Electricity Generating : Annual Report 2011 by Orapan Kokong

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Annual Report 2011 Electricity Generating Public Co., Ltd.

2011 Highlights EGCO Group’s philosophy is to conduct the business ethically for the benefits of the stakeholders namely shareholders, customers, suppliers, employees, communities and environment for sustainable development. Awards and Recognition

EGCO May July August September December February 21, 2012

10th best listed companies in Thailand, 4th best public companies in the energy and resources sector and 5th best public company on net margin in a poll conducted by Money and Banking Magazine Nam Theun 2 hydropower project is voted top hydropower project of the year 2011 in a Global Energy Magazine poll. An excellent showcase for shareholder meeting with the full score of 100 in the quality assessment of 2011 Annual General Shareholders’ Meeting organized by the Thai Investors Association The Lopburi Solar Project with the combined capacity of 84 MW was selected the project to honor H.M. the King’s 84th birthday anniversary on December 5, 2011. This project also won the Thai Crown Standard for being Clean Development Mechanism for general public’s benefit in accordance with the criteria of the Thailand Greenhouse Gas. Being selected one of the five companies for “the Corporate Social Responsibility Excellence” from the Thailand Corporate Excellence Awards 2010 hosted by Thailand Management Association, Sasin Graduate Institute of Business Administration of Chulalongkorn University and GfK MarketingWise Company Limited Receiving the SET Awards hosted by the Stock Exchange of Thailand (SET) and the Finance and Banking Magazine • Top Corporate Governance Report Award • Corporate Social Responsibility Award for listed company with the market capitalization over 10,000 million Excellent Corporate Governance Performance in 2011 by IOD with the score of 96 and full score in three categories being the rights of shareholders, role of stakeholders and disclosure and transparency The 55 MW solar power plant in Lopburi has started supplying electricity to EGAT. “Board of Directors for Exemplary Practices” for 2010 - 2011, “Board with Consistent Best Practice” and “Audit Committee of the Year” in a contest organized by the Thai Institute of Directors, SET, the Thai Chamber of Commerce, the Federation of Thai Industries, the Thai Bankers’ Association, the Listed Companies Association and the Federation of Thai Capital Market Organizations

Khanom Electricity Generating Company Limited (KEGCO)

July 7 September 14

National Safety Awards for the 12th consecutive year, at the 25th National Work Safety Week by Ministry of Labor Outstanding Establishment in the year 2010 for Achievement on Labor Relations and Welfare” for the 5 consecutive years, by Ministry of Labor

EGCO Cogeneration Company Limited (EGCO Cogen) September 22

Roi Et Green Company Limited (Roi Et Green)

June July

Received “Certificate of CSR-Rayong” from governor of Rayong

National Safety Awards for the second consecutive year, at the 25th National Work Safety Week by Ministry of Labor Certificate for Green Industry : First level - Recognition for “Green Commitment” by Ministry of Industry, demonstrating commitment to avoid any environmental impact on the community, with good communication among staffs in the company.

EGCOM Tara Company Limited (EGCOM Tara)

January 25 Certificate of Standard for Corporate Social Responsibility (CSR-DIW) B.E. 2010 September 8 Certificate for Quality of Drinking Water by Ministry of Public Health for 9 consecutive years September 22 Certificate of Standard for Corporate Social Responsibility (CSR-DIW Continuous) B.E. 2011 November 24 Certificate of Standard for Excellent Healthy Workplace (Good Level) by Ministry of Public Health for the 5 consecutive years Certificate of Standard for Certificate for Drugs free workplace : Excellent Level 2011 by Ministry of Labor

Business Activities A. Incorporation/Acquisition/Business Transfer/New Investment January March 1 March 25 November 25 December 22

EGCO has been awarded the licenses for 2010 Firm Small Power Producer Cogeneration projects from Electricity Generating Authority of Thailand (EGAT) in accordance with the resolution of the Energy Regulatory Commission. The projects are TJ Cogen, TP Cogen and SK Cogen, with installed capacity of 125 MW each. EGCO acquired a 12.50% interest in Xayaburi Power Company Limited (Xayaburi) from CH.Karnchang Public Company Limited. Xayaburi plans to develop a 1,285 MW run-of-river hydroelectric project on the Mekong River in Laos PDR. The commercial operation date is currently scheduled for January 2019. EGCO completed the acquisition of an additional 26.125% interest in Quezon Power (Philippines) Limited Co. (Quezon) bringing EGCO’s total ownership interest in Quezon to 52.125%. In addition, EGCO completed the acquisition of 100% of the outstanding shares of Pearl Energy Philipppines Operating Inc. (PEPOl), previously named Covanta Philippines Operating Inc. (CPOI), the entity which provides operation and maintenance services to Quezon through a long-term Operation and Maintenance Agreement. EGCO’s wholly owned SPP projects with the combined capacity of 375 MW namely TJ Cogen, TP Cogen and SK Cogen, have entered into the firm Power Purchase Agreement for cogeneration system with Electricity Generating Authority of Thailand. 55 MW solar power plant in Lopburi has started supplying electricity to EGAT on December 22, 2011.

B. Accreditation of Standard Systems

Rayong Power Plant

June 24

Passing surveillance audit for ISO 9001:2008 by TUV NORD

Annual Report 2011 Electricity Generating Public Co., Ltd.

July 26 - 28

KEGCO

April 25 - 26 August 31

Passing re-certificate audits for ISO 9001:2008 (Quality Management), TIS 18001:1999 & OHSAS 18001:2007 (Occupational Health and Safety Management), and ISO14001:2004 (Environmental Management) by TUV NORD Passing surveillance audit for ISO 9001:2008 by TUV NORD

EGCOM Tara

February 4 February 11 April 27 August 18

Passing surveillance audit for ISO14001:2004 and TIS 18001:2542 and OHSAS 18001:2007 by MASCI (Management System Certification Institute - Thailand)

Passing surveillance audit no. 1 for ISO 9001:2008 and ISO14001:2004 by United Registrar of Systems (Thailand) Limited (URS : UKAS) Certificate of Standard for OHSAS 18001:2007 and TIS 18001:1999 by United Registrar of Systems (Thailand) Limited (URS : UKAS) Certificate of Standard for TIS 17025-2543 & ISO/IEC 17025-2005 by Thai Industrial Standards Institute (TISI) Passing surveillance audit no. 2 for ISO 9001:2008 / ISO14001:2004 and OHSAS 18001:2007 & TIS 18001:1999 by United Registrar of Systems (Thailand) Limited (URS : UKAS)

Roi Et Green

December 21

Passing 2nd surveillance audit for ISO 9001:2008 by Moody International Certification Group

Activities for Shareholders and Investors A. Shareholders’ Meeting April 21 May 4 September 16

2011 Annual General Shareholders’ Meeting 2010 Final Dividend Payment at 2.75 baht per share 2011 Interim Dividend Payment at 2.50 baht per share

B. Opportunity Day/Analyst Meeting March 2 May 19 August 16 November 21

Opportunity Day/Analyst Meeting No. 1/2011 to announce 2010 annual performance Opportunity Day/Analyst Meeting No. 2/2011 to announce 2011’s first quarter performance Opportunity Day/Analyst Meeting No. 3/2011 to announce 2011’s second quarter performance Opportunity Day/Analyst Meeting No. 4/2011 to announce 2011’s third quarter performance

C. Investor Meeting February 23 - 25 March 17 - 18 March 28 - 30 May 26 July 7

Non-Deal Roadshow for institutional investors in Hong Kong by Nomura Securities JP Morganâ&#x20AC;&#x2122;s Thailand Conference in Bangkok by JP Morgan Securities Thailand Focus 2011 in Bangkok by SET & Phatra Securities TISCO Corporate Day at TISCO Building by Tisco Securities The Pulse of Asia Conference in Singapore by DBS Vickers Securities

D. Knowledge Sharing and Site Visit January 13 - 15 January 24 June 8 August 10 September 12 - 15 September 19 December 29

Site Visit to a One Watershed Forest, One Energy Source project in Chiangmai Newsletter to Shareholders & Investors Site Visit to Kaeng Khoi 2 Power Plant in Saraburi Province Solar Power Plant Briefing & Site visit in Lopburi Province Site Visit to a One Watershed Forest, One Energy Source project in Chiang mai Newsletter to Shareholders & Investors Newsletter to Shareholders & Investors

Activities for Employees May 14 June 10 June 16 and June 23 August 1 September 7 - 8 September 20 September 29 December 28

Drive Talk : D Dedication to Excellence Breastfeeding Corner Project Annual Physical Check up for Employees Drive Talk : R Result Oriented EGCO Group Sport Day Drive Talk : I Initiative and Dynamic Annual fire drill EGCO New Year Party

Annual Report 2011 Electricity Generating Public Co., Ltd.

Activities to Promote Good Corporate Governance April 7 October 18

Dhamma Seminar on “Corporate Governance” Seminar on “Risk Management for Executives”

Activities for Society and Environment

EGCO

January - December March 14 - 18 March 21 - 25 May 17 August 18 - 20 August 24 October 10 - 13

A Watershed Forest : A Source of Energy for Life Project, under the ‘Reduce Global Warming for His Majesty the King’ campaign : In collaboration with the Department of Alternative Energy Development and Efficiency (DEDE), The Ministry of Energy, developing the 3rd model mini hydro power plant at Huoy Wok Village, Ban Klang, Tambon Ban Luang, Amphoe Jom Thong, Chiang Mai. EGCO Forest Conservation Youth Camp : 35th and 36th youth camps at Doi Inthanon National Park, Chiang Mai. EGCO Green Blood Youth Network in Northern Regions : Organizing “Dern Keun Doi” (“Walking up the hill”) activity with the aim of reducing garbage and preserving the environment as good deeds on Visakha Bucha Day at Doi Suthep-Pui National Park. The 5th Forest : The Circle of Life Project : In collaboration with Thai Forest Conservation Foundation and Doi Inthanon National Park, organizing a tree planting activity aiming to return natural equilibrium to the watershed forest at Doi Inthanon Natural Park and Ban Teen Pha, Amphoe Mae Cham, Chiang Mai. Appointing ceremony of a model school for “How to Fight Global Warming with Sustainable Living” under the “How to Fight Global Warming with Sustainable Living” Project at Nikhom Vittaya School, Rayong. Seminar on “How to Fight Global Warming with Sustainable Living” for mainstay teachers from 21 schools in five regions under the “How to Fight Global Warming with Sustainable Living” Project.

Rayong Power Plant January - December March 8 - 11 May 11 June 2 August 10 August 11 September 26 - 30 October 20 - 21 November 18 December 2 December 17 - 18

Organizing sport activities attended by communities around the power plant and Map Ta Phut Municipality, Rayong with the objective to promote good relationships and good health. The 8th EGCO Youth Camp Project (Rayong Power Plant) : Organizing a visit to an ecological power plant at Rayong Power Plant under EGCO Group, and activity to raise awareness in conserving natural resources at Khao Laem Ya - Samet Islands National Park. Demonstration workshop of basic fire fighting and fire control of fires caused by the use of household gas stoves for Mab Kha community-Samnak Ai Ngon located in the surrounding area of the power plant. Tree-planting Activity : Preserving the environment and creating a protection strip at Rayong Power Plant in collaboration with Map Ta Phut Municipality and communities in the surrounding area of the power plant. Staff of Rayong Power Plant together with Huai Pong Community-Sa Pan Nam Tuam planted Thai flame-trees in community areas to pay homage to Her Majesty the Queen on the occasion of National Motherâ&#x20AC;&#x2122;s Day. Cleaning Community Activity : Collaborating with communities in the surrounding areas of the power plant (Huai Pong Nai communities 1 and 2, and Talad Huai Pong community) to preserve the environment and promote public- mindedness. International Rattan Ball Game at Rayong Stadium in collaboration with the Electricity Generating Authority of Thailand and Tirathai Public Company Limited. Restoring Public Health Knowledge Workshop Project for volunteers in communities in the vicinity of power plants (public health volunteers) twice : once at Huai Pong Public Health Service Center and once at Mab Kha Public Health Service Center. Planting Trees, Building Dams, and Dredging Nam Cha Canal Activity in communities situated at the rear of the power plant with the aim of restoring the environment and quality of life of communities as part of performing good deeds to celebrate the 7th Cycle Birthday of His Majesty the King. Improving and Repairing the Electrical System of Temple, Schools and Communities Project in the surrounding areas of the power plant to install electrical system at a multipurpose building for the Nong Wai Som community, Rayong.

Annual Report 2011 Electricity Generating Public Co., Ltd.

KEGCO January - December January 8 March 4 March 26 - April 8 April 21 - 26 May 19 May 24 - 27 June 23 - 30

Biological Agriculture for Sustainable Living Project : Organizing lectures and demonstrations of “making organic fertilizer for agricultural use” for 11 schools in Amphoe Khanon, Nakhon Sri Thammarat. Breeding of Blue Swimming Crab Project : In collaboration with Nakhon Sri Thammarat Coastal Fisheries Research and Development Center in breeding blue swimming crabs, and releasing them as well as breeders into the sea at Khanom Bay, Amphoe Khanom, Nakhon Sri Thammarat. Community Relations Development Project : Repairing and maintaining the electrical system of schools, temples, a child development center and Islamic communities for safety. National Children’s Day 2011 Activities : With the objective of providing children, youths and communities in the surrounding areas of the power plant with the opportunity to participate in the activities and visit Khanom Power Plant. Skill Improvement for Youths Project : In association with Ban Ta Muang School, organizing the 12th knowledge competitive examination at primary level to win a scholarship in 2011 and scholarship and certificate presentation ceremony to students who passed the examination. Southern Flood Victim Relief : 5,157 relief packages and 27,000 litres of drinking water given to villagers in Amphoe Khanom, Nakhon Sri Thammarat and Surat Thani. Field Trip for Elders in Amphoe Khanom Project : Taking elders from the Elderly Club of Khanom Hospital and elders living in the surrounding areas of the power plant on a field trip to the north for their pleasure. Enhancing Relations within Communities Activity : Community relations football match and social gathering for community leaders to promote good relations. The 37th EGCO Forest Conservation Youth Camp : at Khao Luang National Park, Nakhon Sri Thammarat. 5th New Home under the Sea (Artificial Reef) Project : Dropping 28 containers into the sea near Khanom Power Plant as well as collaborating with schools in Nakhon Sri Thammarat to organize the container drawings contest “Land of Dolphins” to encourage young people to help preserve natural resources and the environment.

July 8

July 11 August 17 - 21 August 25 November 15 - 25

Annual Presentation of Lent Candle Activity : Together with its staff offered lent candles to 13 temples in Amphoe Khanom to carry on this tradition. Releasing Freshwater Animals Activity : Shrimps and several breeds of freshwater fish were released in Klong Ban Klang Pumping Station to pay homage to Her Majesty the Queen on her birthday. Youth Field Trip for Learning Project : Taking students from 23 schools in Amphoe Khanom on a field trip to the National Scientific Week Fair at the Convention and Exhibition Center, Bitec, Bangna with the objective to promote learning outside the classroom among the young generation. Scholarship and Sport Equipment Presentation Ceremony 2011 : for 23 schools in Amphoe Knanom, Nakhon Sri Thammarat. Making EM Ball Activity : Together with the Office of the Energy Regulatory Commission 11th District and communities in the surrounding areas of Khanom Power Plant, making 84,000 EM balls and accumulating 1,000 litres of fluid EM and giving them to the Electricity Generating Authority of Thailand for treating waste water after floods in the area around the power plant in Pranakorn Sri Ayutthaya.

Roi Et Green

September 30 October 11 November 3 November 24

The 1st Mobile Medical Unit Project : Offering medical check-ups to people living in communities around the power plant in Tambon Nau Muang, Muang District, Roi Et. Donating Relief Packages to Flood Victims in Tambon Din Dum Project : Giving relief packages to villagers in Tambon Din Dum, Amphoe Jung Han, Roi Et and subsidies to schools affected by floods in the areas near the pump building of the power plant. Drinking Water Storage Tank for Flood Relief in Ban Din Dang Project : A drinking water storage tank of 1,000 litres filled up with water was given to Din Dang Village, Tambon Dong Singh, Amphoe Jung Han, Roi Et for consumption during the floods for villages near the pump building of the power plant. The 5th Help Farmers Harvest Project : Staff from the power plant helped farmers harvest on paddy fields adjacent to the power plant. This activity has been carried on for five consecutive years since 2007.

Annual Report 2011 Electricity Generating Public Co., Ltd.

&INANCIAL /VERVIEW

#ONSOLIDATED &INANCIAL 3TATEMENTS

FINANCIAL PERFORMANCE (Million Baht) Sales and service income

7,661

8,609

9,145

10,320

10,939

13,839

16,022

15,620

15,378

11,463

449

386

349

378

655

848

805

852

898

669

Cost of sales and services

5,589

5,678

5,411

5,872

5,711

5,815

8,151

7,593

6,017

4,926

Administrative expenses and others

1,933

1,888

1,772

1,776

1,680

2,154

2,202

1,894

1,323

963

Other income

Impairment charge Finance costs

(34)

170

342

694

564

568

630

839

1,166

1,859

2,220

2,631

2,807

5,200

6,109

6,273

4,619

5,051

(83)

(545)

(73)

Share of profit (loss) from subsidiaries, an associate and interests in joint ventures

126

115

114

134

169

264

232

303

236

4,968

6,858

7,903

6,952

8,281

5,299

4,378

4,595

5,287

2,784

(56)

(25)

121

716

(285)

707

174

4,990

6,803

7,936

6,927

8,402

6,016

4,093

4,662

5,994

2,958

Total assets

72,956

67,040

62,920

58,330

53,600

50,459

61,250

55,066

56,437

55,824

Total liabilities

14,423

11,712

11,826

12,788

11,604

14,661

29,136

25,963

29,736

34,876

Parent's shareholders' equity

57,978

54,819

50,572

45,066

41,475

35,289

31,041

28,173

25,895

20,276

555

509

521

476

521

509

1,073

982

859

724

(52)

5,265

Net Profit (loss) before Fx

9.44

13.03

15.01

13.21

15.73

10.07

8.32

8.75

10.07

5.30

Net Profit (loss)

9.48

12.92

15.07

13.16

15.96

11.43

7.78

8.88

11.41

5.62

110.13

104.13

96.06

85.60

78.78

67.03

58.96

53.55

49.21

38.51

5.25

5.00

4.75

4.00

3.25

3.00

2.75

2.50

11.72

10.26

8.30

2.58

4.22

1.65

2.27

3.25

2.19

2.21

1.82

2.08

1.08

1.11

1.20

1.58

1.29

1.33

1.01

1.02

Gross profit ratio (%)

27.05

34.04

40.83

43.10

47.80

57.98

49.13

51.39

60.88

57.02

Earnings ratio (%)

37.49

45.04

50.33

45.22

50.48

41.19

24.28

28.25

38.10

24.53

Return on equity ratio (%)

8.85

12.91

16.60

16.01

21.89

18.14

13.83

17.28

26.02

15.26

Return on assets ratio (%)

7.13

10.47

13.09

12.38

16.15

10.77

7.04

8.36

10.68

5.44

Debt to equity ratio (Time)

0.25

0.21

0.23

0.28

0.41

0.91

0.89

1.11

1.66

Net Profit (loss) attributable to Minority interests Net Profit (loss) before Fx Fx gain (loss) Net Profit (loss) attributable to Equity holders of the Company

FINANCIAL POSITION (Million Baht)

Minority interests Treasury stock Issued and paid-up share capital

PER SHARE DATA (Baht)

Book Value Dividend

RATIO ANALYSISÂ Liquidity ratio (Time) Cashflows liquidity ratio (Time)

Remarks : 1 According to the announcement published by the Department of Business Development regarding the 2009 financial statements format, the Group is required to present directors and management remuneration that used to include in cost of sales. Therefore, comparative figures have been adjusted to conform with changes in presentation in the current year. 2 From January 1, 2007, EGCO Group has changed the accounting policy for interests in joint ventures in the consolidated financial statements from "Proportionate Consolidation" to the "Equity Method"; and adopted the accounting policy regarding Employee Benefits. The retrospective adjustments have been made on 2006 financial statements.

25 4OTAL 2EVENUES

Unit : Million Baht 14,687 8,110

8,995

9,494

10,698

11,594

2011

2010

20091

2008

20072

2006

16,827

16,472

16,276 12,132

2005

2004

2003

2002

3HARE OF PROFIT LOSS FROM SUBSIDIARIES AN ASSOCIATE AND JOINT VENTURES 5,200

2011

6,109

6,273 4,619

2010

20091

2008

Unit : Million Baht

5,051

20072

(83)

(545)

(73)

2006

2005

2004

2003

2002

4OTAL %XPENSES %XCLUDING #URRENCY %XCHANGE 'AINS OR ,OSSES 8,216

8,130

7,751

8,278

8,230

9,135

2011

2010

20091

2008

20072

2006

Unit : Million Baht 12,212

11,673

10,141

9,038

2005

2004

2003

2002

.ET 0ROFIT %XCLUDING #URRENCY %XCHANGE 'AINS OR ,OSSES 6,858

7,903

6,952

Unit : Million Baht

8,281 5,299

4,968

4,378

4,595

5,287 2,784

2011

2010

20091

2008

20072

2006

2005

2004

2003

4OTAL !SSETS

2002

Unit : Million Baht 72,956

2011

67,040

2010

62,920

20091

58,330

2008

53,600

50,459

20072

2006

61,250

2005

55,066

56,437

55,824

2004

2003

2002

Annual Report 2011 Electricity Generating Public Co., Ltd.

Message from the Chairman The previous year has been another year of challenge for the business sector. Although the global economy begins to recover from the economic crisis that has prevailed over the past three years, Thailand has experienced an economic upturn owing to the domestic demand with successive increases in private investment and consumption, and exports. Nonetheless, there has still been an impact caused by political instability, overall higher expenditure on energy, and flooding at the end of the year. As regards the energy situation, particularly that of the power generating business, in 2011, the government sector has set up a 20-year plan in developing the countryâ&#x20AC;&#x2122;s electric power productivity from 2010 to 2030. According to this plan, the emphasis will be placed on the security of the electric power system, dissemination of energy sources in producing electricity, and the use of renewable energy for the Green PDP plan to be in accordance with the 15-year Renewable Energy Development Plan of the Ministry of Energy as well as to enhance efficient energy consumption, and to promote efficient production of electricity using cogeneration.

â&#x20AC;&#x153;...EGCO Group is determined to develop the organization, progressing and strengthening under good corporate governance with an awareness of the best interests of every stakeholder...â&#x20AC;?

The Electricity Generating Public Company Limited or the EGCO Group is determined to develop the organization, progressing and strengthening under good corporate governance with an awareness of the best interests of every stakeholder. To achieve sustainable growth as the first independent power producer in Thailand, in 2011, the Company adjusted its strategies in expanding investments in the energy business, both in Thailand and the ASEAN region, as well as investing in projects related to the use of energy of different forms or natural energy such as hydroelectric power, solar power and wind power. In addition to the management of existing projects, the Company is constantly searching for quality projects with good returns in the future and at an acceptable level of risk. The knowledge base regarding the energy market, investment opportunities and governance structure in the ASEAN countries has been continually developed in order to achieve the integrated business of the EGCO Group; covering the upstream - the energy business - and the downstream - the future electricity production and distribution business - in order to preserve our market share as the leading energy company, and to consistently strengthen the financial status and the operating results of the EGCO Group. In the previous year, the EGCO Group purchased more shares from the Quezon Power (Philippines) Co., Ltd., the owner of the Quezon coal-fired Power Plant, acquiring a further 26.125 %, making the EGCO Group hold total shares of 52.125% in Quezon. In addition, the EGCO Group purchased shares from Xayaburi Power Co., Ltd (XPCL) accounting for 12.50% of the whole shares, to be part of the development of the Xayaburi Power Plant Project, a hydroelectric power plant in dam in Laos. Furthermore, in 2010 the EGCO Group was selected to be the small power producer responsible for three projects, on a firm contract basis, using cogeneration by the Electricity Generating Authority of Thailand (EGAT) according to the resolution of the Energy Regulatory Commission. Each project supplies 90 megawatts covering the period of 25 years. The Company and EGAT have already signed the sale contract.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Moreover, the Lopburi Solar project by Natural Energy Development Co.,Ltd (NED), in which the EGCO Group holds 33.33% of the shares, has commenced producing and distributing electricity to EGAT for phase one, accounting for eight megawatts. The contract will be complete in mid-2012. This is a solar power plant using solar cell technology on the largest thin film in the world with a productivity of 55 megawatts. With all these examples of progress, in 2011 the EGCO Group had a total of 15 power plants in operation, accounting for the ratio of productivity to shareholding at 4,419.97 megawatts - 58.95 megawatts more when compared to 2010. Of this number, 3,864.19 megawatts was distributed to EGAT. When compared to the country’s total productivity of 31,446.71 megawatts, this comprises 12.29 % of the country’s total productivity. The EGCO Group is a power producer producing electricity from a great variety of types of energy, in compliance with the policy of the government sector in disseminating energy consumption to promote energy security. As regards the 2011 operating results, the Company obtained a net profit of 4,990 million baht, or a net profit of 9.48 baht per share. However, if not taking into account the impact caused by the exchange rate and the expense of special circumstances - the EGCO Group would have gained a net profit of 6,049 million baht. In total, the EGCO Group owns property worth 72,956 million baht and paid dividend from the operating results of the first half of 2011 at 2.50 baht per share. The Company is certain that the dividend payment will continue to remain at a satisfactory and appropriate level. The EGCO Group, aware of the sustainability of the environment and society in general as the foundations of success of every enterprise, adheres to operating under the vision of “conserving the environment and developing society” by fostering and reducing any impact caused by business operations alongside enhancing competency and collaboration with every sector in continually developing the environment and society. Moreover, staff are encouraged to take part in such operations on a regular basis. The Company believes that it will help strengthen capacity and work skills as well as instill public-mindedness in EGCO employees, making them become quality personnel within the organization in addition to being civil-minded citizens in society. Bearing this in mind, projects for community and society are operated in a progressive manner covering three aspects: the promotion and development of quality of life in community, the conservation of the environment and natural resources, and the promotion of learning about the environment and creating public-mindedness among youth. With its determination to move the Company forward, in 2011 the EGCO Group received recognition from a number of sectors. The Company was ranked tenth for best listed companies of the year, fourth for best companies in the energy and public utilities category, fifth for the best companies in Thailand as regards net profit to total revenue according to the ranking conducted by Money and Banking Magazine. Furthermore, the Company received the ‘Top Corporate Governance Report Awards’ and ‘Corporate Social Responsibility Awards’ for the companies listed in Stock Exchange of Thailand with over 10,000 million baht worth of stocks at the stock exchange price at the SET Awards 2011 organized by the Stock Exchange of Thailand (SET) and Money and Banking Magazine. The Company was one of five companies to obtain Corporate Social Responsibility Excellence at the Thailand Corporate Excellence Awards organized by

Thailand Management Association in collaboration with the Sasin Graduate Institute of Business Administration of Chulalongkorn University. Added to all this were “The Board of Directors of the Year for Exemplary Practices 2010/2011”, “The Audit Committee of the Year” and the “Board with Consistent Best Practices” at the Board of the Year Awards 2010/2011 organized by the Thai Institute of Directors, the Stock Exchange of Thailand, the Thai Chamber of Commerce, the Federation of Thai Industries, the Thai Bankers’ Association, the Thai Listed Companies Association and the Federation of Thai Capital Market Organizations. In relation to the operational standards of power plants, the EGCO Group has received continual acceptance from various institutes : Nam Theun 2 Power Plant Project was recognized and selected as a Distinctive Hydroelectric Power Plant in the World in 2011 under the Renewable Energy Type; Lopburi Solar Project received the Crow Standard as the operator of the Clean Development Mechanism (CDM) project and as a social contributor; Khanom Power Plant received the “Best Practice Workplace on Safety, Occupational Health and Work Environment Award” at the national level for the 12th consecutive year during the 25th Safety Week organized by the Ministry of Labor, and the “Best Practice Workplace on Labor Relations and Labor Welfare Award” for the fifth consecutive year; EGCO Cogen Power Plant received the Corporate Social Responsibility Certification of Rayong; Roi Et Green Power Plant obtained the “Best Practice Workplace on Safety, Occupational Health and Work Environment Award” at the national level for the second consecutive year during the Safety Week organized by the Ministry of Labor, and received Green Commitment Level 1 with the aim to reduce the impact on the environment from the Ministry of Industry. The above-mentioned success is a result of the support from every sector relating to the EGCO Group. On behalf of the Company’s Board, executives and every EGCO member of staff, I would like to express my sincere gratitude to all shareholders, joint venture partners, trading partners and every involved party for their continued support. We hope to have your trust in ensuring you that the Company will conduct itself in accordance with the principles of good corporate governance and social responsibility in the highest interests of all stakeholders and will continue to do so to develop the sustainable growth of the organization alongside that of our country.

Mr. Pornchai Rujiprapa Chairman of the Board of Directors

Annual Report 2011 Electricity Generating Public Co., Ltd.

Board of Directors as at January 31, 2012

01 Mr. Pornchai Rujiprapa

02 Mr. Aswin Kongsiri

03 Mr. Chaipat Sahasakul

• Independent Director • Vice Chairman • Chairman, Corporate Governance and Social Responsibility Committee • Nomination and Remuneration Committee Member

05 Police Lieutenant General

Pijarn Jittirat

06 Mr. Somphot Kanchanaporn

• Chairman • Chairman, Investment Committee

04 Mr. Thanapich Mulapruk

• Independent Director • Audit Committee Member

• Independent Director • Corporate Governance and Social Responsibility Committee Member • Nomination and Remuneration Committee Member

• Independent Director • Chairman, Audit Committee

• Independent Director • Audit Committee Member

07 Mr. Phaiboon Siripanoosatien

08 Mr. Kulit Sombatsiri

09 Mr. Surasak Supavititpatana

• Independent Director • Nomination and Remuneration Committee Member • Corporate Governance and Social Responsibility Committee Member

• Director • Corporate Governance and Social Responsibility Committee Member

• Director • Investment Committee Member

10 Mr. Thawat Vadjanapornithi

11 Mr. Hideaki Tomiku

12 Mr. Toshiro Kudama

• Director • Nomination and Remuneration Committee Member

• Director • Chairman, Nomination and Remuneration Committee • Investment Committee Membe

13 Mr. Ryota Sakakibara

14 Mr. Satoshi Yajima

15 Mr. Sahust Pratuknukul

• Director • Nomination and Remuneration Committee Member During April 22, 2010 - September 30, 2011 • President and Director • Chairman, Risk Management Committee • Chairman, Group Business Committee • Chairman, Good Corporate Governance Committee • Chairman, EGCO Management Committee • Investment Committee Member • Corporate Governance and Social Responsibility Committee Member Appointed to be President on October 1, 2011

• Director • Investment Committee Member

• Director

Annual Report 2011 Electricity Generating Public Co., Ltd.

Board of Directors

during 2011 - January 31, 2012

01 Mr. Peter Albert Littlewood

02 Mr. Mark Jobling

03 Mr. Shinji Tsuchiya

• Director Vacating the office by resignation on February 23, 2011

• Director • Chairman, Nomination and Remuneration Committee • Investment Committee Member Vacating the office by resignation on February 23, 2011

• Director Vacating the office by resignation on February 23, 2011

04 Mr. Wisudhi Srisuphan

05 Mr. Somboon Arayaskul

06 Mr. Kurujit Nakornthap

• Director Vacating the office by resignation on February 28, 2011

• Director • Investment Committee Member • Corporate Governance and Social Responsibility Committee Member Vacating the office by resignation on October 1, 2011

• Director • Corporate Governance and Social Responsibility Committee Member Vacating the office by resignation on December 1, 2011

07 Mr. Vinit Tangnoi • President and Director • Chairman, Risk Management Committee • Chairman, Group Business Committee • Chairman, Good Corporate Governance Committee • Chairman, EGCO Management Committee

08 Mr. Akio Matsuzaki • Investment Committee Member • Corporate Governance and Social Responsibility Committee Member Mr. Vinit Tangnoi’s contract as President expired on September 30, 2011 Vacating the office by resignation on January 1, 2012

• Director Vacating the office by resignation on January 29, 2012

The positions of EGCO’s Board of Directors

as at January 31, 2012

Mr. Pornchai Rujiprapa (59)

• Chairman

• Chairman, Investment Committee

Education • Ph.D. (Regional Economics.), University of Pennsylvania, U.S.A • M.Sc. (Regional Economics.), from University of Pennsylvania, U.S.A. • M.P.A. (Programming Planning Administration) from National Institute of Development Administration (NIDA) • B.Sc. (Agro-Industry) from Kasetsart University • Certificate of Executive Program, Class 7,

Capital Market Academy • Certificate of Directors Accreditation Program,

Thai Institute of Directors Association • National Defense Course (Class of 41),

National Defence College Working Experience October 2006 - Present Chairman, Electricity Generating Authority of Thailand 2010 - Present Permanent Secretary, Ministry of Science and Technology Ministry of Science and Technology 2006 - September 2010 Permanent Secretary, Ministry of Energy Ministry of Energy December 2006 - 2008 Director

PTT Public Company Limited 2005 - 2009 Chairman

PTT Chemical Public Company Limited 2003 - 2006 Deputy Permanent Secretary, Ministry of Energy Ministry of Energy 1999 - 2003 Deputy Secretary-General, The National Economic and Social Development Board (NESBD) Office of the Prime Ministry

Mr. Aswin Kongsiri (66) • Independent Director • Vice Chairman • Chairman, Corporate Governance and Social Responsibility

Committee • Nomination and Remuneration Committee Member

Education • Bachelor’s Degree (Honours) in Philosophy,

Politics and Economics, Oxford University, England • Banff School of Advanced Management, Alberta, Canada • The National Defense Course for the Joint State-Private Sectors, Class 6, National Defence College • Certificate of Chairman 2000 Program,

Thai Institute of Directors Association • Certificate of Directors Certification Program,

Thai Institute of Directors Association Working Experience November 2011 - Member of Monetary Policy Committee Present Bank of Thailand October 2010 - Present Chairman, Thai Orix Leasing Co., Ltd. (TOLC) August 2010 - Present Governor, The Stock Exchange of Thailand April 2010 - Chairman, Krungthai - Axa Life Insurance November 2011 Co., Ltd.(KAL) November 2010 - Chairman, Thoresen Thai Agencies

Present Public Company Limited January 2009 - 2010 Director and Audit Committee Member Thoresen Thai Agencies Public Company Limited October 2007 - Present Chairman, Ch. Karnchang Public Company Limited 2007 - Present Chairman, Ton Poh Thailand Fund 2005 - Present Independent Director, Bangkok Aviation Fuel Services Public Company Limited 1999 - Present Independent Director, The OHTL Public Company Limited (Mandarin Oriental Hotel) 1993 - Present Independent Director, Thai Reinsurance Public Company Limited 1981 - Present Independent Director, Padaeng Industry Public Company Limited 2005 - August 2010 Independent Director and Executive Committee Member Krung Thai Bank Public Co., Ltd. 2003 - November 2008 Independent Director, Thai Rating and Information Services Company Limited

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Chaipat Sahasakul (57)

• Independent Director

Mr. Thanapich Mulapruk (62) • Independent Director

• Chairman, Audit Committee

• Audit Committee Member

Education • Ph.D. in Economics, University of Rochester, U.S.A. • M.A. in Economics, Thammasat University • B.A. in Economics, Thammasat University • Certificate of Executive Program, Class 12,

Capital Market Academy • The National Defense Course for the Joint Public-Private Sectors, Class 21, National Defence College • Politics and Governance in Democratic Systems for Executives Course 11, King Prajadhipok’s Institute • Certificate of Directors Certification Program,

Thai Institute of Directors Association • Certificate of Audit Committee and Continuing Development Program, Thai Institute of Directors Association • Certificate of Monitoring Fraud Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the System of Internal Control and Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the Quality of Financial Reporting, Thai Institute of Directors Association Working Experience August 2010 - Present Governor The Stock Exchange of Thailand May 2010 - Present Independent Director and Audit Committee Member, Thai Vegetable Oil Public Company Limited May 2009 - Present Chairman, University Research policy Committee, Bangkok University July 2005 - Present Independent Director and Audit Committee Member Pylon Public Company Limited Secretary - General 2001 - April 2009 Agricultural Futures Trading Commission 2005 - 2006 Director, Audit Committee Member and Chairman of Risk Management Committee Government Housing Bank 1998 - 2001 Senior Executive Vice President MFC Asset Management Public Company Limited 1991 - 1996 Senior Vice President and Spokesman Stock Exchange of Thailand

Education • LL.M., Chulalongkorn University • LL.B., Chulalongkorn University • Thai Bar Certificate, Thai Barrister at law of Thailand • National Defence College, 1998 (Class 41) • Certificate of Directors Certification Program (class 78),

Thai Institute of Directors Association • Certificate of Executive Program, Class 7,

Capital Market Academy • Certificate of Audit Committee and Continuing Development Program, Thai Institute of Directors Association • Certificate of Monitoring Fraud Risk Management,

Thai Institute of Directors Association • Certificate of Monitoring the System of Internal Control and Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the Quality of Financial Reporting,

Thai Institute of Directors Association Working Experience October 2009 - Present Director General of Department of Special Litigation Office of Attorney - General February 2009 - Director, The Airports of Thailand Public Present Company Limited November 2008 - Spokesperson Present Office of Attorney - General April 2008 - June 2011 Director, The Port Authority of Thailand October 2005 - Present Director, The Transport Company Limited April 2008 - Director October 2008 The Bangkok Mass Transit Authority December 2006 - Director General of Department of September 2009 Economic Crime Litigation Office of Attorney-General October 2007 - Director February 2008 The Marketing Organization for Farmers, Ministry of Agriculture and Cooperatives 2006 Director General of Department of Administrative Litigation Office of Attorney-General 2004 - 2006 Deputy Director General of Department of Economic Crime Litigation Office of Attorney-General 2003 - 2004 Executive Director of Office of Economic Crime Litigation 1 Office of Attorney-General

Police Lieutenant General Pijarn Jittirat (63)

• Independent Director

• Corporate Governance and Social Responsibility Committee Member • Nomination and Remuneration Committee Member

Education • Master of Public Administration, Chulalongkorn University • Bachelor of Public Administration, Police Cadet Academy • Advanced Course in Administration, Class 29,

Institute of Administration Development • Advanced Course in Police Administration, Class 13 • National Defense College Class 44 • Certificate of The Board’s Role on Fraud Presentation and Detection, Thai Institute of Directors Association • Certificate of Role of the Compensation Committee,

Thai Institute of Directors Association • Certificate of Directors Certification Program,

Thai Institute of Directors Association Working Experience 2006 - 2008 Deputy Inspector-General Royal Thai Police 2005 - 2006 Commissioner, Office of Legal and Investigation Royal Thai Police 2004 - 2005 Deputy Commissioner, Office of Human Resources Royal Thai Police 2002 - 2004 Assistant Commissioner, Office of Human Resources Royal Thai Police

Mr. Somphot Kanchanaporn (65)

• Independent Director

• Audit Committee Member

Education • MBA, National Institute of Development Administration (NIDA) • B.S. (Police Science and Administration),

California State University at Los Angeles • Certificate of Directors Accreditation Program (DAP),

Thai Institute of Directors Association • National Defense College, (Class 41st) • Certificate of Executive Program, Class 7,

Capital Market Academy • Certificate of Monitoring Fraud Risk Management,

Thai Institute of Directors Association • Certificate of Monitoring the System of Internal Control and

Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the Quality of Financial Reporting,

Thai Institute of Directors Association Working Experience 2008 - November 2010 Chairman of the Inspector General Ministry of Energy January 2009 - Director June 2010 B N B Inter Group Public Company Limited 2008 - April 2009 Independent Director PTT Aromatics and Refining Public Company Limited October 2006 - 2008 Member The National Legislative Assembly December 2006 - 2008 Chairman of Standing Committee on Energy The National Legislative Assembly 2007 Independent Director Aromatics (Thailand) Public Company Limited November 2003 - Deputy Director (Executive Level 10) November 2005 The National Intelligence Agency August - Deputy Secretary - General November 2003 The Office of the National Security Council

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Phaiboon Siripanoosatien (48)

• Independent Director

• Nomination and Remuneration Committee Member • Corporate Governance and Social Responsibility Committee Member

Education • Master of Political Science, Sukhothai Thammathirat University • Bachelor of Engineering, Chulalongkorn University • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of Democratic Politics and Governance for High Level Administrators, Class 7, King Prajadhipok’s Institute • Certificate of Management of Public Economy, Class 1,

King Prajdhipok’s Institute • Certificate of Executive Program, Class 3,

Capital Market Academy Working Experience 2009 - Present Director, Government Saving Bank 2009 - Present Independent Director Asia Credit Securities Company Limited 2008 - Present Independent Director and Audit Committee Member Finansia Syrus Securities Public Company Limited 2008 - Present Independent Director Metrostar Property Public Company Limited 1998 - Present Managing Director Trinity Plus Company Limited

Mr. Kulit Sombatsiri (48)

• Director

• Corporate Governance and Social Responsibility Committee Member (Authorized Director)

Education • MBA, University of Southern California, U.S.A. • MPA, San Diego State University, U.S.A. • BA, Public Administration, Ramkhamhaeng University • Certificate of Executive Program, Class 10,

Capital Market Academy • Certificate of Directors Certification Program,

Thai Institute of Directors Association Working Experience 2011 - Present Director Electricity Generating Authority of Thailand October 2011 - Present Inspector General, Ministry of Finance 2009 - Present Director Krung Thai Asset Management Public Company Limited March 2010 - State Enterprise Development Advisor September 2011 The State Enterprise Policy Office,

Ministry of Finance September 2008 - Deputy-Director General February 2010 The State Enterprise Policy Office,

Ministry of Finance 2007 - August 2008 Director, Bureau of Monetary Management The Treasury Department,

Ministry of Finance 2005 - 2007 Deputy Secretary General The National Telecommunications Commission

Mr. Surasak Supavititpatana (59)

• Director

Mr. Thawat Vadjanapornithi (59)

• Director

• Investment Committee Member

• Nomination and Remuneration Committee Member

(Authorized Director)

Education • Bachelor of Engineering (Electrical Engineering),

Kasetsart University • Certificate of Management of Public Economy for Executive, King Prajadhipok’s Institute • Certificate of Directors Certification Program,

Thai Institute of Directors Association • Certificate of Finance for Executive Decision,

Continuing Education Center, Chulalongkorn University • Certificate of Positioning Utility Executives for Change, University of Idaho • Certificate of Air War College, High Education Institute Working Experience January 2010 - Present Deputy Governance-Generation Electricity Generating Authority of Thailand October 2006 - Assistant Governor-Power Plant 2 January 2010 Electricity Generating Authority of Thailand November 2000 - Mae Moh Power Plant Production Division September 2006 Manager Electricity Generating Authority of Thailand

Education • Bachelor of Engineering (Electrical Engineering),

Chulalongkorn University • Certificate of Management of Public Economy for Executive (Class 7), King Prajadhipok’s Institute • Certificate of Directors Certification Program (Class 86),

Thai Institute of Directors Association • Certificate of Finance for Executive Decision,

Continuing Education Center, Chulalongkorn University • Certificate of Masterful Coaching Workshop, Hay Group • Certificate of Senior Executive Development Program-2, Foundation for International Human Resource Development Working Experience October 2010 - Present Deputy Governance-Corporate Social Responsibility, Acting EGAT Spokesman Electricity Generating Authority of Thailand January 2010 - Assistant Governor-Human Resources September 2010 Electricity Generating Authority of Thailand October 2008 - Assistant Governance-Corporate Social December 2009 Responsibility Electricity Generating Authority of Thailand December 2007 - Assistant Governance-Administration, September 2008 Development Area Electricity Generating Authority of Thailand

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Hideaki Tomiku (54)

• Director

• Chairman, Nomination and Remuneration Committee • Investment Committee Member (Authorized Director)

Education • International Law, Tokyo University Working Experience 2009 - Present Director Natural Energy Development Co., Ltd. May 2009 - Present Chief Executive Officer Diamond Generating Asia, Limited 2006 - 2011 Director and Executive Vice President OneEnergy Limited 2003 - 2006 Deputy General Manager, Head of International IPP Mitsubishi Corporation 2001 - 2003 Assistant General Manager, Power, Generation & Marketing for Japanese Market Mitsubishi Corporation

Mr. Toshiro Kudama (53)

• Director

(Authorized Director)

Education • Master of Mechanical Engineering,

Tokyo Institute of Technology • Bachelor of Mechanical Engineering,

Tokyo Institute of Technology Working Experience 2010 - Present Executive Officer, Executive General Manager, International Affairs Department The Tokyo Electric Power Company, Inc. 2006 - 2010 Executive General Manager, International Affairs Department The Tokyo Electric Power Company, Inc. 1997 - 2006 Manager and General Manager, Business Development Group, International Affairs Department The Tokyo Electric Power Company, Inc.

Mr. Ryota Sakakibara (39)

• Director

• Investment Committee Member (Authorized Director)

Education • Bachelor of Economics, The University of Tokyo Working Experience 2011 - Present Assistant General Manager

Head of Southeast Asia IPP Team Asia & Oceania Business Unit Mitsubishi Corporation 2009 - 2011 New Energy & Power Generation Division Diamond Generating Asia, Limited 2009 - 2011 Director, Natural Energy Development Company Limited 2006 - 2009 Manager, OneEnergy Limited

Mr. Satoshi Yajima (44) • Director (Authorized Director)

Education • Bachelor of Electrical Engineering, Waseda University, Japan Working Experience 2002 - Present General Manager, Overseas Business Group 2 International Affairs Department The Tokyo Electric Power Company Inc.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Sahust Pratuknukul (56)

• Director

• Nomination and Remuneration Committee Member (During April 22, 2010 - September 30, 2011) • President and Director • Chairman, Risk Management Committee • Chairman, Group Business Committee • Chairman, Good Corporate Governance Committee • Chairman, EGCO Management Committee • Investment Committee Member • Corporate Governance and Social Responsibility Committee Member (Appointed to be President on October 1, 2011) (Authorized Director)

Education • Bachelor of Engineering (Electrical Engineering),

Chulalongkorn University • Certificate of the Joint Public-Private Sectors Regular Course, National Defence College • Certificate of Senior Executive Development Program-1,

GE Co., Ltd. • Certificate of Finance for Executive Decision Program, Continuing Education Center, Chulalongkorn University • Certificate of Directors Certification Program,

Thai Institute of Directors Association Working Experience October 2011 - Present Director Xayaburi Hydropower Company Limited October 2011 - Present Chairman Natural Energy Development Company Limited October 2011 - Present Chairman Gulf Electric Company Limited October 2011 - Present Chairman Khanom Electricity Generating Company Limited October 2011 - Present Chairman EGCO Engineering and Service Company Limited October 2011 - Present Director, BLCP Power Company Limited October 2010 - Deputy Governor-Policy and Planning September 2011 Electricity Generating Authority of Thailand

January 2008 - December 2010 October 1, 2006 October 1, 2005 October 1, 2003

Director, EGAT International Co., Ltd. Assistant Governor-Policy Electricity Generating Authority of Thailand Assistant Chief Executive Officer-Planning Electricity Generating Authority of Thailand Director, Energy Economic Division Electricity Generating Authority of Thailand

The positions of EGCO’s Board of Directors

during 2011 - January 31, 2012

Mr. Peter Albert Littlewood (60)

• Director

(Authorized Director) (Vacating the office by resignation on February 23, 2011)

Education • MA (1st Class Honours), Cambridge University, U.K. Working Experience 2009 - Present Director Natural Energy Development Co., Ltd. 2003 - Present Executive Director and Chief Operating Officer CLP Power Asia Limited, Hong Kong 2001 - 2010 Director, BLCP Power Limited 2000 - 2005 Director Rayong Electricity Generating Co., Ltd. 2000 - 2005 Director Khanom Electricity Generating Co., Ltd. 2000 - 2005 Director EGCO Engineering & Service Co., Ltd. 1999 - 2003 Project Manager for CLP’s generating plant projects CLP Group 1998 General Manager for CLP’s generation business group and later for CLP strategic development CLP Group

Mr. Mark Jobling (40)

• Director

• Chairman, Nomination and Remuneration Committee • Investment Committee Member (Authorized Director) (Vacating the office by resignation on February 23, 2011)

Education • Bachelor of Economics, Monash University • Bachelor of Laws (Honours), Monash University • Barrister and Solicitor (Victoria) • Solicitor (Hong Kong) Working Experience 2009 - Present Director Natural Energy Development Co., Ltd. 2009 - 2011 Managing Director-Southeast Asia CLP Holdings 2009 - 2011 Chief Executive Officer OneEnergy 2006 - 2009 Senior Vice President-Business Development OneEnergy 2003 - 2006 General Counsel, CLP Power Asia

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Shinji Tsuchiya (41)

• Director

(Authorized Director) (Vacating the office by resignation on February 23, 2011)

Education • Bachelor of Engineering (Mechanical Engineering), Keio University Working Experience April 2009 - Present Head of Southeast Asia IPP Team Global Power Generation and Marketing Unit of Mitsubishi Corporation November 2005 - Manager March 2009 Power Generation and Marketing Internatinal Unit of Mitsubishi Corporation Electricidad Aguila de Tuxpan (co.) November 2005 Commercial Director Electricidad Sol de Tuxpan

Mr. Wisudhi Srisuphan (62)

• Director

(Authorized Director) (Vacating the office by resignation on February 28, 2011)

Education • M.A.A. Business Economics, Thammasat University • M.E. (C.E.) Lamar University, U.S.A. • LLB. (Second Class Honour), Ramkhamhaeng University • B.Eng.in Civil Engineering, Chulalongkorn University • National Defense Course (Class 38), National Defense College • Politics and Governance in Democratic Systems for Executive Course (Class 6), King Prajadhipok’s Institute • CMA (Class 6), Capital Market Academy • Certificate of Role of Chairman Program, Thai Institute of Directors Association • Certificate of Directors Certification Program, Thai Institute of Directors Association Working Experience November 2010 - Independent Director Present Pruksa Real Estate Public Company Limited June 2010 - 2011 Chairman CAT Telecom Public Company Limited October 2006 - Present Director, Office of the Council of State August 2004 - Present Chairman, Real Estate Information Center June 2010 - Chairman September 2010 Sunshine Corporation Public Company Limited December 2009 - Chairman June 2010 Siam City Bank Public Company Limited October 2008 - 2010 Director The Electricity Generating Authority of Thailand July 2008 - June 2010 Vice Chairman Dhipaya Insurance Public Company Limited 2009 Director-General The Custom Department, Ministry of Finance 2008 - 2009 Deputy Permanent Secretary Ministry of Finance 2006 - 2009 Chairman of the Board The Government Saving Bank 2006 - 2009 Director Thai Airways International Public Company Limited

2007 - 2008 2006 - 2008 2007 2003 - 2007 2005 - 2006 2002 - 2006 2000 - 2006 2000 - 2005 2002 - 2003 1999 - 2002

Director-General The Custom Department, Ministry of Finance Chairman of the Board Thailand of Tobacco Monopoly, Ministry of Finance Director-General The Excise Department, Ministry of Finance Director-General The Treasury Department, Ministry of Finance Chairman CAT Telecom Public Company Limited Director PTT Exploration and Production Public Company Limited Chairman of the Board The Government Housing Bank Director, PTT Public Company Limited Director-General Fiscal Policy Office, Ministry of Finance Comptroller-General The Comptroller’s Department, Ministry of Finance

Mr. Somboon Arayaskul (58)

• Director

• Investment Committee Member • Corporate Governance and Social Responsibility Committee Member (Authorized Director) (Vacating the office by resignation on October 1, 2011)

Education • Master of Engineering (Mechanical Engineering), Villanova University, U.S.A. • Bachelor of Engineering (Mechanical Engineering), Mapua Institute of Technology, Philippines • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of the General Manager Program, Harvard Business School Working Experience December 2007 - Deputy Governor-Development Present Electricity Generating Authority of Thailand April 2008 - Director January 2009 Ratchaburi Electricity Generating Holding Public Company Limited October 2006 - Vice President-Thermal Power Plant December 2007 Construction Electricity Generating Authority of Thailand

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Kurujit Nakornthap (56)

Mr. Vinit Tangnoi (60)

• Director

• Corporate Governance and Social Responsibility

• Chairman, Risk Management Committee

Committee Member

• President and Director

• Chairman, Group Business Committee

(Authorized Director)

• Chairman, Good Corporate Governance Committee

(Vacating the office by resignation on December 1, 2011)

• Chairman, EGCO Management Committee

• Investment Committee Member

Education • Ph.D. in Petroleum Engineering, University of Oklahoma, U.S.A. • Mater of Science in Petroleum Engineering, University of Oklahoma, U.S.A. • Bachelor of Science (with Special Distinction) in Petroleum Engineering, University of Oklahoma, U.S.A. • The Civil Service Executive Program for Senior Civil Servants (Visionary Leadership, Class 46) by OCSC, Bangkok • Senior Executive Program (SEP 60), at the London Business School, U.K. • Certificate of Director Accreditation Program, Thai Institute of Directors Association • Certificate of Audit Committee Program, Thai Institute of Directors Association • National Defense College (Class 2551 (2008 - 2009)), Thailand Working Experience 2011 - Present Director, Electricity Generating Authority of Thailand November 2010 - Deputy Permanent Secretary Present Ministry of Energy September 2008 - Director General, Department of Mineral November 2010 Fuel Ministry of Energy December 2006 - Deputy Permanent Secretary September 2008 Ministry of Energy January 2006 - Deputy Director General, Department of December 2006 Mineral Fuels Ministry of Energy

• Corporate Governance and Social Responsibility Committee Member (Authorized Director) (Mr. Vinit Tangnoi’s contract as President expired on September 30, 2011)

(Vacating the office by resignation on January 1, 2012)

Education • Master of Science (Industrial Engineering), University of Texas at Arlington, U.S.A. • B.Eng. (Mechanical), Kasetsart University • Certificate of Advance Management Program, Harvard Business School, Harvard University, U.S.A. • Certificate of Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University • Certificate of Army War College Regular Program, Institute of Army Academics • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of Leader Program, Capital Market Academy Working Experience March 2011 - Director September 2011 Xayaburi Hydropower Company Limited August 2009 - Chairman September 2011 Natural Energy Development Company Limited January 2009 - Chairman September 2011 Gulf Electric Company Limited October 2008 - Chairman September 2011 Khanom Electricity Generating Company Limited October 2008 - Chairman September 2011 EGCO Engineering and Service Company Limited October 2008 - Director, BLCP Power Company Limited September 2009 October 2008 - Chairman September 2009 Rayong Electricity Generating Company Limited

December 2007 - September 2008 2006 - 2008 March 2006 October 2005 June 2005 October 2004 October 2003

Deputy Governor-Generation Electricity Generating Authority of Thailand Director, EGAT International Co., Ltd. Director Ratchaburi Electricity Generating Holding Public Company Limited Deputy Governor-System Control Electricity Generating Authority of Thailand Senior Executive Vice President-System Control Electricity Generating Authority of Thailand Assistant Chief Executive Officer-Planning Electricity Generating Authority of Thailand Assistant Governor-Policy and Planning Electricity Generating Authority of Thailand Assistant Governor-Fuel Management Electricity Generating Authority of Thailand

Mr. Akio Matsuzaki (55)

• Director

(Authorized Director)

(Vacating the office by resignation on January 29, 2012)

Education • Master of Energy Science, Tokyo Institute of Technology • Bachelor of Applied Physics, Tokyo Institute of Technology Working Experience 2011 - Present General Manager, Chiba Thermal Power Station, East Thermal Power Office The Tokyo Electric Power Company, Inc. 2010 - 2011 General Manager, Overseas Power Business, Thermal Power Department The Tokyo Electric Power Company, Inc. 2007 - 2010 Executive Vice President and Chief Operation Officer, Team Energy Corporation, Philippines The Tokyo Electric Power Company, Inc. 1999 - 2007 General Manager, Overseas Project Group, Thermal Power plant Engineering Center, Thermal Power Department The Tokyo Electric Power Company, Inc.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Company’s Management

01 02 03 04 05 06

01 Mr. John M. Palumbo

02 Mr. Voravit Potisuk

03 Mr. Piya Jetasanon

• Senior Executive Vice President - Business Development - International

• Senior Executive Vice President - Business Development - Domestic

• Senior Executive Vice President - Finance and Corporate Services

04 Mr. Chumsak Desudjit

05 Mr. Chankij Jearaphunt

06 Mr. Wajarapong Palakawong Na Ayudhya

• Senior Executive Vice President

01 02 01 Mr. Nattanont Meesuksabai â&#x20AC;˘ Senior Vice President - Accounting and Budget Division

02 Ms. Somsiri Yoosook â&#x20AC;˘ Senior Vice President - Finance Division

Annual Report 2011 Electricity Generating Public Co., Ltd.

