SET Announcements

Project has been achieved the Major Provisional Acceptance conforming the major condition under term loan agreement. Currently, the PQI project has been producing saleable products that meet the government specification sold to the market. In late May 2009, the Company will conduct the final performance test run according to the EPC contract before handover the Project from the contractor to the Company. 4.2 Foreign Exchange Another factor which may have impact on the Company's performance is the foreign exchange volatility (mostly Baht/USD). The Company pays for the feedstock in US dollar term and sells its product on US dollar-linked basis, and subsequently records transactions as trade payable and trade receivable respectively. Since the Company's assets are greater than liabilities', the appreciation of Thai Baht will cause the shrink in net assets value, Baht margin value, and vise versa. However, being aware of that risk, the Company has been managing to mitigate the risk by utilizing some market financial instrument. In addition, as completion of the loan refinancing on July 2, 2008, the Company has performed Cross Currency Swap (CCS) from Thai baht loan to Dollar link amounted USD 200 million following the policy to leverage the differences of US dollar liabilities balancing with revenue (natural Hedge) to protect the business from impact of the exchange rate fluctuations. Therefore, when the Baht depreciates, the Company will record loss from exchange rate and realize the increase revenue in the term of baht. But in the other hand, when the Baht appreciates, the revenue in the term of baht will be reduced however the Company will realize gain from the exchange rate. The referred CCS contracts affected from January 5, 2009 to June 30, 2013. 4.3 Gross Refining Margin Hedging (GRM Hedging) Although the Company has fully adopted PQI project to add long term business value, the situation of oil price likely to continually fluctuate according to fundamental factors both demand and supply as well as speculating of which directly affects gross refining margin. Being realized such risk, the Price Risk Management Committee (PRMC) consisted of high-level executives and related divisions, was set up in 2006. PRMC is responsible in officiate prescribed hedging policy and objective as well as closely monitor the oil price market situation to minimize impact on business operations by utilizing some hedging instruments to determine the appropriate and level satisfied margin between product and crude in advance and/or inventory price management. As of March 31, 2009, the Company has outstanding hedging forward contracts of 11.3 million barrel, for the period of April to December 2009.