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A n n u a l R e p o r t 2 0 0 3

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

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01 ..... Financial Highlights

02 ..... Message from the Chairman

04 ..... Chief Executive Officer Review

06 ..... Key Financial Results

08 ..... Corporate Governance : A Commitment that Results in Accolades

10 ..... Industry Outlook

13 ..... Risk Factors

16 ..... Operational Results

18 ..... Revenue Structure

20 ..... Summary of Major Changes and Developments During the Past Year as well as

Major Current Events

22 ..... Major Shareholders

23 ..... Organization Chart

24 ..... Management Structure

30 ..... Board of Directors and Management

37 ..... Shareholdings of the Board of Directors and Management

38 ..... Remuneration of the Board of Directors and Management

39 ..... Corporate Governance and Supervision on the Use of Internal Information

44 ..... Internal Control

46 ..... Connected Persons and Transactions

49 ..... Management’s Discussion and Analysis of the Consolidated Financial Statements

52 ..... Report of the Audit Committee to Shareholders

53 ..... Audito r’s Report

54 ..... Financial Statements

96 ..... Other References

97 ..... Business Structure of Banpu Group

98 ..... Details of the Company and Its Subsidiary and Associated Companies

Contents

1A n n u a l R e p o r t 2 0 0 3

Remark : Financial figures are based on the consolidated financial statements.

O p e r a t i o n a l R e s u l t s

Sale Revenues (Baht million) 12,482 10,909 5,415

Total Revenues (Baht million) 14,704 11,937 6,875

Cost of Sales (Baht million) 8,878 8,086 4,046

Gross Profit (Baht million) 3,604 2,823 1,369

Selling and Administration Expenses (Baht million) 1,858 1,492 1,081

Royalty Fee (Baht million) 1,252 869 230

Other Expenses (Baht million) 285 19 83

Profit from Operation (Baht million) 2,431 1,472 1,436

Interest Expenses (Baht million) 480 623 491

Net Profit (Baht million) 2,046 835 784

Total Assets (Baht million) 33,993 23,570 15,799

Total Liabilities (Baht million) 11,637 15,263 8,988

Total Shareholders’ Equity (Baht million) 22,355 8,307 6,811

Issued and Paid-up Share Capital (Baht million) 2,703 2,137 2,102

F i n a n c i a l R a t i o s

Gross Profit Margin (%) 28.87 25.88 25.29

Net Profit Margin (%) 13.92 6.99 11.40

Returns on Assets (%) 7.11 4.24 5.12

Returns on Equity (%) 13.35 11.04 10.92

Interest Coverage Ratio (times) 2.80 4.29 4.60

Net Debt to Equity (times) 0.28 1.20 0.95

Earnings per Share (Baht) 7.75 3.93 3.73

Book Value per Share (Baht) 82.71 38.88 32.41

Dividend per Share (Baht) 4.00 2.60 1.60

O p e r a t i o n a l H i g h l i g h t s

Coal Sales - Thai Market (million tonnes) 1.81 3.58 3.20

Coal Sales - International Markets (million tonnes) 11.91 9.18 2.37

F i n a n c i a l H i g h l i g h t s○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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200120022003

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

A n n u a l R e p o r t 2 0 0 3

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

M e s s a g e f r o m t h e C h a i r m a n○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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B a n p u P u b l i c C o m p a n y L i m i t e d0 2

M r . C h i r a P a n u p o n g

C h a i r m a n o f t h e B o a r d o f D i r e c t o r s

3A n n u a l R e p o r t 2 0 0 3A n n u a l R e p o r t 2 0 0 3 0 3

In 2003, Banpu Public Company Limited continued to grow as its two main businesses, namely coal and power, have been

strengthened in line with the company’s strategic plan.

The company’s operational results were good. Sales increased 14 per cent compared to the previous year, attributable mainly to

a 6 per cent increase in coal sales volume and a 7 per cent increase in coal prices. The profit from operations combined with a gain

from restructuring its power business and the divestment of non-core businesses yielded a net profit amounting to Baht 2.046 billion,

or Baht 7.75 per share, up 97 per cent from 2002.

In the coal business, the company expanded markets in the Republic of Korea (South Korea), Taiwan, and several European

countries. Besides investing in coal mines in the People’s Republic of China, the company continued to develop high-quality coal mines in

the Republic of Indonesia. The company will have a greater variety of coal to offer to its clients, thus broadening its market base.

The company has restructured its power business by selling its shares in Tri Energy Company Limited and using the proceeds for

creating better value. In the meantime, BLCP Power Limited, in which the company owns a 50 per cent share, was able to arrange financing

and started the construction of its 1,434-megawatt coal-fired power plant, which is due for full completion in 2007.

Thanks to positive operational results, the restructuring of its power business, and sound financial management, the company’s

finances are in a robust position, with a net debt-to-equity ratio of only 0.28.

Realizing its transition to international operations, the company has improved its management practices by focusing on transparent

management and good corporate governance, personnel development, and improving computerized information systems to enhance

the company’s competitiveness in the global market.

With these four factors, namely the company’s success in developing new coal mines, the expansion of its coal markets, the

favourable conditions in the coal market, and our strong management team, I am confident that the company will enjoy good operational

results next year and for years after, and continue to grow value for the shareholders and all stakeholders into the future.


C h i e f E xe c u t i v e O f f i c e r Re v i ew○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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M r . C h a n i n V o n g k u s o l k i t

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


2003 was yet another step towards transitioning Banpu Public Company Limited to becoming a leading

Asian coal-based energy player. We expanded our market base in Asia and Europe, and invested in coal

business in the People’s Republic of China. Amid increasing competitive environment, the company has

increased its efficiency and productivity while continues to create growth in two core businesses; coal

and power, with its aim to enhance shareholders’ value under good corporate governance framework.

5A n n u a l R e p o r t 2 0 0 3A n n u a l R e p o r t 2 0 0 3 0 5

Building Value in Core Businesses

In 2003, the company’s market capitalization was more than three times what it was at the start of the year. In accordance with the

company’s strategic plan, we have delivered major milestones include : increasing stakes in Indominco coal mine, from a 65 per cent share

to 100 per cent; hiring an international consulting firm to confirm its Coal Reserves and Resources, which were reported at more than 170

million tonnes and 139 million tonnes, respectively; and in September 2003, the company has taken real steps towards developing regional

coal strategy by having an initial investment in the Chinese coal industry. At the same time, BLCP Power Limited, operator of a 1,434-

megawatt coal-fired power plant in which the company holds a 50 per cent share, has successfully completed its project financing of USD

1.1 billion and obtained the first draw-down for the plant’s construction. The plant is scheduled for commercial operation in October 2006.

The company has continued to restructure its asset portfolio so as to focus on its core business. The 37.5 per cent share in Tri Energy

Company Limited was divested to Ratchaburi Electricity Generating Holding Public Company Limited, in which the company holds a 14.99

per cent share. This netted the company Baht 2.1 billion. Other assets and non-core investments were also gradually divested to reinvest

the proceeds in the core business and repay the company’s loans. As a result, the company has successfully strengthened its financial

position to capture future growth opportunities to pay regular dividends to shareholders.

Striving for Profit Growth

The company sold 13.72 million tonnes of coal, compared to 12.76 million tonnes in 2002. Its gross profit margin in 2003 was 29

per cent, an increase of 3 per cent over the previous year. Revenue from the power business, in the form of profit sharing and dividends, also

contributed significantly to the company’s net profit growth. The company aims to grow its profit from core operations especially from

existing mines and new mines namely Trubaindo, which will be in commercial operation at the end of 2004. The planned production is

aimed at around 300,000 tonnes in 2004, then ramping up to 3 million tonnes in 2005 and 5 million tonnes in 2006.

Preparing the Organization toward International Standard

The company has intergrated the organization of marketing, operating and supporting functions in the Republic of Indonesia and

also standardized the job grade system at all levels. In view of the company’s market expansion in Asia and Europe, the company employed

senior executives with experience in marketing and logistics to strengthen the company’s Marketing and Logistics Department, which is

centralized in the Republic of Indonesia. The company also established the Technical Development and Services Department consists

of experts in mining and geology headed by a senior management highly experienced in mining field to bring our operations in

the Republic of Indonesia and the People’s Republic of China up to international mining industry standard.

Managing Business and Financial Risk

Risk management is the key focus area for strengthening business, performance; the company has implemented risk management

policy covering all aspects of inherent risks. Risk analysis and the management of such risks will be carried out in parallel with planning and

budgeting process. Each operation will designate a risk coordinator to work with risk manager from corporate level. Risk Management

Committee has assumed the monitoring role to assure a proper risk management. Besides, the company has regularly managed foreign

exchange and interest rate risks. The company’s cost of debt in 2003 was lower than before as a result of refinancing high interest debt

with Baht debentures of lower-fixed interest rate.

Steering to Becoming an Asian Coal-based Energy Company

With our goal to becoming an Asian coal-based energy player, the company has emphasized on laying foundations and

work practice in marketing, production, finance, human resources, and other supporting units. Asian economic growth demands

an ever-increasing supply of affordable electric power. And this, in turn, necessitates access to cheap and reliable sources of fuel for

power generation. The Asia-Pacific region’s own abundant reserves of thermal coal are likely to provide the main solution to this

requirement. Hence, the company aims to create growth through growing its production from existing operations and developing new

mines in both the Republic of Indonesia and the People’s Republic of China, together with creating value added to power investment

by making it more synergistic with coal mining business. The company is determined to continuously enhancing shareholders’ value while

adhering to the principles of good corporate governance.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

T o t a l A s s e t s

> The company’s total assets as of 31 December 2003 reported at Baht 33,993

million — increased by 44 per cent or Baht 10,423 million compared to the same

period last year. The increase was mainly from cash and cash equivalents and

mark-to-market price of investment in listed company.

T o t a l S h a r e h o l d e r s ’ E q u i t y

> Shareholders’ equity as of 31 December 2003 reported at Baht 22,355 million.

The 169 per cent increase compared to the previous year resulted from conversion

of warrant and employee stock option program of Baht 566 million; surplus on

capital increased of Baht 1,255 million; and mark-to-market of investment in

listed company of Baht 11,203 million.

> In 2003, the company paid dividends of Baht 697 milion at 1.10 and 1.50 Baht

per share in May and September, respectively.

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0 (Mill

ion

Baht

)

01 02 03

33,993

15,799

23,570

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Key F i n a n c i a l R e s u l t s

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

25,000

20,000

15,000

10,000

5,000

0 (Mill

ion

Baht

)

01 02 03

22,355

6,8118,307

N e t D e b t t o E q u i t y

> The company’s total debts as of 31 December 2003 reported at Baht 11,637

million or net debts of Baht 9,441 million. Net debt to equity stood at 0.28x

decreased from 1.20x as of 31 December 2002.

> The decrease of net debt to equity was mainly from loan repayment and

debentures redemption of Baht 6,975 million, together with the increase in

shareholders’ equity higher retained earnings and change in market value of

long-term investment.

1.50

1.00

0.50

0 (Tim

es)

01 02 03

0.28

0.95

1.20

T o t a l R e v e n u e s

> As of 31 December 2003, the company reported the total revenues of Baht

12,482 million, increased 14 per cent or Baht 1,574 million compared to the same

period last year, due to an increase of 6 per cent in coal sales volume and 7 per cent

of average selling price.

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0 (Mill

ion

Baht

)

01 02 03

12,482

5,415

10,909


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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

G r o s s P r o f i t & G r o s s P r o f i t M a r g i n

> The company’s gross profit as of 31 December 2003 recorded at Baht 3,604

million due to an increase in coal sales volume, together with, effective cost

reduction program at Indominco operation. Gross profit margin increased to 29 per

cent from 26 per cent of the same period last year.

E B I T D A

> The company’s 2003 EBITDA reported at Baht 2,262 million, increased by Baht

236 million or 12 per cent compared to that of last year.

4,000

3,000

2,000

1,000

0 (Mill

ion

Baht

)

01 02 03

1,369

2,823

3,604

N e t P r o f i t

> The company’s 2003 net profit was Baht 2,046 million — increased by Baht 1,212

million or 145 per cent compared to the same period last year. The leap in 2003

net profit was attributed to strong coal sales revenue and gain from sale of

investments in Tri Energy Co., Ltd. and Aromatics (Thailand) Plc.

2,500

2,000

1,500

1,000

500

0 (Mill

ion

Baht

)

01 02 03

2,046

784 835

E a r n i n g s p e r S h a r e

> The company’s earnings per share (EPS) as of 31 December 2003 was 7.75 Baht

per share, a 97 per cent increase from the previous year of 3.93 Baht per share.

10.00

8.00

6.00

4.00

2.00

0.00 (Bah

t/sh

are)

01 02 03

7.75

3.73 3.93

GPM

30%

25%

20%

15%

10%

5%

0%

7A n n u a l R e p o r t 2 0 0 3

3,000

2,500

2,000

1,500

1,000

500

0 (Mill

ion

Baht

)

01 02 03

2,262

1,553

2,025

0 7


To determine which business will be a success with great value and promising growth, accounting numbers alone are no

longer enough. The good corporate governance has increasingly played a crucial part in business management in the US and

Europe, especially during 1992-1993, where many US corporate giants woke up to the mess left by widespread abuse of power of

their executives. The concept eventually expanded to other regions including Asia later and has become a widely-recognized framework

that it will help corporate to achieve a sustainable growth.

Banpu Public Company Limited is well aware of this very concept. Starting from our inception up to now, we do our business by

ensure that the interests of all parties are equally taken care of.

In 2002, Banpu responded to the Stock Exchange of Thailand’s intent to promote the principle of corporate governance among

listed companies. The firm went on to set up policies and practices regarding corporate governance and officially implemented it. A Code

of Conduct booklet containing major principles that are in line with the SET’s corporate governance was also published as a guideline for

its executives and employees to comply when dealing with all stakeholders.

In addition, a year later, in 2003, the company’s Board of Directors adjusted its own structure where one-third of the Board’s

members are independent directors. In another word, four out of the 12 directors sitting in the Board are now independent directors.

The company pays attention to the corporate governance principle on a continuous basis, especially with regard to the way it treats

shareholders and stakeholders. To elaborate, the company makes sure all will be accessible to equal rights and treatment. It discloses all

information in a continuous and timely manner to shareholders and stakeholders and actively creates corporate governance awareness to

its management and staff.

The company’s serious pursuing of the corporate governance has turned into sweet reward, which clearly reflects our credibility

and reliability. In 2003, we were honored to receive various awards as follows :

Asia’s Best Companies 2003 : The award, held annually by FinanceAsia, reorganized the company as an outstanding corporate in

four areas as follows :

> The 4th in Most Committed to Shareholder Value

> The 7th in Best Corporate Governance

> The 10th in Best Managed Company

> The 10th in Best Investor Relations

>>C o r p o ra te G ove r n a n c e : A C o m m i t m e n tt h a t Re s u l t s i n Ac c o l a d e s

0 8

9A n n u a l R e p o r t 2 0 0 3

The Board of the Year Award : The prestigious award is a result of an intense collaboration by six agencies; namely, the Thai

Institute of Directors, the Board of Trade, the Federation of Thai Industries, the Association of Thai Bankers, the Association of Listed

Companies and the Stock Exchange of Thailand. The company is one of the eight companies being selected to receive the Board of

the Year Award out of more than 200 listed companies. The award is outstanding in the sense that it reflects our Board of Directors’

commitment to efficiently and knowledgeably perform its duties as a shareholders’ representative and a guardian of their interests.

The SET Award 2003 : The project, a brainchild of the Stock Exchange of Thailand and Banking and Finance Magazine, honors

listed companies, securities companies and asset management companies with management and service excellence. The company is

awarded in two areas as follows.

> Best Corporate Governance Report : The company has been selected as an outstanding listed company for its corporate

governance report based on the SET’s Form 56-1, annual report, invitation letter to the meeting and minutes of shareholders’

meeting.

> Best Performance-Resources : The company is one of the four finalists in this category.

Disclosure Report Award 2003 : Organized by the Securities and Exchange Commission (SEC), the award is bestowed to

the company for its clear and transparent disclosure of corporate information in its disclosure form and the 2002 annual report, which

sets a good example for other listed companies when it comes to annual information and business operation on the basis of good

corporate governance.

The company, the management and all staff will turn the honor we receive during the past year as a motivation to drive us to run

our business even further with corporate governance to ensure, on a final note, that all stakeholder will be equally treated.

0 9

1 0 B a n p u P u b l i c C o m p a n y L i m i t e d

S t e a m C o a l T r a d e i n t h e W o r l d M a r k e t

(Source : Hill & Associates, 2002)

The total volume of steam coal traded in the seaborne

market in 2003 was 416 million tonnes1 – an increase of

24 million tonnes or 6 per cent over 2002. Fifty-nine per cent of

the total imports were accounted for by the Asian market, and

28 per cent by the European market. The remaining 7 and 6

per cent taken up by North America and the Middle East

respectively.

Japan, the Republic of Korea (South Korea) and Taiwan

were again the major importers in the Asian market. They

accounted for imports of 195 million tonnes, or 79 per cent of

the total demand in this market. The growth rate for Japan,

the Republic of Korea (South Korea) and Taiwan was 4.3

per cent – an improvement over previous years due to the

economic recovery.

The volume of imports by the European market

increased by 7.3 per cent to a total 117 million tonnes. This result

was due to a decrease in the domestic supply, and a moderate

increase in exports from the People’s Republic of China last year.

The overall import market in 2003 grew rather well, resulting in

a higher coal price in the market in 2004.

Note : 1 The total seaborne and non-seaborne import volume is

444 million tonnes, or an increase of 21 million tonnes

over the previous year.

TOTAL IMPORT DEMANDfor seaborne coal tradem. Tonnes

600

500

400

300

200

100

0

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source : Barlow Jonker Pty. Ltd.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

IMPORT DEMAND by regionfor seaborne coal tradem. Tonnes

350

300

250

200

150

100

50

0

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010


○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Asia

Europe

America& others

EXPORT SUPPLY TO ASIA MARKETfor seaborne coal tradem. Tonnes

135

115

95

75

55

35

15

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010


○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Australia

Indonesia

China

>>I n d u s t r y O u t l o o k

1 1A n n u a l R e p o r t 2 0 0 3

In 2004, it is expected that the global demand will grow

by a further 11 million tonnes – about 3 per cent higher than 2003.

The increased demand will come mainly from the Asian market.

The European market is expected to be saturated for

the next few years. This is due to projected small increases in

demand, estimated to be only 1 to 2 million tonnes (0.6 per cent)

per year. Demand in the Asian market will continue to increase

over the longer term because of the higher economic growth

rates projected for this market.

Meanwhile, exports from the People’s Republic of

China’s from this year through to 2007 are expected to increase

slightly as domestic demand increases at an average of more than

7 million tonnes per year. These demands, coupled with the

limited supply of coal from South Africa, will have a positive

impact on the coal price for about two years.

The freight rate, which has doubled due to the shortage of

transport ships in the world market, continues to be a positive

factor that enables the Republic of Indonesia to offer more

competitive transportation costs when compared with Australia.

The Republic of Indonesia has much shorter shipping routes to

key markets in the Pacific and Atlantic Oceans.

S t e a m C o a l T r a d e i n T h a i l a n d

(Source : Energy Policy and Planning Office - EPPO)

In 2003, the total consumption of steam coal in Thailand,

including coal produced from the local mines and bituminous

coal imported from overseas, was approximately 26 million

tonnes – an increase of 1 million tonnes or 3.8 per cent over the

previous year. This was driven by increased consumption by

the Electricity Generating Authority of Thailand (EGAT), from

15 million tonnes in 2002 to 16 million tonnes in 2003. EGAT

increased its production of electricity to meet higher energy

demands due to the economic growth of Thailand.

In the private sector – which includes cement production,

power and steam generation, and industries like paper and

tobacco production – the volume of coal consumption remained

close to the previous year’s level of 10 million tonnes. In 2004,

private sector demand is projected to slightly increase due to the

availability of 10 to 15 per cent of unused production capacity in

the cement industry.

EXPORT SUPPLY IN ATLANTICfor seaborne coal tradem. Tonnes

100

90

8070

60

5040

30

2010

0

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

S. Africa

Colombia

Russia &Venezuela

API#4 index 6000 NAR Richards bay

BJ index 6700 GAD NewcastleUSD/tonne - FOB

50.00

45.00

40.00

35.00

30.00

25.00

20.00

Mar

-01

Sep-

01

Mar

-02

Sep-

02

Mar

-03

Sep-

03

Mar

-04

Sep-

04

Mar

-05

Sep-

05

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

API#4 forward price

42.65


E l e c t r i c i t y G e n e r a t i o n B u s i n e s s i n T h a i l a n d

(Source : Power Development Plans 2003, EGAT)

The growth in domestic demand for electricity averaged 8 per cent per year as a result of the economic expansion of Thailand. This

rate was higher than the projected 6 per cent per year that was specified in the EGAT Power Development Plan 2003. It is expected that

the rate of increase in the demand for electricity will remain at 7 to 8 per cent per year if overall economic growth rates continue at the

present levels.

This increase in demand will cause power reserves to be lower than the usual 15 per cent from 2006 onwards, and may affect the

security of supply of the country’s electricity generating system. As a result, an additional increase of approximately 3,000-4,000 megawatts

of electricity must be generated by 2011.

The Ministry of Energy has announced a new structure called Enhanced Single Buyer for the power generation and distribution sector.

Under the new structure, EGAT will be the sole buyer of electricity from various private power producers, and will remain responsible for power

distribution.

A commission will be set up to oversee this new structure, but until then the Ministry of Energy will assume that responsibility. It is also

planned for EGAT, the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA) to be privatized as a listed company in

the Stock Exchange of Thailand.

Under this new structure for the industry, competition in power generation will be managed through a formal bidding process in which

private power producers can participate. The supervising commission will be responsible for the bidding process. Initially it has been specified

that private power producers will help to produce approximately 50 per cent of the additional electricity required. Details and practice will be

specified later on.

The announcement of this new structure makes it clearer that the government still wants to maintain competition in this industry. It will

open opportunities for private power producers to grow along with the increased demand for electricity.

C a l c i u m C a r b o n a t e

Calcium Carbonate is a mineral used widely in industries manufacturing products such as paper, paint, plastic, toothpaste, etc. Major

importers in the Asian region are Japan, the Republic of Korea (South Korea) and Taiwan. As the mineral resources of these countries diminish

each year, they must correspondingly increase their imports every year.

The Socialist Republic of Vietnam is a major exporter with significant mineral resources, and because of its position in the region is nearest

to the market. Therefore, the calcium carbonate industry of the Socialist Republic of Vietnam will still continue to grow – both in the export

and domestic markets. The domestic market shows particularly high potential because the consumption of paper and plastic products per

capita in this country is still very low compared with other markets.

1 3A n n u a l R e p o r t 2 0 0 3

>>R i s k Fa c to r s

1 . F i n a n c i a l r i s k s

1.1 Exchange risk

Since the company has investments, assets and liabilities overseas which may be affected by an exchange risk,

the company has a policy to reduce exchange volatility through a so-called neutral hedging of its foreign-denominated

assets and liabilities both in Thailand and the Republic of Indonesia. The neutral hedging is a risk management method

which neutralizes the group’s foreign exchange positions where appropriate financial instruments are used depending

on cases.

As at 31 December 2003, the company’s most Baht-denominated loans were converted into the US dollar to

achieve an appropriate ratio with its existing assets, resulting in a minimal exchange risk to itself and the subsidiaries.

1.2 Interest risk

The company’s financial status may also be affected from changes of interest rates to its loans. The company has

allocated its fixed- and floating-rated loans in an appropriate ratio that reflects its investments as well as closely monitored

current and future interest trends where certain financial instruments have been put in place to reduce the interest risk,

as the case may be. The company has so far restructured its loans by changing floating-rate loans into fixed-rate loans,

resulting in a ratio of fixed to floating interest rates of 76 per cent and 24 per cent, respectively, which has tremendously

reduced the interest risk to the firm.

In addition, the company has set up the Risk Management Committee which convenes every two months to

mobilize ways and means to help prevent or reduce the company’s business risks including financial risk that may occur.

2 . R i s k s f r o m c o a l b u s i n e s s

2.1 Risk from coal price volatility

As a result of price mechanisms and demands of coal which are more or less dictated by fluctuating demands and

supplies, this has been the company risk in marketing the product. The company has managed this risk by expanding

customer base and satisfactorily achieved the goal so far. The company manages to get purchase deals that expand

throughout the year by taking into consideration appropriate market conditions. In addition, it has already allocated its

short- and long-term agreements in an appropriate ratio to ensure that its marketing plan is maximized.


2.2 Delivery risk

Delivery risk may result from a deviation from quality and quantity of coal set for delivery as well as time of delivery

to the company’s customers. Timely delivery of quality coal in a quantity that has been agreed will definitely satisfy

customers to the most and thus create a chain of trust between the two parties.

The company commits to control its production process and quality of its coal by developing the ISO standard

system and controlling its inventory stock to be readily available to customers in case of emergency both as a supply to

their immediate needs and prevention from any damage that may occur. In addition, the company has also entered into

long-term sales and purchase agreements, which set dates of product delivery in advance so that the firm can plan its

production and delivery more accurately.

3 . R i s k f r o m p o l i t i c a l c h a n g e i n t h e R e p u b l i c o f I n d o n e s i a

The company has established its presence in the coal business in the Republic of Indonesia for quite some times. Being aware of

political risk of the country where it invests, the company has closely monitored the situation. As the Republic of Indonesia is at a stage of

recovering from its economic crisis and the fact that the current administration has stabilized political situation in the country for a certain

extent, this has so far created quite a confidence among foreign investors.

The company has procured protection against the loss of investment, which covers equity, loan and any interest payment that

the company has invested in our subsidiaries in Indonesia. This covers political changes which have a negative effect on the company’s

investment and cause the company’s operation to cease. The asset has procured protection which consist of investment in the following

firms :

1. PT. Centralink Wisesa International (Holding company)

2. PT. Indo Tambangraya Megah (Holding company)

3. PT. Jorong Barutama Greston (Coal producer - Jorong)

4. PT. Trubaindo Coal Mining (Coal producer - Trubaindo)

5. PT. Kitadin (Coal producer - Kitadin)

6. PT. Indominco Mandiri (Coal producer - Indominco)

In addition, the company has a policy to take out additional protection to reflect its increasing investment in the Republic of

Indonesia, if any.

1 5A n n u a l R e p o r t 2 0 0 3

4 . E n v i r o n m e n t r i s k

As open pit mining means a need to open up land surface to take coal out of the earth, this activity definitely affects landscape

environment, water, air and noise quality. Having realized these environmental effects, the company has set up a policy where every

business unit both in Thailand and the Republic of Indonesia must translate it into an environmental mitigation and mine rehabilitation

master plan. Business must be done in a way that fully complies with laws and regulations of every country the company is investing.

The objective of the master plan is to restore the environment into the same condition as much as possible. In both coal and power

business, the company has set up guidelines and has allocated budgets to promote, prevent and fix environmental problems.

In addition, the company has determined certain measures and management procedures to reduce environmental-related risks

in physical and biological terms as follows :

> Recruiting a reputable organization or institution trusted by the public and the authorities to formulate an environmental

mitigation and mine rehabilitation master plan

> Setting up an environmental monitoring program to monitor activities throughout the term of the program

> Initiating environmental investigation of impacts occurred during project operation every time data indicates that something

unusual may happen

> Implementing an environmental audit on an annual basis by both the company’s internal audit office and external auditors from

neutral and reputable organizations

> Implementing the ISO 14001 environmental quality standard in every mine in Thailand and planning to apply the standard to

its overseas mines

> Determining Environmental Performance Indicators to assess its environmental performances

5 . S o c i a l a n d c o m m u n i t y r i s k

Resulting from the company’s assessment of environmental problems, the company realizes that a community’s sustainable

development is one of its goals and priorities. The company has collaborated with local communities to develop and strengthen

community relationship, help building up a good relationship between communities and the government as well as constantly organize

beneficial activities to the communities here and in the Republic of Indonesia by taking into consideration community’s needs to determine

which activities should be held. However, before setting up to do long-term activities, the company realizes that a comprehensive plan

that covers problems and truly reflects local ways of life of a community it is interacting with is an important tool, that is why the company

feels it important to have enough and accurate data first. In the Republic of Indonesia, it has hired a reputable education institute to assess

social conditions of communities surrounding its mining area, which results in a Community Development Manual and a Community

Development Program that will be used as a guideline for community development purpose throughout the program’s lifetime.

In addition, a community’s attitude survey will be conducted as a supplementary measure from time to time.


In 2003, the company was able to generate Baht 12,482 million sales revenue, an increase of Baht 1,574 million or 14 per cent

over the same period last year. The increase came from improved coal sale from Baht 10,617 million to Baht 12,331 million or 16 per cent

increase. The company’s net profit of Baht 2,046 million represented an increase of Baht 1,212 million or 145 per cent over the same period

last year due to realized profits from core business operations and gain from sale of investments in Tri Energy Company Limited and

The Aromatics (Thailand) Public Company Limited.