01 02 03 04 01 Mr. Sakul Pochanart

02 Mr. Danuja Simasathien

03 Mr. Niwat Adirek

• Executive Vice President - Strategy and Corporate Management

04 Mr. Kiatichai Siljitsong

• Executive Vice President - Asset Management

• Executive Vice President - Business Development (Domestic)

• Executive Vice President - Business Development (International)

05 06 07 08 05 Mr. Suvapan Chomchalerm

06 Ms. Vasana Vongpormek

07 Ms. Ngamphis Chitphromphan

• Executive Vice President - Corporate Service

• Executive Vice President - Finance

08 Mr. Thongchai Chotkajornkiat

• Executive Vice President

Annual Report 2011 Electricity Generating Public Co., Ltd.

04 02 03 01 05 06 01 Ms. Warunee Tantiwong

02 Ms. Pantipa Moolasart

03 Ms. Krisna Pinkaew

• REGCO Deputy Director - Finance & Administration

• ESCO Deputy MD - Finance & Administration

• KEGCO Deputy MD - Finance & Administration

04 Mr. Narong In-Eav

05 Mr. Permask Rattana-Ubon

06 Mr. Mana Vitavasakul

• REGCO Deputy Director - Operation

• ESCO Deputy MD - Operation

• KEGCO Deputy MD - Operation

The positions of the Management and the Control Persons as of December 31, 2011 Mr. John M. Palumbo (48)

• Senior Executive Vice President - Business Development -

Mr. Voravit Potisuk (54) • Senior Executive Vice President - Business Development -

International

Domestic

• Risk Management Committee Member

• Good Corporate Governance Committee Member

• Group Business Committee Member

• EGCO Management Committee

Education • Bachelor of Science in Mechanical Engineering (Honors), Columbia - University, School of Engineering and Applied Science, New York. Working Experience 2011 - Present Director Khanom Electricity Generating Company Limited Director 2011 - Present EGCO Engineering & Service Company Limited Director 2011 - Present North pole Investment Company Limited August 2009 - 2010 Director Natural Energy Development Company Limited Director 2004 - 2010 Gulf Electric Public Company Limited Director 30 January 2007 - BLCP Power Company Limited November 2008 Director 2005 - May 2008 EGCO Joint Ventures & Development Company Limited Director 2004 - April 2007 Nam Theun 2 Power Company Limited Independent Consultant to the Managing 2003 - 2004 Director and the Head of the Southeast Asia Business China Light & Power Group (Hong Kong) Team Leader & Infrastructure Specialist 2003 - 2004 ADB Technical Assistance Program Independent Consultant to Chief 2003 Executive Officer International Power PLC. Principal and Managing Director 1995 - 2003 Delta Associates (Thailand) Limited

Education • MBA, The University of The Thai Chamber of Commerce • B.Eng. (Electrical & Communication) Chulalongkorn University • Certificate of Directors Certification Program, Thai Institute of Directors Association • Executive Leadership Program (ELP-NIDA Wharton)) Working Experience 2011 - Present Director EGCO Engineering & Service Company Limited Director 2011 - Present Khanom Electricity Generating Company Limited Director 2011 - Present Gulf Electric Public Company Limited Director, BLCP Power Company Limited 2011 - Present Director 2011 - Present Nam Theun 2 Power Company Limited Director 2010 - 2011 Quezon Generating Company Ltd, Philippines Director 2010 - 2011 Conal Holdings Corporation, Philippines Executive Vice President-Business 2004 - 2011 Development Electricity Generating Public Company Limited Senior Vice President-Engineering 1996 - 2004 Business Division Electricity Generating Public Company Limited Acting Managing Director 2002 - 2003 Egcom Tara Company Limited

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Piya Jetasanon (54)

• Senior Executive Vice President - Finance and Corporate

Mr. Chumsak Desudjit (57) • Senior Executive Vice President

Services

• Director-Rayong Power Plant

• Risk Management Committee Member

• Group Business Committee Member

• Good Corporate Governance Committee Member

• EGCO Management Committee

Education • MBA, Ramkhamhaeng University • B.A. (Economics), Thammasat University • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of TLCP Executive Development Program, Thai Listed Companies Association Working Experience 2011 - Present Director Gulf Electric Public Company Limited 2011 - Present Director, BLCP Power Company Limited 2011 - Present Director, EGCO International (BVI) Limited 2011 - Present Director North Pole Investment Company Limited 2011 - Present Director EGCO Engineering & Service Company Limited 2011 - Present Director Khanom Electricity Generating Company Limited 2007 - Present Director EGCO Cogeneration Company Limited 2007 Director, Thai LNG Power Corporation Ltd. 2005 - 2010 First Senior Vice President-Finance Electricity Generating Public Company Limited 2003 - 2005 Senior Vice President-Finance Electricity Generating Public Company Limited 1996 - 2003 Manager-Finance Division Khanom Electricity Generating Company Limited 1994 - 1996 Manager-Treasury Management Section Electricity Generating Public Company Limited

Education • B. Eng. (Mechanical Engineering), Chulalongkorn University • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate in Executive Leadership Program, Joint Program NIDA-Wharton, University of Pennsylvania • Graduate Diploma in Management of Public Economy (MPE-7), King Prajadhipok’s Institute Working Experience 2011 - Present Director, BLCP Power Company Limited 2008 - 2009 Director and Managing Director Rayong Electricity Generating Company Limited 2009 - Present Chairman, Roi-Et Green Company Limited 2009 - Present Chairman EGCO Green Energy Company Limited 2007 - Present Chairman EGCO Cogeneration Company Limited 2009 - Present Director Khanom Electricity Generating Company Limited 2009 - Present Director EGCO Engineering & Service Company Limited 2008 - 2009 Director Gulf Cogeneration Company Limited Nongkhae Cogeneration Company Limited Samutprakarn Cogeneration Company Limited 2006 - 2007 Director EGCO Cogeneration Company Limited 2001 - 2007 Deputy Managing Director Operation Group Rayong Electricity Generating Company Limited 1998 - 2000 Operation Division Manager Rayong Electricity Generating Company Limited

Mr. Chankij Jearaphunt (56)

Mr. Wajarapong Palakawong Na Ayudhya (58)

• Senior Executive Vice President

• Managing Director - Egco Engineering & Service Company

• Managing Director - Khanom Electricity Generating

Limited

Company Limited

• Risk Management Committee Member

• Group Business Committee Member

• Good Corporate Governance Committee Member

• EGCO Management Committee

Education • Master of Public Administration (MPA) National Institute of Development Administration (NIDA) • B. Eng. (Electrical Engineering), Chulalongkorn University Working Experience 2004 - Present Director and Managing Director Khanom Electricity Generating Company Limited 2004 - Present Director EGCO Engineering & Service Company Limited 2004 - September 2009 Director Rayong Electricity Generating Company Limited April 2008 - Present Director Gulf Energy Company Limited; Gulf IPP Company Limited; and Gulf Power Generation Company Limited April 2007 - April 2009 Chairman Roi-Et Green Company Limited; and EGCO Green Energy Company Limited 2002 - April 2008 Director Gulf Cogeneration Company Limited; Nongkhae Cogeneration Company Limited Samutprakarn Cogeneration Company Limited 2006 - April 2007 Director Roi-Et Green Company Limited; and EGCO Green Energy Company Limited 1998 - 2004 Deputy Managing Director-Operation, Khanom Electricity Generating Company Limited

Education • Bachelor Degree of Mechanical Engineering, Chulalongkorn University • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of NIDA Executive Leadership Program, Joint Program NIDA-Wharton of University of Pensylvania • Certification of The Senior Executive Program, Sasin Graduate Institue of Business Working Experience 2011 - Present Director Khanom Electricity Generating Company Limited 2011 - Present Director Egco Engineering and Service Company Limited March 2011 - Present Director Covanta Philippines Operating Inc. March 2011 - Present Managing Director EGCO Engineering & Service Co.,Ltd. May 2008 - Present Chairman, EGCOM Tara Co., Ltd. November 1999 - Director, Agro Energy Co.,Ltd Present May 1997 - Deputy Managing Director-Operation February 2011 EGCO Engineering & Service Co.,Ltd.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Mr. Suvapan Chomchalerm (51)

• Executive Vice President - Finance

Education • M.Sc. (Accounting), Thammasat University • B.Sc. (Accounting), Chulalongkorn University Working Experience May 2010 - May 2011 Deputy Managing Director & Chief Financial Officer (EGCO’s Representative) BLCP Power Limited 2000 - April 2010 Senior Vice President-Accounting and Budget Division Electricity Generating Public Company Limited 1994 - 2000 Manager-Accounting and Budget Analysis Section, Accounting and Budget Division

Mr. Nattanont Meesuksabai (51)

• Senior Vice President - Accounting and Budget Division

Education • Master of Business Administration (MBA), Chulalongkorn Univerity • B.Sc. (Cost Accounting), Chulalongkorn University Working Experience 2011 - Present Senior Vice President-Accounting and Budget Division Manager Electricity Generating Public Company Limited 2009 - April 2011 Administration Division Manager EGCO Engineering and Service Company Limited 2005 - 2009 Internal Audit Section Manager Electricity Generating Public Company Limited 1997 - September 2005 Accounting Section Manager Electricity Generating Public Company Limited

Ms. Somsiri Yoosook (47)

• Senior Vice President - Finance Division

Education • Master of Business Administration (Finance), Youngstown State University U.S.A. • Bachelor of Science (Accounting) (2nd Class Honors), Kasetsart University Working Experience 2011 - Present Senior Vice President-Finance Electricity Generating Public Company Limited 2003 - April 2011 Vice President-Subsidiaries Finance Electricity Generating Public Company Limited 2001 - 2002 Vice President-Project Finance Electricity Generating Public Company Limited 1996 - 2003 Manager-Loan Section Khanom Electricity Generating Company Limited 1994 - 1995 Manager-Disbursement Section Electricity Generating Public Company Limited

Name Mr. Pornchai Rujiprapa Mr. Aswin Kongsiri Dr. Chaipat Sahasakul Pol Lt Gen Pijarn Jittirat Mr. Somphot Kanchanaporn Mr. Phaiboon Siripanoosatien Mr. Thanapich Mulapruk Mr. Kulit Sombatsiri Mr. Surasak Supavititpatana Mr. Toshiro Kudama Mr. Akio Matsuzaki Mr. Hideaki Tomiku Mr. Ryota Sakakibara Mr. Vinit Tangnoi Mr. Sahust Pratuknukul Mr. John Palumbo Mr. Voravit Potisuk Mr. Piya Jetasanon Mr. Chumsak Desudjit Mr. Chankij Jearaphunt Mr. Wajarapong palakawong Na Ayudhaya Mr. Suvapan Chomchalerm Miss. Somsiri Yoosook Mr. Nuttanont Meesuksabai Miss Busakorn Kakanumpornwong

Major Shareholders Subsidiaries (Core Business) Subsidiaries EGCO 1 2 3 4 5 6 7 DDD, XX DDD DD, I, N, CC I, AA I, C, N I, A I, N, C I, A D, C D D, X Deputy Governor D D D, NN, X D, X D, N Engineering Level 14 D, President, X, C, SS, GG Engineering Level 14 DDD DDD SEVP-Business Development- D D International , S,G SEVP-Business D Development-Domestic, S,G SEVP-Finance & Corporate D D D D D Services, S, G SEVP, S, G D DDD D DDD SEVP, S, G D, Managing Director D SEVP, S, G D, Managing Director EVP SVP-Finance SVP-Accounting and Budget Company Secretary, SVP-Corporate Secretary

DDD

D D D D

8 9 10 11 12 DDD D D

16 D

17 D

19 D

Joint Ventures 18 D

DDD

25 26 27 D D DDD

24 D

Remark A. DDD = Chairman DD = Vice Chairman D = Director XX = Chairman of Investment Committee X = Investment Committee Member I = Independent Director AA = Chairman of Audit Committee A = Audit Committee Member NN = Chairman of Nomination and Remuneration Committee N = Nomination and Remuneration Committee Member CC = Chairman of Corporate Governance and Social Responsibility Committee C= Corporate Governance and Social Responsibility Committee Member SS = Chairman of Group Business Committee S = Group Business Committee Member GG = Chairman of Good Corporate Governance Committee G = Good Corporate Governance Committee Member B. 1 = Electricity Generating Authority of Thailand 8 = North Pole Investment Co., Ltd. 15 = Gulf IPP Co., Ltd. 22 = Southern Philippines Power Corporation 2 = TEPDIA Generating B.V. 9 = Roi-Et Green Co., Ltd. 16 = GPI Quezon Ltd. 23 = Alto Power Management Corporation 3 = Khanom Electricity Generating Co., Ltd. 10 = Nam Theun 2 Power Co., Ltd. 17 = Quezon Generating Co., Ltd. 24 = Peral Energy Philippines Operating Inc. 4 = EGCO Cogeneration Co., Ltd. 11 = Gulf Electric Public Company Limited 18 = Quezon Power Inc. 25 = BLCP Power Limited 12 = Gulf Power Generation Co., Ltd. 19 = Conal Holdings Corporation 26 = Natural Energy Development Co., Ltd. 5 = EGCO Engineering and Service Co., Ltd. 6 = EGCO International (BVI) Ltd. 13 = Gulf Cogeneration Co., Ltd. 20 = Northern Mindanao Power Corporation 27 = Egcom Tara Co., Ltd. 7 = EGCO Green Energy Co., Ltd. 14 = Gulf Energy Co., Ltd. 21 = Alsing Power Holdings, Inc.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

The Positions of EGCOâ&#x20AC;&#x2122;s Management and the Control Persons in the Subsidiaries and Other Related Companies as of December 31, 2011

56 Annual Report 2011 Electricity Generating Public Co., Ltd.

Name Mr. Sahust Pratuknukul Mr. Piya Jetasanon Mr. John Palumbo Mr. Voravit Potisuk Mr. Chumsak Desudjit Mr. Wajarapong Palakawong Na Ayudhya Mr. Chankij Jearaphunt Mr. Mana Vitvaskul Mrs. Krisna Pinkaew Mr. Tanit Kalunkul Mr. Amnat Tippayasak Mr. Apichai Komhint Mr. Pairote Boonmak

3 D

1 2 DD D D D DD D D, Managing Director D

5 DD

6 DD

1 2 3 4 5

Name Mr. Chumsak Desudjit Mrs. Wimolwan Sasanawin Mr. Piya Jetasanon Mr. Supoth Chantavilartkul Mr. Yasuhiro Koide 1 D D 2 D D

5 = Egcom Tara Co., Ltd. 6 = Gulf Electric Public Co., Ltd. 7 = EGCO International (BVI) Ltd. 8 = North Pole Investment Co.,Ltd.

EGCO Cogen DD D D D, General Manager D

Remark A. DD = Chairman D = Director B. 1 = Khanom Electricity Generating Co., Ltd. 2 = EGCO Engineering & Service Co., Ltd. 3 = EGCO Green Energy Co., Ltd. 4 = Roi-Et Green Co., Ltd.

3 DD D D

6 D

7 D

9 D

10 D

13 = Northern Mindanao Power Corporation 14 = Quezon Generating Co., Ltd.

8 D

Other Companies in EGCO Group

9 = Nam Theun 2 Power Co., Ltd. 10 = BLCP Power Limited 11 = Gulf Energy Co., Ltd. 12 = Conal Holdings Corporation

4 DD D

14 D

15 D D D

17 DD

18 D D

16 = Eastern Water Resources Development and Management Public Co., Ltd. 17 = Natural Energy Development Co., Ltd. 18 = North Pole Investment Co., Ltd.

Other Companies in EGCO Group 7 DD D D

11 = Samutprakarn Cogeneration Co., Ltd. 12 = Gulf Energy Co., Ltd. 13 = Gulf IPP Co., Ltd. 14 = Nam Thuen 2 Power Co., Ltd. 15 = BLCP Power Limited Ltd.

4 DD

The Positions of EGCO Cogen’s Management and the Control Persons in EGCO Group Companies as of December 31, 2011

6 = Egcom Tara Co., Ltd. 7 = Gulf Electric Public Co., Ltd. 8 = Gulf Power Generation Co., Ltd. 9 = Gulf Cogeneration Co., Ltd. 10 = Nongkhae Cogeneration Co., Ltd.

KEGCO DD D D D D D D, Managing Director Deputy Managing Director - Operation Deputy Managing Director - Finance and Administration Maintenance Division Manager Operation Division Manager Account & Budget Division Manager General Affairs Division Manager

Remark A. DD = Chairman D = Director B. 1 = EGCO Cogeneration Co., Ltd. 2 = EGCO Engineering & Service Co., Ltd. 3 = EGCO International (BVI) Ltd. 4 = EGCO Green Energy Co., Ltd. 5 = Roi-Et Green Co., Ltd.

1 2 3 4 5 6 7 8 9 10 11 12 13

The Positions of KEGCO’s Management and the Control Persons in EGCO Group Companies as of December 31, 2011

EGCO’s Group Structure and Shareholders As at 31 December 2011 EGAT

TEPDIA

25.41%

General Public

23.94%

50.65%

100.0%

74.0%

80.0%

100.0%

ESCO

EGCO-Rayong

EGCO Green

EGCO Cogen

KEGCO

95.0% 74.2% Egcom Tara 100.0%

Roi-Et Green

100.0%

GCC

NKCC

SCC

GEN

GYG

100.0% GIPP

100.0% GPG

50.0%

100.0%

33.3%

50.0%

35.0%

18.7%

GEC

North Pole

NED

BLCP

NTPC

East Water

100.0%

EGCO BVI

NED Wind

99.0%

1.0%

40.0%

100.0%

Conal

GPI-I

Coop

10.0%

100.0%

60.0%

80.0%

64.5%

APMC

Alsing

NMPC

90.0%

GPIQ

36.2% 55.0%

55.0%

SPPC

WMPC

QGC

73.3% QPI

98.0% QPL

26.7%

100.0%

OPDCI

PEPOI

EGCOâ&#x20AC;&#x2122;s Organization Structure As at 31 December 2011

Corporate Governance & Social Responsibility Committee Nomination & Remuneration Committee Investment Committee Audit Committee

Corporate Secretary Internal Audit

Rayong Power Plant

SEVP Business Development International

SEVP Business Development Domestic

EVP BD (International)

EVP BD (Domestic)

Project Developers

Board of Directors

President Controller Seconded Management To Subsidiaries

SEVP Finance & Corp Services EVP Strategy & Corporate Management

EVP Finance

EVP Corporate Services

Asset Management

Finance

Procurement & Admin

Corporate Planning

Project Management

Accounting And Budget

Legal

Human Resources

MIS

Corporate Communications

EVP Asset Management

Engineering

Report Functionally Report Administratively

Annual Report 2011 Electricity Generating Public Co., Ltd.

â&#x20AC;&#x153;...EGCO is a holding company, its main source

of revenue is from the dividend income from subsidiaries and share

of profits from joint ventures...â&#x20AC;?

Business Characteristics The Electricity Generating Public Company Limited or EGCO is the first independent power producer in Thailand incorporated on May 12, 1992 by the Electricity Generating Authority of Thailand (EGAT). Such incorporation marked the commencement of the Thai government’s privatization initiatives to allow broader private sector investment in the electricity generating sector. On March 23, 1994, EGCO was transformed into a public company and then listed on the Stock Exchange of Thailand (SET) on January 16, 1995. Since EGCO is a holding company, its main source of revenue is from the dividend income from subsidiaries and share of profits from joint ventures which are located in both Thailand and the Asian region. EGCO Group companies either operate in the power sector with long term Power Purchase Agreement (PPA) or conduct other related business. Business Lines EGCO businesses can be categorized into 4 groups as follows : 1.

Independent Power Producer (IPP) Group : This Group comprises 4 power plants being Rayong Power Plant, Khanom Electricity Generating Co., Ltd., BLCP Power Ltd., and Gulf Power Generation Co., Ltd. The combined megawatt equity is 3,453 megawatt which accounts for 78.12% of EGCO’s total asset capacity. The combined megawatt equity is less than last year by 75 megawatt due to the expiration of PPA of Khanom power plant Unit 1on June 19, 2011.

Small Power Producer (SPP) Group : This Group comprises 7 power plants being EGCO Cogeneration Co., Ltd., Roi-Et Green Co., Ltd., Gulf Cogeneration Co., Ltd., NongKhae Cogeneration Co., Ltd., Samutprakarn Cogeneration Co., Ltd., Gulf Yala Green Co., Ltd. and Natural Energy Development Co., Ltd. The combined capacity is 295.73 megawatt equity, representing 6.69% of EGCO’s total asset capacity. The combined megawatt equity is more than the last year by 2.67 megawatt due to Commercial Operation Date (COD) of the first stage of Lopburi Solar power plant on December 22, 2011.

Overseas Power Producer Group : This Group comprises 4 power plants being Western Mindanao Power Corporation, Southern Philippines Power Corporation, Quezon Power (Philippines) Ltd., Co., in Philippines and Nam Theun 2 Power Co., Ltd., in Lao PDR. The combined megawatt equity is 671.24 megawatt, representing 15.19% of EGCO’s total asset capacity. The combined megawatt equity is higher than last year by 131.28 megawatt due to the additional acquisition of 26.125% interest in Quezon Power (Philippines) Ltd.,Co., on March 25, 2011.

Annual Report 2011 Electricity Generating Public Co., Ltd.

4. Other Business Group : This Group comprises 2 operation and maintenance companies being EGCO Engineering & Service Co., Ltd., and Pearl Energy Philippines Operating, Inc. In addition, there are 2 water supply companies being Egcom Tara Co., Ltd., and the Eastern Water Resources Development and Management Public Co., Ltd.

Details of each project are shown in the table at the end of this part.

Significant Events As at December 31, 2011, EGCO Group operated 15 power plants with 4,419.99 megawatt equity. The power sold to EGAT under long term PPAs were 3,864.19 megawatt which accounts for 12.29% of the national installed capacity of 31,446.71 megawatt. Highlights of the events in 2011 were as follows : 1. January 4, 2011 and February 11, 2011, EGAT awarded EGCO the licenses for 2010 SPP Cogeneration projects in accordance with the resolution of the Energy Regulatory Commission. The projects are TJ Cogen, TP Cogen and SK Cogen, which are contracted with EGAT of 90 megawatt each. 2. March 1, 2011, EGCO acquired a 12.50% interest in Xayaburi Power Co., Ltd. (Xayaburi) from CH. Karnchang PCL. Xayaburi plans to develop a 1,285 megawatt run-of-river hydroelectric power plant on the Mekong River in Laos PDR. The COD is currently scheduled for January 2019. 3.

March 25, 2011, EGCO completed the acquisition of an additional 26.125% effective interest in Quezon Power (Philippines) Ltd., Co., (QPL) bringing EGCO’s total ownership interest in QPL to 52.125% resulted in EGCO’s Megawatt equity increase of 131.28 megawatt. In addition, EGCO completed the acquisition of 100% of the outstanding shares of Covanta Philippines Operating Inc. (CPOI), the entity which provides operation and maintenance services to Quezon power plant through a long-term operation and maintenance agreement. Later on May 3, 2011, CPOI changed its name to Pearl Energy Philippines Operating, Inc. (PEPOI).

4. March 29, 2011, EGCO Engineering and Service Co., Ltd., a subsidiary of EGCO signed the operation and maintenance services agreement for a 110 megawatt SPP Cogeneration power plant which is owned by Navanakorn Electric Co.,Ltd. and Toyo-Thai Corporation PCL. 5. April 1, 2011, OneEnergy Thailand Ltd. transferred all of its shares in EGCO to TEPDIA Generating B.V., a joint venture vehicle owned by Tokyo Electric Power Co., and Diamond Generating Asia, Ltd., a Mitsubishi Corporation’s subsidiary. 6. June 19, 2011, Khanom power plant Unit 1, a 75 megawatt barge-mounted power unit, was permanently shut down due to the expiration of PPA. 7. November 25, 2011, three SPP Cogeneration projects entered into the PPAs with EGAT. Details are as below : 7.1 TJ Cogen, a 125 megawatt SPP Cogeneration project located in Pathumthani province, entered into the PPA to sell 90 megawatt to EGAT for a 25-year term with the Scheduled Commercial Operation Date (SCOD) on June 1, 2017. 7.2 TP Cogen, a 125 megawatt SPP Cogeneration project located in Ratchaburi province, entered into the PPA to sell 90 megawatt to EGAT for a 25-year term with the SCOD on June 1, 2018. 7.3 SK Cogen, a 125 megawatt SPP Cogeneration project located in Ratchaburi province, entered into the PPA to sell 90 megawatt to EGAT for a 25-year term with the SCOD on June 1, 2019.

8. December 22, 2011 the Lopburi Solar power plant, a 73 DC/55 AC megawatt thin film photovoltaic solar farm in Lopburi province, owned by Natural Energy Development Co., Ltd., started supplying electricity under the first stage (the 11 DC/8 AC megawatt) to EGAT. Table 1. EGCOâ&#x20AC;&#x2122;s Business Line :

1. IPP Group 1.1 Rayong Power Plant Rayong power plant is the first IPP in Thailand located in Rayong province. It is a 1,232 megawatt power plant comprising four

identical 308 megawatt combined cycle power blocks using natural gas as a primary fuel to generate and sell all net electricity

output to EGAT under the 20-year Power Purchase Agreement (PPA). In 2011, Rayong power plant generated and sold 2,126.70 million kilowatt-hour electricity output to EGAT. Its annual average

Equivalent Availability Factor (EAF) was 93.09%. 1.2 Khanom Electricity Generating Company Limited (KEGCO) EGCO directly holds a 100% stake in KEGCO which owns and operates Khanom power plant which is known as the largest

independent power plant in the southern area of Thailand located in Nakhon Sri Thammarat province. It is a 824 megawatt power

plant combining of two 75 megawatt barge-mouthed power units and one 674 megawatt combined cycle power block using

natural gas as a primary fuel to generate and sell all net electricity output to EGAT under the 15-year PPA for barge-mouthed

power unit 1 and the 20-year PPA for barge-mouthed power unit 2 and combined cycle power block. On June 19, 2011, barge-mouthed power unit 1 was permanently shut down due to the expiration of the PPA. In 2011, Khanom power plant generated and sold 5,816 million kilowatt-hour electricity output to EGAT. Its annual average EAF

was 95.28%. 1.3 BLCP Power Limited (BLCP) EGCO directly holds a 50% stake in BLCP which owns and operates an IPP coal-fired power plant located in Rayong province.

It is a 1,434 megawatt power plant comprising two identical 717 megawatt pulverized coal-fired power units using high quality

bituminous imported from Australia as a primary fuel to generate and sell all net electricity output to EGAT under the 25-year PPA. In 2011, BLCP power plant generated and sold 10,616.59 million kilowatt-hour electricity output to EGAT, while its annual average

EAF for unit 1 and unit 2 were 93.79% and 92.74%, respectively. 1.4 Gulf Power Generation Company Limited (GPG) EGCO indirectly holds a 50% stake in GPG via its 50% ownership in Gulf Electric Public Company Limited (GEC). GPG owns and

operates an IPP gas-fired power plant, called Kaeng Khoi 2 (KK2), located in Saraburi province. It is a 1,510 megawatt power

plant composed of two 755 megawatt combined cycle power blocks using natural gas as a primary fuel to generate and sell all

net electricity output to EGAT under the 25-year PPA. In 2011, KK2 power plant generated and sold 8,813.30 million kilowatt-hour electricity output to EGAT. The annual average EAF for block 1 and block 2 were 93.60% and 85.62%, respectively.

Annual Report 2011 Electricity Generating Public Co., Ltd.

2. SPP Group

2.1 EGCO Cogeneration Company Limited (EGCO Cogen) EGCO directly holds an 80% stake in EGCO Cogen which owns and operates a SPP cogeneration power plant located in Rayong

province. It is a 117 megawatt cogeneration power plant with steam supply of 30 tons per hour using natural gas as a primary

fuel. EGCO Cogen can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed a 60

megawatt contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial

users in Rayong Industrial Park under the long-term PPAs. In 2011, EGCO Cogen power plant generated and sold 709.92 million kilowatt-hour electricity output to its customers. Its annual

average EAF was 98.12% and the steam output to the industrial user was 52,218 tons. 2.2 Roi-Et Green Company Limited (Roi-Et Green) EGCO indirectly holds a 70.30% stake in Roi-Et Green via EGCO Green Company Limited. Roi-Et Green owns and operates a

SPP renewable power plant located in Roi-Et province. It is a 9.9 megawatt biomass-fired power plant using rice husk as a

primary fuel. Under the SPP firm renewable program, it signed an 8.8 megawatt contracted capacity with EGAT under the 21-year

PPA. In 2011, Roi-Et Green power plant generated and sold 60.35 million kilowatt-hour electricity output to EGAT, while its annual

average EAF was 86%. 2.3 Gulf Cogeneration Company Limited (GCC) EGCO indirectly holds a 50% stake in GCC via GEC. GCC owns and operates a SPP cogeneration power plant located in

Saraburi province. It is a 110 megawatt cogeneration power plant with steam supply of 16 tons per hour using natural gas as a

primary fuel. GCC can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed 90 megawatt

contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users under the

long-term PPAs. In 2011, GCC power plant generated and sold 744.31 million kilowatt-hour electricity output to the customers, while its annual

average EAF was 98.16% and the steam output to the industrial users was 126,528 tons. 2.4 NongKhae Cogeneration Company Limited (NKCC) EGCO indirectly holds a 50% stake in NKCC via GEC. NKCC owns and operates a SPP cogeneration power plant located in

Saraburi province. It is a 126 megawatt cogeneration power plant with steam of 24 tons per hour using natural gas as a primary

fuel. NKCC can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed 90 megawatt

contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users under the

long-term PPAs. In 2011, NKCC power plant generated and sold 842.34 million kilowatt-hour electricity output to the customers, while its annual

average EAF was 98.45% and the steam output to the industrial users was 151,630 tons. 2.5 Samutprakarn Cogeneration Company Limited (SCC) EGCO indirectly holds a 50% stake in SCC via GEC. SCC owns and operates a SPP cogeneration power plant located in

Samutprakarn province. It is a 126 megawatt cogeneration power plant with steam of 24 tons per hour using natural gas as a

primary fuel. SCC can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed 90 megawatt

contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users under the

long-term PPAs. In 2011, SCC power plant generated and sold 817.53 million kilowatt-hour electricity output to the customers, while its annual

average EAF was 98.63% and the steam output to the industrial users was 140,586 tons.

2.6 Gulf Yala Green Company Limited (GYG) EGCO indirectly holds a 50% stake in GYG via GEC. GYG owns and operates a SPP renewable power plant located in Yala

province. It is a 23 megawatt biomass-fired power plant using parawood residue as a primary fuel. Under the SPP firm renewable

program, it signed 20.2 megawatt contracted capacity with EGAT under the 25-year PPA. In 2011, GYG power plant generated and sold 157.99 million kilowatt-hour electricity output to EGAT, while its plant annual

average EAF was 94.33%. 2.7 Natural Energy Development Company Limited (NED) EGCO directly holds a 33.33% stake in NED which owns and operates a 73 DC/55 AC megawatt thin film solar power plant

(Lopburi Solar) located in Lopburi province. NED signed a PPA with EGAT for the sale of all net electricity output generated.

The term of the PPA is 5 years from the Commercial Operation Date (COD) and will be renewed for 5-year contract each time.

NED is subsidized with adder of 8 baht per kilowatt-hour on top for 10 years of its wholesale tariff. At December 31, 2011 the overall progress of construction project was 95% a slightly ahead target. The first stage of 11 DC/8 AC

megawatt achieved the official COD on December 22, 2011 that was slightly delayed from the scheduled COD in November

2011.The full scale generation of all seven phases are planned achieve within May 2012.

3. Overseas Group

3.1 Conal Holdings Corporation (CHC) EGCO indirectly holds a 40% stake in CHC via EGCO International (B.V.I.) Limited (EGCO BVI). CHC is the largest IPP in the

Mindanao Island, Philippines. CHC holds the shares in 2 electricity generating companies and 1 operation and maintenance

service company. Western Mindanao Power Corporation (WMPC) EGCO indirectly holds a 17.6% stake in WMPC via CHC. WMPC owns and operates an IPP power plant located in Zamboanga

city, Philippines. It is a 109.6 megawatt diesel power plant using a bunker-c fuel oil as a primary fuel. Under the Build-Operate-

Own (B-O-O) scheme, it generates and sells all net electricity output to National Power Corporation (NPC) under the 18-year

Energy Conservation Agreement (ECA). In 2011, WMPC power plant generated and sold 442.88 million kilowatt-hour electricity output to NPC, while its annual average

EAF was 91.41%. Southern Philippines Power Corporation (SPPC) EGCO indirectly holds a 17.6% stake in SPPC via CHC. SPPC operates and owns an IPP power plant called Gen Santos located

in Sarangani province, Philippines. It is a 54.8 megawatt diesel power plant using bunker-c fuel oil as a primary fuel. Under the

B-O-O scheme, it generates and sells all net electricity output to NPC under the 18-year ECA. In 2011, SPPC power plant generated and sold 268.43 million kilowatt-hour electricity output to NPC, while its annual average

EAF was 90.26%. Alto Power Management Corporation (APMC) APMC provides operation and maintenance services including plant management and consulting to the two above-mentioned

power plants and also third-party power plants. 3.2 Quezon Power (Philippines), Limited Company (QPL) EGCO indirectly holds 52.13% stake in QPL via North Pole Investment Company Limited (North Pole) and EGCO BVI. QPL owns

and operates a 502.50 megawatt pulverized coal-fired power plant using the high quality coal imported from Indonesia as a

primary fuel. Under the 25-year PPA, it generates and sells net electricity output to Manila Electric Company (MERALCO), the

countryâ&#x20AC;&#x2122;s largest power distribution company, and also provides additional load stability of Luzon power grid.

Annual Report 2011 Electricity Generating Public Co., Ltd.

In 2011, Quezon power plant generated and sold 3,269.31 million kilowatt-hour electricity output to MERALCO, while its annual

average EAF was 86.52%. 3.3 Nam Theun 2 Power Company Limited (NTPC) EGCO directly holds 35% stake in NTPC, which owns and operates a 1,086.80 megawatt hydroelectric power plant located in

Lao PDR. It generates and sells 948 megawatt contracted capacity to EGAT and 75 megawatt contracted capacity to Electricite

du Laos (EDL) under the 25-year PPAs. In 2011, NT2 power plant generated and sold 5,956.68 million kilowatt-hour electricity output to EGAT and 404.16 million kilowatt hours electricity output to EDL.

4. Other Businesses

4.1 EGCO Engineering & Service Company Limited (ESCO) ESCO is EGCOâ&#x20AC;&#x2122;s wholly owned subsidiary which provides operation, maintenance, engineering and construction services to

power plants, petrochemical plants, oil refineries and other industries including the Group companies. 4.2 Egcom Tara Company Limited (Egcom Tara) As at December 31, 2011 EGCO holds 74.19% stake in Egcom Tara via ESCO. Under a 30-year agreement, Egcom Tara

produces tap water according to Thai Industrial Standard (TIS) and supplies to the 3 water stations of the Provincial Waterworks

Authority of Thailand (PWA), namely, Lak Muang Water Station, Damnoen Saduak Water Station and Samut Songkhram Water

Station. 4.3 Eastern Water Resources Development and Management Public Company Limited (East Water) As at December 31, 2011 EGCO holds 18.72% of shares in East Water which is responsible for developing and operating the

main raw water pipe network in the Thailand Eastern Seaboard area covering 7 provinces namely, Rayong, Chonburi,

Chachoengsao, Prachinburi, Srakaew, Chantaburi and Trad.

Revenue Structure

Product

Transaction

Service

2011

(Million Baht) 2010 (Restated)

2009

Shareholding Revenue % Revenue % Revenue

Electricity IPP 33.27% 35.25% 38.31% /A Rayong power plant (formerly REGCO)

Capacity Charge 2,201.28 16.54% 2,454.12 16.25% 3,674.60 23.30% Energy Charge 57.05 0.43% 81.16 0.54% 47.49 0.30% KEGCO 99.99% Capacity Charge 2,098.32 15.77% 2,772.83 18.36% 2,304.26 14.61% Energy Charge 72.08 0.54% 15.61 0.10% 13.55 0.09% 17.95% 15.26% 14.12% SPP EGCO Cogen 80.00% Energy Charge 2,064.46 15.51% 2,002.04 13.25% 1,927.49 12.22% Roi-Et Green 70.30% Energy Charge 324.60 2.44% 302.85 2.01% 298.94 1.90% Service

ESCO PEPOI/B

Water

Egcom Tara/C

Interest income

EGCO 141.21 1.06% 67.05 0.44% 66.50 0.42% Rayong power plant 4.38 0.03% 5.37 0.04% 9.03 0.06% KEGCO 9.71 0.07% 6.56 0.04% 10.15 0.06% EGCO cogen, EGCO Green, ESCO, 21.10 0.16% 9.90 0.07% 11.71 0.07% Egcom Tara, PEPOI, North Pole/D

Others

EGCO 208.91 1.57% 236.16 1.56% 175.46 1.11% Rayong power plant 49.20 0.37% 47.99 0.32% 55.38 0.35% KEGCO 1.12 0.01% 3.08 0.02% 9.34 0.06% EGCO cogen, EGCO Green, ESCO, Egcom Tara 13.48 0.10% 10.08 0.07% 11.88 0.08%

99.99% 100.00% 74.19%

375.93 2.82% 721.54 4.78% 611.41 3.88% 198.75 1.49% 268.56 2.02%

258.83 1.71%

267.33 1.70%

Share of BLCP 50.00% 1,849.03 13.89% 2,851.98 18.88% 3,226.45 20.46% profit (loss) GEC 50.00% 1,836.18 13.80% 2,450.32 16.22% 2,535.21 16.08% NED 33.33% (28.21) (0.21%) (22.69) (0.15%) (10.91) (0.07%) 35.00% 1,045.62 7.86% 107.27 0.71% (38.83) (0.25%) NTPC/E Conal 40.00% 19.66 0.15% 139.58 0.92% 63.07 0.40% 52.125% 477.41 3.59% 582.76 3.86% 498.36 3.16% Quezon/F

Total revenues (revenues item in consolidated) Notes

13,309.84

100%

15,104.40

100%

15,767.89

100%

The acquisition of entire business of REGCO to EGCO occurred in October 2009, which here in after referred to Rayong power plant EGCO purchased ordinary shares in PEPOI on March 25, 2011, increasing its ownership 100% /C ESCO purchased additional ordinary shares in Egcom Tara on January 6, 2010, increasing its ownership interest from 70.07% to 74.19% /D EGCO purchased ordinary shares in North Pole on July 16, 2010, increasing its ownership 100% /E EGCO purchased additional ordinary shares in NTPC on September 29, 2010, increasing its ownership interest from 25% to 35% /F EGCO purchased additional ordinary shares in Quezon on March 25, 2011, increasing its ownership interest from 26% to 52.125%

Annual Report 2011 Electricity Generating Public Co., Ltd.

Power Industry and Competition The Thailand economy in 2011 is growth by 1.1 percent since the cold weather in the early year and the flood crisis at the end of year have severely affected to the manufacturing industry, agriculture to decline. The demand for electricity this year nearly from last year. The peak demand of 23,900.21 megawatts occurred on May 24, 2011, 0.46% lower than the peak demand of 24,009.90 MW in 2010. (Figure 1) Figure 1: Peak Power Demand Monthly 2010 - 2011

Peak Demand 2010 - 2011

26,000 25,000 24,000 23,000 22,000 21,000 20,000 19,000 18,000 17,000

Jan

Feb

Mar

Apr

May 2010

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2011

Source: EGAT As regards the power consumption in 2011, the total electricity sold by the Electricity Generating Authority of Thailand (EGAT) was 0.84% lower from that of 2010. In 2012, EGAT expects the demand for electricity demand will growth more than 4 percent from 2011 after recovering from the flooding. The factory especially the automotive parts industry sector, the electronics sector to accelerate the return to production early year. The Thailand Power Development Plan is revised by The Ministry of Energy.

EGCO’s Competitiveness EGCO is the first independent power producer in Thailand. EGCO is a holding company with investment in power generation and supply pass subsidiaries and Joint Venture Companies. As a prototype privatization, EGCO has enjoyed several privileges initiated to encourage the private sector’s participation which makes EGCO to possess advantage in view of the following

1. EGCO is creditable among the financial source and investors. 2. EGCO’s personnel are transferred from EGAT, which is the country’s sole source of personnel in power industry, thus contributing to efficient operations. Its rivals, which are just set up, on the contrary, need to recruit personnel that may have no enough expertise or be costly or take time for training.

Opportunity of new entrants At present, the opportunity for new entrepreneurs, especially the international power company, to enter this industry is possible. However, there are several obstacles due to the following :

1. Investment capital restriction : Power plant construction needs huge investment capital New entrants must have a very strong financial position.

2. Human resource restriction : Personnel with expertise in this area is scarce, so recruitment is difficult and costly. Currently, it is possible for potential international power companies to play more roles in Thailand’s power industry.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Shareholder and Management Structure EGCO is a listed company on the Stock Exchange of Thailand. Details of the registered capital are as shown in the following table.

Category

Registered Capital Paid Up Capital

No. of Shares (million shares)

530 526.465

Amount (million baht)

5,300 5,264.65

The top ten shareholders as of September 6, 2011 the closing date of shareholders’ roster for the right to receive the interim dividend payment on September 16, 2011 are as follows.

No.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Shareholders /1

Electricity Generating Authority of Thailand TEPDIA Generating B.V. Littledown Nominees Limited Bangkok Life Assurance Public Company Limited Social Security Office (Two-types) HSBC (SINGAPORE) NOMINEES PTE LTD Thanachart Life Assurance Company Limited THE BANK OF NEW YORK (NOMINEES) LIMITED Chase Nominees Limited 15 STATE STREET BANK EUROPE LIMITED

% of Total

133,773,662 126,054,178 28,943,528 10,019,300 6,387,300 5,024,150 5,019,300 4,632,091 4,330,760 4,165,941

25.410 23.944 5.498 1.903 1.213 0.954 0.953 0.880 0.823 0.791

Remarks /1 Excluding 63,052,929 shares under Thai NVDR which account for 11.977% of the total outstanding shares. Such NVDR holders do not have the right to vote at the shareholders’ meeting. Information of investors under Thai NVDR Co., Ltd. is shown on the website : www.set.or.th/nvdr/

The ultimate shareholders of EGCO’s major controlling shareholders are as follows. 1. Electricity Generating Authority of Thailand (EGAT) : EGAT is a state utility with the objectives to generate, purchase, transmit and distribute electricity. EGAT also provides the operation and maintenance services and invests in electricity related business. EGAT holds 25.41% of EGCO’s outstanding shares. EGAT has four representative directors of all 15 directors in EGCO. 2. Diamond Generating Asia (DGA), a Mitsubishi Corporation (MC)’s subsidiary, MC is a technology development and trading company in industrial and energy sector. MC indirectly holds 11.972% of EGCO’s outstanding shares via TEPDIA Generating B.V.. MC has two representative directors of all EGCO’s 15 directors. 3. Tokyo Electric Power Company (TEPCO) : TEPCO is the largest electric power company in Japan and the largest privately owned electric utility in the world. TEPCO indirectly holds 11.972% of EGCO’s outstanding via TEPDIA Generating B.V.. TEPCO has two representative directors of all EGCO’s 15 directors. Organization Structure At the top of EGCO’s organization structure is the Board of directors, the standing committees, the President and the top management. 1. Board of Directors

The Board of Directors has main responsibility to conduct business in a way that will benefit EGCO, shareholders and stakeholders including the employees and communities where EGCO operates its business. In this regard, the Board works with the Management in formulating EGCO’s vision and policy and to approve the corporate budget.

Currently, the Board comprises 15 members :

• 14 non-executive directors (including six independent directors), and

• President, the only one executive member.

Annual Report 2011 Electricity Generating Public Co., Ltd.

The Board of Directors and their share ownership in EGCO as of December 31, 2011 are as listed below :

Appointment No. Name Position Date

1 Mr. Pornchai Rujiprapa 2 Mr. Aswin Kongsiri 3 Mr. Chaipat Sahasakul 4 Mr. Thanapich Mulapruk 5 Police Lieutenant General Pijarn Jittirat 6 Mr. Somphot Kanchanaporn 7 Mr. Phaiboon Siripanoosathien 8 Mr. Surasak Supavitipatana 9 Mr. Kulit Sombatsiri 10 Mr. Hideaki Tomiku 11 Mr. Toshiro Kudama 12 Mr. Akio Matsuzaki 13 Mr. Ryota Sakakibara 14 Mr. Vinit Tangnoi1 15 Mr. Sahust Pratuknukul2

No. of shares

December December Increase

31, 2011 31, 2010 (Decrease)

Chairman January 1, 2009 Independent Director April 24, 2009 / Vice Chairman Independent Director April 21, 2011 Independent Director April 24, 2009 Independent Director April 24, 2009 Independent Director Independent Director Director Director Director Director Director Director President / Director President

April 22, 2010 April 21, 2011 November 16, 2011 December 13, 2011 April 22, 2010 February 28, 2011 February 28, 2011 February 28, 2011 April 22, 2010 April 22, 2010

- -

- - -

- - - - - - - - - 1,890

- - - - - - - - - -

Remark 1 Mr. Vinit Tangnoiâ&#x20AC;&#x2122;s contract as President expired on September 30, 2011. However, he continued his directorship until his resignation on January 1, 2012. 2 Mr. Sahust Pratuknukul was appointed a director and the President on April 22, 2010 and October 1, 2011 respectively.

The lists of directors who retired or resigned in 2011 together with their share ownership in EGCO are as shown below.

No. of shares

Retiring/ No. Name Position December December Increase

Resigning Date 31, 2011 31, 2010 (Decrease)

1 2 3 4 5 6

Mr. Peter Albert Littlewood Mr. Mark Jobling Mr. Shinji Tsuchiya Mr. Wisudhi Srisuphan Mr. Somboon Arayaskul Mr. Kurujit Nakornthap

Director Director Director Director Director Director

February 23, 2011 February 23, 2011 February 23, 2011 February 28, 2011 October 1, 2011 December 1, 2011

- - - - - -

Independent Directors

The Board in the meeting no. 7/2008 on September 8, 2008 had early adopted the definition of independent directors to comply with the qualifications of independent directors stated in the notification of the Capital Market Supervisory Board no. 14/2008 re : “Filling for and Approval of Newly Issued Shares” before the effective date and the Board in the meeting no. 2/2011 on February 28, 2011 had resolved to reduce the shareholding under this item from not more than 1% to 0.5%. Under such definition, EGCO independent director shall have the following qualifications.

