B A N P U P U B L I C C O M P A N Y L I M I T E D

A n n u a l R e p o r t 2 0 0 5

I n n o v a t i o n

I n t e g r i t y

I n n o v a t i o n B A N P U S P I R I T I n t e g r i t y

C a r e

S y n e r g y

C a r e

S y n e r g y

A n n u a l R e p o r t 2 0 0 5 1 C o n t e n t s

3 F i n a n c i a l H i g h l i g h t s 4 B o a r d o f D i r e c t o r s ’ R e v i e w 6 C h i e f E x e c u t i v e O f f i c e r R e v i e w

10 K e y F i n a n c i a l R e s u l t s 12 V i s i o n & M i s s i o n

14 B a n p u S p i r i t : C o r p o r a t e C u l t u r e S t r i v i n g B a n p u t o B e c o m e “ T h e A s i a n F a c e o f E n e r g y ” 17 B a n p u C o r p o r a t e S o c i a l R e s p o n s i b i l i t y 21 I n d u s t r i a l O u t l o o k 23 R i s k F a c t o r s 28 O p e r a t i o n s D u r i n g t h e P r e v i o u s Y e a r 30 R e v e n u e S t r u c t u r e 32 S u m m a r y o f M a j o r C h a n g e s a n d D e v e l o p m e n t s i n 2 0 0 5 a n d M a j o r C u r r e n t E v e n t s

34 M a j o r S h a r e h o l d e r s 36 O r g a n i z a t i o n C h a r t 37 M a n a g e m e n t S t r u c t u r e 44 B o a r d o f D i r e c t o r s a n d M a n a g e m e n t 54 S h a r e h o l d i n g s o f t h e B o a r d o f D i r e c t o r s a n d M a n a g e m e n t 55 R e m u n e r a t i o n o f t h e B o a r d o f D i r e c t o r s a n d M a n a g e m e n t 57 C o r p o r a t e G o v e r n a n c e a n d S u p e r v i s i o n o n t h e U s e o f I n t e r n a l I n f o r m a t i o n 67 I n t e r n a l C o n t r o l 70 C o n n e c t e d P e r s o n s a n d T r a n s a c t i o n s

76 R e p o r t o f t h e B o a r d o f D i r e c t o r s ’ R e s p o n s i b i l i t y i n t h e F i n a n c i a l S t a t e m e n t s 77 R e p o r t o f t h e A u d i t C o m m i t t e e t o S h a r e h o l d e r s 78 M a n a g e m e n t ’ s D i s c u s s i o n a n d A n a l y s i s o f t h e C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s 81 A u d i t o r ’ s R e p o r t 82 F i n a n c i a l S t a t e m e n t s 132 O t h e r R e f e r e n c e s 133 B a n p u G r o u p S t r u c t u r e 134 D e t a i l s o f t h e C o m p a n y a n d I t s S u b s i d i a r y a n d A s s o c i a t e d C o m p a n i e s

2 B a n p u P u b l i c C o m p a n y L i m i t e d F i n a n c i a l H i g h l i g h t s

F o r t h e y e a r e n d e d 3 1 D e c e m b e r

2005 2004 2003

F i n a n c i a l P o s i t i o n Total Assets (THB million) 45,088 39,538 33,993 Total Liabilities (THB million) 23,202 16,423 11,637 Total Shareholders’ Equity (THB million) 21,886 23,116 22,355 Issued and Paid-up Share Capital (THB million) 2,717 2,717 2,703

O p e r a t i o n a l R e s u l t s Sale Revenues (THB million) 25,209 17,227 12,482 Cost of Sales (THB million) 13,933 10,525 8,878 Gross Profit (THB million) 11,275 6,702 3,604 Selling and Administration Expenses (THB million) 3,332 2,228 1,858 Royalty Fee (THB million) 2,547 1,700 1,252 Other Revenues (THB million) 3,646 3,159 2,222 Other Expenses (THB million) 225 436 285 Profit from Operation (THB million) 8,818 5,498 2,431 Interest Expenses (THB million) 509 412 480 Corporate Income Tax (THB million) 2,217 1,204 124 Net Profit (THB million) 5,565 3,645 2,046

F i n a n c i a l R a t i o s Gross Profit Margin (%) 44.73 38.90 28.87 Net Profit Margin (%) 22.08 21.16 16.39 Returns on Assets (%) 13.15 9.91 7.11 Returns on Equity (%) 24.73 16.03 13.35 Interest Coverage Ratio (times) 8.94 11.65 2.01 Net Debt to Equity (times) 0.34 0.22 0.28

D a t a p e r S h a r e Earnings per Share (THB) 20.48 13.42 7.75 Book Value per Share (THB) 80.54 85.06 82.71 Dividend per Share (THB) 12.50* 5.50 4.00

* The Company has announced a payment of an interim dividend worth THB 3.50 per share on 29 September 2005 and a payment of an interim dividend paid on a special occasion worth THB 5.00 per share on 28 October 2005. There remains a dividend of THB 4.00 per share. which will be paid out of the Company’s retained earnings and operation results during the period between 1 July 2005 and 31 December 2005 of which the payment is scheduled on 11 April 2006.

Note: Financial figures are based on the consolidated financial statement.

A n n u a l R e p o r t 2 0 0 5 3 B o a r d o f D i r e c t o r s ’ R e v i e w

B a n p u ’ s s e ve r a l a t t e m p t s h a v e b e c o m e f r u i t f u l a s t h e C o m p a n y h a s b e e n r e c o g n i z e d b y s e v e r a l r e p u t e d i n s t i t u t i o n s t o r e c e i v e a n u m b e r o f p r e s t i g i o u s a w a r d s . I n 2 0 0 5 , B a n p u w a s r a n k e d a s o n e o f T h a i l a n d ’ s t o p t e n c o m p a n i e s w i t h t h e h i g h e s t c o r p o r a t e g o v e r n a n c e s c o r e s .

Banpu Public Company Limited’s perfor- holds 50 per cent of its shares, is nearly completed. mance in 2005 remained quite satisfactory despite Its Unit 1 is expected to commence the operation the fact that the Company had to face with a few in October 2006. negative external factors especially the hike in oil Aside from achieving the performance prices which inevitably increased our costs of targets, during the past year, there were major production and transportation. However, thanks corporate incidents to be remarked as follows. to a great collaboration of both the executives and 1. Change of the Board of Directors staff in Thailand and abroad, Banpu can sail through according to the 2005 Annual General Meeting the trouble without much complication. (AGM)’s resolution in mid 2005 when 3 experts In 2005, the Company recorded a 53 per cent were appointed to replace the retirees. The three increase in its net profit compared to the previous new Board of Directors are Mr. Krirk-Krai Jirapaet, year thanks largely to the increase of coal sales Mr. Rutt Phanijphand and Mr. Somkiat Chareonkul. volume and selling price. Banpu saw its coal Mr. Krirk-Krai Jirapaet has been appointed as production capacity rising by 17 million tonnes, Chairman of the Board of Directors. of which 13.35 million tonnes came from its 2. The issuance of THB 5 billion debentures Indonesian coal mines and the remaining 3.65 with a maturity period of no more than 10 years million tonnes were from domestic mines. adopted by the resolution of the Extraordinary Regarding Banpu’s China coal business, the Daning Shareholders’ Meeting No. 1/2005 on 2 November Mine has already started its operation in the 2005. The fund raised from the issuance will be fourth quarter of 2005 while the Company has also invested in projects related to Banpu’s coal and invested in the Hebi Coal Mine Project in Henan power businesses as well as in other projects. The Province, a joint venture between Hebi Coal and debentures were chosen as it helped strengthen Electricity Company which registers a production the efficiency of Company’s financial structure. capacity of 1 million tonnes a year. For its 3. TRIS Rating Co., Ltd. (TRIS) has power business, the construction of BLCP Power upgraded the Company’s corporate rating from Limited’s power plant, in which Banpu currently “A” to “A+” while its credit outlook was also

4 B a n p u P u b l i c C o m p a n y L i m i t e d ( M r . K r i r k - K r a i J i r a p a e t ) Chairman of the Board of Directors

adjusted upwardly from “positive” to “stable.” There have been attempts to urge staff all over In addition, Banpu’s three new series of unsecured the organization to implement a set of corporate debentures worth a total of THB 5 billion have been shared values shortly known as “Banpu Spirit” as rated “stable.” TRIS’s upgrade of Banpu’s credit their principle of practice. Banpu is convinced rating reflects the Company’s strong financial that the Banpu Spirit, consisting of innovation, status, reputation and experience in the regional integrity, care and synergy, will matter a lot during level as well as its executives’ expertise. a course of its sustainable development and will 4. In addition to focusing on financial catapult the Company into “The Asian Face of strength, Banpu also strictly pursued the principles Energy” as wished. of corporate governance and at the same time The Board of Directors would like to take this promoted corporate governance activities to its moment to express our deep appreciation to our staff. The goal was to emphasize the business customers, shareholders, suppliers, neighbors in ethics, transparency and the ability to check and the communities where our businesses have been audit. Banpu’s several attempts have become operated, all stakeholders, staff and executives fruitful as the Company has been recognized by who have given us all your valuable support and several reputed institutions to receive a number of confidence throughout the year. Please be assured prestigious awards. In 2005, Banpu was ranked that the Board of Directors will do everything to as one of Thailand’s top ten companies with the make sure that the Company will comply with highest corporate governance scores following the principles of good corporate governance, while an evaluation of corporate governance practices being equipped with enough rules and regulations in 371 listed companies by the Thai Institute of and at the same time promoting the potential of Directors Association (IOD). its staff and executives. The bottom line, after all, 5. In terms of Banpu’s human resources is to drive Banpu forward without many glitches management, the Company finds it extremely under our “Banpu Spirit” which will hopefully important to continue developing its human transform Banpu into “The Asian Face of Energy” resources to accommodate its future expansion. in the future.

A n n u a l R e p o r t 2 0 0 5 5 C h i e f E x e c u t i v e O f f i c e r R e v i e w

P e r h a p s m o r e i m p o r t a n t l y , a s I h a v e a l r e a d y i n d i c a t e d , i s t o r e c o g n i z e t h a t B a n p u ’ s e a r n i n g s s t r u c t u r e i s e v o l v i n g . T h e n e w i n v e s t m e n t s t h a t w e h a v e m a d e o v e r t h e p a s t y e a r o r s o w i l l b r i n g s i g n i f i c a n t d i v e r s i f i c a t i o n i n t e r m s o f b o t h g e o g r a p h i c a n d m a r k e t r i s k .

The strategic vision I painted for Banpu F i r s t , t h e F i g u r e f o r 2 0 0 5 . . . back in early 2001 was ambitious. The last 5 Banpu registered record net earnings in years have involved momentous efforts by 2005, up 53 per cent at THB 5,565 million. everyone at Banpu to realize that vision by This was achieved on the back of an increase in divesting non-core assets and by channeling coal revenues by 47 per cent to THB 25,046 the Company’s financial and human resources million and an average gross profit margin on coal into coal-based energy investments in Thailand, sales of 45 per cent, up from 39 per cent in 2004. the Republic of Indonesia and the People’s The increase in coal revenues was a function of Republic of China. It has been challenging and both volume expansion, up 9 per cent and growth unsettling for those involved, but it has been worth in average selling prices - at USD 35 per tonne, it. Not only has the process already generated up 37 per cent. exceptional shareholder returns, but Banpu’s This formidable performance plus the management and staff have emerged stronger realization of profits from non-core divestments and more focused than ever before. Last year, led the Board to approve total dividends for for the first time, I feel that the vision clearly and the year totaling THB 12.5 per share (including genuinely began to emerge from the mist. a special dividend of THB 5.0 per share), up from THB 5.5 per share in the previous year.

6 B a n p u P u b l i c C o m p a n y L i m i t e d ( M r . C h a n i n V o n g k u s o l k i t ) Chief Executive Officer

Banpu maintains a strong balance sheet In Thailand, while our coal operations with net market gearing (net debt to enterprise performed well in 2005, with sales of 3.3 million value) that remains relatively low by industry tonnes, the most important development for standards. Going forward, the Company is Banpu was the near-complete construction of the well-placed not only to fund planned capital BLCP 1,434 megawatt coal-fired power project. expenditure but also to seize new acquisition BLCP is due to come on-stream in 2 phases in and investment opportunities as they arise. October 2006 and February 2007 and should bring a major new source of cash flow to the Banpu group T h e S i g n i f i c a n t D e v e l o p m e n t s i n from around the end of 2006 onwards. 2 0 0 5 a n d E a r l y 2 0 0 6 Despite some frustrating delays, 2005 saw Last year and the first two months of first production from the Trubaindo Mine in 2006 have witnessed some major developments Kalimantan, one of the final chapters in the at Banpu that will not only bring considerable post-acquisition value-creation plan that we had cash flow growth over the next few years, but also in mind when we acquired the “Indocoal” group. some fundamental, albeit partial, diversification From little more than around 4 million tonnes of in the Company’s underlying cash flow structure annual output when Banpu acquired the Indocoal away from too much dependence on the seabourne group, these assets are expected to produce 15 thermal coal market. million tonnes of coal in 2006. Trubaindo should

A n n u a l R e p o r t 2 0 0 5 7 generate about one-third of that output and will co-generation business in the People’s Republic become one of Banpu’s main engines of cash flow of China from AEC, the US utility. The business generation in the future. consists of 4 coal-fired operations with a total In the People’s Republic of China, the power capacity of 279 megawatts and steam Daning anthracite mine in Shanxi, majority-owned capacity of 1,000 tonnes per hour. The plants by AACI, also came on-stream in 2005 and is are located in three fast-growing provinces in expected to produce about 4 million tonnes in the east of the People’s Republic of China. 2006, Importantly, last year also saw our second They benefit from monopoly supply status in the major foray into the Chinese coal sector with counties in which they operate - as well as long the acquisition of a 40 per cent stake in the Hebi term PPAs and priority dispatch for electricity. semi-anthracite mine in Henan Province. Hebi These combined heat and power (CHP) operations is an underground longwall mine with about which are favored by the Chinese government 35 million tonnes of coal reserves. It currently and local authorities due to their high thermal produces at around 1 million tonnes, and is efficiency (generally over 45 per cent) implying scheduled for expansion up to 1.8 million a lower emissions-to energy ratio and better use tonnes by 2008. Banpu has been a pioneer foreign of the country’s coal resources. New rules since investor in the Chinese coal industry and we see the middle of 2005 allow 70 per cent of coal price both the Hebi and AACI investments as seeds movements to be passed-through to power and for significant further growth in the future. steam tariffs. Tariffs are negotiated annually, subject to local government approval. A c q u i s i t i o n o f a N i c h e C o - g e n e r a t i o n The management teams at the CHP B u s i n e s s i n t h e P e o p l e ’ s R e p u b l i c o f operations are highly qualified and have extensive C h i n a experience working to western professional Last but not least, on 9 February 2006, standards with AEC. Our first job will be to Banpu signed an agreement to acquire a niche integrate these teams into Banpu and then to start

8 B a n p u P u b l i c C o m p a n y L i m i t e d working with them to improve plant operating one-third of pre-capex cash flows will come from efficiencies, expand the existing plants (to meet our power businesses. In addition, by the time growing steam demand) and identify new CHP we expect the People’s Republic of China to begin acquisition opportunities in the People’s Republic to feature more prominently as a core source of of China. In these ways, we expect the deal to cash flow for the Banpu group - both in power generate significant new growth and shareholder and coal. While the economics of our power value for Banpu. investments will to some extent have an inverse relationship with coal prices, the economics of the O u t l o o k Chinese coal assets will be less directly linked Looking ahead, while coal prices may be to the seabourne thermal market. So while the softer in 2006 compared to 2005, the price outlook new income from Trubaindo will strongly boost may prove to be more robust than some analysts earning from our Indonesian thermal coal business have been forecasting. Coal transportation in absolute terms, new coal and power investments infrastructure constraints in Australia, a sharp will bring a healthy level of diversification around drop in Chinese net exports last year and strong our coal-based energy strategy. European demand have all contributed to an upturn in Asian thermal coal prices in the last few months. Perhaps more importantly, as I have already indicated, is to recognize that Banpu’s earnings structure is evolving. The new investments that we have made over the past year or so will bring significant diversification in terms of both geographic and market risk. By 2008 we expect that, based on existing assets and projects, around

A n n u a l R e p o r t 2 0 0 5 9 K e y F i n a n c i a l R e s u l t s

T o t a l A s s e t s T o t a l S h a r e h o l d e r s ’ N e t D e b t t o E q u i t y T o t a l R e v e n u e s The Company’s total E q u i t y The Company’s net As of 31 December assets as of 31 Shareholders’ equity as debts as of 31 December 2005, the Company December 2005 of 31 December 2005 2005 reported at reported the total reported at THB 45,088 reported at THB 21,886 THB 7,436 million - revenues of THB million - increased million - a decrease an increase of THB 25,209 million, by 14 per cent or THB of THB 1,229 million 2,390 million. This increasing 46 per cent 5,550 million compared or 5 per cent compared was due to an increase or THB 7,982 million to the same period last to 31 December 2004. of interest-bearing compared to the year. The increase The decrease was due to debt and other current previous year. This was mainly from dividend payment liabilities. Net debt was mainly from operating cash flow, of THB 3,193 milion to equity stood at a 9 per cent increase in Thai Baht bond issuance at THB 3.50 and 5.00 0.34 times, increasing coal sales volume and in November 2005 per share in September from 0.22 times as of a 37 per cent increase of and sales of non-core and October respectively, 31 December 2004. average selling price. investment. partial divestment of held-for-sale securities, and a lower mark-to- market value of investment.

50,000 30,000 1.50 30,000

45,088

25,209

25,000 23,116 25,000

39,538

40,000 22,355

21,886

33,993 20,000 1.00 20,000 30,000 17,227

15,000 15,000

12,482 20,000 10,000 0.50 10,000

0.34

0.28

10,000 0.22 5,000 5,000

0 0 0 0

03 04 05 (THB Million) 03 04 05 (THB Million) 03 04 05 (Times) 03 04 05 (THB Million)

10 B a n p u P u b l i c C o m p a n y L i m i t e d G r o s s P r o f i t & G r o s s E B I T D A N e t P r o f i t E a r n i n g s p e r S h a r e P r o f i t M a r g i n The Company’s 2005 The Company’s 2005 The Company’s earnings The Company’s gross EBITDA reported at net profit was THB 5,565 per share (EPS) as of profit as of 31 December THB 8,574 million - million - increasing 31 December 2005 was 2005 recorded at an increase by by THB 1,920 million THB 20.48 per share, THB 11,275 million - THB 3,895 million or 53 per cent compared a 53 per cent increase an increase of THB or 83 per cent compared to the same period from the previous year 4,574 million. This was to last year due to last year. The 2005 of THB 13.42 per share. due to an increase in an increase in operating net profit was attributed coal sales revenue. performance. to the higher coal Gross profit margin sales revenue and gain increased to 45 per cent from divestment of from 39 per cent of non-core businesses. the same period last year.

GPM

12,000 50% 10,000 6,000 25.00

5,565

11,275

8,574

20.48 10,000 5,000 40% 8,000 20.00

8,000 4,000 3,645

6,702 30% 6,000 15.00

13.42

6,000 4,679 3,000

20% 4,000 10.00

2,046

7.75 4,000 3,604 2,000

2,262 10% 2,000 5.00 2,000 1,000

0 0 0 0 0

03 04 05 (THB Million) 03 04 05 (THB Million) 03 04 05 (THB Million) 03 04 05 (THB/Share)

A n n u a l R e p o r t 2 0 0 5 11 V i s i o n & M i s s i o n

12 B a n p u P u b l i c C o m p a n y L i m i t e d V i s i o n To become a leading energy company in Asia and to be acknowledged as an active developer and investor, a fair partner, a truly professional and a provider of excellent energy products & services.

M i s s i o n To develop businesses in the fields of energy in pursuit of a leadership position in Asia.

To diversify and invest in strategic businesses, which will support and enhance our businesses positions.

To promote and contribute to the development of society by acting as a good citizen, committing to safety practices and preserving nature and environment.

To serve our customers in Asia with value priced and high quality of products and services.

A n n u a l R e p o r t 2 0 0 5 13 B a n p u S p i r i t : C o r p o r a t e C u l t u r e S t r i v i n g B a n p u t o B e c o m e ” T h e A s i a n F a c e o f E n e r g y ”

For the past twenty years of growth at Banpu Public Company Limited, personnel have been among the most vital elements of the Company’s success, first in coal mining and then in power generation. To proudly overcome the challenges of the future especially to strive Banpu to become “The Asian Face of Energy,” the more than 3,000 employees of Banpu throughout the region have to develop the same ideas, the same beliefs, and the same style of work. The corporate shared values called the “Banpu Spirit” therefore, has been established and developed as a single code of principles and conduct for all Banpu personnel, in every location, since 2005.

W h y “ B a n p u S p i r i t ” ? We at Banpu are firmly committed to a course of excellence to meet the corporate ultimate goal in both short-term and long-term. We are dedicated to the highest ethical, moral, and professional standards that give us the confidence and courage to think, decide, and act above the norm. Banpu supports the ambitions of its personnel to utilize all their capabilities, without forgetting the generosity given to societies and employees. In all these ways, the “Banpu Spirit” is at least as important as the Company’s operational results. By this Spirit, Banpu employees can learn to live and work together as one, to trust one another, and to be open with and considerate of one another through mutual tolerance, respect, and support, as well as to have synergy. The “Banpu Spirit” will actually motivate the staff to co-ordinate their efforts as a single, smoothly operating force that can finally make Banpu “The Asian Face of Energy”. Mr. Chanin Vongkusolkit, Banpu’s Chief Executive Officer, made his remark that “The ‘Banpu Spirit’ is very important to us all, as it is the power that will move Banpu towards a position of leadership in Asia’s energy sector. The ‘Banpu Spirit’ is a source of solid, sustainable growth for the Company, and the force that will strengthen us to meet future challenges.”

“ B a n p u S p i r i t ” : I n n o v a t i o n , I n t e g r i t y , C a r e , a n d S y n e r g y The “Banpu Spirit” is what demonstrates the unique identity of the organization, the link that binds all employees to become one. It is this oneness that will enable Banpu to achieve its goals, smoothly, speedily, and successfully. The “Banpu Spirit” consists of four main values: innovation, integrity, care, and synergy. Innovation Innovation comprises courage and challenge, initiative, forward thinking or to think “out of the box”, to be proactive, to be adaptive to change and continuous improvement. All these qualities are essential to the working lives of Banpu employees since they will enable Banpu people to move along, despite the intensity of our present competitive environment. Integrity Integrity embraces so many virtues: ethics, honesty, transparency, trustworthiness, adherence to commitment, discipline, and persistence. The Company’s stakeholders are bound to trust Banpu personnel who are guided by standards of propriety and ethics.

14 B a n p u P u b l i c C o m p a n y L i m i t e d Care Care is a value that Banpu always emphasizes. It requires openness and candor, critique, affirmation, recognition, respect, warmth and empathy. Banpu employees are well-known for these qualities, as they are demonstrated when dealing with business contacts, with their colleagues, and with the society around them. This care and concern goes beyond differences of race, religion, or background, enabling everyone to work well together. Synergy Synergy itself is a collaboration, fairness, sharing, teamwork, networking, high spirit and striving for win-win solution. The power of Banpu synergy, be it from our staff in Thailand or in other countries, is what allows Banpu to be regionally and internationally competitive, proudly and persistently. Synergy contributes to the good relations between Banpu and its stakeholders, as it shows that success is not only for the good of the Company, but for the good of all.

2 0 0 5 : T h e “ B a n p u S p i r i t ” i s P r o m o t e d a s a C o m p a n y - W i d e C u l t u r e The year 2005 is considered a commencement of “Banpu Spirit” journey after the initiation of Banpu’s corporate shared values, which have later become the “Banpu Spirit”. In the beginning of 2005, the “Banpu Spirit” was launched as a potent reality throughout the organization. It has been introduced to Banpu’s staff both in Thailand and in the Republic of Indonesia, and has since been extended to form a set of guidelines that can be implemented in common. Among the activities organized for this purpose was a program entitled “Banpu Spirit Expression”, which introduced the Banpu Spirit’s concept to the Company’s Thai and Indonesian staff during the first half of the year. Workshops were prepared to explain the four core values of the “Banpu Spirit” to executives, to “Change Leaders”, and to employees at all corporate levels. The concept was also linked to various other Company-sponsored activities. Understanding the “Banpu Spirit” at a deeper level is an ongoing process, and one that aims to live on in our employees’ subconscious as a means of fostering ever greater unity and strength among members of the Banpu family.

T h e “ B a n p u S p i r i t ” : C o r p o r a t e S h a r e d V a l u e s t h a t M a k e B a n p u “ T h e A s i a n F a c e o f E n e r g y ” We at Banpu believe that when the internal state of the Company is strong and unified, the external image of the Company will also gain in lustre. This is what makes the “Banpu Spirit” so important, and something the Company is determined to achieve. Banpu’s Chief Executive Officer mentioned this in “The Banpu Spirit Manual”. “The ‘Banpu Spirit’ embodies our corporate shared values that we will bring to life. These are not just words. ‘Banpu Spirit’ will be truly realized by our actions and behavior everywhere and at all times. It will be part of our daily working life and our treatment of one another. It will be absorbed into our conscience and expressed through our good deeds.”

A n n u a l R e p o r t 2 0 0 5 15 Actually, the “Banpu Spirit” is nothing new for Banpu; for more than twenty years we have been implementing through the various endeavours of management and the numerous accomplishments of the Company. Through Innovation: Through constant improvements in production processes, Banpu has encountered immense benefits. One of these arose from the conversion of the Company’s rotary scrubber plant, which extracts impurities from coal. The adoption of this simple process has saved Banpu a lot of money. Modern, high-quality technology has also been very useful in other production processes and in transportation, such as the utilization of self-propelled barges for transporting coal in the Republic of Indonesia. In these and other ways, Banpu has become one of the major coal producers and exporters in Asia. Through Integrity: Banpu is renowned for transparency and strict adherence to principles of good corporate governance, and has received awards for this from a number of reputable standards agencies. In 2005, Banpu was rated as one of the top ten companies in Thailand, out of 371 listed companies, in a survey of good corporate governance conducted by the Thai Institute of Directors Association (IOD). Through Care: Banpu has contributed in many ways to programs of a charitable and social nature, and initiated programs that offer new opportunities to communities. Among these are scholarships for students from primary school to college, the launching of on-line learning source, www.thaienvi.net, that provides useful information for teachers and students throughout Thailand about the environment, and support for the use of ICT as a helpful tool in learning development in Thai schools. Banpu is seriously and consistently concerned about matters of environmental conservation and how to minimize corporate activities that could affect the environment. The Company has constantly monitored what our environmental impact might be, selected the most appropriate technologies accordingly, and developed a comprehensive, effective master plan for environmental rehabilitation. Banpu, finally, has a policy of looking after all our stakeholders and treating them fairly and equally, be they shareholders, investors, clients, business partners, or our own employees. Through Synergy: Banpu’s strong operational results and recognition by leading institutions and agencies, both in Thailand and abroad, is a proof of our staff excellence at teamwork, the key to the Company’s impressive successes to date. One such example of this co-ordinated effort was the solidarity of management and staff in the face of Asia’s severe economic crisis in 1996.

We believe that the “Banpu Spirit” is the foundation for the Company’s long-lasting progress and growth. Our staff are happy to hold firmly to the corporate shared values that have worked so well for so long to make Banpu “The Asian Face of Energy”, now and in the future.

16 B a n p u P u b l i c C o m p a n y L i m i t e d B a n p u C o r p o r a t e S o c i a l R e s p o n s i b i l i t y

Sustainable growth of the society and the environment is Banpu’s main objective in the social activities it has carried out during the past 20 years since its establishment. Banpu continues to be involved in social contribution activities in both Thailand and the Republic of Indonesia including collaborating with local communities in various community development projects. Banpu’s social activities reflect its commitment to be a good corporate citizen, a wish to be a role model to other organizations and a desire to grow along with a healthy society. In 2005, Banpu pursued social projects in local and national levels. This included social projects in countries where it has operations especially in the Republic of Indonesia. A lot of new projects were initiated in the year in order to strengthen the society in general. Significant social projects during the past year are as follows.

E d u c a t i o n 1. Support the ICT development for schools in rural areas Banpu provides ICT support to schools in the Thai Government’s “Lab School” project and those under the Office of the Basic Education Development Committee, the Ministry of Education, in three northern provinces of Lamphun, Lampang and Phayao. The goal is to increase their ICT capability for use in the learning and teaching process for student’s benefit. The bottom line is to create a decent school for Thai students to learn how to pursue a self-learning process throughout their lives. In 2005, Banpu donated THB 2.65 million to 6 schools of Wiangjedeewittaya School in Lamphun Province, Sobprabpittayakom School, Maethawittaya School and Maethapattanasuksa School in Lampang Province, and Bansra School and Chiangmuan Wittayakhom School in Phayao Province. The fund given was intended to develop and improve ICT tools and equipment. In addition, Banpu also organized a workshop on “Utilization of ICT Knowledge Management” for teachers from these six schools to enhance their ICT skills and use whatever they learnt for maximum benefit of students in their classes.

2. Support the PhD students in Economics Banpu gave a total of THB 1.5 million scholarships to support the PhD program of the Faculty of Economics, Chiang Mai University (THB 500,000 each year for three consecutive years) in a bid to produce lecturers with PhD qualifications in economics for tertiary education institutes nationwide. The Faculty of Economics will select qualified students to receive this scholarship.

A n n u a l R e p o r t 2 0 0 5 17 E n v i r o n m e n t 1. Developing the thaienvi.net website, Thailand’s first comprehensive website for environmental learning Banpu and the Thailand Environmental Institute (TEI) have set up the www.thaienvi.net website as Thailand’s first educational integrated online website for students and teachers in Thailand. The contents of the website consist of fundamental knowledge of environmental science, local and international environmental project information and learning and teaching activities such as environmental activity guidelines and camping, scientific projects, games and tales. In addition, the website also gathers information about natural classrooms in various parts of Thailand for students and teachers in the nearby areas to make their visit trips. The website is one of the activities supported by Banpu aside from protecting and conserving the environment in the areas it has operations. Banpu realizes that by giving children a right understanding about the environment, this will help them understand environmental problems and how to conserve and take care of the environment that should lead to sustainable environment conservation. Aside from the thaienvi.net website, Banpu and the TEI also organized various environmental camps to create environmental awareness to Thai children. They are: The “Visiting Neighbor, Visiting Elephant Home” Camp The camp was held at Pa La-U Waterfall in the Kaeng-Krachan National Park, Phetchaburi Province. The event allowed Thai children with environmental mind to learn from real environment outside their classroom. The “Visiting Crab House, Fish Bank and Observing Mangrove Forest” Camp More than 70 youth leaders and environmental teachers in Chumphon and Prachuap Khiri Khan Education areas gathered to witness the homes of crabs and fish as well as marine resources in mangrove areas around the Royal project “Thung Maha Bay”, Patiew District, Chumphon Province. The camp promoted the use of online media to communicate between students and teachers in an attempt to expand the opportunities to study the environment in local and remoted areas in an integrated manner.

2. Environmental Management Scholarship A research fund worth THB 400,000 was granted to the National Research Center for Environmental and Hazardous Waste Management, Chulalongkorn University, for use in the Center’s research activities.

18 B a n p u P u b l i c C o m p a n y L i m i t e d O t h e r s Supporting the “District Intelligence Information Center” Project Banpu donated THB 1.35 million to the Department of Local Administration, the Ministry of Interior, to set up the “District Intelligence Information Center” where the ICT is introduced to improve a quality of information service at 50 district and sub-district offices in 3 northern provinces of Lamphun, Lampang and Phayao. The center will allow the public to search district information, government information and information in general on its own through touch-screen computers.

L o c a l P r o j e c t s Thailand Aside from national-level projects, Banpu also focuses on community development and environmental conservation projects in areas around its mines. This is what Banpu has done since its incorporation. In 2005, here are some of the examples of its community development and environmental projects at a grass root level. Public utilities Ð The Lampang Mine donated THB 400,000 to build the “Banpu Kitchen” and a warehouse in Mae Tan Village, Lampang Province. Together with its Charity Club, the Lampang Mine also collected consumables such as drinking water, dried food, medicines and clothes as well as money from its staff to be donated to those suffering from a flood in Lampang Province. The event was held through an MCOT Lampang Radio Station. The Chiang Muan Mine meanwhile donated traffic cones to the Chiang Muan Police Station in Phayao Province. Education Ð The Lampang Mine donated 108 scholarships worth THB 226,000 to needy students in 19 schools in Mae Tha District and Sop Prap District in Lampang Province. The Chiang Muan Mine donated computers to Bansra School, the Chiang Muan District Office and the Phayao Industrial Office. Professional development Ð The Lampang Mine together with the Farming Technology Transfer and Service Center of Tambon San Don Kaew and the District Agricultural Office of Mae Tha District organized an agricultural training to farmers in Moo 7 and 9 of Mae Tan Village. The training included a cultivation of pak wan (sweet vegetable), mushroom, mango and bamboo. The Chiang Muan Mine meanwhile provided trainings on how to produce compost from corn husk and how to process local herbs. Environment Ð The Lampang Mine organized a “Big Cleaning Day” activity at Mae Tan School in Mae Tha District, Lampang Province, where the event provided information on the 5S activity and urged students, teachers and local people in the village to clean their households and the entire community.

A n n u a l R e p o r t 2 0 0 5 19 The Republic of Indonesia Banpu Indonesia also commits a lot in social development activities. Every mine from Indominco- Bontang, Kitadin-Embalut, Jorong and Trubaindo has set aside a community development budget in its annual expenditures. The activities emphasize local participation, building of basic infrastructure for local communities and providing assistance and supporting activities proven beneficial to the communities in general. Samples of some outstanding community projects in 2005 are as follows. Public utilities Ð The Jorong Mine helped constructing a road leading to rice fields in Swarangan Village, Jorong Village and Asam-Asam Village. The Embalut Mine sponsored a construction of a retaining dam in the Bangunrejo Block D Village. Education Ð The Indominco-Bontang Mine together with the National Movement of Foster Parent (GNOTA Ð Geraken National Organ Tua Asuh) provided scholarships, books and education tools to 500 students in 13 villages. Religion Ð The Indominco-Bontang Mine together with PT. Pama Persadanusantere and the Yabis Bontang Hospital organized a mass circumcision ceremony to 300 children ranging from 9-13 years old from various communities around the mine. The Jorong Mine helped renovating the mosque of Karang Rejo Village. Public health Ð The Kitadin-Embalut Mine provided a free health check-up service to the Bangunrejo Block A Village, on an annual basis for better quality of live of those living in the area around the mine. Professional development Ð The Jorong Mine provided training to 141 farmers from 4 villages. Environment Ð The Kitadin-Embalut Mine organized the “World Environment Day” between 24-25 June 2005 at SMP Negari 4 High School to create environmental awareness to students. The event featured a lot of environmental-related activities and an essay-writing contest of environmental topic.

Due to Banpu’s belief that “An Industry will be strong only when it is developed in tandem with social and environmental responsibility,” Banpu will continue to participate in the social development with responsibility and awareness of a good corporate citizen for a sustainable growth of the society we belong to.

