (Reversal of) Allowance for obsolete materials and supplies Dividends income Income taxes Interest income Interest expenses Others Net income from operating activities before changes in operating assets and liabilities

2010

(Restated)

105,296,408,824

83,992,053,512

73,434,002,942

54,457,274,823

55,318,163,795 6,919,238,816 73,432,947 (993,858,274) 461,008,276 (29,462,624,212) 19,929,576,434 604,661,614 (667,960,809) (261,091,935) 4,598,349,506 27,546,380

46,704,908,559 (74,886,501) (494,107,434) 78,400,000 (5,399,501) (18,815,955,242) 17,512,169,133 725,785,544 881,850,131 58,869,992 1,426,444,825 27,546,380

15,907,757,701 (893,136,283) (19,395,401) (1,417,514,904) 399,092,166 232,152,324 2,926,456,635 (259,082,266) 27,546,380

10,283,085,637 (75,407,254) (197,537,592) 78,400,000 (72,234,981) 314,715,821 (5,434,881,825) 54,794,478 27,546,380

26,303,101 328,815,977

20,850,041 27,230,746

25,705,588 288,973,253

17,980,482 5,851,193

(47,765,599) (599,857,149) 43,230,615,079 (3,477,502,255) 17,376,431,932 2,825,130

(514,280,000) 33,960,537,180 (2,679,085,381) 16,053,104,586 (4,410,440)

(47,765,599) (24,783,995,843) 4,327,513,869 (4,873,459,757) 12,245,706,241 600,000

1,178,822 (18,830,837,386) 12,668,784,343 (3,852,357,879) 11,635,782,945 100,000

218,682,717,578

178,881,626,130

77,521,157,046

61,082,238,007

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

012

PTT Public Company Limited   Financial Report

STATEMENTS OF CASH FLOWS

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

2011

2010

Separate financial statements 2011

(Restated) Changes in operating assets (increase) decrease Trade accounts receivable Other accounts receivable and short-term loans Inventories Materials and supplies Other current assets Advance payments for gas purchases Deferred tax assets Other non-current assets Changes in operating liabilities increase (decrease) Trade accounts payable Other accounts payable Accrued expenses Other current liabilities Deposits on LPG cylinders Other long-term accounts payable Deferred tax liabilities Other non-current liabilities Cash received from operating activities Interest received Interest paid Income tax paid Net cash provided by operating activities

2010

(Restated)

(30,159,723,390) (9,169,957,173) 4,949,763,572 (1,822,653,254) (2,740,296,264) 7,786,823,006 (19,375,768) (3,195,762,563)

(12,786,834,417) 4,975,287,894 (18,511,724,452) (691,901,442) (673,542,072) 11,070,056,214 (1,313,204,891)

(8,381,564,230) (2,975,386,531) (10,549,084,919) (666,531,240) 662,877,334 8,577,154,953 (2,795,051,931)

(27,418,656,811) 3,295,531,596 (2,312,350,519) (645,472,866) 200,992,282 11,739,116,156 (1,392,265,378)

19,017,730,900 (290,110,844) 13,797,977,070 156,707,147 529,044,395 (33,949,713) 7,677 904,733,286 (289,041,916) 218,393,675,662 1,420,179,595 (189,538,807) (42,074,236,760) 177,550,079,690

33,994,764,795 1,888,056,462 467,365,837 (339,710,675) 557,596,570 (39,264,990) 25,108,577 2,006,959,467 20,629,012,877 199,510,639,007 544,724,850 (446,176,676) (43,706,692,257) 155,902,494,924

18,219,327,281 (335,849,005) 1,449,800,803 197,879,989 529,044,395 (34,421,297) 364,871,857 4,263,067,459 81,784,224,505 502,943,090 (9,655,026,600) 72,632,140,995

29,935,487,805 665,354,276 1,957,224,254 481,226,194 557,596,570 (43,801,272) 1,615,817,433 18,635,799,720 79,718,037,727 135,914,190 (14,153,261,267) 65,700,690,650

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

013

PTT Public Company Limited   Financial Report

STATEMENTS OF CASH FLOWS

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

2011

2010

Separate financial statements 2011

(Restated) Cash flows from investing activities Proceeds from disposals of property, plant and equipment Payment of property, plant and equipment Advance payment of property, plant and equipment Payment of intangible assets Payment of mining property development Payment of long-term rental contracts on land and building Deposit on business acquisitions Long-term loans Short-term loans Payment of investments in subsidiaries Payment of investments in jointly controlled entities Payment of investments in associates Payment of other long-term investments Proceeds from disposal of long-term investments Proceeds from long-term loans Proceeds from short-term loans Proceeds from cancellation of leasehold in gas stations (Increase) Decrease in current investments Interest received Dividends received Net cash used in investing activities

2010

(Restated)

62,745,278 (108,043,747,301) (4,160,203,030) (62,084,455)

1,516,193,612 (102,590,084,221) (629,263) (2,041,726,212) (2,451,174,587)

60,097,531 (24,502,316,887) (186,299,135) -

1,476,177,497 (20,050,513,274) (77,576,669) -

(321,210,220) (288,759,714) (15,165,257,041) (57,615,905,098) (4,251,997,334) 1,973,345,386 948,575,962 8,370,825 18,108,253 10,800,315,199 4,035,799,758 11,607,769,912 (160,454,133,620)

(348,371,249) (10,850,497,200) (340,238,416) (40,433,875) (2,671,568,460) (1,313,782,686) 220,003,335 20,551,486 (12,856,130,622) 762,996,674 9,858,615,003 (123,126,276,681)

(213,934,430) (4,097,257,304) (35,385,019) (28,233,475,300) (671,652,415) (4,004,497,324) 1,973,345,386 2,916,605,962 18,108,253 11,118,566,398 6,074,064,381 24,514,295,843 (15,269,734,060)

(272,790,437) (30,956,438,525) 20,791,013,476 (3,545,532,500) (2,118,129,375) (2,671,568,460) (1,250,000,000) 220,003,335 20,551,486 (12,822,815,548) 3,699,543,506 18,424,837,386 (29,133,238,102)

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

014

STATEMENTS OF CASH FLOWS

PTT Public Company Limited   Financial Report

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements

Unit: Baht

Notes

2011

2010

Separate financial statements 2011

(Restated) Cash flows from financing activities Proceeds from issuing ordinary shares Proceeds from premium on share capital Proceeds from long-term loans Proceeds from issuing debentures Proceeds from short-term loans Proceeds from promissory notes Repayment of promissory notes Repayment of short-term loans Repayment of long-term loans Redemption of debentures Redemption of PTT bonds Repayment of finance lease installments Increase (Decrease) in bank overdrafts and short-term loans from financial institutions Interest received Interest paid Dividends paid Net cash provided by (used in) financing activities

2010

(Restated)

356,985,198 1,625,702,400 20,713,594,064 21,283,797,651 2,330,539,611 4,520,000,000 (4,520,000,000) (2,057,513,686) (6,731,192,810) (14,749,338,905) (8,000,000,000) (226,042,568)

593,734,372 3,032,756,600 23,802,722,557 45,525,882,151 26,931,762,885 (18,615,635,128) (11,270,854,783) (12,354,534,040) (9,000,000,000) (211,094,447)

72,576,000 1,625,702,400 8,284,000 3,529,521,184 4,520,000,000 (4,520,000,000) (4,258,538,938) (14,749,338,905) (8,000,000,000) (193,643,205)

152,572,000 3,032,756,600 9,872,415,000 20,636,000,000 19,911,312,978 (17,346,530,578) (3,616,095,363) (3,300,000,000) (9,000,000,000) (184,203,820)

(330,190,000) 12,118,437 (18,548,318,494) (41,103,228,061) (45,423,087,163)

2,939,229,336 904,903 (14,718,785,877) (31,754,753,364) 4,901,335,165

(12,628,273,267) (32,786,500,568) (67,380,211,299)

(11,931,883,711) (26,250,275,249) (18,023,932,143)

Effects of exchange rates on cash and cash equivalents

1,488,739,034

(5,576,158,699)

47,398,828

(538,498)

Currency translation differences

7,169,407,897

(333,254,940)

-

-

(19,668,994,162) 135,801,048,833 116,132,054,671

31,768,139,769 104,032,909,064 135,801,048,833

(9,970,405,536) 61,311,017,827 51,340,612,291

18,542,981,907 42,768,035,920 61,311,017,827

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

4

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

PTT Public Company Limited   Financial Report

015

NOTES TO

FINANCIAL STATEMENTS

1.

PTT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

General Information PTT Public Company Limited (“the Company”) is incorporated as a public limited company in Thailand, and is listed on the Stock Exchange of Thailand. The address of its incorporated and registered office is as follows: The Head Office of the Company is located at 555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok, Thailand. The Company’s principal activity is the operation of its petroleum business. The Company has invested in subsidiaries, jointly controlled entities and associates (“the Group”), which are engaged in upstream petroleum, natural gas, downstream petroleum, coal and other related businesses as described in Note 39 “Segment Information”. As at December 31, 2011, the Group was operating in 26 countries (as at December 31, 2010: 27 countries).

2.

Basis of Financial Statement Preparation The consolidated and the separate financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act, B.E. 2543 (2000). These are Thai Accounting Standards under the Accounting Profession Act, B.E. 2547 (2004), including interpretations and guidelines promulgated by the Federation of Accounting Professions (FAP), and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act, B.E. 2535 (1992). The Company has presented the financial statements in compliance with the notification of the Department of Business Development “Definition of the abbreviated components required in the financial statements, B.E. 2554 (2011)”, dated September 28, B.E. 2554 (2011), under the third paragraph of section 11 of the Accounting Act, B.E. 2543 (2000). The consolidated and the separate financial statements have been prepared based on the assumption that users of the financial statements have an understanding of Thai generally accepted accounting principles and practices, which may differ from generally accepted accounting principles adopted in other countries. The consolidated and the separate financial statements have been prepared under the historical cost convention with the exception of certain amounts, which are accounted for using the fair value method as disclosed in the accounting policies. The significant transactions arising among the Company, subsidiaries and jointly controlled entities are eliminated in the consolidated financial statements.

016

PTT Public Company Limited   Financial Report

The consolidated and the separate financial statements are prepared and presented in Thai Baht and are rounded in the notes to financial statements to the nearest million unless otherwise stated. This English translation of the financial statements has been prepared from the statutory financial statements that were issued in 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.

3.

Accounting Policies

3.1

New and Revised Thai Accounting Standards (TASs), Thai Financial Reporting Standards (TFRSs), Financial Reporting Interpretations, Interpretation and Framework

During 2010 and 2011, the Federation of Accounting Professions (FAP) announced the following new and revised Accounting Standards, Financial Reporting Standards, Financial Reporting Interpretations and Interpretation and Framework in the Royal Thai Government Gazette. Effective on May 26, 2010 •  Framework (revised 2009) Effective for accounting periods on or after January 1, 2011 •  Thai Accounting Standard No.1 (revised 2009) •  Thai Accounting Standard No.2 (revised 2009)

Presentation of Financial Statements

•  Thai Accounting Standard No.7 (revised 2009) •  Thai Accounting Standard No.8 (revised 2009)

Statement of Cash Flows

•  Thai Accounting Standard No.10 (revised 2009) •  Thai Accounting Standard No.11 (revised 2009)

Events after the Reporting Period

•  Thai Accounting Standard No.16 (revised 2009)

Property, Plant and Equipment

•  Thai Accounting Standard No.17 (revised 2009)

Leases

•  Thai Accounting Standard No.18 (revised 2009)

Revenue

•  Thai Accounting Standard No.19

Employee Benefits

•  Thai Accounting Standard No.23 (revised 2009)

Borrowing Costs

•  Thai Accounting Standard No.24 (revised 2009)

Related Party Disclosures

•  Thai Accounting Standard No.26

Accounting and Reporting by Retirement Benefit Plans

•  Thai Accounting Standard No.27 (revised 2009)

Consolidated and Separate Financial Statements

•  Thai Accounting Standard No.28 (revised 2009)

Investments in Associates

Inventories Accounting Policies, Changes in Accounting Estimates and Errors Construction Contracts

017

PTT Public Company Limited   Financial Report

•  Thai Accounting Standard No.29

Financial Reporting in Hyperinflationary Economies

•  Thai Accounting Standard No.31 (revised 2009)

Interests in Joint Ventures

•  Thai Accounting Standard No.33 (revised 2009)

Earnings per Share

•  Thai Accounting Standard No.34 (revised 2009)

Interim Financial Reporting

•  Thai Accounting Standard No.36 (revised 2009)

Impairment of Assets

•  Thai Accounting Standard No.37 (revised 2009)

Provisions, Contingent Liabilities and Contingent Assets

•  Thai Accounting Standard No.38 (revised 2009)

Intangible Assets

•  Thai Accounting Standard No.40 (revised 2009)

