Financial Highlights 2

Message from the Chairman 3

Board of Directors and Audit Committee 4

Social Activities 2006 7

General Information 9

Nature and Scope of Business 12

Risk Factors 14

Shareholders and Management 16

Corporate Governance 24

Related Party Transactions 31

Audit Committee’s Report 35

Remuneration Committeels Report 36

Board of Director’s Responsibility for Financial Report 37

Management’s Comments and Analysis 38

Report of Independent Auditor 41

Financial Statements 42

* ¢éÍÁÙŵèÍËØé¹ (˹èÇ : ºÒ·)

-

10

In 2006 the Thai automotive industry grew by 6% comparedwith the year before, with a total of 1,188,044 vehicles beingproduced. Total domestic vehicle sales reached 682,161 units,representing a 3% drop, while 538,966 units were exported anincrease of 22%. The fall in domestic sales is attributable togeneral economic slow-down, political uncertainty and fluctuatingoil prices, which rose considerably between April and August,plus the impact of a natural disasters which struck several areas ofthe country in the period August to October. In any case auto exportslook set to continue their sustained upward trend.

Looking forward into 2007, the Federation of Thai Industries expectsmodest growth in the overall vehicle market, with the domestic marketgrowing very little but exports of vehicles and parts performing strongly,propelled by free trade agreements. We can expect to see more low cost cars fromChina and India making an appearance in our market. Players in the Thai industry willhave to accelerate the adaptation of their production cost structures in order to be able to compete,and will also have to seek out new business opportunities and strategic partners. In any case Thailand still has animportant role to play, and is ready to become an ASEAN production hub, as evidenced by the fact that several major global automakers have increasedtheir capacity and transferred their production bases here with a view to using Thailand as their worldwide export production hub.

For, 2006 Thai Rung was a difficult year. Sales of the Company’s multi-purpose vehicles were hit by ever-fiercer competition in the market, higheroil prices and political uncertainty. Sales of the TR Bangkok Limousine under the joint Thai taxi development project with SME Bank are still belowtarget due to the big rise in the price of diesel fuel. As a result, the Company’s performance for 2006 was disappointing. Nevertheless we succeededin expanding income from our parts business and from contract assembly work by over 30% on the previous year, and should continue to show sustainedgrowth going forward.

Turning to the business outlook for 2006, the Company remains determined to develop its multi-purpose vehicles and special purpose vehicles to meetcustomer requirements and offer a wider variety of products. The Company has joined hands with a new business partner to develop a new model ofmulti-purpose vehicle based on the Chevrolet Colorado pickup truck, which will be launched in early 2007, opening up another customer group and anew outlet channel for the Company’s multi-purpose vehicles. The Company is constantly on the look-out for possible new alliances with foreignpartners to invest together in expanding production capacity for both metal and plastic parts and for opportunities for contract assembly of variousmakes of vehicles for sale both at home and abroad. We will also continue to push our dies and jigs business so as to take advantage of the overallsustained growth of the high value automotive and auto parts industries, focusing at the same time on ensuring that product quality is up to internationalstandards, that our prices are right, and that we can remain competitive into the future.

The Company attaches great importance to, and consistently adheres to the principles of good corporate governance in order to assure the Company’songoing progress, growth and stability under efficient and transparent management and to bolster the confidence of all stakeholders, for the greatestbenefit of the Company and its shareholders. In 2006 the Company was assessed as ‘good’ by the Thai Institute of Directors’ ‘Corporate GovernanceReport of Thai Listed Companies 2006’, and was also assessed as ‘good’ in the joint SEC-BOI ‘AGM check-list’. The Company will continue to striveto improve the standard of corporate governance.

On behalf of the Company’s Board of Directors I should like to thank our customers, our shareholders, the various organisations and departments bothgovernmental and private, and all our employees and stakeholders who are a driving force in their constant support. We count on the continued supportof all concerned in further developing the Company’s growth and future success.

Pranee Phaoenchoke Chairman

4

1. �������� ��� ��������������� ��� �������������������

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�����+�� Director Certification Program 26/2003 : IOD�������������������� ( 31 �.". 2550) : 25,715,000 ��,� (5.13%)

1. Mrs. Pranee PhaoenchokeChairman of the Board of Directors & President

Academic qualifications:Honorary doctorate in Business Administration,

American Coastline University, U.S.A.Honorary MasterGs Degree in Commerce and Accountancy

Thammasart UniversityWork Experience:

- Chairman of the Board of Directors & President ofThai Rung Union Car Plc.

- Director & President ofChaicharoenkij Motors Co. Ltd. Thai V.P. Corporation Co. Ltd.Thai Rung Tools and Dies Co. Ltd. Thai V.P. Auto Service Co. Ltd.Thai Ultimate Car Co. Ltd. V.P. Auto Enterprise Co. Ltd.Sinthoranee Property Co. Ltd. First Part Co. Ltd.Isuzu Chaicharoenkij Motors Co. Ltd. Delta-TR Co. Ltd.Thai Auto Pressparts Co. Ltd. Thai Auto Body Assembly Co.Ltd.Europe Thai Car Rent Co. Ltd. Isuzu V. Motor Co. Ltd.Lexus Auto City Co. Ltd. TRU Leasing Co. Ltd.

Shareholding as of January 31, 2007 : 245,387,500 shares (48.92%)

2. Mr. Sompong PhaoenchokeDirector & Managing Director

Academic qualifications:MasterGs degree in Industrial Engineering, Keio University, Japan

Work Experience:- Director & Managing Director of Thai Rung Union Car Plc.- Chairman of Risk Management Committee of Thai Rung Union Car Plc.- Director & Vice President of

Thai V.P. Corporation Co. Ltd. Thai Ultimate Car Co. Ltd.V.P. Auto Enterprise Co. Ltd. First Part Co. Ltd.Isuzu Chaicharoenkij Motors Co. Ltd. Europe Thai Car Rent Co. Ltd.Isuzu V. Motor Co. Ltd. Lexus Auto City Co. Ltd.

- Director & Managing Director ofThai Rung Tools and Dies Co. Ltd. Thai V.P. Auto Service Co. Ltd.Delta-TR Co. Ltd. Thai Auto Pressparts Co. Ltd.TRU Leasing Co. Ltd.

- Director ofChaicharoenkij Motors Co. Ltd. Sinthoranee Property Co. Ltd.Thai Auto Body Assembly Co. Ltd. Thai Auto Conversion Co. Ltd.

Director Certification Program 26/2003: IODShareholding as of January 31, 2007: 25,715,000 shares (5.13%)

3. ��������#�$� ��%���'��������

������������� :�������� " $&� �'�������(�$������' ���������������������

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�������������"�����)�* ���.#����)*�+��)��"���- �������@+,������ ��.(��-#�� �"�����,��������+�� Director Accreditation Program 10/2004 : IOD�������������������� ( 31 �.". 2550) : 80,000 ��,� (0.02%)

3. Mr. Somkiat NimraweeDirector

Academic qualifications:BachelorGs degree in Finance & Accounting, Thammasart University

Work Experience:- Director, Executive Board, Member of Remuneration Committee

and Risk Management Committee of Thai Rung Union Car Plc.- Managing Director of Dan-Thai Equipment Co. Ltd.

Director Accreditation Program 10/2004: IODShareholding as of January 31, 2007: 80,000 shares (0.02%)

5

4. ������'(� ��� ���������

������������� :Bachelor Degree in Financial Administration

University of New England Australia ���������� :

- ������� (�$������������� ���.#����)*�+��)��"���- �������(�$��$�����,���,��)������

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- ���������.'������������������ ��.#�� �.&. ��!�,�/��������.#����)* �+��� (���� #��� ��. ����� &�Z�&�&����,��.#����!�, �&��&���� ��.#����!�, ���, (���/���,��. ������+ ��/�)*

�����+�� Director Certification Program 29/2003 : IOD�������������������� ( 31 �.". 2550) : 27,191,250 ��,� (5.42%)

4. Ms. Kaewjai PhaoenchokeDirector

Academic qualifications:Bachelor Degree in Financial Administration

University of New England AustraliaWork Experience:

- Director & Executive Board of Thai Rung Union Car Plc.- Director & Chief Executive Officer of

Thai Ultimate Car Co. Ltd. Thai V.P. Corporation Co. Ltd. First Part Co. Ltd. Isuzu Chaicharoenkij Motors Co. Ltd. V.P. Auto Enterprise Co. Ltd. Europe Thai Car Rent Co. Ltd. Isuzu V. Motor Co. Ltd. Lexus Auto City Co. Ltd.

- Director ofChaicharoenkij Motors Co. Ltd. Thai V.P. Auto Service Co. Ltd.Thai Rung Tools and Dies Co. Ltd. Sinthoranee Property Co. Ltd.Thai Auto Pressparts Co. Ltd. Thai Auto Body Assembly Co. Ltd.TRU Leasing Co. Ltd.

Director Certification Program 29/2003: IODShareholding as of January 31, 2007: 27,191,250 shares (5.42%)

5. ���'�)��!# ��� ���������

������������� :������!� ������������������� �����������!"����� ��$�����*�[�

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���. #����)*�+��)��"���- �������(�$�������@+,������

��. ����� &�Z�&�&����, ��. �/+/�'��������������������. '������������������ ��. �/+/� � �������

- �������(�$��*�������@+,������ ��.#�� �.&.��!�,�/������- �������

��.#����������"��� ��.#����!�, �&��&������.#�� �.&. "�������'�)� ��.#����!�, ���, (���/���,��.�.&. ��!�,��0������#&��� ��.#����)* �+��� (���� #�����.������+ ��/�)* ��.����,�-�������.��!��-#��"�����,���

�������������������� ( 31 �.". 2550) : 22,500,000 ��,� (4.49%)

5. Mr. Wuttichai PhaoenchokeDirector

Academic qualifications:MasterGs degree in Automotive Engineering, Coventry University, U.K.

Work Experience:- Director, Executive Board and Member of Risk Management

Committee of Thai Rung Union Car Plc.- Director & Managing Director of

Sinthoranee Property Co. Ltd. Isuzu Chaicharoenkij Motors Co. Ltd.Chaicharoenkij Motors Co. Ltd. Isuzu V. Motor Co. Ltd.

- Director and Deputy Managing Director of Thai V.P. Auto Service Co. Ltd.- Director of

Thai Ultimate Car Co. Ltd. Thai Auto Pressparts Co. Ltd.Thai V.P. Corporation C0. Ltd. Thai Auto Body Assembly Co. Ltd.V.P. Auto Enterprise Co. Ltd. Thai Rung Tools and Dies Co. Ltd.TRU Leasing Co. Ltd. Delta-TR Co. Ltd.Europe Thai Car Rent Co. Ltd.

Shareholding as of January 31, 2007: 22,500,000 shares (4.49%)

6. �������� ��*'�+!������������������������������$�'���

������������� :������������������������ ��� �������������� ��\��*�� ������������������!��������������� MS (Industrial Engineering & Management)

Oklahoma State University ��$�������%����������������,�*�����'�� ����� (���. ��)� 32)

���������� :- �����������$, ��$����������������� (�$��$����������

�X���")����(�� ���. #����)*�+��)��"���- �������(�$�������������� ���. �+�/������#��- ��$����������

��.�)������)�*��*"��*���",� ���.��)*"�]��������.���� &.&. ����������'�)�(�� ��.(&������� �(1992)��.��0�#������0���&��&� (���� ���������.'���������*&�&���"(���� ��.�����%&�̂ ��

- @+,'X������&�����$�����̂ ������� �_�������- �������&���� ��)�*����� ��$���*(�**��(�$�����������*"�- ���������'�����$����������� ��̀���'�������(�$"�������_��

���"����������{��(�)*��$���#�������+�� Director Certification Program 39/2004 : IOD�����+�� Finance for Non-Finance Directors 8/2004 : IOD�������������������� ( 31 �.". 2550) : 230,000 ��,� (0.03%)

6. Mr. Pricha AttavipachIndependent Director & Chairman, Audit Committee

Academic qualifications:BachelorGs Degree in industrial engineering Chulalongkorn UniversityMasterGs Degree (MS) in engineering (Industrial Engineering &

Management) Oklahoma State University, U.S.A.National Defence College of Thailand, Class of 1989

Work Experience:- Independent Director & Chairman, Audit Committee and

Remuneration Committee of Thai Rung Union Car Plc.- Director and Member of the Audit Committee, Siam Cement Plc.- Chairman of

Ruamkijaungthong Warehouse Co. Ltd. Tongkah Harbour Plc.SIAM P.P. International Co.Ltd. Pan-Paper 1992 Co.Ltd.Environment Pulp and Paper Co. Ltd.Chaiyananbangplee Parkland Co. Ltd. Ekaratpattana Co. Ltd.

- Specialist Senior Engineering (Industrial Engineer), Council of Engineers- Law Councilor of Ministry of Labour- Academic Director of the Safety and Health Vocational Management System,

The Engineering Institute of Thailand Under H.M. The KingGs PatronageDirector Certification Program 39/2004: IODFinance for Non-Finance Directors 8/2004: IODShareholding as of January 31, 2007 : 230,000 shares (0.03%)

66

7. ����� -��% /���!' ��� "�!�"��������

������������� :������!� ����������� ���������������������Bachelor Degree in Financial Administration

University of New England Australia ���������� :

- ������� ���.#����)*�+��)��"���- �������@+,������ ��. Astudo Holding

�������������������� ( 31 �.". 2550) : #�)�

7. Mr. Anthony Farquhar McDonaldDirector

Academic qualifications:MasterGs degree in Marketing Thammasart UniversityBachelor Degree in Financial Administration

University of New England AustraliaWork Experience:

- Director of Thai Rung Union Car Plc.- Managing Director of Astudo Holding Co. Ltd.

Shareholding as of January 31, 2007: None

8. ������� �����������������

������������� :B.S. in Business Administration, Boston University

School of Management, U.S.A. ���������� :

- �����������$ ���.#����)*�+��)��"���- ��$����������

���. ('*��-�� !]��0� ���. '�� "�������'�)���. ]���,� ��!�!���� (��$���#��) ��.#���,X��&��

- ����������. }��� ���. ����������. �������������!���$ ���.!]� !������� �/0������

�������������������� ( 31 �.". 2550) : #�)�

9. ����'� '��'!$����������� ����������$�'���

������������� :�������� Electrical Engineering

Royal Melbourne Institute of Technology, Australia ���������� :

- �����������$, �������������� (�$��������X���")����(�� ���.#����)*�+��)��"���

- ��$�����������������, �����������$(�$��������X���")����(�� ���. #������"����

- ��$���������� ��."��.�.�. "���'�)������+�� Director Forum Program 1/2000 : IOD�����+�� Director Accreditation Program 23/2004 : IOD�����+�� Director Certification Program 58/2005 : IOD�����+�� Finance for Non-Finance Directors 18/2005 : IOD�����+�� Audit Committee Program 10/2005 : IOD���������������){̀� ( 31 �.". 2550) : #�)�

9. Mr. Kavee VasuvatIndependent Director & member, Audit Committee

Academic qualifications:BachelorGs degree in Electrical Engineering

Royal Melbourne Institute of Technology, AustraliaWork Experience:

- Independent Director & Member, Audit Committeeand Remuneration Committee of Thai Rung Union Car Plc.

- Independent Director & Chairman Audit Committeeand Member Remuneration Committee of Thai Steel Cable Plc.

- Chairman of Q.E.D. Creation Co. Ltd.Director Forum Program 1/2000 : IODDirector Accreditation Program 23/2004 : IODDirector Certification Program 58/2005 : IODFinance for Non-Finance Directors 18/2005 : IODAudit Committee Program 10/2005 : IODShareholding as of January 31, 2007 : None

10.������'-#� ���'����������������� ����������$�'���

������������� :������!� Wagner College NY New York U.S.A.

���������� :- �����������$, �������������� (�$�������������"�����)�*

���.#����)*�+��)��"���- �������/�������@+,�X������ ���. ��0� � �"- �������

���. !�*(���������"�� (��$���#��)���. ����#�/��� (���� (�������. ����&�������

�����+�� Director Certification Program 9/2001 : IOD�����+�� Audit Committee Program 15/2006 : IOD���������������){̀� ( 31 �.". 2550) : 15,012 ��,� (0.003%)

10. Mr. Suvait TheeravachirakulIndependent Director & member, Audit Committee

Academic qualifications:MasterGs degree in MBA, Wagner College, New York NY, U.S.A.

Work Experience:- Independent Director & Member, Audit Committee

and Risk Management Committee of Thai Rung Union Car Plc.- Director & President of MBK Plc.- Director of

Royal Orchid Hotel (Thailand) Plc.Patum Rice Mill and Granary Plc.Siam Piwat Co. Ltd.

Director Certification Program 9/2001: IODAudit Committee Program 15/2006: IODShareholding as of January 31, 2007: 15,012 shares (0.003%)

8. Mr. Phong SarasinIndependent Director

Academic qualifications:B.S. in Business Administration, Boston University

School of Management, U.S.A.Work Experience:

- Independent Director of Thai Rung Union Car Plc.- Chairman of

Shangri-la Hotel Plc. Shin Corporation Plc.Honda Cars Mfng. (Thailand) Co. Ltd. Thai Namthip Co. Ltd.

- Director ofFajeep Plc. Sammakorn Plc.Rojana Industrial Park Plc. Home Product Center Plc.

Shareholding as of January 31, 2007: None

7

°‘®°√√¡ª’ 2549 : SOCIAL ACTIVITIES 2006

��.����� ���� � ��������������������� �������

������������������! "#��� (��� �) ��"���$�����%�&'����������*�����

+���,"*��������� ������-/ �*0���,������ �!%�����1��/2���"

/���3 -������/���

Mrs. Pranee Phaoenchoke, President of the Thai Rung Union Car group

of companies, donated a pickup truck to the Somdej Phrapiyamaharaj

Rommaneeyakhate Hospital foundation for use in carrying out its mission

���5�6 �� ���� � ������������ ������������������! "#���

(��� �) �#�$ TR ADVENTURE ���� 39 �� "#�5� 2 ��� �-&���5�+���+���

�����������-�� �����&��������/"�� :*�: ������;��/�� *���+������!

"������! ��,�������%����������*0��#��% &%�������������/��/�

"��"���%�����%�&$<� (ARRIVE ALIVE) ��0�5����� 15 ���5��� 2549 �

/<�+��/��/�� �#�������;���

On 15th December 2006 in the Santimaitri Building, Government House,

Mr. Wuttichai Phaoenchoke, Director of Thai Rung Union Car Plc, was

received by Prime Minister Surayud Chulanont who took delivery of twoTR Adventure 39th Anniversary Version station wagons donated to the

JIf you drink, donKt driveQ foundation for use in the New Year JArrive

aliveQ accident reduction campaign.

���+�*��! ���� � ���������&"����� '$��-��5���/�5�$

������+��! 7 ����� ��/�5"�� �Z�%��� �� ��Z������� 39 �� (TR

ADVENTURE 39thAnniversary Version) '�����+0��5� ������&

��������/"�� ��.���"� ������#��� ������������������ �����

�����!���[!��/�! �� ���'�� "#��� ��5����%�*��

Managing Director Mr. Sompong Phaoenchoke gave a press conference

on the occasion of the launch of the new-look seven-seater TR

Adventure 39th Anniversary Version. The conference was also attended

by Dr. Prajin Uiemlumnao, Chairman of Grand Prix International.

���'�&5��&� ���� � ��&"��������5�� ����� ������������������!

"#��� (��� �) ��,�/�5'����������5�� J+$��������"���������

���"#�� 2549Q �&��'�����+��*���!'���&��+5�+����'����� "�����

+5�+����'����&����'����� �����5�'�����'��+5�+����+���� �

�&���� �� %��� �&� 2 ����+���� � �/

Mrs. Kaewkao Phaoenchoke, General Manager of Thai Rung Union Car

Plc, took possession of the Outstanding Workplace Award 2006 in the

categories worker relations and workersK welfare from the Department of

Labor Protection and Welfare of the Ministry of Labor in the big meeting

room , 2nd floor, Sahaprachachat building.

8

����� ������������������! "#��� (��� �) ��&������5�� J�$��/!

��������'����� 2549Q (Car of the Year 2006) +�-��5�/���������������

(Thai Innovation Award) "�� :*�: +���� "<�������0��" ��������;��/��

%�����������/�!�� ���'�� ��/�!� 5! ���&���� 27 �����,�������

���5�� Car of the Year 5 ��[&� "<���,����0�������/���&5����/2�� !̂�������:

�����,��5�/�������������5�����������5&��&����/���0��

Thai Rung Union Car Plc received the Car of the Year 2006 award in the

category Thai Innovation from Deputy Prime Minister Suriya

Jungrungreangkit at the 27th Bangkok International Motor Show. This is

the fifth consecutive year that the Company has received the award, which

says a lot about its product innovation and quality.

��.���"� ������#��� ���������"����� �������/�!

�� � ��'�� ��/�!� 5! %�&�����/��,�������%�*�������5��$&5�

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�'���$��/! TAS Contest ���&���� 4 5����� 23 ������ 2549 �

����������/�!�� ���'�� ��/�!� 5! ���&���� 27

Dr. Prajin Uiemlumnao, Chairman of the Bangkok International Motor

Show, did us the honor of chairing the ceremony in which the Royal Cup,

from His Royal Highness the Crown Prince, was presented to winners of

the 4th TAS auto design competition on 23rd March 2006 at the 27th

Bangkok International Motor Show, and of conversing with the winners

and other competitors.

����� ������� ������! "#��� (��� �) ��5��������� �����!��� !

��/�!�� ���'�� "#��� ��&"������������/�!�� ���'�� ��/�!� 5!

'���� �����/!+����'��������z���%�*������� ��$��2!

"�������������5��'���$��/! TAS Contest ���&���� 5 %���5-&

JShall we go Dad?Q J�$������5���%��� *���������� �/Q

Thai Rung Union Car Plc together with Grand Prix International

Co. Ltd., organizers of the Bangkok International Motor Show, and the

Royal Automobile Association of Thailand under Royal Patronage, held

the fifth TAS auto design contest under the headings JShall we go Dad?Q

and JNew age green-powered family carQ.