C o a l B u s i n e s s

> Coal Sale in Thailand

In 2003, the company sold 1.58 million tonnes of coal from its own mines in Thailand, a decrease of 1.44 million tonnes or 48

per cent over the same period last year due to truck weight enforcement which leads to a rise in transportation cost per unit. In addition,

as the price of imported coal declined at the beginning of the year, customers turned to imported coal as substitute for domestic coal.

The company’s market share in domestic coal sale was 45 per cent. The company imported 0.24 million tonnes of coal to Thailand,

a decrease of 0.32 million tonnes over the same period last year.

> Coal Sale in Overseas Markets

In 2003, the company sold 12.15 million tonnes of coal from its mines in the Republic of Indonesia, an increase of 2.41 million

tonnes or 25 per cent over the same period last year. The increase came from 1.70 million tonnes of coal sale from Indominco mine and

0.52 million tonnes from Kitadin mine, delivered to major customer groups in power generating industry in Japan, Taiwan, the Republic

of the Philippines, the Republic of Korea (South Korea), the Republic of India, Hong Kong, and some countries in Europe. Coal from Jorong

mine, sold to customer groups in power and cement industries in countries such as the Republic of India, the Republic of the Philippines and

the Republic of Indonesia, also showed an increase of 0.51 million tonnes.

P o w e r B u s i n e s s

In 2003, the company revised its power business investment plan appropriate to the current situation by selling all of its holding

in ordinary shares of Banpu Gas Power Limited who holds 37.5 per cent of total subscribed shares of Tri Energy Company Limited, to

Ratchaburi Electricity Generating Holding Public Company Limited. The company received a total of Baht 2,100 million from sale of

the mentioned shares.

>>O p e ra t i o n a l Re s u l t s

1 7A n n u a l R e p o r t 2 0 0 3

> BLCP Power Limited

BLCP Power Limited (BLCP) has been selected under EGAT’s first Independent Power Producer scheme (IPP), phase II, to operate

a 1,434 megawatt coal-fired power plant project fuelled by high-quality coal. The plant will be constructed at Map Ta Phut Industrial

Estate in Rayong province. BLCP entered into a Power Purchase Agreement (PPA) since 19 November 1997 with a 25-year tenor beginning

from the date that the plant commences its commercial operation. The power generated will be sold entirely to EGAT.

BLCP received the first loan drawdown from a group of financial institutions on 15 September 2003. The development of the

location has been in progress with soft ground removal and land reclamation along the seashore in order to prepare for the plant

construction in 2003. It is expected that the construction of Phase I will be completed within October 2006 and Phase II by February 2007.

The company has already assigned its executives to take up responsibilities in BLCP.

Banpu currently holds 50 per cent of paid-up capital in BLCP through Banpu Coal Power Limited and Synergy Power Company

Limited at 35 per cent and 15 per cent, respectively. The remaining 50 per cent is held by CLP Power (BLCP) Limited.

> Amata Power (Bien Hoa) Limited

The company is a joint shareholder of Amata Power (Bien Hoa) Limited (APBH), a diesel-fuelled power company located in

an industrial estate of the Socialist Republic of Vietnam and operating with a maximum capacity of 120-megawatts over a period of

49 years. Currently, the development of the Phase I, 20 megawatts, is in progress. The Unit 1.1 and Unit 1.2 generators, each with

6.3-megawatt capacity, have been installed and generating power supply commercially in May 1999 and April 2001, respectively, to

the Electricity of Vietnam (EVN) as well as industrial customers in Long Binh Industrial Park. At present, the company holds a 30 per cent

stake in APBH.

Additionally, the company has been investing in Ratchaburi Electricity Generating Holding Public Company Limited, with 14.99

per cent holding of the paid-up capital as at December 2003.


Sales Revenues

1. Domestic Coal BP 100 773 74.47 1,240 84.70 1,035 48.59

2. Imported Coal BP 100 218 21.00 179 12.24 430 20.18

3. EGAT Overburden Removal Contract BP 100 - - - - 622 29.20

4. Other Revenues BP 100 47 4.53 45 3.06 43 2.03

Total Sales Revenues 1,038 100.00 1,464 100.00 2,129 100.00

Participating Profit (Loss) from Investment

in Associated Companies (Equity Method) 574 452 144

Total Revenues 1,612 1,916 2,273

B a n p u P u b l i c C o m p a n y L i m i t e d (Unit : Million Baht)

2003 2002 2001Products/Services

Revenue % Revenue % Revenue %

Conduct

by

% ofShare-

holding

Sales Revenues - Thailand

1. Domestic Coal BP 100 487 3.90 1,016 9.31 1,035 19.12

SLMM 100 - - 232 2.13 145 2.68

BPI 100 317 2.54 159 1.46 - -

BMC 100 33 0.26 - - - -

CMMC 94, 48 19 0.15 69 0.63 53 0.97

2. Imported Coal BP 100 209 1.67 173 1.58 184 3.39

BMC 100 61 0.49 675 6.19 944 17.42

BPS 100 377 3.02 530 4.85 289 5.33

BPI 100 1,220 9.77 489 4.48 - -

SLMM 100 - - 100 0.92 266 4.91

SLM 100 - - - - - -

3. EGAT Overburden Removal Contract BP 100 - - - - 622 11.48

4. Other Revenues 67 0.54 211 1.94 535 9.88

Total Sales Revenues - Thailand 2,790 22.35 3,655 33.50 4,072 75.18

B a n p u P u b l i c C o m p a n y L i m i t e d a n d I t s S u b s i d i a r i e s (Unit : Million Baht)

>>Reve nu e St r u c t u r eFor the previous 3 years ended 31 December



Conduct

by

% ofShare-

holding

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

1 9A n n u a l R e p o r t 2 0 0 3

Sales Revenues - Overseas

1. Coal - International Trade Indominco 100 6,619 53.03 4,234 38.81 - -

Kitadin 100 1,941 15.55 1,709 15.67 - -

BPS 100 - - - - 325 6.01

BMS 100 - - 210 1.93 - -

Jorong 95 1,048 8.40 1,022 9.37 929 17.16

2. Industrial Minerals 84 0.67 79 0.72 89 1.65

Total Sales Revenues - Overseas 9,692 77.65 7,254 66.50 1,344 24.81

Total Sales Revenues 12,482 100.00 10,909 100.00 5,415 100.00

Participating Profit (Loss) from Investment

in Associated Companies (Equity Method) 574 452 144

Total Revenues 13,056 11,361 5,559

B a n p u P u b l i c C o m p a n y L i m i t e d a n d I t s S u b s i d i a r i e s ( C o n t i n u e d ) (Unit : Million Baht)

Notes : 1. Other revenues includes :

> Topsoil and lignite overburden removal work of Banpu Public Company Limited for the Electricity Generating of Thailand (EGAT)

in which the concession expired on 30 September 2001.

> Industrial minerals under MRD-ECC Company Limited, Mineral Resources Development Company Limited, and Yen Bai Banpu

Calcium Carbonate Company Limited that the company reduced holding in MRD-ECC to 30 per cent of paid-up capital

(On 2 February 2004, the company sold 30 per cent stake in MRD-ECC Co., Ltd. to Ceramics (Thailand) Ltd.

> Port services under Banpu Terminal Company Limited that Banpu Public Company Limited sold shares and transfer its ownership

of Banpu Terminal Company Limited to Nam Yuen Yong Shipping Company Limited.

> Other services

2. The company does not include revenues from power business on its top-line revenues since its investments in power business are

less than 50 per cent.

> Group Business Segregation Policy

The company has a policy to segregate coal production and distribution business. The company and its Thai subsidiaries are

responsible for only domestic coal production and distribution while those in foreign countries handle the production and distribution

abroad. However, some portion of the coal produced overseas has been imported to sell in Thailand through the company and/or its

subsidiaries at the same market prices as traded with general customers.



Conduct

by

% ofShare-

holding


>>Summary of Major Changes and Developments Duringthe Past Year as well as Major Current Events

C o a l B u s i n e s s

> On 20 February 2003, the company increased its investment in PT. Indominco Mandiri, an entity established to operate

coal-mining business in the Republic of Indonesia, from 65 per cent to 99.99 per cent at USD 10.5 million through PT. Indo

Tambangraya Megah.

> Trubaindo mine, one of the company’s sources of quality coal in the Republic of Indonesia, has been in the process of

development to prepare for the commercial production and distribution. It is scheduled to be in operation and will be ready

for distribution to customers in about late 2004.

> On 27 August 2003, BP Overseas Development Company Limited (a subsidiary in which the company holds 100 per cent of

its total subscribed shares) invested in ordinary shares of Asian American Coal Inc. (AACI) at 18.84 per cent of the entire

issued and subscribed shares, totaling USD 13.44 million.

> On 27 January 2004, PT. Indo Tambangraya Megah (a subsidiary in which the company holds 95 per cent of its total

subscribed shares) acquired 16,830 shares or 99 per cent of the total subscribed shares of PT. Bharinto Ekatama from a group

of shareholders. The total amount of USD 12.50 million was paid in this fully settled and delivered acquisition.

P o w e r B u s i n e s s

> Further to the signing by BLCP Power Limited (Banpu holds 50 per cent of its total subscribed shares through Banpu Coal Power

Limited and Synergy Power Company Limited) of a financial agreement on 14 August 2003 specifying preliminary terms and

conditions of approximately USD 1,100 million loan facility provided by a group of financial institutions for the construction

of BLCP power plant, BLCP has submitted all relevant documents under the agreement and made the first drawing from

the group of 17 financial institutions on 15 September 2003.

> Through Banpu Power Limited, the company sold all of its holding in ordinary shares of Banpu Gas Power Limited, a shareholder

of Tri Energy Company Limited with 37.5 per cent of total subscribed shares, to Ratchaburi Electricity Generating Holding

Public Company Limited. The proceeds from the share sale of Baht 2,100 million were paid on 14 November 2003.

> On 5 January 2004, the company entered into a Memorandum of Understanding with the Electricity Generating Authority of

Thailand (EGAT) and CLP Power Projects (Thailand) Ltd. (CLP) with regard to the company’s intention to purchase shares of

Electricity Generating Public Company Limited (EGCOMP) from EGAT, and the company together with its subsidiaries to sell all

of their Ratchaburi Electricity Generating Holding Public Company Limited (RATCH) shares to EGAT. The Board of Directors, on

23 January 2004, and the Shareholders Extraordinary General Meeting 1/2004, on 23 February 2004, have approved in

principle for the company to purchase 131,238,533 shares of EGCOMP from EGAT at Baht 91.8415 per share or approximately

Baht 12,053 million. The Board of Directors and the Shareholders Extraordinary General Meeting have also approved the

company and subsidiaries to sell all of their RATCH shares to EGAT at Baht 43.8589 per share, totaling approximately

217,400,000 shares or Baht 9,535 million. However, external situation has changed beyond the company’s control, thus creating

uncertainty in acquiring both of the aforesaid shares. The company has, therefore, decided to terminate the negotiation with

regard to this share trading on 3 March 2004.

2 1A n n u a l R e p o r t 2 0 0 3

O t h e r s

> On 14 January 2003, warrant holders exercised their rights with 48,253,610 warrant units converted into the company’s

ordinary shares of 52,903,216 shares or 46.05 per cent. In this regard, the company received an amount of Baht 1,635

million (each warrant unit equivalent to 1.05491 ordinary share at Baht 32.116 per share).

> On 3 February 2003, the company issued and made an offer to sell 3,000,000 units of 5-year maturity, senior unsecured,

amortizing debentures in registered form totaling Baht 3,000 million. The debentures, rated “A” by TRIS Rating Company

Limited, carry a fixed interest of 2.95 per cent per annum.

> On 7 February 2003, the company repurchased convertible debentures of PT. Indominco Mandiri for the entire amount of

principal and interest, totaling Baht 1,578 million.

> On 29 April 2003, Mr. Prachuab Trinikorn resigned from the company’s directorship but continues to hold the Secretary of

the Board position. In addition, on 31 July 2003 the Board of Directors meeting resolved that Dr. Kopr Kritayakirana be

appointed a director of the company.

> On 7 May 2003, the company paid out dividend for the year 2003 from retained earnings and operational results of fiscal period

between 1 July 2002 to 31 December 2002 to the shareholders of 264,622,487 shares at Baht 1.10 per share totaling Baht

291,084,735.70. The paid dividend was made entirely from profits of businesses outside investment promotion program.

> On 28 August 2003, the company paid out interim dividend from retained earnings and operational results of six-month period

ended 30 June 2003 to the shareholders of 267,765,795 shares at Baht 1.50 per share totaling 401,648,692.50. The amount of

Baht 160,659,477 dividend payment or Baht 0.60 per share was made from profits of businesses under investment promotion

program, and Baht 240,989,215.50 or Baht 0.90 per share was made from businesses outside investment promotion program.

> On 15 September 2003, the company issued and made an offer to sell Baht 2,000 million of 7-year maturity, senior unsecured,

amortizing debentures in registered form carrying a fixed interest of 3.65 per cent per annum. TRIS Rating Company Limited

has assigned an “A” rating to the debentures.

> According to the resolution of the General Shareholders Meeting passed on 29 October 1998, the company was authorized

to allocate warrants to directors and employees of the company and its subsidiaries under Employee Stock Ownership

Program (ESOP) continuously in a five-year program to provide them with incentives to produce exceptional performance

and sustained growth for the company. All objectives under the said program were achieved. As of 31 December 2003,

warrant (ESOP) holders had exercised such rights for a total number of 5,165,478 units (11,275,635 ordinary shares).

Therefore, the remaining 73,746 unexercised warrant units had expired.

> On 2 February 2004, the company sold through Banpu Minerals Company Limited (a subsidiary, 99.99 per cent owned by

the company) its entire holding of 1,500,000 shares (30 per cent of the total subscribed shares) in MRD-ECC Company Limited

to Imerys Ceramics (Thailand) Limited at Baht 30 million. After the divestment, the company no longer has either direct or

indirect shareholding in MRD-ECC Company Limited.

> On 15 February 2004, the company issued and offered Baht 1,500 million and Baht 500 registered, senior, non-representative

and unsecured debentures to institutional investors with tenors of 6 years 11 months and 5 years 1 month and fixed interest rates

of 4.80 per cent and 4.00 per cent, respectively. Both issues received an “A” rating by TRIS Rating Company Limited.


T e n M a j o r S h a r e h o l d e r s a s o f 1 2 J a n u a r y 2 0 0 4

Major Shareholders Number of Shares Hold Percentage

1. The Vongkusolkit Family and related companies 1/ 59,380,744 22.10

2. Thai NVDR Co., Ltd. 19,597,574 7.25

3. HSBC (Singapore) Nominees Pte. Ltd. 19,430,994 7.19

4. Somers (U.K.) Limited 7,334,477 2.71

5. Deutsche Bank AG, Frankfurt 5,973,602 2.21

6. Chase Nominees Ltd. 4,639,500 1.72

7. Clearstream Nominees Ltd. 3,930,623 1.45

8. State Street Bank and Trust Company 3,825,300 1.42

9. Fortis Global Custody Services N.V. 3,750,000 1.39

10. Pictet & Cie 3,362,550 1.24

Notes : 1/ The Vongkusolkit Family and related companies comprise of Number of Shares Hold Percentage

(1) The Vongkusolkit Family 28,427,308 10.66

(2) TME Capital Co., Ltd. 14,601,400 5.40

The Vongkusolkit Family holds 57.43 per cent of its paid-up capital

(3) Mitr Phol Sugar Corp., Ltd. 8,053,808 2.98


(4) Ufinves Co., Ltd. 2,360,535 0.87


(5) MP Particle Board Co., Ltd. 2,080,965 0.77

United Farmer and Industry Co., Ltd. holds 99.99 per cent of its paid-up capital

(6) United Farmer and Industry Co., Ltd. 1,779,445 0.66

Mitr Phol Sugar Corp., Ltd. holds 87.56 per cent of its paid-up capital

(7) Pacific Sugar Corporation Ltd. 981,905 0.36


(8) Mitr Phu Viang Sugar Co., Ltd. 615,200 0.23


(9) Mitr Kalasin Sugar Co., Ltd. 253,178 0.09


(10) City Holding Co., Ltd. 227,000 0.08


>>M a j o r S h a r e h o l d e r s

2 3A n n u a l R e p o r t 2 0 0 3

>>O rga n i z a t i o n C h a r t○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Board of Directors

Coal Business

>>

>>

Corporate Governance andNomination Committee

Compensation Committee >>

Chief Executive Officer

>>

Chief Operating Officer

>>

>>Business Development

>>Corporate Services

>>

Power Business

○

○

○

○

○

○

○

○

○

○

○

○

>> Audit Department

>> Audit Committee

>>Office of Chief ExecutiveOfficer

As of 25 Februar y 2004 Banpu Publ ic Company L imited

2 3A n n u a l R e p o r t 2 0 0 3


>>M a n a g e m e n t S t r u c t u r e

The company’s management structure as at 25 February 2004 consists of the Board of Directors, three sub-committees; namely,

the Audit Committee, the Corporate Governance and Nomination Committee and the Compensation Committee, and the Management.

( 1 ) T h e B o a r d o f D i r e c t o r s consists of the following persons :

1. Mr. Chira Panupong Chairman of the Board of Directors/

Advisory Chairman to the Management Committee

2. Mr. Soonthorn Vongkusolkit Vice Chairman of the Board of Directors/

Member of the Corporate Governance and Nomination Committee

3. Mr. Somdee Chareonkul Director/Member of the Compensation Committee

4. Mr. Manas Leeviraphan Independent Director/Chairman of the Audit Committee

5. Mr. Vitoon Wongkusolkit Director/Member of the Compensation Committee

6. Mr. Sawatdiparp Kantatham Director/Member of the Corporate Governance and Nomination Committee

7. Ms. Sukon Kanchanalai Independent Director/Member of the Audit Committee/

Chairman of the Compensation Committee

8. Mr. Montri Mongkolswat Independent Director/Member of the Audit Committee/

Member of the Corporate Governance and Nomination Committee/

Member of the Compensation Committee

9. Dr. Kopr Kritayakirana Independent Director/

Chairman of the Corporate Governance and Nomination Committee

10. Mr. Chanin Vongkusolkit Director/Chief Executive Officer

11. Mr. Metee Auapinyakul Director/Executive Officer

12. Mr. Ongart Auapinyakul Director/Executive Officer

Note : Mr. Prachuab Trinikorn is the Secretary of Board of Directors.

Directors with Authority to Sign on Behalf of the Company

Two of the following five : Mr. Somdee Chareonkul, Mr. Vitoon Wongkusolkit, Mr. Chanin Vongkusolkit, Mr. Metee

Auapinyakul, Mr. Ongart Auapinyakul, shall jointly sign together with the company’s seal.

Duties and Responsibilities of the Board of Directors

The Board is accountable to shareholders to do business and supervise the management in order to meet targets

that will promote the best interests of shareholders. The Board is charged to act within best practices of business ethics

by taking into consideration the interests of all stakeholders.

The Board has a duty to strictly comply with the laws, the company’s objectives, the Articles of Association and

resolutions of shareholders’ meeting, by acting in good faith and by taking care of both short-term and long-term interests of

shareholders, including compliance with rules and regulations of the Stock Exchange of Thailand and the Office of the

Securities and Exchange Commission.

2 5A n n u a l R e p o r t 2 0 0 3

In performing duties, the Board will appoint CEO to be responsible for the company’s business and supervise its

management. However, it is the Board’s duties and responsibilities to consider and approve the following.

1. The company’s policy, business strategy, business plan and annual budget

2. Monthly and quarterly performance report in comparison to the company’s plan, budget and trends in

subsequent period of the year

3. Investment worth more than Baht 300 million

4. Investment, which exceeds five per cent of a total investment budget of an approved project and ten per cent of

a total non-project investment budget

5. Purchase and disposal of assets and acquisition and participation in a joint venture project, which is not

conflicting with the Stock Exchange of Thailand’s rules, for an amount that exceeds the CEO’s authority

6. Transaction with material effect to the company’s financial status, liabilities, business strategy and reputation

7. An entering into a contract not related to a normal course of business and a contract related to an important

normal business

8. Parts of related transaction between the company, its subsidiaries or affiliates and related individuals that

do not require resolution of the shareholders’ meeting

9. Any transaction which may cause the company’s Debt-to-Equity Ratio to exceed 2.5 : 1

10. Payment of interim dividend

11. Net borrowing which exceeds a maximum stated in a budget or an estimate

12. Changes in policy and practice with material implication to accounting, risk management and reserves

13. Significant changes in financial control and business operation

14. Determination and review of authorization granted to CEO, EO, COO and Vice Presidents of business units

15. Recruitment of CEO, approval to recruit and employ EO and COO as proposed by the CEO, approval of budget,

salary, bonus or bonus formula and formula to adjust annual remuneration package of senior executives and

employees

16. Appointment and termination of directors and the company Secretary

17. Authorization to Chairman of the Board of Directors, CEO or any director and amendment to the authorization.

18. Appointment and determination of duties of Sub-Committees

19. Establishing and supervising the management on the basis of best corporate governance practices

20. Amendment of approval authority of the Board as stated in 1-19

21. Any action to comply with the laws, the company’s objectives, Articles of Association and resolutions of the

shareholders’ meeting


( 2 ) T h e A u d i t C o m m i t t e e consists of the following persons :

1. Mr. Manas Leeviraphan Chairman of the Audit Committee

2. Ms. Sukon Kanchanalai Member of the Audit Committee

3. Mr. Montri Mongkolswat Member of the Audit Committee

The Audit Committee is delegated a three-year office term, starting on 25 November 2003.

The Audit Committee’s responsibilities are to review the company’s financial statements; assess an adequacy of

an internal control and risk management system and the compliance with relevant laws, rules and regulations; prepare

the Audit Committee’s performance report to the Board of Directors for the Board’s approval or to propose to the

Shareholders Meeting, as the case may be.

Duties and responsibilities of the Audit Committee are as follows :

1. To review the company’s financial statement for its accuracy and adequate

2. To ensure that the company has efficient and proper internal supervisory system and internal auditing system

3. To ensure the company’s compliance with the law on securities and exchange, the Stock Exchange of Thailand’s

terms and requirements and other laws relating to the company’s business

4. To consider, choose, propose for appointment and recommend the auditor’s fee

5. To consider disclosing the company’s information in case there is any related transaction with possible conflicts

of interest to enhance accuracy, transparency, and adequacy

6. To prepare the Audit Committee’s supervisory report, which will be published in the company’s annual report

and must be signed by the Chairman of the Audit Committee

7. To continue reviewing major risk management procedures from what the Risk Management Committee, which

is set up by the management, has done for consistency with the internal control procedures

8. To convey opinions and views regarding the appointment, termination, operating result, budget and personnel

of the Internal Audit Department

9. Review and propose for changes of scopes and duties and responsibilities of the Audit Committee to meet

changing conditions and circumstances

10. To prepare and propose the Audit Committee’s performance report to the Board of Directors at least once a year

11. Perform other work as designed by the Board of Directors upon the Audit Committee’s approval

To ensure that the Audit Committee can efficiently perform their tasks, it shall :

1. Be empowered to invite or order the Management or supervising staff to attend meeting for clarification purpose

or to submit relevant documents

2. Hire consultants or spend otherwise in relation to its performance in which the company responsible for expenses

2 7A n n u a l R e p o r t 2 0 0 3

( 3 ) T h e C o r p o r a t e G o v e r n a n c e a n d N o m i n a t i o n C o m m i t t e e consists of the following persons :

1. Dr. Kopr Kritayakirana Chairman of the Corporate Governance and Nomination Committee

2. Mr. Soonthorn Vongkusolkit Member of the Corporate Governance and Nomination Committee

3. Mr. Montri Mongkolswat Member of the Corporate Governance and Nomination Committee

4. Mr. Sawatdiparp Kantatham Member of the Corporate Governance and Nomination Committee

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

25 February 2004.

As it name suggests, the Corporate Governance and Nomination Committee has two major roles : to consider policy

and practices of corporate governance and business ethics plus monitoring compliance within the framework; and to recruit

and select personnel as directors, Chief Executive Officer and Executive Officers. The Committee also reviews a succession

plan to look for appropriate personnel who will fill up senior management positions (starting from Department Vice

Presidents and over) before reporting to the Board of Directors for approval or for proposing to the Shareholders’ Meeting,

as the case may be.

Duties and Responsibilites of the Corporate Governance and Nomination Committee are as follows :

1. To consider and review whether the corporate governance policy and practices are appropriate and adequate;

to update the policy on an ongoing basis

2. To monitor and supervise an implementation of the corporate governance policy by directors and employees

to ensure that they are consistent with the policy and practices drafted by the Board; to provide a channel

for stakeholders to file grievances about corporate governance or business ethics

3. To review structure and components of the Board of Directors; to monitor the term of office of directors,

Chief Executive Officer and Executive Officers; to prepare succession plan of senior executive members

(starting from Department Vice Presidents and over)

4. To recruit and select persons as directors, Chief Executive Officer and Executive Officers when the term is due

or whenever there is a vacancy

5. To recommend assessment procedures of directors and the Board of Directors to the Board of Directors; to

participate in such assessment and monitor solutions implemented after such assessment

6. To review and propose updates of scopes, duties and responsibilities of the Corporate Governance and

Nomination Committee to reflect prevailing circumstances

7. To prepare an operating report and submit it to the Board of Directors at least once a year

8. To do any other things as designated by the Board of Directors

To ensure that the Corporate Governance and Nomination Committee can work efficiently, it shall :





( 4 ) T h e C o m p e n s a t i o n C o m m i t t e e consists of the following persons :

1. Ms. Sukon Kanchanalai Chairman of the Compensation Committee

2. Mr. Vitoon Wongkusolkit Member of the Compensation Committee

3. Mr. Somdee Chareonkul Member of the Compensation Committee

4. Mr. Montri Mongkolswat Member of the Compensation Committee

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

The Compensation Committee’s responsibilities are to convey opinions and views regarding compensation

management to the Board of Directors for their approval or proposing to the Shareholders Meeting, as the case may be.

Duties and Responsibilities of the Compensation Committee are as follows :

1. To recommend ways and means of paying compensations and other fringe benefits to the Board of Directors

and other sub-committees appointed by the Board of Directors

2. To consider and recommend any other compensation by taking duties and responsibilities of Chief Executive

Officer and Executive Officers into consideration and by reviewing assessment rules of work performance to

determine annual compensations

3. To review compensation structures and rules as stated in 1 and 2 so that they suit corporate duties and

responsibilities, operating results and market conditions at the time

4. To overview corporate budgets in general regarding salary increase and annual bonus, as well as any other

fringe benefits for its employees

5. To review and propose updates of scopes, duties and responsibilities of the Compensation Committee to reflect

prevailing circumstances

6. To prepare an operating report and submit it to the Board of Directors at least once a year

7. To do any other things as designated by the Board of Directors

To ensure that the Compensation Committee can efficiently perform its job, it shall :




( 5 ) T h e M a n a g e m e n t consists of the following persons :

1. Mr. Chanin Vongkusolkit Chief Executive Officer

2. Mr. Rawi Corsiri Chief Operating Officer/

Acting Group Senior Vice President Coal and Power Business

3. Mr. Prachuab Trinikorn Group Senior Vice President - Corporate Services

4. Mr. Chanchai Jivacate Group Senior Vice President - Business Development

5. Ms. Somruedee Chaimongkol Senior Vice President - Finance

Note : Mr. Nitikorn Tantitham was appointed the President of BLCP Power Limited, therefore no longer in the position of President

of Banpu Power Limited, since 14 November 2003.

2 9A n n u a l R e p o r t 2 0 0 3

Recruitment of Directors and Senior Executives

The four-member Corporate Governance and Nomination Committee has a duty to recruit and select the company’s

Chief Executive Officer and Executive Officers; monitor succession plan to find a right person as members of senior executives

(from Department Vice President and over) and report it to the Board of Directors for approval or for submission to the

Shareholders’ Meeting, as the case may be.

Duties and Authority of Chief Executive Officer

1. Review and adjust annual operation plans not exceeding Baht 100 million

2. Screen and propose annual salary adjustment, staff’s bonus budget and major welfare offered to staff at level 11 and 12

3. Review, approve and sign sales agreements having terms of more than three years

4. Consider and make decisions to sell property in any cases without value limitation

5. Consider and make decisions to buy property worth less than Baht 100 million per transaction or project, as the case may be,

in compliance with the laws

6. Review and make investment decisions in other businesses, joint ventures, new company set-up, investment in common

shares, sales of investment and any contract not exceeding Baht 300 million per transaction or project, as the case may be

7. Review and approve a signing of currency hedging contracts as well as sales or purchase of currency forward contracts

8. Review and approve sales of the following assets : (1) inventory worth less than Baht 20 million; (2) spare parts not exceeding

Baht 10 million and (3) sales of machinery and equipment worth less than Baht 50 million

Note : The Annual General Shareholders’ Meeting on 29 October 1998 resolved to allow the ESOP Allocation Committee to

allocate warrants to the directors and employees of the company and subsidiary companies on a continuous basis under

the so-called Employees Stock Ownership Program (ESOP). The allocation was based on the extent of responsibilities

and performance results of each director and employee. The ESOP Allocation Committee consists of the following persons :

1. Mr. Somdee Chareonkul Chairman of the ESOP Allocation Committee

2. Mr. Sawatdiparp Kantatham Member of the ESOP Allocation Committee

3. Mr. Chanin Vongkusolkit Member of the ESOP Allocation Committee

The ESOP Allocation Committee’s tenure ended when the program completed in 2003.


