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GGeneral Information

Rayong Purifier Public Company Limited (“Company”)Petroleum business with a 17,000 BPD refining capacity and 4 depots covering thedistribution of High Speed Diesel, RONC 91 Gasoline, RONC 95 Gasoline, Chemicals,and Fuel Oil through marketing channels including retails.14th Floor, Tower III, SCB Park Plaza East, 19 Ratchadapisek Road,Chatuchak, Bangkok 10900530,048,171 Baht530,048,171 Baht1 Baht529,870,229 Baht01075460002020-2937 9384-8 0-2515 86000-2937 9389 0-2937 97807/3 Pakorn Songkrohrad Road, Tambol Map-ta-phut,Amphur Muang-Rayong,Rayong Province 21150(038) 685 816-9(038) 685 243http://www.rpcthai.com

General Information

References

Thailand Security Depository Co.,Ltd.62 The Stock Exchange of Thailand Building, 4th and 7th FloorsRatchadapisek Road, Klongtoey, Bangkok 101100-2654 5599Ms. Vissuta JariyathanakornCertified Public Accountant (Thailand) No. 3853Ernst & Yong Office Limited33 Floor, Lake Rajada Office Complex193/136-137Rachatdapisek Road, Klongtoey, Bangkok 10110

Company NameType of Business

Head Office

Registered CapitalOrdinary sharesPar valuePaid registered capitalCompany Register No.Telephone No.Fax No.Factory

Telephone No.Fax No.Home page

Securities RegistrationAddress

Telephone No.Auditor (year 2007)Address

116

MMessage from the ChairmanRayong Purifier PLC has been operating in the energy development business for 12 years using domestic raw

materials and technology, aiming specifically to encourage national development and economic growth. The Companyhas waded successfully through existing obstacles, especially during 2004 when Thai economy had been sloweddown due to Thailand’s monetary and financial factors along with fluctuations in the capital and trading markets.

At present, the aforesaid threatening economic factors are still prevailing, functioning together with additionalnegative factors that are inhibiting the potential growth of Thai economy. Those factors are, for example, the insurgencyin the South, national political conflicts, Baht currency strength, incessantly heightened price of crude oil, and theeconomic slowdown of the United States due to the sub prime mortgage crisis.

A light of hope is still shining for the Thailand’s economic system and overall situations, however. The generalelection was held recently and the new democratic government will induce domestic and international confidence andeconomic supports. The Company therefore perceives optimistically the favorable economic situations in the future.

In this regard, the Company has experienced both the business obstacles and opportunities. The endlesslyhigh price of crude oil has rendered the alternative energy produced from agricultural products an interesting optionthat receives increasingly high demand. The Company’s expansion to Bio-diesel renewable energy during the pastyear is considered a major long-term movement and opportunity in the situation when the fossil-based crude oil isexpected to be in shortage in the near future, aggravated further by the augmenting oil demand of India and China. Thesaid expansion is also initiated in accordance with the world-wide concern in environmental pollution reduction andglobal warming.

Under the unpredictable circumstances in 2007, the Company has been operating cautiously and successfully toexpand and strengthen its business on the continuous basis. The Company’s total sales volumes in 2007 amounted to942 million litres, or an increase of 6.17% from 2006, with the total revenue of Baht 20,759 million, equivalent to the netprofit of Baht 401 million, or an increase of 119% from the previous year.

Regarding business expansion, the Company invested in Pure Bio-Diesel Co., Ltd. to operate in the production ofquality diesel (B100) from palm oil. Not only increasing the Company’s competitiveness in the market, this expansionhas added further more stability to the original business of diesel production from condensate residue. In terms ofbusiness strategy, Pure Bio-Diesel has geared the Company to the alternative energy business, in which appropriatetechnology was utilized in accordance with HM the King’s initiative project on sufficiency economy. The Pure Bio-Dieselproject will be in action for production and distribution in August, 2008.

As for the retail business, the Company expanded its gas station of B5 diesel and 95 Gasohol to 76 stations,aiming primarily to respond to and support the renewable energy market. The Company is readily prepared to increasethe number of gas stations together with develop the ‘Pure Place’ community mall in Bangkok after the successfulopening of the first branch at Rangsit Klong 2 last year.

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Mr. Viravat CholvanichChairman

Regarding the future for its main business of oil distillation, the Company has set a long-term plan to participate in thedevelopment of raw materials and production process in accordance with the upcoming fluctuating situations incompetition and product specification requirements. At present, almost all countries have paid a particular attention tominimize as much as possible the environmentally threatening substances in gasoline. Moreover, the Company is alsopreparing to diversify further to other types of profitable renewable energy via its domestic and international subsidiariesand affiliated firms. The Company, in this aspect, aims primarily to enforce its business strength as well as permanentgrowth in energy business, with the practice of corporate governance that continues providing regular dividends toshareholders.

On behalf of the Board of Directors, I would like to extend my sincere appreciation to shareholders, businesspartners, and customers. My wholehearted gratitude comes to all executives and employees whose unreserved devotioncontributed successfully to the Company’s incessant growth, profits, and valuable returns to shareholders. I truly hopethat these impressive performances of yours will be prolonged to the future success of our Company.

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Mr. Viravat CholvanichChairman of the Board of Directors

Mr. Satja JanetumnugulDirector/ Executive Director

Mr. Kiat SittheeamornAdvisor to the Board ofDirectors

Mr.Bibit BijaisoratatIndependent Director/ Audit Committee

Mr. Arnooparp CharmikornIndependent Director/ Audit Committee

Dr.Vichit YamboonruangIndependent Director/ Chairman of The Audit Committee

Mr. Suthud KhancharoensukDirector

Mr. Tawat UngsuprasertDirector

Mr. Supapong KrishnakanDirector/ Chairman of the Executive Board

Mr. Sumit ChanmateeDirector/ Executive Board

TThe Board of Director and Advisorto the BOD

Mr. Suwinai SuwanhirunkulDirector/ Executive Board/ Managing Director

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1. Mrs. Siraporn Krishnakan Assistant to Managing Director2. Mr. Somboon Sirichainarumitr General Manager- Finance & Administration

Function3. Ms.Kallaya Klaithong General Manager-Commercial Function4. Mr.Wasun Suetrong General Manager-Manufacturing Function5. Mr. Bunlue Sripodok Senior Executive Director6. Mr. Somsak Kitsin Senior Executive Director7. Ms. Kanokporn Jarukulvanich Senior Executive Director

1. Mr. Supapong Krishnakan Director/ Chairman of theExecutive Board

2. Mr. Suwinai Suwanhirunkul Director/ Executive Board/ Managing Director

3. Mr. Satja Janetumnugul Director

4. Mr. Sumit Chanmatee Director

4 2 1 3

3 1 2 7 6 4 5

TThe Management Team

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TThe 2007 RPC’s Activities

The 2007 RPC’s Activities1. “PURE” gas stations : Currently expanded to more than 80 stations. This is to

provide, from the Thai-owned Oil Company, quality gasoline products with fair price to Thaiconsumers.

2. “PURE PLACE” Community Mall : Modern-designed Community Mall accommo-dated with numerous shops, restaurants, and “PURE” gas station. This is a joint venture businessbetween Rayong Purifier PCL and Sammakorn PCL.

3. Bio-diesel Refinery Plant (B100): Renewable energy business in correspondencewith HM’s initiative on energy saving by using domestic agriculture products.

4. “Jaturatis Transport” Full-scale oil transportation business awarded with 9001 :2000 ISO quality system

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CCommunity Relations and SocialResponsibility

Community RelationsThe Company has focused more specifically on building up mutual understanding between the Company

and its surrounding communities. In this regard, using community relations activities, the Company has initiated andmaintained positive relationships with nearby schools, community leaders, and government offices. These activitiesinclude, for example, National Youth Day Celebration, drawing contests, scholarship donations, and participation inother activities held in the communities. These activities have regularly held in Rayong, Nakornsawan, and NakornRachaseema—the areas where the Company’s oil depots and “PURE” gas stations are located.

Social ResponsibilityThe Company gives supports to “Thai Futsal Team” with a steadfast aim to put Thai sports team to international

success and worldwide recognition. In addition, for the sake of the employees’ good health, the Company encouragedthe founding of Badminton club, so that the executives and the employees could do some exercises and build up good

relationship with one another.

Innovative Creativity of Thai YouthsAiming to assist Thai youths in working on their creativity, the Company sponsored the energy-saving racing

team entitled “PURE Thai Energy Saving Racing Car” initiated by the students of the Army Transportation Engineering

School. The team won 3 consecutive years of championship from Japan.

Social ResponsibilityThe Company gave supports to mobile clinics to assist communities in remote areas. A large amount of

donations were given to the Rajaprajanugroh Foundation to assist the disabled or the victims of various kinds ofdisasters. The staffs have also participated in all activities sponsored by the Company by donating generously to variousagencies and foundations on the monthly basis. They even founded a number of clubs for this purpose, e.g. Sanphan

Panrak [Dream Weaving & Love Sharing] Club.

EnvironmentsThe Company was awarded with ISO 14001 environmental quality standard due to its waste water treatment

system and air quality inspection prior to releasing. As one proof of environmental concern, the Company held a contestof “kratong” made particularly from tapioca that can be decomposed without any negative effect on the environments.A large number of students from various elementary to secondary schools showed their interest and extensively joinedin this contest.

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Financial HighlightsFinancial HighlightsF

Financial Ratios

Net Profit Margin

Gross Profit Margin

Return on Equity

Return on Assets

Net Profit per Share

Book Value per Share

Debt to Equity Ratio

Long-term Loan to Equity Ratio

Unit

%

%

%

%

Baht

Baht

X

X

31 Dec. 2007

1.93

4.94

27.19

10.39

0.76

2.8

1.60

0.05

31 Dec. 2006

0.94

3.26

15.45

5.51

0.35

2.27

1.77

0.09

31 Dec. 2005

2.51

6.17

31.08

12.38

0.71

2.84

1.47

1.37

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Financial Position and Operating Results (Unit : Million Baht)

Baht million or stated otherwise

Total assets

Total liabilities

Total Shareholders’ equity

Revenue from sales

Total revenue

Gross profit

EBITDA

Net profit

Earnings per share (Baht)

31 Dec. 2007

3,855

2,358

1,497

20,759

20,795

1,045

683

401

0.76

31 Dec. 2006

3,327

2,097

1,230

19,502

19,554

665

398

183

0.35

31 Dec. 2005

2,966

1,739

1,227

14,678

14,699

815

619

367

0.88

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BIn 2007, the Company made progress of its operations as the following:

Business Operation Performance ReportThe Company’s main revenues originated from sales of refined oil such as high-speed diesel, gasoline 91 &

95, chemicals and fuel oil. In 2007, the total sales of refined oil and chemical products were Baht 20,723.92 million,rising 6.54% from the amount of Baht 19,451.85 million in 2006. The average unit price per litre rose from 21.93 Baht in2006 to 22.01 Baht in 2007. The total sales volumes in 2007 amounted to 942 million litres, increasing 6.17% from thoseof 887 million litres in 2006. Sales growth stemmed basically from higher production capacity and higher oil price.

In 2007, the expenses of the Company and its subsidiaries were Baht 20,238.29 million, rising 4.96% from theamount of Baht 19,281.01 million in 2006. The major expenses were cost of sales, and selling and administrativeexpenses. Cost of sales increased Baht 877 million, or 4.66%, from Baht 18,836.80 million (average of 21.24 Baht perlitre) in 2006 to Baht 19,713.80 million (average of 20.93 Baht per litre) in 2007. The rising cost of sales was due mainlyto an increase of sales volumes and raw material costs associated with higher oil price.

In 2007, the Company’s selling and administrative expenses amounted to Baht 524.48 million, or an increaseof 18.02% from those of Baht 444.21 million in 2006.

The Company’s net profits in 2007 were Baht 400.69 million, increasing Baht 217.31 million or 118.50% fromBaht 183.38 million in 2006.

ProductionThe Company’s total outputs were 739 million litres, equivalent to 12.75 KBD or 75% of the total production

capacity of 987 million litres or 17.0 KBD, while its outputs in 2006 were 669 million litres, equivalent to 11.54 KBD or 68%of the total production capacity. In addition, the energy consumption per unit of production (FOEB) in 2007 decreasedto 1.54% from 1.61% in 2006. The major product was diesel, and the rest were chemicals, fuel oil, and others.At present, the Company’s refineries are able to function efficiently, with the approved level of safety assured progressively bythe ISO 9001: Version 2000 quality control management, the Bio-aid and Safety system (USA’s OHSAS18001 and UK’sBS8800), and the environmental standards (ISO 14001).

Future PlanIn 2007, the Company initiated 2 projects to generate returns for future business as follows:

1. Investment in Renewable EnergyThe Company has expressed an ample interest in investing in renewable energy, e.g. Bio-diesel project,

ethanol manufacturing project to be mixed with the Company’s existing products for further sales, as well as other typesof renewable energy. These projects aim at responding to the government’s policy in reducing the petroleum importsby using domestic agriculture products.

In 2007, the Company invested in the Bio-diesel production project via Pure Bio-diesel Company (a subsidiaryin which the Company holds 99.99% of shares). The details of this project are as following:

Business Operation PerformanceReport

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Production capacity of bio-diesel at 300,000 litres per day or 100,000 tons per year.Capital of 400 million BahtGranted full loan from Kasikorn Thai BankStart commercial production with expected revenue in August 2008At present, the Company is in the process of conducting project feasibility to examine the economy of scale,

and other possible risk factors.

2. Gas station expansion projectThe Company has targeted to expand its “PURE” gas station to 100 stations to increasingly meet the consumers’

need, and to heighten the profit in terms of the last marketing margin in the value chain of the finished refined oilproducts.

In 2007, the Company added 72 gas stations to the market, and still holds as its policy to increase the numberof gas stations as well as upgrading its service quality so as to generate more value of retail sales. The Company alsoaims at cooperating with its particular strategic partners to develop the premises of its gas stations to serve as distributionchannels for non-oil products and services.

3. Investment in VTN-PVTN-P, a subsidiary of Rayong Purifier PLC, is a small-scaled petrochemical plant with the total capacity of

2,500 barrels per day. It is located on the bank of Mekong River in Can Tho Province near Ho Chi Minh City, south ofVietnam. The Company held 60% of VTN-P’s registered capital of US$3.5 million. The plant construction was completedand the test-run was conducted, yielding expected and standardized test results.

However, due to ambiguous regulations and designated authority, the close cooperation between the Companyand the Vietnamese government was needed regarding oil trading license in Vietnam, importation of raw materials,and exportation of refined oil products. The Company eventually perceived the incongruence of those regulations withoil investment from overseas investors. One regulation, for example, forbids the foreign investors to operate in oil sellingbusiness without the approval form the Prime Minister. So far, however, no single foreign investor has been grantedsuch an approval. Therefore, the Board of Directors agreed to cancel its business in VTN-P and sell all assets to aVietnamese investor. The Company is currently in the process of closure and asset transfer.

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SShareholding and Management Structure

As of October 10, 2007, the list of top ten shareholders including related persons as specified in Section 258of the Securities Act B.E. 2535 is as follows:

Names of Shareholders Number of shares Percent

1. Petro-Instruments Corp. 158,293,625 30.082. Mr. Tawat Ungsuprasert & Spouse 49,533,250 9.353. Mr. Kiat Sittheeamorn 20,336,925 3.864. Mr. Piti Thammamongkol 19,850,000 3.775. Mr. Sompong Chonkadeedumrongkul 16,530,900 3.146. Ms. Montana Janetumnugul 13,933,125 2.657. Mr. Supapong Krishnakan 11,627,000 2.218. Mr. Suwinai Suwanhirunkul & Spouse 10,071,124 1.909. Ms. Viravadee Cholvanich 9,500,156 1.8110. Mr. Satja Janetumnugul 9,277,000 1.76

Total 318,953,105 60.19

Source : List of registered shareholders of Rayong Purifier PLC as of October 24, 2007Note : Based on the paid-up capital of 529,870,229 shares

Shareholding andManagement Structure

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The Management StructureThe Company’s management structure comprises the Board of Directors, Executive Board of Directors, the

Audit Committee, and the Nominating and remuneration Committee.

Board of DirectorsAs of 31 December 2007, the Board of Directors comprises 10 directors as follows:

Name Position1. Mr. Viravat Cholvanich Chairman Of The Board Of Directors2. Mr. Suwinai Suwanhirunkul Director / Managing Director3. Mr. Satja Janetumnugul Director4. Mr. Sumit Chanmatee Director5. Mr. Supapong Krishnakan Director6. Mr. Suthud Khancharoensuk Director7. Mr. Tawat Ungsuprasert Director8. Dr. Vichit Yamboonruang Independent Director / Chairman Of The Audit Committee9. Mr. Arnooparp Charmikorn Independent Director / Audit Committee10. Mr. Bibit Bijaisoratat Independent Director / Audit Committee

Mrs. Siraporn Krishnakan is the Secretary to the Board of Directors. She was appointed to replace Mr. BunlueSripodok as specified in the Board of Directors meeting of 8/2007 on November 9, 2007.

The Authorized SignatoryThe authorized signatory is composed of :

1. Mr. Supapong Krishnakan, Mr. Satja Janetumnugul, Mr. Sumit Chanmatee, and Mr. Suwinai Suwanhirunkul;two of the said four directors jointly sign and stamp with the Company’s seal; or

2. Mr. Supapong Krishnakan, or Mr. Satja Janetumnugul, or Mr. Sumit Chanmatee, or Mr. Suwinai Suwanhirunkul;one of the said four directors jointly sign with Mr. Viravat Cholvanich or Mr. Suthud Khancharoensuk or Mr. TawatUngsuprasert, and stamp with the Company’s seal.

Authority and Responsibilities of the Board of Directors1. The Board of Directors may appoint any person to conduct the Company’s business under the Board’s

supervision or may delegate authority to that person within the timeframe deemed appropriate. However, the Boardmay revoke or alter that authority anytime. The Board assigns the Executive Board to conduct business within the scopeof authority and responsibility of the Executive Board. However, the authority of the Executive Board or the delegation ofauthority thereof to the appointed person(s) will exclude the power to approve transactions that may be in conflict ofinterests with the Company and its affiliated companies, or as specified in the Securities and Exchange Commission’sannouncements and regulations, except for transactions that are in accordance with the prescribed policy and criteriapreviously approved by the Board of Directors.

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2. The Board of Directors has the authority to approve and change the authorized signatory director(s).3. The Board of Directors may approve an interim dividend when the Company has sufficient profits and then

reports the decision to the shareholders in the next shareholder meeting.4. The Board of Directors must comply with laws and the Company’s objectives, Article of Association, as well

as the shareholder resolutions. However, in some cases, the Board must get the shareholders’ approvals prior toimplementation i.e., activities that need shareholders’ approval per law requirement, related party transactions asrequired by SET’s regulation on acquisition or disposal of assets, and those activities as required by related govern-ment agencies.

5. The Board of Directors must convene meet at least quarterly and attended by more than half of the Boardmembers. The Board’s decision is based on majority vote, in which each director has one vote. When the voting isequal, the Chairman of the meeting shall vote for the final decision.

6. The Board of Directors shall arrange for an annual general meeting of shareholders within four months afterthe end of the Company’s fiscal year.

7. A director shall immediately inform the Company once he/she has any conflict of interests in a contract(s)executed by the Company executed or when his/her number of shares or debentures in the Company or affiliates thatthe director holds has increased or decreased.

8. A director shall not conduct any competing business with the Company, be a partner in any businesspartnership, be an unlimited-liability partner in a limited business partnership, or be a director of any private or publiccompany that is operating competitively in similar business to that of the Company. However, the aforesaid require-ments will not be in effect if the shareholders are notified of those conditions prior to appointing the said director to theBoard of Directors.Executive Board

As of December 31, 2007, the Executive Board comprises 4 directors as follows:Name Position

1. Mr. Supapong Krishnakan Chairman of the Executive Board2. Mr. Suwinai Suwanhirunkul Executive Board/Managing Director3. Mr. Sumit Chanmatee Executive Board4. Mr. Satja Janetumnugul Executive Board

Authority and Responsibilities of the Executive Board1. Prescribe policy, objectives, mission, guidelines, and oversee the company’s operation on production and

distribution activities2. Consider and approve the purchase of fixed assets with the amount of not exceeding Baht 50 million. The

approval has to be in accordance with the budget approved by the Board of Directors and complied with the regulationprescribed by the Stock Exchange of Thailand on the acquisition and disposal of assets of the listed companies orrelated party transactions, or those of related authorities.