1. Holding shares not more than 0.5% of the paid-up capital with the voting right of EGCO, parent company, subsidiary company, associated company or any legal entity that may have the conflict of interest (including the connected persons as stipulated in section 258 of securities laws), 2. Not being a director that takes part in the management (executive director, director who has the same responsibility as management except for the signature in transactions approved by the Board and the joint signing with other directors), employees, advisors who receive regular salary, and controlling person of EGCO, parent company, subsidiary company, associate company and fellow subsidiary (subsidiary of the same holding company) or any entity that may have a conflict of interest during the period of two years before his/her appointment, 3. Not being a person who is related by maternity and by registration as parents, spouse, brother, sister, and son and daughter including their spouses of the management, or major shareholders, controlling persons or persons who will be nominated to be the Management or controlling persons of EGCO or its subsidiaries, 4. Not having business relationship with and not being a major shareholder, non-independent director or management of EGCO, parent company, subsidiary company, associate company or any entity that may have a conflict of interest in a way that would affect the giving of independent opinions during the period of two years before the filing date, 5. Not being an auditor or a major shareholder, director, management or partner of the audit firm that provides auditing services to EGCO, parent company, subsidiary company, associate company or any entity that may have a conflict of interest during the period of two years before the filing date, 6. Not providing any professional service or being a major shareholder, non- independent director, management or partner of the company that provide professional service which include financial and legal advices with the fee higher than 2 million baht per year during the period of two years before the filing date, 7. Not being appointed as a representative to safeguard interests of EGCO director, majority shareholders or shareholders who are related to EGCO’s majority shareholders, and

8. Not having any constraint that would affect the performance of giving independent judgment on EGCO.

The terms of independent directors

The term of independent directors is limited at 3 terms, of which the counting of the term would start from the 2011 Annual General Shareholders’ Meeting on wards.

The Nomination and Remuneration Committee shall review the appropriateness of the independent director definition. Currently, there are 6 independent directors of all 15 directors who meet the above qualifications which accounts for more than one-third of all directors.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Authorized Directors

EGCO determines that the authorized directors comprise the President to sign and affix the company’s seal independently, or any two directors to sign jointly and affix the company’s seal. Such authorized directors shall exclude (1) independent directors to maintain their independence under the good corporate governance principle, (2) Chairman who is a senior government officer, and (3) directors who are also directors of the financial institutions to avoid the limitation that such financial institutions cannot provide future financial service to EGCO.

Appointment, Resignation, and Dismissal of Directors

The Board of Directors, which comprises not less than five and not more than 15 directors, shall be elected by shareholders, provided that not less than half of them must reside in Thailand. If a directorship becomes vacant for any reason other than by rotation, the Board in the subsequent meeting shall elect a person who is qualified to fill in the vacancy by the votes of not less than three-forth (3/4) of the remaining directors. The director who fills in the vacancy shall retain the office for only the remaining term of office of the director whom s/he replaces.

At every annual ordinary meeting, one-third of the directors shall retire from office. If the number of directors is not a multiple of three, the number nearest to one-third must retire from office. Additionally, any director who wishes to resign from office may do so by submitting a resignation letter to the company. Such resignation shall be effective from the date the resignation letter reaches EGCO.

In voting for the dismissal of any directors from office before the expiration of his or her term of directorship, a four-fifth (4/5) vote of eligible shareholders present at the meeting shall be required.

Board of Directors’ Duties and Responsibilities

The duties and responsibilities of the Board of Directors are as prescribed below.

1. Duties to EGCO

• To devote time to EGCO and conduct the business in compliance with the governance principles and EGCO’s Code of Conduct. • To demonstrate independent judgment in overseeing EGCO business. • To have full ethical and legal responsibility towards shareholders while taking into account the interests of other stakeholders. • To endeavor to recruit competent key management who will fully devote themselves for the benefit of EGCO. • To monitor EGCO’s business and the compliance with the laws, rules, regulations and contract provisions and will require the Management to submit report on EGCO’s significant matters to ensure effective corporate performance.

2. Duties to the Shareholders

• To endeavor to ensure that EGCO is financially viable, properly managed and constantly improved so as to protect and enhance the interests of the shareholders. • To endeavor to ensure that the information disclosure is materially correct, complete, transparent and timely. • To endeavor to ensure that shareholders are treated on equitable basis. • Not to submit fault information and to ensure that true and accurate information regarding the operating results and financial position is reported in accordance with the disclosure requirements.

3. Duties to Creditors

• To endeavor to ensure that EGCO complies with the loan provision and that EGCO’s financial status is correctly disclosed. • To seek professional advice in case of doubt about the likely impact on lenders such as when EGCO’s financial position is uncertain or insolvency may be pending.

4. Duties to other Stakeholders

• To endeavor to ensure that EGCO complies with the governing laws and regulations while taking into account the impact on employees, other stakeholders, community, society and environment.

5. Due Diligence

• To attend all Board meetings but where meeting attendance is not possible; directors will take appropriate step to obtain leave of absence. • To acquire knowledge about EGCO, the statutory and regulatory requirements affecting directors in the discharge of their duties as EGCO director, and to be aware of the environment that has the impact on EGCO. • To endeavor to ensure that necessary data are provided in advance to allow adequate time to analyze, make thorough judgment and so discharge the duties of care and diligence. • To endeavor to ensure independent judgment and in case of dissent to any Board’s resolution, to request the record of objection in the Minutes of Meeting. • To endeavor to ensure that the system is established within EGCO to provide the Board, on a regular and timely basis, with necessary data to enable directors to make a reasoned and careful judgment. • To endeavor to make sure that relations between the Board and the auditors are open and that the auditor can work independently and efficiently with the full co-operation from management and the internal auditors. • To strive to ensure that EGCO complies with the governing laws, rules, regulations and business standard and ethics. • In any case of doubt in the capacity of directors and committee members, to seek advise from EGCO’s advisors who are experts in each areas and to engage independent advisors for the governance benefits such as legal advisors, financial advisors, HR advisors, other professional advisors on EGCO’s expenses.

Board of Directors’ Performance Appraisal

The Board shall approve the self appraisal form which will be reviewed and endorsed by the Nomination and Remuneration Committee. In 2011 the Board adopted the same self appraisal form as 2010. Such form is based on the forms recommended by the New Zealand Institute of Directors and the forms adopted by other peer companies in the energy sector. The self appraisal form comprises two parts : collective appraisal form and individual appraisal form.

The collective appraisal form comprises 15 sections, namely (1) shareholders, (2) stakeholders, (3) the Company, (4) legal/ethical duties, (5) monitoring performance and agenda setting, (6) size, composition and independence of the Board, (7) director orientation and development, (8) Board leadership and teamwork, (9) the CEO, (10) Board (and Committee) meetings, (11) individual Board member contributions, (12) director and Board evaluation and compensation, (13) management evaluation, compensation and ownership, (14) succession Planning and (15) other issues

The individual appraisal form comprises 7 sections, namely (1) strategic thought, (2) good corporate governance, (3) competence, (4) independence, (5) preparedness as a director, (6) personal attributes and (7) awareness of stakeholders. Result of the appraisals as well as directors’ recommendations will be used to enhance the Board’s performance each year.

Annual Report 2011 Electricity Generating Public Co., Ltd.

2. Standing Committees’ Structure

The Board of Directors has appointed 4 standing committees to help scrutinize significant matters. The details of the standing committees are as follows.

Audit Committee

The Audit Committee comprises at least 3 independent directors for a 3-year term of service, with one year for this purpose meaning the period between the Annual General Meeting (AGM) of shareholders when s/he is appointed and the next succeeding AGM. One of the members shall have finance and accounting background. (At present, Mr. Chaipat Sahasakul is the Audit Committee member that has such qualification.)

The Audit Committee undertakes its responsibilities as described in the Audit Committee Charter, which is reviewed annually to be consistent with the changing internal and external environment. The responsibilities of the Audit Committee are detailed below.

1. Review the accuracy and adequacy of EGCO’s financial reporting.

2. Review the appropriateness and effectiveness of internal control systems, and internal audit functions and determine the Internal Audit Division’s independence, as well as approving the appointment, rotation and removal, and performance development and appraisal of the Chief Internal Audit. The Chief Internal Audit shall present the appointment, rotation, promotion, removal, and performance development as well as appraisal of internal audit staff to the Audit Committee to consider whether the motion of dissent would be raised. 3. Monitor EGCO’s compliance with Securities and Exchange Acts and Regulations of the SET, and any other laws relevant to EGCO’s business. 4. Recommend the Board of Directors an independent person to be EGCO’s auditor as well as the audit fees for appointment by the shareholders to audit EGCO’s financial statements.

5. Attend a non-management meeting with an auditor at least once a year.

6. Consider the connected transactions or any transactions that may cause conflict of interest complying well as the audit fees for appointment by the shareholders to audit EGCO’s financial statements.

7. Review the Internal Audit Charter prior to submission to the Board of Directors for approval.

8. Approve the internal audit plan as well as budget and personnel.

9. Review the internal audit function, including: independence of internal audit division and reporting obligation.

10. Review with the Management the preparation of the Management’s Discussion and Analysis or MD&A and its disclosure in the Annual Report. 11. Review with the Management the risk management policy, the practice compliance with such policy, as well as EGCO’s risk management guidelines. 12. Prepare a report that describes the Audit Committee’s activities and responsibilities. This report shall be signed by the Chairman of the Audit Committee and published in the annual report to the shareholders. The Audit Committee’s Report shall consist of at least the following information : (a) an opinion on the accuracy, completeness and creditability of EGCO’s financial report, (b) an opinion on the adequacy of EGCO’s internal control system,

(c) an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to EGCO’s business, (d) an opinion on the suitability of an auditor, (e) an opinion on the transactions that may lead to conflicts of interests, (f) the number of the Audit Committee meetings, and the attendance of such meetings by each committee member, (g) an opinion or overview comment received by the Audit Committee from its performance of duties in accordance with the charter, and (h) other transactions which, according to the Audit Committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Board of Directors. 13. Inspect any suspiciousness reported by EGCO’s auditor, that the President, the Management or any person responsible for EGCO’s operation commits an offence under the Securities and Exchange Act (No. 4) B.E. 2551 and report the result of preliminary inspection to the Office of the Securities and Exchange Commission and the auditor within thirty days after being informed by the auditor.

14. Review the Audit Committee Charter at least annually.

15. Perform any other act as assigned by the Board of Directors with approval of the Audit Committee.

With regard to the above responsibilities, the Committee is accountable to EGCO Board of Directors whereas the Board of Directors remains responsible for EGCO’s actions against the third parties.

The Audit Committee conducts the self-appraisal annually and reports the result to the Board. For 2011, the Audit Committee used the questionnaire which was adapted from the Booklet : “Audit Committee - Good practices for meeting market expectations - 2nd edition” which was studied by PricewaterhouseCoopers’ Global Corporate Reporting.

There were 17 meetings in 2011 of which the attendance rate was 100%. Investment Committee

The Investment Committee comprises 5 directors. The office term is the same as their directorship.

The Investment Committee has the responsibilities to scrutinize and endorse for the Board’s consideration the Management’s proposals especially on investment and funding along with other related activities except for the small and medium size transaction which it has the authority to approve with subsequent acknowledgement by the Board. The Investment Committee’s responsibilities are described below.

1. To consider EGCO’s strategic plan, business plan and annual budget for presentation to the Board,

2. To formulate the overall investment strategy and investment policies in line with the EGCO’s policy,

3. To review major acquisition, investment, divestment and funding requests,

4. To review the financial operations of EGCO, including Group-wide financial and treasury management policies and major financing transaction,

5. To approve activities in accordance with EGCO’s regulations,

6. To consider issues which are assigned by the Board, and

Annual Report 2011 Electricity Generating Public Co., Ltd.

7. To review risks associated with investment and finance and other related issues.

There were 11 meetings in 2011 of which the attendance rate was 89%. Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises 5 directors for a 3-year term of service with one year for this purpose meaning the period between the AGM of shareholders when s/he is appointed and the next succeeding AGM. In order to maintain continuity, members may be re-elected.

The mission of the Nomination and Remuneration Committee is detailed below.

1. To recommend the structure and composition of the Board and committees together with the qualification of its members,

2. To recommend the list of nominees for the Board of Directors to be proposed to the shareholders’ annual general meeting in case of vacancies by rotation and to the board in case of casual vacancies, 3. To scrutinize the list of nominees for EGCO President in case of vacancy including the establishment of the succession plan for executives, 4. To approve the appointment, promotion, rotation and removal of the senior executives of EGCO (Executive Vice Presidents and Senior Executive Vice Presidents) and to nominate senior executives of subsidiary/joint venture companies that EGCO had the right to nominate for a position equivalent to EGCO’s EVP level and upward, 5. To approve EGCO representatives to be directors of the subsidiary or associated companies according to equity proportion or shareholders’ agreement,

6. To endorse the performance evaluation of EGCO President,

7. To endorse the performance evaluation of EGCO Management (Senior Executive Vice President and Executive Vice President),

8. To recommend the remuneration structure of the directors and senior executives of EGCO and subsidiary and associated companies including meeting allowances, bonus, welfare and other benefits both in monetary and non-monetary terms,

9. To recommend policies and guidelines in determining the remuneration package of the senior executives on an annual basis,

10. To evaluate and approve the corporate performance of EGCO and the Group companies to determine the bonus and annual salary increase across the whole Group,

11. To recommend EGCO’s salary structure and other benefits, and

12. To review risks associated with people management.

There were 10 meetings in 2011 of which the attendance rate was 98%.

Corporate Governance and Social Responsibility Committee

The Corporate Governance and Social Responsibility Committee (CC Committee) comprises 5 directors being 3 independent directors, 1 non-executive director and President. The term of office of each CC director member is three years and can be re-elected. In order to maintain continuity, members may be re-elected.

The mission of the CC Committee is detailed as follows.

1. To endorse corporate governance policy for consideration and adoption by the Board, to monitor compliance with that policy, and to review and adopt such policy on continual basis as appropriate, and

2. To endorse policy and framework for activities for EGCO Group’s CSR and to consider resources and budgets for CSR projects and activities.

There was 2 meeting in 2011 of which the attendance rate was 90%.

3. Management Structure

The President acts as the head of the Management team which comprises 3 groups as shown below :

• Business Development - International Group : This group is headed by a Senior Executive Vice President (SEVP). Under the SEVP, there is one Executive Vice Presidents (EVP) who supervise the business development (international). • Business Development - Domestic Group : This group is headed by a Senior Executive Vice President (SEVP). Under the SEVP, there are two Executive Vice Presidents (EVP) who supervise the business development (domestic) and asset management. • Finance and Corporate Services Group : This group is headed by SEVP with two EVPs to supervise finance and corporate services performance. •

President’s Direct Report Group : This group comprises the Strategy and Corporate Management Group headed by an EVP. There are also three divisions which are under the President’s supervision namely Controller, Internal Audit and Corporate Secretary. The last two divisions report administratively to the President, but functionally to the Audit Committee and the Board of Directors, respectively.

President

The President is responsible for managing EGCO’s business in consistent with the objectives, articles of associations, regulations and the resolution of the Board. The President is also in charge of supervising employees and completing activities assigned by the Board including the following activities.

• To manage EGCO’s day-to-day business,

• To hire, appoint, remove, transfer, promote, demote, assign, and take disciplinary action against employees and workers from division managers downward (excluding the internal audit manager and corporate secretary), and

• To ensure the implementation of the policies, plans, and budgets approved by the Board.

In this respect, the President is allowed to delegate his authority to other employees but is still accountable for the decision of his delegates.

Management Team

The list of the Management team and their share ownership in EGCO as at December 31, 2010 is as follows.

No.

Name

1 Mr. Sahust Pratuknukul 2 Mr. Piya Jetasanon

Title

President Senior Executive Vice President - Finance & Corporate Services

No. of shares

December December Increase 31, 2011 31, 2010 (Decrease)

1,890 -

- -

Annual Report 2011 Electricity Generating Public Co., Ltd.

No.

Name

3 Mr. John Palumbo 4 Mr. Voravit Potisuk 5 Mr. Chumsak Desudjit 6 Mr. Chankij Jearaphunt 7 Mr. Wajarapong Palakawong Na Ayudhaya 8 Mr. Suvapan Chomchalerm 9 Mr. Somsiri Yoosuk 10 Ms. Nattanont Meesuksabai

Title

No. of shares

December December Increase 31, 2011 31, 2010 (Decrease)

Senior Executive Vice President - Business Development - International Senior Executive Vice President - Business Development - Domestic Director - Rayong Power Plant Managing Director of KEGCO Managing Director of ESCO

- - -

Executive Vice President - Finance First Senior Vice President - Finance Division Senior Vice President - Accounting and Budget Division

- -

Corporate Secretary

The Board in the meeting no. 6/2008 appointed Ms. Busakorn Kakanumpornwong the Corporate Secretary effective August 18, 2008 with the duty and responsibility as prescribes in the Securities and Exchange Act (No. 4) B.E. 2551. Ms. Busakorn also serves as the Board secretary to handle functions to assist the Board as well as to coordinate subsequent actions under the Boardâ&#x20AC;&#x2122;s resolution. The Corporate Secretary directly report to the Board. The Board also delegates the Nomination and Remuneration Committee to appraise the performance of the Corporate Secretary.

Management Committees

EGCO has set up the following committees to ensure the appropriateness and efficiency of business management.

Group Business Committee : The Board of Directors appoints the Group Business Committee which comprises executives of EGCO Group in appropriate number. The Committee is chaired by the President. The term of office for the executives is the same as their executive terms. The Group Business Committee is accountable for the following responsibilities 1. To act as the Board of Directors of the 100% equity subsidiaries namely KEGCO and ESCO, 2. To oversee that the operating assets comply with laws, regulations, governing documents and companyâ&#x20AC;&#x2122;s regulations, 3. To consider and endorse the business plan, annual budget and KPIs for the operating assets to the Investment Committee for its consideration, 4. To direct asset management function to comply with the corporate plan and budget and meet both the short-term and medium- term corporate targets,

5. To oversee EGCO’s operating assets to ensure that the operating results and return on investment are in line with the plan and projection under the support of the Asset Management and Planning Group,

6. To propose/endorse the organizational structure, restructuring and governance of Group Companies (Division level up), and

7. To recommend the appointment, rotation and removal of the Managing Directors and Deputy Managing Directors of the wholly owned subsidiaries for the Nomination and Remuneration Committee’s approval.

The Group Business Committee’ meetings are called as necessary. In 2010, there were 5 meetings.

EGCO Management Committee :

EGCO Management Committee comprises executives of EGCO Group in appropriate number. The Committee is chaired by the President. EGCO Management Committee is responsible for formulating business policy of EGCO Group, scrutinizing all proposals to be presented to the Board and standing committees and monitoring the operation of the Group.

The EGCO Management Committee meetings are called as necessary. In 2011, the Committee held 12 meetings.

Good Governance Committee :

The Good Corporate Committee comprises executives of EGCO Group in appropriate number. The Committee is chaired by the President. The Good Corporate Committee is in charge of the following responsibilities.

1. To consider international criteria and practices of Good Corporate Governance and those of the SET and SEC,

2. To formulate the policy, guidelines and practices of the Group in compliance with the Good Corporate Governance, and

3. To revise the Code of Conduct to suit the business environment and to educate employees about the Codes as well as providing cooperation to promote the practice in the Group.

The Good Corporate Governance Committee meets when necessary. In 2011, there were two meetings.

Risk Management Committee :

The Risk Management Committee comprises executives of EGCO Group in appropriate number. The Committee is chaired by the President. The Risk Management Committee meets when necessary and directly reports to the Audit Committee. Its responsibilities are as follows.

1. To determine the risk management criteria for EGCO and subsidiaries,

2. To determine the risk management evaluation and mitigation,

3. To monitor compliance with risk management framework,

4. To revise EGCO’s risk factors to comply with the regulations of the governing authorities, and

5. To report its performance to the Audit Committee and the Board of Director.

In 2011, the Risk Management Committee held six meetings.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Safety Health and Environment Committee :

The Safety Health and Environment Committee comprises executives of EGCO Group in appropriate number. The Committee is chaired by EVP-Asset Management. The Safety Health and Environment Committee is in charge of the following responsibilities.

1. To determine the policy and plan regarding safety, health and environment (SHE) of EGCO Group to be in compliance with the strategic plan,

2. To implement the SHE action plan for EGCO Group,

3. To monitor and evaluate the SHE performance of EGCO Group, and

4. To improve and develop the SHE implementation of EGCO Group.

The Safety Health and Environment Committee meets when necessary. In 2011, there was no meeting.

4. Director and Management Selection

To ensure the appropriateness of director and management selection for efficient governance, EGCO sets up the following framework.

Director Election and Appointment

EGCO endeavors to select capable directors to govern the company, designate the corporate policies and sanction its business plans for the benefit of EGCO and shareholders. With respect to this, EGCO puts an emphasis on the director nomination and selection process taking into account the following qualifications and experiences in considering each individual candidates.

1. Legal requirement and regulations and notifications of SET and SEC regarding the directors’ qualifications, 2. Directors’ qualifications prescribed in Directors’ Code of Conduct namely honesty, virtue, initiative and achievement, excellence, accountability, justice, independence, equality of shareholder opportunity,

3. Knowledge and experiences beneficial to EGCO’s business,

4. Trainings and experience at the policy making level in corporate governance,

5. Willingness to represent the best interests of all shareholders, and

6. Willingness to devote time and effort to contribute to EGCO’s development.

The Board has delegated to the Nomination and Remuneration Committee the duty of selecting and recommending prospective nominees, whether they are to become the shareholders’ representatives or independent directors, for the Board’s approval. The Nomination and Remuneration Committee is also responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary. The nomination of directors to succeed those who retire by rotation must be individually approved at the shareholders’ meeting based on the voting guidelines in the Articles of Association as follows.

1. Each shareholder shall be entitled to the number of votes equivalent to the number of shares held by him/her; one share shall have one vote.

2. Each shareholder shall elect one or more directors, provided that they shall not exercise their votes in excess of the number of directors required at such time.

3. In a case that a shareholder elects more than one director, s/he may exercise all the votes s/he has, provided that s/he may not split his votes among any such persons.

4. The persons receiving the highest number of votes in respective order shall be appointed directors depending on the requirements of directors set at such time. In the event that a number of persons receive an equal number of votes for the last directorship, the Chairman of the meeting shall have a casting vote.

5. Directors must be appointed by the vote not less than four-fifth of the shareholders present and having the right to vote.

To ensure that shareholders have adequate information to make their selection, EGCO shall present details of a given nominee such as education background, occupation, directorship in other companies, relevant experiences, and illegal acts committed (if any) in the notice of shareholders’ meeting. In case of the re-election, the attendance records and performance during the past year shall also be presented.

In the case of casual vacancies, the Nomination and Remuneration Committee will nominate a qualified candidate who does not possess any forbidden characteristics as stipulated under the Public Company Act for approval at the subsequent Board of Directors’ meeting. The director who fills in the vacancy shall retain the office for only the remaining term of office of the director whom s/he replaces. The resolution of the Board of Directors in this respect shall consist of not less than three-fourth the votes of the remaining directors.

Right of Minority Shareholders

To ensure that EGCO treats shareholders equitably, the Board encourages minority shareholders to make recommendation on the director candidates with clear and transparent procedures as posted on EGCO website.

Director Orientation and Training

All new directors must participate in EGCO’s orientation program. This orientation will include presentations by senior management to familiarize new directors with EGCO’s significant issues, Directors’ Manual and EGCO’s Code of Conduct for Directors and Employees. Any sitting directors and other top management may attend the orientation program.

The information of the directors’ manual comprises role, duty and responsibility, Securities’ Dealing by Directors, Notification of Personal Interest of Director, Meeting Management, Disclosure Policy, Contact with management, Board’s and Committees’ Remuneration and Fringe Benefits, Table of Authority and EGCO general information.

EGCO encourages directors to attend both in-house and external courses to enhance their knowledge and understanding on good corporate governance. Directors can apply for the training courses at the Thai Institute of Directors or relevant organizations on EGCO’s expenses.

Management Selection and Appointment

The Board determines policies and principles for selection of the President and policies regarding succession in the event of an emergency or the retirement of the President taking into account educational background, experiences, capabilities, ethics and leadership. The Nomination and Remuneration Committee shall consider and propose the qualified candidates to the Board.

The President is entrusted to select the knowledgeable, competent and experienced executives in accordance with the qualifications and selection process stated in EGCO Regulation on Human Resource Management B.E. 2550 and the resolution of the Board as follows.

Annual Report 2011 Electricity Generating Public Co., Ltd.

1. The Nomination and Remuneration Committee shall approve the appointment of Senior Executive Vice President, Executive Vice President, the subsidiaries’ Managing Director and Deputy Managing Director. 2. The President shall appoint the division and section managers. The appointment of Secretary to the Board and the Assistant Secretary to the Board shall be approved by the Board of Directors while the appointment of Division Manager of Internal Audit shall be endorsed by the Audit Committee. 5. Director and Management Remuneration

EGCO sets the policy to reward directors and management with appropriate remuneration. In this respect, the Nomination and Remuneration Committee is entrusted to review the appropriate rate that takes into account the responsibility and the company’s financial status while being in line with the peer practices.

Director Remuneration

Director remuneration is appropriately set at a rate comparable to that of peer companies. The remuneration comprises (1) monthly retainer fee to reflect directors’ responsibilities, (2) meeting allowance to reflect time devotion and meeting attendance, and (3) bonus which is paid in accordance with the shareholder value creation. The Nomination and Remuneration Committee will endorse the director remuneration for the Board’s endorsement before seeking the shareholders’ approval on an annual basis. The guidelines are as follows : • Retainer fee and meeting allowance will be set in accordance with peer practices, EGCO operating performance, business size, and responsibility, knowledge, competencies and experience of the directors as required by the company.

• Bonus will be considered from the Company’s net profit or dividend paid to shareholders.

In 2011, the Shareholders’ Meeting resolved the directors’ remuneration as shown below :

1. Monthly retainer fee of 30,000 baht and meeting allowance of 10,000 baht each. Members who do not attend the meeting will not receive the allowance. Chairman of the Board received 25% additional remuneration for both the retainer fee and the meeting allowance. 2. 2011 Bonus of 20 million baht, equal to 2010’s approved amount, taking into account the Company’s growth, the recognition in terms of good corporate governance, the increasing of share price, peers’ director bonus, and dividend payout ratio. Such bonus payment accounted for 0.29% of the net profit and 0.70% of 2010 annual dividend payment. 3. Remuneration for Board’s Committees being Investment Committee, Audit Committee, Nomination and Remuneration Committee, and Corporate Governance and Social Responsibility Committee as follows.

Committee

Investment Committee Audit Committee Nomination and Remuneration Committee Corporate Governance and Social Responsibility Committee

Retainer Fee (baht) Chairman

25,000 25,000 25,000 -

Member

20,000 20,000 20,000 -

Meeting Allowance (baht) Chairman

25,000 25,000 25,000 30,000

Member

20,000 20,000 20,000 24,000

The overall directorsâ&#x20AC;&#x2122; remuneration for 2011 is summarized below.

No.

Total Remuneration in 2011

Appoinment No. of months

Name

Date

in service 2011

Meeting

(Monthly Retainer,

Bonus /2

Total

Attendance

Meeting Allowance)

Remuneration

2010 (7 Times/Year)

Director

Standing Committee /1

1. Mr. Pornchai Rujiprapa January 1, 2009 12 12 7/7 550,000.00 575,000.00 2. Mr. Aswin Kongsiri April 24, 2009 12 12 7/7 484,000.00 526,000.00 3. Mr. Chaipat Sahasakul April 21, 2011 12 12 7/7 440,000.00 700,000.00 4. Mr. Thanapich Mulapruk April 24, 2009 12 12 6/7 430,000.00 560,000.00 5. Mr. Somphot Kanchanaporn April 24, 2009 12 12 7/7 440,000.00 560,000.00 6. Police Lieutenant General April 24, 2009 12 12 7/7 440,000.00 488,000.00 Pijarn Jittirat 7. Mr. Phaiboon Siripanoosatien April 21, 2011 12 12 7/7 440,000.00 488,000.00 8. Mr. Surasak Supavitipatana November 16, 2 - 2/2 65,000.00 50,000.00 2011 9. Mr. Kulit Sombatsiri December 13, 1 - 1/1 29,000.00 0 2011 10. Mr. Hideaki Tomiku April 22, 2010 12 12 6/7 420,000.00 889,333.34 11. Mr. Toshiro Kudama February 28, 2011 10 - 6/6 371,000.00 0 12. Mr. Akio Matsuzaki February 28, 2011 10 - 4/6 351,000.00 0 13. Mr. Ryota Sakakibara February 28, 2011 10 - 6/6 371,000.00 380,666.67 /3 April 22, 2010 12 12 7/7 110,000.00 100,000.00 14. Mr. Vinit Tangnoi /4 April 22, 2010 12 8 7/7 330,000.00 360,000.00 15. Mr. Sahust Pratuknukul The summary of remuneration of Retired and resigned directors during 2010 - 2011 is as shown below 1. Mr. Apichart Dilogsopol April 22, 2010 - 4 - 0 0 2. Mr. Wisudhi Srisuphan February 28, 2011 2 6 1/1 67,000.00 0 3. Mr. Peter Albert Littlewood February 23, 2011 2 6 0/1 52,000.00 0 4. Mr. Mark Jobling February 23, 2011 2 12 1/1 62,000.00 154,666.67 5. Mr. Shinji Tsuchiya February 23, 2011 2 12 1/1 62,000.00 0 6. Mr. Somboon Arayaskul October 1, 2011 8 12 5/5 320,000.00 344,000.00 7. Mr. Kurujit Nakornthap December 1, 2011 9 - 5/5 333,000.00 0 Total 6,167,000.00 6,175,666.68 /2 /3 /4 /1

1,742,140.00 1,533,100.00 1,393,730.00 1,393,730.00 1,393,730.00 1,393,730.00

2,867,140.00 2,543,100.00 2,533,730.00 2,383,730.00 2,393,730.00 2,321,730.00

1,393,730.00 2,321,730.00 0 115,000.00 0

29,000.00

1,393,762.49 2,703,095.83 0 371,000.00 0 351,000.00 0 751,666.67 0 210,000.00 964,000.00 1,654,000.00 429,730.00 429,730.00 1,393,730.00 1,460,730.00 1,742,195.00 1,794,195.00 1,576,675.01 1,793,341.68 1,576,675.01 1,638,675.01 1,393,730.00 2,057,730.00 0 333,000.00 20,714,387.51 33,057,054.19

Standing Committees are 1. Investment Committee 2. Audit Committee, 3. Nomination and Remuneration Committee, 5. Corporate Governance and Social Responsibility Committee Bonus for Board of Directors in 2010 was paid in May 2011, as resolved by the Shareholders in the Annual General Meeting No.1/20101on April 21, 2011 The retainer fee and meeting allowance be paid to Mr. Vinit Tangnoi during October 1, 2011- December 31, 2011 as the director. The retainer fee and meeting allowance be paid to Mr. Sahust Pratuknukul during April 22, 2010 - September 30, 2011 as the director.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Management’s Remuneration

The Management’s remuneration which comprises both salary and bonus are designed in a way that will reflect the corporate and individual achievement based on the remuneration structure approved by the Board. EGCO periodically conducts the survey of the executive remuneration to ensure that the rate is comparable to their work and those of the peer companies.

The summary of the Management’s remuneration for 2011 as shown below.

(Unit : Baht)

Executive Director is defined as director who is also management of EGCO. In this regard, the President is the executive director. He is not entitled to the retainer fee or meeting allowance as member of the standing committees. /2 These included 7 management namely the President, Senior Executive Vice President –Business Development-International, Senior Executive Vice President-Business Development-Domestic, Senior Executive Vice President-Finance & Corporate Services, Director-Rayong Power Plant, two Senior Executive Vice Presidents who are seconded to be the Managing Directors of KEGCO and ESCO. Since the salaries of MDs of KEGCO and ESCO are paid by those companies. EGCO is responsible for the remuneration of only five managements. /3 The 2010 Bonus was paid in January 2011. /1

Total Remuneration of Core Subsidiaries’ Management

The remuneration of the Management of core subsidiaries (subsidiaries of which the revenue account for more than 10% of the consolidated revenue (KEGCO and EGCO Cogen) in 2011 is detailed below.

(Unit : Baht)

Year 2011

Remuneration

Salary Bonus /1 Meeting Allowance /2 Total

KEGCO Directors (7 Persons)

- - - -

Management Total (7 Persons) Remuneration

15,870,960.00 15,870,960.00 6,048,848.09 6,048,848.09 - - 21,919,808.09 21,919,808.09

EGCO Cogen Directors (5 Persons)

- - - -

The 2010 bonus was paid in January 2011. EGCO was responsible for the meeting allowance of KEGCO Board. /3 EGCO COGEN Management was assigned from EGCO under the Service Agreement between EGCO and EGCO COGEN. /1 /2

Management (1 Person) /3

1,616,400.00 690,845.40 - 2,307,245.40

Total Remuneration

1,616,400.00 690,845.40 - 2,307,245.40

Other Remuneration

In 2011, EGCO and its core subsidiaries contributed their parts to the provident fund for their respective Managements as follows.

Company

EGCO KEGCO EGCO Cogen

(Unit : Baht)

Year 2010

Members

Provident fund

6 7 1

1,846,368 1,587,096 161,640

6. Employees

EGCO

As of December 31, 2011, EGCO has 268 headcounts which include the President, six Senior Executive Vice Presidents, six executives who are seconded to be management of Group companies and 256 staffs. The number of staffs in each reporting line is as show below :

Key Areas

Members (Persons)

1. President 2. Business Development - International 3. Business Development - Domestic 4. Finance and Corporate Services 5. Strategic and Corporate Management 6. Rayong Power Plant • Operation • Maintenance • Others Total

Core Subsidiaries

A. KEGCO

26 8 29 53 15

59 40 38 268

Employees

1. Operation 2. Maintenance 3. Others Total

Total (person) KEGCO

67 53 31 151

Annual Report 2011 Electricity Generating Public Co., Ltd.

B. EGCO Cogen

There are three permanent staff members who serve EGCO Cogen. The general manager is assigned from EGCO under the service agreement between EGCO and EGCO Cogen. The Operation and Maintenance staffs of 31 headcounts are ESCO employees who work under the O&M service agreement between ESCO and EGCO Cogen.

There has been no significant turnover and no illegal labor dispute during the past three years.

7. Employee Remuneration

EGCO has the policy that the employees in the Group have fair remuneration which is comparable to the peer companies. Remuneration of employees of EGCO and core subsidiaries in 2010 is as shown below :

Remuneration

Total Salary Bonus /3 Provident Fund Total

(Unit : Baht)

Amount

EGCO

KEGCO

246,130,390.06 104,766,953.28 23,028,613.99 373,925,957.33

138,080,699.94 62,557,519.73 23,947,524.39 224,585,744.06

EGCO Cogen/2

2,973,890.00 1,303,337.21 262,409.00 4,539,636.21

Include salary and bonus of the executives on one year contract Include the salary and bonus of the General Manager who is seconded by EGCO and three permanent employees. /3 The 2010 bonus was paid in January 2011. /1 /2

8. Human Resource Development Policy

EGCO Group believes in the value of our human resources and will strive to be the employer of choice by promoting the participative management with equal opportunity for career advancement. Employees are encouraged to enter the development program to enhance their capabilities to bring out their highest working potentials to undertake tasks in competent manner and maintain our leadership in the business.

EGCO Group puts high priority on continuous development of the employee’s ability and proficiencies which includes core, functional, and managerial/leadership competencies. In this regard, various projects and training courses have been developed covering individual studies, training with experts or resource persons, and sharing of experiences among peers. As a result, we can develop our employees in all dimensions including intelligence quotient (IQ), emotional quotient (EQ ), moral quotient (MQ), and adversity quotient (AQ).

To ensure that the implementation of human resource development plan is a successful one, EGCO will prepare a list of required skill sets for each position as a part of the career path development plan.

9. Other information related to the Board of Directors and Management

In 2011, there were no director and management who were recorded to be prosecuted by the following cases.

• Criminal prosecution, except the violation of traffic rules, minor offence or in respect of the same offence

• Bankruptcy or receivership.

The positions of EGCOâ&#x20AC;&#x2122;s Board of Directors and Management in Standing Committees and Management Committees

Standing Committee

Management Committee

Audit Investment Nomination Corporate Group EGCO Good Risk Safety Committee Committee and Remu- Governance Business Management Governance Management Health and neration & Social Committee Committee Committee Committee Environment Committee Committee Responsibility Committee

Mr. Pornchai Rujiprapa Chairman Mr. Aswin Kongsiri Member Chairman Mr. Chaipat Sahasakul Chairman Police Lieutenant General Member Member Pijarn Jittirat Mr. Thanapich Mulapruk Member Mr. Somphot Member Kanchanaporn Mr. Phaiboon Member Member Siripanoosatien Mr. Vinit Tangnoi Member Mr. Surasak Supavititpatana Member Mr. Kulit Sombatsiri Member Mr. Toshiro Kudama Mr. Hideaki Tomiku Member Chairman Mr. Akio Matsuzaki Mr. Ryota Sakakibara Member Mr. Sahust Pratuknukul Member Member Chairman Chairman Chairman Chairman

Remark

Non-Executive Director Independent director Independent director with finance and accounting background Independent director Independent director Independent director Independent director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director President

Annual Report 2011 Electricity Generating Public Co., Ltd.

Standing Committee

Remark

President Member Member Chairman Chairman Chairman Chairman Management Member Member Member Member Management Senior Executive Vice President - Finance & Corporate Services Senior Executive Vice President Member Member Member Member Management - Business Development International Senior Executive Vice President Member Member Member Member Management - Business Development Domestic Member Member Member Member Management Director - Rayong Power Plant Member Member Member Member Management Managing Director of KEGCO Member Member Member Member Management Managing Director of ESCO Member Member Member Management Executive Vice President - Strategy & Corporate Management Member Chairman Management Executive Vice President - Asset Management Senior Vice President - Legal Member Senior Vice President - Member Corporate Communication Member Senior Vice President - Human Resources Secretary Secretary Member & Senior Vice President - Corporate Secretary Secretary Senior Vice President - Secretary Member & Secretary Internal Audit Secretary Vice President - Human Member Resources of Rayong Power Plant Member Vice President - Safety of KEGCO Vice President - Safety of ESCO Member Power Plant Manager - Member EGCO Cogen Member Power Plant Manager - Roi Et Green Member Manager - Tap Water of Egcom Tara Senior Vice President - Member & Asset Management Secretary Assistant Vice President - Member Asset Management and Assistant Secretary

Corporate Governance Report for 2011 The Board of Directors (Board) believes that the good corporate governance is a significant tool to ensure efficient and transparent management to foster shareholders’ and investors’ trust. The Board then controls and oversees the company to conduct the business under the Good Corporate Governance Principles issued by the Stock Exchange of Thailand (SET) and the rules and regulations of Listed Company issued by the Securities and Exchange Commission (SEC) and the Capital Market Supervisory Board (CMSB) to continuously raise the governance of EGCO to international level for efficient management and sustainable business growth. Corporate Governance Policies

For clarity and transparency, the Board has established the written corporate governance policies as guidelines for directors, management and employees. The Policies include the statutory rights of shareholders as well as the Best Practices issued by the SET. The Board annually reviews the good corporate governance policies to ensure adherence with the following core issues :

• • • • • •

Encouraging more understanding of the expectations of stakeholders; Improving the risk management practices; Enhancing the reputation of the organization and fostering greater public trust; Enhancing employee loyalty and morale and improving the safety and health of employees; Increasing productivity and resource efficiency and reducing waste; and Contributing to the long term viability of the organization.

Communication of Corporate Governance Policies

The Board discloses the Corporate Governance Policies on EGCO website. To facilitate the shareholders, the hard copies are provided upon a request to those who submit the form attached in the annual report to the corporate secretary. During the past year, the Company communicated the Corporate Governance Policies to its employees via various channels as follows :

• Good corporate governance E-newsletter was issued every Monday, Wednesday and

Friday to communicate news on good corporate governance, director information and best practices of other companies.

• Three trainings on good corporate governance were provided to the employees. The

topics included Dhamma Seminar on “Corporate Governance” and overview of risk management. Good corporate governance was also one of the contents included in the new employees orientation session.

Annual Report 2011 Electricity Generating Public Co., Ltd.

Monitoring of the Compliance with Corporate Governance Policies

The Board requires the compliance with the Corporate Governance Policies as one of the key performance indicators of EGCO Group of which the progress was monitored on a quarterly basis. In 2011, the Board endeavored to ensure that directors, Management and employees adopted the above policies as the guiding principles in discharging their duties. There was no report of any breach to the Corporate Governance Policies. Based on the above commitment, EGCO is well recognized as an excellent showcase of good corporate governance companies by various institutions.

• 10th best listed companies in Thailand and 4th best public companies in energy and utility sector in a poll conducted by Finance

and Banking Magazine;

• 5th best public company on net margin in a poll conducted by Money and Banking Magazine; • An excellent showcase for shareholder meeting with the full score of 100 in the quality assessment of 2011 Annual General

Shareholders’ Meeting organized by the Thai Investors Association;

• Top Corporate Governance Report Award and Corporate Social Responsibility Award for listed company with the market capitalization over 10,000 million baht from the SET Awards hosted by the Stock Exchange of Thailand (SET) and the Finance and Banking Magazine;

• Excellent Corporate Governance Performance in 2010 by IOD with the score of 96 and full score in two categories being the rights of shareholders and role of stakeholders; and disclosure and transparency;

The SET asks listed companies to adopt the SET’s Good Corporate Governance Principles for year 2006 as deemed appropriate and to notify with reasons and substitute measures/ actions to the SET for items which can not be complied. The Board then prepares this report accordingly. 1. Rights of Shareholders EGCO realizes the importance of Good Corporate Governance and respects the shareholders’ rights as an investor and an owner of the Company based on acceptable and reliable standard. In this respect, EGCO encourages the shareholders to exercise their rights including legal basic rights. Examples are the right to share in the profit, the right to receive adequate information, and the right to attend and vote for significant matters at the shareholders’ meeting such as appointment or removal of directors, remuneration of directors, appointment of auditor, auditors’ remuneration and other significant issues which impact EGCO. Beyond such basic rights, EGCO endeavors to provide significant information to shareholders via the website, newsletters and shareholders’ site visit. 1.1 Shareholders’ Meeting

The Board ensures that the processes and procedures of the Shareholders’ Annual General Meeting (AGM) accommodate the shareholders to take part in EGCO’s governance. With respect to this, the AGM Checklist issued by the Thai Investors Association, Listed Companies Association and SEC is used as the guidelines. Details are as follows.

Before the Shareholders’ Meeting

EGCO prepares and delivers the notice of the meeting as well as supporting documents in advance so that shareholders will have

adequate information to support their judgments. The Board also encourages shareholders to attend the meeting either in persons or by proxy. The practices in 2009 were as follows : • EGCO disclosed the schedule and the agenda of the AGM via the SET’s Community Portal system and EGCO website on February 28, 2011, which was 52 days in advance of the AGM date. •

EGCO delivered the notices of the meeting as well as the agenda document on March 18, 2011, which was 33 days before the AGM date. The notices included the objectives, Board’s opinions, and conditions to attend the meeting. Similarly, at least three days ahead of each meeting, the invitation was announced through one Thai and one English newspaper, each for three days, to allow the shareholders enough time to prepare themselves for the meeting. All relevant information was posted on EGCO’s website to facilitate shareholders to study the information in advance before receiving the hard copies. Contact phone number was also provided for any relating inquiries.

• EGCO joined hands with the Thailand Securities Depository Co., Ltd (TSD) to invite shareholders to notify the intention to attend the shareholder’s AGM in advance via IVR system so that EGCO would provide adequate facilities to accommodate shareholders. • EGCO encouraged shareholders to forward their questions with regard to the meeting agenda in advance to directors@ egco.com or facsimile number 0-2955-0956-7 in order that the shareholders could gain the utmost benefits from the meeting and that their rights would be fully observed.

On Shareholders’ Meeting Date

EGCO ensures that the meeting is conducted in a way that is convenient and transparent as well as encouraging shareholders for open discussion on EGCO business. The practices in 2011 were as follows : •

Directors, Management and the external auditor were encouraged to attend the AGM and answer shareholders’ questions. All the fifteen directors including the Chairman attended the meeting which accounted for 100% of the Board members. The chairman and members of each standing committee also presented information to shareholders and answer shareholders’ questions.

• Services to facilitate shareholders who attended the meeting were provided. Map for meeting venue was attached in the notice to the AGM. There were the shuttle service at the parking area at MRT station and the entrance of the meeting venue for shareholders. • Management, Investor Relation and Accounting Officers welcomed shareholders to the meeting and answered their inquiries about EGCO business at the mini-exhibition and shareholder corner in front of the meeting hall.

• An officer from TSD, the company registrar, provided the shareholder services and answered questions regarding dividend cheque and share registration and certificates in front of the meeting room.

• The barcode system was implemented to facilitate shareholders’ registration process.

• The shareholders who came late were allowed to vote for the ongoing agenda item and the remaining agenda items.

• The Chairman convened the meeting in accordance with the priority notified in the agenda document. Presentation for each agenda item included the background, supporting rationales and proposals. • The meeting was broadcasted via closed circuit television so that shareholders who were outside the meeting room could follow up the meeting proceedings.

Annual Report 2011 Electricity Generating Public Co., Ltd.

• Shareholders were equitably treated and were allowed adequate time to address their concerns at the meeting. The Chairman paid attention to clarify all shareholders’ inquiries of which the questions and the clarifications were recorded in the minutes of meeting. •

PricewaterhouseCoopers Legal & Tax Consultants Ltd., (PwCLT) were engaged as the inspectors to look over registration documents, meeting quorum, compliance of the voting procedure with EGCO Articles of Association and the Chairman’s notification, voting card collection and vote counting. In this regard, PwCLT reported that the meeting and the voting procedure of 2011 AGM was transparent and in compliance with the governing laws and the Articles of Association.

• The form to assess the quality of the AGM was disseminated to gather feedbacks for future improvement. The result of the survey in 2009 indicated that shareholders were satisfied with the quality of the notice to the meeting, meeting arrangement and meeting conduct.

There were 411 and 544 shareholders attending the 2011 AGM in person and by proxy, respectively, representing 395,885,697 shares which accounted for 75.577% of the total units of shares. The attendance rate was approximately the same as that of 2010 AGM in which 485 and 576 shareholders attended the meeting in person and by proxy, respectively, representing 410,811,147 shares which accounted for 78.032% of the total units of shares.

After the Shareholders’ Meeting

•

EGCO posted the draft minutes of the meeting for shareholders’ review on EGCO website “www.egco.com” on May 6, 2011 which was within 14 days after the meeting date (April 21, 2011) as required by the SET. The minutes of meeting had included the significant matters of each agenda items, shareholders’ inquiries and answers by the Board including the resolution and the voting for each proposal. The minutes of meeting was duly filed for future reference.

• EGCO broadcasted on its web site that shareholders who could not attend the meeting could request for CD of the meeting for free of charge. • EGCO notified the meeting resolution on dividend payment via SET’s portal. EGCO also coordinated with the registrar to ensure that all the shareholders would receive the dividend.

• EGCO took all the recommendations of the shareholders for consideration and improvement of the AGM. As a result of the above efforts, EGCO was honored as an excellent showcase for AGM of listed companies with the full score of 100 for the third year.

1.2 Shareholders’ Visit

The Board sets the principle to invite shareholders to visit the Company and meet the management to better understand EGCO business and monitor EGCO’s performance. In 2011, there were four shareholders’ visits as follows :

• Shareholders’ visit to Kaeng Khoi Power Plant in Saraburi province,

• Analysts’ and investors’ visit to Solar Power Plant in Lopburi, and

• Investors’ and analysts’ visit to One Watershed Forest, One Energy Source project.

2. Equitable Treatment of Shareholders 2.1 Fair Treatment

The Board regularly reviews the governance structure and framework to ensure that the shareholders, including minority and foreign shareholders, are treated equitably and that EGCO procedures do not make it unduly difficult or expensive to observe shareholders’ rights. The Board encourages shareholders to take part in EGCO’s governance and ensures that they are well informed about the significant decisions of EGCO as prescribed by laws and the Articles of Association. •

EGCO strictly follows its policy not to raise any agenda items which had not been submitted to the shareholders in advance, to make sure that other shareholders would have a great deal of time to stud y relevant information before making their decisions. Every shareholder has a right to cast vote according to their numbers of shares on “a one share one vote” basis. EGCO has never granted a privilege for some specific shares which limits the rights of other shareholders.

•

To adhere to the best practice as recommended by the SET regarding the right of minority shareholders, EGCO announced via EGCO’s website and the SET’s portal the clear and transparent procedures for shareholders to recommend AGM agenda and to nominate director candidates to the Board during the period of November 2, 2010 - January 17, 2011 (about 60 days before the AGM date). The shareholders who would like to propose the agenda or director candidates should hold not less than 100,000 shares which are lower than the SET’s recommended practice of holding not less than 0.5% of the total voting rights of the company. In 2011, no minor shareholders recommended AGM agenda nor nominate director candidates in advance. (Remarks : The Board of Directors in the meeting on August 22, 2011 resolved to offer minority shareholders the right to recommend agenda and questions for 2012 AGM along with the director nominees to EGCO during the period of September 1 - December 31, 2011 in accordance with the criteria that the minority shareholders who were entitled to such right should hold the minimum shares of 0.05% of the total outstanding shares (equivalent to 263,230 shares as at September 1, 2011)).

• Voting cards were provided for all agenda items for transparency and audit trail. Director election also allowed shareholders to vote on individual nominees. •

Shareholders who could not attend in person could vote by proxy. The three proxy forms as introduced by Department of Business Development, Ministry of Commerce were provided which included the form that allowed the shareholders to direct the voting. Three independent directors who did not have the conflict of interests with the AGM agenda were offered as volunteer proxies. In a bid to facilitate the shareholders, the proxy forms could be downloaded from EGCO’s website.

• Since most of the shareholders attending the meeting were Thai, the meeting was conducted in Thai. However, to facilitate foreign shareholders, EGCO prepared the notice of meeting in both Thai and English. English interpreting service was also provided at the meeting room. • With the awareness that some shareholders might not be able to read the minutes of meeting on the SET’s and EGCO’s website, a hard copy of the minutes of meeting no. 1/2011 were delivered to each shareholder for review. 2.2 Prohibition of Abusive Conduct by Insiders

EGCO has set up the written guidelines in the Code of Conduct for Directors and employees to prohibit improper insider trading and abusive conduct by insiders to ensure fairness to all shareholders.

Directors

• Directors must not make improper use of information acquired by virtue of the directors’ position.

• Directors must not disclose matters such as trade secrets, or sensitive business information to outsiders.

Annual Report 2011 Electricity Generating Public Co., Ltd.

• Directors must not buy or sell shares as a director of EGCO while in possession of information, which, if disclosed publicly, would be likely to materially affect EGCO share price. • Directors must not provide to anyone any information which is not publicly available and which would have a material effect on the price or value of EGCO’s securities.

Employees

• Employees shall at all times observe the rules and regulations issued by the SET, the SEC and other governing laws which include the equitable disclosure to shareholders and the public. • Any information disclosure to the public that will affect the business and EGCO’s stock must be approved by the President. Only the President or the assigned staff member is authorized to disclose such information. • The Corporate Communications Division, the Corporate Secretary Division and the Investor Relations Section are responsible for disclosing EGCO information to the public while it is the responsibility of the information owner to provide the fact sheets.

