Page 1


Contents

Operational Highlights of Fiscal Year 2001/02

002

Financial Highlights

003

Chairman’s Statement

005

Message from the Management

006

Review of 2001/02 Operations

007

Nature of Business Operations

023

Airlines Business Situation and Competition

023

Risk Factors

024

Structure of Shareholders and Management

024

Corporate Governance

027

Related-Parties Transactions

028

Discussion and Analysis of Operating Results

030

and Financial Position Ten-Year Review

034

Audit Committee’s Report

037

Auditor’s Report and Financial Statements

039

Board of Directors

064

Detail of Shareholders and Board of Directors

066

General Information

067

Management Team

068

Thai On-line Offices

Thai Airways International Public Company Limited 89 Vibhavadi Rangsit Road, Bangkok 10900, Thailand Telephone : 66 (0) 2513-0121 Facsimile : 66 (0) 2513-0203

www.thaiairways.com

Thai Airways International Public Company Limited

TG 001


Operational Highlights of Fiscal Year 2001/02

>

Having registered a profit for the 38th consecutive year with the highest net profit ever

>

Having introduced 4 new destinations: Mumbai, Chengdu, Busan and Kuwait

>

Having been voted the Best Inter-Continental Airline for the second consecutive year according to a survey by a research institute in Denmark

>

Having been ranked the Most Favorite Airline as per a survey on travellers’ opinions in the Holiday Asia Website with over 150,000 visits a month on its website

>

Having been ranked in the top three Best Airlines in Asia-Pacific Region according to a survey by Business Traveller Asia-Pacific Magazine among its readers

>

Having been awarded the Best Overall Business Traveller’s Cellars in the Sky Award according to a survey by Business Traveller Asia-Pacific Magazine

>

Having won PATA Gold Award for the Best Advertisement for the third consecutive year. Japan-based Thai International Office’s ad, entitled “Have you ever seen world heritage” won the best award from Japanese Advertisement Magazine Association in the category of transportation and services

>

Having won three Best Awards for its Royal Orchid Plus Mileage Program for the fifth consecutive year from the 14th Freddie Award Contest

>

Having won the Airbus Industries Award for the utilization of Airbus 330 fleet in the Asian Region route for its income-generating flights with the highest flying hours in Year 2001, compared to other airlines worldwide using the same model of aircraft. The Award was granted to Thai International for being the most punctual airline.

>

Having introduced on-line self-service ticketing, a part of the Royal e-Service, that automatically issue a domestic boarding pass after self check in at Bangkok, Chiang Rai, Chiang Mai, Phuket, Haad Yai, Khon Kaen and Phitsanulok airports

TG 002

Annual Report 2001/02


Financial Highlights

Consolidated Units : Million Baht

2000/01

1999/00

178,410

178,262

167,727

Shareholders’ Equity

28,354

18,011

9,602

Share Capital

14,000

14,000

14,000

129,015

129,172

112,630

Profit from Sales and Services

18,688

12,227

14,932

Profit Before Income Tax

14,416

1,229

4,915

Net Profit

10,182

1,929

4,717

Par Value

10

10

10

Net Profit

7.27

1.38

3.37

127.44

127.33

119.81

20.25

12.87

6.86

Net Profit Per Revenue from Sales and Services (%)

7.9

1.5

4.2

Debt-Equity Ratio (Times)

5.3

8.9

16.5

Return on Average Total Asset (%)

5.7

1.1

3.0

43.9

14.0

65.4

Total Assets

Revenue from Sales and Services

2001/02

Amount per Share (Baht)

Total Assets Shareholders’ Equity Financial Ratios

Return on Average Equity (%)

Note : The 2000/01 financial statements were restated with the accounting policy changed in fiscal year 2001/02.

Thai Airways International Public Company Limited

TG 003


Chairman’s Statement

D

uring the last decade, a lot of major events have occurred that have had a tremendous affect on Thai Airways International Public Company Limited. They include the emergence of airline alliances, the Information Technology System Development to cope with Year 2000, the economic crisis in Thailand, East Asia and Southeast Asia, the tougher competition in the airline business to maintain and expand customer bases, and the government policy on privatization of state enterprises in which THAI has been selected as the pioneer enterprise resulting in the reorganization of its top management as well as Board of Directors. Considering its financial performance during the past few years and in Fiscal Year 2001/02, the results have obviously reflected the fact that Thai Airways International has developed its potential impressively by turning crises and threats into business opportunities. Based on the optimum satisfaction, safety and conveniences of its valuable customers, Vision and Mission have been designed in long-term strategic plan to serve as a business operation frame for all units. The full-scale reorganization of Thai Airways International into 5 business units is aimed at enhancing efficiency and flexibility in management and operations. Each unit must understand and analyze competition in the market, and clearly map out respective direction with tangible goals and business plans. Concurrently, the company has continuously further developed its service quality by means of international standard quality control systems and has introduced innovative services via internet and made preparation to offer 23% more of its shares to the public in line with the privatization policy of state enterprises. Significantly, Thai Airways International has successfully maintained its reputation for service excellence in many aspects as it was voted the best airline in the Asia-Pacific Region, the best inter-continental airline for the second consecutive year and the favorite airline in passenger surveys by several International travel magazines. Those successes clearly reflect Thai Airways International’s high level of dynamism, the strength of individual business teams and its readiness to respond to innovative policies from top management, the Board of Directors and shareholders and to adapt the entire organization to keep abreast of on-going changing competition. I strongly believe that these events, as well as the dramatic changes in the company’s top management and Board of Directors during last year, do not present any difficulties for such a highly successful firm as Thai Airways International. On the contrary, they become excellent opportunities for the teams to apply the constructive guidelines of the top management and Board of Directors, albeit the good governance, the optimum management of foreign exchange, the effective budget and expenditure management and so forth. Furthermore, the situation has encouraged the company to develop customer-focused guidelines in their operations and services to achieve its goal of becoming the world’s leading airline. I wholeheartedly thank the management of all levels, company-wide staff, shareholder, airline alliances and business partners for their cooperation and continued support for the company’s success. Hopefully, we will continue to receive such cooperation and support to achieve our goals of the customers’ optimum satisfaction, safety and convenience.

Thanong Bidaya Chairman November 5, 2002

Thai Airways International Public Company Limited

TG 005


Message from the Management

D

espite the highly competitive situation in the airline business, under the policy of effective budget and expenditure control and its recent comprehensive reorganization, and with full participation of all staff, Thai Airways International registered many favorable business performance results reflecting its potential, competitiveness and reputation for service excellence with unique Thai style and hospitality. According to a survey of passengers and foreign travelers, conducted by a Danish Research Institute, Thai Airways International was rated the best inter-continental airline for the second consecutive year and voted the favorite airline in a survey by Holiday Asia Website. Additionally, it was ranked one of the three best airlines in the Asia-Pacific Region in a survey conducted by the Business Traveler Asia-Pacific Magazine. These results come from the cooperation with both domestic and international airline alliances, the flight planning system (to analyze and calculate flight schedules and fuel consumption of each flight to maximize the utilization of the existing fleet) the standardized maintenance of aircraft to be in excellent condition and the introduction of new flights and destinations as well as expanded international routes. Successfully increasing flight frequencies to many high traffic destinations, Thai Airways International re-assessed the aircraft models in service on each route to match capacity with demand. The award given by Airbus Industries to Thai Airways International in recognition of the utilization of its Airbus Model 330 in Asia for the highest income-generating flying hours with 99.3% punctuality is a concrete proven record in comprison with commmercial airlines worldwide. The company has comprehensively developed various systems such as air cargo and postal service, self-service ticketing and check-in, advanced passenger processing, a centralized intelligent fare system. IT systems and infrastructure to support customer services, internal management, investment management, operations and HRD management. It also emphasizes security measures for IT systems and contingency plans. Despite the acclaimed successes, Thai Airways International is determined to go further to become Asia’s leader in the airline business under its five year Strategic Direction Towards Asian Leadership with three major objectives. Firstly, it is to maintain and further develop its accomplishments in all business aspects. Secondly, the emphasis is put on its role to create a positive image of the country in the area of service and to satisfy its passengers and customers. Last but not least, it is to promote tourism for the country in cooperation with other relevant agencies. The company is set to increase its income from 129,000 million Baht in 2002 to 200,000 million Baht in the next five years. To achieve the above objectives and goals, all business units have mapped out aggressive plans to increase the company’s overall income. Concrete examples are the launch of new routes and destinations in growing markets, an extension of existing routes, the flight planning system for fleet optimization and cost-reduction, in-flight service improvements, a project to invest 2,688 million baht in a new aircraft service / maintenance project and a project to build a new warehouse at Suvarnbhumi Airport. An expansion of customer base for aircraft maintenance services, Puff & Pie Bakery Franchise project and the IT system development to provide excellent service and convenience to customers are also among the list. An essential plan is to develop personnel to acquire more expertise in their respective areas, to enhance their effectiveness and efficiency and become more culturally aware in order to effectively provide service satisfying customers from different cultures and to streamline the organization and the internal management to be able to quickly respond to competition and the ongoing changes in markets and world situations. I am proud to be a member of Thai Airways International and strongly believe in THAI’s potential to further develop the organization. I am prepared to utilize all of my knowledge, capability and experience to help Thai Airways International Public Company Limited to achieve its goal of Asian Leadership, becoming one of the world’s leading airlines.

Kanok Abhiradee President November 5, 2002

TG 006

Annual Report 2001/02


Review of 2001/02 Operations

Operating Fleet During the last fiscal year, the fleet remained at 81 as the delivery of the latest two Boeing 747-400 took place before the beginning of the fiscal year. The Company tremendously improved the utilization of the existing fleet to accommodate a growing traffic volume on some routes and increased its flight revenue. For example, Boeing 747-400s replaced the entire fleet of Boeing 777-300s on the Bangkok-Sydney-Auckland route, with its increasing traffic, and the Boeing 737-400 fleet was replaced with Airbus 300-600 on the afternoon flight Bangkok-Kuala Lumpur to increase capacity. Four more flights from Bangkok to Shanghai were added and the carriers’ Airbus 300-600s were changed to a higher passenger capacity fleet of Airbus 330-300s. As a result, 2 flights a day to Shanghai are available for a higher number of passengers.

Amount Aircraft Type

2001/02

2000/01

Boeing 747-400

16

16

The Company tremendously

Boeing 747-300

2

2

improved the utilization

MD 11

4

4

Boeing 777-300

6

6

Boeing 777-200

8

8

Airbus 330-300

12

12

Airbus 300-600

21

21

routes and increased

Boeing 737-400

10

10

its flight revenue

ATR 72

2

2

Total

81

81

Thai Airways International Public Company Limited

of the existing fleet to accommodate a growing traffic volume on some

TG 007


Route and Destination Development During Fiscal Year 2001/02, Thai Airways International extensively

During Fiscal Year 2001/02,

expanded its inter-continental routes with an increase of 49 flights per

Thai Airways International

week and 4 new destinations to Busan in the Republic of Korea, Chengdu

extensively expanded its

in the People’s Republic of China, Mumbi in India and Kuwait. Hence, the Company’s flight network became effectively competitive. Moreover,

inter-continental routes with an

Thai Airways International will inaugurate its flight expansion to five new

increase of 49 flights per week

cities within 2002: Geneva in Switzerland, Bahrain and Abu Dhabi in the

and 4 new destinations to Busan in the Republic of Korea, Chengdu in the People’s Republic of China, Mumbi in India and Kuwait

United Arab Emirates, Chittagong in Bangladesh and Xiamen in the People’s Republic of China.

Inter-Continental Routes

North Pacific Route The Company maintains its daily flight to Los Angles, four flights via Tokyo a week and the other three flights via Osaka each week. Thai Airways International joined hands with the Star Alliance under the joint flight codes to expand its network in the United States to nine destinations in the United States. THAI code shared with United Airlines on the routes from Los Angles to Denver, Washington, New York, Chicago, Seattle and San Francisco, on the route from Taipei to New York and Chicago, from Tokyo to Chicago and Los Angles and on the route from London to New York and Chicago. Cooperating with Air Canada, THAI expanded its flight service network to two destinations: from London to Montreal, with All Nippon Airways on the routes from Tokyo to Washington and New York and with Lufthansa Airlines on the routes from Frankfurt to Atlanta, Dallas, Washington, New York, Miami and Chicago. As such, the Company has a flight network to the United States via two routes, from both Asia and Europe, covering destinations along both coasts and across the continent. By the end of last fiscal year occured the disastrous event on September 11, by far THAI was hit by the incident with limited consequence according to North Pacific traffic representing only 7 percent of total. However, THAI reduced one weekly flight in November and then three weekly flight via Osaka in January 2002 before returned to normal service in summer schedule 2002.

European Route To keep abreast with the growth of this route, the Company increased three daytime flights to Paris a week and one direct flight from Bangkok to Rome per week. The total flights to Europe rose to 60 flights per week with a daily flight to Rome. Furthermore, the Company replaced MD-11s with Boeing 747-400s to increase passenger capacity of each flight on Bangkok-Munich route but reduced the frequency from five to four flights per week. The Company has continued operating existing flights to 10 cities in nine countries. To further expand its network, it cooperated with Star Alliances members, Lufthansa and SAS Airlines, to 18 more cities, seven cities in Germany and another 8

TG 008

Annual Report 2001/02


cities, Amsterdam, Barcelona, Brussels, Budapest, Geneva, Lisbon, Prague, Warsaw, and another three cities in Scandinavian countries, Helsinki, Oslo and Gothenburg.

Australia and New Zealand Route Thai Airways International introduced three more flights a week for the Bangkok-Brisbane-Auckland route to accommodate increasing traffic to Auckland and reduced flight frequency to Melbourne from 12 flights to 11 flights a week. Flight frequency to Australia and New Zealand grew from 24 to 26 flights a week, and to provide a better service, Boeing 747-400s replaced the Boeing 777-300s on Bangkok-Sydney-Auckland route. In addition MD-11, with First Class cabin has been put into service, on all other routes.

The flight network in the Asian Region has been

Regional Route

comprehensively developed

The flight network in the Asian Region has been comprehensively

with increased frequency of

developed with increased frequency of 31 flights per week to existing

31 flights per week to

destinations and the introduction of four new routes with a weekly frequency of 11 flights. For example, in a significant growth market in the People’s

existing destinations and

Republic of China, the Airline scheduled seven more flights per week to

the introduction of

existing destinations and three flights per week to new destinations to

four new routes

cope with expanding traffic. With a rapid response to the competitive market conditions and continually changing demands, Thai Airways International successfully strengthened its flight network, with a total of 361 regional flights a week to 38 cities in 21 countries.

East Asian Route The Company added three more flights to Tokyo and Osaka per week, four flights to Shanghai and three flights a week to Guangzhou, hence, THAI operated two daily flights to Shanghai and daily service to Guangzhou. Airbus 300-600 were replaced with Airbus 330-300 to accommodate more passengers. Three flights from Bangkok to Chengdu and two flights from Bangkok to Busan in Korea, the new destinations, both with Airbus 300-600s were introduced.

Southeast Asian Route Flights to Jakarta were increased by two more flights for a total of five flights a week and to Denpasar from seven to 12 flights a week during the peak season in Summer. Additional three and four flights a week to Hanoi and Ho Chi Minh City respectively were in service, hence, Thai Airways International operates a daily flight to Hanoi and two flights to Ho Chi Minh City a day.

South Asian Route The Company introduced three flights per week to Mumbi, a new destination in India, with Airbus 330-300s. Its service network in India rose to three cities and 13 flights per week.

Thai Airways International Public Company Limited

TG 009


Middle East Route With the addition of four more flights per week to Dubai, Thai Airways International operates a daily flight to Dubai. Extending its three flights a week on the Bangkok-Dubai route, the Company introduced a new destination, Kuwait with Airbus 330-300s.

Domestic Route In response to the aviation liberalization policy, the Company cooperated with domestic airlines such as PB Air and Air Andaman to operate services to nine destinations, Phetchabun, Phrae, Nan, Mae Sot, Lampang, Nakhon Ratchasima, Sakon Nakhon, Nakhon Phanom and Chiang Mai-Chiang Rai. However, Thai Airways International maintains its flight services to some of these destinations, i.e., flights to Sakon Nakhon and Nakhon Phanom twice a week, and operates flight services on other routes. The Company also added seven more flights a week each to Khon Kaen, Ubon Ratchathani and Krabi. As a result, there are 377 flights per week from Bangkok to 17 domestic destinations.

To enhance better services and increase customers’ satisfaction, Thai Airways International has developed the Royal e-Services.

Information Technology With carefully applied information technology to create new value-added services, the Company has received trust from a greater number of passengers to use its services. In this fiscal year, strategies have been

They are, for example,

mapped out to further develop the information technology and an adequate

the Self-Service Ticketing &

infrastructure to handle customer services, organization management,

Check-in, an alternative

investment management, operations and human resources development.

one stop service

Importance has been placed on the information technology security procedures with a contingency plan to ensure that customers will receive quality services, safety and convenience at all service points and to keep pace with continual growth. To enhance better services and increase customers’ satisfaction, Thai Airways International has developed the Royal e-Services. They are, for example, the Self-Service Ticketing & Check-in, an alternative one stop service point enabling passengers of domestic flights to have their ticket issued then check in by themselves via an automatic air ticketing and check-in Kiosk, which is especially useful during rush hours or festivals. Other services are the Advanced Passenger Processing to facilitate passengers to Australia for faster Australian immigration processing, and such operation-supporting information technology as the Centralized Intelligent Fare which enhances the complete information of special airfares for the reservation and air ticketing systems. This will enable ticketing at the Company’s sales office and agents’ to be faster and more accurate.

TG 010

Annual Report 2001/02


Furthermore, the Flight Planning System has been developed to analyze, prepare flight schedules and precisely calculate the amount of fuel required for each flight, and so forth. THAI has also introduced new services via the internet, i.e., the prompt display of accumulated Royal Orchid Plus Mileage, incentives and a lot-drawing in the Royal Orchid Plus Program and reservation of the Royal Orchid Holidays on website www.thaiairways.com. In the near future, the Company will provide information via the internet on the Puff & Pie Bakery services, namely outside catering and food gift sets, which customers can order at once via internet. Other e-Services in response to the e-Government policy have been provided, including provision of general information and procurement informations of Thai Airways International (www.thaiairways.info); procurement and EMOTC Circular System for receiving information from the Ministry of Transport and Communations. The Company has continually enhanced its infrastructure to cope with new projects of the Star Alliance on e-business and transactions by means of an architecture of its information technology to enable the IT system to link and communicate with the Alliance members safely and effectively. The IT Security Measures Policy has been implemented as operating guidelines for users and computer system care-takers and to prevent incorrect computer system use. The Company has adapted an advanced IT project management practice to standardize its IT system development to meet current business situations.

During fiscal year 2001/02, the Catering Department

Catering Department During fiscal year 2001/02, the Catering Department catered an average of 68,500 meals per day or approximate 26 million meals per year. The success was realized due to business visions of various management

catered an average of 68,500 meals per day or approximate 25 million meals per year.

teams, trust and confidence from customers and determination and teamwork at all levels to provide excellent services in order to achieve the department’s objectives. The Income of the Catering Department derived from the following services. Preparation of 42,000 meals/day on an average for passengers of Thai Airways International and over 40 customer airlines. Restaurants and Snack Bars preparation of 26,500 meals/day on an average at Bangkok Airport, Chiang Mai, Phuket, and Chiang Rai airports providing food and beverage services to passengers and general public, in-house and outside catering services and Puff & Pie Bakery with 27 branches, 22 branches in Bangkok, three and two in Chiang Mai and Phuket respectively.

Thai Airways International Public Company Limited

TG 011


The Catering Department has planned to increase its income in the future, i.e., “Euarng Luang” Drinking Water Project for sale to the public

At present, the Company has

which is already endorsed and registered with the Food and Drug Office,

a total of 6 aircraft repair and

the Puff & Pie Franchise Project to take place in 2003 and the Restaurant

maintenance facilities: five at

outside Airport Area Project, etc.

the Bangkok International

To provide quality food/meals to satisfy customers, the Catering Department emphasizes on standards and hygiene and has implemented

Airport and one at the Second maintenance Center in U-Tapao

GMP, HACCP and ISO 9002 to continuously improve its operations. Food and raw material procurement development plan has focused on Good Agricultural Practice to acquire nutritious vegetables and fruits free of harmful contaminants. Implementation of the Good Procurement Governance in the fiscal year 2002/03 resulted in a cost reduction. The Department initiated cooking training programs for the Company’s staff and general public to generate additional income and prepare for their policy to set up a Cooking and Services Training Center in the future.

