the fine in the Thai Appeals Court in 2005. We believe that our basestocks were properly described and that we have a good case on the merits and have therefore not made any provision for this judgment, although we cannot provide any assurance that we will be successful in the appeal. We have since revised our procedures to prevent a similar issue from arising in the future. No. of Employees We had 3,022 employees as of December 31, 2007. These employees were employed primarily as service station attendants. In addition, we outsource to ExxonMobil affiliates a substantial number of business support functions including human resource, legal, accounting, information technology, procurement, sales and certain administration services. Company Background We are a public limited liability company incorporated and domiciled in Thailand. We were incorporated in 1965, although parts of our businesses have been operated through affiliates of ExxonMobil or their predecessors in Thailand for over 100 years. We registered our conversion to a public company with limited liability on March 12, 1996. ExxonMobil currently beneficially owns 87.5% of our share capital and the Ministry of Finance owns the remaining 12.5%. On September 24, 2007, in connection with the Corporate Restructuring, EMCTL's entire business was transferred to us effective on September 1, 2007 for accounting purposes. Our refinery commenced operations in 1971 with a licensed capacity of 35,000 barrels per day. In 1985, the Government approved the expansion of our refinery's licensed capacity to 63,000 barrels per day and we increased our capacity to 63,000 barrels per day through debottlenecking. In 1991, the Government approved the expansion of our refinery's licensed capacity to 185,000 barrels. See "Other Material Agreements" Agreement for Expansion and Operation of Petroleum Refinery with Ministry of Industry." We have gradually brought our refinery capacity to the present 177,000 barrels per day through a series of improvements and upgrades. In 1998, we began construction of our aromatics plant at the Sriracha refinery site. Construction of our aromatics plant was completed in 1999, with a capacity of 350,000 tons per annum of paraxylene. Since start-up, the operation of our aromatics plant has been integrated into our refinery. In 2004, we increased our capacity to 500,000 tons per annum through low cost capacity creep projects. In addition, we increased our ability to generate our own paraxylene feedstock by converting an idle powerformer unit into a transalkylation unit. The unit, which utilizes a transalkylation reaction, upgrades heavy aromatics streams to xylene feedstock, and has a capacity of 120,000 tons per annum of paraxylene equivalent. Our solvent production unit, which was treated as having been transferred to us from EMCTL effective on September 1, 2007 for accounting purposes, commenced operations in 1990 with a production capacity of 30,000 tons per annum. As a result of several debottleneckings, it currently has a production capacity of 50,000 tons per annum. The solvent production unit is also integrated with our refinery. Investment in Subsidiary/ Associated/ Related Companies Investment in subsidiaries and affiliates/related companies as of December 31, 2007 are as follows: Unit: Million Baht % of Paid-up Common Investment Name Type of Business Capital Shareholding Cost Mobil Enterprises (Thailand) Lube & Specialties 3.33 100 1 Limited Industry Promotion Enterprises Real Estate Leasing 3.33 100 51 Limited United Industry Development Real Estate Leasing 10 100 59 Company Limited Pacesetter Enterprises Limited Real Estate Leasing 10 99.99 3 Thai C-Center Company Limited Service Station Operator 50 99.99 - The ownership percentages detailed above include the effects of both direct and indirect ordinary shareholdings, but excludes preferred shares. The Company does not own any of the preference shares issued by these subsidiaries, but has the ability to govern the financial and operating policies of each subsidiary. Capital of Industry Promotion Enterprises Limited, United Industry Development Company Limited, and Pacesetter Enterprises Limited, consists of ordinary shares and preference shares. Taking into account preferred shares, our shareholding in these subsidiaries will be 30%, 49%, and 33% respectively. In addition, we hold shares in Thai Petroleum Pipeline Company Limited of approximately 21% (including both ordinary shares and preference shares) Change in Capital in the last 3 years Unit: Million Baht Capital increase After the increase Date (decrease) (decrease) Note 24 September 21,000,000,000 26,100,000,000 Repaid debts and liabilities 2007 transferred from ExxonMobil Chemical (Thailand) Company Limited under capital and corporate restructuring plan 15 November (13,222,782,000) 12,877,218,000 Par value reduction to apply 2007 capital injection towards unappropriated retained deficit Accounting Period 1 January - 31 December Name Prasan Chuaphanich PricewaterhouseCoopers ABAS Limited Registrar Thailand Securities Depository Company Limited ("TSD") Financial Advisor Phatra Securities Public Company Limited Dividend Policy Our board of directors may recommend annual dividends, subject to the approval of the Company's shareholders. Our board of directors may by resolution decide to pay to our