EGCO also sets the policy that Management and employees who have the inside information relating to financial statements should refrain from their own security trading within 45 days before and 24 hours after a disclosure date. For other significant inside information, Management and employees should refrain from security trading from the day of acknowledgement until 24 hours after disclosure to public. In addition, EGCO has put in place the internal control system to prevent the leakage of any information before the public disclosure. Such measure was a part of significant risk management. Supervisors also have the responsibility to ensure that the measure to safeguard inside information is effective. Using inside information for own or other benefits of security trading when that information has not made public is considered violating the Code of Conduct.

2.3 Disclosure of Directors and Management’s Interest in EGCO’s Business

The Board sets the guidelines that directors and Management discloses to the Board whether they have a material interest in any transaction or matter affecting EGCO to ensure transparency and to prevent conflicts of interest.

•

Directors will promptly notify EGCO when they or their family member is a partner or shareholder of any entity which may incur benefits or conflicts of interest with EGCO, acquire a direct or indirect interest in any contract made with EGCO or hold shares or debentures of EGCO or any affiliate. Directors or management with potential conflict of interest shall refrain from discussing and voting on such agenda item.

•

Directors and Management should disclose to the Board their securities holdings at every Board meeting. There is also a statement informing directors at every meeting that directors, management including their spouses, minor children and related persons under Section 258 of the Securities and Exchange Act have a responsibility to prepare and disclose any change in shareholding of the Company to the SEC within three days.

In 2011, the Board also sets the policy for directors and management including related persons to report their interest in the Company to comply with the Notification of the CMSB no. Tor Jor 2/2009 as follows :

1. Directors and executives should submit the form to report their interest to the Corporate Secretary on a quarterly basis.

2. In case of any change during the quarter, the updated form should be submitted to the Corporate Secretary as soon as possible. 3. The Corporate Secretary shall submit the form to the Chairman and the Chairman of the Audit Committee within 7 days after getting such report.

In 2011, the Board did not get any complaints for not respecting shareholders’ rights or any accusation regarding director’s and Management’s insider trading. This shows the efficient control of the Board on such matter. 3. Role of Stakeholders 3.1 Rights of Stakeholders

Apart from observing the rights of the shareholders, the Board takes due regard of and deal fairly with various stakeholders and encourages active cooperation with them which include both business and corporate social responsibility matters. The Board has set up the guidelines to respond to the requirements of each stakeholder in the Corporate Governance Principle and “EGCO Group’s Code of Conduct” with the expectations that directors, Management and employees shall be guided by those principles in discharging their duties.

Employees

EGCO believes in the value of its human resources and will strive to be the employer of choice. This is achieved by promoting the participative management, supporting the employees’ professional development and providing fair remuneration and suitable benefit scheme. EGCO strives to prevent accident, injury and occupational illnesses. Physical check up was provided in accordance with the occupational health risks.

It should be noted that during the past year, there was no legal dispute between the employees and EGCO. In addition, there was no disabling injury in all subsidiaries. EGCO is proud to announce that the Rayong Electricity Generating Co., Ltd. (Rayong) and the Khanom Electricity Generating Co., Ltd. (KEGCO) have been certified the OHSAS 18001:1999 (Occupational Health and Safety Assessment Series) by RWTUV (Thailand) and KEGCO has been honored the National Distinguished Workplace in terms of Safety, Occupational Health and Environment for 12 years consecutively.

Customers

EGCO always commits to provide good quality and reliable services in accordance with the agreements with EGAT and all customers. To ensure consistent quality service, the ISO 9001:2008 has been implemented at Rayong, KEGCO, Roi-Et Green Co., Ltd. and Egcom Tara Co., Ltd.

During the past year, EGCO and its subsidiaries could generate the contracted electricity with higher equivalent availability factors (EAF) than the value stipulated in the power purchase agreement. Rayong also made a superior record in being awarded the EAF bonus for 14 years consecutively. EGCO also prepared our power plant to meet any system emergency. It was notable that Rayong Power Plant could quickly execute the restoration plan in case of brown out using black start emergency diesel in order to power up the eastern region.

Creditors

EGCO will endeavor to ensure that it complies with the loan provision and that the Company financial status is correctly disclosed.

During the past year, EGCO and all the subsidiaries well observed the conditions in the loan agreement and there was no event of default.

Suppliers and Contractors

EGCO will treat suppliers and contractors fairly and would not seek undue benefits from them. EGCO will comply with the conditions

100 Annual Report 2011 Electricity Generating Public Co., Ltd.

in the agreements. In addition, EGCO aims at developing and securing sustainable relationship with suppliers and contractors on the bases of value for money, technical conformance and mutual trust.

Competitors

EGCO will conduct its business on a fair play basis. We will not use a disgraceful approach such as bribery in order to get competitors’ sensitive confidential information. EGCO will also refrain from attacking the competitors with false allegations.

Community, Society and Environment

EGCO operates the business with commitment to social contribution and environment conservation. In this regard, EGCO will foster the corporate culture that employees at all levels will be fully responsible for any social and environment impact when discharging their duties. EGCO also sets guidelines in the Code of Conduct that employees must deliver their duties in a safe manner to avoid any impact on themselves as well as people living and working in communities near our facilities, and the environment. Our employees will strive to comply with relevant laws, prevent accident and pollution, and will use the natural resources in an efficiently and environmentally responsible manner.

In addition, EGCO has implemented the social projects which cover the following areas :

• Promotion and Development of Community’s “Quality of Life” : EGCO Group will put the prime focus on the quality of life of the surrounding communities both at the head office and at the power plants. In this regard, EGCO has initiated and provided supports to projects relating to education, villagers’ occupation and environment.

• Conservation of “Watershed Forest: Source of Life” : Apart from taking care of the working environment and surrounding communities, EGCO Group plays a vital role in conserving the natural resources with the focus on watershed forests, which nourish the well being of all lives. •

Promotion of Learning and fostering a Public Mindedness among “Youths” for Sustainable Social Development : We recognize that education is the key to national development. With the awareness that development starts from early childhood, EGCO has supported the projects to encourage youths from pre-elementary, elementary to high school level to learn from both inside and outside the classroom to children. We believe that such learning is the starting point for social and moral quotient, essential factors for long term national development.

In 2011, EGCO set up the Corporate Governance and Social Responsibility Committee with the responsibility to endorse the governance policy along with CSR policy and framework with the prime focus on the impact to the shareholders and stakeholders. EGCO also prepare the CSR action plans comprising the plan on safety, occupational health, and working environment, and community projects. Details were presented in the Sustainability Development report.

It should be noted that in 2011 there was no claim against EGCO from the stakeholders. Detailed information on Corporate Social Responsibility is presented in the Stakeholders’ report.

3.2 Observation of Human Rights

EGCO requires that its directors, management and employees fully observe the following human rights.

• EGCO will treat our employees with respect and honor.

• EGCO will provide a communication channel for employees to submit questions and complaints relating to work which we will seriously consider and remedy the problem to benefit and to promote good relations among all concerned parties.

• EGCO encourages all employees to exercise their rights of citizenship in accordance with the constitution and relevant laws.

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• Employees’ personal information shall be kept with utmost discretion and confidentiality. Disclosure of personal information such as employee’ biodata, health record, working experience or any other personal information to non-related party without the permission of such employee is considered a violation of the Code of Conduct and may result in a range of disciplinary action except when it is done in accordance with the Company’s regulations or legal requirements.

• EGCO did not support the violation of human rights and frauds.

• Employees must refrain from any deliberate discrimination or harassment in word or action against others based on the basis of race, gender, religion, age, and physical or mental disability.

EGCO also set clear guidelines for labor engagement of the Company and its business partners to strictly comply with the Labor Act such as no engagement of child labor or abusive hiring. In addition, the working system is designed to put priority on safety and occupational health. There has never been any report on the violation of human rights by EGCO.

3.3 Intellectual Property

EGCO will comply with the legal requirements on intellectual property and copy rights. Employees must check beforehand that the work or information that belongs to third parties can be used within EGCO Group without violating the intellectual property of others.

3.4 Measures against Corruption and Bribery

EGCO set the policy to work against corruption and bribery. In this regard, EGCO Code of Conduct prescribes that employees are prohibited from soliciting or accepting any advantage from third parties that may impair their objectivity or weaken their ability to promote the best interests of EGCO Group. Employees shall refrain from offering the advantage to outside persons as a motive for him to do or refrain from doing any illegal and wrongful act.

On November 9, 2010, EGCO joined the project on Collective Action Coalition to fight against corruption in the private sector. Such coalition was initiated by the IOD, the Thai Chamber of Commerce, international chambers of commerce and Thai Listed Companies Association. Such project was national project being supported by the government and the Office of the National Anti-Corruption Commission.

3.5 Responsibility towards Environment and Resources

EGCO Group endeavors to optimize the usage of natural resources, taking into account the impacts on the environment. In this regard, EGCO has monitored the situation and set the measures to alleviate such impacts. In addition, Rayong and Khanom power plants have implemented ISO 14001:2004 environment management system and the TIS 18001:1999 & OHSAS 18001:2007 Occupational Health and Safety management system. EGCO Group also factors in the following activities to ensure that EGCO business has taken into account the social and environment issues for sustainable development.

• Preparing the investment plan with fuel diversification as part of the agenda to reduce the risk of heavy dependence on only one type of fuel. At present, EGCO is the IPP with the most various fuel use in Thailand.

• Investing in renewable projects to alleviate global warming and decrease the fossil fuel import.

• Operating business with environment concern and strict adherence to relevant laws and regulations including the regulations of local administrative agencies.

• Supporting economic and social development while respecting the local tradition and culture. EGCO will support the government policy and take a good care of communities surrounding the power plants so that they will not only be protected from the negative impact of EGCO business, but will also have a better quality of life.

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3.6 Channel to Direct Corporate Issues to the Board of Directors and Corporate Secretary

To increase the corporate value, the stakeholders can direct their recommendations and concerns on corporate issues to EGCO at the following address.

Electronic mail

Board of Directors Audit Committee Corporate Secretary Corporate Communications Investor Relations

directors@egco.com auditcommittee@egco.com cs@egco.com Corp_com@egco.com ir@egco.com

Telephone numbers

- - 0 2998 5021-5 0 2998 5131-3 0 2998 5145-7

The mailing address is Electricity Generating Public Company Limited, EGCO Tower, 222 Moo 5, Vibhavadi Rangsit Road, Tungsonghong, Laksi, Bangkok 10210.

The Corporate Secretary will be responsible for forwarding communications directed to the Board to the standing committee or relating directors. The Corporate Secretary will summarize all directors’ communications received during the most recent quarter to the Board, except for mails addressed to the Audit Committee which would be directly forwarded to the Audit Committee without screening. Also, for the electronic mails addressed to the auditcommittee@egco.com, Chairman of the Audit Committee and Audit Committee members would open them by themselves.

3.7 Whistleblower System and Whistleblower Protection

The Board has set the channels for whistle blower programs at both management and director levels. For management channel, the report on any suspected violation or crime shall be made to the supervisor and the Good Corporate Governance Committee. For the Board’s channel, such report can be directed to either the Board or the Audit Committee. It is the responsibility of the management to coach employees to meet their responsibilities under the requirements of relevant laws and regulations. Failure to observe the Code of Conduct will result in a range of disciplinary actions. The procedure to protect the whistleblower is also put in place. For example, information will be kept confidential and will be known only among responsible parties. The whistleblowers can identify themselves or can keep their identities anonymous. However, they must provide adequate information for the Company to investigate the claims. In 2011, EGCO was honored the CSR Award for listed company with the market capitalization over 10,000 million baht from the 2011 SET Awards. In addition, Group companies also won the following awards. • KEGCO won “the National Safety Awards for 2009” for the 12 consecutive years and “Outstanding Achievement on Labor Relations and Welfare” for 5 consecutive years. • Roi Et Green Co., Ltd won “the national Safety Award” for the second year. • EGCOM Tara Co., Ltd. was presented the Certificate for Quality of Drinking Water for 9 consecutive years, Certificate audit for Environment Management System : EMS Stage II by Ministry of Industry, excellent healthy workplace for 5 consecutive years and the Certificate for Standard for Corporate Social Responsibility (CSR-DIW Continuous) B.E. 2011.

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4. Disclosure and Transparency 4.1 Information Disclosure

Being aware of the impact of EGCO’s information on the decision of investors and stakeholders, the Board set a policy to disclose material information in a timely and transparent manner in accordance with the requirements of the SEC and SET via the following channels :

1. SET’s Community Portal system and SEC;

2. Public channels such as newspapers, magazines, television, and corporate news;

3. Company’s web site at www.egco.com both in Thai and English;

4. Company’s visits;

5. Road shows for both domestic and overseas investors;

6. Analyst meetings; and

7. EGCO news via post

EGCO has established a Disclosure Committee comprising President, Senior Executive Vice President-Finance and Corporate Services, Senior Executive Vice President-Business Development-Domestic, Senior Executive Vice President-Business Development- International, Senior Vice President-Corporate Secretary, Senior Vice President-Corporate Communications and Vice-President-Investor Relations. The meetings are called on quarterly basis in order to set communication plan, review disclosure policy, and prepare significant disclosure to ensure that the information is correct and efficiently communicated.

Investor Relations

Investor Relations is responsible for communication with institutional and individual investors, and analysts on an equitable basis. In this regard, annual Investor relations plan is prepared.

EGCO puts priority on sharing information via investor relations activities. Senior management always takes parts in providing information to investors and analysts to create understanding on the Company, promote the relationship, and encourage them to provide the feedback to the Company. Significant activities in 2011 included meeting investors in 2011 Thailand Focus. Two trips were arranged for investors’ and shareholders’ visits to Kaeng Khoi 2 Power Plant in Saraburi Province. EGCO also hosted three trips for analysts and institutional investors to visit the “one watershed forest, one source of energy” project and two briefings and site visits at the Solar Power Plant in Lopburi. Besides, there were four analyst meetings in Thailand, three overseas road shows to Hong Kong and Singapore. On top of that, there were newsletters and electronic mails. For shareholders who could not join the investor relations activities, EGCO has posted the presentations, operating results, financial statements and notice to the SET on the Company’s websites.

Corporate Communications

The Corporate Communications Division is responsible for communicating the movement of the Company to media for public disclosures. Major events in 2011 included 3 press conferences on corporate results and directions, 6 media trips, 12 executive Interviews and 26 pieces of press releases.

104 Annual Report 2011 Electricity Generating Public Co., Ltd.

Corporate Secretary

The Corporate Secretary discloses information as required by the SET and SEC on a correct and transparent basis. In 2011, 20 notifications were submitted to the SET.

EGCO always updates the information on EGCO website. Quality of the disclosure was assessed after every meeting with shareholders, investors and analysts for future improvement. In addition, EGCO also attached the feedback form for shareholders to provide feedback on the quality of the annual report, additional document required, and questions for the President to answer in the next AGM in the annual report and the notice to the AGM. Such feedback form was well received by shareholders.

4.2 Financial Statement Preparation

EGCO aims at fostering the stakeholders’ confidence that EGCO’s financial reports are accurate, complete and transparent in line with the generally accepted accounting standards to protect EGCO assets against fraud or abnormalities. In this regard, the Board has entrusted the Audit Committee to assume key duties and responsibilities of reviewing the financial statements to ensure its correctness and adequacy and compliance with the accounting standards and relevant regulation. The Audit Committee sets the policy to have a non-management meeting with the auditor at least once a year to ask questions and discuss with them about various significant issues. Apart from disclosing the Auditor Report in the annual report, the Board also prepares the report on Board of Directors’ Responsibilities on Financial Statements which covers important topics as prescribed in the SET’s Best Practices for Directors of Listed Companies. In 2011, EGCO appointed auditors from PricewaterhouseCoopers ABAS Limited as the Company’s auditor given that they had professional knowledge and had no conflicts of interest to defect their independent judgment. This was aimed at fostering the Board’s and shareholders’ trust that EGCO’s financial statements truly reflected the actual financial status and operating result.

EGCO also prepares the report on Management Discussion and Analysis to provide analytic information on the Company’s financial status, operating results and major changes to investors and analysts on a quarterly basis. Such report is submitted via SET’s portal along with the Company’s financial statements.

4.3 Information Disclosure on EGCO Website

In order that shareholders and investors can quickly search and retrieve EGCO’s public information, EGCO presented the following information on the Company’s website.

1. Corporate profile comprising the details of history, vision and mission, organization structure;

2. Corporate governance comprising the details of corporate governance principle, board of directors, board committees, and senior management;

3. Investor Relations comprising the details financial information, shareholder information, analyst information, investor calendar;

4. Corporate information comprising the details of brand information and press center; and

5. Corporate social responsibility comprising information about EGCO social contribution activities.

Investors can visit EGCO website at www.egco.com It should be noted that the SEC has never demanded EGCO to re-state the financial statements. In addition, the quarterly and annual financial statements are disclosed before the deadline.

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5. Responsibilities of the Board 5.1 Boardâ&#x20AC;&#x2122;s structure

Structure and Composition

Currently, the Board comprises not less than 5 directors and not more than 15 directors as stipulated in the Articles of Associations. The number of the directors will be reviewed periodically. The change in number of directors requires the shareholdersâ&#x20AC;&#x2122; approval with the four-fifth majority votes of shareholders who attend the meeting and have the rights to vote.

As at January 31, 2011, the Board comprised 15 directors, 14 of whom were outside directors which accounted for 93% of the Board. From these outside directors, 6 were qualified as independent directors which accounted for 40% of the total directors.

The Nomination and Remuneration Committee is entrusted to select and recommend prospective nominees, whether they are to become the shareholdersâ&#x20AC;&#x2122; representatives or independent directors. The Nomination and Remuneration Committee is also responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary. The Board views that the existing structure and composition of the Board which comprises directors with 100% in male and the background in engineering, economics and finance, and laws and political science at the ratio of 40%, 33.33%, and 26.67% respectively, was appropriate with useful mix of skills and experience and an appropriate balance of power. %DUCATIONAL "ACKGROUND OF %'#/}S "OARD OF $IRECTORS

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Term and Age Limit

One third of the directors shall retire by rotation at the AGM as prescribed in the Public Limited Company Act B.E. 2535. The Board views that there should not be limit on the number of terms a director may serve. Term limits may cause the loss of experience and expertise important to the optimal operation of the Board. However, to ensure that the Board remains composed of high functioning members able to keep the commitments to Board service, the Nomination and Remuneration Committee will evaluate the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term. On the other hand, the age limit policy is imposed that director candidates can not stand for election after age 72. Given such age limit on the election date, directors will be able to serve on the Board until the expiry of their terms.

Chairman

The Board elected Mr. Pornchai Rujiprapa, a representative director of EGAT, as the Chairman because of his knowledge in energy sector together with his leadership to lead EGCO to achieve the corporate vision and mission. Although the Chairman is not an independent director, the Board remains independent and objective due to the following mechanisms :

106 Annual Report 2011 Electricity Generating Public Co., Ltd.

1. The Chairman is a non-executive director, is not the same person as the President and has no relations with the management. His authorities are separate from those of the President, and there is a clear distinction between supervisory policy-making and day-to-day business administrative roles. The Chairman takes the role of the leader and assures that the Board’s meetings are efficiently conducted by encouraging involvement by all directors and providing recommendations to Management via the President. The Board will not intervene with any routine activities under the President’s responsibilities;

2. The Chairman is not an EGAT’s employee but is entrusted by the State to be on EGAT Board of Directors to protect the national benefits. The Board believes that the Chairman will act in the best interest of all shareholders and stakeholders;

3. The Board is mostly comprised of non-executive directors and the Board’s seats are allocated in accordance with the shareholding in the Company comprising 4 EGAT representative directors, 4 TEPDIA Generating B.V. (TEPDIA) representative directors, and 6 independent directors which indicates a proper balance of power;

4. The Board has appointed the Vice Chairman who is an independent director to work with the Chairman in setting and scrutinizing the meeting agenda and the time allocation for each agenda item; and 5. The Board has assigned Board committees to oversee tasks where there may be a potential for conflict of interest and to balance the need of each stakeholder. With respect to this, the Audit Committee is entrusted for oversight of the integrity of financial and non-financial reporting and review and management of related party transaction. The Nomination and Remuneration Committee is assigned to take care of selection of Board members and key executives and their remuneration.

The result of the Board’s performance appraisal in 2011 indicates that the Chairman is effective in leading the meeting and encouraging directors to participate in the debate around the Board table.

Independent Director

There are six independent directors on Board which is larger than one/third of the whole Board. Independent directors set up the policy to call meetings as needed. In 2011, there were 2 independent director meetings to discuss and exchange their views regarding the corporate governance and interesting issues without the Management and the result was reported to the Board. (Please see the definition of independent director in the article “Shareholding and Management Structure”.)

Segregation of Duties

There is a segregation of duties between policy making, which is the responsibility of the Board and routine business, which is the responsibility of the Management. In this regard, the Table of Authority has been prepared and approved by the Board. The Board will not intervene with any routine activities under the President’s responsibilities.

Policy and the Procedure for Other Positions of Directors and Management

To ensure that the Board will be able to devote time for the efficient governance of EGCO, the Board agrees that a director should not serve more than 4 companies if being executive director and 6 companies if being non-executive director.Currently, there is not any director who serves more than 6 companies. The Board has already taken into account his meeting attendance as one of the criteria for his re-election.

Corporate Secretary

The Board has appointed Ms. Busakorn Kakanumpornwong as the Corporate Secretary with the duty and responsibility as prescribes in the Securities and Exchange Act (No. 4) B.E. 2551. Ms. Busakorn also serves as the Board secretary to handle functions to assist the Board as well as to coordinate subsequent actions under the Board’s resolution.

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• To provide primary advice pertaining to EGCO’s regulations and Articles of Associations, and to monitor to ensure regulatory compliance on a regular basis, and report any significant changes to the directors;

• To arrange meetings of shareholders and the Board in accordance with the laws and regulations, including EGCO’s articles of associations and procedures; • To prepare meeting minutes of shareholders and the Board of Directors, and to monitor to ensure compliance with resolutions of shareholders’ and Board meetings;

• To ensure that corporate information disclosure to regulatory agencies is in accordance with the laws and the SEC’s and SET’s regulations;

• To inform general shareholders of their legitimate rights including EGCO’s news;

• To facilitate the Board activities including director orientation; and

• To file and keep record of EGCO’s paper such as directors’ registration, notice to the meeting, minutes of meetings, annual reports, notice to shareholders’ meetings, shareholders’ minutes of meetings and reports on directors’ and management’ interest.

In 2011, the Corporate Secretary attended seminars and provided opinion on the hearings hosted by the listed company regulators so that information should be used to enhance the efficiency of corporate governance.

5.2 Board’s Standing Committees

With the objective to enhance the governance efficiency, the Board assigns directors with knowledge and expertise to be the members of the Board committees namely Audit Committee, Investment Committee, Nomination and Remuneration Committee, and Good Corporate and Social Responsibility Committee.

Each Board committee has its own charter which prescribes functions, composition, term of office, responsibilities and meeting conduct. The committee’s charter, which is approved by the Board, will be reviewed as deemed appropriate. Each committee can retain outside counsels, experts and professional advisors, as deems appropriate at EGCO’s expense. The committees will report their meeting results to the Board.

The Audit Committee comprises 3 independent directors. The Audit Committee’s mission covers the review of the financial statements, legal compliance, risk management policy, internal control and appointment of auditor. The Audit Committee also reviews the connected transaction or transaction with conflicts of interest to ensure that such transaction is in compliant with the SET’s requirement, well grounded and will be for the best interest of EGCO.

The Nomination and Remuneration Committee comprises 4 non-executive directors, two of whom are independent. The Nomination and Remuneration Committee members appointed Mr. Hideaki Tomiku, a representative director from TEPDIA as the Chairman of the Committee as he has a wealth of experience in policy implementation, human resources management and governance management. The Board trusts that regardless of whom the Committee Chairman is represented, the Nomination and Remuneration Committee has the appropriate process and mechanisms to mandate transparent procedure of (1) recruitment of directors and Management in line with the best practices taking into account the recommendations from all shareholders; and (2) transparent and clear guidelines for remunerating directors and Management at a rate comparable to those of the peer companies and aligned with the long term benefit of EGCO and the shareholders.

The Investment Committee comprises 5 directors and has the responsibility to screen and endorse for the Board’s consideration the Management’s proposals especially on the investments, funding and relating activities. Exception is made for medium and

108 Annual Report 2011 Electricity Generating Public Co., Ltd.

small sized investment where the Investment Committee can approve business decision with subsequent acknowledgement by the Board. Since this Committee is delegated to approve business decision within its delegated authority, the Chairman of the Board is appointed the Chairman of the Investment Committee. He has proven to be efficient chairman who conducts the meeting efficiently and be attentive to other members’ recommendations both at the Board’s and the committee’s meeting. It should be noted that the Investment Committee was established in 2010.

The Corporate Governance and Social Responsibility Committee comprises 5 members being three independent directors, one shareholder representative and the President. The Chairman of the Committee shall be independent director. The Corporate Governance and Social Responsibility Committee has the responsibility to endorse the corporate governance principle and the positions and practices on issues of corporate social responsibilities, principally in relation to social and environmental matters that affect shareholders and other key stakeholders.

The structure and duties and responsibilities of each Board committee as well as the number of meetings are reported in the other article on “Shareholding and Management Structure”.

5.3 Role and Responsibility of the Board of Directors

Duty and Responsibilities

The Board members well understand their role and responsibilities including the business of the Company. They well serve the Company with honesty and prudent judgments for the utmost benefit of the Company and the fairness to all shareholders. The Board has exercised independent judgment and devoted time in discharging their duties in accordance with the Corporate Governance Principle as follows :

• To set the corporate vision, target and business strategy including risk management policy, annual budget and business plan as well as setting the corporate performance targets while monitoring the implementation, the result, significant investment cost, acquisition and disposal of the assets;

• To recruit, set the remuneration rate, monitor the performance and if necessary to change the key management and plan for a smooth succession plan;

• To review the remuneration of directors and key management and ensure that the director selection process is procedural and transparent;

• To monitor and resolve the conflicts of interests which may incur by Management, directors and shareholders, and to ensure the independent audit and internal control with the focus on risk monitoring, financial control and legal compliance;

• To monitor the effectiveness of the existing governance tools and instruments and implement change if necessary;

• To monitor the information disclosure and communications; and

• To direct self - appraisal annually and declare in the annual report how well they carry out their duties and oversee EGCO.

Leadership and Vision

The Board works with the Management in setting the vision, mission, strategies, goals and business plans both over a short and long term. The corporate KPIs are designated for each key area being growth, finance and organization excellence. The Board also endeavors to ensure that the significant working system such as the internal control and risk management are in place. Management performance is also monitored through the President’s report which is prepared on a monthly basis to ensure that EGCO business is carried out in an efficient manner.

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Code of Conduct

To maintain high ethical standards, EGCO has set up a Code of Conduct as a guideline so that directors, Management and employees perform their duties with regard to ethical values. Directors’ Code of Conduct focuses on business ethics, ethics for directors, directors’ commitment, duties and responsibilities, conflicts of interest and use of information. Employees’ Code of Conduct would be annually reviewed. Employees’ Code of Conduct covers 1. Guiding principles, 2. Making the system work, 3. Compliance with laws and regulations, 4. Business ethics, 5. Human resources, 6. Safety, health and environment and 7. Accountability.

EGCO continuously conducts the training on adherence to the Code of Conduct for the employees as well as provides clarification on their frequently asked questions. Directors, Management and employees must obey and respect the spirit of the Code of Conduct. Managers at all levels are required to promote the compliance with the Code of Conduct and act as role models. Employees at senior vice president level and upward shall review their compliance with the Code of Conduct before signing and submitting the Code of Conduct Compliance Statement to their immediate boss annually.

Internal Control and Internal Audit

Realizing the importance of having sufficient and suitable internal control at all levels, EGCO clearly determines responsibilities and authority of Management and employees in writing, taking into account segregation of duties, check and balance, and control of Company’s assets. EGCO also set a correct and timely financial report system. Apart from this, EGCO sets up an Internal Audit Division to audit EGCO and subsidiaries and to provide consultation to relevant units to reduce the weaknesses in the system under the proactive audit plan. The Audit Committee directly reports to the Audit Committee in order to make sure of its transparent auditing process. The Audit Committee has a responsibility to approve internal audit plan, and to consider and review the independence and the performance report of the Internal Audit Division.

EGCO emphasizes on developing the capabilities of internal auditors by self development, experience sharing and attending inside and outside seminar. In 2011, Vice President-Internal Audit was received the Certificate Internal Auditor (CIA) and an Assistant Vice President-Internal Audit was waiting for taking the examination to receive CIA.

The Board sets the policy to annually review EGCO’s internal control system using the questionnaires that were developed in line with the guidelines of the SET and the Committee of Sponsoring Organization of the Treadway Commission (COSO). Employees from section managers and upward are assigned to evaluate the quality of the internal control of which the result will be proposed to each subsidiary’s Board of Directors, the Audit Committee and EGCO Board of Directors, respectively. The evaluation result in 2011 showed that EGCO and its subsidiaries had sufficient and appropriate internal control system. Details are presented in Internal Control in this annual report under article Internal Control. To ensure compliance with internal control systems, and rules and regulations, employees of EGCO and subsidiaries at senior vice president level and upward are required to thoroughly review their 2011 work practices before signing the General Representation Letter to their managers up to the President. The President also signed the General Representation Letter addressed to the Chairman of the Board.

Risk Management

The Board of Directors entrusts the Audit Committee to review with the Management the risk management policy, implementation and guidelines. The Audit Committee reports the update on risk management issues to the Board twice a year to consider the adequacy and effectiveness of risk management system so that the strategies, plan and measures can be adjusted or put in place at an appropriate timing.

To implement enterprise risk management, the following measures are implemented :

• EGCO Risk Management Committee is shored up comprising top management of the Group companies with the President as

110 Annual Report 2011 Electricity Generating Public Co., Ltd.

the Chairman of the Committee. The objectives are to closely monitor the risk management of the Group and to present the result to the Audit Committee and the Board. In addition, Risk Management Committee is also set up at each power plant to set up the policy and monitor the implementation to meet the overall policy and the business characteristic of each power plant.

• Risk Management Section was also set up under Internal Audit Division to be fully responsible and coordinating for risk management. • Risk management process is embedded into the working process. Management and employees are encouraged to take part in the process and to efficiently use the resources to identify, appraise and manage risks.

• Risk management is implanted into the corporate culture.

EGCO has adopted the risk management policy and risk management manuals as guidelines since 2001. Risk Management implementation is also included as one of the elements for internal control assessment. The result of such assessment in 2011 indicated that EGCO Group has appropriately implemented risk management system.

Conflicts of Interest

EGCO has set the policy in the Code of Conduct for directors and employees to avoid the conflicts between the personal interest and the corporate interest as follows.

• Directors and employees shall not be engaged as directors or advisors of other companies, organizations, and associations that may conflict with the interest and the business of EGCO. Acknowledgment of such engagement by the Board must be sought;

• Directors will promptly notify the Board when any of the conflict of interest occurs and must consider whether to refrain from participating in the debate and/or voting on the matter, whether to be absent from discussion of the matter, whether to arrange that the relevant board papers are not sent, or, in an extreme case, whether to resign from the Board; • The list of major shareholders is disclosed. Directors and designated Management will report the change in their security holding to the regulatory body. The Corporate Secretary is assigned to report the security holdings of directors and Management to the Board at every meeting;

• Employees should not borrow money from the customers/suppliers or from individuals or firms having business dealings other than financial institutions as it may influence the way they handle EGCO business; and

•

The step for implementing connected transaction along with the approval authority and the disclosure of such transaction shall be as required by the SET and SEC. The Corporate Secretary will identify the type of transaction and the approval body and will submit the reports on connected transactions and any conflict of interests to the Audit Committee for acknowledgement and disclose the information in the annual report and annual registration form (Form 56-1).

Directors and management are required to prepare the report on the interest of their own and related parties to the Company to enable the Corporate Secretary to ensure transparent practices. The Corporate Secretary will submit a copy of such report to the Chairman and the Chairman of the Audit Committee. To foster trust among all concerned parties that the connection transactions are aimed at optimizing the benefits of EGCO and the shareholders, the Audit Committee is assigned to review the information and provide comment with regard to the connected transaction that needs to be approved by the Board and the shareholders and to ensure that the disclosure is adequate.

111

Fraud Risk Management

With a view that fraud risk was significant, the Board set a measure to manage fraud risk as follows :

• Preventive Measures : The organization is well designed for the purpose of governing and managing business. The Code of Conduct is prepared in writing and the compliance with the Code is promoted. The internal control system is established and appraised. The whistleblower program is put in place.

• Investigation : Each supervisor assumes responsibility to prevent and control fraud risks and errors in the system. In addition, there is an internal audit unit which is independent from senior management to review the compliance with the regulations and test the early warning signals.

• Fairness : The fraud investigation will be made by a panel to ensure fairness to the defenders. In addition, whistleblowers will be appropriately protected.

• Lesson Learn : Case study on fraud risks both in Thailand and overseas will be used to train supervisors on fraud prevention.

In 2011, there is no claim or any fraud found in EGCO Group due to the above efficient preventive measures.

5.4 Board Meeting

To ensure that the Board takes full responsibility to meet the expectations of the shareholders, the Board reviews significant business policy and corporate calendar. In this regard, it is determined that the Board meeting will be held at least once every two months. Extra Meeting can be called if there is any major unplanned event that needs the Board’s consideration. The Board can also authorize the committees to scrutinize or approve the management’s activities within the delegated authority during the meeting interval. The Board also instructed management to provide monthly performance report so that the Board can follow up the business progress despite not having the Board meeting.

To facilitate the directors, EGCO plans the meeting dates and the agenda for the whole year in advance. The Chairman and President fix the agenda for the Board’s meeting. Each director can propose the agenda to the Chairman and can deliver their independent judgment. The Corporate Secretary shall serve written notice calling for the Board meeting at least one week in advance except for necessary or urgent case to preserve the rights or benefits of the Company where the meeting may be called by other methods and an earlier meeting date may be chosen. Meeting document are sent to the directors in advance to allow adequate time for digesting such information. Agenda is prioritized in terms of significance i.e., Matter Arising, Matter for Consideration, Matter for Information to ensure that items that need the most careful deliberation are given adequate time.

The Chairman allocates adequate time for Management to present their issues and to permit directors to conduct extensive discussion of agenda items and other topics of interest. The minutes of meeting are drafted for the Board’s review within 14 days after the meeting prior to the adoption at the next meeting. The Board had called 7 meetings in 2011. Each meeting took approximately 2 hours and a half. The average attendance rate was 94.28%.

Since EGCO has a number of directors who do not reside in Thailand, EGCO has set the policy to allow those directors to attend the meeting by teleconference so that EGCO and the Board will benefit from their opinion and recommendations. Such attendance is not considered the meeting quorum and those who attend the meeting by teleconference do not have the right to vote.

The Board encourages the President to invite top Management being the senior executive vice presidents to attend all the Board’s meeting. Other Managements are invited to join the meeting as deemed necessary to provide additional insights into the items being discussed because of personal involvement in those areas. Managers with future potential are given exposure to

112 Annual Report 2011 Electricity Generating Public Co., Ltd.

the Board to support the consideration of the succession planning. The Board can request for additional necessary information from the President or the Corporate Secretary or other assigned management within the extent of the established policy. The Board can also engaged independent advisor for the benefits of the business on EGCO’s expenses. Details of directors’ attendance in 2011 are illustrated in Table 1.

The Board set up a policy for non executive directors to call a meeting at least once a year. There are two meetings in 2011. The agenda items cover board of directors’ meetings, risk management, structure, roles and responsibilities of directors and management, good corporate governance, President’s performance appraisal and human resource management. 5.5 Board Self Assessment

The Board regularly conducts self assessment for future improvement. In 2011, the Board agreed to use the 2009 self appraisal form based on the forms recommended by the New Zealand Institute of Directors and the forms adopted by other peer companies in the energy sector. There are two parts, the collective appraisal form and the individual appraisal form. The grading code is “excellent” for the score of 85 and above, “very good” for the score of 75 and above, good for the score of 65 and above, “fair” for the score of 50 and above and “poor” for the score below 50. The result of the appraisal is concluded as follows.

Collective Self appraisal

The collective self appraisal form comprised 14 sections, namely (1) shareholders, (2) stakeholders, (3) the Company, (4) legal/ethical duties, (5) monitoring performance and agenda setting, (6) size, composition and independence of the Board, (7) director orientation and development, (8) Board leadership and teamwork, (9) the President, (10) Board (and Committee) meetings, (11) individual Board member contributions, (12) director and Board evaluation and compensation, (13) management evaluation, compensation and ownership and (14) succession Planning. The result can be concluded that the Board protected the benefits of shareholders, stakeholders and EGCO and that EGCO had good corporate governance. The average score was 88% which was in the excellent level. The highlights were as follows :

• EGCO’s objectives reflect shareholders’ expectation and full and accurate reporting on EGCO affair had been made. The Board understands who the key stakeholders are and have good relationship with them.

• The strategic plan is carried out of sufficient quality and content and is well reflected at operational level with key performance indicators.

• The Board communicates proper ethical and legal responsibilities to its members and ensures ethical behavior and proper compliance standards throughout the organization. The Board is sufficiently independent of the Management. The Board has leadership and effectively managed the conduct of Board business as a team.

• New directors are provided with adequate information about the Company and the Board. Director receives proper training in corporate governance. • The Board works well with the President and other managers to create an open culture that encourages frank discussion. The Board avoids excessive intrusion in the President and/or management’s responsibility.

• The Board and committee meeting are productive.

• The Chairman carries out the role satisfactory and encourages director participation in a debate.

• The Board regularly evaluates the performance of the President and creates an appropriately designed management compensation plan.

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• The Board has a company wide succession plan in place.

• The Board has a working knowledge of competitors in the sector and plays a role in public service.

Despite an excellent score, the Board viewed that plans should be made to ensure that the director development, succession planning, and director and management remuneration is perfect.

Individual Self Appraisal

The individual appraisal form comprised 7 sections, namely strategic thought, good corporate governance, competence, independence, preparedness as a director, personal attributes and awareness of stakeholders. From the individual self appraisals, most of the scores were higher than 92% which could be concluded that the directors had appropriate deliberations and contributions in accordance with the recommended best practices.

Audit Committee Self Appraisal

Apart from the Board, the Audit Committee also appraises themselves annually. The result of the self appraisal in 2011 indicated that the composition, qualifications and roles and responsibilities of the Audit Committee were still in line with the Audit Committee’s Charter B.E. 2551 and the international best practices. 5.6 Performance Appraisal of President and Top Executives

All the non-executive directors will appraise the President performance against the corporate and individual achievement. Indicators include the following : • Qualitative indicators being leadership, relationship with the Board, risk management and internal control, human resources management, good corporate governance and Code of Conduct.

• Corporate achievements based on the committed Key Performance Indicators.

• Capabilities to enhance business development.

The Nomination and Remuneration Committee is responsible for endorsing the performance appraisal of the senior executive vice presidents and executive vice presidents based on the individual achievement of each executive. 5.7 Remuneration for Directors and Management

EGCO set the directors’ remuneration at the appropriate rate which is comparable to that of the leading companies in the same sector. The remuneration comprises monthly retainer fee, meeting allowance and bonus which is paid once a year and is tied with EGCO’s achievement. The Nomination and Remuneration Committee shall recommend the remuneration framework to be endorsed by the Board before proposing to the shareholders. EGCO has a policy to disclose the remuneration of each director for transparency. Directors that also serve as committee members will be entitled to extra remuneration to match the increase in responsibilities. Management who serve as directors and committee members shall refrain from taking director remuneration.

The non-executive directors shall set the remuneration of the President taking into account the performance appraisal and the peer payment. The Board also approves the pay structure of the Company. EGCO periodically conducts the survey of the executive remuneration to ensure that the rate is comparable to that of the peer companies and adequate to attract and motivate the qualified executives.

The remuneration of directors and management is disclosed under the topic of shareholding and management structure in this annual report.

114 Annual Report 2011 Electricity Generating Public Co., Ltd.

5.8 Board and Management Training

The Board pays attention to continuous development of directors and managem ent. In 2011, The following development plan was implemented to ensure efficiency and effectiveness.

Director Development

Continued development is encouraged for all directors :

New Directors : Directors’ orientation is arranged where directors will have a chance to meeting with Management. Directors’ manual is updated to equip incoming directors with knowledge about EGCO. Directors are also encouraged to attend training programs at the Institute of Thai Directors (IOD).

Existing Directors : The Board encourages continued development covering in-house training and outside training at the IOD or other relating academic institutes. In 2011, EGCO’s in-house training programs for directors were risk management and fraud risk management, and new accounting principles and the Company’s governance. The seminar on an overview of industry, business characteristics of the Group companies, current and future plans were also provided to the Board. EGCO also arranged a Board visit to Solar Power Plant Project in Lopburi, and site visits to overseas power plants to educate our directors on power business and future trend. Company directors are well educated about the Company’s business and their responsibilities as a director. The list of directors who attended the courses at IOD and outside institutes as of December 2011 is shown in Table 2.

Management Development and Succession Plan

EGCO supports the executive development program to enhance Management capacities and skills to be suitable to perform their duties and to assign the suitable and challenging job.

The Board determines policies and principles for selection of the President and his successor in the event of an emergency or the retirement of the President taking into account educational background, experience, capabilities, ethics and leadership. The selection process is fair and transparent. The Nomination and Remuneration Committee shall consider and propose the qualified candidates to the Board.

The President is entrusted to select the knowledgeable, competent and experienced executives in accordance with the qualifications endorsed by the Nomination and Remuneration Committee. The approval of the candidates shall be as stated in the Company’s Regulation on Human Resource Management B.E. 2550 and the resolution of the Board as follows :

• The Nomination and Remuneration Committee shall approve the appointment of Senior Executive Vice President, Executive Vice President, and nominate senior executives of subsidiary/joint venture companies that EGCO has the right to nominate for a position equivalent to EGCO’s EVP level and upward.

• The President shall appoint the division and section managers.

• The appointment of Corporate Secretary shall be by the Board while the appointment of Division Manager of Internal Audit shall be endorsed by the Audit Committee.

The Nomination and Remuneration Committee has assigned the Management to prepare the succession plan for 17 key positions along with the executive development plan to ensure that qualified employees would be selected under the D-R-I-V-E people attributes as follows :

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Dedication to Excellence

Initiatives and Dynamic

Result Orientation

Value Differences and Work as Team

Environment, Social and Safety Concern

The Management development plan is prepared to focus on development of core, managerial/leadership competencies and functional competencies. Key courses and numbers of trainees for each course are as shown below :

Courses

No. of participants

Director Certification Program Executive Development by Thai Listed Companies Association Management of Public Economic for Executives at King Prajadhipokâ&#x20AC;&#x2122;s Institute

2 2 1

Table 1: Meeting Attendance

No.

1 2 3 4 5 6 7 8 9 10

Name

Mr. Pornchai Rujiprapa Chairman Mr. Aswin Kongsiri Vice Chairman Independent Director Mr. Chaipat Sahasakul Independent Director Mr. Thanapich Mulapruek Independent Director Mr. Somphot Kanchanaporn Independent Director Police Lieutenant General Pijarn Jittirat Independent Director Mr. Phaiboon Siripanoosatien Independent Director Mr. Somboon Arayaskul1 Director Mr. Wisudhi Srisuphan2 Director Mr. Kurujit Nakornthap3 Director

Meeting (time) Board Meeting 7 times/year

Audit Committee 17 times/year

Investment Committee 11 times/year

Nomination and Good Corporate Remuneration Governance and Committee Corporate Social 10 times/year Responsibility Committee 2 time/year

7/7

11/11

7/7

10/10

2/2

7/7

17/17

6/7

17/17

7/7

17/17

7/7

10/10

2/2

7/7

9/10

2/2

5/5

7/8

1/2

0/0

1/1 5/5

116 Annual Report 2011 Electricity Generating Public Co., Ltd.

No.

11 12 13 14 15 16 17 18 19 20 21

Name

Mr. Surasak Supavititpatana4 Director Mr. Kulit Sombatsiri5 Director Mr. Peter Albert Littlewood6 Director Mr. Hideaki Tomiku Director Mr. Shinji Tsuchiya6 Director Mr. Mark Jobling6 Director Mr. Toshiro Kudama7 Director Mr. Akio Matsuzaki8 Director Mr. Ryota Sakakibara7 Director Mr. Vinit Tangnoi9 Director and President Mr. Sahust Pratuknukul President

Meeting (time) Board Meeting 7 times/year

Audit Committee 17 times/year

Investment Committee 11 times/year

2/2

1/1

6/7

10/11

7/7

1/1

1/2

3/3

6/6

8/9

7/7

8/8

2/2

7/7

3/3

8/8

0/0

0/1

6/6 4/6

Resigned on October 1, 2011 Resigned on February 28, 2011 3 Being appointed as director on February 28, 2011 and resigned on December 1, 2011 4 Being appointed as director on October 25, 2011 5 Being appointed as director on December 13, 2011 6 Resigned on February 23, 2011 7 Being appointed as director on February 28, 2011 8 Being appointed as director on February 28, 2011 and resigned on January 29, 2012 9 Resigned due to the end of contract on September 30, 2011 1 2

Note :

Nomination and Good Corporate Remuneration Governance and Committee Corporate Social 10 times/year Responsibility Committee 2 time/year

3 members in Audit Committee comprising no. 3, 4, 5 8 members in Investment Committee comprising no. 1, 8, 11, 14, 16, 19, 20, 21 8 members in Nomination and Remuneration Committee comprising no. 2, 6, 7, 14, 16, 20, 21 8 members in Corporate Social Responsibility Committee comprising no. 2, 6, 7, 8, 10, 12, 20, 21

Directors

1. Mr. Pornchai Rujiprapa Chairman 2. Mr. Aswin Kongsiri Vice Chairman Independent Director 3. Mr. Chaipat Sahasakul Independent Director 4. Mr. Thanapich Mulapruek Independent Director 5. Mr. Somphot Kanchanaporn Independent Director 6. Police Lieutenant General Pijarn Jittirat Independent Director 7. Mr. Phaiboon Siripanoosatien Independent Director 8. Mr. Surasak Supavititpatana Director 9. Mr. Kulit Sombatsiri Director 10. Mr. Vinit Tangnoi Director 11. Mr. Hideaki Tomiku Director 12. Mr. Toshiro Kudama Director 13. Mr. Akio Matsuzaki Directo 14. Mr. Ryota Sakakibara Director 15. Mr. Sahust Pratuknukul Director and President

√ √ √ √ √ √ √ √ √

√

Chairman Directors’ Successful Audit Financial Accounting Director The Role 2000/The Certification Formulation Committee Instrument for non- Accreditation of the Role of Program and Execution Program for Directors accounting Program Compensation Chairman of Strategy Audit (DAP) Committee Program Committee Program

√

IFRS

Courses

√

Audit Monitoring Monitoring Monitoring The Board’s Monitoring Committee the System Fraud Risk the Quality Role on Fraud the Internal and of Internal Management of Financial Presentation Audit Continuing Control Reporting and Function Development and Risk Detection Program Management

Table 2 : List of directors who attended the courses at IOD and outside institutes

√

Risk it all

117

118 Annual Report 2011 Electricity Generating Public Co., Ltd.

Accountability for Stakeholders Employees Fully aware that our people are the road that leads to the success and sustainability of economic, social and environmental operations, the EGCO Group emphasizes creating relationships between employees and the organization through its operations compatible with its policy and responsive to employees’s needs. The management is divided into three main aspects : 1. Fundamental Management, covering two areas of operation :

1.1 Specification of compensation and benefits

The EGCO Group sets its compensation system according to the rank, responsibility and competence of employees as well as provides benefits and welfare to employees and their families based mainly on necessity and their reasonable needs according to appropriate principles. The annual increase in the wages of employees at every level is considered according to these two major components :

• Success of the organization : taking into account the average rate of wage increases of businesses within the industry, the economic conditions each year, and consideration of the management division.

• Operating results and perseverance of employees

1.2 Training and development

All in all, the standards used to set the wage increase are to promote the fairness of wage increases among employees in order to keep competent and good employees with the organization. Moreover, the EGCO Group constantly studies, analyses and compares compensation and benefits with those of other businesses in the same industry to assure that employees receive proper compensation, benefits, and welfare at a competitive level in the market. The welfare committee has been set up comprising employees who are interested and ready to monitor, follow up and provide comments and suggestions to enhance the efficiency of welfare management enabling the company to respond to the needs and satisfaction of employees at every level. This is one way to promote good labour relations between employees and the company. The EGCO Group is well aware of the importance of the development of skills, competence and potential of personnel which helps strengthen the efficiency and effectiveness of the current operations and creates the opportunity to progress along future career paths. The company, therefore, allocated budget and time for its employees to continually train and develop in 2011. The people development plan of the EGCO Group places emphasis on the development of the organization’s desirable competency including core competency, managerial competency and functional competency. This goes paralleled with the application of the individual development plan and job rotation in accordance with the five year development plan

119

(Development Road Map Model) to enhance the work competence of each employee consistent with the direction and operating plan of the organization and to prepare for any changes in the external environment.

Figure : People Development Plan 2011

In 2011, the human resource division of the EGCO Group has developed employees through a variety of projects and courses such as self-learning, training conducted by experts, field trips, sharing and learning among employees, and practice.

Figure : Employees Development Road Map

2. Relationship Management The EGCO Group realizes the significance of individuality in addition to a focus on teamwork. Therefore, the value and culture of the organization are promoted among employees to generate acceptance and respect towards individual differences. This can lead to coordination and work collaboration through the core competency of the EGCO Group called DRIVE.

120 Annual Report 2011 Electricity Generating Public Co., Ltd.

The EGCO Group believes that good relationships are one factor stimulating employees to work happily. When employees are happy working and have competence suitable to the job as continually trained and developed, they will produce efficient work. In the meantime, the operation of the organization will eventually succeed.

In 2011, the EGCO Group organized the following activities to create and encourage better relations among employees :

• Communication Day: a quarterly semi-formal gathering in which the executive officers and employees meet to share information, news and trends, both inside and outside the organization, and employees are given anopportunity to present, exchange ideas as well as ask the executives questions.

• Employee Visit: the President visits the employees in the EGCO Group to explain the direction of operations, talk, answer questions and have lunch with employees. In 2011, this activity was organized twice with the committee and the executives meeting with employees from Rayong Power Plant and Khanom Power Plant.

• EGCO Group Knowledge Sharing: an activity in which the executives or employees share their knowledge, experience and expertise to the employees in the EGCO Group. The activity also allows employees at every level to exchange knowledge. This activity was organized once in 2011.

•

EGCO Group Sports Day: an annual activity to promote relations among employees through sport activities. Each company under the Group takes turns to be a host so that employees have the opportunity to learn about the operations of other companies and power plants in the EGCO Group. In 2011 Rayong Power Plant was the host organizing this activity in Rayong.

In addition to these activities, each company organizes a number of events to promote internal relations such as New Year’s parties, retirement parties, and religious and cultural activities. The companies also support activities organized by employees’ clubs such as the photo club, Buddhism club, and golf club. In the meantime, the EGCO Group shares information, news and its activities through various channels such as in-house magazines, E-newsletter, public announcement board, phone lines, mobile telephones with the objective to receive and send information between the companies and employees and to encourage employees to participate in activities that the company group organizes. 3. Management in Participation and Social Creation

The EGCO Group strongly believes that promoting employees to take part in activities organized by the organization and society is one way to develop “competency” and raise awareness in the “value” of oneself.

