) IFA's Opinion regarding the connected transaction of TTW

BTM to PTW's three distribution stations, namely, Rangsit Distribution Station, Thammasat Distribution Station and Pathum Thani Distribution Station, and water is then pumped through the distribution pipes, which are PWA's property, for distribution to the public in the service areas of the Pathum Thani and Rangsit Waterworks Offices. 1.6.3 Revenue Structure of the Company and its subsidiaries Revenue Structure of the Company and its subsidiaries over the past three years and as of the latest accounting period is summarized in the below table: Type of revenue 2006 2007 2008 Q1/2009 Bt. mil. % Bt. mil. % Bt. mil. % Bt. mil. % Income from tap water 1,697.80 98.58 2,567.03 97.86 3,569.26 98.09 943.03 98.59 business Service income 1/ - - 23.04 0.88 36.01 0.99 9.79 1.02 Other income 2/ 24.39 1.42 33.16 1.26 33.53 0.92 3.69 0.39 Total revenues 1,722.19 100.00 2,623.23 100.00 3,638.79 100.00 956.51 100.00 Note: 1/ Income from tap water production of BJT, a subsidiary of PTW, for Amata City Industrial Estate 2/ Mostly interest income. 1.6.4 The Board of Directors The Board of Directors as of June 2, 2009 is as follows: Page 27 of the total 92 pages The Opinion Report of the Independent Financial Advisor Name Position 1. Mr. Thanong Bidaya Chairman of the Board of Directors and Independent Director 2. Mr. Sompodh Sripoom Managing Director 3. Mr. Plew Trivisvavet Director 4. .Mr. Narong Sangsuriya Director 5. Mr. Suvich Pungchareon Director 6. Mr. Prasert Marittanapon Director 7. Mr. Sombat Kitjalaksana Director 8. Mr. Koichi Wakana Director 9. Mr. Kazushige Katamura Director 10. Mr. Techapit Sangsingkeo Independent Director and Chairman of the Audit Committee 11. .Mr. Phairuch Mekarporn Independent Director and Member of the Audit Committee 12. Mr. Somnuk Chaidejsuriya Independent Director and Member of the Audit Committee Source: The Company's affidavit 1.6.5 The Shareholders TTW's shareholders as of June 16, 2009 are listed below: Name No. of shares % of paid-up capital 1. CH. Karnchang Plc. 1,408,777,400 35.31 2. Mitsui Water Holdings (Thailand) Ltd. 1,032,500,000 25.88 3. Bangkok Expressway Plc. 368,750,000 9.24 4. HSBC (Singapore) Nominees Pte. Ltd. 202,992,100 5.09 5. State Street Bank and Trust Company for London 147,630,000 3.70 6. Bangkok Bank Plc. 73,895,000 1.85 7. Thai NVDR Co., Ltd. 71,919,700 1.80 8. Chase Nominees Limited 1 61,141,000 1.53 9. State Street Bank and Trust Company for Australia 31,327,200 0.79 10. American International Assurance Company-APEX 25,000,000 0.63 Total 3,423,932,400 85.81 Source: TTW's shareholder registration Note: See details about connected persons who are TTW's shareholder in Appendix 3. 