Technical Department At present, the Company has a total of 6 aircraft repair and maintenance facilities: five at the Bangkok International Airport and one at the Second maintenance Center in U-Tapao. The Technical Department can handle major and minor repair of the Company’s aircraft and those of other airlines’. The Department has been certified by the US Federal Aviation Administration (FAA) and by the Joint Aviation Authority (JAA), in addition to the ISO 9002 certification by Bureau Veritus Quality International (BVQI). To constantly maintain and further enhance their service quality, they are going to implement quality management under ISO 9001: 2000 and expect to complete the program and to be certified in September 2003. Regarding aircraft maintenance, the Department gives priority to safety and environment conservation. They have been awarded ISO 14001 certification on their environment management standard since 2001. During the fiscal year 2001/02 to 2004/05, the Technical Department has a 550 million Baht IT System development plan to replace the existing system which has been in use for 18 years. The new system will enhance efficiency, reduce repair/maintenance time, support the new administration and management system as a business unit as well as e-Business. Moreover, the system will also handle operations at Suwannaphumi International Airport. The Department was one of the six leading organization in Thailand receiving the Centre of Excellence Certification from the Institute of the National Productivity Increment on 30 January 2002 for their Six Sigma Program implementation. The program was to develop effective and efficient work procedures with major objectives

TG 012

Annual Report 2001/02


to reduce costs of at least 1 billion Baht in 2004 and increase their unit’s efficiency before having their facilities moved to Suwannaphumi International Airport in 2005. The project to construct new aircraft repair and maintenance facilities on 145 Rai with the total investment of 2,688 million Baht comprises of buildings that can simultaneously house three large body aircraft such as Boeing 747 and can accommodate aircraft with over 500 passenger capacity in the future. Parallel to the new facilities construction plan, the Technical Department has mapped out a 5 year marketing plan. To increase its capacity to provide services of major repair and maintenance to customer airlines in Asia and Europe, the Department may joint venture with alliance airlines in a project to convert three existing hangars at Bongkok International Airport into heavy maintenance hangars and workshops. This will bring in more foreign currency to the country. The Department signed a 5 year contract with Japanese Air System to render major repair and maintenance for Airbus 300 aircraft. The contract is estimated to generate in approximately 400 million Baht per year. In addition, the Technical Department mapped out a marketing plan for 2003 to expand its Japanese market to offer major repair/maintenance services for JAS’ Boeing 777 fleet. The Company won the Airbus Industries Award for the utilization of its Airbus 330 fleet on the Asian Region route for its income-generating flights with the highest revenue flying hours in 2001, (34,174 flying hours) compared to other airlines worldwide using the same model of aircraft. The Award was also granted to Thai Airways International for its highest

The Customer Services Department has emphasized further development of their services standard and continually enhanced service quality with Thai style uniqueness

punctuality, compared to 98.7% average statistics of worldwide commercial airlines using the same model. The Technical Department on behalf of Thai Airways International received the award in Montreal, Canada on May 2002. The capacity to bring in such an income from the highest number of flying hours is a result of the Department’s excellent repair and maintenance standard.

Ground Services The Customer Services Department has emphasized further development of their services standard and continually enhanced service quality with Thai style uniqueness. Their performances during the last year included a fast track provision plan at out-bound immigration for First Class and Business Class passengers and a Self Service System at domestic terminals for passengers without any checked luggage to check-in by themselves. To match the growing number of passengers of Thai Airways International and customer airlines, the Department also increased VIP lounges

Thai Airways International Public Company Limited

TG 013


at Pier 5 and First Class Airside Lounge for passengers’ convenience while waiting to board. Construction of VIP lounges at Hat Yai and Phuket airports

The Ground Support

was carried out for passengers’ overall satisfaction. The Passenger Contact

Equipment Services is a

Area in the out-bound lounge where passengers may contact, have enquiries

crucial business unit as it supports the operations

and receive complete services, was established. Other continuous service standard and quality enhancement plans were Return Flight Check-in for passengers travelling and returning within

of the company and customer airlines to Thailand

24 hours, Gate Check-in Services to reduce traffic at check-in counters, Telephone Check-in and Concierge Reception Counter in arrival hall for First Class passengers. Information technology was utilized to develop modern and effective service systems with a common language for check-in systems to facilitate their operations and linked with customer airlines. The Load Control Center was set up to prepare loadsheets from the center to disseminate information to THAI aircraft countrywide. An improvement was made to the Limousine Service for First Class passengers to pick them up from home and send them home. To enable their staff to operate effectively both locally and overseas, the Department has conducted constant training for their staff on service, general operations and various security measures such as the Touch of Thai, Manager in a Service Organization, Negotiation Skills, Business Look and Aviation Safety.

Ground Support Equipment Services The Ground Support Equipment Services Department is a crucial business unit as it supports the operations of the company and customer airlines operating their flights into Thailand. Among 3,301 staff members, 2,676 are permanent staff and 625 are temporary help. The Department has 822 mobile vehicles, 1,400 carts & dollies and 6,371 units of Unit Load Device (ULD). The Department provides the following services: 1. Equipment for aircraft after landing, i.e., Ground Power Unit, Air-conditioning Unit, Water Service Unit, Toilet Truck for sewage unloading, Air Starter Unit and Aircraft Towing Tractor. Besides, the aircraft interior cleaning services is also provided during such. 2. Transportation services for passengers to and from aircraft by passenger step and passenger bus when the aircraft park at remote bay as well as hi-lift truck for disabled or sick passengers. 3. Loading and offloading services for baggage, cargo and mail which are transported between aircraft and passenger terminals and cargo warehouses. ULD storage and control is also included. 4. Facilities for major and minor repair and maintenance services for ground support equipment. Services standard and quality have been

TG 014

Annual Report 2001/02


maintained by controlling and keeping sufficient stocks of spare parts for the tasks and monitoring and following up the services regularly. Regular service and appropriate rotation of all equipment has been scheduled for efficient utilization and safety while servicing aircraft.

Services Capacities The Ground Support Equipment Services Department earned an income from services for 42,256 flights of Thai Airways International per year or 44% of the total income and from 30,451 flights of international airlines per year or 56% of the total income. Considering the total market value of other airlines’ flights at Bangkok International Airport, the Department maintained the biggest market share around 60%

Services Potential Development The Department has been entrusted by 48 customer airlines to provide them with ground support equipment services. This is because during the last 42 years of operations, the Department has sustained their service quality at a high level and continuously developed their team efficiency through systematic staff training to respond to the needs of Thai Airways International and customer airlines and the use of advanced technology. In addition, regular operating reviews have been carried out to enhance their service competency and they were certified by RWTUV on ISO 9002 in accordance with their policy of striving for service excellence in ground support equipment services with quality, safety and punctuality for customers’ highest satisfaction. The Secure Clean is part of their aircraft interior cleaning service with an emphasis on the security of passengers’ belongings, life and aircraft in accordance with Aviation Security 1982 and procedures regulated by the British Department of Transportation. Apart from inspecting for safety and suspected/illegal objects, the Department is responsible for quickly returning property left in the aircraft to passengers. Outstanding performance awards in 2002: 1. Provincial Outstanding Enterprise Award by the Ministry of Labor and Social Welfare for safety, hygiene and working environment 2. Good Practice Award on safety, hygiene and working environment related to dust management during the 16th National Safety in Workplace Week

The Ground Support Equipment Services have been entrusted by 48 customer airlines to provide them

Continuous Operating Plan for the Future 1. The Board of Directors approved 595 million baht budget to

ground support equipment services

procure additional equipment to replace old equipment so as to enhance service competitiveness in ground support equipment services.

Thai Airways International Public Company Limited

TG 015


2. The Department mapped out an investment plan on ground support equipment services at the Suwannaphumi International Airport to boost confidence of related parties in the services provided to all flights of Thai Airways International, the Star Alliance members and customer airlines at the Suwannabhumi International Airport. The plan is also aimed at providing convenience for customers’ satisfaction in full-scale services with safety as its top priority. The services will enhance the Company’s potential to be one of the world’s leading airlines and enable Thailand to remain as the regional aviation hub. 3. Considering business competitiveness enhancement, the Department focuses on strategic management and applies the Balanced Score Card as a management tool and sets four major Key Performance Indicators on finance, customers, organizational management and career path in the organization. 4. As a part of the company’s pro-active policy, the Ground Support Equipment Services has studied and mapped out strategic plans to expand their operations overseas as the outsource service provider in

Thai Airways International was named by Business Traveller Asia-Pacific Magazine, 2001 July

order to increase their income.

On Board Service Despite the fact that numerous surveys of passengers’ opinions on

for the Best Overall Business

international airlines’ services, conducted by media in many countries, have

Traveler’s Cellars in the Sky

ranked Thai Airways International for their outstanding services in many

Award and ranked as one of

areas for many consecutive years, the Company has never been complacent with its current success. On the contrary, it has continuously improved

the top five airlines serving

service quality in all areas to become the First Choice Carrier with touches of

the best champagne in

Thai and an aviation business leader. On board services are an important

the Asia Region

area where the Company and all parties concerned have meticulously worked out detailed service procedures, carefully selected entertainment programs, and food and beverages served during the flight. Air crew have been trained in service procedures, and to assist and provide information to passengers from different cultures to maintain THAI’s leadership in the aviation business. Thai Airways International was named by Business Traveller Asia-Pacific Magazine, 2001 July for the Best Overall Business Cellars in the Sky Award and ranked as one of the top five airlines serving the best champagne in the Asia Region. In October 2001, the Company was also ranked in the top three Best Airlines in Asia-Pacific Region and named as the airline with the best service for Economy Class. For the year 2002, the Company was ranked by Business Traveller Asia-Pacific Magazine as one of the top three Best Asia-Pacific Airlines, one of the top ten Best Airlines, one of the top ten Best First Class and also ranked in the top five Best Economy Class.

TG 016

Annual Report 2001/02


To publicize Thai Food and products from the Royal Project on the occasion of Her Majesty the Queen’s Birthday, THAI served salad from the Royal Project with “River of King” dressing, ostrich green curry with

During fiscal year 2001/02,

eggplant, steamed rice with coconut milk, served with Papaya salad

the Flight Crew Training Center

and coffee cake from the Mae Fah Luang project. The Catering Services selected “Foi Thong” (Thai dessert made of sweetened egg yoke in a very thin strands and delicately folded into a small rectangular piece), a product

organized 37 training courses and workshops for pilots,

from “One Village One Product” from Chachoengsao Province to serve

four courses for pilot

their passengers on board. With its colorful mouth-watering appearance,

instructors, 28 conversion

the dessert has been prepared in a quality process that meets Thai Airways

courses for pilots changing

International standards and certified for its hygiene and safety. This will help publicize Thai cottage industries among passengers from various countries and pave the way to expand markets for Thai products.

aircraft types, and five for pilot trainees

The Company also promotes Thai Food and other products among foreigners with an emphasis on the benefits and properties of Thai herbal ingredients. Thai Airways International is preparing to provide “Instructions on Safety on Board” in Braille on all aircraft types in the fleet to ensure that all customers are equally attended. In cooperation with the Tourism Authority of Thailand’s “Be My Guest” program, the Company held training sessions on the 2001/02 tourism plan for their flight attendants so they could effectively disseminate information on tourism in Thailand to passengers and interested foreigners. The Company provided special services for such current events such as the FIFA World Cup 2002 final match, co-hosted by South Korea and Japan. Training on facilitation procedures and measures to handle situations both on board and at airports were provided to staff in accordance with guidelines from the International Air Transportation Association (IATA). The procedures, certified by R.E.A.C.T. system, were to boost confidence among passengers as it was anticipated that a great number of tourists and football fans would attend the match. In response to network expansion to various destinations in the People’s Republic of China, Thai Airways International will in the future recruit flight attendants from that country for the convenience of Chinese passengers and to increase effectiveness of services for this target group. At present, foreign flight attendants include Japanese, Korean and Taiwanese.

Personnel and Training During fiscal year 2001/02, the Flight Crew Training Center organized 37 training courses and workshops for pilots, four courses for pilot instructors, 28 conversion courses for pilots changing aircraft types, and five for pilot trainees. Among 304 pilots attending the training programs and workshops, 64 were pilot instructors, 176 were pilots on conversion

Thai Airways International Public Company Limited

TG 017


courses and 64 were pilot trainees. In addition, a Standardization Workshop was organized for 115 staffers of the Crew Center.

Business Class passenger seat improvement with a pitch

For the next fiscal year 2002/03, training programs and workshops have been partly worked out as follows. Minimum three courses for pilot trainees on the Airline Transition

expansion from 39 inches to 49 inche and installation of electrically-controlled seats

Training Conversion courses for pilots changing aircraft type (depending on needs of the Flight Operations Department) Trainings for pilot instructors to replace resigning or retired instructors The Standardization Workshop External training courses to enhance staff competency

Aircraft Interior Product Development Plan Airbus 330-300 Fleet Business Class passenger seat improvement with a pitch expansion from 39 inches to 49 inches and installation of electricallycontrolled seats Replacement of six channel entertainment program with a 14-channel system for both Business and Economy Classes The improvement costs are estimated at 1,056 million Baht or an average of 132 million Baht per unit. Five out of eight aircraft in the fleet have been completely improved. The 6th unit is in process and the last one is expected to be completed around November 2003

Boeing 747-400 Fleet First Class Reduction of passenger seats to 14 units and completely change to new passenger seats with 180 degrees reclining feature Business Class Expansion of a pitch from 40 inches to 57-60 inches, using 40 brand new reclining passenger seats The Budget for the fleet improvement is approx. 2,772 million Baht or an average of 308 million Baht per unit. The project will take 3 years from now to complete.

Boeing 777-300 Fleet Business Class Improvement of existing seats to be recline-adjustable for an additional 2 inches. Economy Class A total change of passenger seats in size, design of seat, back and head support as well as foot rest

TG 018

Annual Report 2001/02


The project requires about 88 million Baht or an average of 14 million Baht per aircraft. The renovation is expected to finish around January 2004.

Boeing 777-200 Fleet Business Class Seat rearrangement in 2-2-2 format instead of 2-4-2 and pitch expansion from 50 inches to 54 inches. Use of electrically controlled seats with a higher reclining degree from 116 degrees to 160 degrees. Change in entertainment system to Audio Video On Demand (AVOD) with 8 inches personal monitors and 110VAC PC power outlets for all seats Economy Class Seat rearrangement in 3-3-3 format instead of 3-4-3 using new passenger seats with a higher reclining degree of 110 degrees from 106 degrees. Installation of a new 14-channel entertainment system with PC power outlet The improvement plan will require a budget of approx. 2,220 million Baht or an average of 277 million Baht per aircraft and will take about 24 months to complete. The first unit will be processed in August 2004 and the 8 aircraft fleet will be completed in February 2005. On board entertainment programs are indispensable services making the journey enjoyable, relaxing and pleasent for passengers.

On board entertainment programs are indispensable services making the journey enjoyable, relaxing and pleasent

Directly responsible for program selection, the Production Improvement Division has scrutinized international-standard entertainment programs

for passengers. Directly responsible

for Services By Classes. For First Class and Business Class, the programs

for program selection,

include the various latest movies on a large screen and a personal screen,

the Production Improvement

an alternative video from a personal compact video player. In addition,

Division has scrutinized

documentary programs by such renowned producers as BBC, Discovery and National Geographic, concert programs by famous artists like Madonna and Vanessa Mae; current sport events and tourism documentary programs about Thailand and worldwide countries are available. On Economy

international-standard entertainment programs for Services By Classes

Class, popular box office and quality documentary programs are available. Importantly, passengers of Thai Airways International will be able to see up-to-date events like Football World Cup, Tennis Tournaments, Asian Games or US Open. Regarding audio systems, some aircraft models now have only 6 channels, but an on-going renovation process will equip the entire fleet with 14 channels. Each channel features different musical styles, with Thai and international music suitable for passengers from different cultures on each route. Thai Airways International compiles interesting features in Thai Vision Magazine for First Class and Business Class and Sawasdee Magazine for all Classes.

Thai Airways International Public Company Limited

TG 019


The selected entertainment programs focus on content and quality to serve as a media for world communities and Thailand as they present information from international organization, for example the Wild Life Fund and UN. The programs also feature detailed information on Thailand to help promote investment in the country in tourism, trade and industry.

Royal Orchid Plus The Company’s frequent flyer programme markets and promotes Thai Airways International by extending an extensive range of benefits and privileges to both business and leisure passengers. Recently, business partnerships increased to over 40 with the addition of new travel partners, including; Asian Hotel Alliance, Thai Farmers Bank, Thai Military Bank, Hilton world-wide, and a co-branded JCB credit card. The Royal Orchid Plus database of over 1.4 million members enables THAI to know frequent flying customers better, extend priority services and benefits to members travelling with Thai Airways International and all Star Alliance airlines, and to work closely with partners to provide value

During last year, the Department developed a new selling system focusing on maximizing income per flight and introducing new services

added offers to members. With the introduction of “LifeStyle Miles” members can now earn miles with everyday spending, without boarding an aircraft.

Cargo Operations After the Company’s restructuring into five business units, the

such as a time-definite

Commercial Cargo and Mail Operations is the unit responsible for

TG Force Priority Cargo

domestic and international air transportation of cargo, mail and warehouse services at major domestic airports. During last year, the Department developed a new selling system focusing on maximizing income per flight and introducing new services such as a time-definite TGForce Priority Cargo. Studies on new value-added air services, i.e., Thai Perishable Produce which require special care were conducted to raise income and will be launched in fiscal year 2002/03. Regarding information technology, the Department has cooperated with the Customs Department to develop the Electronic Data Interchange (EDI) to support and streamline the customs clearing procedures and increase customer service efficiency. This resulted in a reduction of unit cost of warehouse services. The Department participated in the study to map out the Customs Free Zone Master Plan at the Suvarnbhumi International Airport and is scheduled to pass the plan to the New Bangkok International Airport and the Airport Authority of Thailand in October 2002. They have implemented the quality control system at international warehouses at Chiang Mai, Hat Yai and Phuket stations and were certified ISO 9002 by BVQI.

TG 020

Annual Report 2001/02


Corporate Image Thai Airways International took a group of students from the Orphanage Association of Thailand to visit the Royal Project at the Chitralada Palace on the occasion of His Majesty the King’s Birthday Thai Airways International hosted “Sharing with Thai Children” on the occasion of National Children is Day in 2002 at the flight Crew Training Center THAI in cooperation with the Tourism Authority of Thailand organized activities related to the “Be My Guest” program to promote tourism in Thailand among Thais and foreigners THAI in cooperation with the Ad-hoc Coordination Committee for Projects initiated by H.M. the King, organized tree planting activity “THAI Relives Forest to the Country” at Huay Sai Development Center THAI hosted for the 4th year “Thai Youths in U.S.A Visit Their Motherland” bi-annual project. The objectives are to provide opportunities for Thai youths and their parents from the United States of America to visit major tourist attractions, learn about Thai customs. culture and business progress in Thailand and to participate in social contribution activities in their motherland. Thai Airways International serves as a coordinator to organize the “90th Anniversary of the Transport and Communications Ministry, Valuable Progress with Technology, Equiping Thai Society with Knowledge Program” during July - November 2002 to solicit offices under the supervision of the Communications Ministry to contribute books to the Informal Education Center countrywide. THAI took students from the School for the Blind in Bangkok to visit the Children’s Museum in Bangkok. (On the same occasion, a briefing on the occupation of flight attendants was shared with them.) The Company had a booth to provide information and guidelines on occupations for students under

Thai Airways International took

the supervision of the Education Ministry and Bangkok

a group of students from the

Metropolitan Administration on the occasion of Her Majesty

Orphanage Association of

the Queen’s Birthday.

Thailand to visit the Roya

In a “THAI sharing with people in flooded areas” program, THAI contributed 1 million Baht to assist people in flooded areas in the North and the Northeast.

Project at the Chitralada Palace on the occasion of His Majesty the King’s Birthday

Thai Airways International Public Company Limited

TG 021


TG 022

Annual Report 2001/02


Nature of Business Operations

As a state enterprise under Ministry of Transport and Communications, Thai Airways International Public Company Limited is a national flag carrier in the international airline business transporting passengers, cargo and mail. Divided into 5 major business units for greater efficiency and flexibility, THAI covers the main air transportation-relevant areas: Technical Services; Ground Services; Ground Equipment Services; Cargo Operations and Catering Services. In addition, the Company offers other supporting activities, i.e., Dispatch Services, Sales on Board and Thai Souvenir Shop. The Company revenues’ structure is as follows:

2001/02

2000/01

1999/00

Million Baht

%

Million Baht

%

Million Baht

%

102,196

78.8

101,297

77.6

86,067

75.3

19,981

15.4

20,464

15.7

19,593

17.1

728

0.6

656

0.5

610

0.5

122,905

94.8

122,417

93.8

106,270

93.0

5,830

4.5

6,449

4.9

6,108

5.3

280

0.2

306

0.2

252

0.2

129,015

99.5

129,172

98.9

112,630

98.6

Other Revenue

495

0.4

1,251

1.0

1,475

1.3

Share of net profit from associated companies

171

0.1

152

0.1

165

0.1

129,681

100.0

130,575

100.0

114,270

100.0

Transportation Revenue - Passenger and Excess Baggage - Freight - Mail Total Transportation Revenue Revenue from Other Activities Revenue from Subsidiaries Total Sales and Services Revenue

Total

In this fiscal year, the Company has restructured its organization into the main business: the core airlines business and other 5 business units, namely the Technical Services, Cargo Operations, Catering Services, Ground Support Equipment Services and Customer Services to streamline its operations.