Apart from assigning employees to work with a community in each area to initiate and oversee a useful activity to enhance the quality of life and to preserve the environment of a community, the EGCO Group provides its employees with the opportunity to become “volunteer employees” to develop society through a preservation of the watershed forest activity and to promote learning and public-mindedness among young people. This is carried out with the objective to promote collaboration between employees from the EGCO Group, the public and private sectors, and communities.

In 2011, employees from the EGCO Group had the chance to continue over 20 projects for communities and society overseen by the organization and took part in flood victim relief in Nakhon Sri Thammarat and Surat Thani as well as the earthquake and tsunami in Japan and the devastating floods in Thailand at the end of 2011.

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Shareholders and Investors Realizing its obligations to shareholders, the EGCO Group stipulated policy in its code of conduct stating that the EGCO Group is committed to building growth with genuine competency or capability so that the shareholders gain sustainable returns derived from the efficient operations and solid operating results of the Company. The EGCO Group respects the right of the shareholders to receive the necessary information for fair assessment of the Company. The Company also discloses operating results, financial status as well as accurate supporting details as stipulated by the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). Stock Price The average stock price in 2011 was 93.21 baht per stock, an increase of 7.73% from 2010. The highest closing price was 112.00 baht on 19 January 2011, the lowest closing price at 80.00 baht on 26 October 2011, and the Price-Earnings ratio (P/E ratio) on 30 December 2011 was 10.5. Dividend Payment The dividend payment policy of the EGCO Group specifies that shareholders receive dividend twice a year at the rate of 40% of the net profits of the total financial statements after income tax is deducted or at the amount that gradually and regularly increases without necessary cause such as the future business expansion of the Company in the form of projects, or dividend payment substantially affecting the normal operations of the Company whereby dividend paid shall not exceed the accrued profits of separate financial statements. Figure : The Statistics of Previous Dividend Payment of the Company

Baht/Share Interim

4.75

Final

5.00

4.00 2.25 1.25

2.50 1.25

2.75 1.50

3.00 1.50

3.25

2.50

5.25

2.75

2.00

2.50

1.75

1.00

1.25

1.50

2001

2002

2003

2004

2005

2.00

2.25

2.50

2006

2007

2008

2009

2010

2011

122 Annual Report 2011 Electricity Generating Public Co., Ltd.

Management of relations with shareholders and investors Within the EGCO Group the Investor Relations Section is responsible for giving accurate, complete, sufficient and prompt information to shareholders, investors, and analysts alike. The shareholders and investors can also share their comments and contact the unit directly as regards any enquiries at 02 998 5145-8 or ir@egco.com. Furthermore, the EGCO Group has set up an annual plan to create communication channels and activities for shareholders, investors and the Company’s chief executives officers as described below:

• Analyst Meeting

The EGCO Group organizes a talk for investors and analysts to report quarterly operating results in which the president and the vice president as well as CEOs always participate in sharing information and answering questions.

• Power Plant Visit Project

The EGCO Group organizes a project where shareholders and investors pay visits to the power plants of the EGCO Group to create understanding about the business operations of the Company. They also get to meet the senior management of the Company annually. This project is open for shareholders to sign up for attendance at the Annual General Meeting or apply via the EGCO website two weeks before the meeting. In 2011, the shareholders paid a visit to Kang Koi Power Plant in Saraburi and the investors visited Lopburi Solar Power Plant and were given information and knowledge about the plant.

• One-on-One Meeting

The EGCO Group organizes the one-on-one meeting for investors and analysts which the Company’s senior management and the Investor Relations Section regularly attend as requested by investors and analysts. If either party cannot attend the meeting in person, a conference call can be organized to suit every party’s convenience.

• Meeting with investors outside the Company (Roadshow)

In 2011, the EGCO Group met with minor investors and institutional investors, both national and international, and worked in collaboration with the Stock Exchange of Thailand, TISCO Securities Public Company Limited, J.P. Morgan Securities Public Company Limited, and Phatra Securities Public Company Limited. Moreover, the Company organized trips abroad such as Hong Kong and Singapore to share information with institutional investors.

• Newsletter

The EGCO Group has improved its newsletter called “Life”, communicating to the shareholders, reporting news, operating results, activities conducted by the Company, a calendar showing the activity plan of EGCO, and further knowledge. Moreover, a new channel to obtain news is through e-mail alerts on the Company’s website.

Customers The EGCO Group is proud of its role, duties and responsibilities as a “Power producer and distributor” to the Electricity Generating Authority of Thailand (EGAT) and clients from the industrial estate, and as a “Service provider in energy” in terms of machine operation, maintenance, engineering, construction, and providing training to power plants and industrial plants, both domestically and internationally. In addition, the EGCO Group undertakes the responsibility as “Water producer and distributor” to Provincial Waterworks Authority (PWA) adhering to the brand value of Reliable, Dynamic, and Helpful in delivering quality products and services at reasonable price, while furthering good relations. In 2011, the EGCO Group continued to generate and distribute quality electricity according to electrical standards at the quantity and time condition specified by EGAT and clients from the industrial estate with the objective of providing its clients with sufficient

123

electricity to serve the people and for use in their daily operations with the availability payment higher than the specified criteria stated in the Power Purchase Agreement and higher than the annual target.

Power Plant

Rayong Power Plant Khanom Power Plant Roi Et Green Power Plant EGCO Cogen

Availability Payment 2011 (percent) Annual target

91.55 90.22 84.82 95.82

Achieved

93.09 95.28 86.00 98.12

In relation to energy service, the EGCO Group is able to maintain its service at the highly satisfactory level. According to a satisfaction survey conducted with clients in the maintenance business, 93.02 % were satisfied with the employees providing service and the operating results. As regards the water manufacturing and distributing business, the EGCO Group places emphasis on “quantity” and “quality” in supplying water mainly to the Provincial Waterworks Authority (PWA) of Ratchaburi and Samut Songkhram. In 2011, the EGCO Group was able to supply water in accordance to the demands of customers at an average of 36,000 cubic meters a day, higher than the minimum amount of 34,000 cubic meters a day as agreed in the contract. In addition, the EGCO Group produced water over the production standards set by the Thai Industrial Standards Institute. After the survey conducted by the Department of Health, Ministry of Public Health from 2002 to 2011, the water produced by EGCOM TARA was certified “Drinking tap water”. One more buying-selling water station for PWA has been set up - Bang Khonthi Water Supply Station to support the water supply of PWA in tourist areas such as Amphawa Floating Market, Bang Noi Floating Market, Bang Nok Kwak Floating Market and other places in Amphoe Bang Khonthi. Trading Partners and Competitors The EGCO Group, realizing the significance of “Trading partners” as part of a business alliance that takes part in promoting sustainable development, treats them with fairness and equality taking into account our mutual interests. Furthermore, the EGCO Group creates the opportunity to exchange knowledge, experience, and expertise among the EGCO Group and its trading partners, as well as consistently participate in and support the creative activities of its trading partners in order to build trust and further good relations. The EGCO Group conducts itself in a manner appropriate to fair competition, not taking advantage of its competitors by using methods not in compliance with the law, and expressing ideas beneficial to the regulations and accepted standards of practice. The Company will not seek information about its trading partners and competitors in a dishonest manner nor slander the reputation of its trading partners and competitors. In 2011, the Company did not have any disputes with its trading partners and trading competitors. Environment The EGCO Group strongly believes that environmental management is the obligation of the organization requiring systematic development. Therefore, a strategic project regarding environmental management has been established alongside the safety and occupational health system. The Safety, Health and Environment (SHE) Committee has been set up to act in considering the direction, principles and work plan in relation to the safety, occupational health and environment of the EGCO Group in compliance with its policy, objective and strategic plans. Follow-up, evaluation and development are systematically conducted in order to achieve the efficient and effective operation of power plants of the EGCO Group following the same direction.

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In 2011,CONSERVATION COMMUNITY the EGCO Group has adopted the policy and practice guidelines regarding Green Procurement proposed by the working 3UPPORTING FOREST group of the Green Procurement Project. During the first year of operation, products entitled to use the green label from the Thai Green #ONSTRUCTING on the +ANCHANAPISEK Label Scheme publicized Thailand Environment Institute website, and computer products certified with international eco-labeling "UILDING $OI BUILDINGS FOR LEARNING )NTHANON .ATIONAL constituted the primary focus. The EGCO Group has operated Green Procurement project, conducted itself in compliance with the 0ARK #HIANG -AI standards stipulated by the government sector, and constantly checked the quality of air, water and noise of the power 0RESENT plants under YEARS its responsibility in order to be an active participant in relieving environmental pollution, a serious problem in the world right now. 0ROMOTION OF 0ATH OF ,EARNING AND #REATION OF 0UBLIC MINDEDNESS AMONG |9OUTH}aTHE "EGINNING OF THE 3USTAINABLE $EVELOPMENT OF 3OCIETY

Community "UILDING UP TO and Society

%'#/ 'REEN "LOOD 0ROJECT

3USTAINABILITY

The EGCO Group has the vision that the organization will operate its business alongside the preservation of the environment and society as underscored by the Company’s mission - “Energy Creator…For Life”. development of0ROMOTING THE (OW TO &IGHT 'LOBAL

"EGINNING OF ,EARNING

7ARMING WITH 3USTAINABLE For nearly two decades, the EGCO Group has collaborated with communities and society in initiating and conducting activities along ,IVING 0ROJECT three main $EVELOPING ,EARNING paths to operate in harmony alongside the community, society and environment. These include : 'REEN ,EARNING 0ROJECT AT THE 0RIMARY ,EVEL

1. Promotion and Development of “Quality of Community Life” %'#/ &OREST 9OUTH #AMP )NSTILLING With particular attention being given to the community in the areas around the headquarters and power plants, the EGCO Group 0ROJECT #ONSCIENTIOUSNESS AMONG 9OUTH works with communities to preserve the environment and develop projects covering the areas of education profession, and sanitation for the good quality in the communities. of life of people 0RESENT YEARS

0ROMOTION AND $EVELOPMENT 0ATH OF l1UALITY OF #OMMUNITY ,IFEm 6OLUNTEERING EMPLOYEES #ONSCIENTIOUS 9OUTH %NVIRONMENT /CCUPATIONAL 0ROMOTION

0HASE 0ROJECT

(ELPING 0EOPLE}S ,IVELIHOODS 0ROJECT

"IOLOGICAL !GRICULTURE FOR 3USTAINABLE ,IVING 0ROJECT

%'#/ +HAO #HA -AO #ONSERVATION 9OUTH #AMP 0ROJECT

.EW (OME UNDER THE 3EA 0ROJECT

"UILDING 'REEN 0LANTING 4REES FOR .ATURAL "ALANCE 0ROJECT

0AINTING 3CHOOL "UILDING 0ROJECT

"UILDING 'REEN 0LANTING 4REES FOR .ATURAL "ALANCE 0ROJECT

"REEDING OF "LUE 3WIMMING #RAB 0ROJECT

0UBLIC (EALTH

,EARNING "UILDING FOR ,OCAL 7ISDOM 0ROJECT (EALTH -ARKET 0ROJECT

+HANOM

3UPPORTING &ARMERS} 2ICE (ARVEST 0ROJECT

2AYONG

-OBILE -EDICAL 5NIT 0ROMOTION 0ROJECT

%'#/ #OGEN

-OBILE -EDICAL 5NIT 0ROMOTION 0ROJECT

2OI %T 'REEN

0OWER 0LANT

2. Preservation of “Watershed Forest” … Origin of Life, Source of Energy

Realizing the significance of the conservation of a watershed forest as it is a source of origin and renewal of natural water, an origin of rivers and streams, and an essential factor in living life, the EGCO Group has worked in collaboration with Doi Inthanon National Park to develop and operate projects aiming to conserve watershed forest in the north for over 15 years. The major projects that have continued until the present are Forest : The Circle of Life, and A Watershed Forest : A Source of Energy for Life. The EGCO Group also continually supports the operations of the Thai Forest Conservation Foundation.

125

#ONSERVATION 0ATH OF 7ATERSHED &ORESTa/RIGIN OF ,IFE "EGINNING OF %NERGY #ONTINUALLY OPERATING "UILDING UP PARTICIPATION 0LANTING 4REES ON (IGH -OUNTAINS

$EVELOPING A LEARNING SOURCE REGARDING WATERSHED FOREST 3UPPORTING FOREST CONSERVATION COMMUNITY #ONSTRUCTING BUILDINGS FOR LEARNING

+ANCHANAPISEK "UILDING $OI )NTHANON .ATIONAL 0ARK #HIANG -AI

! 7ATERSHED &OREST

! 3OURCE OF %NERGY FOR ,IFE

4HAI &OREST #ONSERVATION &OUNDATION

0RESENT

YEARS

0ROMOTION OF 0ATH OF ,EARNING AND #REATION OF 0UBLIC MINDEDNESS AMONG |9OUTH}aTHE "EGINNING OF THE 3USTAINABLE $EVELOPMENT OF 3OCIETY #ONSERVATION 0ATH OF 7ATERSHED &ORESTa/RIGIN OF ,IFE "EGINNING OF %NERGY

3. Promotion of Path of Learning and Creation of Public-mindedness among ‘Youth’…the Beginning of the Sustainable Development of Society"UILDING UP TO %'#/ 'REEN "LOOD 0ROJECT

3USTAINABILITY

#ONTINUALLY OPERATING ! 7ATERSHED &OREST

Believing that learning and experience outside the classroom is key in developing children and youth, a major force of the country’s ! 3OURCE OF %NERGY FOR ,IFE future development, the EGCO Group brainstorms and collaborates with children, 4HAI &OREST youths, teachers, and experts in child 0ROMOTING THE "UILDING UP PARTICIPATION (OW TO &IGHT 'LOBAL "EGINNING OF ,EARNING #ONSERVATION development and the environment in producing7ARMING WITH 3USTAINABLE instructional media and improving activities for children and youths from primary &OUNDATION ,IVING 0ROJECT 0LANTING 4REES ON and secondary to university levels of education. The projects that have been operated until present are EGCO Forest Conservation $EVELOPING A LEARNING (IGH -OUNTAINS

'REEN ,EARNING 0ROJECT SOURCE REGARDING $EVELOPING ,EARNING ,OCAL 'UIDE 4RAINING 0AVING THE 7AY TO YouthAT THE 0RIMARY ,EVEL Camp in association with Doi Inthanon National Park, -AKING AND and How to Fight&ORESTS 4HE #IRCLE Global Warming with Sustainable Living in collaboration WATERSHED FOREST OF ,IFE 0ROJECT withCONSERVATION COMMUNITY the 3UPPORTING FOREST Thailand Environment Institute. 7ATERSHED &OREST $EVELOPING .ATURAL 3TUDY 0ATHS l+EW $RAWING AND

-AE 0ANm $OI

0HOTOGRAPHY #ONTEST )NSTILLING )NTHANON .ATIONAL +ANCHANAPISEKsubsidies the Company%'#/ &OREST 9OUTH #AMP provides and suggestions to local public-minded youth groups to form the ‘EGCO Green In addition, 0ROJECT $ISTINCTIVE #ONSCIENTIOUSNESS #ONSTRUCTING 0ARK #HIANG -AI "UILDING $OI BUILDINGS FOR LEARNING #OMMUNITY &OREST AMONG 9OUTH Blood Youth Network’ in the)NTHANON .ATIONAL central and northern #ONTEST regions for environmental operation and public interest. This project and activity 0ARK #HIANG -AI 0RESENT YEARS are entirely initiated and carried out by the network.

0RESENT

0ROMOTION OF 0ATH OF ,EARNING AND #REATION OF 0UBLIC MINDEDNESS AMONG |9OUTH}aTHE "EGINNING OF THE 0ROMOTION AND $EVELOPMENT 0ATH OF l1UALITY OF #OMMUNITY ,IFEm 3USTAINABLE $EVELOPMENT OF 3OCIETY 6OLUNTEERING EMPLOYEES "UILDING UP TO 3USTAINABILITY #ONSCIENTIOUS 9OUTH 0ROMOTING THE "EGINNING OF ,EARNING %NVIRONMENT /CCUPATIONAL 0ROMOTION $EVELOPING ,EARNING AT THE 0RIMARY ,EVEL

0HASE 0ROJECT

(ELPING 0EOPLE}S ,IVELIHOODS 0ROJECT

"IOLOGICAL !GRICULTURE FOR 3USTAINABLE ,IVING 0ROJECT

%'#/ +HAO #HA -AO #ONSERVATION 9OUTH #AMP 0ROJECT (OW TO &IGHT 'LOBAL "UILDING 'REEN 0LANTING 7ARMING WITH 3USTAINABLE "UILDING 'REEN 0LANTING 4REES FOR .ATURAL "ALANCE 4REES FOR .ATURAL "ALANCE ,IVING 0ROJECT 0ROJECT 0ROJECT 'REEN ,EARNING 0ROJECT

.EW (OME UNDER THE 3EA 0ROJECT "REEDING OF "LUE 3WIMMING #RAB 0ROJECT

0UBLIC (EALTH )NSTILLING #ONSCIENTIOUSNESS AMONG 9OUTH

0AINTING 3CHOOL "UILDING 3UPPORTING &ARMERS} %'#/ 'REEN "LOOD 0ROJECT 2ICE (ARVEST 0ROJECT 0ROJECT

(EALTH -ARKET 0ROJECT %'#/ &OREST 9OUTH #AMP 0ROJECT +HANOM

2AYONG

-OBILE -EDICAL 5NIT 0ROMOTION 0ROJECT

%'#/ #OGEN

,EARNING "UILDING FOR ,OCAL 7ISDOM 0ROJECT

2OI %T 'REEN 0RESENT

0ROMOTION AND $EVELOPMENT 0ATH OF l1UALITY OF #OMMUNITY ,IFEm 6OLUNTEERING EMPLOYEES #ONSCIENTIOUS 9OUTH %NVIRONMENT

0HASE 0ROJECT

(ELPING 0EOPLE}S ,IVELIHOODS 0ROJECT

"IOLOGICAL !GRICULTURE FOR 3USTAINABLE ,IVING 0ROJECT

%'#/ +HAO #HA -AO #ONSERVATION 9OUTH #AMP 0ROJECT

.EW (OME UNDER

"UILDING 'REEN 0LANTING

0AINTING 3CHOOL "UILDING 0ROJECT

"UILDING 'REEN 0LANTING

3UPPORTING &ARMERS} 2ICE (ARVEST 0ROJECT

0OWER 0LANT

YEARS

126 Annual Report 2011 Electricity Generating Public Co., Ltd.

Providing Relief to Victims of Natural Disasters The year 2011 was a year when the world including Thailand all greatly suffered from natural disasters, especially the flooding in Thailand starting at the end of July and having resulted in substantial agricultural and industrial damage and loss in 63 provinces across the country. Due to a number of domestic and international crises, the EGCO Group has taken part in the relief and restoration programs for victims as summarized below :

Occurrences

Flooding in the south of Thailand Earthquake and Tsunami in Japan Flooding in 63 provinces in Thailand

Help provisions

• Providing over 6,000 relief packages and 2,700 liters of drinking water to victims in Amphoe Khanom and other districts in Nakhon Sri Thammarat and Surat Thani. • Donating 1 million baht through the TV program “People, Government for Flood Relief” on Modernine TV. • Supporting EGAT to shut down 2 electricity generators, supplying 122 megawatts each, in Nong Jok Power Plant to alleviate electrical power crisis. This resulted in Japan being able to generate electricity to 240,000 households. • Donating 1 million baht through the Embassy of Japan in Thailand. • Donating a 500,000 baht subsidy to Ryuichi Kawamura Exclusive One Night Charity Concert in Bangkok. Partial income went to the victims. • Donating 2 million baht through Government House. • Donating 500,000 baht and 200 protective covers through the Ministry of Energy. • Donating 1 million baht through the Ministry of Science and Technology. • Donating 1 million baht to the “Chula-Songkroh Fund” in the “In Memory of King Rama V the Great 2011” program, partially given to victims. • Providing 2,000 relief packages for victims in Lopburi. • Donating a tank filled with 1,000 liters of drinking water to the Ban Din Dang Community, and 113 relief packages to the Ban Din Dum - Nong Bua Rong Community, Amphoe Jung Han, Roi Et. • Donating 8,760 bottles of drinking water to help victims in six tambons in Amphoe Khlong Luang, Pathum Thani. Joining with the Khlong Luang Municipality after the floods to clean White House Village as part of the activity Big Cleaning Day.

Mass media The EGCO Group continually places emphasis on reporting the information, news, and progress of the operating results of the organization by working in collaboration with the mass media in disclosing information and news pertaining to the EGCO Group in a manner favorable to the stakeholder that is a fair, appropriate and timely. Moreover, a variety of activities to promote relations and participation are organized through different communication channels. In 2011, the EGCO Group organized three press conference to report the operating results of business and activities of the organization, six media trips to see the work and activities of the organization, 12 interviews and meetings for opinion exchange with executives, 26 items of news and articles regarding the dissemination of the news, information and activities of the organization. In addition, the Company has successively supported and taken part in creating social projects and activities initiated and operated by the media throughout the year.

127

Internal Control The Board of Directors has entrusted the Audit Committee the responsibility to review the appropriateness and effectiveness of the internal control system provided by the management. This is to ensure that EGCO’s internal control system is adequate, appropriate and in line with the guidelines of The Stock Exchange of Thailand’s (SET) and the internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). EGCO’s internal control covers management control, operational control, financial control, and compliance control. The Board set out the duties and responsibilities of the Internal Audit Division in the Internal Audit Charter which was reviewed by the Audit Committee and approved by the Board. The Internal Audit Division independently discharges its duties and functionally reports to the Audit Committee. Meanwhile, the administrative tasks of the Internal Audit Division are reported to the President. The internal audit scopes of EGCO and its subsidiaries are financial audit, operational audit, compliance audit, information system audit, and management audit. EGCO control framework and operation are described as follows : Control Environment

• The Board set up the clear vision, mission, and objectives to be guidelines for the

management and employees. The operation is periodically reviewed to ensure conformity with the business objectives while the fair treatment to stakeholders is also considered for long-term benefit of EGCO.

• To support business growth, the organization structure has been properly set and adjusted by the Board when the environment changes.

• Code of Conduct including good corporate governance guidelines are written and reviewed periodically. All employees are advised to understand their responsibilities to uphold the Code of Conduct which includes the measure to avoid the conflict of interest. Failure to observe the Code of Conduct may result in a range of disciplinary actions.

• Regulations, instructions and Table of Authority for accounting, finance, budget, procurement, and human resource functions are established and clearly announced to all employees for acknowledgment and practices.

128 Annual Report 2011 Electricity Generating Public Co., Ltd.

Risk Management

regulations. The Legal Division also provides consultation The Risk Management Committee (RMC) has been set up at the based on case by case basis. Management level which comprises of EGCO’s top executives. • The Internal Audit Division is responsible for regularly reviewing EGCO’s President serves as the chairman of the committee. RMC adequacy and appropriateness of internal control system. reviews risk management evaluation and mitigation of EGCO and Internal Audit Plan is set to cover all major functions. subsidiaries and regularly reports to the Audit Committee and the Board. The Board of Directors has focused on the likelihood of the • To ensure the compliance with Computer Related Crime Act, irregularities, risk mitigation and early warning systems. The Board the Computer Related Crime Act has been clearly entrusts the Audit Committee to review with the management the communicated to all employees for acknowledgment and risk management policy and the compliance with such policy. compliance. All employees are required to sign IT Compliance Statement to confirm the non-violation of the law. The details of Risk Management of EGCO and subsidiaries are disclosed under “Risk Factors”. Information and Communication

EGCO has established information system to maintain adequate important information for committees’ and management’s decision To ensure that guidelines and policies set by the Board and the making via communication channels as follows : management are complied with, efficient control of accounting, finance, operation, and governance are implemented as follows : • For internal communication, all employees will receive information about the company’s policies, regulations, • Transactions and amount for approval authority of management instructions and good corporate governance via intranet are set forth in the Table of Authority. and different level of meetings. Employees are encouraged provide feedback on the improvement of operations • Approval authority, operation or accounting record, and toefficiency in the meetings. safeguard of asset functions are segregated. Control Activities

external communication, EGCO’s information has been • The Asset Management Division is responsible for regularly • For disclosed via the SET’s Community Portal system and EGCO’s monitor the operation results of EGCO’s subsidiaries and joint

ventures.

web site at www.egco.com as well as the quarterly analyst meeting, EGCO newsletter, and press conference.

• Approval process of connected transactions is clearly set out. • The meetings among the Audit Committee, external auditors The connected transactions are to be approved by directors

or management who has no conflicts of interest, taken into and concerned Management are held to review the compliance of financial accounting with the General Accepted account the best benefit to EGCO. Accounting Principles and International Accounting Standards. • The Corporate Secretary is entrusted to ensure that EGCO and the Board’s practices together with EGCO’s information • Information are recorded and maintained completely, disclosure are in compliance with the Securities and Exchange correctly, timely and adequately to support the decision Acts, the notification and regulation of the SET, Securities making. Information such as power plant operation data and Exchange Commission (SEC), and other related laws and along with information on accounting, budgeting and finance are recorded and maintained.

129

• Accounting records and supporting documents which will be have been reported to the Audit Committee and the Board

used to support the financial statements preparation are of Directors by the Internal Audit Division. The 2011 evaluation completely kept in orderly manner. There is no deficiency in results can be concluded that the internal control of EGCO and its subsidiaries are sufficient and appropriate. those documents informed by the auditor. • The compliance database is developed for reference • To ensure the compliance with rules, regulations and Code and tracking. The Legal Division is responsible for updating of Conduct, employees from Senior Vice President and the compliance database and providing recommendation to upwards of EGCO and its subsidiaries are required to thoroughly review their 2011 work practices before signing employees. the Code of Conduct Compliance Statement and the General • The Board of Directors receives invitation letters, meeting Representation Letter to his/her managers up to the President. agendas and supporting documents far enough in advance EGCO’s President and the Managing Directors of EGCO’s of the meeting. Discussion, remarks and recommendations subsidiaries also sign the Code of Conduct Compliance of the Board and standing committees including resolutions Statement and the General Representation Letter addressed are recorded in the minutes of meetings for future reference to the Chairman of the Board of each company. or audit trail. • With regard to the auditor’s review of the financial statements, • Communication channel is provided for employees to the auditor has also reviewed internal control on accounting report suspected violations of EGCO’s Code of Conduct to and finance to define the audit approach, duration and scope the Management or to the Board of Directors (whistleblower). of work. In 2011, no significant finding, regarding the The message providers are well protected by the company. improvement on internal control systems, has been found. Monitoring To ensure that the established internal control system is sufficient and appropriate, the following activities are implemented.

• The responsible unit is assigned to follow up, monitor

The Audit Committee reviews the internal control system and risk management throughout the year and regularly reports the result to the Board of Directors. As a consequence, the Board agrees with the Audit Committee that the internal control system of EGCO and its subsidiaries is appropriate and that it sufficiently safeguards EGCO’s assets from misuse or unauthorized use. The Audit Committee and the Board have not received significant deficiency report on the internal control system from external auditors and Internal Audit Division.

and set appraisal criteria to benchmark EGCO’s and its subsidiaries’ performance against the plan. Gap analysis is carried out and scheduled reports are submitted to the Management and the Board. In addition, the 2011 Audit Committee’s Report is attached to this • External auditors are independent and regularly report to the Annual Report. Audit Committee.

• EGCO and its subsidiaries’ internal controls have been evaluated annually. The evaluation form has been designed following SEC’s and SET’s internal control guidelines as well as COSO’s internal control framework. The evaluation results

130 Annual Report 2011 Electricity Generating Public Co., Ltd.

Risk Factors To create long term value for shareholders, EGCO recognizes the importance of properly analyzing and managing its business risks. The Board of Directors entrusted the Audit Committee to review the Company’s risk management policies while the Management has the responsibility to implement such policies and report the progress to the Audit Committee and the Board. In this regard, the Risk Management Committee has been set up at the Management level which comprises EGCO’s top executives and the Managing Directors of EGCO subsidiaries. EGCO’s President serves as the chairman of the Committee. Rayong Power Plant and EGCO subsidiaries such as KEGCO, and ESCO also have their own risk management committees to help ensure that their particular risks will be managed adequately. EGCO Group has set up the risk management policy in a Risk Management Manual which serves as a guideline for the EGCO Group. About the flood situation in central Thailand and Bangkok areas, EGCO group’s electricity generation and operation have not been affected by the floods. The details are presented in this article. A summary of key risk factors and associated mitigation measures is as follows : 1. Investment Risk EGCO invests in electricity generating business. Its main sources of income are dividends from subsidiaries and joint ventures which sell and distribute power under long term Power Purchase Agreements (PPA). EGCO plans to continuously invest in new projects in accordance with EGCO’s strategy. Such project development may entail risks that will affect EGCO’s investment target. The investment risks are as follow : 1.1 Risks from Project Development

EGCO plans to expand its investment in order to maintain continuous growth, both in Thailand and foreign countries. Key projects are listed in the investment plan so that EGCO can appropriately allocate resources to those projects. Failure to add new assets to the portfolio either through Greenfield development or Acquisition will affect EGCO’s long-term outlook. Also, according to the decrease of revenue in electricity tariff structure, the earnings from new projects may not timely substitute forthe declining of revenue from existing power plants.

131

However, the environment of the project and the project itself are the risk factors of project development caused by uncertainty and business competition which can occur regularly.

To ensure the success of project development, EGCO Business Development Team has analyzed and identified the key risks involved. These include economic, political, and social policies of target countries, economic situation, financial costs, as well as machine, equipment, and construction costs. Moreover, compliance with laws and regulations to prevent environmental, social,and health impacts are concerned as well.

EGCO has prepared risk mitigation measures. For instance, fundamental analysis of target countries was conducted by gathering necessary information such as Power Development Plan (PDP), electricity and tax structure. Project information such as factors of electricity generating will be studied to appraise whether the projects are feasible with acceptable cost and competitive prices.

Besides the project feasibility, EGCO also set up the mechanisms and process to review and scrutinize new investment. Such mechanisms include the review by EGCO Management Committee which comprise EGCO’s top management, and the Investment Committee which is the Board’s committee to ensure that all material risks are identified and managed. The committees will also review the major conditions of the Shareholders’ Agreement such as dividend policy, rights to audit before submitting those agreements for the Board’s consideration.

2. Operational Risks 2.1 Risk of Failure to Get Target Return on Investment

EGCO has the responsibility to properly monitor and manage its investment in order to reach or exceed targeted return on investment. Without efficient mechanism to manage investment assets, EGCO may not get return on investment at target. Typical measures imposed to mitigate relevant risks are as follows :

•

Establish asset management policies and, where possible, assign management and staffs to be EGCO Group representatives’ directors or management of its subsidiaries and investment projects.

• Monitor operating performances of each facility and analyze the actual return on investment against the planned target.

•

Prepare regular progress reports to senior management and the Board of Directors so that a timely and appropriate action can be taken. The exceptional operating performance is to be reported as well.

• Coordinate with partners for joint-audit in investment companies to ensure the adequacy and effective of internal control system.

With these actions, EGCO will achieve target return on investment. According to the 2010 operating performance report, the incomes from EGCO’s portfolio have been received in line with modeled results.

2.2 Plant Performance Risks

A commitment to generate and deliver electricity pursuant to a PPA with EGAT entails the performance risks which may caused by staff, equipment and management approach. The significant performance risks are as summarized below :

(1) Plant Efficiency

There are various efficiency benchmarks under a PPA with EGAT i.e., Equivalent Availability Factor (EAF) and Heat Rates. Failure to meet these performance requirements would result in penalties and potential termination in certain extreme cases.

The cause of such risk may be power plant aging. With consistent, professional maintenance being a policy in place for each of EGCO Group’s power plants, this risk is considered to be low. Despite that, the management has established systematic procedures to ensure that all relevant performance targets are met. These procedures are as follows :

132 Annual Report 2011 Electricity Generating Public Co., Ltd.

- To include the key plant efficiency parameters in the Corporate Key Performance Indicators of power plants in the EGCO group in order to ensure that the production efficiency is closely monitored and all employees take part in the plant efficiency.

(3) Fuel Shortage for Electricity Generation

The risks of a fuel shortage for electricity generation can result in plant stoppages, revenue shortfall or penalty payments.The shortage of “coal and biomass” fuel type could be caused by increasing demand or price fluctuation. Furthermore, natural disaster such as floods may affect the quality and quantity of fuel.

- To ensure that the scheduled preventive maintenance of power plant equipment is carried out on a regular basis by qualified staff. - To ensure that spare part inventory is adequate and well managed. - To implement the Quality Management System (ISO : 9001:2008) to ensure that those power plants operate in accordance with the terms of their PPAs - To continuously develop the competencies of the firms’ human resources. With consistent operation along with these mitigation actions, the chance of this risk is low. (2) Raw Water Shortage for Electricity Generating The electricity generating process requires pretreatment and demineralization of raw water for cooling system and steam boiler system. The risk of a raw water shortage can result in plant stoppages, revenue shortfall, or penalty payments. The risk could be caused by climate change, overall increasing of water usage. Not enough amount of rainfall or the delay of rainy season in some years may affect to sufficient reserve of raw water.

From the past record, EGCO Group has never before experienced any fuel shortage. However, the measures are set to closely monitor and to prevent and mitigate such risk for continuous power generation as follows :

- To set up Early Warning Systems for critical information regarding the plant operation processes.

Although EGCO Group has never before experienced any water shortage, the measures are set to prevent and mitigate such risks by increasing the raw water storage capacity, seeking additional sources of raw water supply and setting measures to maximize the benefit of water usage. The risk of raw water shortage is quite low.

- EGCO Group’s gas fired power plants, which contributed 54% of 2010 total electricity sales revenues, have enjoyed long term Gas Supply Agreements with PTT, except for Rayong Power Plant and KEGCO which EGAT is the gas supplier under the terms of their PPAs. The quantity and quality of natural gas and other key parameters are all specified in the relevant agreements. With PTT and/or EGAT being the main suppliers, the risks of fuel gas shortage is considered low. - EGCO Group’s coal fire power plants “BLCP and Quezon”, which contributed 36% of 2010 total electricity sales revenues, have long term Coal Supply & Transportation Agreement. The suppliers must supply coal with the quantity and quality as specified in the agreement. Efficient coal reserve management is a significant measure which can reduce this type of risk as well. Moreover, coal procurement from potential alternative suppliers when necessary is another measure to ensure the adequacy supply under the terms of the PPA. - EGCO Group’s biomass power plants using rice husks and Para wood chips as fuel,which contributed 2% of 2010 total electricity sales revenues, may face the fuel risk in terms of in a dequate supply and volatile pricing. This is because those agricultural products may have alternative uses in the market. Since long term fuel supply agreements can not be established as there are few creditworthy suppliers of such feedstock, the primary risk prevention measures are to reserve more

133

(4) Safety Health Environment and Social

fuel and to seek alternative fuel sources in surrounding areas. This mitigation measures can help manage the fuel price at a certain level. However, the biomass fuel is still a seller’s market. As such, the impact of the inadequate of such fuel on EGCO’s revenues is low.

EGCO realizes that the electricity generating process which uses natural gas and coal as primary fuels will have certain impacts on the safety, environment and quality of life of employees and surrounding communities. The cause of risk can arise from the inefficiency of power plant or the inadequate measurement. Consequently, EGCO has taken the following actions to mitigate any potential negative impactsand reduce the likelihood of such risks as follows :

With existing mitigation actions and situation monitoring, this risk likelihood is quite low.

Management is well aware of the above risks and has set the following measures to mitigate and reduce the likelihood of those risks.

- To strongly encourage employees to prudently discharge their duties with the belief that carelessness may lead to significant damages. - To periodically maintain all equipment as scheduled to ensure that they can work efficiently. - To strengthen relationship with surrounding communities to foster the right perception about EGCO business. - To strengthen relationship with local government authorities.

- Develop and live by EGCO group’s Corporate Social - To set the security plan with regular drills and provide Responsibility policy equipment such as closed circuit TV. - Develop Safety, Health and Environment (SHE) Management Manual for all EGCO owned plant as - To secure the insurance policy that covers all risks, machinery breakdown, business interruption and third guidelines for implementation and audit. party liability to assure that assets and personnel will - Prepare the work manuals and emergency plan, be properly and adequately protected and the damages implement training plan and testing of plan, equipment will be recovered even in an unexpected case and warning system while ensuring strict compliance - In 2011, the management has considered to procure with the manual. the political violence insurance policy which covers the - Develop a list of governing laws and regulations and effects of political violation and terrorist attack. Effective designate responsible person to monitor the compliance from 2012, the insurance will cover EGCO’s power plants with related laws. and subsidiaries including EGCO tower and Egcom tara. However, the insurance policy on terrorist attack have - Monitor and ensure the compliance with SHE Management already been procured for most of EGCO’s joint venture Manual power plants. By complying with the above measures regularly, we can be ensured that this risk likelihood is quite low. 3. Financial Risks (5) Accident, Resistance, and Sabotage The investments of EGCO Group are capital-intensive. Since the EGCO business may face risk from accident that may primary funding sources are loans from domestic and international cause fire. Besides, the operation may subject to the bank loan markets, foreign exchange rate fluctuation and interest community resistance if the electricity generating process rate fluctuation, are important risks to be monitored and mitigated. has negative impacts on the community. Such risks may This risk may be caused by mismatch of revenue and loan structure be causedby the power plant aging condition, personnel including the change of foreign currency and interest rate. Incase operation, or sabotage event. that the change of foreign currency and interest rate are negative

134 Annual Report 2011 Electricity Generating Public Co., Ltd.

to EGCO structure, it will lead to decline in the Group’s operating • Define procedure to turn off the electricity system in order to performance. Therefore, the mitigation measures are established protect the loss of life and the failure of office systems and computer systems. as follows : 3.1 Foreign Exchange Rate Fluctuation

EGCO Group has a policy to mitigate currency mismatches for each of its investment projects to prudent levels. In general, this is achieved by matching currencies of project development and construction costs with funding source currencies and subsequently matching the currency of long-term funding profiles with those of each project’s revenue stream during the operation phase. 3.2 Interest Rate Fluctuation EGCO Group has a policy to manage risk of interest rate fluctuation by using financial hedging instruments (namely interest rate swaps) to fix floating interest rate exposure to prudent levels in order to provide the most predictable cash flows over its long-term power purchase contracts. If interest rate fixtures are not available for the full project terms required, EGCO will seek to enter into or cause its project company’s to enter into financial instruments that can best mitigate the interest rate risks subject to market availability and cost.

•

Seek a reliable service provider to arrange a back up site at a safety zone to ensure that EGCO can communicate with related parties and employees so that the management’s policy and the situation of flood around EGCO tower will be acknowledged.

• Coordinate with business partners to arrange temporary office during flood situation. For Power Plants : EGCO’s power plants are designed to be situated in highland and the drainage systems are well- designed. However, the Management set the protection measurement as follows; • Provide appropriate numbers of electric water pump. • Establish crisis management plan including procedures, job descriptions to mitigate natural disaster such as floods. • Procure the “All Risks” insurance policy which cover flood insurance.

With these measures, the impacts to EGCO group are not • Monitor weather forecast and communicate with government much. authorities to take actions as planned.

4. Other Risks 4.1 Business Interruption due to flood situation

EGCO group’s electricity generation and operation have not been affected by the floods occurred in 2011. However, flood situation and impact tend to occur more often in many areas of Thailand. Thus, the flood situation will be monitored further. EGCO’s risk mitigation measures are as follows ;

For EGCO Office :

• Prepare procedure for flood protection plan at EGCO tower. The job descriptions, responsible persons, and telephone numbers for contact are described.

135

Management Discussion and Analysis 1. Operating results for year 2011

1.1 Operating results

Profit from operating of EGCO Group before foreign exchange (FX) ended December 31, 2011 was 5,301 million baht, a decrease 963 million baht compared to the same period of last year. This was mainly due to :

In 2011, EGCO Group has increased the stakes in Nam Theun 2 Power Co., Ltd. (NTPC) from 25% to 35% on September 29, 2010, which resulted in a fully booked of revenue in this year and led to an increase in revenue of 213 million baht. EGCO Group also increased additional 26.125% shares of Quezon Power (Philippines) Limited Co. (Quezon) to 52.125% on March 25, 2011, which resulted in an increase in revenue of 355 million baht. In addition, Khanom Electricity Generating Co., Ltd. (KEGCO)’s maintenance expenses, interest expenses and income tax decreased 451 million baht and Rayong Power Plant’s expenses also decreased 140 million baht. With such an increase in revenue and a decrease in expenses, EGCO Group’s would have recorded higher net profit of 1,159 million baht.

On the other hand, Available Payment (AP), according to the Power Purchase Agreement (PPAs), of Rayong Power Plant, KEGCO, BLCP Power Co., Ltd. (BLCP) and Gulf Power Generation Co., Ltd (GPG) decreased 1,404 million baht from the same period of last year.

EGCO Group also had extraordinary items in 2011 such as Quezon’s prepayment fee from refinancing and withholding tax from special dividend payment and Conal Holdings Corporation (Conal)’s change in the functional currency from the Philippine peso to U.S. dollars, totaling of 748 million baht.These led to lower profit of 2,152 million baht.

From all above mainly causes, the profit before FX was 5,301 million baht, a decreased 963 million baht from the previous year. If exculding extraordinary items, EGCO Group’s profit before FX would have been 6,049 million baht, a decrease of 215 million baht from the same period of last year. Summary results of profit (loss) before FX ended December 31, 2011

EGCO and Subsidiaries Power Generation Others

2010

2011

2010

2011

Joint Ventrues

Total

Change

Power Generation 2010

2011

Increase/ 2010

2011

(Decrease)

Total Revenues

8,005

7,253

991

856

8,996

8,109

(887)

(10%)

Total Expenses

(7,451)

(7,138)

(647)

(619)

(8,098)

(7,757)

(341)

(4%)

5,473

5,083

5,473

5,083

(390)

(7%)

NCI* before FX

(76)

(93)

(31)

(41)

(107)

(134)

26%

Profit (Loss) before FX

478

313

196

5,473

5,083

6,264

5,301

(963)

(15%)

(158)

(32)

560

(166)

539

(311)

(850)

(158%)

489

(136)

281

209

6,033

4,917

6,803

4,990

(1,813)

(27%)

Share of Profit (Loss)

Unit : Million Baht

FX Net profit (loss) * NCI : Non-Controlling Interests

136 Annual Report 2011 Electricity Generating Public Co., Ltd.

1.2 Capacity

As of December 31, 2011 EGCO Group’s portfolio comprises 15 operating plants with total contracted capacity with Electricity Generating Authority of Thailand (EGAT) under long-term PPAs of 3,862 MW. This resulted in EGCO Group’s market share in Thailand of 12% from a total installed capacity of 31,447 MW.

Significant events in 2011 can be summarized as follows :

1.2.1 The purchase of operating assets

• On March 25, 2011, EGCO completed the acquisition of an additional 26.125% interest in Quezon, bringing EGCO’s total ownership interest in Quezon to 52.125%. In addition, EGCO completed the acquisition of 100% of the outstanding shares of Covanta Philippines Operating Inc. (CPOI), a new registered name of Pearl Energy Philippines Operating Inc. (PEPOI). PEPOI is an entity which provides operation and maintenance services to Quezon through a long-term Operation and Maintenance Agreement.

1.2.2 Development of new projects

The development of new projects in 2011 can be summarized as follows :

EGCO’s business strategy places emphasis on expanding its investment in power generation in Thailand and the ASEAN countries, as well as an investment in related energy projects or renewable energy, including hydropower, solar and wind energy etc. The target is to provide optimum returns to shareholders by improving the profitability of our existing assets and acquiring new projects with reasonable risk and return profiles, to maintain market share as a leading energy company and to strengthen its financial position and operating results for EGCO Group.

• On January 4 and February 11, 2011, EGCO has been awarded the licenses for 2010 Firm Small Power Producer Cogeneration projects from EGAT in accordance with the resolution of the Energy Regulatory Commission. The projects are TJ Cogen, TP Cogen and SK Cogen, which have contracted capacity with EGAT of 90 MW each for 25 years and signed PPAs with EGAT on November 25, 2011.

• On March 1, 2011, EGCO acquired a 12.50% interest in Xayaburi Power Company Limited (XPCL) from CH. Karnchang Public Company Limited. XPCL is a company dedicated to the development of Xayaburi hydropower project which is a run-of-river dam on the Mekong River in Laos PDR. XPCL has entered into the PPA with EGAT to sell 1,220 MW, the commercial operation date is currently scheduled for January 2019.

• On December 22, 2011, Natural Energy Development Company Limited (NED) has started its commercial operation of phase 1 of 8 MW and expected to complete the whole project within first half of 2012. The company is the largest solar power plant using thin-film solar cells in the world with total installed capacity of 73 MW (DC)/55 MW (AC). EGCO has 33.33% ownership in NED.

Significant investments in the post statement of financial position can be summarized as follows :

• On January 18, 2012, EGCO acquired 90% stakes in Theppana Wind Farm Company Limited (Theppana). Theppana is the wind power plant, located in Chaiyaphum province.

• On January 23, 2012, EGCO acquired 99.99% stakes in SPP4 Co., Ltd (SPP4) from MEMC Singapore Pte Ltd. SPP4 is the solar power plant with installed capacity of 6 MW, located in the boundary between Srisaket and Ubon Ratchatani province.In addition, the plant is the first private solar power project equipped with the tracking system.The commercial operation date, electricity generation and distribution system for the Provincial Electricity Authority (PEA) was on January 24, 2012.

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The investment in both projects is in line with EGCO’s goal to expand its business towards the renewable energy and also meets with the government policy regarding renewable projects for 10 years.

2. Future Plans

EGCO has planned to increase its market shares in power business by development or acquisition of domestic or regional projects taking into account the feasibility of the projects, EGCO’s experiences and expertise to increase the value to the projects, costs of capital with acceptable risks. The projects under study and development are as follows : 2.1 Prefeasibility study of Independent Power Producer investment using the existing location of Rayong and Khanom power plants.

2.2 Development of 3 Small Power Producer projects in Phatumthani and Ratchaburi province and NED’s solar project as mention in 1.2.2.

2.3 Study on the opportunity to invest in renewable energy projects. Current projects under study are solar farms and wind farms.

2.4 Study on the opportunity to invest in overseas Independent Power Producer projects. EGCO has high potential to be a partner in both existing and new investment projects given its strong technical knowledge and financial strengths.

EGCO has also developed the knowledge on energy market, investment opportunities and governance structure of other countries in the region to identify new investment projects, which eventually would increase the value of the shareholders.

3. Report and Analysis of the Operating Results

EGCO has invested in the Independent Power Producer (IPP), Small Power Producer (SPP), Very Small Power Producer (VSPP), Operating and Maintenance (O&M) and Rayong power plant as an operating company as follows :

(1) Subsidiaries which can be categorized into 2 businesses : Khanom Electricity Generating Co., Ltd. (KEGCO) EGCO Cogeneration Co., Ltd. (EGCO Cogen) Roi-Et Green Co., Ltd. (Roi-Et Green) SPP4 Co., Ltd. (SPP4) Theppana Wind Farm Co., Ltd. (Theppana)

Power Generation

IPP SPP SPP VSPP VSPP

Others

EGCO Engineering and Service Co., Ltd. (ESCO), which invested in Egcom Tara Co., Ltd. (Egcom Tara) Pearl Energy Philippines Operating Inc. (PEPOI) North Pole Investment Co., Ltd. (North Pole)

O&M Water O&M Holding Co.

138 Annual Report 2011 Electricity Generating Public Co., Ltd.

(2) Joint Ventures in Power Generation business Holding Co. SPP SPP SPP SPP IPP IPP SPP IPP Holding Co. IPP

IPP O&M IPP

Gulf Electric Public Company Limited (GEC), which invested in Gulf Cogeneration Co., Ltd. (GCC) Nong Khae Cogeneration Co., Ltd. (NKCC) Samutprakarn Cogeneration Co., Ltd. (SCC) Gulf Yala Green Co., Ltd. (GYG) Gulf Power Generation Co., Ltd (GPG) BLCP Power Co., Ltd. (BLCP) Natural Energy Development Co., Ltd. (NED) Nam Theun 2 Power Co., Ltd. (NTPC) Conal Holdings Corporation (Conal), which invested in Western Mindanao Power Corporation (WMPC) Southern Philippines Power Corporation (SPPC) Alto Power Management Coporation (APMC) Quezon Power (Philippines) Limited Co. (Quezon)

(3) Other investments

EGCO holds 18.72% of the outstanding shares in East Water Resources Development and Management Public Company Limited (East Water) as long-term financial investment in marketable securities.

EGCO holds 12.50% of the outstanding shares in Xayaburi Power Company Limited (XPCL).

3.1 The Analysis of EGCO and Subsidiaries

3.1.1 The Analysis of EGCO and Subsidiaries in Power Generation business

Profit (loss) before FX for 2011 ended December 31, 2011 of EGCO and Subsidiaries in Power Generation business decreased 456 million baht compared to the same period of last year. This was mainly due to the Rayong Power Plant and KEGCO as follows : Unit : Million Baht

Rayong Power Plant :

Total revenues Total expenses Profit (Loss) before FX

2010

2,589 (2,112) 477

2011

2,312 (2,069) 243

Increase/(Decrease)

(277) (43) (234)

(11%) (2%) (49%)

• Rayong power plant’s profit (loss) before FX decreased 234 million baht. This was mainly due to the decline in AP, according to the PPA, amounting to 253 million baht and the increase in plant maintenance as planned amounting to 146 million baht. However, other costs were lower by 266 million baht, mainly due to income tax and provision of obsolete inventories.

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Unit : Million Baht

KEGCO :

Total revenues Total expenses Profit (Loss) before FX

2010

2,798 (2,358) 440

2011

2,181 (1,907) 274

Increase/(Decrease)

(617) (451) (166)

(22%) (19%) (38%)

• KEGCO’s profit (loss) before FX decreased 166 million baht. This was mainly due to the decline in AP, according to the PPA, of 675 million baht. However, the decrease in plant maintenance as planned and other costs from interest expenses and income tax were 250 million baht and 200 million baht, respectively. 3.1.2 The Analysis of Subsidiaries in Other business Profit (loss) before FX for 2011 ended December 31, 2011 of Subsidiaries in Other business was down by 117 million baht. This was mainly due to ESCO as follows : Unit : Million Baht

ESCO :

Total revenues Total expenses Profit (Loss) before FX

2010

730 (511) 219

2011

384 (348) 36

Increase/(Decrease)

(346) (163) (183)

(47%) (32%) (83%)

• ESCO’s profit (loss) before FX sharply dropped 183 million baht, mainly from lower maintenance service income and lower spare part sales to overseas power plants.

3.2 The Analysis of Joint Ventures in Power Generation business

Profit (loss) before FX from Joint Ventures in Power Generation business for the results of 2011 decreased by 390 million baht. This was mainly due to a decrease in profit from Conal, Quezon, BLCP and GPG whereas an increase in profit from NTPC. The details are as follows : Unit : Million Baht

Conal :

Total revenues Total expenses Profit (Loss) before FX

2010

654 (518) 136

2011

898 (895) 3

Increase/(Decrease)

244 377 (133)

37% 73% (98%)

• Conal’s profit (loss) before FX decreased 133 million baht, mainly due to the change in the functional currency from the Philippine peso to U.S. dollars amounting to 96 million baht.