����2�� +�*���z��;! � � & �5���������� &" ����� �����

������������������! "#��� (��� �) �-&���5�*�����'�������$�������: %�

����������5�����*�������/ 9 �+&����$5��*��*���5�������

��������5'��������z��� '�� ��.���"� ������#��� ����������!���[!

��/�!�� ���'�� "#��� � �&�+�����5�

Mr. Noppadol Suplaset, Assistant Managing Director of Thai Rung

Union Car Plc, joined the starting ceremony of a Thai Rung Rally to

celebrate H.M. the KingKs JThailand Grand Invitation 2006Q initiative,

together with the Tourism Authority of Thailand and Dr. Prajin

Uiemlumnao, Chairman of Grand Prix International, at the Sanam Luang.

9

GENERAL INFORMATION

Listed CompanyListed CompanyListed CompanyListed CompanyListed Company Thai Rung Union Car Public Company Limited

Companies Register NumberCompanies Register NumberCompanies Register NumberCompanies Register NumberCompanies Register Number 0107536001435

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.524,996,497 divided into 524,996,497 ordinary shares of Bt.1 each.

Paid-up share capitalPaid-up share capitalPaid-up share capitalPaid-up share capitalPaid-up share capital Bt.501,589,497 (as at 31st January 2007)

Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities - Product design, research and development

- Manufacture of dies and jigs

- Manufacture of automotive parts

- Vehicle assembly and modification

AddressAddressAddressAddressAddress 28/6 Moo 1, Phetchkasem Road Soi 81,

Nongkhangphloo, Nong Khaem, Bangkok 10160

Tel :Tel :Tel :Tel :Tel : 0-2431-0071-2, 0-2431-0065, 0-2420-0076

Fax :Fax :Fax :Fax :Fax : 0-2812-0844, 0-2814-5030, 0-2420-3664

WebsiteWebsiteWebsiteWebsiteWebsite http://////////www.thairung.co.th

Securities RegistrationSecurities RegistrationSecurities RegistrationSecurities RegistrationSecurities Registration Thailand Securities Depository Company Limited

62, Stock Exchange of Thailand Building,

Rachadaphisek Road, Klong Toey, Bangkok 10110

AuditorsAuditorsAuditorsAuditorsAuditors Mr. Songdej Pradisthsamaanon, CPA. No. 2349 or

Mr. Sophon Phermsiriwanlot, CPA. No. 3182 or

Miss Sumalee Reewarabandith, CPA. No. 3970

Ernst & Young Office Ltd.,

193/136-137 Lake Rachada Building, 33rd Floor, Rachadaphisek Road,

Klong Toey, Bangkok 10110

Tel: 0-2264-0777, 0-2661-9190

Fax: 0-2264-0789-90, 0-2661-9192

9

10

Group Structure of Thai Rung Union Car Public Company Limited and subsidiariesGroup Structure of Thai Rung Union Car Public Company Limited and subsidiariesGroup Structure of Thai Rung Union Car Public Company Limited and subsidiariesGroup Structure of Thai Rung Union Car Public Company Limited and subsidiariesGroup Structure of Thai Rung Union Car Public Company Limited and subsidiariesas at 31as at 31as at 31as at 31as at 31ststststst December 2006 December 2006 December 2006 December 2006 December 2006

* Thai Rung Tools and Dies Co., Ltd., formerly called Thai Rung General Motor Co., Ltd., registered its change of name on 3rd March 2006.

General Information on Subsidiaries and Joint Venture Companies

Subsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesSubsidiary CompaniesThai Rung Tools and Dies Co., Ltd.Thai Rung Tools and Dies Co., Ltd.Thai Rung Tools and Dies Co., Ltd.Thai Rung Tools and Dies Co., Ltd.Thai Rung Tools and Dies Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.27,000,000 issued and fully paid up, divided into 270,000 ordinary shares of Bt.100 eachAddressAddressAddressAddressAddress 28/22 Moo 1, Phetchkasem Rd. Soi 81, Nongkhangphloo, Nong Khaem, Bangkok 10160Tel:Tel:Tel:Tel:Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076Fax:Fax:Fax:Fax:Fax: 0-2814-5030, 0-2420-3664Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Manufacture of dies and jigs.

Thai V.P. Auto Service Co., Ltd.Thai V.P. Auto Service Co., Ltd.Thai V.P. Auto Service Co., Ltd.Thai V.P. Auto Service Co., Ltd.Thai V.P. Auto Service Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.25,000,000 issued and fully paid up, divided into 250,000 ordinary shares of Bt.100 eachAddressAddressAddressAddressAddress 17/22 Moo 2, Phetchkasem Rd. Soi 81, Nongkhangphloo, Nong Khaem, Bangkok 10160Tel:Tel:Tel:Tel:Tel: 0-2420-6708, 0-2420-4823, 0-2812-1445-6Fax:Fax:Fax:Fax:Fax: 0-2420-1601Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Sale of spare parts and accessories, after-sales service centre

11

Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.400,000,000 issued and fully paid up, divided into 4,000,000 ordinary shares of Bt.100 eachFactory AddressFactory AddressFactory AddressFactory AddressFactory Address Amata City Industrial Estate 7/122 Moo 4, National Highway 331, Tambol Marpyarngphorn,

Amphoe Pluak Daeng, RayongTel:Tel:Tel:Tel:Tel: (038) 956-156, 956-239-42Fax:Fax:Fax:Fax:Fax: (038) 956-169Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Manufacture of automotive body parts

Thai Ultimate Car Co., Ltd.Thai Ultimate Car Co., Ltd.Thai Ultimate Car Co., Ltd.Thai Ultimate Car Co., Ltd.Thai Ultimate Car Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.25,000,000 issued and fully paid up, divided into 25,000 ordinary shares of Bt.1,000 eachAddressAddressAddressAddressAddress 371 Vibhavadee Rangsit Road, Khwaeng Samsennai, Khet Phayathai, Bangkok 10400Tel:Tel:Tel:Tel:Tel: 0-2616-1040-59Fax:Fax:Fax:Fax:Fax: 0-2616-1063Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Vehicle dealership, after-sales service, sale of spare parts.

TRU Leasing Co., Ltd.TRU Leasing Co., Ltd.TRU Leasing Co., Ltd.TRU Leasing Co., Ltd.TRU Leasing Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.60,000,000 issued and fully paid up, divided into 600,000 ordinary shares of Bt.100 eachAddressAddressAddressAddressAddress 28/6 Moo 1, Phetchkasem Rd. Soi 81, Nongkhangphloo, Nong Khaem, Bangkok 10160Tel:Tel:Tel:Tel:Tel: 0-2812-2930, 0-2812-2940Fax:Fax:Fax:Fax:Fax: 0-2812-2909Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Purchase, sale, rental, leasing and hire-purchase finance of motor vehicles

Thai Auto Body Assembly Co., Ltd. (not yet active)Thai Auto Body Assembly Co., Ltd. (not yet active)Thai Auto Body Assembly Co., Ltd. (not yet active)Thai Auto Body Assembly Co., Ltd. (not yet active)Thai Auto Body Assembly Co., Ltd. (not yet active)

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.12,000,000 of which 25% issued and paid up, divided into 120,000 ordinary shares ofBt.100 each

AddressAddressAddressAddressAddress 68 Moo 1 Chonburi-Ban Bung Rd., Tambol Nongsamsark, Amphoe Ban Bung, ChonburiBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Assembly of various kinds of auto bodies for commercial use.

Joint Venture CompaniesJoint Venture CompaniesJoint Venture CompaniesJoint Venture CompaniesJoint Venture CompaniesDelta-TR Co., Ltd.Delta-TR Co., Ltd.Delta-TR Co., Ltd.Delta-TR Co., Ltd.Delta-TR Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.20,000,000 issued and fully paid up, divided into 200,000 ordinary shares of Bt.100 eachAddressAddressAddressAddressAddress 28/23 Moo 1, Phetchkasem Rd. Soi 81, Nongkhangphloo, Nong Khaem, Bangkok 10160Tel:Tel:Tel:Tel:Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076Fax:Fax:Fax:Fax:Fax: 0-2812-4302Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Manufacture of automotive seats and related components.

Thai Auto Conversion Co., LtdThai Auto Conversion Co., LtdThai Auto Conversion Co., LtdThai Auto Conversion Co., LtdThai Auto Conversion Co., Ltd.

Registered share capitalRegistered share capitalRegistered share capitalRegistered share capitalRegistered share capital Bt.74,500,000 issued and fully paid up, divided into 74,500 ordinary shares of Bt.1,000 eachAddressAddressAddressAddressAddress 700/182 Moo 1, Tambol Ban Kao, Amphoe Phan Thong, Chonburi 20160Tel:Tel:Tel:Tel:Tel: (038) 457106-110Fax:Fax:Fax:Fax:Fax: (038) 457112Business ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness ActivitiesBusiness Activities Product development and fitting of special accessories for special purpose vehicles.

12

Nature of BusinessGeneral Business Overview of the Company, its Subsidiaries and Joint VenturesGeneral Business Overview of the Company, its Subsidiaries and Joint VenturesGeneral Business Overview of the Company, its Subsidiaries and Joint VenturesGeneral Business Overview of the Company, its Subsidiaries and Joint VenturesGeneral Business Overview of the Company, its Subsidiaries and Joint Ventures

Thai Rung Union Car Public Company Limited is in the motor vehicle industry. The Company’s subsidiaries are: Thai RungTools and Dies Co., Ltd. (formerly called Thai Rung General Motor Co., Ltd.), Thai Auto Press Parts Co., Ltd., Thai V.P. AutoService Co., Ltd., and Thai Auto Body Assembly Co., Ltd. and its joint venture companies are Delta-TR Co., Ltd. and Thai AutoConversion Co., Ltd. Their activities are as follows.

Thai Rung Union Car Plc. has three main areas of business: product design and development, particularly for modified vehiclesof various kinds; production of metal and plastic parts, for supply to auto and motorcycle manufacturers and for the Company’sown internal use, including parts exported for modified vehicles to be assembled overseas; and the third important area of activityis the contract assembly and modification of a range of vehicles including station wagons, seven-seater multi-purpose vehiclesand special purpose vehicles such as rapid response rescue vehicles, buses, vans, ambulances, refrigerated trucks and mini-buses.

Thai Rung Tools and Dies Co., Ltd. (formerly called Thai Rung General Motor Co., Ltd.), a subsidiary, makes dies and jigs. Ithas received BOI promotional privileges for investments.

Thai Auto Press Parts Company Limited, a subsidiary, started business in June 2002 at its factory at Amata City Industrial Estate,Amphoe Pluak Daeng, Rayong Province, thus considerably expanding the group’s parts production capacity. Thai Auto PressParts, which has been granted BoI promotional privileges for its investments, supplies automotive parts to the customer groupformed by auto and motorcycle manufacturers in the Eastern Seaboard and surrounding areas, and also caters to the exportmarket. In 2005 it broadened its activities to include the manufacture and sale of plastic parts.

Thai V.P. Auto Service Company Limited, another subsidiary, provides after-sales service for the Thai Rung’s multi-purposevehicles. In 2005 it expanded its activities to include plastic accessories under the name “Parto”. Thai V.P. Auto Service Co.,Ltd. has two subsidiaries.

Thai Ultimate Car Company Limited, which it acquired in 2001 in order to expand into vehicle distribution, is a dealerand provider of after-sales service for Land Rover vehicles. It also sells equipment and accessories for multi-purposevehicles, and spare parts.

TRU Leasing Company Limited, established in 2005 to carry on finance business, initially concentrating on supportingthe group’s business by providing hire purchase finance for the parent Company’s TR Bangkok Limousine.

Thai Auto Body Assembly Co., Ltd, a subsidiary, is located at Ban Beung, Chonburi Province. Its purpose is the modification ofbodies for various kinds of commercial and special purpose vehicles such as rapid response rescue vehicles, buses, vans,refrigerated trucks, trailers, and ambulances. The company is not yet active.

Delta-TR Company Limited is a joint venture with a Japanese company for the manufacture of auto seats and related components.

Thai Auto Conversion Co., Ltd. is a joint venture with the Toyota Motor Group for product development and fitting of accessoriesfor special purpose vehicles.

The Company’s group policy is for each subsidiary to strive to operate profitably in its own right and to be self-sufficient in itsparticular activities within the overall policy of the parent.

13

Unit: baht 000s

Performed % of shares 2004 2005 2006by held Revenue % Revenue % Revenue %

Contract vehicle assembly includingcost of quipment and accessories fitted TRU,TUC 99.53* 1,663,863 41.91 681,707 22.35 169,428 7.03

Sale of vehicles (includes a portionof income from assembly and cost of TRU,TVS,equipment and accessories fitted) TUC 94, 99.53* 1,092,153 27.51 840,689 27.57 559,830 23.19

Sale of parts, income fromsub-assembly of parts TRU,TAP 91 641,379 16.17 943,156 30.93 1,191,116 49.34

Sales of dies and jigs T R T 94 110,133 2.77 142,467 4.67 115,245 4.77

Sale of spare parts and accessories TRU,TVS,and other service income TUC 94, 99.53* 342,635 8.63 357,614 11.72 267,372 11.08

Share of profit from investmentsaccounted for under equity method 7,995 0.20 - - 10,909 0.45

Other Income 111,708 2.81 84,148 2.76 100,002 4.14

Total RevenuesTotal RevenuesTotal RevenuesTotal RevenuesTotal Revenues 3,969,8643,969,8643,969,8643,969,8643,969,864 100.00100.00100.00100.00100.00 3,049,781 3,049,781 3,049,781 3,049,781 3,049,781 100.00 100.00 100.00 100.00 100.00 2,413,903 2,413,903 2,413,903 2,413,903 2,413,903 100.00 100.00 100.00 100.00 100.00

* TRU holds 94% of the shares in TVS, which in turn holds 99.53% of the shares in TUC.

Industry trends and future competitive situationIndustry trends and future competitive situationIndustry trends and future competitive situationIndustry trends and future competitive situationIndustry trends and future competitive situation

Thailand’s total vehicle production for 2006 amounted to 1,188,044 units, representing a 6% increase on the previous year, with682,161 units being sold in the domestic market (a 3% drop on the previous year) and a further 538,966 being exported, representingan increase of 22% on the prior year. Of the total production figure, a record total of 866,769 or 73% were one-ton pickup trucks, anincrease of 5% on the previous year, thanks to market growth both at home and abroad.

Looking forward into 2007, prospects for the Thai automotive industry are for continued growth. The Federation of Thai Industriesexpects modest growth in the overall vehicle market, with the domestic market growing very little but exports of vehicles and partsperforming strongly, propelled by free trade agreements, and is estimating total production of 1,280,000 units for 2007, of which678,000 for the domestic market (700,000 including imports) and 606,000 for export. Oil prices are not expected to have very mucheffect on total vehicle sales, however they will affect purchasing decisions in terms of vehicle type and model. Low cost cars fromChina and India can be expected to make an appearance in our market. Players in the Thai industry will have to accelerate theadaptation of their production cost structures in order to be able to compete, and will also have to seek out new business opportunitiesand strategic partners. In any case Thailand still has an important role to play, and is ready to become an ASEAN production hub,as evidenced by the fact that several major global automakers have increased their capacity and transferred their production baseshere with a view to using Thailand as their worldwide export production hub.

The next step for the automotive industry must be to develop its ability to compete, in terms of design engineering, research anddevelopment, and reaching and maintaining global standard levels. Players in the Thai automotive industry need to improvecontinuously and rapidly, in terms of quality, costs and technology, in order to reach and maintain global standard levels and thusmeet the ever growing competition as auto assemblers and parts makers from America, Europe and Japan continue to move theirproduction bases to Thailand, and to cope with changing global terms of trade under WTO, AFTA and bilateral free tradeagreements.

Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2004-2006Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2004-2006Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2004-2006Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2004-2006Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2004-2006

Product ///// Service

14

Risk Factors1.1.1.1.1. Business Risks, by Business TypeBusiness Risks, by Business TypeBusiness Risks, by Business TypeBusiness Risks, by Business TypeBusiness Risks, by Business Type

Multi-purpose vehicles- Risks arising from the fact that the distribution channel for Isuzu pick-ups modified by the Company is limited to dealers

of Tripetch Isuzu Sales Co., Ltd. Income from this business accounted for roughly 20% of total consolidated revenues in2006.

- Brand owners who already produce multi-purpose vehicles, and new entrants attracted into the market by the high valueof the station wagon type segment.

Auto Parts- Bargaining power affected by weight of major customers Aapico Amata Co., Ltd. and Isuzu Motors (Thailand) Co., Ltd.,

who together accounted for about 20% of total consolidated income in 2006.- The growth of the automotive and parts industries for supply to both domestic and export markets, as seen from the fact

that several major auto makers have expanded their production capacity and others have moved their production basesfrom overseas to Thailand, leads to ever more competitors in the auto parts industry, both big and small, old and new.

Dies & Jigs- Increasing competition both from existing manufacturers expanding production capacity so as to be able to take on more

orders, and from new entrants from overseas coming to take a share of the work available, could have an effect on thevolume of work in the future .In 2006 income from dies and jigs accounted for approximately 5% of total consolidatedrevenues.

- Shortage of skilled die-making technicians, leading to poaching of capable personnel.

Risk ManagementRisk ManagementRisk ManagementRisk ManagementRisk ManagementIn order to spread risk and lessen the possible impact of the various risk factors, the Company has laid down policy guidelinesfor each business unit, as follows.

Multi-purpose VehiclesMulti-purpose VehiclesMulti-purpose VehiclesMulti-purpose VehiclesMulti-purpose Vehicles- The Company places emphasis on research and development of multi-purpose vehicles, focusing on up-to-date styling

and on quality to match requirements of target customer groups. At the same time studies are under way aimed atdeveloping a line of business in special purpose vehicles of various kinds such as taxis and rapid response rescuevehicles, so as to expand the market and target customer groups by taking advantage of the Company’s flexibility inadapting its production processes.

- The Company has joined hands with a new business partner to develop a new multi-purpose vehicle based on theChevrolet Colorado pickup truck, which will go on sale in early 2007, opening up an additional group of customers andadditional sales outlets for multi-purpose vehicles, as well as seeking alliances with producers of chassis and salesoutlets for other brands which do not yet produce multi-purpose vehicles or ‘PPVs’ (Pickup-Passenger Vehicles.)

- The Company has further developed its ‘TR Center’ product presentation outlets, in order to maximize customer andend-user awareness, opening three new branches in 2006, at Phetchkasem, Rattanathibet and Rama IV.

- The Company has established TRU Leasing Co., Ltd. in order to support sales of its taxi product to customers who arenot included in the SME Bank’s “Thai Taxi Development Project.”

15

Parts makingParts makingParts makingParts makingParts making- The Company continues to foster its relationships with its long-standing major customers, whilst at the same time seeking

new customers from other sectors such as motorcycles, industrial machinery, electrical appliances and agriculturalmachinery, so as to spread risk. The Company set up an all year round program of marketing activities aimed at fosteringgood customer relations, and also established new target customer groups for plastic parts and window regulators.

- The Company expanded its business into the production and sale of blowmold and vacuum-formed plastic parts,including plastic accessory parts under the name Parto.

- Expansion of customer base to overseas markets such as Vietnam, Malaysia, Indonesia, India, Egypt, Australia andU.S.A.

- The Company is constantly on the look-out for possible new alliances with foreign partners to invest together inexpanding production capacity for both metal and plastic parts so as to cater to the growing volume of work resulting fromthe sustained growth of the automotive industry, its policy being to focus on high value-added work.

- Development of new variants of the Company’s existing ‘flat deck’ to cater to the pick-up industry at home and abroadin the future.

Dies & JigsDies & JigsDies & JigsDies & JigsDies & Jigs- The Company has carried out investments to improve the efficiency of the production process so as to meet the many and

varied customer requirements and at the same time to improve chances of winning high value orders.- The Company has a project to increase automation of the production process so as to lessen the impact of shortages of

skilled labor, and has also arranged training courses aimed at enhancing personnel capability.

Nevertheless in order to spread the risks in all three business units, the Company also strives to diversify its business, bothto reduce the risk of business concentration and to broaden the revenue base. Examples are:- Thai Ultimate Car Co., Ltd. is a dealer and after-sales service provider for the Land Rover brand of vehicles.- TRU Leasing Co., Ltd. provides financial services by way of automotive hire purchase.

1.21.21.21.21.2 Financial RisksFinancial RisksFinancial RisksFinancial RisksFinancial RisksPlease refer to details in Note 28 to the Financial Statements for the year ended 31st December 2006.

16

No. Name Number of shares

Shareholders and ManagementShareholdersMajor Shareholders as at 31st January 2007, last date on which the share register was closed, when paid up capital was Bt.501,589,497

Percentage ofshares held

1 Mrs. Pranee Phaoenchoke 245,387,500 48.92%2 Ms. Kaewjai Phaoenchoke 27,191,250 5.42%3 Mr. Sompong Phaoenchoke* 25,715,000 5.13%4 Citibank Nominees Singapore Pte Ltd. S.A., PBG Clients SG 24,691,925 4.92%5 Quam Securities Nominees (Singapore) Pte. Ltd. 24,483,000 4.88%6 Mr. Wuttichai Phaoenchoke 22,500,000 4.49%7 TISCO Bank Plc. 15,025,000 3.00%8 Coutts Bank Von Ernst Ltd., Singapore Branch 14,596,900 2.91%9 Gerlach & Co-Dimensional Emerging Markets Value Fund Inc. Thai 5,386,250 1.07%10 Thai NVDR Co., Ltd. 4,190,100 0.84%

Total 409,166,925 81.58%

* Mr. Sompong Phaoenchoke holds 23,465,000 shares and his wife Mrs. Kaewkao Phaoenchoke holds 2,250,000 shares.Investors wishing to see information on current shareholders can do so by visiting the Company’s website before the AnnualInvestors wishing to see information on current shareholders can do so by visiting the Company’s website before the AnnualInvestors wishing to see information on current shareholders can do so by visiting the Company’s website before the AnnualInvestors wishing to see information on current shareholders can do so by visiting the Company’s website before the AnnualInvestors wishing to see information on current shareholders can do so by visiting the Company’s website before the AnnualGeneral Shareholders’ Meeting.General Shareholders’ Meeting.General Shareholders’ Meeting.General Shareholders’ Meeting.General Shareholders’ Meeting.