Airlines Business Situation and Competition The tragic events on 11 September 2001 in the United States have had adverse impact on the airlines industry worldwide. A number of American and European airlines declared bankruptcy. However, while briefly affected for about three months after the tragedy, Asian airline operations improved due to an economic recovery in the region. The airline business overall in this region has been quite satisfactory. Despite an increased number of domestic airlines, the competition on domestic routes is amicable. Thai Airways International this year discontinued some domestic flights to pave the way for private airline operations. Competition on international routes was tougher, especially with the national airlines of destination countries. Thus, the focus has been on such competitive edges as reputation, reliability, service quality, safety, flight schedules, airfares and mileage programs. The competition in the future will be even higher as it will not just be at airline level, but at a level of airline alliances which have cooperated to expand flight networks, reduce costs and enhance service efficiency. As passenger behavior is geared for a variety of different products and services, each airline has emphasized its products and services development and utilization of information technology in response to customers’ needs.

Thai Airways International Public Company Limited

TG 023


Risk Factors Risks from Oil Price Fluctuation Oil is an essential raw material for air transportation. The oil price fluctuation, which depends on demand and supply of oil in world markets, as well as on international political situations ; major oil producing Middle East countries in particular, has directly affected the company’s operations. Thai Airways International uses hedging to help minimize the impact of oil price fluctuation. Risks from Foreign Exchange Fluctuation The Company has a rather high proportion of long-term debts and operating expenses in foreign currency. Fluctuation of exchange rates between Baht and other foreign currencies will have an effect on the afore-mentioned expenses, when considering in terms of Baht. Thai Airways International has mapped out a policy to keep foreign currencies from its operations in proportion with expenses in respective currencies. Moreover, the Company maintains an excess of cash in major and stable currencies, such as US dollars, Japanese yen and Baht, which impact on its operations to reduce risks from foreign exchange rate fluctuation. Risks from Regulations and Controls by Aviation Supervising Organizations With its extensive international routes to various countries, Thai Airways International has to comply with different aviation regulations in different countries. Changes in or additions of any airlines-related regulations in relevant countries may incur expenses in aircraft modifications.

Structure of Shareholders and Management Shareholders Thai Airways International has a registered capital of 17,000 million Baht or 1,700 million units of ordinary shares at 10 Baht per share with the paid-up capital of 14,000 million Baht or 1,400 million ordinary shares. The List of Major Shareholders as of 30 September 2002 Number of Shares

Portfolio (%)

1. Ministry of Finance

1,112,494,526

79.46

187,500,000

13.39

3. Thailand Securities Depository Company Limited for Depositors (Foreign)

42,769,572

3.05

4. Thailand Securities Depository Company Limited for Depositors (Thai)

31,442,065

2.25

326,000

0.02

6. Mr. Pisit Pruekpaiboon

78,500

0.01

7. Bangkok Insurance Public Company Limited

77,600

0.01

8. Khunying Srisiri Krisanachandra

50,000

0.00

9. Ms. Buathip Pinyo

40,000

0.00

30,700

0.00

1,374,808,963

98.20

2. Government Saving Bank

5. The Royal Thai Navy

10. Khunying Tun Kosalavit Total

TG 024

Annual Report 2001/02


Management The Company’s management comprises the Board of Directors, Sub-Committees and Executive Officers as follows: The Board of Directors as of 30 September 2002 comprises of 14 members 1. Mr. Thanong

Bidaya

Chairman

2. Mr. Srisook

Chandrangsu

Vice Chairman

3. Mr. Somchainuk

Engtrakul

Vice Chairman

4. Mr. Chai-anan

Samudavanija

Director

5. Mr. Chartsiri

Sophonpanich

Director

6. ACM Terdsak

Sujjaruk

Director

7. Mr. Borwornsak

Uwanno

Director

8. Mr. Vichit

Suraphongchai

Director

9. Mr. Viroj

Nualkhair

Director

10. Mr. Wissanu

Krea-ngam

Director

11. Khunying Sasima

Srivikorn

Director

12. Pol. Gen. Sant

Sarutanond

Director

13. Mr. Olarn

Chaipravat

Director

14. Mr. Kanok

Abhiradee

Director and Secretary

Scope of Authorities and Responsibilities of the Board of Directors The Board of Directors must perform their duties in accordance with laws, objectives and regulations of Thai Airways International Public Company Limited as well as resolutions of shareholders. They are empowered to appoint any person to manage the Company’s business under the supervision of the Board or entrust its authorization to the person fit during the period as the Board deems fit. The Board may cancel, withdraw or change a scope of authorization delegated to the person. The Board may authorize any person to sign on behalf of the Company. It may appoint any sub-committees. The Board of Directors may not exercise its authority concerning the following matters, except with the approval of the shareholders’ meeting by the votes of not less than three-fourths of the Company’s shares sold: 1. incurring liabilities or obligations to a value in excess of 50 percent of the Company’s registered capital or other currencies of equal value; 2. investing in and/or joining in the operations with another airline, unless there be reasons or necessity to do so for the benefit of the Company’s regular businesses. The Audit Committee as of 30 September 2002 consists of 1. Mr. Olarn

Chaipravat

Chairman

2. Mr. Vichit

Suraphongchai

member

3. Mr. Borwornsak

Uwanno

member

Scope of Authorities and Responsibilities of the Audit Committee The committee is responsible for auditing the Company’s performance to ensure that it meets standards for the maximum benefit of the Company and shareholders. The committee regularly discuss with and have access to internal information and figures from the management, the Office of The Auditor General of Thailand (OAG) and the Internal Audit Department as well as outside experts when required in order to prepare an auditing report and present it to the Board of Directors. The scope of responsibilities is as follows: Reviewing the Company’s financial reports for accuracy, data completion and sufficiency and reliability Ensuring that the Company has effective and appropriate internal auditing systems Scrutinizing, selecting and recommending an auditor for the Company

Thai Airways International Public Company Limited

TG 025


Ensuring that the Company abides by relevant laws and regulations Ensuring that there are no conflicts of interest Carrying out any tasks assigned by the Board of Directors Preparing an auditing report to be published in the Company’s annual report Thai Airways International’s Executives as of 30 September 2002 comprises of 1. Mr. Kanok

Abhiradee

President

2. Mr. Kobchai

Srivilas

Executive Vice President of Technical Department

3. Mr. Kaweepan

Raungpaka

Executive Vice President of Finance and Accounting Department

4. Mr. Suthep

Suebsantiwongse

Executive Vice President of Human Resources and General Administration Department

5. Mr. Tasnai

Sudasna Na Ayudhaya

Executive Vice President of Commercial Department

6. M.R. Supadis

Diskul

Executive Vice President of Corporate Development and Support Department

7. Sqn. Ldr. Udomchai Nandamanop

Executive Vice President of Operations Department

8. ACM Narongsak

Sangapong

Executive Vice President of Special Project Department

9. Mrs. Ngamnit

Sombutpibool

Vice President of Comptroller Department

Phinyawat

Vice President of Corporate Finance Department

10. Mrs. Arunee

Remark: “Executives” as per the definition of “Management” by the Office of the Securities and Exchange Commission

Responsibilities of the President The President is responsible for overall management to achieve the Company’s objectives or as per any resolutions by the Board of Directors. He is also in charge of supervising the management team and staff within the scope of responsibilities stipulated in the Company’s regulations or by the Board of Directors. As for any conflicts of interest or any matters beyond the scope assigned by the Board, the President shall submit for approval from the Board. In addition, the President is authorized to approve any expenses for the Company’s regular operations not exceeding 150 million Baht and he shall countersign with one of the Executive Vice Presidents or a member of the Board of Directors. For the expenses not exceeding 60 million Baht, he shall countersign with one of the Executive Vice Presidents and for the expenses not exceeding 30 million Baht, the President is authorized to approve. The Company has no Corporate Secretary but does have Equity Administration Department and Public Information Center where investors may check or ask for information. The Appointment of the Board of Directors and Executives

The appointment of directors shall be made by a majority vote in a shareholders’ meeting in accordance with the following rules and procedures: 1.

One shareholder shall have one vote for each share;

2.

Each shareholder shall exercise all the votes he or she has under (1) to elect one or several person(s) to

be directors but cannot divide the votes for any person to any extent; 3.

Persons receiving the most votes, in descending order, are those who are elected directors, to the

number of directors who are to be elected. If there is a tie in the last to be elected and this would exceed the said number of directors, lots shall be drawn to meet the required number. In the case of a vacancy on the Board of Directors otherwise than by the end of term, the Board of Directors shall elect any person who has qualifications and is not subject to prohibition under the law as a replacement director at the next meeting of the Board of Directors, except in the case where the remaining term of office of the director whom he or she replaces is less than two months. The replacement director shall hold the office only for the remaining term of the director whom he or she replaces.

TG 026

Annual Report 2001/02


The resolution of the Board of Directors under paragraph one must be passed by a vote of not less than three-fourths of the number of the remaining directors. The shareholders’ meeting may pass a resolution removing any director from office before the end of term, by a vote of not less than three-fourths of the shareholders present at the meeting and entitled to vote, provided that the shares held by them are not, in the aggregate, less than one-half of the number of the shares held by the shareholders present at the meeting and entitled to vote.

The Appointment of The President, the top position of the Company’s management. The Board of Directors shall appoint a nominating committee for the position of the President to screen candidates’ applications in accordance with guidelines stipulated by the sub-committee on the Company’s Human Resources Development Plan and with the Act of Standard Qualifications of Directors and State Enterprise Staff B.E. 2518. The nominating committee will select persons with required qualifications and propose to the Board of Directors for their selection with a majority vote. As for other management members, the Board of Directors shall appoint a nominating committee to select appropriate persons. Remuneration of the Board of Directors and the Management

Monetary Remuneration The remuneration for the Board of Directors and executive officers in the fiscal year ending on 30 September 2002 is as follows: Units : Million Baht Number of Persons

Directors (1) Audit Committee Executive Officers

(2)

Total Remuneration Meeting Allowances

Total

Salary, Bonus, Cost of Livings &

and Bonus

Other Benefits as per

for Directors

The Company's regulations

15

3.05

-

3.05

3

0.23

-

0.23

8

-

15.93

15.93

(1) A member of the Board of Directors may also serve as an executive officer. (2) Executive Officers do not include Vice President of Corparate Finance nor Vice President of Comptroller.

Other Remuneration The Board of Directors is entitled to complimentary air tickets on domestic and international routes on the Company's flights only during their service terms. The executive officers are entitled to discounts similar to other staff of the Company. Discount rates, classes and the number of air tickets to which they are entitled depend on individual position. They also enjoy the benefits from the Provident Fund and the Pension Fund just as other staff.

Corporate Governance To ensure that the business has been operated under proper supervision and in accordance with policies of the Stock Exchange of Thailand on good governance for executives of the listed firms, on 31 July 2002, the Board of Directors appointed the Company’s Good Governance Committee comprising of Directors, representatives from the management team and non-company representatives. The Committee’s duty is to check and make recommendations to the Board to implement good governance in the business as per principles regulated by Ministry of Finance and the Stock Exchange of Thailand and in accordance with International Best Practice.

Thai Airways International Public Company Limited

TG 027


Policies and Measures on Use of Inside Information for personal benefit The Company has regulations and penalties for executive officers and staff to prevent them from use of inside information for their own business or ventures in any company partnership and/or firms which involve conflict of interest or may cause damage to the Company. Furthermore, in case of any transactions or transfers of the Company’s stocks, the Board of Directors and the management members have to report the change in their holdings in the Company’s stocks to the Office of the Securities and Stock Exchange Supervision Committee and the Stock Exchange of Thailand within 3 days after the transactions and/or transfer took place. Any person who does not comply with the regulations shall be penalized as stipulated in the Act on the Securities and Stock Exchange B.E. 2535.

Internal Controls The Company has an System Audit Department directly reporting to the Board of Directors. Responsible for reviewing the accuracy and completion of data, the keeping and use of assets and assessing sufficiency and effectiveness of internal control systems, the department has mapped out internal auditing and reinforcement plans. The Board of Directors acknowledges and approves reports by the Audit Committee that the Company’s internal control systems are sufficient.

Professional Fee and Expenses for Auditors The Company has assigned the Office of the Auditor General of Thailand to audit its financial statements for fiscal year 2001/02. The professional fees and expenses for the auditing services totals 2.08 million Baht.

Related-Parties Transactions Related-parties transactions with connected persons Related information including value of related-parties transactions with connected persons has been disclosed in notes to financial statements. Comments from the Audit Committee on the related-parties transactions Having scrutinized items on related-parties transactions during fiscal year 2001/02, the Audit Committee has opined that the afore-mentioned items were transacted in accordance with the Company’s regular business practice and in a reasonable manner. The setting of prices, terms and conditions was done in the same manner as those offered to non-related parties. There were no transfer benefits between companies, subsidiaries, joint ventures, affiliations nor shareholders. As for loan guaranteed by Ministry of Finance and loans via Ministry of Finance as well as loans from the Government Savings Bank, in which the Bank and Ministry of Finance who are major shareholders of Thai Airways International, the Company has enjoyed loans at better interest rates and conditions, compared to loans from other financial institutions. Approval procedures for related-parties transactions The related-parties transactions were done as per the Company’s regular business procedures and were approved strictly in accordance with the Government and State Enterprise procedures. No Director or executive with conflict of interest in the matter has been involved in the approval. Policies on future related-parties transactions The Audit Committee and the Company will together oversee the future related-parties transactions to ensure that they will be handled properly with a fair return rate and approved in accordance with appropriate related processes and procedures. Items and values of related-parties transactions with connected persons will be disclosed under the annoucement and regulations by the Securities and Exchange Commission.

TG 028

Annual Report 2001/02


Positions of Directors and Executive Officers in Related Companies Name 1. Mr. Srisook Chandrangsu (Vice Chairman) 2. Mr. Kanok Abhiradee

Company

Position

Royal Orchid Hotel (Thailand) Public Company Limited

Director

Bangkok Aviation Fuel Services Public Company Limited

Director

Phuket Air Catering Company Limited

Director

Royal Orchid Hotel (Thailand) Public Company Limited

Director

(President) 3. Mr. Bhisit Kuslasayanon

Thai-Amadeus Southeast Asia Company Limited

Director

Donmuang International Airport Hotel Company Limited

Director

Bangkok Aviation Fuel Services Public Company Limited

Director

Phuket Air Catering Company Limited

Director

Thai Information Solutions Company Limited

Director

(Executive Vice President,

Bangkok Aviation Fuel Services Public Company Limited

Director

Technical Department)

Fuel Pipeline Transportation Limited

Director

Thai Information Solutions Company Limited

Director

(Company’s Advisor)

4. Mr. Kobchai Srivilas

5. Mr. Kaweepan Raungpaka (Executive Vice President,

Royal Orchid Hotel (Thailand) Public Company Limited

Director

Finance and Accounting Department)

Donmuang International Airport Hotel Company Limited

Director

Phuket Air Catering Company Limited

Director

Fuel Pipeline Transportation Limited

Director

Donmuang International Airport Hotel Company Limited

Director

6. Mr. Suthep Suebsantiwongse (Executive Vice President, Human Resources and General Administration Department) 7. Mr. Tasnai Sudasna Na Ayudhaya

Thai-Amadeus Southeast Asia Company Limited

Director

(Executive Vice President,

Royal Orchid Hotel (Thailand) Public Company Limited

Director

Commercial Department)

Bangkok Aviation Fuel Services Public Company Limited

Director

Fuel Pipeline Transportation Limited

Director

Donmuang International Airport Hotel Company Limited

Director

Aeronautical Radio of Thailand Limited

Director

Thai Information Solutions Company Limited

Director

(Executive Vice President,

Bangkok Aviation Fuel Services Public Company Limited

Managing Director

Corporate Development and

Phuket Air Catering Company Limited

Director

Support Department)

Fuel Pipeline Transportation Limited

Director

Thai Information Solutions Company Limited

Director

Thai Information Solutions Company Limited

Director

Thai Information Solutions Company Limited

Director

Thai-Amadeus Southeast Asia Company Limited

Managing Director

8. Sqn.Ldr. Udomchai Nandamanop (Executive Vice President, Operations Department) 9. M.R. Supadis Diskul

10. Mr. Tummasak Chutiwong (Vice President, Crisis Management and Information Center Department) 11. Flt.Lt. Sukasem Nuangwang (Vice President, Special Project Department) 12. Miss Bu-Nga Kornvinai (Director, Office of the Executive Vice President, Finance and Accounting Department) 13. Mr. Danuj Bunnag (Director, Office of the

Vice President, Marketing Planning Department

Thai Airways International Public Company Limited

TG 029


Discussion and Analysis of Operating Results and Financial Position

Results of Operation During the fiscal year 2001/02, the world’s sluggish economy and impact from crisis in the United States have intensified competition in the aviation business. However, Thailand’s tourism situation has not been slow due to the constant growth of tourists in this region and from Europe and Australia. This is also because the Company has adopted strategies to enhance performance efficiency. Consequently, registered income was almost equivalent to the previous year with profit from sales and services of 18,688 million Baht, an increase of 6,461 million Baht or 52.8% when compared to that of the previous year. In addition, the strengthening Baht value as of the fiscal year end when compared to the same date of the previous year enabled the Company to enjoy a profit from foreign exchange of 2,410 million Baht, compared to a 3,910 million Baht loss in foreign exchange in fiscal year 2000/01. Due to the lowering interest rates in the financial market, Thai Airways International Public Company Limited and its subsidiaries recorded profit before income tax of 14,416 million Baht with a 10,182 million Baht net profit, an increase of 8,253 million Baht over the previous year. Net profit per share equaled 7.27 Baht.

Financial Position Assets The Company and its subsidiaries had total assets, as of the 2002 fiscal year end, worth 178,410 million Baht, a 148 million Baht or 0.1% increase over the last year. This is because

-

Current assets rose by 8,104 million Baht or 23% mainly due to cash

and bank equivalents increase of 12,089 million Baht

-

Non-current assets decreased by 7,956 million Baht or 5.6% mainly

due to the decrease in net book value of land, buildings and equipment in addition to reduction in concessions for acquisitions of aircraft and engines as the realized and unrealized benefits from aircraft received was transferred from accounts.

Liabilities and Shareholders’ Equity The Company and subsidiaries have a total liabilities of 150,056 million Baht, a decrease of 10,195 million Baht or 6.4% mainly due to 99,604 million Baht of long-term loans reduce by 15,296 million Baht or 13.3% from the previous year. Of this amount, there were 20,628 million Baht liabilities due within one year. The Company shareholders’ equity as of 30 September 2002 amounts to 28,229 million Baht, when combined with a 125 million Baht value of minority interest, the total shareholders’ equity totaled 28,354 million Baht, a 10,343 million Baht or 57.4% rise as a result of the Company’s net profits in fiscal year 2001/02. Debt to equity ratio as of the fiscal year end dropped to 5.29 times, when compared to 8.90 times as of the same date of the previous fiscal year. This is because liabilities declined while shareholders’ equity increased.

TG 030

Annual Report 2001/02


Cash Flow In fiscal year 2001/02, the Company and subsidiaries net cash flow from their operations rose by 18,901 million Baht to 25,563 million Baht, compared to 6,662 million Baht the previous year. This was due to operating profit before changes in operating assets and liabilities equaled 19,218 million Baht, a growth of 3,138 million Baht. Net cash used in investing activities of 3,453 million Baht was mostly spent for fixed assets acquirement, whereas net cash used in financing activities of 10,309 million Baht was for repayments of liabilities.

Production and Traffic In fiscal year 2001/02, the Company expanded its destinations and increased flights to cope with high traffic routes while reducing domestic flights, allowing private airlines to operate. As a result, the production capacity rose by 3.1% over the last year and the traffic volume grew by 3.6%, increasing load factor from 68.5% in last fiscal year to 68.9%. Details are as follows: 2001/02

% Change

Production

(MATK)

8,752

+ 3.1%

Traffic

(MRTK)

6,027

(%)

68.9

Passenger Production

(MASK)

63,198

+ 4.5%

Passenger Traffic

(MRPK)

46,571

+ 3.1%

Load Factor

Cabin Factor Freight Production

+ 3.6% + 0.4

(%)

73.7

- 1.0

(MADTK)

3,064

+ 0.5%

(MRFTK)

1,771

(%)

57.8

Freight Traffic Freight Load Factor

+ 4.5% + 2.2

Number of passengers carried totaled 18,315,138 persons, a 1.6% decrease due to the terrorist attack in the United States which slowed down the tourism industry during the first quarter. In fiscal year 2001/02, the Company has a 81-aircraft fleet with flight operating hours of 281,286 hours, a 3.6% increase from the previous year. Average hours of utilization per aircraft rose from 9.6 hours a day to 9.8 hours a day.