140 Annual Report 2011 Electricity Generating Public Co., Ltd.

Unit : Million Baht

Quezon :

Total revenues Total expenses Profit (Loss) before FX

2010

2,775 (2,254) 521

2011

5,106 (4,882) 224

Increase/(Decrease)

2,331 2,628 (297)

84% 117% (57%)

• Quezon’s profit (loss) before FX decreased 297 million baht. This was due mainly to an increase in prepayment fee from refinancing of 440 million baht and withholding tax from special dividend payment of 212 million baht. However, EGCO recorded higher revenue of 355 million baht from additional shares of 26.125% on March 25, 2011. Unit : Million Baht

BLCP :

Total revenues Total expenses Profit (Loss) before FX

2010

8,990 (6,669) 2,321

2011

9,037 (6,997) 2,040

Increase/(Decrease)

47 328 (281)

1% 5% (12%)

• BLCP’s profit (loss) before FX decreased 281 million baht, mainly due to the decline in AP of 397 million baht, according to the PPA. In addition, BLCP’s coal supplier could not provide sufficient coal stated in Coal Supply and Transportation Agreement (CSTA) due to flooding situation in Australia. BLCP, thus, had to buy spot coal in the market in order to maintain the minimum level of coal regarding PPA. This led to an increase in fuel cost of 152 million baht. Unit : Million Baht

GPG :

Total revenues Total expenses Profit (Loss) before FX

2010

11,447 (9,671) 1,776

2011

11,381 (9,722) 1,659

Increase/(Decrease)

(66) 51 (117)

(1%) 1% (7%)

• GPG’s profit (loss) before FX decreased 117 million baht. This was mainly due to the decline in AP, according to the PPA, of 79 million baht and the increase in plant maintenance as planned of 140 million baht. However, other costs were down by 84 million baht. Unit : Million Baht

NTPC :

Total revenues Total expenses Profit (Loss) before FX

2010

1,728 (1,175) 553

2011

2,703 (1,937) 766

Increase/(Decrease)

975 762 213

56% 65% 39%

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• NTPC’s profit (loss) before FX increased 213 million baht, as a result of full-year recogonition and the acquisition of an additional 10% to 35% stakes in the company, which was completed on September 29, 2010. While in 2010 the company recognized net porfit of 25% stakes for 5 months, and 35% stakes for 3 months (NTPC’s COD was on April 30, 2010).

3.3 Financial Ratios

Profitability Ratios

Gross Profit Ratio Operating Profit Ratio before FX Profit Ratio before FX Profit before FX per share (Baht) Return on Equity before FX

2010

2011

34.04% 22.77% 45.41% 12.96 13.15%

27.05% 14.60% 39.42% 9.75 9.34%

4. Report and Analysis of Cash Flow Position

As at December 31, 2011, the ending balance of cash and cash equivalents was 8,402 million baht, which was 654 million baht lower than the amount as at December 31, 2010. The details of the sources and uses of funds are as follows :

• Net cash received from operating activities was 3,201 million baht, mainly from operating activities of 2,777 million baht and working capital of 424 million baht.

• Net cash payment for investing activities was 1,557 million baht mainly due to investment in joint ventures, Quezon, PEPOI and NED totaled 6,570 million baht and short-term investment was 1,489 million baht. Meanwhile, dividend received from joint ventures and others totaled 6,518 million baht.

• Net cash payment for financing activities was 990 million baht. This was mainly due to the dividend payment to shareholders totaling 2,845 million baht, the loan repayments for EGCO Cogen, Roi-Et Green and KEGCO’s debenture totaled 724 million baht, and the interest payments of 461 million baht. Meanwhile, EGCO’s debt drawdown was 3,043 million baht.

Financial ratios

Debt to equity ratio (Time) Book value per share (Baht) Current ratio (Time) Quick ratio (Time)

2010

2011

0.21 104.13 10.26 5.59

0.25 110.13 11.72 6.69

Although, the ending balance of cash and cash equivalents was 8,402 million baht, EGCO has investment plans in 2012, which will utilize funds from cash on hand and loans from financial institutions. The debt to equity ratio may be higher than the present at 0.25 times.

142 Annual Report 2011 Electricity Generating Public Co., Ltd.

Related Transactions In conducting the normal business courses, there are related transactions between EGCO or its subsidiaries and persons who may have potential conflict of interest. EGCO endeavors to ensure that these transactions are justified and in compliance with the Stock Exchange of Thailand (SET) and the Capital Market Supervisory Board’s rules and regulations. Apart from designating the authorized persons to approve the transaction in accordance with the Table of Authority, the Audit Committee is entrusted to review the related transactions that need to be approved by the Board of Directors. The details of the related transactions are disclosed under item 31 of the Notes to 2011 Financial Statements for the period ended December 31, 2011. Procedure to Approve the Related Transactions EGCO lives by the following policies and guidelines in treating and approving the related transactions.

• In case of entering into any contracts or any related transactions between EGCO, subsidiaries, joint venture companies, associated

companies and/or outside parties, EGCO will consider the necessity and justification of such transactions for the best interest of the Company. Transaction prices are charged at fair market price like the transactions with other outside parties (Arm’s Length Basis). If there is no such price, EGCO will apply the price of similar market transactions. EGCO may also compare the price with the one recommended by independent appraiser to ensure that such price is reasonable to maximize the Company’s benefits.

• Related transactions that are considered connected transactions in accordance with the SET’s regulation will be treated in

accordance with the requirements of the SET’s and Securities & Exchange Commission (SEC) and must be reviewed by the Audit Committee in case such transaction must be approved by the Board of Directors.

• Financial assistance or guarantee provided to Group companies or connected persons will be conducted prudently to ensure the utmost benefits of the Group companies. Fee will be charged using the market rate as at the transaction date.

• The summary of transactions with commercial term that an ordinary person will agree to deal with the counterparty under similar

circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the director, executive or related person, as the case may be, shall be reported to the Audit Committee annually. This is aimed to ensure that such transaction is well grounded and provide optimal benefit to the Company and in line with the approved process. It should be noted that the Management had already reported the transactions in 2011 to the Audit Committee and the Board.

• In a case that a shareholders’ approval is needed, the major shareholder who is the connected person can attend the meeting in order to constitute a quorum but will not have a voting right. Since the voting will be based on the number of shareholders who are eligible for voting, this criterion does not have the negative impact on the quorum or the voting.

• Directors and management with potential conflict of interest will not be allowed to vote or attend the meeting Related Transactions in 2011 EGCO’s related transactions in 2011 were normal business transactions with no objective to siphon profits between EGCO or its subsidiaries and parties with potential conflict of interest. Each transaction was duly approved under the transparent process and the persons with potential conflict of interests were not involved in the decision making. Such transactions were well justified that they were carried out for the best interest of the Company like the transactions with the third parties. The system to follow up and review the transactions was also in place to ensure that they are carried out in line with the established process.

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Details of related transactions in 2011 are as summarized below. 1. Related Transactions with EGAT

In carrying out the EGCO Group’s business, there were related transactions relating to the power sale and maintenance services between the Group companies and EGAT, a major shareholder which owns 25.41 stakes in EGCO and has 4 representative directors on EGCO Board. However, all the transactions followed the established process and in line with the disclosure and other requirements of the SET and SEC.

1.1 Power Sold to EGAT

EGCO (Rayong Power Plant) and three subsidiaries being KEGCO, EGCO Cogen and Roi Et Green entered into the Power Purchase Agreement (PPA) with EGAT. The PPA terms for EGCO (Rayong Power Plant) and KEGCO are twenty years while the terms for EGCO Cogen and Roi Et Green are twenty one years each. Such transactions are justified as power generation is EGCO Group’s core business and EGAT is the single wholesale buyer. In addition, the pricing and conditions of those transactions are in accordance with the standard contracts which have been endorsed by relevant government agencies.

Companies

Relationship

EGCO (Rayong Power Plant) KEGCO EGCO Cogen Roi Et Green

Subsidiaries

Transaction value for the period ended December 31, 2011 (million baht)

Sale Revenue

2,258 2,171 1,263 325

Trade Receivables

202 94 189 61

The value of the related transactions between joint venture companies with EGAT are as shown in the following table. Since EGCO has recorded the share of profit from joint venture companies using equity method, the value of such transactions is not shown on the consolidated financial statements.

Companies

Relationship

GEC BLCP NTPC

Joint Venture

Transaction value for the period ended December 31, 2011 (million baht)

Sale Revenue

14,499 8,895 2,685

Trade Receivables

2,878 540 448

1.2 Maintenance Service to EGAT

ESCO, EGCO’s subsidiary which is an O&M service provider, has entered into a Maintenance Agreements with EGAT to provide major maintenance work including other administrative and relating services to the power plants.

Such transaction is justified as the price is charged on a “cost plus basis” with the annual CPI escalation which is the same standard as the price charged to the third parties. The agreement is effective for a period of eight years commencing September 24, 2007.

144 Annual Report 2011 Electricity Generating Public Co., Ltd.

Companies

Relationship

ESCO

Transaction value for the period ended December 31, 2011 (million baht)

Maintenance Fee

Subsidiary

Trade Receivables

1.3 Maintenance Service by EGAT

EGCO Group has entered into the operation and maintenance agreements with EGAT which are defined as the transactions to support normal business of which the general trading terms and conditions are applied and the agreed price can be calculated from the assets or the referenced price in accordance with SET’s guidelines.

• EGCO (Rayong Power Plant) and KEGCO has entered into the Major Maintenance Agreement (MMA) with EGAT for the latter to provide major maintenance services, repair services, administrative services, and additional services to their power plants. The service fees are charged on a “cost plus basis” with the annual CPI escalation. The contracts have been extended for another 8 years for EGCO (Rayong Power Plant) with the execution date on December 7, 2006 and 4 years for KEGCO with the execution date on August 1, 2008.

• ESCO enters into the long term agreement with EGAT with the term starting from January 2005 - December 2017. However, EGAT started providing the service under the agreement on May 23, 2007. The service fees are charged on a “cost plus basis” with the annual escalation of 3%.

Companies

EGCO (Rayong Power Plant) KEGCO ESCO

Relationship

Transaction value for the period ended December 31, 2011 (million baht)

O&M Fee

Subsidiaries

131 82 2

Trade Payables

56 9 -

• GEC has engaged EGAT as advisor for maintenance work. The fee is charged in accordance with the agreed price.

Companies

GEC

Relationship

Transaction value for the period ended December 31, 2011 (million baht)

Joint Venture

Maintenance Advisory Fee

0.58

Account Payables

2. Related Transaction between EGCO and Subsidiaries

EGCO has entered into three agreements with subsidiaries and joint venture companies, which EGCO is a major shareholder and EGCO executives sit on their boards.

1. Agreements to provide office space and building services for 5 companies being KEGCO, ESCO, EGCO Cogen, Roi Et Green and EGCOM Tara. The space and service scope is specified in the contract with a one-year term.

Such transaction is considered justified as it helps maximize the building space usage and the fee is charged at the market rate which is the same rate charged to the third party.

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2. Agreements to provide management services to the above companies and PEPOI of which the scope covers internal audit, legal counseling, Boardâ&#x20AC;&#x2122;s secretarial work, technology, public and community relations and financial work (exclude ESCO and Egcom Tara) and agreements to dispatch employees to NTPC BLCP and NED.

Such transactions are well grounded because those Group companies do not have internal staff to take care of such work while EGCO has the capability to provide the services. The management service fee is charged in accordance with the actual operating hours based on the cost plus basis.

Companies

Relationship

KEGCO ESCO EGCO Cogen EGCO Green Subsidiaries Roi Et Green Egcom Tara EGCO BVI PEPOI Total for subsidiaries NTPC BLCP Joint Ventures NED Total for joint ventures

Transaction value for the period ended December 31, 2011 (million baht)

Financial Statements

16 9 8 1 7 2 1 16 60 20 24 6 50

3. Financial Support

EGCO provides financial support to subsidiaries and joint ventures in accordance with its ownership in such respective companies. Such supports are normal business practices and are aimed at optimizing shareholdersâ&#x20AC;&#x2122; return. They are duly approved by the Board in accordance with the Table of Authority and disclosed in the notes to financial statements as at December 31, 2011.

3.1 Inter-company Loan

ESCO

3.2 Liabilities

EGCO provided the loan guarantee under the Sponsor Support Agreement to subsidiary, joint venture and associated companies. Significant information is as follows.

On November 22, 2005, EGCO entered into an agreement to provide loan to ESCO in the amount of 780 million baht. Principal payment of 46 million baht each is scheduled annually commencing December 2009 to December 2025. The interest rate is set in accordance with the market rate for long term loan at MLR minus a certain margin and payable on a semi-annual basis. The outstanding loan amount as at December 31, 2011 was 642 million baht

146 Annual Report 2011 Electricity Generating Public Co., Ltd.

3.2.1 Contingent Liabilities

EGCO Cogen

As of December 31, 2011, EGCO Cogen’s sponsors had a commitment to provide the loan to EGCO Cogen if it has any financial liquidity problem and cannot service debt and expenditures in accordance with the conditions in the contract in the amount not exceeding 200 million baht. Since EGCO holds an 80% stake in EGCO Cogen, its guarantee portion is not exceeding 160 million baht.

This agreement is justified as it is the condition in the loan agreement and the financial support is provided on a pro-rata basis in accordance with the ownership in the company.

Roi-Et Green

EGCO had a commitment to provide the loan guarantee in the amount not exceeding the total outstanding loan and interest payment. As at December 31, 2011, the total commitment amounted to 470 million yen equivalent to 194 million baht.

This agreement is justified as it is the condition in the loan agreement and the project development condition.

3.2.2 Letter of Guarantee

EGCO has the commitment to the banks under Standby Letter of Credit (SBLC) and the Counter Guarantee and issued on behalf of EGCO for the subsidiaries and joint ventures. Details of the transaction are as shown below.

NTPC

The Nam Theun II project’s finance is structured in a way that will allow sponsors who invest in Lao PDR to inject equity on a back-end basis while lenders will allow loan drawn down during the first phase. As such, lenders request the banks on behalf of the sponsors to issue the SBLC to guarantee future capital injection. The face value of the SBLC will reduce in accordance with each capital injection.

As at December 31, 2011, EGCO requested Mizuho Corporate Bank to issue the SBLC for the purpose of providing a guarantee debt obligation in reserve accounts for The Nam Theun II project’s amounting to US 5 million dollars (equivalent to 151 million baht) and amounting to 607 million baht.

Theppana

EGCO requested KASIKORNBANK to issue the SBLC for the purpose of providing a guarantee for the PPA between Theppana and Provincial Electricity Authority. As at December 31, 2011, the guarantee value was 4 million baht. Guidelines for Treating Future Related Transactions Most of the existing related transactions will continue in the future. EGCO will seek to ensure that all of the related transactions are transparent, fair and beneficial to the Company. The Board will entrust the Audit Committee, the auditor or independent consultants to review and recommend the appropriate pricing and the justification of those transactions. In addition, material information about such transactions which includes types, value and the reasons for entering into those transactions will be disclosed to the shareholders in accordance with the regulations of the SET and SEC. EGCO will also provide the updated information, rules and regulation with regard to the related transaction to relevant parties to foster understanding which will lead to full compliance, transparency and the benefit of the shareholders.

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Statement of Directors’ Responsibilities According to the Public Limited Companies Act B.E. 2535, the Accounting Act B.E. 2543, the Securities and Exchange Act B.E. 2535, and the Notification of Capital Market Supervisory Board re: “Disclosure of Financial Statements and Performance of Listed Companies”, the Board of Directors is responsible to prepare the true and fair financial statements of the Company. The Board of Directors has also issued the Company’s regulation on accounting, finance and budgeting B.E. 2550 to which the Management must adhere. In addition, the Audit Committee has been entrusted to ensure that the Company’s financial statements have been prepared in a justified and prudent manner in compliance with such rules and regulations and that the appropriate accounting policies were consistently applied. Also, the Audit Committee has reviewed the Company’s internal control systems to ensure its adequacy and effectiveness as a means to safeguard the company’s assets from unauthorized persons and to reveal the weakness to prevent unlawful conduct and abnormalities. Management has prepared both consolidated and Company financial statements for the year ended 31 December 2011 in compliance with the Thai Generally Accepted Accounting Principles under the Accounting Profession Act B.E. 2547. The appropriate accounting policies were consistently applied and the financial statements were prepared in a prudent and justified manner with adequate disclosure of significant information in the notes of the financial statements. The Board of Directors is of the opinion that both the consolidated and company financial statements for the year 2011, present the company’s financial position, operating results, changes in shareholders’ equity and cash flows fairly, in all material respects, and reliable manner and that such statements are in compliance with the Generally Accepted Accounting Principles and all governing rules and regulations.

Mr. Pornchai Rujiprapa Chairman

148 Annual Report 2011 Electricity Generating Public Co., Ltd.

Audit Committee’s Report The Audit Committee of EGCO consists of 3 independent directors whose qualifications, experience, and expertise are in accounting, finance, economics, law, organization management and energy business. The Chairman of the Audit Committee is Mr. Chaipat Sahasakul, and the other 2 members are Mr. Somphot Kanchanaporn and Mr. Thanapich Mulapruk. The Audit Committee has performed its duties in conformity with the mission entrusted by the Board of Directors as prescribed in the Audit Committee Charter which is in compliance with those specified by The Stock Exchange of Thailand (SET) : the Audit Committee’s Qualification and Scope of Duties and Responsibilities B.E. 2551. The Audit Committee regularly reports the Committee’s Minutes of Meetings to the Board of Directors. The Audit Committee held 17 meetings in 2011 with all committee members attending each meeting. The Committee Meeting Attendance Report is shown in Table 2 : Board and Committee Meeting Attendance Report in Corporate Governance section. The Audit Committee’s performance can be summarized as follows. 1. Review of financial statements • To review the quarterly and the annual financial statements with the external auditors and the Management to ensure compliance with the generally accepted accounting principles. The disclosures were complete, accurate, reliable, and in compliance with related laws and regulations. The Committee also considered the adoption of the new accounting standards, the new financial reporting standards, the new interpretation and amendments to accounting standards, and the adjusted accounting standards and accounting frameworks relating to EGCO. • To review the Management Discussion and Analysis (MD&A) with the Management to ensure its accuracy, adequacy and usefulness to shareholders and investors for making their investment decisions.

• To hold exclusive meeting with the external auditors to ensure their independence.

• To consider other services performed by the audit firm’s group companies for EGCO and its subsidiaries. It was determined that the scopes of work and fees for other services were not significant and did not influence the independence of the auditor.

2. Review of the internal control systems

The Audit Committee reviewed the sufficiency and effectiveness of the internal control systems by considering the internal auditor’s and the external auditor’s reports. The external auditor agreed that there was no significant shortcoming in the year 2011. In addition, the Committee considered the results of the internal control evaluation of EGCO and its subsidiaries together with the internal control questionnaires which were prepared in compliance with the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) guidelines, The Stock Exchange of Thailand (SET), and the Securities and Exchange Commission (SEC). The evaluation result for the year 2011 showed that EGCO and its subsidiaries had sufficient and appropriate internal control system.

149

3. Oversight of internal audit

• To approve scope of work and annual audit plan which included Management Audit.

• To review internal audit report by demanding that the Internal Audit Division directly reports to the Audit Committee.

• To review budget and manpower of the Internal Audit Division, the professional development of internal auditors, and Chief Internal Auditor’s KPI. The Committee also reviewed the performance of Chief Internal Auditor’s to ensure the Internal Audit Division’s independence.

4. Review of compliance with laws relating to EGCO’s business

The Audit Committee reviewed with the Management to ensure that EGCO’s activities are in compliance with the securities and exchange laws, requirements of SET and SEC, as well as other laws relating to EGCO’s business. In addition, the Committee acknowledged that employees at senior vice president level and upward reviewed their compliance with related laws before signing and submitting Annual Representation Letter to their immediate supervisors. 5. Review of connected transactions

The Audit Committee considered the accuracy and adequacy of EGCO’s disclosure on related-party transactions or any transactions that might cause conflict of interest to ensure that EGCO had complied with business conditions and requirements of SEC.

6. Review of risk management

The Audit Committee reviewed with the Management the risk management policy, and the compliance with such policy and EGCO’s risk management guidelines. In addition, fraud risk prevention and monitoring practice for EGCO Group was prepared to ensure that EGCO and its subsidiaries had an appropriate risk management system that followed the COSO Enterprise Risk Management. The current and future major risks had been considered for mitigation and management. Additional measures were set for risk management improvement as well.

7. Review of good corporate governance

• To enhance other good corporate governance practices such as providing the channel for employees and shareholders to direct their complaints, suspected violation of laws and Code of Conduct and questions about the financial statements and internal control systems by email to auditcommittee@egco.com. Whistleblower system was also set up.

•

To review and acknowledge the Code of Conduct Compliance Statement and General Representation Letter submitted by the President to the Chairman. The process of preparing those statements as well as their contents provided the assurances to the Committee that EGCO’s operations were in compliance with the Code of Conduct and the internal control systems and that the financial information and disclosures were accurate, complete and reliable.

8. Audit Committee’s self assessment

The Audit Committee assessed the Audit Committee’s performance for the year 2011 by completing the Audit Committee’s Self-Assessment Form which complied with SET’s regulations and international good practice. The result of this self-assessment was reported to the Board of Directors. The 2011 assessment result was that the composition, qualifications, duties, and responsibilities of the Audit Committee were still in accordance with the Audit Committee Charter, the Stock Exchange of Thailand’s guidelines, and the international good practices.

150 Annual Report 2011 Electricity Generating Public Co., Ltd.

9. Review of the Audit Committee Charter

The Audit Committee reviewed the Audit Committee Charter to ensure that the duties entrusted to them in 2011 were achieved and complied with international practices and those specified by the SET’s Audit Committee Best Practice Guidelines, while also being appropriate for EGCO’s business.

10. Appointment of the external auditor

The Committee reviewed the auditors’ performance in 2011 and recommended to the Board of Directors that Pricewaterhouse Coopers ABAS Ltd., Mr.Somchai Jinnovart Certified Public Accountant (Thailand) No. 3271, Mr. Vichien Khingmontri Certified Public Accountant (Thailand) No. 3977, Mr. Chaisiri Ruangritchai Certified Public Accountant (Thailand) No. 4526, and Ms. Amornrat Pearmpoonvatanasuk Certified Public Accountant (Thailand) No. 4599, be appointed by the shareholders as the Company’s auditors for 2012 due to their independence, professional practices, appropriate experience, SEC approval and discharging their duties effectively.

Based on the above practices, the Committee was of the opinion that EGCO’s 2011 financial statement was accurate, complete, and reliable. The internal control system was adequate and appropriate. Operations were in compliance with the Securities and Exchange Act, regulations of The Stock Exchange of Thailand and laws relating to the business of EGCO. In addition, information disclosure in case of related-party transaction or conflict of interest was correct and complete.

Mr. Chaipat Sahasakul Chairman of the Audit Committee

151

Nomination and Remuneration Committee’s Report Based on EGCO’s Governance Principles, the Nomination and Remuneration Committee (NRC) shall consist of 5 directors, three of which shall be non-executive, independent directors. The term of office of each NRC member is 3 years. In 2011, the NRC duly performed its duties under the Nomination and Remuneration Committee’s Charter and held ten meetings in such regard. The major issues being discussed included director nominees, selection of EGCO senior executives under the new organization structure, performance appraisal of the Company and its subsidiaries including the performance appraisal of directors and management, the remuneration of directors and management and the succession plan for key positions. In scrutinizing the list of nominees for directors and executives, the NRC had taken into account the required skill sets and experience, integrity and ethics, good attitude towards the Company, and professionalism along with the time commitment. With regard to the remuneration structure of the directors and senior executives of the Company, the NRC had established a clear and transparent process to ensure that the remuneration structure of both directors and executives were comparable to those of peer companies, effective in retaining qualified personnel, fair and tied to the long term benefits of the Company and the shareholders. The guideline for selection of directors and executives along with their remuneration are disclosed in this annual report.

Mr. Hideaki Tomiku Chairman of the Nomination and Remuneration Committee

152 Annual Report 2011 Electricity Generating Public Co., Ltd.

Auditorâ&#x20AC;&#x2122;s Report To the Shareholders of Electricity Generating Public Company Limited I have audited the accompanying consolidated and company statements of financial position as at 31 December 2011 and 2010 and the related consolidated and company statements of income, comprehensive income, changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the years then ended of Electricity Generating Public Company Limited and its subsidiaries and of Electricity Generating Public Company Limited respectively. The Companyâ&#x20AC;&#x2122;s management is responsible for the correctness and completeness of information in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform an 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. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position as at 31 December 2011 and 2010 and the consolidated and company results of operations and cash flows for the years then ended of Electricity Generating Public Company Limited and its subsidiaries and of Electricity Generating Public Company Limited respectively in accordance with generally accepted accounting principles.

Nangnoi Charoenthaveesub Certified Public Accountant (Thailand) No. 3044 PricewaterhouseCoopers ABAS Ltd.

Bangkok 17 February 2012

153

Electricity Generating Public Company Limited

Statements of Financial Position As at 31 December 2011 and 2010

Notes

Consolidated 2011 Baht

2010 Restated Baht

Assets Current assets Cash and cash equivalents Short-term investments - Deposits at financial institutions - Marketable securities Short-term investments used as collateral Trade receivables Trade receivable from a related party Dividend receivables from subsidiaries and joint ventures Current portion of long-term loans to related parties Amounts due from related parties Fuel and spare parts and supplies, net Other current assets Total current assets Non-current assets Long-term investments in marketable securities Amounts due from a related party due over one year Long-term loans to related parties, net Deposits at financial institutions used as collateral Investments in subsidiaries, net Interests in joint ventures Other long-term investments Investment property Property, plant and equipment, net Right in long-term power and tap water purchase agreements and operation and maintenance agreement, net Other non-current assets Total non-current assets Total assets

Company

2011 Baht

2010 Restated Baht

7 8 9 10 31(d)

8,401,866,377 1,717,680,697 222,000,000 343,952,162 245,141,606 549,230,689

7,748,266,006 108,217,105 505,981,000 964,776,625 245,779,344 544,949,244

5,674,226,709 1,576,075,477 222,000,000 - - 202,016,743

6,641,233,520 943,871 515,715,500 - - 219,944,810

13.4

6,089,418,454

5,756,143,305

7,018,039,732

7,109,556,304

31(f) 31(e) 11

- 51,081,780 2,043,819,652 455,163,627 20,119,355,044

- 59,997,506 2,126,889,696 516,010,592 18,577,010,423

45,882,350 22,779,474 833,986,690 112,637,703 15,707,644,878

45,882,350 19,576,599 993,274,921 20,386,911 15,566,514,786

1,937,293,740

2,074,097,214

1,930,947,778

2,071,097,214

31(e) 31(f) 13.2 13.3 12 14 15

168,134,509 - 282,300 - 36,444,572,866 127,000,000 322,071,012 13,022,582,385

246,646,589 - 282,300 - 30,711,750,853 2,000,000 322,071,012 14,796,459,845

168,134,509 596,470,600 - 17,901,783,196 23,150,309,238 127,000,000 322,071,012 4,977,213,590

246,646,589 642,352,950 - 11,940,361,196 22,874,309,238 2,000,000 322,071,012 5,987,845,784

16 17

685,946,459 128,834,166 52,836,717,437

175,339,183 134,757,515 48,463,404,511

- 11,779,387 49,185,709,310

- 11,527,548 44,098,211,531

72,956,072,481

67,040,414,934

64,893,354,188

59,664,726,317

For Director ………………………………………………………………. The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

154 Annual Report 2011

Electricity Generating Public Co., Ltd.

Electricity Generating Public Company Limited

Statements of Financial Position (continued) As at 31 December 2011 and 2010

Notes Liabilities and shareholdersâ&#x20AC;&#x2122; equity Current liabilities Trade payables Trade payable to a related party Amounts due to related parties Current portion of long-term loans from financial institutions, net Debentures due within one year Other current liabilities - Interest payable - Value added tax payable - Corporate income tax payable - Others Total current liabilities Non-current liabilities Long-term loans from financial institutions, net Retirement benefit obligations Provision for decommissioning costs Other non-current liabilities Total non-current liabilities Total liabilities

Consolidated 2011 Baht

Company

2010 Restated Baht

2011 Baht

2010 Restated Baht

31(d) 31(e)

253,078,447 64,551,410 9,701,695

232,804,758 92,712,524 11,845,750

27,636,013 55,751,959 4,458,738

20,798,381 34,298,660 6,311,636

18 19

535,728,282 - 18,222,832 78,063,073 35,810,629 720,905,424 1,716,061,792

223,697,707 496,621,203 15,899,297 84,008,213 113,015,320 540,140,230 1,810,745,002

289,380,906 - 9,659,749 35,525,577 - 286,883,840 709,296,782

- - 2,733,699 40,192,146 11,105,901 270,834,863 386,275,286

18 20 21

11,521,387,363 199,408,660 972,895,496 13,267,003 12,706,958,522

8,840,246,236 180,533,136 874,279,974 6,091,897 9,901,151,243

10,893,809,094 91,767,927 386,414,269 30,590,721 11,402,582,011

8,000,000,000 82,159,491 370,839,030 26,111,871 8,479,110,392

14,423,020,314

11,711,896,245

12,111,878,793

8,865,385,678

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

155

Electricity Generating Public Company Limited

Statements of Financial Position (continued) As at 31 December 2011 and 2010

Notes

Consolidated 2011 Baht

Company

2010 Restated Baht

2011 Baht

2010 Restated Baht

Liabilities and shareholders’ equity (continued)

Shareholders’ equity Share capital Authorised share capital - 530,000,000 ordinary shares of Baht 10 per share Issued and paid-up share capital - 526,465,000 ordinary shares of Baht 10 per share Premium on share capital Premium on treasury stock Retained earnings Appropriated - Legal reserve Unappropriated Other components of equity

5,300,000,000

5,264,650,000 8,601,300,000 47,373,035 530,000,000 42,681,867,762 852,834,463

5,264,650,000 8,601,300,000 47,373,035 530,000,000 40,455,123,354 (79,022,179)

5,264,650,000 8,601,300,000 47,373,035 530,000,000 37,274,695,405 1,063,456,955

5,264,650,000 8,601,300,000 47,373,035 530,000,000 35,142,994,510 1,213,023,094

Total equity attributable to the parent company Non-controlling interests

57,978,025,260 555,026,907

54,819,424,210 509,094,479

52,781,475,395 -

50,799,340,639 -

Total shareholders’ equity

58,533,052,167

55,328,518,689

52,781,475,395

50,799,340,639

Total liabilities and shareholders’ equity

72,956,072,481

67,040,414,934

64,893,354,188

59,664,726,317

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

156 Annual Report 2011

Electricity Generating Public Co., Ltd.

Electricity Generating Public Company Limited

Income Statements

For the years ended 31 December 2011 and 2010

Notes

Consolidated 2010 Restated Baht

2011 Baht

2010 Restated Baht

31(a),(b) 7,661,035,192 31(c) (5,588,768,660)

8,608,979,776 (5,678,455,725)

2,258,324,928 (1,806,013,523)

2,535,275,542 (1,531,846,798)

2,072,266,532 Gross profit Other income 24 449,118,661 Currency exchange gains (losses) 21,978,720 Administrative expenses 31(h),(i) (1,678,317,514) Finance costs 26 (694,204,857) Share of profit from interests in joint ventures, net 13 5,199,684,409

2,930,524,051 386,196,878 (55,762,049) (1,433,135,581) (563,981,872) 6,109,227,948

452,311,405 5,892,735,667 7,412,030 (921,361,651) (536,606,508) -

1,003,428,744 6,697,157,118 (24,030,414) (983,884,749) (380,741,909) -

Sales and service income Cost of sales and services

2011 Baht

Company

Profit before corporate income tax Corporate income tax

5,370,525,951 (254,702,346)

7,373,069,375 (455,179,284)

4,894,490,943 -

6,311,928,790 (142,951,141)

Net profit for the year

5,115,823,605

6,917,890,091

4,894,490,943

6,168,977,649

Attributable to : Owners of the parent Non-controlling interests

4,989,534,456 126,289,149

6,802,559,659 115,330,432

4,894,490,943 -

6,168,977,649 -

Net profit for the year

5,115,823,605

6,917,890,091

4,894,490,943

6,168,977,649

9.48 9.48

12.92 12.92

9.30 9.30

Earnings per share for the year Basic earnings per share Diluted earnings per share

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

11.72 11.72

157

Electricity Generating Public Company Limited

Statements of Comprehensive Income For the years ended 31 December 2011 and 2010

2011 Baht

Company

2010 Restated Baht

2011 Baht

2010 Restated Baht

5,115,823,605

6,917,890,091

4,894,490,943

6,168,977,649

(146,130,436) 1,077,987,078

664,398,097 (957,799,151)

(149,566,139) -

657,060,271 -

Other comprehensive income (expenses) for the year

931,856,642

(293,401,054)

(149,566,139)

657,060,271

Total comprehensive income for the year

6,047,680,247

6,624,489,037

4,744,924,804

6,826,037,920

Total comprehensive income attributable to : Owners of the parent Non-controlling interests

5,921,391,098 126,289,149

6,509,158,605 115,330,432

4,744,924,804 -

6,826,037,920 -

6,047,680,247

6,624,489,037

4,744,924,804

6,826,037,920

Net profit for the year

Consolidated

Other comprehensive income Unrealised gains (losses) on investments in marketable securities - available-for-sale Translation adjustments

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

- - 5,264,650,000 8,601,300,000 - - - - 5,264,650,000 8,601,300,000

2.2.1 28

47,373,035

- 47,373,035 - -

47,373,035

- 47,373,035 - -

47,373,035

530,000,000 42,681,867,762 1,063,456,955 (210,622,492)

- 511,533,524 - - 530,000,000 40,455,123,354 1,209,587,391 (1,288,609,570) - (2,762,790,048) - - - 4,989,534,456 (146,130,436) 1,077,987,078

530,000,000 39,943,589,830 1,209,587,391 (1,288,609,570)

521,174,207 51,093,315,408

Total Baht

852,834,463

- (79,022,179) - 931,856,642

(79,022,179)

555,026,907 58,533,052,167

- 511,533,524 509,094,479 55,328,518,689 (80,356,721) (2,843,146,769) 126,289,149 6,047,680,247

509,094,479 54,816,985,165

509,094,479 55,328,518,689

115,330,432 6,624,489,037

- - 501,215,368 214,378,875 521,174,207 51,594,530,776 - (19,422,872) (19,422,872) - (107,987,288) (2,871,078,252)

214,378,875

664,398,097 (957,799,151) (293,401,054)

- - 545,189,294 (330,810,419) - - - -

545,189,294 (330,810,419)

530,000,000 40,455,123,354 1,209,587,391 (1,288,609,570)

- 6,802,559,659

- 501,215,368 530,000,000 36,415,654,659 - - - (2,763,090,964)

530,000,000 35,914,439,291

Total other components Non-controlling of equity interests Baht Baht

Other components of equity income Other comprehensive (expenses)

Consolidated

Retained earnings Premium on Investments Translation treasury stock Legal reserve Unappropriated available-for-sale adjustments Baht Baht Baht Baht Baht

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

Closing balance as at 31 December 2011

5,264,650,000 8,601,300,000

Opening balance as at 1 January 2011 - As previously reported - Retrospective adjustments from changes in accounting policies - As restated Changes in shareholders’ equity for the year - Dividends paid - Total comprehensive income for the year

- 5,264,650,000 8,601,300,000

- - 5,264,650,000 8,601,300,000 - - - -

2.2.1 28

Closing balance as at 31 December 2010

5,264,650,000 8,601,300,000

Opening balance as at 1 January 2010 - As previously reported - Retrospective adjustments from changes in accounting policies - As restated Changes in shareholders’ equity for the year - Additional investment in a subsidiary - Dividends paid - Total comprehensive income (expenses) for the year (restated)

Notes

Issued and paid-up share Premium on capital share capital Baht Baht

For the years ended 31 December 2011 and 2010

Statements of Changes in Shareholders’ Equity

Electricity Generating Public Company Limited

158 Annual Report 2011 Electricity Generating Public Co., Ltd.

5,264,650,000 5,264,650,000 - 5,264,650,000 - - 5,264,650,000

2.2.1 28

Closing balance as at 31 December 2010

Opening balance as at 1 January 2011 - As previously reported - Retrospective adjustments from changes in accounting policies - As restated Changes in shareholdersâ&#x20AC;&#x2122; equity for the year - Dividends paid - Total comprehensive income (expenses) for the year

Closing balance as at 31 December 2011

8,601,300,000

- 8,601,300,000 -

8,601,300,000

47,373,035

- 47,373,035 -

47,373,035

- 8,601,300,000

- 47,373,035 -

47,373,035

Premium on treasury stock Baht

- 8,601,300,000 -

8,601,300,000

Premium on share capital Baht

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

- 5,264,650,000 -

2.2.1 28

5,264,650,000

Opening balance as at 1 January 2010 - As previously reported - Retrospective adjustments from changes in accounting policies - As restated Changes in shareholdersâ&#x20AC;&#x2122; equity for the year - Dividends paid - Total comprehensive income for the year (restated)

Notes

Issued and paid-up share capital Baht

For the years ended 31 December 2011 and 2010

530,000,000

- 530,000,000 -

530,000,000

- 530,000,000 -

530,000,000

Legal reserve Baht

37,274,695,405

4,894,490,943

493,513,659 35,142,994,510 (2,762,790,048)

34,649,480,851

35,142,994,510

6,168,977,649

466,656,812 31,737,107,825 (2,763,090,964)

31,270,451,013

Unappropriated Baht

Retained earnings

Company

Statements of Changes in Shareholdersâ&#x20AC;&#x2122; Equity (continued)

Electricity Generating Public Company Limited

1,063,456,955

(149,566,139)

- 1,213,023,094 -

1,213,023,094

657,060,271

- 555,962,823 -

555,962,823

1,063,456,955

(149,566,139)

- 1,213,023,094 -

1,213,023,094

657,060,271

- 555,962,823 -

555,962,823

Investments Total other available-for-sale components of equity Baht Baht

of equity Other components Other comprehensive income

52,781,475,395

4,744,924,804

493,513,659 50,799,340,639 (2,762,790,048)

50,305,826,980

50,799,340,639

6,826,037,920

466,656,812 46,736,393,683 (2,763,090,964)

46,269,736,871

Total Baht

159

160 Annual Report 2011

Electricity Generating Public Co., Ltd.

Electricity Generating Public Company Limited

Statements of Cash Flows

For the years ended 31 December 2011 and 2010

Notes

2011 Baht

Company

2010 Restated Baht

2011 Baht

2010 Restated Baht

5,370,525,951

7,373,069,375

4,894,490,943

6,311,928,790

1,972,553,321 217,216,514 25,988,046 (176,396,514) 466,647,642 50,892,632

2,175,204,520 247,138,340 22,299,447 (87,946,201) 569,080,001 35,239,692

1,053,132,812 121,740,689 10,310,096 (189,063,659) 380,541,269 15,575,239

1,076,811,397 135,970,288 10,889,865 (111,140,429) 365,794,461 14,947,448

163,988,568

(17,655,469)

140,490,000

68,627 1,481,885 (1,476,528) - - (115,233,980)

106,583,177 49,741 (3,450,742) - (4,812,935) (118,348,412)

68,627 101,091 (170,865) (6,982,607) - (115,233,980)

106,583,177 49,741 (4,697,184) (330,000,000) (4,812,935) (118,348,412)

(5,364,452,040)

(5,906,465,803)

(5,199,684,409)

(6,109,227,948)

2,776,571,755

4,187,222,586

940,547,615

1,547,510,404

(56,747,588) 77,353,857

(380,946,787) (13,780,021)

(69,231,794) 78,512,080

(128,243,728) (14,141,579)

620,824,463

(467,955,680)

(3,360,613)

667,664,575

17,928,067

444,653,496

Cash flows from operating activities Profit before corporate income tax for the year Adjustments to reconcile profit before corporate income tax to net cash provided by operations : - Depreciation and amortisation - Allowance for obsolescence - Retirement benefit expenses 20 - Interest income - Interest expenses - Provision for decommissioning costs - Unrealised currency exchange (gains) losses - Losses from write-off and disposal of spare parts and supplies - Losses from disposals of equipment - Gain on disposals of equipment - Gains from dissolution of a subsidiary - Gain on disposals of marketable securities - Dividends received from other company - Dividends received from subsidiaries and joint ventures 13.4 - Share of profit from interests in 13 joint ventures, net Cash flows before changes in operating assets and liabilities Changes in operating assets and liabilities : (excluding the effects of acquisition of subsidiaries) - Other current assets - Other non-current assets - Short-term and long-term investments used as collateral - Trade receivables and trade receivable from a related party

Consolidated

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

161

Electricity Generating Public Company Limited

Statements of Cash Flows (continued) For the years ended 31 December 2011 and 2010

Notes

- Amounts due from related parties - Spare parts and supplies - Trade payables and trade payable to a related party - Amounts due to related parties - Retirement benefit paid - Other current liabilities - Other non-current liabilities

Consolidated 2011 Baht

Company

2010 Restated Baht

2011 Baht

2010 Restated Baht

8,946,332 (117,590,329)

838,569 (7,526,810)

(3,225,854) 28,693,005

8,229,493 (43,277,518)

(7,911,130) (4,062,337) (7,112,522) (68,134,980) 1,162,381

32,697,764 (19,181,726) (6,968,516) 10,743,722 (5,197,140)

28,290,932 (1,852,898) (701,660) 231,501 1,153,981

7,209,194 (21,200,903) (3,995,690) 29,466,466 (2,212,609)

Cash generated from operations - Interest received - Tax paid

3,219,939,289 152,419,869 (171,659,875)

3,997,610,536 95,589,690 (71,942,173)

1,020,344,975 166,871,516 (9,657,280)

1,823,997,026 117,129,117 -

Net cash receipts from operating activities

3,200,699,283

4,021,258,053

1,177,559,211

1,941,126,143

Cash flows from investing activities Investments in subsidiaries and interests in joint ventures, net of cash and cash equivalents transferred as part of acquisition Cash received from a joint venture for return of capital Cash received from dissolution of a subsidiriary and a joint venture Net cash receipts from (payments in) short-term investments Net cash receipts from short-term investments used as collateral Net cash payments from long-term investments Acquisition of other long-term investments Net cash payments in purchases of equipment Proceed from loans to related parties Dividends received from subsidiaries and joint ventures Dividends received from other company

(6,570,001,495)

(2,650,733,492)

(6,237,422,000)

(2,622,957,206)

3,521,667

24,047,071

6,982,607

354,047,071

(1,489,463,592)

47,338,009

(1,448,832,809)

84,636,476

31(f)

- 156,075,075 (125,000,000) (76,474,101) -

450,000,000 - - (90,212,402) 32,000,000

- 158,000,000 (125,000,000) (21,302,557) 45,882,350

450,000,000 - - (23,590,046) 77,882,350

13.4

6,403,252,203 115,233,980

4,536,948,586 118,348,412

5,455,968,612 115,233,980

4,920,419,170 118,348,412

(1,586,377,930)

2,471,257,851

(2,050,489,817)

3,362,307,894

Net cash receipts from (payment in) investing activities

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

162 Annual Report 2011

Electricity Generating Public Co., Ltd.

Electricity Generating Public Company Limited

Statements of Cash Flows (continued) For the years ended 31 December 2011 and 2010

Notes

Consolidated 2011 Baht

Company

2010 Restated Baht

2011 Baht

2010 Restated Baht

(3,257,977) (460,923,941)

(2,303,178) (576,525,347)

(1,062,724) (373,477,533)

- (365,794,461)

3,042,700,000

(724,073,518) (2,844,842,618)

(1,121,751,334) (2,855,935,925)

- (2,762,235,948)

- (2,762,599,106)

Net cash payment in financing activities

(990,398,054)

(4,556,515,784)

(94,076,205)

(3,128,393,567)

Net increase (decrease) in cash and cash equivalents Beginning balance Effect of exchange rate changes

623,923,299 7,748,266,006 29,677,072

1,936,000,120 5,854,559,912 (42,294,026)

(967,006,811) 6,641,233,520 -

2,175,040,470 4,466,193,050 -

Ending balance

8,401,866,377

7,748,266,006

5,674,226,709

6,641,233,520

Cash flows from financing activities Payments on finance leases Interests paid Proceeds from long-term loans from financial institutions Payments on long-term loans from financial institutions and debentures Dividends paid to shareholders

Cash and cash equivalents are made up as follows : - Cash in hand and deposits at financial institutions - maturities within three months - Short-term investments in promissory notes - maturities within three months

2,539,090,823

2,669,712,841

339,646,491

1,740,221,779

5,862,775,554

5,078,553,165

5,334,580,218

4,901,011,741

8,401,866,377

7,748,266,006

5,674,226,709

6,641,233,520

Non-cash transactions - Purchases of fixed assets by finance lease liabilities - Reclassification of utilised capital spare parts to property, plant and equipment - Reclassification of unutilised capital spare parts from property, plant and equipment - Increase in property, plant and equipment by other payables

27,512,619

3,998,070

242,058,511

718,446,962

141,847,753

219,764,097

(258,683,278)

(262,927,304)

(133,061,844)

(102,140,231)

10,877,070

8,344,308

The notes to the consolidated and company financial statements on pages 163 to 215 are an integral part of these financial statements.

163

Electricity Generating Public Company Limited

Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2011 and 2010

1 General information Electricity Generating Public Company Limited (“the Company”) is a public limited company incorporated and resident in Thailand. The address of its registered office is 222 Moo 5, EGCO Tower, 14th and 15th floor, Vibhavadi Rangsit Road, Tungsonghong, Laksi, Bangkok 10210. The Company is listed on the Stock Exchange of Thailand. For reporting purposes, the Company and its subsidiaries are referred to as “the Group”. The principal business operation of the Group is the generation of electricity for sale to the government sector and industrial users. These consolidated and company financial statements were authorised for issue by the president on 17 February 2012. 2 Accounting policies The principal accounting policies applied in the preparation of these consolidated and company financial statements are set out below. 2.1 Basis of preparation The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act. The consolidated and company financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The preparation of financial statements in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies and to disclose the areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements as disclosed in Note 3. An English version of the consolidated and company financial statements has been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail. 2.2 New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards (collectively “the accounting standards”) 2.2.1 The accounting standards being effective for the accounting periods beginning on or after 1 January 2011 TAS 1 (Revised 2009) Presentation of Financial Statements TAS 2 (Revised 2009) Inventories TAS 7 (Revised 2009) Statement of Cash Flows TAS 8 (Revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors TAS 10 (Revised 2009) Events after the Reporting Period

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Electricity Generating Public Co., Ltd.

2 Accounting policies (continued) 2.2 New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards (collectively “the accounting standards”) (continued) 2.2.1 The accounting standards being effective for the accounting periods beginning on or after 1 January 2011 (continued) TAS 11 (Revised 2009) Construction Contracts TAS 16 (Revised 2009) Property, Plant and Equipment TAS 17 (Revised 2009) Leases TAS 18 (Revised 2009) Revenue TAS 19 Employee Benefits TAS 23 (Revised 2009) Borrowing Costs TAS 24 (Revised 2009) Related Party Disclosures TAS 26 Accounting and Reporting by Retirement Benefit Plans TAS 27 (Revised 2009) Consolidated and Separate Financial Statements TAS 28 (Revised 2009) Investments in Associates TAS 29 Financial Reporting in Hyperinflationary Economies TAS 31 (Revised 2009) Interests in Joint Ventures TAS 33 (Revised 2009) Earnings per Share TAS 34 (Revised 2009) Interim Financial Reporting TAS 36 (Revised 2009) Impairment of Assets TAS 37 (Revised 2009) Provisions, Contingent Liabilities and Contingent Assets TAS 38 (Revised 2009) Intangible Assets TAS 40 (Revised 2009) Investment Property TFRS 2 Share-base Payment TFRS 3 (Revised 2009) Business Combinations TFRS 5 (Revised 2009) Non-current Assets Held for Sale and Discontinued Operations TFRS 6 Exploration for and Evaluation of Mineral Resources TFRIC 15 Agreements for the Construction of Real Estate TSIC 31 Revenue - Barter Transactions involving Advertising Services Commencing 1 January 2011, the Group has applied the aforementioned accounting standards. The application of those accounting standards does not have significant impact to the financial statements being presented except TAS 16 (revised 2009) “Property, Plant and Equipment” and TAS 40 “Investment Property”.

165

2 Accounting policies (continued) 2.2

New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards (collectively “the accounting standards”) (continued) 2.2.1 The accounting standards being effective for the accounting periods beginning on or after 1 January 2011 (continued) The Group has retrospectively applied TAS 16 (revised 2009) “Property, Plant and Equipment” in respect of the estimation of residual values of fixed assets and related decommissioning costs and TAS 40 “Investment Property”. The impact of the changes on the consolidated and company statements of financial position as at 31 December 2010 and the consolidated and company income statements for the year ended 31 December 2010 is as follows. However, the restatement does not have any impacts to tax and other comprehensive income.

Consolidated

Baht’ 000 Increase (decrease) Statements of financial position as at 31 December 2010 - Interests in joint ventures - Investment property - Property, plant and equipment, net - Other non-current assets - Provision for decommissioning costs - Retained earnings as at 1 January 2010 - Retained earnings as at 31 December 2010

(3,368) 322,071 1,389,181 (322,071) 874,280 501,215 511,533

Consolidated

Baht’ 000 Increase (decrease)

Income statements for the year ended 31 December 2010 - Cost of sales - Financial costs - Share of profits from interests in joint ventures, net - Net profit for the period - Basic and diluted earnings per share (Baht)

(58,482) 35,240 (12,924) 10,318 0.02

Company Baht’ 000 Increase (decrease) - 322,071 864,353 (322,071) 370,839 466,657 493,514 Company Baht’ 000 Increase (decrease) (41,804) 14,947 - 26,857 0.05

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Electricity Generating Public Co., Ltd.

2.2.2

The accounting standards being effective for the accounting periods beginning on or after 1 January 2013 TAS 12 Income Taxes TAS 20 (Revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (Revised 2009) The Effects of Changes in Foreign Exchange Rates TSIC 10 Government Assistance - No Specific Relation to Operating Activities TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

The Group has not early adopted the aforementioned accounting standards and the Group’s management is in the process of reviewing the impacts of those accounting standards. However significant changes in accounting standards relevant to the Group are summarised as below.

•

TAS 12 prescribed the accounting treatment for income taxes, comprising current tax and deferred tax. Current tax assets and liabilities are measured at the amount expected to be paid to or recovered from the taxation authorities, using tax rates and tax law that have been enacted or substantively enacted by the end of the reporting period. Deferred taxes are measured based on the temporary difference between the tax base of an asset or liability and its carrying amount in the financial statements and using the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and tax law that have been enacted or substantively enacted by the end of the reporting period.

•

TAS 21 (Revised 2009) required each individual entity to determine its functional currency which is a currency of the primary economic environment in which the entity operates. Foreign currency transactions are required to be translated into the functional currency using the exchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at year-end exchange rate of monetary items denominated in foreign currency are recognised in profit or loss. In addition, the results and financial position of all the group entities that have a functional currency difference from the presentation currency are translated in the presentation currency by (a) assets and liabilities are translated at the closing rate at the date of that statement of financial position (b) income and expenses are translated at exchange rate at the date of the transactions and (c) all resulting exchange differences are recognised in other comprehensive income.

167

Accounting policies (continued) 2.3 Group accounting - investments in subsidiaries and interests in joint ventures 2.3.1 Investments in subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non- controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. The excess of the consideration transferred the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly to the income statements. Intercompany transactions, balances and unrealised gains or loss on transactions between group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. In the company financial statements, investments in subsidiaries are accounted for using the cost method of accounting. Under the cost method, income from investments in subsidiaries will be recorded when dividends are declared. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment. A test for impairment for investments in subsidiaries is carried out when there is a factor indicating that investments might be impaired. If the carrying value of the investments is higher than its recoverable amount, impairment loss is charged to the income statements. A list of the Group’s subsidiaries and the financial effects of the acquisitions and disposals of subsidiaries are shown in Note 13. 2.3.2 Transactions and non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For changes in a parent’s ownership interest in a subsidiary that do not result in a loss of control, the difference between any consideration paid/received and the relevant share acquired/disposed of the carrying value of net assets of the subsidiary is recorded in shareholders’ equity. Gains or losses on disposals to non-controlling interests are also recorded in shareholders’ equity.