ManagementManagement StructureManagement StructureManagement StructureManagement StructureManagement StructureThe Company has the following five boards and committees: Board of Directors, Audit Committee, Executive Board, RiskManagement Committee and Remuneration Committee, details as follows:

11111 Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of DirectorsBoard of DirectorsAs at 31st December 2006 ten of the eleven positions on the Board of Directors were occupied as follows. A suitable candidatewas being sought for the vacant position.

Name Position

1. Mrs. Pranee Phaoenchoke President of the Board2. Mr. Sompong Phaoenchoke Director3. Ms. Kaewjai Phaoenchoke Director4. Mr. Wuttichai Phaoenchoke Director5. Mr. Somkiat Nimrawee Director6. Mr. Anthony Farquhar McDonald Director7. Mr. Pong Sarasin Independent Director8. Mr. Pricha Attavipach Independent Director9. Mr. Kavee Vasuvat Independent Director

10. Mr. Suwate Theerawachirakul Independent DirectorSecretary to the Board of Directors: Mr. Sakchai Komgris*

Note * Mr. Sakchai Komgris was appointed Secretary to the Board of Directors and to the Executive Board effective13th November 2006.

17

Characteristics and definition of independent director of Thai Rung Union Car PlcCharacteristics and definition of independent director of Thai Rung Union Car PlcCharacteristics and definition of independent director of Thai Rung Union Car PlcCharacteristics and definition of independent director of Thai Rung Union Car PlcCharacteristics and definition of independent director of Thai Rung Union Car PlcTwo of the four independent directors hold industrial qualifications and the other two are qualified in administration. An independentdirector of the Company is an outside individual, not contracted or otherwise employed by the Company, independent of any majorshareholder in the Company, and not himself holding more than 5% of the total number of shares with voting rights, nor holding sharesin any group company, and not having any business dealings with the Company, whether direct or indirect, nor having anyrelationship with any individual who provides professional services to the Company or to any group company, and as such is qualifiedto represent the interests of minority shareholders.

The above definition of Independent Director complies with the relevant SEC regulations.

A quorum for a meeting of the Board of Directors of the Company is constituted by not less than half the total number of Directors,resolutions are taken by simple majority vote of those present, each Director having one vote.

At each Annual General Meeting of the Company at least one third of the Directors, or if the number of Directors is not divisible bythree then the nearest number to one third, must retire, the longest serving Directors retiring first.

Powers and Duties of the Board of DirectorsPowers and Duties of the Board of DirectorsPowers and Duties of the Board of DirectorsPowers and Duties of the Board of DirectorsPowers and Duties of the Board of Directors1. To carry out its duties in accordance with the Company’s’ laws, objectives and regulations, including resolutions of

shareholders’ meetings, in accordance with the law, with integrity, ethically, prudently and with due regard to the Company’s bestinterests.

2. To arrange for a shareholders’ meeting to be held at least once a year, to report to shareholders on the Company’sperformance and to seek shareholders’ approval for matters which exceed the authority or duties of the board of directors.

3. To hold a meeting of the Board of Directors at least once every three months.4. To take all necessary steps to ensure that financial and other information provided to shareholders is at all times correct,

complete and transparent.5. To ensure that the Company has efficient internal control and audit systems in place.6. To consider and make decisions on important matters such as policies, business plans, administrative powers, large investment

projects, related party transactions, acquisitions or disposals of assets of the listed company as covered by the regulations ofthe Stock Exchange of Thailand, and any other matters stipulated by law.

7. To ensure that the Company’s business dealings are carried out in an ethical manner.8. The Board of Directors may delegate its powers and duties to one of more Directors or to other individual(s) as it sees fit,

authorizing such person or persons to act on its behalf with whatever powers and duties it may chose to assign.9. The Board of Directors has the power to appoint and to change authorized signatories empowered legally to bind the

Company on its behalf.10. To consider the payment of interim dividends to shareholders.11. To establish the Company’s policies and working guidelines and to monitor administrative departments’ efficient and

effective implementation of such policies with a view to maximizing growth and economic value for shareholders.12. To give advice to the Managing Director on administration and on decisions likely to have important consequences for the

Company.13. To avoid conflicts of interest amongst Company stakeholders.

The scope of the powers and duties mentioned shall not extend to:1. Matters subject by law to a resolution of a shareholders’ meeting, such as capital decrease or increase or amendments to the

Company’s Memorandum or Articles of Association.2. The authorization of any related party transaction or acquisition or disposal of listed Company’s assets, which require

approval by a meeting of shareholders in accordance with the regulations of the Stock Exchange of Thailand.3. The authorization of any transaction in which a Director is an interested party or has a conflict of interest, which requires

approval by a meeting of shareholders.

18

2.2.2.2.2. Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAs at 31st December 2006 the Company’s Audit Committee was composed of three members:

Name Position

1. Mr. Pricha Attavipach Chairman of the Audit Committee2. Mr. Kavee Vasuvat Member of the Audit Committee3. Mr. Suwate Theerawachirakul Member of the Audit Committee

Secretary to the Audit Committee: Mr. Phakkawat Suwanmajo

Members of the Audit Committee serve for a term of two years. A quorum for a meeting of the Audit Committee is constituted bynot less than half the total number of Committee Members. Resolutions are carried by the affirmative votes of not less than halfthe total number of Members present.

Powers and duties of the Audit CommitteePowers and duties of the Audit CommitteePowers and duties of the Audit CommitteePowers and duties of the Audit CommitteePowers and duties of the Audit Committee1. To review the Company’s financial statements and ensure that they are correct and complete and present a true picture

of the Company’s financial position.2. To review the Company’s internal control procedures and ensure that they are appropriate and efficient.3. To select, review and recommend appointment of Company’s external auditors and establishment of their remuneration.4. To monitor the Company’s compliance with all relevant laws and regulations.5. To consider and review any transactions likely to give rise to a conflict of interest.6. To deliver a report on the Audit Committee’s activities for publication in the Company’s Annual Report, such report to

be signed by the Chairman of the Audit Committee.7. To carry out such other duties as may from time to time be assigned the Company’s Board of Directors.

3.3.3.3.3. Executive BoardExecutive BoardExecutive BoardExecutive BoardExecutive BoardAs at 31st December 2006 the Company’s Executive Board consisted of five Directors, as follows:

Name Position

1. Mrs. Pranee Phaoenchoke Chairman of the Board2. Mr. Sompong Phaoenchoke Managing Director3. Ms. Kaewjai Phaoenchoke Director4. Mr. Wuttichai Phaoenchoke Director5. Mr. Somkiat Nimrawee Director

Secretary to the Executive Board: Mr. Sakchai Komgris

Directors on the Executive Board serve terms of three years. A quorum for a meeting of the Executive Board is constituted bynot less than half the total number of Directors. Resolutions are carried by the affirmative votes of not less than half the totalnumber of Directors present.

Powers and Duties of the Executive BoardPowers and Duties of the Executive BoardPowers and Duties of the Executive BoardPowers and Duties of the Executive BoardPowers and Duties of the Executive Board1. To control and take care of the general conduct of the Company’s business and perform duties assigned to it by the

Company’s Board of Directors in order to achieve the Company’s objectives.2. To direct and monitor the successful implementation of policies and working plans assigned by the Company’s Board of

Directors to the various administrative departments.3. To examine, consider and authorize important and urgent business within the scope of its powers and duties and

monetary limitation determined by the Company’s Board of Directors but in any case not exceeding Bt.400m.4. To establish financial policies and supervise and monitor the administration of all financial work, including all business

conducted with financial institutions, with a view to optimizing efficiency.

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5. To consider and authorize transactions within the Company’s scope of business.6. To perform such other duties as may be assigned by the Company’s Board of Directors.

The scope of the powers and duties mentioned shall not extendnot extendnot extendnot extendnot extend to the authorization of any transaction in which theexecutive board or an individual is an interested party or involving a conflict of interest on the part of the executive boardor an individual, nor any related party transaction nor the acquisition or disposal of listed Company’s assets, inaccordance with the regulations of the Stock Exchange of Thailand.

4.4.4.4.4. Risk Management CommitteeRisk Management CommitteeRisk Management CommitteeRisk Management CommitteeRisk Management CommitteeAs at 31st December 2006 the Company’s Risk Management Committee was composed of six members, as follows:

Name Position

1. Mr. Sompong Phaoenchoke Chairman of the Risk Management Committee2. Mr. Somkiat Nimrawee Member of the Risk Management Committee3. Mr. Wuttichai Phaoenchoke Member of the Risk Management Committee4. Mrs. Kaewkao Phaoenchoke Member of the Risk Management Committee5. Mr. Suwate Theerawachirakul Member of the Risk Management Committee

Mr. Noppadol Suplaset** Member of and Secretary to the Risk Management Committee

Note: ** Mr. Noppadol Suplaset was appointed Member of and Secretary to the Risk Management Committee effective13th November 2006.

Members of the Risk Management Committee serve terms of two years. A quorum for a meeting of the Risk ManagementCommittee is constituted by not less than half the total number of Members. Resolutions are carried by the affirmative votes of notless than half the total number of Members present.

The scope of duties and responsibilities of the Risk Management Committee is as follows:The scope of duties and responsibilities of the Risk Management Committee is as follows:The scope of duties and responsibilities of the Risk Management Committee is as follows:The scope of duties and responsibilities of the Risk Management Committee is as follows:The scope of duties and responsibilities of the Risk Management Committee is as follows:1. To establish a policy and framework for managing the Company’s overall risk situation, covering the various risks that

might affect the Company’s results and reputation.2. To establish strategies which are in accordance with the Company’s overall risk management policy and which enable

risks to be gauged, monitored, taken care of and kept at appropriate levels, including the setting up of advance warningsystems.

3. To review the adequacy and effectiveness of risk management policies and systems and monitor adherence to thosepolicies on an ongoing basis so as to enhance the prudence, security and efficiency of the Company’s overall riskmanagement.

4. The Risk Management Committee has the power to establish and define the roles of sub-committees and workingcommittees for managing the various kinds of risk as it sees fit, and all such committees shall report directly to the RiskManagement Committee.

5. The Committee is empowered to call for documents and information and to require individuals to provide facts forconsideration so as to be able to achieve its objectives.

6. To communicate with the Audit Committee in order to ensure that risk management systems are in line with internalcontrols and in accordance with policies and strategies that have been established.

7. To report to the Board on risks and risk management.

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5.5.5.5.5. Remuneration CommitteeRemuneration CommitteeRemuneration CommitteeRemuneration CommitteeRemuneration CommitteeAs at 31st December 2006 the Company’s Remuneration Committee was composed of three members, as follows:

Name Position1. Mr. Pricha Attavipach Chairman of the Remuneration Committee2. Mr. Kavee Vasuvat Member of the Remuneration Committee3. Mr. Somkiat Nimrawee Member of the Remuneration Committee

Secretary to the Remuneration Committee: Mr. Viruch Kulsri

Members of the Remuneration Management Committee serve terms of two years. A quorum for a meeting of the RemunerationManagement Committee is constituted by not less than half the total number of Members. Resolutions are carried by theaffirmative votes of not less than half the total number of Members present.

The scope of duties and responsibilities of the Remuneration Committee is as follows:The scope of duties and responsibilities of the Remuneration Committee is as follows:The scope of duties and responsibilities of the Remuneration Committee is as follows:The scope of duties and responsibilities of the Remuneration Committee is as follows:The scope of duties and responsibilities of the Remuneration Committee is as follows:1. To set policies, methodology and criteria for establishing Directors’ remuneration fairly and in consonance with the

Company’s results and with each individual’s performance.2. To consider, review and present proposals for establishing Directors’ remuneration.3. To present reports and proposals of the Remuneration Committee to meetings of the Company’s Board of Directors for their

consideration.

Directors’ signing powersDirectors’ signing powersDirectors’ signing powersDirectors’ signing powersDirectors’ signing powersDirectors’ signatory powers to bind the Company must be granted by a general meeting of shareholders and recorded in theCompany’s registry. At present such powers are as follows:

Any one of the following Directors, acting alone, may bind the Company with his or her signature and the Company seal:1. Mrs. Pranee Phaoenchoke2. Mr. Sompong Phaoenchoke3. Ms. Kaewjai Phaoenchoke

The following two Directors, acting together, may jointly bind the Company with their signatures and the Company seal:4. Mr. Wuttichai Phaoenchoke5. Mr. Somkiat Nimrawee

Company AdministratorsCompany AdministratorsCompany AdministratorsCompany AdministratorsCompany AdministratorsAs at 31st December 2006 Company Administrators were as follows:

Name Position1. Mrs. Pranee Phaoenchoke Chairman of the Executive Board2. Mr. Sompong Phaoenchoke Managing Director3. Mr. Prakarn Cheunchokesan Deputy Managing Director4. Mr. Viruch Kulsri Senior Assistant Managing Director5. Mr. Noppadol Suplaset Assistant Managing Director

Managing Director’s Powers and DutiesManaging Director’s Powers and DutiesManaging Director’s Powers and DutiesManaging Director’s Powers and DutiesManaging Director’s Powers and Duties1. To control and oversee the pursuance of the Company’s business in general and to perform duties assigned by the

Company’s Board of Directors or Executive Board, ensuring that objectives are met.2. To follow up and monitor the implementation of policies and working plans, ensuring that the administrative departments

concerned duly perform the various tasks assigned them by the Company’s Board of Directors or Executive Board, withthe desired results.

3. To consider and, if appropriate, approve important and urgent transactions within the scope of his powers and duties andsuch monetary limits as the Company’s Board of Directors may establish, up to a maximum of Bt.200 million.

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4. To control and oversee financial administration, including dealings with financial institutions, ensuring that it is inaccordance with financial policies, as efficient as possible in accordance with assignments from the Company’s Boardof Directors or Executive Board.

5. To consider and, if appropriate, approve business transactions within the Company’s authorized areas of business.6. To perform such other duties as may be assigned by the Company’s Board of Directors or Executive Board.

The scope of the powers and duties mentioned shall not extendnot extendnot extendnot extendnot extend to the authorization of any transaction in which the ManagingDirector or an individual with a possible conflict of interest is an interested party or where there is a conflict of interest regardingthe benefits of a related party transaction, or the acquisition or disposal of the listed Company’s assets, in accordance with theregulations of the Stock Exchange of Thailand.

Nomination of Directors and AdministratorsNomination of Directors and AdministratorsNomination of Directors and AdministratorsNomination of Directors and AdministratorsNomination of Directors and AdministratorsThe Company does not have a nominating committee, but the process for selecting individuals to be appointed as Directorsincludes consideration of a number of characteristics including skills, experience and capability, especially in areas that are ofthe greatest benefit to the Company, and integrity. In fairness to shareholders, each individual should be able to dedicate thenecessary time to attending board meetings on a regular basis, and thus no individual should hold directorships of several listedcompanies at same time. Finally the individual must not possess any of the qualities or characteristics prohibited by the ListedCompanies Act.

The Board of Directors undertakes an initial assessment of possible candidates for the position of Company Director, and thenselects the most suitable candidate(s) to place before a meeting of shareholders for their consideration. Approval is by simplemajority of votes of those shareholders present or duly represented at the meeting and in possession of voting rights, as follows:

1. Each share confers the right to one vote.2. Each shareholder who votes must use all his votes as per (1) above for a single individual or for a number of individuals

together, but may not allocate votes individually.3. The individuals receiving the highest number of votes will be selected in descending order for appointment as Directors

of the Company depending on the number of Directors to be appointed on each occasion. In the event that two candidatesreceive the same number of votes and that appointing them both would lead to exceeding the required number ofDirectors, the Chairman of the meeting shall exercise a casting vote.

Administrators’ RemunerationAdministrators’ RemunerationAdministrators’ RemunerationAdministrators’ RemunerationAdministrators’ Remuneration(A)(A)(A)(A)(A) Monetary remunerationMonetary remunerationMonetary remunerationMonetary remunerationMonetary remuneration

Directors and Audit CommitteeDirectors and Audit CommitteeDirectors and Audit CommitteeDirectors and Audit CommitteeDirectors and Audit CommitteeTotal remuneration received by all ten Directors from the Company in their capacity as Directors by way ofDirectors’ stipends and meeting fees in 2006 was Bt.3,050,000.- Details are as follows:

No. Director’s Name Remuneration paid in 2006 (Baht)1. Mrs. Pranee Phaoenchoke 330,0002. Mr. Sompong Phaoenchoke 310,0003. Ms. Kaewjai Phaoenchoke 260,0004. Mr. Wuttichai Phaoenchoke 240,0005. Mr. Pricha Attavipach 850,0006. Mr. Somkiat Nimrawee 250,0007. Mr. Anthony Farquhar McDonald 190,0008. Mr. Phong Sarasin 120,0009. Mr. Kavee Vasuvat 250,000

10. Mr. Suvait Theeravachirakul 250,000TotalTotalTotalTotalTotal 3,050,0003,050,0003,050,0003,050,0003,050,000

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Administrators (excluding Directors)Administrators (excluding Directors)Administrators (excluding Directors)Administrators (excluding Directors)Administrators (excluding Directors)

2006 Number of persons Remuneration (baht)

Salaries 4 9,827,999Bonus 4 619,615Living Allowances 2 283,884TotalTotalTotalTotalTotal 10,731,49810,731,49810,731,49810,731,49810,731,498

(B) Non-monetary remuneration(B) Non-monetary remuneration(B) Non-monetary remuneration(B) Non-monetary remuneration(B) Non-monetary remunerationDirectorsDirectorsDirectorsDirectorsDirectorsStock options conferring the right to buy ordinary shares of the Company under the ESOP 2003 program whichruns for five years, the total number of stock options being 24,999,000 and the exercise price Bt.5.00* per unit.The numbers of units allocated to each Director are as follows.

Number of stock As % ofoptions allocated total project

1. Mrs. Pranee Phaoenchoke President 7,900,000 31.62. Mr. Sompong Phaoenchoke Managing Director 5,300,000 21.23. Ms. Kaewjai Phaoenchoke Director 4,700,000 18.84. Mr. Wuttichai Phaoenchoke Director 4,300,000 17.25. Mr. Pricha Attavipach Director 300,000 1.26. Mr. Anthony Farquhar McDonald Director 200,000 0.87. Mr. Somkiat Nimrawee Director 200,000 0.88. Mr. Kavee Vasuvat Director 150,000 0.69. Mr. Phong Sarasin Director 150,000 0.6

10. Mr. Suvait Theeravachirakul Director 150,000 0.6

Note* On 24th April 2006 a meeting of the Company’s shareholders resolved to authorize a change in the exercise price of thecommon stock options from Bt.8.00 per unit to Bt.5.00 per unit with effect from June 2006.

AdministratorsAdministratorsAdministratorsAdministratorsAdministrators Company car

No. Name Position

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Control of internal informationThe Company is acutely aware of the importance of safeguarding the confidentiality of internal information and therefore has strictpolicies guarding against the use by Directors and employees of internal information for their personal benefit. Important internalinformation is revealed only to individuals directly concerned, such as auditors or legal counsel. The Company releases informationto shareholders only as and when appropriate.

The Board of Directors has resolved that Directors and Administrators of the Company and the Manager of Accounting & FinanceDepartment, together with their spouses, parents, children and siblings, must refrain from buying or selling securities from at least fiveworking days before the Company discloses its financial statements to the stock exchange. The Company has also informed them oftheir obligation to report their shareholdings in the Company and those of their spouses and of any children who are still minors,including the reporting of any changes in their shareholdings to the SEC and the SET in accordance with article 59, subject topenalties for non-compliance as per article 275 of the Securities and Stock Exchange Act 1992, and has assigned the Share Registerand Investor Relations Department to inform them in advance of the periods during which they should refrain form trading insecurities each quarter. The Company has set out the basic principles of control of internal information in the form of an article in theCompany’s code of business ethics, to ensure that all employees adhere to them.

The Board of Directors has resolved that Directors and Administrators who are obliged by law to report their shareholdings mustsubmit these reports to the Company’s Board of Directors each time. The Board of Directors has further determined that shareholdingsof Directors and Administrators be reported every quarter to the Board.

Dividend Policy of Company and SubsidiariesDividend Policy of Company and SubsidiariesDividend Policy of Company and SubsidiariesDividend Policy of Company and SubsidiariesDividend Policy of Company and Subsidiaries(a)(a)(a)(a)(a) Payment of dividends by the Company to ShareholdersPayment of dividends by the Company to ShareholdersPayment of dividends by the Company to ShareholdersPayment of dividends by the Company to ShareholdersPayment of dividends by the Company to Shareholders

The Company’s policy is to pay a dividend each year of approximately 40% of net earnings of the previous year.

(b)(b)(b)(b)(b) Payment of dividends by Subsidiaries to the CompanyPayment of dividends by Subsidiaries to the CompanyPayment of dividends by Subsidiaries to the CompanyPayment of dividends by Subsidiaries to the CompanyPayment of dividends by Subsidiaries to the CompanySubsidiary companies Thai Rung Tools and Dies Co., Ltd. (formerly called Thai Rung General Motor Co., Ltd.), ThaiV.P. Auto Service Co., Ltd., Thai Auto Press Parts Co., Ltd., Thai Auto Body Assembly Co., Ltd. and Thai Ultimate CarCo., Ltd. and TRU Leasing Co., Ltd. consider their policy year by year in light of their investment requirements and othercircumstances as appropriate.

Auditors’ RemunerationAuditors’ RemunerationAuditors’ RemunerationAuditors’ RemunerationAuditors’ Remuneration

(a)(a)(a)(a)(a) Audit feesAudit feesAudit feesAudit feesAudit feesDuring the year the Company and its subsidiaries paid a total of Bt.1,820,000 to the Company’s Auditors, Ernst & YoungOffice Ltd. as per the following details.