>>B o a rd o f D i r e c to r s a n d M a n a g e m e n t

Organization

Work experience in the last five yearsName/Position EducationAge

%

share

held Period Position

1. Mr. Chira Panupong 72 > M.Sc. (Economics), School of 0.25 2001-Present Chairman of the Board Banpu Public Company Limited

> Chairman Economics and Political Science of Directors/Advisory

> Advisory Chairman University of London, England Chairman to the

to the Management > B.Com. (Accountancy), Management Committee

Committee Hons : University of Leeds 1997-Present Director BLCP Power Limited

> B.Law, Thammasat University Director Banpu Coal Power Limited

> Industrial Project Evaluation Director Banpu Power Limited

Course, Economic Development 1992-Present Vice Chairman TUNTEX (Thailand) Public Company Limited

Institute, IBRD. 1997-2003 Director Banpu Gas Power Limited

> National Defence College (Class 20) 1996-2003 Chairman Tri Energy Company Limited

> I.O.D. Chairman 2000 Program,

Thai Institute of Directors

Association

2. Mr. Soonthorn 65 > Mattayomsuksa 0.94 February Member of the Banpu Public Company Limited

Vongkusolkit > I.O.D. Chairman 2000 Program, 2004-Present Corporate Governance

> Vice Chairman Thai Institute of Directors and Nomination

> Member of the Corporate Association Committee

Governance and > Modern Managers Program 2002-Present Chairman United Standard Terminal Public Company Limited

Nomination Committee (MMP), Chulalongkorn University 1983-Present Vice Chairman Banpu Public Company Limited

* An older brother of persons 1978-Present Chairman Ufinves Company Limited

number 5 and 10 1974-Present Chairman Mitr Phol Group

3. Mr. Somdee Chareonkul 72 > M.P.A. (Public Administration), 0.05 2001-Present Member of the Banpu Public Company Limited

> Director University of Pittsburgh, U.S.A. Compensation

> Advisor > M.S., University of Southern Committee

> Member of the California, U.S.A. 1997-Present Director Thai Charoen Insurance Public Company Limited

Compensation > B.Com. & B.Acct., 1992-Present Director/Advisor Banpu Public Company Limited

Committee Thammasat University 2001-February Member of the Banpu Public Company Limited

> National Defence College (23) 2004 Nomination Committee

1998-2003 Chairman of the ESOP Banpu Public Company Limited

Allocation Committee

Extra Activities Director National Research Council

(Political Science and Public Administration)

Civil Service Ministry of Science and Technology

Sub-Commissioner

(Expert on Personnel)

Advisor Committee on Natural Resources

and Environment, House of Representatives

Senior Volunteer Office of the National Economic

and Social Development Board

Alumni Think Thank National Defence College

3 1A n n u a l R e p o r t 2 0 0 3

4. Mr. Manas Leeviraphan 70 > M.A. Public (Finance), University of - 2000-Present Chairman, State Auditor Ministry of Foreign Affairs

> Independent Director California, Berkeley, U.S.A. Committee

> Chairman of > B.Com. (Economics), 1994-Present Chairman Sarin Property Company Limited

the Audit Committee McGill University, Canada Chairman Saha Patana Inter-Holding Public Company Limited

> I.O.D. Chairman 2000 Program, Independent Director/ Banpu Public Company Limited

Thai Institute of Directors Chairman of

Association the Audit Committee

Independent Director/ United Communication Industry

Chairman of Public Company Limited

the Audit Committee

Director/Chairman of Bangkok Airport Fuel Service

the Audit Committee Public Company Limited

5. Mr. Vitoon Wongkusolkit 62 > B.Sc. (Pharmacology), 1.61 2001-Present Member of the Banpu Public Company Limited

> Director Chulalongkorn University Compensation Committee

> Member of > I.O.D. Directors Certification 1996-Present Director Banpu Power Limited

the Compensation Program, Thai Institute of 1990-Present Chairman Makkasan Real Estate Company Limited

Committee Directors Association 1988-Present Chairman United Securities Public Company Limited

* A younger brother of person > Senior Executive Program 6, 1987-Present Chairman of Amarin Plaza Public Company Limited

number 2 Sasin Graduate Institute the Management

* An older brother of person of Business Administration Committee

number 10 of Chulalongkorn University 1983-Present Director Banpu Public Company Limited

1974-Present Director Mitr Phol Group

2001-February Member of Banpu Public Company Limited

2004 the Nomination

Committee

Organization


%

share



Organization


%

share


6. Mr. Sawatdiparp 64 > B.A. (Economics), Hanover College, 0.32 2001-Present Member of the Corporate Banpu Public Company Limited

Kantatham Indiana, U.S.A. Governance and

> Director > Program on Investment Appraisal Nomination Committee

> Member of and Management, Harvard 2000-Present Senator The Senate

the Corporate University Graduate School of 1983-Present Director Banpu Public Company Limited

Governance and Business Administration, 2001-February Member of Banpu Public Company Limited

Nomination Massachusetts, U.S.A. 2004 the Compensation

Committee > National Defence Colleage Committee

(Class 35) 1998-2003 Member of the ESOP Banpu Public Company Limited

> I.O.D. Directors Certification Allocation Committee

Program, Thai Institute of 1998-1999 Budget Director The Bureau of the Budget,

Directors Association (Executive, Level 11) Office of the Prime Minister

7. Ms. Sukon Kanchanalai 71 > Advanced Study Graduate School 0.03 February 2004- Chairman of Banpu Public Company Limited

> Independent Director of Accounting, Wharton School of Present the Compensation

> Member of Finance, University of Pennsylvania Committee

the Audit Committee Philadelphia, U.S.A. 1997-Present Independent Director/ Banpu Public Company Limited

> Chairman of > B.Accounting, Member of

the Compensation Chulalongkorn University the Audit Committee

Committee > Certificate in Export Promotion 1991-Present Law Councilor Office of the Council of State

and International Marketing, 2001-February Chairman of Banpu Public Company Limited

The International Trade Center 2004 the Nomination

UNCTAD/GATT, Geneva Committee/Member of

> Certificate in Organization and the Compensation

Management Methods, University Committee

of Southern California, U.S.A.

> National Defence College

(Class 27)

> I.O.D. Directors Certification

Program, Thai Institute of

Directors Association

3 3A n n u a l R e p o r t 2 0 0 3

8. Mr. Montri Mongkolswat 60 > B.A. (Commerce), 0.002 Present Director/Member of The Aromatics (Thailand) Public Company Limited

> Independent Director Thammasat University the Audit Committee

> Member of > B.A. (Accountancy), Director/Advisor to The Deves Insurance Public Company Limited

the Audit Committee Thammasat University the Executive Committee

> Member of > National Defence College Director Erawan Hotel Public Company Limited

the Corporate (Class 355) Chairman Saensuratana Company Limited

Governance and > Certified Public Accountant, Director The Syndicate of Thai Hotel & Tourists

Nomination Committee Thailand Registration No. 2004, Enterprises Limited

> Member of The Institute of Certified February 2004- Member of the Corporate Banpu Public Company Limited

the Compensation Accountants and Auditors Present Governance and

Committee of Thailand Nomination Committee/

> I.O.D. Chairman 2000 Program, Member of the

Thai Institute of Directors Compensation Committee

Association 2000-Present Independent Director/ Banpu Public Company Limited

Member of the Audit

Committee

2001-February Member of the Banpu Public Company Limited

2004 Nomination Committee/

Chairman of the

Compensation Committee

9. Dr. Kopr Kritayakirana 64 > B.Sc. (Physics), - 2003-Present Independent Director Banpu Public Company Limited

> Independent Director Chulalongkorn University Present Director Thai Reinsurance Public Company Limited

> Ph.D. (Physics), Harvard University, Director Siam Panich Leasing Public Company Limited

U.S.A. Director Sicco Securities Public Company Limited

Member, Council of Chulalongkorn University

Chulalongkorn University

Member, Council of NIDA National Institute of Development Administration

(NIDA)

Member, Council of Asian Institute of Technology (AIT)

Trustees and Executive

Board

Member, Council of TDRI Thailand Development Research Institute (TDRI)

Organization


%

share



10. Mr. Chanin Vongkusolkit 51 > M.B.A. (Finance), St. Louis 0.73 2003-Present Director Board of Investment

> Director University, Missouri, U.S.A. Director Ratchaburi Electricity Generating Holding

> Chief Executive Officer > B.Economics, Public Company Limited

* A younger brother Thammasat University 2001-Present Director Banpu Rayong Power Limited

of persons number 2 and 5 > I.O.D. Directors Certification 2000-Present Director Amata Power (Bien Hoa) Limited

Program, Thai Institute of Director Banpu Power Vietnam I Pte. Ltd.

Directors Association Director Banpu Power International Ltd.

1997-Present Director BLCP Power Limited

Director Banpu Coal Power Limited

1996-Present Director Banpu Power Limited

1993-Present Director/Chief Executive Banpu Public Company Limited

Officer

1990-Present Director United Securities Public Company Limited

1988-Present Director Promsin Company Limited

1986-Present Director United Standard Terminal Public Company Limited

1984-Present Director Royal and Sun Alliance Insurance (Thailand) Limited

1983-Present Director Mitr Phol Group

1998-2003 Member of the ESOP Banpu Public Company Limited

Allocation Committee

11. Mr. Metee Auapinyakul 50 > B.SC. (Management), St. Louis 0.15 2003-Present Member of the Customer Thai Airways International Public Company Limited

> Director University, Missouri, U.S.A. Services Quality Assurance

> Executive Officer > Infrastructure for the Market Committee

* An older brother of person Economy, Harvard University National Science Ministry of Science and Technology

number 12 John F. Kenedy School of and Technology

Government, Boston, U.S.A. Development Board

> National Defence College 2001-Present Director Metropolitan Electricity Authority

(Class 377) Sub-Committee for National Safety of Thailand

> National Defence College, Public Relations

College of Management, Advisor Academic Committee, National Defence College

Mahidol University Specialist Energy Committee, House of Representatives

(Mini MMM Class 1) 2000-Present Director Banpu Minerals (Singapore) Pte. Ltd.

1988-Present Director Promsin Company Limited

1984-Present Director Royal and Sun Alliance Insurance (Thailand) Limited

1983-Present Director/ Banpu Public Company Limited

Executive Officer

Organization


%

share


3 5A n n u a l R e p o r t 2 0 0 3

12. Mr. Ongart Auapinyakul 47 > B.S. (Mechanical Engineering), 0.29 2003-Present Director Asian American Coal, Inc.

> Director University of Missouri, Columbia, 2000-Present Director Shanxi Asian Ameican-Daning Energy Co., Ltd.

> Executive Officer U.S.A. 1996-Present Director Banpu Minerals (Singapore) Pte. Ltd.

* An younger brother > Senior Executive Program 3 1990-Present Director Banpu Singapore Pte. Ltd.

of person number 11 Sasin Graduate Institute Present Director/Executive Officer Banpu Public Company Limited

of Business Administration of Director Ban-Sa Mining Company Limited

Chulalongkorn University Director Chiang Muan Mining Company Limited

> National Defence College Director Universal Exploration Company Limited

(Class 4414)

> I.O.D. Directors Certification

Program, Thai Institute

of Directors Association

13. Mr. Rawi Corsiri 53 > M.B.A., Sasin Graduate Institute 0.15 2001-Present Chief Operating Officer Banpu Public Company Limited

> Chief Operating Officer of Business Administration of Director/President Banpu Minerals Company Limited

Chulalongkorn University Director Banpu Singapore Pte. Ltd.

> B.Sc., Chulalongkorn University Director Banpu Power Limited

Director Banpu Coal Power Limited

Director Banpu Power Vietnam I Pte. Ltd.

Director Banpu Power International Limited

Director Banpu Rayong Power Limited

Director BLCP Power Limited

Present Director Banpu International Limited

Director Edifice Engineering Company Limited

Director Silamani Corp., Ltd.

Director Silamani Marble Company Limited

Organization


%

share



14. Mr. Prachuab Trinikorn 58 > M.B.A. (Controllership), St. John’s 0.08 1990-Present Group Senior Banpu Public Company Limited

> Group Senior University, New York, U.S.A. Vice President –

Vice President – > B.A. (Economics), Corporate Services

Corporate Services Fordham University, New York, Present Director Banpu Minerals Company Limited

U.S.A. Director Banpu Singapore Pte. Ltd.

Director Banpu International Limited

Director Banpu Minerals (Singapore) Pte. Ltd.

Director Ban-Sa Mining Company Limited

Director Chiang Muan Mining Company Limited

Director Edifice Engineering Company Limited

Director Promsin Company Limited

Director Silamani Corp., Ltd.

Director Silamani Marble Company Limited

Director Universal Exploration Company Limited

Director Yen Bai Banpu Calcium Carbonate Co., Ltd.

15. Mr. Chanchai Jivacate 57 > Master Degree in Engineering, 0.03 2002-Present Director The Aromatics (Thailand) Public Company Limited

> Group Senior Mechanical, Lamar University, 2001-Present Group Senior Banpu Public Company Limited

Vice President – Texas, U.S.A. Vice President –

Business Development > B.Engineering (Mechanical), Corporate Services

Chulalongkorn University Director Banpu Power Limited

> I.O.D. Directors Certification Director Banpu Coal Power Limited

Program, Thai Institute of Director BLCP Power Limited

Directors Association

16. Ms. Somruedee 42 > M.B.A., IN A NUTSHELL 0.08 2001-Present Senior Vice President – Banpu Public Company Limited

Chaimongkol The Coronet Consulting Group, Finance

> Senior Vice President – New York, U.S.A. Present Director Banpu Singapore Pte. Ltd.

Finance > B.Sc. (Accounting), Director Banpu Minerals Company Limited

Bangkok University Director Banpu International Limited

> Program for Global Leadership, Director Edifice Engineering Company Limited

Harvard University Graduate Director Silamani Corp., Ltd.

School of Business Administration, Director Silamani Marble Company Limited

Boston, U.S.A.

> General Management, Graduate

Institute of Business Administration

of Chulalongkorn University

Organization


%

share


3 7A n n u a l R e p o r t 2 0 0 3

ESOP (Units)

Name 31 December

2003

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

+ / (-)

Ordinary Share (Units)

1. Mr. Chira Panupong 669,185 452,623 216,562 - 75,000 (75,000)

2. Mr. Soonthorn Vongkusolkit 2,543,296 2,580,696 (37,400) - 85,000 (85,000)

3. Mr. Somdee Chareonkul 141,845 123,208 18,637 - 21,000 (21,000)

4. Mr. Manas Leeviraphan - - - - 18,000 (18,000)

5. Mr. Vitoon Wongkusolkit 4,350,911 4,387,827 (36,916) - 49,000 (49,000)

6. Mr. Sawatdiparp Kantatham 876,755 916,250 (39,495) - 30,000 (30,000)

7. Ms. Sukon Kanchanalai 86,707 26,202 60,505 - 30,000 (30,000)

8. Mr. Montri Mongkolswat 6,550 - 6,550 - 9,000 (9,000)

9. Dr. Kopr Kritayakirana - - - - - -

10. Mr. Chanin Vongkusolkit 1,980,371 1,344,149 636,222 - 250,000 (250,000)

11. Mr. Metee Auapinyakul 400,467 580,374 (179,907) - 55,000 (55,000)

12. Mr. Ongart Auapinyakul 802,532 664,593 137,939 - 125,000 (125,000)

13. Mr. Rawi Corsiri 414,669 172,082 242,587 - 375,000 (375,000)

14. Mr. Prachuab Trinikorn 202,599 157,903 44,696 - 50,000 (50,000)

15. Mr. Chanchai Jivacate 90,000 109,176 (19,176) - 50,000 (50,000)

16. Ms. Somruedee Chaimongkol 212,628 92,536 120,092 - 40,000 (40,000)

>>S h a r e h o l d i n g s o f t h e B o a rdo f D i r e c to r s a n d M a n a g e m e n tAs of 31 December 2003

31 December

2002

31 December

2003 + / (-)

31 December

2002


1. Remuneration in Cash for the Year Ending 31 December 2003

1.1 Remuneration in cash for 12 Board members in the forms of meeting allowance and gratuity was Baht 13.26 million,

which details are as follows.

Name Position

1. Mr. Chira Panupong Chairman/Chairman to the Management Committee 1,264,500

2. Mr. Soonthorn Vongkusolkit Vice Chairman 1,056,000

3. Mr. Somdee Chareonkul Director/Member of the Nomination Committee/Member of 1,119,000

the Compensation Committee/Chairman of the ESOP Allocation Committee

4. Mr. Manas Leeviraphan Independent Director/Chairman of the Audit Committee 1,150,000

5. Mr. Vitoon Wongkusolkit Director/Member of the Nomination Committee/ 1,079,000

Member of the Compensation Committee

6. Mr. Sawatdiparp Kantatham Director/Member of the Nomination Committee/Member of 1,084,000

the Compensation Committee/Member of the ESOP Allocation Committee

7. Ms. Sukon Kanchanalai Independent Director/Member of the Audit Committee/Chairman of 1,313,500

the Nomination Committee/Member of the Compensation Committee

8. Mr. Montri Mongkolswat Independent Director/Member of the Audit Committee/Member of 1,310,500

the Nomination Committee/Chairman of the Compensation Committee

9. Dr. Kopr Kritayakirana Independent Director 180,000

10. Mr. Chanin Vongkusolkit Director/Member of the ESOP Allocation Committee 1,000,000

11. Mr. Metee Auapinyakul Director 960,000

12. Mr. Ongart Auapinyakul Director 1,020,000

* Mr. Prachuab Trinikorn Secretary of the Board of Directors 720,000

1.2 Remuneration in cash for 6 management, salary and bonus, was totaling Baht 38.10 million.

2. Other Remuneration

2.1 Provident Fund

For the year ending 31 December 2003, the company contributed provident fund for 6 managements in total

amount of Baht 1.13 million.

2.2 Employee Stock Ownership Program (ESOP)

The Annual General Meeting on 28 April 2003 approved the allocation of non-transferable warrants (ESOP) to

Mr. Rawi Corsiri (30,000 units) and Mr. Prachuab Trinikorn (30,000 units). (Details are stated in “Shareholding of the Board

of Directors and Management” on page 37.)

Note : The Board of Directors meeting on 31 July 2003 resolved an appointment of Mr. Kopr Kritayakirana as a director of the company in place

of Mr. Prachuab Trinikorn who resigned from the Board of Directors since 29 April 2003. Mr. Prachuab Trinikorn remains his position as

the Secretary of the Board of Directors.

>>Re m u n e ra t i o n o f t h e B o a rd o f D i r e c to r sa n d M a n a g e m e n t

Total Remuneration(Baht/year)

3 9A n n u a l R e p o r t 2 0 0 3

>>C o r p o ra te G ove r n a n c e a n d S u p e r v i s i o no n t h e U s e o f I n te r n a l I n fo r m a t i o n

C o r p o r a t e G o v e r n a n c e

1. Corporate Governance Policy

The Board of Directors is aware of the importance of good corporate governance and has determined a policy and practices

regarding this subject matter that has already been implemented since 2002. The policy is in line with 15 clauses of main principles of

good corporate governance set by the Stock Exchange of Thailand; namely, the Board of Directors; rights and equitable treatment of

shareholders; policy towards stakeholders; information disclosure and transparency; internal control and risk management; conflicts of

interest and business ethics. The Board of Directors ensures that its directors, the Management and staff strictly comply with the policy and

practices. In addition, the Board of Directors also requires that they be constantly reviewed to be consistent with changing circumstances

and to correspond with expectations of shareholders and stakeholders.

2. Shareholders : Rights and Equitable Treatment

The Board of Directors has a policy to treat all shareholders on an equal basis. Shareholders have the same fundamental rights

including rights to receive share certificates, transfer shares, attend and vote at shareholders’ meetings to change the company’s important

policies as well as matters that the Board of Directors must seek shareholders’ approval and rights to elect and remove directors and to

share profits. At a shareholders’ meeting, the Board of Directors will facilitate shareholders in terms of meeting dates and times, meeting

location, submission of adequate information in a timely manner and encourage shareholders to attend meeting to exercise their voting

rights at shareholders’ meetings or through proxy in case they could not attend including allowing them to express their views, seek

explanation or pose any question freely.

3. Rights of All Stakeholders

The Board of Directors pursues a policy to ensure that all stakeholders are well protected and fairly treated. That’s why it has

determined a clear guideline for its directors, the Management and staff to comply with in the Code of Conduct manual which covers

significant practices in areas of conflict of interest, responsibility to shareholders and policy and practice of staff, suppliers, competitors

and the society. In addition, it is the duty and responsibility of directors, the Management and all staff to acknowledge, understand and

comply with these practices on a strictly basis. In case of violation, they will be subject to harsh disciplinary actions. Besides, a grievance

channel has also been set up for stakeholders to file complaint to the company in case they are unfairly treated by the company, directors,

the Management and its staff.

4. Shareholders’ Meeting

In 2003, the company held one Annual Ordinary Shareholders’ Meeting and one Extrarordinary Shareholders’ Meeting at its

premise. These meetings were held after invitation to attend the meeting as well as supporting documents to the meeting agendas

were sent to shareholders 12 business days in advance. Each agenda was also accompanied with the Board of Directors’ opinions.

There were 10 directors attending these two meetings, including Chairman of the Audit Committee, Chairman of the Nomination

Committee and Chairman of the Compensation Committee. Chairman of the meetings allowed all shareholders to review the

company’s operation as well as inquire and express their opinions and advice on an equal basis. In addition, the Board of Directors

also prepared minutes of these meetings before posting them in the company’s website within 14 days from the meeting dates for

shareholders to review them.


5. Leadership and Vision

The Board of Directors is responsible for shareholders when it comes to managing the company’s business by approving

the company’s vision, mission, strategy, target, operation plan and budget proposed by the management. The Board of Directors has

set up a machnism to ensure that the company achieves both short- and long-term objectives that will ultimately maximize our

shareholders’ interests while taking into consideration the interests of all stakeholders.

The Board of Directors has appointed the Chief Executive Officer (CEO) who leads the management team in developing and

implementing business strategies. It has also determined clear roles, duties and responsibilities between the Board of Directors, the

sub-committees and the Management. (More details can be found in “Management Structure”, page 24)

6. Conflicts of Interest

The Board of Directors has determined policies and measures to prevent directors and staff who manage other people’s

money from exploiting their power for personal interests. Directors and staff are to avoid engaging in transactions which may have

potential conflict with the company’s interests. If the transaction is proven necessary for the company’s benefit, the practice must be

in line with the Stock Exchange of Thailand’s criteria, at a price and under conditions as if the transaction is done with the third party.

Director or employee having interests in such transaction must not be involved in any approval process. In addition, the Board of

Directors also prohibits directors, the Management or staff from using an opportunity or data they may acquire through their positions

for personal interests, from competing with the company or other related business, from using insider’s information for their benefit

when trading shares, or from giving insider’s information to other persons for the purpose of trading the company’s shares.

7. Business Ethics

The Board of Directors has determined a Code of Conduct regarding business ethics for directors, the Management and staff

to acknowledge the standard of practices the company is expecting from them, ranging from treatment of shareholders, customers,

suppliers, competitors, the society to the staff themselves. The company held meetings to inform their staffs in Thailand of these

practices whereby supervisors of all levels are required to be a good example and encourage their supervisees to comply with these

practices. In addition, the Board of Directors implements this standard of practices in other countries where it has its operations.

8. Balance of Power for Non-Executive Directors

The Board of Directors has determined a number of directors that suits the company’s size. At present, the company has 12

directors, three of whom are directors who are also executives whereas the other nine are non-executives. Of all the entire Board

of Directors, four persons or one-third are independent directors.

9. Consolidations or Separation of Office

The Chairman of the Board has no relationship with the Management, nor does he represent any major shareholder. The Chairman

of the Board is not the same person as the Chief Executive Officer as the system is designed to create a check-and-balance system and

to separate the duty in policy supervision from operational management.

10. Remunerations of Directors and Executives

The Compensation Committee consists of five directors and is chaired by an independent director. The Committee has a duty to

propose a remuneration policy as well as guidelines and practices for the payment of remuneration and other fringe benefits to directors

4 1A n n u a l R e p o r t 2 0 0 3

and members of the sub-committees for the shareholders’ meeting to approve. The Compensation Committee’s task is also to review

the company’s appropriate payment structure and remuneration rates to be paid to the Management before proposing them for the

Board of Directors’ approval. When determining director’s remuneration, the Board of Directors will consider it on the basis of several

factors; namely, comparison to what is paid in the same industry, the company’s performances, duties and responsibilities of directors.

Remuneration the company paid in 2003 to its directors and the Management can be found in “Remuneration of the Board of

Directors and Management”, page 38.

On 25 February 2004, the Board of Directors considered reducing the number of the Compensation Committee members to four

persons with additional responsibilities as detailed on page 28.

11. Board of Directors’ Meeting

Normally, the Board of Directors will meet once a month as pre-scheduled on every last Thursday of the month and may convene on

a special occasion if needed. In each meeting, both agendas for acknowledgement and for consideration will be clearly determined.

Complete and adequate documents will be sent to the Board of Directors in advance for directors to review before the meeting.

Each meeting will last approximately three hours. At the meeting, every director is free to speak his mind whereby the Chairman will

process comments and opinions and summarize what is discussed in the Meeting. Director having interest in a particular matter must

leave the meeting when the matter is considered. The minutes of the meeting will be made in writing and, after certified by the meeting,

will be kept for directors and relevant parties for auditing purpose.

In 2003, the Board of Directors convened on an ordinary basis 13 times. Records of each director’s attendance at the meeting are

as follows.

1. Mr. Chira Panupong 12/12 1/1 13/13

2. Mr. Soonthorn Vongkusolkit 10/12 1/1 11/13

3. Mr. Somdee Chareonkul 12/12 1/1 13/13

4. Mr. Manas Leeviraphan 10/12 - 10/13

5. Mr. Vitoon Wongkusolkit 10/12 1/1 11/13

6. Mr. Sawatdiparp Kantatham 12/12 - 12/13

7. Ms. Sukon Kanchanalai 12/12 1/1 13/13

8. Mr. Montri Mongkolswat 12/12 1/1 13/13

9. Dr. Kopr Kritayakirana 5/5 1/1 6/6

10. Mr. Chanin Vongkusolkit 11/12 1/1 12/13

11. Mr. Metee Auapinyakul 10/12 1/1 11/13

12. Mr. Ongart Auapinyakul 12/12 1/1 13/13

* Mr. Prachuab Trinikorn 3/3 - 3/3

Note : For No. 9, the Board of Directors resolved on 31 July 2003 to appoint Dr. Kopr Kritayakirana as the company’s director replacing

Mr. Prachuab Trinikorn who resigned from his directorship effective from 1 August 2003.

Ordinary Meeting Total

Total Attendance (times)Name Extraordinary

Meeting


12. Sub-Committees

> The Audit Committee

The Audit Committee is composed of three independent directors whose responsibilities are to review the company’s

financial statements; assess an adequacy of an internal control and risk management system and the compliance with relevant

laws, rules and regulations; to consider, choose, propose for appointment and recommend the auditor’s fee; review the

company’s disclosure of information in case of connected transaction or transaction that may lead to conflict of interest to ensure

accuracy, completion and transparency; examine major risk management measures and, if appropriate, recommend the

Management to review these measures; and review and express opinions regarding appointment, termination, business and

operating plans, budget and workforce of the Internal Audit Department.

In 2003, the Audit Committee held eight meetings where every member attended.

On 25 February 2004, the Board of Directors resolved that the responsibilities of the Audit Committee be modified

as detailed on page 26.

> The Corporate Governance and Nomination Committee

The Nomination Committee consists of five members whose duty is to recruit, select and nominate candidates as the

company’s directors, members of the sub-committees appointed by the Board for a specific task and CEO, either for new

appointment or replacement when the office is due or vacant by any reasons.

In 2003, the Nomination Committee held five meetings in which every member attended.

On 25 February 2004, the Board of directors considered reducing the number of the Nomination Committee members

to 4 persons and changing the name to the Corporate Governance and Nomination Committee as well as expanding the

responsibilities of the committee as detailed on page 27.

> The Compensation Committee

Consisting to five directors, the Compensation Committee’s duty is to propose a remuneration policy, guidelines and

practices, for paying compensation and other fringe benefits to directors, members of the sub-committees, the CEO and

the Executive Officers. The Compensation Committee also determines evaluation criteria as well as evaluates performance of

the CEO and the Executive Officers. It also reviews the company’s structure and system of remuneration payment to its

directors as well as rates it pays to directors and its management.

In 2003, the Compensation Committee held nine meetings where everyone attended.

On 25 February 2004, the Board of Directors considered reducing the number of the Compensation Committee

members to 4 persons with additional responsibilities as detailed on page 28.

