- TRANSALATION - Ref No. BTS 2164/2553 May 31, 2010 Subject : Clarification of the changes in profit for the year ended March 31, 2010 To : President The Stock Exchange of Thailand BTS Group Holdings Public Company Limited, formerly known as Tanayong Public Company Limited, ("the Company") would like to clarify the following additional information in respect of the Company's performance. For the year ended March 31, 2010, the Company made Baht 224.7 million net profit. The net profit increased by Baht 204.5 million when compared with the performance in the year ended March 31, 2009 where the Company had Baht 20.2 million net profit. The increase can be mainly explained by the explanations below. 1. The Company's profit from construction services increased by Baht 43.3 million. This was a result of the low-cost residential housing project in Chonburi (Najomtien) which generated profit of Baht 29.1 million and also as a result of Four Points by Sheraton Project which generated profit of Baht 14.2 million. 2. The Company's profit from management income services increased by Baht 24.0 million. That was the result of "The Abstracts Phahonyothin Park Project" in this current year. There was no such item in the previous fiscal year. 3. The Company received a loan repayment with interest from "Sale and purchase of claim agreement" of Bangkok Mass Transit System Public Company Limited's rights of claim in a debtor. Therefore, the Company recorded gain and interest income at Baht 59.0 million, under the caption of "Revenue from sale of rights of claim". There was no such item in the previous fiscal year. 4. In the current fiscal year, the Company hired an independent appraiser to appraise the fair market value of the assets. According to the latest appraisal report , the aggregate fair market value and the revaluation was as follows: - Real estate development costs were higher than the net book value which was appraised in 2007. The Company therefore reversed the provision for loss on diminution in value of projects of approximately Baht 45.6 million. - Land and Projects awaiting development, Land and Buildings and improvements, Golf Course development costs and also Condominiums and Fixtures for lease were higher than the net book value which was appraised in 2007. The Company therefore reversed the allowance for impairment of assets of approximately Baht 167.0 million in its accounts presented under the caption of "Reversal of allowance for impairment of assets" in the income statement. There was no such item in the previous fiscal year. 5. In the current fiscal year, the Company completed settlement of the debts to a creditor and recorded a gain on debt settlement of Baht 142.6 million. There was no such item in the previous fiscal year. 6. In the previous fiscal year, the Company adjusted creditors per the rehabilitation plan by Baht 195.1 million as a separate item under the heading of "Gain on cancellation of guarantees". There was no such item in this fiscal year. 7. The Company's administrative expenses increased by Baht 64.1 million mostly because of the expansion from new businesses and projects, including an increase in employees for the new operations and also because of funding expenses from the issue of warrants that caused the Company to incur legal advisors and financial advisors expenses of Baht 26.6 million. In addition, employees' remuneration increased by Baht 21.5 million and other expenses by Baht 16.0 million. 8. The Company incurred a loss on allowance for impairment of assets of Baht 14.4 million. Mostly this was a result of its postponement of the investment in the Kamala Beach Project. Please be informed accordingly. Yours sincerely, BTS Group Holdings Public Company Limited (formerly Tanayong Public Company Limited) -Mr. Sutham Siritipsakorn and Mr.Rangsin Kritalug- Directors (-Translation-) Ref. BTS 2165/2553 May 31, 2010 Subject: Letter for submission of the consolidated financial statements for the year ended March 31, 2010 of the Company's subsidiary, namely Bangkok Transit System Public Company Limited and its subsidiaries To: President The Stock Exchange of Thailand BTS Group Holdings Public Company Limited (the "Company") cordially submit the Letter for submission of the consolidated financial statements for the year ended March 31, 2010 of the Company's subsidiary, namely Bangkok Transit System Public Company Limited and its subsidiaries as attached. Please be informed accordingly. Yours sincerely, BTS Group Holdings Public Company Limited (formerly Tanayong Public Company Limited) - Mr. Suthum Siritipsakorn / Mr. Rangsin Kritalug- Directors (Translation Only) Ref. no. BTSC.GAR.35623.B0100.31.05.2010 May 31st, 2010 Analysis of operating results for the years ended 31st March 2010 Subject To Directors and Managers Stock Exchange of Thailand Bangkok Mass Transit System Public Company limited (the Company) would like to clarify the Company's analysis of operating results for the years ended 31st March 2010 that loss before gain on debt restructuring under the rehabilitation plan, (615.5) Million Baht, in March 31st 2009 improved to gain on debt restructuring under the rehabilitation plan, 982.2 Million Baht, in March 31st, 2010, which was 1,597.7 Million Baht. higher. The analysis of operating results was as follows: Analysis of BTS operating results for the years ended 31st March 2010 1. Total BTS revenues BTS core revenue is from fare box. For the period 12 months ending 31st March 2010 and 2009, BTS net fare box revenues were 3,484.7 million Baht, and 3,288.1 million Baht, being 70.9% and 68.0% of total revenues, respectively. In addition, other BTS revenues mainly came from advertising and merchandising space rental on BTS stations, operating services of Silom extensions, interest income, and other incomes such as fees related to BTS station connections. Consolidated