12. Other Related Information

12.1 The Significant Changes of the Company after 31 March 2010

The Company foresaw opportunities to enhance the Company’s
competitiveness in the real estate business, as well as opportunities in
investing in a company which has strong business performance, and
enlarging the Company’s market capitalization, which may lead to on
increase in the liquidity of the shares of the Company and should
benefit shareholders of the Company. Therefore, on 22 March 2010, and 29
April 2010, the meeting of the Board of Directors of the Company No.
2/2010 and the Extraordinary General Meeting of the Shareholders of the
Company No. 1/2010, respectively, approved the acquisition by the
Company of ordinary shares of BTSC, which is a SkyTrain operator and,
recently, expanded its business to property development along the
skytrain route. In this regard, the Company has proceeded with the
acquisition of ordinary shares of BTSC as follows:

12.1.1 Borrowing Money for the purposes of Acquisition of Ordinary
Shares of BTSC and Business Operation

On 22 April 2010, the Company entered in a credit facility agreement
with Bangkok Bank Pcl. for borrowing money in the maximum amount Baht
22,000 million (the “Facility Agreement”) for the purposes of the
acquisition of ordinary shares of BTSC (total aggregate amount of Baht
21,000 million) and business operation (total aggregate amount of Baht
1,000 million). The Company drew down Baht 20,656 million to pay for the
cash consideration of the acquisition of BTSC ordinary shares.

As of 14 June 2010, the Company used the funds received from the
issuance and the offering of the new ordinary shares of the Company to
its existing shareholders pro rata to their shareholding (Rights
Offering), to the group of financial institution investors and to a
group of clients of securities companies who are the Company’s
underwriter (Private Placement) in an approximate amount of Baht
11,990.2 million (as per details in Item 12.1.6) to partially repay the
lender the debt under the Facility Agreement. As a result, on such date,
the Company has outstanding debt under the Facility Agreement in the
approximate amount of Baht 8,656 million.

12.1.2 Reduction of the Company’s Registered Capital

On 30 April 2010, the Company registered the reduction of its registered
capital in the amount of 89,758,196 shares, with the par value of Baht
one per share, from the existing registered capital of Baht
7,704,149,999 to Baht 7,614,391,803 by canceling the Company’s unissued
shares in the amount of 89,758,196 shares remaining from the exercise of
right granted to the existing shareholders under the Company’s warrants
(TYONG W-1) to purchase newly issued shares of the Company. Such TYONG
W-1 Warrants expired on 13 November 2009.

12.1.3 Increase of the Company’s Registered Capital

On 3 May 2010, the Company registered the increase of its registered
capital by Baht 57,527,799,099 from the existing registered capital of
Baht 7,614,391,803 to Baht 65,142,190,902 by issuing 57,527,799,099 new
ordinary shares with the par value of Baht one per share.

The purpose of this increase of registered capital is to accommodate (1)
the issuance and the offering of the new ordinary shares to the
shareholders of BTSC pursuant to the acquisition of ordinary shares of
BTSC (as per details in Item 12.1.4 below), (2) the issuance and the
offering of the new ordinary shares to its existing shareholders pro
rata to their shareholding (Rights Offering) the remaining shares of
which will be issued and offered to the group of financial institution
investors or a group of clients of securities companies who are the
Company’s underwriter (as per details in Item 12.1.6 below), (3) the
allocation of the new ordinary shares in preparation for the exercise of
right under the Company’s warrants (BTS-W2) which will be allocated the
a persons who subscribed and will receive the shares allocation pursuant
to (2) mentioned earlier, and (4) the allocation of the new ordinary
shares to the remaining shareholders of BTSC through PO placement as
compensation for such shareholders bringing their shares to be used as
payment for the price of the new ordinary shares of the Company instead
of making the payments by cash.

12.1.4 Acquisition of Ordinary Shares of BTSC

The Company entered into agreements for the acquisition of ordinary
shares of BTSC from four shareholders of BTSC, namely, the Share
Purchase Agreements with three BTSC shareholders and the Entire Business
Transfer with one BTSC shareholder. Consequently, the Company has
acquired a total of 15,022,335,992 BTSC ordinary shares, with the par
value of Baht one per share, or equivalent to 94.60 % of total issued
shares of BTSC at the date the Company entered into the Share Purchase
Agreement. The Company purchased BTSC ordinary shares at the price of
Baht 2.665 per BTSC share, for the total consideration of Baht
40,034,525,418.68. The Company made partial payment of such
consideration in the form of cash equal to Baht 20,655,711,989.69 (equal
to 51.59% of the total consideration). For the remaining consideration
of Baht 19,378,813,428.99 (equal to 48.41% of the total consideration),
the Company made payment by issuing 28,166,879,984 new ordinary shares,
with the par value of Baht one per share, at the offering price of Baht
0.688 per share. Details of the acquisition of ordinary shares of BTSC
from BTSC shareholders are summarized as follows:

  1. The Company purchased BTSC shares in the aggregate amount of
  6,656,535,992 shares at Baht 2.665 per share from the following three
  BTSC shareholders.

  1.1 The Company purchased 5,748,127,269 BTSC shares from Siam Capital
  Developments (Hong Kong) Limited (“Siam Capital”) for Baht
  7,903,674,995.13 in cash and 10,777,738,629 new ordinary shares of the
  Company.

  1.2 The Company purchased 508,408,723 BTSC shares from Keen Leader
  Investments Limited (“Keen Leader”) for Baht 699,061,994.56 in cash
  and 953,266,355 new ordinary shares of the Company.

  1.3 The Company purchased 400,000,000 BTSC shares from Mr. Keeree
  Kanjanapas (“Mr. Keeree”) for Baht 550,000,000 in cash and 750,000,000
  new ordinary shares of the Company;

  2. The Company entered into the agreement to accept the transfer of
  the entire business from Siam Rail Transport and Infrastructure
  Company Limited (“Siam Rail”) for a total consideration of Baht
  22,294,857,000. The entire business of Siam Rail consists of
  8,365,800,000 BTSC ordinary shares and the debt of Siam Rail, which
  the Company repaid on the day of the entire business transfer. In this
  regard, the Company paid an aggregate amount of Baht 11,502,975,000 in
  cash and issued 15,685,875,000 new ordinary shares of the Company to
  Siam Rail.

Siam Rail, a company established under the law of Thailand, has Baht
250,100,000 registered capital with Mr. Keeree, Mr. Kavin and Siam
Infrastructure Ltd. (“Siam Infrastructure”) holding 50.9%, 0.1% and
49.0% of the registered capital in Siam Rail respectively. Siam
Infrastructure is established in Hong Kong, and 100% of its shares are
owned by Asian Transport and Infrastructure Limited, a company
established in the Cayman Islands.

Since the transfer of the entire business from Siam Rail to the Company
is considered as an entire business transfer in accordance with the
Revenue Code, the Company, as the transferee, is required to carry the
assets (i.e. BTSC shares) at the same value as appears in the books of
accounts of Siam Rail (or book value) which will be the cost base used
for the tax calculation if the Company sells these portions of shares in
the future. The value of BTSC shares appearing in the books of accounts
of Siam Rail can be summarized as follows:

  ------------------------- ---------------------------------------------
  Number of                 Book Value of BTSC Shares
  BTSC shares               (Baht per share) carried by the Company from
                            Siam Rail

  6,985,800,000             1.00

  1,380,000,000             1.60
  ------------------------- ---------------------------------------------

On 4 May 2010, the four BTSC shareholders as mentioned above completed
the transfer of 15,022,335,992 BTSC shares to the Company and the
Company has completed the payment of Baht 20,655,711,989.69 in cash and
the issuance of its 28,166,879,984 new ordinary shares to such four BTSC
shareholders.