BahtThai Rung Union Car Plc 600,000Thai V.P. Auto Service Co., Ltd. 250,000Thai Rung Tools and Dies Co., Ltd. 220,000Thai Auto Press Parts Co., Ltd 240,000Thai Ultimate Car Co., Ltd. 420,000Thai Auto Body Assembly Co., Ltd. 30,000TRU Leasing Co., Ltd. 60,000

TotalTotalTotalTotalTotal 1,820,0001,820,0001,820,0001,820,0001,820,000

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(b)(b)(b)(b)(b) Non-audit feesNon-audit feesNon-audit feesNon-audit feesNon-audit fees- In the course of the year 2006 the Company and its subsidiaries paid Ernst & Young Office Ltd. a total of Bt.103,464 by

way of other representation and service charges such as hotel and travel expenses, postal charges, photocopyingexpenses and certification costs.

- In the course of the year 2006 Thai Rung Union Car Plc paid Bt.50,000 to Ernst & Young Office Ltd. by way of fees fora special audit to verify selling expenses on industrial machinery acquired for use in the BOI-supported project of ThaiAuto Press Parts Co., Ltd.

- In the course of the year 2006 Thai Auto Press Parts Co., Ltd. paid Bt.70,000 to Ernst & Young Office Ltd. by way ofspecial service fees in accordance with BOI instructions.

Corporate GovernancePrinciples of corporate governance are guidelines for doing business and administering organizations, which are becoming more andmore widely known and accepted. In accordance with these principles the Board of Directors has a very important role to play inrunning the organization, by focusing on responsibilities towards all parties with which it has dealings, both inside and outside theorganization, and by emphasizing the importance of ethical dealings, transparency, efficiency, adequate disclosure of informationthat can be examined, the protection of shareholders’ rights and attention to their remuneration, and responsibilities towards societyand the nation. The Company is very well aware of the importance of these guidelines and adheres to them strictly, so as to inspireconfidence in shareholders and everyone with whom it has dealings and to form a solid base for the growth of the business.

The Company is committed to applying the principles of corporate governance on an ongoing basis to the running of theCompany’s business. Thanks to this commitment the Company was assessed as ‘good’ by the Thai Institute of Directors’‘Corporate Governance Report of Thai Listed Companies 2006’ and was also assessed as ‘good’ in the joint SEC-BOI‘AGM check-list’. The Company’s policy is to continue improving the standard of corporate governance.

1. Shareholders’ Rights1. Shareholders’ Rights1. Shareholders’ Rights1. Shareholders’ Rights1. Shareholders’ RightsThe policy laid down by the Company’s Board of Directors is to look after shareholders’ basic rights. The Board considers theequitable safeguarding of the interests of all groups of shareholders to be an important duty and responsibility, in order to ensurethat shareholders are treated fairly and that they have confidence in how business is conducted by the Company and its Directors.1. The Company’s Board of Directors has established a corporate governance policy in writing, which must be strictly adhered

to, as per Company Announcement No. 37/2004 as follows.(1) Rights and equitable treatment of Shareholders and other Stakeholders

The Company deals fairly and impartially with shareholders and other stakeholders such as employees andcontractors, trading partners, the public, competitors, and creditors.The Company endeavors to arrange shareholders’ meetings at the most convenient times possible for shareholdersand to give shareholders equal opportunities to voice their opinions and ask questions.

(2) Board of Directors - structure, role, duties and responsibilities, independenceThe Board of Directors should play a leading role, have vision, and be independent in its decision making, for theoverall maximum benefit of the Company and its shareholders.The Board of Directors, management and shareholders should consider prudently how best to solve problems arisingthrough any conflict of interest, with sincerity and integrity, rationally and independently within the framework of bestethical practice.At least one third of the total number of Directors, but in any case not less than three, shall be Independent Directors.The Board of Directors and the management team have agreed a system for the clear sharing of function, duties andresponsibilities, and the Board has established a number of committees to help it study and scrutinize work in light ofpolicies and to provide clear monitoring and follow-up. Committees currently include the Executive Board, the Audit

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Committee, the Risk Management Committee and the Remuneration Committee. The Board may consider setting upfurther committees as and when appropriate.Directors are expected to attend all Board meetings. Each year the Company fixes such meeting in advance, at leastone every three months, with additional, special meetings being called as and when necessary. The Companydiscloses the number of meetings attended by each Director in its Annual Report.

(3) Disclosure and TransparencyThe Board shall perform its duties with transparency, such that its actions can be examined, and shall disclose ofcorrect and complete information, in a timely manner, to all interested parties. The Company has appointed thepersons to be responsible for communicating with shareholders, institutional investors, stock analysts, and relevantgovernment departments.The Company has established a Remuneration Committee whose duty is to establish Directors’ remuneration fairlyand reasonably. The establishment of Directors’ remuneration is subject to approval by a general meeting ofshareholders, and is published in the Company’s Annual Report.

(4) Control and Management of RiskThe Company attaches importance to the implementation of internal controls and audits, and has accordinglyestablished an internal audit department to ensure that basic working practices and important financial transactionsare conducted in accordance with established guidelines and in an efficient manner, reporting direct to the AuditCommittee.

(5) Business EthicsThe Company has issued to all Directors, administrators, managers and employees a written code of ethics to whichthey must adhere in performing their duties.

2. The Company’s Board of Directors has determined that an Annual General Meeting of Shareholders be held each yearwithin four months of the close of business of the previous accounting year, and that the Company inform time, place andagenda of the meeting and provide relevant information and give Directors’ opinion as regards each agenda item in the letterof invitation to the shareholders’ meeting, which shall be in both Thai and English, and attach a form of proxy together withexplanations as to registration for the meeting and granting of proxy are sent to shareholders at least fourteen days in advanceand posted on the Company’s website beforehand, so as to give shareholders sufficient opportunity to study the informationin advance of the meeting.

3. The Company’s Board of Directors treats all its shareholders impartially, endeavors to arrange shareholders’ meetings atconvenient and appropriate venues and opens for registration well before the meeting starts, while shareholders who areunable to attend in person can appoint another person as proxy and can also choose to appoint one of the Company’sindependent directors to act as proxy.

Before the meeting starts, all rules and procedures governing the meeting are announced and clearly explained, including themethod used to count shareholders’ votes on each agenda item. The Company hands out voting registration cards for eachagenda item, while for any proposed appointment of Directors there is a card for each individual candidate, allowingshareholders to vote on each individual separately if they so wish.

Throughout the meeting shareholders are welcome to express their opinions and to ask questions, all of which are answered.Complete and accurate minutes are taken of each meeting and are made available for shareholders’ inspection.

The Company’s Board of Directors has not so far made arrangements allowing shareholders to submit questions in advanceof the meeting, but will consider doing so in due course.

4. The Company’s Board of Directors attaches great importance to shareholders’ meetings, and all Directors endeavor toattend every such meeting, particularly the President of the Board of Directors and the Chairmen of the various committees,so as to facilitate questions and answers on matters relating to each one.

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2.2.2.2.2. Equitable Treatment of ShareholdersEquitable Treatment of ShareholdersEquitable Treatment of ShareholdersEquitable Treatment of ShareholdersEquitable Treatment of ShareholdersThe policy of the Company’s Board of Directors is to treat all shareholders equally and fairly so as to safeguard their basic rights.

1. The Company’s Board of Directors accommodates shareholders who are unable to attend meetings in person, enablingthem to vote by proxy. The Company also makes available the name of at least one independent Director whomshareholders have the option of appointing as their proxy, and provides as part of the letter of invitation to the meeting,information on each one, comprising name, age, address, positions held, academic record, work experience, shareholdingin the Company and whether the Director is an interested party with regard to any particular agenda items. The Companymakes available a form of proxy which enables shareholders to give instructions on how votes are to be cast on eachitem; however shareholders are free to use any form that complies with the criteria published by the Department ofBusiness Development of the Ministry of Commerce.

2. The Company’s Board of Directors arranges for voting registration cards to be handed out for each agenda item, whilefor any proposed appointment of Directors there is a card for each individual candidate, allowing shareholders to vote oneach individual separately if they so wish, and facilitating transparency and ease of examination in the event of anysubsequent dispute. Information on individuals to be proposed for appointment as Directors is disclosed in the letter ofinvitation to the shareholders’ meeting, the information comprising name, photograph, age, academic record andDirectors’ training courses, work experience and shareholding in the Company, for shareholders to study before reachinga decision.

3. In meetings of the Board of Directors or of shareholders, any Director, Administrator or shareholder who is an interestedparty in any agenda item must disclose to the meeting information on his or her own interest and those of related parties,and will not be entitled to vote on that particular agenda item, so that the meeting can consider transactions that mightinvolve conflicts of interest and reach decisions in the overall best interests of the Company.

4. A shareholder who is also an Administrator may not raise any additional agenda item at a meeting of shareholders unlesssuch item has been communicated in advance, even if the item is not so important as to require shareholders to spend timestudying it before reaching a decision.

5. The Company’s Board of Directors attaches great importance to the safekeeping and protection of confidential internalinformation and has therefore established written guidelines for guarding against the use of internal information forpersonal benefit. For details please refer to Control of Internal Information.

6. The Board of Directors has resolved that Directors and Administrators who are obliged by law to report their shareholdingsmust submit these reports to the Company’s Board of Directors each time. The Board of Directors has further determinedthat shareholdings of Directors and Administrators be reported every quarter to the Board.

7. The Company has so far not put in place arrangements to facilitate minority shareholders’ proposing additional agendaitems or putting forward candidates’ names for appointment as Directors in advance of shareholders’ meetings, but theBoard of Directors will take these matters under consideration in due course.

3.3.3.3.3. StakeholdersStakeholdersStakeholdersStakeholdersStakeholdersThe Company’s Board of Directors has produced and issued to all Directors, Administrators and employees a written Code ofEthics or Statement of Business Conduct to which they must adhere in performing their duties in accordance with the Company’smission, with sincerity, honesty and impartiality in all dealings with the Company and with all groups of stakeholders includingshareholders, customers, trading partners and creditors, competitors, employees, the environment, the community and society.The Company communicates regularly with employees and monitors compliance.

ShareholdersShareholdersShareholdersShareholdersShareholdersThe Company attaches great importance to its shareholders and other stakeholders, and carries on its business withsincerity, integrity and fairness, treating all parties concerned equitably, for the greater benefit of all concerned.EmployeesEmployeesEmployeesEmployeesEmployeesThe Company is confident that its employees constitute the organization’s most valuable resource, and is therefore

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determined to recruit and look after good people with know-how, capability and integrity, and also focuses on developingindividuals’ potential to help employees advance, while providing them with appropriate and fair remuneration and variouswelfare benefits aimed at promoting a cooperative work atmosphere in which initiative and creativity can thrive to the benefitof the organization.CustomersCustomersCustomersCustomersCustomersThe Company is devoted to and responsible to its customers, supplying them with quality standard goods, and respectingtheir confidentiality.Trading PartnersTrading PartnersTrading PartnersTrading PartnersTrading PartnersThe Company can demonstrate that its procurement practices are in accordance with commercial conditions and that itsfinancial borrowings, repayments and guarantee transactions are all in accordance with terms and conditions agreed withcreditors.CompetitorsCompetitorsCompetitorsCompetitorsCompetitorsThe Company operates within a framework of fair competition, adhering to best practice principles and avoiding anyunethical practices aimed at harming competitors.Community and SocietyCommunity and SocietyCommunity and SocietyCommunity and SocietyCommunity and SocietyThe Company cares about the environment, and takes steps to reduce and avoid creating pollution in its productionprocesses that could affect the environment or the community, promotes community relations activities, helps societyconsistently to the best of its ability, and is always ready to listen to warnings or suggestions from the community so as to bemore environmentally friendly, to improve the state of the environment and make it more livable.

The Company has arranged channels through which suggestions from all groups of stakeholders can be heard, for example theemployee suggestion box scheme, and customer recommendations which are used for product and service improvement anddevelopment, thus strengthening the Company and its competitive capability and building a base for long-term success.

4.4.4.4.4. Disclosure and TransparencyDisclosure and TransparencyDisclosure and TransparencyDisclosure and TransparencyDisclosure and TransparencyThe Company’s policy as established by the Board of Directors is one of transparency and of complete and timely disclosure toall interested parties of correct, readily accessible, consistent, reliable and checkable information, whether financial ornon-financial.1. The Company has set up a ‘Share Register and Investor Relations Department’ within the Office of the Managing Director,

whose duty it is to disclose correct, complete, transparent information, whether financial or of a general nature, as well asbeing responsible for communicating with outside parties such as shareholders, institutional and other investors, analysts andrelevant government departments in affair and equitable manner. Investors can request further information about theCompany by contacting:

Share Register & Investor Relations Department,Office of the Managing DirectorTel: 0-2420-0076 ext. 321 or 359,Fax: 0-2812-0844e-mail: naiyana@thairung.co.th or omd_ir@thairung.co.thor by visiting the Company’s website: http://www.thairung.co.th

2. The Company has disclosed information in accordance with the criteria established using the Stock Exchange of Thailand’sSET Community Portal (SCP) system by way of Form 56-1 for the disclosure of annual information, as well as submitting itsAnnual Report and disclosing important information in both Thai and English on the Company’s website.

3. The Board of Directors has prepared a report on the Board’s responsibility for financial statements, which is shown togetherwith the Auditor’s Report in Form 56-1 for annual information and in the Company’s Annual Report.

4. The Board of Directors has disclosed the roles and duties of the Board and of the various Committees in Form 56-1 for annualinformation and in the Company’s Annual Report. (For details please refer to Management Structure.) Details concern-ing the number of times each board and committee met during 2006 and individual attendance records are as follows.

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5.5.5.5.5. Responsibilities of the Board of DirectorsResponsibilities of the Board of DirectorsResponsibilities of the Board of DirectorsResponsibilities of the Board of DirectorsResponsibilities of the Board of DirectorsThe Company’s Board of Directors is well aware of the important role it plays in controlling and monitoring business for thegreatest possible good of the Company, and of its answerability to shareholders for the consequences of its actions in carrying outits duties. It operates independently from management. Details are as follows.

1.1.1.1.1. Board StructureBoard StructureBoard StructureBoard StructureBoard Structure1.1 The Board of Directors of the Company consists of ten persons, at least one third of whom must be independent directors.

At present the Company has four independent non-executive directors. The characteristics of independent directors areas defined by the Company. (For details please see Management Structure.)

1.2 The President is not the same person as the Managing Director, and the Board of Directors of the Company has clearlydefined the Managing Director’s powers and duties so that no single person has unlimited power. (For details please seeManagement Structure.) This arrangement makes for better checks and balances and control.

1.3 The Board of Directors of the Company has not so far established on how many company boards each director can sit,nor has it established clear policies or guidelines on the question of seats on boards of other companies being occupiedby the Managing Director and senior Administrators of the Company, nor has it so far appointed a Company Secretary.All these matters are important and complex and require patient study before proceeding. In any case the Company’sBoard of Directors will consider these matters in due course.

2.2.2.2.2. Other Boards and CommitteesOther Boards and CommitteesOther Boards and CommitteesOther Boards and CommitteesOther Boards and Committees2.1 The Board of Directors has established four other boards and committees: the Audit Committee, the Executive Board, the

Risk Management Committee and the Remuneration Committee in order to help study details and scrutinize work asnecessary according to the situation, to lighten the workload of the Board of Directors, to provide clear arrangements forthe consideration of each particular type of subject, and to accord with good corporate governance practices. (For namesof members, powers and duties and other information on each board and committee please refer to ManagementStructure.) The Company does not have a nomination committee but it does have a process for the selection of directorsand administrators in accordance with established methods and criteria.(For details please see Nomination of Directorsand Administrators.)

Meetings attended / Meetings heldCompany Executive Audit Remuneration Risk

Name Board of Board Committee Committee ManagementDirectors Committee

1. Mrs. Pranee Phaoenchoke 6/6 4/4 - - -2. Mr. Sompong Phaoenchoke 6/6 4/4 - - 1/13. Ms. Kaewjai Phaoenchoke 5/6 4/4 - - -4. Mr. Wuttichai Phaoenchoke 4/6 4/4 - - 1/15. Mr. Somkiat Nimrawee 6/6 0/4 - 2/2 1/16. Mr. Pricha Attavipach 6/6 - 5/5 2/2 -7. Mr. Anthony Farquhar McDonald 3/6 - - - -8. Mr. Pong Sarasin 0/6 - - - -9. Mr. Kavee Vasuvat 6/6 - 5/5 2/2 -

10. Mr. Suwate Theerawachirakul 6/6 - 4/5 - 1/111. Mrs. Kaewkao Phaoenchoke - - - - 1/112. Mr. Noppadol Suplaset ** - - - - 0/0

Note: ** Mr. Noppadol Suplaset was appointed Member of and Secretary to the Risk Management Committee effective13th November 2006.

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2.2 The President of the Board of Directors of the Company can not be a chairman or member of any other board orcommittee. The majority of members of other boards and committees are independent directors, including the chairmenof the Audit Committee and of the Remuneration Committee, so as to ensure transparency and independence in carryingout their duties.

3.3.3.3.3. Role, Duties and Responsibilities of the Board of DirectorsRole, Duties and Responsibilities of the Board of DirectorsRole, Duties and Responsibilities of the Board of DirectorsRole, Duties and Responsibilities of the Board of DirectorsRole, Duties and Responsibilities of the Board of Directors3.1 The Board of Directors plays a part in establishing the Company’s vision, mission and business strategies and also in

ensuring independently that administrative departments proceed in accordance with work plans efficiently and effectivelyfor the overall benefit of the Company and its shareholders. In addition the Board establishes internal control systems andan effective internal audit, and constantly monitors them though meetings of the Audit Committee.

3.2 The Board of Directors has established written corporate governance policies and a Code of Ethics or Statement ofBusiness Conduct, and it reviews policies and monitors compliance on a regular basis.

3.3 The Company’s Board of Directors has established guidelines for the careful consideration of transactions involvingpossible conflicts of interest for the Company and its shareholders, whereby anyone having an interest in any agenda itemmust disclose such interest to the meeting, and foregoes the right to take part in taking a decision on that item. TheCompany’s Board of Directors has established guidelines for the consideration of related party transactions and ofacquisitions and disposals of Company assets as follows.- In the event that, the size of the transaction having been calculated in accordance with Stock Exchange of Thailand

criteria it transpires that the transaction requires approval by the Company’s Board of Directors, then the transactionmust be submitted to the Board of Directors for their consideration. In the event that the Audit Committee disagrees,the proposal can nevertheless be placed before the Board and an appropriate record made in the minutes.

- In the event that, the size of the transaction having been calculated in accordance with Stock Exchange of Thailandcriteria, it transpires that the transaction requires approval by a meeting of shareholders, then the transaction mustfirst be submitted to the Audit Committee for consideration and, if approved, onward submission to the Board ofDirectors who in turn will, if approved, propose it to a meeting of shareholders.

3.4 The Company’s Board of Directors attaches considerable importance to risk control and management systems, and hasaccordingly established a Risk Management Committee to establish duties and policies and a framework for managingthe Company’s overall risk situation, covering the various risks that might affect the Company’s results and reputation,as well as establishing an internal audit department to ensure that basic working practices and important financialtransactions are conducted in accordance with established guidelines and in an efficient manner. In order to make surethat the internal audit department can perform properly and independently, the Board has instructed it to report direct tothe Audit Committee.

4.4.4.4.4. Board MeetingsBoard MeetingsBoard MeetingsBoard MeetingsBoard Meetings4.1 The Company’s Board of Directors establishes a schedule of Board meetings in advance for each year. Meetings take

place at least once a quarter, with additional special meetings being held as and when necessary. The Company informsall Directors in advance of the schedule of meetings referred to above so as to enable them to plan their time and makethemselves available for the meetings. Directors attach great importance to Board meetings and endeavor always toattend. Letters of invitation are sent at least seven days in advance clearly setting out the agenda. Each Director is freeto suggest topics for the agenda, and to request additional information from the Managing Director or the Secretary to theBoard of Directors.

4.2 At meetings of the Company’s Board of Directors, the President of the Board ensures that sufficient time is madeavailable for Directors to discuss important problems thoroughly together, and the Managing Director always invitessenior Administrators to attend Board meetings in order to provide additional detailed information to the extent that it isdirectly relevant to problems. One of the items on the agenda at all regular quarterly meetings of the Board is the followingup of outstanding issues. Directors can express their opinions openly and freely. A written record is made of eachmeeting and, once the minutes have been approved by the Board, they are kept available for Directors and otherconcerned parties to examine.

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5.5.5.5.5. Assessment of Board’s PerformanceAssessment of Board’s PerformanceAssessment of Board’s PerformanceAssessment of Board’s PerformanceAssessment of Board’s PerformanceThe Company’s Board of Directors has not so far set up a system for assessing the Board’s overall performance nor itsperformance in specific areas, nor for regular self assessment by the Board. The Board will give consideration to thesematters in due course.

6.6.6.6.6. RemunerationRemunerationRemunerationRemunerationRemunerationThe Company has established a Remuneration Committee, which is chaired by an independent director and is charged withsetting policies, methodology and criteria for establishing the remuneration of Directors, the President and the ManagingDirector fairly, transparently, in consonance with the Company’s results and each individual’s performance, in line withindustry norms, and sufficient to reward directors having the desired characteristics. Directors’ remuneration is subject toapproval by a meeting of shareholders of the Company and to disclosure in the Company’s Annual Report and in Form 56-1as required by the SEC. (For details please refer to Administrators’ Remuneration.)

7.7.7.7.7. Development of Directors and AdministratorsDevelopment of Directors and AdministratorsDevelopment of Directors and AdministratorsDevelopment of Directors and AdministratorsDevelopment of Directors and Administrators7.1 The Company’s Board of Directors facilitates and supports training and study for Directors and members of the Audit

Committee by way of regular attendance of various courses run by the Institute of Directors.7.2 As for recommending types of business and guidelines for doing business to new Directors, and establishing

development and transition plans for the jobs of the Managing Director and senior Administrators, so far no action hasbeen taken; however the Board of Directors will consider these matters in due course.

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Nature of main Value / Bahttransactions millions

Thai Rung Union Car Plc Isuzu Caicharoenkij Payment for spare parts 0.12 Cost plus profit margin.Motors Co., Ltd. and repairs to company

vehicles.

