) Information Memorandum : TTW(Amendment in Statistical Table)

required quantity and quality of tap water within the specified timeframe, it becomes a defaulting party. As a result, PWA may terminate the Agreement immediately without compensation to Pathum Thani Water. If PWA does not exercise its right to terminate the Agreement, it may daily fine Pathum Thani Water at the rate of 0.2% of the value of the Minimum Off-take Quantity multiplied by the then applicable water charge rate. The daily fine is accrued from the date on which Pathum Thani Water is in default to the date on which it resumes complying with the Agreement. For calculation purposes, any fraction of a day is rounded up. Prior notice of the fine or any compensation is not required. Alternatively, if PWA does exercise its right to terminate the Agreement, it may seize the security or claim payment from the guarantor under the bank guarantee and claim damages from Pathum Thani Water in relation to its non-compliance with the Agreement. If Pathum Thani Water is also subject to the penalty stated in the above paragraph, PWA may additionally demand payment of the daily fine incurred from the date of default until the date of termination. 3. Waterworks Business Concession Concession Grantor : Ministry of Interior Concessionaire : Pathum Thani Water Date of effective concession : 13 January 2000 Concession term : 25 years from the date of the Concession Objective : To grant a concession to the Concessionaire to provide tap water production and distribution services within the area of Pathumthani-Rangsit or in other areas as the Concession Grantor and the Concessionaire may agree. Right to acquire the tap water business : (1) When the concession business has been operated for half of its full life, the government, municipal authority or sanitation district may acquire the Concessionaire's entire tap water business. In that event, the Concession Grantor may withdraw the Concession to itself to acquire the Concessionaire's business or allow the relevant municipal authority or sanitation district to purchase it, in each case, at the market price, provided that notice must be sent to the Concessionaire at least six months in advance. If the acquisition price cannot be amicably reached, each party must appoint one arbitrator. If the two appointed arbitrators still cannot make a final decision, they must jointly nominate a third arbitrator to give an award. All costs, charges, fees and expenses relating to the appointment of the arbitrators are equally borne by the parties. (2) Upon expiration or termination of the Concession, the Concession Grantor has the option to acquire the Concessionaire's entire tap water business. If the Concession Grantor decides to acquire, it must do the following: (a) Acquisition after the expiration of the Concession: The Concession Grantor must send a written notice of its intent to the Concessionaire at least six months before the Concession expires. (b) Acquisition after the termination of the Concession: The Concession Grantor must send a written notice of its intent to the Concessionaire within three months of the termination of the Concession. Without such a notice or with a notice declining to acquire the business, the Concessionaire may sell the business to a third party. If the acquisition price cannot be concluded, the parties must appoint the arbitrators in accordance with the procedures specified in the Concession. (3) If the Concession Grantor does not wish to acquire the tap water business and the Concessionaire intends to continue its business, the Concessionaire must send a written notice of its intent to the Concession Grantor at least six months before the Concession expires. Transfer of concession : The Concession is non-transferable, unless the Concession Grantor consents in writing and the intended transfer is subject to the conditions which are approved by the Concession Grantor, taking into account the efficient and uninterrupted water supply to the public. Revocation of concession : The Concession Grantor may revoke the Concession at any time during the term of the Concession if any of the following events occurs: (a) The construction and installation of the water plants, facilities and equipment is not completed for prompt distribution of tap water. (b) The Concessionaire does not distribute the tap water. The tap water distribution is disrupted for more than three consecutive days, except a disruption resulting from an act of God. (c) The Concessionaire does not comply with the Concession, including any attachments, schedules or addendums to the Concession. (d) Any material parts of the water plants, facilities and equipment become subject to a court order for seizure. Where the Concession specifically entitles the Concession Grantor to fine the Concessionaire in the event of non-compliance with any provisions of the Concession, the Concession Grantor must not revoke the Concession. However, this rule is waived if the non-compliance continues for one month or for any longer period that the Concession Grantor may determine and a written notice of warning is sent to the Concessionaire at least 15 days before revocation. If no penalty is specified for non-compliance with any provisions of the Concession, except those in (1)(b) and (d) above, the Concession Grantor may fine the Concessionaire Baht 100 for each incident of non-compliance, together with a daily fine of Baht 50 throughout the period of that violation. In that event, the Concession Grantor may not revoke the Concession, unless the violation continues even though written notice of warning has been given to the Concessionaire as specified in the above paragraph. Water charges : The water charges to be collected from the service users are at the rates specified in the Water Production and Distribution Licence Agreement between PWA and the Concessionaire dated 31 August 1995. However, those rates may vary later, depending on the following conditions: (a) If the cost of production increases, the Concessionaire may adjust the water charges in accordance with the Water Production and Distribution Licence Agreement between