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2 Accounting policies (continued) 2.3 Group accounting - investments in subsidiaries and interests in joint ventures (continued) 2.3.2 Transactions and non-controlling interests (continued) When the Group ceases to have control, any retained interest in the former subsidiary is re-measured at its fair value, with the change in carrying amount recognised in income statements. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest. In addition, any amounts previously recognised in statements of comprehensive income in respect of the former subsidiary are accounted for in the income statements as if the Group had directly disposed of the related assets or liabilities. 2.3.3 Interests in joint ventures The Group’s interests in jointly controlled entities are accounted for using the equity method of accounting in the consolidated financial statements. Under the equity method, the interests in joint ventures are initially recognised at cost which includes goodwill identified on acquisition, net of any accumulated impairment loss (if any). The Group’s share of its joint ventures’ post-acquisition profits or losses is recognised in the consolidated income statements, and its share of post-acquisition movements in comprehensive income is recognised in the consolidated statements of comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the interests in joint ventures. When the Group’s share of losses in joint ventures equals or exceeds its interests in joint ventures, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures. Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been changed to ensure consistency with the policies adopted by the Group. In the company financial statements, interests in joint ventures are accounted for using the cost method of accounting. Under the cost method, income from interests in joint ventures will be recorded when dividends are declared. A test for impairment for interests in joint ventures is carried out when there is a factor indicating that investments might be impaired. If the carrying value of the investments is higher than its recoverable amount, impairment loss is charged to the income statements. A list of the Group’s joint ventures and the financial effects of the acquisitions and disposals of joint ventures are shown in Note 13. 2.4 Foreign currency translation Items included in the financial statements of each entity in the Group are measured using the reporting currency of that entity. The consolidated financial statements are presented in Thai Baht. Foreign currency transactions are translated into Thai Baht using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Thai Baht at the exchange rate prevailing at the end of the reporting period. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the income statements. Income statements and statements of comprehensive income and cash flows of foreign entities are translated into the Group’s reporting currency at the weighted average exchange rates for the year and statements of financial position are translated at the exchange rates prevailing on the end of the reporting period. Currency translation differences arising from the retranslation of the net investment in foreign entities are taken to shareholders’ equity. On disposal of a foreign entity, accumulated currency translation differences are recognised in the income statements as part of the gain or loss on disposal of foreign entities.

169

Accounting policies (continued) 2.5 Financial instruments Financial assets carried in the statement of financial position include cash and cash equivalents, investments, trade receivables and trade receivables from a related party. Financial liabilities carried in the statement of financial position include trade payables, trade payables to a related party, loans and debentures. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. The Group is also a party to financial instruments that reduce exposure to fluctuations in interest rates. These instruments are not recognised in the consolidated and company financial statements on inception. Interest rate swap contracts protect the Group from movements in interest rates. Any differential to be paid or received on the interest rate swap contracts is recognised as a component of finance costs as incurred. Disclosures about financial instruments to which the Group is a party are provided in Note 30. 2.6 Cash and cash equivalents Cash and cash equivalents are carried in the statement of financial position at cost. Cash and cash equivalents comprise cash in hand, deposits held at financial institutions and short-term highly liquid investments with maturities of three months or less from the date of acquisition. 2.7 Trade receivables Trade receivables are recognised initially at original invoice amount and subsequently measured at the remaining amount less allowance for doubtful receivables based on a review of all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount and the amount expected to be collectible. Bad debts are recognised to the income statements as part of administrative expenses. 2.8 Spare parts and supplies Spare parts and supplies are stated at cost less allowance for obsolescence. Cost is calculated on the moving average basis. The spare parts are categorised as “specific spare parts” and “common spare parts”. Specific spare parts are classified into two categories, which are capital spare parts used for specific plant equipment in power plants and specific spare parts used for general use. The allowance for specific spare parts is calculated by dividing the balance of specific spare parts on hand at the year end by the number of years remaining under the Power Purchase Agreements with the Electricity Generating Authority of Thailand (EGAT), except for capital spare parts that are used for specific plant equipment in power plants (Note 2.11). The allowance for common spare parts is generally provided based on an aging analysis. 2.9 Other investments Investments other than investments in subsidiaries and interests in joint ventures are classified into the following three categories: held-to-maturity, available-for-sale and general investments. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. • Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to- maturity and are included in non-current assets, except those with maturities within 12 months from the end of the reporting period, which are classified as current assets. • Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale, and are included in non-current assets unless management has expressed the intention of holding the investment for less than 12 months from the end of the reporting period or unless they will need to be sold to raise operating capital, in which case they are included in current assets.

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Electricity Generating Public Co., Ltd.

Accounting policies (continued) 2.9 Other investments (continued) â&#x20AC;˘ Investments in non-marketable equity securities are classified as general investments. All categories of investments are initially recognised at cost which is equal to the fair value of consideration paid plus transaction costs. Held-to-maturity investments are carried at amortised cost using the effective yield method less impairment loss. Available-for-sale investments are subsequently carried at fair value. Unrealised gains and losses arising from changes in the fair value of investments classified as available-for-sale are recognised in the statements of comprehensive income. The fair value of investments is based on the quoted bid price by reference to the Stock Exchange of Thailand and the Thai Bond Dealing Centre. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statements as gains and losses from investment in securities. General investments are carried at cost less impairment. A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the income statements. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statements. When disposing of part of the Groupâ&#x20AC;&#x2122;s holding of a particular investment in debt or equity securities, the carrying amount of the disposed part is determined by the weighted average carrying amount of the total holding of the investment. 2.10 Investment property Property that is held for long-term rental or for capital appreciation or both, and that is not occupied by the companies in the Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property or land held for a currently undetermined future use. Investment property of the Group is land held for a currently undetermined future use. The Group has not determined that it will use the land as owner-occupied property or as capital appreciation. Investment property is measured initially at its cost including related transaction costs. Subsequently, the investment property is carried at cost less accumulated impairment losses (if any). Subsequent expenditure is capitalised to the assetâ&#x20AC;&#x2122;s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance costs are expensed when incurred. 2.11 Property, plant and equipment All property, plant and equipment are initially recorded at cost. Subsequently all plant and equipment are stated at historical cost less accumulated depreciation and impairment (if any). The costs of property, plant and equipment comprise both the purchase price and any costs directly attributable to bringing the assets to location and condition necessary for them to be capable of operating in the manner intended by management. Their costs also include the initial estimate of the costs of dismantling and removing the item and restoring the site on which they are located, the obligation for which the Group incurs either when the items are acquired or as a consequence of having used the items during a particular period. Depreciation is calculated using the straight-line method to write off the cost of each asset to its residual value over its estimated useful life, except land which is considered to have an indefinite life, as follows:

171

2 Accounting policies (continued) 2.11 Property, plant and equipment (continued) Years

Power plants Water plants and transmission pipeline Buildings and structures Substation and transmission system Operating and maintenance equipment Office equipment, furniture and computers Motor vehicles

15, 18, 20 and 21 30 10 and 20 20 and 21 5 3, 5 and 10 5

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period. Capital spare parts whose estimated useful life is more than one year are capitalised and depreciated using the straight-line method over the estimated useful life of between 6 and 12 years when used in major repair and maintenance processes. The capital spare parts which are replaced by a major overhaul will be removed and recorded as spare parts and supplies at the net book value at the date of replacement. All other repairs and maintenance are charged to the income statements during the financial period in which they are incurred. Where the carrying amount of asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Gains and losses on disposals of assets are determined by comparing proceeds with the carrying amount and are recognised within “Other gains or losses, net” in the income statements. Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset, during the period of time required to complete and prepare the asset for its intended use. All other borrowing costs are recognised as expenses in the income statements. 2.12 Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired subsidiary undertaking or joint venture at the date of acquisition. Goodwill on acquisitions of subsidiaries is separately reported and of joint ventures is included in interests in joint ventures in the consolidated statement of financial position. Recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of a subsidiary or a joint venture include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units or group of cash generating units that are expected to benefit from the business combination in which the goodwill arose.

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Electricity Generating Public Co., Ltd.

Accounting policies (continued) 2.13 Intangible assets 2.13.1 Right in Power Purchase Agreement and Tap Water Purchase Agreement The right in Power Purchase and Tap Water Purchase Agreements arising on acquisitions of the Group is amortised over the periods of the Power Purchase Agreements with the Electricity Generating Authority of Thailand (EGAT) and of the Water Supply Agreement with the Provincial Waterworks Authority (PWA), which are between 16 and 25 years. 2.13.2 Development expenditure Development expenditure is recognised as an expense as incurred. Costs incurred on development projects are recognised as intangible assets when it is probable that the project will be a success considering its commercial and technological feasibility, and only if the cost can be measured reliably. Other development expenditure is recognised as an expense as incurred. Development expenditure previously recognised as an expense is not recognised as an asset in a subsequent period. Development expenditure that has been capitalised is amortised from the commencement of the commercial operation on a straight-line basis over the power plantsâ&#x20AC;&#x2122; life. 2.14 Impairment of assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets and intangible assets that have definite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount which is the higher of an assetâ&#x20AC;&#x2122;s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 2.15 Leases where a Group is the lessee Leases of assets which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance charges so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance costs, are included in other long-term payables. The interest element of the finance cost is charged to the income statements over the lease period. The asset acquired under finance lease is depreciated over the shorter of the useful life of the asset or the lease term. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statements on a straight-line basis over the period of the lease. 2.16 Borrowings Borrowings are recognised initially at the fair value of the proceeds received, net of the transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective yield method; any difference between the proceeds (net of transaction costs) and the redemption value is recognised to the income statements over the period of the borrowings. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

173

Accounting policies (continued) 2.17 Corporate income taxes The Group calculates income taxes in accordance with the Revenue Code on an accrual basis. The Group does not recognise income taxes payable or receivable in future periods in respect of temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts. 2.18 Employee benefits The Group has post-employment benefits consisting of both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age of employee, years of service and compensation. 2.18.1 Defined benefit plan - retirement benefit The Group provides for post employment benefits, payable to employees under the labour laws applicable in Thailand and other countries in which the Group has its operations. The liability in respect of employee benefits is the present value of the defined benefit obligation which is calculated by an independent actuary in accordance with the actuarial technique. The present value of the defined benefit obligation is determined by discounting estimated future cash flows using yields on government bonds which have terms to maturity approximating the terms of the related liability. The estimated future cash flows shall reflect employee salaries, turnover rate, mortality, length of service and other factors. Actuarial gains or losses will be recognised in the income statements in the period to which they relate. The costs associated with providing these benefits are charged to the income statements so as to spread the cost over the employment period during which the entitlement to benefits is earned. 2.18.2 Defined contribution plan - provident fund The Group operates a provident fund that is a defined contribution plan. The assets are held in a separate fund which is managed by an external fund manager in accordance with the Provident Fund Act B.E. 2530. The provident fund is funded by payments from employees and by the Group. Contributions to the provident fund are charged to the income statements in the year to which they relate. 2.19 Provisions 2.19.1 General provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. 2.19.2 Provision for decommissioning costs The Group recognises provision for decommissioning costs, which are provided at the onset of completion of the project, for the estimate of the eventual costs that relate to the removal of the power and water plants. The recognised provision for decommissioning costs is based on future removal cost estimates and incorporate many assumptions such as abandonment times and future inflation rate and discounted to present value at the discount rate estimated by the management. Those costs are included as part of the power and water plants.

174 Annual Report 2011

Electricity Generating Public Co., Ltd.

Accounting policies (continued) 2.20 Treasury stock Treasury stock presented in the consolidated and company financial statements is carried at cost and shown as a deduction from total shareholders’ equity. Gains on disposal of treasury stock are determined by reference to its carrying amount and are taken to “Premium on treasury stock”. Losses on disposal of treasury stock are determined by reference to its carrying amount and are taken to “Premium on treasury stock” and “Retained earnings” consecutively. 2.21 Revenue recognition Sales under the Power Purchase Agreements (PPA) comprise Availability Payments and Energy Payments. Availability Payments are recognised according to the terms set out in the Power Purchase Agreement. Energy Payments are calculated based on electricity delivered. Sales under the Electricity and Steam Sales/Purchase Agreements with industrial users are recognised on delivery of electricity and steam and customer acceptance. However, under the PPAs of two subsidiaries, EGAT has to bear the natural gas cost, therefore, the calculation of revenues from the portion of energy sales of electricity and the natural gas cost of those two subsidiaries are not included in these financial statements. Revenue from construction services is recognised using the percentage of completion method. The stage of completion is measured by reference to the relationship that the contract costs incurred for work performed to date bear to the estimated total costs for the contract. Revenue from other services is recognised when the services have been rendered in accordance with the terms of the agreements or invoices have been issued. Interest income is recognised on an accrual basis unless collectability is in doubt. Dividend income is recognised when the shareholder’s right to receive payment is established. 2.22 Dividends Dividends are recorded in the consolidated and company financial statements in the period in which they are approved by the shareholders and the Board of Directors.

Critical accounting estimates, assumptions and judgements Accounting estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. During 2011, the significant accounting estimates of the Group are as follows: 3.1 Useful life of power plants and water treatment plant The Group determines the estimated useful lives of power plants and the water treatment plant based on the periods of the Power Purchase Agreements and Water Purchase Agreement. 3.2 Provision for decommissioning costs The Group makes estimates and assumptions concerning the future in relation to provision for decommissioning costs of power and water plants. The Group recognises provision for decommissioning costs of power and water plants, which are provided at the onset of completion of the project, for the estimate of the eventual costs that relate to the removal of the power and water plants. The recognised provision for decommissioning costs is based on future removal cost estimates which are by nature complicated processes and incorporate many assumptions such as abandonment times and future inflation rate.

175

Critical accounting estimates, assumptions and judgements (continued) 3.3 Revenue recognition from construction services Revenue recognition under construction and services contracts is based on the stage of completion of a contract measured by applying the cost-to-cost basis to contractual revenues. Use of the stage of completion method requires estimates of future gross profit on a contract by contract basis. The future gross profit represents the profit remaining after deducting the costs attributable to the contract from the revenues provided for in the contract. The estimate of future gross profit is based on a complex estimation process that includes identification of risks and any assessment that it is necessary to estimate with sufficient precision the total future costs as well as the expected timetable.

Capital risk management The Groupâ&#x20AC;&#x2122;s objectives when managing capital are to safeguard the Groupâ&#x20AC;&#x2122;s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, alternative practices include returning capital to shareholders, issuing new shares or selling assets to reduce debt.

Statements of cash flows Changes in short-term and long-term investments used as collateral are included in the statements of cash flows as cash flows from operating activities because proceeds from sales of electricity must be maintained as short-term and long-term investments used as collateral in accordance with the Master Agreements and loan agreements and debentures, as described in Note 9.

Segment information - consolidated financial statements Financial information by business operation segment The business of the Group is the generation of electricity and tap water for sale to government and industrial users, both in Thailand and overseas, including providing maintenance services and operating power plant. The Group does not disclose segment information for piped water and the provision of maintenance services and power plant operations because revenues from those two business segments were equivalent to 3.51% and 8.72% of total revenue from sales and services, respectively (2010: 3.01% and 6.35% of total revenues from sales and services, respectively). Financial information by geographical segment

Revenue from sales and service income Cost of sales and services Segment results Other income Currency exchange gains Administrative expenses

For the year ended 31 December 2011 Thailand Baht

The Laos Peopleâ&#x20AC;&#x2122;s Democratic The Republic Philippines Baht Baht

Consolidated Baht

7,462,281,941 (5,467,533,568) 1,994,748,373 448,260,100 21,809,250 (1,353,124,105)

- - - - - -

7,661,035,192 (5,588,768,660) 2,072,266,532 449,118,661 21,978,720 (1,678,317,514)

198,753,251 (121,235,092) 77,518,159 858,561 169,470 (325,193,409)

176 Annual Report 2011

Electricity Generating Public Co., Ltd.

6 Segment information - consolidated financial statements (continued) Financial information by geographical segment (continued)

Finance costs Share of profit from interests in joint ventures, net Profit before corporate income tax Corporate income tax Net profit for the year Owners of the parent Non-controlling interests Property, plant and equipment, net

Thailand Baht (694,204,857) 3,656,993,634 4,074,482,395 (237,738,101) 3,836,744,294 3,710,455,145 126,289,149 13,022,582,385

Revenue from sales and service income Cost of sales and services Segment results Other income Currency exchange losses Administrative expenses Finance costs Share of profit from interests in joint ventures, net Profit before corporate income tax Corporate income tax Net profit for the year Owners of the parent Non-controlling interests Property, plant and equipment, net

For the year ended 31 December 2011 The Laos Peopleâ&#x20AC;&#x2122;s Democratic The Republic Philippines Baht Baht - 1,045,620,255 1,045,620,255 - 1,045,620,255 1,045,620,255 - -

Consolidated Baht

- 497,070,520 250,423,301 (16,964,245) 233,459,056 233,459,056 - -

(694,204,857) 5,199,684,409 5,370,525,951 (254,702,346) 5,115,823,605 4,989,534,456 126,289,149 13,022,582,385

For the year ended 31 December 2010 (Restated) Thailand Baht

The Laos Peopleâ&#x20AC;&#x2122;s Democratic The Republic Philippines Baht Baht

Consolidated Baht

8,608,979,776 (5,678,455,725) 2,930,524,051 386,196,878 (55,762,049) (1,433,135,581) (563,981,872) 5,279,615,208 6,543,456,635 (455,179,284) 6,088,277,351

- - - - - - - 107,269,990 107,269,990 - 107,269,990

- - - - - - - 722,342,750 722,342,750 - 722,342,750

8,608,979,776 (5,678,455,725) 2,930,524,051 386,196,878 (55,762,049) (1,433,135,581) (563,981,872) 6,109,227,948 7,373,069,375 (455,179,284) 6,917,890,091

5,972,946,919 115,330,432

107,269,990 -

722,342,750 -

6,802,559,659 115,330,432

14,796,459,845

177

7 Cash and cash equivalents As at 31 December 2011, cash and cash equivalents mainly comprised investments in promissory notes with maturities of three months or less. The interest rates were 0.25% to 4.00% per annum (2010: 0.13% to 2.00% per annum). 8

Short-term investments Short-term investments comprised deposits at financial institutions with maturities over three months but not later than one year and marketable securities. Deposits at financial institutions The deposits at financial institutions of the Group mainly comprise deposits at financial institutions and promissory notes issued by local financial institutions. As at 31 December 2011, deposits at financial institutions bore interest at rates from 1.60% to 4.35% per annum (2010: interest at rates from 0.75% to 1.60% per annum). Marketable securities

Available-for-sale

Debt securities Changes in fair value of investments

Held-to-maturity

Debt securities Short-term investments in marketable securities 9

Consolidated 2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

- - -

500,000,000 5,981,000 505,981,000

- - -

506,298,797 9,416,703 515,715,500

222,000,000 222,000,000

- 505,981,000

222,000,000 222,000,000

- 515,715,500

Short-term and long-term investments used as collateral The majority of the deposits at financial institutions used as collateral are those of two subsidiaries: EGCO Cogeneration Company Limited and Roi-Et Green Company Limited (As at 31 December 2010, were of three subsidiaries - EGCO Cogeneration Company Limited, Roi-Et Green Company Limited and Khanom Electricity Generating Company Limited). They comprise cash reserves required to be maintained under their loan and debenture agreements for the purpose of repayment of principal and payment of interest due within one year and as a reserve to minimise exchange rate risk. These cash reserves are provided from the proceeds of sales of electricity. During the second quarter of 2011, Khanom Electricity Generating Company Limited which is a subsidiary settled the whole amount of the outstanding debentures. Thus, its deposits at financial institutions used as collateral were nil as at 31 December 2011. As at 31 December 2011, the Group had Thai Baht deposits at financial institutions used as collateral of Baht 344 million bearing interest at the rates of 0.50% to 4.25% per annum (2010: Baht 965 million bearing interest at the rates of 0.50% to 2.00%). These included the cash reserve for the purpose of repayment of principal and payment of interest due within one year of these two subsidiaries amounted to Baht 142 million (2010: Baht 224 million) and the remaining balance of Baht 202 million (2010: Baht 741 million) represented collateralised deposits maintained in accordance with the loan agreements but which could be used subject to certain lender approvals.

178 Annual Report 2011

Electricity Generating Public Co., Ltd.

10 Trade receivables, net

Trade receivables Less Allowance for doubtful receivables Trade receivables, net

Consolidated 2011 Baht 245,141,606 - 245,141,606

2010 Baht

Company 2011 Baht

245,779,344 - 245,779,344

2010 Baht - - -

- - -

Outstanding trade receivables as at 31 December can be analysed as follows :

Not overdue Overdue below 3 months Overdue 3 - 6 months Overdue 6 - 12 months Overdue over 12 months

Consolidated 2011 Baht 159,014,689 20,759,550 22,742 5,843,921 59,500,704 245,141,606 - 245,141,606

Less Allowance for doubtful receivables Trade receivables, net

2010 Baht

Company 2011 Baht

135,331,854 109,625,108 491,907 - 330,475 245,779,344 - 245,779,344

2010 Baht - - - - - - - -

- - - - - - - -

11 Fuel and spare parts and supplies, net

Fuel Specific spare parts - Capital spare parts used for specific equipment of the power plant - Other specific spare parts Common spare parts Spare parts in transit

Less Allowance for obsolescence Fuel and spare parts and supplies, net

Consolidated 2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

390,791,496

394,772,788

193,856,784

196,059,782

735,815,839 1,810,084,793 43,405,407 1,096,402 2,981,193,937 (937,374,285)

578,376,062 1,830,821,206 42,668,003 409,408 2,847,047,467 (720,157,771)

266,946,425 897,729,306 9,373,502 1,096,402 1,369,002,419 (535,015,729)

249,832,046 953,986,316 6,671,817 - 1,406,549,961 (413,275,040)

2,043,819,652

2,126,889,696

833,986,690

993,274,921

179

12 Long-term investments in marketable securities and other long-term investments

Available-for-sale

Debt securities Equity securities Changes in fair value of investments Total long-term investments in marketable securities Other long-term investments

Other equity securities Total other investments Total long-term investments in marketable securities and other long-term investments

Consolidated 2011 Baht

Company

2010 Baht

2011 Baht

2010 Baht

6,345,962 867,490,823 1,063,456,955 1,937,293,740

3,000,000 867,490,823 1,203,606,391 2,074,097,214

- 867,490,823 1,063,456,955 1,930,947,778

- 867,490,823 1,203,606,391 2,071,097,214

127,000,000 127,000,000

2,000,000 2,000,000

127,000,000 127,000,000

2,000,000 2,000,000

2,064,293,740

2,076,097,214

2,057,947,778

2,073,097,214

Other long-term investments As at 31 December 2011, other long-term investment mainly represented an investment Xayaburi Power Company Limited (XPCL) amounting to Baht 125 million. On 1 March 2011, the Company acquired a 12.5% shareholding interest in XPCL for a total consideration of Baht 100 million in order to become a joint developer of the Xayaburi hydropower project. XPCL was awarded a concession agreement by the government of the Laos Peopleâ&#x20AC;&#x2122;s Democratic Republic (Laos PDR) to design, develop, construct and implement a run-of-the-river dam power project with an installed capacity of 1,285 MW for 29 years after the commercial operation date. On 20 April 2011, the investment committee approved the payment of XPCL for the additional shares at the proportion of the Companyâ&#x20AC;&#x2122;s original investment, totalling Baht 25 million. The Company paid for the additional ordinary shares already. 13 Investments in subsidiaries and interests in joint ventures, net

Investments in subsidiaries Less Impairment Investments in subsidiaries, net (Note 13.2) Investments in joint ventures (Note 13.3) Total investments in subsidiaries and interests in joint ventures, net

Consolidated

Company

2011 Baht

2010 Restated Baht

2011

2010

Baht

- - - 36,444,572,866

- - - 30,711,750,853

17,949,603,196 (47,820,000) 17,901,783,196 23,150,309,238

11,988,181,196 (47,820,000) 11,940,361,196 22,874,309,238

36,444,572,866

30,711,750,853

41,052,092,434

34,814,670,434

180 Annual Report 2011

Electricity Generating Public Co., Ltd.

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.1 The movements in investments in subsidiaries and interests in joint ventures can be analysed as follows :

Consolidated

Opening net book value

- As previously reported - Effect from change in accounting policy (Note 2.2.1) - As restated Share of profit from interests in joint ventures, net Increase in share capital of joint ventures (Note 13.3) Return of share capital from a joint venture Transfer of net liabilities to interests in a joint venture Dividends received from joint ventures (Note 13.4) Acquisition of interest in a joint venture (Note 13.1(a)) Translation adjustments Closing net book value

2011 Baht

2010 Baht

30,715,119,040 (3,368,187) 30,711,750,853 5,199,684,409 276,000,000 - - (6,736,527,352) 5,938,404,518 1,055,260,438 36,444,572,866

28,529,156,466 9,555,476 28,538,711,942 6,109,227,949 2,457,316,292 (27,568,738) 162,090,086 (5,537,914,927) - (990,111,750) 30,711,750,853

Company

Opening net book value

Acquisition of a subsidiary and interests in a joint venture Increase in share capital of joint ventures (Note 13.3) Return of share capital from a joint venture Investment in a new subsidiary Closing net book value

(a)

2011 Baht

2010 Baht

34,814,670,434 5,961,422,000 276,000,000 - - 41,052,092,434

32,219,281,966 - 2,622,316,291 (27,568,738) 640,915 34,814,670,434

Principal movements in investments in a subsidiary and interests in a joint venture during the year ended 31 December 2011 Quezon Power (Philippines), Limited Co. (QPL) and Pearl Energy Philippines Operating, Inc. (PEPOI) (formerly

named Covanta Philippines Operating, Inc. (CPOI) On 13 December 2010, the Group entered into a definitive agreement to acquire 100% of the ordinary shares of Ogden Power Development Cayman Inc (OPDCI), which held a 26.125% interest in Quezon Power (Philippines), Limited Co. (QPL), and in Pearl Energy Philippines Operating, Inc (PEPOI) from Covanta Energy International Investments Ltd. (CEILL). The consideration was US Dollars 215 million, which is equivalent to Baht 6,529 million. The Company paid US Dollars 196.2 million to EGCO International (B.V.I) Limited (a subsidiary of the Group) which then paid this amount and the remaining US Dollars 19 million to CEILL.

181

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.1 The movements in investments in subsidiaries and interests in joint ventures can be analysed as follows : (continued) (a) Principal movements in investments in a subsidiary and interests in a joint venture during the year ended 31 December 2011 (continued) Quezon Power (Philippines), Limited Co. (QPL) and Pearl Energy Philippines Operating, Inc. (PEPOI) (formerly

named Covanta Philippines Operating, Inc. (CPOI) (continued) The acquisition of all of the total ordinary shares of OPDCI increased the Group’s shareholding in QPL, a joint venture of the Group, from 26% to 52.125%. The management structure remains unchanged. The Group also has 100% ownership in PEPOI, which is engaged in the provision of operation and maintenance services to QPL through a long-term Operation and Maintenance Agreement. The acquisition was completed on 25 March 2011. Under the terms and conditions of the definitive agreement, a purchase price adjustment was required to be made after the transfer of the shares. As a result, in April 2011 the Group paid CEILL an additional amount of US Dollars 0.58 million, which is equivalent to Baht 17 million. Therefore, the total consideration was US Dollars 215.58 million, which is equivalent to Baht 6,547 million. Details of the net acquired assets of QPL and PEPOI as at 25 March 2011are as follows :

Consolidated

Joint venture QPL Subsidiary PEPOI Baht’ 000 Baht’ 000

Property, plant and equipment, net Loans from financial institution, net Other assets less other liabilities Net assets Right in long-term power purchase agreement (presents under interests in joint ventures) Right in long-term operation and maintenance agreement Total purchase consideration Less Cash transferred as part of subsidiary acquisition Investments in subsidiaries and interests in joint ventures, net of cash and cash equivalents transferred as part of acquisition

Total Baht’ 000

5,708,359 (2,383,555) 956,854 4,281,658

- - 53,438 53,438

5,708,359 (2,383,555) 1,010,292 4,335,096

1,656,746 - 5,938,404 -

- 555,102 608,540 (252,943)

1,656,746 555,102 6,546,944 (252,943)

5,938,404

355,597

6,294,001

The rights in the long-term power purchase agreement and the long-term operation and maintenance agreement are amortised over the remaining periods of the respective agreements.

182 Annual Report 2011

Electricity Generating Public Co., Ltd.

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.2 Investments in subsidiaries, net The detail of the investments in subsidiaries are as follows :

Company

Business

Subsidiaries incorporated in Thailand Khanom Electricity Generating Co., Ltd. EGCO Engineering and Service Co., Ltd. and its subsidiaries - Agro Energy Co., Ltd. - Egcom Tara Co., Ltd. EGCO Green Energy Co., Ltd. and its subsidiary - Roi-Et Green Co., Ltd. EGCO Cogeneration Co., Ltd. Total investment in subsidiaries incorporated in Thailand

Electricity generation Power plant operation and maintenance services Trading/delivery of natural scrap Tap water business Investment in biomass fueled electricity generation plant Husk fueled electricity generation plant Electricity generation

2011 Paid-up share capital Baht’ 000

Portion of Investment (%)

Cost Method Baht’ 000

Dividend Baht’ 000

(Including indirect holding)

4,850,000 400,000

307,208 68,000

129,500

71,040

80.00

891,894

80,000

6,271,394

526,248

4,850,000 400,000

99.99 99.99

99.99

175,000

74.19 74.00

95.00

1,060,000

183

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.2 Investments in subsidiaries, net (continued) The detail of the investments in subsidiaries are as follows : (continued)

Company (continued)

Business

Subsidiary incorporated in overseas North Pole Investment Company Limited Investment in energy (incorporated in the Republic of Mauritius) related business and its subsidiaries and joint ventures - EGCO International (B.V.I.) Limited Investment in energy (incorporated in British Virgin Islands) related business and its subsidiaries and joint ventures Subsidiaries Investment in energy - New Growth Cooperatief U.A (incorporated in Netherlands) related business and its subsidiary and joint venture - New Growth B.V. Investment in energy (incorporated in Netherlands) related business and its subsidiaries and joint ventures - Pearl Energy Philippines Operating, Inc. Power plant operation (PEPOI) (registered under the laws and maintenance of Cayman Islands, operated in the services Philippines) Joint ventures - Quezon Power (Philippines), Limited Co. Electricity generation (QPL)(incorporated in the Philippines) - Conal Holdings Corporation (Conal) Investment in power (incorporated in the Philippines) projects

2011 (continued) Paid-up share capital Bahtâ&#x20AC;&#x2122; 000

Portion of Investment (%)

Cost Method Baht

(Including indirect holding)

11,731,443

100.00

5,865,560

100.00

6,532,609

100.00

6,527,138

100.00

6,085

100.00

7,340,472

52.125

729,320

40.00

Total investment in subsidiaries incorporated in overseas

Total investment in subsidiaries Less Impairment

Investments in subsidiaries, net

Dividend Bahtâ&#x20AC;&#x2122; 000

11,678,209

17,949,603 (47,820)

526,248 -

17,901,783

526,248

As at 31 December 2011, dividends receivable from subsidiaries amounting to Baht 929 million were recognised in the company financial statements.

184 Annual Report 2011

Electricity Generating Public Co., Ltd.

Company

Business

Total investment in subsidiaries incorporated in Thailand

2010 Paid-up share capital Baht’000

Portion of Investment (%)

(Including indirect holding)

4,850,000 400,000

Cost Method Baht’000

99.99 99.99

Dividend Baht’000

4,850,000 400,000

474,715 142,365

129,500

94,720

99.99

175,000

74.19 74.00

95.00

1,060,000

80.00

891,894

160,000

6,271,394

871,800

185

Subsidiary incorporated in overseas North Pole Investment Company Limited (incorporated in the Republic of Mauritius) and its subsidiaries and joint ventures - EGCO International (B.V.I.) Limited (incorporated in British Virgin Islands) - New Growth Cooperatief U.A (incorporated in Netherlands) - New Growth B.V. (incorporated in Netherlands) - Conal Holdings Corporation (Conal) (incorporated in the Philippines) - Quezon Power (Philippines), Limited Co. (QPL) (incorporated in the Philippines)

Business

Company (continued) 2010 (continued) Paid-up share capital Baht’000

Portion of Investment (%)

Cost Method Baht’000

(Including indirect holding)

Investment in energy related business

5,770,026

100.00

Investment in energy related business Investment in energy related business Investment in energy related business Investment in power projects Electricity generation

12,569

100.00

2,169

100.00

1,094

100.00

729,320

40.00

7,340,472

26.00

Total investment in subsidiaries incorporated in overseas

Total investment in subsidiaries Less Impairment

Investments in subsidiaries, net

Dividend Baht’000

5,716,787

11,988,181 (47,820)

871,800 -

11,940,361

871,800

As at 31 December 2010, dividends receivable from subsidiaries amounting to Baht 1,353 million were recognised in the company financial statements.

186 Annual Report 2011

Electricity Generating Public Co., Ltd.

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interests in joint ventures The detail of the interests in joint ventures are as follows :

Consolidated

Joint ventures incorporated in Thailand Gulf Electric Public Co., Ltd. (GEC) and its subsidiaries BLCP Power Ltd. (BLCP) Natural Energy Development Co., Ltd. (NED)

2011 Portion of Investment (%)

Cost Method Baht’000

Equity Method Baht’000

Dividend Baht’000

(Including indirect holding)

Investment in power project Electricity generation Development of renewable energy project

50.00

6,672,769

11,979,777

1,530,063

50.00 33.33

10,433,597 474,000

10,147,541 412,188

1,933,275 -

Joint ventures incorporated in the Philippines Conal Holdings Corporation (Conal) Investment in power and its subsidiaries project Quezon Power (Philippines), Limited Co.(QPL) Electricity generation

40.00

954,647

890,381

106,810

52.125

10,754,275

9,622,420

1,791,514

Joint venture incorporated in the Lao People’s Democratic Republic Nam Theun 2 Power Company Limited (NTPC) Electricity generation

35.00

5,569,943

3,392,266

1,374,866

34,859,231

36,444,573

6,736,528

Total interests in joint ventures

Business

As at 31 December 2011, dividends receivable from joint ventures amounting to Baht 6,089 million were recognised in the consolidated financial statements.

187

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interests in joint ventures (continued) The detail of the interests in joint ventures are as follows : (continued)

Consolidated

Business

2010 Portion of Investment (%)

Cost Method Baht’000

Equity Method Restated Baht’000

(Including indirect holding)

Dividend Baht’000

Joint ventures incorporated in Thailand Gulf Electric Public Co., Ltd. (GEC) and its subsidiaries

Investment in power project

50.00

6,672,769

11,673,659

1,233,700

BLCP Power Ltd. (BLCP) Natural Energy Development Co., Ltd. (NED)

Electricity generation Development of renewable energy project

50.00 33.33

10,433,597 198,000

10,231,787 164,403

3,800,966 -

Joint ventures incorporated in the Philippines Conal Holdings Corporation (Conal) and its subsidiaries Quezon Power (Philippines), Limited Co. (QPL)

Investment in power project Electricity generation (Note 13.1(a))

40.00

954,647

615,011

128,355

26.00

4,833,293

4,610,076

374,894

35.00

5,569,943

3,416,814

28,662,249

30,711,750

5,537,915

Joint venture incorporated in the Lao People’s Democratic Republic Nam Theun 2 Power Company Limited (NTPC) Electricity generation Total interests in joint ventures

As at 31 December 2011 and 2010, under the terms and conditions of BLCP’s loan agreement, its common shares were pledged as collateral for its long-term loans.

As at 31 December 2010, dividends receivable from joint ventures amounting to Baht 5,756 million were recognised in the consolidated financial statements.

188 Annual Report 2011

Electricity Generating Public Co., Ltd.

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interests in joint ventures (continued) The detail of the interests in joint ventures are as follows: (continued)

Company

2011

Joint ventures incorporated in Thailand

Business

Portion of Investment (%)

Dividend Baht’000

(Including indirect holding)

Gulf Electric Public Co., Ltd. (GEC) Investment in power and its subsidiaries project BLCP Power Ltd. (BLCP) Electricity generation Natural Energy Development Co., Ltd. (NED) Development of renewable energy projects Joint venture incorporated in the Lao People’s Democratic Republic Nam Theun 2 Power Company Limited (NTPC) Electricity generation

Total interests in joint ventures

Cost Method Baht’000

50.00

6,672,769

1,530,063

50.00 33.33

10,433,597 474,000

1,933,275 -

35.00

5,569,943

1,374,866

23,150,309

4,838,204

Company

2010

Business

Joint ventures incorporated in Thailand

Gulf Electric Public Co., Ltd. (GEC) and its subsidiaries BLCP Power Ltd. (BLCP) Natural Energy Development Co., Ltd. (NED)

Investment in power project Electricity generation Development of renewable energy projects

Joint venture incorporated in the Lao People’s Democratic Republic Nam Theun 2 Power Company Limited (NTPC) Electricity generation

Total interests in joint ventures

Portion of Investment

(%)

Cost Method Baht’000

Dividend Baht’000

(Including indirect holding)

50.00

6,672,769

1,233,700

50.00 33.33

10,433,597 198,000

3,800,966 -

35.00

5,569,943

22,874,309

5,034,666

As at 31 December 2011, dividends receivable from joint ventures amounting to Baht 6,089 million were recognised in the company financial statements (31 December 2010 amounting to Baht 5,756 million).

189

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interests in joint ventures (continued) (a) The following changes in interests in joint ventures occurred during the year ended 31 December 2011 Natural Energy Development Co., Ltd. (NED) On 10 October 2011, Natural Energy Development Co., Ltd (NED), which is a joint venture of the Company, issued additional ordinary shares of Baht 828 million. The Company paid the additional paid-up shares in the same portion as its original investment, totalling Baht 276 million. On 22 December 2011, NED has commenced the Commercial Operation Date (COD) as specified in the Power Purchase Agreement (PPA) with EGAT. The contract is effective for the period of 5 years starting from the COD. 13.4 Dividends receivable from subsidiaries and joint ventures The principal movements of dividends receivable are as follows :

For the years ended 31 December

Consolidated 2011 Baht

Opening balance 5,756,143,305 Dividends declared by subsidiaries - Dividends declared by joint ventures 6,736,527,352 Dividends received from subsidiaries and joint ventures (6,403,252,203) Closing balance 6,089,418,454

Company

2010 Baht

2011 Baht

2010 Baht

4,755,176,964 - 5,537,914,927 (4,536,948,586) 5,756,143,305

7,109,556,304 526,248,253 4,838,203,787 (5,455,968,612) 7,018,039,732

6,123,509,671 871,800,255 5,034,665,548 (4,920,419,170) 7,109,556,304

13.5 The Group’s share of the assets, liabilities, revenues and expenses of the joint ventures is as follows : Interest in Gulf Electric Public Company Limited (GEC) Gulf Electric Public Company Limited is a joint venture between the Company and J-Power Holdings (Thailand) Company Limited (JPHT) and Mitr Power (Thailand) Company Limited. GEC’s business is the generation of electricity for sale to Electricity Generating Authority of Thailand (EGAT) and industrial users under long-term purchasing agreements. The Group has a 50% interest in GEC. Interest in BLCP Power Ltd. (BLCP) BLCP Power Ltd. is a joint venture between the Company and Banpu Coal Power Limited. BLCP’s business is to generate electricity from the coal fire electricity generating plant for sale to EGAT under long-term purchasing agreement, in which the Group has a 50% interest. Interest in Conal Holdings Corporation (Conal) Conal Holdings Corporation is a joint venture between EGCO International (B.V.I.) Limited, which is a subsidiary of the Company, and Alsons Consolidated Resources, Inc. Conal’s business is the generation of electricity for sale to the National Power Corporation (which is part of the government sector of the Philippines) and the provision of maintenance services and power plant operations, in which the Group has a 40% interest.

190 Annual Report 2011

Electricity Generating Public Co., Ltd.

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.5 The Group’s share of the assets, liabilities, revenues and expenses of the joint ventures is as follows: (continued) Interest in Nam Theun 2 Power Company Limited (NTPC) Nam Theun 2 Power Company Limited is a joint venture between the government of Lao PDR (through Lao Holding State Enterprise (LHSE)), EDF International (EDFI) and the Company. NTPC’s business is the generation of electricity for sale to EGAT and Electricite Du Laos (EDL), in which the Group has a 35% interest. Interest in Quezon Power (Philippines), Limited Co. (QPL) Quezon Power (Philippines), Limited Co. is a joint venture of EGCO International (B.V.I.) Limited (EGCO BVI), the Company’s subsidiary. EGCO BVI holds 100% of the shares of GPI Quezon Ltd. (GPIQ) and GPIQ holds 26% of the total shares of QPL. Accordingly, EGCO BVI is an indirect shareholder of QPL, with a 52.125% interest (2010: 26% interest). QPL’s business is the generation of electricity for sale to the major private sector of the Philippines under long term purchasing agreements. Interest in Natural Energy Development Co., Ltd. (NED) Natural Energy Development Co., Ltd. is a joint venture between the Company, CLP Thailand Renewables Limited and Diamond Generating Asia Limited. The joint venture is governed by a joint venture agreement and the Group has a 33.33% interest. NED’s business is to generate electricity from its solar power plant for sale to EGAT. Details of the financial position and joint venture’s return follow the Group’s ownership are as follows :

For the year ended 31 December 2011 Country of incorporation

Assets Baht’000

Liabilities Baht’000

Revenue Baht’000

Profit (loss) Baht’000

% interest held

(Including indirect holding)

GEC and its subsidiaries Thailand BLCP Thailand NED Thailand Conal and its subsidiaries The Philippines QPL The Philippines NTPC The Lao People’s Democratic Republic

22,281,418 24,956,443 2,163,454 1,572,158 13,904,747 13,055,843

10,309,915 18,172,592 1,751,266 187,589 6,293,127 10,892,283

15,320,892 9,037,129 6,578 698,514 5,105,078 2,703,209

1,842,428 2,017,212 (28,215) 47,361 598,012 1,097,355

50% 50% 33% 40% 52.125% 35%

191

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.5 The Group’s share of the assets, liabilities, revenues and expenses of the joint ventures is as follows: (continued) Details of the financial position and joint venture’s return follow the Group’s ownership are as follows : (continued)

For the year ended 31 December 2010 (Restated) Country of incorporation

Assets Baht’000

Liabilities Baht’000

Revenue Baht’000

Profit (loss) Baht’000

% interest held

(Including indirect holding)

GEC and its subsidiaries Thailand BLCP Thailand NED Thailand Conal and its subsidiaries The Philippines QPL The Philippines NTPC The Lao People’s Democratic Republic

23,043,800 24,790,948 523,301 1,305,093 6,785,623 13,375,354

11,387,222 18,026,639 358,898 282,399 2,650,206 11,238,982

15,128,337 8,989,336 649 654,367 2,774,911 1,727,718

2,452,111 3,035,365 (22,687) 167,274 615,715 120,204

50% 50% 33% 40% 26% 35%

14 Investment property

For the years ended 31 December

Book value Fair value

Consolidated 2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

322,071,012

727,939,371

Investment property of the Group is land held for a currently undetermined future use.

Closing net book value

1,529,063,309

1,182,000 - - - - - -

1,527,881,309 - 1,527,881,309

Year ended 31 December 2010 Opening net book value - As previously reported - Effect from change in accounting policy - As restated

Additions Capitalisation of capital spare parts Transfer of capital spare parts out Disposals, net Write-off, net Transfer Depreciation charge (Note 25)

1,527,881,309 - 1,527,881,309

Land Baht

At 31 December 2009 (Restated) Cost Less Accumulated depreciation Net book value

15 Property, plant and equipment, net

1,399,568,111

7,017,731 - - (1,003,771) - 26,805,157 (202,353,477)

1,569,102,471 - 1,569,102,471

11,714,651,311

17,717,580 718,446,962 (262,927,304) (108,532) - (14,463,975) (1,903,063,237)

11,828,349,642 1,330,700,175 13,159,049,817

3,947,285,185 35,899,509,018 (2,378,182,714) (22,740,459,201) 1,569,102,471 13,159,049,817

136,652,867

26,590,737 - - (235,502) (49,745) 30,123,044 (45,946,090)

126,170,423 - 126,170,423

524,380,621 (398,210,198) 126,170,423

Power plants, Buildings substation, and land transmission system Equipment and improvements and water plants motor vehicles Baht Baht Baht

Consolidated

Total Baht

16,524,247

42,502,902 - - - - (42,464,226) -

16,485,571 - 16,485,571

14,796,459,845

95,010,950 718,446,962 (262,927,304) (1,347,805) (49,745) - (2,151,362,804)

15,067,989,416 1,330,700,175 16,398,689,591

16,485,571 41,915,541,704 - (25,516,852,113) 16,485,571 16,398,689,591

Construction in progress Baht

192 Annual Report 2011 Electricity Generating Public Co., Ltd.

Year ended 31 December 2011 Opening net book value - As previously reported - Effect from change in accounting policy (Note 2.2.1) - As restated

At 31 December 2010 (Restated) Cost Less Accumulated depreciation Net book value

Consolidated

1,399,568,111 - 1,399,568,111

- 1,529,063,309

1,389,181,699 11,714,651,311

10,325,469,612

3,977,879,113 36,189,295,750 (2,578,311,002) (24,474,644,439) 1,399,568,111 11,714,651,311

- 136,652,867

136,652,867

549,433,023 (412,780,156) 136,652,867

Power plants, Buildings substation, and land transmission system Equipment and improvements and water plants motor vehicles Baht Baht Baht

1,529,063,309

1,529,063,309 - 1,529,063,309

Land Baht

15 Property, plant and equipment, net (continued)

Total Baht

- 16,524,247

16,524,247

1,389,181,699 14,796,459,845

13,407,278,146

16,524,247 42,262,195,442 - (27,465,735,597) 16,524,247 14,796,459,845

Construction in progress Baht

193

1,529,063,309 - 1,529,063,309

At 31 December 2011 Cost Less Accumulated depreciation

Net book value

- - - - - - - 1,529,063,309

Land Baht

Closing net book value

Year ended 31 December 2011 (continued) Additions Capitalisation of capital spare parts Transfer of capital spare parts out Disposals, net Write-off, net Transfer Depreciation charge (Note 25)

15 Property, plant and equipment, net (continued)

10,103,266,482

74,642,977 242,058,511 (258,683,278) (9) (1,347,324) 12,278,267 (1,680,333,973)

1,240,130,617

10,103,266,482

4,010,224,922 36,103,548,610 (2,770,094,305) (26,000,282,128)

1,240,130,617

8,232,608 - - (451,023) - 25,801,759 (193,020,838)

139,120,687

583,526,969 (444,406,282)

139,120,687

50,540,812 - - (1,490,797) (103,322) - (46,478,873)

Power plants, Buildings substation, and land transmission system Equipment and improvements and water plants motor vehicles Baht Baht Baht

Consolidated

13,022,582,385

165,973,466 242,058,511 (258,683,278) (1,941,829) (1,450,646) - (1,919,833,684)

Total Baht

11,001,290

13,022,582,385

11,001,290 42,237,365,100 - (29,214,782,715)

11,001,290

32,557,069 - - - - (38,080,026) -

Construction in progress Baht

194 Annual Report 2011 Electricity Generating Public Co., Ltd.

Closing net book value

315,573,445

- - - - - - -

315,573,445 - 315,573,445

Year ended 31 December 2010 Opening net book value - As previously reported - Effect from change in accounting policy - As restated

Additions Capitalisation of capital spare parts Transfer of capital spare parts out Disposals, net Write-off, net Transfer Depreciation charge (Note 25)

315,573,445 - 315,573,445

Land Baht

At 31 December 2009 (Restated) Cost Less Accumulated depreciation Net book value

15 Property, plant and equipment, net (continued)

643,228,550

1,343,539 - - - - 9,635,345 (107,118,642)

739,368,308 - 739,368,308

1,096,501,814 (357,133,506) 739,368,308

4,954,735,277

138,995 219,764,097 (102,140,231) (11) - 2,345,000 (941,357,609)

4,953,436,641 822,548,395 5,775,985,036

6,022,469,952 (246,484,916) 5,775,985,036

74,308,512

11,964,063 - - (91,377) (49,745) 14,499,173 (28,335,147)

76,321,545 - 76,321,545

274,596,493 (198,274,948) 76,321,545

Power plants, substation, Office transmission system, equipment, operating furniture, Buildings and and maintenance computers and structures equipment motor vehicles Baht Baht Baht

Company

14,932,024 - - - - (26,479,518) -

11,547,494 - 11,547,494

Construction in progress Baht

5,987,845,784

28,378,621 219,764,097 (102,140,231) (91,388) (49,745) - (1,076,811,398)

6,096,247,433 822,548,395 6,918,795,828

7,720,689,198 (801,893,370) 6,918,795,828

Total Baht

195

Year ended 31 December 2011 Opening net book value - As previously reported - Effect from change in accounting policy (Note 2.2.1) - As restated

At 31 December 2010 (Restated) Cost Less Accumulated depreciation Net book value

Company

643,228,550 - 643,228,550

- 315,573,445

1,107,480,698 (464,252,148) 643,228,550

864,352,686 4,954,735,277

4,090,382,591

5,518,813,041 (564,077,764) 4,954,735,277

- 74,308,512

74,308,512

274,137,402 (199,828,890) 74,308,512

Power plants, substation, Office transmission system, equipment, operating furniture, Buildings and and maintenance computers and structures equipment motor vehicles Baht Baht Baht

315,573,445

315,573,445 - 315,573,445

Land Baht

15 Property, plant and equipment, net (continued)

- -

- - -

Construction in progress Baht

864,352,686 5,987,845,784

5,123,493,098

7,216,004,586 (1,228,158,802) 5,987,845,784

Total Baht

196 Annual Report 2011 Electricity Generating Public Co., Ltd.

315,573,445 - 315,573,445

At 31 December 2011 Cost Less Accumulated depreciation

Net book value

- - - - - - - 315,573,445

Land Baht

Closing net book value

Year ended 31 December 2011 (continued) Additions Capitalisation of capital spare parts Transfer of capital spare parts out Disposals, net Write-off, net Transfer Depreciation charge (Note 25)

15 Property, plant and equipment, net (continued)

535,957,427

1,107,860,699 (571,903,272)

535,957,427

380,000 - - - - - (107,651,123)

4,056,229,379

5,455,044,649 (1,398,815,270)

4,056,229,379

10,501,319 141,847,753 (133,061,844) (8) - 2,345,000 (920,138,118)

65,963,339

286,126,256 (220,162,917)

65,963,339

18,528,427 - - (1,428,936) (101,091) - (25,343,573)

Power plants, substation, Office transmission system, equipment, operating furniture, Buildings and and maintenance computers and structures equipment motor vehicles Baht Baht Baht

Company

3,490,000

3,490,000 -

3,490,000

5,835,000 - - - - (2,345,000) -

Construction in progress Baht

4,977,213,590

7,168,095,049 (2,190,881,459)

4,977,213,590

35,244,746 141,847,753 (133,061,844) (1,428,944) (101,091) - (1,053,132,814)

Total Baht

197

198 Annual Report 2011

Electricity Generating Public Co., Ltd.