1.6.6 The Shareholding Structure As of March 31, 2009: Page 28 of the total 92 pages The Opinion Report of the Independent Financial Advisor TTW Registered capital of Bt. 3,990 million Paid-up capital of Bt. 3,990 million 98.0% 100% PTW WaterFlow Registered capital of Bt. 1,200 million Registered capital of Bt. 10 million Paid-up capital of Bt. 1,200 million Paid-up capital of Bt. 10 million 100% BJT Registered capital of Bt. 50 million Paid-up capital of Bt. 50 million 1.6.7 Summary on Financial Position and Performance Balance sheet Here is the balance sheet of the Company and its subsidiaries as of December 31 and March 31: (Unit: Thousand Baht ) 2006 2007 2008 Q1/2009 Description Amount % Amount % Amount % Amount % Assets Current assets Cash and cash equivalents 356,130 3.33% 776,850 4.16% 850,643 4.75% 2,084,542 10.93% Current investments 695,000 6.51% 745,302 3.99% 299,941 1.68% 299,948 1.57% Restricted bank deposits - 0.00% 184,483 0.99% 257,676 1.44% 307,802 1.61% Trade accounts receivable 217,596 2.04% 292,705 1.57% 346,798 1.94% 352,383 1.85% Other receivable - Related party - 0.00% 16 0.00% 89 0.00% 21 0.00% Raw materials and supplies 6,685 0.06% 14,117 0.08% 18,326 0.10% 19,730 0.10% Advance payment for construction - Related party - 0.00% 42,593 0.23% 95,839 0.54% 95,839 0.50% Advance payment for construction - Unrelated party - 0.00% - 0.00% - 0.00% 63,000 0.33% Other current assets Interest receivable 10,223 0.10% 8,172 0.04% 3,756 0.02% 2,167 0.01% Prepaid expenses 18,004 0.17% 33,768 0.18% 20,019 0.11% 16,311 0.09% Withholding tax deducted at source - 0.00% 13,650 0.07% 33,952 0.19% 30,602 0.16% Prepaid interest - 0.00% - 0.00% - 0.00% - 0.00% Others 3,023 0.03% 30,574 0.16% 13,958 0.08% 5,654 0.03% Total current assets 1,306,661 12.23% 2,142,230 11.47% 1,940,997 10.85% 3,277,999 17.20% Non-current assets Page 29 of the total 92 pages The Opinion Report of the Independent Financial Advisor (Unit: Thousand Baht ) 2006 2007 2008 Q1/2009 Description Amount % Amount % Amount % Amount % Investments in subsidiaries - 0.00% - 0.00% - 0.00% - 0.00% Property, plant and equipment, net 9,355,964 87.59% 9,196,857 49.23% 8,925,500 49.88% 8,853,646 46.44% Assets for production of treated water that must be transferred at - 0.00% 4,258,205 22.79% 4,134,413 23.10% 4,074,242 21.37% end of concession, net Rights to produce and sell treated water, net - 0.00% 3,079,619 16.49% 2,884,138 16.12% 2,836,070 14.88% Other non-current assets Withholding tax deducted at source 4,272 0.04% 3,634 0.02% 2,560 0.01% 10,408 0.05% Deposits - 0.00% - 0.00% - 0.00% 6,912 0.04% Others 15,048 0.14% 604 0.00% 7,025 0.04% 4,000 0.02% Total non-current assets 9,375,285 87.77% 16,538,919 88.53% 15,953,636 89.15% 15,785,278 82.80% Total assets 10,681,946 100.00% 18,681,149 100.00% 17,894,633 100.00% 19,063,277 100.00% Liabilities and shareholders' equity Current liabilities Bank overdrafts and short-term loans from financial institutions - 0.00% 3,004,836 16.08% 354 0.00% - 0.00% Trade accounts payable Related party 260 0.00% - 0.00% - 0.00% - 0.00% Unrelated party 31,503 0.29% 58,897 0.32% 49,208 0.27% 25,345 0.13% Amounts due to related party - 0.00% 137,340 0.74% 102,581 0.57% 31 0.00% Amounts due to unrelated party - 0.00% - 0.00% 6,696 0.04% - 0.00% Other payables - 0.00% - 0.00% - 0.00% 5,749 0.03% Retention payable Related party - 0.00% 1,251 0.01% - 0.00% - 0.00% Unrelated party 2,150 0.02% 3,177 0.02% 3,897 0.02% 2,355 0.01% Current portion of long-term loans from financial institutions 700,000 6.55% 1,411,800 7.56% 1,103,955 6.17% 505,000 2.65% Other