Thai Rung Union Car Plc Delta-TR Co., Ltd. Payment for vehicle seats and 9.50 In line with arms-lengthvarious items of equipment market prices.related to vehicle assembly.

Thai Rung Union Car Plc Thai Auto Press Payment for spare parts and 0.30 Cost plus profit margin.Parts Co., Ltd. repairs to company vehicles.

Thai Ultimate Car Co., Ltd. Isuzu Caicharoenkij Cost of dealer sales promotions. 3.51 In line with sales promotionMotors Co., Ltd. policy as applied to

unrelated parties.

Thai Ultimate Car Co., Ltd. Delta-TR Co., Ltd. Payment for vehicle seats and 3.57 In line with arms-lengthvarious items of equipment market prices.related to vehicle assembly.

Thai Ultimate Car Co., Ltd. Thai V.P. Corporation Ltd. Consultancy fees for 0.89 Based on average cost ofadministration, management funds of all companiesaudit and personnel. in the group.

Thai Ultimate Car Co., Ltd. Thai Auto Press Cost of spare parts and sundry 13.01 In line with arms-lengthParts Co., Ltd. equipment for motor vehicles. market prices.

Thai V.P. Auto Isuzu Caicharoenkij Cost of spare parts and repairs 0.12 Cost plus profit margin.Service Co., Ltd. Motors Co., Ltd. for customers’ vehicles.

Thai V.P. Auto Delta-TR Co., Ltd. Cost of seats and related 0.22Service Co., Ltd. equipment for repairs to

customers’ vehicles.

Thai V.P. Auto Thai V.P. Auto Cost of spare parts and other 0.29 In line with arms-lengthService Co., Ltd. Service Co., Ltd. equipment for repairs to market prices.

customers’ vehicles.

Thai V.P. Auto Thai Auto Press Cost of spare parts and other 1.43Service Co., Ltd. Parts Co., Ltd. equipment for repairs to

customers’ vehicles.

Total Total Total Total Total 32.9632.9632.9632.9632.96

Buyer Seller Policy for establishing price

Related Party Transactions(1)(1)(1)(1)(1) Related Party Transaction with entities having a possible conflict of interestRelated Party Transaction with entities having a possible conflict of interestRelated Party Transaction with entities having a possible conflict of interestRelated Party Transaction with entities having a possible conflict of interestRelated Party Transaction with entities having a possible conflict of interest

In the course of the year 2006 the Company conducted transactions with related companies as disclosed in Note 8 to theFinancial Statements for the year ended 31st December 2006.

Material transactions between the Company and subsidiaries and related companies in the period under review were as follows.

1.1.1.1.1. Goods & Services PurchasedGoods & Services PurchasedGoods & Services PurchasedGoods & Services PurchasedGoods & Services Purchased

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Buyer Seller Policy for establishing price

Nature of main Value / Bahttransactions millions

Thai Rung Union Car Plc V.P. Auto Enterprise Rental of land for TRU showroom. 0.36Co., Ltd.

Thai Rung Union Car Plc Phothiphoom Co., Ltd. Rental of land at site of 24.00TRU’s headquarters.

Thai Ultimate Car Co., Ltd. Phothiphoom Co., Ltd. Rental of land at site of 7.87TUC’s Nong Khaem Branch.

Thai Ultimate Car Co., Ltd. Chaicharoenkij Motors Rental of land at site of 0.96Co., Ltd. TUC’s office and service center.

Thai Ultimate Car Co., Ltd. Sinthoranee Construction Rental of land at site of 2.40& Land Co., Ltd. TUC’s office and service center.

Thai V.P. Auto Service Co., Ltd. Sinthoranee Construction Rental of land and leasehold rights for 4.53& Land Co., Ltd. building housing Buyer’s offices

and service center.

TotalTotalTotalTotalTotal 40.1240.1240.1240.1240.12

Buyer Seller Policy for establishing price

2.2.2.2.2. Rental of land and amortization of land lease rightsRental of land and amortization of land lease rightsRental of land and amortization of land lease rightsRental of land and amortization of land lease rightsRental of land and amortization of land lease rights

As agreed in contracts, in linewith market rates applied totransactions with unrelatedparties.

Nature of main Value / Bahttransactions millions

Isuzu Chaicharoenkij Motors Thai Rung Union Car Plc Vehicle assembly 26.26 Co., Ltd.Isuzu V. Motor Co., Ltd. Thai Rung Union Car Plc Vehicle assembly 1.33Delta-TR Co., Ltd. Thai Rung Tools & Dies Construction of dies and jigs 0.01

Co., Ltd.Isuzu Chaicharoenkij Motors Thai Ultimate Car Co., Ltd. Fitting of automotive equipment 3.43 Co., Ltd. and accessoriesThai V.P. Corporation Ltd. Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 0.05V.P. Auto Enterprise Co., Ltd. Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 0.04

First Parts Co., Ltd. Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 0.25

Isuzu Chaicharoenkij Motors Thai V.P. Auto Service Service center vehicle repair charges 0.08 Co., Ltd. Co., Ltd.Isuzu V. Motor Co., Ltd. Thai V.P. Auto Service Service center vehicle repair charges 0.05

Co., Ltd.Thai V.P. Corporation Ltd. Thai V.P. Auto Service Service center vehicle repair charges 0.04

Co., Ltd.V.P. Auto Enterprise Co., Ltd. Thai V.P. Auto Service Service center vehicle repair charges 0.10

Co., Ltd.

TotalTotalTotalTotalTotal 31.6431.6431.6431.6431.64

3.3.3.3.3. Service IncomeService IncomeService IncomeService IncomeService Income

Transactions represent normalbusiness activities and wereconducted at cost plus profitmargin.

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Buyer Seller Policy for establishing priceNature of main Value / Baht

transactions millions

Isuzu Chaicharoenkij Motors Thai Rung Union Car Plc Vehicle assembly 172.50Co., Ltd.

Thai Auto Conversion Co., Ltd. Thai Rung Union Car Plc Vehicle assembly 0.43

Delta-TR Co., Ltd. Thai Rung Union Car Plc Construction of dies and jigs 28.46

Thai Auto Conversion Co., Ltd. Thai Auto Press Parts Fitting of automotive equipment 0.88Co., Ltd. and accessories

Isuzu Chaicharoenkij Motors Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 73.08Co., Ltd.

Isuzu V. Motor Co., Ltd. Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 2.82

Thai V.P. Corporation Ltd. Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 0.33

First Parts Co., Ltd. Thai Ultimate Car Co., Ltd. Service center vehicle repair charges 24.00

Isuzu Chaicharoenkij Motors Thai V.P. Auto Service Service center vehicle repair charges 2.45Co., Ltd. Co., Ltd.

Isuzu V. Motor Co., Ltd. Thai V.P. Auto Service Service center vehicle repair charges 0.08Co., Ltd.

V.P. Auto Enterprise Co., Ltd. Thai V.P. Auto Service Service center vehicle repair charges 0.22Co., Ltd.

Thai V.P. Corporation Ltd. Thai V.P. Auto Service Service center vehicle repair charges 0.08Co., Ltd.

TotalTotalTotalTotalTotal 305.33305.33305.33305.33305.33

4.4.4.4.4. Sale of GoodsSale of GoodsSale of GoodsSale of GoodsSale of Goods

Transactions represent normal

business activities and were

conducted at cost plus profit

margin.

Nature of relationshipsNature of relationshipsNature of relationshipsNature of relationshipsNature of relationships1. TRT, TVS, TAP and TAB are subsidiaries of TRU, in which the Phaoenchoke group hold directorships and are the major

shareholders.2. TUC is a subsidiary of TVS, which holds 99.53% of the shares, the Phaoenchoke group holding the remaining 0.47%.3. TRL is a subsidiary of TVS, which holds 90% of the shares, the Phaoenchoke group holding the remaining 10%.4. DTR is a joint venture in which TRU holds 46% and TVP holds 5% of the shares.5. TAC is a joint venture in which TRU holds 30% of the shares.6. ICCK, TVP, CCK, FP, Phothiphoom, Sinthoranee Construction & Land and V.P. Auto Enterprise are all related companies

in which the Phaoenchoke group holds directorships and is the majority shareholder.

Key to AbbreviationsKey to AbbreviationsKey to AbbreviationsKey to AbbreviationsKey to AbbreviationsThai Rung Union Car Plc. TRU Delta-TR Co., Ltd. DTRThai Rung Tools & Dies Co., Ltd. TRT Thai Auto Conversion Co., Ltd. TACThai V.P. Auto Service Co., Ltd. TVS Isuzu Chaicharoenkij Motors Co., Ltd. ICCKThai Auto Press Parts Co., Ltd. TAP Thai V.P. Corporation Ltd. TVPThai Auto Body Assembly Co., Ltd. TAB Chaicharoenkij Motors Co., Ltd. CCKThai Ultimate Car Co., Ltd. TUC First Part Co., Ltd. FPTRU Leasing Co., Ltd. TRL

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(2)(2)(2)(2)(2) Necessity and Propriety of Related Party TransactionsNecessity and Propriety of Related Party TransactionsNecessity and Propriety of Related Party TransactionsNecessity and Propriety of Related Party TransactionsNecessity and Propriety of Related Party TransactionsRelated Party Transactions as per item (1) were considered with regard to their necessity, appropriateness and overall benefitto the Company and its shareholders. Most of them were normal business transactions or were in support of such normalbusiness transactions, and they were conducted on normal commercial terms, without giving rise to any profit diversion, andwere conducted at arms-length prices and on similar terms to those applied to non-related parties. The non-executiveDirectors’ opinion does not differ in any respect from the relevant resolutions of the Board of Directors.

(3)(3)(3)(3)(3) Authorization Procedure for Related Party TransactionsAuthorization Procedure for Related Party TransactionsAuthorization Procedure for Related Party TransactionsAuthorization Procedure for Related Party TransactionsAuthorization Procedure for Related Party TransactionsInformation on Related Party Transactions is submitted by the Manager of Accounting & Finance Department to theManaging Director, who in turn asks the Board of Directors or a meeting of shareholders to consider authorizing the proposedtransaction(s), in accordance with the criteria set out by the Stock Exchange of Thailand in the article relating to disclosure ofinformation on related party transactions and material acquisitions or disposals of assets of the company or its subsidiaries. TheBoard of Directors has established the following guidelines for considering related party transactions.

In the event that, the size of the transaction having been calculated in accordance with Stock Exchange of Thailandcriteria it transpires that the transaction requires approval by the Company’s Board of Directors, then the transactionmust be submitted to the Board of Directors for their consideration. In the event that the Audit Committee disagrees,the proposal can nevertheless be placed before the Board and an appropriate record made in the minutes.

In the event that, the size of the transaction having been calculated in accordance with Stock Exchange of Thailandcriteria, it transpires that the transaction requires approval by a meeting of shareholders, then the transaction mustfirst be submitted to the Audit Committee for consideration and, if approved, onward submission to the Board ofDirectors who in turn will, if approved, propose it to a meeting of shareholders.

Any person who is an interested party must declare such interest to the meeting and will not take part in the decision makingprocess for that particular agenda item, leaving it to Directors who have no such interest to give their opinions as to the needfor and the appropriateness and propriety of the transaction in the overall best interests of the Company and its shareholders.

Related Party Transactions are disclosed in a Note to the audited annual financial statements and in Form 56-1 for annualreporting of information, as well as in the Annual Report.

(4)(4)(4)(4)(4) Policy and approach with regard to future Related Party TransactionsPolicy and approach with regard to future Related Party TransactionsPolicy and approach with regard to future Related Party TransactionsPolicy and approach with regard to future Related Party TransactionsPolicy and approach with regard to future Related Party TransactionsAs regards any future Related Party Transactions the Company will act in accordance with all relevant laws, and with allrelevant orders, proclamations and regulations of the Stock Exchange of Thailand, including regulations regarding thedisclosure of information on Related Party Transactions and on the acquisition or disposal of significant assets by the Companyor its subsidiaries. For details please refer to (3) above: Authorization Procedure for Related Party Transactions.

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Audit Committee’s ReportThe Audit Committee, composed of three non-executive independent Directors, examined the appropriateness and efficiency of theCompany’s internal control systems, collating information from the internal audit department, the external auditors’ report and theadministration department, and made various recommendations to administrative departments with a view to improving workingefficiency and effectiveness. It also monitored compliance with principles of good corporate governance and risk management, soas to enhance the value of the organization to its shareholders and other stakeholders.

In 2006 the Audit Committee met five times and considered and dealt with the following matters.

1. Examination of the Company’s quarterly and annual financial statements to ensure that they were prepared in accordancewith generally accepted accounting principles and that they disclosed adequate information in a timely manner.

2. Evaluation of the Company’s internal control and audit systems, validation of the annual audit plan and monitoring of itsimplementation, including making recommendations aimed at improving working efficiency.

3. Monitoring compliance with securities legislation, stock exchange regulations and other legislation relevant to theCompany’s business, and of adherence to principles of good corporate governance.

4. Ensuring the accuracy and completeness of Company information disclosed in cases of related party transactions ortransactions involving a possible conflict of interest.

5. Selection, review and recommendation for appointment of Company’s external auditors and establishment of theirremuneration.

The Audit Committee met and exchanged opinions with the Board of Directors and with the internal audit department in order toevaluate the adequacy of the Company’s internal control systems. The Audit Committee and the Board of Directors are of the opinionthat the Company’s internal control systems are on the whole adequate, without any significant defects.

Pricha AttavipachChairman of the Audit Committee

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Remuneration Committee’s Report

The Remuneration Committee, composed of three non-executive independent Directors, is charged with setting policies, methodologyand criteria for establishing, and for considering and reviewing the establishment of remuneration of Directors, the President and theManaging Director fairly, transparently and in consonance with the Company’s results and each individual’s performance. It reportsindependently to the Board of Directors so as to ensure that remuneration is established in a way that is appropriate and fair to allinterested parties whilst safeguarding shareholders’ interests, in accordance with the Company’s principles of good corporategovernance.

In 2006 the Remuneration Committee met to consider the following matters.

1. Individual stipends for 2006 for Company Directors and Members of the Audit Committee, taking into account theperformance of the Company and the duties, responsibilities and performance of each person.

2. Remuneration for 2006 of Company Directors and Members of the Audit Committee, to ensure that this was at anappropriate level, for submission to the Board of Directors for their onward proposal to a meeting of shareholders for theirapproval.

Pricha AttavipachChairman of the Remuneration Committee

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Board of Directors’ Responsibility for Financial Reports

The Company’s Board of Directors is responsible for the consolidated financial statements of Thai Rung Union Car Public CompanyLimited and its subsidiaries and for the financial information which appears in the Annual Report. The financial statements wereprepared in accordance with generally accepted accounting standards, applying appropriate and consistent accounting policies andwith careful, prudent consideration and best possible estimates, making adequate disclosure of information by way of notes to thefinancial statements.

The Board of Directors has put in place and maintains effective internal control systems which provide reasonable assurance that therecording of transactions in the Company’s books is correct and complete, as well as adequately protecting the Company’s assetsand ensuring that any weak points can be detected and any misconduct or significant abnormal occurrence thus prevented.

The Company’s Board of Directors has appointed an Audit Committee consisting of non-executive directors, which is responsiblefor monitoring the quality of financial reports and internal control systems. The Audit Committee’s opinion on these matters appearsin the Report of the Audit Committee.

The Board considers that the Company’s internal control systems are at an appropriate level and provide sufficient assurance interms of the reliability of the financial statements of the Company and its subsidiaries as at 31st December 2006.

Pranee Phaoenchoke Sompong Phaoenchoke President Managing Director

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Management’s Comments and Analysis(Based on Consolidated Financial Statements as at 31st December 2006)

In 2006 Thailand’s total vehicle production amounted to 1,188,044 units, representing an increase of 6% on the previous year. Totaldomestic market sales reached 682,161 units (3% down on previous year), whilst 538,966 units were exported, representing anincrease of 22% on the previous year.

As for the Thai Rung group of companies, total consolidated revenues in 2006 amounted to Bt.2,413.91 million, down 20.85% on theprevious year, the decrease being due mainly to sales of the Company’s multi-purpose vehicles falling short of target due to everfiercer competition, fluctuating oil prices and political uncertainty. Nevertheless in 2006 the Company succeeded in boostingrevenues from sales of automotive parts and assembly work of various kinds by more than 30% on the previous year, and in 2007 theCompany aims to boost income from metal and plastic parts sales and contract assembly work dies jigs, profiting from the generaltrend of the automotive and auto -parts industry.

Details of Company’s performance and financial situation are as follows.

ResultsResultsResultsResultsResults

Consolidated RevenuesConsolidated RevenuesConsolidated RevenuesConsolidated RevenuesConsolidated RevenuesTotal consolidated revenues for 2006 were Bt. 2,413.91m., representing a decrease of Bt.635.87m. or 20.85% compared with 2005,details as follows.

Total Sales & Service Income was Bt.2,302.99m., down Bt.662.64m. or 22.34% on the prior year, breakdown being asfollows:- Income from vehicle modification and assembly including equipment and accessories amounted to Bt.169.43m., or

7.36% of total Sales & Service Income, representing a decrease of Bt.512.28m. or 75.15% on the prior year, due to everfiercer competition in the relevant sector.

- Income from vehicle sales (which includes an element of assembly charges and cost of equipment and accessories)totaled Bt.559.83m., 24.31% of total Sales & Service Income and Bt.280.86m. or 33.41% down on the prior year, due toever fiercer competition in the relevant sector.

- Income from sales and sub-assembly of parts totaled Bt.1,191.11m. or 51.72% of total Sales & Service Income, anincrease of Bt.247.96m. or 26.29% on the prior year.- Domestic parts sales grew by Bt.252.97m. or 26.98%.- Exports of parts fell by Bt.5.01m. or 88.36%.

- Income from sale of dies and jigs totaled Bt.115.25m. or 5% of total Sales & Service Income, Bt.27.22m. or 19.11% downon the prior year.

- Other Sales & Service Income amounted to Bt.267.37m., representing 11.61% of total Sales & Service Income, downBt.90.24m. or 25.23% on the prior year, due to:- Income from service centers fell by Bt.28.63m. or 13.57% due to lower spare parts sales at a group company.- Income from other services fell by Bt.61.61m. or 42.03% due to lower volumes of pickup cargo boxes for contract

painting.

39

Other income, at Bt.100 m., was Bt.15.85m. up on the prior year, main items being:- Interest and dividend income from investments in mutual funds was up by Bt.8.52m. due to investments in promissory

notes and bonds.- Income from export tax refunds rose by Bt.0.18m.- Income from sale of scrap increased by Bt.3.96m.- ‘Other’, net, rose by Bt.3.19m. due to profits on disposal of assets and sale of investment units.Share of profit from investments accounted for under equity method was Bt.10.91m., up by Bt.13.44m. or 531.23% on the prioryear, thanks to an increase of Bt.3.39m. in share of profits of Delta-TR Co., Ltd. and an increased of Bt.7.52m. in share ofprofits of Thai Auto Conversion Co., Ltd.

Cost of Sales, ExpensesCost of Sales, ExpensesCost of Sales, ExpensesCost of Sales, ExpensesCost of Sales, ExpensesTotal consolidated cost of sales and expenses for the year, including interest paid and corporate income tax, amounted to Bt.2,430.96m.,representing a decrease of Bt.489.55m. or 16.76% on the prior year. Details are as follows:

Cost of sales and service was Bt.1,992.41m., representing 86.51% of Sales & Service Income, this ratio being 6.21% higherthan in the previous year, reflecting the impact on unit costs of the big drop in sales.Selling and administrative expenses, at Bt.431.49m. were Bt.73.4m. or 14.54% less than in the previous year. Significantitems are as follows:- Advertising & sales promotion expenses down Bt. 51.46 m.- Inventory obsolescence provision down Bt. 2.85 m.- Vehicle repair and maintenance down Bt. 6.09 m.- Employee bonuses down Bt. 4.90 m.- Directors’ fees and meeting allowances down Bt. 5.12 m.- Other selling & administrative expenses, net down Bt. 2.98 m.Interest expense of Bt.4.5m. was Bt.4.51m. or 50.06% down on prior year, reflecting repayment of loans from financialinstitutions by the Company and its subsidiaries.Corporate income tax, at Bt.2.56m., was down by Bt.20.24m. or 88.77% on the previous year.

Net Profit (Loss)Net Profit (Loss)Net Profit (Loss)Net Profit (Loss)Net Profit (Loss)The Company recorded a net loss for the year of Bt.26.16m., giving an EPS of (Bt.0.05) compared with Bt.0.24 for the previous year.

Financial SituationFinancial SituationFinancial SituationFinancial SituationFinancial SituationAssetsAssetsAssetsAssetsAssetsTotal consolidated assets as at 31st December 2006 amounted to Bt.2,803.88m., representing a decrease of Bt.685m. or 19.63%compared with 2005. Major changes were as follows:

- Cash and cash equivalents rose by Bt.150.76m. or 40.71%, Bt.528.19m. being generated by operating activities, a furtherBt.110.53m. coming from investment activities, and Bt.487.96m. being used in financing activities.

- Current investments reduced by Bt.214.23m. or 47.63% due to expiry of mutual fund units held to maturity.- Net trade debtors decreased by Bt.39.97m. or 12.06% in line with lower sales volumes.- Related party trade debtors and short-term loans decreased by Bt.142.27m. or 60.72% in line with payments for goods

received.- Net inventories fell by Bt.394.97m. or 50.9%.- Input tax refundable decreased by Bt.7m. or 100%.- Input tax suspense was Bt.11.34m. or 72.03% lower, due to payment by a group company of service charges in the first

quarter of 2006.- Prepaid expenses fell by Bt.2.5m. or 39.39%.- Other current assets rose by Bt.0.26m. or 5.28%- Investments accounted for under equity method increased by Bt.9.95m. or 18.85% due to an increase of Bt.3.39m. in share

of profits recorded on the Company’s investment in Delta-TR Co., Ltd., an increase of Bt.7.52m. in share of profits on itsinvestment in Thai Auto Conversion Co., Ltd., and a decrease of (Bt.0.96m.) in dividends received from Delta-TR Co., Ltd.