20 B a n p u P u b l i c C o m p a n y L i m i t e d I n d u s t r i a l O u t l o o k

S t e a m C o a l T r a d e i n t h e W o r l d M a r k e t (Source: Barlow Jonker Pty. Ltd., December 2005) In 2005, the world’s coal business grew by a mere 1 per cent, which was down from last year’s growth rate due largely to the weakening of the world’s economy. All-year imports stood at 534 million tonnes or an increase from last year by 5 million tonnes, most of which by Japan, South Korea and Taiwan. This prompted Asia to import 51 per cent of the world’s coal imports. The three Asian countries of Japan, South Korea and Taiwan imported a combined amount of 219 million tonnes of coal, or a 2.4-per cent increase from a year ago, which accounted for 80 per cent of Asia’s markets. Meanwhile, coal imports by European market, which remains the world’s second largest market for coal, fell to 177 million tonnes from approximately 180 million tonnes in the previous year. Coal production and export remained very much in balance to the market’s demands. The People’s Republic of China exported approximately 77 million tonnes of coal, a decline by 4 million tonnes, from the previous year. Australia and the Republic of Indonesia, the world’s two major coal exporters, saw their combined coal exports rise to approximately 10.5 million tonnes this year, which perfectly filled the gap resulted from fewer coal exports by the People’s Republic of China. However, due to increasing demands by the market and the fact that the two countries had not so much coal excess left, the FOB therefore remained stable for as many as 8 months at around USD 52 per tonne. This, when compared to several years in the past, was quite a good year for coal in terms of price. In 2006, it is likely that coal export price and its market expansion will tend to fall due also to the continued weakening of the world’s economy. Yet, as oil prices in the world markets remain very much volatile and the fact that the world expects to see oil price to be over USD 50 per barrel, this will be a major factor to prevent both demands and prices of coal from further fall in the world’s markets.

World Thermal Coal Import World Thermal Coal Export in 2005 Thermal Coal Export Price & Freight Rate

million tonnes million tonnes USD/tonne 70.00 600.00 120.0 60.00 500.00 100.0 50.00 400.00 80.0 40.00 300.00 60.0 30.00

200.00 40.0 20.00

100.00 20.0 10.00

0 0 0

mbia 2001 2002 2003 2004 2005 ec-05

Jul-05

China

Jan-05

Russia

Apr-05

Jun-05

Oct-05

Feb-05

Sep-05

Mar-05

D

Nov-05

Aug-05

May-05

th Africa

Australia

Colo

Indonesia

Sou Coal Price FOB Newcastle

ther Country ther Country ther Country ther Country ther Country ther Country ther Country Asia Europe US, Canada, Mexico ther Country

O O O O O O O Other Countries O Freight Rate Newcastle/Japan

Source: Barlow Jonker Pty. Ltd.

A n n u a l R e p o r t 2 0 0 5 21 S t e a m C o a l T r a d e i n T h a i l a n d (Source: Coal Market Research, Banpu) Thailand’s use of steam coal, either produced locally in a form of lignite or imported from overseas in a form of bituminous coal, in 2005 totaled 28 million tonnes, or a rise by merely 4.3 per cent, which accounted for approximately 1 million tonnes increase when compared to a year ago. Most of the increase was bituminous imported by private sectors thanks to a steady increase of demand for coal as fuel in the cement production, which is expected to continue. In addition, higher oil prices mean more industries have switched to coal. In 2006, the BLCP Power Plant is also scheduled to start its production by the fourth quarter of the year, prompting the industry to import more than 2 million tonnes of bituminous coal from overseas compared to the year before.

E l e c t r i c i t y G e n e r a t i o n B u s i n e s s i n T h a i l a n d (Source: The Energy Policy and Planning Office) Thailand’s electricity consumption in 2005 rose 6.3 per cent from last year, where peak demand was registered in April at 20,537 megawatts, which was higher than the previous year’s peak demand by as much as 1,285 megawatts. This however was closed to a forecast made by the Energy Policy and Planning Office, the Ministry of Energy. During the past year, there was certain progress concerning the electricity industry reform according to the government’s policy where there were latest developments in the drafting of rules and regulations. The government managed to complete the drafting of the Electricity Industry Act as well as set up the Electricity Regulatory Commission to supervise the power business and to protect consumers. The Commission will oversee matters such as the issuance of business license to operators, the announcement of electricity rates to the public, the supervision to ensure that power businesses meet criteria and the settlement of disputes and appeal made by electricity consumers. Regarding ways and means to handle future competitions, since the Electricity Generating Authority of Thailand or better known now as EGAT Plc. remains a state enterprise where the government holds as much as 75 per cent of its shares and since the government remains focusing at the stability of Thailand’s power supply, the National Energy Policy Council therefore has resolved to allow EGAT to be allocated 50 per cent of a new production capacity between 2011 - 2015. Yet, the remaining 50 per cent of new power production capacity will be given to the private sector for further competition as determined in the government’s policy. In addition, the National Energy Policy Council also resolves to allow private power producers to enter the bid while barring EGAT Plc. from competing in the bidding process.

22 B a n p u P u b l i c C o m p a n y L i m i t e d R i s k F a c t o r s

To ensure that business risks are effectively managed, the Company has set up the Risk Management Committee, which convenes every quarter to review risks in all aspects. In addition, it has assigned each department via the Risk Manager and the Risk Coordinator to monitor, analyze and manage risks at the operation level. Besides, an external advisor is hired to lay down a risk management and analysis system, monitor its results and train executives and staff. Last but not least, the risk report is submitted to both the Audit Committee and the Company’s Board of Directors.

1 . F i n a n c i a l R i s k s 1.1 Exchange risk The Company has investments in the forms of assets and liabilities overseas which can be affected from an exchange volatility. As a result, the Company has a policy to reduce the exchange risk by the so-called natural hedging for its operations in Thailand and the Republic of Indonesia. At the same time, financial instruments are also implemented from time to time based on circumstances. As of 31 December 2005, most of the Company’s loans were in Thai Baht. The Company also had contracts to sell US dollars with banks to ensure that the US dollars it had was proportional to its foreign-currency assets. In addition, incomes overseas were kept in foreign currencies for reinvestment there, which made risk management more flexible, reduced possible impact and part of expenses resulted from the transactions. Its companies in the Republic of Indonesia which earn incomes in US dollar continue to buy Indonesian Rupiah based on their estimated monthly expenses to reduce the exchange rate risk between the two currencies.

1.2 Interest risk The Company’s financial status has a little impact from interest rate change in the Company’s loans since it has allocated both of its fixed-rate and floating-rate loans in a proportional manner to different types of its business. In addition, the Company has carefully monitored the current and future interest rate trends. Financial instruments were also implemented to reduce the interest rate risks. As of 31 December 2005, the Company’s fixed- and floating-rate loans accounted for 78 per cent and 22 per cent of all loans, respectively. The Financial Management Committee meanwhile has been established. Its monthly meeting is to brainstorm how to manage the group’s finance for maximum profit and for prevention and reduction of financial risks.

1.3 Coal swap The Company manages risk from volatile coal prices using the so-called coal swap to correspond to physical trade, which is done in a form of spot sale, to reduce the volatility in coal business’s performance. The Company has also established the Coal Swap Committee, which convenes every month to review the Company’s coal selling price for maximum profit and to reduce possible financial risks.

A n n u a l R e p o r t 2 0 0 5 23 2 . R i s k s i n C o a l B u s i n e s s 2.1 Risk from coal price volatility Volatility in coal prices as well as demand and supply are major risk factors when they come to marketing coal. The Company must manage the risk by expanding its customer base, inking deals that appropriately spread throughout the entire year, taking into consideration market conditions, and proper allocation of both long- and short-term contracts. The ultimate goal is to plan coal sales in the most efficient manner. In addition, a financial instrument is being used in the coal swap.

2.2 Delivery risk This involves risk from diversions of quality, quantity and time of delivery to customers. The Company controls its coal production and quality by introducing the ISO quality assurance system, making sure that its coal reserves are ready for emergency delivery to customers if needed in order to promtly respond to customer’s need and prevent possible damage, as well as signing long-term trading agreements with advanced delivery date for better production and delivery planning.

2.3 Risk from costs of production volatility One of the significant costs of production is fuel. At present, the Company’s machinery used in removing the overburden depends on diesel, making its production cost subject to the volatility of oil prices in the world’s markets. The Company is considering how to reduce its exposure to diesel in a bid to reduce the volatility of its coal business by planning fuel procurement, reducing the amount of its fuel consumption and improving the efficiency of its fuel use in general. For a long-term strategy, the Company also studies how to reduce the use of fuel-based machinery.

3 . R i s k s i n t h e P o w e r B u s i n e s s The Company’s investment risk in the power business is considered low as long as the agreement remains trouble-free. This is because investment return is quite stable as there is no risk in marketing and sales price since everything is clearly stated in the long-term Power Purchase Agreement (PPA) with the Electricity Generating Authority of Thailand. In addition, the amount of power to be purchased is fixed (based on the existing production capacity) while the price of power can be adjusted based on a cost of fuel and an exchange rate of Thai Baht (THB) at a particular time. Other risks in the power business are also low business risks such as the maintenance of machinery to maximize the power plant’s efficiency, cost management for administration efficiency and coordination with local community, to which Banpu has already had various measures to respond to these needs.

24 B a n p u P u b l i c C o m p a n y L i m i t e d 4 . R i s k f r o m P o l i t i c a l C h a n g e i n t h e R e p u b l i c o f I n d o n e s i a As the Company has coal operations in the Republic of Indonesia, we recognize political risk in a country we invest our money. The situation has been closely monitored and the Indonesian government has managed to produce some political stability and somewhat restore foreign investors’ confidence in the government. The Company has provided a protection for its USD 166.1 million investment in the Republic of Indonesia. This covers investments, loans and interests the Company has put in its subsidiaries in the Republic of Indonesia. Assets covered by the protection consist of investments in the following companies: 1. PT. Centralink Wisesa International (Holding company) 2. PT. Indo Tambangraya Megah (Holding company and coal distribution) 3. PT. Jorong Barutama Greston (Production and distribution - Jorong Mine) 4. PT. Trubaindo Coal Mining (Production and distribution - Trubaindo Mine) 5. PT. Kitadin (Production and distribution - Kitadin-Embalut Mine) 6. PT. Indominco Mandiri (Production and distribution - Indominco-Bontang Mine) 7. PT. Bharinto Ekatama (Production and distribution - Bharinto Mine)

5 . R i s k f r o m R e g u l a t o r y C h a n g e s i n t h e C o u n t r i e s W h e r e B a n p u H a s I n v e s t m e n t s Since most of Banpu’s operations are overseas; namely, in the Republic of Indonesia and the People’s Republic of China, this means the Company has to confront with risks from regulatory changes in these countries. The changes may affect the Company’s operations there. In the past year, there were several changes regarding domestic rules and regulations. Examples are: The Republic of Indonesia - The government changed its oil subsidy policy where it stopped subsidizing domestic oil price and let it float freely according to the market price, prompting the cost of gas in the Republic of Indonesia to rise sharply. This included the issue of export tax for coal. The People’s Republic of China - Due to constant amendments of rules and regulations to respond to the country’s rapid economic growth, there were several changes especially in the energy business of both coal and power. In the coal business, a policy to promote safety in underground mining operations has been issued where small, low safety standard mines are shut down. In addition, a coal resource tax is newly adjusted in each province, a steam coal import tax has been reduced and steam coal exporters are now facing with a declining rate of value added tax refund. In the power business, a ceiling power price is abolished. The power price will from now on reflect the cost of fuel and there are attempts to promote fuel efficiency in the power generation. Based on the risks described above, the Company has so far assigned responsible persons in each country to monitor the regulatory changes both at the federal and local government levels. It has also hired a local legal advisor to help interpret and advise guidelines for compliance. When making a decision to invest more in a country, the Company takes into consideration regulatory changes as one of the major factors to determine the sensitivity analysis.

A n n u a l R e p o r t 2 0 0 5 25 6 . E n v i r o n m e n t a l R i s k The Company’s mining is an open-pit mine operation where overburden is dug out to remove the coal and therefore inevitably affects the environment. This refers to non-living environment such as water and air and living environment; namely, the society and surrounding communities. As the Company’s coal and power plant operations are beneficial to the country’s economy but at the same time affect the environment, as a result, Banpu has a policy and plan with measures that correspond to the rules and laws of the countries it has operations. To ensure continued development, here are some of Banpu’s measures and plans on environment: Pre-operation - Banpu will do the Environmental Impact Assessment (EIA), as an attempt to come up with an environmental management scheme prior to its actual operation. The Company will do the EIA based on each country’s environmental standard in order to produce an Environmental Mitigation Plan and an Environmental Monitoring Program that will be constantly implemented. During the operation - Banpu will continue managing the environment based on results from the EIA report. In Thailand, its coal mines are subjected to periodical inspections by the Environmental Institute of Chulalongkorn University every 3 months. In addition, a report of environmental compliance is sent to the relevant authorities every 6 months. In the Republic of Indonesia, the mines there are subject to environmental inspection as well. Besides, the Republic of Indonesia’s tekMIRA and Koneba, an R&D agency and an energy conservation unit respectively, provide advice after inspecting the Company’s production system. Banpu also implements the ISO 14001 environmental management system. One of its policies is to ensure that every Banpu business meets the international standard on environmental management where it also has a plan to train the ISO 14001 system to mine operators so that they can assess environmental aspects at an initial stage and design a prevention plan. Besides, an internal department and a recognized external agency also conduct the environmental audit. Aside from legal compliance and meeting international standards, the Company also implements the so-called Environmental Performance Indicators to assess its environmental activities. A Global Reporting Initiative (GRI) has been recently introduced to promote sustainable development reporting that focuses on stakeholder analysis and reporting transparency of data & information.

26 B a n p u P u b l i c C o m p a n y L i m i t e d Post-operation - The Company plans the environmental management at the end of its operation where an environmental mitigation and mine rehabilitation master plan will be drafted. In addition, a mine rehabilitation fund will be established with enough funds to pursue its operation. Recognized institutes such as Mahidol University and experts from Kasetsart University are selected to handle the plan, which has been completed for every mine in Thailand. In the Republic of Indonesia, Banpu has coordinated with the R&D Center for Mineral and Coal Technology, Ministry of Energy & Mineral Resources (tekMIRA), to direct the plan. This also extends to a mine closure plan, which will set a standard for other mines in the Republic of Indonesia. At present, Jorong Mine has already completed its master plan since 2005. Indominco-Bontang Mine and Trubaindo Mine have started theirs since 2005 and expect to complete it by 2006. So is the Kitadin-Embalut Mine.

7 . S o c i a l a n d C o m m u n i t y R i s k s In this regard, Banpu has tried to mitigate it as much as possible while creating a maximum profit to both the society and the surrounding community. The Company has so far initiated various projects around Thailand and the Republic of Indonesia, details are as follows: The Community’s Attitude Survey where it hired the Rajabhat Institute of Lampang Province to seek people’s attitudes towards Banpu’s Lampang Mine. In the Republic of Indonesia, Banpu hired University of Indonesia (UI) to assess social impacts suffered by the mine’s neighboring communities, produce a community development manual and the community development plan for a continued development of the community that spans throughout the entire term of the project, and set up a community development fund based on the study. At present, Banpu’s mines in the Republic of Indonesia have already set up the Community Consultative Committee (CCC), which consist of representatives from the mine, government agencies and the public to review the annual community development programs.

Banpu pursues several community development projects where the communities are allowed to participate since the beginning. Some of its community projects are to promote agriculture and handicraft, support education, finance professional development and promote marketing activities.

A n n u a l R e p o r t 2 0 0 5 27 O p e r a t i o n s D u r i n g t h e P r e v i o u s Y e a r

Various businesses experienced quite a robust growth during the past year, leading to high energy demands which prompted coal price to remain relatively high throughout the year. As one of the country’s leading coal exporters, Banpu Public Company Limited therefore recorded quite a satisfactory performance. In 2005, its total sales went up to THB 25.209 billion, or a 46-per cent increase from the same period last year of a mere THB 7.982 billion. This was a result of an increase of its coal price, which was up in tandem with coal prices in the region and Banpu’s aggressive sales expansion. In addition, Banpu also recognized profit from the sale of its non-core business, resulting in a net profit of THB 5.565 billion, or a 53-per cent increase from the same period a year ago of THB 1.920 billion.

C o a l B u s i n e s s Stable demands for coal helped made the coal price strong throughout 2005. In Asia Pacific region, demands for coal remained relatively high and peaked during the first seven months of last year due largely to rising demands for coal in the region and the fact that various power plants in the region stocked up coals. However, as power plants had enough coal in their reserves, the coal price slightly dipped at the end of the year. During the past year, Banpu was able to sell a total of 17 million tonnes of coals from its production mines in the Republic of Indonesia and Thailand, a rise by 9 per cent or 1.38 million tonnes as compared to the previous year. Most of the increase was sales from Indominco-Bontang Mine and a newly-opened mine in Kalimantan, the Republic of Indonesia named Trubaindo Mine, which started production in May 2005. The Trubaindo Mine registered a sale of 1.5 million tonnes of coal. Aside from new production resources, Banpu also expanded its investment in the People’s Republic of China where it holds a 40-per cent stake in a joint venture of a coal mine in Henan Province. In marketing term, Banpu remained focusing at customers in industrialized countries, where coal would be exported to power producers in Japan, Taiwan, India, the Philippines, South Korea, the Republic of Indonesia and certain European countries. Meanwhile, main customers in Thailand consisted of factories in the cement industry and the power and steam industry.

28 B a n p u P u b l i c C o m p a n y L i m i t e d For the year ending

2005 2004 2003

Coal Sales Volume (Million Tonnes) 17.00 15.62 13.73 Jorong 2.92 2.92 2.87 Indominco - Bontang 7.36 7.92 6.41 Trubaindo 1.45 - - Kitadin - Embalut 1.62 1.94 2.63 Thailand 3.65 2.78 1.58 Other sources - 0.05 0.24

Coal Sales Revenues (THB Million) 25.05 17.06 12.33 Jorong 3.02 2.44 2.19 Indominco - Bontang 14.02 10.52 6.62 Trubaindo 3.16 - - Kitadin - Embalut 2.43 2.42 2.35 Thailand 2.43 1.57 0.86 Other sources - 0.10 0.32

Gross Profit Margin (%) 45 39 29 Jorong 43 41 31 Indominco - Bontang 46 39 30 Trubaindo 42 - - Kitadin - Embalut 40 38 26 Thailand 48 38 33 Other sources - 9 3

P o w e r B u s i n e s s BLCP Power Limited Banpu Public Company Limited holds 50 per cent of BLCP Power Limited’s paid-up capital (via Banpu Coal Power Ltd. and Synergy Power Co., Ltd. at 35 per cent and 15 per cent, respectively). Located at the Map Ta Phut Industrial Estate, BLCP Power’s 1,434-megawatt power plant depends on premium-graded coal. Having signed the 25-year Power Purchase Agreement with the Electricity Generating Authority of Thailand (EGAT), starting from the first day of its commercial operation, BLCP has borrowed a total of USD 1.1 billion from both local and international financial institutions for the construction of its power plant, which has already started since August 2003. BLCP power plants’ Unit 1 and 2 are expected to generate power on a commercial basis by October 2006 and February 2007, respectively. Ratchaburi Electricity Generating Holding Public Company Limited (RATCH) Banpu has invested directly and indirectly in RATCH for a total of 14.99 per cent of its paid-up capital.

A n n u a l R e p o r t 2 0 0 5 29 R e v e n u e S t r u c t u r e F o r t h e p r e v i o u s 3 y e a r s e n d i n g 3 1 D e c e m b e r

B a n p u P u b l i c C o m p a n y L i m i t e d (Unit: THB Million) % of Conduct 2005 2004 2003 Share- Products/Services by holding Revenue % Revenue % Revenue %

Sales Revenues 1. Domestic Coal BP 100 2,150 83.58 1,367 83.51 773 74.47 2. Imported Coal BP 100 370 14.38 215 13.14 218 21.00 3. Other Revenues BP 100 52 2.04 55 3.35 47 4.53

Total Sales Revenues 2,572 100.00 1,637 100.00 1,038 100.00

Participating Profit (Loss) from Investment in Associated Companies (Equity Method) (119) (28) 574

Total Revenues 2,453 1,609 1,612

B a n p u P u b l i c C o m p a n y L i m i t e d a n d I t s S u b s i d i a r i e s (Unit: THB Million) % of Conduct 2005 2004 2003 Share- Products/Services by holding Revenue % Revenue % Revenue %

Sales Revenues - Thailand 1. Domestic Coal BP 100 1,541 6.11 950 5.52 487 3.90 SLMM 100 ------BPI 100 652 2.58 415 2.41 317 2.54 BMC 100 4 0.02 141 0.81 33 0.26 CMMC 94, 48 229 0.91 67 0.39 19 0.15 2. Imported Coal BP 100 334 1.33 194 1.13 209 1.67 BMC 100 215 0.85 267 1.55 61 0.49 BPS 100 905 3.59 427 2.47 377 3.02 BPI 100 1,349 5.35 1,302 7.56 1,220 9.77 SLM 100 105 0.42 ---- 3. Other Revenues 91 0.36 86 0.50 67 0.54

Total Sales Revenues - Thailand 5,425 21.52 3,849 22.34 2,790 22.35

30 B a n p u P u b l i c C o m p a n y L i m i t e d B a n p u P u b l i c C o m p a n y L i m i t e d a n d I t s S u b s i d i a r i e s ( c o n t i n u e d ) (Unit: THB Million) % of Conduct 2005 2004 2003 Share- Products/Services by holding Revenue % Revenue % Revenue %

Sales Revenues - Overseas 1. Coal - International Trade Indominco 100 13,805 54.76 10,265 59.59 6,619 53.03 Kitadin 100 1,983 7.87 1,886 10.95 1,941 15.55 Trubaindo 90 2,750 10.91 --- - Jorong 95 1,175 4.66 1,147 6.66 1,048 8.40 2. Industrial Minerals 71 0.28 80 0.46 84 0.67

Total Sales Revenues - Overseas 19,784 78.48 13,378 77.66 9,692 77.65

Total Sales Revenues 25,209 100.00 17,227 100.00 12,482 100.00

Participating Profit (Loss) from Investment in Associated Companies (Equity Method) (119) (28) 574

Total Revenues 25,090 17,199 13,056

Notes: 1. Other incomes consisting of Industrial minerals operated by Yen Bai Banpu Calcium Carbonate Co., Ltd. Other services 2. The Company did not recognize sales incomes derived from the power business since its shareholding ratio is less than 50 per cent therein.

D i v i s i o n o f R e s p o n s i b i l i t y P o l i c y a m o n g C o m p a n i e s w i t h i n B a n p u G r o u p This policy applies to operations of companies engaging in the production and sales of coal where the Company and its subsidiaries in Thailand will produce and distribute coal to markets in Thailand only. On the other hand, foreign subsidiaries will produce and sell coal overseas whereby part of their production might be sold to Thailand as well through the Company and/or other subsidiaries through a sales price set according to the market rates normally transacted among customers in general.

A n n u a l R e p o r t 2 0 0 5 31 S u m m a r y o f M a j o r C h a n g e s a n d D e v e l o p m e n t s i n 2 0 0 5 a n d M a j o r C u r r e n t E v e n t s

C o a l B u s i n e s s On 16 May 2005, Banpu China Pte. Ltd., Banpu’s 100-per cent subsidiary company established in Singapore, signed the Sino-Foreign Equity Joint Venture Contract with Hebi Coal and Electricity Co., Ltd., (HCEC) to set up a joint venture company named Hebi Zhong Tai Mining Co., Ltd., (the joint venture company) in which Banpu China Pte. Ltd., and HCEC hold 40 per cent and 60 per cent of the shares, respectively. Banpu China Pte. Ltd., plans to invest RMB 313.33 million or around THB 1.5 billion while HCEC will invest in assets consisting of construction, machinery and equipment as well as a coal mining license which, based on an appraised price, will be approximately RMB 470 million. The joint venture firm has been established to buy a coal mine with a production capacity of 1 million tonnes a year and a coal reserve of approximately 35 million tonnes. The firm expects to expand its production capacity by another 600,000 tonnes to reach 1.5 million tonnes a year, the process of which is expected to complete in 2008. The expanded area has registered a coal reserve of approximately 50 million tonnes. The quality of the coal is semi anthracite. The joint venture company will be able to produce coal in the existing mining area as soon as the incorporation is finished. On 26 August 2005, Banpu Minerals Singapore Pte. Ltd., (BMS) and PT. Nusantara Thai Mining Services (NTMS) (Banpu’s subsidiary company and a holder of 95 per cent and 5 per cent of the registered capital of PT. Nusantara Thai Coal, respectively) sold all the shares in PT. Nusantara Thai Coal (NTC), a concessionaire of the Mampun Pandan coal mine, which is a small coal resource, to PT. Bungo Raya Nusantara and PT. Bara Adhipratama.

P o w e r B u s i n e s s On 25 March 2005, the Company by Banpu Power Vietnam I Pte. Ltd., (BPVI) sold its shares in Amata Power (Bian Hoa) Ltd. (APBH), which held 30 per cent of all subscribed shares therein, to Electrowatt Ekono AG Limited (Electrowatt). The Company received a total of USD 1,378,572 from the transaction in April 2005. On 9 February 2006, Banpu Power Ltd., (a subsidiary which Banpu holds 99.99 per cent of its shares) signed an agreement to acquire 90.99 per cent of Peak Pacific Investment Company Limited (PPIC) and 100 per cent of Interstate Energy Corporation Pte. Ltd. (IEC). PPIC and IEC, both of which are Singapore-reqistered companies, are major shareholders both directly and indirectly to the 4 combined heat and power operations in the People’s Republic of China. Total combined power generated from the 4 plants are 279 megawatts and 1,000 tonnes per hour of steam. The total consideration is USD 84.34 million or THB 3.374 billion.

32 B a n p u P u b l i c C o m p a n y L i m i t e d O t h e r s On 14 June 2005, the Company and Banpu Minerals Co., Ltd., (a subsidiary which Banpu holds 99.99 per cent of its shares) that had acquired 110,000 shares or 18.33 per cent of all the shares of Royal and Sun Alliance Insurance (Thailand) Limited signed an agreement to sell Royal and Sun Alliance Insurance’s shares with all of its other shareholders to IAG International Pty Limited, NHCT Limited and other parties. Banpu and Banpu Minerals Co., Ltd., enjoyed THB 174 million worth of profits from the sales of Royal and Sun Alliance Insurance (Thailand) Ltd.’s shares. On 15 July 2005, the Company, which had acquired 66.67 per cent of Yen Bai Banpu Calcium Carbonate Limited’s capital (YBB), signed an agreement to dispose of all investments therein to Imerys Pigments Pte. Ltd. (Imerys). Imerys was approved by the Vietnamese authorities on 11 October 2005 to change investors in the joint venture company. The disposal of the investment was completed under the agreement on 23 November 2005. Banpu recorded a pre-tax profit resulted from the disposal of its investment in YBB for a total of THB 110 million. On 16 November 2005, the Company issued unsubordinated, unsecured debentures without nominee but with a name certificate of debenture holders to institutional investors. The debentures were issued in 3 series. The first one was THB 1.5 billion debentures with a maturity of 5 years and a fixed interest rate of 7.27 per cent per annum. The second series of THB 1.0 billion debentures came with a maturity period of 5 years and the reference rate plus 0.90 per cent per annum. The third one was THB 2.5 billion debentures, a maturity period of 10 years and a fixed interest income of 8.00 per cent per annum. TRIS Rating Co., Ltd., (TRIS) rated the debentures “A+.” The Company was approved to issue and offer the debentures by the Extraordinary Shareholders Meeting No. 1/2005 on 2 November 2005. The Board of Directors Meeting which was held on 22 February 2006 resolved that the Annual General Meeting of Shareholders for the year 2006 be proposed to consider and approve the payment of the annual dividend of the year 2005 (starting from 1 January - 31 December 2005) at the rate of THB 12.50 per share, of which THB 3.50 per share was paid as interim dividend and THB 5.00 per share was paid as special dividend on 29 September 2005 and 28 October 2005, respectively. The remaining of THB 4.00 per share would be further paid out of the retained earnings and profits from the operation during the period of 1 July 2005 - 31 December 2005. The THB 4.00 per share dividend would be payable to the shareholders whose names appear on the shareholder register book as of 10 March 2006, which would be appropriated from the profits derived from the business operation under the BOI privileges at the rate of THB 1.90 per share and from the non-BOI business operation at the rate of THB 2.10 per share. The payment would be made on 11 April 2006.

A n n u a l R e p o r t 2 0 0 5 33 M a j o r S h a r e h o l d e r s T e n M a j o r S h a r e h o l d e r s a s o f 3 1 D e c e m b e r 2 0 0 5

Number of Major Shareholders Percentage Shares Hold

1. The Vongkusolkit Family and related companies* 51,571,402 18.98 2. Thai NVDR Co., Ltd. 16,859,958 6.20 3. Chase Nominees Limited 1 5,736,500 2.11 4. Mellon Nominees (UK) Limited 5,032,100 1.85 5. Pictet & Cie 4,110,850 1.51 6. HSBC (Singapore) Nominees Pte. Ltd. 3,660,446 1.35 7. Government of Singapore Investment Corporation 3,604,800 1.33 8. The Bank of New York Nominees Ltd. A/C of New York 3,320,300 1.22 9. State Street Bank and Trust Company 3,012,696 1.11 10. Fortis Global Custody Services N.V. 2,927,000 1.08

Notes: * The Vongkusolkit Family and related companies comprise of No. of Shares Percentage 1) The Vongkusolkit Family 25,810,744 9.50 2) TME Capital Co., Ltd. 9,864,000 3.63 The Vongkusolkit Family holds 52.42 per cent of its paid-up capital 3) Mitr Phol Sugar Corp., Ltd. 8,053,808 2.96 The Vongkusolkit Family holds 27.00 per cent of its paid-up capital 4) MP Particle Board Co., Ltd. 2,105,965 0.77 United Farmer and Industry Co., Ltd. holds 99.99 per cent of its paid-up capital 5) Ufinves Co., Ltd. 1,951,535 0.72 The Vongkusolkit Family holds 42.36 per cent of its paid-up capital 6) United Farmer and Industry Co., Ltd. 1,779,445 0.65 Mitr Phol Sugar Corp., Ltd. holds 87.56 per cent of its paid-up capital 7) Pacific Sugar Corporation Ltd. 681,905 0.25 The Vongkusolkit Family holds 45.12 per cent of its paid-up capital 8) Mitr Phu Viang Sugar Co., Ltd. 615,200 0.23 United Farmer and Industry Co., Ltd. holds 99.99 per cent of its paid-up capital 9) Mitr Kalasin Sugar Co., Ltd. 480,000 0.18 United Farmar and Industry Co., Ltd. holds 99.99 per cent of its paid-up capital 10) City Holding Co., Ltd. 228,800 0.08 The Vongkusolkit Family holds 100.00 per cent of its paid-up capital

T h e L i m i t a t i o n o f F o r e i g n S h a r e h o l d e r s The foreign shareholders are able to hold not more than 40 per cent of its paid-up capital. As of 31 December 2005, foreign shareholders held 33.29 per cent of the Company’s paid-up capital.

34 B a n p u P u b l i c C o m p a n y L i m i t e d D i v i d e n d P o l i c y The Company has a policy to pay approximately 60 per cent of its annual net profits after corporate income tax as its dividend. Payment will be made out of operation profits generated from the Company’s main businesses where its Board of Directors will take into consideration operating profit, financial conditions and the Company’s demands for capital at present and in the future. Its subsidiaries meanwhile have a policy to pay dividend out of their operation net profits following the deduction of statutory reserves where the Board of Directors will also take into consideration operation profits, financial conditions and capital demands and will propose in the shareholders’ meeting for approval. Banpu Public Company Limited has so far paid the following dividends:

Interim Dividend Annual Dividend Special Dividend Total Year (THB per share) (THB per share) (THB per share) (THB per share)

2002 1.50 1.10 - 2.60 2003 1.50 2.50 - 4.00 2004 2.25 3.25 - 5.50 2005 3.50 4.00 * 5.00 12.50

Note: * The Board of Directors’ Meeting on 22 February 2006 resolved to allow the Company to pay dividend for operation during the period between 1 July 2005 and 31 December 2005 at a rate of THB 4.00 per share. Payment will be made on 11 April 2006.

A n n u a l R e p o r t 2 0 0 5 35 O r g a n i z a t i o n C h a r t B a n p u P u b l i c C o m p a n y L i m i t e d A s o f 3 1 D e c e m b e r 2 0 0 5

B o a r d o f D i r e c t o r s

Corporate Governance Audit Committee and Nomination Committee

------

Compensation Committee

C h i e f E x e c u t i v e O f f i c e r

------Office of Chief Executive Audit Department Officer

C h i e f O p e r a t i n g Corporate Services O f f i c e r

Business Development

China Coal Business Coal Business Power Business

36 B a n p u P u b l i c C o m p a n y L i m i t e d M a n a g e m e n t S t r u c t u r e

The Company’s management structure as of 31 December 2005 consists of committees and the management. The committees comprise the Audit Committee, the Corporate Governance and Nomination Committee, the Compensation Committee, Directors and Independent Directors.

T h e B o a r d o f D i r e c t o r s consists of the following persons: 1. Mr. Krirk-Krai Jirapaet Chairman of the Board of Directors and Independent Director 2. Mr. Soonthorn Vongkusolkit Vice Chairman of the Board of Directors 3. Mr. Rutt Phanijphand Independent Director 4. Mr. Manas Leeviraphan Independent Director 5. Mr. Montri Mongkolswat Independent Director 6. Mr. Kopr Kritayakirana Independent Director 7. Mr. Somkiat Chareonkul Independent Director 8. Mr. Sawatdiparp Kantatham Director 9. Mr. Metee Auapinyakul Director 10. Mr. Ongart Auapinyakul Director 11.Mr. Chanin Vongkusolkit Director 12. Mr. Vitoon Wongkusolkit Director

Notes: Mr. Krirk-Krai Jirapaet replaced Mr. Chira Panupong who retired on 27 April 2005 as Chairman of the Board of Directors. Mr. Rutt Phanijphand replaced Mr. Somdee Chareonkul who retired on 27 April 2005 as Independent Director. Mr. Somkiat Chareonkul replaced Ms. Sukon Kanchanalai who retired on 27 April 2005 as Independent Director. Ms. Boonsiri Charusiri was appointed as Secretary to the Board of Directors to replace Mr. Prachuab Trinikorn who retired on 31 December 2005.

Directors with Authority to Sign on Behalf of the Company Two of the following six: Mr. Soonthorn Vongkusolkit, Mr. Sawatdiparp Kantatham, Mr. Vitoon Wongkusolkit, Mr. Chanin Vongkusolkit, Mr. Metee Auapinyakul, Mr. Ongart Auapinyakul, shall jointly sign together with the Company’s seal.

Duties and Responsibilities of the Board of Directors The Board is accountable to shareholders to do business and supervise the management in order to meet targets that will promote the best interests of shareholders. The Board is charged to act within best practices of business ethics by taking into consideration the interests of all stakeholders. The Board has a duty to strictly comply with the laws, the Company’s objectives, the articles of Association and resolutions of shareholders’ meeting, by acting in good faith and by taking care of both short-term and long-term interests of shareholders, including compliance with rules and regulations of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission.