current liabilities Accrued expenses 18,428 0.17% 47,440 0.25% 45,036 0.25% 69,438 0.36% Unbilled output tax 9,940 0.09% 20,339 0.11% 21,840 0.12% 23,358 0.12% Value added tax payable 8,145 0.08% 10,606 0.06% 13,140 0.07% 16,995 0.09% Others 1,659 0.02% 9,377 0.05% 6,153 0.03% 1,626 0.01% Total current liabilities 772,085 7.23% 4,705,063 25.19% 1,352,859 7.56% 649,897 3.41% Non-current liabilities Retention - subsidiary - 0.00% - 0.00% - 0.00% - 0.00% Debentures, net - 0.00% - 0.00% - 0.00% 6,986,946 36.65% Long-term loans from financial institutions, net of current portion 6,020,000 56.36% 9,261,312 49.58% 8,205,391 45.85% 2,781,401 14.59% Total non-current liabilities 6,020,000 56.36% 9,261,312 49.58% 8,205,391 45.85% 9,768,347 51.24% Total liabilities 6,792,085 63.58% 13,966,376 74.76% 9,558,249 53.41% 10,418,244 54.65% Shareholders' equity Share capital Registered 3,990,000,000 ordinary shares of Baht 1 each 3,990,000 3,990,000 3,990,000 3,990,000 Issued and fully paid up 3,290,000,000 ordinary shares of Baht 1 each (2006: 3,250,000,000 ordinary shares of Baht 1 each) 3,250,000 30.43% (2007-Q1/2009 : 3,290,000,000 ordinary shares of Baht 1 each) 3,290,000 17.61% 3,990,000 22.30% 3,990,000 20.93% Share premium 475,000 4.45% 483,000 2.59% 2,637,770 14.74% 2,637,770 13.84% Retained earnings Appropriated - statutory reserve 51,602 0.48% 399,000 2.14% 399,000 2.23% 399,000 2.09% Page 30 of the total 92 pages The Opinion Report of the Independent Financial Advisor (Unit: Thousand Baht ) 2006 2007 2008 Q1/2009 Description Amount % Amount % Amount % Amount % Appropriated - other reserve - 0.00% - 0.00% 72,447 0.40% 72,447 0.38% Unappropriated 713,621 6.68% 1,123,775 6.02% 1,811,237 10.12% 2,117,005 11.11% Difference on reorganization of business of group companies (600,363) -5.62% (600,363) -3.21% (600,363) -3.35% (600,363) -3.15% Equity attributable to the company's shareholders 3,889,861 36.42% 4,695,412 25.13% 8,310,090 46.44% 8,615,859 45.20% Minority interest - equity attributable to minority shareholders of - 0.00% 19,361 0.10% 26,294 0.15% 29,174 0.15% subsidiaries Total shareholders' equity 3,889,861 36.42% 4,714,773 25.24% 8,336,384 46.59% 8,645,033 45.35% Total liabilities and shareholders' equity 10,681,946 100.00% 18,681,149 100.00% 17,894,633 100.00% 19,063,277 100.00% Income statements The income statements of the Company and its subsidiaries for the periods ended December 31 and March 31 are as follows: (Unit: Thousand Baht) 2006 2007 2008 Quarter 1/2009 Description Amount % Amount % Amount % Amount % Revenues Sales of treated water 1,697,802 98.58% 2,567,034 97.86% 3,569,256 98.09% 943,029 98.59% Service income - 0.00% 23,038 0.88% 36,010 0.99% 9,794 1.02% Interest income 24,385 1.42% 32,895 1.25% 30,593 0.84% 3,547 0.37% Dividend income - 0.00% - 0.00% - 0.00% - 0.00% Other income - 0.00% 266 0.01% 2,933 0.08% 144 0.02% Total revenues 1,722,186 100.00% 2,623,232 100.00% 3,638,792 100.00% 956,514 100.00% Expenses Costs of sales of treated water and services 496,142 28.81% 780,802 29.76% 1,176,902 32.34% 301,912 31.56% Selling & administrative expenses 105,062 6.10% 125,108 4.77% 168,236 4.62% 34,590 