After the issuance of the new ordinary shares to the shareholders of
BTSC pursuant to the acquisition of ordinary shares of BTSC, the Company
has paid-up capital of Baht 35,781,271,787.

The Shareholding Structure of the Company and BTSC after the acquisition
of ordinary shares of BTSC (as of 17 May 2010) (Before the Rights
Offering, including the offering of the unsubscribed shares from the
Rights Offering through the Private Placement)

12.1.5 Change of the Company’s Name to “BTS Group Holdings Public
Company Limited”

In order to reflect the change in the Company’s new main business after
the acquisition of BTSC, in which the mass transit business becomes the
main revenue driver for the Company and the Group in the future, the
Company requested approval from the Extraordinary General Meeting of
Shareholders No. 1/2010, held on 29 April 2010, to proceed with the
change of the Company’s name and registered the change of its name from
“Tanayong Public Company Limited” to “BTS Group Holdings Public Company
Limited” with the Ministry of Commerce on 4 May 2010, and proceeded with
the change of its trading initial from “TYONG” to “BTS” with the Stock
Exchange of Thailand on 11 June 2010.

  12.1.6 Issuance of New Ordinary Shares to the Existing Shareholders
  including the Offering of the Remaining Shares to Specific Investor
  (Private Placement)

From 31 May 2010 to 7 June 2010, the Company issued and offered the new
ordinary shares of the Company to its existing shareholders pro rata to
their shareholding (Rights Offering), in the ratio of four new shares
for seven original shares, at Baht 0.63 per share, in the total amount
of 20,150,704,709 shares. The existing shareholders have exercised their
rights to purchase the new ordinary shares in the total amount of
14,572,185,252. Furthermore, From 8 June 2010, to 11 June 2010, the
Company issued and offered the remaining unsubscribed new ordinary
shares from the Rights Offering in the amount of 5,578,519,457 shares to
the group of financial institution investors or a group of clients of
securities companies who are the Company’s underwriter (Private
Placement), provided that such persons are not connected persons of the
Company, at Baht 0.63 per share. The group of financial institution
investors and a group of clients of securities companies have partially
subscribed to such new ordinary shares in the total amount of
4,459,818,846 shares. Accordingly, the Company has allocated the shares
in the Rights Offering and the Private Placement in the total amount of
19,032,004,098 shares; and the Company received total proceeds of
approximately Baht 11,990.2 million. In this regard, the Company still
has 1,118,700,611 shares remaining unallocated. The Company may proceed
to offer the remaining new ordinary shares to the group of financial
institution investors or a group of clients of securities companies who
are the Company’s underwriter, provided that such persons shall not be
connected persons of the Company.

On 14 June 2010, the Company registered the increase of its paid-up
capital by Baht 19,032,004,098 with the Ministry of Commerce, causing
the Company’s paid-up capital to increase from Baht 35,781,271,787 to
Baht 54,813,275,885.

2.  Management Discussion and Analysis of BTSC’s Financial Performance

12.2.1 Financial Statements

In May and September 2009, BTSC acquired 100% of shares in BTS Assets
Co., Ltd. and VGI respectively. Both transactions are recorded in the
accounts using the business combinations under common control method. As
a result, both subsidiaries’ operating results are consolidated as if
they have been subsidiaries of BTSC since they were established,
regardless of the actual acquisition dates. The Fiscal Year 2009
consolidated and separate financial statements are then restated for
comparison purposes only; the 2008 financial statements were not
restated and do not consolidate the operating results of BTS Assets nor
VGI.

  12.2.1.1 Summary of financial statements

Balance Sheet

  -------------------------------------------------------------------------------------------
                           Consolidated                                  Company     
                           Financial                                     Only        
                           Statement                                     Financial   
                                                                         Statement   
  ------------------------ -------------- -------- ------------ -------- ----------- --------
                           As of 31 March                                            

                           (Audited)               (Audited)             (Audited)   
                                                   (Restated)                        

  (Million Baht)           2010           % of     2009         % of     2008        % of
                                          Total                 Total                Total
                                          Assets                Assets               Assets

  Current assets                                                                     

  Cash and cash            2,165          4.1      4,290        8.0      3,021       6.1
  equivalents                                                                        

  Current investments -    10             0.0      148          0.3      38          0.1
  deposits at financial                                                              
  institution                                                                        

  Trade accounts           530            1.0      207          0.4      328         0.7
  receivable                                                                         

  Short-term loans to      0              -        440          0.8      0           -
  related parties and                                                                
  director                                                                           

  Real estate development  3,970          7.4      2,804        5.2      0           -
  costs                                                                              

  Other current assets     229            0.4      224          0.4      202         0.4

  Total current assets     6,905          12.9     8,113        15.1     3,588       7.2

  Non-current assets                                                                 

  Restricted deposits at   339            0.6      417          0.8      1,693       3.4
  financial institution                                                              

  Project costs - net      43,443         81.4     43,304       80.6     43,253      86.9

  Property, plant and      1,492          2.8      799          1.5      141         0.3
  equipment - net                                                                    

  Other non-current assets 1,210          2.3      1,064        2.0      1,089       2.2

  Total non-current assets 46,484         87.1     45,584       84.9     46,176      92.8

  Total assets             53,389         100.0    53,697       100.0    49,764      100.0

  Liabilities and                                                                    
  shareholders’ equity                                                               

  Current liabilities                                                                

  Short-term loans from a  500            0.9      868          1.6      0           -
  financial institution                                                              

  Trade accounts payable - 202            0.4      547          1.0      812         1.6
  unrelated parties                                                                  

  Short-term loans from a  0              -        227          0.4      0           -
  related party                                                                      

  Current portion of       0              -        1,094        2.0      0           -
  liabilities under                                                                  
  rehabilitation plan                                                                

  Payable under            0              -        0            -        59,197      119.0
  rehabilitation plan -                                                              
  net                                                                                

  Other current            1,619          3.0      2,468        4.6      5,994       12.0
  liabilities                                                                        

  Total current            2,322          4.3      5,204        9.7      66,003      132.6
  liabilities                                                                        

  Non-current liabilities                                                            

  Liabilities under                                                                  
  rehabilitation plan                                                                

  - net of current portion 0              -        13,627       25.4     0           -

  Unsubordinated           0              -        4,958        9.2      0           -
  convertible bonds -                                                                
  liability component                                                                

  Long-term loan from a    96             0.2      0            -        0           -
  financial institution                                                              

  Long-term debentures     11,874         22.2     0            -        0           -

  Other non-current        1              0.0      3            0.0      7           0.0
  liabilities                                                                        

  Total non-current        11,971         22.4     18,589       34.6     7           0.0
  liabilities                                                                        

  Total liabilities        14,293         26.8     23,793       44.3     66,011      132.6

  Shareholders’ Equity                                                               

  Share capital - Issued   15,880         29.7     10,058       18.7     1,216       2.4
  and fully paid                                                                     

  Share premium            16,889         31.6     16,639       31.0     0           -

  Surplus on business      (2,517)        (4.7)    (2,517)      (4.7)    0           -
  combination under common                                                           
  control                                                                            

  Unsubordinated                                                                     
  convertible bonds                                                                  

  - equity component       0              -        1,089        2.0      0           -

  Retained earnings        8,452          15.8     4,235        7.9      (17,462)    (35.1)

  Equity attributable to   38,703         72.5     29,504       54.9     (16,247)    (32.6)
  the Company’s                                                                      
  shareholders                                                                       

  Minority interest        393            0.7      400          0.7      0           -

  Total shareholders'      39,097         73.2     29,904       55.7     (16,247)    (32.6)
  equity                                                                             