40

- Other long-term investments reduced by Bt.0.42m. or 100% due to the establishment of a provision for loss on investment.- Net property, plant and equipment was down by Bt.51.82m. or 4.46%, reflecting acquisitions of Bt.114.67 m. and disposals

of (Bt.3.4m.) during the year, with depreciation at (Bt.155.47m.) and the establishment of a provision for asset devaluation inthe amount of (Bt.7.62m.)

- Net leasehold rights reduced by Bt.1.5m. or 15.2% in line with normal amortization during the year.- Income tax withheld at source rose by 17.02m. or 71.57% due to tax withheld at source being higher than the amount of

corporate income tax due.- Other non-current assets decreased by Bt.1.71m. or 10.76%.

LiabilitiesLiabilitiesLiabilitiesLiabilitiesLiabilitiesTotal consolidated liabilities per 31st December 2006, at Bt.315.34m., were down by Bt.598.71m. or 65.5% compared with 31stDecember 2005, the main changes being:

- Bank overdrafts and short-term borrowings from financial institutions fell by Bt.420m. or 100% due to repayments of loansfrom financial institutions.

- Trade creditors decreased by Bt.103.67m. or 31.5%, reflecting the payment of Bt.71.23m. of trade debt and a Bt.32.44m. fallin raw material purchases, in line with lower sales volumes.

- Related Party trade creditors decreased by Bt.6.27m. or 29.36%.- Other Related Party creditors increased by Bt.11.29m. or 207.17%.- Corporate income tax payable showed a decrease of Bt.1.54m. or 88.19%, reflecting much lower results compared to the

previous year.- Output tax suspense fell by Bt.20.92m. or 77.41% in line with sales receipts.- Accrued expenses decreased by Bt.18.52m. or 48.07% reflecting payment of Directors’ fees, payment of interest on loans

from financial institutions, and the payment of various other expenses incurred in 2005.- Other Liabilities decreased by Bt.39.09m. or 55.13% due to payment of Bt.21m. cost of assets, while unearned income fell

by Bt.14m. due to the fact that income based on actual completion rates of work in progress on dies and jigs was more thanthe income previously recorded in advance.

Shareholders’ equityShareholders’ equityShareholders’ equityShareholders’ equityShareholders’ equityShareholders’ equity as at 31st December 2006 stood at Bt.2,488.54m., representing a decrease of Bt.86.29m. or 3.35% reflecting thepayment of a dividend and the recording of results for the year 2006.

Cash Flow StatementCash Flow StatementCash Flow StatementCash Flow StatementCash Flow StatementCash and cash equivalents held by the Company and its subsidiaries as at 31st December 2006 were Bt.150.76m. or 40.71% higherthan at 31st December 2005, as per the following analysis.

- Net cash from operating activities was Bt.528.19m., Bt.145.89m. of this being generated by actual operating activities beforetaking into account changes in assets and liabilities, and a further Bt.561.02m. coming from reductions in trade debtors, minusa reduction in trade creditors of 178.71m.

- Net cash from investment activities was Bt.110.53m., salient items being as follows.- Bt.216.8m. from disposal of short term investments- Repayment by related company of Bt.0.5m. short term loan- Bt.0.96m. dividend received from joint venture company- Acquisitions (Bt.114.67m.) and disposals - Bt.7.08m.- of assets- Payment for leasehold rights (Bt.0.15m.)

- Net cash used in financing activities Bt.487.96m. composed of payment of a dividend to shareholders in the amount of Bt.67.96 m. and repayment of loans from financial institutions in the amount of Bt.420m.

41

Report of Independent AuditorTo The Board of Directors and Shareholders ofThai Rung Union Car Public Company Limited

I have audited the accompanying consolidated balance sheets of Thai Rung Union Car Public CompanyLimited and its subsidiaries as at 31 December 2006 and 2005, and the related consolidated statements ofincome, changes in shareholders’ equity and cash flows for the years then ended, and the separate financialstatements of Thai Rung Union Car Public Company Limited for the same periods. These financial statementsare the responsibility of the Company’s management as to their correctness and the completeness of thepresentation. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards requirethat I plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of Thai Rung Union Car Public Company Limited and its subsidiaries and of Thai Rung UnionCar Public Company Limited as at 31 December 2006 and 2005, and the results of their operations andcash flows for the years then ended, in accordance with generally accepted accounting principles.

Sumalee ReewarabandithCertified Public Accountant (Thailand) No. 3970

Ernst & Young Office LimitedBangkok: 28 February 2007

42

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS

AS AT 31 DECEMBER 2006 AND 2005

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

Note 2006 2005 2006 2005

ASSETS ASSETS ASSETS ASSETS ASSETSCurrent assetsCurrent assetsCurrent assetsCurrent assetsCurrent assets

Cash and cash equivalents 521,091,366 370,328,550 255,394,744 96,652,812Current investments 6 235,577,905 449,810,295 212,796,112 401,674,459Trade accounts receivable - others,net 7 291,470,757 331,438,771 113,680,867 118,151,808Trade accounts receivable - related parties 7,8 70,441,315 213,264,909 100,660,502 392,107,031Amounts due from related parties 8 2,082,352 1,025,113 11,497,030 986,803Short-term loans to related parties 8 19,500,000 20,000,000 62,500,000 54,000,000Inventories - net 9 381,016,912 775,988,945 200,744,518 449,195,538Other current assets 10 47,174,886 63,010,785 11,437,054 12,461,658

Total current assetsTotal current assetsTotal current assetsTotal current assetsTotal current assets 1,568,355,493 2,224,867,368 968,710,827 1,525,230,109Non-current assetsNon-current assetsNon-current assetsNon-current assetsNon-current assets

Investments accounted for under equity method 11 62,727,108 52,779,601 1,106,552,470 1,214,560,460Other long - term investments - 424,000 - 424,000Property, plant and equipment - net 12 1,109,468,827 1,161,292,303 388,674,737 413,643,191Land and building leasehold rights - net 13 8,360,278 9,858,579 25,000 -Other non-current assets 14 54,976,845 39,660,130 51,698,888 39,358,540

Total non-current assetsTotal non-current assetsTotal non-current assetsTotal non-current assetsTotal non-current assets 1,235,533,058 1,264,014,613 1,546,951,095 1,667,986,191TOTAL ASSETSTOTAL ASSETSTOTAL ASSETSTOTAL ASSETSTOTAL ASSETS 2,803,888,551 3,488,881,981 2,515,661,922 3,193,216,300

The accompanying notes are an integral part of the financial statements.

43

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS (Continued)

AS AT 31 DECEMBER 2006 AND 2005(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

Note 2006 2005 2006 2005

LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilitiesCurrent liabilitiesCurrent liabilitiesCurrent liabilitiesCurrent liabilities

Short-term loans from financial institutions 15 - 420,000,000 - 360,000,000Trade accounts payable - others 225,384,666 329,051,274 80,509,784 151,739,360Trade accounts payable - related parties 8 15,078,720 21,345,739 3,920,602 29,738,083Amounts due to related parties 8 16,745,875 5,451,615 6,716,334 3,678,388Short-term loans from related parties 8 - - - 105,000,000Other current liabilities 16 58,134,098 138,203,598 24,909,541 65,885,549

Total current liabilitiesTotal current liabilitiesTotal current liabilitiesTotal current liabilitiesTotal current liabilities 315,343,359 914,052,226 116,056,261 716,041,380

Shareholders' equityShareholders' equityShareholders' equityShareholders' equityShareholders' equityShare capital 17

Registered524,996,497 ordinary shares of Baht 1 each 524,996,497 524,996,497 524,996,497 524,996,497

Issued and paid up501,589,497 ordinary shares of Baht 1 each 501,589,497 501,589,497 501,589,497 501,589,497

Additional paid - in capitalPremium on ordinary shares 727,144,000 727,144,000 727,144,000 727,144,000Surplus on changes in value of investments - 1,250,335 - 1,250,335

Retained earningsAppropriated

Statutory reserve - the Company 19 52,499,649 50,158,949 52,499,649 50,158,949- subsidiaries 11,414,029 5,251,012 - -

Unappropriated 1,106,958,486 1,191,781,127 1,118,372,515 1,197,032,139Total equity attributable to Company's shareholders 2,399,605,661 2,477,174,920 2,399,605,661 2,477,174,920Minority interest - equity attributable to

minority shareholders of subsidiaries 88,939,531 97,654,835 - -Total shareholders' equityTotal shareholders' equityTotal shareholders' equityTotal shareholders' equityTotal shareholders' equity 2,488,545,192 2,574,829,755 2,399,605,661 2,477,174,920Total Liabilities and Shareholders’ equityTotal Liabilities and Shareholders’ equityTotal Liabilities and Shareholders’ equityTotal Liabilities and Shareholders’ equityTotal Liabilities and Shareholders’ equity 2,803,888,551 3,488,881,981 2,515,661,922 3,193,216,300

The accompanying notes are an integral part of the financial statements.

44

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESINCOME STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

Note 2006 2005 2006 2005

RevenuesRevenuesRevenuesRevenuesRevenuesSales 1,935,855,921 2,395,009,460 675,486,909 616,826,445Service income 367,135,616 570,623,702 275,478,402 769,222,579Other income 20 100,002,398 84,147,512 58,990,591 42,007,261Share of income from investments accounted

for under equity method 10,908,907 - 124,415,679 108,352,085Total revenuesTotal revenuesTotal revenuesTotal revenuesTotal revenues 2,413,902,842 3,049,780,674 1,134,371,581 1,536,408,370ExpensesExpensesExpensesExpensesExpenses

Cost of sales and services 1,992,409,906 2,381,280,037 910,036,454 1,141,164,133Selling and administrative expenses 431,495,611 504,889,577 245,284,319 264,722,117Share of loss from investments accounted

for under equity method - 2,531,097 - -Total expensesTotal expensesTotal expensesTotal expensesTotal expenses 2,423,905,517 2,888,700,711 1,155,320,773 1,405,886,250Income (loss) before interest expense

and corporate income tax (10,002,675) 161,079,963 (20,949,192) 130,522,120Interest expense (4,501,849) (9,014,694) (5,210,982) (7,504,753)Corporate income tax (2,564,511) (22,802,722) - (3,234,382)Income (loss) after corporate income tax (17,069,035) 129,262,547 (26,160,174) 119,782,985Net income attributable to minority interest (9,091,139) (9,479,562) - -Net income (loss) for the yearNet income (loss) for the yearNet income (loss) for the yearNet income (loss) for the yearNet income (loss) for the year (26,160,174) 119,782,985 (26,160,174) 119,782,985

Earnings (loss) per shareEarnings (loss) per shareEarnings (loss) per shareEarnings (loss) per shareEarnings (loss) per share 23Net income (loss) (0.05) 0.24 (0.05) 0.24Weighted average number of ordinary shares (shares) 501,589,497 501,496,565 501,589,497 501,496,565

Diluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per share 23Net income (loss) (0.05) 0.24 (0.05) 0.24Weighted average number of ordinary shares (shares) 501,589,497 501,496,565 501,589,497 501,496,565

The accompanying notes are an integral part of the financial statements.

45

THAI

RUN

G UN

ION

CAR

PUBL

IC C

OMPA

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ND S

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STAT

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SHA

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R 20

06 A

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(Unit

: Bah

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CONS

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shar

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share

sof

inves

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appr

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tedof

subs

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tal

Balan

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at 31

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r 200

4Ba

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at 31

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0,529

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--

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6,000

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Net in

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--

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-11

9,782

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-11

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46

THAI

RUN

G UN

ION

CAR

PUBL

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FOR

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(Unit

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9,782

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31 D

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31 D

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501,5

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at 31

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r 200

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1,589

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1,118

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99,60

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e an i

ntegr

al pa

rt of th

e fina

ncial

state

ments

.

47

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESCASH FLOWS STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

2006 2005 2006 2005

Cash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesCash flows from operating activitiesNet income (loss) (26,160,174) 119,782,985 (26,160,174) 119,782,985Adjustments to reconcile net income (loss) to net cash

provided by (paid from) operating activities: -Net income attributable to minority interest 9,091,139 9,479,562 - -

Share of loss (income) from investments accounted for under equity method (10,908,907) 2,531,097 (124,415,679) (108,352,085)Allowance for doubtful accounts 564,350 - 624,495 -Allowance for diminution in value of inventories 9,348,420 16,015,223 7,157,638 3,653,057Depreciation 155,471,686 170,154,234 115,965,772 139,314,740Allowance for impairment loss of assets 8,047,031 - 8,047,031 -Written off equipment and other assets 6,295,962 508,889 6,295,962 -Written off other long-term investment - 500,000 - -Amortisation of land and building leasehold rights 1,648,301 1,946,845 125,000 -Gain on sales of equipment (3,682,864) (3,866,942) (565,074) (3,102,608)Loss (gain) on sales of current investments (3,828,339) 114,878 (2,266,362) 114,878Unrealised gain on changes in value of investments - (1,906,499) - (1,717,803)

Income (loss) from operating activities beforechanges in operating assets and liabilities 145,886,605 315,260,272 (15,191,391) 149,693,164

Operating assets (increase) decreaseTrade accounts receivable - others and related parties 182,227,258 6,625,201 295,292,975 (93,245,644)Amounts due from related parties (1,057,239) 7,970,777 (10,510,227) 4,372,297Inventories 385,623,613 (97,866,753) 241,293,382 (199,774,955)Other current assets 15,835,899 12,409,838 1,024,604 9,915,572Other non-current assets (21,612,677) (29,383,801) (18,636,310) (29,496,723)

Operating liabilities increase (decrease)Trade accounts payable - others and related parties (109,933,627) 21,069,059 (97,047,057) 1,075,399Amounts due to related parties 11,294,260 1,881,146 3,037,946 2,739,615Other current liabilities (80,069,500) (102,522,088) (40,976,008) (455,162) Net cash from (used in) operating activities 528,194,592 135,443,651 358,287,914 (155,176,437)

The accompanying notes are an integral part of the financial statements.

48

The accompanying notes are an integral part of the financial statements.

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESCASH FLOWS STATEMENTS (Continued)

FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

2006 2005 2006 2005

Cash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesCash flows from investing activitiesProceeds from sales of current investments 216,803,551 5,945,946 189,996,243 5,945,946Refund (payment) of short-term loans to related parties 500,000 29,251,000 (8,500,000) (54,000,000)Net cash payment for purchase of investment

in subsidiary - - - (18,800,000)Dividend received from subsidiaries and

associated company 961,400 849,160 232,321,800 260,927,160Proceeds from sales of equipment 7,081,614 5,656,630 681,544 4,308,517Acquisition of building and equipment (114,669,991) (170,153,288) (98,736,819) (121,482,434)Acquisition of building leasehold right (150,000) - (150,000) -

Net cash from (used in) investing activities 110,526,574 (128,450,552) 315,612,768 76,899,189

Cash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesCash flows from financing activitiesIncrease (decrease) in short-term loans

from financial institutions (420,000,000) 281,983,138 (360,000,000) 360,000,000Increase (decrease) in short-term loans from

related parties - - (105,000,000) 85,000,000Dividend paid by the Company (50,158,750) (300,928,498) (50,158,750) (300,928,498)Share capital received from exercised warrants - 8,480,000 - 8,480,000Share capital of a subsidiary received from

minority interest - 7,200,000 - -Dividend paid by subsidiaries to minority interest (17,799,600) (18,141,200) - -

Net cash from (used in) financing activities (487,958,350) (21,406,560) (515,158,750) 152,551,502Net increase (decrease) in cash and cash equivalents 150,762,816 (14,413,461) 158,741,932 74,274,254Cash and cash equivalents at beginning of year 370,328,550 384,742,011 96,652,812 22,378,558Cash and cash equivalents at end of year 521,091,366 370,328,550 255,394,744 96,652,812Supplemental cash flows information: -

Cash paid during the year forInterest expense 9,809,590 3,777,860 10,414,390 2,304,085Corporate income tax 21,126,131 136,679,913 14,918,699 28,140,778

Non-cash itemSurplus on changes in value of investments - 1,027,423 - 918,710

49

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESTHAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESTHAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESTHAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESTHAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005

Thai Rung Union Car Public Company Limited (“The Company”) was incorporated as a limited public company under Thai lawsand listed on the Stock Exchange of Thailand in 1994. The Company operates its business in Thailand and its principally engagedin the car assembly and modification, and the manufacture and distribution of parts and mold. Its registered address is located at 28/6 Moo 1, Petchkasem Road, Khwaeng Nongkangploo, Khet Nongkaem, Bangkok.

The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting ProfessionAct B.E. 2547. The presentation of the financial statements has been made in compliance with the stipulations of the Notification ofthe 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.

3.1 The consolidated financial statements include the financial statements of Thai Rung Union Car Public CompanyLimited and the following subsidiary companies, which existing under Thai laws:

Assets as a percentage Revenues as a Percentageto the consolidated to the consolidated total

Percentage total assets as at revenues for the yearNature of business of shareholding 31 December ended 31 December

2006 2005 2006 2005 2006 2005Percent Percent Percent Percent Percent Percent

Subsidiaries directly held by the Company

Thai V.P. Auto Service Co., Ltd. Sales of cars, spare parts่ and car service centers 94 94 7 10 8 11Thai Rung Tools and Dies Co., Ltd. Mold making service 94 94 5 6 5 4Thai Auto Pressparts Co., Ltd. Manufacture of vehicle’s

body parts 91 91 21 16 28 20Thai Auto Body Assembly Co., Ltd. Manufacture of parts and

assembly of special car(not yet operated) 91 91 - - - -

Subsidiaries held by Thai V.P. Auto Service Co., Ltd.Thai Ultimate Car Co. Ltd. Sales of cars, spare parts 99.53 99.53 20 21 22 26

and accessories and carservice centers

TRU Leasing Co., Ltd. Hire purchase of cars 90 90 1 1 - -(not yet operated)

1. GENERAL INFORMATION1. GENERAL INFORMATION1. GENERAL INFORMATION1. GENERAL INFORMATION1. GENERAL INFORMATION

2. BASIS OF PREPARATION2. BASIS OF PREPARATION2. BASIS OF PREPARATION2. BASIS OF PREPARATION2. BASIS OF PREPARATION

3. BASIS OF CONSOLIDATION3. BASIS OF CONSOLIDATION3. BASIS OF CONSOLIDATION3. BASIS OF CONSOLIDATION3. BASIS OF CONSOLIDATION

50

On 3 March 2006, Thai Rung General Motor Co., Ltd. registered the change of its name to Thai Rung Tools and Dies Co.,Ltd. with the Ministry of Commerce.

3.2 Material balances and transactions between the Company and its subsidiary companies have been eliminated from theconsolidated financial statements.

3.3 Investments in the subsidiary companies as recorded in the Company’s books of account are eliminated against the equityof the subsidiary companies.

In October 2006, the Federation of Accounting Professions issued Notification No. 26/2006 regarding Accounting Standard No. 44“Consolidated Financial Statements and Accounting for Investments in Subsidiaries” (Amendment No. 1), under which investmentsin subsidiaries, jointly controlled entities and associates are to be presented in the separate financial statements under the costmethod rather than the equity method. Entities which are not ready to adopt the cost method in 2006 can continue to use the equitymethod through the end of 2006 and adopt the cost method as from 1 January 2007.

In this regard, the Company has elected to adopt the change in 2007. Adoption of the change in 2007 will necessitate the restatementof the Company’s 2006 separate financial statements to be presented for comparative purposes along with the financial statementsfor 2007. The restatement will have the effect of increasing net income in the Company’s separate financial statements for 2006 byapproximately Baht 108 million (Baht 0.22 per share) and decreasing net worth in the Company’s separate financial statements at 31December 2006 by approximately Baht 659 million.

5.15.15.15.15.1 Revenue recognitionRevenue recognitionRevenue recognitionRevenue recognitionRevenue recognition

a) Sales of goodsSales 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.

b) Rendering of servicesService revenue is recognised when services have been rendered taking into account the stage of completion.

c) Interest incomeInterest income is recognised as interest accrues based on the effective rate method.

d) DividendsDividends are recognised when the right to receive the dividends is established.

5.25.25.25.25.2 Cash and cash equivalentsCash and cash equivalentsCash and cash equivalentsCash and cash equivalentsCash and cash equivalents

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

5.35.35.35.35.3 Trade accounts receivable and allowance for doubtful accountsTrade accounts receivable and allowance for doubtful accountsTrade accounts receivable and allowance for doubtful accountsTrade accounts receivable and allowance for doubtful accountsTrade accounts receivable and allowance for doubtful accounts

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

4. ADOPTION OF NEW ACCOUNTING STANDARD4. ADOPTION OF NEW ACCOUNTING STANDARD4. ADOPTION OF NEW ACCOUNTING STANDARD4. ADOPTION OF NEW ACCOUNTING STANDARD4. ADOPTION OF NEW ACCOUNTING STANDARD

5. SIGNIFICANT ACCOUNTING POLICIES5. SIGNIFICANT ACCOUNTING POLICIES5. SIGNIFICANT ACCOUNTING POLICIES5. SIGNIFICANT ACCOUNTING POLICIES5. SIGNIFICANT ACCOUNTING POLICIES

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5.45.45.45.45.4 Inventories and allowance for diminution in inventory valueInventories and allowance for diminution in inventory valueInventories and allowance for diminution in inventory valueInventories and allowance for diminution in inventory valueInventories and allowance for diminution in inventory value

a) Finished goods and work in process are valued at the lower of standard cost (which approximates actual cost) and netrealisable value. Standard cost includes all production costs and attributable factory overheads.

b) Raw materials and parts are valued at the lower of standard cost (which approximates actual cost) and net realisablevalue and are charged to production costs and cost of services whenever consumed.

c) Spare parts of car service centers are valued at the lower of cost (moving average method) and net realisable value.

d) Cars purchased for sales are valued at the lower of cost (specific identification method) and net realisable value.

Allowance for diminution in value of inventories is recorded by considering old, slow-moving and obsolete inventories.