3. Perform the request for and extension of credit line for the amount of not higher than Baht 50 million.4. Consider and approve in principle for new project investment or business expansion to be proposed to the

Board of Directors for further considerations.

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5. Consider and approve the Company’s general management and operation which exceed the ManagingDirector’s authority.

6. Prescribe the Company’s organization chart and management process as well as that of the ExecutiveBoard of Directors to include all details of the appointment, training, recruitment, and termination of the Company’semployees.

7. Prescribe the policy of the compensation and salary structure.8. Perform other tasks assigned periodically by the Board of Directors.

The Audit CommitteeAs of December 31, 2007, the Audit Committee comprises 3 directors as follows:

Name Position1. Dr. Vichit Yamboonruang Chairman of the Audit Committee2. Mr. Arnooparp Charmikorn Member of the Audit Committee3. Mr. Bibit Bijaisoratat Member of the Audit CommitteeMrs. Siraporn Krishnakan is the Secretary to the Audit Committee.

Authority and Responsibilities of the Audit Committee1. Review the Company’s financial statements to ensure accuracy and adequacy2. Review the Company’s internal control system and internal audit system to ensure appropriateness and

efficiency3. Oversee the compliance with the SEC and SET regulations as well as other related laws and regulations4. Select and propose for appointment the Company’s external auditors as well as the audit fees5. Review the disclosure of connected transactions, or those that may lead to potential conflicts of interest, to

ensure its accuracy and thoroughness6. Produce a report signed by the Chairman of the Audit Committee, and publicized in the Company’s annual

report7. Perform other activities assigned by the Board of Directors and agreed by the Audit Committee

The Nominating and Remuneration CommitteeThe Nominating and Remuneration Committee comprises 4 directors as follows:

Name Position1. Dr. Vichit Yamboonruang Chairman of the Committee2. Mr. Tawat Ungsuprasert Member of the Committee3. Mr. Suthud Khancharoensuk Member of the Committee4. Mr. Bibit Bijaisoratat Member of the Committee

130

Authority and Responsibilities of the Nominating and Remuneration Committee1. Propose the remuneration of Directors and Managing Director thereof to the Board of Director for consideration

and approval2. Nominate Directors and Managing Director and propose to the Board of Director for consideration and

approval3. Perform other tasks assigned by the Board of Directors

The ManagementAs of December 31, 2007, the Company’s managements are as follows:

Name Position1. Mr. Supapong Krishnakan Chairman of the Executive Board2. Mr. Suwinai Suwanhirunkul Executive Board/Managing Director3. Mr. Satja Janetumnugul Executive Board4. Mr. Sumit Chanmatee Executive Board5. Mrs. Siraporn Krishnakan Assistant Managing Director6. Mr. Bunlue Sripodok Senior Executive Officer7. Mr. Somsak Kitsin Senior Executive Officer8. Ms. Kanokporn Jarukulvanich Senior Executive Officer9. Mr. Somboon Sirichainarumitr General Manager—Finance and Administration Function10. Ms. Kallaya Klaithong General Manager Commercial Function11. Mr. Wasun Suetrong General Manager—Manufacturing Function

Authority and Responsibilities of the Managing Director

The Managing Director has the authority and responsibilities to conduct business in accordance with theBoard of Directors’ assignment and shall follow strictly and ethically the Company’s business plan or budget that hasbeen approved by the Board of Directors. The Managing Director shall also act diligently to protect the Company’s andthe shareholders’ best interests. The authority and responsibilities of the Managing Director are described as follows:

1. Oversee and supervise the Company’s routine operation2. Oversee the process of recruitment, appointment, promotion, and salary adjustment, based primarily on the

pre-approval of the related authority in each department3. Consider and approve the purchase of fixed assets with the amount not exceeding Baht 10 million. The

approval must be complied with the Stock Exchange of Thailand’s regulation on the acquisition and disposal of assetsof the listed companies or related party transactions or regulations of related authorities.

4. Prepare and propose the Company’s policy, business plan, and budget to the Board of Directors forapproval and report the progress thereof to the Board of Directors on the quarterly basis.

5. Execute the policy, business plan, and budget, which have been approved by the Board of Directors. Theabove authority of the Managing Director shall not be valid if, in exercising such authority, the Managing Director mayreceive benefits or have potential conflict of interest with the Company.

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The Appointment of Directors and Management

The Company sets up the Nominating and Remuneration Committee to be responsible for the appointment ofdirectors and management. In this regard, an individual who is eligible to be appointed as director and managementof the Company must possess the qualifications as specified in the Public Company Act B.E. 2535, Section 68 and theCompany’s requirement, and shall not be disqualified per the SEC announcement dated March 22, 2000 on request forapproval and Approval to offer new shares. The appointment process is as follows:

Appointment of the Board of Directors

The Board of Directors must comprise at least 5 members but not exceed 15 members. The directors shall beelected by the shareholders in the shareholder’s meeting. At least half of the directors must have permanent residencein Thailand. According to the Company’s Articles of Associations, the shareholder’s meetings shall elect the directorsper the following principles and methods:

1. One shareholder has one vote for one share held.2. Each shareholder can use all of his/her eligible votes to elect only one or many director(s) but cannot split his/

her votes erratically.3. An individual in receipt of the highest number of votes and those in order of descent shall be elected as

Directors as per the required number. In case that two or more individuals receive an equal number of votes whichexceed the available positions, the Chairman of the meeting shall make the final decision.

At every Annual General Shareholder’s Meeting, one-third of the directors shall resign. In case that the numberof directors cannot be equally divided into three parts, the number nearest to one-third shall resign. Those outgoingdirectors may be re-elected.

The authorized signatory comprises the joint signatures from any two directors and stamped with the Company’sseal.

Appointment of the Executive BoardThe Board of Directors elects and appoints the Executive Board by electing from the Company’s directors.

Appointment of the Audit CommitteeThe Board of Directors appoints at least 3 persons who are qualified per the SET’s announcements to be the

members of the Audit Committee with three-year term.

Remunerations for the Directors and Management1. Financial remunerationIn 2006, the fee for 10 directors totaled Baht 10.035 million, paid for the meeting allowances in congruence

with the Company’s performance.

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The fee for 13 Executive Directors and Managements totaled Baht 41.71 million, paid for salary and bonus incongruence with the Company’s performance.

In 2007, the fee for 10 directors totaled Baht 17.810 million, paid for the meeting allowances in congruencewith the Company’s performance.

The fee for 11 Executive Directors and Managements totaled Baht 31.38 million, paid for salary and bonus incongruence with the Company’s performance.

The details of remuneration for individual directors are as follows:

Name Payment (Baht)2006 Payment (Baht)20071. Mr. Viravat Cholvanich 1,440,000.00 2,505,000.002. Mr. Suwinai Suwanhirunkul 900,000.00 1,655,000.003. Mr. Satja Janetumnugul 900,000.00 1,655,000.004. Mr. Sumit Chanmatee 900,000.00 1,655,000.005. Mr. Supapong Krishnakan 900,000.00 1,655,000.006. Mr. Suthud Khancharoensuk 960,000.00 1,675,000.007. Mr. Tawat Ungsuprasert 960,000.00 1,675,000.008. Dr. Vichit Yamboonruang 1,055,000.00 1,805,000.009. Mr. Arnooparp Charmikorn 980,000.00 1,755,000.0010. Mr. Bibit Bijaisoratat 1,040,000.00 1,755,000.00Total 10,035,000.00 17,810,000.00

2. Other forms of remuneration2.1 Warrants

The warrants appropriated to the Board of Directors and Advisor to BOD. consist of 933,900 units as following:

1. Mr. Viravat Cholvanich 84,900 56,600 28,3002. Mr. Suwinai Suwanhirunkul 84,900 56,600 28,3003. Mr. Satja Janetumnugul 84,900 56,600 28,3004. Mr. Sumit Chanmatee 84,900 56,600 28,3005. Mr. Supapong Krishnakan 84,900 56,600 28,3006. Mr. Suthud Khancharoensuk 84,900 56,600 28,3007. Mr. Tawat Ungsuprasert 84,900 56,600 28,3008. Dr. Vichit Yamboonruang 84,900 56,600 28,3009. Mr. Arnooparp Charmikorn 84,900 56,600 28,30010. Mr. Bibit Bijaisoratat 84,900 56,600 28,30011. Mr. Kiat Sitheeamorn 84,900 56,600 28,300Total 933,900 622,600 311,300

Name No. ofAppropriated Warrants

No. of RemainingWarrants for

Appropriation No. 3/3

No. of ExercisedWarrants No.1/3 & 2/3

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Annual Report 2550

- Maturity date of warrants no. 1/3 is November 30, 2005- Maturity date of warrants no. 2/3 is November 30, 2006- Maturity date of warrants no. 3/3 is November 30, 2007

2.2 OthersIn 2006, the Company’s provident fund contribution for 11 Executive Directors (excluding Independent Directors)

and Management was Baht 2.53 million.In 2007, the Company’s provident fund contribution for 11 Executive Directors (excluding Independent Directors)

and Management was Baht 2.15 million.

Corporate Governance

The Company perceives the importance to enforce the corporate governance practices in accordance withthe Corporate Governance Policy across all levels of employees, the Management, and the Board of Directors. Thesepractices are to ensure operating transparency, promote managerial integrity effectiveness, and efficiency across thefirm, for the benefits of shareholders, customers, investors, and the general public.

1. Right of shareholdersThe Company’s Board of Directors perceives the significance of good corporate governance, the internationally

standardized operation, the compliance with SET’s regulations, the rights of shareholders and the promotion of theirrights thereof. The Audit Committee was set up to supervise the business in various aspects so as to promote favorablecorporate culture and corporate governance. This effort is a key factor encouraging the Company to achieve itsdesirable performances and targeted business objectives. As a result, the shareholders will reap the highest benefitout of this practice. In this regard, the Company aims that the Directors and the employees of all levels hold on to thefollowing values:

Perform each task with their best knowledge and capability, along with professional practices, honesty, andmorality

Formulate cooperative solidarity in workplaceHold firmly to rules and regulations and perform for the benefit of the Company, the country and the society as

a wholeCreate mutual interactions and be readily responsive to any circumstances.In 2003, the company registered in the Stock Exchange of Thailand and became a public company. The firm

has a policy to send the inviting letters for a meeting and accompanying documents to the shareholders at least 7 daysearlier, in order to reach the minimum period determined by the law. Moreover, the company has a policy to treat all theshareholders equally. That is, a shareholder can vote independently to elect the board of directors, partake in resolutionmaking, opining, and enquiring the meeting as per the meeting’s agenda and proposed issue. Every shareholder hasthe right and equity to receive correct, well-rounded, and updated information, of which he/she can also check for itsverity. The company has a policy to provide more alternatives for the shareholders by permitting an independentdirector to be entrusted by a shareholder, in the event the latter cannot attend the meeting.

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2. The equity of the shareholdersIn 2003, the company registered in the Stock Exchange of Thailand and became a public company. The firm

has a policy to send the inviting letters for a meeting and accompanying documents to the shareholders at least 7 daysearlier, in order to reach the minimum period determined by the law. Moreover, the company has a policy to treat all theshareholders equally. That is, a shareholder can vote independently to elect the board of directors, partake in resolutionmaking, opining, and enquiring the meeting as per the meeting’s agenda and proposed issue. Every shareholder hasthe right and equity to receive correct, well-rounded, and updated information, of which he/she can also check for itsverity. The company has a policy to provide more alternatives for the shareholders by permitting an independentdirector to be entrusted by a shareholder, in the event the latter cannot attend the meeting.

In the past years, the company’s directors and management have been considering about the eradication ofthe interests’ conflict with prudence, honesty, and independence under the frame of decent morality. This effort is toachieve the overall benefits of the company, transparency, and protection of personal interest through exploitation. Thecompany is in the process of initiating an instruction bill forbidding the directors, management, and operational staffsnot to use the firm and its subsidiary’s internal data which are significant and confidential for the pursuit of personalbenefits. Besides, if there is any interrelated program, the firm will be complied with the criterion and method notifiedby the Stock Exchange of Thailand.

3. The roles of stakeholdersThe company is attentive to the right of the beneficiaries in all groups, be they the internal beneficiaries like

staffs and the Company’s and its subsidiaries’ executives, or the external beneficiaries like competitors, creditor, thegovernmental authority and other related agents. The company actually conducts its operation in compliance with theprovisions of law and other relevant regulations in order to maintain the appropriate care of these beneficiaries. Also, inthe past years, the company has treated all of its staffs equally and fairly by providing appropriate amount of income.The purchase of products and services from the trade partners are done in accordance with the conditions mutuallydetermined in the signed contract. The customers have been well taken care of with responsibility and confidentiality.Also, the company’s conduct has specified the deeds of fair competition by not securing competitors’ confidential datain the inappropriate manner. Finally, the firm has a policy to do business in regard to mutual development and prosperitywith the community.

4. Information Disclosure and TransparencyThe Board of Director is responsible for the Company’s and its subsidiaries’ financial statement and information as

appearing in the annual report. They also oversee the effective internal control system to ensure that the accountingrecords be thorough, accurate, and adequate to maintain the property, and to be notified of possible weaknesses toassure that the financial statements are free of material misstatements.

Investor RelationsAfter being registered in the Stock Exchange of Thailand, the Company has a policy to nominate a person to be

in charge of investor relations. This particular individual will make sure that the disclosure of general and financialinformation, as well as significant data affecting the price of the Company’s stock, be accurate, complete, transparent,and thorough. Such information will be distributed to investors and the public via the following channels:

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1) The Stock Exchange of ThailandList of annual data (Form 56-1)Annual report (Form 56-2)Electronic media (SCP Client)

2) Newspaper3) Magazine4) Television5) Company website6) Shareholder journal7) Face-to-face interview8) Trip to meet domestic and international investors9) Meeting with stock analysts

5. Responsibilities of the Board of DirectorsThe company’s board of directors is composed of well-versed, experienced directors who settle policies,

vision, strategy, goal, mission, business plan, and the firm’s budget. They also govern the management to operate theworks effectively and efficiently as per the determined policy, within the boundary of law, the company’s provisions, andthe resolution of shareholders’ meeting, with honesty, responsibility, and prudence; for the utmost economic value of theenterprise and supreme security of the shareholders. Besides, the company is highly attentive to an internal controlsystem, internal auditing, appropriate method of risk management, including a checking system in order to enable theoperation to be in compliance with the law, to make the utmost effectiveness and efficiency out of the internal controlsystem. Moreover, the board of directors has considered about the settlement and separation of duty and responsibilitybetween the board of directors, the audit committee, the executive board, and the managing director.

Conflict of interestsIn the past years, the company’s directors and management have been considering about the eradication of

the interests’ conflict with prudence, honesty, and independence under the frame of decent morality. This effort is toachieve the overall benefits of the company, transparency, and protection of personal interest through exploitation. Thecompany is in the process of initiating an instruction bill forbidding the directors, management, and operational staffsnot to use the firm and its subsidiary’s internal data which are significant and confidential for the pursuit of personalbenefits. Besides, if there is any interrelated program, the firm will be complied with the criterion and method notifiedby the Stock Exchange of Thailand.

Business ethicsThe company has stood firmly on doing correct deeds in its business path. The directors, management, and

all the staffs of the company have their own parts in doing the duty with honesty, under the law’s boundary and their ownresponsibilities. They shall also exercise the prudent consideration in trading and treatment to others; abstaining fromany conduct which will riskily lead to the company’s infamy or damage, though that action seems to be beneficial to thecompany’s business. However, the company is preparing the Bills of Staff Conduct and Business Conduct for all the

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personnel to be complied with.

The board of director’s check and balanceThe company’s board of directors consists of 10 persons, who are:

Directors who are the executives – 4 persons. Directors who are not the executives – 3 persons. Directors who are independent – 3 persons or 30 % of the whole board.

Unification or separation of rankThe chairman of the board of directors will not be the same person with the firm’s managing director, in order

to give check and balance in administration. More than half of the company’s board of directors is consisted of acoalition of non-executive directors and the independent directors.

Remuneration for directors and managementThe firm has clearly settled the policy on the directors and management’s remuneration. However, the consideration of the

directors’ remuneration is under the approval of the shareholder’s meeting, whereas the management’s remunerationis under the approval of the board of directors. This consideration will be as high as that of the industry to maintain thehighly-qualified directors and management with the firm.

The board of director’s meetingThe company has a policy to send the inviting letters for a meeting with accompanying documents to the

directors’ consideration at least 7 days earlier, in order to reach the minimum period determined by the law. In 2007, theboard of directors had 8 meetings with the written record, and the approved meeting report was kept for the checkingby directors and related persons.

1. Mr.Viravat Cholvanich 8/8 7/82. Mr.Suwinai Suwanhirunkul 8/8 8/83. Mr.Satja Janetumnugul 7/8 8/84. Mr.Sumit Chanmatee 8/8 8/85. Mr.Supapong Krishnakan 8/8 8/86. Mr.Suthud Khancharoensuk 8/8 8/87. Mr.Tawat Ungsuprasert 6/8 5/88. Dr.Vichit Yamboonruang 8/8 8/89. Mr.Arnooparp Charmikorn 8/8 6/810. Mr.Bibit Bijaisoratat 8/8 8/8

Name-Surname The2006meeting record (Times)

The2007meeting record (Times)

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The subcommitteeThe board of directors has appointed the subcommittee board to support on corporate governance, as

follows: The Audit committee with a 3-year term in office. The committee’s body consists of 3 persons, all are the

independent directors. The Nominating and Remuneration Committee with a 3-year term in office. The committee’s body consists

of 4 persons, all are not the Executive Board and the committee’s chairman must be the independent director.

Internal control and audit systemThe firm has clearly settled mission, duty, and operational authority of the operational staffs and executives in a form ofwriting, along with the use of the company’s property for beneficial purposes and the job segmentation of operationalstaffs, control staffs, and assessment staffs; in order to create check and balance.The company has an internal audit office that will do the checking to assure the efficiency and compliance of the firm’smain operation and major financial activities with the law and provisions related to the company. The internal auditoffice is independent, so it can do fully the check and balance. The internal audit office can directly report the auditresult to the audit committee.

Control of the Use of Internal InformationThe Company has informed all executives and management of each division about their duties to report the

number of shares or securities of the Company that are held by them, their spouse and minor children as well as everychange of securities holding occurring as a result of any purchase, sale, transfer or acknowledgement of transfer ofsecurities to the Securities and Exchange Commission according to Clause 59 and Clause 275 of the Securities andthe Stock Exchange Act B.E. 2535.

If any directors, executives or employees violates the Company’s policy on the sale and purchase of securitiesby using internal information, those persons shall be punished or disciplined according to the Company’s rules andregulations which include warning letter, pay cut, temporary forced leave without pay or employment termination. Thelevel of disciplinary action shall depend on the degree of the violation.

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Human Resources1. Human Resources

As of 31 December 2007, the Company and its subsidiaries had 771 employees, which can be broken downby function as follows:

Organization Structure As of 31 December 2006 Organization Structure As of 31 December 2007Function Quantities Function Quantities- General Service 30 - Administration & Finance 68- Finance & Accounting 45 - Supply & Logistics 48- Supply & Logistics 55 - Marketing 70- Marketing 71 - Business & Technical Development 1- Manufacturing 66 - Manufacturing 57- Others 29 - Others 36

Subsidiaries Subsidiaries- PTEC 409 - PTEC 577- RPC Asia - - RPC Asia -- VTN-P 31 - VTN-P -- JTC 31 - JTC 27- PSDC 6 - PSDC 16

- PBC 7- SAP 5

Total 773 Total 912

Remark - Others are employees who are not under any particular function, such as Internal Audit Office,Managing Director’s Office, Legal Office, Special Project Office and Joint Venture Businesses.

2. Remuneration2.1 Financial RemunerationTotal remuneration to the Company’s staff including salaries, overtime, fringe benefits, bonuses and provident

fund contribution for the year 2006 and 2007 were Baht 190.24 million and Baht 216.73 million respectively.2.2 WarrantsOn August 1, 2005, the Company issued 8,490,000 units of warrants (RPC-W1) to the Company’s and its

subsidiaries’ directors, the management, and employees. The maturity dates of the issued warrants are as follows:

No. 1/3: 2,830,108 units, maturity date is November, 2005No. 2/3:2,829,987 units, maturity date is November, 2006No. 3/3: 2,829,905 units, maturity date is November, 2007

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The General Annual Shareholder’s Meeting of 2007 on April 5, 2007 approved the appropriation of non-exercised569,047 units of warrants (ESOP No. 1) to the employees from the managerial level downward, newly-employed andnon-director managements of the Company and its subsidiaries. This action is to uplift the morale and sense ofownership among staffs, as well as build up their motivation for more effective performance.

