) Related Party Transaction

Shareholders Number of Shares Shareholding (%) 1. CH. Karnchang Public Company Limited 1,408,777,400 35.31% 2. Mitsui Water Holdings (Thailand) Co., Ltd. 1,032,500,000 25.88% 3. Bangkok Expressway Public Company Limited 368,750,000 9.24% 4. HSBC (SINGAPORE) NOMINEES PTE LTD 166,524,600 4.17% 5. Thai NVDR Co., Ltd. 152,179,774 3.81% 6. Bangkok Bank Public Company Limited 73,895,000 1.85% 7. STATE STREET BANK AND TRUST COMPANY FOR LONDON 61,720,200 1.55% 8. SOCIETE GENERALE 57,796,600 1.45% 9. CHASE NOMINEES LIMITED 1 52,703,600 1.32% 10. AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-APEX 28,805,100 0.72% 13. Related Party Transactions in the Previous Year and the Current Year until the Third Quarter of 2008 During the nine-month period ending September 2008 and in 2007, the Company and its subsidiaries entered into related party transactions with persons who may have conflict of interest, with the following details: 1. WaterFlow Relationship : This is a subsidiary. The Company is a major shareholder of WaterFlow, holding 100.0 percent of shares as of 27 February 2006. Two directors of WaterFlow, namely, 1) Mr. Sompodh Sripoom, serves as director and Managing Director of the Company, and 2) Mr. Sahachai Hengtrakool, serves as the Company's executive. Nature of Transaction: Transactions with the Company - Costs of sales of tap water 23,148,209 - Trade accounts payable 4,639,703 2,525,162 commencement to March 2006, whereby WaterFlow shall be on special expertise. shares as of 27 February liable for electricity, chemical and labor costs as incurred by - The payment is made under the 2006. production, including costs of supplies to the Company, together agreement as mutually agreed since - Two directors of WaterFlow, with repair and maintenance of the tap water production, the commencement of the project namely, 1) Mr. Sompodh transmission and distribution systems. Since the electricity meter without payment in excess of the Sripoom, serves as director is under the name of the Company, therefore, the Company amount as specified in the and Managing Director of subsequently collected the electricity charges as advanced by the agreement. the Company, and 2) Mr. Company from WaterFlow. From 1 April 2006, the Company and - The amendment of the agreement on Sahachai Hengtrakool, WaterFlow amended the operation and maintenance (O&M) 1 April 2006 does not make the serves as the Company's agreement, whereby WaterFlow shall be liable only for labor costs Company to lose any benefits and is executive. as incurred by production and supplies to the Company made to restructure the management throughout the term of the Water Purchase and Sale Agreement since WaterFlow became the between the Company and the PWA, at the service charge at the Company's subsidiary. rate/cubic meter which shall be adjusted annually based on the consumer price index. The service charge from January to March 2006 equaled Baht 3.555312 per cubic meter, the service charge from April to December 2006 equaled Baht 0.25 per cubic meter and that in 2007 and 2008 equaled Baht 0.258613 per cubic meter and Baht 0.267226 per cubic meter, respectively. Person/Juristic 2007 2008 Nine- Person who may Transaction Month Period Relationship Nature of Transaction Necessity/Justification Pricing Policy have conflict of Value Transaction interest (Baht) Value (Baht) - Other accounts receivable - 4,572,068 4,572,068 - According to the former O&M agreement, WaterFlow shall - This is in accordance with the O&M discount on excess tap give the Company a discount on water production costs as agreement, specifying that such water charges saved from sales of tap water to the PWA in the amount discount shall be returned upon less than MOQ. However, after amending the O&M completion of payment of all loans to agreement on 1 April 2006, such condition was cancelled. financial institution lenders of the Company. - Office rental 76,774 90,000 - WaterFlow moved from Viriyathavorn Building owned by - This rental rate is reasonable. In CH. Karnchang to the Company's Head Office for use as addition, WaterFlow is a subsidiary in - Other accounts receivable - 10,000 10,000 its general business premises, at the rental of Baht 10,000 which the Company holds 100.0 rental of office space per month, covering a total leased area of 72.47 square percent of its shares, thereby giving meters, being a rental rate of Baht 138 per square meter rise