) Related Party Transaction

Such support is in accordance with the form of a long-term loan to Pathum Thani Water in case of the sponsor support agreement. any cash shortfall, at the interest rate of MLR+0.125% per annum which was changed to MLR-0.5% per annum since October 2006. The repayment shall be in accordance with the conditions as specified in the loan agreement, whereby 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) - Long-term loan and - - Pathum Thani Water shall first repay the loan to the accrued interests financial institution lenders prior to using excess cash to repay the sponsors. Such sponsors did not require any security against such lending. - Tap water income 254,943 - - Pathum Thani Water charged CH. Karnchang for tap water - The tap water income as charged to CH. used for construction at the same rate as that applicable to Karnchang is at the same price as the sale - Accounts receivable - 15,888 - the PWA. price to the PWA, and as such, this is a tap water charge reasonable value. 2.3 Transactions with BJT Water which is the Company's subsidiary - Administration expenses 2,060,820 - - BJT Water executed the secondment agreement with CH. - This is essential for the business operation Karnchang, whereby CH. Karnchang sent its personnel to of BJT Water since BJT Water does not carry out works in respect of personnel management and have its own personnel and administration administration to BJT Water, on a yearly basis, from 1 units. - January to 31 December, at the rates for the years 2006 - It is deemed appropriate for BJT Water to - Accrued administration 183,756 and 2007 amounting to Baht 160,500 per month and Baht terminate the secondment agreement with expenses 171,735 per month, respectively. CH. Karnchang or employ such personnel as staff of BJT Water or recruit replacement personnel. - BJT Water took on lease of an office space from CH. - Such rental rate is not higher than Karnchang for use as its office, at the rate of Baht 128 per the market price as compared to that square meter per month or amounting to Baht 27,178 per 135,884 611,482 - Office rental of adjacent areas. month since 1 November 2007. In this regard, other than the (November- monthly office rental, BJT Water shall also be liable for other December 2007) relevant expenses, such as, telephone or various public utility charges, etc. - Accrued rental - 18,024 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 a subsidiary. 3. BJT Water Transactions with Pathum Thani - The Company is a major Water which is the Company's shareholder of Pathum Thani subsidiary Water, holding 98.0 percent - Tap water production cost 137,143,417 198,359,556 - Before 26 January 2007, Pathum Thani Water Co., Ltd. engaged - The rate of maintenance fee for the year of shares as of 31 Pathum Thani Operations Co., Ltd. ("Pathum Thani Operations") to 2006 is the value charged to Pathum December 2007, and carry out operation and maintenance (O&M) and Pathum Thani Thani Water as actual cost of BJT Water - Difference of management 951,813 - Pathum Thani Water is a Operations then engaged BJT Water to be responsible for costs of without any margin for such advance cost - electricity major shareholder of BJT labor and supplies for production only, while Pathum Thani Water payment. Water, whereby Pathum bears the maintenance expenses. In 2006, BJT Water made - The rate of service charges for the tap - Trade accounts receivable 13,285,197 38,085,736 Thani Water starts to hold advance payment of maintenance expenses and subsequently water production in 2007 is lower than shares in BJT Water collected the same from Pathum Thani Water. the previous rate that Pathum Thani representing 99.99 percent - Electricity charge - Pathum Thani Water engaged BJT Water as the contractual party Water engaged Pathum Thani 995,659 - as of 26 January 2007. to the O&M agreement on 26 January 2007 to produce tap water Operations prior to terminating the - Two directors of BJT Water, to BJT Water, at the service charge rate of Baht 2.40 per cubic former O&M agreement, namely, Baht namely, 1) Mr. Sahachai meter after Pathum Thani Water had terminated the former O&M 2.93 per cubic meter, covering Hengtrakool and 2) Mr. agreement with Pathum Thani Operations. The new rate of service electricity, chemical, labor and supplies Somkiat charges as paid to BJT Water included chemical, labor and costs. The rate of service charges as Pattamamongkolchai, serve supplies costs for operations, as well as electricity charges at the collected by BJT Water from Pathum as the Company's fixed rate in each year and adjusted in the following year under Thani Water is Baht 2.4 per cubic executives. consumer price index (namely, Pathum Thani Water owns the meter, covering chemical, labor and electricity meter and would calculate the difference between actual supplies costs. However, since 26 electricity charge and electricity charge at the rate under the January 2007, Pathum Thani Water agreement, the difference of which shall be collected from or invested in BJT Water at the rate of returned to BJT Water every three months). However, in 2008, BJT 100.0 percent. Therefore, such service Water charged Pathum Thani Water for the electricity in full and charge rate does not give rise to any included the same in the service charges. conflict of interest. - Telephone charges 243,045 183,807 - BJT Water used telephone numbers registered in the name - The telephone charges and of Pathum Thani Water. In 2006, the telephone numbers insurance premiums are calculated used by BJT Water covered only the management areas. based on the actual costs without However, after 26 January 2007, Pathum Thani Water any margin on such costs. - Trade accounts receivable - 23,402 22,620 engaged BJT Water as the contractual party to the O&M electricity and telephone agreement, thereby allowing BJT Water to use additional charges 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) lines. - As for insurance premiums for vehicles which are assets of - Other expenses - car 16,003 - Pathum Thani Water and used by BJT Water for the service insurance premiums of tap water production, BJT Water bears expenses in respect of insurance premiums incurred during the year instead of Pathum Thani Water. 