APPENDIX V SUMMARY OF CERTAIN THAI LAWS RELEVANT TO THE GROUP’S BUSINESS OPERATIONS Set forth below is a summary of certain background information on Thai laws that are in the views of the Directors relevant to the Group’s business operations. As the following is only a summary of certain selected information, no representation is made by the Company, the Sponsors, the Underwriters and other parties involved in the Offer that the following is a complete description of all applicable Thai laws and regulations relevant to the Group’s business operations: LEGAL SYSTEM 1. The Law Thailand has a codified system of law. The major legislative codes are the Civil and Commercial Code, Penal Code, Civil Procedure Code, Criminal Procedure Code, Revenue Code and Land Code, and the content of which was drawn from the laws of other countries having codified systems (e.g. France, Switzerland and Germany), from the laws of countries with common law systems (e.g. Great Britain) and from the traditional customary laws of Thailand. The supreme law of Thailand is the Constitution. This is supplemented by Acts of the Thai Legislature, Royal Decrees, Emergency Decrees, Ministerial Regulations, Ministerial Notifications, other governmental notifications and local government regulations. The objectives of the Constitution are outlined in the preamble: • to promote and protect the rights and liberties of the people; • to provide for public participation in governance and inspection of the exercise of the State power; and • to improve the efficiency and stability of Thailand’s political structure. The measures and principles of the Constitution are all intended to meet these objectives. 2. The Courts Thai laws are normally drafted in broad terms, especially laws regulating commercial activities. Broad powers are delegated to government ministries or organizations to issue notifications or regulations. The Court of Justice is divided into three tiers, consisting of the Supreme Court, the Court of Appeals and the Courts of First Instance. There are also separate Juvenile, Labor, and Tax Courts. There are also a number of specialized courts, including the Central and Regional Intellectual Property and International Trade Court (IPIT), and the Central Bankruptcy Court in Bangkok. All these courts were created under their own enacting legislations, which also established their specialized procedures. The Constitution established a separate system of Administrative Courts to deal with administrative law matters. The Constitutional Court was also established to deal with governmental matters and constitutional questions. The Military Courts were established to try and adjudicate military criminal cases and other cases as provided by law.All cases are decided by judges. There is no provision for a jury trial in Thai law. – 239 – APPENDIX V SUMMARY OF CERTAIN THAI LAWS RELEVANT TO THE GROUP’S BUSINESS OPERATIONS 3. Arbitration Arbitration is available as a means of dispute settlement. Under the Arbitration Act B.E. 2545 (2002), written agreements between parties to arbitrate disputes is required. The enforcement of arbitration award also requires the courts’ endorsement. Parties to an agreement may agree that certain types of disputes should be resolved by means of arbitration. If an instance of such disputes arises and one party brings the matter to litigation in court, the other party has the right to object. In this case, the court will refuse to hear the case and will order the parties to resolve the dispute via arbitration, in complying with the terms of the agreement. The Arbitration Act also provides that Thai courts may enforce foreign arbitration awards if the parties involved are entitled to rely on the terms of the relevant international conventions. To enforce any of such awards, a court would require that the petitioner submits as evidence the originals, or certified copies of the originals, and Thai translations of both the agreement and the award. FOREIGN INVESTMENT REGULATIONS The major legal requirements for the operation of a company with the majority of its shares held by a foreign entity are those set out in the Foreign Business Act B.E. 2542 (A.D. 1999) (the “FBA”). Pursuant to the FBA, a Thai company, the majority of whose shares being held by foreign individuals or entities, is restricted from the operations of certain businesses as specified in the FBA. In addition, certain businesses operated by a Thailand company are subject to promotion granted by Thailand investment promotion authority under the relevant investment law, i.e. the Investment Promotion Act B.E. 2520 (1977). The above major legal requirements can be summarised as follows: 1. The Foreign Business Act In Thailand, foreign individuals and foreign legal entities