to no conflict of interest. per month, from 11 May 2007 to 31 December 2008. - Management and 1,200,000 900,000 - WaterFlow engaged the Company to manage and - This rate of administration fee is suitable administration income administer supporting works under the service agreement, for cost and time allocation of the namely, accounting and finance, administration, Company's staff in relation to works procurement, warehouse, personnel, business performed for WaterFlow. WaterFlow is a - Other accounts receivable - 107,000 107,000 development and public relations, at the service charge of subsidiary in which the Company holds management and Baht 100,000 per month, from 1 January 2007 to 31 100.0 percent of its shares, thereby giving administration fees December 2008. rise to no conflict of interest. - Security under the 5,000,000 5,000,000 - The security under the O&M agreement dated 12 June - The security is in accordance with agreement 2001. the executed O&M agreement. Person/Juristic 2007 2008 Nine- Person who may Transaction Month Period Relationship Nature of Transaction Necessity/Justification Pricing Policy have conflict of Value Transaction interest (Baht) Value (Baht) - This is an associated 2. CH. Karnchang 2.1 Transactions with the company. Company - This is a major shareholder - The Company 1,892,905,460 - - On 29 June 2007, the Company purchased 5,067,371 - The purchase of ordinary shares in of the Company, holding purchased ordinary ordinary shares held by CH. Karnchang in Pathum Thani Pathum Thani Water is intended to 35.3 percent of shares as of shares held by CH. Water at the price of Baht 340 per share, and on 14 minimize conflict of interest. In 30 September 2008. Karnchang in Pathum December 2007, the Company additionally purchased addition, the trading price is in the - This was a major Thani Water. 499,998 ordinary shares in Pathum Thani Water at the range of the prices as assessed by shareholder of Pathum Thai price of Baht 340 per share, totaling Baht 1,892,905,460. SCMB Co., Ltd. and Seamico Water, holding 46.39 Such purchase of ordinary shares in Pathum Thani Water Securities Public Company Limited percent of shares as of 11 is intended to minimize conflict of interest which may arise as engaged by the Company to June 2007 and 4.17 percent since the Company's major shareholder, namely, CH. assess the value of shares in Pathum of shares as of 12 Karnchang Group, which previously was a major Thani Water. SCMB Co., Ltd. September 2007, shareholder of Pathum Thani Water, operates the same assessed that the fair price of respectively. business as the Company. Pathum Thani Water is in the range - Two directors who are of Baht 314.58-378.29 per share and executive directors and Seamico Securities Public Company executives of CH. Limited assessed that the fair price Karnchang, namely, 1) Mr. of Pathum Thani Water is in the Plew Trivisvavet, serves as range of Baht 389.78-466.35 per the Chairman of the Board share. In this regard, the Board of of Directors of the Company, Directors' Meeting No. 8/2550 on 8 and 2) Mr. Narong June 2007 and the Extraordinary Sangsuriya, serves as General Meeting of Shareholders No. director and executive 1/2550 on 25 June 2007 unanimously director of the Company. resolved to approve such transaction, - Two executives of CH. whereby the interested shareholders Karnchang, namely, 1) Mr. without the right to vote on such Sombat Kitjalaksana, serves transaction of the Company included as director and executive CH. Karnchang and TMB Bank Public director of the Company, Company Limited. Furthermore, the Person/Juristic 2007 2008 Nine- Person who may Transaction Month Period Relationship Nature of Transaction Necessity/Justification Pricing Policy have conflict of Value Transaction interest (Baht) Value (Baht) and 2) Mr. Prasert Board of Directors' Meeting of CH. Marittanaporn, serves as Karnchang No. 3/2007 on 26 March director of the Company. 