- Dividend, Related Transection, Debentures

- Translation - No. TTW/0516/08 October 24, 2008 Subject : Notification of the Resolutions of the Board of Directors' Meeting No. 8/2551 Attention : President The Stock Exchange of Thailand Thai Tap Water Supply Public Company Limited (the "Company") would like to notify that the Board of Directors' Meeting No. 8/2551 held on October 22, 2008 at 1.30 p.m. at Panorama Room, The Emerald Hotel, 14th Floor, No. 99/1, Ratchadapisek Road, Din Daeng Subdistrict, Din Daeng District, Bangkok Metropolis, has resolved as follows: 1. Resolved that the Company pay the dividend from the results of the 2007 net profit of the business under the investment promotion which the Company had a net profit of Baht 724 million, to the shareholders at the rate of Baht 0.15 per share or totaling Baht 598,500,000 and such matter be presented to the shareholders' meeting for further consideration and approval. The said right is uncertain as it has not yet been approved by the shareholders' meeting. 2. Resolved that the Company enter into the Water Purchase Agreement with the Provincial Waterworks Authority ("PWA") which is not a connected person of the Company. This transaction is the normal business transaction of the Company. The Company and PWA are negotiating the terms and conditions of the Agreement, and PWA is awaiting relevant approval of the PWA Board of Directors to enter into the Agreement with the Company. Under this Agreement, PWA would additionally purchase not exceeding 100,000 m3/day tap water from the Company. In this regard, the Company would proceed with the construction of plant enhancement to increase its existing production capacity from 320,000 m3/day to 440,000 m3/day, provided that the Company has already entered into the Water Purchase Agreement with PWA. 3. Resolved to approve the plant enhancement project sum in the amount not more than Baht 1,300 million for the plant enhancement to increase its existing production capacity from 320,000 m3/day to 440,000 m3/day as mentioned above. 4. Resolved that the Company enter into the Mechanical & Electrical Contract ("M&E Contract") with S. Napa (Thailand) Co., Ltd. for the plant expansion and enhancement to increase its existing production capacity as mentioned above with the details as follows: - The M&E Contract will cover all engineering, supply, construction and interfaces of mechanical and electrical works as necessary for plant expansion and enhancement at the contract cost not exceeding Baht 422 million (excluding VAT), with 18-month contract period. As the Company is negotiating with PWA on the terms and conditions of the Water Purchase Agreement, thus, the approval to enter into this Agreement is under the condition that the Company has already entered into the Water Purchase Agreement with PWA as mentioned above. In this regard, the Agreement will be based on a standard agreement of the International Federation of Consulting Engineers or FIDIC. The Company has complied with the requirement of relevant laws by calculating the value of the transaction as stipulated in the Notification of the Board of Governors of the Stock Exchange of Thailand, Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, B.E. 2547 (2004). As a result, the transaction value amounts to approximately 2.30 %. 1/9 - Translation - Such asset evaluation was made in accordance with the total value of the considerations which is not considered a type of transaction to be executed as stipulated in such Notification. - S. Napa (Thailand) Co., Ltd. is a leading mechanical and electric company in water and wastewater business and is not a related person or connected person of the Company. Resolved to engage CH. Karnchang Public Company Limited to operate the civil construction for plant enhancement to increase the Company's production capacity. Such transaction is a connected transaction because it was executed relating to assets or service of the Company with the connected persons with the details of connected transaction as follows: 5.1 Date of Transaction and Related Parties 5.1.1 Date of Transaction : within December 2008 5.1.2 Name of Related Parties: Employer : Thai Tap Water Supply Public Company Limited Contractor : CH. Karnchang Public Company Limited, a company which operates construction business of large scale infrastructures requiring use of advanced technology and invests in the large basic infrastructures of the government such as construction of Mae Fah Luang University, Second Stage Expressway System, Rama IX Bridge, etc. 5.2 General Characteristics and Details of Connected Transaction The Company, as producer and distributor of tap water to PWA in the areas of Nakhon Pathom and Samut Sakhon Provinces, will engage CH. Karnchang Public Company Limited to carry out the construction for plant enhancement in order to increase the Company's existing production capacity from 320,000 m3/day to 440,000 m3/day, in the amount not exceeding Baht 640 million (excluding VAT) and the total volume of such transaction is 12.36 % of net tangible assets according to the consolidated financial statements of the Company and its subsidiary ending June 30, 2008. The above engagement of CH. Karnchang Public Company Limited, as a major shareholder of the Company, is considered a connected transaction relating to assets or service in accordance with Section 89/12 of the Securities and Exchange Act B.E. 2535 (1992) (as amended) (the "Securities Act") and the Notification of the Board of Governors of the Stock Exchange of Thailand regarding Disclosure of Information and Other Acts of Listed Companies concerning the Connected Transactions B.E. 2546 (2003) (as amended). 5.3 Total Value and Basis Used in Determining Transaction's Total Value 5.3.1 Total Value of Consideration : not exceeding 640 million Baht (excluding VAT) 5.3.2 Method of Payment : By cheque upon completion of installment of works [5.3.3 Condition:The execution of the engagement contract with CH. Karnchang Public Company Limited would occur on the condition that the Company has already entered into the Water Purchase Agreement with PWA.] 5.3.4 Basis of Price Determination : The Company has operated in accordance with the Board of Directors' policy regarding the construction of plant enhancement in order to increase the Company's production capacity from 320,000 m3/day to 440,000 m3/day, as follows: 1) Invited interesting contractors who are expert and meet international standard to bid. 2/9 - Translation - 2) Arranged to have a consultant engineer to examine and estimate the price of works. 