Investment Property

•  Thai Financial Reporting Standard No.2

Share-based Payment

•  Thai Financial Reporting Standard No.3 (revised 2009)

Business Combinations

•  Thai Financial Reporting Standard No.5 (revised 2009)

Non-current Assets Held for Sale and Discontinued Operations

•  Thai Financial Reporting Standard No.6

Exploration for and Evaluation of Mineral Resources

•  Thai Financial Reporting Interpretation No.15

Agreements for the Construction of Real Estate

•  Thai Standing Interpretation No.31

Revenue – Barter Transactions Involving Advertising Service

Effective for accounting periods on or after January 1, 2013 •  Thai Accounting Standard No.12

Income Taxes

•  Thai Accounting Standard No.20 (revised 2009)

Accounting for Government Grants and Disclosure of Government Assistance

•  Thai Accounting Standard No.21 (revised 2009)

The Effects of Changes in Foreign Exchange Rates

•  Thai Standing Interpretation No.10

Government Assistance – No Specific Relation to Operating Activities

•  Thai Standing Interpretation No.21

Income Taxes – Recovery of Revalued Non – Depreciable Assets

•  Thai Standing Interpretation No.25

Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders

018

PTT Public Company Limited   Financial Report

The Group adopts and applies the new and revised accounting standards, interpretations, financial reporting standards, and framework in accordance with the effective dates except for Thai Accounting Standard No.12 Income Taxes that has been adopted and applied before the effective date. The adoption of the new and revised TASs and TFRSs, which are effective for accounting periods beginning on or after January 1, 2011, has resulted in changes in accounting policies of the Group. The effects of these changes are disclosed in Note 3.2. The management of the Group has assessed and determined the potential impact of the new and revised standards and interpretations, which are effective on or after January 1, 2013, except for the Thai Accounting Standard No.12 Income and Taxes that has been adopted and applied before the effective date, and concluded that they will have no material impact on the consolidated and the separate financial statements, except for Thai Accounting Standard No.21 (revised 2009) – The Effects of Changes in Foreign Exchange Rates (although this excludes a subsidiary which has adopted and applied Thai Accounting Standard No.21 before the effective date disclosed in Note 3.2.8). Currently, the management of the Group is considering the functional currency and its effects to the Group. 3.2

Changes in Accounting Policies

3.2.1

Overview

From January 1, 2011, consequent to the adoption of new and revised TASs and TFRSs as set out in Note 3.1, the Group has changed its accounting policies in the following areas: •  Presentation of Financial Statements •  Accounting for Property, Plant and Equipment •  Accounting for Investment Properties •  Accounting for Employee Benefits •  Accounting for Share-based Payment •  Accounting for Business Combination •  Accounting for the Change in Functional Currency of Domestic Subsidiary

019

PTT Public Company Limited   Financial Report

Details of the new accounting policies adopted by the Group and the impact of the changes on the financial statements are included in Notes 3.2.2 to 3.2.8. The impact of the changes on the 2010 financial statements is summarized as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

498,090.59

281,177.91

(4,063.48)

(1,496.46)

• Provision for decommissioning costs

(122.47)

-

• Change in functional currency of a domestic subsidiary

3,573.19

-

Equity at January 1, 2010 - restated

497,477.83

279,681.45

Equity at December 31, 2010 – as reported

571,312.57

315,383.17

(4,539.81)

(1,616.13)

(135.64)

-

(9,223.26)

-

557,413.86

313,767.04

Statement of financial position Equity at January 1, 2010 – as reported Changes as a result of the adoption retrospectively of: • Employee benefit obligations

Changes as a result of the adoption retrospectively of: • Employee benefit obligations • Provision for decommissioning costs • Change in functional currency of a domestic subsidiary Equity at December 31, 2010 - restated

020

PTT Public Company Limited   Financial Report

Unit : Million Baht

Consolidated financial statements

Separate financial statements

139,037.13

67,297.01

(746.25)

(170.96)

(13.17)

-

(2,812.95)

-

Income before income tax - restated

135,464.76

67,126.05

Income tax expense – as reported

(39,107.09)

(12,720.07)

281.33

51.29

4,865.22

-

Income tax expenses - restated

(33,960.54)

(12,668.78)

Income for the year - restated

101,504.22

54,457.27

• Basic earnings per share

0.32

(0.04)

• Diluted earnings per share

0.31

(0.04)

Statement of income for the year ended December 31, 2010 Income (Loss) before income tax – as reported Changes before tax as a result of the adoption retrospectively of: • Employee benefit obligations • Provision for decommissioning costs • Change in reporting currency of a domestic subsidiary

Changes to income tax expense as a result of the adoption retrospectively of: • Employee benefit obligations • Change in reporting currency of a domestic subsidiary

Increase (Decrease) in earnings per share (Baht):

PTT Public Company Limited   Financial Report

3.2.2

021

Presentation of Financial Statements

From January 1, 2011, the Group has applied Thai Accounting Standard No.1 (revised 2009) – Presentation of Financial Statements. Under the revised accounting standard, a set of financial statements comprises: •  Statement of financial position; •  Statement of comprehensive income; •  Statement of changes in equity; •  Statement of cash flows; •  Notes to the financial statements As a result, the Group presents all owner changes in equity in the statement of changes in equity and all non-owner changes in equity in the statement of comprehensive income. Previously, all such changes were included in the statement of changes in equity. Comparative information has been re-presented so that it is also in conformity with the revised accounting standard. Such change in accounting policy only impacts presentation aspects. 3.2.3

Property, Plant and Equipment

Since January 1, 2011, the Group has applied Thai Accounting Standard No.16 (revised 2009) – Property, Plant and Equipment in determining and accounting for the cost and depreciable amount of property, plant and equipment. The principal changes introduced by the revised Thai Accounting Standard No.16 and affecting the Group are that (i) costs of asset dismantlement, removal and restoration have to be included as asset costs and subject to annual depreciation; (ii) the depreciation charge has to be determined separately for each significant part of an asset; and (iii) in determining the depreciable amount, the residual value of an item of property, plant and equipment has to be measured based on the estimated amount that the Group would currently obtain from the asset’s disposal, if the asset were already of the age and in the condition expected at the end of its useful life. Furthermore, the residual value and useful life of an asset have to be reviewed at least at each financial year-end. The changes have been applied prospectively in accordance with the transitional provisions of the revised standard, except that consideration of the costs of asset dismantlement, removal and restoration, have been applied retrospectively.

022

3.2.4

PTT Public Company Limited   Financial Report

Investment Properties

Since January 1, 2011, the Group has applied Thai Accounting Standard No.40 (revised 2009) – Investment Property. Under the revised accounting standard, investment property, defined as property owned to earn rentals; capital appreciation; or both, is disclosed in the financial statements separately from other property, plant and equipment and measured using the cost model. The Group has selected the cost model for accounting for its investment properties under the revised accounting standard. The change in accounting policy has been applied retrospectively and for comparative purposes, investment properties presented in the financial statements for the year ended December 31, 2010 have been reclassified from ‘property, plant and equipment’ to present separately under ‘investment properties’. Moreover, the cost and accumulated depreciation as at January 1, 2010 and December 31, 2010 of the Group’s investment properties previously included in property, plant and equipment, have been reclassified and presented separately under ‘investment properties’. Apart from this reclassification, the change in policy has no impact on the 2010 financial statements. Details of investment properties are disclosed in Note 15. property, plant and equipment, have been reclassified and presented separately under ‘investment properties’. Apart from this reclassification, the change in policy has no impact on the 2010 financial statements. Details of investment properties are disclosed in Note 15.

PTT Public Company Limited   Financial Report

3.2.5

023

Employee Benefits

Since January 1, 2011, the Group has applied Thai Accounting Standard No.19 – Employee Benefits. Under the new accounting policy, the Group’s obligation in respect of post-employment benefits, provision for employee pension, is recognized in the financial statements based on calculations performed annually by a qualified actuary using the projected unit credit method. Previously, this obligation was recognized as and when payments were made. The Group has opted to recognize actuarial science estimates in the statement of income in that period. The change in this accounting policy has been applied retrospectively and the Group’s 2010 financial statements have been restated for comparative purposes to the Group’s 2011 financial statements. Details of employee benefit obligations are disclosed in Note 26. 3.2.6

Share-based Payments

Since January 1, 2011, the Group has applied Thai Financial Reporting Standard No.2 – Share-based Payment. Thai Financial Reporting Standard No.2, share-based payment is a transaction in which the entity receives or acquires goods or services either as consideration for • its equity instruments (equity settled share-based payment) recognized in equity. • cash or other assets for amounts based on the price of the entity’s shares (cash settled share-based payment) recognized in liability The entity shall make no subsequent measurement to equity settled share-based payment after a granted date. However, the entity shall measure the fair value of goods or services received at each reporting date and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. The Group has not applied the above accounting policy for share-based payment awards granted before January 1, 2011 in accordance with transitional provisions of Thai Financial Reporting Standard No.2. The adoption of this standard has had no material impact on the financial statements of the Group. Details of share-based payment awards granted before January 1, 2011 are disclosed in Note 32.

024

3.2.7

PTT Public Company Limited   Financial Report

Business Combinations

Since January 1, 2011, the Group has adopted Thai Financial Reporting Standard No.3 (revised 2009) – Business Combinations and Thai Accounting Standard No.27 (revised 2009) – Consolidated and Separate Financial Statements. Under the revised standard, for acquisitions on or after January 1, 2011, the Group measures goodwill at the acquisition date as: • The fair value of any consideration transferred plus • The recognized amount of any non-controlling interest in the acquiree, plus • The fair value of the existing equity interest in the acquiree, if the business combination is achieved in stages, less • The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. The consideration transferred excludes amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss. Costs related to the acquisition, other than those associated with the registration and issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognized at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss. When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquiree’s replacement awards are included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which replacement awards relate to past and/or future service.

PTT Public Company Limited   Financial Report

3.2.8

025

Change in Functional Currency of a Domestic Subsidiary

Since January 1, 2011, a subsidiary of the Company (PTT Exploration and Production Public Co., Ltd. (PTTEP)) has changed its functional currency from Thai Baht to USD so that the financial statements of PTTEP more accurately reflect the effects of trading transactions and other situations impacting financial position, operating results and cash flows of the Company. As the change above was considered a change in accounting policy, PTTEP restated its financial statements. The Group prepared consolidated financial statements based on PTTEP’s financial statements translated into Thai Baht. The details of the impact on the consolidated financial statements are as follows: Unit : Million Baht

Consolidated financial statements Increase (Decrease)

Statement of financial position as at December 31, 2010 •  Total assets

(20,710.60)

•  Total liabilities

(11,487.34)

•  Total shareholders’ equity

(9,223.26)

Statement of income for the year ended December 31, 2010 •  Total income

(6,797.22)

•  Cost of sales and total expenses

(3,984.27)

•  Income tax expense

(4,865.22)

•  Net income for the period

2,052.27

026

PTT Public Company Limited   Financial Report

3.3

Significant Accounting Policies

3.3.1

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, deposits held at call with banks and other short-term highly liquid investments which have original maturities within three months. Bank overdrafts and short-term loans from financial institutions are included in current liabilities in the statement of financial position. 3.3.2

Trade Accounts and Notes Receivable

Trade accounts receivable and notes receivable are carried at net realizable value. Doubtful accounts receivable are estimated at percentages based on the aging of outstanding receivables at the statement of financial position date and expected noncollectible amounts are estimated based on the amount of outstanding receivables at the statement of financial position date, the receivables’ repayment history and their current financial status. Bad debt is recorded as selling and administrative expenses in the statements of income. 3.3.3

Inventories

Inventories are stated at the lower of the cost of acquisition or net realizable value. Cost is determined using the weighted average cost method. The cost of inventory comprises total purchasing costs, payments related to purchasing, discounts, and quantity discounts as well as contributions to or compensation from the Oil Stabilization Fund. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and related selling expenses. When net realizable value of inventories is lower than cost of acquisition, it is presented under cost of goods sold in profit and loss. An allowance for impairment will be recognized for slow-moving, obsolete or defective inventories. 3.3.4

Materials and Supplies

Materials and supplies are stated at cost determined by using the weighted average cost method, less allowance for obsolete, defective or unserviceable items.

PTT Public Company Limited   Financial Report

3.3.5

027

Investments in subsidiaries

Subsidiaries are those companies controlled by the parent company. Control exists when the parent company has the power, directly or indirectly, to govern the financial and operating policies of the subsidiaries so as to obtain benefits from their activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of any consideration transferred, the recognized amount of any non-controlling interest in the acquiree, and the fair value of the existing equity interest as of the purchasing date (if the business combination is achieved in stages) • For each business combination, the Group measures the recognized amount of any non-controlling interest in the acquiree at either the fair value or the non-controlling interest’s proportionate share of the net of identifiable assets of the acquiree. • In the case of a business combination achieved in stages, the Group measures the acquisition-date fair value of the acquirer’s previously-held equity interest in the acquiree and recognized in the statement of income • Costs related to the acquisition, other than those associated with the registration and issue of debt and equity securities, are recognized as expenses in the statement of income. The Group measures the identifiable assets and liabilities acquired at fair value as of the acquisition date. Any changes in the equity interest in subsidiaries of the Group while control is retained are recorded in equity. Investments in subsidiaries have been presented in the separate financial statements under the cost method. A list of subsidiaries of the Group is set out in Note 12.1 and 12.2.