A n n u a l R e p o r t 2 0 0 5 37 In performing duties, the Board will appoint CEO to be responsible for the Company’s businesses and supervise its management. However, it is the Board’s duties and responsibilities to consider and approve the follow- ing. 1. The Company’s policy, business strategy, business plan and annual budget. 2. Monthly and quarterly performance report in comparison to the Company’s plan, budget and trends in subsequent period of the year. 3. Investment worth more than THB 300 million. 4. Investment, which exceeds 5 per cent of a total investment budget of an approved project and 10 per cent of a total non-project investment budget. 5. Purchase and disposal of assets and acquisition and participation in a joint venture project, which is not conflicting with the Stock Exchange of Thailand’s rules, for an amount that exceeds the CEO’s authority. 6. Transaction with material effect to the Company’s financial status, liabilities, business strategy and reputation. 7. An entering into a contract not related to a normal course of business and a contract related to an important normal business. 8. Parts of related transaction between the Company, its subsidiaries or affiliates and related individuals that do not require resolution of the shareholders’ meeting. 9. Any transaction which may cause the Company’s Debt-to-Equity Ratio to exceed 2.5 : 1. 10. Payment of interim dividend. 11. Net borrowing which exceeds a maximum stated in a budget or an estimate that exceeds THB 100 million. 12. Changes in policy and practice with material implication to accounting, risk management and reserves. 13. Significant changes in financial control and business operation. 14. Determination and review of authorization granted to CEO, EO, COO and Vice Presidents of business units. 15. Recruitment of CEO, approval to recruit and employ EO and COO as proposed by the CEO, approval of budget, salary, bonus or bonus formula and formula to adjust annual remuneration package of senior executives and employees. 16. Appointment and termination of directors and the Company Secretary or the Company Secretary. 17. Authorization to Chairman of the Board of Directors, CEO or any director and amendment to the authorization. 18. Appointment and determination of duties of Sub-Committees. 19. Establishing and supervising the management on the basis of good corporate governance practice. 20. Appointment of directors or executives as director of subsidiary and affiliated companies. 21. Registration of new company and dissolution of company. 22. Amendment of the Board of Directors’ approval authority under Clause 1-21.

The Board of Directors requires that the Board of Directors’ performance and the director’s independence be evaluated on an annual basis. The Corporate Governance and Nomination Committee has been entrusted to do the job.

38 B a n p u P u b l i c C o m p a n y L i m i t e d T h e A u d i t C o m m i t t e e consists of the following persons: 1. Mr. Manas Leeviraphan Chairman of the Audit Committee 2. Mr. Montri Mongkolswat Member of the Audit Committee 3. Mr. Somkiat Chareonkul Member of the Audit Committee

Note: Mr. Somkiat Chareonkul replaced Ms. Sukon Kanchanalai who retired on 27 April 2005 as Member of the Audit Committee.

The Audit Committee is delegated a three-year term, starting from 25 November 2002.

Duties and Responsibilities of the Audit Committee The Audit Committee’s responsibilities are to review the Company’s financial statements; assess an adequacy of an internal control and risk management system and the compliance with relevant laws, rules and regulations; prepare the Audit Committee’s performance report to the Board of Directors for the Board’s approval or to propose to the Shareholders’ Meeting. Duties and responsibilities of the Audit Committee are as follows: 1. To review the Company’s financial statement for its accuracy and adequacy. 2. To ensure that the Company has efficient and proper internal control system and internal audit system. 3. To ensure the Company’s compliance with the law on securities and exchange, the Stock Exchange of Thailand’s terms and requirements and other laws relating to the Company’s business. 4. To consider, choose, propose for appointment the Company’s auditor and recommend the auditors’ fee. 5. To consider disclosing the Company’s information in case there is any related transaction with possible conflicts of interest to enhance accuracy, transparency, and adequacy. 6. To prepare the Audit Committee’s supervisory report, which will be published in the Company’s annual report and must be signed by the Chairman of the Audit Committee. 7. To continue reviewing major risk management procedures from what the Risk Management Committee, which is set up by the management, has done for consistency with the internal control procedures. 8. To convey opinions and views regarding the appointment, termination, operating result, budget and personnel of the Internal Audit Department. 9. To review and propose for changes of scopes and duties and responsibilities of the Audit Committee to meet changing conditions and circumstances. 10. To prepare and propose the Audit Committee’s performance report to the Board of Directors at least once a year. 11.To perform other work as designated by the Board of Directors upon the Audit Committee’s approval.

To ensure that the Audit Committee can efficiently perform their tasks, it shall: 1. Be empowered to invite or order the management or supervising staff to attend a meeting for clarification purpose or to submit relevant documents. 2. Hire consultants or spend otherwise in relation to its performance in which the Company responsible for expenses.

A n n u a l R e p o r t 2 0 0 5 39 T h e C o r p o r a t e G o v e r n a n c e a n d N o m i n a t i o n C o m m i t t e e consists of the following persons: 1. Mr. Kopr Kritayakirana Chairman of the Corporate Governance and Nomination Committee 2. Mr. Soonthorn Vongkusolkit Member of the Corporate Governance and Nomination Committee 3. Mr. Sawatdiparp Kantatham Member of the Corporate Governance and Nomination Committee 4. Mr. Somkiat Chareonkul Member of the Corporate Governance and Nomination Committee

Note: Mr. Somkiat Chareonkul replaced Mr. Montri Mongkolswat as Member of the Corporate Governance and Nomination Committee.

The Corporate Governance and Nomination Committee is delegated a three-year office term, starting from 25 February 2004.

Duties and Responsibilities of the Corporate Governance and Nomination Committee As its name suggests, the Corporate Governance and Nomination Committee has 2 major roles: to consider policy and practices of corporate governance and business ethics plus monitoring compliance within the framework; and to recruit and select personnel as directors, Chief Executive Officer and Executive Officers. The Committee also reviews a succession plan to look for appropriate personnel who will fill in senior management positions (starting from Department Vice Presidents and over) before reporting to the Board of Directors for proposing to the Shareholders’ Meeting, as the case may be. Duties and Responsibilities of the Corporate Governance and Nomination Committee are as follow: 1. To consider and review whether the corporate governance policy and practices are appropriate and adequate; to update the policy on an ongoing basis. 2. To monitor and supervise an implementation of the corporate governance policy by directors and employees to ensure that they are consistent with the policy and practices drafted by the Board; to provide a channel for stakeholders to file grievances about corporate governance or business ethics. 3. To review structure and components of the Board of Directors; to monitor the term of office of directors, Chief Executive Officer and Executive Officers; to prepare succession plan of senior executive members (starting from Department Vice President and over). 4. To recruit and select persons as Directors, Chief Executive Officer and Executive Officers when the term is due or whenever there is a vacancy. 5. To recommend assessment procedures of Directors and the Board of Directors to the Board of Directors; to participate in such assessment and monitor solutions implemented after such assessment. 6. To review and propose updates of scopes, duties and responsibilities of the Corporate Governance and Nomination Committee to reflect prevailing circumstances. 7. To prepare an operating report and submit to the Board of Directors at least once a year. 8. To do any other things as designated by the Board of Directors.

40 B a n p u P u b l i c C o m p a n y L i m i t e d The Board of Directors requires all new directors to attend an orientation session to recognize the Company’s expectations towards their duties and responsibilities, its policies and practices, business and operations. The orientation is aimed to make sure that directors are ready to perform their duties while providing them with new insights on how to supervise the business, industrial outlook, new technology and innovation and etc. The bottom line is to enable directors to perform their duties efficiently.

To ensure that the Corporate Governance and Nomination Committee can work efficiently, it shall: 1. Be empowered to invite or order the management or supervising staff to attend meeting for clarification purpose or to submit relevant documents. 2. Hire consultants or spend otherwise in relation to its performance in which the Company responsible for expenses.

T h e C o m p e n s a t i o n C o m m i t t e e consists of the following persons: 1. Mr. Rutt Phanijphand Chairman of the Compensation Committee 2. Mr. Vitoon Wongkusolkit Member of the Compensation Committee 3. Mr. Montri Mongkolswat Member of the Compensation Committee

Notes: Mr. Rutt Phanijphand replaced Ms. Sukon Kanchanalai who retired on 27 April 2005 as Chairman of the Compensation Committee. Mr. Somdee Chareonkul who retired on 27 April 2005.

The Compensation Committee is delegated a three-year office term, starting from 25 February 2004.

Duties and Responsibilities of the Compensation Committee The Compensation Committee’s responsibilities are to convey opinions and views regarding compensation management to the Board of Directors for their approval or proposing to the Shareholders’ Meeting, as the case may be. 1. To recommend ways and means of paying compensations and other fringe benefits to the Board of Directors and other sub-committees appointed by the Board of Directors. 2. To consider and recommend any other compensation by taking duties and responsibilities of Chief Executive Officer and Executive Officers into consideration and by reviewing assessment rules of work performance to determine annual compensations. 3. To review compensation structures and rules as stated in 1. and 2. so that they suit corporate duties and responsibilities, operating results and market conditions at the time. 4. To overview corporate budgets in general regarding salary increase and annual bonus, as well as any other fringe benefits for its employees. 5. To review and propose updates of scopes, duties and responsibilities of the Compensation Committee to reflect prevailing circumstances. 6. To prepare an operating report and submit it to the Board of Directors at least once a year. 7. To do any other things as designated by the Board of Directors.

A n n u a l R e p o r t 2 0 0 5 41 To ensure that the Compensation Committee can efficient perform its jobs, it shall: 1. Be empowered to invite or order the Management or supervise staff to attend a meeting for clarification purpose or to submit relevant documents. 2. Hire consultants or spend otherwise in relation to its performance in which the company responsible for expenses.

T h e M a n a g e m e n t consists of the following persons: 1. Mr. Chanin Vongkusolkit Chief Executive Officer 2. Mr. Rawi Corsiri Chief Operating Officer - Acting Group Senior Vice President - Coal and Power Business 3. Mr. Prachuab Trinikorn Group Senior Vice President - Corporate Services 4. Mr. Chanchai Jivacate Group Senior Vice President - Business Development 5. Ms. Somruedee Chaimongkol Senior Vice President - Finance

Note: Mr. Prachuab Trinikorn retired on 31 December 2005.

Duties and Authority of Chief Executive Officer 1. Review and adjust annual operation plans not exceeding THB 100 million. 2. Screen and propose annual salary adjustment, staff’s bonus budget and major welfare offered to staff at level 20 and 21. 3. Review, approve and sign sales agreements having terms of more than 3 years. 4. Consider and make decisions to sell property in any cases without value limitation. 5. Consider and make decisions to buy property worth less than THB 100 million per transaction or project, as the case may be, in compliance with the laws. 6. Review and make investment decisions in other businesses, joint ventures, new company set-up, investment in common shares, sales of investment and any contract not exceeding THB 300 million per transac- tion or project, as the case may be. 7. Review and approve a signing of currency hedging contracts as well as sales or purchase of currency forward contracts. 8. Review and approve the sales of the following assets with no limited amount: sales of inventory, sales of spare parts and accessories and sales of machinery and equipment.

The Board of Directors requires that the performance of its Chief Executive Officer and other senior executives be evaluated by using criteria closely linked with the Company’s strategy and annual plan to determine appropriate remunerations and other incentives.

I n d e p e n d e n t D i r e c t o r s (50 per cent in total numbers of the Company’s Directors) consists of the following persons: 1. Mr. Krirk-Krai Jirapaet Independent Director 2. Mr. Manas Leeviraphan Independent Director 3. Mr. Montri Mongkolswat Independent Director 4. Mr. Kopr Kritayakirana Independent Director 5. Mr. Somkiat Chareonkul Independent Director 6. Mr. Rutt Phanijphand Independent Director

42 B a n p u P u b l i c C o m p a n y L i m i t e d Notes: Mr. Krirk-Krai Jirapaet replaced Mr. Chira Panupong who retired on 27 April 2005 as Chairman of the Board of Directors and Independent Director. Mr. Rutt Phanijphand replaced Mr. Somdee Chareonkul who retired on 27 April 2005 as Independent Director. Mr. Somkiat Chareonkul replaced Ms. Sukon Kanchanalai who retired on 27 April 2005 as Independent Director.

“Independent Director” is defined as follows. 1. A person who holds no more than 5 per cent of paid-up capital of the Company, its subsidiaries, affiliates or relevant companies including shares held by relating persons. 2. Being a non-executive director in the management of the Company, its subsidiaries, affiliates, relevant companies or major shareholders including not being an employee, staff or consultant regularly receiving monthly salary from the Company, its subsidiaries, affiliates, relevant companies or major shareholders. 3. Being a director with no direct or indirect benefits or interests either in finance or in the management of the Company, its subsidiaries, affiliates, relevant companies or its major shareholders including not having benefits or interests in such a manner 1 year before being appointed unless the Board of Directors has thoroughly considered that such interest or benefit in the past will not affect his performance and opinion as an independent director. 4. Being a director who is neither related nor a closed relative to the Company’s executives or major shareholders. 5. Being a director not appointed as representative to maintain interests of the Company’s directors or major shareholders or shareholders relating to the Company’s major shareholders. 6. Able to perform duties, express opinions or report operating results based on duties entrusted by the Board of Directors independently without being subject to the control of the Company’s executives or major shareholders including those relating thereto.

N o m i n a t i o n o f D i r e c t o r s a n d S e n i o r E x e c u t i v e s The Corporate Governance and Nomination Committee consisting of 4 directors will nominate new directors who shall replace those retiring on rotation or otherwise based on the following procedures: 1. The Board of Directors’ entire structure and components will be reviewed to strengthen its position. 2. General and specific qualifications of independent directors will be determined or new qualifications in line with the Company’s requirements and the Stock Exchange of Thailand’s terms and conditions will be added. The Corporate Governance and Nomination Committee will propose its nomination to the Board of Directors, which will submit it to the Annual General Shareholders’ Meeting for approval and appointment.

To nominate an executive, the Corporate Governance and Nomination Committee will draft a succession plan that covers the Chief Executive Officer and senior executives so that the Company has an access to executives with proper expertise and experiences to succeed in important positions.

A n n u a l R e p o r t 2 0 0 5 43 B o a r d o f D i r e c t o r s a n d M a n a g e m e n t

% Work experience in the last five years Name/Position Age Education Share held Period Position Organization

1. Mr. Krirk-Krai Jirapaet 61 M.Econ, Sydney University, 0.00 2005-Present Chairman of the Board Banpu Public Company Limited Chairman Australia of Directors/ Independent Director B.A. (Hons) Political Science, Independent Director Chulalongkorn University Present Director Monetary Policy Committee, Certificate in Economic Bank of Thailand Developments, Japan Chief Negotiator EFTA FTA Negotiations Certificate in Project Appraisal, Thailand (EFTA : European Free Trade Oxford University, U.K. Association) National Defense College (37) Executive Director International Institute for Trade and Role of Chairman (RCP) Development (Public Organization) #11/2005, Thai Institute of Member of the University of the Thai Chamber Directors Association (IOD) Nomination Committee of Commerce Director Certification Program 2003-2005 Vice Minister Ministry of Tourism and Sports (DCP) #61/2005, Thai Institute 2001-2003 Advisor to the Prime Office of the Prime Minister of Directors Association (IOD) Minister Audit Committee Program 2000-2001 Permanent Secretary of Office of the Prime Minister #8/2005, Thai Institute of the Ministry of Directors Association (IOD) Commerce

2. Mr. Soonthorn 67 Mattayomsuksa 0.73 1983-Present Vice Chairman Banpu Public Company Limited Vongkusolkit Chairman Program #7/2002, 2004-Present Member of the Corporate Banpu Public Company Limited Vice Chairman Thai Institute of Directors Governance and Corporate Governance Association (IOD) Nomination Committee and Nomination Director Accreditation Program 2002-Present Chairman United Standard Terminal Committee (DAP) #19/2004, Thai Institute Public Company Limited * An older brother of persons of Directors Association (IOD) 1983-Present Director TME Capital Co., Ltd. number 4 and 10 Modern Managers Program 1981-Present Director City Holding Co., Ltd. (MMP), Chulalongkorn 1974-Present Chairman Mitr Phol Group University

44 B a n p u P u b l i c C o m p a n y L i m i t e d % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

3. Mr. Manas Leeviraphan 72 M.A. Public Finance, University 0.19 1994-Present Independent Director/ Banpu Public Company Limited Independent Director of California, Berkeley, U.S.A. Chairman of the Chairman of the Audit B.Com. Honours in Economics, Audit Committee Committee McGill University, Canada Chairman Sarin Property Company Limited National Defense College Independent Director/ Bangkok Airport Fuel Service (Class 19) Chairman of the Public Company Limited Chairman Program #3/2001, Audit Committee Thai Institute of Directors Independent Director/ United Communication Industry Association (IOD) Chairman of the Public Company Limited Director Accreditation Program Audit Committee (DAP) #19/2004, Thai Institute Chairman Siam Samsung Life Insurance of Directors Association (IOD) Co., Ltd. 1999-2005 Chairman, State Auditor Ministry of Foreign Affairs Committee 2000-2005 Chairman Saha Patana Inter-Holding Public Company Limited

4. Mr. Vitoon Wongkusolkit 64 B.Sc. (Pharmacology), 1.60 1983-Present Director Banpu Public Company Limited Director Chulalongkorn University 2001-Present Member of the Banpu Public Company Limited Member of the Director Certification Program Compensation Compensation (DCP) #17/2002, Thai Institute Committee Committee of Directors Association (IOD) 2004-Present Chairman of the The Erawan Group Director with Senior Executive Program 6, Financial and Risk Authority to Sign on Sasin Graduate Institute of Management Behalf of the Company Business Administration of 1998-Present Chairman United Securities Public Company * A younger brother of Chulalongkorn University Limited person number 2 Chairman 2000 #11/2005, 1989-Present Director Erawan Ploenchit Co., Ltd. * An older brother of Thai Institute of Directors 1987- Present Director Mitr Phol Group person number 10 Association (IOD) Director Erawan Hotel Public Company Limited 1977- Present Director United Standard Terminal Public Company Limited 1983-Present Chairman IAG Insurance (Thailand) Co., Ltd. (Royal and Sun Alliance Insurance (Thailand) Limited) 2001-2004 Member of the Banpu Public Company Limited Nomination Committee 1987-2004 Managing Director Amarin Plaza Public Company Limited

A n n u a l R e p o r t 2 0 0 5 45 % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

5. Mr. Sawatdiparp 66 B.A. (Economics), 0.35 1983-Present Director Banpu Public Company Limited Kantatham Hanover College, Indiana, 2001-Present Member of the Banpu Public Company Limited Director U.S.A. Corporate Governance Member of the Program on Investment and Nomination Corporate Governance Appraisal and Management, Committee and Nomination Harvard University Graduate 2001-2004 Member of the Banpu Public Company Limited Committee School of Business Compensation Administration, Massachusetts, Committee U.S.A. 1998-2003 Member of the ESOP Banpu Public Company Limited National Defense College Allocation Committee (Class 35) 2000-Present Senator The Senate Director Certification Program 1998-1999 Budget Director The Bureau of the Budget, Office of (DCP) #31/2003, Thai Institute (Executive, Level 11) the Prime Minister of Directors Association (IOD)

6. Mr. Montri Mongkolswat 62 B.A. (Commerce), - 1999-Present Independent Director/ Banpu Public Company Limited Independent Director Thammasat University Member of the Audit Member of the Audit B.A. (Accountancy), Committee Committee Thammasat University 2002-Present Member of the Banpu Public Company Limited Member of the National Defense College Compensation Compensation (Class 355) Committee Committee Certified Public Accountant, 2004-2005 Member of the Corporate Banpu Public Company Limited Thailand Registration No. 2004, Governance and The Institute of Certified Nomination Committee Accountants and Auditors 2003-2004 Chairman of the Banpu Public Company Limited of Thailand Compensation Chairman Program #3/2001, Committee Thai Institute of Directors Present Director/Member of The Aromatics (Thailand) Association (IOD) the Audit Committee Public Company Limited Director/Member of The Deves Insurance the Nomination Public Company Limited Committee and Compensation Committee/Advisor to the Executive Committee Director Erawan Hotel Public Company Limited Director The Syndicate of Thai Hotel & Tourists Enterprises Limited Chairman Saensuratana Company Limited

46 B a n p u P u b l i c C o m p a n y L i m i t e d % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

7. Mr. Kopr Kritayakirana 66 B.Sc. (Physics), - 2003-Present Independent Director Banpu Public Company Limited Independent Director Chulalongkorn University 2004-Present Chairman of the Banpu Public Company Limited Chairman of the Ph.D. (Physics), Corporate Governance Corporate Governance Harvard University, U.S.A. and Nomination and Nomination Director Certification Program Committee Committee (DCP) #11/2001, Thai Institute 2003-Present Director Thai Institute of Directors of Directors Association (IOD) Association (IOD) Present Director Thai Reinsurance Public Company Limited Director Siam Panich Leasing Public Company Limited Director Sicco Securities Public Company Limited Member, Council Chulalongkorn University of Chulalongkorn University Member, Council National Institute of Development of NIDA Administration (NIDA) Member, Council Thailand Development Research of TDRI Institute (TDRI)

8. Mr. Rutt Phanijphand 59 M.S. in Business Ad., - 2005-Present Independent Director/ Banpu Public Company Limited Independent Director Fort Hays Kansas State Chairman of the Chairman of the College, Hays, Kansas, U.S.A. Compensation Compensation B.S., Kasetsart University Committee Committee National Defense College 2000-2003 Advisor Banpu Public Company Limited (Class 388) 2005-Present Chairman of Executive Land and Houses Retail Bank Directors Public Company Limited 2001-Present Chief Executive Quality Houses Public Officer Company Limited Director Home Products Centre Public Company Limited Present Chairman of the Kasetsart University University’s Activity Promotion 2005 Director Dhipaya Insurance Public Company Limited 2003-2005 Executive Director Krung Thai Bank Public Company Limited 2003-2004 Member of the Audit Krung Thai Bank Public Committee Company Limited 2000-2005 Chairman United Advisory Service Company Limited

A n n u a l R e p o r t 2 0 0 5 47 % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

9. Mr. Somkiat Chareonkul 64 Bachelor of Commerce, - 2005-Present Independent Director, Banpu Public Company Limited Independent Director Thammasat University Member of the Audit Member of the Audit Bachelor of Law, Sukhothai Committee, Member of Committee Thammathirat University the Corporate Member of the Corporate Certificate in “Strategic Alliance Governance and Governance and Seminar”, The Wharton School, Nomination Committee Nomination Committee University of Pennsylvania, U.S.A. Present Tax Advisor Poon Perm Karn Sura Certificate in “Selected Problems Company Limited of Tax Auditing and Investigation”, (Chang Brewery Group Companies) Germany and Singapore Independent Director/ Trang Seafood Products Certificate in “Seminar on Member of the Audit Public Company Limited Taxation (Indirect Tax Course)”, Committee JICA (Japan International Special Lecturer Cooperation Agency), Japan on Tax Revenue Certificate of Training 2003-Present Director Muang Kij Company Limited “The Management Program” 2004-Present Director Chanthaburi Resort and Spa Sasin Graduate Institute of Company Limited Business Administration, 1999-2001 Deputy Director-General Revenue Department, Chulalongkorn University Ministry of Finance Certificate of Training “Senior Executive, Class 30” Civil Service Training Institute, Civil Service Commission Director Accreditation Program, Class 21, Thai Institute of Directors Association (IOD) Audit Committee Program, Class 1, Thai Institute of Directors Association (IOD)

48 B a n p u P u b l i c C o m p a n y L i m i t e d % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

10. Mr. Chanin Vongkusolkit 53 Honorary Ph.D. in Economics, 0.74 1983-Present Director/Chief Banpu Public Company Limited Director Chiang Mai University Executive Officer Chief Executive Officer M.B.A. (Finance), St. Louis 2004-Present Director The Erawan Group Public Company Director with University, Missouri, U.S.A. Limited Authority to Sign on B.Economics, Director Federation of Thai Capital Market Behalf of the Company Thammasat University Organizations *A younger brother of Director Certification Program 2003-Present Director Ratchaburi Electricity Generating persons number 2 and 4 (DCP) #20/2002, Thai Institute Holding Public Company Limited of Directors Association (IOD) 1997-Present Director Listed Companies Association 1983-Present Director Mitr Phol Sugar Corp., Ltd.

11. Mr. Metee Auapinyakul 52 B.SC. (Management), St. Louis 0.24 1983-Present Director/Executive Banpu Public Company Limited Director University, Missouri, U.S.A. Officer Executive Officer Infrastructure for the Market 2000-Present Director Banpu Minerals (Singapore) Director with Economy, Harvard University Pte. Ltd. Authority to Sign on John F. Kennedy School of 2005-Present Committee for The Board of Investment Behalf of the Company Government, Boston, U.S.A. Project Consideration * An older brother of person National Defense College 2004-Present Advisor GENCO Public Company Limited number 12 (Class 377) 2003-Present National Science Ministry of Science and Technology National Defense College and Technology College of Management, Development Mahidol University Board Committee (Mini MMM Class 1) 2001-Present Sub-Committee for National Safety of Thailand Director Certification Program Public Relations (DCP) #61/2005, Thai Institute Specialist, House of Representatives of Directors Association (IOD) Energy Committee 1988-Present Director Promsin Company Limited 2004-2005 Committee for Project The Board of Investment Consideration 2003-2005 Advisor The Board of Investment 2003-2004 Chairman, Customer Thai Airways International Services Quality Public Company Limited Assurance Committee Member of the Customer Thai Airways International Services Quality Public Company Limited Assurance Committee 2002-2004 Advisor Academic Committee, National Defense College 1984-2005 Director Royal and Sun Alliance Insurance (Thailand) Limited

A n n u a l R e p o r t 2 0 0 5 49 % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

12. Mr. Ongart Auapinyakul 49 B.S. (Mechanical Engineering), 0.34 1983-Present Director/ Banpu Public Company Limited Director University of Missouri, Executive Officer Executive Officer Columbia, U.S.A. 1996-Present Director Banpu Minerals (Singapore) Pte. Ltd. Director with Authority Senior Executive Program 3, 1990-Present Director Banpu Singapore Pte. Ltd. to Sign on Behalf of Sasin Graduate Institute Present Director Ban-Sa Mining Company Limited the Company of Business Administration of Director Chiang Muan Mining * An younger brother of Chulalongkorn University Company Limited person number 11 National Defense College Director Universal Exploration (Class 4414) Company Limited Director Certification Program Director Banpu China Pte. Ltd. (DCP) #23/2002, Thai Institute 2003-Present Director Asian American Coal Inc. of Directors Association (IOD) 2000-Present Director Shanxi Asian American-Daning Energy Co., Ltd.

13. Mr. Rawi Corsiri 55 M.B.A., Sasin Graduate Institute 0.15 2001-Present Chief Operating Officer Banpu Public Company Limited Chief Operating of Business Administration of Director/Managing Banpu Minerals Company Limited Officer Chulalongkorn University Director B.Sc., Chulalongkorn University Director Banpu Singapore Pte. Ltd. Director Certification Program Director Banpu Power Limited (DCP) #32/2003, Thai Institute Director Banpu Coal Power Limited of Directors Association (IOD) Director Banpu China Pte. Ltd. Director Banpu Power International Limited Director BLCP Power Limited Director Banpu International Limited Director Edifice Engineering Company Limited Director Silamani Corp., Ltd. Director Silamani Marble Company Limited

50 B a n p u P u b l i c C o m p a n y L i m i t e d % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

14. Mr. Prachuab Trinikorn 60 M.B.A. (Controllership), 0.07 1990-2005 Group Senior Vice Banpu Public Company Limited Group Senior St. John’s University, President - Corporate Vice President - New York, U.S.A. Services Corporate Services B.A. (Economics), Present Director Banpu Minerals Company Limited Fordham University, New York, Director Banpu Singapore Pte. Ltd. U.S.A. Director Banpu International Limited Director Banpu Minerals (Singapore) Pte. Ltd. Director Ban-Sa Mining Company Limited Director Chiang Muan Mining Company Limited Director Promsin Company Limited Director Silamani Corp., Ltd. Director Silamani Marble Company Limited Director Universal Exploration Company Limited

15. Mr. Chanchai Jivacate 59 Master Degree in Engineering, 0.03 2001-Present Group Senior Vice Banpu Public Company Limited Group Senior Mechanical, Lamar University, President - Business Vice President - Texas, U.S.A. Development Business Development B.Engineering (Mechanical), Director Banpu China Pte. Ltd. Chulalongkorn University Director Banpu Power International Limited Director Certification Program Director Banpu Power Limited (DCP) # 22/2002, Thai Institute Director Banpu Coal Power Limited of Directors Association (IOD) Director BLCP Power Limited 2002-Present Director The Aromatics (Thailand) Public Company Limited

16. Ms. Somruedee 44 B.Sc. (Accounting), 0.08 2001-Present Senior Vice Banpu Public Company Limited Chaimongkol Bangkok University President - Finance Senior Vice President - Program for Global Leadership, Present Director Banpu Singapore Pte. Ltd. Finance Harvard University Graduate Director Banpu Minerals Company Limited School of Business Director Banpu International Limited Administration, Boston, U.S.A. Director Edifice Engineering Company Limited Director Silamani Corp., Ltd. Director Silamani Marble Company Limited Director Banpu China Pte. Ltd.

A n n u a l R e p o r t 2 0 0 5 51 % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

Mr. Chira Panupong 74 M.Sc. (Economics) London, 0.25 2001-2005 Chairman of the Board Banpu Public Company Limited Chairman School of Economics and of Directors Advisory Chairman Political Science University 1997-2005 Chairman BLCP Power Limited to the Management of London, U.K. Director Banpu Coal Power Limited Committee B.Com. (Accountancy), Hons: Director Banpu Power Limited University of Leeds, U.K. 1997-2005 Director Banpu Gas Power Limited B.Law, Thammasat University 1992-Present Vice Chairman TUNTEX (Thailand) Industrial Project Evaluation Public Company Limited Course, Economic Development Institute, IBRD. National Defense College (Class 20) Chairman Program #7/2002, Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP) #2/2003, Thai Institute of Directors Association (IOD)

Note : Mr. Chira Panupong, Chairman of the Board of Directors and Advisory Chairman to the Management Committee, retired on 27 April 2005.

52 B a n p u P u b l i c C o m p a n y L i m i t e d % Work experience in the last five years Name/Position Age Education Share held Period Position Organization

Mr. Somdee Chareonkul* 74 M.P.A. (Public Administration), 0.05 1992-2005 Director/Advisor Banpu Public Company Limited Director University of Pittsburgh, U.S.A. 2001-2005 Member of the Banpu Public Company Limited Member of M.S., University of Southern Compensation the Compensation California, U.S.A. Committee Committee B.Com. & B.Acct., Thammasat 2001-2004 Member of the Banpu Public Company Limited Director with University Nomination Committee Authority to Sign on National Defense College 1998-2003 Chairman of the ESOP Banpu Public Company Limited Behalf of the Company (Class 23) Allocation Committee Director Accreditation Program 1997-Present Director Thai Charoen Insurance (DAP) #4/2003, Thai Institute Public Company Limited of Directors Association (IOD) Extra Director National Research Council (Political Activities Science and Public Administration) Civil Service Ministry of Science and Technology Sub-Commissioner (Expert on Personnel) Advisor Committee on Natural Resources and Environment, House of Representatives Senior Volunteer Office of the National Economic and Social Development Board Alumni Think Thank National Defense College

Ms. Sukon Kanchanalai** 73 Advanced Study Graduate 0.04 1997-2005 Independent Director Banpu Public Company Limited Independent Director School of Accounting, Wharton 2004-2005 Chairman of the Banpu Public Company Limited Member of the Audit School of Finance, University of Compensation Committee Pennsylvania, Philadelphia, U.S.A. Committee Chairman of the B.Accounting, 2003-2004 Member of the Banpu Public Company Limited Compensation Chulalongkorn University Compensation Committee Certificate in Export Promotion Committee/Chairman and International Marketing, of the Nomination The International Trade Center Committee UNCTAD/GATT, Geneva 2002-2003 Chairman of Banpu Public Company Limited Certificate in Organization and the Compensation Management Methods, University Committee of Southern California, U.S.A. 2001-2003 Member of the Banpu Public Company Limited National Defense College Nomination Committee (Class 27) 1999-2005 Member of the Banpu Public Company Limited Director Certification Program Audit Committee (DCP) #23/2002, Thai Institute 1991-Present Law Councilor Office of the Council of State of Directors Association (IOD)

Notes: *Mr. Somdee Charoenkul, Director, Member of the Compensation Committee, Advisor, and Director with Authority to Sign on Behalf of the Company, resigned on 27 April 2005. ** Ms. Sukon Kanchanalai, Independent Director, Member of the Audit Committee and Chairman of the Compensation Committee, resigned on 27 April 2005.

A n n u a l R e p o r t 2 0 0 5 53 S h a r e h o l d i n g s o f t h e B o a r d o f D i r e c t o r s a n d M a n a g e m e n t

For shareholdings of the Board of Directors and executives, directors will report their shareholding status of Banpu Public Company Limited’s securities as well as those of their spouses and children not yet reaching maturity to the Board of Directors in its subsequent meeting after the director has been elected into his directorship. Subsequently, should any director including his spouse and any non-maturity child be involved in a transaction of Banpu Public Company Limited’s securities, the director must report such transaction to a subsequent meeting of the Board of Directors every time. The shareholding status of the Board of Directors and executives as of 31 December 2005 is as follow.

Ordinary Share (Units)

Name 31 December 31 December + / (-) 2005 2004

1. Mr. Krirk-Krai Jirapaet 11,000 -11,000 2. Mr. Soonthorn Vongkusolkit 1,973,296 2,453,296 (480,000) 3. Mr. Manas Leeviraphan 529,354 - 529,354 4. Mr. Montri Mongkolsawat - -- 5. Mr. Sawatdiparp Kantatham 940,255 880,255 60,000 6. Mr. Vitoon Wongkusolkit 4,350,911 4,350,911 - 7. Mr. Kopr Kritayakirana - -- 8. Mr. Somkiat Chareonkul - -- 9. Mr. Rutt Phanijphand - -- 10. Mr. Metee Auapinyakul 660,699 540,499 120,200 11.Mr. Chanin Vongkusolkit 2,000,371 1,980,371 20,000 12. Mr. Ongart Auapinyakul 930,000 959,996 (29,996) 13. Mr. Rawi Corsiri 414,669 414,669 - 14. Mr. Prachuab Trinikorn 181,399 180,599 800 15. Mr. Chanchai Jivacate 70,000 70,000 - 16. Ms. Somruedee Chaimongkol 212,628 212,628 -

Note: From report of securities held by the Company’s directors as of 16 December 2005.

54 B a n p u P u b l i c C o m p a n y L i m i t e d R e m u n e r a t i o n o f t h e B o a r d o f D i r e c t o r s a n d M a n a g e m e n t

1 . R e m u n e r a t i o n i n C a s h f o r t h e Y e a r E n d i n g 3 1 D e c e m b e r 2 0 0 5 1.1 Remuneration in cash for Board members in the forms of meeting allowance and gratuity was THB 26.26 million, which details are as follows.