13. Internal Control and Risk Management

The Board of Directors has established an internal control system which covers all aspects starting from finance to operation and

compliance with relevant laws, rules and regulations. In addition, there are also auditing and check-and-balance mechanisms efficient

enough to safeguard and take care of shareholders’ investment and the company’s assets at all time. The Internal Audit Department

has a duty to audit the operations of all business and supporting units to ensure that they comply with existing regulations as well as to

access an adequacy and efficiency of the internal control systems. The Board of Directors will ensure that the Internal Audit Department

is independent to fully perform its auditing and check-and-balance duties where it can directly report to the Audit Committee within

a specific timeframe.

4 3A n n u a l R e p o r t 2 0 0 3

14. Report of the Board of Directors

The Board of Directors is responsible for consolidated financial statements of the company and its subsidiaries and financial

information in an annual report. A financial statement is prepared on the basis of the generally-accepted accounting principles (GAAP)

in Thailand where an appropriate accounting policy is selected and implemented on a regular basis. The report, prepared on the basis of

thorough discretion, includes an adequate disclosure of significant information in the Notes to the Financial Statement. The Board of Directors

has entrusted the Audit Committee which consists of independent directors to be responsible for quality of its financial report and the internal

control system. The Audit Committee’s views on the subject are printed in its report, which has also been presented in the annual report.

The Board of Directors deems that the financial statements of the company and its subsidiaries as at 31 December 2003 are

accurate, complete, adequate and reliable.

15. Relationship with Investors

The Board of Directors has a policy to disclose both financial and non-financial information in relevant to the business and the

performance of the company in a complete, accurate, up-to-date and timely manner aiming to clearly reflect the true operational and

financial status of the company as well as its business prospects. In addition, the Board firmly commits to the strict compliance with

the laws, rules and regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand. It has established

an Investor Relations Division specially assigned to handle communication with shareholders and facilitate investors and securities

analysts on a fair and equitable basis.

Aside from disclosing information as required by the Stock Exchange of Thailand and the Office of the Securities and Exchange

Commission, the company also uses other channels to communicate with shareholders and investors. This includes; for example, a quarterly

meeting to clarify its operating results to analysts, company’s visits, road shows to give information to local and international analysts,

press releases through media and the company’s website.

S u p e r v i s i o n o n t h e U s e o f I n t e r n a l I n f o r m a t i o n

The company discloses accurate and reliable information in a timely manner to its shareholders, investors, securities analysts and

the public. This includes when its executives involve in any share trading under the terms of the Office of the Securities and Exchange

Commission where information is reported to the supervisory agency on a strictly basis as we consider this as our management’s ethics.

To monitor insider’s information, the company clearly states in its work regulations to staff of all levels under the topic of disciplinary

actions that anyone violating what is stated there must be considered committing a disciplinary offense and therefore subject to penalty

based on their offense. The statement of offense is as follows: “to disclose the company’s secret and intend to damage the company’s

reputation, credibility or products to the point that the company suffers from damage or loses business opportunity.” In such case, staff will

be subject to penalty up to being fired. The company has developed its internal control system where an information technology system is

used to make sure that the control is done on a systematic and thorough way. This includes, for example, a system that prevents the third

party to access the company’s information and that determines different accessibility of staff at various levels based on their responsibilities.

If executives or staff participate in a special assignment which involves information not yet disclosed to the public and is currently

being negotiated where disclosure of such information may affect the company’s share price in the stock market, the executives and

staff are required to sign the Confidentiality Agreement with the company until the information is released to the Stock Exchange of

Thailand and the Office of the Securities and Exchange Commission.


>>I n te r n a l C o n t ro l

The Board of Directors received the assessment report of the 2003 Audit Committee and found that the company had an internal

control system that adequately covered all operations including finance, operation, compliance and rules and regulations. Details are

as follows.

O r g a n i z a t i o n a n d E n v i r o n m e n t

The company updated its organizational structure to ensure that its operation would be flexible and consistent with changing

business environment. It adjusted the structure of the Marketing & Logistics Department, which is responsible for the marketing and

logistic operations of coal locally and internationally. An internal audit unit was also set up in the Republic of Indonesia. In addition, the

Corporate Services Department was restructured. The System Development Department was upgraded and would be responsible for the

company’s information technology work, which has widely expanded especially in the Republic of Indonesia. In addition, the Technical

Development & Services Department was also established to support technical development of various projects that the company has

invested. During the past year, the Board of Directors also promoted the corporate governance policy by emphasizing at transparency and

our commitment to protect shareholders’ interests. Our Internal Audit Department reviewed the operation of all units including business

and supporting units to ensure that they complied with relevant regulations. The Internal Audit Department also assessed whether

an internal auditing process of a particular unit was adequate and efficient. The Board of Directors made sure that the Internal

Audit Department was independent when doing the auditing and reported directly to the Audit Committee within deadlines. A policy

and operation plan was set up by taking into consideration fair treatment to staff, customers and competitors as well as accountability

to shareholders, the society and environment. The Board of Directors also arranged mechanisms and processes to make sure that

this could be strictly implemented. In addition, the Board of Directors ensured that clear business objectives were set up so that we can

effectively assess whether or not we achieved them and for the purpose of long-term benefits to the company’s shareholders.

R i s k M a n a g e m e n t

The company hired a consultant to set up a risk management system with an aim to have a clear, systematic and efficient

process to manage risks that induce even more confidence from the third parties. The company assessed risk factors that may affect

its business and objectives, as well as set up the Risk Management Committee.

4 5A n n u a l R e p o r t 2 0 0 3

C o n t r o l o f t h e M a n a g e m e n t ’ s O p e r a t i o n

The Board of Directors has appointed three sub-committees; namely, the Audit Committee, the Nomination Committee and

the Compensation Committee. These three sub-committees duly performed their tasks based on the scopes of work, duties and

responsibility they were entrusted. In terms of management, the company determined scopes of work, duties and responsibilities

as well as updated authorization of each level of our management in a clearer manner. A Code of Conduct manual was printed.

We also constantly monitored the operations of our affiliated and subsidiary companies. A manual to check that we duly comply

with relevant laws and contracts was produced. There is also an annual audit plan to ensure that our operation is based on our plans,

rules and regulations and relevant laws.

I n f o r m a t i o n T e c h n o l o g y a n d D a t a C o m m u n i c a t i o n s

The company provided enough important information for the Board of Directors to use as a basis to make its decisions.

The meeting’s comments were recorded and summarized in the minutes of every Board of Directors’ meeting. An information

technology system was set up to ensure that communication with staff at all levels both inside and outside the organization could be

done effectively. In addition, supporting documents to accounting records were kept as required by the laws. A data back-up system

was put in place. Meetings were also held between the Audit Committee and certified public accountants (CPA) as well as our

Management to review the company’s accounting policy whether or not it was still consistent with the generally-accepted accounting

practice (GAAP) as well as to check material contents in CPA’s auditing report. During the past year, the company tried to develop

its accounting system and its communications and data system between the parent company and its subsidiaries and affiliates

overseas with a purpose to coordinate the monitoring of these subsidiaries and affiliates in a speedy and controllable manner.

M o n i t o r i n g S y s t e m

The company held 13 Board of Directors’ meetings in 2003 while the management’s meeting was also held every month to

review and monitor the Management’s operation that it was consistent with the company’s target. At the Board of Directors’ meeting

or the management’s meeting, should operation be different from the target, the meeting would adopt a resolution, requiring relevant

departments to handle this, while a mechanism to monitor, review and check compliance according to the company’s rules, regulations,

relevant laws and the internal audit system was also put in place. The Audit Committee met eight times and reported result of the

auditing to the Board of Directors’ on a quarterly basis. If there is any incident of fraud or regulatory or legal violation, the Audit

Committee is required to report the senior management up to the Chief Executive Officer. Should the incident be very serious, it must

report to the Board of Directors.


>>C o n n e c te d Pe r s o n s a n d Tra n s a c t i o n s

Connected Persons

1. TME Capital Co., Ltd. 1) Being one of the major shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Soonthorn Vongkusolkit

(Investment Company) holding 5.40 per cent of its paid-up capital 1. The Vongkusolkit Family 52.42% 2. Mr. Vitoon Wongkusolkit

2) The major shareholder is the Vongkusolkit family, 2. The Auapinyakul Family 20.48% 3. Mr. Chanin Vongkusolkit

which is also one of major shareholders 3. Ufinves Co., Ltd. 7.58% 4. Mr. Metee Auapinyakul

of Banpu Plc. 4. The Kantatham Family 6.13% 5. Mr. Ongart Auapinyakul

3) There are 6 joint directors as follows : 5. Mrs. Panhatai Serirak 3.64% 6. Mr. Sawatdiparp Kantatham

1. Mr. Soonthorn Vongkusolkit 6. The Karnchanakamnerd 2.58% 7. Mr. Prachuab Trinikorn

2. Mr. Vitoon Wongkusolkit Family 8. Mr. Werajet Vongkusolkit

3. Mr. Chanin Vongkusolkit 7. The Putpongsiriporn Family 2.43%

4. Mr. Metee Auapinyakul

5. Mr. Ongart Auapinyakul

6. Mr. Sawatdiparp Kantatham

2. Mitr Phol Sugar Corp., Ltd. 1) Being one of the major shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Soonthorn Vongkusolkit

(Production and holding 2.98 per cent of its paid-up capital 1. Mitr Siam Sugar Co., Ltd. 35.00% 2. Mr. Vitoon Wongkusolkit

distribution of sugar 2) The major shareholder is the Vongkusolkit Family, 2. Pan-Asia Sugar Fund 34.40% 3. Mr. Isara Vongkusolkit

and molasses) which is also one of major shareholders 3. The Vongkusolkit Family 27.00% 4. Mr. Chanin Vongkusolkit

of Banpu Plc. 5. Mr. Banthoeng Vongkusolkit

3) There are 3 joint directors as follows : 6. Mr. Choosak Vongkusolkit

1. Mr. Soonthorn Vongkusolkit 7. Mr. Phadung Dechakarin

2. Mr. Vitoon Wongkusolkit 8. Mr. Thaweewat

3. Mr. Chanin Vongkusolkit Tahweepiyamaporn

9. Wg. Cmr. Laksami

Putpongsiriporn

3. Ufinves Co., Ltd. 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Soonthorn Vongkusolkit

(Holding Company) holding 0.87 per cent of its paid-up capital 1. The Vongkusolkit Family 42.36% 2. Mr. Vitoon Wongkusolkit

2) The major shareholder is the Vongkusolkit Family, 2. The Janvatanavit Family 6.64% 3. Mr. Chanin Vongkusolkit

which is also one of major shareholders 3. Wg. Cmr. Laksami 5.38% 4. Mr. Adisak Vongkusolkit

of Banpu Plc. Putpongsiriporn 5. Mr. Werajet Vongkusolkit

3) There are 3 joint directors as follows : 4. The Karnchanakamnerd 5.38% 6. Mr. Santi Janvatanavit

1. Mr. Soonthorn Vongkusolkit Family 7. Mr. Kulwat Janvatanavit

2. Mr. Vitoon Wongkusolkit 5. Mr. Kittisak Chutichotipong 5.06% 8. Mr. Danai Janvatanavit

3. Mr. Chanin Vongkusolkit 6. Mrs. Kulrat Rattanaprapas 2.92% 9. Mr. Amnuay Karnchanakamnerd

Description of Relations Major Shareholders List of Board of DirectorsConnected Persons/

Type of Business

4 7A n n u a l R e p o r t 2 0 0 3

4. MP Particle Board Co., Ltd. 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Soonthorn Vongkusolkit

(Produce, sell and holding 0.77 per cent of its paid-up capital United Farmer and Industry 99.99% 2. Mr. Isara Vongkusolkit

wholesale particle board 2) The major shareholder is United Farmer Co., Ltd. 3. Mr. Kachorn Theppatipath

produced from sugarcane and Industry Co., Ltd. 4. Mrs. Amporn

trash) 3) There is one joint director, Karnchanakamnerd

Mr. Soonthorn Vongkusolkit 5. Mr. Sukhakarn Watanawekin

6. Mr. Adisak Vongkusolkit

7. Mr. Werajet Vongkusolkit

8. Mr. Warapong Ruengwarawat

5. Pacific Sugar Corporation 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Kamol Vongkusolkit

Ltd. holding 0.36 per cent of its paid-up capital 1. Mitr Phol Sugar Corp., Ltd. 25.00% 2. Mr. Soonthorn Vongkusolkit

(Export Distributor) 2) The major shareholder is Mitr Phol Sugar Corp., Ltd. 2. Mr. Kamol Vongkusolkit 17.59% 3. Mr. Isara Vongkusolkit

3) There is one joint director, 3. Mr. Soonthorn Vongkusolkit 15.04% 4. Mr. Banthoeng Vongkusolkit

Mr. Soonthorn Vongkusolkit 4. Mr. Vitoon Wongkusolkit 12.49% 5. Mr. Kachorn Theppatipath

6. Mr. Tasana Wanakornkul

6. United Farmer 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Kamol Vongkusolkit

and Industry Co., Ltd. holding 0.66 per cent of its paid-up capital Mitr Phol Sugar Corp., Ltd. 87.56% 2. Mr. Soonthorn Vongkusolkit

(Production and 2) The major shareholder is Mitr Phol Sugar Corp., Ltd. 3. Mr. Vitoon Wongkusolkit

distribution of sugar 3) There are 2 joint directors as follows : 4. Mr. Isara Vongkusolkit

and molasses) 1. Mr. Soonthorn Vongkusolkit 5. Mr. Banthoeng Vongkusolkit

2. Mr. Vitoon Wongkusolkit 6. Mr. Preecha Chaianant

7. Mr. Taweewat Taweepiyamaporn

8. Mr. Pradith Karnchanakamnerd

9. Mr. Sukhakarn Watanawekin

7. Mitr Phu Viang Sugar 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Soonthorn Vongkusolkit

Co., Ltd. holding 0.23 per cent of its paid-up capital United Farmer and Industry 99.99% 2. Mr. Isara Vongkusolkit

(Production and 2) The major shareholder is United Farmer Co., Ltd. 3. Mr. Banthoeng Vongkusolkit

distribution of sugar and Industry Co., Ltd. 4. Mr. Kachorn Theppatipath

and molasses) 3) There is one joint director,

Mr. Soonthorn Vongkusolkit


Type of Business


The inter-company transactions among the parent company, subsidiary, associated, and relevant companies as well as pricing

policies for transactions are stated in the “Notes to the Financial Statements” - number 3.

Necessity and Soundness of Connected Transactions

Where the company will enter into any contract or transaction with its subsidiary company, associate company, related

company and/or connected person, the company shall take into account the necessity and appropriateness of such doing based mainly

on the interest of the company.

Approval Measures of the Connected Transactions

Where the company will enter into any contract or transaction with its subsidiary company, associate company, related

company and/or connected person, the Board of Directors of the company shall, for the benefit of the company, direct the company to

comply with the rules and regulations of the Stock Exchange of Thailand, by which the price and the terms shall be set up as if made on

an arm’s length basis. Directors or employees having interest in such transactions shall not be involved in the approval process.

Policy and Possible Future Transactions

- None -


Type of Business

8. Mitr Kalasin Sugar 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Kamol Vongkusolkit

Co., Ltd. holding 0.09 per cent of its paid-up capital United Farmer and Industry 99.99% 2. Mr. Soonthorn Vongkusolkit

(Production and 2) The major shareholder is United Farmer Co., Ltd. 3. Mr. Vitoon Wongkusolkit

distribution of sugar and Industry Co., Ltd. 4. Mr. Isara Vongkusolkit

and molasses) 3) There are 2 joint directors as follows : 5. Mr. Banthoeng Vongkusolkit

1. Mr. Soonthorn Vongkusolkit

2. Mr. Vitoon Wongkusolkit

9. City Holding Co., Ltd. 1) Being one of the shareholders of Banpu Plc., As of 31 December 2003 1. Mr. Kamol Vongkusolkit

(Holding Company) holding 0.08 per cent of its paid-up capital 1. The Vongkusolkit Family 90.00% 2. Mr. Soonthorn Vongkusolkit

2) The major shareholder is the Vongkusolkit Family, 2. The Putpongsiriporn Family 4.00% 3. Mr. Vitoon Wongkusolkit

which is also one of major shareholders 3. The Karnchanakamnerd 6.00% 4. Mr. Isara Vongkusolkit

of Banpu Plc. Family 5. Mr. Chanin Vongkusolkit

3) There are 3 joint directors as follows : 6. Mr. Adisak Vongkusolkit

1. Mr. Soonthorn Vongkusolkit 7. Mr. Werajet Vongkusolkit

2. Mr. Vitoon Wongkusolkit 8. Mr. Amnuay Karnchanakamnerd

3. Mr. Chanin Vongkusolkit

4 9A n n u a l R e p o r t 2 0 0 3

The company’s management would like to clarify its fiscal year of financial statement ending 31 December 2003 in comparison

with the same period as of 31 December 2002. Details clarifications on financial statements should be read in conjunction with the

company’s audited financial statements from page 53 to 95.

1. The profit and loss for the year ending 31 December 2003

1.1 Sales revenue of Baht 12,482 million reported an increase of 14 per cent or Baht 1,574 million compared with the previous

year. The substantial increase was mainly from an increase of 6 per cent in coal sale volumes and 7 per cent of average

selling prices. Details of the company’s sales revenues are as follows :

> Revenues from selling coals of Baht 12,331 million accounted for 99 per cent of total sales revenue. An increase of

Baht 1,713 million or 16 per cent in comparison with the previous year. Revenues were from these stated items :

> Sales of its own Indonesian coal mines of Baht 11,475 million.

> Sales of domestically produced coal in Thailand of Baht 856 million.

> Sales of industrial minerals and others of Baht 151 million accounting for 1 per cent of total sales revenue.

1.2 Cost of good sold of Baht 8,878 million reported an increase of Baht 793 million or 10 per cent from the previous year

mainly from increased in coal sale volumes. However, the proportion of cost increasing was less than revenue increasing

due to achieving in cost reduction program especially at Indominco and Jorong.

1.3 Gross profit reported at Baht 3,604 million increased of Baht 781 million. Gross profit margin reported 29 per cent of sale

revenues compared with the previous year of 26 per cent.

1.4 Selling and administrative expenses of Baht 1,858 million reported an increase of Baht 366 million or 25 per cent compared

with the previous year mainly from an increase in barge to vessel and demurrage expenses.

1.5 Royalty fees of Baht 1,252 million reported an increase of Baht 383 million or 44 per cent in comparison with the previous

year due to an increase in coal sales in Indonesian coal mines and exploitation fees of Kitadin.

1.6 Unrealized gain of Baht 309 million from its securities investment in the listed company marked to market ending 31 December

2003 as the market share price increased from the previous period.

1.7 Equity income attributed by subsidiary and associated companies of Baht 573 million increased by Baht 121 million compared

with the previous year. Note that an equity income of Baht 573 million was :

> Tri Energy Co., Ltd. of Baht 567 million in which classified into an operating profit of Baht 296 million and a gain of Baht

271 million from foreign exchange translation.

> The rest of equity income attributed by other associated companies registered gain of Baht 6 million.

1.8 Premium redemption of Baht 152 million derived from USD 3.09 million redemption of Euro-Convertible Debentures (ECD#2)

and Baht 1,960 million redemption of Baht Debenture.

1.9 Interest expenses of Baht 480 million decreased from the previous year of Baht 143 million or 23 per cent mainly from the

refinancing with lower cost of debt.

>>Manage m e n t’s D i s cuss ion and Ana l y s i s o fthe Conso l ida ted F inanc ia l Sta tements


1.10 The fiscal net profit therefore reported at Baht 2,046 million increased from the previous year of Baht 1,212 million.

1.11 Net profit per share (EPS) for the year ending 31 December 2003 reported at Baht 7.75/share compared with Baht 3.93/share

in the previous year.

2. The consolidated balance sheet as of 31 December 2003 in comparison with balance sheet as of 31 December 2002

2.1 Total assets of Baht 33,993 million reported an increase of Baht 10,423 million or 44 per cent compared with balance sheet

as of 31 December 2002 with details described below :

> Cash and cash equivalents of Baht 3,211 million increased Baht 847 million or 36 per cent due to issuance of Baht debenture

to prepay higher cost of loans and debentures, and proceeds from divestment of non-core investment

> Short-term investments of Baht 336 million increased Baht 89 million mainly from mark-to-market priced on marketable securities

> Account receivables of Baht 1,055 million decreased Baht 69 million according to decrease in collection period

> Net inventories of Baht 851 million decreased Baht 121 million due to stock management

> Other current assets of Baht 1,129 million increased Baht 693 million or 159 per cent mainly from an increase in tax accrued,

advance for land compensation for Indonesian mine and other account receivables

> Investment in subsidiaries and associates of Baht 533 million decreased Baht 981 million according to divestment in

Banpu Gas Power Ltd. and Tri Energy Co., Ltd.

> Other Investment of Baht 16,437 million increased Baht 11,605 million or 240 per cent from mark-to-market price of

investment in listed companies

2.2 Total liabilities of Baht 11,637 million decreased Baht 3,625 million or 24 per cent compared with balance sheet as of 31

December 2002 with details described below :

> Bank loans and overdrafts of Baht 1,134 million decreased by Baht 611 million or 35 per cent due to debt repayments to

domestic financial institutions

> Current portions of long-term loans of Baht 1,189 million decreased Baht 709 million according to early loan repayment

> Accrued interests of Baht 93 million decreased Baht 289 million mainly from early loan repayment of its subsidiary in

the Republic of Indonesia

> Accrued royalty fees of Baht 397 million decreased Baht 154 million due to royalty payment to government authority

> Long-term loans of Baht 970 million decreased Baht 3,634 million from loan repayment by both Thai and Indonesian companies

> Debentures of Baht 6,148 million increased Baht 2,058 million from the new debentures issuance of Baht 3,000 million and

Baht 2,000 million, and repayment of Baht 1,299 million of Indominco’s debentures and Baht 1,643 million of Baht debentures

2.3 Shareholders’ equity of Baht 22,355 million increased Baht 14,048 million or 169 per cent mainly from 1) an increased in

capital from conversion of warrant and employee stock option of Baht 566 million; 2) surplus on capital increased of Baht

1,255 million; 3) net profit attributed for fiscal year 2003 of Baht 2,046 million; 4) an increased in mark-to-market of

investment in listed companies of Baht 11,203 million; 5) an increased in affiliates’ foreign exchange translations of Baht

122 million; 6) advances payment from employee stock option of Baht 53 million; 7) dividend payment of Baht 697 million

and 8) change in minorities of Baht 504 million.

2.4 Net debt-to-equity on consolidated balance sheet and the company’s as of 31 December 2003 reported at 0.28 times and 0.32

times, respectively, – compared with net debt-to-equity as of 31 December 2002 of 1.31 times and 1.08 times, respectively.

5 1A n n u a l R e p o r t 2 0 0 3

3. Statement of cash flow for the year ending 2003 in comparison with the previous year ending 2002

The company’s statement of cash flow for the year ending 2003 reported an increase of Baht 1,813 million of net cash flow

compared with the previous year. The company’s net cash flow divided into 1) operating cash flow (source of fund) of Baht 2,301 million;

2) investing cash flow (source of fund) of Baht 1,017 million which is the net cash flow after disposal investment and Land of Baht 1,162

million and Baht 898 million, respectively, dividend received Baht 512 million, increased investment in PT. Indominco Mandiri and AACI

of Baht 450 million and Baht 368 million, respectively, Investment in BLCP Power Ltd. of Baht 542 million, Investment in mining equipment

and overburden removals of Baht 776 million and Baht 735 million, respectively; 3) financing cash flow (use of fund) of Baht 1,504 million

mainly received from Baht debenture of Baht 5,000 million; short and long-term of Baht 2,836 million; proceeds from conversion of

warrant and employee stock option of Baht 1,874 million including capital increase and the surplus of Baht 581 million and Baht 1,293

million, respectively, offset by the payment of Baht debenture and ECD repayment of Baht 3,260 million, short- and long-term repayment

of Baht 7,216 million and dividend paid of Baht 697 million.

4. Management discussion and analysis

Coal demand has gradually increased in Asia Pacific region especially in the People’s Republic of China. Current international coal

price has increased more than 40 per cent compared to mid 2003. The company expects its average selling price to increase at a lower rate

due to variety of coal qualities both in Thailand and the Republic of Indonesia as well as lead time between pricing and delivery.

In the fourth quarter compare the third quarter, cost of production was higher as topsoil removal has to be done in advance in

order to prepare for coal production in 2004. As a result, gross profit margin was down to 27 per cent. Demurrage charge also increased

due to heavy rain in the fourth quarter, consequently, causing higher selling expenses.

Power business, The company had divested all its investment in Banpu Gas Power Ltd. of which holds 37.5 per cent stake in

Tri Energy Co., Ltd. to Ratchaburi Electricity Generating Holding Plc. (RATCH). The company received total proceed of Baht 2,100 million

on 14 November 2003.

BLCP Power Ltd. had made initial draw down from financial institutions on 15 September 2003. Dredging and reclamation area had

already done for power plant construction in 2003. Construction work has progressed well as scheduled, Unit#1 will be completed

by October 2006 and Unit#2 by February 2007 as plan. Organization and management has been in place under BLCP Power Ltd.

MOU between the company and Electricity Generating Authority of Thailand (EGAT) regarding sales of investment

in Ratchaburi Electricity Generating Holding Plc. (RATCH) and purchase of 24.93 per cent of Electricity Generating Plc. (EGCOMP), is

awaiting fulfilling conditions precedent from both sides. Should all conditions have been fulfilled, the payment and share transfer will be

done immediately. The company’s power strategy remain the same and add more emphasis on creating growth and management

participation in its power investment.


Dear Shareholders of Banpu Publ ic Compan y Limited,

The Board of Directors of Banpu Public Company Limited No. 3/2545 resolved on 28 October 2002 to extend the existing Audit Committee

consisting of three members to remain in office for another three years starting from 25 November 2002 to 24 November 2005. In 2003, the Audit

Committee convened in a total of 8 meetings plus another two meetings on 19 January 2004 and 19 February 2004 to discuss various matters as follows;

> Preparation of financial statement : This was to review the quarterly financial statements and the 2003 financial statement with the

Management and the Auditor to ensure that these financial statements and accounting transactions of related companies were duly

made and to provide observations as well as acknowledge ways and means to solve any problem for the benefit of the company.

> Internal control system : This was to review the 2003 audit plan by focusing on the operation side to ensure efficiency and effectiveness

of the internal control system. In addition, it was also for follow-up and result of the auditing report, especially issues of substantial

importance, for better internal control including expanding the scope of internal control to subsidiaries and affiliated companies overseas.

> Risk management : Having placed a priority in risk management, the Board of Directors and its executives engaged an external

consultant to lay down a risk management system so that the company would be able to assess risk factors appropriately in case having

significant impact on the business.

> Connected transactions : This was to review connected transactions which may lead to possible conflicts of interest with the company’s

commercial transactions actually undertaken during a normal course of business as part of its good corporate governance policy.

> Compliance with the government’s rules and regulations : The company complied with the laws governing the securities and

exchange, the Stock Exchange of Thailand’s terms and conditions and other relevant rules and regulations.

> Good corporate governance : The company placed a priority to the principles of good corporate governance for transparency in

operation and fairness to every party, which led to confidence and trust among shareholders, investors and all stakeholders.

Having considered the matter, the Audit Committee deemed that Banpu Public Company Limited put an emphasis on the good corporate

governance policy, resulting in an efficient internal control system. In addition, no material defect has been found and connected transactions

which may lead to possible conflicts of interest were commercial transactions actually undertaken during the normal course of business and for

maximum benefits of the company’s policy. No unusual transactions considered material contents have been found, either, and the public

sector’s rules and regulations were diligently complied. For the financial statement in the accounting year that ended on 31 December 2003,

there was no incident that may indicate problem and affect the company’s financial status. The financial statement is accurately recorded

and disclosure of information was adequate and in line with the accounting standards.

The Audit Committee has proposed to the Board of Directors in order to seek approval from the Shareholders’ Meeting that Ms. Nangnoi

Charoenthaveesup, Certified Public Accountant No. 3044, and/or Mrs. Anothai Leekitwattana, Certified Public Accountant No. 3442, and/or

Mr. Prasan Chuapanich, Certified Public Accountant No. 3051, of PricewaterhouseCoopers ABAS Co., Ltd., be appointed as the company’s auditor

in 2004 for a total auditing fee of Baht 2,596,000.

23 February 2004

On behalf of the Audit Committee

(Mr. Manas Leeviraphan)

Chairman of the Audit Committee, Banpu Public Company Limited

>>Re p o r t o f t h e Au d i t C o m m i t t e eto S h a r e h o l d e r s

5 3A n n u a l R e p o r t 2 0 0 3

To the Shareholders of Banpu Publ ic Compan y Limited

I have audited the accompanying consolidated and company balance sheets as at 31 December 2003 and 2002 and the related

consolidated and company statements of income, changes in shareholders’ equity and cash flows for the years then ended of Banpu Public

Company Limited and its subsidiaries and of Banpu Public Company Limited, respectively. These financial statements are the responsibility of

the company’s management. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform an audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles

used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits

provide a reasonable basis for my opinion.