PWA and the Concessionaire dated 31 August 1995. (b) If, after the end of the 3-year period following the signing of this Agreement, the Concession Grantor receives a request from the municipal authority or sanitation district (which is not the Concessionaire) or any users to adjust the charges or calculation method and, in the Concession Grantor's opinion, the proposed adjustment is sound because of the change in the criteria used as the basis for the existing calculation, then the Concession Grantor may issue a written notice to the Concessionaire ordering the change to fair and reasonable rates. Such an order is binding on the Concessionaire. (c) The Concessionaire may decrease the water charges at any time by giving 15 days' written notice to the Concession Grantor. Termination of concession : The Concession will be terminated for any of the following reasons: (a) the 25-year concession period ends and the Concession is not renewed; (b) the Concessionaire returns the Concession after the Concessionaire's business is dissolved, provided that the Concessionaire gives not less than 6 months' written notice and the Concession Grantor grants written approval; in this event, Chapter 5 of the Concession regarding expiry and revocation of the Concession applies mutatis mutandis; (c) the Concession Grantor withdraws the Concession after the Concessionaire has operated the concession business for 12 years and six months after the execution of the Concession (the Concession was signed on 13 January 2000) and the government or the municipal authority or sanitation district wishes to acquire the entire concession business (whether at the market price or at the price awarded by the arbitrator if the parties cannot agree on the price); or (d) the Concession Grantor revokes the Concession. Dividend payment : A dividend payment is limited to 10% of the Concessionaire's paid-up capital. Any profits left after a dividend has been paid must be transferred to the reserve account which must be made in a fixed deposit with a designated bank. The Concessionaire may allocate any surplus over the 10% limit for investment in bonds or etc. for profit making, provided that the investment transaction obtains prior approval from the Concession Grantor. Fee : With effect from the commencement date of the water distribution, the Concessionaire must pay an annual fee of Baht 5 per cubic metre of the quantity of one hour's full production capacity to compensate the costs and expenses incurred by the Concession Grantor's inspector. The fee of at least Baht 50 or more than Baht 200 per annum must be paid in advance once a year in December. For the first year of operations, the amount paid will be pro rated according to the number of months during which the concession business is operated and the initial payment must be made within three months from the date of beginning operation. However, if the operation begins less than three months before the end of the calendar year, the fee must be paid before the end of that year. Having waived the advantages of the time condition for payment of the above-mentioned annual fee, Pathum Thani Water made a one-off advance payment of the annual fee on the date the Concession was approved. Pathum Thani Water has also waived the refund of that fee in case of early termination of the Concession. 4. Operation and Maintenance Agreement Parties : BJT (the Operator) and Pathum Thani Water (the Employer) Date of Agreement : 26 January 2007 Term of Agreement : From the Commencement Date as stated in the notice of project commencement to Year 2023 Scope of services : (1) The scope of services under this Agreement includes but not limited to the operation, management, routine preventive maintenance and remedial maintenance of the water production system involving the bulk distribution network and water storage ponds. The agreed operating procedures must be strictly followed to ensure the standard quality of the water produced. (2) Professional management of the project is needed ? not limited only to human resources management, technical expertise, efficient communications and water production system maintenance, but also including the manpower specialised in tap water production, lab test, maintenance and repair practices. (3) Any procurement of spare parts for the planned preventive maintenance, essential running and replacement and refurbished plant are at sole expense of the Operator. The Operator also agrees to bear the electricity charges and cost of chemicals used in the water production process. (4) The Operator's production capacity must be efficiently managed to produce the Minimum Off-take Quantity, plus 30%, but not exceeding the maximum production capacity of the water production plant. (5) In addition to the specified scope of services, the Employer may ask for additional services from the Operator, depending on what the parties may agree. Service fee : Details of the monthly service fee rates are set out in Annex K to the Agreement. The fee may vary, depending on the average quantity of daily production in respect of each calendar month multiplied by the total quantity of water actually supplied during the relevant calendar month. The service fee is subject to annual review on 1 January according to the consumer price index. The initial review falls on 1 January 2008. For Year 2007, the service fee rate is Baht 2.40 per cubic metre. Termination of Agreement : (1) The Employer may terminate the Agreement if (i) the quantity or quality of the water supply does not meet the agreed requirements repeatedly as a result of the Operator's fault which is under its control, or (ii) the Operator is in material breach of this Agreement or does not follow the Employer's reasonable advice or demand consistently, and such circumstances cannot be remedied within the specified timeframe. (2) The Operator may terminate the Agreement if the Employer is in default of payment or materially breaches the Agreement and cannot remedy the default within the specified time frame. (3) If the Employer terminates the Water Purchase and Sale Agreement, including the termination because of or force majeure