3.62% Management benefit expenses - 0.00% - 0.00% - 0.00% 7,169 0.75% Amortization of investments in subsidiaries - 0.00% - 0.00% - 0.00% - 0.00% Amortization of rights to produce and sell - 0.00% 89,490 3.41% 195,480 5.37% 48,069 5.03% treated water Total expenses 601,204 34.91% 995,401 37.95% 1,540,619 42.34% 391,740 40.95% Income before finance cost and corporate 1,120,983 65.09% 1,627,832 62.05% 2,098,173 57.66% 564,774 59.05% income tax Finance cost - 0.00% (670,583) -25.56% (728,699) -20.03% (256,126) -26.78% Interest expenses (437,016) -25.38% - 0.00% - 0.00% - 0.00% Corporate income tax (2,071) -0.12% (14,037) -0.54% (2,133) -0.06% - 0.00% Income after corporate income tax 681,896 39.59% 943,212 35.96% 1,367,342 37.58% 308,648 32.27% Net income before share purchase from existing (7,490) -0.43% - 0.00% - 0.00% - 0.00% holders Net income attributable to minority interests of - 0.00% - 0.00% - 0.00% - 0.00% the subsidiaries Net income before profit sharing 674,406 39.16% 943,212 35.96% 1,367,342 37.58% 308,648 32.27% Minority interests of the subsidiaries 0 0.00% 23,160 0.88% 8,934 0.25% 2,880 0.30% Net income for the period 674,406 39.16% 920,051 35.07% 1,358,408 37.33% 305,768 31.97% Page 31 of the total 92 pages The Opinion Report of the Independent Financial Advisor Cash flow statements The cash flow statements of the Company and its subsidiaries for the periods ended December 31 and March 31 are as follows: (Unit: Thousand Baht) 2006 2007 2008 Quarter 1/2009 Description Amount Amount Amount Amount Net cash flows from operating activities 740,248 1,617,597 2,696,514 396,313 Net cash flows from investing activities (1,099,712) (4,383,919) 206,127 - 123,978 Net cash flows from financing activities 328,000 3,062,042 (2,828,848) 961,564 Net increase (decrease) in cash and cash equivalents (31,464) 295,720 73,793 1,233,899 Cash and cash equivalents at beginning of period 387,595 481,130 776,850 850,643 Cash and cash equivalents at end of period 356,130 776,850 850,643 2,084,542 Source: The consolidated financial statements of TTW audited and reviewed by Mr. Supachai Phanyawattano, Certified Public Accountant (Thailand) No. 3930, Ernst & Young Office Limited Note: The shareholders can search for more information from Form 56-1 and the audited or reviewed financial statements from the website of the SEC (www.sec.or.th) or the SET (www.set.or.th). Financial ratios Description 2006 2007 2008 3-month period/2009 Liquidity ratios Liquidity ratio (times) 1.69 0.46 1.43 5.04 Quick ratio (times) 1.64 0.39 1.11 4.21 Cash flow ratio (times) 1.39 0.59 0.89 0.40 10.90 1/ Receivables turnover (times) 9.87 10.15 11.28 33 1/ Collection period (days) 36 35 32 Inventory turnover ratio (times) n.a. n.a. n.a. n.a. Average sale period (days) n.a. n.a. n.a. n.a. 32.40 1/ Account payable turnover (times) 7.76 17.22 21.77 11 1/ Payment period (days) 46 21 17 Cash cycle (days) n.a. n.a. n.a. n.a. Profitability ratios Gross profit margin (%) 70.78% 69.85% 67.36% 68.31% Operating profit margin (%) 66.03% 62.85% 58.20% 59.27% Quality of earnings (%) 66.04% 99.37% 128.52% 17.54% Net profit margin (%) 39.16% 35.07% 37.33% 31.97% (more)