  Total liabilities and    53,389         100.0    53,697       100.0    49,764      100.0
  shareholders' equity                                                               
  -------------------------------------------------------------------------------------------

Income Statement

+-----------------------------+-----+-----+-----+------+-----+------+
|                             | Con |     |     |      | C   |      |
|                             | sol |     |     |      | omp |      |
|                             | ida |     |     |      | any |      |
|                             | ted |     |     |      | O   |      |
|                             | Fin |     |     |      | nly |      |
|                             | anc |     |     |      | Fin |      |
|                             | ial |     |     |      | anc |      |
|                             | Sta |     |     |      | ial |      |
|                             | tem |     |     |      | Sta |      |
|                             | ent |     |     |      | tem |      |
|                             |     |     |     |      | ent |      |
+=============================+=====+=====+=====+======+=====+======+
|                             | For |     |     |      |     |      |
|                             | Fi  |     |     |      |     |      |
|                             | rst |     |     |      |     |      |
|                             | Y   |     |     |      |     |      |
|                             | ear |     |     |      |     |      |
|                             | En  |     |     |      |     |      |
|                             | ded |     |     |      |     |      |
|                             | 31  |     |     |      |     |      |
|                             | Ma  |     |     |      |     |      |
|                             | rch |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
|                             | (Au |     | (Au |      | (Au |      |
|                             | dit |     | dit |      | dit |      |
|                             | ed) |     | ed) |      | ed) |      |
|                             |     |     |     |      |     |      |
|                             |     |     | (   |      |     |      |
|                             |     |     | Res |      |     |      |
|                             |     |     | tat |      |     |      |
|                             |     |     | ed) |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| (Million Baht)              | 2   | %   | 2   | % of | 2   | % of |
|                             | 010 | of  | 009 | T    | 008 | T    |
|                             |     | To  |     | otal |     | otal |
|                             |     | tal |     | Reve |     | Reve |
|                             |     | Re  |     | nues |     | nues |
|                             |     | ven |     |      |     |      |
|                             |     | ues |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Revenues                    |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Fare box revenues - net     | 3,  | 7   | 3,  | 68.0 | 3,  | 38.5 |
|                             | 485 | 0.9 | 288 |      | 221 |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Service income from train   | 195 | 4.0 | 0   | 0.0  | 0   | 0.0  |
| operating management        |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Other income                | 0   | 0.0 | 0   | 0.0  | 0   | 0.0  |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Service income            | 106 | 2.2 | 45  | 0.9  | 0   | 0.0  |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Space rental income       | 994 | 2   | 902 | 18.6 | 277 | 3.3  |
|                             |     | 0.2 |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Utility income            | 2   | 0.0 | 2   | 0.0  | 31  | 0.4  |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Interest income           | 30  | 0.6 | 139 | 2.9  | 127 | 1.5  |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Reversal of allowance for | 0   | 0.0 | 0   | 0.0  | 4,  | 56.0 |
|   dimunition in value of    |     |     |     |      | 689 |      |
|   project costs             |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Gain from disposal of     | 0   | 0.0 | 167 | 3.4  | 0   | 0.0  |
|   investment in             |     |     |     |      |     |      |
|   subsidiaries              |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Subsidy of defective      | 0   | 0.0 | 257 | 5.3  | 0   | 0.0  |
|   works                     |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
|   Others                    | 102 | 2.1 | 35  | 0.7  | 31  | 0.4  |
+-----------------------------+-----+-----+-----+------+-----+------+
| Total revenues              | 4,  | 10  | 4,  | 1    | 8,  | 1    |
|                             | 914 | 0.0 | 836 | 00.0 | 377 | 00.0 |
+-----------------------------+-----+-----+-----+------+-----+------+
| Expenses                    |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Costs of fare box           | 2,  | 4   | 2,  | 43.6 | 1,  | 22.7 |
|                             | 128 | 3.3 | 108 |      | 899 |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Costs of space rental       | 251 | 5.1 | 103 | 2.1  | 0   | 0.0  |
+-----------------------------+-----+-----+-----+------+-----+------+
| Costs of services           | 100 | 2.0 | 70  | 1.4  | 0   | 0.0  |
+-----------------------------+-----+-----+-----+------+-----+------+
| Selling expenses            | 80  | 1.6 | 72  | 1.5  | 95  | 1.1  |
+-----------------------------+-----+-----+-----+------+-----+------+
| Administrative expenses     | 750 | 1   | 657 | 13.6 | 430 | 5.1  |
|                             |     | 5.3 |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Loss on exchange            | 47  | 1.0 | 60  | 1.2  | 9   | 0.1  |
+-----------------------------+-----+-----+-----+------+-----+------+
| Other expenses              | 1   | 0.0 | 83  | 1.7  | -   | 0.0  |
+-----------------------------+-----+-----+-----+------+-----+------+
| Total expenses              | 3,  | 6   | 3,  | 65.2 | 2,  | 29.0 |
|                             | 357 | 8.3 | 153 |      | 432 |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Income before finance cost, | 1,  | 3   | 1,  | 34.8 | 5,  | 71.0 |
| corporate income tax and    | 557 | 1.7 | 683 |      | 944 |      |
| gain on debt restructuring  |     |     |     |      |     |      |
| under rehabilitation plan   |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Finance cost                | (5  | (10 | (   | (4   | (   | (4   |
|                             | 15) | .5) | 2,2 | 6.9) | 3,5 | 2.3) |
|                             |     |     | 66) |      | 44) |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Income (loss) before        | 1,  | 2   | (5  | (1   | 2,  | 28.7 |
| corporate income tax and    | 042 | 1.2 | 83) | 2.0) | 400 |      |
| gain on debt restructuring  |     |     |     |      |     |      |
| under rehabilitation plan   |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Corporate income tax        | (   | (1  | (   | (    | 0   | 0.0  |
|                             | 59) | .2) | 33) | 0.7) |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Income (loss) before gain   | 982 | 2   | (6  | (1   | 2,  | 28.7 |
| on debt restructuring under |     | 0.0 | 16) | 2.7) | 400 |      |
| rehabilitation plan         |     |     |     |      |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Gain on debt restructuring  | 4,  | 9   | 22, | 4    | 0   | 0.0  |
| under rehabilitation plan   | 528 | 2.1 | 447 | 64.2 |     |      |
+-----------------------------+-----+-----+-----+------+-----+------+
| Net income for the year     | 5,  | 11  | 21, | 4    | 2,  | 28.7 |
|                             | 510 | 2.1 | 831 | 51.4 | 400 |      |
+-----------------------------+-----+-----+-----+------+-----+------+

Summary of Statement of Cash Flow

+---------------------------------+-----------+-----------+-----------+
|                                 | Con       |           | Company   |
|                                 | solidated |           | Only      |
|                                 | Financial |           | Financial |
|                                 | Statement |           | Statement |
+=================================+===========+===========+===========+
|                                 | For First |           |           |
|                                 | Year      |           |           |
|                                 | Ended 31  |           |           |
|                                 | March     |           |           |
+---------------------------------+-----------+-----------+-----------+
|                                 | (Audited) | (Audited) | (Audited) |
|                                 |           |           |           |
|                                 |           | (         |           |
|                                 |           | Restated) |           |
+---------------------------------+-----------+-----------+-----------+
| (Million Baht)                  | 2010      | 2009      | 2008      |
+---------------------------------+-----------+-----------+-----------+
| Net cash flow from (used in)    | 458       | (384)     | 2,188     |
| operating activities            |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Net cash flow from (used in)    | (2,632)   | (576)     | (1,088)   |
| investing activities            |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Net cash flow from (used in)    | 49        | 2,202     | (5)       |
| financing activities            |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Net increase (decrease) in cash | (2,125)   | 1,242     | 1,095     |
| and cash equivalents            |           |           |           |
+---------------------------------+-----------+-----------+-----------+