3) The Audit Committee had the following opinions: (1) The execution of the transaction is reasonable considering the Contractor's skills, experience and price. (2) The disclosure of the Company's information is accurate and complete in accordance with requirement of the Securities Act and the Notification of the Board of Governors of the Stock Exchange of Thailand regarding Disclosure of Information and Other Acts of Listed Companies concerning the Connected Transactions B.E. 2546 (2003) (as amended). In order to select this Contractor to operate the civil construction, the Company considered that the Contractor previously used to operate the project of civil construction with respect to the water production and distribution system in the areas of Nakhon Pathom and Samut Sakhon Provinces as it is an expert in the field of construction of infrastructure system. Upon consideration of its knowledge and ability, The Company deemed that CH. Karnchang Public Company Limited is qualified. Regarding the payment of remuneration, the Company negotiated with the Contractor in accordance with the method for engagement in the normal course business. Upon comparing with the price estimated by consultant engineer, it was found the transaction price is reasonable. 5.4 Details of Connected Persons 5.4.1 CH. Karnchang Public Company Limited is a major shareholder of the Company, holding 1,408,777,400 shares, or 35.3 percent of the registered capital, according to the Company's share register book as at September 30, 2008. 5.4.2 Mr. Plew Trivisvavet is the Chairman of the Board of Directors of the Company as well as the President and Chief Executive Officer of CH. Karnchang Public Company Limited. 5.4.3 Mr. Narong Sangsuriya is a director and the Chairman of the Executive Committee of the Company as well as a director and a Senior Executive Vice President of CH. Karnchang Public Company Limited. 5.4.4 Mr. Prasert Marittanaporn is a director of the Company as well as a director and an Executive Vice President of CH. Karnchang Public Company Limited. 5.4.5 Mr. Sombat Kitjalaksana is a director and an Executive Director of the Company as well as a director and an Executive Vice President of CH. Karnchang Public Company Limited. 5.5 Characteristics and Scope of Interests of Connected Person CH. Karnchang Public Company Limited is a major shareholder of the Company holding 1,408,777,400 shares, or 35.3 percent of the registered capital according to the Company's share register book as at September 30, 2008. 5.6 Source of Funds and Adequacy of Working Capital The funds will come from the working capital and issuance of debentures by the Company which will not affect the Company's financial position. 5.7 Interested Directors and Connected Persons Mr. Plew Trivisvavet, Mr. Narong Sangsuriya, Mr. Prasert Marittanaporn and Mr. Sombat Kitjalaksana who are interested persons and directors of the connected person with respect to the entering into this transaction did not attend the Meeting and exercise the right to vote in the Meeting in consideration of the agenda concerning the entering into connected transaction. 3/9 - Translation - 5.8 Opinions of the Company's Board of Directors The Board of Directors' Meeting No. 8/2551, held on October 22, 2008, approved the entering into such transaction as it was deemed reasonable with following reasons: 5.8.1 Price of construction is appropriate upon comparing with the price estimated by consultant engineer; 5.8.2 The Company will obtain an optimal benefit due to the fact that the Contractor is an expert and has experience in construction of infrastructure system and was the Contractor who carried out the construction of the Company's project starting in 2001, therefore, it has potential and is ready to start the work immediately. 5.9 Opinions of the Company's Audit Committee and/or Directors which are Different from the Opinions of the Board of Directors under 5.8 None This matter will be presented to the shareholders' meeting for further consideration and approval. 6. Resolved that ACL Securities Co., Ltd. be appointed to be the independent financial advisor of the Company to provide opinion with respect to engagement of CH. Karnchang Public Company Limited to carry out the civil construction for plant enhancement, which is a connected transaction, and the Managing Director be authorized to contact, negotiate, enter into, execute, sign and amend various relevant documents and contracts, and take any action relating to the said appointment as necessary and appropriate. 7. Resolved to approve the Company's issuance and offering for sale of debt instruments in the form of bills and/or debentures with the following details to be used for repaying the existing long-term loans to the Lenders and/or covering the plant enhancement and capacity increase: - Type of Debt Instruments : All types of bills and/or debentures which include but not limited to debentures in registered form or bearer form, subordinated or unsubordinated debentures, secured or unsecured debentures and/or derivatives debentures or structured notes, and with or without debenture holder representatives, which the Company can issue in accordance with the laws and relevant regulations. - Total Issue Size : The principal amount of bills and/or debentures to be issued must be subject to approval of the Company's requests according to the letter dated September 25, 2008 concerning: 1) request for extended repayment schedule; 2) request for reduction of interest rates; 3) request for amendment or change of certain financial ratios under the existing loan agreements; 4) request for approval of issuance and offering of unsecured debentures with an amount not more than Baht 2,000 million, having maturity period of not more than 7 years; 5) request for release of all sponsor supports; 6) request for first release from the silent period of the shares of the Company held by CH. Karnchang Public Company Limited, Mitsui Water Holdings (Thailand) Ltd. and Bangkok Expressway Public Company Limited which are not pledged with the Lenders; and 7) request for using e-dividend service, as follows: 1) If the group of Lenders approves all the Company's requests under the said letter, the total amount of debt instruments to be issued shall be not more than Baht 1,500 million. 