Contents Message from the President 2 Report of Audit Committee for the Year 2015 3 Report of the Risk Management Committee 4 Organization Chart 5 Policy and Business Overview 6 Nature of Business 10 The Review of Construction Operations for 2015 13 Risk Factors 16 Marketing and Competition 22 Corporate Information and Other Information 24 Shareholders 29 Dividend Policy 30 Management Structure 31 Corporate Governance 36 Corporate Social Responsibility Report (CSR) 53 Board of Directors and Board of Management 71 Number of Shares Held by ITD Directors and Directors’ Remuneration as of February 15, 2016 82 Internal Control 83 Related Party Transactions 84 Summary of Financial Information 89 Management’ s Discussion and Analysis of Results of Operations and Financial Condition 90 The Board of Director’s Report on their Responsibilities for Financial Reports for the year 2014 97 Report of Independent Auditor 98 Financial Statement 100 *Investors can study further information of the Issuing Company from the Annual Registration Statement (Form 56-1), posted on www.sec.or.th or the Company’s Website www.itd.co.th. Annual Report 2015 1 Message from the President In 2016, the Government announced its plan to invest in mega projects to develop the transportation infrastructure of Thailand. The plan consists of many large projects which are: dual-track railway of the State Railways of Thailand; the Orange, Pink and Yellow Lines of the Mass Rapid Transit Authority of Thailand; Bang Pa-In – Nakhon Ratchasima and Bangyai – Kanchanaburi Motorways; the projects of the Port Authority of Thailand; Standard – Gauge Railway Project; and the development of the Suvarnabhumi Airport Phase 2. This year, if the projects under the economic stimulus program and the domestic investment of the government are initiated in compliance with the plan, the Company could still undertake further projects. The additional projects that the Company also aims at supporting and developing are as follows:: 1) The Dawei SEZ Project – on 5 August 2015, a contract for the Dawei Concession Phase 1 was signed with the Dawei Special Economic Zone in Myanmar, which included seven agreements for the industrial and public utility development covering over 27 square kilometres. A further agreement which may be signed in 2016 is the LNG Terminal Project, which could be rapidly constructed within this year. 2) Udon Thani Potash Mining Project – in the past year, the Company followed the rules for obtaining the patent permit, and has already held meetings for expressing opinions within village level and the Subdistrict Administration Organization Council. However, there are still meetings to be held at the Provincial level, which is the penultimate step in the process of obtaining the permit. Finally, the Provincial government shall offer the project to the Department of Primary Industries and Mines for consideration. The patent permit could be officially approved this year. 3) Elevated Expressway Construction in Bangladesh Project – is for a 25-year concession period (construction period included). The Bangladesh Government has recently changed the expressway routes and amended some information in concession. Currently, the ownership and the first four kilometres drawings of expressways have been completed. Some parts of the expressways are already being constructed while the Bangladesh Government requires good progress to be made on the project. The Company therefore has provided some domestic funds that it can be utilized for the project. In addition, the Project Finance has been considered for the funds from China. 4) Port and Railway Construction Services in the Republic of Mozambique Project – worth THB 120 million. The bank feasibility study has already been completed, verified and analyzed the suitability by the Independent Engineer in October, 2015. The ESIA and the Resettlement Action Plan are now more than 65 per cent complete. The project is in process of choosing the EPC contractor and dealing with other mining companies which are potentially the Company’s clients for future contracts. In addition, the Financial Close for the concession shall be made afterwards. 