  12.2.1.2 Key financial ratios

+--------------------------+------+-----------+----------+-----------+
|                          |      | Con       |          | Company   |
|                          |      | solidated |          | Only      |
|                          |      | Financial |          | Financial |
|                          |      | Statement |          | Statement |
+==========================+======+===========+==========+===========+
|                          |      | Fiscal    |          |           |
|                          |      | Year      |          |           |
|                          |      | ended 31  |          |           |
|                          |      | March     |          |           |
+--------------------------+------+-----------+----------+-----------+
|                          |      | (Audited) | (        | (Audited) |
|                          |      |           | Audited) |           |
|                          |      |           |          |           |
|                          |      |           | (R       |           |
|                          |      |           | estated) |           |
+--------------------------+------+-----------+----------+-----------+
|                          |      | 2010      | 2009     | 2008      |
+--------------------------+------+-----------+----------+-----------+
| Liquidity Ratios         |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Current ratio⁽¹⁾         | t    | 3.0       | 2.0      | 3.5       |
|                          | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Quick ratio⁽¹⁾           | t    | 1.2       | 1.2      | 3.3       |
|                          | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Cashflow liquidity       | t    | 0.1       | (0.1)    | 2.7       |
| ratio⁽¹⁾                 | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Accounts receivable      | t    | 13.0      | 15.8     | 13.2      |
| turnover                 | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Days-sales-outstanding   | days | 27.7      | 22.7     | 27.3      |
+--------------------------+------+-----------+----------+-----------+
| Accounts payable         | t    | 4.7       | 2.9      | 2.7       |
| turnover                 | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Days-payable-outstanding | days | 77.0      | 124.4    | 132.3     |
+--------------------------+------+-----------+----------+-----------+
| Profitability Ratios     |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Gross profit margin      | %    | 48.1      | 46.2     | 41.0      |
+--------------------------+------+-----------+----------+-----------+
| Operating profit         | %    | 30.8      | 29.0     | 31.3      |
| margin⁽²⁾                |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Operating cashflow to    | %    | 31.1      | (31.3)   | 198.3     |
| operating profit ratio   |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Net profit margin⁽³⁾     | %    | 0.2       | (0.1)    | (27.3)    |
+--------------------------+------+-----------+----------+-----------+
| Efficiency Ratios        |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Return on assets⁽³⁾      | %    | 1.8       | (1.2)    | (4.9)     |
+--------------------------+------+-----------+----------+-----------+
| Return on fixed          | %    | 4.5       | 0.8      | (3.4)     |
| assets⁽³⁾                |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Assets turnover ratio    | t    | 0.1       | 0.1      | 0.2       |
|                          | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Financial Policy Ratios  |      |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Interest serviceability  | t    | 2.0       | 0.8      | 1.6       |
| ratio                    | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Contingency Corporate    | t    | 0.1       | (0.1)    | 1.9       |
| ratio                    | imes |           |          |           |
+--------------------------+------+-----------+----------+-----------+
| Dividend payout ratio    | %    | 87.4      | 0.0      | 0.0       |
+--------------------------+------+-----------+----------+-----------+

Note

(1) Exclude creditors under rehabilitation plan and interest payable

(2) Sum of farebox revenue, service income from train operating
management, service income, space rental revenue, revenue from utilities
service deducted by cost of farebox, cost of space rental, cost of
service, selling and administrative expense

(3) Calculated from net profit before extraordinary items such as
reversal of allowance for diminution of project cost, loss from asset
devaluation, loss (gain) from debt restructuring under rehabilitation
plan

12.2.2 Factors Affecting BTSC Results of Operations, Financial Status
and Cash Flows

  12.2.2.1 General economic conditions in Bangkok, Thailand

BTSC currently generates most of its revenue in Bangkok, therefore BTSC
is affected by general economic conditions in Thailand and in Bangkok,
particularly those that affect population growth and tourism. A decline
in GDP and general economic conditions in Thailand and Bangkok may cause
some groups of BTSC’s customers to turn to other modes of transportation
which may adversely affect BTSC’s operating results. Similarly, any
changes that will reduce tourism in Bangkok may have an adverse effect
on BTSC operating results. In addition, the economic slowdown in
Thailand may also lead to a decrease in advertising spending, which will
have an adverse effect upon VGI’s operating result.

  12.2.2.2 Number of passengers

The number of passengers, number of trips and the average number of
stations traveled by passengers directly affect BTSC’s revenues. These
are influenced by several factors beyond BTSC’s control, including
passengers’ commuting needs, confidence in security, level of traffic
congestion, economic conditions and political situations in general,
fuel prices, volume and quality of alternative transportation systems,
completion of real estate developments surrounding or connecting with
BTSC’s stations, government plans for the extension of other
transportation systems.

  12.2.2.3 Competition and availability of other mass transportation

BTSC currently competes with other modes of transportation such as buses
and taxis. Changes in the availability, pricing or quality of these
modes of transportation will affect the number of passengers that choose
the BTS SkyTrain System as their preferred mode of transportation, and
in turn BTSC’s financial results.

  12.2.2.4 Fare Pricing

BTSC’s ability to raise fares is limited by the Concession Agreement.
BTSC may adjust the fare price from time to time with effect for a
period of not less than 18 months provided that such fare price shall
not exceed the Authorized Fare. However, BTSC may adjust the ceiling of
the Authorized Fare as a result of certain changes in various factors,
for example, the change of the Bangkok consumer price index beyond the
specified threshold. This means that BTSC may not be able to raise fares
as a result of an increase in its costs such as maintenance costs or
labor costs. Even if BTSC is allowed to raise fares under the Concession
Agreement, it may choose not to do so if it believes that such a raise
may severely damage its competitive position relative to other modes of
transportation and decrease the ridership.

  12.2.2.5 Ability to compete / bid on future network extensions and new
  lines

BTSC’s business strategies include, among other things, bidding for
concessions to operate planned extensions to existing lines as well as
its extension on additional electric rail lines. With respect to future
expansions of existing lines, BTSC believes it is well positioned to
operate such extensions due to its unique experience in managing the
Sukhumvit Line and Silom Line, its readily available infrastructure for
operating these extensions and the term under BTSC’s Concession
Agreement that provides BTSC with a right of first refusal on
negotiations with BMA under certain conditions. Notwithstanding this,
BTSC believes that these extensions will help it increase ridership on
its System even if BTSC does not win the bid to operate them, as they
will help feed passengers to the BTS SkyTrain.

  12.2.2.6 Government policies

Both BMA and the Government have stated their clear intention of
investing in new public transportation projects, BTSC’s business
strategy also includes interest to participate in bidding for these
projects. However, the government and BMA may change its current plans
and policies in light of future political and economic changes. Any
future changes in the Government’s or BMA’s plans may affect BTSC’s
results of operations.

  12.2.2.7 Fluctuations in exchange rates

Changes in exchange rates can affect BTSC’s results of operations and
cash flows. While BTSC derives most, if not all, of its revenue in Thai
Baht, a portion of BTSC’s expenses and capital expenditure, including
maintenance expenses, are in foreign currencies. Baht depreciation
against these currencies will lower BTSC’s margins and, therefore,
decrease profitability. BTSC is not always able to pass on such
decreases to customers through higher prices, since the Concession
Agreement limits BTSC’s ability to raise fares.