028

3.3.6

PTT Public Company Limited   Financial Report

Investments in Associates

Associates are those companies in which the Group has significant influence, but not control, over the financial and operating policies. The Group uses the purchase method to record the acquisition of associates. Costs which are higher than the acquisitiondate fair value of identifiable assets and liabilities of the acquirer’s equity interest in associates are recorded as goodwill and included in the investment in associates. The consolidated financial statements include the Group’s share of the total recognized gains and losses from associates on an equity accounting basis, from the date that significant influence commences until the date that significant influence ceases. Unrealized gains or losses on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates unless the transactions provide evidence of impairment of the transferred assets. The Group records share of gains or losses from associates in proportion to the Group’s equity interest in those gains and losses. Any dividends received from associates are deducted from the book value of the investments. When the Group’s share of losses in associates equals or exceeds its interest in the associates, the Group does not recognize further losses, unless the Group has incurred collateral or constructive obligations or made payments on behalf of the associates. Investments in associates have been presented in the separate financial statements under the cost method and in the consolidated financial statements under the equity method. A list of associates of the Group is set out in Note 12.1 and 12.2.

PTT Public Company Limited   Financial Report

3.3.7

029

Investments in Jointly Controlled Entities

Established by contractual agreement, jointly controlled entities are those entities over which the Group has joint control. Jointly controlled entities are accounted for by proportionate consolidation in the consolidated financial statements. Under this method, the Group includes its share of the jointly controlled entities’ revenues, expenses, assets, liabilities and cash flows on a line-by-line basis with similar items in the Group’s financial statements, from the date that joint control commences until the date that joint control ceases. The Group recognizes the portion of gains or losses on sales of assets by the Group to the jointly controlled entities that is attributable to other ventures. The Group does not recognize its share of gains or losses from the jointly controlled entities that results from the purchase of assets by the Group from the jointly controlled entities until it sells the assets to an independent party. However, when loss on the transaction evidences a reduction in the net realizable value of current assets or an impairment loss, the loss is recognized immediately. The Group’s interests in jointly controlled entities are presented in the separate financial statements under the cost method. A list of jointly controlled entities of the Group is set out in Note 12.1 and 12.2. 3.3.8

Other Investments

Investments other than investments in subsidiaries, associates, and jointly controlled entities are classified as available-forsale investments, and general investments. Investments in equity securities and mutual funds which are marketable securities are classified as available-for-sale investments and carried at fair value in the statements of financial position. Any value changes are recognized as unrealized gain (loss) and presented separately in other components of equity. Changes in value during period are presented in the comprehensive income statement. Investments in non-marketable securities, which are classified as general investments, are carried at cost in the statement of financial position less accumulated impairment losses to recognize the unrealized losses on investments if the value of the investments decreases substantially. Impairment testing is performed 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 losses are recognized in the statements of income immediately. Upon the disposal of investments, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statements of income. When disposing of part of the Group’s particular investment in debt or equity securities, the carrying amount of the part disposed is determined by reference to the weighted average carrying amount of the total holding of the investment.

030

3.3.9

PTT Public Company Limited   Financial Report

Related Parties

Related parties of the Company are those enterprises or individuals that control or are controlled, directly or indirectly by the Company, or are under common control with the Company, including holding companies, subsidiaries, and fellow Group subsidiaries, as well as those that have equity interests in the Company that result in significant influence or joint control over the Company. In addition, related parties include associates, jointly controlled entities, the management, directors of the Company, and entities which the management or directors of the Company, directly or indirectly, control, jointly control, or significantly influence. In considering each possible related party relationship, attention is directed more to the substance of the relationship than to the legal form. 3.3.10 Foreign Currency Translation

Foreign currency transactions are translated into Thai Baht at the exchange rates prevailing at the transaction date. Monetary assets and liabilities at the statements of income date denominated in foreign currencies are translated into Thai Baht at the exchange rate prevailing at that date. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statements of income. Assets and liabilities of integrated foreign operations are translated into Thai Baht using the closing rate at the statements of financial position date. Revenues and expenses are translated into Thai Baht using the average rate during the period. Differences arising from currency translation are included in other components of equity under shareholders’ equity. Upon the disposal of self-sustaining foreign entities, accumulated currency translation differences under shareholders’ equity are recognized as gains or losses on disposal.

PTT Public Company Limited   Financial Report

031

3.3.11 Borrowing Costs

Borrowing costs comprise interest and other costs associated with the borrowings. Borrowing costs incurred on qualifying assets included in property, plant and equipment are capitalized as a cost of the qualifying property until substantially all the activities necessary to prepare the property for its intended use are completed. The capitalization rate used to determine the amount of borrowing costs to be capitalized is the weighted-average interest rate applicable to the outstanding borrowings during the year. When funds are borrowed specifically for the construction or the production of property, plant and equipment, the amount of borrowing costs for capitalization is determined from the actual borrowing costs during the year less any income on the temporary investment of those borrowings. All other borrowing costs are expensed in the period they incurred. 3.3.12 Property, Plant and Equipment

Property, plant and equipment are initially recognized at cost less accumulated depreciation and allowance for impairment. The costs comprise any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. These include decommission costs, delivery and restoration costs, and any obligation associated with either its acquisition or a consequence of having used the items. Repair and maintenance costs are recognized as expenses in the statements of income during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits exceeding the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset. When replacement costs are recognized in the carried amount of the property, plant and equipment, the replaced items are to be written off. The Group depreciates each significant component of property, plant and equipment separately. The Group estimates the carrying amount of the property, plant and equipment based on current assessment of the future economic benefits. The Group reviews the recoverable amounts, the useful lives and depreciation methods of assets at least once a year.

032

PTT Public Company Limited   Financial Report

Depreciation is accounted for as expenses in the statements of income and is calculated using the straight-line method over the estimated useful lives of the assets, which are as follows: Buildings and building improvements

5 – 30 years

Machinery and equipment

5 – 40 years

Other assets

5 – 10 years

Land and construction in progress are not depreciated. Gains or losses on disposal of property, plant and equipment are determined by comparing the proceeds from sales with the carrying amounts on the disposal dates, and are included in operating income or loss. Oil and Gas Exploration and Production Properties The petroleum exploration and production business accounts for its oil and gas exploration and production properties in accordance with the successful efforts method for which the accounting policies are as follows: Cost of Properties The cost of properties comprises the total acquisition costs of concession rights or a portion thereof proportionate to the Company’s interest in the properties including decommissioning costs. Exploratory drilling costs are capitalized and are classified as assets of the projects if the exploratory wells have found proved reserves to be commercially produced. If the exploratory wells have not found proved reserves or found insufficient reserves for commercial operation, such drilling costs are expensed in the statements of income. Exploratory costs, comprising geological and geophysical costs as well as area reservation fees during the exploration stage, are charged as expenses in the statement of income when incurred. Development costs, whether relating to successful or unsuccessful development wells, are capitalized and classified as assets.

PTT Public Company Limited   Financial Report

033

Depreciation The capitalized acquisition costs of concession rights are depleted and amortized using the unit of production method based on estimated proved reserves. Depreciation, depletion and amortization of exploratory wells, development costs, equipment and the operating costs of support equipment as well as decommissioning costs, except unsuccessful projects, are calculated using the unit of production method based on estimated proved reserves or proved developed reserves. Changes in reserve estimates are recognized prospectively. Proved reserves and proved developed reserves are calculated by the Group’s own engineers and based on information from the jointly controlled entities. Carried Cost under Petroleum Sharing Contracts The petroleum exploration and production business records the carried cost under petroleum sharing contracts using the following accounting policies. Under Petroleum Sharing Contracts in which the government has a participating interest, some contracts require the contractor parties excluding the government to fund the costs of all exploration operations until determination of the first development area (carried cost). The carried costs are funded by the contractor parties at the proportion agreed among the parties. When the project commences production, the carried costs will be fully recouped without interest among the contractor parties under the agreed procedures, in the form of petroleum product sharing. The Group records the carried costs according to the type of petroleum operations, under the successful efforts method. Most of them are recorded as oil and gas properties in the statements of financial position while exploration expenses are recorded in the statements of income as detailed in Note 16.

034

PTT Public Company Limited   Financial Report

3.3.13 Investment Properties

Investment properties are initially recognized at cost, including expenses directly associated with the asset acquisition, less accumulated depreciation and amortization. The Group has selected the cost model for accounting for its investment properties. This model is in accordance with that described in the accounting policy for property, plant and equipment. Depreciation is accounted for as expenses in the statements of income and is calculated using the straight-line method over the estimated useful lives of the assets, which range from 5-30 years. Land and construction in progress are not depreciated. 3.3.14 Intangible assets

Intangible assets are initially recognized at cost less accumulated amortization and impairment. Amortization is accounted for as expenses in the statements of income. The Group records the initial costs of intangible assets from business combination at the acquisition-date fair value of the assets. Intangible assets from other sources are initially recognized at their costs. Intangible assets include computer software licenses, asset rights such as gas transmission pipelines, resource exploration and valuation assets, and other intangible assets, such as other operating rights, patents, and customer contracts. Exploration and evaluation assets are intangible assets that are recognized at cost in a petroleum exploration and production business. If exploratory projects have found sufficient reserves to be commercially produced, assets under those projects will be transferred to assets under proved reserve project. Subsequently, their values are evaluated based on the method stated in Note 3.3.12 property, plant and equipment. If exploratory projects have not found proved reserves or found insufficient reserves for commercial operation, assets under those projects will be fully expensed in the statements of income. Other intangible assets are amortized and recorded as expenses in the statements of income using the straight-line method over the contract periods which range from 5-30 years, except customer contracts which are amortized based on estimated sales volume. The Group reviews the carrying amount and useful lives of intangible assets at least once a year.

PTT Public Company Limited   Financial Report

035

3.3.15 Mining Properties

The coal business applies the following accounting policy for coal exploration and production properties including coal mining property rights and deferred mining exploration and development expenditures. Coal Mining Property Rights Coal mining property rights comprise the total acquisition costs of concession rights in coal mining including both coal mining exploration and development expenditures. Deferred Mining Exploration and Development Expenditures Exploration expenditures relating to areas of interest are recorded at cost as deferred exploration expenditures, which comprise net direct costs, such as licenses, geological and geophysical exploration expenditures, excluding general overheads and administrative expenditures not directly attributable to a particular area of interest, where: a) Such costs are expected to be recovered when the areas are successfully developed and mining operations commence, or from the sales of the areas of interest b) Exploration activities in the areas of interest have not reached the stage which permits a reasonable assessment of the existence of commercial recoverable reserves, and active operations in the areas of interest are continuing. The recoverable amount of exploration expenditures is thus dependent upon a successful development and receivable economic benefits. When the economic benefits are expected to be minimal or non-existent, deferred exploration expenditures are written off as expenses in the statements of income immediately. Development expenditures and costs of area development prior to commencement of operations are capitalized as deferred costs so long as they meet the above criteria and it is highly probable that they can create future economic benefits. Amortization Amortization of coal mining property rights is calculated using the units of production method over the production amount. The amortization of deferred mining exploration and development expenditures commences when commercial coal production activities commence, using the units of production method. The volume of proportional production and the useful lives of coal mining concessions are estimated and reviewed by the Group.

036

PTT Public Company Limited   Financial Report

3.3.16 Goodwill

The Group records the initial value of goodwill at cost, representing the excess of the acquisition costs over the fair value of the net assets acquired. Where the fair value of the net assets exceeds the cost of acquisition at the acquisition date, the difference is recognized as a gain in the statements of income immediately. The Group recognizes goodwill at cost less accumulated impairment losses. The Group will carry out a test for impairment of goodwill at least once a year or when there are factors indicating that an investment might be impaired. To test for impairment, the Group allocates goodwill from business combinations to each cash-generating unit (or group of cash-generating units) that is expected to benefit from the synergies of the combination. The Group evaluates the recoverable amount of each cash-generating unit (or group of cash-generating units) and if it is lower than the carrying amount of the unit, the Group recognizes impairment losses. Allowance for impairment of goodwill will not be reversed. 3.3.17 Finance Leases – Where the Group is the lessee

Leases of property, plant and equipment, where the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. The leased assets are capitalized at the lower of the estimated net present value of the underlying minimum lease payments or fair value. Each minimum lease payment is allocated between liabilities and finance charges in order to achieve a constant interest rate on the remaining balance of the liabilities. The finance leases’ liabilities less finance charges are presented as long-term loans. Interest expenses are charged to the statements of income over the lease period. Depreciation is charged over the shorter of the assets estimated useful life or the lease period. 3.3.18 Operating Leases – Where the Group is the lessee

Leases of property, plant and equipment where the lessor assumes a significant portion of the risks and rewards of ownership are classified as operating leases. Payments made under operating leases are charged to the statements of income using the straight-line method over the period of the lease. The costs incurred upon termination of the operating lease agreements prior their maturity, such as compensation paid to the lessor for such termination, are recognized as expenses in the period in which the termination takes place.