Meeting Allowance (THB/year) Total Corporate Compensa- Gratuity Remunera- Name/Position Audit Governance Director and tion (THB/year) tion Committee Nomination Committee (THB/year) Committee

1. Mr. Krirk-Krai Jirapaet 450,000.00 ----450,000.00 Chairman/Independent Director 2. Mr. Soonthorn Vongkusolkit 528,000.00 - 160,000.00 - 1,623,380.00 2,311,380.00 Vice Chairman/Member of the Corporate Governance and Nomination Committee 3. Mr. Manas Leeviraphan 480,000.00 300,000.00 - - 1,475,800.00 2,255,800.00 Independent Director/ Chairman of the Audit Committee 4. Mr. Montri Mongkolswat 520,000.00 240,000.00 - - 1,475,800.00 2,235,800.00 Independent Director/ Member of the Audit Committee/Member of the Compensation Committee 5. Mr. Sawatdiparp Kantatham 520,000.00 - 160,000.00 - 1,475,800.00 2,155,800.00 Director/Member of the Corporate Governance and Nomination Committee 6. Mr. Vitoon Wongkusolkit 520,000.00 - - 140,000.00 1,475,800.00 2,135,800.00 Director/Member of the Compensation Committee 7. Mr. Kopr Kritayakirana 520,000.00 - 200,000.00 - 1,475,800.00 2,195,800.00 Independent Director/ Chairman of the Corporate Governance and Nomination Committee 8. Mr. Somkiat Chareonkul 360,000.00 150,000.00 120,000.00 - - 630,000.00 Independent Director/ Member of the Audit Committee/Member of the Corporate Governance and Nomination Committee

A n n u a l R e p o r t 2 0 0 5 55 Meeting Allowance (THB/year) Total Corporate Gratuity Remunera- Governance Compensa- Name/Position Audit Director and tion (THB/year) tion Committee Nomination Committee (THB/year) Committee

9. Mr. Rutt Phanijphand 360,000.00 - - 75,000.00 - 435,000.00 Independent Director/ Chairman of the Compensation Committee 10. Mr. Metee Auapinyakul 520,000.00 - - - 1,475,800.00 1,995,800.00 Director 11.Mr. Chanin Vongkusolkit 480,000.00 - - - 1,475,800.00 1,955,800.00 Director 12. Mr. Ongart Auapinyakul 440,000.00 - - - 1,475,800.00 1,915,800.00 Director

Notes: Mr. Chira Panupong, Chairman of the Board of Directors/Advisory Chairman to the Management Committee, whose term was due on retirement on 27 April 2005, received a total remuneration of THB 2,044,750. Mr. Somdee Chareonkul, Director/Member of the Compensation Committee, whose term was due on retirement on 27 April 2005, received a total remuneration of THB 1,715,800. Ms. Sukon Kanchanalai, Independent Director/Member of the Audit Committee/Chairman of the Compensation Committee, whose term was due on retirement on 27 April 2005, received a total remuneration of THB 1,825,800.

1.2 Remuneration in cash for the Company’s executives in the forms of salary and bonus

Number of Number of Total remunerations executives 2005 executives 2004

Total salaries (THB) 5 33,026,458.00 5 31,050,240.00 Total bonuses (THB) 5 15,952,037.00 5 9,190,095.00 Total 48,978,495.00 40,240,335.00

Note: There were five executives namely, Mr. Chanin Vongkusolkit, Mr. Rawi Corsiri, Mr. Prachuab Trinikorn, Mr. Chanchai Jivacate and Ms. Somruedee Chaimongkol.

2 . O t h e r R e m u n e r a t i o n s 2.1 Contributions to the Provident Fund In 2005, the Company paid the following contributions to its executives.

Number of Number of Total remunerations 2005 2004 executives executives

Contributions to the Provident Fund (THB) 4 1,382,314.00 5 1,228,772.30

Note: There were four executives namely, Mr. Chanin Vongkusolkit, Mr. Rawi Corsiri, Mr. Prachuab Trinikorn, and Ms. Somruedee Chaimongkol.

56 B a n p u P u b l i c C o m p a n y L i m i t e d C o r p o r a t e G o v e r n a n c e a n d S u p e r v i s i o n o n t h e U s e o f I n t e r n a l I n f o r m a t i o n

C o r p o r a t e G o v e r n a n c e 1. Corporate Governance Policy The Board of Directors pays a lot of attention to corporate governance where it has entrusted the Corporate Governance and Nomination Committee to update the Company’s corporate governance policy and its Code of Conduct that respond to changes, time and remain up-to-date with international practice in a bid to upgrade its corporate governance procedures. The update of both its corporate governance policy and the Code of Conduct has completed since June 2005. The Corporate Governance and Nomination Committee is currently translating the corporate governance policy and the Code of Conduct into English and Indonesia’s Bahasa, which is expected to complete in early 2006. The translation will be implemented both in Thailand and overseas where Banpu has operations. The updated corporate governance policy and the Code of Conduct are based on the first corporate governance policy and the Code of Conduct written in 2002, which featured 15 corporate governance principles set by the Stock Exchange of Thailand (SET). They include qualifications of directors, Board of Directors’ structure and its duties, rights and equality of shareholders, stakeholders’ policy, information disclosure and transparency, internal control and risk management, conflict of interest and business ethics. The newly-amended corporate governance policy has clarified the following topics: vision & mission, credo & values, corporate governance principles and policy, structure and components of the Board of Directors and operation of the Board of Directors. The update of the Code of Conduct meanwhile involves the following sections: principles of business operation, conflict of interest and how to keep confidential information, accountabilities to the company and its assets, how to treat stakeholders and report of behavior qualified as code of conduct violation. The Corporate Governance and Nomination Committee also re-groups stakeholders in the Company’s grievance system into 3 new groups Ð customers, shareholders and investors and staff. In 2005, Thai Institute of Directors Association (IOD) together with the SET announced the result of a survey on corporate governance among listed companies in 2005 where Banpu was rated outstanding as one of the top ten firms in the first quartile.

2. Shareholders: Rights and Equality Treatment By stating it clearly in Banpu’s corporate governance policy, the Board of Directors indicates that they do also give a priority to the rights and equality of shareholders. Banpu’s shareholders equally enjoy their basic rights; namely, the rights to receive share certificate and transfer shares and the right to access adequate and complete information in a timely manner for decision-making purpose. In addition, the Board of Directors also insists that shareholders have a right to attend and vote at a shareholders’ meeting to amend the Company’s major policies and that they are entitled to elect and remove directors, approve the auditor’s appointment and share the profits. The Board of Directors also facilitates shareholders attending the shareholders’ meeting by sending adequate information in time for the meeting, urging shareholders to attend the meeting and exercise their rights or appointing a person or any independent director to vote on his behalf as a proxy if one can’t attend the meeting. In addition, shareholders are allowed to express viewpoints, request explanation or ask question equally.

A n n u a l R e p o r t 2 0 0 5 57 3. Rights of all Stakeholders Banpu is eager to support a collaboration between itself, all stakeholders and other relevant parties such as staff, customers, suppliers, creditors, government agencies, Banpu’s surrounding communities and the society in general. The Company strives to ensure all stakeholders that their rights will be protected and they will be well treated. That’s one reason why Banpu opts to review the practices of directors, executives and staff in its Code of Conduct in the following major topics: conflict of interest, responsibility to shareholders and staff policy and how to treat staff, customers, suppliers, creditors, business competitors and the society in general. Directors, executives and staff are to learn, understand and strictly comply with these practice guidelines. In addition, Banpu also requires that the Company’s operation information be reported to stakeholders and other parties in an annual report and its website. In addition, a two-way communication channel must be provided to stakeholders and relevant parties to voice their opinions and file grievance in case they are unfairly treated by the Company. So far, Banpu has re-grouped stakeholders under the Company’s grievance system into three groups Ð customers, shareholders and investors and staff, respectively. The Board of Directors also promotes better relations between itself and related stakeholders. Since Banpu realizes that staff is the Company’s main factor leading to success and achievement, it clearly states in the policy that staff be fairly treated in terms of job opportunity, remunerations, appointment, transfer and self-development. Banpu pays a lot of attention to enhance staff’s knowledge and capability where opportunity is regularly provided. In addition, Banpu makes sure that its staff receive a fair compensation in terms of salary, welfare and other forms of remunerations that are closely linked with attempts to increase value for our shareholders in the long run, such as payment of variable bonus based on the Company’s performance to top executives. In terms of customers, since customer’s satisfaction is crucial to the Company’s business success, Banpu intends to find ways and means to effectively respond to customer’s needs where it seriously commits to do whatever it has promised to customers. Plans are drafted and responsible persons are entrusted for compliance control, delivering products with quality and price previously agreed and offering advice on how to use the product effectively. In case the product can’t be delivered, Banpu will discuss with customers to find the best solution possible to reduce potential impact. Regarding suppliers and/or creditors, Banpu has a policy to treat them equally and fairly by taking into consideration its maximum benefit and on the basis that both parties receive fair returns. Banpu will do everything to avoid a situation that may lead to a conflict of interest and to comply with the agreement, give accurate and factual information and report as well as negotiate and find solutions based on business relations. In this regard, plans and responsible persons are drafted and entrusted to ensure compliance control. Besides, a report system is in place to re-examine if there is any compliance. With regard to business competitors, Banpu has a policy to treat them according to international principles under the legal framework of trade competition practices where no secret is violated or become known by fraud. Banpu commits in doing business fairly based mainly on the practices written in the Code of Conduct. In the past year, Banpu had no dispute with business competitors.

58 B a n p u P u b l i c C o m p a n y L i m i t e d Regarding communities and the society, Banpu has a policy to operate a business proven to be a boon to the economy and the society. One of its priorities is to preserve local customs in areas where Banpu has operations. In addition, Banpu also has a policy to become a good corporate citizen, to comply with all rules and regulations and to commit to improve the society’s quality of life. It just adds a policy on quality, safety and environment (QSE) where it will do business based on safety, good occupational health and healthy environment. To support these policies, Banpu has long returned part of its profits to support various social activities. It sets aside a budget to implement this policy. It also actively creates a social responsibility awareness among staff so that Banpu remains a good corporate citizen for the society in the years to come. In 2005, Banpu continued to pursue social projects in local and international levels. This included social projects in countries where it has operations especially in the Republic of Indonesia. Several new projects were initiated. For example, in education, Banpu provides ICT support to schools in rural areas and train teachers and students in ICT and other skills. In the “Lab School” project, Banpu donated money to six schools in the North and organized a workshop on “Utilization of ICT Knowledge Management”. It supported the development of doctorate students in Economics where Banpu donated money to the Faculty of Economics, Chiang Mai University. Regarding the environment, aside from granting an environmental management research fund to the National Research Center on Environmental Management and Hazardous Substance, Chulalongkorn University, Banpu also collaborated with the Thai Environmental Institute (TEI) to develop the www.thaienvi.net website as Thailand’s first comprehensive online environmental-related website for students and teachers. Banpu starts to realize that by giving children a right understanding about the environment, this will help them understand environmental problems and how to conserve and take care of it for a long-term sustainable environment conservation. In 2005, Banpu and the TEI organized 2 environmental camps; namely, the “Visiting Neighbor, Visiting Elephant Home” Camp at the Kaeng-Krachan National Park, Phetchaburi Province, and the “Visting Crab House, Fish Bank and Observing Mangrove Forest” Camp at Thung Maha Bay, Patiew District, Chumphon Province to create an awareness of environmental conservation in their locality. Banpu also helped the Department of Local Administration, the Ministry of Interior, to set up the “District Intelligence Information Center” where ICT will be introduced to improve a quality of information service at 50 district and sub-district offices in 3 northern provinces. In the Republic of Indonesia, Banpu also commits to the social development cause by urging local participation, providing assistance and supporting activities proven beneficial to the communities in general. Community development projects refer to activities relating to public utilities, education, religion, public health, economy and culture.

A n n u a l R e p o r t 2 0 0 5 59 4. Shareholders’ Meeting In 2005, the Company held one Annual General Meeting and one Extraordinary Meeting at the head office. The Board of Directors has a policy to urge shareholders to participate in a decision-making process and make sure that they receive complete and adequate information in a timely fashion to make such decision. The Company sends out invitation letters and supporting information to shareholders seven business days prior to the meeting date. Each agenda includes the Board of Directors’ opinion. Twelve directors including Chairman of the Audit Committee, Chairman of the Corporate Governance and Nomination Committee and Chairman of the Compensation Committee attend the meeting. Chairman of the Meeting allows all shareholders to inquire about the Company’s operations and appoint a proxy to exercise their votes. He also supports shareholders to express opinions and provides them an opportunity to seek explanations regarding the Company’s operations. In addition, the Board of Directors also prepares a minute of the meeting ready for posting in the Company’s website within 14 days from the meeting date for shareholders to check without having to wait until the next meeting.

5. Leadership and Vision Banpu has a clear vision to become a leading energy company in the Asian region and to be recognized as a company with continued investment and development activities, as a fair supplier and as a professional who offers excellent products and services. The goal is to develop a coal business and become a leader in Asia. Banpu focuses its investment in energy-related business and at the same time helps develop the society by being a good entrepreneur who emphasizes in work safety, environmental conservation and quality products and services with reasonable prices. To ensure that Banpu’s operation benefits shareholders to the highest, the Board of Directors makes sure that Banpu formulates its vision, mission, goal, policy, operation direction, long-term strategic plan, operation plan and annual budget. In this regard, executives are entrusted to propose them and the Board of Directors is expected to express its opinions before discussing the subject with the management for mutual approval and permission. The Board of Directors has already appointed the Chief Executive Officer (CEO) to be responsible for developing and implementing the strategies while reviewing roles, duties and responsibilities of the Board of Directors, the Sub-Committee and the executives. In the past year, executives led by their Chief Executive Officer proposed a long-term strategic plan (2005-2008) consisting of goals, strategies, modus operandi to achieve the goals, operation plan and annual budget to the Board of Directors, which expressed its opinions and duly approved it.

60 B a n p u P u b l i c C o m p a n y L i m i t e d 6. Conflict of Interest At Banpu, it is extremely important to prevent directors, executives and staff from using their status to seek personal interests. As a result, directors, executives and staff alike must refrain from doing any connected transaction that may lead to a conflict of interest with the Company. If necessary to do so for the sake of the Company, the Board of Directors requires that they comply with the rules of the Stock Exchange of Thailand (SET) where transaction shall be made at a price and under conditions as if it is done with the third party and a director or staff with interest must not be involved whatsoever in an approval process. In addition, the Board of Directors also prohibits directors, executives or staff from using an opportunity or information acquired while working in their positions to seek personal interest or to do a competing or related business with the Company. This includes a ban from using insider information to buy or sell the Company’s shares for staff’s interest or from giving insider information to other persons to buy or sell the Company’s shares. If executive or staff is involved in an operation of which information has not yet been released to the public and the negotiation is ongoing where information must be kept confidential to avoid any effect to the movement of the Company’s share price, such executive or staff is to sign a confidentiality agreement with the Company until the information is disclosed to the SET and the Securities and Exchange Commission (SEC).

7. Business Ethics To profit shareholders the most, the Board of Directors treats the achievement and the modus operandi that leads to such achievement equally. That’s why the Board of Directors sets corporate goals and how to reach the goals in Banpu’s vision, mission, credo, values, corporate governance principle and policy. In addition, it also clarifies a guideline of practices in its Code of Conduct to facilitate directors, executives and staff of Banpu, who must understand the standards of practices expected by the Company and use this guideline as a manual when performing their duties. Information includes how to treat other colleagues, shareholders, customers, suppliers, business competitors and the society in general. The Company also requires directors, executives and all staff to acknowledge, understand and comply with the policies and the practices stated in the Code of Conduct. Executives of all levels must ensure that their supervisees know, understand and strictly comply with the Code of Conduct. In addition, the Company also holds meetings and periodically hands out PR materials so that staff in Thailand and abroad acknowledge and understand its importance. In this regard, supervisors of all levels are required to be a good model and support their supervisees to comply with the pre-determined practices. As Banpu embarks on a Corporate Shared Values project to come up with good corporate culture that everyone can share aside from the standard of practices stated in the Code of Conduct, in the past year, it organized several activities to promote these shared values to enhance staff understandings here in Thailand and abroad. The importance of Banpu’s 4 share values is as follows:

A n n u a l R e p o r t 2 0 0 5 61 1) Innovation Ð this refers to initiatives, being creative and dare to express for ongoing development. 2) Integrity Ð this refers to being ethical, honest and transparent. 3) Care Ð this refers to openness & candor, affirmation, recognition, respect and warmth & empathy to colleagues and the society in general. 4) Synergy Ð this refers to collaboration, sharing, high spirit, teamwork, and striving for win-win solution. Staff are advised what they should do and what they should not and this is very much in line with the policy guidelines stated in the Code of Conduct where an ultimate goal is for everyone to practice.

8. Balancing of Power by Non-Executive Directors The Board of Directors makes sure that the number of directors is suitable to the size of the Company’s operation. At present, the Board of Directors has 12 members, consisting of 3 executive directors and 9 non-executive directors. Of the entire Board, there are 6 independent directors or 50 per cent of the Board’s members. During the past year, the Corporate Governance and Nomination Committee reviewed the component of the Board especially the proportion of non-executive directors versus independent directors and found the existing ratio of non-executive directors appropriate.

9. Consolidation or Separation of Office To comply with the good corporate governance policy and to create the management balance, the Board of Directors requires Chairman of the Board to be a different person from Chief Executive Officer, resulting in a clear-cut division of roles, power and duties.

10. Remunerations of Directors and Executives The Board of Director assigns the Compensation Committee to review the compensation structure as well as an appropriate compensation rates for the Company’s executives before proposing a guideline on compensation. The policy however is that the remunerations must be competitive to those offered by a business of similar size in the same industry after taking into consideration obligations, duties and responsibilities of each director and executive. This however is subject to the Shareholders’ Meeting approval. Details of the remunerations paid by the Company to its directors and executives in 2005 are in Pages 55-56: Remunerations.

11. The Board of Directors’ Meeting The Board of Directors normally convenes once a month on every last Wednesday of the month. An additional meeting may be held if necessary. There must be a clear meeting agenda both for acknowledgement and for consideration at each meeting. In addition, the meeting’s supporting documents must be completed and adequate for sending to the Board of Directors at least 7 days in advance so that the Board of Directors will have enough time to study the information before attending the meeting. Each meeting will last approximately 3.5 hours. In the meeting, all directors are allowed to voice their opinions openly where Chairman of the Meeting will summarize the opinions and points of discussion at the meeting. In case a director has a material interest in an issue considered by the Board at the moment, he/she must leave the meeting during which the matter is considered.

62 B a n p u P u b l i c C o m p a n y L i m i t e d A minute of meeting is made in writing and, after seconded by the meeting, is certified true and corrected by Chairman of the Board of Directors and Secretary of the Board. Documents to be filed include minutes of meeting, of which the original copy is kept in a document file, a scanned file of the original file to be provided to directors and other relevant parties for easy reference, and an electronic file of the minutes of meeting and its supporting documents. In 2005, the Board of Directors convened 13 times. Records of meeting attendance of each director are as follows.

Meeting Attendance Name Title Term of Office Ordinary Special Total Agenda Agenda

1. Mr. Krirk-Krai Jirapaet Chairman/Independent Director Apr 03 - Apr 06 8 1 9/9 2. Mr. Soonthorn Vongkusolkit Vice Chairman Apr 03 - Apr 06 12 - 12/13 3. Mr. Manas Leeviraphan Independent Director Apr 05 - Apr 08 11 1 12/13 4. Mr. Montri Mongkolswat Independent Director Apr 04 - Apr 07 12 1 13/13 5. Mr. Sawatdiparp Kantatham Director Apr 03 - Apr 06 12 1 13/13 6. Mr. Vitoon Wongkusolkit Director Apr 04 - Apr 07 12 1 13/13 7. Mr. Kopr Kritayakirana Independent Director Apr 04 - Apr 07 12 1 13/13 8. Mr. Somkiat Chareonkul Independent Director Apr 04 - Apr 07 8 1 9/9 9. Mr. Rutt Phanijphand Independent Director Apr 05 - Apr 08 8 1 9/9 10. Mr. Metee Auapinyakul Director Apr 05 - Apr 08 12 1 13/13 11.Mr. Chanin Vongkusolkit Director Apr 03 - Apr 06 12 - 12/13 12. Mr. Ongart Auapinyakul Director Apr 03 - Apr 06 10 1 11/13

Notes: Mr. Krirk-Krai Jirapaet, Mr. Rutt Phanijphand and Mr. Somkiat Chareonkul have been in the office starting on 27 April 2005. Mr. Chira Panupong, Chairman of the Board of Directors, who retired on 27 April 2005, attended four Board of Directors’ Meeting on ordinary agenda. Mr. Somdee Chareonkul, Director, who retired on 27 April 2005, attended four Board of Directors’ Meeting on ordinary agenda. Ms. Sukon Kanjanalai, Independent Director, who retired on 27 April 2005, attended four Board of Directors’ Meeting on ordinary agenda.

A n n u a l R e p o r t 2 0 0 5 63 12. Sub-Committees The Audit Committee The Audit Committee consists of 3 independent directors responsible for reviewing the Company’s financial statements, checking if the internal control system, the risk management system as well as Banpu’s legal compliance is adequate, selecting and appointing the Company’s auditor and proposing his auditing fee, reviewing the Company’s disclosure of information to ensure accuracy and transparency in case there is any connected transaction or transaction with possible conflict of interest, reviewing significant risk management measures and, if deemed appropriate, asking executives to review such measures and providing opinion regarding operation plan, budget, appointment, termination and manpower of the InternalAudit Office In 2005, the Audit Committee convened 8 times, all of which were attended by all members The Corporate Governance and Nomination Committe In 2005, the Nomination Committee consisted of 4 members chaired by an independent director whil all members of the Committee were non-executive directors. The Committee had 2 major responsibilities of firstly, reviewing corporate governance and Code of Conduct policies and practices as well as monitoring th compliance and actual practice within the framework; and, secondly, recruiting and nominating senior executive starting from department director and higher before reporting a result to the Board of Directors for approval o for further submission to the Shareholders’ Meeting, as the case may be In 2005, the Corporate Governance and Nomination Committee convened 8 times, all of which wer attended by all of its members The Compensation Committe The Compensation Committee consists of 4 members chaired by an independent director whil all its members are non-executive directors.The Committee’s duty is to propose a compensation policy, guideline how to pay remunerations and other fringe benefits to directors in the Board of Directors, members of th Sub-Committees, Chief Executive Officer and executives. The Committee’s other duties are to set up a criteria t evaluate the performance of Banpu’s CEO and its executives, review the compensation system and structure o paying directors and the compensation rates paid to directors and executives In 2005, the Compensation Committee convened 7 times, all of which were attended by all members

13. Internal Control and Auditin The Board of Directors establishes an internal control system that covers every aspect starting from finance operation and legal compliance. It also makes sure that enough and efficient checking-and-balancing mechanism are in place to protect shareholders’ money and the Company’s assets. The Audit Department is set up to audi the operation of all business and support units of Banpu to ensure that they meet the existing rules and regulation as well as to assess whether the existing internal control system is efficient and enough. The Board of Director also works to ensure that the Audit Office remains independent and is capable to do the check-and balance task without much worry. Results meanwhile will be periodically reported to the Audit Committee as scheduled

64 B a n p u P u b l i c C o m p a n y L i m i t e d Regarding risk management, in the past year, Banpu hired an external consultant to set up a risk analysis and management system for the entire organization, a continued process from a year before. In addition, the Risk Management Committee at the management level was also set up. Chaired by the CEO, the Committee determines a risk management policy, ensures that risk factors are assessed, drafts a risk management plan and monitors results of the operation. All risks starting from risk relating to vision, strategy, business plan, investment, operation to risk relating to marketing, finance, human resource management, safety, occupational health and environment and legal compliance are covered. The Audit Committee meanwhile reviews and monitors risks after the Risk Management Committee has done so as to create a linkage between risk management and internal control.

14. Report of the Board of Directors The Board of Directors is responsible for the Company’s consolidated financial statements and financial information appeared in the annual report. The financial statements are prepared under the Generally-Accept Accounting Principles (GAAP) in Thailand where an appropriate accounting policy is selected and implemented on a regular basis. The Audit Committee and auditors jointly review the implemented accounting policy to see if it remains practical. During the course of preparing the financial statement, the Board of Directors will insist to the working team to carefully exercise its discretion and to reveal enough important information in notes to the financial statements, if any. In addition, the Board of Directors also entrusts the Audit Committee to monitor the quality of Banpu’s financial statements and its internal control system. The Audit Committee’s opinion in the matter is stated in the Report of the Audit Committee and also published in the annual report. The Board of Directors is of the opinion that the financial statements of both the Company and its subsidiaries as of 31 December 2005 are correct, complete and reliable.

15. Investor Relations The Board of Directors makes sure that both financial and non-financial information relating to the Company’s businesses and performance is revealed in a complete, adequate and regular manner. In addition, the information must reflect the Company’s actual performance and its true financial status as well as its business future while strictly complying with the laws, rules and regulations relating to the information disclosure of both the SEC and the SET. Aside from disclosing information as required by the SET and the SEC, Banpu also provides other communications channels for shareholders and investors, starting from the Investor Relations Unit, which communicates directly with shareholders, investors and securities analysts here and abroad, to the Corporate Communications Department, whose duty is to disseminate corporate information to shareholders, investors and the public through local and international press members and other media. In the past year, the Company organized one local road show and two international road shows, four analyst meetings, 49 company visits by analysts and investors wishing to learn more about Banpu’s operation results, 1 press conference to inform Banpu’s operation results and 3 press tours both locally and internationally. In addition, it produced press releases every time there was an important investment or other business events while regularly updating its website information, providing information and answering investors and media questions by email or by phone.

A n n u a l R e p o r t 2 0 0 5 65 S u p e r v i s i o n o n t h e U s e o f I n t e r n a l I n f o r m a t i o n It is Banpu’s Code of Conduct to reveal accurate and reliable information in a timely fashion to shareholders, investors, securities analysts and the general public including whenever there is change in executives’ shareholding as required by the SEC. All information is strictly reported to the supervisory agency. Regarding the supervision on the use of Banpu’s inside information, Banpu deems that it is the responsibility of directors, executives and staff alike to keep the Company’s secret in strict confidential, especially with regard to information not yet revealed to the public or any data that might affect Banpu’s operations or share price. In case executive or staff is working in a project of which the information is not yet released to the public and the negotiation is ongoing where insider information must be kept in secret as it may affect the movement of the Company’s share price, such executive or staff must sign a confidentiality agreement until the information is revealed to the SET and the SEC. Regarding the supervision on the use of Banpu’s inside information within the Company, Banpu has clearly stipulated in its work regulations under the subject of disciplines and disciplinary actions that any staff avoids or violates the discipline stated therein will be considered breaching the regulation and therefore subject to a disciplinary action. According to the statement, an action that “reveals the Company’s secrets, intends to destroy the Company’s reputation, creditability or products, which causes the Company to suffer from damage or lose business opportunity,” will subject the staff to a penalty up to expulsion. In addition, the Company has also introduced an IT system to control the use of insider information. For example, a system to deny access to the Company’s information by the third party is introduced to determine the level of information access of staff based on his responsibility.

66 B a n p u P u b l i c C o m p a n y L i m i t e d I n t e r n a l C o n t r o l

The Board of Directors held its No. 1/2006 meeting on 25 January 2006 where the Audit Committee attended to report their views regarding the adequacy of the internal control system. The Audit Committee’s report to the Board of Directors can be summarized as follows. The Audit Committee has reviewed the Auditor’s Report and other recommendations aimed to ensure that the audit was carried out efficiently and that proper monitoring was in place. In addition, the audit focused on fixing the audit results especially those relating to operational risk, connected transactions that might lead to conflict of interest, actual transactions considered a normal course of business aimed to maximize the Company’s profit as well as asset supervision. The audit found a decent protection system being in place. There was no detail of company assets being manipulated. The review was conducted based on established procedures and in line with the government’s regulations and the good corporate governance policy. Regarding its discussion with the external auditor to assess Banpu’s internal control system, the Audit Committee found the system sound, corresponded to the accounting principles, adequate and had no significant defects. The Board of Directors’ opinions towards the internal control system were similar to those given by the Audit Committee, which can be summarized as follows.

1 . O r g a n i z a t i o n a n d E n v i r o n m e n t The Company has updated its organizational structure for better flexibility and to respond to the changing business environment in order to accommodate both long-term plans and overseas expansion. Details are: China Coal Business - a department to supervise the China coal business is added. The Audit Department - an internal audit department is added to internally audit the China coal business. Corporate Services - the Corporate System Department is added to ensure executives that all local and international departments have operation procedures that meet standards and are considered adequate. The Quality, Safety and Environmental Promotion Center has become the Quality, Safety & Environmental Development Center where QSE experts are additionally recruited to increase efficiency of the QSE work in every Banpu unit in Thailand and abroad. The Legal Department is restructured where it is now divided into the Corporate Practices Division and the International Practices Division. The appointment of process owner to ensure the success of the Business Process Standardization (BPS) process introduced to manage Banpu’s coal production and sales. In addition, responsibilities in each unit within the process are clarified.

A n n u a l R e p o r t 2 0 0 5 67 2 . O p e r a t i o n The Board of Directors has promoted a set of corporate shared values under the so-called Banpu Spirit to harmonize its staff in a drive to achieve a success that is in line with Banpu’s vision. The Company has updated its evaluation process regarding staff’s behavior on the basis of the Banpu Spirit in order to improve staff performance, clarify the policy of good corporate governance and Code of Conduct for transparency, and to determine an operation policy and plan that takes into consideration Banpu’s equal treatment to staff, customers, competitors as well as accountability to shareholders, the society and the environment. The Audit Department is independent to inspect and report directly to the Audit Committee. It has a duty to inspect operation of all business and supporting units to ensure compliance. It reviews and monitors important management procedures after the Risk Management Committee has done so. It also reviews coal swap transactions Banpu has with financial institutions to ensure that this will be linked to the internal control. The operation must strictly comply with the rules and the practices. It must be assessable and meet the objectives. It must also create confidence to shareholders that their interests are well taken care of. Finally, it must create values and long-term benefits to the Company’s stakeholders.

3 . R i s k M a n a g e m e n t Banpu considers risk management one of its important policies where it has hired experts to set up a risk management and analysis system and to introduce the risk information management system in an attempt to link all corporate risks together. Banpu’s management has determined a risk policy and plan and a risk management structure has been established consisting of the Risk Management Committee, the Risk Coordinator and the Risk Manager. Besides, staff are told that it is corporate culture that risk management is considered a responsibility of all executives. Risk management measures are well planned and pre-determined. Risk factors are assessed of possible impacts to Banpu’s operation and goals. In addition, a monitoring activity is arranged to keep monitoring the risk management conducted by Banpu’s internal units before reporting to the Risk Management Committee, which will then report it to the Board of Directors. Banpu also continues to provide the Business Continuity Planning (BCP) training and prepare the Disaster Recovery Planning (DRP) for both short- and long-terms, using a standard method to effectively manage its projects so that its operations can continue without glitch.

4 . C o n t r o l o f t h e M a n a g e m e n t ’ s O p e r a t i o n The Board of Directors has appointed 3 sub-committees; namely, the Audit Committee, the Corporate Governance and Nomination Committee and the Compensation Committee. The 3 committees perform their duties under the scope and responsibilities assigned to them on a strict basis. The Board of Directors also determines scopes and responsibilities of both executives and staff of each level. It also improves a table

68 B a n p u P u b l i c C o m p a n y L i m i t e d depicting the authorization power of different levels of executives for clarifying purpose. It also produces an operation manual, constantly monitors the operations of Banpu’s subsidiaries and affiliates and produces a legal manual for revision whether one has fully complied with the existing laws and regulations. In addition, the Audit Committee also reviews and approves an annual budget, make sure that the audit plan covers all high-risk operation process and shareholders’ expectation. The bottom line is Banpu should be assured that all units have an adequate internal control mechanism to reduce risk in finance, operation and legal compliance. In addition, the Audit Committee must also review problems found by both internal and external auditors, monitor them closely before reporting the executives and management of a relevant unit and strive to fix these problems for better efficiency.

5 . I n f o r m a t i o n T e c h n o l o g y a n d D a t a C o m m u n i c a t i o n s The Company has introduced the Mincom Corperation’s IT system to manage the production and sales of its coal under the Business Process Standardization (BPS) Project. The goal is to increase the efficiency of information within the Company’s supply chain system that can help make a better decision. Besides, the Company also provides important information to the Board of Directors; namely, memorandum of meeting and summary of the meeting’s opinions in each and every minute of the meeting of the Board of Directors. There is also information about the IT management for communication purpose with staff at all levels inside and outside Banpu, information about how to keep accounting documents for a period required by the law and a data back-up system. In addition, the Audit Committee also holds meetings with certified public accountants and other relevant management to review Banpu’s accounting policy based on the Generally-Accepted Accounting Principles and to review material essence based on the Auditor’s report. A communication system between the Company itself and overseas subsidiaries and affiliates is being improved to ensure effective coordination.

6 . M o n i t o r i n g S y s t e m The Company held 13 Board of Directors’ meetings in 2005 and a monthly executive meeting to see if its operation met the target. In these meetings, if the result diverted from the goal, the executives would be resolved to fix it and come back to report to the Board of Directors. The Audit Committee convened 8 times to monitor its operation and see if its performance met the goal to ensure that the internal control was carried out on a constant basis and any fix or remedy was carried out immediately and in line with changes. The Board of Directors was reported of the result every quarter while Chairman of the Board was also reported of other tasks carried out by the Audit Committee.