  12.2.2.8 Investment in New Projects

BTSC has significant investment planned in a number of new projects over
the next several years, including the operation of other mass transit
system projects and real-estate development projects. If the development
of these projects costs substantially less than what BTSC has budgeted,
or if BTSC is able to complete the projects ahead of schedule, BTSC’s
financial condition and earnings could improve. Conversely, if BTSC is
unable to complete these projects in accordance with budgets, or if
completion of such projects is delayed or, once completed, such projects
do not operate profitably, BTSC’s financial condition and results of
operations could be adversely affected. Furthermore, in developing its
property projects, BTSC’s subsidiaries have some debt, which may
increase in the future as the projects progress, that bear interest at
floating rate. As a result, fluctuations in interest rates will affect
BTSC’s expense interests.

  12.2.2.9 Cost of energy, labor and other supply materials

The cost of energy and labor constitutes a significant part of BTSC’s
operating expenses. BTSC’s ability to pass on increases in energy and
labor prices to its passengers is limited. In addition, if there is any
significant increase in the price of materials and spare parts, BTSC’s
operating results and financial condition could be affected.

  12.2.2.10 Ability to borrow funds at competitive rates

BTSC’s growth strategy includes investment in real-estate and
competition in concessions for new bus and rail lines. These projects,
by their nature, can be capital intensive and may require high levels of
debt financing. BTSC believes that, with the continued growth of its
business, BTSC may be able to obtain debt financing on competitive
terms. However, if for any reason BTSC is unable to obtain adequate
financing in a timely manner or on acceptable terms or at all, BTSC’s
financial condition and operating results could be adversely affected.

  12.2.2.11 Fluctuation in amortization of accumulated project cost

BTSC amortizes project cost as an expense throughout the 30 year term of
the Concession Agreement by using Unit of Throughput Amortization Method
(Unit of Production). The amortization method is calculated, for each
period, from the actual number of passengers for the period compared to
the actual number of passengers during the period, plus an estimate of
the number of passengers for the remaining term of the Concession
Agreement. An increase in the number of our passengers will result in an
increase in amortization of project costs and, in turn, in BTSC’s
operating expenses. However, increases in passenger numbers will not
only result in increases in amortization of project cost, but will also
result in an increase of farebox revenue. Such increases in revenue
resulting from the increase in the number of passengers may or may not
be higher than the increase in amortization of project cost.

  12.2.2.12 Changes in Project Costs Value

BTSC has hired an independent appraiser on an annual basis to evaluate
the project cost under the Concession Agreement. American Appraisal
(Thailand) Company Limited was the appraiser of the project cost as of
31 March 2010. The Income Approach method has been used for evaluating
fair value by relying on the estimated proceeds and expenses expected to
be incurred during the remaining term of the Concession Agreement. Such
estimation of proceeds and expenses is based on the principal
assumptions of (estimated) ridership, which depends on various factors,
such as the operation of the Silom Line Extension or the competitive
operation of other mass transit systems, including the effects of
political disorder, revolution and terrorism. If the estimated ridership
decreases, the estimated proceeds derived from operations will decrease,
and as a result, the fair value will be lower than the net project cost
pursuant to accounting principles. BTSC shall record the reserved
allowance for diminution of project cost value as an expense to reflect
BTSC’s actual value. In contrast, if the estimated fair value is higher
than the net project cost value according to accounting principles, then
BTSC shall transfer back the reserved allowance for diminution of
project cost value and record it as proceeds. However, diminution and
transfer-back of the reserved allowance for diminution of project cost
value will not affect BTSC’s cash-flow BTSC began the evaluation of fair
value of project cost value prior to its entering into the business
rehabilitation in 2006 and will continue such evaluation every year.

12.2.3 Analysis of Operating Results for the Fiscal Years 2009 and 2010

  12.2.3.1 Total Revenues of BTSC

Total revenues of BTSC for Fiscal Years 2009 and 2010 are Baht 4,835.9
million and Baht 4,913.8 million respectively, with the main revenue
coming from farebox revenue. Other revenues consist of rental of
advertising space on trains and stations, rental of commercial space in
stations, rental of advertising space in modern trade, service income
from the train operating management of Silom Extension Line, service
income, interest income and other revenues such as fees received from
transactions related to the linkage of sky-bridges to stations.

+-------------------------------+------------+-----------+------------+
|                               | Co         |           | Company    |
|                               | nsolidated |           | Only       |
|                               | Financial  |           | Financial  |
|                               | Statement  |           | Statement  |
+-------------------------------+------------+-----------+------------+
|                               | Fiscal     |           |            |
|                               | Year Ended |           |            |
|                               | 31 March   |           |            |
+-------------------------------+------------+-----------+------------+
|                               | (Audited)  | (Audited) | (Audited)  |
|                               |            |           |            |
|                               |            | (         |            |
|                               |            | Restated) |            |
+-------------------------------+------------+-----------+------------+
|                               | 2010       | 2009      | 2008       |
|                               | (Million   | (Million  | (Million   |
|                               | Baht)      | Baht)     | Baht)      |
+-------------------------------+------------+-----------+------------+
|   Farebox revenue – net       | 3,484.7    | 3,288.1   | 3,221.1    |
+-------------------------------+------------+-----------+------------+
|   Service income from train   | 195.0      | -         | -          |
|   operating management        |            |           |            |
+-------------------------------+------------+-----------+------------+
|   Service income              | 106.0      | 45.4      | -          |
+-------------------------------+------------+-----------+------------+
|   Space rental revenues       | 994.2      | 901.8     | 277.3      |
+-------------------------------+------------+-----------+------------+
|   Revenue from utilities      | 2.3        | 1.9       | 31.3       |
|   services                    |            |           |            |
+-------------------------------+------------+-----------+------------+
|   Interest income             | 29.5       | 139.3     | 127.1      |
+-------------------------------+------------+-----------+------------+
|   Reversal of allowance for   | -          | -         | 4,688.7    |
|   diminution in value of      |            |           |            |
|   project costs               |            |           |            |
+-------------------------------+------------+-----------+------------+
|   Gain from disposal of       | -          | 166.7     | -          |
|   investment in subsidiaries  |            |           |            |
+-------------------------------+------------+-----------+------------+
|   Subsidy of defect works     | -          | 257.3     | -          |
|   from subcontractor          |            |           |            |
+-------------------------------+------------+-----------+------------+
|   Others                      | 102.2      | 35.4      | 31.3       |
+-------------------------------+------------+-----------+------------+
| Total revenues                | 4,913.8    |   4,835.9 | 8,376.7    |
+-------------------------------+------------+-----------+------------+

Farebox Revenue

Net farebox revenue is the main revenue of BTSC. For Fiscal Years 2009
and 2010, net farebox revenue amounted to Baht 3,288.1 million and Baht
3,484.7 million, or 74.5% and 70.9% of total revenues respectively
(excluding gain from disposal of investment in subsidiaries and subsidy
of defect works from subcontractor).

BTSC’s net farebox revenue increased from Baht 3,288.1 million in Fiscal
Year 2009 to Baht 3,484.7 million in Fiscal Year 2010, representing an
increase of 6.0%, due mainly to the opening of the Silom Line Extension
on 15 May 2009, which resulted in an increase in passengers of 6.3% from
the previous Fiscal Year 2009 (including only passengers who enter BTSC
system). Net farebox revenue per passenger in Fiscal Year 2010 remains
quite stable at Baht 24.15 per trip compared to Baht 24.22 in Fiscal
Year 2009.

Other revenue

-   BTSC began to provide service for the operation of the 2.2 km Silom
    Line Extension on 15 May 2009 and started to recognize revenue from
    providing such service from that date. For Fiscal Year 2010, revenue
    from train operating management amounted to Baht 195.0 million or
    4.0% of total revenue. In this period, revenue from train operating
    management included revenue from preparation of such service (prior
    to actual opening of the extension, i.e. test-run) of Baht 43.7
    million.