PTT Public Company Limited   Financial Report

037

3.3.19 Advance Payments for Gas Purchased under Take-or-Pay Agreements

The Company has entered into gas purchase agreements with natural gas producers, under which the Company is required to take delivery of natural gas at annual minimum quantities. During each contract year, if the Company cannot accept natural gas according to the minimum quantities under the agreements, it is required to pay for the volume of natural gas which it cannot actually take (Take-or-Pay). After the end of each contract year, the Company and the natural gas producers have to agree on and accept the volume of gas that should be taken into the calculation of Take-or-Pay for that contract year, which is subject to the basis and conditions in the agreements. Under the agreements, the Company can take certain volumes of prepaid gas (Make-up) in subsequent years after taking delivery of natural gas at the minimum quantities for that given contract year. The Company recognizes its obligations under the agreements as advance payments for gas purchased. 3.3.20 Impairment of Assets

The Group performs the following tests for impairment of assets: • Assessment of goodwill is performed annually. • Impairment of property, land and equipment or other intangible assets will be made whenever there is an indication that an asset may be impaired. The Group recognizes impairment loss when the recoverable amount of an asset is lower than its carrying amount, which is the higher of the asset’s fair value less cost to sell and its value in use. The Group determines value in use by estimating the present value of future cash flows generated by the asset, discounted using a pre-tax discount rate which reflects current market assessments of the time value of money and the risk specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. The calculation reflects the amount that the Group could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. The Group recognizes an impairment loss in profit and loss.

038

PTT Public Company Limited   Financial Report

3.3.21 Provision for Decommissioning Costs

The Group records a provision for decommissioning costs whenever it is highly probable that an obligation will arise as a result of a past event and the amount of the obligation can be reliably estimated. The Group recognizes a provision for decommissioning costs based on an estimate of the eventual costs that relate to the removal of the production facilities. These costs are included as part of the cost of the oil and gas properties and are amortized based on proved reserves using the unit of production method. The estimates of decommissioning costs are determined based on reviews and estimates by the Group’s engineers and management’s judgment. 3.3.22 Employee Benefit Obligations

Employee benefit obligations of the Group were measured and recognized as follows: 1. Short-term employee benefits are recognized in profit and loss as expenses when incurred. 2. Post-employment benefits – defined contribution plans The Company and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognized as expenses when incurred. 3. Post-employment benefits – defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques, using the projected unit credit method, in order to determine present value of the obligation, current service cost and past service cost. These are recognized as a liability in statements of financial position and expenses in profit and loss. Actuarial gains and losses arising from post-employment benefits are recognized immediately as expense in profit and loss. 4. Other long-term employment benefits The obligation under the defined benefit plan is determined based on actuarial techniques, using the projected unit credit method, in order to determine present value of the obligation, current service cost and past service cost. These are recognized as a liability in statements of financial position and expenses in profit and loss. Actuarial gains and losses arising from post-employment benefits are recognized immediately as expense in profit and loss. 5. Termination benefits are recognized as a liability or an expense when, and only when, the Company is demonstrably committed to either: • terminate the employment of an employee or a group of employees before the normal retirement date; or • provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.

PTT Public Company Limited   Financial Report

039

3.3.23 Income tax

Current tax The Group is taxed on its non-promoted businesses pursuant to the Revenue Code of Thailand, the Petroleum Income Tax Act, B.E. 2514 (1971) and Amendment, B.E. 2532 (1989) and other applicable laws and regulations of other countries in which the Group has invested. Current tax is the expected tax payable on the taxable profit for the year, using tax rates enacted at the statements of financial position date in the taxable period, and any adjustment to tax payable in respect of previous years. Deferred tax Deferred tax is recognized in the statements of financial position using the liability method for temporary differences between the carrying amounts of tax bases of assets and liabilities and the carrying amounts in the financial statements. The principal temporary differences arise from the allowance for doubtful accounts, accumulated depreciation of plant and equipment and amortization of decommissioning costs, including compensation receivable from the Oil Stabilization Fund and differences between the fair value of acquired assets and their tax bases. Deferred tax is measured using the tax rates enacted at the statements of financial position date. Deferred tax assets are recognized to the extent that it is highly probable that the future taxable profits of the Group will be available against which the temporary differences can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefits will be realized. The Group records deferred tax directly to shareholders’ equity if the tax relates to items that are recorded directly to shareholders’ equity. Deferred tax assets and liabilities are offset when there is the legal right to settle on a net basis and the deferred tax balances relate to the same taxation authority.

040

PTT Public Company Limited   Financial Report

3.3.24 Revenue Recognition

The Group recognizes revenue from sales upon the delivery of products or when the significant risks and rewards of ownership are transferred to the customers. Revenue from services is recognized over the period in which the services are rendered. These revenues are net of trade discounts. Other revenue is recognized on the following basis: Interest income - time proportion basis using the effective yields of interest bearing assets Royalty income - accrual basis in accordance with the substance of the relevant agreements Dividend income - when the right to receive the dividend is established. Revenue from sources other than those mentioned above is recognized using the accrual basis. 3.3.25 Earnings per share

Basic earnings per share is calculated by dividing the net income attributable to ordinary shareholders by the weighted average number of ordinary shares held by third parties in issue during the year. In calculating diluted earnings per share, the Group assumes that all potential dilutive ordinary shares issued to its managements and employees will be converted. As a result, net income of the Group recognized in the financial statements of the Company is adjusted to reflect the dilution of its shareholding that would be caused by such conversion. The calculation of the weighted average number of ordinary shares is based on market price (average price of the Company’s ordinary shares during the period) and the exercise price of the warrants in order to determine the number of ordinary shares held by third parties in the diluted earnings per share calculation.

PTT Public Company Limited   Financial Report

041

3.3.26 Share-based payments

The Group measures equity-settled share-based payments at fair value of warrants at the grant date and expenses them over the vesting period of warrants, while presenting equity from share-based payments in shareholders’ equity. Measurement of the fair value of share-based payments requires the use of judgment and the selection of suitable assumptions regarding items such as the vesting period of the warrants, fluctuation in share price and dividend rate, etc. The Group did not apply the above accounting policy for share-based payment awards prior to January 1, 2011 in accordance with the transitional provisions of Thai Financial Reporting Standard No.2. Details of share-based payment awards granted before January 1, 2011 are disclosed in Note 32. 3.3.27 Financial Instruments

Financial assets in the statements of financial position include cash and cash equivalents, current investments, trade accounts receivable, other accounts receivable, short-term loans and long-term loans. Financial liabilities in the statements of financial position include bank overdrafts and short-term loans from financial institutions, trade accounts payable, other accounts payable, short-term loans and long-term loans. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. The Group utilizes financial instruments to reduce its risk exposure associated with fluctuations in foreign currency exchange rates, interest rates as well as oil and gas market prices. These instruments primarily comprise: Forward Foreign Exchange Contracts Forward foreign exchange contracts protect the Group from fluctuations in exchange rates by establishing the rates at which foreign currency assets will be realized or foreign currency liabilities will be settled. Forward foreign exchange contracts are recognized in the financial statements on inception. The premium or discount on the establishment of each agreement is amortized over the contract period.

042

PTT Public Company Limited   Financial Report

Cross-currency and Interest Rate Swap Contracts Cross-currency and interest rate swap contracts protect the Group from fluctuations in exchange rates and interest rates. Foreign currency financial assets and liabilities as at the statements of financial position date are protected by cross-currency contracts and are translated to Thai Baht using the rates determined in the contracts. Gains or losses on early termination of such contracts or on early-repayment of the borrowings before maturity are taken to the statements of income. Futures Oil Contracts The Company has entered into futures contracts to hedge risks arising from fluctuations in oil prices in accordance with its oil purchase and sale agreements by determining future oil prices. Gains or losses arising from these contracts are recorded in the statements of income at the maturity of the futures contracts. The risk management policy is described in Note 40: Disclosure of Financial Instruments. 3.3.28 Use of Estimates and Significant Assumptions

The preparation of financial statements in conformity with Thai Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions used in the preparation of financial statements are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about significant assumptions and the sources of contingent estimates that might impact on the carrying amounts of assets and liabilities presented in the financial statements are as follows:

PTT Public Company Limited   Financial Report

043

Provisions The Group recognizes a provision in the statements of financial position if, as a result of a past event, the Group has a present obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. The Group records provisions for decommissioning costs when it is highly probable that a commitment will arise as a result of past circumstances and the amount can be estimated reliably. The Group recognizes the provisions for decommissioning costs based on estimated amount of decommissioning of completed construction that is ready for its intended use. These costs are included as part of oil and gas exploration and production properties and are amortized using the units of production method based on estimated proved reserves. The provision for decommissioning costs is determined based on reviews and estimates by the Group’s engineers together with the management’s judgment. Provisions for decommissioning costs depend on various current circumstances such as laws and regulations, technological changes and market prices so the actual result is likely to be different from estimations and assumptions. Income Tax The Group is responsible for the payment of tax in various countries. When deferred tax liabilities are estimated, the Group uses significant judgment due to the numerous transactions and calculations arising from its operations. The Group recognizes deferred tax liabilities based on estimated incremental tax payments. The difference between the actual tax paid and the estimate will affect income tax and deferred tax in the period in which payment of the difference occurs. A deferred tax asset will be recognized when it is highly probable that the Group will have sufficient net income against which to utilize the temporary difference. Assumptions related to future taxable income are uncertain and may change affecting the recognition of deferred tax assets.

044

PTT Public Company Limited   Financial Report

Estimation of Petroleum Reserves Petroleum reserves are of fundamental importance when assessing investments in various exploration projects and petroleum production businesses, including impairment testing. Changes in proved reserves will affect the present value based on net cash inflows and depreciation expenses which are calculated using the unit of production method. The proved reserves are the volume of commercial petroleum production as of a certain date with a high probability of achievement under current economic conditions and production methods, as well as government’s rules and regulations. The proved reserves will be checked and assessed annually by the Group’s geologists and reservoir engineers. Exploration Costs The petroleum exploration and production businesses capitalize drilling costs as assets. When they are over 12 months old, they are amortized as expenses in the statements of income except where there is (1) a discovery of proved reserves, or (2) a discovery of commercially adequate reserves whilst having future exploration and assessment plans. The decision to amortize drilling petroleum costs recorded as assets over 12 months should be made using the assumptions under current circumstances. In case those should such assumptions change in subsequent accounting periods, the petroleum drilling costs that are capitalized as assets will be written off as expenses in that accounting period. Impairment of Assets The Group considers recording an allowance for impairment of assets when an event or a circumstance indicates that the carrying amount of an asset is higher than its net realizable value, which is the higher of the anticipated discounted cash flows from the continuing use of the asset or the amount obtainable from the sale of the asset less any costs of disposal. As a result, the carrying amount of an asset is written down immediately to its net realizable value. The decrease is recorded in the statements of income. Thus, the loss on impairment of assets excluding goodwill recognized in the prior period will be reversed if the estimation for indicated net realizable value changes.

PTT Public Company Limited   Financial Report

045

The Group’s estimate of the expected amount of future petroleum production (exploration and production business) is a key factor in impairment tests. The Group believes these to be the most reasonable indicators for estimating future cash flows because future petroleum production comprises proved reserves, including expected proved reserves. The estimation of discounted future cash flows depends on various factors such as the expected amount of future production, future selling prices, demand and supply in the market, risks and gross margins. The discounted rates used in the calculation of present value of future cash flows depend on the cost of capital of the asset unit. 3.3.29 Capital Risk Management

The capital management objective of the Group is to create returns for shareholders and other stakeholders whilst maintaining a reasonable capital structure to decrease the cost of capital. 3.3.30 Segment Information

The Group has presented its financial information by business segments, not by geographical segments because geographical segments other than Thailand account for less than 10% of consolidated revenues, operating results and total assets.

046

4.

PTT Public Company Limited   Financial Report

Cash and Cash Equivalents Cash and cash equivalents as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

453.47

270.97

213.95

223.38

Deposits held at call with banks

68,057.99

95,355.88

21,892.01

25,571.39

Fixed deposits

19,649.05

13,286.58

15,600.00

9,925.29

Treasury bills

13,066.89

-

-

-

Promissory notes

5,770.00

1,296.65

4,500.00

-

Bank of Thailand Bonds

9,134.65

25,590.96

9,134.65

25,590.96

116,132.05

135,801.04

51,340.61

61,311.02

Cash on hand

Total

Cash and cash equivalents as at December 31, 2011 mainly bear interest at rates ranging from 0.10% to 6.00% per annum (December 31, 2010: interest rates ranging from 0.03% to 5.00% per annum).