shareholders such interim dividends as appear to the directors to be justified by our profits. Distribution of an interim dividend must be reported to the shareholders at the next general meeting of shareholders following the meeting of our board of directors approving the interim dividend. Dividends (annual or interim) are distributed equally on each outstanding share. Dividends may be distributed either in cash or, if approved by our shareholders in a general meeting, in the form of shares. Although we have not declared any dividends in the recent past, it is the current policy of our board of directors to recommend to our shareholders a dividend of not less than 40% of net profits after deduction of all specified reserves, subject to our investment plans, applicable laws, contingencies and other relevant considerations. The actual dividend payout ratio may vary above or below the level indicated in our dividend policy and is subject to the certain risks outlined in the risk factors section. Dividend policy of our subsidiaries will be determined by Board of Directors of each subsidiaries and subject to shareholders' approval. Dividend payment depends on necessary reserve, investment plan, applicable laws, contingencies, and other relevant considerations. B.O.I. Certificates The company received BOI certificates for petroleum production and paraxylene production for chemical products that produced from petroleum in Thailand from Board of Investment Promotion issued under the Investment Promotion Act B.E. 2520 We received BOI certificates for investment in petroleum production business on July 16, 1992, which indicated refining capacity 82,000 barrels per day. For our aromatics production plant, we received BOI certificates on January 16, 1998 to implement construction of aromatics plant located near Sriracha refinery, which indicated paraxylene production capacity of 350,000 tons per annum (24 working hours per day and 365 working days per year). Subsequently, we received permission from Board of Investment Promotion to increase production capacity to 420,000 tons per annum and 540,000 tons per annum on June 15, 2001 and July 23, 2003, respectively. No. of Shareholders As of April 30, 2008 No. of shareholders No. of shares % of paid-up capital 1. Strategic shareholders 1.1 Directors, manager, and 0.0 0.0 0.0 executive management including related persons and associated persons 1.2 Shareholders who have a 16.0 2,909,666,600.0 86.0 holding of above 5% including related persons* 1.3 Controlling Shareholders 0.0 0.0 0.0 2. Non-Strategic shareholders hold 18,178.0 473,666,700.0 14.0 > 1 trading unit 3. Non-Strategic shareholders hold 0.0 0.0 0.0 < 1 trading unit Total Shareholders 18,194.0 3,383,333,300.0 100.0 Note*: Including shares which has been allotted to Morgan Stanley & Co. International PLC as Initial Purchaser amounting to 456,749,900 shares, representing 13.5% of total paid-up Major Shareholders As of April 30, 2008 Post-IPO Pre-IPO % of paid-up % of paid-up Name No. of shares capital No. of shares capital 1. ExxonMobil Affiliates 2,199,166,700 65.00 2,283,750,000 87.50 2. Morgan Stanley & Co. 456,749,900 13.50 - - International PLC 3. Ministry of Finance 253,750,000 7.50 326,250,000 12.50 4. Ayudhaya Alliance CP Life 15,500,000 0.46 - - Insurance Public Company Limited 5. American International Assurance Company Limited - AIA D-PLUS 13,636,400 0.40 - - 6. American International Assurance Company Limited - APEX 8,181,800 0.24 - - 7. American International Assurance Company Limited - Tiger 8,181,800 0.24 - - 8. Bualuang Long-term equity fund 3,350,000 0.10 - - 9. Mr. Suchon Simakulthorn 2,776,500 0.08 - - 10. Government Saving Bank 2,666,100 0.08 - - . Total 2,963,959,200 87.60 2,610,000,000 100.0 Note: ExxonMobil Affiliates has lent 84,583,300 shares to cover the over-allotment and will be returned within 30 days from the first trading day. Upon the return of the shares, ExxonMobil Affiliates will beneficially own 67.5% of total paid up capital (assuming no over-allotment option is exercised) or 65.85% (assuming the option is exercised in full). Morgan Stanley & Co. International PLC as Initial Purchaser amounting to 456,749,900 shares, representing 13.5% of total paid-up Foreign Shareholders As of April 30, 2008 No. of foreign shareholders 102 Total no. of share held 2,693,333,900 or 79.61% of paid-up capital Board of Directors Name Position Start Date Mr. Daniel E. Lyons Chairman and Managing Director 1 July 2007 Ms. Porntida Boonsa Finance Director 15 June 2007 Mr. Parut Chatikavanij Manufacturing Director 9 September 2004 Mr. Mongkolnimit Auacherdkul Director and Public Affairs Manager / 24 March 2006 Performance Evaluation Committee Mr. Yeo Kee Whye Director and Retail Manager 1 December 2006 Mr. Adisak Jangkamolkulchai Director and Refinery Process Manager 8 September 2006 Mr. Somjate Saifon Director and Chemicals Manager 11 October 2007 Mr. Kurujit Nakornthap Director 23 March 2007 Mr. Wattana Chantarasorn Director / Performance Evaluation Committee 19 October 2007 Mr. Sompop Amatayakul Independent Director / Chairman of Audit 19 October 2007 Committee Mr. Smit Tiemprasert Independent Director / Audit Committee / 19 October 2007 Performance Evaluation Committee Ms. Wattanee Phanachet Independent Director / Audit Committee 19 October 2007 Dr.Kurujit Nakornthap is nominated