) Information Memorandum : TTW

transfer may cause the Company's foreign shareholding to exceed 51% of its total issued and paid-up shares".) Board of Directors The Company's Board of Directors consists of 11 directors as follows: Name Position Start Date 1. Mr. Plew Trivisvavet Chairman of the Board 24 March 2006 2. Mr. Sompodh Sripoom Managing Director and Director 2 August 2005 3. Mr. Narong Sangsuriya Director 8 September 2000 4. Mr. Prasert Marittanaporn Director 30 October 2000 5. Dr. Sombat Kitjalaksana Director 8 September 2000 6. Mr. Yoshio Kometani Director 24 March 2006 7. Mr. Tomoaki Matsumoto Director 24 March 2006 8. Mr. Suvich Pungchareon Director 26 September 2006 9. Mr. Techapit Sangsingkeo Director, Independent Director and 23 June 2006 Chairman of the Audit Committee 10. Mr. Somnuk Chaidejsuriya Director, Independent Director and 23 June 2006 Member of the Audit Committee 11. Mr. Phairuch Mekarporn Director, Independent Director and 23 June 2006 Member of the Audit Committee Audit Committee The Audit Committee was appointed by the resolution of the Board of Directors meeting No. 5/2006, held on 1 June 2006 and the shareholders meeting No. 5/2006, held on 23 June 2006. The Audit Committee consists of 3 directors as follows: 1. Mr. Techapit Sangsingkeo Chairman of the Audit Committee 2. Mr. Somnuk Chaidejsuriya Member of the Audit Committee 3. Mr. Phairuch Mekarporn Member of the Audit Committee Head of the Company's Internal Audit Department serves as secretary to the Audit Committee. Scope of duties and responsibilities 1. To review the Company's financial reports to ensure that they are correct with adequate disclosure. 2. To review the Company's systems of internal control/audit to ensure that they are suitable and efficient. 3. To review the Company's conduct to ensure that it complies with the laws governing the securities and exchange and the rules prescribed by the Stock Exchange of Thailand or other applicable laws, rules, regulations and policies related to the Company's business. 4. To consider matters relating to the correct, completed and timely disclosure of the Company's information involving any connected party transactions or transactions which may contain a conflict of interests. 5. To advise the Board of Directors on the nomination of the Company's auditor(s) and their remuneration, so that the Board of Directors proposes the matter to the shareholders meeting for approval. 6. To prepare report(s), duly signed by the Chairman of the Audit Committee, concerning supervision of the Audit Committee's performance which will be disclosed in the Company's Annual Report. 7. To carry out such other activities as the Board of Directors may assign with the Audit Committee's approval. Term of office 1. Chairman of the Audit Committee 3 years 2. Member of the Audit Committee 3 years Listing Conditions - None - Lock-up Period The existing shareholders with an aggregate of 2,194,500,000 shares held before the IPO (which is equal to 55% of the Company's total paid-up capital after the IPO) undertake to the Stock Exchange of Thailand to refrain from selling their shares for one year from the first date that the Company's shares begin trading on the Stock Exchange of Thailand. After half of the one-year period lapses, a partial sale is allowed for 25% of the total shares or securities which are subject to lock up, and the rest of those shares or securities may be sold after the one-year period ends. A relaxation is granted to 1,368,972,600 shares, which is equal to 62.38% of total locked-up shares, to the effect that they need not be deposited with Thailand Securities Depository Co., Ltd. (TSD) because they have currently been pledged to some financial institutions and there are risks that they may become subject to enforcement. In this regard, the Company assures that if the pledged shares are redeemed during the lock-up period, they will be deposited with TSD until the lock-up period ends. Relaxation - None - Other conditions (if any) 1. Dividend payment Having considered the Company's operating results, the Board of Directors meeting, held on 10 April 2008, believed that the Company will be able to pay dividends at the rate of Baht 0.15 per share in respect of the operating results for fiscal year 2007. The dividend payment will be proposed at the Board meeting and/or the general meeting of shareholders for their approval in accordance with the Company's dividend