conducting business must comply with the FBA, which has been in force since 3rd March, 2000. The purpose of the FBA is to prohibit or restrict foreigners from engaging in certain businesses in Thailand and, to this end, foreigners are required to obtain permission (i.e. a “Foreign Business Licence”) in accordance with the FBA before conducting restricted businesses. The prohibited or restricted businesses are categorized in Schedules One, Two and Three of the FBA. Schedule One businesses are prohibited for special reasons and cannot be engaged by foreigners and, thus, permission to conduct these businesses cannot be obtained. Schedule Two businesses are restricted, but can be conducted by foreigners if permission is granted by the Commerce Minister with the approval of the Cabinet. Businesses under Schedule Two are restricted because they relate to national safety and security, art and culture, tradition and folk handicraft and/or natural resources or the environment. Schedule Three businesses are also restricted, but can be conducted by foreigners if permission is granted by the Director-General of Commercial Registration Department, Ministry of Commerce, with the approval of the Foreign Business Committee. Businesses under Schedule Three are restricted because it is deemed that Thai nationals are not ready to compete in these businesses. – 240 – APPENDIX V SUMMARY OF CERTAIN THAI LAWS RELEVANT TO THE GROUP’S BUSINESS OPERATIONS 2. The Investment Promotion Act and the Board of Investment The Investment Promotion Act B.E. 2520 (1977) provides the legal framework for investment incentives granted by the Office of the Board of Investment (“BOI”). The BOI is responsible for promoting foreign and domestic investment. It has wide discretionary powers to encourage investment in areas considered to be the most beneficial to Thailand’s economic and social development. BOI incentives include tax privileges, relaxation (in certain cases) of restrictions on foreign participation and employment, business protection measures, etc. BOI promoted companies are subject to certain conditions and/or performance requirements set by the BOI. FOREIGN EXCHANGE ISSUES Thai foreign exchange controls are administered by the Bank of Thailand on behalf of the Ministry of Finance of Thailand, pursuant to the Exchange Control Act B.E. 2485 (1942) as amended. In 1991, the Ministry of Finance of Thailand enacted regulations to further liberalise exchange control restrictions, making it easier for foreign investors to transfer their funds to and from Thailand. In particular, the Bank of Thailand has granted commercial banks and certain other entities the authority to conduct foreign exchange transactions as authorised agents of the Bank of Thailand. The Bank of Thailand instituted temporary measures on 28th May, 1997 to restrict certain foreign exchange related transactions by domestic financial institutions with non-residents of Thailand and to safeguard against instability and speculation in the domestic currency market. Such temporary measures were lifted by the Bank of Thailand on 29th January, 1998 (with effect from 30th January, 1998). However, in order to safeguard against potential speculation in the Baht, the Bank of Thailand simultaneously introduced a new measure limiting the value of foreign exchange related transactions without underlying trade or investment activities in Thailand to Baht 50 million per counterparty. The inward remittance of money into Thailand for investment in securities does not require registration with the exchange control authorities. However, any Thai resident (including any Thai national or permanent resident who is resident in Thailand, any corporation organised under the laws of Thailand and any Thai-registered branch of a company not organised under the laws of Thailand) acquiring foreign currency anywhere or bringing foreign currency into Thailand must, within seven days, either (i) sell such foreign currency to an authorised agent, for which a specified form must be submitted to such authorised agent if the amount deposited is in excess of US$10,000 or its equivalent, or (ii) deposit it into a foreign currency account opened with a commercial bank in Thailand if the owner of such foreign currency account proves to an authorised bank that he will be subject to payment of a debt outside Thailand within three months from the date of deposit; provided however that amount of such deposit must not exceed the debt and the daily balance of a foreign currency deposit in all accounts of each depositor may not exceed US$500,000 or its equivalent for an individual, or US$10,000,000 or its equivalent for a juristic entity. – 241 – APPENDIX V SUMMARY OF CERTAIN THAI LAWS RELEVANT TO THE GROUP’S BUSINESS OPERATIONS