from the Ministry of Finance. The other directors are nominated from other shareholders, which are Exxon Mobil Corporation's affiliates Audit Committee The board of directors meeting / shareholders meeting No. 2/2550 held on October 19, 2007 passed a resolution appointing the audit committee Members of the audit committee Chairman.................Mr.Sompop Amatayakul Member...................Mr. Smit Tiemprasert Member...................Mr.Wattanee Phanachet Secretary................Ms.Chai Jangsirikul Audit Committee Coordinator... Dr.Wanawan Peyayopanakul Scope of duties and responsibilities 1. to review the Company's financial reporting process to ensure accuracy and adequacy; 2. to ensure that the Company has a suitable and efficient internal control system and an internal audit system; 3. to review the performance of the Company to ensure compliance with the securities and exchange law, regulations of the SET or laws relating to the business of the Company; 4. to consider, select, nominate and recommend remuneration of the Company's external auditors; 5. to review the disclosure of information of the Company in the event of a connected transaction or transaction that may lead to conflict of interest so as to ensure accuracy and completeness; 6. to prepare a report on monitoring activities of the Audit Committee and disclose it in the annual report of the Company, and have such report signed by the chairman of the audit committee; and 7. to perform any other task assigned by the board of directors and agreed by the audit committee. Terms for holding office 1. Chairman.................. 2 years 2. Member........... 2 years (Including the additional appointment to and removal from the audit committee) Listing Conditions - N/A - Silent Period Existing shareholders prior to the Initial Public Offering (excluding the Ministry of Finance) comprising an aggregate of 55% of post- offering share capital have agreed with the SET for not selling shares for a period of 1 year from the date of commencement of share trading on the SET. However, up to 25% of these shares may be sold after the period of six months after trading commences on the SET and the rest of these shares may be sold after one year after trading commences on the SET In addition, we and our principal shareholders, namely ExxonMobil International Holdings Inc. and the Ministry of Finance have agreed with the initial purchaser and the Thai lead underwriter that from the date of this offering circular until the date that is 360 days after the closing date of the combined offering, we and they will not, without the written consent of the initial purchaser and the Thai lead underwriter, offer, sell or otherwise dispose of any securities of the same class as the ordinary shares offered in the combined offering, or any securities convertible into or exchangeable for our securities of the same class as the ordinary shares offered in the combined offering. Relaxation - N/A - Others Interim Dividend Payment On March 28, 2008, our board of directors approved a plan to pay an interim dividend of Baht 1 per share to shareholders, whose names appear on our register of shareholders on the relevant book closure, subject to specified conditions. If confirmed and approved, all shareholders (including investors in the combined offering) whose names appear on our register of shareholders on the relevant book closure date will be entitled to such interim dividend. Statistic Summary Esso (Thailand) Public Company Limited (Company Only) ----------Million Baht -------------------------------Baht / Share* ----------- Sales Profit for Profit for Dividend Book Value Dividend Year Revenue the year the year per share payout ratio (%) 2005** 172,588 5,843 11.46 - (10.56) - 2006** 194,217 1,466 2.87 - (7.13) - 2007 198,728 6,880 6.44 - 9.28 - For 12 months ended December 31 (Restated for 2005 and 2006) * Par value Baht 4.9338 in 2007 and Baht 10 in 2005 and 2006 (total shares 2,610 million shares as of December 31, 2007 and 510 million shares as of December 31, 2005 and 2006) ** Restatement of 2005 and 2006 financial statements is done for consistency with certain changes adopted in our audited 2007 financial statements. Esso (Thailand) Public Company Limited and Subsidiaries (Consolidated) ----------Million Baht -------------------------------Baht / Share* ----------- Sales Profit for Profit for Dividend Book Value Dividend Year Revenue the year the year per share 2005** 173,658 6,781 13.30 - (10.56) - 2006** 195,305 1,573 3.08 - (6.92) - 2007 199,904 7,053 6.60 - 9.35 - For 12 months ended December 31 (Restated for 2005 and 2006) * Par value Baht 4.9338 in 2007 and Baht 10 in 2005 and 2006 (total shares 2,610 million shares as of December 31, 2007 and 510 million shares as of December 31, 2005 and 2006) ** Restatement of 2005 and 2006 financial statements is done for consistency with certain changes adopted in our audited 2007 financial statements. Esso (Thailand) Public Company Limited (Company Only) For Accounting Period 1 January - 31 December (Restatement of 2005 and 2006 financial statements is done for consistency with certain changes adopted in our audited 2007 financial statements) Balance Sheet (Unit: Million Baht) As at December 31, 2005 % of total 2006 % of total 2007 % of total Assets (restated) assets (restated) assets assets (more)