Operating Revenue In fiscal year 2001/02, Thai Airways International and its subsidiaries recorded 129,510 million Baht operating income, a decrease of 914 million Baht or 0.7% over the previous year. Units: Million Baht

2001/02

% Change

102,196

+ 0.9%

19,981

- 2.4%

728

+ 11.0%

122,905

+ 0.4%

Transportation Revenue - Passenger and Excess Baggage - Freight - Mail Total Transportation Revenue Revenue from Other Activities Revenue from Subsidiaries Total Sales and Services Revenue Other Revenue Total Operating Revenue

Thai Airways International Public Company Limited

5,830

- 9.6%

280

- 8.8%

129,015

- 0.1%

495

- 60.4%

129,510

- 0.7%

TG 031


Total sales and services revenue of 129,015 million Baht was reduced by 258 million Baht or 0.1% from the previous year. Details are:

Transportation Revenue registered at 122,905 million Baht, an increase of 488 million Baht or 0.4% from

-

Passenger and excess baggage revenue amounted to 102,196

million Baht or 79.2% of total sales and services revenue with an 899 million Baht or 0.9% increase over the previous year.

-

Freight revenue of 19,981 million Baht reduced from the previous

year by 483 million Baht or 2.4% due to the application of a net sales system, hence the posting of reduced revenue. Details of yield in fiscal year 2001/02 are: 2001/02 System-wide

(Baht/RTK)

20.39

% Change - 3.1%

Passenger

(Baht/RPK)

2.18

- 2.2%

Freight

(Baht/RFTK)

11.28

- 6.6%

The reduction of yield was due to the strengthening Baht when compared to last year and intensified competition in the industry.

Revenue from other activities amounted to 5,830 million Baht, a reduction of 619 million Baht or 9.6% due to the decrease in the number of passengers and flights of customer airlines. Details are:

-

Revenue from business units was 5,618 million Baht, 555 million

Baht or 9% less than the previous year. They were derived from the Technical Services, the Customer Services, the Ground Support Equipment Services, the Cargo and Mail Commercial and the Catering Services.

-

Revenue from Dispatch Services, Sales on Board and Thai Souvenir

Shop were 212 million Baht, 64 million Baht or 23.2% reduction.

Revenue from subsidiaries was from Thai-Amadeus Southeast Asia Company Ltd. at 280 million Baht, 27 million Baht or 8.8% decrease over the previous year. Other revenue dropped by 756 million Baht or 60.4% over the last fiscal year with following details:

-

Interest revenue of 320 million Baht dropped by 126 million Baht

or 28.3% due to lowering interest rates.

-

175 million Baht of other revenue was 630 million Baht or

78.3% less than that of the previous year when the Company received approximately 415 million Baht compensation for damage from 1991 Iraq Invasion to Kuwait from the UN Compensation Committee. Furthermore, profit from sales of assets dropped by 148 million Baht over the previous year.

TG 032

Annual Report 2001/02


Operating Expenses Thai Airways International and subsidiaries had total operating expenses of 109,489 million Baht in fiscal year 2001/02, a reduction of 12,259 million Baht or 10.1% over the previous year. Sales and services expenses of 110,327 million Baht reduced by 6,619 million Baht or 5.7%. Details are:

Transportation expenses of 107,949 million Baht dropped by 6,480 million Baht or 5.7% when compared to those of the previous year. Major causes are:

-

25,995 million Baht flight operating expenses was lower by

3,588 million Baht or 12.1%. Of this number, 76.8% resulted from fuel cost reduction of 4,304 million Baht or 17.7% because the average fuel price was about 20% lower than the previous year whereas insurance premium increased by 989 million Baht or 123.3% because of the 11 September 2001 event.

-

Marketing expenses of 10,832 million Baht decreased by 3,441

million Baht or 24.1% due to a wider application of a net sales system hence reducing agents’ commission. Moreover, the company’s policy on reduction of overall expenses affected advertising and public relations budget.

-

A total of 8,427 million Baht of lease of aircraft and spare parts

expenses dropped by 3,219 million Baht or 27.6% due to the lower interest rates. It is partly because the number of aircraft under bridge lease contracts was lowered as they were rearranged to be on lease financing. This resulted in 8,692 million Baht aircraft depreciation increasing by 623 million Baht or 7.7%.

-

Overhaul and maintenance of 15,998 million Baht grew by 2,104

million Baht or 15.1% because of higher flight operating hours and warranty expiration for more engines.

-

Expenses for Ground Services were 19,652 million Baht, a 1,118

million Baht or 6.0% increase mainly because the expansion of destination network incurred higher airport and navigation fees. Additionally, navigation fees over European countries became higher. Other expenses, excluding profit from foreign exchange, totaled 1,572 million Baht, an increase of 759 million Baht or 48.3% over the previous year mainly due to severance pay for early retirees.

Change in Accounting Policy In this fiscal year, the Company has changed its accounting treatment on deferred tax, previously transferred only a portion utilizing for the year from retained earning, to record at a total amount in deferred tax account. Also, the Company has restated its 2000/01 financial statements, shown for comparative purpose. As a result, retained earnings at the beginning of the fiscal year 2001/02 and 2000/01 increased by 5,381 million Baht and 6,434 million Baht, respectively.

Thai Airways International Public Company Limited

TG 033


Thai Airways International Public Company Limited

Ten-Year Review

Number of Aircraft

2001/02

2000/01

1999/00

81

81

79

281,286

271,564

255,668

Flight Hours

(Block Hours)

Available Ton-Kilometres

(Million)

8,752

8,490

7,752

Revenue Ton-Kilometres

(Million)

6,027

5,818

5,469

Load Factor

(%)

68.9

68.5

70.6

Number of Passengers

(000)

18,315

18,619

17,700

Available Seat-Kilometres

(Million)

63,198

60,459

55,517

Revenue Passenger-Kilometres

(Million)

46,571

45,167

41,347

Cabin Factor

(%)

73.7

74.7

74.5

Available Dead Load Ton-Kilometres

(Million)

3,064

3,049

2,756

Revenue Freight Ton-Kilometres

(Million)

1,771

1,695

1,690

Freight Load Factor

(%)

57.8

55.6

61.3

Number of Personnel

(People)

25,516

25,963

25,632

Profitability (Result before Tax)

(Million Baht)

14,416

1,229

4,820

Note : (1) All data shown for fiscal year from October 1 - September 30, or as at September 30. (2) The Company’s results for fiscal year 2000/01 were adjusted with the accounting policies changed in fiscal year 2002/01.

Definition of Aviation Terms >

Available Ton-Kilometres (ATK) Capacity offered for sale expressed as aircraft payload multiplied by flown kilometres.

>

Revenue Ton-Kilometres (RTK) Capacity sold expressed as tons of load carried multiplied by flown kilometres.

>

Load Fator Revenue ton-kilometres expressed as percentage of available ton-kilometres.

>

Available Seat-Kilometres (ASK) Passenger capacity offered for sale expressed as number of seats multiplied by flown kilometres.

>

Revenue Passenger-Kilometres (RPK) Passenger capacity sold expressed as number of passengers multiplied by flown kilometres.

TG 034

Annual Report 2001/02


1998/99

1997/98

1996/97

1995/96

1994/95

1993/94

1992/93

79

77

76

73

69

61

62

244,065

238,696

233,495

211,818

201,973

186,321

175,931

7,309

6,838

6,473

5,789

5,469

5,011

4,662

5,097

4,585

4,466

3,940

3,755

3,467

3,066

69.7

67.0

69.0

68.1

68.7

69.2

65.8

16,331

15,199

15,178

14,308

12,834

11,502

10,183

51,788

48,557

45,353

42,099

39,795

36,279

33,878

37,642

32,969

31,288

29,226

26,558

24,733

22,208

72.7

67.9

69.0

69.4

66.7

68.2

65.6

2,648

2,468

2,391

2,000

1,864

1,746

1,613

1,644

1,548

1,598

1,266

1,320

1,197

1,020

62.1

62.7

66.8

63.3

70.8

68.6

63.2

24,148

24,222

24,072

22,136

21,541

19,944

19,560

6,393

5,268

4,004

4,886

4,596

4,212

1,381

>

Cabin Fator Revenue passengers-kilometres expressed as percentage of available seat-kilometres.

>

Available Dead Load Ton-Kilometres (ADTK) Capacity offered of aircraft pay load after deduction of weight of the load of passengers multiplied by flown kilometres.

>

Revenue Freight Ton-Kilometres (RFTK) Freight capacity sold expressed as tons of freight carried multiplied by flown kilometres.

>

Freight Load Factor Revenue freight-kilometres expressed as percentage of available dead load ton-kilometres.

>

Aircraft Payload Weight of the load of passengers, cargo and other load carried on a fully loaded aircraft using the average density of cargo.

Thai Airways International Public Company Limited

TG 035


TG 036

Annual Report 2001/02


Audit Committee’s Report

The Audit Committee of Thai Airways International Public Company Limited was appointed by the Board of Directors on 20 December 2001, comprises of three independent members: 1. Mr. Olarn

Chaipravat

Chairman

2. Mr. Vichit

Suraphongchai

member

3. Mr. Borwornsak

Uwanno

member

The Audit Committee was charged with the responsibility for overseeing the process of preparing and disclosure of financial reports, to review the internal control systems and internal audit procedures, ensure compliance with the relevant laws and regulations, and to recommend the appointment of external company Auditors and specify their remuneration. The Audit Committee convened 5 times in which discussion and exchange ideas with external auditors and internal audit department. Relevant management members were invited to attend the meetings to provide additional information and clarification on the following issues: -

Review the internal audit reports and recommend amendments to provide for a more effective internal

audit systems. -

Review the major items in the financial report and review the reliability of the report, for both quarterly and

annually, including the selection of Accounting Policy and the Disclosure in the financial report. -

Review the annual internal audit and co-source plan in some areas.

-

Review the compliance with laws and relevant regulations.

-

Review the Company’s internal control systems

In fiscal year 2001/02, the Audit Committee prepared Memorandum to the Board of Directors after each meeting, with recommendation on major issues: To establish a Governance Committee to provide recommendations and guidelines for management to improve organizational internal control systems and to assess the status of present internal control systems and risk management of the Company. To improve the collection process and procedures To have the internal auditors observe on the procurement process To accelerate the implementation of Risk Management and Internal Control to comply with the Audit Commissioners Regulation on Standard for Internal Control B.E. 2544 Recommendations on the internal control system improvement in major areas To provide additional disclosure in notes to the Company’s financial statements The Audit Committee has the opinion that the Company’s operations during previous year had reasonable and sufficient internal control systems, the financial report was prepared in accordance with the generally accepted accounting principles and the Company has complied with relevant laws and regulations.

(Mr. Olarn Chaipravat) Chairman November 27, 2002

Thai Airways International Public Company Limited

TG 037


No. 0015/1538

Office of the Auditor General Rama VI Road, Phayathai, Bangkok 10400

This Letter is given to confirm that the English version of the Auditor’s Report together with the financial statements for the years ended September 30, 2002 and 2001 of Thai Airways International Public Company Limited and the consolidated financial statements for the years ended September 30, 2002 and 2001 of Thai Airways International Public Company Limited and its subsidiaries was translated by Thai Airways International Public Company Limited. The Office of the Auditor General has reviewed the aforementioned translated the Auditor’s Report and the financial statements and found that they were translated from those of the Thai version.

Given on November 29, 2002

(Jaruvan Maintaka) Auditor General

TG 038

Annual Report 2001/02


Official Translation

Auditor’s Report

To : The Shareholders of Thai Airways International Public Company Limited The Office of the Auditor General has audited the accompanying consolidated and the Company balance sheets as at September 30, 2002 and 2001, the related consolidated and the Company statements of income, changes in shareholders’ equity, retained earnings and cash flows for each of the two years in the period ended September 30, 2002, of Thai Airways International Public Company Limited and its subsidiaries. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. The responsibility of the Office of the Auditor General is to express an opinion on these financial statements based on its audits. The Office of the Auditor General conducted the audits in accordance with generally accepted auditing standards. Those standards require that the Office of the Auditor General plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The Office of the Auditor General believes that the audits provide a reasonable basis for the opinion. In the opinion of the Office of the Auditor General, the consolidated and the Company financial statements referred to above present fairly, in all material respects, the consolidated and the Company financial position as at September 30, 2002 and 2001, the results of the consolidated and the Company operations, changes in the consolidated and the Company shareholders’ equity, and the consolidated and the Company cash flows for each of the two years in the period ended September 30, 2002, of Thai Airways International Public Company Limited and its subsidiaries, in conformity with generally accepted accounting principles. With unqualified opinion on the financial statements, the Office of the Auditor General draws attention to Note 3.1 to the financial statements regarding the change in accounting policy for the recording of deferred income tax.

(Signed) Jaruvan Maintaka (Jaruvan Maintaka) Auditor General

(Signed) Pensri Soranaraks (Pensri Soranaraks) Auditor-in-charge

Office of the Auditor General November 22, 2002

Thai Airways International Public Company Limited

TG 039


Thai Airways International Public Company Limited and Subsidiaries

Balance Sheets As at September 30, 2002 and 2001

Unit : Baht CONSOLIDATED Notes

2002

THE COMPANY

2001

2002

(restated)

2001 (restated)

ASSETS Current Assets Cash and cash equivalents

3.3

Fixed deposits dued over 3 months

20,117,223,571

8,027,726,204

19,889,254,758

7,774,017,477

632,206,185

1,385,617,333

632,206,185

1,385,617,333

Current investments

3.4

149,655,337

Trade account receivables-net

3.5

13,201,683,343

11,190,298,414

-

13,199,668,913

149,655,337

11,186,729,314

-

Inventories and supplies-net

3.6

3,530,547,721

3,609,692,877

3,530,547,721

3,609,692,877

4,107,639,784

4,476,201,302

4,107,311,092

-

2,907,488,858

Other current assets Prepaid expenses and deposits Tax refund Others

3.7

Total Current Assets

-

4,476,052,327 2,907,488,858

1,644,888,781

3,682,456,534

1,515,774,884

3,609,868,605

43,383,844,722

35,279,481,522

43,024,418,890

34,949,466,791

Non-Current Assets Investments for using the equity method

3.8.1

874,298,101

884,320,360

1,129,506,110

1,110,720,094

Other long-term investments

3.8.2

73,381,486

94,493,996

73,381,486

94,493,996

Loan for investment in aircraft spare parts

3.12

27,449,664

28,103,698

27,449,664

28,103,698

Property, Plant and Equipment-Net

3.10

Aircraft

55,129,520,462

55,557,060,836

55,129,520,462

55,557,060,836

Aircraft under capital leases

43,072,054,106

47,825,588,554

43,072,054,106

47,825,588,554

Aircraft spare parts

8,385,842,592

9,089,701,633

8,385,842,592

9,089,701,633

Land, buildings and improvements

3,231,407,314

3,659,675,560

3,231,407,314

3,659,675,560

Other plant and equipment

4,348,688,751

4,457,727,654

4,278,249,391

4,413,116,222

3.11

12,971,766,099

12,971,766,099

12,971,766,099

12,971,766,099

260,183,634

1,251,033,880

260,183,633

1,251,033,880

3.13

6,651,807,517

7,163,189,133

6,647,873,767

7,162,966,989

Total Non-Current Assets

135,026,399,726

142,982,661,403

135,207,234,624

143,164,227,561

Total Assets

178,410,244,448

178,262,142,925

178,231,653,514

178,113,694,352

Other Non-Current Assets Advance payments for aircraft Concessions for acquisitions of aircraft and engines Deferred income taxes

The accompanying notes are an integral part of these financial statements.

TG 040

Annual Report 2001/02


Unit : Baht CONSOLIDATED Notes

2002

THE COMPANY

2001

2002

(restated)

2001 (restated)

LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Trade account payables Short-term loans

3,872,767,705

3,083,368,233

3,869,340,849

3,080,267,887

3.15

12,175,240,000

9,715,526,000

12,175,240,000

9,715,526,000

Current portion of long-term loans Long-term loans

3.16

10,926,105,121

9,794,163,223

10,926,105,121

9,794,163,223

Liabilities under capital leases

3.17

8,651,931,490

9,926,812,287

8,651,931,490

9,926,812,287

Promissory notes

3.18

1,050,000,000

1,050,000,000

1,050,000,000

1,050,000,000

11,002,519,650

12,108,601,272

10,998,785,010

12,104,891,982

26,870,757

26,946,237

26,870,757

26,919,987

Other current liabilities Accrued expenses Accrued dividends

3.21

Accrued income taxes Unearned transportation revenues Others

3.14

Total Current Liabilities

1,799,939,805

41,762,406

1,778,010,536

12,154,165

12,724,493,234

12,804,989,534

12,724,493,234

12,804,989,534

5,021,512,368

3,778,169,890

4,997,078,782

3,768,056,407

67,251,380,130

62,330,339,082

67,197,855,779

62,283,781,472

Non-Current Liabilities Long-term debts Long-term loans

3.16

36,824,867,614

40,907,334,866

36,824,867,614

40,907,334,866

Liabilities under capital leases

3.17

34,800,841,704

44,821,622,603

34,800,841,704

44,821,622,603

3.18

7,350,000,000

8,400,000,000

7,350,000,000

8,400,000,000

3.26

3,452,719,890

3,406,832,613

3,452,719,890

3,406,832,613

376,367,715

385,436,098

376,367,715

385,436,098

82,804,796,923

97,921,226,180

82,804,796,923

97,921,226,180

150,056,177,053

160,251,565,262

150,002,652,702

160,205,007,652

17,000,000,000

17,000,000,000

17,000,000,000

17,000,000,000

14,000,000,000

14,000,000,000

14,000,000,000

14,000,000,000

4,750,000,000

4,750,000,000

4,750,000,000

4,750,000,000

Promissory notes Staff pension fund Others Total Non-Current Liabilities Total Liabilities Shareholders’ Equity Share capital Authorized 1,700 million ordinary shares par value of Baht 10 each

3.19

Issued and paid-up 1,400 million ordinary shares paid-up Premium on common stocks Unrealised gain on change in market valuation

138,398,377

-

138,398,377

-

Retained Earnings (Deficit) Appropriated Legal reserve

3.20

Unappropriated Total The Company Shareholders’ Equity Minority interest Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity

1,541,881,364

1,032,785,577

1,541,881,364

1,032,785,577

7,798,721,071

(1,874,098,877)

7,798,721,071

(1,874,098,877)

28,229,000,812

17,908,686,700

28,229,000,812

17,908,686,700

125,066,583

101,890,963

28,354,067,395

18,010,577,663

28,229,000,812

17,908,686,700

178,410,244,448

178,262,142,925

178,231,653,514

178,113,694,352

-

-

The accompanying notes are an integral part of these financial statements.

(Signed) Kanok Abhiradee (Kanok Abhiradee) President

Thai Airways International Public Company Limited

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Accounting

TG 041


Thai Airways International Public Company Limited and Subsidiaries

Statements of Income For the years ended September 30, 2002 and 2001

Unit : Baht CONSOLIDATED 2002

2001

THE COMPANY 2002

2001

Revenues from the Sale of Goods and the Rendering of Services Passenger and excess baggage

102,195,967,287

101,296,895,738

102,195,967,287

101,296,895,738

19,981,396,153

20,464,218,143

19,981,396,153

20,464,218,143

728,138,288

656,119,505

728,138,288

656,119,505

6,109,991,638

6,755,225,009

5,830,358,434

6,448,643,127

129,015,493,366

129,172,458,395

128,735,860,162

128,865,876,513

Flight operations

25,994,872,814

29,583,436,014

25,994,872,814

29,583,436,014

Maintenance and overhaul

15,998,385,088

13,894,105,552

15,998,385,088

13,894,105,552

Ground operations

19,651,957,611

18,533,697,927

19,651,957,611

18,533,697,927

Passenger services

14,968,007,913

14,996,446,015

14,968,007,913

14,996,446,015

Marketing

10,831,601,999

14,272,894,055

10,831,601,999

14,272,894,055

1,711,463,710

1,736,931,273

1,711,463,710

1,736,931,273

4,568,842

4,108,308

3,389,542

3,242,840

Lease of aircraft and spare parts

8,426,485,181

11,646,261,090

8,426,485,181

11,646,261,090

Depreciation of aircraft

8,692,541,076

8,069,101,561

8,692,541,076

8,069,101,561

Depreciation of other fixed assets

1,686,585,669

1,700,840,852

1,671,117,843

1,693,142,058

Freight Mail Other activities Total Revenues from the Sale of Goods and the Rendering of Services Selling and Administrative Expenses

Administration and general Remuneration to board of directors

Other activities Total Selling and Administrative Expenses

2,360,629,983

2,508,118,824

2,203,808,740

2,374,670,057

110,327,099,886

116,945,941,471

110,153,631,517

116,803,928,442

18,688,393,480

12,226,516,924

18,582,228,645

12,061,948,071

Profit from the Sale of Goods and the Rendering of Services Brought Foreward

The accompanying notes are an integral part of these financial statements.