Since the inception, the Company has never experienced any major labor dispute that has negative impact onthe Company.

Human Resource Development PolicyThe Company sets as its policy to promote staff development in 4 aspects: creativity, responsibility, solidarity,

and sustainable success. In this regard, a concrete direction for staff development has been formulated and theemployees of all levels trained and geared in accordance with the said direction, expecting to increase their efficiencyand preparation for an advanced job level. Aiming to optimize the potential of its human resources, the Company hasbrought the merit system in its consideration regarding wage increase and job promotion, which is based primarily onthe combination of knowledge, competency, outputs, and individual potentials.

Internal Control SystemAccording to the Board meeting no. 1/2008 held on January 16, 2008, the Audit Committee concluded that the

Board of Directors and the Executives have paid a continuous and considerable attention to the internal control system.They have directed their efforts to formulate the internal control system that is sufficient and appropriate with the Company’sbusiness operation. In this regard, proper attentiveness is geared toward asset maintenance, error and damageminimization, financial management, risk management, operation inspection, as well as efforts to promote complianceto existing legal requirements, along with rules and regulations. These measures are to achieve maximum job effi-ciency, and build up confidence in the Company’s business capability to achieve its determined goals and heightenup its added values.

In order that the internal control system be efficient, the Board of Directors has focused the Company’s internalcontrol system to the following 5 sections:

1. Organization and EnvironmentThe Company has formulated its business goal and objectives on a clear, possible, and measurable basis. In

this regard, it has modified the organizational structure to facilitate job efficiency and flexibility, as well as to correspondwith incessantly changing business environments. Hence, the Company has set regulations and penalty rules toprevent the management and employees from engaging in a conflict of interest with the Company. In addition, thepolicy and operational rules regarding financial transactions, selling, purchasing, and managing were also framed onthe basis of fairness to all parties concerned.

2. Risk managementThe Company’s executives have set up a risk policy and an organization to be in charge of risk management.

In this aspect, the risk management committee was founded along with a risk coordinator in each work unit. In additionto providing constant training to the employees on knowledge about risk management, the Company also assigns aperson in charge of risk in each work unit, sets a plan and a measure for risk management, evaluates potentially

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threatening risk factors, formulates a measure for risk reduction, and follows up on risk management procedures ofevery work unit. The risk management committee will subsequently report its performance to the Audit Committee to becontinually forwarded to the Company’s management team.

3. Controlling of the ManagementThe Company has distinctly delineated the scope of authority and responsibility of both the management team

and the employees of all levels. The approval scope of each management level is clearly and appropriately determined,and the operations of subsidiaries and affiliated companies are continuously and constantly supervised to comply withthe existing legal requirements.

4. Information Technology and Communication SystemThe Company has utilized the ERP information technology system to efficiently manage purchasing, selling,

accounting system, inventory, and permanent assets, so that the IT database be made efficient and handy for theexecutive’s decision making. Moreover, additional developments have been brought in to advance the existing ITsystem, e.g. the systems for gas station management, close-circuit TV, and video conferencing. These developmentsaim prominently to facilitate work coordination and supervision, to cover extensive IT usage among employees, and toincrease efficiency of communication channels between the Company and its subsidiaries and affiliated firms.

5. Monitoring SystemThe Board of Directors has conducted a thorough consideration and monitoring on the performance of the

Management team. If any deviation from the preset goal is detected, the Board of Directors will have the Executivescorrect it immediately. In this regard, the Internal Control Committee will report directly to the Audit Committee in duetime, especially when those deviations are critical. A report on correction process and progression should also be filed.

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NNature of businessCompany Background and Major Development

Rayong Purifier Plc (RPC) was established in 1995 by a joint venture between Thai businessmen with extensiveexperiences in the petroleum and the petrochemical businesses and Petro-Instruments Co., Ltd. RPC’s main businessis to refine Condensate Residual (CR), which is a by product from the production process of Thai Aromatics PublicCompany Limited (ATC), into high quality petroleum and petrochemical products such as high-speed diesel oil, fueloil, and petrochemical products for the wholesale and retail businesses. In addition, RPC is granted an fuel-tradinglicense, according to Article 7 of Fuel Trade Act, B.E. 2543 (2000).

Summary of the company history and major developments

1997 Completed plant construction in September1998 Rent oil depot at Payuhakhiri district, Nakornsawan province to support the company’s

expansion1999 Grand opening the first ‘PURE’ gas station at the 202nd Km Phaholyothin road, Nakornsawan

province in FebruaryIntroduced the quality management program ISO 9002 to its plant

2000 Production process was awarded ISO 9002 certification by Bureau Veritas Quality International(BVQI)Rent Sathupradit oil depot and Thonburi oil depot to reduce the disadvantage of not havingits own port for exports.

2001 Export intermediate chemical products to Nanging, ChinaOpen the second “PURE” service station at Maptaput Industrial Estate in RayongOperate an oil depot in Pakthongchai district, Nakornrachasima province to supportexpansion and to service clients in the North eastern region

2002 Received international standard certificates on safety from three organizations, namely OHSAS18001, BS 8800 and TIS 18001Increased registered capital by Baht 150 million to a total of Baht 300 million.Open the third corporate-owned “PURE” service station in Pakthongchai district,Nakornrachasima provinceIncreased investment in Yothin Petroleum Company Limited to support the expansion ofretail business.Increased production capacity from 12,600 barrels/day to 17,000 barrels/day

2003 Rent oil depot in Juksamet, Sattahip district, Chonburi province to be used as export base ofthe company’s products while terminating the rental of Thonburi and Sathupadit oil depots.Awarded ISO 14001Increased registered capital to Baht 336.40 million, divided into 3.364 million ordinary shareswith a par value of Baht 100 per share fully paid up on 24th July 2003Converted into Public Company on 1st August 2003 and increased registered capital to Baht

Nature of business

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415.55 million, divided into 83.11 million shares with a par value of Baht 5 per share,of which Baht 336.40 million, divided into 67.28 million ordinary shares with a parvalue of Baht 5 per share were fully paid up.Offered 15,830,000 new ordinary shares to the public. Subscription period was on12nd-14th November 2003.Registered the Baht 79.150 million capital increase from Baht 336.40 million to Baht415.55 million, divided into 83.11 million ordinary shares with a par value of Baht 5per share with Department of Business Development, Ministry of Commerce on 18thNovember 2003.RPC’s shares started trading on the Stock Exchange of Thailand on 24th November 2003.Upgraded ISO 9002 international quality system from Version 1994 to ISO 9001Version 2000

2004 Registering the value change of ordinary share on November 26th, 2004 from 5 Baht pershare to 1.00 Baht per share with the registered capital of Baht 415.55 million , all are ordinaryshares which amount to 415,550,000 shares.The company’s Ordinary shares have been traded in the Stock Exchange of Thailand for theprice of 1.00 Baht per share on December 1st, 2004.Founded RPC Asia Co., Ltd. on July 27th, 2004Increased shareholding portion in VTN-P from 20% to 60% on April 15th, 2004.

2005 Increased shareholding portion in SCT Petroleum Co., Ltd. from 30% to 99.99%Registered the 8.49 million capital increase from Baht 415.55 million to Baht 424.04 million,divided into 8.49 million ordinary shares reserved to exercise warrant with a par value of Baht1 per share with Department of Business Development, Ministry of Commerce on 18th April 2005.Increase paid up capital from Baht 415.55 million to Baht 418,372,686 according with exerciseESOP-01, No.1/3 on December 8th, 2005.

2006 Yothin Petroleum Co., Ltd changed its name to Pure Thai Energy Co., Ltd on March 31st, 2006Increase paid-up capitals from Baht 424.04 million to Baht 530.04 million by offering106,008,171 new ordinary shares with a par value of Baht 1 per share reserved to stockdividends and ESOP No.2/3 with Department of Business Development, Ministry of Commerce on April 7th, 2006.Paid 104,593,000 stock dividends with a par value of Baht 1 per share amounted to Baht104.59 millionsPaid-up capital increased to Baht 526.26 million on November 2006 by exercised ESOP No.2/3 of 3,294,677 shares with a par value of Baht 1 per share, registered with Department ofBusiness Development, Ministry of Commerce on December 4th, 2006Completed Test-run of VTN-P, a refinery in Vietnam during February 13th – February 28th, 2006Increased number of gas stations from 32 to 56

2007 Start operating Pure Sammakorn Development Co.,Ltd. on June 8th, 2007Changed the name of RPC Asia Co.,Ltd., in which the Company holds 99.99% of shares, to

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Pure Bio-Diesel Co.,Ltd. (PBC), in which the registered capital increased to Baht 200 millionPBC received investment promotion certificate from BOI. Its income from net profit will beexempted for 8 years.RPC paid stock dividends for the 6-moth operation in 2007, with a par value of 0.12 Baht per shareRPC and PBC received the loan of Baht 400 million from Kasikorn Thai Bank to invest in andconstruct of the Bio-Diesel project, with the production capacity of 100,000 tons per year.Paid-up capital increased to Baht 529.87 million on November, 2006 by exercised ESOP of3.6 million shares, with par value of 1 Baht per share, totaling to Baht 3.6 million, registeredwith the Ministry of Commerce on December 4th, 2007Increased number of gas stations from 56 to 72

Business Operation of RPC and SubsidiariesRayong Purifier Public Company Limited (RPC)

RPC engages in the distillation of condensate residue (CR), a by-product from the production process of ThaiAromatics Public Company Limited (ATC), to secure high quality petroleum and petrochemical products, e.g. high-speeddiesel oil, fuel oil, and petrochemical products. RPC’s refinery has a maximum capacity of 17,000 barrels per day or 80million litres per month. Moreover, the Company also procures unleaded gasoline 91 & 95, and high- speed diesel fromother refineries to satisfy consumers’ increasing demand. Besides, to expedite the purchasing and delivery processes,the Company also operates four oil depots facilities in Nakornsawan, Korat, Juksamet, and Rayong.

The Company’s subsidiary companies are as follows:1. Pure Thai Energy Company Limited (PTEC)

RPC holds 99.99% of shares in PTEC with Baht 50 million registered capital, divided into 500,000 ordinaryshares with par value of Baht 100 per share. PTEC engages in retail business of distributing high-speed diesel,gasoline 91 & 95 through PURE service stations.

As of 31st December 2005, PTEC operated 72 PURE gas stations nationwide, categorized into 2 types ofoperation: 1) Company operated stations, and 2) Franchised stations2. Pure Bio-diesel Limited (PBC)

PBC, previously named RPC Asia Limited (RAC), was established on July 27, 2004, with Baht 10 millionregistered capital, divided into 100,000 ordinary shares with par value of Baht 100 per share. PBC, founded primarilyto internationally trading, importing, transferring, storing, producing, mixing, packing, and delivering petroleum productsand chemicals as per the government’s policy on oil trade enhancement. RPC holds 99.99% of shares in PBC.

On May 21, 2007, RAC was changed to Pure Bio-diesel Limited (PBC) with registered capital increasing to Baht200 million, and paid registered capital of Baht 76.5 million on June 30, 2007. Its main operation is to produce bio-dieselwith the capacity of 300,000 litres per day or 100,000 tons per year. The product is to be mixed with regular diesel tocomply with the government’s promotion on renewable energy. The production process is expected to start in August,2008.3. VTN-P Petrochemical Joint Venture Co.,Ltd. (VTN-P)

As of 31st December, 2006, RPC held 60% of shares in VTN-P with registered capital of US$ 3.5 million, and

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paid registered capital of US$ 3.5 million. VTN-P operates a small-scale petroleum and petrochemical factory with theproduction capacity of 2,500 barrels per day. The plant is located on the Mekong River bank in Can Tho city, south ofVietnam. This project has an aim to expand the Company’s business opportunity to the overseas market. The projectalso received an investment license from Can Tho city of Vietnam for tax and business benefits. As of 31st December,2006, the project invested approximately Baht 294 million. The plant construction had been completed and theproduction test was run. However, as of 30th June, 2007, no production for commercial purposes has yet been started.

The Board of Directors convened on 27th April, 2007 (4/2550) and agreed to increase the Company’s shares inVTN-P from 60% to 100% through the purchase of US$ 14 million from the shareholders who have no conflict of interestwith the Company. As of 30th June, 2007, those shares are in the transfer process.

However, the Board of Directors that convened on 24th May, 2007 (6/2550) agreed to have VTN-P sell out its fixedassets and land right to Vinashin Petroleum Investment & Transportation Joint Stock Company at the price of US$ 8.35million or approximately Baht 285 million.4. SCT Petroleum Co.,Ltd. (SCT)

RPC holds 99.99% of shares in SCT with Baht 10 million registered capital, divided into 2,000,000 ordinaryshares with par value of Baht 5 per share, and fully paid up. SCT operates as an oil wholesale trader or jobber andtrades all kinds of petrol products with major and minor dealers nationwide. The products traded are, for example,high-speed diesel, Benzene 91 & 95, and fuel oil. SCT has its subsidiary firms as follows:

Names Business Type Shareholding Ratio by SCT (Percentage)1. Jaturatis Transport Co.,Ltd. Oil Transportation 99.982. Mitsamphan Petroleum Co.,Ltd. Oil Wholesale 99.863. Metro Petroleum Co.,Ltd. Oil Wholesale 99.864. I-sanrungruang Petroleum Co.,Ltd. Oil Wholesale 99.865. Buraparungrot Petroleum Co.,Ltd. Oil Wholesale 99.866. Benja Petroleum Co.,Ltd. Oil Wholesale 99.867. Jatuchak Oil Co.,Ltd. Oil Wholesale 99.86

5. Pure Sammakorn Development Co.,Ltd. (PSDC)PSDC was founded on May 25, 2006 in which RPC holds 51% of shares while Sammakorn Co.,Ltd. holds 49%.

The two companies signed on the joint venture contract on June 15, 2006 with Baht 50 million registered capital,divided into 500,000 ordinary shares with par value of Baht 100 per share, and fully paid up. PSDC engages in landdevelopment in Bangkok and outskirt areas, so that each designated area is occupied with a full-scale communityshopping mall that also accommodates “PURE” gas station. The shopping mall operated its business on June 8, 2006.

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Revenue StructureThe revenues of PRC and its subsidiary firms as of 30th June, 2007 are as follows:

Sales values of PRC and its subsidiary firms

Products 2004Million Bath Percent

2005Million Bath Percent

2006Million Bath Percent

2007Million Bath Percent

DomesticHigh-Speed DieselFuel OilChemicalsBenzene 91Benzene 95Other Petroleum ProductsOthersTotal Domestic Sale Values

7,435.3127.56

495.77790.13173.62

8.842.23

8,931.22

75.750.285.058.051.770.090.02

91.01

10,907.5036.42

645.47900.53157.33

0.66-

12,647.91

74.310.254.406.141.070.00

-86.17

13,321.9558.23

713.041,185.74

143.4022.94

-15,445.29

68.310.303.666.080.740.12

-79.20

14,757.0388.60

400.301,691.03

108.76164.55

-17,201.27

71.090.431.938.150.520.79

-82.91

ExportsHigh-Speed DieselChemicalsOthers (BCM)Total International Sale ValuesIncome of Transportationand other productsGrand Total

176.86705.80

-882.67

-

9,813.89

1.807.19

-8.99

-

100.00

423.121,489.74

58.481,971.34

58.73

14,677.98

2.8810.15

0.4013.43

0.40

100.00

1,247.072,759.49

-4,006.55

50.25

19,502.10

6.3914.15

-20.54

0.26

100.00

522.232,991.42

-3,513.65

34.66

20,758.58

2.5214.41

-16.93

0.16

100.00

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Sales volumes of PRC and its subsidiary firms

Products 2004Million Bath Percent

2005Million Bath Percent

2006Million Bath Percent

2007Million Bath Percent

DomesticHigh-Speed DieselFuel OilChemicalsBenzene 91Benzene 95Other Petroleum ProductsTotal Domestic Sale Volumes

585.474.10

39.4349.2410.38

0.81689.44

76.480.545.156.431.360.11

90.07

ExportsHigh-Speed DieselChemicalsOthers (BCM)Total International Sale VolumesGrand Sale Volumes

617.513.49

37.7643.06

7.310.03

709.17

75.180.434.605.240.890.00

86.34

577.725.60

36.3148.50

5.920.96

675.02

65.140.634.095.470.670.11

76.11

647.578.12

21.1664.82

4.136.60

752.4

68.770.862.256.880.440.70

79.41

13.2762.78

-76.05

765.48

1.738.20

-9.93

100.00

24.2384.67

3.29112.19821.35

2.9510.31

0.4013.66

100.00

65.57146.32 -

211.89 886.91

7.3916.50

- 23.89100.00

28.65160.56

-189.21941.60

3.0417.05

-20.09

100.00

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RRisk Factors

While operating in business, the Company has to encounter with numerous kinds of risks. Hence, it needs toinitiate a concrete plan to deal with those risks as following:

Risk associated with refinery process:This type of risk concerns the mechanical break-down that may disrupt the production process. To restart the

machine inevitably incurs energy costs, as well as opportunity costs.To handle this risk factor, the Company has conducted the following procedures:

Put more raw materials on reserve. In this regard, the Company’s maximum production capacity thatis still higher than actual production, along with oil reserves in 4 depots, renders the Company the capability to haveproducts readily available for sales for more than 10 days.

Capable of increasing production capacity to its full extent in order to make up for the opportunity lossdue to disrupted production that might happen because of the mechanical breakdown. In addition, reserves in oildepots are readily available for being used in the production process.

The distillation process is being monitored 24 hours a day by skilled and experienced engineeringteams utilizing the Distribution Control System. This system is capable of monitoring the distillation process accuratelyand efficiently.

The computerized Process Simulation program is being used to ensure efficiency and energy saving, aswell as to generate the required quantity and quality of products.

Products are being controlled with the ‘Material Balance’ program, so that any changes regarding thevolumes of raw material and products are made available.

The ‘Cedar’ program is used to keep records of regular checking and maintenance, in accordancewith the policy of continuous and proactive machine maintenance.

OutcomesThroughout 2005, only 4 hours of unplanned shut down took place while none occurred in 2006 and2007.The Company was awarded with ISO 9002 quality standard in 2000.The Company was assured of quality production process by Bureau Veritas Quality International(BVQI), the worldwide renowned assurance institute.The Company was awarded with ISO 9001 Version 2000 quality standard in 2005 and ISO 9001Version 2004 in 2006—the most updated quality management assurance of the worldwide renownedSGS.

Risk associated with main raw material procurement:The Company purchases its main raw material, Condensate Residue (CR), from Thai Aromatics Public Com-

pany Limited (ATC) via PTT Public Company Limited. The CR is transferred to the Company through the 3.0 km longpipeline. Hence, any disruption to ATC’s production process due to the maintenance process or other problems, or anydamage to the CR pipeline, will halt the transfer of CR to the Company, and hence directly affect its production process.

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To handle this risk factor, the Company has conducted the following procedures:Cooperate with ATC on the regular basis, so that the Company, once being notified six months in

advance about ATC’s maintenance plan, can formulate its plan for oil reserve and for the annual maintenance accordingly. In thisregard, ATC has already set up CR reserves before maintenance shutdown to provide adequate quantity of CR to theCompany.

In case that ATC is incapable of providing CR to the Company for a long period of time, the Companymay purchase finished products from other refineries or oil traders, for selling to the customers. The Company willnevertheless receive lower profit margin than usual.

Conducting regular check-ups and maintenance of CR pipeline.A system of CR management being formulated, with the capacity of reserving raw materials sufficient

for 10 days non-stop production.Attempting to reduce dependency on one main raw material, and currently being in the negotiation

process to procure crude oil from other domestic and international sourcesNegotiating to get compensation when the Company receives CR of lower quality standard and

specifications. This incident took place during the third quarter of 2006, incurring higher costs of product qualityreadjustment and other kinds of losses. The Company later cooperated with ATC to help prevent the occurrence of thesimilar incident in the future. As a result, throughout 2007, the Company received CR with the quality and specificationas declared in the contract.