15 Property, plant and equipment, net (continued) As at 31 December 2011, property, plant and equipment amounting to Baht 1,899 million in the consolidated financial statements were mortgaged and pledged as collateral for long-term loans and debentures, as described in Notes 18 and 19 (2010: Baht 7,867 million). As at 31 December 2011, the Group had no significant capital commitments in respect of construction of power plants and purchases of equipment but not yet recognised in the consolidated financial statements (2010: Nil). 16 Right in long-term power and tap water purchase agreements and operation and maintenance

agreements, net

Consolidated

For the years ended 31 December

Opening net book value

Acquisitions of investments in subsidiaries Amortisation (Note 25) Closing net book value

At 31 December Cost Less Cumulated amortisation Net book value

2011 Baht

2010 Baht

175,339,183 555,101,557 (44,494,281) 685,946,459

181,646,649 8,994,328 (15,301,794) 175,339,183

861,274,049 (175,327,590) 685,946,459

306,172,492 (130,833,309) 175,339,183

17 Other non-current assets, net

Deposits Licenses for operating power plants Others Other non-current assets, net

Consolidated 2011 Baht 15,643,995 74,528,877 38,661,294 128,834,166

2010 Baht 13,593,824 80,700,929 40,462,762 134,757,515

Company 2011 Baht

2010 Baht

11,527,548 - 251,839 11,779,387

11,527,548 - - 11,527,548

199

18 Long-term loans, net The long-term loans are as follows:

Current portion of long-term loans, net Thai Baht US Dollars Japanese Yen Less Deferred financing fee

2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

109,595,000 387,486,822 42,401,935 (3,755,475) 535,728,282

102,447,500 87,283,640 37,721,175 (3,754,608) 223,697,707

- 289,380,906 - - 289,380,906

- - - - -

8,254,927,500 3,122,011,985 151,316,710 (6,868,832) 11,521,387,363

8,364,522,500 310,567,371 175,780,673 (10,624,308) 8,840,246,236

8,000,000,000 2,893,809,094 - - 10,893,809,094

8,000,000,000 - - - 8,000,000,000

Total long-term loans, net

12,057,115,645

9,063,943,943

11,183,190,000

8,000,000,000

Long-term loans, net Thai Baht US Dollars Japanese Yen

Less Deferred financing fee, net

Consolidated

As at 31 December 2011, the long-term loans were mainly of the Company amounting to Baht 11,183 million. Such long-term loans are unsecured loans from local financial institutions which comprised (a) long-term loans of Baht 4,000 million bearing interest at the six-month THBFIX rate plus a certain margin per annum. Interest is payable on a semi-annual basis and the principal is to be paid in 2014, (b) long-term loans of Baht 4,000 million bearing fixed interest rate at 4.325% per annum. Interest is payable on a monthly basis and the principal is to be paid in 2016. The interest rate on (c) Baht 3,183 million of the long-term loans from two local financial institutions amounted to US Dollars 100 million are the LIBOR rate plus a certain margin per annum. Interest is payable on a semi-annual basis, commencing from November 2012. Long-term loans at subsidiaries are secured liabilities. The long-term loans are secured over land, buildings, power plants and equipment of the subsidiaries. The subsidiaries are required to maintain cash reserves which are provided from the proceeds of sales of electricity for the purpose of repayment of principal and payment of interest due within one year and as a reserve for minimising the exchange risk (refer to Note 9). In addition, the Power Purchase Agreements, the Asset Purchase Agreements, the Major Maintenance Agreements and insurance policies have been assigned as collateral in accordance with the conditions under the Loan Agreements and debentures.

200 Annual Report 2011

Electricity Generating Public Co., Ltd.

18 Long-term loans, net (continued) Interest rate risk management The detail of interest rate swap contracts the Group are shown in Note 30 (a). The interest rate exposure on the long-term loans of the Group after taking account of interest rate swap contracts is as follows:

Long-term loans, net

- at fixed rates - at floating rates Total long-term loans, net

Consolidated 2011 Baht 4,873,925,645 7,183,190,000 12,057,115,645

2010 Baht 5,063,943,943 4,000,000,000 9,063,943,943

Company 2011 Baht

2010 Baht

4,000,000,000 7,183,190,000 11,183,190,000

4,000,000,000 4,000,000,000 8,000,000,000

After taking account of interest rate swaps, the weighted average effective interest rates of the long-term loans of the Group were approximately 3.29% per annum for US Dollars loans, 2.96% per annum for Japanese Yen loans and 4.21% per annum for Thai Baht loans. (2010: US Dollars 7.17% per annum, Japanese Yen 2.83% per annum and Thai Baht 4.64% per annum). After taking account of interest rate swaps, the weighted average effective interest rate of the long-term loans of the Company were 2.36% per annum for US Dollars loans and 4.14% per annum for Thai Baht loans. (2010: Thai Baht 4.57% per annum). The movements of the long-term loans from financial institutions can be analysed as follows:

Opening net book value Additions of long-term loans Repayments of long-term Loans Unrealised exchange losses (gains) Amortisation of deferred financing fee Closing net book value

Consolidated 2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

9,063,943,943 3,042,700,000 (227,452,315) 174,169,409 3,754,608

9,305,663,301 - (208,094,034) (37,379,931) 3,754,607

8,000,000,000 3,042,700,000 - 140,490,000 -

8,000,000,000 - - - -

12,057,115,645

9,063,943,943

11,183,190,000

8,000,000,000

201

18 Long-term loans, net (continued) Maturity of long-term loans is as follows :

Within 1 year Later than 1 year and not later than 5 years Later than 5 years Total long-term loans, net

Consolidated 2011 Baht

2010 Baht

535,728,282 10,942,625,519 578,761,844 12,057,115,645

223,697,707 4,820,710,190 4,019,536,046 9,063,943,943

Company 2011 Baht

2010 Baht

289,380,906 10,315,047,250 578,761,844 11,183,190,000

- 4,000,000,000 4,000,000,000 8,000,000,000

Credit facilities As at 31 December 2011, the Group had the available credit facilities from financial institutions amounted to Baht 4,108 million of which Baht 4,000 million for the Company (2010: Baht 4,333 million and US Dollars 100 million of which Baht 4,000 million and US Dollars 100 million was for the Company). 19 Debentures The debentures are debentures in Thai Baht of a subsidiary as follows:

Current portion of debentures Debentures, net Total debentures

Consolidated 2011 Baht

2010 Baht - - -

496,621,203 - 496,621,203

Company 2011 Baht

2010 Baht - - -

- - -

Debentures are secured liabilities. The subsidiary is required to maintain reserves for repayment of principal and payment of interest due within one year. These cash reserves are provided from the proceeds of sales of electricity (refer to Note 9). The subsidiary also has to pledge the relevant assets and agreements as collateral (refer to Note 18). However, during the second quarter of 2011, debentures were fully paid in accordance with terms and conditions set out in the agreement. As at 31 December 2011, the subsidiary already released property, buildings and equipment of power plants, the Power Purchase Agreement, the Major Maintenance Agreement and insurance policies, which were mortgaged and pledged as collateral for long-term loans and debentures from the lenders (Notes 9 and 15). The weighted average effective interest rate exposure of the debentures was 10.48% per annum (2010: 13.86% per annum).

202 Annual Report 2011

Electricity Generating Public Co., Ltd.

19 Debentures (continued) Maturity of debentures is as follows :

For the years ended 31 December

Consolidated 2011 Baht

Within 1 year Later than 1 year but not later than 5 years Total debentures

2010 Baht - - -

496,621,203 - 496,621,203

20 Retirement benefits obligation

Opening balance Retirement benefit expenses Interest cost Actuarial gains Retirement benefit paid Closing balance

Consolidated 2011 Baht 180,533,136 17,689,478 8,298,568 - (7,112,522) 199,408,660

Company

2010 Baht 165,202,205 12,799,643 7,587,214 1,912,590 (6,968,516) 180,533,136

2011 Baht

2010 Baht

82,159,491 6,235,191 4,074,905 - (701,660) 91,767,927

75,265,316 6,196,281 3,767,703 925,881 (3,995,690) 82,159,491

The following table is a summary of the assumptions relating to the actuarial technique as at the date of financial statements :

Discount rate as at 31 December Salary increase rate Turnover rate Pre-retirement mortality rate

2011 and 2010 4.80% 5.00% - 10.00% 0.00% - 5.00% 0.11% - 2.18%

203

21 Provision for decommissioning costs

For the years ended 31 December

Opening net book value - As previously reported - Effect from change in accounting policy (Note 2.2.1) - As restated Additional provision Closing net book balance

Consolidated 2011 Baht

Company

2010 Baht

2011 Baht

2010 Baht

874,279,974 874,279,974 98,615,522 972,895,496

839,040,282 839,040,282 35,239,692 874,279,974

370,839,030 370,839,030 15,575,239 386,414,269

355,891,583 355,891,583 14,947,447 370,839,030

22 Legal reserve

Opening balance Appropriation during the year Closing balance

Consolidated 2011 Baht 530,000,000 - 530,000,000

2010 Baht 530,000,000 - 530,000,000

Company 2011 Baht

2010 Baht

530,000,000 - 530,000,000

Under the Public Companies Act B.E. 2535, the Company is required to set aside as a legal reserve at least 5% of its net profit after accumulated deficit brought forward (if any) until the reserve is not less than 10% of the registered capital. The legal reserve is non-distributable. 23 Non-controlling interests

For the years ended 31 December

Consolidated 2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

Opening balance Shares of net profit from subsidiaries and interests in joint ventures Addition investment in subsidiary Dividend payment of subsidiaries

509,094,479

521,174,207

126,289,149 - (80,356,721)

115,330,432 (19,422,872) (107,987,288)

- - -

Closing balance

555,026,907

509,094,479

204 Annual Report 2011

Electricity Generating Public Co., Ltd.

24 Other income

For the years ended 31 December

Consolidated 2011 Baht

2010 Baht

Company 2011 Baht

2010 Baht

Dividend income from subsidiaries and joint ventures (Note 13) Dividend income from other company Interest income (Note 31 (f)) Rental and services income Gain on discontinued operation of a subsidiary Others

- 115,233,980 176,396,514 63,030,708 - 94,457,459

- 118,348,412 88,882,158 47,371,179 - 131,595,129

5,364,452,040 115,233,980 189,063,659 137,805,052 6,982,607 79,198,329

5,906,465,803 118,348,412 111,140,429 109,910,119 330,000,000 121,292,355

Total other income

449,118,661

386,196,878

5,892,735,667

6,697,157,118

25 Expense by nature The following expenditure items have been charged in arriving at net profit :

For the years ended 31 December

Depreciation on plant and equipment (Note 15) Amortisation of right in long-term power and tap water purchase agreements (Note 16) Major repair and maintenance expenses of power plants Staff costs

Consolidated 2011 Baht

2010 Restated Baht

Company 2011 Baht

2010 Restated Baht

1,919,833,684

2,151,362,804

1,053,132,814

1,076,811,398

44,494,281 568,986,812 1,242,528,151

15,301,794 322,635,033 1,050,335,011

- 335,734,075 505,268,310

- 118,211,344 477,030,452

26 Finance costs

For the years ended 31 December

Interest expenses Net losses (gains) on exchange rate from foreign currency loans Other finance costs Total finance costs

Consolidated 2011 Baht

2010 Restated Baht

Company 2011 Baht

2010 Restated Baht

450,786,060

544,033,596

368,772,872

344,450,001

175,639,231 67,779,566 694,204,857

(42,878,997) 62,827,273 563,981,872

140,490,000 27,343,636 536,606,508

- 36,291,908 380,741,909

205

27 Earnings per share Basic earnings per share is calculated by dividing the net profit for the year attributable to shareholders by the weighted average number of ordinary shares issued and paid-up during the year, net of treasury stock.

Consolidated 2011 Baht

Net profit attributable to owners of the parent (Baht) 4,989,534,456 Weighted average number of ordinary share in issue (Shares) 526,465,000 Basic earnings per share (Baht) 9.48

2010 Restated Baht 6,802,559,659 526,465,000 12.92

Company 2011 Baht 4,894,490,943 526,465,000 9.30

2010 Restated Baht 6,168,977,649 526,465,000 11.72

There are no dilutive potential ordinary shares in issue during the periods presented, so no diluted earnings per share is presented. 28 Dividends During the year ended 31 December 2011, the Company declared and paid dividends to the shareholders as details below. (a) At the Annual General Shareholdersâ&#x20AC;&#x2122; Meeting dated 21 April 2011, the shareholders approved the payment of dividends in respect of the operating results for the six-month period ended 31 December 2010 for 526,465,000 shares at Baht 2.75 per share, totalling Baht 1,448 million. These dividends were paid to shareholders on 4 May 2011 (2010: Dividends for 526,465,000 shares of Baht 2.75 per share, totalling Baht 1,448 million). The shareholders acknowledged the payments of interim dividends in respect of operating results for the first six-month period of 2010 for 526,465,000 shares at Baht 2.50 per share, totalling Baht 1,316 million. These dividends were paid to shareholders on 17 September 2010. (b) The Board of Directorsâ&#x20AC;&#x2122; meeting on 22 August 2011 approved to pay interim dividends in respect of the operating results for the six-month period ended 30 June 2011 for 526,465,000 shares at Baht 2.50 per share, totaling Baht 1,316 million. These dividends were paid to shareholders on 16 September 2011. In addition, the Company reversed dividend payable, payable to foreign investors who were unable to exercise rights to receive such dividends, amounting to Baht 1 million during 2011 (2010: Baht 1 million). 29 Promotional privileges The Group has been granted promotional privileges by the Office of the Board of Investment under promotion certificates in respect of electricity and tap water generation. These four subsidiaries have been granted exemption from certain taxes and duties as detailed in the certificates including exemption from corporate income tax for a period of eight years from the date of first revenue. As promoted entities, these subsidiaries are required to comply with the terms and conditions specified in the promotion certificates. The promotional privileges of Khanom Electricity Generating Company Limited, Egcom Tara Company Limited, EGCO Cogeneration Company Limited and Roi-Et Green Company Limited in relation to the eight-year corporate income tax exemption expired on 26 September 2004, 14 February 2009, 10 January 2011 and 24 April 2011, respectively. Khanom

206 Annual Report 2011

Electricity Generating Public Co., Ltd.

29 Promotional privileges (continued) Electricity Generating Company Limited, EGCO Cogeneration Company Limited and Roi-Et Green Company Limited are eligible to apply the corporate income tax rate of 50% of the normal corporate income rate for a period of five years beyond the eight-year corporate income tax exemption period. Egcom Tara Company Limited is not eligible for any further reduction in corporate income tax. Accordingly, the net profit of Khanom Electricity Generating Company Limited and Egcom Tara Company Limited are subject to the normal corporate income tax rate after the expiration date.

30 Financial instruments The principal financial risks faced by the Group are interest rate and exchange rate risks. The Group borrows to finance its operations, which involve payments in foreign currencies, at both fixed and floating rates of interest. The objectives of using derivative financial instruments are to reduce the uncertainty over future cash flows arising from movements in interest rates and to manage the liquidity of cash resources. Interest rate exposure is managed through interest rate swap contracts. In respect of currency exchange risk, the formula for the calculation of revenues from the Availability Payments and Energy Payments charged to EGAT allows for the minimisation of the impact of currency exchange. Trading for speculative purposes is not allowed. All derivative transactions are subject to prior approval by the respective board of each company in the Group. (a) Financial assets and liabilities As at 31 December 2011 and 2010, the Group had outstanding foreign currency assets and liabilities after taking account of foreign currency forward contracts as details below.

Consolidated

Liabilities

US Dollars Japanese Yen

2011 Currency Million

Million Baht

110.25 469.73

2010 Currency Million

3,510 194 3,704

Million Baht

13.13 570.53

398 213 611

Company

Liabilities

US Dollars

2011 Currency Million 100

2010 Million Baht

Currency Million

3,183

Million Baht -

207

30 Financial instruments (continued) (a) Financial assets and liabilities (continued) Foreign currency assets represent cash and cash equivalents, trade receivables and US Dollars deposits with financial institutions. Foreign currency liabilities represent trade payables, other payables, interest payables and long-term loans. As at 31 December 2011, the Group did not enter into any foreign currency forward contracts to cover their exchange risk relating to long-term loan repayments of US Dollars 110.25 million and Japanese Yen 469.73 million which were the net amount after deducting deposits and investments in foreign currency (2010: US Dollars 13.13 million and Japanese Yen 570.53 million). However, the Group receives compensation from EGAT for exchange rate effects related to its US Dollars and Japanese Yen debt services. Objectives and significant terms and conditions In order to manage risks arising from fluctuations in interest rates and currency exchange rates, the Group uses the following derivative financial instruments. Interest rate swap contracts Interest rate swap contracts are entered into to manage exposure to fluctuations in interest rates on specific transactions. The Company entered into an interest rate swap contract by converting floating rates to fixed rate for the total amount of long-term loans of Baht 4,000 million and of US Dollars 55 million (which equivalent to Baht 1,751 million). A subsidiary of the Company entered into an interest rate swap contract by converting floating rates to fixed rate for the total amount of long-term loans of US Dollars 10.25 million (which equivalent to Baht 326 million) and of Baht 365 million. The fixed interest rates under the swaps for long-term loans at 31 December were:

Currency

US Dollars Thai Baht

Contract amounts (millions) 2011

2010

65 4,365

13 4,467

Fixed Exchange Rates 2011

2010

2.60 - 7.42 2.48 - 5.65

7.42 2.48 - 5.65

The remaining notional principal amounts of the outstanding interest rate swap contracts at 31 December were :

Within 1 year Later than 1 year

Consolidated 2011 Million Baht 367 6,075 6,442

Company

2010 Million Baht 190 4,675 4,865

2011 Million Baht 159 5,592 5,751

2010 Million Baht - 4,000 4,000

208 Annual Report 2011

Electricity Generating Public Co., Ltd.

30 Financial instruments (continued) (b) Credit risk The Group has no significant concentrations of credit risk relating to its cash and investments. The Group places its cash and investments with high quality financial institutions. The Groupâ&#x20AC;&#x2122;s policy is designed to limit exposure with any one institution and to invest its excess cash in low risk investment accounts. The Group has not experienced any losses on such accounts. For trade receivables, the Groupâ&#x20AC;&#x2122;s sales are made to EGAT and industrial users under the terms and conditions of the long-term Power Purchase Agreements and the long-term Electricity and Steam Sales and Purchase Agreements. (c) Fair value The carrying amounts of the following financial assets and financial liabilities approximate their fair values: cash and cash equivalents, investments, trade receivables and payables, amounts due from and due to related companies, other receivables and payables, and short-term loans due to the short maturities of these instruments. Long-term loans and debentures The fair values of long-term loans with fixed interest rates have been calculated from the net present value of future cash flows discounted by market interest rates using rates at the date of financial statements. The fair values of long-term loans with floating interest rates approximate their carrying amounts. The fair value of debentures is estimated by discounting the future contractual cash flows at the market interest rate available on the latest trading date in the Thai Bond Dealing Center on the date of financial statements. The contract amounts and fair values of certain long-term loans and debentures with fixed interest rates at the date of financial statements are as follows :

2011

Consolidated

Contract amounts

Long-term loans

Million Baht

Company

Fair values Million Baht

4,192

Contract amounts Million Baht

4,394

Fair values Million Baht

4,000

4,142

2010

Consolidated

Contract amounts

Long-term loans Debentures

Million Baht

4,212 497

Company

Fair values Million Baht 5,138 513

Contract amounts Million Baht 4,000 -

Fair values Million Baht 4,880 -

209

30 Financial instruments (continued) (c) Fair value (continued) The fair values of the derivative financial instruments at the date of financial statements are as follows:

Unfavourable interest rate swaps Favourable interest rate swap

Consolidated 2011 Million Baht

Company

2010 Million Baht

(126) 14

(126) 23

2011 Million Baht

2010 Million Baht

(100) 14

(85) 23

The fair values of interest rate swap contracts, currency and interest rate swap contracts have been calculated using rates quoted by the Group’s bankers to terminate the contracts at the date of financial statements. 31 Related party transactions Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with the company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the Company, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. The major shareholders of the Company are the Electricity Generating Authority of Thailand (EGAT) and One Energy Thailand Limited (formerly named “CLP Power Projects (Thailand) Limited”), holding 25.41% and 22.42% of the Company’s shares, respectively. The remaining shares in the Company are widely held. On 1 April 2011, One Energy Thailand Limited transferred all of its shareholding in the Company to TEPDIA Generating B.V. which is a joint venture vehicle owned by Tokyo Electric Power Company (TEPCO) and Diamond Generating Asia, Limited. The information on the Company’s subsidiaries and joint ventures is provided in Note 13. The following material transactions were carried out with related parties : (a) Sales of electricity

For the years ended 31 December Sales of electricity - Major shareholder

Consolidated 2011 Million Baht 6,017

Company

2010 Million Baht 6,816

2011 Million Baht 2,258

2010 Million Baht 2,535

210 Annual Report 2011

Electricity Generating Public Co., Ltd.

31 Related party transactions (continued) The following material transactions were carried out with related parties : (continued) (a) Sales of electricity (continued) The Company and three subsidiaries, Khanom Electricity Generating Company Limited (KEGCO), EGCO Cogeneration Company Limited, and Roi-Et Green Company Limited, have entered into Power Purchase Agreements (PPAs) with EGAT. The agreements are effective for periods of 20, 20, 21 and 21 years, respectively. According to the resolutions of the Cabinet meetings dated 15 February 1994, 23 January 1996, 28 January 2003, and 29 May 2003, respectively, the electricity revenues from such agreements must be calculated on a cost plus basis. There is a limitation on sales of electricity to third parties as specified in the agreements. In addition, the Company and KEGCO are eligible to receive compensation for exchange rate effects, by adjusting the formula for calculation of electricity sold to EGAT each month pertaining to The First Amendment to the Power Purchase Agreements dated 30 January 1998 over the periods of the PPAs. Compensation for the years ended 31 December 2011 and 2010 amounting to Baht 33 million and Baht 91 million respectively. Under the PPAs of the Company and of KEGCO, EGAT has to bear the natural gas cost until the Company and subsidiary enter into natural gas purchase agreements with PTT Public Company Limited. To date, the Company and subsidiary have not entered into such purchase agreements. Therefore, the calculation of revenues from the portion of energy sales of electricity and the natural gas cost are not included in these financial statements. (b) Service income

For the years ended 31 December Service income - Major shareholder

Consolidated 2011 Million Baht 51

Company

2010 Million Baht 122

2011 Million Baht

2010 Million Baht -

EGCO Engineering and Service Company Limited has entered into the Subcontract for Major Maintenance Agreement with EGAT to provide major maintenance services, repair services, administrative services and additional services related to power plants. The compensation for such services is calculated on a cost plus basis. The agreement is effective for a period of eight years commencing from 24 September 2007.

211

31 Related party transactions (continued) The following material transactions were carried out with related parties : (continued) (c) Major maintenance expenses

For the years ended 31 December

Major maintenance expenses - Major shareholder

(d)

Consolidated 2011 Million Baht

Company

2010 Million Baht

215

259

2011 Million Baht

2010 Million Baht

131

The Company and subsidiary of the Company, KEGCO, have entered into Major Maintenance Agreements with EGAT in order for the latter to provide major maintenance services, repair services, administrative services and additional services related to the Company and subsidiaryâ&#x20AC;&#x2122;s power plants. The price for such services is calculated under the agreements on a cost plus basis and will be adjusted annually according to the Consumer Price Index. The agreements have been extended for a period of eight years, commencing from 7 December 2006 for the Company and a period of four years, commencing from 1 August 2008 for KEGCO. Trade receivables from and trade payables to a related party

As at 31 December Trade receivables - Major shareholder

Consolidated 2011 Million Baht 549

Outstanding trade receivables as at 31 December can be analysed as follows : 545 Not overdue Overdue below 3 months 3 Overdue 3 - 6 months - Overdue 6 - 12 months - Overdue over 12 months 1 549 Trade payables - Major shareholder

Company

2010 Million Baht

2011 Million Baht

2010 Million Baht

545

202

220

506 1 38 - - 545

202 - - - - 202

220 - - - - 220

212 Annual Report 2011

Electricity Generating Public Co., Ltd.

31 Related party transactions (continued) The following material transactions were carried out with related parties: (continued)

(e) Amounts due from and amounts due to related parties

As at 31 December

Amounts due from related parties - Major shareholder - Subsidiaries - Joint ventures Amounts due from related parties due over one year

Consolidated 2011 Million Baht

Company

2010 Million Baht

2011 Million Baht

2010 Million Baht

9 - 42 51

8 - 52 60

9 10 4 23

8 8 4 20

168

247

168

247

Amounts due to related parties - Major shareholder - 2 - 2 - - Subsidiaries - 4 4 - Other related party 10 - - 10 10 12 4 6 Right to share spare parts (other non-current liabilities)

(f) Loans to related parties and related interests

As at 31 December

Consolidated 2011 Million Baht

Company

2010 Million Baht

2011 Million Baht

2010 Million Baht

Long-term loan to a related party - subsidiary - Due within 1 year - Due over 1 year

- - -

46 596 642

46 642 688

For the years ended 31 December Interest income - Subsidiary

On 22 November 2005, the Company entered into a long-term loan agreement with EGCO Engineering and Service Company Limited to lend Baht 780 million. The principal is to be repaid annually in the amount of Baht 46 million from December 2009 to December 2025. The interest rate is MLR minus a certain margin and interest is payable on a semi- annual basis.

213

31 Related party transactions (continued) The following material transactions were carried out with related parties: (continued)

(g) Investment in debentures issued by a subsidiary and related interests

Consolidated 2011 Million Baht

Company

2010 Million Baht

2011 Million Baht

As at 31 December Investment in debentures (investment in marketable securities) - Subsidiary

For the years ended 31 December Interest income on investment in debentures of - Subsidiary

(h) Office building rental and service income The Company has entered into Office Building Rental, Service Charges and Management Agreements with subsidiaries and joint ventures. The agreements are renewed yearly. The price for management services is calculated under the agreements on a cost plus basis.

For the years ended 31 December

Company 2011 Million Baht

Office building rental and service income Management fee - Subsidiaries - Joint ventures

2010 Million Baht 7 7

7 7

53 50 103

35 33 68

- Subsidiaries

2010 Million Baht

(i) Directors and managements remuneration

For the years ended 31 December Short-term employee benefits Post employment benefits Total director and managements remuneration

Consolidated 2011 Million Baht 91 2 93

Company

2010 Million Baht 86 2 88

2011 Million Baht 66 1 67

2010 Million Baht 59 1 60

214 Annual Report 2011

Electricity Generating Public Co., Ltd.

32 Commitments and significant agreements 32.1 Commitments (a) As at 31 December 2011, the Company had commitments under Sponsor Support Agreements, which were made in respect of loans of subsidiaries, totalling Baht 354 million (31 December 2010: Baht 374 million). (b) As at 31 December 2011, the Company had commitments under the Counter Guarantee and Standby Letters of Credit issued on behalf of the Company to a subsidiary and joint ventures of Baht 1,077 million (31 December 2010: Baht 2,213 million). (c) According to the Power Purchase Agreements (PPAs) between the Companyâ&#x20AC;&#x2122;s subsidiaries and the Electricity Generating Authority of Thailand (EGAT) whose period between 15 years and 21 years, the subsidiaries have to provide bank guarantees, totalling Baht 140 million. The collateral is to be returned to such subsidiaries upon the expiry of the agreements. (d) As at 31 December 2011, the common shares of BLCP were pledged as collateral for the long-term loans of BLCP as described in Note 13.3. 32.2 Significant agreements In addition to the PPAs with EGAT which is one of the Companyâ&#x20AC;&#x2122;s major shareholders as discussed in Note 31, the Group had the following significant agreements: Water Supply Agreement A subsidiary of the Company has entered into a water supply agreement with the Provincial Waterworks Authority (PWA) for a period of 30 years. Under the agreement, the subsidiary is required to produce water for sale to PWA in Ratchaburi and Samutsongkram provinces. The PWA has an obligation to purchase water at the minimum volume and price agreed. Fuel Purchase Agreements Subsidiaries of the Company have entered into gas purchase agreements with PTT Public Company Limited (PTT). These agreements are effective for a period of 21 years and can be extended for another four years. A subsidiary of the Company has entered into a heavy fuel oil purchase agreement with PTT. The agreement shall be effective for a period of three years from 1 January 2005 to 31 December 2008. The agreement has been extended by one year and can be extended automatically for further one-year periods (in the event that there is no cancellation of the automatic extension). Operation and Maintenance Agreements A subsidiary of the Company has entered into power plant operation and maintenance, and power plant equipment maintenance agreements with three customers. The agreements, totalling Baht 694 million, are effective for a period of 5 to 6 years. In addition, the subsidiary has also entered into a subcontract for Supply of Spare Parts with a third party. This agreement is effective for a period of 2 to 3 years. The total contract price is US Dollars 14.48 million. Long-term Operation and Maintenance Agreements A subsidiary of the Company has entered into power plant operation and maintenance, and power plant equipment maintenance agreement with PTT Utility Company Limited. The agreements, totalling Baht 140 million, are effective for a period of 10 years.

215

33 Post statement of financial position event (a) On 18 January 2012, the Company invested in 90% of ordinary shares of Theppana Wind Farm Co., Ltd. which is the VSPP wind power project developer. The partial payment of Baht 2.5 million was made on 18 January 2012. The remaining payment of 7.5 million will be paid after the completion of the condition in the Share Purchase Agreement. (b) On 16 December 2011, the Company invested in the solar power plants of SPP Three Co., Ltd. (SPP3) and SPP Four Co., Ltd. (SPP4). In January and February 2012, the Company paid for a 99.99% interest in SPP4 from MEMC Singapore Pte Ltd. with an amount of Baht 291 million. SPP4 commenced its Commercial Operation Date on 24 January 2012. The counter-parties completed the condition in the agreement in January 2012. (c) On 2 February 2012, the Natural Energy Development Co., Ltd. (NED), which is a joint venture, called for additional paid-up share capital. The Group paid the additional paid-up share capital in the same portion as its original investment, totaling Baht 86 million.

216 Annual Report 2011

Electricity Generating Public Co., Ltd.

Audit Fee Audit Fee In 2011, EGCO and its subsidiaries paid the audit fee of 3,473,500 baht to the Office of the Auditors, comprising EGCO’s and subsidiaries’ audit fees of 1,986,390 baht and 1,487,110 baht, respectively. No other audit fee had been paid to the auditors or related parties to the auditors and the Auditors’ office. Non-Audit Fee EGCO’s and subsidiaries’ total non-audit fee was 28,499,322 baht which was already paid of 25,501,221 baht. In addition, EGCO and its subsidiaries would also be responsible for the expenses of undelivered work of 2,998,111 baht. The details of the non-audit fee were as follows : 1. Payment to the Office of the Auditors : In 2011, the non-audit fee for the advisory services on International Financial Reporting Standards and accounting purpose review at EGCO and its subsidiaries offices was 2,308,130 baht which was already paid of 1,938,130 baht to the Office of the Auditors. In addition, EGCO and its subsidiaries would also be responsible for the expenses of undelivered work of 370,000 baht. 2. Payment to Other Related Parties of the Auditors’ Office :

In 2011, the non-audit fee for the special purpose review and advisory services on offshore investment structure was 26,191,202 baht which was already paid of 23,563,091 baht to other related parties of the Auditors’ office. In addition, EGCO and its subsidiaries would also be responsible for the expenses of undelivered work of 2,628,111 baht.

The engagements of the office of the Auditors and its related parties to provide the non-audit work were reported to the Audit Committee to ensure that it would not involve any conflict of interest or any review of their own work which would contaminate the independence judgment of the auditors.

217

Report on the donation on behalf of all shareholders who elect to receive the Annual Report in the electronic form Starting from 2004, the Company had the policy to present the annual report in CD ROM format to save the cost and to reduce tree cutting over the long term. The Company committed to make a donation to the â&#x20AC;&#x153;Thai Forest Conservation Foundationâ&#x20AC;? which had the objective to conserve the environment on behalf of all shareholders who opt for electronic form. In 2010, the Company donated the cost saving in this regard to the Thai Forest Conservation Foundation on behalf of all shareholders in the amount of 2,653,248 baht. The Company thanks all our shareholders and stakeholders who have made this donation and the Company looks forward to your support in the future.

218 Annual Report 2011

Electricity Generating Public Co., Ltd.

General Information

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

Electricity Generating Public Company Limited (EGCO) Holding Company focusing on Power Registration 0107537000866 (No.BorMorJor.333) business and others related to power Head Office 14th, 15th Floor EGCO Tower, 222 business Moo 5, Vibhavadi Rangsit Road, Tungsonghong, Laksi, Bangkok 10210, Thailand Tel. 66 0 2998 5000

Fax 66 0 2955 0956-9 Rayong Power Plant Independent Power Producer (IPP) Bangkok Office 12th Floor, EGCO Tower Electricity Generating and supply Tel. 66 0 2998 5000 business Fax 66 0 2955 0931 Rayong Office 35 Rayong Highway No. 3191 Huay Pong District, Amphur Muang, Rayong 21150, Thailand Tel. 66 0 3868 1012, 66 0 3868 1016, 66 0 3868 1020 Sector Energy & Utilities Industry Resources Foreign Limit 44.81% Share of Minor 51.90% Shareholder (% Free Float) Website www.egco.com

5,300

Subsidiaries

5,264.65

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

Khanom Electricity Generating Company Limited (KEGCO) IPP Office 12th Floor, EGCO Tower Electricity Generating and supply Tel. 66 0 2998 5000 business Fax 66 0 2955 0932 Site Office 112 Moo 8, Tongnean District,

Amphur Khanom, Nakhon Sri-

Thammarat 80210, Thailand Tel. 66 0 7552 9173, 66 0 7552 9179 Fax 66 0 7552 8358

5,000

4,850

99.99

219

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

EGCO Engineering & Service Company Limited (ESCO) Engineering, operation and Office 13th Floor, EGCO Tower maintenance services for power Tel. 66 0 2998 5000 plants and manufacturers Fax 66 0 2955 0933 Site Office 35 Rayong Highway No. 3191 Huay Pong District, Amphur Muang, Rayong 21150, Thailand Tel. 66 0 3868 2611-4 Fax 66 0 3868 2823

400

99.99

North Pole Investment Company Limited (North Pole) Holding company focusing on 5,724.76/1 Office EGCO Tower investment in electricity generating Tel. 66 0 2998 5000 companies in foreign countries (181,096,921 Fax 66 0 2955 0956-9 USD) Oversea office 6th Floor, Tower A, 1 CyberCity, Ebene, Republic of Mauritius

31.6116/1

5,724.76/1

100

(1 USD)

(181,096,921 USD)

EGCO International (B.V.I.) Limited (EGCO B.V.I.) Holding company focusing on 11.06/1 Office EGCO Tower investment in electricity generating Tel. 66 0 2998 5000 companies in foreign countries (350,000 USD) Fax 66 0 2955 0956-9 Oversea office Akara Bldg., 24 De Castro Street, Wickhams Cay 1, Road Town,

Tortola, British Virgin Islands, P.O. Box 3136

31.6116/1

11.06/1

(1 USD)

(350,000 USD)

2.23/2

4,088.28/2

2.23/2

(54,500 EUR)

(100 EUR)

(54,500 EUR)

1.12/2

4,088.28/2

1.12/2

(27,500 EUR)

(100 EUR)

(27,500 EUR)

New Growth Cooperatief U.A. (Coop) Office EGCO Tower Tel. 66 0 2998 5000 Fax 66 0 2955 0956-9 Oversea office De Lairessestraat 154, 1075 HL

Amsterdam, The Netherlands

Holding company focusing on investment in electricity generating companies in foreign countries

New Growth B.V. (BV) Office EGCO Tower Tel. 66 0 2998 5000 Fax 66 0 2955 0956-9 Oversea office De Lairessestraat 154, 1075 HL

Amsterdam, The Netherlands

Holding company focusing on investment in electricity generating companies in foreign countries

400

Pearl Energy Philippines Operating, Inc. (PEPOI) Operation and Maintenance of QPL 6.32/1 Office EGCO Tower (200,000 USD) Tel. 66 0 2998 5000 Fax 66 0 2955 0956-9 Oversea office Barangay, Cagsiay I, Mauban, Quezon, Philippines 4330

EGCO Cogeneration Company Limited (EGCO Cogen) Small Power Producer (SPP) Office 13th Floor, EGCO Tower Electricity and steam generating and Tel. 66 0 2998 5000 supply business

1,060

100

6.32/1 100 (200,000 USD)

1,060

220 Annual Report 2011

Electricity Generating Public Co., Ltd.

Subsidiaries (continued)

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

Site Office

Fax 66 0 2955 0956-9 222 Moo 8, Mabkha District,

Amphur Nikhom Phattana, Rayong 21180, Thailand Tel. 66 0 3863 7051-8 Fax 66 0 3863 7063

EGCO Green Energy Company Limited (EGCO Green) Holding company focusing on power Office EGCO Tower business Tel. 66 0 2998 5000 Fax 66 0 2955 0956-9

175

Roi-Et Green Energy Company Limited (Roi-Et Green) SPP utilizing Biomass as primary fuel (EGCO Green is the company’s 95.00% shareholder) Office 13th Floor, EGCO Tower Tel. 66 0 2998 5000 Fax 66 0 2955 0956-9 Site Office 222 Moo 10, Nua-Muang District,

Amphur Muang, Roiet 45000, Thailand Tel. 66 0 4351 9825-6 Fax 66 0 4351 9827

180

70.30

Agro Energy Company Limited (AE) (ESCO is the company’s 99.99% shareholder) Office EGCO Tower Tel. 66 0 2998 5000 Fax 66 0 2955 0956-9

Trading/delivery service of fuel from natural scrap

99.99

Egcom Tara Company Limited (ET) (ESCO is the company’s 74.19% shareholder) Office 13th Floor, EGCO Tower Tel. 66 0 2998 5000 Fax 66 0 2955 0945 Site office • Plant 1 332 Moo 2, Pongsawai District, Amphur Muang, Ratchburi 70000,

Thailand • Plant 2 250 Moo 1, Pangpuay District, Amphur Damneansaduak, Ratchburi 70130, Thailand

Piped water generating and supply business

345

74.19

221

Joint Venture

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

Gulf Electric Public Company Limited (GEC) Holding company focusing on IPP Office 11th Floor, M. Thai Tower I, and SPP All Seasons Place, 87 Wireless Road, Lumpini, Phathumwan, Bangkok 10330, Thailand Tel. 66 0 2654 0155 Fax 66 0 2654 0156-7 Website http://www.gulfelectric.co.th

14,000

13,784.35

Gulf Power Generation Company Limited (GPG) Independent Power Producer (IPP) (GEC is the company’s 100% shareholder) Electricity Generating and supply Site office 64 Moo 2 Ban Pa District, business Amphur Kaeng Khoi, Saraburi 18110, Thailand Tel. 66 0 3624 8305 Fax. 66 0 3624 8314, 66 0 3625 1344

9,607

Gulf Cogeneration Company Limited (GCC) (GEC is the company’s 100% shareholder) Site office 79 Moo 3 Tandeow District, Amphur Kaeng Khoi, Saraburi 18110, Thailand Tel. 66 0 3624 6531 Fax 66 0 3624 8020

Small Power Producer (SPP) Electricity and steam generating and supply business

850

Nong Khae Cogeneration Company Limited (NKCC) (GEC is the company’s 100% shareholder) Site office 111/11 Moo 7 Nongplamor District, Amphur Nong Khae, Saraburi 18140, Thailand Tel. 66 0 3637 3676 Fax 66 0 3637 3691

Small Power Producer (SPP) Electricity and steam generating and supply business

1,241.72

Samutprakarn Cogeneration Company Limited (SCC) (GEC is the company’s 100% shareholder) Site office 745 Moo 2 Bang Pu Mai District, Amphur Muang, Samutprakarn 10280, Thailand Tel. 66 0 2709 0751 Fax 66 0 2709 1842

Small Power Producer (SPP) Electricity and steam generating and supply business

981.54

460

Gulf Yala Green Company Limited (GYG) SPP utilizing Biomass as primary fuel (GEC is the company’s 100% shareholder) Site office 80 Moo 1, Pron District, Amphur Muang, Yala 95160, Thailand Tel. 66 0 7325 2721 Fax 66 0 7325 2722

222 Annual Report 2011

Electricity Generating Public Co., Ltd.

Joint Venture (continued)

Ownership Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business (Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

Conal Holding Corporation (Conal) Holding company focusing on power 827.63/1 (EGCO B.V.I. is the company’s 40% shareholder) business in the Philippines Office EGCO Tower (26,181,409 Tel. 66 0 2998 5000 USD) Fax 66 0 2955 0956-9 Oversea office 4th Floor, Alphaland Southgate Tower

2258 Chino Roses Avenue Corner

EDSA, Makati City, 1232 Philippines Tel. (632) 836 4940, (632) 836 4403 Fax (632) 801 0593

103.37/1

827.63/1

(3.27 USD)

(26,181,409 USD)

78.40/1

7.84/1

(2.48 USD)

(248,139 USD)

82.19/1

307.47/1

(2.60 USD)

(11,719,503 USD)

257.74/1

85.98/1

237.55/1

(8,153,289 USD)

(2.72 USD)

(7,514,615 USD)

6,563.87/1

(207,641,268 USD)

Alto Power Management Corporation (APMC) Operation and maintenance services 15.69/1 (Conal is the company’s 60% shareholder) for power plants and consulting Oversea office 4th Floor, Alphaland Southgate Tower (496,278 USD) 2258 Chino Roses Avenue Corner EDSA, Makati City, 1232 Philippines Tel. (632) 836 4940, (632) 836 4403 Fax (632) 801 0593 Western Mindanao Power Corporation (WMPC) IPP 410.18/1 (Conal is the company’s 44% indirect shareholder) Electricity Generating and supply Oversea office 4th Floor, Alphaland Southgate Tower business (12,975,535 2258 Chino Roses Avenue Corner USD) EDSA, Makati City, 1232 Philippines Tel. (632) 836 4940, (632) 836 4403 Fax (632) 801 0593 Site office Sitio Malasugat, Sangali, Zamboanga City, Philippines Southern Philippines Power Corporation (SPPC) IPP (Conal is the company’s 44% indirect shareholder) Electricity Generating and supply Oversea office 4th Floor, Alphaland Southgate Tower business 2258 Chino Roses Avenue Corner EDSA, Makati City, 1232 Philippines Tel. (632) 836 4940, (632) 836 4403 Fax (632) 801 0593 Site office Bo. Baluntay, Alubel, Sarangani, Philippines Quezon Power (Philippines), Limited Co. (QPL) IPP (North Pole is the company’s 52.125% indirect Electricity Generating and supply shareholder) business Oversea office 62 H. Dela Costa, Mauban, Quezon Province, Republic of Philippines Site Office Barangay, Cagsiay I, Mauban, Quezon, Philippines 4330

17.6

52.125

223

Joint Venture (continued)

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

BLCP Power Limited (BLCP) (Since January 30, 2007) Office No. 9, I-8 Road, Map Ta Phut Industrial Estate, Rayong 21150, Thailand Tel. 66 0 3892 5100 Fax 66 0 3892 5199

IPP Electricity Generating and supply business

12,010

100

Nam Theun 2 Power Company Limited (NTPC) IPP 14,225.22/1 Office Unit 9, Tat Luang Road Electricity Generating and supply (450,000,000 Nongbone Village, P.O. Box 5862 business USD) Vientiane, Lao PDR Tel. (856-21) 263 900 Fax (856-21) 263 901 Natural Energy Development Company Limited (NED) Office 45/F The Offices at Central World 999/9 Rama 1 Road, Patumwan Bangkok 10330, Thailand Website www.ned.co.th

SPP Electricity Generating and supply business using solar power

3,161.16/1 (100 USD)

2,304

Other

12,010

11,806.93/1 35 (373,500,000 USD)

594

33.33

Ownership

Registered Paid-up Par Value Interest

Share Capital Share Capital Company Business

(Baht) (Direct+ (Million Baht) (Million Baht) Indirect) (%)

Eastern Water Resources Development and Water resources development and Management Public Company Limited (EASTW) management for supplying raw water Offic 23 - 26/F Eastwater Building, to the customers

1 Vibhavadi Rangsit Road, Jomphol, Chatuchak, Bangkok 10900, Thailand Tel. 66 0 2272 1600 Fax 66 0 2272 1601-3 Website www.eastwater.com Xayaburi Power Company Limited (Xayaburi) Feasibility study on Hydroelectric Office 215 Lanexang Avenue, Ban Siang project in Lao PDR

Yuen, Chantaburi District, Vientiane, Lao PDR Tel. (856-21) 223 215, 252 060 Fax (856-21) 215 500 Note : The Exchange rate as at December 30, 2011 /1 1 USD = Baht 31.6116 /2 1 EUR = Baht 40.8828

1,663.73

18.72

1,000

12.50

224 Annual Report 2011

Electricity Generating Public Co., Ltd.

Referenced Persons

Regulator

The Securities and Exchange Commission, Thailand

GPF Witthayu Building,

93/1 Wireless Road, Lumpini, Patumwan, Bangkok 10330, Thailand

Tel. 66 0 2695 9999, 66 0 2263 6499

Fax 66 0 2256 7711

Corporate Affairs ext. 9535, 9509

Department

E-mail : info@sec.or.th

Website : www.sec.or.th

Regulator

The Stock Exchange of Thailand

The Stock Exchange of Thailand Building,

62 Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand

Tel. 66 0 2229 2000, 66 0 2654 5656

Fax 66 0 2229 2030, 66 0 2654 5649

S-E-T Call Center 66 0 2229 2222

E-mail : SETCallCenter@set.or.th

Website : www.set.or.th

Share and Debenture registrar

Thailand Securities Depository Company Limited

The Stock Exchange of Thailand Building,

62 Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand

Tel. 66 0 2229 2800

Fax 66 0 2359 1259

Call Center 66 0 2229 2888

E-mail : contact.tsd@set.or.th

Website : www.tsd.co.th

Auditor 1. Ms. Nangnoi Charoenthaveesub

Certified Public Accountant (Thailand) No. 3044

2. Mr. Prasan Chuaphanich

Certified Public Accountant (Thailand) No. 3051

3. Mr. Vichien Khingmontri

Certified Public Accountant (Thailand) No. 3977

PricewaterhouseCoopers ABAS Limited

15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road,

Bangkok 10120, Thailand

Tel. 66 0 2286 9999, 66 0 2344 1000

Fax 66 0 2286 5050

225

Index of articles required for the 56-2 form (This is prepared in accordance with the notice of the Securities and Exchange Commission no. Kor Jor 40/2540 re : Criteria and Conditions of Information Disclosure on financial status and operation performance of Listed Company)

Topics

Page No.

1. General Information

218

2. Financial Summary

3. Business Characteristics

Business Operation

Revenue Structure

Industrial trend and Competition

4. Risk Factors

130

5. Shareholding and Management Structure

Shareholder

Management Structure

Director and Management Selection

Remuneration

Good Corporate Governance Report

Inside Information

Internal Control

127

6. Related Transaction

142

7. Management Discussion and Analysis

135

8. Financial Statements

Financial Statement

153

Audit Fee

216

226 Annual Report 2011

Electricity Generating Public Co., Ltd.

Glossary

Companies

EGCO Electricity Generating Public Company Limited Group companies, Electricity Generating Public Company Limited and its subsidiaries and joint venture companies. EGCO Group AE Agro Energy Company Limited APMC Alto Power Management Corporation BLCP BLCP Power Limited BV New Growth B.V. Conal Conal Holdings Corporation Coop New Growth Cooperatief U.A. CPOI Covanta Philippines Operating Inc. Chaiyaphum Chaiyaphum Wind Farm Company Limited DGA Diamond Generating Asia, Limited East Water Eastern Water Resources Development and Management Public Company Limited EGAT Electricity Generating Authority of Thailand EGCO BVI EGCO International (BVI) Limited EGCO Cogen EGCO Cogeneration Company Limited EGCO Green EGCO Green Energy Company Limited Egcom Tara Egcom Tara Company Limited ESCO EGCO Engineering and Service Company Limited GCC Gulf Cogeneration Company Limited GEC Gulf Electric Public Company Limited GECC General Electric Capital Corporation GEN Gulf Energy Company Limited GIPP Gulf IPP Company Limited GPG Gulf Power Generation Company Limited GPIQ GPI Quezon Company Limited GYG Gulf Yala Green Company Limited KEGCO Khanom Electricity Generating Company Limited NED Natural Energy Development Company Limited

227

NED Wind

2. Government Organizations

NKCC NMPC NTPC North Pole OneEnergy OPDCI PEPOI PGS Quezon REGCO Roi-Et Green SCC SPPC TEPDIA Theppana WMPC XPCL EPPO ERC NEPC PWA SEC SET

Energy Policy and Planning Office Energy Regulatory Commission National Energy Policy Council Provincial Waterworks Authority Securities and Exchange Commission, Thailand Stock Exchange of Thailand

3. Other Institutions

IOD JBIC COSO

NED Wind Company Limited Nong Khae Cogeneration Company Limited Northern Mindanao Power Corporation Nam Theun 2 Power Company Limited North Pole Investment Company Limited OneEnergy Thailand Limited Ogden Power Development Cayman Inc. Pearl Energy Philippines Operating Inc. Power Generation Services Company Limited Quezon Power (Philippines) Limited Company Rayong Electricity Generating Company Limited Roi-Et Green Company Limited Samutprakarn Cogeneration Company Limited Southern Philippines Power Corporation TEPDIA Generating B.V. Theppana Wind Farm Company Limited Western Mindanao Power Corporation Xayaburi Power Company Limited

Thai Institute of Directors Japan Bank for International Corporation The Committee of Sponsoring Organizations of the Treadway Commission

4. Technical Terms

Associated Company A firm is an associated company if : A) listed company or its subsidiaries hold 20.00% (twenty percent) or more, but not more than 50.00% (fifty percent) of its overall voting stock.

228 Annual Report 2011

Electricity Generating Public Co., Ltd.

B) A listed company or its subsidiary has influence, but not controlling power, over its monetary and operational policies. (The company is not deemed to be a subsidiary or joint venture.) Shareholdings referred to above include those held by related persons. Controlling Person This is a shareholder or a person who, through their behavior, can significantly influence the policy, management and operations of a listed firm. This is irrespective of the source of their authority : through their rights, contracts, or any others. Specially, a â&#x20AC;&#x153;controlling personâ&#x20AC;? includes, but is not limited to, one who : A) Has direct or indirect voted exceeding 25.00% (twenty-five percent) of the total company votes. B) Through their behavior, has control over the appointment or removal of company directors. C) Through their behavior, has de facto control or undue influence over policy, controlling those company members authorized to determine management and operational policies. D) Through their behavior, acts or has the power to act in the same manner as the company management. This includes those who hold other positions in the company, but are able to act in the same manner as the company management. IPP Independent Power Producer Major Shareholder Such person is a one whose holding in a listed firm exceeds 10.00% (ten percent) of the listed companyâ&#x20AC;&#x2122;s overall voting stock. PDP Power Development Plan SPP Small Power Producer Subsidiary Company Is : A) A company that a listed company holds over 50.00% (fifty percent) of its total voting stock. B) A company that the company referred to in (A) holds over 50.00% (fifty percent) of its total voting stock. C) A company that is held by another company in a chain of ownership, no matter how many number in the chain, ending with the company referred to in (B) and D) A company that the company referred to in (A), (B), or (C) hold over 50.00% (fifty percent) of its overall voting stock, either directly or indirectly. E) A company that the company referred to in (A), (B), (C), or (D) have controlling power over its monetary and operational policies, and are able to direct and gain interest on its activities. The holding of (A), (B), (C), or (D) is included those held by related persons.

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