TG 042

Annual Report 2001/02


Unit : Baht CONSOLIDATED Notes

THE COMPANY

2002

2001

2002

2001

18,688,393,480

12,226,516,924

18,582,228,645

319,541,870

445,728,138

318,635,124

443,432,011

174,868,159

805,151,889

174,281,702

803,789,581

494,410,029

1,250,880,027

492,916,826

1,247,221,592

(2,410,303,960)

3,910,388,805

Profit from the Sale of Goods and the Rendering of Services Carried Foreward

12,061,948,071

Other Incomes Interest income Others

3.23

Total Other Incomes Other Expenses Losses (Gains) on foreign currency exchange Yields from pension fund

47,284,715

Others

3.24

Total Other Expenses Profit from Operations

1,524,690,023

(2,410,303,960)

66,170,406

47,284,715

825,423,658

1,522,963,164

(838,329,222)

4,801,982,869

20,021,132,731

8,675,414,082

(840,056,081) 19,915,201,552

3,913,009,638 66,170,406 824,682,583 4,803,862,627 8,505,307,036

Share of Profits from Investments for Using the Equity Method Share of net profit from subsidiary companies

-

Share of net profit from associated companies

-

171,088,604

152,242,629

37,058,276

65,517,696

171,088,604

152,242,629

Total Share of Profits from Investments for Using the Equity Method

171,088,604

152,242,629

208,146,880

217,760,325

20,192,221,335

8,827,656,711

20,123,348,432

8,723,067,361

Interest expenses

5,776,258,294

7,598,726,493

5,776,258,294

7,598,713,065

Income tax expenses

4,204,121,686

884,717,727

4,165,174,403

832,186,043

10,211,841,355

344,212,491

10,181,915,735

292,168,253

29,925,620

52,044,238

-

-

10,181,915,735

292,168,253

10,181,915,735

292,168,253

Profit before Interest and Income Tax Expenses

Profit after Tax Net profit of minority interest Profit from Ordinary Activities Extraordinary items-Net Gain from the insurance for exploded and caught fire aircraft Net profit Primary earnings per share

-

1,636,352,566

-

1,636,352,566

10,181,915,735

1,928,520,819

10,181,915,735

1,928,520,819

7.27

0.21

7.27

0.21

-

1.17

-

1.17

7.27

1.38

7.27

1.38

2.8

Profit from ordinary activities Extraordinary items-Net Net profit

The accompanying notes are an integral part of these financial statements.

(Signed) Kanok Abhiradee (Kanok Abhiradee) President

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Accounting

Thai Airways International Public Company Limited

TG 043


Thai Airways International Public Company Limited and Subsidiaries

Statements of Changes in Shareholders’ Equity For the years ended September 30, 2002 and 2001

Unit : Baht CONSOLIDATED Notes

Share Capital

Premium

Retained

Unrealised

Legal

Minority

issued and

on share

Earnings (Deficit)

Gain

Reserve

Interest

Total

fully paid

capital

(restated)

-

1,032,785,577

55,068,216

9,601,513,985

Balance at the beginning of the year 2001

14,000,000,000 4,750,000,000 (10,236,339,808)

- Adjustment of recording of exemption tax from losses on foreign currency

3.1

-

-

6,434,326,933

-

-

-

6,434,326,933

-

-

(606,821)

-

-

-

(606,821)

-

-

-

-

- Adjustment of subsidiary companies’ retained earnings - Cumulative effect of change in accounting policy with regard to staff welfare fees

-

(496,491)

(496,491)

Balance at the beginning after adjustment

14,000,000,000 4,750,000,000 (3,802,619,696)

Add Net Profit

-

-

Less Dividends paid

-

-

1,928,520,819 -

-

1,032,785,577

54,571,725 16,034,737,606

-

-

52,044,238

1,980,565,057

-

-

(4,725,000)

(4,725,000)

At the end of the year 2001

14,000,000,000 4,750,000,000 (1,874,098,877)

-

1,032,785,577 101,890,963 18,010,577,663

Unrealised gain on change in market valuation

-

-

-

138,398,377

-

-

138,398,377

Unrealised items in income statements

14,000,000,000 4,750,000,000 (1,874,098,877) 138,398,377 1,032,785,577 101,890,963 18,148,976,040

Add Net Profit

-

-

-

-

29,925,620 10,211,841,355

Less Dividends paid

-

-

-

-

-

(6,750,000)

-

-

(509,095,787)

-

509,095,787

Less Legal reserve

3.20

10,181,915,735

-

(6,750,000) -

Balance at the end of the year 2002

14,000,000,000 4,750,000,000 7,798,721,071 138,398,377 1,541,881,364 125,066,583 28,354,067,395

The accompanying notes are an integral part of these financial statements.

(Signed) Kanok Abhiradee (Kanok Abhiradee) President

(Signed)

Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Accounting

TG 044

Annual Report 2001/02


Thai Airways International Public Company Limited and Subsidiaries

Statements of Changes in Shareholders’ Equity For the years ended September 30, 2002 and 2001

Unit : Baht THE COMPANY Notes

Share Capital

Premium

Retained Earnings

Unrealised

Legal

issued and

on share

(Deficit)

Gain

Reserve

Total

fully paid

capital

(restated) -

1,032,785,577

9,546,445,769

Balance at the beginning of the year 2001

14,000,000,000 4,750,000,000 (10,236,339,808)

- Adjustment of recording of exemption tax from losses on foreign currency

3.1

-

-

6,434,326,933

-

-

6,434,326,933

-

-

(606,821)

-

-

(606,821)

(3,802,619,696)

-

1,032,785,577

1,928,520,819

-

-

1,928,520,819

(1,874,098,877)

-

1,032,785,577

17,908,686,700

-

138,398,377

-

- Adjustment of subsidiary companies’ retained earnings Balance at the beginning after adjustment

14,000,000,000 4,750,000,000

Add Net Profit

-

At the end of the year 2001

-

14,000,000,000 4,750,000,000

15,980,165,881

Unrealised gain on change in market valuation

-

-

138,398,377

Unrealised items in income statements

14,000,000,000 4,750,000,000

Add Net Profit Less Legal reserve

3.20

1,032,785,577

18,047,085,077

-

-

10,181,915,735

(1,874,098,877) 138,398,377 -

-

10,181,915,735

-

-

(509,095,787)

-

509,095,787

-

Balance at the end of the year 2002

14,000,000,000 4,750,000,000

7,798,721,071 138,398,377

1,541,881,364

28,229,000,812

The accompanying notes are an integral part of these financial statements.

(Signed) Kanok Abhiradee (Kanok Abhiradee) President

(Signed)

Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Accounting

Thai Airways International Public Company Limited

TG 045


Thai Airways International Public Company Limited and Subsidiaries

Statements of Retained Earnings For the years ended September 30, 2002 and 2001

Unit : Baht CONSOLIDATED Notes

2002

THE COMPANY

2001

2002

(restated)

2001 (restated)

Unappropriated Retained Earnings (Deficit) At the beginning of the year

(7,255,268,487)

(10,236,339,808)

(7,255,268,487)

(10,236,339,808)

- Adjustment of subsidiary companies’ retained earnings

-

(606,821)

-

(606,821)

- Adjustment of recording of exemption tax from losses on foreign currency exchange

3.1

At the beginning of the year-after adjustment Add Net Profit Less Legal reserve

3.20

Total Unappropriated Retained Earnings (Deficit)

5,381,169,610

6,434,326,933

5,381,169,610

6,434,326,933

(1,874,098,877)

(3,802,619,696)

(1,874,098,877)

(3,802,619,696)

10,181,915,735

1,928,520,819

10,181,915,735

1,928,520,819

(509,095,787) 7,798,721,071

-

(509,095,787)

(1,874,098,877)

7,798,721,071

(1,874,098,877)

Appropriated Retained Earnings Legal reserve Total Appropriated Retained Earnings

1,541,881,364

1,032,785,577

1,541,881,364

1,032,785,577

1,541,881,364

1,032,785,577

1,541,881,364

1,032,785,577

9,340,602,435

(841,313,300)

9,340,602,435

(841,313,300)

Total Retained Earnings (Deficit) at the end of the year

The accompanying notes are an integral part of these financial statements.

(Signed) Kanok Abhiradee

(Signed) Kaweepan Raungpaka

(Kanok Abhiradee)

(Kaweepan Raungpaka)

President

Executive Vice President Finance and Accounting

TG 046

Annual Report 2001/02


Thai Airways International Public Company Limited and Subsidiaries

Statements of Cash Flows For the years ended September 30, 2002 and 2001

Unit : Baht CONSOLIDATED 2002

2001

THE COMPANY 2002

2001

Cash flows from operating activities Net profit

10,181,915,735

1,928,520,819

10,181,915,735

1,928,520,819

10,379,126,745

9,769,942,414

10,363,658,919

9,762,243,620

Adjustment to reconcile net profit to cash provided by (paid from) operating activities : Depreciation Incomes from investments for using the equity method Losses on sales of assets Losses (gains) on foreign currency exchange Net profit of minority interest Reserve for obsolete inventories

(171,088,604)

(152,242,629)

(208,146,880)

(217,760,325)

437,556,538

272,659,674

437,556,538

272,659,674

(2,378,888,328)

3,512,088,215

(2,378,888,328)

3,513,192,993

29,925,620

52,044,238

-

-

185,442,747

395,660,944

185,442,747

395,660,944

553,844,325

301,357,220

551,843,707

300,616,740

19,217,834,778

16,080,030,895

19,133,382,438

15,955,134,465

Allowance for doubtful accounts, impairment in value of assets Operating profit before changes in operating assets and liabilities Decrease (increase) in operating assets : Trade account receivables Inventories and supplies Prepaid expenses and deposits

(2,355,098,341)

525,886,852

(2,354,652,392)

529,477,687

(106,297,591)

(515,165,565)

(106,297,591)

(515,165,565)

321,687,301

(50,707,278)

321,861,921

(50,817,270)

Tax refund

2,785,459,667

1,871,305,579

2,785,459,667

1,871,325,180

Other current assets

1,871,713,191

(939,354,182)

1,928,298,709

Advance payments for aircraft

-

(12,971,766,099)

-

(934,577,540) (12,971,766,099)

Deferred income taxes

511,381,616

803,605,153

515,093,221

803,827,297

Concessions for acquisitions of aircraft and engines

646,782,388

(130,636,446)

646,782,388

(130,636,446)

Increase (decrease) in operating liabilities : Trade account payables Accrued expenses and other current liabilities Staff pension fund Unearned transportation revenue Net cash from operating activities

749,764,450

900,568,841

749,437,940

897,468,494

1,954,736,880

(527,211,056)

1,948,015,947

(485,230,352)

45,887,277

235,808,633

45,887,277

235,808,633

(80,496,300)

1,379,441,340

(80,496,300)

1,379,441,340

25,563,355,316

6,661,806,667

25,532,773,225

6,584,289,824

The accompanying notes are an integral part of these financial statements.

Thai Airways International Public Company Limited

TG 047


Unit : Baht CONSOLIDATED 2002

THE COMPANY

2001

2002

2001

Cash flows from investing activities Increase in short-term investments Cash paid for acquisition of fixed assets

753,411,148 (4,693,690,403)

782,551,063 (2,756,249,033)

753,411,148 (4,652,394,649)

782,551,063 (2,714,401,268)

Cash received from sales on assets

299,248,132

1,017,825,114

299,248,132

1,017,825,114

Investment

188,416,328

98,835,260

196,666,328

104,610,260

Cash received from loan for investing in aircraft spare parts Net cash used in investing activities

-

10,264,900

-

10,264,900

(3,452,614,795)

(846,772,696)

(3,403,069,041)

(799,149,931)

Cash flows from financing activities Cash received from short-term loans

4,430,000,000

9,917,000,000

4,430,000,000

Cash received from long-term loans

8,210,310,000

-

8,210,310,000

Cash paid for repayment of short-term loans

(1,700,000,000)

-

(1,700,000,000)

-

Cash paid for repayment of long-term loans

(20,192,596,023)

(17,895,605,623)

(20,192,596,023)

(17,895,605,623)

(1,050,000,000)

(1,076,000,000)

(1,050,000,000)

(1,076,000,000)

(6,825,480)

(4,843,110)

(49,230)

(144,360)

(10,309,111,503)

(9,059,448,733)

(10,302,335,253)

(9,054,749,983)

11,801,629,018

(3,244,414,762)

11,827,368,931

(3,269,610,090)

Cash paid to promissory notes Dividends paid Net cash used in financing activities Increase (decrease) in cash and cash equivalents

9,917,000,000 -

Effects of exchange rate changes on decreasing 287,868,350

(125,128,832)

287,868,350

(125,128,832)

Cash and cash equivalents at the beginning of the year

in cash and bank balance

8,027,726,204

11,397,269,798

7,774,017,477

11,168,756,399

Cash and cash equivalents at the end of the year

20,117,223,572

8,027,726,204

19,889,254,758

7,774,017,477

Interest expenses

6,126,349,384

7,778,754,100

6,126,349,384

7,778,754,100

Corporate income tax

1,814,256,045

Supplementary cash flows information : Cash paid during the year for -

1,764,217,288

-

10,740,278,424

-

10,740,278,424

Non-cash transaction Assets under financial lease

-

The accompanying notes are an integral part of these financial statements.

(Signed) Kanok Abhiradee (Kanok Abhiradee) President

(Signed) Kaweepan Raungpaka (Kaweepan Raungpaka) Executive Vice President Finance and Accounting

TG 048

Annual Report 2001/02


Thai Airways International Public Company Limited and Subsidiaries

Notes to the Financial Statements For the years ended September 30, 2002 and 2001

1. BASIC OF FINANCIAL STATEMENT PREPARATION The Company financial statements consist of Thai Airways International Public Company Limited and the Company’s staff pension fund. The consolidated financial statements consist of the Company financial statement and two subsidiaries, Thai-Amadeus Southeast Asia Company Limited and Thai Information Solution Company Limited which the Company holds 55% and 100% of share proportion, respectively. Significant transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Allowance for Doubtful Accounts The allowance for doubtful accounts is set up for trade account receivables, excluding those from government agencies and state enterprises, which are over 6 months overdue, at the following rates : Percentage of allowance Period of overdue

for doubtful accounts

Over

6

months to 1 year

50

Over

1

year to 2 years

75

Over

2

Years

100

Allowance for doubtful accounts for contigent estimated losses that may result from uncollectable trade account receivables including government agencies and state enterprises is estimated from the historical collection experience and current position of account receivables at the balance sheet date.

2.2 Inventories and Supplies Inventories and supplies at the year-end are stated at the lower of weighted average cost or net realisable value except inventories in transit are stated at cost. - Provision for obsolescence of aircraft spare parts is made at an annual rate of 10% of balance at the year-end. - Slow moving aircraft spare parts and spare parts for sales are spare parts not moving over two years or spare parts for aircraft not presented in the fleet. Provision for obsolescence is made at an annual rate of 33.33% of an incurred balance during the years. - Provision for obsoleted and damaged investments is made at a full amount.

2.3 Investments 2.3.1 Investments in subsidiaries and associated companies are stated by equity method according to investment proportion in subsidiaries and associated companies. 2.3.2 Long-term investments in non-marketable equity securities are stated at cost net off a provision for impairment in securities. An impairment loss is recognised in income statements in that impairment period. 2.3.3 Current investments in marketable equity securities are stated at market value at the year-end. Gain or loss on change in valuation of trading securities is recognised in income statements. For available-for-sale securities, the Company recognised gain or loss on change in valuation as an unrealised gain or loss shown under shareholders’ equity.

2.4 Property, Plant and Equipment and Depreciation 2.4.1 Aircraft and aircraft under capital leases are stated at cost including, where applicable, costs of decoration, acquisition costs and interests on loans for purchasing aircraft which is incurred prior to the aircraft being placed into service less any discount from concessions for acquisitions of aircraft. Depreciation is calculated on a straight-line basis over an estimated useful life of 20 years with a salvage value of 10 % of cost. 2.4.2 Aircraft overhaul (“D-CHECK”) costs are capitalised under aircraft and depreciated on a straight-line basis over an estimated useful life of 4-7 years. 2.4.3 Modification and improvement to aircraft are stated at operating cost and depreciated on a straight-line basis over an estimated useful life of 5 years.

Thai Airways International Public Company Limited

TG 049


2.4.4 Aircraft spare parts are stated at the acquisition date cost and depreciated on a straight-line basis over an estimated useful life of 5-20 years. 2.4.5 Other fixed assets are stated at cost on acquisition date or on completion of construction date and depreciated on a straight-line basis over an estimated useful life of 5-20 years. 2.4.6 Cost of leasehold building is amortised over the period of 10 years. 2.4.7 Gain or loss on sales of aircraft is calculated from the difference between a sale price and a book value of aircraft, D-check, an improvement of equipment, and sales expenses. For a gain or loss on sales of other assets is calculated from the difference between a sale price and a net book value of sold assets which is recognised as revenue or expense in income statements.

2.5 Concessions for Acquisitions of Aircraft and Engines The Company recorded its concessions, received under contracts for the acquisition of aircraft and engines, as “Concessions for acquisitions of aircraft and engines” (other assets), together with “Deferred concessions to reduce cost of aircraft” (other liabilities). When aircraft and engines are received, the relevant concessions under contractual agreements are transferred from “Deferred concessions to reduce cost of aircraft” to reduce cost of received aircraft. When assets or services under such concessions are received, “Concessions for acquisitions of aircraft and engines” are transferred to assets or expenses regarding to the received item.

2.6 Liabilities Under Capital Leases Liabilities under capital leases are liabilities deriving from the purchase of aircraft under long-term capital leases with financial institutions. These are stated at the obligation values less aggregate of repayments. These leases constitute financial leases.

2.7 Revenue Recognition The Company recorded an unearned transportation revenue at net sales. In case of sale having a commission, it is recorded as an expense under marketing expenses. 2.7.1 Passenger and excess baggage revenues: - Revenue from ticket sales and service orders is recognised as revenue when the transportation is provided. For passengers using services with other airlines, the difference of selling price and billing amount is recognised as revenue when those airlines collect the bills. - Unused tickets and service orders are recognised as revenue if they are unused for over 2 years. 2.7.2 Freight revenue is recognised when the Company provides the services and issues its air waybills. For freight carried by other air carriers, the difference of selling price and billing amount is recognised as revenue when the other air carriers collect the bills. - Freight with respect to which the Company has already issued an air waybill but which is carried by other air carriers is recognised as revenue when those other air carries do not bill within 1 year. 2.7.3 Since 1993, the Company has operated a programme called “Royal Orchid Plus”, to promote its sales by offering special rights to its members. Programme under the Royal Orchid Plus allows its members to exchange accumulated mileage for a future service. The Company calculates a cost per mile by taking an average net collected fare in each zone which the member redeem awards divided by a number of miles used for redeem awards in each zone. The Company estimates the number of utilizing mileages of the members by, finding the weighted zonal redemption, which the members will use their rights in each zone, to record as a cost of Royal Orchid Plus. The estimated cost is used to reduce passenger revenues together with unearned transportation revenues (liability). Revenues are recognised when the members redeem awards. - Accumulated mileages of the members, unredeem awards, are recognised as revenues when they are over 3 years. - To accumulate and use of mileages with Star Alliance, the Company and its strategic partners will inter-billing according to an amount of accumulated mileages which members receive and according to a mileage amount which the members redeem awards regarding price per mile. This is due to the agreements of each strategic partners. Revenues are recognised when the members use their service. - The Company sells the mileages to its members in order to early exchange awards and recognises the difference between a sale price and a mileage cost as revenues. 2.7.4 Revenues from business units, technical services, customer services, ground support equipment services and cargo services, are recognised when services are provided. Revenues from catering, sales on board and Thai Shop are recognised when the products are sold. 2.7.5 Other revenues are reconised on an accrual basis.

2.8 Primary Earnings Per Share Primary earnings per share is calculated by dividing net profit for the year by the weighted average number of paid-up ordinary shares.

TG 050

Annual Report 2001/02


2.9 Foreign Currency Transactions Foreign currency transactions incurred during the year are translated into Baht at the exchange rates which are calculated from the average exchange rate of the Bank of Thailand and commercial banks in the month in which transactions occur. Assets and liabilities denominated in foreign currency remaining at the year-end are translated into Baht at commercial banks’ average buying and selling rates, as announced by the Bank of Thailand at that date. Gains or losses on currency exchange are recognised as incomes or expenses in income statements.

2.10 Staff Provident Fund On June 26, 1992 the Company established an “Employee of Thai Airways International Public Company Limited Registered Provident Fund” in accordance with the Provident Fund Act B.E. 2530. This fund is managed by a fund manager. So, it does not appear in the Company’s balance sheets. Under the fund, the Company contributes to the fund monthly at a rate of 9% of the employees’ salaries for members having not more than 20 years of service, and 10% for members having more than 20 years of service. Such contributions are recognised as expenses of the Company.

2.11 Deferred Income Tax The Company’s tax expenses or revenues consist of current period tax which is calculated in accordance with the Revenue Code and deferred tax (income tax which benefits to the Company in the future) which is calculated from the temporary differences between the net book value of the assets and its tax base to comply with the Accounting Standard No.56 effective in or after January 1, 2007. The Company early adopts such standard in the fiscal year 2002.