or certain exempted circumstances, it may concurrently terminate this Agreement by sending written notice to the Operator. In that event, the Employer is bound to pay all of the service fees accrued until the date of termination. (4) If PWA terminates the Water Purchase and Sale Agreement on account of the Employer's non- compliance, the Employer may concurrently terminate this Agreement by sending written notice to the Operator. In that event, the Employer is bound to pay all of the service fees accrued until the date of termination, including any reasonable costs and expenses incurred relating to the cancellation of those services. Feasibility Study Thai DCI Company Limited, an engineering consultancy with experience and expertise in engineering survey, feasibility study, engineering design and planning, especially, in relation to the large-scale engineering projects, was engaged by the Company to study the feasibility of the production capacity expansion plan in conjunction with the water demand of users in Nakornpathom and Samutsakorn provinces, which are the service areas under the Water Purchase and Sale Agreement between the Company and PWA. Technical and Management Assistance - None - Future Projects The Company's aim is to continue to be the largest private tap water producer of Thailand. To achieve this, the Company focuses on growth both within and outside of its service areas through two main projects, as follows: 1. Expansion of production capacity and water distribution network to support the increasing demand in Nakornpathom and Samutsakorn provinces The Company studied the feasibility of the production capacity expansion plan in conjunction with the water demand of users, aiming to increase an additional production capacity of 100,000 cubic metres per day, which, when combined with the existing production capacity of 320,000 cubic metres per day, would make the total production capacity equal to 420,000 cubic metre per day in the future. The Company expects that the construction work of this project will take approximately 18 months and this project will require an investment of Baht 1,352 million, which is derived from the cash flow from its own operating activities and from loans. The proposed expansion involves the improvement of the water production plant and two water distribution stations by renovating the existing facilities and adding the new equipment. However, those activities will not cause disruptions to the Company's water distribution systems. 2. Construction of an aluminium potassium sulphate production plant for the Company's tap water production process Aluminium potassium sulphate is one of the core chemical substances used in tap water production. To save on the cost of chemicals, which is meant to be a long-term manufacturing cost-saving measure, and to expand other businesses in addition to the sale of tap water, the Company plans to construct an aluminium potassium sulphate production plant with a production capacity of 50,000 tonne per year, which is expected to meet the existing demand in relation to tap water production. The Company estimates that the investment required will be around Baht 50 million. It is now studying the feasibility of the project, any possible impacts and the investment that would be required, which the Company expects to come from the cash flow from its operations. 3. Expansion of production capacity to accommodate the increasing demand for tap water in Pathumthani Province In February 2006, Pathum Thani Water began the construction of the expanded capacity of 100,000 cubic metres per day, which increases from its existing production capacity of 288,000 cubic metres per day to reach the highest capacity of 388,000 cubic metres per day. This is to support PWA's increasing demand of 70,000 cubic metres of water per day under the Water Purchase and Sale Agreement dated 15 September 2006. The project requires a total investment of Baht 783 million, all of which comes from a loan from a financial institution. The construction is expected to complete by the end of June 2008 (as at the end of 2007, the construction was 83% completed). Connected Party Transactions : Set out below is a summary of connected party transactions between the Company or any persons with potential conflicts of interests in 2006 and 2007. 1. Connected party transactions with subsidiaries 1.1 Connected party transactions between the Company and Waterflow Type of Transaction Value Relationships Connected (Thai Baht) Transaction Description Transaction 2006 2007 - Subsidiary - Tap water 82,826,406 23,148,209 The Company signed an Operation - From 27 February sale cost and Maintenance (O&M) Agreement 2006, wholly owned by to contract Waterflow to produce and the Company (100% - Electricity 31,546,531 - distribute tap water. From the outset shareholding) income of the tap water business until March - Two directors of 2006, Waterflow bore the costs of Waterflow, namely (1) - Trade account 4,550,992 4,639,703 electricity, chemicals, labour arising Mr. Sompodh Sripoom payable from the tap water production as well and as the consumable material cost for (2) Mr. Sahachai the Company, including the Hengtrakul are maintenance cost for tap water (1) director and production, transmission and managing director and distribution systems. However, (2) executive of the because the electricity metre was Company, respectively. registered under the Company's name, the Company subsequently charged Waterflow for the electricity fees that the Company had advanced for it. On 1 April 2006, the Company and Waterflow amended their O&M Agreement to effect that Waterflow would, from that date bear only the labour cost and consumable material cost arising from tap water production throughout the term of the Tap Water Sale and Purchase Agreement that the Company has made with PWA. In doing so, Waterflow will charge for its service at the specified rate per cubic metre, subject to increase annually according to the Consumer Price Index. In 2006, the service fee from January to March was Baht 3.555312 per cubic metre and from April to December was Baht 0.25 per cubic metre. In (more)