In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the

consolidated and company financial position as at 31 December 2003 and 2002, and the consolidated and company results of operations, and cash

flows for the years then ended of Banpu Public Company Limited and its subsidiaries, and of Banpu Public Company Limited, respectively,

in accordance with generally accepted accounting principles.

Without qualifying my opinion, as explained in note 4 to the consolidated and company financial statements, the company has

made adjustments to the fair values of identifiable assets and liabilities of certain overseas subsidiaries acquired in 2002, due to receiving

relevant Government approval to change the subsidiaries’ recording and reporting currency in 2003. The allocation of the corresponding residual

amount has been adjusted accordingly. The company has accounted for this change in the subsidiaries’ recording and reporting currency on

a retrospective basis and therefore the consolidated and company financial statements for the year ended 31 December 2002 have been

restated. The restated consolidated and company balance sheets as at 31 December 2002 are presented herewith for comparative purpose.

Anothai Leekitwattana

Certified Public Accountant (Thailand) No. 3442

PricewaterhouseCoopers ABAS Limited

Bangkok

19 February 2004

>>A u d i t o r ’ s R e p o r t


A S S E T S

Current Assets

Cash and cash equivalents 6 3,211,311 1,429,670 2,057,559 114,679

Restricted cash at banks 7 - 934,576 - -

Investments in held-for-trading securities 8 336,391 247,469 233,324 239,029

Trade accounts receivable, net 9 1,054,531 1,123,601 268,536 351,607

Amounts due from related parties 5.2 20,112 9,211 610,583 645,922

Advances to related parties 5.3 60,663 42,912 144,772 140,282

Current portion of long-term loan to

related parties 5.3 - 150,000 761,053 -

Current portion of long-term loan to

other company 15,000 - 15,000 -

Inventories, net 10 851,402 972,485 494,220 418,828

Spare parts and machinery supplies 171,834 189,693 31,249 35,813

Other current assets 11 1,128,739 435,905 620,395 223,611

Total Current Assets 6,849,983 5,535,522 5,236,691 2,169,771

Non-Current Assets

Loans to employees 10,265 10,642 279 360

Long-term loans to related parties 5.3 342,655 343,233 8,637,761 7,872,043

Long-term loans and advance to other companies 20,702 23,722 - -

Investments in subsidiaries and associates 5.4 532,544 1,513,832 7,885,668 3,242,067

Other investments, net 12 16,436,760 4,831,552 8,719,424 946,941

Property, plant and equipment, net 13 5,773,169 6,262,655 586,572 674,682

Other non-current assets

Deferred overburden expenses, net 14 1,866,590 1,865,672 794,778 794,092

Mining property rights, net 2.8, 15 1,307,339 1,555,902 - -

Investment in land, net 16 36,123 730,405 - 23,930

Machinery and spare part pending disposal 270,511 288,518 270,511 288,518

Projects under development 222,712 180,504 209,959 152,392

Other non-current assets 17 323,622 427,794 40,073 198,742

Total Non-Current Assets 27,142,992 18,034,431 27,145,025 14,193,767

Total Assets 33,992,975 23,569,953 32,381,716 16,363,538

2003Thousand Baht

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

2002 ( R e s t a t e d )Thousand Baht

2003Thousand Baht

2002 ( R e s t a t e d )Thousand BahtN o t e s

The notes to the consolidated and company financial statements on pages 64 to 95 form an integral part of these financial statements.

>>○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

B a l a n c e S h e e t sAs at 31 December 2003 and 2002 Banpu Publ ic Company L imited

5 5A n n u a l R e p o r t 2 0 0 3

L I A B I L I T I E S A N D S H A R E H O L D E R S ’ E Q U I T Y

Current Liabilities

Bank overdrafts and loans from banks

and financial institution 18 1,133,781 1,744,845 1,015,197 1,703,781

Trade accounts payable 250,194 130,615 678 824

Amount due to and advances from related parties 5.5 - - 4,817 74

Current portion of long-term loans 20 688,809 1,076,449 610,000 610,000

Current portion of debentures 21 499,817 821,266 499,817 821,266

Other current liabilities

Accrued overburden and coal transportation

costs 703,041 1,273,045 17,079 36,173

Accrued interest expenses 93,173 381,931 92,051 63,959

Accrued royalty expenses 396,782 243,268 7,463 8,941

Accrued income tax 165,825 21,157 - -

Others current liabilities 19 492,110 756,649 95,590 128,609

Total Current Liabilities 4,423,532 6,449,225 2,342,692 3,373,627

Non-Current Liabilities

Long-term loans from related party 5.5 - - 747,769 -

Long-term loans 20 970,155 4,604,211 905,249 2,513,495

Debentures 21 6,148,011 4,089,846 6,148,011 2,790,729

Other liabilities 95,789 119,221 496 496

Total Non-Current Liabilities 7,213,955 8,813,278 7,801,525 5,304,720

Total Liabilities 11,637,487 15,262,503 10,144,217 8,678,347

2003Thousand Baht



2003Thousand Baht



>>○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

B a l a n c e S h e e t s ( c o n t i nu e d )

As at 31 December 2003 and 2002 Banpu Publ ic Company L imited


Shareholders’ Equity

Share capital

Registered share capital

354,050,479 ordinary shares

of Baht 10 each 3,540,505 3,540,505 3,540,505 3,540,505

Issued and paid-up share capital 22.1 2,702,748 2,136,634 2,702,748 2,136,634

Premium on share capital 22.1 5,020,266 3,764,887 5,020,266 3,764,887

Share subscription received in advance 22.2 52,673 - 52,673 -

Fair value reserve-available-for-sales securities 28 12,092,978 889,762 12,092,978 889,762

Adjustment from foreign exchange translation (330,950) (453,477) (330,950) (453,477)

Retained earnings

Appropriated

Legal reserve 29 390,448 356,868 390,448 356,868

Unappropriated 2,309,336 990,517 2,309,336 990,517

Total parent’s shareholders’ equity 22,237,499 7,685,191 22,237,499 7,685,191

Minority interest 117,989 622,259 - -

Total Shareholders’ Equity 22,355,488 8,307,450 22,237,499 7,685,191

Total Liabilities and Shareholder’s Equity 33,992,975 23,569,953 32,381,716 16,363,538

2003Thousand Baht



2003Thousand Baht



>>○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

B a l a n c e S h e e t s ( c o n t i nu e d )

As at 31 December 2003 and 2002 Banpu Publ ic Company L imited

5 7A n n u a l R e p o r t 2 0 0 3

2003Thousand Baht



2003Thousand Baht



>>○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

St a te m e n t s o f I n c o m eFor the years ended 31 December 2003 and 2002 Banpu Publ ic Company L imited

Sales 12,482,256 10,908,683 1,037,981 1,463,908

Cost of sales (8,878,370) (8,085,605) (769,392) (957,990)

Gross profit 3,603,886 2,823,078 268,589 505,918

Selling and administrative expenses (1,857,656) (1,491,604) (417,532) (443,406)

Royalty fee (1,252,465) (869,145) (25,167) (48,199)

Profit (loss) from sales 493,765 462,329 (174,110) 14,313

Other operating income

Gain on disposal of investments on

available-for-trade securities 1,037,101 362,433 1,012,123 304,370

Gain on disposal of investment in subsidiary 108,661 - - -

Net gain on disposal of property, plant

and equipment 22,688 42,672 21,108 42,717

Net gain on disposal of investment in land 106,055 - - -

Unrealised gain on held-for-trading securities 8 308,844 76,478 214,217 74,578

Dividend income 512,437 280,030 27,342 60,881

Interest income 28,744 36,455 361,524 264,898

Other income 97,565 230,293 45,117 66,957

Other operating expenses

Loss on disposal of investment in land - - (18,430) -

Directors’ remuneration 27 (14,780) (10,255) (14,780) (10,255)

Net loss on exchange rate (270,197) (8,347) (138,196) (179,531)

Operating profit 23 2,430,883 1,472,088 1,335,915 638,928

Share of profit of subsidiaries - - 871,405 577,757

Share of profit of associates 573,561 452,357 573,561 452,357

Profit before interest and income tax 3,004,444 1,924,445 2,780,881 1,669,042

Debenture premium redemption (152,257) (336,558) (152,257) (336,558)

Interest expenses (479,649) (623,012) (447,746) (497,763)

Financial expenses (145,422) (36,292) (134,542) -

Income tax (123,859) (43,800) - -

Profit before minorities 2,103,257 884,783 2,046,336 834,721

Less Profit attributable to minorities (56,921) (50,062) - -

Net profit for the year 2,046,336 834,721 2,046,336 834,721

Basic earnings per share (Baht) 24 7.75 3.93 7.75 3.93

Diluted earnings per share (Baht) 24 7.75 3.87 7.75 3.87


C O N S O L I D A T E D 2 0 0 3

N o t e s

Share Fair value Adjustment Unappro-Issued and subscriptions reserve- from foreign Appropriated priated

paid-up Premium on received in available-for- exchange retained retained Minorityshare capital share capital advance sales securities translation earnings earnings interest Total

C O M P A N Y 2 0 0 3

Opening balance of 2003 2,136,634 3,764,887 - 889,762 (37,927) 356,868 1,605,058 8,715,282

Restatements - - - - (415,550) - (614,541) (1,030,091)

Opening balance after restatements 2,136,634 3,764,887 - 889,762 (453,477) 356,868 990,517 7,685,191

Share capital 22.1 566,114 - - - - - - 566,114

Premium on share capital 22.1 - 1,255,379 - - - - - 1,255,379

Share subscriptions received in advance 22.2 - - 52,673 - - - - 52,673

Fair value gains/(losses) 28 - - - 11,203,216 - - - 11,203,216

Adjustment from foreign exchange translation - - - - 122,527 - - 122,527

Legal reserve 29 - - - - - 33,580 (33,580) -

Dividends paid 26 - - - - - - (693,937) (693,937)

Net profit - - - - - - 2,046,336 2,046,336

Closing balance of 2003 2,702,748 5,020,266 52,673 12,092,978 (330,950) 390,448 2,309,336 22,237,499

Share Fair value Adjustment Unappro-Issued and subscriptions reserve- from foreign Appropriated priated

paid-up Premium on received in available-for- exchange retained retainedshare capital share capital advance sales securities translation earnings earnings Total

(Unit : Thousand Baht)


N o t e s

Opening balance of 2003 2,136,634 3,764,887 - 889,762 (37,927) 356,868 1,605,058 135,382 8,850,664

Restatements - - - - (415,550) - (614,541) 486,877 (543,214)

Opening balance after restatements 2,136,634 3,764,887 - 889,762 (453,477) 356,868 990,517 622,259 8,307,450

Share capital 22.1 566,114 - - - - - - - 566,114

Premium on share capital 22.1 - 1,255,379 - - - - - - 1,255,379

Share subscriptions received

in advance 22.2 - - 52,673 - - - - - 52,673

Fair value gains/(losses) 28 - - - 11,203,216 - - - - 11,203,216

Adjustment from foreign

exchange translation - - - - 122,527 - - (582,737) (460,210)

Legal reserve 29 - - - - - 33,580 (33,580) - -

Dividends paid 26 - - - - - - (693,937) (3,080) (697,017)

Net profit - - - - - - 2,046,336 56,921 2,103,257

Investment in subsidiary - - - - - - - 24,626 24,626

Closing balance of 2003 2,702,748 5,020,266 52,673 12,092,978 (330,950) 390,448 2,309,336 117,989 22,355,488


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St a te m e n t s o f C h a n g e si n S h a r e h o l d e r s’ E qu i t yFor the years ended 31 December 2003 and 2002 Banpu Publ ic Company L imited

5 9A n n u a l R e p o r t 2 0 0 3

C O N S O L I D A T E D 2 0 0 2 ( R e s t a t e d )

Opening balance of 2002 2,101,892 3,706,625 (23,487) 80,498 352,326 610,822 117,916 6,946,592

Share capital 22.1 34,742 - - - - - - 34,742

Premium on share capital 22.1 - 58,262 - - - - - 58,262

Fair value gains/(losses) 28 - - 913,249 - - - - 913,249

Adjustment from foreign exchange translation - - - (533,975) - - 486,877 (47,098)

Legal reserve 29 - - - - 10,921 (10,921) - -

Dividends paid 26 - - - - - (444,105) (6,160) (450,625)

Net profit - - - - - 834,721 50,062 884,783

Disposal of subsidiary - - - - (6,379) - (70,636) (77,015)

Investment in subsidiary - - - - - - 44,200 44,200

Closing balance of 2002 2,136,634 3,764,887 889,762 (453,477) 356,868 990,517 662,259 8,307,450

Fair value Adjustment Unappro-Issued and reserve- from foreign Appropriated priated

paid-up Premium on available-for- exchange retained retained Minorityshare capital share capital sales securities translation earnings earnings interest Total

C O M P A N Y 2 0 0 2 ( R e s t a t e d )

Opening balance of 2002 2,101,892 3,706,625 (23,487) 80,498 352,326 610,822 6,828,676

Share capital 22.1 34,742 - - - - - 34,742

Premium on share capital 22.1 - 58,262 - - - - 58,262

Fair value gains/(losses) 28 - - 913,249 - - - 913,249

Adjustment from foreign exchange translation - - - (533,975) - - (533,975)

Legal reserve 29 - - - - 10,921 (10,921) -

Dividends paid 26 - - - - - (444,105) (444,105)

Net profit - - - - - 834,721 834,721

Disposal of subsidiary - - - - (6,379) - (6,379)

Closing balance of 2002 2,136,634 3,764,887 889,762 (453,477) 356,868 990,517 7,685,191

Fair value Adjustment Unappro-Issued and reserve- from foreign Appropriated priated

paid-up Premium on available-for- exchange retained retainedshare capital share capital sales securities translation earnings earnings Total



N o t e s

N o t e s


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St a te m e n t s o f C h a n g e si n S h a r e h o l d e r s’ E qu i t y ( c o n t i nu e d )

For the years ended 31 December 2003 and 2002 Banpu Publ ic Company L imited



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St a te m e n t s o f C a s h F l ow sFor the years ended 31 December 2003 and 2002 Banpu Publ ic Company L imited


2003Thousand Baht



2003Thousand Baht


Cash flows from operating activities

Net profit 2,046,336 834,721 2,046,336 834,721

Adjustment to net profit for cash receipts

(payments) from operations

Depreciation 23 457,685 318,835 61,277 64,527

Deferred expense 23 821,250 1,026,928 320,425 410,203

Unrealised (gain) from investments

available-for-trade (308,844) (76,478) (214,217) (74,578)

Increase (decrease) in provision for

doubtful accounts - (20,618) - (20,618)

Increase (decrease) in provision for

obsolete stock 10 39,522 - - -

Net unrealized (gain) loss on exchange rate 1,052,320 114,559 (24,744) (52,492)

Net realized (gain) loss on exchange rate

from loans 307,587 47,720 52,991 (11,712)

Share of net (profit) of subsidiaries

and associated companies (573,561) (452,357) (1,444,966) (1,030,114)

Dividends received (512,437) (280,030) (27,342) (60,881)

(Gain) loss on disposal of investments

in land, net (106,055) (42,672) 18,430 (42,717)

(Gain) on disposal of property,

plant and equipment (22,688) - (21,108) -

(Gain) on disposal of investment in subsidiary (108,661) (423,037) - (228,362)

Net share of profit (loss) to minority

shareholders’ interest 56,921 50,062 - -

Profit (Loss) from operation before changes

in working capital 3,149,375 1,097,633 767,082 (212,023)

(Increase) decrease in trade accounts receivable 69,070 (15,781) 83,071 (3,050)

(Increase) decrease in investments

in held-for-trading securities 86,282 121,413 219,922 (8,659)

(Increase) decrease in inventories 81,561 (389,257) (75,392) (41,253)

(Increase) decrease in spare parts

and machinery supplies 17,859 (117,674) 4,564 58,305

(Increase) decrease in other current assets (428,727) (206,860) (131,944) (32,793)

Increase (decrease) in trade accounts payable 292,425 1,174,142 (146) 12,050

Increase (decrease) in accrued interest payable (288,758) 277,690 28,092 (27,203)

Increase (decrease) in accrued royalty fee (160,310) 134,546 (1,478) (1,910)

Increase (decrease) in accrued income tax 144,668 (2,726) - -

Increase (decrease) in other current liabilities (662,472) 363,846 (52,112) 3,918

Net cash receipts (payments) from operating activities 2,300,973 2,436,972 841,659 (252,618)

6 1A n n u a l R e p o r t 2 0 0 3


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St a te m e n t s o f C a s h F l ow s ( c o n t i n u e d )


Cash flows from investing activities

Cash receipts (payments) for advances

to related parties (25,632) - 253 59,604

Cash receipts from loans and advances

to related parties 250,000 - 9,446,041 -

Cash payments for loans and advances to

related parties (115,000) (334,527) (11,272,343) (401,691)

Restricted cash at banks 934,576 (1,018,348) - -

(Increase) decrease in amount due from

related parties - - 40,936 -

Cash receipts (payments) from loans to

employees, net 377 (9,025) 81 (47)

Cash receipts from disposal of investments

in subsidiaries and associated companies 1,161,921 - - 424,685

Cash payments for purchase of investments

in subsidiaries and associated companies (988,797) (38,750) - -

Cash receipts from disposal of other investments - 439,600 - 2,575

Cash payments for purchase of other

investments 12 (401,992) (326,413) (34,000) (75,627)

Cash payments for purchase project under

development (133,459) (48,996) (143,633) (114)

Cash receipts for project under development 91,251 - 91,251 -

Cash payments for deferred overburdened

expenses (735,296) (978,210) (250,435) (191,893)

Cash payments for purchase of property,

plant and equipment 13 (775,616) (913,931) (46,008) (349,744)

Cash receipts from disposal of property,

plant and equipment 53,806 - 47,093 304,179

Cash receipts from disposal of investment

in land 898,372 - 5,500 -

(Increase) decrease in other assets 289,757 314,555 164,017 -

Cash receipts from dividends 512,437 280,030 27,342 60,881

Dividends received from investments

in subsidiaries and associates - - 388,624 -

Dividends received from investment

in other company (formerly subsidiary

of the group) - 188,089 - 12,321

Net cash receipts (payments) from investing activities 1,016,705 (2,445,926) (1,535,281) (154,871)

2003Thousand Baht



2003Thousand Baht




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St a te m e n t s o f C a s h F l ow s ( c o n t i nu e d )


2003Thousand Baht



2003Thousand Baht


Cash flows from financing activities

Cash receipts from loans from bank 2,835,893 2,850,000 3,831,572 2,850,000

Repayment of loan from banks (3,500,000) (1,750,000) (4,540,121) (1,750,000)

Cash receipts from loan from related parties 5.5 (b) - - 871,000 -

Repayment of loan from related parties 5.5 (b) - - (123,231) -

Cash receipts from long-term loans 20 - 1,800,000 - 1,800,000

Repayment of long-term loans 20 (3,715,863) (846,444) (1,610,000) (310,000)

Cash receipts from debenture 21 5,000,000 - 5,000,000 -

Repayment of debentures 21 (3,259,523) (2,028,316) (1,960,406) (2,028,316)

Cash payment for deferred financing service fee 21 (18,765) - (18,765) -

Increase (decrease) in other liabilities (23,334) 98,253 - (71)

Dividend paid 26 (697,017) (450,265) (693,937) (444,105)

Cash receipts from share capital 22.1 566,114 34,742 566,114 34,742

Premium on share capital 22.1 1,255,379 58,262 1,255,379 58,262

Cash receipts from share subscriptions

received in advance 22.2 52,673 - 52,673 -

Net cash receipts (payments) from financing activities (1,504,443) (233,768) 2,630,278 210,512

Net increase (decrease) in cash and cash equivalents 1,813,235 (242,722) 1,936,656 (196,977)

Adjustment from foreign exchange translation - (10,409) - -

Cash and cash equivalents at beginning of the year 1,384,825 1,637,956 110,898 307,875

Cash and cash equivalents at end of the year 3,198,060 1,384,825 2,047,554 110,898

6 3A n n u a l R e p o r t 2 0 0 3


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St a te m e n t s o f C a s h F l ow s ( c o n t i n u e d )


2003Thousand Baht



2003Thousand Baht


Supplementary information for cash flows :

1. Cash paid during the year

Interest paid 1,308,273 755,489 890,681 524,937

Corporate income tax 49,928 46,303 - -

2. Cash and cash equivalents comprise :

Cash and cash equivalents - as presented

in the Balance Sheet 6 3,211,311 1,429,670 2,057,559 114,679

Less Bank overdrafts 18 (13,251) (43,639) (10,005) (3,781)

Cash and cash equivalents at

end of the year 3,198,060 1,386,031 2,047,554 110,898

3. Non-cash transaction

In 2002, the company sold machines to two overseas subsidiaries amounting to Baht 327.93 Million (See Note 5.1). As at 31

December 2003 and 2002, the two overseas subsidiaries have not made settlement and amounts due have been presented as amount

due from related parties (See Note 5.2).


>

1 . G e n e r a l i n f o r m a t i o nBanpu Public Company Limited is a public limited company and the address of its registered office is as follows :

1550 New Petchburi Road, Makkasan, Ratchthewi, Bangkok

The Company is listed on the Stock Exchange of Thailand. “The Company” means Banpu Public Company Limited. “The Group” means the Company,

subsidiaries and associates.

The Group is engaged in coal mining and power business. In 2002, the Company acquired 4 Indonesian coal mining companies (See Note 5.4) : as

a result of the acquisition the production capacity of the Group has increased significantly.

The Group has operations in Thailand and overseas.

As at 31 December 2003, the Company employs 365 people (2002 : 546 people) and the Group employs over 4,144 people (2002 : 3,637 people).

2. S i g n i f i c a n t a c c o u n t i n g p o l i c i e sThe principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below :

2.1 Basis of preparation

The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting

principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued by the Institute of Certified Accountants and

Auditors of Thailand and approved under law by the Board of Supervision of Auditing Practice appointed by the Minister of Commerce under

the Auditor Act B.E. 2505, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and

Exchange Act B.E. 2535.

The accounting principles applied may differ from generally accepted accounting principles adopted in other countries and jurisdictions.

The accompanying consolidated and company financial statements are therefore not intended to present the financial position and results of

operations and cash flows in accordance with jurisdictions other than Thailand. Consequently, these consolidated and company financial

statements are only addressed to those who are informed about Thai generally accepted accounting principles and practices.

The consolidated and company financial statements have been prepared under the historical cost convention except certain accounts as

disclosed in the accounting policies below.

The preparation of financial statements in conformity with Thai generally accepted accounting principles requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date

of the financial statements and the amounts of revenues and expenses in the reported periods. Although these estimates are based on

management’s best knowledge of current events and actions, actual results may differ from those estimates.

Where necessary, comparative figures have been adjust to conform with changes in presentation in the current year.

For the convenience of the user, an English translation of the consolidated and company financial statements have been prepared from

the financial statements that are issued in the Thai language.

2.2 Group accounting - Investment in subsidiaries and associated and interest in joint ventures

> Subsidiaries

Subsidiaries, which are those entities over which the Group has power to govern financial and operating policies are consolidated.

The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether

the Group controls another entity.

Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date

that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is

measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable

to the acquisition. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill.

See Note 2.8 for accounting policy of goodwill. Intercompany transactions, balances and unrealised gains on transactions between group

companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of

subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

In the Company’s separate financial statements investments in subsidiaries are reported using the equity method of accounting.

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N o te s to t h e C o n s o l i d a te da n d C o m p a ny F i n a n c i a l S t a te m e n t s31 December 2003 and 2002 Banpu Publ ic Company L imited

6 5A n n u a l R e p o r t 2 0 0 3

In cases where subsidiary incurs a loss, the Company will reduce the investment in the subsidiary company until it reaches zero, and

then records the excess of the loss over the capital as a liability when the Group has incurred obligations and guaranteed obligations in respect of

the subsidiaries undertaking.

A listing of the Group’s principal subsidiaries and the effects of acquisitions and disposals of subsidiaries are shown in Note 5.4.

> Associates and joint ventures

Investments in associates and joint ventures are accounted for using the equity method of accounting in the consolidated financial

statements. Under this method the Group’s share of the post-acquisition profits and losses of associates and joint ventures is recognised in the

income statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements

are adjusted against the cost of the investment.

Associates and joint ventures are entities over which the Group has significant influence or joint control, but which it does not control.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in

the associates and joint ventures; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset

transferred. The Group’s investment in associates and joint ventures includes goodwill (net of accumulated amortisation) on acquisition. When

the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint venture, the Group does not

recognise further losses unless the Group has incurred obligations or made payment on behalf of the associates and joint ventures.

In the Company’s separate financial statements the equity method is applied to account for investments in associates and joint ventures.

A list of the Group’s principal associates and joint ventures and the effects of acquisitions and disposals of associates and joint ventures

are shown in Note 5.4.

2.3 Foreign currency translation

Items included in the financial statements of each entity in the Group are measured using reporting currency. The consolidated financial

statements are presented in Thai Baht.

Foreign currency transactions are translated into reporting currency using the exchange rates prevailing at the date of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into reporting currency at the exchange rates prevailing at the

balance sheet date. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets

and liabilities denominated in foreign currencies are recognised in the statement of income.

Statements of income and cash flow of foreign entities are translated into Thai Baht at the weighted average exchange rates for the year

and balance sheets are translated at the exchange rates ruling on the balance sheet date. Currency translation differences arising from the

retranslation of the net investment in foreign subsidiaries and associates are taken to shareholders’ equity. On disposal of a foreign entity,

accumulated currency translation differences are recognised in the statement of income as part of the gain or loss on sale.

2.4 Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash

equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three

months or less and bank overdrafts. Bank overdrafts are included in within current liabilities on the balance sheet.

2.5 Trade accounts receivable

Trade accounts receivable are carried at original invoice amount less allowance for doubtful receivables based on a review of all

outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the receivable and

the amount expected to be collectible. Bad debts are written off during the year in which they are identified.

2.6 Inventories, spare parts and machinery supplies

Inventories, spare parts and machinery supplies are stated at the lower of cost or net realizable value. Cost is determined by the

weighted average method. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the

inventory, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. The cost of finished goods and

work in progress comprises raw materials, direct labour, other direct costs and related production overheads, the latter being allocated on

the basis of normal operating activities. Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs

of completion and selling expenses. Allowance is made, where necessary, for obsolete, slow-moving and defective inventories, spare parts

and machinery supplies.

2.7 Other investments

Investments other than investments in subsidiaries, associates and joint ventures are classified into the following four categories : trading,

held-to-maturity, available-for-sale and general investments. The classification is dependent on the purpose for which the investments were

acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation

on a regular basis. Investments that are acquired principally for the purpose of generating a profit from short-term fluctuations in price are


Purchases and sales of investments are recognized on the trade date, which is the date that the Group commits to purchase or sell the

investments. Cost of investment includes transaction costs. Trading and available-for-sale investments are subsequently carried at fair value.

Held-to-maturity investments are carried at amortised cost using the effective yield method. Realised and unrealized gains and losses arising

from changes in the fair value of trading investments are included in the income statement in the period in which they arise. Unrealised gain and

losses arising form changes in the fair value of investments classified as available-for-sale are recognized in equity. The fair value of investments

are based on quoted bid price by reference to the Stock Exchange of Thailand. When investments classified as available-for-sale are sold or

impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment in securities. In the

statement of cash flows, trading investments are presented within the section on operating activities as part of changes in working capital.

In the statement of cash flows, trading investments are presented within the section on operating activities as part of changes in working

capital.

General investments are carried at cost less impairment.

A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of

the investment is higher than its recoverable amount, impairment loss is charged to the statement of income.

On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the

statement of income. When disposing of part of the Group’s holding of a particular investment in debt or equity securities, the carrying

amount of the disposed part is determined by the weighted average carrying amount of the total holding of the investment.

2.8 Other non-current assets

> Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired

subsidiary/associated undertaking at the date of acquisition. Goodwill on acquisitions of subsidiaries is reported in the consolidated balance

sheet as an intangible assets. Goodwill on acquisitions of associates is included in investment in associates. Goodwill is amortised using the

straight-line method over the useful life. Management determines the estimated useful life of goodwill based on its evaluation of the respective

companies at the time of the acquisition, considering factors such as existing market share, potential growth and other factors inherent in

the acquired companies.

Goodwill arising on acquisitions of the Group is amortised on the straight line basis over 5-10 years.

At each balance sheet date the Group assesses whether there is any indication of impairment. If such indications exist an analysis is

performed to assess whether the carrying amount of goodwill is fully recoverable. A written down is made if the carrying amount exceeds

the recoverable amount.

> Mining property rights

Mining property rights represent the excess of the cost of an acquisition over the fair value of net assets, which in managements

view represents future economic benefits attributable to the mining rights held by those subsidiaries, which approximate to net book value of

P.T. Indo Tambangraya Megah and its subsidiaries in Indonesia as at the date of acquisition. Mining property rights are amortised using the

units of coal produced in relation to the total expected reserves (saleable reserve and resources), based on the estimated reserves reviewed

by an independent geologist appraiser.

> Expenses incurred on mine exploration, mine development and overburden

Expenses incurred on mine exploration, mine development and overburden (if any) are deferred and amortised using the units of coal

production in relation to the total expected reserves (saleable reserve and resources) of the project.