3. SUPPLEMENTARY INFORMATION 3.1 Effect of Change in Accounting Policy The Company calculated gains or losses on foreign currency exchange rate to pay corporate income tax for the period ended in or after July 2, 1997 according to the No. 2 (1) of Revenue Department Order No. 72/2540 dated July 24, 1997. The Company calculated gains or losses on foreign currency exchange according to the said announcement, especially a part with benefits its tax base. In this fiscal year, the Company has changed its accounting treatment on deferred tax, previously transferred only a portion utilizing for the year from retained earning, to record at a total amount in deferred tax account. The Company adjusted its retained earnings according to Note to financial statement No.2.11. Also, the Company has restated its 2001 financial statements, shown for comparative purpose, as though the Company had consistently followed the new policy. As a result, retained earnings at the beginning of the year 2002 and 2001 increased by Baht 5,381.17 million and Baht 6,434.33 million, respectively.

3.2 Determination of Short Form in Financial Statements The Company presented its financial statements in a short form in accordance with the announcement of Department of Commercial Registration B.E. 2544 dated September 14, 2001, issued according to the Section 11 Clause three of the Accounting Act B.E. 2543. The financial statements ended September 30, 2001, shown for comparative purpose, have been restated at the same criteria.

3.3 Cash and Cash Equivalents Unit : Million Baht Consolidated 2002 Cash - Domestic Cash - Abroad Bank Deposits - Domestic

11.53

The Company 2001 12.61

2002 11.53

2001 12.61

25.72

16.09

25.72

16.09

2,605.31

3,434.49

2,479.60

3,282.54

Bank Deposits - Abroad

5,086.48

3,132.83

5,086.48

3,132.83

Short - term Investments - Domestic

2,672.81

1,487.40

2,570.55

1,385.64

Short - term Investments - Abroad Less Fixed Deposits dued over 3 months Total

Thai Airways International Public Company Limited

10,347.58 (632.21) 20,117.22

1,329.93

10,347.58

1,329.93

(1,385.62)

(632.21)

(1,385.62)

8,027.73

19,889.25

7,774.02

TG 051


3.4 Current Investment On June 27, 2002, the Company received 508,937 shares in FRANCE TELECOM, listed on the Bourse de Paris and the New York Stock Exchange, from SITA. The details are as follows: Name of Company

No. of Shares

Market Value/Share

Amount

(at Bourse de Paris)

(Million)

Amount THB

September 30, 2002 FRANCE TELECOM

508,937

(Million)

EUR 6.94

Cost value

EUR 3.53

149.66

US$ 0.26

11.26

Unrealised gain on change in market valuation

138.40

(Exchange rate EUR 1:THB 42.3710 and US$ 1:THB 43.2960) The Company classified these shares as available-for-sale securities. Gain on market valuation of investment is recorded as unrealised gain on change in market valuation presented under shareholders’ equity.

3.5 Trade Account Receivables-Net Trade account receivables are classified according to their stages of delinquency, as expressed in the aging schedule below. Unit : Million Baht Consolidated

The Company

2002

2001

2002

2001

13,086.01

10,980.79

13,085.37

10,977.74

Over 6 months to 1 year

188.29

186.06

186.54

185.24

Over 1 year to 2 years

86.14

465.91

84.14

465.47

Period of overdue Not over 6 months

Over 2 years

1,186.44

519.27

1,186.08

519.27

14,546.88

12,152.03

14,542.13

12,147.72

Less Allowance for doubtful Accounts

(1,345.20)

Trade account receivables-net

13,201.68

(961.73)

(1,342.46)

(960.99)

11,190.30

13,199.67

11,186.73

3.6 Inventories and Supplies-Net Unit : Million Baht Consolidated Aircraft spare parts Vehicle spare parts and ground support equipment Slow moving aircraft spare parts and spare parts for sale

The Company

2002

2001

2002

2001

2,483.96

2,635.28

2,483.96

2,635.28

162.59

166.62

162.59

166.62

2,062.01

1,960.88

2,062.01

1,960.88

Fuel and oil for aircraft

112.20

55.13

112.20

55.13

Goods for sale

159.13

167.77

159.13

167.77

Cabin supplies

111.69

118.65

111.69

118.65

30.04

30.29

30.04

30.29

Supplies and other consumable materials Stationery and office supplies Inventories in transit Obsolete and damaged inventories for disposal Less Provision for obsoleted inventories, aircraft spare parts Total

75.49

83.91

75.49

83.91

246.50

112.82

246.50

112.82

75.12

81.08

75.12

81.08

5,518.73

5,412.43

5,518.73

5,412.43

(1,988.18)

(1,802.74)

(1,988.18)

(1,802.74)

3,530.55

3,609.69

3,530.55

3,609.69

Aircraft spare parts as at September 30, 2002 amount of Baht 2,483.96 million are depreciated at 10% of a balance at the year-end, totalled Baht 248.39 million. Slow moving aircraft spare parts over 2 years or spare parts for aircraft not represented in the fleet which are separated for sales amount of Baht 2,062.01 million are depreciated at Baht 1,458.13 million and set a provision in this fiscal year amount of Baht 206.54 million, totalling amount of Baht 1,664.67 million. Provision for obsolete inventories is Baht 75.12 million. Thus, total provision for obsolete inventories amounted to Baht 1,988.18 million.

TG 052

Annual Report 2001/02


The Company is in a process to sell its slow moving aircraft spare parts and spare parts for aircraft not represented in the fleet with a specialist in this field.

3.7 Other Current Assets Unit : Million Baht Consolidated Billing from IATA waiting for verifying

The Company

2002

2001

2002

2001

503.86

1,147.82

503.86

1,147.82

Loans to employees

24.48

54.50

24.48

54.50

Subsidiary company receivables

75.56

47.87

75.56

47.87

Accrued incomes

292.18

527.26

292.18

527.26

Value added taxes

346.33

1,712.75

346.33

1,712.75

Other receivables Total

402.48

192.26

273.36

119.67

1,644.89

3,682.46

1,515.77

3,609.87

3.8 Investments Consolidated Unit : Million Baht Percentage of Name of Company

Shareholding 2002

2001

Investments Cost method

Incomes on

Equity method

2002

2001

2002

2001

investments 2002

2001

3.8.1 Investments for using the equity method Royal Orchid Hotel (Thailand) Public Company Limited

24

24

225.00

225.00

291.05

282.79

39.31

42.85

40

40

48.00

48.00

212.91

256.38

52.53

52.39

22.6

30.7

76.79

76.79

349.88

326.71

77.23

56.72

30

30

30.00

30.00

(Market value for the year 2002 amount of Baht 675.00 Million and the year 2001 amount of Baht 562.50 million) Donmuang International Airport Hotel Company Limited Bangkok Aviation Fuel Services Public Company Limited (Market value for the year 2002 amount of Baht 622.01 million) Phuket Air Catering Company Limited Total investments for using the equity method 3.8.2

20.46

18.44

2.02

0.28

874.30

884.32

171.09

152.24

Other long-term investments stated at cost

Fuel Pipeline Transportation Limited

8.4

8.4

133.00

133.00

-

-

Aeronautical Radio of Thailand Limited

4.0

4.5

26.18

29.99

-

-

SITA Investment Certificate

-

-

38.68

44.45

-

-

TRADESIAM Company Limited

3.5

3.5

1.75

1.75

-

-

11.53

-

-

0.07

0.05

(paid 25% of authorized share capital) FRANCE TELECOM (EQUANT N.V.)

-

Other Shares

6.77

6.77

Pipeline Transportation Limited

(133.00)

(133.00)

Total other long-term investments

73.38

94.49

Less Allowance for impairment of Fuel

Thai Airways International Public Company Limited

-

-

0.07

0.05

TG 053


The Company Unit : Million Baht Percentage of Name of Company

Shareholding 2002

2001

Investments Cost method

Incomes on

Equity method

2002

2001

2002

2001

investments 2002

2001

3.8.1 Investments for using the equity method Subsidiary Companies Thai Information Solution Company Limited

100

100

125.00

125.00

102.35

101.87

0.48

1.91

55

55

8.25

8.25

152.86

124.53

36.58

63.61

255.21

226.40

37.06

65.52

(paid 25% of authorized share capital) Thai-Amadeus Southeast Asia Company Limited Total Associated Companies Royal Orchid Hotel (Thailand) Public Company Limited

24

24

225.00

225.00

291.05

282.79

39.31

42.85

40

40

48.00

48.00

212.91

256.38

52.53

52.39

22.6

30.7

76.79

76.79

349.88

326.71

77.23

56.72

30

30

30.00

30.00

20.46

18.44

2.02

0.28

(Market value for the year 2002 amount of Baht 675.00 million and the year 2001 amount of Baht 562.50 million) Donmuang International Airport Hotel Company Limited Bangkok Aviation Fuel Services Public Company Limited (Market value for the year 2002 amount of Baht 622.01 million) Phuket Air Catering Company Limited Total Total investments for using the equity method

874.30

884.32

171.09

152.24

1,129.51

1,110.72

208.15

217.76

3.8.2 Other long-term investments stated at cost Fuel Pipeline Transportation Limited

8.4

8.4

133.00

133.00

-

-

Aeronautical Radio of Thailand Limited

4.0

4.5

26.18

29.99

-

-

SITA Investment Certificate

-

-

38.68

44.45

-

-

TRADESIAM Company Limited

3.5

3.5

1.75

1.75

-

-

11.53

-

-

(paid 25% of authorized share capital) FRANCE TELECOM (EQUANT N.V.) Other Shares

6.77

6.77

0.07

0.05

Less Allowance for impairment of Fuel Pipeline Transportation Limited

(133.00)

(133.00)

Total other long-term investments

73.38

94.49

-

-

0.07

0.05

The Company does not have any authority in management and control of the associated companies except for voting rights and having a representative in board of director according to the Company’s share proportion in the associated company.

TG 054

Annual Report 2001/02


3.9 Related Transaction Parties the Company 3.9.1 Major shareholders’ Unit : Million Baht 2002

2001

Ministry of Finance Guaranteed loans Loans via the Ministry of Finance

6,528.14

10,759.47

53,398.07

47,957.55

5,200.00

5,850.00

Government Saving Bank Loans payable and promissory notes 3.9.2 Subsidiary companies Unit : Million Baht 2002

2001

Trade Name of Company

Sales

Thai-Amadeus Southeast Asia Company Limited

Account

Account

Receivables

Receivables

0.27

75.53

99.57

0.04

-

75.57

99.57

92.11

Thai Information Solution Company Limited

-

Total

Other

-

92.11

0.27

Sales

Trade

Other

Account

Account

Receivables Receivables 0.07 0.07

47.79 0.01 47.80

The policy of purchase price of goods and service between the Company and related parties is based on normal course of business at the same as other parties.

3.10 Property, Plant and Equipment-Net Consolidated Unit : Million Baht Aircraft

Deferred

Aircraft

Aircraft

Land

Buildings

Building

Other

(45 Units)

maintenance

under

spare

And

under

improvements

plant

parts

buildings

leasehold

Total

and

capital

overhaul of

leases

and

aircraft

(16 Units)

3,790.55

64,509.89

22,721.79

3,398.14

3,945.24

2,475.56

17,605.86

216,134.20

(5,896.75)

(88.09)

(1.49)

1.49

32.65

138.99

115.55

13.61

1,876.94

-

18.70

73.33

887.21

4,499.74

-

1,320.53

-

-

14.03

294.08

2,036.66

equipment

Cost As at September 30, 2001

97,687.17

- Adjust/Transfer

5,928.75

- Increased asset

348.10

- Sold

-

As at September 30, 2002 103,964.02

1,281.85 408.02 4,664.38

58,626.75

23,190.11

3,396.65

3,965.43

2,567.51

18,337.98

218,712.83

44,152.24

1,768.42

16,684.30

13,632.09

1,357.29

2,728.05

2,073.92

13,148.14

95,544.45

- Depreciation

3,609.75

738.18

2,508.71

1,835.90

89.95

287.39

175.32

1,133.93

10,379.13

- Adjust/Transfer

3,638.31

-

(3,638.31)

(78.63)

-

-

-

0.22

(78.41)

Accumulated depreciation As at September 30, 2001

- Sold

13.74

293.00

1,299.85

51,400.30

2,098.58

15,554.70

14,804.27

1,447.24

3,015.44

2,235.50

13,989.29

104,545.32

As at September 30, 2001

53,534.93

2,022.13

47,825.59

9,089.70

2,040.85

1,217.19

401.64

4,457.72

120,589.75

As at September 30, 2002

52,563.72

2,565.80

43,072.05

8,385.84

1,949.41

949.99

332.01

4,348.69

114,167.51

As at September 30, 2002

-

408.02

-

585.09

-

-

Net book value

Thai Airways International Public Company Limited

TG 055


The Company Unit : Million Baht Aircraft

Deferred

Aircraft

Aircraft

Land

Buildings

Building

Other

(45 Units)

maintenance

under

spare

And

under

improvements

plant

parts

buildings

leasehold

Total

and

capital

overhaul of

leases

and

aircraft

(16 Units)

3,790.55

64,509.89

22,721.79

3,398.14

3,945.24

2,475.56

17,553.13

216,081.47

(5,896.75)

(88.09)

(1.49)

1.49

32.65

138.99

115.55

13.61

1,876.94

-

18.70

73.33

845.90

4,458.43

-

1,320.53

-

-

14.03

294.08

2,036.66

equipment

Cost As at September 30, 2001 97,687.17 - Adjust/Transfer

5,928.75

- Increased asset

348.10

- Sold

-

As at September 30, 2002 103,964.02

1,281.85 408.02 4,664.38

58,626.75

23,190.11

3,396.65

3,965.43

2,567.51

18,243.94

218,618.79

1,768.42

16,684.30

13,632.09

1,357.29

2,728.05

2,073.92

13,140.01

95,536.32

89.95

287.39

175.32

1,118.46

10,363.66

-

-

-

0.22

(78.41)

Accumulated depreciation As at September 30, 2001 44,152.24 - Depreciation

3,609.75

738.18

2,508.71

1,835.90

- Adjust/Transfer

3,638.31

-

(3,638.31)

(78.63)

- Sold

-

13.74

293.00

1,299.85

2,098.58

15,554.70

14,804.27

1,447.24

3,015.44

2,235.50

13,965.69

104,521.72

As at September 30, 2001 53,534.93

2,022.13

47,825.59

9,089.70

2,040.85

1,217.19

401.64

4,413.12

120,545.15

As at September 30, 2002 52,563.72

2,565.80

43,072.05

8,385.84

1,949.41

949.99

332.01

4,278.25

114,097.07

As at September 30, 2002 51,400.30

408.02

-

585.09

-

-

Net book value

Forty-one aircraft are brought forward from fiscal year 2001. In fiscal year 2002, the aircraft are increased by four, one Boeing 747-400 and three Boeing 737-400 transferring from aircraft under capital leases, at a cost of Baht 2,245.02 million. There are forty-five aircraft at the year-end. Twenty aircraft under capital leases are brought forward from the fiscal year 2001. Four aircraft under capital leases have been transferred to “Aircraft Account� as the proprietary right was given to the Company, leaving the balance of sixteen aircraft at the year-end. Aircraft spare parts consist of aircraft engines of General Electric, Pratt and Whitney, Rolls-Royce and CFM International, and other aircraft spare parts. The Company still uses its buildings and equipment with the cost of Baht 24,000.98 million which are fully depreciated.

3.11 Advance Payments for Aircraft In fiscal year 2001, the Company paid advance payments in the aggregate amount of Baht 12,971.77 million for Boeing 747-400 No.15 and 16 (Baht 6,466.95 million and Baht 6,504.82 million, respectively). The Company plan to sign a financial lease with a lending institution in the near future. Until such time, the Company is financing these aircraft pursuant to a temporary operating lease.

TG 056

Annual Report 2001/02


3.12 Loan for Investment in Aircraft Spare Parts The Company has signed a technical contract in the amount of US$ 2.80 million with SR TECHNICS for the maintenance of the Company’ s MD-11 aircraft. The Company receives the interest on this loan at the rate of 6.5% per annum. The balance as at September 30, 2002 and 2001 amounted US$ 0.63 million or approximately Baht 27.45 million (exchange rate US$ 1:THB 43.2960) and US$ 0.63 million or approximately Baht 28.10 million (exchange rate US$ 1:THB 44.3276), respectively.

3.13 Deferred Income Tax The temporary differences of the net book value and its tax base are as follows : Unit : Million Baht Consolidated Contribution to staff pension funds

The Company

2002

2001

2002

2001

856.30

882.57

856.30

882.57

Allowance for obsoleted inventories

596.45

540.82

596.45

540.82

Allowance for doubtful debts

484.88

318.73

484.06

318.51

39.90

39.90

39.90

39.90

3.11

-

-

-

Allowance for impairment in value of securities Deposits Estimated accrual expenses Tax exemption from loss on foreign currency exchange Total

480.65

-

480.65

-

4,190.51

5,381.17

4,190.51

5,381.17

6,651.80

7,163.19

6,647.87

7,162.97

3.14 Other Current Liabilities Unit : Million Baht Consolidated 2002 Surcharge for war liabilities

1,289.23

Airport fees

2,339.36

The Company 2001 -

1,335.55

2002 1,289.23 2,339.36

2001 1,335.55

Deferred incomes

356.74

781.61

356.74

781.61

Taxes payable

182.28

268.78

182.28

268.78

Fringe benefits-field office staff

411.19

408.56

411.19

408.56

Other account payables

442.71

983.67

418.28

973.56

5,021.51

3,778.17

4,997.08

3,768.06

Total

3.15 Short-term Loans These are short-term loans from the Ministry of Finance in the form of European Commercial Paper (ECP) for purchasing Boeing 747-400 No.15 and 16 amount of US$ 180 million and from THAI Employees’ Saving & Credit Coops Ltd. by issuing the Company’s promissory note amount of Baht 1,700 million. The brought forward balance was Baht 9,715.53 million and repaid during the year amount of Baht 1,700 million. Also, the Company received the additional ECP loan from the Ministry of Finance amount of US$ 100 million, totalling amount of US$ 280 million or approximately Baht 12,175.24 million (exchange rate US$ 1:THB 43.483) at interest rate ranging from 1.89% to 2.02% per annum.

Thai Airways International Public Company Limited

TG 057


3.16 Long-term Loans Consolidated and the Company Unit : Million Baht Loan Currency

Loan Currency 2002

JPY

2001

23,000,000,000

-

US$

877,725,128

1,084,151,814

THB

1,350,000,000

2,423,458,900

2002 8,234.85 38,166.12

2001 48,278.04

1,350.00

2,423.45

Total Long-term loans

47,750.97

50,701.49

Less Current portion of long-term loans

10,926.10

9,794.16

Net Long-term Loans

36,824.87

40,907.33

The Company has entered into long-term loan contracts to purchase 18 aircraft. In fiscal year 2002, the total of such loans amounted to Baht 47,750.97 million, consisting of Baht 5,178.14 million in foreign loans at interest rates ranging from 2.06% to 6.02% per annum and Baht 42,572.83 million in domestic loans at interest rate ranging from 0.80% to 8.80% per annum.

3.17 Liabilities Under Capital Leases Consolidated and the Company Unit : Million Baht Loan Currency

Loan Currency 2002

2001

2002

43,059,088,768

53,597,560,069

15,416.74

20,084.13

US$

636,672,909

766,578,116

27,684.45

34,136.26

EUR

8,195,352

12,918,398

351.58

528.04

43,452.77

54,748.43

8,651.93

9,926.81

34,800.84

44,821.62

JPY

Present value of liabilities under capital leases Less Current portion of long-term loans Net Long-term Loans

2001

For certain of its aircraft, the Company has capital leases with buyout options, with 11 foreign financial institutions. The accounting policy for recording aircraft under capital leases is described in Note 2.6. In fiscal year 2002, the Company had outstanding obligations totalling Baht 49,108.59 million under capital leases for 16 aircraft with maturities ranging from 2002 to 2012. After deducting interest due (Baht 5,655.82 million), the present value of obligations under the Company’s capital leases was Baht 43,452.77 million.

3.18 Promissory Notes The Company is loaned from Government Saving Bank and THAI Employees’ Saving & Credit Coops Ltd. by issuing promissory notes with floating interest rate computed by using an interest rate of six-month fixed deposit of Government Saving Bank plus the interest ranging from 2.9% to 3.0% per annum. Such issuances are to compensate the payment of aircraft B747-400 No.14 and aircraft A330-300 No.12. The brought forward balance was Baht 9,450.00 million and repaid during the year amounted to Baht 1,050.00 million, leaving the balance amount of Baht 8,400.00 million (loaned from Government Saving Bank amount of Baht 5,200.00 million and THAI Employees’ Saving & Credit Coops Ltd. amount of Baht 3,200.00 million). As at September 30, 2002, these promissory notes are transferred to current portion of long-term loans in the amount of Baht 1,050.00 million, leaving the long-term liabilities balance at Baht 7,350.00 million.