Risk associated with the agreement for purchase & sale of Condensate Residue:This type of risk occurs when the demand in the Company’s products is lower than the amount of purchased

CR specified in the contract. This will subsequently result in excess CR or excess finished products, and laterincreasing the Company’s storage cost for these excesses.On 8th August, 1995, the Company signed the 15-

year Agreement for Purchase & Sales of Condensate Residue with PTT starting from the commercial operation date on1st February, 1997. This agreement binds the Company to purchase all of the CR produced by ATC in the amount of notexceeding 585,000 tons per year (approximately 12,600 barrels per day). On the contrary, the Company has no long-termselling contracts with any specific distributors even though the demand of the Company’s products has so far beensatisfactorily abundant with no excess left each year.

To handle this risk factor, the Company has conducted the following procedures:The Company is still capable of expanding its market shares if adequate quantities of products are

made available. At present, the Company has only 3% of diesel market share, and the demand of high-speed dieselwhich is the Company’s primary product, is still in the continuous growth.

The Company is planning on enlarging its customer base through the available wholesale, retail, andindustrial distribution channels.

Risk from having a sole provider of raw material:This type of risk originates from the possibility that PTT may terminate the contract after the due date in 2012.

The Company signed the 15-year Agreement for Purchase & Sales of CR with PTT solely, and after the duration of 15year, the contract shall continue thereafter on an evergreen basis with one-year time written notice of termination byeither party.

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However, the Company believes that the long-term contract will be renewed due to their mutual positiverelationship. During 2006-2007, the Company signed a contract to periodically purchase CR in order to augment itsoverall production capacity.

To handle this risk factor, the Company has conducted the following procedures:Attempting to secure raw materials from other sources, so as to reduce its sole dependency on PTTAttempting to find alternative raw materials to substitute CR. In 2003 and 2005, the Company tried

using crude oil from domestic resources in the distillation process, to find out that the existing refining facility couldaccommodate this raw material with some minor adjustments.

Risk associated with price fluctuation of raw materialThe Company has rather low risk concerning fluctuated price of raw materials. This is due to the fact that CR

price is based on the refined oil price in Singapore market or Mean of Platt’s Singapore (MOPS) of 4 products: Naphtha,Kerosene, Gas Oil and Fuel Oil. The Company’s raw material cost structure is then different from other refineries, ofwhich raw material costs are based on the world’s crude oil price.

However, the Company’s sale revenues depend on ex-refinery price in local market, which is also based on therefined oil price of Singapore market. With the same structure of sale revenues and raw material costs, its gross refinerymargin is quite stable and has low fluctuation. This is another point that makes the Company differ from other refineries,of which gross refinery margins are in high fluctuation according to price uncertainty of the world’s crude and refined oilprompted by uncontrollable external factors.

Risk associated with price fluctuation of refined oilEven though the Company’s sale revenues and raw material cost structure are based on the refined oil prices

in Singapore’s spot market, the Companies still carries risk concerning the fluctuation of refined oil prices in Singaporeand world markets, caused primarily by uncontrollable external factors as following:

Changes of the world’s economic and political situations, as well as those in the regions wherenational gas and crude oil are produced, particularly in the Middle-East

Determining and maintaining quota in natural gas and crude oil production by the Organization ofPetroleum Exporting Countries (OPEC) and other petroleum producing countries

Demand and supply of natural gas, crude oil and finished petroleum products both globally andregionally

Government’s related rules and regulations in the domestic and international levelsWeather conditionsGlobal economic circumstances

The important risk occurring from the fluctuation of oil prices is depreciation of gross margin. Raw materialprice moves according to the monthly average price of MOPS (Mean of Platt’s Singapore) of 4 products comprisingNaphtha, Kerosene, Gas Oil and Fuel Oil, and varies proportionately at the delivery date in Singapore’s spot market.The Company’s selling prices, however, are based on those listed in the domestic market, which is determined by theaverage price at MOPS at the date of products sold. The average price of MOPS may change during the lapse time ofthe date of raw material delivered and date of products sold. This eventually results in the fluctuation in gross margin.To reduce the risk of price movements on revenue and cost, the Company has been monitoring and managing theproduction time so that the interval period between the raw material delivery and product sales is minimized. At present,

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the lapse time is less than 3 days or equivalent to the amount of not more than 5 million litres of refined oil.

Risk associated with Government’s intervention on priceThis risk basically stems from the possibility that the government may have to intervene to determine the

finished oil price within the country, especially during the skyrocketing price of crude and finished oils in the worldmarket. This is an effort to control inflation rate for the nations’ benefit as a whole. However, this intervention maynegatively affect the Company’s business operation and financial status.

However, the Company does not perceive high impact from the government’s intervention. This is due to thefact that the intervention measure is usually conducted on the short-term basis so as to alleviate hardship during theperiod of skyrocketing global oil price. Moreover, while setting the low price for consumers, the government actuallyreimburses the refinery business for any lost revenues resulting from the intervention. Therefore, the Company’s grossrefinery margin was not affected. Moreover, the Company has put an incessant endeavor to manage its inventory so asto reduce the said impact on the Company as much as possible.

Risk associated with safety concern and dangers arising from potential accidents or unprecedented eventsThis risk concerns potential mistakes or accidents that may take place in, and cause tremendous loss to, the oil

refinery plant and/or oil depots. In this instance, the surrounding communities will be inevitably and badly affected.To handle this risk factor, the Company has conducted the following procedures:

Implementing a modernized safety management system so as to reduce possibly incurred lossesfrom accidental disasters

Assessing potential risks in every spot that may cause damage to the Company’s properties, as well asinjury to the employees

Installing fire prevention and extinguishing equipments with the standard approved by NFPA (Na-tional Fire Protection Association), U.S.A.

Providing regular practical trainings on fire control and fire drills, as the preparation measure fordealing with emergency. Firefighters, equipments, and tools are made readily available for prompt usage. In thisregard, the outcome of each fire drill is reported to the relevant provincial government agency.

Closely cooperating with related outside organizations such as the Industrial Estate so as to build upconfidence in the Company’s effective and efficient fire-fighting facilities

Operating Bio-aid and safety system

OutcomeThe Company received three certificates for safety system assurance—OHSAS18001, BS 8800 and

TIS 18001 from SGS Company Limited.The Company was awarded with ISO 14001 for environment management system.The Company was awarded with ISO 9000 Version 2000 to replace ISO 9002 Version 199 which

expired on 8th January, 2004, and further upgraded to ISO 9000 Version 2004 in 2006.Risk associated with fluctuation of Baht Currency Denomination

This type of risk may occur due to the direct and indirect impacts of Baht currency fluctuation on the Company.

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This is due to the fact that, although the Company’s main revenue and cost of raw material is in Baht currency, the refinedoil price and the cost of CR are fluctuating with the global market prices. Additionally, the Company has also earnedforeign currency from its exports.

To handle this risk, the Company puts efforts in the following procedures:The effect from the fluctuation of the exchange rate on revenue will partly be offset with the cost of CR,

which is also subject to exchange rate fluctuation (natural hedging).To prevent risk from the fluctuation in exchange rate, the Company has a policy to enter into a forward

contract for the net balance between account receivable and account payable that are in foreign currency. On 31st

December, 2007, the Company bought a forward contract amounted to US$ 10.2 million, most of which has a contractduration of less than 1 year.

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Related Transactions

Related transactions between the Company and persons who have potential conflict of interests during 2004-2005 are as follows:Related Transaction between the Company and BAC Brother Co., Ltd. (BAC)Type of inter-transaction

RPC paid pickup rentalfee to BAC who is theRefinery Management Consultant

Type of connection

Mr. Suwinai Suwanhirunkul is acommon director

Mr. Suwinai Suwanhirunkul andhis spouse hold 99.99% of BAC

Amount (Million Baht)2006 20070.07 -

Type of inter-transaction

1.) RPC and its subsidiariesbought equipment andpaid maintenance servicefee to SAP2.) RPC booked management feerevenue from SAP

Type of connection

The company’s management teamnamely Ms.Kanokporn Jarukulvanich isthe director of SAP

The company’s management teamnamely Ms.Kanokporn Jarukulvanich isthe director of SAP

Amount (Million Baht)2006 20075.75 -

3.56 -

Related Transaction between the Company and SCT Sahaphan Co., Ltd. (SAP)

Type of inter-transaction

RPC paid service fee toJazzy who is produceadvertising and all PublicRelation Advertising

Type of connection

Mr. Supapong Krishnakanis a common director

Amount (Million Baht)2006 20071.02 0.69

Related Transaction between the Company and Jazzy Creation Co., Ltd. (Jazzy)

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Type of inter-transaction

RPC and its subsidiariespurchased equipment from PICO

Type of connection

Mr. Satja Janetumnuguland Mr. Suthud Khancharoensukare common directors

Amount (Million Baht)2006 20070.28 0.17

Related Transaction between the Company and Petro-Instruments Corp (PICO)

Type of inter-transaction

RPC paid deposit of land

Type of connection

Mr. Arnooparp Charmikornis a director

Amount (Million Baht)2006 200710.0 -

Related Transaction of Globalization Economic and Promotion Network Co., Ltd

Type of inter-transaction

RPC paid for equipments

Type of connection

Mr. Supapong Krishnakan isa director

Amount (Million Baht)2006 20070.30 -

Related Transaction of Alt Energy Co., Ltd.

Type of inter-transaction

RPC paid for air tickets

Type of connection

Mr. Bibit Bijaisoratat is a director

Amount (Million Baht)2006 20071.12 1.27

Related Transaction of Blue Planet Travel Co., Ltd.

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MManagement’s Analytical Report

The Company’s main revenues originated from sales of refined oil such as high-speed diesel, gasoline 91 &95, chemicals and fuel oil. In 2007, the total sales of refined oil and chemical products were Baht 20,723.92 million,rising 6.54% from the amount of Baht 19,451.85 million in 2006. The average unit price per litre rose from 21.93 Baht in2006 to 22.01 Baht in 2007. The total sales volumes in 2007 amounted to 942 million litres, increasing 6.17% from thoseof 887 million litres in 2006. Sales growth stemmed basically from higher production capacity and higher oil price.

In 2007, the expenses of the Company and its subsidiaries were Baht 20,238.29 million, rising 4.96% from theamount of Baht 19,281.01 million in 2006. The major expenses were cost of sales, and selling and administrativeexpenses. Cost of sales increased Baht 877 million, or 4.66%, from Baht 18,836.80 million (average of 21.24 Baht perlitre) in 2006 to Baht 19,713.80 million (average of 20.93 Baht per litre) in 2007. The rising cost of sales was due mainlyto an increase of sales volumes and raw material costs associated with higher oil price.

In 2007, the Company’s selling and administrative expenses amounted to Baht 524.48 million, or an increaseof 18.02% from those of Baht 444.21 million in 2006.

The Company’s net profits in 2007 were Baht 400.69 million, increasing Baht 217.31 million or 118.50% fromBaht 183.38 million in 2006.

Rayong Purifier Public Company Limited and its subsidiaries would like to clarify the 118.50% or 217.31 MillionBaht increase in Company’s Net Profit in 2007 compared to 2006. The key factors that caused the increase from NetProfit of 183.38 Million Baht in 2006 to Net Profit of 400.69 Million Baht in 2007 can be summarized as follows:

1. Increase in Gross ProfitIn 2007 the Company’s Gross Profit was increased by 380 Million Baht or 57% compared to the same period in 2006.The increase can be clarified as follows:

Increase in Sales VolumeSales Volume in 2007 increased 6% or 55 Million Litre from 887 Million Litre in 2006 to 942 Million Litre in 2007 whichderived from the increase of production as the volume of crude supply increased.

Decrease in Cost of Sales due to Raw Materials QualityThe Cost of Sales in 2006 was higher than normal because the supplier suddenly delivered Raw Materials with qualitymuch differ from that specified in the Agreement and what have always been supplied to the Company. Therefore, theCompany had to incur additional costs for product improvement and other related costs amounting up to approxi-mately 136.45 Million Baht. The supplier agreed to compensate 52.7 Million Baht for these losses. During 2007 thesupplier delivered normal quality Raw Materials, therefore, there was no product improvement costs needed in 2007.

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Increase in World Oil PriceThere was Inventory Gain in 2007 due to the increase of world oil prices. Gas Oil prices in Singapore market sharplyand constantly increased more than 40 USD/BBL from average 66 USD/Barrel in January 2007 to average 106 USD/Barrel in December 2007. In the contrary, there was Inventory Loss in 2006 from Gas Oil prices decrease in Singaporemarket during that year.

2. Selling and Administrative ExpensesIn the 2007 the Selling and Administrative Expenses of the Company was 80 Million Baht or 18% increased comparedto 2006. This was the result of increase in Administrative Expenses of the Company and its subsidiaries due to theincreasing number of the Company’s gas stations and 2007 was the first commercial year for Pure Sammakorn Devel-opment Co., Ltd., the Company’s subsidiary.

3. Decrease in Interest ExpensesThe Interest Expenses in 2007 was 31 Million Baht, 11 Million Baht or 26% decreased from 2006 since the interest ratesdecreased in 2007. At the same time, there were less requirements for Short Term Financing from the increase ofCompany’s Cash Flow compared to the same period last year.

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Statement of Board of Directors’ Opinion on Financial StatementThe Board of Directors is responsible for the financial statement and information of Rayong Purifier Public

Co.,Ltd. and its subsidiaries as appeared in the annual report. The financial statement was prepared according to thegenerally accepted accounting standards using appropriate accounting policies with consistent practices. The judgmentthereof was exercised cautiously with the best applicable estimates and adequate disclosure of important informationin the financial remarks.

The Board of Directors has provided and maintained the efficient internal control system, to assure that theaccounting records be thorough, accurate, and adequate to keep all assets, and to be notified of possible weaknessesto assure that the financial statements are free of material misstatements.

In this aspect, the Board of Directors has authorized the Audit Committee comprising non-executive committees tosupervise the quality of financial statement, and the internal control system. Their opinion thereof appears in the reportof Audit Committee.

The Board of Directors perceived that the Company’s overall internal control system is in the acceptable andreliable level as appearing in the financial statement of the Company and its subsidiaries as of 31st December, 2007.

SStatement of Board of Directors’Opinion on Financial Statement

Mr. Viravat CholvanichChairman of the Board of Directors

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Audit Committee’s ReportThe Audit Committee of Rayong Purifier Public Co., Ltd. consists of three independent directors from outside

organization as follows:1. Dr. Vichit Yamboonruang Chairman of the Audit Committee2. Mr. Arnooparp Charmikorn Member of Audit Committee3. Mr. Bibit Bijaisoratat Member of Audit CommitteeThe Audit Committee has performed its duties by adhering to the Board of Directors’ assignments under

regulations concerning audit committee and supporting the Company’s good corporate governance on accountability,risk management evaluation, audit of internal control system, and internal audit.

In 2007, the Audit Committee arranged five meetings with executives, internal auditors and independentauditors whose responsibilities are related to the agenda. The Audit Committee’s performances can be concluded asfollows:

Financial Statement:The Audit Committee reviewed quarterly financial statements and audited the 2007 financial statement with the

management and External Auditors to ensure that the financial statements of the Company, subsidiaries and affiliatedcompanies were correctly prepared with adequate information disclosure and compliance with generally acceptedaccounting standards. Moreover, the Audit Committee made observations and recommendations to solve problems forthe Company’s benefits.Connected Transactions

The Audit Committee reviewed the disclosure of connected transactions that may create conflict of interestswith the Company to ensure that these were actual transactions incurred during a normal course of business, with whichthe Company complied based on the government’s requirements, the Stock Exchange of Thailand’s regulations andcorporate governance policy.

Internal Control SystemThe Audit Committee reviewed the 2007 audit plan and recommended the Internal Audit Office for more

effective and efficient operation and follow-up.The Audit Committee continuously revised the significant result of the audit reports to ensure that all depart-

ments of the Company had good control system and prevent or mitigate possible risks. The scope of auditing wasexpanded to subsidiaries and affiliated companies.

Risk ManagementThe Audit Committee reviewed risk management policy and progress of risk management as operated by the

Risk Committee with regards to policy, operating plan, cooperation, as well as in-charge personnel from related workunits, so as to build up efficiency and linkage with internal control.Compliance with the government’s rules and regulations

The Audit Committee reviewed compliance results to be in line with laws and requirements concerningsecurities and the Stock Exchange of Thailand, and other relevant rules and regulations governing the Company’s

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business. The results were consistently reported to the Audit Committee to ensure that the Company correctly compliedwith all related rules and regulations.

Good Corporate GovernanceThe Company has committed to operate business in accordance with Good Corporate Governance. The

Audit Committee reviewed that information was adequately and accurately disclosed to ensure good governance,transparency, and ethics, so as to create confidence among shareholders, investors, employees and other stakeholders.

Selection of the External AuditorBased on accounting audit charge, reputation, scope, and auditor’s volume of work, the Audit Committee

proposed to the Board of Directors to secure an approval from shareholders to re-appoint Ernst & Young Co.,Ltd., as theCompany’s accounting auditor for the 2008 accounting period.

The Audit Committee considered that the Company paid attention to good corporate governance. The efficiencyof its internal control system was adequate with no significant mistake. It has efficient risk management and theCompany’s financial statement and information disclosure were completed and correct in accordance with generallyaccepted accounting standards. The Company completely and accurately disclosed information concerning connectedtransactions that might lead to conflict of interests and adhered to related laws, rules, regulations and requirements.

On behalf of the Audit Committee

(Dr. Vichit Yamboonruang)Chairman of the Audit Committee

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Report of Independent AuditorTo the Board of Directors and Shareholders of Rayong Purifier Public Company

LimitedI have audited the accompanying consolidated balance sheet of Rayong Purifier Public Company Limited

and its subsidiaries as at December 31, 2007 and 2006, and related consolidated statements of income, changes inshareholders’ equity and cash flow for the years then ended, and have audited the separate financial statements ofRayong Purifier Public Company Limited for the same period. These financial statements are the responsibility of theCompany’s management as to their correctness and the completeness of the presentation. My responsibility is toexpress an opinion on these financial statements based on my audit. I did not audit the financial statements for the yearended 31 December 2007 and 2006 of one subsidiary in Vietnam, which is included in these consolidated financialstatements. As at 31 December 2007 and 2006, this subsidiary has total assets of Baht 207 million and Baht 235 million,respectively, and total revenues for the year ended 31 December 207 and 2006 are, in order, Baht 0.3 million and Baht38 million. The financial statements of the subsidiary were audited by another auditor, whose report has been furnishedto me, and my opinion, insofar as it relates to the amounts of various transactions of this subsidiary included in theconsolidated financial statements and the separate financial statements of the Company, is based solely on the reportof that auditor.

I conducted my audit in accordance with generally accepted auditing standards. Those standards requirethat I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financial statement presentation. I believe that my audit,together with the report of another auditor discussed in the first paragraph, provides a reasonable basis for my opinion.In my opinion, based on my audit and the report of another auditor, the financial statements referred to above presentfairly, in all material respects, the financial position of Rayong Purifier Public Company Limited and its subsidiaries andof only Rayong Purifier Public Company Limited as at 31 December 2007 & 2006, and the results of their operations andcash flow for the year then ended, in accordance with generally accepted accounting principles.

Not stating conditional opinion on the aforesaid financial statements, I hereby noted as appearing in Item 4.1of the financial remark dated on January 1, 2007, the Company’s change of the accounting policy regarding theinvestments in subsidiaries presented in the separate financial statement, from the equity method to the cost method.The Company readjusted the separate financial statement as at December 31, 2006 and for the year then end, to reflectthe said change of accounting policy. The calculation of the inventory costs as appearing in Item 4.1 of the financialremark of the Company and its subsidiaries from first in-first out to weighted average, and that has no significant impacton the Company’s financial statements.

Vissuta JariyathanakornCertified Public Accountant (Thailand) No. 3853

Ernst & Young Office LimitedBangkok : 22 February 2008

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RAYONG PURIFIER PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES AUDIT REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2007 AND 2006

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Report of Independent Auditor To the Shareholders of Rayong Purifier Public Company Limited I have audited the accompanying consolidated balance sheets of Rayong Purifier Public Company Limited and its subsidiaries as at 31 December 2007 and 2006, the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended, and the separate financial statements of Rayong Purifier Public Company Limited for the same periods. These financial statements are the responsibility of the management of the Company and its subsidiaries as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I did not audit the financial statements for the year ended 31 December 2007 and 2006 of one subsidiary in Vietnam, which is included in these consolidated financial statements. As at 31 December 2007 and 2006, this subsidiary had total assets of Baht 207 million and Baht 235 million, respectively, and total revenues for the years ended 31 December 2007 and 2006 are Baht 0.3 million and Baht 38 million, respectively. The financial statements of the subsidiary were audited by another auditor, whose report has been furnished to me, and my opinion, insofar as it relates to the amounts of the various transactions of this subsidiary included in the consolidated financial statements of the Company, is based solely on the report of that auditor. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the 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, together with the report of the another auditor discussed in the first paragraph, provide a reasonable basis for my opinion. In my opinion, based on my audits and the report of another auditor, the financial statements referred to above present fairly, in all material respects, the financial position of Rayong Purifier Public Company Limited and its subsidiaries and of Rayong Purifier Public Company Limited as at 31 December 2007 and 2006, the results of their operations, and cash flows for the years then ended, in accordance with generally accepted accounting principles.

