SET Announcements

Ref: CK-08-0000-AFS-L-0045 February 29, 2008 Subject: Declaration of the Operating Result of the Year Ended December 31,2007 Compared with the Year Ended December 31,2006 Attention: President The Stock Exchange of Thailand Dear Sir, The operating result of CH. Karnchang Public Company Limited, Subsidiaries and Jointly controlled entities for the year ended December 31, 2007 has the profit increasedto 101.2 % compared with the same fiscal year, due to the following factors. 1. In the year 2006, the Company has recorded allowance for doubtful accounts for account receivable-claims for additional costs of Joint Venture BBCD in financialstatements, which is approximately 2,515 million baht. 2. The Company has gained on sale of investments in associated company amount 631.5 million baht in the year 2007. Moreover, the Company has increased in interest income due to the increasing interest rate for long-term loans to other companies and loan to subcontractors. The Company would like to additionally report the effect from the change in accounting policy for investments in subsidiaries, jointly controlled entities and investments in associated companies as follows: The Company changed its accounting policy regarding investment in subsidiaries,jointly controlled entities and investment in associated companies in financial statements on separate financial statement, was changed from equity method report to cost method report in the 1/2007 quarter ended March 31, 2007 in order to comply with TAS 44. Thus, the Company restated its financial statement by using the historical cost as the cost of the investment in subsidiaries, jointly controlled entities and investment in associated companies of the separate financial statements. This adjustment caused the net income on the separate financial statement to differ from which reported in the consolidated financial statement. The Company had net profit of 14.5 million baht for the year ended December 31, 2007, according to the consolidated financial statement. However, the separate financial statement over the same period showed a net profit of 659.4 million baht. Furthermore, the Company would like to clarify the additional information as follows: 1. The effect from the restating of income statement on the separate financialstatement for the year ended December 31,2007 and 2006 , compared with the consolidated financial statement in the same period were shown net profit increased of 644.95 million baht(Baht 0.46 per share) and net lost decreased 148.03 million baht (Baht 0.13 per share)respectively. This is because the separate financial statement has excluded share of loss from investment, recorded by using equity method as same as the consolidated financial statement. 2. The effect from the restating to Balance Sheets on the separate financial statement for the year ended December 31, 2007, such as investment in subsidiaries and jointly controlled entities include investment in associated companies increased by 165.3 million baht resulting in decreasing of balance forward retained earnings by 171.5 million baht. The cumulative effect of the change in accounting policy has been presented under the heading of "Cumulative effect of the change in accounting policy for investments in subsidiaries, jointly controlled entities and associated companies" in the statement of changes in shareholders equity of separate financial statement. However, the change of accounting policy affects only investment in subsidiaries,jointly controlled entities and investment in associated companies in the separate financial statement. It did not have any effect on the consolidated financial statement or business fundamentals. Kindly please be informed accordingly. Sincerely yours, (Mr.Plew Trivisvavet) (Mr.Prasert arittanaporn) Directors