-   Revenue from space rental and service are revenues related to the
    advertising service on BTS trains, BTS stations and modern trade as
    well as merchandising space on BTS stations. For the Fiscal Year
    2010, such revenue amounts to Baht 1,100.2 million, with
    approximately Baht 831.5 million coming from advertising service and
    commercial space rental on BTS SkyTrains and stations, approximately
    Baht 162.7 million coming from advertising service in modern trade
    and others, and approximately Baht 106.0 million from organizing
    promotional activities on BTS stations and modern trade, and being
    the coordinator for production of advertising materials.

  Such revenue from space rental and service increased from Baht 947.2
  million in Fiscal Year 2009, representing an increase of 16.2%. This
  increase was attributed to the increase in revenue from managing of
  advertising media on BTS trains and stations of approximately Baht
  63.6 million mainly due to the increase in advertising time sold as
  well as the increase in price for advertising on LCDs in BTS trains,
  the slight increase in revenue from management of advertising media in
  modern trade due to the commencement of advertising business
  management in Carrefour from July 2009, additional source of revenue
  from management of advertising media in office buildings after the
  acquisition of POV at the end of October 2009, and the increase in
  organizing promotional activities and being the coordinator for
  production and maintenance of advertising materials.

-   Interest income comes from interest earned from deposits at banks.
    Such revenue decreased from Baht 139.3 million in Fiscal Year 2009
    to Baht 29.5 million in Fiscal Year 2010 due to a decrease in cash
    and cash equivalents, short-term investment and restricted deposits
    at financial institution.

  Gain from disposal of investment in subsidiaries in Fiscal Year 2009
  resulted from the sale of BTSC’s 20% stake in Nuvo Line.

  Subsidy of defect works from subcontractor in the Fiscal Year 2009 in
  an amount of Baht 257.3 million was attributable to BTSC’s repayment
  under the Rehabilitation Plan whereby BTSC deducted the value of
  damages incurred from the correction of defect work from the
  performance retention. This resulted in the decrease in retention
  payable in Fiscal Year 2009.

  12.2.3.2 Expenses of BTSC

The BTSC’s primary expenses are cost of farebox, which constituted 68.2%
and 64.3% of total expenses (before interest and excluding loss on
exchange rate) in the Fiscal Years 2009 and 2010 respectively.
Additionally, selling and administrative expenses comprised 26.2% and
25.1% of the total expenses (before interest and excluding loss on
exchange rate) in Fiscal Years 2009 and 2010 respectively.

+-------------------------------+------------+-----------+------------+
|                               | Co         |           | Company    |
|                               | nsolidated |           | Only       |
|                               | Financial  |           | Financial  |
|                               | Statement  |           | Statement  |
+===============================+============+===========+============+
|                               | Fiscal     |           |            |
|                               | Year Ended |           |            |
|                               | 31 March   |           |            |
+-------------------------------+------------+-----------+------------+
|                               | (Audited)  | (Audited) | (Audited)  |
|                               |            |           |            |
|                               |            | (         |            |
|                               |            | Restated) |            |
+-------------------------------+------------+-----------+------------+
|                               | 2010       | 2009      | 2008       |
|                               | (Million   | (Million  | (Million   |
|                               | Baht)      | Baht)     | Baht)      |
+-------------------------------+------------+-----------+------------+
|   Cost of farebox             | 2,127.7    | 2,108.2   | 1,899.2    |
+-------------------------------+------------+-----------+------------+
|   Cost of space rental        | 251.5      | 102.7     | -          |
+-------------------------------+------------+-----------+------------+
|   Cost of service             | 100.3      | 69.7      | -          |
+-------------------------------+------------+-----------+------------+
|   Selling and administrative  | 830.7      | 811.8     | 524.1      |
|   Expenses                    |            |           |            |
+-------------------------------+------------+-----------+------------+
|   Loss on exchange rate       | 46.9       | 59.1      | 8.9        |
+-------------------------------+------------+-----------+------------+
| Total Expenses                | 3,357.1    | 3,152.8   | 2,432.3    |
+-------------------------------+------------+-----------+------------+
| Finance cost                  | 515.1      | 2,265.7   | 3,544.5    |
+-------------------------------+------------+-----------+------------+

Cost of farebox

Cost of farebox consists mainly of amortization of project cost, salary
of operational staff, maintenance expense and utility costs. Cost of
farebox comprised 64.1% and 61.1% of the net farebox earnings in Fiscal
Years 2009 and 2010, respectively. Details of the cost of farebox are
shown in the table below.

+-----------------------------+--------------+-----------+------------+
|                             | Consolidated |           | Company    |
|                             | Financial    |           | Only       |
|                             | Statement    |           | Financial  |
|                             |              |           | Statement  |
+-----------------------------+--------------+-----------+------------+
|                             | Fiscal Year  |           |            |
|                             | Ended 31     |           |            |
|                             | March        |           |            |
+-----------------------------+--------------+-----------+------------+
|                             | (Audited)    | (Audited) | (Audited)  |
|                             |              |           |            |
|                             |              | (         |            |
|                             |              | Restated) |            |
+-----------------------------+--------------+-----------+------------+
|                             | 2010         | 2009      | 2008       |
|                             | (Million     | (Million  | (Million   |
|                             | Baht)        | Baht)     | Baht)      |
+-----------------------------+--------------+-----------+------------+
|   Salary and benefits of    | 445.8        | 381.1     | 333.1      |
|   operational staff         |              |           |            |
+-----------------------------+--------------+-----------+------------+
|   Utilities expense         | 210.8        | 182.7     | 175.5      |
+-----------------------------+--------------+-----------+------------+
|   Maintenance expense       | 476.6        | 607.5     | 557.6      |
+-----------------------------+--------------+-----------+------------+
|   Amortization of project   | 937.5        | 881.8     | 774.7      |
|   costs                     |              |           |            |
+-----------------------------+--------------+-----------+------------+
|   Others                    | 57.0         | 55.2      | 233.8      |
+-----------------------------+--------------+-----------+------------+
| Total cost of farebox       | 2,127.7      | 2,108.2   | 1,899.2    |
+-----------------------------+--------------+-----------+------------+

-   Salary and benefits for the operation staff consists of salary,
    welfare and other benefits. In Fiscal Year 2010, salary and benefits
    of operational staff increased by 17.0% due mainly to the increase
    of the number of employees from 1,180 at the end of Fiscal Year 2009
    to 1,321 at the end of Fiscal Year 2010 to support the operation of
    Silom Line Extension. The increased expense was also attributable to
    annual salary increase.

-   Utilities expense consists of expenses related to electricity and
    water use. In Fiscal Year 2010, utilities expense increased by Baht
    28.1 million, or 15.4%, due to the cost of electricity (Ft) and
    other expenses from the operation of 2.2 km Silom Line Extension.

-   Maintenance cost consists of maintenance cost under the maintenance
    agreement, overhaul expenses and spare parts which cannot be
    recorded as project cost according to the accounting standard
    because of limited concession life. The maintenance cost under the
    maintenance agreement will be adjusted upwards according to the
    Consumer Price Index for Bangkok on an annual basis.

  Overhaul is usually carried out every 7-8 years and each time takes
  approximately 2 years to complete. BTSC carried out overhaul from
  fiscal years 2007-2009. In Fiscal Year 2010, the maintenance expense,
  therefore, decreased by Baht 130.9 million from Fiscal Year 2009. The
  decrease in overhaul expense from Baht 152.5 million in Fiscal Year
  2009 to Baht 26.4 million in Fiscal Year 2010 (amount due from 2009).