A n n u a l R e p o r t 2 0 0 5 69 C o n n e c t e d P e r s o n s a n d T r a n s a c t i o n s

C o n n e c t e d P e r s o n s

Connected Persons/ List of Description of Relationship Major Shareholders Type of Business Board of Directors

1. TME Capital Co., Ltd. 1) Being one of the major As of 31 December 2005 1. Mr. Soonthorn Vongkusolkit (Investment Company) shareholders of Banpu Plc., 1. The Vongkusolkit Family 52.42% 2. Mr. Vitoon Wongkusolkit holding 3.63 per cent of its 2. The Auapinyakul Family 20.48% 3. Mr. Chanin Vongkusolkit paid-up capital 3. Ufinves Co., Ltd. 7.58% 4. Mr. Metee Auapinyakul 2) The major shareholder is the 4. The Kantatham Family 6.13% 5. Mr. Ongart Auapinyakul Vongkusolkit family, which is 5. Mrs. Panhatai Serirak 3.64% 6. Mr. Sawatdiparp Kantatham also one of major shareholders of 6. The Karnchanakamnerd Family 2.58% 7. Mr. Prachuab Trinikorn Banpu Plc. 7. The Putpongsiriporn 2.43% 8. Mr. Werajet Vongkusolkit 3) There are 6 joint directors as Family follows: 1. Mr. Soonthorn Vongkusolkit 2. Mr. Vitoon Wongkusolkit 3. Mr. Chanin Vongkusolkit 4. Mr. Metee Auapinyakul 5. Mr. Ongart Auapinyakul 6. Mr. Sawatdiparp Kantatham

2. Mitr Phol Sugar Corp., Ltd. 1) Being one of the major As of 31 December 2005 1. Mr. Soonthorn Vongkusolkit (Production and distribution shareholders of Banpu Plc., 1. Mitr Siam Sugar Co., Ltd. 35.00% 2. Mr. Vitoon Wongkusolkit of sugar and molasses) holding 2.96 per cent of its 2. Pan-Asia Sugar Fund 34.40% 3. Mr. Isara Vongkusolkit paid-up capital 3. The Vongkusolkit Family 27.00% 4. Mr. Chanin Vongkusolkit 2) The major shareholder is the 5. Mr. Banthoeng Vongkusolkit Vongkusolkit Family, which is 6. Mr. Choosak Vongkusolkit also one of major shareholders of 7. Mr. Phadung Dechakarin Banpu Plc. 8. Mr. Thaweewat 3) There are 3 joint directors as Thaweepiyamaporn follows: 9. Wg. Cmr. Laksami 1. Mr. Soonthorn Vongkusolkit Putpongsiriporn 2. Mr. Vitoon Wongkusolkit 3. Mr. Chanin Vongkusolkit

3. Ufinves Co., Ltd. 1) Being one of the shareholders of As of 31 December 2005 1. Mr. Chanin Vongkusolkit (Holding Company) Banpu Plc., holding 0.72 per cent 1. The Vongkusolkit Family 42.36% 2. Mr. Werajet Vongkusolkit of its paid-up capital 2. The Janvatanavit Family 24.22% 3. Mr. Santi Janvatanavit 2) The major shareholder is the 3. Wg. Cmr. Laksami 5.38% 4. Mr. Kulwat Janvatanavit Vongkusolkit Family, which is Putpongsiriporn 5. Mr. Danai Janvatanavit also one of major shareholders of 4. The Karnchanakamnerd Family 5.38% Banpu Plc. 5. Mr. Kittisak Chutichotipong 5.06% 3) There are 2 joint directors as 6. Mrs. Kulrat Rattanaprapas 2.92% follows: 1. Mr. Vitoon Wongkusolkit 2. Mr. Chanin Vongkusolkit

70 B a n p u P u b l i c C o m p a n y L i m i t e d Connected Persons/ List of Description of Relationship Major Shareholders Type of Business Board of Directors

4. United Farmer and Industry 1) Being one of the shareholders of As of 31 December 2005 1. Mr. Soonthorn Vongkusolkit Co., Ltd. Banpu Plc., holding 0.65 per cent Mitr Phol Sugar Corp., Ltd. 87.56% 2. Mr. Vitoon Wongkusolkit (Production and distribution of its paid-up capital 3. Mr. Isara Vongkusolkit of sugar and molasses) 2) The major shareholder is 4. Mr. Banthoeng Vongkusolkit Mitr Phol Sugar Corp., Ltd. 5. Ms. Chayawadee Chaianan 3) There are 2 joint directors as 6. Mr. Taweewat follows: Taweepiyamaporn 1. Mr. Soonthorn Vongkusolkit 7. Mr. Pradith Karnchanakamnerd 2. Mr. Vitoon Wongkusolkit 8. Mr. Sukkan Wattanawekin

5. Pacific Sugar Corporation 1) Being one of the shareholders of As of 31 December 2005 1. Mr. Kamol Vongkusolkit Ltd. (Export Distributor) Banpu Plc., holding 0.25 per cent 1. Mitr Phol Sugar Corp., Ltd. 25.00% 2. Mr. Soonthorn Vongkusolkit of its paid-up capital 2. Mr. Kamol Vongkusolkit 17.59% 3. Mr. Isara Vongkusolkit 2) The major shareholder is 3. Mr. Soonthorn Vongkusolkit 15.04% 4. Mr. Banthoeng Vongkusolkit Mitr Phol Sugar Corp., Ltd. 4. Mr. Vitoon Wongkusolkit 12.49% 5. Mr. Kachorn Theppatipath 3) There is one joint director, 6. Mr. Tasana Wanakornkul Mr. Soonthorn Vongkusolkit

6. Mitr Phu Viang Sugar 1) Being one of the shareholders of As of 31 December 2005 1. Mr. Soonthorn Vongkusolkit Co., Ltd. (Production and Banpu Plc., holding 0.23 per cent United Farmer and Industry 99.99% 2. Mr. Isara Vongkusolkit distribution of sugar of its paid-up capital Co., Ltd. 3. Mr. Banthoeng Vongkusolkit and molasses) 2) The major shareholder is United 4. Mr. Kachorn Theppatipath Farmer and Industry Co., Ltd. 3) There is one joint director Mr. Soonthorn Vongkusolkit

7. Mitr Kalasin Sugar 1) Being one of the shareholders of As of 31 December 2005 1. Mr. Kamol Vongkusolkit Co., Ltd. (Production and Banpu Plc., holding 0.18 per cent United Farmer and Industry 99.99% 2. Mr. Soonthorn Vongkusolkit distribution of sugar of its paid-up capital Co., Ltd. 3. Mr. Vitoon Wongkusolkit and molasses) 2) The major shareholder is United 4. Mr. Isara Vongkusolkit Farmer and Industry Co., Ltd. 5. Mr. Banthoeng Vongkusolkit 3) There is 2 joint directors as follows: 1. Mr. Soonthorn Vongkusolkit 2. Mr. Vitoon Wongkusolkit

8. City Holding Co., Ltd. 1) Being one of the shareholders of As of 31 December 2005 1. Mr. Kamol Vongkusolkit (Holding Company) Banpu Plc., holding 0.08 per cent 1. The Vongkusolkit Family 90.00% 2. Mr. Soonthorn Vongkusolkit of its paid-up capital 2. The Putpongsiriporn Family 4.00% 3. Mr. Vitoon Wongkusolkit 2) The major shareholder is the 3. The Karnchanakamnerd Family 6.00% 4. Mr. Isara Vongkusolkit Vongkusolkit Family, which is 5. Mr. Chanin Vongkusolkit also one of major shareholders of 6. Mr. Adisak Vongkusolkit Banpu Plc. 7. Mr. Werajet Vongkusolkit 3) There are 3 joint directors as follows: 8. Mr. Amnuay 1. Mr. Soonthorn Vongkusolkit Karnchanakamnerd 2. Mr. Vitoon Wongkusolkit 9. Ms. Arada Vongkusolkit 3. Mr. Chanin Vongkusolkit

A n n u a l R e p o r t 2 0 0 5 71 O t h e r c o n n e c t e d t r a n s a c t i o n s b e t w e e n t h e C o m p a n y a n d i t s s u b s i d i a r i e s , a f f i l i a t e d c o m p a n i e s a n d o t h e r r e l a t e d c o m p a n i e s i n c l u d i n g a p r i c e - s e t t i n g p o l i c y a n d a p p l i c a b l e i n t e r e s t r a t e s i n C l a u s e 4 o f N o t e s t o F i n a n c i a l S t a t e m e n t s Connected transactions between businesses being executed under the following relationships:

Transaction Connected Transactions Related Companies Value Banpu Public Company Limited

1. Sales of products and services Banpu Minerals Co., Ltd. THB 5.36 1.1 The Company had executed connected transactions with Banpu Minerals million Co., Ltd. as follows: In 2005, incomes of THB 4.60 million were generated from coal sale to Banpu Minerals Co., Ltd. As of 31 December 2005, the following connected transaction was recorded: Related advance worth THB 0.76 million 1.2 The Company had executed connected transactions with Banpu International Banpu International Ltd. THB 967.46 Ltd. as follows: million In 2005, incomes of THB 758.92 million were generated from coal sale to Banpu International Ltd. As of 31 December 2005, the following connected transactions were recorded: Accounts receivable of related business worth THB 207.14 million Related advance worth THB 1.40 million

1.3 The Company had executed connected transactions with PT. Jorong Barutama PT. Jorong Barutama Greston THB 220.27 Greston as follows: million In 2005, incomes of THB 79.15 million were generated from coal sale to PT. Jorong Barutama Greston. As of 31 December 2005, the following connected transaction was recorded: Related advance worth THB 141.12 million

2. Intercompany loans with Banpu Minerals Co., Ltd. Banpu Minerals Co., Ltd. THB 783.96 The Company lent a loan to Banpu Minerals Co., Ltd. in a form of P/N million where the interest was based on an average cost of loan plus 0.5 per cent per annum. The Company had executed connected transactions with Banpu Minerals Co., Ltd. as follows: As of 31 December 2005, the loan outstanding was THB 746.37 million. In 2005, interest income was THB 36.83 million As of 31 December 2005, advanced payments were THB 0.76 million.

3. Intercompany loans with BP Overseas Development Co., Ltd. BP Overseas Development USD 30.32 The Company had lent a loan to BP Overseas Development Co., Ltd. in a form of Co., Ltd. million P/N where the interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with BP Overseas Development Co., Ltd. as follows: As of 31 December 2005, the loan outstanding was USD 29.60 million. In 2005, interest income was USD 0.71 million. As of 31 December 2005, advanced payments were USD 0.01 million.

72 B a n p u P u b l i c C o m p a n y L i m i t e d Transaction Connected Transactions Related Companies Value

4. Intercompany loans with Banpu Singapore Pte. Ltd. Banpu Singapore Pte. Ltd. USD 1.96 The Company had lent a loan to Banpu Singapore Pte. Ltd. in a form of P/N where the million interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with Banpu Singapore Pte. Ltd. as follows: As of 31 December 2005, the loan outstanding was USD 1.88 million. In 2005, interest income was USD 0.08 million.

5. Intercompany loans with PT. Jorong Barutama Greston PT. Jorong Barutama Greston USD 23.67 The Company had lent a loan to PT. Jorong Barutama Greston in a form of P/N where million the interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Jorong Barutama Greston as follows: As of 31 December 2005, the loan outstanding was USD 22.10 million. In 2005, interest income was USD 1.52 million. As of 31 December 2005, advanced payments were USD 0.05 million.

6. Intercompany loans with PT. Nusantara Thai Mining Services PT. Nusantara Thai Mining USD 0.26 The Company had lent a loan to PT. Nusantara Thai Mining Services in a form of P/N Services million where the interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Nusantara Thai Mining Services as follows: As of 31 December 2005, the loan outstanding was USD 0.21 million. In 2005, interest income was USD 0.008 million. As of 31 December 2005, advanced payments were USD 0.04 million.

7. Intercompany loans with PT. Centralink Wisesa International PT. Centralink Wisesa USD 55.41 The Company had lent a loan to PT. Centralink Wisesa International in a form of P/N International million where the interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Centralink Wisesa International as follows: As of 31 December 2005, the loan outstanding was USD 52.34 million. In 2005, interest income was USD 3.07 million.

8. Intercompany loans with PT. Kitadin PT. Kitadin USD 28.93 The Company had lent a loan to PT. Kitadinin a form of P/N where the interest was million computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Kitadin as follows: As of 31 December 2005, the loan outstanding was USD 27.33 million. In 2005, interest income was USD 1.60 million.

A n n u a l R e p o r t 2 0 0 5 73 Transaction Connected Transactions Related Companies Value

9. Intercompany loans with PT. Trubaindo Coal Mining PT. Trubaindo Coal Mining USD 39.13 The Company had lent a loan to PT. Trubaindo Coal Mining in a form of P/N where million the interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Trubaindo Coal Mining as follows: As of 31 December 2005, the loan outstanding was USD 36.95 million. In 2005, interest income was USD 2.18 million.

10. Intercompany loans with PT. Barasentosa Lestari PT. Barasentosa Lestari USD 1.75 The Company had lent a loan to PT. Barasentosa Lestari in a form of P/N where the million interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Barasentosa Lestari as follows: As of 31 December 2005, the loan outstanding was USD 1.65 million. In 2005, interest income was USD 0.10 million.

11. Intercompany loans with PT. Bharinto Ekatama PT. Bharinto Ekatama USD 1.79 The Company had lent a loan to PT. Bharinto Ekatama in a form of P/N where the million interest was computed based on an average cost of loan plus 2 per cent per annum. The Company had executed connected transactions with PT. Bharinto Ekatama as follows: As of 31 December 2005, the loan outstanding was USD 1.69 million. In 2005, interest income was USD 0.10 million.

12. Intercompany loan with Universal Exploration Co., Ltd. Universal Exploration Co., Ltd. THB 602.83 The Company borrowed a loan from Universal Exploration Co., Ltd. in a form of P/N million where the interest was computed based on an average cost of loan plus 0.5 per cent per annum. In 2005, the Company had executed a connected transaction with Universal Exploration Co., Ltd. as follows: As of 31 December 2005, a loan of THB 594.25 million was registered. In 2005, interest expense was THB 8.58 million.

13. Intercompany loans with Banpu Power Ltd. Banpu Power Ltd. THB 256.85 The Company borrowed a loan from Banpu Power Ltd. in a form of P/N where the million interest was computed based on an average cost of loan plus 0.5 per cent per annum. In 2005, the Company recorded the following loan and interest expenses with Banpu Power Ltd. as follows: As of 31 December 2005, a loan of THB 252.75 million was registered. In 2005, interest expense was THB 4.10 million.

74 B a n p u P u b l i c C o m p a n y L i m i t e d Transaction Connected Transactions Related Companies Value

14. Intercompany loans with Banpu Power International Ltd. Banpu Power International Ltd. THB 2,927.49 The Company borrowed a loan from Banpu Power International Ltd. in a form of P/N million where the interest was computed based on an average cost of loan plus 0.5 per cent per annum. In 2005, the Company recorded the following loan and interest expenses with Banpu Power International Ltd. as follows: As of 31 December 2005, a loan of THB 2,885.82 million was registered. In 2005, interest expense was THB 41.67 million.

N e c e s s i t y a n d S o u n d n e s s o f C o n n e c t e d T r a n s a c t i o n s In case the Company enters into an agreement or if there is any connected transaction between the Company and its subsidiaries, affiliated company, related company and/or the third party, the Company will consider the necessities and soundness of such connected transaction before executing such a contract based mainly on its interests.

A p p r o v a l M e a s u r e s o r P r o c e d u r e s o f C o n n e c t e d T r a n s a c t i o n s Should the Company is to enter into a contract or if there is any connected transaction between itself and its subsidiaries, affiliated companies, related companies, the third party and/or anyone with potential conflicts of interest, for the Company’s sake, the Board of Directors requires the Company to comply with the rules in the Announcement of the Stock Exchange of Thailand regarding information disclosure and practices of listed companies in connected transactions. Meanwhile, prices and other conditions shall be as if the transaction is made with the third party where directors or staff with an interest in such transaction must not participate in an approval process.

P o l i c y o r O u t l o o k f o r F u t u r e C o n n e c t e d T r a n s a c t i o n s None

R e p o r t o f t h e A u d i t C o m m i t t e e R e g a r d i n g t h e C o n n e c t e d T r a n s a c t i o n s None

A n n u a l R e p o r t 2 0 0 5 75 R e p o r t o f t h e B o a r d o f D i r e c t o r s ’ R e s p o n s i b i l i t y i n t h e F i n a n c i a l S t a t e m e n t s

The Board of Directors’ priority is to supervise the Company’s operations that they are in line with the good corporate governance policies and that financial statements and financial data appeared in the Company’s annual report contain accurate, complete and adequate information. Its duty is also to make sure that the financial statements are in line with the generally-accepted accounting principles practiced in Thailand where an appropriate accounting policy is being chosen and carefully pursued on a regular basis. In addition, the Board of Directors must also ensure that the Company has an effective internal control system to guarantee the credibility of its financial statements, that a protection system is in place to prevent unusual transactions, that a connected transaction that might lead to possible conflicts of interest is in fact an actual transaction reasonably carried out during a normal course of business for the Company’s maximum benefits and that relevant laws and regulations are complied. The Audit Committee has already reported the result of its action to the Board of Directors and has also reported its opinions in the Audit Committee’s Report as seen in the annual report. In this regard, the Board of Directors is of the opinion that the Company’s internal control system is proven satisfactory and contributes to the Company’s credibility as of 31 December 2005. The Company’s auditor has already audited it according to the generally-accepted accounting standards and has an opinion that the financial statements show an accurate financial status and operation result in its essence as per the generally-accepted accounting principles.

( M r . K r i r k - K r a i J i r a p a e t ) ( M r . C h a n i n V o n g k u s o l k i t ) Chairman of the Board Chief Executive Officer

76 B a n p u P u b l i c C o m p a n y L i m i t e d R e p o r t o f t h e A u d i t C o m m i t t e e t o S h a r e h o l d e r s

Dear Shareholders of Banpu Public Company Limited,

The Audit Committee of Banpu Public Company Limited consists of Mr. Manas Leeviraphan as Chairman of the Audit Committee and Mr. Montri Mongkolswat and Mr. Somkiat Chareonkul as members of the Audit Committee. The Audit Committee performed its duty as entrusted by the Board of Directors where it met 8 times in 2005 and twice in 2006 on 10 January 2006 and 14 February 2006, respectively. In addition, it also had a joint meeting with senior executives, Senior Vice President of the Audit Department and auditors who attended the meeting in relevant agenda. The results of the Audit Committee’s operation can be summarized as follows. Preparing a financial statement - The Audit Committee had reviewed the quarterly financial statement and the 2005 financial statement with the executives and the auditors to make sure that financial statements of both the Company and its subsidiaries were prepared in accordance with the GAAP and that information were disclosed adequately, completely and in a reliable manner. In addition, the Audit Committee also took notice and acknowledged ways to solve problems that would benefit the Company. Disclosure of connected transactions between the Company and its subsidiaries and affiliates was also reviewed to ensure that the Company complied with business conditions and criteria required by the Stock Exchange of Thailand. Internal control system - The Audit Committee reviewed the 2005 audit plan and gave recommendations to the Audit Department for better and more efficient operations regarding the monitoring and the solving of problems reported in the Audit Report especially in essential matters. The goal is to make sure that all units have a proper internal control system that can prevent or at least reduce risk as well as to expand the auditing to cover both the subsidiaries and affiliates overseas. Risk management - As the Board of Directors and executives give a priority to risk management, risk factors are assessed while risk prevention systems are being determined to reduce impacts to the Company’s operation. The Audit Committee therefore reviewed the risk management policy and guidelines as well as updates of the Risk Management Committee’s operation in terms of policy, plan, coordination and responsible persons from related departments. The goal is to ensure efficiency and linkages with the internal control system. Connected transactions - The Audit Committee reviewed connected transactions that may cause conflicts of interest to the Company and found that they were real transactions carried out during a normal course of business and the Company had carried them out according to the good corporate governance policy. Legal compliance - The Audit Committee reviewed the Company’s compliance with the law governing securities and exchange, regulations of the Stock Exchange of Thailand and other legislations relating to its business and found that they were fully complied. Good corporate governance - One of the Company’s priorities is to manage the business according to the principles of good corporate governance for the purpose of transparency and ethics so that shareholders, investors and all stakeholders have confidence in us. The Audit Committee, having reviewed the operations, deems that the Company pursued the good corporate governance policy, resulting in an adequate internal control system with no significant weaknesses. At the same time, its risk management was carried out effectively. Connected transactions which may lead to conflict of interest were actual transactions found in a normal course of business carried out for maximum benefit of the Company. No unusual item was found. In addition, the Company fully complied with all the rules and regulations. For the financial statements during the accounting period that ended 31 December 2005, there was no incident that depicted items with financial impacts. The financial statements were done properly. Information was adequately disclosed and in line with the accounting standards. The Audit Committee also selected the following auditors to be proposed to the Board of Directors, who will seek approval from the Shareholders’ Meeting, to appoint Mrs. Anothai Leekitwattana, CPA, License No. 3442; and/or Ms. Nangnoi Charoenthaveesup, CPA, License No. 3044 and/or Mr. Suchart Luengsuraswat, CPA, License No. 2807, of PricewaterhouseCoopers ABAS Limited, as the Company’s auditor for 2006 for a total auditing fee of THB 2,738,000.

14 February 2006 On behalf of the Audit Committee

( M r . M a n a s L e e v i r a p h a n ) Chairman of the Audit Committee Banpu Public Company Limited

A n n u a l R e p o r t 2 0 0 5 77 M a n a g e m e n t ’ s D i s c u s s i o n a n d A n a l y s i s o f t h e C o n s o l i d a t e d F i n a n c i a l S t a t e m e n t s

The Company’s management would like to explain its fiscal year financial statement ending 31 December 2005 in comparison with the fiscal financial statement ending 31 December 2004. Details of financial statements have been made in the attached note stated in the consolidated financial statement as of 31 December 2005.

1. The Consolidated Profit and Loss for the fiscal year ending 31 December 2005 in comparison with the Consolidated Profit and Loss for the fiscal year ending 31 December 2004 1.1 Sales revenue reported at THB 25,209 million, an increase of THB 7,982 million or 46 per cent compared to the same period last year. The increase was mainly due to the appreciation of sales volume and selling price. Details of the Company’s sales revenue are as following: Revenue from coal sales of THB 25,047 million accounted for 99 per cent of total sales revenue. This represents an increase of THB 7,985 million or 47 per cent. The revenue from coal sales includes: Sales of Indonesian coal mines of THB 22,621 million; Sales of Thai coal mines of THB 2,426 million. Sales of industrial minerals and others totaled THB 162 million, accounting for 1 per cent of total sales revenue. Sales volume totaled 17 million tonnes, increasing 9 per cent from last year. Average selling price was USD 35.23 per tonne, increasing 37 per cent from last year. 1.2 Cost of sales of THB 13,933 million reported an increase of THB 3,408 million, or 32 per cent mainly from an increase in variable production cost related to a higher fuel price and overburden removal expense. 1.3 Gross profit reported at THB 11,275 million, an increase of THB 4,574 million or 68 per cent. Gross profit margin therefore is calculated at 45 per cent this year, compared with 39 per cent last year. 1.4 Selling and administrative expenses reported at THB 3,332 million, an increase of THB 1,104 million or 50 per cent due to an increase in barge-to-vessel expenses at Trubaindo mine which began operation this year, general expenses, commission, and provision for export tax of THB 196 million for subsidiaries in the Republic of Indonesia. 1.5 Royalty fees reported at THB 2,547 million, an increase of THB 847 million or 50 per cent due to increases in sales volume and selling price. 1.6 Realized pre-tax gain on held-for-sales securities and other investment totaled THB 2,584 million, an increase of THB 280 million compared with a realized pre-tax gain of THB 2,304 million recorded in last year. 1.7 Realized pre-tax gain on investment in subsidiary and associate totaled THB 135 million, due to divestment of oil-fired electricity plant and a calcium carbonate plant in the Socialist Republic of Vietnam. 1.8 Dividend income reported at THB 715 million, increasing by THB 244 million due mostly to dividends received from listed power and petrochemical companies. 1.9 Loss of equity investment in subsidiaries and affiliates reported at THB 119 million compared with a loss in equity last year of THB 28 million. This year’s equity loss was due to a loss of an associated power company, which was under construction. Weakness of Thai Baht against US Dollar during the period also contributed to the equity loss. 1.10 Interest expenses of THB 509 million, increasing THB 97 million or 24 per cent mainly from issuance of new bonds and new loans by the subsidiary Trubaindo Coal Mining Company in the Republic of Indonesia. 1.11 Corporate income tax amounted to THB 2,217 million, increasing THB 1,013 million. Corporate income tax during this year includes tax expenses on core profit of THB 1,498 million and profit from non-core divestment of THB 719 million.

78 B a n p u P u b l i c C o m p a n y L i m i t e d 1.12 Net profit for the year 2005 reported at THB 5,565 million, an increase of THB 1,920 million or 53 per cent. 1.13 Earnings per share (EPS) for the year 2005 reported at THB 20.48 per share compared to THB 13.42 per share last year, or an increase of 53 per cent.

2. Consolidated Balance Sheet as of 31 December 2005 in comparison with Consolidated Balance Sheet as of 31 December 2004 2.1 Total assets of THB 45,088 million reported an increase of THB 5,550 million or 14 per cent with details described below: Cash and cash equivalents of THB 9,131 million, an increase of THB 3,109 million or 52 per cent due to Baht debenture issuance and cash flow received from operations and sale of investment as well as net of loan repayment. Accounts and note receivable of THB 2,400 million, increased THB 395 million, or 20 per cent due to the higher sales. Investment in subsidiaries, joint ventures and associates of THB 2,174 million, increased THB 1,637 million or 304 per cent from investment in coal mining company in the People’s Republic of China. Other investment of THB 10,872 million, decreased THB 4,164 million or 28 per cent from mark-to-market adjustment and partial divestment of held-for-sale securities. In addition company realized loss on equity investment. Net property plant and machine of THB 10,703 million, increased THB 2,579 million from procurement of fixed asset by subsidiaries in the Republic of Indonesia which started operation and commercial sale this year. In addition, the book value of fixed assets increased from translation of foreign currencies into Thai Baht. 2.2 Total liabilities of THB 23,202 million, increased THB 6,779 million or 41 per cent with details described below: Bank loans and overdrafts of THB 1,312 million, increased THB 717 million or 120 per cent from bank loan by Banpu and Trubaindo Coal Mining Company. Current portion of long-term loans and current portion of baht-denominated debenture of THB 1,696 million, increased THB 530 million due to higher amount of current portion debenture. Accrued overburden and transportation expenses of THB 1,192 million, decreased THB 351 million mainly from payment to mining contractors in the Republic of Indonesia. Other current liabilities of THB 1,899 million, increased THB 895 million mainly from account payable of machine and equipment and accrued export tax of subsidiaries in the Republic of Indonesia. Long-term loans of THB 1,243 million, decreased THB 233 million due to reclassification into current portion. Baht debenture of THB 12,316 million, increased THB 4,485 million from the new issuance of THB 5,000 million debenture during the fourth quarter of 2005 and partial transfer to current portion. 2.3 Shareholders’ equity of THB 21,886 million, decreased THB 1,229 million or 5 per cent mainly from the following changes:

A n n u a l R e p o r t 2 0 0 5 79 An increase from net profit for fiscal year 2005 at THB 5,565 million. A decrease from dividend paid of THB 3,193 million. A decrease of THB 3,630 million from partial divestment of held-for-sale securities and a lower mark-to-market value of investment in listed companies. A decrease from affiliates’ foreign exchange translations of THB 18 million. 2.4 Net debt-to-equity as of 31 December 2005 reported at 0.34 times for the consolidated balance sheet and 0.31 times for the parent company. As of 31 December 2004, the ratios were 0.22 times for the consolidated balance sheet and 0.24 times for the parent company.

3. Statement of Cash Flow for the year period ending 31 December 2005 in comparison with the previous year ending 31 December 2004 Banpu’s statement of cash flow for the year ending 31 December 2005 reported an increase in net cash flow of THB 3,144 million compared to last year. The Company’s net cash flow is divided into: 3.1 Cash flow from operation of THB 3,780 million; 3.2 Cash flow from investment recorded a deficit of THB 2,911 million from investment in associated company in the People’s Republic of China of THB 1,588 million, investment in property plant and machine of THB 3,163 million, project in progress and advanced overburden removals of THB 2,066 million, and cash inflow from divestment of non-core business of THB 2,921 million; 3.3 Cash flow from financing recorded an increase of THB 2,275 million, deriving from bank loan of THB 3,220 million, new issuance of THB 5,000 million debenture, loan repayment of THB 2,802 million and dividend payment of THB 3,193 million.

4. Management Discussion and Analysis The healthy demand for thermal coal remained a favorable catalyst supporting coal prices during 2005. Coal prices in Asia-Pacific had been at a strong level particularly during the first seven months of last year. This was driven by resilient demand and massive accumulation of coal inventories by major utilities companies. Coal prices had gradually leveled off during the later periods as the needs for inventory buildup lessened. Based on the Barlow Jonker Index, the spot coal price in 2005 averaged at USD 48 per tonne, declining 10 per cent from 2004. Despite the lower spot price, the average selling price for the Company rose by 37 per cent last year to USD 35.23 per tonne as the majority of shipment was priced in advance. The higher selling prices led to substantial increase in sales revenue, gross profit margin, and earnings. In 2005 the Company recorded a net profit of THB 5,565 million, an increase of 53 per cent from the preceding year. In coal operation, the Company commenced operation at the new mine Trubaindo in Kalimantan with sale volume of 1.5 million tonnes last year. This was below the year’s target due to the need to improve logistic facilities during the first year of production. The operation at Trubaindo has been progressing well and will lead the Company’s overall coal production growth in 2006. In addition to the organic growth, last year the Company placed another footstep in the People’s Republic of China by setting up a joint venture (Banpu holds 40 per cent) to operate a coal mine in Henan Province. The restructuring of non-core business also continued. The Company divested an oil-fired electricity plant and a calcium carbonate plant in the Socialist Republic of Vietnam, a holding stake in an insurance company in Thailand, and partial divestment of stakes in a listed petrochemical firm. Going forward the management will continue to invest in coal and related power projects that offer opportunities for value creation and provide appropriate returns.

80 B a n p u P u b l i c C o m p a n y L i m i t e d A u d i t o r ’ s R e p o r t

To the Shareholders of Banpu Public Company Limited

I have audited the accompanying consolidated and company balance sheets as at 31 December 2005 and 2004 and the related consolidated and company statements of income, changes in shareholders’ equity and cash flows for the years then ended of Banpu Public Company Limited and its subsidiaries and of Banpu Public Company Limited, respectively. The Company’s management is responsible for the correctness and completeness of information in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position as at 31 December 2005 and 2004, and the consolidated and company results of operations, and cash flows for the years then ended of Banpu Public Company Limited and its subsidiaries, and of Banpu Public Company Limited, respectively, in accordance with generally accepted accounting principles.

( A n o t h a i L e e k i t w a t t a n a ) Certified Public Accountant (Thailand) No. 3442 PricewaterhouseCoopers ABAS Limited

Bangkok 22 February 2006

A n n u a l R e p o r t 2 0 0 5 81 B a l a n c e S h e e t s B a n p u P u b l i c C o m p a n y L i m i t e d

A s a t 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

A S S E T S Current Assets Cash and cash equivalents 5 9,130,756 6,021,318 7,618,481 4,024,778 Trade accounts receivable, net 6 2,400,368 2,005,560 501,920 386,074 Amounts due from related parties 4.2 52,338 26,996 779,673 658,013 Advances to related parties 4.3 21 2,973 158,686 167,762 Current portion of long-term loans to related parties 4.3 - - 1,906,924 711,796 Inventories, net 7 1,660,633 766,096 420,761 367,504 Spare parts and machinery supplies 407,621 176,925 26,051 29,528 Other current assets 8 1,562,583 1,096,216 223,274 464,312 Total Current Assets 15,214,320 10,096,084 11,635,770 6,809,767

Non-Current Assets Loans to employees 22,597 22,801 140 230 Long-term loans to related parties 4.3 336,726 342,548 6,969,703 7,344,219 Long-term loans and advances to other companies 15,147 20,428 - - Investments in subsdiaries and associates 4.4 2,173,964 537,447 14,466,222 11,277,280 Other investments, net 9 10,871,862 15,035,813 5,990,326 10,023,567 Property, plant and equipment, net 10 10,702,686 8,124,143 480,212 542,068 Other non-current assets Deferred overburden expenses, net 11 1,652,978 1,437,001 500,737 727,986 Mining property rights, net 12 1,962,701 1,881,125 - - Projects under development 13 1,052,407 1,019,142 204,691 113,968 Other non-current assets 14 1,083,004 1,021,838 255,227 259,183 Total Non-Current Assets 29,874,072 29,442,286 28,867,258 30,288,501 Total Assets 45,088,392 39,538,370 40,503,028 37,098,268

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

82 B a n p u P u b l i c C o m p a n y L i m i t e d B a l a n c e S h e e t s ( c o n t i n u e d ) B a n p u P u b l i c C o m p a n y L i m i t e d

A s a t 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

L I A B I L I T I E S A N D S H A R E H O L D E R S ’ E Q U I T Y Current Liabilities Bank overdrafts and loans from banks and financial institutions 15 1,312,360 595,314 1,077,627 556,111 Trade accounts payable 436,551 620,394 - 60,995 Advances from related parties 4.5 - - 6,040 4,704 Current portion of long-term loans 17 1,191,610 846,341 300,000 510,000 Current portion of debentures 18 504,126 319,417 504,126 319,417 Other current liabilities Accrued overburden and coal transportation costs 1,192,063 1,542,706 40,333 20,357 Accrued interest expenses 149,104 96,590 198,214 100,470 Accrued royalty expenses 868,275 692,207 5,521 6,760 Accrued income tax expenses 1,663,384 1,039,261 243,674 281,271 Others current liabilities 16 1,899,319 1,004,653 316,716 197,258 Total Current Liabilities 9,216,792 6,756,883 2,692,251 2,057,343

Non-Current Liabilities Long-term loans from related parties 4.5 - - 3,732,827 3,874,074 Long-term loans, net 17 1,243,125 1,476,107 99,500 398,800 Debentures, net 18 12,315,821 7,830,333 12,315,821 7,830,333 Other liabilities 426,311 359,414 496 496 Total Non-Current Liabilities 13,985,257 9,665,854 16,148,644 12,103,703 Total Liabilities 23,202,049 16,422,737 18,840,895 14,161,046

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

A n n u a l R e p o r t 2 0 0 5 83 B a l a n c e S h e e t s ( c o n t i n u e d ) B a n p u P u b l i c C o m p a n y L i m i t e d

A s a t 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

L I A B I L I T I E S A N D S H A R E H O L D E R S ’ E Q U I T Y ( c o n t i n u e d ) Shareholders’ Equity Share capital Registered share capital 354,050,479 ordinary shares of THB 10 each 3,540,505 3,540,505 3,540,505 3,540,505

Issued and paid-up share capital 19 2,717,479 2,717,479 2,717,479 2,717,479 Premium on share capital 19 5,058,329 5,058,329 5,058,329 5,058,329 Fair value reserve: available-for-sale securities 25 6,914,095 10,543,668 6,914,095 10,543,668 Adjustment from foreign exchange translation (454,307) (436,250) (454,307) (436,250) Retained earnings Appropriated Legal reserve 26 399,642 390,613 399,642 390,613 Unappropriated 7,026,895 4,663,383 7,026,895 4,663,383 Total parent’s shareholders’ equity 21,662,133 22,937,222 21,662,133 22,937,222 Minority interest 224,210 178,411 - - Total Shareholders’ Equity 21,886,343 23,115,633 21,662,133 22,937,222 Total Liabilities and Shareholders’ Equity 45,088,392 39,538,370 40,503,028 37,098,268

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

84 B a n p u P u b l i c C o m p a n y L i m i t e d S t a t e m e n t s o f I n c o m e B a n p u P u b l i c C o m p a n y L i m i t e d