2007 and the 2007 Annual Ordinary General Meeting of Shareholders of CH. Karnchang on 30 April 2007 unanimously resolved to approve such transaction, whereby the interested shareholders without the right to vote on such transaction of CH. Karnchang included Mahasiri Siam Co., Ltd., CH. Karnchang Holding Co., Ltd., CK. Office Tower Co., Ltd., Bang Pa-in Land Development Co., Ltd., Mr. Plew Trivisvavet, Mr. Thavorn Trivisvavet and Mr. Kamthorn Trivisvavet. Person/Juristic 2007 2008 Nine- Person who may Transaction Month Period Relationship Nature of Transaction Necessity/Justification Pricing Policy have conflict of Value Transaction interest (Baht) Value (Baht) - Provision of sponsor Up to Up to - The Company executed a long-term loan agreement with a - Such support is in accordance with support to the Company 1,000,000,000 1,000,000,000 group of financial institutions on 9 March 2001, with the total loan the sponsor support agreement and for the business of Baht 7,000 Million, due for repayment on a quarterly basis until for the benefit of the Company. operation should the the year 2013, for construction of all water production plants and Company face any cash water distribution systems of the Company. According to such shortfall. loan agreement, CH. Karnchang, as the Company's major shareholder, shall extend the financial support in case of any cash shortfall, in an amount of not exceeding Baht 1,000 Million. In this regard, CH. Karnchang did not charge any guarantee fees. Provision of bridge Up to - - The Company executed a loan agreement with two financial - Such support is in accordance with - financing support to 1,503,000,000 institutions on 27 June 2007 for purchase of Pathum Thani Water, the sponsor support agreement and lenders for the short-term divided into a short-term loan of Baht 3,000 Million due for for the benefit of the Company. loan repayment should repayment within one year and a long-term loan of Baht 1,000 the Company be unable Million due for repayment within July 2013. According to such to list the ordinary shares loan agreement, CH. Karnchang, as the Company's major as listed securities within shareholder, shall be one of the sponsors accounting for 50.10 one year from the loan percent of the short-term loan should the Company be unable to drawdown date or in case list the ordinary shares as listed securities within one year from the proceeds from the loan drawdown date or in case the proceeds from offering for offering for sale of shares sale of shares for capital increase on the Stock Exchange are for capital increase on the insufficient to repay the short-term loan. In this regard, CH. Stock Exchange are Karnchang did not charge any guarantee fees. insufficient to repay the - In May 2008, the Company has already repaid the short- short-term loan. term loan in full. 2.2 Transactions with Pathum Thani Water which is the Company's subsidiary - Construction in progress 542,592,150 44,370,269 - Pathum Thani Water engaged CH. Karnchang to construct the - Given the tap water demand in Pathum of assets for tap water extension of the tap water production plants and the tap water Thani areas exceeds the maximum production distribution systems with the production capacity of 100,000 Person/Juristic 2007 2008 Nine- Person who may Transaction Month Period Relationship Nature of Transaction Necessity/Justification Pricing Policy have conflict of Value Transaction interest (Baht) Value (Baht) cubic meters per day on 20 March 2007, at the total construction production capacity of Pathum Thani - Advance payment of 42,592,517 13,353,536 value of Baht 693.1 Million, whereby CH. Karnchang Water at that time, it is then deemed construction commenced the construction for Pathum Thani Water since appropriate to expand the production - Construction payable 23,816,681 - February 2006. Moreover, CH. Karnchang was recorded as capacity for the benefit of Pathum Thani - Retention payable 1,251,169 1,192,891 creditor in respect of advance payment for such constructed Water. works. In this regard, Pathum Thani Water commenced to pay for the construction works to CH. Karnchang on 9 August 2007 - Pathum Thani Water reviews the construction value against the after Pathum Thani Water Co., Ltd. had signed a loan agreement moderate price of the project by with a financial institution on 21 June 2007. In December 2007, considering the construction value as Pathum Thani Water executed an additional construction assessed by two appraisal companies, contract at the value of Baht 35,010,740, with an advance which is similar to the price as Pathum payment of 15%. - According to the conditions of the long-term loan agreement Thani Water engaged CH. Karnchang - Interest expenses 2,506,203 - between Pathum Thani Water and a group of financial institutions and comparable to the subcontractors' dated 29 January 1998, CH. Karnchang, as Pathum Thani prices. Water's major shareholder, shall extend the sponsor support in - (more)