policy and rules. Dividends may be paid to shareholders in the fourth quarter of 2008. The Company also expects that, on each occasion that it is able to pay dividends, the new rate to be declared will not be lower than the previously declared rate. However, the Company cannot assure that the Board meeting and/or the general meeting of shareholders will approve the proposed payment of dividends at Baht 0.15 per share and that the rate of dividends that the Company will be able to afford in the future may be not so favourable as it has forecasted. The fact that the Company's operating results have continuously improved is not a guarantee of its future operating results because there are numerous factors which may affect the Company's operations. For instance, a change in the Government's policy on tap water business and an issue of new laws and rules governing tap water business. 2. Agreements between Major Shareholders of the Company Two major shareholders of the Company, i.e. CH. Karnchang and Mitsui, entered into a Shareholders Agreement which is not binding on the Company. Certain terms of the Shareholders Agreement require mutual agreement of the parties. That means if mutual agreement cannot be reached, an adverse effect may have on the relationship between the major shareholders and each party's status as the Company's major shareholder. Set out below is a summary of the Shareholders Agreement. (1) Determination of Budgets and Accounts If any party does not approve the budget which is determined for any transaction, the Company cannot proceed with the transaction under the unapproved budget, unless such transaction is required by the Concession or the Water Purchase and Sale Agreement. If the inability to proceed with that transaction has irreparable effect on the Company and the parties cannot agree to it, Mitsui may sell its shares in the Company to CH. Karnchang. CH. Karnchang has the right to purchase those shares at the price determined by an expert. (2) Right of First Refusal If any party wishes to sell the Company's shares to a third party, that party must first offer to sell those shares to the other party at the same price that the selling party intends to offer to the third party under the procedure prescribed in the Shareholders Agreement. (3) Deadlock If either of the events set out below arises which causes irreparable effect to the Company and both parties cannot agree on it, Mitsui has the right to sell its shares in the Company to CH. Karnchang. CH. Karnchang then has the right to purchase those shares from Mitsui. (a) disagreement to any resolution passed by the shareholders or the Board of Directors' meetings; (b) directors representing CH. Karnchang or Mitsui do not attend the meetings for three consecutive occasions; or (c) either party does not attend the meetings for two consecutive occasions. In addition, CH. Karnchang and Mitsui entered into an amendment to the Shareholders Agreement which contains the provisions dealing with their role of management in Pathum Thani Water through the Company. Under those amended provisions, prior approval of CH. Karnchang and Mitsui is required for the Company to approve the reserved matters to be carried out by Pathum Thani Water. The reserved matters include the dividend declaration, entry into a transaction with the value exceeding the agreed amount, creation of encumbrance over Baht 50 million, investment, business expansion, budget determination and replacement of auditor. However, those matters must be valid and permitted by law. Statistical Summary Only the audited financial statements of the Company and its subsidiaries are provided below. However, the pro forma financial statements are available in the prospectus regarding the share offering of Thai Tap Water Supply Public Company Limited. Investors may download all information and details in such prospectus via www.sec.or.th. Thai Tap Water Supply Public Company Limited and its subsidiaries (2005: the Company's separated financial statements; 2006, 2007, and Q1 2008: Consolidated financial statements*) (2005 - 2007: Audited; Q1/2008: Unaudited but reviewed) l--------- Baht million-----------l----------------Baht/share**----------------l Year Total Net Profit Net Dividend Book Payout 87455-00001 BN:783577.3 48 Revenue (Loss) earnings Value Ratio (%) (Loss) 2005 1,356.03 335.04 0.11 0.04 1.12 31.34 2006 1,697.80 674.41 0.21 0.08 1.21 38.11 2007 2,567.03 920.05 0.28 