5) The Bauxite Mining and Production of Alumina and Aluminum Project in Laos PDR – is now in the process of preparing construction drawings and is carrying out studies on environmental and social effects. The project is expected to begin construction within this year. Construction of all the aforementioned projects will begin within this year and have construction periods of approximately 3-5 years. The development of these projects shall continuously generate additional profits to the Company. For the greatest advantage of the shareholders and for those who have consistently supported the Company, the Company therefore aims at developing every possible project, which shall create jobs and long-term revenue to the Company. As a result of the development of these projects, the Company can maintain the position of being the leading contractor in Thailand. Premchai Karnasuta 2 Italian-thai Development Public Company Limited Report of Audit Committee for the Year 2015 The Audit Committee of Italian-Thai Development Public Company Limited was duly appointed by the resolution of the Annual General Meeting of Shareholders on 30th April 2014. The three members of the Audit Committee that were appointed for a three-year term, were : Pol.Lt. Chartachai Bunya - Ananta as a Chairman, Dr. Krisorn Jittorntrum and Mr. William Lee Zentgraf as Committee Members. In addition, Mr. Withit Ouaysinprasert, the Vice President of Internal Audit Division, served as secretary of the Audit Committee. On 6th July 2015, Dr. Krisorn Jittorntrum was appointed as the Chairman by the resolution of Audit Committee Meeting, replacing Pol.Lt. Chartachai Bunya - Ananta who passed away on 18th April 2015. In addition, Mr. Tirapongse Pangsrivongse was appointed to hold the position of Audit Committee Member. In 2015, four Audit Committee Meetings were held, which were attended by the members as follows: 1. Pol.Lt. Chartachai Bunya – Ananta was absent in one meeting before his death. 2. Dr. Krisorn Jittorntrum was present in four meetings. 3. Mr. William Lee Zentgraf was present in four meetings. 4. Mr. Tirapongse Pangsrivongse was absent for two meetings due to his personal affairs. The significant activities undertaken by the Audit Committee as assigned by the Company’s Board of Directors were as follows: 1. Review and approval of the Quarterly Financial Statements, Annual Financial Statements, Certified Public Accountant’s Report, Financial Status Report and Company’s Performance Report for 2015. 2. Review of the Company’s Internal Control Systems and the 2015 Audit Plan of the Internal Audit Division. Also, review of the 2015 Audit Report and the Follow Up of Operation Improvement Report. 3. Review of legal compliance, the laws and regulations relating to the Stock Exchange of Thailand and other laws concerning the Company business. 4. Review of the connected transactions and those of conflicts of interest disclosed by the responsible executives in full and correct compliance with the laws and regulations of the Stock Exchange of Thailand. 5. Review of the risk assessment of increasing costs that caused the potential increase of prices of main materials in 2015 and the measures to be taken against direct impact to the Company. 6. Selection and recommendation for appointment of the Certified Public Accountant of the Company for 2015, including holding an official meeting with the Certified Public Accountant once a year. The Audit Committee’s opinion states that the Financial Report is accurate and reliable in its substance in accordance with the Generally Accepted Accounting Principles. Also the disclosure of sufficient information was carried out. The Internal Control Systems were adequate and proceeded without substantial errors. The Company has been in full compliance with the laws and regulations of the Securities and Exchange Commission, the Stock Exchange of Thailand and other related laws. The connected transactions were accurate and reliable and fairly priced according to the market price index. Finally, the Audit Committee’s opinion states that Mr. Somckid Tiatragul, Certified Public Accountant no. 2785 and/or Mrs. Sumalee Chokedeeanant Certified Public Accountant no. 3322 and/or Mr. Teerasak Chuasrisakul, Certified Public Accountant no.6624 and/or Mrs. Sunsanee Poolsawat, Certified Public Accountant no. 6977 from Grant Thornton Limited are qualified to be the Company’s auditor for 2015. (Dr. Krisorn Jittorntrum) Audit Committee Chairman 9 March 2016 Annual Report 2015 3 Report of the Risk Management Committee To the Shareholders The Risk Management Committee was established by resolution of the Board of Directors Meeting No.1/9/2010, held on September 2, 2010. This Committee comprises of eight members that have risk management knowledge. The Board of Directors has appointed Dr. Krisorn Jittorntrum, the Independent Director, to be the Chairman of the Risk Management Committee. This Committee has the responsibility to review the Company’s risk management policy and framework, which covers all the major risks; namely financial risk, investment risk, operational risk, and corporate reputation risk. The Committee is also responsible for setting appropriate risk management measures to support the decisions of the Board of Directors or the Management, especially the investment activities which may significantly affect the business and