2) If the group of Lenders does not approve the Company's requests either under the said letter, the total amount of debt instruments to be issued shall be not more than Baht 7,500 million. 4/9 - Translation - - Face Value per Unit : Not more than Baht 1,000 for debentures or face value of bills as the Board of Directors or the Managing Director or the person designated by the Board of Directors or the Managing Director may determine. - Term : Not exceeding 10 years from the date of issuance of the bills and/or debentures as specified under the relevant laws or regulations. - Allocation Methods : The debentures may be offered for sale in Thailand and/or abroad, to the public and/or institutional investors and/or high net worth investors and/or specific investors and/or any other persons in accordance with the Notification of the Securities and Exchange Commission (the "Notification of the SEC") and/or the Notification of the Office of the Securities and Exchange Commission (the "Notification of the Office of the SEC") and/or the Notification of the Capital Market Supervisory Board and/or other relevant laws in force at the time the bills and/or debentures are issued and offered for sale, which may be offered once or several times and/or on a revolving basis or in any other manner. The debentures may be issued and offered for sale separately from, in combination of, or together with other type of securities. - Coupon Rates or Yield : Interest rates or yield must depend on market condition at the time the bills and/or debentures are issued and offered for sale or be in accordance with the terms and conditions of the bills and/or debentures issued at such time. In this regard, it must be subject to the Notification of the SEC and/or the Notification of the Office of the SEC and/or the Notification of the Capital Market Supervisory Board and/or other relevant laws in force at such time when the bills and/or debentures are issued and offered for sale each time. - Maturity : Maturity must depend on market condition at the time when the bills and/or debentures are issued and offered for sale each time. - Early Redemption : Bills and/or debentures may have or may not have put option for the holders or call option for the Company to redeem any issued bills and/or debentures prior to the maturity. This must be subject to the conditions at the time when the bills and/or debentures are issued. - Special Conditions : In the case where the Company redeems or repays the bills and/or debentures issued under the above total authorized offering amount, the Company will be able to issue and offer for sale new bills and/or debentures on a revolving basis within the amount not exceeding Baht 7,500 million as specified above. In this regard, the Board of Directors or the Managing Director or the person designated by the Board of Directors or the Managing Director, will have the power to consider and determine criteria, conditions and other details relating to the issuance and offering for sale of bills and/or debentures as necessary and appropriate according to the laws, such as, name and characteristics, type of offering, amount of bills and/or debentures to be issued and offered for sale each time, type of bills and/or debentures, guarantee, collateral, offering price per unit, term, maturity, early redemption right, other rights and duties according to the bills and/or debentures to be issued at such time, interest rates, principal and interest payment method, allocation method and details of offering, etc. In addition, it includes the listing of bills and/or debentures on the Stock Exchange of Thailand, securities dealing center or any other secondary markets including organizations. The above persons also have the power to apply for approval from, make disclosure to, and proceed any and all relevant acts with the relevant regulatory agencies, appoint advisors or relevant persons with respect to the issuance and offering of bills and/or debentures as well as contact, negotiate, enter into, execute and amend relevant documents and contracts, and take any action relating to the issuance and offering of bills and/or debentures as necessary and appropriate. It was resolved further that the above matter will be presented to the shareholders' meeting for consideration and approval. 5/9 - Translation - 8. Resolved that the list of shareholders who have the right to attend the Extraordinary General Meeting of Shareholders No. 1/2551 and to receive the dividend be determined on November 20, 2008 and the list of shareholders be compiled pursuant to Section 225 of the Securities and Exchange Act by closing of the share register book to suspend the share transfer on November 21, 2008. 9. Resolved that the Extraordinary General Meeting of Shareholders No. 1/2551 be held on December 17, 2008 at 3.00 p.m. at Auditorium Room, Salaya Pavilion Hotel, 3rd Floor, No. 999, Mahidol University, Buddhamonthon Sai 4 Road, Tambon Salaya, Amphoe Buddhamonthon, Nakhon Pathom Province, with the following agenda: Item 1 To approve the Minutes of the Extraordinary General Meeting of Shareholders No. 2/2550; Item 2 To consider and approve the dividend payment from the results of the 2007 operation; Item 3 To consider and approve the entering into the Civil Work Contract for plant enhancement with CH. Karnchang Public Company Limited; Item 4 To consider and approve the issuance and offering of debt instruments in the form of bills and/or debentures; and Item 5 Other matters (if any). Please be informed accordingly. Very truly yours, (Sompodh Sripoom) Managing Director 6/9