> Deferred financing service fee

Deferred financing fee is initially recorded at cost and carried at cost less accumulated amortisation. Amortisation is calculated using

the straight-line method through the income statements over the life of the loan agreements. The difference between the straight-line method

and the effective interest method does not have material impact to the financial statements as a whole. Deferred financing service fee is

recognized as cost of debt and presented by deducting directly from loan.

classified as trading investments and included in current assets; for the purpose of these financial statements short term is defined as three

months. Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity

and are included in non-current assets, except for maturities within twelve months from the balance sheet date which are classified as current

assets. Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in

interest rates, are classified as available-for-sale; and are included in non-current assets unless management has expressed the intention of

holding the investment for less than twelve months from the balance sheet date or unless they will need to be sold to raise operating capital,

in which case they are included in current assets. Investments in non-marketable equity securities are classified as general investments.

6 7A n n u a l R e p o r t 2 0 0 3

2.9 Property, plant and equipment

Property, plant and equipment are shown at historical cost less accumulated depreciation.

Depreciation is calculated on the straight line method to write off the cost of each asset, except for land as it is deemed to have

an indefinite life, to their residual values over their estimated useful life as follows :

Land improvement, buildings and construction 20 years

Machinery and equipment period of the mine right and 10 years

Furniture 5 years

Office equipment and tools 5 years

Motor vehicles 5 years

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable

amount.

Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of major

renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally

assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful

life of the related asset.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit.

2.10 Impairment of long lived assets

Property, plant and equipment and other non-current assets, including goodwill and intangible assets are reviewed for impairment

losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is

recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s net

selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately

identifiable cash flows.

2.11 Leases

Leases of property, plant or equipment which substantially transfer all the risks and rewards of ownership are classified as finance leases.

Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the

minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the

finance balance outstanding. The outstanding rental obligations, net of finance charges, are included in other long-term payables. The interest

element of the finance cost is charged to the statement of income over the lease period. Property, plant or equipment acquired under finance

leases is depreciated over the shorter of the useful life of the asset or the lease term.

Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases.

Payments made under operating leases are charged to the statement of income on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of

penalty is recognized as an expense in the period in which termination takes place.

2.12 Deferred income taxes

The Group does not recognize income taxes payable or receivable in future periods in respect of temporary differences arising from

differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. The principal temporary

differences arise from depreciation on property, plant and equipment, revaluations of certain non-current assets and of derivative contracts

and tax losses carried forward.

However, certain subsidiaries overseas have adopted deferred income taxes accounting as required by the accounting standards of

such country (See Note 31).

2.13 Employee benefits

The Group operates a provident fund that is a defined contribution plan, the assets of which are held in a separate trust fund. The

provident fund is funded by payments from employees and by the relevant Group companies. Contributions to the provident fund are charged

to the statement of income in the year to which they relate.

The Group does not account for post employment benefits payable to employees.

2.14 Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that

an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

Provision for environmental rehabilitation (if any) is recognized by units of sale at the rate determined by the Company’s geologist.

The provisioning rate is based on the estimated cost for mine rehabilitation through to the end of the mine. The Group reviews and revises

the rate to reflect the actual expenses incurred on a regular basis.


2.15 Share capital

Incremental external costs directly attributable to the issue of new shares, other than in connection with a business combination,

are shown in equity as a deduction, net of tax, from the proceeds. Share issue costs incurred directly in connection with a business combination

are included in the cost of acquisition.

2.16 Revenue recognition

Revenue comprises the invoiced value for the sale of goods and services net of value-added tax, rebates and discounts, and after

eliminating sales within the Group for the consolidated financial statements. Revenue from sales of goods is recognized when significant risks

and rewards of ownership of the goods are transferred to the buyer.

Sales of coal are quantified by weight at the front mine. The increment or reduction of coal values as a result of quality and weight

noticed by customers will be recorded in the month of goods delivery.

Service income is recognized when services are rendered.

Other revenues earned by the Group are recognized on the following bases :

> interest income – accrual basis.

> dividend income – when the Company’s right to receive payment is established.

2.17 Dividends

Dividends are recorded in the consolidated and company financial statements in the period in which they are approved by the Board

of Director or shareholders.

2.18 Segment reporting

Geographic segments provide products or services within a particular economic environment that is subject to risks and returns that

are different from those of components operating in other economic environments.

Segment information is presented by geographic area of the Group’s operations.

2.19 Related parties

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under

common control with, the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company.

Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence

over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these

individuals and companies associated with these individuals also constitute related parties.

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the

legal form.

2.20 Financial risk management

> Financial risk factors

The Group’s activities expose it to a variety of financial risks, including the effects of changes in debt and equity market price, foreign

currency exchange rates and interest rates. The Group’s overall risk management programme focuses on the unpredictability of financial

markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial

instruments such as forward foreign currency swaps to hedge certain exposure.

Risk management is carried out by a central treasury department under policies approved by the Board of Directors. Group Treasury

identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units.

> Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with

respect US Dollars. Entities in the Group use forward contracts and currency swaps, transacted with Group Treasury, to hedge their exposure to

foreign currency risk in connection with their measurement currency. Group Treasury is responsible for hedging the net position in each currency

by using currency borrowings and external forward contracts or currency swap contracts.

> Interest rate risk

The Group’s income and operating cash flows are substantially independent of changes in market interest rates. All interest rate

derivative transactions are subject to approval by the Board of Directors before execution. The Group has no significant interest-bearing

assets other than cash. The Group’s policy is to maintain borrowing in both fixed and floating rate instruments. The Group sometimes

borrows at variable rates.

6 9A n n u a l R e p o r t 2 0 0 3

> Credit risk

The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and services

are made to customers with an appropriate credit history. Derivative counter parties and cash transactions are limited to high credit quality

financial institutions. The Group has policies that limit the amount of credit exposure to any one financial institution.

> Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through

an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying

business, Group Treasury aims at maintaining flexibility in funding by keeping committed credit lines available.

> Accounting for derivative financial instruments and hedging activities

The Group is party to derivative financial instruments, which mainly comprise foreign currency forward contracts and foreign currency

swap agreements. Such instruments are recognized in the financial statements on inception.

Foreign currency forward contracts and foreign currency swap contracts protect the group from movements in exchange rates by

establishing the rate at which a foreign currency asset will be realised or a foreign currency liability settled. Any increase or decrease in the

amount required to realise the asset or settle the liability is offset by a corresponding movement in the value of the forward exchange

contract. The gains and losses on the derivative instruments and the underlying financial asset or liability are therefore offset for financial

reporting purposes and are not recognized in the financial statements. The fee incurred in establishing each agreement is amortised over

the contract period, if any.

Disclosures about derivative financial instruments to which the group is a party are provided in Note 33.

> Fair value estimation

The fair value of publicly traded derivatives and trading and available-for-sale investments is based on quoted market prices at the

balance sheet date. The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance

sheet date.

Information on the fair values of borrowing, currency swaps and foreign currency forward exchange contracts is included in Note 33.

3 . C h a n g e i n r e c o r d i n g a n d r e p o r t i n g c u r r e n c yEffective on 1 January 2003, all subsidiaries in Indonesia changed their recording and reporting currency from the Indonesian Rupiah to US Dollars

as it is considered by management that using the US Dollars better reflects the economic effects and substance of the underlying companies’ transactions,

events and circumstances. The cash flows arising from the companies’ activities are primarily denominated in US Dollars, sales are primarily in US Dollars

and predominantly to export markets and the cost of mining and operating expenses, including the development of the companies coal mining area, are

primarily denominated in US Dollars.

Prior to the approval by the Indonesian government, the Indonesian subsidiaries were not allowed to record the transactions and report in a currency

other than the Indonesian Rupiah.

The change in recording and reporting currency was approved by the Indonesian government effective from 1 January 2003. After 1 January 2003,

all subsidiaries in Indonesia have recorded and reported all transactions in US Dollars. From 1 January 2003, these subsidiaries will recognize all transactions

and balances in currencies other than US Dollar as foreign currency transactions and will account for such foreign currency transactions in accordance with

the Group accounting policy as set out in the consolidated financial statements for 31 December 2003, Note 2.3 above.

4. P r i o r y e a r a d j u s t m e n tAs set out in Note 3, the Group has received approval from the Indonesian government to change the recording and reporting currency of its

Indonesian subsidiaries from Indonesian Rupiah to US Dollars on 1 January 2003, after the acquisition of these subsidiaries. This change, which has been

accounted for retrospectively, impacts the amounts of the identifiable assets and liabilities identified when the acquisition of these Indonesian investments

was initially accounted for in 2002. The Company has made retrospective adjustments to the reported fair values of identifiable assets and liabilities of

these Indonesian subsidiaries acquired using US Dollars. The allocation of the corresponding residual, has been adjusted accordingly. Therefore, the

consolidated and company financial statements for the year ended 31 December 2002 have been restated for comparative purposes with the following

effects :


Consolidated balance sheet as at 31 December 2002

Increase in current assets 92,066

Increase in fixed assets 1,473,109

(Decrease) in mining property rights (1,994,657)

Increase in non-current assets 326,626

(Decrease) in total assets (102,856)

Increase in current liabilities 105,426

Increase in non-current liabilities 334,932

Increase in minority interest 486,877

(Decrease) in adjustment from foreign exchange translation (415,550)

(Decrease) in unappropriated retained earnings (614,541)

(Decrease) in total liabilities and shareholders’ equity (102,856)

Consolidated income statement

(Decrease) in net profit for the year ended 31 December 2002 (614,541)

5 . R e l a t e d p a r t y t r a n s a c t i o n s5.1 Transactions during the years ended 31 December are as follows :

Sales of goods and services

> Subsidiaries

Banpu Minerals Co., Ltd. - - 20,365 -

Banpu International Ltd. - - 276,646 110,207

Silamani Marble Co., Ltd. - - - 120,040

> Associate

MRD-ECC Co., Ltd. 45,967 - 45,967 14,029

Total 45,967 - 342,978 244,276

Purchases of goods and cost of services

> Subsidiary

PT. Jorong Barutama Greston - - 94,932 59,889

Total - - 94,932 59,889

Other income

> Subsidiaries

Banpu Power Co., Ltd. - - 2,801 -

Banpu International Co., Ltd. - - 1,200 -

Chiang Muan Mining Co., Ltd. - - 1,400 2,400

PT. Jorong Barutama Greston - - - 11,457

PT. Nusantara Thai Mining Services - - - 12,135

PT. Indominco Mandiri - - - 48

PT. Kitadin - - - 276

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

C O N S O L I D A T E D

2 0 0 2

Thousand Baht

7 1A n n u a l R e p o r t 2 0 0 3

> Associates

Tri Energy Co., Ltd. - 16,493 - 36

BLCP Power Ltd. 18,463 271 - 271

MRD-ECC Co., Ltd. - 1,759 - 2,644

Mineral Resources Development Co., Ltd. - 652 - -

Total 18,463 19,175 5,401 29,267

Sales of fixed assets

> Subsidiaries

PT. Jorong Barutama Greston - - - 207,094

PT. Kitadin - - - 120,834

Total - - - 327,928

Interest income

> Subsidiaries

Banpu Minerals Co., Ltd. - - 16,352 10,121

Universal Exploration Co., Ltd. - - 105 120

Banpu Power Ltd. - - 47,559 80,206


Banpu Singapore Pte. Ltd. - - 1,659 15,996

Banpu Mineral (Singapore) Pte. Ltd. - - 15,299 -

Banpu Coal Power Ltd. - - 461 -

Banpu Power International Ltd. - - 7,192 -


PT. Nusantara Thai Mining Services - - 836 7,275

PT. Centralink Wisesa International - - 12,094 -

PT. Indo Tambangraya Megah - - 7,375 -

PT. Trubaindo Coal Mining - - 8,889 -

PT. Barasentosa Lestari - - 171 -

PT. Indominco Mandiri - - 104,361 -

PT. Kitadin - - 9,692 309

Synergy Power Co., Ltd. - - 198 -

BP Overseas Development Co., Ltd. - - 2,977 -

> Associates

Amata Power (Bien Hua) Ltd. 236 291 - -

BLCP Power Ltd. 5,708 1,495 - -

MRD-ECC Co., Ltd. - - - 881

Others 6,735 6,735 6,735 6,735

Total 12,679 8,521 357,138 262,080

Interest expenses

> Subsidiary

Universal Exploration Co., Ltd. - - 3,795 -

Total - - 3,795 -

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


The pricing policies for transactions between subsidiaries, associates and related parties are set out below :

> The prices of sales and services charged to subsidiaries, associates and related parties approximate to those charged to third parties.

> Management fees between subsidiaries and associates is charged according to agreements.

> Sales of fixed assets to subsidiaries and associates are transacted at the net book value of the assets at the transaction date.

> For loans, borrowings, interest income and interest expenses, the Company charges interest by referring to interest rates of fixed

bank deposits for 12 month accounts and interest rates of MOR of Kasikorn Bank, Bangkok Bank and Standard Chartered Bank

and charges in accordance with the percentage of shareholding between the Company and the subsidiaries on the following basis :

> Percentage of shareholding > 99%; interest at the rate of 1.75% - 2.75% per annum.

> Percentage of shareholding ranging 50% - 99%; interest rate of 7.75% - 9.71% per annum.

> Percentage of shareholding < 50%; interest rate of 15.0% per annum plus financial expenses at the rate of 2.0% per annum.

5.2 Amounts due from related parties as at 31 December comprise :

Trade accounts receivable

> Subsidiaries (Note 9)


Banpu Mineral Co., Ltd. - - 3,927 -

> Associate

MRD-ECC Co., Ltd. (Note 9)(*) 101,444 126,748 101,444 126,748

Total 101,444 126,748 132,805 153,166

Interest receivable

> Subsidiaries


Banpu Power Ltd. - - 173,527 125,969

Universal Exploration Co., Ltd. - - - 54

Banpu International Ltd. - - 70 9,966

Banpu Singapore Pte. Ltd. - - 828 60,134

Banpu Minerals (Singapore) Pte. Ltd. - - 1,465 7,306


PT. Nusantare Thai Mining Services - - 1,804 1,096

PT. Centalink Wisesa International - - 12,094 -



PT. Barasentosa Lestari - - 166 -

PT. Indominco Mandiri - - 16,668 -

PT. Kitadin - - 2,636 309

BP Overseas Development Co., Ltd. - - 2,956 -

> Associates

BLCP Power Ltd. 6,247 1,496 - -

Amata Power (Bien Hua) Ltd. 112 168 - -

Others 13,753 7,018 13,753 7,018

Total 20,112 8,682 241,769 246,347

(*) As of 31 December 2003 trade accounts receivable amounting to Baht 101.44 million (2002 : Baht 126.75 million) are the trade accounts receivable of an associate,

formally a subsidiary of the Group, which are due for settlement when the purchased goods are used in production.

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

7 3A n n u a l R e p o r t 2 0 0 3

Other receivable

> Subsidiaries

Yen Bai Banpu Calcium Carbonate Co., Ltd. - - 100 101

Chiang Muan Mining Co., Ltd. - - - 214

Banpu International Ltd. - - 1,200 -



PT. Nusantara Thai Mining Services - - 9,003 9,805

PT. Kitadin - - 112,540 121,110


> Associate

MRD-ECC Co., Ltd. - 529 - 529

Total - 529 368,814 399,575

Total amounts due from related parties 20,112 9,211 610,583 645,922

5.3 Loans and advances to related parties as at 31 December comprise :

(a) Advances to related parties

Advances

> Subsidiaries

Banpu Minerals Co., Ltd. - - 458 40

Universal Exploration Co., Ltd. - - 2 1

Banpu Power Ltd. - - 3,110 144

Yen Bai Banpu Calcium Carbonate Co., Ltd. - - 2,612 2,715

Banpu International Ltd. - - 684 5

Silamani Corp. Ltd. - - 1 1

Edifice Engineering Co., Ltd. - - - 41

Chiang Muan Mining Co., Ltd. - - 48 23

Banpu Minerals (Singapore) Pte. Ltd. - - 79 79

PT. Nusantara Thai Coal - - 309 309



PT. Trubaindo Coal Mining - - 139 -

PT. Indominco Mandiri - - 264 -

PT. Kitadin - - 86 -

Synergy Power Co., Ltd. - - 527 -

> Associates

Tri Energy Co., Ltd. - 2,870 - 6

BLCP Power Ltd. 60,332 39,854 150 5,541

MRD-ECC Co., Ltd. 253 99 253 99

Mineral Resources Development Co., Ltd. - 8 - 8

Others 78 81 78 81

Total advances to related parties 60,663 42,912 144,772 140,282

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


(b) Long-term loans to related parties

Long-term loans

> Subsidiaries


Universal Exploration Co., Ltd. - - - 7,500

Banpu Power Ltd. - - 850,513 2,803,333

Banpu International Ltd. - - 47,078 2,071,430

Banpu Singapore Pte. Ltd. - - 74,485 460,332


PT. Jorong Barutama Greston - - 1,130,848 1,128,498


PT. Centralink Wisesa International - - 2,074,636 -



PT. Barasentosa Lestari - - 4,745 -

PT. Indominco Mandiri - - 1,932,362 -

PT. Kitadin - - 434,357 112,977

BP Overseas Develompemt Co., Ltd. - - 353,948 -

> Associates

Amata Power (Bien Hua) Ltd. 5,929 6,507 - -

BLCP Power Ltd. - 150,000 - -

> Other related company

Aromatics (Thailand) Plc. 336,726 336,726 336,726 336,726

Total 342,655 493,233 9,398,814 7,872,043

Less Current portion of long-term loan - (150,000) (761,053) -

Total long-term loans to related parties 342,655 343,233 8,637,761 7,872,043

Consolidated

As at 31 December 2003 long-term loans to associates and other related parties represent loans in US Dollars amounting to US Dollars 0.15 million and

in Thai Baht amounting to Baht 336 million (2002 : US Dollars 0.15 million and Baht 486.73 million) bearing interest at rates of 2% - 3.84% per annum

(2002 : 2% - 4.34% per annum).

Company

As at 31 December 2003 long-term loans to subsidiaries and other related parties represent loans in US Dollars of US Dollars 183 million and in

Thai Baht currency of Baht 2,128 million (2002 : US Dollars 47.05 million and Baht 5,508 million) bearing interest at rates of 1.34% - 9.71% per annum

(2002 : 1.34% - 9.71% per annum).

Movement of long-term loans to related parties for the years ended 31 December

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

Beginning balance 493,233 2,167,280 7,872,043 7,977,806

Increase for the year 100,000 150,000 11,257,343 2,333,328

Repayment for the year (250,000) - (9,446,041) (2,481,978)

Conversion of loan to equity investment in subsidiaries - (1,801,548) - -

Adjustment from exchange rate (578) (22,499) (284,531) 42,887

Ending balance 342,655 493,233 9,398,814 7,872,043

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

7 5A n n u a l R e p o r t 2 0 0 3

Direct shareholding

Banpu Minerals Co., Ltd. Thailand Coal mining and trading 99.99 99.99

Universal Exploration Co., Ltd. Thailand Drilling & exploration 99.98 99.98

Banpu Power Ltd. Thailand Investment in power 99.99 99.99

Yen Bai Banpu Calcium Carbonate Co., Ltd. Vietnam CaCo3 production and trade in Vietnam 66.66 66.66

BP Overseas Development Co., Ltd. British Virgin Islands Investment in coal mining and trading 100.00 (1) -

Indirect shareholding

Banpu Minerals Co., Ltd.

Subsidiary companies are as follows :

1. Ban-Sa Mining Co., Ltd. Thailand Investment in coal mining and trading 89.18 89.18

Subsidiary company is as follows :

1.1 Chiang Muan Mining Co., Ltd. Thailand Coal mining and trading 51.00 51.00

2. Banpu International Ltd. Thailand Coal trading 99.99 99.99

3. Silamani Corp., Ltd. Thailand Coal trading 99.99 99.99

4. Edifice Engineering Co., Ltd. Thailand Coal ash management 99.99 99.99

5. Chiang Muan Mining Co., Ltd. Thailand Coal mining and trading 49.00 49.00

6. Silamani Marble Co., Ltd. Thailand Coal trading 99.96 99.96

7. Banpu Singapore Pte. Ltd. Singapore Coal trading 100.00 100.00

8. Banpu Minerals (Singapore) Pte. Ltd. Singapore Coal trading 100.00 100.00


8.1 PT. Nusantara Thai Coal Indonesia Coal mining and trading in Indonesia 95.00 95.00

8.2 PT. Jorong Barutama Greston Indonesia Coal mining and trading in Indonesia 95.00 95.00

8.3 PT. Nusantara Thai Mining Services Indonesia Mining related services in Indonesia 95.00 95.00

8.4 PT. Centralink Wisesa International Indonesia Investment in coal 95.00 95.00


8.4.1 PT. Indo Tambangraya Megah Indonesia Investment in coal 99.99 99.99

Subsidiary companies are

as follows :

8.4.1.1 PT. Trubaindo Coal Mining Indonesia Coal mining and trading in Indonesia 90.00 90.00

8.4.1.2 PT. Barasentosa Lestari Indonesia Coal mining and trading in Indonesia 86.00 86.00

8.4.1.3 PT. Indominco Mandiri Indonesia Coal mining and trading in Indonesia 99.99 (2) 65.00

8.4.1.4 PT. Kitadin Indonesia Coal mining and trading in Indonesia 99.99 99.99

Name of Company

Percentage of Direct Shareholding

2 0 0 3

%

2 0 0 2

%

Country Business

(1) During the third quarter of 2003, there were two companies incorporated as follows :

1. BP Overseas Development Co., Ltd., which is wholly owned by Banpu Public Company Limited at par value totaling US Dollars 2, equivalent to Baht 83.

2. Synergy Power Co., Ltd. which is 99.99% owned by Banpu Power International Ltd. at the par value totaling US Dollars 11 million, equivalent to Baht 461 million.

(2) In the first quarter of 2002, the Group acquired 65% of the share capital of 4 Indonesian subsidiaries in the amount of US Dollars 52.36 million, equivalent to

Baht 2,285 million. In the first quarter of 2003, the Group subsequently additional acquired 35% of the share capital of the subsidiary in the amount of US Dollars

10.5 million, equivalent to Baht 447 million. As a result, the proportion of investment was increased from 65% to 99.99% in 2003. See detail of net assets

acquired in Note 15.

5.4 Investments in subsidiaries and associated companies

(a) Subsidiaries and associated companies and percentage of shareholdings consist of :


(b) Book values of investments in subsidiaries and associated companies through direct shareholdings are as follows :

Subsidiaries

Banpu Mineral Co., Ltd. - - 39,994 39,994

Universal Exploration Co., Ltd. - - 778,931 778,931

Banpu Power Co., Ltd. - - 2,000,000 2,000,000

Yen Bai Banpu Calcium Carbonate Co., Ltd. - - 73,946 73,946

BP Overseas Development Co., Ltd. - - - -

Name of Company

Percentage of Direct Shareholding

2 0 0 3

%

2 0 0 2

%

Country Business

9. MRD-ECC Co., Ltd. Thailand Ball clay productions and trading 30.00 30.00


9.1 Mineral Resources Development

Co.,Ltd. Thailand Kaolin production and trading 99.99 99.99

Universal Exploration Co., Ltd.


1. Promsin Co., Ltd. Thailand Real estate development 99.99 99.99

Banpu Power Ltd.


1. Banpu Gas Power Ltd. Thailand Investment in power - (4) 99.99

Associated company is as follows :

1.1 Tri Energy Co., Ltd. Thailand Power production and trading - (4) 37.50

2. Banpu Coal Power Ltd. Thailand Investment in power 2.34 (3) 99.99


2.1 BLCP Power Ltd. Thailand Power production and trading 35.00 (3) 50.00

3. Banpu Power Vietnam 1 Pte. Ltd. Singapore Investment in power 100.00 100.00


3.1 Amata Power (Bien Hua) Ltd. Vietnam Power production and trading 30.00 30.00

4. Banpu Power International Ltd. Bahamas Islands Investment in power 100.00 100.00


4.1 Synergy Power Co., Ltd. Mauritius Islands Investment in power 99.99 (1) -

Subsidiary and associated companies

are as follows :

4.1.1 Banpu Coal Power Ltd. Thailand Investment in power 97.66 -

4.1.2 BLCP Power Ltd. Thailand Power production and trading 15.00 -

5. Banpu Rayong Power Ltd. Thailand Investment in power 99.93 99.93

(1) During the third quarter of 2003, there were two companies incorporated as follows :

1. BP Overseas Development Co., Ltd., which is wholly owned by Banpu Public Company Limited at par value totaling US Dollars 2, equivalent to Baht 83.

2. Synergy Power Co., Ltd. which is 99.99% owned by Banpu Power International Ltd. at the par value totaling US Dollars 11 million, equivalent to Baht 461 million.

(3) During the third quarter of 2003, these companies increased their share capital but the Companies which were the former shareholders did not increase

their investment, so the percentage of shareholding of the former shareholders decreased.

(4) During the fourth quarter of 2003, investments in these companies were disposed of at the price of Baht 1,162 million. Gains from this disposal of Baht

109 million are included in the statement of income.

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2 ( R e s t a t e d )

Thousand Baht

7 7A n n u a l R e p o r t 2 0 0 3

(c) As at 31 December 2003, the Company uses its investment in a subsidiary and an associated company, with a cost of Baht 742.2 million

(2002 : Baht 50 million), as collateral for a long-term loans from financial institutions of that associated company.

5.5 Amount due to, advances and long-term loan from related parties

(a) Amount due to and advances from related parties :

Associates

Amata Power (Bien Hua) Ltd. 58,606 58,606 - -

Tri Energy Co., Ltd. - 1,283,925 - -

BLCP Power Ltd. 740,064 198,172 - -

MRD-ECC Co., Ltd. 28,500 28,500 - -

Investments in subsidiaries and associated companies – cost method 827,170 1,569,203 2,892,871 2,892,871

Add (Less) Take to equity account (294,626) (55,371) 4,992,797 349,196

Investments in subsidiaries and associated

companies – equity method 532,544 1,513,832 7,885,668 3,242,067

Movement of investments in subsidiaries and associated companies for the years ended 31 December are as follows :

Opening balance 1,513,832 1,256,476 4,272,158 2,284,703

Restatements (Note 4) - - (1,030,091) -

Opening after restatements 1,513,832 1,256,476 3,242,067 2,284,703

Addition of investment 541,892 38,750 - -

Fair value adjustments taken up in equity by subsidiaries

and associates - - 3,464,733 498,248

Adjustment of exchange rate (945,447) (233,751) 122,526 (361,992)

Dividends received - - (388,624) (12,321)

Disposal of investments (1,053,260) - - (196,685)

Add Take to equity account 573,561 452,357 1,444,966 1,030,114

Elimination of unrealized gain on sales of assets to associate (98,034) - - -

Ending balance 532,544 1,513,832 7,885,668 3,242,067

> Universal Exploration Co., Ltd. - - 3,795 -

> Other related parties - - 1,022 74

Total amount due to and advances from related parties - - 4,817 74

(b) Long-term loan from subsidiary :

> Universal Exploration Co., Ltd. - - 747,769 -

Total long-term loan from subsidiary - - 747,769 -

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


Opening balance - - - -

Increase - - 871,000 -

Repayment - - (123,231) -

Closing balance - - 747,769 -

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

Cash on hand 921 639,693 157 177

Deposit held at call with banks 1,860,390 789,977 707,402 114,502

Bills of exchange 1,350,000 - 1,350,000 -

Total cash and cash equivalents 3,211,311 1,429,670 2,057,559 114,679

The effective interest rate on deposit held at call with banks was 1.00% – 1.25% per annum (2002 : 1.25% – 1.50% per annum).

Bills of exchange are denominated in Thai Baht currency with a maturity of 90 days. The bills of exchange carry interest at the rate of 4.35% per annum.

7 . R e s t r i c t e d c a s h a t b a n k sAs at 31 December 2002, restricted cash at banks included cash at Escrow bank accounts in foreign currency of an overseas subsidiary amounting

to Baht 934.58 million (equivalent to Indonesian Rupiah 201,310 million) which was used as a reserve for the repayment of a long-term loan in accordance with

the subsidiary’s project financing loan agreement.

In February 2003, restricted cash was released.

8 . I n v e s t m e n t s o n h e l d - f o r - t r a d i n g s e c u r i t i e s

Investments on held-for-trading securities 19,686 170,991 13,145 164,451

Add Adjustment to fair value held-for-trading securities 316,705 76,478 220,179 74,578

Investments on held-for-trading securities, net 336,391 247,469 233,324 239,029

Movement of investments on held-for-trading securities for the years ended 31 December are as follows :

Opening value 247,469 - 239,029 -

Transfer - 223,598 - 223,598

Additions - 6,540 - -

Disposal (219,922) (59,147) (219,922) (59,147)

Change in fair value of investments 308,844 76,478 214,217 74,578

Closing value 336,391 247,469 233,324 239,029

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

Company

As at 31 December 2003, the long-term loan from a subsidiary represents a Baht currency loan amounting to Baht 748 million bearing interest at the

rate of 1.75% per annum.