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Without qualifying my opinion on the above financial statements, I draw attention to the matter as discussed in Note 4.1 to the financial statements whereby, effective 1 January 2007, the Company changed its accounting policy for recording investments in subsidiaries in the separate financial statements from the equity method to the cost method. The Company has thus restated the separate financial statements as at 31 December 2006 and for the year then ended to reflect this accounting change. The Company and its subsidiaries have changed the calculation method of inventory cost from first-in first-out method to weighted average method, as discussed in Note 4.2 to the financial statements. The effect of this change is immaterial to the Company’s financial statements.

Vissuta Jariyathanakorn

Certified Public Accountant (Thailand) No. 3853 Ernst & Young Office Limited Bangkok: 25 February 2008

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RAYONG PURIFIER PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2007 AND 2006

1. GENERAL INFORMATION

Rayong Purifier Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the manufacture and trading of fuel oil and petrochemical products and its registered office, which is the head office, is located at 19 SCB Park Plaza East, Ratchadapisek Road, Khwang Chatuchak, Khet Chatuchak, Bangkok. The Company’s branch, which is the plant, is located at 7/3 Pakorn Songkrohrad Road, Map-ta-phut, Muang, Rayong. In addition, the Company has 4 oil depots dispersed across the various regions of Thailand.

The Company’s major shareholder is Petro-Instrument Company Limited, a limited company under Thai laws, which as at 31 December 2007 held 29.87 percent (2006: 30.27 percent) of the issued and paid-up capital of the Company.

2. BASIS OF PREPARATION

2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation

a) The consolidated financial statements include the financial statements of Rayong Purifier Public Company Limited and the following subsidiaries:

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Assets as a percentage Revenues as a percentage to the consolidated to the consolidated Percentage of Place of total assets total revenues for the years

Company’s name Nature of business shareholding incorporation as at 31 December ended 31 December 2007 2006 2007 2006 2007 2006 Percent Percent Percent Percent Percent Percent Pure Thai Energy Co., Ltd. Trading of fuel oil 100 100 Thailand 8.9 6.5 13.5 8.4 SCT Petroleum Co., Ltd. Trading of fuel oil 100 100 Thailand 7.7 8.8 39.6 41.1 and its subsidiaries Pure Biodiesel Co., Ltd. Manufacture & trading of 100 100 Thailand 3.4 0.3 - - (formerly known as petroleum and petrochemical “RPC Asia Co., Ltd. ”) products VTN-P Petrochemical Manufacture & trading of 60 60 Vietnam 5.4 7.1 - 0.2 Joint Venture Co., Ltd. petrochemical products Pure Sammakorn Real estate rental and 51 51 Thailand 2.3 1.8 0.1 - Development Co., Ltd. service

b) The financial statements of overseas subsidiaries are translated into Thai Baht at the closing exchange rate as to assets and liabilities, and at monthly average exchange rates as to revenues and expenses. The resultant differences have been shown under the caption of “Translation adjustment” in shareholders’ equity.

c) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements.

2.3 The separate financial statements, which present investments in subsidiaries presented under the cost method, have been prepared solely for the benefit of the public.

3. ADOPTION OF NEW ACCOUNTING STANDARDS

The Federation of Accounting Professions (FAP) has issued Notifications No. 9/2550, 38/2550 and 62/2550 regarding Accounting Standards. The notifications mandate the use of the following new Accounting Standards.

a) Accounting Standards which are effective for the current year

TAS 44 (revised 2007) Consolidated Financial Statements and Separate Financial Statements TAS 45 (revised 2007) Investments in Associates TAS 46 (revised 2007) Interests in Joint Ventures

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These accounting standards become effective for the financial statements for fiscal years beginning on or after 1 January 2007. During the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiaries in the separate financial statements in order to comply with the revised Accounting Standard No. 44 as discussed in Note 4.1 to the financial statements. However, Accounting Standards No. 45 and 46 have no impact on the financial statements since the Company does not have investments in associates and jointly controlled entities.

b) Accounting Standards which are not effective for the current year

TAS 25 (revised 2007) Cash Flow Statements TAS 29 (revised 2007) Leases TAS 31 (revised 2007) Inventories TAS 33 (revised 2007) Borrowing Costs TAS 35 (revised 2007) Presentation of Financial Statements TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors TAS 41 (revised 2007) Interim Financial Reporting TAS 43 (revised 2007) Business Combinations TAS 49 (revised 2007) Construction Contracts TAS 51 Intangible Assets

These accounting standards will become effective for the financial statements for fiscal years beginning on or after 1 January 2008. The Company’s management has assessed the effect of these revised accounting standards and believes that they will not have any significant impact on the financial statements for the year in which they are initially applied.

4. CHANGE IN ACCOUNTING POLICY

4.1 Recording of investments in subsidiaries in the separate financial statements

During the first quarter of the current year, the Company changed its accounting policy for recording investments in subsidiaries in the separate financial statements from the equity method to the cost method, in compliance with Accounting Standard No. 44 (revised 2007) regarding “Consolidated Financial Statements and Separate Financial Statements”, under which investments in subsidiaries, jointly controlled entities and associates are to be presented in the separate financial statements under the cost method.

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In this regard, the Company has restated the previous period’s separate financial statements as though the investments in the subsidiaries had originally been recorded using the cost method. The change has the effect of increasing net income in the separate income statement for the year ended 31 December 2007 by Baht 2.26 million (Baht 0.004 per share) (2006: decreasing by Baht 18.96 million (Baht 0.04 per share)). The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the change in accounting policy for investments in subsidiaries” in the separate statements of changes in shareholders’ equity.

Such change in accounting policy affects only the accounts related to investments in subsidiaries in the Company’s separate financial statements, with no effect to the consolidated financial statements.

4.2 Inventory valuation

Since 1 January 2007, the Company and its subsidiaries have changed the calculation method of inventory cost from first-in first-out method to weighted average method, in order to reflect an actual operation and in accordance with the same basis of other companies in petrochemical industry in Thailand. The effect of this change is immaterial to the Company’s financial statements. This change of inventory costing method is approved by the Revenue Department.

5. SIGNIFICANT ACCOUNTING POLICIES

5.1 Revenue recognition

Sales of goods

Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances.

Revenue from transportation service

Revenue from transportation service is recognised on an accrual basis when service has been rendered.

Financial Statement

Management fee income

Management fee income is recognised on an accrual basis in accordance with the terms and conditions

specified in the contracts.

Interest income

Interest income is recognised on an accrual basis based on the effective interest rate.

Dividends

Dividends are recognised when the right to receive the dividends is established.

5.2 Cash and cash equivalents

Cash and cash equivalents consist of cash in hand, cash at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

5.3 Trade accounts receivable

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debtor aging.

5.4 Inventories

Inventories are valued at the lower of cost (weighted average method) and net realisable value. Cost of work in process and finished goods produced includes raw materials, direct labour and production overheads.

5.5 Investments

a) Investments in securities held for trading are stated at fair value. Gains or losses arising from changes in the carrying amounts of securities are included in determining income.

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b) Investments in debt securities, both due within one year and expected to be held to maturity, are recorded at amortised cost. The premium/discount on debt securities is amortised by the effective rate method with the amortised amount presented as an adjustment to the interest income.

c) Investments in subsidiaries are accounted for in the separate financial statements using the cost method.

The fair value of debt instruments is determined based on the required rate of return or the yield rates quoted by the Thai Bond Market Association. The fair value of unit trusts is determined from their net asset value.

The weighted average method is used for computation of the cost of investments.

5.6 Property, plant and equipment, and depreciation

Land is stated at cost. Plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on a straight-line basis over the following estimated useful lives:

Building improvements - 5 - 25 years Buildings - 20 - 25 years Machinery and equipment - 5 - 15 years Office furniture, fixture and equipment - 3 - 10 years Motor vehicles - 5, 10 years

Depreciation is included in determining income.

No depreciation is provided on land and construction in progress.

Financial Statement

5.7 Intangible assets and amortisation

Intangible assets are stated at cost less accumulated amortisation. Amortisation is calculated by reference to cost on a straight-line basis over the expected future period of economic benefit of each type of intangible asset, as follows:

Land use right - 44 years Land leasehold rights - Lease periods (3 years and 26 years) Oil station leasehold rights - 3 - 25.91 years License fee for production simulation software - 8.14 years

A subsidiary in Vietnam amortises land use right over the remaining 44 years of its investment license, in accordance with the rights, responsibilities and obligations under the investment license.

Intangible assets which are expected to provide future economic benefits for more than 20 years are to be tested for impairment annually, at each balance sheet date.

The amortisation is included in determining income.

5.8 Borrowing costs

Interest and other financial costs related to loans obtained for the construction of fixed assets are capitalised as a part of the cost of the fixed assets. The capitalisation of the borrowing costs will be discontinued when the construction is completed and ready for intended use.

5.9 Related party transactions

Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company.

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7. TRADE ACCOUNTS RECEIVABLE

The outstanding balances of trade accounts receivable as at 31 December 2007 and 2006 are aged, based on due date, as follows:

(Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Trade accounts receivable - unrelated parties Not over 3 months 490,740,032 416,238,829 377,873,821 341,335,345 3 - 6 months 14,474,286 2,980,397 - 213,480 6 - 12 months 4,239,175 4,312,461 - 143,220 Over 12 months 12,780,280 12,866,738 1,081,751 752,670 Total 522,233,773 436,398,425 378,955,572 342,444,715 Less: Allowance for doubtful accounts (9,684,768) (11,122,874) (617,250) (617,250) Trade accounts receivable - unrelated parties, net 512,549,005 425,275,551 378,338,322 341,827,465 Trade accounts receivable - related parties Not over 3 months 12,897 110,038 497,124,198 254,202,676 3 - 6 months 93,016 2,013 - 1,053,120 6 - 12 months - 2,196 - - Trade accounts receivable - related parties 105,913 114,247 497,124,198 255,255,796

8. PLEDGED DEPOSITS AT FINANCIAL INSTITUTIONS

These represented fixed deposits pledged with the financial institutions to secure credit facilities.

9. RELATED PARTY TRANSACTIONS

The relationship between the Company and related parties are summarised below.

Name Relationship Pure Thai Energy Co., Ltd. Subsidiary Pure Biodiesel Co., Ltd. (formerly known as Subsidiary “RPC Asia Co., Ltd.”) VTN-P Petrochemical Joint Venture Co., Ltd. (“VTN-P”) Subsidiary SCT Petroleum Co., Ltd. (“SCT”) Subsidiary Isan Rungreang Petroleum Co., Ltd. Subsidiary of SCT Mitsumphan Petroleum Co., Ltd. Subsidiary of SCT Metro Petroleum Co., Ltd. Subsidiary of SCT Jatuchak Oil Co., Ltd. Subsidiary of SCT

Financial Statement

5.15 Income tax

Income tax is provided for in the accounts based on the taxable profits determined in accordance with tax legislation.

5.16 Derivatives

Forward exchange contracts

Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange ruling on the balance sheet. Gains and losses from the translation are included in determining income. Premiums or discounts on forward exchange contracts are amortised on a straight-line basis over the contract periods.

5.17 Use of accounting estimates

Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates.

6. CURRENT INVESTMENTS

(Unit: Baht)

Consolidated financial statements

2007 2006

Investment units in mutual funds 45,570,516 502,963

Treasury bills - 20,903,909

Total current investments 45,570,516 21,406,872

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7. TRADE ACCOUNTS RECEIVABLE

The outstanding balances of trade accounts receivable as at 31 December 2007 and 2006 are aged, based on due date, as follows:

(Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Trade accounts receivable - unrelated parties Not over 3 months 490,740,032 416,238,829 377,873,821 341,335,345 3 - 6 months 14,474,286 2,980,397 - 213,480 6 - 12 months 4,239,175 4,312,461 - 143,220 Over 12 months 12,780,280 12,866,738 1,081,751 752,670 Total 522,233,773 436,398,425 378,955,572 342,444,715 Less: Allowance for doubtful accounts (9,684,768) (11,122,874) (617,250) (617,250) Trade accounts receivable - unrelated parties, net 512,549,005 425,275,551 378,338,322 341,827,465 Trade accounts receivable - related parties Not over 3 months 12,897 110,038 497,124,198 254,202,676 3 - 6 months 93,016 2,013 - 1,053,120 6 - 12 months - 2,196 - - Trade accounts receivable - related parties 105,913 114,247 497,124,198 255,255,796

8. PLEDGED DEPOSITS AT FINANCIAL INSTITUTIONS

These represented fixed deposits pledged with the financial institutions to secure credit facilities.

9. RELATED PARTY TRANSACTIONS

The relationship between the Company and related parties are summarised below.

Name Relationship Pure Thai Energy Co., Ltd. Subsidiary Pure Biodiesel Co., Ltd. (formerly known as Subsidiary “RPC Asia Co., Ltd.”) VTN-P Petrochemical Joint Venture Co., Ltd. (“VTN-P”) Subsidiary SCT Petroleum Co., Ltd. (“SCT”) Subsidiary Isan Rungreang Petroleum Co., Ltd. Subsidiary of SCT Mitsumphan Petroleum Co., Ltd. Subsidiary of SCT Metro Petroleum Co., Ltd. Subsidiary of SCT Jatuchak Oil Co., Ltd. Subsidiary of SCT

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Name Relationship

Benja Petroleum Co., Ltd. Subsidiary of SCT

Burapha Rungroch Petroleum Co., Ltd. Subsidiary of SCT

Jaturatis Transport Co., Ltd. Subsidiary of SCT

Pure Sammakorn Development Co., Ltd. (“PSDC”) Subsidiary

Petro-Instruments Co., Ltd. 29.87 percent of shares held in the Company

Machine Automation Joint Stock Company 14 percent of shares held in VTN-P

Sammakorn Plc. 49 percent of shares held in PSDC and common directors

Jazzy Creation Co., Ltd. Common directors

Blue Planet Travel Co., Ltd. Common directors

Bac Brother Co., Ltd. Common directors

Globalization Economic and Promotion Network Co., Ltd. Common directors

Alt Energy Co., Ltd. Common directors

Village Farm Marketing Co., Ltd. Common directors

Village Farm & Friend Co., Ltd. Common directors

SCT Sahaphan Co., Ltd. Common shareholders and shareholding by the Company’s directors

During the years, the Company and its subsidiaries had significant business transactions with related parties, which have been concluded on commercial terms and bases agreed upon in the ordinary course of business between the Company and those companies. Below is a summary of those transactions. (Unit: Baht)

Consolidated financial statements Separate financial statements Transfer pricing policy 2007 2006 2007 2006 Transactions with subsidiaries (Eliminated from the consolidated financial statements) Sales - - 8,693,053,418 6,797,139,594 Note 1 Management fee income - - 41,009,685 40,088,473 Note 2 Interest income - - 1,025,937 1,541,945 5.0% p.a. and LIBOR 1 month plus 2.0% p.a Other income - other services - - 6,721,373 3,287,105 Contract price Purchases of goods - - 1,318,577,384 236,531,772 At cost Purchases of fixed assets - - - 66,808 Net book value Purchases of investment - - - 25,499,600 Baht 100 per share Transportation expense - - 176,911,406 185,632,696 Contract price Other expenses - - 831,978 1,600,623 Actual cost Sale of land - - 26,000,000 - Contract price which exceeds to actual cost

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(Unit: Baht)

Consolidated financial statements Separate financial statements Transfer pricing policy 2007 2006 2007 2006 Transactions with related parties Management fee income 4,090,601 3,563,680 4,090,601 3,563,680 Note 2 Purchases of fixed assets 6,474,854 5,750,158 - 1,429,749 Contract price Other expenses 2,911,474 1,766,898 1,471,068 1,484,854 Actual cost Land rental expense 1,122,125 - - - Contract price Equipment rental expense 6,800,787 - - - Contract price Advertising and promotion expenses 688,700 1,021,250 688,700 1,021,250 Contract price Interest income 64,726 - 64,726 - 7.5 % p.a.

Note 1 - The selling price is set out based on the market price with discount for oil wholesale business, provided according to the volumes of order.

The selling price is set out based on the market price with the fixed rate marketing margin discount for oil retail business. The selling price is set out based on the market price for overseas sales and oil transportation businesses.

Note 2 - Calculation based on quantities of products sold for oil wholesale and retail businesses. Calculation at fixed rates for overseas sales business, property rental and service business and distribution and maintenance of gas

station equipment business. Calculation based on quantities of delivered products for oil transportation business.

In December 2006, the Company has entered into an agreement with Globalization Economic and Promotion Network Co., Ltd. (“GEPN”), requesting a subsidiary of GEPN provides land in China for construction of petroleum warehouse. The price is agreed at cost based on contractual basis. This connected transaction was approved by the meeting of the Board of Directors No. 1/2007 held on 22 February 2007. Under the agreement, the Company has paid total of Baht 30 million in advance to GEPN. As at 31 December 2007 and 2006, the outstanding balance of this transaction is presented under the caption of “Advance to related party” in the balance sheets.

In 2006, the Company purchased machines and refinery processing equipment from local and overseas suppliers on behalf of VTN-P, reimbursing all expenses it incurred from that subsidiary at actual cost. The value of the associated transactions amounted to Baht 5.6 million.