5.55.55.55.55.5 InvestmentsInvestmentsInvestmentsInvestmentsInvestments

a) Investments in subsidiary and associated companies are accounted for under the equity method.

b) Investments in unit trusts of funds equivalent to marketable securities are held as available-for-sale securities, and statedat fair value. The fair value of unit trusts is determined from their net asset value. The weighted average method is usedfor computation of the cost of investments. Changes in the carrying amounts of securities are recorded as a separateitems in shareholders’ equity until securities are sold, the change are then included in determining income.

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

d) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at costnet of allowance for loss on diminution in value (if any).

5.65.65.65.65.6 Property, plant and equipment/DepreciationProperty, plant and equipment/DepreciationProperty, plant and equipment/DepreciationProperty, plant and equipment/DepreciationProperty, plant and equipment/Depreciation

Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for losson impairment of assets (if any). Depreciation of buildings and equipment is calculated by reference to their costs asfollows: -

Depreciation method Estimated useful lives

Land improvement Straight-line method 20 yearsBuildings and building improvement Straight-line method 20 yearsMachinery, factory equipment and tools Straight-line method 10, 15 yearsMachinery, factory equipment and tools Double declining method 5 years acquired from since 1999 onwardsOffice equipment Double declining method 5 yearsMotor vehicles Double declining method 5 years

Depreciation is included in determining income.

No depreciation is provided on land and work in progress.

52

5.75.75.75.75.7 Land and building leasehold rights/AmortisationLand and building leasehold rights/AmortisationLand and building leasehold rights/AmortisationLand and building leasehold rights/AmortisationLand and building leasehold rights/Amortisation

Land and building leasehold rights are stated at cost less accumulated amortisation. Amortisation of land and buildingleasehold rights is calculated by reference to their costs on a straight-line basis over the periods of lease agreements.

Amortisation is included in determining income.

5.85.85.85.85.8 Related party transactionsRelated party transactionsRelated party transactionsRelated party transactionsRelated party transactions

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

They also include associated companies and individuals which directly or indirectly own a voting interest in the Company thatgives them significant influence over the Company, key management personnel, directors and officers with authority in theplanning and direction of the Company’s operations.

5.95.95.95.95.9 Foreign currenciesForeign currenciesForeign currenciesForeign currenciesForeign currencies

Foreign currency transactions are translated into Baht at the exchange rates ruling on the transaction dates. Assets andliabilities denominated in foreign currencies outstanding at the balance sheet date are translated into Baht at the exchangerates ruling on the balance sheet date.

Gains and losses on exchange are included in determining income.

5.105.105.105.105.10 Impairment of assetsImpairment of assetsImpairment of assetsImpairment of assetsImpairment of assets

The Company and subsidiaries assess at each reporting date whether there is an indication that an asset may be impaired. Ifany such indication exists, the Company and subsidiaries make an estimate of the asset’s recoverableamount. Where thecarrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to itsrecoverable amount. Impairment losses are recognised in the income statement. An asset’s recoverable amount is the higherof fair value less costs to sell and value in use.

5.11 5.11 5.11 5.11 5.11 Employee benefitsEmployee benefitsEmployee benefitsEmployee benefitsEmployee benefits

Salary, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses whenincurred.

5.12 5.12 5.12 5.12 5.12 ProvisionsProvisionsProvisionsProvisionsProvisions

Provisions are recognised when the Company and subsidiaries have a present obligation as a result of a past event, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliableestimate can be made of the amount of the obligation.

5.13 5.13 5.13 5.13 5.13 Income taxIncome taxIncome taxIncome taxIncome tax

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

5.14 5.14 5.14 5.14 5.14 Use of accounting estimatesUse of accounting estimatesUse of accounting estimatesUse of accounting estimatesUse of accounting estimates

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

53

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY31 December 31 December 31 December 31 December

2006 2005 2006 2005Available-for-sale securities Unit trusts Lum-Ka Fund Three - 199,736,367 - 171,455,671 Asset Select Dividend Fund - 242,938,821 - 223,192,395 REGCO Loan Fund (1) - 8,965,779 - 8,965,779

- 451,640,967 - 403,613,845 Unrealised loss on changes in value of investments - (1,830,672) - (1,939,386)Available-for-sale securities-net - 449,810,295 - 401,674,459Investments in debt securities to be held to maturity Bonds-Bank of Thailand 235,577,905 - 212,796,112 - Total investments in debt securities to be held to maturity 235,577,905 - 212,796,112 -Total current investments 235,577,905 449,810,295 212,796,112 401,674,459

6. CURRENT INVESTMENTS6. CURRENT INVESTMENTS6. CURRENT INVESTMENTS6. CURRENT INVESTMENTS6. CURRENT INVESTMENTS

As at 31 December 2005, the Company and subsidiaries hold investments in Asset Select Dividend Fund and Lum-Ka Fund Threemore than 50 percent of the total units issued by that fund. However, the Company and subsidiaries intend to hold that investment unitsas current investments with a view to their subsequent disposals in the near future. The Company has no control over themanagement of that fund. Consolidation of investments in that fund is therefore not presented.

The outstanding balances of trade accounts receivable as at 31 December 2006 and 2005 are aged, based on due date, as follows:

(Unit: Baht)CONSOLIDATED THE COMPANY ONLY

31 December 31 December 31 December 31 December 2006 2005 2006 2005

AAAAAge of receivablesge of receivablesge of receivablesge of receivablesge of receivablesTrade accounts receivable - othersTrade accounts receivable - othersTrade accounts receivable - othersTrade accounts receivable - othersTrade accounts receivable - othersNot yet due 236,687,675 227,437,449 103,170,330 95,619,547Past due Up to 3 months 46,210,968 101,442,110 10,487,383 22,145,443 3 - 6 months 7,463,405 1,389,231 - 384,047 6 - 12 months 2,030,054 772,188 23,154 2,771 Over 12 months - 1,022,288 - -Total 292,392,102 332,063,266 113,680,867 118,151,808Less: Allowance for doubtful accounts (921,345) (624,495) - -Trade accounts receivable - others, net 291,470,757 331,438,771 113,680,867 118,151,808

7. TRADE ACCOUNTS RECEIVABLE7. TRADE ACCOUNTS RECEIVABLE7. TRADE ACCOUNTS RECEIVABLE7. TRADE ACCOUNTS RECEIVABLE7. TRADE ACCOUNTS RECEIVABLE

54

Trade accounts receivable - related partiesTrade accounts receivable - related partiesTrade accounts receivable - related partiesTrade accounts receivable - related partiesTrade accounts receivable - related partiesNot yet due 51,639,985 160,062,085 45,037,614 183,072,886Past due Up to 3 months 8,937,678 29,180,449 9,026,627 111,161,811 3 - 6 months 2,685,505 1,858,341 20,852,986 30,879,345 6 - 12 months 5,801,807 14,702,620 12,262,311 44,283,121 Over 12 months 1,643,840 7,461,414 13,480,964 22,709,868Total 70,708,815 213,264,909 100,660,502 392,107,031Less: Allowance for doubtful accounts (267,500) - - -Trade accounts receivable - related parties, net 70,441,315 213,264,909 100,660,502 392,107,031

(Unit: Baht)CONSOLIDATED THE COMPANY ONLY

31 December 31 December 31 December 31 December 2006 2005 2006 2005

(Unit: Million Baht)CONSOLIDATED THE COMPANY ONLY Transfer Pricing policy

2006 2005 2006 2005

TTTTTransactions with subsidiariesransactions with subsidiariesransactions with subsidiariesransactions with subsidiariesransactions with subsidiaries (eliminated from consolidated financial statements)Purchases of goods and services - - 35 35 Cost plus marginPurchases of fixed assets - - 39 26 Carrying value plus marginElectricity expense - - 14 15 Cost plus gross profit margin not

more than 5 percentInterest expense - - 1 1 1.50 - 5.45 percent per annumSales of goods - - 30 156 Cost plus marginSales of fixed assets - - 1 - Carrying value plus marginService income - - 9 50 Cost plus marginTechnical service income - - 39 289 In accordance with the contract price at

the following rates:-1)Technical service fee fixed rate per unit2) Management service fee fixed rate

per month3) Commission not more than 4 percent of

sales revenue(2005: Commission not more than 9 percent of sales revenue)

During the years, the Company and its subsidiaries had significant business transactions with related parties, which have beenconcluded on commercial terms and bases agreed upon in the ordinary course of businesses between the Company and thosecompanies. Below is a summary of those transactions.

8. RELATED PARTY TRANSACTIONS8. RELATED PARTY TRANSACTIONS8. RELATED PARTY TRANSACTIONS8. RELATED PARTY TRANSACTIONS8. RELATED PARTY TRANSACTIONS

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Building and factory rental income - - 1 1 Contract priceLand and building rental income - - 2 2 Contract priceManagement service income - - 10 - Contract priceUtilities, transportation income - - 9 8 Cost plus margin and sales of suppliesInterest income - - 2 1 4.73 - 6.00 percent per annumDividend income - - 231 260 As declaredTransactions with related partiesTransactions with related partiesTransactions with related partiesTransactions with related partiesTransactions with related partiesPurchases of goods and services 33 96 10 52 Cost plus marginLand rental expense and 40 41 24 24 Contract price amortisation of leasehold rightsCar rental expense 4 5 2 3 Contract priceShowroom rental expense 1 1 1 - Contract pricePurchases of fixed assets 1 3 - 3 Carrying value plus marginService income 32 84 27 75 Cost plus marginSales of goods 305 399 201 175 Cost plus marginSales of fixed assets 5 - - - Carrying value plus marginConsulting service income 5 5 5 5 Contract priceUtilities, transportation income 6 5 4 3 Cost plus margin and sales of suppliesLand and showroom rental income 6 4 - - Contract priceInterest income 1 1 1 - 1.50 - 5.45 percent per annumDividend income 1 1 1 1 As declared

(Unit: Million Baht)

CONSOLIDATED THE COMPANY ONLY Transfer Pricing policy

2006 2005 2006 2005

56

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

2006 2005 2006 2005Trade accounts receivable - related partiesTrade accounts receivable - related partiesTrade accounts receivable - related partiesTrade accounts receivable - related partiesTrade accounts receivable - related partiesRelated companies

Isuzu Chaicharoenkij Motor Co., Ltd. 48,819,793 184,425,194 34,753,660 115,590,783Delta-TR Co., Ltd. 7,525,266 7,535,566 6,999,248 7,409,250Isuzu V Motor Co., Ltd. 1,676,338 2,825,551 680,480 990,720Thai V.P. Corporation Co., Ltd. 2,531,314 5,236,199 - -V.P. Auto Enterprise Co., Ltd. 70,287 94,747 - -Firstpart Co., Ltd. 9,978,639 12,957,083 - -Thai Auto Conversion Co., Ltd. 107,178 190,569 22,475 74,103

70,708,815 213,264,909 42,455,863 124,064,856Less: Allowance for doubtful accounts (267,500) - - -

70,441,315 213,264,909 42,455,863 124,064,856Subsidiaries

Thai Rung Tools and Dies Co., Ltd. - - 1,421,567 492,379Thai V.P. Auto Service Co., Ltd. - - 20,209,354 84,405,995Thai Ultimate Car Co., Ltd. - - 36,514,558 183,143,801Thai Auto Pressparts Co., Ltd. - - 59,160 -

- - 58,204,639 268,042,175Total 70,441,315 213,264,909 100,660,502 392,107,031

Amounts due from related partiesAmounts due from related partiesAmounts due from related partiesAmounts due from related partiesAmounts due from related partiesRelated companies

Isuzu Chaicharoenkij Motor Co., Ltd. 37,397 183,305 37,397 -Bhoti Phum Co., Ltd. 126,000 - 126,000 -V.P. Auto Enterprise Co., Ltd. 333,071 656,924 - -Lexus Auto City Co., Ltd. 300,000 - - -Firstpart Co., Ltd. 882,814 127,355 - -Thai V.P. Corporation Co., Ltd. 390,266 51,195 - -Isuzu V Motor Co., Ltd. 12,804 4,334 - -Firstpart Auto Co., Ltd. - 2,000 - -

2,082,352 1,025,113 163,397 -Subsidiaries

Thai Rung Tools and Dies Co., Ltd. - - 357,000 357,000Thai Auto Pressparts Co., Ltd. - - 9,437,400 -TRU Leasing Co., Ltd. - - 1,498,000 -Thai V.P. Auto Service Co., Ltd. - - 41,233 629,803

- - 11,333,633 986,803Total 2,082,352 1,025,113 11,497,030 986,803

Short-term loans to related partiesShort-term loans to related partiesShort-term loans to related partiesShort-term loans to related partiesShort-term loans to related partiesRelated company

Isuzu Chaicharoenkij Motor Co., Ltd. 19,500,000 20,000,000 19,500,000 -Subsidiary

Thai V.P. Auto Service Co., Ltd. - - 43,000,000 54,000,000 Total 19,500,000 20,000,000 62,500,000 54,000,000

The balances of the accounts as at 31 December 2006 and 2005 between the Company and those related companies are as follows:

57

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

2006 2005 2006 2005

Trade accounts payable - related partiesTrade accounts payable - related partiesTrade accounts payable - related partiesTrade accounts payable - related partiesTrade accounts payable - related partiesRelated companies

Isuzu Chaicharoenkij Motor Co., Ltd. 10,157,185 135,663 - -Delta-TR Co., Ltd. 891,859 12,664,005 284,038 9,002,004Thai V.P. Corporation Co., Ltd. - 44,973 - -V.P. Auto Enterprise Co., Ltd. 64,130 32,563 - 1,920Firstpart Co., Ltd. 3,965,546 8,468,535 - 81,121

15,078,720 21,345,739 284,038 9,085,045Subsidiaries

Thai Rung Tools and Dies Co., Ltd. - - 800,555 15,991,350Thai V.P. Auto Service Co., Ltd. - - 2,836,009 4,378,097Thai Ultimate Car Co., Ltd. - - - 36,720Thai Auto Pressparts Co., Ltd. - - - 246,871

- - 3,636,564 20,653,038

Total 15,078,720 21,345,739 3,920,602 29,738,083

Amounts due to related partiesAmounts due to related partiesAmounts due to related partiesAmounts due to related partiesAmounts due to related partiesRelated companies

Isuzu Chaicharoenkij Motor Co., Ltd. 9,571,594 813,971 37,539 813,971Isuzu V Motor Co., Ltd. 20,653 - 20,653 -Delta-TR Co., Ltd. 300,000 300,000 - -Thai V.P. Corporation Co., Ltd. 3,205,002 332,526 1,085,868 247,550

Sinthoranee Land and Construction Co., Ltd. 1,200,000 900,000 - -Sinthoranee Property Co., Ltd. - 6,790 - 6,790Chaicharoenkij Motor Co., Ltd. 960,000 240,000 - -V.P. Auto Enterprise Co., Ltd. 201,000 298,239 201,000 270,000Lexus Auto City Co., Ltd. 7,088 - 7,088 -Bhoti Phum Co., Ltd. - 1,900,000 - 1,900,000Firstpart Co., Ltd. 1,280,538 660,089 210,186 -

16,745,875 5,451,615 1,562,334 3,238,311Subsidiaries

Thai Auto Pressparts Co., Ltd. - - - 125,343Thai Rung Tools and Dies Co., Ltd. - - 294,000 294,000Thai V.P. Auto Service Co., Ltd. - - 4,860,000 20,734

- - 5,154,000 440,077

Total 16,745,875 5,451,615 6,716,334 3,678,388

Short-term loans from related partiesShort-term loans from related partiesShort-term loans from related partiesShort-term loans from related partiesShort-term loans from related partiesSubsidiaries

Thai V.P. Auto Service Co., Ltd. - - - 40,000,000Thai Auto Pressparts Co., Ltd. - - - 65,000,000

Total - - - 105,000,000

58

During 2006, movement of loans to and loans from related parties were as follows: -

(Unit: Million Baht)1 January During the year 31 December Interest

2006 Increase Decrease 2006 rateConsolidatedConsolidatedConsolidatedConsolidatedConsolidatedShort-term loan to related companyShort-term loan to related companyShort-term loan to related companyShort-term loan to related companyShort-term loan to related company Isuzu Chaicharoenkij Motor Co., Ltd. 20 50 (51) 19 1.50 - 5.45 percent per annum,

due in 1 monthThe Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyShort-term loan to related companyShort-term loan to related companyShort-term loan to related companyShort-term loan to related companyShort-term loan to related company Isuzu Chaicharoenkij Motor Co., Ltd. - 50 (31) 19 4.00 - 5.45 percent per annum,

due in 1 monthShort-term loans to subsidiariesShort-term loans to subsidiariesShort-term loans to subsidiariesShort-term loans to subsidiariesShort-term loans to subsidiaries Thai V.P. Auto Service Co., Ltd. 54 137 (148) 43 4.73 - 5.45 percent per annum,

due in 6 months Thai Rung Tools and Dies Co., Ltd. - 50 (50) - 6.00 percent per annum,

due in 2 months Thai Auto Pressparts Co., Ltd. - 15 (15) - 6.00 percent per annum,

due in 2 monthsShort-term loans from subsidiariesShort-term loans from subsidiariesShort-term loans from subsidiariesShort-term loans from subsidiariesShort-term loans from subsidiaries Thai V.P. Auto Service Co., Ltd. 40 39 (79) - 4.73 - 5.45 percent per annum,

due in 3 months Thai Rung Tools and Dies Co., Ltd. - 50 (50) - 2.75 - 3.25 percent per annum,

due in 2 months Thai Auto Pressparts Co., Ltd. 65 - (65) - 1.50 - 2.75 percent per annum,

due in 3 months

Directors and management’s remunerationDirectors and management’s remunerationDirectors and management’s remunerationDirectors and management’s remunerationDirectors and management’s remuneration

In 2006, the Company and subsidiaries paid salaries, meeting allowances and gratuities to their directors and management totalingBaht 29 million (The Company only: Baht 14 million) (2005: Baht 52 million, The Company only: Baht 25 million).

Guarantee obligations with related parties Guarantee obligations with related parties Guarantee obligations with related parties Guarantee obligations with related parties Guarantee obligations with related parties

As at 31 December 2006 and 2005, the Company has outstanding guarantee obligations with subsidiaries as follows.

a) The Company has obligations of Baht 80 million in respect of a guarantee of payment for goods provided to a supplier on behalfof Thai V.P. Auto Service Co., Ltd. (a subsidiary), in order to support on the subsidiary’s business. However, on 31 December2006 and 2005, the subsidiary has no outstanding debt to that supplier.

b) The Company has obligations of the guarantee it provided to a local bank in respect of credit facilities of Thai Ultimate Car Co., Ltd.(a subsidiary) amounting to USD 1.5 million.

c) The Company has obligations of Baht 30 million in respect of a guarantee of loans from a local bank on behalf of Thai V.P. AutoService Co., Ltd. (a subsidiary).

The Company has not charged guarantee fee to its subsidiaries.

59

9. INVENTORIES9. INVENTORIES9. INVENTORIES9. INVENTORIES9. INVENTORIES(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

2006 2005 2006 2005

Finished goods 190,758,763 361,782,777 91,681,351 88,740,543Work in process 67,816,031 96,090,230 28,850,771 39,862,564Raw materials and supplies 161,499,748 347,825,148 93,564,264 326,786,661Total 420,074,542 805,698,155 214,096,386 455,389,768Less: Allowance for diminution in value of inventories (39,057,630) (29,709,210) (13,351,868) (6,194,230)Inventories - net 381,016,912 775,988,945 200,744,518 449,195,538

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY

2006 2005 2006 2005

Accrued income 29,303,918 29,345,634 - 37,101Input tax refundable - 6,696,362 - 3,444,333Input tax suspense 4,403,852 15,745,274 244,290 2,527,948Prepayment 8,849,756 6,348,974 7,325,596 2,825,527Other current assets 4,617,360 4,874,541 3,867,168 3,626,749Total 47,174,886 63,010,785 11,437,054 12,461,658

(Unit: Baht)

Investment as at 31 DecemberInvestment

Company’s name Paid upcapital proportion Cost method Equity method2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

Million Baht Million Baht % %

ConsolidatedConsolidatedConsolidatedConsolidatedConsolidatedAssociated companiesAssociated companiesAssociated companiesAssociated companiesAssociated companiesDelta-TR Co., Ltd. 20 20 46 46 9,200,000 9,200,000 37,010,204 34,578,191 961,400 849,160Thai Auto Conversion Co., Ltd. 75 75 30 30 22,350,000 22,350,000 25,716,904 18,201,410 - -Total 31,550,000 31,550,000 62,727,108 52,779,601

The Company OnlyThe Company OnlyThe Company OnlyThe Company OnlyThe Company OnlySubsidiariesSubsidiariesSubsidiariesSubsidiariesSubsidiariesThai V.P. Auto Service 25 25 94 94 23,500,000 23,500,000 574,153,402 579,368,831 3,290,000 101,520,000 Co., Ltd. and its subsidiariesThai Rung Tools and Dies 27 27 94 94 25,380,000 25,380,000 60,651,228 139,287,366 141,620,400 129,438,000 Co., Ltd.Thai Auto Pressparts Co., Ltd. 400 400 91 91 364,000,000 364,000,000 406,014,269 440,159,935 86,450,000 29,120,000Thai Auto Body Assembly 3 3 91 91 2,730,000 2,730,000 3,006,463 2,964,727 - - Co., Ltd.

415,610,000 415,610,000 1,043,825,362 1,161,780,859

Associated companiesAssociated companiesAssociated companiesAssociated companiesAssociated companiesDelta-TR Co., Ltd. 20 20 46 46 9,200,000 9,200,000 37,010,204 34,578,191 961,400 849,160Thai Auto Conversion Co., Ltd. 75 75 30 30 22,350,000 22,350,000 25,716,904 18,201,410 - -

31,550,000 31,550,000 62,727,108 52,779,601Total 447,160,000 447,160,000 1,106,552,470 1,214,560,460

There represent investments in ordinary shares in the following subsidiary and associated companies.