Movement of long-term loan from a subsidiary for the years ended 31 December are as follows :

7 9A n n u a l R e p o r t 2 0 0 3

9 . T r a d e a c c o u n t s r e c e i v a b l e , n e tTrade accounts receivable comprise of :

Trade accounts receivables

> Subsidiaries (Note 5.2) - - 31,361 26,418

> Associate (Note 5.2) 101,444 126,748 101,444 126,748

> Third parties 1,162,112 1,205,878 310,910 373,620

1,263,556 1,332,626 443,715 526,786

Less Allowance for doubtful accounts (209,025) (209,025) (175,179) (175,179)

Trade accounts receivable, net 1,054,531 1,123,601 268,536 351,607

Trade accounts receivable balance is aged as follows :

Trade accounts receivable under credit term 937,895 1,019,077 243,259 324,028

Aging of trade accounts receivable due for payment

> Less than 3 months 47,775 87,014 7,492 10,071

> Over 3 months but less than 6 months 50,023 - 65 -

> Over 6 months but less than 12 months 1,457 - 1,012 -

> Over 12 months 29,550 29,679 16,708 17,508

> Trade debtor under the central Bankruptcy Court 196,856 196,856 175,179 175,179

Total trade accounts receivable 1,263,556 1,332,626 443,715 526,786

Less Allowance for doubtful accounts (209,025) (209,025) (175,179) (175,179)

Trade accounts receivable, net 1,054,531 1,123,601 268,536 351,607

As at 31 December 2003, a trade accounts receivable debtor under the Central Bankruptcy Court of Baht 175.18 million (2002 : Baht 175.18 million)

was ordered by the Central Bankruptcy Court to fully repay the debt to the Company in 20 semi-annually installments commencing from 3 October 2001 with

installments every 6 months. However, such trade accounts receivable debtor has negotiated with the Company to change the schedule to repay the debt in

13 semi-annually installments commencing from March 2004, of Baht 10.3 million each, except for the last 2 installments to be Baht 20.6 million.

1 0 . I n v e n t o r i e s , n e t

Finished goods - at cost 890,924 972,485 494,220 418,828

Less Allowance for obsolescence (39,522) - - -

Inventory, net 851,402 972,485 494,220 418,828

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


Investments in other companies :

Investments in available-for-sale securities 3,799,367 3,799,367 647,636 647,636

General investments 740,122 338,130 141,462 107,462

Total investments in other companies 4,539,489 4,137,497 789,098 755,098

Add Adjustment to fair value for investments in available-for-sale

securities 12,092,978 889,762 7,959,333 220,850

Less Allowance for impairment - general investments (195,707) (195,707) (29,007) (29,007)

Investments in other companies, net 16,436,760 4,831,552 8,719,424 946,941

Movements of other investments for the years ended 31 December are as follows :

Opening value, net 4,831,552 3,832,491 946,941 682,125

Acquisitions 401,992 326,413 34,000 75,627

Disposals - (16,563) - (2,213)

Changes in reclassification of investments - (223,598) - (223,598)

Changes in fair value of investments 11,203,216 912,809 7,738,483 415,000

Closing value, net 16,436,760 4,831,552 8,719,424 946,941

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

Prepayments 301,324 214,671 145,939 87,768

Business advance to employees 308,824 114,491 70,318 114,491

Value added tax 33,162 17,078 871 1,567

Account receivable – others 115,671 33,360 108,727 165

Accrued income 32,230 16,064 9,832 5,916

Advances 56,616 8,745 4,919 -

Forward and currency swap contracts receivable 279,789 13,575 279,789 13,575

Others 1,123 17,921 - 129

Total other current assets 1,128,739 435,905 620,395 223,611

1 2 . O t h e r i n v e s t m e n t s , n e t

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

8 1A n n u a l R e p o r t 2 0 0 3

1 3 . P r o p e r t y , p l a n t a n d e q u i p m e n t s , n e t

As at 31 December 2002

Cost 97,286 129,566 474,039 1,100,839 4,512,744 74,110 102,521 552,575 7,043,680

Less Accumulated depreciation - (54,287) (192,344) (522,643) (1,372,260) (62,000) (50,600) - (2,254,134)

Net book amount 97,286 75,279 281,695 578,196 3,140,484 12,110 51,921 552,575 4,789,546

Year ended 31 December 2003

Opening net book amount 97,286 75,279 281,695 578,196 3,140,484 12,110 51,921 552,575 4,789,546

Restatements (Note 4) (17) (13,959) 1,575,690 2,779,842 (2,940,700) 22,784 96,595 (47,126) 1,473,109

Balance after restatements 97,269 61,320 1,857,385 3,358,038 199,784 34,894 148,516 505,449 6,262,655

Additions 36 1,939 73,809 118,281 35,382 11,785 13,492 520,892 775,616

Disposals - Net book value (657) (2,737) (2,745) (5,161) (119) (86) (1,759) (5,310) (18,574)

Transfer of net assets

> Transfer from fixed asset for disposal - - - - 159 - - - 159

> Transfer to other assets - - - (5,290) - - - (113,703) (118,993)

> Reclassification of fixed assets - 103,620 (43,102) 382,404 6,819 (18,718) (44,889) (386,134) -

> Transfer from construction in progress - 113 - - 4,059 - - (4,172) -

Adjustment of exchange rate - - (142,764) (245,194) (104,620) (1,374) (35,088) (35,790) (564,830)

Depreciation charge - (11,085) (123,377) (362,967) (33,012) (6,325) (26,098) - (562,864)

Closing net book amount 96,648 153,170 1,619,206 3,240,111 108,452 20,176 54,174 481,232 5,773,169


Cost 96,648 354,491 2,536,354 5,908,197 398,014 88,842 141,519 481,232 10,005,297

Less Accumulated depreciation - (201,321) (917,148) (2,668,086) (289,562) (68,666) (87,345) - (4,232,128)

Net book amount 96,648 153,170 1,619,206 3,240,111 108,452 20,176 54,174 481,232 5,773,169


Cost 69,340 110,021 259,715 764,852 186,198 52,030 67,363 1,327 1,510,846

Less Accumulated depreciation - (49,082) (137,856) (419,213) (144,389) (46,883) (38,741) - (836,164)

Net book amount 69,340 60,939 121,859 345,639 41,809 5,147 28,622 1,327 674,682


Opening net book amount 69,340 60,939 121,859 345,639 41,809 5,147 28,622 1,327 674,682

Additions - - 35 12,680 13,577 895 2,756 16,065 46,008

Disposals – net book value (657) (687) (1,170) (4,870) (84) (1) (629) (5,310) (13,408)

Transfer of net assets

> Transfer from assets for disposal - - - - - - - 12 12

> Transfer to other assets - - - (5,290) - - - - (5,290)

Depreciation charge - (8,686) (9,928) (68,635) (15,131) (2,851) (10,201) - (115,432)

Closing net book amount 68,683 51,566 110,796 279,524 40,171 3,190 20,548 12,094 586,572

( T h o u s a n d B a h t )


Land Land Machinery Constructionimprovement & building & equipment in progress

FurnitureLand & office Tools Vehicle Total

equipment


C O M P A N Y



equipment



C O M P A N Y



equipment


Cost 68,683 107,205 239,061 770,155 196,396 49,582 64,777 12,094 1,507,953

Less Accumulated depreciation - (55,639) (128,265) (490,631) (156,225) (46,392) (44,229) - (921,381)

Net book amount 68,683 51,566 110,796 279,524 40,171 3,190 20,548 12,094 586,572

Consolidated

As at 31 December 2003, fixed assets of overseas subsidiaries amounting to Baht 171 million (2002 : Baht 2,782 million and Baht 33 million)

have been used as collateral for a long-term loan in accordance with a project financing loan agreement (See Note 20).

1 4 . D e f e r r e d o v e r b u r d e n e x p e n s e s , n e t


Cost 6,262,722 3,388,769

Less Accumulated amortisation (4,702,096) (2,594,677)

Net book amount before restatement 1,560,626 794,092


Opening net book amount 1,560,626 794,092

Restatements (Note 4) 305,046 -

Balance after restatements 1,865,672 794,092

Additions 807,976 304,353

Amortisation (791,625) (303,667)

Adjustment of exchange rate (15,433) -

Closing net book amount 1,866,590 794,778


Cost 7,298,182 3,693,122

Less Accumulated amortisation (5,431,592) (2,898,344)

Net book amount 1,866,590 794,778

1 5 . M i n i n g p r o p e r t y r i g h t s , n e tDetail of net assets acquired and mining property rights as of 31 December 2003 are as follows :

Purchase consideration :

> Loan settlement 2,284,661

Fair valued of net liabilities acquired 1,493,780

Mining property rights 3,778,441

Restatements (Note 4) (1,994,657)

Mining property right after restatements 1,783,784

C O N S O L I D A T E D ( R e s t a t e d ) C O M P A N Y



2 0 0 3

Thousand Baht

8 3A n n u a l R e p o r t 2 0 0 3

Movement of mining property rights for the year ended 31 December 2003 are as follows :

Opening net book amount 3,550,559

Restatements (Note 4) (1,994,657)

Balance after restatements 1,555,902

Decrease from additional of investment in subsidiaries (67,407)

Adjustment of exchange rate (168,289)

Amortisation (12,867)

Closing net book amount 1,307,339

1 6 . I n v e s t m e n t s i n l a n d , n e t

Investments in land, at cost 36,528 824,038 - 23,930

Less Allowance for impairment (405) (93,633) - -

Investments in land, net 36,123 730,405 - 23,930

Movements of investments in land for the years ended 31 December are as follows :

Opening net book value 730,405 730,405 23,930 23,930

Disposals (694,282) - (23,930) -

Closing net book value 36,123 730,405 - 23,930

Investments in land are recorded at cost. The majority of investments in land are non-operating land of two subsidiaries. Management does not

have a clear plan to develop this land, therefore, impairment of this land is considered and recognized.

1 7 . O t h e r n o n - c u r r e n t a s s e t s

Accrued income - 156,520 - 156,520

Deferred income tax 193,257 66,189 - -

Withholding tax 45,508 31,066 30,432 27,355

Prepaid building rental 16 7,453 - 5,272

Restricted cash at bank - 83,772 - -

Others 84,841 82,794 9,641 9,595

Total other non-current assets 323,622 427,794 40,073 198,742

As at 31 December 2002, the restricted cash at bank was a guaranteed deposit account in foreign currency of an overseas subsidiary amounting to

Baht 83.77 million (equivalent to Indonesian Rupiah 18,044.70 million) at the Forestry Department of Indonesia.

In the first quarter of 2003, this restricted cash at bank was released.

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


2 0 0 3

Thousand Baht


1 8 . B a n k o v e r d r a f t s a n d l o a n s f r o m b a n k s a n d f i n a n c i a l i n s t i t u t i o n sBank overdrafts and loans from banks and financial institutions comprise :

Bank overdrafts 13,251 44,845 10,005 3,781

Loans from banks and financial institutions 1,120,530 1,700,000 1,005,192 1,700,000

Total 1,133,781 1,744,845 1,015,197 1,703,781

Consolidated

As of 31 December 2003, loans from banks and financial institutions are in US Dollars from four commercial banks amounting to US Dollars

28.1 million (2002 : Baht 1,700 million). The loans bear interest at the average rate of 2.17% - 14.5% per annum (2002 : 1.875% - 3.25% per annum)

and are repayable in 1 - 3 months (2002 : 1 - 6 months).

Company

As of 31 December 2003, loans from banks and financial institution are in US Dollars from four commercial banks amounting to US Dollars 25.3

million (2002 : Baht 1,700 million). The loans bear interest at the average rate of 2.17% - 3.17% per annum (2002 : 1.875% - 3.25% per annum) and are

repayable in 1 - 3 months (2002 : 1 - 6 months).

1 9 . O t h e r c u r r e n t l i a b i l i t i e s

Accrued expenses 182,599 485,895 61,271 94,985

Withholding tax payable 77,560 116,545 6,206 7,797

VAT payable 68,913 68,966 5,644 2,908

Income received in advance 26,932 22,742 19,538 22,538

Others 136,106 62,501 2,931 381

Total other current liabilities 492,110 756,649 95,590 128,609

2 0 . L o n g - t e r m l o a n s

Baht loans 1,520,180 3,130,180 1,520,000 3,130,000

Foreign currency loans 143,535 2,556,985 - -

Less Deferred financing service fee (4,751) (6,505) (4,751) (6,505)

Total 1,658,964 5,680,660 1,515,249 3,123,495

Less Current portion of long-term loans (688,809) (1,076,449) (610,000) (610,000)

Long-term loans 970,155 4,604,211 905,249 2,513,495

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

8 5A n n u a l R e p o r t 2 0 0 3

Baht loans

As at 31 December, the major Baht loans are long-term loans from local banks and financial institutions which are summarised as follows :

1 400 500 4.25 - 5.95 Repayable in 5 installments every 12 months 25 January 2003 -

of Baht 100 million each 25 January 2007

2 - 1,000 5.25 Repayable in 12 installments every 6 months 31 March 2005 -

30 September 2010

3 150 250 5.15 Repayable in 5 installments every 6 months 6 December 2002 -

of Baht 50 million each 6 June 2005

4 650 900 6.00 Repayable in 9 installments every 6 months 30 December 2002 -

30 December 2006


of Baht 40 million each 25 July 2005


of Baht 40 million each 25 July 2005

Total 1,520 3,130

In 2003, the Company repaid a loan amounting to Baht 1,000 million before maturity. As a result of early repayment, the Company was charged Baht

25 million which is recognised in the income statement for the year.

Foreign currency loans

As at 31 December 2003, foreign currency loans comprise :

> Loan of an overseas subsidiary amounting to US Dollars 0.86 million equivalent to Baht 34 million (2002 : US Dollars 1.08 million equivalent to Baht

47 million) from an overseas bank carrying interest at the rate of SIBOR 6 month + 1.50% per annum (2002 : SIBOR 6 month + 1.50% per annum),

with the principal repayable in 7 installments, annually starting from 2002. The loan is mortgaged by the subsidiary’s assets (See Note 13); and

> Loan of an overseas subsidiary amounting to US Dollars 2.8 million equivalent to Baht 111 million (2002 : US Dollars 5.10 million or equivalent to

Baht 221 million and US Dollars 50 million or equivalent to Baht 2,165 million) from financial institution. The loan carries interest at the rate of

LIBOR + 1.8% per annum (2002 : LIBOR + 1.8% per annum and LIBOR + 1.9% per annum, respectively). Principal is repayable in 14 installments,

every 6 months, starting from 1 April 1997. The loans are secured by assets of the two subsidiary companies according to project financing

loan agreements (See Note 13).

Movement in long-term loans for the years ended 31 December are as follows :

Opening balance 5,381,164 1,805,683 3,123,495 1,640,000

Restatements (Note 4) 299,496 - - -

Balance after restatements 5,680,660 1,805,683 3,123,495 1,640,000

Additional loans - 1,800,000 - 1,800,000

Acquisition of subsidiaries - 2,883,696 - -

Repayment of loans (3,715,863) (846,444) (1,610,000) (310,000)

Disposal of subsidiary - (102,000) - -

Adjustment from exchange rate (307,587) 146,230 - -

Additional deferred financing service fee - (8,400) - (8,400)

Amortisation of deferred financing service fee 1,754 1,895 1,754 1,895

Closing balance 1,658,964 5,680,660 1,515,249 3,123,495

Contract No. Repayment term

2 0 0 3 2 0 0 2

Interest rate

per annum

(%)

Repayment terms and conditions

Amount 31 December

(Baht million)

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


2 1 . D e b e n t u r e s

Debentures sold locally 6,673,360 3,500,000 6,673,360 3,500,000

Convertible debentures sold overseas - 1,432,883 - 133,766

Less Deferred financing service fee (25,532) (21,771) (25,532) (21,771)

Total 6,647,828 4,911,112 6,647,828 3,611,995

Less Current portion of debentures (499,817) (821,266) (499,817) (821,266)

Debentures 6,148,011 4,089,846 6,148,011 2,790,729

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

Opening balance 4,857,105 5,652,508 3,611,995 5,652,508

Restatements (Note 4) 54,007 - - -

Balance after restatements 4,911,112 5,652,508 3,611,995 5,652,508

Acquisition of subsidiaries - 1,289,290 - -

Issue of debentures 5,000,000 - 5,000,000 -

Repayment of debentures (3,259,523) (2,028,316) (1,960,406) (2,028,316)

Additional of deferred financing service fee (18,765) - (18,765) -

Amortisation of deferred financing service fee 15,004 11,891 15,004 11,891

Adjustment from exchange rate - (14,261) - (24,088)

Closing balance 6,647,828 4,911,112 6,647,828 3,611,995

Debentures issued in 2003 represent Banpu #7 debentures (Baht 3,000 million) and Banpu #8 debentures (Baht 2,000 million). The terms of issue are

summarized below :

21.1 Local debentures of the parent company comprise:-

Bond DescriptionBANPU # 8

(Value Baht 2,000 million)

BANPU # 7


BANPU # 6

(Value Baht 500 million)

BANPU # 5


BANPU # 4


2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

> Type Senior, unsecured and Senior, unsecured and Senior, unsecured and Senior, unsecured and Senior, unsecured and

amortizing debentures. amortizing debentures. amortizing debentures. amortizing debentures. amortizing debentures.

> Category Specifying name Specifying name Specifying name Specifying name Specifying name

> Total offering price Baht 500 million Baht 2,500 million Baht 500 million Baht 3,000 million Baht 2,000 million

> Issue amount 750,000 Units 2,500,000 Units 500,000 Units 3,000,000 Units 2,000,000 Units

> Par value Baht 1,000 Baht 1,000 Baht 1,000 Baht 1,000 Baht 1,000

> Offering price per unit Baht 1,000 Baht 1,000 Baht 1,000 Baht 1,000 Baht 1,000

> Coupon rate per annum Interest rate shall be 5.80% per annum Interest rate shall be 2.95% per annum 3.65% per annum

average rate MLR from average rate MLR from

4 Commercial Banks - 4 Commercial Banks -

0.25% per annum. 0.375% per annum.

> Interest paid Twice a year Twice a year Twice a year Twice a year Twice a year

> Life 5 years 5 years 7 years 5 years 7 years

> Issue date 3 November 1999 4 April 2001 4 April 2001 3 February 2003 15 September 2003

8 7A n n u a l R e p o r t 2 0 0 3

21.2 Overseas convertible debentures of the parent company have the following conditions :

The Company has issued convertible debentures in the overseas market amounting to US Dollars 100 million, equivalent to Baht

2,528 million, which have a 7 year maturity period. The debentures bear interest at 2.75% per annum. The Company had reserved 3,507

million ordinary shares at a conversion price of Baht 258 per share exercisable from 1 July 1996 to 31 March 2003. Alternatively, the debentures

holders may redeem the convertible debentures at the rate of 141.80% of the face value of debentures plus accrued interest. The Company

may exercise the “call option” or “early redemption” on all or some of the debentures at the following redemption prices:-

Redemption price (%) (Face price debentures) During the period between

127.63 10 April 2001 and 9 April 2002

134.46 10 April 2002 and 9 April 2003

In 2003, the Company repurchased the whole amount of outstanding convertible debentures (2002 : the remaining balance of

convertible debentures amounting to US Dollars 3.09 million) for Baht 133.77 million. This incures a premium on redemption of Baht 55.6 million.

Local and overseas debentures require to comply with certain procedures and conditions : for example, maintaining net value of

shareholders’ equity, maintaining debt to equity ratio, maintaining ratio of debt coverage and trading debt with security guarantee not exceeding

a limited amount.

2 2 . S h a r e c a p i t a l a n d w a r r a n t s22.1 Issued and paid-up share capital

As at 31 December 2001 210,189,167 2,101,892 3,706,625 5,808,517

Issued shares 3,474,216 34,742 58,262 93,004

As at 31 December 2002 213,663,383 2,136,634 3,764,887 5,901,521

Issued shares 56,611,398 566,114 1,255,379 1,821,493

As at 31 December 2003 270,274,781 2,702,748 5,020,266 7,723,014

Number of Share

S h a r e s

Ordinary shares

Thousand Baht

Premium

Thousand Baht

Total

Thousand Baht

Bond DescriptionBANPU # 8


BANPU # 7


BANPU # 6


BANPU # 5


BANPU # 4


> Maturity date of bond 3 November 2004 Principal to be amortized Principal to be amortized Principal to be amortized Principal to be amortized

debentures with maturity debentures with maturity debentures with maturity debentures with maturity

on the final redemption on the final redemption on the final redemption on the final redemption

date of 4 April 2006. date of 4 April 2008. of 3 February 2008. of 15 September 2010.

> Redemption right of bond N.A. N.A. N.A. N.A. N.A.

holder prior to maturity

(Put Option)

> Redemption right of bond N.A. N.A. N.A. N.A. N.A.

issuer prior to maturity

(Call Option)

> Principal repayment prior to At end of year 4, principal Principal to be amortized Principal to be amortized Principal to be amortized Principal to be amortized

maturity of redemption payment amount of debentures in the amount debentures in amount debentures in amount debentures in the

per unit Baht 250 per unit, of Baht 100 per unit of Baht 100 per unit of of Baht 250 per unit of amount of Baht 200

the remaining shall be every six-month debenture every six-month debenture commencing per unit of debenture

paid on maturity. commencing from the commencing from the from period 7 – 10. commencing from period

date of 4 October 2002 date of 4 October 2007; 10 – 14.

until the 4 October the remaining shall be

2005; the remaining paid on maturity.

shall be paid on maturity.

> Redemption price per unit Baht 750 Baht 300 Baht 500 Baht 250 Baht 200

at maturity

> Secondary market The debentures are The debentures are The debentures are The debentures are The debentures are

registered in Thai Bond registered in Thai Bond registered in Thai Bond registered in Thai Bond registered in Thai Bond

Dealing Centre. Dealing Centre. Dealing Centre. Dealing Centre. Dealing Centre.


As at 31 December 2003, there are 270,274,781 issued and paid up ordinary shares (2002 : 213,663,383 shares) at par value of Baht 10 per share

(2002 : Baht 10 per share). All issued shares are fully paid-up.

22.2 Warrants

(a) On 29 October 1998, the General Shareholders Meeting resolved that the Company allocate warrants to directors and employees of

the Company under a Employee Stock Ownership Program (“ESOP”) in the amount of 5,239,224 units through free-of-charge warrants

with a 5-year maturity period commencing from the date of approval. The warrants can be exercised from December 1999, with final exercise

in December 2003. On 26 October 1999 the General Shareholders Meeting resolved that the Company extended the scope of warrant

allocation to its subsidiaries.

For the year ended 31 December 2003, private sector exercised warrants totaling 42,253,610 units and directors and employees

of the Company and its subsidiaries also exercised ESOP in the amount of 2,614,781 units. The totaling of both exercises was to

purchase 56,611,398 ordinary shares. The excess of the exercise price over par value of the shares has been presented as share premium,

in an amount of Baht 1,255.40 million.

As of 31 December 2003, the warrants were fully exercised and 5,165,478 units of warrants under ESOP have been exercised.

The remaining warrants under ESOP of 73,746 units are expired. Details of exercise price and exercise ratios are as follows :

> No. 1 1 ESOP unit is eligible to purchase 2.18354 ordinary shares at a price of Baht 23.320 per share.





(b) As at 31 December 2003, directors and employees of the Company and its subsidiaries had exercised 674,823 warrants by paying Baht

52,673,203 under the Employee Stock Ownership Program (“ESOP”) to purchase 1,473,074 ordinary shares. As at 31 December 2003,

the ordinary shares were not yet registered with the Ministry of Commerce, so it is presented as share subscription received in advance.

2 3 . O p e r a t i n g p r o f i tThe following expenditure items, classified by nature, have been charged in arriving at operating profit :

Staff costs 443,929 507,360 219,771 309,080

Net (gain) loss on foreign exchange 270,197 (1,718) 138,196 179,531

Depreciation on property, plant and equipment 457,686 318,835 61,277 64,527

Amortisation 821,250 1,026,928 320,425 410,203

Operating lease rentals 36,255 19,986 15,029 7,149

2 4 . E a r n i n g s p e r s h a r eBasic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in

issue during the year.

For the diluted earnings per share the weighted average number of ordinary shares in issue during the year is adjusted to assume conversion of

all dilutive potential ordinary shares. In 2002, the Company had two categories of dilutive potential ordinary shares : convertible debentures and share

options granted to employees.

In 2003, the Company has no diluted earnings per shares.

For 2002, the convertible debenture was not included as a potential ordinary share in the diluted earnings per share calculation because the exercise

price was in excess of the market price of the Company’s shares. For the share options a calculation is done to determine the number of shares that could

have been acquired at market price (determined as the average share price of the Company’s shares during the year) based on the monetary value of the

subscription rights attached to outstanding share options. This calculation serves to determine the unpurchased shares to be added to the ordinary shares

outstanding for the purpose of computing the dilution; for the share options calculation no adjustment is made to net profit.

2 0 0 3

Thousand Baht


2 0 0 2 ( R e s t a t e d )

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 3

Thousand Baht

8 9A n n u a l R e p o r t 2 0 0 3

Basic earnings per share

Net profit available to ordinary shareholders 2,046,336 264,007 7.75

Basic earnings per share

Net profit available to ordinary shareholders 834,721 212,473 3.93

Effect of assumed conversion

Warrants - 3,370

Diluted earnings per share

Net profit available to ordinary shareholders plus assumed conversions 834,721 215,843 3.87

2 5 . S e g m e n t sConsolidated

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

Income available

Thousand Baht

Ordinary shares

Thousand Shares

Per share

Baht

For the year ended 31 December 2002 (Restated)

For the year ended 31 December 2003

Coal and Minerals Trading Sector

Thailand Indonesia Total Thailand Indonesia TotalT h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d

B a h t B a h t B a h t B a h t B a h t B a h t B a h t B a h t B a h t B a h t

Elimination

entriesTotal Coal and Minerals Trading Sector

Elimination

entriesTotal


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

Income available

Thousand Baht

Ordinary shares

Thousand Shares

Per share

Baht


Net sales 3,175,983 10,796,589 13,972,572 (1,490,316) 12,482,256 4,701,305 8,097,678 12,798,983 (1,890,300) 10,908,683

Profit (loss) from operation (198,715) 595,476 396,761 97,004 493,765 19,333 265,602 284,935 177,394 462,329

Common expenses/

Other income 798,370 569,130

Unrealised gain (loss) on

available-for-trade securities 308,844 76,478

Profit from disposal of

investments on available-

or-trade securities 1,037,101 362,433

Net gain (loss) from

exchange rate (207,197) 1,718

Interest expenses and financial

expenses of bond redemption

and other financial expenses (777,328) (995,862)

Corporate income tax (123,859) (43,800)

Net profit from operation 1,529,696 432,426

Plus (less)

Share of profit (loss) from

associated companies 573,561 452,357

Net profit of minority interest (56,921) (50,062)

Net profit 2,046,336 834,721


Total assets used in business

sectors 5,773,169 6,262,655

Total common assets 28,219,806 17,307,298

Total assets 33,992,975 23,569,953

In 2001, the Company had some machinery which was sold to its subsidiary company and a third party appraised by an independent appraiser. The

appraised value of machinery and spare parts was greater than their net book value which was presented under “Machinery and Spare Part Pending Disposal”.

The remaining machinery and spare parts are used in the Coal Trading Sector and Industrial Mineral of the Company. Management believes that cash flow from

these assets will still be generated in the future; hence, the Company does not consider any allowance of the impairment of such assets. As at 31 December

2003, the machinery and spare parts of the Engineering Service Section has a net book value of Baht 270.50 million, presented under Machinery and Spare part

pending disposal.

2 6 . D i v i d e n d s p e r s h a r eAt an Annual General Meeting on 28 April 2003, the shareholders approved payment of the remaining final dividend of Baht 1.10 per share totaling

Baht 292.34 million (2002 : Baht 0.6 per share totaling Baht 123.76 million), which was paid on 7 May 2003. In addition, interim dividends in respect of year

2003 of Baht 1.50 per share totaling Baht 401.65 million (2002 : Baht 1.50 per share totaling Baht 320.40 million) was approved by the Board of Directors on

28 August 2003 and was paid on 22 September 2003. The Company cancelled the dividend paid to some shareholders amounting to Baht 54,385 (2002 : Baht

61,500) because they are not of Thai nationality and have no rights to this dividend.

2 7 . D i r e c t o r s ’ r e m u n e r a t i o nAt the Annual General Meeting on 28 April 2003, a resolution was passed to approve the payment of director’s remuneration of 2002 amounting to

Baht 14,780,147 (2002 : Baht 10,255,000).