TG 058

Annual Report 2001/02


3.19 Share Capital According to the Resolution of Extraordinary Shareholders’ Meeting No. 1/2543 held on October 25, 2000, the Company is approved to decrease and increase its authorized share capital. On December 12, 2000, the Company decreased its registered but unissued share capital of 200 million shares at Baht 10 per share, an aggregate of Baht 2,000 million. And on December 13, 2000, the Company registered to increase its share capital of 300 million shares at Baht 10 per share, an aggregate of Baht 3,000 million. The Company also cancelled its common shares offering according to the Resolution of Extraordinary Shareholders’ Meeting No.1/2543 and approved to increase its new common shares to public offering according to the Resolution of Extraordinary Shares’ Meeting No.1/2545 held on August 30, 2002. As at September 30, 2002, the total value of the Company’s authorized share capital was Baht 17,000 million.

3.20 Legal Reserve At the end of fiscal year 2001, the Company’s legal reserve balance amounted to Baht 1,032.78 million. Provision in this fiscal year amounted to Baht 509.10 million, 5% of net profit for the year, a total balance at the year-end amount of Baht 1,541.88 million.

3.21 Accrued Dividends Dividends accrued by the Company as at September 30, 2002 and 2001, totalling Baht 26.87 million and Baht 26.92 million respectively, are dividends for which certain shareholders have not yet cashed their checks and dividends of certain shareholders whom the registrar cannot contact.

3.22 Segment Information the Company 3.22.1 Business segments Unit : Million Baht Revenues

Expenses

Profit(Loss)

2002

2001

2002

2001

2002

2001

122,905.50

122,417.23

106,792.45

113,314.63

16,113.05

9,102.60

Technical services

953.47

1,151.72

145.96

233.39

807.51

918.33

Customer services

919.40

1,004.77

762.30

758.76

157.10

246.01

Ground support equipment services

1,003.07

1,139.31

862.75

857.26

140.32

282.05

Cargo and mail commercial

1,098.75

1,130.94

922.33

912.87

176.42

218.07

Catering

1,643.59

1,745.93

520.26

637.79

1,123.33

1,108.14

212.08

275.98

147.56

89.21

64.52

186.77

-

-

0.02

0.02

Air transportation activity Business units

Other activities Pension fund Operating profit

(0.02)

(0.02)

18,582.23

12,061.95

208.15

217.76

Share of net profit from subsidiary and associated companies Interest expenses-net

(5,457.62)

(7,155.28)

Gain(loss) on foreign currency exchange

2,410.30

(3,913.01)

Other incomes(expenses)

(1,395.97)

1,549.29

Income taxes

(4,165.17)

(832.19)

Net profit

10,181.92

1,928.52

Thai Airways International Public Company Limited

TG 059


3.22.2 Geographical segments Unit : Million Baht 2002

2001

Domestic Revenues Transportation activities Business units Other activities

12,216.50

12,255.88

5,618.28

6,172.67

212.08

275.98

18,046.86

18,704.53

Regional Asia

61,017.36

61,999.20

Europe

34,447.18

31,772.45

4,884.85

6,521.56

Total domestic revenues Foreign Transportation Revenues

North Pacific Australia & New Zealand Total foreign transportation revenues Charter revenues and others Total

9,312.79

8,291.39

109,662.18

108,584.60

1,026.82

1,576.75

128,735.86

128,865.88

3.23 Other Incomes Unit : Million Baht Consolidated

The Company

2002

2001

2002

2001

Revenue from insurance compensation

53.06

51.96

53.06

51.96

Gains on sales of assets

68.25

216.12

68.25

216.12

0.07

0.05

0.07

0.05

Revenue from investments Dividend from current investments

15.62

-

15.62

-

Other incomes

37.87

537.02

37.28

535.66

174.87

805.15

174.28

803.79

Total

3.24 Other Expenses Unit : Million Baht Consolidated 2002

The Company 2001

2002

2001

Bad and doubtful debts

551.84

323.18

551.84

322.44

Credit card fees

242.46

244.35

242.46

244.35

89.98

104.31

89.98

104.31

Compensation to customers for Damages Expenses for grounded aircraft Compensation to early retired staff Compensation to an obligation of staff pension fund Other expenses Total

-

1.36

-

1.36

518.34

-

518.34

-

95.12

56.76

95.12

56.76

26.95

95.46

25.22

95.46

1,524.69

825.42

1,522.96

824.68

3.25 Lease and obligation The Company signed operating leases with foreign companies for 18 aircraft with lease terms of 10-11 years. The Company’s aggregate repayment obligations under the terms of these amount to US$ 1,192.06 million or approximately Baht 51,834.20 million(exchange rate US$ 1:THB 43.483).

TG 060

Annual Report 2001/02


3.26 Staff Pension Fund Consolidated and the Company The Company has established its staff pension fund by contributing 10% of its employees’ salaries to the fund each month. The fund’s assets, liabilities and balance are presented in the Company’s balance sheet. Interest and expenses arising from fund operations are recognised as incomes and expenses of the Company. The details are as follows: Unit : Million Baht 2002 Cash and cash equivalents Short-term investments Fixed assets Other current assets Total assets Other current liabilities Pension fund Total Liabilities

2001

776.19

1,965.49

2,570.55

1,385.63

0.03

0.05

22.27

14.54

3,369.04

3,365.71

11.43

15.64

3,452.72

3,406.83

3,464.15

3,422.47

As at September 30, 2002, the fund balance was Baht 3,452.72 million, which equals the Company’s obligation to its staff under the fund. In this fiscal year, the Company contributes to the fund at the rate of 10% amount of Baht 218.71 million plus an obligation amount of Baht 95.12 million, totalling amount of Baht 313.83 million.

3.27 Staff Provident Fund In this fiscal year, the Company contributes to the provident fund at the rate of 9% for the members having not more than 20 years of services and 10% for the members having more than 20 years of services amount of Baht 625.53 million.

3.28 Contingent Liabilities The Company has contingent liabilities resulting from the following commitments: Unit : Million Baht The Company 2002

2001

The Company as defendant in Labour dispute cases

37.42

28.22

Damage claims cases

447.81

603.94

Cases relating to aircraft accident which are included in the insurance company’s liabilities at Thibavan, Nepal, in 1992 Total

-

83.01

485.23

715.17

In fiscal year 2002, the case relating to aircraft accident at Nepal in 1992 is finished. The insurers had paid compensation to all claimers therefore the Company has no obligation to such case.

Thai Airways International Public Company Limited

TG 061


3.29 Disclosure of Financial Instrument The Company 3.29.1 Interest rate risk Interest rate risk in financial statements arises from changes in market interest rates which have an effect on the Company’s operating result at the present and in the future. The following tables show weighted average interest rates and the amount of financial liabilities. Unit : Million Baht 2002 Weighted Financial Liabilities

Loan Balance recording to

Average

Loan Balance recording to

Floating Interest Rate

Fixed Interest Rate

Total

Interest Rate

Less than 1 year

Over 1 year

Less than 1 year

Over 1 year

5.45

14,840.61

10,790.04

13,398.60

38,996.56

78,025.81

JPY

1.08

922.91

8,600.27

2,035.15

12,093.27

23,651.60

EUR

5.97

-

256.01

95.57

351.58

THB

5.49

300.00

1,050.00

9,750.00

Classified according to currencies US$

-

1,050.00

7,350.00

Unit : Million Baht 2001 Financial Liabilities

Weighted

Loan Balance recording to

Loan Balance recording to

Average

Floating Interest Rate

Fixed Interest Rate

Total

Interest Rate

Less than 1 year

Over 1 year

Less than 1 year

Over 1 year

US$

6.26

10,702.12

13,779.61

12,092.34

53,855.76

90,429.83

JPY

1.23

964.53

9,966.94

2,984.45

6,168.21

20,084.13

FRF

5.72

THB

6.37

Classified according to currencies

-

-

2,750.00

8,400.00

193.06

334.99

528.05

800.00

1,623.46

13,573.46

3.29.2 Exchange Rate Risk A fluctuation in exchange rate has an effect on long-term liability and operating expense which are in the form of foreign currencies. The hedging policy of the Company is to hold foreign currencies receiving from foreign currency revenues in a proportion to such foreign currency expenses. In addition, the Company holds surplus cash in major foreign currency which is stable and important to the Company’s operation in order to reduce its risk from a fluctuation of exchange rate. Unit : Million Baht Foreign Currency Liabilities 2002 Currency

Maturity within

2001 Maturity over

Maturity within

Maturity over

1 year

1 year

1 year

1 year

US$

28,239.21

49,786.60

22,794.46

67,635.37

JPY

3,948.98

16,135.15

2,958.06

20,693.54

EUR

256.01

95.57

-

-

FRF

-

-

193.06

334.99

3.29.3 Fuel Price Risk The fluctuation in fuel price, depend on supplies and demands of fuel in the world market including a political situation in other countries, has a direct effect on the Company’s operation because the aviation fuel is a major material for aviation transport. To hedge the expense from fuel price fluctuation, the Company engages in an agreement with the foreign supplies where the Company has a lot of fuel demands in order to insure the fuel demand in case of a lack of aviation fuel.

TG 062

Annual Report 2001/02


3.29.4 Fair Value Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties with freedom to bargain and having no relation. The following table presents the year-end balance in financial statements and an estimate of fair value of financial assets and liabilities as at September 30, 2002 and 2001. Unit : Million Baht The Company September 30, 2002

September 30, 2001

Balance

Fair Value

Balance

Fair Value

19,889.25

19,889.25

7,774.02

7,774.02

632.21

632.21

1,385.62

1,385.62

Financial Assets Cash and bank balance Fixed deposits dued over 3 months Current investments Other investments Trade account receivables

149.66

149.66

1,202.89

1,858.97

1,205.21

-

1,484.92

-

13,199.67

13,199.67

11,186.73

11,186.73

Financial Liabilities Trade account payables Loans Accrued expenses

3,869.34

3,869.34

3,080.27

3,080.27

111,778.99

111,778.99

124,615.46

124,615.46

12,803.67

12,803.67

12,143.97

12,143.97

Method and assumption that the Company uses to estimate a fair value of assets and liabilities are as follows: Cash and bank balance, short-term investments, account payables, loans, and accrued expenses are stated at fair value by estimating according to an amount in the balance sheet. Current investments are stated at fair value according to a market value. Other investments are stated at fair value by estimating from a net book value after net off impairment. For investments in marketable equity securities, they are stated at fair value according to a market value. Trade account receivables are stated at fair value from a net balance of account receivables after net off allowance for doubtful accounts.

3.30 Event after Financial Date On October 11, 2002, the Resolution of Extraordinary Shareholders’ Meeting No. 2/2545 approved the Company to provide two long-range aircraft amount of US$ 359.80 million or approximately Baht 15,202 million and one medium-range aircraft amount of US$ 162.70 million or approximately Baht 6,874.00 million, totalling US$ 522.50 million or approximately Baht 22,076.00 million (exchange rate US$ 1 : THB 42.25) according to the Company’s Corporate Plan for the year 2000/01 - 2004/05. The Company has hired consultants of finance, law and accounting in order to increase its share capital amount of Baht 78.15 million in accordance with the Resolution of Extraordinary Shareholders’ Meeting No.1/2545 held on August 30, 2002 (Note to financial statement No.3.19).

Thai Airways International Public Company Limited

TG 063


Thai Airways International Public Company Limited

Board of Directors As at September 30, 2002

TG 064

Mr. Thanong Bidaya

Mr. Srisook Chandrangsu

Mr. Somchainuk Engtrakul

Chairman Education - Ph.D., in Management, Northwestern University, Evanston, Illinois, U.S.A. Experience - President, Thai Military Bank Public Company Limited - Minister, Ministry of Finance Present Positions - Vice Chairman, Council of Economic Advisors to the Prime Minister - Chairman, National Economic and Social Development Board - Thailand Trade Representative

Vice Chairman Education - Ohio State University, Ph.D., Transportation Systems Planning. U.S.A. Experience - Director-General, Department of Aviation Ministry of Transport and Communications - Director-General, Department of Highways Ministry of Transport and Communications Present Positions - Permanent Secretary, MOTC - Chairman Board of Directors, Airports of Thailand Public Company Limited - Chairman Board of Derectors, New Bangkok International Airport Company Limited.

Vice Chairman Education - B.A. Economics, Upsala College, New Jersey, U.S.A. Experience - Director General, The Revenue Department, Ministry of Finance - Director General, The Customs Department, Ministry of Finance Present Positions - Permanent Secretary, Ministry of Finance - Chairman of the Board of Directors of the Government Lottery Office - Chairman of the Board of Directors of the Government Savings Bank

Mr. Vichit Suraphongchai

Mr. Viroj Nualkhair

Mr. Wissanu Krea-ngam

Director Education - Ph.D., Graduate School of Management, UC.A, U.S.A. Experience - Outsider Expert, Performance Agreement Committee (PAC) - Honorary Member, The National Education Commission Present Positions - Director and Chairman of the Executive Committee, The Siam Commercial Bank Public Company Limited

Director Education - M.B.A. University of Wisconsin, U.S.A. Experience - Chairman, Merrill Lynch Phatra Securities Co.,Ltd. - Director, Government Savings Bank Present Positions - President, Krung Thai Bank Public Company Limited

Director Education - LL.B. (1st class honors) - LL.M., J.S.D. University of California, Berkeley, U.S.A. Experience - Deputy Secretary-General to the Cabinet, The Secretariat of the Cabinet - Senator Present Positions - Secretary-General to the Cabinet, The Secretariat of the Cabinet

Annual Report 2001/02


Mr. Chai-anan Samudavanija

Mr. Chartsiri Sophonpanich

ACM Terdsak Sujjaruk

Mr. Borwornsak Uwanno

Director Education - M.A. Ph.D., Political Science University of Wisconsin, U.S.A. Experience - Vice President, The Royal Institute - Member, National Education Committee Present Positions - Director, Vajiravudh College

Director Education - Master’s Degree in Management, Sloan School of Management, Mit, Cambridge, Massachusetts, U.S.A. - Master’s Degree in Chemical Engineering, Massachusetts Institute of Technology, Cambridge, Massachusetts, U.S.A. Experience - Senior Executive Vice President, Bangkok Bank Public Company Limited Present Positions - President, Bangkok Bank Public Company Limited

Director Education - Batchelor of Science, Royal Thai Air Force Academy, RTAF - The National Defence College Course Experience - Assistant Royal Thai Air Force Comptroller - Deputy Royal Thai Air Force Comptroller - Royal Thai Air Force Comptroller - Chief of The Air Staff, Royal Thai Air Force - Deputy Commander-in-Chief, Royal Thai Air Force Present Positions - President, Airports of Thailand Public Company Limited

Director Education - Docteur de 3 e cycle (Droit Public General) (mention tres bien) Universite de Paris X (Nanterre) Experience - Dean of the Faculty of Law, Chulalongkorn University Present Positions - Secretary General of King Prajadhipok’s Institute - Chairman of the Legal Commission to the President of the Senator - Chairman of Princess Maha Chakri Sirindhorn Anthropology Centre

Khunying Sasima Srivikorn

Pol. Gen. Sant Sarutanond

Mr. Olarn Chaipravat

Mr. Kanok Abhiradee

Director Education - Master of Public Administration (M.P.A.) from Harward University, U.S.A. Experience - President of The Youth for Youth Aid Program, Ruamchit Nomklao Foundation for Youngsters - President, Harward Club of Thailand Present Positions - Chairman of the Board, Golden Land Property Development Public Company Limited - Chairman, Thailand Carpet Manufacturing Public Company Limited

Director Education - Police Cadet Academy Experience - Deputy Director-General - Deputy Commissioner-General - Commissioner-General of the Royal Thai Police Present Positions - Commissioner-General of the Royal Thai Police

Director Education - Ph.D., Economics Massachusetts Institute of Technology, U.S.A. Experience - President, The Siam Commercial Bank Public Company Limited Present Positions - Advisor to Management Board, The Siam Commercial Bank Public Company Limited - Council Chairman, Shinawatra University - Honorable Advisor to Minister of Finance

Director and Secretary Education - B.Sc. in Marketing, University of Louisville, Kentucky, U.S.A. Experience - President, Osothsapha Group of Companies - Chairman, Green Trend Company Limited - Chief Executive Officer, ThaiTradeX Company Limited - President, Small Industry Finance Corporation Present Positions - President, Thai Airways International Public Company Limited

Thai Airways International Public Company Limited

TG 065


Thai Airways International Public Company Limited

Detail of Shareholders and Board of Directors

Board of Directors

TG 066

Number

No. of

No. of

Annual Welfare

of Shares

Meetings

Attendance

Fee (Baht)

-

19

14

139,208.34

1. Mr. Thanong Bidaya

Chairman

2. Mr. Srisook Chandrangsu

Vice Chairman

100

19

17

142,799.06

3. Mr. Somchainuk Engtrakul

Vice Chairman

-

19

14

142,799.06

4. Mr. Virabongsa Ramangkura

Former Chairman

-

11

10

95,665.32

5. Mr. Chai-anan Samudavanija

Director

-

19

18

130,000.00

6. Mr. Chartsiri Sophonpanich

Director

-

19

13

130,000.00

7. ACM Terdsak Sujjaruk

Director

-

19

17

128,602.15

8. Mr. Borwornsak Uwanno

Director

-

19

19

128,602.15

9. Mr. Vichit Suraphongchai

Director

-

19

17

128,602.15

10. Mr. Viroj Nualkhair

Director

-

19

11

96,451.61

11. Mr. Wissanu Krea-ngam

Director

100

19

18

130,000.00

12. Khunying Sasima Srivikorn

Director

-

19

14

128,602.15

13. Pol. Gen. Sant Sarutanond

Director

-

19

14

128,602.15

14. Mr. Olarn Chaipravat

Director

-

19

14

128,602.15

15. Mr. Kanok Abhiradee

Director and Secretary

-

8

8

44,381.72

Annual Report 2001/02


General Information Company Name

Thai Airways International Public Company Limited

Business

Aviation Transportation Services and other related services

Head Office

89 Vibhavadi Rangsit Road, Ladyao, Chatuchak, Bangkok 10900

Registered Number

PLC 422

Homepage

www.thaiairways.com

Telephone

66 (0) 2513-0121

Facsimile

66 (0) 2513-0203

List of affiliated companies in which the Company’s Shareholding exceeded 10% Company Names

Business Type

Number of

Percent

share owned

of Interest

Ordinary

50,000,000

100

Ordinary

825,000

55

Hotel and restaurant

Ordinary

480,000

40

Airlines Catering

Ordinary

300,000

30

Hotel and restaurant

Ordinary

22,500,000

24

Aviation Fuel Services

Ordinary

7,679,100

22.6

Thai Information Solution Company Limited

Information

89 Vibhavadi Rangsit Road,

Technology Services

Share Type

Ladyao, Chatuchak, Bangkok 10900 Tel. 66 (0) 2545-1492 Thai-Amadeus Southeast Asia Company Limited

On-line ticketing

89 Vibhavadi Rangsit Road,

Services and other

Ladyao, Chatuchak, Bangkok 10900

travelling services

Tel. 66 (0) 2545-3333

to agents

Fax. 66 (0) 2545-3857 Donmuang International Airport Hotel Company Limited 333 Chert Wudthakas Road, Don Muang, Bangkok 10210 Tel. 66 (0) 2566-1020-1 Fax. 66 (0) 2566-1941 Phuket Air Catering Company Limited 10/3 Moo 6 Sanambin Road Tambon Mai Khao, Amphoe Thalang Phuket Tel. 66 (0)-7632-7497-606 Fax. 66 (0)-7632-7123-4 Royal Orchid Hotel (Thailand) Public Company Limited 2 Captain Bush Lane, Charoen Krung Road, Siphya Bang Rak, Bangkok 10500 Tel. 66 (0) 266-0123 Fax. 66 (0) 2236-6646 Bangkok Aviation Fuel Services Public Company Limited 171/2 Moo 10 Vibhavadi Rangsit Road, Sikan, Don Muang, Bangkok 10210 Tel. 66 (0) 2565-3811-8 Fax. 66 (0) 2565-3825

References Securities Registrar

Thailand Securities Depository Company Limited 62 Rachadaphisek Road, Khlong Toei, Bangkok 10110 Tel. 66 (0) 2229-2800

Auditor

Office of the Auditor General of Thailand Soi Aree Samphan, Samsen Nai, Phaya Thai, Bangkok 10400 Tel. 66 (0) 2273-9025-6

Thai Airways International Public Company Limited

TG 067


Thai Airways International Public Company Limited

Management Team As at September 30, 2002

Mr. Kanok Abhiradee President Mr. Bhisit Kuslasayanon Company’s Advisor Mr. Kobchai Srivilas Executive Vice President Technical Department Mr. Tasnai Sudasna Na Ayudhaya Executive Vice President Commercial Department and Acting Vice President Inflight Products and Services Department Sqn. Ldr. Udomchai Nandamanop Executive Vice President Operations Department Mr. Kaweepan Raungpaka Executive Vice President Finance and Accounting Department Mr. Suthep Suebsantiwongse Executive Vice President Human Resources and General Administration Department M.R. Supadis Diskul Executive Vice President Corporate Development and Support Department ACM Narongsak Sangapong Executive Vice President Special Project Department Mr. Prajak Jamrusmechoti Executive Vice President Special Project Department Flg. Off. Chinawut Naressaenee Senior Vice President Standards and Safety Assurance Department Mr. Veravat Chotiros Senior Vice President Coporate Planning and Government Relations Department