Financial Statement

185

The balances of the accounts as at 31 December 2007 and 2006 between the Company and those related companies are as follows: (Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Trade accounts receivable - related parties Subsidiaries Pure Thai Energy Co., Ltd. - - 303,552,897 178,462,940 SCT Petroleum Co., Ltd. - - 8,513,480 14,477,340 Isan Rungreang Petroleum Co., Ltd. - - 59,373,831 6,847,820 Mitsumphan Petroleum Co., Ltd. - - 36,282,860 20,040,686 Metro Petroleum Co., Ltd. - - 71,745,670 17,914,550 Jatuchak Oil Co., Ltd. - - - 44,360 Benja Petroleum Co., Ltd. - - 15,832,000 16,414,980 Jaturatis Transport Co., Ltd. - - 1,823,460 1,053,120 Total trade accounts receivable - subsidiaries - - 497,124,198 255,255,796 Related companies Sammakorn Plc. 93,016 114,247 - - Village Farm & Friend Co., Ltd. 12,897 - - - Total trade account receivable - related companies 105,913 114,247 - - Total trade accounts receivable - related parties 105,913 114,247 497,124,198 255,255,796

Amounts due from related parties Subsidiaries Pure Thai Energy Co., Ltd. - - 1,010,717 5,157,952 Pure Biodiesel Co., Ltd. - - - 642,000 SCT Petroleum Co., Ltd. - - 191,476 4,745,760 Isan Rungreang Petroleum Co., Ltd. - - 640,361 3,819,477 Mitsumphan Petroleum Co., Ltd. - - 374,848 4,546,318 Jaturatis Transport Co., Ltd. - - 1,263,466 13,004,843 Metro Petroleum Co., Ltd. - - 507,287 1,773,472

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(Unit: Baht)

Consolidated financial statements

Separate financial statements

2007 2006 2007 2006 Burapha Rungroch Petroleum Co., Ltd. - - 13,696 1,614,095 Benja Petroleum Co., Ltd. - - 157,772 584,060 Jutuchak Oil Co., Ltd. - - 8,774 1,710,984 VTN-P Petrochemical Joint Venture Co., Ltd. - - 1,619,567 28,407,156 Pure Sammakorn Development Co., Ltd. - - 642,193 365,765 Total amounts due from subsidiaries - - 6,430,157 66,371,882 Related companies SCT Sahaphan Co., Ltd. 2,563,980 - 2,563,980 - Sammakorn Plc. 94,119 8,347,522 - - Total amounts due from related companies 2,658,099 8,347,522 2,563,980 - Total amounts due from related parties 2,658,099 8,347,522 8,994,137 66,371,882 Advance to related party Related company

Globalization Economic and

Promotion Network Co., Ltd. 30,000,000 10,000,000 30,000,000 10,000,000

Total advance to related party 30,000,000 10,000,000 30,000,000 10,000,000 Short-term loans to related party Subsidiary VTN-P Petrochemical Joint Venture Co., Ltd. - - - 28,764,400 Total short-term loans to related party - - - 28,764,400 Advances for purchases of inventories - related parties Subsidiaries SCT Petroleum Co., Ltd. - - - 21,455,091 Mitsumphan Petroleum Co., Ltd. - - - 38,037,200 Isan Rungreang Petroleum Co., Ltd. - - - 42,379,860 Total advances for purchases of inventories - related parties - - - 101,872,151

Financial Statement

187

(Unit: Baht)

Consolidated financial statements

Separate financial statements

2007 2006 2007 2006 Trade accounts payable - related parties Subsidiaries SCT Petroleum Co., Ltd. - - - 7,892,590 Mitsumphan Petroleum Co., Ltd. - - 92,400 1,101,760 Isan Rungreang Petroleum Co., Ltd. - - 9,285,400 914,300 Total trade accounts payable - related parties - - 9,377,800 9,908,650 Amounts due to related parties Subsidiaries Pure Thai Energy Co., Ltd. - - 76,248 122,453 SCT Petroleum Co., Ltd. - - 674,090 - Jaturatis Transport Co., Ltd. - - 26,015,247 26,509,409 Pure Sammakorn Development Co., Ltd. - - 274 8,542,500 Total amounts due to subsidiaries - - 26,765,859 35,174,362 Related companies Jazzy Creation Co., Ltd. - 36,112 - 27,553 Petro-Instrument Co., Ltd. - 1,633,580 - 1,633,580 Blue Planet Travel Co., Ltd. 89,400 127,300 79,200 127,300 Sammakorn Plc. 40,499 43,079 - - Machine Automation Joint Stock Company - 398,272 - - Total amounts due to related companies 129,899 2,238,343 79,200 1,788,433 Total amounts due to related parties 129,899 2,238,343 26,845,059 36,962,795 Rental deposits - related party Related company Village Farm & Friend Co., Ltd. 218,088 - - - Total rental deposits - related party 218,088 - - -

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During the year 2007, movements of short-term loans to related parties were as follows:

(Unit: Baht)

Consolidated financial statements Balance as at During the year Balance as at 1 January 31 December 2007 Increase Decrease 2007 Short-term loans to related party SCT Sahaphan Co., Ltd. - 5,000,000 (5,000,000) - Total - 5,000,000 (5,000,000) -

(Unit: Baht)

Separate financial statements Balance as at During the year Balance as at 1 January 31 December 2007 Increase Decrease 2007 Short-term loans to related parties VTN-P Petrochemical Joint Venture Co., Ltd. 28,764,400 20,302,000 (49,066,400) - SCT Sahaphan Co., Ltd. - 5,000,000 (5,000,000) - Total 28,764,400 25,302,000 (54,066,400) -

Directors and management’s remuneration

In 2007 and 2006 the Company and subsidiaries paid salaries, bonus, meeting allowance and other allowances to their directors and management totaling Baht 48 million and Baht 51 million, respectively.

Guarantee obligations with related parties

The Company had outstanding guarantees with its related parties as described in Note 30 to the financial statements.

10. INVENTORIES (Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Finished goods - fuel oil 1,213,334,969 877,476,176 1,082,525,449 812,544,679 Raw materials 392,057,435 287,159,583 389,049,975 283,904,704 Supplies 4,865,942 5,331,615 4,436,361 4,845,918

Total 1,610,258,346 1,169,967,374 1,476,011,785 1,101,295,301

Financial Statement

189

Inventories as at 31 December 2007 included oil of Baht 871 million (2006: Baht 570 million) reserved in accordance with the Ministry of Commerce regulations. Baht 100 million (2006: Baht 95 million) of this amount represents inventories covered by agreements for the sale and purchase of oil to maintain stipulated legal reserves, which the Company is committed to sell back to the sellers upon the expiry of the agreements.

11. OTHER SHORT-TERM LOAN RECEIVABLE

On 14 January 2006, the Company entered into a Petroleum Product Business Joint Venture Agreement with T.C.S. Oil Co., Ltd. (“T.C.S.”) for the purpose of the joint oil business in Cambodia. The agreement is effective for a period of 15 years, expiring in 2020. The Company is obliged to provide fuel and a Baht 35 million loan to T.C.S. The loan is subject to fixed interest rate at 5 percent per annum and payable on a monthly basis. The repayment of loan principal is stipulated in the agreement. The Company will receive share of profit from the operating results of T.C.S., as specified in the agreement, upon receipt of full loan repayment.

As at 31 December 2007, the outstanding balance of the loan amounted to Baht 16.6 million (2006: Baht 10.6 million).

12. OTHER CURRENT ASSETS

(Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Prepaid excise tax 74,609,502 88,772,529 74,609,502 88,772,529 Value added tax refundable 125,925,333 183,650,903 116,695,919 178,660,922 Prepaid corporate income tax 16,699,621 16,426,995 15,909,834 15,909,834 Advances for purchases of inventories 55,631,635 120,968,587 20,000,000 - Others 65,685,475 52,971,885 46,815,751 35,505,881 Total other current assets 338,551,566 462,790,899 274,031,006 318,849,166 Less: Allowance for doubtful accounts (3,206,019) - (3,206,019) - Other current assets - net 335,345,547 462,790,899 270,824,987 318,849,166

The Company requested a refund of prepaid corporate income tax amounting to Baht 15.9 million. The net realisable value of this asset is subject to the result of a tax audit by the Revenue officials, but the management believes that the Company will receive the refund of the full amount.

Financial Statement

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13. INVESTMENTS IN SUBSIDIARIES (Unit: Baht) Separate financial statements

Dividend received for the years ended

Company’s name Paid-up capital Investment proportion Cost 31 December

2007 2006 2007 2006 2007 2006 2007 2006

Percent Percent (Restated)

VTN-P Petrochemical Joint Venture Co., Ltd. USD 3.5 million USD 3.5 million 60 60 86,589,

33086,589,330 - -

Pure Thai Energy Co., Ltd. Baht 50 million Baht 50 million 100 100 49,999,

30049,999,300 - -

Pure Sammakorn Development Co., Ltd.

Baht 50 million Baht 50 million 51 51 25,499,600

25,499,600 - -

SCT Petroleum Co., Ltd. and its Baht 10 million Baht 10 million 100 100 9,999,9

659,999,965 - -

subsidiaries

Pure Biodiesel Co., Ltd. Baht 124 million Baht 10 million 100 100 123,999

,2009,999,200 - -

Total investments in subsidiaries 296,087,395

182,087,395

Less: Allowance for impairment (95,502

,767)(95,502,76

7)

Investments in subsidiaries - net 200,584,628

86,584,628

VTN-P Petrochemical Joint Venture Co., Ltd.

VTN-P was granted an investment license by the People’s Committee of Can Tho City, a body authorised by the Ministry of Planning and Investment of Vietnam. Under the investment license, which is valid for a period of 50 years ending 2049, the tax incentives and commitments of VTN-P are as follows:

a) The income tax rate is fifteen percent.

b) Exemption from corporate income tax for a period of four years, beginning with the first profitable year, and then a fifty percent reduction of income tax for a further four years.

c) Exemption from import tax on equipment and machinery imported for use in the operation of the business.

d) Imported materials are exempted from import tax for a period of five years from commencement of production. Following that, although import tax must be paid on all raw materials, spare parts, accessories, and materials imported to produce goods for export, when the relevant products are exported, an appropriate amount of import tax will be refunded.

Financial Statement

191

e) If the imported goods referred to in c) and d) are sold in Vietnam, import taxes, value added tax and income taxes must be paid in conformity with Vietnamese law.

f) Commitments in respect of rental payable to a government agency for leased land on which the assets of VTN-P are located. Rental is charged at rates stipulated in the investment license.

During the current year, VTN-P has already completed plant construction and a production test-run. In April 2007, VTN-P entered into an agreement to sell and purchase assets with a buyer in Vietnam who is an unrelated party. The contract price is USD 8.35 million. VTN-P has received a deposit of 30 percent of the contract price, or USD 2.5 million, and this is recorded in other current liabilities, as discussed in Note 20 to the financial statements. VTN-P will receive the remaining balance when certain stipulated conditions are met, such as that VTN-P and the buyer obtain the required approvals from the competent authorities relating to the purchase, sale and transfer of the assets, the buyer obtains the approvals and licenses necessary to operate the business, a land lease agreement and land use rights certificate are obtained and the production test-run process has been successfully completed.

On 6 August 2007, a meeting of the Board of Directors of VTN-P approved the dissolution and liquidation of that company, and on 9 November 2007, a meeting No. 8/2007 of the Company’s Board of Directors passed a resolution to approve the completion of such processes within 2008.

As at 31 December 2007, significant assets and liabilities of VTN-P consisted of the following:

Assets (Unit: Baht) Cash and cash equivalents 2,244,809 Inventories 4,231,682 Property, plant and equipment - net 177,276,735 Intangible assets - net 21,818,677 Other assets 1,828,802 Total assets 207,400,705 Liabilities Advances received from sale of assets 84,503,929 Long-term loans 99,217,120 Other liabilities 3,070,420 Total liabilities 186,791,469 Net asset value 20,609,236

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Pure Sammakorn Development Co., Ltd.

On 11 May 2006, a meeting No. 2/2006 of the Board of Directors of the Company approved a joint investment between the Company and Sammakorn Public Company Limited (SAMCO) to establish Pure Sammakorn Development Co., Ltd. (PSDC) to develop land in Bangkok and its environs into a community mall and fuel oil station “Pure”. The Company and SAMCO entered into the Business Joint Venture Agreement on 15 June 2006, to establish the new company with a registered capital of Baht 50 million, with the Company holding 51 percent and SAMCO 49 percent. On 8 June 2007, PSDC started commercial operations of its community mall and “Pure” gas station.

During the year 2006, PSDC called up all share capital, which the Company paid Baht 16,957,100 for the share capital of this investment. The outstanding balance of share subscription of Baht 8,542,500 was presented under the caption of “Amounts due to related parties” in the Company’s separate financial statements. In 2007, the Company paid the full amount.

Pure Biodiesel Co., Ltd.

a) Meeting No. 2/2007 of the Company’s Board of Directors, held on 1 March 2007, approved the change of the name of RPC Asia Co., Ltd. to Pure Biodiesel Co., Ltd., and an increase in the Company’s investment in RPC Asia Co., Ltd. (a subsidiary in which the Company has an equity interest of 100 percent), whereby that company’s registered capital will increase from Baht 10 million to Baht 200 million through the issue of 1.9 million additional ordinary shares at a price of Baht 100 per share, a total of Baht 190 million. The Company will purchase all additional ordinary shares. The purpose of the increase in share capital is to provide funds for investment in a bio-diesel project in Rayong province. The subsidiary registered the change of name and increase in capital with the Ministry of Commerce in May 2007.

During 2007, the subsidiary called up capital of Baht 114 million and the Company has paid in the full amount. As at 31 December 2007, the Company has commitments of Baht 76 million in respect of payment of the uncalled portion of the investment. In addition, the subsidiary purchased land amounting to Baht 26 million from the Company for the project, which the management expects to be completed in the middle of 2008.

Financial Statement

193

b) Pure Biodiesel Co., Ltd. has received promotional privileges from the Board of Investment for the manufacture of bio-diesel, pursuant to the promotion certificate No. 1840(9)/2550 issued on 30 August 2007. Subject to certain imposed condition, the main privileges include the following:

1) Exemption from corporate income tax on net income from the promoted operations for a period of eight years from the date the promoted activity commenced generating revenues.

In case that there are losses incurred during the corporate income tax exemption period, the subsidiary is allowed to utilise the losses as a deduction against the net income of future years after the expiry of the tax exemption period, but with a time limit of five years after that period.

2) Exemption from income tax on dividends paid from the profits of the promoted operations for which corporate income tax is exempted, throughout the corporate income tax exemption period.

3) Exemption from import duty on machinery as approved by the Board of Investment. In order to be eligible for this privilege, the machinery must be imported within 28 February 2010.

In 2007, the subsidiary did not have revenues from the promoted operations.

Pure Thai Energy Co., Ltd.

On 9 November 2007, a meeting No. 8/2007 of the Company’s Board of Directors passed a resolution approving the purchase by Pure Thai Energy Co., Ltd. (“PTEC”) (a 100 percent held subsidiary of the Company) of 15,300 shares of SCT Sahaphan Co., Ltd. (“SAP”), equivalent to 51 percent of total shares, from existing shareholders of this company at the book value as at 31 December 2007. SAP’s principal activity is the distribution and maintenance of gas station equipment. PTEC purchased the shares on 1 January 2008, as discussed in Note 33 to the financial statement.

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14. PROPERTY, PLANT AND EQUIPMENT

(Unit: Baht)

Consolidated financial statements

Office Buildings Machinery furniture, and building and fixture and Motor Construction Land improvements equipment equipment vehicles in progress Total

Cost 31 December 2006 136,083,320 294,657,877 884,136,980 65,650,824 89,849,983 44,370,157 1,514,749,141Translation adjustment - (7,230,040) (7,704,854) (14,066) (55,314) - (15,004,274Acquisitions 1,281,610 - 36,978 57,782 - 177,745,720 179,122,090Transfers - 101,197,820 15,619,281 20,986,422 336,796 (138,140,319) - Disposals - - (705,644) (680,496) (5,821,900) - (7,208,04031 December 2007 137,364,930 388,625,657 891,382,741 86,000,466 84,309,565 83,975,558 1,671,658,917

Accumulated depreciation 31 December 2006 - 80,578,386 415,652,096 39,831,257 55,593,479 - 591,655,218 Translation adjustment - (528,862) (792,031) (4,674) (23,048) - (1,348,615) Depreciation for the year - 26,523,161 74,610,586 9,548,790 14,647,988 - 125,330,525 Transfers - (6,194,745) 5,231,492 946,153 17,100 - - Depreciation for disposals - - (422,107) (648,639) (4,531,600) - (5,602,346)

31 December 2007 - 100,377,940 494,280,036 49,672,887 65,703,919 - 710,034,782

Net book value 31 December 2006 136,083,320 214,079,491 468,484,884 25,819,567 34,256,504 44,370,157 923,093,923

31 December 2007 137,364,930 288,247,717 397,102,705 36,327,579 18,605,646 83,975,558 961,624,135

Depreciation for the years 2006 (Baht 84.0 million included in manufacturing cost, and the balance in selling and administrative expenses) 123,856,702

2007 (Baht 75.9 million included in manufacturing cost, and the balance in selling and administrative expenses) 125,330,525

(Unit: Baht)

Separate financial statements

Office Buildings Machinery furniture, and building and fixture and Motor Construction Land improvements equipment equipment vehicles in progress Total

Cost 31 December 2006 128,733,521 122,273,803 740,389,014 50,286,263 2,605,532 10,410,277 1,054,698,410 Acquisitions - - - - - 21,616,135 21,616,135 Transfers - (4,301,210) 6,403,597 4,970,051 26,675 (7,099,113) - Disposals (25,824,995) - - (680,496) - - (26,505,491) 31 December 2007 102,908,526 117,972,593 746,792,611 54,575,818 2,632,207 24,927,299 1,049,809,054

Financial Statement

195

(Unit: Baht)

Separate financial statements

Office Buildings Machinery furniture, and building and fixture and Motor Construction Land improvements equipment equipment vehicles in progress Total

Accumulated depreciation 31 December 2006 - 62,781,765 391,840,837 36,122,203 1,660,724 - 492,405,529 Depreciation for the year - 9,477,089 59,684,516 4,621,878 484,544 - 74,268,027 Transfers - (6,194,745) 5,231,492 946,153 17,100 - - Depreciation for disposals - - - (648,639) - - (648,639) 31 December 2007 - 66,064,109 456,756,845 41,041,595 2,162,368 - 566,024,917

Net book value 31 December 2006 128,733,521 59,492,038 348,548,177 14,164,060 944,808 10,410,277 562,292,881

31 December 2007 102,908,526 51,908,484 290,035,766 13,534,223 469,839 24,927,299 483,784,137

Depreciation for the years

2006 (Baht 64.3 million included in manufacturing cost, and the balance in selling and administrative expenses) 79,531,318

2007 (Baht 62.4 million included in manufacturing cost, and the balance in selling and administrative expenses) 74,268,027

During the year 2007, a subsidiary had capitalised interest and financial costs amounting to Baht 0.78 million as part of the cost of construction in progress (Separate financial statements: Nil).

As at 31 December 2007, certain plant and equipment items of the Company and its subsidiaries have been fully depreciated but are still in use. The original cost of those assets amounted to Baht 84 million (2006: Baht 64 million) in the consolidated financial statements and Baht 79 million (2006: Baht 63 million) in the Company’s separate financial statements.

Certain motor vehicles, with net book values of Baht 3.8 million in the consolidated financial statements as at 31 December 2007 (2006: Baht 10.2.million), and Baht 0.3 million in the separate financial statements as at 31 December 2006, have been placed as collateral under finance leases with repayment periods of 36 to 48 months.

Pure Biodiesel Co., Ltd. had mortgaged land with structures thereon with a book value of Baht 78 million, as collateral to secure a bank credit facility.

Pure Sammakorn Development Co., Ltd. mortgaged land lease rights and construction with a book value of Baht 75.5 million, as collateral to secure a bank credit facility. Under the rental agreement, the subsidiary is committed to transfer the construction to the lessor upon the expiration of the agreement

Financial Statement

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15. INTANGIBLE ASSETS

(Unit: Baht)

Consolidated financial statements License fee Land Oil station for production Land leasehold leasehold simulation use right rights rights software Total

Cost

31 December 2006 24,737,240 1,973,000 5,720,482 1,955,760 34,386,482 Acquisitions - - 479,517 - 479,517 Translation adjustment (1,649,149) - - - (1,649,149) 31 December 2007 23,088,091 1,973,000 6,199,999 1,955,760 33,216,850 Accumulated amortisation 31 December 2006 797,876 485,868 429,166 1,828,754 3,541,664 Amortisation for the year 524,729 215,358 479,518 127,006 1,346,611 Translation adjustment (53,192) - - - (53,192) 31 December 2007 1,269,413 701,226 908,684 1,955,760 4,835,083 Net book value 31 December 2006 23,939,364 1,487,132 5,291,316 127,006 30,844,818 31 December 2007 21,818,678 1,271,774 5,291,315 - 28,381,767 Amortisation for the years (included in selling and administrative expenses) 2006 1,405,721 2007 1,346,611

Financial Statement

197

(Unit: Baht)

Separate financial statements License fee Land leasehold for production rights simulation software Total Cost 31 December 2006 1,973,000 1,955,760 3,928,760 31 December 2007 1,973,000 1,955,760 3,928,760

Accumulated amortisation 31 December 2006 485,867 1,828,754 2,314,621 Amortisation for the year 215,359 127,006 342,365 31 December 2007 701,226 1,955,760 2,656,986 Net book value 31 December 2006 1,487,133 127,006 1,614,139 31 December 2007 1,271,774 - 1,271,774 Amortisation for the years (included in selling and administrative expenses) 2006 455,551 2007 342,365

16. OTHER NON-CURRENT ASSETS (Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Long-term loan receivable 1,246,663 1,246,663 1,246,663 1,246,663 The compensation for loss 26,711,581 26,711,581 26,711,581 26,711,581 Advances for purchase of machinery 42,912,848 - - - Others 9,507,803 5,887,316 6,441,261 4,318,665 Total other non-current assets 80,378,895 33,845,560 34,399,505 32,276,909 Less: Allowance for doubtful accounts (1,246,663) - (1,246,663) - Other non-current assets - net 79,132,232 33,845,560 33,152,842 32,276,909

Financial Statement

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The compensation for loss is the compensation receivable because, in the third quarter of 2006, a raw material supplier delivered raw materials of a quality different to that specified in the relevant purchase agreement, with characteristics that differed from those of deliveries made to the Company under the agreement in the past. Therefore, the Company had additional cost for product improvement and compensation amounting to Baht 136.45 million. Based on the negotiation with the supplier, the Company will receive compensation of Baht 52.7 million. The difference represents inventory loss as a result of continuous and substantial falls in the prices of inventories and raw materials (inventory loss). Since this loss was a result of global market conditions with neither the Company nor the supplier could avoid, the supplier requested that each part bear responsibility for its own share of the inventory loss. The Company therefore recorded the compensation for loss in full as a deduction against cost of sales in 2006. The partial balance of Baht 26 million was paid by a credit note in November 2006 and the supplier will inform the Company of the method in payment for the remaining Baht 26.7 million later.

17. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

(Unit: Baht)

Interest rate

Consolidated financial statements

Separate financial statements

(percent per annum) 2007 2006 2007 2006 Bank overdrafts 3.5 - 5.5 110,233,504 142,377,323 110,233,504 142,377,323 Short-term loans from financial institutions 4.0 - 5.29 110,000,000 585,000,000 110,000,000 585,000,000 Total 220,233,504 727,377,323 220,233,504 727,377,323

The Company

The Company has overdraft and revolving loan facilities from various financial institutions. These facilities are secured by the pledge of fixed deposits.

Subsidiaries

VTN-P Petrochemical Joint Venture Co., Ltd. and Pure Biodiesel Co., Ltd. have overdraft and revolving loan facilities from various financial institutions. These facilities are guaranteed by the Company.

Financial Statement

199

18. OTHER SHORT-TERM LOANS PAYABLE

These represent promissory notes which the Company and subsidiaries issued to another individual. The loans carry interest at the rates of 4.0 - 5.0 percent per annum (2006: 5.0 percent per annum) and are repayable within one year.

19. LONG-TERM LOANS

(Unit: Baht)

Consolidated financial statements 2007 2006 Long-term loans 130,224,784 121,361,288 Less: Current portion (73,499,453) (30,288,949) Non-current portion 56,725,331 91,072,339

Movements in the long-term loans account during the year ended 31 December 2007 were summarised below. (Unit: Baht)

Consolidated financial statements Balance as at 1 January 2007 121,361,288 Add: Received 31,007,663 Less: Repayment (14,491,182) Unrealised gain on exchange (7,652,985) Balance as at 31 December 2007 130,224,784

The Company

On 22 August 2007, the Company entered into a loan agreement with a local commercial bank, granting a loan facility of Baht 200 million for use in additional investment in Pure Biodiesel Co., Ltd., on which interest is charged at a rate no higher than the Minimum Loan Rate and repayable monthly. The principal is repayable in semi-annual installments of Baht 40 million, with the first of these due in June 2008, and is to be repaid in full within June 2010. It is an unsecured loan. As at 31 December 2007, the Company had yet to utilise the credit facility.

Financial Statement

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The loan agreement contains normal covenants pertaining to matters such as creating lien over assets and maintaining certain financial ratios.

The Company has entered into credit facilities agreements with various financial institutions. As at 31 December 2007, the outstanding balance of credit facilities which are not drawn down is Baht 2,343 million (2006: Baht 2,127 million). These credit facilities are secured by the pledge of fixed deposits.

VTN-P Petrochemical Joint Venture Co., Ltd.

On 3 September 2004, VTN-P Petrochemical Joint Venture Co., Ltd. entered into a loan agreement with the Export and Import Bank of Thailand, obtaining a credit facility of USD 3.5 million for use in the construction of its refinery. Under the loan agreement, the draw down period was from October 2004 to July 2005, and there was a grace period for principal repayment of 12 months from the date of the first draw down or 6 months from commencement of operations, whichever was earlier. The loan is repayable in semi-annual installments of USD 0.35 million, between October 2006 and October 2010, and carries interest at LIBOR plus 1.875 percent per annum, payable on 30 April and 31 October of every year.

The above loan agreement stipulates certain conditions, such as that the Company’s equity interest in the subsidiary must be not less than 50 percent, and restrictions on the payment of dividends, and incurring obligations.

The loan is guaranteed by the Company, and secured by the shareholders’ support agreement, and the assignment of the beneficial rights under the insurance policies covering the assets of the subsidiary to the lender.

As at 31 December 2007 and 2006, the outstanding balances of the loan amounted to Baht 99.2 million (or USD 2.9 million) and Baht 121.4 million (or USD 3.3 million), respectively.

Pure Sammakorn Development Co., Ltd.

On 22 January 2007, PSDC entered into a credit facility agreement with a financial institution totaling Baht 55 million. The credit facilities consist of long-term loan amounted to Baht 45 million and a credit facility for overdraft and letter of guarantee amounted to Baht 10 million. This long-term loan carries interest at a rate no higher than Minimum Loan Rate and repayable monthly. The principal is repayable in monthly installments of Baht 542,000, starting in February 2008 within 8 years (including grace period for principal repayment of 1 year).

Financial Statement

201

The loan agreement contains normal covenants pertaining to matters such as creating lien over assets and maintaining certain financial ratios.

The above credit facilities are secured by the pledge of the subsidiary’s land lease right and the mortgage of the constructions under the subsidiary’s project.

As at 31 December 2007, the outstanding balance of the loan amounted to Baht 31 million (2006: Nil). The subsidiary has been unable to maintain financial ratio covenanted under the loan agreement (the breach is not related to principal and interest payment) and the lender may therefore take certain steps stipulated in the agreement. The management of the subsidiary is currently negotiating a waiver of the breach of covenant and believe that the lender will grant such waiver. In the consolidated financial statements, the Company has therefore classified the whole balance of the subsidiary’s loan as current liabilities.

Pure Biodiesel Co., Ltd.

On 22 August 2007, Pure Biodiesel Co., Ltd. entered into a loan agreement with a local commercial bank granting a loan amounting to Baht 200 million for use in construction and the import of machinery for manufacturing of the bio-diesel project, on which interest is charged at a rate no higher than the Minimum Loan Rate and repayable monthly. The principal is repayable in quarterly installments of Baht 8 million from December 2008 until December 2013 and Baht 16 million from March 2014 onwards, and is to be repaid in full within June 2014. As at 31 December 2007, the subsidiary had yet to utilise the credit facility.

The above loan agreement stipulates certain conditions, such as that the Company’s equity interest in the subsidiary must be not less than 51 percent, restrictions on the payment of dividends, creating lien over assets and covenants to maintain certain financial ratios.

The credit facilities are secured by the mortgage of the subsidiary’s land with structures thereon. In addition, the subsidiary must pledge the machinery within December 2008.

Financial Statement

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20. OTHER CURRENT LIABILITIES

(Unit: Baht)

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Advances received from customers 17,525,913 20,493,680 4,906,738 15,116,321 Advances received from sale of assets 84,503,929 - - - Accrued excise tax 56,475,231 37,302,232 56,475,231 37,302,232 Corporate income tax payable 72,796,122 2,165,839 69,049,703 - Accrued expenses 58,889,981 27,968,116 53,183,614 4,488,452 Others 15,969,629 10,925,330 4,722,509 7,603,458 Total 306,160,805 98,855,197 188,337,795 64,510,463

21. SHARE CAPITAL

2006

On 31 March 2006, the Annual General Meeting of the Company’s shareholders approved an increase in the registered share capital of the Company from Baht 424,040,000 to Baht 530,048,171 through the issue of 106,008,171 ordinary shares with a par value of Baht 1 each, 104,593,171 shares of which were for the distribution of stock dividends, and 1,415,000 shares of which were to support changes in the exercise ratio of the ESOP No. 1 warrants which were affected by the distribution of stock dividends. The Company registered the increase in its share capital with the Ministry of Commerce on 7 April 2006.

During the year 2006, the Company distributed stock dividends of 104,593,070 shares with a par value of Baht 1 each, totaling Baht 104,593,070. The Company registered the increase in its share capital with the Ministry of Commerce on 7 April 2006.

In November 2006, the Company received additional capital totaling Baht 3,294,677 as a result of the exercise of RPC-W1 warrants of 3,294,677 shares at a price of Baht 1 per share, increasing its paid-up capital to Baht 526,260,433 as at 31 December 2006. The Company registered the increase in its share capital with the Ministry of Commerce on 4 December 2006.

Financial Statement

203

2007

In November 2007, the Company received additional capital totaling Baht 3,609,796 as a result of the exercise of RPC-W1 warrants of 3,609,796 shares at a price of Baht 1 per share, increasing its paid-up capital to Baht 529,870,229 as at 31 December 2007. The Company registered the increase in its share capital with the Ministry of Commerce on 4 December 2007.

Reconciliation of number of ordinary shares (Unit: Shares)

2007 2006 Registered share capital Number of ordinary shares at the beginning of year 530,048,171 424,040,000 Registered capital increase - 106,008,171 Number of ordinary shares at the end of year 530,048,171 530,048,171 Issued and paid-up share capital Number of ordinary shares at the beginning of year 526,260,433 418,372,686 Stock dividends - 104,593,070 Increase from exercised warrants 3,609,796 3,294,677 Number of ordinary shares at the end of year 529,870,229 526,260,433

22. WARRANTS

On 1 August 2005, the Company issued 8,490,000 registered and non-transferable warrants to directors, advisors, management and employees of the Company and its subsidiaries. The warrants were divided into three issues, with issue No. 1 comprising 2,830,108 warrants, issue No. 2 comprising 2,829,987 warrants and issue No. 3 comprising 2,829,905 warrants, with an offer price of Baht 0 each. The life of the warrants was not more than 36 months, ending 30 November 2007, the warrants had an exercise ratio of 1 warrant to 1 new ordinary share and the exercise price was Baht 1 per share (unless there was any adjustment of the exercise price or exercise ratio). The periods to exercise each issue were as follows:

- Issue No. 1: 30 November 2005 - Issue No. 2: 30 November 2006 - Issue No. 3: 30 November 2007

The above warrants were not listed in the Stock Exchange of Thailand.

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Consequently, a resolution of the 2006 Annual General Meeting of the Company’s shareholders, held on 31 March 2006, approved an adjustment in the exercise ratio under ESOP No. 1. Summary of the adjustment was shown below.

Existing exercise ratio 1 warrant can be used to buy 1 ordinary share New exercise ratio 1 warrant can be used to buy 1.25 ordinary shares Effective date 31 March 2006 Existing number of shares reserved for exercise right 8,490,000 shares Additional shares 1,415,000 shares Total shares reserved as at approved date 9,905,000 shares

Movement of the warrants is as follows:

Units Balance of warrants as at 31 December 2006 3,024,131* Warrants exercised during the year (2,889,092) Expired during the year (135,039) Balance of warrants as at 31 December 2007 -

* Balance of warrants as at 31 December 2006 was included warrants allocated to securities re-purchasers of 194,226 units.

23. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing the net income for the year 2006 by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued.

Financial Statement

205

Reconciliation between basic earnings per share and diluted earnings per share for the year 2006 is presented below.

Consolidated financial statements Weighted average number of Earnings Net income ordinary shares per share Baht shares Baht

Basic earnings per share Net income 183,383,151 523,255,152 0.35 Effect of dilutive potential ordinary shares Warrants (RPC-W1) - 263,724 Diluted earnings per share Net income of ordinary shareholders assuming the conversion of dilutive potential ordinary shares 183,383,151 523,518,876 0.35

Separate financial statements Weighted average number of Earnings Net income ordinary shares per share Baht shares Baht (Restated) (Restated)

Basic earnings per share Net income 164,422,149 523,255,152 0.31 Effect of dilutive potential ordinary shares Warrants (RPC-W1) - 263,724 Diluted earnings per share Net income of ordinary shareholders assuming the conversion of dilutive potential ordinary shares 164,422,149 523,518,876 0.31

Weighted average number of ordinary shares is calculated as follows: (Unit: Shares)

31 December 2007 2006

Issued and paid-up ordinary shares as at the beginning of year 526,260,433 418,372,686 Number of stock dividends - 104,593,070 Weighted average number of ordinary shares issued during the year 350,637 289,396 Issued and paid-up ordinary shares as at the end of year 526,611,070 523,255,152

Financial Statement

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24. STATUTORY RESERVE

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution.

During the year 2006, the Company set aside Baht 10,600,817 to the statutory reserve.

25. DIVIDEND PAID

Dividends of the Company which were declared in 2007 and 2006 consist of the following:

(Unit: Baht)

Total Dividend Dividend Approved by dividends per share

Final dividends on 2006 income Annual General Meeting of the shareholders on 5 April 2007 52,626,043 0.10 Interim dividends in respect of Board of Directors’ meeting on the income for the period as from 9 August 2007 1 January 2007 to 30 June 2007 63,151,252 0.12 Total dividends for 2007 115,777,295 0.22 Final dividends on 2005 income* Annual General Meeting of the shareholders on 31 March 2006 146,430,440 0.35 Interim dividends in respect of the Board of Directors’ meeting on income for the period as from 9 August 2006 1 January 2006 to 30 June 2006 130,741,438 0.25 Total dividends for 2006 277,171,878 0.60

* The details of final dividends on 2005 income are provided below.

a) Cash dividend was paid at the rate of Baht 0.10 per share, or a total of Baht 41,837,269.

b) Payment of stock dividends of 104,593,070 ordinary shares of the Company (with a par value of Baht 1 each) was made to the shareholders of the Company at the ratio of 4 exiting shares to 1 new share, totaling Baht 104,593,070, or equivalent to Baht 0.25 per share. If a shareholder had fraction of remaining shares of less than 4 shares, the shareholder would receive dividend in the form of cash dividend of Baht 0.25 per share

Financial Statement

207

26. SALES

Sales for the years ended 31 December 2007 and 2006 are as follows: (Unit: Baht) Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Sales 21,031,373,934 19,817,334,739 18,722,014,052 17,175,147,775 Less: Oil sales back transactions (305,308,700) (363,683,300) (305,308,700) (363,683,300) Sales - net 20,726,065,234 19,453,651,439 18,416,705,352 16,811,464,475

The Company entered into agreements to purchase oil from a number of other oil companies, in order to maintain stipulated legal

reserves, with conditions that the Company must sell the oil back to those companies upon the expiry of the agreements and that the

Company will be responsible for related expenses, such as insurance premium and oil storage tank rental fees. The Company recorded

the oil sales back transactions as deductions from sales revenues in the income statement.

27. EMPLOYEES AND RELATED COSTS

Consolidated financial statements Separate financial statements 2007 2006 2007 2006 Number of employees at the end of year (persons) 985 773 280 300 Employee costs for the year (Thousand Baht) 271,398 216,729 212,031 182,363

28. PROVIDENT FUND

The Company, its subsidiaries and their employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Both the Company or its subsidiaries and employees contributed to the fund monthly at the rates of 5 - 10 percent of basic salary. The fund, which is managed by Siam Commercial Bank Public Company Limited, will be paid to employees upon termination in accordance with the fund rules. During the year 2007, the Company and its subsidiaries contributed Baht 8.6 million (2006: Baht 8.6 million) to the fund.

29. SEGMENT INFORMATION

The Company and its subsidiaries’ business operations involve two principal segments, comprising the manufacturing and trading of petroleum and petrochemical products and the provision of oil transportation service, which are carried on in two geographic areas of Thailand and Vietnam. The financial information of the Company and its subsidiaries by geographical and business segments for the years ended 31 December 2007 and 2006, is as follows

Financial Statement

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Vietnam Thailand Manufacture & trading Manufacture & trading of petroleum and of petroleum and petrochemical products petrochemical products Oil transportation Total Elimination Total 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Sales and services from external customers Domestic - - 17,221 15,447 33 48 17,254 15,495 - - 17,254 15,495 Overseas - 38 3,514 3,969 - - 3,514 4,007 - - 3,514 4,007 Total sales and services from external customers - 38 20,735 19,416 33 48 20,768 19,502 - - 20,768 19,502 Inter-segment sales and services Domestic - - 10,032 7,071 196 194 10,228 7,265 (10,228) (7,265) - - Total inter-segment sales and services - - 10,032 7,071 196 194 10,228 7,265 (10,228) (7,265) - - Total revenues - 38 30,767 26,487 229 242 30,996 26,767 (10,228) (7,265) 20,768 19,502 Segment operating income (loss) (21) (37) 556 254 15 16 550 233 (3) - 547 233 Unallocated income (expenses): Other income 10 40 Interest expense (31) (42) Corporate income tax (143) (70) Net loss attributable to minority interest 18 22 Net income for the year 401 183 Inventories 4 4 1,608 1,166 - - 1,612 1,170 (2) - 1,610 1,170 Property, plant and equipment - net 177 205 765 682 21 36 963 923 (1) - 962 923 Other assets 26 26 2,104 1,856 45 38 2,175 1,920 (892) (686) 1,283 1,234 Total assets 207 235 4,477 3,704 66 74 4,750 4,013 (895) (686) 3,855 3,327

Transfer prices between business segments are as set out in Note 9 to the financial statement

Financial Statement

209

30. LETTER OF GUARANTEES

a) As at 31 December 2007, there were outstanding bank guarantees of approximately Baht 125.0 million and USD 13.1 million (2006: Baht 93.6 million) issued by banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of the Company and the subsidiaries’ businesses. These included letters of guarantee amounting to Baht 121.3 million and USD 13.1 million to guarantee payments due to creditors, Baht 3.7 million to guarantee electricity use, among others.

b) The Company issued letters of guarantee amounting to USD 7 million (2006: USD 7 million) to the Export and Import Bank of Thailand to secure the credit facilities of its overseas subsidiary. These guarantees are effective for as long as the underlying obligations have not been discharged by that subsidiary. No guarantee fee has been charged by the Company. In addition, all shareholders of the subsidiary entered into a Shareholder Guarantee Agreement with the Company to secure the credit facilities of the subsidiary in proportion to their shareholdings.

c) The Company issued letters of guarantee amounting to USD 3.5 million (2006: USD 3.5 million) to the Export and Import Bank of Thailand and Baht 120.0 million (2006: Baht 120.0 million) to BankThai Public Company Limited to secure the credit facilities of Pure Biodiesel Co., Ltd. (“subsidiary”). The guarantees are effective for as long as the underlying obligations have not been discharged by the subsidiary. No guarantee fee has been charged by the Company.

d) SCT Petroleum Co., Ltd. (“SCT”) issued letters of guarantee to a leasing company to secure the liabilities of Jaturatis Transport Co., Ltd. (“subsidiary”) under financial leases. The guarantees are effective for as long as the underlying obligations have not been discharged by that subsidiary. The balance of the related liabilities under financial leases as at 31 December 2007 amounted to Baht 0.8 million (2006: Baht 3.2 million).

31. COMMITMENTS

As at 31 December 2007, the Company and its subsidiaries have the following commitments:

a) Capital commitments of the Company and its subsidiaries totaling Baht 41 million and USD 5 million (2006: Baht 58 million) in respect of construction of factory, oil depots, oil stations and community mall and the purchase of machinery.

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b) The Company and subsidiaries have commitments under long-term rental and service agreements relating to the lease of land, office space, oil depots, oil stations and equipment as follows:

Payable within Million Baht 1 year 85.4 2 to 5 years 129.4 Thereafter 52.8

c) A subsidiary has commitment totaling Baht 56.9 million under a land rental agreement, for which the rate is adjusted every 5 years, for a period of 25 years ending 2032.

d) Under a shareholders’ support agreement, the Company and shareholders of one subsidiary (VTN-P Petrochemical Joint Venture Co., Ltd.) have commitments to provide adequate financial support to that subsidiary, including the provision of working capital, in proportion to their shareholdings, if the cost of a project exceeds USD 7 million. This complies with a condition stipulated in the loan agreement between the subsidiary and the Export and Import Bank of Thailand.

e) In 1995, the Company entered into an agreement with PTT Public Company Limited to purchase raw materials in a quantity and at a price stipulated in the agreement, which is for a period of 15 years ending 2012 and may be extended. The agreement stipulated that the Company had to provide a bank guarantee of a certain amount as security against payment for goods purchased. The security will be returned to the Company upon expiry of the agreement.

f) In November 2007, a subsidiary entered into an agreement with PTT Utility Co., Ltd. to purchase steam in a quantity and at a price stipulated in the agreement, which is for a period of 15 years, commencing from the facility commercial operation date or in any case within 1 October 2008. The agreement can be extended for another 5 years.

Financial Statement

211

32. FINANCIAL INSTRUMENTS

32.1 Financial risk management The Company and subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 48 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable and payable, short-term and long-term loans receivable, investments, and short-term and long-term loans payable. The financial risks associated with these financial instruments and how they are managed is described below.

Credit risk

The Company and subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans receivable, other receivables and notes receivable. The Company and subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and subsidiaries do not have high concentration of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loan receivables, other receivables and notes receivable as stated in the balance sheet.

Interest rate risk

The Company and subsidiaries’ exposures to interest rate risk relate primarily to their deposits at financial institutions, loans receivable, bank overdrafts, and loans payable with interest. However, since most of the Company and subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

Significant financial assets and liabilities as at 31 December 2007 classified by type of interest rates are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.