Financial Statement For the years ended March 31 2009 2010 (Million Baht) (Million Baht) (Audited) Net fare box revenues 3,288.1 3,484.6 Revenues form extension operating - 195.0 services Revenues from administrative fees and 45.4 106.0 advertisement sharing Revenues from advertising and 901.8 994.2 merchandising space rental services Revenues from utility services 1.9 2.3 Interest income 139.3 29.5 Others 459.4 102.2 Total revenues 4,835.9 4,913.8 Fare box revenues For 12 months period ending 31st March 2010, net fare box revenues rose by 6%, compared with the same period of previous year, from 3,288.1 Million Baht to 3,484.6 Million Baht. This was due to the opening of Silom extensions on 15th May 2009 bringing about the increase in ridership, counting only passengers entering in BTS system, by 7%, compared with the previous fiscal year. However, the average fare per trip slightly decreased 0.08% from Baht 24.23 to Baht 24.22. Other revenues - BTS has started operating services on 2.2 kilometers of Silom extensions since 15th May 2009, so BTS has received 195 Million Baht, 4% of the total revenues, as the service fees of the mentioned period. In addition, 43.7 Million Baht which was revenues from extension operating services including revenues from preparation before commencing extension operating services were received. - Services Revenues came from VGI Global Media Co., Ltd. and its subsidiaries consist of administrative fees and advertisement sharing amounting to 106 Million Baht. - Revenues from advertising and merchandising space rental services are revenues from merchandising space rental and advertisements on BTS stations as well as in retail shops. As shown on consolidated financial statements, revenues from advertising and merchandising space rental services on BTS stations were 994.2 Million Baht which had to be shared with VGI Group, according to the concession contract for managing advertisement spaces on trains and at stations. 2. Expenses of BTS Cots of fare box, and selling and administrative expenses were the main expenses of BTS. The former was 66.9% and 63.4% of total expenses before interest while the latter was 24.3% and 23.4% of total expenses before financing cost for the years ended 31st March 2010 and 31st March 2009, respectively. Consolidated Financial Statement For the years ended March 31 2009 2010 ( Million Baht ) ( Million Baht ) (Audited) Cost of fare box 2,108.2 2,127.7 Cost of advertising and merchandising 102.7 251.5 space rental services Cost of administration and 69.7 100.3 advertisement Selling and administrative expenses 811.8 830.7 Loss on exchange 60.4 46.9 Total expenses 3,152.8 3,357.1 Finance cost 2,265.7 515.1 Cost of fare box - The main expenses of fare box cost were amortization of project costs, salary of operation staff, operation maintenance and utility expenses. - The above expenses rose by 0.9% for the years ended 31st March 2010 due to the increase in amortization of project costs related to the patronage increase. - Employees' salaries rose by 17% from 1,371 person in 2009 fiscal year to 1,521 person in 2010 year to supporting the operation for Silom extensions and annual salary increase. - Because of the complete of overhaul, maintenance expenses decreased by 21.5% from 607.5 Million Baht to 476.6 Million Baht for the fiscal year of 2009 and 2010, respectively. Cost of advertising and merchandising space rental services - The cost of advertising and merchandising space rental increased from 102.7 Million Baht to 251.5 Million Baht resulting from the rise in concession fees. The cost of concession fee which was in the form of revenue sharing varied according to an increase in sales. Cost of administration and advertisement - The cost of administration and advertisement increased from 69.7 Million Baht to 100.3 Million Baht as a result of operating expenses of advertising space rental business in retail shops and office building. The mentioned expenses comprised concession fees of advertising space rental business in retail shops and office buildings, media expenses, and depreciation etc. Selling and administrative expenses The selling and administrative expenses increased by 2.3% from 811.8 Million Baht to 830.7 Million Baht for the fiscal year of 2009 and 2010, respectively. The main expenses of the selling and administrative expenses were salary and employee benefits, advertisement and promotional plan expenses, utility and security expenses, depreciation and amortization, and advisory fees. - Advertisement and promotional plan expenses increased from 71.5 Million Baht to 79.7 Million Baht mainly due to both publicizing the launch of BTS debentures and celebrating 10th anniversary of BTS. Another reason was the expense recognition of VGI Group's advertisement and promotion plan expenses after acquisition in all ordinary shares of VGI Group on 30th September 2009. - For the fiscal year of 2009 and 2010, utility expenses and security expenses (for securing stations and BTS building) were rising according to minimum wages increase, increase in the number of staff causing from patronage increase, and increase in the number of security guards after the bombing in late 2006. For the years ended 31st March 2010, in addition, both expenses rose due to the Fuel Tariff (FT) rate charge rising, and additional expenses of 2.2-kilometer-Silom extensions. - Advisory fees decreased for the fiscal year of 2009 because there was no main advisory fee of rehabilitation plan. Finance cost BTS finance cost fell to Baht 515.1 million for the years ended 31st March 2010 since debenture interest rate, which is significantly lower than default interest rate, has been applied for BTS' loan interest. Please be informed accordingly. Yours sincerely, Bangkok Mass Transit System Public Company Limited (Keeree Kanjanapas and Suraponh Laoha-Unya) Directors