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

Sales 25,208,684 17,226,675 2,571,866 1,637,513 Cost of sales (13,933,288) (10,525,024) (1,406,540) (1,066,332) Gross profit 11,275,396 6,701,651 1,165,326 571,181 Selling and administrative expenses (3,331,844) (2,227,593) (741,697) (491,592) Royalty fee (2,546,758) (1,699,642) (63,385) (51,055) Profit from sales 5,396,794 2,774,416 360,244 28,534 Other income Gain on disposal of investments in available-for-sale securities 2,405,885 2,303,878 2,403,015 2,297,964 Gain on disposal of other investments 178,007 - 99,815 - Gain on disposal of investments in related parties 135,030 141,716 106,057 - Net gain on disposal of property, plant and equipment - 15,556 1,920 1,198 Gain on exchange rate - - 85,590 - Dividend income 714,625 471,049 480,240 53,484 Interest income 159,301 51,285 560,675 477,144 Others 53,366 175,734 5,183 35,104 Other expenses Write-off projects under development 13 (77,520) (266,296) (60,820) (265,258) Write-off land compensation - (143,529) - - Net loss on disposal of property, plant and equipment (4,366) - - - Directors’ remuneration 24 (26,620) (20,130) (26,439) (18,679) Net loss on exchange rate (116,964) (6,146) - (54,822) Operating profit 20 8,817,538 5,497,533 4,015,480 2,554,669 Share of profit of subsidiaries 4.4 - - 3,009,622 1,969,537 Share of loss of joint ventures and associates 4.4 (119,349) (28,294) (119,349) (28,294) Profit before interest and income tax 8,698,189 5,469,239 6,905,753 4,495,912 Interest expenses (509,314) (411,880) (476,908) (417,375) Financial expenses (220,379) (140,832) (204,053) (132,923) Income taxes (2,217,481) (1,204,148) (659,941) (300,675) Profit before minorities 5,751,015 3,712,379 5,564,851 3,644,939 Less Profit attributable to minorities (186,164) (67,440) - - Net profit for the year 5,564,851 3,644,939 5,564,851 3,644,939 Basic earnings per share (THB) 21 20.48 13.42 20.48 13.42 Diluted earnings per share (THB) 21 20.48 13.42 20.48 13.42

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

A n n u a l R e p o r t 2 0 0 5 85 S t a t e m e n t s o f C h a n g e s i n S h a r e h o l d e r s ’ E q u i t y B a n p u P u b l i c C o m p a n y L i m i t e d

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 THB Thousand C o n s o l i d a t e d 2 0 0 5

Fair value Adjustment Issued and reserve : from Appro- Unappro- paid-up Premium available- foreign priated priated share on share for-sale exchange retained retained Minority Notes capital capital securities translation earnings earnings interest Total

Opening balance of 2005 2,717,479 5,058,329 10,543,668 (436,250) 390,613 4,663,383 178,411 23,115,633 Fair value adjustment 25 --(3,629,573) ----(3,629,573) Adjustment from foreign exchange translation ---(18,057) - - (140,365) (158,422) Legal reserve 26 ----9,029 (9,029) - - Dividends paid 23 -----(3,192,310) - (3,192,310) Net profit -----5,564,851 186,164 5,751,015 Closing balance of 2005 2,717,479 5,058,329 6,914,095 (454,307) 399,642 7,026,895 224,210 21,886,343

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 THB Thousand C o m p a n y 2 0 0 5

Fair value Adjustment Issued and reserve : from Appro- Unappro- paid-up Premium available- foreign priated priated share on share for-sale exchange retained retained Notes capital capital securities translation earnings earnings Total

Opening balance of 2005 2,717,479 5,058,329 10,543,668 (436,250) 390,613 4,663,383 22,937,222 Fair value adjustment 25 --(3,629,573) - - - (3,629,573) Adjustment from foreign exchange translation ---(18,057) - - (18,057) Legal reserve 26 ----9,029 (9,029) - Dividends paid 23 -----(3,192,310) (3,192,310) Net profit -----5,564,851 5,564,851 Closing balance of 2005 2,717,479 5,058,329 6,914,095 (454,307) 399,642 7,026,895 21,662,133

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

86 B a n p u P u b l i c C o m p a n y L i m i t e d S t a t e m e n t s o f C h a n g e s i n S h a r e h o l d e r s ’ E q u i t y ( c o n t i n u e d ) B a n p u P u b l i c C o m p a n y L i m i t e d

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 THB Thousand C o n s o l i d a t e d 2 0 0 4

Share Fair value Adjustment Issued and subscrip- reserve : from Appro- Unappro- paid-up Premium tion available- foreign priated priated share on share received for-sale exchange retained retained Minority Notes capital capital in advance securities translation earnings earnings interest Total

Opening balance of 2004 2,702,748 5,020,266 52,673 12,092,978 (330,950) 390,448 2,309,336 117,989 22,355,488 Share capital 19 14,731 ------14,731 Premium on share capital 19 - 38,063 ------38,063 Share subscriptions received in advance - - (52,673) -----(52,673) Fair value adjustment 25 - - - (1,549,310) ----(1,549,310) Adjustment from foreign exchange translation ----(105,300) - - 41,075 (64,225) Legal reserve 26 ----- 165(165) - - Dividends paid 23 ------(1,290,727) - (1,290,727) Net profit ------3,644,939 67,440 3,712,379 Investment in subsidiary ------(48,093) (48,093) Closing balance of 2004 2,717,479 5,058,329 - 10,543,668 (436,250) 390,613 4,663,383 178,411 23,115,633

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 THB Thousand C o m p a n y 2 0 0 4

Share Fair value Adjustment Issued and subscrip- reserve : from Appro- Unappro- paid-up Premium tion available- foreign priated priated share on share received for-sale exchange retained retained Notes capital capital in advance securities translation earnings earnings Total

Opening balance of 2004 2,702,748 5,020,266 52,673 12,092,978 (330,950) 390,448 2,309,336 22,237,499 Share capital 19 14,731 ------14,731 Premium on share capital 19 - 38,063 -----38,063 Share subscriptions received in advance - - (52,673) ----(52,673) Fair value adjustment 25 - - - (1,549,310) - - - (1,549,310) Adjustment from foreign exchange translation ----(105,300) - - (105,300) Legal reserve 26 ----- 165(165) - Dividends paid 23 ------(1,290,727) (1,290,727) Net profit ------3,644,939 3,644,939 Closing balance of 2004 2,717,479 5,058,329 - 10,543,668 (436,250) 390,613 4,663,383 22,937,222

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

A n n u a l R e p o r t 2 0 0 5 87 S t a t e m e n t s o f C a s h F l o w s B a n p u P u b l i c C o m p a n y L i m i t e d

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

Cash flows from operating activities Net profit for the year 5,564,851 3,644,939 5,564,851 3,644,939 Adjustment to net profit for cash receipts (payments) from operations Depreciation 20 859,928 499,718 58,508 55,924 Amortisation of deferred expenses 20 1,904,282 991,560 600,489 380,195 Increase (decrease) in allowance for doubtful accounts (20,609) (19,466) (20,609) (19,604) Increase (decrease) in allowance for obsolescences - (36,287) - - Write-off projects under development 13 77,520 266,296 60,820 265,258 Share of net (profit) loss of subsidiaries, joint ventures and associates 4.4 (b) 119,349 28,294 (2,890,273) (1,941,243) Dividends received from other investments (714,625) (471,049) (480,240) (53,484) Net (gain) loss on disposal of property, plant equiptment 4,793 (15,556) (1,920) (1,198) (Gain) on disposal of investments in related parties (135,030) (141,716) (106,057) - (Gain) on disposal of other investments (2,583,892) (2,303,878) (2,502,830) (2,297,964) Net unrealised (gain) loss on exchange rate (727,097) (109,663) (357,374) 169,663 Net realised (gain) loss on exchange rate from loans - 5,484 (29,910) 140,114 Net share of profit to minority shareholders’ interest 186,164 67,440 - - Profit (Loss) from operation before changes in working capital 4,535,634 2,406,116 (104,545) 342,600 (Increase) decrease in trade accounts receivable (374,199) (931,563) (95,237) (97,934) (Increase) decrease in accounts due from related parties (25,342) (6,884) (276,365) (47,430) (Increase) decrease in inventories (894,537) 121,593 (53,257) 126,716 (Increase) decrease in spare parts and machinery supplies (230,696) (5,091) 3,477 1,721 (Increase) decrease in other current assets (466,367) (460,771) 241,038 186,515 Increase (decrease) in trade accounts payable (183,843) 370,200 (60,995) 60,317 Increase (decrease) in accrued overburden and coal transportation costs (350,643) 839,665 19,976 3,278 Increase (decrease) in accrued interest payable 52,514 3,417 97,744 8,419 Increase (decrease) in accrued royalty fee 176,068 295,425 (1,239) (703) Increase (decrease) in accrued income tax 624,123 873,436 (37,597) 281,271 Increase (decrease) in other current liabilities 917,673 512,543 120,756 101,668 Net cash receipts (payments) from operating activities 3,780,385 4,018,086 (146,244) 966,438

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

88 B a n p u P u b l i c C o m p a n y L i m i t e d S t a t e m e n t s o f C a s h F l o w s ( c o n t i n u e d ) B a n p u P u b l i c C o m p a n y L i m i t e d

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

Cash flows from investing activities Cash receipts (payments) for advances from related parties - - 1,336 (113) Cash receipts (payments) for advances to related parties 2,952 57,690 9,076 (22,990) Cash receipts from loans to related parties 4.3 (b) - - 2,591,541 4,641,914 Cash payments for loans to related parties 4.3 (b) - - (2,926,375) (3,573,982) Cash receipts from long-term loan to other 29,428 15,000 - 15,000 Cash payments for long-term loan to other (18,000) - - - Cash receipts (payments) from loans to employees, net 204 (12,536) 90 49 Cash receipts from disposal of investments in subsidiaries and associates 239,694 90,609 186,652 - Cash payments for purchase of investments in subsidiaries and associates (7,574) (496,957) (341,540) (606,566) Cash receipts from disposal of other investments 2,921,102 2,820,548 2,732,317 2,693,451 Cash payments for purchase of other investments 9 (1,587,664) (307,742) (82,560) (3,981,269) Cash payments for projects under development 13 (288,728) (681,461) (151,111) (169,267) Cash payments for deferred overburdened expenses (1,777,398) (896,150) (309,384) (247,538) Cash payments for purchase of property, plant and equipment 10 (3,163,074) (3,020,618) (62,922) (111,769) Cash receipts from disposal of property, plant and equipment 64,971 142,286 4,924 55,040 (Increase) decrease in other non-current assets (41,237) 44,666 10,057 46 Cash receipts from dividends from other investments 714,625 471,049 480,240 53,484 Cash receipts from dividends from investments in subsidiaries and associates 4.4 - - 203,351 8,800 Net cash receipts (payments) from investing activities (2,910,699) (1,773,616) 2,345,692 (1,245,710)

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

A n n u a l R e p o r t 2 0 0 5 89 S t a t e m e n t s o f C a s h F l o w s ( c o n t i n u e d ) B a n p u P u b l i c C o m p a n y L i m i t e d

F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4 C o n s o l i d a t e d C o m p a n y

Notes 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand

Cash flows from financing activities Cash receipts from loans from bank 2,345,808 2,329,420 998,697 1,707,921 Cash payments for loans from bank (1,620,008) (2,856,635) (415,547) (2,175,175) Cash receipts from loan from related parties 4.5 (b) - - - 3,310,599 Cash payments for loan from related parties 4.5 (b) - - (141,247) (184,294) Cash receipts from long-term loans 17 874,439 1,353,530 - - Cash payments for long-term loans 17 (862,194) (699,081) (510,000) (610,000) Cash receipts from debentures 18 5,000,000 2,000,000 5,000,000 2,000,000 Cash payments for debentures 18 (319,418) (499,818) (319,418) (499,818) Cash payments for deferred financing service fee 18 (17,659) (6,134) (17,659) (6,134) Increase (decrease) in other liabilities 66,897 263,625 - - Dividends paid 23 (3,193,312) (1,290,727) (3,193,312) (1,290,727) Cash receipts from share capital - 121 - 121 Net cash receipts (payments) from financing activities 2,274,553 594,301 1,401,514 2,252,493

Net increase in cash and cash equivalents 3,144,239 2,838,771 3,600,962 1,973,221 Adjustment from foreign exchange translation (26,583) (26,710) 967 (7,193) Cash and cash equivalents at beginning of the year 6,010,121 3,198,060 4,013,582 2,047,554 Cash and cash equivalents at end of the year 9,127,777 6,010,121 7,615,511 4,013,582

Supplementary information for cash flows: Cash paid during the year Interest paid 677,180 408,463 544,275 408,957 Corporate income tax 1,593,358 330,712 697,538 19,403 Cash and cash equivalents comprise: Cash and cash equivalents - as presented in the Balance Sheet 5 9,130,756 6,021,318 7,618,481 4,024,778 Less Bank overdrafts 15 (2,979) (11,197) (2,970) (11,196) Cash and cash equivalents at end of the year 9,127,777 6,010,121 7,615,511 4,013,582

Non-cash transaction In 2005, amounts due from a overseas subsidiary which incurred from sales of machinery of THB 154.71 million has been converted to be loan to a related party. As at 31 December 2005, this loan has not been made fully settlement. The outstanding balance is THB 151.69 million and presented as loan to related parties (Note 4.2). In 2002, the Company sold machines to two overseas subsidiaries amounting to THB 327.93 million. As at 31 December 2005 and 2004, such two overseas subsidiaries have not made settlement and amounts due have been presented as amount due from related parties of THB 91.50 and THB 277.53 million, respectively (Note 4.2).

The notes to the consolidated and company financial statements on pages 91 to 131 form an integral part of these financial statements.

90 B a n p u P u b l i c C o m p a n y L i m i t e d N o t e s t o t h e C o n s o l i d a t e d a n d C o m p a n y F i n a n c i a l S t a t e m e n t s B a n p u P u b l i c C o m p a n y L i m i t e d F o r t h e y e a r s e n d e d 3 1 D e c e m b e r 2 0 0 5 a n d 2 0 0 4

1 . G e n e r a l i n f o r m a t i o n Banpu Public Company Limited is a public limited company incorporated and resident in Thailand. The address of the Company’s registered office is as follows: 1550 New Petchburi Road, Makkasan, Ratchathewi, Bangkok The Company is listed on the Stock Exchange of Thailand. “The Company” means Banpu Public Company Limited. “The Group” means the Company, subsidiaries, joint ventures and associates. The Group is engaged in coal mining and power businesses. The Group has operations in Thailand and overseas mainly in Indonesia. As at 31 December 2005, the Company employs 349 people (2004: 354 people) and the Group employs over 4,308 people (2004: 4,148 people). These consolidated and company financial statements have been approved by Board of Directors on 22 February 2006.

2 . A c c o u n t i n g p o l i c i e s The principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below: 2.1 Basis of preparation The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Account Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act B.E. 2535. As a result of the Federation of Accounting Profession (“FAP”) approval of three new accounting standards on 12 May 2005, the Company has adopted TAS 52, “Events After Balance Sheet Date”, TAS 53, “Provisions, Contingent Liabilities, and Contingent Assets” and TAS 54, “Discontinuing Operations” in 2005. The adoption of these accounting standards did not have an impact on the financial statements presentation. The consolidated and company financial statements have been prepared under the historical cost convention except certain accounts as disclosed in the accounting policies below. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses in the reported periods. Although these estimates are based on management’s best knowledge of current events and actions, actual results may differ from those estimates. Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. An English version of the consolidated and company financial statements have been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail. 2.2 Group accounting - Investment in subsidiaries and associates and interests in joint ventures Subsidiaries Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which its control is transferred to the Group. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill. See Note 2.8 for the accounting policy on goodwill. Intercompany transactions, balances and unrealised gains or losses on

A n n u a l R e p o r t 2 0 0 5 91 transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. In the Company’s separate financial statements investments in subsidiaries are reported using the equity method of accounting. In cases where a subsidiary incurs a loss, the Company will reduce the investment in the subsidiary company until it reaches zero, and then records the excess of the loss over the capital as a liability when the Group has incurred obligations and guaranteed obligations in respect of the subsidiaries undertaking. A list of the Group’s principal subsidiaries and the effects of acquisitions and disposals of subsidiaries are shown in Note 4.4. Associates and joint ventures Associates and joint ventures are entities over which the Group generally has significant influence or joint control, but which it does not control. Unrealised gains or losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in the associates and joint ventures; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The Group’s investment in associates and interests in joint ventures includes goodwill (net of accumulated amortisation) on acquisition. When the Group’s share of losses in an associate or a joint venture equals or exceeds its interest in the associate or joint venture, the Group does not recognise further losses unless the Group has incurred obligations or made payment on behalf of the associates and joint ventures. Investments in associates and joint ventures are accounted for by the equity method of accounting in the consolidated financial statements. Under this method the Group’s share of the post-acquisition profits and losses of associates and joint ventures is recognised in the income statement and its share of post-acquisition movements in fair value reserve is recognised in fair value reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. In the Company’s separate financial statements the equity method is applied to account for investments in associates and interests in joint ventures. A list of the Group’s principal associates and joint ventures and the effects of acquisitions and disposals of associates and joint ventures are shown in Note 4.4. 2.3 Foreign currency translation Items included in the financial statements of each entity in the Group are measured using the reporting currency of that entity. The consolidated financial statements are presented in Thai Baht. Foreign currency transactions are translated into the reporting currency using the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the reporting currency at the exchange rates prevailing at the balance sheet date. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income. Statements of income and cash flow of foreign entities are translated into Thai Baht at the weighted average exchange rates for each month and balance sheets are translated at the exchange rates ruling on the balance sheet date. Currency translation differences arising from the retranslation of the net investment in foreign entities are taken to shareholders’ equity. On disposal of such foreign entity, accumulated currency translation differences are recognised in the statement of income as part of the gain or loss on disposal. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing rate. 2.4 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 3 months or less and bank overdrafts. Bank overdrafts are included in current liabilities on the balance sheet. 2.5 Trade accounts receivable Trade accounts receivable are carried at original invoice amount and subsequently measured at the remaining amount less allowance for doubtful receivables based on a review of all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are recognised in the income statement within selling and marketing expenses.

92 B a n p u P u b l i c C o m p a n y L i m i t e d 2.6 Inventories, spare parts and machinery supplies Inventories, spare parts and machinery supplies are stated at the lower of cost or net realisable value. Cost is determined by the weighted average method. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads, the latter being allocated on the basis of normal operating activities but excluded borrowing cost. Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses. Allowance is made, where necessary, for obsolete, slow-moving and defective inventories, spare parts and machinery supplies. 2.7 Other investments Investments other than investments in subsidiaries and associates and interests in joint ventures are classified into the following four categories: 1) trading, 2) held-to-maturity, 3) available-for-sale and 4) general investments. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Investments that are acquired principally for the purpose of generating a profit from short-term, 3 months, fluctuations in price are classified as trading investments and included in current assets. Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held- to-maturity and are included in non-current assets, except for maturities within 12 months from the balance sheet date which are classified as current assets. Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale; and are included in non-current assets unless management has expressed the intention of holding the investment for less than 12 months from the balance sheet date or unless they will need to be sold to raise operating capital, in which case they are included in current assets. Investments in non-marketable equity securities are classified as general investments. Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the investment. Cost of investment includes transaction costs. Trading and available-for-sale investments are subsequently carried at fair value. Realised and unrealised gains and losses arising from changes in the fair value of trading investments are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of investments classified as available-for-sale are recognised in equity. Held-to-maturity investments are carried at amortised cost using the effective yield method. The fair value of investments are based on quoted bid price by reference to the Stock Exchange of Thailand. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment in securities. In the statement of cash flows, trading investments are presented within the section on operating activities as part of changes in working capital. General investments are carried at cost less impairment. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the statement of income. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is recognised to the statement of income. When disposing of part of the Group’s holding of a particular investment in debt or equity securities, the carrying amount of the disposed part is determined by the weighted average carrying amount of the total holding of the investment. 2.8 Other non-current assets Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired subsidiary, joint ventures or associated undertaking at the date of acquisition. Goodwill on acquisitions of subsidiaries is reported in the consolidated balance sheet as an intangible assets. Goodwill on acquisitions of interest in joint ventures or associates are included in investment in joint ventures or associates. Goodwill is amortised using the straight-line method over the useful life. Management determines the estimated useful life of goodwill based on its evaluation of the respective companies at the time of the acquisition, considering factors such as existing market share, potential growth and other factors inherent in the acquired companies. Goodwill arising on acquisitions of the Group is amortised on the straight-line basis over 5-10 years.

A n n u a l R e p o r t 2 0 0 5 93 Mining property rights Mining property rights represent the excess of the cost of an acquisition over the fair value of net assets, which in managements’ view represents future economic benefits attributable to the mining rights held by subsidiaries. Mining property rights are amortised using the units of coal produced in relation to the total expected reserves (saleable reserve and resources) of the project, based on the estimated reserves reviewed by an independent geologist appraiser. Projects under development For new project The Group has searched the new reserve to replace the old one and invested in new project so as to extent the future business. The expenditures in relation to those projects are recorded as projects under development, presented in the balance sheet, when such projects have been approved by the Sounding Committee to perform the feasibility study. Expenditure incurred before the approval of the Committee are recognised as expenses in the statement of income. However, projects under development are reviewed the potential to continue by project head. If the project has no potential to invest, the Group will write off to be an expense in the statement of income. For mining Projects under development for mining are primarily exploration and development before production which are accumulated separately for each mine and recognized as projects under development, presented in balance sheet. When the exploration and development has been completed, such projects under development are classified as deferred exploration and development expenses and amortised to be cost of production since commence the production. Projects under development are written-off to be expenses in statement of income when the benefit of project has been changed and the economic benefit is not recoverable for mining. Expenses incurred on mine exploration, mine development and overburden Expenses incurred on mine exploration, mine development and overburden (if any) are deferred and amortised using the units of coal production in relation to the total expected reserves (saleable reserve and resources) of the project. Deferred financing service fee Deferred financing fee is initially recorded at cost and carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the life of the loan agreements. The difference between the straight-line method and the effective interest method does not have material impact to the financial statements as a whole. Deferred financing service fee is recognised as cost of debt and presented by deducting directly from loan. 2.9 Property, plant and equipment Property, plant and equipment are stated at historical cost and carried at cost less accumulated depreciation. Depreciation is calculated on the straight-line method to write off the cost of each asset, except for land as it is deemed to have an indefinite life, to their residual values over their estimated useful life as follows: Land improvement, buildings, construction and building improvement 5, 20 years Machinery and equipment period of the mine right and 10 years Furniture 5 years Office equipment and tools 5 years Motor vehicles 5 years Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset. Interest costs on borrowings to finance the construction of property, plant and equipment are capitalised as part of cost of the asset during the period of time required to complete and prepare the property for its intended use. Borrowing costs include:

94 B a n p u P u b l i c C o m p a n y L i m i t e d interest on bank overdrafts and short-term and long-term borrowings, and related taxes; amortisation of discounts or premiums relating to borrowings; amortisation of ancillary costs incurred in connection with the arrangement of borrowings; finance lease charges; and certain currency translation differences arising from foreign currency borrowings and interests but limited to the amount which would have been incurred had the loan been borrowed in Thai Baht. All other borrowing costs except for the listed above are expensed in statement for income. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in statement of income. 2.10 Impairment of assets Property, plant and equipment and other non-financial assets, including goodwill and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. 2.11 Leases Leases of property, plant or equipment which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the statement of income over the lease period. Property, plant or equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset or the lease term. Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases. Payments made under operating leases are charged to the statement of income on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. 2.12 Employee benefits The Group operates a provident fund that is a defined contribution plan, the assets of which are held in a separate trust fund. The provident fund is funded by payments from employees and by the relevant Group companies. Contributions to the provident fund are charged to the statement of income in the year to which they relate. The Group does not recognise liability arising from other post employment benefits. 2.13 Provisions Provisions, which excluded employee benefits, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Provision for environmental rehabilitation (if any) is recognised by units of sale at the rate determined by the Company’s geologist. The provisioning rate is based on the estimated cost for mine rehabilitation through to the end of the mine. The Group reviews and revises the rate to reflect the actual expenses incurred on a regular basis. 2.14 Share capital Ordinary shares with discretionary dividends are classified as equity. Incremental external costs directly attributable to the issue of new shares, other than in connection with a business combination, are shown in equity as a deduction, net of tax, from the proceeds. Share issue costs incurred directly in connection with a business combination are included in the cost of acquisition.

A n n u a l R e p o r t 2 0 0 5 95 2.15 Revenue recognition Revenue comprises the invoiced value for the sale of goods and services net of value-added tax, rebates, discounts and transportation, and after eliminating sales within the Group for the consolidated financial statements. Revenue from sales of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer. Sales of coal are quantified by weight at the front mine. The increment or reduction of coal values as a result of quality and weight noticed by customers will be recorded in the month of goods delivery. Service income is recognised when services are rendered. Other revenues earned by the Group are recognised on the following bases: interest income - accrual basis. dividend income - when the Company’s right to receive payment is established. 2.16 Dividends Dividends are recorded in the consolidated and company financial statements in the period in which they are approved by the Board of Directors or shareholders. 2.17 Segment reporting Geographic segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those of components operating in other economic environments. Segment information is presented by geographic area of the Group’s operations. 2.18 Related parties Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. 2.19 Financial risk management Financial risk factors The Group’s activities expose it to a variety of financial risks, including the effects of changes in debt and equity market price, foreign currency exchange rates, interest rates and coal price. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as forward foreign exchange contracts, currency swaps contracts, interest rate swap contracts and coal swap contracts to hedge certain exposure. Risk management is carried out by a central treasury department under policies approved by the Board of Directors. Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US Dollars. Entities in the Group use forward foreign exchange contracts and currency swaps contracts, transacted with Group Treasury, to hedge their exposure to foreign currency risk in connection with their measurement currency. Group Treasury is responsible for hedging the net position in each currency by using currency borrowings and external forward foreign exchange contracts or currency swap contracts. Interest rate risk The Group’s income and operating cash flows are substantially independent of changes in market interest rates. All interest rate derivative transactions are subject to approval by the Financial Management Committee before execution. The Group’s policy is to maintain borrowings in both fixed and floating rate instruments.

96 B a n p u P u b l i c C o m p a n y L i m i t e d Coal price fluctuation risk The Group is exposed to coal price risk from substantial fluctuations in coal price. The Group uses coal swap contracts to minimise its exposure to fluctuations in coal price in it business operations, both in Thailand and overseas, and maintains on emphasis on a balance of overall coal price in the Group by entering into both short-term and long-term sales agreements. Credit risk The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of goods and services are made to customers with an appropriate credit history. Derivative counter parties and cash transactions are limited to high credit quality financial institutions. The Group has policies that limit the amount of credit exposure to any one financial institution. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying business, Group Treasury aims at maintaining flexibility in funding by keeping credit lines available. Accounting for derivative financial instruments and hedging activities The Group is party to derivative financial instruments, which mainly comprise forward foreign currency contracts, foreign currency swap contracts, interest rate swap contracts are recognised in the financial statements on inception and coal swap contracts which are not recognised on the inception date of each contract. Forward foreign currency contracts and foreign currency swap contracts protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset will be realised or a foreign currency liability settled. Any increase or decrease in the amount required to realise the asset or settle the liability is offset by a corresponding movement in the value of the related contracts. The gains and losses on the derivative instruments and the underlying financial asset or liability are therefore offset for financial reporting purposes and are recognised in the financial statements. The fee incurred in establishing each agreement is amortised over the contract period, if any. Interest rate swap contracts protect the Company from movements in interest rates. Any differential to be paid or received on interest rate swap contracts is recognised as a component of gains (losses) from interest rate swap contracts as incurred obligations under the interest rate swap contracts are recognised on an accrual basis and in relation to the notional amount and rate stipulated in the contract. Coal swap contracts protect the Company from movements in coal price by establishing the agreed price, which is not recognised at inception. The fluctuation between the price at contract settlement date and agreed price will be recognised as realised gains and losses in the statement of income at settlement date. Disclosures about derivative finance instruments to which the group is a party are provided in Note 29. Fair value estimation When a financial instrument is traded in an active market, its quoted market price provides the best evidence of fair value. When current bid and offer prices are unavailable, the price of the most recent transaction may provide evidence of the current fair value provided that there has not been a significant change in economic circumstances between the transaction date and the reporting date. When the Group has matching asset and liability positions, it may appropriately use mid-market prices as a basis for establishing fair values. Information on the fair values of borrowing, currency swaps, forward foreign exchange contracts and coal swap contracts is included in Note 29.

3 . C h a n g i n g i n a c c o u n t i n g p o l i c y Accounting for derivative financial instruments - Coal swap contracts As from 1 January 2005, the Company’s management has changed the accounting policy in accordance with coal swap contracts from recognition since inception date to recognition at the settlement date of each contract and disclose the fair value of such contract (Note 29), since the management has considered that new accounting policy is more appropriate and better reflect the business transactions. The coal swap contracts have been based on forecasted future coal sales and coal price which has been highly fluctuated. The effect of change in such accounting policy of THB 23.72 million does not have material effect to the financial statements and recognised in statements of income in 2005.

A n n u a l R e p o r t 2 0 0 5 97 4 . R e l a t e d p a r t y t r a n s a c t i o n s The following significant transactions were carried out with related parties: 4.1 Transactions during the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Sales of goods and services Subsidiaries Banpu Minerals Co., Ltd. - - 4,597 70,598 Banpu International Ltd. - - 758,916 365,515 Total - - 763,513 436,113

Purchases of goods and cost of services Subsidiaries Banpu Minerals Co., Ltd. - - 2,793 - PT. Jorong Barutama Greston - - 79,149 58,815 Total - - 81,942 58,815

Dividend income Other related parties 688,216 413,060 458,437 7,205 Total 688,216 413,060 458,437 7,205

Other income Subsidiaries Banpu Power Ltd. - - - 476 Banpu International Ltd. - - - 200 PT. Indominco Mandiri - - - 328 Joint ventures BLCP Power Ltd. 28,001 28,350 351 - Power Generation Services Co., Ltd. 3,782 - - - Associate Asian American Coal Inc. 1,121 - 969 - Total 32,904 28,350 1,320 1,004

Sales of fixed assets Subsidiaries PT. Jorong Barutama Greston - - - 16,031 PT. Trubaindo Coal Mining - - - 4,701 PT. Indominco Mandiri - - - 7,874 PT. Kitadin - - - 672 Total - - - 29,278

98 B a n p u P u b l i c C o m p a n y L i m i t e d C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Interest income Subsidiaries Banpu Minerals Co., Ltd. - - 36,832 46,896 Banpu Power Ltd. - - - 31,400 Banpu International Ltd. - - - 186 Banpu Singapore Pte. Ltd. - - 3,464 1,035 Banpu Minerals (Singapore) Pte. Ltd. - - - 2,874 PT. Jorong Barutama Greston - - 61,485 55,100 PT. Nusantara Thai Mining Services - - 342 1,288 PT. Centralink Wisesa International - - 124,062 107,007 PT. Indo Tambangraya Megah - - 11,598 29,374 PT. Trubaindo Coal Mining - - 88,903 51,603 PT. Barasentosa Lestari - - 3,911 1,086 PT. Indominco Mandiri - - 9,057 70,025 PT. Kitadin - - 64,586 37,973 BP Overseas Development Co., Ltd. - - 28,695 1,160 PT. Bharinto Ekatama - - 3,985 1,404 Banpu China Pte. Ltd. - - 232 - Associate Amata Power (Bien Hoa) Ltd. - 253 - - Other related parties 13,102 6,753 13,102 6,753 Total 13,102 7,006 450,254 445,164

Interest expenses Subsidiaries Universal Exploration Co., Ltd. - - 8,580 7,594 Banpu Power Ltd. - - 4,098 511 Banpu Power International Ltd. - - 41,667 3,558 Total - - 54,345 11,663

The pricing policies for transactions between subsidiaries, joint ventures, associates and related parties are set out below: The prices of sales and services charged to subsidiaries, joint ventures, associates and related parties approximate to those charged to third parties. Management fees between subsidiaries, joint ventures and associates are charged according to agreements. Sales of assets to subsidiaries, joint ventures and associates approximate to those charged to third parties. For loans, borrowings, interest income and interest expenses, the Company charges interest by considering to average cost of borrowings plus 0.5% per annum for local subsidiaries and plus 2% per annum for overseas subsidiaries.

A n n u a l R e p o r t 2 0 0 5 99 4.2 Amounts due from related parties as at 31 December comprise:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Trade accounts receivable Subsidiaries (Note 6) Banpu International Ltd. - - 207,139 47,499 Banpu Minerals Co., Ltd. - - - 15,848 Total - - 207,139 63,347

Interest receivable Subsidiaries Banpu Minerals Co., Ltd. - - 2,393 3,672 Banpu Singapore Pte. Ltd. - - 5,435 1,821 PT. Jorong Barutama Greston - - 109,439 54,242 PT. Nusantara Thai Mining Services - - 3,529 2,552 PT. Centalink Wisesa International - - 247,688 115,733 PT. Indo Tambangraya Megah - - 564 30,488 PT. Trubaindo Coal Mining - - 136,074 44,583 PT. Barasentosa Lestari - - 5,257 1,218 PT. Indominco Mandiri - - - 8,384 PT. Kitadin - - 95,223 32,963 BP Overseas Development Co., Ltd. - - 29,012 - PT. Bharinto Ekatama - - 5,472 1,354 Banpu China Pte. Ltd. - - 232 - Joint venture BLCP Power Ltd. 6,247 6,247 - - Associate Amata Power (Bien Hoa) Ltd. - 243 - - Other related parties 33,608 20,506 33,608 20,506 Total 39,855 26,996 673,926 317,516

Other receivable Subsidiaries Banpu Minerals (Singapore) Pte. Ltd. - - - 49,393 PT. Jorong Barutama Greston - - 13,058 165,380 PT. Nusantara Thai Mining Services - - 9,324 8,876 PT. Trubaindo Coal Mining - - 4,918 4,698 PT. Kitadin - - 78,447 112,150 Joint venture BLCP Power Ltd. 12,483 - - - Total 12,483 - 105,747 340,497 Total amounts due from related parties 52,338 26,996 779,673 658,013

100 B a n p u P u b l i c C o m p a n y L i m i t e d 4.3 Loans and advances to related parties as at 31 December comprise: a) Advances to related parties

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Advances Subsidiaries Banpu Minerals Co., Ltd. - - 762 10 Banpu Power Ltd. - - 779 81 Yen Bai Banpu Calcium Carbonate Co., Ltd. - - - 2,567 Banpu International Ltd. - - 1,401 451 Silamani Corp., Ltd. - - 49 - Chiang Muan Mining Co., Ltd. - - 21 21 Banpu Minerals (Singapore) Pte. Ltd. - - - 15,834 PT. Jorong Barutama Greston - - 141,115 133,479 PT. Nusantara Thai Mining Services - - 9,772 10,194 PT. Trubaindo Coal Mining - - 1,200 2,377 PT. Indominco Mandiri - - 664 931 PT. Kitadin - - 1,659 1,141 Synergy Power Co., Ltd. - - 527 527 BP Overseas Development Co., Ltd. - - 518 48 Promsin Co., Ltd. - - 49 - Silamani Marble Co., Ltd. - - 49 - Banpu Singapore Pte. Ltd. - - 5 - Banpu Coal Power Ltd. - - 49 - Banpu China Pte. Ltd. - - 28 - PT. Bharinto Ekatama - - 18 - Joint venture BLCP Power Ltd. 21 2,973 21 101 Total advances to related parties 21 2,973 158,686 167,762

b) Long-term loans to related parties

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Long-term loans Subsidiaries Banpu Minerals Co., Ltd. - - 746,375 975,375 Banpu Singapore Pte. Ltd. - - 77,206 73,499 PT. Jorong Barutama Greston - - 907,413 959,305 PT. Nusantara Thai Mining Services - - 8,415 8,011 PT. Centralink Wisesa International - - 2,150,026 2,046,917 PT. Indo Tambangraya Megah - - - 863,139

A n n u a l R e p o r t 2 0 0 5 101 C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Subsidiaries (continued) PT. Trubaindo Coal Mining - - 1,762,395 1,209,642 PT. Barasentosa Lestari - - 67,621 64,374 PT. Indominco Mandiri - - 409,826 439,972 PT. Kitadin - - 1,120,759 1,024,825 BP Overseas Development Co., Ltd. - - 1,213,156 - PT. Bharinto Ekatama - - 69,260 54,230 Banpu China Pte. Ltd. - - 7,449 - Associate Amata Power (Bien Hoa) Ltd. - 5,822 - - Other related company Aromatics (Thailand) Plc. 336,726 336,726 336,726 336,726 Total 336,726 342,548 8,876,627 8,056,015 Less: Current portion of long-term loan - - (1,906,924) (711,796) Total long-term loans to related parties 336,726 342,548 6,969,703 7,344,219

Consolidated As at 31 December 2005 long-term loan to other related party represents loan in Thai Baht amounting to THB 337 million (2004: Loans to associates and other related party of USD 0.15 million or equivalent to THB 6 million and THB 337 million) bearing interest at rates of 4.50% per annum (2004: 2.00% - 4.42% per annum). Company As at 31 December 2005 long-term loans to subsidiaries and other related parties represent loans in US Dollars of USD 183.94 million or equivalent to THB 7,538 million and in Thai Baht currency of THB 1,338 million (2004: USD 172 million or equivalent to THB 6,744 million and THB 1,312 million) bearing interest at rates of 2.50% - 9.71% per annum (2004: 1.00% - 9.71% per annum). Movement of long-term loans to related parties for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening balance 342,548 342,655 8,056,015 9,398,814 Increase for the year - - 3,081,080 3,573,982 Repayment for the year - - (2,591,541) (4,641,914) Reclassitation (5,822) - - - Adjustment from exchange rate - (107) 331,073 (274,867) Ending balance 336,726 342,548 8,876,627 8,056,015

102 B a n p u P u b l i c C o m p a n y L i m i t e d 4.4 Investments in subsidiaries, join ventures and associated companies a) List of subsidiaries, joint ventures and associated companies and percentage of shareholding consist of:

Percentage of Direct Shareholding Name of Company Country Business 2005 2004 %% Direct shareholding Banpu Minerals Co., Ltd. Thailand Coal mining and trading 99.99 99.99 Universal Exploration Co., Ltd. Thailand Drilling & exploration 99.99 99.99 Banpu Power Ltd. Thailand Investment in power 99.99 99.99 (5) Yen Bai Banpu Calcium Carbonate Vietnam CaCo3 production and trade - 66.66 Co., Ltd. BP Overseas Development Co., Ltd. British Virgin Islands Investment in coal mining 100.00 100.00 and trading Banpu China Pte. Ltd. (formerly named Singapore Investment in power 100.00 (2) - “Banpu Power Vietnam 1 Pte. Ltd.”)