5.

Current Investments Current investments as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Fixed deposits

4,305.56

2,594.36

4,032.61

2,282.39

Treasury bills

-

915.81

-

915.81

Bonds

1,136.37

13,230.76

206.23

12,673.93

Promissory notes

5,500.00

5,022.92

5,500.00

5,000.00

19.74

19.74

19.74

19.74

10,961.67

21,783.59

9,758.58

20,891.87

General investments Total

Current investments as at December 31, 2011 mainly bear interest at rates ranging from 1.80% to 4.15% per annum (December 31, 2010: interest rates ranging from 1.35% to 2.30%per annum).

047

PTT Public Company Limited   Financial Report

6.

Trade Accounts Receivable Trade accounts receivable as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements 2011

Trade accounts receivable Notes receivable Total Less Allowance for doubtful accounts Trade accounts receivable – others Trade accounts receivable – related Less Allowance for doubtful accounts Trade accounts receivable – related (Note 9.1) Total

2010

Separate financial statements 2011

2010

107,875.52 84,417.86 81,012.79 68,776.04 1,037.59 1,154.32 1,037.59 1,154.32 108,913.11 85,572.18 82,050.38 69,930.36 (1,850.13) (2,125.76) (724.45) (983.54) 107,062.98 83,446.42 81,325.93 68,946.82 64,643.44 57,255.45 76,076.49 79,580.21 (344.88) (353.40) (344.88) (353.40) 64,298.56 56,902.05 75,731.61 79,226.81 171,361.54 140,348.47 157,057.54 148,173.63

Aging analysis is as follows: Unit : Million Baht

Consolidated financial statements

Within credit terms Overdue - Within 3 months - Over 3 - 6 months - Over 6 -12 months - Over 12 months Total Less Allowance for doubtful accounts Trade accounts receivable

Separate financial statements

2011

2010

2011

2010

168,337.87

137,256.15

151,499.13

142,745.65

2,222.92 1,818.62 1,903.45 1,012.30 638.46 1,062.99 437.52 1,162.57 492.93 1,017.86 331.90 1,483.48 1,864.37 1,672.01 3,954.87 3,106.57 173,556.55 142,827.63 158,126.87 149,510.57 (2,195.01) (2,479.16) (1,069.33) (1,336.94) 171,361.54 140,348.47 157,057.54 148,173.63

Trade accounts receivable as at December 31, 2011 include receivables from government agencies and state enterprises in the consolidated financial statements amounting to Baht 15,525.16 million (December 31, 2010: Baht 16,005.50 million), and in the separate financial statements amounting to Baht 15,362.08 million (December 31, 2010: Baht 15,839.89 million).

048

7.

PTT Public Company Limited   Financial Report

Other Accounts Receivable Other accounts receivable as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

12,315.89

6,374.36

3,085.77

2,050.59

(341.68)

(528.99)

(334.92)

(523.22)

Other accounts receivable

11,974.21

5,845.37

2,750.85

1,527.37

Refund receivable from the Oil Stabilization Fund

11,657.36

7,239.97

11,627.05

7,239.97

Advances

6,163.71

3,016.38

570.00

1,212.99

Accrued interest income and others

1,623.19

1,713.67

233.85

260.31

Other accounts receivable – others

31,418.47

17,815.39

15,181.75

10,240.64

1,206.26

989.52

1,562.34

1,768.78

32,624.73

18,804.91

16,744.09

12,009.42

Other accounts receivable Less Allowance for doubtful accounts

Other accounts receivable – related (Note 9.2) Total

The refund receivable from the Oil Stabilization Fund represents compensation for locally manufactured oil and cooking gas, imported oil and cooking gas and subsidies from the Oil Stabilization Fund for exported oil or oil sold to outbound transportation barges, including compensation for Natural Gas for Vehicles (NGV) prices. The compensation and refund rates are determined by the Committee of Energy Policy Administration.

049

PTT Public Company Limited   Financial Report

8.

Loans

8.1

Short-term loans as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

175.35

284.03

119.52

174.89

Short-term loans – related (Note 9.2)

4,823.82

-

5,420.99

500.00

Total

4,999.17

284.03

5,540.51

674.89

Short-term loans – others

Short-term loans – others are loans provided to transport operators to use as working capital for NGV installation, conversion or modification, including purchases of new natural gas vehicles under the Krungthep Fha Sai project which aims to support the use of NGV as alternative source of energy. The loan interest rate as at December 31, 2011 and 2010 is 0.50% per annum. 8.2

Long-term loans as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Long-term loans – others Long-term loans – related (Note 9.3) Total

Separate financial statements

2011

2010

2011

2010

139.94

124.48

139.94

124.48

5.82

5,753.88

52,697.71

55,302.26

145.76

5,878.36

52,837.65

55,426.74

Long-term loans – others of the Company are loans under the Krungthep Fha Sai project of which details are disclosed in Note 8.1.

050

9.

PTT Public Company Limited   Financial Report

Related Party Transactions The followings are significant transactions carried out with related parties:

9.1

Trade accounts receivable – related parties as at December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Subsidiaries

-

-

10,991.18

22,131.99

Jointly controlled entities

-

-

751.86

490.63

59,798.70

53,653.95

59,651.81

53,468.93

4,844.74

3,601.50

4,681.64

3,488.66

64,643.44

57,255.45

76,076.49

79,580.21

(344.88)

(353.40)

(344.88)

(353.40)

64,298.56

56,902.05

75,731.61

79,226.81

Associates Other related parties Total Less Allowance for doubtful accounts Trade accounts receivable – related parties Aging analysis is as follows:

Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

64,141.37

56,928.18

72,427.41

76,279.58

- Within 3 months

108.14

195.15

107.89

172.63

- Over 3 - 6 months

135.24

87.07

133.70

306.73

- Over 6 - 12 months

175.11

44.19

174.91

544.96

83.58

0.86

3,232.58

2,276.31

64,643.44

57,255.45

76,076.49

79,580.21

(344.88)

(353.40)

(344.88)

(353.40)

64,298.56

56,902.05

75,731.61

79,226.81

Within credit terms Overdue

- Over 12 months Total Less Allowance for doubtful accounts Trade accounts receivable – related parties

051

PTT Public Company Limited   Financial Report

9.2

Other accounts receivable, advances and short-term loans – related parties, net as at December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Subsidiaries

-

-

414.76

630.93

Jointly controlled entities

-

-

22.82

19.86

Associates

624.53

700.11

623.11

569.61

Other related parties

245.42

168.84

46.16

166.11

869.95

868.95

1,106.85

1,386.51

Less Allowance for doubtful accounts

(16.09)

(135.37)

(16.09)

(135.37)

Total

853.86

733.58

1,090.76

1,251.14

-

-

153.98

262.52

0.68

0.02

-

-

351.72

255.92

317.60

255.12

352.40

255.94

471.58

517.64

1,206.26

989.52

1,562.34

1,768.78

-

-

597.17

500.00

4,823.82

-

4,823.82

-

4,823.82

-

5,420.99

500.00

Other accounts receivable

Advances Subsidiaries Associates Other related parties Total Total other accounts receivable Short-term loans Subsidiaries Associates Total

052

PTT Public Company Limited   Financial Report

Movements in short-term loans – related parties are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

-

90.10

500.00

20,791.01

- Payment for loans granted

-

43.73

71.79

1,013.19

- Receipt from loans granted

(226.23)

(133.83)

- Current portion of long-term loans

5,050.05

-

7,070.05

500.00

4,823.82

-

5,420.99

500.00

Balance as at January 1

Balance as at December 31

(2,220.85) (21,804.20)

Short-term loans to related parties as at December 31, 2011 are unsecured and bear interest at rates ranging from 4.00% to 7.25% per annum (December 31, 2010: interest rates ranging from 1.00% to 6.87% per annum).

053

PTT Public Company Limited   Financial Report

9.3

Other accounts receivable, advances and long-term loans – related parties, net as at December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

-

1,877.99

-

1,877.99

-

1,877.99

-

1,877.99

-

-

52,697.71

49,562.21

5.82

5,753.88

-

5,740.05

5.82

5,753.88

52,697.71

55,302.26

Other accounts receivable Associates Total Long-term loans Subsidiaries Associates Total Movements in long-term loans – related parties are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

5,753.88

5,489.44

55,302.26

24,916.50

- Payment for loans granted

-

270.55

5,163.53

30,885.76

- Receipt from loans granted

(698.37)

(3.88)

(698.03)

-

0.36

(2.23)

-

-

(5,050.05)

-

(7,070.05)

(500.00)

5.82

5,753.88

52,697.71

55,302.26

Balance as at January 1

- Currency translation differences - Current portion of long-term loans Balance as at December 31

Long-term loans to related parties as at December 31, 2011 are unsecured and bear interest at rates ranging from 3.46% to 5.58% per annum (December 31, 2010: interest rates ranging from 3.03% to 7.25% per annum).

054

9.4

PTT Public Company Limited   Financial Report

Trade accounts payable – related parties as at December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements 2011

2010

2011

2010

Subsidiaries

-

-

13,381.95

12,611.56

Jointly controlled entities

-

-

5,093.66

3,997.20

40,834.31

32,908.67

39,028.26

31,347.20

4,450.62

3,219.07

337.42

147.96

45,284.93

36,127.74

57,841.29

48,103.92

Associates Other related parties Total 9.5

Separate financial statements

Other accounts payable and short-term loans – related parties as at December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Subsidiaries

-

-

1,313.44

1,545.32

Jointly controlled entities

-

-

4.02

7.49

Associates

747.94

934.87

589.66

899.88

Other related parties

117.96

107.37

116.51

107.26

865.90

1,042.24

2,023.63

2,559.95

-

-

6,094.30

2,564.78

Other accounts payable

Total Short-term loans* Subsidiaries

* The Company’s liquidity management policies within the Group include the use of the cash pooling method. Inter-company loans were used for short-term financial management of cash surpluses or deficits of each affiliate. Interest on these was calculated using market interest rates.

055

PTT Public Company Limited   Financial Report

9.6

Other long-term accounts payable – related parties as at December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Subsidiaries

-

-

0.17

0.33

Jointly controlled entities

-

-

13.15

13.87

17.21

18.94

17.21

18.94

Other related parties

654.50

686.29

654.50

686.29

Total

671.71

705.23

685.03

719.43

Associates

056

9.7

PTT Public Company Limited   Financial Report

Revenue and expense transactions carried out with related parties

For the years ended December 31, 2011 and 2010 Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Subsidiaries

-

-

107,139.32

98,656.57

Jointly controlled entities

-

-

6,651.42

2,595.21

873,320.98

658,397.53

871,692.85

656,600.92

48,602.82

29,921.93

46,828.44

29,137.08

Subsidiaries

-

-

2,906.87

2,686.59

Jointly controlled entities

-

-

-

90.95

342.17

251.93

342.17

251.93

Subsidiaries

-

-

11,579.28

8,542.95

Jointly controlled entities

-

-

1,774.27

1,109.33

Associates

-

-

10,921.66

8,664.27

528.03

514.28

436.96

514.28

Subsidiaries

-

-

765.17

813.19

Jointly controlled entities

-

-

66.77

87.83

5,485.96

4,120.49

5,482.18

4,116.71

74.71

72.95

69.73

72.14

Revenues Sales:

Associates Other related parties Interest income:

Associates Dividend income:

Other related parties Other income:

Associates Other related parties

057

PTT Public Company Limited   Financial Report

Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Subsidiaries

-

-

151,913.76

118,976.95

Jointly controlled entities

-

-

30,115.02

28,348.00

596,441.85

484,861.64

577,506.58

467,180.69

49,455.00

29,620.71

6,089.91

5,516.66

-

-

77.55

11.78

Subsidiaries

-

-

1,335.02

747.65

Jointly controlled entities

-

-

3.70

0.88

1,323.17

1,269.29

1,243.46

1,212.04

894.49

797.34

855.12

789.23

Expenses Purchases:

Associates Other related parties Interest expense: Subsidiaries Other expenses:

Associates Other related parties

The above related party transactions exclude transactions carried out with government agencies and state enterprises. Stipulation prices between the Company and its related parties are based on normal prices for the same types of business transactions carried out with non-related parties. Goods purchased from subsidiaries are charged at the normal prices determined by the subsidiaries with reference to global market prices. 9.8

Details of commitments to subsidiaries, jointly controlled entities, associates and other related parties are stated in Note 48.1.

058

9.9

PTT Public Company Limited   Financial Report

Crude oil and refined products purchase and sale transactions carried out with related parties without physical delivery, with the objective of maintaining crude oil and refined product reserves, were offset in the financial statements.