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 was an associated 4. Pathum Thani 4.1 Transactions with Pathum Water company before 21 July Thani Water which is the Operations 2006. Company's subsidiary - Prior to 21 July 2006, the - - Tap water production 24,338,798 - Pathum Thani Water engaged Pathum Thani Operations as - This rate of service charges is in major shareholders, namely, cost (1-25 January the contractual party to the O&M agreement on 23 April accordance with the agreement as CH. Karnchang Holding Co., 2007) 1999 to produce tap water to Pathum Thani Water, at the mutually agreed. Ltd. and Mahasiri Siam Co., service charge rate of Baht 2.26 per cubic meter from the Ltd., held shares date of the agreement signing. In addition, such rate shall representing 36.00 percent be adjusted on a yearly basis under consumer price index and 48.59 percent, each year. Such service charges included electricity, respectively. After 21 July chemical, labor and supplies costs for operations. In 2006, CH. Karnchang January 2007, such rate of the service charges was Baht Holding Co., Ltd. and 2.93 per cubic meter. Mahasiri Siam Co., Ltd. sold - Telephone charges 15,253 - - Pathum Thani Operations used telephone numbers - This rate is charged to each other their shares held in Pathum registered in the name of Pathum Thani Water and used based on actual costs without any Thani Operations to other electricity for tap water production and its operations, margin on such costs. - Trade accounts - - juristic persons. whereby Pathum Thani Water owned the electricity meter. receivable - electricity - Mahasiri Siam Co., Ltd. is a Therefore, at the end of each month, Pathum Thani Water and telephone charges major shareholder of CH. would collect electricity charges as actually incurred from Karnchang, holding 19.24 Pathum Thani Operations. percent of shares as of 9 April 2007. 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) - CH. Karnchang Holding Co., - Compensation for 385,000,000 - - On 26 January 2007, Pathum Thani Water terminated the - The compensation for termination of Ltd. is a major shareholder termination of the O&M O&M agreement with Pathum Thani Operations since the O&M agreement is calculated by of CH. Karnchang, holding agreement Pathum Thani Water restructured its business operation by the discounted cash flow method 10.04 percent of shares as purchasing BJT Water and entered into the new O&M from the value of future cash flow of - Compensation payable 113,300,699 - of 9 April 2007. agreement with BJT Water. Such restructuring caused Pathum Thani Operations as for termination of the (including - CH. Karnchang is a major Pathum Thani Water to be able to reduce costs for assessed by Seamico Public O&M agreement accrued shareholder of the operation and maintenance (O&M). As for such Company Limited and Far East interest) Company, holding 47.69 termination of the agreement, Pathum Thani Water Securities Company Limited as its - Interest expenses for 13,878,123 - percent of shares. compensated Pathum Thani Operations in the amount of independent financial advisors. The termination of the O&M - Prior to 31 July 2006, three Baht 385 Million. In this regard, on the date of termination compensation paid to Pathum Thani agreement directors of Pathum Thani of the agreement, Pathum Thani Water made payment for Operations is lower than the value as Operations, namely, 1) Mr. the compensation of Baht 125 Million, with the remainder assessed by the independent Sompodh Sripoom, serves to be paid in five installments, together with interest, by 30 financial advisors. In addition, such as director and Managing April 2008. transaction has already been Director of the Company, 2) resolved by the Board of Directors Mr. Sombat Kitjalaksana and and the meeting of the shareholders 3) Mr. Prasert Marittanaporn of Pathum Thani Water. serve as the Company's directors. - At present, there is no relationship by way of common directors. 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) 4.2 Transactions with BJT Water which is the Company's subsidiary - Income from service 6,894,608 - - Pathum Thani Operations engaged BJT Water as the - This rate of service charges is in charges for tap water (1-25 January contractual party to the O&M agreement on 12 May 1999 accordance with the agreement as production 2007) to produce tap water, under the engagement of Pathum mutually agreed. Thani Operations by Pathum Thani Water, whereby BJT - Trade accounts - - Water charged Pathum Thani Operatioins at the rate of receivable Baht 0.7-1.43 per cubic meter, depending on the average daily water volume as produced and distributed. In addition, such rate shall be adjusted on a yearly basis under consumer price index each year. Such service charges included labor and supplies costs for operations. In January 2006, such rate of the service charges was Baht 0.83 per cubic meter. - On 26 January 2007, Pathum Thani Water terminated the O&M agreement with Pathum Thani Operations since Pathum Thani Water restructured its business operation by purchasing BJT Water and entered into the new O&M agreement with BJT Water. Such restructuring caused Pathum Thani Water to be able to reduce costs for operation and maintenance (O&M). Person/Juristic 2007 2008 Nine- Person who may Transaction Month Period Relationship Nature of Transaction Necessity/Justification Pricing Policy have conflict of (more)