2 8 . F a i r v a l u e r e s e r v e - a v a i l a b l e - f o r - s a l e s - s e c u r i ti e sAs at 31 December, fair value reserve comprised :

Fair value reserve

> Company 220,850 7,738,483 - 7,959,333

> Subsidiaries 668,912 3,464,733 - 4,133,645

889,762 11,203,216 - 12,092,978

Fair value reserve

> Company (194,151) 415,001 - 220,850

> Subsidiaries 170,664 498,248 - 668,912

(23,487) 913,249 - 889,762

Beginning balanceT h o u s a n d B a h t

C O N S O L I D A T E D A N D C O M P A N Y 2 0 0 3

IncreaseT h o u s a n d B a h t

DecreaseT h o u s a n d B a h t

Ending balanceT h o u s a n d B a h t



IncreaseT h o u s a n d B a h t




Coal and Minerals Trading Sector

Thailand Indonesia Total Thailand Indonesia TotalT h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d T h o u s a n d

B a h t B a h t B a h t B a h t B a h t B a h t B a h t B a h t B a h t B a h t

Elimination

entriesTotal Coal and Minerals Trading Sector

Elimination

entriesTotal


9 1A n n u a l R e p o r t 2 0 0 3

Legal reserve

> Company 339,971 14,080 - 354,051

> Subsidiaries 16,897 19,500 - 36,397

356,868 33,580 - 390,448

Legal reserve

> Company 329,050 10,921 - 339,971

> Subsidiaries 23,276 - (6,379) 16,897

352,326 10,921 (6,379) 356,868

Under the Public Company Act, the Company is required to set aside as a statutory reserve of at least 5% of its net profit after accumulated deficit

brought forward (if any) until the reserve reaches not less that 10% of the registered capital. The legal reserve is non-distributable.

At the Annual General Meeting on 28 April 2003, the shareholders approved to set aside additional legal reserve amounting to Baht 14.08 million

from non-BOI net profit.

3 0 . O b l i g a t i o n s a n d c o n t i n g e n t l i a b i l i t i e s30.1 As at 31 December 2003 and 2002 the Company had obligations and contingent liabilities with banks as follows :

Letters of Guarantee

> US Dollar 145.68 0.26 145.56 0.26

> Indonesian Rupiah 14,876.07 19,362.71 6,098.08 19,362.71

> Thai Baht 84.56 476.51 31.49 469.10

Letters of Credit

> Thai Baht - 29 - -

30.2 Various contracts

(a) The Company has entered into a contract of area lease, equipment lease and service assignment within the building of the Thanapoom Tower

(Formerly name “Grand Amarin Tower”), for area numbers 25 (D, E, I), 26 (Whole), 27(A), 28 (Whole), on the 25th- 28th Floor in an approximate

area of 3,614.50 square meters from Krungthai Electrics Co., Ltd. (Formerly name “Makkasan Real Estate Co., Ltd.”) for the period of 3 years

commencing from 1 January 1999 to 31 December 2001. As the Company has completely complied with the leasing contract, the Company

lessor agrees the area to be further leased for a continued period of 2 years 4 months, and a result, this leasing contract will terminate on 30 April

2004. As at 31 December 2003, and 2002 the Company has an outstanding prepaid lease of Baht 4 million and Baht 14.47 million respectively.

(b) Under the terms of a coal transportation contract signed with a transportation company, the Company has to supply coal for transportation in

accordance with the contract. If the Company supplies coal for transportation less than the conditions defined in the contract, the Company will

be fined for non compliance with such contract. Management expect to comply with the contract terms in the ordinary course of business.

(c) Subsidiary companies have entered into significant contracts as follows;

> Contract regarding the service of Coal Ash Removal from the area under the silo in the area of the power plant of Glow SPP3 Co., Ltd.

(Formerly name “Thai Cogeneration Co., Ltd.”) for which the subsidiary is responsible for any damage possibly incurred from the service

commencing from Coal Ash Removal from such place. Payment is determined in accordance with the removed quantity. The contract

duration lasts for 15 years commencing from date of operation.

> Contract for mining and disposal of lignite coal at Ban-sa Mine, Amphoe Chiang Muan, Phayao Province, contract no. Bor Sor 1/39 with

the Energy Development and Promotion for which an associated company is granted subrogation right in for 22 years commencing on

10 January 1996. Moreover, the Company has to comply with various requirements specified in the contract.



AppropriationT h o u s a n d B a h t





AppropriationT h o u s a n d B a h t



2 0 0 3M i l l i o n

( O r i g i n a l c u r r e n c y )


2 0 0 2M i l l i o n


2 0 0 3M i l l i o n


2 0 0 2M i l l i o n


2 9 . L e g a l r e s e r v e

As at 31 December, legal reserve comprised :


30.3 Litigation

A subsidiary company has provided land, property, factory, machineries and diverse equipment under lease to another company. The

lessee company has been overdue in respect of its payments for a long period. Such subsidiary has, therefore, ceased to recognize rental revenue

from May 1998 and has raised allowance for doubtful lease receivables in the whole amount of Baht 6.63 million. The subsidiary has voided

the contract and exercised its contractual right to occupy the leased asset and prosecuted a claim for overdue lease payment plus fines in

an amount of Baht 70.76 million. Apart from this, the lessee has also breached the granite coal contract with another subsidiary in amount

of Baht 24.78 million. These two cases are in the court process. Because they are the litigants in the lawsuit, the lessee company has

prosecuted the Company and its subsidiary which occupied the leased asset for breach of the lease contract and infringement, claiming

an indemnity in the amount of Baht 204 million. The cases are currently under the judgement of the court. The final judgement may not be

known for the time being. As a result, the Company and its subsidiary have not yet accounted for contingent liability derived from such cases.

30.4 Exploitation fees

In 2002 the government of Indonesia issued implementation regulations regarding exploitation fees based on amended government

regulations. Those regulation enforced an Indonesian subsidiary records additional exploitation fees for 2000-2002 amounting to approximately

Baht 103 million (or US Dollars 2.4 million). The subsidiary and other coal mining companies in that country are of the view that the increased

exploitation fee is unfair. Currently, the subsidiary together with the Indonesia Coal Mining Association is in the process of requesting

the government to reconsider the exploitation fees. However, as at 31 December 2003, such subsidiary has recorded the liability from

exploitation fees approximately Baht 103 million (or US Dollars 2.4 million) under other current liabilities in the consolidated financial statements.

3 1 . D e f e r r e d i n c o m e t a x e sGroup companies in Thailand do not recognize income taxes payable or receivable in future periods in respect of temporary differences arising between

the tax bases of assets and liabilities and their carrying amounts in the financial statements. The principal temporary differences arise from depreciation on

property, plant and equipment, other provisions and tax losses carried forward, and differences between the fair values of net assets acquired and their tax bases.

However, certain overseas subsidiaries have adopted deferred income tax accounting as required by the accounting standards of such country. As of

31 December 2003, such subsidiaries recognized deferred income tax assets of Baht 193 million (2002 : Baht 66 million) which is presented under other

non-current assets on the consolidated financial statements.

Applying deferred tax accounting does not comply with the parent’s accounting policy set out in Note 2.12. However, the effect of this non-compliance

is immaterial to the consolidated financial statements, and therefore, the Company does not incorporate any adjustments in these financial statements to

eliminate these deferred tax assets of these subsidiaries.

3 2 . A c c o u n t i n g f o r i n v e s t m e n t s i n j o i n t v e n t u r eIn the preparation of the consolidated and company financial statements the Group uses the equity method for investments in joint ventures operating

in the power plant business. The Company’s management is of the view that the use of equity accounting provides a clearer view of the power plant business

rather than the use of the proportionate consolidation method because it reflects the substance of leveraged infrastructure development companies where the

joint venture entity raises funds secured against its own assets (Project Finance) without recourse to its shareholders. In such cases, the interest of the shareholders

are in the residual net equity of the joint venture entity rather than the component assets and liabilities. Furthermore, from a control perspective, the Company is

of the view that it controls its share of the net equity of the joint venture entity, rather than the specific assets and liabilities that comprise that net equity.

As of 31 December 2003, the Company has estimated the effects on consolidated assets, liabilities, revenue and major expenses if the proportionate

consolidation method was adopted as follows :

Consolidated balance sheet

Cash on hand and at banks 339 273

Trade accounts receivable - 611

Other current assets 176 73

Fixed assets 2,891 4,813

Other non-current assets 781 365

4,187 6,135

Trade accounts payable - 383

Other current liabilities 199 815

Long-term liabilities – Long-term loan 3,336 3,796

Shareholders’ equity 652 1,141

4,187 6,135

2 0 0 3

Million Baht

2 0 0 2

Million Baht

9 3A n n u a l R e p o r t 2 0 0 3

Consolidated statement of income

Sales 2,782 3,297

Cost of sales (1,983) (2,464)

Other income 291 110

Other expenses (522) (410)

568 533

During the fourth quarter of 2003, the Group disposed of one power plant company, formerly the company’s joint venture (See Note 5.4 a). Therefore,

the result of its operations are incorporated in consolidated statement of income until the date of disposal.

3 3 . F i n a n c i a l i n s t r u m e n t sThe principal financial risks faced by the Group are interest rate, exchange rate and credit risk. The Group borrows at both fixed and floating rates

of interest to finance its operations. Major sales are entered into in foreign currencies. Credit risk arises when derivative instruments are used or sales are

made on deferred credit terms.

The Group manages these risks as follows :

(a) Interest rate risk

The Group manages its exposure to interest rate risk through a variety of measures, including the use of both fixed and variable

instruments with different activities and entering into interest rate swap on a specific basis where management consider it appropriate to do so.

The Group has established a Risk Management Committee which holds monthly meetings for consideration and discussion of how to

reduce financial risks which might be incurred.

(b) Foreign exchange risk

In order to reduce exposure to fluctuations in currency exchange rates, the Group uses natural hedges of its business operations, both

in Thailand and overseas, through emphasis on a balance of foreign currencies in the Group and sometime through the use of financial instruments.

The Group has both foreign currency denominated assets and liabilities and uses natural hedges between these assets and liabilities

to manage certain its exposures. The Group will also enter into forward foreign exchange contracts in specific circumstances.

The objectives in using financial instruments are to reduce uncertainty over future cash flows arising from movements in interest

and exchange rates. The following strategies are employed to achieve these objectives.

> Forward foreign exchange contracts

Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign currency exchange

rates on general transactions.

At 31 December 2003 and 2002 the settlement dates on open forward contracts were within 1 year. The local currency amounts

to be received and contractual exchange rates of the outstanding contracts were :

USD 40 million at rates averaging

Baht 42.31 : USD 1

(2002 : USD 25 million at the rates averaging Baht 42.65 USD 1) 1,692,363 1,066,421 1,692,363 1,066,421

1,692,363 1,066,421 1,692,363 1,066,421

> Net fair values

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

Favourable (unfavourable) forward foreign exchange contracts (107,513) 14,387 (107,513) 14,387

2 0 0 3

Million Baht

2 0 0 2

Million Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht


The fair values of forward foreign exchange contracts have been calculated (using rates quoted by the Group’s bankers) as if the

contracts were terminated at the balance sheet date.

> Currency swap contract

Currency swap contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates on specific

transactions.

On 13 February 2003 and 11 November 2003, the Company entered into currency swap contracts with a local commercial bank for

US Dollars 65 million and US Dollars 100 million, respectively. The major cash proceeds schedule under these instruments is similar to the

schedule of the loans to subsidiaries which are due within 5 years. As of 31 December 2003, the remaining currency swap contract is US Dollars

148.5 million. The local currency amounts to be received and contractual exchange rates of the outstanding contract are as follow :

USD 148.50 million at fixed rate

Baht 40.67 : USD 1 6,039,439 - 6,039,439 -

6,039,439 - 6,039,439 -

> Net fair values

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

(Unfavourable) currency swap contracts (153,642) - (153,642) -

The fair values of currency swap contracts have been calculated (using rates quoted by the Group’s bankers) as if the contracts was

terminated at the balance sheet date.

(c) Credit risk

The Group has no significant concentrations of credit risks. Derivative counter parties and cash transactions are limited to high credit

quality financial institutions. The credit exposure of derivatives is represented by the net fair values of the contracts, as disclosed above in (b).

(d) Fair values

The carrying amounts of the following financial assets and financial liabilities approximate to their fair values : cash, and cash at banks,

investments, trade receivables and payables, other receivables and payables, loans to related companies, short-term loans, long-term loans

and debentures.

(e) Other risks - Indonesian economic conditions

Indonesia has been experiencing a prolonged period of economic difficulty which has been compounded by a downturn in the global

economy and its domestic political situation. Indonesia’s return to economic stability is dependent to a large extent on the effectiveness of

measures taken by the government, decisions of international lending organizations, changes in global economic conditions and other factors,

including regulatory and political developments. The Company has entered into insurance policies with overseas insurance companies to protect

its investment risk which may occur through law and order or administrative actions of Indonesian government.

3 4 . P r o m o t i o n a l p r i v i l e g e s The Company has received promotional privileges from the Board of Investment for mining business under 4 promotion certificates. Under these

privileges, the Company receives exemption from certain taxes and duties as detailed in the certificates, as well as exemption from corporate income tax for

a period of six to eight years commencing from the date operating income is earned. As a promoted industry, the Company is required to comply with the

terms and conditions as specified in the promotional certificates.

As of 31 December 2003, three promotion certificates had expired. The remaining certificate will expire in June 2006 .

Chiang Muan Mining Co., Ltd. a subsidiary, has received promotional privileges from the Board of Investment for mining business. Under this

privilege the subsidiary receive an exemption for certain taxes and duties including an exemption from corporate income tax for a period of eight years from

the date of commencement of revenue earning income. As a promoted industry, the subsidiary is required to comply with the terms and conditions as

specified in the promotion certificate. The certificate will expire in March 2004.

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht


2 0 0 2

Thousand Baht

2 0 0 3

Thousand Baht

2 0 0 2

Thousand Baht

9 5A n n u a l R e p o r t 2 0 0 3

Revenues shown in the Company financial statements classified by BOI granted and Non-BOI granted are as follows :

Total revenues 713,024 2,006,388 2,719,412

Total expenses (613,393) (1,504,649) (2,118,042)

Net operating profit 99,631 501,739 601,370

Share of profit of subsidiaries and associates - 1,444,966 1,444,966

Net profit before income tax 99,631 1,946,705 2,046,336

Income tax - - -

Net profit for the year 99,631 1,946,705 2,046,336

Total revenues 1,167,700 1,110,610 2,278,310

Total expenses (936,373) (1,537,330) (2,473,703)

Net operating profit (loss) 231,327 (426,720) (195,393)

Share of profit of subsidiaries and associates - 1,644,655 1,644,655

Net profit before income tax 231,327 1,217,935 1,449,262

Income tax - - -

Net profit for the year 231,327 1,217,935 1,449,262

3 5 . S u b s e q u e n t e v e n t s35.1 Disposal of investments

(1) The Board of Director Meeting on 23 January 2004 passed a resolution to approve the Company and its subsidiaries wholly dispose of

the investments in available-for-sale in Ratchaburi Generating Electricity Holding Public Company Limited of 217,400,000 shares to Electricity

Generating Authority of Thailand at Baht 43.8589 per share, totaling Baht 9,535 million, and the purchase of an investment in Electricity

Generating Public Company Limited (“EGCOMP”) of 131,563,603 shares at Baht 91.8415 per share, totaling Baht 12,053 million from

Electricity Generating Authority of Thailand. As a results of this purchase, the Group‘s portion of equity of EGCOMP will increase to

24.93% with EGCOMP become an associate if so, say so. Therefore, management expect to account for the investment in EGCOMP

as an associate investment at the date of acquisition.

(2) The Board of Director Meeting on passed a resolution to approve a subsidiary entered into a sales agreement with a third party for the

whole of its investment in MRD-ECC Company Limited for Baht 30 million on 4 February 2004. As at 31 December 2003, carrying value

of this investment amounted to Baht 26.5 million.

35.2 Additional investment

The Board of Director Meeting on 23 January 2004 passed a resolution to approve an overseas subsidiary in Indonesia entered into

a purchase agreement for investment in PT. Bharinto Ekatama, which operates in coal mining and trading in Indonesia, amounting to 16,830

shares for approximately US Dollars 12.5 million on 27 January 2004. As a results, the Group’s portion of equity of PT. Bharinto Ekatama with

increase to 99%.

35.3 Debenture issue

The Board of Director Meeting on 23 January 2004 passed a resolution to approve the Company issued unsubordinated, unsecured

and amortising debentures of Baht 1,500 million and 500 million with a par value of Baht 1,000 per each to institutional investors on 16 February

2004. The debentures are 7-year and 5-year maturity debentures which will be due in 2011 and 2009, respectively. The debentures have a fixed

coupon rate of 4.8% and 4% per annum with semi-annual payments.

BOI grantedT h o u s a n d B a h t

Non-BOI grantedT h o u s a n d B a h t

TotalT h o u s a n d B a h t


BOI grantedT h o u s a n d B a h t

Non-BOI grantedT h o u s a n d B a h t

TotalT h o u s a n d B a h t



> Ordinary Share Registrar Thailand Securities Depository Company Limited for Depositors

> The Fourth Debenture Registrar Thailand Securities Depository Company Limited for Depositors

> The Fifth and Sixth Debenture Registrar DBS Thai Danu Public Company Limited

> The Seventh Debenture Registrar DBS Thai Danu Public Company Limited

> The Eighth Debenture Registrar DBS Thai Danu Public Company Limited

> Auditor Mrs. Anothai Leekitwattana

Authorised Auditor No. 3442

PricewaterhouseCoopers ABAS Ltd.

15th Floor, Bangkok City Tower

No. 179/74-80 South Sathon Road, Bangkok 10120

Tel. 0 2286 9999, 0 2344 1000

> Legal Advisor Arttha-Kij Law Office

8/64-67 Ratchadapisek Road,

Ladyao, Jatujak, Bangkok 10900

Tel. 0 2511 1306, 0 2513 8056, 0 2938 1021, 0 2938 1640

> Financial Advisor -None-

> Advisor or Manager under Management Agreement -None-

>>O t h e r Re fe r e n c e s

9 7A n n u a l R e p o r t 2 0 0 3

>>

>>B u s i n e s s S t r u c t u r e o f B a n p u G ro u p○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

As of 31 December 2003

30.00%

7.35%

66.66%

90.00%

86.00%

99.99%

99.99%

99.99%

PT. Indo TambangrayaMegah

99.99%

89.18%

49.00%

99.99%

Banpu Public Co., Ltd.

99.99%

99.96%

99.99%

100.00%

100.00%

30.00%

51.00%

95.00%

95.00%

PT. Centralink WisesaInternational

PT. NusantaraThai Coal

95.00%

95.00%

PT. JorongBarutama Greston

PT. Nusantara ThaiMining Services

99.99%

99.99%

99.99%

100.00%

99.93%

100.00%

Notes : * The company’s shareholding structure in subsidiary companies is in form of shareholding by legal entity without material shareholding by any of

the appointed directors. (Details as shown in Notes to Financial Statements 2.4 - Investments in subsidiary and associated companies)

** The company sold its investment in Tri Energy Company Limited by selling all ordinary shares of Banpu Gas Power Company Limited. The company

received a sum of Baht 2,100 million from selling the shares on 14 November 2003, after which it has no further shareholding in both Banpu Gas

Power Company Limited and Tri Energy Company Limited.

*** On 2 February 2004, the company sold through Banpu Minerals Company Limited (a subsidiary 99.99 per cent owned by the company) its entire

holding of 1,500,000 shares (30 per cent of the total subscribed shares) in MRD-ECC Company Limited to Imerys Ceramics (Thailand) Limited of

Baht 30 million. After the share disposal, the company no longer has either direct or indirect shareholding in MRD-ECC Company Limited.

**** The company increased its shares held in AACI from 18.84 per cent to 20.96 per cent of the total subscribed shares in January 2004.

>>

>> >> >> 100.00%

18.84%

>>

>>

>>

>>

>>

>>

>>

>>

>>

>>

>>

>>

>>

>> >>

>>

>>

>> >>

>>

>>

>>

Amata Power

(Bien Hoa) Ltd.

Yen Bai Banpu Calcium

Carbonate Co., Ltd.

97.66% 35.00%

>>

99.99%

>>

>>

2.34% >>

>>

>>

>>

>>

BP Overseas

Development Co., Ltd.

Asian American Coal Inc.

0.26%

15.00%

7.38%

Banpu Coal Power Ltd.

Synergy Power Co., Ltd.

Banpu Power Ltd.

Banpu PowerVietnam I Pte. Ltd.

Banpu Rayong Power

Ltd.

Banpu PowerInternational Ltd.

Ban-Sa Mining Co., Ltd.

Edifice Engineering

Co., Ltd.

Chiang Muan Mining

Co., Ltd.

Banpu Minerals Co., Ltd.

Silamani Corp., Ltd.

Silamani Marble Co., Ltd.

Banpu International Ltd.

Banpu SingaporePte. Ltd.

Banpu Minerals(Singapore) Pte. Ltd.

MRD-ECC Co., Ltd.

PT. Barasentosa Lestari

PT. Indominco Mandiri

PT. Kitadin

PT. Trubaindo CoalMining

Universal Exploration

Co., Ltd.

Promsin Co., Ltd.

(Entities with 10 per cent or more shares held by Banpu Group)

>>

Ratchaburi Electricity

Generating Holding Plc.

>>

BLCP Power Ltd.

9 7A n n u a l R e p o r t 2 0 0 3


Type ofbusiness

NameAuthorized

capitalPaid up capital

No. of paid-upcapital (shares)

% ofholding

Head Office Telephone

1 Banpu Plc. Energy 354,050,479 2,702,747,810 270,274,781 - 26-28th Floor, Thanapoom Tower, 0 2694 6600

Baht Baht 1550 New Petchburi Road,

Makkasan, Ratchathewi, Bangkok 10400

Subsidiary Companies

2 Banpu Minerals Coal mining 40,000,000 40,000,000 40,000 99.99% 58/1 Soi Thungkwao 1, 0 2694 6600

Co., Ltd. and trading Baht Baht Yontrakijkosol Road, Moo 1,

Tambon Thungkwao,

Amphoe Mueang Prae, Prae Province

3 Banpu Singapore Coal trading 2,000,000 1,500,000 1,500,000 100.00% 36 Robinson Road #18-01 City House, 65 420 7606

Pte. Ltd. SGD SGD Singapore 068877

4 Banpu Minerals Coal trading 50,000,000 17,670,002 17,670,002 100.00% 36 Robinson Road #18-01 City House, 65 420 7606

(Singapore) Pte. Ltd. SGD SGD Singapore 068877

5 PT. Jorong Barutama Coal mining 4,500,000,000 4,500,000,000 300 95.00% 2nd Floor, Ventura Building, 6221 7591 2259

Greston and trading IDR IDR Jalan R.A. Kartini No. 26, Cilandak,

in Indonesia Jakarta 12430, Indonesia

6 PT. Nusantara Thai Mining 541,750,000 541,750,000 250,000 95.00% 2nd Floor, Ventura Building, 6221 7591 2259

Mining Services related IDR IDR Jalan R.A. Kartini No. 26, Cilandak,

services Jakarta 12430, Indonesia

in Indonesia

7 PT. Nusantara Coal mining 10,000,000,000 2,500,000,000 31,250 95.00% 2nd Floor, Ventura Building, 6221 7591 2259

Thai Coal and trading IDR IDR Jalan R.A. Kartini No. 26, Cilandak,


8 PT. Centralink Wisesa Investment 110,000,000,000 109,473,000,000 109,473 95.00% 2nd Floor, Ventura Building, 6221 7591 2259

International in coal IDR IDR Jalan R.A. Kartini No. 26, Cilandak,

business Jakarta 12430, Indonesia

9 PT. Indo Tambangraya Investment 150,000,000,000 101,081,000,000 101,081,000,000 99.99% 3rd Floor, Ventura Building, 6221 7591 2259

Megah in coal IDR IDR Jalan R.A. Kartini No. 26, Cilandak,

business Jakarta 12430, Indonesia

10 PT. Indominco Mandiri Coal mining 20,000,000,000 12,500,000,000 12,500 99.99% 3rd Floor, Ventura Building, 6221 750 4390

and trading IDR IDR Jalan R.A. Kartini No. 26, Cilandak,


11 PT. Kitadin Coal mining 30,000,000,000 27,000,000,000 13,500 99.99% 3rd Floor, Ventura Building, 6221 750 4390

and trading IDR IDR Jalan R.A. Kartini No. 26, Cilandak,


>>D e t a i l s o f t h e C o m p a ny a n d I t sS u b s i d i a r y a n d A s s o c i a te d C o m p a n i e s

9 9A n n u a l R e p o r t 2 0 0 3

12 PT. Trubaindo Coal Coal mining 100,000,000,000 63,500,000,000 63,500 90.00% 3rd Floor, Ventura Building, 6221 750 4390

Mining and trading IDR IDR Jalan R.A. Kartini No. 26, Cilandak,


13 PT. Barasentosa Coal mining 3,500,000,000 3,500,000,000 3,500 86.00% 3rd Floor, Ventura Building, 6221 750 4390

Lestari and trading IDR IDR Jalan R.A. Kartini No. 26, Cilandak,


14 Banpu International Coal trading 250,000,000 250,000,000 25,000,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Ltd. in Indonesia Baht Baht 1550 New Petchburi Road,


15 Silamani Corp., Ltd. Coal trading 300,000,000 300,000,000 30,000,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Baht Baht 1550 New Petchburi Road,


16 Silamani Marble Coal trading 200,000,000 185,500,000 2,000,000 99.96% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Co., Ltd. Baht Baht 1550 New Petchburi Road,


17 Ban-Sa Mining Investment 60,000,000 60,000,000 600,000 89.18% 779/2 Singhaklai Road, Tambon Wieng, 0 2694 6600

Co., Ltd. in coal Baht Baht Amphoe Mueang Chiang Rai,

mining and Chiang Rai Province

trading

18 Chiang Muan Mining Coal mining 100,000,000 100,000,000 10,000,000 49.00% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Co., Ltd. and trading Baht Baht 1550 New Petchburi Road,


19 BP Overseas Investment 10,000 2 2 100.00% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Development Co., Ltd. in coal USD USD 1550 New Petchburi Road,

mining Makkasan, Ratchathewi, Bangkok 10400

20 Edifice Engineering Coal ash 5,000,000 5,000,000 50,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Co., Ltd. management Baht Baht 1550 New Petchburi Road,


21 Yen Bai Banpu Calcium CaCo3

3,172,000 107,179,000 3,172,500 66.66% 3rd Floor, Lottery Company Building, 0 2694 6600

Carbonate Co., Ltd. production USD Baht 4th Km., Dien Bien R, Yen Bai Province,

and trading S.R. of Vietnam

in Vietnam

Type ofbusiness

Name Paid up capitalNo. of paid-upcapital (shares)

% ofholding

Head Office TelephoneAuthorized

capital

1 0 0 B a n p u P u b l i c C o m p a n y L i m i t e d

22 Universal Exploration Drilling & 790,000,000 790,000,000 7,900,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Co., Ltd. exploration Baht Baht 1550 New Petchburi Road,


23 Promsin Co., Ltd. Property 580,000,000 580,000,000 5,800,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

development Baht Baht 1550 New Petchburi Road,


24 Banpu Power Ltd. Investment 2,000,000,000 2,000,000,000 200,000,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

in power Baht Baht 1550 New Petchburi Road,


25 Banpu Coal Power Ltd. Investment 427,240,000 427,240,000 42,724,000 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

in power Baht Baht 1550 New Petchburi Road,


26 Banpu Power Vietnam I Investment 2,750,000 58,606,000 2,751,000 100.00% 1 Temasek Avenue #27-01, Millenia Tower, 0 2694 6600

Pte. Ltd. in power Baht Baht Singapore 039192

27 Banpu Power Investment 50,000 4,000 100 100.00% Island of New Providence, 0 2694 6600

International Ltd. in power USD Baht Commonwealth of the Bahamas

28 Banpu Rayong Power Investment 1,000,000 250,000 10,000 99.93% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Ltd. in power Baht Baht 1550 New Petchburi Road,


29 Synergy Power Investment 1,484,400,000 222,659,900 2,226,599 99.99% 26-28th Floor, Thanapoom Tower, 0 2694 6600

Co., Ltd. in power Baht Baht 1550 New Petchburi Road,


Associated Companies

30 BLCP Power Ltd. Power 400,000,000 322,500,000 900,000 50.00% 25th Floor, Thanapoom Tower, 0 2694 6600

production Baht Baht 1550 New Petchburi Road,

and sales Makkasan, Ratchathewi, Bangkok 10400

31 Amata Power Power 5,500,000 169,920,000 3,428,572 30.00% Long Binh Ward, Bien Hoa City, 0 2694 6600

(Bien Hoa) Ltd. production USD Baht Dong Nai Province, S.R. of Vietnam

and sales

32 Ratchaburi Electricity Power 14,500,000,000 14,500,000,000 1,450,000,000 14.99% 20th Floor, SCB Park Plaza, 0 2978 5000

Generating Holding production Baht Baht Tower 3, East, Ratchadapisek Road,

Plc. and sales Jatujak, Bangkok 10900

Type ofbusiness

Name Paid up capitalNo. of paid-upcapital (shares)

% ofholding

Head Office TelephoneAuthorized

capital

26th - 28th Floor, Thanapoom Tower,

1550 New Petchburi Road, Makkasan,

Ratchathewi, Bangkok 10400, Thailand

Phone : 66 (0) 2694 6600

Fax : 66 (0) 2207 0695-8

www.banpu.co.thBANPU PUBLIC COMPANY LIMITED

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