For the years ended December 31, 2011 and 2010, these transactions are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

-

-

-

8.12

6,729.79

1,773.21

6,729.79

1,773.21

914.44

-

914.44

-

-

-

-

8.12

6,729.79

1,773.21

6,729.79

1,773.21

914.44

-

914.44

-

Sales Subsidiaries Associates Other related parties Purchases Subsidiaries Associates Other related parties 9.10

Executives’ remunerations

For the years ended December 31, 2011 and 2010, remunerations are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

122.94

116.75

40.16

40.88

527.84

580.26

80.93

78.63

5.02

12.38

3.99

3.61

655.80

709.39

125.08

123.12

Directors’ remunerations Meeting remuneration and bonuses Management’s remunerations Salaries, bonuses, and other short-term employee benefits Post-employment benefits Total

* Management are those persons who have authority and responsibility for planning, directing and controlling the activities of an entity, directly or indirectly.

059

PTT Public Company Limited   Financial Report

10.

Inventories Inventories as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Oil products

19,918.86

26,727.85

15,512.90

6,070.89

Gas products

3,261.99

1,981.98

3,061.94

1,980.02

Petrochemical products

1,939.40

1,150.48

-

-

Others

1,190.46

1,393.27

598.58

578.09

26,310.71

31,253.58

19,173.42

8,629.00

(310.42)

(22.92)

(310.42)

(21.45)

26,000.29

31,230.66

18,863.00

8,607.55

Less Allowance for decline in value of inventories and obsolescence Total

During 2011, the Group wrote down inventories to their net realizable values, recording decreases of Baht 75.99 million in the consolidated financial statements (December 31, 2010: Baht 22.92 million) and Baht 75.99 million in the separate financial statements (December 31, 2010: Baht 21.45 million). The Group reversed the previous allowance for decline in value of inventories recorded in the consolidated financial statements, amounting to Baht 22.92 million (December 31, 2010: Baht 18.98 million) and in the separate financial statements, amounting to Baht 21.45 million (December 31, 2010: Baht 15.60 million). In addition, the Group recognized allowance for obsolescence of inventories amounting to Baht 234.43 million in the consolidated and the separate financial statements. The above inventories exclude legal reserves, which are presented as other non-current assets, as discussed in Note 22.

11.

Materials and Supplies Materials and supplies as at December 31, 2011 and 2010 are as follows: Unit : Million Baht

Consolidated financial statements

Separate financial statements

2011

2010

2011

2010

Spare parts, equipment and others

13,283.34

11,230.41

4,125.34

3,555.57

Less Allowance for obsolescence

(81.76)

(127.88)

(13.76)

(61.53)

13,201.58

11,102.53

4,111.58

3,494.04

Total

060

PTT Public Company Limited   Financial Report

12.

Investments in Subsidiaries, Jointly Controlled Entities and Associates

12.1

Details of subsidiaries, jointly controlled entities and associates of the Company

Company

Country of Incorporation

Business

Shareholding (%) 2011

2010

Subsidiaries: PTT Exploration and Production Public Co., Ltd. (PTTEP)

Thailand

Petroleum exploration and production

65.29

65.34

PTT (Cambodia) Limited (PTTCL)

Cambodia

Oil marketing

100.00

100.00

Subic Bay Energy Co., Ltd. (SBECL)

Cayman Islands

Oil marketing

100.00

100.00

Retail Business Alliance Co., Ltd. (RBA)

Thailand

Management services and oil marketing

-

49.00

PTT International Trading Pte Ltd (PTTT)

Singapore

International oil trading

100.00

100.00

PTT Natural Gas Distribution Co., Ltd. (PTTNGD)

Thailand

Natural gas

58.00

58.00

PTT LNG Co., Ltd. (PTTLNG)

Thailand

Natural gas

100.00

100.00

PTT Polymer Marketing Co., Ltd. (PTTPM) Thailand

Petrochemicals marketing

50.00

50.00

Energy Complex Co., Ltd. (EnCo)

Thailand

Real estate development for rent

50.00

50.00

PTT Polymer Logistics Co., Ltd. (PTTPL)

Thailand

Logistics services

100.00

100.00

PTT Retail Business Co., Ltd. (PTTRB)

Thailand

Management services and oil marketing

100.00

100.00

Combined Heat and Power Producing Co., Ltd. (CHPP)

Thailand

Generation and supply of electricity and chilled water

100.00

100.00

PTT International Co., Ltd. (PTTI)

Thailand

International investment

100.00

100.00

PTT Green Energy Pte Ltd (PTTGE)

Singapore

Investment in palm oil

100.00

100.00

Management services

25.00

25.00

Business Services Alliance Co., Ltd. (BSA) Thailand

061

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Shareholding (%) 2011

2010

PTT Tank Terminal Co., Ltd. (PTT TANK) Thailand

Terminal and warehouse

100.00

100.00

Thai Lube Blending Co., Ltd. (TLBC) (The Company and PTTRB held 48.95% and 51.05%, respectively. As a result, TLBC is a subsidiary of the Company)

Thailand

Blending and bottling of lube oil

48.95

48.95

Trans Thai-Malaysia (Thailand) Co., Ltd. (TTM (T))

Thailand

Natural gas

50.00

50.00

Trans Thai-Malaysia (Malaysia) Sdn. Bhd. (TTM (M))

Malaysia

Natural gas

50.00

50.00

District Cooling System and Power Plant Co., Ltd. (DCAP)

Thailand

Generation and supply of electricity and chilled water

35.00

35.00

PTT Asahi Chemicals Co., Ltd. (PTTAC)

Thailand

Petrochemicals

48.50

48.50

HMC Polymers Co., Ltd. (HMC)

Thailand

Petrochemicals

41.44

41.44

PTT MCC Biochem Co., Ltd. (PMBC)

Thailand

Petrochemicals

50.00

-

Thai Oil Public Co., Ltd. (TOP)

Thailand

Refining

49.10

49.10

Star Petroleum Refining Co., Ltd. (SPRC)

Thailand

Refining

36.00

36.00

Bangchak Petroleum Public Co., Ltd. (BCP) Thailand

Refining

27.22

28.29

Thai Petroleum Pipeline Co., Ltd. (THAPPLINE)

Thailand

Oil transmission pipelines

33.19

33.19

Petro Asia (Thailand) Co., Ltd. (PA (Thailand))

Thailand

Oil marketing

35.00

35.00

Vietnam LPG Co., Ltd. (VLPG)

Vietnam

Bottling and sale of LPG

45.00

45.00

KELOIL-PTT LPG Sdn. Bhd. (KPL)

Malaysia

Bottling and sale of LPG

40.00

40.00

Jointly controlled entities:

Associates:

062

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Shareholding (%) 2011

2010

IRPC Public Co., Ltd. (IRPC)

Thailand

Petrochemicals and refining

38.51

39.02

Independent Power (Thailand) Co., Ltd (IPT)

Thailand

Electricity generation

20.00

20.00

Thai Oil Power Co., Ltd. (TP)

Thailand

Generation and supply of electricity

26.00

26.00

PTT Phenol Co., Ltd. (PPCL)

Thailand

Petrochemicals

40.00

40.00

PTT Chemical Public Co., Ltd. (PTTCH)*

Thailand

Petrochemicals

-

48.68

PTT Utility Co., Ltd. (PTTUT)

Thailand

Generation and supply of electricity, steam and water for industries

40.00

40.00

PTT ICT Solutions Co., Ltd. (PTTICT)

Thailand

Communication and technology services

20.00

20.00

PTT Aromatics and Refining Public Co., Ltd. (PTTAR)*

Thailand

Petrochemicals and refining

-

48.60

PTT Maintenance & Engineering Co., Ltd. (PTTME)

Thailand

Factory maintenance and engineering services

40.00

40.00

B.Grimm BIP Power Co., Ltd. (B.Grimm BIP)

Thailand

Generation and supply of electricity

23.00

23.00

Nava Nakorn Electricity Generating Co., Ltd. (NNEG)

Thailand

Generation and supply of electricity

30.00

-

PTT Energy Solutions Co., Ltd. (PTTES)

Thailand

Technical and operational services

40.00

-

Bangpa-in Cogeneration Limited (BIC)

Thailand

Generation and supply of electricity, steam

25.00

-

PTT Global Chemical Public Co., Ltd. (PTTGC)*

Thailand

Petrochemicals and refining

48.92

-

* PTTGC was founded on October 19, 2011 through the amalgamation of PTTCH and PTTAR.

063

PTT Public Company Limited   Financial Report

12.2

Details of the subsidiaries, jointly controlled entities and associates of subsidiaries and jointly controlled entities

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

Subsidiaries of PTTEP: PTTEP International Co., Ltd. (PTTEPI)

Thailand

Petroleum

PTTEP

100.00 100.00

PTTEP Offshore Investment Co., Ltd. (PTTEPO)

Cayman Islands

Petroleum

PTTEP

75.00

75.00

PTTEPI

25.00

25.00

PTTEP Southwest Vietnam Co., Ltd. (PTTEP SV)

Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP Kim Long Vietnam Co., Ltd. (PTTEP KV)

Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP Hoang – Long Co., Ltd. (PTTEP HL)

Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP Hoan – Vu Co., Ltd. (PTTEP HV) Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP Oman Co., Ltd. (PTTEP OM)

Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP Algeria Co., Ltd. (PTTEP AG)

Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP (Thailand) Co., Ltd. (PTTEPT)*

Thailand

Petroleum

PTTEPI

100.00 100.00

PTTEP Services Co., Ltd. (PTTEP Services)

Thailand

Service operation

PTTEP

25.00

25.00

PTTEPI

75.00

75.00

PTTEP

51.00

51.00

PTTEPO

49.00

49.00

PTTEP Siam Co., Ltd. (PTTEPS)

Thailand

Petroleum

PTTEP Iran Co., Ltd. (PTTEP IR)

Cayman Islands

Petroleum

PTTEP OM 100.00 100.00

PTTEP Merangin Co., Ltd. (PTTEPM)**

Cayman Islands

Petroleum

PTTEPO

* On December 24, 2010 PTTEPT registered its dissolution and it is in the process of liquidation. ** On December 29, 2011 PTTEPM registered its dissolution with the Government of Cayman Islands.

100.00 100.00

064

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

PTTEP Bahrain Co., Ltd. (PTTEP BH)

Cayman Islands

Petroleum

PTTEP OM 100.00 100.00

PTTEP Holding Co., Ltd. (PTTEPH)

Cayman Islands

Petroleum

PTTEPO

100.00 100.00

PTTEP Indonesia Co., Ltd. (PTTEP ID)

Cayman Islands

Petroleum

PTTEPH

100.00 100.00

PTTEP Bengara I Co., Ltd. (PTTEPB)

Cayman Islands

Petroleum

PTTEP ID

100.00 100.00

PTTEP Thai Projects Co., Ltd. (PTTEP TP)***

Thailand

Petroleum

PTTEPT

100.00 100.00

PTTEP Andaman Co., Ltd. (PTTEPA)

Thailand

Petroleum

PTTEPS

100.00 100.00

PTTEP Egypt Co., Ltd. (PTTEP EG)

Cayman Islands

Petroleum

PTTEPH

100.00 100.00

PTTEP Rommana Co., Ltd. (PTTEPR)

Cayman Islands

Petroleum

PTTEP EG 100.00 100.00

PTTEP Sidi Abd El Rahman Co., Ltd. (PTTEP SAER)

Cayman Islands

Petroleum

PTTEP EG 100.00 100.00

PTTEP Australia Pty Limited (PTTEP AU) Australia

Petroleum

PTTEPH

100.00 100.00

PTTEP Bangladesh Limited (PTTEP BD)

Cayman Islands

Petroleum

PTTEPH

100.00 100.00

PTTEP South Asia Limited (PTTEP SA) (Former: PTTEP Myanmar Limited (PTTEP MYA))

Cayman Islands

Petroleum

PTTEPH

100.00 100.00

PTTEP New Zealand Limited (PTTEP NZ) Cayman Islands

Petroleum

PTTEPH

100.00 100.00

PTTEP Semai II Limited (PTTEP SM)

Cayman Islands

Petroleum

PTTEP ID

100.00 100.00

PTTEP Australia Perth Pty Limited (PTTEP AP)

Australia

Petroleum

PTTEPH

100.00 100.00

Andaman Transportation Limited (ATL)

Cayman Islands

Gas transmission pipelines

PTTEPO

100.00 100.00

PTTEP International Holding Co., Ltd. (PTTEP IH)

Cayman Islands

Petroleum

PTTEPH

100.00 100.00

PTTEP Southwest Vietnam Pipeline Co., Ltd. (PTTEP SVPC)

Cayman Islands

Gas transmission pipelines

PTTEPH

100.00 100.00

*** On November 29, 2011 PTTEP TP registered its dissolution and was liquidated.

065

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

PTTEP FLNG Holding Co., Ltd. (PTTEP FH)