Indirect shareholding Banpu Minerals Co., Ltd. Subsidiary companies are as follows: 1. Ban-Sa Mining Co., Ltd. Thailand Investment in coal mining 98.87 (4) 89.18 and trading Subsidiary company is as follow: 1.1 Chiang Muan Mining Co., Ltd. Thailand Coal mining and trading 51.00 51.00 2. Banpu International Ltd. Thailand Coal trading 99.99 99.99 3. Silamani Corp., Ltd. Thailand Coal trading 99.99 99.99 4. Edifice Engineering Co., Ltd. Thailand Coal ash management - (1) 99.99 5. Chiang Muan Mining Co., Ltd. Thailand Coal mining and trading 49.00 49.00 6. Silamani Marble Co., Ltd. Thailand Coal trading 99.96 99.96 7. Banpu Singapore Pte. Ltd. Singapore Coal trading 100.00 100.00 8. Banpu Minerals (Singapore) Pte. Ltd. Singapore Coal trading 100.00 100.00 Subsidiary companies are as follows: 8.1 PT. Jorong Barutama Greston Indonesia Coal mining and trading in Indonesia 95.00 95.00 8.2 PT. Nusantara Thai Mining Services Indonesia Mining related services in Indonesia 95.00 95.00

(1) At the Extraordinary Meeting of shareholders of Edifice Engineering Co., Ltd., a subsidiary, on 25 January 2005 which was confirmed by the Extraordinary Meeting of shareholders on 15 February 2005, the shareholders passed a resolution to liquidate the company on 25 January 2005 and registered the liquidation with the Ministry of Commerce on 16 February 2005. (2) On 31 March 2005, the Extraordinary Meeting of shareholders of Banpu Power Vietnam 1 Pte. Ltd. passed a resolution to approve the change of the company name to be “Banpu China Pte. Ltd.” and in the year, Banpu Power Ltd. sold such investment to the Company at net book value of THB 51.60 million. Moreover, the Company additionally invested in such company amounting to THB 289.94 million. (4) During the year 2005, the Group additionally invested in Ban-Sa Mining Co., Ltd. by acquiring the 9.69% of its capital in the amount of THB 7 million. As a result, the proportion of investment was increased to be 98.87%. (5) During the year 2005, the Group sold the investment in Yen Bai Banpu Calcium Carbonate Co., Ltd. at a selling price of USD 4.56 million or equivalent to THB 186.65 million. The Group recorded a gain from this disposal of THB 106.05 million under the equity method in the statement of income.

A n n u a l R e p o r t 2 0 0 5 103 Percentage of Direct Shareholding Name of Company Country Business 2005 2004 %% 8.3 PT. Centralink Wisesa International Indonesia Investment in coal 95.00 95.00 Subsidiary company is as follow: 8.3.1 PT. Indo Tambangraya Indonesia Investment in coal 99.99 99.99 Megah Subsidiary companies are as follows: 8.3.1.1 PT. Trubaindo Coal Indonesia Coal mining and trading in Indonesia 90.00 90.00 Mining 8.3.1.2 PT. Barasentosa Indonesia Coal mining and trading in Indonesia 100.00 100.00 Lestari 8.3.1.3 PT. Indominco Mandiri Indonesia Coal mining and trading in Indonesia 99.99 99.99 8.3.1.4 PT. Kitadin Indonesia Coal mining and trading in Indonesia 99.99 99.99 8.3.1.5 PT. Bharinto Ekatama Indonesia Coal mining and trading in Indonesia 99.00 99.00

Universal Exploration Co., Ltd. Subsidiary company is as follow: 1. Promsin Co., Ltd. Thailand Real estate development 99.99 99.99

BP Overseas Development Co., Ltd. Associated company is as follow: 1. Asian American Coal Inc. People’s Republic Investment in coal mining and power 22.21 (6) - of China

Banpu Power Ltd. Subsidiary, joint ventures and associated companies are as follows: 1. Banpu Coal Power Ltd. Thailand Investment in power 2.34 2.34 Joint venture company is as follow: 1.1 BLCP Power Ltd. Thailand Power production and trading 35.00 35.00 2. Banpu China Pte. Ltd. (formerly named “Banpu Power Vietnam 1 Pte. Ltd.”) Singapore Investment in power - (2) 100.00 Associated company is as follow: 2.1 Amata Power (Bien Hoa) Ltd. Vietnam Power production and trading - (3) 30.00

(2) On 31 March 2005, the Extraordinary Meeting of shareholders of Banpu Power Vietnam 1 Pte. Ltd. passed a resolution to approve the change of the company name to be “Banpu China Pte. Ltd.” and in the year, Banpu Power Ltd. sold such investment to the Company at net book value of THB 51.60 million. Moreover, the Company additionally invested in such company amounting to THB 289.94 million. (3) During the year 2005, the Group sold the investment in Amata Power (Bien Hoa) Ltd. at a selling price of USD 1.37 million or equivalent to THB 53 million. The Group recorded a gain from this disposal of THB 26.70 million under the equity method in the statement of income. (6) During the year 2005, the Group additionally invested in Asian American Coal Inc. amount of USD 29.87 million or equivalent of THB 1,199 million. As a result, the proportion of investment was increased to be 22.21% and the Group has significant influence in such associate. In this respect, the Group has reclassified the investment in Asian American Coal Inc. from other investments to investment in associate (Note 9).

104 B a n p u P u b l i c C o m p a n y L i m i t e d Percentage of Direct Shareholding Name of Company Country Business 2005 2004 %% 3. Banpu Power International Ltd. Mauritius Islands Investment in power 100.00 100.00 Subsidiary and joint venture company are as follows: 3.1 Synergy Power Co., Ltd. Mauritius Islands Investment in power 99.99 99.99 Subsidiary and joint venture companies are as follows: 3.1.1 Banpu Coal Power Ltd. Thailand Investment in power 97.66 97.66 3.1.2 BLCP Power Ltd. Thailand Power production and trading 15.00 15.00 4. Power Generation Services Co., Ltd. Thailand Operating power plant service 40.00 40.00

b) Book values of investments in direct subsidiaries, joint ventures and associated companies are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Subsidiaries Banpu Minerals Co., Ltd. - - 39,994 39,994 Universal Exploration Co., Ltd. - - 778,931 778,931 Banpu Power Ltd. - - 2,000,000 2,000,000 Yen Bai Banpu Calcium Carbonate Co., Ltd. - - - 73,946 BP Overseas Development Co., Ltd. - - 606,566 606,566 Banpu China Pte. Ltd. - - 341,540 -

Joint ventures BLCP Power Ltd. 740,064 740,064 - - Power Generation Services Co., Ltd. 4,000 - - -

Associates Amata Power (Bien Hoa) Ltd. - 58,606 - - Asian American Coal Inc. 1,783,222 - - - Investments in subsidiaries, joint ventures and associated companies - cost method 2,527,286 798,670 3,767,031 3,499,437 Add (Less) Take to equity account (353,322) (261,223) 10,699,191 7,777,843 Investments in subsidiaries, joint ventures and associated companies - equity method 2,173,964 537,447 14,466,222 11,277,280

A n n u a l R e p o r t 2 0 0 5 105 Movement of investments in direct subsidiaries, joint ventures and associated companies for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening balance 537,447 532,544 11,277,280 7,885,668 Addition of investment - - 341,540 606,566 Fair value adjustments taken up in equity of available-for-sale securities of subsidiaries, joint ventures and associates - - 252,434 964,596 Reclassification 1,787,222 - - - Adjustment of exchange rate (4,803) (17,909) (18,057) (105,300) Dividends received - - (203,351) (8,800) Disposal of investments (26,553) (43,124) (80,595) - Add (Less) Take to equity account (119,349) (28,294) 2,890,273 1,941,243 Realised gain - 94,230 6,698 - Unrealised gain on sale of assets to related party - - - (6,693) Ending balance 2,173,964 537,447 14,466,222 11,277,280

As at 31 December 2005, under the condition of loan for project finance, the Company uses its investment in two subsidiaries and a joint venture with a cost of THB 1,198.2 million (2004: THB 1,198.2 million), as collateral for a long-term loans from financial institutions of that joint venture company.

4.5 Trade accounts payable, advances and long-term loans from related parties a) Trade accounts payable and advances from related parties:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Advances Subsidiaries Banpu Minerals Co., Ltd. - - 210 176 PT. Indominco Mandiri - - 1,114 - PT. Nusantara Thai Mining Services - - 1,015 1,015 Banpu Power Ltd. - - 8 - Banpu Power International Ltd. - - 3,693 3,513 Total advances from related parties - - 6,040 4,704

Trade accounts payable (*) Subsidiary PT. Jorong Barutama Greston - - - 60,702 Total trade accounts payable - - - 60,702

(*) As of 31 December 2004 amounts due to a subsidiary amounting to THB 60.70 million is trade accounts payable which presented as trade accounts payable.

106 B a n p u P u b l i c C o m p a n y L i m i t e d b) Long-term loans from related parties:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Subsidiaries Universal Exploration Co., Ltd. - - 594,250 594,250 Banpu Power Ltd. - - 252,753 394,000 Banpu Power International Ltd. - - 2,885,824 2,885,824 Total long-term loans from related parties - - 3,732,827 3,874,074

Company As at 31 December 2005, the long-term loans from related parties represent Thai Baht currency loan amounting to THB 3,733 million (2004: THB 3,874 million) bearing interest at the rate of 2.50% per annum (2004: 1.00% per annum). Movement of long-term loans from related parties for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening balance - - 3,874,074 747,769 Increase for the year - - - 3,310,599 Repayment for the year - - (141,247) (184,294) Closing balance - - 3,732,827 3,874,074

5 . C a s h a n d c a s h e q u i v a l e n t s

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Cash on hand 824 940 659 151 Deposit held at call with banks 6,423,999 3,345,378 5,117,889 1,374,627 Bills of exchange 2,705,933 2,675,000 2,499,933 2,650,000 Total cash and cash equivalents 9,130,756 6,021,318 7,618,481 4,024,778

The effective interest rate on deposit held at call with banks was 0.25% - 2.00% per annum (2004: 0.25% - 1.25% per annum). Bills of exchange are denominated in Thai Baht currency with a maturity of 90 days. The bills of exchange carry interest at the rate of 2.75% - 4.01% per annum (2004: 4.35% per annum).

A n n u a l R e p o r t 2 0 0 5 107 6 . T r a d e a c c o u n t s r e c e i v a b l e , n e t Consist of:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Trade accounts receivable Subsidiaries (Note 4.2) - - 207,139 63,347 Third parties 2,569,318 2,195,119 429,747 478,302 2,569,318 2,195,119 636,886 541,649 Less Allowance for doubtful accounts (168,950) (189,559) (134,966) (155,575) Trade accounts receivable, net 2,400,368 2,005,560 501,920 386,074

Trade accounts receivable balance is aged as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Trade accounts receivable under credit term 1,396,432 1,831,303 481,284 374,599 Aging of trade accounts receivable due for payment Less than 3 months 997,457 31,668 14,907 6,725 Over 3 months but less than 6 months 1,389 26 640 18 Over 6 months but less than 12 months 356 40,858 356 4 Over 12 months 18,047 115,017 5,739 5,733 Trade debtor under the Central Bankruptcy Court 155,637 176,247 133,960 154,570 Total trade accounts receivable 2,569,318 2,195,119 636,886 541,649 Less Allowance for doubtful accounts (168,950) (189,559) (134,966) (155,575) Trade accounts receivable, net 2,400,368 2,005,560 501,920 386,074

7 . I n v e n t o r i e s , n e t

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Finished goods 1,663,868 769,331 420,761 367,504 Less Allowance for obsolescence (3,235) (3,235) - - Inventory, net 1,660,633 766,096 420,761 367,504

108 B a n p u P u b l i c C o m p a n y L i m i t e d 8 . O t h e r c u r r e n t a s s e t s

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Prepayments 815,015 425,086 134,132 133,376 Advances for business 325,379 102,156 18,984 17,502 Value added tax 133,683 29,510 2,352 2,010 Withholding tax 85,288 95,199 52,504 63,257 Accounts receivable - others 183,635 156,701 4,835 25,072 Accrued income 10,720 28,507 10,113 26,757 Advances 8,863 62,719 354 - Forward and currency swap contracts receivable - 196,338 - 196,338 Total other current assets 1,562,583 1,096,216 223,274 464,312

9 . O t h e r i n v e s t m e n t s , n e t

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Investments in other companies: Investments in available-for-sale securities 3,509,468 3,742,528 4,333,114 4,477,685 General investments 638,619 942,324 120,413 129,462 Total investments in other companies 4,148,087 4,684,852 4,453,527 4,607,147 Add Adjustment to fair value for investments in available-for-sale securities 6,916,482 10,543,668 1,565,806 5,445,427 Less Allowance for impairment - general investments (192,707) (192,707) (29,007) (29,007) Other investments, net 10,871,862 15,035,813 5,990,326 10,023,567

Consolidated As at 31 December 2005, general investments included first contribution in joint venture for 40% of shareholding of Hebi Zhong Tai Mining Co., Ltd., incorporated in the People’s Republic of China, amounting to RMB 60 million or equivalent to THB 304.17 million. However, as at 31 December 2005, the Group has not had the joint control in such company (see Note 27).

A n n u a l R e p o r t 2 0 0 5 109 Movements of other investments for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening net book value 15,035,813 16,436,760 10,023,567 8,719,424 Acquisitions 1,587,664 307,742 82,560 3,981,269 Disposals (337,207) (269,337) (236,180) (163,220) Transfer (1,787,222) 103,067 - - Transfer from other assets - 6,891 - - Changes in fair value of investments (3,627,186) (1,549,310) (3,879,621) (2,513,906) Closing net book value 10,871,862 15,035,813 5,990,326 10,023,567

1 0 . P r o p e r t y , p l a n t a n d e q u i p m e n t , n e t

THB Thousand C o n s o l i d a t e d

Land Machinery Furniture Construc- improve- & & office tion in Land ment Building equipment equipment Tools Vehicle progress Total

As at 31 December 2004 Cost 128,878 375,140 2,665,291 6,070,994 421,500 171,805 121,659 2,644,336 12,599,603 Less Accumulated depreciation - (211,323) (991,631) (2,818,340) (294,125) (73,602) (86,034) - (4,475,055) Allowance for impairment (405) ------(405) Net book amount 128,473 163,817 1,673,660 3,252,654 127,375 98,203 35,625 2,644,336 8,124,143

Year ended 31 December 2005 Opening net book amount 128,473 163,817 1,673,660 3,252,654 127,375 98,203 35,625 2,644,336 8,124,143 Additions - 2,532 9,304 371,220 134,830 91,850 41,710 2,511,628 3,163,074 Disposals - Net book value (5,721) (145) (26,692) (24,853) (8,586) (21) (3,337) (409) (69,764) Transfer of net assets Transfer to other assets --(143) (20,760) (283) (110) (139) 241 (21,194) Reclassification of fixed assets - (2,789) 2,169 18,126 (50) 2,644 - (14,577) 5,523 Transfer from construction in progress -1,811,446 347,398 1,310,367 6,382 45,600 (2,925) (3,518,268) - Adjustment of exchange rate (65) 5,865 75,853 152,721 3,797 4,813 1,395 133,123 377,502 Depreciation charge - (103,157) (166,336) (505,680) (52,841) (34,155) (14,429) - (876,598) Closing net book amount 122,687 1,877,569 1,915,213 4,553,795 210,624 208,824 57,900 1,756,074 10,702,686

As at 31 December 2005 Cost 123,092 2,197,693 3,092,417 7,914,510 553,791 313,238 136,867 1,756,074 16,087,682 Less Accumulated depreciation - (320,124) (1,177,204) (3,360,715) (343,167) (104,414) (78,967) - (5,384,591) Allowance for impairment (405) ------(405) Net book amount 122,687 1,877,569 1,915,213 4,553,795 210,624 208,824 57,900 1,756,074 10,702,686

110 B a n p u P u b l i c C o m p a n y L i m i t e d THB Thousand C o m p a n y

Land Machinery Furniture Construc- improve- & & office tion in Land ment Building equipment equipment Tools Vehicle progress Total

As at 31 December 2004 Cost 64,383 107,205 259,151 760,054 196,139 46,117 47,985 2,356 1,483,390 Less Accumulated depreciation - (64,071) (102,820) (543,209) (145,617) (43,551) (42,054) - (941,322) Net book amount 64,383 43,134 156,331 216,845 50,522 2,566 5,931 2,356 542,068

Year ended 31 December 2005 Opening net book amount 64,383 43,134 156,331 216,845 50,522 2,566 5,931 2,356 542,068 Additions --900 10,797 22,704 411 14,000 14,110 62,922 Disposals - Net book value - (145) (1,758) (599) (28) (13) (610) (279) (3,432) Transfer of net assets Transfer to other assets ---(11,220) (89) (110) 34 (238) (11,623) Transfer from construction in progress - 123 (1,172) 11,438 2,788 110 - (7,764) 5,523 Depreciation charge - (8,365) (19,649) (64,323) (17,554) (1,057) (4,298) - (115,246) Closing net book amount 64,383 34,747 134,652 162,938 58,343 1,907 15,057 8,185 480,212

As at 31 December 2005 Cost 64,383 99,728 250,412 753,685 213,278 42,737 42,307 8,185 1,474,715 Less Accumulated depreciation - (64,981) (115,760) (590,747) (154,935) (40,830) (27,250) - (994,503) Net book amount 64,383 34,747 134,652 162,938 58,343 1,907 15,057 8,185 480,212

Consolidated As at 31 December 2005, fixed assets of overseas subsidiaries amounting to USD 57 million or equivalent to THB 2,223 million (2004: USD 47.28 million or equivalent to THB 1,849 million) have been used as collateral for a long-term loan in accordance with a project financing loan agreement (Note 17). During 2005, borrowing cost of USD 0.73 million or equivalent to THB 29 million (2004: USD 2.68 million or equivalent to THB 105 million) arising from financing specifically entered into for the costs of construction in progress of an overseas subsidiary and are included in “Additions”. Land with net book value of THB 30.40 million of the three subsidiaries (2004: THB 36.12 million) has not been in operation. However, management has already considered the adequacy of its allowance for impairment.

A n n u a l R e p o r t 2 0 0 5 111 1 1 . D e f e r r e d o v e r b u r d e n e x p e n s e s , n e t

C o n s o l i d a t e d C o m p a n y THB Thousand THB Thousand

As at 31 December 2004 Cost 7,790,539 3,995,102 Less Accumulated amortisation (6,353,538) (3,267,116) Net book amount 1,437,001 727,986

Year ended 31 December 2005 Opening net book amount 1,437,001 727,986 Additions 2,044,087 365,266 Amortisation (1,824,558) (592,515) Reclassification (26,183) - Adjustment of exchange rate 22,631 - Closing net book amount 1,652,978 500,737

As at 31 December 2005 Cost 9,831,074 4,360,368 Less Accumulated amortisation (8,178,096) (3,859,631) Net book amount 1,652,978 500,737

1 2 . M i n i n g p r o p e r t y r i g h t s , n e t Movement of mining property rights for the years ended 31 December are as follows:

C o n s o l i d a t e d 2005 2004 THB Thousand THB Thousand Opening net book amount 1,881,125 1,307,339 Increase from investment in a subsidiary - 496,957 Amortisation (34,964) (24,113) Adjustment of exchange rate 116,540 100,942 Closing net book amount 1,962,701 1,881,125

112 B a n p u P u b l i c C o m p a n y L i m i t e d 1 3 . P r o j e c t s u n d e r d e v e l o p m e n t Movement of projects under development for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening balance 1,019,142 576,907 113,968 209,959 Additions 288,728 681,461 151,543 169,267 Reclassification (206,889) - - - Write-off (77,520) (266,296) (60,820) (265,258) Adjustment of exchange rate 28,946 27,070 - - Closing balance 1,052,407 1,019,142 204,691 113,968

1 4 . O t h e r n o n - c u r r e n t a s s e t s

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Advance for business - land compensation for development of coal mine 544,170 584,090 - - Machinery and spare parts pending for disposal 243,115 249,588 243,115 249,588 Others 295,719 188,160 12,112 9,595 Total other non-current assets 1,083,004 1,021,838 255,227 259,183

Machinery and spare part at the net book value of THB 243.12 million (2004: THB 249.59 million) have not been in use and pending for disposal. However, the company’s management has already considered the adequacy of its allowance for impairment.

1 5 . B a n k o v e r d r a f t s a n d l o a n s f r o m b a n k s a n d f i n a n c i a l i n s t i t u t i o n s Bank overdrafts and loans from banks and financial institutions comprise:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Bank overdrafts 2,979 11,197 2,970 11,196 Loans from banks and financial institutions 1,309,381 584,117 1,074,657 544,915 Total 1,312,360 595,314 1,077,627 556,111

A n n u a l R e p o r t 2 0 0 5 113 Consolidated As of 31 December 2005, loans from banks and financial institutions are in US Dollars from several commercial banks amounting to USD 32.60 million or equivalent to THB 1,309 million (2004: USD 14.90 million or equivalent to THB 584 million). The loans bear interest at the average rate of 4.84% - 8.23% per annum (2004: 3.11% - 5.30% per annum) and are repayable in 1 - 6 months (2004: 1 - 6 months).

Company As of 31 December 2005, loans from banks and financial institution are in US Dollars from several commercial banks amounting to USD 26.10 million or equivalent to THB 1,075 million (2004: USD 13.90 million or equivalent to THB 544 million). The loans bear interest at the average rate of 4.84% - 5.62% per annum (2004: 3.11% - 3.60% per annum) and are repayable in 1 - 6 months (2004: 1 - 6 months).

1 6 . O t h e r c u r r e n t l i a b i l i t i e s

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Accrued liabilities 447,718 416,446 128,212 134,906 Other accounts payable 699,087 303,235 15,031 12,104 Export tax payable 199,222 - - - Withholding tax payable 189,046 179,265 8,957 8,328 Value added tax payable 181,531 64,056 13,555 5,413 Retention payable 9,112 2,974 8,333 1,805 Unearned income 2,150 7,635 2,150 6,027 Forward and currency swap contracts payable 111,528 - 111,528 - Others 59,925 31,042 28,950 28,675 Total other current liabilities 1,899,319 1,004,653 316,716 197,258

Consolidated Major accrued liabilities and other accounts payable represent liabilities arising from project under development and construction in progress of overseas subsidiaries.

1 7 . L o n g - t e r m l o a n s , n e t

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Thai Baht loans 400,180 910,810 400,000 910,000 Foreign currency loans 2,035,055 1,412,838 - - Less Deferred financing service fee (500) (1,200) (500) (1,200) Total 2,434,735 2,322,448 399,500 908,800 Less Current portion of long-term loans (1,191,610) (846,341) (300,000) (510,000) Long-term loans, net 1,243,125 1,476,107 99,500 398,800

114 B a n p u P u b l i c C o m p a n y L i m i t e d Thai Baht loans As at 31 December, the major Baht loans are long-term loans from local banks and financial institutions which are ummarized as follows:

Contract Amount 31 December Interest rate (THB Million) Repayment terms and conditions Repayment term No. per annum 2005 2004 (%) 1 200 300 4.25 - 5.95 Repayable in 5 installments every 12 months 25 January 2003 - of THB 100 million each 25 January 2007 2 - 50 5.15 Repayable in 5 installments every 6 months 6 December 2002 - of THB 50 million each 6 June 2005 3 200 400 4.50 - 6.00 Repayable in 9 installments every 6 months 30 December 2002 - 30 December 2006 4 - 80 3.70 - 5.00 Repayable in 8 installments every 6 months 25 January 2002 - of THB 40 million each 25 July 2005 5 - 80 3.70 - 5.00 Repayable in 8 installments every 6 months 25 January 2002 - of THB 40 million each 25 July 2005 Total 400 910

Foreign currency loans As at 31 December 2005, long-term foreign currency loans comprise: Loans of an overseas subsidiary amounting to USD 49.43 million or equivalent to THB 2,035 million (2004: USD 34.5 million or equivalent to THB 1,352 million) from 3 Thai banks carrying interest at the rate of LIBOR + 4% per annum payable on a quarterly basis (2004: LIBOR + 4% per annum). Principal is repayable in 7 installments, every 6 months starting from 30 December 2005. The loan is secured by assets of a subsidiary according to project financing loan agreements (Note 10). As at 31 December 2005, loan of an overseas subsidiary from an overseas bank has no outstanding balance (2004: USD 0.6 million or equivalent to THB 21 million carring interest at the rate of SIBOR 6 month + 1.50% per annum with the principal repayable in 7 installments, annually starting from 2002. The loan was mortgaged by the subsidiary’s assets (Note 10)), and As at 31 December 2005, loan of an overseas subsidiary from a financial institution has no outstanding balance (2004: USD 1 million or equivalent to THB 39 million carring interest at the rate of LIBOR + 1.8% per annum. Principal was repayable in 14 installments, every 6 months, starting from 1 April 1997. The loan was secured by assets of a subsidiary according to project financing loan agreements (Note 10)). Movement in long-term loans for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening balance 2,322,448 1,658,964 908,800 1,515,249 Additional loans 874,439 1,353,530 - - Repayment of loans (862,194) (699,081) (510,000) (610,000) Amortisation of deferred financing service fee 700 3,551 700 3,551 Adjustment from exchange rate 99,342 5,484 - - Closing balance 2,434,735 2,322,448 399,500 908,800

A n n u a l R e p o r t 2 0 0 5 115 1 8 . D e b e n t u r e s , n e t

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Local debentures 12,854,126 8,173,542 12,854,126 8,173,542 Less Deferred financing service fee (34,179) (23,792) (34,179) (23,792) Total 12,819,947 8,149,750 12,819,947 8,149,750 Less Current portion of debentures (504,126) (319,417) (504,126) (319,417) Debentures, net 12,315,821 7,830,333 12,315,821 7,830,333

Maturity of debentures are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Within 1 year 504,126 319,417 504,126 319,417 Between 2 years and 5 years 8,350,000 5,154,125 8,350,000 5,154,125 Over 5 years 4,000,000 2,700,000 4,000,000 2,700,000 Total 12,854,126 8,173,542 12,854,126 8,173,542

The interest rate on the debentures of the Group are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand at fixed rates 11,404,126 7,673,542 11,404,126 7,673,542 at floating rates 1,450,000 500,000 1,450,000 500,000 Total 12,854,126 8,173,542 12,854,126 8,173,542

Movement in debentures for the years ended 31 December are as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Opening balance 8,149,750 6,647,828 8,149,750 6,647,828 Issue of debentures 5,000,000 2,000,000 5,000,000 2,000,000 Repayment of debentures (319,418) (499,818) (319,418) (499,818) Additional deferred financing service fee (17,659) (6,134) (17,659) (6,134) Amortisation of deferred financing service fee 7,274 7,874 7,274 7,874 Closing balance 12,819,947 8,149,750 12,819,947 8,149,750

116 B a n p u P u b l i c C o m p a n y L i m i t e d Debentures issued in 2005 represent Banpu # 11 debenture THB 5,000 million. The terms of issue are summarised below: Local debenture comprise:

Bond BANPU # 4 BANPU # 5 BANPU # 6 BANPU # 7 BANPU #8 Description (Value THB 750 million) (Value THB 2,500 million) (Value THB 500 million) (Value THB 3,000 million) (Value THB 2,000 million)

Type Senior, unsecured Senior, unsecured Senior, unsecured Senior, unsecured Senior, unsecured and amortising and amortising and amortising and amortising and amortising debentures. debentures. debentures. debentures. debentures. Category Specifying name Specifying name Specifying name Specifying name Specifying name Total offering THB 750 million THB 2,500 million THB 500 million THB 3,000 million THB 2,000 million price Issue amount 750,000 Units 2,500,000 Units 500,000 Units 3,000,000 Units 2,000,000 Units Par value THB 1,000 THB 1,000 THB 1,000 THB 1,000 THB 1,000 Offering price THB 1,000 THB 1,000 THB 1,000 THB 1,000 THB 1,000 per unit Coupon rate Interest rate shall be 5.80% per annum Interest rate shall be 2.95% per annum 3.65% per annum per annum average rate MLR average rate MLR from 4 Commercial from 4 Commercial Banks - 0.25% Banks - 0.375% per annum. per annum. Interest paid Twice a year Twice a year Twice a year Twice a year Twice a year Life 5 years 5 years 7 years 5 years 7 years Issue date 3 November 1999 4 April 2001 4 April 2001 3 February 2003 15 September 2003 Maturity date 3 November 2004 Principal to be Principal to be Principal to be Principal to be of bond amortised debentures amortised debentures amortised debentures amortised debentures with maturity on with maturity on with maturity on with maturity on the final redemption the final redemption the final redemption the final redemption date of 4 April 2006. date of 4 April 2008. of 3 February 2008. of 15 September 2010. Redemption right N.A. N.A. N.A. N.A. N.A. of bond holder prior to maturity (Put option) Redemption right N.A. N.A. N.A. N.A. N.A. of bond issuer prior to maturity (Call option)

A n n u a l R e p o r t 2 0 0 5 117 Bond BANPU # 4 BANPU # 5 BANPU # 6 BANPU # 7 BANPU #8 Description (Value THB 750 million) (Value THB 2,500 million) (Value THB 500 million) (Value THB 3,000 million) (Value THB 2,000 million)

Principal At end of year 4, Principal to be Principal to be Principal to be Principal to be repayment prior principal payment amortized debentures amortized debentures amortized debentures amortized debentures to maturity amount of THB in the amount of in the amount of in the amount of in the amount of of redemption 250 per unit, THB 100 per unit THB 100 per unit THB 250 per unit THB 200 per unit per unit the remaining every 6-month of debenture of debenture of debenture shall be paid on commencing every 6-month commencing from commencing from maturity. from the date of commencing interest period interest period 4 October 2002 from the date of 7 - 10. 10 - 14. until 4 October 4 October 2005 2005; the remaining until 4 October shall be paid on 2007; the remaining maturity. shall be paid on maturity. Redemption price THB 750 THB 300 THB 500 THB 250 THB 200 per unit at maturity Secondary market The debentures are The debentures are The debentures are The debentures are The debentures are registered in Thai registered in Thai registered in Thai registered in Thai registered in Thai Bond Dealing Centre. Bond Dealing Centre. Bond Dealing Centre. Bond Dealing Centre. Bond Dealing Centre.

Bond BANPU # 9 BANPU # 10 BANPU # 11 Series 1 BANPU # 11 Series 2 BANPU # 11 Series 3 Description (Value THB 1,500 million) (Value THB 500 million) (Value THB 1,500 million) (Value THB 1,000 million) (Value THB 2,500 million)

Type Senior, unsecured Senior, unsecured Senior, unsecured Senior, unsecured Senior, unsecured and amortising and amortising and amortising and amortising and amortising debentures. debentures. debentures. debentures. debentures. Category Specifying name Specifying name Specifying name Specifying name Specifying name Total offering THB 1,500 million THB 500 million THB 1,500 million THB 1,000 million THB 2,500 million price Issue amount 1,500,000 Units 500,000 Units 1,500,000 Units 1,000,000 Units 2,500,000 Units Par value THB 1,000 THB 1,000 THB 1,000 THB 1,000 THB 1,000 Offering price THB 1,000 THB 1,000 THB 1,000 THB 1,000 THB 1,000 per unit Coupon rate 4.80% per annum 4.00% per annum 7.27% per annum Reference interest 8.00% per annum per annum rate + 0.90% per annum Interest paid Twice a year Twice a year Twice a year Twice a year Twice a year Life 6 years and 5 years and 5 years from 5 years from 10 years from 11 months from 1 month from issue date issue date issue date issue date issue date Issue date 16 February 2004 16 February 2004 16 November 2005 16 November 2005 16 November 2005

118 B a n p u P u b l i c C o m p a n y L i m i t e d Bond BANPU # 9 BANPU # 10 BANPU # 11 Series 1 BANPU # 11 Series 2 BANPU # 11 Series 3 Description (Value THB 1,500 million) (Value THB 500 million) (Value THB 1,500 million) (Value THB 1,000 million) (Value THB 2,500 million)

Maturity date 13 January 2011 16 March 2009 16 November 2010 16 November 2010 16 November 2015 of bond Redemption right N.A. N.A. N.A. N.A. N.A. of bond holder prior to maturity (Put option) Redemption right N.A. N.A. N.A. N.A. N.A. of bond issuer prior to maturity (Call option) Principal The principal The principal The principal The principal The principal repayment prior shall be paid on shall be paid on shall be paid on shall be paid on shall be paid on to maturity maturity. maturity. maturity. maturity. maturity. of redemption per unit Redemption THB 1,000 THB 1,000 THB 1,000 THB 1,000 THB 1,000 price per unit at maturity Secondary market The debentures are The debentures are The debentures are The debentures are The debentures are registered in Thai registered in Thai registered in Thai registered in Thai registered in Thai Bond Dealing Centre. Bond Dealing Centre. Bond Dealing Centre. Bond Dealing Centre. Bond Dealing Centre.