0.05 1.45 17.66 Q1 2008 844.96 305.53 0.09 - 1.53 - * The financial information of 2006 is derived from the consolidated financial statements of the Company and Waterflow, a subsidiary. The financial information of 2007 and Q1 of 2008 is derived from the consolidated financial statements of the Company and its subsidiaries, i.e. Waterflow, Pathum Thani Water and BJT. ** The par value is Baht 1 per share The number of shares calculated is the weighted average number of ordinary shares shown in the financial statements. Important Items in the Financial Statements Thai Tap Water Supply Public Company Limited and its subsidiaries (2005: the Company's separated financial statements; 2006, 2007, and Q1/2008: Consolidated financial statements) Balance Sheet (Unit: Baht Thousand) 31 Dec 2005 31 Dec 2006 31 Dec 2007 31 Mar 2008 (Unaudited but reviewed) Assets Current Assets Cash and deposits at financial institution 387,595 356,130 674,895 726,532 Current investments 285,000 695,000 847,258 842,617 Trade Accounts receivable 126,433 217,596 292,704 319,783 Total current assets 820,443 1,306,661 1,957,747 2,269,955 Non-current assets Property, plant and equipment - net 9,536,450 9,355,964 9,196,857 9,127,210 Assets for production of treated water - - 4,258,205 4,237,539 Right for production of treated water - net - - 3,079,619 3,031,016 Total non-current assets 9,540,521 9,375,284 16,723,402 16,429,210 Total assets 10,360,964 10,681,945 18,681,149 18,699,165 Liabilities Current Liabilities Overdrafts and short-term loans from financial institutions - - 3,004,836 3,004,906 Trade accounts payables Related parties 85,610 260 - - Unrelated parties 10,506 31,503 58,897 43,168 Current portion of long-term loans from financial institutions 140,000 700,000 1,411,800 1,436,715 Total current liabilities 293,147 772,085 4,705,064 4,633,419 Non-current liabilities Long-term loans from financial institutions - net of current portion 6,720,000 6,020,000 9,261,312 9,045,447 Total non-current liabilities 6,720,000 6,020,000 9,261,312 9,045,447 Total Liabilities 7,013,147 6,792,085 13,966,376 13,678,866 Shareholders' equity Issued and fully paid up 3,000,000 3,250,000 3,290,000 3,290,000 Share premium - 475,000 483,000 483,000 Retain earnings Appropriated - statutory reserve 17,882 51,602 399,000 399,000 Unappropriated 329,935 713,621 1,123,775 1,426,937 Difference on reorganization of business of group companies - (600,363) (600,363) (600,363) Minority interest - equity attributable to minority shareholders of subsidiaries - - 19,361 21,725 Total shareholders' equity 3,347,817 3,889,860 4,714,773 5,020,299 Total liabilities and shareholders' equity 10,360,964 10,681,945 18,681,149 18,699,165 87455-00001 BN:783577.3 50 Income Statements (Unit: Baht Thousand) 2005 2006 2007 Q1 2008 (Unaudited but reviewed) Revenues Sales of treated water 1,356,031 1,697,802 2,567,034 844,959 Total Revenues 1,360,248 1,722,187 2,623,232 858,423 Expenses Cost of sales of treated water and service 628,130 496,142 780,802 262,093 Selling and administrative expenses 52,186 105,062 158,048 34,262 Total expenses 680,316 601,204 1,028,340 344,958 Earnings before interest and tax 679,932 1,120,983 1,594,892 513,465 Interest expense (344,895) (437,016) (637,644) (205,366) Corporate income tax - (2,071) (14,037) (2,573) Earnings after corporate income tax 355,037 681,896 943,211 305,526 Portions of net income prior to acquisition belonging to former shareholders - (7,490) - - Net income attributable to minority interest - - (23,160) (2,364) Net income for the year 335,037 674,406 920,051 303,162 Basic earning per shares 0.11 0.21 0.28 0.09 Cash Flow Statements (Unit: Baht Thousand) 2005 2006 2007 Q1 2008 (Unaudited but reviewed) Net cash flows from (used in) operating activities 760,965 740,248 983,824 360,413 Net cash flows from (used in) investing activities (291,184) (1,099,712) (4,360,875) (117,896) Net cash flows from (used in) financing activities (245,000) 328,000 3,695,815 (190,880) Net increase (decrease) in cash and cash equivalents 224,781 (31,464) 318,764 51,637 Notes: The financial information of 2006 is derived from the consolidated financial statements of the Company and Waterflow, a subsidiary. The financial information of 2007 and Q1 of 2008 is derived from the consolidated financial statements of the Company and its subsidiaries, i.e. Waterflow, Pathum Thani Water and BJT. Prepared by Kasikorn Securities Public Company Limited