Hong Kong

2010

Petroleum

PTTEP IH

100.00 100.00

JV Shore Base Limited (JV Shore Base) Cayman Islands (Former: PTTEP Brazil Holding Limited (PTTEP BR))

Petroleum

PTTEP IH

100.00 100.00

PTTEP Netherland Holding Limited (PTTEP NL)

Cayman Islands

Petroleum

PTTEP IH

100.00 100.00

JV Marine Limited (JV Marine)

Cayman Islands

Petroleum

PTTEP IH

100.00 100.00

PTTEP South Mandar Limited (PTTEP SMD)

Cayman Islands

Petroleum

PTTEP ID

100.00 100.00

PTTEP South Sageri Limited (PTTEP SS) Cayman Islands

Petroleum

PTTEP ID

100.00 100.00

PTTEP Sadang Limited (PTTEP SD)

Cayman Islands

Petroleum

PTTEP ID

100.00 100.00

PTTEP Malunda Limited (PTTEP ML)

Cayman Islands

Petroleum

PTTEP ID

100.00 100.00

PTTEP Netherlands Coöperatie U.A. (PTTEP NC)

Netherlands

Petroleum

PTTEP IH 0.00005 1.00 PTTEP NL 99.99995 99.00

PTTEP Canada Limited (PTTEP CA)

Canada

Petroleum

PTTEP NC 100.00 100.00

PTTEP Canada International Finance Limited (PTTEP CIF)

Canada

Petroleum

PTTEP NC 100.00

-

PTTEP MEA Limited (PTTEP MEA)

Cayman Islands

Petroleum

PTTEP

-

PTTEP Australia Offshore Pty Limited (PTTEP AO)

Australia

Petroleum

PTTEP AU 100.00 100.00

PTTEP Australia Browse Basin Pty Limited Australia (PTTEP AB)

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia International Finance Pty Ltd (PTTEP AIF)

Australia

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia Pty Limited (PTTEP AA) Australia

Petroleum

PTTEP AP 100.00 100.00

100.00

066

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

PTTEP Australia Timor Sea Pty Limited (PTTEP AT)

Australia

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia (Finance) Pty Ltd (PTTEP AAF)

Australia

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia (Petroleum) Pty Ltd (PTTEP AAP)

Australia

Petroleum

PTTEP AP 100.00 100.00

Tullian Pty Ltd (PTTEP AAT)

Australia

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia (Operation) Pty Ltd (PTTEP AAO)

Australia

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia (Ashmore Cartier) Pty Ltd Australia (PTTEP AAA)

Petroleum

PTTEP AP 100.00 100.00

PTTEP Australia (Staff) Pty Ltd (PTTEP AAS)

Australia

Petroleum

PTTEP AP 100.00 100.00

Lao People’s Democratic Republic

Oil marketing

PTTCL

100.00 100.00

PTT Philippines Trading Corporation (PTTTC)

Philippines

Oil marketing

SBECL

100.00 100.00

PTT Philippines Corporation (PTTPC)

Philippines

Oil marketing

SBECL

100.00 100.00

United Arab Emirates

International oil trading

PTTT

100.00 100.00

Thailand

Natural gas

PTTNGD

80.00

Subsidiary of PTTCL: PTT (Lao) Co., Ltd. (PTT Lao) (Former: Houakhong Trading Co., Ltd.) Subsidiaries of SBECL:

Subsidiary of PTTT: PTT International Trading DMCC (PTTT DMCC) Subsidiary of PTTNGD: Amata Natural Gas Distribution Co., Ltd. (AMATA NGD)

80.00

067

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

Subsidiary of PTTPM: Polymer Marketing DMCC Co., Ltd. (PM DMCC)

United Arab Emirates

Petrochemicals marketing

PTTPM

100.00 100.00

PTT Retail Management Co., Ltd. (PTTRM)

Thailand

Management of petrol stations

PTTRB

100.00 100.00

PTT Retail Service Co., Ltd. (PTTRS)

Thailand

Employee management service

PTTRB

100.00 100.00

Thai Lube Blending Co., Ltd. (TLBC)

Thailand

Blending and bottling of lube oil

PTTRB

51.05

51.05

PTT

48.95

48.95

Investment in other companies

PTTI

100.00 100.00

International Coal Holdings Pty Ltd (ICH) Australia

Investment in other companies

PTTML

100.00

-

PTT Asia Pacific Mining Pty Ltd (PTTAPM)

Investment in mining

PTTML

60.00

60.00

ICH

40.00

40.00

Subsidiaries of PTTRB:

Subsidiaries of PTTI: PTT Mining Limited (PTTML)

Hong Kong

Australia

Yannarie Solar Pty Ltd (YSP)

Australia

Salt mining

PTTAPM

100.00 100.00

Straits (Brunei) Pte Ltd (Straits (Brunei))

Singapore

Investment in other companies

PTTAPM

100.00 100.00

Sakari Resources Ltd (SAR) (Former: Straits Asia Resources Ltd )

Singapore

Investment in coal mining

PTTAPM

45.40

45.60

068

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

Tiger Energy Trading Pte Ltd (TET)

Singapore

2010

Coal mining marketing

SAR

100.00 100.00

SAR Resources (Australia) Pty Ltd (SARA) Australia

Human resource management

SAR

100.00 100.00

Sakari Asia Energy Pte Ltd (SA Energy) (Former: Straits Asia Energy Pte Ltd)

Singapore

Investment in other companies

SAR

100.00 100.00

Reyka Wahana Digdjaya Pte Ltd (RWD)

Singapore

Investment in other companies

SAR

100.00 100.00

Sakari Energy Trading Pte Ltd (SET) (Former: Straits Energy Trading Pte Ltd)

Singapore

Investment in other companies

SAR

100.00 100.00

Sakari Marine & Infrastructure Pte Ltd (SMI) (Former: Straits Marine & Infrastructure Pte Ltd)

Singapore

Marine engineering SAR

100.00 100.00

PT Straits Consultancy Services (SCS)

Indonesia

Management services

SAR

99.00

99.00

SMI

1.00

1.00

PT Bahari Perdana Persada (BPPD)

Indonesia

Investment in other companies

SAR

100.00 100.00

PT Bahari Putra Perdana (BPPN)

Indonesia

Investment in other companies

BPPD

100.00 100.00

PT Reyka Wahana Digdjaya (RWD)

Indonesia

Investment in other companies

BPPN

100.00 100.00

PT Bahari Cakrawala Sebuku (BCS)

Indonesia

Coal mining

SAR

80.00

80.00

RWD

20.00

-

PT Bumi Borneo Metalindo (BBM)

Indonesia

Investment in other companies

BCS

100.00 100.00

PT Citra Pertiwi Nusantara (CPN)

Indonesia

Coal transport equipments and delivery service

BBM

100.00 100.00

069

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

PT Kuda Perdana Pertewi (KPP)

Indonesia

Coal mining

BCS

100.00 100.00

PT Bumiborneo Pertiwi Nusantara (BPN)

Indonesia

Investment in other companies

BCS

100.00 100.00

PT Karbon Mahakam (KM)

Indonesia

Coal mining

BPN

100.00 100.00

PT Metalindo Bumi Raya (MBR)

Indonesia

Coal mining

BPN

100.00 100.00

PT Borneo Citrapertiwi Nusantara (BCN)

Indonesia

Investment in other companies

BCS

100.00 100.00

PT Separi Energy (SE)

Indonesia

Investment in other companies

BCN

100.00 100.00

PT Jembayan Muarabara (JMB)

Indonesia

Coal mining

SE

100.00 100.00

PT Kemilau Rindang Abadi (KRA)

Indonesia

Coal mining

SE

100.00 100.00

PT Arzara Baraindo Energitama (ABE)

Indonesia

Coal mining

SE

100.00 100.00

PT Cakrawala Abadi Jaya (CAJ)

Indonesia

Investment in other companies

BCN

100.00 100.00

PT Sakit Utama Luas (SUL)

Indonesia

Investment in other companies

BCN

100.00

-

PT Makassar Prima Coal (MPC)

Indonesia

Coal mining

SUL

70.00

-

PTT International Holding Limited (PTTIH)

Hong Kong

Investment in other companies

PTTI

100.00 100.00

PTT International Investment Limited (PTTII)

Hong Kong

Investment in other companies

PTTIH

100.00 100.00

PTT International (Singapore) (PTT Inter (Sing))

Singapore

Investment in other companies

PTTII

100.00 100.00

Natee Synergy Co., Ltd. (NSC)

Thailand

Investment in other companies

PTTI

100.00 100.00

070

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

Subsidiaries of PTTGE: Sabran Brothers Pte Ltd (Sabarn)

Singapore

Investment in other companies

PTTGE

100.00 100.00

Chancellor Oil Pte Ltd (Chancellor)

Singapore

Investment in other companies

PTTGE

77.56

Kalimantan Thai Palm Pte Ltd (KTP)

Singapore

Investment in other companies

Sabran

100.00 100.00

PT Az-Zhara

Indonesia

Palm oil

Sabran

95.00

95.00

PTT Green Energy (Hong Kong) Limited (PTTGE HK)

Hong Kong

Financing

Sabran

100.00

-

PTT GE Netherlands Coop.U.A (PTTGE Coop)

Netherlands

Investment in other companies

Sabran

100.00 100.00

PT Mitra Aneka Rezeki (PT. MAR)

Indonesia

Palm oil

KTP

95.00

95.00

PT Taringin Perkasa (PT. TP)

Indonesia

Palm oil

PT AzZhara

95.00

95.00

PT Sawit Mandiri Sampuraga (PT. SMS)

Indonesia

Palm oil

PT AzZhara

95.00

95.00

PT Sawit Mandiri Sejahtera Kobar (PT. SMSK)

Indonesia

Palm oil

PT AzZhara

95.00

95.00

PT Mirza Pratama Putra (PT. MPP)

Indonesia

Palm oil

PT AzZhara

95.00

95.00

PT Landen Roslia Mandiri (PT. LRM)

Indonesia

Palm oil

PT AzZhara

95.00

95.00

PT Lamandau Sawit Lestari (PT. LSL)

Indonesia

Palm oil

PT AzZhara

95.00

95.00

PT First Borneo Plantations (PT. FBP)

Indonesia

Palm oil

Chancellor

95.00

95.00

PT Borneo International Anugerah (PT. BIA)

Indonesia

Palm oil

PT. FBP

95.00

95.00

77.56

071

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

PT Wahana Hamparan Hijau (PT. WHH)

Indonesia

Palm oil

PT. FBP

95.00

95.00

PT Mitra Kapuas Agro (PT. MKA)

Indonesia

Palm oil

PT. FBP

95.00

95.00

PT Berkah Sawit Abadi (PT. BSA)

Indonesia

Palm oil

PT. FBP

95.00

95.00

PT Kapuas Bio Agro (PT. KBA)

Indonesia

Palm oil

PT. FBP

95.00

95.00

PT Khatulisttiwa Agro Abadi (PT. KAA)

Indonesia

Palm oil

PT. FBP

95.00

95.00

PTT GE Services Netherlands BV (PTTGE BV)

Netherlands

Financing

PTTGE Coop

100.00 100.00

PTT Green Energy (Thailand) Co., Ltd.

Thailand

Management services

PTTGE BV 50.00

-

Sabran

25.00 100.00

PTTGE

25.00

-

PT Kalpataru Sawit Plantation

Indonesia

Palm oil

PTTGE BV 75.00

-

PT Kutai Sawit Plantation

Indonesia

Palm oil

PTTGE BV 75.00

-

PT Sawit Khatulistiwa Plantation

Indonesia

Palm oil

PTTGE BV 75.00

-

PT Kutai Inti Utama

Indonesia

Palm oil

PTTGE BV 75.00

-

PT Kota Bangun Plantation

Indonesia

Palm oil

PTTGE BV 75.00

-

PT Mahakam Sawit Plantation

Indonesia

Palm oil

PTTGE BV 75.00

-

PT Malaya Sawit Khatulistiwa

Indonesia

Palm oil

PTTGE BV 75.00

-

Thailand

Management services for sport tournaments

BSA

100.00 100.00

Malaysia

Funding

TTM(T)

100.00 100.00

Subsidiary of BSA: Sport Services Alliance Co., Ltd. (SSA)

Subsidiary of TTM (T): TTM Sukuk Bhd (TTMT SPV)

072

PTT Public Company Limited   Financial Report

Company

Country of Incorporation

Business

Held by

Shareholding (%) 2011

2010

Jointly Controlled Entities of PTTEP: Carigali - PTTEPI Operating Company Sdn Bhd (CPOC)

Malaysia

Petroleum

PTTEPI

50.00

50.00

Moattama Gas Transportation Company (MGTC)

Bermuda

Gas transmission pipelines

PTTEPO

25.50

25.50

Taninthayi Pipeline Company LLC. (TPC) Cayman Islands

Gas transmission pipelines

PTTEPO

19.3178 19.3178

Orange Energy Limited (Orange)

Thailand

Petroleum

PTTEPO

53.9496 53.9496

B8/32 Partners Limited (B8/32 Partners)

Thailand

Petroleum

PTTEPO

25.0009 25.0009

PTT FLNG Limited (PTT FLNG)

Hong Kong

Petroleum

PTTEP FH

50.00

50.00

PTT Inter (Sing)

50.00

50.00

Erawan 2 FSO Bahamas Limited (Erawan2) Bahamas

Petroleum

JV Marine

13.11

-

KKD Oil Sands Partnership (KOSP) (Former: Statoil Canada Partnership (SCP))

Canada

Petroleum

PTTEP CA 40.00

-

Leismer Aerodrome Limited (LAL)

Canada

Services

PTTEP CA 40.00

-

Groupement Bir Seba (GBRS)

Algeria

Petroleum

PTTEP AG 35.00

35.00

FEE (Bru) Pte Ltd

Singapore

Coal mining

Straits (Brunei)

35.00

35.00

PTT FLNG Limited (PTT FLNG)

Hong Kong

Petroleum

PTT Inter (Sing)

50.00

50.00

PTTEP FH

50.00

50.00

Jointly Controlled Entities of PTTI:

073

PTT Public Company Limited   Financial Report

Project

Country

Operator

Shareholding (%) 2011

2010

Projects of PTT Exploration and Production Public Co., Ltd. (PTTEP) Bongkot

Thailand

PTT Exploration and Production Public Co., Ltd.