-   In Fiscal Year 2010, the amortization of project costs increased
    from Fiscal Year 2009 as the number of passengers increased by 6.3%.
    (Please refer to 12.2.8.2 Project Costs and Unit of Throughput
    Amortization Method (Unit of Production))

Cost of space rental and service

Cost of space rental and service are costs related to advertising space
on BTS trains, BTS stations and modern trade as well as merchandising
space on BTS stations. Such costs mainly consist of sharing of revenue
with modern trade from the management of advertising space in them, cost
of engineers for the maintenance of the advertising media system and the
production costs of advertising materials. In Fiscal Year 2010, cost of
space rental and service amounted to Baht 351.7 million.

Selling and administrative expenses

Selling and administrative expenses amounted to 16.8% and 16.9% of total
revenues of BTSC in the Fiscal Years 2009 and 2010, respectively. BTSC’s
selling and administrative expenses increased by 2.3% in the Fiscal Year
2010 when compared with the previous fiscal year as shown in the table
below.

+------------------------------+--------------+-----------+------------+
|                              | Consolidated |           | Company    |
|                              | Financial    |           | Only       |
|                              | Statement    |           | Financial  |
|                              |              |           | Statement  |
+==============================+==============+===========+============+
|                              | Fiscal Year  |           |            |
|                              | Ended 31     |           |            |
|                              | March        |           |            |
+------------------------------+--------------+-----------+------------+
|                              | (Audited)    | (Audited) | (Audited)  |
|                              |              |           |            |
|                              |              | (         |            |
|                              |              | Restated) |            |
+------------------------------+--------------+-----------+------------+
|                              | 2010         | 2009      | 2008       |
|                              | (Million     | (Million  | (Million   |
|                              | Baht)        | Baht)     | Baht)      |
+------------------------------+--------------+-----------+------------+
| Salary and employee benefits | 207.5        | 165.7     | 113.9      |
+------------------------------+--------------+-----------+------------+
| Directors remuneration       | 44.7         | 51.7      | 0.0        |
+------------------------------+--------------+-----------+------------+
| Advertising and promotional  | 84.2         | 71.5      | 94.6       |
| expense                      |              |           |            |
+------------------------------+--------------+-----------+------------+
| Utilities and security       | 39.3         | 31.4      | 55.0       |
| expense                      |              |           |            |
+------------------------------+--------------+-----------+------------+
| Maintenance expense          | 48.3         | 44.2      | 44.8       |
+------------------------------+--------------+-----------+------------+
| Depreciation                 | 59.4         | 53.6      | 42.8       |
+------------------------------+--------------+-----------+------------+
| Professional fees            | 134.2        | 181.6     | 108.6      |
+------------------------------+--------------+-----------+------------+
| Financial fees               | 19.2         | 1.3       | 0.0        |
+------------------------------+--------------+-----------+------------+
| Other expenses               | 193.8        | 210.7     | 64.3       |
+------------------------------+--------------+-----------+------------+
| Total selling and            | 830.7        | 811.8     | 524.1      |
| administrative expenses      |              |           |            |
+------------------------------+--------------+-----------+------------+

-   Salary and benefits for employees is the primary expense,
    representing 20.4% and 25.0% of total selling & administrative
    expense in the Fiscal Years 2009 and 2010, respectively. Such
    expense increased by 25.2% in Fiscal Year 2010 due to the increase
    in number of employees of both BSTC and its subsidiaries to support
    business expansions such as the operation of BRT, the acquisition of
    new concessions to manage advertising space in modern trade and the
    management of advertising space in office buildings. In addition,
    there is the annual salary increase.

-   Advertisement and promotional expenses consists of the costs of
    advertisements and promotions in various media. In Fiscal Year 2010,
    advertisements and sales promotion expenses increased from Fiscal
    Year 2009 due mainly to expenses related to public relations
    activities for the debenture issued in August 2009 and BTSC and
    VGI’s 10th year anniversary celebration. This item also includes
    approximately Baht 34 million from VGI, which comes mainly from
    normal sales promotion expense.

-   Utilities and security expense consists of utilities expenses and
    security expenses for stations and the BTSC headquarters. The
    increase in utilities and security expenses in 2010 was primarily
    attributable to the increase in electricity cost (Ft).

-   In Fiscal Year 2009, BTSC’s professional fees amounted to Baht 181.6
    million, consisting of consultant fees for normal business operation
    and other professional fees such as Signaling System, purchase of
    new trains, advisory fee for the rehabilitation plan and study of
    Initial Public Offering, etc. As for Fiscal Year 2010, professional
    fees amounted to Baht 134.2, consisting of consulting fees for
    normal business operation and other professional fees such as
    Signaling System, purchase of new trains, advisory fee for issuance
    of long term debenture, etc.

-   In Fiscal Year 2010, other expenses consist of expenses related to
    the operating of Silom Line Extension, rental expense, various taxes
    and other expenses related to normal business operation.

Finance cost

In Fiscal Year 2010, the finance cost decreased to Baht 515.1 million as
BTSC incurred interest expenses at the debenture rate, which is much
lower than the default rate realized during the rehabilitation plan.

Earnings from Operation before Interest, Taxes, Depreciation and
Amortization (EBITDA)

In the Fiscal Years 2009 and 2010, EBITDA was Baht 2,222.2 million and
2,580.7 million respectively, representing an increase of 16.1%, mainly
due to the opening of the Silom Line Extension which resulted in an
increase in ridership, increase in revenues from managing of advertising
and commercial space on BTS trains and stations and modern trade, and
income from train operation management of Silom Line Extension.

Net Profit

BTSC’s net profit in Fiscal Year 2010 was Baht 5,510.3 million, a
decrease of Baht 16,321.2 million, due mainly to the decrease in gain
from debt restructuring under the rehabilitation plan from Baht 22,447.1
million in Fiscal Year 2009 to Baht 4,528.0 million.

Tax loss carried forward

As of 31 March 2010, BTSC has a tax loss carried forward of Baht
12,964.9 million, which will completely expire in December 2012.

12.2.4 Analysis of BTSC’s and its Subsidiaries’ Financial Position as of
December 31, 2009

  12.2.4.1 Liquidity and sources of fund

As of 31 March 2010, BTSC had total current assets of Baht 6,904.9
million, with cash and cash equivalent of Baht 2,165.0 million or 31.4%
of total current assets. Furthermore, Baht 3,970.3 million of the
current assets is the investment that BTSC and its subsidiaries already
made to develop land plots. Such amount consisted of both investment in
land and the construction of a hotel and condominium. On the other hand,
total current liabilities amounted to Baht 2,321.9 million, including
the obligation to issue new shares to the previous VGI owner in the
amount equivalent to Baht 500 million in other current liabilities.

BTSC used capital from its long term debentures and shareholders’
equity. As of 31 March 2010, BTSC has outstanding debt of Baht 12,470.0
million and has shareholders’ equity of Baht 39,096.6 million.

  12.2.4.2 Assets

BTSC’s main asset is the project cost, with the value of Baht 43,443.0
million as of 31 March 2010.

  12.2.4.3 Liabilities

BTSC’s main liability is the Baht 12,000 million debentures issued in
August 2009. Details of the debentures are shown in the table below.

[]

The debenture covenant stateds that BTSC shall maintain the debt service
coverage ratio (DSCR) at not less than 1.2 times. As of 31 March 2010,
BTSC’s DSCR is 1.99 times.

As for BTSC’s subsidiaries, there is a total debt from non-related
parties of Baht 596.3 million, consistiing of loans from a financial
institution used for the purchase of a land plot and for the development
of the hotel near the Surasak SkyTrain station. However, such debts are
collaterized by the land of the respective projects and BTSC does not
provide any guarantees for these debts.