Financial Statement

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Fixed interest rates Within Over Floating Non- interest Average 1 year 1-5 years 5 years interest rate bearing Total interest rate

(Million Baht) (% p.a.) Financial assets Cash and cash equivalents - - - 61 51 112 0.5 - 1.5 Current investments - - - - 46 46 - Trade accounts receivable - unrelated parties - - - - 512 512 - Amounts due from related parties - - - - 3 3 - Pledged deposits at financial institutions - - - 120 - 120 2.25 - 2.5 Other short-term loans receivable 17 - - - - 17 5.0 17 - - 181 612 810

Financial liabilities Bank overdrafts and short-term loans from financial institutions 110 - - 110 - 220 3.25 - 3.75 Trade accounts payable - unrelated parties - - - - 1,597 1,597 - Amounts due to related parties Other short-term loans payable 52 - - - - 52 4.0 - 5.0 Other accounts payable - - - - 45 45 - Long-term loans - - - 130 - 130 LIBOR + 1.875, MLR - 0.5 Liabilities under finance leases 1 - - - - 1 3.99 - 7.55

163 - - 240 1,642 2,045

Foreign currency risk

The Company and subsidiaries’ exposures to foreign currency risk arise mainly from trading transactions and loans that are denominated in foreign currencies. The Company and subsidiaries reduce this risk by entering into forward exchange contracts when they consider appropriate. Generally, the forward contracts mature within one year.

The balances of financial assets and liabilities denominated in foreign currencies as at 31 December 2007 are summarised below.

Financial Financial Average exchange rate Foreign currency assets liabilities as at 31 December 2007

(Million) (Million) (Baht per 1 foreign currency unit) US dollar 10.5 2.9 33.77

Financial Statement

213

The Company has entered into forward foreign currency contracts to hedge foreign currency risk, in which the remaining balance amounted to USD 10.2 million as at 31 December 2007. Applicable forward selling rates are Baht 33.53 - 33.85 per USD 1.

32.2 Fair values of financial instruments

Since the majority of the Company and subsidiaries’ financial instruments are short-term, loans receivable and payable bear interest rates which are close to the market rate. The Company and subsidiaries expect that their fair values are not materially different from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.

33. SUBSEQUENT EVENTS

a) On 1 January 2008, PTEC purchased 15,300 shares (par value of Baht 100 per share) of SCT Sahaphan Co., Ltd. (“SAP”) from existing shareholders, equivalent to 51 percent of the total registered and paid-up share capital amounting to Baht 1.53 million. On 16 January 2008, an extraordinary general meeting of SAP’s shareholders approved the increase of the registered capital from Baht 3 million (30,000 ordinary shares of Baht 100 each) to Baht 5 million (50,000 ordinary shares of Baht 100 each), through the issuance of 20,000 additional ordinary shares with a par value of Baht 100 each, for offer in the same proportion to existing shareholders at Baht 125 per share. SAP registered the increase of its capital with the Ministry of Commerce on 12 February 2008.

b) In January 2008, VTN-P received the second installment from its sale of assets, equal to 65 percent of the contract price, or USD 5.43 million, and recorded it in other current liabilities. Consequently, VTN-P repaid the whole balance of long-term loan to the Export and Import Bank of Thailand, who cancelled the guarantee, as discussed in Note 19 to the financial statements.

Financial Statement

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214

c) On 16 January 2008, a meeting of the Company’s Board of Directors approved a resolution to repurchase the Company’s shares, in order to manage excess liquidity, with the repurchase not to exceed Baht 220 million, and not more than 52,987,022 shares, or 10 percent of the total paid-up capital. The repurchase period will be 1 February 2008 to 31 July 2008. The procedure and period for the resale of the shares will be determined by the Company’s Board of Directors at least 6 months but not more than 3 years after the date of completion of the share repurchase.

d) In January and February 2008, Pure Biodiesel Co., Ltd. called up the remaining unpaid capital of Baht 76 million and the Company has paid Baht 47.5 million.

e) On 25 February 2008, Meeting No. 2/2008 of the Company’s Board of Directors passed resolutions to propose the following resolutions for approval by the 2008 Annual General Meeting of the shareholders, which will be held on 3 April 2008.

1) Propose the payment of a final dividend of Baht 0.3 per share.

2) Propose the reduction of the registered share capital from Baht 530,048,171 to Baht 529,870,229, by canceling the 177,942 ordinary authorised but unissued shares with a par value of Baht 1 each, remaining from the exercise of the warrants.

34. RECLASSIFICATION

In addition to the change in accounting policy as mentioned in Note 4.1 to the financial statements, which affects the previously reported net income and shareholder’s equity, certain other amounts in the financial statements for the year ended 31 December 2006 have been reclassified to conform to the current year’s classification but with no effect to previously reported net income or shareholders' equity other than from the change in accounting policy.

35. APPROVAL OF FINANCIAL STATEMENTS

These financial statements were authorised for issue by the Company’s Board of Directors on 25 February 2008.

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MName-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2008 (Share/%)Work experience for the past 5 years

Mr. Viravat CholvanichChairman of the Board of Directors63 years- Senior Executive Program Massachusetts Institute of Technology(MIT)- MBA, Oregon State University, USA- Associate Diplomas, Industrial Management, Goteborg University,Sweden- B.A. (Business Administration), Chulalongkorn University- DAP : Directors Accreditation Program : Thai Institute of DirectorsAssociation106,125 Shares / 0.020%

2543 – Present Board Chairman Wang Nam Khew Winery Co.,Ltd.2541 – Present Board Chairman Rayong Purifier PLC.2540 – Present Board Chairman S T F E Co.,Ltd.2539 – Present Director Siam Steel Tower Co.,Ltd.2537 – Present Board Chairman Sri U-Thong Co.,Ltd.2535 – Present Board Chairman Zigma Concrete and ConstructionCo.,Ltd.2531 – Present Director Siam Steel Grating Co.,Ltd.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Suwinai SuwanhirunkulDirector/ Executive Board/ Managing Director52 years- MBA, Burapha University- B.Sc. (Chemical Engineering), Chulalongkorn University-DPC : Directors Certification Program: Thai Institute of Directors Association- Finance for Non-Finance Directors

10,035,749 Shares / 1.901%

2003-Present Managing Director Rayong Purifier PLC.2002-Present Director VTN-P Petrochemical Joint VentureCo.,Ltd.2006-Present Director Pure Sammakorn DevelopmentCo.,Ltd.2003-Present Director Pure Thai Energy Co., Ltd.2001-2004 Director Siam Gulf Petrochemical Co., Ltd.2000-Present Director BAC Brother Co., Ltd.1996-Present Executive Board Rayong Purifier Co., Ltd.1993-1996 Project Construction Manager Aromatic (Thailand) PLC.

Management and Connected PersonDescription

216

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Satja JanetumnugulDirector/ Executive Director53 yearsB.Engineering, King Mongkut’s University of Technology Thonburi-DAP : Directors Accreditation Program: Thai Institute of DirectorsAssociation9,312,375 Shares / 1.757%

2003-Present Director Benja Petroleum Co., Ltd.2006-Present Director Pure Sammakorn DevelopmentCo.,Ltd.2003-Present Director Jatuchak Oil Co., Ltd.2003-Present Director Burapha Rungroch Petroleum Co., Ltd.2003-2003 Managing Director Rayong Purifier PLC.2002-Present Director VTN-P Petrochemical Joint Venture Co., Ltd.2002-Present Director I-sanrungruang Petroleum Co., Ltd.2002-Present Director Metro Petroleum Co., Ltd.2001-Present Director Pure Thai Energy Co., Ltd.2001-Present Director Mitsamphan Petroleum Co., Ltd.2000-2004 Director Siam Gulf Petrochemical Co., Ltd.1998-Present Chairman of the Executive Board Petro-Instruments

Corp. Ltd.1995-Present Director SCT Petroleum Co., Ltd.1995-Present Executive Director Rayong Purifier PLC.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Sumit ChanmateeDirector/ Executive Board52 yearsB.Sc. (Chemical Engineering), Chulalongkorn University-DAP : DirectorsAccreditation Program: Thai Institute of Directors Association42,350 Shares / 0.008%

1995-Present Executive Board Rayong Purifier PLC.2006-Present Director Pure Sammakorn DevelopmentCo.,Ltd.2004-Present Director Pure Bio-Diesel Co.,Ltd.2003-Present Director Jatuchak Oil Co., Ltd.2003-Present Director Burapha Rungroch Petroleum Co., Ltd.2003-Present Director Benja Petroleum Co., Ltd.2002-Present Director VTN-P Petrochemical Joint Venture Co., Ltd.2002-Present Director I-sanrungruang Petroleum Co., Ltd.2002-Present Director Metro Petroleum Co., Ltd.

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2001-Present Director Pure Thai Energy Co., Ltd.2001-Present Director Mitsamphan Petroleum Co., Ltd.2001-Present Director Jaturatis Transport Co., Ltd.2000-2004 Director Siam Gulf Petrochemical Co., Ltd.1999-Present Director SCT Petroleum Co., Ltd.1997-Present Director Logic Consultant Co., Ltd.1998-1999 Director & General Manager Bangkok Can

Manufacturing Co., Ltd.1997-1998 Management Advisor The Siam Paraffine Co., Ltd.1995-1997 Managing Director The Petro Chain (Thailand) Co., Ltd.1994-1995 Managing Director General Environmental

Conservation Co., Ltd.(GENCO)1993-1994 General Director The Bangkok Industrial Gas Co., Ltd.1991-1993 Senior Executive Vice President The Bangchak

Petroleum PLC.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Supapong KrishnakanDirector/ Chairman of the Executive Board51 years- M.S. in Chemical Engineering & Process Control Computer,University of California, Davis, California, USA- M.S.c. Economics / Advance Engineering & Economics, CaliforniaState Polytechnic University, Pomona, California, USA- B.S. in Chemical Engineering, Chulalongkorn University, Bangkok,Thailand-DAP : Directors Accreditation Program: Thai Institute of Directors Association11,662,375 Shares / 2.201%

2000-Present Director/ Chairman of the Executive BoardRayong Purifier PLC.

2006-Present Director Pure Sammakorn Development Co.,Ltd.2004-Present Director Pure Bio-Diesel Co.,Ltd.2002- Present Director Pure Thai Energy Co., Ltd.2000-2004 Managing Director Siam Gulf Petrochemical Co., Ltd.1998-Present Director Honest and Efficient Co., Ltd.1996-2000 Managing Director Rayong Purifier Co., Ltd.1994-1995 Chairman Honest and Efficient Co., Ltd.1992-1993 Project Manager Si Chang Siam Solvent Co., Ltd.

And Si Chang Thong Terminal Co., Ltd.1987-1991 Project Engineer Bangchak Petroleum Co., Ltd.1981-1986 Process and Control Engineer Esso (Thailand) Co., Ltd.1979-1980 Engineer Industrial Enterprises Co., Ltd.

218

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Suthud KhancharoensukDirector50 years- MBA, Thammasat University- B.Sc., Chulalongkorn University-DAP : Directors Accreditation Pro-gram: Thai Institute of Directors Association-Board PerformanceEvaluation: Thai Institute of Directors Association3,920,750 Shares / 0.740%

1996-Present Director Rayong Purifier PLC.2007 - Present Director Pure Thai Energy Co., Ltd.2001-2004 President Petro-Instruments Corp. Ltd.1991-Present Director Petro-Instruments Corp. Ltd.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Tawat UngsuprasertDirector61 years- B.Sc. (Chemistry), Chulalongkorn University-DAP : Directors AccreditationProgram: Thai Institute of Directors Association40,350,250 Shares / 7.556%

2005-Present Director Jaturatis Transport Co., Ltd.2003-Present Chairman / Director SCT Petroleum Co., Ltd.1999-Present Director Rayong Purifier PLC.1999-Present Director Sherwood Chemical PLC.1993-1998 Industrial Market Manager The Shell Company in

Thailand Limited

219

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Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Dr.Vichit YamboonruangIndependent Director/ Chairman of The Audit Committee66 years- Ph.D.School of Public and International Affairs, University of Pittsburgh,USA- MA. (Economics), Columbia University, USA- BA. (Economics), Chulalongkorn University- DAP : Directors Accreditation Program : Thai Institute of DirectorsAssociation- DCP : Directors Certification Program : Thai Institute of DirectorsAssociation- Audit Committee Program : Thai Institute of Directors Association- The Role of Chairman : Thai Institute of Directors Association35,375 Shares / 0.007%

2003-Present Chairman of The Audit Committee Rayong PurifierPLC.

2000-Present Chairman of The Audit Committee JasminInternational PLC.

1999-Present President Global Bond Industrial Co., Ltd.1979-2000 Senior Vice-President Refining Sector & Acting

Senior Vice-President Natural Gas SectorPetroleum Authority of Thailand

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Arnooparp CharmikornIndependent Director/ Audit Committee53 years- M.S. (Chemical Engineering) University of Tennessee (Knoxville),USA- B.Sc. (Chemical Engineering), Chulalongkorn University- DAP : Directors Accreditation Program : Thai Institute of DirectorsAssociation- Audit Committee Program : Thai Institute of Directors Association106,125 Shares / 0.020%

2003-Present Audit Committee Rayong Purifier PLC.1992-2001 Executive Director Kuwate Petroleum (Thailand)

Co., Ltd.1979-1992 Department Manager Esso Standard Thailand PLC.

220

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr.Bibit BijaisoratatIndependent Director/ Audit Committee46 years- MBA National Institute of Development Administration- BA International Relations, Chulalongkorn University- DCP : Directors Certification Program : Thai Institute of DirectorsAssociation- Audit Committee Program : Thai Institute of Directors Association- CEO Succession & Effective Leadership Development : Thai Instituteof Directors Association106,125 Shares / 0.020%

2003-Present Audit Committee Rayong Purifier PLC.2002-Present Director Thai Insurance PLC.2002-Present Director Sammakorn PLC.2006-Present Director Pure Sammakorn Development Co.,Ltd.2002-Present Director Thai Insurance PLC.2001-Present Director Suvanachad Co., Ltd. Under His Majesty

The King’s Royal Patronage2000-Present Managing Director Mongkolchaipattana Co., Ltd.2000-Present Assistant Manager H.M. Private Property Office2000-Present Deputy Director H.M. Private Development Projects

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mrs. Siraporn KrishnakanAssistant to Managing Director52 years- MBA, California State Polytechnic University, Pomona, USA- B. of Accountancy, Chulalongkorn University1,157,990 Shares / 0.219%

2004-Present Assistant Managing Director Rayong Purifier PLC.2003-2003 GM–Management & Financial Function

Rayong Purifier PLC.2003-Present Internal Audit Office Manager (Action) Rayong

Purifier PLC.2006-Present Director Pure Sammakorn Development Co.,Ltd.2004-Present Director Pure Thai Energy Co., Ltd.2003-Present Director Pure Bio-Diesel Co.,Ltd.2002-Present Director VTN-P Petrochemical Joint Venture Co., Ltd.

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2003-Present Director Burapha Rungroch Petroleum Co., Ltd.2003-Present Director Benja Petroleum Co., Ltd.2002-Present Director I-sanrungruang Petroleum Co., Ltd.2002-Present Director Metro Petroleum Co., Ltd.2001-Present Director Mitsamphan Petroleum Co., Ltd.2001-2007 Director Jaturatis Transport Co.,Ltd.1999-Present Director SCT Petroleum Co.,Ltd.1998-2003 Director Yothin Petroleum Co., Ltd.1988-Present Director Honest and Efficient Co., Ltd.1996-1998 Senior Vice President Budgeting / Accounting /

Finance Department Bangkok Terminal Co., Ltd.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Bunlue SripodokSenior Executive Director50 years- MBA, Chulalongkorn University- B.Sc. (Engineering), King Mongkut’s University of TechnologyThonburi184,877 Shares / 0.035%

2007-Present Managing Director Pure Bio-Diesel Co.,Ltd.2007-Present Senior Executive Director Rayong Purifier PLC.1996-2006 Assistant Managing Director Rayong Purifier PLC.2003-Present Director Pure Thai Energy Co., Ltd.2003-Present Director Jatuchak Oil Co., Ltd.2003-Present Director Benja Petroleum Co., Ltd.2003-Present Director Burapha Rungroch Petroleum Co., Ltd.2002-Present Director I-sanrungruang Petroleum Co., Ltd.2002-Present Director Metro Petroleum Co., Ltd.2001-Present Director Mitsamphan Petroleum Co., Ltd.2001-Present Director Jaturatis Transport Co., Ltd.

222

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Somboon SirichainarumitrGeneral Manager-Finance & Administration Function43 years- Master Degree in Economics, NIDA- B.B.A (Accounting), Thammasat University90,085 Shares / 0.017%

2007-Present GM-Finance & Administration Function RayongPurifier PLC.

2005-2006 GM-Finance & Accounting Function RayongPurifier PLC.

2003-2004 Finance & Administration Director Asian MarineServices PLC.

1997-2002 Accounting Department Manager Asian MarineServices PLC.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Ms. Kanokporn JarukulvanichSenior Executive Director40 years- MBA, NIDA- B.Sc. (Chemical Engineering), Chulalongkorn University184,412 Shares / 0.035%

2005-Present GM-Marketing Function Rayong Purifier PLC.2004-2004 GM-Marketing & Trading Function Rayong Purifier PLC.2003-Present Director Jatuchak Oil Co., Ltd.2003-Present Director Burapha Rungroch Petroleum Co., Ltd.2003-Present Director Benja Petroleum Co., Ltd.2002-Present Director I-sanrungruang Petroleum Co., Ltd.2002-Present Director Metro Petroleum Co., Ltd.2001-Present Director Mitsamphan Petroleum Co., Ltd.2001-Present Director Jaturatis Transport Co., Ltd.1999-Present Director SCT Petroleum Co., Ltd.2001-2004 General Manager SCT Petroleum Co., Ltd.1998-2001 Business Department Manager Rayong Purifier Co., Ltd.

223

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Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr. Somsak KitsinSenior Executive Director48 years- MBA, Thammasat University- B.Sc. (Chemical Technology), Chulalongkorn University144,547 Shares / 0.027%

2007-Present GM-Supply & Logistics Function Rayong Purifier PLC.2003-2006 GM-Manufacturing Function Rayong Purifier PLC.1997-2003 Engineering Department Manager Thai Plastic

and Chemical PLC.1995-1997 Production Department Manager Thai Plastic

and Chemical PLC.

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Ms.Kallaya KlaithongGeneral Manager-Commercial Function38 yearsMaster of Engineering, Chulalongkorn UniversityBachelor of Science (Chemical Engineering), Chulalongkorn University

154,685 Shares / 0.029%

2007-Present GM-Commercial FunctionRayong Purifier PLC.2005-2006 GM-Supply & Logistiscs Function Manager

Rayong Purifier PLC.2005-Present General Manager Jaturatis Transport Co., Ltd.2005-Present Director Jaturatis Transport Co., Ltd.2003-2005 Supply Department Manager Rayong Purifier PLC.1999-2003 Technology & Development Manager

Rayong Purifier PLC.

224

Name-SurnamePosition (1)

Age (Year)Education

Shareholding Portion (2) & (3) As of December 7,2007 (Share/%)Work experience for the past 5 years

Mr.Wasun SuetrongGeneral Manager-Manufacturing Function38 yearsBachelor’s of Industrial of Technology in Material HandlingTechnology,King Mongkut’s Industrial of Technology, North Bangkok.170,718 Shares / 0.032%

2007-Present GM- Manufacturing Function Rayong Purifier PLC.2004 – 2006 Project Director VTN-P

VTN-P Petrochemical Joint Venture Co.,Ltd.2003 – 2004 Special Project Director

VTN-P Petrochemical Joint Venture Co.,Ltd.2003 – 2003 General Manger Rayong Purifier PLC.1996 – 2003 Operation Department Manager Rayong Purifier PLC.

Remark(1) The authorized signatory comprises 1.) Mr. Supapong Krishnakan, Mr. Satja Janetumnugul, Mr.

Sumit Chanmatee, Mr. Suwinai Suwanhirunkul, two out of these four directors jointly sign with the Company’s seal or2.) Mr. Supapong Krishnakan or Mr. Satja Janetumnugul or Mr. Sumit Chanmatee or Mr. Suwinai Suwanhirunkul, oneof these four directors jointly sign with Mr. Viravat Cholvanich or Mr. Suthud Khancharoensuk or Mr. Tawat Ungsuprasertand stamp with the Company’s seal.

(2) Including share portion of spouse and children who are under 20 years old.(3) Share portion as of December 7, 2007 with Par Value 1.00 Baht per Share. The registered and paid

up is 529,870,229 Baht as of December 7, 2007.