44.4445

44.4445

Arthit

Thailand

PTT Exploration and Production Public Co., Ltd.

80.00

80.00

Arthit North

Thailand

PTT Exploration and Production Public Co., Ltd.

100.00

100.00

Contract 4 Thailand (Former: Pailin)

Chevron Thailand Exploration and Production Co., Ltd.

45.00

45.00

Sinphuhorm (E 5 North)

Thailand

Hess (Thailand) Co., Ltd.

20.00

20.00

S1

Thailand

PTTEP Siam Co., Ltd.

25.00

25.00

Contract 3 Thailand (Former: Unocal 3)

Chevron Thailand Exploration and Production Co., Ltd.

5.00

5.00

E5

Thailand

Exxon Mobil Exploration and Production Khorat Inc.

20.00

20.00

Algeria Hassi Bir Rekaiz

Algeria

PTT Exploration and Production Public Co., Ltd.

24.50

24.50

074

PTT Public Company Limited   Financial Report

Project

Country

Operator

Shareholding (%) 2011

2010

25.50

25.50

Projects of PTTEP International Co., Ltd. (PTTEPI) Yadana

Myanmar

Total E&P Myanmar

Yetagun

Myanmar

Petronas Carigali Myanmar (Hong Kong) Ltd.

PTTEP 1

Thailand

PTTEP International Co., Ltd.

100.00

100.00

G 4/43

Thailand

Chevron Offshore (Thailand) Co., Ltd.

21.375

21.375

G 9/43

ThailandCambodia

PTTEP International Co., Ltd.

100.00

100.00

L 22/43

Thailand

PTTEP International Co., Ltd.

100.00

100.00

L 53/43 & L54/43 Thailand

PTTEP International Co., Ltd.

100.00

100.00

G 4/48

Thailand

Chevron Pattani Co., Ltd.

5.00

5.00

Arthit (G 9/48)

Thailand

PTTEP International Co., Ltd.

80.00

80.00

Bongkot (G 12/48) Thailand

PTTEP International Co., Ltd.

44.4445

44.4445

L 21, 28 & 29/48

Thailand

PTTEP International Co., Ltd.

70.00

70.00

A 4, 5 & 6/48

Thailand

PTTEP International Co., Ltd.

100.00

100.00

19.31784 19.31784

Contract 3 (G 6/50) Thailand

Chevron Petroleum Thailand Co., Ltd.

5.00

5.00

Contract 4 (G 7/50) Thailand

Chevron Petroleum Thailand Co., Ltd.

45.00

45.00

Arthit (G 8/50)

Thailand

PTTEP International Co., Ltd.

80.00

80.00

Cambodia B

Cambodia

PTTEP International Co., Ltd.

Myanmar Zawtika Myanmar

PTTEP International Co., Ltd.

80.00

100.00

Myanmar M3, M7 Myanmar & M11

PTTEP International Co., Ltd.

100.00

100.00

Joint Development Thailand Areas Thailand – Malaysia Malaysia - B17

Carigali – PTTEPI Operating Company Sendirian Berhad

50.00

50.00

33.333334 33.333334

075

PTT Public Company Limited   Financial Report

Project

Country

Operator

Shareholding (%) 2011

2010

25.0010

25.0010

7.00

7.00

8.50

8.50

28.50

28.50

25.00

25.00

100.00

100.00

35.00

35.00

Project of PTTEP Offshore Investment Co., Ltd. (PTTEPO) B8/32 & 9A*

Thailand

Chevron Offshore (Thailand) Co., Ltd.

Project of PTTEP Southwest Vietnam Co., Ltd. (PTTEP SV) Vietnam 52/97

Vietnam

Chevron Vietnam (Block 52), Ltd.

Project of PTTEP Kim Long Vietnam Co., Ltd. (PTTEP KV) Vietnam B & 48/95 Vietnam

Chevron Vietnam (Block B), Ltd.

Project of PTTEP Hoang-Long Co., Ltd. (PTTEP HL) Vietnam 16-1

Vietnam

Hoang Long Joint Operating Company

Project of PTTEP Hoan-Vu Co., Ltd. (PTTEP HV) Vietnam 9-2

Vietnam

Hoan-Vu Joint Operating Company

Project of PTTEP Oman Co., Ltd. (PTTEP OM) Oman 44

Oman

PTTEP Oman Co., Ltd.

Project of PTTEP Algeria Co., Ltd. (PTTEP AG) Algeria 433a & 416b

Algeria

- Groupement Bir Seba (for development phase) - PetroVietnam Exploration & Production Corporation (for exploration phase)

* PTTEPO held shares in Orange Energy Limited and B8/32 Partners Limited which were concession holders in this project.

076

PTT Public Company Limited   Financial Report

Project

Country

Operator

Shareholding (%) 2011

2010

Projects of PTTEP Siam Co., Ltd. (PTTEPS) Sinphuhorm (Block EU-1)

Thailand

Hess (Thailand) Co., Ltd.

20.00

20.00

B6/27

Thailand

PTTEP Siam Co., Ltd.

60.00

60.00

S1

Thailand

PTTEP Siam Co., Ltd.

75.00

75.00

Projects of PTTEP Australia Offshore Pty. Ltd. (PTTEP AO) Australia AC/P 36 Australia

Murphy Australia Oil Pty Ltd

-

22.21

Australia WA 423 Australia

Murphy Australia Oil Pty Ltd

30.00

30.00

100.00

100.00

30.00

30.00

28.33

33.33

30.00

30.00

18.00

36.00

Project of PTTEP Bahrain Co., Ltd. (PTTEP BH) Bahrain 2

Bahrain

PTTEP Bahrain Co., Ltd.

Project of PTTEP Rommana Co., Ltd. (PTTEPR) Rommana

Egypt

Sipetrol International S.A.

Project of PTTEP Semai II Limited (PTTEP SM) Indonesia Semai II Indonesia

Murphy Semai Oil Co., Ltd.

Project of PTTEP Sidi Abd EI Rahman Co., Ltd. (PTTEP SAER) Sidi Abd EI Egypt Rahman offshore

Edison International SPA

Project of PTTEP New Zealand Limited (PTTEP NZ) New Zealand Great New Zealand OMV New Zealand Limited South

077

PTT Public Company Limited   Financial Report

Project

Country

Operator

Shareholding (%) 2011

2010

34.00

67.00

100.00

100.00

30.00

40.00

Project of PTTEP South Mandar Limited (PTTEP SMD) Indonesia South Mandar

Indonesia

PTTEP South Mandar Limited

Project of PTTEP Malunda Limited (PTTEP ML) Indonesia Malunda Indonesia

PTTEP Malunda Limited

Project of PTTEP Sadang Limited (PTTEP SD) Indonesia Sadang Indonesia

Talisman Sadang B.V.

Project of PTTEP South Sageri Limited (PTTEP SS) Indonesia South Sageri

Indonesia

Talisman South sageri B.V.

20.00

30.00

40.00

-

Project of PTTEP Canada Limited (PTTEP CA) Canada Oil Sand KKD

Canada

Statoil Canada Ltd

078

PTT Public Company Limited   Financial Report

Project

Country

Operator

Shareholding (%) 2011

2010

Projects of PTTEP Australia Perth Pty Limited (PTTEP AP) PTTEP Australasia

Australia

Details of operators and shareholding percentage in projects of PTTEP Australasia are as follows: Project

Operator

Shareholding (%) 2011

2010

AC/L7, AC/L8, AC/P33 AC/P34 & AC/P40

PTTEP Australasia (Ashmore Cartier) Pty Ltd

100.00

100.00

AC/L1, AC/L2 & AC/L3

PTTEP Australasia (Ashmore Cartier) Pty Ltd

89.6875

89.6875

AC/RL7

PTTEP Australasia (Ashmore Cartier) Pty Ltd

100.00

80.00

AC/P24

PTTEP Australasia (Ashmore Cartier) Pty Ltd

90.00

60.00

AC/RL4(Tenacious)

PTTEP Australasia (Ashmore Cartier) Pty Ltd

100.00

100.00

AC/RL6(Audacious), AC/P4, PTTEP Australasia (Ashmore Cartier) Pty Ltd AC/RL4(exclude Tenacious), AC/RL5, AC/RL6(exclude Audacious) & AC/P17

50.00

50.00

AC/P32

PTTEP Australasia (Ashmore Cartier) Pty Ltd

35.00

35.00

WA378P*, WA396P & WA397P

Woodside Energy Limited

20.00

20.00

AC/P54

PTTEP Australasia (Ashmore Cartier) Pty Ltd

100.00

-

* On September 29, 2011, PTTEP Australasia Pty Ltd withdrew its entire 20% participation interest from the concession WA378P. The withdrawal will be fully effective upon receiving an official approval from the government of Australia.

079

PTT Public Company Limited   Financial Report

Company

Country of Incorporation Business

Held by

Shareholding (%) 2011

2010

Associates of PTTEP: Energy Complex Co., Ltd. (EnCo)

Thailand

Commercial

PTTEP

50.00

50.00

PTT ICT Solutions Co., Ltd. (PTTICT)

Thailand

Communication PTTEP and technology services

20.00

20.00

Associates of PTTEP AP Group*

Australia

Services

PTTEP AAO

50.00

50.00

Hong Kong

Aircraft refueling service

PTTPC

25.00

25.00

East Mediterranean Gas Company S.A.E. (EMG)

Egypt

Natural gas transmission pipelinesoverseas

PTTI

25.00

25.00

Red Island Mineral (RIM)

Australia

Investment in PTTAPM other companies

33.50

33.50

Hydroelectric power plant

25.00

-

Associate of SBECL: FST Aviation Services Limited (FST)

Associates of PTTI:

Xayaburi Power Company Limited (XPCL) Lao People’s Democratic Republic

* Associates of PTTEP AP Group consist of ShoreAir Pty Ltd and Troughton Island Pty Ltd.

NSC

080

12.3

PTT Public Company Limited   Financial Report

Investments in associates in the consolidated financial statements as at December 31, 2011 and 2010 Unit : Million Baht

Shareholding (%)

2011

2010

2011

2010

Cost method

1. TOP

49.10

49.10

11,380.83

39,274.55

11,380.83

2. SPRC

36.00

36.00

14,770.48

21,573.08

3. BCP

27.22

28.29

5,585.26

-

48.60

38.51

6. THAPPLINE

Company

Dividend

Equity Method

Cost method

Equity Method

2011

2010

34,481.73

2,704.45

2,103.46

14,770.48

18,613.23

-

812.38

8,249.06

4,060.18

6,562.57

426.69

432.80

-

-

12,820.01

30,472.62

2,600.03

1,802.48

39.02

28,467.24

30,366.79

28,467.24

30,339.10

1,416.55

1,309.22

33.19

33.19

2,682.35

1,659.74

2,682.35

1,174.33

-

-

7. PA (Thailand)

35.00

35.00

131.25

-

131.25

-

-

-

8. VLPG

45.00

45.00

87.35

119.12

87.35

102.89

-

-

9. KPL

40.00

40.00

21.49

-

21.49

(0.96)

-

-

10. FST

25.00

25.00

1.13

1.42

1.13

1.40

-

-

11. PTTCH

-

48.68

-

-

33,520.89

57,129.11

3,759.94

2,152.83

12. PPCL

40.00

40.00

3,340.48

4,940.00

3,340.48

3,967.24