TG 068

Mr. Chanchai Singtoroj Vice President Marketing Planning Department

Mrs. Sangngun Pornpaiboonstid Vice President Corporate Planning Department

Mr. Vasing Kittikul Vice President Sales and Distribution Department and Acting Vice President Marketing Development and Support Department

Mr. Doosdee Smuthkochorn Vice President Government Relations Department

Flg. Off. Apinan Sumanaseni Vice President Flight Operations Department Flg. Off. Veerachai Sripa Vice President Aviation Personnel Development Department Sqn. Ldr. Narong Kanjanaviroj Vice President Operations Support Department Wg. Cdr. Supachai Limpisvasti Vice President Heavy Maintenance Services Department Mr. Narong Thanupant Vice President Line and Light Maintenance Services Department Mrs. Ngamnit Sombutpibool Vice President Comptroller Department Mrs. Arunee Phinyawat Vice President Corporate Finance Department Mrs. Chamarie Chitwattanagorn Vice President Human Resources Department Mr. Apichart Danaivan Vice President General Administration Department

Mr. Prasert Khlongwathanakith Vice President Risk Management/Business Units Support Department Mrs. Sumalee Nakorntap Vice President Information Technology Services Department Mr. Kawin Asawachatroj Managing Director Cargo and Mail Commercial Department Mrs. Rhatchaya Pamon-montri Managing Director Customer Services Department Flg. Off. Pethai Boonyaves Managing Director Ground Support Equipment Services Department Mrs. Pismai Chandrubeksa Managing Director Catering Department Mr. Tummasak Chutiwong Vice President Crisis Management and Information Center Department Mr. Chokchai Panyayong Vice President Project Development Department Flt. Lt. Sukasem Nuangwang Vice President Special Project Department

Annual Report 2001/02


Thai On-line Offices

ATHENS, GREECE 32 EL. VENIZELOU STR 166 75 GLYFADA ATHENS, GREECE

e-mail : anon.j@thaiairways.gr TKT/RSVN : (30-10) 9692-022 FAX : (30-10) 9602-686

KATHMANDU, NEPAL ANNA PURNA ARCADE DURBAR MARG, KATHMANDU, NEPAL

e-mail TKT RSVN FAX

: : : :

thai@ntc.net.np (977-1) 223-565 (977-1) 221-247 (977-1) 225-084

SINGAPORE 100 CECIL STREET THE GLOBE 069532 SINGAPORE

e-mail TKT RSVN FAX

AUCKLAND, NEW ZEALAND 22 FANSHAWE STREET KPMG LEGAL BUILDING AUCKLAND, NEW ZEALAND

e-mail : aklaa@thaiair.co.nz TKT/RSVN : (64-9) 377-3886 FAX : (64-9) 379-8597

KUALA LUMPUR, MALAYSIA WISMA GOLDHILL 67 JALAN RAJA CHULAN 50200 KUALA LUMPUR, MALAYSIA

e-mail TKT RSVN FAX

: : : :

thai@po.jaring.my (60-3) 2031-1913 (60-3) 2031-2900 (60-3) 2032-5805

STOCKHOLM, SWEDEN KUNGSGATAN 66, S-111 81 STOCKHOLM, SWEDEN

e-mail : management@thaiairways.se TKT/RSVN : (46-08) 5988-3600 FAX : (46-08) 5988-3690

SYDNEY, AUSTRALIA 75-77 PITT STREET, SYDNEY NEW SOUTH WALES 2000 AUSTRALIA

e-mail TKT FAX RSVN FAX

BANDAR SERI BEGAWAN, BRUNEI e-mail : thaiair@brunet.bn KOMPLEKS JALAN SULTAN TKT/RSVN : (673-2) 242-992 51-55 JALAN SULTAN, FAX : (673-2) 242-871 BANDAR SERI BEGAWAN, NEGARA BS 8811, BRUNEI DARUSSALAM BEIJING, THE PEOPLE’S REPUBLIC OF CHINA BEIJING LUFTHANSA CENTER S 102 B e-mail : bjstg@95777.com NO.50 LIANG MA QIAO ROAD TKT/RSVN : (86-10) 6460-8899 BEIJING 100016 FAX : (86-10) 6460-6990 THE PEOPLE’S REPUBLIC OF CHINA BRISBANE, AUSTRALIA e-mail LEVEL4, 145 EAGLE STREET, BRISBANE TEL QUEENSLAND 4000, AUSTRALIA FAX KOLKATA, INDIA CRESCENT TOWERS 229 A.J.C.BOSE ROAD CALCUTTA 700020, INDIA

: petercullen@thaiairways.com.au : (61-7) 3215-4700 : (61-7) 3215-4737

e-mail : TEL : TKT/RSVN : FAX :

tgsales@vsnl.com (91-33) 287-0276 (91-33) 280-1630-35 (91-33) 287-0277

CHENGDU, THE PEOPLE’S REPUBLIC OF CHINA SICHUAN HOTEL, TKT/RSVN : (86-28) 8675-5555 ext. 7126-28 31 ZONG FU STREET, CHENGDU FAX : (86-28) 8678-1048 SICHUAN 610016, THE PEOPLE’S REPUBLIC OF CHINA COLOMBO, SRI LANKA JAIC HILTON TOWER 200 UNION PLACE COLOMBO 2, SRI LANKA

e-mail : cmbaatg@mega.lk TKT/RSVN : (94-1) 307-100-8 FAX : (94-1) 307-109

COPENHAGEN, DENMARK RAADHUSPLADSEN 16 DK-1550, COPENHAGEN V DENMARK

e-mail : bv@thaiairways.dk TKT/RSVN : (45-33) 750-120 FAX : (45-33) 750-180

DANANG, SOCIAL REPUBLIC OF VIETNAM DANANG INTERNATIONAL AIRPORT, e-mail : dadkktg.thaiairways@dng.vnn.vn DANANG TKT/RSVN : (84-511) 656-060 SOCIALIST REPUBLIC OF VIETNAM FAX : (84-511) 656-062 DELHI, INDIA THE AMERICAN PLAZA, HOTEL PARKROYAL, NEHRU PLACE, NEW DELHI 110019, INDIA

e-mail : delaltgl@vsnl.net TKT/RSVN : (011) 623-9988 FAX : (011) 623-9149

DENPASAR, INDONESIA THE GRAND BALI BEACH HOTEL HANG TUAH STREET, SANUR, BALI, INDONESIA

e-mail : dpsadtg@thaiairways.co.id TKT/RSVN : (62-361) 288-141 FAX : (62-361) 288-063

DHAKA, BANGLADESH BSL COMPLEX, MINTO ROAD DHAKA 1000, BANGLADESH

e-mail : thaiair@bol-online.com TKT/RSVN : (880-2) 831-4711-18 FAX : (880-2) 832-2353

DUBAI, U.A.E. NO.1 BU HALEEBA PLAZA MURAGGABAT ROAD, DEIRA P.O.BOX 13142, DUBAI, U.A.E.

e-mail : dxbaatg@emirates.net.ae TKT/RSVN : (971-4) 268-1701 FAX : (971-4) 266-5498

FRANKFURT, GERMANY ZEIL 127 60313 FRANKFURT GERMANY

e-mail TKT RSVN FAX

FUKUOKA, JAPAN HINODE BUILDING 15-1, TENJIN, CHUO-KU FUKUOKA, 810-0001 JAPAN

e-mail : waravan@thaiair.co.jp TKT/RSVN : (81-92) 734-6409 FAX : (81-92) 734-9480

: : : :

GUANGZHOU, THE PEOPLE’S REPUBLIC OF CHINA GARDEN HOTEL e-mail : 368 HUANSHI DONG RU, TEL : GUANGZHOU 510064 TKT/RSVN : THE PEOPLE’S REPUBLIC OF CHINA FAX : HANOI, VIETNAM 44 LY THUONG KIET STREET, HANOI SOCIALIST REPUBLIC OF VIETNAM HO CHI MINH CITY, VIETNAM 65 NGUYEN DU STREET, DISTRICT 1 HO CHI MINH CITY, SOCIALIST REPUBLIC OF VIETNAM HONGKONG 15-B, UNITED CENTRE QUEENSWAY, HONGKONG

sakchai.s@thai-airways.de (49-69) 9287-4446 (49-69) 9287-4444 (49-69) 9287-4222

thaican@pub.guangzhou.gd.cn (86-20) 8335-6699 (86-20) 8382-4333 (86-20) 8382-3963

e-mail : tghanoi@hn.vnn.vn TKT/RSVN : (84-4) 826-7921-22 FAX : (84-4) 826-7394 e-mail : thaiairways.aa@hcm.vnn.vn TKT/RSVN : (84-8) 829-2809 FAX : (84-8) 822-3465 e-mail TKT FAX RSVN FAX

: : : : :

hkgaa@thaiairways.com.hk (852) 2876-6899 (852) 2735-8551 (852) 2876-6888 (852) 2865-6037

JAKARTA, INDONESIA GROUND FLOOR, BDN BUILDING JL.M.H. THAMRIN NO.5 JAKARTA 10340, INDONESIA

e-mail RSVN TKT FAX

: : : :

jktaatg@thaiairways.co.id (62-21) 230-2551 (62-21) 230-2552 (62-21) 330-792

KAOHSIUNG, TAIWAN NO.282, CHUNG-HUA ROAD KAOHSIUNG, TAIWAN, R.O.C.

e-mail : thaikhh@ms23.hinet.net TKT/RSVN : (886-7) 215-5871 FAX : (886-7) 251-4081

KARACHI, PAKISTAN HOTEL METROPOLE, CLUB ROAD KARACHI, PAKISTAN

e-mail : khiaatg@cyber.net.pk TKT/RSVN : (92-21) 566-0568 FAX : (92-21) 568-1513

KUNMING, THE PEOPLE’S REPUBLIC OF CHINA KING WORLD HOTEL TKT / HF : (86-871) 351-1515 98 BEIJING ROAD, KUNMING 650011 RSVN : (86-871) 316-7351 THE PEOPLE’S REPUBLIC OF CHINA FAX : (86-871) 316-7351

: : : :

: : : : :

sinaa@thaiairways.com.sg (65) 6224-2024 (65) 6224-9977 (65) 6223-9005

sydaa@thaiairways.com.au (61-2) 9844-0929 (61-2) 9844-0936 (61-2) 9844-0999 (61-2) 9251-1106

LAHORE, PAKISTAN ALLAMA IQBAL INTERNATIONAL AIRPORT LAHORE, PAKISTAN

e-mail : TEL : TKT/RSVN : FAX :

lhekktg@lhr.comsats.net.pk (92-42) 667-4613-15 (92-42) 630-9791, 637-3377 (92-42) 636-8690

TAIPEI, TAIWAN CHIEN KUO NORTH ROAD, SEC.1 TAIPEI, TAIWAN

e-mail : TKT/RSVN : FAX : :

LONDON, UNITED KINGDOM 41 ALBERMARLE STREET LONDON, WIS 4BF UNITED KINGDOM

e-mail TKT RSVN FAX

: : : :

lonaatg@aol.com (44-20) 7491-7953 (44-870) 606-0911 (44-20) 7409-1463

TOKYO, JAPAN 1-5, YURAKU-CHO, 1-CHOME, CHIYODA-KU TOKYO 100-0006, JAPAN

e-mail : tyoaatg@thaiair.co.jp TKT/RSVN : (81-3) 3503-3311 FAX : (81-3) 3503-3323

LOS ANGELES, U.S.A. 222 NORTH SEPUL VEDA BLVD., SUITE 1950 EL SEGUNDO, CA 90245, U.S.A.

e-mail RSVN FAX

: laxaatg@earthlink.net : (1-310) 640-0097 ext. 257 : (1-310) 322-8728

VIENTIANE, LAOS M&N BUILDING LUANGPRABANG ROAD KHOUNTA THONG, VIENTIANE LAO PEOPLE’S DEMOCRATIC REPUBLIC

e-mail : thaivte@laotel.com (AREA CODE) : (007-856-21) TKT/RSVN : 222-527-9 FAX : 216-143, 219-563

MADRID, SPAIN PRINCIPE DE VERGARA, 1851 28002 MADRID, SPAIN

e-mail : madaa@thaiairways.es TKT/RSVN : (34-91) 782-0525 FAX : (34-91) 564-5620

e-mail : thaiair.rgn@mptmail.net.mm TKT/RSVN : (95-1) 255-499 FAX : (95-1) 255-490

MANILA, PHILIPPINES COUNTRY SPACE 1 BUILDING SEN GIL J.PUYAT AVENUE MAKATI CITY, PHILIPPINES

e-mail TKT RSVN FAX

YANGON, UNION OF MYANMAR 1101 SAKURA TOWER 339 BOGYOKE AUNG SAN STREET KYAUKTADA TOWNSHIP 11182 YANGON, MYANMAR

MELBOURNE, AUSTRALIA 250 COLLINS STREET, MELBOURNE, VICTORIA 3000, AUSTRALIA

e-mail : jesada@thaiairways.com.au TKT/RSVN : (61-3) 8662-2200 FAX : (61-3) 9650-7003

ZURICH, SWITZERLAND BAHNHOF STRASSE 67/SIHLSTR 1 8023 ZURICH, SWITZERLAND

e-mail : administration@thaiair.ch TKT/RSVN : (41-1) 215-6500 FAX : (41-1) 212-3408

MUMBAI, INDIA MAKER CHAMBERS - IV, GROUND FLOOR, NARIMAN POINT, MUMBAI 400021, INDIA

e-mail : bomadtg@vsnl.net TKT/RSVN : (91-22) 237-3737 FAX : (91-22) 237-3738

MUNICH, GERMANY MODULE B, ROOM B4355A 85356 MUNICH AIRPORT, GERMANY

e-mail : muckktg@i-dial.de TKT/RSVN : (49-89) 975-94670 FAX : (49-89) 975-94676

MUSCAT, OMAN C/O BAHWAN TRAVEL (GSA) CENTRAL BUSINESS DISTRICT P.O.BOX 282, PC 113, MUSCUT, OMAN

TEL : (968) 787-909 TKT/RSVN : (968) 705-934 FAX : (968) 700-480

NAGOYA, JAPAN 9F SOUTH HOUSE 6-29 NISHIKI 3-CHOME NAKA-KU, NAGOYA 460-0003, JAPAN

e-mail : kunjit@thaiair.co.jp TKT/RSVN : (81-52) 963-8585 FAX : (81-52) 963-8584

OSAKA, JAPAN SUMITOMO SEIMEI YODOYABASHI BUILDING 4-1-21 KITAHAMA, CHOU-KU OSAKA 541-0041, JAPAN

e-mail TKT FAX RSVN FAX

: : : : :

bhudhisarn@thaiair.co.jp (81-6) 6202-5470 (81-6) 6202-5646 (81-6) 6202-5161 (81-6) 6202-5453

PARIS, FRANCE 23 AVENUE DES CHAMPS ELYSEES 75008 PARIS, FRANCE

TKT FAX RSVN FAX

: : : :

(33-1) 4420-7070 (33-1) 4420-7049 (33-1) 4420-7080 (33-1) 4420-7037

PENANG, MALAYSIA WISMA CENTRAL 41 JALAN MACALISTER 10400 PENANG, MALAYSIA

TKT RSVN FAX

: (007-604) 226-7000 : (007-604) 226-6000 : (007-604) 226-9000

PERTH, AUSTRALIA LEVEL 30, QV1 BUILDING 250 ST GEORGES TERRACE PERTH, WA 6000, AUSTRALIA

e-mail : kamalars.n@thaiairways.com.au TKT/RSVN : (61-8) 9488-9200 FAX : (61-8) 9488-9260

PHNOM PENTH, CAMBODIA 294 M.V.MAO TSE TOUNG, PHNOM PENTH KINGDOM OF CAMBODIA

TKT/RSVN : (855-23) 214-359 FAX : (855-23) 214-369

PUSAN, KOREA #201 BANDO BUILDING 4KA 36 JOONGANG-DONG, PUSAN, KOREA

e-mail : TEL : TKT/RSVN : FAX :

pusthai@kornnet.net (051) 463-8184 (051) 463-8181 (051) 463-8564

ROME, ITALY 50 VIA BARBERINI 00187 ROME, ITALY

e-mail TKT RSVN FAX

: : : :

manit@thaiair.it (06) 4781-3329 (06) 4781-3304 (06) 474-6449

SEOUL, KOREA SHINDONGAH FIRE & MARINE INSURANCE BLDG, TAEPYUNGNO 2-GA, JUNG-GU, SEOUL, KOREA

TKT FAX RSVN FAX

: : : :

(82-2) 3707-0033 (82-2) 3707-0055 (82-2) 3707-0011 (82-2) 755-5251

: : : :

mnlaa@thaimnl.com.ph (63-2) 840-4235 (63-2) 816-7017 (63-2) 817-4044

BANGKOK, THAILAND HEAD OFFICE 89 VIBHAVADI RANGSIT ROAD BANGKOK 10900

FAX

: (02) 545-1681-6 (02) 545-3685-9 : (02) 545-3832

SILOM OFFICE 485 SILOM ROAD BANGKOK 10500

TEL

LARNLUANG OFFICE 6 LARNLUANG ROAD BANGKOK 10110

TKT FAX RSVN FAX

: : : :

TEL FAX

: (02) 215-2020-4 : (02) 215-2021

ASIA HOTEL OFFICE 296 PHAYATHAI ROAD BANGKOK 10400

SHANGHAI, THE PEOPLE’S REPUBLIC OF CHINA UNIT 105 SHANGHAI KERRY CENTRE, e-mail : shatg@online.sh.cn 1515 NAN JING ROAD (WEST), TKT/RSVN : (86-21) 5298-5555 SHANGHAI FAX : (86-21) 5298-6166 THE PEOPLE’S REPUBLIC OF CHINA

TEL

tpeaatg@ms29.hinet.net (886-2) 2509-6800 (886-2) 2516-0268 (886-2) 2508-4910

FAX

AIRPORT OFFICE TEL - BANGKOK INTERNATIONAL AIRPORT VIBHAVADI RANGSIT ROAD FAX BANGKOK 10210 TEL FAX - DOMESTIC AIRPORT VIBHAVADI RANGSIT ROAD BANGKOK 10210

: (02) 234-3100 (02) 232-8000 : (02) 233-1465 (02) 237-4114 (02) 280-0100-110 (02) 280-1748 (02) 628-2000 (02) 628-0111

: (02) 535-2755 (TERMINAL 1) : (02) 535-4768 : (02) 535-6998 (TERMINAL 2) : (02) 535-4266

TEL FAX

: (02) 535-3290 : (02) 535-3182

CHIANGMAI, THAILAND 240 PRAPOKKLAO ROAD, AMPHOE MUANG, CHIANGMAI 52000 THAILAND

e-mail TKT FAX

: cnxsd_x@hotmail.com : (053) 210-210,210-041 : (053) 418-258

CHIANGRAI, THAILAND 870 PHAHOLYOTHIN ROAD CHIANGRAI 57000, THAILAND

TEL(A/P) : (053) 711-179 FAX : (053) 713-663

PHITSANULOK, THAILAND TEL(A/P) : (055) 258-020 209/26-28 BOROMTRILOKNART ROAD FAX : (055) 251-671 PHISANULOK 65000, THAILAND HAT YAI, THAILAND 190/6 NIPAT UTHIT 2 ROAD HAT YAI, SONGKHLA 90110, THAILAND

TKT RSVN FAX

: (074) 230-445 ext. 100-105 : (074) 233-433 : (074) 233-114

PHUKET, THAILAND 78 RANONG ROAD, AMPHOE MUANG, PHUKET 83000 THAILAND

e-mail TKT RSVN FAX

: visets@ksc.th.com : (076) 258-239 (076) 258-240 : (076) 258-233, 216-776

KRABI, THAILAND 39 TUNG FAH ROAD, AMPHOE MUANG, KRABI 81000 THAILAND

e-mail TEL FAX

: kbvsw@hotmail.com : (075) 622-439 : (075) 622-443

PATTAYA, THAILAND DUSIT RESORT PATTAYA HOTEL 240/2 PATTAYA BEACH ROAD CHOLBURI 20130, THAILAND

TEL FAX

: (038) 420-994-97 : (038) 420-998

KHONKAEN, THAILAND e-mail HOTEL SOFITEL RAJA ORCHID TEL KHONKAEN FAX 9/9 PRACHASAMRAN ROAD, AMPHOE MUANG, KHONKAEN 40000

: suvad_s@clickta.com : (043) 227-701-05 : (043) 227-708

UBON RATCHATHANI, THAILAND TEL 364 CHAYANGGOOL ROAD, FAX AMPHOE MUANG UBON RATCHATHANI 34000, THAILAND

: (045) 313-340-2 : (045) 256-069


THAI : Annual Report 2002  

Annual Report 2002

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