Local debentures are required to comply with certain procedures and conditions: for example, maintaining net value of shareholders’ equity, maintaining debt to equity ratio, maintaining ratio of debt coverage and trading debt with security guarantee not exceeding a limited amount.

1 9 . S h a r e c a p i t a l Issued and paid-up share capital

Number of Ordinary shares Premium Total shares THB Thousand THB Thousand THB Thousand

As at 31 December 2003 270,274,781 2,702,748 5,020,266 7,723,014 Issued shares 1,473,074 14,731 38,063 52,794 As at 31 December 2004 271,747,855 2,717,479 5,058,329 7,775,808 Issued shares ---- As at 31 December 2005 271,747,855 2,717,479 5,058,329 7,775,808

As at 31 December 2005, there are 271,747,855 issued and paid up ordinary shares (2004: 271,747,855 shares) at par value of THB 10 per share (2004: THB 10 per share). All issued shares are fully paid-up.

A n n u a l R e p o r t 2 0 0 5 119 2 0 . O p e r a t i n g p r o f i t The following expenditure items, classified by nature, have been charged in arriving at operating profit:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Staff costs 2,035,658 1,310,413 322,545 311,004 Net (gain) loss on exchange rate 116,964 6,146 (85,590) 54,822 Depreciation on property, plant and equipment 859,928 449,718 58,508 55,924 Amortisation 1,904,282 991,560 600,489 380,195 Operating leases 855,661 526,231 39,544 40,735

2 1 . E a r n i n g s p e r s h a r e Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year.

C o n s o l i d a t e d a n d C o m p a n y

For the year ended 31 December 2005

Income available Ordinary shares Per share THB Thousand Thousand shares THB

Basic earnings per share Net profit available to ordinary shareholders 5,564,851 271,748 20.48

C o n s o l i d a t e d a n d C o m p a n y

For the year ended 31 December 2004

Income available Ordinary shares Per share THB Thousand Thousand shares THB

Basic earnings per share Net profit available to ordinary shareholders 3,644,939 271,688 13.42

There are no potential dilutive shares in issue for the years ended 31 December 2005 and 2004.

120 B a n p u P u b l i c C o m p a n y L i m i t e d 2 2 . S e g m e n t s

C o n s o l i d a t e d For the year ended 31 December 2005 For the year ended 31 December 2004

Elimination Elimination Coal and Minerals Trading Sector entries Total Coal and Minerals Trading Sector entries Total

Thailand Indonesia Total Thailand Indonesia Total THB THB THB THB THB THB THB THB THB THB Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand Thousand

Net sales 6,143,648 21,906,152 28,049,800 (2,841,116) 25,208,684 4,375,623 14,812,085 19,187,708 (1,961,033) 17,226,675 Gross profit 381,847 4,996,732 5,378,579 18,215 5,396,794 147,346 2,616,254 2,763,600 10,816 2,774,416 Other income 818,786 283,669 Gain on disposal of investments 2,718,922 2,445,594 Net loss from exchange rate (116,964) (6,146) Interest expenses and other financial expenses (729,693) (552,712) Corporate income tax (2,217,481) (1,204,148) Net profit from operation 5,870,364 3,740,673 Plus (less) Share of loss of joint ventures and associates (119,349) (28,294) Net profit of minority interest (186,164) (67,440) Net profit 5,564,851 3,644,939

Total assets used in business sectors 559,313 10,233,355 10,792,668 (89,982) 10,702,686 741,540 7,443,096 8,184,636 (60,493) 8,124,143 Total common assets 34,385,706 31,414,227 Total assets 45,088,392 39,538,370

A n n u a l R e p o r t 2 0 0 5 121 2 3. D i v i d e n d s At an Annual General shareholders’ Meeting on 27 April 2005, the shareholders approved a payment of the dividend of 2004 of THB 3.25 per share and at the Board of Directors’ Meeting on 31 August 2005 and 28 September 2005, the meetings approved payment of interim dividend of 2005 of THB 3.50 per share and THB 5 per share, respectively of 271,747,855 shares, totalling of THB 3,192 million which paid on 11 May 2005, on 29 September 2005 and 28 October 2005. At an Annual General shareholders’ Meeting on 28 April 2004, the shareholders approved a payment of the dividend of 2003 of THB 2.50 per share of 271,728,987 shares, totalling of THB 679.32 million which paid on 7 May 2004. In addition, the Board of Directors approved a payment of interim dividend of 2004 of THB 2.25 per share, totalling of THB 611.42 million at the Board of Directors’ meeting on 25 August 2004 and paid on 23 September 2004.

2 4 . D i r e c t o r s ’ r e m u n e r a t i o n Company At the Annual General Meeting on 27 April 2005, a resolution had passed to approve the payment of director’s remuneration of 2004 amounting to THB 26,439,130 which was paid during year 2005 (2004: THB 18,679,000).

2 5 . F a i r v a l u e r e s e r v e - a v a i l a b l e - f o r - s a l e s e c u r i t i e s As at 31 December, fair value reserve comprised:

C o n s o l i d a t e d and C o m p a n y 2 0 0 5

Beginning balance Increase Decrease Ending balance THB Thousand THB Thousand THB Thousand THB Thousand

Fair value reserve Company 5,445,427 - (3,882,007) 1,563,420 Subsidiaries 5,098,241 252,434 - 5,350,675 10,543,668 252,434 (3,882,007) 6,914,095

C o n s o l i d a t e d and C o m p a n y 2 0 0 4

Beginning balance Increase Decrease Ending balance THB Thousand THB Thousand THB Thousand THB Thousand Fair value reserve Company 7,959,333 - (2,513,906) 5,445,427 Subsidiaries 4,133,645 964,596 - 5,098,241 12,092,978 964,596 (2,513,906) 10,543,668

122 B a n p u P u b l i c C o m p a n y L i m i t e d 2 6 . L e g a l r e s e r v e As at 31 December, legal reserve comprised:

C o n s o l i d a t e d and C o m p a n y 2 0 0 5

Beginning balance Appropriation Decrease Ending balance THB Thousand THB Thousand THB Thousand THB Thousand

Legal reserve Company 354,051 - - 354,051 Subsidiaries 36,562 9,029 - 45,591 390,613 9,029 - 399,642

C o n s o l i d a t e d and C o m p a n y 2 0 0 4

Beginning balance Appropriation Decrease Ending balance THB Thousand THB Thousand THB Thousand THB Thousand Legal reserve Company 354,051 - - 354,051 Subsidiaries 36,397 165 - 36,562 390,448 165 - 390,613

Under the Public Company Act, the Company is required to set aside as a statutory reserve of at least 5% of its net profit after accumulated deficit brought forward (if any) until the reserve reaches not less than 10% of the registered capital. The legal reserve is non-distributable. At present, the Company set aside legal reserve at 10% of registered capital.

2 7 . O b l i g a t i o n s a n d c o n t i n g e n t l i a b i l i t i e s 27.1 As at 31 December 2005 and 2004 the Company had obligations and contingent liabilities with banks as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 Million Million Million Million (original currency) (original currency) (original currency) (original currency) Letters of Guarantee US Dollars 151.72 148.22 147.94 147.94 Indonesian Rupiah - 20,295.07 - - Thai Baht 83.62 78.79 26.83 26.99 Letters of Credit US Dollars 7.20 1.31 - -

A n n u a l R e p o r t 2 0 0 5 123 27.2 Various contracts a) The Company has entered into a contract of area lease, equipment lease and service assignment within the building of the Thanapoom Tower for area numbers 26 (Whole), 27 (Whole) and 28 (Whole), on the 26th - 28th Floor in an approximate area of 3,913.50 square meters from Krungthai Electrics Co., Ltd. for the period of 3 years commencing from 1 May 2004 to 30 April 2007.

b) Subsidiaries have entered into significant contracts as follows: Contract regarding the service of Coal Ash Removal from the area under the silo in the area of the power plant of Glow SPP3 Co., Ltd. for which the subsidiary is responsible for any damage possibly incurred from the service commencing from Coal Ash Removal from such place. Payment is determined in accordance with the removed quantity. The contract duration lasts for 15 years commencing from date of operation. Contract for mining and disposal of lignite coal at Ban-sa Mine, Amphoe Chiang Muan, Phayao Province, contract no. Bor Sor 1/39 with the Energy Development and Promotion Department for which a subsidiary company is granted subrogation right in for 22 years commencing on 10 January 1996. Moreover, the Company has to comply with various requirements specified in the contract. Contract for long-term vehicle rental agreement with a total contract value amounting to USD 1.7 million or equivalent to THB 66.73 million. The contract period is from 1 September 2003 until 30 August 2006. As of 31 December 2005, the remaining contract value amounts to USD 0.38 million or equivalent to THB 15.55 million.

27.3 Litigation A subsidiary has provided land, property, factory, machineries and diverse equipment under lease to another company. The lessee company has been overdue in respect of its payments for a long period. Such subsidiary has, therefore, ceased to recognise rental revenue from May 1998 and has raised allowance for doubtful lease receivables in the whole amount of THB 6.63 million. The subsidiary has voided the contract and exercised its contractual right to occupy the leased asset and prosecuted a claim for overdue lease payment plus fines in an amount of THB 70.76 million. Apart from this, the lessee has also breached the granite coal contract with another subsidiary in amount of THB 24.78 million. These two cases are in the court process. Because they are the litigants in the lawsuit, the lessee company has prosecuted the Company and its subsidiary which occupied the leased asset for breach of the lease contract and infringement, claiming an indemnity in the amount of THB 204 million. The cases are currently under the judgment of the court. The final judgment may not be known for the time being. As a result, the Company and its subsidiary have not yet accounted for contingent liability derived from such litigation. A overseas subsidiary has been sued and asked for the compensation of land and income amounting to IDR 4,125 million or equivalent to THB 17.5 million. The cases are currently under the process at the court. The final judgment has not been known for the time being. As a result, such subsidiary has not yet accounted for contingent liability derived from such litigation.

27.4 Capital commitments Consolidated As at 31 December 2005, the Group had capital commitments in relation to mine development of three overseas subsidiaries but not recognised in the consolidated financial statements in the amount of USD 14.78 million or equivalent to THB 608.56 million (2004: USD 22.27 million or equivalent to THB 873.04 million). The Group has entered into joint venture agreement of Hebi Zhong Tai Mining Co., Ltd., incorperated in the People’s Republic of China, amounting to RMB 313.33 million which represented 40% of shareholding. During the year 2005, the Group made the first contribution amounting to RMB 60 million or equivalent to THB 306 million which was presented in other investments (Note 9). As at 31 December 2005, the Group has not had the jointly control in such company and has a commitment for payment of such investment which was not recognised in the consolidated financial statements amounting to RMB 253.33 million. After the balance sheet date, on 8 February 2006, the Group has paid the remaining amount of RMB 253.33 million or equivalent to THB 1,254 million. As a result, the Group has invested in Hebi Zhong Tai Mining Co., Ltd. totalling of RMB 313.33 million or equivalent to THB 1,560 million.

124 B a n p u P u b l i c C o m p a n y L i m i t e d 2 8 . A c c o u n t i n g f o r i n v e s t m e n t s i n j o i n t v e n t u r e s In the preparation of the consolidated and company financial statements the Group uses the equity method for investments in joint ventures operating in the power plant business. The Company’s management is of the view that the use of equity accounting provides a clearer view of the power plant business rather than the use of the proportionate consolidation method because it reflects the substance of leveraged infrastructure development companies where the joint venture entity raises funds secured against its own assets (Project Finance) without recourse to its shareholders. In such cases, the interest of the shareholders is in the residual net equity of the joint venture entity rather than the component assets and liabilities. Furthermore, from a control perspective, the Company is of the view that it controls its share of the net equity of the joint venture entity, rather than the specific assets and liabilities that comprise that net equity. However, as of 31 December, the Company has estimated the effects on consolidated assets, liabilities, revenue and major expenses of significant power plant if the proportionate consolidation method was adopted as follows:

2005 2004 THB Million THB Million Consolidated balance sheet Cash on hand and at banks 298 147 Other current assets 153 381 Fixed assets 7,668 4,653 Other non-current assets 1,375 919 9,494 6,100

Other current liabilities 818 326 Long-term liabilities - Long-term loan 8,209 5,172 Shareholders’ equity 467 602 9,494 6,100

2005 2004 THB Million THB Million Consolidated statements of income Other income - 6 Other expfnses (135) (56) (135) (50)

2 9 . F i n a n c i a l i n s t r u m e n t s The principal financial risks faced by the Group are interest rate risk, foreign exchange rate risk, coal price fluctuations risk and credit risk. The Group borrows at both fixed and floating rates of interest to finance its operations. Major sales are entered into in foreign currencies. Credit risk arises when sales are made on deferred credit terms. The Group manages these risks as follows: a) Interest rate risk The Group manages its exposure to interest rate risk through a variety of measures, including the use of both fixed and variable instruments with different activities and entering into interest rate swap on a specific basis where management consider it appropriate to do so.

A n n u a l R e p o r t 2 0 0 5 125 The Group has established a Financial Management Committee which holds monthly meetings for consideration and discussion of how to protect or reduce financial risks which might be incurred.

Interest rate swap contract Interest rate swap contract is entered into to manage exposure to fluctuations in interest rate.

Consolidated As at 31 December 2005, an overseas subsidiary entered into an interest rate swap contract with an overseas bank to manage exposure to fluctuations in interest rates by converting floating rate based on LIBOR plus certain margin 4% to fixed interest rate 8.08% on the US Dollars notional amount. The effective date of the contract was 30 June 2005 and will be expired on 31 December 2008. The notional amount is USD 50.5 million and will decrease by USD 7.58 million in 6 installments each, staring from 30 September 2005 until 30 September 2008 and the remaining USD 5.05 million mature on 31 December 2008.

Company As at 31 December 2005, the interest rate for outstanding debentures of THB 500 million has been converted from the rate of average MLR - 2 days before maturity date of 4 commercial banks minus 0.375% per annum to a multiple of the 1.25 fixed bank deposit (THB FIX) for 6 months plus 2.58% per annum.

Net fair value The net fair value of interest rate swap contract at the balance sheet date was:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand (Unfavourable) interest rate swap contract (16,343) (4,446) (16,343) (4,446)

The mark to market evaluation of interest rate swap contract has been calculated using rate quoted by the Group’s bankers as if the contract was terminated at the balance sheet date.

b) Foreign exchange risk In order to reduce exposure to fluctuations in currency exchange rates, the Group uses natural hedges of its business operations, both in Thailand and overseas, through emphasis on a balance of foreign currencies in the Group and sometime through the use of financial instruments. The Group has both foreign currency denominated assets and liabilities and uses natural hedges between these assets and liabilities to manage certain its exposures. The Group will also enter into forward foreign exchange contracts in specific circumstances. The objectives in using financial instruments are to reduce uncertainty over future cash flows arising from movements in exchange rates. The following strategies are employed to achieve these objectives.

Forward foreign exchange contracts Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates on general transactions. As at 31 December, the settlement dates on open forward foreign exchange contracts were within 1 year. The local currency amounts to be received and contractual exchange rates of the outstanding contracts were:

126 B a n p u P u b l i c C o m p a n y L i m i t e d C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Selling USD 20 million at the average rate of THB 40.33 : USD 1 (2004: USD 23.75 million at the average rate of THB 40.55 : USD 1) 806,695 962,945 806,695 962,945 USD 31.30 million at the average rate of IDR 10,656 : USD 1 (2004: USD 49.25 million at the average rate of IDR 9,212.79 : USD 1) 1,303,113 1,791,916 - - 2,109,808 2,754,861 806,695 962,945

Buying USD 18.75 million at the average rate of THB 40.50 : USD 1 (2004: USD 26.25 million at the average rate of THB 40.55 : USD 1) (759,283) (1,064,545) (759,283) (1,064,545) (759,283) (1,064,545) (759,283) (1,064,545)

Net fair values The net fair values of the derivative financial instruments at the balance sheet date were:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Favourable (unfavourable) forward foreign exchange contracts - selling 48,671 (8,774) (99) 36,483 (Unfavourable) forward foreign exchange contracts - buying (10,943) (37,904) (10,943) (37,904)

The mark to market evaluation of forward foreign exchange contracts have been calculated using rates quoted by the Group’s bankers as if the contracts were terminated at the balance sheet date.

Currency swap contracts Currency swap contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates on specific transactions. The Company entered into currency swap contracts with a local commercial bank. The major cash proceeds schedule under these instruments is similar to the schedule of the loans to subsidiaries which are due within 5 years. However, the Company changed the schedule of such loan, and therefore, the cash proceeds schedule of some instrument is different from the schedule of the loan to subsidiary. To protect this exposure, the Company entered into additional forward foreign exchange contracts as stated above. As of 31 December 2005, the remaining currency swap contracts are USD 123.07 million (2004: USD 145.02 million). The local currency amounts to be received and contractual exchange rates of the outstanding contracts are as follows:

A n n u a l R e p o r t 2 0 0 5 127 C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand USD 123.07 million at the average rate of THB 40.09 : USD 1 (2004: USD 145.02 million at the average rate of THB 40.33 : USD 1) 4,933,716 5,848,233 4,933,716 5,848,233 4,933,716 5,848,233 4,933,716 5,848,233

Net fair values The net fair values of the currency swap contracts at the balance sheet date were:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Favourable (unfavourable) Currency swap contracts (154,953) 206,954 (154,953) 206,954

The mark to market evaluation of currency swap contracts have been calculated using rates quoted by the Group’s bankers as if the contracts were terminated at the balance sheet date.

Cross currency swap contracts Cross currency swap contracts are entered into manage exposure of fluctuations in foreign currency exchange rates and interest rates on specific transactions. The Company entered into cross currency swap contracts with a local commercial bank for the issued debenture amounting to THB 5,000 million. The foreign currency exchange rates and interest rates are changed as follows:

BANPU # 11 Notional amount Fixed interest rate per annum Effective period Series No. (USD Million)

1 36.76 6.14% 16 November 2005 - 16 November 2010

2 24.51 6.19% 16 November 2005 - 16 November 2010

3 61.27 6.60% 16 November 2005 - 16 November 2015

128 B a n p u P u b l i c C o m p a n y L i m i t e d As of 31 December 2005, the cross currency swap contracts have the contractual exchange rates and interest rates as follows:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand USD 122.55 million at the average rate of THB 40.80 : USD 1 (2004: nil) 5,000,000 - 5,000,000 - 5,000,000 - 5,000,000 -

Net fair values The net fair values of the cross currency swap contracts at the balance sheet date were:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Favourable Cross currency swap contracts 5,057 - 5,057 -

The mark to market evaluation of cross currency swap contracts have been calculated using rates quoted by the Group’s bankers as if the contracts were terminated at the balance sheet date.

c) Coal price fluctuations risk The Group’s objective in managing its exposure to coal price fluctuations risk from its business operations, both in Thailand and overseas, and to achieve on emphasis on a balance of overall coal price in the Group by entering into both short-term and long-term sales agreements and sometime through the use of financial instruments. The objective in using financial instruments is to reduce uncertainty over future cash flows arising from movements in coal price. The following strategy is employed to achieve these objectives.

Coal swap contracts Coal swap contracts are entered into to manage exposure to fluctuations in coal price on general transactions. As at 31 December 2005, the Company has open coal swap contracts with no physical delivery amounting to 5,370,000 tonnes at the average rate of USD 48.79 per tonne (2004: 720,000 tonnes at the average rate of USD 51.42 per tonne). Such contracts are due within 3 years. Differences between coal swap contracts price and market price specified by API 4 Index.

Net fair values The net fair values of average coal swap contracts at the balance sheet date were:

C o n s o l i d a t e d C o m p a n y 2005 2004 2005 2004 THB Thousand THB Thousand THB Thousand THB Thousand Favourable (Unfavourable) Coal swap contracts 143,511 (36,373) 143,511 (36,373)

The mark to market evaluation of coal swap contracts have been calculated using rates quoted by the Group’s bankers as if the contracts were terminated at the balance sheet date.

A n n u a l R e p o r t 2 0 0 5 129 d) Credit risk The Group has no significant concentrations of credit risks. Derivative counter parties and cash transactions are limited to high credit quality financial institutions. The credit exposure of derivatives is represented by the net fair values of the contracts, as disclosed above in (b).

e) Fair values The carrying amounts of the following financial assets and financial liabilities approximate to their fair values: cash and cash at banks, investments, trade receivables and payables, other receivables and payables, loans to and loans from related parties, short-term loans. As at 31 December 2005, there is no information on fair value of long-term loans and debentures available.

f) Other risks - Indonesian economic conditions Indonesia has been experiencing a prolonged period of economic difficulty which has been compounded by a downturn in the global economy and its domestic political situation. Indonesia’s return to economic stability is dependent to a large extent on the effectiveness of measures taken by the government and decisions of international lending organizations. However, the Company has entered into insurance policies with overseas insurance companies to protect its investment risk which may occur through law and order or adminis- trative actions of Indonesian government.

3 0 . P r o m o t i o n a l p r i v i l e g e s The Company has received promotional privileges from the Board of Investment for mining business under five promotion certificates. Under these privileges, the Company receives exemption from certain taxes and duties as detailed in the certificates, as well as exemption from corporate income tax for a period of six to eight years commencing from the date operating income is earned. As a promoted industry, the Company is required to comply with the terms and conditions as specified in the promotional certificates. As of 31 December 2005, four promotion certificates had expired. The remaining certificate will expire in June 2006. Revenues shown in the Company financial statements classified by BOI granted and Non-BOI granted are as follows:

For the year ended 31 December 2005

Non-BOI BOI granted granted Total THB Thousand THB Thousand THB Thousand Sales 2,058,098 513,768 2,571,866 Other income - 3,742,495 3,742,495 Total revenues 2,058,098 4,256,263 6,314,361 Total expenses (1,273,602) (1,706,240) (2,979,842)

Net operating profit 784,496 2,550,023 3,334,519 Share of profit of subsidiaries joint ventures and associates - 2,890,273 2,890,273 Net profit before income tax 784,496 5,440,296 6,224,792 Income taxes - (659,941) (659,941) Net profit for the year 784,496 4,780,355 5,564,851

130 B a n p u P u b l i c C o m p a n y L i m i t e d For the year ended 31 December 2004

Non-BOI BOI granted granted Total THB Thousand THB Thousand THB Thousand Sales 1,288,121 349,392 1,637,513 Other income - 2,864,894 2,864,894 Total revenues 1,288,121 3,214,286 4,502,407 Total expenses (998,633) (1,499,403) (2,498,036)

Net operating profit 289,488 1,714,883 2,004,371 Share of profit of subsidiaries joint ventures and associates - 1,941,243 1,941,243 Net profit before income tax 289,488 3,656,126 3,945,614 Income taxes - (300,675) (300,675) Net profit for the year 289,488 3,355,451 3,644,939

3 1 . S u b s e q u e n t e v e n t s On 9 February 2006, a local subsidiary has entered into purchase agreement for investments in Peak Pacific Investment Company Limited and Interstate Energy Corporation Pte. Ltd. of USD 84.34 million or equivalent to THB 3,374 million for 90.99% and 100% of its capital, respectively.

A n n u a l R e p o r t 2 0 0 5 131 O t h e r R e f e r e n c e s

1) Ordinary Share Registrar Thailand Securities Depository Company Limited for Depositors 62 The Securities Exchange of Thailand Building Ratchadaphisek Road, Khlong Toei, Bangkok 10110 Tel. 0 2229 2800

2) Debenture Registrar Thai Military Bank Public Company Limited 3000 Phahon Yothin Road, Jatujak, Bangkok 10900 Tel. 0 2299 1111

3) Auditor Mrs. Anothai Leekitwattana Authorised Auditor No. 3442 PricewaterhouseCoopers ABAS Ltd. 15th Floor, Bangkok City Tower No. 179/74-80 South Sathon Road, Bangkok 10120 Tel. 0 2286 9999, 0 2344 1000

4) Financial Advisor -None-

5) Advisor or Manager The Company hired neither advisor nor manager under any under Management permanent management agreement. Rather, advisors (such as Agreement financial advisor) were hired on a case-by-case basis as necessary to help with its operation from time to time. The Company’s daily management is mainly supervised by the Board of Directors.

6) Financial Institutions Around 20 local and international commercial banks and financial Frequently Contacted institutions

132 B a n p u P u b l i c C o m p a n y L i m i t e d B a n p u G r o u p S t r u c t u r e A s o f 3 1 D e c e m b e r 2 0 0 5 (Entities with 10 per cent or more shares held by Banpu)

100.00% 95.00% 99.99% Banpu Singapore PT. Jorong PT. Indominco Pte. Ltd. Barutama Greston Mandiri

100.00% 95.00% 99.99% Banpu Minerals PT. Nusantara Thai (Singapore) PT. Kitadin Mining Services Pte. Ltd.

99.99% 95.00% 99.99% 90.00% PT. Centralink Banpu International PT. Indo PT. Trubaindo Wisesa Ltd. Tambangraya Megah Coal Mining International

99.99% 99.99% 100.00% Banpu Minerals Silamani Corp., Ltd. PT. Barasentosa Co., Ltd. Lestari

99.99% 99.00%

Silamani Marble PT. Bharinto Co., Ltd. Ekatama

98.87% Ban-Sa Mining - - - - - Co., Ltd. 51.00% 49.00%

Chiang Muan ------Mining Co., Ltd.

100.00% 22.21% BP Overseas Asian American Development Coal Inc. Co., Ltd.

100.00% 40.00% Banpu China Hebi Zhong Tai Pte. Ltd. Mining Co., Ltd.

B a n p u P u b l i c C o m p a n y L i m i t e d

99.99% 40.00%

Banpu Power Ltd. Power Generation Services Co., Ltd.

100.00% 99.99%

Banpu Power - - - - Synergy Power - - - - - International Ltd. Co., Ltd. 97.66% 15.00% 2.34% 100.00%

Banpu Coal ------BLCP Power Ltd. ------Power Ltd.

35.00% 7.38% 7.61% Ratchaburi Electricity Generating Holding Plc.

99.98% 99.99% Universal Promsin Co., Ltd. Exploration Co., Ltd.

A n n u a l R e p o r t 2 0 0 5 133 D e t a i l s o f t h e C o m p a n y a n d I t s S u b s i d i a r y a n d A s s o c i a t e d C o m p a n i e s

No. of Type of Authorized paid-up Par value % of Name Paid up capital Head Office Telephone business capital capital per share holding (shares)

1 Banpu Plc. Energy 3,540,504,790 2,717,478,550 271,747,855 10 - 26-28th Floor, Thanapoom 1550 0 2694 6600 THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

Subsidiary companies

2 Banpu Minerals Coal 40,000,000 40,000,000 40,000 1,000 99.99% 58/1 Soi Thungkwao 1, 0 2694 6600 Co., Ltd. mining and THB THB Yontrakijkosol Road, Moo 1, trading Tambon Thungkwao, Amphoe Mueang Phrae, Phrae Province

3 Banpu Singapore Coal trading 2,000,000 1,500,000 1,500,000 1 100.00% One Marina Boulevard, #28-00 65 6890 7637 Pte. Ltd. SGD SGD Singapore 018989

4 Banpu Minerals Investment 50,000,000 17,670,002 17,670,002 1 100.00% One Marina Boulevard, #28-00 65 6890 7637 (Singapore) in coal SGD SGD Singapore 018989 Pte. Ltd. mining

5PT. Jorong Coal mining 4,500,000,000 4,500,000,000 300 15,000,000 95.00% 2nd Floor, Ventura Building, 6221 750 4390 Barutama Greston and trading IDR IDR Jalan R.A. Kartini No. 26, in Indonesia Cilandak, Jakarta 12430, Indonesia

6PT. Nusantara Coal mining 541,750,000 541,750,000 250,000 2,167 95.00% 2nd Floor, Ventura Building, 6221 750 4390 Thai Mining service in IDR IDR Jalan R.A. Kartini No. 26, Services Indonesia Cilandak, Jakarta 12430, Indonesia

7PT. Centralink Investment 110,000,000,000 109,473,000,000 109,473 1,000,000 95.00% 2nd Floor, Ventura Building, 6221 750 4390 Wisesa in coal IDR IDR Jalan R.A. Kartini No. 26, International mining in Cilandak, Jakarta 12430, Indonesia Indonesia

8PT. Indo Investment 150,000,000,000 101,081,000,000 101,081 1,000,000 99.99% 3rd Floor, Ventura Building, 6221 750 4390 Tambangraya in coal IDR IDR Jalan R.A. Kartini No. 26, Megah mining in Cilandak, Jakarta 12430, Indonesia Indonesia

9PT. Indominco Coal mining 20,000,000,000 12,500,000,000 12,500 1,000,000 99.99% 3rd Floor, Ventura Building, 6221 750 4390 Mandiri and trading IDR IDR Jalan R.A. Kartini No. 26, in Indonesia Cilandak, Jakarta 12430, Indonesia

134 B a n p u P u b l i c C o m p a n y L i m i t e d No. of Type of Authorized paid-up Par value % of Name Paid up capital Head Office Telephone business capital capital per share holding (shares)

10 PT. Kitadin Coal mining 30,000,000,000 27,000,000,000 13,500 2,000,000 99.99% 3rd Floor, Ventura Building, 6221 750 4390 and trading IDR IDR Jalan R.A. Kartini No. 26, in Indonesia Cilandak, Jakarta 12430, Indonesia

11 PT. Trubaindo Coal Coal mining 100,000,000,000 63,500,000,000 63,500 1,000,000 90.00% 3rd Floor, Ventura Building, 6221 750 4390 Mining and trading IDR IDR Jalan R.A. Kartini No. 26, in Indonesia Cilandak, Jakarta 12430, Indonesia

12 PT. Barasentosa Coal mining 3,500,000,000 3,500,000,000 3,500 1,000,000 100.00% 3rd Floor, Ventura Building, 6221 750 4390 Lestari and trading IDR IDR Jalan R.A. Kartini No. 26, in Indonesia Cilandak, Jakarta 12430, Indonesia

13 PT. Bharinto Coal mining 6,800,000,000 1,700,000,000 17,000 100,000 99.00% 3rd Floor, Ventura Building, 6221 750 4390 Ekatama and trading IDR IDR Jalan R.A. Kartini No. 26, in Indonesia Cilandak, Jakarta 12430, Indonesia

14 Banpu Investment 250,000,000 250,000,000 25,000,000 10 99.99% 26-28th Floor, Thanapoom 1550 0 2694 6600 International Ltd. in coal THB THB New Petchburi Road, Makkasan, mining in Ratchathewi, Bangkok 10400 Indonesia

15 Silamani Corp. Ltd. Coal trading 300,000,000 300,000,000 30,000,000 10 99.99% 26-28th Floor, Thanapoom 1550 0 2694 6600 THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

16 Silamani Marble Coal trading 200,000,000 200,000,000 2,000,000 100 99.99% 26-28th Floor, Thanapoom 1550 0 2694 6600 Co., Ltd. THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

17 Ban-Sa Mining Investment 60,000,000 60,000,000 600,000 100 98.87% 779/2 Singhaklai Road, 0 2694 6600 Co., Ltd. in coal THB THB Tambon Wieng, mining and Amphoe Mueang Chiang Rai, trading Chiang Rai Province

18 Chiang Muan Coal mining 100,000,000 100,000,000 10,000,000 10 49.00% 26-28th Floor, Thanapoom 1550 0 2694 6600 Mining Co., Ltd. and trading THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

A n n u a l R e p o r t 2 0 0 5 135 No. of Type of Authorized paid-up Par value % of Name Paid up capital Head Office Telephone business capital capital per share holding (shares)

19 BP Overseas Investment 10,000 2 2 1 100.00% Offshore Incorporations Limited 0 2694 6600 Development in Coal USD USD of P.O. Box 957, Offshore Co., Ltd. Mining Incorporations Centre, Road Town, Tortola, British Virgin Islands

20 Universal Drilling & 790,000,000 790,000,000 7,900,000 100 99.98% 26-28th Floor, Thanapoom 1550 0 2694 6600 Exploration exploration THB THB New Petchburi Road, Makkasan, Co., Ltd. Ratchathewi, Bangkok 10400

21 Promsin Co., Ltd. Property 580,000,000 580,000,000 5,800,000 100 99.99% 26-28th Floor, Thanapoom 1550 0 2694 6600 development THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

22 Banpu Power Ltd. Investment 2,000,000,000 2,000,000,000 200,000,000 10 99.99% 26-28th Floor, Thanapoom 1550 0 2694 6600 in power THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

23 Banpu China Investment 68,000,000 14,272,642 14,272,642 1 100.00% 1 Temasek Avenue #27-01, 0 2694 6600 Pte. Ltd. in power SGD SGD Millenia Tower, Singapore 039192

24 Banpu Power Investment 50,000 100 100 1 100.00% 4th Fl., Li Wan Po House, 0 2694 6600 International Ltd. in power USD USD 12 Remy Ollier Street, Port Louis, Mauritius

25 Synergy Power Investment 11,000,000 11,000,000 11,000,000 1 99.99% 4th Fl., Li Wan Po House, 0 2694 6600 Co., Ltd. in power USD USD 12 Remy Ollier Street, Port Louis, Mauritius

26 Banpu Power Investment 427,240,000 427,240,000 42,724,000 10 100.00% 26-28th Floor, Thanapoom 1550 0 2694 6600 Coal Ltd. in power THB THB New Petchburi Road, Makkasan, Ratchathewi, Bangkok 10400

Associated companies

27 BLCP Power Ltd. Power 1,484,400,000 1,484,400,000 14,844,000 100 50.00% 25th Floor, Thanapoom 1550 0 2694 6600 production THB THB New Petchburi Road, Makkasan, and sales Ratchathewi, Bangkok 10400

28 Power Generation Operate and 10,000,000 10,000,000 100,000 100 40.00% 9 I-8 Road, Services Co., Ltd. Maintenance THB THB Map Ta Phut Industrial Estate, for Power Amphoe Mueang Rayong, Plant Rayong Province

136 B a n p u P u b l i c C o m p a n y L i m i t e d Designed by PLAN GRAFIK Tel. 0 2237 0080 # 300 B A N P U P U B L I C C O M P A N Y L I M I T E D

2 6 t h - 2 8 t h F l o o r , T h a n a p o o m T o w e r , 1 5 5 0 N e w P e t c h b u r i R o a d , M a k k a s a n , R a t c h a t h e w i , B a n g k o k 1 0 4 0 0 , T h a i l a n d T e l . 6 6 ( 0 ) 2 6 9 4 6 6 0 0 F a x 6 6 ( 0 ) 2 2 0 7 0 6 9 5 - 8 w w w . b a n p u . c o m