5.  Analysis of Cash-flow of BTSC and its subsidiaries for the Fiscal
    Years 2009 and 2010

    1.  Cash flow from operating activities

BTSC’s net cashflow from operation for Fiscal Years 2009 and 2010 was
Baht (384.2) million and Baht 457.8 million, respectively. Such
cash-flow increased in 2010 primarily due to higher profit from SkyTrain
and media business, less investment in properties, net with repayment of
account payables and increase in accounts receivable.

2.  Cash flow from investing activities

For Fiscal Year 2010, BTSC spent Baht 2,632.0 million on investment
activities, which consists mainly of the investment in VGI and BTS
Assets Co., Ltd. in the amount of Baht 1,338.8 million and the
investment in electrical and mechanical works of BTS SkyTrain System in
the amount of Baht 1,075.7 million.

3.  Cash flow from financing activities

For Fiscal Year 2010, BTSC issued debentures in the amount of Baht
12,000 million and used the proceeds to repay the remaining liabilities
under the rehabilitation plan of approximately Baht 10,016 million.
Furthermore, BTSC has paid a dividend of Baht 1,286.0 million.

6.  Commitments as of 31 March 2009

    1.  Capital commitments

+------------------------------------------+-------------+-------------+
| Details                                  | For fiscal  |             |
|                                          | year ended  |             |
|                                          |             |             |
|                                          | 31 March,   |             |
+==========================================+=============+=============+
|                                          | 2011        | 2012        |
|                                          | (Million    | (Million    |
|                                          | Baht)       | Baht)       |
+------------------------------------------+-------------+-------------+
|   Change and improvement of signaling    | 398.4       | -           |
|   system for train operation and the     |             |             |
|   related advisory fees                  |             |             |
+------------------------------------------+-------------+-------------+
|   Acquisition of 12 new trains           | 1,408.4     | -           |
+------------------------------------------+-------------+-------------+
|   Radio upgrade project for signaling    | 25.8        | -           |
|   system                                 |             |             |
+------------------------------------------+-------------+-------------+
|   Acquisition of automatic ticketing     | 11.6        | -           |
|   machine                                |             |             |
+------------------------------------------+-------------+-------------+
|   Acquisition of equipment for the       | 74.1        | -           |
|   operation of the electric train and    |             |             |
|   improvements of BTS stations           |             |             |
+------------------------------------------+-------------+-------------+
|   Turnkey construction contract          | 1,024.8     | 610.3       |
+------------------------------------------+-------------+-------------+
|   Development of common ticketing system | 44.6        | 52.3        |
+------------------------------------------+-------------+-------------+
|   Construction and designing of a real   | 60.8        | 5.9         |
|   estate project                         |             |             |
+------------------------------------------+-------------+-------------+
|   Building design                        | 48.1        | 9.5         |
+------------------------------------------+-------------+-------------+
|   Acquisition of 25 BRT buses            | 146.0       | -           |
+------------------------------------------+-------------+-------------+
|   Total                                  | 3,242.6     | 678.0       |
+------------------------------------------+-------------+-------------+

Note: - Exchange rate assumption: Baht 23.3283 / SGD, Baht 32.5268 /
USD, Baht 43.74 / EUR, Baht 4.7982 / Yuan

- Payment amounts in the table are payments according to Payment
Milestone, less advance payment

2.  Commitments under maintenance contract

On 30 December 2004, BTSC entered into a ten-year maintenance contract
executed after the termination of the previous contracts for spare parts
of an elevated mass transit system with the same contractor. Under the
contract, BTSC has capital commitments in respect of the cost of
maintenance and spare supply services fees in relation to the project
over a period of 10 years. The amount to be paid for the first year of
the contract was approximately Baht 195.7 million and EUR 1.7 million.
In future years the amount to be paid will be adjusted upwards with
reference to the consumer price index. During the year ended 31 March
2010, BTSC paid maintenance and spare supply service fees amounting to
Baht 235.6 million and EUR 1.9 million (2009: Baht 238.4 million and EUR
2.1 million).

3.  Guarantees

As at 31 March 2010, there were outstanding bank guarantees, of Baht
37.5 million (2009: Baht 37.5 million) to the BMA, of Baht 28.2 million
(2009: Baht 23.6 million) to the Metropolitan Electricity Authority in
respect of certain performance bonds as required under the concession
agreement, and of Baht 116.8 million and EUR 0.5 million as required in
BTSC’s operations issued by a bank on behalf of BTSC. In addition, BTSC
has Letter of Credit facilities of USD 36 million (2009: USD 49.1
million) from a local commercial bank as required for acquisition of
trains of BTSC and Baht 146.0 million as required for the acquisition of
buses for BRT project.

BTSC has pledged deposits at financial institutions amounting to Baht
338.5 million to secure these bank guarantees and credit facilities
(2009: Baht 338.5 million).

7.  Capital Expenditure Plan

For the additional investment needed to develop the various property
projects, BTSC has the policy that its subsidiaries shall seek the
required funding by themselves, independent of BTSC, either in the forms
of debt or capital from third parties. For example, on 12 May 2009, BTS
Assets Co., Ltd. entered into the credit facility agreement with a
financial institution for the total credit line of Baht 1,800 million,
the estimated investment cost to complete the construction of Four
Points by Sheraton hotel.

8.  Significant Accounting Policies

    1.  Fare Box Revenue Recognition

Farebox revenues are recognized when the services are rendered to
passengers, stated as ticket price less discounts. Prepaid value in
passengers’ stored value tickets is recorded as unearned fare box
revenue in the current liabilities.

2.  Project Costs and Unit of Throughput Amortization Method (Unit of
    Production)

Project costs represent the cost of the SkyTrain system, net of
amortization. All expenditures and other related expenses incurred in
connection with the BTS SkyTrain to operate (“Project Costs”) are
capitalized as assets and amortized over the term of the concession
according to the Concession Agreement. Such Project Costs include
management and consultant fees, design costs, civil works, electrical
and mechanical works and rolling stock purchased during the term of the
Concession Agreement, interest and other financing expenses, including
profits and losses incurred due to the exchange rate. The amortization
of Project Cost is recorded as a part of costs of fare box. Amortization
of Project Cost is calculated from net Project Cost by the following
unit of throughput amortization formula:

  -------------------------- --- -----------------------------------------
  Annual Amortization        =   Net Project Costs × Percentage of
                                 Passengers for the year

  Percentage of Passengers   =   Current year’s actual passengers
  for the year                   

                                 (Current year’s actual passengers +
                                 Projected passengers during the remaining
                                 concession period)

  Net Project Costs          =   Total Project Costs - Accumulated
                                 Amortization - Allowance for impairment
                                 of asset
  -------------------------- --- -----------------------------------------

3.  Property, plant and equipment/Depreciation

Land is stated at cost. Buildings and equipment are stated at cost less
any accumulated depreciation and accumulated impairment losses (if any).
Depreciation of buildings and equipment is calculated by reference to
its costs on the straight-line basis over their estimated useful lives.
Depreciation is included in determining income.

4.  Foreign Currencies

Transactions in foreign currencies are translated into Baht at the
exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated into Baht
at the exchange rate ruling at the balance sheet date. Gains and losses
on exchange are included in determining income.

5.  Earnings (loss) per share

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

6.  Accounting judgments and estimates

The preparation of financial statements in conformity with generally
accepted accounting principles at times requires management to make
subjective judgements and estimates regarding matters that are
inherently uncertain. These judgements and estimates affect reported
amounts and disclosures and actual results could differ.

9.  Auditor Fees

For the Fiscal Year 2010, BTSC and its subsidiaries paid audit fees to
Ernst & Young Office Limited (E&Y) in the approximate amount of Baht 6.7
million, which consisted of only the audit fee. BTSC and its
subsidiaries had no obligation to pay any non-audit related fees to the
auditors, auditing firm of such auditors and related person of the
auditor or the auditing firm of such auditors.