10. OTHER CURRENT ASSETS10. OTHER CURRENT ASSETS10. OTHER CURRENT ASSETS10. OTHER CURRENT ASSETS10. OTHER CURRENT ASSETS

11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD

Dividend for the yearsended 31 December

60

(Unit: Baht)

CONSOLIDATED

Machinery,Land and Buildings and factory

land building equipment Office Motor Work inimprovement improvement and tools equipment vehicles progress Total

CostCostCostCostCost

31 December 2005 353,319,002 588,820,285 1,467,451,197 179,355,013 95,603,559 171,812,871 2,856,361,927

Acquisition 274,502 1,934,240 37,381,292 10,375,259 11,118,339 53,586,359 114,669,991

Transfer in (out) - 78,298,980 43,190,803 645,000 66,019 (122,200,802) -

Disposals - (242,840) (11,621,447) (4,434,309) (13,388,707) - (29,687,303)

31 December 2006 353,593,504 668,810,665 1,536,401,845 185,940,963 93,399,210 103,198,428 2,941,344,615

AccumulatedAccumulatedAccumulatedAccumulatedAccumulated

depreciation depreciation depreciation depreciation depreciation

31 December 2005 7,345,938 292,840,668 1,168,808,026 151,386,685 74,688,307 - 1,695,069,624

Depreciation for the year 1,487,113 30,301,724 98,631,182 17,442,682 7,608,985 - 155,471,686

Depreciation on disposals - (17,165) (10,879,725) (4,059,996) (11,331,667) - (26,288,553)

31 December 2006 8,833,051 323,125,227 1,256,559,483 164,769,371 70,965,625 - 1,824,252,757

Allowance forAllowance forAllowance forAllowance forAllowance for

impairment loss impairment loss impairment loss impairment loss impairment loss

31 December 2005 - - - - - - -

Increase during the year - - (7,623,031) - - - (7,623,031)

31 December 2006 - - (7,623,031) - - - (7,623,031)

Net book valueNet book valueNet book valueNet book valueNet book value

31 December 2005 345,973,064 295,979,617 298,643,171 27,968,328 20,915,252 171,812,871 1,161,292,303

31 December 2006 344,760,453 345,685,438 272,219,331 21,171,592 22,433,585 103,198,428 1,109,468,827

Depreciation for the yearsDepreciation for the yearsDepreciation for the yearsDepreciation for the yearsDepreciation for the years

2005 (Baht 137 million included in manufacturing cost, and the balance in selling and administrative expenses) 170,154,234

2006 (Baht 114 million included in manufacturing cost, and the balance in selling and administrative expenses) 155,471,686

On 19 April 2005, the Extraordinary Gerneral Meeting of the shareholders of a subsidiary (Thai V.P. Auto Service Co., Ltd.) passeda special resolution to increase its registered share capital from Baht 5 million to Baht 25 million by issuing an additional 200,000shares with a par value of Baht 100 each. The new shares were to be allocated to the existing shareholders in proportion to theirholdings. The subsidiary registered the increase in its share capital with the Ministry of Commerce on 4 May 2005.

In October 2005, Thai V.P. Auto Service Co., Ltd. (a subsidiary) invested Baht 54 million to acquire 90 percent of the registeredcapital of TRU Leasing Co., Ltd., which was established under Thai laws.

12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT

61

(Unit: Baht)

CONSOLIDATED

Machinery,Land and Buildings and factory

land building equipment Office Motor Work inimprovement improvement and tools equipment vehicles progress Total

CostCostCostCostCost31 December 2005 60,805,477 237,095,124 1,316,284,655 86,967,644 65,155,790 54,439,462 1,820,748,152Acquisition - 1,423,853 31,778,127 6,480,546 7,040,226 52,014,067 98,736,819Transfer in (out) - 75,999,137 7,997,825 645,000 66,019 (84,707,981) -Disposals - - (670,796) (119,179) (717,325) - (1,507,300)31 December 2006 60,805,477 314,518,114 1,355,389,811 93,974,011 71,544,710 21,745,548 1,917,977,671AccumulatedAccumulatedAccumulatedAccumulatedAccumulated depreciation depreciation depreciation depreciation depreciation31 December 2005 8,531,036 143,045,248 1,130,303,268 75,831,246 49,394,163 - 1,407,104,961Depreciation for the year 302,015 11,476,407 91,572,619 6,634,708 5,980,023 - 115,965,772Depreciation on disposals - - (670,709) (72,728) (647,393) - (1,390,830)31 December 2006 8,833,051 154,521,655 1,221,205,178 82,393,226 54,726,793 - 1,521,679,903Allowance forAllowance forAllowance forAllowance forAllowance for impairment loss impairment loss impairment loss impairment loss impairment loss31 December 2005 - - - - - - -Increase during the year - - (7,623,031) - - - (7,623,031)31 December 2006 - - (7,623,031) - - - (7,623,031)Net book valueNet book valueNet book valueNet book valueNet book value31 December 2005 52,274,441 94,094,876 185,981,387 11,136,398 15,761,627 54,439,462 413,643,19131 December 2006 51,972,426 159,996,459 126,561,602 11,580,785 16,817,917 21,745,548 388,674,737Depreciation for the yearsDepreciation for the yearsDepreciation for the yearsDepreciation for the yearsDepreciation for the years 2005 (Baht 127 million included in manufacturing cost, and the balance in selling and administrative expenses) 139,314,740 2006 (Baht 103 million included in manufacturing cost, and the balance in selling and administrative expenses) 115,965,772

As at 31 December 2006, certain plant and equipment items have been fully depreciated but are still in use. The original cost of thoseassets amounted to approximately Baht 1,084 million (2005: Baht 1,053 million) (The Company only: Baht 975 million, 2005: Baht872 million).

As at 31 December 2006, a subsidiary’s (Thai Ultimate Car Co., Ltd.) land and building constructed thereon at net book value of Baht72 million (2005: Baht 75 million) have been mortgaged with a bank to secure the subsidiary’s credit facilities of Baht 80 million asgranted by the bank.

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY2006 2005 2006 2005

Cost of land and building leasehold rights 61,612,872 61,462,872 150,000 -Less: Accumulated amortisation (53,252,594) (51,604,293) (125,000) -Net 8,360,278 9,858,579 25,000 -

Amortisation expenses includedin the income statements for the year 1,648,301 1,946,845 125,000 -

13. LAND AND BUILDING LEASEHOLD RIGHTS13. LAND AND BUILDING LEASEHOLD RIGHTS13. LAND AND BUILDING LEASEHOLD RIGHTS13. LAND AND BUILDING LEASEHOLD RIGHTS13. LAND AND BUILDING LEASEHOLD RIGHTS

62

18. WARRANTS18. WARRANTS18. WARRANTS18. WARRANTS18. WARRANTS

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY2006 2005 2006 2005

Withholding tax deducted at source 40,810,101 23,786,034 38,697,070 23,778,371Other non-current assets 14,166,744 15,874,096 13,001,818 15,580,169Total 54,976,845 39,660,130 51,698,888 39,358,540

(Unit: Shares)

Reconciliation of number of issued and paid-up ordinary shares

2006 2005Number of ordinary shares as at 1 January 501,589,497 500,529,497Increase due to exercised warrants - 1,060,000Number of ordinary shares as at 31 December 501,589,497 501,589,497

On 16 July 2004, the Company issued 24,999,000 warrants to subscribe to the Company’s ordinary shares (ESOP 2003), to beallotted to directors, advisors and/or employees of the Company and its subsidiaries at Baht 0 per unit. These 5-year warrants,expiring on 15 July 2009 have an exercise ratio of 1 warrant to 1 new ordinary share and the exercise price is Baht 8 per share. Theexercise periods are as follows: -

- In the first year, no more than 40% of the total warrants any individual received from the Company.

- In the second year, no more than an additional 30% of the total warrants any individual received from the Company.

- After the second year, all remain warrants can be exercised.

The ESOP 2003 warrants are not listed on the Stock Exchange of Thailand.

14. OTHER NON-CURRENT ASSETS14. OTHER NON-CURRENT ASSETS14. OTHER NON-CURRENT ASSETS14. OTHER NON-CURRENT ASSETS14. OTHER NON-CURRENT ASSETS

17. SHARE CAPITAL17. SHARE CAPITAL17. SHARE CAPITAL17. SHARE CAPITAL17. SHARE CAPITAL

Short-term loans from financial institutions as at 31 December 2005 carried interest at rates of 3.50 - 5.45 percent per annum

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY2006 2005 2006 2005

Corporate income tax payable 205,830 1,743,383 - -Output tax suspense 6,106,843 27,028,218 5,298,796 17,230,486Accrued expenses 20,009,818 38,530,785 4,473,709 15,145,495Other current liabilities 31,811,607 70,901,212 15,137,036 33,509,568Total 58,134,098 138,203,598 24,909,541 65,885,549

15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

16. OTHER CURRENT LIABILITIES16. OTHER CURRENT LIABILITIES16. OTHER CURRENT LIABILITIES16. OTHER CURRENT LIABILITIES16. OTHER CURRENT LIABILITIES

63

On 18 December 2003, an Extraordinary General Meeting of the Company’s shareholders approved the allocation of 24,999,000 ofits new ordinary shares to be reserved for the exercise of the warrants.

On 24 April 2006, the Annual General Meeting of the shareholders of the Company approved the amendment of the exercise priceof the warrants to subscribe to the Company’s ordinary shares from Baht 8 per share to Baht 5 per share. The Company alreadyimplemented the procedures stipulated under Notification Gor. Jor. 36/2544 of the Office of the Securities and Exchange Commissionand the Company adjusted the exercise price with effect from June 2006.

Movement of the warrants are as follows: -(Units)

2006 2005

Balance of warrants as at 1 January 23,407,000 24,467,000Warrants exercised during the year - (1,060,000)Balance of warrants as at 31 December 23,407,000 23,407,000

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

As at 31 December 2006, the statutory reserve reaches 10 percent of the Company’s registered capital.

(Unit: Baht)

CONSOLIDATED THE COMPANY ONLY2006 2005 2006 2005

Scrap sales 28,762,334 24,798,369 - -Interest and dividend income 21,744,321 13,225,004 18,677,043 10,805,574Campaign support income 10,028,348 10,293,178 - -Utilities, transportation service and sales of supplies 6,910,884 10,049,322 27,654,294 17,671,931Consulting fee 4,980,000 4,980,000 5,890,000 4,980,000Export subsidies 183,281 - 183,281 -Unrealised gain on changes in value of investments - 1,906,499 - 1,717,803Others 27,393,230 18,895,140 6,585,973 6,831,953Total 100,002,398 84,147,512 58,990,591 42,007,261

CONSOLIDATED THE COMPANY ONLY2006 2005 2006 2005

Number of employees at end of year (persons) 1,464 1,756 853 1,062Employee costs for the year (Thousand Baht) 320,843 354,739 185,345 210,987

19. STATUTORY RESERVE19. STATUTORY RESERVE19. STATUTORY RESERVE19. STATUTORY RESERVE19. STATUTORY RESERVE

20. OTHER INCOME20. OTHER INCOME20. OTHER INCOME20. OTHER INCOME20. OTHER INCOME

21. NUMBER OF EMPLOYEES AND RELATED COSTS21. NUMBER OF EMPLOYEES AND RELATED COSTS21. NUMBER OF EMPLOYEES AND RELATED COSTS21. NUMBER OF EMPLOYEES AND RELATED COSTS21. NUMBER OF EMPLOYEES AND RELATED COSTS

64

Basic earnings (loss) per share is calculated by dividing the net income (loss) for the year by the weighted average number ofordinary shares in issue during the year.

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

Reconciliation between basic earnings (loss) per share and diluted earnings (loss) per share is presented below.

For the years ended 31 December

Weighted averageNet income (loss) number of shares Earnings (loss) per share2006 2005 2006 2005 2006 2005Baht Baht Shares Shares Baht Baht

Basic earnings (loss) per shareBasic earnings (loss) per shareBasic earnings (loss) per shareBasic earnings (loss) per shareBasic earnings (loss) per shareNet income (loss) (26,160,174) 119,782,985 501,589,497 501,496,565 (0.05) 0.24

Effect of dilutive potential ordinary sharesEffect of dilutive potential ordinary sharesEffect of dilutive potential ordinary sharesEffect of dilutive potential ordinary sharesEffect of dilutive potential ordinary sharesWarrants to subscribe to the Company’s ordinaryshares, to be allotted to directors, advisors and/oremployees of the Company and its subsidiaries(ESOP 2003 - 23,407,000 warrants*) - - - -Diluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per shareDiluted earnings (loss) per share

Net income (loss) of ordinary shareholdersassuming the conversion ofdilutive potential ordinary shares (26,160,174) 119,782,985 501,589,497 501,496,565 (0.05) 0.24

* No calculation of diluted earnings (loss) per share is required for the years 2006 and 2005 since the exercise price of the warrantsis in excess of average fair value of the Company’s ordinary shares.

The three subsidiaries were granted investment promotional privileges by the Board of Investment (BOI). Important taxprivileges granted to the companies are summarised below.

Exemption fromExemption from Exemption from 50% reduction of

corporate income corporate income corporate incometax for 3 years tax for 8 years tax rate for 5 years

commencing from commencing from commencing from

TTTTThai Rung Tools and Dies Co., Ltd.hai Rung Tools and Dies Co., Ltd.hai Rung Tools and Dies Co., Ltd.hai Rung Tools and Dies Co., Ltd.hai Rung Tools and Dies Co., Ltd.Manufacture and maintenance of molds and jigs - 15 September 2000 -

Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Thai Auto Pressparts Co., Ltd.Manufacture of metal vehicle body parts, - 3 June 2002 3 June 2010plastic and fiber glass vehicle parts,and the manufacture andmaintenance of molds and jigs

Thai Auto Body Assembly Co., Ltd.Thai Auto Body Assembly Co., Ltd.Thai Auto Body Assembly Co., Ltd.Thai Auto Body Assembly Co., Ltd.Thai Auto Body Assembly Co., Ltd.Manufacture of metal vehicle and truck body parts, The date the promoted -and plastic and fiber glass vehicle parts operations commenced

generating revenues(the subsidiary had no revenuefrom its promoted operations)

22. PROMOTIONAL PRIVILEGES22. PROMOTIONAL PRIVILEGES22. PROMOTIONAL PRIVILEGES22. PROMOTIONAL PRIVILEGES22. PROMOTIONAL PRIVILEGES

23. EARNINGS (LOSS) PER SHARE23. EARNINGS (LOSS) PER SHARE23. EARNINGS (LOSS) PER SHARE23. EARNINGS (LOSS) PER SHARE23. EARNINGS (LOSS) PER SHARE

65

The Company’s and its subsidiaries’ business operations involve three principal segments: (1) car assembly and other related carservices (2) manufacture of equipment for production of car accessories (comprising the manufacture of molds and jigs andmanufacture and sales of car accessories and spare parts) and (3) sales of cars and car service centre business. These operationsare mainly carried on in Thailand. Below is the consolidated financial information for the years ended 31 December 2006 and 2005of the Company and its subsidiaries by segment.

(Unit : Million Baht)

Consolidated financial statements for the years ended 31 December 2006 and 2005

Car assembly and Manufacture of Sales of cars Elimination of other related equipment for production and car service inter-segment car services of car accessories centre revenues Total

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

Revenue from external customers 765 1,078 969 983 569 905 - - 2,303 2,966Intersegment revenues 85 571 34 39 27 40 (146) (650) - -Total revenues 850 1,649 1,003 1,022 596 945 (146) (650) 2,303 2,966Segment income (loss) 122 718 133 65 58 85 (3) (284) 310 584Unallocated income and expenses:

Interest and dividend income 22 13Other income 78 71Selling and administrative expenses (431) (505)Share of income of associated companies 11 (2)Interest expense (4) (9)Corporate income tax (3) (23)Minority interest (9) (9)Net income (loss) (26) 120

Property, plant and equipment 260 215 548 631 355 369 (54) (54) 1,109 1,161Unallocated assets 1,695 2,328Total assets 2,804 3,489

Transfer prices between business segments are as set out in Note 8 to the financial statements.

The Company, its subsidiaries and their employees have jointly established a provident fund in accordance with the Provident FundAct B.E. 2530. The funds are monthly contributed to by employees at the rates of 3-5 percent of their salaries, and by the Companyand its subsidiaries at the rates of 0-100 percent of the employees’ contribution. The fund is managed by BankThai Plc., except thatof a subsidiary (Thai Ultimate Car Co., Ltd.) is managed by Kasikorn Asset Management Co., Ltd. The funds will be paid to theemployees upon termination in accordance with the rules of the funds. During the year 2006, the Company contributed Baht 7 million(2005: Baht 7 million) to the funds.

24. SEGMENT INFORMATION24. SEGMENT INFORMATION24. SEGMENT INFORMATION24. SEGMENT INFORMATION24. SEGMENT INFORMATION

25. PROVIDENT FUND25. PROVIDENT FUND25. PROVIDENT FUND25. PROVIDENT FUND25. PROVIDENT FUND

66

(Unit: Baht)

Total DividendApproved by dividends per share

Final dividends on 2004 income Annual General Meeting of theshareholders on 25 April 2005 300,928,498 0.60

Total for 2005 300,928,498Final dividends on 2005 income Annual General Meeting of the

shareholders on 24 April 2006 50,158,750 0.10Total for 2006 50,158,750

27.127.127.127.127.1 Operating leOperating leOperating leOperating leOperating lease commitmentsase commitmentsase commitmentsase commitmentsase commitments

The Company and its subsidiaries have entered into several lease agreements in respect of the lease of land, office buildingspace, factory building and machineries and equipment. Future minimum rentals payable under these leases as at31 December 2006 are as follows:

Payable withinPayable withinPayable withinPayable withinPayable within Million BahtMillion BahtMillion BahtMillion BahtMillion Baht1 year 672 to 5 years 19

27.227.227.227.227.2 Bank guaranteesBank guaranteesBank guaranteesBank guaranteesBank guarantees

As at 31 December 2006, the Company and its subsidiaries had outstanding bank guarantees of Baht 55 million (2005: Baht123 million) and Baht 24 million for the Company only (2005: Baht 82 million). They were issued by the banks on behalf ofthe Company and its subsidiaries in respect of certain performance bonds as required in the ordinary course of businesses ofthe Company and its subsidiaries.

28.128.128.128.128.1 Financial risk managementFinancial risk managementFinancial risk managementFinancial risk managementFinancial risk management

The Company’s and subsidiaries’ financial instruments, as defined under Thai Accounting Standard No. 48 “FinancialInstruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, current investments, tradeaccounts receivable and payable, short-term loans receivable, investments, and short-term loans payable. The financialrisks associated with these financial instruments and how they are managed is described below.

Credit riskCredit riskCredit riskCredit riskCredit risk

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

26. DIVIDENDS26. DIVIDENDS26. DIVIDENDS26. DIVIDENDS26. DIVIDENDS

27. COMMITMENTS AND CONTINGENT LIABILITIES27. COMMITMENTS AND CONTINGENT LIABILITIES27. COMMITMENTS AND CONTINGENT LIABILITIES27. COMMITMENTS AND CONTINGENT LIABILITIES27. COMMITMENTS AND CONTINGENT LIABILITIES

28. FINANCIAL INSTRUMENTS28. FINANCIAL INSTRUMENTS28. FINANCIAL INSTRUMENTS28. FINANCIAL INSTRUMENTS28. FINANCIAL INSTRUMENTS

Dividends of the Company which were declared in 2006 and 2005 consist of the following:

67

ForeForeForeForeForeign currency riskign currency riskign currency riskign currency riskign currency risk

The Company’s and subsidiaries’ exposures to foreign currency risk arise mainly from trading transactions that aredenominated in foreign currencies. However, the Company and subsidiaries have not entered into any forward contract.

The balances of financial liabilities denominated in foreign currencies as at 31 December 2006 are summarised below.

Financial Average exchange rateForeign currency liabilities as at 31 December 2006

(Baht per 1 foreign currency unit)

USD 1,711 36.2308AUD 747 28.8025GBP 28,490 71.2418MYR 340 10.4992

Fixed interest Non-interestrates bearing Total Interest rates

within 1 year (Million Baht) (Percent per annum)

Financial assetsFinancial assetsFinancial assetsFinancial assetsFinancial assetsCash and cash equivalent 212 309 521 4.75 - 4.91Trade accounts receivable and other receivables - 364 364 -Current investments 235 - 235 4.75 - 4.91Short-term loans to related parties 20 - 20 1.50 - 5.45

467 673 1,140

Financial liabilitiesFinancial liabilitiesFinancial liabilitiesFinancial liabilitiesFinancial liabilitiesTrade accounts payable and other payables - 257 257 -

- 257 257

Interest rate riskInterest rate riskInterest rate riskInterest rate riskInterest rate risk

The Company’ and subsidiaries’ exposures to interest rate risk relate primarily to their cash at banks and short-termborrowings. However, since most of the Company’s and subsidiaries’ financial assets and liabilities bear floating interestrates 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 2006 classified by type of interest rates are summarised in thetable below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturitydate, or the repricing date if this occurs before the maturity date.

68

28.228.228.228.228.2 Fair values of financial instrumentsFair values of financial instrumentsFair values of financial instrumentsFair values of financial instrumentsFair values of financial instruments

Since the majority of the Company’s and subsidiaries’ financial instruments are short-term in nature or bear floating interestrates, their fair value is not expected to be 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 partiesin an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or byusing an appropriate valuation technique, depending on the nature of the instrument.

Certain amounts in the financial statements for the year ended 31 December 2005 have been reclassified to conform to the currentyear’s classifications, with no effect on previously reported net income or shareholders' equity.

These financial statements were authorised for issue by the Company’s Board of Directors on 28 February 2007.

29. RECLASSIFICATION29. RECLASSIFICATION29. RECLASSIFICATION29. RECLASSIFICATION29. RECLASSIFICATION

30. APPROVAL OF FINANCIAL STATEMENTS30. APPROVAL OF FINANCIAL STATEMENTS30. APPROVAL OF FINANCIAL STATEMENTS30. APPROVAL OF FINANCIAL STATEMENTS30. APPROVAL OF FINANCIAL STATEMENTS